as PRC pharma expands into ASEAN, its pricing disciplines, procurement rules and quality standards are moving with it
Volume-based procurement has, since 2018, pushed drug and device prices to the floor across PRC pharmaceutical and medical device sectors, compressing margins and leaving tens of thousands of manufacturers competing for diminishing returns in an overcrowded home market.
Eleven rounds of national procurement later, Beijing has begun adjusting the model: the 11th round, concluded in October 2025, required lowest-priced bidders to issue a declaration justifying cost basis. The innovation problem it created has not gone away.
Abroad, that same cost base looks like an advantage. Beijing is building four cross-border VBP platforms in Guangxi, Xinjiang, Tianjin, and Ningbo, each targeting a different region and designed to carry PRC pricing disciplines, procurement rules, and quality standards into overseas markets. For firms, the platforms open a new export channel. For Beijing, they are potentially institutional infrastructure: a way to make PRC rules the operating logic of health procurement across ASEAN, Central Asia, and further afield, ahead of anyone else setting the terms.
the platform play
The aim, as Wu Gang 吴刚 Tianjin Medical Insurance Bureau puts it, is to establish PRC standards for medical devices and equipment in international markets.
The platforms operate across the full procurement cycle: pricing benchmarks, payment, bonded storage, cold-chain logistics, delivery, cutting out intermediaries and installing PRC institutional infrastructure in their place.
China’s Drug Price Registration System, launched in December 2025, addresses a specific problem: when PRC firms take innovative drugs overseas, the only price on record is typically the VBP procurement price, beaten down through competitive bidding and too low to serve as an international reference. A separate price, drawn from commercial transactions outside VBP, is certified through the registration system. Firms can use this as an authoritative benchmark to negotiate with international buyers. Innovative drugs not yet subject to VBP that retain genuine commercial prices benefit most.
Beijing Merson Pharmaceutical received the first certificate on 13 January 2026 for a topical treatment for infantile hemangioma (a non-cancerous birthmark made of extra blood vessels usually appearing in the first weeks of life) and is now using it to enter Southeast Asian and European markets. The certificates are designed to strengthen PRC firms’ position abroad and attract more high-quality international therapies into the domestic market, says Wang Xiaoning 王小宁 NHSA (National Healthcare Security Administration).
Such a separation of commercial and procurement prices could reassure foreign firms that entering the PRC market will not undercut their global pricing.
ASEAN: proof of concept
Launched in January 2025, the most developed of the four, the China–ASEAN Regional Medical Procurement Platform in Fangchenggang, Guangxi, had by January 2026 grown to 224 domestic firms, receiving procurement requests for over 170 types of drugs and medical supplies from Vietnam, Thailand and beyond. Orders from Belarus and Pakistan show the platform already reaching well outside its ASEAN base. The first major deal of 2026 was a C¥10 million-plus (~US$1.4 million) transaction between Qilu Pharmaceutical and a Thai buyer.
Commercial momentum is building. An investment promotion event at the Fangchenggang zone on 28 April 2025 attracted 331 entrepreneurs from 207 domestic and overseas pharmaceutical firms, with 52 projects signed totalling C¥26.03 bn (~US$3.6 bn), spanning medical devices, innovative drugs, TCM trade, health food production, and international medical rehabilitation.
Three structural factors underpin the ASEAN opportunity.
Pharmaceutical markets in the region are growing at five to eight percent annually, well above developed markets. In 2024, the PRC’s three largest trading partners for pharma products (including drugs, medical devices and active pharmaceutical ingredients) were the EU+UK, the US and ASEAN, with total trade volumes of US$71.64 bn, US$34.1 bn, and US$16.8 bn, respectively. Exports to emerging markets recorded solid y-o-y growth, rising 5.7 percent to ASEAN, 11.4 percent to Latin America, and 10.9 percent to Africa. Meanwhile, the PRC’s share of pharmaceutical markets across BRI countries continued to expand, reaching a record high of 41.4 percent.
Countries such as Malaysia, Vietnam, the Philippines, and Thailand spend over 50 percent of their pharmaceutical budgets on imports, dominated by multinational originator drugs, leaving a gap that cost-competitive PRC firms are well placed to fill.
Healthcare spending across the region is also rising fast. Per capita expenditure grew at nine percent annually between 2000 and 2019, far above the two to five percent recorded in the US and Japan over the same period, according to PwC analysis. Yet healthcare spending as a share of GDP stood at just 3.8 percent in 2019, against 16.8 percent in the US and 10.8 percent in Japan, pointing to sustained demand for affordable healthcare.
The ethnic composition of Southeast Asia makes PRC clinical trial data more readily accepted than in Western markets. Hepatitis B is the clearest example: chronic HBV infection affects 15 to 20 percent of the population in parts of Southeast Asia, while the PRC alone accounts for nearly one-third of all chronic HBV cases globally, hence PRC antivirals developed and trialled in high-prevalence HBV populations are directly applicable in ways that drugs trialled in low-prevalence Western markets are not. The pattern repeats with nasopharyngeal carcinoma (NPC). East and Southeast Asia together account for 70 percent of global NPC cases, with incidence rates in southern China, Vietnam, Malaysia, and Indonesia running 10 to 50 times higher than in Western countries.
where it gets hard
ASEAN is favourable terrain for this institutional expansion: geographic proximity, RCEP framework, shared disease burden and established trade flows. If the model struggles there, Central Asia and CEE ambitions face steeper odds.
PRC governance does not translate neatly. In China, VBP is anchored by public hospitals as primary buyers, a structure with no direct equivalent across most of ASEAN, notes Feng Qiming 冯启明 Guangxi Medical University Centre for Health and Healthcare Policy Research. Procurement rules vary across the region, individual markets are small, pharmaceutical firms are few and scattered. Some countries rely on large public institutions, while others shift procurement to their provinces. Data security and privacy are regulated differently across the region, adding another layer of complexity.
Market access presents further barriers, warns Pang Jun 庞军 Guangxi Healthcare Security Administration. Mutual recognition of drug standards between the PRC and ASEAN remains limited. Several ASEAN member states tend to prefer Western-made medicines: MNCs entered these markets earlier and hold entrenched positions. Many focus on tech transfer, complicating standard harmonisation.
Market intelligence, too, is thin. Timely, reliable trade data rarely reaches PRC firms, leaving many navigating fragmented information and entering markets effectively from scratch, Pang adds. Without stable bilateral or multilateral trade frameworks, rivalry among PRC firms tips into price wars, dampening incentives to innovate and raising entry costs, with uncertain returns.
the strategic bet
Beijing’s ambitions extend beyond price. NHSA has set out three explicit goals for the platforms: expanding market access for PRC firms, exporting its domestic procurement model, and achieving mutual recognition of pharmaceutical rules and regulatory standards with partner countries.
The platforms are a bet that commercial imperative and strategic ambition can align. Gaining a foothold in ASEAN health markets on PRC terms makes the pricing disciplines and procurement rules PRC firms bring with them harder to displace. Standards, once embedded in supply chains and buyer habits, tend to stick.
ASEAN is the easiest test of the model. If the platforms struggle there, the Central Asia and CEE ambitions face a harder road: different governance systems, thinner trade relationships, and less institutional groundwork.
Beijing has built the infrastructure. Whether it becomes the operating logic of regional health procurement or remains a parallel channel that firms use when convenient depends on whether the platforms can deliver the regulatory coherence and market intelligence that firms need to build a lasting presence.
voices on going global
Li Xiaohua 李晓华 | Chinese Academy of Social Sciences Human Resources Education vice director
Li identifies five priorities for strengthening the PRC standardisation system. Governments and firms need to invest more in R&D, particularly basic research and tie standards development more closely to scientific innovation. Mechanisms for translating research into industrial applications should be strengthened throughout the full value chain of emerging industries. Standardisation work should engage universities, research institutes, industry associations, SMEs, and private firms, with greater disclosure of standard-essential patent information by international bodies. International cooperation needs to be deepened, with advanced economies on emerging industry standards and with Belt and Road countries through mutual recognition agreements. Dedicated standardisation talent should be cultivated through university programs, professional training, and online courses spanning the technical, legal, and policy dimensions of standards work.
Labour economics and employment policy expert Li holds degrees from Nanjing University, Shandong University, and CASS, and was a visiting scholar at the University of Michigan’s Ross School of Business. He has authored major blue-book reports on PRC employment, social security, and labour relations.
Liu Senlin 刘森林 | CICC Capital managing director and investment committee member
For Liu, medical technology investment turns on three questions: how strong is the clinical case, how large is the addressable market, and can the company sustain itself long enough to realise the opportunity.
Liu draws a sharp line between globalisation strategies for pharmaceuticals and medical devices. Strong clinical data or inclusion in treatment guidelines can open international markets for drugs. Devices, by contrast, need domestic validation before going abroad, and Liu advises most PRC medical device firms to consolidate at home first. Internationalisation means choosing target markets carefully, selecting the right entry mode, and working through product registration requirements, jurisdiction by jurisdiction.
An engineer and management specialist by training, Liu graduated from Tsinghua University and joined CICC Capital, a subsidiary of China International Capital Corporation, in 2011, where he sits on the investment committee. He has led major investments in healthcare, new energy, and consumer sectors, including United Imaging Medical and iKang Healthcare.
Wang Feng 王峰 | Yifan Pharmaceutical executive president
Wang argues that front-loaded costs make the pharmaceutical industry structurally dependent on multiple markets: no single market can sustain continuous investment in innovation. Successful overseas expansion, in his view, requires four things: differentiated and innovative products; capabilities in overseas clinical research and regulatory registration; well-matched international partners; and manufacturing and supply chains that meet international standards. On cross-border M&A, Wang advises firms to acquire capabilities rather than assets, with the value lying in integrating operational strengths to build genuinely global business models.
A clinician by training with an MBA, Wang spent over two decades in multinational pharmaceutical leadership at Novartis, AstraZeneca, and Santen Pharmaceutical before joining Yifan Pharmaceutical as executive president. His focus is on commercial strategy, cross-border partnerships, and expanding patient access to medicines.
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