DES procurement renewal prices continue to rise, with multinational share rebounding

Overview

This report tracks the results of the second renewal of China's national DES volume-based procurement. Goldman Sachs points out that the continued upward shift in the price range, a clearer volume-price linkage mechanism, and expanding hospital participation and PCI procedure demand together indicate that the procurement mechanism is moving away from the early phase of steep price cuts toward greater emphasis on price stability, supply assurance, and industry economics.

Core views

The core views include three points: first, renewal prices increased to Rmb839-949, further improving from Rmb730-848 in 2022, supporting the judgment that prices are stabilizing after procurement; second, multinational companies' share of submitted volume in this round rose to about 41%, reflecting that innovation capability, product portfolio, and hospital coverage remain competitive under the VBP framework; third, submitted demand of about 2.73 million units, growth in PCI procedures, and 4,468 participating hospitals show that end demand remains strong.

Analysis framework

The report centers on the national DES VBP renewal results, comparing price ranges across different rounds, effective price caps, tiered volume allocation mechanisms, companies' submitted volume shares, hospital participation, and changes in PCI procedure demand, while cross-validating the findings against prior medical device VBP research in the series.

Methodology notes

• Policy and Industry AnalysisVBP Renewal Results Tracking

  Volume-price linkage and tiered volume allocation

  The report focuses on price caps, bid prices, guaranteed volume allocation ratios, and hospital submitted demand to assess the impact of procurement on prices, market share, and industry profit margins.

• Competitive Landscape AnalysisMarket Share Comparison Between Multinational and Domestic Companies

  Submitted volume share

  By comparing multinational companies' submitted volume shares across different renewal rounds, the report evaluates whether the domestic substitution trend is continuing and the competitiveness of MNC brands at comparable prices.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• China medical device industry

  Directly benefits from stabilizing VBP renewal pricing and expanding demand

  Strengths

  Rising price ranges, broader hospital coverage, and growing PCI demand improve industry economics.

  Weaknesses

  Still affected by policy pricing and bidding rules, and outcomes may diverge across categories.

  Comparison

  Compared with the domestic substitution and price-cut pressure after the first round of procurement, this round reflects a more stable pricing framework.

  Risks

  Further expansion of VBP into other consumables and capital equipment may bring new pricing pressure.

• Multinational medical device companies

  Submitted volume share rebounded in the DES renewal

  Strengths

  Innovation capability, product portfolio, broad hospital coverage, and localized participation support share recovery.

  Weaknesses

  If price gaps widen again or policy tilts more toward domestic substitution, share recovery may be limited.

  Comparison

  This round's submitted volume share of about 41% is higher than about 32% in the first renewal, contrasting with the earlier domestic substitution trend.

  Risks

  Changes in VBP rules, price caps, and local competition may still affect revenue and revenue per procedure.

• Domestic DES and consumables companies

  Competing under a more stable pricing framework

  Strengths

  Local channels, cost structure, and adaptation capability to centralized procurement remain advantages.

  Weaknesses

  The rebound in multinational participation may weaken incremental share gains for some domestic companies.

  Comparison

  Compared with the stronger domestic substitution phase after the first round, this round places more emphasis on product quality, innovation, and portfolio breadth.

  Risks

  Insufficient guaranteed volume allocation or pricing strategy mistakes may affect capacity utilization and profit margins.

Key data

• DES second renewal price rangeRmb839-949Higher than the Rmb730-848 in the 2022 renewal.
• Effective price capRmb949Raised from the previous Rmb848.
• Tiered volume allocation mechanism90%/75%/60%The mechanism allows companies to make more rational trade-offs between price and guaranteed volume.
• Multinational companies' submitted volume shareabout 41%Higher than about 32% in the first renewal.
• Submitted demandabout 2.73 million unitsImplying about 14% CAGR relative to the 2022 renewal.
• PCI procedure volume2.21 million cases in 2025 vs. 1.29 million in 2022The report cites F&S data, showing continued growth in underlying procedure demand.
• Number of participating hospitals4,468Higher than the previous 2,408, indicating broader coverage and deeper PCI penetration.

Impact & implications

In terms of investment implications, the DES renewal results reduce market concerns about long-term price compression from medical device procurement. Higher price caps and the tiered allocation mechanism help stabilize companies' ASPs and profit margins, while the rebound in multinational companies' share indicates that innovation, product portfolio, and hospital coverage can still translate into incremental sales volume. Meanwhile, strong procedure demand and hospital expansion provide a foundation for post-procurement revenue recovery.

Risks

• If VBP expands to more consumables or capital equipment, other categories may face greater pricing pressure.
• If policy rules, price caps, or volume allocation mechanisms change, companies' pricing behavior and market share dynamics may readjust.
• The rebound in multinational companies' share may not be sustainable and still depends on innovation speed, local execution, and hospital preferences.
• If PCI demand growth slows, submitted demand and hospital procurement volume may fall short of expectations.

What to watch

• Whether VBP for consumables achieves broader coverage before the end of 2026 and whether it further extends to capital equipment.
• Price caps, tiered allocation ratios, and guaranteed volume arrangements in subsequent regional alliances or national renewals.
• Share and revenue-per-procedure trends of multinational companies such as Boston Scientific, Medtronic, and Abbott in China.
• Ongoing changes in PCI procedure volume, number of participating hospitals, and patient payment accessibility.
• VBP renewal results in other medical device categories such as artificial joints, IVD, spine, trauma, ophthalmology, and dental.