Centralized procurement pressure: Localization of IVD raw materials has become a mandatory question

In July 2026, the Jiangxi Provincial Medical Insurance Bureau issued a notice to cancel the eligibility for centralized procurement selection, which caused a stir in the industry. Five companies and over 1400 product specifications voluntarily withdrew from the centralized procurement of liver function, kidney function, myocardial enzymes, and glucose metabolism biochemical reagents, with a maximum of 1170 product specifications cancelled by a single company. Brands such as Siemens and Aiweide are prominently listed. In the view of Hubei Xindesheng Material Technology, the first reaction is not shock, but an expected realization: the mirror of centralized procurement finally reflects the core pain point of the industry's long-term dependence on imported raw materials and lack of cost depth.

1. Why quit? It's not that I don't want to stay, it's that I can't stay

According to public information, the reason for the company's exit is summarized in four words - "unprofitable". Behind this is a shocking set of numbers:

The average reduction in the collection of liver function biochemical reagents was 68.64%, with the highest being 95.64%;

The average reduction rate of renal function myocardial enzyme collection was 77%, with the highest being 92%;

The average reduction in sugar metabolism during centralized procurement is 70%, with some products experiencing a reduction of over 98%;

Some companies have directly quoted a maximum low price of 0.03 yuan per person.

The key conclusion drawn by 21st Century Business Herald in an interview is that once the decline in the field of biochemical IVD exceeds 60%, no matter how much cost is cut, it is difficult to capture profits.

When terminal prices are compressed to this extent, a cruel question arises: where does the profit of reagent manufacturers come from?

The answer is - it can only come from upstream. The cost of raw materials is the largest variable cost in reagent production. Whoever can reduce the cost of raw materials while ensuring quality has the "ticket" to the era of centralized procurement. On the contrary, those enterprises that have long relied on imported raw materials and lack bargaining power and technological control over upstream are not facing the problem of "making more and earning less", but rather the survival crisis of "selling one box at a loss".

2.An overlooked truth: Domestic raw materials are not "spare tires", they are "trump cards"

For a long time, many domestic IVD reagent manufacturers have formed an inertia thinking: imported raw materials have good quality, high stability, and are worth it even if they are a little expensive. Before centralized procurement, this logic holds - there is room for terminal prices, and raw material costs can be passed on.

But centralized procurement broke all of this. When terminal prices are locked at extremely low levels, the "premium of imported raw materials" becomes an indigestible cost burden.

At the same time, an overlooked truth is emerging: after nearly 20 years of technological accumulation, the top domestic IVD raw material suppliers have the strength to compete with international brands in core categories such as biological buffering agents, enzyme preparations, and color substrates - not only benchmarking international standards in quality, but also forming differentiated advantages in cost-effectiveness, supply stability, and customized services.

The essence of centralized procurement is to exchange market capacity for price space. The essence of domestic raw materials is to break through import dependence through technological breakthroughs and free up profit space for downstream enterprises. The combination of the two is the correct path for China's IVD industry to overcome the centralized procurement cycle.

3.Our judgment: The "pit" left by centralized procurement needs to be filled with domestic raw materials

From the exit of 5 companies and 1400 product specifications, we can read at least three layers of signals:

The first layer signal: Centralized procurement is not a matter of "whether or not to participate", but a matter of "whether or not one is qualified to participate". Qualification does not lie in marketing ability, but in the bottom line of cost. Reagent manufacturers without core raw material support dare not show their trump cards when quoting for centralized procurement, because they do not know where their trump cards are.

The second layer signal: the more product specifications are withdrawn, the larger the market space is freed up, and the more urgent the demand for domestically produced raw materials with cost advantages becomes. The products that have withdrawn are not without clinical demand, but rather due to the unsustainable prices offered by the suppliers. Whoever can help reagent manufacturers maintain their price bottom line with lower raw material costs can fill this market vacuum.

The third layer signal: the industry is shifting from being "marketing driven" to being "supply chain driven". The core competitiveness of IVD reagent manufacturers is no longer about how wide their channels are or how well-known their brands are, but about how deep their supply chain is, how low their raw material costs are, and how stable their quality is. This is an irreversible trend.

4.Our underlying thinking: Raw material autonomy is not a multiple-choice question, it is a survival question

Returning to a fundamental question: why do 5 companies, with 1400 product specifications, choose to give up the market rather than continue supplying?

The answer lies upstream in the supply chain.

In the past decade, domestic IVD reagent manufacturers have become accustomed to "take it for yourself" - buying imported raw materials, adjusting formulas, packaging and labeling, and making considerable profits. This model ran smoothly before centralized procurement, as the terminal price was sufficient to cover the high premium of imported raw materials. But after the centralized procurement lowers the terminal price, the most fragile link in this chain is exposed: if the raw materials are not in their own hands, they have no initiative in cost, no confidence in quotation, and no guarantee of profit.

This is what we often refer to as' getting stuck '- it's not someone else who's holding you back, but your supply chain structure that's holding you back.

What Xindesheng is doing is essentially helping reagent manufacturers untangle the "stuck" link.

How to solve it? It's not about shouting slogans, it's about focusing on specific things:

Replacing imports no longer means compromising quality. Our biological buffer has a stable purity of over 99%, and the enzyme activity and stability are benchmarked against international mainstream brands. The chromogenic substrate has achieved kilogram level mass production - these are not "domestic substitutes", but "domestic competence".

Let supply security no longer rely on a single channel. The two production bases in Gedian and Huanggang, with an annual production capacity of 5000 tons for all categories, are not numbers, but the confidence of customers who dare to hand over raw materials to us without worrying about supply interruption.

Let cost control no longer rely on squeezing gross profit, but optimize from the source. If a reagent factory uses our enzyme preparation to replace imports, the raw material cost may decrease by an order of magnitude with the same detection performance - this space is the room for maneuver when quoting for centralized procurement.

Starting from  2005, to today's selection of Hubei Xindesheng as a single champion enterprise in the manufacturing industry in Hubei Province, we have only done one thing in the past 20 years: to improve the quality of IVD raw materials and connect the chain that relies on imports. This road is not fast, but every step is taken solidly.