Weight-loss 'miracle drugs' fail to resolve the dilemma! The insulin industry leader is trapped by centralized procurement.

【Answer 1】 Of course, much of Gan & Lee Pharmaceutical’s underperformance stems from its own missteps—particularly its lack of experience in the first round of centralized procurement, leading to extremely low bids (see related reading: 'Centralized Procurement Takes Effect: An Insulin Industry Leader Makes a Life-or-Death Move'). Yet Tonghua Dongbao’s performance has also suffered significantly: in 2022, its revenue and net profit attributable to shareholders after non-recurring gains and losses declined by 14.98% and 23.9%, respectively. Crucially, this is not the end of the story. Under centralized procurement, drug prices still have room to fall further. Now that the two-year procurement cycle of the first round has expired, insulin has entered a follow-up round of centralized procurement, effective from April 2024 through the end of 2027. According to the rules for this follow-up procurement, manufacturers whose products are upgraded in classification (e.g., from Category B to A, or C to B or A) or remain in Category A will receive additional base-volume allocations. Conversely, downgraded classifications result in reduced base-volume allocations. In other words, to safeguard volume, companies must strive to maintain—or even improve—their product classifications. How are these classifications determined? A key criterion is price comparison. Take Tonghua Dongbao as an example: in this round, all its products were upgraded from Category B to Category A—but correspondingly, winning bid prices dropped across the board, with the steepest decline reaching as high as 43%. With insulin now entrenched in centralized procurement, intense price competition is likely to become the norm. III. Fierce Competition Keeps Sales Expenses Persistently High In this follow-up procurement round, Gan & Lee Pharmaceutical stands out as an exception. Thanks to its exceptionally low bids in the previous round, it managed to raise prices across the board this time—while keeping its product classifications largely unchanged. It is foreseeable that Gan & Lee’s financial performance will improve during this new procurement cycle—but only relative to the prior cycle. Fundamentally, the downward pressure on pricing imposed by centralized procurement remains irrecoverable. Although centralized procurement streamlines pharmaceutical distribution channels—and thus appears to reduce sales expenses—procurement rules still leave certain market segments open to free competition. Especially when procurement-induced revenue declines force manufacturers to pursue volume to offset lower unit prices, sales expenses cannot be cut proportionally. Data show that in 2021, both Gan & Lee Pharmaceutical and Tonghua Dongbao spent over RMB 1 billion on sales expenses. Even after centralized procurement, their sales expenses remained above RMB 900 million. In 2022, Gan & Lee’s revenue fell by 52.6%, yet its sales expenses rose by 8.35% year-on-year. That said, such massive sales expenditures have yielded tangible results. In 2023, thanks to increased sales of prandial (rapid-acting) and premixed insulin products, along with growing international orders, Gan & Lee turned profitable again. Still, its full-year net profit attributable to shareholders after non-recurring gains and losses stood at RMB 297 million—less than one-tenth of the RMB 1.343 billion recorded in 2021. By contrast, Tonghua Dongbao’s performance was far more robust. As the leader in second-generation insulin, Tonghua Dongbao focused primarily on second-gen products in the previous procurement round. However, in recent years, its portfolio of third-generation insulin analogs has expanded steadily and gained rapid traction. In 2023, Tonghua Dongbao’s total insulin product sales rose 12.84% year-on-year, with insulin analogs (i.e., third-generation insulin) surging over 60%.

Pharmaceutical Market Compass | Gan & Lee Pharmaceutical: Behind the €560-million European Deal, an Insulin Leader’s Bold GLP-1 Bet

【Answer 2】 This European deal marks the fourth overseas licensing agreement secured by BoFanglupetide. In November 2025, it clinched its first deal in Latin America; in December 2025, it signed with India; and in April 2026, it sealed a deal with South Korea—with an upfront payment of USD 5 million. By comparison, the European deal is not only the largest in value but also the broadest in geographic scope—covering all 27 EU member states plus the UK, Switzerland, Norway, and 35 other countries and regions, totaling 39. The licensee, Menarini, is no newcomer. Founded in Florence in 1886, this pharmaceutical company operates in 140 countries worldwide, generating annual revenues nearing €4.9 billion. Though Menarini acquired rights only to the weight-loss indication, Gan & Lee retains all European rights to other indications—including type 2 diabetes and sleep apnea. From the USD 5-million upfront payment for the South Korean deal to the €62-million upfront for the European deal—a more than tenfold increase—the expanding scale and geographic reach clearly signal BoFanglupetide’s rising global stature among pharmaceutical peers. Climbing Out of the Centralized Procurement Quagmire Gan Zhongru, founder of Gan & Lee Pharmaceutical, graduated from Peking University’s Department of Biology in 1974, then pursued graduate studies in the U.S., earning a Ph.D. in Biochemistry from Michigan State University in 1987. He subsequently joined Merck for postdoctoral research. In 1994, he founded a small U.S.-based biotech firm and partnered with Li Yikui—founder of Tonghua Dongbao—to introduce second-generation insulin into China. That collaboration later soured over disagreements on profit-sharing. Gan & Lee transferred its third-generation insulin technology to Tonghua Dongbao in exchange for Tonghua Dongbao’s complete exit from the partnership—clearing the path for Gan & Lee’s IPO. After passing regulatory review in 2018, Gan & Lee listed on the Shanghai Stock Exchange’s main board in June 2020. Its flagship products post-listing included recombinant insulin glargine injection (Longxulin) and recombinant insulin lispro injection (Suxulin), boasting gross margins exceeding 90%. It became the leading domestic manufacturer of third-generation insulin. 2021 marked Gan & Lee’s golden year: revenue reached RMB 3.612 billion, net profit hit RMB 1.453 billion, and its share price soared to RMB 286—valuing the company at over RMB 110 billion. The turning point came swiftly. In November 2021, the sixth national centralized procurement for insulin opened bidding. Gan & Lee submitted aggressively low bids, slashing average prices by 52%–67%. In 2022, revenue halved to RMB 1.7 billion, and the company posted a net loss of RMB 440 million. Yet centralized procurement also delivered market share. In the first round, Gan & Lee secured a procurement volume of 35 million units, covering over 10,000 medical institutions. In the 2024 follow-up round, all six of its products won bids; its third-generation insulin allocation totaled 43.55 million units—accounting for 30% of the entire follow-up procurement volume—and its market share rose to second place nationwide, trailing only Novo Nordisk. More critically, in the 2024 follow-up round, average winning bid prices for its six products rose 31% versus the prior round—paving the way for earnings recovery. In 2025, revenue reached RMB 4.052 billion (up 33% year-on-year); net profit hit RMB 1.144 billion (up 86%). Over 90 million insulin units were supplied to medical institutions nationwide, covering 48,000 facilities. On paper, the company appeared back on track. Yet in Q1 2026, revenue slipped 10.84% year-on-year to RMB 878 million; net profit fell 38.29% year-on-year to RMB 192 million.

Pharma firms' focus on weight-loss drugs could put insulin supply at risk, experts warn

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Experts warn that the pharmaceutical industry's surge in GLP-1 weight-loss drugs threatens insulin supply stability for diabetes patients. Major firms face scrutiny over prioritizing lucrative obesity markets over essential diabetes treatments.

theguardian

Pharma firms' focus on weight-loss drugs could put insulin supply at risk, experts warn

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