Dragons at the gate: new VBP proposals raise further China risk
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Key Views
The proposal establishes a three-tier VBP framework. National-level VBP covers Class A large equipment, including high-end radiotherapy platforms such as MR-linac and Accuray's Cyberknife, plus devices with initial installation costs exceeding RMB 50 million. Provincial-level VBP covers Class B equipment, including PET-CT, PET-MR, laparoscopic surgical robots, and conventional radiotherapy systems from Varian and Elekta. City-level VBP covers all remaining devices, with provinces required to complete one VBP round by end-2026.
The proposal also mandates a national registration database for high-value medical equipment to improve price transparency. Bidding will evaluate product quality, service, and price, factoring in consumables and maintenance costs.
Elekta (Sell) and GE HealthCare (Neutral) carry the highest risk. Siemens Healthineers (Neutral) and Philips (Buy) face comparatively lighter exposure. UBS estimates China accounts for less than 10% of Varian (Siemens Healthineers) segment revenue, with flagship platforms Truebeam and Halcyon potentially entering provincial VBP, facing competition from United Imaging and other local manufacturers. No specific forecasts or target prices were provided.
Outlook
UBS will host a call with its China team on July 14, 2026, to discuss implications.
Key exhibits
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