ESG Report 2024

30 Environmental, Social and Governance Report 2024 The United Laboratories International Holdings Limited 6.3.2 Participating in the National Centralised Procurement Currently, there are 140 million diabetes patients in China, and insulin plays a crucial role in controlling blood sugar levels for these patients, holding an irreplaceable position in diabetes treatment. Since insulin requires to be used long-term, the National Healthcare Security Administration organised the batch of national centralised procurement of drugs (Insulin-specific) and the selection results would be implemented from May of 2024. This centralised procurement involves the procurement of approximately over 240 million units of insulin in the first year of the national medical institutions, with an average price reduction of 3.8% compared with those of the first round. The Group's full line of insulin products was selected in this procurement, and through increasing our market share of insulin products, we aim to alleviate the financial burden of medication and benefit a wide range of diabetes patients. National Medical Insurance Drug List (NMIDL) National Essential Drug List (NEDL) Category A drugs on the NMIDL are clinically necessary, widely used, effective, and low-priced among similar drugs. The costs incurred from the usage of Category A drugs are paid in accordance with the provisions of Basic Medical Insurance. Category B drugs on the NMIDL are clinically optioinal, effective, and slightly more expensive than Category A drugs for the same class of drugs. The costs incurred from the usage of Category B drugs are first paid by the enrollee for a certain portion of the costs, then the paid for in accordance with the provisions of the Basic Medical Insurance. NEDL is the basis for medical institutions to equip and use drugs. The catalog contains 2 parts, which are usage for primary medical and health instituions, and usage by other medical institutions. The drugs in the NEDL are drugs that meet basic medical and health needs, have appropriate dosage forms, reasonably priced, can be ensured supply and are available to the public on a equiptable basis. The NEDL came into effect from 21 September 2009. 6.3.3 Equitable Pricing The Group places great importance on the accessibility and affordability of medications in developing countries and has established a fair and reasonable pricing mechanism. The mechanism takes into account factors such as production costs, industry supply and demand, healthcare system coverage and patient affordability, etc. It implements a relatively transparent and consistent pricing policy at the same level in both international and domestic markets to ensure that patients can access to the high quality medicines they need. In addition, the Group has established a Sustainability Committee to oversee the accessibility of healthcare services, further reinforcing our commitment to enhancing patients' access to healthcare services. To ensure price transparency, the Group actively responds to the domestic policies on the regulation of drug prices and strictly complies with the relevant laws and regulations so as to safeguard the fairness and transparency of drug prices. We have established a “Product Price Management System”, the scope of which applies to the sale of all bulk medicines and intermediate products, and sets the price based on market conditions and our own sales and supply situation. In order to effectively reduce the cost of drug supply, the Group has minimised intermediary steps as far as possible. Currently, generic drugs in the market are generally priced at 60-70% of the original branded drugs. In addition, we adjust the prices of similar products in developing and developed countries with a view to enabling more patients to access the treatment they need. During the Year, the Group did not have any quality control issues specifically for non-exclusive licensed drugs or drugs with non-exclusive licenses. During the Year, the average price of The United Laboratories’ of amoxicillin in developing country markets was approximately 14.5% lower than in developed country markets. In countries and regions such as the Middle East and Africa, the average price of amoxicillin’s was also about 11.8% lower than in other developing country markets. bulk medicines bulk medicines