With Volume Procurement To Accelerate Industry Differentiation: Some Large Enterprises Out Of The Pharmaceutical Companies Do Not Increase Profits.

Recently, the second batch of procurement results were announced, involving 18 provinces, and will be implemented nationwide in April. Hu Jinglin, the party secretary and director of the State Health Protection Bureau, said in a March 16th article "Qiushi" that the medical and health system reform has entered the deep water area, and that it will continue to promote centralized purchasing with quantity.

In March 23rd, Shi Lichen, director of Beijing Ding Chen medical management consulting center, also said in an interview with the twenty-first Century economic report reporter that purchasing with quantity has become the trend of the times, but now it has reached a stage of differentiation. Heng Rui medicine said that with the improvement of the drug approval standards, the consistency evaluation of generic drugs continued to push forward, with the gradual expansion of quantity procurement, the industry entered the stage of rapid differentiation, structural upgrading and elimination of backward production capacity.

In twenty-first Century, the economic report combing reporters found that in the second national procurement, enterprises abandoned the standard, and large enterprises were eliminated by "small businesses". For example, the selection rate of this foreign enterprise is only 4%, which is far lower than the 11.7% and 8% of the "4+7" expansion and the "4+7" volume purchase pilot.

In fact, the change brought by quantity purchasing to the pharmaceutical industry is enormous. However, Shi Lichen believes that while promoting the procurement of quantity, we should also pay attention to solving the problems of the back-end hospital, the total sales volume, and the repayment of funds. Otherwise, the enthusiasm of the enterprise will be lost, and it may also return to the old way of basic medicine and cheap drugs.

A company responsible for purchasing with quantity told the twenty-first Century economic report that many of the enterprises abandoned were due to cost. In the past, the imported product line was an advantage, and now the bidding process has become a cost disadvantage. In response to the call of the state, enterprises have invested a lot in new drug research and development, but the profits of generic drugs have been too low and there is no room for growth. Now, enterprises are also split up, such as Huai Hai pharmaceutical business profits have surged, while Guangsheng Tong does not increase profits.

Out of some big enterprises

In March 18th, the state health insurance agency issued a document that the current situation of the new crown pneumonia epidemic prevention and control situation continued to improve, and the production and life order was quickening and resuming. The medical insurance departments in various areas should actively combat the impact of the epidemic while winning the epidemic prevention and control blocking action, and make a comprehensive and solid implementation of the second batch of the results of the centralized production.

In the second batch of procurement, nearly 120 pharmaceutical companies took part in the bidding, including 21 foreign enterprises and 97 local pharmaceutical enterprises. Finally, 77 pharmaceutical enterprises were selected, and only 65% of the enterprises were selected. Among them, 17 foreign enterprises were defeated.

According to Zhang Ziran analysis of the medical doctor, the second batch of procurement involves 21 foreign enterprises (original research 20+ 1 imitation), and the "unit comparable price" is no higher than that of the same variety with the lowest "unit price ratio" of 1.8 times. The fusing mechanism makes many foreign enterprises dispel the fluke mentality. "4+7" can not lie in the ideal state when the price is not extended, so most of the quotations are abandoned. Only 4% of foreign enterprises were selected, far lower than 11.7% of the "4+7" expansion and 8% of the "4+7" urban pilot.

In March 20th, the Shanghai sunshine medicine purchase network disclosed the results of the "4+7" urban drug centralized procurement renewal, and carried out the relevant procurement work for the 25 varieties. Among them, 22 varieties were renewed, the prices of some varieties were reduced, and the other 3 varieties were replaced by their pharmaceutical companies.

Shanghai's renewal price list shows that the supplier of atorvastatin calcium is changed from Beijing Jialin pharmaceutical to le Pu pharmaceutical, and the price of 20mg * 7 is also reduced from 6.6 yuan / box to 3.84 yuan / box, a 41.8% decrease; the supplier of entecavir is replaced by Zhengda Tian Qing into Guangsheng Tang, and the tablet from 17.36 yuan / box (0.5mg * 28 tablets) is changed into 7.69 yuan / box (0.5mg * 28 grain) glue. Capsule agent, a drop of about 55.7%; Montmorillonite powder supplier changed from Hainan sage pharmaceutical to Zhejiang Hai Sheng pharmaceutical, the price from about 0.68 yuan / bag to 0.33 yuan / bag, the same decline of more than 50%.

According to the twenty-first Century economic report, it was learned from many sources that the 3 companies that had withdrawn from the above second batch of purchasing foreign enterprises and Shanghai extension were mostly caused by cost problems.

"The larger domestic enterprises, the production costs should be higher than the small and medium enterprises, foreign enterprises higher than the internal enterprises. In the past, we were proud of the introduction of world-class production lines, and now have become a competitive disadvantage. Many companies that win price cuts are infinitely close to the cost price. They can not only give consideration to quality but also give consideration to benefits. Guangsheng Tong's revenue increased by 3% last year. But profits fell by 35%. The good days of pharmaceutical companies are gone forever. "

It is also understood that atorvastatin calcium is the core product of Jialin pharmaceutical company, exclusive procurement of the first round of the purchase volume, but this is Jialin pharmaceutical industry to pay the price of 83% to the price of success, the expected sales growth did not appear, Jialin pharmaceutical in the performance commitments after the expiration of the sharp slide, and even triggered the Shenzhen Stock Exchange inquiry. A close to Jialin pharmaceutical industry insiders told the twenty-first Century economic news reporter that the main reason for the withdrawal of Jialin pharmaceutical from Shanghai is that the price is too low to bear the cost.

Although there are some pharmaceutical companies, such as revenue and profit decline, there are also some enterprises benefiting.

If the Huahai pharmaceutical company released the 2019 performance announcement, it was estimated by the financial department that the net profit in 2019 is expected to increase from 405 million yuan to 500 million yuan compared with the same period last year (statutory disclosure data), an increase of 376% to 465% over the same period last year. The profit increase of Huahai pharmaceutical industry is mainly affected by factors such as the price increase of some products, winning the winning bid in the current stage, and so on.

Heng Rui medicine said that with the improvement of the drug approval standards, the consistency evaluation of generic drugs will continue to push forward, and the volume purchase will gradually expand, and the industry will enter the stage of rapid differentiation, structural upgrading and elimination of backward production capacity. Enterprises with independent innovation ability and intellectual property protection will be in the dominant position in the future market competition.

The Asia Pacific pharmaceutical company said that centralized purchasing with volume reduced the intermediate links, reduced the marketing cost of enterprises, promoted the adjustment of marketing mode and the ecological purification of the industry. A substantial increase in purchasing volume can enable successful companies to reduce unit production costs through scale effect, and help to enhance market share and expand brand influence.

Zhang Ziran said that with the volume of procurement to significantly squeeze the profits of generic pharmaceutical companies, the era of high profit of our generic drugs is coming to an end, and it is close to the low profit margins of international generic drugs. Only those enterprises that have the advantages of integration of raw materials preparation, product clusters and productivity can dominate the market competition with the volume purchase in the future, and the sales ability will gradually weaken. At the same time, enterprises with R & D capability will be accelerated to transform to innovation.

For the cost of pharmaceutical enterprises, the State Health Insurance Bureau in January 17th answered reporters' questions, according to the relevant departments of more than 100 kinds of commonly used drugs audit survey, the average selling price of drugs is 17 times -18 times the cost of drug production, production costs account for only a very low proportion of drug prices.

A pharmaceutical company marketing director told the twenty-first Century economic analysis reporter that some pharmaceutical companies that master the integration of raw material and pharmaceutical preparations have great advantages in controlling costs, and the price of finished products is higher than that of raw materials. "API is sold by ton, medicine is sold by milligram, 1 tons can produce 1 billion tablets, raw material is a ton of tons, the cost of R & D of generic drugs is relatively low, and many pharmaceutical companies can afford the price."

Three problems need to be solved urgently.

Purchasing with quantity is the trend of the times. Hu Jinglin, the Secretary and director of the National Health Insurance Bureau, published in March 16th the sixth issue of "seeking truth" magazine published in 2020, entitled "struggling to relieve all the people's disease and medical worries." the article pointed out that the medical and health system reform has entered the deep water area, and has gone to the tough stage of tackling hard bones, and will continue to promote centralized volume procurement.

He said that the focus should be on purchasing the soft spot of the high and low drug prices, so as to achieve multiple effects such as lowering drug prices, improving the quality of drugs and promoting industrial upgrading. What's more, centralized purchasing with quantity has not only reduced the burden of medical insurance, but also created the conditions for standardizing medical behaviors and promoting the reform of public medical institutions.

Ding Yilei, deputy director of the Department of medicine price and tendering and purchasing of the state health insurance bureau, also said before that the procurement work will be carried out in a regular manner. "Not only the state, but also the local government. Not only should we evaluate the varieties, but we should also carry out the reviews. Not only can many products be purchased with quantity, but the exclusive products can still be purchased with quantity, such as exploring the procurement of bulk commodities. Not only in the field of pharmaceuticals, but also in the field of high value consumables and low value consumables. The idea of the state health insurance agency is to normalize the procurement of quantity, and to achieve the goal of spreading all over the country, making the procurement of quantity gradually become the dominant mode and mainstream mode of centralized procurement of medicine, and also enable the expectations of the business community and industry to change in a timely manner.

"The participation rate of multinational pharmaceutical companies is low, and some pharmaceutical companies withdraw from bidding because of cost problems, which is not a good signal." Shi Lichen told the twenty-first Century economic analysis reporter that although the production cost is low, it also faces problems of raw materials, labor costs, R & D investment and so on.

Previously, common drugs and cheap drugs disappeared in the market, often causing social concern, and there were many reasons for the disappearance of these drugs, and no profit was one of the important reasons for many pharmaceutical companies to give up.

The pharmaceutical companies in charge pointed out that in recent years, under the promotion of national policies, most pharmaceutical companies are now making innovative drugs, but this requires accumulation of technical personnel and funds. "Too much money can't be borne by ordinary businesses, and I hope I can give generic drugs enterprises some time."

Guangsheng Tang, who does not increase profits, said that the reasons for the sharp drop in profits were not only affected by the policy of medical insurance control fees and centralized procurement, but also because the company closely focused on the development strategy of transformation to innovative pharmaceutical enterprises. During the reporting period, R & D investment continued, innovative drug research and development was pushed forward according to plan, and GST-HG161 was in the climbing stage of clinical I phase dosage group.

Shi Lichen believes that if the state carries quantity purchase, if it can guarantee the situation of entering hospital, quantity and money, the enterprise is actually positive, but there are still some problems in the actual process, for example, the quantity of some pharmaceutical enterprises has not been guaranteed. "The price of drugs has dropped, not enough, and the total sales have dropped significantly. It is impossible for drugs to go to hospitals and only by health insurance and health sector policies. Companies still need to follow up. "

In Shi Lichen's view, we should look back at the present stage and solve the existing problems so that we can continue to proceed step by step. "Although the state, provinces and municipalities have formulated relevant policies, including the promotion of drugs into hospitals, the specific supply of drugs, the detailed rules for refund, etc., but many of them did not land in the course of operation, and enterprises could not do well in docking."

At the same time, the drug price of unlimited approaching cost has also aroused public concern and fear of quality problems. A multinational pharmaceutical company head of China has told the twenty-first Century economic news reporter that the development of China's generic drugs had been laid out a few years ago, but found that its price is not dominant in the bidding and wants to cut costs from the production line. It is found that if there is a reduction in its quality requirements, it will not be able to meet its global standards.

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