North China Pharmaceutical Co., Ltd. Was Severely Punished For The Interruption Of Supply And Centralized Purchase. Where Is The Road For Pharmaceutical Enterprises Under The "Double Dilemma" Of Winning The Bid And Losing The Election?

? ? ? On August 20, Huabei pharmaceutical was listed in the "violation list" because it failed to supply the agreed purchase quantity in Shandong Province, and was disqualified from participating in the centralized drug procurement activities organized by the state in the next nine months. On the evening of August 22, Huabei pharmaceutical announced that the main reasons for its suspension of supply were production capacity problems, the impact of the epidemic situation, registration and policy changes.

In fact, as soon as the above punishment news came out, the market was in an uproar. Huabei pharmaceutical is also the first enterprise to be punished for cutting off supply due to centralized purchase since the establishment of national centralized purchase system. Wang Hongzhi, general manager of the medical industry center of Beijing University vertical and horizontal management consulting company, pointed out to the reporter of 21st century economic report that it is a very serious punishment to be included in the list of violations. Drug supply interruption may be caused by a variety of reasons, and there are also acts of interruption of supply caused by winning the bid below the cost price. This time, a severe penalty ticket was issued to Huabei Pharmaceutical Co., Ltd., which also served as a warning to the illegal pharmaceutical enterprises.

However, with the normalization of centralized procurement and the expansion of the scope of drug procurement, many pharmaceutical enterprises are facing an embarrassing situation. There is a saying in the industry that if they fail to win the bid, they will face a test. In the past, if an enterprise with a large market wins the bid, it is a revolution of its own life; Failure to win the bid means there is no market. In fact, we can see the "prisoner's game dilemma" of many pharmaceutical enterprises from the current mid season, such as Hengrui pharmaceutical's net profit almost zero growth in the first half of the year due to factors such as centralized purchase.

A senior person in the pharmaceutical industry told the 21st century economic reporter that China's pharmaceutical industry is facing a period of transformation and upgrading, and pains are inevitable. However, with the improvement of industry concentration, the overall level of the industry will also be improved. Recently, sun Fanyang, chairman of Hengrui Pharmaceutical Co., Ltd., also said about its current predicament: "we have taken all the big generic products that should be taken, and there is not much left. In terms of innovative drugs, the most things will come out in the year after next year. Tumor and non-tumor are harvest time points. When they come out, they need to participate in the negotiation of national health insurance, and then they will be able to recover after 1-2 years of adjustment. "

Huabei pharmaceutical company is the first enterprise to be punished for cutting off supply due to centralized purchase since the establishment of national centralized purchase system. Visual China

The first A-share pharmaceutical enterprise to be severely punished for cutting off supply due to centralized purchase

On August 20, Huabei pharmaceutical failed to supply the agreed purchase quantity in Shandong Province according to the agreement. Huabei pharmaceutical was listed in the "violation list" and was disqualified from participating in the centralized drug procurement activities organized by the state from August 11, 2021 to May 10, 2022.

Huabei pharmaceutical issued an announcement on the evening of August 22 in an emergency response, saying that the main reasons for its interruption of supply were production capacity problems, the impact of epidemic situation, registration and policy changes. It also said that the sales revenue of ibuprofen sustained-release capsules in 2020 was 502200 yuan, accounting for 0.0044% of the company's operating revenue in 2020; From January to July 2021, the sales revenue of the product is 2.9381 million yuan, which will not have a significant impact on the current operating performance of the company.

On August 23, the person in charge of Huabei pharmaceutical told the reporter of 21st century economic report that the selected regions of ibuprofen sustained-release capsules in the national centralized drug procurement project mainly include seven provinces and cities including Shandong Province. At present, its supply in Shandong Province has been stopped, but the supply in other six provinces and cities is normal.

"In fact, the company's current capacity is not enough. However, as long as we can speed up the approval progress of the expansion project of ibuprofen sustained-release capsules and strive to complete the approval before the end of September, the estimated annual production capacity after expansion will reach 100 million capsules, which can guarantee the supply of products in other selected provinces. " The relevant person in charge of North China Pharmaceutical said.

In Wang Hongzhi's view, the quantity of purchasing with quantity is announced in advance, so enterprises need to evaluate their own capacity. However, Huabei pharmaceutical's supply interruption was due to its insufficient evaluation of its own production capacity.

"In fact, the bidding document is an agreement before the procurement, and Huabei pharmaceutical has violated the contract and should have been punished, but whether the punishment is reasonable or not is questionable. Because at least 70% of the market share of the pharmaceutical market is in the public hospital market, such punishment means that enterprises will lose huge market share and even affect their survival. " Wang Hongzhi said.

However, in the previous implementation process of centralized procurement with volume, the phenomenon of supply interruption of selected products has also occurred in other regions. According to statistics, since the first round of centralized drug procurement in 4 + 7 pilot cities in 2018, according to incomplete statistics of local circulars, it is found that in Zhejiang, Hebei, Yunnan, Hunan and other places, the supply of selected drugs in centralized procurement has been successively interrupted, involving Cefmetazole (sodium), entecavir dispersible tablets, atorvastatin calcium tablets, risperidone tablets, etc., and the supply enterprises include Dongrui Pharmaceutical Co., Ltd Many pharmaceutical enterprises, such as Xing'an Pharmaceutical Co., Ltd., Changzhou No.4 Pharmaceutical Co., Ltd., and Yangtze River Pharmaceutical Group Co., Ltd.

Shao Rong, executive deputy director of the National Center for drug policy and pharmaceutical industry economics, China Pharmaceutical University, and member of the law revision expert group of the State Drug Administration, once told the media that the procurement cycle of general drugs ranges from one year to three years. Before the bidding starts, the bidding unit will take out the quantity of drugs purchased, To judge whether its production capacity (including potential capacity) can meet the needs of bidding, so as to decide to participate in the bidding. However, it is impossible for both bidding and tendering parties to accurately predict the change of drug market demand. In addition to drug price reduction, there are also many other factors (including the new epidemic situation and other emergencies) to induce consumption. The expansion of the market occurs from time to time, which inevitably leads to the shortage of some drugs.

Wang Hongzhi also told reporters of the 21st century economic report that there may be irresistible factors, such as market fluctuations, shortage of raw materials, which may cause the phenomenon of supply interruption. For example, Suzhou Dongrui had been unable to guarantee the normal supply of cefmetazole sodium for injection due to raw material supply problems.

However, the third batch of national procurement documents stipulates that "in case of failure to supply the selected varieties or disqualification of the selected products in the selected enterprises, which makes the agreement unable to continue to be performed, the suppliers who are determined to be substitutes from other selected enterprises in this centralized purchase of drugs shall be supplied by the substitute enterprises according to the selected price of the substitute enterprises, The additional expenses arising from the guarantee of supply shall be borne by the enterprise which is unable to fulfill the agreement. "

On August 19, Shandong public resources trading center announced that Zhuhai Rundu Pharmaceutical Co., Ltd. was the substitute enterprise of Ibuprofen Sustained Release Capsules in Shandong Province.

Winning the bid or not is a difficult problem

As for the situation of North China Pharmaceutical's interruption of supply, the industry has also speculated that during the supply period of centralized purchase and selection enterprises, the price of API may rise, the labor cost will rise, and the profit will be low, which will make North China Pharmaceutical choose to abandon the standard.

In fact, enterprises will face certain difficulties whether they win the bid or not. After winning the bid, although the profit is low, but the market share increases; Although the profits are kept, the market share will be greatly reduced.

For example, Hengrui pharmaceutical's 2021 semi annual report shows that the setback of its performance is affected by the national and local procurement, and the company's traditional generic drug sales decline.

In November 2020, the third batch of centralized purchase of 6 drugs involved. During the reporting period, the sales revenue of Hengrui pharmaceutical decreased by 57% month on month. In addition, since March 1, 2021, its main product, carrizumab, began to implement the medical insurance negotiation price, with a decrease rate of 85%. In addition, many problems, such as the difficulty of entering the hospital and the different implementation time of medical insurance in different places, caused the negative growth of the sales revenue of carrilizumab.

It is worth noting that on June 23, in the fifth round of centralized bidding, Hengrui pharmaceutical products such as oxaliplatin injection, cisatracurium benzenesulfonate injection, dutasteride soft capsule, docetaxel injection, ropivacaine hydrochloride injection and palonosetron hydrochloride injection were proposed to win the bid.

Hengrui pharmaceutical has also said in the announcement that the price to be selected is significantly lower than the original bid winning price, which may cause certain pressure on sales performance. For example, the price of docetaxel injection dropped by 97% after winning the bid.

In addition, Hengrui pharmaceutical also failed to meet the standard. Due to the quotation strategy of Hengrui, the bid of iodixanol injection and Gelong ammonium bromide injection were lost.

According to Hengrui pharmaceutical announcement, the total sales volume of iodixanol injection and Gelong ammonium bromide injection in 2020 will be 1.873 billion yuan, accounting for 6.75% of the company's operating revenue in 2020; The total sales volume in the first quarter of 2021 is 491 million yuan, accounting for 7.09% of the company's operating revenue in the first quarter of 2021. Among them, iodixanol injection belongs to its heavy contrast agent product. It is understood that in 2020, the bid winning price of iodixanol injection of Hengrui medicine in public hospitals will be about 600 yuan / piece.

With the normalization of centralized procurement and the expansion of the scope of drug procurement, each round of centralized procurement, whether winning or not, is a major test for pharmaceutical enterprises.

Shi lichen, head of Beijing Dingchen medical consulting management center, told reporters of the 21st century economic report that after the normalization of centralized purchasing, the economic pressure of enterprises will be increasing.

Wang Hongzhi pointed out to the 21st century economic reporter that at present, enterprises are in the process of transformation and upgrading, and it is impossible for any industry to maintain double-digit growth, but there is still room for further development.

Sun piaoyang also pointed out: "the problems encountered by the company are the problems that all Chinese generic pharmaceutical enterprises will encounter. All of them will encounter a cliff like decline in generic drugs and the gradual growth of innovative drugs."; In the face of today's situation, we don't feel sudden at all. We are still at ease. Everything develops in a spiral way, not in a straight line. "

"Under the influence of current policies, enterprises need to think about the logic of generic drug collection and innovative medicine. In the centralized purchase, how to choose the strategy, including the price strategy, the market proportion distribution inside and outside the hospital, etc; How to find real unique innovation under the heavy investment can we have more say in the future innovative drug market. " The above senior personages in the industry pointed out to the reporter of the 21st century economic report that enterprises should adjust the product structure and business model.

Shi lichen judged that the varieties of collectible products may continue to expand, which will also make the industry form a huge watershed“ Enterprises should optimize the product structure as soon as possible, carry on the transformation of business model and marketing mode. At the same time, we should also grasp the market outside the policy. "

?