24 securities institutions: the landing of "4 + 7 volume purchasing" has brought these impacts to the industry

"4 + 7 with volume procurement" is fierce, everything looks like the top of Mount Tai, the industry is reacting fiercely, people are in danger, and pessimism is spreading Under this situation, what will happen in 2019? We have studied the research reports of 24 securities institutions and come to the conclusion that in 2018, the news of 4 + 7 volume procurement stirred the pharmaceutical industry for nearly half a year In the conjecture that purchasing with volume is fully promoted and the lowest price is linked with the whole country, pessimism spreads But by 2019, something seems to have changed First, it is determined at the national level that the products not winning the bid can still be purchased According to the pilot program for centralized purchase and use of drugs organized by the State Council issued on January 17, the purchase volume is 60% - 70% of the total drug consumption of each pilot year, while the remaining consumption can still purchase other online varieties with appropriate price In this regard, Shanghai gives a specific implementation plan On the morning of January 17, Shanghai Pharmaceutical Institute convened a ventilation meeting for unsuccessful enterprises According to the meeting message, the price reduction proportion of the unsuccessful products is determined according to the price difference between the products and the winning products The price reduction proportion is divided into three grades, namely 10%, 20% and 30% This reduction is considered moderate How will the pharmaceutical market go in 2019? E drug managers combed the research reports of 24 securities companies, more than half of which gave optimistic forecasts, only two gave pessimistic sentiment in some areas, while the rest did not show a clear attitude 1 Reach a consensus: December 6, market recovery and long-term stabilization, is the national "4 + 7" bidding negotiation day for volume procurement Compared with the market expectation, the result of drug bidding is greatly reduced Entecavir of Zhengda Tianqing dropped by 96%; atorvastatin of Beijing Jialin cut its price by more than 80% The sharp price reduction bidding of pharmaceutical enterprises not only exceeded the expectations of many pharmaceutical people, but also greatly changed the profit expectations of pharmaceutical enterprises in the future Two days after the bidding, the pharmaceutical sector continued to fall sharply, and the market value of the pharmaceutical sector in Shanghai and Shenzhen stock markets evaporated by 300 billion in two trading days Hengrui medicine, with a market value of more than 200 billion yuan, fell 6.82% on Friday, evaporating 30 billion yuan in two trading days This is not the first time that 4 + 7 has evaporated hundreds of billions of medical plates One month later, the State Council and Shanghai Municipality issued top-level plans and local rules on volume procurement respectively The two policies are described as "moderate" by various brokers Shanghai's rules show that there is not only market space for the unsuccessful varieties, but also a more moderate price reduction than expected From the theme of the report of these 24 securities companies, repair and stability are frequent keywords This also roughly outlines the overall judgment of the securities institutions on 2019: policy stable promotion, pessimistic mood repair More than half of the securities companies have reached a consensus When the early policy was issued, the overall pessimistic expectation of the market was too high, and the pharmaceutical sector was a green space However, with the successive introduction of national programs and supporting documents from all over the country, the overall mood was eased In the future, the regulators will better control the overall implementation strength and performance of the volume purchase The period of extreme impact of the policy end on the industry has passed, and in the short term, the pharmaceutical industry will be affected by the policy end Markets, along with pessimism, will be fixed From the policy point of view, the recent major policy changes reflect the main tone of sound promotion According to CITIC Securities, from the current policy trend, although the top-level design of centralized purchase at the national level will not be changed in the future, in order to ensure the safety of drug supply in the implementation process, the policy will be steadily promoted step by step According to the document of the State Council, if there is a large difference between the drug price and the purchase price, the payment standard can be adjusted gradually and adjusted in place within 2-3 years On the whole, the policy is stable In addition to the documents of the central government and Shanghai, what makes securities companies predict that in 2019, the pessimistic mood will heal? 2 Biggest worry: will 4 + 7 expand? Previously, there was widespread concern in the industry that 4 + 7 would be extended to more regions and prices would be linked nationwide On January 17, the general office of the State Council issued a formal procurement plan One of the major differences between this plan and last year's online transmission plan is the cancellation of the statement that provinces are encouraged to follow the target Before that, the medical insurance bureau also stated that the volume purchase is a systematic project, and does not encourage the simple follow price This signals from the central level Most research papers of securities companies also believe that 4 + 7 will not be extended in the short term, nor will it be linked with a large range of prices Everbright Securities expects that in the future, the volume procurement will gradually extend in three directions, but not in the short term One is variety extension In this procurement, 31 varieties were officially given and 25 won the bid, all of which came from the varieties passing the consistency evaluation However, at present, the progress of conformity assessment is relatively slow As of January 20, 2019, only 168 product specifications passed the conformity assessment As a prerequisite for volume procurement, the slow progress of consistency evaluation will also affect the quantity of future volume procurement varieties Second, the price extension of unselected varieties According to the State Council document, for some drugs with relatively high prices that may increase the burden of patients, a transition period of 2-3 years shall be given to the adjustment of their payment standards For a long time, China's high price drugs use a large amount of drugs Once the same generic drugs implement a unified medical insurance payment standard, it will bring a huge burden to the patients who originally used high price drugs Therefore, the medical insurance payment standard for the selected varieties will not be greatly adjusted in a period of time Third, regional extension After the announcement of the "4 + 7" results, Shandong, Sichuan, Anhui, Fujian and other provinces once planned price linkage, but in Shandong Province's January 9 publicity through the consistency evaluation variety online, the price of 25 varieties of "4 + 7" did not decline significantly The document of the general office of the State Council also clearly requires that "on the basis of summarizing and evaluating the pilot work, gradually expand the coverage of centralized procurement, and guide the society to form long-term stable expectations." This shows that the extension of the region still needs some time, and the pilot work still needs to be summarized and evaluated Zhongtai securities also believes that the policy may be corrected in the later stage Most securities companies believe that the State Council issued a formal plan to strengthen the direction of bidding and procurement reform In the process of pilot implementation and summary of experience, the mode of procurement with volume will be gradually improved Everbright Securities pointed out that in the future, it will not rule out the possibility of "increasing the volume of procurement, but no longer winning the bid exclusively at the lowest price" 3 How does the industry shuffle? In the face of the big stick of policy end price reduction, premium and quality improvement, the pharmaceutical industry will usher in structural adjustment Bank of China International Securities forecasts that in 2019, the revenue growth rate of the pharmaceutical sector will be 15% - 20% Under the background of policy disturbance, the profit growth rate will be slightly lower than the revenue growth rate The reform will bring structural changes Generic drugs will enter the era of competition quality and cost Guoxin Securities pointed out that in the future, health economics will be the main reference for medical insurance, and the premise for medical insurance acceptance is relatively low global price, while the market is worried that the dividend of innovative drugs will be mainly enjoyed by foreign-funded enterprises According to the low per capita income of China, Guoxin Securities believes that this dividend will still be enjoyed by domestic enterprises combining with imitation and innovation, and China will still focus on consumption of imitation drugs in the future, Innovative drugs form increment At present, the model of generic drugs is consistency evaluation + centralized purchase, and the innovative drugs are the route of accelerating approval and listing + medical insurance negotiation According to this, Bank of China International believes that for the positioning of generic drugs, the direction to establish advantages can only be generic drugs with difficult process thresholds or improved dosage forms, while innovative drugs are the plates with friendly policies and definite long-term trends Bank of China International believes that complete innovation hardly exists in the current Chinese pharmaceutical industry, and does not conform to the current policies and national conditions, On the contrary, the improved new drugs (including biological similar drugs) are the direction of the biggest marginal income under the current policy environment such as health insurance BOCI is more optimistic about "me better" and "me best" R & D pipelines In 2018 and 2019, the approval of domestic new drugs continued to rise For the vast majority of listed companies and well-known biotechnology companies, almost every innovative drug is in a different stage And Hengrui, Beida and other securities companies are optimistic As one of the most powerful innovative pharmaceutical companies in China, Hengrui pharmaceutical has basically realized the overall layout of hot targets in its R & D pipeline, and has been intensively submitted for approval since 2018, entering the harvest season of new drug R & D for ten years Changjiang Securities expects Hengrui's innovative drug business to achieve revenue of more than 10 billion yuan and net profit of more than 4 billion yuan in 2020-2021 In terms of specific varieties, pyrrolidine is expected to become a me better drug and go global And Beida pharmaceutical is also experiencing the harvest period of innovative drugs At present, both ensatinib and patomumab developed by Beida are in the declaration period and are expected to be approved for marketing in 2019 At the same time, Beida also has a number of new drugs in the field of cancer have been accepted Under the current situation, the profitability of generic drugs will decline significantly in the future In the past, it has been difficult to sustain the development mode that relies on several core varieties to achieve sustained and rapid growth According to Changjiang Securities, this does not mean that the pharmaceutical sector has lost its growth space In the fields of characteristic APIs, high-quality generic drugs and so on, there are still many high-quality enterprises with solid barriers to business and profitability, which can resist the pressure of fee control and continue to achieve better and sustained growth The reconstruction pattern of generic drugs has begun, and the industry predicts that it will be the pattern of oligopoly competition in the future In this case, the top enterprises of innovative drugs are favored Although the leading domestic pharmaceutical enterprises are all generic pharmaceutical enterprises, they are also the leading force of pharmaceutical innovation in China from the perspective of R & D investment over the years and the barriers of clinical research, scientific and technological talents and patents.