From monopoly of 3.5 billion to less than 200 million Bayer is besieged by 23 companies including CSPC

The fifth batch of collective procurement is finally coming
.
For pharmaceutical companies, a few are happy and a few are sad
.
There are a total of 58 varieties in the collective picking list announced on June 2.
Among them, the most competitive variety is Rivaroxaban originally developed by Bayer.
There are as many as 24 participants
.

One year later, following the second batch of concentrated acarbose, Bayer will once again usher in the big test
.
Rivaroxaban, a large variety of which it monopolizes the market, is included in the fifth batch of collective procurement list, and as many as 23 "barefoot" competitors have been reviewed
.

Rivaroxaban is the world's second most popular product among the new generation of "saban" oral anticoagulants.
It was jointly developed by Bayer and Johnson & Johnson and was approved by the FDA on July 1, 2011 for listing in the United States, February 7, 2018 Approved by CDE for listing in China
.
Global data show that the global sales of rivaroxaban in 2019 exceeded 6.
9 billion US dollars, and in 2020 it was as high as 7.
5 billion US dollars
.

Bayer, which is responsible for markets outside the United States, has benefited from the significant increase in sales in China and Europe, and sales in 2020 will reach 4.
515 billion euros
.
According to data from Minai.
com, in 2019 and 2020, the terminal sales of rivaroxaban in public medical institutions in China will reach 2.
5 billion and 3.
5 billion respectively
.
Although domestic generic drugs have been approved one after another, due to patent barriers, the first copy of CP Tianqing did not officially go on sale until mid-December 2020, which means that Bayer monopolized the previous market share in China
.

According to the rules of this centralized procurement document, based on 80% of the purchase volume, the maximum purchase amount of Rivaroxaban involved in Bayer's two product regulations is 1.
44 billion yuan.
If the 10mg dosage form is divided equally by the number of the 10 short-listed companies, If Bayer finally wins the bid, the theoretical maximum purchase amount that can be obtained is only 120 million yuan
.

This situation is very similar to Bayer's Baier Tang Ping before
.
Acarbose is the drug with the highest share of the domestic type 2 diabetes market.
In 2018, the domestic market was approaching tens of billions, of which Bayer accounted for nearly 70%
.
However, in 2020, Baitangping has been hit by medical insurance and centralized procurement.
In the second batch of centralized procurement, three generic drug competitors are eager to try
.

Before the start of centralized procurement, it is generally believed that Bayer's market will be carved up
.
Wang Tong, then vice president of Bayer Prescription Medicines China and Asia Pacific, also admitted at the meeting of E-pharmaceutical managers that Baitang Ping is facing very big competition and challenges, and centralized procurement is likely to have a "fatal" impact
.
Bayer even initiated internal adjustments of the company, re-allocating part of Baitangping's sales team or sinking to the grassroots market to alleviate the impact
.

However, Bayer's final choice was far more influential than the job transfer
.
In January 2020, Bai Tang Ping won the bid with a 78% price reduction and a "floor price" of dime per tablet.
At the same time, the two competitors of Beijing Fuyuan and Huadong Medicine were squeezed out of the table, bursting the second round of centralized procurement.
The biggest upset
.
It is said that representatives of enterprises on the scene chanted unfair competition, and the media analyzed that Bayer's winning bid price may be lower than the cost price
.

Regardless of the truth, Bayer finally got the admission ticket for mass purchase thanks to the big price cut
.
But does being at the poker table mean victory? Only from the sales volume of Baitangping after the collection, the answer seems to be uncertain
.
In the second quarter of 2020, Baitangping’s global sales were only 40 million euros, a year-on-year decline of 74.
2%
.
In the first half of the year, cumulative sales were 156 million euros, a year-on-year decline of 54.
4%.
It became the company's product with the largest sales decline during the financial reporting period.
During this period, the media broke news that offline pharmacies and even hospitals across the country were out of stock
.
In the 2020 full-year financial report, Bayer will directly obey Tang Ping and will no longer announce its sales results
.

In the face of the "dilemma" of rivaroxaban that is several times fiercely competitive, will Bayer, which has "experience" with Acarbose, make the same choice this time?

On June 3, the day after the fifth batch of centralized procurement documents were released, Eli Lilly announced that it had signed an agreement with Menarini, an Italian pharmaceutical company, to sell Cialis (tadalafil) to the Chinese mainland market.
Right
.
Coincidentally, tadalafil was also in the second round of centralized procurement, but in the end it was Jiangsu Tasly and Changchun Haiyue that won the bid, and Eli Lilly was out
.

01 Multinational pharmaceutical companies with the right to speak

Bayer is not the only multinational pharmaceutical company that is plagued by this issue on what choice should be made in the fifth batch of centralized procurement
.
According to data from Meinenet, among the varieties adopted this time, there are as many as 25 original research drugs that will account for more than 40% of the market share in China in 2020
.

Faced with the almost inevitable downward pressure on sales, I heard the news about the "organizational structure adjustment" of a multinational pharmaceutical company's sales team from time to time after centralized procurement
.
However, in addition to layoffs, some MNCs have sought to respond to the impact of centralized procurement in a positive way
.

Shifting the focus of development to innovative drugs is one of them
.
In August 2020, Bayer announced a commercial cooperation with Zhangjiang, an innovative pharmaceutical company, Hua Medicine.
Bayer received an advance payment of 300 million yuan and a milestone payment of up to 4.
18 billion yuan to obtain the latter’s new diabetes treatment drug dorzagliatin in China.
The right to exclusive commercialization
.

AstraZeneca, which is familiar with the Chinese market, is even more proficient
.
On the one hand, it continuously introduces the commercial rights of new products and enriches the product level; on the other hand, in the out-of-hospital market, it vertically penetrates the grassroots county market, and horizontally cooperates with pharmacies, insurance, diagnosis, and digitalization to build its own circle of friends
.

Just 7 days ago, AstraZeneca introduced the commercialization rights of bevacizumab in 21 provinces, municipalities and autonomous regions in China from Boan Biotech
.
This is the second collaboration between AZ and Luye.
The last authorized product was Xuezhikang capsules
.
In February of this year, AstraZeneca obtained Junshi PD-1 monoclonal antibody drug.
In addition, it also cooperated in testing, Chinese medicine and other products, such as Nuohui early cancer screening products
.

With more and more rights and interests in agent products, AstraZeneca released a bold statement: to build AstraZeneca into China's greatest pharmaceutical company, with annual sales of 15 billion US dollars, equivalent to nearly 100 billion people
.

In terms of the out-of-hospital market layout, in April 2020, AstraZeneca announced its entry into the county-level oncology market and established a county oncology team to promote all of its oncology products and integrated diagnosis and treatment services
.
Up to now, the AstraZeneca team has covered 1,600 counties and the team has nearly 4,000 people
.
In terms of expanding the circle of friends, the 2021 AstraZeneca China Ecosystem Conference will attract more than 600 innovative companies and institutions from various fields such as equipment, digitalization, insurance, and funds to participate
.

What action will the multinational pharmaceutical companies that have tended to calm down after many concentrated purchases?

02 A local pharmaceutical company wearing shoes and barefoot

Of course, it is not only multinational pharmaceutical companies that need to deal with the predicament, but also local pharmaceutical companies that have a larger share of their products
.

According to incomplete statistics from E-pharmaceutical managers, China Biopharmaceuticals, Qilu Pharmaceuticals, Yangzijiang Pharmaceuticals, and Kelun Pharmaceuticals all have more than 10 shortlisted products, and they are the "big households" of this batch of centralized procurement domestic enterprises
.
China Biotech is at the forefront with 14 varieties, followed by generic drug giants Qilu, Yangzijiang and domestic infusion leader Kelun with 13, 12 and 10 varieties respectively
.
Hengrui Medicine, Chengdu Better, Aosaikang Pharmaceutical, etc.
all have more than 6 products shortlisted
.

Betting on innovation to withstand the impact of centralized procurement seems to be the unanimous choice of pharmaceutical companies.
The best example of centralized procurement before this is Xinlitai.
Although the performance of core products was pressured by the failure of the core product, the stock price once fell and fell, but finally invested The author still sees its potential for innovation, and the company has also ushered in a return of value
.

According to statistics, it will be found that Hengrui has collected a lot of drugs, but it shows that the impact does not seem to be significant
.
Taking this centralized product of iodixanol as an example, there are mainly five iodixanol sales companies in the domestic market to carve up the market, namely Hengrui Pharmaceutical, GE, Beilu Pharmaceutical, Zhengda Tianqing, Yangtze River, etc.
The data shows Hengrui Pharmaceuticals accounted for about 55% of domestic market sales, which has exceeded 35% of GE's.
It has become the largest iodixanol sales company in the domestic market.
Yangzijiang ranks third with a market share of about 10%
.
According to data from Minai.
com, the terminal sales of iodixanol in China's public medical institutions in 2020 is 4.
2 billion, and it is estimated that Hengrui Pharmaceutical's iodixanol sales will exceed 2 billion at least
.

According to the rules of this centralized procurement document, the maximum purchase amount of iodixanol is 1.
87 billion based on the 80% purchase volume.
If the 100ml:32g (I) dosage form is equally divided by the number of the 6 most short-listed companies, if Hengrui wins the bid , The theoretical maximum purchase amount that can be obtained will only be 310 million yuan
.

How will Hengrui respond? Previously, Hengrui had warned investors about the impact of the fifth batch of centralized procurement on the company in this year's investment survey minutes, and said frankly that it was ready
.
Hengrui's response measures are to focus on innovative drugs, accelerate the launch of new drugs, and expand sales of new drugs to counter the impact of centralized procurement
.
In 2019, Hengrui said frankly: cut off generic drugs
.
Some analysts said that by the time of the fifth batch of centralized procurement, the sales growth brought by PD-1 has been able to offset the impact of centralized procurement on Hengrui
.

Including companies like Qilu Pharmaceutical, the "Centralized Procurement Winning King", on the one hand, through lean management to reduce costs as much as possible, on the other hand, they are also making efforts to innovate; traditional large pharmaceutical companies, including Yangtze River Pharmaceuticals, have already seen imitations.
Pharmaceuticals have no way out and are accelerating innovation and transformation
.

Looking at it this way, it seems that those barefoot companies whose products have not yet entered the market seem to benefit the most from centralized procurement, especially if many small companies are shortlisted, it seems that they will have the possibility of splitting the cake from the giants
.
However, challenges remain
.
In April this year, Shanghai’s centralized procurement document set comprehensive evaluation indicators, stipulating that the drug with the highest score will be eligible for the proposed selection
.
There is a view that this move is more beneficial to large companies and may make small companies lose their living space in centralized procurement
.
Compared with the fourth batch of centralized procurement documents, the fifth batch of centralized procurement documents also require that the applicant enterprise must ensure that the procurement requirements of selected drugs in the supply region are met during the procurement cycle, including the agreed procurement volume and those exceeding the agreed procurement volume.
Part
.

In addition, different from the first four batches of centralized procurement, the documents of this centralized procurement require that the applicant enterprise must not be included in the current "National Pharmaceutical Price and Procurement Untrustworthy Enterprise Risk Warning List", and provide medicines that have not been approved by any province.
Enterprises rated as "medium", "serious" or "particularly serious" untrustworthy by the price and recruitment credit evaluation system will be given priority
.
The selected province also has the right to reject the enterprise based on the credit status of the selected enterprise
.
It can be seen that the price of medicine and the credit evaluation of recruitment and procurement have become a knife hanging on the head of pharmaceutical companies
.

This requirement originally came from the "Guiding Opinions on Establishing a Medical Price and Recruitment Credit Evaluation System" issued by the National Medical Insurance Administration in September 2020
.
After the document was released, all provinces have launched a credit evaluation system
.
On April 12 this year, Zhejiang announced the first case of punishment for untrustworthiness in credit evaluation (Yuheng Pharmaceutical), and it was also the first case in the country that was classified as a “serious” untrustworthy rating.
It is understood that serious untrustworthy companies may be restricted from listing.
Online procurement
.

Achieving the consistency of the quality and price of medicines is one of the important reasons for establishing a credit evaluation system
.
“If the unreasonable composition of the drug price is exposed, it is the dishonesty at the drug level.
This is the essence of dishonesty.
The rebate part quantifies the degree of dishonesty
.
” But at the same time, it needs to be clear whether there is a problem of dishonesty in drug prices.
The price is not necessarily related
.
( E-pharmaceutical manager )

Original title: From a monopoly of 3.
5 billion or to less than 200 million, Bayer is under the threat of 23 soldiers, including CSPC, Yangtze River, and Xinlitai.
Is it okay for the MNC with the right to speak?