Review of Ten Maps of the Pharmaceutical Industry in 2021

In the pharmaceutical industry in 2021, cost control, innovation, and capital are staggered, and traditional Chinese medicine is still under pressure.

1.

In March of the beginning of the year, the General Secretary inspected the Shaxian General Hospital and further affirmed the Sanming Medical Reform, the speeding up of vacating cages and changing birds, and mass procurement is still a breakthrough

1.

In 2021, the fourth, fifth, and sixth batches of national centralized procurement were carried out, saving 13.

2.

The annual national medical insurance drug negotiations were held from November 9 to 11, and 67 new drugs were successfully negotiated, with an average decrease of 61.

Mass purchases have made room for more cost-effective new drugs to enter medical insurance.

2.

If Circular 42 of 2017 (The Opinions on Deepening the Reform of the Review and Approval System and Encouraging the Innovation of Drugs and Medical Devices by the Office of the State Council of the People’s Republic of China" (Ting Zi [2017] No.

1.

For a long time, a surge in stock prices on the first day of IPO has been inevitable in everyone’s minds, and it has created a group of professionals who make profits (buying newly issued stocks).

Even if the issue breaks, there will always be funds still available.

Such as Tasly Biology, Dana (Tianjin) Biology, Tianguangshi Biology, Aopu Biology, Ruibo Biology, Lepu Diagnostics, Suzhou Jingyun, Renhui Biology, Kehui Medical withdraw IPO applications, Haihe Biology, Jikai Gene , Jiachuang Biology is because the listing committee of the Science and Technology Innovation Board terminated the review

On April 16 this year, the China Securities Regulatory Commission issued the “Decision on Amendments”, which put forward the “restrictive measures” on the company’s R&D investment in revenue ratio, R&D personnel ratio, number of invention patents, and compound revenue growth rate in the past three years.

2.

The ultimate goal of R&D is to provide patients with better medical products.
Therefore, no matter how high-tech R&D results are, they must maximize their product sales to achieve the highest return on R&D investment, as the first batch of local commercialization (marketing).
Pharmaceutical companies’ self-developed innovative drug PD-1, and its market sales were far below expectations.
The first batch of domestically produced PD-1s, including Daboshu, Erica, Baizian, and Tuoyi, which were listed and included in the medical insurance, were among the top three in this year.
The quarterly sales amounted to more than 8 billion yuan (Hengrui did not disclose it, temporarily taking 3/4 of its sales last year)
.

During the same period, K medicine sold 12.
609 billion U.
S.
dollars and O medicine sold 5.
535 billion U.
S.
dollars.
If calculated at today’s exchange rate, the sales of O and K medicines in the first three quarters were as high as 115.
6 billion yuan, and the 4 domestically produced models only accounted for 7% of them.
Due to the failure of several domestically produced PD-1s to keep up with this year’s medical insurance negotiations, it is difficult for their sales to make a big breakthrough.
Commercialization is a major challenge that Biotech (a research and development-oriented biomedical technology company) is about to face
.

3.
From lisence in to lisence out

Lisence in (licensed introduction) can shorten research and development time, improve research and development efficiency, reduce fixed investment, realize the curve overtaking of research and development through funds, and create well-known listed companies such as Zai Lab
.
However, as mentioned above, this year, lisence in accounted for too many IPOs of large pharmaceutical companies that have been rejected, and lisence out (external license) has taken its place, and the transaction amount has repeatedly hit new highs
.

For example, BeiGene authorized Novartis’s ociperlimab, with a total transaction volume of US$2.
9 billion, becoming the highest record of lisence out transactions in China’s biomedical field.
lisence out signifies that the scientific research achievements of Chinese scientists’ biomedical sciences have been recognized by international counterparts.
It is a corporate medicine.
The embodiment of innovative ability
.

4.
Policy incentives

Since Document No.
44, 2015 ("Opinions of the State Council on Reforming the Review and Approval System of Drugs and Medical Devices" (Guo Fa [2015] No.
44)), the State Drug Administration has made great efforts to eliminate the backlog and increase the speed of review and approval.
In order to encourage pharmaceutical innovation, the average duration of applications for the marketing of chemical drugs has been reduced from 986 days in 2015 to 132 days in 2021, a reduction of 7.
5 times, thus realizing the encouragement of innovation from the source
.

3.
CXO: the farther away from the downstream, the safer

In the context of medical insurance control fees, many old drugs produced are subject to mass purchases or key monitoring policies, and exclusive new drugs have to face the soul of medical insurance negotiations, and CXO (CRO, C(D)MO ) Not only is it not affected by controlled fees, but it has also become a safe haven for funds to escape from the involution of innovation, so this year CXO companies are quite chased by capital
.

At the same time, CXO also benefits from the eastward shift of the global pharmaceutical chain and the dividends of Chinese engineers.
Innovative drugs have to face the issue of commercialization of approved products, but CXO does not need it.
As long as the more new drug R&D projects, the more orders it will have.
In the first three quarters of this year, except for vaccines, CXO has the fastest growth in revenue and profit among all pharmaceutical sub-sectors.
Recently, the CXO sector has also entered a consolidation period
.

4.
Chinese medicine: the dawn of dawn

1.
The shadow of "auxiliary medication"

In recent days, the share prices of some listed Chinese medicine companies have soared, either because of the increase in the price of medicinal materials, or because they have made up for the decline, or because they have become a safe haven for innovation and involution of funds.
However, the operating conditions of the Chinese medicine industry have not changed much, despite the out-of-hospital sales and consumption.
Legends of famous brands of traditional Chinese medicines with attributes appear frequently, but after all, 70% of the sales of proprietary Chinese medicines are in hospitals, and the shadow of "adjuvant medication" for many years still has an impact on clinical prescriptions of Chinese medicines
.

The “Interim Measures for the Administration of Drugs for Basic Medical Insurance” issued by the National Insurance Agency last year and the “Administrative Measures for the National Essential Medicines List (Revised Draft)” issued by the Health Commission on November 15 this year will both contain endangered medicinal materials and nourishing health care.
The effective drugs are excluded.
Although there is no direct reference to Chinese medicine, it is inevitable that there will be Chinese medicine lying guns by then
.

As shown in the above "CXO" chart, in the first three quarters of this year, the revenue growth rate of traditional Chinese medicine was only 12%, which was the bottom of 11 sub-sectors, and it was also nearly half the industry-wide average growth rate of 21%
.

The proportion of the total revenue of Chinese patent medicine companies above designated size in the total revenue of the national pharmaceutical industry reached a peak of 25% in 2014, and has been declining since then.
By 2020, the proportion has fallen to 16%, and it has fallen by 9% in six years.
The concept only started to spread in 2015
.

The market value of listed Chinese medicine companies as a proportion of the total market value of the pharmaceutical sector has changed more.
It has fallen from 38% in 2012 to 12% in 2020.
It will rebound slightly in 2021, and the proportion has increased to 15%, which is the aforementioned recent Some Chinese medicine stocks rose sharply, not because of the industrial recovery
.

2.
Transformation of Western Medicine

The dilemma of traditional Chinese medicine companies has forced them to find other ways.
In the past few years, they have mostly expanded into related fields such as general health and daily chemical.
Traditional Chinese medicine companies have invested most of their research and development funds in the research and development of western medicines
.

3.
Approval of writing records

In recent years, approvals for western medicine have increased significantly, and approvals for new Chinese medicines have almost dried up.
There are as few as one or two Chinese medicines approved each year.
This year 11 has been approved, which is more than the sum of the previous four years.
This has encouraged the Chinese medicine industry.
Of course Obtaining the approval is only the first step in realizing the development of the Chinese medicine industry.
There are still questions about how the product enters the hospital and how to generate sales after entering the hospital.
In addition to the shadow of auxiliary medication, the influence of Western medicine not prescribing traditional Chinese medicine is also great
.

Just a few days ago, the newly appointed Deputy Director of the State Food and Drug Administration and Chinese medicine expert Dr.
Zhao Junning met with relevant leaders of the State Administration of Traditional Chinese Medicine to jointly promote the simplified registration and approval of ancient classic Chinese medicine compound preparations, and there is hope for accelerated approval of new Chinese medicines
.

In 2021, medical protective equipment will return to normal, vaccines will be sold, formula particles will be liberalized, traditional decoction pieces are still being rectified, chemical raw materials are developing in high quality, chain pharmacy mergers and acquisitions are prosperous, domestic substitution of medical devices will accelerate, and medical consumables will soon be deployed.

.

At a time when the pharmaceutical industry has been deeply affected by capital and innovation, entrepreneurs must continue to enrich their knowledge about capital and the new track of medicine, because innovation is eternal
.