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Tens of thousands down to 2000? A collective procurement of "collective failure of domestic production"

 Last Update: 2023-01-06
 Source: Internet
 Author: User

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On November 7, the Jilin Provincial Public Resources Trading Center issued the "Spring Roil Medical Consumables Interprovincial Alliance Centralized Procurement Document", with Jilin leading the "Spring Roil Alliance Centralized Procurement" of neurointerventional consumables in 21 provinces is about to be launched
.

The localization rate of spring coils is less than 15%, and such a large-scale centralized procurement has undoubtedly ushered in the "most difficult test in history"
for manufacturers at home and abroad.

01 "Small country procurement" small test knife: accelerate import substitution or still be dominated by imports?

So far, 25 provinces in the country have opened or landed spring coil belt volume procurement, which can be divided into two categories according to the procurement subject: one is a single provincial level, Hebei, Jiangsu, Fujian centralized procurement has landed, Anhui has issued a draft opinion; The other type is the provincial alliance, that is, the centralized procurement alliance led by Jilin this time, which is also the first interprovincial centralized procurement
of spring coils.

From the perspective of the number of provinces covered, this Jilin inter-provincial collective procurement can be regarded as "small national procurement", which has certain reference significance
for the future expansion of national centralized procurement.

In terms of procurement quantity, the total number of medical institutions reported this time was about 242,700, and the total amount of intended procurement in the first year was about 218,400, which was accumulated by 90% of the total procurement demand submitted by medical institutions in the alliance province
.

According to the prospectus of minimally invasive brain science, intracranial embolization coil is a widely accepted first-line treatment
for intracranial aneurysms.
According to data from China Insights Consulting, the number of intracranial coil embolization surgeries in China was 70,100 units in 2020, and it is expected to increase to 205,400 units
in 2026 at a compound annual growth rate of 21.
8% from 2020 to 2026.

According to model calculations, it is expected that about 100,000 intracranial coil embolization surgeries will be performed in 2022, and if calculated by using 3-5 nerve-specific coils in a single operation (take the median value of 4), the annual usage in the country is about
400,000.

Referring to the provincial centralized procurement in Hebei and Jiangsu, the average reduction rate of centralized procurement in the two places is 46.
82% and 54% respectively, corresponding to the average price of mainstream products of 6400 yuan and 3500 yuan, because the provincial report volume accounts for a small proportion of the national market (Hebei reported about 13,000, Jiangsu quotation about 28,000), the price reduction range is relatively mild, some insiders expect that the inter-provincial collective procurement price reduction will be larger, and it is likely to touch the "2" word
.

Next, there are several important rules to pay attention to in this interprovincial collective procurement in Jilin:

● Declare according to the procurement unit of the registration certificate (one certificate and one quotation), and the effective quotation range is not higher than 6500 yuan / root;

● The bidding is divided into two groups, A and B, of which group A is dominated by foreign-funded brands (6 of the 9 certificates are imported products), and group B is close to equal (9 of the 22 certificates are domestically produced); Group A eliminates the last 2 registration certificates, and Group B is 50% eliminated, but there are repechage rules (see Rule 2 for details).

(The above is judged by the ultimate benefit component of the actual enterprise)

(Image source: Jiangsu Huazhao Equipment Network)

● In terms of the selected allocation amount, there is a price allocation from low to high, gradient allocation of the intended purchase amount, and the remaining amount of medical institutions can independently choose the selected product;

According to the demand reported by medical institutions, the proportion of foreign capital Covidien, Stryker, Weixian and Johnson & Johnson is 37%, 16.
42%, 12.
5% and 8.
6% respectively, accounting for more than 74%
of the total demand 。 For Group A, considering the resurrection mechanism, domestic production and imports must ensure that the winning option will not lose a large market (so enterprises need to find the lowest price they can accept, which may also be the limit price); In terms of Group B, since the procurement volume is not large, the minimum requirement for domestic enterprises may be to win the qualification to be selected, and importers with multiple registration certificates may need to consider matching the Group A registration certificate to make a differentiated winning strategy
.

(Image source: Jiangsu Huazhao Equipment Network)

It is not difficult to see that unless the importer voluntarily abandons the domestic market and the bidding strategy is wrong, the domestic spring coil market after centralized procurement is still in an import-led pattern, but from the comparison of the number of registration certificates (domestic 12 Vs Import 20), the status has been loosened
.

There are only two questions left: will it cut the factory price of domestic enterprises in the future? How big is the gap between domestic and imported?

Will it cut the factory price of domestic enterprises in the future? How big is the gap between domestic and imported?

02 Information revealed in the prospectus of minimally invasive brain science: how is the factory price?

In terms of price dimension, the final winning price of collective procurement is the overall package price, including taxes, delivery fees and accompanying services and other expenses, after the enterprise product is selected, it is bound to reduce the cost of distribution, supply chain and technical support to the minimum, or reduce the factory price
to the distributor.

Taking minimally invasive brain science as an example, the company's sales are mainly distribution, and its top five distributors accounted for about 93.
5% in 2021.

At present, minimally invasive brain science has four hemorrhagic products, of which there are two products for spring coils: NUMEN, NUMEN FR approved in 2020 (the two are used together), and the new generation product NUMEN Silk will be approved in 2022, and the two can correspond to the minimum price standards of 4534.
39 yuan and 18850 yuan shown above; The remaining two hemorrhagic products are intracranial stents and mesh stents
.

The gross profit margin of the older generation of coils can be roughly estimated from the change in the company's gross profit margin, and the sale of spring coil embolization systems (NUMEN & NUMEN) will begin in 2020 FR), the prospectus pointed out that the gross profit margin of related products was low, the gross profit margin of hemorrhagic stroke products in that year was 77.
2%, and the gross profit margin of hemorrhagic stroke products rose to 82.
6% in 2021, mainly due to the increase
in gross profit margin caused by the economies of scale of blood flow-directed dense mesh stents and intracranial covered stent systems.

From this, it can be obtained that the ceiling gross profit margin of the coil embolization system is 77.
2%, (and 4534.
39 yuan is only a minimum terminal price including other costs, considering that the prospectus mentions that the centralized procurement in Jiangsu and Fujian has little impact on minimally invasive brain science (the reason is that the company's market share in the two provinces is low), but combined with the average price of 3500 yuan / root in Jiangsu, combined with the above gross profit margin, it is boldly predicted that as long as the final single price does not break 2000, the company's factory price is less likely to be damaged
.

03 Why are medical institutions reluctant to use spring rings from domestic manufacturers?

In the field of neurointervention, the promotion of domestic substitution has not been as smooth
as expected.

Because cerebrovascular vessels are thinner than other human blood vessels, resulting in lower surgical error tolerance, doctors generally prefer to use more expensive imported products than risk with cheap domestic products.

According to the first financial report, for the spring coil products that have been listed in 2020, some industry insiders commented: "The minimally invasive clinical (trial) program is a mixed spring coil, and several spring rings are often placed in the large aneurysm, which ring played a role?" Or did it all work? Not recognized
.
“

Another insider believes that there is a problem in the development path of domestic enterprises: a considerable number of domestic enterprises develop products that follow the "almost" strategy, and the developed products are only barely usable, and it is inevitable to become chicken ribs
in the market competition.

From the expression of the company's spring coil products in the prospectus of Guichuang Tongqiao, you can feel:

1.
Single-blind, non-inferior clinical trials were adopted, and the product name of the control group was not indicated, and it was only mentioned as "market-leading commercial intracranial aneurysm embolization coil (similar products)";

2.
At the comparison level of data between the experimental group and the control group, the success rate of occlusion and device implantation in the experimental group was slightly higher than that of the control group, and the mRS score index data related to prognosis (a scale for evaluating the neurological recovery state of stroke patients, grade 0 was completely asymptomatic, grade 1 was symptomatic without obvious disability, grade 2 was mild disability), and the recurrence rate data were not as good as those of the control group
.

The company only stated in its prospectus that "statistically speaking, there is no significant difference
in the secondary endpoints between the two study groups.
" ”

(Spring coil clinical trial data Source: Guichuang Tongqiao prospectus)

Are you a doctor, a patient or a family member, which side would you choose? The answer is left to you
.

Conclusion: In order to relieve the pressure on the medical insurance fund and reduce the burden of medical treatment for the people, the original intention of the upper class is good, and it has the ability to reduce the price
.

However, in the field of neurointervention, the current acceleration of domestic substitution through centralized procurement may be more "wishful thinking", and when the products of our domestic enterprises can use double-blind, head-to-head clinical practice to effectively make effective results, then it may not be far from real device innovation and domestic substitution
.

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