Under the pressure of centralized procurement and price reduction, how should generic drugs break through?

[Pharmaceutical Network Market Analysis] Recently, Shanghai Sunshine Drug Purchasing Network released the "Announcement of the Results of the National Centralized Drug Purchasing Proposed Selectio.
This centralized procurement is the seventh batch of centralized drug procurement organized by the sta.
488 products from 295 companies participated in the bidding, 327 products from 217 companies were eligible for selection, and 125 product specifications were includ.
The total purchase amount is about 28 billion yuan, and the average price of the selected drugs is reduced by 4
According to the agreed purchase amount, it is expected to save 15 billion yuan per ye.
 Under the pressure of centralized procurement and price reduction, how should generic drugs break through? (Source: Pharmaceutical Network) It is worth noting that the price of many large varieties of drugs in this centralized procurement has dropped to the "cabbage pric.
Among them, the influenza drug oseltamivir was reduced to 99 yuan/tablet; the targeted drug lenvatinib was reduced to 2 yuan/tablet; the price of omeprazole sodium injection was as low as 69 yuan/bottle, with a decrease of 80%- between 9
Taking oseltamivir capsules as an example, more than 10 companies bid for the drug in this volume purchase, and the winning companies include Dongyang Sunshine, Huahai Pharmaceutical, Kelun Pharmaceutical, CSPC Ouyi, Qilu Pharmaceutical, e.

Among them, the quotation of Dongguang Sunshine is as low as 99 yuan/piece, and the price limit of this variety is 45 yuan/pie.
It is understood that in the oseltamivir market competition for many years, Dongyang Sunshine can be said to be the dominant player, occupying nearly 90% of the market sha.
Once in 2019, there was a highlight moment of over 6 billion sal.
However, with this centralized procurement, the market competition pattern of oseltamivir is expected to face major chang.
On the whole, the industry believes that centralized procurement has a greater impact on generic dru.
As we all know, centralized procurement, while reducing drug prices and promoting drug quality upgrades, has caused the ceiling of some pharmaceutical sub-sectors to shrink from billions to hundreds of millions or even tens of millions, which has brought a heavy blow to traditional generic drug compani.

For example, in the first batch of domestic procurement, Xinlitai, which lost its bid for its core product, clopidogrel hydrogen sulfate tablets, saw a sharp drop in the year-on-year growth rate of non-net profit in 2019 and 2020, respectively, by 52% and 94%; Huadong Medicine, which lost its bid for carbose in the second batch of national procurement, has experienced negative growth for seven consecutive quarters in the year-on-year growth rate of non-net prof.


Behind this, it is actually driven by the centralized procurement policy, generic drug companies The cost for marketing has been gradually compressed, and the pricing power of drugs has shifted from the sales side to the production si.

Under the pressure of centralized procurement, how should generic drug companies respond? In this regard, the industry believes that the transformation and change of generic drug companies has become the general trend, and the following paths can be used to break through: First, we can accelerate the transformation to innovative drug compani.

Mergers and acquisitions, establishment of subsidiaries or spin-off and listi.

Second, generic drug companies can expand to the upstream API field and realize the integration of the industrial chain, thereby creating cost advantag.

In fact, many pharmaceutical companies have begun to implement vertical integration strategi.

As earlier, Fuxiang Pharmaceutical stated in the report that it will adopt the development strategy of "pharmaceutical intermediates-API-formulation integration", and actively explore the extension of the industrial chain while consolidating and increasing the market share of existing produc.

Third, it can expand business such as big health or medical beau.
It is understood that Huadong Medicine, which is greatly affected by centralized procurement, is deepening the layout of medical beauty and innovative drug business through external cooperation, product license-in, e.

Outreach expansion methods such as High Tech and Viora have also taken advantage of the trend to expand the international mark.

Deploy high-end generic drugs, first generic drugs, improved new drugs or biosimilar dru.

Low-end generic drugs are constantly fighting price wars, and the market is gradually being phased out or replaced by high-quality produc.

Therefore, generic drug companies can achieve transformation and upgrading by creating technical barriers, targeting high-end generic drugs, first generic drugs, improved new drugs or biosimilar drugs with significant features such as greater technical difficulty, less competition, and higher profi.

Conclusion Industry analysts believe that generic drugs have important economic and social benefits in reducing medical expenditures, improving drug accessibility, and improving medical service leve.

Although it is currently under enormous pressure under the normalization of centralized procurement, it still has a broad mark.

It is expected that difficult generic drugs will remain in the blue ocean field in the future, and the combination of imitation and innovation will be an inevitable tre.

Disclaimer: Under no circumstances does the information or opinions expressed in this article constitute investment advice to anyo.