National Development and Reform Commission cuts prices and “slashes” individual producers of pharmaceuticals

The business club reported on December 1 that the market was finally honored by the NDRC's plan to reduce the prices of some separately-priced medicines. On November 30th, the National Development and Reform Commission issued the “Notice on Reducing the Maximum Retail Prices of Some Ceftriaxone and Other Drugs”, and the overall retail price of individually-priced drugs, including some foreign drugs, was lowered overall.

Analysts said that the government's downward adjustment of the maximum retail price of some individually priced drugs has brought negative, but to varying degrees, to a number of pharmaceutical companies with drugs that enjoy individually priced treatment, which is directly related to the current price level of these drugs.

In addition, policies to reduce the prices of some foreign drugs may not necessarily bring negative advantages to foreign drug companies. Some foreign drug companies may take the opportunity to expand their market share in the primary pharmaceutical market in China in order to pay for premiums, while similar drugs in China will Shocked.

Some manufacturers are affected

In an interview with a China Securities Journal reporter, Tong Ren Tang (600085) said that if the NDRC cuts the price of some separately priced medicines, it will have a certain degree of impact on the company, because the company's sales of products, individually priced drugs account for a certain percentage.

Analysts said that the "Notice" lowered the prices of some individually-priced drugs, including directly to the two cranes Pharmaceutical (600062), Zhejiang Pharmaceutical (600216), North China Pharmaceutical (600812), Northeast Pharmaceutical (000597), Livzon Group (000513) Such pharmaceutical companies have caused bad news, of which Shuanghe Pharmaceutical has the largest number of drugs involving price cuts, and thus may be the hardest hit.

Shuanglu Pharmaceutical (002038) said that the company’s flagship drug did not apply for entry into the basic drug list, and the pricing of the drug was subject to the company’s own pricing, and therefore did not fall within the scope of this government’s price adjustment.

Analysts said that the government's downward adjustment of some of the separately priced drugs may affect the enthusiasm of pharmaceutical companies to apply for entry into the basic drug list, because the maximum retail price may be regulated. But at the same time, we must also see that after this price reduction, many drugs may have a substantial increase in sales.

In addition to the pharmaceutical companies directly affected by the price adjustment, some companies will also be “acquired”. That is, after the implementation of the drug price reduction policy, the decline in the price of better-quality brand drugs is expected to usher in a hot sale, which will squeeze the original market share of similar low-priced drugs.

Foreign pharmaceutical companies or the amount of premium

The China Securities Journal reporter analyzed the "reports" to reduce the maximum retail price list of some individually priced drugs and found that foreign drugs accounted for nearly half of the country's total, which means that foreign drugs have become an important target for drug prices.

In addition, the "Notice" also clearly reduces the maximum retail price of ceftriaxone and other individually priced drugs; Merck's production of simvastatin is no longer a separate pricing, the implementation of uniform prices.

Analysts said that the decline in pure prices will, to a certain extent, affect the level of gross profit of pharmaceutical companies in foreign companies, but this will not necessarily have a significant impact on foreign pharmaceutical companies, because some foreign drugs are indeed higher in quality, brand or efficacy than similar ones. Domestic drugs, therefore, if the maximum retail price of foreign drugs is reduced, it is likely to increase its sales in retail pharmacies, and may even impact domestic similar drugs.

Some pharmaceutical companies have stated that, in fact, the overall sales price of foreign drugs is several times or even ten times higher than that of domestically produced similar drugs. Therefore, even for foreign drugs, it is difficult to reduce too much at a time. Overall, foreign drugs The price will also be substantially higher than that of the domestically produced drugs of the same kind, and it is expected that the domestically produced drugs will not be subject to much impact.

Some analysts also said that if the prices of foreign drug drugs drop successively, on the one hand, they could really benefit domestic patients, but they would also indirectly help foreign drugs to enter the domestic primary medical market. Foreign drug companies after “putting down” may very well Will show greater ability and desire to divide.