Pharmaceutical industry will usher in a new round of reshuffle

Yesterday, news from the price system said that the meeting of the director of the National Price Bureau held on October 27 decided that the price of medicines would be fully liberalized. Drug prices are expected to usher in marketization.

According to reports, according to the drug release process, plans to release blood products, nationally-purchased medicines and contraceptives, and a class of mental and anesthetic drugs at the end of this year; after approval by the State Council, the medical insurance catalog was released from January 2015. Drug prices. In fact, on October 22, Jiangxi Province has taken the lead in announcing that the government's regulation of drug prices will be relaxed and all 601 over-the-counter drugs administered by the provincial government will be released. Enterprises can completely set their own prices.

Although the current implementation rules for release of drug prices have not yet been announced, it is still unclear whether the core issues such as government bidding after the release of prices are still clear, but it is not difficult to predict that the release of drug prices will bring a series of significant impact on the pharmaceutical industry. It is inevitable for enterprises to reshuffle their cards, and medical e-commerce companies may take advantage of this.

Drug release conditions have already been met It is understood that China's pharmaceutical production and circulation environment are fully competitive, there are many varieties of drugs, and there are great differences in quality and cost. Under the circumstance that the system of “taking medicine to provide medicine” has not fundamentally changed, the current maximum retail price is established. The method is neither scientific nor reasonable, and it is impossible to eliminate the problem of “high drug prices”. With the establishment of the universal health insurance system and the gradual improvement of the tender procurement system, the medicines in the medical insurance catalog have met the conditions for opening prices.

In response, Wei Shaofeng, deputy secretary-general of the China Pharmaceuticals and Materials Association, believes that in recent years, the cost of raw materials, packaging materials, energy and power, and human resources have continued to rise, especially for Chinese herbal medicines. Prices of many varieties have risen several times, giving companies a cost belt. It's no small pressure. However, in contrast, the price of medicine has ushered in wave after wave of price cuts, causing many companies to suffer and can only stop production. Wei Shaofeng believes that after price controls are liberalized, companies can independently set prices based on costs and markets, which is relatively more reasonable.

The industry reshuffle will be inevitable. It is reported that currently within the Medicare Catalogue, there are about 1,500 kinds of drugs under central management, and about 500 types of drugs under local management. Most manufacturers of most varieties have a large number of drugs. After the prices of medicines are released, pharmaceutical companies must inevitably compete for prices in order to expand sales. At the same time, the tendering of drugs may still be carried out, and the hospitals that are the subject of procurement will also be able to negotiate twice. Therefore, after the drug prices are released, drug prices are inevitable.

A sales manager of China Resources Sanjiu believes that after the release of drug prices, the market will fully compete and brand, quality, price, and channel will play a more prominent role. Big companies will be the winners of the price war because of the large sales base of products and the perfect marketing system, and the strong will be strong; some small-scale enterprises will be subject to greater impact, and even difficult to survive.

At the same time, the above sales manager believes that some drug companies with heavy exclusive products are under the influence of price wars, and some non-exclusive, individually priced, high-quality and high-priced drugs have to take the initiative to cut prices and put pressure on similar products. Furthermore, some first generic medicines with large market demand are also expected to seize market share of imported medicines through price competition after prices are released. From the perspective of subdivided industries, competition in the sub-sectors such as antibiotics, infusions, cardiovascular and digestive systems may intensify.

People in the industry expect that online sales of prescription drugs will be released by the end of this year or early next year. The liberalization of drug prices is a great benefit for pharmaceutical e-commerce companies, and it is also the time for pharmaceutical companies to cut into electronic sales of pharmaceuticals. Some non-medical insurance products with high prices and good quality will be linked with doctors through electronic sales.

From another perspective, after the release of drug prices, pharmaceutical companies will strengthen their strengths and their willingness to acquire mergers and acquisitions will become stronger. Some pharmaceutical companies that are at a competitive disadvantage will take the initiative to withdraw. It is expected that mergers and acquisitions in the pharmaceutical industry will become more frequent.

The unspoken rules or exacerbated the Securities Times reporter learned from the interview that, in the face of drug prices, many sales managers of pharmaceutical companies expressed concern. They believe that after the release of drug prices, unspoken rules or black-box operations will intensify.

Drug companies generally expect that after the release of drug prices, the hospital's second bargaining price is difficult to avoid. In the current bidding for drugs, it is the bidding office that decides on the bid invitation and the price. After the hospital's second bargaining is released, the hospital can choose the price of the drug factory and its usage. As a result, pharmaceutical companies have incentives to bribe hospitals to enter hospitals and increase sales, and hospital-related personnel may also use such power to seek rent.

At the same time, in order to encourage doctors to pay more bills, drug companies will pay doctors through pharmacies, and with the electronic sales of prescription drugs, bribery will become more subtle.

A pharmaceutical company sales manager believes that after drug prices are liberalized, pharmaceutical companies will strengthen government affairs management, invest more in government affairs, and corruption may become more serious.