On May 8, 2018 is a year in which profound changes have taken place in the reform of health care system and top-level design. The State Medical Insurance Bureau has officially listed, the policy of centralized drug purchasing has landed rapidly, the quality of drugs and the control of fees are both in line, accelerating the import substitution and controlling the reasonable expenditure of medical insurance costs. In the aspect of medical commerce, the two-vote system has been comprehensively promoted, commercial ecology has been reconstructed, resources have been gradually centralized into leading enterprises, the industry pattern is being reshaped, and the whole pharmaceutical industry is under pressure.
According to the data provided by Tonghuashun in the Annual Report of the Pharmaceutical and Biological Industry of 2018, 292 listed pharmaceutical and biological enterprises in A share had issued the Annual Report of 2018 except ST Changsheng. Although only 25 pharmaceutical enterprises had lost money, 104 of them had negative growth in net profit. Most of them mentioned the pressure brought by the policy on the industry and the negative growth in their annual report. The corresponding measures taken. Of the 292 companies that issued annual reports, only 25 enterprises suffered losses. The top three losses were ST Guanfu, Qianshan Pharmaceutical Machine and Renfu Pharmaceutical, and the net profits attributed to shareholders of listed companies were -2.712 billion yuan, -2.466 billion yuan and -2.358 billion yuan, respectively. In 2018, net profit of 104 listed pharmaceutical and biological enterprises increased negatively. Haizheng Pharmaceutical Company, Tailong Pharmaceutical Company and Yangpu Medical Company were the three biggest decliners, which fell 3730.15%, 2349.17% and 1325.99% respectively. In 2018, the three largest net profit growth enterprises were North China Pharmaceutical Co., Ltd., Zhongyuan Concorde Co., Ltd. and Shengjitang Co., Ltd., with growth rates of 703.03%, 471.58% and 442.17% respectively. In terms of revenue of 46 enterprises showed a decline. The top three enterprises with the most serious decline over the same period of last year were Development Stock, Guoxin Health and Enlightenment Guhan, which fell by 48.32%, 48.11% and 45.91% respectively.
Revenue and net profit both showed negative growth in 35 enterprises, such as Shanghai Laisse, Treasure Island, Erkang Pharmaceutical, Unnamed Pharmaceutical, etc. Among 292 enterprises, there are 60 enterprises with assets-liabilities ratio exceeding 50%, including Fuxing Pharmaceutical, Xinbang Pharmaceutical, Chinese Pharmaceutical Stock, Huahai Pharmaceutical, etc. Among them, the highest debt-to-asset ratio is Qianshan Yam Machinery, with a debt ratio of 168.53% in 2018 and a total debt of 4.295 billion yuan. The lowest debt ratio is Mingde Biology, with a total debt of only 24.55 million yuan and a debt ratio of 3.98%. Among 292 listed pharmaceutical enterprises,33 pharmaceutical enterprises had sales expenses exceeding revenue by 50% and the sales expenses of 33 enterprises accounted for more than 50% of their revenue. The top three were State-owned agricultural science and technology, Lingkang Pharmaceutical Industry and Longjin Pharmaceutical Industry, which were 73.84%, 72.78% and 72.21% respectively. The top five sales expenses are Shanghai Pharmaceutical, Fuxing Pharmaceutical, Step Pharmaceutical, Huarun 39 and Hengrui Pharmaceutical. Although Shanghai has the highest medical sales expenditure of 11.058 billion yuan, it accounts for only 6.95% of the revenue. The sales cost of Step Pharmaceutical is 8.036 billion yuan, accounting for 58.81% of the revenue, which is the only enterprise with more than 50% of the total. For the pharmaceutical and biological industry, R&D is the core of technological progress and the strategic commanding point. In recent years, with the continuous increase of national support for the innovation and development of pharmaceutical and biological industries, the investment of pharmaceutical and biological enterprises in R&D in China is also increasing year by year, and the level of R&D has been greatly improved. In 2018, the largest R&D investment was Hengrui Pharmaceutical, followed by Fuxing Pharmaceutical and Myry Medical. The R&D investment was 2.670 billion yuan, 2.507 billion yuan and 1.420 billion yuan, respectively. The R&D investment accounted for more than 10% of revenue. Among 281 enterprises that have announced R&D investment, 36 enterprises have R&D investment accounting for more than 10% of revenue. The top five enterprises with the highest proportion are Beida Pharmaceutical, Watson Biology, Guoxin Health, Guangshengtang and Jiuan Medical.
The policy has been issued intensively, and the overall pressure of the pharmaceutical industry is an important part of the national economy, an important industry related to the national economy and people's livelihood, and also a strategic emerging industry of the country. Since the drug trial reform in 2015, the pharmaceutical industry has established new industry rules from different perspectives of medical treatment, medical insurance and medicine. Since 2018, under the influence of many factors, such as bidding reduction, comprehensive promotion of quality and efficacy consistency evaluation of generic drugs, preliminary implementation of new classification reform scheme for chemical registration, and flow-based verification of drug clinical trial data, the research and development costs of pharmaceutical enterprises have increased, most of them have been impacted, production momentum has decreased, and total industry profits have been reduced. The growth rate slowed down, lower than the growth rate of main business income.
"The era of profitable chemicals has ended, and scale and R&D will be the main tone in the future. The more the absolute amount of R&D investment lasts for many years, the better the development trend of enterprises with large-scale products." Shi Lichen, founder of Beijing Dingchen Medical Management Consulting Center, pointed out that one of the main reasons for the pressure on the industry this year was the medical insurance control fee. The pressure of price adjustment in the whole industry was very great, which caused serious industry differentiation. In the future, companies with strong R&D ability or cooperation ability will surely be able to gain a firm foothold in the field of chemicals, such as Hengrui Pharmaceutical Co., Ltd.
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