A large number of pharmaceutical companies are in trouble

Affected by the domestic and foreign environment, the domestic manufacturing industry is generally affected. Superposition of the policies of the pharmaceutical industry such as procurement with quantity has a significant impact on the pharmaceutical industry enterprises.

In the pharmaceutical industry, some generic drug companies are going through the test period of life and death by cutting wages, reducing staff, transferring approval documents, or selling off factories.

The author expects that, in particular, the pharmaceutical companies, as well as the pharmaceutical companies whose products are adopted by the state, will take the lead in withdrawing from the market. If there is no significant change in policy, the industry's accelerated restructuring and consolidation in the next five years, may become a common phenomenon.

01

The eighth batch of countries may completely change the market's expectations for generic drug companies

After the national procurement in 2018, many generic drug enterprises are still trying to promote the sales of stock products, strive to carry out consistency evaluation, and find good projects to do research and development projects.

Obviously, behind the action is still optimistic about the generic drug market, the logic behind it lies in the following:

First, not all products are expected to participate in the collection. Therefore, in the past few years, research and development projects have been looking for projects that may not be involved in the procurement of volume. Such as the combination of medicine and equipment products, Chinese patent medicine, medical equipment and so on. But the fact tells us that there is no forbidden zone in collection, and consistency evaluation is not a necessary condition for collection. This has gradually changed the market expectations for the future of generics.

Second, the price of collecting products may rise. Especially the products quoted at a loss in the early period. In fact, in some provinces and regions, there are indeed relevant rules issued. That is, for the loss price caused by the early quotation is too low and the cost of raw materials is rising, the price is allowed to increase moderately on the basis of sufficient evidence when the bid is renewed.

After the actual implementation, the first and third batch of national procurement has basically finished, the second and fourth batch of continued bidding has been completed 2/3, the price of lossmaking products is still difficult to rise.

For the renewal of the bid by the state, the first is that the enterprises that won the bid in the early stage have the priority to win the bid; Second, for products that are still on the high side of the price, the bid will be renewed again, and the price reduction is not small. This has clearly changed the industry's expectations for generics.

The upcoming eighth batch of national procurement may completely change people's future market expectations for generic drugs. In addition to the factors mentioned above, a total of 294 generic + insulin drugs have been adopted in China, and after the eighth batch of national procurement, more than 70% of common drugs will be adopted in China. Four years after adoption, the policy's ultimate impact and the future of generics are already clear.

As for the abandonment of the original research products in the bid, it may be difficult to escape the fate of the sale. The author saw the first seven batches of national adoption, many original research products, especially oral original research products to give up national adoption, some still sell wind unboiled water. But that is gradually changing.

Although transnational pharmaceutical companies take profit as a consideration, adopt such a abandon strategy, but these products are actually completely abandoned the internal market, in the country to continue the bid is still unable to win.

In the past four years, the public's trust in the winning products of Chinese generic drugs has deepened. In the short term. There is nothing wrong with foreign companies' domestic procurement response strategy, but in the future, foreign companies' domestic procurement products may only be sold. In fact, there have been a lot of deals in the past two years. The fundamental reason behind this is also the shift in market expectations for generics.

Similarly, the upcoming large-scale collection of Chinese patent medicine led by Hubei Province will profoundly change people's market expectations for Chinese patent medicine.

Before the first collection of Chinese patent medicine in Hubei in 2020, the industry was full of doubts about the collection of Chinese patent medicine. Two years later, the national collection of Chinese patent medicine has been moved to the table, which will profoundly change people's expectations for the future development of Chinese patent medicine.

Many Chinese patent drug companies will be similar to generic drug companies, or cut wages, or reduce staff, or transfer. The future will also show that exclusive Chinese patent medicine and exclusive chemical medicine are two completely different concepts, completely different market expectations.

02

Generic drug research and development will gradually become chicken ribs

In 2019, Sun Piaoyang, chairman of Henrui, said that it would gradually give up the research and development project of general generic drugs. Looking back three years later, generic drug research and development programs are waning.

The drug development that domestic pharmaceutical enterprises can do is more to rush to copy, the first copy, or improved new drugs.

It is often said in the industry that the research and development cycle of innovative drugs is long, the investment is large, the risk is large and the return is high. In the future, the development of generic drugs will present the characteristics of short cycle, small investment, high risk and low return.

The reason is that the market expectations for generic drugs have changed, the story doesn't make sense, the logic doesn't work.

Similarly, after the large-scale collection of Chinese patent medicine, the research and development of Chinese patent medicine will be further limited.

The research and development of Chinese patent medicine is different from that of generic drugs. Even in the golden decade of generic drugs, the number of new Chinese patent medicine drugs in China is still very small, the main reason is that the exclusive approval of Chinese patent medicine enterprises is generally more, and the exclusive ones do not sell well. A large number of enterprises have no motivation to devote themselves to the development of new Chinese medicine drugs.

After the large-scale collection of Chinese patent medicine, the research and development of Chinese patent medicine will focus on the research of new Chinese patent medicine in accordance with the standards of modern drug research, to do the standard of natural drugs, only in this way, the development of new drugs will be convincing in the clinic. The research and development of exclusive compound Chinese patent medicine is extremely risky.

Although in the future, the research and development of generic pharmaceutical enterprises and Chinese patent pharmaceutical enterprises will gradually cool down, but this does not include a small part of state-owned enterprises, especially central enterprises.

Even if it is difficult at present, many state-owned enterprises and central enterprises are still responding to the consistency evaluation, trying to participate in national procurement, and actively raising funds to develop generic new drugs.

In the future, some state-owned central enterprises will also make acquisitions or mergers in this round of adjustment, and seize the opportunity to become bigger and stronger.

There is no doubt that in the future, the head of the generic drug enterprise will have the figure of the central enterprise, and the head of the Chinese patent medicine enterprise is the same.

Although it is difficult for generic drug companies and patent Chinese medicine companies, we are trying our best to survive and hope that the future will be better.