Yuekang Pharmaceutical: One Drug, Dual Prices, 7 Yuan Price Difference

On December 30, 2024, Yuekang Pharmaceutical issued a statement responding to the recent report from the National Medical Insurance Bureau regarding the "one drug, dual price" incident concerning ginkgo leaf extract injection. The company explicitly stated that it has proactively communicated with the local medical insurance bureau and applied for an optimization adjustment of the product price for ginkgo leaf extract injection, promising to unify the nationwide listing price to 11.2 yuan per vial. Previously, the bidding prices for this drug in certain provinces were 24.1 yuan and 18.14 yuan, respectively.

The incident was triggered by a letter of concern issued by the National Medical Insurance Bureau, which pointed out that some pharmaceutical companies engage in false invoicing to create "dual pricing," involving multiple drugs, including ginkgo leaf extract injection. Reports revealed the existence of two pricing systems: a "base price" and an "invoice price." Pharmaceutical companies first sell at the "invoice price" to distributors, who then resell to medical institutions. After the transaction is completed, the pharmaceutical companies return the price difference to the distributors. This practice uses false invoicing to "cleanse" the price difference, becoming a source of illicit profit and commercial bribery for unscrupulous distributors, leading to artificially inflated drug prices from the source.

The report specifically mentioned that for certain drugs like ginkgo leaf extract injection and cefoperazone sodium, there is a significant gap between the base price and the selling price, allowing doctors to earn commissions when using these drugs. For example, the base price of ginkgo leaf extract injection is 8.5 yuan, while the selling price is as high as 25.28 yuan, giving doctors a commission of 4 yuan for each use; for cefoperazone sodium, the base price is 6.5 yuan, and the selling price is 16.5 yuan, with doctors earning 2.5 yuan per use. It is estimated that the commission amount for drugs generally accounts for more than 20% of the difference between the invoice price and the base price.

As the largest company in the domestic market for this product, Yuekang Pharmaceutical has received a lot of attention. Ginkgo leaf extract injection is one of the core products of Yuekang Pharmaceutical. According to the company's prospectus, the sales revenue of this product in 2017 was 410 million yuan, with a market share of 74.90% in public hospitals. In the following two years, 2018 and 2019, the sales revenue reached 1.04 billion yuan and 1.128 billion yuan, respectively, with the market share in public hospitals increasing to 80.44% and 83.36%. From 2017 to the first half of 2020, the sales revenue of ginkgo leaf extract injection accounted for 16.20%, 26.66%, 27.14%, and 32.98% of the company's main business income.

In the first three quarters of 2024, Yuekang Pharmaceutical achieved an operating income of 2.992 billion yuan, with a net profit attributable to the parent company of 210 million yuan, representing year-on-year growth of 1.15% and 37.73%, respectively. In the third quarter, the operating income and net profit attributable to the parent company were 1.042 billion yuan and 91 million yuan, showing year-on-year growth of 37.47% and 266.37%, with a significant increase in net profit attributable to the parent company.

In the secondary market, Yuekang Pharmaceutical's stock price has experienced a rapid decline of over 40% in the past two months. On the evening of December 30, 2024, the company issued another announcement responding to the "one drug, dual price" incident. Yuekang Pharmaceutical stated that it did not guide or require distributors to raise listing prices or engage in improper marketing practices through improper means. Regarding whether the company's distributors engaged in "one drug, dual price" behavior, the company did not provide a clear response. At the same time, the company emphasized that it always complies with national laws, regulations, and medical insurance policies, adhering to a legitimate and compliant business philosophy, and has not guided or required distributors to engage in the aforementioned improper behaviors. Furthermore, Yuekang Pharmaceutical stated that it will actively participate in the national drug collection work, although ginkgo leaf extract injection appeared in the national Chinese medicine collection but ultimately failed to win the bid.