Recently, a news released by Zhejiang Pharmaceutical Collection Center to carry out the national lowest price collection work of related products stirred the nerves of the industry. More than 5,200 regulated drugs "take the price of online transactions in the provincial procurement platform as a reference price of 10%, such as traditional Chinese medicine injections or antibacterial drugs, on this basis, and then drop 5%", some drugs have produced a new national lowest price.

Zhejiang Province is just a microcosm of the industry. Judging from the bidding progress, Hebei, Shanxi, Fujian, Jiangxi, Hunan and other provinces and cities have launched a new round of bidding. Prior to Beijing\'s first national price linkage, there should be a basic judgment in the next bidding and procurement in most provinces: "Price linkage and volume procurement" will be the general trend, which will inevitably bring down prices.

However, in the fierce market competition, there will always be enterprises willing to take over the market. Hunan Province is the latest example. At a deep level, the serious homogenization of products is the core of the continuous decline in drug prices. "The price reduction is only the appearance, if the backward production capacity is eliminated, both purify the market environment, the withdrawal of inferior drugs and free up the market to soothe the losses suffered by the enterprise price reduction, which is also a kind of market for price." A person in charge of a pharmaceutical company who did not want to be named said: "May wish to make a bold speculation that the future generic drug competition will gradually change from \'quality for low price\' to \'quality for market\'." He reminded that this process will have pains, but only to grasp the new trend will there be a "blue ocean", and advantageous enterprises should be first laid out.

Low price dilution

Before and after the Spring Festival, Zhejiang Province confirmed the reduction of more than 5,200 kinds of drugs, and some of the price cuts reached 19%, which was worse than expected. The director of the Marketing Department of Hainan Sea Medicine told reporters: "Now the provinces are bidding to engage in price linkage, their company also has varieties in this catalog." Asking price or quantity, this is the problem that troubles enterprises. Zhejiang is a big province of medicine, enterprises will not give up, but this is after all, the national lowest price reference, individual products really can not do will choose to give up."

At the end of February this year, The State Council issued the Guiding Opinions on Improving the centralized Procurement of Drugs in Public Hospitals, requiring provinces to reasonably reduce drug prices through negotiation procurement, direct procurement, fixed-point production and other methods. "It is certain that in terms of the state of the national medical insurance costs and the level of the management system, in order to achieve the goal of solving the problem of \'expensive medical treatment\' and the balance of industry development, the price reduction will become the norm." Tao Desheng, executive director and president of Lizon Pharmaceutical Group, said that only when you understand the trend can you see the opportunity.

Tao Desheng believes that "the era of meager profits in the pharmaceutical industry is coming, and the reshuffle is inevitable." Seeing the expected recruitment document in Zhejiang Province, he bluntly said that enterprises can only adapt to the situation and have no other way. "Industrial policy should jointly promote the development of the industry. Otherwise, playing a zero-sum game is lose-lose. At present, the company\'s discussion of the Zhejiang market has not been finalized, after all, it involves the market share of a large province of drugs, and there are many things to weigh."

The reporter learned in the interview that many foreign-funded enterprises and domestic brand enterprises have chosen to abandon the relevant varieties. The person in charge of a foreign-funded enterprise said, "If accepted, they are worried about the risk of collapsing the price of their products; If abstention, one province after another, how can enterprises live? Proprietary products have slightly better leeway."

In this regard, industry veteran Xia Jun also has a similar feeling: "Enterprises should get used to the normal price reduction." At present, I am in charge of sales, bidding and other work of three companies. The general trend is clear: the national level has stressed the need to bring prices down, the cost of producing drugs is increasing, and corporate profits are constantly being squeezed. Especially like Shaoxing city and Ningbo City in Zhejiang province, the pilot hospital talks directly with the manufacturer about the price according to the bidding situation, and the bid price in Zhejiang is low as a whole. In doing so, a new low is likely to be created. With so many generic drugs, competition will inevitably lead to small profits in the entire industry. Prices and markets are in a quandary."

Breaking the homogenization Trap

From the reality of bidding around the country, this means that the era of meager profits has really come. At a deep level, many of the current problems are caused by the barbaric existence of homogenization. There is a trend that deserves the attention of the industry, the competent authorities attach great importance to the quality consistency evaluation of generic drugs, and the dynamic supervision of drugs has also been raised to a high level. The state\'s intention is clear, through the generic drug quality consistency evaluation will improve the overall "gold content" of Chinese drugs. At the same time, it can also eliminate backward production capacity and solve the current increasingly serious homogenization problem.



Xia Jun believes that "enterprises should learn to strengthen management, improve the level and ability of drug research and development, fully consider market factors (raw materials prices rise, labor costs increase, etc.), control costs, and ensure the balance between drug prices and quality." The price of medical insurance will be a key factor in determining the interests of enterprises, and some small and medium-sized enterprises that lack quality support and are at a disadvantage in competition should withdraw from the market."

Since last year, the State Food and Drug Administration has issued two batches of excessive duplication of drug varieties catalogue, the purpose is to improve the drug registration information release system, effectively guide the project and topic selection of drug research and development, the limited resources to have clinical value of innovative drugs and clinical urgent generic drugs review and approval tilt, to avoid a large number of repetitive research and development and waste of resources. The just-released 2014 Drug Review Report shows that the number of duplicate claims is still large.

Shao Bin believes that hard bones are difficult to chew, but must chew, otherwise it is difficult to jump out of the cycle of development. "The price cut will definitely affect the investment in marketing expenses, research and development expenses and other costs in addition to production costs, and the impact is not small."

Perhaps, from the various ports of market access should work together to clamp down on the duplication of construction varieties. When various policies no longer protect backwardness, the pharmaceutical competition pattern will undergo qualitative changes. This is not difficult to understand the relevant person in charge of the National medical reform office said a few days ago, "the bidding should only be price, quality is not out of the bidding, but the production, supervision."

How to deal with this industry environment? Xia Jun believes that the price space of generic drugs will be lower and lower, and it will be difficult to maintain the agency system simply in the future. If there is no scale, the space will become smaller and smaller, and the exclusive or distinctive Chinese patent medicine numbers in medical insurance will become more and more valuable. "I think the generic drug agency system will move to a hybrid model and become an O2O platform."

Information source: Medical Economic News