Matters:
On February 21, the Beijing Municipal Medical Insurance Bureau issued the notice on regulating and adjusting the price of some medical services, which included 16 assisted reproductive technology projects in the medical insurance reimbursement.
Ping An View:
There was no price reduction after 16 assisted reproduction projects were included in the medical insurance: 16 projects included in the medical insurance include in vitro fertilization, embryo culture, blastocyst culture and so on. Two of them are IUI (artificial insemination), one is second-generation IVF, three are third-generation IVF, and the rest are embryo storage and other projects. Through comparison, we found that the prices of these 16 items did not change with the previous ones after the inclusion of medical insurance. We believe that assisted reproduction reflects the value of doctors’ technology and services, so the risk of price reduction is limited for the core technical services. At present, the average cost of IVF in a single cycle in China is about 35000-45000 (excluding the third generation). This time, it has entered the medical insurance, and the medical insurance coverage is about 8000-11000 yuan. Recently, the state has made frequent policies to encourage fertility. We believe that assisted reproduction projects are expected to include medical insurance payment in more areas in the future.
The inclusion of assisted reproduction in medical insurance is expected to further improve the accessibility of services: there are a large number of infertile patients in China. According to Sullivan’s data, the proportion of infertile people in China will reach 18% by 2023. The single cycle price of IVF in China is generally 40000 yuan, and the penetration rate is about 7%, which is still low compared with the penetration rate of more than 30% in the United States. We believe that the high price makes some low – and middle-income people unable to be treated through assisted reproduction, and also makes the penetration rate increase slowly. Some assisted reproductive projects have entered medical insurance, which improves the accessibility of patients, is expected to promote the rapid release of the demand side, and the penetration rate is expected to increase rapidly, so as to promote the development of the industry.
With the stricter regulation of assisted reproduction industry, more standardized enterprises will have better development space. With the release of demand, assisted reproductive institutions will provide services for more patients. Whether the institutions are standardized, whether the treatment effect is ideal, and the level of success rate will determine the number of patients. In 2018, the number of assisted reproductive cycles in China was 684000, corresponding to 498 assisted reproductive institutions, with an average of only 1373 cycles per institution. Some institutions that do not reach the average value cannot obtain sufficient patients, and it is difficult to improve the proficiency of doctors, so the overall success rate is low. The low success rate will lead to a decline in reputation, and the number of patients may be further reduced. Leading enterprises can attract more patients through word-of-mouth advantages, expansion and M & A, so as to achieve higher growth than the industry.
Investment suggestion: the entry of assisted reproductive projects into medical insurance will accelerate the development of the industry, and the downstream medical service enterprises will take the lead in benefiting. It is expected that domestic pharmaceutical enterprises will continue to dominate the market for imported drugs and bring opportunities for the reconstruction of the market for imported drugs in the future. Suggestions: Jinxin reproduction, Beikang medical treatment, Changchun High And New Technology Industries (Group) Inc(000661) , Livzon Pharmaceutical Group Inc(000513) .
Risk tip: the risk that the industry growth is lower than expected; Risk of recurrent outbreaks; Risk of doctor-patient disputes.
