Ping An View:
Medical insurance adjustment was normalized, and the time for innovative drugs to enter medical insurance continued to be shortened. Since 2016, the national medical insurance has maintained an annual pace of negotiation. In 2021, a total of 117 drugs were negotiated, 94 of which were successful, with an overall success rate of 80.34%; Among them, 67 of the 85 exclusive drugs outside the catalogue were negotiated, with a success rate of 78.82% and an average price reduction of 61.71%. Among the 67 drugs out of the catalogue, 66 were listed within five years, accounting for gg%, of which 27 innovative drugs were listed in medical insurance in the same year. The “seamless connection” between drug review and medical insurance review has been basically realized, which is conducive to the large volume of innovative drugs.
From the negotiation results, the logic of the innovative drug industry changes: 1) the competition of PD – (L) 1 with the highest market attention is becoming increasingly fierce. At present, there are 11 PD – (L) 1 varieties in China. In 2021, the medical insurance has newly included 8 indications, covering the main indications of 4 domestic products. The annual drug amount of domestic PD-1 has dropped from 100000 + in 2019 to about 40000 yuan after medical insurance negotiation in 2021, and the amount of imported products has also dropped to about 100000. 2) Biotech’s new drugs will enter medical insurance as soon as they are on the market. Except for danorevir sodium tablets of Geli pharmaceutical, other varieties seek medical insurance within one year after listing. We believe that first, at this stage, the innovative drugs included in medical insurance are mainly me too, and the competition is becoming increasingly fierce. In order to seize the market share, biotech enterprises with weak sales ability must incorporate their products into medical insurance as soon as possible; Second, at present, biotech enterprises have few listed varieties, usually the first commercial variety, which needs to recover cash flow quickly and in large quantities.
High priced drugs for rare diseases put down their stature and enter medical insurance, and the demand for high-end treatment still needs a multi-level payment system. Access to medication for rare diseases is a global problem. In 2021, Medicare first appeared the rare disease drugs with an annual drug amount of millions, such as Bojian’s nosinasheng sodium injection and Takeda’s agatase a concentrated solution for injection. The “floor price” reported by medical insurance is the result of comprehensive consideration of payment system, competition pattern and other factors, which is not applicable to other high priced drugs. At present, the basic positioning of China’s medical insurance is becoming clearer and clearer. In this context, docking commercial insurance may become a new normal for the commercialization of high-value innovative drugs. In 2020, China’s health insurance revenue was 817.3 billion yuan, a year-on-year increase of 16%, accounting for 11.32% of the total health expenses, maintaining a continuous improvement trend.
Innovative medicine welcomes the second liquidation of the pharmaceutical industry, focusing on independent innovation and clinical value. In the context of volume procurement, enterprises can only transform to innovation in order to seek survival and maintain profit growth. At that time, enterprises with capacity were scarce, so most enterprises chose me too innovation. With the continuous advancement of R & D, the crowded me too track makes the products face fierce competition after listing, and this kind of innovation no longer has its due clinical value and rate of return. We believe that we should pay attention to independent innovative enterprises with sustainable development potential in the future and innovative drug products with high clinical value and barriers. It is suggested to pay attention to: Jiangsu Hengrui Medicine Co.Ltd(600276) , Baiji Shenzhou, Xinda biology, Corning Jerry, Shenzhen Chipscreen Biosciences Co.Ltd(688321) .
Risk tips: 1) policy risk: the introduction rhythm of medical insurance cost control policies such as volume procurement may exceed expectations. 2) R & D risk: pharmaceutical R & D investment is large and the risk is high, and related enterprises have the risk of R & D failure 03) market risk: market cyclical fluctuations may have a negative impact on the pharmaceutical industry.
