Dynamic tracking report of pharmaceutical and biological industry: continue to encourage innovation, “three medical” linkage can be expected

Key investment points

Event: on March 5], the 2022 government work report was released, making plans for national economic development, national economy and people’s livelihood. Among them, the pharmaceutical industry maintains the main tone of innovation and efficient use of medical insurance funds, emphasizes promoting the direct settlement method of cross provincial and remote medical treatment, and puts forward the requirements for the sustainable development of traditional Chinese medicine, vaccine, medical services and other industries.

The development strategy driven by continuous innovation and favorable policies for innovative pharmaceutical enterprises: at present, the China Meheco Group Co.Ltd(600056) industry is still in an important period of strategic opportunities. In 2022, the government will give more tax support to innovative enterprises, and pharmaceutical innovation will pursue higher goals. In 2022, we will continue to implement the policy of adding and deducting R & D expenses, increase the proportion of adding and deducting scientific and technological small and medium-sized enterprises from 75% to 100%, and promote high-tech innovative enterprises to increase R & D investment; Focus on strengthening and supplementing the chain of key enterprises, promote international cooperation to cultivate talents, and promote the transformation of innovative pharmaceutical enterprises from “metoo”, “fast follow” to “mebetter” and “first in class”. It is expected that the process of domestic substitution in the pharmaceutical industry chain will be accelerated. In addition, the report points out that efforts to ensure vaccine R & D and supply and support the reform of traditional Chinese medicine are expected to increase investment in vaccine R & D, production and innovation of traditional Chinese medicine.

Improve the use efficiency of medical insurance funds and promote the provincial overall planning of medical insurance: China’s GDP target in 2022 is about 5.5, down from the growth target in previous years. Medical insurance income and accumulated balance are highly correlated with the growth trend of GDP. The pressure on medical insurance income and accumulated balance of medical insurance fund is still on. Improving the use efficiency of medical insurance fund is still the primary task in 2022. It is expected to continue to promote the purchase of drugs and high-value medical consumables, and alleviate the pressure on medical insurance fund from the supply side of drugs and equipment; Promote DRG (pay by groups related to disease diagnosis) and dip (pay by disease score) to improve the use efficiency of medical insurance funds. In addition, the report emphasizes promoting the provincial overall planning of medical insurance, improving the direct settlement method for cross provincial and remote medical treatment, and putting forward higher requirements for the collection and payment of provincial government medical funds.

Continue to support social medical services and make up for the shortcomings of specialized services: China’s aging trend intensifies and the medical demand continues to increase. It is expected that the policy will continue to support social medical services and give more favorable policies to private medical service institutions. At the same time, promote the cooperation between public institutions and private institutions, jointly do a good job in medical services and establish a hierarchical diagnosis and treatment system. In addition, based on China’s current environment of low fertility and increasing aging, we will make up for the shortcomings of services in maternal and child Pediatrics, mental health and geriatrics, and improve the medical service system, which is conducive to the national economy and the people’s livelihood.

Investment suggestion: we believe that the 2022 government work report once again shows the government’s support for pharmaceutical innovation and improving the medical service system, as well as its concern to expand the coverage of medical insurance and improve the use efficiency of medical insurance funds. Through the volume purchase, the medical insurance cost control has achieved initial results. It is expected to continue to implement the volume purchase policy without affecting the innovation of enterprises, expand the coverage, enrich the medical insurance fund, improve the quality of medical services, improve the medical service system, form the “three medical” linkage, benefit the national economy and the people’s livelihood, and promote the development of the industry. It is suggested to focus on the main theme of the annual strategy “through medical insurance”, such as Chongqing Taiji Industry (Group) Co.Ltd(600129) , Zhejiang Shouxiangu Pharmaceutical Co.Ltd(603896) ; The supply chain can independently control relevant objects, such as Tofflon Science And Technology Group Co.Ltd(300171) , Truking Technology Limited(300358) ; Undervalued targets such as Shanghai Runda Medical Technology Co.Ltd(603108) , Shanghai General Healthy Information And Technology Co.Ltd(605186) .

Risk warning: the implementation of the policy is not as strong as expected; Macroeconomic risks, etc.

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