Core view
National policies continue to support the development of traditional Chinese medicine industry. The traditional Chinese medicine industry is one of the key industries protected by the state. The relevant national policies actively encourage the development of the traditional Chinese medicine industry and the traditional Chinese medicine decoction piece industry. The relevant regulatory departments of various provinces have also formulated relevant policy provisions to increase support for the traditional Chinese medicine industry and related enterprises. The continuous improvement of the industry supervision system and the support of industry regulations and policies are conducive to the sustainable and healthy development of the traditional Chinese medicine industry.
The price reduction of centralized purchase of Chinese patent medicine was moderate, in line with expectations. The centralized procurement of Chinese patent medicines of the 18 provincial alliance was implemented, and a total of 157 enterprises and 182 products participated in 17 product groups in the procurement catalogue, of which 97 enterprises and 111 products were selected, with an average decrease of 42.3% and a maximum decrease of 82.6%. According to the calculation, it is estimated that the annual drug cost can be saved by more than 2.6 billion yuan. The decline of exclusive varieties is limited, and some varieties with better competition pattern only reduce prices by 10% – 30%. The overall price reduction is moderate, which is in line with expectations.
Brand Chinese medicine has the ability to raise prices. Recently, the ex factory prices of Beijing Tongrentang Co.Ltd(600085) Angong Niuhuang Pill and Chongqing Taiji Industry (Group) Co.Ltd(600129) Huoxiang Zhengqi oral liquid have increased, which has aroused the market’s attention to the price raising ability of brand traditional Chinese medicine. Due to the price rise of upstream raw materials, brand traditional Chinese medicine has become the main force of price rise. Brand traditional Chinese medicine has both drug and consumption attributes. It has strong independent consumption and superimposed consumption upgrading. It is basically not affected by the cost control of medical insurance. In recent years, due to the limitation of precious traditional Chinese medicine raw materials, the price has increased significantly.
Investment suggestions: be optimistic about innovative traditional Chinese medicine, brand traditional Chinese medicine with consumption attribute and scarcity attribute, and transformation of high-quality and low-cost traditional Chinese medicine manufacturers. It is recommended that Jianmin Pharmaceutical Group Co.Ltd(600976) , the in vitro cultivation bezoar business of its affiliated subsidiary continues to rise in both volume and price under the background of shortage of natural bezoar, and the price of its OTC brand Longmu Zhuanggu granules has also been raised. It is recommended to pay attention to Zhangzhou Pientzehuang Pharmaceutical Co.Ltd(600436) , Beijing Tongrentang Co.Ltd(600085) , Guangyuyuan Chinese Herbal Medicine Co.Ltd(600771) , China Resources Sanjiu Medical & Pharmaceutical Co.Ltd(000999) , etc.
Risk warning: the pressure of fee control and price reduction is higher than expected; Risk that the price decline and promotion speed of drugs and high-value consumables purchasing in volume exceed expectations
