Investment logic
Three medical linkage, and medical reform has been deepened. In terms of the policy itself, we believe that in the future, we will focus more on the continuous implementation and fine management of the existing policies. After the institutional reform of the State Council, the payment side Medical Insurance Bureau led the “three medical linkage” to continuously optimize the structure, continuously promote the strategic and oriented purchase of medical insurance, and solve the unmet clinical needs.
On the payment side, the medical insurance system is becoming more and more mature and refined, and the drug access negotiation is gradually normalized. The development of China’s medical insurance system has experienced five main periods. Since 2017, China has begun to gradually build a medical insurance system with Chinese characteristics. Since 2017, a number of policies have been intensively released. In 2018, the National Medical Security Bureau was officially established and became an institution directly under the State Council. Since 2020, the dynamic adjustment mechanism of medical insurance has been implemented, and the medical insurance negotiation has become a normalized medical insurance adjustment access mechanism once a year. Reviewing the results of medical insurance negotiations over the years, we find that the success rate of medical insurance negotiations in recent years is high, and drugs can be exchanged at price with the help of medical insurance.
In the supply side medical review, the number of approved new drugs is rising, and chemical and biological products are still the mainstream. Since 2017, the number of innovative drugs approved each year has more than doubled compared with the previous year. A total of 91 innovative drugs were approved in 2021, a record high. From the perspective of domestic / imported proportion, the proportion of domestic innovative drugs showed an overall upward trend from 2017 to 2021. The domestic innovative drugs approved in 2021 exceeded the imported innovative drugs approved in the same year for the first time. According to the category of drugs, chemical drugs and biological products are still the mainstream.
Upstream pharmaceutical R & D investment continued to rise, with Baiji, Hengrui and Fosun in the forefront. Taking A-share listed pharmaceutical companies as an example, in 2015, the total R & D expenditure of A-share listed pharmaceutical companies was only 18.9 billion yuan, while in 2020, the total R & D expenditure of A-share listed pharmaceutical companies reached 69 billion yuan, with a CAGR of 29% in five years. Among the top 10 A-share listed pharmaceutical companies with R & D expenditure, Baiji Shenzhou, which has not yet made a profit, ranks first with R & D expenditure of 8.9 billion yuan, Jiangsu Hengrui Medicine Co.Ltd(600276) and Shanghai Fosun Pharmaceutical (Group) Co.Ltd(600196) followed.
The R & D pipeline of innovative drugs is rich and has a certain gradient. At present, there are a large number of innovative drugs in clinical research and development in China. From the perspective of research and development stage, the number of innovative drugs in phase I is the largest and the number of innovative drugs in phase III is the least, which is in line with the natural process of innovative drug research and development. The number of innovative drugs approved by ind remained basically stable from 2015 to 2019, but it has increased significantly in recent two years. The number and proportion of domestic innovative drugs have also increased steadily in recent two years, reflecting the trend and ability of China Meheco Group Co.Ltd(600056) innovative R & D.
Investment advice
Optimistic about China Meheco Group Co.Ltd(600056) innovation, it is recommended to pay attention to pharmaceutical innovation and innovation Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) chain direction.
It is suggested to focus on: Asymchem Laboratories (Tianjin) Co.Ltd(002821) , Wuxi Apptec Co.Ltd(603259) , Kingsley biotechnology, Joinn Laboratories (China) Co.Ltd(603127) , Jiangsu Hengrui Medicine Co.Ltd(600276) .
Risk statement
The risk of new drug R & D falling short of expectations or failure, the risk of innovative drugs going to sea falling short of expectations, the risk of investment and financing falling short of expectations, the risk of intensified competition in China and overseas markets, the risk of medical insurance negotiation falling short of expectations, the risk of medical insurance control fees exceeding expectations, the risk of sharp price reduction in centralized procurement, the risk of industrial regulatory policies, etc.
