Key investment points
Event: release of the 14th five year plan for the development of traditional Chinese Medicine
On March 29, 2022, the State Council issued the 14th five year plan for the development of traditional Chinese medicine, which made a comprehensive plan and deployment for the traditional Chinese medicine industry during the 14th Five Year Plan period. In the task, the following points were mainly emphasized:
① quantitative development indicators: 15 main development indicators are proposed, which clearly quantify the goal of 2025 in terms of traditional Chinese medicine medical institutions, beds, physician resources, clinical departments and so on.
② emphasize the innovation of traditional Chinese medicine: strengthen the scientific and technological innovation of traditional Chinese medicine, strengthen the research on clinical efficacy evaluation, and emphasize the research and development of new traditional Chinese medicine based on ancient classic prescriptions, famous and old traditional Chinese medicine classic prescriptions, effective cost components, etc.
③ research and development of pediatric Chinese patent medicine: support the innovative research and development of Chinese patent medicine for children.
④ increase the use of traditional Chinese medicine in diagnosis and treatment: emphasize the greater role of traditional Chinese medicine in the treatment of major and difficult diseases, chronic diseases and sudden infectious diseases; At the same time, promote the mode of integrated traditional Chinese and Western medicine in general hospitals, and bring the coordinated development of traditional Chinese and Western medicine into the performance appraisal of public hospitals.
⑤ improve the level of Industrial Development: encourage the industrialization, commercialization and moderate large-scale development of traditional Chinese medicine. Traditional Chinese medicine decoction pieces with special processing methods will be included in the protection scope of traditional Chinese medicine varieties.
⑥ improve the traditional Chinese medicine registration system: establish a traditional Chinese medicine registration and evaluation evidence system of “Three Combinations” of traditional Chinese medicine theory, human experience and clinical trials, and promote the formulation and release of the catalogue of ancient classic prescriptions.
⑦ improve the price of traditional Chinese medicine and medical insurance policy: the prepared pieces and preparations of traditional Chinese medicine processed and used by medical institutions shall be subject to independent pricing, and those that meet the conditions shall be included in the payment scope of basic medical insurance according to procedures; Encourage the implementation of traditional Chinese and Western medicine with the same disease, the same effect and the same price. General TCM diagnosis and treatment projects can continue to be paid according to the project. We will continue to deepen the participation of traditional Chinese medicine in studies such as pay per bed day and pay per head.
⑧ internationalization of traditional Chinese medicine: share the experience of epidemic prevention and control of traditional Chinese medicine with the world, and expand the cooperation of traditional Chinese medicine with relevant overseas governments.
In addition, the plan emphasizes the following points to promote the implementation of policies:
① included in the government performance appraisal: it is emphasized to improve the cross departmental coordination mechanism of various provinces and cities for the work of traditional Chinese medicine, and promote the inclusion of the work related to traditional Chinese medicine in the government performance appraisal.
② provide financial support: encourage financial institutions to provide financial support for projects in the field of traditional Chinese medicine, so as to promote the diversification of the development of traditional Chinese medicine.
Viewpoint: planning upgrade and continuous implementation
A new journey of traditional Chinese medicine and a new main line of investment. Since the release of the “14th five year plan” for the development of pharmaceutical industry on January 30, 2022, the “14th five year plan” for the development of traditional Chinese medicine is a further guidance for the traditional Chinese medicine industry. The policy continues to change from planning to implementation. There is an obvious positive trend in the drug end, payment end and hospital end, and there is a huge space for the expansion of the industry. It is worth noting that the 13th five year plan for the construction of traditional Chinese medicine culture in December 2016 was issued by the State Administration of traditional Chinese medicine, while the 14th five year plan for the development of traditional Chinese medicine was issued by the State Council. We believe that this shows that the state attaches great importance to traditional Chinese medicine and has a different impact on each segment of the traditional Chinese medicine industry:
① innovative traditional Chinese medicine / classic prescriptions: usher in a period of accelerated growth. The plan’s support for innovative drugs includes strengthening the training of innovative talents, continuously optimizing the registration management at the application end, and continuously improving the medical insurance policy at the payment end. We believe that with the support of the above policies, the approval of innovative traditional Chinese medicine will continue to accelerate. It is an obvious positive signal that the number of new traditional Chinese medicine approved in 2021 will reach a new high in recent years. By 2025, innovative traditional Chinese medicine is expected to usher in explosive growth, and pediatric drugs will also be further supported.
② brand traditional Chinese medicine: supply and demand resonate, and the sea benefits well. Driven by consumption upgrading, brand traditional Chinese medicine with medical and health care attributes has maintained a rapid growth trend on the demand side. We believe that the plan encourages the production and R & D of traditional Chinese medicine health products such as health food and formula food for special medical purposes, which will be further support on the supply side, and traditional Chinese medicine health care related products are expected to achieve a resonance between supply and demand; In addition, brand traditional Chinese medicine will also be favored by traditional Chinese medicine because of its strong brand attribute.
③ prepared pieces of traditional Chinese medicine / traditional Chinese medicine: the industry is gradually standardized, and the leaders benefit. The state will conduct stricter and standardized supervision on the whole industrial chain of traditional Chinese medicine, and have higher quality requirements for the planting and breeding of traditional Chinese medicine and the processing methods of traditional Chinese medicine. We believe that leading companies with integrated production advantages and guaranteed product quality will benefit.
④ traditional Chinese medicine medical service: policy support and industry expansion. At present, the medical service industry of traditional Chinese medicine is still in the early stage of development, and the competition pattern is relatively scattered. We believe that TCM medical service institutions will usher in new industry norms. With the strengthening of TCM medical personnel training, the industry is expected to expand rapidly.
Investment advice
We recommend focusing on:
① innovative traditional Chinese medicine: Shijiazhuang Yiling Pharmaceutical Co.Ltd(002603) , Jiangsu Kanion Pharmaceutical Co.Ltd(600557) , Chongqing Taiji Industry (Group) Co.Ltd(600129) , Guiyang Xintian Pharmaceutical Co.Ltd(002873) , Shandong Buchang Pharmaceuticals Co.Ltd(603858) , etc;
② pediatric medication: Hubei Jumpcan Pharmaceutical Co.Ltd(600566) , China Resources Sanjiu Medical & Pharmaceutical Co.Ltd(000999) , Jianmin Pharmaceutical Group Co.Ltd(600976) , etc;
③ brand traditional Chinese medicine: Zhangzhou Pientzehuang Pharmaceutical Co.Ltd(600436) , Yunnan Baiyao Group Co.Ltd(000538) , Beijing Tongrentang Co.Ltd(600085) , Zhejiang Shouxiangu Pharmaceutical Co.Ltd(603896) , etc;
④ TCM medical services: gushengtang, Beijing Tongrentang Co.Ltd(600085) .
Risk tips
The implementation of the policy is not as expected; Industry competition intensifies; The price of raw materials fluctuates.
