Event: on April 8, 2022, the results of the proposed selection / selection of Chinese patent medicines from the six provinces of Guangdong were publicized. The members included six provinces of Guangdong, Shanxi, Henan, Hainan, Ningxia and Qinghai, involving 53 major varieties and 132 product specifications, including well-known products such as Qingkailing, Xuesaitong, Xingnaojing and compound salvia miltiorrhiza. The final result is that 87.9% of the enterprises participate, 86.9% of the products generate quotations, and 361 products of 174 enterprises are proposed to be selected / alternative, of which 30 exclusive varieties generate enterprises to be selected (alternative), with a decrease of about 21%.
The decline of non exclusive varieties is obvious, and the average decline of exclusive varieties is mild and has strong bargaining power. This centralized purchase involves 53 major varieties and 132 product specifications, including Qingkailing, Xingnaojing, Shuxuening and other major varieties. The number of products that can be quoted is 663, and the number of enterprises that can be quoted is 313. Finally, 576 products and 275 enterprises successfully completed the quotation. From the perspective of completion rate, 87.9% of enterprises and 86.9% of products generate quotation, and nearly 100 varieties do not participate in the quotation. On the whole, the competition of non exclusive varieties is fierce, and the average decline and maximum decline are obvious. There are 7 groups of non exclusive varieties involving 10 or more enterprises, and up to 73 enterprises in the compound salvia miltiorrhiza group meet the requirements. If the highest effective bid price (publicity) and the proposed bid price of representative products are used, the average decline of non exclusive products to be bid is – 67.8%, and the decline of some varieties is more than 90%; The average decline in the bid winning of exclusive products is 21.8%, with obvious advantages, and the overall decline is relatively mild. If the average transaction price of some exclusive products is calculated, the actual decline is significantly less than the average decline calculated according to the highest declared price. Taking Lianhua Qingwen granule as an example, the alternative price proposed by the company is 2.3295 yuan / bag. If calculated according to the highest declared price (3.75 yuan / bag), the decrease is as high as 37.9%, but the actual average transaction price of the product is 2.353 yuan / bag, and the actual decrease is only about 1%; In addition to Lianhua Qingwen granule, the actual decline of Weisu granule (sugar free type), Xiaoer Xiaoji Zhike oral liquid and Xiyanping injection is also significantly lower than that calculated by the maximum declared price of these products.
Compared with the centralized collection of Chinese patent medicines in Hubei, the centralized collection of exclusive varieties in Guangdong has benefited significantly. On December 27, 2021, Hubei Province led the inter provincial alliance of 19 provinces of Chinese patent medicine to announce the successful results of centralized volume procurement. A total of 157 enterprises and 182 products from 17 product groups in the procurement catalogue participated in the quotation, and the procurement scale was nearly 10 billion yuan. Finally, 97 enterprises and 111 products were selected, with a selection rate of 62%. The average price of the selected products decreased by 42.27% and the maximum decrease was 82.63%. In the centralized purchase of Hubei proprietary Chinese medicines, the price of exclusive varieties also fell by a large margin. Generally speaking, the price of exclusive varieties of Hubei proprietary Chinese medicines generally fell by about 40%, of which Xingling dropping pills dropped by 72% and Shuanghuanglian tablets dropped by 13%. Therefore, the average decline of exclusive varieties in the centralized purchase of Guangdong alliance is 21%, which is far lower than that of Hubei alliance.
Investment suggestion: the favorable policies of traditional Chinese medicine have been implemented continuously. The 14th five year plan has played a significant role in promoting the development of traditional Chinese medicine, and the traditional Chinese medicine sector will usher in the most important development stage. Under the background of centralized purchase of traditional Chinese medicine, we suggest to pay attention to the following: Traditional Chinese medicine formula particles, the sector with favorable policies and the fastest realization, the expectation of price increase in the short term, and the pressure of centralized purchase is small. Focus on: Traditional Chinese medicine, Tianjin Chase Sun Pharmaceutical Co.Ltd(300026) , China Resources Sanjiu Medical & Pharmaceutical Co.Ltd(000999) , etc; Innovation of traditional Chinese medicine and modernization of traditional Chinese medicine are the core development direction in the future, focusing on: Shijiazhuang Yiling Pharmaceutical Co.Ltd(002603) , Guiyang Xintian Pharmaceutical Co.Ltd(002873) , Jiangsu Kanion Pharmaceutical Co.Ltd(600557) , etc; OTC of traditional Chinese medicine is expected to increase both volume and price, focusing on: Chongqing Taiji Industry (Group) Co.Ltd(600129) , Jianmin Pharmaceutical Group Co.Ltd(600976) , Henan Lingrui Pharmaceutical Co.Ltd(600285) , etc; Traditional Chinese medicine will become the main anti epidemic force in the post epidemic era, focusing on: Shijiazhuang Yiling Pharmaceutical Co.Ltd(002603) , Shandong Buchang Pharmaceuticals Co.Ltd(603858) etc.
Risk tip: the policy implementation is lower than expected, the risk of centralized purchase and price reduction of traditional Chinese medicine products, and the industry competition intensifies.
