Core view
The performance of biomedical sector is weaker than the overall market. From April 4 to 9, 2022, all A-Shares fell by 1.42% (weighted average of total market value), CSI 300 fell by 1.06%, small and medium-sized board index fell by 2.14%, gem index fell by 3.64%, biomedical sector fell by 3.33% as a whole, and the performance of biomedical sector was weaker than that of the overall market. From the molecular section, pharmaceutical business fell by 6.54%, chemical pharmaceuticals fell by 4.53%, medical services fell by 4.00%, medical devices fell by 2.99%, biological products fell by 1.06% and traditional Chinese medicine fell by 2.02%.
Guangdong Alliance announced the results of the proposed selection of Chinese patent medicine, and the decline of exclusive varieties was moderate. On April 8, Guangdong Provincial Drug Trading Center announced the results of the proposed selection / selection of Guangdong alliance Qingkailing and other Chinese patent medicines in centralized volume procurement. A total of 361 products of 53 kinds of drugs were proposed to be shortlisted, with an average decrease of 56%. Among them, 249 varieties are to be selected, with an average decrease of 64%; 112 varieties are proposed to be selected, with an average decrease of 38%. In this centralized collection, the drugs with the same prescription but different drug names are grouped according to the prescription and average daily treatment cost. In principle, the drugs with the same prescription are combined into a group and included into the exclusive varieties for the first time. The exclusive varieties include: Shijiazhuang Yiling Pharmaceutical Co.Ltd(002603) Lianhua Qingwen granules, Tasly Pharmaceutical Group Co.Ltd(600535) Compound Danshen dropping pills and other large varieties. The average decline of exclusive varieties was 18%, of which the average decline of the proposed winning varieties was 19%, and the average decline of the proposed alternative varieties was 15%, with a moderate decline.
Alternative exclusive varieties can still be sold in large quantities through the “disclosure clause”, and the four types of varieties are expected to benefit. For the exclusive varieties, the Guangdong centralized purchase also leaves room for four types of products. The alternative products that have not been used incrementally will be purchased by the medical institutions independently (for the record) after completing the agreed purchase volume of the current year within the purchase year. Among the exclusive products, traditional Chinese medicine innovative drugs, emergency (rescue) drugs, children’s drugs and emergency drugs in response to public health emergencies will be purchased on demand.
Centralized purchase of Chinese patent medicine is the general trend, and focus on the competitive pattern / clinical evidence-based / product efficacy. On the one hand, the purpose of centralized procurement is to eliminate the loss of intermediate links. In recent years, the state has vigorously encouraged the development of traditional Chinese medicine in the hope of providing people with high-quality traditional Chinese medicine products and services at a reasonable price. Blindly pursuing price reduction will hurt the enthusiasm of traditional Chinese medicine enterprises, which is contrary to the original intention of national policies. Based on this, we expect that the policy will not be too radical in the future. The relaxation of the rules of centralized procurement documents in the alliance regions of Guangdong and Hubei also provides a paradigm for the centralized procurement of Chinese patent medicines in the future. The varieties of traditional Chinese medicine with excellent competition pattern, excellent clinical evidence-based and definite product curative effect are expected to match the better bid winning rules. It is recommended to pay attention to: Shijiazhuang Yiling Pharmaceutical Co.Ltd(002603) (pioneer of traditional Chinese Medicine), Chinese traditional medicine (leader of traditional Chinese medicine formula particle subdivision track) China Resources Sanjiu Medical & Pharmaceutical Co.Ltd(000999) (leading brand OTC not affected by medical insurance).
Risk tip: covid-19 epidemic situation changes, the decline of centralized mining is higher than expected, and the price rise of raw materials has an impact
