Matters:
On April 8, 2022, Guangdong Pharmaceutical Trading Center issued the notice on publicizing the proposed winning / alternative results of centralized procurement of Chinese patent medicines such as Qingkailing of Guangdong alliance. The centralized collection of Chinese patent medicines of Guangdong alliance was launched.
Ping An View:
The centralized purchase of Chinese patent medicines by Guangdong alliance is the second large-scale centralized purchase of Chinese patent medicines after the alliance of 19 provinces in Hubei Province. The Guangdong alliance includes six provinces (regions) of Guangdong, Shanxi, Henan, Hainan, Ningxia and Qinghai, of which four provinces except Guangdong and Qinghai are members of the 19 provinces of Hubei Province. In terms of the reported volume of medical institutions, the total pre procurement volume of Guangdong Province in the first year reached 2.160 billion (tablets / tablets / bags /), accounting for more than 60%, and Henan and Shanxi accounted for 23% and 7% respectively, ranking second and third. There are 663 products and 313 enterprises that can be quoted in this centralized purchase. In the end, 88% of the enterprises participate and 87% of the products generate quotations. Finally, 361 products of 174 enterprises are proposed to be selected / selected, of which 30 exclusive products are proposed to be selected / selected. Some varieties are given up strategically considering factors such as the proportion of income in the alliance area and the price system.
The price drop of the proposed winning / alternative exclusive product is better than the market expectation. The centralized purchase rules of Chinese patent medicines of Guangdong alliance are similar to the previous centralized purchase rules of chemical medicines of Guangdong alliance. P1 and P2 correspond to the proposed alternative / proposed winning price respectively, P1 P2. According to our statistics, compared with the highest valid bid price, the price decline of the proposed winning / alternative products is about 64% and 33% respectively, of which the decline of the exclusive products is less than that of the non exclusive products, and the price decline of the proposed winning / alternative products of the exclusive products is about 20% and 15% respectively. If compared with the lowest price in the alliance area, the proposed alternative price of exclusive products will decrease less. For example, the proposed alternative price of Lianhua Qingwen granule ( Shijiazhuang Yiling Pharmaceutical Co.Ltd(002603) ), Zishen Yutai pill ( Guangzhou Baiyunshan Pharmaceutical Holdings Company Limited(600332) ) and other varieties will decrease by only about 1%. As the large varieties of Chinese patent medicines are mainly exclusive varieties, we believe that the centralized purchase of Chinese patent medicines by Guangdong alliance is better than expected. The proposed alternative varieties that have not obtained incremental use shall be purchased by the medical institution independently (for the record) after completing the agreed purchase quantity, among which the traditional Chinese medicine innovative drugs, emergency (emergency) rescue drugs, children’s drugs and emergency drugs in response to public health emergencies shall be purchased on demand.
After the introduction of the 14th five year plan of traditional Chinese medicine, the prosperity of the industry is expected to usher in qualitative changes. It is suggested to grasp the investment opportunities of traditional Chinese medicine around five main lines. 1) Innovative traditional Chinese medicine. The new registration classification is clearly guided by clinical value, and the “Three Combinations” evaluation system clarifies the ideas of R & D, while medical insurance supports the large amount of innovative drugs. It is suggested to pay attention to Shijiazhuang Yiling Pharmaceutical Co.Ltd(002603) , Guiyang Xintian Pharmaceutical Co.Ltd(002873) , Jiangsu Kanion Pharmaceutical Co.Ltd(600557) , etc. 2) Brand OTC traditional Chinese medicine. It mainly focuses on the off-site market and is less affected by the cost control of medical insurance. Benefiting from consumption upgrading, compared with ordinary OTC products, it has stronger cost transfer ability and can maintain high profitability. It is suggested to pay attention to China Resources Sanjiu Medical & Pharmaceutical Co.Ltd(000999) , Guizhou Sanli Pharmaceutical Co.Ltd(603439) , Beijing Tongrentang Co.Ltd(600085) , Henan Lingrui Pharmaceutical Co.Ltd(600285) , Jianmin Pharmaceutical Group Co.Ltd(600976) , Chongqing Taiji Industry (Group) Co.Ltd(600129) , etc. 3) Traditional Chinese medicine formula granules. The traditional Chinese medicine sector has a high growth track. After the pilot, it will enter the stage of simultaneous rise in volume and price, which is expected to reach a scale of more than 100 billion. At the same time, the industry will still focus on leading enterprises with first mover advantage. It is suggested to pay attention to Chinese traditional medicine, Tianjin Chase Sun Pharmaceutical Co.Ltd(300026) , Guizhou Yibai, etc. 4) Short term focus on traditional Chinese medicine injections with relaxed medical insurance restrictions. The relaxation of injections benefits from the spontaneous safety and effectiveness evaluation of enterprises. The verified traditional Chinese medicine injections are expected to gradually lift the restrictions and bring performance flexibility in the short term. It is suggested to pay attention to Kpc Pharmaceuticals Inc(600422) , Shandong Buchang Pharmaceuticals Co.Ltd(603858) , Guangxi Wuzhou Zhongheng Group Co.Ltd(600252) , etc. 5) TCM medical services Wuxi Online Offline Communication Information Technology Co.Ltd(300959) combined mode to solve the problems of insufficient supply and structural mismatch of traditional Chinese medicine medical services. It is suggested to pay attention to GUSHENG hall, etc.
Risk tips: 1) policy and regulatory risks: the scale of centralized purchase and price reduction of Chinese patent medicine are higher than expected, and the progress of application, review and approval of innovative traditional Chinese medicine is lower than expected. 2) Medical insurance support is not as strong as expected: innovative traditional Chinese medicine is sold in large quantities through medical insurance negotiation. If the negotiation fails or the price reduction is too large, the profit expectation will be reduced. Traditional Chinese medicine formula granules and traditional Chinese medicine injections benefit from medical insurance support and relaxation of restrictions, and the support may be less than expected. 3) R & D risk: the “Three Combinations” theory of traditional Chinese medicine innovation needs to accept the process, and there is the possibility of R & D failure of innovative drugs. There is a possibility that the progress of formulating the national standard of traditional Chinese medicine formula granules may be lower than expected.
