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Changes Of Multinational Pharmaceutical Enterprises In China Under The Normalization Of Centralized Purchasing

2020/9/9 10:12:00 0

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"Under the background of centralized purchasing, great changes have taken place in China's pharmaceutical industry. It is unrealistic for multinational pharmaceutical companies to get the "luxury" price of expired drugs. As a result, multinational pharmaceutical enterprises have adjusted their strategies and business strategies in China. " Recently, the general manager of Epson, Chen Jialin, said in an interview with the reporter of the 21st century economic report.

After several rounds of centralized purchase, the price reduction direction of original expired drugs is very clear, which also has a great impact on multinational pharmaceutical enterprises in China. A senior person in the industry pointed out to the reporter of the 21st century economic report that the third batch of national centralized purchase has triggered a series of chain reactions. The abandonment of most of the multinational pharmaceutical enterprises is a microcosm, including the constant changes of the senior management of multinational pharmaceutical enterprises.

Chen Jialin pointed out that in this big background, multinational pharmaceutical enterprises are also constantly thinking about their respective coping strategies. "Most of the mature products of multinational pharmaceutical enterprises will focus on the external market, including retail pharmacies and grassroots markets, and then the layout of innovative drugs. Some enterprises, including prebiotic, are also following this path."

Compared with the "Silence" in the third batch of countries, multinational pharmaceutical enterprises are constantly moving in the Chinese market. For example, not long ago, Epson signed a strategic cooperation agreement with Baiyang pharmaceutical and Shanghai Pharmaceutical Holding Co., Ltd. to jointly develop the Chinese market, serve the grassroots and retail channels; Bayer announced to launch the capacity improvement project of Beijing factory of prescription drugs, and multinational pharmaceutical enterprises such as Sanofi, Novartis, Bayer, and Takeda released the latest drugs or products in China.

The change of centralized mining

In 2016, the president of China region of a large multinational pharmaceutical company told reporters of 21st century economic report that although the patent cliff has appeared, they will not take the initiative to reduce the price, because there is not a batch of high-quality generic drugs in China. In the following years, some patents expired, and the original research drugs still maintained a high growth in the Chinese market, and the prices remained high.

However, with China's new policies such as consistency evaluation and national centralized purchase, the price reduction of expired drugs of original research patents of multinational pharmaceutical enterprises has become normal, and the decline rate is relatively large. For example, the original research drug Bayer beitangping directly reduces the price by 91%, and wins the bid with the lowest price of 0.18 yuan / 50mg. In addition, many varieties not included in the "4 + 7" centralized procurement list have also been greatly reduced due to the influence of centralized purchase, such as Roche / Chinese and foreign pharmaceutical beads The price reduction rate of McAb injection in Jiangsu, Shaanxi and other provinces was as high as 57%.

From the experience of the three national centralized procurement, the first round of multinational pharmaceutical enterprises is in a wait-and-see state; after the second round, some foreign pharmaceutical enterprises have made obvious adjustments, and began to participate in the expansion of bidding and procurement with a low attitude and increase the price reduction range. According to incomplete statistics, more than a dozen multinational pharmaceutical enterprises participated in the purchase of the second tire volume, among which 6 foreign enterprises performed well and 7 varieties were shortlisted. However, in the third round of national centralized procurement, most multinational pharmaceutical enterprises abandoned the standard.

Chen Jialin told the 21st century economic reporter that after three rounds of national centralized purchase, multinational pharmaceutical enterprises have also made clear their policies on the development of Chinese medicine, and at the same time, they have begun to change the business strategy of original research drugs. "Many multinational pharmaceutical enterprises have made it clear that it is impossible for the original research drugs to get the" luxury version "price when the patent is expired in China's in-hospital market. They need to think about how to balance the market prices inside and outside the hospital after winning the bid, and how to adjust after the bid is dropped."

"Centralized purchasing has a positive or negative impact on the winning varieties. Pharmaceutical companies, including multinational pharmaceutical companies, will consider it in many ways. If a company wins the bid in the first batch of centralized purchase, but fails to win the second round, the negative effect is extremely severe for the enterprise. Because of the price linkage reason, they use the floor price of the hospital to do the retail pressure is very big, and if they fail to win the bid, the retail price can't be carried back. " Mr Chen said.

Another industry insiders pointed out that the production line also has great risks. In the first year, many multinational pharmaceutical enterprises are very cautious, which is one of the important reasons. Because it won the bid for the first time and expanded the production line, but if it lost the bid in the next year, the previous investment would return to zero. Even a three-year contract is risky for a production line.

In fact, the decline in the revenue of some enterprises that have won the bid is also a reason for multinational pharmaceutical enterprises to give up the centralized purchasing market.

For example, Sanofi pointed out in the first quarter of 2020 financial report that in the Chinese market, affected by the sharp price reduction of clopidogrel, Irbesartan / irbesartan hydrochlorothiazide and other products, Sanofi's overall revenue in China was 680 million euro in the first quarter, down 14.4 percentage points. Among them, clopidogrel decreased by 53.5%, and Irbesartan / irbesartan hydrochlorothiazide decreased by 32.7%.

Bayer released its financial report for the second quarter of 2020 on August 4, with group sales of 10.54 billion euro, down 2.5% year-on-year. The report pointed out that the main reason for the decline in revenue in the second quarter was the impact of the epidemic situation and the policy of centralized purchasing. Among them, the sales of acarbose, the winning product of national centralized purchasing, dropped sharply. In the second quarter, it was only 40 million euro, compared with 155 million euro in the same period last year. In the first half of 2020, acarbose's sales volume was 156 million euro, a decrease of 54.4% year-on-year.

At the same time, the impact of centralized purchasing on enterprises including multinational pharmaceutical enterprises is the upsurge of senior managers' turnover. Up to now, the senior executives of Ge, Geely and Baird have announced their resignations in 2020.

A person in charge of China region of a multinational pharmaceutical enterprise told the 21st century economic reporter that domestic generic drugs have entered an era of meager profits, forcing multinational pharmaceutical enterprises to seek business transformation, actively seek opportunities for market cooperation outside the hospital, and at the same time focus on the R & D and innovation of new drugs. Under this background, a series of adjustments will be made to the personnel industry in China.

Strategic change

In fact, after three national centralized purchasing, multinational pharmaceutical enterprises have a clear understanding of China's pharmaceutical policy guidance, such as volume purchase, and are also thinking and adjusting.

For example, after the failure of centralized purchase, Pfizer has made a re analysis of relevant strategies and made a strategy of "one product, two regulations and three dosage forms" to help the hospital establish a rational drug use list. It is suggested that Pfizer should retain a national centralized procurement variety and another original research drug variety. On the one hand, ensure that medical institutions can complete the task of national centralized purchase; on the other hand, when the national centralized purchase of drugs is not enough, or high-end patients have the demand for original research drugs, their own varieties can make up for the needs of patients.

"More enterprises are also focusing on the market outside of centralized purchasing." Chen Jialin told the 21st century economic reporter that some of the market shares in the hospital were made up through the market outside the centralized purchasing.

Chen Lin pointed out that as the main channel of drug sales in hospitals, as the main channel of drug sales in the past, as the main channel of drug sales, Chen Lin has weakened the awareness of drug sales both inside and outside the hospital.

For example, in-hospital market share of Smecta (montmorillonite powder) was more than 60% in the hospital market. With the arrival of national centralized purchasing, Yipu Sheng will increase its investment in retail market, but the in hospital market still has 23% market share, and the compound growth rate of external retail market such as Dalian lock drugstore also reaches 37%, and the overall retail market also has 60% market share.

"This may be related to the attributes of the product, and its price sensitivity is not high, so it has better performance in retail. Patients and consumers have a higher recognition and recognition of the brand, so it can make up for the loss of the hospital market." Chen Jialin said to the 21st century economic reporter.

Fu Gang, chairman of Baiyang Pharmaceutical Group, also pointed out that in the face of changes in the market environment, multinational enterprises and domestic mainstream pharmaceutical enterprises will face great challenges. How to transfer the original marketing ability of enterprises from hospital market to retail market and form a benign layout is worth pondering. In addition, enterprises also need to constantly enhance the strength to resist the pressure of cost competition, realize the cooperation with external resources, optimize the human cost, and release the maximum product value.

At present, many multinational pharmaceutical enterprises have also turned their attention to the retail, grassroots, Internet and other markets outside the centralized purchase.

Chen Jialin pointed out that at present, multinational pharmaceutical enterprises need to change their thinking and actively look for more business development paths.

For example, AstraZeneca has been testing water for upgrading to a "platform type" enterprise. At present, AstraZeneca has been continuously developing overall solutions with various partners in the industry in nearly 10 disease areas. At the same time, it has also made an attempt in the field of traditional Chinese medicine. It has signed an agreement with green leaf Pharmaceutical Group to obtain the exclusive promotion right of its Xuezhikang Capsule Products in mainland China.

It is understood that in the future, Epson will have more forms of cooperation with its partners. The company also plans to accelerate the introduction of new products from the headquarters and continuously enhance the brand value of classic brands. "In the future, we will introduce a new formulation of Smecta into China, and at the same time, we may cooperate with the products of local companies, and even extend it to health food as well as drugs. Because Smecta has been deeply involved in the retail market for many years, we will also use our retail capacity to operate these products in the future. "

Chen Jialin also said that in terms of digitalization, Epson will lay out e-commerce channels as well as retail. In the face of the emergence of new formats and better service for patients, enterprises hope to work with doctors to better manage many patients through the electronic platform. After patients are treated in large hospitals on the electronic platform, they can also get more services and benefits when they return to the local area.

"China pharmaceutical e-commerce market data report in 2019" shows that due to the epidemic situation, the popularity of internet medical services will rise. It is estimated that the transaction scale of pharmaceutical e-commerce will approach 200 billion yuan in 2020, reaching 187.64 billion yuan, an increase of 94.58%.

In addition, Chen Jialin analyzed to the 21st century economic reporter that at present, in addition to actively arranging the market for centralized purchase, multinational pharmaceutical enterprises also pay more attention to the development of innovation and accelerate the introduction of innovative drugs. "In the next 3-5 years, we will try our best to introduce more innovative products for the treatment of rare and even extremely rare diseases into China more quickly. Before that, the sustained-release lanruide acetate injection (pre filled) was officially approved for the treatment of acromegaly

In addition, Novartis, Bayer and other innovative drugs are also speeding up.

For example, on August 25, Novartis's new generation oral innovative drug for multiple sclerosis (generic name: xinimode) issued the first prescription in China; on August 27, Bayer announced that dofigo (radium chloride [223ra] injection) was approved by the State Drug Administration for the treatment of castration resistant prostate cancer (CRPC) patients with symptomatic bone metastasis and no known visceral metastasis; 8 The drug was approved by the national administration of drug administration of China on March 28 to replace α - galactosidase. (Editor: Xu Xu)

 

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