The selection results of the highly anticipated tenth batch of national drug procurement have been announced.

First Finance learned that 62 kinds of drugs were successfully purchased, all of which were out of patent, produced by many enterprises, and fully competitive, covering hypertension, diabetes, tumors, cardiovascular and cerebrovascular diseases, infections, mental diseases and other fields; A total of 385 products from 234 companies have obtained the qualification to be selected.

According to the selection results released by Shanghai Sunshine Pharmaceutical Procurement Network, although the overall average decrease has not been announced, based on several super large varieties, the price per box (1 box of 100 tablets) of 0.63mg "Compound Alpha Ketonic Acid Tablets" produced by Beijing Fuyuan Pharmaceutical ranges from 149 yuan to 178.99 yuan, with a proposed selection price of 42.82 yuan, a decrease of over 71%; There is also a 10ml specification of "Doxorubicin Hydrochloride Liposome Injection" produced by Qilu Pharmaceutical. The previous online price was 1979.97 yuan, and the proposed selected price is 118 yuan, a decrease of more than 94%. The average reduction of 374 varieties from the previous 9 batches of centralized procurement exceeded 50%.

Industry insiders say that this centralized procurement has set a historical record in terms of both the number of varieties and the number of participating enterprises.

Public information shows that the overall sales scale of 62 varieties will exceed 40 billion yuan in 2023, including some super varieties worth 1 billion yuan to 2 billion yuan, such as compound α - ketoacid tablets (for the treatment of protein metabolism disorders), norepinephrine bitartrate injection (for the treatment of cardiogenic shock), laoxycef sodium for injection (broad-spectrum antibiotics), doxorubicin hydrochloride liposome injection (anti-tumor), and sitagliptin oral constant release dosage form (for the treatment of type II diabetes).

Cost control is becoming increasingly refined

From the perspective of characteristics, this centralized procurement focuses on supply while stabilizing expectations.

On the one hand, this is reflected in the fact that the annual procurement demand of medical institutions nationwide has reached 9 billion pieces (pieces), stabilizing the production capacity of enterprises in the next three years through a "volume based" approach. On the other hand, on average, each drug has more than 6 companies winning bids. In addition, centralized procurement also stipulates the implementation of a supply mode of "one enterprise as the main supplier and two enterprises as backup suppliers" in each province to enhance clinical supply resilience.

What are the differences between the rules of this centralized procurement and the previous batches? Jiang Changsong, Assistant Dean of the National Medical Insurance Research Institute at Capital Medical University, stated that firstly, there is a greater emphasis on supply security; In the past few batches, the number of single species allowed to enter hospitals and grassroots level was 5, but this time the threshold must meet 7. Secondly, it has increased the level of competition among pharmaceutical companies; This is mainly reflected in the constraints on B-certified enterprises and the increase in the association of commissioned production (to prevent inter enterprise bidding, etc.).

Thirdly, further control the price difference; In this rule, pharmaceutical companies must declare prices that are 1.8 times lower than the lowest "unit comparable price" for the same variety in order to be selected, which is also aimed at narrowing the sales gap between varieties in different provinces.

What are the impacts on the industry side? From the situation of this centralized procurement and quotation stage, it can be seen that the quotations from pharmaceutical companies are mostly moderate, with smaller fluctuations and a more rational approach. Mao Zongfu, director of the Global Health Research Center at Wuhan University, told reporters at the bid opening that compared to the initial batches of national organized centralized procurement, pharmaceutical companies now do their "homework" in advance, that is, calculate the final production cost based on the annual production volume, while also taking into account a certain sales investment. "The larger the quantity quoted, the lower the marginal cost of pharmaceutical companies should be, but this requires a model to find a price balance value

Mao Zongfu told reporters that in the past, pharmaceutical companies (especially generic drug companies) often only focused on the sales results at the end and ignored cost control. Often, the amount sold and the cost-benefit ratio became a "confused account". But with the continuous evolution of the market pattern, the era of high gross profit is no longer here, profits are decreasing, and pharmaceutical companies will be more sensitive to cost control. In his view, centralized procurement is actually forcing pharmaceutical companies to improve their level of refined management.

Jiang Changsong told reporters that overall, centralized procurement has a profound impact on the pattern of the pharmaceutical industry. On the one hand, from only 17 regulated drugs passing the "consistency evaluation" in 2017 to a total of 2713 regulated drugs passing the evaluation in 2023, the speed of drug over evaluation has significantly increased. On the other hand, in the process of participating in centralized procurement, pharmaceutical companies continuously reduce sales costs and invest funds and manpower in innovative research and development, while also achieving transformation and upgrading.

Jiang Changsong also stated that in the case of dozens or hundreds of pharmaceutical companies competing for the same product (such as sodium chloride injection, glucose injection, etc.), centralized volume based procurement can gradually exclude some enterprises with poor cost control and poor economies of scale, and the degree of industry concentration will also be further improved.

What is the impact of the enterprise?

Industry experts say that based on the selected companies, this centralized procurement encourages their inclusion and retention. Except for some highly competitive varieties such as 30 in 9 (with 30 bids submitted and 9 planned to be selected) and 27 in 9, isosorbide dinitrate injection (for the treatment of coronary heart disease), norepinephrine bitartrate injection (for the treatment of cardiogenic shock), and fluorouracil injection (for anti-tumor treatment) all have a selection rate of 13 in 7, while the selection rate for the rest is generally above 50%.

For this reason, Gu Hai, director of the Health Policy and Management Research Center at Nanjing University, told reporters that the purpose of this centralized procurement is to retain the participation of enterprises as much as possible. From the current situation of over 8000 pharmaceutical companies in China, it can be seen that 1/4 to 1/3 of the companies will be eliminated during the centralized procurement process, and the concentration of the remaining companies will be higher. However, historically, the number of companies is not positively correlated with some administrative measures, and the eliminated companies have not completely separated from the market. They have created alternative survival paths through innovation or transformation. There will be pain points and demand, and there will be a sustained market

Data shows that since 2018, 10 batches of national organized drug procurement have successfully purchased 435 types of drugs. Through centralized procurement, a large number of classic "old drugs" that have exceeded their patent period are supplied nationwide by enterprises that have passed quality and efficacy consistency evaluations.

From 2017 when only 17 generic drugs passed the consistency evaluation, to 2023 when 2713 generic drugs passed the evaluation, pharmaceutical companies with insufficient research and production capabilities have gradually improved in the market. Lu Yun, director of the Medical Research Center of China Pharmaceutical University, said that centralized procurement is actually "transferring" a part of the market to small and medium-sized pharmaceutical companies, allowing them to participate in varieties that were previously only covered by large pharmaceutical companies.

Lu Yun said that once small and medium-sized pharmaceutical companies are given a certain market space, they can engage in fair competition in a virtuous cycle, continuously improve their capabilities, and invest profits in more research and development work, forming a positive development. "For example, high-end drugs such as doxorubicin hydrochloride liposome injection, which were previously only produced by a few companies, now have more participating companies. Not only can they obtain more quantities, but they can also save channel fees. More importantly, companies have more expectations for future profits

The implementation and supply of centralized collection of medicines are also a key focus. Two days before the opening of the tenth batch of centralized procurement, the National Healthcare Security Administration and the National Health Commission issued a notice on improving the mechanism for quantity based procurement and implementation of pharmaceuticals. In response to the problems of inaccurate reporting of quantities, insufficient usage, non-standard management of prices for non selected drugs on the internet, and insufficient incentive mechanisms in centralized procurement, 10 measures covering admission, use, monitoring, assessment, feedback and other aspects were proposed.

For the subsequent operation of the proposed winning bidder, Gu Hai suggested that firstly, the company should still closely monitor the adverse reactions and related situations of the drugs purchased in clinical use. Consistency evaluation is not a one-time evaluation, especially the feedback on the use of drugs after price reduction requires continuous tracking by enterprises, health and drug regulatory departments, etc. Secondly, enterprises still need to continue to pay attention to innovative research and development, which is also an important way to enhance competitiveness.

Thirdly, for some enterprises that fulfill contract procurement through entrusted production methods, attention should be paid to the connection with the entrusted enterprise, and good entrusted management work should be done to avoid potential risks that may arise in the future due to supply, quality, etc.