The results of the third batch of centralized procurement of Chinese patent medicines by the Procurement Alliance for Procurement of Produced Medicines were announced recently, and the price reduction of centralized procurement exceeded market expectations.
This round of centralized procurement of Chinese patent medicines involves 20 product groups, and the purchased varieties are mainly Chinese patent medicines that are commonly used in clinical practice, with high purchase amounts and large usage, including oral Chinese patent medicines and Chinese medicine injections.

According to the results of the proposed selection announced by the Hubei Medical Security Bureau, a total of 175 products are proposed to be selected, of which 165 are directly proposed to be selected and 10 are supplementary proposed to be selected.

The Hubei Medical Security Bureau did not directly announce the average price reduction of the selected varieties, but according to the statistics of different brokerages, the average price reduction of this centralized procurement exceeded 60%, which was higher than the previous two centralized procurement reductions (42.3% and 49.4% respectively).
According to statistics, the proposed winning prices of five Chinese medicine injections are less than one yuan per tube or bottle, namely, Yanhuning for injection of Harbin Zhenbao Pharmaceutical Co., Ltd., Yanhuning for injection of Harbin Pharmaceutical Group Bioengineering Co., Ltd., Chuanhuning for injection of Chengdu Tongde Pharmaceutical Co., Ltd., Yanhuning for injection of Sichuan Hongming Bosi Pharmaceutical Co., Ltd., and Qingkailing injection of Shanxi Taihang Pharmaceutical Co., Ltd., with the proposed winning prices of 0.98 yuan, 0.85 yuan, 0.97 yuan, 0.88 yuan, and 0.99 yuan respectively. Compared with the lowest winning/listing price (yuan) of the national provincial procurement platform, the average decline of these varieties is 35%, 78.15%, 96.23%, 93.4%, and 95.9% respectively.

As an antiviral drug, Yanhuning for injection can be said to be one of the most competitive varieties in this centralized procurement. The number of bidding companies reached 32, and a total of 17 companies were finally selected. Qingkailing injection is mainly used for clearing away heat and detoxifying. There are 7 companies bidding for this product, and 5 companies were finally selected.

Xiangcai Securities released a research report that the rules for this centralized procurement of Chinese patent medicines are relatively complicated, introducing multiple prices such as benchmark price, benchmark price base, provincial inter-provincial alliance centralized volume procurement winning price, provincial procurement platform winning/listing price, average daily cost, minimum average daily cost, and declared price. Through measures such as K value correction, price correction, and price limit of 1.5 times the average daily cost of the group, a large drop has been achieved, which to a certain extent reflects the effect of centralized procurement guiding the price of Chinese patent medicines to return to a reasonable level.

According to incomplete statistics from the First Financial reporter, as of January 1, 2025, three listed companies have issued announcements on winning the third batch of centralized procurement of Chinese patent medicines, namely Yipinhong (300723.SZ), Xinlicheng (002219.SZ), and ST Tiansheng (002872.SZ). Judging from the stock price performance of these companies, the stock prices of Yipinhong and Xinlicheng have fallen continuously since December 30, 2024.

Among them, Yipinhong has two products selected, namely, Yanhuning for injection and Shengmaiyin (Dangshen Fang), with the proposed winning prices of 2.20 yuan (per bottle) and 9.60 yuan (per stick), respectively. Compared with the lowest winning/listed prices of the national provincial procurement platform, the decline is about 96% and 80%.

These two products account for a very low proportion of Yipinhong's original sales. Among them, the sales revenue of Yanhuning for injection in 2023 is 28.5309 million yuan, accounting for 1.14% of the company's total operating income in 2023; the sales revenue of Shengmaiyin (Dangshen Fang) in 2023 is 939,200 yuan, accounting for 0.04% of the company's total operating income in 2023.

Yipinhong said that this centralized procurement of drugs with volume is a centralized procurement of Chinese patent medicine procurement alliance. In terms of implementation, medical institutions are required to give priority to the selected varieties in the centralized procurement and ensure that the agreed procurement volume is completed. If the subsequent procurement agreement is signed and implemented, it will further expand the sales scale of related products, increase market share, enhance the company's brand influence, and have a certain positive impact on the company's future operating performance.

The product selected by Xinlicheng is Duyiwei Capsule. The winning price this time is 19.38 yuan per bottle, which is about 43% lower than the lowest winning bid/listing price of 34.25 yuan on the national provincial procurement platform. The company said that being selected in the national centralized procurement will enhance the market visibility and influence of Duyiwei series products, and help the company further expand its market share and consolidate its market position.

The variety that ST Tiansheng won the bid is Danshen Granules, and the proposed winning price is 8.56 yuan per bag. Compared with the lowest winning bid/listing price of 32.42 yuan on the national provincial procurement platform, the average decline is about 78%. ST Tiansheng stated that if the company subsequently signs and implements a procurement contract, it will be conducive to expanding the sales scope of related products, increasing market share and market competitiveness.

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