A new round of price war! "4 7" Expanding the Quotation Strategy of Pharmaceutical Enterprises

On September 1, Shanghai Sunshine Pharmaceutical Network released the "Document on Centralized Procurement of Drugs in Alliance Regions". The document pointed out that on the basis of the results of centralized procurement implemented in "47" cities and provinces that have followed up and implemented, the state organized relevant regions to form alliances and carry out centralized procurement of drugs in cross-regional alliances in accordance with the law.

This purchase is "47" winning 25 varieties, with a purchase volume of 4.74 billion (pieces/bags/branches). According to incomplete statistics, under the agreed purchase volume base in the first year, according to the "47" bid-winning purchase price, the purchase amount of 25 bid-winning varieties is about 6.96 billion yuan. The variety with the largest purchase amount is dexmedetomidine, which is about 1.355 billion yuan, and the variety with the least purchase amount is lisinopril, which is about 0.002 billion yuan. The number of products exceeding 0.1 billion yuan is 19.

From the laws of economics, it can be seen that the important factor affecting the price of drugs is demand, the national collection has shown that the actual demand for 25 varieties, and is a maximum of 3 enterprises to share the market, then the price at this time by what factors? From a rational point of view, the price depends on the number of over-rated enterprises, the reason is that at this time three winning the bid, become an oligopoly market. In the oligopoly market, the drug price of each enterprise depends on the price strategy of competitors, and the final winning price is a kind of game equilibrium between enterprises.

Exclusive review, tentative maintenance of original price

According to statistics, among the 25 varieties, only one manufacturer has evaluated 11 product specifications, with the exception of pemetrexed, the others are all one, with a total purchase amount of 2.927 billion yuan.

From Table 1, it can be seen that AstraZeneca's earliest supplementary application for lisinopril was in March 2013, which exceeded the five-year period. In addition, the purchase amount of lisinopril was relatively small. Therefore, it can be concluded that for this variety, the original drug research enterprises will hardly participate in the bidding. At this time, Zhejiang Huahai's quotation strategy is to keep the price unchanged. Fosinopril's quotation strategy is to keep the price unchanged due to the lack of other overrated companies.

In addition, other varieties, the original research drug in the last 3 years have supplementary applications submitted. There are a total of 8 varieties with a purchase amount of more than 0.1 billion yuan, I .e. all varieties except levetiracetam, fosinopril and lisinopril, especially dexmedetomidine with a purchase amount of 1.355 billion yuan. Pfizer will not give up easily, pemetrexed will have a market size of 0.589 billion yuan, Lilly will not withdraw easily, etc.

The above analysis is based on two factors to consider: First, the original research pharmaceutical enterprises are already familiar with the Chinese government's firm determination to replace the original research, in the future, the price of expired original research drugs, generic drugs to replace the original research will become a normal. Second, in the face of the market being eroded, especially the varieties with large sales in the original market, the original research drugs will not sit idly by and will inevitably cut prices to fight back. Even if it is not successful, it can force competitors to lower prices and weaken them.

To sum up, the original research drug companies also have price reduction motivation. From the perspective of the US market, expired original research drugs account for about 10% of the market share. At this time, domestic generic drug companies can tentatively keep the price unchanged. If the original research drug does not follow up, it will exclusively enjoy the entire market. If the original research drug follows up, it may trigger a price war.

Two reviews carefully choose to reduce prices

The number of varieties evaluated by two companies is 3, and the agreed purchase amount is about 0.9 billion yuan. Among the two evaluated varieties, if the original research drug participates in the bidding, it can be regarded as three competitions. Therefore, the national centralized purchase agreed purchase amount is 70%, and the sales amount is about 0.63 billion yuan. Flurbiprofen axetil, gefitinib and irbesartan hydrochlorothiazide have an average sales potential of 60 million -90 million yuan each. See Table 2 for specific data.

Among the four products of amlodipine, cefuroxime axetil, atorvastatin and escitalopram, although most of the over-evaluated enterprises cannot produce bulk drugs, there are a large number of other bulk drug manufacturers in the industry, with 14, 4, 14 and 5 respectively. Thus, the cost of obtaining bulk drugs for these over-evaluated manufacturers may not be high. At the same time, in addition to atorvastatin, the sales potential of other varieties is relatively small, therefore, the price reduction of the participating enterprises will not be too large.

However, the sales potential of atorvastatin calcium is 0.144 billion yuan, and there are 3 over-rated enterprises. In addition, one of the original drug research enterprises will inevitably lose the election. Therefore, the price reduction will be larger. Beijing Jialin is a manufacturer with a large market share in addition to the original research drugs, and has already obtained a certain sales volume in the previous "4 7" market. Therefore, it must maintain its original market share and may be the first to reduce prices, thereby deterring other companies., To achieve the purpose of "subduing people without fighting.

Over-evaluated varieties can produce API enterprises = 3: after-evaluated enterprises are determined to win

According to statistics, there are 6 kinds of over-evaluated varieties that can produce API, namely risperidone, irbesartan, montmorillonite powder, rosuvastatin, olanzapine and clopidogrel. The market competition for these six products is as follows:

In the first three quarters of 2017, Johnson & Johnson accounted for 64% of the risperidone market, Qilu accounted for 9.2, and Zhejiang Huahai, the winning bidder, accounted for 4.3. Risperidone, as a key variety of Johnson & Johnson and Qilu, is very likely to participate in the bidding this time. Therefore, although risperidone has little sales potential, it will also trigger fierce competition.

In the first three quarters of 2017, Sanofi accounted for 78% of the public medical market of Irbesartan tablets, Yangtze River accounted for 3.5, and Zhejiang Huahai, the winning bidder, accounted for about 1%. However, because irbesartan antihypertensive drugs are first-line drugs, the market share outside the hospital is larger, the national collection of winning the bid is conducive to promoting out-of-hospital sales, therefore, the competition will be more intense.

According to CMH data, the total size of China's montmorillonite market in 2017 was about 3.915 billion yuan. Among them, the original research company Ipsen occupied nearly half of the market, and Simcere ranked second with a market share of 15.51. The remaining market was divided by more than 30 other companies. The winning bidder is Simcere Pharmaceutical, while other over-rated companies, such as Yangtze River, Hunan Qianjin Xiangjiang River, Warner Pharmaceutical Factory and other over-rated companies, have little difference in their original market share compared with Xiansheng. This time they will also actively participate in the bid and are determined to win.

In 2017, AstraZeneca's sales of rosuvastatin reached 2.8 billion yuan, Lunan Bert accounted for 14.01 percent by virtue of its more dosage forms, Zhejiang Jingxin's Jingnuo accounted for 7.86 percent ("4+7" won the bid), and Zhengda Tianqing's Toto accounted for 6.11 percent. Thus, the national collection is bound to be fierce competition.

In 2017, sales of olanzapine reached 2.7 billion yuan. Among them, the market share of Jiangsu Hausen is 68.4, Lilly is about 20%, and Dr. Ruidi of India is about 3%. Due to the previous missed "4+7" winning opportunity, Qilu Pharmaceutical in Guangdong Province "2019 first drug bidding transaction", once reported 5.7 yuan/tablet (10mg) of ultra-low price, 40.8 lower than Hausen "4+7" winning price. It can be seen from this that in the face of the large market of 0.46 billion yuan, the original research drug manufacturer Lilly, Dr. Ruidi of India and Qilu Pharmaceutical will not sit idly by. The future quotation is likely to be lower than the Qilu Guangdong quotation, and a new round of price war for olanzapine is imminent.

In hospital terminal sales in 2017, Sanofi, Xinlitai and Lepu clopidogrel had a market share of 60%, 30% and 10%, respectively. This time, the stone medicine Europe has also been evaluated. The situation of four choices and three choices will inevitably lead to a price war.

Over-evaluated varieties can produce API enterprises> 3: active price reduction, fierce competition

More than 3 varieties of enterprises that can produce raw materials are tenofovir disoproxil and entecavir, both of which are hepatitis B drugs. The market size of hepatitis B drugs in China has increased from 6.881 billion yuan in 2011 to 16.276 billion yuan in 2015, with a CAGR of 22.4, with a rapid growth rate. It is expected that the market size of hepatitis B drugs in China will reach 20 billion yuan by 2020. The hospital market is the main channel for the sale of hepatitis B drugs, with a market share of about 80%. In this "4+7" volume purchase, Zhengda Tianqing won the bid, and other over-rated manufacturers Jiangxi Qingfeng, Sichuan Haisco and Suzhou Dongrui will certainly actively participate in the bid in order to expand market sales.

Tenofovir ester resistance is lower than entecavir, and has entered the health insurance, the "4 7" bid price is almost equal, the future tenofovir ester can not only replace the traditional hepatitis B drugs, and even eat into the market share of entecavir. At the same time, there are more over-rated manufacturers, reaching 9. In contrast, domestic pharmaceutical companies such as Zhengda Tianqing and Qilu Pharmaceutical have certain channel advantages. Therefore, these manufacturers must also respond to the national collection with a positive attitude and will adopt an active price reduction strategy to win the bid. The market competition is becoming more and more fierce.

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