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The boots that were rolled out across the country with volume purchases finally landed.

A few days ago (August 31), Shanghai Sunshine Pharmaceutical Procurement Network issued a notice that, on the basis of the national organization of centralized procurement and use of drugs pilot cities and has followed up the implementation of the provinces to implement centralized procurement results, the relevant regions of the State organization formed alliances to carry out cross-regional alliance drug centralized drug procurement in accordance with the law.

In addition to the previous 4 plus 7 cities, the alliance includes Shanxi, Inner Mongolia, Liaoning, Jilin, Heilongjiang, Jiangsu, Zhejiang, Anhui, Jiangxi, Shandong, Henan, Hubei, Hunan, Guangdong, Guangxi, Hainan, Sichuan, Guizhou, Yunnan, Tibet, Shaanxi, Gansu, Qinghai, Ningxia, Xinjiang.

According to statistics of the Health Bureau, the provinces and cities of this volume procurement has been extended to 25 provinces, plus 4 plus 7 pilot cities and the initiative to follow up fujian and Hebei, 31 provinces and cities across the country's volume procurement has been officially opened. Predictably, the intensity of competition for the price of the regional alliance with volume purchases will be unprecedented in history.

The industry generally believes that, after the national roll-out of volume procurement, the birth of the national drug market new low or ultra-low prices has been a high probability event, the pharmaceutical market is facing a remodeling.

Three enterprises shortlisted, non-winning enterprises face life and death Although the volume procurement has been spread throughout the country, but the procurement of varieties is still the previous 25 varieties.

The Health Bureau noted that the number of selected enterprises allowed to increase to three in accordance with the principle of minimum quotations, a significant change that directly affected the corresponding procurement cycle and agreed procurement volume of each variety.

At the same time, the document provides that the following year agreed procurement volume according to the procurement variety (designated specifications) the first year of the actual purchase volume of a certain proportion to determine: the following year agreed to purchase volume in principle not less than the first year of the selected varieties agreed procurement volume. "When the three enterprises are shortlisted, you can get 70% of the national procurement volume, if the remaining 30% of the market, pharmaceutical companies also have through the consistency of evaluation of many industry thresholds, which for small and medium-sized enterprises, or will directly choose to give up."

Some analysts pointed out that the introduction of this policy, will directly lead to the life and death of non-finalists.

It is worth noting that this band procurement in the rules than the previous round more perfect, the establishment of a "violation list", declaring enterprises, selected enterprises and distribution enterprises if there is to provide kickbacks, commercial bribery, malicious competition below the cost price, provide false documents, non-fulfilment of supply commitments, drug quality problems, etc. , will be included in the list.

In the light of inclusion in the list, the declaration is disqualified, the qualification of the election, the heavy will be prohibited for two years to participate in the Federal Region drug procurement. There is no doubt that after the introduction of the 4 plus 7 city band procurement, many people in the industry believe that the matter has little impact on the pharmaceutical industry, because the drug market involved is small.

However, the national version of the centralized procurement program of drugs officially announced, or will accelerate the scope of reduced prices of drugs.

Domestic drug replacement, a large number of drug generation facing job-hopping

"4 plus 7" with volume procurement to the whole country, which means that the day of domestic medicine replacement is coming. Earlier, the National Health And Health Council's Department of Institutional Reform Ombudsman Lai Shiqing publicly said that the national implementation of the consistency evaluation of generic drugs is to replace the original drug. "Generic substitution is both an international rule and a regulatory requirement, as well as a requirement of State Office (2018) No. 20.

"

In Lai's view, through the quality and efficacy (with the original research drug) consistency evaluation of generic drugs, is China's health insurance to implement strategic purchase of an important "chip."

It seems that multinational drug companies have also sniffed at policy changes early and are divesting their generic sands.

In July, Pfizer, the world's largest pharmaceutical company, announced that it would merge its patent-expired brand and generics business unit, Pro-Chip, with Myelan, the world's largest generic drugmaker, to form a new multinational pharmaceutical company. Pfizer in the first batch of "4 plus 7" band purchases, two heavyweight products Lipto (atovastatintablets) and Revici (benzoic acid chlorpyrifos) were sold, resulting in the loss of a number of markets, which also impacted the company's own performance.

Pfizer's sales in China fell 20 percent in the second quarter.

Zhengda Tianqing hepatitis B drug "Runzhu" to a big drop of 90% to become the exclusive supplier of public hospitals in 11 pilot cities, and GSK its direct competitor Hepdin (Lamifding) together with the Suzhou plant 100% stake sold to Fosun Pharma for 250 million yuan. With the trend of replacing imported products with national products, the advantage of high premium of the original research products that have lost their patents is no longer available.

More crucially, when these heavyweightvarieties lose their market, a large number of pharmaceutical representatives will face job-hopping. As we all know, the selected drugs are not necessary to do clinical, not selected also want to reduce the price of the market share outside the purchase of the amount.

All in all, drugs with 25 generic names, whether selected or not, will be reduced in price to the market. Some analysts pointed out that with the volume of procurement spread throughout the country, the relevant drugs have no room, and do not need to hire as many pharmaceutical representatives as usual, many representatives can do is to change products or be eliminated.