The National Joint Procurement Office of Proprietary Chinese Medicines recently issued the Notice on Holding the Communication Meeting of Procurement Enterprises of the Alliance of Proprietary Chinese Medicines, which will soon open the centralized procurement of proprietary Chinese medicines nationwide, including a total of 42 proprietary Chinese medicines. The national centralized procurement of proprietary Chinese medicines will stir up the 3000 billion yuan market of proprietary Chinese medicines, and the decline rate has once again become the focus of centralized procurement, from the previous local alliance centralized procurement of proprietary Chinese medicines, the overall centralized procurement of proprietary Chinese medicines is relatively mild, but there are still single products with a large decline.
"National Procurement" in the Field of Proprietary Chinese Medicine
110 companies appeared on the list. According to the notice, pharmaceutical institutions in the alliance region who fill in the procurement needs of the proprietary Chinese medicine alliance can send one representative to participate in the meeting, including listed companies such as Guizhou Yibai Pharmaceutical Co., Ltd., Guangdong Zhongsheng Pharmaceutical Co., Ltd., Yabao Pharmaceutical Group Co., Ltd., Shenwei Pharmaceutical Group Co., Ltd., Sichuan Kelun Pharmaceutical Co., Ltd., as well as subsidiaries of well-known pharmaceutical companies such as Sunflower Pharmaceutical, Harbin Pharmaceutical Group, Jilin Aodong, Sinopharm Group, and Tianjin Tongrentang Group.
The collection and procurement of the National Alliance of Proprietary Chinese Medicines can be traced back to September 2022, when the "Procurement Announcement of the National Alliance of Proprietary Chinese Medicines (No. 9 of 2022)" showed that the centralized procurement was led by Hubei, including 1 provinces and municipalities including Hubei Province, Beijing Municipality, Tianjin Municipality, Hebei Province, Shanxi Province, Inner Mongolia Autonomous Region, Liaoning Province, Jilin Province, Heilongjiang Province, Shanghai Municipality and the Xinjiang Production and Construction Corps.
In recent years, the centralized procurement of drugs has been continuously expanded and accelerated, covering not only the initial chemical drugs, but also the centralized procurement of proprietary Chinese medicines in some provinces and cities. Although it does not fully cover the whole country, the scope has been greatly increased compared with the previous centralized procurement of proprietary Chinese medicines, and the above-mentioned alliance provinces and municipalities have also appointed representatives to form a national joint procurement office for proprietary Chinese medicines, so the industry generally believes that this collective procurement is the "national procurement" in the field of proprietary Chinese medicines.
The decline has once again become the focus of centralized procurement, and from the previous local alliance centralized procurement of proprietary Chinese medicines, the overall centralized procurement of proprietary Chinese medicines is relatively mild, but there are still single products with large declines. For example, the alliance of 19 provinces and regions in Hubei has 111 selected products, with an average decrease of 42.27% and a maximum decrease of 82.63%; The collection and procurement of 6 large varieties in the alliance of 53 provinces and regions in Guangdong involved an average decrease of 32.5% and the highest decrease of 90.9%.
Capital Securities Research Report pointed out that due to the fact that the production cost of proprietary Chinese medicines is generally higher than that of chemical drugs, and the price of Chinese medicinal materials continues to rise, the cost pressure is greater. In addition, there is no consistency evaluation of proprietary Chinese medicines, and the process of "national procurement" of proprietary Chinese medicines is slow. Direct comparison between the products of various enterprises, especially the exclusive varieties, is not possible, so the decline in the centralized procurement of proprietary Chinese medicines is small.
Star pieces are in the spotlight
According to the procurement catalog, this round of collective procurement is divided into 16 procurement groups and includes 42 kinds of drugs, including compound cantharid, compound thrombosis, coronary heart ning, hua toadin, elderberry seven, le pulse, vascular rehabilitation, cerebral an, garcinia and bone, Xiang Dan, Xinkeshu, Xingnu Jing, crow bile oil, ginkgo damole, ginkgo biloba leaf extract, and Zhenyuan.
From the perspective of individual drug types, compound thrombosis includes drop pills, capsules, granules, etc., and Zhongsheng Pharmaceutical is the original creator of this variety of products. In the first half of 2022, Zhongsheng Pharmaceutical's products Compound Danshen Tablets, Compound Thrombotong Capsules, Compound Thrombotong Soft Capsules, and Cerebral Embolic Capsules were selected in the centralized procurement projects of proprietary Chinese medicines such as Guangdong Alliance Qingkailing. According to the third quarter report of Zhongsheng Pharmaceutical in 2022, the company's main revenue was 19.91 billion yuan, a year-on-year increase of 9.19%; The net profit attributable to the parent was 2 million yuan, down 49.20% from the same period last year.
At the same time, these drugs involve a number of exclusive varieties, including China Resources Sanjiu's Huatou tablets, Wohua Pharmaceutical's Xinkeshu tablets, Jiaying Pharmaceutical's elderberry seven-percent capsule tablets, etc., and its central keshu tablets and elderberry seven-percent capsule tablets are the pillar products of the two companies.
Huatoad tablets are the core variety of CR Sanjiu. In October last year, China Resources Sanjiu said in an investor survey that at present, the large varieties of traditional Chinese medicine of Sanjiu's prescription drugs have basically been included in the centralized procurement of two inter-provincial alliances, and Guangdong mainly targets exclusive varieties, and the decline rate is relatively reasonable. Hua Toad tablets currently account for a small proportion of the company's business scale. After more provinces begin to implement centralized procurement, the impact on revenue will gradually be reflected, but overall it is expected.
For a long time, Cardio Tablets has been the core pillar product of Wohua Pharmaceutical. On March 3, Wohua released its 23 annual performance report. From the perspective of revenue and profit, the company achieved an operating income of 2022.10 billion yuan this year, a year-on-year increase of 15.7%; The net profit was 65 million yuan, down 1.07% from the same period last year.
According to its financial report, in terms of Chinese medicinal materials, the prices of the main raw materials of many of the company's products have risen sharply, according to the average purchase price in 2022 compared with the average purchase price in 2021, hawthorn increased by 41.4%, danshen increased by 27.2%, cooked ground yellow rose by 170.3%, salt psoralen increased by 52.8%, calamus rose by 30.4%, and leech rose by 11.1%.
Especially in December 2022, the market demand for antiviral and cold drugs has swelled sharply, and it will remain strong in the foreseeable future. It is expected that the price of related raw materials will still increase considerably in 12 and continue to operate at a high level.
Mr. Chen, who does wholesale business in the Bozhou Chinese herbal medicine market in Anhui Province, told the Beijing Business Daily reporter that the Chinese herbal medicine business is becoming more and more difficult to do. In the past three years, the market price of Chinese medicinal materials has risen and risen, such as the price of keel, which has risen nearly 10 times in three years, and has now reached nearly 300 yuan per kilogram, and Su Ye has risen from more than ten yuan per kilogram in two years to <> yuan per kilogram now. Mr. Chen said that with the centralized procurement of proprietary Chinese medicines, there will also be new opportunities in the Chinese medicine industry, which may drive the overall price of Chinese medicines to become balanced.
Data show that as of March 3, of the 22 listed Chinese medicine companies that have announced performance forecasts, 37 have reduced or lost money. Many listed companies bluntly stated in the performance forecast that the reason for the decline in performance was affected by factors such as the reform of medical insurance payment and the centralized procurement policy of proprietary Chinese medicines during the reporting period, in order to avoid large fluctuations in sales scale and ensure stable growth of operating income, the company increased market input, resulting in an increase in sales expenses.
Beijing Business Daily reporter Tao Feng Li Xiang