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Medical insurance and drug price reform: will slow down the growth of the pharmaceutical industry an

Medical Network March 15 News UBS research believes that the reform of medical insurance and drug price system is the main theme of 2016-2017, which will lead to a slowdown in the growth of the pharmaceutical industry and a long-term reduction in gross profit margin.


  Because the government intensively released the medical reform policy, 2016-2017 was called the medical administration new year. The industry concluded that the medical reform policy is mainly focused on medical insurance and pricing systems, both of which will have a profound impact on the pharmaceutical industry.


  On March 13, UBS held a special study for this purpose, and concluded that the medical insurance control fee will lead to a slowdown in the growth of the pharmaceutical industry; drug price reform will lead to a long-term decline in the industry's gross profit margin.


   However, this far-reaching impact has not yet appeared. In 2016, China's pharmaceutical industry revenue was 2.8 trillion yuan, an increase of 9.7% year-on-year; profit was 300.2 billion yuan, an increase of 13.9% year-on-year.


"The starting point of this reform is structural adjustment, not a substantial increase in investment in the past, but a part of the people benefited, a part of the people are neutral, and another part may be damaged." Zhao Bing, an analyst at the UBS Securities pharmaceutical industry, said: "Pharmaceuticals The industry will not grow at a rate of 20% to 30% every year as it was when the medical reform began, and it is now on the decline."


  Fee control has slowed the growth of the industry


  The beginning of the medical insurance control fee began in 2010. Since 2011, some areas such as Shanghai Medical Insurance have shifted from open source to throttling. In 2013, the medical insurance fund experienced a situation in which the income growth rate was slower than the expenditure growth rate, and it faced a narrowing of the balance or even "increasing income." As of 2015, the growth rate of income and expenditure of the medical insurance fund dropped to 15.55% and 14.48%, respectively. At the same time, price reductions in bidding and medical insurance control fees have become the norm in the industry.


   "Medical insurance control fees will lead to a slowdown in the revenue growth of the pharmaceutical industry." Zhao Bing explained that since 2009, the main achievements of the medical reform have been increased government spending, driving the growth of the pharmaceutical industry, and the establishment of comprehensive coverage and affordable medical expenses.


The new contradiction is that after the decline in GDP growth, the pharmaceutical industry continues to increase pressure on investment. Zhao Bing believes that "in the situation that the growth rate of medical insurance expenditures is higher than the growth rate of financing, in order to maintain the balance of income and expenditure of the medical insurance fund, the fee control will be In the long run, it has become the core of medical insurance reform. At present, the medical industry and medical insurance reform are essentially controlling the growth of medical expenses through demand-side structural adjustment."


   "2011-2015, the pharmaceutical industry revenue achieved a compound annual growth rate of 15%. But we expect that the pharmaceutical industry's revenue growth rate will slow to 10% in the next three years." Zhao Bing added.


In addition, the increase in the number of drugs in the new version of the medical insurance catalog is not as good as the imaginary dividend. On February 23, the Ministry of Human Resources and Social Security issued the "National Basic Medical Insurance, Industrial Injury Insurance and Maternity Insurance Drug Catalog (2017 Version)". Western medicines and Chinese patent medicines received a total of 2535 medicines were loaded, 339 more than the 2009 version catalogue, an increase of about 15%.


"However, under the restriction of medical insurance payment prices, most varieties will not show a surge in volume after the implementation of the 2009 version of the catalog." Liu Qian, the founder of Unicorn Studio, told the 21st Century Business Herald reporter, "The expansion of the new version of the catalog implies structural adjustment. And the means of fee control will continue to be implemented, and the larger beneficiaries of the medical insurance catalog are patients rather than pharmaceutical companies."


   Drug price reform caused long-term decline in gross profit


  On January 6, Li Bin, director of the National Health and Family Planning Commission, said at the "National Health and Family Planning Work Conference" that all drug bonuses will be eliminated in 2017. Wang Hesheng, director of the Medical Reform Office of the State Council, emphasized this policy again at a press conference on March 11.


Wang Hesheng said: "This means that China's public medical institutions will completely bid farewell to the era of "medical supplements". Before the reform, public hospitals used three subsidy channels: service charges, drug plus income and government subsidies. After the reform, we will The drug bonus has been eliminated and it has become two channels for service charges and government subsidies."


  The above reforms will directly affect the price of medicines. In addition, the bidding and reform of the medical insurance payment system will also have a huge impact on the price of medicines.


   UBS research report analysis, hospitals and medical insurance departments will be more involved in the drug price setting process; medical insurance payment price will replace the bidding price; the hospital bidding price will be adjusted more before the purchase.


   The consequence of falling drug prices is to reduce the gross profit margin of the pharmaceutical industry. Zhao Bing said, "The purpose of the drug price reform is to form a pricing system that ensures the affordability of drug prices and takes into account the enthusiasm of pharmaceutical companies. At present, drug pricing is increasingly showing a dual pricing system, that is, the price is jointly paid by bidding and medical insurance. Decide."


  According to the above report, the lower price of drugs has generally appeared in 2015 and 2016, which means that the price of tenders in recent rounds has shown a significant downward trend. The gross profit margins of the first three 5-year periods in the Chinese pharmaceutical industry were 35% (1999-2003), 31% (2004-2009) and 29% (2010-2015). The overall gross profit margin showed a downward trend, mainly due to rising labor and production costs, which were affected by the further decline in drug prices. UBS expects that the downward trend in gross profit margin will continue in the next five years.


Recently, public opinion has hotly debated that the medical insurance payment settlement price issued in Fujian and other places will have a greater impact on the original drug manufacturers, "This is not necessarily a bad thing. Many of the original drugs used in China are expired, and only the expired original drugs This kind of concern and worries will happen," Zhao Bing told reporters of the 21st Century Business Herald. "Excessively high prices take up a large proportion of medical insurance funds, usually in the fields of diabetes, hypertension and other major diseases. But in fact, domestic There are good generic drugs on the market. Why should we set higher prices for expired original drugs?"


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