Anti-corruption, medical reform, "snack", sales in China, cross-border cross-border drug companies

Anti-corruption, medical reform, "snack", sales in China, cross-border cross-border drug companies

Foreign pharmaceutical companies in China have reached the crossroads of development.

Since the outbreak of the commercial bribery of GlaxoSmithKline (GSK) in the UK in 2013, the Chinese government has gradually increased its efforts to combat commercial bribery and strengthened supervision over drug price cuts. In the past two years, the development of foreign-funded pharmaceutical companies in China has been seriously frustrated. Various multinational pharmaceutical companies are busy dealing with stricter compliance review and price reduction pressures, and profits have been greatly affected.

According to an industry report released by Asia Pharmaceutical News on June 2, sales of 10 major multinational pharmaceutical companies increased by an average of 11% in the first quarter of 2015, which was 1% lower than the average growth rate for the whole year of 2014. Among them, the sales of Eli Lilly and Company in China increased by only 6%, which was a significant drop from 21% in the same period of 2014, while sales of GSK fell by 3%.

At present, many multinational pharmaceutical companies in China are faced with the trend of provincial-level drug price reduction, the original pricing of the original drug will be canceled, and the capacity of the first-tier cities in the domestic pharmaceutical market will become more saturated. The previous marketing model also needs timely. Adjustment.

Price reduction or abandonment, layoffs or coaching changes, business slimming or restructuring, foreign pharmaceutical companies in China are standing at the crossroads of development.

Price reduction or abandonment?

In terms of the pattern of the Chinese pharmaceutical market, 80% of drug sales come from medical institutions. In 2013, the scale of China's pharmaceutical market was about 1.15 trillion yuan, the sales volume of drugs in the hospital market was about 942.3 billion yuan, and the market size of retail pharmacies was about 204 billion yuan. Among them, the drugs of foreign pharmaceutical companies account for about 70% of the market share of medical institutions in the top three and above.

According to the current centralized drug bidding method in China, all the drugs used in public hospitals are purchased by the local provincial centralized drug purchasing and management departments to form a drug catalogue and bidding price. The hospital chooses from the list of drugs approved by the provincial government, and can increase the price by 15% to the patient based on the price of the drug bidding, but it cannot exceed the maximum retail price of the drug prescribed by the National Development and Reform Commission.

In 2015, there was a big move in the medical reform, and the elimination of “medication with medicine” accelerated. On May 8th, the General Office of the State Council issued the “Implementation Opinions on Comprehensively Opening the Comprehensive Reform of County-Level Public Hospitals”, demanding comprehensive promotion of comprehensive reform of county-level public hospitals, and issuing a guide on the comprehensive reform of urban public hospitals one week later. opinion".

Both of the above documents propose to abolish the hospital's 15% drug add-on to balance medical service prices with government subsidies. This means that the hospital will sell the drug to the patient at the bid price.

In fact, since the end of 2014, many local governments have introduced new tendering systems to reduce the cost of drug purchases and to promote multinational pharmaceutical companies to compete more directly with cheap generic drugs.

In 2014, the local health departments generally carried out price reductions on drugs within the scope of the tender. After the general price drop, most pharmaceutical companies analyzed that the drug price could be stable for a period of time. However, the tender price of medicines in 2015 fell again.

On January 28th, the procurement results of centralized drug bidding in Hunan Province were announced, and the overall purchase price dropped significantly. After the two rounds of quotation, the lowest drop of the 11935 bargaining varieties was around 10%, and the highest drop was as low as 50%.

One of the characteristics of Hunan drug bidding is that the price of medicines of foreign pharmaceutical companies has fallen sharply. Even in the few specifications of the transaction, the rate of abandonment is still high. After bargaining, only 9 of Bayer's 36 specifications were sold, with a maximum decline of 11% and a rejection rate of 75%. Taking the clinical anti-tumor monoclonal antibody as an example, almost all of the monoclonal antibody products of foreign companies gave up bargaining, and only one of Yangsen (American Johnson & Johnson in China) was sold.

Following the large-scale abandonment of foreign-funded pharmaceutical companies in Hunan, Zhejiang Province launched a new drug-hanging price confirmation model in March 2015, allowing pharmaceutical companies to confirm the possible decline in drug prices, and then start the national minimum of related products. The collection of prices.

Zhejiang's drug bidding also showed a phenomenon of large-scale abandonment of foreign-funded pharmaceutical companies, and the overall average rate of abandonment reached 60.5%. A Pfizer company who participated in the bidding revealed to the Times Weekly reporter that the procurement of pharmaceutical companies participating in Zhejiang bidding was required to be the lowest price in the country. "(Pharmaceutical enterprises) could not supply, only to abandon the standard."

In this bidding, Pfizer's bidding quantity is 18, the number of bidding is 4, and the rate of discarding is 77.8%. Another example is the American Lilly Company. Among the 12 product specifications, only one transaction was ended, and the rate of rejection was 92.3%.

"If drug bidding is carried out in this way across the country, the problems faced by foreign-invested pharmaceutical companies will be more severe. It is a very difficult choice to cut prices and keep in the market, or to lose money in the market." The aforementioned Pfizers participating in Zhejiang bidding Said, "If you adopt a method similar to Hunan and Zhejiang, the market structure will be changed. From the inside, foreign pharmaceutical companies are not willing to lose the market."

The original research drug halo fades

For foreign pharmaceutical companies, the uncomfortable is far more than that.

On May 5, the National Development and Reform Commission and the State Health Planning Commission, the Ministry of Human Resources and Social Welfare and other departments issued the "Notice on Printing and Advancing the Opinions on Drug Price Reform", and decided to start from June 1st, "except for narcotic drugs and the first class of psychotropic drugs." Can abolish the pricing of pharmaceutical governments, improve the drug procurement mechanism, and play the role of medical insurance control fees. The actual transaction price of drugs is mainly formed by market competition."

This means that the 166 drug price control documents issued by the National Development and Reform Commission in the past 20 years are all invalidated, and the related pricing of the original research drugs will be officially cancelled and changed to the market pricing mechanism. This will cause the profits of foreign-invested pharmaceutical companies that have always focused on the original research drugs to experience a huge decline. For foreign pharmaceutical companies, this may be a more deadly blow.

In China, drugs are divided into patented drugs (drugs within the patent protection period), original research drugs (imported drugs that have passed the patent protection period), and generic drugs (drugs of domestic pharmaceutical companies that copy generic drug companies). Among them, the price of patented drugs is expensive, and the world is almost a uniform price. However, after the patent period, the listing of generic drugs has greatly reduced the price of patented drugs. In addition to patented drugs, China has been pricing the original drug for more than a decade. The price gap between the original drug and the generic drug is huge, and some even reach several times. Due to the existence of the original drug concept, such drugs enjoy high prices and high profits.

All along, domestic generic drug companies hope that the relevant government departments will treat them fairly, and multinational pharmaceutical companies have always resisted and insisted on high quality and good prices.

Affected by the drug reform, in 2015, Anhui Province imposed strict regulations on the proportion of patented drugs and original research drugs in drug bidding, requiring county-level hospitals, township health centers, village or community health centers, for such drugs. The proportions used are not more than 40%, 30%, and 20%, respectively, and are included in the integrated management statistics.

A person from the top three hospitals in Zhejiang Province who did not want to be named told the Times Weekly that the hospital has suspended or limited the use of more than ten original research drugs since 2015. The companies involved cover almost AstraZeneca, UK. Swiss Roche, American Pfizer, American Lilly and other foreign-funded pharmaceutical companies selling in China.

At present, it is uncomfortable for multinational pharmaceutical companies to: the research field of good research, the research of new drugs has been extensive; and in the more complex fields such as cancer, the research and development of new drugs is slow and costly, and it cannot be used in the short term. Enterprises bring core competitiveness. In addition, multinational pharmaceutical companies are also facing the reality of the expiration of patented drugs. According to statistics, the number of patented drugs expired by foreign-invested pharmaceutical companies in 2015 reached US$44 billion.

Since the newly developed drugs of foreign-invested pharmaceutical companies are still unable to mention the listing agenda, the generic drugs of domestic pharmaceutical companies have gained a living space. According to a survey report by China Merchants Securities, with the expiration of a large number of foreign patented drugs, it is expected that the scale of domestic pharmaceutical companies' generic drugs may approach 500 billion yuan this year.

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