Development Inflection Point Shows Industry Structure Adjustment Should Attack

The business club reported on November 29th that it had a low cost advantage and the Chinese pharmaceutical industry had gone through a path to a major pharmaceutical country in the past 30 years. However, after the introduction of the “Guidelines on Accelerating the Structural Adjustment of the Pharmaceutical Industry” (hereinafter referred to as the “Opinions”) on November 9, this change in the mode of industrial development is imperative.

The Opinions were jointly formulated by the Ministry of Industry and Information Technology, the Ministry of Health, and the three ministries and commissions of the State Food and Drug Administration (SFDA), and proposed five structural adjustments: product structure, technical structure, organizational structure, regional structure, and export structure. Tasks and objectives: We have formulated 11 safeguard measures, including encouraging technological innovation, improving centralized procurement and clinical use policies, and leveraging drug price adjustments.

Judging from the "Opinions," the three key words in the restructuring of the pharmaceutical industry are "innovation," "integration," and "transformation." Lin Jianning, director of the SFDA Southern Medicine Economic Research Institute, believes that one of the core features of the country's “Twelfth Five-Year Plan” is to adjust the industrial structure, promote independent innovation and scientific and technological advancement, and the three ministries and commissions issued guidelines for the structural adjustment of the pharmaceutical industry in line with the national industrial upgrading policy background. .

“After 30 years of rapid reform and opening up, the variety, quantity, and quality of medicines produced in China have basically met the needs of domestic medical and epidemic prevention. We have completely bid farewell to the era of lack of medical care and built a relatively complete medical industry system, but we There is still a big gap between the world's pharmaceutical giants, especially the over-reliance on quantitative growth in the development of the pharmaceutical economy, lack of development intensions, weak international competitiveness, and other structural contradictions.Therefore, the three ministries have proposed to adjust the industrial structure. To promote the change in the way medicine is developed, I think it is the right time," said Lin Jianning.

Independent Innovation Vision

"Adhering to independent innovation, technological transformation, and elimination of backwardness" is one of the main principles of the "Opinions." Therefore, the "Opinions" put forward the vision of product structure adjustment for the fields of chemical drugs, biopharmaceuticals, and traditional Chinese medicine respectively, including striving for more than 10 new intellectual property rights in the field of chemical drugs, and competing for more than 15 new drugs in the field of biopharmaceuticals. Market, etc.

In fact, the goal of independent innovation has been responded to by pharmaceutical companies. The person in charge of Fosun Pharma said in an interview with a reporter from the “Medicine Economics” that the company has combined the acceleration of independent innovation with M&A innovation as an important part of its strategic deployment. Currently, it has accelerated the research of monoclonal antibody drugs. Biopharmaceutical development process.

At the same time, the "Opinions" emphasized that the development of new drugs with China's independent intellectual property rights will be supported in the establishment of scientific research projects, funding grants, new drug approvals, access to medical insurance catalogs, and technological transformation investment, and leverage adjustments for drug prices and so on. For these encouraging innovations, drug companies paid a lot of attention.

“The introduction of new drugs in the real sense of the market in China is too long-term, which makes companies feel pressure. It is not easy for companies to make new drugs. The state should have some special tilting policies, such as medical insurance and pricing.” Teng Hui, senior engineer of Pharmaceutical Co., Ltd., told reporters.

In Lin Jianning's view, there are three areas in which the advancement of new drug development is worthwhile to break through: biopharmaceuticals, high-end generic drugs, and innovative Chinese medicines with high-tech standards.

Take high-end generic drugs as an example. By 2012, there will be 139 billion US dollars in drug patent protection, and China has accumulated rich experience in the field of generic drugs. Lin Jianning therefore suggested that the government should give more encouragement measures to guide the powerful companies to consciously increase the technological content of imitating innovation and push the branded generic drugs made in China to the international level.

From an objective point of view, the current level of China's pharmaceutical productivity in the short term is difficult to have a clear breakthrough in the original drug innovation. Therefore, Lin Jianning also suggested that there should be a distinction in policy orientation: care should be taken to protect marine drug resources and botanical drug resources; and for the purpose of creating higher-quality drugs for imitation and innovation, efforts should be made to improve the level of international scientific and technological exchanges and cooperation. And in depth; for innovative drugs, it is necessary to make flexible use of the means of examination and approval to promote the rapid, accurate, timely completion of review, evaluation, and approval of innovative drugs and accelerate the process of listing new drugs.

Expanding the share of major pharmaceutical companies

In adjusting the product structure, the Opinions first proposed the requirements of “further regulating the order of production and circulation of essential drugs, promoting the merger and reorganization of basic drug manufacturers, and promoting the convergence of basic drug production to competitive enterprises” and “the sales of major drugs. The top 20 companies should have a market share of 80% or more.

This is actually a clause most concerned by most pharmaceutical companies. However, the vagueness of this clause can not help but also cause confusion: The top 20 basic pharmaceutical manufacturers with sales total 80% market share, or the top 20 manufacturers of a basic pharmaceutical product sales Total market share to reach 80%?

Wang Gaojun, sales director of North China Pharmaceutical Group, expressed his excitement on this goal, but he also told reporters that according to the current situation, the merger and restructuring alone cannot achieve the 80% goal, and it is really necessary to improve the basic drug market. Concentration, it is necessary to change the low-cost orientation of local governments in basic drug bidding.

"Strict supervision is an important measure to increase the concentration, including the implementation of the new version of the Pharmacopoeia, strictly in accordance with the pharmacopoeia standards of major drug varieties to conduct spot checks, using strict quality standards to distinguish, and ultimately achieve the survival of the fittest." Lin Jianning also stressed.

Strong push mergers and restructuring tide

Mergers and reorganizations are the quickest way to adjust the industrial structure and increase the degree of concentration. In terms of adjusting the organizational structure, the "opinions" indicated that competitive enterprises will be encouraged to implement cross-regional, cross-ownership mergers, acquisitions, mergers and reorganizations, and to promote the concentration of resources such as varieties, technologies, and channels to leading enterprises.

It is worth noting that, as of the end of 2009, China had a total of 4,696 manufacturers of APIs and preparations, but companies with a sales scale of 50 million yuan or less accounted for 80.09% of the quantity, and companies with a sales volume of 1 billion yuan accounted for only 1.52%. . According to the concentration of 43.86% in the world's top ten pharmaceutical companies, the concentration of top ten pharmaceutical companies in China is only 17.62%, and the concentration of top 100 pharmaceutical companies in 2009 was 41.68%.

Therefore, for the improvement of industrial concentration within 3 to 5 years, the Opinions set that “the top 100 pharmaceutical companies account for more than 50% of the total industry’s sales revenue, forming a group of international competitiveness and development of the industry. The goal of a large enterprise group with a strong driving role.

It is not difficult to judge that, under such policy orientation, local governments may take the lead in opening up the reorganization of pharmaceutical state-owned enterprises. This trend has already begun to emerge from the signs of the reorganization of state-owned pharmaceuticals in Shanghai last year. Recently, it was reported that after the reorganization of North China Pharmaceutical, Suizhong Energy was preparing to restructure the CSPC Group. “In the next three to five years, Huayin and ShiPai will most likely be integrated into one, and after the merger and reorganization of the two large state-owned enterprises, the pharmaceutical industry in the province will be integrated by way of acquisition. This is an inevitable trend. "A person in Hebei Province believes.

Lin Jianning analyzed that domestic mergers and reorganizations will come from five major forces in the next few years: First, multinational pharmaceutical companies will achieve rapid expansion in China through mergers and acquisitions; second, international funds, domestic private equity funds and off-site funds, promising about 10% of the pharmaceutical industry as a whole. Third, 20 pharmaceutical companies are listed in the country this year, and 5 are listed overseas. The IPO provides strong support for the integration and acquisition of these companies. Fourth, some factors of the pharmaceutical industry itself, such as the new GMP transformation will encounter Insufficient funds, companies will try to introduce foreign capital to make up, which will also accelerate the merger and reorganization of the industry; Fifth, large-scale state-owned enterprises are also undergoing great fanfare integration.

“In fact, in recent years, international pharmaceutical giants have begun to merge and acquire local biopharmaceutical companies with innovative potential or products with higher market share. The state should encourage large domestic pharmaceutical companies or large investment groups to integrate our own policies. Biotechnology resources allow some outstanding national enterprises to stand out and participate in the international competition."