In 2017, U.S. generic drugs cut prices every month. Is this an opportunity or disaster for China?

Source: e-drug manager approved the largest number of generic drug listing applications in the past five years from December to 26, 2017 by the US FDA The price dispute is no longer a matter of public opinion The pressure penetrates into the performance of global generic giants, laying off 10000 people, closing factories and betting on bio generic drugs For the Chinese pharmaceutical companies eager to try, is this an opportunity to increase? Or are you going to get stabbed? The U.S market is the "promised place" for many local pharmaceutical companies at this stage, especially for local high-quality generic drugs Compared with local innovative drugs in the United States, local imitation drugs have landed in the United States in bulk and the market for generic drugs is considered more likely, and there are already signs So what will happen to the U.S generic market in 2018? Analysts warn that the pressure on price cuts will only increase The negative impact has been reflected in the performance of some companies However, the executives of big generic companies are still optimistic about generic drugs as a whole - the future of the generic industry is not bad, and they put their judgment on regulatory and market trends Credit Suisse reported that as of mid December 2017, the US FDA had approved 765 generic drugs, far more than 630 in 2016 This makes 2017 the highest number of FDA generic approvals in the past five years This figure shows that the enthusiasm of pharmaceutical companies for generic drugs remains unchanged According to evaluate's forecast, global generic sales will grow steadily from $80 billion in 2016 to $115 billion in 2020 In 2016, the world's top 15 generic pharmaceutical companies were declining every month According to the report of Credit Suisse Bank, the average decline of a generic drug product in the U.S market in November was 5.4%, 7% in October, and the cumulative average decline in two months was close to 13% In fact, the price of generic drugs in the United States has been declining throughout 2017, with the decline varying from high single digit to low double digit With regard to the decline in November, the only positive sign is that the price reduction "is gradually stabilizing, or at least not continuing to get worse" In this trend of price reduction, several players in the generic pharmaceutical industry are not spared In October, Novartis revealed that Sandoz would close a 450 employee production plant in Colorado Now, measures to streamline the scale of operations will be further expanded In the third quarter of 2017, Novartis's generic company, Sandoz, saw sales growth of only 1% The company acknowledges that this growth has been driven by growth in markets other than the US Although the price reduction pressure in the U.S market has been partially offset, Novartis is already considering selling its "simple generic drugs" in the U.S market A Novartis spokesman said: "Novartis's product base in the United States is experiencing above average price cutting pressure Some products are no longer competitive in the saturated market, so we make a decision to stop selling or split the products with limited growth space to optimize the entire product group " Endo, No 8 in global generic sales in 2016, was also deeply affected by the price cut, and the fire was directed at insurance companies and drug welfare management companies in the United States Paul Campanelli, CEO of Endo, told investors that they control tens of thousands of pharmacies and 91% of the market In February 2017, Endo's asset book was impaired by $3.5 billion as the company's generic sales are expected to decline by 30% this year Campanelli said that as long as there are multiple companies in the same product area, and one of them is willing to reduce the price, others have to make a choice - not to stay in the area, and compete with everyone to reduce the price "In our own case, the company has divided some large generic drugs into two categories:" unable to compete in price "and" unwilling to compete in price " Is there any hope? In the next five years, global generic sales are expected Dipankar Bhattacharjee, then CEO of Tyva's global generic business, once said that the number of generic drugs approved by FDA is increasing, but this is good news for the medical insurance and fee control side with tight expenses, but not necessarily for the generic companies themselves Many generic drugs approved by FDA already exist in the market, so these new entrants can only gain profits by exchanging price for quantity Although the past two years have been hard to make people optimistic about the future of us generics, there is still hope Peter Goldschmidt, chairman of Sandoz, told investors in November that biosimilars had the potential to pull the generic business out of the downward range Sandoz expects its biosimilars, zarxio, to eventually take 40% of the market The original research drug of this product is Enjin's heavy bomb EPO The basis is that the medical insurance regulators in the United States will encourage doctors and hospitals to switch to bio generic drugs based on financial pressure Tyva, the world's largest generic drug company, has been hit the hardest But Mr Tyva believes the struggle for the pharmaceutical business is coming to an end The Israeli pharmaceutical company slashed its growth forecast at the beginning of this year, but when its recent revenue report was released, Tyva told analysts that, at least in Europe, the price drop had stabilized at a low single digit level in the past few years "I don't think there will be a major change in the drug pricing system in Trump's administration," said one analyst Whether from the practical operation or the political idea, it is difficult for Congress to pass the bill of price reduction But politically, it's easier to get more generic drugs approved for sale It's a win-win situation " This will be a double-edged sword for Chinese pharmaceutical companies that want to open up markets in the United States