Opportunities and challenges for innovative drugs in volume procurement and health care negotiations

Since the release of State Council No. 44 in 2015, China's pharmaceutical research and development has been developing rapidly, with the low-cost delivery effect of volume procurement and the sharp reduction of medical insurance negotiations to the development of innovative drugs brought new challenges, but also accompanied by opportunities.
Challenge: Shorten the market expectations One, with volume procurement: patent cliff In our country, for a long time, innovative drug patent expired (original research drug) still monopolized the market, until the patent cliff opened by 4-7 to reverse this situation, through the consistent evaluation of low-cost generic drugs to achieve the replacement of high-priced original research drugs, to the first batch of 4 plus 7 procurement pilot, 4-7, for example, 4-7 Six months after implementation and six months prior to implementation, the total sales volume of 25 selected varieties in the 4-7 cities increased by 225 percent, the total sales increased by 30 percent, while the sales volume and sales of original research drugs decreased by 18 percent and 22 percent, respectively (Figure 1), patent cliff presentation, so that the traditional cycle of the original drug exclusive market significantly shortened, innovative drug sales expectations significantly reduced.
, health care negotiations: the health insurance cliff so-called "health insurance cliff", that is, when the health care negotiations are successful, the price of the cliff-off decline, rather than wait until the patent expires before the price falls.
In the past, despite slow updates to the health-care catalog, the varieties entering the health-care system generally continued to be priced higher, but since the first national health-care negotiations began in 2016, high-priced new drugs have had to negotiate significant price reductions before they can be expected to enter health-care, and so far, four times (2016-201) 9 years) national health insurance negotiations, prices have been cut, the price reduction range of 59%, 44%, 56.7% and 60.7% (Figure 2), greatly reduced the market expectations of innovative drugs, in the context of health care control fees, volume purchase price reduction, this year's health care negotiations will still be larger price reduction.
the patent cliff of mass procurement and the health insurance cliff of health insurance negotiations, which bring serious challenges to the development of innovative drugs.
opportunities: cages for birds, price-for-volume in fact, with volume procurement and health care negotiations to bring challenges to innovative drugs, but also provide new development opportunities.
In present, the main way to control health insurance fees is to change birds, in volume for price, that is, in the context of the total plate of the health insurance fund is no longer a substantial increase, through generic drug prices and the original drug replacement savings of the health insurance fund, to pay for the cost of new drugs (Teng cage for birds), at the same time, the use of varieties into health insurance sales growth expectations in exchange for the drug companies' willingness to reduce prices (i.e., volume exchange).
1, with volume procurement: Teng Cage so far, has carried out four national drug belt procurement, respectively, 4 plus 7, 4 plus 7 expansion, the second batch and the third batch, with four national health care negotiations, there have been price cuts, the average price reduction is 52%, 59%, 53% respectively and 53%, according to the agreed procurement volume estimates, the annual cost from 65.9 billion to 12 billion yuan, saving 53.9 billion yuan, according to the reimbursement ratio of 60%, can save 21.6 billion patients, while saving 32.3 billion yuan for the health insurance fund, which makes room for more new drugs into health insurance (Figure 4).
At present, the number of varieties and market areas involved in national drug belt procurement is still small, only 112 varieties of chemical drugs, not involving Chinese medicine and biological drugs, in the region is only public medical institutions, not large-scale involvement of private hospitals and retail pharmacies, in the trend of exhaustion, there will be more varieties and a wider area into the volume of procurement, will also make more room for new drugs into health insurance.
Of course, in addition to the cost of new drugs, the health insurance fund with volume purchase savings should also be used to reward medical institutions, which is also the National Health Insurance Administration, the Ministry of Finance issued the "guidance on the centralized procurement of drugs in the national organization of medical insurance funds retention guidance."
II, health care negotiations: bird exchange 1, the number of varieties entering health insurance more September 18, the National Health Insurance Administration announced that the ongoing 2020 health care negotiations, through the factory declaration review of 751 varieties, of which only 2015.1.1 to 2020.8 As many as 209 new varieties have been approved for listing between .17, and if the success rate of the 2019 (new) negotiations is measured, more than 120 new drugs will enter health insurance this year, equivalent to the total number of successful varieties negotiated in the previous four negotiations (Figure 5), which is directly related to the amount of medical insurance space available for them.
Of the 209 new drugs that passed the manufacturer's declaration review, Novardo accounted for eight, the most of any drug company, while other foreign companies such as Pfizer, Janssen and Sanofi had seven, six and five, respectively.
As far as local pharmaceutical companies are concerned, Hengrui and Zhengda have the most sunny days, each with 5, Howson has 4, Baiji Shenzhou, Goli, Koren, Renfu Medicine and Xingqi Eye Medicine each have 2.
2, the speed of access to health insurance before, the national health insurance directory short 4 years (2000-2004), long 8 years (2009-2017) only adjusted once, is not conducive to the development of innovative drugs, starting in 2016 The once-in-a-time health-care negotiations have greatly accelerated the entry of innovative drugs into health-care, such as some of the successful third batch of health-care negotiations, from the time between the launch of the product and the successful entry of health-care from the original 20 months (such as afatinie and papyrinistinist) to less than five months (e.g., arotetini and Ceredinic).
(Figure 7)3, price-for-volume successfully entered the health insurance varieties, its sales have also achieved a rapid increase, such as the fourth health care negotiations in November 2019 the only successful PD-1 representative, Thyda Pharmaceuticals' Dabershu (Syndili mono-resistance) sold $921 million in the first half of 2020, while sales in the first half of 2019 and the second half of 2019 were only $332 million and $6.6 million. Sales of 8.4 billion yuan also rose rapidly after the success of the third health care negotiations in October 2018, reaching 4.4% in the first half of 2019, the second half of 2019 and the first half of 2020. 700 million yuan, 740 million yuan and 880 million yuan, pharmaceutical companies through negotiations to bring varieties into health insurance, to achieve a price-for-volume return (for pharmaceutical companies, price-for-volume, for the official volume-for-price).
(Figure 8) With the challenges of volume procurement and health care negotiations, but also through cages for birds, volume for price, for innovative drugs to provide opportunities for expansion of health insurance.
as the volume of procurement coverage expands and health-care negotiations speed up, the number of innovative drugs entering health-care coverage will be greater, faster, and sales will rise more rapidly.
face of the normalization of volume procurement and the institutionalization of medical insurance negotiations once a year, the challenge has become unestoppable, innovative pharmaceutical companies can only take the initiative to fight and undertake the policy dividend is the best policy.
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