Sanofi's Plavix withdraws from the bidding for essential drugs in Shaanxi Province (2)

Source: FDC pharmasia news on July 3, 2013, Wang Peng, director of medical insurance affairs of rdpac, China Association of foreign funded enterprises (Red Sea), said in an interview with Asia Pharmaceutical News that each province can develop a set of different EDLS Bidding rules, such as price linked to sales volume, or the interval between two bids Obviously, the most important thing in Shaanxi Province is drug price Wang Peng said that local governments have their own goals When the goal is to achieve the balance between quality and price, some provinces and cities such as Shaanxi put the ultimate goal on price control, aiming to make basic drugs available to most people At the same time, the use of essential drugs in China is also on the rise Chen Zhu, a former health minister, said that basic drugs should be used in primary medical institutions, 40-50% in secondary and county-level hospitals, and 25-30% in large-scale tertiary hospitals in cities According to the annual report of drug distribution industry issued by the Ministry of Commerce on May 30, under the influence of this requirement, by the end of 2012, the basic drug system had covered all public primary medical institutions and 74.6% of village clinics In order to seize this opportunity, multinational pharmaceutical enterprises have entered the low-end market Jean Luc lowinski, President of Sanofi China, said in March that Sanofi set up a 200 person team specializing in the low-end market in the second half of 2011, and the team has been growing ever since The goal is to first focus on nine provinces with fast growth, including Shandong, Henan and Zhejiang However, withdrawing from the Shaanxi Provincial bidding may allow Sanofi to cede market share of county-level hospitals to competitors from China In fact, part of the market share of Plavix has been taken by Taijia of Shenzhen xinlitai Although still dominant, Plavix's market share in 2011 has dropped to 73.4%, while Tredegar's increased to 26.6% In fact, with the fierce price competition, even Shenzhen xinlitai is under pressure In the drug bidding of county-level hospitals launched in early 2013 in Anhui Province, Henan xinshuaike Pharmaceutical Co., Ltd., a local enterprise, defeated Shenzhen xinlitai and won the bid The bidding price of clopidogrel 75 mg 7 pack was 46.1 yuan (about 7.41 US dollars) Currently, only Sanofi, Shenzhen xinlitai and xinshuaike can sell clopidogrel in China with the approval of CFDA Analysts said that with more than a dozen manufacturers applying for the listing of clopidogrel, the market competition in this field will soon become increasingly fierce Li Bin, senior Asia analyst at Morgan Stanley, pointed out in an investor memo on June 9 that companies with multiple varieties of generic drugs in the bidding are likely to be more affected by price cuts In addition to Shaanxi Province, Jiangxi Province is also implementing a similar set of bidding rules that simply emphasize price Guangxi Province has also carried out the bidding work of new EDL Different from Shaanxi Province, Guangxi province clearly distinguishes the products of local manufacturers from the brand generic drugs from the original manufacturers For the commonly used amoxicillin clavulanic acid tablets, Guangzhou Baiyunshan Pharmaceutical Co., Ltd successfully won the bid The bid price of 457mg 6-Pack was 13.35 yuan (about $2.15), while the bid price of GlaxoSmithKline reached 652mg 7-pack 51.18 yuan (about $8.23) "For different quality products, the price should be different," the staff of Guangxi bidding Center explained to the media Wang Peng, who can still withdraw from rdpac, pointed out that despite the sharp price reduction, the bidding in Shaanxi Province is only transitional in nature, after all, it only involves new essential drugs Drug manufacturers can also patiently wait for a full bid for all essential drugs or for non EDL drugs Because manufacturers have to consider the issue of reference pricing The bid price may serve as a reference price for other provinces, and price reduction in one place is likely to lead to a series of price reduction effects As the second largest drug market in China, Beijing requires that the bidding price of the 600 varieties of EDL must be lower than that of other provinces In addition, producers face the risk of "collusion" - products that should have been sold in low-end markets appear in high-end markets "After years of dealing with provincial bidding, many foreign pharmaceutical enterprises should adapt to and make corresponding adjustments and positioning," Wang said Sanofi declined to comment on the reasons for its withdrawal from the Shaanxi bidding In contrast, Merck's best-selling antihypertensive drug, simvastatin, was included in China's first version of the base drug catalog in 2009 In order to maintain its competitiveness in the EDL bidding, Merck reduced the price of Shujiang by 52%, 21% lower than the price of SIMCO produced by Guangzhou Nanxin Pharmaceutical Co., Ltd., its main generic competitor Richard Yeh, an analyst at Citibank, said in an investor memo on January 22 that since being included in EDL, Shura's market share has increased from 59.7% in 2010 to 67.5% in 2011, 69.9% in 2012, and its sales share has also increased from 39% in 2010 to 51.8% in 2011 and 54.2% in 2012 However, Merck also admitted that the bold attempt was not smooth For example, although Shujiangzhi was included in EDL and the price was greatly reduced, the drug still failed to enter some community hospitals Analysts seeking a balance between quality and price say that the most striking bidding model for drug manufacturers is not only to emphasize price reduction, but also to include all varieties, such as the recently proposed Guangdong model According to the Guangdong model draft, all drugs are divided into five categories: patent, original research, independent pricing, high quality and good price (including differential pricing), GMP certified varieties (minimum bidding threshold) Among all kinds of drugs, only the lowest quoted varieties can become the trading varieties of Guangdong Province Although this may have little impact on multinational pharmaceutical companies, after all, most of their products will be classified as patent varieties and original research varieties, but this method has attracted strong opposition from the industry Wang Peng of rdpac said: "the quality of drugs should not be ignored in order to pursue low price Stakeholders including bidding authorities, pharmaceutical companies, hospitals and doctors must reach some consensus to achieve the balance between quality and price." Wang Peng pointed out that in addition to price, there are other factors that need to be considered, including: · requirements for the proportion of EDL use in different levels of medical institutions; · sales growth vs price erosion; · quality differences between brand generic drugs, first generic drugs and other generic drugs; · doctors' prescription habits and opinions; · local economic development level ·Manufacturer's decision on whether to participate in EDL and / or non EDL bidding.