In The Future, Pharmaceutical Companies Will Fight For Raw Materials.

"It is no longer a secret battle, and it is necessary to pinch the neck. It is a direct battle." When the results of the second batch of procurement were released, a senior industry veteran pointed out to the twenty-first Century business reporter that the war between pharmaceutical companies and pharmaceutical enterprises will become more and more intense.

The quality and price of API are directly transmitted to downstream pharmaceutical companies, such as the shortage of cheap drugs that have been on the cusp, and the sharp rise in drug prices, many of which are subject to the monopoly of API. After the above results were released, the twenty-first Century economic news reporter tried to contact some of the raw material companies for interviews, but they all chose silence.

However, some "wars" still exist, and the pharmaceutical companies "fight for guns".

One month later, in August 29th and September 29th, the Nanjing intermediate people's court heard the case of three pharmaceutical companies, including the pharmaceutical company Yangzi Jiang pharmaceutical and its subsidiaries, Guangzhou Hai Rui and Hefei medical workers. The former is the plaintiff.

In November 5th, the Northeast Liaoning pharmaceutical company announced that it had received the "Liaoning provincial market supervisory authority's investigation notice on Antimonopoly cases" served by the market supervisory authority of the province.

In November 15th, in twenty-first Century, the economic report reporters contacted the heads of the Yangtze River Pharmaceutical industry, Hefei medical worker and Northeast Pharmaceutical secretaries office to understand the latest progress of the case.

In fact, in the context of quantity purchasing and medical insurance control fees, the pharmaceutical enterprises "Alexander", and the raw materials and pharmaceutical enterprises in environmental protection, rising costs and so on, the days are not good. Guo Yunpei, President of the Chinese Pharmaceutical Enterprise Management Association, said that 5 years later, there will be no less than 1/4 of pharmaceutical companies will disappear. The founder of Beijing Ding Chen medical management center, Shi Lichen, said that the raw material drug enterprises will only be left with 20%-30% in the future.

To live and live better has become the common goal of pharmaceutical enterprises and pharmaceutical enterprises. Who will be the winner and wait for the time to give the answer.

War "upgrading"

The war against API has not stopped in recent years.

During the two sessions in recent years, a number of representatives of the two pharmaceutical companies will collectively charge "raw material monopoly". Hu Jiqiang, chairman of Kang Bei Bei, told the economic news reporters during the two sessions this year that the price of many API has increased 20 times, 30 times or even 100 times compared with the previous years. For example, the price of uric acid raw material was 30~40 yuan a few years ago, and it rose to 900 yuan in the past two years. Finally, the intervention of government departments was able to be adjusted. "The price of raw materials is adjusted by the government in twenty-first Century.

In August 29th, Yangtze River Pharmaceutical and its subsidiary, Guangzhou Hai Rui, took the Hefei medical workers (Hefei medical and pharmaceutical Limited by Share Ltd), Nyt (Hefei Hefei Pharmaceutical Co., Ltd.) and Hai Chen Pharmaceutical (Nanjing Hai Chen pharmaceutical Limited by Share Ltd) to court.

In twenty-first Century, according to public information, the Yangzi Jiang pharmaceutical industry's "fury" mainly involved a large variety of loratadine, whose annual sales exceeded 1 billion yuan. At the end of 2009-2018, there was only one sales certificate of loratadine hydrochloride (APIs), which was transferred between the 3 defendants.

Yangzi pharmaceutical believes that the defendant has a 100% dominant position in the collusion of the market, and that the latter has implemented 4 kinds of acts of abusing the dominant market position. For example, Yangjiang pharmaceutical also pointed out that Hefei medical workers and enrit implemented the act of limiting transactions, called for the Yangtze River Pharmaceutical industry to sign a long-term purchase and sale contract, and the contract used a huge breach of contract to limit the Yangzi pharmaceutical industry only to purchase the raw material from the defendant, and limited the minimum annual purchase volume, the total amount of procurement, and the purchase period of up to 5 years.

The quality and price of API are directly transmitted to downstream pharmaceutical companies, such as the shortage of cheap drugs and sharp rise in drug prices, many of which are constrained by the monopoly of raw materials. - Song Wenhui photo

At the same time, Hefei medical workers, enrit and so on also sell goods at an unfair high price. The plaintiffs believe that the price of the raw material drugs is decreasing year by year, and the defendant has raised the price by 3.24 times. The price of the raw material medicine has increased from 15 thousand and 600 yuan / kg to 48 thousand yuan per kilogram in Hefei medical worker and enrit. At the end of 2018, it also mentioned 60 thousand yuan / kg. The average gross profit margin of the raw material industry is within 30%, and the defendant continues to have no reason to raise the price, which is higher than the average level of the industry.

In this regard, Yangzi pharmaceutical company asked the defendant to compensate 100 million yuan, except for the loss of investment in the 10 million yuan research and development expenses of the ceftazidime hydrochloric acid project, which was commissioned by the Hefei pharmaceutical company and the enrit project. The other 90 million yuan loss was due to the continuous increase in the price of the raw material drug supply enterprises, and the loss of profits brought to the Yangtze River Pharmaceutical Industry during the contract period.

Kai Xin Bao information shows that Hefei medical engineering was founded in December 1994, and the legal representative is wide. It is a high-tech enterprise specializing in new drug research, and it is the 100% holding company of Hefei medical worker.

In the trial, Hefei medical workers pointed out that the case is not applicable to the anti-monopoly law, but the relevant civil laws should be applied. Because the anti-monopoly law has a strong nature of state intervention, only the transaction between both sides has damaged the fair trade, damaged the order of competition, and harmed the interests of consumers and the public.

In November 15th, in twenty-first Century, the economic report reporter called Hefei medical worker to consult the case, but the other party immediately hung up the phone. When the reporter called again, the other party asked what department to find. When he learned that the reporter wanted to consult the Ministry of justice to understand the case, the other side said it was not convenient for details to hang up again.

While the Yangtze River Pharmaceutical Industry and the 3 pharmaceutical companies have not yet reached a conclusion, there are pharmaceutical companies that have brought the Northeast Pharmaceutical Company to the market supervisory authority.

In November 5th, Northeast Pharmaceutical disclosed that it received the "investigation notice of the Liaoning market supervision authority's Antimonopoly case" served by the Liaoning market supervisory authority, and the Liaoning provincial market supervision administration began to investigate the company in November 4, 2019. Northeast Pharmaceutical director of the secretaries said that this is related to pharmaceutical companies.

At the end of 2018, people claiming to be Levocarnitine Injection manufacturers published a public letter on the Internet, claiming that northeastern pharmaceutical monopolized levocarnitine raw materials and raised the price of raw materials. According to the website of the State Administration of drug administration, there are more than 40 pharmaceutical companies that have received approval from the drugs such as L-carnitine injection and oral solution. However, the company that has the approval of L-carnitine is only two Northeast Pharmaceutical and Changzhou Lan Ling Pharmaceutical Co., Ltd.

The letter of complaint wrote, "there are many communication and coordination with the raw material manufacturer (Northeast Pharmaceutical Group Limited by Share Ltd), and the other side is reluctant to supply. Because of the particularity of the drug policy, other API manufacturers can not supply the API for a short time, and the manufacturers of the pharmaceutical products can not change the suppliers of the raw materials at will.

The report also said that northeastern pharmaceutical "continuously raised the price of raw materials, resulting in the price of L-carnitine raw material increased from 700 yuan / kg to the current 8000 yuan / kg, still malicious not supplied to the pharmaceutical production enterprises, which greatly affected the normal production preparations of the production enterprises".

Live on

Pharmaceutical companies choose to fight to live and live better.

The growth of the pharmaceutical industry is slowing down due to the policy of medical insurance and control fees. At the same time, in the trend of national gathering and gathering, the price reduction of pharmaceutical enterprises is inevitable. For example, in the bid opening of the "4+7" volume expansion, the price of the 25 drugs will be reduced by 59%, and some of them will directly hit the "floor price". For example, the price of the first round purchase of amlodipine will be 0.15 yuan per purchase, but there are many bidding enterprises that offer as low as 7 cents per piece and the lowest 4 cents in the whole field.

Niu Zhengqian, executive vice president of the Chinese Pharmaceutical Enterprise Management Association, pointed out to the twenty-first Century economic news reporter that most successful companies are only small profits. Once the cost of raw materials and labor costs rise, the profits of enterprises will be directly affected. In the market competition, most of them are masters of integrated pharmaceutical preparations, including Zhengda Tian Qing, Huahai pharmaceutical, and colon pharmaceutical industries.

In quantity purchasing, the advantage of API is obvious. A person in charge of Huahai pharmaceutical company told the twenty-first Century economic news reporter that in the first round of procurement, Huahai pharmaceutical's 7 products won 6 successful tenders. Fosinopril Sodium Tablets, the only bidder, was unable to meet the procurement needs due to the capacity of the selected enterprises. This also allowed the Huahai pharmaceutical industry to occupy most of the market share of Hebei's medicine.

In fact, the battle of Yangtze River Pharmaceutical industry is also abundant. At the end of the trial, Yangzi pharmaceutical explained that they were about to have the relevant conditions for the production of API, so they were afraid to sue. In October 17th, a responsible person in charge of a raw material preparation Enterprise said that the lawsuit of the Yangtze River would win a compensation. If we win the court, the court mediation and the price of raw materials can be used as chips.

After all, the integration of raw materials and preparations is a minority, and more needs to be "struggling".

Prior to winning the bid, Amlodipine Besylate Tablets, Zhejiang's Jingxin pharmaceutical company, won the bid. After winning the bid, one of its API prices rose from 1000 yuan /kg to 1700 yuan /kg, and the production cost increased. Enterprises could only manage the cost to maintain the price of 0.148 yuan / piece when they were selected.

The NPC and CPPCC representatives of the pharmaceutical company, Xiong Weizheng, pointed out the problem of reducing the access conditions of raw material drugs, resolving the difficulty in supplying raw materials and raising prices. In response, the State Administration of drug administration replied that the drug regulatory authorities do not undertake the responsibility of investigating and controlling the monopoly of raw materials, but will fully implement the drug licensing system (MAH). The MAH system is seen as a separation of drug licensing and licensing. It helps to promote the CMO mode.

In fact, the relevant competent departments have been strengthening anti-monopoly efforts. Not long ago, the general office of the State Council issued opinions on further improving the shortage of drugs for the purpose of stabilizing prices.

At the same time, the regulatory authorities' punishment for monopolistic behavior is also increasing. In December 24, 2018, the State Administration of Market Supervision issued the decision on monopolization of administrative penalties for raw materials of glacial acetic acid. It issued the largest ticket in the history of anti-monopoly in the pharmaceutical industry for 3 enterprises in Chengdu Huayi, Sichuan Jinshan and Guangdong Taishan Xin Ning, and the total penalty was 12 million 833 thousand and 800 yuan. In January 2, 2019, the State Administration of Market Supervision issued an anti monopoly ticket, which imposed a 12 million 430 thousand yuan penalty on the monopoly of Henan nine potential pharmaceutical Limited by Share Ltd and Hunan Er Kang Pharmaceutical Management Co., Ltd.

Although there are various measures, there is still no room for "less gruel". According to the national development and Reform Commission's price supervision and inspection and the deputy director of the antimonopoly Bureau Li Qing, China's finished products have 1500 kinds of APIs. 50 of them are only approved by one enterprise and can be produced. Only 44 of the 44 API can be produced. 10% of the API can only be produced by a single digit production enterprise, and the other API can correspond to 169 pharmaceutical companies.

It is still necessary to observe how the integrated enterprise of non pharmaceutical and raw materials can survive.

In fact, the bulk drug companies are not all "sitting at the starting price" and "pots full." Shi Lichen told the economic news reporters in twenty-first Century that part of the raw material monopoly is the reason for examination and approval. Most enterprises did not raise their prices maliciously. The price increase also had their objective reasons. The raw material and drug companies also faced survival problems. In the future, only 2 to 3 enterprises could be left.

API production enterprises have always been the major polluters. The three wastes produced in the process of API production are large, the composition of waste is complex and the pollution is serious. Since the promulgation of the new environmental protection law, the relevant departments' supervision on environmental protection has been increasing. The environmental protection law of the People's Republic of China is known as the "most stringent" environmental protection law in history. Many API manufacturers are required to limit production or suspend production and rectification because of the failure of environmental protection.

Many pharmaceutical companies are also stepping up environmental upgrading and equipment transformation. Public information shows that in 2018, the total cost of environmental protection was 364 million yuan. The total investment of North China pharmaceutical company was nearly 700 million yuan, upgrading and upgrading the environmental protection facilities of the company and its subsidiaries.

This has also become one of the main reasons for the increase in the price of API. As mentioned above, northeastern pharmaceuticals were reported to respond to related problems in the investor interaction platform. According to relevant departments of the consulting company, the cost of levocarnitine is increased by environmental protection, relocation and the increase in raw material costs, especially the rise in wages, and sales prices have risen.

It is understood that some local governments environmental standards continue to change and the act of cutting across the board, making enterprises invest heavily. "The machine building is transformed according to the previous requirements. It is a large fixed investment, but according to the following standards, we have only two choices: to move or rebuild, to move away. For us, these machines are scrap iron, which means reinvestment." An insider who declined to be named introduced to the economic news reporters in twenty-first Century.

Other relevant enterprises, for example, say that the standard of the "non methane total hydrocarbon" produced by the local government to the main pollutants of enterprise exhaust emissions is 120mg/m3, then it becomes 60mg/m3, and then becomes 50mg/m3, then the enterprise's original transformation according to the equipment made by 120mg/m3 can only be pushed back.

The equipment invested by enterprises in the concentration of exhaust gas is very expensive: Hai Zheng pharmaceutical disclosed in the announcement that in order to make the quality of fermentation waste gas better, it invested 38 million yuan in 2018, and built 2 sets of fermentation waste gas molecular sieve runner concentration device, so that the emission concentration was lower than the national standard.

In the "harsh" environment, how to become a small number of surviving is also a problem that must be faced by pharmaceutical companies. According to the twenty-first Century economic report reporter on some trading platforms, some of the raw materials companies and pharmaceutical research and development enterprises were bound to help them speed up the development of pharmaceuticals. Some of the raw material companies are making preparations for extension and transformation. In fact, the industry is known as "research and development one brother".

However, it is noteworthy that Shi Lichen said that even if the raw material companies are undergoing transformation, it will take some time. The raw materials of the enterprises themselves are very weak, and how to plan the layout and how to expand the business channels are unknown.

In this war of survival, who is the winner, and also needs time to give the answer.