(Health Times reporter Tan Qixin)
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Li Ping (pseudonym), the main person in charge of an antibiotic and cardiovascular API production enterprise in Guangdong, told the Health Times reporter that on the one hand, due to the impact of environmental impact assessment and the rise in the price of raw materials for upstream basic production, the production cost of APIs has risen again and again; on the other hand, the downstream preparation pharmaceutical companies that stand out at "low prices" on the collection negotiation table have continuously transmitted the pressure of price reduction to the raw material end, and finally the profit margin of "double squeeze" has overwhelmed the API enterprises.
As of December 14, according to the statistics of the announcements released by drug procurement websites across the country in the past two years, the reporter found that Hainan, Heilongjiang, Henan, Guangxi, Yunnan and other places have issued and accepted drug withdrawal applications involving a total of more than 1,000 drugs, including many cephalosporin antibiotics, roxithromycin, Pingyangmycin and other commonly used drugs.
One of the root causes behind the tight supply of medicines is the shortage of RAW Materials. On December 14, a number of heads of small and medium-sized API manufacturers described the current survival situation of the API industry as a Health Times reporter: "It's like a dumbbell, the two ends squeeze us in the middle of the thin roll", "Survive in the cracks!" ”
API production workshop, picture from Xinhua News Agency.
THE COST OF APIS HAS RISEN across the board
On December 6, 2018, the day when the results of the "4+7" drug collection pilot were announced, 25 of the 33 varieties participated in the negotiation were selected, with an average price reduction of 52% and a maximum price reduction of 96%.
"I am most impressed by amoxicillin capsules, this variety eventually 6 pharmaceutical companies won the bid, 0.25g specifications of the lowest quotation is only about 0.06 yuan, but because the first year of the agreed purchase of up to more than 2 billion pills, and this year is the cheapest time for raw materials and intermediates, amoxicillin API costs only about 150 yuan / kg, so in combination, upstream and downstream enterprises are still small profits, can also do." Li Ping (pseudonym), the main person in charge of an antibiotic and cardiovascular API production enterprise in Guangdong, told reporters.
But what Li Ping did not expect was that in 2020, after the sudden increase in the amount of RAW Materials added by pharmaceutical companies, it was followed by a comprehensive increase in the price of upstream raw materials. Li Ping revealed to reporters that the price of 6-APA (intermediate necessary for the synthesis of semi-synthetic penicillin APIs) first rose to 150 yuan / kg, and then continued to rise to about 200 yuan / kg, and the price of liquid alkali (for sewage treatment in the production process of APIs) soared all the way, from 1000 yuan / kg to 7000 yuan / kg.
"The cost rises little by little, and then the upstream even every month to dynamically adjust the price, an intermediate at the same time to participate in the synthesis of a variety of APIs, the former a price increase, the cost of a variety of APIs will rise, in these two years, there is no cost of an API that does not rise, such as the most common amoxicillin (API) cost has been from 150 yuan / kg to now more than 200 yuan / kg." Li Ping said.
After entering 2021, the situation has not begun to clarify. Huajin Securities shows that the price increase trend of antibiotic raw materials is obvious, among which cephalosporin and penicillin intermediate penicillin industrial salt, 6-APA, 7-ACA, Penemant intermediates, 4-AA have increased significantly compared with the average price at the beginning of the year and 2020, reaching the highest value in the past two years; the price of heparin (raw materials for antithrombosis and anticoagulant drugs) has obviously continued the upward trend, with a price increase of nearly 200%.
The pressure of the rising cost of the API can not be transmitted downwards, because the contract for the centralized procurement of the downstream winning enterprise has long been signed, "such as amoxicillin capsules, a signature is 3 years, 0.06 yuan / capsule can not be higher, when signing the contract, the selected preparation companies considered that the small profits and high sales, did not think that the upstream will rise so badly, if we want to increase the price upstream, they can not bear, the drug may be tight supply or even out of supply, this is the result we least want to see." Li Ping was quite helpless.
Strict supervision brings higher requirements
In late November, the news of an explosion in an industrial park in Zhejiang that popped up on his mobile phone once again made Li Pingxin, who was far away in Guangdong, mention his throat eyes, until he made a round of phone calls to confirm that the impact of the accident was controllable and would not have a significant impact on the supply and price of chemical intermediates in the region.
"In 2019, the accident in Jiangxi Xiangshui Industrial Park led to the closure of factories in that area for rectification, and some of the intermediates necessary for the synthesis of APIs (7-ADCA, 4-AA, etc.) rose sharply to the point of supply cut-off. In the context of the general price increase in the entire raw material market, companies like us cannot afford the sudden price increase caused by accidents. Li Ping told reporters that grabbing the raw material varieties involved in the first time of the accident, inquiring about the price at the first time and grabbing additional orders before the price increase, has long formed a habitual action.
Since 2019, the safety rectification action of the chemical industry has been carried out in many places across the country, among which nearly 100 chemical parks have been closed in Shandong Province, a major chemical province, from the original 200 chemical parks to 84, and more than 2400 chemical enterprises have been shut down. At the same time, the second round of environmental protection inspection actions, known as the "strictest environmental protection storm in history", was officially launched, which put forward higher requirements for the total emission control indicators of polluting enterprises such as APIs, chemicals and coal.
For the sharp changes in the price and supply of raw materials caused by the accident, as the main person in charge of an antibiotic API trading enterprise, Zheng Jie (pseudonym) also has deep feelings. "The production of APIs involves a whole body, involving multiple links, a variety of raw materials, intermediate synthesis, to make an API, less need three or five kinds of raw materials, more than a dozen, and then synthesize, lack of one can not do."
Zheng Jie told reporters that phenylacetic acid is a kind of antibiotic API synthesis process must be used in the chemical raw materials, the environmental protection requirements of this variety of production are very high, plus it belongs to the precursor chemicals, the approval is very strict, so the market is mainly two enterprises in the north in production, but in the past few years due to the explosion accident of the enterprise, the environmental protection department strictly supervised, the production enterprises have been relocated, the production line has been upgraded, once caused the raw material of phenylacetic acid to be interrupted, and money can not buy it.
On the one hand, subject to the impact of environmental impact assessment and the rise in the price of raw materials for upstream basic production, the production cost of APIs has risen again and again; at the same time, with the expansion of the varieties of collection and procurement in recent years, some downstream preparation pharmaceutical companies that stand out at "low prices" on the collection negotiation table have continuously transmitted the pressure of price reduction to the raw materials. We, the API companies, are difficult to breathe under the "double squeeze". Li Ping said.
Sustainable production costs must be taken into account
"Considering that the collection will cover 500 commonly used drugs in the next few years, the impact on the entire pharmaceutical industry chain cannot be ignored, and the general dilemma of API companies may be alleviated from its downstream collection and procurement negotiation mechanism." In the formulation of the rules for collective procurement and bidding, the recruiting party must fully consider the cost of sustainable production of the whole chain of drug production, rather than focusing on only one link." A health care expert, who did not want to be named, told The Health Times.
For example, he said, taking sartan drugs as an example, there may be 8 preparation companies that may participate in the bidding, and the recruiting party can go deep into the relevant preparation enterprises and API enterprises before the bidding work starts, to find out how much the cost of the entire production of the drug is, how large fluctuations are expected during the procurement period, etc. These work sounds cumbersome, and it is not feasible to start at the national level at the same time, but the local drug supervision and industry and information technology departments basically have a better understanding of the local situation. It can be handed over to local departments for collaborative implementation.
The above-mentioned medical insurance experts suggest that when formulating the maximum declaration price, the cost of APIs, the cost of production of preparations, the impact of policies and other factors should be taken into account, and an appropriate amount of price adjustment space should be left for participants in the chain during the procurement period; in addition, if there is a large fluctuation in the cost of drugs in the implementation process that makes it impossible to continue to implement, the purchaser should allow this variety to independently hang on the network to purchase pricing, first of all to ensure supply.
On November 9, the National Development and Reform Commission and the Ministry of Industry and Information Technology issued the Notice on the Implementation Plan for Promoting the High-quality Development of the API Industry, which is generally regarded by the industry as a blockbuster policy that is conducive to the development of the API industry. The circular proposes to vigorously develop characteristic APIs and innovative APIs; rely on existing support channels to promote the industrialization of major innovative achievements in the field of APIs and the promotion and application of green and low-carbon technology equipment; innovate the use of funds, use market-oriented industrial investment funds, and support the development of backbone enterprises and the construction of key common technology platforms in the industry.
At the same time, some API companies are also actively extending the industrial chain to "self-help". For example, Huahai Pharmaceutical, Haizheng Pharmaceutical, Zhejiang Pharmaceutical, etc. all take APIs and pharmaceutical intermediates as the starting point for development, and extend the industrial chain to the downstream high-value-added preparation field early. Li Ping's company began to try to extend the industrial chain upstream, while doing cardiovascular and antibiotic APIs, laying out a complete industrial chain of upstream intermediates.
But for this choice, Li Ping is mixed: the joy is that the future initiative can be in his own hands, and the worry is that the amount of bulk equipment purchased and maintained for the production of chemical raw materials is huge, which will bring heavier pressure to enterprises with insufficient liquidity, and the market pattern of upstream and downstream division of labor and cooperation in the past few decades has matured, and once broken, it may cause repeated construction and waste of industry resources.
"I don't know what kind of price will be quoted by the next batch of collection and mining preparation enterprises?" Li Ping has expectations for future collection negotiations, and he hopes that API companies can participate more in them, so that API companies, preparation companies, and medical insurance can find a price balance point, but this balance point must not be unique and fixed, but can be dynamically changed with market changes.
