Jichuan Pharmaceutical Pudi blue anti-inflammatory oral liquid fell into a dilemma: it was successively "cleared" by the provincial medical insurance directory, and the ace of tens of billions of sales was uncertain

China Times (www.chinatimes.net.cn) reporter Yu Na reported in Beijing

An announcement put Jichuan Pharmaceutical's Pudilan anti-inflammatory oral liquid with tens of billions of sales into a dilemma.

Hubei Jichuan Pharmaceutical Co., Ltd. (hereinafter referred to as "Jichuan Pharmaceutical"), a listed company for children's medicines, announced on August 19 that the main variety of Pudilan anti-inflammatory oral liquid of its wholly-owned subsidiary, Jichuan Pharmaceutical Group Co., Ltd., will withdraw from the Heilongjiang Provincial Medical Insurance Directory at 24:00 on December 31, 2021.

Relevant information shows that Pudilan anti-inflammatory oral liquid is the exclusive dosage form of Jichuan Pharmaceutical, clinically mainly used for mumps, pharyngitis, tonsillitis, boils, etc., listed in 2003, with cumulative sales of more than 10 billion yuan.

In fact, this is not the first time that Jichuan Pharmaceutical Pudilan Anti-inflammatory Oral Liquid has withdrawn from the provincial medical insurance directory, after the announcement showed that Pudilan Anti-inflammatory Oral Liquid was withdrawn from the hebei provincial and Shandong provincial medical insurance directories on June 30 and November 1, respectively, with a transition period ending december 31, 2021. This means that after the pudi blue anti-inflammatory oral liquid was not included in the national medical insurance, it was successively withdrawn from the medical insurance directory of three provinces.

Taking the key monitoring drug Danshen Chuanqiazine Injection that was "cleared" by Kang enBei by the medical insurance directory as an example, after experiencing a sharp decline in the market, the star product finally applied for cancellation, and some insiders raised concerns about the future market trend of Pudi blue anti-inflammatory oral liquid of Jichuan Pharmaceutical.

In this regard, Jichuan Pharmaceutical said in an interview with the "China Times" reporter that medical insurance is not the only factor affecting the scale of drug sales, and the recognition of efficacy, brand and user is also very important. The company will pay close attention to and actively respond to national policy changes, strengthen the grasp and understanding of policies and industry guidelines, make full use of brand advantages, product advantages, management advantages, timely adjustment of marketing strategies, and strengthen competitiveness.

Tens of billions of sales star drugs have been changed

Public information shows that there are more than 30 approvals for the production of domestic pudilan preparations, but the oral liquid approval is only unique to Jichuan Pharmaceutical, and it is a star drug with countless awards, and it is precisely by relying on this blockbuster product that Jichuan Pharmaceutical has risen rapidly in the children's drug market. From 2013 to 2018, Jichuan Pharmaceutical's revenue and net profit maintained an annual growth rate of more than 20%.

However, at the end of 2018, Pudilan anti-inflammatory oral liquid ushered in stricter supervision. The State Food and Drug Administration issued an announcement on modifying the prescription drug instructions for pudilan anti-inflammatory preparations (tablets, capsules, oral liquids), adding nausea, vomiting, bloating, abdominal pain, diarrhea, fatigue, dizziness, etc.; skin rashes, itching allergies and other adverse reactions, clearly pointing out pregnant women and children with allergic constitutions, spleen and stomach deficiency and cold people with caution.

Since then, the market sales of Pudilan anti-inflammatory oral liquid have declined in response. According to the annual report, compared with 2018, the output of Pudilan anti-inflammatory oral liquid of Jichuan Pharmaceutical In 2019 fell by 40%, and the sales volume fell by 24% year-on-year. In 2019, the company's heat and detoxification products (mainly Pudi blue anti-inflammatory oral liquid) revenue of 2.348 billion yuan, down 14.27% year-on-year.

Star drugs suffered "Waterloo", so that the performance of a unique Product Jichuan Pharmaceutical suddenly "stalled", 2019 revenue of 6.922 billion yuan, down 3.83% year-on-year; to achieve a net profit of 1.623 billion yuan, down 3.84% year-on-year, there was the first time in the 6 years of listing, revenue and net profit double decline.

Not only that, pudi blue anti-inflammatory oral liquid has not entered the 2019 version of the national medical insurance directory. At the same time, in accordance with the requirements of the Notice of the National Medical Insurance Bureau and the Ministry of Human Resources and Social Security, the Class B drugs that were increased in accordance with the provisions of the original provincial drug list should be gradually digested within 3 years.

In this regard, Jichuan Pharmaceutical also mentioned in the 2020 annual report: "The company's pudi blue anti-inflammatory oral liquid, protein ferric acid oral solution and other products are not included in the national medical insurance directory, and have been included in some provincial medical insurance directories." If the above products have not yet entered the national medical insurance directory in the future, they may face the risk of withdrawing from the provincial medical insurance directory in the next 3 years. ”

For the impact of this withdrawal from provincial medical insurance, Jichuan Pharmaceutical said in the announcement that in 2020, the sales amount of Pudilan anti-inflammatory oral liquid in Heilongjiang Province was about 32.46 million yuan. In addition to being affected by medical insurance payment policies, the specific sales scale of drugs will also be affected by factors such as product efficacy, brand influence and user recognition. The impact of the company's withdrawal from Heilongjiang Medical Insurance on the company's operating performance cannot be estimated, and it will not have a significant impact on the company's performance in the short term. "Pudilan anti-inflammatory oral liquid has been authoritatively certified by the Chinese Academy of Chinese Medical Sciences and the Chinese Academy of Medical Sciences, and has been selected into the diagnosis and treatment guidelines and expert consensus of a number of national and provincial related diseases, and more than 500 pieces of clinical evidence-based medical evidence, and the efficacy has been recognized by professional medical institutions and the majority of patients." Before many non-medical insurance provinces and medical insurance provinces entered the medical insurance directory, Pudi blue anti-inflammatory oral liquid also achieved good sales performance. ”

However, not being able to enter the medical insurance directory will affect the sales of the product.

On August 20, Jichuan Pharmaceutical said in response to investors' questions that the company will pay close attention to the changes in the national medical insurance policy and strive to promote the entry of Pudi blue anti-inflammatory oral liquid into the national medical insurance directory in the case of long-term interests.

Can new growth points be fostered?

In 2020, The revenue and net profit of Jichuan Pharmaceutical are still declining. According to the annual report, the company achieved operating income of 6.164 billion yuan, down 11.17% year-on-year; net profit attributable to shareholders of listed companies was 1.277 billion yuan, down 21.30% year-on-year; among them, the revenue of detoxification, pediatric and respiratory products decreased by 8.84%, 31.94% and 34.97% respectively over the previous year.

According to the 2021 semi-annual report, the company achieved operating income of 3.682 billion yuan, up 24.76% year-on-year; net profit attributable to shareholders of listed companies was 853 million yuan, up 24.70% year-on-year; net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses was 805 million yuan, up 21.68% year-on-year.

Jichuan Pharmaceutical said that during the reporting period, the company's operating income and net profit increased year-on-year, mainly due to the impact of the epidemic isolation measures in the first half of 2020, the routine outpatient clinics of some hospitals failed to receive normal treatment, the outpatient volume of pediatrics and other departments fell by a large margin, and the sales of pharmacies were also adversely affected, resulting in a decline in sales revenue and net profit in the same period last year. In 2021, with the gradual lifting of quarantine measures and the gradual restoration of normal operations by medical institutions, the adverse impact of the epidemic on the company's operations will gradually be eliminated.

However, the semi-annual report also mentioned the risk of product concentration, the company's products Pudi blue anti-inflammatory oral solution, rabeprazole sodium enteric-coated capsules, pediatric soychia heat clearing granules the total sales revenue accounted for 71.48% of the current period of the main business income, the production and sales of the above products to a large extent determines the company's revenue and profitability, once its API prices, production and marketing conditions, market competition pattern and other major adverse changes, will have an adverse impact on the company's future operating performance.

Among them, pediatric soy sauce clear heat granules are another exclusive variety of Jichuan Pharmaceutical, which is mainly used for the treatment of children's wind fever and cold, ranking first in the field of proprietary Chinese medicines with a market share of 40%, and the sales volume in 2019 and 2020 are about 1 billion yuan.

Jichuan Pharmaceutical is also increasing the layout of the pediatric soy sauce clear heat granule product line, in 2020, the non-public issuance of A-share shares raised 1.384 billion yuan, of which the use direction includes the "annual output of 720 million bags of pediatric soy sauce clear heat granule project".

Some insiders have asked: Will the children's soyche clear heat granules become the main varieties of Jichuan Pharmaceutical in the future? At the same time, if the future Pudilan anti-inflammatory oral liquid has not yet entered the national medical insurance directory, and faces the risk of withdrawing from the provincial medical insurance directory within 3 years (before December 31, 2022), then the time left for Jichuan Pharmaceutical to cultivate new growth points is already urgent.

In this regard, Jichuan Pharmaceutical told this reporter that before the epidemic in 2020, the pediatric soyche clear heat particles showed a relatively good momentum of development, with an average annual compound growth rate of more than 30% from 2017 to 2019. The follow-up company will further enrich the company's product line, consolidate the foundation of the company's sustainable development, continue to increase the development of second-tier varieties and new medical insurance varieties and other fast-growing products, improve the product structure and cultivate new profit growth points.