Since the normalization of national medical insurance negotiations began in 2019, the annual "soul bargaining" has always grabbed the headlines of major media.
On the one hand, this is a major event and a good thing that concerns the vital interests of the people, on the other hand, the price reduction of negotiated drugs is often beyond imagination. Taking the recently concluded 2021 medical insurance negotiations as an example, a total of 94 drugs were successfully negotiated, of which 67 were off-list varieties, with an average reduction of more than 60%.
On the demand side, health insurance negotiations can significantly reduce drug prices, reduce health insurance fund expenditures and patients' out-of-pocket burdens. For example, the medical insurance negotiations in 2021 can reduce the burden on patients by more than 30 billion yuan per year.
However, from the supply side, the sharp decline in drug prices has undoubtedly compressed the profit margins of pharmaceutical companies. Most of the drugs in guotan are new drugs that have just been listed in recent years, and the cost recovery period is short. Of the 67 drugs newly transferred to the catalogue last year, 27 were "insured in the year of listing".
How to ensure the sustainable development of these innovative pharmaceutical companies, especially local innovative pharmaceutical companies, under the premise of benefiting patients, is a topic of great concern in the pharmaceutical community.
"The role of the national basic medical insurance catalogue negotiation and renewal system is beyond doubt, but in the current situation, further adjustments and optimizations are urgently needed." Only in this way can we ensure the balanced development of supply and demand and achieve the common goal of expanding the accessibility of innovative drugs. Zhu Tongyu, member of the National Committee of the Chinese People's Political Consultative Conference and vice president of the Shanghai Medical College of Fudan University, said that this is one of the proposals he is ready to bring to the national two sessions this year.
The death of local innovative medicines
Negotiations on the health insurance catalogue at the national level began in 2016 and have been carried out for 6 consecutive years. In these 6 years, both the number of drugs negotiated and the price reduction have been greatly improved. Especially since the establishment of the National Medical Insurance Bureau in 2018 and the leading of medical insurance negotiations, a large number of newly listed anti-cancer drugs and orphan drugs have been included in the medical insurance directory through negotiations.
Zhu Tongyu said that the annual medical insurance directory negotiation has created favorable conditions for innovative drugs to obtain expert review and approval, shorten the market access cycle, and greatly improve the accessibility and affordability of patient drugs, which are worthy of recognition. However, the continuous negotiation and sharp price reductions have also brought some pressure to the nascent local innovative enterprises.
Take the most popular anti-cancer drug PD-1 in recent years as an example. Internationally, the annual cost of treatment for PD-1 is around 300,000. In 2019, PD-1, a local innovative pharmaceutical company in China, relied on its price advantage to enter medical insurance for the first time through negotiations, reducing the annual treatment cost to about 100,000. In the following two years, the PD-1 of Hengrui, Junshi and Baekje also successfully entered the medical insurance, and each expanded the indications, and the minimum annual treatment cost was reduced to 40,000.
Although the huge price decline has successfully forced back foreign pharmaceutical companies, it has also led to a sharp contraction in the market value of domestic PD-1. Due to the fierce competition in the medical insurance negotiations, the size of China's PD-1 market has shrunk from the previously estimated 100 billion to 20 billion, "talking about not entering is a loss, talking about it is also a loss", Zhu Tongyu concluded, he once heard a person in charge of a domestic R & D PD-1 company said that the company has reached a consensus, PD-1 in China will definitely lose money, the only possibility of profitability in the European and American markets.
Not only are the highly competitive me-too drugs reducing prices, but even the world-class "first-in-class" new drugs cannot escape the fate of being "soul bargaining". The vidicetizumab developed by Rongchang Biology is the first antibody-coupled drug in China, which was listed in China in June last year, with a single price of 13,500 yuan. At the end of last year, vidicetizumab entered medical insurance at a price of 3800 yuan per bottle, a drop of 72%. After the results of the negotiations were announced, Rongchang Bio's stock price fell sharply, and in the following two months, the stock price fell.
"Local innovative drugs are inherently weak in medical insurance negotiations. For first-in-class local new drugs, there is a hidden red line of no more than 300,000 yuan in health insurance negotiations. If it is not first-in-class, the medical insurance directory already has the same kind of foreign drugs, then as a latecomer, the price of negotiation will naturally be lowered. Zhu Tongyu said.
Another price reduction factor that is easy to overlook is the addition of new indications. Zhu Tongyu said that in preparing the proposal, he attended a closed-door meeting on innovative pharmaceutical companies. At the meeting, he was deeply impressed by the speech of a pharmaceutical company. When the pharmaceutical company renewed its medical insurance contract, it declared the addition of a new indication, which was very small, and the number of patients in the country did not exceed 1,000. However, under the guidance of negotiators, companies still accepted more than 10% of the secondary price reduction.
"Originally, the new indications for drugs in the catalogue can be declared is a very beneficial measure for patients, but according to the current regulations, all drugs with new indications must be renegotiated regardless of the number of patients, and renegotiation means a secondary price reduction." This has had a negative impact on enterprises to continue to invest in the research and development of new indications, and has hit the enthusiasm of enterprises to continue to develop and innovate. ”
The innovation dilemma triggered by price cuts
What is the knock-on effect of the sharp price reduction of local innovative drugs?
Zhu Tongyu believes that the first thing is the expectation of the outside world for the domestic innovative drug industry. China's innovative pharmaceutical companies, most of which rely on capital investment, are extremely sensitive to risk, and once they cannot complete the target in the later stage of sales, the profit expectation is weakened, which is likely to trigger a chain reaction in the capital market.
The head of sales of a PD-1 company in China confirmed Zhu Tongyu's judgment. He told Eight Point Kenwen that at the beginning of the company's PD-1 product launch, he was very happy every time he saw investors, and everyone was full of spring breeze and imagined the broad prospects of this market. But in the second year, the situation took a sharp turn for the worse, and investors' faces became difficult to see, and they only cared about how much money they could sell. In a recent report, investors directly threw down a sentence, can not do, can not do it on the change.
But everyone knows that changing people does not solve the problem. According to Deloitte's "Evaluation of Return on Pharmaceutical Innovation" released for 12 consecutive years, the average cost of innovative drug pipelines to pre-marketing in 2021 is US$2 billion, while the average expected peak sales of innovative drugs is US$521 million. If you exclude the impact of the COVID-19 vaccine, this figure is only $355 million.
Zhu Tongyu said he has learned about the research and development costs of local innovative pharmaceutical companies. For a "first-in-class" drug, the early research and development costs are generally above 1 billion US dollars, and the cost of enrolling a clinical trial patient in a foreign country is 100,000 US dollars, adding the cost of an indication of 300 million US dollars, only such a cost investment is possible to throw out a world-class innovative drug for China, but even if the drug research and development is successful and smoothly listed, it is still difficult to make a profit from the corresponding return on capital.
"The inversion of the primary and secondary markets has made the investment in biomedicine turn in the past six months, which was originally very positive, and now everyone is very careful about the investment in drugs." In particular, The case of Rongchang Bio's price reduction of 72% into medical insurance is one of the only few innovative drugs in China in the true sense, but it has only been listed for half a year, and there has been such a large price reduction, which is unfavorable for the future of China's innovative drugs. ”
In fact, such drawbacks have begun to appear. Due to the lack of sufficient support for first-in-class medical insurance access, a large number of domestic pharmaceutical companies are not keen on this, but focus on me-too drugs with less risk and less investment, resulting in a high degree of homogenization of domestic innovative drugs. According to statistics, in the PD-1 and PD-L1 tracks alone, in the year from September 2019 to September 2020, there were more than 500 clinical applications submitted by China, which is more than 10 times that of the same period in Japan.
It is necessary to benefit the people as well as to the industry
The "14th Five-Year Plan" has outlined a new blueprint for China's innovative pharmaceutical industry - the average annual growth rate of operating income and total profit of the pharmaceutical industry is more than 8%, and the average annual growth rate of R&D investment in the whole industry is more than 10%; Cultivate a number of world-renowned brands; form a group of large pharmaceutical companies with a global layout of R&D and production and a high proportion of international sales.
Zhu Tongyu believes that in order to achieve such a goal, China's pharmaceutical companies are the main body, and they need to firmly invest resources in the research and development pipeline with real technical content and large clinical demand to make more and better original drugs. However, on the other hand, the formulation and implementation of medical reform policies in the new era also need to be further matched with the planning goals of the innovative drug industry established by the "14th Five-Year Plan". Especially in the negotiation and renewal system of the national basic medical insurance catalogue that has the greatest impact on the industry, it is urgent to balance the relationship between medical insurance control fees and industrial development.
To this end, he brought a proposal entitled "Suggestions on Optimizing the Medical Insurance Catalogue Negotiation System and Supporting the Local Innovative Pharmaceutical Industry" this year, and put forward three specific suggestions.
The first is to give preferential price treatment to local innovative drugs in the negotiation of the medical insurance catalogue. Zhu Tongyu believes that for local innovative drugs with first-in-class or breakthroughs in efficacy, when entering the medical insurance catalog, it is not appropriate to set a price red line and cause excessive declines, but should be given a certain premium space. China's innovative pharmaceutical companies started late, and the gap between them and multinational pharmaceutical companies that have developed over the past century is huge, and they must be left and right between limited capital investment, market disadvantages of latecomers, and scarce talents and technical resources. Although there is some support for innovative pharmaceutical companies at the national level, it is mainly concentrated before the drug is listed, and there are still policy faults in the medical insurance catalogue access link that determines the pricing of drugs.
"In the past few years of medical insurance negotiations, the influx of domestic first-line innovative drugs, and the effective competition with imported drugs have significantly reduced the overall price of innovative drugs." Focusing on the next decade, in order to make local innovative drugs actively play a competitive role, we must do enough support work from the current moment to ensure the reasonable income and profits of local pharmaceutical companies and R&D investment, and narrow the distance with multinational pharmaceutical companies. Zhu Tongyu added.
Second, for drugs with the same mechanism of action, the price of the latecomers and the products already in the catalog should be basically the same. Most of the domestic innovative drugs have begun to participate in the negotiation of the medical insurance directory after 2019, and there is a time difference of 1-3 years with similar foreign-funded drugs in the medical insurance directory, which has led to the fact that local pharmaceutical companies must come up with lower prices before they can be selected. Zhu Tongyu suggested that when negotiating medical insurance, we should advocate that local innovative drugs maintain the same price as similar drugs in the catalog and compete fairly.
△ In 2021, negotiate the price comparison between domestic drugs and similar imported drugs in the catalog
The third is to clarify the pricing rules for new indications drugs, and enjoy no differential treatment with renewed products. Judging from the results of the medical insurance renewal negotiations in the past few years, most of the renewal varieties have continued to reduce prices in the case of new indications. In 2021, 11 new indications have been added to Western medicine in the negotiated catalogue, and this phenomenon will become more and more common in the future, and the status quo of "new indications must be bargained" needs to be changed.
△ 2021 medical insurance negotiations on the new indications of Western medicine
Zhu Tongyu suggested that the principle of renewing the price adjustment should be taken as the first negotiation of a clear price and volume agreement, so that the new indication drugs and the renewed products can enjoy no differential treatment. For new indications, the original price or small reduction can be directly included in the medical insurance catalogue within the expected range of medical insurance fund expenditure.