Edit | Yuer Lake
出品 | 潮起网「于见专栏」
The pills that carry the hope of people's lives are constantly refreshing the life limit of human beings, and every time a new drug appears, it means a breakthrough. However, the long drug development cycle and the large amount of money required are unimaginable to ordinary people, so each region has an almost strict protection mechanism for new drugs.
Under the branch of "sky-high drugs", almost all drugs are monopolized by foreign pharmaceutical companies, especially companies such as AstraZeneca and Pfizer, which have almost invulnerable barriers in the direction of rare diseases and chemotherapy drugs. During the period of patent protection, there are few options in the clinic. However, AstraZeneca, which has occupied the king position in the domestic market for many years, has somewhat died down.
When the centralized procurement of medical insurance was carried out, the sky-high price of drugs was forced to bow down
The high prices of drugs and consumables make it impossible for many patients who have urgent needs for this. After years of pilots and research, relevant departments have begun to promulgate centralized procurement implementation plans one after another since 2018, which has opened the prelude to centralized drug procurement.
As of December 2023, the relevant departments have completed 9 batches and 10 rounds of centralized procurement of a total of 374 drug categories, saving more than 500 billion yuan in medical insurance funds.
When centralized procurement entered the stage of normalization, the entire centralized procurement catalog has also changed over time, and some sky-high drugs that once discouraged many patients have also begun to become accessible. However, for R&D pharmaceutical companies that pay huge R&D costs and market costs, centralized procurement is both an opportunity and a challenge.
Taking fulvestrant injection as an example, the terminal sales of this injection in China's public medical institutions will exceed 900 million in 2022, and the original manufacturer is AstraZeneca, which occupies nearly 70% of the market share. At the time of the centralized procurement quotation, it submitted the quotation at a price of 2,306 yuan/branch, but the domestic Zhengda Tianqing Pharmaceutical Co., Ltd. quoted 148.3 yuan/branch with the same specification, a price difference of about 15 times, and it is understandable that AstraZeneca lost the large order of centralized procurement.
However, from the perspective of R&D pharmaceutical companies, decades of R&D investment and bottomless marketing expenses need to rely on the revenue of the product during the patent protection period. Therefore, many pharmaceutical companies are reluctant to enter the centralized procurement list, and even voice that they are about to withdraw from the Chinese market.
While the cold wind of centralized procurement is still sweeping the pharmaceutical industry, the wave of medical anti-corruption is sweeping again, and this time the scope of the impact and the severity of the punishment are unprecedented to anyone.
However, if medical anti-corruption is a reshuffle of the entire industry and has an impact on the entire pharmaceutical industry, then it should be that all pharmaceutical companies have regressed to varying degrees. However, looking at several major multinational pharmaceutical companies in China, only AstraZeneca's performance was disappointing, with the growth rate slowing down and negative news coming out frequently.
The growth rate continues to decline, and the Chinese market is not very optimistic
According to AstraZeneca's recently released 2023 financial report data, it achieved revenue of $45.811 billion in 2023, a year-on-year increase of 3.29%. Compared with the growth rate of 37.11% in 2021 and 17.23% in 2022, AstraZeneca's growth in 2023 is obviously somewhat stretched.
(Source: AstraZeneca's 2019-2023 financial report)
At the same time, according to relevant data research institutions, China is still the focus of AstraZeneca's business, accounting for 12.8% of revenue, but the growth rate is only 7%.
In terms of pharmaceutical business alone, Merck's revenue in China increased by 32%, significantly ahead of the second place Novartis' 17%, and Novo Nordisk and Eli Lilly, which entered the market a little later, also exceeded double digits in revenue growth in China, reaching 11%.
As a superpopulous country, China's huge demand for medical resources naturally makes all companies rush to it, and in the face of such an imaginative market, AstraZeneca will naturally not let go, especially after the tone of domestic substitution of imports has been blown in the pharmaceutical industry.
In recent years, AstraZeneca's drastic layout in China has undoubtedly raised the strategic position of the Chinese market to a new height.
AstraZeneca inhalation aerosol production and supply base in Qingdao High-tech Zone, with a total investment of more than 700 million US dollars, has cooperated with a number of pharmaceutical companies in Shanghai, a highly strategic area, to carry out forward-looking layout in the field of domestic innovative drugs. But all this is hard to erase the embarrassment of its slowing growth in China.
After the DRG policy began to gradually expand the scope of the pilot, many hospitals have begun to abandon expensive and high-priced drugs, which is also a major incentive for AstraZeneca's growth rate in Greater China to be only in the single digits, after all, once the cost exceeds the "fixed price", hospitals will have to pay for their own profits and losses, which is unacceptable for doctors.
At the same time, AstraZeneca also has a common problem unique to the original pharmaceutical company: it likes to start with rare diseases and orphan drugs, and becomes the first person to eat crabs. This brings a new problem: long R&D cycle, difficult cost recovery, and excessive capital cost.
And just recently, the announcement of the delisting of a rare disease drug in China has led to the embarrassment of tens of thousands of patients without drugs, which has made the market begin to reflect on whether the market demand for rare disease drugs can support the huge R&D expenditure behind it, not to mention the huge clinical verification and marketing expenses in the early stage of drug launch.
According to AstraZeneca's 2023 annual report, the majority of its revenue is still oncology drugs, accounting for 37.43%, contributing $17.145 billion in revenue, while the revenue in the field of rare diseases is only 16.95%, occupying the bottom of the four major business segments.
However, the difference between the pharmaceutical industry and other industries is that it not only focuses on revenue, but also captures market demand, and sees the gaps and hot trends in the medical field in the next 5-10 years. This undoubtedly puts forward higher requirements for the foresight of enterprises.
Of course, AstraZeneca also emphasized this point in its 2023 financial report: Conquering breast cancer will be the focus of AstraZeneca's future, which actually coincides with its latest launch of trastuzumab, a targeted therapy drug for breast cancer.
But just as AstraZeneca was ready to show its strength, the wave of medical anti-corruption swept in.
After being arrested, where did AstraZeneca go?
In recent years, the entire medical industry has been in turmoil due to the continuous increase in medical anti-corruption efforts. The directors of some hospitals have been dismissed one after another, and all admission declarations have been postponed indefinitely, and the trembling of the departments can be clearly felt through the shrinking medical costs.
Imported original drugs with high prices and medical devices with thousands or tens of thousands of yuan have naturally become the hardest hit areas. However, according to industry insiders, in fact, as early as when the department strictly controlled the proportion of consumption, these products with ungrounded prices have begun to decline, in addition to some life-saving drugs and necessary consumables that have to be used, many doctors are choosing more cost-effective domestic alternatives.
Judging from AstraZeneca's net profit in the past five years, it is also constantly turbulent. AstraZeneca's revenue soared in 2020, and its profit margin increased by 111.7% year-on-year in 2020, but in 2021, due to the insurance fraud scandal, it plummeted by 97.41% year-on-year, which can be said to be a return to the pre-liberation period. Although AstraZeneca began to significantly adjust its business deployment in 2022 and 2023 and return to positive growth, the negative impact caused by it will always be difficult to eliminate.
On February 10, 2022, the relevant departments issued the "Brief Case Report on the Case of Staff of AstraZeneca Pharmaceutical Co., Ltd. Suspected of Defrauding the Medical Insurance Fund" on the "AstraZeneca Insurance Fraud Incident". The product suspected of insurance fraud is AstraZeneca's star oncology drug Tagrissa (osimertinib), and in April of the same year, Sichuan Province also reported two typical cases of insurance fraud involving AstraZeneca.
In September of the same year, in order to complete the sales performance of the drug Belinda, the medical representative of AstraZeneca purchased a large number of drugs from pharmacies, and illegally sold them through online sales and other means, and was fined and confiscated a total of nearly 300,000 yuan.
Although the relevant person in charge of AstraZeneca said that AstraZeneca will comply with relevant laws and regulations and reasonably expand the Chinese market. But once the seeds of doubt are planted, they cannot stop growing, especially when AstraZeneca's main products in China are mostly oncology drugs.
AstraZeneca's insurance fraud incident has undoubtedly had a serious impact on the company's reputation and market position, although the company has a greater say in some disease fields, but under the trend of domestic original research to replace imported drugs, it is bound to do some more aggressive marketing plans to stabilize its performance market.
According to relevant sources in the industry, the performance pressure of AstraZeneca's medical representatives is very high, and in order to achieve the goal, the representatives often have their own strange tricks, and even wander in the gray area. In this vicious circle of taking risks for the sake of performance, and being picketed out after taking risks, how AstraZeneca should break the situation, I am afraid it cannot rely on product competitiveness.
As a world-renowned multinational pharmaceutical company, although AstraZeneca is based on a capital society, as an icebreaker and leader in the pharmaceutical industry, it needs to assume more social responsibilities.
epilogue
Cancers that have no drug can be treated have a chance to survive because of the emergence of cancer chemotherapy drugs, and patients with rare diseases have a chance to prolong their lives because of the investment of pharmaceutical companies regardless of the cost. AstraZeneca has been fighting human diseases for 25 years, and it has brought good news to many patients.
Faced with a complex pharmaceutical market and a looming anti-corruption situation, the future of AstraZeneca is full of fog. Unlike the DIP model in the international market, the deployment of DRG in China is also further encroaching on the market for imported drugs. What should AstraZeneca, which does not enter the centralized procurement catalogue and does not participate in medical insurance reimbursement, go from here, which is also a question that many multinational pharmaceutical companies urgently need to answer.