Author: Vulcan Eight
01 | induct
History does not repeat itself, but it rhymes.
During the Spring Festival in 2025, deepseek, which was called "national sports-level innovation" by Feng Ji, the producer of "Black Myth", was born, and only 2048 NVIDIA H800 chips were used to train a large model with the same performance as GPT-o1. On the same day, the Nasdaq index fell 3.1%, and the "AI darling" Nvidia closed down more than 17%, and its market value evaporated by more than $560 billion.
It's hard for you to say whether this is capital acuity, or if similar dramas have been staged too many times, and everyone knows the next plot.
Whether it was when open ai output was priced at about 1.8 yuan per 1,000 Chinese characters, or 30 years ago, when Pfizer launched the "blue pill" Viagra in China, the price of 128 yuan per pill was higher than gold, they all shared the same underlying business logic behind them: monopoly creates profits, and profits feed back to monopoly. It's just that when Deepseek debuts at a price of 5% for reasoning, or domestic andrology drugs such as [Habitual Love] at a price of 5 yuan per tablet, such technological hegemony always collapses quietly.
You have to wonder if the seemingly eternal monopoly of all American companies hides the fate of being pierced by the cost-effective blade of Chinese companies?
02 | Origin
The discovery of the "little blue pill" was not expected.
In the early '90s, Pfizer's cardiovascular lab made an unexpected discovery: compound UK-92480 performed mediocre in a trial to treat angina, but when the trial data was recovered, it showed a special side effect - it can prolong the duration of male function. As a result, many clinical trial participants are reluctant to hand over their remaining agents.
This discovery, nicknamed "unintended pregnancy", led to the birth of sildenafil, the first PDE5 inhibitor in humans.
Pfizer naturally did not miss this obvious opportunity, and in 1998, after registering patents in more than 100 countries and passing large-scale clinical trials, sildenafil was officially launched under the name "Viagra". Over the next two decades, Pfizer tells the most successful business story in the history of modern medicine: a wave of sales of up to 43,000 prescriptions per day. The clinical data barrier formed by more than 60 million patients around the world, combined with the price system of $12 per tablet, has pushed sildenafil to the altar of "the iPhone of the pharmaceutical industry". Data shows that from its listing in 1998 to 2017, Viagra's total sales exceeded $32 billion.
However, during the patent period, Viagra's success was completely predictable. And after the patent expires, Pfizer shows the real technology.
In 2017, when the Viagra technology patent expired, it was widely predicted that the "little blue pill" would hit a patent cliff in 2018, with sales plummeting to $359 million from $1.1 billion last year and only $188 million in 2022. However, in fact, Pfizer still greatly extends the market life of Viagra through patent means such as oral disintegrating tablets, 85% of hospital terminal distribution rates, and "IP exclusivity" authorization, and the data shows that in the 2023 national retail pharmacy prescription drug sales list, Viagra still occupies the first place in sildenafil, with a price of 68 yuan per tablet comparable to luxury goods - as we all know, Hermes never lowers prices.
However, such seemingly unbreakable commercial barriers were quickly broken.
03 | Break the game
Viagra is not without challengers.
In fact, only four years after the "little blue pill" was launched in 1998, in 2002, Eli Lilly's ED drug tadalafil, also known as "Cialis", was launched in Europe. As a second-generation PDE5 inhibitor, tadalafil is rapidly gaining over 40% market penetration worldwide through its efficacy of up to 36 hours and pharmacokinetic properties that are not affected by a high-fat diet.
However, this class of drugs has not shaken the dominance of sildenafil. The reason for this is also very simple, tadalafil is not much cheaper than sildenafil. According to the "2024 China Anti-ED Drug Industry White Paper", the price of common andrology drug products on the market is about 25-70 yuan, and tadalafil is as high as 60-130 yuan.
The price of tadalafil is essentially a tacit agreement between the top pharmaceutical companies to earn money together, which is highly similar to the competitive strategy of companies such as OpenAI and Anthropic in the field of large AI models in the United States, that is, competition and substitutes are allowed to exist but do not trigger price wars, and jointly maintain the profit margin of the industry.
But with the advent of Chinese companies, this consensus has been shattered.
In 2014, Viagra's patent in China expired, and Chinese companies immediately launched domestic alternatives that were 20%-30% cheaper, and in the first few years, the original drug of about 68 yuan and the generic drug of around 48 yuan still maintained a delicate balance, and the two sides made money in harmony. However, after 2020, the products of dimensionality reduction and attack will appear: the average price of cutting-edge domestic ED drugs represented by the [Xiai] brand is 3-6 yuan. If it is calculated according to the calculation that a patient takes 50 tablets per year, it will directly save more than 6,000 yuan for the patient.
The launch of [Habitual Love] is undoubtedly a "deepseek moment" in the field of ED drugs. It stands to reason that Yiai has passed the national drug consistency test, and the effect is not inferior to that of foreign products. In fact, according to the "2024 China Anti-ED Drug Industry White Paper", in the user recommendation link that can best reflect product satisfaction, the score of Yiai is as high as 41.83, ranking first among domestic brands. It stands to reason that it is possible to occupy the market at a higher price, but why is it only sold for 3-6 yuan?
In fact, this is not just a simple concession, the business logic behind it, and the original domestic shield machine launched, the price is only one-tenth of that of foreign countries: the subversive price will not only support a strong substitution effect, but also expand the market and sales, so that enterprises can dilute the cost of research and development through scale expansion, accelerate technology iteration, and form a virtuous circle of "low price - market share expansion - mass production cost reduction - technology upgrading".
The tactics of habitual affection, apparently worked. Two years after its launch, in 2023, it has achieved total online and offline sales of more than 100 million tablets, with a cumulative user evaluation of more than 1.1 million and a praise rate of over 99.9%, making it the most important andrology drug online.
The hegemony of Sildenaf, built up by foreign giants, collapsed in an instant.
Habitually love intelligent production line
04 | reconstitution
Any dimensionality reduction strike cannot be traceless.
The efficacy of a drug comes from the active pharmaceutical ingredient, that is, the API, prepared through chemical synthesis, plant extraction and biotechnology. Therefore, the price of APIs is one of the important costs of drugs. THE DATA SHOWS THAT THE PRICE OF SILDENAFIL RAW MATERIAL IS ABOUT 2000-3000 YUAN/KG, WHILE THE PRICE OF IMPORTED TADALAFIL IS AS HIGH AS 5000KG/KG. With such a material cost as a base, it is obvious that the price cannot be lowered.
Today, the mainland is already the world's largest producer and exporter of APIs, accounting for about 28% of the world's API production capacity. The huge scale of production has effectively lowered the price of APIs, and also provided a basis for the price reduction of domestic drugs.
At the same time, the development of intelligent production in China has also provided a boost for the habitual lovers.
According to the latest data, China is equipped with 470 industrial robots per 10,000 workers, and the density has surpassed Germany and Japan, jumping to the third place in the world. A reporter who visited the production line on the ground and was shocked by the degree of digitalization in it: the production line inside the factory relies almost entirely on automated equipment, including not only robot arms and automated conveyor belts, but also sophisticated sensors and control systems. Each machine is connected to a central control system that ensures the accuracy and efficiency of the production process through real-time data transmission and analysis.
Habitually love intelligent production factory
Finally, the dilemma of ED drug sales in the past was how to get patients to bypass the meaningful eyes of the pharmacy clerk. Chinese pharmaceutical companies have solved the problem of the century with Internet thinking: Meituan has launched a "late-night emergency delivery" service, and JD Health has developed an AI consultation system with a tertiary hospital, which can complete prescription issuance in 5 minutes, allowing users to purchase without obstacles. We also extend the service chain to after-sales and provide one-to-one medication guidance to consumers.
When ED drugs have built a closed-loop ecology of "online consultation-drug distribution-health management", Chinese and foreign ED drugs have been upgraded from the price dimension to the reconstruction of industrial rules.
All in all, from the blue pill to the Chinese pill, this transfer of pharmaceutical power spanning three decades reveals that in the business world, there is no eternity of royal power, there is no technological wall that will never collapse, and there is only a cost-effective revolution that is constantly iterating. When they reconstruct the pharmaceutical value chain with Internet thinking, they are not only writing a counterattack story of a certain product, but also a collective trial of monopoly pricing power in an era:
In the face of the right to health, any fortress of profiteering built in the name of technology will eventually collapse under the dawn of universal medical care.