Year-End Stocktaking: A Review and Outlook of the New Health Care Reform Deal

　　The current round of pharmaceutical new policies started in early 2015, although the drafting and issuance of the Environmental Protection Law is not by the drug regulatory authorities, but the impact on the pharmaceutical industry is the most serious ever. The next step was the clinical data self-inspection, which was jokingly called the "7.22 fiasco" by the industry. The clinical data verification involved 2,033 pending drug registration applications that had been declared for production or importation, and as of the end of June 2017, the applicants voluntarily withdrew 1,316 pending drugs, and among the remaining 313 drug registration applications that had been verified, 38 clinical trials were found to be suspected of data falsification. Of the remaining 313 drug registration applications that have been verified, 38 clinical trials were found to have allegedly falsified data. A "check" stirred up a thousand waves, the industry a moment of wind and clouds, those who lamented, those who opposed, those who beat their chests.
　　From then to this article published two and a half years have passed, the new policy not only did not stop, but also in the expansion and deepening. Including drugs, medical care, distribution, health insurance, including the four major areas of national and provincial governments issued nearly a thousand pharmaceutical policy documents. Among them, the main R&D aspects are: clinical data self-inspection, priority review and approval, pilot system of drug listing license holder, and joining ICH; the main production aspects are: consistency evaluation of generic drugs, cancellation of GMP, flight inspection, environmental protection law, and verification of drug production process; and the main circulation aspects are: centralized procurement of medicines, GPO, secondary bargaining, national negotiation of drug prices, marketization of drug prices, camp reform and incremental increase, and two-invoice system, GSP, cancel the approval of third-party drug logistics business; the main aspects of the use of medicines in medical institutions: restriction of auxiliary drugs, restriction of antibiotics; the main aspects of the reform of medical institutions: separation of medicines, abolition of drug markups, the proportion of drugs, rationalization of the price of medical services, strict control of medical costs, the pilot reform of county hospitals; the main aspects of the hierarchical diagnosis and treatment: health care coterie, the sharing of regional health care resources, the pilot of the hierarchical diagnosis and treatment; the promotion of social medical care In terms of medical insurance, the main issues are: improving the financing mechanism and management services of medical institutions, delaying the gradual retirement age policy, reforming the payment method of medical insurance, developing health insurance, controlling the cost of medical insurance, the "four coordinators", and medical insurance for major diseases, Direct settlement for medical treatment in other places, and national network of medical insurance.
　　These centralized policy policies point directly to the pharmaceutical industry in the last two decades the formation of the inherent disease, knife to the blood. As of the publication of this article, the current round of health care reform has been able to see a new policy to address both the symptoms and root causes, discarded turnip closed-loop logic.
　　This round of health care reform is different from the previous features are mainly:
　　First, in the past, the health care reform only changed the medicine but not the doctor, so it is difficult to implement;
　　Second, not only medicine reform, but also into the payment reform, health insurance, circulation, environmental protection, business reform and other areas or projects, so that health care reform has become a systematic project;
　　Third, in the past, only focusing on the pharmaceutical industry to change, while the drug regulatory department, new drug approval department is sitting in a fishing boat, this round of health care reform is up and down together;
　　Fourth, the current round of healthcare reform has gnawed on the hard bones that the industry has been waiting for in the past, but the risk is relatively high, including the system of drug listing license holders and ICH.
　　The above is an analysis from the policy level, and the actual operation of the industry at the level of the facts also tell us that the pharmaceutical industry is out of the doldrums and trough.
　　From the data released by the Ministry of Industry and Information Technology, from January to September 2017, the main business income of the pharmaceutical industry increased by 12.3% year-on-year, profit growth of 15.8%, nearly three percentage points higher than the same period last year, and profit growth is higher than the size of the growth rate, and the loss surface narrowed by 13.1%, the reality of the size of the growth and the quality of the operation of the double bullish.
　　From the point of view of the number of new drugs landed, which is known as the barometer of industrial development, as of December 20, 2017, the number of Class 1 chemical drugs hosted by the CDE reached 199, an increase of 42% compared with 2016, which can be said to be explosive growth.722 Since the self-checking of the clinical data not only did not affect the declaration of new drugs, but also provided a lot of impetus for the listing of new drugs.
　　The pharmaceutical capital market is unprecedentedly hot. From October 1, 2016 to September 30, 2017 a total of 725 cases of pharmaceutical mergers and acquisitions occurred in a year's time, involving an amount of 161.718 billion yuan. Among them, most of the M&A cases were concentrated in less than 100 million yuan, and there were 27 M&A cases with more than 1 billion yuan. Compared with the same period last year, the total number of cases increased by 77.7% and the total amount increased by 2.8%. Objectively, it reflects that the capital market's confidence in the pharmaceutical industry is increasing.
　　From the macro data and micro industry operations, the pharmaceutical industry is accelerating differentiation under the dual dynamics of policy and competition. Innovative enterprises represented by Zhengda Tianqing and Hengrui Medicine are leading Chinese pharmaceutical enterprises to take an innovative road combining imitation and innovation. And has been busy to put together the scale, refused to invest in technology and innovation in the field of pharmaceutical companies appear to be walking in the dark, foggy. Those pharmaceutical companies that have not done up the scale and do not have the ability to innovate and core competencies are in decline.
　　From this point of view, the pharmaceutical industry is from the bad money to drive out the good money stage into the real stage of survival of the fittest. Some organizations predict that one-third of the pharmaceutical enterprises will be eliminated, I do not dare to say, but at this stage of the pharmaceutical enterprises should make a decision early, or to catch up or early to seek a safe way out.
　　If this momentum continues and continues to improve and perfect, China's pharmaceutical industry is hopeful that it will enter the ranks of innovation-oriented countries, and the people will have a greater likelihood of using the latest technology of drugs.
　　Looking ahead to 2018, I believe that under the favorable circumstances, we should also see that the pharmaceutical industry is still stubborn, innovative industry is far from being formed, but also need to continue to deepen the reform and constantly improve the policies that have been introduced.
　　First, as of now the reform and new policy, although the effect is good, very systematic, but the administrative and authoritative flavor is very strong, pharmaceutical companies are still only passive acceptance. If it is possible to
　　Formation of the rule of law system and pharmaceutical companies and medical institutions and insurance, health insurance sector overall participation in the reform, the industry will have more confidence.
　　Second, the people's medication is still at a low level. Comparing the top ten largest medication varieties in the world and in China, we can see that the overall level of medication use by the Chinese people is still at a low level, even when compared with the global average level rather than the level of medication use in developed countries.
　　Third, the problems of insufficient number of clinical organizations, low motivation, insufficient standardization, and low level have not yet been fundamentally solved, while the complexity of regulatory approval and the lack of uniform and consistent standards, the overly stringent entry standards for clinical trials, and the long approval cycle will surely become the next constraint on new drug research after the approval process has been improved. These are the biggest bottlenecks in the current pharmaceutical innovation ecosystem, which, if not resolved, will surely affect the pace of new drug launches by local Chinese companies.
　　Fourth, the innovation mechanism urgently needs to be connected with all aspects. At present, the state encourages innovation, accelerated review can be realized, but innovation is to rely on market returns to support. At present, the drug price control is too tight, the listing of new drugs into the health insurance catalog is difficult, even if some of the new drugs have entered the health insurance catalog but is still an individual phenomenon. In developed countries, the sales revenue of new drugs can reach 1 billion to 1.5 billion U.S. dollars (equivalent to 6 billion to 10 billion yuan) five years after the launch of new drugs, while in the country can only reach 0.5 billion to 150 million yuan, some of the new drugs long-term losses, of course, this is also related to the domestic enterprises to operate the method of new drugs and the level of management. But this in any case will frustrate the enthusiasm of drug companies to innovate.
　　In the pharmaceutical industry policy gradually clear, rapid changes in the environment, the background of the escalation of competition, pharmaceutical companies how to assess the situation, have a choice and decision?
　　First of all, objectively recognize themselves. Clearly where are the advantages? Where are the disadvantages? Where are the risks? Where are the opportunities? Where are the resources? Should you choose to diversify or take the path of focus? Taking one step at a time was wisdom in the past, but it is a trap today and in the future. There is more than one road to success, but for a specific pharmaceutical company, you can't take more than one road, you must make trade-offs according to your own conditions. In recent years some visionary drug companies have established their own industrial policies and set up competitive research organizations, and some of them have used purchasing or tailor-made methods to obtain such wisdom reports. However, most pharmaceutical companies are still reluctant to invest in information and find it dispensable, and still make decisions based on hearsay.
　　Secondly, pharmaceuticals are a long-term investment industry, and those who are in a hurry are not suitable for this industry. A new drug from the green shoots to the market and then to market maturity often take more than ten years, need to have the patience to cultivate, to be able to sit on the bench. We envy every year now have a new class of drugs on the market pharmaceutical companies, to know that this is their more than ten years ago, in the policy has not yet matured when the new drug investment, and today one after another bear fruit, this is the victory of vision and common sense.
　　At the same time, we should see that China is a large country with a population of 1.4 billion people, the development is extremely unbalanced, on the total volume of the world's second largest economy, round per capita we are still ranked below the average level, do not be blinded by the new era. So generic drugs are still the mainstay of the drug market, just to do a high level of generic drugs, with developed pharmaceutical giants with the same quality and efficacy or even more than them.
　　Twenty years of over-marketing, homogenized products and homogeneous marketing have benefited us for a while, and in recent years R&D has become the main focus, and systematic management is therefore extra important, which is balance. It is to put marketing, R&D, human resources, and technological advances on an equal footing to operate, and what connects these key links, is operation. If marketing is the front-runner of the development of pharmaceutical enterprises, then R&D is the ballast, operation is the hidden support behind, human resources is the driving force to support these links, and the head of the company is a key to the transformation of the above links.
　　The powerlessness of enterprise growth is no longer a minority in the pharmaceutical industry. We have seen some once brilliant pharmaceutical companies languishing, mainly reflected in low sales revenue growth, profit decline, loss of key talents, diversification setbacks or blood loss. To change, it requires these entrepreneurs to start with themselves and reflect deeply.
　　Pharmaceutical people who have experienced 2015 to 2017 will have more expectations and confidence in the pharmaceutical industry in 2018.