Abolition of Drug Pricing, fund managers are optimistic about two types of drug enterprises

A few days ago, the National Development and Reform Commission and other departments issued a notice on advancing drug price reform opinions, removing most of the government-set drug prices. Medical Fund managers interviewed by the Securities Times generally believe that this policy will benefit OTC brands and blood products two types of enterprises. Enterprises of both categories will benefit from the announcement, which stipulates that starting from June 1 this year, prices of all drugs will be set by the market, with the exception of narcotic drugs and psychotropic drugs, which are still priced by the government. Ni Wenhao, manager of UBS Healthcare Fund at SDIC, said the policy will improve the mechanism of drug procurement, strengthen the role of medical insurance cost control, and establish a market-oriented mechanism of drug price formation, which is generally good for pharmaceutical companies. Drug companies form drug prices by means of competitive bidding, bargaining and self-determination pricing. Drug companies with few products can make their product prices open, transparent and reasonably profitable through bargaining, previously tight supply of limited-price products can moderately increase the price, brand OTC enterprises will be appropriate premium. Rich Country Health Care Industry Fund manager Dai Yiqiang analysis, brand OTC and blood products industry is expected to benefit. Higher retail prices open, bargaining power of a strong brand OTC easy price, price ceiling rise, price will also reduce the terminal block. Blood Products Industry by the upstream pulp station and downstream price control, higher retail price opening, bring the terminal price of the leap, enterprise capacity will be significantly enhanced. "The drug liberalization policy market has long been expected, but the timing is slightly earlier than previously expected, short-term won't have a big impact on the stock prices of listed pharmaceutical companies. In the medium and long term, good blood products enterprises, OTC brand drug enterprises and innovative drug enterprises. Blood product supply is tight, after the price is released, have the possibility of raising the price. "In recent years, branded OTC drug companies have suffered from slow growth in the industry and poor profitability due to drug store terminal interception factors. Most OTC products are priced or filed by provincial price bureaus, and after price liberalization, branded drug companies are expected to receive premium prices, " Ni said. "The price liberalization is expected, and the policy measures are expected to have a far-reaching impact on the industry in the future, " Great Wall Healthcare Fund manager Xu Jiulong told the Securities Times. Since the products of Chinese pharmaceutical enterprises are mainly generic drugs, their innovation capacity is insufficient, and their competition is homogeneous, once price control is lifted, especially under the situation of health insurance control fees, the downward pressure on product prices will obviously increase, and the survival environment of enterprises will obviously diverge."pharmaceutical companies in the A-SHARE market began to exert their efforts from mid-february to mid-april this year, is up in a concentrated fashion. Since 2015, the A-SHARE pharmaceutical index rose from 1,331.35 points to 1,972.73 points on May 6, a 48.18 per cent range gain. Benefiting from the rise in the pharmaceutical sector, the net value of pharmaceutical-themed funds performed strongly. At present, there are 31 medical theme funds in the market, of which 18 are actively managed. Wind data shows that the 18 actively managed pharmaceutical-themed funds have increased their average net worth by 47.96% in the year to May 5.