New drug

China's independent innovation of drugs has always been encouraged in policy, but decades of practice has shown that relying solely on individual pricing, scientific and technological subsidies, such encouragement policies are not enough to drive the majority of Chinese drug companies to actively, recklessly and persistently carry out innovative drug development. Until today, the "three medical linkage" reform has been carried out in an orderly manner, the reform of medical insurance catalogue management, the procurement of quantity, the implementation of the drug listing holder system, and the landing of quality improvement (drug consistency evaluation, clinical trial data verification, drug registration classification reform, drug breakthrough therapy and priority review qualification, etc.). Only then did the medical community really see the shining hope of independent innovation with clinical value.

As early as more than 10 years ago, the development of new drug companies, financing, and project advancement were once very difficult. Around 2013, the state's encouragement of innovative drugs rose from "reward" to the stage of "adopting a series of reform measures". A large number of investors have entered the market due to the awareness of national policies to encourage innovative drugs. At present, in addition to the valuation, new drugs are required to apply for listing in the Hong Kong Stock Exchange in the phase II clinical development stage. The domestic science and technology innovation Board has also taken measures to allow non-profit new drug companies to apply for listing, and the valuation of a wave of companies with new drug concepts has risen significantly.

The reason why innovative drugs with clinical value really have a good policy environment is in recent years, not because the state does not encourage independent innovation of drugs in the past, on the contrary, the state has given birth to a number of precious "two bombs and one star" innovative drugs with quite generous treatment. What is the difference between the current policy environment of the three medical linkage reform and the encouragement of innovation at that time?

Although the state has been very encouraging the development of new drugs, the difficulties faced by new drug companies are not only the pressure of funds needed to develop new drugs. In addition, the current domestic pharmaceutical industry's real money-making products are not in the new drugs, and companies can not consider the interests.

The three medical linkage is to carry out policy reform from the linkage of medicine, medical insurance and medical care. At the pharmaceutical end, the policy has been basically formed, which is to resolutely improve the quality of drugs and the threshold of market access, and eliminate some products and some enterprises. The medical insurance end, the main battlefield at present, eliminates/restricts a number of backward safe and ineffective varieties, and gives the profit margin to valuable products by changing the cage for birds; The medical side, the highlight of the future, to achieve rational drug use, there is no longer a "play price" game.

All the reform measures lead to the same situation - the entire pharmaceutical industry's truly profitable products, there will be a lot of room for valuable innovative drugs. At the same time, the capital market's expectation of new drug companies has gradually climbed, further promoting new drugs with funds.

The medical reform will optimize the increment and adjust the stock. Companies with enough patience and determination to complete the development of new drugs will be more hopeful than ever before to gain their own status.

                                                                                                                                                               Bulk drug

APIs policy is influenced by two major events, the first one is the explosion of water, and the second one is the national drug procurement.

The Xiangshui incident eliminated a number of raw materials and upstream fine chemical enterprises with non-standard production safety and environmental management, and then strictly checked the new projects of chemical manufacturing enterprises. This makes large enterprises with risk resistance and excellent enterprises with standardized management suddenly stand out, making apis become scarce resources.

With the volume of procurement, wherever they go, will originally belong to the drug sales and circulation of profits compressed, and as a manufacturing cost of raw materials, on the one hand, there are raw materials, cost advantages, become the largest weight of generic drug companies in the collection can have the confidence to participate in the competition, on the other hand, the unit price of raw materials may be affected, but the profit is not compressed. Instead, it benefits from the sales generated by the collection.

                                                                                                                                                               Summary:

The current policy environment and capital direction are focused on new drugs and apis (including CDMO, etc.), enterprises to take advantage of the trend, need to have a long-term strategy and clear positioning, avoid herd psychology, master the core competitiveness. Then make a good choice under the historical opportunity, and then use the policy opportunity to give their choice points.