Produced by | Tiger Sniff Technology Medical Group
Author | Chen Guangjing
Edit | Miao Zhengqing
Header | Visual China
Pharmaceutical agents teamed up with pharmacies to cheat insurance, and overturned another "golden job bowl" in the industry?
On October 16, the National Health Insurance Administration issued a new regulation to strictly regulate the management of external prescriptions for medical insurance drugs by designated medical insurance institutions.
In particular, retail pharmacies must not only regularly submit prescriptions for patients' drug purchases to the medical insurance department, but also regularly "reconcile" with medical institutions to ensure that there are no violations of laws and regulations.
More importantly, before the end of December this year, the medical insurance department will also carry out special inspections for prescription drugs such as outpatient chronic diseases, as well as other drugs with high amounts, high costs, and high risk of fraud and insurance fraud. During the inspection period, not only the non-compliant medical institutions and pharmacies will be punished, but even the insured will also face penalties such as downgrading credit evaluation and reducing the convenience of medical insurance services.
This means that the retail pharmacy market for specialty drugs will also experience a similar inspection storm of pharmaceutical anti-corruption.
The cause of this incident was another major insurance fraud case in the pharmaceutical field exposed by the National Health Insurance Bureau a day ago (October 15).
According to CCTV News' report on the case, the screening of the big data center of the National Health Insurance Administration found that there were 96 insured people in Harbin City, Heilongjiang Province, who purchased a particularly large amount of drugs in pharmacies.
For example, Su Kexin (chemical name: avatrombopag maleate), which was named in the report, was priced at 7,140 yuan, and the approved indication at that time was for increasing platelets before elective surgery, 3 tablets a day, taken for 5 days, one box is enough. Some patients have prescribed about 160 boxes in 2 years, with a total amount of more than 1 million yuan!
In this regard, the manager of a pharmacy said in an investigation that it was instructed by the pharmacy. Those who provide fake prescriptions are the "medical representatives" who have long been caught in the whirlpool of pharmaceutical anti-corruption. According to a licensed pharmacist at a pharmacy, these prescriptions were bought online and formed after continued processing.
The investigation team found tens of thousands of handwritten fake prescriptions in only four pharmacies (Jianbaijia Pharmaceutical Chain Haping Road Store, Sipai Pharmacy, Baofeng Pharmacy Shenye Store, and Shanghai Pharmaceutical Science Park Pharmacy), involving more than 100 million yuan.
According to public information from the National Health Insurance Administration, the case has been transferred to the public security organs for investigation, and some of the pharmacies involved have been suspended.
It can be said that both the amount of money involved and the details exposed in this case are amazing. Behind this case, the prospects of innovative drugs and related companies are more worthy of attention.
Another "golden rice bowl" to smash?
The fraud and insurance fraud case reported by CCTV News is actually related to the national medical insurance negotiation drug (referred to as "national negotiation medicine"), that is, the previously mentioned "soul bargaining" price reduction drugs. For these drugs and their R&D and sales enterprises, medical insurance pharmacies are the new "golden rice bowl".
The drugs involved in the case are basically high-priced special drugs (special drugs, generally high-priced innovative drugs, many of which are national drugs), and their sale and use are strictly restricted, at least they can only be purchased with a regular prescription issued by the hospital.
To a certain extent, pharmacies can sell special drugs, which is a rare opportunity for pharmaceutical companies, and it is also a "cornucopia" recognized by many companies that provide innovative drugs.
It is important to know that in earlier times, specialty drugs were mainly sold in medical institutions, and few retail pharmacies were qualified to sell them.
It was not until after 2018 that the "soul bargaining" was rapidly pushed out, and a large number of "special drugs" were included in the medical insurance at reduced prices, which forced the situation to change. Because there are more and more innovative drugs in the medical insurance, they need to go through a cumbersome process and take a long time to enter the pharmacies of public medical institutions. As a result, many patients with major diseases such as cancer still do not enjoy the benefits of the policy.
In order to solve this problem, the medical insurance department launched a "dual channel" policy in 2020. This policy, simply put, is to allow designated retail pharmacies to sell national medicines in the same way as designated medical institutions. As of June this year, there have been 430 kinds of national drugs included in the "dual channel".
This method is greatly convenient for patients and opens the door to a new world in the pharmaceutical market. According to official statistics, from 2020 to 2023, the total amount of Guotan drugs sold through the "dual channel" has increased by more than 200%. Among them, the performance of pharmacies is particularly impressive.
For example, according to a data released by the Wuhu Municipal Finance Bureau, the 11 designated pharmacies in the city that have obtained dual-channel qualifications will sell 5.4025 million yuan of related drugs in 2020, 15.4851 million yuan in 2021, and 23.2465 million yuan in the first half of 2022. It's grown almost exponentially.
The speed at which avatrombopag maleate tablets involved in the case is expanding in the market is very staggering. Judging from the statistics of Minenet, the sales of the drug will increase by more than 2,000% in 2021, 123.95% in 2022, and 25.44% in 2023.
Fosun Pharma's Su Kexin is the original product of this series, which is the world's first oral drug approved for the treatment of thrombocytopenia associated with chronic liver disease, and has already been a "big drug" with annual sales of more than 900 million yuan, which is one of the company's flagship products.
In Fosun Pharma's market strategy, the "dual channel" of designated medical institutions and designated pharmacies is also an important content. According to the company's performance report for the first half of 2024, in its pharmaceutical distribution business segment, specialty pharmacies maintained a growth of more than 20%.
For pharmacies, special drugs are also a rare "fat".
In order to win more customers, some pharmacies basically do not put up obstacles. Judging from the CCTV news video, when the old man went to the pharmacy to buy medicine and was told that he had to have a prescription, he showed disbelief, apparently the pharmacy had never asked for a prescription before. According to his son, the pharmacies of the millions of patients mentioned above can prescribe drugs for three months at a time without a prescription.
It can be said that the inspection case disclosed by the National Health Insurance Bureau this time also seems to have uncovered the dark side behind this rapid growth.
With the implementation of the new regulations mentioned by the National Health Insurance Administration on January 1, 2025, if you do not operate in compliance, a "golden job bowl" that has been accidentally cultivated will be broken again.
How panicked are the pharmaceutical bigwigs?
The days of pharmaceutical companies are getting more and more difficult.
In fact, as the epidemic recedes, the problem of Fosun Pharma's development stalling has long been concerned. Objectively speaking, although it started with financial capital and many pipelines come from mergers and acquisitions, Fosun Pharma is still a leading pharmaceutical company with a variety of blockbuster drugs, and indeed holds a number of new drugs that are the first in China and even the first in the world.
For example, the CAR-T drug Yikaida (Axileucel injection) and the biosimilar Hanlikang (rituximab) in his hands are all products that fill the gap, which is Su Kexin, which is involved in this case, and is also the first domestic CLD (chronic liver disease)-related thrombocytopenia treatment drug.
In addition, there are 34 generic drugs that have passed the consistency evaluation of generic drugs or are deemed to have passed the consistency evaluation.
It can be said that in terms of "combination of imitation and innovation", Fosun Pharma is at the forefront of the country. Aside from the benefits brought by the introduction of new crown vaccines and small molecule drugs Azvudine, antigen and nucleic acid kits during the epidemic, from 2014 to 2018, the company's core product performance has been rising, and the operating income has increased by more than 34%.
However, such a good day is becoming a thing of the past with the change in the logic of the development of the pharmaceutical industry.
Medical reform, especially under the continuous promotion of medical insurance reform, the old development model of barbaric growth by relying on gold sales has been crushed and crushed by centralized procurement, national talks, DRG/DIP (medical insurance payment reform, which can be understood as packaging payment according to disease type), etc., and the public hospital drug system that dominated the market in the past is no longer a profit highland, and even many products are difficult to enter this system.
This is also an important reason why the incidence of insurance fraud cases in chain pharmacies is getting higher and higher, and the circumstances are becoming more and more serious. Fundamentally speaking, many local enterprises have not completely gotten rid of the inertia of selling with gold, and have not yet found a new development path in the field of compliance.
To make matters worse, the pressure of market competition is no longer what it used to be. Take Su Kexin as an example. As mentioned above, this drug has first-of-its-kind value in China and even in the world, and the market is also growing rapidly after entering China. However, the alluring prospect of this fast-growing product, like a fat antelope, immediately attracts wolves.
It can be seen that Su Kexin's drug was officially commercialized in China in August 2020, and by April 2022, 17 companies have submitted generic drug marketing applications. Fosun Pharma has at least 3 companies that have deployed this drug.
In addition, the price of 50.8% in a few months of official commercialization will be reduced to medical insurance, and how to obtain more profits in the shortest possible time has become the pressure on enterprises and sales representatives.
This also reflects the plight of enterprises to a certain extent. Judging from Fosun Pharma's performance report for the first half of 2024, the company's operating income and net profit both declined, down 4.36% and 31.09% respectively. If new crown-related products are not included, the year-on-year decline has further expanded to 5.31%.
Fosun Pharma and other pharmaceutical tycoons have stood at the crossroads of development.
Where is the way out?
Due to the limited domestic purchasing power, going overseas seems to be the only way out for Chinese pharmaceutical companies. Fosun Pharma also seems to be at the forefront in this regard. According to public data, in 2023, Fosun Pharma's overseas business revenue will exceed 10 billion yuan, accounting for 1/4 of its total revenue.
However, going overseas may not be a panacea to solve the difficult situation of pharmaceutical companies.
Founded in 1994, Fosun Pharma has both the common problems of traditional pharmaceutical companies and the shortcomings caused by its development model.
Analysts believe that although Fosun Pharma has a good overseas layout through mergers and acquisitions, and has also introduced a number of blockbuster products with annual sales of more than 100 million yuan, there are problems such as traditional sales model and high cost.
On the one hand, Fosun Pharma also has a situation of "emphasizing sales and ignoring R&D". In the years when its performance was growing rapidly, the selling expenses were also high. In contrast, R&D investment continues to increase, but it is less than half of the sales investment.
On the other hand, Fosun Pharma's performance growth is largely related to its foreign investment, which is also often criticized by industry insiders and investors.
From the perspective of the global market, the expansion of M&A is understandable. For example, Pfizer, in the later stage of its development, also relied on mergers and acquisitions to obtain a number of popular products, but today, when the competition for new drug research and development is becoming more and more fierce and the profit window period is shortened, if it does not pay enough attention to research and development, its prospects will be worrying. Even Pfizer is unable to get rid of the fate of sluggish growth, not to mention that Fosun Pharma's "luck" does not seem to be so good.
Fosun Pharma spent a lot of money to introduce the CAR-T product Axileucel, which has been difficult to open the market due to its high price, and finally had to launch a "payment plan based on the value of efficacy", hoping to attract more patients to use it in the form of a VAM.
Judging from the preliminary review list of this year's national talks, Axileucel and JW Therapeutics' relma-cel, Heyuan Biologics' nal-cel, and CARsgen's Zewo-gene autoleucel have all passed the formal review, or will be stabbed by the "soul" of medical insurance negotiations.
In addition, capital operation also brings some other problems. Including: internal management is not in place, and subsidiaries are frequently exposed to violations in production and sales.
Official data shows that from 2019 to 2022, the expenditure of the medical insurance fund on innovative drugs has increased by more than 7 times, but the total amount is 48.189 billion yuan, accounting for less than 2% of the total plate of 2.46 trillion yuan. Today, with the deepening of the aging population, it is foreseeable that special drugs for the treatment of serious diseases such as tumors and autoimmune diseases will sooner or later become the main target of China's medical insurance payment. And that day may not be too far away.
Because of this, the National Health Commission, medical insurance, drug administration and other departments have paid more and more attention to the standardized use of special drugs, and supervision and punishment are becoming more severe. This also means that it is no longer possible to replicate the wild growth of the past and obtain high profits.
In the future, the development of innovative drugs not only depends on the tilt of policies and funds, but also requires industry professionals to really pay attention to research and development, abandon path dependence, and build a Chinese brand in the global market with strength as soon as possible. This may be the fundamental way for pharmaceutical companies to solve the problem of survival and development.
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