Guotai Junan: The favorable policy on innovative drugs is expected to continue to promote the collection of proprietary Chinese medicines or welcome accelerated expansion

The Zhitong Finance App learned that Guotai Junan released a research report saying that with the support of the entire chain, many favorable policies for innovative drugs have been introduced one after another in various regions, and it is expected that subsequent favorable policies will continue to advance. Among them, the 2024 national medical insurance drug catalogue adjustment work was officially launched in July, and negotiations are expected to be completed and the results announced in November. In terms of procurement, the tenth batch of chemical pharmaceuticals is expected to start and issue relevant rules in 24Q4, and enter the substantive bidding stage at 25Q1. The third batch and the first batch of expanded procurement of the National Federation of Proprietary Chinese Medicine began to be reported in October. Q4 or relevant collection documents may be issued, superimposed on collection in Anhui and other provinces. It is expected that the collection category will expand at an accelerated pace.

Guotai Junan's main views are as follows:

The direction of policy support for innovative drugs remains unchanged, and national negotiations are expected to promote a new round of release

With the support of the whole chain, a number of favorable policies for innovative drugs have been introduced in various regions, and it is expected that subsequent favorable policies will continue to advance. Among them, the 2024 national medical insurance drug catalogue adjustment work was officially launched in July, and negotiations are expected to be completed and the results announced in November. In recent years, health insurance negotiation rules have become more scientific and reasonable. New domestically produced drugs with sufficient clinical evidence and clear patient benefits are expected to be successfully negotiated and sold in volume.

Chemical drug collection is expected to be stable, and proprietary Chinese medicine collection may be expanding at an accelerated pace

The tenth batch of chemical pharmaceuticals is expected to start and issue relevant rules in 24Q4, and enter the substantive bidding stage at 25Q1. Currently, there are 136 varieties that have not been included in collection and the competitive pattern is greater than 5 companies. The conditions for inclusion in the tenth batch of national collection are initially in place. The average price reduction for the 9 batches of 11 harvests that have already been implemented has reached 55%. There has been no significant fluctuation in the price reduction rate in the past two years, and the impact on performance is expected to be limited.

The third batch and the first batch of expanded procurement of the National Federation of Proprietary Chinese Medicine began reporting in October. Q4 or relevant collection documents were issued, adding collection in Anhui and other provinces, and the collection category is expected to accelerate; Shandong Province is leading the collection of Chinese medicine tablets and is expected to release relevant documents in 24Q4, but the collection is difficult and the amount is not high, and the impact on performance is expected to be limited.

The normalization of equipment collection is being promoted, and the market share of leading domestic manufacturers has increased

IVD collection: Biochemical liver function harvesting has been fully implemented. Biochemical kidney function, immune infectious disease, and hormone emission collection will be carried out one after another in 24H2. Biochemical sugar metabolism collection and immunosuppression sampling are expected to be launched in 24Q4. As the collection of related categories progresses, domestic leaders are expected to expand their market share and accelerate import substitution with cost-effective advantages.

Collection of high-value consumables: National procurement of artificial lenses and sports medicine is fully implemented; continuous procurement of the Interprovincial Federation for Physiology is expected to be carried out in 24Q4 or 25Q1. The overall collection rules can be expected, and the marginal impact is decreasing, but we still need to pay attention to the impact on specific categories.

Medical equipment renewal is expected to be implemented in 2024Q4

Some provinces and cities have successively introduced medical equipment renewal plans. As of September 20, equipment renewal requirements of more than 20 billion yuan have been reported. Most of them are in the stage where the feasibility reports have been approved, and procurement intentions have already been announced for over 4 billion medical equipment renewal projects. It is expected that some projects will announce procurement intentions one after another from the end of 2024 to 2025 and begin to promote procurement.

Policy tightening expectations have been formed in Q3, and Q4 expectations are relatively stable. It is recommended to innovate and improve the main line

Equal emphasis is placed on innovation and commercialization, focusing on segment leaders with significant product differentiation advantages and high innovation attributes. Biotech: BeiGene (06160), Cinda Biotech (01810), Kangfang Biology (09926), Colenbott Biotech (06990), Hehuang Pharmaceutical (00013), Nuocheng Jianhua (09969), Connor (02162); Pharmaceutical companies: Hengrui Pharmaceutical (600276.SH), Enhua Pharmaceutical (002262.SZ), Huadong Pharmaceutical (000963.SZ), Osecon (002755.SZ), etc.

2024Q4-2025H1 orders and growth are expected to recover: Mindray Healthcare (300760.SZ), new industries (300832.SZ); stable performance expectations: Huitai Healthcare (688617.SH), Ed Biotech (300685.SZ).

Risk warning: The price reduction for collection has exceeded expectations, and the implementation time of the policy is uncertain.