Next year, the four major areas of medicine will breed investment opportunities, and the industry will return to the market to accelerate.

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In 2014, for most Chinese pharmaceutical companies, there is still a sense of winter, with declining growth, declining profits and weak marketing. Nevertheless, the sound of the ice cracking can be heard faintly, and the allocation of resources in the two major areas of drug pricing and medical services is accelerating back to the market.
At present, the valuation premium rate of the pharmaceutical sector relative to the market is significantly lower than that at the beginning of the year, but the absolute valuation is still at the high level of the last two years. In this context, in 2015, the pharmaceutical sector will be seriously divided, and investment opportunities will be brewing in the four new changes of new pattern, new technology, new model and new service.
Industry Return to Market Acceleration
In 2014, the pharmaceutical industry was a year of reduced administrative intervention and returned to the market. Drug pricing policy, bidding policy, use policy and health insurance payment policy constitute the four external forces of the industry.
Over the years, the management of prices, bidding and access in China's pharmaceutical industry has made the government's hand deeper and deeper. In 2014, this tangible clamp began to loosen, and various ministries and commissions successively issued nearly 20 policies to change the development of the industry, involving sub-industries such as children's medicine, medical devices, and medical services. Among them, the adjustment of pricing policy and the access reform of social medical services have a significant impact on the development of the industry.
In terms of pricing policy reform, at the end of November, the draft of the National Development and Reform Commission's ''Plan for Promoting Drug Price Reform'' was issued to various pharmaceutical industry associations, stating that it intends to abolish the government's maximum retail price limit or ex-factory price of drugs, and through medical insurance control fees and bidding procurement, the actual transaction of drugs The price is formed by market competition and is planned to be implemented from January 1, 2015.
The centralized bidding policy has also begun to show signs of loosening. In the newly launched new bidding policy, the "only low price is to take" policy of many provinces began to change, the quality weight began to rise, and the news of classified procurement began to spread. However, compared with the price policy reform, the change of bidding still has no clear direction.
It is gratifying that the pace of drug price reform is still moving forward. In November, Chongqing and Sanming successively launched the pilot work of the benchmark price of medical insurance payment. If the method of fixed payment according to the type of disease can be implemented, this may be a fatal blow to the centralized bidding system. By then, hospitals can negotiate prices directly with pharmaceutical companies, and administrative intervention will be less and less.
In addition to drug policy changes, the medical service industry is also an aspect of the high-level promotion of the marketization of the industry. In April, the National Development and Reform Commission, the Health Planning Commission, the Ministry of Human Security jointly issued a policy to completely liberalize the price control of non-public medical institutions. In June, the National Health Planning Commission issued a document for the first time to control the rapid expansion of public hospitals. Some local governments are more enthusiastic about promoting private capital to enter the medical service market. In July, Beijing issued the "Administrative Measures for the Multi-point Practice of Physicians in Beijing"; in November, Shenzhen issued the "Shenzhen Special Economic Zone Medical Regulations (Draft for Comment)", which intends to abolish the restrictions on the first place of practice for doctors.
The enthusiasm of the government has also led to the enthusiasm of non-public capital. Since last year, from financial capital to industrial capital, all kinds of funds began to compete non-stop in the public hospital acquisition battlefield. Wuhan Jianmin, Kunming Pharmaceutical and many other pharmaceutical companies have a clear direction of investment in medical services, Vanke, Evergrande and other real estate enterprises began to prepare for the construction of their own hospitals, Beijing United Family opened a number of branches. At the end of the year, two top private hospitals, Peking University International Hospital and Tsinghua Chang Gung Memorial Hospital, which had been planned for many years, opened one after another, putting a perfect footnote on the first year of the private hospital.