Research On The Impact Of National Centralized Drug Procurement On The Business Performance Of Hengrui Pharmaceuticals

In recent years,China’s medical expenditure and per capita medical expenses have continued to rise,drug prices have been inflated.People’s "difficult and expensive medical treatment" has become a social problem that cannot be ignored.Premier Li Keqiang made a clear request at the executive meeting of the State Council that "the price of medicines should be taken as a breakthrough for deepening the medical reform." On November 14,2018,the fifth meeting of the Central Committee for Comprehensively Deepening Reform reviewed and approved the Pilot Plan for Centralized Drug Procurement Organized by the State,which clarified the general idea of centralized medicine purchase based on state organizations,alliance procurement and platform operations.This has brought a huge impact on the pharmaceutical industry.For pharmaceutical companies which mainly produce generic drugs,the centralized procurement policy reduces the profit margin of the company.However,for companies that mainly produce innovative drugs,the centralized procurement policy reduces the unnecessary cost of drug sales,so that enterprises can invest more money in the research and development of new drugs.So,has the national centralized drug procurement policy had a significant influence on the results of operation of related companies? This is the focus of this paper.On the basis of sorting out the national centralized drug procurement system,this paper takes Hengrui Pharmaceutical as a case company,focuses on examining the changes in the company’s R&D capabilities and sales expenses before and after the implementation of the centralized drug procurement policy,and deeply analyzes the impact of the centralized drug procurement policy on the performance of Hengrui pharmaceutical.The study found that from the current point of view,centralized drug procurement is not conducive to the growth of corporate performance,but the policy promotes the rapid transformation of enterprises to R&D and innovation.Hengrui actively reduces marketing expenses,which will promote corporate performance in the long run.Through the case analysis,this paper argues that pharmaceutical companies should strengthen R&D and technological innovation to adapt to changes in national drug procurement policies.At the same time,as the the policy goes on,we should continue to optimize the drug price formation mechanism,strengthen the drug quality management and effective market supervision,and promote the healthy development of China’s pharmaceutical industry.This paper analyzes the economic consequences of the medicine policy based on specific company cases,which not only enriches the literature on government drug procurement policy research,but also has important theoretical implications for objectively evaluating the national centralized drug procurement policy and improving the R&D and innovation capabilities of pharmaceutical companies...