Why Pharma Gathering Leads to Falling Stock Prices

Why does pharma collection cause stock prices to fall?

The impact of this collection on pharmaceutical companies will gradually turn positive. This collection of most of the drug varieties, before this are foreign enterprises dominated varieties. In the context of domestic alternatives, the negative impact of the collection is the most serious foreign pharmaceutical companies, Chinese pharmaceutical companies are the beneficiaries.

Despite this, but the bidding of a number of companies in recent days, the stock price is not good. From the previous bidding enterprises, the company is facing the possibility of not winning the bidding as well as winning the bidding after the decline in product prices, resulting in slower growth or even decline in operating results. In short, in or out is a problem.

What is the meaning of drug collection?

Pharmaceutical collection is actually the meaning of centralized purchasing of drugs, is to strengthen the supervision and management of the centralized bidding and purchasing of drugs for medical institutions, to curb the purchase and sale of drugs in the possible unlawful acts, to ensure that the centralized bidding and purchasing of drugs for medical institutions to standardize the procurement regulations and the orderly implementation of the work.

Centralized bidding and purchasing of medicines for medical institutions must follow the principles of openness, fairness, impartiality and honesty, and accept the supervision of the relevant government departments, society and public opinion. The parties involved in centralized bidding and purchasing of medicines must strictly abide by the relevant regulations, policies and work norms of centralized bidding and purchasing of medicines for medical institutions.

What are the benefits of centralized purchasing of medicines?

There are several benefits:

1, drug price reduction and quality assurance. Specifically, it can squeeze out the water of drug prices, reduce the burden of medication, promote drug accessibility, improve the quality of medication, and enhance the level of protection.

2, volume purchasing, recruitment and procurement in one. The core of the centralized purchasing of medicines organized by the state is the contractual commitment to complete the agreed purchasing volume within the purchasing cycle, through the volume for price, to ensure the use of clear market expectations of the pharmaceutical enterprises, so that they do not have to do all kinds of marketing work for the drugs into the hospital to reduce the cost of sales, and to squeeze out the real space of the inflated price of medicines.

3, government organization, alliance procurement. By formulating rules and strengthening safeguards to guide enterprises to engage in fair competition on the basis of cost and quality, the market-led drug price formation mechanism will continue to be improved. At the same time, the quality and efficacy of similar medicines "compete on the same stage", to avoid the bidding process of "bad drugs to expel good drugs" phenomenon.

4, improve the industry ecology, reduce costs and promote research and development. Part of the enterprise in the collection, a number of products selected, due to the high degree of implementation of procurement, the cost of goods sold fell sharply, the timely return of the payment, giving the enterprise a great deal of confidence, and at the same time actively innovate and develop new products, research and development enthusiasm greatly improved.

5, reduce the cost of sales, stabilize market expectations, promote product development, centralized purchasing like a lever, prying industry change, changing the ecology of the pharmaceutical industry.