China-Singapore Jingwei, December 11th: "In October, I got hundreds of boxes of Lianhua Qingwen capsules through friends in the pharmacy, thinking about selling them to the neighbors, but no one wanted them. This They have been robbed for several days, and some people still charge high prices," a Beijing citizen told Sino-Singapore Jingwei.
Lianhua Qingwen has been popular for three years, and recently it has become so popular that it is out of stock. In offline pharmacies and drug e-commerce platforms, Lianhua Qingwen has developed to the point where it is difficult to find a single drug, and some citizens even reported that the drug price has skyrocketed240.
Another drugstore distributor located in Shijiazhuang told Sino-Singapore Jingwei: "One store sold 400,000 boxes a day, and the boxes were empty. They just piled them up in the store and started to unpack the boxes and sell them instead of putting them on the shelves. The workers are working overtime to produce.”
Yiling Pharmaceutical Industrial Park Source: Provided by interviewee
The reason behind the explosive sales of Lianhua Qingwen is its manufacturer Yiling Pharmaceutical. The company has also become a star among listed pharmaceutical companies, and investors have pinned their hopes on it becoming the next "Moutai of medicines" after Pien Tze Huang. From September 26 to December 9, Yiling Pharmaceutical's closing price rose from 18.83 yuan per share to 50.88 yuan, and the stock price increased by 170. In recent trading days, Yiling Pharmaceutical's average daily turnover has exceeded 10 billion yuan, beating Moutai and Wuliangye. How did Lianhua Qingwen become a hit? What is the threshold for expanding production capacity? What kind of company is Yiling Pharmaceutical behind it?
"The richest academician of A-shares"
The full name of Yiling Pharmaceutical is Shijiazhuang Yiling Pharmaceutical Co., Ltd., which was founded on June 16, 1992, "Yiling" The two words come from its founder Wu Yiling. With the skyrocketing share price of Yiling Pharmaceuticals, Wu Yiling is also known as "the richest academician of A-shares."
According to public information and media reports, Wu Yiling was born in a family of traditional Chinese medicine in Gucheng County, Hebei Province in 1949. He began to follow his father for diagnosis and treatment when he was about 17 years old. After the college entrance examination was resumed in 1977, Wu Yiling was admitted to Hebei Medical University and then to Nanjing University of Traditional Chinese Medicine as a graduate student. After graduation, he was assigned to work in the Department of Cardiovascular Medicine, Hebei Provincial Hospital of Traditional Chinese Medicine.
Wu Yiling picture source: Yiling Pharmaceutical official website
In 1992, Hebei Province established a high-tech development zone, and Wu Yiling founded the Shijiazhuang Development Zone Pharmaceutical Research Institute, which is Yiling Pharmaceutical The predecessor of the industry.
In 2009, Wu Yiling was elected as an academician of the Chinese Academy of Engineering. In 2011, Yiling Pharmaceutical was listed on the A-share market. "When an enterprise develops to a certain stage, it is natural to go public." Wu Yiling once said.
From the perspective of ownership structure, Yiling Pharmaceutical is a typical family business. According to the 2022 semi-annual report, Yiling Pharmaceutical Technology Co., Ltd. controlled by Wu Yiling 100 is the largest shareholder of Yiling Pharmaceutical, with a shareholding ratio of 31.51; his son Wu Xiangjun holds 20.81 shares, and his daughter Wu Rui holds 2.34 shares. Sister Wu Xizhen holds 0.36 shares. It is not difficult to see that as persons acting in concert, the Wu family firmly holds control of the company.
Yiling Pharmaceutical’s management also includes several members of the Wu family. For example, Wu Yiling is the chairman of Yiling Pharmaceuticals, Wu Xiangjun is the director and general manager, Wu Rui is the director and secretary of the board of directors, and the financial director Li Chenguang is Wu Yiling's nephew.
The "2022 Hurun China Rich List" shows that the Wu Yiling family ranks 235th on the list with a wealth of 23 billion yuan, a ranking that has increased 128 places compared with 2021. In 2019, before the start of the COVID-19 epidemic, the Wu Yiling family's wealth was 8.5 billion yuan, and its wealth increased by 14.5 billion yuan in three years.
Source of data map: Hurun Report official website
Although the public may only know Yiling Pharmaceutical because of Lianhua Qingwen, this is not the only business of Yiling Pharmaceutical Single item. Public information shows that Yiling Pharmaceutical has three major business segments, namely chemical biopharmaceuticals, health industry and patented traditional Chinese medicine.
The contribution of the first two business segments to the company was not disclosed in detail in the financial report. Judging from the 2022 semi-annual report, the revenue of other patented products and other categories was 188 million yuan and 551 million yuan respectively, accounting for a small proportion of the total revenue, 3.37 and 9.91 respectively.
The core of the three major sectors is the patented traditional Chinese medicine sector, which covers cardiovascular and cerebrovascular diseases, cold and respiratory diseases, diabetes, nervous system, tumor drugs and other fields.
Before the COVID-19 epidemic, Yiling Pharmaceutical’s best-selling products were Chinese patent medicines targeting cardiovascular and cerebrovascular diseases, with the main representatives being Tongxinluo Capsules and Shensong Yangxin Capsules. For cold respiratory diseases, the main product launched by Yiling Pharmaceutical is Lianhua Qingwen capsules/granules. Lianhua Qingwen was developed during the SARS period, but was only approved for production and marketing in May 2004, by which time the SARS epidemic had dissipated.
According to the prospectus of Yiling Pharmaceutical, from 2008 to 2010, the sales amount of cardiovascular and cerebrovascular drugs were 847 million yuan, 1.098 billion yuan and 1.514 billion yuan respectively, with the proportions of 91.08 and 67.62 respectively. and 92.26, while the sales amount of anti-cold drugs accounted for only 7.04, 31.16 and 4.58.
After the outbreak of the new crown epidemic, Lianhua Qingwen has caused several controversies. From being recommended by the WHO, to being questioned by Wang Sicong, and now being sold out, Lianhua Qingwen has also given up to Yiling. The pharmaceutical industry makes a lot of money.
From 2020 to the first half of 2022, the revenue of Yiling Pharmaceutical’s anti-cold drugs was 4.256 billion yuan, 4.108 billion yuan, and 2.553 billion yuan respectively, accounting for 1% of Yiling Pharmaceutical’s revenue. The ratios reached 48.46, 40.60, and 45.87 respectively, and their contribution to the company’s revenue has surpassed that of cardiovascular and cerebrovascular drugs.
Is it a "magic medicine"?
What are the functions of Lianhua Qingwen Capsules? According to the "Reference Table of Commonly Used Drugs for Home Treatment of Patients with New Coronavirus Infections" issued by the Joint Prevention and Control Mechanism of the State Council on December 8, Lianhua Qingwen Capsules are suitable for patients with fever symptoms, together with ibuprofen, Xuanfei Baidu Granules, and Qingwen Qingwen Capsules. Fei Baidu granules and so on. It is mentioned in the "Diagnosis and Treatment Plan for Novel Coronavirus Pneumonia" that Lianhua Qingwen Capsules can be used to treat some patients during the medical observation period, some mild cases, and some ordinary cases.
It can be seen that Lianhua Qingwen Capsule is not a "specific drug" for the new coronavirus, but a symptomatic treatment drug with certain indications. It is written in its drug instructions that the drug is used to treat influenza, which is caused by heat poison attacking the lungs. Indications include fever or high fever, aversion to cold, muscle aches, nasal congestion and runny nose, cough, headache, dry and sore throat, red tongue, yellow or greasy coating, etc.
Guo Ruichen, a professor at Qilu Hospital of Shandong University and a doctoral supervisor in clinical pharmacology, told Sino-Singapore Jingwei reporters that Lianhua Qingwen Capsules can be used for the symptomatic treatment of mild or common new coronavirus pneumonia and can help improve fever, flow, and diarrhea. It can cause symptoms such as runny nose, cough, headache, dry throat and sore throat, but it is by no means a "miracle medicine".
Guo Ruichen believes that Lianhua Qingwen granules/capsules and other new coronavirus pneumonia home reference Chinese patent medicines, such as Jinhua Qinggan granules, Xuanfei Baidu granules, Qingfei Paidu granules, Shufeng Jiedu capsules and other heat-clearing and detoxifying granules The prescriptions of Chinese patent medicines are mostly the same. Its composition and preparation process are relatively common.
At the same time, Guo Ruichen reminded that Lianhua Qingwen Capsules can only be used for symptomatic treatment of mild patients and are not suitable for critically ill patients.
Regarding the problem of some people hoarding medicines and taking preventive medicines, a pharmacist from a tertiary hospital reminded reporters from Sino-Singapore Jingwei that this medicine can be used without being infected with the new coronavirus. It needs to be based on the patient’s constitution and the time of onset. , medication should be used according to the progress of the disease, especially for children. Taking medication hastily is more likely to be counterproductive. If medication is not used properly, it can easily lead to drug abuse.
“It is not recommended to use Lianhua Qingwen for prevention. Lianhua Qingwen capsules contain moxibustion ephedra. It can be eaten but requires dialectical treatment. The drug also has certain adverse reactions, such as high blood pressure, colds, spleen and stomach. It is not suitable for patients with weak and cold conditions,” the pharmacist reminded.
Source of data map: Photo by Dong Xiangyi of Sino-Singapore Jingwei
The official website of the State Food and Drug Administration shows that Lianhua Qingwen is an exclusive variety of Yiling Pharmaceutical. There are three dosage forms of Lianhua Qingwen approved by the State Food and Drug Administration. Lianhua Qingwen capsules are Category A OTC; Lianhua Qingwen granules and Lianhua Qingwen tablets are both prescription drugs.
According to the "Announcement on Protected Varieties of Traditional Chinese Medicine" issued by the State Food and Drug Administration, Lianhua Qingwen is included in the protected variety of traditional Chinese medicine, with a protection level of Level 2.
China-Singapore Jingwei noted that compared with the first level of protected traditional Chinese medicine varieties, the second level is relatively common. The "Regulations on the Protection of Traditional Chinese Medicine Varieties" shows that the prescription composition and manufacturing process of the first-level protected varieties shall be kept confidential within the protection period by the enterprises and relevant units that have obtained the certificates and shall not be made public. At the same time, necessary confidentiality systems are required to be established. These include Yunnan Baiyao, Pien Tze Huang, etc.
For secondary protection, the regulations state that the varieties of traditional Chinese medicines approved for protection will only be produced by companies that have obtained the "Certificate of Protected Types of Traditional Chinese Medicines" during the protection period, which means that protected companies only have In a partial sense, production exclusivity cannot be expanded by generic pharmaceutical companies like original Western medicines that have lost their patent protection period, and the degree of production capacity improvement is limited. Calculated based on the protection dates announced by the above regulations, the start and end dates of its protection are from September 6, 2013 to September 6, 2020, that is, Lianhua Qingwen may no longer have secondary protection.
However, Yiling Pharmaceutical also applied for a patent for Lianhua Qingwen. According to the prospectus, Lianhua Qingwen’s parent patents and sub-patents will expire one after another from 2023 to 2030, but the patent dates may continue to expand. Yiling Pharmaceutical disclosed in its 2021 annual report that the patent authorized by Lianhua Qingwen will protect the product until 2040.
The sales peak is closely related to the epidemic
Sino-Singapore Jingwei noticed that the sales peak of Lianhua Qingwen in the past history was closely related to the epidemic and the flu season, and its own research and development process was also closely related to the epidemic. closely related to the epidemic.
According to public information, Lianhua Qingwen Capsules were the first new traditional Chinese medicine to enter the national drug review green channel during the anti-SARS period to treat colds and fight the SARS virus. Its launch date was May 9, 2004.
On April 30, 2009, China classified Influenza A (H1N1) as a Class B infectious disease and was managed in accordance with Class A infectious diseases. The sales volume of Lianhua Qingwen increased from 176 million pills in 2008 to 1.382 billion pills in 2009, and sales surged from 60 million yuan to 500 million yuan, a year-on-year increase of 670.
According to the prospectus, in 2010, with the effective control of the influenza A epidemic, dealers had a large inventory of Lianhua Qingwen capsules, and the market was mainly in the inventory digestion stage. Lianhua Qingwen sales Revenue is down.
The sales data provided by Zhongkang CMH to Sino-Singapore Jingwei show that during the current COVID-19 epidemic, Lianhua Qingwen achieved good sales. As far as the retail market is concerned, Lianhua Qingwen's sales in 2020 were 3.431 billion yuan, a year-on-year increase of 167.1%, and the public hospital terminal market sales were 700 million yuan, a year-on-year increase of 38.90%.
Why does it sell so much during an epidemic? Sino-Singapore Jingwei noticed that, first, Lianhua Qingwen frequently entered the national diagnosis and treatment plan; second, Lianhua Qingwen actively carried out clinical trials and disclosed the results; third, Yiling Pharmaceutical promptly built knowledge for Lianhua Qingwen Property rights barriers.
As for the first point, during the spread of influenza A, on May 9, 2009, the Ministry of Health released the first version of the "Diagnosis and Treatment Plan for Human Infection with Influenza A (H1N1)" to the public. Lianhua Qingwen ranks first among Chinese patent medicines. Since then, Lianhua Qingwen has frequently entered influenza diagnosis and treatment guidelines, and during the current COVID-19 epidemic, Lianhua Qingwen was included in the "Diagnosis and Treatment Plan for Pneumonia Infected by Novel Coronavirus" and other diagnosis and treatment plans.
At the same time, Yiling Pharmaceutical actively promotes Lianhua Qingwen to conduct relevant clinical trials, endorses the drug through its exact therapeutic effect, and increases sales of the drug by increasing indications. Lianhua Qingwen There are more and more names of viruses that work.
It is worth noting that when some medical institutions conduct research related to Lianhua Qingwen Capsules, they often use combination medication to conduct retrospective studies. For example, Lianhua Qingwen is combined with oseltamivir to treat influenza; it is combined with lopinavir/ritonavir, combined interferon, Arbidol tablets and other antiviral western medicines to treat COVID-19.
This type of combination is mentioned in the "Diagnosis and Treatment Plan for Novel Coronavirus Pneumonia" issued by the National Health Commission, which clearly states that for the drug treatment of COVID-19, it is recommended to empirically use antiviral drugs and Symptomatic and combined use of traditional Chinese medicine preparations.
Sino-Singapore Jingwei noticed that Yiling Pharmaceutical also paid great attention to the intellectual property protection of Lianhua Qingwen. Yang Shanshi, deputy director of the Medical Science and Technology Information Research Department of the Shanghai Hygiene and Health Development Research Center, introduced to Sino-Singapore Jingwei that Yiling Pharmaceutical Technology Co., Ltd. has 40 patent records related to Lianhua Qingwen. In addition to its patent layout in China, it also contributes to the world’s knowledge WIPO submitted 2 PCT invention applications. Judging from the legal status and patent type, they included 3 authorized inventions and 8 invention applications.
During this epidemic, Yiling Pharmaceutical also applied for a patent titled "Application of a traditional Chinese medicine composition in anti-coronavirus, organ protection, and immunity-improving drugs." Currently in "under review" status.