It is inevitable that the cyclical oscillation crisis is approaching again
Who will save the artemisinin industry
□ Our reporter Fang Jianchun
Recently, domestic Artemisinin raw material manufacturers are suffering. Data provided by Zhejiang Medicine and Health Products Import and Export Corporation (hereinafter referred to as Zhejiang Medical Insurance) show that since June last year, the price of artemisinin raw materials has dropped from 4,200 yuan/kg to below the cost price of 2,400 yuan/kg. The entire industry is facing procurement Prices and costs are inverted, and some small and medium-sized enterprises are overwhelmed and have begun to withdraw from the market.
Ding Jianchao, artemisinin salesperson of Zhejiang Medical Insurance, said that he hopes that all parties in society will pay attention to the current predicament of the artemisinin industry, boost industry confidence, establish an industrial coordination organization mechanism as soon as possible, and stabilize the role of Chinese enterprises in the industry chain. global status.
The price of artemisinin has plummeted
Artemisinin is my country’s only drug with independent intellectual property rights, widely recognized around the world, and certified by the high-end market. It has made great contributions to the anti-malarial cause of mankind. Made an indelible contribution. However, for such a drug that is highly praised by the world, its domestic industry development has gone through a path that started with dream and passion, once developed vigorously, and now its business is bleak. In the field of preparations, currently only one domestic variety of artesunate injection (produced by Guilin Nanyang, a subsidiary of Fosun Pharma) has entered the World Health Organization (WHO) procurement catalog. Most artemisinin companies only play the role of global raw material suppliers and are at the lowest end of the industry chain.
In fact, this is not the first time that the artemisinin industry has encountered a crisis. In 2006, due to the large-scale expansion of artemisia cultivation, international orders were lower than expected. In the following two years, the artemisinin industry fell to the bottom, production companies exited one after another, farmers lost their enthusiasm for planting, and the planting area dropped sharply. In 2009, due to the sluggish industry and shortage of raw materials, the price of artemisinin soared, reaching more than 3,000 yuan/kg. In 2011, it reached as high as 5,000 yuan/kg.
Ding Jianchao said that two consecutive years of high prices since 2009 stimulated the expansion of artemisinin planting and raw material production last year. Last year, the supply of artemisinin raw materials reached about 230 tons, while global orders were about 180~ 200 tons, there will be at least 30 tons surplus on the market.
Global orders for artemisinin mainly come from two channels. One is the raw materials required for the preparation ACT entered into the WHO procurement catalog by the Swiss company Novartis, with an order quantity of about 50 tons; the other channel is various companies in India. For pharmaceutical companies, the annual order volume is about 120 tons. The remaining raw materials are purchased by formulators supplying the private market in Africa.
An official from CITIC Group responsible for the Novartis artemisinin project said that my country’s artemisinin industry has no industry organization and coordination mechanism, and industry self-discipline has not been formed. Industrial development has always been affected by price cycles, which has a negative impact on the industry. Sustainable development is extremely harmful. At present, my country's artemisinin companies have completely lost their international status at the formulation level and have become merely raw material suppliers. This is in huge contrast to the high starting point of this product with independent intellectual property rights.
As we all know, Novartis’s ACT is a preparation variety independently developed by Chinese scientific research institutions in the 1970s. It was later transferred to Novartis. According to the original agreement signed, the original research institute of ACT still charges Novartis every year. A certain fee. Novartis purchases ACT raw material artemether from Kunming Pharmaceutical.
Information asymmetry causes misjudgment
The industry generally believes that the sharp drop in artemisinin prices is not just caused by the expansion of planting and production, but intentional manipulation by international buyers. , of which India is the main controlling force.
It is understood that WHO has always advocated lowering the purchase price of artemisinin drugs. The current public market price of Novartis ACT has dropped to US$1 per person. In recent years, India has relied on its advantages in generic drugs to have several artemisinin preparations enter the WHO procurement catalog, and has gradually become the largest buyer of artemisinin raw materials in my country. However, last year, after there was a surplus of domestic artemisinin raw materials, Indian order price breaches intensified. Malicious inquiries and price reductions abounded. Domestic companies were eager to sell, causing the price of artemisinin to plummet, even below the cost.
The above-mentioned CITIC Group people believe that India’s price reduction and contract breaking is just a symptom of this wave of sharp price drops. Information asymmetry after 2009 is the main reason for domestic corporate market expectations being greater than actual orders. He pointed out that in 2010, major changes occurred in the global procurement of artemisinin preparations - in addition to the public market procurement supported by the WHO Bill Gates Fund, another procurement mechanism AMFM was established with support from the Global Fund. This procurement mechanism mainly targets the private market and strives to reduce the purchase price in the private market. It uses corporate subsidies to reduce the price per person in the private market to US$1. This procurement mechanism triggered demand in the private market. Therefore, the procurement volume of artemisinin preparations increased significantly in 2010 and 2011, and the demand for raw materials also increased significantly. However, domestic companies have ignored a very important point, which is that the mechanism has clearly proposed to be tried within three years since its establishment. In 2011, the main person in charge of the mechanism was exposed to corruption issues, and there were also problems with fund raising. The dominant idea of ??AMFM in 2012 is to stabilize the market, which means that orders led by this mechanism will no longer grow wildly.
Lin Ting, general manager of Bidi Zhengtian, the largest supplier of artemisinin raw materials in China, said that last year, judging from the total amount of raw materials and the number of orders in the domestic market, there was no serious surplus, mainly due to international orders. If it does not meet expectations, companies have a selling mentality, and India is adding fuel to the fire. In addition, farmers have generally planted high-content wormwood seeds in the past two years. Compared with the original wild wormwood, the extraction rate has increased by three to four thousandths, which is also one of the reasons for the reduction in raw material prices.
It is reported that during the wormwood harvest season in July and August last year, some domestic raw material companies even went to Vietnam to grab grass. The seriousness of the misjudgment caused by the asymmetry of market information is evident.
The real danger is coming
Recently, the International Artemisinin Industry Conference just concluded in Kenya, and Lin Ting participated in the conference as a representative of China. She said that currently, my country's artemisinin industry is at an inflection point in its development, either moving toward standardization and self-discipline, or toward disorderly self-destruction. In fact, the international market pays special attention to my country's artemisinin industry. They hope that China's artemisinin industry will be standardized and develop in an orderly manner, with prices and output remaining relatively stable.
In fact, the real danger is approaching our country’s artemisinin industry. Semi-synthetic artemisinin funded by WHO has been successfully developed by Sanofi. Although the current cost of semi-synthetic artemisinin is still relatively high, once the technology matures and large-scale industrialization is successful, it will have a huge impact on the raw materials of artemisinin obtained from plant extraction, and it will also get rid of the constraints of raw material supply affected by planting. .
“In three or at most five years, semi-synthetic artemisinin will definitely compete with plant-derived artemisinin. This is the biggest challenge facing China’s artemisinin industry.” A person from CITIC Group explain.
Ding Jianchao said that my country’s artemisinin companies have reached an important moment of decision. It is urgent to choose standardized development and move forward together. "In fact, after experiencing the trough in 2006, the concentration of the industry has increased significantly. Currently, there are only 13 raw material production companies in the country, and the top 4 to 6 account for 80% of the market share. As long as these companies unite and regulate development, it will be It is entirely possible to maintain an international position in raw materials. Even if the semi-synthetic artemisinin technology matures, it will not completely replace plant-derived artemisinin. If vicious competition among companies continues and they kill each other, the artemisinin industry will be in trouble. There is really no hope.”
It is reported that the Ministry of Commerce once wanted to establish an artemisinin industry organization, but it has not been implemented due to various reasons. Relevant people from the China Chamber of Commerce for Import and Export of Medicines and Health Products said that they have come forward many times in the past to coordinate the artemisinin price issue and called on companies to self-discipline, but with little effect. This also gives the Chamber of Commerce a headache.
How can the eggs be completed under the whole nest? When my country's artemisinin preparations lose the opportunity to enter the international market, raw material orders can only be controlled by others; when international giants are eyeing a share of the raw material market share, only self-improvement, self-discipline, and standardization can save themselves.
What makes Ding Jianchao somewhat gratified is that recently, major domestic artemisinin companies have taken measures to rescue the market. The sell-off has decreased and the mentality has stabilized. The price of artemisinin has increased from 330 US dollars/ Kilogram increases to about $360.
Reporter’s Notes:
I have been following artemisinin industry reports for more than 6 years. These six years have been the development process of the domestic artemisinin industry from peak to trough. Every time I write, my mood rises and falls.
Cyclic price fluctuations are a prominent feature of my country’s API industry, and its harmful effects on the industry are self-evident. Its essence is disorderly development and a lack of industry self-discipline. From the perspective of artemisinin varieties, my country has the right time, location, and people. However, due to the chronic disease of disordered development, the industry is still in trouble.
At that time, many high-spirited people with lofty ideals had left, and even an old man who had devoted his life to artemisinin research felt sad. Why is artemisinin, an original drug that has made great contributions to the anti-malarial cause of mankind, struggling to develop in China and basically becoming a raw material supplier for Novartis and Indian companies? Artemisinin leaves us with too much to think about.
Some people say that artemisinin is a small species and it makes sense that it does not attract attention. In fact, in the face of human diseases, different drugs have equal status, and their value cannot be measured in terms of money. Yesterday, artemisinin was the face of China's pharmaceutical industry, and today it should not be left out in the cold. Artemisinin exporting abroad should not only be raw materials. China should have a place in the international market of artemisinin preparations.
We hereby call on enterprises to boost their confidence and abandon short-sightedness; we call on all competent authorities to pay attention to Artemisia annua and provide policy guidance to bring the industry onto the track of healthy development.