In order to encourage the development of the pharmaceutical industry and reduce the cost of medication for patients, on November 21, 2022, the Ministry of Finance and other departments jointly issued the "About the Release of the Third Batch of Anti-Cancer Drugs and Rare Disease Drugs Subject to Value-Added Tax Policies" Announcement" (hereinafter referred to as the "Announcement"). According to the announcement, starting from December 1, 2022, for the drugs in the list, the domestic link can choose to calculate and levy value-added tax according to the simple method of 3, and the import link will be levied a reduced value-added tax of 3.
In the above-mentioned "tax reduction list", there are many CAR-T drugs Akilenza and Regiolonza with a single price of more than one million yuan, as well as the PD-1 drug Penopril Star products such as monoclonal antibodies and BTK inhibitor orelabrutinib.
In this regard, Li Jianjie, senior investment adviser of Jufeng Investment Consulting, told a reporter from Securities Daily that the above-mentioned tax reductions are targeted at major and difficult diseases such as rare diseases and cancer. Patients need to take medicine for a long time and the drug price burden is high. High, including drugs related to such major and difficult diseases into the applicable value-added tax will help reduce drug prices and reduce patients' medical burden. The scope of application is expected to be further expanded in the future, benefiting more patients.
The "tax reduction list" continues to expand
Since 2018, my country has announced two batches of lists of anti-cancer drugs and rare disease drugs that are subject to value-added tax policies.
Among them, the first batch of drug lists includes: the "Notice on the Value-Added Tax Policy for Anti-Cancer Drugs" released in 2018, involving 103 preparation drugs and 51 APIs. The "Notice on the Value-Added Tax Policy for Rare Disease Drugs" released in 2019 involves 21 rare disease drugs and 4 APIs; the "Second Batch of Anti-Cancer Drugs and Rare Disease Drugs List Subject to Value-Added Tax Policy" released in 2020 ", 39 varieties of anti-cancer drug preparations and 14 varieties of rare disease drug preparations have been added to the "tax reduction list".
According to the reporter’s understanding, in the “Third Batch of Anti-cancer Drugs and Rare Disease Drugs Applicable to Value-Added Tax Policies” (referred to as the “List”) jointly issued by the Ministry of Finance and others, 45 anti-cancer drugs, 19 rare disease drugs and 7 APIs entered the market, most of which were star products approved in the past two years.
For example, Fosun Kite’s Akilenza Injection is the first domestic CAR-T cell therapy product officially approved for sale by the State Food and Drug Administration on June 23, 2021; WuXi Junuo’s Rui Cheolense Injection is the second CAR-T cell therapy product approved in China on September 3 of the same year; Rongchang Biological's Class 1 new drug vedicitomab was approved for marketing in June 2021, becoming the first in my country Self-developed ADC drugs.
“According to my country’s tax policy, the value-added tax rate for imported drugs is 13.” Dongfang Gaosheng’s financial director Yang Xiuren told reporters that if the cost and selling price are the same, you can enjoy the value-added tax discount. Increase the company's profit margins.
Relevant companies are testing the specific impact
In response to the above announcement issued by the Ministry of Finance and others, a reporter from "Securities Daily" contacted a number of companies involved in the above-mentioned "List" drugs. Regarding this According to the news, many companies said that the specific impact is still being calculated.
Yang Xiuren told a reporter from Securities Daily, "Drug price reductions depend on corporate decisions and the price elasticity of drugs. When reducing drug prices, we must consider whether the increase in sales can offset the impact of the decline in gross profits. This requires precision. "Calculation."
In the above-mentioned "List", the ones that have attracted much attention are the "sky-high-priced anti-cancer drugs" and CAR-T products Agilent and Recchio that sell for more than one million yuan each. Lunsai. According to the "List of Drug Applications that Passed the Formal Review of the 2022 National Basic Medical Insurance, Work Injury Insurance and Maternity Insurance Drug Catalog Adjustments" announced by the National Medical Insurance Administration on November 16, Ruiji Aolunzai Injection has entered the new version of the medical insurance catalog application list. Last year, Fosun Kite's Akilenza injection passed the preliminary formal review, but ultimately did not enter formal negotiations.
The above two CAR-T products enjoy preferential value-added tax policies. Will this lead to product price reduction?
In response to this, WuXi Junuo responded to an interview with a reporter from Securities Daily and stated that the company has also noticed the release of the above announcement and that Ruigensi is included in the list of anti-cancer drugs. Relevant teams within the company are studying the content and business impact of this policy announcement, and there is no conclusion yet.
Encourage research and development through tax regulation
At present, my country’s rare disease drugs mainly rely on imports. The reporter noticed that many rare disease drugs such as dimethyl fumarate, fampridine, nitric oxide, tetrabenazine, ristralan, and velaglucerase α have not yet been launched in China.
Through the adjustment of tax policies, it is expected to promote more drugs to enter the domestic market, and will help domestic innovative drug research and development gather strength in this field.
You Xiaogang, senior investment adviser of Jufeng Investment Consulting, told a reporter from Securities Daily that the drugs and raw materials on the list all have the characteristics of targeted drugs. It can be seen that targeted drugs are the future treatment of related rare diseases. It is an important research direction and also points out the research direction for enterprise innovation.
Li Jianjie said, “The state’s value-added tax concessions for rare disease drugs will increase the enthusiasm and initiative of relevant enterprises, promote the input and supply of more enterprises and more related drugs, and help enrich drug categories and It is conducive to lowering market prices and promoting the increase in drug volume on the basis of ensuring corporate profits, thus forming a virtuous cycle of corporate production and sales, which is conducive to the long-term healthy development of enterprises and the medical industry. ”