The bid for the spine centralized procurement was opened, and the proportion of foreign-invested varieties selected was only 12%

The centralized procurement of three major categories of high-value orthopedic medical consumables for joints, trauma and spine officially ended.

At around 6:10 p.m. on September 27, the official website of the State-organized Joint Procurement Platform for Medical Consumables officially announced the winning bid results for the national procurement of orthopaedic spinal consumables: Among the 520 winning varieties, The “lists” won by foreign companies are only about 60, and the rest are all domestic brands. The star player Stryker was eliminated across the board, and Johnson & Johnson won only a little over 10 bids.

Spine centralized procurement has released the biggest benefit for “domestic substitution”: The winning rate of domestic brands is as high as 88%.

In the previous centralized procurement documents, the United Procurement Office gave a bottom line: if the price falls below 40% of the maximum price limit, the selection will be guaranteed. Judging from the final result, most of the companies declared with the rule of “40% off”, which also led to the fact that most of the products in the same bidding unit did not differ too much in the prices of their products. .

Weigo’s quotation strategy is more aggressive. In several varieties such as “Anterior Cervical Spinal Fixation and Fusion System”, “Posterior Thoracolumbar Spinal Fixation and Fusion System”,

strong>All Weigao products are priced at about 10% lower than their peers, and the intention to seize the market is very obvious. The price difference of other companies is less than 10%, and the bidding is more moderate.

This quotation is basically in line with market expectations: some institutions believe that the centralized procurement of spinal consumables is “optimistic in terms of prices exceeding expectations, which is beneficial to leading domestic orthopaedic companies”.

The market has already performed, A-share medical devices rose sharply on September 27. As of the close, 12 stocks in the sector have risen by more than 10% or the daily limit. The “star domestic player” Weigao Orthopedics, a “star domestic player” for spine centralized procurement, rose 13.44%, Sanyou Medical rose 11.81%, and Dabo Medical rose 10.02%.

“40% off” is the bottom line, and domestic products dare to quote low prices

According to CCTV news reports, Zhang Tiejun, director of the joint procurement office of high-value medical consumables organized by the state and deputy director of the Tianjin Medical Security Bureau, introduced that the bidding for units A, B and C set up for this centralized procurement. The rules make “the competition among enterprises more convergent and the bidding more reasonable”.

Previously, the joint procurement office had stated in the centralized procurement documents that If the company’s quotation is lower than 40% of the maximum valid quotation set by the joint procurement office, it is possible to be selected

/strong>, which is equivalent to setting a declared reserve price for the enterprise to refer to.

Taking the thoracolumbar posterior open screw-rod fixation and fusion system as an example, the number of medical institutions reported as high as 390,000, with a price limit of 12,130 yuan, ranking first in the demand for 14 product systems. It is the biggest highlight of this centralized procurement, as long as the company’s quotation does not exceed 4,852 yuan, it can be shortlisted.

Judging from the on-site situation, a total of 93 companies won the bid for this product system, and several domestic leading companies’ quotations were lower than the line of 4852 yuan:< /p>

Weigao Orthopedics, Dabo Medical, and Sanyou Medical have the lowest bid prices in Unit A, which are 4544 yuan, 4642 yuan and 4667 yuan respectively. Yuan, not only can it win more than 90% of the intended purchase volume of medical institutions, but it may even have the opportunity to “divide” the remaining bid volume of some outgoing players or resurrected winning bidders.

On the whole, the price difference between the bid prices of the companies in each bidding unit is not large.Four companies including Guomedis Medical even won the bid at a price of 4,850 yuan.

Orthopedic consumables are basically high-margin products. But compared to trauma or joint products, the “benefit” of spinal consumables tends to be higher.

The 2021 annual report data shows that The gross profit margins of Weigao Orthopedics and Dabo Medical spine products are as high as 89.86% and 88.02%, respectively. In contrast, Weigao’s orthopaedic trauma and joint gross margins hover around 80% and 60%, respectively.

Inquiries from the Health Knowledge Bureau found that the limit price given by the Medical Insurance Bureau is roughly 60% of the market price. Consumables companies are still profitable.

Some institutions optimistically estimate that after centralized procurement, considering the influence of factors such as profit margins to dealers and service fees, the “net profit margin of the winning bidders will hardly be affected”.

Big foreign companies abandon their bids across the board, which is good for the development of domestic brands

While domestic brands won the bid on a large scale, some foreign brands showed different results.

The Bureau of Health and Knowledge has noticed that none of the products of Stryker, the “big player” in orthopedic consumables, won the bid. Stryker is one of the foreign companies with the highest proportion in the domestic spine market. Together with Medtronic and Johnson & Johnson, it has won nearly 60% of the domestic market share. The abandonment of bids across the board may be related to the volume of reports from medical institutions.

Statistics from the Health and Knowledge Bureau found that if the bone cement used in the spine is not included, the total number of medical institutions in the country for Stryker’s anterior cervical spine fixation and fusion system and other 6 types of product systems The demand is only 10782.

In other words, Stryker will receive less than one percent of the 1.2 million orthopedic consumables demanded by medical institutions across the country for next year.

Small share and lower price, but Stryker still chooses to “let go”, perhaps because of its own difficulties.

Statistics from the Health and Knowledge Bureau found that this time, the demand for domestic brands in medical institutions is much higher than that of foreign companies in the centralized procurement of spinal consumables: in the demand list of 14 product system categories, Weigao Orthopedics alone has won 5 “firsts”, including anterior cervical spine screw plate fixation and fusion system and cervical spine posterior screw rod fixation system, with a total purchase volume of 81,400 pieces.

In contrast, in terms of foreign brands, the foreign brands with the highest demand for a single product system are only Medtronic and Johnson & Johnson, namely the intervertebral disc system and the single product system. Use a cervical fusion cage system.

However, the overall purchase volume of these two product systems is not high. Even if it is calculated by the maximum price, the market size does not exceed 30 million yuan.

The results of the proposed selection show that a total of 39 companies in Unit C won the bid this time. These are often due to the supply of which is difficult to cover the whole country, the demand for medical institutions is small, and only specific components can be produced.

According to CCTV news reports, Dong Zhaohui, Director of the Recruitment and Procurement Division of the Price Recruitment Department of the National Medical Insurance Administration, introduced that the reason for opening a separate bidding unit for these companies is to allow these small companies or emerging companies The company “can also fairly participate in this collection.”

Domestic brands may be doomed from the beginning to “turn against the wind”.

According to the rules announced this time, this collection of spinal consumables will be implemented from the beginning of 2023, and the specific implementation date will be determined by each region of the alliance.

Writing | Surin

Editing|Jiang Yun Jia Ting

Operation | Jiahui Ren

Illustration | Visual China

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