According to the Financial Associated Press on January 9 (Reporter Lu Afeng), the prospect of collective purchasing drugs going abroad is expected to become a reality.

Today, the launch ceremony of the China-ASEAN Pharmaceutical Regional Procurement Platform was held in Fangchenggang, Guangxi. This is China's first transnational regional procurement platform. On the same day, a seminar on the China-ASEAN pharmaceutical regional procurement work was also held, which included an agenda introducing the basic ideas for advancing the China-ASEAN pharmaceutical regional procurement work.

According to reporters from the Financial Associated Press, this launch ceremony not only gathered leaders from the National Healthcare Security Administration, but also officials and experts from ASEAN countries such as Thailand, Cambodia, and Malaysia. During the follow-up seminar phase, representatives from SIMCERE PHARMA (02096.HK), United Imaging Healthcare (688271.SH), Shenzhen Mindray Bio-Medical Electronics (300760.SZ), Guilin Nanyao, Qilu Pharmaceutical, MICROPORT (00853.HK), and Shanghai Guomin were present.

At the launch ceremony, Deputy Director Shi Zihai of the National Healthcare Security Administration introduced that China is regularly and systematically promoting the centralized volume-based procurement of Pharmaceuticals. To date, ten batches of national organized drug procurement have been carried out, involving 435 types of drugs, covering common chronic diseases and oncology drugs. The launch of the procurement platform marks a substantial step forward in the communication and cooperation between China and ASEAN countries in the field of pharmaceutical procurement, providing broader cooperation space for both parties.

In August of last year, Zhang Ke, director of the National Healthcare Security Administration, together with the main leaders of the Guangxi Zhuang Autonomous Region Committee and government, jointly agreed to build the China-ASEAN Pharmaceutical Regional Procurement Platform, promoting the high-level openness of the medical experiment area and the reform tasks of high-quality development. According to the Guangxi Healthcare Security Administration's official website, the procurement platform project is a matter jointly agreed upon and promoted by the Guangxi Committee and government and the National Healthcare Security Administration.

This is definitely good news for collective procurement enterprises. Senior pharmaceutical industry expert Guo Xinfeng told reporters from the Financial Associated Press that although the relevant operational mechanisms of this procurement platform are yet to be clarified, domestic procurement enterprises are undoubtedly pleased to see an increase in their sales volume, as higher volume in large-scale production leads to higher profits.

However, some analyses point out that the Southeast Asian market is highly fragmented, with varying levels of economic development and a multitude of languages in use, resulting in significant differences among Southeast Asian countries in areas such as drug registration policies and regulations, market access thresholds, supervisory rules, and market payment levels.

Guo Xinfeng stated that 'the registration system should be implemented in appropriate ASEAN countries, such as Laos and Cambodia, where there is a high demand for generic drugs, because these centrally procured drugs have all passed consistency evaluations, and their quality is trustworthy, while the relatively low prices are what these developing countries yearn for. However, the relevant entry policies still need to be clarified further by the relevant departments.'

In recent years, Chinese pharmaceutical companies have comprehensively expanded their layout in Southeast Asia, primarily focusing on 'Innovative Drugs' by employing models such as external licensing, co-developing products with local partners, establishing joint ventures, investing in local companies, and building local production capabilities. For example, GENSCRIPT BIO (01548.HK), WUXI BIO (02269.HK), and CMS (00867.HK) have successively invested in Singapore, while Shanghai Junshi Biosciences Co., Ltd. (688180.SH) collaborated with Kanglian Da through the joint venture Excellmab to co-develop and commercialize PD-1 product Tislelizumab in nine Southeast Asian countries. Additionally, AKESO (09926.HK) and HENLIUS (02696.HK) have also pushed their PD-1 products into the Southeast Asian market.

The China-ASEAN pharmaceutical regional procurement platform is a framework and channel primarily focused on 'domestically produced generic drugs and medical devices.' The Southeast Asian pharmaceutical market has shown strong growth potential in recent years; data indicate that between 2023 and 2027, the annual compound growth rate of the emerging pharmaceutical market in Southeast Asian countries is expected to maintain at 5%-8%, significantly higher than the 2.5%-5.5% of Developed Markets.

However, most ASEAN countries have a weak foundation for the development of local pharmaceutical industries and are heavily dependent on imported drugs; currently, multinational pharmaceutical companies hold an absolute advantage in the Southeast Asian pharmaceutical market, with Indonesia being the largest pharmaceutical market in Southeast Asia, where 97% of drugs are imported.

'We look forward to the generation of the first Order, which will open a brand new path for our generic drugs to go abroad,' said Guo Xinfeng.