China Watch P261:Change of reimbursement prices in Anhui

We highlight that a decrease in reimbursement prices will lead to further price erosion as hospitals would be forced to negotiate the prices down. However, a majority of the Anhui reimbursement prices are in line with the current lowest national prices. Companies with limited exposure to tender price cuts, including THDB and CMS, only registered single-digit ASP erosion compared to 7 years ago. Nevertheless, we noted some drugs under the same generic name have different reimbursement pricing in Anhui. Libod from FDZJ had new reimbursement pricing of RMB4,000, vs. RMB4,976 for Duomeisu from CSPC. We believe this is more likely to lead to further price erosion for Duomeisu.