Event
The State Council and central government’s guideline on medical & health deepening reform was officially issued on April 6, 2009.
Our Analysis and Estimation
1. Guideline issuing time point is in line with our expectation, and its scale is the largest ever in history.
2. It sketches blueprint of the future medical & health mechanism, and reveals long term, difficulty and complexity of the medical reform.
3. Five focus points describe recent working directions.
4. Government provides more investment support and encourages social contribution, thus proportion of affordability is likely to decrease in the future.
5. Highlight is still the further improvement of medical guaranty.
6. Basic drug system makes significant change.
7. Medical institution reform guideline emerges initially, with compensation issue being key point.
8. Bottleneck for improving treatment level of medical institution staff might be broken.
9. Price mechanism is another focus.
10. Projects of Rmb850bn investment within three years is not mentioned in the guideline.
Investment Suggestion
1. To put emphasis on prescription field.
2. Commercial pharmaceutical enterprises benefit from medical reform & expansion and improved profitability will be more potential in the coming few years.
3. To focus on enterprises whose “sole-owned product” might be categorized into basic drug list.
4. Despite of current low premium, investors are suggest to be on guard against enterprises that valuation and growth do not compatible with each other given a not low overall valuation.