Core Viewpoint - The article discusses the impact of China's drug procurement policy on pharmaceutical companies, highlighting the shift from a price-cutting competition to a focus on quality and innovation in the industry [2][4][6]. Group 1: Price Competition and Its Consequences - The aggressive price competition in the pharmaceutical industry has led to significant revenue losses, with a total of 48.3 billion yuan cut from the national drug market after four rounds of procurement [2]. - The phenomenon of "price wars" has resulted in extremely low prices for drugs, exemplified by the 0.09 yuan per tablet price for Amlodipine, which is unsustainable for many companies [2][4]. - The intense competition has forced companies to compromise on quality, leading to concerns about supply disruptions and product quality [2][3]. Group 2: New Procurement Rules - The latest round of procurement introduces new rules aimed at curbing the "race to the bottom" in pricing, shifting the focus from "lowest price wins" to "value for money" [3][4]. - A new price difference mechanism has been established, allowing for reasonable price premiums, which requires companies to ensure that their quoted prices do not lead to losses [3][4]. - Quality standards have been tightened, with new regulations mandating that only companies with at least two years of production experience can participate, along with comprehensive inspections of both companies and products [3][4]. Group 3: Focus on Innovation - The new procurement policy allows for the exclusion of high-risk and patented drugs from the procurement process, enabling original branded drugs to compete in public hospitals if they agree to lower prices [4]. - The policy aims to facilitate a market environment where innovative drugs can thrive, with 60% of the savings from procurement being reinvested into innovative drug development [4][6]. - The shift from a focus on generic drugs to innovative solutions is seen as essential for the long-term sustainability of the pharmaceutical industry in China [6].