Source: eCompany Author: Han Zhongnan On June 25th, the Hong Kong Stock Exchange disclosed that Berkshire Hathaway sold 2.0175 million shares of BYD Company Limited on June 19th, with an average reduction price of HKD 234.57 per share, cashing out approximately HKD 473 million, and the shareholding ratio decreased from 6.18% to 5.99%. It is worth noting that on June 11, Berkshire Hathaway just made a reduction and cashed out HKD 311 million. Reviewing the previous information, since the first reduction of BYD in August 24, 2022, the "stock god" Buffett has reduced his holdings of BYD many times. The shareholding ratio of Berkshire Hathaway has been adjusted from 19.92% to the current 5.99%. Some strategic analysts said that once Berkshire Hathaway's shareholding ratio of BYD drops to 5%, Buffett's reduction speed may accelerate. On June 25th, BYD A shares rose by 1.63%, closing at RMB 254.01 per share, and Hong Kong stocks rose by 0.84%, closing at HKD 239.60 per share. In the Berkshire Hathaway shareholder meeting held in May this year, Buffett mentioned BYD, saying that BYD and Costco were the stocks that he and Munger worked together for these years and Munger most firmly advocated buying. Talking about why he reduced holdings of BYD, Buffett said that Berkshire Hathaway's investment in BYD was similar to the investment in Japan five years ago, which was a large investment that was rare outside of the United States. In the future, he hopes to focus more on the United States. In fact, recently, not only has Buffett been continuously reducing his holdings of BYD, but his favorite "apple" has also been greatly reduced. The latest holding situation submitted by Berkshire Hathaway to the US Securities and Exchange Commission (SEC) shows that in the first quarter of 2024, Buffett reduced his holdings of Apple Inc. by about 116 million shares, reducing his holdings of Apple from 49.3% at the end of 2023 to 40.3%. Analysts pointed out that judging from the portfolio adjustment actions, Buffett is withdrawing from the technology sector and returning to the industries he was familiar with before. The most obvious change is that Buffett has re-established a large position in Chubb Ltd. which he previously owned. Buffett also said in a recent letter to shareholders, "Property and casualty insurance provides the core protection for Berkshire's health and growth." "Only take a swing when conditions are right," Buffett believes that unless he can find investment standards with low risk and lucrative returns, he will not spend this money.

Author: Pan Yurong

According to the National Healthcare Security Administration, a press conference will be held on November 28 at 10 a.m. at the National Healthcare Security Administration to introduce relevant information regarding the adjustment of the National Drug List for 2024 and to answer questions from reporters. This means that the results of the national negotiation for 2024 medical insurance centralized procurement will be announced this Thursday.

A representative from a Hong Kong listed innovative drug company participating in this year's medical insurance negotiation told Securities Times e Company that entering the medical insurance scheme is crucial for the company's new products to achieve volume growth. The company has made sufficient preparations and looks forward to the results being announced this Thursday. According to the company's target, new products will be arranged to participate in national negotiations every year in the future.

From 'soul bargaining' to rationality.

The annual medical insurance centralized procurement negotiations attract attention from the pharmaceutical industry.

From October 27 to noon on October 30 this year, the National Healthcare Security Administration organized 25 negotiation experts from various provincial healthcare departments across the country to conduct on-site negotiations and bidding with relevant pharmaceutical companies, involving a total of 127 companies and 162 types of pharmaceutical products, including 117 products outside the medical insurance catalog and 45 products in the catalog for negotiation renewal.

It is reported that this year's on-site negotiation work proceeded smoothly and the overall results were basically comparable to previous years, meeting expectations. The updated version of the medical insurance drug catalog, after 'expansion', is expected to be released to the public at the end of November and will be officially implemented starting January 1 next year.

The national medical insurance negotiations first gained attention for various "soul bargaining" highlights. Feedback from companies participating in this year's negotiations indicates that all parties remained relatively calm, typically completing a round in half an hour, with some "overtime" sessions, though these were rare.

On the eve of the negotiations, the National Medical Insurance Administration announced that since its establishment, it has strongly supported the development of innovative drugs by adhering to the principle of "ensuring basic coverage" and through means such as "timely inclusion of innovative drugs into the catalog at reasonable prices" and "supporting the acceleration of clinical application." Analysts from Ping An Securities stated that this national negotiation focuses on "accelerating the clinical application of innovative drugs," highlighting the innovative value of the products. There is a focus on pharmaceutical products that have excellent clinical efficacy and can bring significant benefits to patients.

Ping An Securities has reviewed the key areas of products for this year's negotiations:

(1) PD-(L) (immunotherapies for cancer treatment): This year, Yuheng Bio's cipulimab and Zhengda Tianqing's pembrolizumab participated in the negotiations.$AKESO (09926.HK)$ $Jiangsu Hengrui Pharmaceuticals (600276.SH)$ 、 $JUNSHI BIO (01877.HK)$And$BeiGene (BGNE.US)$Negotiation for new indications of PD-1.

(2) EGFR TKI: Ruibotnib tablets from shenghe pharmaceuticals and rociletinib from betta pharmaceuticals participate in this year's negotiations.$Betta Pharmaceuticals (300558.SZ)$Bafetinib for first-line treatment of NSCLC participates in the negotiation; Jiangsu Haisen's amitinib is renewed in the catalog.

(3) Bispecific antibodies: $AKESO (09926.HK)$ Two monoclonal antibodies participated in this year's negotiations. Before the negotiations, akeso reduced the price of cadonilimab (AK104, PD-1/CTLA4) from 13,220 yuan/125mg/bottle to 6,166 yuan/125mg/bottle, a decrease of 53.4%, with annual treatment costs below 0.2 million yuan; the annual treatment cost of ibalizumab (AK112, PD-1/VEGF) is above 0.4 million yuan.

(4) ADC (antibody-drug conjugates, new type of tumor drug): The HER2 ADC from Novartis AG, trastuzumab deruxtecan (DS-8201), which is used for second-line treatment of HER2-positive breast cancer and HER2-low expressing breast cancer, participated in this negotiation. Similarly, before the negotiations, the price was reduced from 8,860 yuan to 6,912 yuan, while simultaneously canceling the charitable drug donation, with annual treatment costs above 0.3 million yuan.

(5) PSCK9 (lipid-lowering drugs): $Novartis AG (NVS.US)$ Inkeqs focuses on the injection and $INNOVENT BIO (01801.HK)$Tolecilizumab is participating in this negotiation.

(6) Blood cancer TKI (tyrosine kinase inhibitors): $ASCENTAGE-B (06855.HK)$ The new indication for olverembatinib (for adult patients with CML CP resistant to first and second generation TKIs) is involved in negotiations; $Dizal Pharmaceutical (688192.SH)$ Negotiations are underway for the golatinib capsule, which is an off-label drug.

(7) Other: $EVEREST MED-B (01952.HK)$ Treatment of IgA nephropathy with drug resistance to Tianfu Kang, $Suzhou Zelgen Biopharmaceuticals (688266.SH)$ Recombinant human thrombin and others are participating in this year's negotiations.

Reducing prices in advance increases the chances of success.

As the 2024 medical insurance negotiation enters the calculation stage, many pharmaceuticals have proactively applied for price reductions to improve their chances of being shortlisted. These include cardorinil monoclonal antibody, deruxtecan, and tibetetanib, with price reductions of 53.4%, 22%, 7%, and 6% respectively.

In June of this year, the Office of the Medical Security Bureau of Hubei Province announced that$AstraZeneca (AZN.US)$the online price of deruxtecan was reduced from 8,860 yuan per dose to 6,912 yuan per dose.

In June, $AKESO (09926.HK)$ The price of the world's first tumor immune bispecific antibody new drug, cadonilimab injection (PD-1/CTLA-4), independently developed has been reduced, with the price per unit dropping from 13,220 yuan to 6,166 yuan, a decrease of 53.4%.

An insider from a Hong Kong stock innovative drug company who participated in this year's national medical insurance negotiations stated to the Securities Times that entering medical insurance is crucial for the company's new products to gain market traction, and the company is well prepared. According to the company's goals, new products will be arranged to participate in national negotiations every year in the future.

Although entering medical insurance requires profit concessions, it is an important step for innovative drugs to achieve commercialization goals, which is of great significance for pharmaceutical companies. Previously, there have been cases where pharmaceutical companies were impacted in terms of revenue due to failed entry into medical insurance.

In addition, a number also spurs innovative drug companies to actively participate in national negotiations: in 2023, the medical insurance fund's expenditure on innovative drugs was about 90 billion yuan, while the expenditure in 2019 was less than 6 billion yuan, expanding 15 times in four years.

Over the past six years, the average price reduction for drugs negotiated in medical insurance has exceeded 55%.

Guosen has compiled the situations of the six medical insurance negotiations since 2018, and in recent years, national negotiations have shown the following characteristics:

Firstly, there is an increasing trend in the variety of negotiated products, with the number of varieties participating in negotiations expanding from 18 in 2018 to over 100.

二是所涉企业方面，不区分内外资、企业规模及所有制属性，所有符合条件的药品都可以自主进行申报；

三是谈判成功率自2019年起呈现提升趋势，从65%上升至85%左右，创新药谈判成功率更高以2023年的谈判药物名单来说，25个创新药参加谈判，其中23个谈判成功，成功率高达92%；

四是平均降幅基本维持在55%—65%区间内；

五是中药品种从无到有，参与度加深。

据央视财经报道，2023年通过谈判新增进入医保目录的105个药品，今年前三季度惠及7.978 million人次，9月份药品销售额是1月份的7倍。6年来，谈判新增的446个药品，协议期内医保基金累计支出超340 billion元，惠及0.8 billion人次，带动相关药品销售总额近500 billion元，叠加谈判降价和医保报销等多重因素，累计为群众减负超过了800 billion元。统计显示，目前全国公立医院采购的药品中，目录内药品的采购金额占比已超过90%。

Editor/Rocky