CITIC Securities: Continues to be optimistic about innovative drugs and high-barrier generic drugs.

The CITIC Construction Investment Research Report indicates that the State Medical Insurance Administration insists on promoting the normalization of centralized procurement and medical insurance negotiations, promoting the transformation of the medical insurance fund, optimizing the selection of varieties and reporting volume on the procurement side, and promoting bidding rules, which helps guide companies from "low-price competition" to "quality competition + cost control + reasonable profit", thus promoting the healthy development of the domestic generic drug market and better safeguarding the medication needs of the people. It is optimistic about products with strict quality systems, cost advantages, clinical recognition, and widespread use maintaining or even expanding market share in centralized procurement. On the other hand, innovative drugs continue to receive policy support, with a success rate of over 90% in the 2024 medical insurance negotiation for innovative drugs, and domestic products accounting for over 70%. Supplementary insurance policies are gradually being introduced, providing the potential for incremental payments for innovative drugs; "Several Measures to Support the High-Quality Development of Innovative Drugs" conducts top-level design for innovative drugs from research and development to payment. Meanwhile, the international competitiveness of domestic innovative pharmaceutical companies continues to rise, new technologies are driving rapid industry development, and the future outlook remains optimistic for related innovative drugs and pharmaceutical companies.