Sales activities messed up by COVID-19 crisis

January outpatient prescriptions fell 5% year-on-year

Sales activities are virtually suspended due to telecommuting & presentation cancellation

Last year, pharmaceutical companies were suffering from impurity issues

Pharmaceutical companies have already been struggling with earnings this year.

 

Concerned about COVID-19 infection, people are reluctant to visit medical institutions, and their business activities for medical staff are virtually suspended.

 

According to UBIST on the 25th, the total outpatient prescription amount last month was ￦1.25 trillion, down 4.4% from the same period last year.

 

It was 4.6% lower than last month.

 

The January prescription amount is unusual compared to the annual increase of more than 5%.

 

Last year's prescriptions increased 8.5% compared to January 2018.

 

In January 2018, prescriptions were up 18.2% year-on-year.

 

In 2016 and January 2017, prescription amounts increased 5.4% and 7.6%, respectively.

 

Monthly outpatient prescription amount (Unit: ￦100 million, Source: UBIST)

Decrease in prescriptions in this January, the decrease in the number of business days due to the Lunar New Year holiday, which came earlier than usual, may have had some effect.

 

However, the analysis predominates that COVID-19 may have been the biggest factor in reducing prescriptions.

 

After the first COVID-19 confirmed in Korea last 20th, the alert for new infectious diseases has increased in earnest.

 

Since then, patients have been reluctant to visit medical institutions.

 

Indeed, prescriptions amount for major drugs sold heavily through outpatient prescriptions declined.

 

Pfizer's Lipitor, ranked No.1 in prescriptions, fell 10.6% YoY to ￦15.5 billion.

 

Daewoong Bio's brain function improver 'Gliatami' decreased 6.1%.

 

Over the past month, prescriptions for large-sized medicines, such as Twynsta, Plavix, Crestor, Viread, Exforge and Amosartan showed a steady decline compared to the previous year.

 

The outpatient prescription amount of AstraZeneca's anti-cancer drug Tagriso increased by 45.7% over the past month.

 

Presumably, this is because the proportion of patients who were taken at home while avoiding hospitalization increased.

 

Pharmaceutical companies are worried that earnings will be sluggish this month.

 

The situation has worsened since the sudden increase in COVID-19 confirmers since the 19th.

 

COVID-19 spread rapidly in Daegu, Gyeongbuk, and more than 900 confirmed as of 25th.

 

On the 23rd, the government upgraded the COVID-19 crisis alert to the highest level of 'serious'.

 

The government issued a serious step only 11 years after the swine flu crisis in 2009.

 

Patients with mild illnesses, except those with severe or chronic illnesses, are reluctant to visit medical institutions because they are concerned about infection with COVID-19.

 

The drop in the number of patients leads to a decline in drug sales.

 

Pharmaceutical companies' sales activities are actually “open without any business”.

 

At the end of last month, telecommuting of sales staff, which was adopted by multinational pharmaceutical companies, is spreading.

 

Hanmi Pharm, LG Chem, GC Pharma, CJ Healthcare, Dong-A ST, and Dong-wha Pharm have banned sales people from visiting medical institutions.

 

One medical institution restricted access to pharmaceutical salespersons.

This is because sales people may be exposed to the risk of infection with COVID-19 due to frequent visits to medical institutions.

 

There are also concerns that salespeople can be a powerful carrier if they are infected with COVID-19.

 

If there are confirmed patients among pharmaceutical salespeople, the company can not avoid blaming for spreading COVID-19.

 

While allowing salespersons to visit medical institutions, criticism may have been made that they exposed the risk of infection to COVID-19 and caused damage to medical institutions.

 

The Korean Medical Practitioners Association also sent an official letter to the Korea Pharmaceutical and Bio-Pharma Manufacturers Association on the 20th requesting that sales representatives refrain from visiting.

 

Promotional events such as product briefings are also being canceled.

 

An official of a pharmaceutical company said, “We are forced to cancel a pre-scheduled meeting or briefing session for physicians and pharmacists because of concerns about the infection of COVID-19”.

 

In fact, face-to-face sales activities have ceased.

 

Some pharmaceutical companies expect to benefit from masks and some over-the-counter drugs with COVID-19, but most of them are concerned about sales impact because their major businesses are Prescription drugs.

 

Disruption of business activities is inevitable for domestic pharmaceutical companies that are highly dependent on generics.

 

Sales of generic drugs with the same product power depend on their sales force.

 

Innovative new drugs with no alternative drugs or new drugs without generics are unlikely to hurt sales.

 

For pharmaceutical companies, they suffered from poor performance in the fourth quarter of last year due to an impurity issue.

 

The Ministry of Food and Drug Safety banned the sale of all anti-ulcer drug Ranitidine at the end of last September.

 

The market exit was virtually determined for the detection of carcinogen N-nitrosodimethylamine (NDMA) excess.

 

Pharmaceutical companies with ranitidine-based products suffered significant losses from sales bans, recalls, and disposals.

 

GC Pharm, Jeil Pharm, JW Pharma, and Ildong Pharmaceutical recorded losses in the fourth quarter of last year.

 

An official of a pharmaceutical company said, “The spread of COVID-19 has effectively stopped sales activities, and it is inevitable that there will be a considerable impact on performance, and in order to minimize prescription drug sales gap, there is a lot of concern in preparing effective marketing strategies in addition to traditional sales activities”.