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Recently, the Hubei Province Pharmaceutical Price and Bidding Purchasing Management Service Network issued the "Announcement on Centralized Procurement of Proprietary Chinese Medicines by the Inter-provincial Alliance of Chinese Patent Medicines
.
" The announcement shows that this procurement alliance is composed of 19 provinces and regions including Hubei, Hebei, Shanxi, etc.
The scope of participation in the mass procurement of Chinese patent medicines includes all public medical institutions in the alliance area, and medical insurance designated social medical institutions and designated pharmacies are encouraged to operate in accordance with the alliance.
Participate in relevant regional regulations
.
Coincidentally, the Guangdong Pharmaceutical Trade Center also issued a document earlier that it planned to carry out the alliance regional group procurement of 58 drugs including Qingkailing
.
Wherein the 58 varieties includes 36 exclusive proprietary varieties, comprising CSDP, Lianhuaqingwen product Naoxintong capsule, soy children Alice heat particles, Tanreqing, Zishen tire balls
.
It is reported that the alliance regions participating in this collection of varieties report will include Guangdong, Shanxi, Henan, Hainan, Ningxia, Qinghai, and Xinjiang
.
Regarding the recent frequent occurrence of the Hubei and Guangdong Chinese patent medicine centralized procurement alliances, the industry believes that this means that the special centralized procurement of Chinese patent medicine has officially entered the substantive start-up stage from the level of research and development
.
In fact, there has been a foretaste of the central procurement of Chinese patent medicines
.
In April this year, Guangdong took the lead in the centralized procurement of drugs from the 16-province alliance involving dozens of proprietary Chinese medicines
.
In August, the National Medical Insurance Administration made it clear that it will work with relevant departments to improve the quality evaluation standards of Chinese patent medicines and formula granules, adhere to quality first, be clinically demand-oriented, and start with high-priced and large-volume varieties, scientifically and securely.
Promote the reform of centralized procurement of Chinese patent medicines and formula granules
.
However, it should be noted that under the background that centralized procurement will lead to price reductions, Chinese patent medicine companies may face risks such as large price fluctuations of raw materials and difficulty in cost control.
Therefore, how to balance price reduction and quality control is increasingly being affected by the industry.
Concerned
.
In addition to the above risks, research data predicts that China's traditional Chinese medicine industry will maintain a compound annual growth rate of about 6% in the next five years.
It is estimated that by 2023, the size of the traditional Chinese medicine market is expected to reach 844.
34 billion yuan
.
However, if Chinese patent medicines are launched during this period, it means that the market size of 100 billion yuan will be affected.
.
Therefore, the industry predicts that pharmaceutical retail terminals will also be affected
.
In the face of the above problems, how should relevant companies respond? The analysis believes that the existing centralized procurement rules are more beneficial to companies with a large market share and a relatively stable market.
Therefore, if they want to control costs under the trend of price reductions, Chinese patent medicine companies can try to increase R&D investment, build standardized planting bases for Chinese medicinal materials, Improve quality standards and establish professional self-employed promotion teams for Chinese medicine
.
It is reported that many listed companies have built their own medicinal material bases in recent years
.
For example, Xiangxue Pharmaceutical’s 2021 semi-annual report shows that the company is actively deploying Chinese medicinal materials production bases to extend the industrial chain upwards, enhance the self-sufficiency of raw materials in the Chinese patent medicine business, and strengthen the supply and quality assurance of raw materials.
It is currently in Ningxia, Shanxi, Sichuan, Production bases of Chinese medicinal materials have been established in Yunnan, Hubei, Guangdong and other places
.
In addition, Zuoli Pharmaceutical mentioned that it will expand its market share through hospital development, department development, OTC and Internet e-commerce expansion
.
In general, relevant companies that can seize the opportunity in the future may obtain rapid development opportunities from centralized procurement competition, but it is inevitable that small and medium-sized enterprises with no specialty formulation products will be eliminated at an accelerated rate.
.
.
" The announcement shows that this procurement alliance is composed of 19 provinces and regions including Hubei, Hebei, Shanxi, etc.
The scope of participation in the mass procurement of Chinese patent medicines includes all public medical institutions in the alliance area, and medical insurance designated social medical institutions and designated pharmacies are encouraged to operate in accordance with the alliance.
Participate in relevant regional regulations
.
Coincidentally, the Guangdong Pharmaceutical Trade Center also issued a document earlier that it planned to carry out the alliance regional group procurement of 58 drugs including Qingkailing
.
Wherein the 58 varieties includes 36 exclusive proprietary varieties, comprising CSDP, Lianhuaqingwen product Naoxintong capsule, soy children Alice heat particles, Tanreqing, Zishen tire balls
.
It is reported that the alliance regions participating in this collection of varieties report will include Guangdong, Shanxi, Henan, Hainan, Ningxia, Qinghai, and Xinjiang
.
Regarding the recent frequent occurrence of the Hubei and Guangdong Chinese patent medicine centralized procurement alliances, the industry believes that this means that the special centralized procurement of Chinese patent medicine has officially entered the substantive start-up stage from the level of research and development
.
In fact, there has been a foretaste of the central procurement of Chinese patent medicines
.
In April this year, Guangdong took the lead in the centralized procurement of drugs from the 16-province alliance involving dozens of proprietary Chinese medicines
.
In August, the National Medical Insurance Administration made it clear that it will work with relevant departments to improve the quality evaluation standards of Chinese patent medicines and formula granules, adhere to quality first, be clinically demand-oriented, and start with high-priced and large-volume varieties, scientifically and securely.
Promote the reform of centralized procurement of Chinese patent medicines and formula granules
.
However, it should be noted that under the background that centralized procurement will lead to price reductions, Chinese patent medicine companies may face risks such as large price fluctuations of raw materials and difficulty in cost control.
Therefore, how to balance price reduction and quality control is increasingly being affected by the industry.
Concerned
.
In addition to the above risks, research data predicts that China's traditional Chinese medicine industry will maintain a compound annual growth rate of about 6% in the next five years.
It is estimated that by 2023, the size of the traditional Chinese medicine market is expected to reach 844.
34 billion yuan
.
However, if Chinese patent medicines are launched during this period, it means that the market size of 100 billion yuan will be affected.
.
Therefore, the industry predicts that pharmaceutical retail terminals will also be affected
.
In the face of the above problems, how should relevant companies respond? The analysis believes that the existing centralized procurement rules are more beneficial to companies with a large market share and a relatively stable market.
Therefore, if they want to control costs under the trend of price reductions, Chinese patent medicine companies can try to increase R&D investment, build standardized planting bases for Chinese medicinal materials, Improve quality standards and establish professional self-employed promotion teams for Chinese medicine
.
It is reported that many listed companies have built their own medicinal material bases in recent years
.
For example, Xiangxue Pharmaceutical’s 2021 semi-annual report shows that the company is actively deploying Chinese medicinal materials production bases to extend the industrial chain upwards, enhance the self-sufficiency of raw materials in the Chinese patent medicine business, and strengthen the supply and quality assurance of raw materials.
It is currently in Ningxia, Shanxi, Sichuan, Production bases of Chinese medicinal materials have been established in Yunnan, Hubei, Guangdong and other places
.
In addition, Zuoli Pharmaceutical mentioned that it will expand its market share through hospital development, department development, OTC and Internet e-commerce expansion
.
In general, relevant companies that can seize the opportunity in the future may obtain rapid development opportunities from centralized procurement competition, but it is inevitable that small and medium-sized enterprises with no specialty formulation products will be eliminated at an accelerated rate.
.
