Health care catalog adjustments, OTC and retail pharmacy markets may be affected.

Pharmaceutical Network July 23rd , if Class B OTC drugs are not included in the health insurance catalog of the provisions put into practice , will have a greater impact on the future 3-5 years of retail pharmacies .
after the health insurance dividend fades, retail pharmacies will produce a new market competition pattern in the future.
IQVIA data show that the overall size of China's pharmaceutical health market in 2019 (including only drugs sold at all ends and health products sold in retail pharmacies, including online and not Chinese medicine tablets, personal care and devices) was 1556.3 billion yuan.
, prescription drugs accounted for 79.6 percent of the market share, OTC for 15 percent and health care products for 5.4 percent.
sub-channels, medical terminals accounted for 75%, including pharmaceutical and electronic selling retail terminals accounted for 25%, of which the pharmaceutical and electronic seratochannels accounted for 5%, but rapid development.
Add in Chinese medicine tablets, personal care and devices, the overall size of offline retail pharmacies in 2019 will be about $371.1 billion.
it is worth mentioning that the second terminal drug sales continued to increase due to the impact of the health insurance policy restricting the sale of non-drug classes in pharmacies and the implementation of the volume procurement policy, and the outflow of prescriptions , the proportion of drug sales at the second terminal continued to increase - OTC and prescription drugs accounted for 75% of the overall market of offline pharmacies.
(see Figure 1) On April 29, the State Administration of Health Insurance published the Interim Measures for the Administration of Drug Use in Basic Medical Insurance (Draft for Comments), which, with plans to exclude 10 types of drugs from the medical insurance catalogue, has attracted wide attention in the industry.
, the terms of the clear inclusion of Class B OTC drugs in the health insurance catalogue will have a greater impact on the trend of retail pharmacies in the next 3-5 years.
the future, after the health insurance dividend fades, retail pharmacies will produce a new market competition pattern.
catalog adjustment, the short-term impact is greater in fact, as early as 2015, there was news that OTC drugs will withdraw from the health care catalog, but due to the combination of various factors, there was no actual reform measures.
the new version of the health insurance catalog for Class B OTC drugs and tonics and other adjustments, is not only for the past catalog structure of the re-grooming, but also a key step of the "cage for birds" - highlighting clinical value is the basic principle of health insurance catalog adjustment, IQVIA believes that in the future, there will be more innovative drugs included in health insurance.
in the industry's view, this initiative refers to the international practice, that is, according to the drug use channels of different health insurance payment classification management as the core of the prevailing model.
in accordance with the internationally accepted drug classification management system, retail terminal patients and consumers self-medicating and self-paying, medical institutions do not use OTC drugs, but in-patients who use OTC-type ingredients (not treated as OTC) are still included in the health insurance payment system, which is a more common practice. On May 24,
, the National Health Insurance Administration held a pilot launch meeting for the country-paid country of the Disease Diagnosis Subgroup (DRGs).
under the NEW POLICY OF DRGs, for hospitals, the drugs used in the treatment of inpatients, whether in or outside the health insurance catalogue, are cost, as long as the cost-effective OTC-type ingredients can also be used.
internationally accepted drug classification management system is implemented on the basis of a sound pharmaceutical division system.
during the epidemic, through the Internet medical treatment and co-ordination of payment to the retail side of the limited liberalization, China has advanced the pace of the pharmaceutical sector, the rate of prescription outflow is also accelerating, which is undeniable.
but to reach the standard of medical sub-sector in developed countries, China still has 5 to 10 years or more to go.
, health insurance policies that restrict edion sales in pharmacies, resulting in a 8% decline in the growth rate of the health-care category in 2019.
combined with this case, IQVIA predicts that once this health care catalog adjustment program lands, it will have a huge impact on OTC and retail pharmacies in the next 3-5 years - OTC drugs are divided into therapeutic and preventive drugs, and the demand for therapeutic drugs persists.
contrasting the hospital market, the drug epidemic in the first quarter of this year, the impact of the year-on-year growth rate of the situation, therapeutic drugs still maintained higher than the market average growth rate.
if the catalog adjustment hits the ground as scheduled, this part of OTC treatment needs may be returned to the medical facility to be replaced by prescription drugs.
Although the prescription outflow will eventually continue to flow to retail channels, but this will go through a "customer first return to medical institutions, mainly community hospitals, and then back to pharmacies and e-commerce" process, in the short term otC and offline retail pharmacies will have a greater impact.
(see Figure 2) The proposal to hedge short-off selling could have a bigger impact on retail pharmacies if the idea of health insurance transitions further from cage-for-bird swaps to the phasing out of personal accounts.
personal account is essentially a risk-free compulsory savings, rather than mutual lying health insurance, which cannot cope effectively with aging social security.
in response to the macro-environment such as the downward adjustment of economic growth expectations and the deterioration of the international trade environment after the outbreak, the government helps enterprises to control costs, continue to carry out fee reduction and tax reduction, the personal account is the main reason leading to the high rate of the current staff health insurance contribution, will be gradually adjusted (until the cancellation), in the process is mainly considered is the rational digestion of the stock of personal accounts.
of course, no matter how the policy and environmental changes, retail channels will become the ultimate beneficiaries of the pharmaceutical sector, but this channel dividend needs to be accompanied by the transformation of the service model - the traditional marketing model has been unable to meet market demand, the future patient-centered service model will become the mainstream, especially under the outbreak highlighted the Internet diagnosis and treatment brought about by new opportunities for drug retailing.
retail enterprises should actively participate in improving digital patient management and service capabilities.
future, the business model for pharmaceutical retailing will be data-driven online convergence, with the boundaries of wholesale, retail and Internet platforms being pushed through and digital commerce sourcing large chains or platforms.
(see Figure 3, 4) looking ahead to the next three years, OTC market online sales are expected to grow at a compound annual growth of more than 16%, offline retail (excluding O2O) growth of only 2-5%, more abundant digital ecology will be accompanied by chronic disease in health management, disease prevention and enhance immunity and other directions.
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