How can pharmaceutical companies gain market access to proprietary Chinese medicines and biological preparations?

Centralized procurement of Chinese patent medicines and biological preparations is imminent.

In the near future, the country will start the centralized procurement of insulin, which means that the national centralized procurement of biological products is coming soon

The inter-provincial alliance of Hubei Province to collect Chinese patent medicines has also made many Chinese patent medicine manufacturers worry, because the provincial-level centralized procurement of insulin started in Hubei Province.

There are no definite rules for the centralized procurement of Chinese patent medicines in the inter-provincial alliance of Hubei Province.

1.

2.

3.

If 10 companies are selected, 5 companies are in group A, 4 companies in group B, and 1 company in group C; or 1 to 3 companies with lower quotations, and then 6 to 10 companies in low-priced rankings enter group B, and the rest will be rejected.

4.

Daily volume of business is not selected by the distribution of 80% of medical institutions to group A or group B, group A, the amount of business should exceed the amount of the B group

It can be seen that centralized procurement has divided more than 80% of the market, and the market for unselected companies is very low

If the second highest price can get a higher quotation and the quoted volume is also good, it will be the bigger winner

The incremental part is not that the company chooses medical institutions but that the medical institutions reverse the selection of the brand.

If this rule extends to biosimilar drugs, it will be unfair for new manufacturers of biosimilar drugs to be approved later

If the initial reporting volume of new entrants of biosimilar drugs is very low, when medical institutions go to reverse the selection of manufacturers, the new entrants are even less likely to be reversed, and the incentives for new entrants to reduce prices are insufficient

For proprietary Chinese medicines, this rule is only good for companies that have built a good hospital brand market, and companies that have cultivated good medication habits in medical institutions
.
In the past, the centralized procurement of chemical drugs did not display the product name as much as possible, and used the generic name to conduct the centralized procurement.
Pharmaceutical and biological product manufacturers have to maintain their brand and cost advantages.
Marketing and management costs have risen sharply, which is not in line with the original intention of centralized procurement to reduce the marketing and management costs of enterprises
.

If all medical institutions across the country select brands at the same time, this means that the Medical Insurance Bureau has established a nationwide reporting system, which places very high requirements on the system
.

In addition, for the 30% volume of Group C, why not let Group A companies choose according to the price in proportion or by province? The unselected quantity is also designed like this?

If it is not the rule that the label is reported, then there may be two groups.
Group A gets 50% of the market and Group B gets 30% of the market
.
A sub-group of Group A provinces, group B has the B sub-state group
.
In the end, 2 companies were selected in each province
.

02 How do related companies respond?

The response of the enterprise:

1.
If the final rule adopted is the life-and-death rule of label reporting, the company must also establish a national database of medical institutions, allocate enough business personnel, and communicate to ensure that existing medical institutions have coverage
.
The management cost can be imagined to increase greatly, and the bid may not necessarily be won after the volume is reported.
It is expected that the enterprise will ultimately focus on maintaining the existing sales volume
.

2.
If the bid is won, grabbing the incremental market for medical institutions will be the key
.

As shown in the table below, if there are less than 3 companies, is there still a C group? If the winning company is singular, is the winning bid number in Group A rounded or rounded?

If three companies are selected, Group A will get 30% of the report of Group C, and the medical institution must choose Group A manufacturers
.
Those who are not selected also give priority to the amount of group A, so group A will benefit the most
.
The three companies with the lowest price at the time of the selection have benefited relatively more, and it is expected that more companies will be willing to grab the lowest price when the three companies are selected
.

If the original research is the unselected company, if the second-highest price group B company can grab the amount of the original research manufacturer, it will be the optimal solution when the selected company is 4 or more
.

Number of enterprises selected

Group A

Group B

Group C

1

1

-

-

2

1

-

1

3

1

1

1

4

2

1

1

5

2

2

1

6

3

2

1

7

3

3

1

8

4

3

1

9

4

4

1

10

5

4

1

Number of enterprises selected

Group A

Group B

Group C

Number of enterprises selected

Number of enterprises selected

Group A

Group A

Group B

Group B

Group C

Group C

1

1

-

-

1

1

1

1

-

-

-

-

2

1

-

1

2

2

1

1

-

-

1

1

3

1

1

1

3

3

1

1

1

1

1

1

4

2

1

1

4

4

2

2

1

1

1

1

5

2

2

1

5

5

2

2

2

2

1

1

6

3

2

1

6

6

3

3

2

2

1

1

7

3

3

1

7

7

3

3

3

3

1

1

8

4

3

1

8

8

4

4

3

3

1

1

9

4

4

1

9

9

4

4

4

4

1

1

10

5

4

1

10

10

5

5

4

4

1

1

3.
Brand promotion: Companies need to maintain their own quality brands, which means that companies still need to keep a certain amount of promotion costs
.
However, due to the unrecognizable nature of the winning bid, the company may adopt the lowest cost promotion method
.

4.
Production: Under the priority of cost, Chinese patent medicine companies will control upstream companies, and may even monopolize the supply of key medicinal materials
.

5.
Research and development: The exclusive Chinese patent medicine with the same name will be a hot spot for research and development
.
Overheated biosimilar drugs may not have investment value
.