How to deal with the national procurement rules for the centralized procurement of Chinese patent medicines?

The footsteps of the centralized procurement of Chinese patent medicines are getting closer, and the state-organized centralized drug procurement work has been carried out, and the results have been remarkable
.

In the actual advancement process, various localities have optimized and innovated based on actual conditions, such as individual centralized procurement in a certain indication field, centralized procurement without volume, and centralized procurement by alliances
.

The initial result is that the price of medicines has been significantly reduced, and the quality of the products has not been affected.
The people have benefited from this.
The senior management fully affirmed that this work is a good thing for the country and the people.
Therefore, the work is being carried out on a regular basis
.

Recently, the footsteps of the national procurement of Chinese patent medicines are getting closer and closer
.
What is the difference between Chinese patent medicine and generic medicine? What kind of national procurement rules are expected? How should relevant companies respond?

In recent years, the author has been paying attention to the progress of national procurement of Chinese patent medicines, and I am here to offer some suggestions on the above topics, hoping to bring some benefits and thinking to related enterprises, and provide some ideas for national procurement policy makers
.
Please criticize and correct any improprieties

01 Differences in centralized procurement of Chinese patent medicines

The biggest difference between proprietary Chinese medicines and generic drugs is that they cannot be evaluated for consistency
.
Some people will say that high-value consumables and biological preparations are also not subject to consistency evaluation, so will they still be collected in the country? Yes, but the quality standards of proprietary Chinese medicines are difficult to unify and control

1.
The quality and price of Chinese medicinal materials from different origins vary greatly.

"Oranges born in Huainan are oranges, while those born in Huaibei are oranges"
.
Due to different origins, the properties of Chinese medicinal materials of the same name may be different or even completely opposite

Chrysanthemum, Schisandra, Huoxiang, etc.
, to name a few
.
Therefore, since ancient times, there has been a saying of authentic medicinal materials

Therefore, the price of authentic medicinal materials is obviously higher than that of ordinary medicinal materials, or even much higher
.
If the small Chaihu granules are reduced to a few yuan per box after the national harvest, who would use authentic medicinal materials? Do ordinary people still dare to eat it? If the price is cut blindly, it is not ruled out that a small number of companies will take the risk of using inferior and ineffective medicinal materials, which will affect the quality of medicines and harm the interests of the people

2.
The price of raw materials of Chinese medicinal materials fluctuates greatly

The raw materials of generic drugs mainly come from chemical raw materials.
In addition to the controllable quality in the industrial production process, the output is less affected by the natural environment, and the price is relatively controllable and stable
.

Chinese medicinal materials are not the same.
The planting process is greatly affected by natural environmental factors such as weather, and the instability of the output will bring about the instability of the price
.

"In the first half of 2021, affected by various factors such as the epidemic, disaster, inflation, and reduced planting area, the prices of various varieties in the Chinese medicinal material industry have seen a general rise in the market.
The price of 65 yuan per kilogram in March of this year has risen to the current 120 yuan per kilogram, and the mixed grade of rehmannia glutinosa has increased from 13 yuan per kilogram in February this year to the current 32 yuan per kilogram
.
The two varieties of Alisma and Chuanxiong, spring At the beginning, the price was 22 yuan and 24 yuan per kilogram.

The price of medicinal materials is unstable.
Pharmaceutical companies have used price space and stockpiling (raw materials) to digest them in the past.
Once the centralized procurement price drops to the bottom, the pharmaceutical companies will have no room to make room, and I am afraid they can only cut off the supply
.

At the end of 2019, Hebei collected common drugs for hypertension and diabetes.
In this collection, the price of nifedipine tablets was historically reduced to 0.
0123 yuan/tablet, but the limit price of 0.
10 yuan/tablet for Xiaoke pills finally fell out of the standard for reasons Unknown
.

In short, due to the above reasons, the national procurement of Chinese patent medicines must be different from the previous rules, otherwise it will cause big problems
.
So, how are the national procurement rules expected to be designed?

02 Policy Design for Centralized Procurement of Chinese Patent Medicines

"Policy Design Suggestions for Centralized Procurement of Chinese Patent Medicines" (The following content only represents personal views and does not represent any official views, and is for reference only)

First of all, Chinese patent medicines are collected in different countries for different purposes
.
Unlike generic drugs, price reduction will not be the first choice, but to further promote the supply-side reform of Chinese patent medicine companies through national procurement, promote the survival of the fittest by related companies, further concentrate production capacity, and improve product quality; the second is to reduce prices

Second, the threshold for hard shortlisting is higher
.
Different from the four entry thresholds for generic drugs, it is expected to increase the thresholds for standardized Chinese medicinal material planting bases and actual production capacity.

Third, the price will not drop too sharply
.
For the five batches of generic drugs purchased by the country, the "highest effective declaration price" was determined based on the lowest bid price in the history of the product, especially since the third batch of national products started.
In order to prevent the vicious bidding of enterprises, the price is obviously more friendly.
This has resulted in a situation where the bid price of a company is higher than the lowest bid price in history
.
In the first five batches of six rounds of national procurement, the average price cut was more than 53%
.
Looking forward to the national procurement of proprietary Chinese medicines, the "highest effective declaration price" is expected to be more friendly, and the psychological expectations of policy designers are that the average price reduction will be between 20-30%
.

If this is the case, the entry conditions are expected to be revised
.

The three shortlisted conditions for the first five batches of national mining companies are as follows:

1.
"Comparable unit price" ≤ 1.
8 times the lowest "comparable unit price" of the same product
.

2.
"Unit declared price" decreased by ≥50.
00%

Calculate the maximum effective declared price of the specification as the base number)
.
The decrease is calculated as a percentage, and the percentage is rounded to 2 decimal places
.

3.
"Comparable unit price" ≤ 0.
1000 yuan
.

How to modify? Changing 1.
8 times to 1.
2-1.
5 times, 50% to 20-30%, 0.
1000 yuan to 0.
3000 yuan or even 0.
4000 yuan, etc.
, can prevent excessive price reductions
.
That is, the shortlisting criteria are modified as follows:

1.
"Comparable unit price" ≤ 1.
2-1.
5 times the lowest "comparable unit price" of the same product
.

2.
The "unit declared price" decreased by ≥20-30.
00%
.

3.
"Comparable unit price" ≤ 0.
3000-0.
4000 yuan
.

In June 2020, Zhejiang Jinhua organized the collection of proprietary Chinese medicines.
The shortlisted condition for exclusive varieties is a price cut of more than 20%.
This is an idea that can be used for reference
.
In the end, the centralized procurement of Chinese patent medicines in Jinhua went on smoothly, and there have been no quality incidents and supply cuts so far
.

As I was writing this article, on September 3rd, Hubei held a special meeting on the procurement of Chinese patent medicines.
Judging from the information circulating in the meeting, the traditional double-envelope bidding model was still used, which once again proved the speciality of Chinese patent medicines.
It requires careful scrutiny and drills to copy the national procurement model to proprietary Chinese medicines
.

Finally, the bid period is expected to increase
.
For example, one company won the bid for a two-year bid period
.

03 How do pharmaceutical companies respond to the national procurement of Chinese patent medicines?

Unlike the national sourcing of generic drugs, the national sourcing of proprietary Chinese medicines is bad for small companies and a huge opportunity for large companies and large products
.

What pharmaceutical companies need to consider is not whether they can win the bid, but to be prepared to actively cater to supervision
.
For example, a planting base of Chinese medicinal materials that meets GAP specifications, stable product quality, redundant production capacity, and strong market share
.
With these, naturally won the bid
.

Secondly, don't let the national procurement of Chinese patent medicines affect your development confidence and block the progress, but seize the opportunity of the national procurement to strengthen and expand the products and realize the leap-forward development of the enterprise
.

In October 2019, the "Opinions on Promoting the Inheritance and Innovative Development of Traditional Chinese Medicine" was released, and the development of Chinese medicine has risen to a national strategy; and the epidemic has further improved the people's positive awareness of Chinese medicine.
It can be said that the future of Chinese medicine will be a rare Golden development period
.

How do related pharmaceutical companies plan ahead? R&D investment, the construction of standardized planting bases for Chinese medicinal materials, the improvement of quality standards, and the establishment of professional-level Chinese medicine academic self-supporting promotion teams are all tasks that pharmaceutical companies need to do
.

On this topic, the author published an article "Traditional Chinese Medicine, Huge Opportunity for Development" (click to read) in Cyberlan in March 2020.
Interested readers can find it by themselves
.

The author previously suggested that the national procurement of Chinese patent medicines for the purpose of reducing prices should be suspended.
Under the background of national procurement, the price formation mechanism of Chinese patent medicines is mature, the quality standards of Chinese patent medicines are further improved, the excess capacity of Chinese patent medicines is further cleared, and the regulatory mechanism is more complete.
Otherwise, it may be a chicken feather
.

It now appears that the time for national procurement of proprietary Chinese medicines has gradually matured, which is mainly due to the improvement of the drug regulatory mechanism
.
Nowadays, industry supervision in all walks of life is becoming more and more transparent, standardized, and strict.
There is no reason why drugs as special commodities should not be better
.

National procurement is an important national medical policy.
As a veteran medical practitioner who has been in the pharmaceutical market for more than 20 years, I also feel that national procurement is a good policy that benefits the country and the people
.
The author sincerely hopes that this policy can be implemented smoothly and the national procurement of Chinese patent medicines can be carried out smoothly, which will contribute to the smooth advancement of the national strategy of Chinese medicine and the development of a healthy China
.