"Two vote system + business to value-added", where is the opportunity for the two-way pressure upgrading of pharmaceutical circulation profits?

Source: pharmaceutical economic daily August 24, 2016 pharmaceutical circulation industry is connected with upstream pharmaceutical manufacturers and downstream retail terminals, playing an important role in connecting the preceding and the following, and also an important part of quality control Pharmaceutical circulation enterprises purchase drugs from upstream pharmaceutical manufacturers, and then wholesale them to downstream hospitals, pharmacies and other terminals, which play a pivotal role in the whole pharmaceutical supply chain in information flow, logistics, capital flow Specifically speaking, pharmaceutical circulation enterprises are responsible for the distribution, distribution and channel inventory of goods, as well as the fund advance function in the process of hospital to manufacturer (to solve the receivables of production enterprises and guarantee their cash flow) The downstream information transmission function of pharmaceutical distribution enterprises not only helps the upstream pharmaceutical manufacturing enterprises realize the material production plan of "production by sales", but also realizes the information collection and feedback of the medical terminal market By the end of November 2015, there were 13508 drug wholesale enterprises in China In terms of market share, the top 100 pharmaceutical wholesale enterprises accounted for 68.9% of the total scale of the national pharmaceutical market in the same period, up 3.0 percentage points over the previous year Among them, the top three drug wholesale enterprises accounted for 33.5%, 2.9% higher than the previous year; the top 50 enterprises accounted for 63.1%, 3.1% higher than the previous year; the drug wholesale enterprises with main business income of more than 10 billion yuan accounted for 51.7% of the total scale of the national drug market in the same period, 2.9% higher than the previous year The data shows that the concentration of drug wholesalers has been further improved, and the operation ability, operation ability and management ability of drug wholesalers with a certain scale in the market have been effectively improved Those who are eliminated: whether the small-scale circulation enterprises are facing bankruptcy is "two vote system" or "business to value added" There are only two ultimate goals: first, to reduce the circulation links and drug prices; second, the state increases the supervision of a series of gray spaces such as tax evasion, money laundering and commercial bribery through strict means of gold tax, so as to improve the cost of circulation enterprises and purify the business environment In fact, under the strict new policy, it is not difficult to predict that it will lead to the agglomeration and integration of pharmaceutical distribution enterprises In the future, more and more pharmaceutical distribution enterprises will be faced with business reduction, license revocation due to compliance inspection, and some of them will be purchased, transformed or eliminated In the long run, it will undoubtedly improve the industry concentration and purify the business environment This is consistent with the overall development indicators of the industry in the "13th five year plan outline (Draft for comments)" recently issued and discussed by the state The implementation of "two vote system" makes the channel of medicine supply chain flat In addition, the implementation of "replacing business tax with value-added tax" has made clear restrictions on the deduction of input tax points and tax amount for small-scale taxpayer enterprises whose annual taxable sales are less than 5 million yuan The tax calculation method and treatment cost are higher than those of ordinary taxpayers, which will greatly weaken their market competitiveness and affect their business development Overall pressure: the profit space is further squeezed From the current attitude of implementing "two vote system" in some provinces and the definition of the first vote, it is different For large pharmaceutical circulation enterprises, whether intra group allocation is counted as one vote is related to the risk of cliff shrinkage of national distribution business At that time, the national allocation business owned by the traditional large-scale pharmaceutical distribution enterprises (Sinopharm holding, China Resources pharmaceutical, kyushutong, etc.) will shrink or even face transformation Instead, they will turn to the national commercial allocation of drugs other than the bidding varieties (medical insurance payment), or transfer to the retail market or private hospitals For the early pharmaceutical commercial companies involved in retail distribution and developing "wholesale and retail integration" business, it has become a new business growth point However, compared with the previous large-scale distribution business of all varieties, the difference in sales volume over the same period will be unprecedented In addition, with the implementation of the two new policies, especially the policy of "replacing business tax with value-added tax", for the most upstream pharmaceutical raw material suppliers, all expenses are strictly included in the tax control system, making their operating costs increase, which is bound to increase the sales price of raw materials accordingly; The pressure of the largest terminal medical institutions in the downstream comes from the net profit reduced by the gradual implementation of "zero plus" of drugs The pressure transmission between the upstream and downstream of the supply chain will force the meager profit space of the intermediate pharmaceutical distribution enterprises to be further squeezed Therefore, the pharmaceutical distribution enterprises are facing the severe test of the market Upgrade opportunity: promote integrated supply chain management and control with the arrival of "two ticket system", whether imported or domestic varieties, prefer to cooperate with large pharmaceutical circulation enterprises, the main reason is: large pharmaceutical circulation enterprises have strong capital advance ability, which can guarantee the receivables of upstream pharmaceutical enterprises; With GSP standard storage, distribution and terminal network coverage; strong business and sales team to support the channel management of drugs Crisis and opportunity coexist: with the help of "two vote system", the supply chain management and control objectives of national / regional (provincial) integrated operation of pharmaceutical circulation enterprises can be realized According to the current provincial seminars and draft for comments, the qualitative issues of "two vote system" are mainly focused on: National Agency identification of imported varieties (according to the opinion drafts of Fujian Province and Jiangsu Province, the manufacturer is not counted as one vote in this paper); pharmaceutical dealers identification; intra Group commercial allocation identification; Whether three tickets are allowed in remote areas; identification of trusteeship hospital, etc According to a source, the implementation opinions on Implementing "two vote system" in centralized drug procurement of public medical institutions (Trial) issued recently by the National Medical Reform Office (Document No 100) pointed out that: the transfer of drugs to wholly-owned or holding subsidiaries within a drug distribution group enterprise may not be regarded as one vote, but it is allowed to issue an invoice at most once, and the price increase must be controlled within a certain range In addition, drug distribution enterprises distribute drugs to remote and inconvenient township (town) and village medical and health institutions, and are allowed to issue another drug purchase and sale invoice on the basis of "two ticket system" No matter whether there is any change in the later specific implementation regulations, we will strictly define the "two vote system" with the initial attitude of the central government Supposing that the internal allocation of pharmaceutical distribution enterprise group is regarded as one vote, this paper analyzes the internal optional business structure of commercial company group under "two vote system" from two dimensions of imported and domestic varieties (see Figure 1 and Figure 2 for details) Since the national agent of imported varieties is recognized as the manufacturer, the starting point of the first bill issuing in the pharmaceutical circulation will start from the general agent (distribution) of import It can be found that in the case of Figure 1, the internal allocation of the national distribution group is actually equivalent to the external commercial allocation At this time, the allocation within large-scale circulation enterprise groups can choose the first vote of issuing documents, either provincial companies (secondary companies) or directly sold to local and municipal companies (tertiary companies) For domestic pharmaceutical enterprises without self built sales team, there are three options for issuing the first ticket However, no matter imported or domestic varieties, the biggest difference of the first choice result is summed up in two aspects: the number of accounts opened by upstream pharmaceutical enterprises in commercial companies; and the local competent authorities of tax payment are different The inevitability of the national integration platform from the aspect of optimized allocation of supply chain integration resources, the upstream industry tends to cooperate with a large circulation enterprise with wide network coverage and abundant funds National circulation representative enterprises with such resources (Sinopharm holding, China Resources pharmaceutical, kyushutong, Shanghai pharmaceutical, etc.) will first be favored by upstream pharmaceutical enterprises As we all know, the concept of modern supply chain pursues flat channels, high fidelity of information transmission, efficient service and energy saving Therefore, it is necessary to share the information between the upstream and downstream of the supply chain, and to break the pattern of warehousing and distribution logistics to minimize the total cost of the supply chain However, medicine has its special attributes and historical factors, the drug supply chain has been in a relatively primitive closed mode Before the "two vote system", due to the inter regional policies and local protection and other factors, pharmaceutical distribution enterprises could not break the regional restrictions to achieve the integration of the national supply chain National pharmaceutical circulation enterprises (Sinopharm holding, China Resources pharmaceutical, kyushutong) have been building an integrated operation platform in the province However, the arrival of the "two vote system" has changed the circulation environment, and national pharmaceutical circulation enterprises will face a choice: whether to issue the first ticket to the national distribution platform or to the provincial distribution platforms? From the perspective of the integrated management and control of the purchase, sale and storage of the supply chain, the ultimate goal is to achieve the national integration of the supply chain business platform In this way, we can not only use the volume data and historical sales records of the provincial bidding procurement platform to realize the accurate calculation of the procurement plan, but also provide a more accurate reference for the upstream pharmaceutical manufacturing enterprises to develop the production plan, so as to achieve the accurate plan In the current pharmaceutical circulation market environment, how to choose is a strategic choice The author believes that the selection criteria must be result oriented, that is, the fixed cost and marginal income of the two schemes can be calculated through repeated deduction However, no matter what the choice is, the ultimate goal is to form a centralized and unified upstream and downstream management system, scientific and compliant control of the purchase, sale and storage process.