Yangcheng Evening News reporter Chen Zeyun Intern Zhang Song
The curtain of centralized collection of Chinese patent medicines is being opened. On September 14th, Guangdong Pharmaceutical Trading Center issued the Procurement Document with Quantity of 58 Pharmaceutical Groups such as Guangdong Alliance Qingkailing (Draft for Comment). The alliance regions participating in this centralized procurement include Guangdong, Shanxi, Henan, Hainan, Ningxia, Qinghai and Xinjiang, and the selected drugs in the centralized procurement of proprietary Chinese medicines in the seven provinces and regions are all the dosage forms and specifications of 58 generic drugs with large consumption and high purchase amount in the basic medical insurance catalogue.
The reporter of Yangcheng Evening News found that the 58 drugs collected by Guangdong Alliance are all proprietary Chinese medicines, among which 36 are exclusive varieties, such as Xiyanping, Lianhua Qingwen and Xiaoer Chiqiao Qingre, which have sold over 100 million yuan. There are also many commonly used drugs such as Qingkailing, antiviral oral liquid and orange phlegm cough. This also means that after chemical drugs, the "price-cutting boots" hanging on the head of Chinese patent medicines will finally fall.
58 "high price and large quantity" Chinese patent medicines were included in Guangdong centralized procurement.
According to the "Draft for Comment", the range of varieties purchased by the pharmaceutical group this time is all the dosage forms and specifications of 58 generic drugs with large consumption and high purchase amount in the basic medical insurance drug list. The main participants in the procurement are all public medical institutions in the alliance area, and medical institutions and designated pharmacies designated by medical insurance can participate voluntarily.
The centralized procurement of Chinese patent medicines led by Guangdong has made detailed requirements for dosage forms, quotation requirements and successful selection. The quotation of enterprises must be based on "daily average treatment expenses". On the basis of effective declared price, the lower the price, the easier it is to win the bid.
According to the "Draft for Comment", 58 kinds of Chinese patent medicines with high price and large quantity, including 36 exclusive varieties such as Aidi, Shenkang and Lianhua Qingwen, cover many popular Chinese patent medicines in the market. According to the data of Minenet, many drugs such as Suhuang Zhike Capsule, Xiyanping Injection, Bering Capsule, Lanqin Oral Liquid, etc., which are included in the centralized procurement alliance, will all exceed 100 million yuan in terminal sales in public hospitals in key cities in 2020.
Actively explore the centralized collection of Chinese patent medicines in many places
Under the normalization of centralized procurement, the centralized procurement of generic drugs and medical devices has gone through many rounds, and promoting the centralized procurement reform of Chinese patent medicines has become the key direction of the next medical reform. It has become a trend that the pace of centralized procurement extends from generic drugs to proprietary Chinese medicines. On August 9th, the website of the National Medical Insurance Bureau clearly revealed in the public reply "Suggestions on Accelerating the Centralized Procurement of Chinese Medicine and Formula Granules" that the next step, the Medical Insurance Bureau will, together with relevant departments, improve the quality evaluation standards of Chinese patent medicines and formula granules, adhere to quality priority, take clinical demand as the guide, and start with high-priced and large-quantity varieties to scientifically and steadily promote the centralized procurement reform of Chinese patent medicines and formula granules.
"At present, Chinese patent medicines have not yet risen to the level of national collection, or the provinces are taking the lead in trying." Shi Lichen, founder of Dingchen Consulting, told the Yangcheng Evening News reporter that the rapid progress of generic drug collection was due to the previous implementation of a consistency evaluation system, which allowed all generic drugs participating in the collection to compete in the market under the premise of unified specifications and unified efficacy. The difficulty of centralized collection of Chinese patent medicines stems from the fact that the origin, processing technology and dosage forms of different Chinese patent medicines are not uniform, which also leads to different curative effects of the same medicine.
The reporter found out that before Guangdong, Qinghai Province, Jinhua, Zhejiang Province, Puyang, Henan Province and other places had carried out centralized exploration for some varieties of Chinese patent medicines with large demand and high amount. Among them, in November 2019, Jinhua City, Zhejiang Province included 180 Chinese patent medicines in the procurement with quantity. In May 2020, the catalogue of procurement with quantity published by Qinghai Province also included traditional Chinese medicine injections such as Xuesaitong, Xueshuantong, Tanreqing and Xiyanping.
How much to reduce the price depends on the centralized purchasing strategy
"The purpose of centralized collection of Chinese patent medicines and centralized collection of chemical medicines is the same, both of which are to promote drug price reduction. However, because most of the products included in centralized mining are exclusive varieties, how much the price reduction can be reduced depends on the centralized mining strategies of various provinces and cities. " Shi Lichen said.
How much can the price reduction of centralized collection of Chinese patent medicines be reduced? Taking the previous regional centralized procurement as an example, in the publicity list of the second batch of enterprises to be selected for purchasing drugs with quantity published by Jinhua City, Yunnan Baiyao selected compound Danshen tablets (0.3g/ tablet) at a price of 0.18 yuan, and Zhejiang Kangenbei selected ginkgo leaves at a price of 0.71 yuan/tablet (containing 19.2mg of total flavonol glycosides and 4.8mg of terpenoid lactones). The reporter found that the price reduction of the above drugs is about 20%-30%, which is relatively mild compared with the price reduction of chemical drugs.
Shi Lichen pointed out that for exclusive varieties, the incentive for manufacturers to reduce prices will not be particularly great. However, it is worth noting that the exclusive variety of proprietary Chinese medicines is a relative concept, which is mainly measured from the perspective of the number of manufacturers. If it is extended to the level of indications, many proprietary Chinese medicines generally do not have the so-called exclusive efficacy. Therefore, if the indications or functional indications are similar, the exclusive variety of proprietary Chinese medicines may not be exempted, and once it is included in the centralized purchase, it may face competition with other varieties with indications and functional indications, which will also bring pressure on enterprises to reduce prices.
Involving a number of A-share listed companies.
The reporter noted that at present, the collection of Chinese patent medicines led by Guangdong belongs to the stage of soliciting opinions, but if it falls, it may have an impact on the market structure of related drugs.
Among them, Qingkailing series drugs and Zishen Yutai Pill, the exclusive variety, are important products of Baiyun Mountain. Baiyun Mountain’s 2020 annual report shows that Qingkailing Granules achieved a revenue of 174 million yuan, with a gross profit margin of 53%, and the sales volume of Qingkailing series reached 461 million (bags/sticks/granules); The annual revenue of Zishen Yutai Pills was 342 million yuan, with a gross profit margin of 85.20%. The annual sales volume was 5.67 million boxes, of which 4.138 million boxes were purchased by medical institutions.
Xiangxue Pharmaceutical, another local listed company in Guangzhou, whose antiviral oral liquid and orange phlegm cough are also planned to be included in the list of centralized purchase. According to Xiangxue Pharmaceutical’s 2020 annual report, antiviral oral liquid and orange series brought 407 million yuan and 119 million yuan respectively, accounting for 17.12% of the company’s current revenue. These two kinds of drugs are mainly concentrated in pharmacies and other terminals.
Lianhua Qingwen is an important product of Yiling Pharmaceutical. According to the 2020 annual report of Yiling Pharmaceutical, its continuous flower clearing contributed 4.256 billion yuan in revenue, accounting for 48.46% of revenue, up 149.89% year-on-year. Yiling Pharmaceutical Co., Ltd. said that Lianhua Qingwen’s market share in retail terminal cold medicine/heat-clearing category reached 9.86% in 2020, and Lianhua Qingwen’s market share reached 37.9% in the sales revenue of proprietary Chinese medicines for cold medicine in China public medical market in the first half of 2020.
Tasly owns an exclusive variety of Compound Danshen Dripping Pills. Based on the company’s 2020 financial report, the total revenue of cardiovascular and cerebrovascular drugs including Compound Danshen Dripping Pills is 4.165 billion yuan (the data of Compound Danshen Dripping Pills is unknown). Last year, the drug was purchased by medical institutions for 107 million boxes. Buchang Pharmaceutical, the research and development company of Naoxintong Capsule, has a total revenue of 12.083 billion yuan for cardiovascular and cerebrovascular diseases (including Naoxintong Capsule) last year. The two packaging specifications of the drug are "36 capsules/box" and "48 capsules/box", and the annual purchase volume of the hospital is 41.22 million boxes and 56.84 million boxes respectively.
According to industry analysis, because the capital market is relatively unfamiliar with the collection of traditional Chinese medicine, the implementation of the policy may cause certain emotional impulses. In recent years, Chinese patent medicines have been suppressed by the policy, and the overall sales growth rate has continued to slow down. Due to the influence of auxiliary drug monitoring and medical insurance payment restrictions, the sales of some large varieties of Chinese traditional medicine injections have continued to decline. If the quantity procurement is introduced later, the Chinese patent medicine market will face greater uncertainty. There is a lack of data on the safety and effectiveness of proprietary Chinese medicines, and the product specifications are more complicated. At present, the country is expected to introduce proprietary Chinese medicines for re-evaluation after listing, and further standardize the proprietary Chinese medicine market. In the long run, it is expected that the introduction of centralized collection of proprietary Chinese medicines will benefit leading enterprises with high-quality resources, which is expected to further enhance the concentration of the industry.
News depth
How to avoid the upstream price increase making it difficult for the winning bidder to perform?
There should be more supporting policies for centralized collection of Chinese herbal medicines.
"The varieties of Chinese patent medicines that are planned to be collected this time involve 216 kinds of Chinese medicinal materials, of which 76 kinds of medicinal materials have increased by more than 10%, accounting for 35.19%, and the overall increase is 21.86%, which is higher than the average increase of market conditions in the past five years." Jia Haibin, founder of the big data platform of Tiandi Yuntu Chinese medicine industry, told the Yangcheng Evening News reporter that centralized collection of Chinese medicine is the only way for medical insurance to control fees and reduce drug prices, but the market background of continuous general increase in Chinese medicine prices should be included in the policy consideration, otherwise it is easy to happen that the winning bidder cannot fulfill the delivery due to the price increase of upstream Chinese medicine.
Jia Haibin pointed out that Chinese medicine is different from standard products such as chemical drugs and biological products, and the source of raw materials is the core of its quality control. At present, it is still difficult to fully implement the policy of centralized collection of traditional Chinese medicine, and it is highly probable that a small range and a small number of varieties will be tested to improve standards and processes and make up for policy loopholes. With the continuous implementation of centralized purchasing, on the one hand, major enterprises will continue to increase their efforts to enter the producing areas and strengthen the strategic reserve of core raw materials. On the other hand, the centralized procurement organization department will also tilt towards "the traceability of authentic medicinal materials" in terms of scoring standards and quality level division, which will play a positive role in accelerating the construction of traceability system of Chinese herbal medicines and improving the overall quality level of Chinese herbal medicines.
"It is suggested that the channels of appeal should be further opened." Shi Lichen suggested that in the centralized procurement of proprietary Chinese medicines, it should be suggested to establish a smoother communication mechanism, so that the selected enterprises can timely feedback the supply problems of raw materials in the performance of the procurement contract, and introduce more supporting policies to ensure the stable supply of drugs after winning the bid.