Implementing a basic drug system will change the pharmaceutical industry landscape

The "Draft for Comment" of the new medical reform plan has been issued. While arousing public debate, industry insiders are also trying to find business opportunities. Analysts said that due to the “Draft for Comment” clearly defining measures such as “point production”, “centralized procurement” and “mandatory use” of essential medicines, large-scale state-owned pharmaceutical companies may benefit from it, and the industry may reshuffle on a large scale.
General medicine vaccine benefit
Essential medicines in the WHO refer to "medicines that can meet the priority health care needs of the population" and generally need to meet the following conditions: based on clinical needs; careful selection of effective quantities; good supply; low cost. According to the “Draft for Comment”, China will reasonably determine the types and quantities of essential drugs in China in accordance with the principles of “prevention and control necessary, safe and effective, reasonable price, ease of use, and equal emphasis on Chinese and Western medicines”.
The core of the implementation of the essential drug system lies in its use. In order to ensure the use of basic drugs in clinical practice, the “Draft for Commenting” stipulates that basic medical and health institutions such as urban community health service centers (stations), township health centers, and village clinics should all use essential medicines, and other types of medical institutions also Use basic medicine as the preferred drug and determine the ratio of use. A medical reform specialist said that the proportion of essential drugs used in major urban hospitals will reach 40%.
According to statistics, as of the end of 2006, there were nearly 300,000 registered medical institutions (excluding village clinics) nationwide, including 19,000 hospitals, 23,000 community health service centers (stations), and 40,000 rural township hospitals. (Health clinics, clinics, nursing stations) 206,000. This shows that once a product is included in the basic drug list, its sales prospects are considerable.
An industry consultant said that according to the current national selection principles, generic pharmaceutical companies, especially Chinese patent medicine companies, are more likely to benefit. “Basic medicines are generally generic medicines. From the point of view of the revision of our country's essential medicines list, proprietary Chinese medicines account for about two-thirds of the basic medicines list.” The person thinks that the proportion of Western medicines selected for this basic medicine will not change. Great changes have occurred.
Since 1996, our country has established a national list of essential medicines, which is revised every two years. The most recent revision was in 2004, identifying 2,033 essential drugs, including 773 western medicines and 1,260 Chinese medicines.
According to experts from the Ministry of Health’s Essential Drug System, some of the vaccines needed for public health services may be included in the Essential Drug List. It is foreseeable that such products will also have better market prospects.
The “Draft for Soliciting Opinions” shows that China will adopt the methods of fixed-point production or centralized procurement, direct distribution, and unified pricing for essential medicines. An official in the price department said that the prices of essential medicines will be lowered, "at least there is a possibility of downward adjustment."
The official believes that due to the realization of fixed-point production and centralized procurement, the scale effect of products will be reflected, and the costs of fixed-point production enterprises will be apportioned. With compulsory use, fixed-point enterprises will not need more marketing and marketing, and their marketing costs will be reduced. Therefore, it is possible to lower prices, but this does not mean that the profits of enterprises will be reduced, and the state will surely ensure the reasonable profits of production companies.
Industry insiders pointed out that because the state's basic medicines are implemented by the state, they will implement "tendering, production, and other methods" on the supply of products. Large-scale, large-scale, and powerful state-owned large-scale enterprises may have more opportunities. Foreign-funded enterprises with relatively high drug prices are likely to miss basic drugs because of the “high price” of their products; private enterprises rarely win if they lack scale advantages.
Industry may reshuffle
Throughout the “Draft for Soliciting Comments”, the biggest controversy among the industry is the design of the supply and marketing system for the basic pharmaceutical system.
"Bid-point production," "centralized procurement," and "direct delivery" have made pharmaceutical companies happy and happy. The deputy general manager of Jiuzhoutong Group, Niu Zhenggan, is worried that the supply and marketing model designed by the “Draft for Comment” will bring about administrative monopoly, so that the power for rent-seeking and the industry will be inefficient. According to Zhang Xiaolong, general manager of marketing of Wuhan Aimin Pharmaceutical Co., Ltd., for the pharmaceutical industry, the direct result is a change in the industry landscape.
"As soon as the provisions of the national production and supply system for essential drug systems are implemented, they will directly change the pattern of the Chinese pharmaceutical industry. Large-scale mergers and acquisitions and reshuffling are inevitable," Zhang Xiaolong said.
He believes that the basic drugs such as "targeted tender production or centralized procurement," "direct distribution" and other measures mean that products that are used as basic medicines in the country need neither promotion nor promotion, and that wholesale enterprises can only complete procurement tasks issued by the state. . The commercial companies that originally distributed drugs for basic medical institutions will lose the qualifications for games in the Chinese pharmaceutical market once they cannot be designated as legitimate distributors by the government; most of those so-called “medicine drug professionals” will withdraw from the pharmaceutical industry, only a few Some pharmaceutical professionals with professional qualifications may seek cooperation with pharmaceutical manufacturers with independent intellectual property rights in the form of commissions.
“The effects of fixed-point production on pharmaceutical companies may not be significant. After all, basic medicines are limited, and the products that each company can produce are not limited to essential medicines. Enterprises can also fight for products outside the basic drug list and within the scope of medical insurance reimbursement. But for circulation As far as the link is concerned, the impact is really great, said the above consultant.
One person in the industry also believes that although the relevant person stated that for the production enterprises and circulation enterprises, the country will not be set for life at the appointed time, and the qualification will be adjusted after one or two years. However, "For distribution companies, once they have not been eligible for distribution in the first two years, how can they be guaranteed that they will be eligible to participate in such fixed-point tenders after two years?"
Niu Zhengqian believes that in the context of the new healthcare reform, companies must adopt "competitive qualifications" and "share the competition" methods in order to survive and develop.
In Zhang Xiaolong's view, in the future, if Chinese pharmaceutical companies want to survive, they must have the scale and strength of intensive large-scale production, or have the ability to independently innovate and upgrade their technologies; and if pharmaceutical companies want to survive, they must have good network coverage. Ability, or have professional academic promotion capabilities. "Those who have no innovation and technological advantages, no quality improvement advantages, three no scale cost advantages, four no professional promotion advantages of pharmaceutical companies, will be blocked in the ranks of being protected and protected, becoming the object to be integrated." Zhang Xiaolong said .

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