4 lessons from pharmaceutical companies

Four issues that enterprises should pay attention to when centralized procurement is normalized

01 The national mining cuts off the heat supply without reducing

Recently, North China Pharmaceutical took the initiative to abandon the selected products and was severely punished.

Regarding the reasons for participating in the centralized procurement and then voluntarily giving up, the company responded that after the selection of ibuprofen sustained-release capsules, due to insufficient existing production capacity, the responsible unit (production unit) did not pay enough attention to it, and related registration and change policy adjustments, plus The impact of the epidemic (the new crown epidemic in Shijiazhuang City repeated in early 2021), resulting in the company's inability to guarantee normal supply

Facing the increasingly enthusiastic online public opinion, the United Procurement Office couldn't sit still and had to come out to put out the fire

The Joint Procurement Office believes that at present, the state has organized 5 batches of centralized drug procurement, covering 218 drugs.

The state organizes centralized drug procurement to treat all companies equally.

Regarding North China Pharmaceutical’s breach of contract, the United Procurement Office has suspended North China Pharmaceutical’s participation in the bidding qualifications for nationally organized drug procurement from August 11, 2021 to May 10, 2022

02 Pharmaceutical companies need to learn 4 lessons

So what lessons should be learned from this incident as a pharmaceutical company?

1.

Although North China Pharmaceuticals does not think that it is the price problem that voluntarily abandons the supply of selected drugs in the Shandong market, in fact, only in terms of the lack of supply due to the "insufficient capacity", is there no fundamental reason behind it? The shadow of price?

Of course, this is a matter of fact regarding the restriction of North China

In fact there are many companies spending is rigid, such as labor costs, material consumption water and electricity costs, R & D and innovation costs

2.

First, the existing production capacity is insufficient, and we hope to rapidly expand production capacity but cannot; second, the responsible unit (production unit) does not pay enough attention to it, which is its own problem, insufficient preparation for market supply after the election, and weak response; third, related registration and change policies The adjustment is a national policy factor; the fourth is the impact of the epidemic, mainly due to the recurrence of the new crown epidemic in Shijiazhuang City, which is a market reason

Although some people believe that some of these statements about North China's restrictions are untenable, such as related registration and change policy adjustments, as an established large-scale enterprise, these policy adjustments and formalities should not be a problem

This also reminds pharmaceutical companies that centralized procurement should not only consider prices, but only to win the market.

3.

For a long time, the problem of inflated drug prices in China has been serious.
The prices of commonly used drugs are as high as 2-3 times the average price of major international countries
.
At the same time, the sales expenses of mainstream pharmaceutical companies accounted for nearly 40% of sales revenue, which was significantly higher than that of other consumer goods industries, which not only increased the burden on the masses and medical insurance funds, encouraged unhealthy trends in the industry, but also restricted the high-quality development of the medical and health industry
.

The original intention of carrying out the reform of centralized procurement with volume was to squeeze out the falsely high drug prices, to promote the return of drug prices to a reasonable level, to reduce the burden on the masses, and to make the drugs more affordable for patients
.

It is precisely based on this that the country must organize centralized drug procurement and insist on the decisive role of the market in price formation.
The rules are open and treated equally, so that all market entities have equal opportunities for competition.
At the same time, companies are required to quote prices not lower than the cost in the procurement tenders.
, The winning result is produced through fair competition
.

This is also the case.
On March 5, 2019, the opinions on deepening the reform of the medical security system issued by the Central Committee of the Communist Party of China and the State Council clearly require: deepening the reform of the centralized procurement system for medicines and medical consumables
.

Adhere to the integration of recruitment and procurement, linking volume and price, and fully implement centralized procurement of medicines and medical consumables
.
Based on medical insurance payment, establish a provincial bidding and procurement platform integrating bidding, procurement, transaction, settlement, and supervision, and promote the construction of a regional and national alliance procurement mechanism to form a fully competitive, reasonable price, and standardized and orderly supply guarantee system
.
Promote direct settlement between medical insurance funds and pharmaceutical companies, and improve the coordination mechanism between medical insurance payment standards and centralized procurement prices
.

What is more noteworthy is that "promoting the reform of centralized procurement and use of drugs and consumables organized by the state" is also included in the 14th Five-Year Plan for the National Economic and Social Development of the People's Republic of China and the 2035 long-term goal
.

Based on previous practices, the state believes that the reform of centralized drug procurement has achieved significant results, and it has played an important role in improving people's livelihood and welfare, promoting the reform of the three-medicine linkage, and promoting the healthy development of the pharmaceutical industry
.

On January 28, 2021, the General Office of the State Council issued an opinion on promoting the normalization and institutionalization of centralized drug procurement (Guobanfa [2021] No.
2)
.
The opinion is clear, in accordance with the principle of ensuring basic and clinical protection, focus on including drugs with large amounts and high purchase prices in the basic medical insurance drug catalogue into the procurement scope, and gradually cover all kinds of clinically necessary and reliable drugs on the market in China, so that they should be adopted.
Exciting
.

The drugs that have passed the evaluation of the consistency of the quality and efficacy of generic drugs are given priority to be included in the scope of procurement
.
If the qualified drugs reach a certain amount or amount, the centralized procurement will be initiated
.
Actively explore suitable procurement methods for "orphan drugs" and shortage drugs to promote stable supply
.

In principle, holders of marketing authorization who have obtained the drug registration certificate within the scope of centralized procurement and meet the requirements of centralized procurement in terms of quality standards, production capacity, supply stability, etc.
, can participate in principle
.
Enterprises participating in centralized procurement should make promises on drug quality and supply guarantee
.

All public medical institutions (including military medical institutions) should participate in centralized drug procurement, and medical insurance designated social medical institutions and designated pharmacies shall follow the management requirements of designated agreements
.

Therefore, as a pharmaceutical company, we must realize that centralized procurement is a long-distance race with no end in sight, not a 100-meter sprint, at least for now
.

Therefore, enterprises should not only think about the gains and losses of one city and one place, and all enterprises that want to survive for a long time should not hesitate to kill each other at their expense
.
It should also be realized that, in fact, centralized procurement is a fighting field.
After price shopping, the pain can only be borne by the enterprise itself
.
Therefore, companies must have a strategic vision and strategic determination
.

4.
It is necessary to do a good job in corporate management, improve quality, reduce burdens, increase efficiency, and increase revenue and reduce expenditures

Judging from the event that the restriction of North China ultimately fails to guarantee normal supply, it is also related to the internal management and heavy burden of the enterprise
.
I believe there must be something unspeakable here
.

It stands to reason that there are a total of 4 selected companies for ibuprofen sustained-release capsules, among which North China Pharmaceutical’s selected price is the highest, at 8.
04 yuan per box (30 capsules)
.

Before the centralized procurement, the sales price of North China Pharmaceutical's ibuprofen sustained-release capsules on the centralized pharmaceutical procurement platforms of Tianjin, Shanxi, Qinghai and other provinces and cities was close to the selected price, but due to the lack of volume procurement, sales of the drug in 2020 Only more than 500,000 yuan
.

After the centralized procurement, using the method of "quantity and price linkage", it was agreed that North China Pharmaceuticals would supply 79.
75 million tablets in Shandong and other seven provinces and cities at the selected price.
The annual sales could exceed 20 million yuan.
However, North China Pharmaceuticals failed to fulfill the contract due diligence
.

Obviously, from this point of view, if other companies can supply, North China should not take the initiative to give up
.

There is a voice saying that as a large state-owned enterprise, North China Restriction is characterized by heavy burdens, but the market does not accept these.
Just as the market does not believe in tears, as an enterprise under the background of centralized procurement, it must change its concept as soon as possible.
Long-term and perseverance, earnestly study centralized procurement policies and rules, and spare no effort to improve quality, reduce burden, increase efficiency, increase revenue and reduce expenditures within the enterprise, and reduce all unnecessary expenditures
.

In short, centralized procurement will profoundly affect and completely change the pharmaceutical ecology.
From the perspective of future trends, centralized procurement will extend from medicines and consumables to a wider range of medical products such as medical equipment.
Therefore, as a company, you must learn to adapt and become a game master.
This is the same as enterprise product research and development as the key to enterprise survival and development
.