How to overcome the difficulties in the industry when the signal of centralized procurement of Chinese patent medicines is transmitted?

On August 9, 2021, the National Medical Insurance Administration issued the "Response of the National Medical Insurance Administration to Recommendation No.
4126 of the Fourth Session of the Thirteenth National People’s Congress.
" On the basis of this, we adhere to the principle of giving priority to quality, being clinically demand-oriented, starting with high-priced and large-volume varieties, and scientifically and steadily advancing the reform of centralized procurement of proprietary Chinese medicines and formula granules
.

”

The release of this reply means that the advancement of bulk purchases of Chinese patent medicines and even granules has been put on the agenda
.

However, as the first batch of people in China who participated in the centralized bidding and procurement of medicines and has been engaged in large data research on Chinese medicine for a long time, the author is not optimistic about the purchase of Chinese medicine in a short period of time

The reason for saying so, we might as well think about it:

01

01

What is the bulk purchase of Chinese medicine?

What is the bulk purchase of Chinese medicine?

"Pharmaceutical procurement with volume" refers to the clarification of the procurement quantity when bidding or negotiation during the centralized procurement of medicines, so that companies can quote specific quantities.
This procurement method has been achieved by our country's pharmaceutical procurement for many years.
Goal
.

In fact, this method is also an upgraded version of the centralized bidding and procurement of drugs for national medical institutions since 2000.

Let's first come to the following basic definitions of popular science:

First, which Chinese medicines can be included in volume procurement? "Traditional Chinese medicines" that can be purchased in quantities, mainly include proprietary Chinese medicines and Chinese herbal medicines (including new->
.

Second, what is volume purchasing? Volume procurement is relatively centralized procurement, which can be understood as large-scale "group purchase" or "joint group", that is, many hospitals form a "purchasing consortium" to conduct similar "joint group" procurement
.

At present, in areas where volume procurement is implemented, the procurement of products needs to account for 60%-70% of the total usage, which is equivalent to a large "group purchase"

Third, which institutions can carry out centralized procurement and quantity procurement? At present, it is mainly enforced in non-profit medical institutions under the supervision of medical insurance and medical and health authorities (note that it is not non-profit or non-profit)
.

Social organizations such as retail pharmacies can also voluntarily organize a "purchasing consortium" to conduct "group buying", referred to as "GPO procurement" for short, but it is often not compulsory by policy

Fourth, what does "4+7" volume purchase mean? It refers to the 11 pilot cities that the state promoted the first batch of mass procurement, including 4 municipalities directly under the central government, 7 provincial capital cities: Beijing, Tianjin, Shanghai, Chongqing, Shenyang, Dalian, Xiamen, Guangzhou, Shenzhen, Chengdu, Xi’an, basically Covers half of the domestic clinical drug circulation
.

These cities will take out more than 50% of the procurement share each year to bring volume procurement, which has a major bearing on the market share of the production company, and it is a matter of life and death

Therefore, once the country promotes the "4+7" of Chinese medicines and even purchases in quantities across the country, it will surely become a key issue for Chinese medicine companies, which is expected to cause a major reshuffle of the Chinese medicine industry, and the industry must pay attention to it
.

02

02

Why is it difficult to implement bulk procurement of Chinese medicine for a long time?

Why is it difficult to implement bulk procurement of Chinese medicine for a long time?

Before answering this question, we must clarify two points: one is the centralized bidding and procurement of Chinese patent medicines, which has been launched around 2001, and the effect of reducing fees is very obvious, but it has not yet been included in the "4+7" volume procurement; the second is The centralized bidding and procurement of Chinese herbal medicines, as early as 2001, in the documents 308 and 309 jointly issued by the five ministries and commissions of the State Council, all proposed "actively carry out the exploration of centralized bidding and procurement of Chinese herbal medicines"
.

However, it was not until 2018 that sporadic attempts were carried out in Shanghai, Gansu and other places, and the effect was not obvious; in July 2020, 12 provinces including Shandong and Inner Mongolia directly established a joint collection platform for Chinese medicinal materials, preparing for large-scale development of Chinese medicinal materials belt Mass procurement activities, but the thunder and the rain are small, so far there is no more information
.

Why can't the centralized bidding procurement or mass procurement of Chinese medicine products continue?

The surface reason is that the overall purchase of Chinese medicine products without proprietary Chinese medicines is relatively small.
The overall purchase of decoction pieces by medical institutions nationwide is less than 56 billion yuan, which is only a fraction of the total purchases of chemical drugs and medical devices, and lacks attention
.

But the deep-seated reason is that there are two bottlenecks that have not been able to achieve breakthroughs for a long time:

One is the standard issue

Traditional Chinese medicine is the actual weapon of Chinese medicine, and the individual needs are very obvious.
A large number of raw medicinal materials and even decoction pieces are agricultural and sideline products, which are non-standard products
.

You might say that there are standards for decoction pieces in the Pharmacopoeia, but that is only the minimum quality threshold, which does not cover the complex and changeable specifications of the commodity circulation of Chinese medicinal materials

For example, 280 and 380 wolfberry, Ningxia and Qinghai, new and old products, although they all meet the pharmacopoeia standards, can they be treated as the same product? Without a unified standard, how to divide the quality level? If you simply use the "Pharmacopoeia" standards to evaluate products, it will undoubtedly lower the quality of proprietary Chinese medicines and granules as a whole, and destroy a large number of well-known Chinese medicine brands
.

Shanghai, Zhejiang and other places are preparing to separate products that use GAP bases or traceability base materials as targets, but everyone in the industry knows that the construction of domestic GAP bases is difficult to implement.
As a criterion?

At the same time, even if you have established a commodity circulation standard, will this standard be recognized by both the supply and demand sides? How to run through the whole process of Chinese medicinal raw materials, Chinese medicinal pieces, granules, manufacturers, products and demand side, this is a very tricky and ambitious project, and it is by no means a single link that can be straightened out
.

The second is the price issue

The price issue is divided into three levels:

The first is how to define the cost of different quality Chinese medicinal materials
.

Origin, growth cycle, harvest time, content, appearance, processing technology, etc.

The second is the issue of price fluctuations during centralized procurement
.
The attributes of most of the agricultural and sideline products of Chinese medicinal materials have led to the reality that they still have to rely on the sky to feed themselves
.
In the past five years, the price of domestic Chinese medicinal materials has fluctuated more than 18.
5%.
The price of the same forsythia will be 55 yuan in August 2020 (kilo price, the same below), and it will rise to 115 yuan by 2021; the birthplace has soared from 11 yuan.
At 35 yuan, how do you let the winning bidder complete the delivery at the original price?

Allowing price increases violates the rules of the game of winning bids at low prices under the same quality, and how is the basis for price increases accepted? If price increases are not allowed, the winning bidder will be miserable, and it is very likely to lose money and perform the contract; if the roasters continue to add fuel to the fire and take advantage of the situation to monopolize the bidding product raw materials to raise the price, the company will lose it as trousers.
In the end, it is not ruled out.
The severe consequences of winning the bid is death
.

More critical is the problem of higher prices
.
At present, production companies generally adopt the principle of "bidding and bidding, and the lowest price is available" for raw material procurement.
Various defaults and deductions of supplier payments, and "low-limit feeds" also exist for a long time, thereby minimizing the cost of raw materials
.
If the so-called "authentic quality and conscientious concoction" are really achieved through centralized procurement activities, so that the source and cost of raw materials for those brand companies will be revealed to the world, they will inevitably face the embarrassment of "increasing and higher" due to the improvement of quality.
In the situation, the centralized procurement wanted to reduce the price and control the fee, but the price of the centralized procurement rose sharply.
Can the medical insurance department accept it? This is really a paradox
.

To sum up, when designing a collection of traditional Chinese medicine activities, practitioners often fail to consider the complexity of traditional Chinese medicine products, especially when it comes to standards and prices, they lack fundamental countermeasures and a convincing evaluation system.
There are many obstacles in the actual promotion, and most attempts eventually come to an end
.

03

03

How to break the situation in the centralized procurement of Chinese medicine?

How to break the situation in the centralized procurement of Chinese medicine?

It is precisely because of the complexity of the centralized procurement of traditional Chinese medicine that the procurement of traditional Chinese medicine in medical institutions has long been in a blind spot or even a "grey area" in supervision
.

The so-called "high-end decoction pieces" and granules "sale with gold" such as bezoar, cordyceps, Tianshan snow lotus, and nine immortal grasses have long been open secrets in the industry, seriously undermining the principle of "openness, fairness, and transparency" in drug circulation
.
Therefore, the centralized procurement of Chinese medicine must be implemented as soon as possible
.
But in the face of numerous practical difficulties, how to break the situation?

The author believes that the key to breaking the situation in the centralized procurement of traditional Chinese medicine is to use the big data platform of the traditional Chinese medicine industry to straighten out the industrial chain and realize the underlying logic of traditional Chinese medicine products from raw material production, processing, circulation to sales, so as to achieve a closed loop
.

In this closed-loop front end, order agriculture is constructed based on the concept of blockchain, which is directly linked to the annual orders of the demanding enterprises.
The product codes will only be sold out, and external capital will not be able to intervene to ensure the stability of supply prices; in the circulation link, it is full The two-dimensional code traceability of the process; in the sales link, high-quality and high-price encouragement of order agriculture and full traceability, so that the company’s traceability investment is worthwhile; finally, it should also complete basic functions such as standardized warehousing logistics, third-party testing, etc.
and so on
.

In this closed-loop system, the construction of a big data platform for the traditional Chinese medicine industry is of vital importance and is the core starting point
.
All origin information, product information, price fluctuations, practitioner data, supplier and demander data, quality standards and other information will be included in this big data platform, and the bottom layer will use unified coding to realize the whole process
.

Only when the above preparations are completed, can the centralized procurement of Chinese medicine have the basis for implementation and the original intention of the medical insurance department to increase the quality control fee
.

I believe that the centralized procurement of traditional Chinese medicine will definitely make a breakthrough on this basis
.