Industry: China's drug price reduction may copy the Japanese model

[China Pharmaceutical network industry trends] at present, the "4 + 7" pilot program for centralized procurement has been announced, and Liaoning recently released the pilot volume purchase and sale contract (model) for centralized procurement and use of drugs The implementation of this work, in the process of reducing drug prices, will also promote local pharmaceutical companies to accelerate the replacement of multinational pharmaceutical companies in the relevant fields Some in the industry speculate that China's next drug price reduction model may duplicate Japan's model, that is, it will reduce drug prices by about 20% every year, rather than a one-off big reduction of 90% It is understood that as early as 1974, Japan began to reduce drug prices In 1950, Japan implemented the drug price benchmark system and established a mechanism to adjust the payment price of Medicare drugs, which achieved results in reducing the drug price and ensuring the open and reasonable price And since 1981, Japan has adjusted the pricing of pharmaceutical products every two years, so after 40 years of experience, Japanese people rarely have the problem of "expensive medical treatment" and "expensive drug purchase" According to the data, in 2018, the drug price in Japan was reduced by 1.74% In 2019, Japan increased the consumption tax to 10%, which means that the medical products also increased the tax by 10%, and the burden on patients increased In this regard, Japan has made a temporary adjustment of medical expenses and drug prices to ensure the reasonable drug prices for patients However, Japan's drug price reduction is not entirely dependent on administrative control For example, drug pricing in Japan is regulated by the national insurance law It can be seen from this that Japan's drug pricing has long been incorporated into the scope of medical insurance legislation In addition, Japan implements "national health insurance", which covers almost all the population of Japan In addition, Japan has broken the model of medicine based medical care, and doctors' remuneration has greatly increased The above factors ensure that the drug price in Japan is low and reasonable, and there is seldom a sudden rise in the price, which increases the pressure on patients, so that the level of happiness of Japanese people is high Compared with Japan, the lack of standardized price adjustment methods and processes in China often leads to the situation of inflated prices of drugs, among which the drug price management system under the framework of "drug based medicine" However, in recent years, China has paid more and more attention to the drug price issues related to people's livelihood, trying to solve the problem of virtual high For example, in 2017, China proposed to abolish the use of drugs for medical care and improve the drug supply security system This also means that the drug addition policy, which has been implemented for more than 60 years in China, has officially withdrawn from the stage of history, thus squeezing out the "water" of the inflated drug price In terms of market concentration of drugs, Chinese pharmaceutical companies are also quite different from Japanese pharmaceutical companies According to industry data, the market share of Japan's top four large pharmaceutical enterprises is about 30%, while that of China's top four pharmaceutical enterprises is only about 8% Among them, Yangtze River Pharmaceutical industry, as the leading pharmaceutical enterprise in the mainland, has a market share of only 2% It can be seen that the drug concentration in China needs to be improved With the promotion of the pilot work of volume procurement, in the long run, volume procurement is of great significance to promote the transformation and upgrading of Chinese pharmaceutical enterprises, improve the industry concentration, optimize the order of drug circulation, etc The industry believes that in the future, China's domestic drug price reduction will include more generic and innovative drugs and reduce the use of auxiliary drugs Therefore, China's generic and innovative drug industry will continue to grow From the past experience of pharmaceutical companies in the United States and Japan, they have also faced the current pressure of drug prices in China In this context, local pharmaceutical enterprises with strength will also welcome more development opportunities in the future.