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    Home > Medical News > Latest Medical News > The collection of proprietary Chinese medicines covers most of the provinces, and the pressure of price reduction is unprecedented!

    The collection of proprietary Chinese medicines covers most of the provinces, and the pressure of price reduction is unprecedented!

    • Last Update: 2022-09-07
    • Source: Internet
    • Author: User
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    2021 is the start year of the collection of proprietary Chinese medicines, and 2022 is the full launch year of the collection of proprietary Chinese medicines
    .
    As of August 22, 2022, proprietary Chinese medicine collection has covered 22 provinces (autonomous regions and cities): Hubei Regional Alliance includes Hubei, Hebei, Shanxi, Inner Mongolia, Liaoning, Fujian, Jiangxi, Henan, Hunan, Hainan, Chongqing, Sichuan, Guizhou, Tibet, Shaanxi, Gansu, Ningxia, Xinjiang, Xinjiang Production and Construction Corps; The Guangdong Regional Alliance includes Guangdong, Shanxi, Henan, Hainan, Ningxia and Qinghai; Shandong and Beijing were launched
    in a provincial-level manner.
    The areas that have not yet started the collection of proprietary Chinese medicines are still Tianjin, Jilin, Heilongjiang, Yunnan, Jiangsu, Anhui, Shanghai and Zhejiang
    .
     
    The proprietary Chinese medicine collection scheme in Shandong and Beijing is selected
    on the basis of the product catalogs of the Guangdong Regional Alliance and the Hubei Regional Alliance.
    Shandong has selected 12 products in the collection product catalog of the two regional alliances, and has added 3 new products (Hua Toxin - oral, stomach digestion - oral, bone 7 cent - oral).
    Beijing selected 14 products from the Hubei catalogue and 15 products from the Guangdong catalogue to enter the catalogue of drugs with quantity
    negotiation.
     
    Natural Medicines extracted products that are chemical drug approvals are not currently included in the collection
    .
    It is rumored that the ginkgo biloba leaf extract collected in Shandong will be taken orally, and finally it will not enter any of the areas/provinces
    where Chinese medicine is collected.
     
    Determinants of the magnitude of the price reduction
     
    Specific rules for the collection and collection of proprietary Chinese medicines in Beijing have not yet been introduced
    .
    The three regions/provinces (Hubei, Guangdong and Shandong) that have announced the rules now include products with larger market sizes into one bidding unit and products with smaller market sizes into another bidding unit
    .
     
    The respective rules determine how much
    the price is reduced for both Auction groups.
    Taking Hubei as an example, winning the bid mainly depends on the overall willingness of competitive enterprises to
    reduce prices.
    In fact, bidding unit A (that is, the group with a large market size) is facing greater pressure to reduce prices, because they do not want to lose bids and want to keep their original market; The pressure to reduce the price of bidding units with smaller market size is relatively small, and it is better to seize the market
    .
    Shandong's rules are also more like Hubei' rules, mainly depending on how much
    the company is willing to reduce the price in order to win the bid.
     
    The Guangdong Alliance directly gave a rule
    that the price reduction range and the quotation range are linked.
    If a non-exclusive product wants to enter the qualification of the proposed alternative and obtain 70% of the pre-purchase volume in the first year and obtain an increase other than the quoted amount, it needs to reduce the average daily fee/minimum price of the enterprise by ≥ 15%; Exclusive products to obtain the qualification of the proposed alternative must be reduced by 20%, but can get 100% of the first year of pre-purchase; If a non-exclusive product is to be selected, the non-exclusive product will drop by ≥ 21%.

    All in all, according to the rules of Guangdong, if you want to get the market, you must have a certain range of price
    reductions.
     
    The Beijing Drug Linkage Rule for Daily Medication in the same group adopts the method of median price and gradient dosage for drugs with large differences in daily service costs, that is, compared with the average level, each gap increases by 1 times, and the proportion of agreed tasks is reduced by 10%, and the maximum is reduced by 50%.

    Overall, the rules are more biased towards the Guangdong Alliance policy, exchanging a certain amount of price reduction for a certain share of the market
    .
     
    The quotation of drugs negotiated in Beijing is not higher than the reference price of the transaction, that is, the shortlisted drug candidate list
    is formed.
    Among them, the quotation of the exclusive brand negotiated drug is not higher than the transaction reference price, and 80% of the agreed task volume of the medical institution can be obtained, and the quotation of the 2 brands negotiated drug is not higher than the transaction reference price, and 70% of the agreed task amount
    can be obtained.
    On the basis of not higher than the transaction reference price, the negotiated drug is reduced by 1 percentage point, and the proportion of the agreed task volume is increased by 5 percentage points accordingly, and the maximum agreed proportion is 100%.

    Drugs that do not reach the maximum agreed proportion are organized to negotiate and determine the final supply price
    .
    In principle, drugs that have not been successfully quoted or higher than the upper limit of quotation (transaction reference price) are flow labels, and the flow label products will include the limit price into the key monitoring scope of
    the city.
    Therefore, whether beijing negotiates the bid for drugs with a volume depends more on the experts' assessment
    of the transaction reference price.
     
    Test the price control of enterprises
     
    After entering the collection catalog, the product is facing a price
    reduction.
    Judging from the public information of the Hubei and Guangdong Alliances that have been released so far, the products entering the catalog should maintain a certain market, and generally reduce prices by 20% to 60%.

    The higher the price reduction, the easier it is to win the bid, which is actually good for products
    with better price management in the past.
     
    There has always been a saying in the industry, "marked in people", the rules of collection determine the future price of a product, the price of the product determines the profit of the product, and the profit of the product determines the human resource allocation
    of the enterprise.
     
    Once the bid is lost, companies will definitely choose to optimize the architecture in order to maintain profits
    .
    A proprietary Chinese medicine brand product that has been cultivated for many years may lose its original market advantage because of the loss of standards
    .
     
    On the other hand, the winning products in the collection also face competition from proprietary Chinese medicines that have not entered the collection of the same indications, the latter has not reduced prices, and there is more profit space for market promotion and competition for the former market
    .
    If the products that enter the collection and collection of proprietary Chinese medicines at a reduced price do not enjoy the preferential policies of the national procurement in that year (the second and third-level hospitals give priority to the prescription of national procurement products), then from the point of view of time, it is not necessary to enter the catalogue
    of proprietary Chinese medicine collection and collection immediately.
    First, it can maintain the existing price system, and second, it can compete for the market of similar products with the same indications that have entered the collection, and do not have to face the price reduction pressure
    of the follow-up agreement after the collection and mining.
     
    Cost reduction pressure is a must in the future
     
    For proprietary Chinese medicine products that have entered the collection, they need to face pressure and extend their life cycle
    .
    It may be necessary to re-develop the product and add new indications to make the product eligible for the medical insurance negotiation channel
    .
    The price of products in the medical insurance negotiation channel can basically be used nationwide, without the need to participate in various levels of bidding, but the medical insurance negotiation is also facing price reduction pressure
    .
     
    It is worth noting that unlike chemical medicines, the quality assurance of proprietary Chinese medicines depends heavily on uncertainties such as the cultivation of medicinal materials, and it is difficult to ensure supply once the price of
    medicinal materials is unstable and the enterprise has no profits.
     
    Compared with the large-scale production of chemical drugs that may reduce the cost of raw materials, the scarcity of Chinese herbal medicines caused by large-scale procurement of Chinese herbal medicines may increase the procurement cost
    of Chinese herbal medicines.
    In addition, the environmental protection pressure of Chinese herbal medicines is large, such as the treatment of medicinal residues
    .
     
    Although the national procurement of proprietary Chinese medicines will not start for the time being in the short term, for products that will soon enter the regional/provincial proprietary Chinese medicine collection catalogue, how to reduce costs is a compulsory course
    in the future.
    2021 is the start year of the collection of proprietary Chinese medicines, and 2022 is the full launch year of the collection of proprietary Chinese medicines
    .
    As of August 22, 2022, proprietary Chinese medicine collection has covered 22 provinces (autonomous regions and cities): Hubei Regional Alliance includes Hubei, Hebei, Shanxi, Inner Mongolia, Liaoning, Fujian, Jiangxi, Henan, Hunan, Hainan, Chongqing, Sichuan, Guizhou, Tibet, Shaanxi, Gansu, Ningxia, Xinjiang, Xinjiang Production and Construction Corps; The Guangdong Regional Alliance includes Guangdong, Shanxi, Henan, Hainan, Ningxia and Qinghai; Shandong and Beijing were launched
    in a provincial-level manner.
    The areas that have not yet started the collection of proprietary Chinese medicines are still Tianjin, Jilin, Heilongjiang, Yunnan, Jiangsu, Anhui, Shanghai and Zhejiang
    .
     
    The proprietary Chinese medicine collection scheme in Shandong and Beijing is selected
    on the basis of the product catalogs of the Guangdong Regional Alliance and the Hubei Regional Alliance.
    Shandong has selected 12 products in the collection product catalog of the two regional alliances, and has added 3 new products (Hua Toxin - oral, stomach digestion - oral, bone 7 cent - oral).

    Beijing selected 14 products from the Hubei catalogue and 15 products from the Guangdong catalogue to enter the catalogue of drugs with quantity
    negotiation.
     
    Natural Medicines extracted products that are chemical drug approvals are not currently included in the collection
    .
    It is rumored that the ginkgo biloba leaf extract collected in Shandong will be taken orally, and finally it will not enter any of the areas/provinces
    where Chinese medicine is collected.
     
    Determinants of the magnitude of the price reduction
    Determinants of the magnitude of the price reduction
     
    Specific rules for the collection and collection of proprietary Chinese medicines in Beijing have not yet been introduced
    .
    The three regions/provinces (Hubei, Guangdong and Shandong) that have announced the rules now include products with larger market sizes into one bidding unit and products with smaller market sizes into another bidding unit
    .
     
    The respective rules determine how much
    the price is reduced for both Auction groups.
    Taking Hubei as an example, winning the bid mainly depends on the overall willingness of competitive enterprises to
    reduce prices.
    In fact, bidding unit A (that is, the group with a large market size) is facing greater pressure to reduce prices, because they do not want to lose bids and want to keep their original market; The pressure to reduce the price of bidding units with smaller market size is relatively small, and it is better to seize the market
    .
    Shandong's rules are also more like Hubei' rules, mainly depending on how much
    the company is willing to reduce the price in order to win the bid.
     
    The Guangdong Alliance directly gave a rule
    that the price reduction range and the quotation range are linked.
    If a non-exclusive product wants to enter the qualification of the proposed alternative and obtain 70% of the pre-purchase volume in the first year and obtain an increase other than the quoted amount, it needs to reduce the average daily fee/minimum price of the enterprise by ≥ 15%; Exclusive products to obtain the qualification of the proposed alternative must be reduced by 20%, but can get 100% of the first year of pre-purchase; If a non-exclusive product is to be selected, the non-exclusive product will drop by ≥ 21%.

    All in all, according to the rules of Guangdong, if you want to get the market, you must have a certain range of price
    reductions.
     
    The Beijing Drug Linkage Rule for Daily Medication in the same group adopts the method of median price and gradient dosage for drugs with large differences in daily service costs, that is, compared with the average level, each gap increases by 1 times, and the proportion of agreed tasks is reduced by 10%, and the maximum is reduced by 50%.

    Overall, the rules are more biased towards the Guangdong Alliance policy, exchanging a certain amount of price reduction for a certain share of the market
    .
     
    The quotation of drugs negotiated in Beijing is not higher than the reference price of the transaction, that is, the shortlisted drug candidate list
    is formed.
    Among them, the quotation of the exclusive brand negotiated drug is not higher than the transaction reference price, and 80% of the agreed task volume of the medical institution can be obtained, and the quotation of the 2 brands negotiated drug is not higher than the transaction reference price, and 70% of the agreed task amount
    can be obtained.
    On the basis of not higher than the transaction reference price, the negotiated drug is reduced by 1 percentage point, and the proportion of the agreed task volume is increased by 5 percentage points accordingly, and the maximum agreed proportion is 100%.

    Drugs that do not reach the maximum agreed proportion are organized to negotiate and determine the final supply price
    .
    In principle, drugs that have not been successfully quoted or higher than the upper limit of quotation (transaction reference price) are flow labels, and the flow label products will include the limit price into the key monitoring scope of
    the city.
    Therefore, whether beijing negotiates the bid for drugs with a volume depends more on the experts' assessment
    of the transaction reference price.
     
    Test the price control of enterprises
    Test the price control of enterprises
     
    After entering the collection catalog, the product is facing a price
    reduction.
    Judging from the public information of the Hubei and Guangdong Alliances that have been released so far, the products entering the catalog should maintain a certain market, and generally reduce prices by 20% to 60%.

    The higher the price reduction, the easier it is to win the bid, which is actually good for products
    with better price management in the past.
     
    There has always been a saying in the industry, "marked in people", the rules of collection determine the future price of a product, the price of the product determines the profit of the product, and the profit of the product determines the human resource allocation
    of the enterprise.
     
    Once the bid is lost, companies will definitely choose to optimize the architecture in order to maintain profits
    .
    A proprietary Chinese medicine brand product that has been cultivated for many years may lose its original market advantage because of the loss of standards
    .
    Pharmaceuticals
     
    On the other hand, the winning products in the collection also face competition from proprietary Chinese medicines that have not entered the collection of the same indications, the latter has not reduced prices, and there is more profit space for market promotion and competition for the former market
    .
    If the products that enter the collection and collection of proprietary Chinese medicines at a reduced price do not enjoy the preferential policies of the national procurement in that year (the second and third-level hospitals give priority to the prescription of national procurement products), then from the point of view of time, it is not necessary to enter the catalogue
    of proprietary Chinese medicine collection and collection immediately.
    First, it can maintain the existing price system, and second, it can compete for the market of similar products with the same indications that have entered the collection, and do not have to face the price reduction pressure
    of the follow-up agreement after the collection and mining.
    Hospital Hospital
     
    Cost reduction pressure is a must in the future
    Cost reduction pressure is a must in the future
     
    For proprietary Chinese medicine products that have entered the collection, they need to face pressure and extend their life cycle
    .
    It may be necessary to re-develop the product and add new indications to make the product eligible for the medical insurance negotiation channel
    .
    The price of products in the medical insurance negotiation channel can basically be used nationwide, without the need to participate in various levels of bidding, but the medical insurance negotiation is also facing price reduction pressure
    .
    Tender tenders
     
    It is worth noting that unlike chemical medicines, the quality assurance of proprietary Chinese medicines depends heavily on uncertainties such as the cultivation of medicinal materials, and it is difficult to ensure supply once the price of
    medicinal materials is unstable and the enterprise has no profits.
    Medicinal herbs enterprise enterprises
     
    Compared with the large-scale production of chemical drugs that may reduce the cost of raw materials, the scarcity of Chinese herbal medicines caused by large-scale procurement of Chinese herbal medicines may increase the procurement cost
    of Chinese herbal medicines.
    In addition, the environmental protection pressure of Chinese herbal medicines is large, such as the treatment of medicinal residues
    .
     
    Although the national procurement of proprietary Chinese medicines will not start for the time being in the short term, for products that will soon enter the regional/provincial proprietary Chinese medicine collection catalogue, how to reduce costs is a compulsory course
    in the future.
    This article is an English version of an article which is originally in the Chinese language on echemi.com and is provided for information purposes only. This website makes no representation or warranty of any kind, either expressed or implied, as to the accuracy, completeness ownership or reliability of the article or any translations thereof. If you have any concerns or complaints relating to the article, please send an email, providing a detailed description of the concern or complaint, to service@echemi.com. A staff member will contact you within 5 working days. Once verified, infringing content will be removed immediately.

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