The Medical Insurance Bureau issues a document that concerns all Chinese medicine companies

Chinese medicine companies are in urgent need of transformation
.

01 Favorable for Chinese medicine companies

On August 5th, the Sichuan Provincial Medical Insurance Bureau issued the "Notice on Several Policies of Sichuan Medical Security Supporting the Development of Traditional Chinese Medicine", from supporting the inclusion of traditional Chinese medicine institutions into the designated scope of medical insurance, supporting the inclusion of traditional Chinese medicine services into the scope of medical insurance, and promoting the payment of medical insurance for traditional Chinese medicine services.
The reform of the method and the promotion of the price reform of Chinese medicine services should proceed
.

Picture source: Sichuan Provincial Medical Insurance Bureau

It is worth noting that in Article 4, the promotion of the price reform of traditional Chinese medicine services mentioned that the provincial or inter-provincial regional alliances should be used to carry out mass procurement of Chinese patent medicines to promote the high-quality development of Chinese patent medicine manufacturers
.

The regulations issued by Sichuan Province this time reflect the status quo of the Chinese medicine industry to a certain extent.
While the development is supported, it is also facing challenges brought about by medical reform policies such as centralized procurement
.

Since the beginning of this year, with the support of favorable policies, the stocks of the Chinese medicine sector have performed very well
.

On June 30, the National Health Commission issued the "Opinions on Further Strengthening the Work of Traditional Chinese Medicine in General Hospitals to Promote the Coordinated Development of Traditional Chinese and Western Medicine".
On July 1, the A-share Chinese medicine sector continued to rise.
Yiling Pharmaceutical and Zixin Pharmaceutical Many stocks have their daily limit; Tasly, Yunnan Baiyao and other stocks rose sharply
.

The above-mentioned documents proposed that the health administration department should include the integration of traditional Chinese and western medicine into the hospital review and public hospital performance appraisal to promote the development of traditional Chinese medicine in general hospitals
.

02 Times drive transformation

At the 6th Changbai Mountain International Pharmaceutical and Health Industry Development Forum held in Tonghua·China Medical City, Zhu Xun, former expert of the National New Drug Advisory Committee, said on the current status of the pharmaceutical industry: The problem of transformation is not just traditional pharmaceutical companies, but companies that have already gone public are also facing severe challenges
.

Indeed, the domestic medical environment has undergone great changes
.

Zhu Xun introduced at the meeting: "In 2010, the top 20 Chinese A-share listed pharmaceutical industries, after eliminating Yunnan Baiyao and Guangyao, the only ones who really stayed after 10 years and the market is worthy of growth are Hengrui
.

However, in this process, the light of the nation traditional Chinese medicine seems to be a little late
.

03 Modern development

"The next step of the development of Chinese medicine must take the path of modernization
.

Zhang Boli said that the current overall development trend and model of the national pharmaceutical industry are changing, that is, from quantitative expansion to qualitative improvement.
High-quality development is a major trend in the development of the entire country.
This is in the development of biomedicine and traditional Chinese medicine.
It's all so
.

To ensure the quality of medicines, it is necessary to follow certain technical standard systems and operating procedures from germplasm seedlings, planting methods, and industrial processing.
In addition, clarifying the safety and effectiveness of medicines is also a point emphasized by many experts.
Come up with objective evidence and methods for clinical value evaluation
.

A representative policy on this point is to re-evaluate Chinese patent medicines after they are listed.
In 2016, the State Council issued the "Outline of the Strategic Plan for the Development of Traditional Chinese Medicine (2016-2030)".
The document mentioned the key tasks for the development of Chinese medicine in the next 15 years.
One is to improve the scientific research evaluation system of Chinese medicine
.

Nowadays, the National Medical Insurance Administration continues to release signals that proprietary Chinese medicines are entering centralized procurement.
Some people in the industry believe that if proprietary Chinese medicines are collected on a large scale, the industry has been calling for the re-evaluation policy of proprietary Chinese medicines to come on the market at an accelerated pace
.

In addition, according to a report in the Economic Information Daily, some experts said, “Now more and more Chinese medicine companies are taking the initiative to launch their proprietary Chinese medicines and re-evaluate them.
A lot of research
has been done on side effects .

04 Cross-border health

In addition, the "Outline of the "Healthy China 2030" Plan" also points out the direction for the innovative development of Chinese medicine
.

The aforementioned documents clearly stated that it is necessary to give full play to the unique advantages of traditional Chinese medicine, improve the service capabilities of traditional Chinese medicine, and promote the inheritance and innovation of traditional Chinese medicine
.

In an interview with the media, Zhang Boli pointed out that the characteristic of Chinese medicine in treating diseases is the whole process of treatment.
For example, in the new crown epidemic, it is a comprehensive process from treatment to prevention to recovery
.

With the rapid development of China’s social economy, the continuous improvement of urban and rural people’s living standards, the continuous deepening of China’s population aging and the general increase in people’s awareness of health care, predictions indicate that by 2030, the output value of China’s health industry will reach 16 trillion yuan.
It will become a pillar industry of the national economy, and the health industry of traditional Chinese medicine will also become one of the industries with the most potential for development in the 21st century
.

Yang Hongfei, founder of Firestone Creation, reported at the meeting that from the perspective of market performance, the future growth rates of traditional Chinese medicine health tourism and traditional Chinese medicine derivatives (health food, daily chemical products, etc.
) are expected to be 15% and 19%, respectively.
The traditional Chinese medicine manufacturing is expected to grow at 6%, which has great potential for development
.

At present, traditional Chinese medicine companies have cross-border deployment in the big health field, and the establishment of new business segments has become a trend
.
For example, the TCM health catering experience store opened by Tongrentang and Zhang Zhongjing, and the health products and daily chemical products deployed by pharmaceutical companies such as Yunnan Baiyao and Pien Tzehuang.
A degree of performance support also has a considerable degree of competitiveness
.

Public information shows that Yunnan Baiyao toothpaste reached 4.
407 billion yuan in sales in 2018.
According to the company's annual report, its domestic market share is now more than 20%, ranking first in the domestic toothpaste market
.
From the perspective of the sales of Tongrentang stores, the sales of health products and food sectors have accounted for close to 20%, and compared with 2019, the sales of this sector will increase slightly in 2020
.

Image source: Tongrentang 2020 Annual Report

In addition, in the choice of cross-border direction, the original advantages and characteristics are an important reference
.

For example, Tonghua is the main producing area of ​​ginseng
.
Zhang Boli believes that ginseng is the best medicinal material in traditional Chinese medicine.
It effectively transforms resource advantages into economic advantages and contains huge business opportunities for development
.

Taking Tonghua’s local company Yisheng Pharmaceutical as an example, relying on Tonghua’s local ginseng industry advantages and the company’s years of research and accumulation on ginseng and American ginseng, Yisheng Pharmaceutical has gradually expanded to the upstream and downstream of the ginseng industry based on the original pharmaceutical sector.
Three marketing centers for medicines, health foods, and cosmetics have been formed, and they have grown from a simple pharmaceutical company to an enterprise group that runs through the upper, middle and lower reaches of the ginseng industry chain
.

Based on this development model, the company’s financial report for the first quarter of 2021 shows that during the reporting period, the company achieved operating income of 220 million yuan, an increase of 14.
31% over the same period of the previous year; net profit attributable to shareholders of listed companies was 27.
76 million yuan, compared with the previous year.
An increase of 29.
24% over the same period; net profit attributable to shareholders of listed companies deducting non-recurring gains and losses was 23.
4 million yuan, an increase of 40.
73% over the same period of the previous year
.
Regarding the reasons for the growth in performance, the financial report shows that it depends on the steady growth of sales revenue from the two major sectors of pharmaceuticals and cosmetics
.

Note: The original text has been deleted