Will the next price drop for centralized drug procurement be more than 50%?

Since the implementation of centralized procurement with volume in 2018, the Medical Insurance Bureau has achieved remarkable results in the field of centralized drug procurement, which is obvious to the whole society

Going to 2022, under the normalization of centralized procurement, now it is necessary to analyze the current actual situation and how to go next?

01 Will the drop in collection still be that high?

Significantly reducing the purchase price and actual price of medicines is the most obvious achievement of the Medical Insurance Bureau's centralized procurement

Up to now, in the six centralized purchases with volume, the price reduction for each summary is more than 50%, and the highest price reduction for a single product is more than 90%

But this does not mean that the future collection results are not as good as before

02How to optimize the mechanism of centralized procurement?

This paper mainly studies the two centralized procurement methods of bidding and negotiation

The first is bidding

Bidding is the process of making full use of the competition mechanism of the market, through which the bidder adopts a price reduction strategy to defeat the opponent in order to win the bid and achieve sales, so as to achieve the purpose of low-cost procurement

For the sustainable implementation of bidding, we must follow the basic logic of the development of things, abide by the laws and regulations, and highlight the word "competition"

In the previous non-volume procurement, in terms of market access before procurement, it did not respect the bidding regulations, and used administrative power to stipulate how much the price must be reduced in order to obtain bidding qualifications, and even determine the price reduction range based on sales rankings.

Since it is a bidding process, it should strictly abide by the Law of the People's Republic of China on Bidding and Bidding

Under the regulatory constraints of the "Bidding and Bidding Law", it is legal and reasonable to reduce the price of drugs for centralized procurement of large quantities, and there is nothing to question

This issue should be made clear to the society now: for the initial purchase, the main achievement is a substantial price reduction; for future purchases, strict compliance with the law and quality assurance are the main achievements.

Next is negotiation

Centralized procurement of drugs through bidding is the main method of centralized drug procurement, but it is not the only method

Therefore, there must be another way as a supplement, which is negotiation

In the bidding process, there is no bargaining

During the negotiation process, the bidder's expectation of lowering the price is mainly achieved through bargaining
.

In recent years, the negotiation practice in some places has also achieved the effect of greatly reducing the price by tens of percent, or even 90 percent
.
The reason why the negotiation is effective, like bidding and bidding, is that the original drug price is inflated, and there are a lot of abnormal benefits
.

Unlike bidding, which is a mutual price reduction after several industry professionals compare costs, profits, prices, and quantities, negotiation is supported by a team of business experts behind the negotiation.
The right to pay expenses, in exchange for a lower purchase price with a larger purchase volume
.
To be honest, it is only in the price negotiation that the purchase with quantity really reflects its power to conquer the city
.

The business experts behind them provide technical and data support for the negotiators at the front desk after market research, product analysis, and industry comparison
.

This requires negotiators to have a high level of comprehensive business and on-site negotiation skills, and be able to properly use their information grasping ability and language art to guide the other party to accept their lower price convincingly
.

The main method of negotiation should be to exchange price for quantity
.
Based on the existing quantity and price, comparing with the actual domestic and foreign markets, and on the condition of changing the purchase quantity, "inducing" the other party to lower the price
.
Let the sales side change from "less purchases + higher profit margins" to a sales strategy of "larger purchases + lower profit margins"
.
This is the purchaser's legitimate use of its own power, respect for the other party's expectation of maximizing profits, and an accurate way to follow the laws of the market and create a business environment
.
It's a common sense that even farmers market farmers and housewives know and can use skillfully
.

This lowered price can convince all parties concerned and achieve a win-win situation.
It also makes such a transaction a catalyst and lubricant for the healthy development of the entire industrial chain, including R&D, production, circulation, exchange, consumption, and use.
achieve sustainability
.

03What should I do if there is a shortage of medicines?

Even if bidding companies voluntarily and consciously reduce prices, even if negotiating companies willingly lower prices, due to the unpredictability of the external environment and changes in the internal situation of the company, it is still possible that legitimate and reasonable drug purchases encounter unexpected situations and interrupt supply, leading to market disruptions.
shortage
.

From the perspective of the market as a whole, supply cuts and shortages are unavoidable, but they can be prevented, controlled and punished as necessary
.

There are many reasons for the shortage of supply, but the main reason is price
.
The main reason for the subdivision can be divided into two types: one is the subjective intentional under-quote or under-received price, and the other is the cost exceeding the price caused by the change of objective conditions
.

For various reasons, enterprises must seek the market share of a certain product, formulate business strategies for this, and exclude competitors from occupying the market at a price lower than the cost
.
It is then rewarded by a high rate of market share or other benefits
.
This is called dumping internationally
.
It is a taboo for the Chinese government to create a market business environment
.

The more mature the market is and where the market rules play a big role, the more likely it is for companies to dump, because they may be effective
.
Of course, in such a place, it is easy for the government to crack down on dumping because the rule of law is relatively sound
.
This is the game between the government and the market.
It is necessary to use the market mechanism and prevent the market mechanism from being illegally used
.
Therefore, in a country with a developed market economy, monopoly and dumping are the two major illegal acts that the government needs to manage the market macro-control
.

Dumping messes up prices, disrupts market order, interferes with the operations of peer companies, damages the long-term interests of patients and medical insurance, and brings a great risk of shortages
.
The next step in dumping must be monopoly
.

For subjective and intentional dumping, government departments should learn from the experience and measures of international anti-dumping, not seek short-term interests, and resolutely stop such illegal acts
.

This requires the purchaser to have accurate product-related information, including corporate marketing strategies and psychological dynamics, industry production costs and capacity trends, market game status and changing trends, and the rise and fall of supply and demand
.
Under the premise of clearly grasping the relatively low and reasonable costs of advanced enterprises, we should appropriately prevent winning bids at ultra-low prices or promises of ultra-low prices, prevent falsely low drug prices, and prevent the unreasonable attempts of bidding negotiating companies from "successful", which will eventually lead to social problems.
victimized
.

The prevention and control of low drug prices is the sublimation of the main pursuit of price reduction in the early stage of centralized drug procurement
.

The prevention of subjective and intentional shortages is to strictly stipulate the identification and investigation of liability for breach of contract in the procurement contract, and include sufficient penalty clauses
.
At the same time, there must also be remedial measures, so as not to cause a shortage of supply in the entire market due to a breach of contract by a company, jeopardizing the interests of consumers
.

The procurement cycle of medicines is not long, generally two to three years
.
It is difficult for anyone to predict the changes in market supply, demand, raw materials and prices in a procurement cycle
.
Therefore, such changes beyond the seller's expectation and ability should be treated differently based on facts
.

The company's cost inversion and loss of sales caused by changes in the objective situation should first be borne by the seller
.
Because in the centralized drug purchase with quantity, the quotation of the enterprise should be reasoned and recognized as the rational behavior of the enterprise, which is the result of the precise calculation of the enterprise
.
Even if the market changes, it should be included in the company's situation analysis and strategic forecast
.
Therefore, enterprises must be responsible for their own quotations, and must follow the price and quantity selected in the centralized procurement, and there is no shortage of quality supply
.
If you can't execute your own offer after being selected, you will inevitably be punished and corrected by the government's coercive force
.

When the change exceeds the seller's ability to bear and the seller is not at fault, the buyer should also analyze the specific situation, use its own power and influence, mobilize social resources, and jointly solve this accident, such as natural disasters, such as force majeure
.
In addition to assisting in bearing economic responsibility, the legal responsibility of the seller may not be pursued
.

.

In short, in the current situation of overcapacity in the pharmaceutical market, sufficient market competition, and effective government control measures, the phenomenon of drug shortages in China should not occur in large numbers
.
The key is to establish a reasonable price formation mechanism to avoid blindly suppressing prices to falsely low levels
.
Once the supply of medicines with artificially low prices is cut off, even if there is no shortage, the medicines with higher prices must make up for their market share, or even very high until they are artificially high
.
This is called the price pressure may be artificially high
.
The preparation of many bid-winning companies and many alternative companies should be a very effective preventive method
.