Health & Beauty

According to the observation report of Huacheng Import and Export Data, recently, the National traditional Chinese patent medicines and simple preparations Joint Purchasing Office issued the Notice on Convening the Communication Meeting of traditional Chinese patent medicines and simple preparations Alliance Purchasing Enterprises, which will be held on March 23 to solicit the opinions and suggestions of relevant enterprises on traditional Chinese patent medicines and simple preparations Alliance purchasing rules. In the near future, the national centralized procurement of traditional Chinese patent medicines and simple preparations will be launched, including 42 kinds of traditional Chinese patent medicines and simple preparations.

Deng Zhidong, general manager of Hainan Boao Medical Technology Co., Ltd., said: "The national centralized procurement has entered the stage of normalization and institutionalization, and policy dividends have been released continuously. The centralized procurement of traditional Chinese patent medicines and simple preparations has been further accelerated and expanded, and the time for large-scale centralized procurement of standardized production of traditional Chinese medicine formula particles is ripe. Next, the standard system of traditional Chinese medicine needs to be further improved."

110 pharmaceutical companies will participate in the procurement rules communication meeting

According to the observation report of Huacheng import and export data, 110 relevant enterprises participated in the communication meeting, including Zhongsheng Pharmaceutical, Yibai Pharmaceutical, Shenwei Pharmaceutical, Yuekang Pharmaceutical, Yabao Pharmaceutical, Sunflower Pharmaceutical, Aodong, and Baiyunshan in Jilin, mainly to introduce the procurement rules of the National traditional Chinese patent medicines and simple preparations Alliance, and to solicit opinions and suggestions from enterprises.

On March 1 this year, the National Health Insurance Bureau issued the Notice on Doing a Good Job in the Centralized Procurement and Price Management of Medicine in 2023. The notice shows that in 2023, Hubei will be guided to take the lead in expanding the varieties and regional scope of traditional Chinese patent medicines and simple preparations purchased by the inter provincial alliance.

In September 2022, the second batch of centralized procurement of traditional Chinese patent medicines and simple preparations alliance led by Hubei officially began, involving 16 categories and 42 varieties, including Guanxinning injection, cinobufagin capsule, Nao'an capsule, Ginkgo biloba injection, etc.

In fact, traditional Chinese patent medicines and simple preparations centralized procurement has been brewing since 2021. In December 2021, Hubei led the bid opening of traditional Chinese patent medicines and simple preparations procurement in 19 provinces (districts and cities), and finally 97 enterprises and 111 products were selected, with an average price decrease of 42.27% and the maximum price decrease of 82.63%. It is reported that centralized procurement involves varieties with large clinical consumption and high procurement amount. Huacheng Import and Export Data Observation Report.

The industry believes that if the traditional Chinese patent medicines and simple preparations alliance led by Hubei further expands the variety and scope of centralized procurement, the large variety of traditional Chinese patent medicines and simple preparations with the largest sales scale of the hospital will be the next goal. In addition, the number of provinces covered by traditional Chinese patent medicines and simple preparations alliance in Hubei is expected to increase further.

As for the gradual spread of centralized purchase of traditional Chinese patent medicines and simple preparations, Zhao Xilong, a senior investment consultant of Jufeng Investment Consulting, told the Securities Daily that "through centralized purchase with volume, the problem of low sales of traditional Chinese patent medicines and simple preparations and its sales channels can be solved, so as to stimulate the enthusiasm of raw material planting enterprises and promote the development of the industrial chain."

However, in Deng Zhidong's view, at present, the category and scale of traditional Chinese patent medicines and simple preparations's centralized procurement still need to be improved relatively, and the price reduction is also small, mainly because of the low degree of standardization of traditional Chinese medicine, unstable supply of traditional Chinese medicine, inconsistent quality, and large price fluctuations. Due to the particularity of traditional Chinese medicine, pricing different types of traditional Chinese medicine is a difficult problem. At the same time, it is necessary to prevent the mere pursuit of price reduction leading to a decline in drug quality.

New driving force for the development of traditional Chinese patent medicines and simple preparations in the era of "volume increase" or centralized purchase

What impact will this round of centralized purchase have on traditional Chinese patent medicines and simple preparations enterprises?

Many insiders interviewed by reporters believe that the centralized purchase of traditional Chinese patent medicines and simple preparations will play a positive role in guiding the development of the Chinese medicine industry chain. The repair of "quantity" in the era of centralized procurement will drive a new round of performance growth for traditional Chinese medicine enterprises.

Deng Zhidong said in an interview with reporters that although the profits of individual drugs will decrease after centralized purchase, market demand and sales will continue to increase. In general, driven by the centralized purchase of Chinese medicine, the overall income of traditional Chinese patent medicines and simple preparations medical services will also increase accordingly.

At present, the market of traditional Chinese patent medicines and simple preparations continues to expand. According to the monitoring of Zhongkang CMH data, in 2022, traditional Chinese patent medicines and simple preparations will occupy 33.2% of the market share in the three major drug markets, with the growth rate far exceeding that of chemical drugs and biological products. In addition, according to data from iFind, in 2021, the total operating revenue of 74 A-share listed Chinese medicine companies totaled 335.1 billion yuan, with a total net profit of 38.8 billion yuan. However, according to the data of companies that have disclosed performance forecasts in 2022, many listed companies of traditional Chinese medicine are facing a dilemma of declining net profits. Huacheng Import and Export Data Observation reports.

According to data, as of March 22, of the 37 listed companies of traditional Chinese medicine that have published performance forecasts, 22 had pre decreases or losses. There are many listed companies in the performance forecast that the decline in performance is due to the impact of medical insurance payment reform and traditional Chinese patent medicines and simple preparations centralized purchase policy and other factors during the reporting period. In order to avoid large fluctuations in sales scale and ensure stable growth of operating income, the company increased market investment, resulting in increased sales expenses.

Zheshang Securities believes that from the historical data of the traditional Chinese medicine industry, the biggest factor affecting the industry is sales volume rather than price. Under the influence of "weight and light price", the "volume increase" in the era of centralized procurement is expected to become the core driving force for the development of the traditional Chinese medicine industry, as reported by Huacheng Import and Export Data Observation.