Drug circulation may be reduced

Chen Li is an optimistic medicine changer and he is preparing for the opening of his hot pot restaurant these few days.

Prior to this, Chen Lihe and his friends opened a second-tier pharmaceutical business company in Anhui. At present, they have no new agents. After the legacy business at hand, their company will close.

In February this year, the National Rational Drug Use Conference was convened. The main purpose of this meeting was to reduce the use of drugs in hospitals and solve the existing medical loopholes in the use of medicine to provide medicine. "If the hospital uses drugs to control and then escalate, it is certainly our secondary agents that are directly affected." It was after this meeting that Chen Li felt that he had to say goodbye to the medicines that had fought for more than 20 years.

On March 11th, the Health and Family Planning Commission also issued an opinion draft for the second-bargaining of drugs. The theme of this opinion draft is very similar to the spirit of the national fair for drug use, aiming to further reduce drug prices and reduce drug price and moisture. The Opinion Draft requires that pharmaceutical companies can only entrust the agents to carry out a terminal distribution, that is, to reduce the intermediate links of drug distribution in disguise, cut down the living space of a large number of second- and third-tier agents, and encourage pharmaceutical companies to directly distribute drugs to hospitals.

At present, there are about 10,000 medical and commercial companies in China. Excluding large-scale first-tier agents, only second-, third-, and small-scale pharmaceutical agents accounted for more than 400 billion in market share. With the reduction in intermediate medicine, The market share of more than 4000 billion yuan will be redistributed by pharmaceutical factories and large-scale first-level agents, while a large number of second-, third-, and small-scale agents will begin to face the crisis of being merged and reorganized or closed down.

Middlemen's survival crisis

On February 3, the National Conference on Rational Drug Use was held at the General Hospital of the Shenyang Military Region. At the meeting, General Hospital of the Military Region introduced its own drug use situation: In the 6 years, the proportion of drug use in the hospital dropped from 45% to 26.6%. In order to eliminate the high price of drug prices, the hospital centered around the size of the pharmaceutical industry, distribution capabilities, and industry Word of mouth, etc., formulated a "Supplier Quantitative Evaluation Standards Regulations" to enable the timely detection and elimination of "two-traffickers", low-reputation suppliers, inferior drugs, and profit-making drugs; in addition, the hospital's main channel suppliers were reduced by 116. By the end of the year, the number of pharmaceutical products has also been reduced from 1,850 to 1,322.

At present, most hospitals in China account for more than 45% of drug use, and some hospitals even reach 70%. Although China's rational drug use has been standardized for many years, it is not effective. Therefore, Chen Li thinks this is the hygienic and family planning committee's subtle influence on the market. The future will really tighten the restrictions on hospital drug use.

A person from the Zhejiang Provincial Health and Family Planning Commission who participated in the meeting revealed that although the leaders of the National Health and Family Planning Commission did not directly promote the naval hospital’s model to be promoted nationwide, the impressive praise has fully revealed the potential meaning. It is to encourage other hospitals to learn from the Shenyang Military Region General Hospital.

Immediately, on March 11, the Health and Family Planning Commission released the draft for the second consultation on national drug prices, which states: “Allow medical institutions to conduct secondary bargaining on the winning bids and purchases of drugs, and encourage them to reduce prices. The hospital settled directly; at the same time, it is stipulated that the drug is only allowed to be entrusted on the way to the hospital." In other words, only the first-tier pharmaceutical commercial companies will be allowed to exist in the future, and the second- and third-tier pharmaceutical agents will be restricted by this provision.

In other words, even if Chen Li does not want to say goodbye, he has to leave and there are many secondary pharmaceutical agents like Chen Li.

According to the data from the Ministry of Commerce, in the current more than 10,000 pharmaceutical commercial companies, the top 100 pharmaceutical business companies accounted for 64.3% of the total pharmaceutical industry's total revenue in the same period, and the total Chinese pharmaceutical market in 2013 The scale reached 1,146.3 billion, that is to say, there are about 9,000 second-, third-, and small-scale pharmaceutical agents like Chen Li, which has a market share of about 400 billion yuan. "China does not need tens of thousands of pharmaceutical commercial companies, and 100 to 200 large-scale pharmaceutical distributors are enough." A senior pharmaceutical business company said that over the past few years, with the improvement of information technology and logistics capabilities, drugs have Many circulation agents are no longer necessary.

In the past, hospital terminals and first-tier agents were difficult to connect directly to each other, which gave them room for development. However, nowadays, with the improvement of information and logistics capabilities, hospitals can already connect with first-tier agents. All of the drug inventory needs in the first agent can be seen in time, so now no need to commission two agents, an agent can arrange their own timely delivery.

According to the above-mentioned executives of pharmaceutical and commercial companies, at present, the provinces have in fact formed two or three stable large-scale pharmaceutical and commercial companies, and the country has added a total of more than 100.

Excluding drug price moisture

However, there is a chaotic concept here, that is, many secondary agents are also an agent.

For example, Chen Li’s company, in addition to undertaking the business of a large-scale agent, is also an agent of some small pharmaceutical companies. Because some smaller pharmaceutical companies do not have sufficient capital to build their own marketing teams, and large-scale ones are unwilling to represent their products, these small drug companies have to use small pharmaceutical commercial companies as their primary agents. .

In the pharmaceutical industry, this kind of first- and second-level pharmaceutical commercial companies has a general title of “intermediary”. This includes distributors and agents. In other words, distributors are responsible for sending medicines from the warehouse to the hospital and dealing only with the pharmacy department of the hospital. The agents have to do all aspects of work, whether the hospital purchases medicines, doctors do not use drugs, how much, these are things within the scope of agents work.

Among these, it is also divided into first-level agents and second-level agents, first-tier distributors and second-level distributors. In the medical market, often the first-tier merchants almost contain the agents and distribution of drugs, because in order to ensure the safety of drugs, GSP requires warehouse storage at room temperature of about 25 degrees, and must have cold storage and cold chain distribution, and two Level agents and small-scale agents are required to invest in warehouses and implement GSP regulations. Therefore, most warehouses do not have a warehouse. After a pharmaceutical sales order is issued, the manufacturer or first-tier agent is notified of the shipment.

According to Chen Li, most small pharmaceutical companies usually rent medicines and put them on the inside, and they don't care about the temperature of medicines being stored. It is this non-standard environment that has led to rampant drugs.

In the circulation of pharmaceuticals, the presence of a large number of second- and third-tier agents has raised the terminal price of drugs. For example, taking the price of a generic medicine as an example, the pharmaceutical factory reserves the ex-factory price after retaining about 15% of the profit. In circulation, the provincial-level first-level pharmaceutical commercial company usually guarantees a profit of about 15% for the sake of volume. Re-distribution to a second-tier medical vendor. Because of the high cost of sales, secondary pharmaceutical companies generally have a profit margin of around 50% to 60%. Calculated on the basis of a small pharmaceutical company with about 90 employees, the annual net profit will be maintained between 700,000 and 800,000. “But from 2013 onwards, with the price reduction in the tendering process, the profit of Chen Li’s company has gradually decreased. By 2014, the net profit was only around 300,000.” Chen Lihe and his partners are divided into the following calculations: 8 months in a year Time drifts, but earn less and less.

When the secondary distributors are squeezed out about 40% of their profit margins, the price of medicines will naturally drop 40 points. By then, the hospital will make great breakthroughs in the reform of medicine and medical care, which will ultimately reduce the cost for people to buy medicines.

Oligopoly formation period

In the eyes of a Sinopharm Henan Pharmaceutical Business Company, this round of policies has caused many secondary pharmaceutical agents to face a crisis of survival. In the future, they may be merged by large-scale pharmaceutical and commercial companies, and then the overall operation will be attributed to the regional company structure defined by the headquarters, and distribution and distribution of pharmaceuticals will be carried out within the headquarters's plan.

Of course, they can, like Chen Li, bid farewell to the pharmaceutical industry.

With the control and control of related drugs on drugs, the oligopolistic structure of China's pharmaceutical business companies is gradually taking shape. In the eyes of Harbin Pharmaceutical and Yanjing Pharmaceutical Company, there are too many 10,000 pharmaceutical commercial companies. The United States has only three large commercial pharmaceutical companies.

At present, although the concentration of domestic top 100 pharmaceutical commercial companies is increasing, it is still relatively low compared with foreign countries. According to the statistical analysis of the pharmaceutical circulation in 2013 by the Ministry of Commerce, the main business revenues of the top 100 drug wholesalers have increased by 20.1% year-on-year, of which the main business revenues of the top 10 companies have increased by 22.9% year-on-year, and the top 50 companies' main business revenues have grown year-on-year. 20.9%.

In the year, there were 12 pharmaceutical wholesale enterprises with main business revenues of more than 10 billion yuan, an increase of 2 over the previous year; 11 were between 5 billion and 10 billion yuan, 4 more than the previous year; 1 billion to 5 billion yuan. There are 75 companies, one more than the previous year.

In fact, as early as in 2009, the Ministry of Commerce was interested in promoting the reshuffle of pharmaceutical commercial companies.

According to the "Twelfth Five-Year Plan" outline of the Ministry of Commerce on the distribution of pharmaceuticals, as of the end of 2009, there were more than 13,000 drug wholesalers nationwide; in 2009, the total sales volume of drug wholesalers nationwide reached 568.4 billion yuan, from 2000 to 2009, Average annual growth of 15%.

Due to the long-established system-based malpractices such as the drug-supplementing medical system and the inadequacy of drug pricing, procurement, and health insurance payment mechanisms, coupled with low access thresholds, lack of industry planning management, inadequate market competition, and law enforcement supervision Insufficient factors have led to a low degree of concentration in the pharmaceutical distribution industry, and the development of modern pharmaceutical logistics has lagged behind. Various types of illegal business operations in the field of buying and selling have become prominent.

In order to increase industry concentration and regulate the chaos in the circulation industry, the outline of the Ministry of Commerce proposes to form one to three national large-scale pharmaceutical and commercial groups with annual sales of over 100 billion by the end of 2015, and 20 regions with annual sales of more than 10 billion yuan. Sex drug distribution companies; annual sales of pharmaceutical wholesale companies accounted for more than 85% of total drug sales.

According to sources close to the Department of Drug Distribution of the Ministry of Commerce, at the time when the Ministry of Commerce was preparing the outline of the plan, internal discussions had hoped to adopt policies to leverage and to shuffle the industry to around 3,000 by the end of 2015. However, considering that it was impossible to control it, it was not finally written into the document.

For the restructuring of the industry, the formation of leading enterprises is clearly documented. With regard to the large number of enterprises, the outline guides the strengthening of daily supervision and assessment, and establishes an exit system. Enterprises that violate laws and regulations and fail to comply with various management systems must be rectified within a time limit and severely cancel their business qualifications.

Guided by this general idea, local governments have stepped up the ban on some small and medium-sized pharmaceutical companies in recent years. In March, Shanxi stopped the business of 64 drug companies in the province that had expired certificates and had not passed the newly revised GSP certification. As the pilot province for medical reform, Fujian Province proposes that by the year 2017, the province will retain 10 distribution companies to distribute medicines and equipment in the province. In this five-year period, major pharmaceutical groups such as Sinopharm, China Resources, Harbin Pharmaceuticals, North Pharmaceuticals, etc. are constantly expanding their marketing horizons. "With the reform of drug prices, the intermediate link must be cleared." According to the Health and Family Planning Commission, the circulation will be more standardized. In the future, the pattern of oligarchs in China's pharmaceutical and commercial companies will gradually develop.