National essential drugs should be "price cut"

In an example, a drug priced at 17 yuan would drop to 14.55 yuan if reduced by 15%. Under constant production and distribution conditions, the cost per box of medicine is 2.55 yuan, with an annual sales volume of 1 million boxes. This means that for a single product, the company could face a revenue gap of 2.55 million yuan, according to Fang Ming, a representative from a pharmaceutical company in Guangzhou’s southwest district, who explained this to a reporter. The introduction of the essential drugs list and related policies has significantly influenced pricing, creating challenges for some companies. Fang Ming admitted that the impact of price reductions on the entire supply chain cannot be ignored. At present, manufacturers are exploring solutions, such as launching multiple product standards to lower prices and adapt to the policy, or reducing prices first and waiting for a better time to adjust them later. According to preliminary estimates from the national price department, the average price of essential drugs has dropped by about 10% after the release of the basic drug list. With zero-profit sales at grassroots levels and the removal of a 15% markup, the total reduction could reach at least 25%. Moreover, all essential drugs are included in the basic medical insurance reimbursement catalog, with higher reimbursement rates than non-essential drugs. Professor Gu Yu from Peking University noted that the national retail guide price sets a range for each province's retail prices, but it has limited influence on actual drug pricing. Professor Zhao Jie, a medical reform expert at the Central Party School, added that while drug prices will likely fall after the essential drug list is published, patients may not necessarily see a reduction in overall medical expenses. Hospital treatment includes various fees, and only when essential drugs are used in treatment programs can patients benefit more from the price cuts. Price adjustments are accelerating corporate restructuring. Market changes are already affecting production and distribution channels. Fang Ming shared that in October, Yunnan began inviting bids, and many dealers are now reaching out to manufacturers, hoping to secure influential products. Under the zero-price policy, distributors can only earn subsidies and manufacturer rebates. Yu Mingde, president of the China Pharmaceutical Enterprise Management Association, said that with the implementation of the basic drug system, annual drug consumption is expected to increase by 160 to 170 billion yuan, benefiting many pharmaceutical companies. According to the National Bureau of Statistics, the total output value of the pharmaceutical industry in 2008 reached 791.2 billion yuan, up 25.23% year-on-year. The sales revenue of Chinese patent medicine companies was 177.9 billion yuan, rising 21.253%. Opportunities favor those who are prepared, according to Shenyin Wanguo and other institutions. Regional large-scale generic drug companies and pharmaceutical distributors are expected to consolidate, with leading enterprises gaining significant advantages. During the design of the basic drug system, numerous links and interest adjustments are involved. Currently, domestic pharmaceutical companies are generally overcapacity, and with the national basic drug system in place, many mergers and acquisitions are likely, pushing weaker companies out of the market. Zhao Jie believes that hospitals’ use of essential versus non-essential drugs will affect pharmaceutical companies. Those with strong relationships with hospitals may gain more benefits. Gu Yu pointed out that securing a high price mark in provincial bidding is crucial for improving drug sales. Meanwhile, Zhao Jie added that following the release of the essential drug list, another major reform—public hospital reform—is expected. If public hospitals become more publicly oriented, their marketization could hit drug production and sales hard, potentially leading to a difficult period for manufacturers.

Dietary Supplements

Dietary Supplements,Korean Ginseng,Elite Ginseng,Elite Extract Of American Ginseng

Yanbian Dangun Pharmaceutical Co., Ltd. , https://www.tanjunpharmacy.com