New Round Of Volume Purchase Influence Diffusion: Chain Drugstores Start Price War

In December 29, 2019, the joint procurement office issued the national drug centralized procurement document (GY-YD2019-2), and the second batch of procurement with quantity was put on the agenda. The impact of quantity purchasing on the industry is increasingly obvious, even retail pharmacies can not "be alone".

After the landing, many pharmacies told the economic news reporters in twenty-first Century that the pilot area was hit hard, the products failed to win the bid, the drugstores and hospital drugs were hung upside down, and customers returned to hospitals.

With the expansion of the previous 25 varieties nationwide, the second batch of procurement has been put on the agenda. The pressure on drugstores is increasing. In order to survive, some pharmacies choose to follow up the implementation of the purchase price with quantity. A price war, smoke gradually spread to the retail pharmacy industry. Recently, many large chain drugstores such as the people's large pharmacy, Yifeng large pharmacy, and gargle jade large public pharmacies have issued a notice saying that the price of purchasing 4+7 should be followed up with the price of the hospital.

"The same price with drugs"

With the zero differential sale of public hospitals, the CO ordinating ratio of chronic disease outpatient clinics, and the policy of purchasing 4+7 with quantity, the price upside down situation between pharmacies and hospitals has appeared again. It is also because the hospital has appeared the "price depression" of drugs. In some areas, patients queued up to buy medicine in hospitals. The price of drugstores has been repeatedly complained by patients.

Xi'an Yikang pharmaceutical chain limited liability company (hereinafter referred to as Yikang medicine) general manager Tong Wang also described the "4+7" city 25 varieties of pilot products with the embarrassment of landing after landing: with each manufacturer has been communicating, but almost no willing to supply, 25 varieties may be only 4 to the price after the price reduction, in Xi'an, customers have been back to the hospital phenomenon. It is understood that the price difference between the Xi'an hospital and the drugstore, the price of the Atorvastatin Calcium Tablets hospital is only 6.6 yuan, while the drugstore is 45 yuan, the difference is nearly 7 times.

And this Yikang medicine once again responded positively. Yikang medical company said that after the latest results of the national health insurance negotiations came out, the first time actively negotiated with the winning bidder, and successfully made the 14 "bargain drugs" enter Yikang at a very low bid price.

Yi Kang medicine said that since December 10, 2019, the people of Shaanxi can purchase the "4+7" drugs in the more than 1300 stores of Yikang medicine in the whole province, and share the same quality with the same products in the hospital. "Unified implementation of the price in the national gathering, for the shortage of varieties, we take the principle of advance booking and priority taking."

In the latest medical insurance access negotiations, the deployment of the National Health Insurance Agency shows that at least in the future, drugs will be substantially reduced by carrying out quantity purchase and medical insurance negotiations, and the same price will be achieved in hospitals and pharmacies. As early as June 2019, the State Council, director of the medical service management division, pointed out that after the establishment of the national health insurance agency, the Party group attached great importance to the management of designated medical institutions, especially the private medical institutions.

In fact, in addition to Yikang medicine, there are many chain drugstores to follow up with quantity purchase.

In December 10, 2019, the regional leading drugstore gargling jade public pharmacies issued a message to the outside world, saying that the implementation of the national health insurance agency policy, the 22 centralized purchasing products that chain drugstores can operate, from December 2019, more than 1600 stores in Shandong province will uniformly execute the bid price of the national organization drug collection.

In December 18, 2019, Yifeng pharmaceutical dispensary announced in its official micro office that if consumers in other market organizations outside Yifeng, within 2 km, bought the same plant and the same standard drugs below the retail price or membership price of the store, once verified, Yi Feng will be returned by 3 times the minimum sales unit of the drug. Up to now, the information has more than 100 thousand of the amount of reading, recognition of more than 5000.

In December 20, 2019, the public pharmacies issued a document saying that they are making positive use of the scale advantage of the national layout, actively negotiating with the major brand manufacturers, resolutely implementing the national bid price, and over 5000 stores in 22 provinces across the country.

Xie Zilong, chairman of the people's large pharmacy, seems to be short term for the company, which is good for a long time. In the short term, the price will show a contrast; in the long run, it will push the enterprises that have failed in bidding to move closer to the head enterprises. And pointed out that the retail industry is organizing enterprises to negotiate with manufacturers to ensure annual sales volume, promise to buy with quantity, and strive for price concessions for manufacturers.

Outflow of prescription drugs

In fact, some provinces have encouraged the designated retail pharmacies to take an active part in purchasing quantity, such as Shandong, Jiangxi and other places.

In May 2019, the Zhejiang provincial pharmaceutical and equipment procurement platform issued the circular on the relevant matters concerning the procurement authority of the provincial pharmaceutical chain drugstore group to launch the Zhejiang provincial pharmaceutical and chain drugstore group. The 6 provincial drugstore chain pharmacies, such as Intel Yi, East China pharmacy, state control pharmacy, Xinyi pharmacy, and Yun Kai Asian American pharmacy, can apply for purchasing accounts in Zhejiang pharmaceutical equipment procurement platform, and open the online procurement authority for pharmaceutical products.

However, some people in the industry say that drugstore sales can only add 15% of the drugs, which will actually lose money.

"The prescription drugs used by the winning bidder manufacturers are not big enough in the drugstore, only a small proportion, and they hardly earn money. They belong to low gross profit or even drainage." A pharmaceutical company marketing director pointed out to the twenty-first Century economic report reporter that the 11 pilot cities in the first 25 cities had little impact on drugstores.

Wang Qiang, principal researcher of the Chinese Academy of health, told an economic reporter in twenty-first Century at an industry conference that the chain drugstores in the pilot cities adopted a series of contingency measures, such as gradually reducing or winning the bid "4+7" winning products, temporarily separating hospital prices in the form of big packaging regulations, and focusing on developing independent pricing varieties.

But with the expansion of the 25 varieties of drugs and the arrival of the second batch of collection, pharmacies need to make more preparations and adjustments.

In December 29, 2019, the national organization for centralized procurement and use of pharmaceuticals was issued jointly by the office of centralized procurement of drugs nationwide, and the second batch of centralized procurement and use of drugs by state organizations was officially launched. It is reported that the selection of 33 varieties, the purchase volume calculation base for 12 billion 400 million tablets, involving more than 100 pharmaceutical production enterprises.

Some analysts pointed out that under this background, the chain pharmacies such as gargling jade people responded quickly. On the one hand, they actively sought to enter the gathering platform and realized the same price with the hospital as soon as possible, and more importantly, this measure could make the public hospital's outflow of drugs seamless.

For retail drugstores, in the context of purchasing with quantity, there are both price reductions and price increases. The consensus reached in the industry is that the policy trend of drug separation and prescription drug outflow will not change.

Ai Kunwei data showed that in 2019, the proportion of prescription drug sales in retail channels accounted for 45.3%, higher than 2017, 43.6% and 44.8% in 2018, and sales increased 4%. According to Wang Lu, product director of the company, there are two main reasons for the increase in the sales of prescription drugs in retail channels: sales growth and new product launch. "The growth of the prescription drug market, on the one hand, is driven by sales volume, which leads to a significant reduction in the prices of foreign enterprises, which improves the accessibility of drugs and drives the sales of products to rise. This is the main force for market growth, and the second main reason is the listing of new products."

At the end of 2019, the Guangdong provincial health insurance bureau, the Guangdong Health Protection Committee and the Guangdong Provincial Drug Administration jointly issued the "guiding opinions on promoting the supply of chronic drug supply for designated retail pharmacies in basic medical insurance in Guangdong province". To explore the interconnection and sharing of prescription information, medical insurance settlement information and drug retail consumption information in medical institutions.

However, for the industry's consistent attention to the way the hospital prescriptions flow out, insiders also point out that this is still a big problem, because there are more links involved, and more importantly, the policy should be implemented to every link. The whole process needs to be promoted by the government level. It is necessary for the hospital doctors to educate the patients, and the agencies and personnel in the intermediate links should work together.