At present, the competition in the drug market is extremely fierce, if the drug price is further discounted by 4%, what kind of business model will it be? Will it really work?
文 | Mo叔
Caizhi, the first pharmacy, learned that a large pharmaceutical e-commerce platform is cooperating with an insurance company to pilot a "drug + insurance" model. In this model, consumers can enjoy a 4% discount on the price of drugs when they buy drugs.
Figure 1 is taken from a platform area
At present, the competition in the drug market is extremely fierce, if the drug price is further discounted by 4%, what kind of business model will it be? Can such a strategy really work?
01
Insurance reimbursement 60%
In order to verify the authenticity of this model, the author contacted the platform's customer service and completed the entire operation process according to the guidelines.
On the whole, the operation process is very smooth and simple: first, on the "Insurance" sub-page, you only need to click "Free Drug Reimbursement" once, you can automatically participate in the insurance plan (free version) and get a reimbursement amount of 50 yuan. Then enter the corresponding area (see Figure 1), where you can purchase drugs normally. At the checkout stage, the system displays the amount of insurance reimbursement that has been used (see Figure 2).
Figure 2, Insurance Reimbursement Settlement Page
In this process, insurance plays a role similar to that of health insurance co-ordination, reimbursing 60% of the cost of the drug directly, and paying the rest for the consumer. The maximum amount of reimbursement is the amount of the insurance policy, and the amount of the free version is 50 yuan. If the consumer pays 3.3 yuan per month or 39.6 yuan per year, he can officially sign a contract and enjoy an insurance amount of up to 10,000 yuan.
However, there are some significant doubts about this seemingly ideal model. First of all, insurance is not a medical pool, how does it make a profit? In addition, since the drug price is directly reimbursed, this insurance product does not involve the probability factor found in traditional insurance products. So, where is the long-term sustainability of this product? With these questions in mind, let's explore and analyze them further.
02
Immature "semi-finished products"
Although this is only a preliminary experience, some significant issues have already surfaced along the way that could affect consumers' overall satisfaction and trust in the platform.
First of all, there are doubts about the true effect of the discount. In the above-mentioned zones, the pricing of drugs is higher than the regular selling price on the platform in most cases. For example, of the five drugs shown in Figure 1, three are priced higher than the platform's lowest price, and only two are slightly lower. The price of the drug purchased in Figure 2 is several times the lowest price on the platform.
Secondly, the after-sales service process of drugs is more complicated. When trying to refund the drug in Figure 2, it was found that the platform did not provide a direct return function, and it was necessary to contact customer service by phone. After passing the telephone customer service, it was found that it was a third-party company that handled the refund after-sales, not the platform customer service.
Third, the content of electronic contracts is relatively simple. Although the contract lists the reimbursement ratio, it does not specify the reference standard for the price of the drug, which may raise doubts about the fairness of the price.
Figure 3, screenshot of the electronic contract
Fourth, the types of drugs are relatively limited. Although there are more than 400 standing medicines mentioned in the promotional materials, this number may not meet the needs of a wide range of drugs in practical applications, and many commonly used drugs have not yet been included.
To sum up, it seems that this drug purchase model is still in the exploratory stage, and is more like an immature "semi-finished product". The biggest problem at the moment is the lack of clarity about the pricing criteria. Now that the payout ratio has been written into the contract, it is important to have clear and reasonable pricing criteria. For example, in some regions, the proportion of medical insurance payment for designated retail pharmacies is 70%, and the payment standard is based on the drug procurement records of the procurement subsystem of the medical insurance information system. Such clear criteria are essential to ensure the transparency and fairness of the model.
03
Exploration of a new model of "medicine + insurance".
Although this "medicine + insurance" model has many flaws, it still shows us an innovative way forward.
In fact, this innovative payment model, which combines insurance with the pharmaceutical industry, is closely related to the negotiation strategy of health insurance for many years. For the drugs included in the scope of negotiation, the medical insurance department negotiates with the enterprise with the "national medical insurance usage", which realizes the "soul price reduction", effectively improves the efficiency of the use of the medical insurance fund, and actually reduces the financial burden of patients.
As early as 2017, a domestic medical technology company proposed to introduce various insurance products to innovate the medical payment model and solve the problem of expensive medical treatment for the public, which is quite similar to the business model of PBM in the United States. These medical technology companies have cooperated with domestic insurance companies to successively launch a multi-drug channel model and an innovative drug discount model.
However, in 2022, the Property Insurance Department of the former China Banking and Insurance Regulatory Commission issued the "Notice on Problems and Related Risks in the Short-term Health Insurance Business of Some Property Insurance Companies", which seriously pointed out that this kind of business violates the basic principles of insurance and the law of large numbers, and alienates the essence of insurance in view of the model of some property insurance companies underwriting the late-stage drug expenses of patients with confirmed diseases. Subsequently, the multi-drug channel model gradually withdrew from the market, while the discount model has achieved better development.
At present, there has been an innovative payment 2.0 model for patients with specific diseases, an insurance model that endorses the efficacy of new drugs, and a general drug discount model mentioned at the beginning of the article.
This general drug discount model is mainly based on the drug Internet platform as the core, and cooperates with B-end enterprises such as insurance and banks to directly purchase upstream pharmaceutical companies that do not win the bid for centralized procurement, and provides users with products with lower market prices in the form of Internet outpatient insurance or medical insurance for specific drug expenses.
- On the platform side, the cost can be shared through cooperation, the marketing cost can be reduced, the "low-price" brand image can be further consolidated, and the user traffic can be attracted.
- On the pharmaceutical side, it will help expand market sales channels and reduce the impact of unsuccessful centralized procurement to a certain extent.
- On the insurance side, this kind of small value-added service helps to cultivate users' insurance awareness, and can also attract traffic to traditional insurance products.
- On the pharmacy side, it helps to reduce the cost of sales and enhance brand power.
- On the patient side, the financial burden of drug purchase is further reduced.
With the deepening of medical insurance centralized procurement and the advancement of payment method reform, more and more drug or device companies need to obtain increments from the out-of-hospital pharmacy system. However, it will take time for the dual-channel, outpatient co-ordination and other policies of basic medical insurance to fully cover the pharmacy system, which makes new drugs and non-winning varieties will still be a blank area for medical security, so commercial insurance has the conditions and space to explore more valuable drug innovation payment.
In general, the continuous update and iteration of this discount model objectively constitutes a new form of integration of drugs and insurance, bringing practical benefits to patients. Although this innovative model cannot greatly reduce the financial burden of drug patients through large populations and high leverage, any model that can bring tangible benefits to patients should be encouraged and developed.
However, the success of the model should be based on authenticity, rigor and effectiveness. If you rely solely on exaggerated propaganda to attract users, you may quickly lose user trust if something goes wrong.
For this kind of "drug + insurance" or other innovative models, we welcome everyone to leave a message to discuss and discuss their development prospects.
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Reference: Research Report on the Development of Pharmaceutical Welfare Management (PBM) in China: Promoting the Diversified Supply of Pharmaceutical Service Market
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