After the normalization of collection and procurement, small and medium-sized drug dealers may "withdraw"

After the announcement of the results of the fourth batch of national procurement, Shanghai Sunshine Pharmaceutical Procurement Network recently released the "Announcement of Distribution Enterprises in Shanghai Area of the National Centralized Procurement of Drugs", which will be announced until February 7.

China's national procurement variety distribution is basically by large pharmaceutical commercial companies, distribution enterprises are the head of the pattern of drug dealers, analysts believe that with the continuous expansion of the coverage of collection, pharmaceutical commercial circulation pattern will also be reconstructed, drug distribution enterprises scale, intensification and modernization has become a trend, small and medium-sized pharmaceutical companies or will "exit".

Head drug dealers gradually become distribution "leading enterprises"

The fourth batch of centralized procurement of drugs organized by the state has opened bids in Shanghai a few days ago, and the results of the proposed selection have been produced. The procurement produced 118 enterprises to be selected, 158 products to be selected, and the average price reduction of the products to be selected was 52%.

In view of the distribution of selected varieties of drugs in the national procurement, Shanghai has put forward not low requirements for the speed of distribution and channel coverage of enterprises. According to the "Supplementary Document for Centralized Procurement of Shanghai Region nationwide (gy-yd2021-1)" previously released, a selected drug can only be entrusted to a drug distribution enterprise to be responsible for distribution, and the designated distribution enterprise should meet the following conditions: the designated distribution enterprise will cover all districts of the city in 2020; the designated distribution enterprise has the ability and conditions to distribute the selected drugs to the city's medical insurance designated medical institutions within 24 hours.

According to the "Announcement of Distribution Enterprises in Shanghai", all 45 varieties of the fourth batch of national procurement have been assigned to corresponding distributors, and the distribution enterprises of the Chinese Medicine Department have won the distribution qualifications of 22 varieties, 21 on the drug, and 2 for China Resources. Three of the four major domestic pharmaceutical commercial companies basically cover the distribution of national procurement varieties in Shanghai.

The reporter combed and found that from the first round of 4 + 7 to the fourth batch of national procurement results announced, the distribution of national mining varieties in Shanghai was basically covered by drugs and state control, and it was difficult to find the figure of small and medium-sized distribution enterprises. The distribution of nationally mined varieties in other provinces is also basically covered by the four major pharmaceutical commercial companies and local large pharmaceutical commercial enterprises.

The core of the steady growth of Liuyao's performance in the central and western regions lies in the huge resources of the local retail sector, especially the distribution of many national procurement varieties: the total number of pharmacies has reached 668, of which 417 are medical insurance pharmacies and 109 dtp pharmacies, and through the way of "synchronous force" of national procurement distribution and retail channels, the construction of specialized pharmacies is actively carried out under the background of prescription outflow, and at the same time, production and processing in the field of traditional Chinese medicine.

Small and medium-sized pharmaceutical circulation enterprises are facing cost control challenges

Industry insiders believe that the distribution enterprises present a pattern of "head drug dealers dominating", on the one hand, because the national procurement has put forward higher requirements for distribution; on the other hand, the price of the selected varieties in the national procurement has been greatly reduced, and the pharmaceutical commercial enterprises that "charge distribution fees according to the point" have put forward stronger cost control capabilities. With the continuous expansion of national collection and varieties, small and medium-sized pharmaceutical circulation enterprises are facing the challenges of distribution timeliness and cost control, and the pressure continues to increase.

Liu Gang, vice president of Nanning Yishengtang Pharmaceutical Distribution Company, said: "The main business of pharmaceutical commercial enterprises is distribution and wholesale business, retail business and pharmaceutical industry, etc. The national collection makes pharmaceutical industry enterprises choose the top 3 or top 5 pharmaceutical commercial companies in the industry for distribution, which leads to more fierce competition for small and medium-sized enterprises. ”

Luo Jing, an expert who has been engaged in medical marketing research for many years and a professor at the School of Economics and Management of Guangxi Normal University, said: "The profit margin of distribution varieties is compressed, the profitability of pharmaceutical commercial companies is facing challenges, and cost control has become the key. ”

Tang Zhongyuan, a doctor in the Department of Hematology of the First Affiliated Hospital of Guangxi Medical University, believes that the selected products of the state organization of drug collection are extremely strict, the quantity and price are linked, the use is guaranteed, the advantages of drug sales and promotion of pharmaceutical circulation enterprises will be greatly weakened, and the traditional trade model of earning intermediate prices will be subverted, and the distributor will be completely reduced to a distributor. "The downward pressure on the value of the pharmaceutical circulation industry is very large." Pharmaceutical businesses that have obtained the right to distribute national collection varieties are also facing the dilemma of "increasing the amount without adding profits", and while the distribution concentration has increased, the gross profit has shrunk significantly.

Cheng Junpei, vice president of the China Pharmaceutical Commerce Association, said that in 2019, the circulation scale of China's drugs reached 2,366.7 billion, an increase of 8.6% year-on-year, showing single-digit growth for three consecutive years, and the added value of the entire drug circulation market is expected to be about 4% in 2020.

The concentration of the pharmaceutical circulation market has gradually increased

With the continuous expansion of the coverage of collection and procurement, the market pattern of pharmaceutical business as a downstream will also be reconstructed, and the scale, intensification and modernization of pharmaceutical distribution enterprises will become a trend.

At present, China's pharmaceutical circulation enterprises take the "market distribution-based business model", including grass-roots medical institutions, private hospitals, retail pharmacies, downstream distributors and other market-oriented customers as the main sales objects, providing drug sales and distribution services. However, with the improvement of the degree of marketization in the pharmaceutical industry, the two ends of the pharmaceutical commercial circulation channel (production enterprises and end customers) are increasingly dependent on pharmaceutical circulation enterprises, and after market competition and industry integration, large pharmaceutical circulation enterprises with strong market coverage, logistics and distribution, customer service, variety assurance and other capabilities will occupy more upstream and downstream resources and market share.

Under the pressure of the national organization of drug collection, the channels of the drug market are obviously differentiated. Sinopharm Holdings, China Resources, Jointown and many other listed companies have said in the previous semi-annual report that they are actively welcoming changes: the implementation of the "procurement with quantity" policy in 2020, the expansion of varieties, the expansion of scale and the reduction of drug prices, forcing pharmaceutical wholesale enterprises to accelerate innovation, transformation, and accelerate the pace of high-quality development, this field will accelerate the elimination of drug circulation enterprises that rely only on traditional business models.

In its 2019 annual report, Shanghai Pharmaceutical proposed that Shanghai Pharmaceutical actively participated in the selection of distributors with quantity procurement varieties, and provided value-added services such as market access, stockpiling and warehousing and project promotion for the winning enterprises.

China Resources will continue to focus on strategic key products and core treatment areas, and accelerate the expansion and coverage of primary medical terminals and retail terminals.

Author: □ reporter Li Tangning He Fenglun reported in Beijing

Source: Economic Reference