Grasping the raw material "bull nose" to prevent drug price dislocation

In recent years, China has made great efforts to reduce the price of drugs, and the measures are comprehensive. The drug add-on policy, which has been maintained for decades, has been completely abolished; the “two-vote system” of drugs has also caused middlemen to lose operating space. Especially in recent months, the measures to lower the price of drugs have been introduced intensively, with zero tariffs, medical insurance, centralized negotiations, and quantity procurement. These initiatives have combined to make the price of many drugs drop sharply.

At the same time, however, the price of APIs has skyrocketed. During the two sessions this year, Kang Enbei, chairman of Kang Enbei, publicly stated that the price of many APIs has increased by 20 or 30 times compared with previous years. The secret increase in the price of raw materials has been an open secret in the industry, but the pharmaceutical companies are afraid of breaking the supply, which can only be closed. The medicines are trying to cut prices, but the raw materials are “smashing wool” behind them. The more they drop, the more space they have.

Prices are rising, and APIs can of course rise in price normally, but there are indications that the current surge in raw materials is extremely abnormal, many of which are caused by monopoly or even collusion. For example, there are only two or three manufacturers of inosine raw materials in the country. As a result, these two companies have been represented by the “national distribution”, and the rights of two or three are combined. The price of inosine has increased five times in three years. Stir-fry raw materials, giving commissions, drug sales rebates, underwriting, etc. become unspoken rules. The hands of raw materials not only hold the source, but also reach the downstream link of pharmaceutical production and supply. The whole process of drug production and supply is related to the price of drugs, which process has problems, and the efforts of other processes may be abandoned. Moreover, many APIs seem to be inconspicuous, but as a basic medicine, they can play a key role in influencing drug prices. For example, chlorpheniramine is used as a medicine, and the dosage is not large, but as a raw material medicine, there are dozens of medicines needed. It is used as a small variety of raw materials, but it involves nearly 100 billion yuan in the market. Although the raw material glucose is also very common, it is the basic component of many medicines, its price has risen, and many medicines will rise.

Therefore, the drug substance is the "bovine nose" that controls the price of the drug. If the "bovine nose" is not grasped, the price of the drug will be dislocated, and the results obtained by other measures may also be abandoned.


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