Business Club, May 31st, 2008 How the Chinese traditional medicine industry can adjust its value orientation among prices, costs, and quality, and maintain sustainable development, attracting close attention from the industry
See also the "one-day price" scenario. Since March of this year, the boom in Chinese herbal medicines that began in 2009 has entered the fourth round.
In the face of the dual pressures of rising raw material prices for raw Chinese herbal medicines and continued price cuts for Chinese medicine products, coupled with the difficulties in bidding, how the traditional Chinese medicine industry will set its value orientation among prices, costs, and quality in the future and maintain sustainable development The industry pays close attention.
Double stress test
According to the data monitored by the Information Center of the Chinese Medicines Association, the index for the Chinese herbal medicines market closed at 2819.55 points in April, up 4.665% from the previous month. The market continued to show an upward trend since last month, such as the major varieties Codonopsis pilosula, wheat winter, hawthorn meat, and Chuanbei. And so on, there has been a large increase. According to a Zhejiang drug dealer, Zhebei, the main product of Zhejiang, has risen from about 50 yuan per kilogram to about 90 yuan per kilogram in the last two months, which has nearly doubled, such as Chuanbei Lulu and Taiji oral liquid. All kinds of pharmaceutical products are affected.
Due to the increase in prices of raw medicines, Yunnan Baiyao expects this year's cost increase to be over RMB 100 million. In addition to the price of medicinal herbs, the rise in the cost of human resources has also aggravated the company's total cost control. For example, Zhejiang Kangenbei Pharmaceutical Co., Ltd. has seen employees' salaries increase by 10% this year.
Due to the rising prices of raw materials for Chinese herbal medicines, companies generally feel that the pressure of production costs is relatively high. Many companies can only take measures to ensure market supply of leading products, stop production or limit production of individual products, so as to alleviate the urgent need.
Sun Feng, general manager of Wanxi Pharmaceutical, disclosed to the “Medicine Economics†reporter that the company’s Naoxuekang Oral Liquid had basically stopped production in November last year, because the main medicinal potion had risen to nearly RMB 1,000/kg last year and voted for it. Enterprises should lose about 100,000. “Some reduction in Jianweixiaoshi tablets, Taizishen is now almost 500 yuan/kg, and it is only limited to the amount of raw materials per month. Banlangen is sold at a loss. This is because Banlangen had some stocks last year. If we continue to rise, we will not Dare to do it again."
In the list of the first batch of essential drugs identified at the beginning of May in the country, there are 20 varieties such as Compound Danshen Tablets, Banlangen Granules, Niuhuang Jiedu Tablets, Huoxiang Zhengqishui, Liuwei Dihuang Wan, Shedan Chuanbei Liquid and Sanqi Tablets. Both involve raw material price increases.
In the aspect of drug tendering, the lowest bid price for the base drug has been continuously refreshed, and products with bids below the cost price have appeared from time to time. The controversy over the quality of the drugs caused by "false low prices" is also controversial.
In fact, the regulatory authorities have already taken action. In May, the State Food and Drug Administration again issued a notice on strengthening the supervision of essential drug quality, requiring all localities to strictly inspect the quality of essential drugs. In particular, prices of some Chinese herbal medicines rose by a relatively large margin, and the price of essential drugs using them as raw materials decreased. Variety, to in-depth inspection of production. Including compound Danshen tablets, Banlangen particles, Niuhuangjiedu tablets, Huoxiangzhengqi water, Liuwei Dihuang Wan, Shedan Chuanbei liquid, Panax notoginseng and other Chinese patent medicine products.
The inspection method has been adjusted from the routine sampling inspection to the production site inspection. The inspection focuses on the two key points of “sources of raw materials for pharmaceutical use†and “equilibration of materials during production processâ€. The supervision gate is moved forward to ensure the quality and safety of the base medicine.
Already early warning and layout
As raw material prices continue to rise and cost pressures continue to increase, the issue of how companies can guarantee quality has become the focus of attention.
Although cost pressures are difficult to predict, the surveyed companies all stated that quality assurance is still the top priority for corporate production. Continuous improvement and improvement of corporate internal control standards and the strengthening of GMP implementation have become the main technical means for corporate quality assurance.
President Hu Jiqiang of Zhejiang Kang Enbei stated that at this stage, the company’s R&D, production, quality, and management agencies must do two things: First, do a good job in the improvement of the quality standards of the main varieties and actively participate in the quality standards of the relevant national departments. Improve operations and increase the internal control standards that are higher than national standards and can truly reflect internal quality as national standards as soon as possible. This will not only be more responsible for drug use by consumers, but also be an active means of competition. Second, it will actively implement the new version. The work of GMP is to achieve and implement the new version of GMP requirements as early as possible in the software. At the same time, as planned, the new version of GMP is fully implemented on hardware as soon as possible to ensure the quality of enterprise products. Wanxi Pharmaceutical also said that at this juncture, it should focus on the production process and strengthen control.
However, the improvement of internal control standards and production processes is not a one-time event. To resolve the pressures at the moment, companies still need to work on a multi-pronged basis, and pay attention to cost control management and raw medicine storage.
In the face of rising prices of Chinese herbal medicines, Beijing Tong Ren Tang put forward predictions and preventive measures for raw material risks in its 2010 annual report: The quantity of raw materials whose quality meets the company's selection criteria may be insufficient, and procurement and storage work will be done in time while strengthening. Internal communication and coordination, a reasonable inventory structure; further play the role of medicinal planting bases, make a good reserve of precious herbs. Yunnan Baiyao, Qianjin Pharmaceutical and other companies have started emergency plans for drug reserves.
The current price increase for medicinal herbs is mainly due to the imbalance between supply and demand. Therefore, the base itself has also become the choice of many large-scale production companies. At this stage, the Wanhuang Pill series, the leading product of Wanxi Pharmaceuticals, mainly depends on the company's own bases for hawthorn, yam, peony bark, coriander, and Alisma GAP herbs to ensure supply and quality. At the same time, the company has also adopted centralized production to reduce energy consumption; it has directly purchased raw medicinal materials from its production areas, guaranteed quality, and reduced intermediate links to control costs.
“The state does not mandate that Chinese medicine companies should build GAP bases for Chinese herbal medicines. However, if leading Chinese medicine companies can build 3 to 5 kinds of Chinese herbal medicine bases, then mainstream companies can build 300 to 500 kinds of Chinese herbal medicine bases if they reach 500. Therefore, our commonly used Chinese herbal medicines can basically meet the supply, and this is also a long-term solution to the 'scissors' difference from the corporate perspective," said Sun Feng.
At this stage, the large-scale profit or product of proprietary Chinese medicine companies is mainly maintained by some profitable products. Therefore, the development of new products will be a lasting source of profits for companies. Tasly, Connbay, and other new drugs were approved in the second quarter of this year, and the industry generally believes that new drugs will become an important guarantee for the long-term sustainable development of related companies.
See also the "one-day price" scenario. Since March of this year, the boom in Chinese herbal medicines that began in 2009 has entered the fourth round.
In the face of the dual pressures of rising raw material prices for raw Chinese herbal medicines and continued price cuts for Chinese medicine products, coupled with the difficulties in bidding, how the traditional Chinese medicine industry will set its value orientation among prices, costs, and quality in the future and maintain sustainable development The industry pays close attention.
Double stress test
According to the data monitored by the Information Center of the Chinese Medicines Association, the index for the Chinese herbal medicines market closed at 2819.55 points in April, up 4.665% from the previous month. The market continued to show an upward trend since last month, such as the major varieties Codonopsis pilosula, wheat winter, hawthorn meat, and Chuanbei. And so on, there has been a large increase. According to a Zhejiang drug dealer, Zhebei, the main product of Zhejiang, has risen from about 50 yuan per kilogram to about 90 yuan per kilogram in the last two months, which has nearly doubled, such as Chuanbei Lulu and Taiji oral liquid. All kinds of pharmaceutical products are affected.
Due to the increase in prices of raw medicines, Yunnan Baiyao expects this year's cost increase to be over RMB 100 million. In addition to the price of medicinal herbs, the rise in the cost of human resources has also aggravated the company's total cost control. For example, Zhejiang Kangenbei Pharmaceutical Co., Ltd. has seen employees' salaries increase by 10% this year.
Due to the rising prices of raw materials for Chinese herbal medicines, companies generally feel that the pressure of production costs is relatively high. Many companies can only take measures to ensure market supply of leading products, stop production or limit production of individual products, so as to alleviate the urgent need.
Sun Feng, general manager of Wanxi Pharmaceutical, disclosed to the “Medicine Economics†reporter that the company’s Naoxuekang Oral Liquid had basically stopped production in November last year, because the main medicinal potion had risen to nearly RMB 1,000/kg last year and voted for it. Enterprises should lose about 100,000. “Some reduction in Jianweixiaoshi tablets, Taizishen is now almost 500 yuan/kg, and it is only limited to the amount of raw materials per month. Banlangen is sold at a loss. This is because Banlangen had some stocks last year. If we continue to rise, we will not Dare to do it again."
In the list of the first batch of essential drugs identified at the beginning of May in the country, there are 20 varieties such as Compound Danshen Tablets, Banlangen Granules, Niuhuang Jiedu Tablets, Huoxiang Zhengqishui, Liuwei Dihuang Wan, Shedan Chuanbei Liquid and Sanqi Tablets. Both involve raw material price increases.
In the aspect of drug tendering, the lowest bid price for the base drug has been continuously refreshed, and products with bids below the cost price have appeared from time to time. The controversy over the quality of the drugs caused by "false low prices" is also controversial.
In fact, the regulatory authorities have already taken action. In May, the State Food and Drug Administration again issued a notice on strengthening the supervision of essential drug quality, requiring all localities to strictly inspect the quality of essential drugs. In particular, prices of some Chinese herbal medicines rose by a relatively large margin, and the price of essential drugs using them as raw materials decreased. Variety, to in-depth inspection of production. Including compound Danshen tablets, Banlangen particles, Niuhuangjiedu tablets, Huoxiangzhengqi water, Liuwei Dihuang Wan, Shedan Chuanbei liquid, Panax notoginseng and other Chinese patent medicine products.
The inspection method has been adjusted from the routine sampling inspection to the production site inspection. The inspection focuses on the two key points of “sources of raw materials for pharmaceutical use†and “equilibration of materials during production processâ€. The supervision gate is moved forward to ensure the quality and safety of the base medicine.
Already early warning and layout
As raw material prices continue to rise and cost pressures continue to increase, the issue of how companies can guarantee quality has become the focus of attention.
Although cost pressures are difficult to predict, the surveyed companies all stated that quality assurance is still the top priority for corporate production. Continuous improvement and improvement of corporate internal control standards and the strengthening of GMP implementation have become the main technical means for corporate quality assurance.
President Hu Jiqiang of Zhejiang Kang Enbei stated that at this stage, the company’s R&D, production, quality, and management agencies must do two things: First, do a good job in the improvement of the quality standards of the main varieties and actively participate in the quality standards of the relevant national departments. Improve operations and increase the internal control standards that are higher than national standards and can truly reflect internal quality as national standards as soon as possible. This will not only be more responsible for drug use by consumers, but also be an active means of competition. Second, it will actively implement the new version. The work of GMP is to achieve and implement the new version of GMP requirements as early as possible in the software. At the same time, as planned, the new version of GMP is fully implemented on hardware as soon as possible to ensure the quality of enterprise products. Wanxi Pharmaceutical also said that at this juncture, it should focus on the production process and strengthen control.
However, the improvement of internal control standards and production processes is not a one-time event. To resolve the pressures at the moment, companies still need to work on a multi-pronged basis, and pay attention to cost control management and raw medicine storage.
In the face of rising prices of Chinese herbal medicines, Beijing Tong Ren Tang put forward predictions and preventive measures for raw material risks in its 2010 annual report: The quantity of raw materials whose quality meets the company's selection criteria may be insufficient, and procurement and storage work will be done in time while strengthening. Internal communication and coordination, a reasonable inventory structure; further play the role of medicinal planting bases, make a good reserve of precious herbs. Yunnan Baiyao, Qianjin Pharmaceutical and other companies have started emergency plans for drug reserves.
The current price increase for medicinal herbs is mainly due to the imbalance between supply and demand. Therefore, the base itself has also become the choice of many large-scale production companies. At this stage, the Wanhuang Pill series, the leading product of Wanxi Pharmaceuticals, mainly depends on the company's own bases for hawthorn, yam, peony bark, coriander, and Alisma GAP herbs to ensure supply and quality. At the same time, the company has also adopted centralized production to reduce energy consumption; it has directly purchased raw medicinal materials from its production areas, guaranteed quality, and reduced intermediate links to control costs.
“The state does not mandate that Chinese medicine companies should build GAP bases for Chinese herbal medicines. However, if leading Chinese medicine companies can build 3 to 5 kinds of Chinese herbal medicine bases, then mainstream companies can build 300 to 500 kinds of Chinese herbal medicine bases if they reach 500. Therefore, our commonly used Chinese herbal medicines can basically meet the supply, and this is also a long-term solution to the 'scissors' difference from the corporate perspective," said Sun Feng.
At this stage, the large-scale profit or product of proprietary Chinese medicine companies is mainly maintained by some profitable products. Therefore, the development of new products will be a lasting source of profits for companies. Tasly, Connbay, and other new drugs were approved in the second quarter of this year, and the industry generally believes that new drugs will become an important guarantee for the long-term sustainable development of related companies.
Ginger Herbal Medicine,Ginger Food,Ginger Root,Ginger Powder
Yirun Agricultural Cooperative , https://www.yiruncn.com