The National Health Insurance Bureau interviewed Yixintang and sounded the alarm for 480,000 designated pharmacies

The National Health Insurance Administration will continue to conduct interviews with relevant institutions that have found serious problems during inspections

Text | Xin Ying

Ed Wang Xiao

Photo/Yixintang official website

The Fund Supervision Department of the National Health Insurance Administration interviewed the relevant person in charge of Yixintang Pharmaceutical Group Co., Ltd. (hereinafter referred to as "Yixintang").

On June 2, 2024, the National Health Insurance Administration announced that the reason was that some chain pharmacies under Yixintang had violated the rules and caused the loss of the medical insurance fund.

In the supervision of the fund, the medical insurance department found that some of the designated chain stores under Yixintang had problems such as collusion of drugs, over-prescribing of drugs, medical insurance settlement for the designated retail stores that suspended medical insurance settlement, mismatch of drug purchase, sale and inventory records, and non-standard sales of prescription drugs, resulting in losses to the medical insurance fund.

On the first trading day after the news was announced, on June 3, Yixintang (002727. SZ) closed down 8.53%. As of 2023, Yixintang has 10,255 directly-operated chain stores, with an operating income of 17.38 billion yuan in 2023, ranking fourth among A-share offline pharmacies.

According to an insider in the medical insurance system, the purpose of the interview is to sound the alarm for all medical institutions at a given point.

Since 2023, the National Health Insurance Administration has included designated retail pharmacies in the scope of annual unannounced inspections, and this year it has further stepped up unannounced inspections. Not only has the proportion of spot checks increased by designated chain pharmacies, and the number of spot checks is several times that of last year, but it is also to carry out data analysis in advance, check with clues, and directly designate inspections for designated retail pharmacies with suspicious problems found in big data screening.

In response to this interview with the National Health Insurance Bureau, Yixintang immediately organized all companies across the country to conduct self-inspections of more than 10,000 of its stores, and submitted a rectification report to the Fund Supervision Department of the National Health Insurance Bureau before the end of June.

No.1's pharmacy has been notified many times

Yixintang's relevant illegal stores have been punished by the local medical insurance department to suspend the allocation or recover the medical insurance fund, impose liquidated damages or administrative fines, and terminate the medical insurance service agreement.

"The problem with Isshindo was not only discovered during the unannounced inspection." said the above-mentioned person from the medical insurance system.

In May 2024, the unannounced inspection of the National Medical Security Fund was officially launched. In less than a month, Yixintang, as the head enterprise of the national chain pharmacy, was interviewed by the Fund Supervision Department of the National Health Insurance Administration.

This year's flight inspection will focus on three aspects of investigation and punishment of designated retail pharmacies: First, false drug purchases. Falsifying prescriptions or expense lists, emptying or stealing medical insurance cards or medical insurance electronic vouchers. The second is to participate in the resale of medical insurance drugs. The third is to exchange drugs. Replace drugs or other commodities that are not paid by the medical insurance fund with medical insurance drugs for medical insurance settlement, and forge or alter the bills and accounts of "purchase, sale and storage" of medical insurance drugs.

Yixintang has previously appeared in many cases of violations exposed by the local health insurance bureau. Yixintang's annual report shows that in addition to the base camp of Yunnan, it is necessary to focus on the development of stores in Sichuan and Chongqing to quickly form a scale advantage. Nearly 80% of Yixintang's stores are in the southwest region.

In March 2024, the Medical Insurance Bureau of Junlian County, Yibin City, Sichuan Province, exposed 14 cases of violations of the Yixintang chain pharmacy.

This is a year after the overall planning and implementation of the employee medical insurance outpatient clinic in Yibin City, the Yunlian County Medical Security Affairs Center will conduct a special inspection on the use of employee outpatient mutual aid funds in designated retail pharmacies and designated clinics in January 2024. After the designated pharmacies are included in the outpatient co-ordination, patients who buy drugs in pharmacies also enjoy medical insurance reimbursement. Many pharmacies are actively applying to become "outpatient co-ordinator" pharmacies to attract more patients.

In one of the cases, the inspection team found through spot checks and on-site inspections of the 2023 medical insurance fund settlement data of Yixintang Yunlian Yunzhou North Road Store that the pharmacy had violations and breaches of contract such as over-prescribing drugs and irrational drug use, and was investigated and punished for the illegal use of medical insurance funds of 1962.33 yuan.

Over-prescribing is a common illegal method of pharmacies, and it was also "named" by the National Health Insurance Bureau in this Yixintang interview. The so-called over-prescribing of drugs: first, pharmacies sell more drugs to the insured by buying gifts, exemptions, etc.; the second is to provide convenience for drug dispensers (such as pharmaceutical company salesmen, etc.) to over-prescribe and carry out medical insurance settlement, so as to facilitate their resale and promotion of drugs at low prices; The third is to induce the insured to use the employee medical insurance outpatient co-ordination fund at the end of the year to purchase drugs and consume at the top.

Judging from the cases reported by local medical insurance departments in recent years, most of the illegal methods of Yixintang's pharmacies are similar. The National Health Insurance Administration has also used medical insurance funds in violation of laws and regulations because of the typical illegal use of medical insurance funds in some designated chain stores under Yixintang. Considering the large number of stores under Yixintang and the large amount of medical insurance funds, in order to prevent greater problems, Yixintang was interviewed.

The relevant person in charge of Yixintang said, "It is being self-corrected and self-examined."

According to the National Health Insurance Administration, as of the end of August 2023, there were 484,000 designated retail pharmacies for medical insurance nationwide. A person in charge of a chain pharmacy believes that "the National Health Insurance Bureau may mainly investigate these leading chain pharmacies, and small chains can be handed over to local supervision." ”

No.2 10,000 pharmacies self-inspection

The relevant person in charge of Yixintang said that in accordance with the requirements of the interview, before the end of June, a rectification report will be submitted to the Fund Supervision Department of the National Health Insurance Administration. It is also necessary to take the initiative to strengthen the docking with the medical insurance department, jointly strengthen the daily management of stores through cooperation and cooperation, and effectively standardize the rational use of medical insurance funds.

The supervision of designated pharmacies has been strengthened, and Yixintang believes that it is a good policy. In Yixintang's annual report, it is pointed out that the supervision of the National Medical Insurance Fund continues to maintain a strong regulatory posture through special rectification, unannounced inspections and normalized supervision, and the requirements for business compliance and credit evaluation will become higher and higher, which provides a fairer, more standardized and more favorable market development environment for leading chain pharmacy enterprises with better compliance and higher credit.

It's just that the "first knife" of the National Health Insurance Bureau's retail pharmacies fell on Yixintang, and the person in charge of Yixintang said that the problems pointed out in this interview are important wake-up calls for enterprises.

2024 is destined to be an easy year for Yixintang, which is the first time that it has handed over a report card of declining annual performance after its listing. In 2023, Yixintang will achieve operating income of 17.38 billion yuan, a year-on-year decrease of 0.29%; net profit attributable to shareholders of listed companies was 549 million yuan, a year-on-year decrease of 45.61%.

The increase in the cost of newly opened stores and the decline in sales of cold medicines were the main drivers of Yixintang's profit decline.

The pressure on Yixintang may be mainly due to the continued store expansion. As of December 31, 2023, Yixintang had 10,255 directly operated chain stores, and 1,381 new stores were opened throughout the year, with a net increase of 1,049 stores.

In 2023, what most pharmacies did not expect was the decrease in demand for cold products such as fever, cough suppressant, and antiviral. These drugs are a hot-selling category in Yixintang stores, and the revenue of these products will decline in 2023 due to the impact of the environment.

It is worth noting that Yixintang is still continuing to expand. On May 24, 2024, Yixintang just announced that it agreed to the company's wholly-owned subsidiary, Chongqing Hongxiang Yixintang Pharmaceutical Co., Ltd., to purchase the assets and inventory of 40 stores of Hechuan Red Sun.

The rapid expansion brought not only pressure on profits, but also a test of Yixintang's compliance management. This time, the National Health Insurance Bureau required Yixintang to improve the company's internal control system, improve the store management mechanism, optimize the internal control assessment methods, strengthen the law-abiding education, daily management, training and assessment of employees, and implement a "one-vote veto" for management and sales personnel who have fraud and insurance fraud.

Interviewing Yixintang stirred up a thousand waves in the medicine circle. "After the interview with Yixintang, now everyone is checking and rectifying themselves." The person in charge of the above-mentioned chain pharmacy said frankly.

The inclusion of designated pharmacies in outpatient co-ordination is a key threshold, especially for pharmacy managers. The National Health Insurance Administration pointed out that it will maintain a comprehensive and strict tone, take multiple measures to increase the supervision of designated retail pharmacies, and urge designated retail pharmacies to standardize their business behavior from the beginning of the use of the overall fund, and fasten the first "button" after entering the market.

The person in charge of the above-mentioned chain pharmacy analyzed, "It is difficult to say to what extent the pharmacy will be rectified, and it is used to earning money from medical insurance for so many years, and some pharmacies will no longer make other money." The regulatory hammer is an opportunity for the industry to rectify and upgrade, otherwise there will always be people who are lucky. ”

In addition to strengthening technical means and developing data screening models, the National Health Insurance Administration will also work with the Supreme People's Court, the Supreme People's Procuratorate, the Ministry of Public Security, the Ministry of Finance, the National Health Commission and other departments to coordinate regulatory resources and give full play to regulatory efforts to crack down on fraud and insurance fraud such as false drug purchases and reselling of medical insurance drugs.

The National Health Insurance Administration said that it will also combine this year's flight inspection and special rectification to conduct interviews with relevant institutions that have found serious problems in the inspection.