In recent years, with the great attention and policy support at the national level, the traditional Chinese medicine industry has not only been reborn in the traditional field, but also shown strong vitality and potential in the process of modernization. Based on the latest white paper on the status quo and future trends of the Chinese medicine industry, this article aims to comprehensively sort out the current policy environment of the Chinese medicine industry, analyze its main reform measures on the supply side, payment side and demand side, and the far-reaching impact of these measures on the long-term prosperity and development of the Chinese medicine industry.
1. Favorable policies for traditional Chinese medicine are frequently issued to promote the high-quality development of the industry
In order to encourage the high-quality development of the traditional Chinese medicine industry, the state has successively introduced a number of support policies around the traditional Chinese medicine industry chain. The national document "Opinions of the Central Committee of the Communist Party of China and the State Council on Promoting the Inheritance, Innovation and Development of Traditional Chinese Medicine", the departments in charge/local policies "Several Policies and Measures on Accelerating the Development of Traditional Chinese Medicine Characteristics", "Guiding Opinions on Medical Insurance to Support the Inheritance, Innovation and Development of Traditional Chinese Medicine" and other blockbuster documents have been issued one after another, and the traditional Chinese medicine industry is expected to usher in rapid development.
2. The reform measures cover the supply, payment and demand sides of traditional Chinese medicine
Under the guidance of national-level policies and sub-departments/local policies, the supply-side, payment-side and demand-side of the TCM industry have been continuously favorable, covering TCM registration, review and approval, quality control, medical insurance payment, TCM culture promotion and other aspects, so as to promote the long-term prosperity and development of the TCM industry in an all-round way.
Supply side: improve the vitality of the development of the traditional Chinese medicine industry, promote the construction of traditional Chinese medicine talents and service system, etc.;
Payment side: explore and improve payment policies suitable for the characteristics of traditional Chinese medicine, etc.;
Demand side: Enhance residents' knowledge of traditional Chinese medicine culture and awareness of traditional Chinese medicine health care.
1. Supply-side reform: Driven by review and approval and talent training, the reform of state-owned enterprises will be promoted
(1) Optimize the review and approval of traditional Chinese medicines, and improve the classification and registration management of traditional Chinese medicines
In terms of accelerating the reform of the review and approval mechanism of traditional Chinese medicines, by increasing the number of third-party new Chinese medicine registration and inspection institutions, strengthening the capacity building of technical support, and improving the level of technical guidance and registration service capabilities of traditional Chinese medicine registration applications; Strengthen the horizontal linkage of departments, and establish an effective mechanism for departments of science and technology, medical care, traditional Chinese medicine and other departments to recommend qualified new Chinese medicine drugs to enter the rapid review and approval channel.
At the same time, guided by the clinical needs of traditional Chinese medicine, we will accelerate the transformation of major national scientific and technological projects, coordinate internal and external technical evaluation forces, explore the granting of professional qualifications to third-party traditional Chinese medicine research platforms, and undertake national traditional Chinese medicine technology assessment.
In terms of speeding up the listing process of new traditional Chinese medicines, through the implementation of research and review linkage and front-line services for innovative Chinese medicines, the previous back-end acceleration has been transformed into full-process acceleration, so as to further stimulate the new vitality of traditional Chinese medicine innovation and development; In addition, according to the characteristics of traditional Chinese medicine, the whole life cycle management of traditional Chinese medicine standards should be strengthened.
In terms of the classification and registration management of traditional Chinese medicines, the registration and classification of traditional Chinese medicines has been improved, and traditional Chinese medicines are divided into innovative traditional Chinese medicines, improved new traditional Chinese medicines, ancient classic prescriptions, and drugs with the same name and prescription. It has also established an evidence system for the registration and review of traditional Chinese medicine based on the "three combinations" of traditional Chinese medicine theory, human experience, and clinical trials, and implemented a management mechanism for exempting non-clinical safety studies and phase I and phase II clinical trials in accordance with laws and regulations. Actively explore the establishment of a real-world research evidence system for traditional Chinese medicine.
(2) Promote the construction of traditional Chinese medicine talents and improve the traditional Chinese medicine service system
In terms of improving the overall level of Chinese medicine education, a professional curriculum system of Chinese medicine with Chinese medicine courses as the main line and Chinese medicine courses as the main line has been established, which has strengthened the selection and training of outstanding students with profound traditional Chinese medicine culture and love Chinese medicine, and strengthened the training of Chinese medicine thinking and clinical skills of Chinese medicine. At the same time, about 100 first-class undergraduate majors in traditional Chinese medicine have been laid out and constructed, and the construction of high-level professional groups in traditional Chinese medicine in vocational high schools has been promoted.
In terms of TCM teacher education, multi-level teacher education programs have been added, the scope and number of mentors and apprentices have been expanded, and appropriate performance-based salary distribution has been given to TCM physicians who undertake the task of mentoring apprentices. In addition, the heirs of the academic experience of qualified national old Chinese medicine experts can apply for the Chinese medicine professional degree examination subjects as an alternative to foreign languages in ancient Chinese medicine as the same academic ability.
In terms of talent evaluation and incentives, the ability of Chinese medicine and medical ethics are taken as the main evaluation criteria for Chinese medicine talents, and the main evaluation content of Chinese medicine physicians is to see and see a good disease. In the selection of academicians, national major talent projects and other high-level talents, we will explore the separate plan and evaluation of traditional Chinese medicine talents.
In terms of improving the traditional Chinese medicine service system, the construction of the traditional Chinese medicine medical service system has been strengthened, a number of national medical centers and regional medical centers in the direction of traditional Chinese medicine (including the integration of traditional Chinese and Western medicine) have been built, the construction of traditional Chinese medicine inheritance and innovation centers has been accelerated, and traditional Chinese medicine hospitals and departments with distinctive characteristics of dominant diseases have been built. At the same time, it has also strengthened the dissemination of traditional Chinese medicine culture, added a special project of traditional Chinese medicine in the inheritance and development project of excellent traditional Chinese culture, strengthened the protection and inheritance of intangible cultural heritage of traditional medicine, built a national museum of traditional Chinese medicine, and implemented the dissemination of traditional Chinese medicine culture.
(3) The reform of state-owned enterprises has been gradually promoted, which stimulates the vitality of enterprise operation
On June 30, 2020, the Central Committee for Comprehensively Deepening Reform deliberated and approved the Three-Year Action Plan for the Reform of State-owned Enterprises (2020-2022), which proposes to improve the state-owned assets supervision system, deepen the reform of mixed ownership, improve the market-oriented operation mechanism, and improve the core competitiveness of state-owned enterprises.
The state-owned enterprises in mainland China include 6 central state-owned enterprises such as China Resources Sanjiu, Jiangzhong Pharmaceutical and China Traditional Chinese Medicine, as well as 18 local state-owned enterprises such as Tong Ren Tang and Pien Tze Huang.
Timetable for the implementation of mixed reform and equity incentives of some state-owned enterprises in traditional Chinese medicine
In terms of reform implementation, Yunnan Baiyao launched an employee stock ownership plan; Taiji Group, Darentang, and Guangyuyuan have changed their actual controllers; Tong Ren Tang Group has taken active actions to set up a leading group for reform work, formulate action plans and task lists, and improve the system and mechanism. A number of state-owned enterprises of traditional Chinese medicine have gradually promoted mixed reform, and it is expected to continue to rejuvenate in the future.
2. Payment-side reform: Optimization of payment methods and centralized procurement policies, and expansion of the medical insurance catalog
(1) Explore payment methods that are in line with the characteristics of traditional Chinese medicine services
In June 2017, the General Office of the State Council issued the "Guiding Opinions on Further Deepening the Reform of Payment Methods for Basic Medical Insurance", proposing to "explore payment methods that meet the characteristics of traditional Chinese medicine services". The process of "syndrome differentiation and treatment" of TCM is holistic, and the medical services it provides cannot be subdivided into projects in many cases.
The relevant policy requirements of the state on exploring the payment of traditional Chinese medicine
(2) Explore payment methods that adapt to the characteristics of traditional Chinese medicine
Category 1: Implement the policy of the same disease, the same effect and the same price for the selected dominant diseases of traditional Chinese medicine; For example, Shanghai and Zhongshan City implement the same disease and the same effect and the same price for the dominant diseases of traditional Chinese medicine, and Baoding City adds 5% to the dominant diseases of traditional Chinese medicine (corresponding to Western medicine diseases) on the basis of the standard score.
The second category: combined with the characteristics of TCM disease syndrome, the TCM DRG group is established separately; This kind of practice is currently only found in Nanjing, and the innovative construction of a TCM DRG grouping system has added 51 characteristic DRG TCM disease groups.
The third category: set the differential adjustment coefficient of traditional Chinese medicine hospitals according to the characteristics of traditional Chinese medicine services; For example, Hangzhou City has adopted the "traditional Chinese medicine policy coefficient" linked to the "traditional Chinese medicine treatment rate" to encourage all diseases in traditional Chinese medicine hospitals that meet the assessment index value.
2.1 Payment (centralized procurement)
(1) The implementation of centralized procurement of Chinese patent medicines nationwide has been implemented, and the average price of selected varieties has decreased by 49.4%
On June 21, 2023, a total of 86 companies and 95 quotation representatives participated in the on-site competition, of which 63 companies and 68 quotation representatives were selected, with a winning rate of 71.6% and an average price reduction of 49.4%.
Review of previous centralized procurement of proprietary Chinese medicines: the coverage has gradually expanded, from some provinces and cities to pilot → cross-provincial alliance centralized procurement → 30 provinces, municipalities and autonomous regions across the country; The average decline ranged from 23% to 56%; The average selection rate gradually increased, and the selection rates of Hubei centralized procurement, Guangdong centralized procurement, Beijing centralized procurement, Shandong centralized procurement and national centralized procurement were 53.4%, 53.6%, 70.2%, 42.3% and 71.6% respectively.
(2) The number of exclusive varieties of Chinese patent medicine centralized procurement in China decreased by only 36%
National Centralized Procurement of Chinese Proprietary Chinese Medicine: Among the 68 products to be selected, 10 products are exclusive products, with an average decrease of 36.4% for exclusive varieties and an average decrease of 51.6% for the remaining 58 non-exclusive varieties.
The selected varieties included 15 categories, including Nao'an, Ginkgo Biloba Damo, Xinkeshu, Compound Cantharid, and Elderberry Qili, and the top three categories with the highest decreases were Compound Cantharidus (-59.5%), Xingnaojing (-55.5%), and Xiangdan (-54.7%).
(3) The decline rate of centralized procurement of proprietary Chinese medicines is more moderate, exclusive varieties can compete for a long time, and the scoring rules tend to be comprehensively reviewed
Centralized procurement of proprietary Chinese medicines compared with centralized procurement of chemical medicines:
(1) In terms of the average reduction, the average reduction rate of centralized procurement of chemical drugs was more than 50%, while the average reduction rate of centralized procurement of Chinese patent medicines was 23%-56%, which was more moderate;
(2) In terms of variety competition, there are competitive barriers such as exclusive varieties and national protected varieties of traditional Chinese medicine, which can ensure long-term competition, and the competition of chemical drugs is more intense, and there are relatively many competing products;
(3) In terms of scoring rules, the price factor of national centralized procurement of chemical drugs accounts for a large proportion, while the centralized procurement of proprietary Chinese medicines not only reduces prices, but also considers the recognition of medical institutions and the ranking of pharmaceutical companies, and the rules tend to be comprehensively reviewed.
Traditional Chinese medicine enterprises with strong product competitiveness and wide recognition by the market are expected to achieve long-term development in the context of centralized procurement, and should also actively improve the layout of the whole industrial chain of Chinese patent medicine, increase research investment, improve the level of competition, and actively develop the out-of-hospital market.
Adapt to the transformation and upgrading of traditional Chinese medicine enterprises in the rules of centralized procurement: 1) improve the layout of the whole industrial chain of traditional Chinese medicine; 2) increase investment in research and improve the level of competition; 3) Evaluate product attributes and actively develop the out-of-hospital market; 4) Use big data technology to straighten out the industrial chain; 5) Strengthen the academic promotion of proprietary Chinese medicine.
2.2 Payer (Medicare)
(1) The medical insurance catalogue continues to expand the capacity of traditional Chinese medicines, and the proportion of proprietary medicines in the medical insurance catalogue will reach 45% in 2023
In the National Medical Insurance Drug Catalog, the number of proprietary Chinese medicines continues to increase. In 2000, the first edition of the National Medical Insurance Drug Catalogue covered a total of 575 varieties of Chinese patent medicines and 913 varieties of Western medicines, and in the latest version of the National Medical Insurance Drug Catalogue in 2023, the number of Chinese patent medicines has risen to 1,390, accounting for 45%.
The number of proprietary Chinese medicines and Western medicines in the National Medical Insurance Catalogue
Image source: White Paper on the Status Quo and Future Trends of the Traditional Chinese Medicine Industry
(2) The success rate of TCM medical insurance negotiation was higher than that of Western medicine, and the decline rate was more modest
The success rate of traditional Chinese medicine in medical insurance negotiations is higher than that of Western medicine, and the price reduction is also more modest. From 2019 to 2022, the success rates of TCM medical insurance negotiations were 96%, 84%, and 86%, respectively, while the overall negotiation success rates were 59%, 79%, and 82%. In 2023, the success rate of TCM medical insurance negotiations will be about 64%, which is 56% higher than that of Western medicines; The proportion of traditional Chinese medicine with a decrease of more than 80% was 14%, which was lower than that of Western medicine (22%), and the overall decline was more modest.
(3) In 2023, the medical insurance negotiations will continue to encourage the innovation of traditional Chinese medicine
In the 2023 medical insurance negotiations, 9 proprietary Chinese medicines were successfully negotiated, namely icariin soft capsules, Huzhen Qingfeng capsules, Cen Guishugan granules, cold and dampness dissipation granules, total flavonoids of desmodium desmodium capsules, Lianyu burn ointment, ginseng Ge kidney supplement capsules, yellow hollyhock flower total flavonoids oral patches, and celery menstrual granules.
Sinogene Pharmaceutical's Class 1.2 innovative drug, Icariin Soft Capsules, is the world's first natural product-derived drug for the first-line indication of liver cancer. Its main ingredients are Epimedium weed, American ginseng, wolfberry and other drugs, the main function is immunomodulators, and it was approved for marketing in January 2022, which is suitable for unresectable hepatocellular carcinoma that is not suitable for or patients who refuse to receive standard treatment and have not received systemic therapy before.
2.3 Payment end (basic medicine): increase the proportion of proprietary Chinese medicine and rapid volume
(1) The proportion of proprietary Chinese medicines in the basic drug catalogue continues to increase, and the new version of the basic drug catalogue is expected to be adjusted in 2024
In October 2019, the General Office of the State Council issued the "986 Policy", that is, to gradually realize that the number of essential drugs equipped with government-run primary medical and health institutions, secondary public hospitals, and tertiary public hospitals shall not be less than 90%, 80%, and 60% respectively in principle.
Up to now, China has released five editions of the National Basic Drug Catalogue in 1981, 1996, 2009, 2012 and 2018, and the number of varieties of traditional Chinese medicines accounted for 0, 70.9%, 33.2%, 39.0% and 39.1% respectively.
(2) The adjustment of the basic drug catalogue adheres to the equal emphasis on traditional Chinese and Western medicine, and the proportion of exclusive varieties selected into the basic drug catalogue is relatively high
Review of the adjustment of the 2018 version of the basic drug catalog: from the perspective of exclusive/non-exclusive varieties, the proportion of exclusive varieties of new proprietary Chinese medicines is 64%, and the proportion of non-exclusive varieties is 36%, and the proportion of exclusive varieties selected into the basic drug catalog is relatively high.
From the perspective of drug categories, the top three drug categories with the highest net increase were internal medicine, pediatric and surgical drugs, and the net increase in the number of proprietary Chinese medicines was 28, 13 and 11 respectively.
(3) The varieties selected into the basic drug catalogue have been rapidly increased to promote the growth of the company's performance
In the 2018 edition of the basic drug catalog, a total of 26 listed companies in the field of traditional Chinese medicine were selected, among which Kangyuan Pharmaceutical had the most selected varieties, with 4 varieties selected, namely Xingbei cough granules, waist bitong capsules, Jinzhen oral liquid, and compound Nanxing painkiller ointment.
The exclusive varieties of listed companies (excluding exclusive dosage forms) were selected into the list of the 2018 edition of the basic drug catalog
After Zuoli Pharmaceutical's Wuling Capsule entered the basic drug catalog in 2018, its products further covered medical institutions at all levels, and its sales revenue grew rapidly. From 2019 to 2023, the year-on-year growth rate of product sales will be 37.29%, 24.69%, 40.26%, 28.47%, and 12.42% respectively, and the revenue in 2023 will reach 1.228 billion yuan.
(4) Which varieties may be included in the 2024 edition of the basic drug list?
On June 6, 2024, the General Office of the State Council issued the "Key Tasks for Deepening the Reform of the Medical and Health System in 2024", mentioning that the national essential drug list will be optimized and adjusted in due course.
2024年大陆基药目录中药品种前瞻
The new version of the basic drug catalogue is expected to: 1) take the "comprehensive clinical evaluation" of drugs as the core, and take the clinical drug demand as the guide, and give priority to the selection of varieties with large dosages, heavy cost burden and high social concern from the five categories of cardiovascular disease drugs, anti-tumor drugs, children's drugs, anti-infective drugs and Chinese patent medicines. 2) The category focuses on "innovative drugs of traditional Chinese medicine + drugs for public health prevention and treatment + drugs for children", and exclusive varieties with large dosages are more advantageous.
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