Promote frequent prescription outflow policies
On July 14, 2017, Shandong Food and Drug Administration issued the “Opinions on Further Promoting the Transformation, Upgrading, Innovative Development of the Drug Circulation Industry (Draft for Comment)â€, and the opinion draft clearly stated that “the need for long-term use of fixed drug control and treatment For the sale of prescription drugs for chronic diseases, a patient file can be created, the patient's past medication status, information about the drug to be purchased, and the purchaser's detailed information can be recorded, and the first-preserved prescription is sold, and the complete sales account is kept for reference." This is a positive attempt to explore prescription outflows in Shandong Province.
In fact, Shandong Province is not the first place to introduce similar policies. As early as June 16, 2017, Guangdong Province clearly stated in the Notice of the Guangdong Food and Drug Administration on Further Strengthening the Safety Supervision of Drug Circulation. For the sale of prescription drugs for chronic diseases that require long-term use of fixed drug control and treatment, in order to ensure the safety of the people, it is possible to fully understand and record the patient's past medication, the information to be purchased, and the purchaser. After the details, sell with the first retained prescription and keep the complete sales ledger for reference."
Careful comparison of the policies of the two provinces, one line of the same, the same is true, in fact, from the "regular medication" as a breakthrough, "regular medication" such as chronic disease medication itself frequency stability, fixed dose, patients can better grasp Taking the medicine, it is suitable for taking medicines at a more convenient pharmacy.
In the past, Chengdu, Xi'an, Haikou and other places have successively introduced policies to explore electronic prescriptions. Nowadays, Guangdong and Shandong provinces have issued a document stating that “prescription drugs will be sold on the first prescription.†It can be said that in order to promote the outflow of prescription drugs, the barriers to prescription drug outflows are removed. There are various beneficial explorations, and the outflow of prescription drugs is the general trend.
Prescription drug outflow market is large
According to statistics, the total revenue of public hospitals in China in 2015 was 2,084.3 billion yuan, of which the drug revenue was 754.2 billion yuan, accounting for 36.2%. We estimate that the total revenue of public hospitals nationwide in 2016 will be around 2,376.7 billion yuan, and the proportion of medicines will drop to 33.9%. This is still a long way from the state-controlled drugs not exceeding 30%. If the proportion of medicines in 2016 is 30%, it means that there will be a market space of 92.3 billion yuan to be released. In the future, it will provide diagnostic tests and treatments in public hospitals. The scale of prescription drug outflows is expected to increase further as services and government financial subsidies continue to increase hospital revenues.
Chart 1: Changes in total income and drug share of public hospitals in China (unit: 100 million, %)
Source: Prospective Industry Research Institute
Retail pharmacy channel value increase
The outflow of prescription drugs means that the prescription drug sales terminal is transferred from the hospital pharmacy to the retail pharmacy. Therefore, in the process of this transfer, a considerable portion of the market capacity of the prescription drugs will be taken up by the retail pharmacy. This will greatly expand the living space of retail pharmacies. In recent years, the market size of retail pharmacies in China has continued to expand. In 2011, the sales volume of retail pharmacies was 203.9 billion yuan, and in 2016 it reached 337.7 billion yuan, with a compound growth rate of 10.6%. If 80% of the market for prescription drug outflows is undertaken by retail pharmacies, combined with the above analysis, the market space of retail pharmacies in China in 2016 will reach 411.5 billion yuan.
Chart 2: Changes in the sales scale of retail pharmacies in China (unit: 100 million, %)
Source: Prospective Industry Research Institute
In 2016, the number of retail pharmacies in China was 447,000, and the average revenue of single stores was 755,000. Considering the outflow of prescriptions, the income of single stores could theoretically increase to 920,000. In the case of pharmacy staff salary, rent and other sunken costs, the profit from prescription outflow will be directly reflected in the profit of the pharmacy, which greatly increases the living space and channel value of the pharmacy.
Figure 3: Impact of prescription outflows on retail pharmacies in China (unit: 10,000)
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