Qi Zheng Tibetan Medicine’s Lei Jufang: Healthcare Reform Brings More Benefits Than Headwinds

　　“For our company, the benefits of healthcare reform far outweigh the drawbacks,” said Lei Jufang, a member of the National Committee of the Chinese People's Political Consultative Conference and Chairwoman of Qizheng Tibetan Medicine (002287), to reporters from Dazhong Securities Journal and Caixin.com on the morning of March 2. Although last year’s performance growth wasn’t particularly significant, in Lei Jufang’s view, she sees vast room for expansion.

　　The benefits of healthcare reform outweigh the drawbacks.

　　“Despite the economic slowdown, we face relatively less pressure compared to some other companies, such as those in the real estate sector. The positives we’re facing outweigh the negatives,” Lei Jufang told reporters when describing the company’s current situation. “Take the rural areas, for example: In the past, farmers rarely went to hospitals when they were sick. But now, as reforms continue to advance, more and more people are seeking medical care. The healthcare reform has brought tangible benefits to the vast majority of farmers, and companies closely tied to grassroots drug distribution will reap significant advantages from this. There’s enormous potential in this area.”

　　However, it will still take some time before the positive effects of this development can be fully realized. In 2013, Qizheng Tibetan Medicine’s pain-relief plaster was included in the 2012 edition of the National Essential Medicines List, a move that boosted the company’s confidence and motivation. Following this, the company assembled a team to prepare for product promotion. But last year, the team was primarily focused on acquiring product knowledge and conducting market research, and was not yet ready to launch large-scale marketing efforts. “Being listed on the directory doesn’t mean we can immediately start selling; we still have to go through multiple rounds of bidding. And last year, only a handful of regions actually held bidding processes—most regions hadn’t even started their bidding procedures yet, leaving us unable to proceed. As a result, our performance fell short of our initial expectations. Still, looking at the regions that did hold bidding processes, our product proved to be quite competitive. Moreover, since the bidding process didn’t pick up last year, it’s bound to gain momentum eventually, so we remain very confident,” said Lei Jufang. According to Qizheng Tibetan Medicine’s earnings forecast, the company achieved a net profit of 238 million yuan last year, representing an increase of 11.34%. If bidding processes across various regions were to get underway, the company’s growth could well exceed these figures.

　　Traditional Chinese medicine and ethnic medicines can be incorporated into major illness assistance programs.

　　For this conference, Lei Jufang has already prepared six proposals, one of which suggests that traditional Chinese medicine and ethnic medicines could be integrated into the field of major disease relief. Using traditional Chinese medicine and ethnic medicines for major disease relief could significantly reduce costs, thereby greatly alleviating the financial burden on patients. At the same time, this approach would also help these medicines play a more effective role.

　　“There’s a Traditional Chinese Medicine clinic called Qunli in Shanghai, which I visited specifically some time ago. This clinic provides complementary treatment for cancer patients—after chemotherapy or during periods of severe illness—using Chinese herbal medicine (that is, customized herbal decoctions prescribed according to each patient’s specific condition and disease type). The results have been excellent: First, the herbal treatments have significantly improved symptoms such as poor appetite, sleep disturbances, headaches, and tinnitus among patients with serious illnesses, helping to extend their life expectancy and enhance their quality of life. Second, these treatments effectively reduce the financial burden on patients with serious illnesses. On average, each patient spends about 1,200 to 1,500 yuan per month on herbal medicine, totaling roughly 15,000 yuan annually. Taking Shanghai as an example, health insurance covers 92% to 93% of these costs, meaning the patient only needs to pay around 1,000 yuan out-of-pocket. In contrast, at large hospitals, the monthly treatment cost for each patient with a serious illness typically ranges from 20,000 to 30,000 yuan, adding up to about 300,000 yuan per year. Such high expenses place a heavy burden both on individual patients and on the national health insurance system,” said Lei Jufang.

　　Lei Jufang told reporters that certain ethnic medicines can play a remarkable role in specific therapeutic areas. For example, Uyghur medicines are particularly effective in treating vitiligo, while Tibetan medicines show promising results in the cardiovascular field. Of course, promoting traditional Chinese medicine and ethnic medicines cannot be limited to emotional appeals and publicity; rather, they require validation through various empirical data. She also proposed that the state establish major special research projects focused on key technologies for diseases in which ethnic medicines have therapeutic advantages, and set up standardized criteria and objective indicators for evaluating clinical efficacy.

　　The current state of big health is awkward, but it has a future.

　　In addition to pharmaceutical production, Qizheng Tibetan Medicine has been working in the greater health sector for many years. The current situation is somewhat awkward, but Lei Jufang is focused on the future.

　　“Nowadays, everyone is talking about innovation, and Qizheng Tibetan Medicine is also embracing it. On the one hand, we’re expanding the scope of our drug indications to provide integrated solutions for pain management; on the other hand, we’re developing an even wider variety of products. At the group level, we’re working on barley-based products, including a specialized product designed specifically for diabetics. As for our listed company, we’ve been producing goji berry products for many years, and we’ve basically overcome all technical challenges,” said Lei Jufang.

　　However, the current situation of products in the greater health sector is rather awkward—just as Lei Jufang puts it, “it’s really tough.” The quality of goji berry products varies widely; some substandard products even contain pesticide residues and heavy-metal contamination. Yet consumers can’t easily distinguish between good and bad products—and what’s more, goji berries treated with sulfur often look even more appealing. “Some distributors come to our base to take photos and use them as promotional materials for their customers. But when it comes time to actually stock up, they go to the market instead because the prices there are lower. We’re pretty much powerless to do anything about it,” she says. This calls for stronger oversight from the relevant authorities to ensure rigorous food inspections; otherwise, inferior products will drive out superior ones. “China doesn’t just need ‘The Voice of China’—it also needs ‘Good Ingredients of China,’” Lei Jufang says.

　　However, Lei Jufang remains very optimistic about the prospects of the relevant market. “I myself feel uncomfortable after spending too much time looking at my phone. Now everyone is glued to their phones all day long—this, I believe, is precisely the market we’re talking about. In the future, the market for pain relief products will continue to expand,” said Lei Jufang. Reporters from the Mass Securities Daily and CaiXin.com jokingly suggested to her that Qizheng Tibetan Medicine could consider partnering with Xiaomi to sell health-care products alongside Xiaomi’s smartphones. In response, Lei Jufang said that if the reporters could help her make the connection, she’d be more than willing to explore such a collaboration.

　　News Source: Dazhong Securities Journal

　　News link: http://www.1caixin.com.cn/article-292145.html