What did the representatives from the pharmaceutical industry at the Two Sessions say at the symposium?

　　This afternoon, the 2016 “Voice and Responsibility” symposium for National People’s Congress deputies and Chinese People’s Political Consultative Conference members from the pharmaceutical industry was held in Beijing. At the meeting, the delegates either offered suggestions and advice or commented on the current medical situation, all sharing their insights into the industry’s present and future development.

　　After listening to the speeches delivered by deputies and members of the CPPCC, I felt deeply that it was necessary to share them with everyone. Therefore, I’ve carefully compiled the following highlights from their remarks at the Two Sessions.

　　Lei Jufang (Chairman of Tibet Qizheng Pharmaceutical Group): Today, I’d like to offer three suggestions. First, regarding the clinical registration of traditional Chinese medicines in the new drug review process, I hope that these issues can be effectively implemented in the new era. Currently, our existing restrictions are actually a waste of medical resources. I sincerely hope that clear measures can be introduced to channel these resources into reducing the financial burden on patients and the government during healthcare reform, while also helping to improve the quality of life for patients by making better use of the valuable resources represented by time-tested classic prescriptions.

　　Second, in the secondary development of traditional Chinese medicine, our current regulations require that all indications be verified before any secondary development can proceed—regardless of how many conditions are involved. In reality, much of this secondary development is redundant, which significantly hinders market prosperity. We hope that these regulations can be improved.

　　Third, regarding the use of classic prescriptions, the current National Pharmacopoeia sets limits on new drugs that essentially shift the risk onto physicians. Yet, when viewed through the lens of classic prescriptions, most of these medications prove to be highly effective. I hope we can convene a group of experts to conduct a thorough review and discuss more viable solutions.

　　He Junming (Chairman of the Board of Directors, Sichuan Kechuang Group): I’d like to offer two comments and one suggestion. My first comment is that I hope the State Council Office and the relevant commissions, ministries, offices, and bureaus of the state will encourage our group system to organize more meetings like this one, so we can hear more voices from representatives in the pharmaceutical industry.

　　The second point is that the relevant government departments should promptly study the industrial scope of the greater health industry—specifically, which sectors fall under the umbrella of greater health. We hope that they will expedite their research into industry standards, enterprise standards, product standards, and technical standards within this sector.

　　Here’s a suggestion: We should introduce more quantifiable testing and management measures for both Chinese medicinal materials and proprietary Chinese medicines. Without addressing this issue, many quality problems simply cannot be resolved. Could everyone join forces to study this matter and promptly roll out relevant policies, enabling the entire pharmaceutical industry—and the broader health-care sector—to develop in a standardized and regulated manner and quickly enter the market?

　　Guan Yanbin (Chairman and President of Heilongjiang Sunflower Pharmaceutical Group): Regarding prices, over the past year, the country’s performance in pharmaceutical pricing has been mixed. On the one hand, we’re pleased that after years of calls for reform, drug prices have finally been liberalized—from being previously set by the government and regulated by the NDRC to now being determined by the market. On the other hand, though prices have been freed at the front door, the back door remains tightly shut—resulting in a second round of price negotiations that essentially undermines the spirit of market-based pricing. On the one hand, we’ve liberalized prices; on the other, “drug prices remain artificially high.”

　　If a company lacks profits, it simply won't have the capacity to produce and supply goods. Similarly, if pharmaceutical products don't generate reasonable profits, there's no way to improve drug quality—and this will inevitably hinder and impede innovation, R&D, and the overall development of the pharmaceutical industry, making it impossible to catch up with and surpass the world’s advanced standards. Prices are shaping the future of this industry; therefore, we must stop focusing solely on pharmaceutical manufacturers and drug prices.

　　Zhao Dongke (Vice Chairman of Shaanxi Dongke Pharmaceutical Co., Ltd.): Traditional Chinese medicine has been in decline these past years—declining quite dramatically. What’s the reason? It’s because we’ve been managing TCM and its medicinal herbs using the mindset of Western medicine, which has led to this decline. Right now, Chinese medicine faces numerous challenges. Many folk practitioners of TCM have been forced to close down. In 2004 and 2005, two rounds of crackdowns on illegal medical practices targeted those who engaged in fraudulent and deceptive practices, but unfortunately, these actions also dealt a severe blow to many legitimate folk TCM practitioners. That’s why my proposal this time is to establish an independent regulatory system specifically for Chinese medicinal herbs, one that can fully leverage the unique strengths of TCM and ensure its healthy development.

　　Liu Qun (Chairman of Chongqing Tiansheng Pharmaceutical Group Co., Ltd.): First, I suggest that all Grade-III hospitals at the provincial level and above completely close their outpatient clinics. Second, we should promote differentiated medical services by allowing doctors to practice at multiple sites—whether or not they choose to do so should be up to the doctors themselves, without hospitals making the decision for them. Third, we must significantly improve the compensation and benefits for physicians providing medical services. Fourth, we need to build a robust medical service network to ensure effective patient care. Fifth, regarding essential medicines, the national government should formulate a list of essential medicines and establish an open and standardized system for their procurement and distribution.

　　A differentiated pricing system will be implemented for pharmaceutical bidding.

　　Here are three recommendations for the medical insurance system: 1. Medical insurance should be separated from the State Ministry of Labor and Social Security and established as an independent Medical Insurance Supervision Committee. At the same time, medical insurance services should be liberalized to foster a competitive medical insurance system. 2. Medical insurance must be strictly managed—medical insurance cards must not be sold, and any violations must be rigorously investigated and punished. 3. Medical insurance cards may not be used to purchase non-medicinal products; instead, individuals should be encouraged to channel their funds into savings rather than spending them indiscriminately. 5. Implement tiered service fees.

　　Xie Zilong (Chairman of Hunan Laobaixing Pharmacy Chain Co., Ltd.): I’d like to offer two suggestions. First, I suggest that the Medical Insurance Department of the Ministry of Human Resources and Social Security should issue relevant regulations to relax the scope of business allowed for maternal and infant products. Why do I say this? Maternal and infant products—especially infant formula—are now elevated to the level of national strategy; at least, this has already been approved by the State Council’s Executive Meeting. I believe that across the country, medical insurance systems all face this same issue: restrictions—restrictions that are simplistic and overly rigid. As long as a business entity wants to sell or operate something, it shouldn’t be subject to approval by the competent authorities, except in cases requiring special permits. Of course, if a business violates the agreed-upon terms, it should rightly face penalties.

　　My second suggestion is that we should introduce relevant policies, and all functional departments should pay more attention to the input from management as well as from all sectors of society. I hope that both the supervising and the supervised parties will attach sufficient importance to this and strengthen communication and collaboration. Let’s establish a platform for mutual trust and open dialogue between the two sides. This will help foster a more harmonious relationship between us, rather than resorting to litigation at the slightest disagreement.

　　Lu Chunyun (Secretary of the Party Working Committee of the Taizhou Pharmaceutical High-tech Zone, Jiangsu Province): I’d like to offer two suggestions. The first is regarding the automatic inclusion of innovative drugs into the national medical insurance catalog. Innovation in the pharmaceutical sector involves long development cycles and substantial R&D costs. This is not just a matter for enterprises alone; the state should provide innovative companies with a more flexible and supportive policy environment. Specifically, innovative drugs should be prioritized for inclusion in the national medical insurance catalog. For newly approved innovative drugs that have already received price approval, the state should explicitly encourage their early clinical use. Through a competitive negotiation mechanism, these drugs could be evaluated and included in the reimbursement catalog within one year of launch. Once listed through this fast-track process, they would no longer need to go through centralized drug procurement or secondary hospital negotiations. Therefore, any drug included in the catalog could immediately be made available in hospitals for clinical trials.

　　Second, the current four- to five-year update cycle for the national medical insurance drug list can no longer keep pace with rapid product innovation. After a drug is innovated, it may take four or five years before it is included in the medical insurance catalog, which undermines companies’ enthusiasm for innovation. Therefore, I propose shortening the drug bidding cycle and establishing a green channel for the timely addition and filing of newly launched innovative drugs during the procurement period. The update cycle could be shortened to adjustments every two years, with annual additions, and these changes should be strictly enforced. Second, we need to further refine the scientific evaluation mechanism for selecting drugs to be included in the medical insurance catalog. The state should clearly define the evaluation criteria and conditions for including innovative drugs in the medical insurance catalog. Moreover, special achievements from the nation’s major new drug development programs should be incorporated into the medical insurance catalog.

　　Another suggestion concerns supporting and encouraging the development of orphan drugs. Currently, Europe and the U.S. have very clear definitions and standards for orphan drugs, whereas our country does not. Therefore, I propose introducing and gradually refining relevant regulations to establish a relatively clear and precise official definition of orphan drugs through legislation. Specific departments should be designated to audit and approve applications for orphan drug status, making this approval a prerequisite for enjoying incentive policies aimed at orphan drugs. At the same time, we should introduce corresponding policies covering the research and development as well as the market launch of orphan drugs. A highly efficient “green channel” should be provided for the approval process of orphan drugs. Additionally, the scope of orphan drugs covered by medical insurance and the National Essential Medicines List should be expanded.

　　Reporting Media: Economic Observer - Greater Health Lab

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