Rising Chinese herbal medicine prices increase cost pressure for proprietary Chinese medicine companies

Due to the influence of climate, the market for Chinese herbal medicines this year is quite different from that of previous years. Especially since July and August, with the arrival of a large number of new products, the price of Chinese herbal medicines would have been reduced. However, from Guangdong, Shandong According to the real-time monitoring of the price of Chinese herbal medicines in other places, the situation of "abnormal" prices of Chinese herbal medicines throughout the country this year is endless. Guo Fanli, a researcher in the pharmaceutical industry at China Investment Advisors, pointed out that the rising price of Chinese herbal medicines will bring cost pressures to Chinese medicine companies.

According to the China Investment Consulting Industry Research Center, since July-August this year, the price of Taizishen in Guangzhou Qingping Chinese herbal medicine wholesale market has soared to 180 yuan/kg, and that of Panax has reached 320 yuan/kg; in Qingdao market, heterophylla Prices in the Shanghai market have also almost doubled; in the Shanghai market, the prices of Codonopsis pilosula and other traditional Chinese medicines have also risen; in Hebei, Henan, and Hunan, some Chinese herbal medicines, including Coptis, Astragalus, Forsythia, and honeysuckle, have seen substantial increases in prices. rise.

Guo Fanli, a researcher in the pharmaceutical industry at China Investment Advisors, pointed out that the first thing that drove the price increase this year was the drought in the five southwestern provinces. The dry weather caused a decline in crop yields or the loss of many Chinese herbal medicines; followed by increased demand, Chinese medicine had a very good effect in treating some chronic diseases. The supply of Chinese herbal medicines is in short supply, which leads to price increases. Finally, hot money speculation, and in the context of the state's introduction of a new real estate property, hot money began to withdraw from the property market, and part of the 300 billion yuan that flowed out of the property market flowed into the Chinese herbal medicine market. It also boosted the price of Chinese herbal medicines.

Guo Fanli pointed out that the rise in the prices of Chinese herbal medicines will inevitably drive up the cost of drug manufacturers. The downside to the company's business is that the cost increase will bring down the gross profit rate, which will lead to lower profitability of pharmaceutical companies. Of course, this may lead to the price of medicines - that is, the rise in prices of proprietary Chinese medicines. However, this also has to be divided into enterprises. In general, large-scale production companies have self-built medicine production bases, and also have 2-3 years of inventory, so the cost pressure is not great; and for the inventory only 3- For 6 months of general business, the increase in the price of Chinese herbal medicines is not a small blow to it.

Guo Fanli also pointed out that although the increase in the price of Chinese herbal medicines brings cost pressures to the pharmaceutical manufacturers, it is unlikely that the prices of proprietary Chinese medicines will rise in the short term. The current relationship between doctors and patients can be said to be rather tense. All new medical reforms that solve the problem of "seeing a doctor hard and expensive to see a doctor" have had little success so far, and the phenomenon of high drug prices has been burgeoning. At the same time, the “Pharmaceutical Service Fees” began to be introduced in six cities in Guangdong, which undoubtedly increased the burden on the people. It is obviously not wise to increase drug prices in this situation.

Zhang Yanlin, research director of China Investment Consulting Co., Ltd. pointed out that it is even more impossible for drug products in medical insurance to raise prices. On the one hand, companies that have access to medical insurance have at least one year of inventory. Short-term increases in raw material prices have little effect on them; on the other hand, rising prices of Chinese herbal medicines not only put pressure on consumers and drug manufacturers, but also give governments Bring a lot of pressure. In today's sensitive period in which national policies strictly control drug prices, companies wanting to make up for the losses caused by rising raw materials can only start from their own, reduce costs, and increase efficiency.

The "2010-2015 China Pharmaceutical Industry Investment Analysis and Prospects Forecast Report" issued by China Investment Advisors pointed out that due to the improvement of people's living standards and the enhancement of self-care awareness, more and more people are now using dual-use medicine and nourishing health care. The demand for medicinal herbs continues to increase, which has pushed up the price of Chinese herbal medicines. In addition, the demand for Chinese herbal medicines at home and abroad has increased and the supply and demand have become more and more contradictory. Therefore, in the long run, the price trend of Chinese herbal medicines should steadily increase.

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