According to Caixin News on March 3 (Reporter Zhang Liangde), the high-quality development of the Traditional Chinese Medicine industry has always been a hot topic during the two sessions. This year, at the two sessions, Lu Qingguo, a representative of the National People's Congress and Chairman of Chenguang Biotech Group (300138.SZ), brought various proposals focusing on optimizing the Traditional Chinese Medicine centralized procurement mechanism, improving the quality standards of Chinese Patent Medicine, and standardizing the Traditional Chinese Medicine granules industry, aiming to inject new ideas into the modernization and industrialization of Traditional Chinese Medicine.

Reconstruct the Traditional Chinese Medicine centralized procurement rules to solve the "difficulties of low-price bids not being realized".

Since the national implementation of centralized procurement for pharmaceuticals in 2018, this mechanism has played an important role in alleviating the financial burden on patients and reducing pressure on medical insurance funds. However, challenges and issues still exist in the centralized procurement model for Chinese Patent Medicine: for example, there is a lack of clear corresponding rules between the bid price and purchase quantity, and medical institutions often choose higher-priced drugs during the procurement process. Additionally, low-price bid drugs face difficulties in achieving the expected procurement volumes due to the purchasing power held by medical institutions, leading to an ineffective procurement volume assurance mechanism. The existing procurement strategy has not fully leveraged the advantages of centralized procurement, resulting in certain drugs still being priced too high, which affects both patient treatment costs and the effective reduction of medical insurance costs.

Lu Qingguo calls for the formulation of Traditional Chinese Medicine centralized procurement policies that clearly define the relationship between bid prices and purchase quantities, ensuring that low-price bid drugs can attain sufficient procurement volumes, realize scale effects, and promote cost-effectiveness. At the same time, a dynamic adjustment mechanism should be established to adjust purchase quantities and prices in a timely manner according to changes in the medicinal materials market, maintaining the flexibility and effectiveness of the policy. Additionally, to further reduce treatment costs and medical insurance expenses, it is required that medical institutions and designated pharmacies prioritize purchasing centralized procurement bid drugs with the lowest average cost within the same group, increasing the actual usage rate of centralized procurement medicines.

Strictly control the quality of Chinese Patent Medicine to combat the phenomenon of "bad money driving out good money."

Lu Qingguo stated that low standards for Chinese Patent Medicine make it difficult to ensure stable efficacy, leading to patients potentially not achieving the expected therapeutic effects, which not only wastes medical resources but also severely damages consumer trust in Chinese Patent Medicine. Moreover, low standards have become a breeding ground for unscrupulous enterprises pursuing short-term profits, undermining a fair competitive market environment and resulting in the phenomenon of bad money driving out good money.

On one hand, there are broad and low standards for medicinal materials and Chinese Patent Medicine in the pharmacopoeia, failing to highlight the differences in quality among medicinal materials and Traditional Chinese Medicine, which does not achieve the goal of restricting low-quality Traditional Chinese Medicine from entering the market or encouraging the expansion of high-quality Traditional Chinese Medicine. On the other hand, the broad quality standards of Chinese Patent Medicine also lead to waste and misallocation of medicinal material resources, where high-quality materials often do not obtain their due value domestically but instead flow more towards foreign markets, which is a significant waste of China's medicinal material resources and undermines the competitiveness of domestic Traditional Chinese Medicine enterprises in the international market.

Addressing the issues of unstable efficacy caused by broad quality standards of Chinese Patent Medicine, Lu Qingguo pointed out using Radix Isatidis granules as an example: although the pharmacopoeia stipulates that the lower limit of nucleoside components should be 1.40 mg/bag, 75% of compliant products actually contain more than 5.0 mg, while over 80% of market products contain only 2-4.5 mg, with less than 20% containing ≥ 5.0 mg/bag.

To this end, Lu Qingguo suggests: conducting a comprehensive evaluation of the quality of Chinese Patent Medicine and reasonably enhancing the corresponding quality standards based on this. By implementing stricter and more rigorous standards, eliminate the adverse phenomenon of 'bad money driving out good' in the Traditional Chinese Medicine market, enhance the credibility and market recognition of Traditional Chinese Medicine, ensure the safety and effectiveness of public medication, and promote the entire Traditional Chinese Medicine industry towards higher standards and quality.

Promoting professional production of Traditional Chinese Medicine formula granules to unleash market potential worth hundreds of billions.

The Traditional Chinese Medicine formula granules industry has seen rapid development in the past two years, with continuous expansion of market size, but there are also some specific issues that restrict the healthy development of the industry.

Lu Qingguo believes that the current 'large and complete' production model of enterprises leads to multiple problems: chaotic sources of medicinal materials that make it difficult to effectively control quality and establish self-owned medicinal material production bases; high research and development costs with repeated research and development among enterprises; inefficient equipment unable to fully utilize modern extraction and processing that is specialized, large-scale, continuous, and automated; high inventory pressure and operating costs; waste of medicinal residue resources, unable to maximize resource utilization. Advocating for specialized production, each formula granules production enterprise should concentrate on researching and producing a few varieties they are best at, which can effectively solve the aforementioned issues.

To this end, Lu Qingguo suggests breaking down circulation barriers: allowing formula granules that meet national standards to circulate between enterprises so that each producing enterprise can procure standardized similar products for blending. Promoting specialized division of labor in the industry, establishing special support for formula granules production enterprises, while achieving scale production, strengthening research, development, and utilization of effective components from medicinal residue to maximize resource use and minimize waste.

In addition to recommendations related to the Traditional Chinese Medicine industry, Lu Qingguo also prepared several suggestions including 'Suggestions on Improving the Level of Social Pension Insurance in Rural Areas', 'Suggestions on Strengthening Support for Enterprises Sanctioned by the USA Government', and 'Suggestions on Reducing Rural Medical Insurance Payment Standards to Lessen the Burden on Farmers'.