On July 16th, the heads of domestic major infusion companies, including Shandong Lukang Chenxin, Shijiazhuang Four Pharmaceuticals, Hunan Jinjian, Anhui Luanhuayuan and Shandong Qidu, rushed to Guangzhou to discuss the status quo in the industry and a new round. Price increase matters.
The price problem encountered by large infusions is affecting the entire industry. Many companies adjust their product structure and convert to more flexible packaging infusions
“Why did you suddenly go to Guangzhou to open this meeting because the situation is too urgent.†A person in charge of Anhui Luan Huayuan Pharmaceutical Co., Ltd. disclosed that Guangdong's online procurement is currently underway. If it still refers to last year's entry price, glass bottles and other ordinary infusion The product may have a price upside down.
“We call for the purchase of this year's online shopping should consider the actual situation of the increase in the cost of large infusion products in the first half of the year and give a certain margin of price increase. This matter must be collectively completed by all enterprises.†Sales Manager of Shandong Qidu Pharmaceutical Co., Ltd. Medical Economics reporter said.
Sustained cost increases
The infusion industry is facing a new round of rising costs.
In the past few months, the price of butyl rubber raw material has increased by 230% from 30,000 yuan/ton to more than 120,000 yuan/ton; polypropylene raw material has increased by 53% from 13,000 yuan/ton to 2 Million yuan / ton; non-PVC film rose 10%, glass bottles prices rose 20%. Take the 250ml glass bottle as an example, from the original 0.30 yuan / month to 0.36 yuan / month; packaging carton prices rose 24%, standard boxes from 2.90 yuan / month rose to 3.60 yuan / month. In addition, almost all the costs of oil, electricity, gas, etc. needed for production are rising wildly.
Especially after the rise in oil prices in June this year, transportation costs for large infusion products increased by 25% to 30%.
In fact, the price of large infusion products is still at a low point. A company representative introduced that despite the price increase last year, the price of ordinary infusions still ran through mineral water. Taking 100ml ordinary infusions as an example, the price of the factory's delivery to local dealers in Guangzhou was only 0.95 yuan. In this situation, many manufacturing enterprises are facing a serious development crisis, and some small businesses will also face a crisis of survival.
Tender formation price ceiling
"Generally speaking, after the upstream product cost rises, the downstream sales price should also go up, but the bidding rules are 'cannot be higher than last year's bid price', which is equivalent to the downstream price is sealed, both sides squeeze, the impact will inevitably affect The entire industry chain.†A representative of a pharmaceutical business company in Guangzhou analyzed.
It is reported that in 2008, a new round of drug procurement in Guangdong Province has begun in a calm, July 20 is about to enter the key bargaining varieties offer links, this is a real moment affecting the fate of production companies and distributors. For manufacturing companies, if they are willing to accept the last year's bid price, they will be automatically short-listed; if there is an intention to increase prices, they must enter the human-machine dialogue and face the negotiations with experts. There is no small risk.
The industry will not forget the price shopping during the bidding process in 2007. From the auction results of 3 or more manufacturers in the auction group at that time, the average price reduction rate for the short-listed varieties was 40.39%, of which the price reduction rate for the market-regulated price varieties was 20.00%. The decline was so great that even the staff of the tender office were surprised. However, the following facts have proved that such irrational price cuts do not bring any benefits to the patient - because many varieties of the price is too low, no companies are willing to supply, resulting in clinical shortage of some cheap drugs.
"The same species, if we accept the last year's entry price, and some companies have raised prices in the human-computer dialogue, this is unfair to us." A pharmaceutical company sales manager proposed that the bidding office should be based on this year's CPI. The gains, unified to increase the infusion product in the surrounding price.
The participating companies stated that taking the 100ml basic infusion as an example, the bid price for last year was 1.34 yuan, and this year is at least 1.45 yuan or more reasonable.
Corporate representatives agreed that if there is no price adjustment, no one will be willing to supply the bid. This situation has emerged last year. Last year 100ml basic infusion began the winning bid. This article comes from the Chinese bottle net. The price is 1.20 yuan. Afterwards, no one is willing to supply it due to rising costs. Afterwards, the Guangdong Drug Purchase Center will increase the price to 1.34 yuan. "It is better to adjust the price if it is out of stock with other products, and it is better to adjust in advance. Under the premise of rising costs year by year, the rule of hanging net procurement with reference to the bidding price last year is unreasonable by itself. It should consider the increase of CPI and appropriately adjust it year by year." An infusion in Hunan The company representative proposed.
Consequences of price inversion
If the bidding is still based on last year's bid price, there will be price inversion. In this case, there will be situations where large infusion product manufacturers are unwilling to produce and dealers are unwilling to sell. Some varieties will certainly be in short supply, even if the price is lower, consumers Also enjoy the benefits.
In fact, there were thousands of varieties that could not be supplied in Guangdong Province in 2007. The purchase prices of generic drugs such as amoxicillin and cephradine were higher than the bid price. Due to the soaring price of pork, the price of medicines based on animal viscera has also increased.
The price problem encountered by large infusions is affecting the entire industry. It is reported that a number of large infusion companies including Anhui Fengyuan have given up the Guangdong market last year, and more companies are adjusting their product mix, gradually giving up nonprofit generic infusion products and converting to more flexible packaging infusions with greater profit margins. The manager of the South China Region of Anhui Lu'an Huayuan Pharmaceutical Co., Ltd. disclosed to the reporter of the “Medicine Economic News†that they were reducing the glass bottle infusion production line.
Prior to the large infusion industry experts generally believe that from the experience of foreign markets, soft packaging gradually replace the glass bottle is a trend, glass bottle infusion transport difficulties, inconvenient use, production is not enough environmental protection and many other shortcomings, but did not expect to update so fast. On the one hand, as the country's increase in medical investment, the level of drug use by residents has gradually increased, and the soft packaging infusion has been transformed from the original high-end products to commonly used products; on the other hand, as the cost of plastic bottle infusion production decreases year by year, its retail price and glass The bottle gap is shrinking, and once the price falls to a certain range, it will speed up the market penetration. "An important reason is that the glass bottle infusion is very likely to first appear in the price upside down, accelerating the pace of being replaced by soft packaging infusion." An industry expert predicts.
At the same time, the price inversion will also make some companies try their best to reduce costs, such as shrinking the infusion bottle mouth in order to save butyl rubber plugs and adopting low-grade packaging materials, which is unfavorable to the entire industry.
A company official even stated that the Guangdong market is gradually shifting from the original high-end market to a low-end market filled with a large number of SMEs due to over-emphasis on price factors.
Related Links
â—† After a fierce price war in previous years, the big infusion industry ushered in a turning point in 2005. On July 1st of that year, with the replacement of butyl rubber plugs for basic infusions, the large infusion industry began to raise prices comprehensively, and then entered a relatively stable period.
â—† Since 2006, the calm infusion industry began to brewing a new round of changes. The change was caused by the rapid replacement of large infusion product packaging, and the speed of infusion of plastic bottles and non-PVC soft bags to replace glass bottles was significantly faster.
â—† In the first half of 2007, driven by the new rural cooperative medical service, local medical consumer markets, large-scale infusion fluids, and large-scale infusion companies to various degrees of production line expansion, the production and sales volume of infusions throughout the country increased significantly in all pharmaceutical industries. Subsectors ranked first.
â—† In the second half of 2007, in the face of infusions, which are “less expensive than mineral waterâ€, many companies are targeting high value-added products (such as nutritional and electrolyte infusion products).
◆ At the beginning of 2008, high-intensity CPI played a role in the pharmaceutical industry from the source, and eventually passed through to the entire industry chain. As the price of raw materials and energy in the upstream rose, the price of pharmaceutical packaging materials, including glass bottles for infusion, showed an upward trend. In the case of low profits and high costs, some infusion companies consider price adjustments. Other companies believe that a large-scale infusion company has a large-scale production of plastic bottle and soft bag production lines, and it is only a matter of time before the “price war†for plastic bottle infusions.
â—† In July 2008, promoted by the procurement of Guangdong's online portal, the head of major domestic infusion companies gathered in Guangzhou to discuss a new round of price increase.
Reprinted Source: China Packaging Bottle Net
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