Study On Cost Management Of Pharmaceutical Enterprise Based On Value Chain Under The Centralized Procurement

With the aging of Chinese population,the pressure on the national financial medical expenditure has increased.The demand for drugs for chronic diseases and oncology is increasing,and the state is rapidly laying out high-priced drugs into the national medical insurance in order to reduce the pressure on people’s medical expenditure and increase their sense of well-being.In November 2018,the country introduced a centralized drug procurement policy,led by the government,under the premise of determining the quantity and procurement cycle of drugs in public healthcare institutions,unified public bidding and bargaining to centralize the purchase of drugs,exchanging quantity for price and winning bids at low prices.Up to now,a total of seven centralized drug procurement exercises have been carried out nationwide,resulting in an overall reduction of over 50% in drug prices and achieving remarkable results.The centralized drug procurement policy has changed the traditional sales model of the pharmaceutical industry,squeezed the unreasonable water in the drug sales chain,promoted the overall reduction of drug prices and prompted the formation of a new pattern in China’s pharmaceutical industry.The key to the stable development of pharmaceutical enterprises is how to ensure that enterprises still have sufficient profit margins after a significant reduction in drug prices.Enterprises need to start from multiple directions and angles,improve the cost management ability,reduce the cost of enterprises in an all-round way,and form cost competitive advantages.However,traditional cost management methods can hardly meet the needs of pharmaceutical enterprises for comprehensive cost management under the centralized drug procurement policy.For this reason,enterprises can optimise their cost management level based on value chain cost management methods.Taking North China Pharmaceutical Company Ltd.as an example,this thesis analyse the current status and shortcomings of cost management in North China Pharmaceutical Company Ltd.,and constructs a value chain cost management system for North China Pharmaceutical Company Ltd.based on the value chain perspective.Firstly,this thesis explains the centralized drug procurement policy,the concept of value chain cost management and the theoretical basis of this thesis based on a review of domestic and international literature.Secondly,by specifically introducing the background of the centralized drug procurement policy,the development of the centralized drug procurement policy and its impact on pharmaceutical enterprises,the necessity of the implementation of the centralized drug procurement policy is clarified.Then,the current situation of cost management of North China Pharmaceutical Company Ltd.under the background of centralized drug procurement is introduced and through comparative analysis with other pharmaceutical companies,the deficiencies of cost management of North China Pharmaceutical Company Ltd.are identified and the reasons for them are summarised.This leads to the necessity and feasibility of implementing value chain cost management in North China Pharmaceutical Company Ltd.under the background of centralized drug procurement policy,and finally to build a value chain cost management system for North China Pharmaceutical Company Ltd.under the background of centralized drug procurement through both internal and external value chains.This thesis studies both the problems of cost management of North China Pharmaceutical Company Ltd.in the context of centralized drug procurement and provides a reference for cost management of pharmaceutical enterprises in China under the centralized drug procurement policy,helping pharmaceutical enterprises in China to better cope with current policy changes and strong market competition,allocate resources efficiently,improve cost management,adjust business strategies and development directions of enterprises in a timely manner to achieve sustainable development and promote the transformation and upgrading of China’s pharmaceutical industry.