A Study On The Profit Model Optimization Strategy Of Pharmaceutical Manufacturing Enterprise Under The Background Of The "Volume-Based Procurement" Policy

With the continued improvement of the medical level,the concept of Chinese medical and health services has gradually changed to "take the people’s health as the center",consumers’ health care consciousness has been strengthened constantly,and the development prospects of pharmaceutical industry are bright.However,the problem of "difficult and expensive medical treatment" has been troubling the majority of patients,and the price of drugs is directly related to the welfare of people.In order to solve the problem of drug price artificially high,a number of policies have been successively introduced to promote the reform of the medical system,aiming at reducing the circulation of drugs to solve the problem of drug price artificially high.The policy of "Volume-Based Procurement" is a sign of the development of centralized drug procurement into the mature period,aiming at promoting drug price to return to a reasonable level.The policy of "Volume-Based Procurement" reduces the price of drugs,which is bound to have an impact on pharmaceutical manufacturing enterprises,and the most direct one is to affect the profits of enterprises.Therefore,what is the profit model of pharmaceutical manufacturing enterprises under the policy of "Volume-Based Procurement" ? What risks exist in the profit model of pharmaceutical manufacturing enterprises under "Volume-Based Procurement" ? How should companies deal with these risks? The pharmaceutical manufacturing enterprises must face these problem.Therefore,based on the above situation,it is of great significance to explore the profit model of pharmaceutical manufacturing enterprises under the background of "volume-based procurement".This article takes a head supplier of "volume-based procurement" — Kelun Pharmaceutical,based background of "Volume-Based Procurement" and related theory of profit model,introducing Kelun Pharmaceutical’s company background,operating conditions,and the situation of participating in "Volume-Based Procurement",analyzing the changes of profit model and the opportunities and risks of Kelun Pharmaceutical under the background of "Volume-Based Procurement".Then this article will put forward suggestions for the optimization of profit model of Kelun Pharmaceutical,and finally finds that:(1)The profit model of Kelun Pharmaceutical has changed from low cost type to the type of the combination of brand effect and R&D driven.Among them,the profit source is more diversified,more consumers outside the hospital and online consumers are added,and the sales channels are expanded;Profit points is more abundant,increased the revenue from research and development projects,and added new profit growth points for Kelun Pharmaceutical;The profit leverage is more perfect,from the profit leverage mainly based on generic drug research and development to the profit leverage combined with generic drug research and development and innovative drug research and development;The profit barrier is stronger,extending from total cost leadership to brand effect,establishing a more solid moat.(2)The "Volume-Based Procurement" has brought positive effects to Kelun Pharmaceutical,such as keeping high drug sales,expanding market share and boosting stock price;(3)However,the "Volume-Based Procurement" has also brought challenges.Such as the company’s profit model has risks such as low price competition reducing revenue,high sales expenses corroding net profit,fierce generic drug competition strengthening substitution effect,low R&D concentration and high R&D failure.In view of the risks of the above profit model,on the basis of the analysis of its causes,this paper summarizes the profit model optimization strategy of Kelun Pharmaceutical in the face of the "Volume-Based Procurement" policy:(1)Enterprises should increase vertical mergers and acquisitions to reduce transaction costs;(2)Increasing terminal drug sales and training marketing talents;(3)Adjusting the structure of drugs and Transforming drugs from generic to innovation;(4)Assessing R&D risks and improving R&D concentration.The main contributions of this paper are as follows:(1)From the perspective of "purchasing with volume" policy impact analysis,enriched the pharmaceutical manufacturing enterprises profit model optimization related research;(2)Analyzing the influence of "Volume-Based Procurement" policy on pharmaceutical manufacturing enterprises from the perspectives of the changes of profit model and its constituent elements,the positive influence brought by the change of profit pattern,the risks and countermeasures of the change of profit model,enriching the research perspective of "Volume-Based Procurement" policy;(3)Through specific case study,the profit model optimization strategy of pharmaceutical manufacturing enterprises under the background of "Volume-Based Procurement" is explored in detail,which provides certain reference for the development of Chinese pharmaceutical manufacturing enterprises in the background of "Volume-Based Procurement" policy.