Hua Xia Shi Bao·2025-09-25 07:59Core Insights - The Tianjin Municipal Medical Procurement Center has initiated a price risk management program targeting 104 traditional Chinese medicine products, highlighting the increasing pressure on pricing in the industry [2][6] - A strict pricing control system has been established, categorizing products into yellow and red labels based on their price relative to the lowest price of similar products, which could lead to suspension from the market if prices remain excessively high [2][6] - The traditional Chinese medicine market is undergoing significant changes as nearly 20 provinces have joined the price governance movement, indicating a nationwide trend towards price adjustments [2][6] Pricing Control Measures - The new pricing control measures classify products with prices exceeding three times the lowest price as yellow label, and those exceeding five times as red label, with a direct suspension for prices above ten times [2][6] - The focus of this governance is on the commonly used Da Huo Luo Wan, which has seen drastic price variations, with some brands priced as high as 200 yuan per box compared to around 40 yuan for others [2][3] Market Dynamics - Major traditional brands like Tong Ren Tang and Da Ren Tang have been able to maintain higher prices due to their use of premium raw materials, but they are now facing increased scrutiny and pressure to lower prices [3][4] - The market share of these brands is concentrated in regions outside Tianjin, with significant sales in provinces like Jiangsu and Hebei, indicating a potential vulnerability to price governance measures [4][6] Financial Performance - The financial performance of traditional Chinese medicine companies has been under pressure, with 36 companies reporting declines in profits in the first half of 2025, and notable drops in net profits for companies like Huasheng Technology and Weikang Pharmaceutical [7][8] - Tong Ren Tang reported a slight increase in revenue but a decrease in net profit, while Da Ren Tang's profit growth was largely due to one-time gains from asset sales [7][8] Industry Challenges - The complexity of traditional Chinese medicine, with its varied ingredients and production processes, complicates pricing governance, as it cannot be easily evaluated like chemical drugs [5][6] - There are concerns that strict price controls may lead to a decline in quality, as companies may be forced to cut costs to comply with pricing regulations [5][6] Future Directions - Experts suggest that establishing a pricing evaluation system that considers raw material costs, production complexity, and clinical value is essential for balancing price governance and maintaining quality [9][10] - The case of Da Huo Luo Wan illustrates the need for a value-based pricing system rather than simple price cuts, aiming to benefit patients while ensuring the sustainability of quality products [10]