"Practicing PBM drug welfare management in China can not only see the pain points of national conditions, such as policies, payments, interest patterns, etc., then nothing will happen. You should see the opportunities behind the differences in the medical security system, from the overall pattern and industrial regulation. Start with strategies and look for opportunities for differentiation."
The PBM drug welfare management model has come to China from the United States and has been in China for 10 years. In the past 10 years, there have been silences and ZTE. Many people pin their hopes on the stone of other mountains, hoping to solve the problem of medical insurance control fees and drug supply security. Others believe that China does not have the soil for PBM survival.
As the "originator" who introduced the PBM model to China, the first member of the State Council Medical Reform Expert Advisory Committee, the Distinguished Professor of the School of Management of Xi'an Jiaotong University, the Chairman of Beijing Wanhu Liangfang, Professor Fang Zhiwu on the PBM model and China Practice has deep insights.
Recently, the Arterial Network interviewed Professor Fang Zhiwu, and interpreted the PBM model from the top-level design of the “medical reformâ€, the grading diagnosis and treatment policy, and the supply guarantee of primary drug.
Professor Fang Zhiwu
Introducing the PBM model to China
Professor Fang Zhiwu graduated from the University of Washington Business School (MBA) and the School of Medicine of Xi'an Jiaotong University. In 2008, he served as Vice President of the American ExpressScripts (ESI, Fast Pharmaceuticals) Group, where he was responsible for international business development and was responsible for Europe, Asia and South America. And other areas to promote PBM drug welfare management model.
Professor Fang Zhiwu introduced that the PBM drug welfare management model is a unique model of medical insurance control and drug supply security in the United States. It was born in the 1960s and 1970s. The birth background is the medical insurance control fee brought about by rising medical expenses. Demand, as well as computer and Internet technology development, provide technical solutions for control fees and drug supply.
"I divided the US PBM drug welfare management into two phases. The first phase is the control fee phase, that is, through computer technology and Internet technology, the prescription and underwriting claims information are reviewed to achieve the purpose of control fees; The stage is to centralize the supply of medicines, the integration of the two - information and industrial automation, through the analysis of the drug data of patients with chronic diseases, establish a central pharmacy, provide medicines for patients." Professor Fang Zhiwu said.
The mature PBM drug welfare management model has several key points: complete and continuous patient medication data, with the patient's medication demand as the core, and guide the pharmaceutical supply chain construction, such as automated warehouse logistics system, transmission, packaging system and so on. Providing medicines to patients through central pharmacies can not only predict patient medication based on data models, but also improve drug circulation efficiency and save circulation costs.
Today, the PBM players in the US market are roughly divided into several categories: one is the PBM embedded in the insurance company, such as the PBM company Optum of the health insurance company United Health; the second is the PBM company opened by the chain pharmacy. Such as CVS's Caremark; another is a stand-alone PBM, such as Medimpact (Medical). At the same time, almost all PBM companies are involved in the pharmaceutical supply business.
Taking ESI as an example, it was established in 1986. The company serves government, enterprises, insurance companies, doctors and patients, and is involved in a comprehensive medical service system. Its main business includes pharmaceutical welfare management, high-tech information technology services, and drug distribution management. , medical service management and disease management.
ESI is already the third largest pharmaceutical retail organization in the United States except CVS and Walgreens. It provides medicines, including new special medicines and test drugs, to registered members through mail order and online pharmacy.
Fast Pharmaceutical Company has a large user base and has the right to prescribing prescriptions. Therefore, the company has strong upstream bargaining power in the entire pharmaceutical industry chain, which can continuously compress the circulation and supply chain links to provide lower price drug prices. In the case of strong bargaining power, the quick-purchase prescription mail-order drugs are about 20% cheaper than the offline, satisfying the low-cost needs of patients, and at the same time achieving effective control of drug costs.
The revenue of ESI Express Pharmaceuticals in 2017 was US$10.065 billion, of which home delivery and specialty claims revenue was US$44.33 billion, which shows the importance of drug supply in the PBM model.
Professor Fang Zhiwu told the Arterial Network that ESI Fast Drugs has won numerous awards in the past. During his tenure, he was named one of the top 10 most successful companies in the first decade of this century by Smart Money magazine of the Wall Street Journal in 2010. Apple and Goldman Sachs are equivalent, and are known as the typical service industry. In addition, ESI Express Pharmaceuticals has the highest per capita “output value†among employees in the revenue-receiving 100 billion dollar club. At the end of 2017, the number of employees was 26,600, and the per capita “output value†was as high as 3.76 million USD.
During the tenure of Professor Fang Zhiwu, ESI Express Pharmaceuticals began to develop globally. In 2009, Professor Fang Zhiwu led the PBM model in China. ESI Express Pharmaceuticals signed a strategic cooperation agreement with Haihong Holdings (now New Health). Since then, China has had a story of PBM.
“The full name of PBM is Pharmacy Benefit Management, Benefit originally intended to benefit from..., we have been demonstrating for a long time, and finally chose the word welfare, PBM drug welfare management model began to be introduced into the country.†Professor Fang Zhiwu said.
China has PBM soil
"Practicing PBM drug welfare management in China can not only see the pain points of national conditions, such as policies, payments, interest patterns, etc., then nothing will happen. You should see the opportunities behind the differences in the medical security system, from the overall pattern and industrial regulation. Start with strategies and look for opportunities for differentiation.†Professor Fang Zhiwu said that many people in the industry are not optimistic about the practice of PBM mode in China, and always feel that there are such problems. In fact, the model should be localized rather than copied.
Since the introduction of the PBM drug welfare management concept into China, dozens of companies have begun to test water in this direction, but many companies are still in the first stage of the prescription information review stage, and have not really touched the core of the PBM model - centralized The drug supply model can only be done by localizing the PBM drug welfare management only if a centralized drug supply system is established.
How to establish a system that has both prescription review capabilities and drug supply capabilities? This is another problem, including retail pharmacies, distribution companies, e-commerce platforms, commercial insurance companies, medical information companies, etc., but subject to a variety of problems, the complete business closed loop has not been established .
The key points are: there are enough medical services and drug supply capabilities, patients are willing to come to the clinic and can provide medicines; have the ability to control the rationality of prescriptions and give advice; can gather the scattered medication needs And negotiate the price upstream; mature supply chain system to ensure that drugs are delivered on time and in volume; payment end support, sufficient credibility, so that both commercial insurance and medical insurance are willing to pay.
The key point of the break is policy, especially the direction of “medical reformâ€. As the first member of the State Council Medical Reform Expert Advisory Committee, Professor Fang Zhiwu believes that the practice of PBM in China should be in line with the direction of medical reform. "The mature commercial insurance system in the United States is a strong support for the development of PBM. It has the application of new technologies, new models to provide better services for members, and the realization of cost control. China Merchants Insurance has just started, accounting for a small proportion in the payment terminal. It is difficult to have great development by relying on commercial insurance," he said.
The direction of medical reform top-level design is grading diagnosis and treatment, strong grassroots level, to achieve "primary diagnosis, two-way referral, rapid division and treatment, up and down linkage", is to solve the problem of medical "inverted triangle", so that patients, especially common diseases, chronic diseases Divert to the grassroots to alleviate the current situation of overcrowding in large hospitals.
There are two key factors that determine the flow of patients to the grassroots: seeing a doctor, taking medicine, and “seeing a doctor†to strengthen the ability of grassroots doctors, empowering grassroots doctors, and allowing grassroots doctors to apply standardized solutions for patients; “taking drugs†is medicines. Supply security, there have been policies such as the list of basic medicines, but the grassroots often do not prepare medicines and medicines, and the establishment of central pharmacies can solve this problem.
In 2012, Professor Fang Zhiwu resigned from ESI Express Pharmaceuticals and founded Wanfang Liangfang. He combined the PBM drug welfare management model with the “medical reform†graded diagnosis and treatment to create a Chinese PBM model. With the core of “reducing medicine price, guaranteeing medical insurance, and benefiting people's livelihoodâ€, Wanhu Liangfang provides a solution that fits the direction of medical reform, and puts the service scene in the community health service center to provide quality services for contracted members.
Practice of Wanfang Liangfang
Specifically, Wanjia Liangfang's products and services include several aspects: family doctor empowerment system, cooperation with Professor Gu Yuan, a family-level doctor in the family doctor field, establishing a family doctor training system, empowering community health service center medical staff, and establishing The general elite training program; the second is the information system, the establishment of PBM database, information technology solutions; the third is the centralized drug procurement system, and pharmaceutical industrial enterprises and other negotiations, to do "group procurement" to reduce drug prices.
Professor Fang Zhiwu told the Arterial Network that the model of China's PBM is based on patients, and most of the services are elderly patients who are in the community health service center. These patients are the mainstream of medical services, but there have been few previous Innovative projects are for them.
In addition, the Wanfang Liangfang PBM model turns “disorder†into “orderedâ€. - Previously, patients, especially elderly patients, were like "headless flies" after illness. No one told him where to go to see a doctor, how to see a doctor, and the process of purchasing medicine was disorderly. Under the grading diagnosis and treatment + PBM mode, patients with chronic diseases are fixed to the community health service center for treatment, and the drugs are provided to the patients through the central pharmacy "fixed, timed, quantitative".
From "disorder" to "ordered", it is not only convenient, but also saves money. Take the supply of medicines as an example. If you buy medicines at a pharmacy, the density of Chinese pharmacies is very high, coupled with high rents, labor costs, management costs, etc., the price of medicines remains high. The central pharmacy is a city with a wide range of radiation coverage, which can save a lot of costs through refined management. These costs can be “returned to the peopleâ€. The price of medicines in the PBM mode can be saved by 10%-20%. The method is returned to the patient.
Professor Fang Zhiwu told the arterial network that the 10,000-person PBM model has been rolled out in cities such as Wuhu, Anhui, Taiyuan, Shanxi, and Nanjing, Jiangsu. The practice of Wuhu was the earliest. From a community health service center to a district or city, it has signed up to manage more than 100,000 chronically ill patients, and deliver drugs at a fixed, regular, and quantitative basis.
The 10,000-person PBM model has also been approved by local health care commissions, medical insurance bureaus and other regulatory authorities. Not only that, in November 2018, the National Development and Reform Commission Economic System and Management Institute and the China Pharmaceutical Business Association jointly held the "PBM Business Model for the Value and Market Environment of China's Medical Reform" topic, at the end of the topic, Wanfang Liangfang is a case to interpret the PBM model.
In the report of the project, the research team leader Chen Wei pointed out that after more than ten years of exploration and the three-year pilot project in Wuhu and the improvement of cities such as Taiyuan and Nanjing, PBM has already made hundreds of thousands of grassroots elderly patients with chronic diseases enjoy true. The cutting-edge benefits, the people's reform has gained a significant impression, PBM China has gradually matured and has the basis for promotion to the whole country. It is recommended to draft industry standards, demonstrate supporting policies, and combine local conditions, based on summarizing the previous C-PBM practical experience. Gradually promoted throughout the country.
"The National Development and Reform Commission can be said to be the 'holy land' of the Chinese economy. Many major policies for reform and opening up are discussed and discussed at the beginning. It can be elected as a case, which is of great significance to thousands of households," said Professor Fang Zhiwu.
In terms of enterprise development, Wanfang Liangfang won the A round of financing from Keytone Capital and Kaixuan Venture Capital in 2014, and completed the $20 million Series B financing led by Stewart Capital (formerly Fidelity Asia) in 2017. The financing plan is progressing in an orderly manner. In the future, we will continue to strengthen our technology and service capabilities to replicate the 10,000-yuan Chinese PBM model to more cities.
PBM is also the focus of trading in the medical industry in recent years. Professor Fang Zhiwu told the Arterial Network that there are three monthly headlines in the medical industry related to the PBM business in 2018, including: CVS announced the acquisition of Aetna Insurance Aetna for $70 billion, Amazon announced the possible placement of PBM business, Cigna (CIGNA) $52 billion acquisition of fast prescription ESI.
The medical and health industry is entering the “super-transaction†time, and cross-industry mergers and acquisitions have become a trend. From front-end medical services, medical payment, back-end medical insurance, medical supply chain, and industrial chain integration, the industry has brought more synergies. As far as the Chinese market is concerned, the localization innovation of the PBM model is an inevitable road. Wanjia Liangfang has practiced the best practices of the Chinese PBM model, and there are more possibilities in the future.
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