It is understood that Anhui Province and Fujian Province have already implemented the notice of including some Chinese medicine granules into the local medical insurance this year under the guidance. In addition, another province and city will do so since this November.

Recently, the Health Insurance Bureau of Hebei Province issued a notice on the procurement and payment of Chinese medicine granules website that since November 1, Chinese medicine granules that meet national or provincial quality standards have been adopted net purchase.
 
The notice proposes that the Chinese medicine granules that meet the national or provincial quality standards, and that are procured by the designated medical institutions on the provincial centralized drug procurement platform, and correspond to the varieties of Chinese medicine herbal pieces, and that have been included in the scope of payment of the medical insurance fund, will be included in the scope of payment of the medical insurance and managed in accordance with category B. The personal payment ratio is uniformly determined at 5%; the designated medical institutions to the lowest listed price to purchase, can be added by 15% sales. The Chinese medicine granules included in the scope of payment of medical insurance is managed under the same name, and the manufacturer shall not be distinguished.

In addition, it is clear that before October 31, medical institutions can purchase Chinese medicine granules that meet national or provincial quality standards according to the current model, which are not included in medical insurance.

Chinese medicine granules are included into medical insurance, while the process of standardization of the industry is being accelerated. From 2021 November 1, the pilot of Chinese medicine granules officially ended. According to the provisions, Chinese medicine granules should be produced in accordance with the recorded production process and comply with the national drug standards. If the national drug standards are not stipulated, they should comply with the standards set by the provincial drug supervision and management departments. In addition, the State Pharmacopoeia Commission combined with the experience of the pilot work to finalize the national drug standards for Chinese medicine granules, published in batches. After the promulgation and implementation of the national drug standards for Chinese medicine granules, the corresponding standards formulated by the provincial drug supervision and management departments shall be abolished.

According to statistics, unitle September 2022, the National Pharmacopoeia Commission has announced 200 varieties of national standards for TCM granules, and there are 69 varieties are in the public period. The common types of TCM granules commonly are about 400 ~ 600 kinds. It is expected that the full development of standards still need to be steadily implemented.

On August 31 this year, the National Medical Insurance Bureau issued another notice on the issuance of unified coding rules and methods for TCM granules for medical insurance. The notice clarified that on the basis of the coding rules for TCM herbal pieces, the coding rules for TCM granules were formulated with reference to the coding rules for Western medicine and proprietary Chinese medicine. It is considered by the industry as an important promotion of the unified standard for TCM granules in the industry, which is conducive to the promotion of Chinese medicine formula granules in the hospital. It will further boost the industry , and facilitate the regulation to ensure that patients can use the TCM granules safely and effectively, which is a multi-win situation for the country, enterprises and patients.

The industry believes that TCM granules are relatively policy immune, and they are expected to gradually replace the market share of herbal pieces and proprietary Chinese medicine in medical institutions under the centralized purchasing. The current market space of TCM granules in China is only 20 billion, and the future compound annual growth rate CAGR is expected to be above 30%, with a market size of 200 billion after 10 years.

Disclaimer: In no case does the information or opinions expressed in this article constitute investment advice to anyone.