Summary of Key Points
In the nearly 300 billion yuan Chinese herbal medicine decoction piece market, there has long been a dual system consisting of "national standard decoction pieces" (uniform standards set by the state) and "local standard decoction pieces" (standards established by each province). In the past, the cross-provincial circulation of local standard decoction pieces was a gray area: while there were no legal prohibitions, local authorities were wary of quality risks or wanted to protect local enterprises, leading to restrictions or bans. This resulted in patients being unable to obtain the necessary medication, enterprises struggling to grow, and a fragmented market. Recently, the National Medical Products Administration (NMPA) released a draft policy that proposes a solution through a "filing system combined with classified management": ordinary local standard decoction pieces can be sold directly across provinces, while those that are easily confused must be filed with the provincial authorities where they will be used. Additionally, traceability, coordinated supervision, and penalties will ensure quality and safety. This policy aims to break down local protectionist barriers, make the market more competitive, and address the issue of patients not being able to find the required medications.
I. The Difficulty of Cross-Provincial Sale of Local Standard Decoction Pieces: Not Due to Legal Prohibitions, but Lack of Local Willingness
Why was it so difficult for local standard decoction pieces to be sold across provinces in the past?
- Non-uniform Standards: Each province sets its own standards, with some having stricter requirements for processing methods. For example, the same herbal material might be used as a root in one province and a stem in another, leading to significant quality differences.
- Divided Local Attitudes: Although there were no legal prohibitions, nearly one-third of the provinces did not have clear regulations, and more than one-third had restrictions on certain types of sales (for instance, Zhejiang has long had such restrictions). Even in judicial cases, the same action was sometimes judged differently across provinces.
- Local Protectionism: Local herbal medicine enterprises are a source of tax revenue, and restricting the entry of products from other regions helps protect local businesses.
The consequence was that patients had to buy medications from other places when they were not available locally, enterprises could only operate within their own provinces, and an illegal black market emerged due to unmet demand.
II. The New Policy Breaks the Barrier: Classified Filing Makes Circulation More Transparent
The core of the draft policy is to categorize products and require filing, making previously vague rules clearer:
- Ordinary Products Can Circulate Directly: Ordinary local standard decoction pieces produced in accordance with provincial standards can be sold in other provinces without the need for additional filing.
- Confusing Products Require Filing: Products that are easily confused, such as those with different sources (same name but different plants), medicinal parts (roots or leaves), or processing methods (other than basic washing and cutting), must be filed with the provincial authorities where they will be used before sale.
- Clear Risk Warnings: Labels for confusing products must state, "This product does not follow the local standard for processing Chinese herbal medicines," allowing doctors and patients to be aware of the potential differences.
In simple terms, legally produced products that meet provincial standards can be sold across provinces with just a notification to the relevant authorities—no longer in a secretive manner.
III. Benefits of the New Policy: For Patients, Enterprises, and the Market
This policy is beneficial for all parties:
- Patients: No longer having to give up treatment or travel to other places to find a specific local standard decoction piece, making it much more convenient.
- Enterprises: With national standard decoction pieces facing reduced profits from centralized procurement, local standard decoction pieces open up new markets, potentially increasing revenue (for example, enterprises in Zhejiang can now expand into other provinces).
- Market: By breaking down local protectionism, foreign enterprises can enter the market, and local enterprises can compete on a level playing field, leading to more competitive prices and a reduction in the black market.
IV. Challenges in Implementing the Policy: Final Steps Need to Be Overcome
Despite the benefits, several issues need to be addressed:
- Retail Pharmacy Management: Pharmacies need to manage a large number of confusing products, ensuring proper storage and clear communication about risks to customers (e.g., that the product does not meet local standards). Does staff have the necessary knowledge? How will authorities supervise?
- Cross-Provincial Coordination: If a problem arises with a filed product, how will provinces work together to recall it and share information? Enterprises cannot be expected to notify each province individually.
- Provincial Differences in Lists: Since the lists of confusing products are determined by each province, some may be too strict while others are too lenient. For example, if one province considers a product confusing, enterprises may need to file multiple times, increasing costs.
Once these issues are resolved, the cross-provincial circulation of local standard decoction pieces can truly become a reality.
In summary, this policy combines regulation with flexibility, allowing the market to thrive while maintaining quality and safety standards. It is a significant positive development for the Chinese herbal medicine industry.