preface

In recent years, under the general trend of increasingly strict national supervision of medical insurance expenses, fine management of medical products, and the implementation of the "two ticket system" policy, the production enterprises, sales enterprises, transportation enterprises, medical institutions and other related entities of medical products are facing stricter supervision and challenges. Whether it's the frequent medical bribery cases, or the previous hospital insurance fraud cases, they are constantly reminding everyone of the importance of medical compliance, especially the medical supply chain, which is an important link between medical product manufacturers and end customers. Its compliance has always been a key and difficult issue in hospital management.

In this series of articles on medical compliance, we will tell you about the compliance issues of the medical supply chain such as hospital procurement process, medical product access, drug and equipment transportation, use, storage, information management, as well as the common compliance issues in the operation and management of other hospitals. This article will first introduce the composition, function, common operation mode and structure of the medical supply chain.

1、 The structure and function of medical supply chain

（1） Structure of medical supply chain

The guiding opinions of the general office of the State Council on actively promoting the innovation and application of supply chain (GBF [2017] No. 84) stipulates that "supply chain is an organizational form that takes customer demand as the guide, takes improving quality and efficiency as the goal, and takes the integration of resources as the means to achieve efficient coordination in the whole process of product design, procurement, production, sales, service, etc." If it is applied to the medical field, the medical supply chain can be understood as taking the needs of patients as the guide, integrating various resources in the industry, and realizing the whole process of medical products from R & D, production, procurement, transportation to sales.

Whether it is the traditional medical supply chain, or the medical supply chain under the medical reform policies such as the "two vote system" and "one vote system", or the digital medical supply chain combined with Internet Information Science and technology, it includes multiple medical supply chain entities, which jointly participate in the whole process of medical products from production to final use by consumers, including the regulatory departments of the medical industry, suppliers of raw and auxiliary materials of medical products Medical product R & D enterprises, production enterprises, bidding intermediaries, medical product wholesale enterprises, distributors, logistics companies, hospitals, retail enterprises, patients, etc. They are distributed in different nodes of the medical supply chain. By integrating their own resources and advantages, they give full play to their specialties and specialties, and jointly promote the efficient and coordinated operation of the medical supply chain.

（2） Role of medical supply chain

The supply chain plays a crucial role in promoting the innovation and development of the medical field. For example, the needs of patients and hospitals can be fed back to medical product R & D enterprises in a timely and effective manner through the medical supply chain, and the medical products after R & D and production can also be transported to patients in a timely manner through an efficient supply chain and the curative effect of the products can be fed back. At the same time, each subject in the medical supply chain gives full play to their professional and resource advantages at different nodes, which can not only improve the operation efficiency of the whole supply chain, but also help to reduce the cost of circulation.

In practice, the medical supply chain is a complex and dynamic network, in which many suppliers, cooperative institutions, downstream customers, etc. may participate, but in general, it can be divided into R & D and production end, circulation end, retail terminal and consumer terminal, and the corresponding subjects are the R & D and production enterprises of medical products, supply chain management enterprises / dealers, hospitals and retail pharmacies, and patients. These entities play different roles in the operation of the medical supply chain. For example, the R & D and production end, as the source of the medical supply chain, is responsible for R & D and production of qualified medical products required by consumers, and transmits real-time product information and inventory information to downstream customers; The circulation end is mainly responsible for the bidding, procurement, quality management, transportation, storage, sales and other work related to the circulation of medical products from the R & D and production end to the retail terminal, which is the key link to ensure the smooth logistics and information of the medical supply chain, improve the operation efficiency of the supply chain and reduce the circulation cost; As the most closely related link with consumer terminals, retail terminals can effectively collect the actual market demand of consumer terminals, and timely feed back to upstream suppliers through the supply chain, so as to assist the research and development and production of medical products.

2、 Common operation modes and required qualifications of medical supply chain management companies

Supply chain management companies at the circulation end play a key role in connecting the preceding and the following in the medical supply chain, and are also the main body involved in the most circulation links. Therefore, supply chain management companies are the key to improve the efficiency of the supply chain and save circulation costs. With the reform of pharmaceutical policies and the development of Internet information technology, some supply chain management companies have gradually become large-scale and systematic, and have emerged in the market. According to our project experience, the common operation modes of supply chain management companies can be divided into three types: first, they only provide commercial services such as sales and wholesale of medical products, and logistics distribution services are outsourced to third-party entities; Second, it only provides professional logistics and distribution services, and does not participate in the sales, wholesale and other commercial services of medical products; Third, it provides both commercial services and logistics distribution services.

Under different operation modes, supply chain management companies provide different services, and their required business scope and qualifications will also be different. For example, the business scope may need to cover road cargo transportation, medical device wholesale, medical device operation, food operation, health food sales, drug wholesale, drug retail, general cargo storage, low-temperature storage, etc; The qualifications and licenses required may include: business license, medical device business license, food business license, food circulation license, drug business license, health license, road transportation business license, ICP license (company website), GSP license, etc. In addition, if a drug production and trading enterprise entrusts a supply chain management company to store and distribute drugs, it also needs to be filed, and the provincial administrative department shall publicize the name, address, scope of entrustment and other information of the entrusting party and the entrusted party on the official website.

3、 Common structure settings of medical supply chain management companies

According to the cases of relevant listed companies we searched, medical supply chain management companies are often set up in the group system of pharmaceutical R & D and production enterprises, hospitals and logistics companies, and their main equity structure types are as follows:

1. Pharmaceutical R & D and production companies and medical supply chain management companies

Generally, listed companies of pharmaceutical R & D and production type will set up supporting pharmaceutical technology companies, pharmaceutical advertising companies, medical investment companies and other entities around their core industries. At the same time, they will also use their advantages and resources in R & D and production to expand services at the circulation end, including setting up pharmaceutical sales companies and opening pharmacies in various regions to facilitate the wholesale and retail of medical products, Set up a special logistics service company to be responsible for the transportation, storage and management of medical products, and set up a medical supply chain management company that provides both commercial services and logistics services, which thoroughly runs through the links between research and development, production and circulation, so as to facilitate listed companies to use their existing medical industry resources to carry out flexible business operations and arrangements. Take JIUZHOUTONG Pharmaceutical Group Co., Ltd. as an example, its main structure setting is shown in the following figure:

2. Private hospitals and medical supply chain management companies

As a downstream customer of the circulation end, private hospital group companies, their sponsors and investors, in order to better serve the efficient operation and management of the hospital's internal supply chain and make the hospital more focused on the professionalism of medical behavior, usually set up one or more medical supply chain management companies in the group system, and their business scope usually covers the wholesale, sales, transportation, warehousing and other services of medical products. The main structure of Tongce Medical Co., Ltd. is shown in the following figure:

3. Logistics companies and medical supply chain management companies

In addition to the pharmaceutical R & D and production companies in the upstream of the circulation end and the private hospitals in the downstream, some listed logistics companies have also extended their business to the field of medical product distribution in order to make full use of their logistics distribution resources and advantages nationwide and even globally, and gradually developed into professional medical supply chain management companies. Among them, the business scope of logistics companies is mainly pure logistics distribution services such as road cargo transportation, loading and unloading handling, warehousing services, etc; On this basis, the business scope of its medical supply chain management company has increased the wholesale and sales of drugs, health care products, medical devices and other medical commercial services, which belongs to the type of providing both commercial services and logistics distribution services. Taking SF Holdings Co., Ltd. as an example, its main structure settings are shown in the following figure:

To sum up, the medical supply chain is guided by the needs of patients, integrates various resources in the industry, and realizes the whole process of medical products from R & D, production, procurement, transportation and sales, including pharmaceutical R & D, production enterprises, medical supply chain management companies, hospitals, patients and other subjects, who play an indispensable role in different nodes of the medical supply chain. In practice, the services provided by medical supply chain management companies include the wholesale, retail, transportation and storage of medical products. Different service contents require different qualification certificates and regulatory requirements. In addition to pharmaceutical R & D, production enterprises and private hospitals, logistics companies usually use their resources and advantages to set up medical supply chain management companies.

With the overall tightening of regulatory policies in the medical industry, the rapid development of Internet technology and the gradual maturity of the medical supply chain system, the medical supply chain will likely develop in the direction of flattening, specialization, informatization, standardization and intelligence in the future, the circulation links and circulation costs will be further compressed, the medical supply chain management companies will be more centralized, and the market will have higher and higher requirements for the professional level of medical supply chain management companies, And gradually reflect the advantages of informatization, but at the same time, it also means that the compliance requirements of the medical supply chain will be higher and higher.