The circulation traceability system for Chinese medicinal materials will be improved, helping to solve circulation challenges

From origin to consumption terminal, Chinese medicinal materials mainly involve several stages: cultivation, circulation, production and use, and the circulation stage (specialized markets and origins) directly affects issues related to the quality and management of medicinal materials; because its chain is relatively long, the participants are relatively numerous, and management is loose, the quality of Chinese medicinal materials ultimately varies greatly. As quality issues with medicinal materials have become increasingly prominent, the state has begun to make efforts to regulate them through the circulation traceability system for Chinese medicinal materials, and in the process of advancing this system in the circulation stage, it will regulate and rectify the current situation of markets and origins.

Analysis of the advantages and disadvantages of the current situation of transactions in specialized markets for Chinese medicinal materials and at origins

Advantages of transactions in specialized markets for Chinese medicinal materials

The transaction form adopted by specialized Chinese medicinal materials markets since their establishment has basically been direct face-to-face transactions between customers and medicine merchants. Such face-to-face transactions not only provide a platform for communication and transactions between buyers and sellers, but the existence of specialized markets also directly facilitates large-scale transactions between buyers and sellers in a relatively concentrated place. The advantage of this is that it can not only balance the supply and demand of medicinal material sources, but also make the transaction prices of medicinal materials relatively transparent, which is conducive to the healthy development of overall transactions.

Difficulties of transactions in specialized markets for Chinese medicinal materials

In recent years, the state has strengthened GSP (Good Supply Practice for Pharmaceutical Products) management for medicinal material distribution enterprises, imposing higher requirements on medicinal material distribution enterprises and individuals. However, traditional specialized markets for Chinese medicinal materials have long suffered from poor quality management, with many medicinal materials being adulterated, counterfeited, or sold as superior goods despite being inferior. In the face of strict state supervision, Chinese medicinal material distribution enterprises have begun to gradually reduce their procurement volume in traditional markets. In addition, with the increasing convenience of information, logistics and transportation, many Chinese medicinal material trading enterprises have begun to bypass traditional markets and purchase medicinal materials directly at production origins. Powerful pharmaceutical enterprises have even carried out vertical integration and directly participated in the cultivation and processing of Chinese medicinal materials. This will directly lead to a decline in the transaction share of traditional markets for Chinese medicinal materials, and the markets will also face the risk of gradual shrinkage.

⟦NL> Advantages of transactions at medicinal material production origins

Because medicinal material production origins are upstream in the entire industry chain, first-hand supply sources can be obtained, which effectively reduces procurement costs and the risk of buying counterfeit medicines. This is also the main reason why medicinal material distribution enterprises have gradually turned to production origins to purchase raw materials in recent years.

Problems existing in transactions at medicinal material production origins

Although skipping traditional specialized markets for Chinese medicinal materials can save a certain amount of cost and reduce the risk of buying counterfeit medicines, the entire transaction process also has many problems. First, at present, medicinal material cultivation at production origins in our country is still mainly carried out by smallholders, and production origins are relatively scattered. Pharmaceutical enterprises, however, are unclear about the terrain, medicinal material distribution and concentration conditions of the production origins, so in organizing medicinal materials they will inevitably take some detours and may even incur higher search costs. Second, transactions at production origins mostly involve a single buyer and seller, so due to the lack of competition, information asymmetry easily occurs, or unfair transactions caused by differences in bargaining power between buyers and sellers may arise. In addition, because there is a lack of market regulation of prices, price fluctuations are likely to be large. Moreover, for individual merchants, if they cannot judge demand conditions from the market, their future planting arrangements may blindly follow trends, greatly affecting the stability of supply and being detrimental to the healthy and sustainable development of the entire Chinese medicinal materials industry.

Summary: From the respective advantages and existing problems of transactions in medicinal material markets and at production origins, we can see that the cultivation or breeding of Chinese medicinal materials in our country is mostly carried out by small households and smallholders, and the circulation of Chinese medicinal materials is basically in a state of being "small, scattered and poor". By contrast, the participants in the circulation chain after the specialized market are mostly enterprises, hospitals and other institutions, with a relatively high degree of standardization and processes that are relatively easy to control. In the face of the current realities facing transactions in Chinese medicinal materials, the state addresses them by establishing a circulation traceability system for Chinese medicinal materials. Through the intelligent traceability scales configured in specialized markets, the circulation traceability system can record information on traded Chinese medicinal materials from production origins all the way to the market circulation stage, and immediately upload it through the front-end processor for real-time querying. This thus provides the basis for "forward traceability and reverse investigation", and the circulation stage achieves a considerable degree of scientific management, making accountability significantly easier to operate than before. In addition, through the use of a unified online platform, merchants' transaction histories can also be recorded and evaluated, thereby achieving integrity management and facilitating supervision by relevant departments. Through the construction of the circulation traceability system for Chinese medicinal materials, the management system of specialized markets for Chinese medicinal materials can be standardized, information release channels can be optimized, and the accountability process can be kept unobstructed, thereby realizing the true value of the market and better promoting the continuous progress of our country's Chinese medicinal materials industry.