Introduction: on April 26, 2016, the State Council officially issued a document, requiring medical reform pilot provinces to promote “two-invoice system”. According to No. 26 document of the State Council, “two-invoice system” must be implemented at medical reform pilot provinces in this year. The great determination indicates the implementation of two-invoice system, but the implementation time will vary with provinces, which exerts a lot of pressure of survival on medicine and medical device industries.

What is two-invoice system: one invoice for circulation from manufacturer to distribution enterprise, and one invoice for circulation from distribution enterprise to medical institutions. General agent and importers are included in the first invoice, purchasing of trusteeship business and transfer of parent company to subsidiary company are not included in any invoice.

Provinces and cities implementing two-invoice system: Anhui, Jiangsu, Fujian, Qinghai, Shanghai, Zhejiang, Hunan, Chongqing, Sichuan, Shaanxi, Ningxia, and 200 medical reform pilot cities.

Impact of Two-invoice System on High-value Consumables Manufacturers and Agents

Since the high-value consumables bidding in China is conducted based on province, under market circumstance of two-invoice system, only provincial A-level agents can survive, the market pattern for high-value consumables changes even totally, small and medium sized agents will be definitely forced out, high-value consumables manufacturers have to readjust the market pattern and price system and other factors.

Impact of Two-invoice System and Distribution on Common Consumables and Laboratory Reagent Manufacturers and Agents

The common consumables and laboratory reagent bidding is conducted based on municipality, which requires the medical devices manufacturers with provincial agency mode to change their channel to prefecture-level city agents-centered market pattern.

Common consumables and laboratory reagent manufacturers and agents are impacted the most not by two-invoice system but by qualification of distributors.

Beneficiary of the New Medical Consumables Situation— Two-invoice System and Distribution

As small and medium sized agents are forced out, large sized commercial companies like Sinopharm will get boom performance increase, and reach new height in industry influence, network construction, capital and strength. As small and medium sized medical consumables manufacturers are forced out, famous medical consumables brands will get dramatic performance increase.

Two-invoice system and distribution is also beneficial for promotion of third-part logistics of medicine and medical consumables and regulation of industry order.

Medical consumables agent under new situation: some are forced out and some are transformed.