The Twelfth Five-Year Plan of the Pharmaceutical Industry will release a total pharmaceutical target of RMB 3 trillion

Business Club April 22 The reporter learned from the 65th National Pharmaceutical Trade Fair held in Chengdu on April 21 that the 12th Five-year Plan of the Pharmaceutical Industry will be released in May and June.

The "planning" made it clear that during the "12th Five-Year Plan" period, the country's total output value of the pharmaceutical industry will increase by an average of 20% per year. By 2015, the total value of the pharmaceutical industry in China will reach 300 billion yuan.

As of 2015, the top 100 companies with sales revenue in China will account for more than 40% of the total sales revenue of the industry, while in the basic pharmaceutical sector, the top 20 production companies with major products will have a market share of more than 80%. This means that the industry's concentration has rapidly increased.

In addition, 20 independent innovative drugs will be put on the market during the “12th Five-Year Plan” period.

The "12th Five-Year Plan" for pharmaceutical circulation will introduce industry integration. The "2010-2015 National Pharmaceutical Distribution Industry Development Plan," originally planned for the third quarter of last year, will be introduced soon. "Planning" pointed out that it will cultivate 1-3 hundred billion yuan-class enterprises and 20 billion-dollar-scale enterprises to solve the problem of low concentration of medicines in the field of pharmaceutical circulation, and use of drugs to support medical problems; and to encourage the merger and reorganization of drug circulation enterprises. To encourage the development of retail chain operations. It is expected that at the end of the “Twelfth Five-Year Plan”, the total size of China's pharmaceutical circulation market will reach 900 billion yuan, maintaining a rate of 10% annual growth.

“The National Plan for the Development of the Pharmaceutical Circulation Industry 2010-2015, which was originally scheduled for the third quarter of last year, is about to come out. Our last comments have just been submitted to the relevant state departments.” China's top three pharmaceutical and commercial company reported to Shanghai Securities.

According to reports, during the “12th Five-Year Plan” period, the pharmaceutical circulation industry will focus on encouraging mergers and reorganizations of drug distribution companies, encourage the development of retail chain stores, encourage market-based allocation of resources, and rely on the industry itself to promote rather than rely on administrative strength.

"China's pharmaceutical business will take the lead in industrial integration ahead of China's pharmaceutical manufacturing industry," said Kyushu Express Securities.

Investment Advisor Guo Fanli, a research fellow of the pharmaceutical industry, told reporters that the Ministry of Commerce proposed five key tasks in the field of pharmaceutical circulation during the “Twelfth Five-Year Plan” to directly focus on increasing the concentration of the pharmaceutical circulation industry. Therefore, governments at all levels need to mobilize market mechanisms and Economic instruments guide large companies to expand their scale through acquisitions, equity participation, etc. In this process, the government will give corresponding preferential policies. In his view, by the end of the "Twelfth Five-Year Plan," the total size of China's pharmaceutical circulation market will reach 900 billion yuan, and will maintain a rate of annual growth of 10%. In the future, the merger and reorganization of domestic pharmaceutical distribution companies will become the norm.

Undervalued UBS pharmaceutical industry analysts say that the value of pharmaceutical business companies is largely underestimated.

He believes that the current pattern of the entire pharmaceutical distribution industry has caused the gross margin of the entire industry to continue to drop in the past few years, and the average net profit rate of the entire industry is less than 1%. This pattern has appeared in the United States and Japan. The low profit rate of the pharmaceutical circulation industry provides conditions for integration and mergers.

It is understood that at present, there are as many as 13,000 pharmaceutical distribution companies in China, and only a few of them have relatively good scale strength and profit levels. Due to the fact that too many enterprises have been squeezed into the industry, vicious competition among enterprises has occurred. At the same time, market segmentation and local protectionism have also hindered the formation of a unified domestic market, restricted fair competition, and constrained the moderate concentration and high efficiency of the pharmaceutical wholesale distribution business.

According to relevant officials of the Ministry of Commerce, the "planning" encourages and supports national and regional advantageous pharmaceutical distribution companies to use industrial funds, financing guarantees, credit insurance, and listing and financing, and other economic means, through acquisitions, mergers, alliances, participation in shares, holdings, etc. Ways to expand distribution network coverage, achieve scale, intensive and international operations; support professional or other specialty small and medium pharmaceutical wholesale enterprises to do fine, detailed, and strong, and gradually form a national group enterprises as a leader, regional Sex-based companies are the main body, city-level enterprises based on the pharmaceutical circulation network throughout urban and rural areas.

The "Planning" pointed out that it will cultivate 1-3 billion-level billion-level enterprises and 20 billion-billion-dollar-level enterprises to solve the problem of low concentration of medicine in the field of pharmaceutical circulation, and the use of drugs to raise medical care.

Leading enterprise layout nationwide In recent days, Shanghai Pharmaceutical Distribution Holdings Co., Ltd. acquired a 53% stake in Zhejiang Taizhou Pharmaceutical Co., Ltd. for 150 million yuan, thereby increasing its holding to 60%. At the same time, the acquisition of 100% equity of Wenling Pharmaceutical, another pharmaceutical and commercial enterprise in Taizhou, Zhejiang, by Sinopharm has entered the forthcoming public announcement phase.

In Henan, the expansion of pharmaceutical companies has started since early last year. After Henan launched the first-tier distribution right tender for essential drugs, the pharmaceutical giants such as Sinopharm, China Resources, Haiwang and Shanghai Pharmaceuticals started to expand intensified in Henan Province. The performance of most of the more than 300 drug circulation enterprises in Henan Province does not reach the scale of billions of sales, and their survival is becoming precarious. In December last year, the second largest enterprise in the province, Henan Province Aisheng Pharmaceutical Co., Ltd. offered to cooperate with China Resources.

UBS researchers said that after the completion of the “Twelfth Five-Year Plan” integration, the Chinese market will form a number of pharmaceutical companies, a few circulation companies, and many hospitals pharmacy business. This format determines that the profitability of pharmaceutical distribution companies may increase significantly.

Private capital ushered in opportunities for development The "Plan" also clearly pointed out that in the next five years, in the field of pharmaceutical and commercial circulation in China, the basic role of market mechanisms in the allocation of resources will be brought into full play, the diversification of investment subjects will be advocated, and the support of private capital and participation of foreign capital will be supported. Competition supports the coexistence of large, medium and small enterprises.

"The core of the "planning" is to promote integration, but it will not explicitly encourage which kind of integration direction. As long as it meets the market rules and can achieve healthy competition, the state will support it." This time involved in the development of the "planning" of the relevant experts Indicated. This means that private capital that has been “hidden” for a long time in the pharmaceutical circulation industry will gain more opportunities in the consolidation of the new round of pharmaceutical circulation industry.

Zhang Fabao, chairman of Bio Valley committed to the development of e-commerce, told reporters that from the point of view of “planning”, the country will greatly reduce the circulation of pharmaceuticals and create an orderly market environment. More powerful central enterprises will become leaders in the field of pharmaceutical circulation. sheep. Private capital is more involved in participating in e-commerce and creating a more transparent medical circulation environment. “As Hai Hong Holding and Kyushu Link, they have the first-mover advantage in the development of e-commerce in medicine.”

Kyushu Express currently ranks third in sales in the pharmaceutical and commercial circulation sector. The company’s relevant sources said that the “planning” encourages mergers and acquisitions in the industry. This holds the opportunities and challenges for private capital. On the one hand, private capital can take this opportunity to expand its scale and become bigger and stronger through mergers and acquisitions or regional alliances. On the other hand, some private capitals face great challenges and may become the target of mergers and reorganizations by others.

According to him, Kyushutong is also expanding in full swing. The company plans to build 20 provincial-level large-scale pharmaceutical logistics centers, 50 municipal-level small and medium-sized pharmaceutical logistics centers, and 300 terminal distribution points in the next 2-3 years. 1,000 retail chain pharmacies.

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