Pharmaceutical Logistics: Investment “Crown” under the New Medical Reform System

Although everyone's life is inseparable from medicine, do you know how the medicines produced by Kangenbei Pharmaceutical and Zhejiang Pharmaceuticals reach your hands? How many times does the price differ from its cost? Which part of the process? Make money?

This process is medical logistics. As a third-party pharmaceutical logistics enterprise that combines the basic functions of transportation, storage, loading and unloading, packaging, distribution processing, distribution, and information processing, pharmaceutical logistics has become an indispensable part of our “big pharmacy” and our lives. In the past two years, the introduction of Haiwangxing from Goldman Sachs, the establishment of a joint venture between Japan’s Lingqian and Shanghai Pharmaceutical, the venture capital investment in Jiuzhoutong, Wuhan Tongjitang, Guangzhou Pharmaceutical and Shanghai Pharmaceutical have also completed the introduction of overseas funds, and various indications show that a large number of risks Capital began to flood into the "crown" of this medical reform - "medical circulation field."

Capital influx into pharmaceutical logistics

"In recent years, a large amount of capital has poured into the field of pharmaceutical logistics, mainly because the domestic pharmaceutical industry is currently a gradually open industry, but there is no pharmaceutical company that can monopolize the market alone. Therefore, the domestic pharmaceutical market presents 'multiple, small, scattered, chaotic.' Situation. With the maturity of the domestic pharmaceutical enterprises in the country's pharmaceutical logistics network, local subsidiaries have achieved large-scale operation, and there will be more than 10 pharmaceutical circulation groups with annual sales exceeding 10 billion yuan. The pharmaceutical circulation group with an annual sales volume of nearly 50 billion yuan will initially have the characteristics of industry monopoly. "A certain industry person told reporters.

Obviously, everything is closely related to the beginning of the pharmaceutical circulation field. The market-oriented reforms in China's pharmaceutical distribution sector began in the 1980s. Previously, due to historical reasons, drug circulation was basically a state-owned franchise. Pharmaceutical companies at all levels operated wholesale medicines, and pharmacies and hospitals responsible for drug retailing must purchase goods from pharmaceutical companies. Therefore, pharmaceutical logistics and distribution are also mostly undertaken by pharmaceutical wholesale enterprises. These enterprises generally have their own upstream and downstream companies, so they use the self-operated model within the enterprise to supply and distribute the goods and services of various departments, factories and stores within the enterprise. Logistics enterprises are “small and complete”, and their logistics organization is scattered, inefficient and high-cost.

Therefore, this directly leads to the fact that the enterprises in China's drug circulation are generally smaller than those of similar enterprises in developed countries. According to industry statistics, there are currently 16,500 pharmaceutical wholesale enterprises and nearly 140,000 retail enterprises, of which annual sales. There are only more than 800 companies with an amount of more than 20 million yuan. The sales of Sinopharm Group, Shanghai Pharmaceuticals and Jiuzhou Tong, which account for only 3% to 5% of the total sales of the pharmaceutical market. Compared with the United States, there is a huge gap – in the United States, the top three pharmaceutical distributions account for more than 95% of the entire pharmaceutical market, and McKesson and CardinalHealth rank. * and the second company, which account for more than 30% of the US market. Among them, McKesson's annual sales reached 36.8 billion US dollars; Japan's Zui's 75 pharmaceutical wholesale enterprises also accounted for more than 95% of the business volume.

In addition, in addition to the scale problem, the degree of informationization of pharmaceutical enterprises in China is relatively low, which also makes pharmaceutical logistics lag significantly behind the entire logistics industry. Due to the particularity of pharmaceutical products, pharmaceutical companies lack software such as pharmaceutical logistics management, pharmaceutical logistics network system, and value-added services for pharmaceutical logistics. There is no uniform drug standard code for pharmaceutical products. This has become an obstacle to the development of modern medical logistics in China. Logistics operators cannot effectively manage suppliers, retail pharmacies, and hospital pharmacies. The distribution rate is not high and there is no competition.

Therefore, in the face of the status quo, these traditional pharmaceutical companies are gradually transforming into third-party Pharmaceutical Outsourcing logistics companies. According to the reporter, the third-party pharmaceutical logistics company that appeared early in this industry is Hangzhou Bangda Logistics Co., Ltd., but it was not until 2005. In the year, this market form was gradually known to the public after the establishment of Shanghai Red Hat Logistics Co., Ltd. and was recognized by the market. In 2005, Japan National Red Hat Co., Ltd. (holding 40%) and Japan Limited IDCM (holding 20%), China Hong Kong Zhongxun International Group Co., Ltd. (shareholding 15%) and Shanghai Xunling Investment Co., Ltd. After the establishment of Shanghai Red Hat Logistics Co., Ltd., which was jointly invested by 25% of the shares, it was generally optimistic.

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