The current situation and development trend of the domestic drug circulation market.

Data show that in 2018, China's public hospitals, primary medical institutions, retail pharmacies three terminals of drug sales of 1713.1 billion yuan, an increase of 6.3% (1).
the proportion of public hospital terminals was 67.4%, retail pharmacy terminals were 22.9% and public primary care terminals were 9.7%.
, with the implementation of the two-vote system, the transfer business from 40% to 30%, the proportion of direct sales terminal business increased accordingly.
circulation enterprises are mostly state-owned enterprises, accounting for 61%, followed by joint-stock enterprises accounted for 32%.
As of the end of 2018, there are 13,598 pharmaceutical wholesale enterprises in China, including 4 national drug distribution enterprises, namely, China National Pharmaceutical Holdings, Shanghai Pharmaceuticals, China Resources Pharmaceuticals, Kyushua Tong, the rest are local distributors.
China's provinces of the distribution pattern is larger, high concentration of areas such as Shanghai, the number of drug distribution is expected to reach 80%, now most of the region is about 50%, the rest of the small distributors to split the remaining market.
the concentration of drug circulation, the marginal effect of policy influence is reduced.
as of 2018, there are 13,598 wholesale pharmaceutical enterprises in China.
peak in 2012, the number of drug distribution enterprises reached 163,000, and then fell due to the decline in industry growth, mergers and acquisitions and other reasons.
the two-vote system, introduced in 2015, has further boosted industry consolidation, with the number of companies dropping to 130,000 before rebounding slightly.
increased from 34 per cent to 43 per cent in 2011-2018, and concentration continued to increase.
drug circulation industry is affected by two-vote system, zero-plus, drug price reduction, tape procurement and other policies.
the incremental increase brought about by the accelerated introduction of new drugs to market and the reduction of the distribution costs of generic drugs business, the marginal effect of the policy on drug circulation enterprises gradually weakened.
, the pharmaceutical liquidity sector (excluding pharmacies) sector is valued at 15.3 times, representing a valuation premium of -56 per cent to the biopharmaceutical industry, the lowest level since 2011.
, China's drug terminal sales of about 2 trillion yuan in 2018 China's public hospitals, primary medical institutions, retail pharmacies three terminal drug sales of 1713.1 billion yuan, up 6.3% Year-on-year.
In terms of the distribution of sales of the three major terminals for drug sales, the public hospital terminal market share is the largest, accounting for 67.4% in 2018, the retail pharmacy terminal market share in 2018 is 22.9%, the public primary health care terminal market share has increased in recent years, in 2018 accounted for 9.7%.
addition to the unsealed "private hospitals, private clinics, village health rooms", the total sales of China's drug terminals will be about 200 billion yuan.
. 2. The current situation of drug circulation in China accounts for 72.8% of chemical drugs, and local and multinational producers are evenly divided.
by drug category: According to the data of 35 enterprises reported directly by the Ministry of Commerce, the proportion of drugs classified in circulation in 2018 was 72.8%, Chinese traditional drugs accounted for 15.2%, biological products accounted for 7.9%, medical devices accounted for 2.4%, and other varieties accounted for 2.7%.
from the last three years of sales trends, the proportion of chemical drugs is still increasing year by year, this is China's chemical and pharmaceutical market flooding of the significant characteristics, and the proportion of traditional Chinese medicine does not rise and fall, China's medical device market growth rate of more than 40% in the past two years, is expected to be related to the increase in industry concentration.
the emergence of this phenomenon is mainly directly related to medical insurance fee control, restriction of complementary drugs, the road of revival of Chinese medicine is bumpy.
If the Chinese medicine market is to be rapidly expanded to reach the central target of 30%, it may be necessary to take such as this anti-new crown pneumonia resistance war, eliminate all interference, with a strong means to achieve the Chinese medicine big health China strategic objectives."
from the current market when the consumption of adaptive drugs, digestive tract and metabolic drugs accounted for the first, 17%, followed by cardiovascular, systemic anti-infection, anti-tumor and immunomodant, nervous system and so on.
2018, the market share of local producers will be 49.2% and that of multinational producers will be 50.8%.
17.5 per cent of essential medicines in the united States.
share of medicare drugs in China was 69.2 per cent.
three, two-vote system changed the status quo of drug circulation, two-vote system changed the pattern of drug circulation, the proportion of pure sales increased.
in the past, the drug circulation industry has multiple agents, hanging on to the ticket and other models.
complicated circulation links raise the price of drugs, breeding illegal and illegal behavior.
multiple agents: that is, drugs from manufacturers to the hospital between multiple dealers layer to hang on to the ticket: the circulation of illegal tax avoidance means.
January 2017, the Commission and eight other departments jointly issued a letter calling for the introduction of a two-vote system nationwide by the end of 2018.
by the end of 2018, all public medical institutions will have a two-vote system as scheduled. the implementation of the two-vote system in
has reduced the intermediate link of drug circulation, standardized the channels of drug circulation, and promoted the concentration of the industry.
the proportion of two-vote transfers to wholesale enterprises decreased from 40.9 per cent in 2016 to 29.9 per cent in 2018, with a corresponding increase in direct sales to medical institutions and retail terminals.
4. Drug circulation pattern formed by the end of 2018, there are 13,598 pharmaceutical wholesale enterprises in China, of which the national circulation enterprises are National Pharmaceutical Holdings (17% of the market share), Shanghai Pharmaceuticals (market share 7%), China Resources Pharmaceuticals (market share 6%), Kyuszhou Tong (market share 4%), the others are local distributors.
pharmaceutical distribution business is mainly in Shandong Province, the company's medical device distribution business covers almost all provinces of the country, is a national medical device distributor.
, the circulation of drugs mainly to state-owned background enterprises.
2018, the main business income of state-owned and state-controlled enterprises in the country's drug circulation was 954.1 billion yuan, accounting for 60.5% of total revenue, followed by joint-stock enterprises with a share income ratio of 31.9%, and foreign, Hong Kong, Macao and Taiwan and private enterprises accounting for 3.5%.
Five, Pharmaceutical Logistics Pattern According to the China Pharmaceutical Business Association Pharmaceutical Logistics Database, in 2018 941 sample enterprises have a total of 1476 distribution outlets, with a total storage area of 12.96 million square meters, 179,000 distribution vehicles, 2856 cold storage.
state-controlled, Kyushu Tong and China Resources logistics scale of the country's top three.
logistics center area, own distribution vehicles, the number of logistics outlets are the three important indicators to reflect the scale of distribution enterprises.
logistics center area of 57%.
the top three enterprises are: Kyuszhou Tong, State Control, China Resources, Kyushua Tong Logistics Center area reached 2.46 million square meters.
own distribution vehicles are 44%.
the top three enterprises are: State Control, Kyushua Tong, China Resources, State-controlled distribution vehicles for 2678 units.
number of logistics outlets is 47%.
the top three enterprises are: State Control, China Resources, Kyushua Tong, the number of state-controlled own logistics outlets for 282.
6. Profitability of Pharmaceutical Circulation Enterprises According to 2018 earnings data, the gross margin of the drug distribution sector (excluding pharmacies) was 12.5%, the net profit margin was 2.9%, and after deducting non-recurring profit and loss was 8.2%.
its net interest rate is about half the average net profit rate for the biopharmaceutical industry, but the deduction is on par with the biopharmaceutical industry.
the trend of changes in financial indicators in recent years, mainly due to the reduction of the low gross margin transfer business of the distributors after the two-vote system, taking goods directly from the manufacturers, and raising the overall gross margin.
sales expense rate increased significantly, mainly due to enterprises in order to improve the end channel coverage, increase the investment of end resources, as well as the sales expense rate of lower transfer business proportion decreased.
management expense rate remained stable, and the financial expense rate increased slightly, which is related to the increase in the cost of capital.
net margin declined slightly in 2018, mainly due to a larger increase in the cost rate than an increase in gross margin.
after deducting non-deductible ROE fell more in 2018, mainly due to a larger decline in net profit than net assets, although both net profit and net asset growth declined.
7. Trends in the field of pharmaceutical circulation In 2018, the size of the national drug circulation market was 2158.6 billion yuan, an increase of 7.7%.
as of 2018, there are 13,598 wholesale pharmaceutical enterprises in China.
peak in 2012, the number of drug distribution enterprises reached 163,000, and then fell due to the decline in industry growth, mergers and acquisitions and other reasons.
two-vote system, which began in 2015, further boosted industry consolidation, with the number of companies falling to 130,000, before rebounding slightly.
drug distribution industry increased from 34% to 43% in 2011-2018, and concentration continued to increase.
1, the driving force of continuous increase in the concentration of the drug distribution industry. After the implementation of the two-ticket system
, the circulation chain is shortened, and the large distributors with upstream and downstream resource advantages have a higher chance of obtaining new business.
-belt procurement and other policies lead to a continuous decline in drug prices, lower distribution costs, large distributors have a scale advantage, lower relative costs.
a considerable number of new and innovative drugs are biological drugs that require higher transport storage conditions, and large companies have better hardware and software equipment to access this segment of the business.
2, pharmaceutical e-commerce is booming.
has grown rapidly since the introduction of the Measures for the Supervision and Administration of Internet Food and Drug Management (Draft for Comments) in 2014.
2018, China's total sales of pharmaceutical and e-commerce business (excluding A-certificates) reached 97.8 billion yuan, up 33% Year-on-year.
the access of pharmaceutical e-commerce from pre-approval to record monitoring, before 2017, Internet drug transactions need to obtain the Internet Drug Information Service Qualification Certificate, the certificate is divided into A/B/C three: the scope of A certificate is a third-party trading service platform, such as Tmall Pharmaceutical Museum and JD.com pharmacy;
As of September 30, 2017, china has issued 52 A-certificates, 240 B-certificates and 682 C-certificates.
2017, the state cancelled the pre-approval of the Internet Drug Information Service Qualification Certificate and turned it into a record-keeping monitor.
3, policy-oriented role.
the circulation of pharmaceutical products is an important part of carrying the upstream and downstream development of large health industry, and has a strong sensitivity to relevant policies in the industry.
in recent years, the impact of various policies on the drug circulation industry is as follows: First, the two-ticket system and zero-plus have been implemented in the country, the marginal impact on the drug distribution industry weakened;
fourth is to speed up the progress of drug review and approval of the market, the higher price of new drugs, relatively high distribution costs, to drug distribution enterprises to bring new increments.
: (1), China Industry Information Network: "China's retail pharmacy market in 2018 and the future direction of analysis" link: