The new profit growth point shows that the pharmaceutical industry ushered in the era of big reshuffle

According to a report released by the National Development and Reform Commission on the development of China's pharmaceutical industry in 2006, the growth in sales revenue and profits and the export of medical and health products in China's pharmaceutical industry in 2006 have seen varying degrees of growth. In the industry, the profit rate of some industries has continued to decline. The relevant experts pointed out that with the implementation of policies such as drug price cuts and prescription management, the decline in the profit rate of the medical system industry will continue to increase, but some new profit growth points in the pharmaceutical industry will continue to show, which indicates that the pharmaceutical industry has shuffled The time will come.
“Medical Accessories” has become a new growth point Medical sub-industries include chemical raw materials, pharmaceuticals, chemical preparations, biological preparations, medical devices, proprietary Chinese medicines, and veterinary drug manufacturing. In 2006, the sales revenue and total profit of these industries all increased in varying degrees. Among them, the medical products industry and the medical device industry, which are known as "medical accessories," saw the largest increase in profit, reaching 51.39% and 26.37%, respectively.
“The medical device industry will surely become a new profit growth point for the pharmaceutical industry in the future.” Jiang Feng, president of the China Medical Device Industry Association, interviewed this reporter and said, “With the increase in the use of medical devices by medical institutions, people’s health care With the increase of consciousness, the use of both medical devices and household devices will increase substantially in the future. Moreover, due to the limited openness of China's pharmaceutical industry, the medical device industry is expected to become a breakthrough in attracting foreign investment."
Exports promote the development of the pharmaceutical industry In 2006, China's pharmaceutical and health products exports maintained an upward trend, with exports reaching 19.61 billion U.S. dollars, an increase of 26.3% year-on-year. Among them, the export volume of Chinese medicine products was 1.09 billion U.S. dollars, which exceeded the one billion U.S. dollar mark for the first time.
“Under the backdrop that the profit space of the pharmaceutical industry has been greatly reduced, China's pharmaceutical and healthcare products exports have hit new highs and become the main driving force for the development of the industry. This shows the great potential of China's pharmaceutical exports.” President of the China Chamber of Commerce for the Import and Export of Medicines and Health Products Zhou Xiaoming told reporters. He pointed out that last year China's pharmaceutical and health products exports continued to maintain rapid growth mainly due to three major advantages. The first is that chemical raw material drugs, as the pillar of the industry's exports, still maintain a certain competitive advantage. In particular, antibiotics, vitamins, hormones, antipyretic analgesics and other products continue to occupy a considerable share in the international pharmaceutical market. Second, the trade deficit in medical equipment has been reversed. Conventional equipment, surgical instruments, massage equipment and other small and medium-sized products have a price advantage, and their functions and reliability are comparable to those of similar foreign products, and are welcomed by foreign users. Third, the export of bulk medicinal materials showed a significant increase. Although the transitional period stipulated in the EU's Traditional Herbal Registration Directive is approaching, but with the general recognition of Chinese medicine products by European people, the export of Chinese herbal medicine products to Europe has shown a relatively rapid growth.
The era of the manufacturing industry's big reshuffle is half of the pharmaceutical industry in 2006 and half of it is worry. The profit margin of the pharmaceutical manufacturing industry has dropped to the lowest point of 7.98% in four years. According to the report, pharmaceutical manufacturing companies realized sales revenue of 520 billion yuan and profit of 40 billion yuan. From the perspective of the development of pharmaceutical sub-sectors, the sales of chemical pharmaceutical preparations, chemical raw material drugs, and proprietary Chinese medicines have all exceeded 100 billion yuan, and the profit level is generally low. Among them, only biopharmaceuticals have a maximum profit rate of 10.58%, chemical raw material drugs only 5.27%, chemical agents 8.32%, proprietary Chinese medicines 9.14%, and Chinese medicine decoction pieces 5.45%.
Regarding this status quo in the pharmaceutical manufacturing industry, Li Lei, deputy director of the Beijing Kangpaite Medical Economic Development Research Center, pointed out that this was mainly due to institutional and management issues. The mechanism of the hospital's use of drugs to provide medicine has not changed, the medical system reform plan has not been introduced, and the institutional problems of the country's lack of investment in innovation in the pharmaceutical industry are the main reasons for the current downturn in the pharmaceutical industry. Moreover, the continuous reduction in the price of drugs has also led to a drop in the profits of the pharmaceutical industry. In addition, the lack of pharmaceutical macro-control departments has also made the pharmaceutical industry lose its backbone. After the reform of government institutions, with the revocation of the Pharmaceutical Bureau under the former Economic and Trade Commission, the pharmaceutical supervision department has played a role as the administrative department of the pharmaceutical industry. “The regulatory authorities do not have the ability to coordinate and coordinate the development of the enterprise. The dislocation of roles has caused pharmaceutical companies to fail to find leaders.” He said, “This downturn will continue for two to three years, and even some industry profit margins will To 4%, the low-profit situation means that China's pharmaceutical industry will usher in a major era of reshuffle."
The pharmaceutical business will scrape and merge and reorganize the wind. In 2006, the days of pharmaceutical and commercial enterprises were not too good. The net sales for the whole year are expected to reach 280 billion yuan, and the sales profit will be 1.68 billion yuan. The profitability of drug sales may even be reduced to 0.6%. Zhu Changhao, vice president of the China Pharmaceutical Business Association, told reporters that since 2002, except for the SARS epidemic in 2003, drug sales have increased slightly, and the profit rate has reached 0.73%. The profits of pharmaceutical commercial enterprises have been declining at 0.66%.
Zhu Changhao believes that the era of meager profits will lead to the merger and reorganization of commercial enterprises. At present, there are 6,000 to 7,000 pharmaceutical commercial enterprises in China, large and small. There are too many companies with small scales. Although the competition on the surface is fierce, it is not conducive to the development of the entire industry. Profits continue to fall, and companies must take a joint approach. In addition, the adjustment strategy is also a good recipe, but this may only be effective for large pharmaceutical commercial enterprises. According to him, Sinopharm Group Pharmaceutical Co., Ltd. (600511), Huadong Medicine Co., Ltd. (000963) and Shanghai Pharmaceutical Co., Ltd. (600849) adopted adjustments to profitable products, utilized large-scale operations, and established cooperative relationships with manufacturing companies. As a result, corporate profits have exceeded 1%.

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