In 2015, China’s pharmaceutical industry experienced a slowdown in its growth, which can be attributed to the increasingly rigid governmental supervision and more and more fierce competition. However, a slowdown in growth doesn’t indicate industry decline, but it is an opportunity of transformation and upgrading for the overall pharmaceutical industry instead, according to CCM.
In 2015, the growth rate of China’s pharmaceutical industry decreased to 10%, a YoY drop of 2.1 percent points. This is the fifth consecutive decline from 2011 in China’s pharmaceutical industry. According to economic operation report of Chinese pharmaceutical industry published by China National Pharmaceutical Industry Information Center, the growth rate of pharmaceutical industry declined from 17.7%, 15.2%, 13.3%, 12.1% to around 10% from 2011 to 2015.
It is commonly believed among the insiders that the slowdown in the average growth rate in pharmaceutical industry doesn’t mean the decline of the overall industry. Taking the ranking of 208 pharmaceutical enterprises listed in A-share market as a standard, they are divided into seven groups in terms of 2014 total revenue. According to the annual compound growth rate from 2011 to 2014 among the seven groups, the group with the highest growth rate in revenue was medium-sized enterprises (20.07%); following that, the industry leaders was 19.01%, and the small-sized enterprise was 5.92% (lowest growth rate).
According to insiders, the slowdown in pharmaceutical industry growth is mainly attributed to increasingly rigid supervision and control from the national government who introduced a series of policies on controlling medical insurance fees, controlling the proportion of drug revenue in hospital revenue, shortening the approval time for new drugs launch and etc., leading to a periodical decline in the growth rate of pharmaceutical industry which is already suffering from intensive competition. Besides, with the coming of the Internet era, Internet health-care is becoming hotter and hotter, which makes some enterprise slow down the development pace and make responsive measures to cope with this.
It appears that the overall pharmaceutical industry experienced a slowdown in growth, but it is a necessary step for the survival of the fittest in the overall industry. According to the insiders, the slowdown in growth the pharmaceutical industry is a turning point for accelerating transformation and upgrading as well as improving competitiveness. On one hand, it can reverse the extensive development in the past few years and improve the product quality in pharmaceutical industry; on the other hand, it can also promote the technology innovation of the pharmaceutical industry, reform business mode and increase enterprises’ strength in the market competition.
Therefore, how to grasp the opportunity of accelerating the transformation and upgrading has become a key issue for enterprises in the pharmaceutical industry.
Firstly, enterprises should made full use of health care policy that encourages pharmaceutical enterprises to make innovations. The policy will help to alleviate the problems of no medicines for ordinary people or ordinary people could only resort to highly expensive exported pharmaceuticals, also maintain enterprises’ motivation for research and development.
Secondly, pharmaceutical enterprises should make adjustments in their business mode, which is a necessary step brought by the huge change in the pharmaceutical bidding reform, Internet marketing mode, etc. Under the background of "Internet plus", high effectiveness and low cost of the Internet brings much benefit to pharmaceutical enterprises. Besides, "Internet plus" will also help pharmaceutical enterprises to make breakthroughs in the traditional pattern, make innovations in business mode and dig into more values.
Finally, enterprises should take the road of internationalization, which is not only a necessity for alleviating the excess production capacity of the national pharmaceutical enterprises but also an important path to walk into international market. That is to say, those who are in the front row of internationalization could win the market.
About CCM:
CCM is the leading market intelligence provider for China’s agriculture, chemicals, food & ingredients and life science markets. Founded in 2001, CCM offers a range of data and content solutions, from price and trade data to industry newsletters and customized market research reports. Our clients include Monsanto, DuPont, Shell, Bayer, and Syngenta. CCM is a brand of Kcomber Inc.
For more information about CCM, please visit www.cnchemicals.com or get in touch with us directly by emailing econtact@cnchemicals.com or calling +86-20-37616606.
Tag: pharmaceutical