The 2017 Statistical Analysis Report on the Operation of the Pharmaceutical Circulation Industry issued by the Ministry of Commerce has steadily increased the scale of the national pharmaceutical circulation market.

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Recently, the ''2017 Pharmaceutical Circulation Industry Operation Statistical Analysis Report'' (hereinafter referred to as the ''Report'') released by the Ministry of Commerce shows that at present, the reform of the medical and health system is deepening, and the pharmaceutical circulation industry actively conforms to the policy-oriented healthy development, showing steady growth, The trend of structural optimization and quality upgrading.

  Total sales up 8.4 percent

The "Report" pointed out that in 2017, the sales scale of the national drug circulation market increased steadily, and the growth rate dropped slightly. Statistics show that the total sales of seven categories of pharmaceutical commodities nationwide totaled 2001.6 billion billion yuan, an increase of 8.4 percent over the same period last year after deducting incomparable factors, and the growth rate decreased by 2.0 percentage points compared with the same period last year. Among them, the sales volume of drug retail market was 400.3 billion yuan, excluding incomparable factors, the year-on-year growth rate was 9.0, and the growth rate decreased by 0.5 percentage points year-on-year.

In 2017, the sales growth of pharmaceutical wholesale enterprises slowed down. The main business income of the top 100 pharmaceutical wholesale enterprises increased by 8.4 year-on-year, and the growth rate decreased by 5.6 percentage points. Among them, the main business income of 4 leading enterprises increased by 9.3 year-on-year, and the growth rate decreased by 2.9 percentage points.

The market share of national and regional pharmaceutical retail chain enterprises has increased compared with the previous year, and the retail market concentration and retail chain rate have continued to increase. As of November 2017, the drug retail chain rate has reached 50.5, an increase of 1.1 percentage points year-on-year. In 2017, the total number of stores of the top 100 pharmaceutical retail enterprises reached 58355, accounting for 12.9 of the total number of retail drug stores in China; the total sales volume was 123.2 billion billion yuan, accounting for 30.8 of the total drug retail market, up 1.7 percentage points year on year.

It is expected that the growth rate of drug circulation market sales will decline in 2018, but the sales scale will maintain steady growth in the future. It is worth noting that in the next few years, under the policy-driven drug circulation market competition will become more intense, and polarization will become increasingly obvious. The pace of cross-regional mergers and acquisitions of national drug distribution companies will be further accelerated, and regional drug distribution companies will also accelerate their development; small-scale, single-channel drug distribution companies will be unsustainable, and industry concentration will be further improved.

  Increased competition in the logistics market

According to the report, according to incomplete statistics, in 2017, the value of goods delivered by the national pharmaceutical logistics direct reporting enterprises (417) (sales without tax) was 1140.2 billion yuan (72.4 per cent of the value of goods delivered by logistics enterprises with independent legal person qualifications). The number of distribution customers is about 3.08 million, with a total of 1115 logistics centers, a warehouse area of about 10.65 million square meters, and 17714 professional transportation vehicles.

The "Report" analysis pointed out that under the influence of relevant policies such as the "two-invoice system" and "cancellation of third-party logistics approval", traditional pharmaceutical wholesale companies and pharmaceutical logistics companies have continuously accelerated the investment of logistics resources and network layout: In 2017, the scale of the national pharmaceutical logistics infrastructure continued to expand. The storage area of pharmaceutical logistics increased by 14.6 over the previous year, and the company's own transportation vehicles increased by 10.5 over the previous year. Third-party logistics enterprises such as Shunfeng, CNPC and Jingdong Logistics also participate in the competition of pharmaceutical logistics warehousing business, trunk transportation and landing distribution business through the acquisition of pharmaceutical trading enterprises and the construction of pharmaceutical cloud warehouses in cooperation with traditional pharmaceutical enterprises. At the same time, pharmaceutical distribution companies actively use pharmaceutical logistics information technology innovation to expand the scope of logistics services, accelerate the promotion of business model innovation, and improve service quality and level.

The "Report" predicts that with the continuous advancement of the intelligence and logistics standardization of the pharmaceutical supply chain, the pharmaceutical supply chain market will show orderly competition and steady development.

  Pharmaceutical e-commerce is changing with each passing day

According to the report, according to incomplete statistics, the total sales of pharmaceutical e-commerce direct reporting enterprises reached 73.6 billion billion yuan (excluding certificate a) in 2017, accounting for 3.7 of the total size of the national pharmaceutical market in the same period. Among them, B2B (business-to-business) business sales of 69.3 billion yuan, accounting for 94.1 of the total sales of pharmaceutical e-commerce; B2C (business-to-customer) business sales of 4.4 billion yuan, accounting for 5.9 of the total sales of pharmaceutical e-commerce. The difference between B2B and B2C sales structure is obvious. B2B business is mainly concentrated in western medicine (87.1 per cent), while B2C business is mainly western medicine (32.2 per cent), medical equipment (24.1 per cent) and other categories (28.3 per cent).

With the further promotion of the "Internet + Drug Circulation" action plan, the pharmaceutical e-commerce industry has gradually entered the innovative development stage of transformation and upgrading in 2017. In particular, the cancellation of the approval of Internet drug sales A, B and C has brought new development opportunities to the industry. The pharmaceutical e-commerce business of some enterprises showed an explosive growth trend. For example, in 2017, the pharmaceutical e-commerce business of Jiuzhoutong increased by 73.2 over the previous year due to the rapid growth of B2B business.

The "Report" predicts that driven by new technologies and new kinetic energy, "Internet drug circulation" will reshape the ecological pattern of the drug circulation industry. Such as O2O (online to offline) mode, B2B mode, B2C mode, FBBC (factory-enterprise-customer) mode. In the next few years, cross-border integration will inject new vitality into pharmaceutical e-commerce, and competition in the field of pharmaceutical e-commerce will become increasingly fierce.

  Annex:Statistical Analysis Report on the Operation of Drug Circulation Industry in 2017. pdf