Comments on China's Top 100 Pharmaceutical Industry List in 2016

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The 2016 "Top 100 Chinese Pharmaceutical Industry Enterprises" list was announced at the 34th National Pharmaceutical Industry Information Annual Conference. As a leading force in the pharmaceutical industry, the top 100 companies represent the highest level of development of China's pharmaceutical industry.

The growth rate of the main business income of the top 100 enterprises reached 11.1, and the growth rate of the whole industry was 9.9. The growth rate of the main business income of the top 100 enterprises exceeded the average growth rate of the industry for the first time, and the concentration rate further increased to 23%. The average R & D investment of the top 100 enterprises reached 3.6.34 of the top 100 enterprises and 57 enterprises in the whole industry have obtained international advanced GMP certification including cGMP in the United States, EU, EU, TGA, Australia, TGA, the total number is 78. All the 8 American ANDA numbers are from the top 100 enterprises.

2016 is the first year of the implementation of the 13th five-year Plan, the country's economic structure is increasingly optimized, and the supply-side structural reform is beginning to show results. In this context, China's pharmaceutical industry continues to maintain a steady progress and has achieved a good start to the "13th Five-Year Plan. Judging from the main economic indicators of the pharmaceutical industry in 2016, the growth rate of main business income and total profit has rebounded compared with 2015. Among the eight sub-industries, chemical raw material manufacturing, chemical preparation manufacturing, biopharmaceuticals manufacturing, and medical equipment and device manufacturing still maintained double-digit high-speed growth.

The 2016 "Top 100 Chinese Pharmaceutical Industry Enterprises" list was announced at the 34th National Pharmaceutical Industry Information Annual Conference. As a leading force in the pharmaceutical industry, the top 100 companies represent the highest level of development of China's pharmaceutical industry.

The scale of the industry continues to break through the entry threshold and climb steadily.

According to the statistics and analysis of the China Pharmaceutical Industry Information Center, the overall scale of the top 100 companies in 2016 continued its consistent rapid growth momentum. Calculated by comparable standards, the current top 100 companies achieved a total of 680.9 billion billion yuan in the main business income of the pharmaceutical industry, a year-on-year increase of 11.1 percent, which is 1.2 percentage points higher than the average level of my country's pharmaceutical industry (9.9 percent). It is worth noting that the minimum threshold for entering the top 100 list has also been further raised to 2.4 billion yuan in main business income (see Figure 1), and the average scale of the top 100 companies is expanding at a high speed.

The pattern of concentration is increasing day by day.

According to the top 100 data, the number of large enterprises with main business income exceeding 10 billion yuan in this list has increased to 19, an increase of 3 over the same period last year; 56 enterprises with main business income between 3 billion and 10 billion yuan, an increase of 2 over the same period last year; and 25 enterprises with main business income of less than 3 billion yuan, a decrease of 5 over the same period last year (see Figure 2). The increase in the number of medium and large-scale enterprises shows that the concentration trend of the top 100 enterprises is becoming more and more obvious, and the competition pattern of the strong is gradually clear, which is consistent with the macro development strategy of deepening the supply side structural reform and enhancing the industrial concentration required by the 13th five year plan.

Top 100 ranking tends to be stable, some enterprise seats change

The top ten companies in the top 100 list have always attracted much attention. Compared with the previous list, the ranking of the top seven enterprises tends to be constant, and the leading strength is highlighted (see Table 1). Yangzijiang Pharmaceutical Co., Ltd. has been at the top of the top 100 list for three consecutive years adhering to the spirit of "seeking progress and protecting all living beings". Jimin Credible Group jumped into the top 10 for the first time through active industrial mergers and acquisitions. Qilu Pharmaceutical has successfully upgraded its position by vigorously promoting its innovation-driven strategy. Its lung cancer treatment drug "Erek" has been successfully listed, breaking the monopoly pattern of foreign pharmaceutical giants in China and effectively ensuring its sustained and healthy development.

At the same time, due to the different product layout and corporate strategic directions, under the new environment and new needs, some companies have gained a lot in 2016, and a total of 39 companies have risen year-on-year. For example, Shanxi Zhendong Group, ranking up 31 places, thanks to the company's correct transformation, after the merger and reorganization of Kangyuan Pharmaceutical, to build a "Landy" calcium as the core of the OTC industry chain, a full coverage of the western terminal market, for the main business income rapid increase help. Under this and that, 39 companies also fell in their rankings year-on-year (see Table 2).

Actively face market changes, new enterprises are vibrant.

There are 5 new companies in the top 100 in this list, namely: Jilin Aodong Pharmaceutical Group Co., Ltd., Anstelai Pharmaceutical (China) Co., Ltd., Chengdu Kanghong Pharmaceutical Group Co., Ltd., and Heilongjiang Zhenbaodao Pharmaceutical Co., Ltd., Lepu (Beijing) Medical Device Co., Ltd. These enterprises achieved an average revenue growth rate of 18.7 per cent in 2016, significantly higher than the average level of the top 100 (11.1 per cent), reflecting the development of new enterprises to respond flexibly to market changes, consolidate internal management and actively seek innovative breakthroughs.

For example, Lepu Medical Devices adheres to the consistent diversified product line, focusing on advantageous products such as cardiovascular stents, expanding its business to pharmaceutical, hemodialysis, chronic disease management and other fields, especially the investment layout of in vitro diagnosis is impressive, becoming one of the only two medical device manufacturers on the top 100 list. In 2016, Jilin Aodong Pharmaceutical Co., Ltd. invested 1 billion billion yuan in the development and construction of high-tech pharmaceutical park, and introduced new anti-tumor drugs and national medical insurance catalogue varieties for production and listing, bringing new growth points for enterprise development.

East China "thriving" Other regions "multi-point flowering"

Looking at the top 100 lists, East China has always been a gathering place for outstanding pharmaceutical companies. In 2016, East China gathered the corporate headquarters of 45 top 100 companies, and the total main business income has exceeded 302.1 billion yuan, accounting for 44% of the total main business income of all listed companies. It can be called the "Dinghai Shenzhen" of China's pharmaceutical industry ". Since 2011, Shandong Province has occupied the first place in the number of top 100 enterprises. In 2016, a total of 14 enterprises were on the list, once again becoming the "leader" among all provinces. Jiangsu Province has made the most outstanding contribution to the main business income in East China, achieving a revenue of 111.4 billion yuan, and is still developing at a high speed of 9%. The future performance is worth looking forward.

High regional concentration can optimize regional resources and achieve mutually beneficial cooperation, but it also intensifies competition. In 2016, this phenomenon eased slightly, and some vibrant provinces, cities and regions began to emerge.

In the past five years, the distribution of the top 100 enterprises has gradually shifted from south to north and from coastal to inland. Judging from the number of enterprises on the list, there are two more in North China and four more in Northeast China (see Table 3). Judging from the scale of enterprises on the list, North China is catching up with East China at a growth rate far exceeding the average level, accounting for 25.6 percent of the total revenue of the top 100 enterprises from 21.1 percent in 2012 to 2016. As a representative province and city in North China, Beijing firmly occupies a leading position in the development of the pharmaceutical industry, with a huge volume and vitality. A total of 13 companies on the list are headquartered in Beijing, and their main business income reached 114 billion yuan, an increase of more than 18 billion yuan, and both total income and growth ranked first in all provinces, becoming a veritable "double crown king".

With the continuous promotion of the national strategy of "revitalizing the Northeast", the Northeast has become one of the most dynamic regions. In 2016, not only three new enterprises, Jilin Aodong, Anstelai (China) and Heilongjiang Zhenbaodao Pharmaceutical Co., Ltd., were added to the list, but also the growth rate of main business income was as high as 26.7, far ahead of other regions, and the trend of accumulation and development was initially apparent.

Vigorously carry forward the responsibility of enterprises to regain the spirit of craftsmen

Pharmaceutical is an important industry related to the health of the people, requiring pharmaceutical companies to uphold the "craftsman spirit", and constantly improve the quality of drugs, to ensure the supply of drugs. As representatives of Chinese pharmaceutical companies, the top 100 companies are duty-bound to practice the "craftsman spirit", promote the transformation and upgrading of my country's pharmaceutical industry, and promote my country's progress from a major pharmaceutical country to a pharmaceutical power.

Actively carry out consistency evaluation and improve the overall level of the industry

As the backbone of my country's pharmaceutical industry, the top 100 companies have always played an exemplary role in drug research and development and production quality control, and most of them actively respond to national policies with a benchmarking attitude. Since the implementation of the quality and efficacy consistency evaluation of generic drugs in 2016, the top 100 companies have carried out consistency evaluation tests in a stable and orderly manner with their strong economic strength and R & D capabilities, driving the entire industry to actively promote this work. According to the filing information of enterprise reference preparations issued by the China Institute for Food and Drug Control, by the end of 2016, there were more than 5000 filing data of reference preparations, about 30% of which came from the top 100 enterprises, with an average of 18 applications per enterprise participating in the filing. The top five applicants are Sinopharm Group, Pfizer, CSPC Holding Group, Guangzhou Pharmaceutical Group and Harbin Pharmaceutical Group. The application of reference preparations by enterprises can not only serve as a benchmark for drug quality and efficacy, gain a competitive advantage in future drug bidding and procurement, but also help enterprises to participate in international competition.

Accelerate the international layout, practice the "going out" strategy

When it comes to international layout, the top 100 are pioneers. Some enterprises have reached the international advanced level of pharmaceutical preparations to enter the overseas market, which not only opens up the market opportunities of China's pharmaceutical industry, but also helps to improve the overall pharmaceutical level of our country. Such development momentum is unprecedentedly high under today's policy dividend. As the world's largest pharmaceutical market, the United States is also the country with the most stringent drug approvals. Obtaining a drug approval from the US FDA means getting a "quasi-pass" in the international market ". In 2015, the top 100 companies received only 3 U.S. ANDA numbers, and in 2016, the number of numbers received significantly increased to 8, from Qilu Pharmaceuticals (5), Haizheng Pharmaceuticals (2) and Stone Pharmaceutical Group (1). In addition, the top 100 companies that are applying for US drug approval also include R & D giants such as Jiangsu Hengrui and Huahai Pharmaceutical. In the future, more companies will join the wave of "going out.

The international certification of Chinese pharmaceutical companies also had a good harvest in 2016. Top 100 enterprises have obtained 34 international certifications, accounting for more than 60% of the total number of domestic pharmaceutical enterprises. The certification scope includes WHO, the United States, the European Union, Japan and Australia, covering the global mainstream drug market. It is worth mentioning that the number of companies that have obtained multiple national or regional certifications at the same time is as high as 12, including 8 top 100 companies including Jiangsu Hengrui, Qilu Pharmaceutical, Haizheng Pharmaceutical, Huahai Pharmaceutical and Yangzijiang Pharmaceutical Group. Top 100 companies are leveraging the world market with excellent drug quality.

R & D innovation, accumulation, investment, return, virtuous circle

R & D innovation is an important part of the development of pharmaceutical companies, and it is also an essential advantage for the top 100 companies to base themselves on the front end of the industry. The top 100 enterprises uphold the concept of heavy research and development, heavy transformation, in various therapeutic fields have made some gains, is leading the attitude to continue to drive the overall level of the industry to improve.

Continuously increase R & D investment to promote industrial transformation and upgrading

In 2016, the top three companies in R & D investment, Zhengda Tianqing, Haizheng Pharmaceutical, and Jiangsu Hengrui, are all companies with high R & D investment over the years. Their R & D investment has exceeded 10%, and their ranking on the top 100 list has also continued. Climbing, main business income increased by 16.6 year-on-year, significantly higher than the average growth rate of the top 100 companies (11.1). The top ten companies with R & D investment have increased their main business income by 12.5 year-on-year, which is also higher than the average growth rate, indicating that these companies have entered the fast lane of a virtuous cycle of development, and R & D is becoming the most important driving force for industrial upgrading.

Remarkable achievements in innovation work and continuous enhancement of innovation ability

Judging from the application of new drugs by the top 100 enterprises, there were 821 applications for registration of innovative drugs in China in 2016, of which the top 100 accounted for more than 30%. It can be seen that in the increasingly strict environment of drug approval, the top 100 enterprises are still an important new force in innovation and research and development, which is also an important reason why they have become the top 100 enterprises. For example, Zhengda Tianqing Pharmaceutical Co., Ltd. has 27 new drug application acceptance numbers, breaking through the fourth situation for two consecutive years and taking the top spot in 2016; Qilu Pharmaceutical Co., Ltd. ranks in the top three with its stable R & D strength and resource integration ability; Haizheng Pharmaceutical Co., Ltd. is the dark horse in the application of new drugs, and its ranking has jumped to the top five, achieving a qualitative leap.

Judging from the clinical approval of enterprises in 2016, the top 100 enterprises also performed well. Among the 218 varieties that have obtained clinical approval, except for the varieties under research from R & D institutions, about 30% of the varieties come from the top 100 enterprises. Among them, there are 14 varieties of Zhengda Tianqing, involving 25 approval documents. Haizheng Pharmaceutical has 6 varieties and 13 approval documents. There are 5 varieties of Yangtze River, involving 13 approval documents. Qilu Pharmaceutical has 5 varieties and 12 approval documents.

Mergers and acquisitions continue to stage the rapid development of industrial agglomeration

In 2016, the total amount of mergers and acquisitions in the pharmaceutical market reached 99.5 billion billion yuan, and there were 240 mergers and acquisitions. The average amount of single mergers and acquisitions increased compared with last year. Mergers and acquisitions have become the most effective way to enhance industrial concentration. The mergers and acquisitions of the pharmaceutical industry account for half of the pharmaceutical industry. The top 100 companies are not only active participants in the industrial agglomeration process, but also the biggest beneficiaries. Through diversified M & A strategies such as resources, channels, and product lines, they promote the leap-forward development of enterprises.

M & A accelerates the integration of resources, and the trend of concentration is more obvious

Pharmaceutical companies will be the first to face the market changes of strong alliance and concentrated resources. China Resources Pharmaceuticals ranks among the top five in the top 100, with a compound annual growth rate of 14% in its main business income. M & A is an important means to maintain its strong growth. In 2016, CR Sanjiu completed the acquisition of Shenghuo Pharmaceutical for 1.89 billion yuan, and its ace product Xuesaitong Soft Capsule is expected to become a large variety with annual sales exceeding 1 billion yuan. At the same time, CR Pharmaceuticals has expanded its circulation channels and accelerated the process of nationwide coverage through its extended M & A strategy.

Also successful in expanding circulation channels through mergers and acquisitions is Renhe Group. After several years of slow growth, the growth rate exceeded 20% in 2016, and its ranking in the top 100 list rose to 74th and 15 places. Renhe Group has become a leading pharmaceutical e-commerce enterprise through the acquisition of pharmacy network and the "combination fist" of several local chain pharmacies. It is also one of the few pharmaceutical e-commerce enterprises that have made profits.

Overseas mergers and acquisitions are not abating, and the process of globalization is accelerating.

Although the policy of overseas mergers and acquisitions has become stricter, the medical and health sector has become one of the hottest areas. Shanghai Pharmaceutical Group's main business income growth rate in 2016 is as high as 16.9. One of the driving forces is to spend 1 billion yuan to acquire a 60% stake in Vitaco, an Australian health care company. This is Shanghai Pharmaceutical Group's first involvement in the field of health products, and it is also another major move by Chinese pharmaceutical companies to acquire overseas companies. It is expected that the difficulty of overseas mergers and acquisitions will further increase in 2017, but pharmaceutical companies and private capital still have great enthusiasm to meet the challenge.

Marketing reform is imperative to actively touch the net to improve efficiency

Marketing is the core means for pharmaceutical companies to establish a brand. With the continuous deepening of pharmaceutical circulation reforms such as the "two-invoice system", the continuous updating of hospital bidding plans, the continuous popularization of the concept of "Internet medical care", and the continuous adjustment of the pharmaceutical industry structure, pharmaceutical companies are facing a more complete, mature, and high Demand market. The top 100 companies use their own strengths, actively seek change, break through the traditional marketing model, use more flexible and professional business ideas, and still move forward in the new economic environment.

The "two-vote system" policy favors the self-employed model and the circulation leader.

According to the statistics of the top 100 enterprises and the Ministry of Commerce, nearly 20 (or their subsidiaries) of the top 100 enterprises in the pharmaceutical industry in 2016 are also the top 100 enterprises in the pharmaceutical industry, such as Sinopharm Holdings, China Resources Pharmaceutical and Shanghai Pharmaceutical. In 2016, not only did their main business income grow by 19.7, 17.4 and 16.9 respectively, far higher than the industry average of 9.9, but also ranked in the top three in the domestic pharmaceutical circulation market share. The implementation of the "two-vote system" is beneficial to these leading pharmaceutical circulation enterprises, and their strong ability to resist pressure makes their advantages more prominent, and the broad circulation channels can further promote the sales of these enterprises' own products and improve marketing efficiency. to promote the pharmaceutical industry and pharmaceutical commerce to go hand in hand and develop healthily.

For pharmaceutical companies that adopt a self-operated model and focus on retail channels, the "two-invoice system" has a relatively limited impact on them. For example, Beijing Tongrentang Pharmaceutical Co., Ltd. relies on its own time-honored brand and a strong self-operated system to make its main business in 2016. The year-on-year growth rate remained at a relatively high level. Through its own marketing team, the company has effectively avoided the pressure of the "two-vote system" and actively used retail channels to achieve a 15.3 per cent revenue growth rate. The self-management model is not mature enough, mainly rely on the traditional multi-level agent sales of pharmaceutical industry enterprises, will face greater marketing model transformation pressure.

Innovative marketing injects vitality and brings more performance growth.

As one of the key transformation directions, marketing innovation has also been favored by some companies on the list. In order to better adapt to changes in the external market, some companies have actively used channel resources, deeply tapped market demand, flexibly developed business models, and achieved significant performance growth. For example, with the help of its new marketing model, Kangmei Pharmaceuticals has adopted original Chinese medicine prescription sales, terminal experience marketing, physical health preservation and other ways to effectively stimulate medical health consumption and achieve a breakthrough in revenue growth, with a year-on-year growth rate of 17.7 in 2016. At the same time, Kangmei Pharmaceutical also took the lead in launching a "smart pharmacy" in Guangdong, combining Internet technology to realize the full network of diagnosis and treatment, service and distribution, and further deepen the layout of the marketing network. As a representative enterprise of the big health industry, Baiyunshan, a deep-rooted marketing company, also made frequent efforts in the layout of its sales network last year. Its subordinate enterprises cooperated with more than 90 Guangdong medical institutions in hospital service extension projects, actively promoted the integration of marketing and logistics, and received a satisfactory report card with a year-on-year growth rate of 24.9 in 2016.

(This article is provided by China Medical Information Center)