“Since 2010, some relatively large opportunities for elimination and integration of pharmaceutical manufacturing have emerged.” Deputy General Manager of Fosun Pharma, Qiao Zhicheng, Dong Qiao, said in an interview recently, “The next three to four years are important for industry consolidation.” During the window period, the degree of concentration in the pharmaceutical industry will increase significantly."

According to informed sources, the "12th Five-Year Plan" for biomedicine that is expected to be launched soon will clearly encourage the pharmaceutical industry to undergo mergers and reorganizations and accelerate the pace of integration.

In fact, after the “Twelfth Five-Year Plan” of the national pharmaceutical distribution industry was introduced in early May of last year, mergers and reorganizations of the pharmaceutical circulation industry have become very popular. Unlike mergers and reorganizations that are booming in the medical and pharmaceutical industry, the increasing concentration of the pharmaceutical industry is also increasingly evident, and the pattern of industry development is becoming clearer and clearer. Relevant leading companies are already gearing up for the merger and acquisition to become an important part of their long-term strategic planning.

The Opportunity of Integration <br><br><br><br><br><br><br><br><br><br><br><br><br><br><br><br><br><br><br><br><br><br><br><br><br><br><br><br><br><br><br><br><br><br><br> Shanghai XinYi Pharmaceutical Factory Located in the Jinqiao area of ​​Pudong, Shanghai, Shanghai XinYi Pharmaceutical Factory is a long established pharmaceutical company. Gu Haoliang, general manager of the company, said that since the beginning of this year, along with the implementation of the newly revised drug GMP, plus the emphasis on low prices and constant price cuts for some drugs in basic drug bidding in various provinces, pharmaceutical companies must adopt structural adjustments to related products. In order to avoid the continuous decline of profits, the pressure on companies to survive is growing. At the same time, the opportunities for mergers and acquisitions in the industry continue to emerge, and it is an inevitable trend to promote mergers and reorganizations, and the pharmaceutical industry will be further concentrated.

At present, it is an indisputable fact that the profit growth of the pharmaceutical manufacturing industry has slowed down. According to Yu Mingde, President of the China Association of Pharmaceutical Enterprise Management, “The momentum of growth in sales revenue for the pharmaceutical industry this year is still maintained, but profit growth slows down to a certain degree. The annual growth rate may be less than 20%.” The overall development of the industry "Deceleration" will provide a favorable opportunity for leading enterprises to implement mergers and reorganizations.

Gu Haoliang said that it is now the best time to look for acquisition targets. "If you wait until the development of the pharmaceutical industry improves, then the purchase price will go up."

As one of the important components in Shanghai's pharmaceutical industry chain, Xinyi is one of the most industrialized products in China's chemical pharmaceutical industry. It has ten industrial companies, four sales companies, and three municipal R&D centers. With a total asset of 1.82 billion yuan, the annual sales volume will reach 2 billion yuan.

“We are watching.” Gu Haoliang seems reluctant to talk about what are the objects of the acquisition.

The integration of the pharmaceutical industry is also in line with the development of the world's pharmaceutical industry. According to Gu Haoliang, the integration of the US pharmaceutical industry took 80 years. In the early 1900s, the United States had thousands of pharmaceutical companies, and by 1980 it had consolidated into dozens. "The integration of the Chinese pharmaceutical industry does not take so long." He judged.

Of course, the increase in the degree of concentration in the pharmaceutical industry is not an overnight event. Gu Haoliang pointed out that there are also many difficulties in the integration of the pharmaceutical industry. How to deal with existing assets, how to achieve synergies between the acquired company and the original company, and whether complementary advantages can be achieved are all issues worth pondering.

"In the 12th Five-Year Plan period, the degree of concentration in the pharmaceutical industry will increase significantly. Under this situation, capable companies should seize the opportunity." In Qiao Zhicheng's view, many segments of the pharmaceutical industry will appear to be invisible in the future. "Champions", there are more investment opportunities in these areas.

It can be said that in the acquisition and merger of the pharmaceutical industry, Fosun Pharma is a "new force." Since its listing in 1998, M&A has always been one of the important development methods for Fosun Pharma. Through mergers and reorganizations, the company's assets have grown from 600 million yuan in 1998 to 16.8 billion yuan in 2010.

Mergers and acquisitions policy continued to force <br> <br> pharmaceutical industry has also been supported by the national industrial policy.

As early as November 2010, the Ministry of Industry and Information Technology and other three departments issued the “Guiding Opinions on Accelerating the Structural Adjustment of the Pharmaceutical Industry”, stating clearly that it will focus on supporting innovation and technology upgrading, promote mergers and acquisitions, and increase industry concentration.

In early July of this year, Vice Minister of Ministry of Industry and Information Technology Su Bo once again stressed that China will promote the merger and reorganization of eight key industries such as medicine. Su Bo said that during the “12th Five-Year Plan” period, China will focus on the eight industries of autos, steel, cement, machinery manufacturing, electrolytic aluminum, rare earth, electronic information, and pharmaceuticals, and promote the combination of powerful companies, cross-regional mergers and acquisitions, and overseas mergers and acquisitions. Cooperate with investment to increase industrial concentration.

Minsheng Securities industry researcher Li Ping Zhu believes that the continuous advancement of the new medical reform will give pharmaceutical companies excellent opportunities for mergers and acquisitions. Specifically, it will have a major impact on the concentration of general medicine, pharmaceutical commerce, and new specialty drug manufacturing companies. He pointed out that “the large-scale pharmaceutical companies, chemical innovation companies, modern Chinese medicine companies, and biopharmaceutical companies with core technologies can all benefit from the concentrated trend in the industry.”

Dr. Rong Rongfu, senior researcher of Sinopharm Holding, reminded that we must pay attention to the integration situation on another level in China since the beginning of this year. “The integration of foreign-funded pharmaceutical companies and Chinese domestic pharmaceutical companies has frequently taken place. For example, Synox Pharmaceuticals has established joint ventures with Merck, Hisun Pharmaceutical and Pfizer, etc. This reorganization has two meanings: First, for local pharmaceutical companies More and better generic drugs can be obtained more quickly; secondly, foreign companies can infiltrate sales channels into second-tier and third-tier cities. This strong alliance will also lead to more intense competition in China's pharmaceutical industry."

A pharmaceutical industry consultant pointed out that if the Chinese national pharmaceutical industry wants to create a world-class enterprise and it wants to make a difference in the global pharmaceutical market, it must vigorously promote mergers and acquisitions among enterprises and encourage excellent pharmaceutical companies to build a strong presence in the local market. Market foundation and join global competition.