“The days of retail pharmacies have become harder and harder.” Yang Liang (a pseudonym) chairman of a private pharmaceutical chain company in Zhejiang dumped hardships on “Zhejiang Business” reporters. In recent years, pharmacy rents and labor costs have risen repeatedly, and the pharmaceutical retail market has been competitive. Intensified, profits are diluted again, and there is also a strong hospital pharmacy. "It is better for companies to seek more diversified development than to make health care reform more effective."

Turning profit down and turning to Yang Liang's difficulties is not a single case.

In 2008, Neptune Star, which had just been listed on the New York Stock Exchange, was eager to make crazy acquisitions. It successively acquired 68 chain pharmacies owned by Ningbo New Century Pharmaceuticals and 18 chain stores of Dongguan Huirentang Pharmaceuticals, and had also tried to acquire Hangzhou Wulin pharmacy. At present, Neptune has a total of 2,927 pharmacies across the country, which are located in 3 municipalities such as Shanghai and more than 70 cities in 12 provinces. But on the Other hand, the annual net profit of Neptune’s stars has declined in a straight line over the past few years: from approximately 193 million U.S. dollars in 2008 to 0.17 billion U.S. dollars in 2010, it began to rebound slightly in 2011, with a net profit of 0.18 for the first three quarters. One hundred million U.S. dollars. “This year, the company will focus on strengthening. In the past, when the business environment was good, we would have to hurry up. When the business environment is not good, we must emphasize efficiency.” said Zhang Fuxiang, CEO of Neptune Star.

In addition, Sinopharm Holdings and Shanghai Pharmaceuticals, which are “not bad”, also intend to shrink the retail front.

At the end of 2011, Yang Liu, manager of Sinopharm's Investor Relations Department, stated at an internal meeting that Sinopharm Group's first-phase expansion of mergers and acquisitions has been completed. In 2012, the company will focus on integration to improve its operating efficiency and profitability as its top priority. Sinopharm Co., Ltd. adjusts this way, or it can be seen from its financial report: Sinopharm's after-tax profit growth rate in 2010 was approximately 33.5%, and in 2011 it dropped to 29.49%.

Lu Ming, chairman of Shanghai Pharmaceuticals, said that in the future, Shanghai Pharmaceuticals will focus on mergers and acquisitions in the industrial sector. He hopes to use this to increase the core value of the company. As the only private enterprise in the top three of pharmaceutical retail, Hubei Jiuzhou Tongmai Group, after obtaining sufficient funds for listing, has only started Henan Xinglin Pharmacy in the field of pharmaceutical retailing, and other mergers and acquisitions also mostly produce pharmaceuticals.

"Many retail drug company mergers and acquisitions do not take into account capital utilization. Individual companies even rely on strong capital to buy real money at a price several times higher than the average price-earnings ratio, allowing other companies to cash out easily." Once on Wall Street Wang Jin, who has been investing in the health industry for eight years, said that the increase in sales generated by buying sales channels at high prices is actually a waste of capital.

However, “The 12th Five-Year Plan of the National Pharmaceutical Distribution Industry Outline” requires that in the next five years, the annual sales of pharmaceutical retail chain top 100 companies account for more than 60% of the total sales volume of drug retailers; the proportion of chain drugstores in all retail outlets will increase. 2/3 or more. On the one hand, the shrinking of the front line under the shrinking profit margins, but on the other hand, is based on the industry plan of “sales” and “number of stores”. Many private retail drug companies have begun to place their hopes on policy adjustments.

It is difficult to compete with the hospital pharmacy retail pharmacies to accept the joint supervision of the Department of Health, the Food and Drug Administration, the Bureau of Industry and Commerce, and the Bureau of Quality Supervision and other departments, and the policy impact will be relatively increased. “But among the many policies, the new medical reform has the greatest impact on the industry,” said Yang Liang.

The implementation of the new medical reform has been implemented for three years, and the investment of 850 billion yuan has achieved initial success. However, the "medical independence" that has attracted the attention of the pharmaceutical retail industry has remained "moderate" in this reform.

The new medical reform mentioned that “through the implementation of differential drug purchase and sales price increases, the establishment of drug service fees and other ways to gradually reform or cancel the drug addition policy, while taking appropriate adjustments in medical service prices, increase government investment, reform payment measures and other measures to improve Public hospital compensation mechanism."

“You can also say that hospitals do not have medicines to provide medicine because there is a compensation mechanism,” Yang Liang said. “The policy also stipulates that as long as the resident doctors are on duty, retail pharmacies can sell prescription drugs by prescription, and the competition seems very fair. However, the key to the problem is that the probability of out-of-hospital prescriptions is quite low."

Monopoly will inevitably bring huge profits. “Hospitals cannot voluntarily forego vested interests and can only rely on administrative forces to further deepen, and the central government has already made clear “four separate” medical system reforms,” said Guo Taihong, director of the Hangzhou Food and Drug Administration.

Many people in the industry believe that this year's new medical reform will step into the "deep water area." At the beginning of the year, Chinese Minister of Health Chen Hao, at the “National Health Work Conference 2012”, referred to the “pay-by-item” medical insurance payment method and the “drug-based medical care” mechanism as “two major cancers” and stated in the “twelve During the "V" period, the "drug-based medicine" will be completely cancelled and the compensation mechanism will be streamlined.

"The United States is completely separate from the medical and the hospital does not have a pharmacy." Wang Jin said that patients are taking prescriptions to pharmacies to get medicines. The price is very cheap. Wal-Mart pharmacies once launched a sales strategy of "a month's purchase of medicine for 10 months." It is very good, but when it arrives in China, it will not work. The key is the system.

"Full market competition will inevitably bring about equalization and decline of profits, but the profits of the Chinese pharmaceutical market will decline because of the imperfect competition in the market. The "pharmaceutics do not divide" makes the hospital pharmacy to take the lead in drug retail sales." Guo Taihong It is also believed that only through pharmaceutical reforms and breaking the unfair competition in the pharmaceutical retail market will be conducive to the development of the industry and ultimately benefit consumers.

In addition, although the new medical reform has not touched the fundamentals of “taking drugs to support medical treatment”, it has completed more than 95% coverage of medical insurance, which has expanded the entire pharmaceutical retail market to a certain extent, but the grass-roots medical institutions that are spreading day by day are reimbursed as “outpatients”. With the advantages of zero sales of essential drugs, it also diverted a lot of market share.

“The medical insurance fixed point will then become an important factor in the profitability of chain pharmacies.” Liu Lei, chairman of Jiuzhou Grand Pharmacy said, but if the pharmacy name changes are involved in mergers and acquisitions, according to regulations, he must re-apply for medical insurance fixed-point qualifications, “a complex administrative approval process It also greatly influences the enthusiasm of M&As."

Get rid of the meager profit situation The domestic pharmaceutical retail industry is not only facing the constraints of the domestic system and other factors, it is difficult to survive, and it also faces the attack of foreign pharmacies. “With the entry of foreign pharmacies, it may become a situation where Chinese and foreign players “clash” in the future. Whoever is truly a strong player will be able to see what happens.” Wang Jin said, instead of staring at sales, it’s better to “do better”. ".

At the end of 2002, Medicine Shoppe, the fifth largest pharmaceutical chain company in the United States, joined forces with Neptune to become the first foreign pharmaceutical retail brand to enter China in a franchise fashion.

Many places in the United States that have settled in China still follow the operating methods of drugstores in the United States, such as the specialization of resident doctors and the provision of personalized services. According to Wang Jin, American pharmacies doctors can understand consumer history, drug history, and allergy history through a unified information platform. After entering the Chinese market, Maxim built a membership drug system platform, regularly track patient medication status, and provide professional advice to ensure the stability of the purchasing team. The domestic pharmaceutical industry lacks similar platforms and drug management.

When he entered China in 2004, Yuri Pharmaceutical Co., Ltd. established Yong Yu Xinxing to focus on pharmaceutical distribution and logistics. However, he eventually became the second largest drug distributor in the country, Cardinal Health Co. (Cartier Health Group) was included in the majesty, which also used to enter China. “The mature business model and strong logistics system of foreign retail pharmacies also make it difficult for most local retail pharmacies to compete.” said Wang Jin. Many people in the industry believe that Yongyu’s emerging frustration has been resisted by “assumed-with-inclusion”, but because of this, Yongyu Emerging has guaranteed high-quality logistics systems such as temperature control during transportation, real-time tracking of drug data, and pharmaceuticals 24 hours delivery, many local pharmaceutical companies compete to follow suit. "But the key to the problem is not technology, but service and supervision." Yang Liang said.

Qidu Securities analyst Hu Dejun believes that after the pharmaceutical circulation industry has undergone successive acquisitions, it will dig into the third terminal market in the future and seek cooperation with basic medical institutions. This model was adopted when Mi Shinin entered China. It once made the sales of Maxim's prescription drugs account for 90% of the total pharmaceutical sales. Or, if Zhenzheng Medicine builds a strong logistics distribution system, it uses the basic medical institutions that deliver goods to the terminal to reach the coverage of the sales area, so as to occupy market shares other than big cities.