Pharma China Forum - The Pharma Distribution Landscape and Channel Strategies in China
2/20/2009
Event: Pharma China Forum - The Pharma Distribution Landscape and Channel Strategies in China
Date: 1:00 PM to 5:00 PM, March 31, 2009
Venue: Okura Garden Hotel, Shanghai, China
The event is hosted by Pharma China, and co-sponsored by ZS Associates and Zuellig Pharma China.
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The Chinese pharmaceutical distribution sector experienced a relatively good year in 2008 with total distributor sales of Western medicine products up 13.9% reaching CNY 138.6 billion in the first half of 2008.
However, the sector continued to be highly fragmented with around 8,000 players and its average net profitability and gross profit margin remained very low. Consolidation of the sector persisted in 2008 with growing number of small distributors being forced out of business changing market environments. The largest pharmaceutical distributors generally fared better as mid-year reports of publicly-listed Chinese pharmaceutical distribution companies showed that most of them experienced fast profit growth in the first half of last year.
The looming healthcare reform, under which rural and community healthcare will be heavily invested, is expected to further change the landscape of the Chinese pharmaceutical distribution sector and accelerate ongoing consolidation. Large pharmaceutical distributors possessing efficient national and regional distribution capabilities will be necessary to facilitate the government’s ambitious plan for universal basic healthcare coverage to all.
While healthcare reform is expected to boost demands for healthcare in rural areas and community healthcare institutions, it is also likely to bump up drug distribution costs at the same time due to the need to cover vast and less populated areas. Local analysts therefore believe that pharmaceutical distributors are unlikely to benefit much from the rising drug sales in rural areas and community healthcare network. However, intensifying consolidation in the pharmaceutical distribution sector may help improve the performance and operating efficiency of large distributors.
Through government policies and/or competitive forces, the pharmaceutical distributor channel in China will become more streamlined over time, improving the overall efficiency of the healthcare delivery system in China.
Market conditions in China will continue to evolve, creating new opportunities for leveraging the distributor channel. Pharmaceutical companies will miss growth opportunities if distributors are treated as customers and if suppliers fail to set performance expectations. By adopting a disciplined channel management process and improving commercial team competencies, pharmaceutical suppliers can build high-performing distributor channels that can help drive bottom line results.
This Pharma China Forum event in English is hosted by Pharma China and jointly sponsored by two leading specialists in the distribution sector, ZS Associates and Zuellig Pharma. The event seeks to draw attention to current trends and challenges in the sector and improve understanding of effective distribution solutions and channel strategies. Three top experts will present review of contemporary trends and challenges in Chinese pharma, synopsis of changing landscape in the country’s pharmaceutical distribution sector and examination of distribution channel strategies. The presentation will be followed by an interactive panel discussion with presenters and other leading experts in the field.