Article Download – Forging New Relationships in China’s Consolidating Distribution Industry

Slightly more than a year ago, in August 2010, China's Ministry of Commerce unveiled a draft plan designed to help effect a major restructuring of the country's drug distribution system. The goal, according to the plan's authors, was to reduce what until recently had been some 16,500 pharmaceutical wholesalers and 140,000 retailers to no more than two multi-regional large distribution companies and less than two-dozen regional large distributors. Improved efficiencies and economies of scale were forecast. The elimination of secondary distribution markets was likewise anticipated.

While not the first time such lofty goals were elevated, a series of mergers and acquisitions among China's distribution companies began to reshape the landscape even before this plan was finalized. In January 2011, for example, Shanghai Pharmaceutical finalized its acquisition of China Health System, Ltd, following a series of smaller acquisitions of other distributors across the nation. Sinopharm, likewise, carried out a series of deals that have considerably broadened its national sales network.

This article from IMS discusses the impacts and consequences to be felt on the industry. Click here to download it now to find out more!

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