Pinning hopes on pharma
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Total output of the country's pharmaceutical industry is expected to top 3 trillion yuan ($460.44 billion) in 2015, with an annual growth rate of 20 percent, according to the 12th Five-Year Plan for the industry, which will be published before June, a source close to the matter said on Monday.
Yu Mingde, president of the Chinese Pharmaceutical Enterprises Association, who took part in drafting the plan, on Monday told the Global Times that raising the industry's concentration rate is an important goal of the Five-Year Plan, which means that market share of top producers in the sector would be increased significantly.
In the pharmaceutical distribution sector, the country aims to promote the creation of nationwide pharmaceutical conglomerates, with annual sales above 100 billion yuan ($15.35 billion), and some 20 regional pharmaceutical distribution enterprises with annual sales exceeding 10 billion yuan.
For the pharmaceutical manufacturing sector, the plan urges that the top 100 companies in terms of sales volume should account for 40 percent of the total market share in 2015.
Turning these plans into reality may not be so easy.
"It is not that easy (for the top 100 companies to have a 40 percent market share) to achieve, since the industry is highly fragmented," said Guo Fanli, a pharmaceutical industry analyst with the CIC Industry Research Center.
He added that government policies designed to control drug prices would hinder the process of raising the concentration rate in the industry.
Currently there are some 4,800 drug producers in the country, and 70 to 80 percent of them are small and medium sized companies, said Guo.
And according to Yu, the biomedical sector will be a key strategic sector in the pharmaceutical industry during the 12th Five-Year Plan period, which may mean huge opportunities for drug producers.
"The country has put an emphasis on the biomedical sector, which means that preferential policies will be drafted to support the move. This would be a great opportunity for the whole industry," the R&D-based Pharmaceutical Association Committee, an organization that represents 37 multinational pharmaceutical manufacturers, told the Global Times via an e-mail statement on Monday.
Yu also said that quality control would be a key area of focus for the industry in the coming five years.
New quality standards, specifically the practices now used in the US, Japan and Europe, will be the direction for the industry in the future, Yu said.
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