Three-fold transformation of raw pharmaceutical companies

As each industry develops to a certain degree, it must seek transformation in order to adapt to market demands. China's raw material companies are standing at such a transitional point. where is the road? Where is the direction of future development?

More and more fierce market competition, more and more heavy environmental pressure, more and more severe anti-dumping situation, lower and lower net interest rate... so many unfavorable factors are superimposed together, which constitutes a pressure on China's bulk drug manufacturers. This is especially true for bulk API companies or the last straw that is passive or active on the road to transformation and upgrading. At the beginning of September, Huahai Pharmaceutical's “Development of Formulations for Internationalized Development Capability Project” was listed in the National Strategic Emerging Industry Development Special Funding Program and received 80 million yuan of state grant funds, which made latecomers even more envious. Transformation has become the choice that raw material companies in China have to make. Only in this destined transitional road, there are three crossings, which is called "threefold doors."

The first priority is the direction of transformation. Where to turn, and the transformation of the enterprise after the transformation is the first consideration, and it is also the key to its success. The direction of transformation depends on existing factors such as the strength of a company, R&D and innovation capabilities, and the ability to deploy resources, as well as the courage of decision makers and corporate development strategies. Taking the old drug material bases and the three companies in Zhejiang Province known as the “Three Seas” as examples, the transition path of the “Three Seas” is different: Huahai Pharmaceuticals’ owners attacked the export of pharmaceutical preparations, and Hisun Pharmaceutical joined forces with foreign funds to seek innovative drugs. Haixiang Pharmaceuticals, which was in the early stage of transformation, chose to break through from OEM. The direction is the life and death of pharmaceutical companies.

Markets and channels are the second priority. Pharmaceutical companies have transformed themselves and have shown a tendency of centralization and swarming. The whole industry chain, from raw material medicines to "raw material + self-produced preparations," is the instinctive choice of most raw pharmaceutical companies. This will inevitably lead to the homogenization of preparation products and a high degree of saturation in the domestic market. To turn to the international market and demand from the international market, there will be challenges such as unfamiliarity with international market rules and international competition and domesticization. Affected by the European debt crisis, the international market will continue to slump At the moment, the situation is even more severe. For pharmaceutical companies in the direction of selected pharmaceutical preparations, the domestic market is generally faced with problems such as weak marketing power, restricted channel construction by agents, brand influence and low doctor referral rate, and high risk of bad debts; in the international market, China The preparation product has a poor image, and it is difficult to build a self-built channel. Setting up a factory abroad has a high production cost. Cooperation with multinational companies is easily controlled by others. Whether it can adapt to the market and successfully build a marketing system to stand out from the formulation of the Red Sea is the second test of transformation.

Product quality is the third priority. It does not mean that the quality of domestic pharmaceutical products is poor. It is indeed a strong awareness of foreign consumers' rights and interests. Regulating the market tends to use punitive terms to protect patients, impose severe penalties on products and other products, and the occurrence of quality responsibility accidents may cause companies to bankrupt. In 2007, the United States Merck Company paid up to US$4.85 billion in compensation for the adverse effects of the analgesic drug “Vioxx”, which was enough to cause domestic drug companies that have been plagued with quality problems to shudder and quit. The quality issue is the biggest hidden danger and risk in the internationalization of the formulation of raw material drug companies in China. In order to eliminate this hidden danger and risk, it is not possible to rely on raw material companies alone, but more on this industry and everything related to this industry.

"Three-fold doors", the door-to-door relationship is alive and dead. Undoubtedly, in this contest for the transformation and upgrading of raw material companies in China, there are laughter and final winners, and there must be losers who do not reach the end. To cross any threshold, it depends not only on the company's own efforts and good fortune, but also on the gradual improvement of the development environment and policy support, and strong support from all levels of departments.

Undoubtedly, in this contest for the transformation and upgrading of raw material companies in China, there are laughter and final winners, and there must be losers who do not reach the end. To cross any threshold, it depends not only on the company's own efforts and good fortune, but also on the gradual improvement of the development environment and policy support, and strong support from all levels of departments.