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Production in China's Medicine Industry Reached 113.4 Billion RMB, a Year on Year Increase of 20.7%

Posted on: Friday, 25 August 2006, 03:01 CDT

Research and Markets (http://www.researchandmarkets.com/reports/c41063) has announced the addition of China Pharmaceutical Industry Report (Merger & Reorganization), 2006 to their offering.

This report described the investment policy and environment of China's pharmaceutical industry. It also detailed analyzed the competitiveness of China's pharmaceutical enterprises according to different regions. In the end, it anatomizes the cases of merger and reorganization of pharmaceutical enterprises in China.

1. Status quo of China's pharmaceutical enterprises

2006, as the first year of Eleventh Five Year Plan, maintains a good momentum of growth in, the production and distribution of China's medicine industry in the first quarter of 2006. With a better situation of export, the medicine production and export keeps on a rapid growth.

The medicine industry reaches a total production value of 113.4 billion RMB, with a YoY increase of 20.7%. The production-distribution rate is 93.6%, with a YoY decrease of 0.3%, 3.7% lower comparing with national industry average level. The production value of chemistry raw material medicine reaches 356,000 ton, increasing by 28.6%; 214,000 ton of Chinese patent medicine, increasing by 24.6%.

Among these, the total production value of Chemical raw material medicine and biological and biochemical pharmaceutical reaches 27.8 and 8.68 billion RMB separately, with a YoY increase of 23.4% and 27.8%, keeping a relatively rapid growth. However, that of the chemical pharmaceutical and Chinese patent medicine is 344 and 252 billion RBM separately, with a YoY increase of 15.6% and 16.9%, a relatively lower increase speed than the average level of the industry.

The medicine industry has completed an export delivery of 13.8 billion RMB, with a YoY increase of 29.5%, and the amplitude of increase raises 9.7% YoY.

Among these, Chinese patent medicine reaches an export delivery of 603 million RMB, with an increase of 82.8%, becoming the eye-catching in the industry recently. The export delivery of chemical raw material medicine is 6.97 billion RMB, with an increase of 24.3%; while that of biological and biochemical pharmaceutical and chemical pharmaceutical is 1.42 and 1.05 billion RMB separately, increasing by 37.8% and 10.3%; while that of the sliced Chinese herbal medicine is 170 million RMB, descending by 3%.

However, there still exist some problems in China's medicine enterprises currently.

Although the production and export of China's medicine keeps high speed growth, the profits increase speed falls dramatically. The medicine industry carries out a profit total amount of 7.89 billion RMB, with a YoY increase of only 6.3%, while increase speed falls to the bottom of history, less than 1/3 of national industry profit level, listing penultimate in the 12 greatest industries in the whole country. Among these, the profit total amount of the chemical raw material medicine reached 1.54 billion RMB, increasing by 14.8%;that of Chinese patent medicine and the biology and biochemical pharmaceutical was 1.84 and 0.72 billion RMB separately, increasing by 0.1% and 3.2%; While the chemical pharmaceutical 2.63 billion RMB, descending by 6.3%.

The reduction of profit of the China's chemical pharmaceutical, Chinese patent medicine and the biology and biochemical pharmaceutical is the main reason for the drop of profit of China's medicine industry. Enterprises under deficit reach 29.8%, rising by 10.3 percentages. Deficiency sum of these enterprises is 1.38 billion dollars, increasing by 30.8%. Enterprises under deficit are increasing and their deficiency sums are extending. There are some reasons for that. Our research center holds such an opinion that there are three main reasons:

Firstly, China's medicine enterprises pump too little capital in research and development. They invest only 2% of their income on research and development each year, much lower than foreign medicine enterprises, which pump 15% of their revenue in research and development. As the budget of research development is so little, that obvious shortage comes out in the development of these enterprises. Therefore, 95% of western medicine in China's western medicine market is copied. And this situation also exists in China's patent medicine market. These result in supply exceeding demand in China's pharmaceutical market and the situation of repeating structuring in a low level.

Secondly, China's medicine enterprises have problems of small scale, large quantity and low productivity. In 1998, there were totally 7500 medicine business enterprises in China. To the year 2002, there still existed 6600. In 2005, there were about 4000 medicine production enterprises in China. Most of them were small scaled, with low performance, not comparable to the big enterprises abroad. Large-scale, high-tech enterprises were less than 40.

Thirdly, pharmaceutical quality should be strictly controlled. The large quantity of pharmaceutical enterprises and the low productivity result in the poor quality of products, and make it hard to prohibit fake drug and inferior drug. In 2004, the national pharmaceutical supervision department proscribed that the drug factories that can not meet the standard of GMP is prohibited to produce drugs. But so far, the medicine harm still occurs occasionally.

Topics Covered

1 The status quo of the development of China's medicine industry

2 Analysis of subsection market of China's medicine manufacturing

3 Investment in China from foreign pharmaceutical enterprises

4 Analysis of competitiveness of the pharmaceutical industry in China's Bohai circle economic region

5 Analysis of competitiveness of the pharmaceutical industry in China's Yangtze river delta economic area

6 Analysis of competitiveness of the pharmaceutical industry in China's Other areas

7 Case study of merger and reorganization of Pharmaceutical enterprise in China

8 Conclusion of merger and reorganization of China's Pharmaceutical industry

Companies Mentioned Include:

- Bausch - Beijing Tongrentang - GloxoSmithKling - Guangzhou Baiyunshan pharmaceutical Co.,Ltd. - Haiwang Biology - Hayao Group - Hongzhou MSD pharmaceutical Co.Ltd. - Huadong pharmaceutical - Jiangsu Henrui Medicine Co.,Ltd. - Jiangsu Yangtze river pharmaceutical Group - Jiangxi Huiren Group - Johnson & Johnson - Lukang pharmaceutical - Nanjin pharmaceutical - North China Pharmaceutical - Pfizer - Roche - Roche Shanghai - Shandong Xinhua Pharmaceutical Company Ltd. - Shanghai Leiyunshang Pharmaceutical Company Ltd. - Shanghai pharmaceutical - Shijiazhuang Phrmaceutical Ltd. - Shuanghe Pharmaceutical - Taiji Group - Tientsin Jinyao Group - Tientsin Zhongxin pharmaceutical Company Ltd. - Wyeth - Xian-Jassen Pharmaceutical Ltd. - Zhengdaqingchunbao Pharmaceutical Co.,Ltd.

For more information visit http://www.researchandmarkets.com/reports/c41063

Source: Business Wire

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