"Twelfth Five-Year Plan" Medical Industry Merger and Reorganization Accelerated Implementation of Concern

“Adhering to marketization is the biggest highlight of this document,” Yu Mingde, president of the China Medical Enterprise Management Association, which participated in the drafting of the “planning” and the discussion and revision of opinions, told the newspaper yesterday that despite several changes, it insisted on market-based resource allocation. The guiding ideology of the company is clear from the very beginning. "We must use more open and more market-compelling means to promote the development of the industry."

Yu Mingde disclosed to reporters that among the 8 key industry tasks written in the "Plan", "industry layout planning, entry exit mechanism" and "industry structure adjustment, perfect product distribution system" respectively emphasized the scale of the industry, intensive The goal of globalization and internationalization. “And this point is exactly the same as the 12th Five-Year Plan for Medical Industry led by the Ministry of Industry and Information Technology,” he said.

According to the contents of the "Plan", by 2015, the country will "form 1 to 3 large-scale national medical and commercial groups with annual sales exceeding 100 billion yuan, and 20 regional distribution companies with annual sales exceeding 10 billion yuan; The annual sales of the top 100 wholesale enterprises accounted for more than 85% of the total wholesale sales of goods. The annual sales of the top 100 retail chain retailers accounted for more than 70% of the total retail sales of the goods; the proportion of chain stores in all retail stores increased to two-thirds.”

According to the national ranking of the medical and health industry at the current stage, Guoguo Group (National Holding, 01099.HK), Shanghai Medical (601607.SH) and Kyushu Link (600998.SH) ranked the top three, and the degree of concentration advocated by “Planning” increased. Guidance will undoubtedly further accelerate the market share grab among regional leading medical and commercial enterprises.

Statistics from the China Medical and Commercial Association show that: In 2009, the annual sales of China's top 100 medical and commercial enterprises totaled 396.4 billion yuan, accounting for 60.74% of the country's total commercial sales. Among them, there are 8 companies that have an annual sales scale of more than 10 billion yuan, including the National Group (70.5 billion yuan), Shanghai Medical Distribution Corporation (26.3 billion yuan), Kyushutong (22 billion yuan), and Nanjing Medical University (18 billion yuan). Guangzhou Medical (14.5 billion yuan), Anhui Huayuan Medical Co., Ltd. (13 billion yuan), Beijing Medical (102 million yuan) and Chongqing Medical (101 billion yuan).

"This is definitely positive for Kyushu Express." Yesterday, the vice chairman of the board of directors and secretary of the State Council Liu Zhaonian, the country's largest private medical company, said in an interview with reporters that the "plan" clearly stated The "breaking of local protectionism, not setting up local barriers" and other content are very beneficial to a nationwide medical and health enterprise such as Kyushu. Prior to this, when Kyushutong expanded its network to deeper areas, it increasingly felt the restrictions on tendering and the consequent local protection.

“Next, we will consider making some acquisitions where the network is not covered or where the marketing model is insufficient, but it will not take a high price for acquisition.” Liu Zhaonian revealed to reporters.

Guoguo Holding’s 2010 results announcement announced on March 23 shows that in 2010 China State Holdings has completed 24 acquisitions, including 3 overweights, and increased sales of nearly 4.7 billion yuan for the country's controlling share; and only in January 2011, the country’s Holding completed 12 acquisition transactions.

Worrying about supporting implementation

According to public information, China currently has more than 13,000 wholesale companies and nearly 3,700 chain stores, far higher than the world average. However, the sales of the top three companies in the country accounted for only about 20% of the total sales of the medical market in the same period, and the characteristics of the industry were large, small, scattered, and low.

Due to industry planning considerations, the Ministry of Commerce began to prepare for the “Twelfth Five-Year Development Outline for the National Product Circulation Industry” starting from March 2010. The goal is to improve the product distribution network in accordance with the approved wholesale and retail enterprises. "We are only responsible for formulating a game rule that everyone agrees on, and then everyone will play it." Wen Zaixing, deputy director of the Ministry of Commerce's market-order department responsible for this planning, said in an interview earlier. But the question is, to what extent this “rules of the game” can play a role.

"Now the Ministry of Commerce hopes to introduce a market competition mechanism, but I am afraid it will be difficult to do so." A person in charge of a domestic company believes that the reality of China's current goods industry is that the way that terminal medical institutions buy determines the sales situation of commercial organizations. " Taking the current sales of basic goods and non-basic goods as an example, the former is a local government to establish a procurement company, while the latter is based on the province as a platform for unified procurement, and the circulation is in the hands of the government. It is difficult to realize the full introduction of the market mechanism. Strong," he said.

In this regard, Liu Zhaonian also expressed the same view. “Now 70% of product sales are concentrated in hospitals. If the reform of the product circulation system cannot be promoted in parallel with the reform of public hospitals, it cannot be along with the reforms that are separated from the doctors (advancing), and may have the ultimate effect. It will be more limited."

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