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The Impact Of Cold Chain Logistic And Market Dynamics On The Pharmaceutical Industry In China

- Jul 06, 2017 -

China is fast becoming a major player in the pharmaceuticals environment, with many multinational companies
having set up bases in the country in recent times. A report by IMS Health last year also predicted that China would
become the third-largest pharma market on the planet, while its healthcare supply and logistics service industry is
valued at $29.4 billion (£18.9 billion).
However, one thing which could hold the country back is its cold chain logistics.and bring big optunity to cold chain logistic equipments. such as Pharmaceuticals medicine Cooler Box ,Vaccine cold chain cooling bags, Insulin cooler bag.


The East Asian country is approximately 9.6 million sq km in area, making it the second biggest in the world, and
the most populous with over 1.3 billion citizens. Add to this varied terrain, differing standards of travel network and
extreme weather conditions, it is clear to see the huge challenges which face the pharmaceutical industry in China.
Reuters reported that multinational companies hold 30 percent of the market in the country, with local drug
suppliers staking 70 per cent, and it is these home-grown firms which have the stronger sales and distribution
channels.

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Cold chain logistics has a massive role to play in pharmaceuticals in the country. Failure to get it right could mean
that millions of dollars worth of product could be lost if a shipment is not transported at the right temperature.
So true is this point, that the Chinese government has interjected and is making the sector a regulatory priority. Dr
Jim J Zhang, president and managing director of JZMed, told PharmaAsia.com that recent reports stated around
80 percent of drugs were being shipped in the country without appropriate temperature control and record.
"As the Chinese pharmaceutical and biopharmaceutical industry grow, the number of temperature-sensitive drug
products is rapidly increasing, including the materials and reagents used in clinical trials.
"But, presently, the effective cold chain management in China is still a brand new concept to many companies,
especially those professional logistics service providers," he noted.
Mr Zhang said that limitations in the country's cold chain logistics are holding back supply on a large scale.
Organisations are choosing to limit their delivery radius to around 300 km, leaving them to miss out on other
regions in the vast country.
The expert went on to say that while China is currently lagging behind other regions, now is the perfect time for
changes, after the government called for a reduction in middlemen in the distribution chain, a move which will
eventually lead to a complete regulatory system and the improvement of its allocation channels.
A move towards optimising these distribution channels, such as cold chain logistics, was recently highlighted in a
report by Deloitte, which pointed towards Sinopharm's acquisition of Zheijang Wenling Medicine and Medicinal
Materials Company.
"Not only do such acquisitions reduce distribution costs, but also allow major players bent on expansion a chance

to break into new regional marketplaces and capture fresh market share, as was the case with Shanghai
Pharmaceuticals' 2011 takeover of China Health System Ltd, Beijing's third-largest drug distributor," said Deloitte.
Furthermore, it noted that this marked an important change of direction for the firm, which allowed it to expand its
market to Northern China from its base in Shanghai.
It is not just Chinese-based firms which are looking to optimise their distribution channels, with US company
Cardinal Health acquiring logistics experts Zuelig Pharma China for $470 million last year.
Deloitte noted that this "major acquisition" may well be indicative of future moves to come.
This could be the price to pay for being part of a growing and ever-more important market. Jeff Kindler, chief
executive officer of Pfizer - the world's biggest drug maker - said that China is becoming an increasingly important
priority for his company. "Not only is it necessary to be there, we are there," he once told Reuters.

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