Chinese Pharmaceutical Distribution Business Development Model Study

The changes in pharmaceutical industry are strongly concerned because pharmaceuticalproduct is a special product which has direct impact on people's life and health. Recently,theissues about difficulty and high cost of patient treatment are becoming more and more serious,with decrease of government's investment on healthcare system, unreasonable resourceallocation and high price of pharmaceutical product. In order to solve this problem, Chinesegovernment has been implementing a serial of policies and regulations to enforce the reformsof healthcare system, medical insurance scheme and medicine distribution scheme.Distribution is an important sector of pharmaceutical product marketing and is facing bigproblems and challenges during enforcement of medicine distribution scheme reform,implementation of new policies and regulations, and medicine distribution industry opening toforeign capital.The macro- and micro-environment of Chinese medicine distribution industry is deeplyanalyzed using "Six Force" model, existing problems and challenges are indicated in thispaper. The necessity and feasibility of distribution industry reform are comprehensivelyexplained. Seven strategic directions are addressed and raised for Chinese medicinedistribution industry through interview with ten large-scale distributors and five commercialstaff in multinational pharmaceutical companies, considering current policies and regulations,and distribution industry's predictions. The paper provides a "Six Force" model fordistributors to analyze company's environment. The seven strategic development modes areexpected to be a reference for distributors.