China-based Yunnan Jianzhijia Health-Chain Co, Ltd (SHA: 605266) plans to acquire 100% of compatriot firm Hebei Tangren Pharmacy Co., Ltd in a deal valued at RMB 2.07 billion (USD 309 million) in cash. The acquisition will be completed in two installments. Jianzhijia, which provides efficient, differentiated promotion and marketing services for manufacturers in the ex-hospital market, expects the transaction to enhance its business presence, negotiation and service capabilities, and generate cost-savings.
China’s Drug Sales Market
China’s drug sales terminal points, consisting of public hospitals, retail pharmacies, and public primary medical institutions, generated a combined RMB 1.79 trillion (USD 267.3 billion) in sales in 2019, representing a 9.43% increase from 2012. The pharmaceutical retail segment accounted for RMB 477.4 billion (USD 71.2 billion) in 2021, up 10.3% year-on-year (YOY) and making up 23.37% of total sales.
Market Trends
Retail pharmacies are expected to see a greater degree of concentration in large chainstores due to M & A activity. This trend is driven by factors such as medical insurance payment method reform, lower-priced generics from the volume-based procurement (VBP) program, and the increasing power of patients due to Internet + health and prescription outflows from hospitals.-Fineline Info & Tech
