Analysis of the Development Status of Pharmaceutical Logistics Industry

Pharmaceutical logistics has just started in China, but it has developed rapidly and has quickly become a hot spot in the field of pharmaceutical circulation. The reason for this is that, on a macro level, it is due to the globalization of the global economy, the general economic situation in the country, and the further deepening of the reform of the medical insurance system. On the micro level, it is due to the continued strength of China’s pharmaceutical economy, drug chain operations, and The outlook for the retail market is generally optimistic.

The status quo of the development of pharmaceutical logistics

1. The international giants have taken the Chinese market one after another on May 30, 2013. On the eve of the implementation of the new GSP, the world's largest express delivery agency, the largest package delivery company, and the world's leading professional transport and logistics service provider UPS established in China. Two medical logistics and warehousing centers were formally opened in Hangzhou. UPS announced that it had “reached the requirements of the aforementioned new regulations”. UPS Asia-Pacific executives said that the company's storage center in Hangzhou will mainly serve pharmaceutical companies headquartered in China. Medical logistics is a key strategy of UPS and the strategic team is considering investing in suitable places in China. In July of the same year, US Bristol-Myers Squibb China Trade Logistics Center also signed a contract to settle in Wuxi New District...

The multinational giants chose pharmaceutical logistics as a breakthrough, naturally having their own considerations: high value of pharmaceutical logistics, high access requirements, high technology content, high professional requirements for information systems and logistics management, etc., so that transnational giants compete with domestic pharmaceutical logistics companies. There is more obvious overall advantage. It can be said that the multinational giants have won at the starting line.

2. Development of cold chain logistics The most distinctive feature of pharmaceutical logistics that distinguishes it from other logistics is cold chain logistics. Cold chain logistics has the characteristics of high professionalism, strong technicality, large initial investment, and high-end focus. According to statistics, the sales amount of vaccine cold products such as vaccine products, injections, tinctures, oral drugs, external drugs, and blood products accounted for 3% to 8% of the total sales volume of pharmaceutical distribution companies in China, and the rising trend was significant. The new GSP's regulations on drug storage temperature and humidity control, automatic detection, and operation of cold storage and frozen pharmaceuticals must be accompanied by provisions for automatic temperature monitoring, display, recording, regulation, and alarm equipment, indicating that the future of cold chain logistics equipment will become large-scale pharmaceutical logistics. The standard of the company and the pharmaceutical cold chain logistics, which are the key links for pharmaceutical circulation, will usher in a rare opportunity for development.

Problems in China's Pharmaceutical Logistics

1. Technical Obstacles Technical barriers are the most important reasons restricting China's pharmaceutical logistics: (1) The level of informatization is lagging behind. In developed countries, Internet-based information technology and network technology are well developed. Suppliers, wholesalers, and retailers can share information through the Internet, enabling data to be transmitted quickly and accurately, and greatly improving inventory management, handling, transportation, and procurement. Automating the level of ordering, delivery, order processing, etc. In China, the application of information technology is still in its infancy. Most of them lack the logistics information system. The lack of information links and sharing is far from the level of information required by logistics operations. Although many pharmaceutical suppliers, middlemen, retailers, hospital pharmacies, etc. are all equipped with electronic computers, their role is extremely limited due to the fact that most networks are not formed with each other. (2) Pharmaceutical manufacturers and commercial wholesalers have not yet formed a unified drug standard code (for this reason, most drug manufacturers simply do not use it). China's current material coding has not yet achieved standardization, and each field has formulated its own logistics code. As a result, intelligence cannot be transmitted between different fields, and electronic computers cannot be networked, thus hindering the effective implementation of system logistics management. The pharmaceutical industry is no exception. No matter whether it is codes that are designed by industrial and commercial enterprises or medical institutions, or codes that are designed by various organizations such as the general health department, they are all self-contained systems. Therefore, they can only be used in their own systems and are not compatible with each other. When drugs enter different chain stores, their own codes are printed accordingly. Non-prescription drugs entering supermarkets are included in the supermarket's coding system. The incompatibility between different chain companies, chain companies and supermarkets will inevitably lead to low efficiency of information processing and circulation. This is another major problem that has plagued logistics and distribution.

2. Institutional Obstacles There are still some institutional obstacles to the development of pharmaceutical and commercial logistics: (1) The industrial and commercial policies and drug regulatory policies are not compatible. The national drug regulatory agency allows chain companies to operate across regions, and can perform vertical management and logistics distribution of chain stores located in different places. Moreover, chain companies do not violate the provisions of the "Company Law" in the company's setup procedures. However, according to the policies of the industry and commerce departments, all the branches of the same legal entity established in the same area are all branch companies, not chain companies. The inconsistency of such policies will inevitably restrict the development of pharmaceutical commercial logistics, because the development of the logistics industry depends on the development of large-scale pharmaceutical chain companies. (2) The administrative division of the pharmaceutical market and local protection are serious and it is incompatible with the modern logistics industry. Modern commercial logistics requires breaking the regional boundaries, absorbing the latest achievements of modern science and technology, applying the information technology revolution to the field of e-commerce, advancing the division of specialization to a higher level, and rationally allocating resources in a wider range. In the market segmentation state, “large and complete” and “small and complete” wholesale enterprises are often formed. The logistics organization is scattered, inefficient, and high-productive. This will inevitably lead to cross-regional and cross-industry linkages among pharmaceutical retail chains. Cross-departmental, cross-ownership large enterprise groups have adverse effects.

3. Obstacles to ideas Medicine logistics has just started in China. Due to the influence of traditional systems and historical burdens, there is still a big gap between its service concept and management level and market requirements. Many people in the industry, including some leaders, still do not have a correct concept of logistics. They think that logistics is “transport and warehousing”. How to strengthen logistics management and how to design informatization that meets the requirements of modern development and meets the characteristics of the industry? The networked logistics center still lacks sufficient understanding; some blindly believe that as long as the various information management systems are modern logistics. It is true that information is the basis of logistics. However, if companies lack effective management, they cannot effectively integrate upstream and downstream resources, and they cannot deliver products in a timely manner to improve service quality. They cannot establish the image of Jingpai brand well; if enterprises are based on information technology Without corresponding and timely process reengineering in the enterprise and without innovation in the organizational structure of the enterprise, such logistics companies will also be defeated in the competition.

Development Trends: Third-Party or even Fourth-Party Logistics

The logistics company established by the pharmaceutical wholesale company, due to the limited production of its upstream products, in addition to selling its own products, will inevitably represent other companies' products. It only provides logistics services for its own retail companies and its scale is bound to be limited. Each company has its own core competitiveness, and only specialized division of labor will be more conducive to improving efficiency. Therefore, it is necessary for pharmaceutical logistics companies to change from third-party or even fourth-party logistics. As a bridge linking manufacturers, wholesalers, and retailers, third-party logistics specializes in the division of labor, focusing on its own business, and is likely to reduce costs, improve service quality, and enhance its competitiveness. Fourth-party logistics is a non-asset-based company that provides information and professional services. It does not generally own its own transportation tools, logistics outlets, and other assets. Instead, it conducts business through collaboration with other transport companies, warehouse operators, and other companies. Activities, accept comprehensive logistics commission business. Pharmaceutical logistics companies may not own their own transportation tools and logistics centers, and provide information services to the development of fourth party logistics. This is the general trend of pharmaceutical logistics in China in the future.