Boston Consulting Group (BCG), one of the four major consulting companies in the world, recently released an industry analysis report, entitled Direction for the Development of the Drug Circulation Industry in China. The report noted that the drug circulation industry in China at present reveals three most important characteristics, i.e., a great number of enterprises, relatively low concentration and a dire need for optimization of industry structure; leading players active in expanding ability for comprehensive services with professional competencies yet to be improved; and constantly emerging new business formats and business models. The report summarized alignment of the drug circulation industry to international trends, the direction for its future development in China and challenges; BAHEAL Pharma Group (BPG), as a representative of innovative companies in China’s drug circulation industry, provides up- and downstream total solutions for the entire industrial chain and fully understands the future directions of the industry.

XIA Xiaoyan, BCG’s Global Partner & Managing Director said, during the release of the report, that, compared with the United States, Japan, Europe and other developed economies, China has a great number of drug wholesalers and retailers presently while with a low concentration, which will be further enhanced in the future. In the United States, there are around 35 drug wholesalers and the concentration of the top three drug circulation enterprises is as high as 96% while there are nearly 13,000 wholesalers in China and the top four companies account for only 39% or so. BCG concludes, therefore, that a structure characterized by “national backbone companies as leading players, coexistence of a number of regional leaders and the complementary role of a number of professional companies” is estimated to be developed in the wholesale market and the trend of “an industry structure with a number of national, regional and local chain companies as leading players and development towards different professionally specific formats” is estimated to be developed in the retail market.

Wholesalers and retail drugstores face some challenges under the market circumstance of scale-oriented development and further concentration in the future. Wholesalers remain focused on basic logistic distribution and their overall competencies for professional services need to be strengthened while retail drugstores, due to limited number of pharmacists and qualifications, are unable to provide professional pharmaceutical services for the patients; and the information management system lags behind and there is a lack of effective information platform to accommodate outflow of prescriptions from hospitals.

For this reason, BPG, Shanghai Pharma and CRPG, among other leading companies of the industry have begun to innovate and develop new business models. With its strong synergy in the industry, BPG works with IBM, Oracle, Philips and other first-class companies on the international arena and creates a unique “BAHEAL Model” by means of advanced technologies and products in the world that can be directly put into clinical application, racing to be the first in the field of intelligent medicine, expanding and improving its service competencies through information technology, and developing a brand-new business format.

According to BCG, the success of the wholesale and retail enterprises in developed economies has enlightened the drug circulation companies in China; traditional distributors need to provide up- and downstream total solutions for the entire industrial chain, solutions to supply chains that integrate the entire industrial chain, solutions to information systems, solutions to clinical services as well as solutions to marketing services; there also must be clear business models and returns to constantly update service contents and competencies.

From an enterprise engaged in traditional drug circulation to a technology-driven platform innovating and integrating resources of the health industry, BAHEAL is laying out towards up- and downstream total solutions for the entire industrial chain and has become a modern, information-centered service provider catering for the entire industrial chain with integrated multiple modules. Currently BPG is building all levels of total solutions covering a diversity of aspects, including supply chain, IT-oriented medical service and precise marketing at retail terminals, etc., and serving the entire drug circulation process that ranges from the hospitals and doctors to the drugstores, pharmaceutical companies and patients, among others. For instance, BAHEAL makes use of IBM Watson Health and other AI technologies to provide evidence-based guidance for doctors in clinical treatment of cancers; and the YFZ - a Platform Sharing Prescription Information as a result of BAHEAL’s effort in proprietary R&D aligns with HIS of the hospitals, which can enable connection of systems between hospitals and drugstores and thus improve overall competencies for professional services.

“BAHEAL Model” is far more than that, in fact. With a marketing network covering more than 12,000 hospitals and 200,000 drugstores in over 30 provinces across China, BPG works to fully strengthen professional services and proficiencies and significantly increase operation efficiencies in all segments of drug circulation by erecting all sorts of platforms through new technologies. Whether in the practice of the Prescription Information Sharing Platform and clinical application of artificial intelligence or in the efforts to establish an IT-oriented system across the entire medical services and the achievement of intelligent and precise marketing in retailing, professional platforms and services are available in all of BAHEAL’s brand-new frameworks and the advantages of such platforms are emerging in serving the entire industrial chain.

Take improved competencies of the retailers for professional services by means of the “BAHEAL Model” for example, systematic solutions to marketing operations have been provided by BAHEAL Intelligent Technology under BPG.

First, Spiegel Marketing Cloud, targeting the poor efficiency of the retail sector of the medical industry, helps retailers to improve their management and optimize operation efficiency; meanwhile it achieves intelligent, customized precise marketing for the consumers and thus push forward transformation and upgrade of the industry.

Second, by integrating industrial resources and empowering the drugstores and introducing the “Total solution to Smart Drugstores”, AI-based upgrade of traditional drugstores can be fulfilled to enable them to develop from simple sellers of products to community health service centers.

BAHEAL is working with mainstream drug plants and industry associations to establish the “Smart Drugstore Project” to provide standard monitoring for innovative and special drugs to access the market and improve the operation and maintenance of the drugstores and suppliers of special drugs for cancers, etc.

BPG Chairman FU Gang is filled with confidence in the future of the pharmaceutical industry in China. “The only way for the industry to evolve and get mature is to be oriented by the needs of the market and driven by technical progress. China’s pharmaceutical business will unquestionably reach the first class in the world as the result of the increasing attention the state is paying to the health industry, the clearer regulatory conceptions of all government institutions and the technical dividends generated by the development of information technology,” he said.