New GMP Will Optimize Industrial Structure of China's Pharmaceutical Industry

Since its implementation in March 2011, the new version of the GMP certification has been considered as an opportunity for the pharmaceutical industry to reshuffle. In the eyes of the industry, the new version of GMP certification will increase the operating costs of the industry in the short term, but it is a favorable policy for the industry for a long time, which helps to eliminate backward production capacity, enhance industry concentration and overall competitiveness.

Industry analysts pointed out that from the perspective of industry development, the implementation of the new version of GMP is beneficial to the entire pharmaceutical industry. The first is to improve the quality of domestic drugs and increase market competitiveness. The second is to increase the concentration of the industry and reduce the disorderly competition. The improvement of industry innovation capability; Third, after the implementation of the new version of GMP, a batch of backward production capacity will be eliminated, which can effectively alleviate the phenomenon of excess production capacity.

In fact, the new version of drug GMP certification has the effect of survival of the fittest and will further optimize the industrial structure of China's pharmaceutical industry and increase industry concentration. It is normal for some small and medium-sized pharmaceutical companies to pass the new drug GMP certification. It is a normal phenomenon that the lack of funds and low technology precipitation are the major factors that make it difficult for small and medium-sized pharmaceutical companies to pass the new GMP certification.

Yu Mingde, president of the Chinese Association of Pharmaceutical Enterprises Management, said that the current production concentration of aseptic preparations is particularly high, and the actual actual production is concentrated in the hands of a few large enterprises. The national powder injection is more than 20 billion, which is more than 20 billion yuan. It is mainly concentrated in the top dozens of large companies. All of them have passed the new GMP certification, so the impact of the new GMP on the market of aseptic formulations may not be obvious.

“Some small businesses may not have the strength to pass the certification, but it has a good product. If it is a pity, it can’t be done. What to do? To others and take it for granted, the new version of GMP may cause a wave of acquisitions among pharmaceutical companies. This is what Yu Mingde said.

Wang Wenchu, Director of the Greater China Medicines Division of the GP Group, said that although these companies have not passed the new GMP certification, they may have good pharmaceutical products and approvals, have certain policies and resource advantages, and are likely to become targets of large-scale enterprise mergers and acquisitions. GPHL will also use these companies as the key M&A targets.

Wang Wenchu ​​disclosed that at present there are more than a dozen companies and Guangpharm Group are in mergers and acquisitions negotiations. In mergers and acquisitions, two modes of approval and mergers and acquisitions will be adopted. The purchase of approvals is mainly based on new varieties that are no longer subject to new GMP reforms. This year, injections and biopharmaceuticals will be the main targets. In terms of mergers and acquisitions, M&A will focus on mergers and acquisitions with companies that complement their product structure. At present, Guangphong has set up M&A special teams and M&A expert advisory committees to conduct M&A work and speed up M&A progress.

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