The recent medical reform has significantly reshaped the secondary healthcare network, with pharmaceutical distribution companies undergoing frequent mergers and reorganizations. The traditional "first terminal" model of drug sales—centered around hospitals—is now experiencing major transformations as part of broader systemic changes in the healthcare sector. Previously, China's three-tier medical system included tertiary, secondary, and primary hospitals, but it is now being restructured into a simplified secondary network composed mainly of large hospitals and community health institutions.
This shift represents a major turning point for the country’s approximately 13,000 pharmaceutical wholesale companies. Industry experts suggest that only those with strong distribution networks or professional academic promotion capabilities will survive. Companies that are small, disorganized, or inefficient are at risk of being phased out, driving a surge in merger and acquisition activities across the sector.
The hospital terminal remains the largest channel for drug sales, accounting for over 70% of the total market. As this key sales channel evolves, pharmaceutical companies must quickly adapt their strategies to stay competitive. Currently, community clinics, secondary hospitals, and tertiary hospitals form the backbone of China’s healthcare system. However, due to the overwhelming demand for tertiary care, these hospitals are often overburdened, leading to long wait times and inefficient resource allocation.
Medical reform aims to reduce the dominance of urban hospitals in the pharmaceutical market by promoting the development of community hospitals and redirecting drug consumption toward pharmacies and local clinics. This shift emphasizes a "low-level, high-coverage" model, encouraging more patients to seek care at the grassroots level.
Zhang Li from the Ministry of Health noted that the goal is to simplify the three-tier system into a two-tier structure, with secondary hospitals either upgrading to larger facilities or transitioning into community-based services. This change aligns with policy proposals that encourage large hospitals to redistribute resources through restructuring and partnerships, while also lowering costs and increasing reimbursement rates to guide patients to local healthcare centers.
Zhang Xiaolong of Wuhan Aimin Pharmaceuticals believes the new reform is setting the stage for a polarized hospital landscape. Large public hospitals will focus on teaching, research, and complex cases, while community health centers and village clinics will provide basic care, prevention, and routine treatment. For pharmaceutical distributors, this new model presents both challenges and opportunities.
To supply large hospitals, companies need strong liquidity and top-tier service quality. To serve community clinics, they must have extensive coverage and cost-effective logistics. Those unable to meet government standards may lose their distribution rights entirely.
With the industry moving toward consolidation, mergers and acquisitions are accelerating. Xian Yangsen’s Shen Rulin emphasized that existing policies are pushing for faster structural adjustments, creating growth opportunities for large players. Analysts from Industrial Securities note that reforms favor big pharmaceutical companies, which are better positioned to navigate the evolving market.
According to the China Pharmaceutical Business Association, nearly 90% of current companies are small-scale. In 2006, the top three—Sinopharm, Jiuzhoutong, and Shanghai Pharmaceutical—accounted for just 18% of the market. However, Sinopharm’s COO Wei Yaolin says the top three now hold close to 20%, signaling a potential turning point. With the Matthew effect in play, market concentration is expected to rise rapidly, leaving many smaller firms behind.
Sinopharm has been actively acquiring regional distributors, aiming to expand its nationwide footprint. Zhu Jingjin highlighted that Sinopharm’s control over provincial companies allows it to reach major hospitals, making it the only national player with full coverage.
Regulators are also tightening standards like GSP to raise entry barriers and encourage consolidation. Chen Yu from the State Food and Drug Administration said that many small wholesalers will be eliminated, with their operations taken over by larger companies. This will lead to a more concentrated industry, reducing the fragmented nature of the market.
Tie Tiejun of Tung Shing Yinghua Pharmaceuticals added that the government supports modern logistics and distribution companies, which will eventually dominate the basic healthcare market. Firms lacking liquidity, service efficiency, or network coverage will face the most significant impact from the new healthcare reforms.
Industrial Water Chiller
Introduction to GENT industrial water chiller
The classification of industrial water chiller is based on the application fields of water chiller. Applying water chiller to industrial field is not only feasible, but also indispensable in many key processes. Its application can cover everything from traditional manufacturing to high-tech products, so we have divided the category of industrial water chiller.
Applicable scenarios of chillers in industrial field
1. Manufacturing industry
Water chiller can be used in plastic processing, metal processing, and electroplating/surface treatment.
2. Food and beverage industry
Chillers can be used in post-pasteurization cooling and dairy/beer fermentation and other production processes.
3. Other industrial scenarios
Cool water chiller can also be used for centralized cooling in scenarios such as laboratory equipment, data centers, and central Air Conditioning systems.
Core advantages of industrial chillers
Industrial chillers hvac can achieve efficient temperature control, adapt to complex environments, and have both stability and durability, so they are suitable for industrial scenarios.
Comparison with other cooling solutions
1. Cooling tower: Some Water Chiller System with cooling tower is suitable for scenes with large flow and does not have strict requirements on water temperature, but it occupies a large area and the performance of the unit depends on the ambient humidity.
2. Air conditioning system: The air conditioning system is mainly used for indoor space cooling and cannot meet the high-precision cooling needs of industrial equipment.
3. Industrial water cooler: It is the first choice for process cooling because it is efficient, precise and flexible.
Therefore, the chiller air conditioner is suitable for use in the industrial field. Users who have cooling water and cooling needs in the industrial field can consider this kind of unit.
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