The recent medical reform has introduced significant changes to the secondary healthcare network, and pharmaceutical distribution companies are undergoing constant mergers and reorganizations. The traditional "first terminal" for drug sales—comprising hospitals at all levels—is now facing major restructuring as part of broader healthcare system reforms. Previously, China's three-tiered medical system included tertiary, secondary, and primary hospitals, but it is now being reorganized into a simplified secondary network composed mainly of large hospitals and community health centers.
This shift represents a fundamental transformation for the country’s 13,000 pharmaceutical wholesale companies. According to industry experts, only those with strong distribution networks or specialized academic promotion capabilities will survive. Many small, disorganized, and inefficient companies are at risk of being eliminated, leading to an increased demand for mergers and acquisitions in the sector.
The hospital terminal remains the largest channel for drug sales, accounting for over 70% of the total pharmaceutical market. As this key segment evolves, pharmaceutical companies must adapt their strategies quickly. Currently, community health stations, secondary hospitals, and tertiary hospitals form the backbone of the healthcare system. However, due to the overwhelming number of patients seeking care at top-tier hospitals, many are overburdened, leading to inefficiencies and uneven resource distribution.
The new medical reform aims to reduce the dominance of urban hospitals in the pharmaceutical market, promote the development of community hospitals, and redirect drug consumption toward pharmacies and local clinics. This strategy emphasizes building a "low-level, high-coverage" network to improve accessibility and efficiency.
Zhang Li from the Ministry of Health highlighted that the future direction of the three-tiered medical system is to simplify it into a secondary network, which means secondary hospitals will either be upgraded to larger institutions or transformed into community-based facilities. This shift aligns with the reform plan, which encourages large hospitals to transfer resources and improve service quality while lowering costs and increasing reimbursement rates.
Zhang Xiaolong from Wuhan Aimin Pharmaceuticals noted that the new reform is shaping a polarized healthcare landscape. Large public hospitals will focus on advanced treatments, research, and teaching, while community health centers and village clinics will serve as the first point of contact for basic care and prevention.
For pharmaceutical distribution companies, this evolving structure presents both challenges and opportunities. To supply large hospitals, they need strong liquidity and professional services. For community-based facilities, they require extensive coverage and cost-effective logistics. Companies that fail to meet these standards may lose their eligibility as official distributors.
Industry consolidation is accelerating. Shen Rulin from Xianyangsen said that existing policies are pushing for faster structural adjustments, giving big players more chances to grow. Analysts from Industrial Securities also note that the reform favors large pharmaceutical companies, creating a more competitive and efficient market.
According to data from the China Pharmaceutical Business Association, most companies are small-scale. In 2006, the top three firms accounted for just 18% of the market, highlighting the need for consolidation. Wei Yaolin from Sinopharm mentioned that once the top three reach 20% market share, the industry will see rapid concentration, with smaller firms being phased out.
Sinopharm has been actively acquiring regional distributors across China, aiming to expand its nationwide presence. Zhu Jingjin from Sinopharm confirmed that the company now covers most major hospitals and is the only national player with full coverage.
Regulators are also tightening standards like GSP to raise entry barriers and encourage mergers. Chen Yu from the State Food and Drug Administration stated that small wholesalers will be phased out, and their business will be taken over by major companies. This trend will lead to higher market concentration and reduce fragmentation in the industry.
Tie Tiejun from Tung Shing Yinghua Pharmaceuticals added that the government is supporting large-scale logistics and distribution companies, which will gradually dominate the basic healthcare market. Smaller firms without sufficient resources or coverage will struggle to survive under the new reform framework.
Air Source Heatpumps
Introduction to GENT fixed frequency air source heatpumps
Fixed frequency air source heatpumps is a type of air source heat pump. All heat pump products under this category operate at a fixed frequency. After reaching the setting, the unit will be completely shut down and restarted when the temperature deviation is large.
The products included in the category of fixed frequency ashp heat pump are mainly fixed frequency heat pump hot water heater, fixed frequency air source heating system, and fixed frequency Heat Pump Heating And Air Conditioning unit.
These three products are relatively basic products in air source heatpumps. Although they have slight differences in use purposes and working modes, in essence, these products all use the heat in the air as the cooling or heating source, and achieve building cooling or heating by absorbing heat in the air. They are all air and water heat pump.
Suggestions on whether to choose a fixed frequency unit or an inverter unit
1. Limited budget: Choose a fixed-frequency unit, which is suitable for intermittent use or scenarios that are not sensitive to temperature
2. Long-term use/high comfort requirements: give priority to Inverter Heat Pump, which can save electricity bills in the long term and improve user experience
3. Extreme climate areas: Choose EVI inverter unit to ensure low temperature performance
Therefore, when choosing a unit, users need to consider many factors comprehensively, such as your own usage needs, purchase budget, usage frequency, local climate, energy available for the unit, actual on-site conditions, etc. Only after clarifying these conditions and combining the characteristics of each product, users can choose the unit that suits you best.
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