Limited by a small pharmaceutical raw materials demand, decreasing price and low added value, there are insurmountable growth bottleneck in raw material drug companies.
Through the preparation transition, pharmaceutical raw materials business has opened up the industrial chain and enhanced corporate profitability. Meanwhile, the huge market and stable demand solve the performance fluctuations caused by the raw material drug companies because of fluctuations in the prices of bulk drugs. The profit margins of agent’s export can reach as high as 80%, while the expanding generics market provides opportunity for preparations transition of raw material drug companies.
Chinese pharmaceutical companies in the industry already have a restructuring. European and American developed countries in technology and market access to build on the high barriers. Break through the barriers is based on the government by increasing the difference between the formulations and bulk drugs export tax rebate and increase the standard of environmental protection, the promotion of enterprise transformation to the preparation. The overall cost advantage of China's pharmaceutical glutathione companies have to make the transfer of industry to become a trend, raw material drug companies in terms of technical level, certification and enterprise scale has been fully improved.
International cooperation is the main export. Constrained by the lack of market sales links, China Pharmaceutical companies export of agents have to be the form of OEM formulations foundry, developed in cooperation with international pharmaceutical companies. Enjoy the sales profits into corporate R & D cooperation and development, profit space is much larger than the first two, the future transformation of the main ways.
Pharmaceutical companies formed after the transition preparations industrial chain, to earn double the profit of the bulk drugs and formulations to improve profitability. The preparations transition is an important means of raw material drug companies against product life cycle. Through the preparation of production, upstream of APIs to avoid the fierce market competition, reducing corporate earnings volatility caused by price changes of the drug substance. Preparations transformation of the raw material drug companies are the most direct way to break through the bottleneck. Preparation of market size and value of the products is much higher than that of bulk drugs, raw preparations transition enterprise value growth.
The successful transformation of the Indian pharmaceutical industry is based on its low cost and high international level. While Indian companies accounted for on the international level, language, technical strength and the talent pool advantage, but the raw material drug companies through continuous investment is catching up, and gradually take the advantage in infrastructure, cost, and science and technology investment. When raw material resveratrol drug companies are in the low-cost on the basis of the gradual strengthening of the international level, copy the Indian model and even beyond the Indian model as possible. Transfer production of wave and the generics market is expanding, compared with the transformation of raw material drug companies in China provided an opportunity.
In the international pharmaceutical industry chain, China has relied on low-cost advantage in the pharmaceutical raw materials manufacturing sector accounted for almost blank, but in the end consumer-oriented marketing links. Therefore, the raw material drug companies seeking international partners to the preparations transition process inevitably need to develop the market.
The main ways for the export of agents are OEM formulations and co-development. The pharmaceutical companies in China are only responsible for research and production stage. They are unable to participate in the terminal market with a relatively weak position. They completely dependent on cooperation partners in market development. This is the biggest risk of preparations transition for Chinese pharmaceutical companies.Source:http://www.cospcn.com
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