In 2020, the pharmaceutical industry is experiencing explosive growth.
The new crown epidemic has made society’s eyes quickly focus on the medical field, which has promoted this round of rapid development.Before the outbreak, the total market value of the pharmaceutical and biological industry was about 4.5 trillion yuan. After six months of rapid growth, the total market value was already 6.5 trillion yuan, a full increase of nearly 2 trillion yuan.
This outbreak cannot be said to be “overwhelming”, but more like “thick accumulation”.In the past five years, the development of pharmaceutical life science and technology, domestic policy dividends to encourage drug innovation, the withdrawal methods provided by the Hong Kong stock science and technology board, the trend of increasing aging, and changes in the disease spectrum have made the pharmaceutical industry move forward steadily.
In a difficult environment, compared with many industries that can’t wait for investors, biomedicine is like a hot spring in winter.
However, if we enter the field of medicine to explore in detail, we will find that the prosperity is coming.The global pharmaceutical giants, represented by Pfizer, are striving to simplify their administration and drastically adjust their domestic team structure.The actions of international giants are often far-reaching, and the industry may have to usher in a moment of reshuffle.
Roller Coaster Tour of “Space Pharmaceutical Factory”
It is not an exaggeration to say that Pfizer has taken a roller coaster in China.One year after the company’s headquarters settled in China, it underwent a merger. The company’s five general managers all resigned and recently took the position of chief operating officer.
Time-to-time changes are extremely tight.
Pfizer, which was founded more than 170 years ago, is often ranked among the top three in the world, and is known by the industry as “Universal Pharmaceutical Factory”.Pfizer’s strategy changes are worthy of in-depth study.
Pfizer is one of the three major departments in Pfizer’s organizational structure.Pfizer’s original three major departments are Pfizer Biopharmaceuticals, Pfizer, and Consumer Healthcare. Among them, “Pfizer” inherited the main assets of Pfizer’s mature pharmaceutical business unit “Puqiang”, mainly the original research that has passed the patent period.Pharmaceuticals and generic drugs, such as Lipitor, Luohuoxi, Viagra, etc., have more than 20 brands.In other words, Pfizer strongly confronts the competition of a large number of generic drug brands, with a strong focus on marketing functions.
In May last year, Pfizer’s global headquarters entered China and settled in Shanghai.Just two months later, Pfizer announced its merger with generic drug company Mylan, with a view to covering a larger market share in China and other emerging markets.The merger is expected to be completed by mid-2020, and the new company is expected to generate between US$19 and US$20 billion in revenue this year.While the transaction is proceeding step by step, the explosive news at the end of 2019, all five Pfizer general managers leave.Recently, Pfizer has made another huge structural adjustment, which directly removed the position of the chief operating officer in the original system. The original department directly reported to Miao Tianxiang, president of Greater China.It can be seen that Pfizer’s new actions are intended to flatten the organizational structure, streamline the management of troops, and improve organizational efficiency.
It’s not just Pfizer, multinational pharmaceutical companies are taking turns to seek change.In June, the position of the head of the national sales and market access strategy for Novartis’ core products was “good”, Novartis set up three regional sales directors in Beijing, Shanghai, and Guangzhou, directly to the head of the business department Thomas RowlandReporting; In May, Sanofi restructured China’s structure and announced the implementation of the global division’s overall responsibility system, through which China’s structure and global structure were implemented; in April, AstraZeneca’s business integration in cardiovascular and diabetes areas in China,Merged into one business department.
Adjustments to the structure of multinational pharmaceutical companies have also occurred in the past, but such highly concentrated changes are rare.What triggered the tide of architectural transformation among the giants?What impact will these actions have on the industry?This is a question worth exploring.
The root cause of personnel changes
Although the timing of the drastic changes in the personnel of multinational pharmaceutical companies overlaps with the new crown epidemic, in fact, the epidemic is not the root cause of the tide of transformation. We will talk about the changes brought about by the epidemic later.The most fundamental reason, we think, is that the domestic pharmaceutical market has entered the “small profit era.”
Why do you say that?The video of “Medical Insurance Bureau’s Soul Bargaining” was popular at the end of last year, refreshing the public’s understanding of the drug market, and this incident is the epitome of the opening of the era of small profits.
The background event of “soul bargaining” was the price negotiation of the National Health Insurance Catalog in 2019. The final negotiation result was that 97 drug negotiations were successful, and many well-known imported drugs basically gave the lowest prices in the world.
Not only is the medical insurance catalogue negotiation, but the round of centralized drug purchases has pushed the prices of medicines to a record low.The second batch of national drug collections that just ended a few days ago, the average price reduction reached 53%, and the highest drop in medicine reached 93%.
Purchasing drugs by volume is a reformed policy in the pharmaceutical industry. By integrating the volume of purchases, it talks about lower drug prices.This policy was first piloted in “4+7” cities at the end of 2018. The state organized public medical institutions in these cities to form a procurement alliance to integrate the drug procurement needs of public medical institutions and directly discuss drug prices and pricing with companies.Quantity, improve bargaining power.After the pilot, the policy of volume procurement continued to expand, and the scope of the pilot expanded to the whole country in September last year, and the second batch of volume procurement was completed this year.It is foreseeable that tape procurement will continue to expand the scope of influence, and the third batch of tape procurement is also just around the corner.
The continuous expansion of the volume of purchases has brought an industry reshuffle and made pharmaceutical companies realize that if they want to maintain market share, they must follow the trend of small profits and maintain a low price level.How to adapt to such changes?One of the most direct strategies is to reduce sales expenses and change the past tactics of medical representatives’ promotion and marketing. This series of changes also led to the organizational structure adjustments mentioned above.
In the era of small profits, what could happen in the future?
It is foreseeable that the influence of volume procurement will continue to expand.The wave has come, and international giants have also begun to adjust the structure, with far-reaching impact.So, what may happen to the industry in the future?36 krypton gives these conjectures.
First, the trend of downsizing of medical representatives.Pharmaceutical representatives are the main force in drug marketing. They visit medical staff, promote products, and market to hospitals and pharmacies.In the past, pharmaceutical companies preferred to adopt human-sea tactics, weaving the influence of the meticulous drug generation network brush, and the labor cost occupied a large amount of marketing expenses.36 Krypton contacted several pharmaceutical representatives revealed that their large pharmaceutical companies are already adjusting their drug generation teams, and they also need to advance their own funds in the course of their work. Under internal and external pressures, this year’s survival situation is very grim.
Second, online marketing strategies.After reducing the labor cost of pharmaceutical substitutes, pharmaceutical companies are likely to do marketing and promotion, and they may be more inclined to digital marketing. They can promote more accurately through online channels and update strategies based on marketing data in a timely manner.
The new crown epidemic is also boosting the trend of onlineization.In the past offline marketing, pharmaceutical companies will focus on academic promotion conferences, inviting medical staff and industry experts to participate in academic conferences to promote and promote the company’s treatment concept, these meetings are also a good time for pharmaceutical representatives to conduct marketing.The arrival of the new crown epidemic was due to the inability to gather people. The offline academic conference was pressed the pause button. Pfizer, an active representative of the conference industry, also announced the suspension of all domestic academic conferences in April. Under this opportunity, the marketing method turned to onlineChange.
Extending to say that the new crown epidemic has significantly promoted the development process of Internet medical care. The Health and Health Commission has repeatedly issued a document requesting public hospitals to strengthen Internet medical care. In the first half of the year, more than 60 physical hospitals went online.And this trend may also trigger the reaction of pharmaceutical companies. For example, in the recent structural adjustment of Pfizer, the company’s business has been divided into three departments, namely hospital sales business, retail business, innovative Internet medical service business, InternetFor the first time, medical treatment was listed as a core business unit by pharmaceutical companies alone, and this move is also worthy of attention.
Third, in addition to medicines, medical devices will also usher in reshuffle.Medical devices and pharmaceuticals are listed as the two pillar industries of the industry. Following the pace of drug volume procurement, the volume procurement of medical devices also sounded the horn.The first focus is on high-value consumables that are at the forefront of investment, such as heart stents, artificial joints, etc. These products are characterized by high technical level, high profitability, and a broad market.After Anhui and Jiangsu launched the first pilot of high-value consumables and tapes procurement last year, nearly one month later, the relevant actions of high-value consumables and tapes procurement were frequent. Beijing, Tianjin, Hebei and other nine provinces and cities alliances purchased intraocular lenses.50%. At the same time, Fujian, Zhejiang, and Shandong respectively launched the procurement of consumables and tapes in the province. The Medical Insurance Bureau issued three consultation drafts in the circulation field this month, paving the way for centralized mining in the country.
In general, volume procurement has placed high demands on the rapidly growing medical industry. In this round of price cuts, pharmaceutical companies must quickly adjust the cost structure and optimize marketing efficiency to retain market cake.Although the overall industry is booming, the challenges facing pharmaceutical companies are also quite severe.
Focus Analysis | A number of pharmaceutical company executives have earthquakes, and the reshuffle of pharmaceutical outlets is coming
In 2020, the pharmaceutical industry is experiencing explosive growth.