Sinopharm Holdings and Novartis China Announce Strategic Collaboration Upgrade to Advance Value-Based Retail and Patient-Centric Services

Commercial + Industrial Enterprises Join Hands Again.

Sinopharm Group Co.,Ltd. Officially Announces Partnership

Involving retail...

Recently, Sinopharm Group Co., Ltd. and Novartis China have embarked on a new journey of strategic cooperation upgrade. Both parties are promoting the continuous transformation and upgrading of retail pharmacies into "health solution service providers" by enhancing the professional service capabilities of pharmacists.

Wang Junxing, Head of Retail at Novartis China, pointed out: "Through an in-depth five-year collaboration between Novartis and Sinopharm Group Co., Ltd., more than a hundred 'Gold Medal Pharmacists' have been empowered in disease areas such as hypertension and immunology, providing patients with full-course disease management services and extending the reach of innovative treatment solutions to more patients." At the same time, with the support of Novartis, Sinopharm Group launched the 'Sinopharm Cardiovascular Health Service Center' to promote the operation of the value retail model.

Both parties enhance patient compliance and treatment outcomes through professional pharmaceutical services, and seek new growth points through retail channels after the centralized procurement squeezed the hospital market.

Driven by both pharmaceutical policies and the competitive market environment, the pharmaceutical retail industry is undergoing an overall transformative phase of differentiated development. Leading pharmaceutical companies with professional service capabilities, technological innovation, refined management control, and resource coordination abilities will seize the opportunity during this industry reshuffle.

Pharmaceutical retail is one of the important development sectors of Sinopharm Group. By the end of 2024, the pharmaceutical retail sector of Sinopharm Group achieved a revenue of approximately 35.981 billion yuan, representing a year-on-year increase of 0.82%. The total number of retail pharmacies under Sinopharm Group reached 11,213 stores, covering 30 provinces, municipalities, and autonomous regions across China, as well as 297 cities.

CPhI China found that,Sinopharm Group and Novartis China have established a multi-level strategic partnership in recent years, covering areas such as pharmaceutical promotion, retail channel optimization, and patient service innovation.

On January 22 this year, the two parties reached a deep strategic cooperation. At that time, Sinopharm Group Co., Ltd. President Lian Wanyong said,We need to continuously deepen our cooperation on the existing basis and explore more new models and fields of collaboration. Li Yao, President and Managing Director of Novartis China, expressed that he hopes to leverage the channel advantages of Sinopharm Group Co., Ltd. to promote the availability of innovative drugs in the Chinese market.

In 2024, the two parties continued their cooperation. For example, Sinopharm Guangzhou and Novartis China deepened their cooperation, engaging in in-depth discussions on advancing "Value Retail," creating value stores, and enhancing the professional service capabilities of pharmacists.

In addition, Sinopharm Group Co.,Ltd. has also established extensive cooperative relationships with many industrial enterprises at home and abroad, covering multiple fields.

Such asIn December 2024, Sinopharm Group Co., Ltd. and China Biologic Products announced a deep collaboration, integrating the resources of Sinopharm Pharmacy, SPS+ Specialty Pharmacies, and China Biologic Products' product resources to jointly build a nationwide retail network across China.

In November 2024, Sinopharm Group Co., Ltd. reached an agreement with Boehringer Ingelheim to promote two of its drugs starting from 2025:Sifrol® (Pramipexole) and Pradaxa® (Dabigatran Etexilate),Leverage Sinopharm Group's nationwide distribution network in China to increase the market coverage of these two drugs, while allowing Boehringer Ingelheim to focus on innovative drug research and development.

The cooperation with Sinopharm Group mainly focuses on the commercialization of innovative drugs, expansion of the off-hospital retail market, distribution of medical devices, and supply chain optimization. This collaboration between Novartis and Sinopharm Group reflects, to a certain extent, the new strategy of multinational pharmaceutical companies in the Chinese market, which isShifting from reliance on high-priced original research drugs to a localized, multi-channel, service-driven business model.

Continuous cooperation in the retail and distribution sectors

How the Four Major Pharmaceutical Companies Develop

According to the "2023 Pharmaceutical Distribution Industry Operation Statistical Analysis Report," in 2023, the sales of the pharmaceutical retail market reached 640.2 billion yuan, representing a year-on-year increase of 7.6% after excluding non-comparable factors, with the growth rate slowing by 3.1 percentage points. The sales of the pharmaceutical wholesale market amounted to 2,290.2 billion yuan, showing a year-on-year increase of 7.5% after excluding non-comparable factors, with the growth rate rising by 2.1 percentage points.

Driven by both policy changes and market competition, the four major pharmaceutical companies are accelerating their distribution and retail businesses to build differentiated competitive advantages.

In the distribution field, Sinopharm Group Co., Ltd. has obtained the commercial promotion rights for Novartis' Gleevec® (Imatinib) and Exjade® (Deferasirox Dispersible Tablets) in the Chinese market since January 1, 2023; CR Healthcare Guangdong Medicine held a commercial empowerment meeting with BeiGene to enhance business synergy efficiency; Shanghai Pharmaceuticals collaborated with SciClone Pharmaceuticals in the innovative drug sector; and Jiuzhou Tong partnered with Guangzhou Pharmaceutical Holdings Limited, covering multiple areas such as "pharmaceutical health + internet," traditional Chinese medicine, logistics, and overseas business.

In the retail sector, Sinopharm Group's SPS+ Specialty Pharmacy held a strategic communication meeting with CR Sanjiu and Dong'e Ejiao in October 2024; CR Pharma collaborated with Dasonlin to explore various aspects such as product iteration, service upgrades, and digital empowerment.

The development of the four major pharmaceutical merchants in the pharmaceutical retail business field is not limited to cooperation.

In 2024, for example, CR Pharmaceutical operated one of the largest retail pharmacy networks in China, managing 708 retail pharmacies under premium national or regional brands such as "Dexin Xing," including 270 DTP specialty pharmacies (of which 182 were "dual-channel" pharmacies). Joypay Health’s Good Pharmacist franchise had expanded to over 29,000 pharmacies, with sales revenue reaching 5.392 billion yuan. Its new retail business targeting C-end consumers generated 2.966 billion yuan in sales revenue (including B2C e-commerce agency and distribution businesses), accumulating over 35 million C-end users.

The total number of pharmacies in China has increased from 489,000 in 2018 to 667,000 in 2023, and the chain pharmacy ratio has risen from 52.15% in 2018 to 57.81% in 2023. Commercial enterprises in the retail sector are undergoing a transformation "from scale expansion to value creation," with future core competitiveness set to focus more on professional services, digital capabilities, and more.

The four major pharmaceutical companies will continue to increase their investment in the pharmaceutical distribution and retail sectors.

Taking Sinopharm Group Co., Ltd. as an example, it will adjust and optimize its business development strategy, formulating differentiated development strategies based on the regions where subsidiaries are located and their different stages of development; further optimize the customer structure to maintain coverage and scale advantages in regional public hospitals; pay attention to the trend of hierarchical diagnosis and treatment system reform, and expand the market for grassroots medical institutions. It will also accelerate the adjustment of the pharmaceuticals and medical devices category structure, focusing on high-demand products from national negotiations and centralized procurement, and strengthen the ability to acquire key varieties.

At the same time, deepen the "dual-brand" strategy of two systems: professional pharmacies and Sinopharm Group pharmacies. Through integrated wholesale and retail operations and mutual empowerment, provide professional and diversified health services to C-end customers. Focus on developing advantageous regions and enhance the profitability of individual stores.

With the pharmaceutical reform, the retail end of commercial enterprises began to transform, and leading companies strengthened their alliances to cope with competition, becoming a trend.