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

Commercial + Industrial Enterprises, Join Hands Again.

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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 trained and 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 characterized by 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 segments of Sinopharm Group. By the end of 2024, the pharmaceutical retail segment 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 an in-depth strategic cooperation. At that time, Lian Wanyong, President of Sinopharm Group Co., Ltd., said that they would continue to deepen cooperation on the existing basis and explore more new cooperation models and fields. Li Yao, President and Managing Director of Novartis China, expressed that he hoped to promote the marketing of innovative drugs in the Chinese market through the channel advantages of Sinopharm Group.

In 2024, the two parties continued their cooperation. For example: Sinopharm Guangzhou and Novartis China deepened their cooperation, focusing on enhancing "value retail," creating value stores, and improving the professional service capabilities of pharmacists through in-depth discussions.

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

In December 2024, Sinopharm Group Co., Ltd. and China Biologic Products announced a deep collaboration, integrating resources from Sinopharm Pharmacy, SPS+ Specialty Pharmacies, and China Biologic Products to jointly build a nationwide retail network across China.

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

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

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Continuous Cooperation in Retail and Distribution Fields

How the Big Four Pharmaceutical Companies Develop

According to the "2023 Statistical Analysis Report on the Operation of the Pharmaceutical Distribution Industry," in 2023, the sales revenue of the retail pharmaceutical market was 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 revenue of the wholesale pharmaceutical market was 2,290.2 billion yuan, reflecting 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 starting from 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 Jointown partnered with Guangzhou Pharmaceutical Holdings, covering multiple areas such as "pharmaceutical health + internet," traditional Chinese medicine, logistics, and overseas operations.

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.

Taking 2024 as an example, CR Pharmaceutical operates one of the largest retail pharmacy networks in China, managing 708 retail pharmacies under high-quality national or regional brands such as "Dexin Xing," including 270 DTP specialty pharmacies (of which 182 are "dual-channel" pharmacies). Jiuzhou Tonghaoyishi franchise pharmacies have exceeded 29,000, with sales revenue reaching 5.392 billion yuan. The new retail business targeting C-end consumers generated sales revenue of 2.966 billion yuan (including B2C e-commerce agency and sales 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 investments in pharmaceutical distribution and retail.

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 development stages; further optimize the customer structure to maintain coverage and scale advantages in regional public hospitals; pay attention to the reform trend of hierarchical diagnosis and treatment systems, and expand the market for primary healthcare 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 pharmacies. Through integrated wholesale and retail operations and mutual empowerment, provide C-end customers with professional and diversified health services, focus on the development of advantageous regions, and enhance the profitability of individual stores, etc.

With the pharmaceutical reform, the retail end of commercial enterprises has started to transform, and leading companies are forming strong alliances to respond to competition, which has become a trend.