RuiKang Pharmaceutical and AWS Forge Strategic Partnership to Achieve Full Cloud Migration in Pharmaceutical Distribution

Pharmaceutical Distribution Companies Achieve Comprehensive Cloud Migration: Realcan Pharmaceutical and Amazon Web Services Enter Strategic Partnership

Cloud adoption by pharmaceutical companies has increasingly become one of the industry’s development trends.

As healthcare reforms deepen and the pandemic accelerates the trend toward digitalization, significant changes are occurring across the industry’s user side, provider side (doctors/hospitals), and pharmaceutical supply chain. In light of these evolving dynamics, the traditional pharmaceutical industry must undoubtedly undergo digital transformation. Cloud-based data platforms can help drive industrial innovation and establish entirely new business models.

Today, the pharmaceutical distribution sector, a specialized segment of the pharmaceutical industry, is increasingly embracing the trend of “cloud migration.”

Recently, Realcan Pharmaceutical Group Co., Ltd., a leading enterprise in China’s pharmaceutical distribution industry, signed a strategic cooperation agreement with Amazon Web Services (AWS). The two parties will implement enterprise application modernization, as well as develop microservices and cloud-native services, based on Realcan Pharmaceutical’s business scenarios and requirements, ultimately establishing the company as an industry benchmark for digital transformation.

As one of the Fortune China 500 companies, Realcan Pharmaceutical Group has more than 100 controlled subsidiaries and a workforce of over 8,000 employees. By establishing a nationwide presence and building an integrated business-finance platform, Realcan Pharmaceutical serves tens of thousands of hospitals and pharmacy clients across China. Currently, it covers more than 8,000 secondary-and-above hospitals and over 33,500 primary healthcare institutions, while collaborating with more than 30,000 suppliers. Behind this extensive commercial footprint, Realcan Pharmaceutical relies on an enterprise-wide smart big-data information system—the SAP system—to provide operational support.

However, changes in the internal and external environment have prompted Realcan Pharmaceutical Group Co., Ltd. to pursue innovation and transformation, further accelerating its digital business transformation.

From the external environment perspective, as national healthcare reform policies continue to deepen, the industry is experiencing rapid changes; meanwhile, regulatory and compliance requirements are becoming increasingly stringent.

From an internal perspective, Realcan Pharmaceutical’s core SAP ERP system is facing mounting operational and maintenance pressures. Seeking change, Realcan Pharmaceutical established its “cloud-first” digital transformation strategy as early as 2020. The company aims to better support the layout and expansion of new businesses by developing more cloud-native applications. Furthermore, Realcan Pharmaceutical is pursuing innovation in its digital organization by leveraging digital tools to comprehensively empower employees, thereby fostering an innovative organization, culture, and mechanisms.

Against this backdrop, Realcan Pharmaceutical Group Co., Ltd. chose to partner with a cloud service provider to implement a “cloud-first” digital transformation. “Digital transformation begins with selecting the right platform—one that features a robust technological foundation and offers universality and openness. An ideal platform must be reliable and stable, while also providing ongoing professional services. These criteria form the basis of our strategic cooperation agreement. We hope that AWS will support Realcan Pharmaceutical in achieving steadier, stronger, and better growth,” said Han Xu, Chairman of Realcan Pharmaceutical Group Co., Ltd.

As Han Xu, Chairman of Realcan Pharmaceutical Group Co., Ltd., stated, the decision to partner with Amazon Web Services was based on the following reasons—

First, the provision of cloud services requires ensuring stability and technical security. As a pioneer and leader in cloud technology, Amazon Web Services (AWS) can provide Realcan Pharmaceutical Group Co., Ltd. with essential cloud technical support and comprehensive security assurance services from a professional perspective.

Secondly, Realcan Pharmaceutical required in-depth collaboration to achieve its cloud transformation, a need met by Amazon Web Services (AWS). With its profound industry expertise, customer-centric philosophy, unique culture of innovation, and comprehensive training and end-to-end professional consulting services, AWS has laid a solid foundation for Realcan Pharmaceutical’s organizational cultural shift toward “cloud-first,” while broadening its horizons for digital transformation.

In fact, with the support of AWS Professional Services, Realcan Pharmaceutical Group Co., Ltd. has successfully migrated its entire SAP core business system to the cloud. To date, it has migrated more than 50 enterprise application systems and over 200 servers to Amazon Web Services (AWS), becoming the first company in China’s pharmaceutical distribution sector to fully migrate to the public cloud.

After partnering with AWS to achieve cloud migration, Realcan Pharmaceutical has seen significant results—

First, Realcan Pharmaceutical achieved innovation in its core systems by successfully migrating to the cloud. Currently, Realcan’s core ERP system and other business systems, including the operations of all its subsidiaries across China, are running on the Amazon Web Services (AWS) cloud platform, thereby revolutionizing Realcan’s IT systems and architecture.

Secondly, system stability has been significantly improved. It is reported that the current system reliability of Realcan Pharmaceutical Group Co., Ltd. has increased to 99.99%. In addition, the average latency from the central system components to the data warehouse has decreased from 22 milliseconds to 9 milliseconds, enabling rapid cloud-based responses and the ability to quickly meet the needs of tens of thousands of customers across China.

Once again, cost reduction and efficiency improvement have been achieved. Compared with the traditional approach of building self-owned IDCs, there is no need to worry about the lengthy procurement and installation process. New applications can be deployed within hours, while monthly system maintenance costs are reduced by more than 100,000 yuan.

Furthermore, it meets Realcan Pharmaceutical’s data security and compliance requirements. As the pharmaceutical distribution industry is heavily regulated, Realcan Pharmaceutical has built a comprehensive security defense mechanism on the cloud through its collaboration with Amazon Web Services (AWS), safeguarding the data assets of both the enterprise and its customers.

Finally, for Realcan Pharmaceutical Group Co., Ltd., the in-depth collaboration between the two parties enabled the company to build a team and talent pool aligned with its “Cloud First” strategy, thereby strengthening its internal talent reserves.

Building on the consensus reached during the initial phase of their partnership, Han Xu, Chairman of Realcan Pharmaceutical Group Co., Ltd., and Wang Chenghua, General Manager of Professional Services for Greater China at Amazon Web Services (AWS), stated that both parties will continue to advance their “cloud-first” strategy, further deepen collaboration to explore new opportunities in the healthcare industry, accelerate the deployment of more cloud-native scenarios and services, and jointly drive cultural innovation.

“When it comes to truly addressing new business challenges, I believe the biggest task for traditional enterprises in the era of digital-native and cloud-native technologies is to integrate the ‘cloud-first’ philosophy into their overall corporate strategy, organization, and culture, and to genuinely leverage new technologies to drive business transformation and innovation,” said Wang Chenghua, General Manager of Professional Services, Greater China, at Amazon Web Services (AWS).

And AWS is undoubtedly capable of helping Realcan Pharmaceutical achieve true digital transformation—

First, it boasts a global infrastructure footprint. In China, it operates three physical regions—the Ningxia Region operated by West Cloud Data, the Beijing Region operated by Sinnet, and the Asia Pacific (Hong Kong) Region—providing robust infrastructure support for enterprises.

Secondly, it provides technologically leading cloud services. Since Amazon Web Services (AWS) launched the industry’s first public cloud product, Amazon S3, it has introduced more than 200 cloud services. This includes the launch of its proprietary Amazon Graviton chips, which deliver up to a 40% improvement in price-performance ratio compared to traditional x86 architectures.

Third, extensive industry expertise. The 28-week migration of Realcan Pharmaceutical Group Co., Ltd. to the cloud was made possible by Amazon Web Services’ wealth of global industry experience.

Furthermore, it offers industry-leading compliance and security capabilities and practices. Amazon Web Services (AWS) holds over 50 healthcare-specific certifications globally, including HIPAA in the United States, GDPR in Europe, and China’s Multi-Level Protection Scheme (MLPS) Level 3, enabling customers to directly inherit these certifications. Its mature security solutions also help customers achieve robust security protection and meet compliance requirements.

Finally, dedicated industry solutions teams. AWS has established specialized industry solutions teams to help enterprises achieve innovation empowerment. Furthermore, its culture of innovation also facilitates innovation in customers’ corporate cultures and organizational structures.

The transformation of the pharmaceutical industry continues to accelerate.

Behind the collaboration between pharmaceutical companies represented by Realcan Pharmaceutical Group Co., Ltd. and cloud service providers represented by Amazon Web Services, we see an accelerated push toward cloud-based digital transformation in the pharmaceutical distribution sector, a niche segment of the pharmaceutical industry.

As more and more companies in specialized segments of the pharmaceutical industry migrate to the cloud, we may well see the emergence of new business models at an accelerated pace. This, in turn, could further benefit the entire industry chain, ultimately serving every stakeholder involved, including pharmaceutical companies, physicians, and the vast patient population.