BEIJING, May 6 (CEIS): Medicine prices are falling continuously, the profitability of pharmaceutical enterprises in China as a whole is declining sharply to enter a small profit era, an average of two pharmaceutical enterprises and three pharmaceutical distribution enterprises are being eliminated every day.

All these are signs that China's pharmaceutical industry is about to see a turning point, and this will create a prime time for foreign pharmaceutical giants to enter the country through mergers and acquisitions (M&A) at a low cost. Of course, this will also create great opportunities for leading domestic pharmaceutical makers to achieve quick expansion through M&A.

At a national medicine fair held recently in Zhengzhou, central China, participants widely hold that many domestic pharmaceutical enterprises are now in operating difficulty under cost pressure, market pressure and the pressure of high risks in R&D.

In recent two years, the general cost of the pharmaceutical industry in China has risen all the way, owing to the hikes of raw and auxiliary materials, energy supply and transportation costs.

Meanwhile, different from the circumstances in other nations, some 80% of the medicines in China need to be sold via hospitals. As the policy stipulates that hospitals may add 15 per cent on the price of procured medicines as their own profit, hospital prefer expensive medicines, making lot sale of medicines really effective but priced low and affordable by patients difficult to be realised, Shanghai Securities News quoted a pharmaceutical company representative attending the fair as saying.