医药行业的报告

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1、McKinsey was commissioned in Q1,2003 to:?provide dedicated effort in conducting in-depth market survey and collect detailed information from 4 cities within 2 provinces to identify the key growth drivers in Chinas broad market;?4 product categories were included:G.I.(Motilium),OBGY(Gyno.),Nail Infec

2、tion(Sporanox)&Vertigo(Sibelium)?provide objective assessment about the broad market opportunity(not including any urban centres);?provide business model/proposal for XJP to capture the broad marketMcKinsey Broad Market Study Process?Project design(Q1,2003)?Project review with local and regional J-C

3、 team(Apr.03)?Survey market selection(Apr.03)?Field work in 2 cities in Shandong(May 03)?1stinterim report(mid-June 03)?Field work in 2 cities in Sichuan(mid-June mid-July 03)?2ndinterim report and Killer Idea workshop(end July 03)?Final report(Aug.03)?Presentation to corporate management(Sept.03)BR

4、OAD MARKET CAN BE DEFINED AS CLASS 2 HOSPITALS AND BELOW AT REGIONAL CITY LEVEL AND ALL HEALTH CARE INSITITUTIONS AT COUNTY Regional cityCountyTown VillageSource:McKinsey analysisLEVEL AND BELOWBroad marketClass 2&below Class 3 hospitalhospitalPharmacy Clinic BROAD MARKET DRUGS INCLUDE OTC AND“OUT P

5、ATIENT”Rx DRUGSTargeting easily diagnosed,non-life threatening diseasesEasy to useRelatively cheapRelatively safe with few side effectExamplesSource:McKinsey analysisBroad market drugsOTCRxMatureNewOutpatientIn-hospitalMotiliumGyno-DaktarinSporanox/CipramilSibeliumMcKinsey Key FindingsOverall Market

6、 SituationBROAD MARKET REPRESENTS 94%OF OVERALL DEMAND FOR Broad marketBROAD MARKET DRUGSBroad market drug sales breakdown by geographyPercent 100%=3.66%20Sales breakdown of XJP productPercent 100%=211%152.36201.3621Bn RMBOther channel at city level6721215Mn RMB City County 2824Broad market represen

7、ts 94%of demand36393138Town 1916242647241919Village 183315212Class 3 hospitalAll 4 citiesGDP per capita:#of county9,199Shandong*11,300Sichuan*5,801Motilium Gyno-DaktarinSibelium*321814County is critical for broad market*For only 2 according cities*Data for only Sichuan provinceSource:Interview with

8、distributors,hospitals,pharmacies&clinics;McKinsey analysisDUE TO LOW INSURANCE COVERAGE AND RECENT REIMBURSEMENT POLICIY CHANGES,MOST PATIENTS PAY BROAD MARKET DRUGS BY THEMSELVESInsurance coverage in Yantai&JiningInsured3-510-151020-3095-97Self-pay70-8085-9099100Total City County Town Village Sour

9、ce:Interview;focus group;McKinsey analysisFor those with insurance,they can use their personal accounts(RMB 100300 per year)to cover their broad market drug expenseIn loosely controlled region(like Yantai),patients can treat the personal accounts as savings accountPatients pay on their own after the

10、 account balance is zeroA majority of population does not have insuranceThey pay broad market drugs by themselvesPATIENTS GO TO PHARMACY/CLINICS FOR MINOR SYMPTOMSDriversLargest hospitals in city and countyMiddle-small hospitals in city and countyTown hospitalPharmacy/clinicsIncreased price sensitiv

11、ityChanged medical insurance policyImproved highway infrastructureRich information accessTVNewspaperSevere symptomsMinor symptomsIncreased life paceNo time to visit hospitalCity patientsRural patientsPharmaceutical market deregulation policyMore and more pharmacies&clinicsConveniently locatedMiddle-

12、small hospitals find it hard to survive due to lack of patientsSource:Interview;McKinsey analysisA LARGE PROPORTION OF DRUG SALES COMES FROM RETAIL PHARMACIES;PHARMACY CLERKS BECOME INFLUENTIALTotal drug sales breakdownPercent Pharmacy 37%423352Hospital 3013353245Clinics313216Overall Motilium Gyno S

13、ibelium DaktarinXJP should design special initiatives to target pharmacy channels*40%of the patients changed their mind in pharmacySource:Interview;Focus group;McKinsey analysis“When I go to the pharmacy without a drug in mind,I just ask the pharmacy clerk to recommend.Then I will check the drugs in

14、troduction sheet,if this drug covers my disease,I will have a try”Yibin city level focus group“What makes you change your perceived drugs?”*Pharmacy patient surveyPercent,Shandong city levelChanged mind by myselfPerceived drug not 16Perceived drug available;persuaded 47available but by pharmacy 37pe

15、rsuaded by clerkpharmacy clerkCLINICS ARE PLAYING IMPORTANT ROLE ESPECIALLY AT COUNTY AND TOWN AND BELOWClinics share in total drug salesPercent SichuanOverall 36%Shandong27%City 83XJP should think about cost-effective way to lock in individual clinic/barefoot doctorsCounty268Town 3427Village 100100

16、Source:Interview;McKinsey analysisG.I.Category ReviewPercentFOR GI DISFUNCTION DRUGS AS A WHOLE THERE IS SIGNIFICANT LATENT DEMAND;PEOPLE GENERALLY SEEK TREATMENT IN CLINICS AND PHARMACIESMotiliums market 100Motilium has a vast room for grow because of significant leakage along the patient flow3060%

17、of GI patients that do seek treatmentCurrent market share of 4%which could be grown furtherAmong the 40%people who seek GI treatment,about 30%would buy banded generic drugs*,while the rest would buy non-brand generic drugs30401.6%52020Total Not awareDo not seek Seek Go to large Go toSelf medicate in

18、cidence treatment treatment hospital*small clinicat pharmacy*More than half of patients going to large hospitals will purchase drug at retail pharmacies*Branded generic drugs referring to generic drugs that run advertising,creating brand awareness in consumersSource:Physician and pharmacy interviews

19、;McKinsey analysisshareLatent market demand 60%of total patients do not seek any treatmentAs market leader,increasing awareness for Motilium to further boost treatment rate is one of the key demand levers Small clinics and pharmacies are important channels75%of patients seeking treatment go to clini

20、cs and pharmaciesFOR GI DRUGS,POLARIZATION IS BECOMING MORE OBVIOUSROUGH ESTIMATIONAnecdotesQuantitative examplesSub-TA sales by channelPercentYantai“Unlike things in the past,patients 20nowadays generally try to avoid coming Hospitalto hospitals because of hospitals 5040expensive charges.For GI dis

21、ease,most 40people can judge by themselves.So they usually prefer to go to pharmacies or Retail 30Pharmacy30clinics to buy drugs.”40 Qixia GI physician interviewClinic2030199719992002Jining“Most GI patients are repeating patients.10They know which drugs to buy,and Hospital30where the drugs are cheap

22、.So usually 5030they will choose pharmacies&clinics.”20 Jining retail pharmacist interviewRetail Pharmacy10Clinic405060199719992002Source:Hospital pharmacy interviews;retail pharmacy interviews;McKinsey analysisImportance of GI drug sales in hospital is diminishingRetail pharmacy would be the major

23、battle field for GI drugsSALES OF GI DRUGS ARE MORE CONCENTRATED TOWARDS VILLAGE AND COUNTY,WHILE THE MARKET IS FRAGMENTED WITH MANY DIFFERENT DRUGSPercentTotal=RMB 243.05 millionCity Village 154126CountySidashu(斯达Mosapride舒)Weiershu(莫沙比利)(谓尔舒)Motilium3343Tidines*(替丁类药)1869Others*19Town*Others inclu

24、ding more than 200 different GI drugs such as Kuiweipian(快胃片)、Weifuan(w胃复安)、Jinweixiaoshipian(健胃消食片)、999(三九胃泰)、丹桂香、胃舒平、健胃酵母片、果胶铋、邦消安、调胃片、胃气痛片、湿胃舒、养胃舒,and many other cheap non-branded generic drugs*Including Cimetadine,Ramitidine&FamotidineSource:Distributor interviews;physician interviews;patient in

25、terviews;McKinsey analysisIN BROAD MARKET,MOTILIUM IS LOSING OUT BIG TIME IN RETAIL YANTAI&JININGPHARMACY CHANNEL Sales by channelMn RMB,%GI drugs 123553Motilium 143452Sidashu(斯达舒)66629Weiershu(谓尔舒)57620Mosapride(莫沙比利)403821Tidines(替丁类药)42273HospitalRetail ClinicpharmacySource:Distributor interviews

26、;hospital pharmacy interviews;retail pharmacy interviews;McKinsey analysis243.059.836.627.307.9344.64 AND IN COUNTY GEOGRAPHYYANTAI&JININGSales by strataMn RMB,%GI drugs 15261941Motilium 15222043Sidashu(斯达舒)22372615Weiershu(谓尔舒)2644219Mosapride(莫沙比利)18502310Tidines(替丁类药)1171766City County TownVillag

27、eSource:Distributor interviews;hospital pharmacy interviews;retail pharmacy interviews;McKinsey analysis243.059.836.627.307.9344.64Vaginal Infection Category ReviewFOR VAGINAL INFECTIONS,PATIENTS ARE MORE AWARE OF THE DISEASE AND GO TO HOSPITAL FOR TREATMENT Percent10030%would use branded drugs,1whi

28、le 70%would use non-branded drugs Hospital is still number 1 20channel to push Gyno Daktarin 80salesPharmacy is becoming increasingly important55025Total Not awareDo not seek Seek Go to large Go toSelf medicate at incidence treatment treatment hospitalsmall clinicpharmacySource:Physician,pharmacy an

29、d clinic interviewsLess latent demand Almost all patients aware of the disease due to obvious symptoms and regular check up80%of patients seek treatmentLarge hospital is important influencing channel Most patients seeking treatment will go to large hospitalsThough half or more will purchase prescrib

30、ed drugs in pharmaciesMarket player should focus on share gainFOR GYNO DAKTARIN,HOSPITAL IS CRITICAL FOR PRESCRIPTION BUT PURCHASING HAS BEEN GRADUALLY SHIFTING TO RETAIL PHARMACYESTIMATEAnecdotesQuantitative examplesSub-TA sales by channel“Gyno patients will usually come to hospital for body check

31、and go to pharmacies to refill drugs.For such kind of disease,people still trust large hospitals.However,more and more people purchase drugs in pharmacies”Liangshan No.2 hospital,Gyno physician interview“I dont have many gyno patients.This is because of 3 reasons.First,I am a man;second,I dont have

32、facilities to check the body in the clinic;third,patients are usually familiar with me and they will feel awkword.”Zhangyongxin town level clinic interviewSource:Hospital interviews;Retail pharmacy interviews;McKinsey analysisPercentYantaiHospitalRetail PharmacyClinicJiningHospitalRetail PharmacyCli

33、nic45806545203005101997199920023055806040200510199719992002IN ADDITION,GYNO DAKTARIN NEEDS TO GROW THE MARKET SHARE ESPECIALLY THOSE OF COUNTY AND TOWNYANTAI&JININGSales by strataMn RMB,%Vaginal infection drugs2650204Gyno Daktarin4247 12 02.47Xiaomishuan(消糜栓)2443320 4.54Mycostatin(制霉菌素)414613 04.46S

34、huangzuotaishuan(双唑泰栓)3593805.46Jieeryin(洁尔阴)94327225.83CityCountyTownVillageSource:Distributor interviews;hospital pharmacy interviews;retail pharmacy interviews;McKinsey analysis71.38Nail Fungal Infection Category ReviewPercentFOR TINEA UNQUIUM DRUGS,DEMAND LATENCY IS EVEN HIGHER100Low treatment r

35、ate is mainly due to 20affordability issue of the patientsSporanoxs potential market as a Tinea Unquium drug is small,and is unlikely to be a broadmarket hit70Only 1%actually buy drugs10505Total Not awareDo not seek Seek Go to large Go toGo to incidence*treatment treatment hospitalclinicpharmacy dir

36、ectly*The incidence rate is around 5%in ShandongSource:Physician and pharmacy interviews;McKinsey analysisExtremely latent demand with increasing awareness 90%of patients do not seek treatmentAwareness and treatment rate is increasing slightly due to competitors heavy advertisingOnly around 10%of th

37、ose seeking treatment purchase drugsOnly 1%would follow prescriptionHOSPITAL CHANNEL IS STILL DOMINATING TINEA UNQUIUM DRUG MARKET WHILE PHARMACY CHANNEL IS PICKING UPAnecdotesQuantitative examplesSub-TA sales by channelPercentYantai“We gradually carry some Tinea Unquium drugs in these years.Because

38、 more and more patients,although still quite small in amount,come here to ask for Liangjia after seeing its advertisement.HospitalI think most patients still go to hospital for treatment.”Jining Kangfu pharmacyRetail PharmacyClinicJining“I seldom see Tinea Unquium patients.And also,because the drugs

39、 are very expensive,I didnt carry them.If there is really someone come to my clinic,I will Hospitalsuggest them to pharmacy.”Yantai clinic interviewRetail PharmacyClinicSource:Hospital pharmacy interviews;Retail pharmacy interviews;McKinsey analysis507090501030001199719992002908075010152055199719992

40、002THERE ARE ONLY A FEW COMPETITORS AT CITY AND COUNTY LEVEL FOR SPORANOX;LIANGJIA IS DOING BETTER THAN SPORANOX AT RETAIL PHARMACIES DUE TO HEAVY ADVERTISINGPercentTotal=RMB 9.22 millionVillage 0Town Liangjia(亮甲)21444Lanmeishu(兰美抒)City 16County544624SporanoxOthers*Others including around five drugs

41、,such as Huihuangmeisu（灰黄霉素）,Lisulao（里素劳）,Lianghuija（亮灰甲）etc.Source:Distributor interviews;physician interviews;patient interviews;McKinsey analysisTHERE ARE ONLY A FEW COMPETITORS AT CITY AND COUNTY LEVEL FOR SPORANOX;LIANGJIA IS DOING BETTER THAN SPORANOX AT RETAIL PHARMACIES DUE TO HEAVY ADVERTIS

42、INGShare of leading drugs within Tinea Unquium Yantai&JiningMn RMB,%City County 100%=4.01.82.20.15.04.10.80.214%5%Sporanox26%29%25%22%12%100525%08111427Lanmeishu*2017(兰美抒)3174Liangjia(亮甲)210398573575461Others334025TotalHospitalRetail ClinicTotalHospitalRetail ClinicpharmacypharmacySource:Distributor

43、 interviews;physician interviews;patient interviews;McKinsey analysisLiangjia has relatively high market share in retail pharmaciesAt city level,Lanmeishu has 31%of hospital channel,better than SporanoxHospital at county level and above should be the main focusRMBPRICE IS A HUGE ISSUE FOR SPORANOX50

44、0420200801520County level City level County level price price annual drug Average Cost of Cost of threasholdthreashold expense per insurance sporanox as sporanox as personallowance a derma a STD drugper yeardrugSource:Interviews;McKinsey analysisSporanox is too expensive for most farmers whose annua

45、l income is only around RMB 2,000Even at county level,cost of using sporanox for effective treatment is higher than total drug expense per year for an average personFOR SPORANOX,XJP SHOULD CONTINUE TO FOCUS ON HOSPITALS Sales by channelMn RMB,%Tinea Unquium6533YANTAI&JINING2 9.22Sporanox69301 2.21La

46、nmeishu*(兰美抒)8415 01.50Liangjia(亮甲)12872 1.26HospitalRetail ClinicpharmacySource:Distributor interviews;hospital pharmacy interviews;retail pharmacy interviews;McKinsey analysis AND AT CITY AND RICH COUNTIESYANTAI&JININGSales by strataMn RMB,%Tinea Unquium drugs445420Sporanox48502 1 2.21Lanmeishu*(兰

47、美抒)5347111.50Liangjia(亮甲)6729 4 01.26City County Town VillageSource:Distributor interviews;hospital pharmacy interviews;retail pharmacy interviews;McKinsey analysis9.22Vertigo Drug Category ReviewTHERE IS UNTAPPED DEMAND IN TWO OF THE THREE PRODUCT-RELATED TAsGI disfunction patient flow in broad mar

48、ket percentVI patient flow in broad marketpercentVertigo patient flow in broad marketPercent?Vertigo incidence rate is only 1%-3%?Sibelium can target more indications with much larger patient population1204030402040Total Not incidenceawareDo not Seek seek treatmenttreatmentTotal Not incidenceawareDo

49、 not Seek seek treatmenttreatmentTotal Not incidenceawareDo not Seek seek treatmenttreatment99608010001?Huge latent demand?Awareness can be increased by patient education?Affordability can be improve due to economic development10030100Source:Hospital&pharmacy interview;McKinsey analysisBY GEOGRAPHY,

50、COUNTY LEVEL AND ABOVE CONSUME A DOMINANT SHARE OF SIBELIUMPercentTotal=RMB 2.0 million for sales of Sibelium in Deyang and YibinSibeliums market share in dizziness drug sales in Deyang and YibinSales of City County2738Village 1224Town Source:Interviews;McKinsey analysis100%=1.65 2.64 1.88 1.79(Rmb

51、Mm)13%25%Sibelium 32%28%Others 87%68%72%75%City County Town VillageSibelium is more dominant in city and county level Market share of Sibelium in total drugs for dizziness is also higher in county level and aboveMcKinsey Broad Market ProposalWE NEED TO SOLVE THREE CRITICAL ISSUES TO ACHIEVE OUR ASPI

52、RATION FOR BROAD MARKETBuild a solid platformPrioritize market opportunitiesFinancial and org.implication“Capturing broad market”“Hospital“Pharmacy“DistribSeeding”Plus”for utor for large large network county pharmacy to county hospitalschainslevel”“Turbo CME”for clinic/barefoot doctors and township

53、pharmacies332 regional cities(whole China)Around 80 regional citiesSub-market within a regionInvestmentReturnsPeople developmentOrganizationXJP broad market teamXJP NEEDS TO INVEST TO CAPTURE THE GREAT POTENTIAL IN BROAD MARKETHigh potential broad marketOpportunity vs.XJP coverage gapNew initiatives

54、 Broad market drug sales breakdown by geographyPercent,all 4 citiesInsufficient coverage of county hospitalsCounty hospitals represents 16%of demandLargest county hospitals can heavily influence consumption of Gyno DaktarinXJP only cover 23%of Tier II and 12%of Tier I hospitals Detail to county hosp

55、italsClass 3 hospitalsVillage 619Other channels at city levelNearly no coverage of pharmaciesPharmacy represents 37%of demandPharmacy in county and below represents 23%of demandIn developed cities,pharmacy chains are playing dominant roleXJP now only covers city level pharmacies in several large cit

56、ies20Town 19Control large pharmacy chains at county level36County Low utilization of distributors pushBroad market:94%of overall demandCounty and below:74%of overall demandDistributors have influence on clinic and pharmaciesXJP has not utilized distributors capability to push sales of XJP productsGi

57、ve distributors more incentive to push for XJP productsNearly no coverage of barefoot doctorsBarefoot doctors represent 45%of GI drug sales and 33%of Vertigo drug salesXJP has almost no coverage on themSource:McKinsey analysisAdapt CME focus to barefoot doctorsDURING OUR KILLER IDEA WORKSHOP,WE DEVE

58、LOPED FOUR SETS OF HYPOTHESIS TO BE TESTED IN PILOT“Hospital seeding”?One sales rep per region?Sales reps are dedicated and with medical background?For the covered region,all county No.1 and 2 large hospitals should be covered?Focus on Gyno-Daktarin but also detail Motilium,Sibelium,Daktarin,and oth

59、er XJP drugs“Pharmacy plus”?Three sales reps per region,covering top three pharmacy chains?For the covered pharmacy chains,all county and some towns should be covered?Focus on Gyno-Daktarin and Motilium but also push other XJP drugs?“Sweeties”to pharmacy owners could include information system suppo

60、rt,training,in store advertising,gifts in box,and pharmacy owner club?“Sweeties”to pharmacy clerks could include Broad market,travel for star staff,training,and gifts in box“Distributor network to county level”?One rep per region,covering all county No.1 distributors?Rewrite distributor contract?Lev

61、erage distributor network and push distributor staff to reach the villages/clinics?“Sweeties”to distributor could include information system support,training,and distributor club?“Sweeties”to distributor staff could include travel for star staff and trainingespecially county level“Turbo CME”*?Will b

62、e conducted by HQ OTC CME team.Local sales team will provide coordinating support?Workshop holds once a year in each county?Target audience is clinic/barefoot doctors?Focused drug include Motilium,Daktarin,Pevison,and Sibelium?Leverage local healthcare authority and associations to reach mass number

63、 of clinic/barefoot doctors*Summary based on Zhejiang field trip and internal interviewsComments on the McKinsey Proposed InitiativesHospital SeedingBesides testing the idea to conduct professional detailing to the county hospitals,we also want to provide coverage among the smaller hospitals(Tier I&

64、II)in the urban cities to compare the R.O.I.sPharmacy PlusWe have seen competitors(like SiDaShu)sales growth via aggressive coverage and promotion among the drugstores in the richer countis.So,this is definitely worth testing.Comments on the McKinsey Proposed InitiativesDistributor DriveWe have expa

65、nded our distribution network to include almost 1,000 sub-distributors in the last 3 years.We will try to test the sales impact if we invest more program and resources among them.Turbo CMEWe have started CME program among county hospital doctors.It would be interested to find out the sales contribut

66、ion if we conduct the program among the barefoot doctors.XJP COULD ADOPT A THREE-PHASED ACTION PLAN TO ESTABLISH ROUGH ESTIMATEAND MAINTAIN DOMINANT POSITION IN BROAD MARKETPhase III:Strengthening and maintaining the dominant positionPhase II:Dominating the broad marketPhase I:Capturing the broad marketTime frame200520071/4 of all regions(about 80 regions with 500 counties)Cover county level(leveraging CME to reach town and below)200820101/2 of all regions(about 170 regions covering 1,100 counti