Study On The Cost Control Of Jin Feng Pharmaceutical

The pharmaceutical industry has kept an average annual growth rate of17.2%since the reform and opening up of China, and has become one of the fastest growing industries of the national economy of our country.In order to safeguard the people’s health and interests, as well as to promote the sustained and healthy development of the pharmaceutical industry, our country made plan for the reform of the pharmaceutical and health care system in the12th five-year plan. In the end of2013, the government has already made twice adjustments for the price of medicine, and will continue to expand the range of essential drugs. At the same time, the new revision of GMP design has made higher requirements for the designing, the production and the installation of the production equipments of the pharmaceutical enterprise. So we can draw a conclusion that the challenges and opportunities can coexist with each other in the pharmaceutical industry. The Jin Feng pharmaceutical enterprise is located in Heilongjiang Province and is a collection of scientific research, production and sales. After nearly18years of development, this company has owned5subsidiaries and14GMP production lines with the national certification, the production involve more than200species in the field of four major categories, they are the cardiovascular, the orthopedics, the nervous system and the antineoplastic. Till the year of2013, the total value of the company has reached0.78billion yuan. While compared with last year, the sales revenue increased74,475.4thousand yuan, the net profit reduced nearly30%, and the rate of selling cost rose for6%, all the data reflected that the company had to strengthen the control on the cost of drug.As a manufacture of generic drug production, in the face of a higher cost of the raw materials, the labor costs and the homogeneity of the drugs, the superiority of the cost become particularly important for the company, especially when the pressure is not only from the domestic, but also from the international market, all the drug firms want to grab the share market, the competition is becoming more and more serious. Jin Feng have to make a strict control over the cost in order to achieve a long time development. Under the same condition of the price and the quality of the medicine, the company can gain a better profit with a lower cost. Therefore, the key to the development of Jin Feng is to make an effective control on the cost.Through regulating domestic and overseas literatures about research status of cost control, and supported by the theory of constrains, value chain, cost driver, fundamental competition and lean production. I will make a case analysis about the cost control status of Jin Feng pharmacy through analyzing the implication, method, principle and procedure of cost control so that I can go deep into those existing problems of cost control in each professional work of Jin Feng pharmacy. At the same time, I will select four domestic and overseas enterprises which of different business or the same business with distinct scale as the objects of experience reference. Finally, I will put forward some counter-measures according to the existing problems in the four links of the business process of Jin Feng pharmacy and the basic of taking examples of other enterprises’ experiences in cost control.