Nanjing Pharma Undergoes "Major Reshuffle," Vice President Casts Three Abstention Votes

Source: Jian Shi Ju

A simple announcement has revealed an unseemly personnel shake-up.

On March 16, Nanjing Pharmaceutical held a temporary two-day Board of Directors meeting. The most important agenda was a major management overhaul. All six motions on the agenda were approved. Interestingly, Director Luo Xunjie abstained from voting on three motions, including his removal from the board and his dismissal as vice president.

After the personnel changes, the foreign director Marco Kerschen, who was not present, also stepped down along with Luo. Their original terms were until 2028, but due to significant changes in Nanjing Pharmaceutical’s shareholding structure—GPH Group’s entry—Luo Xunjie, who had exited as a funding partner, was clearly going to be ousted early. However, Luo’s abstention vote seems to carry a subtle message, almost a silent final statement.

Recently, mergers among pharmaceutical companies have been frequent. Usually, management changes are relatively smooth—for example, China Resources Sanjiu’s acquisition of Tasly, where the Yan family voluntarily stepped back to preserve face. Such situations are rare for companies like Nanjing Pharmaceutical.

GPH Group’s Entry: A “Major Shake-up”

Luo Xunjie represented one of Nanjing Pharmaceutical’s significant former shareholders: Alliance Healthcare, a subsidiary of the international pharmaceutical retail giant WBA.

On February 26, 2026, Alliance Healthcare transferred all 11.04% of its Nanjing Pharmaceutical shares to GPH Group. The foreign investor announced a complete exit, making GPH Group the second-largest shareholder. With this, the strategic cooperation agreement with foreign investors was nullified, and Luo Xunjie and another director, Marco Kerschen from Luxembourg, who represented foreign interests, were expected to accept their fates calmly.

However, Luo Xunjie was clearly unwilling to accept this. His background and capabilities are impressive—he has held key positions at Fortune 500 companies like Emerson and Eaton. He was the only director at Nanjing Pharmaceutical with multinational experience and had worked there for nearly ten years, leading multiple acquisitions and integrations that contributed to the company’s growth.

When Nanjing Pharmaceutical decided to introduce foreign capital in 2014, the goal was to learn advanced international concepts and promote the upgrading of the traditional domestic industry. Since then, the industry has undergone significant changes—after the “two-invoice system,” the landscape has become dominated by state-owned China National Pharmaceutical Group, China Resources, and local giants like Hubei Yao. Local companies either defect to the “triumvirate” or cling to their existing territory, making large-scale growth difficult.

GPH Group’s acquisition of Nanjing Pharmaceutical shares is a rare merger among regional distributors, aiming for scale expansion. As a result, Luo Xunjie’s multinational management background became less relevant. More importantly, in the corporate world, new leaders replace old ones—once the emperor changes, the ministers must follow.

Replacing Luo Xunjie is Chen Guangyan, a seasoned veteran of GPH Group. He joined Guangzhou Pharmaceutical Factory in 1988, starting as a workshop technician and steadily rising through roles such as Quality Inspection Section Chief and Quality Control Department Manager. Over thirty years, he has held several key positions within GPH. In July 2025, Chen was appointed Chairman of Guangzhou Pharmaceutical Co., Ltd.

GPH’s appointment of him as an independent director at Nanjing Pharmaceutical indicates that GPH intends not only to be a financial investor but also to deeply participate in Nanjing Pharmaceutical’s governance and lay the groundwork for strategic synergy.

GPH’s Ambition Beyond “South China Tiger”

The partnership between GPH and Nanjing Pharmaceutical reflects recent shifts in the pharmaceutical distribution industry. GPH’s Baiyunshan has long been confined to South China. In the first half of 2025, its revenue in South China reached 31.19 billion yuan, more than nine times that of East China. Nanjing Pharmaceutical, as a leading enterprise in Jiangsu’s pharmaceutical distribution, covers Jiangsu, Anhui, Fujian, and Hubei, reaching nearly 70 cities.

In the 2024 wholesale ranking of pharmaceutical distribution, Guangzhou Pharmaceutical (under Baiyunshan) and Nanjing Pharmaceutical ranked sixth and seventh, respectively. Both are similar in size and regional coverage, and their combined strength aims to challenge the “Fourth” position held by Jiuzhou Tong. Now that GPH has taken control, it is rapidly replacing personnel—likely to quickly position its core team and expand into the East China market.

At the end of 2024, Li Xiaojun took over as Chairman of GPH Group, proposing to “recreate a new GPH.” Over the past year, GPH’s restructuring has accelerated. In December 2024, Guangzhou Pharmaceutical invested 500 million yuan to acquire Zhejiang Medical Industry Company, marking its entry into Zhejiang.

Previously, during a survey, Baiyunshan openly stated that Guangzhou Pharmaceutical lacked subsidiaries in the Yangtze River Delta. By acquiring Nanjing Pharmaceutical shares and Zhejiang Medical, Guangzhou Pharmaceutical aims to optimize its industrial layout in East China and strengthen its competitive edge in pharmaceutical distribution.

Baiyunshan also needs to rapidly expand its business footprint. From the revenue perspective, in the first half of 2025, GPH Baiyunshan’s revenue was 41.835 billion yuan, up 1.93% year-on-year—a modest growth. Its four main sectors—Traditional Chinese Medicine, Healthcare, Commercial, and Medical—are all sizable. The Commercial sector, which is the pharmaceutical distribution segment, earned over 27.2 billion yuan in the first half of 2025, but with a gross profit margin of only 6.13%.

A decade ago, Nanjing Pharmaceutical introduced foreign capital to learn international experience and develop high-margin, refined business models. But after ten years, China’s pharmaceutical distribution industry has reverted to a scale-based competition cycle. Only by expanding scale can costs be spread out. In recent years, the industry has been characterized by “big fish eating small fish,” with everyone fearing that falling behind will result in being eaten.

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