SOURCE: First China Pharmaceutical Group, Inc.

First China Pharmaceutical Group, Inc.

November 16, 2010 09:00 ET

First China Pharma Grows Market Share With New Distribution Agreements at 5 Regional Hospitals in China

HONG KONG--(Marketwire - November 16, 2010) - First China Pharmaceutical Group, Inc. (OTCBB: FCPG) ("First China" or the "Company") is pleased to announce it has recently entered into agreements to distribute a full spectrum of medicinal and pharmaceutical products to five district hospitals in Yunnan Province. This announcement brings the Company a total of 8 major provincial institutional deals closed over the past 30 days.

Many hospital administrators have embraced new procurement guidelines put forward by the Ministry of Health and have come to appreciate the cost benefit opportunities presented by modern distribution methodologies. First China Pharmaceutical Group has moved quickly to demonstrate its ability to deploy an integrated and technically superior fulfillment system that completely eliminates two entire rungs from older, historically inefficient arrangements thereby delivering significant cost savings and improved overall efficiencies to both the institutions and consumers alike. 

First China welcomes the administrators, staff and clients of Yunnan Zhen Xiong Peoples Hospital, Xuan Wei Peoples Hospital, Qu Jing Women and Children Hospital, Qu Jing No.2 Peoples Hospital and Xiang Yun Peoples Hospital to a new era in pharmacare delivery. First China's combination of bulk purchasing, low prices and growing variety of product lines (both Chinese and Western) complements its high capacity supply chain and B2B operating system all of which utilizes and exploits the benefits of its unique government issued internet marketing license. As a result, the Company is daily improving its economies of scale and increasing its differentiation over the rest of the competition located in this province of over 45 million inhabitants. 

New government directives identified that the previous distribution system maintained high prices and commissions which are unsustainable. It was determined that institutional health care providers should rapidly move towards agreements with large volume pharmaceutical distributors. Management at Far East was quick to identify the opportunities presented by this new direction and have taken steps to ensure the Company is ideally positioned to maximize revenue yields offered by this fundamental shift in business practices. 

Today, any hospital or clinic in Yunnan Province can now easily sign up to procure the medicines they need from First China, enjoying instant response, rapid fulfillment and secure services combined with excellent price points, allowing those institutions to also recover increased margins while actually offering lower retail pricing in many instances. 

First China Pharmaceutical Group aims to continue its rapid growth from its current inventory of approximately 5,000 products regularly delivered to over 4,700 provincial pharmacies, hospitals and clinics, by expanding its near term capacity to approximately 30,000 items available for sale. Future plans include regional expansion over the next 2-4 years to include a presence in up to 11 adjacent provinces offering a combined market segment encompassing a population density of over 700 million inhabitants.

Details of the company's business, finances, appointments and agreements can be found as part of the Company's continuous public disclosure as a reporting issuer under the Securities Exchange Act of 1934 filed with the Securities and Exchange Commission's ("SEC") EDGAR database.

About First China Pharmaceutical Group, Inc. (OTCBB: FCPG)
First China Pharmaceutical Group, Inc. aims to develop a high growth pharmaceutical distribution company generating significant revenue from the sale of healthcare products in China. As part of its business strategy, the Company has acquired the assets of Kun Ming Xin Yuan Tang Pharmacies Co. Ltd. (XYT), which includes a strategic advantage over its competitors as it is one of a handful of pharmaceutical distribution companies in Yunnan Province that has obtained government approval to market and fill orders using the internet. First China Pharmaceutical Group plans to continue the rapid growth of the company from its current position as a provider of approximately 5,000 drugs to more than 4,700 pharmacies, hospitals and clinics in China's Yunnan Province. For more information visit: www.firstchinapharma.com

Notice Regarding Forward-Looking Statements
This news release contains "forward-looking statements" as that term is defined in Section 27A of the United States Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Statements in this press release which are not purely historical are forward-looking statements and include any statements regarding beliefs, plans, expectations or intentions regarding the future. Such forward-looking statements include, among other things, regulatory incentives, the development of new business opportunities, and projected costs, revenue, profits and results operations. Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others, the inherent uncertainties associated with new projects and development stage companies. These forward-looking statements are made as of the date of this news release, and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Although we believe that any beliefs, plans, expectations and intentions contained in this press release are reasonable, there can be no assurance that any such beliefs, plans, expectations or intentions will prove to be accurate. Investors should consult all of the information set forth herein and should also refer to the risk factors disclosure outlined in our annual report on Form 10-K for the most recent fiscal year, our quarterly reports on Form 10-Q and other periodic reports filed from time-to-time with the Securities and Exchange Commission.

ON BEHALF OF THE BOARD
First China Pharmaceutical Group, Inc.
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Zhen Jiang Wang
Chairman and CEO

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