Pharmaceutical distribution industry as an important part of connecting medicine production and terminal consumption，has experienced different development stages with the development and changes of China’s economic system. This paper analyses the development status，the existing problems and reasons of medicine supply industry since the new medical reform. The pharmaceutical distribution industry developed rapidly，the scale became stronger，new patterns of drug circulation was emerging. But there is also certain problem，for instance，the drug distribution model of current public hospitals，the low chaining rate of social pharmacy. This is not only related with the medicine circulation industry itself，but also related to the current health care system. In this paper，we analysis the cause of medicine circulation industry problems，and puts forward the corresponding policy suggestions.