Capital asset pricing model has a history of more than 60 years in the world, which provides an effective reference value for investment practice. For an industry, it is very important to reduce the capital cost, improve the profit margin and make a scientific and effective investment plan. In the composition of our national economy, biomedical industry is a vital part. Although the global finance experienced a big fluctuation in 2008, the biomedical industry has not been greatly affected and has a good development prospect. It is now the key research object of venture capital. At present, the empirical research on capital cost in China is mainly focused on the home appliance industry, agriculture, e-commerce and other domestic listed companies, but few people study the emerging biomedical industry. On this basis, this paper selects 20 Chinese biomedical companies listed in the mainland of China as samples, uses R program to conduct empirical research on the applicability of CAPM model for their transactions from 2007 to 2018, and obtains the β coefficient of each company's securities. Then the cross-sectional test of β coefficient is carried out by stages to analyze the impact of system risk on the industry, and to study the applicability of CAPM model in China's pharmaceutical industry. The results show that systematic risk is not dominant in the risk of biomedical companies, and non systematic risk plays an important role, but there is no strict linear relationship, which shows that the stock market of China's pharmaceutical industry is not mature and CAPM is not fully applicable.
Key words: capital asset pricing model; biomedical industry; β coefficient; system risk