Analysis of Status Quo of China's Pharmaceutical Industry in 2010 and Outlook for 2011

Judging from the statistical data, in the context of the comprehensive recovery of the international pharmaceutical market and the significant expansion of the domestic pharmaceutical market in 2010, the domestic pharmaceutical industry has experienced rapid growth in imports and exports. Although there are still many uncertainties in the international market, China’s pharmaceutical industry Product export competitiveness can not be ignored. With the further adjustment of China's pharmaceutical industry's export structure, coupled with the stable domestic environment and the acceleration of the pace of recovery in emerging markets, China's pharmaceutical product import and export prospects remain optimistic.

According to Guo Fanli, a research fellow in the pharmaceutical industry of China Investment Advisors, from the perspective of the development of the domestic pharmaceutical industry in 2010, it is expected that the total output value of the domestic pharmaceutical industry in 2010 will reach 125.6 billion yuan, an increase of approximately 25%; the domestic pharmaceutical market will reach 7556 Billion yuan, a year-on-year increase of 22%. Because the effect of the new medical reform will be manifested in the next few years, the total output value of the domestic pharmaceutical industry will maintain a good growth rate. It is expected that by 2011, the total output value of China's pharmaceutical industry will reach 157 billion yuan, up 25% year-on-year.

II. Development Status of China's Pharmaceutical Sub-Industry in 2010 (I) Chinese Medicine Industry - Price Increases to Become the Year's Main Trend Investment adviser in the pharmaceutical industry Guo Fanli pointed out that Chinese medicine is a valuable asset in China's pharmaceutical industry for prevention, treatment and health care. Each has unique advantages. It has a long history and has been proven to be more effective than chemical drugs in treating many diseases. In 2009, the “Opinions on Supporting and Promoting the Development of Traditional Chinese Medicine” promulgated by the State Council showed the government’s strong support for the Chinese medicine industry. Under this circumstance, the Chinese medicine industry has ushered in a rare opportunity for development.

Guo Fanli pointed out that because the new medical reform advocates prevention before illness rather than after illness, traditional Chinese medicine has become a popular target for people; on the other hand, the increasingly international concept of green return has also provided a rare opportunity for the development of Chinese medicine. In 2009, China's total output value of the Chinese medicine industry reached 234.7 billion yuan, sales revenue increased to 211.3 billion yuan, and maintained a compound annual growth rate of 21.53% in 03-09. In the first three quarters of 2010, the profit growth rate of the Chinese medicine industry in China reached 32.1%.

In terms of imports and exports, in the first three quarters of 2010, China’s imports and exports of Chinese medicines were 1.84 billion U.S. dollars, an increase of 20% year-on-year. Among them, the export volume of Chinese medicines was 1.35 billion U.S. dollars, an increase of 20.5% year-on-year, and export products still accounted for the largest proportion of plant extracts. The import volume of Chinese medicines was 490 million U.S. dollars, an increase of 19.11% year-on-year. Among them, the increase in imports of TCM decoction pieces was the largest, while the proportion of imports of TCM and health products accounted for the average.

It must be mentioned that since 2010, the price of Chinese herbal medicines has experienced a high growth. As of the beginning of November 2010, 84% of the 537 kinds of Chinese herbal medicines on the national market went up in price, and the increase was generally between 5% and 180%. Among them, the increase in the value of the Pacific sub-ginseng is the most obvious. The year-to-date increase has reached 353%; Codonopsis has also risen as high as 162%; the March 7 increase has reached 68%. Other Chinese medicine varieties such as Cordyceps sinensis, Angelica sinensis, etc. have seen different degrees of price increases.

Guo Fanli pointed out that the substantial price increase of Chinese herbal medicines is mainly related to the following three factors: First, the demand for Chinese herbal medicines continues to rise. As Chinese medicine has a good effect in the treatment of some chronic diseases, as people's living standards improve, more and more people begin to take Chinese medicine to regulate their body. In addition, China's health care products industry has ushered in a development peak, and now its market. The scale is already ranked second in the world. Because the raw materials of health care products are mostly Chinese herbal medicines, it also makes the prices of Chinese herbal medicines skyrocket.

Secondly, since the beginning of 2010, China's southwest region has experienced a series of natural disasters such as droughts, floods, mudslides, etc. Since the production of Chinese herbal medicines has a lot to do with the climate, many Chinese herbal medicines in the southwest region have reduced their yields or even lost their crops because of the Southwest region. The production and types of Chinese herbal medicines account for more than 50% of the entire Chinese medicine market, so this directly leads to the price increase of Chinese herbal medicines.

Third, hot money speculation prompted the irrational growth of Chinese herbal medicine prices. If the increase in demand and climate are attributed to acceptable reasons for rational growth, hot money speculation is an irrational reason. In the country's macro-control of the property market, the withdrawal of hot money from the property market is not less than 300 billion. This part of the 300 billion yuan flowed into the Chinese herbal medicine market, which directly led to the increase in the price of Chinese herbal medicines.

Guo Fanli, a researcher in the pharmaceutical industry at China Investment Advisors, pointed out that since it has entered the winter season and is also a season of various diseases, many people will purchase Chinese herbal medicine health supplements to improve immunity, so the overall demand for Chinese herbal medicines remains strong, which will lead to this round of Chinese medicine. The high price of wood continues into this spring.

(B) Biopharmaceutical industry - structural issues are still outstanding In October 2010, the State Council formally promulgated the "Decision on Accelerating the Cultivation and Development of Strategic Emerging Industries". This is the first time China has integrated the economic nature of the biopharmaceutical industry. The status has been raised to the national strategic height. In the forthcoming “Twelfth Five-year Plan for Biomedical Industry”, the government has also proposed the next priority for the development of China's biopharmaceutical industry, namely, the development of gene drugs, antibody drugs, therapeutic vaccines, and small molecule chemicals.

In recent years, although China's bio-pharmaceutical industry has made gratifying achievements, its development speed has exceeded China's GDP growth rate by an average of two times, but China's bio-pharmaceutical industry still has a relatively low share in the national economy, and its regional structure characteristics are relatively clear and developed. Unbalanced, on the whole, is still in a budding state. However, with the introduction of the "12th Five-year Plan for Biomedical Industry" and related supportive policies, China's biopharmaceutical industry will usher in its "golden decade."

In terms of the biological vaccine industry, there are currently 36 vaccine manufacturers in China. Their varieties basically cover all types of preventive vaccines. Not only can they prevent and control as many as 27 infectious diseases, but they can also meet domestic and international standards in both quality and quantity. need. In December 2010, the HFMD Enterovirus 71 inactivated vaccine developed by the Zhongsheng Group was officially approved by the State Food and Drug Administration. This also means that the world's first hand, foot and mouth disease inactivated vaccine is expected to take the lead in China.

In terms of blood products, there are a total of 33 GMP-certified blood product manufacturers in China, represented by Hualan Bio, Tiantan Bio, Beijing Kexing and Shanghai Lai Shi. In recent years, as the country’s threshold for blood products continues to increase and new blood product companies are restricted from reviewing and approving, the blood product industry in China will gradually move toward standardization. In the future, it will surely benefit from the benefits brought about by industry consolidation.

Guo Fanli, a research fellow in the pharmaceutical industry at China Investment Advisors, pointed out that with the policy environment of China's bio-pharmaceutical industry entering “the best period”, China’s development in the bio-pharmaceutical industry will be unstoppable in the future. It is expected that the output value of China's biopharmaceutical industry will reach 4 trillion to 6 trillion yuan in 2010, and China will become the world's second largest pharmaceutical market after the United States.

(III) Medical Device Industry - Great Potential for Ushering in the Prosperity of the Industry At present, China has become the third largest medical device market in the world after the United States and Japan. Under the background of the stimulation of market demand and the sustained and stable development of the Chinese economy, the medical device industry in China has developed rapidly. In recent years, China's medical device industry has maintained a rapid growth, sales revenue growth rate maintained at 17%, with an average growth rate of 20.81%. Due to the orientation of national policies and the need for the replacement of domestic medical and health institutions with equipment, China has become a huge consumer market for medical devices.

In terms of import and export, from January to June 2010, China's total export of medical device products was 6.191 billion U.S. dollars, a year-on-year increase of 26.98%. Among them, the export growth of major products such as medical dressings, diagnosis and treatment equipment, and health care and rehabilitation supplies was significant, with an increase of 34.05%, 26.09%, and 28.55%, respectively. The growth rate in the Asian market was 29.73%, which was still the largest market for medical device exports, while exports to the EU and North American markets grew steadily by 22.96% and 25.56% respectively.

In the third quarter of 2010, China’s exports of medical device products continued to grow at a relatively rapid rate, with an export value of US$3.785 billion, which represented a year-on-year increase of 21.78%. Among them, medical dressings, disposable consumables, and health care and rehabilitation supplies were affected by rising raw material prices. The prices of export products all increased to varying degrees. Among them, the price of cotton wool, gauze, bandages rose by 16.70%, the price of unbleached cotton Medical Gauze rose by 16.40%, and the price of cotton surgical towels and other towels rose by 4.81%.

With the rapid growth of the medical device industry, some problems have gradually emerged. In 2010, many provinces and cities in China vigorously rectified and standardized the order of the medical device market. Among them, a batch of medical device operating enterprise licenses were revoked. In order to develop our country's medical device industry in a healthy direction, China must do a good job in the supervision and management of medical devices, and further improve the monitoring of adverse events in medical devices to minimize the incidence of adverse events in medical devices.

Guo Fanli, a research fellow of China Investment Advisor Pharmaceutical Industry, pointed out that after years of imitation, China's medical device companies have begun to pay attention to independent research and development and patent protection, which also shows that China's medical device industry is gradually maturing. It is estimated that by the end of 2010, China's total output value of medical devices will exceed 100 billion yuan, and its share in the world's medical device market will also account for 5%. By then, it will become the second largest medical device market in the world after the United States.

3. Development trend of China's pharmaceutical industry in 2011 (I) Guo Fanli, a research fellow in the Chinese medicine industry's investment adviser pharmaceutical industry, pointed out that the government had proposed to make Chinese medicine “go to the world” many years ago. However, until now, no domestic Chinese medicine company has succeeded. Successful registration in the European Union. Therefore, if you want to make Chinese medicines truly “out of Asia and go to the world”, it is inevitable to increase industry concentration and achieve economies of scale. Therefore, with the continuous advancement of the new medical reform, the merger and reorganization of domestic Chinese medicine companies will be the development theme of the future of the Chinese medicine industry.

Since 2009, China has increased its policy support for the Chinese medicine industry, and has also issued the “Opinions on Supporting and Promoting the Development of Traditional Chinese Medicine”. Although this has laid a foundation for the development of the Chinese medicine industry in China, it still has funds in Somewhat missing. In the future, the country will further increase its investment in the Chinese medicine industry and strengthen the financial support for the Chinese medicine industry so as to achieve both policies and funds with both hands and both hands, so as to effectively promote the development of the Chinese medicine industry.

Guo Fanli also pointed out that with the introduction of China's pharmaceutical production quality management standards, the degree of standardization of the Chinese medicine industry has also been greatly improved, but there are still many loopholes in the supervision of the Chinese medicine industry. In the future, China will further improve the policies and regulations of the Chinese medicine industry so that the various industrial chains of the Chinese medicine industry can develop healthily. On the other hand, as people attach more and more importance to health and health, Chinese medicine will also play its own unique role in the health care market in the future.

(II) Biopharmaceutical Industry The future of China's biopharmaceutical industry has broad prospects. Its development focus includes the following aspects: The first is a new type of vaccine. Due to China's huge population base and the introduction of a new medical reform, the slogan of focusing on the development of "pre-prevention rather than post-ill treatment" is proposed. Vaccines will become the main biological medicine for disease prevention in the future. At present, China is the country with the largest amount of vaccines in the world. The number of people used each year reaches 100 million, and the prospects for more targeted new vaccines are very impressive.

Followed by genetic drugs, including gene detection technology research and development. Guo Fanli pointed out that at present, some developed cities in China such as Beijing, Shanghai, Guangzhou, and Shenzhen have raised an upsurge of genetic testing. However, due to China's genetic testing industry is in an embryonic state, it will be in the future of genetic testing projects and technologies. There are further improvements in services and services. With the outbreak of SARS and A stream, more and more people will come into contact with this emerging project.

According to Guo Fanli, a research fellow in the pharmaceutical industry at China Investment Advisors, the third is antibody drugs. At present, diseases such as cardiovascular and cerebrovascular diseases, malignant tumors, diabetes, and autoimmune diseases seriously endanger people's health, and the emergence of antibody drugs will reduce the incidence of this series of diseases. At present, China has 6 stem cell therapeutic products undergoing clinical trials in different stages. By 2015, China is expected to cultivate a personalized treatment system with a scale of 100 billion yuan.

(III) Guo Fanli, a research fellow in the medical device industry for investment advisers in the pharmaceutical industry, pointed out that in the future, the global medical device market will form two major patterns. On the one hand, a new type of medical device industry chain consisting mainly of developed countries in Europe and U.S., and another On the other hand, traditional medical device products with labor-intensive and low-tech content have gradually shifted from developed countries in Europe and America to developing countries with relatively low labor costs, such as China.

In China, the medical device industry will undoubtedly develop in the direction of higher technology and more humanity. Guo Fanli pointed out that previous medical device products are very large and inconvenient to operate. In the future, medical device products will enter more and more people's homes, such as massage chairs and massage beds. This also requires future medical device products to be miniaturized and family-oriented. development of.

On the other hand, the future medical device products will inevitably be intelligent and unmanned. Nowadays, there is a big breakthrough in the development of bio-intelligence and robotic intelligence. China will also add high-tech factors to more and more medical device products, such as mechanical sensor materials, smart instrument clinical experimental systems, etc. This is not only convenient for operation, but also And more suitable for home self-care and diagnosis and telemedicine.

In the performance of medical device products, due to technical limitations in the past, medical device products are often not accurate in the treatment of diseases, and this also has a series of negative effects. Nowadays, domestic medical device products have entered a new era of non-invasive or minimally invasive. Under this background, some miniaturized medical devices will become the future direction of development.

Guo Fanli, a research fellow in the pharmaceutical industry at China Investment Advisors, pointed out that after the new medical reform proposal is put forward, as the new medical reform focuses on the primary medical market, China’s medical device industry will usher in a large-scale boom, with the improvement of people’s living standards and an aging population. Accelerated and people's increased demand for health care and health care, the future of China's medical device industry will be rapid development, especially some basic medical device products will usher in a rare opportunity for development.

IV. Conclusion Although the overall pharmaceutical industry looks good in all aspects, there are many factors that affect the performance of pharmaceutical companies in 2011. For example, from April 1, 2011, the European Union will implement the "Directive of Traditional Plant Drug Registration Procedures." The "Directive" may bring a greater impact on the domestic Chinese medicine industry; on the other hand, although the biomedical industry has ushered in a lot of Policy support, but in the case of universal patent drug expiration in international multinational drug companies, China still has a strong competitor - India.

The "2010-2015 China Pharmaceutical Industry Investment Analysis and Forecast Report" issued by China Investment Advisors pointed out that since 2010, domestic inflation has become a serious problem. The resulting increase in the price of raw materials and the increase in manpower cost will all contribute to the production of pharmaceuticals. The business brings no small pressure. Therefore, in the short term, the risks in the domestic pharmaceutical industry still exist, but since 2011 is the implementation phase of the new medical reform and various policies, China's pharmaceutical industry will still maintain a steady development level.