The Southern Institute lowered its forecast for the growth of the pharmaceutical economy in 2022 to 10.5%, and the industrial development has entered a period of adjustment (live video attached)

"In the first two months of 2022, the operating income of China's pharmaceutical manufacturing industry increased by only 2.3% year-on-year, and the profit fell by 17.6% year-on-year

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The downward pressure on the pharmaceutical industry is relatively large, but we believe that we should not be too pessimistic.

There are three reasons: the demand for medicine is Rigid, rational and positive policies, and the ability of pharmaceutical companies to adapt to policies is also strong

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However, considering various factors, the Southern Institute lowered the forecast value of the pharmaceutical economy in 2022 at the end of last year.

According to the statistics of the Bureau of Statistics, the pharmaceutical manufacturing industry in 2022 The year-on-year growth rate of operating income has been lowered from the original forecast of 12.5% ​​to 10.5%

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" On April 28, at the 33rd National Pharmaceutical Economic Information Online Conference, Lin Jianning, Secretary of the Party Committee of the Southern Medical Economics Research Institute of the State Food and Drug Administration, was doing " Reflections on several hot spots in the pharmaceutical economy” pointed out in the special report

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Lin Jianning, Secretary of the Party Committee of the Southern Medical Economics Research Institute of the State Food and Drug Administration

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New variables trigger growth adjustments

Under the new normal of epidemic prevention and control, the growth rate of the pharmaceutical economy has dropped significantly: the operating income of the pharmaceutical manufacturing industry in the first quarter of this year increased by 5.5% year-on-year, and the growth rate in the same period last year was 33%; the profit in the first quarter fell by 8.9% year-on-year, while the same period last year was profit Soaring 88.7%

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Lin Jianning first reviewed the forecast on the operation of the pharmaceutical economy at the end of 2021.

He pointed out that the pharmaceutical economy will enter a period of adjustment under pressure, and is expected to show four major highlights: China's innovative drugs accelerate internationalization, generic drugs seek to break through in the era of low profit, and the first Four terminals continue to make great progress, and epidemic prevention and control products serve the world

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At the same time, it faces three major pressures: weak terminal growth, ebbing investment enthusiasm, and rising raw material prices

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"At the outpost meeting of last year's pharmaceutical economic information conference, we predicted that the operating income of the pharmaceutical manufacturing industry will increase by 18.
2% in 2021.

From the data released by the Ministry of Industry and Information Technology, although the statistical caliber is not exactly the same, the trend is generally similar
.
" Lin Jianning pointed out, In 2021, the operating income of the pharmaceutical manufacturing industry will increase by 19.
1% year-on-year, which is a substantial increase from 2020 and 2019.
This is related to the low base in 2020 and the recovery growth in 2021.
However, the growth rate of each sub-industry is uneven, and the main driving force lies in Biopharmaceutical manufacturing
.
In terms of profit growth, the driving force of the biopharmaceutical manufacturing industry is more obvious, and the profit growth rate of the manufacturing industry is as high as 69%
.

With the emergence of new major influencing factors such as the Russian-Ukrainian war and the rebound of the epidemic, the growth of the pharmaceutical economy has added new uncertainties
.
"The Russian-Ukrainian war has led to a slow recovery of the global economy.
On April 19, the IMF lowered its forecast for global economic growth this year from 4.4% to 3.6%, while its forecast for China was lowered from 5.6% to 4.4%
.
" Lin Jianning said, The turbulent international situation will affect China's economy, and will have an impact on the import of pharmaceutical raw materials or the export of medical insurance products
.

In the first quarter of this year, China's GDP grew by 4.8%, continuing the overall stable development trend with steady progress
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Looking at the pharmaceutical industry specifically, the latest data released by the National Bureau of Statistics on April 27 shows that the operating income of the pharmaceutical manufacturing industry in the first quarter of this year increased by 5.5% year-on-year, compared with 33% in the same period last year; profits in the first quarter fell by 8.9% year-on-year, while the same period last year On the other hand, profits rose by 88.7% (the base in the same period in 2020 was lower)
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A comparison of the two shows that under the new normal of epidemic prevention and control, the growth rate of the pharmaceutical economy has dropped significantly
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Online live broadcast of the 33rd National Pharmaceutical Economic Information Conference

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New Hotspots Reflect on Transformation and Change

Observing the operation of the pharmaceutical economy at the beginning of this year, Lin Jianning said that the situation seems to be more severe than originally predicted, and the pharmaceutical industry is under great downward pressure, and he put forward three thoughts on the current hot issues in the industry:

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Thinking 1: How much impact will the downward pressure on the economy have on the pharmaceutical industry?

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Although the pharmaceutical economy is under great pressure, do not be overly pessimistic.
The three major policies are good: the centralized procurement policy is becoming more rational and moderate, and enterprises have the opportunity to benefit; the expansion of the medical insurance catalogue and the "dual-channel" policy are both beneficial to the market; There will be catalogue adjustments and structural opportunities
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While the pharmaceutical economy is showing downward pressure, the downstream industry presents a less pessimistic picture
.
According to data from Minet.
com, the growth rate of the entire pharmaceutical terminal in 2021 will be around 6.7%; from January to February this year, the growth rate of the public hospital market will be 12%, and the growth rate of the retail marketwill be 3.3%
.
Compared with the growth rate in the first half of last year, the overall terminal market maintained steady growth
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In addition, from the perspective of pharmaceutical exports, the export delivery value of the pharmaceutical manufacturing industry in the first quarter of this year increased by 14.5% year-on-year.
Although there was a significant slowdown compared with the previous two years, the growth rate was still considerable
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"From the data of terminals and exports, everyone may think that it is due to the lag of upstream pressure transmission?" Lin Jianning threw out the question, and then changed the topic and pointed out, "Although the pharmaceutical economy is under great pressure, don't be overly pessimistic
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Aside from the fact that medicine is a rigid demand, Lin Jianning first analyzed it from the policy side
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Let’s first look at centralized procurement.
The policies are becoming more rational and moderate, and enterprises have the opportunity to benefit
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In terms of medical insurance, the expansion of the catalogue and the "dual channel" policy are both beneficial to the market
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Essential medicines will usher in a catalogue adjustment and bring structural opportunities
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In addition to the good orientation of the three major policies, Lin Jianning believes that the strong policy adaptability of Chinese pharmaceutical companies cannot be ignored
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"Under the great economic pressure, the downward trend of the pharmaceutical economy is unavoidable.
Historical experience tells us that the downward trend of GDP is synchronized with the downward trend of sales revenue of the pharmaceutical industry
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However, although the pressure is huge, the policy side tends to ease, so we should not be too pessimistic.

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" Lin Jianning concluded
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Thinking 2: Is the bubble of high valuation of innovative drugs being burst?

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The era of rapid financing and bubble expansion in the field of innovative drugs is over: the innovative drug industry chain is forced to upgrade to a path of differentiation, internationalization (standardization) and independent innovation
.

In the past six months, whether the bubble of high valuation of innovative drugs has been burst has become a hot spot in the industry
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"Innovative drugs are the mainstream direction of the future development of China's pharmaceutical industry.
This has not changed, but the question is whether the original bubble is too big and has to be burst?" Lin Jianning bluntly said that the economic downturn will indeed bring prudence in investment, while the original The bubble must also burst
.

According to statistics from the Securities Times, among the 96 new stocks listed on the A-share market this year (excluding Beijing Stock Exchange stocks), 33 stocks broke on the first day of listing, and 7 of them were pharmaceutical stocks
.
At the same time, listed innovative pharmaceutical companies are also facing development pressure
.
Judging from the annual report, although the revenue of leading innovative pharmaceutical companies such as BeiGene, Innovent Bio, and Junshi Bio has increased significantly in 2021, it is still difficult to reverse the loss
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However, R&D is concentrated on popular targets such as PD-1/L1 and VEGFR, and severe homogenization competition will also reduce the profit margins of enterprises
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So, where is the way out? "It lies in internationalization, high cost performance, and true innovation!" Lin Jianning pointed out that the era of rapid financing and bubble expansion in the field of innovative drugs has come to an end, which will force the innovative drug industry chain to become differentiated, internationalized (standardized) and independent innovation.
Path upgrade
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He also reminded that this does not mean that the innovation drive has lost the attractiveness of financing
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In fact, in the first quarter of this year, there were 160 financing events in China's medical and health sector, of which early financing accounted for 35%, reaching 56, a record high.

Thinking 3: What will accelerate the construction of a unified national market?

Accelerating the construction of a national unified market is beneficial to mainstream enterprises: by breaking through local protectionist barriers, improving the national market layout, and through cross-regional mergers and acquisitions and the implementation of the MAH system, the strong will become stronger
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Accelerating the construction of a national unified market is beneficial to mainstream enterprises: by breaking through local protectionist barriers, improving the national market layout, and through cross-regional mergers and acquisitions and the implementation of the MAH system, the strong will become stronger
.

A few days ago, the release of the heavyweight document "Opinions of the Central Committee of the Communist Party of China and the State Council on Accelerating the Construction of a National Unified Market" has aroused widespread concern
.
The focus of the pharmaceutical industry is mainly on the trend of drug regulatory policies, medical insurance policies, and investment promotion policies under the background of accelerating the construction of a unified national market
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In this regard, Lin Jianning also shared his views
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In his view, the National Medical Products Administration, which has been re-elected as a member of the ICH Management Committee, is a model for building a unified national market, because the essence of ICH's work is the internationalization of review standards, and the standardization upgrade will stimulate internal and external competition in the Chinese market.
Deep integration
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In terms of deepening medical reform, vigorously promoting the implementation of the "Sanming Model" and the reform of DRG/DIP medical insurance payment will be the focus of the next step
.
In terms of centralized procurement, Lin Jianning has different views on the industry conjecture of building a national unified centralized procurement platform
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"By the end of the '14th Five-Year Plan', the National Medical Insurance Bureau will create a number of demonstration platforms for centralized procurement of medicines across the country
.
The model of centralized procurement in the future should be based on the existing basis to improve and standardize, national procurement, national talks and inter-provincial centralized procurement.
Alliances, to achieve data sharing between alliances and keep data and policies consistent, this may be the direction of future recruitment policies
.
" Lin Jianning analyzed
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"Overall, we believe that this policy is beneficial to mainstream companies.
It may break through the barriers of local protectionism, improve the national market layout, and through the implementation of cross-regional mergers and acquisitions and the implementation of the MAH system, the strong will become stronger
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" Lin Jianning concluded.

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He especially reminded that how to prevent monopoly while breaking local protection is an issue that must be considered when building a unified national market in the future
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The new forecast sets the tone and seeks progress while maintaining stability

Adjustment of the pharmaceutical economic forecast in 2022: On the basis of last year's forecast, it is lowered by two percentage points.
It is expected that the operating income of the pharmaceutical manufacturing industry will increase by 10.5% in 2022.

In his summary, Lin Jianning pointed out that, considering various influencing factors, according to the caliber of the Bureau of Statistics, the Southern Institute plans to adjust the economic forecast for 2022: "On the basis of last year's forecast, we have lowered it by two percentage points.
The growth rate of industrial operating income is 10.5%, which is about 9 percentage points lower than the growth rate in 2021.

" Regarding the interpretation of this data, Lin Jianning pointed out that this does not mean low-speed growth, but still maintains a stable relative to the overall economic growth rate.
Rapid growth and steady growth are the main features of the sunrise industry at this stage
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"The changes of the times and the epidemic of the century are superimposed on each other, leading the world to enter a new period of turbulence and change, and the downward pressure on the economy is enormous
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Under the pressure, the pharmaceutical economy will also enter a period of adjustment
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However, we must strengthen our confidence that the pharmaceutical industry will continue to grow.
The characteristics have not changed, the state's policy of encouraging the development of pharmaceutical innovation has not changed, and the fundamentals of China's long-term economic growth have not changed, so the difficulties are temporary, and a bright future for the pharmaceutical economy can be expected!" At the end of the report, Lin Jianning sent Wishes and encouragement to colleagues in the industry
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