Turbulent Five Years: China's Pharmaceutical Industry "Thirteenth Five-Year Plan" Retrospective Analysis-Market Chapter

During the "13th Five-Year Plan" period, the market structure of China's pharmaceutical industry has undergone significant changes
.

What are the underlying reasons for these changes? Which aspects of the industry have an important impact?

Recently, Hengrui's share price was cut in half and Dongyang Sunshine announced that it intends to divest its pharmaceutical business and other events that have attracted industry attention
.

Ripples frequently occur in China's pharmaceutical industry

Everything has historical reasons, either macroscopically or microscopically
.

Looking back, since the "13th Five-Year Plan", China's pharmaceutical industry has carried out drastic reforms, the industry's "metabolism" has accelerated, and the market structure has been restructured

The market is the ultimate manifestation of the development characteristics of all levels of the industry
.

From the perspective of the market, this article briefly presents and analyzes the turbulent history of China's pharmaceutical industry during the 13th Five-Year Plan period

Market differentiation: Biological medicines are gaining momentum, Chinese medicines remain stable, and chemical medicines are not in sight

Market differentiation: Biological medicines are gaining momentum, Chinese medicines remain stable, and chemical medicines are not in sight

After years of market expansion, the market size of China's pharmaceutical industry will exceed 1.
700 billion yuan in 2020
.

Among the three major areas, biological drugs are developing rapidly, and their scale proportions are increasing year by year, reaching 20.

2016-2020 China's pharmaceutical industry market size and market segment proportions

Data source: Blue Book of China's Health Industry

Market differentiation is also reflected in the change of heavyweight varieties
.

From 2016 to 2020, among the Top 20 categories of drug sales in the Chinese hospital market, many products have either changed their rankings or entered or departed from the rankings

Changes in the List of Top 20 Drug Sales in China's Hospital Market from 2016 to 2020

Data source: Pharmaceutical Comprehensive Database (PDB), China Pharmaceutical Industry Information Center

Increased concentration: industry structure changes under the empowerment of heavy new varieties

Increased concentration: industry structure changes under the empowerment of heavy new varieties

In recent years, the market concentration of China's pharmaceutical industry has increased rapidly
.

From 2016 to 2020, the market share of Top 20 corporate hospitals has steadily increased, reaching 26.

Changes in market share of top 20 companies in China's hospital market by drug sales from 2016 to 2020

Data source: Pharmaceutical Comprehensive Database (PDB), China Pharmaceutical Industry Information Center

Among the Top 20 companies, the number of foreign-funded companies has increased from 9 in 2016 to 11 in 2020, and the total market share of foreign-funded companies has increased from 51.
26% in 2016 to 61.
82% in 2020.
This is in line with the acceleration of foreign blockbuster innovative products to enter the domestic market.
Closely related
.

Changes in the share of Chinese domestic and foreign companies in the top 20 pharmaceutical sales in China's hospital market from 2016 to 2020

Data source: Pharmaceutical Comprehensive Database (PDB), China Pharmaceutical Industry Information Center

Under the influence of factors such as the acceleration of the review and approval of new drugs by the State Food and Drug Administration, acceptance of overseas clinical trial data, centralized procurement to promote patent cliffs, and more convenient access to medical insurance catalogs, foreign companies have accelerated the entry of new products into China
.

Taking imported chemical drugs as an example, from 2016 to 2020, the total number of clinical trial applications and marketing applications for imported chemical drugs accepted by CDE has increased year by year

2016-2020 China imported chemical drug clinical trial application status (according to the acceptance number)

Data source: China New Drug Research and Development Monitoring Database (CPM), China Pharmaceutical Industry Information Center

2016-2020 China's import chemical drug listing application status (according to the acceptance number)

Data source: China New Drug Research and Development Monitoring Database (CPM), China Pharmaceutical Industry Information Center

Imported innovative drug listing application information

Data source: China New Drug Research and Development Monitoring Database (CPM), China Pharmaceutical Industry Information Center

Channel adjustment: multi-method incremental exploration

Channel adjustment: multi-method incremental exploration

With the implementation of prescription outflow and centralized procurement policies, the stock of the hospital market has shrunk, and the out-of-hospital market has become a gold dig for pharmaceutical companies
.

After years of drug control fees and prescription assessments, public medical institutions are still the main drug sales market in China, but their market share is steadily decreasing.
In 2020, public medical institutions’ drug sales accounted for 58.
18% of the overall market, a decrease of 2.
2 units from 2019 Percentage points
.
The importance of retail pharmacies in the pharmaceutical market is increasing.
In 2020, China's retail pharmacies accounted for 26.
02% of drug sales, an increase of 1.
8 percentage points from 2019
.
Driven by hierarchical diagnosis and treatment and centralized procurement, channel sinking has become a marketing strategy for pharmaceutical companies, and the proportion of drug sales in primary medical institutions is on the rise
.

China's pharmaceutical market pattern from 2016 to 2020

Data source: Blue Book of China's Health Industry

In 2021, the National Development and Reform Commission and the Ministry of Commerce issued the "Opinions on Supporting the Construction of Hainan Free Trade Port to Relax Certain Special Measures for Market Access", proposing support for Hainan's Internet prescription drug sales, which means the opening of online prescription drugs
.
This is the country's blockbuster policy to promote the integration of the Internet and medicine following the "Internet + medical" and "Internet + medical insurance"
.

The policy's standardization and support of "Internet + medicine" has expanded the space and time scope of the outflow of drug prescriptions
.
In recent years, patients have gradually developed the habit of buying drugs online, and online drug retail business has been in full swing, and sales have grown rapidly at a rate of over 40%
.
In 2020, catalyzed by the new crown pneumonia epidemic, online economic vitality will be further activated, with annual online drug sales reaching 24.
3 billion yuan, a growth rate of 75.
60%
.

2016-2020 China's online pharmacy drug sales and growth rate

Data source: Blue Book of China's Health Industry