Overview Of The Development Of China's Pharmaceutical Industry 2022
1. China's pharmaceutical market size
In recent years, the scale of China's pharmaceutical market has been growing at a relatively fast pace. Data shows that China's pharmaceutical market size grew from 1,430.4 billion RMB in 2017 to 179.19 billion RMB in 2020, with a compound annual growth rate of 7.8%. 2021 China's pharmaceutical market size of 1,922 billion RMB, is expected to further reach 223.11 billion RMB in 2022 China's pharmaceutical market size.
According to statistics, China's pharmaceutical manufacturing industry grew by about 17% year-on-year in 2022. The COVID-19 epidemic in Shanghai in April had an impact on China's pharmaceutical market, and pharmaceutical net margins declined significantly. Pharmaceutical companies' selling expenses and administrative expenses decreased significantly during the epidemic, and industry profitability rebounded.
According to therapeutic areas, digestive and metabolic drugs, systemic anti-infective drugs, cardiovascular drugs and central nervous system drugs are the top four segments of the Chinese pharmaceutical market, accounting for 14%, 14%, 13% and 13% respectively, and cumulatively accounting for 54% of the total pharmaceutical market. Oncology drugs accounted for 8% of the total pharmaceutical market, ranking fifth in the Chinese pharmaceutical market.
The pharmaceutical industry is an important market component of the current economy, and China's pharmaceutical industry continues to maintain a gradual growth trend. In 2022, as the pharmaceutical market continues to develop and improve, the market should respond to the needs of economic growth. The general trend of the future development of the pharmaceutical industry is clear. The aging population, urbanization, increasing health awareness and the expanding prevalence of chronic diseases have contributed to the continued growth of pharmaceutical demand, and there is still room to increase the proportion of medical and health expenditure.
2. 2021 China's pharmaceutical market boom continues
From February to October 2021, the overall operating revenue and total profit of pharmaceutical manufacturing industry showed a trend of declining growth rate, with the year-on-year growth rate of revenue declining from 37.70% in February to 22.80% in October and the year-on-year growth rate of total profit declining from 95.40% in February to 76.70% in October. The main reason for this result is the low base of the epidemic factor in the first half of last year, and the lower comparable base effect disappeared month by month after the epidemic was brought under control in 2020, when enterprises resumed work and production in full, and the industry gradually returned to normal levels. The overall boom of pharmaceutical manufacturing industry is still high.
From January to September 2021, the sales expense ratio of pharmaceutical manufacturing industry was 16.61%, down 2.27 pct year-on-year, which is expected to be influenced by the centralized procurement and the obvious savings in sales expense for the hospital side. During the same period, the management expense ratio and financial expense ratio were 5.46% and 0.65%, down 0.67pct and 0.35pct respectively.
3.China's pharmaceutical market segmentation structure share
From the point of view of patent drugs and generic drugs, the difference between the market shares of patent drugs and generic drugs in the Chinese pharmaceutical market is relatively small, with patent drugs accounting for 56% and generic drugs accounting for 44%. With the support of national strategic policies and the gradual increase of market demand for patented drugs, it is expected that the share of patented drugs will continue to grow in the future.
4. Profitability of China's pharmaceutical industry
In recent years, the operating income of China's pharmaceutical industry has shown a trend of first decline and then increase, and the total profit has shown an overall growth trend. Data show that in 2021, the operating revenue of China's pharmaceutical industry reached RMB 2,928.85 billion, an increase of 20.1% year-on-year, and the industry achieved a total profit of RMB 627.14 billion, an increase of 77.9% year-on-year. It is expected that in 2022, the revenue of China's pharmaceutical industry will exceed RMB 3 trillion and the total profit will be close to RMB 700 billion.
5. China's pharmaceutical enterprise registration volume
According to the data, China's pharmaceutical-related enterprise registrations continued to increase rapidly from 2017-2021, with the number of new enterprises increasing from 118,000 in 2017 to 25.0 million in 2021, with a compound annual growth rate of 20.6%. Thanks to the continued high boom of the pharmaceutical industry, it is expected that the number of new pharmaceutical-related enterprises in China will reach 298,000 in 2022, an increase of 19.2% year-on-year.