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Chinese medicine raw material industry of yesterday, today and tomorrow

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Chinese medicine raw material industry of yesterday, today and tomorrow Empty Chinese medicine raw material industry of yesterday, today and tomorrow

Post  happybaicaitou Tue Oct 29, 2013 1:19 am

In the "Twelfth Five-Year Plan" period, Chinese government will launch two policies that will have a great influence on the development of Chinese medicine industry. The first one is a health care reform, a reform that bound to stimulate domestic pharmaceutical product demand, and brings opportunities for China's pharmaceutical industry development. Actually, to develop the new industry, biological medicine is listed as one of the important development areas. The increase of domestic demand has become the motivation of many traditional export-oriented enterprises in the domestic market, but also reflects the good development trend of domestic pharmaceutical market, but Chinese medicine raw material export industry is facing a predicament.
Due to the report of "Medicine economic news" and analysis of China's customs statistics, Chinese raw materials medicine exports amounted to $17,580 millions in 2008, and Chinese medicine raw material exports to $16,559 millions in 2009. The global economic downturn and the domestic and foreign competition exports resulted fall in past ten years. In the increasing of tough trading environment, Chinese medicine raw materials enterprises strengthened the emerging market development and the growth is better in 2012. China Chamber of Commerce statistics show, our country raw material exports amounts to 22,695 millions US dollars in 2012, with the growth of 3.16%. China exports raw materials compound with annual growth rate run up to 6.59% between 2008 and 2012.
At present, major export market of Chinese medicine raw material is still for three regions, Asia, European Union and North America, particularly affected by China - ASEAN FTA zero tariff policy. In addition, South America also grows into a dynamic export market. As to the export of medicine raw material product architecture, traditional bulk drug varieties (anti infection, antipyretic analgesic category, vitamins, amino acids, cardiovascular) market share remained stable, and antiviral drugs (such as anti AIDS), hormones, coenzyme Q10 and other small species gradually revealed strong in 2012.

At present, China medicine raw materials industry exports in low growth, and facing with foreign trade environment, it has become more complicated. The pressure of competition exists not only from India, but also from the overall economic downturn, at the same time, we also face to solve some problem. APIs and intermediates products are the main export products of Chinese medicine industry, China is the world's major competitors of medicine raw material industry and CMO field. At present, China's pharmaceutical industry is still in the expansion trend. Statistic data published by the national development and Reform Commission shows, China pharmaceutical industry's annual accumulative with total investment amounts to 356,500 million Yuan in 2012, increase of 34.6% comparing to last year, higher than the total fixed asset investment growth of about 14 percentage points. But the medicine raw material field has an obvious pile up in excess of requirement, and overcapacity will cause vicious competition, lower commodity prices, squeezing medicine raw material enterprise profit space.

Actually, China is engaged in pharmaceutical intermediates product outsourcing services enterprises, basically belongs to small and medium enterprises, mainly concentrated in Jiangsu Jintan and Zhejiang Taizhou area. Business service and product differentiation is not enough, so it’s existed of price competition. At the same time, lack of these pharmaceutical intermediates products business analysis on market information and global pharmaceutical R & D dynamic, to improve their ability of competitiveness is obviously restricted development itself.

In addition, facing the increasing of serious problem of environmental pollution, Chinese government has taken more and more stringent environmental protection policy, the natural increase in production cost of enterprises. But enterprise environmental cost to the downstream price ability is not enough. Coupled with the appreciation of RMB continued to increase, resulting to medicine raw material enterprise profit appeared negative growth for the first time.

Export oriented enterprises also need to face more and more strict international regulation and trade friction. For example, on June 2011, European Parliament and European Commission issued a new Decree No. 2011/62/EU, from July 2, 2013 onwards, all exports to the EU API (drug substance) must provide written proof of export country supervision department.

Face with these factors above, Chinese pharmaceutical industry is accelerating industrial upgrading and structural adjustment. Big pharma R & D strength increase R & D efforts preparation, hope from the traditional low value-added exports upgrade raw materials for the pharmaceutical exports. In addition, some large pharmaceutical enterprises accelerate the pace of internationalization. According to shun Securities report, September 2012 Hisun pharmaceutical and Pfizer’s joint venture Hisun Pfizer Inc formally established the registered with capital of 250 millions US dollars, and will focus on R & D and production of generic drugs, its product portfolio will cover the anti-tumor, cardiovascular, anti infection, immune inhibitors such as nervous system, treatment, sale network wide coverage of China market, and through Pfizer's global marketing network, quickly enter the international market.

"Twelfth Five-Year Plan" period, leading the direction of economic development to Chinese government to encourage the innovation, accelerating the adjustment and upgrading of industrial structure, the transformation of the pharmaceutical industry upgrading, the Chinese government will inevitably brew the relevant supporting policies, not only for Chinese pharmaceutical enterprises to realize the internationalization platform, but in terms of market access, product certification, the government will also provide policy support, information consulting and other services.

Every moment, the market is always both a challenge and an opportunity, and the global pharmaceutical market is not an exception. For example, the generic drug market, the economic crisis continued to developed economies into recession, governments are taking measures to reduce the expenditure in medical field. At the same time, the great global drug patents expire, the lack of blockbuster drugs listed, as well as reduce production cost and watch the huge potential of Chinese pharmaceutical market, pharmaceutical companies to develop CMO business in China, the above factors provides the opportunity for the global generics market, help to promote the Chinese raw materials and intermediate demand. Therefore, Chinese APIs and intermediates manufacturers need to continuously carry out technical optimization, strengthen the innovation, and enhance the services and legal consciousness, as to maintain its competitiveness in the global pharmaceutical market, also to go further in the global pharmaceutical layout.


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