Analysis of the Import and Export Situation of Pharmaceuticals in the First Half of 2011
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I. Main features of China's pharmaceutical trade in the first half
(I) Significant achievements in export market diversification
In the first half of the year, due to the EU debt crisis, the United States, Europe and the United States experienced a slow economic recovery. To digest inventory and maintain production, more and more pharmaceutical companies are striving to implement a market diversification strategy, opening up domestic markets, emerging markets, and stabilizing traditional export markets. The diversification of China's pharmaceutical export market has further developed. As of June, the growth rate of pharmaceutical exports from developed countries to the European Union, the United States, and Japan was 32.11%, 29.49%, and 27.9%, respectively. The three markets together accounted for 49.96% of China's pharmaceutical exports, a decrease of 2.44 percentage points from the same period of last year. At the same time, the structure of export products in developed markets has changed significantly, and medical device products continue to maintain rapid growth, with an increase rate of 54.34%, while raw material drug products have significantly slowed down, with a growth rate of 18.93%, which is lower than the average market growth rate of 28.63% on average. Emerging markets continued to develop at a rapid rate. The growth rates of China's pharmaceutical exports to ASEAN, India, Brazil, and Russia were 44.73%, 31.31%, 57.38%, and 53.43%, respectively. The total exports to these four emerging markets amounted to US$ 4.508 billion, accounting for the proportion of total exports. It increased by about 1 percentage point from the same period of last year. At the same time, the capacity of the emerging pharmaceutical market is still expanding. According to the analysis of GTI data, most of China's pharmaceutical products are exported to these markets in the form of APIs and low-end medical devices. Taking the Brazilian market as an example, Brazilian medicines in the first half of the year decreased by 3.81% year-on-year. The growth rate of imports from China reached 102.47%. At the same time, the increase in exports to Russia reached 130.67%. China's low-end pharmaceutical products have strong advantages in emerging markets.
(II) Significant growth in the import and export of medical equipment, and the breakthrough of exports from the mid-end to the high-end
With the advancement of technology, the core competitiveness of domestic enterprises has been continuously improved. China's medical equipment has basically achieved autonomous production of its low-end products, high-end products have gradually achieved import substitution, and exports have broken through from the mid-end to the high-end market. At the same time, the domestic market is facing adjustments in consumption structure. To the huge space, China's medical device product trade ushered in unprecedented opportunities for development.
Exports. In the first half of the year, China's medical equipment exports reached US$7.134 billion, an increase of 57.34% year-on-year, accounting for a 4.4 percentage point increase in China's pharmaceutical exports, reaching 33.37%. From the perspective of product structure, conventional medical device products continued to maintain a competitive advantage of high quality and low price. Medical dressings, disposable consumables, health and rehabilitation supplies, and oral equipment and materials exports increased by 108.25%, 45.79%, 53.41%, and 56.34%, respectively. The developed markets in Europe, the United States, Japan, and other countries have a stable position. Their market share continues to increase. They have seen explosive growth in emerging markets and an increase of more than 70% in ASEAN, India, and Brazil. There are four main reasons for the explosive growth: First, Emerging markets began to accept China's cost-effective medical device products, and the market recognition gradually increased; Second, China's medical device companies in the context of the financial crisis to increase market diversification and development, the effectiveness of new markets to open up significantly; Third, China's low-end medical The equipment has a relatively high technical content and has reached the level of replacing similar products of developed countries. Fourth, due to rising costs, the export prices of some medical dressings and other products have been sharply increased, and the rise in both volume and price has further boosted the growth of exports.
At the same time, the export of high-end diagnostic and therapeutic equipment represented by X-ray machines, CT, nuclear magnetic resonance, ultrasound, and nuclear imaging equipment has grown significantly. Among them, the export volume of magnetic resonance imaging devices has increased by 55.13%. X-ray tomographs and color ultrasonic diagnostic instruments The export volume increased by more than 20%, and the export market scope continued to expand. The growth rate in developed markets, especially in the EU market, was even more pronounced. It is worth noting that the export of high-end diagnostic and treatment equipment is still dominated by foreign-funded enterprises, accounting for 80.25% of the export volume.
Imports. Demand for high-end medical equipment in large domestic hospitals continues to expand, and high-end medical equipment continues to grow substantially. As of June, imports of high-end medical equipment increased by US$1.454 billion, a year-on-year increase of 33.45% over the same period of last year. From the perspective of imported varieties, foreign medical equipment occupies an absolute superiority in the high-end market in China, and occupies an important proportion in high-tech barrier products such as medical imaging and in vitro diagnostics. CT machine, ultrasonic instrument, nuclear magnetic resonance, electrocardiogram monitor and other high-end diagnostic equipments are imported. With a year-on-year increase of 48%, this type of product is basically monopolized by GE Healthcare, Medtronic, Johnson & Johnson and other multinational groups in China. Under the background of “medical reform,†domestic second- and third-line markets and even rural markets will become potential markets for multinational companies. Currently, multinational corporations will consolidate and expand their share of the medical device market in China, through cooperation with Chinese companies and localized R&D. Other means to penetrate the low-end market.
(3) Export situation of bulk APIs is not optimistic
Due to the shift of the global pharmaceutical industry, the development trend of China becoming a global supplier of primary APIs has become increasingly evident. From the perspective of export volume, in the first half of the year, the export volume of 25 bulk APIs in China was 512,000 tons, an increase of 31.61% year-on-year, while exports only rose by 4.41%. The main factor leading to the aforementioned situation is the change in the pharmaceutical industry structure. North America, the European Union, and India gradually withdrew from the production of some APIs, prompting the global demand for pharmaceutical raw materials to increase. However, while the demand in the international market has expanded, domestic companies have carried out larger-scale expansions, and the low-level redundant construction has caused severe bulk drug production capacity in China to be at the bottom of the world's pharmaceutical industry for a long time, and the economies of scale are hard to realize.
Penicillin products: As of June, total exports of penicillin raw materials were 11,200 tons, a year-on-year decrease of -12.10%; 6 APA, amoxicillin and penicillin industrial salt ranked among the top three exporters. Judging from the current situation, penicillin-like products experienced an increase in export volume of more than 30% last year, and the international market demand was basically saturated. Since the situation of supply and demand at the beginning of the year has reversed, export prices have picked up and increased by 12.73% year-on-year, but due to domestic The huge production capacity, while the experience of the last two rounds of price ups and downs, the rationality of international customers is getting stronger and stronger, and the apparent rise in export prices is difficult to sustain in the short term.
Cephalosporins: Exports of cephalosporins continue to deteriorate. After a slight rebound in the previous month, the export price of 7-ACA fell again to 73 US dollars/kg in June, while the actual export volume in the first half of the year fell by 9.39%. During the year, 7-ACA projects of major companies such as U.S. Pharmaceutical, Lukang, and Hua Yao were included. The work has started and put into production one after another. The doubling of production capacity has exerted great pressure on export prices, and the production capacity is seriously out of line with market demand. In addition, the export of ceftriaxine is also not optimistic. In June, export prices have continued to fall to US$92/kg, which has reached a new low in recent two years. The main factors are the increase in production capacity of Suzhou Dongrui, Qiluan for pharmaceuticals, and stone medicine companies. Expanding exports has broken the dominance of the original anti-export policy, and it is expected that the competitive situation of the product will further deteriorate.
Vitamin products: Due to the different industrial patterns, the market for vitamin products has been significantly different. Vitamin C exports 60,000 tons in the first half of the year, an increase of 7.08% year-on-year, and export prices have fallen by 5.51%, a drop of 30.53%. Some exporting enterprises have been competing for export market share, and prices have been falling. The export prices have been significantly lower than the average export prices, and the competitive situation has further intensified.
In the first half of the year, vitamin E exports remained stable. In the past six months, the export price has stabilized at US$17 per kilogram. At present, the global demand for vitamin E is still growing at a moderate pace. The ASEAN market has become a new hot spot. The export volume has increased by 40.07%, and the volume of exports to North America and Japan has increased by 30.24% and 15.67 respectively. %, exports to the EU market are flat. In the medium and long term, due to stable sales of international pharmaceutical VE, it is difficult to achieve significant growth, while demand in the cosmetic and feed-grade markets continues to grow. At the same time, due to higher entry barriers in the vitamin E industry, relatively modest competition is conducive to healthy development of the industry. Vitamin E exports continue to look promising.
Tetracycline products: The export situation of tetracyclines is promising. As the use of tetracycline as an animal growth promoter has once again received market attention, the international market demand has been rekindled, the market boom has rebounded significantly, and export prices have formed a continuous upward path in the past two years. In the first half of the year, exports were 0.97 million tons, With an increase of 40.66% and an increase in export prices of 16.47%, the markets in Asia, Europe and the United States will be further stabilized and occupy a dominant position.
Antipyretic and analgesic products: Antipyretic and analgesic APIs have accumulated large quantities of inventories from international customers due to large exports last year. In the first half of the year, exports were in a depressed state, and overall exports fell by 22.28%. Prices of paracetamol in bulk varieties remained low, and exports in the second quarter remained sluggish. There has been some recovery. Monthly export volume has remained at a level of 4,000-5,500 tons. Market demand has stabilized in India, Indonesia, Nigeria, and the European Union. However, paracetamol also has a serious problem of overcapacity. The increase in recent two years is greater than the increase in the international market. There are price-competition competitions among domestic production companies, and the cyclical nature of the industry is obvious.
Heparin Sodium: After last year’s skyrocketing prices, heparin-based bulk drugs have decreased their share of Haipurui’s exports as second-tier exporters have increased their production capacity and expanded exports. At the same time, the global demand for heparin sodium has been relatively stable, leading to the emergence of domestic export competition. The average export price fell to 9,163 US dollars/kg, a year-on-year decrease of 12.16%. At the same time, the domestic downstream product heparin drug market is expected to expand rapidly, which will keep the demand for heparin sodium as a raw material drug. This year, Haipurui and Qianhong Pharmaceutical will expand their production capacity through technological transformation. The Beijing Beifeng Fengyuan Group Co., Ltd. has an annual output of 30 tons of heparin sodium. The project was started in mid-April and will become the second largest heparin sodium producer in China after its production. The competition for enterprises will increase the scarcity of raw material resources. Therefore, it is expected that the medium and long-term development of heparin sodium will maintain a relative balance between the limited domestic raw materials and the stable growth of the international and domestic supply and demand markets.
(IV) Optimistic export situation of characteristic APIs and preparations
Due to cost and environmental pressure, the pace of the transfer of specialty APIs to Asia has accelerated, and some API companies have achieved full integration with international pharmaceutical companies. The transfer of production scale has become more and more significant, and many have established a stable relationship with international pharmaceutical companies. The cooperation relationship involves more and more varieties, and the orders are stable and continuous. According to incomplete statistics, as of June, the exports of Zhejiang Haizheng and Huahai, which are mainly export of specialty APIs, were significantly ahead of traditional bulk APIs. The export volume increased by 46.71% year-on-year, and the average export price reached US$216.83 per kg. The average price rose by 24.18% year-on-year, showing a clear comparative advantage.
In the first half of the year, Western medicines exported 945 million U.S. dollars, an increase of 30.71% year-on-year. The export growth of pharmaceutical preparations was mainly driven by foreign-funded enterprises. At present, foreign pharmaceutical multinational companies use the strength of China's raw material pharmaceutical industry to accelerate the transfer of preparations to China. The export growth rate of foreign-funded enterprises has reached 44.73%, and their share of exports has increased to 58.85%. Export prices are 5 to 8 times that of domestic companies, and most of them are exported to the markets of developed countries. Domestic pharmaceutical enterprises, especially private enterprises, have seen growth in their formulation exports, which is an increase of 17%. However, the export market is concentrated in Asian and African markets, and there is a clear gap between them and foreign-funded enterprises.
(5) The recovery of exports of Chinese medicines began to shrink, and the exports of Chinese medicines to the European Union began to shrink.
Affected by the sharp increase in prices of Chinese herbal medicines, in the first half of the year, exports of Chinese herbal medicine products increased by a significant 42.95%, and exports of extracts and Chinese herbal medicines increased by 47.68% and 31.33% year-on-year, respectively, of which, the export prices of Chinese herbal medicines rose by 38.09% year-on-year. The weight of Asian markets continued to expand, accounting for 59.04% of my Chinese medicine exports.
On April 30 this year, the EU's 7-year sales transition period for herbal medicines set out in the EU's Traditional Herbal Drugs Directive expired in 2004. According to the directive, Chinese medicines exported to the EU must be registered before they can be sold. This has affected the export of Chinese proprietary Chinese medicine products to the European Union. In the first half of the year, there was a clear trend of highs and lows. The peak of export occurred in March, and the export growth rate was as high as 506.37%. By June, exports had dropped to 50 in the same period of last year. %.
Second, the outlook for the import and export of pharmaceuticals in the second half
(I) The slowdown in exports of traditional bulk APIs and the start of the development of specialty APIs
At present, comprehensive factors such as costs, benefits, and competitive environment will form a major constraint on the export of bulk APIs. The growth rates of Europe, the United States, and India will continue to slow, and the growth of the bulk API market will shift to the Brazilian, Russian, and ASEAN markets. The rapid development of the global generic market has made pharmaceutical companies increasingly demanding specialty APIs. In addition, as countries reduce their expenditure on drugs for financial reasons, Chinese pharmaceutical companies will play an increasingly important role in the supply system of specialty APIs. The role of bulk raw materials - specialty raw materials - generic drug development model is gradually formed, the global characteristic of raw material drug industry transfer began to accelerate.
Some enterprises in Zhejiang and Jiangsu have become leaders in the development of specialty APIs. Among them, Zhejiang Hisun Pharmaceutical, Zhejiang Huahai Pharmaceutical, and Jiangsu Hengrui Pharmaceutical have already possessed strong cost control capabilities and good software and hardware foundations. As well as a wealth of marketed pharmaceutical products, such as the United States and the European Union, the overseas sales model and sales channels are beginning to take shape, and the conditions for achieving export of pharmaceutical preparations are already in place. It is possible to realize the export of pharmaceutical preparations in the future.
(B) Biopharmaceutical exports may usher in a new space for development
The “Decision of the State Council on Accelerating the Cultivation and Development of Strategic Emerging Industries†lists the bio-industry as a strategic emerging industry that needs to be nurtured and developed at the current stage, and proposes to vigorously develop biotech drugs, new vaccines, and diagnostic reagents for the prevention and treatment of major diseases. And other innovative drug types to enhance the level of development of bio-pharmaceutical industry. The “12th Five-Year Plan†of biomedicine has identified the priorities of biomedical development, including genetic drugs, protein drugs, monoclonal antibody drugs, therapeutic vaccines, and small molecule chemical drugs. At the same time, the country will provide more than 10 billion yuan to support major New drug creation. The country will select more than 10 out of more than 100 new drugs as a major support for the creation of major new drugs. These original innovative drugs may become pioneers in the European and American markets. Among these species, there are many biological and chemical agents, including vaccines, monoclonal antibodies, protein drugs, and anticancer drugs.
At the same time, in the next five years, the peak of global drug patent expiration will come. The intention of countries to reduce drug expenditure due to financial reasons and the liberalization of market biosimilar drugs will lead to a rapid growth of the global biopharmaceutical industry, bringing about future biosimilars. A huge space for development.
In March this year, the World Health Organization released a media bulletin that the China Food and Drug Administration's vaccine regulatory system has been verified to meet international standards. The Chinese vaccine is expected to pass the WHO pre-certification in the next 1 to 2 years. Based on this, it is estimated that once the United Nations procurement unit purchases vaccines in large quantities from Chinese companies, it will have a positive effect on the export of vaccines in China.
(III) Manufacturing advantages and technological progress continue to promote high growth in the export of medical device products
From the statistical analysis of medical device exports in the past year, with the rapid development of the economy and the release of market demand, the merger and reorganization of medical device manufacturers has accelerated. At the same time, the core competitiveness of domestic enterprises has been continuously improved, and the low-end and middle-end products have basically achieved independent production, and high-end products have gradually achieved import substitution. In addition, as China's R&D and production levels increase, the gap between foreign medical device manufacturing technologies gradually narrows. The export of conventional medical devices continues to expand. Medical dressings, massage tools, and low-end diagnostic and treatment equipment occupy an important market share in the global market. There is still huge room for growth in emerging markets. High-end medical equipment products with independent intellectual property rights are gradually imported. Instead, some products are exported to the mainstream market in batches. However, the concentration of the medical device industry in China's medical device manufacturing industry is generally low, showing a small and scattered state, especially in high-end medical devices compared with the developed countries in the United States, Europe and Japan, and there is still a big gap between domestic enterprises in the medical device manufacturing industry. Against the background of this, we will gradually increase our technology and brand through independent R&D and joint ventures, and further expand our international market share.
In general, profound changes in the global pharmaceutical market will have a profound impact on China's pharmaceutical trade. Traditional development methods are changing. The development of specialty APIs, high-end diagnostic and therapeutic equipment, and biopharmaceuticals is in line with the needs of the international market and is consistent with China's long-term pharmaceutical development strategy. There is a large growth potential. At the same time, the international and domestic market demand has maintained steady growth. The potential of emerging markets remains. Political turmoil and financial problems in some areas will not have a major impact on China's pharmaceutical exports. Optimization and upgrading of domestic industries are the key factors. It is expected that China's pharmaceutical exports in the second half of the year will continue the growth trend in the first half of the year. The annual import and export growth will exceed 30%.