See The Moon Through Clouds And Fog

2020 is destined to be an extraordinary year. The new crown pneumonia epidemic has dragged the global economy into the most serious recession since World War II, and China is facing a severe and complex international environment... In this extremely difficult situation, the Chinese people are united as one, united as one, and the only major economies in the world to achieve positive economic growth. As the backbone of epidemic prevention and control and an important component of the national economy, China's pharmaceutical industry, represented by the top 100 enterprises, has accomplished the important task of returning to work and stabilizing the economy, providing the most critical material basis for fighting the epidemic. In this special historical background, what kind of report card and performance will Chinese pharmaceutical enterprises have in 2020 has attracted the attention of the industry.

On August 1, 2021, at the 38th national pharmaceutical industry information annual meeting, the "2020 top 100 Chinese pharmaceutical industry list" was officially released. The list comes from the annual report of Chinese medicine statistics, which is the only official information published annually to reflect the economic operation of the national pharmaceutical industry. Through the interpretation of this list, we find that in the past year, the top 100 enterprises have not only withstood the severe test, but also reflected the responsibility of "fearlessness". At the same time, all the insistence and choice they made in the critical period of industrial transformation and upgrading highlight the main development trend of China's pharmaceutical industry in the future.

Special 2020 answer sheet

2020 is a special year for the pharmaceutical industry, and the implementation of regulatory policies such as "normalization and institutionalization of centralized procurement" will be promoted. In the face of profound changes in the development environment, the top 100 enterprises have shown strong development toughness and delivered satisfactory 2020 answers. Whether it is to ensure supply during the epidemic period, or to actively respond to the policy call of national consistency evaluation and centralized procurement, all reflect the responsibility of the top 100 enterprises. In the long course of time, 2020 is just a flash, but a group of lovely "Chinese medicine people" represented by top 100 enterprises have left a strong and brilliant mark in this special history with fearlessness and responsibility.

test

The scale of revenue has been impacted. In 2020, the main business income of top 100 enterprises was 901.21 billion yuan, a year-on-year decrease of 3.1%, which was the first decline in the past decade. The main reason is the superimposed influence of new coronal pneumonia and other factors. From the supply side, although China actively promotes the resumption of work and production while preventing and controlling the epidemic situation, the epidemic situation objectively has a great negative impact on the production of pharmaceutical industry in the first quarter. From the demand side, the continuous pressure of epidemic prevention and control has led to a significant decrease in outpatient visits compared with previous years, and the sales of some prescription drugs and medical devices relying on the hospital have declined. At the same time, the dynamic adjustment of medical insurance catalogue and the promotion and implementation of centralized drug procurement also have an impact on the drug market to a certain extent. Despite the rapid growth of demand for health materials, drugs and medical devices related to epidemic prevention, it is still difficult to hedge the impact of epidemic situation on the supply side and the demand side.

The threshold of the top 100 has dropped slightly. In the context of the overall short-term decline in the main business income of the top 100, the threshold for the top 100 to be listed and the number of 10 billion members have been slightly decreased. Among them, the threshold for the top 100 companies to enter the list dropped slightly to 2.79 billion yuan, a year-on-year decrease of 2.7%; The number of 10 billion members was 26, a decrease of 1, which was basically the same as that in 2019.

The degree of concentration is basically stable. In recent years, the main business income of top 100 enterprises accounts for about 30% of the total pharmaceutical industry. In 2020, the industry concentration of top 100 enterprises is 32.2%, which is basically the same as that in 2018, and slightly lower than that in 2019.

There are still bright spots in the top 100 list. We are pleased to see that more than half of the top 100 enterprises have achieved positive growth on the premise that their overall main business income is not ideal; In addition, in terms of total profits, the top 100 enterprises also achieved a positive growth of 14.6%. At the same time, at a time when the spread of overseas epidemic situation accelerated, China, as a major producer of medical materials, orderly carried out the export of medical materials, deepened international cooperation in epidemic prevention and control, and jointly responded to the global public health crisis, which provided strong support for effective epidemic prevention and control, and realized a 42% year-on-year increase in export delivery value.

2020 is also the closing year of the 13th five year plan. Looking back, the top 100 enterprises in the 13th five year plan have experienced intensive policy adjustment and rapid market reconstruction, achieving the double improvement of main business income and concentration. Among them, the main business income of top 100 enterprises increased by 47.1% from 613.1 billion yuan to 901.21 billion yuan; The concentration ratio of top 100 enterprises also increased from 22.8% to 32.2%. In addition, the number of 10 billion clubs has increased from 16 to 26, achieving brilliant achievements in enterprise growth and industrial development.

to bear

To help prevent and control the epidemic situation and show responsibility. In the past year, the top 100 enterprises have been brave in taking responsibility in the face of crisis, and have made all-round outstanding contributions to the phased victory of China's anti epidemic around the links of diagnosis, treatment and prevention of new crown pneumonia.

In the diagnosis process, Shengxiang biological's new coronavirus nucleic acid detection kit was approved for marketing within two weeks after the new coronavirus gene sequence was published. In the aspect of prevention, Zhende medical, Ogilvy medical and other health materials and medical supplies enterprises responded quickly and increased the supply of epidemic prevention materials such as masks; At the same time, a number of top 100 enterprises joined the ranks of new crown vaccine research and development. Sinopharma group's new crown vaccine has taken the lead in launching international clinical trials, obtaining approval for emergency use, and taking the lead in international registration and listing. At the same time, Sinopharm has also carried out the construction of production facilities. The annual production capacity of new crown vaccine has exceeded 5 billion doses, becoming the largest R & D and production base and largest supplier of new crown vaccine in the world. In the treatment process, the top 100 enterprises fully guarantee the production and supply of drugs required in the diagnosis and treatment plan of new coronavirus pneumonia. At the same time, Yiling pharmaceutical, Haizheng pharmaceutical and other enterprises are actively carrying out the exploration and Research on the new use of old drugs to fight new coronavirus.

With their outstanding performance in the anti epidemic, some enterprises will perform well and even stand out in the top 100 list in 2020. For example, the first approved new type of coronavirus nucleic acid detection kit in China comes from Shengxiang biology, a new top 100 enterprise this year. In the same way, Zhende medical, Ogilvy medical and other health materials and medical supplies enterprises have made contributions to the supply and price stability of epidemic prevention materials through practical actions, thus becoming one of the top 100 enterprises（ Table 1)

Ensure the supply of drugs and safeguard people's health. The top 100 enterprises actively participate in the work of consistency evaluation and national centralized drug procurement, which effectively improves the quality of drugs and ensures the accessibility and affordability of common people's medication. Up to now (Note: data source: new drug research and development monitoring database (CPM), China Pharmaceutical Industry Information Center, query date: July 22, 2021), 28.3% of the enterprises participating in the conformity evaluation belong to the top 100 enterprises and their subsidiaries. At the same time, among the five batches of drugs purchased by the state, 87% of the top 100 enterprises selected varieties（ Figure 1)

Looking at industry through the list

Looking at the top 100 list in 2020, we can not only see its distinctive characteristics in a special year, but also see the development trend and change of the main body of the industry in the future. Through the continuous comparative analysis of the top 100 list, we find that the characteristics of China's pharmaceutical industry such as "innovation and victory", "transformation and upgrading" and "agglomeration ecology" are becoming more and more obvious, which also gives a new signal of the industrial pattern of "biological rise".

Innovation wins

R & D investment reached a new high. The R & D investment of top 100 enterprises continued to increase during the 13th Five Year Plan period. In 2020, the average R & D expenditure of the top 100 enterprises is 633 million yuan (Note: the statistical data of each year exclude those enterprises that have not reported domestic R & D expenses), and the average R & D intensity is 6.8%, which is the highest in all years. From the gradient distribution of R & D intensity, the proportion of enterprises with R & D intensity above 10% in the top 100 list has been increasing. There are 5 enterprises with R & D intensity higher than 15%, including Xinda biology, Kanghong pharmaceutical, Xiansheng pharmaceutical, Yantai LVYE and Hengrui pharmaceutical; There are 13 enterprises with R & D investment above 10% and less than 15%, which is 4 more than that in 2019.

The change of top ten shows the power of innovation. Take Hengrui pharmaceutical, Qilu pharmaceutical and Shijiazhuang Pharmaceutical Co., Ltd., the top three R & D intensity enterprises in the top ten enterprises as examples. These three enterprises focus on innovative drugs, improved new drugs and high barrier generic drugs, continue to increase R & D investment, and constantly optimize the product line portfolio, thus becoming the top 100 enterprises in the list. It can be seen that the policy and market environment of innovation and development in China are becoming more and more perfect, which provides strong support and guarantee for the innovation and development of enterprises（ Table 2)

R & D achievements have entered the harvest period. As the main force of Biomedical Innovation in China, the top 100 enterprises are gradually ushering in the harvest period. From 2016 to 2020, a total of 41 class 1 new drugs were approved, of which 41% were contributed by top 100 enterprises. In 2020, 7 of the 16 class 1 new drugs approved for listing in China are from the top 100 enterprises（ Figure 2) (Table 3)

The internationalization of innovation achievements has been accelerated. The top 100 enterprises are actively accelerating their innovation achievements to the world by means of domestic and international double reporting, overseas license out and overseas cooperative development. At present, 10 innovative drugs developed by top 100 enterprises are in clinical stage III and later overseas, and the number of varieties under research in the earlier stage is numerous. Hengrui pharmaceutical, Fosun Pharmaceutical, Shiyao group and Xinda biology have become mature sellers of license out. With a broader overseas market, the market space of domestic innovative drugs will be further expanded, which will surely make China's pharmaceutical industry to a new level.

Transformation and upgrading

In the era of supply side structural adjustment and demand side fine management, some enterprises will stagnate and fall behind, but more top 100 enterprises still stick to the list. By deconstructing this group strategy and choice, we observe three main directions of enterprise transformation and upgrading: business optimization, intelligent manufacturing and channel expansion.

"Create", "invest" and "give up" three paths to optimize business“ "Creation" refers to the creation of new business lines. With the increasingly sound domestic capital market, the top 100 enterprises usually set up new subsidiaries to operate independently when expanding new business, which not only controls the risk but also retains the flexibility of financing, which also provides a good foreshadowing for independent listing in the future. For example, Qilu pharmaceutical established Qilu cells to enter the field of cell and gene therapy, and Lizhu group established Lizhu biological distribution of biological drugs.

"Investment" refers to investment and merger, which is also a common way for pharmaceutical enterprises to develop and grow. Through investment and M & A, we can speed up the integration and reorganization of resources in the industry, quickly improve the market share of enterprises or achieve the goal of rapid entry into new fields. Among them, Sinopharm group has organically integrated investment and merger with the reform of state-owned enterprises. After more than 70 years of unremitting efforts, Sinopharm has developed into a comprehensive pharmaceutical and health industry group with leading comprehensive strength and scale in China and Asia. Fosun Pharmaceutical, as an enterprise which is good at diversified M & A, has gradually completed the layout of the whole industrial chain through continuous investment and M & A, and achieved business coverage in pharmaceutical, medical devices, medical diagnosis and services and other fields.

"Abandonment" refers to the timely abandonment of some projects and businesses. Under the condition of great changes in the industry and limited resources, it is necessary to abandon part of the business in time to achieve the real strategic focus. Some of the top 100 enterprises have voluntarily abandoned some generic drug projects and focused on truly innovative drugs. Under the guidance of a series of policies guided by the clinical value of drugs, pharmaceutical enterprises may face more choices in the future.

Intelligent manufacturing is the key to improve quality and efficiency. For the whole pharmaceutical industry, manufacturing is the foundation, and the transformation and upgrading of production links are not only needed for cost control, but also for quality assurance. With the advantages of high quality, stability, green and cost, intelligent manufacturing has become the focus of transformation and upgrading of top 100 enterprises. The advantageous enterprises in the field of traditional Chinese medicine, such as Guangyao group, modiifcation pharmaceutical industry and tiansheli, have organically integrated intelligent manufacturing with the modernization of traditional Chinese medicine to realize systematic innovation, so as to make the national treasure of traditional Chinese medicine move to a greater world stage. At the same time, Yangzijiang pharmaceutical, Qilu pharmaceutical, Shiyao holding and other large-scale comprehensive top 100 enterprises are also stepping up the construction of smart factories, improving the level of intelligent manufacturing, and realizing the efficient unification of cost reduction, efficiency increase and quality assurance.

Explore the value of products through channel expansion. With the structural change of drug terminal market, enterprises are speeding up the channel expansion to adapt to the new medical business and drug demand. The industrial and commercial integration enterprises represented by Sinopharm group, Shanghai Pharmaceutical Group and China Resources pharmaceutical are speeding up the layout of DTP business nationwide. In addition, the new crown pneumonia epidemic promoted the formation of people's online medical habits to a certain extent, and played a positive role in promoting the development of medical e-commerce. Yunnan Baiyao and Tongrentang have already focused on e-commerce channels as their core growth poles.

Biological rise

The number of top 100 biological products enterprises continued to rise. Under the guidance and support of the national science and technology major special project "major new drug creation", many breakthroughs have been made in the key technologies of the development and production of biological products in China. With a number of domestic biological products, including blockbuster monoclonal antibody drugs, China's biological products enterprises have been ranked among the top 100, which has become a new force that can not be ignored. From one in 2016 to seven in 2020, the ranking of biological products enterprises represented by Changchun hi tech, Sansheng pharmaceutical, Hualan biological, Xinda biological, Dongcheng pharmaceutical, Ganli pharmaceutical and Watson biological has increased steadily, demonstrating the strength of steady development（ Table 4)

Biotechnology is growing rapidly. Different from previous years, this year's top 100 list reveals a new signal: biotech enterprises are rapidly growing into bio pharma. Even at the moment when there are many giants and significant head effect, biotech enterprises still have the certainty of long-term rapid rise with its unique revolutionary technology. In the foreseeable future, more biotech enterprises may stand out and grow into bio pharma and even big pharma.

The number of chemical and traditional Chinese medicine enterprises declined. With the strong rise of biological products, the number of top 100 enterprises in the field of chemical drugs and traditional Chinese medicine has decreased, which is partly due to the pressure brought about by a series of policies, such as the intensified competition in the industry, the control of medical insurance fees and the centralized purchase of drugs. In the future, whether these chemical medicine and traditional Chinese medicine enterprises can return to the top 100 depends on the strategic courage of enterprise reform and innovation and the strategic determination of transformation and upgrading（ Figure 3)

Agglomeration ecology

The cluster characteristics of top 100 enterprises are obvious. Looking down on the overall list, 65% of the top 100 enterprises are concentrated in the Yangtze River Delta, Beijing Tianjin Hebei, Dawan district and Chengdu Chongqing industrial clusters. Among them, the Yangtze River Delta and Beijing, Tianjin and Hebei rely on the advantages of first mover, talent, technology and capital. In recent years, as an inland area, Chengdu and Chongqing have promoted the industrial development by relying on natural resources such as medicinal materials, land and policy support, and the number of top 100 enterprises has increased（ Figure 4)

The high-energy ecosystem is gradually forming. The competitiveness of biomedical industry cluster lies in the construction of high energy ecosystem. Biomedical industry is a technology intensive, talent intensive and capital intensive industry. Under the combined effect of agglomeration effect and space cost, the degree of dependence on industrial ecosystem is significantly higher than that of other industries. As the leader of the biomedical industry, the top 100 enterprises are taking advantage of the resources in the cluster to cooperate with universities, scientific research institutes, medical institutions and the upstream and downstream enterprises of the industry to cooperate or jointly build laboratories and research institutes, so as to promote the construction of an industrial ecosystem of organic innovation and cooperation, vigorously promote the R & D and innovation of pharmaceutical equipment, and strengthen the independent control of China's industrial chain. For example, Yangzi River Pharmaceutical Group and Shanghai Jiaotong University Pharmaceutical College jointly build a joint laboratory for biological drug research and development; With the opening of the first national major science and technology infrastructure of translational medicine, Shanghai medicine and Ruijin Hospital are cooperating closely with the innovation and research of translational medicine as the core; Ogilvy medical and Donghua University have established a joint R & D Center for biomedical textile materials between Ogilvy medical and Donghua University.

In the future, the high-energy industry ecosystem built around the top 100 enterprises will continue to empower China's pharmaceutical industry, so as to comprehensively improve the innovation effectiveness and international competitiveness of China's pharmaceutical enterprises.

Development prospect of the 14th five year plan

With the rapid development of the 13th five year plan, China's pharmaceutical policy environment has become increasingly mature, the sense of industrial innovation has been deeply rooted in the hearts of the people, and the guarantee of drug quality and supply has been highly strengthened. At the same time, we should also face up to the shortcomings of the current industrial development, such as "repeated innovation" problem is prominent, the original innovation ability is still relatively weak, multi sector policy coordination needs to be further improved.

Looking forward to the "fourteenth five year plan", standing at an important historical node of undertaking the construction of a community of shared future for mankind, China's pharmaceutical industry will usher in a critical period of carrying forward the past and opening up the future, and it will present three key characteristics: Independent Innovation Oriented by clinical demand, integration and cooperation based on controllable supply chain, and efficiency improvement with the trend of digital transformation. We hope that as the main force of the industry, China's top 100 pharmaceutical enterprises will continue to play a leading role, take clinical value as the center, take innovation independence and supply chain controllability as the heavy tasks, build a high-energy ecosystem, promote the overall high-quality development of the pharmaceutical industry, and continuously promote China's transformation from a big pharmaceutical country to a pharmaceutical power!

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