Global Release | "Blue Book on the Current Situation and Trends of China's Biopharmaceuticals Going Global in 2024" (Chinese-English bilingual version) with full-text access

Since the "14th Five-Year Plan," China's pharmaceutical industry has faced increasingly complex internal and external environments, with both challenges and opportunities coexisting. The global pharmaceutical industry pattern has evolved, international competition for key pharmaceutical elements such as talent and technology has intensified, the reshaping of industrial chains and supply chains has accelerated, posing higher demands on China's traditional export-oriented pharmaceutical products. China's exploration and attempts to move towards higher points on the value chain face challenges. At the same time, with the deepening implementation of policies such as drug centralized procurement, medical insurance negotiations, DRG/DIP payment method reforms, and anti-corruption efforts in healthcare, China's healthcare system reform continues to advance, and the medical security system is continuously improving; China's economy has shifted towards high-quality development, people's health consumption has upgraded, and higher demands are placed on the pharmaceutical industry. "Building a new development pattern with domestic circulation as the main body and mutual promotion between domestic and international dual circulations" has become an inevitable path for the development of China's pharmaceutical industry.

The development of China's pharmaceutical industry is entering a stage of innovation and leapfrogging. In order to align with international standards and further expand overseas markets, the country is enhancing its independent innovation capabilities and global resource integration abilities, and is committed to integrating into and leading the global pharmaceutical industry.The 'Blue Book' sorts out the internal motivations for China's pharmaceutical industry going global from four dimensions: profit pressure, favorable policies, enhanced innovation capabilities, and alignment with international standards. In addition, the 'Blue Book' analyzes developed markets as well as the 'Belt and Road' emerging markets separately.Developed countries and regions such as the United States and Europe continue to prioritize the therapeutic advantages brought by innovative drugs. They are the main hubs of the global innovative drug market, and drugs launched in developed countries can achieve higher product pricing and greater profits, offering broad development potential. Emerging markets along the 'Belt and Road' have huge unmet clinical needs and market potential based on their large population base, weak healthcare infrastructure, and continuously upgraded free trade agreements with China. These countries and regions can further unleash domestic pharmaceutical production capacity.For more detailed content, please refer to the full report.

The intentions of Chinese pharmaceutical companies to go global include boosting valuation, expanding sales territories, obtaining higher returns, and enhancing brand influence.The 'Blue Book' sorts out the strategic intentions of Chinese pharmaceutical companies in adopting overseas strategies. For more detailed content, please refer to the full report.

In 1992, Hisun Pharmaceutical received its first FDA certificate, marking the beginning of China's raw material drug exports to the international market; in 2006, Microchip Biotechnology transferred the overseas rights and interests of cedilanid, achieving a breakthrough from scratch in innovative drug exports; in 2017, Hua Hai Pharmaceutical's paroxetine capsules became the first generic drug to successfully challenge a US patent; in 2022, Legend Biotechnology's Carvykti was approved by the FDA for marketing, becoming the first successful CAR-T product to go global. In 2023, the enthusiasm for domestic innovative drugs going global surged, with that year being referred to as the 'first year' of China's innovative drugs going global. From raw material drugs to generic drugs, and then to innovative drugs, Chinese pharmaceutical companies are actively responding to the fierce competition in the international pharmaceutical market. Going global is an inevitable trend, and in the future, more Chinese pharmaceutical companies will successfully go global, deeply integrating into the entire international pharmaceutical value chain.The 'Blue Book' sorts out the milestone events in the journey of Chinese pharmaceutical companies going global. For more detailed content, please refer to the full report.

The Blue Book selects representative countries and regions for multi-dimensional market analysis.Including the United States, the European Union, Japan, Southeast Asia, Brazil, and the Middle East, the analysis dimensions cover macroeconomic indicators, an overview of healthcare systems, drug regulatory access systems, and the main challenges that Chinese pharmaceutical companies may face when going global.For more detailed content, please refer to the full report.

In the 19th century, the modern pharmaceutical industry was born in Germany, and subsequently, bulk drugs developed rapidly in developed countries such as Europe and America. Before the 1990s, European and American countries became major global producers of bulk drugs due to their advanced biotechnology and industrial technology, large-scale production lines. After the 1990s, due to environmental pressures, rising production costs, and other factors, the production capacity of bulk drugs in European and American countries began to decline. At the same time, developing countries represented by China and India have emerged as competitive players with their lower labor costs, continuous investment in bulk drug research and development, continuously improving technical levels and production processes, and have shown advantages in bulk drug products. Since then, the global focus on bulk drug production has shifted to other regions mainly based in the Asia-Pacific region. Currently, developed countries and regions in Europe and America dominate the high-value-added patent bulk drug market due to their advantages in innovative drug research and development, production processes, and intellectual property protection; India drives the production of specialty bulk drugs through its generic drug industry; China focuses on bulk drugs with mature technology and high market demand. Data from the China Chamber of Import and Export of Medicines and Health Products shows that China's share of global bulk drug production capacity increased from about 9.3% in 2008 to about 30.0% in 2022.

Data source: Analysis by Frost & Sullivan

Since Hainan Zhejiang Bioengineering Co., Ltd. obtained its first FDA certificate in 1992, China's generic drug manufacturers have accelerated their efforts to gain international market recognition and gradually integrated into the international mid-to-high-end generic drug market. China is a major producer and exporter of generic drugs, accounting for about one-third of the global supply. According to data from the China Chamber of Commerce for Import and Export of Medicine and Health Products, China's generic drug export scale has continued to grow, increasing from $23.6 billion in 2013 to $51.79 billion in 2022. During the period from 2020 to 2022, due to the impact of the COVID-19 pandemic, global demand for generic drugs, especially bulk drugs such as antibiotics, hormones, and antipyretic analgesics, increased significantly. China's generic drug exports grew rapidly during this period, exceeding the EU and ranking first in global exports of generic drugs and intermediates. In 2023, China's generic drug exports reached 12.489 million tons, a year-on-year increase of 5.4%, with an export value of $40.93 billion, a year-on-year decrease of 20.6%. The export volume increased while the price decreased due to the reduced demand from the international market during the post-pandemic period. Bulk generic drug companies faced inventory pressure and China's generic drug companies adopted price cuts as a response.The 'Blue Book' also presents the main markets for China's raw material drug exports and the types of products typically exported by China in bulk raw material drugs.For more detailed content, please refer to the full report.

The 'Blue Book' analyzes and discusses the industrial trends of China's raw material drug exports.Including: 1) Expanding CXO-related pharmaceutical business, optimizing and upgrading the pharmaceutical business model of Chinese bulk drug manufacturers; 2) Extending downstream to the formulation segment, with Chinese bulk drug manufacturers accelerating the integrated development and transformation of drug manufacturing; 3) Chinese bulk drug manufacturers accelerating the expansion of overseas markets, with bulk drug products continuously gaining recognition from overseas regulatory authorities; 4) The value chain of the Chinese bulk drug industry extends, with high-end products, specialty and patented bulk drugs becoming development trends.The 'Blue Book' incorporates specific achievement examples of representative companies, which are systematically presented in conjunction with the segmentation trends.For more detailed content, please refer to the full report.

From the perspective of development trends, developing countries such as China, as well as developed countries like the United States and Japan, have successively introduced policies to regulate drug prices and promote healthcare reform efforts to control costs. Generic drugs are medications that are identical or similar to original research drugs in terms of active ingredients, dosage, efficacy, action, and indications. They have low R&D costs, low selling prices, and high accessibility. On the supply side of drugs, promoting the clinical accessibility of generic drugs and biosimilars is one of the important measures. Their widespread use can bring considerable cost savings to healthcare systems.

For China, developing generic drugs is also an inevitable path to achieve the transformation and upgrading of the pharmaceutical industry. In the mid-to-late 1990s, after China joined the World Trade Organization, the state introduced a series of policy documents aimed at improving the quality and efficacy of generic drugs and achieving clinical substitution for original research drugs. China first proposed to carry out consistency evaluations of generic drugs in 2012, issued the 'Opinions on Carrying Out Consistency Evaluations of Generic Drug Quality and Efficacy' in 2016, further clarifying the evaluation targets and timelines, and proposed that 'for drug varieties that have passed consistency evaluations, appropriate support should be provided in terms of medical insurance payments, and medical institutions should prioritize procurement and clinical use.' Subsequently, in 2018, the 'Opinions of the General Office of the State Council on Reforming and Improving the Supply Guarantee and Use Policies for Generic Drugs' were issued, and in 2019, the 'First Batch of Catalogues of Encouraged Generic Drugs' was released.

Generic drugs can reduce the high upfront research and development costs and risks, allowing them to compete in the market at lower prices. The expiration of a core patent for an original drug means the end of its innovation cycle and it will face pressure from low-cost generic drugs.The Blue Book presents representative drug cases that have been impacted by generic drugs and biosimilars in the history of global pharmaceutical sales.For more detailed content, please refer to the full report.

In the next few years, both small molecule drugs and large molecule biologics will see several key patents expire. The loss of market exclusivity for original research drugs means that generic pharmaceutical companies will face opportunities.The Blue Book also lists key drugs with critical patents about to expire globally, along with relevant expiration dates and research and development manufacturers.For more detailed content, please refer to the full report.

With the continuous rise in prevalence of chronic diseases, diabetes, and cardiovascular diseases, the aging population is increasing, healthcare expenditures are growing, and the high demand for generic drugs along with a large number of patents expiring are all promoting the development of the generic drug market. The generic drug industry has entered a relatively stable development phase. Frost & Sullivan data shows that from 2019 to 2023, the global market size for generic drugs and biosimilars expanded by a compound annual growth rate of 1.4% from $436.7 billion to $462 billion. The future growth trend will continue, with estimates reaching $535.5 billion and $600 billion in 2026 and 2030 respectively.

Data source: Analysis by Frost & Sullivan

Looking back at the past two years, Israel's Teva, US-based Viatris, and Swiss Sandoz have firmly ranked among the top three in terms of global generic drug company revenue scale, forming a solid leading position. A total of four manufacturers from India have made it into the TOP10 list, with revenue growing year-on-year, including Sun Pharma, Aurobindo, Dr. Reddy's, and Cipla.

In the early stages of the generic drug market development, generic pharmaceutical companies' expansion was relatively smooth. However, as the market matures and resources gradually become surplus, eliminating backward and excess capacity has become an irreversible trend, and ordinary generic drugs have entered a era of marginal profit. To maintain competitiveness during the market maturity period, generic pharmaceutical companies need to adjust their development strategies in real time according to their actual situation and changes in the external environment. Looking globally, facing the current insufficient growth momentum in generic drug business, generic drug giants are integrating existing resources and adopting a series of strategic layouts in order to maintain profit levels and stable market share. Their development history and strategic layouts at different times also reflect the changes in the global generic drug market pattern and development trends.The Blue Book details the main strategic developments of global imitators.For more detailed content, please refer to the full report.

Data source: Analysis by Frost & Sullivan

The rise of China's generic drug industry internationally will inevitably face competition with India's generic drug industry.The 'Blue Book' will compare the competitive advantages of China and India in the global generic drug field from multiple dimensions such as biochemical talent reserves, manufacturing capabilities, supply chain advantages, and market compliance standards. For more detailed content, please refer to the full report.

Although the generic drug industry in Europe and America has a vast market, it is already controlled by major generic drug giants and is in a state of full competition. From the global experience of generic drug development, strict quality and cost control, a rich product pipeline, high-tech barriers for generic drug layout, and the ability to develop first generics are the core competitive advantages of generic drug companies. Enterprises in China with these capabilities will always have considerable profit margins in the global market. As the number of Chinese generic drugs going global increases and international recognition of their quality strengthens, under the scale effect, China's pharmaceutical industry will experience a leap and transformation.

The Blue Book discusses the current situation and trends of China's generic drug industry.This includes: 1) Chinese generic drug manufacturers are pursuing 'first-to-market' and 'high-difficulty generics' varieties with a better competitive landscape, aligning with the high-end market; 2) In response to the current shortage of injectables in the US, Chinese generic drug companies are accelerating their efforts to seize market opportunities; 3) China's biosimilars have also started competing globally, showing strategic models for representative enterprises going global under segmented trends, as well as overseas revenue situations. This reflects the achievements and paths of the companies in terms of variety tiers, standard production systems, capacity scale, sales channels, and commercialization operations capabilities.For more detailed content, please refer to the full report.

With the intensification of global population aging, changes in disease spectrum, and improvements in medical standards, the demand for innovative drugs continues to grow. Driven by increasing clinical needs, countries around the world continue to increase investment, promote technological innovation, and accelerate the process of new drug development. The continuous emergence of new targets and technologies provides more possibilities for innovative drug research and development, leading to more clinical applications and the launch of new drugs. At the same time, the global innovative drug industry has entered an era of diverse opportunities and fierce competition, with its market size on the rise. Frost & Sullivan data shows that from 2019 to 2023, the global market for patented drugs expanded from $887.7 billion to $1,010.3 billion at a compound annual growth rate of 3.3%. The growth trend will continue, with estimates reaching $1,231.2 billion and $1,469.4 billion in 2026 and 2030, respectively.

Data source: Analysis by Frost & Sullivan

Compared with the domestic market, some overseas developed countries exhibit broader potential for innovative drug markets.The 'Blue Book' comprehensively considers various factors such as economic development level, the structure of the medical security system, and the pricing of innovative drugs, arguing that for innovative drugs to go global, they can bring higher returns.For more detailed content, please refer to the full report.

In June 2017, the former China Food and Drug Administration (CFDA) stated that China has become a member of the International Council for Harmonization of Technical Requirements for Human Pharmaceuticals (ICH), becoming the eighth regulatory body member of ICH and a member of its Management Committee the following year. Since then, China's drug review standards have gradually been aligned with international standards. In addition, China's laws, regulations, and policies related to innovative drugs have been continuously iterated and upgraded, including the 'Guiding Principles for Clinical Research and Development of Antitumor Drugs Oriented towards Clinical Value' and the '14th Five-Year Plan for the Pharmaceutical Industry Development', which have strongly promoted the innovation and development of domestic drugs.The Blue Book compiles relevant policies and events promoting the development of innovative drugs.For more detailed content, please refer to the full report.

In recent years, China's innovative drug research and development has generally maintained a steady pace of development. Data from an article titled 'Trends in Innovative Drug Research and Development in China' published in Nature Review Drug shows that from 2010 to 2020, a total of 1,636 innovative drugs submitted their initial IND applications. The number of clinical trials (INDs) for innovative drugs in China is increasing, with an average annual growth rate of 32%. Among them, 1,410 drugs (86%) came from 689 Chinese domestic companies. With the accelerated advancement of the reform of China's drug review and approval system, as well as strong support from policies, capital, and talent for new drug research and development, Chinese innovative pharmaceutical companies are gradually emerging. In recent years, a large number of new drugs have been successfully launched in China.The Blue Book summarizes the results of innovative drug reviews in recent years.For more detailed content, please refer to the full report.

Data source: Literature search, Frost & Sullivan analysis

Baiji Shenzhou is a pioneer in the internationalization of local innovative drugs. Its Zanubrutinib, as China's first anti-cancer drug independently developed by a local enterprise and approved for marketing by the FDA, marks an important step forward for Chinese original research new drugs on the internationalization path. The successful internationalization of Zanubrutinib is also a microcosm of China's biomedical innovation and upgrading. In recent years, innovative pharmaceutical companies have successfully developed a series of new drugs with independent intellectual property rights through increased R&D investment and technological innovation, and gained recognition in the international market.The 'Blue Book' compiles a list of seven innovative Chinese drugs that have been approved for marketing by the US FDA from 2019 to the first half of 2024.For more detailed content, please refer to the full report.

The 'Blue Book' discusses the current situation and trends of China's innovative drug industry.This includes: 1) Chinese domestic pharmaceutical companies are building international market access for innovative drugs by actively conducting overseas clinical trials, international registration, and certification; 2) The License-out model has become the main engine for Chinese innovative drugs to go global, with a new high in the scale of external licensing cooperation, more diverse overseas varieties, and outstanding performance of innovative drugs and therapies represented by ADCs; 3) The successful path to going global cannot be achieved overnight, facing the test of 'favorable timing, geographical location, and people's support'.

The strategies for Chinese innovative drugs to go global mainly include self-export, leveraging other companies' platforms for export, and joint ventures. Under these three strategies,The Blue Book presents examples of Chinese innovative pharmaceutical companies successfully entering the international market.For more detailed content, please refer to the full report.

The NewCo model is paving a new internationalization path for domestic innovative pharmaceutical companies.The 'Blue Book' analyzes the application advantages of the NewCo model and presents case studies of domestic enterprises that have adopted the NewCo model in recent years.For more detailed content, please refer to the full report.

Baiji SinovationBaiji Biosciences was established in 2011 and is a global biopharmaceutical company based on science. It is committed to being a disruptor in the biotechnology industry, providing effective, accessible, and affordable drugs for cancer patients worldwide.

Fosun PharmaFosun Pharma is an international innovative biopharmaceutical company dedicated to providing affordable high-quality biologics for patients worldwide. Its products cover areas such as oncology, autoimmune diseases, and ophthalmic diseases. Since its establishment in 2010, Fosun Pharma has built an integrated biopharmaceutical platform, with efficient and innovative core capabilities spanning the entire R&D, production, and commercial operation chain. The company has established a complete and efficient global innovation center, producing and managing quality in accordance with the Good Manufacturing Practice (GMP) standards, continuously consolidating its integrated comprehensive production platform. Among them, the company's commercial production base has successively obtained GMP certifications from China, the European Union, and the United States.

Junshi BiologyJunshi Biosciences was established in 2012 and is a biopharmaceutical company driven by innovation, dedicated to the discovery, development, and commercialization of innovative therapies. With its outstanding ability in innovative drug discovery, advanced biotechnology research and development, large-scale production technology across the entire industrial chain, and a highly promising portfolio of drugs under research, Junshi Biosciences has great potential in the treatment of tumor immunotherapy, as well as autoimmune system diseases, chronic metabolic diseases, neurological diseases, infectious diseases, and more.

Nuoyuan MedicalNanjing Nuoyuan Medical Devices Co., Ltd. (hereinafter referred to as Nuoyuan Medical) was established in 2011 and is a national high-tech enterprise integrating the research, development, production, and sales of high-end medical devices and innovative targeted probes. The company has established an innovative model of 'combining medicine and devices' to provide a full-chain solution for precise tumor diagnosis and treatment; it possesses continuous innovation capabilities, develops multiple series of medical devices and contrast agents at international advanced levels, focuses on core technologies such as molecular fluorescence, Raman spectroscopy, artificial intelligence, and AI-assisted drug design, and has a rich product pipeline, committed to becoming a leader in precision medical technology.

Puli PharmaceuticalHainan Puliy Pharmaceutical Co., Ltd. was established in 1992 and is a high-tech enterprise specializing in drug research and development, registration, production, and sales. The company adheres to the corporate mission of 'benefiting all under heaven and benefiting health', and is committed to providing therapeutic value products and services for patients and customers worldwide. Puliy Pharmaceutical has now become one of the top 100 technology innovation enterprises listed in China, a leading enterprise in internationalizing pharmaceutical preparations in China, and an intelligent manufacturing enterprise of the Ministry of Industry and Information Technology. It has been included by the Ministry of Industry and Information Technology in the key project for children's pharmaceuticals under Made in China 2025 for industrial transformation and upgrading in 2016.

Thermo FisherThermo Fisher provides industry-leading pharmaceutical services solutions such as drug development, clinical trial logistics, and commercial production through the PatheonTM brand. It has over 65 branches globally, offering integrated end-to-end support at all stages of development, including APIs, biopharmaceuticals, viral vectors, cell therapy products, formulations, clinical trial solutions, logistics services, commercial production and packaging. Thermo Fisher is committed to leveraging its global strengths, building partnerships with customers, promoting the journey of drugs overseas, and quickly turning the possibilities of the pharmaceutical industry into reality.