From May 11th to 12th, 2021, the 5th China Pharmaceutical Distribution Industry Supply-Side Structural Reform and Innovation Forum in 2021 was grandly held in Shanghai. Centering on the theme of 'Innovation Transcends, Stability Leads to Long-Term Success', this conference took deepening supply-side structural reform as its main line and reform and innovation as its driving force. It gathered domestic and international experts, scholars, regional leading enterprises within the national pharmaceutical distribution industry, and conducted in-depth interpretations of issues such as 'China's economic development trend', 'relevant policies for the traditional Chinese medicine industry', and 'the construction of a dual circulation system'. The forum discussed the opportunities and challenges faced by enterprises, development paths, and the future development trends of the pharmaceutical distribution industry.
Mr. Mao Hua, Partner and Managing Director of Frost & Sullivan Greater China, was invited to attend this event and deliver a keynote speech, sharing industry insights on digital health and healthcare big data.
Mao Hua, Partner and Managing Director of Frost & Sullivan Greater China, delivered a keynote speech titled 'The Evolution and Trend Insights of Digital Health and Medical Big Data Content'.
Mao Hua pointed out that China's digital health industry mainly consists of seven sectors: digital medicine, digital diagnosis and treatment, digital enterprise services, digital insurance, digital health management, digital health infrastructure, and digital consumer healthcare. It has broken the traditional system structure, making information communication among major participants in the healthcare system more close-knit, expanding the coverage and utilization rate of medical resources, improving the pharmaceutical supply chain and big data system for medication, and thus making medical insurance usage more efficient and easier to supervise. Among these, digital medicine, digital diagnosis and treatment, and digital insurance are the core sectors of the digital health industry.
The digital healthcare market in China has broad prospects.He stated that in recent years, with the introduction and implementation of policies such as '4+7' volume-based procurement, 'two-invoice system', and 'Healthy China 2030', the prices of pharmaceuticals and medical devices have become clearer and more transparent. The compression of the drug distribution chain has led to a transformation in the pharmaceutical distribution model, with sales channels showing a continuous downward trend. The concept of 'Internet + healthcare' is becoming increasingly ingrained, and retail channels for pharmaceuticals and medical devices are gradually shifting online. In 2019, digital transaction volumes reached 104.7 billion yuan. With the continuous standardization and improvement of policies, the market scale of digital medicine will continue to grow.
The epidemic has boosted the development of the digital diagnosis and treatment market.China has long faced serious imbalances between medical resources and demand, as well as limited effective consultation time during the healthcare process. The emergence of digital healthcare can effectively optimize resource allocation, assist in hierarchical diagnosis and treatment, make medical processes more reasonable, and facilitate patients' access to medical services and purchasing medications. "Especially against the backdrop of the sudden COVID-19 pandemic, the advantages of digital diagnosis and treatment have become prominent, with online consultations becoming mainstream. In 2020, the volume of digital diagnoses and treatments reached 1.1 billion times." He analyzed that driven by factors such as changes in residents' consumption habits and favorable policies, digital diagnosis and treatment are expected to accelerate their development in the future.
The digital health insurance industry in China has prominent advantages, and the market prospects are also promising.In terms of premium income, the Chinese insurance market ranks second only to the United States as the world's second-largest insurance market, but its insurance depth and density are significantly lower than the global average. He believes that compared with developed countries, the Chinese insurance market is still in its early stages of development and has great potential for growth. Digital health insurance can address some pain points of traditional insurance companies, provide precise user traffic, reduce customer acquisition costs, improve underwriting and claims efficiency and accuracy, and reduce the risk of insurance fraud. At the same time, the diversified business capabilities developed by the digital health insurance industry can offer more products that meet market demands, helping to promote the vigorous development of China's digital health insurance market. According to Frost & Sullivan data, the digital health insurance market grew from 5 billion yuan in 2015 to 16 billion yuan in 2019, with a compound annual growth rate of 29.9%. It is estimated that the market size will reach 103.3 billion and 640.5 billion yuan respectively in 2024 and 2030.
As a globally renowned growth consulting firm, Frost & Sullivan integrates nearly 60 years of consulting experience from around the world. Over the past 23 years, it has dedicated itself to serving the booming Chinese market and has made the health industry one of its core research areas. The Frost & Sullivan healthcare team possesses strong capabilities and extensive experience in the field of life sciences. It has a wide range of healthcare enterprise clients in China and has established a vast customer network and patent database over the past 20 years, covering sales information on innovative drugs in China and financial information from multiple manufacturers. It has established good or deep cooperative relationships with experts across the entire industrial chain, ranging from KOLs to industry experts and government officials.
Frost & Sullivan has a team of senior technical consultants, many of whom have decades of clinical development experience in innovative drugs and medical devices both within and outside the enterprise sector. Over the past sixteen years, the Frost & Sullivan healthcare team has provided financing financial advisory, IPO industry advisory, technical advisory, strategic advisory, management advisory, and other services to hundreds of outstanding domestic and international biopharmaceuticals, medical devices, healthcare services, and internet healthcare companies. It is a leader and witness to the development of China's pharmaceutical industry. In terms of the number of filings, the Frost & Sullivan healthcare team maintains an absolute leading position in Hong Kong healthcare IPOs, continuously occupying more than 90% of the market share from 2018 to 2020.
