Abstract:In recent years, China's biopharmaceutical industry has shown a rapid development momentum. Benefiting from the government's support policies in the field of new drug development, pharmaceutical companies have increased R&D investment and actively promoted the growth of the biological drug market. In 2022, the scale of China's biopharmaceutical market has climbed to 449.3 billion yuan, a year-on-year increase of 9.59%, showing strong growth potential. In addition to the steady expansion of the market scale, China's biopharmaceutical industry has shown a positive development trend in the quantity and quality of clinical trials, innovative drug research and development, and the construction of pharmaceutical industrial parks. However, compared with developed countries, China's biopharmaceutical industry still needs to be improved in terms of innovation ability and technical level.
1. Definitions and Classification
Biological drugs refer to a class of products for prevention, treatment and diagnosis made of biology, medicine, biochemistry, etc., comprehensive use of the principles and methods of physics, chemistry, biochemistry, biotechnology and pharmacy, and the use of organisms, biological tissues, cells, body fluids, etc. According to the classification of chemical properties and characteristics, biological drugs can be divided into amino acid and its derivatives drugs, peptide and protein drugs, enzyme and coenzyme drugs, nucleic acid and its degradants and derivatives drugs, carbohydrate drugs, lipid drugs, cell growth factor drugs, biological products drugs, etc. Biological drugs can be divided into therapeutic drugs, preventive drugs, diagnostic drugs and other biological drugs according to their physiological functions and clinical uses.
Second, industry policies
1. Competent authorities and regulatory system
The competent authorities for biopharmaceuticals include the National Medical Products Administration, the National Health Commission, the National Development and Reform Commission, the Ministry of Ecology and Environment, and the Ministry of Industry and Information Technology of the People's Republic of China.
The National Medical Products Administration (NMPA) is responsible for the safety supervision and administration of drugs, medical devices and cosmetics. Formulate supervision and management policy plans, organize the drafting of draft laws and regulations, formulate departmental rules, and supervise their implementation. Responsible for the standard management of drugs, medical devices and cosmetics, responsible for the registration management of drugs, medical devices and cosmetics, and responsible for organizing and guiding the supervision and inspection of drugs, medical devices and cosmetics. The State Drug Administration, together with the National Health Commission, shall organize the National Pharmacopoeia Commission and formulate the National Pharmacopoeia, and establish a mutual notification mechanism and joint disposal mechanism for major adverse drug reactions and adverse events of medical devices. The National Development and Reform Commission is responsible for the macro guidance of the development plan of the pharmaceutical industry and the operation of enterprises in the industry, the establishment of technological transformation investment projects in the pharmaceutical industry, the supervision and management of drug prices, and the promotion of the implementation of national industrial policies. The Ministry of Ecology and Environment of the People's Republic of China is responsible for establishing and improving the basic system of the ecological environment, supervising and managing the development of environmental pollution prevention and control, supervising the implementation of national emission reduction policies, and at the same time, is responsible for ecological environmental supervision and law enforcement and ecological environment monitoring. The Ministry of Industry and Information Technology of the People's Republic of China is responsible for formulating and issuing the development plan for the pharmaceutical industry, organizing the implementation of the pharmaceutical industry policy, and guiding the structural adjustment of the pharmaceutical industry.
2. Industry-related policies
In recent years, China's biopharmaceutical industry has developed rapidly, and the policy environment has become more and more conducive to the development of the industry. In February 2024, the State Food and Drug Administration issued the "Pilot Work Plan for Optimizing the Reform of the Review and Approval Procedures for Supplementary Drug Applications", proposing to continue to deepen the reform of the drug review and approval system, optimize the review and approval procedures for supplementary drug applications, improve the efficiency of drug review and approval, support the iterative upgrading of drug production technology, and serve the high-quality development of the biopharmaceutical industry. The policy encourages biopharmaceutical companies to increase investment in R&D and technological innovation to promote technological progress and industrial upgrading of the industry. And for biopharmaceutical companies, this means being able to launch innovative drugs faster to meet the needs of patients, while also being able to realize economic returns faster.
Third, the development process
The development of China's biopharmaceutical industry has gone through three stages. During the initial development period from 1919 to 1989, China's biopharmaceutical research was carried out earlier, but due to the influence of the times, the scale of products was small, only vaccine products, but the production area continued to expand. After the founding of the People's Republic of China, the development of the previous vaccine industry boosted the development of blood products, with the increase of benefits and the improvement of the process, blood products began to be widely developed, while DNA recombinant technology is far behind foreign countries. During the period of steady growth from 1990 to 2010, China's biopharmaceutical industry started late, and there was a big gap between China and the United States in terms of technology research and development and drug production. Biotechnology is weak, research and development is difficult, and the diversity and efficacy of drugs still need to be improved. Since 2010, thanks to the encouragement and support of the national industrial policy, a group of outstanding medical professionals have returned to China and established new biological drug research and development companies one after another. As a result, the field of biological drugs has achieved rapid development, and the research, development, and industrialization of genetic engineering drugs as the core have been quite large-scale, gradually narrowing the gap with advanced countries. At the same time, the improvement of the financing environment and the tendency of resource flow have made biopharmaceuticals one of the hottest investment areas in healthcare.
Fourth, industry barriers
1. Technical barriers
The biopharmaceutical industry is a field that is highly dependent on technological innovation, so technical barriers are one of the main obstacles to the development of the industry. First of all, the research and development of biological drugs requires advanced scientific research equipment and professional talents, and the acquisition and maintenance of these resources require a large amount of capital investment. Second, the R&D cycle of biopharmaceuticals is long and high-risk, requiring continuous technological breakthroughs and innovations. However, due to the high technical barrier to entry, many companies struggle to meet these requirements and thus are unable to enter the biopharmaceutical market. In addition, the production of biopharmaceuticals also requires sophisticated technology and equipment, which also increases the technical difficulty and cost of enterprises. Therefore, technical barriers are one of the key factors restricting the development of China's biopharmaceutical industry.
2. Financial barriers
The biopharmaceutical industry is a capital-intensive industry that requires significant capital investment to support R&D, manufacturing, and marketing. First of all, the research and development of biopharmaceuticals requires a large number of clinical trials and data analysis, and these processes require a lot of financial support. Secondly, the production of biopharmaceuticals also requires high-precision equipment and technology, which requires a large amount of capital investment. In addition, marketing and brand building also require a lot of financial support. Therefore, financial barriers are another important factor restricting the development of China's biopharmaceutical industry. Many small and medium-sized enterprises (SMEs) have difficulty entering the biopharmaceutical market due to insufficient funds, thus limiting the competition and development of the industry.
3. Market access barriers
The market access barriers of China's biopharmaceutical industry are mainly manifested in the complex approval process, long time cycle, and strict review standards. As a high-tech, high-risk industry, biological drugs have extremely high requirements for product safety and effectiveness, and need to go through strict approval procedures before they can be marketed. In addition, the market competition in the biopharmaceutical industry is fierce, with well-known brands and established companies occupying market advantages, and new entrants facing problems such as limited market share and lack of channel resources, and market access barriers are a major challenge for new companies.
Fifth, the industrial chain
1. Analysis of the industry chain
The upstream of the biopharmaceutical industry chain is mainly raw materials and R&D equipment, of which raw materials include plasma, antibodies and enzymes, cell culture media, low serum media, various antigens, various chemical raw materials, etc., and R&D equipment includes fermenters, low-temperature circulation machines, silent oil-free air compressors, high-pressure homogenizers, sterilizers, low-temperature centrifuges, etc.; the middle reaches of the industrial chain are R&D and manufacturers of biological drugs; the downstream of the industrial chain is medical institutions and pharmacies.
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