Abstract:The mainland is already a big producer of pharmaceutical machinery. According to the data of China Pharmaceutical Equipment Industry Association, the output of mainstream pharmaceutical machinery in mainland China has grown rapidly since 2015, and the output of mainstream pharmaceutical equipment in 2022 will be as high as 68,079 units, of which the output of decoction pieces machinery and equipment is the largest, reaching 21,407 units, accounting for 31.4% of the output of mainstream pharmaceutical equipment in mainland China, followed by drug testing machinery and equipment, with an output of 11,754 units, accounting for 17.3% of the output of mainstream pharmaceutical equipment in mainland China. After decades of development and accumulation, the mainland pharmaceutical machinery industry has gradually formed a number of pharmaceutical machinery manufacturers with strong R&D capabilities, independent intellectual property rights, and strong competitiveness in the mid-to-high-end market, representing enterprises such as Chutian Technology, Tofflon, Canaan Technology, Xinhua Medical, etc.
1. Definitions and Classification
Pharmaceutical machinery, also known as pharmaceutical equipment, pharmaceutical special equipment, etc., refers to machinery and equipment used for drug production, inspection, packaging and other purposes, and is one of the most basic facilities of pharmaceutical enterprises. According to the process flow, it can be divided into two parts: preparation and packaging, and the equipment and production lines corresponding to different product and dosage form requirements are different, so pharmaceutical equipment is a non-standard product, which often needs to be specially customized according to customer needs.
In order to ensure the quality level of drugs, the State Food and Drug Administration has implemented GMP compulsory certification in the pharmaceutical industry since 1999, which has put forward rigid requirements for the production equipment and production environment of pharmaceutical enterprises, which has promoted a significant increase in the demand for pharmaceutical special equipment. National and industry standards divide pharmaceutical machinery into eight categories according to the basic attributes of pharmaceutical special equipment products.
Second, the business model
1. Profit model
Through continuous technology research and development and process innovation, pharmaceutical machinery enterprises can meet the individual needs of customers, and provide professional supporting services, participate in their process design and improvement links, including drug manufacturing processes, engineering layout suggestions, etc., to create value for customers, so as to achieve their own profits. In the process of providing customers with products and services, leading enterprises in the pharmaceutical machinery industry have gradually improved from the most basic pharmaceutical equipment sales to providing systematic solutions, which not only improves the added value of the industrial chain, but also deeply binds downstream customers to achieve long-term cooperation.
2. Procurement mode
Pharmaceutical machinery enterprises mainly use the method of "production and procurement" supplemented by "safety stock" to carry out the procurement of productive materials. According to the nature of different materials, the content of pharmaceutical machinery enterprises mainly includes metal raw materials and functional purchased parts, metal raw materials are mainly steel required for production, and functional purchased parts are in addition to metal raw materials, the general name of other types of materials assembled in enterprise products, mainly including mechanical and electrical equipment, mechanical parts, electronic and electrical equipment, etc. For the more versatile steel and commonly used purchased parts such as motors and fans, the company will set a safety stock, and submit a purchase application from the demand department from time to time according to the actual production plan and business needs. For purchased parts with a high degree of customization such as electronic control equipment, the company conducts targeted procurement after determining the specific parameters and models by the technical department. The purchasing department generates a procurement plan according to the purchase requisition submitted by the demand department, inquires and compares prices with different suppliers, and selects suppliers to complete the procurement based on the quality of the purchased materials, delivery deadlines and past cooperation experience.
3. Production mode
Pharmaceutical machinery enterprises mainly adopt the production mode of "sales and production", take customer demand as the guide, prepare production plans according to customer orders and issue production workshops to organize production. For products with a high degree of customization, due to the differences in the configuration, performance, parameters and other requirements of different users, the technical department needs to design and develop products according to customer needs, and then prepare and produce according to the design scheme. The production guarantee system of pharmaceutical machinery enterprises is composed of purchasing department, production department and quality department, among which, the procurement department is responsible for the procurement and execution of materials; the production department is responsible for the implementation and control of the production process, through welding, machining, surface treatment, assembly, debugging and other production processes, to complete the production of equipment and related parts, assembly and commissioning before leaving the factory; the quality department sets up key control points according to product performance requirements and related processes, formulates control items and target values, and conducts performance operation tests on the whole machine. After the product is completed and inspected by the quality department, the equipment will be FAT accepted according to customer needs to ensure that the equipment as a whole meets customer requirements.
4. Sales model
The sales process of pharmaceutical machinery enterprises mainly includes technical negotiation, confirmation of technical functions and configurations, confirmation of engineering processes, business negotiations, determination of terms such as price and delivery time, and contract signing.
Since most of the products are customized, pharmaceutical machinery companies need to participate in the production process design of downstream pharmaceutical enterprises before sales, and provide customers with technical consultation, process experiments, scheme design and other services. Combined with the specific needs of customers, the overall plan is formed and approved by the customer, and the business contract is signed with the customer. After that, the production of the product will be arranged, and a series of services such as installation guidance, commissioning and after-sales service will be provided according to the contract after delivery. Due to the strong technical professionalism of the above-mentioned process, pharmaceutical machinery enterprises mainly sell through direct sales, and only a small number of sales are carried out through intermediaries. These intermediaries are mainly oriented to overseas end customers, using their mature sales channels and rich customer resources in overseas markets to help the company expand its market share.
Pharmaceutical machinery enterprises to obtain orders are mainly divided into bidding and competitive negotiation and other forms. Pharmaceutical machinery companies will comprehensively consider the market supply and demand situation, customer technical needs, production process difficulty, order size, customer delivery time requirements and other factors that affect production costs, set the expected profit margin level for different projects, and determine the product price on this basis. For existing customers, because pharmaceutical machinery belongs to the fixed asset investment of pharmaceutical enterprises, there is a certain periodicity in the procurement demand of a single customer, pharmaceutical machinery enterprises in the follow-up operation and maintenance and technical support work to maintain customer communication, through high-quality products and services with customers to establish long-term and stable cooperative relations, improve the repurchase rate of existing customers, in its production line update or new production capacity is expected to obtain new orders. In this regard, pharmaceutical machinery companies need to send after-sales specialists in major sales markets to quickly respond to customer needs.
For incremental customers, sales staff need to carry out business development work, enterprises through the establishment of a good reputation and brand image in downstream customers, and further through customer recommendations, network technology exchanges and other channels to increase product publicity. In addition, pharmaceutical machinery companies also participate in pharmaceutical equipment industry exhibitions held at home and abroad to promote the company's products and technologies, enhance product visibility, and expand more market opportunities.
3. Industry policy
1. Competent authorities and regulatory system
As an agency directly under the State Council, the State Administration for Market Regulation is mainly responsible for the comprehensive supervision and management of the market, the unified registration of market entities and the establishment of information publicity and sharing mechanisms, the organization of comprehensive law enforcement of market supervision, the undertaking of unified anti-monopoly law enforcement, the regulation and maintenance of market order, the organization and implementation of the strategy of strengthening the country with quality, and the unified management of measurement, standardization, inspection and testing, certification and accreditation.
The State Drug Administration is managed by the State Administration for Market Regulation, and undertakes the main responsibilities of the former State Food and Drug Administration, which is responsible for the safety supervision and management, standard management, registration management, quality management and post-market risk management of drugs, medical devices and cosmetics, organizing and guiding the supervision and inspection of drugs, medical devices and cosmetics, and responsible for foreign exchanges and cooperation in the field of supervision and management of drugs, medical devices and cosmetics.
China Pharmaceutical Equipment Industry Association is a self-regulatory organization of the industry, which is a national, industrial and non-profit social organization voluntarily formed by units engaged in pharmaceutical equipment manufacturing and application, which is mainly responsible for formulating industry development plans, formulating and revising national standards and industry standards for pharmaceutical equipment, industry statistics, hosting the National Pharmaceutical Machinery and China International Pharmaceutical Machinery Expo, and carrying out technical exchanges and training at home and abroad. The company is the governing unit of China Pharmaceutical Equipment Industry Association.
2. Industry-related policies
In recent years, relevant government departments and institutions have formulated a series of laws, regulations and industry policies to support the development of the industry. The "14th Five-Year Plan for the Technology Development of Pharmaceutical Equipment" proposes to make full use of modern technology to carry out intelligent transformation of pharmaceutical equipment, improve the independent innovation ability of pharmaceutical equipment, and promote the leapfrog development of the pharmaceutical equipment industry. During the "14th Five-Year Plan" period, the gap between the overall level of the mainland pharmaceutical equipment industry and the international advanced level will be greatly narrowed, and some fields will be close to the international advanced level, and 10~15 enterprises will be built to provide intelligent pharmaceutical equipment advantages, and 3~5 pharmaceutical equipment industry leaders with international influence and strong international competitiveness will be formed.
Fourth, the development process
The development of China's pharmaceutical machinery industry has gone through four stages of development. The mainland pharmaceutical machinery industry started in the 70s of the 20th century, with the development of the mainland pharmaceutical industry, some small domestic pharmaceutical machinery factories came into being, mainly providing some simple pharmaceutical equipment and spare parts. By the mid-90s of the 20th century, there were more than 400 pharmaceutical machinery manufacturers in the mainland, and more than 1,100 specifications of pharmaceutical machinery could be produced. However, on the whole, the scale of enterprises is generally small, and the added value of products is low. In August 1999, the "Good Manufacturing Practice for Drugs (Revised in 1998)" was implemented, stipulating that before June 30, 2004, the production of pharmaceutical preparations and APIs must all meet GMP requirements and obtain certification. The mandatory GMP certification of Chinese drugs has put forward rigid requirements for the production equipment and environment of pharmaceutical enterprises, and pharmaceutical companies have carried out production transformation around GMP requirements, providing opportunities for the pharmaceutical machinery industry to accelerate its development. The promulgation of the 2010 version of GMP has promoted the second GMP transformation of domestic pharmaceutical enterprises, ushered in a wave of development dividends in the pharmaceutical machinery industry, and a new round of high-tech pharmaceutical machinery in the domestic demand climax has been set off again.
In recent years, the continuous promotion of domestic substitution of drugs in mainland China, the improvement of environmental protection requirements in the pharmaceutical industry and the vigorous development of the pharmaceutical outsourcing industry have brought new opportunities and challenges to the pharmaceutical machinery industry. Domestic enterprises have seized the huge opportunity of import substitution of pharmaceutical machinery, and at the same time actively develop overseas markets. The state supports and encourages the high-end pharmaceutical equipment industry to accelerate the transformation and upgrading of the pharmaceutical equipment industry, and the entry opportunity provided by the new crown epidemic has led to the growth of China's pharmaceutical equipment industry from the cyclical industry under the update of GMP standards in the past to the two-wheel drive of "demand + supply".
Fifth, industry barriers
1. Technical barriers
Pharmaceutical machinery industry is a multidisciplinary, knowledge-intensive, capital-intensive high-tech industry, pharmaceutical machinery research and development, design, production usually involves pharmacy, materials science, fine chemistry, packaging engineering, machinery manufacturing and other disciplines and technologies, into the industry needs to have a strong cross-industry technology integration ability, but also need to have a long-term technical experience accumulation, and the accumulation of proprietary technology and the cultivation of scientific research and development capabilities is a long-term process, the general enterprise in a short period of time can not be quickly formed. Enterprises in the leading position in the industry, after continuous R&D investment, have significant advantages in product design, production technology and production process, forming certain technical barriers for enterprises entering the industry in the later stage.
2. Quality barriers
Because pharmaceutical machinery can directly affect the production efficiency and quality of pharmaceutical enterprises, it must not only meet the various quality standards formulated by the state and various departments of the industry, but also need to meet the various personalized and strict requirements of downstream pharmaceutical manufacturers, and ensure the stability of equipment operation in the process of high-speed and continuous operation. Therefore, the selection of pharmaceutical machinery suppliers and products by pharmaceutical manufacturers is a long-term process, which needs to go through strict inspection and demonstration procedures. Usually, without the test of long-term running-in, tacit cooperation and stable quality, it is not easy to change a supplier with long-term cooperation.
3. Brand and customer resource barriers
The performance and stability of pharmaceutical machinery have a direct impact on the safety of drugs. Pharmaceutical machinery has the characteristics of high unit value and long use time, and downstream customers have high requirements for product performance, stability and after-sales service, and the stability and reliability of product operation are important criteria for customers to choose pharmaceutical machinery suppliers. At present, enterprises in the industry rely on long-term accumulation to establish a certain brand awareness and accumulate rich customer resources, while it is difficult for new entrants to establish a good brand image and accumulate more customer resources in a short period of time. Therefore, the pharmaceutical machinery industry has formed a high brand and customer resource barriers for new entrants.
4. Financial barriers
The R&D cycle of pharmaceutical machinery is long, and it needs to go through a large number of R&D and trial production processes, and the investment in fixed assets is large, which requires enterprises to have considerable financial strength. First of all, the cost of a single pharmaceutical machinery is higher, the cost of a single set ranges from thousands to hundreds of thousands, enterprises need to have a certain financial strength to ensure the normal operation of large-scale production and the continuous development of new products; secondly, the creation of brands, the accumulation of customer resources and the construction of pre-sales and after-sales service networks, all require long-term accumulation and a large amount of capital investment. To sum up, new entrants need to have strong financial strength and a certain scale to gain a foothold in the pharmaceutical machinery market, and there are high financial barriers in the industry.
Sixth, the industrial chain
Industry chain analysis
The upstream industries of pharmaceutical machinery mainly include raw materials such as steel, mechanical parts and electrical parts industries. The iron and steel industry provides all kinds of steel for the pharmaceutical machinery industry, which is used for the production of brackets, main structural parts and non-standard mechanical parts of pharmaceutical machinery, and mechanical and electrical parts provide various standard mechanical parts and electrical parts such as motors and PLCs for the pharmaceutical machinery industry. The downstream demand customers of the pharmaceutical machinery industry are mainly pharmaceutical enterprises, including Chinese patent medicines, Chinese medicine decoction pieces, chemical raw materials, chemical preparations, biological drugs and other types.
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