Innovative pharmaceutical companies are expected to emerge from the slow cow pattern

The pharmaceutical industry is closely related to the health of every citizen and is considered to be the most direct civilian production industry. It mainly includes chemical drugs, Chinese medicine, biotechnology drugs, medical devices, pharmaceutical excipients and packaging materials, and pharmaceutical equipment. In recent years, due to the combined effects of changes in the economic environment, prices, and costs, the growth rate of China's pharmaceutical industry has slowed down. Nevertheless, the pharmaceutical industry is still a stable and growing high-quality industry in the eyes of many people.

Wang Wei, Morgan Stanley Huaxin Fund Research Management Department stated: “Looking back, in the past, the pharmaceutical industry will never lack investment opportunities, but what is extremely important for investment is the best way to invest in the cycle of the pharmaceutical industry.”

In fact, although the pharmaceutical industry is relatively stable, the industry's small cycle is obvious, and changes in demand and supply are often alternated. In addition, the government of the pharmaceutical industry has more supervision and will often cause disturbance to supply and demand.

Wang Wei replied with emotion and recalled the history of medicine for more than 10 years. From the present point of view, the future of the industry will be dominated by structural opportunities.

Under the background of medical insurance control fees, the fiercely competitive generic drugs industry is facing long-term downside risks, but the domestic supply of innovative drugs is a serious shortage. Wang Wei believes that in the future, innovative companies are expected to embark on a long-term slow-moving situation. With the internationalization of innovative drug companies, Chinese pharmaceutical companies may only have hundreds of billions of market capitalization listed companies.

At the same time, the process of internationalization is also evolving. At first, it is the export of APIs, and gradually the export of medical devices and generic drugs. The future innovative drug companies are expected to gradually move toward the world. With the development of technologies such as sequencing, gene editing, and immune cell therapy, the industry is expected to accelerate.

According to Wei Jigang, researcher and researcher of the Industrial Economics Research Department of the Development Research Center of the State Council, strengthening innovation is the overall direction of the development of the pharmaceutical industry.

In Wei Jigang's opinion, to achieve pharmaceutical industry innovation, we must first recognize two attributes of medicine, namely, the economic and social attributes of medicines. The economic properties of drugs can enable them to operate in the production and circulation sectors. The social properties of drugs are reflected in the consumption process, namely its quality and the availability of prices.

The pharmaceutical industry is an industrial field with huge initial investment and long-term return. Realizing innovation in the pharmaceutical industry requires huge capital and time costs.

Wang Wei specifically pointed out several events that require special attention, such as the signs of acceleration in the reform of state-owned enterprises, and the lack of supply of resource industries such as blood products, as well as the internal power to increase prices. In addition, “the bulk raw materials and other industries have experienced price increases at the beginning of the year, but historically, they are cyclical fluctuations and have poor sustainability.”