Health & Beauty

In 2022, the COVID-19 will continue and the global economy will recover slowly, which will add many uncertainties to the international pharmaceutical market, and the operation of foreign trade of Western medicine products in China will be affected to some extent. Throughout 2022, China's import and export of raw materials maintained good growth, while the export of Western medicine formulations remained relatively stable, with a slight decrease in imports. Biochemical drugs showed a trend of declining export demand and increasing imports. The export growth rate of drugs related to epidemic prevention may slow down or continue to decline.

Faced with the complex economic and trade situation, the Chinese government has continuously increased its reform efforts, and pharmaceutical enterprises are also seeking new development in the changing situation. A series of measures to stabilize foreign trade and foreign investment have been implemented, and the standardization level of the pharmaceutical industry is constantly improving. The process of transformation and upgrading is accelerating. In 2023, the external environment is still severe. In the face of multiple pressures from regulation and the market, driven by multiple growth points such as the recovery of the global economy and the recovery of research and innovation, the high-quality "going global" of western medicine products tested by the COVID-19 is not only the inevitable choice of the industry, but also the inevitable result of regulatory policy implementation and market regulation.

According to customs data statistics, in 2022, the total import and export volume of Western medicine products in China, including raw materials, Western medicine preparations, and biochemical drugs, was 114.739 billion US dollars, a year-on-year increase of 3.55%. Among them, the export value was 64.311 billion US dollars, a year-on-year decrease of 5.01%; The import volume was 50.428 billion US dollars, a year-on-year increase of 16.99%; The export trade surplus was 13.883 billion US dollars, a slight decrease compared to 2021.

From the perspective of trade methods, in 2022, China's general trade exports of Western medicine products accounted for 86.65% of the overall export volume, a year-on-year decrease of 6.68%; The proportion of general trade imports was 37.64%, a year-on-year decrease of 5.8%. The import and export trade of logistics goods in customs special supervision areas has significantly accelerated, with exports accounting for 3.67%, a year-on-year increase of 101.93%; Import accounted for 49.24%, a year-on-year increase of 42.49%. It can be seen that China's export of Western medicine is still dominated by general trade, while the trade of goods in customs special supervision areas has rapidly developed, occupying half of the import trade of Western medicine.

From a quarterly perspective, the export volume of Western medicine products in China increased by 24.60% and 11.79% year-on-year in the first and second quarters of 2022, respectively. In the third quarter, there was a decline in exports, and in the fourth quarter, the export volume decreased by 27.42% year-on-year, resulting in a slight decrease in the overall export volume compared to 2021.

Continuous growth of raw material drug exports and import "quantity price inversion"

The unit price drives the sustained growth of raw material drug exports. As the world's largest producer and exporter of raw materials for many years, China's export volume of raw materials in 2022 was 51.786 billion US dollars, accounting for more than 80% of Western medicine products, with a year-on-year increase of 24.04%. Among them, the export volume of non epidemic drug raw materials such as digestive system raw materials increased by 7.3%, the export volume of amino acid, cardiovascular, and anesthesia raw materials increased by about 20%, and the export volume of central nervous system raw materials increased by over 60%, indicating good export growth. The export volume of categories directly related to epidemic prevention, such as hormones and antipyretic and analgesic raw materials, increased by 12.47% and 22.12%, respectively. The export volume of respiratory system and antibiotic raw materials except for penicillin, cephalosporins, and macrolides decreased. From the perspective of export volume and price, in 2022, China exported a total of 11.9398 million tons of raw materials, an increase of 8.74% year-on-year; The average unit price of exports increased by 35.79% year-on-year, maintaining a stable growth trend since the epidemic. From a market perspective, India and the United States have remained the top two in China's raw material drug export market, with year-on-year growth of 7.54% and 8.74%, respectively.

The import of raw materials shows an inverted trend of quantity and price. According to customs data, in 2022, China's import volume of raw materials was 9.711 billion US dollars, an increase of 5.26% year-on-year; The import volume of raw materials was 1.2388 million tons, a year-on-year decrease of 9.73%, showing a trend of "quantity price inversion". This indicates that China's raw material pharmaceutical industry urgently needs to be upgraded, and downstream formulation research and production are moving towards higher levels and higher quality. The demand for high-end raw material pharmaceutical imports is constantly increasing; At the same time, there are also factors such as increased costs of raw materials, transportation, and supporting facilities affected by the epidemic. From a market perspective, Ireland and India are the two major markets for China's import of raw materials, with year-on-year growth of 20.24% and 9.74%, respectively.

The transformation and upgrading of Western medicine formulations have achieved significant results, and the internationalization of enterprises is accelerating

According to customs data, the export value of Western medicine preparations in China in 2022 was 6.605 billion US dollars, a year-on-year increase of 9.95%; The export volume increased by 8.57% year-on-year; The average export price increased by 1.57% year-on-year. Among them, except for the 1.61% decrease in the export volume of vitamin drugs, all other categories maintained a year-on-year growth trend, with the export growth rate of hormone drugs, including insulin and corticosteroids, and penicillin drugs exceeding 20%. However, the export of insulin preparations increased by 20.77% year-on-year, which narrowed compared to 2021, while the export of corticosteroids directly related to epidemic prevention continued the year-on-year downward trend in 2021. From a market perspective, the United States and France are the two major markets for China's export of Western medicine formulations, with year-on-year growth of 18.01% and 75.83%, respectively.

In terms of imports, the import volume of Western medicine preparations in China in 2022 was 22.834 billion US dollars, a year-on-year decrease of 4.14%. Among them, except for anti infective drugs, the import volume of various Western medicine preparations has decreased, with cephalosporin drugs decreasing by 34.04% and penicillin drugs decreasing by over 40%. From a market perspective, Germany and France are the two major markets for China's import of Western medicine formulations. In 2022, the import volume decreased by 7.14% year-on-year and increased by 4.49% respectively.

It is worth noting that China's exports of Western medicine preparations to Africa, ASEAN, and Latin America account for 11.13%, 8.28%, and 8.26% of the global export market share, respectively, and all show a year-on-year growth trend, indicating that the transformation and upgrading effect of China's Western medicine preparation industry is significant, and the internationalization of enterprises is accelerating. In addition to the gradually mature dual reporting layout of China, the United States, and China Europe in recent years, the demand for Western medicine formulations in overseas emerging markets is also further expanding. Although the export of Western medicine formulations to developed countries and regions such as the United States and France has increased, this does not mean that China's pharmaceutical industry has fully entered the global leading position. In fact, China's exports to standardized markets are still mainly produced or commissioned by foreign enterprises in China.

The import volume of biochemical drugs increased by 77.78%, and the export of vaccines significantly decreased

China's exports of biochemical drugs and Western medicine preparations are evenly divided. According to customs data, the export value of biochemical drugs in 2022 was 5.921 billion US dollars, a year-on-year decrease of 70.32%. Among them, heparin and its salts were the main export products, with an export value of 1.569 billion US dollars, accounting for 26.5%, a year-on-year decrease of 1.8%; The export value of human vaccines was 993 million US dollars, a year-on-year decrease of 93.66%; The export value of enzymes and coenzyme products was 819 million US dollars, a year-on-year decrease of 5.53%; The export value of protein products was 1.083 billion US dollars, a year-on-year increase of 19.49%. In terms of market, in 2021, China's biochemical drugs will be driven by the soaring export demand of COVID-19 vaccine, and the export markets will mainly be Southeast Asia, Latin America and other regions; In 2022, the top two markets for China's biochemical drug exports were the United States and Hong Kong, with a year-on-year decrease of 6.3% and an increase of 8.14%, respectively; The exports to Indonesia, Pakistan, and the United Arab Emirates, the top three biochemical drug markets in 2021, decreased by 91.58%, 96.13%, and 90.81% respectively year-on-year, which is basically consistent with the overall decline in human vaccine exports.

In terms of imports, customs data shows that the import volume of biochemical drugs in China in 2022 was 17.884 billion US dollars, a year-on-year increase of 77.78%. Among them, the import value of human vaccines was 3.935 billion US dollars, an increase of 11.24% year-on-year. From a market perspective, Ireland is the largest market for imported biochemical drugs in China, followed by the United States and Germany. Ireland holds an important position in the global biopharmaceutical field. Long term high-level technological investment, sufficient employment talents, favorable tax policies, stable regulatory system, and smooth production and supply chain are all important factors for Ireland's pharmaceutical industry to rank among the world's top. The top ten multinational pharmaceutical companies in the world all have production bases or research and development centers in Ireland, where a high-level global innovation cluster in the biopharmaceutical industry has been formed. Technological research and development innovation and market commercial transformation have shown huge advantages in the research and production of raw materials, small molecule formulations, and biochemical drugs. The development experience of Ireland's biopharmaceutical industry is worth learning from in China.