"the serious medical industry is the cornerstone of the health industry." At the opening ceremony of the conference, Wu Han, chairman of Zhongkang Science and Technology (02361), said so.

On August 10, 2023, the 16th China Health Industry (International) Ecological Conference opened in Boao, Hainan, with the theme of "dual collaborative reshaping industry-ushering in a new era of individual health subject responsibility".

As early as 2019, "individual is the first person responsible for one's own health" was written into the Law of the people's Republic of China on basic Medical Care and Health Promotion. The three-year epidemic has undoubtedly accelerated the popularization and landing of this law, making people begin to pay attention to the health status and hygiene habits of themselves and their families, and accelerate the upgrading of health needs.

"over the past three years, the epidemic has enabled all citizens to have a comprehensive and profound understanding of 'the individual is the first person responsible for health'. This is a great progress in society, and at the same time, it also pushes our country into a new era of subjective responsibility for personal health. " At the opening ceremony of the meeting, Wu Han said that the incremental demand released by the popularization of the sense of health subject responsibility of the whole people, the relatively complete R & D and production supply chain already formed on the supply side of China's health industry, and the resonance produced by the new round of medical reform policies, it will push China's health industry into a new stage of dual coordinated development of serious medical industry and consumer medical industry, and meet the health security needs of the whole life cycle of the people. We will promote the reshaping of China's health industry.

Wu Han, Chairman of Zhongkang Technology

Serious medical industry refers to the industrial cluster with the purpose of disease treatment, patients rely on doctors for decision-making, and the national medical insurance fund is the main payer, with public medical institutions as the main body of service. Consumer medical industry refers to the industrial cluster with consumers' self-decision and self-payment as the main body for the purpose of improving health level and quality of life. In the process of serious medical care and consumer medical dual coordination and reshaping the industry, the structure, mode and link of the industry will change fundamentally, and the patient value will be gradually built as the center. The whole closed loop of treatment and prevention, disease diagnosis and health management, to realize the health management of the whole life cycle.

According to the forecast model of Zhongkang Industrial Research Institute, the scale of China's serious medical industry will reach 9.6 trillion yuan by 2030, with an average annual growth rate of 5.8 percent, and its proportion in the health industry has dropped to about 60 percent, Wu Han revealed at the Xipu meeting. Driven by demand, the consumer health care industry chain will gradually mature. It is estimated that by 2030, the scale of the consumer health care industry will reach 6.4 trillion, with an average annual growth rate of 9.8%, accounting for 40% share of the health industry.

Serious medical treatment is still the core pillar of China's health industry.

"the serious medical industry is the cornerstone of the health industry." Wu Han believes that for quite a long time, it is still the core pillar of the health industry.

According to the Statistical Bulletin of National Economic and Social Development 2022 issued by the National Bureau of Statistics, by the end of 2022, there were 1.033 million medical and health machines in the country, including 12000 public hospitals, 980000 grass-roots medical and health institutions, and 13000 professional public health institutions, including 3385 disease prevention and control centers and 2796 health supervision centers. The total number of people diagnosed and treated in the whole year was as high as 8.4 billion. In terms of drug sales, Zhongkang CMH data also show that drug sales in national grade hospitals reached 1.2145 trillion yuan in 2022, but still account for 63.6 per cent of sales.

The above data also show that there is no doubt about the core position of the serious medical industry represented by China's public medical system. And with the continuous improvement of China's average life expectancy and the deepening of the degree of aging, the public health care system is duty-bound to meet the basic medical care of the people, and its main payer, the national health insurance payment, will also continue to increase investment.

Wu Han said that as the social financing capacity of the total health expenditure continues to increase, personal expenditure will gradually reduce and is expected to fall to about 23% by 2030, while the income and expenditure of the health insurance fund will continue to expand. Total health insurance expenditure is expected to exceed 4 trillion yuan by 2030.

The rise of consumer health care will become the second pillar of China's health industry.

The consumer medical market has existed in China for a long time, but in the era when the consciousness of healthy consumption is not strong and the serious medical treatment with disease treatment as the core occupies an absolutely dominant position, consumer medical care has been lack of an effective combination of system elements and a regulatory system that meets the requirements of industrial development, but now the consumer medical industry is facing a golden opportunity for development.

With the improvement of China's economic living standards and the upgrading of Chinese spending power, the health needs of some people are changing from serious medical care centered on disease treatment to consumer medical care centered on health care. For example, the rise of the beauty economy, anti-aging, cleaning and cosmetology, body shaping, myopia correction, dental implants, orthodontic treatment, hair fixation and hair transplant are in the ascendant.

"the rise of the consumer medical industry as the second pillar of the development of China's health industry is becoming a predictable trend." Wu Han said that as the proportion of per capita health care expenditure in per capita consumption expenditure continues to increase, it will rise to 10.1% by 2030, and the improvement of personal autonomy will give a positive impetus to the development of the consumer health care industry.

Innovation-driven, leading a new round of high-quality development of industry

Investment in health industry is not only a consumption investment to improve the quality of life, but also a productive investment to comprehensively protect and improve the quality of workers, and it is the most important strategic investment in the country.

Various signs show that the development of China's health industry has entered the fast lane, and the proportion of GDP in the future is expected to increase rapidly, and the innovation drive represented by bio-drugs, patented drugs and traditional Chinese medicine will be an important starting point to lead this round of high-quality development of the industry.

According to the forecast of Zhongkang Industrial Research Institute, biopharmaceuticals will become the main driving force driving the development of the industry with a compound growth rate of 14.1%, reaching 964.7 billion yuan in 2030, accounting for 33% of the pharmaceutical market. The market share of patented drugs in chemical and biological drugs will increase from about 15% in 2020 to 57% in 2030, while the share of generic drugs in chemical and biological drugs will fall from 85% in 2020 to 43% in 2030. Under the background of the country's promotion of the development of traditional Chinese medicine and the substantial improvement of national awareness of health risk management, the market size of traditional Chinese medicine will reach 846.4 billion yuan in 2030, a compound growth of 5.8%, and a market share of 4 percentage points higher than that of 2020.

Social pharmacy will be the biggest beneficiary of industrial reshaping.

Under the background of dual development, the social pharmacy with many outlets, strong convenience and vitality will become one of the biggest beneficiaries of industrial reshaping.

Wu Han said that with the rise of consumer health care, as well as the transfer of original research drugs, high-end generic drugs, adjuvant drugs and proprietary Chinese medicines from the hospital to the out-of-hospital market, while a considerable number of innovative drug use scenarios have shifted, drugstore channels will be active for a long time and market share will continue to increase. Wu Han also specifically pointed out that the market activity of major health products such as immunity, beauty and youth will continue to increase, the market share will continue to expand, and the market position will continue to improve.

According to the Zhongkang Industrial Research Institute, without major policy changes, the share of drugs in the channel will be increased from the current 27% to 34%. If the state actively promotes the separation of medicine and medicine and gradually abolishes hospital outpatient pharmacies, the demand for outpatient medicine released will be undertaken by grass-roots medical care and pharmacies, and the market share of drugstore channels is expected to increase to 45% at most.

Digitization is the Core guarantee for the realization of long-term Strategy

"the pharmaceutical retail industry needs to adjust its business model and enter the era of professional services." Wu Han said that social pharmacies need to actively improve the regulatory environment, optimize business ecology, and promote the development of consumer health care on the premise of being in line with national policies. It has become the preferred entrance to consumer health care, in coordination with serious medical care, and the preferred entrance to the closed-loop health management of consumers in the whole life cycle, which is not only the future value of social pharmacies, but also the key to the sustainable development of pharmaceutical retail industry. Digitization is the core guarantee for the realization of this long-term strategy.

To this end, Zhongkang Science and Technology, as a third-party support platform for the digitization of the health industry, integrates commercial and medical professional digital engines to provide comprehensive support for the digital capacity building of the industry. According to reports, with the blessing of the data network covering the industry chain established by Zhongkang, its digital engine can provide digital support for efficient decision-making and accurate upstream and downstream connections for pharmaceutical chain enterprises. for the national medical institutions, physical examination institutions to build a patient value as the center, including treatment, prevention, diagnosis, health management as one of the digital comprehensive solution.