The Zhitong Finance App learned that Ping An Securities released a research report saying that judging from changes in the scale and pattern of terminal drug use, the industry ushered in restorative growth in the post-pandemic era. Innovative drugs and varieties with high barriers and good patterns are growing faster than the overall rate. The recommended layout is for varieties that meet the conditions of “large space” and “good pattern”, such as innovative drugs in the field of major diseases with outstanding clinical effects (such as disease categories such as tumors, self-immunity, metabolism, etc.), next-generation technology platforms with high barriers such as nuclear drugs, and high-end dosage forms that are more difficult to replicate, such as gels and pastes.

The sample hospital market size resumed growth in 2023. With the normalization of hospital diagnosis and treatment activities, the drug sales scale of sample hospitals rebounded year-on-year in 2023. In 2023, the sample hospital market was 225.3 billion, up 2.20% year on year. With the development of China's medical and health services, the sample hospital market size has been rising steadily. According to PDB statistics, the total sales volume of sample hospital drugs increased from 152.4 billion yuan in 2012 to 225.3 billion yuan in 2023, and the CAGR for 2012-2023 was 3.62%.

The differentiation between treatment categories is remarkable, and antineoplastic drugs rank first. According to the sample hospital terminal statistics, the number one treatment category in 2023 was antitumor drugs. The sample hospital market size was 37.515 billion yuan, an increase of 4.85% over the previous year, accounting for 16.65% of all treatment categories. Among the top ten treatment categories, the fastest growing in 2023 was respiratory medicine. The sample hospital market size was 9.238 billion yuan, up 24.87% year on year, accounting for 4.10% of all treatment categories.

In 2023, large varieties of drugs showed an overall growth trend. Factors such as the amount of new drugs released and the reduction in procurement prices contributed to the change in pattern. The overall sales of the top 50 drugs showed an upward trend. As the variety structure continued to change, the total sales of the top 50 varieties in 2023 was 62.8 billion yuan, an increase of 6.81% over the previous year, accounting for 28% of the total sales of the sample hospitals in that year. Of the top 50 varieties, 35 sample hospital sales increased, and 15 varieties declined. The main reasons for the increase in sales are: 1) rapid release of new drugs; 2) demand explosion due to the epidemic; 3) restorative growth after optimization of prevention and control; 4) expansion of indications; 5) interproduct substitution effects after competitive product collection and price reduction. The main reasons for the decline in sales are: 1) the impact of price reduction in collection; 2) the impact of monitoring policies such as the National Key Surveillance Catalogue.

It is recommended to focus on the target:

Dongcheng Pharmaceutical (002675.SZ), Kangchen Pharmaceutical (603590.SH), Sitaili (603520.SH), Jiudian Pharmaceutical (300705.SZ), Nuocheng Jianhua (688428.SH), Yipinhong (300723.SZ), Kain Technology (), Yuandong Biotech (USD), Qianhong Pharmaceutical (002550.SZ), Jingxin Pharmaceutical (002020.SZ), etc. 688687.SH 688513.SH

Risk warning:

1) R&D progress falls short of expectations: The recommended companies all have many varieties under development, and mainly high-end generic drugs, bioanalogs, and innovative drugs. R&D investment is large and difficult. At the same time, new product development is affected by various factors such as policies, markets, and capital, and there is a possibility that R&D will fail or the R&D progress will be slow.

2) The progress of import substitution falls short of expectations: Currently, generic drugs in China have a clear cost advantage over original research. The general trend of import substitution is trending, especially for large varieties that account for a high proportion of original research, and related generic drug companies have clearly benefited. Once the original research adopted price-for-volume measures to maintain market share and drastically reduce drug prices, the cost performance advantage of generic drugs weakens, affecting the import substitution process.

3) Sample risk: The PDB database mainly collects data from the top three hospitals. There is a deviation between the sample and the actual situation, and it has limited reference significance for enterprises that mainly use grass-roots channels.