The combined effect of various factors such as the stable growth of the national economy, the gradual improvement of the medical insurance system, and the increase in the number of operations has greatly promoted the market scale of auxiliary drugs.
Anesthetics are drugs that can cause temporary and reversible loss of consciousness in the entire body or part of the body. Therefore, they have anesthesia, analgesia and sedation, and are often used clinically for surgical treatment. Anesthetics are highly specialized and have high industry barriers. The quality and dosage of drugs are very important, affecting people's survival. Therefore, the production and sales of anesthetics are strictly regulated by the state, and the number of manufacturers is limited. Due to the country’s strict supervision of the anesthetic drug industry and high policy barriers, the production of anesthetic drugs needs to be approved, and the production of anesthetic drugs must strictly abide by the annual plan and implement government pricing. Therefore, once the industry structure is formed, it is difficult to undergo major changes. This has led to little competition within the industry. The possibility of explosive growth in the entire market is small, but the growth is very stable.
China's Anesthetics Industry Develops Steadily
China's anesthetics industry accounts for a relatively low proportion of the entire pharmaceutical industry, about 20%. Although the growth rate of the domestic anesthetics market has declined in recent years, the overall scale of the industry has shown an upward trend. Data shows that the industry market size has increased from 17.19 billion yuan in 2014 to 26.79 billion yuan in 2019. Compared with Western countries, the domestic anesthetic industry is at a lower level and the scope of application of anesthetics is narrow. There is still a lot of room for development in the future. In the next five years, China's narcotic drug industry is expected to grow steadily at a rate of 8%, and the market size will reach 34.21 billion yuan by 2023.
The Two Strong Forces of Industry Growth
The market size of China's anesthetics industry can grow steadily, which is closely related to the demand for surgery. The increase in surgery volume is the main factor driving the development of the anesthetics industry. According to data from the Health Statistics Yearbook, the number of hospitalized operations in China reached 61.72 million in 2018. It is expected that in the next five years, the number of hospitalized operations in China will continue to increase, reaching 85.674 million in 2022. The increase in the amount of surgery is mainly due to the deepening of aging and the rise of plastic surgery.
The market size of China's anesthetics industry can maintain sustained and steady growth, which is closely related to the demand for surgery. The increase in operations is the main driving force for the development of the anesthesia industry. Public data shows that the number of hospitalized operations in China in 2018 reached 61.72 million. In the next five years, the number of hospitalized surgical patients is expected to continue to grow, and it is expected to reach 85.67 million by 2022. The increase in the number of operations stems from two major aspects of the deepening of aging and the rise of cosmetic surgery.
China is a country with an aging population. According to public data, the population of mainland China exceeded 1.4 billion in 2019. Among them, the population over 65 accounted for 12.6%, an increase of 8% year-on-year. In the future, as the elderly population continues to increase, China's aging degree will further deepen, and the population aging trend is obvious. The decline in the physical function of the elderly is the main force in the consumption of medical resources. The aging population provides great opportunities for the development of China's anesthetics industry.
Due to factors such as increasing per capita disposable income, rising consumption levels, and star effects, the public's acceptance and demand for plastic surgery are increasing. In the past ten years, the domestic plastic surgery industry has entered a period of rapid development, which is mainly reflected in the following aspects. First, the number of people undergoing cosmetic surgery continues to grow. In 2018, the number of plastic surgery patients exceeded 10 million. Secondly. The emergence of private plastic surgery hospitals. In the past ten years, private plastic surgery hospitals have grown at an annual rate of 20%. Finally, the plastic surgery population is getting younger, and the potential of male consumers is huge. Currently, China is the world's second-largest plastic surgery market, but its overall market penetration rate is lower than that of the United States. Under the general trend of consumer upgrading, there is still huge market potential in the future. The rise of the plastic surgery industry has brought market growth space for plastic surgery and further promoted the development of the anesthesia industry.
Policy Protection Builds High Industry Barriers
Anesthetics play an important role in the development of clinical applications, but if there is no strict control, anesthetics will be abused in the market, causing a heavy blow to society. Therefore, the state exercises strict control over the production and distribution of narcotic analgesics and has issued relevant rules that clearly stipulate the qualification and number of companies producing and distributing narcotic psychotropic drugs to ensure the safety of anesthetics. Although other common anesthetics are not subject to policy compulsory supervision, they are also high-barrier products due to the high technical requirements for the safety of anesthesia and fewer product alternatives. Under the dual influence of policy and technical barriers, the narcotics industry has high barriers to entry. Compared with other pharmaceutical industries, the anesthesia industry is more concentrated, which can promote healthy competition among anesthesia companies, thereby promoting the rapid development of the anesthesia industry.
Innovative Drugs Have Obvious Advantages
Independently innovative drugs have achieved a strong position in the fierce market competition with better efficacy and lower side effects, so as to gain more market share and profits. For example, in July 2019, Haisco's new anesthetic drug HSK3486 emulsion injection was approved, and in January 2020, it received a new drug application for the general anesthesia induction. This product is beneficial to reduce the metabolic burden of patients, especially for patients with abnormal liver metabolism and severely ill patients during anesthesia maintenance, and will have more advantages in the market in the future.
A large part of the domestic anesthetics market is occupied by foreign-funded companies, mainly represented by Ai Shijian, Fresenius Kabi, and AstraZeneca. However, domestically, under the dual influence of policy protection barriers and technical barriers, a number of outstanding and powerful companies have emerged, forming a situation where the three major companies stand together, including Hengrui Pharmaceuticals, Enhua Pharmaceuticals, and Renfu Pharmaceuticals.
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