In recent years, with the acceleration of drug approval processes, the promotion of consistency evaluation for generic drugs, drug volume-based procurement, and adjustments to the medical insurance directory, a series of new medical policies have been continuously implemented in China, accelerating the transformation and upgrading of the pharmaceutical industry. At the same time, the biopharmaceutical industry represented by monoclonal antibodies, bispecific antibodies, and ADCs has been booming, bringing new opportunities and challenges to the upstream pharmaceutical equipment industry. Since 2020, domestic pharmaceutical equipment has seized the huge space for import substitution and gradually increased its market share. So, how will the pharmaceutical equipment market in China develop in the coming years? And what trends will there be? How will the pharmaceutical equipment industry develop in the future?
Based on the publicly available data of listed pharmaceutical equipment companies, we can observe that in the past two years, the performance of leading pharmaceutical machinery enterprises such as Chu Tian Technology and Dong Fu Long has achieved steady growth, and the overall industry is in a relatively high state of prosperity. The main reasons for this situation are the significant increase in orders brought about by the demand for vaccine equipment, the boost from upstream biopharmaceuticals, and the import substitution caused by the pandemic. The advantageous domestic leading enterprises seized the opportunities.
Regarding how long this situation will last, some institutions predict that in the post-pandemic era, domestic pharmaceutical machinery enterprises will still maintain a certain growth rate thanks to their advantages such as improved performance, good service levels, and convenient maintenance. At the same time, with the rapid development of the biopharmaceutical industry, the demand for equipment such as bioreactors is also expected to continue to expand, and there is potential for import substitution. Additionally, the intensifying aging of the population will bring growth effects to the entire pharmaceutical industry, including the upstream sector.
Overall, the pharmaceutical equipment industry in China still holds promising opportunities. In the coming years, it will experience a long-term growth driven by a series of favorable factors. The main industry trends may include the following aspects:
Trend 1: The domestic pharmaceutical equipment market will undergo significant changes. At present, Chinese pharmaceutical machinery and equipment enterprises mainly focus on providing single equipment supplies. However, the current market demand is increasingly emphasizing efficient production, cost control, and reduced space occupation. Therefore, the number of suppliers capable of providing overall solutions will gradually increase in the future.
Trend 2: The development model of pharmaceutical equipment enterprises will undergo changes. In the past, most of China's pharmaceutical machinery enterprises adopted a simplistic development model, which led to problems such as waste of resources and excessive costs, and resulted in a low overall development level of the enterprises. Therefore, in the future, the business model of pharmaceutical machinery enterprises will change, shifting from a simplistic model to a lean management approach.
Trend 3: Pharmaceutical Equipment Will Be More "Intelligent". Under the current goal of cost reduction and efficiency improvement, intelligence has become the development direction for the pharmaceutical equipment industry. Through updates and upgrades, pharmaceutical equipment can achieve excellent intelligent control and remote monitoring control. Operators can analyze and handle the system online and complete some steps or processes independently. Currently, the country has also introduced related encouragement and support policies for promoting intelligent manufacturing. It is expected that in the future, the combination of intelligent production lines and unit operation process equipment for pharmaceutical equipment will become the prevailing trend.
Trend 4: High-energy-consuming and low-performance pharmaceutical equipment will be rapidly phased out. Currently, as Chinese pharmaceutical enterprises progress towards modernization, they are increasingly inclined towards advanced, intelligent, energy-saving and environmentally-friendly equipment. Some traditional equipment with poor performance and high energy consumption are no longer needed. In the future, pharmaceutical equipment enterprises can only maintain competitiveness by continuously innovating and upgrading. Additionally, how to better enhance the performance of domestic equipment, break through the core "technology chokepoint" barriers, and catch up with imported high-end equipment is something that the industry should deeply ponder and explore.
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