The year 2017 that has just passed was undoubtedly a pivotal year of transformation for the pharmaceutical industry. Under the guidance of policy, profound structural adjustments have been systematically implemented across all segments of the sector. The “Two Offices” Opinions on Encouraging Innovation and their accompanying detailed implementation rules have continuously steered the industry’s future development toward greater innovation; the ongoing and rapid advancement of bioequivalence evaluations for generic drugs has placed quality at the core of sustainable corporate growth; meanwhile, the two-invoice system has been rolled out nationwide, reshaping the distribution landscape; the progressive promotion of tiered diagnosis and treatment, the implementation of zero-markup pricing, the release of the new National Reimbursement Drug List, and the outcomes of drug-price negotiations under the national medical insurance scheme have all taken effect, maintaining stringent cost-control measures under the medical insurance system and continually transforming the in-hospital drug-use landscape… With this series of new pharmaceutical-reform policies now in place, the industry is entering a new stage of development driven by innovative technologies, heralding the best era yet for China’s pharmaceutical sector.
In 2018, structural adjustments had already begun to reshape the industry. For enterprises, this period presents both opportunities and challenges; building robust R&D and innovation capabilities and elevating product quality have become the dominant themes of development. Industry observers note that we are now entering a new era in which “only the survivors prevail.” Extreme weather conditions have forced many small and medium-sized firms to exit the market, leaving only those companies with the tenacity, endurance, and unwavering resilience of the desert poplar—much like Shisi Pharmaceutical—to secure a foothold for survival.
Shuffling the Deck and Accelerating Innovation: The Strategic Realignment Enters Its Harvest Phase
Relevant regulatory authorities have intensively introduced a series of pharmaceutical policies and regulations, including several landmark measures. While these initiatives raise the barriers to drug R&D and enhance product quality, they also promote greater standardization and consolidation within the pharmaceutical R&D industry, thereby accelerating natural selection and fostering a healthier, more competitive sector.
Recently, the Center for Drug Evaluation of the National Medical Products Administration issued a notice soliciting public comments on the “Technical Requirements for Consistency Evaluation of Marketed Generic Chemical Injectable Drugs.” Following the initiation of consistency evaluations for oral solid dosage forms, this represents another landmark announcement that will significantly reshape the structure of the pharmaceutical industry. With the exception of a few specific products such as sodium chloride injection and glucose injection, nearly all generic chemical injectable drugs will be required to undergo consistency evaluation, which means that a large number of small and medium-sized injectable-drug manufacturers will face a major industry reshuffle.
According to the National Medical Products Administration’s plan, the evaluation of generic injectable consistency is expected to be completed within 5 to 10 years, a milestone that the industry views as a major challenge for large intravenous solution manufacturers. Industry consensus holds that, as the market becomes increasingly open and competition between domestic and international firms intensifies, it has become imperative for China’s leading IV solution companies to shift their development model and prioritize quality enhancement and continuous innovation in order to secure future growth.
“The projects currently under application are now entering the harvest phase, and a raw material drug for treating hepatitis B virus and AIDS is expected to obtain its production approval in the near future. Meanwhile, four or five generic drugs that have completed quality and therapeutic equivalence assessments as well as bioequivalence studies have already been submitted to the National Medical Products Administration’s Center for Drug Evaluation,” said Yin Dianshu, Chief Engineer of Shisi Pharmaceutical and Director of the Pharmaceutical Research Institute. At present, Shisi Pharmaceutical has more than 100 projects in development, covering areas such as cardiovascular, antiviral, respiratory, and psychiatric therapies, and is collaborating with top domestic research institutions, including the Chinese Academy of Sciences, to develop innovative medicines.
Driven by relentless innovation, the pace of product approvals has accelerated. Recently, Shisi Pharmaceutical Group announced that it has obtained drug production registration approval from the National Medical Products Administration for Sodium Acetate Ringer’s Injection (500 ml). Sodium Acetate Ringer’s Injection is primarily used to treat blood loss resulting from trauma, surgery, burns, and other conditions. In addition, Shisi Pharmaceutical has two other major therapeutic infusion products that are expected to receive production approval within 2018, which will serve as catalysts for future market growth.
To date, Shisi Pharmaceutical has obtained production approvals for multiple products, including a 2,000 ml glycine irrigation solution, and has filed applications for or is currently developing more than 100 drug candidates, among which are several Class 1 chemical new drugs. While maintaining its technological and product leadership in intravenous infusion solutions, the company is progressively building distinctive product portfolios, including a series of surgical irrigation solutions, a range of perioperative emergency treatment products, dialysis solutions (for peritoneal and hemodialysis), parenteral nutrition infusions (amino acids and fat emulsions), and disinfectant products—each developed through innovative R&D efforts. This level of R&D efficiency is fully capable of meeting the company’s needs over the next five years. As its R&D team continues to mature, Shisi Pharmaceutical also plans to establish R&D innovation platforms overseas, thereby truly achieving internationalization.
It is worth noting that the infusion markets in both the United States and Japan are highly concentrated: for instance, Baxter holds an 80% market share in the U.S., while Otsuka Pharmaceutical accounts for more than 50% of the Japanese market. Without exception, these leading firms have adopted the latest processes and technologies, which in turn compel smaller players to transform or exit the market. The resulting void is then filled by new products, revitalizing the market and ushering in a fresh competitive landscape.
According to a research report, future new products are expected to focus on the therapeutic large-volume parenteral solutions segment, including anti-tumor injectables, organ preservation solutions for multi-organ transplantation, surgical irrigation solutions, various dialysis solutions, and ready-to-use liquid–solid dual-chamber soft-bag infusions; in the nutritional large-volume parenteral solutions segment, key areas of development will include fat emulsions, dextrose-in-sucrose injectables, amino acid solutions, and multi-chamber bag infusions of fat emulsions. These segments represent the primary directions for the future development of the large-volume parenteral solutions market.
According to Shisi Pharmaceutical’s development blueprint, the company will continue to diversify and enhance its product portfolio. Under the strategic vision of Chairman Qu Jiguang, three key priorities for future product mix optimization have been clearly defined: first, the infusion product line, which currently comprises nearly 60 high-end formulations; second, oral dosage forms and small-volume injectables; and third, strengthening capabilities in nine major therapeutic areas—anti-infectives, the nervous system, the respiratory system, the digestive and metabolic systems, the cardiovascular system, fluid-electrolyte and nutritional therapies, basic infusions (including dialysis and irrigation solutions), and anticoagulants.
Packaging Innovation: Dominating the High-End Market
While further intensifying innovation and R&D on the products themselves, the industry is also increasing its investment in innovative large-volume parenteral packaging. In recent years, companies such as Shisi Pharmaceutical have stepped up their research on packaging.
The “In-Depth Research and Investment Outlook Report on China’s Large-Volume Parenteral Solutions Market (2017 Edition)” reveals that, as of now, a total of 236 domestic infusion manufacturers have obtained certification under the new GMP standards, with an aggregate production capacity of approximately 25 billion vials and bags, representing a capacity utilization rate of around 55%. Plastic-bottle infusions remain the dominant packaging format in the market, though their market share is gradually declining; by contrast, soft bags and straight soft bags are seeing their market shares increase year by year, while glass bottles hold the smallest market share and their sales continue to decline annually.
Currently, in Europe and the Americas, soft bags and plastic-packaged infusion products dominate the market. Statistics show that soft bags account for 60% of the European market, plastic bottles for 20%, and glass bottles for another 20%. In the United States, soft bags make up 90% of the market, with the remaining 10% consisting of glass bottles. By contrast, plastic bottles still predominate in the domestic Chinese market. Industry experts anticipate that soft bags are the inevitable trend and will gradually replace both plastic and glass bottles in the future, indicating substantial growth potential for soft bags in China.
In fact, over the past decade the large-volume parenteral solutions industry has undergone a transition from glass bottles as the dominant packaging format to plastic bottles, stand-up pouches, and standard soft bags, with Shisi Pharmaceutical consistently at the forefront of this transformation. Today, non-glass-bottle packaging accounts for more than 90% of the market, reaching internationally advanced levels. In particular, Shisi Pharmaceutical holds a 30% share of the high-end standard soft-bag infusion segment, firmly leading the domestic standard soft-bag market. The company began producing stand-up pouches in 2015, primarily to replace the plastic-bottle segment, and these pouches deliver significantly higher gross margins than both plastic and glass bottles, enabling Shisi Pharmaceutical to maintain a leading position in the industry in terms of gross margin.
“We currently maintain a pace of launching more than ten new products each year, and in recent years we have even secured approval for the production of 14 new upright polypropylene infusion bags, making us one of the few domestic manufacturers capable of producing infusion products in all packaging formats,” said Su Xuejun, General Manager of Shisi Pharmaceutical. He added that these achievements are entirely attributable to the company’s relentless innovation throughout its development.
From glass bottles to flexible bags, each new generation of Shisi Pharmaceutical’s large-volume parenteral solutions opens up a whole new market space. “Before we launched our flexible-bag products, the market had no idea what they were or how superior they were. Through targeted guidance and extensive promotion, we quickly helped the market recognize and embrace our innovative offerings,” said Su Xuejun. “Every innovative product we introduce is the result of thorough market research and analysis. We consistently stay ahead of the curve, leading the industry toward safer, more efficient, and more convenient products. This is not only essential for the company’s growth—it is also our mission.” (Originally published in the Pharmaceutical Economic Daily.) The year 2017 that has just passed was undoubtedly a pivotal year of transformation for the pharmaceutical industry. Under the guidance of policy, profound structural adjustments have been systematically implemented across all segments of the sector. The “Two Offices” Opinions on Encouraging Innovation and their accompanying detailed implementation rules have continuously steered the industry’s future development toward greater innovation; the ongoing and rapid advancement of bioequivalence evaluations for generic drugs has placed quality at the core of sustainable corporate growth; meanwhile, the two-invoice system has been rolled out nationwide, reshaping the distribution landscape; the progressive promotion of tiered diagnosis and treatment, the implementation of zero-markup pricing, the release of the new National Reimbursement Drug List, and the outcomes of drug-price negotiations under the national medical insurance scheme have all taken effect, maintaining stringent cost-control measures under the medical insurance system and continually transforming the in-hospital drug-use landscape… With this series of new pharmaceutical-reform policies now in place, the industry is entering a new stage of development driven by innovative technologies, heralding the best era yet for China’s pharmaceutical sector.
In 2018, structural adjustments had already begun to reshape the industry. For enterprises, this period presents both opportunities and challenges; building robust R&D and innovation capabilities and elevating product quality have become the dominant themes of development. Industry observers note that we are now entering a new era in which “only the survivors prevail.” Extreme weather conditions have forced many small and medium-sized firms to exit the market, leaving only those companies with the tenacity, endurance, and unwavering resilience of the desert poplar—much like Shisi Pharmaceutical—to secure a foothold for survival.
Shuffling the Deck and Accelerating Innovation: The Strategic Realignment Enters Its Harvest Phase
Relevant regulatory authorities have intensively introduced a series of pharmaceutical policies and regulations, including several landmark measures. While these initiatives raise the barriers to drug R&D and enhance product quality, they also promote greater standardization and consolidation within the pharmaceutical R&D industry, thereby accelerating natural selection and fostering a healthier, more competitive sector.
Recently, the Center for Drug Evaluation of the National Medical Products Administration issued a notice soliciting public comments on the “Technical Requirements for Consistency Evaluation of Marketed Generic Chemical Injectable Drugs.” Following the initiation of consistency evaluations for oral solid dosage forms, this represents another landmark announcement that will significantly reshape the structure of the pharmaceutical industry. With the exception of a few specific products such as sodium chloride injection and glucose injection, nearly all generic chemical injectable drugs will be required to undergo consistency evaluation, which means that a large number of small and medium-sized injectable-drug manufacturers will face a major industry reshuffle.
According to the National Medical Products Administration’s plan, the evaluation of generic injectable consistency is expected to be completed within 5 to 10 years, a milestone that the industry views as a major challenge for large intravenous solution manufacturers. Industry consensus holds that, as the market becomes increasingly open and competition between domestic and international firms intensifies, it has become imperative for China’s leading IV solution companies to shift their development model and prioritize quality enhancement and continuous innovation in order to secure future growth.
“The projects currently under application are now entering the harvest phase, and a raw material drug for treating hepatitis B virus and AIDS is expected to obtain its production approval in the near future. Meanwhile, four or five generic drugs that have completed quality and therapeutic equivalence assessments as well as bioequivalence studies have already been submitted to the National Medical Products Administration’s Center for Drug Evaluation,” said Yin Dianshu, Chief Engineer of Shisi Pharmaceutical and Director of the Pharmaceutical Research Institute. At present, Shisi Pharmaceutical has more than 100 projects in development, covering areas such as cardiovascular, antiviral, respiratory, and psychiatric therapies, and is collaborating with top domestic research institutions, including the Chinese Academy of Sciences, to develop innovative medicines.
Driven by relentless innovation, the pace of product approvals has accelerated. Recently, Shisi Pharmaceutical Group announced that it has obtained drug production registration approval from the National Medical Products Administration for Sodium Acetate Ringer’s Injection (500 ml). Sodium Acetate Ringer’s Injection is primarily used to treat blood loss resulting from trauma, surgery, burns, and other conditions. In addition, Shisi Pharmaceutical has two other major therapeutic infusion products that are expected to receive production approval within 2018, which will serve as catalysts for future market growth.
To date, Shisi Pharmaceutical has obtained production approvals for multiple products, including a 2,000 ml glycine irrigation solution, and has filed applications for or is currently developing more than 100 drug candidates, among which are several Class 1 chemical new drugs. While maintaining its technological and product leadership in intravenous infusion solutions, the company is progressively building distinctive product portfolios, including a series of surgical irrigation solutions, a range of perioperative emergency treatment products, dialysis solutions (for peritoneal and hemodialysis), parenteral nutrition infusions (amino acids and fat emulsions), and disinfectant products—each developed through innovative R&D efforts. This level of R&D efficiency is fully capable of meeting the company’s needs over the next five years. As its R&D team continues to mature, Shisi Pharmaceutical also plans to establish R&D innovation platforms overseas, thereby truly achieving internationalization.
It is worth noting that the infusion markets in both the United States and Japan are highly concentrated: for instance, Baxter holds an 80% market share in the U.S., while Otsuka Pharmaceutical accounts for more than 50% of the Japanese market. Without exception, these leading firms have adopted the latest processes and technologies, which in turn compel smaller players to transform or exit the market. The resulting void is then filled by new products, revitalizing the market and ushering in a fresh competitive landscape.
According to a research report, future new products are expected to focus on the therapeutic large-volume parenteral solutions segment, including anti-tumor injectables, organ preservation solutions for multi-organ transplantation, surgical irrigation solutions, various dialysis solutions, and ready-to-use liquid–solid dual-chamber soft-bag infusions; in the nutritional large-volume parenteral solutions segment, key areas of development will include fat emulsions, dextrose-in-sucrose injectables, amino acid solutions, and multi-chamber bag infusions of fat emulsions. These segments represent the primary directions for the future development of the large-volume parenteral solutions market.
According to Shisi Pharmaceutical’s development blueprint, the company will continue to diversify and enhance its product portfolio. Under the strategic vision of Chairman Qu Jiguang, three key priorities for future product mix optimization have been clearly defined: first, the infusion product line, which currently comprises nearly 60 high-end formulations; second, oral dosage forms and small-volume injectables; and third, strengthening capabilities in nine major therapeutic areas—anti-infectives, the nervous system, the respiratory system, the digestive and metabolic systems, the cardiovascular system, fluid-electrolyte and nutritional therapies, basic infusions (including dialysis and irrigation solutions), and anticoagulants.
Packaging Innovation: Dominating the High-End Market
While further intensifying innovation and R&D on the products themselves, the industry is also increasing its investment in innovative large-volume parenteral packaging. In recent years, companies such as Shisi Pharmaceutical have stepped up their research on packaging.
The “In-Depth Research and Investment Outlook Report on China’s Large-Volume Parenteral Solutions Market (2017 Edition)” reveals that, as of now, a total of 236 domestic infusion manufacturers have obtained certification under the new GMP standards, with an aggregate production capacity of approximately 25 billion vials and bags, representing a capacity utilization rate of around 55%. Plastic-bottle infusions remain the dominant packaging format in the market, though their market share is gradually declining; by contrast, soft bags and straight soft bags are seeing their market shares increase year by year, while glass bottles hold the smallest market share and their sales continue to decline annually.
Currently, in Europe and the Americas, soft bags and plastic-packaged infusion products dominate the market. Statistics show that soft bags account for 60% of the European market, plastic bottles for 20%, and glass bottles for another 20%. In the United States, soft bags make up 90% of the market, with the remaining 10% consisting of glass bottles. By contrast, plastic bottles still predominate in the domestic Chinese market. Industry experts anticipate that soft bags are the inevitable trend and will gradually replace both plastic and glass bottles in the future, indicating substantial growth potential for soft bags in China.
In fact, over the past decade the large-volume parenteral solutions industry has undergone a transition from glass bottles as the dominant packaging format to plastic bottles, stand-up pouches, and standard soft bags, with Shisi Pharmaceutical consistently at the forefront of this transformation. Today, non-glass-bottle packaging accounts for more than 90% of the market, reaching internationally advanced levels. In particular, Shisi Pharmaceutical holds a 30% share of the high-end standard soft-bag infusion segment, firmly leading the domestic standard soft-bag market. The company began producing stand-up pouches in 2015, primarily to replace the plastic-bottle segment, and these pouches deliver significantly higher gross margins than both plastic and glass bottles, enabling Shisi Pharmaceutical to maintain a leading position in the industry in terms of gross margin.
“We currently maintain a pace of launching more than ten new products each year, and in recent years we have even secured approval for the production of 14 new upright polypropylene infusion bags, making us one of the few domestic manufacturers capable of producing infusion products in all packaging formats,” said Su Xuejun, General Manager of Shisi Pharmaceutical. He added that these achievements are entirely attributable to the company’s relentless innovation throughout its development.
From glass bottles to flexible bags, each new generation of Shisi Pharmaceutical’s large-volume parenteral solutions opens up a whole new market space. “Before we launched our flexible-bag products, the market had no idea what they were or how superior they were. Through targeted guidance and extensive promotion, we quickly helped the market recognize and embrace our innovative offerings,” said Su Xuejun. “Every innovative product we introduce is the result of thorough market research and analysis. We consistently stay ahead of the curve, leading the industry toward safer, more efficient, and more convenient products. This is not only essential for the company’s growth—it is also our mission.” (Originally published in the Pharmaceutical Economic Daily.)