How do CMO companies develop rapidly under the MAH system?

Medical Network News, February 24, if calculated from June 6, 2016 as the pilot day, the drug marketing authorization holder system has been piloted in China for nearly five years.
At the end of 2017, the medical device MAH system has been piloted in Shanghai.
More than three years
.
The MAH system for medicines and medical devices will also be promoted and implemented nationwide in 2019 and 2020, respectively
.

1.
The background and advantages of the MAH system
In the United States and European countries, the registration of drugs was the MAH system from the beginning; Japan is similar to our country.
It started the MAH system in 2004 and used to be a bundled management of marketing and production licenses
.
Under this "bundled" model, China's R&D lacks innovation and drug safety cannot be fully guaranteed.
At the same time, there are surplus factory facilities, a large number of zombie numbers, and R&D institutions "selling young crops" are common phenomena, which have greatly affected Innovative development of China's pharmaceutical industry
.
After the implementation of the MAH system, some advantages are obvious: 1.
Promote drug innovation and enhance competitiveness: Encourage R&D institutions and researchers to engage in drug innovation and obtain drug marketing permits, which will change the situation that researchers under the original system can only "sell young crops"
.
At the same time, R&D units or scientific researchers can quickly industrialize drugs through commissioned production, avoiding pain points such as high investment and construction costs and long cycles
.
2.
Implement corporate responsibility and strengthen full-process management: The holder is responsible for the entire life cycle of drug quality.
This clear and strict responsibility system will effectively strengthen the holder ’s full implementation of the management responsibility from the laboratory to the hospital .
Not only focus on R&D
.
3.
Optimize resource allocation and industrial division of labor: Among the many pharmaceutical manufacturers, enterprises with a production scale of less than 50 million yuan account for more than 60%
.
Lack of R&D and innovation capabilities has led to overcapacity and waste of resources
.
Under the holder system, manufacturing companies and R&D institutions lacking innovation capabilities can develop together to solve the plight of a large number of small companies.
The pharmaceutical industry will quickly enter a period of differentiation and reorganization, and the pace of concentration of the pharmaceutical industry and innovation agglomeration will be further accelerated
.

　　2.
The impact of the MAH policy on CMO manufacturers.
In the
past, when the commissioned production of drugs was not allowed, some domestic CMOs accepted the production orders of multinational pharmaceutical companies that did not market drugs in China, and the other part cooperated with the client to produce drugs for domestic sales.
The huge pharmaceutical demand is difficult to use
.
Now that the door is open, the MAH system legalizes and standardizes domestic CMOs, guarantees the interests of holders, and develops foundry companies, which is also more conducive to ensuring the quality of medicines and the safety of people's medications
.
In addition, it promotes the CMO industry to continue to extend to the upstream CRO field
.
The traditional CMO industry relies on the production process and technical support provided by pharmaceutical companies to provide a single OEM production service.
Market competition has prompted the CMO industry to gradually expand to the upstream CRO field, forming a "CRO+CMO" integrated operation model, that is, early intervention in the discovery of new drugs.
Synchronize the R&D phases of pharmaceutical companies, realize the overall layout of research and process flow of each link, and enhance customer stickiness
.
The CDMO model is the ultimate strategic direction of the CMO industry
.
In the fierce market competition, CDMO came into being, that is, in terms of basic process and technical standards, it provides innovative drug equipment, process route development, and production process optimization
.
Compared with CMOs, high-tech additional CDMO services are more capable of obtaining sustainable commercial orders and have greater profit margins.
They can quickly extend and expand their professional technical reserves during project execution.
According to analysis, traditional CMO vendors will A number of high-end customized drug manufacturers (CDMO) have gradually emerged
.

　　3.
Opportunities in the CMO Market
1.
Global MedicineThe industry is developing rapidly
.
2.
As R&D becomes more difficult, companies will be more inclined to professional outsourcing services
.
3.
The "patent cliff" urges original research drug companies to outsource the production of expired patent drugs while expanding the pipeline of new drugs
.
4.
The market share of CMOs in high-cost regions such as Europe and the United States has declined.
Emerging markets in Asia, led by China and India, have rapidly risen due to their cost advantages and increasingly sophisticated systems, gradually squeezing their market share in Europe and the United States
.
5.
There is a strong demand for production outsourcing of special dosage forms and biological preparations with high technical difficulty
.
It is preliminarily expected that China's CMO market will maintain a compound average growth rate of more than 18% from 2021 to 2025, and the market size will exceed 120 billion yuan by 2025
.
From the perspective of the market growth rate of the CMO industry, it will be much higher than the compound growth rate of about 4% in the pharmaceutical consumer market during the same period.
In the next few years, CMO will be a very prosperous sub-industry in the pharmaceutical and biological industry
.

　　4.
Bottlenecks of CMO companies
Figure 1 Overview of CMO market distribution Picture source: Firestone Creation (1) The industry concentration is low, and the market share of TOP5 companies in the industry only occupies 20% of the entire domestic CMO market.
Most of the market is led by a few CDMOs in the industry.
Occupied by the Ministry of Enterprises
.
According to incomplete statistics, there are nearly 500 domestic companies involved in CMO business, including a large number of emerging small and medium-sized enterprises, as well as traditional generic drug companies that have transformed CMOs due to overcapacity due to the inability to carry out product update iterations.
Most of them are hungry
.
(2) Traditional generic CMO companies have a large number of companies with abundant production capacity, but there is a problem of homogenization of production lines.
Most of them are production lines for ordinary tablets, capsules, and injections, and inevitably, there will be aging production lines and imperfect quality control systems.
And other issues
.
(3) There are few companies with high-tech barrier formulation production capacity, the client can choose a small range, and often the production capacity is limited
.
(4) The market information matching process is tedious
.
The process of discovering, screening, auditing, and negotiating suppliers is very energy intensive
.
Principal content of interest compared to the CRO business complex, such as: 2 Principal follow what Source: flint to create
　　five, CMO manufacturers to meet the market's way
1.
The quality system upgrade, a talent and technical reserves, in order to optimize the process, drop This method of efficiency enhancement enhances competitiveness and customer stickiness
.
2.
Gradually develop to the CDMO model
.
Strengthen its own technical capabilities, and upgrade the business from simple "technology transfer + customized production" to "customized R&D + customized production"
.
3.
To upgrade the production line, it is necessary to have a certain characteristic production line, so as to avoid falling into the quagmire of homogeneity
.
4.
Mergers and acquisitions and integration of upstream and downstream enterprises or companies with distinctive technologies
.

　　Sixth, thinking about how to operate efficiently.

Enterprises are divided between droughts and floods, leading enterprises receive soft orders, and small and medium-sized enterprises are struggling to move forward
.
The domestic market has a huge capacity, and there are many excellent suppliers among many CMO manufacturers that can perfectly meet the needs of the entrusting party, but the information does not match, and the promotion is not in place
.
At present, CMO manufacturers mainly use BD and media advertising to promote information.
However, "new and small" enterprises are limited by cost and cycle, and the effect is not ideal.

.
The market is getting hot, and many resource integration parties continue to emerge.
In addition to traditional media companies (such as Qiantuhui, Yaozhi.
com, Yaorong Circle, etc.
) that will do some resource collection and manufacturer display, official and third-party Information platforms are also emerging in endlessly, such as the Zhejiang Provincial Drug Marketing License Holder Conversion Platform, "Yaocheng" MAH Information Platform (Jiangsu Taizhou), Yaofangzhou MAH Pharmaceutical Enterprise Information Interaction Platform, and Yunzi CDMO Alliance
.
Media companies and some information platforms not only gather CMO/CDMO information, but also partly cover CRO, CSO, industry conferences, policy information, financial insurance and other content, which facilitates the acquisition of market information to a certain extent, but it is not yet in a real sense.
Become a standing tool like Baidu and Tmall
.
The reason is that the official platform has certain regional attributes, and the third-party platform relies on the source of customers in the media industry, mostly for information display.
At present, it has not become a well-known platform for enterprises and recognized by the industry as a unified and usable platform
.
I personally believe that to become a mature platform tool, it must have the following characteristics: ①Have channels for mass resource integration, obtain information and promotion in clusters ②Have a professional offline operation team, go deep into the enterprise ③Have government resources ④With virtual display, online communication and even transaction tools, realizing real-time linkage between supply and demand.

　　⑤With matching transaction mechanism and benefits for both parties.

　　Conclusion
Under the MAH policy tree, the domestic traditional CMO The enterprise is bound to advance vigorously
.
In the upsurge of the industrial Internet, as a variety of informatization is spreading to various scenes of life and work, the concepts and habits of practitioners will gradually change.
In the future, MAH market informationization and platformization will also be realized , To further reduce the cost of information acquisition and professional communication, it is possible that the trouble of flying around the world in the business will gradually decrease
.