In 2023, the traditional Chinese medicine formula granule market is expected to usher in explosive growth!

【Pharmaceutical Network Market Analysis】Traditional Chinese medicine formula granules are granules made of single-flavor Chinese medicine pieces through a series of processing processes such as water extraction, separation, concentration, drying, granulation, etc.
, which are favored
by the market because of their advantages such as convenient consumption.
With the liberalization of epidemic prevention policies and the gradual restoration of hospital diagnosis and treatment order, the industry believes that in-hospital pharmaceutical sales will usher in restorative growth, among which the traditional Chinese medicine formula granule market is expected to usher in recovery or even explosive growth
.
Southwest Securities once mentioned in the research report that the market size of traditional Chinese medicine formula granules increased from 10.
7 billion yuan in 2016 to 25.
5 billion yuan in 2020, and it is expected that the replacement rate of formula granules will be about 50% in the future, and the market
will open up hundreds of billions in the future.
From the second half of 2022, traditional Chinese medicine formula granules have been upgraded to the national standard, and as of the end of September 2022, a total of three batches of national standards have been promulgated, with a total of 200 varieties, in addition to 69 variety standards in the public stage
.
At the same time, all provinces also have provincial standard varieties to accelerate the filing progress
.
During this conversion process, the performance of some Chinese medicine formula granule pharmaceutical companies was affected
.
For example, in the first three quarters of 2022, Red Sun Pharmaceutical achieved operating income of 4.
9 billion yuan, down 10.
68% year-on-year, and non-net profit of 410 million yuan, down 34.
1% year-on-year; In the first half of 2022, the sales amount of traditional Chinese medicine formula granules in China was 2.
762 billion yuan, a year-on-year decrease of 48.
1%; In the first half of 2022, the sales amount of domestic formula granules was 77 million yuan, a year-on-year decrease of 50.
95%.

In 2023, the development certainty of enterprises in the traditional Chinese medicine formula granule industry is high, and it is expected that related pharmaceutical companies will accelerate market expansion
.
CITIC Securities recently mentioned in the report that after the pilot of traditional Chinese medicine formula granules, the sales channel is expected to expand from more than 2,000 traditional Chinese medicine hospitals in the pilot period to one million medical institutions that can provide traditional Chinese medicine services, and the market space will expand several times
.
Formula granules are included in the management of Chinese medicine pieces, and the price can be added to no more than 25%, and at the same time, it is included in medical insurance payment to further promote space expansion
.
There is still a time window for the national centralized procurement of formula granules, and the expected price decline is similar to that of proprietary Chinese medicines, which is relatively moderate
.
At present, many traditional Chinese medicine formula granule companies are also full of confidence
in the development of the new year.
For example, CR Sanjiu said in an institutional survey in 2022 that the company is also continuing to promote the filing process of formula granule business, and the performance of formula granule business this year may be lower than expected, but the growth of
Sinopharm business is still very promising.
Next year's formula granule business is generally relatively optimistic, although the sales area will still be affected to a certain extent, but considering the increase in filing varieties and the current price adjustment, it is expected that the overall business will achieve recovery growth
next year.
It is worth mentioning that the national standard has been introduced, which restricts the source, preparation method, shape, identification method, characteristic map, extractable, content determination, etc.
of traditional Chinese medicine formula granules, and enterprises in order to meet strict standards, flexible production, extensive layout and cost control will be tested, and the cost may rise
.
The industry also pointed out that formula granules as a whole still belong to the market-oriented pricing mechanism, and the high requirements for the quality, production and product testing of medicinal materials, as well as the difference between the old and new quantities and specifications will affect the output of enterprises, resulting in a significant increase
in production costs.
The rise in costs will also bring about an increase in terminal prices, and the price of formula granules may increase by 80-100%
on average.
Due to the technical barriers in the production process, it is expected that the head enterprises in the midstream industry will expand their production capacity and form a moat, and the head enterprises will also have more advantages
in cost control and quality control.
Disclaimer: Under no circumstances does the information or opinions expressed herein constitute investment advice
to anyone.