Medical Network, January 9th, "Insisting on equal emphasis on both Chinese and Western medicine, inheriting and developing the cause of traditional Chinese medicine" and giving full play to the role of traditional Chinese medicine in building a well-off society and building a "healthy China" is the relevant content of the report of the 19th National Congress of the Communist Party of China. down the general direction. As the material basis of traditional Chinese medicine, Chinese herbal decoction pieces will usher in a new era along with the general trend of industrial development.

When the pointer of time is pointing at 2018, while we are full of longing for the new year, we are still nostalgic for the past 2017. The multiple benefits of the 2017 policy for the pharmaceutical industry will be gradually released in the next few years starting from 2018; the grand blueprint of "Healthy China" described in the report of the 19th National Congress of the Communist Party of China needs to be practiced step by step by all parties.

It is expected that in 2018, the Chinese medicine segment closely related to "Healthy China" and the great rejuvenation of the nation, as well as the promotion of traditional Chinese medicine diagnosis and treatment services at home and abroad will become more obvious. Traditional Chinese medicine and traditional Chinese medicine equipment as support will also usher in huge market demand. Among traditional Chinese medicine products, especially Chinese herbal decoction pieces, which are the fundamental material basis of traditional Chinese medicine, it has become a high-probability event for analysts to usher in a new wave of market explosion in 2018.

Plumbing Pieces, Prophet of Capital

Authoritative opinions from pharmaceutical research show that the market is generally optimistic about the overall direction of the pharmaceutical industry gradually coming out of the trough since the second half of 2017.

In November 2017, at the 29th National Pharmaceutical Economic Information Conference, Lin Jianning, director of CFDA Southern Pharmaceutical Economic Research Institute, pointed out that from the data point of view, compared with 2016, the decline of China's pharmaceutical industry has stopped in 2017. It stopped falling and rebounded, and bottomed out. From January to September 2017, the output value of China's pharmaceutical industry reached 2,543.8 billion yuan, an increase of 12.2%, and the growth rate showed a steady upward trend. It is estimated that the total output value of China's pharmaceutical industry in 2017 will reach 3,569.9 billion yuan, an increase of 12.7%; The sales revenue of the pharmaceutical industry exceeded 2,347.5 billion yuan, an increase of 12.3%, and the growth rate showed a significant rebound.

At that time, Lin Jianning pointed out that 2018 was the first year after the 19th National Congress of the Communist Party of China, and a series of industrial policies were introduced intensively, which brought great benefits to the pharmaceutical industry. From the perspective of macroeconomics, the global economy is recovering, and China's economy is better than expected. From January to September 2017, the national general public budget revenue was 13.4129 billion yuan, a year-on-year increase of 9.7%; medical care and family planning expenditures were 1.1834 billion yuan, an increase 14.6%. The increase in fiscal revenue is conducive to increasing medical and health investment. Therefore, it is predicted that the sales revenue of China's pharmaceutical industry will increase by 16.5% year-on-year in 2018.

After the "Opinions on Deepening the Reform of the Review and Approval System and Encouraging the Innovation of Drugs and Medical Devices" was promulgated, the emphasis on drug innovation has been raised to the national strategic level, and the corresponding priority review of drugs in the upper reaches of the industry and the centralized organization of generic drug consistency evaluation The development of such work, together with measures such as expanding medical insurance coverage and raising the level of medical insurance financing, accelerating the construction of hierarchical diagnosis and treatment and grassroots medical institutions, and promoting the overall innovation and development of traditional Chinese medicine, have brought great momentum to the expansion and upgrading of the Chinese pharmaceutical market. The bullish outlook on the ecology of the pharmaceutical industry in 2018 directly ignited capital's bull market expectations for high-quality companies in the pharmaceutical sector.

In the overall sector of traditional Chinese medicine, Chinese herbal decoction pieces have become an eye-catching variety due to their rapid growth in recent years. The "Blue Book of Research on the Development of Chinese Herbal Pieces Industry" released at the 29th National Medical Economic Information Conference pointed out that in recent years, the market size of my country's Chinese herbal medicine industry has continued to expand; in 2016, the sales revenue was 195.64 billion yuan, a year-on-year increase of 12.7%; in 2017 In the first half of the year, the sales revenue was 104.79 billion yuan, a year-on-year increase of 21.33%. From 2011 to 2016, the five-year compound growth rate reached 18.04%. Although the growth rate of TCM decoction pieces has declined year by year during the past five years, there are obvious signs of recovery in TCM decoction pieces. With the official promulgation of the "Traditional Chinese Medicine Law" and many preferential policies such as the fact that Chinese herbal decoction pieces are not included in the proportion of medicines in medical institutions and other terminals, and are not included in the zero price difference, it is expected that the industry will maintain rapid development during the "13th Five-Year Plan" period.

Specific to some leading enterprises of traditional Chinese medicine decoction pieces, it is their rapid development that leads the rise of the entire sector. For example, Zhongzhi Pharmaceutical Co., Ltd., listed in Hong Kong in 2015, is a technology inventor of new-type decoction pieces of traditional Chinese medicine wall-breaking herbs. Its Cao Jinghua Broken Wall Herbal Series has developed and approved 62 kinds of Chinese medicine decoction pieces, and 32 kinds of them are on the market. Cao Jinghua's broken-wall herbal independent packaging fits the current high-end consumption concept, and the brand advantage gradually emerges. According to the statistics of CIIC, the sales revenue of Cao Jinghua's broken wall herbal decoction pieces has a compound growth rate of 71% from 2012 to 2016. In the first half of 2017, the revenue growth surged by 67.8%, and the annual performance is expected to reach a new level. Due to the small size of Zhongzhi Pharmaceutical, its growth has not been fully demonstrated after its listing, especially in 2017. However, many institutions have expressed their optimism about the potential of value investment in the future market.

Of course, there are also large listed Chinese medicine companies who are optimistic about the rapidly rising popularity of Chinese medicine formula granules in the industry, and have consulted with provincial and national food and drug regulatory authorities to apply to become a pilot enterprise of national Chinese medicine formula granules. However, authoritative experts from the regulatory authorities suggest that relevant domestic Chinese medicine companies should consider the opportunities and risks of long-term development and the market capacity to bear in the pilot production and operation of Chinese medicine decoction pieces formula granules, and be careful not to make a good product because of vicious price competition and lead to overall quality control. higher risk situations.

"Belt and Road" Traditional Chinese Medicine Carrying

At the end of 2017, news from the State Administration of Traditional Chinese Medicine confirmed that the World Health Organization will include traditional medicine with traditional Chinese medicine as the main body in the newly revised International Classification of Diseases (ICD-11), which will be officially promulgated in 2018.

In the "One Belt, One Road" initiative that China is vigorously promoting, the overall deployment of the development of traditional Chinese medicine has been initially determined. According to the person in charge of the International Cooperation Department of the State Administration of Traditional Chinese Medicine in an interview with relevant media recently, the goal of China’s international cooperation in traditional Chinese medicine is: by 2020, a new pattern of all-round cooperation in traditional Chinese medicine “Belt and Road” will basically take shape, supported by domestic policies. The system and international coordination mechanism are gradually improved. Based on neighboring countries and key countries, cooperate with countries along the route to build 30 overseas centers of traditional Chinese medicine, promulgate 20 international standards of traditional Chinese medicine, register 100 kinds of traditional Chinese medicine products, and establish 50 foreign exchanges and cooperation of traditional Chinese medicine. Demonstration base.

How to make medical and health knowledge and services with the advantages of the traditional Chinese culture and independent intellectual property rights go to the world? The specific presentation form is debatable. The "Blue Book of Research on the Development of Chinese Herbal Pieces Industry" also raised related issues, that is, from the history of the global application of herbal medicine, the application of herbal medicine is closely related to the history of the development of human civilization. The four major civilizations that emerged in human history all have many records of using herbs to treat diseases. Since modern times, modern medicine has developed rapidly, and herbal medicine has been gradually marginalized in many parts of the world. At present, only in East Asia and Southeast Asia, traditional Chinese medicine/herbal medicine is still highly recognized, reserved in the field of mainstream medicines for medical purposes, and has the same status as other types of medicines such as chemical medicines and biological products; in regions outside East Asia and Southeast Asia, although It is also widely used, but most of them are not used for medical purposes, but exist in the form of health food and dietary additives.

From this point of view, how can traditional Chinese medicine enter the minds of ordinary consumers all over the world with better modern expressions and marketing packages, be accepted by them, and even become a fashion product and related services for healthy consumption?

From the perspective of the development of traditional Chinese medicine products in neighboring countries, the development of my country's Chinese medicine decoction pieces industry should also adapt to the social development trend, continuously increase the innovation of traditional Chinese medicine decoction pieces, and continue to promote the modernization of Chinese medicine. For example, Japanese Kampo medicine and Taiwan’s traditional Chinese medicine (including granules) are similar in form to the formula granules currently managed by Chinese herbal medicines in my country, but they are essentially equivalent to Chinese patent medicine preparations in my country; and they are both dietary supplements, health care This point is not fundamentally different from the way my country’s “Ma Yinglong” products and “Yunnan Baiyao” entered the European and American markets. It is worth noting that in South Korea and Taiwan, where the concept of concocting is recognized, due to the cumbersome use of traditional Chinese medicine decoction pieces, patients are less and less likely to decoct their own decoction.

Overall, affected by historical factors, in Asia, including East Asia, Southeast Asia and other regions, TCM decoction pieces have a good basis for promotion and application; in some European regions, such as Germany and Russia, the application technology of traditional herbal medicine is relatively developed, It has a certain market foundation and plays a certain role in promoting the promotion of Chinese herbal decoction pieces; in some countries where the application of traditional natural medicines is underdeveloped, such as the United Kingdom, the United States, Italy, France, etc., in recent years, with the integration of traditional Chinese and Western medicine such as Chinese herbal medicine and acupuncture With the vigorous rise of therapy, Chinese herbal decoction pieces are gradually recognized and accepted, and the use of Chinese herbal decoction pieces is becoming more and more popular.

In the current round of economic globalization and social development accompanying the industrial revolution, the integration of product fashion and technology is quite important. In this regard, some domestic traditional Chinese medicine companies have also made useful attempts. For example, in response to the innovation and development of traditional Chinese medicine, Guangzhou Pharmaceutical Group proposed to create "fashionable Chinese medicine", and is committed to making Chinese medicine a fashionable health product through advanced technology and fashionable marketing. Guangzhou Pharmaceutical Group is currently taking the concept of "fashionable Chinese medicine" as the keynote, and upgrading product quality and business model as the key point, vigorously promoting the modernization, internationalization, popularization of science and popularization of Wanglaoji, and the herbal tea culture represented by Wanglaoji. delivered around the world.

Judging from the practice of Guangyao, Wanglaoji, a century-old herbal tea brand, has more than 10 million sales outlets around the world, covering 60 countries and regions on five continents. Statistics show that Wanglaoji accounted for 42.8% of the total export volume of herbal tea drinks in 2016. Among them, the United States has become Wanglaoji's largest overseas market, with an annual export volume of tens of millions of yuan and an annual growth rate of about 30%, which has become a classic case of Chinese health products going global.

Similarly, Cao Jinghua Broken Herbal Medicine also carries the international dream of Lai Zhitiao, the head of Zhongzhi Pharmaceutical Industry. In future planning, Zhongzhi’s goal is to take Cao Jinghua’s wall-broken herbs as the main product, and take traditional Chinese medicine health care services as the connotation. After the wall is broken, it will be made into granular products, which can be taken directly with water, and the absorption and utilization of active ingredients can be improved. The greatly improved herbal Chinese medicine is promoted to the world in the form of experience stores, creating a "Starbucks chain" in the field of Chinese medicine decoction pieces. The experience store not only sells TCM decoction pieces and broken herbal products, but also spreads TCM culture through the overall scene and service of the experience store. Let the "better absorption and convenient taking" trendy Chinese medicine decoction pieces and broken herbal medicine gradually become "like drinking coffee" convenient, modern and fashionable, opening a new era of Chinese medicine health culture.

Of course, regardless of whether it is Wanglaoji herbal tea or broken herbs, the packaging of Chinese medicine and health products going to the world is fashionable, and the quality is also an important foundation. Especially in the creation of a global supply chain, a precise control system that runs through the quality and efficiency of the entire industry chain, including authentic medicinal planting, standardized production and processing, modern logistics transportation, storage, packaging, etc., each link needs to strictly implement quantification Index control, whole process big data management.

It is reported that in order to ensure the quality of the broken wall decoction pieces and the safety and effectiveness of the products, Zhongzhi Pharmaceutical has established a complete quality assurance system for the whole industry chain of traditional Chinese medicine and a traceability system for traditional Chinese medicine. Established nearly 20 authentic Chinese medicinal material traceability bases across the country, leading the introduction of genetic identification technology for traditional Chinese medicinal materials, ensuring the authenticity and authenticity of medicinal material species; Effective monitoring of the whole process of harvesting and so on; the introduction of international cutting-edge testing equipment, strict control of the pesticide residues and heavy metal content standards of Chinese herbal medicines.