In-depth report on antihypertensive drugs: “Silent killer” gives rise to a huge market (2)

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II. Growth of Chinese antihypertensive drug market is faster than that of global market, and the import substitution is expected to speed up under the new policy

2.1 Size of global antihypertensive drug market declines, but the demand dose not

From the perspective of the international market, the antihypertensive drug market peaked at USD 54.9 billion in 2010, and the market size has declined year by year thereafter, for which the main reason lies in the patent expiration of original blockbuster antihypertensive drugs in our opinion, for example, losartan/hydrochlorothiazide, losartan potassium/losartan potassium, and eprosartan mesylate, etc. become off-patent around 2010; the generic drugs marketed at low prices have pushed overall antihypertensive drug prices lower, thereby leading to the decline of size of the antihypertensive drug market.

Chart 9 Size of global antihypertensive drug market in 2008-2014

Data source: South Medicine Economic Research Institute, Fortune Securities

The overall market size of antihypertensive drugs has declined after 2010, however, this does not mean the decline of demand for antihypertensive drugs. Seen from situation of the mainstream sartan antihypertensive drugs at present, the overall market size of sartan drugs is declining, however, the demand for sartan drug APIs increases year by year. The demand for antihypertensive drugs is rising, however, the change of structure of drug use (more people select generic drugs with lower prices to substitute original drugs) leads to decline of market sales, but this is good for generic drug manufacturers and API manufacturers.

Angiotensin II receptor blockers and calcium channel blockers were the main varieties, from the perspective of sales of global antihypertensive drug varieties in 2014. The Diovan and Exforge of Novartis both had good performance.

Chart 12 Global sales situation of some antihypertensive drugs in 2014

2.2 Chinese antihypertensive drug market maintains fast growth, and Chinese pharmaceutical enterprises have advantages on grass-roots market

China has a large population base as well as many hypertensive patients that will continue to grow as China steps into an aging society. The antihypertensive drug market has been keeping stable growth in China. The National Development and Reform Commission of China issued the list of 162 pharmaceutical products to be reduced price in 2011 to mainly restrict prices of antibiotic drugs, which also affected the antihypertensive drugs to slow down the growth, however, the growth had resumed thereafter. The Chinese antihypertensive drug market size reached RMB 25.239 billion in 2015, and the growth also declined as affected by factors like tender price cut, medical insurance expense control, and slowing down of economic growth, however, it was still faster than the industry growth.

In addition, the Chinese hypertension treatment market was promoted to grow stably as influenced by factors such as improvement of hypertension management consciousness of the majority of the elderly with the popularization of hypertension education and improvement of drug use level in China, the development trend that patients with hypertension are getting younger, and upgrading of people’s investment in health.

Chart 13 Size of Chinese antihypertensive drug market in 2008-2015 (RMB 100 million)

There is a small gap between the market shares of pharmaceutical products of Chinese enterprises and foreign enterprises on the Chinese antihypertensive drug market, and the competition is fierce. According to data of Sinohealth CMH, foreign enterprises are a little ahead on the Chinese antihypertensive drug market and their market shares have showed the trend of expanding in recent two years, however, with the proceeding of the generic drug consistency evaluation, Chinese-produced antihypertensive drugs will have the import substitution effect after passing the said evaluation.

Chart 14 Antihypertensive drug sales proportions of Chinese and foreign enterprises in China in 2013-2015

From the perspective of sales of antihypertensive drugs in various channels, Chinese-produced antihypertensive drugs mainly have advantages on grass-roots market and retail pharmacies, especially the rural and county-level grass-roots market, however, there is still a big gap between Chinese enterprises and foreign enterprises in city graded hospitals.

Sales of a part of graded hospitals will flow to the grass-roots market, which will benefit the Chinese enterprises, with the implementation of the hierarchical diagnosis and treatment policy, and Chinese-produced antihypertensive drugs will be more competitive and nibble the city graded hospital market of foreign enterprises upon advantages of superior quality and efficacy and cost effectiveness in the context of medical insurance expense control and with the completion of generic drug consistency evaluation.

Keep Reading: In-depth report on antihypertensive drugs: "Silent killer" gives rise to a huge market (3)

Chart 15 Antihypertensive drug sales proportions of Chinese and foreign enterprises in different channels