The adoption of digital health tools has skyrocketed in recent years, especially during the COVID-19 pandemic, which fueled the exponential growth of telehealth and remote care. Additionally, the rapid advancements in artificial intelligence (AI) technologies have further fueled this digital health revolution. These tools hold tremendous potential to enhance healthcare accessibility, improve efficiency in healthcare systems, and empower patients to take charge of their health. Therefore, it is imperative to establish consensus and standards for the development, testing, deployment, and governance of these technologies, considering the proliferation of unregulated digital health tools and the growing concerns around AI regulation.
The Role of Industry Collaboration:
To address the challenges faced by the healthcare industry in navigating the world of digital health and AI, several groups have emerged to provide guidance and support. Notably, the Health AI Partnership (HAIP), consisting of healthcare organizations and ecosystem partners such as DLA Piper, released a series of practical guides in May 2023. These guides outline best practices for the safe and effective adoption of AI solutions in health systems. Additionally, the Digital Medicine Society (DiMe) organized a group of healthcare experts who proposed the Evidence DEFINED Framework, aimed at evaluating the quality of digital health tools based on clinical evidence. These initiatives demonstrate the industry’s commitment to fostering informed decision-making and standardization in the digital health landscape.
HAIP, led by a diverse team of clinicians, engineers, lawyers, and social scientists from esteemed institutions like Duke Health, Mayo Clinic, and UC Berkeley, conducted extensive research to develop their best practice guides. Over 90 professionals from various healthcare and related fields participated in in-depth interviews, bringing expertise in areas such as bias, ethics, regulation, and credentialing.
Based on these insights, HAIP formulated a comprehensive collection of best practice guides that cover the entire AI product life cycle in healthcare settings. These guides outline eight decision points that healthcare professionals and organizations should consider when implementing AI tools:
1. Procurement: Identifying and prioritizing problems that AI can address and assessing the feasibility and viability of AI products.
2. Development: Defining success measures and designing AI solution workflows to integrate with existing operational structures.
3. Generate evidence of safety, efficacy, and equity: Validating AI products prior to clinical use and identifying potential risks.
4. Integration: Executing AI solution rollout and managing workflow changes to prevent misuse.
5. Lifecycle management: Monitoring AI solutions over time, updating or decommissioning them as necessary.
The publication of these guides aims to establish minimum elements for the governance of AI systems in healthcare settings and empower health system leaders to make informed decisions regarding AI adoption. Feedback on the guides is invited from healthcare professionals and the wider community, allowing for continuous improvement and refinement of the practices outlined.
Addressing the need for standardized evaluation criteria for digital health tools, the Evidence DEFINED Framework, developed by healthcare experts organized by DiMe, focuses on assessing the clinical evidence of digital health interventions (DHIs). Existing assessment frameworks were found lacking in their ability to evaluate digital tools effectively. Consequently, the Framework emphasizes clinical evaluation, efficient review processes, and the facilitation of standardized, rigorous DHI evidence assessment.
The Framework encompasses four essential components:
1. Data privacy
2. Clinical assurance and safety
3. Usability and accessibility
4. Technical security and stability
To enable stakeholders to make informed DHI selection decisions, the Framework proposes a four-step process:
1. Screen for absolute requirements: Identify threshold requirements that potential DHIs must meet, such as regulatory compliance.
2. Apply an established evidence assessment framework: Utilize existing evaluation frameworks designed for non-digital interventions.
3. Apply the Evidence DEFINED supplementary checklist: Supplement existing frameworks with specific concerns critical to digital health tools.
4. Make actionable recommendations: Provide evidence-based recommendations for appropriate levels of DHI adoption.
The Framework acknowledges the dynamic nature of the digital health space and establishes a collaborative platform for industry feedback and updates every 6 to 12 months. While the Framework’s focus is on clinical evidence, it encourages consideration of other domains, including health equity, patient experience, cost-effectiveness, and product design.
Implications and Conclusion:
The release of HAIP’s best practice guides and DiMe’s Evidence DEFINED Framework demonstrates the industry’s growing demand for evidence-based guidance and standardization in digital health. These resources hold significant value for health systems, payers, pharmaceutical and device manufacturers, and patients alike. Inclusive collaboration and regulatory expertise remain vital for successful implementation of digital health solutions.
It is essential for organizations seeking to adopt, implement, or stay current in the digital health landscape to utilize these resources as a foundation for their decision-making processes. However, it is equally important to continually assess and adapt these recommendations to real-world contexts. DLA Piper’s Digital Health and AI practices are well-equipped to provide strategic advice on digital health adoption, supporting the operationalization of industry best practices.
For further information regarding the HAIP guides, the Evidence DEFINED Framework, or DLA Piper’s Digital Health and AI capabilities, readers can reach out to their DLA Piper relationship partner, the authors of this article, or any Healthcare industry group member.
Thrombosis is a small piece of blood formed on the surface of the inner surface of the cardiovascular system at the peeling off or repairing of the place. It is clinically divided into venous thrombus and arterial thrombus. Once the thrombus falls off, it will flow to various parts of the body with the blood, causing blockages, and resulting in no blood supply to the related organs.
For example, blockage in the brain can lead to cerebral infarction, blockage in the cardiovascular system can induce myocardial infarction, and accumulation in the lungs is pulmonary embolism.
The following categories of people are susceptible to thrombosis “preferred”:
People with a genetic predisposition
Such people encounter other predisposing factors, such as increasing age, lower extremity sprain, long-term bed rest, pregnancy and childbirth, etc., which may lead to thrombosis.
High blood pressure
Long-term elevated blood pressure can harden blood vessels, increase blood viscosity, and promote thrombosis. Long-term elevation or fluctuation of blood pressure can easily damage the vascular intima, cause atherosclerosis, and form a thrombus.
Long-term high blood sugar can easily lead to arteriosclerosis and thickening of the arterial intima. Coupled with a hyperglycemic state, the fibrinolysis and coagulation systems may become unbalanced, resulting in increased blood viscosity, leading to thrombosis.
Nicotine, a harmful ingredient in tobacco, can damage the intima of blood vessels, causing lipids and inflammatory cells to accumulate in the blood vessels, thereby forming a mural thrombus. Nicotine stimulates vasoconstriction, making blood clots worse.
People who sit or stand for long periods of time
When sitting for a long time, the muscle contractions of the legs decrease and the blood flow of the lower extremities slows down. Inactivity for 3 hours in a row will increase the risk of venous thrombosis; standing for a long time will make the calf muscles too tense, which will affect the blood flow and promote the formation of thrombosis.
Those with a history of thrombosis
Patients with a history of blood clots are more likely to get another blood clot.
Several symptoms suggest blood vessels may be blocked
Early detection of the signs of vascular blockage and timely implementation of necessary measures is crucial to saving lives.
Sudden chest tightness–Watch out for pulmonary embolism
If you suddenly feel chest tightness and tightness when you stand up after sitting or lying in bed for a long time, you should be alert to the possibility of pulmonary embolism caused by venous thrombosis in the lower extremities and blocking the pulmonary artery.
Pulmonary embolism is very dangerous and can lead to sudden death in severe cases. Therefore, if the above symptoms appear, you should seek medical attention as soon as possible.
Coronary heart disease is called “coronary atherosclerotic heart disease”.
Coronary arteries are blood vessels that supply blood to the heart. If a blockage or stenosis occurs, the blood supply to the heart will be limited, and severe ischemia will result in chest pain.
Weakness on one side–Beware of the heart attack
Sudden onset of weakness in one extremity (both upper and lower extremity) suggests a blockage of a cerebral or carotid artery. At the same time, it may also be accompanied by slurred speech, one side of the mouth and eyes, and blurred vision.
If these symptoms occur, regardless of whether they resolve on their own or not, please seek medical attention in time.
Leg pain when walking–Watch out for blockages in lower extremity arteries
The arteries of the extremities are responsible for the blood supply to the upper and lower extremities. In the case of lower extremity vascular ischemia, leg pain may occur when walking, which can be relieved after rest, and then reappears when walking again.
If the blockage of the lower extremity arteries is ignored and the disease progresses further, it may lead to severe ischemia of the lower extremities, the skin temperature will drop, the pulse of the dorsum of the foot and the posterior tibial artery will weaken or disappear, and the lower extremity pain will also be felt at rest (ie, rest pain), and further development Limbs may rupture, wounds that do not heal, and even tissue necrosis (gangrene).
Diabetic patients are more likely to develop lower extremity lesions and must pay special attention.
Five details to raise healthy blood vessels
A healthy lifestyle can slow down vascular ageing
Be mindful of these habits
When smoking, harmful substances such as nicotine in tobacco will stimulate the vascular motor centre, and stimulate the release of epinephrine and norepinephrine in the body, causing the heart rate to increase peripheral vasoconstriction, and blood pressure to rise. Therefore, try not to smoke and stay away from second-hand smoke in your life.
Heavy-flavoured diets such as high oil, high salt, and high sugar will make the blood thicker and increase the burden on the blood flow. In life, eat more fruits and vegetables, and eat less greasy and fried food.
Exercise can improve blood circulation, significantly reduce blood lipids, blood pressure and weight, relieve stress, and make you happy. It is recommended to choose aerobic exercise such as jogging, brisk walking, swimming, cycling, etc., for 30 minutes each time, 5 times a week.
Work and rest rules
Staying up late can easily disrupt the biological clock, causing the body to secrete too much adrenaline and norepinephrine, thereby slowing blood flow and increasing its viscosity. Try to keep a regular schedule and go to bed before 11 pm.
Regular physical examination
Develop a healthy concept of regular physical examination, pay attention to indicators such as body weight, waist circumference, blood pressure, blood lipids, blood sugar, etc., and control them within the normal range. Once the data is abnormal, consult a doctor in time, actively intervene and treat, and minimize the risk.
The increase in temperature increases the volumetric pressure of the hazardous chemical.
Thermal expansion and contraction are general physical phenomena of objects. The internal pressure of the container increases, and if it exceeds the limit that the container can withstand, it will cause the container to fail or even burst. If the container is open, the liquid contained in it expands beyond its capacity and will overflow, resulting in running, running, dripping and leaking. To prevent this from happening, in addition to taking measures to avoid heat and reduce the temperature, it is also necessary to carry out filling according to the specified filling coefficient. As far as the gas is concerned, its expansion coefficient is more significant, and the gas is generally contained in the cylinder. As the temperature rises and the pressure is too high, the cylinder is in danger of explosion.
The rise in temperature makes the liquid evaporate faster
The higher the temperature, the faster the flammable liquid evaporates, the greater the concentration of vapour on the liquid surface, the greater the possibility of forming an explosive gas mixture with air, and the higher the risk of fire and explosion. The evaporation rate of different liquids varies with temperature, boiling point, specific gravity, and pressure. The ease with which a flammable liquid evaporates is expressed by its boiling point, the lower the boiling point, the more evaporative the liquid is. Some flammable liquids have very low boiling points, and once the ambient temperature exceeds its boiling point, it is prone to danger.
Increased temperature accelerates oxidative decomposition and spontaneous combustion
Affected by environmental factors such as temperature and humidity, many dangerous chemicals are easily decomposed after being heated, releasing oxygen and even oxygen atoms, oxidizing other substances, and releasing a lot of heat at the same time. If the ventilation is poor, the heat will accumulate and not dissipate, causing the temperature to rise, which will speed up its oxidation rate, generate more heat, and promote the temperature to continue to rise. When the temperature reaches the spontaneous ignition point of the substance, it will spontaneously ignite.
What are the basic safety measures for the storage of hazardous chemicals?
The storage warehouse should be qualified
Hazardous chemical warehouses should use non-conductive refractory materials as insulation layers for the roof and walls, and the eaves should be appropriately lengthened to prevent sunlight from entering the warehouse; the warehouse walls should be appropriately thickened, windows should be opened frequently, indirect ventilation holes should be used, and Double doors, double roof, window glass can be painted blue or frosted glass.
Hazardous chemicals should be classified and stored
Hazardous chemicals are generally divided into explosive articles, combustible articles in contact with water, spontaneous combustible articles, flammable solids, flammable and combustion-supporting gases, corrosive articles, oxidants, etc. These items should be classified, stored in separate warehouses, divided into parts, and stored on separate shelves. It is strictly forbidden to mix items with conflicting properties, different fire fighting methods, and prone to spontaneous combustion.
When storing items, the stacking should not be too high, too large or too dense. A certain distance should be maintained between stacks, between stacks and walls, columns, roof beams and electric lights, and fire escapes should be reserved, and excessive storage should not be allowed.
Strictly control the temperature
Set up a water storage roof for the warehouse or set up a cooling water pipe on the roof of the warehouse. When the temperature is above 30 degrees Celsius, the warehouse is cooled to keep the temperature in the warehouse below 28 degrees Celsius.
Laying sand and stone sacks on the roof of the warehouse can enhance the thermal insulation performance of the roof. The roof, exterior walls and window glass of the warehouse can also be painted white, and the reflection effect of white on sunlight can be used to reduce the absorption of radiant heat and achieve the effect of cooling.
According to the nature and packaging of the items, well water and ice cubes can be poured on the warehouse floor, and air conditioners can be installed to cool down if conditions permit. In some warehouses, windows can be opened in the morning and at night to let in cold air, and doors and windows can be closed at noon to prevent hot air from entering.
Open storage yards and storage tanks to be cooled
Flammable liquids in barrels should be placed in buildings to prevent direct sunlight. In special circumstances, if it is necessary to temporarily store it in the open air, the sunshade should be built with non-combustible materials, and sometimes it is necessary to spray water regularly with a leather pipe to cool down according to the actual situation.
A cooling device should be installed on top of the storage tank. When the temperature reaches above 30 degrees Celsius, the cooling water pump should be turned on for spray cooling. The storage tank cannot be overfilled. Generally, only 90% to 95% of the volume is contained in the tank, and 5% to 10% of the volume space should be reserved, which can prevent the hazardous chemicals in the tank from burning or exploding due to thermal expansion.
Install lightning protection facilities
Hazardous chemical warehouses are generally located at the edge of the unit or city, keeping a certain distance from other surrounding buildings. In this way, an open area is formed around the warehouse, which is vulnerable to lightning strikes. Therefore, the warehouse should install lightning protection devices to prevent fire accidents caused by lightning strikes.
Strengthen personnel management
Personnel who manage hazardous chemical warehouses must undergo safety training, pass the examination, and hold certificates. Warehouse management personnel should regularly inspect the warehouse, find problems and solve them in time to ensure safety.
Check for these ten problems
Low energy warehouse
The fire resistance level of the warehouse is not enough. According to the different risk factors of the stored substances, hazardous chemical warehouses have different fire resistance grade requirements, which should generally be above the second grade.
Warehouse changed to factory
Illegal subcontracting or packaging of hazardous chemicals in warehouses.
Special library to miscellaneous warehouse
Hazardous chemicals should be stored in special warehouses, but mixed with other items.
Store different types of hazardous chemicals in the same warehouse, such as hazardous chemicals with different fire fighting methods, acid and alkali, etc.
Private and illegal warehouses
Privately build unapproved hazardous chemical warehouses or rent unsafe warehouses to store hazardous chemicals.
Accommodation or offices in hazardous chemical warehouses.
Items stored in hazardous chemical warehouses are not marked and labelled.
Warehouse with the electrical threat
The power switch of the hazardous chemical warehouse is not set outside the warehouse, and the electrical circuits and lighting fixtures do not meet the explosion-proof requirements.
Hazardous chemical warehouse items are placed in disorder, and the “five distances” (top distance, lamp distance, wall distance, column distance, and stack distance) are insufficient. Flammable items should be placed at a fire distance.
Since the beginning of this year, many places have started to plan detailed implementation rules and detailed work requirements. According to the actual situation of their administrative regions, the inspection of drug production, operation and use is further promoted.
Takeda China announced today that its innovative lung cancer drug Ambery® (brigatinib) was officially launched. Brigatinib, a novel selective ALK tyrosine kinase inhibitor, was approved by the China National Medical Products Administration (NMPA) in March 2022 as a single agent for anaplastic lymphoma kinase (ALK)-positive patients. For the treatment of locally advanced or metastatic non-small cell lung cancer (NSCLC), its launch will further meet the unmet needs of Chinese ALK-positive advanced non-small cell lung cancer patients and help to develop a new treatment pattern in related fields.
Since the beginning of this year, many domestic and foreign pharmaceutical companies have stopped researching and developing new drugs.
Innovative drugs have a long R&D cycle, high investment and high risks. It is not easy to achieve success. Therefore, the story of a near-death experience in the development of new drugs often appears. It is reported that since the beginning of this year, many pharmaceutical companies have announced the termination of research and development of new drugs.
For example, recently, the clinical failure of Sanofi’s oral SERD amcenestrant combination. This is another failure following the single-agent clinical failure in March. Based on this, Sanofi decided to stop all clinical trials of amcenestrant. This means that Sanofi has completely conceded defeat in the field of oral SERD. It is reported that many pharmaceutical companies have failed in the field of oral SERD (estrogen receptor degrader), which is crowded with big pharmaceutical companies. In addition to Sanofi, Roche’s oral SERD also showed danger signs. In April this year, One clinical trial of oral SERD was unsuccessful.
In the process of the termination of research and development of new drugs, Biogen also decided to stop the observational ICAREAD trial of the Aduhelm drug in the first half of this year. Biogen stated in the clinical trial registry that the reason for terminating the trial was mainly because the drug did not receive national medical insurance. Coverage policy support.
Since the beginning of this year, there have also been frequent clinical development terminations involving innovative collaborative drugs in the global market. In April of this year, AbbVie announced that it had terminated its cooperation with BioArctic to stop the follow-up clinical development of ABBV-0805, an alpha-synuclein (aSyn) antibody for the treatment of Parkinson’s disease. Also in April, Nektar and Bristol-Myers Squibb announced the termination of the global clinical development program for Bengadil in combination with Opdivo.
In addition, in July, the Phase II clinical trial of MacroGenics’ core product B7-H3 monoclonal antibody, ibrutinib, was terminated. Before that, Tianjin Bio and MacroGenics reached a cooperation to obtain the exclusive clinical trial of ibrutinib in Greater China. Development and sales rights; Sesen Bio announced that it will terminate the clinical development of the immunotoxin Vicineum in the United States, and Qilu Pharmaceutical previously introduced Vicineum’s domestic rights for $35 million.
Analysts said that the reasons for the termination of innovative drug research and development of various pharmaceutical companies are different, but they are mainly divided into active and passive. The initiative is mostly due to the fact that companies choose to suspend research and development on their own initiative due to changes in the market competition pattern or concerns about intensifying market competition in the future during the research and development of innovative drugs.
For example, GenScript recently announced that Legend Bio, a non-wholly-owned subsidiary, notified the US FDA that it had terminated the Phase I clinical trial of its New Drug Application (IND) for LB1901. The termination was reportedly based on the lack of clinical benefit of a similar CAR-T product candidate from Legend Bio that expresses the same CAR protein as LB1901.
Legend Bio has judged that the future prospects of LB1901 will not be very optimistic, and voluntarily terminated it in order to give priority to other candidate products in its product line under development. Passive means that the drug is rejected by the drug regulatory department because the efficacy or safety is not as expected.
In the process of drug development, R&D failures have long been commonplace. However, focusing on medium and long-term development, the industry said that this also forces companies to speed up their thinking, on how to achieve innovation in the future while ensuring the improvement of scientific value, which will further improve the quality of innovation of pharmaceutical companies and improve Creativity.
Over the years, APIs have always occupied the highest proportion in my country’s export trade of pharmaceutical products. China’s API industry also occupies an important position in the global pharmaceutical industry chain. Affected by the new crown pneumonia epidemic, the safety of the pharmaceutical industry chain and the supply of APIs have received unprecedented attention. This paper sorts out the pattern change and future development trends of the global API industry and puts forward suggestions for the development of my country’s API industry.
The global API industry pattern is gradually shifting to China and India
Before the 1990s, Europe and the United States were the most important API production areas in the world, with large-scale industries and advanced technology. Later, affected by factors such as production costs and environmental protection pressures, the production and supply of APIs in Europe and the United States gradually shifted to the Asia-Pacific region. Currently, global chemical API production is mainly concentrated in five regions: Western Europe, North America, Japan, China and India. Among them, Europe and the United States are gradually reducing the production capacity of APIs, especially in the United States, most generic drug companies do not have their own API production workshops and mainly rely on imports. Emerging markets represented by China and India have risen rapidly and have become major API producers and exporters. Relevant data show that the total global supply of APIs from China and India has risen from 16.7% in 2008 to 47% in 2019.
From a geographical point of view, in Europe, except for France, the Netherlands, Germany, Switzerland, Spain, Italy, Ireland, Russia and some Eastern European countries that have a few API factories, most countries have already given up the production of APIs. In the Americas, the United States, Mexico, Brazil, and Cuba also have some API factories, but the number is not large, and the number of API companies in some countries is still decreasing. In Asia, in addition to China and India, Israel, Japan, and South Korea also have a certain number of API and intermediate factories, but the number is relatively limited. The API industry in Africa is almost zero.
In terms of varieties, developed countries and regions such as the United States and Europe, relying on their advantages in research and development, production technology and intellectual property protection, occupy a dominant position in the field of patented pharmaceutical APIs with high added value; China is dominated by bulk APIs In India, the generic drug industry drives the production of characteristic APIs.
China and India rely on cost advantages to occupy an important position in the API market. As China, India and other developing countries of characteristic API manufacturers continue to increase investment in R&D, improve production technology, improve process levels, and invest in improving production equipment to form specialized production lines, Chinese and Indian API companies are gradually moving towards high-end APIs value chain extension.
Before the outbreak of COVID-19, the five major API production areas had shown a situation of trade-offs among each other. China and India have benefited from the rapid development of their own pharmaceutical industries and the increase in international demand for APIs, and the API industry has grown considerably. And compared with the other three production areas, the future development prospects of the API industry in China and India are generally optimistic. At the same time, due to the similarities between India’s pharmaceutical industry and China’s, the Indian API industry has formed a climate, and it is expected that it will continue to compete fiercely with Chinese API companies for a long time in the future.
Chinese APIs are deeply involved in the global pharmaceutical industry chain
China is the world’s largest producer and consumer of chemical products. In 2020, the output of dozens of bulk chemicals ranked first in the world. China’s API industry has complete upstream basic chemical raw materials, backed by the advantages of the industrial chain and supply chain. After years of continuous development, it has become an active participant in the global API industry. Especially since 2010, China has become the world’s largest production base of APIs, which can not only effectively meet domestic demand, but also sell a large number of APIs to the international market. APIs have been exported to nearly 200 countries and regions around the world, and the export volume has been stable for many years. No. 1 in the world, it has begun to occupy an extremely important position in the global pharmaceutical industry chain.
According to Clarivate data, China is able to produce about 1,650 varieties of APIs with production capacity accounting for about 30% of the world’s total. Its comparative advantages are reflected in fermented products, cost control levels, and international compliance. Among them, a large number of APIs and intermediates occupy a considerable share in the global market and have certain bargaining power. For example, China’s production level of antibiotics is internationally leading, with antibiotic APIs accounting for 30% of the international market; the production of antipyretic and analgesic drugs such as paracetamol, aspirin and Analgin is relatively high, of which the production of paracetamol accounts for 50% of the world’s total production; vitamin Among the APIs, except for a very few varieties, most of the production ranks in the forefront of the world; the market share of corticosteroid drugs is the world’s leading. In addition, China is also the largest supplier or even the only supplier in the world for some important pharmaceutical active ingredients, such as the antibiotic vancomycin, etc. China also dominates the global supply of heparin.
According to the data of the China Chamber of Commerce for Import and Export of Medicines and Health Products, except for a slight decline of 1% to 2% in 2015 and 2016, the export scale of China’s chemical raw materials has continued to grow over the years, and the export value has increased from 15.98 billion US dollars in 2010 to 41.77 billion US dollars in 2021, the export volume has exceeded 10 million tons, and there are dozens of products with an export value of over 100 million US dollars. According to data, Chinese-made APIs account for about one-third of the global API market, making it a well-deserved global API leader. In recent years, the number of Chinese enterprises applying for the EU CEP (European Pharmacopoeia Applicability Certificate for APIs) and the US DMF (Drug Master File Certificate) have shown a rapid growth trend. Taking the European market as an example, as of July 11, 2022, Chinese companies have a total of 899 valid CEP certificates, and more than 900 varieties of APIs are sold in the European market, making them the largest source of APIs in Europe.
The epidemic highlights the status of China’s API centre
Since the outbreak of the new crown pneumonia epidemic, the global supply chain of APIs has been affected to a certain extent. India, the United States and other countries have experienced drug shortages to varying degrees, especially epidemic-related drugs. In February 2020, at the beginning of the outbreak of the novel coronavirus pneumonia, the World Health Organization immediately sent to the China Chamber of Commerce for Import and Export of Medicines and Health Products a list of priority products that need to be monitored due to the interruption of the supply of APIs and intermediates in China, including the production of antibiotics, There are a total of 35 varieties of APIs for antiviral, hypertension treatment and other drugs. India announced to stop the export of 26 active pharmaceutical ingredients (APIs) and related medicines to protect their own use during the epidemic.
The above situation highlights the importance of China in the global pharmaceutical industry chain. According to the data, the APIs and drugs restricted by the Indian government are mainly antibiotics, vitamins, antiviral and antipyretic and analgesic products, most of which are drugs needed to fight the epidemic. The APIs or core intermediates of these drugs are mainly from China. Among them, there are even Hubei local enterprises occupying the world’s leading share. At the Group of Twenty (G20) Special Summit on the New Coronary Pneumonia Epidemic held in March 2020, China proposed that “China will increase its efforts to supply APIs, daily necessities, anti-epidemic materials and other products to the international market”, highlighting the need for new crown pneumonia Against the backdrop of the global epidemic of pneumonia, China, as the world’s largest producer and exporter of APIs, has responsibilities and responsibilities. During the new crown pneumonia epidemic, the export value of anti-infectives, vitamins, hormones, antipyretic and analgesics, some antibiotics and other anti-epidemic-related raw materials and drugs in China has achieved varying degrees of growth, and some varieties have grown rapidly. The export value of dexamethasone increased by 55% year on year, the export value of lamivudine, vitamin C and vitamin E increased by more than 30% year on year, and the export value of paracetamol and Analgin increased by more than 20% year-on-year.
At present, Pfizer’s Paxlovid and Merck’s Molnupiravir have been approved and commercialized in multiple countries and regions, respectively. Many Chinese companies have become important intermediate and API suppliers for the above-mentioned drugs from Pfizer and Merck. According to relevant announcements, three domestic manufacturers, Asymchem, WuXi AppTec, and Proton, have received orders of over 14 billion yuan from Pfizer Palo Verde—Chinese enterprises have been deeply involved in the global industry chain of small molecule drugs for the treatment of new coronary pneumonia and supply chain.
The new crown pneumonia epidemic has also further recognized the importance of the global pharmaceutical industry chain. Problems in any link of the industry chain will have a chain reaction in downstream industries. After the outbreak, the export of Chinese pharmaceutical products has been delayed, affecting the Indian pharmaceutical companies that are closest to China’s upstream and downstream pharmaceutical supply chains, and thus affecting the normal production and global supply of downstream companies.
It can be said that the new crown pneumonia epidemic has further highlighted the status of Chinese APIs in the global pharmaceutical industry, but it has also made countries around the world pay more attention to the safety and stability of their own API supply, and more and more European and American pharmaceutical companies have begun to consider raw materials. The problem of regression in pharmaceutical production. In the future, the global API industry chain may develop towards diversification, localization and regionalization, but this will be a long process.
It is time for China’s API industry to upgrade and iterate
In the past, the division of labour in the supply chain of the global pharmaceutical industry chain was based on the resource endowment and comparative advantages of each country and was the result of the free choice of the market. Countries considered cost priority and efficiency priority. However, the continuation of the new crown pneumonia epidemic, coupled with trade protectionism and geopolitical conflicts, may become a catalyst for reshaping the industrial structure. How to continue to maintain the advantages of China’s API industry in the reshaping of the global pharmaceutical industry chain is of great strategic significance for the future development of China’s pharmaceutical industry.
At present, my country’s API industry has shown a trend of a hundred flowers blooming and a hundred schools of thought contending. The implementation of pharmaceutical reform policies such as the evaluation of the quality and efficacy of generic drugs, centralized drug procurement, and the filing system for APIs are accelerating the development of the API industry toward high quality.
In the future, on the one hand, Chinese API companies should strive to explore existing advantageous varieties and bulk varieties, continuously improve technologies and processes, actively upgrade and iterate towards green, intelligent and digital production, and use synthetic biology, enzymes and enzymes. Advanced technology platforms such as catalysis and continuous flow will empower the industry and firmly stabilize the basic market of the API industry; on the other hand, China’s API industry must continue to expand the space for growth, and more opportunities for the API industry will come from characteristic raw materials in the future The increase in drug varieties, the development of standardized markets and the extension to contract custom manufacturing (CDMO) should actively develop towards the high-end value chain of speciality APIs and complex APIs. At the same time, with the rapid development of CDMOs, Chinese API companies are developing from the primary and intermediate competitors of global API CDMOs to advanced competitors and will have the opportunity to participate in the R&D and production of global blockbuster innovative drugs in the future. This also brings new business opportunities for Chinese API companies, which will accelerate the growth of the API industry to a certain extent.
On the whole, more than half of the companies in China have achieved a year-on-year increase in net profit attributable to their parent companies, and about 15 pharmaceutical companies have exceeded expectations. It can be seen that the overall prosperity of the pharmaceutical and biological industry is still relatively high. Then, in the third quarter, can the high capital of the pharmaceutical and biological industry continue?
15 pharmaceutical companies exceeded expectations in the first half of the year
As of now, A-share companies have basically disclosed their 2022 semi-annual reports. Among them, more than 140 companies’ net profit in the first half of the year exceeded the upper limit of the previous performance forecast.
From the perspective of their industries, these 100 outstanding companies are mainly concentrated in pharmaceuticals, basic chemicals, computers and mechanical equipment, electronics, new energy vehicles and other industries.
According to industry statistics, in the pharmaceutical industry, at least 15 pharmaceutical companies have exceeded expectations.
Among them, the traditional Chinese medicine company Yiling Pharmaceutical achieved net profit attributable to the parent. It deducted non-net profit of 564 million yuan and 561 million yuan respectively in the first half of the year, with a year-on-year growth rate of 94.96% and 114.37%. In the field of in vitro diagnostics, Dean Diagnostics achieved net profit attributable to the parent company and net profit attributable to the parent company after deducting non-recurring gains and losses were 1.880 billion yuan and 1.879 billion yuan respectively, with an increase of 158.54% and 196.22% over the same period last year.
In addition, a number of CXO companies whose performance exceeded market expectations in the first half of the year, such as Wisdom Medicine, Zhaoyan New Drug, WuXi AppTec, etc. In the year’s first half, Wisdom Medicine achieved a net profit of 957 million yuan, a year-on-year increase of 18,518.34%. In the year’s first half, Zhaoyan New Drug achieved a net profit of 371 million yuan attributable to the parent, a year-on-year increase of 141.4%. In the first half of the year, WuXi AppTec achieved an operating income of 17.756 billion yuan, a year-on-year increase of 68.5%, and a record high growth rate; net profit attributable to the parent also achieved a year-on-year increase of 73.3%, a relatively bright performance.
Can the industry boom pattern continue?
Among the A-share pharmaceutical and biological companies that have disclosed their semi-annual reports in the first half of the year, more than half of the net profit attributable to the parent company achieved a year-on-year increase, which shows that the overall prosperity of the industry is still relatively high. So, in the third quarter, can the high prosperity pattern of the pharmaceutical and biological industry continue?
Judging from the pharmaceutical segments that performed well in the first half of the year, they were mainly concentrated in the medical devices, traditional Chinese medicine and CXO sectors.
Since the beginning of this year, a number of policy innovations, including the seventh batch of centralized procurement of drugs, centralized procurement of high-value medical consumables, and medical insurance cost control, have been promoted, releasing a signal to encourage and support the rapid development of the innovative pharmaceutical device industry.
In the traditional Chinese medicine industry, the industry policy dividends are even more constant, and the entire industry is entering a golden period of rapid development. Some industry insiders pointed out that in the future, the Chinese medicine industry is expected to usher in an upward turning point with the support of policies and medical insurance.
It is expected in the industry that pharmaceutical innovation will become the main logic of the development of the entire industry. Under this background, CXO companies will also benefit for a long time, and leading companies may have high growth potential.
Ping An Securities believes that it is possible to pay attention to the sectors where the marginal improvement is in the upward trend. With the control of public health incidents, the performance of the pharmaceutical industry in the third quarter is expected to achieve accelerated growth. In the medium and long term, focus on the sectors that are basically upward in the post-epidemic period. It is recommended to focus on sub-sectors such as medical services, pharmaceutical business, innovative industry chain, and CXO.
Some brokerages also said that the pharmaceutical sector has cost-effectiveness and good fundamentals. The current low valuation is mainly affected by the centralized procurement policy, the epidemic situation, and medical insurance control fees. However, from the perspective of industry valuation and profits, the pharmaceutical sector belongs to the left-side layout. At this stage, there is still a bottom line down, and we can still look forward to it. The long-term development space is worthy of attention.
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