There are many subdivisions of the pharmaceutical industry, which mainly include chemical raw materials and preparations, Chinese herbal medicines, and other pharmaceutical businesses. China's pharmaceutical industry plays a very important role in people's health, economic development and social progress, so it is also a long-term promising industry.

Article 1: Pharmaceutical industry sales revenue continued to grow
Since 2011, China's pharmaceutical industry sales revenue continued to grow. From 1512.6 billion yuan in 2011 to 3703.1 billion yuan in 2018, and both maintained a growth rate of more than 9%. The growth rate of my country's pharmaceutical industry has exceeded the growth rate of my country's economy, and the maximum growth rate has reached twice as much as China's GDP. Since the "Twelfth Five-Year Plan", due to the reform of the medical system and the strengthening of drug supervision by relevant departments, the growth rate of sales revenue of my country's pharmaceutical industry has slowed down slightly compared with the "Eleventh Five-Year Plan" period, especially from 2013 to 2014 During the year, the growth rate fell to 18.42 and 13.23 respectively, and in 2015 it fell to 9.46. There was a slight rebound in 2016, 2017 and 2018, reaching 10.34 per cent, 12.20 per cent and 12.02 per cent, respectively. In 2019, the growth rate declined slightly, but still maintained a high growth rate of 10.27 per cent.
Due to the rigid characteristics of the demand of the pharmaceutical industry, with the gradual recovery of the macro-economy and the adjustment and improvement of medical reform, the pharmaceutical industry is expected to continue to resume a higher development speed under the new development model. This means that the sales revenue of the pharmaceutical industry will further increase rapidly.

The proportion of 2. medical and health expenditure in the national economy continues to rise.
While maintaining rapid economic development, China's total health expenditure has climbed from 2434.6 billion yuan in 2011 to an estimated 6,519.6 billion yuan in 2019, with a compound growth rate of 13.1, higher than the growth rate of China's gdp in the same period.
At the same time, China's total health expenditure as a share of GDP has been increasing, from 5.0 per cent in 2011 to 6.6 per cent in 2019. The "Healthy China 2020" Strategic Research Report released by the Ministry of Health proposes that "by 2020, the main health indicators will basically reach the level of moderately developed countries; by 2020, the total health expenditure should account for 6.5-7.0% of the gdp." In the future, the importance of China's medical and health expenditure in the national economy will be further enhanced.
The market of the pharmaceutical industry will be further expanded, and its position and role in the national economy will be improved.

The "Joys and Worries" of the 3. Pharmaceutical Industry"
The pharmaceutical industry is also facing some favorable and unfavorable factors in the current prosperous situation.
1, China's population aging trend is obvious
According to the statistics of the National Bureau of Statistics, in 2019, the number of elderly people aged 60 and over in China has reached 0.254 billion, accounting for 18.1 percent of the total population, of which the number of elderly people aged 65 and over has reached 0.176 billion, accounting for 12.6 percent of the total population.
The elderly have weak resistance and reduced physical fitness. They are a high-risk group for infectious diseases such as influenza, cardiovascular diseases, diabetes, malignant tumors, and digestive system diseases. Their health status has increasingly become the focus of social attention. With the aging of society The speed is gradually accelerating, and the demand for medication and medical care for the elderly will further increase.
2. Gradual improvement in residents' income and medical payment capacity
With the development of China's economy, the per capita disposable income of residents is increasing.
According to the National Bureau of Statistics, in 2019, the disposable income of residents nationwide was 30,733 yuan, an increase of 8.9 percent over the previous year. Between 2009 and 2019, China's per capita health expenditure increased from 1,314.30 yuan to 4,237.00 yuan, with a compound annual growth rate of 12.42 per cent. With the increase of the ability of Chinese residents to pay for medical and health care, the consumption capacity of drugs is also expected to be further improved.
3. Important support for national policies
Since the State Council announced the "opinions on deepening the Reform of the Medical and Health system" in April 2009, various departments have successively issued policies, plans and other measures to gradually establish and improve the basic medical and health system covering urban and rural residents, establish and improve the new rural cooperative medical system, and gradually provide basic public health services such as disease prevention and control, maternal and child health care, and health education to urban and rural residents, so as to comprehensively improve the national health and medical level.
A series of medical and health system reforms have taken place in the national medical field, including industrial development planning, drug circulation quality management, and the establishment of grass-roots pharmaceutical market; on the one hand, it has strengthened industry supervision, helped to improve the competitive environment, promoted industry integration, and realized the long-term sustainable development of the pharmaceutical manufacturing industry; on the other hand, with the deepening of medical reform, the government has gradually increased health investment and expanded the benefits of basic medical care.
These measures will further expand the scale of the drug demand market, and at the same time provide an opportunity for rapid development for pharmaceutical manufacturing enterprises with more prominent R & D capabilities and more effective quality control.
4, the industry's research and development pressure is greater.
At present, China's chemical drug market is dominated by generic drugs, and the market for innovative drugs accounts for a relatively small proportion. Compared with the R & D investment of large pharmaceutical enterprises in Europe and the United States, the R & D investment and the proportion of revenue of most domestic pharmaceutical enterprises are not high, and the conversion rate of scientific research achievements is low. Due to the high scientific and technological content of the pharmaceutical manufacturing industry, it is necessary to invest in specialized talents. At the same time, the product development cycle is long, the R & D investment is large, and the output uncertainty is high. For most small and medium-sized pharmaceutical companies, it is difficult to bear larger R & D investment. Driven by short-term interests, most enterprises are unwilling to carry out in-depth research on the production process of generic drugs and the development of new drugs, resulting in serious product homogenization and lack of real core products. In the long run, this situation will have an impact on the sustained and rapid development of China's pharmaceutical industry.
5, enterprise environmental protection costs rise
With the gradual strengthening of China's attention to environmental protection, the relevant departments of chemical raw materials production and other heavy pollution industry environmental verification tightening. In January 2015, the revised "the People's Republic of China Environmental Protection Law" was formally implemented. The law adopts the punishment method of "daily penalty" to strengthen the punishment for illegal pollutant discharge, and at the same time strengthen the environmental protection of local governments and their responsible persons. Responsibility for protection has increased the importance and enthusiasm of local governments and pollutant companies in environmental protection investment.
In the long run, the promulgation and implementation of environmental protection laws and policies will promote the integration and upgrading of chemical and pharmaceutical enterprises and improve the ecological environment, but in the short term, it will bring certain environmental cost pressure to the production and operation of enterprises.
To sum up, the current development of China's pharmaceutical industry is in good condition; the government has given policy support, the aging society has brought about the growth of market demand, and the economic development has increased the consumption capacity of residents. These factors will promote the next growth of the pharmaceutical industry; of course, the pharmaceutical industry itself has the unfavorable conditions of long-term R & D pressure and short-term production cost increase, The development speed of the pharmaceutical industry may be affected to a certain extent.