The development of the medical and health industry may show seven major trends in 2024

China Securities Network News (Reporter Zhou Lulu) CITIC Securities released a research report on January 3, stating that looking back on 2023, the development of the medical and health industry will usher in profound changes, and sector valuations and public fund allocations are also at relatively low levels in history. Looking forward to 2024, deepening changes in the industry will inevitably bring about substantial changes in the overall business model of medicine and a substantial increase in concentration. Looking for certainty amidst uncertainty, CITIC Securities has sorted out seven major prospects for medical and health industry trends. It is recommended to focus on the following ideas and layout direction.

First, innovation and internationalization are expected to continue to reach milestones in 2024. With the rapid evolution of China's pharmaceutical manufacturing technology, from raw materials to finished products, from contract processing to independent brands, from low-end to high-end, innovation and internationalization will become the only way for outstanding domestic enterprises to get out of involution.

Second, the price and revenue share of medical services have steadily increased, hospital salary levels and distribution mechanisms have been rationalized, and the clinical value of medical services is expected to be deeply reflected. In the long run, it is expected that the prices of medical services in general will rise and fall, and the trend of price increases for projects that reflect the value of services will continue.

Third, more high-quality innovative drug varieties will enter the period of commercial value realization and return in 2024. It is expected that blockbuster varieties will continue to emerge for indications such as autoimmunity, tumors, and chronic diseases, as well as new molecular fields such as dual antibodies and ADCs, and their commercial value will gradually be realized.

Fourth, the pharmaceutical supply chain is expected to enter the stage of commercialization and volume expansion in 2024. On the policy side, the supply chain is encouraged to be independent and controllable, and the demand from downstream customers in some subdivided areas (fillers, culture media, etc.) has entered the late clinical/commercialization stage. Against the backdrop of the irreversible rise of China's local suppliers, in 2024 The domestic substitution process is expected to accelerate.

Fifth, new medical infrastructure is the main theme of medical construction throughout the "14th Five-Year Plan" period. Financing channels for new medical infrastructure have become increasingly diversified in recent years. At the same time, if hospital operations continue to recover as expected in 2024, the huge demand generated by the aging population will protect the hospital's own funds. With the arrival of the wave of hospital construction completions at the end of 2023, and the in-depth advancement of high-quality development of public hospitals, the purchase of corresponding medical equipment has been put on the agenda. It is expected that medical institutions will enter a new round of expansion cycle, and the demand for related medical equipment will also remain high. .

Sixth, the population fertility support policy system is expected to be gradually improved, and the assisted reproductive industry will usher in a dividend period.

Seventh, the reform of pharmaceutical state-owned enterprises has entered the implementation period. Traditional Chinese medicine is a treasure of Chinese history and culture, and "keeping integrity, innovation, inheritance and development" is the development direction and requirement of the industry. At present, the three-year reform of traditional Chinese medicine state-owned enterprises has achieved initial results. The reform of state-owned enterprises is mainly based on traditional Chinese medicine companies, which is mainly reflected in two aspects: first, "one increase, one stability and four improvement" to strengthen capital returns and the quality of operating performance; second, in the new era, internal incentives for traditional Chinese medicine companies are extended and expanded.