Core Insights - In Q1 2025, China's pharmaceutical trade exhibited "stable total volume and optimized structure," with total trade amounting to $47.088 billion, a slight year-on-year increase of 0.38% [1] - Exports reached $26.632 billion, up 4.39% year-on-year, driven by growth in traditional products like western medicine raw materials and medical device consumables [1] - Imports continued to decline, falling 4.42% to $20.456 billion, reflecting domestic industry upgrades and import substitution effects [1] Export Performance - Western medicine products dominated exports, accounting for $25.605 billion (54.4% share), with raw material exports at $11.108 billion, a 5.19% increase [1] - Medical device exports totaled $19.561 billion, a 5.38% increase, with disposable consumables and medical dressings as the main export drivers [1] - Exports to the US reached $4.639 billion, a 9.6% increase, with significant contributions from raw materials and disposable consumables [2] Import Trends - Western medicine imports totaled $11.785 billion, down 2.03%, while raw material imports increased by 22.52% to $2.732 billion [3] - Medical device imports fell to $8.004 billion, a decrease of 7.38%, indicating accelerated domestic replacement of high-end diagnostic and treatment equipment [3] - The reliance on high-end drug imports remains significant, particularly for cancer and rare disease medications [3] Market Diversification - The export market is becoming increasingly diversified, with emerging markets like Belt and Road countries driving growth, totaling $10.88 billion, a 5.23% increase [2] - Exports to Africa grew by 11.18% to $1.153 billion, with notable increases in Egypt (29.37%) and Nigeria (24.03%) [2] - Conversely, exports to Japan and South Korea declined by 2.93% and 6.68%, respectively, while exports to India grew by 7.54% despite local supply expansion policies [2] Future Outlook - The pharmaceutical trade is expected to face a "new normal" of intertwined opportunities and challenges, with continued growth in western medicine raw materials and medical device consumables [4] - The domestic innovation in pharmaceuticals and high-end equipment is anticipated to deepen the replacement process [4] - Long-term challenges include the decentralization of international supply chains, increased compliance costs due to EU carbon tariffs, and intensified competition from India and Southeast Asia [4]

Core Viewpoint - The ongoing tariff policies from the U.S. are increasing economic uncertainty and negatively impacting the global pharmaceutical market, prompting Chinese pharmaceutical companies to seek ways to navigate these challenges [1][2]. Group 1: Impact on Chinese Pharmaceutical Industry - In 2024, China's total pharmaceutical import and export volume is projected to reach $199.38 billion, a year-on-year increase of 2.1%, with exports amounting to $107.96 billion, up 5.9%, marking the end of a two-year decline [1]. - The export of traditional Chinese medicine products decreased by 3.3% to $5.28 billion, while exports of Western medicine products increased by 5.7% to $53.96 billion, and medical device exports rose by 7.3% to $48.75 billion [1]. - Chinese pharmaceutical companies primarily focus on the domestic market, with limited export scale to the U.S., and the short-term impact of U.S. tariff policies is expected to be minimal due to temporary exemptions [4]. Group 2: U.S. Pharmaceutical Market Challenges - The U.S. pharmaceutical market is facing significant challenges, with a 25% tariff potentially increasing annual drug costs by $51 billion and raising drug prices by up to 12.9% if costs are fully passed on [3]. - The U.S. is experiencing shortages of hundreds of drugs, including critical emergency medications, due to various factors such as increased prescription volumes and manufacturing delays [3]. - The U.S. heavily relies on imports for 80% of its active pharmaceutical ingredients, making it vulnerable to tariff impacts that could disrupt its medical supply chain [2][3]. Group 3: Strategic Recommendations for Chinese Pharmaceutical Companies - Chinese pharmaceutical companies are advised to enhance their independent research and innovation capabilities to maintain competitiveness amid uncertainties [6]. - Companies should optimize their global presence, focusing on stabilizing markets in Europe and the U.S. while also exploring emerging markets [6]. - There is a need to improve product structures and tap into domestic market growth opportunities, such as those arising from the aging population [6].