Proton Pump Inhibitor (PPI) Industry Overview - Proton pump inhibitors (PPIs) are the most potent acid-suppressing medications, widely used for treating acid-related diseases such as peptic ulcers and gastroesophageal reflux disease [1][2] - The Chinese oral PPI market has maintained a scale of over 10 billion yuan from 2018 to 2024, with strong market demand [1][6] - The market has shown volatility due to the implementation of volume-based procurement plans for several generic PPIs, leading to price declines despite increasing sales [1][6] Market Size and Trends - The market size for oral PPIs in China is projected to decline by 10.5% year-on-year in 2024, influenced by price reductions from collective procurement [1][6] - The market for PPIs used for peptic ulcers is valued at 4.8 billion yuan, while the market for those used for gastroesophageal reflux disease is valued at 1.8 billion yuan [6] Product Landscape - As of the end of 2024, there are seven PPI products approved for sale in China, with major products including Rabeprazole, Aplrazole, Esomeprazole, and Omeprazole, collectively holding over 87% market share [1][8] - Rabeprazole leads the market with a share of 27.6%, followed by Aplrazole at 23.7% [1][8] Competitive Landscape - The PPI industry is characterized by intense competition, with numerous companies involved in the production of various PPI products [1][9] - As of July 2025, there are 134 products of Lansoprazole, 106 products of Pantoprazole, and 440 products of Omeprazole produced by over 180 companies in China [1][9] - The leading company for Rabeprazole is Jichuan Pharmaceutical, holding over 30% market share, while AstraZeneca leads the Omeprazole market with a 17.8% share [1][9]

Core Viewpoint - The article discusses the impact of China's drug procurement policy on pharmaceutical companies, highlighting the shift from a price-cutting competition to a focus on quality and innovation in the industry [2][4][6]. Group 1: Price Competition and Its Consequences - The aggressive price competition in the pharmaceutical industry has led to significant revenue losses, with a total of 48.3 billion yuan cut from the national drug market after four rounds of procurement [2]. - The phenomenon of "price wars" has resulted in extremely low prices for drugs, exemplified by the 0.09 yuan per tablet price for Amlodipine, which is unsustainable for many companies [2][4]. - The intense competition has forced companies to compromise on quality, leading to concerns about supply disruptions and product quality [2][3]. Group 2: New Procurement Rules - The latest round of procurement introduces new rules aimed at curbing the "race to the bottom" in pricing, shifting the focus from "lowest price wins" to "value for money" [3][4]. - A new price difference mechanism has been established, allowing for reasonable price premiums, which requires companies to ensure that their quoted prices do not lead to losses [3][4]. - Quality standards have been tightened, with new regulations mandating that only companies with at least two years of production experience can participate, along with comprehensive inspections of both companies and products [3][4]. Group 3: Focus on Innovation - The new procurement policy allows for the exclusion of high-risk and patented drugs from the procurement process, enabling original branded drugs to compete in public hospitals if they agree to lower prices [4]. - The policy aims to facilitate a market environment where innovative drugs can thrive, with 60% of the savings from procurement being reinvested into innovative drug development [4][6]. - The shift from a focus on generic drugs to innovative solutions is seen as essential for the long-term sustainability of the pharmaceutical industry in China [6].