AstraZeneca promotes the localization of zirconium silicate cyclogenic acid sodium, tax reduction is expected to save a lot of costs
Recently, AstraZeneca announced the acceleration of the localization process of its star drug Zirconium Silicate Powder (trade name: Libezhuo), which has attracted widespread attention from the industry. As the core product for the treatment of hyperkalemia, the localized production of this drug is not only expected to reduce the cost of patients' medication, but may also save AstraZeneca hundreds of millions of yuan through tax incentives. Here is a detailed analysis of this matter:
1. Policy background and progress in domestic production
As China's pharmaceutical market continues to open up, multinational pharmaceutical companies are accelerating the promotion of the "localization strategy". AstraZeneca reached a cooperation with Wuxi WuXi Biologics in 2023 to start the transfer of domestic technology for zirconium silicate sodium cyclogenic acid powder, and is expected to complete the production line within 2024. This time, localization will enjoy the following policy dividends:
| Policy Category | Specific content | Expected cost savings |
|---|---|---|
| VAT discount | VAT rate for domestic innovative drugs dropped to 3% | Save about 120 million yuan per year |
| Tariff reduction | Raw material import tariffs dropped from 5% to zero | Save 3-5 million yuan in a single batch |
| Local subsidies | Wuxi Economic and Technological Development Zone provides fixed asset investment subsidies | Up to 50 million yuan |
2. Market data and competitive landscape
The global market size of zirconium silicate sodium cyclo-zone silicate has reached US$2 billion, and the compound growth rate of sales in China in the past three years has reached 47%. After localization, its price is expected to drop from the current price of about 2,000 yuan/box to below 1,500 yuan/box. The main competitors are as follows:
| Competitor name | enterprise | Market share in 2023 | Price (yuan/box) |
|---|---|---|---|
| Libezhuo | AstraZeneca | 68% | 1980 |
| Sweetheart | Merck | twenty two% | 1850 |
| Domestic generic drugs | The sky is clear and so on | 10% | 1200-1500 |
III. Analysis of the impact of industrial chain
Domestic production will reconstruct the hyperkalemia drug industry chain:
1.Upstream raw materials: Jiangsu Viagra Pharmaceutical, a zirconium salt supplier, has expanded its production capacity and is expected to increase its supply by 40% in 2024
2.Production process: The Wuxi base will add 3 special production lines, with an annual production capacity of 5 million boxes
3.Downstream channels: Through cooperation with Sinopharm Holdings, the coverage rate of cold chain distribution will be increased to more than 90%.
4. Industry experts' opinions
Song Ruilin, executive president of the China Medical Innovation Promotion Association, pointed out: "The localization of multinational pharmaceutical companies is a win-win choice, which not only meets the national medical insurance cost control requirements, but also consolidates their market position." Data shows that in the past three years, the localization rate of multinational pharmaceutical companies' products in China has increased from 35% to 52%.
5. Future Outlook
AstraZeneca plans to replicate the domestic experience to five other key drugs, which are expected to be achieved by 2025:
| index | Target value |
|---|---|
| Quantity of localized products | 8-10 |
| Production cost reduction | Average 25%-30% |
| China's market revenue share | Increased to 18% |
The localization process of zirconium silicate sodium cyclogenic marks a new stage in the development strategy of multinational pharmaceutical companies in China. Through supply chain localization and tax optimization, enterprises can gain greater price operation space, while also providing more possibilities for medical insurance negotiations. The subsequent progress deserves continuous attention.
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