The tide is turning for innovative drugs: off-site channels become the main battlefield, and consumer categories are emerging

How can external channels balance commercialization efficiency and compliance risks?

March 29, Science and Technology Innovation Board Daily (Reporter Shi Shiyun) “The domestic drug terminal market has been in a negative growth trend for two consecutive years. Against this backdrop, traditional categories serve as a ballast to stabilize the basic market, while innovative drugs, health consumer products (non-drugs), and health care for the elderly will become the most certain growth tracks in the external market by 2026.” This was stated by Li Junguo, Vice President of Zhongkang Technology, at the recently held 11th Health Commodity Trade Conference (2026 Xiding Conference).

This judgment has already been corroborated by early market data. Taking innovative drugs as an example, the retail pharmacy channel sales scale for this category is projected to reach 32.3 billion yuan by 2025, and from 2020 to 2025, there will be 459 innovative drug varieties in the pharmacy channel (excluding vaccines), with a five-year compound annual growth rate of 62.7%.

Li Junguo further pointed out: “Innovative drug varieties with consumer healthcare attributes and chronic disease management attributes continue to expand, which is expected to break the traditional sales model dominated by DTP pharmacies and has huge growth potential.”

The external market is gradually becoming another core battleground for the commercialization of innovative drugs. However, alongside these opportunities, concerns about medication safety and compliance have also become prominent.

Especially for innovative drugs that combine consumer healthcare and chronic disease management attributes, while the external channels open up volume space, they also significantly increase the difficulty of compliance control. Issues such as the authenticity of prescription circulation, the standardization of internet diagnosis and treatment, the boundaries of marketing promotion, drug circulation traceability, and compliance in patient education are intertwined. If control is lacking, it is easy to encounter risks such as off-label promotion, disguised marketing, and non-standard prescriptions, which not only affect the safe use of drugs but may also cross regulatory red lines.

How to maintain compliance in the rapidly expanding external market and find a balance between commercialization efficiency and industry norms is a practical problem that companies must face.

▌The shift of innovative drugs to external channels becomes a new main battleground

In recent years, the pace of innovative drug listings in China has continued to accelerate. By 2025, the National Medical Products Administration is expected to approve 76 innovative drugs for market entry, setting a historical record. However, at the same time, there are still many bottlenecks in the internal approval of innovative drugs.

Even after being included in the medical insurance directory, innovative drugs still generally face practical problems such as cumbersome hospital entry processes and limited numbers of drug lists. Additionally, influenced by DRG/DIP payment reforms and zero markup policies, some medical institutions are reluctant to purchase and use high-value innovative drugs. Furthermore, some innovative drugs have special requirements for logistics transport and clinical use, requiring dedicated management, which further increases hospital operational costs.

The combination of multiple factors exacerbates the difficulties of innovative drugs in “entering hospitals and slow market penetration,” forcing companies to accelerate the shift of their commercialization focus to the external market.

In January of this year, the Ministry of Commerce and nine other ministries jointly issued the “Opinions on Promoting High-Quality Development of the Pharmaceutical Retail Industry,” clearly encouraging innovative drugs and reference preparations to enter retail channels, providing clear guidance for the external commercialization of innovative drugs from a top-level design perspective.

Hao Yanqing, head of key accounts at Novartis China, believes that the value of the external market in the life cycle of innovative drugs has changed; it is no longer just a sales channel or a supplement to hospital channels but an important platform that spans all stages from product launch to volume increase.

Hao Yanqing further explained: “During the initial launch of innovative drugs, the external market is the first touchpoint for patients to access the drug and service, enabling rapid supply and patient reach. During the product ramp-up period, the external channels leverage their advantages in purchasing convenience and service continuity, playing a significant role in drug acquisition. Even after products enter medical insurance, some patient usage scenarios may see a return flow, but due to hospital prescription control and prescription outflow policies, the external market will still have strong service support capabilities.”

Focusing on specific channels in the external market, Qin Guangxia, president of Shuyupingmin Drugstore Chain Co., Ltd., believes that offline retail pharmacies have a natural advantage in the external commercialization of innovative drugs. She pointed out that offline retail pharmacies have extensive coverage, deep community ties, and proximity to patients, relying on long-term operations to accumulate a solid foundation of user trust and possess mature supply chain networks, with well-established warehousing, logistics, and cold chain delivery systems that can meet the stringent storage and transport requirements of innovative drugs. Additionally, complete medical insurance qualifications and policies such as dual-channel and overall reimbursement can effectively enhance patient payment capabilities.

Moreover, offline retail pharmacies excel in professional service capabilities; pharmacist teams can provide face-to-face medication guidance, medication adherence management, and other exclusive services. The operational scenarios are also more diverse and flexible, and through models like health stations, they can expand value-added services such as chronic disease management, rehabilitation services, and health interventions, better adapting to the full-cycle service needs of innovative drugs.

However, Qin Guangxia also stated that the external commercialization of innovative drugs is not a simple channel shift but a comprehensive reconstruction of traditional pharmaceutical retail operating logic, cooperation models, and service systems. Faced with the operational characteristics of innovative drugs—“low profit margins, high barriers, and long cycles”—offline retail pharmacies urgently need to break away from the thinking of operating generic drugs, and companies need to shift their mindset from short-term volume to a long-term win-win goal, establishing a new value creation system.

“For the pharmaceutical retail industry, laying out innovative drugs is a strategic positioning move. Currently, channel resources for innovative drugs are scarce, and pharmacies that are first to establish a presence can seize quality resources, lock in core customer groups, align with policy directions, and gain the initiative for transformation and development. For pharmaceutical industrial enterprises, external channels are an important path to break through the bottlenecks of the internal market, enhance product accessibility, and maximize commercial value,” Qin Guangxia said.

In front-line research by reporters from the Science and Technology Innovation Board Daily, several chain pharmacy executives indicated that building sales channels for innovative drugs will become a key focus for the next phase of layout. They believe that compared to ordinary drugs, innovative drugs have higher professional service demands, which can better highlight the added value of retail channels in health management and help pharmacies create differentiated competitive advantages.

▌As consumer-oriented innovative drugs begin to surge, safety and compliance remain the bottom line

Extending an innovative drug’s consumer attributes undoubtedly opens up a larger market imagination space. In this way, the products are no longer limited to hospital channels but can reach a broader audience through diverse external scenarios, thereby achieving a growth curve far exceeding that of traditional prescription drugs and opening up a new commercial ceiling.

Taking GLP-1 weight loss drugs as an example, they have evolved from specialized prescription drugs for treating diabetes to becoming globally popular for weight management. With significant weight loss effects, these drugs have moved out of hospital pharmacies and entered offline retail pharmacies and online e-commerce platforms. In overseas markets, companies are even planning to establish DTC (Direct-to-Consumer) platforms to directly reach millions of self-paying weight loss consumers, aiming to completely break the boundaries between healthcare and consumerism.

According to insights gathered by reporters from the Science and Technology Innovation Board Daily during research, innovative drugs with consumer attributes, including those for weight loss, hair loss, and ophthalmology, as well as chronic disease innovative drugs for hypertension, hyperlipidemia, and hyperglycemia, are leading the growth in external channels. Oncology and immunological drugs still primarily occupy the internal market, but external penetration rates are gradually increasing.

A corporate representative told the reporters from the Science and Technology Innovation Board Daily: “The target group for consumer-oriented innovative drugs has distinct characteristics: strong self-consumption awareness, high decision-making initiative, and a younger demographic, representing ‘upward consumers.’ Although these drugs remain prescription-only and require professional evaluation and prescriptions from doctors, patients actively seek to understand treatment options and communicate with doctors about drug choices, bringing new user awareness and business model opportunities to the pharmaceutical retail industry.”

Liu Shuang, Vice President of Guangdong Zhongsheng Pharmaceutical Co., Ltd., pointed out: “Consumer-oriented innovative drugs are a new category that has emerged in the past two years, primarily targeting the self-paying market, which cannot be reimbursed in hospitals, thus the main battleground must be in the external market.”

Regarding the specific channels for the volume of consumer-oriented innovative drugs, Liu Shuang believes the key lies in online channels. He admitted that leveraging the internet and big data for light-asset marketing allows for faster communication, lower customer acquisition costs, and more controllable conversion efficiency compared to traditional offline channels, without the need to establish heavy-asset field teams, aligning more closely with consumer traits that emphasize autonomous decision-making and the importance of user experience.

However, consumer-oriented innovative drugs also have clearly approved indications and are not generic health products detached from clinical value; their essence remains prescription drugs based on medical evidence, but they are more closely aligned with consumer attributes in terms of scenarios, channels, and user access. Therefore, in the commercialization process, it is essential to find a balance between consumer-oriented operations and compliant promotion.

Sun Minghui, deputy director of the pharmacy department at Tongji Hospital affiliated with Huazhong University of Science and Technology, expressed concerns: “Unlike traditional prescription drugs and OTC products, patients have a stronger willingness to choose these drugs independently. However, most consumer-oriented innovative drugs have limited sample sizes in pre-market studies, and many potential severe adverse reactions have not been fully exposed. Once these drugs are widely released in the external market, risks such as drug abuse, dependency from long-term use, and severe rebound after discontinuation may easily occur, with related cases already appearing clinically. Therefore, medication safety and clinical compliance must be an uncompromising bottom line.”

Therefore, Sun Minghui stated that when the external market takes on consumer-oriented innovative drugs, the primary focus must be on ensuring the proper use of drugs, including pharmacists actively inquiring about patients’ allergy history, age, and other basic information, strictly screening for special restrictions such as prohibition for those under 18, clarifying contraindicated populations, and accurately identifying high-risk groups for adverse drug reactions.

“After patients collect their medications, pharmacists should also thoroughly inform them of the correct usage and dosage, comprehensively alert them to possible adverse reactions, including common and rare adverse events, and particularly remind them of contraindications for drug interactions. On this basis, it is also necessary to conduct medication follow-ups for innovative drugs, dynamically assess the safety and effectiveness of the medications,” Sun Minghui said.

(Reporter Shi Shiyun, Caixin News)