According to the Zhitong Finance APP, Guojin Securities released a research report stating that the insulin market has returned to a growth trajectory after two rounds of centralized procurement. At the same time, centralized procurement has expanded the coverage of insulin in medical institutions and improved medication penetration rates, laying the foundation for further iterative upgrades of product structures. Insulin weekly formulations represented by icodec/icosema have significant compliance advantages, and the domestic commercialization process is progressing smoothly, which is expected to drive further upgrades of domestic insulin product structures. In the context of normalized centralized procurement, formulations with strong innovative attributes and a favorable competitive landscape are expected to contribute greater value to enterprises, and it is recommended to continue paying attention to investment opportunities related to corresponding domestic new drugs.

Guojin Securities' main viewpoints are as follows:

Centralized procurement promotes the improvement of domestic insulin penetration rates, and the market size will return to a growth channel starting in 2024

The results of the first round of centralized procurement for insulin began to be implemented in May 2022, having a profound impact on the domestic insulin market:

1. Volume/Price: The average price reduction of selected products in the first round of centralized procurement for insulin was 48%, significantly improving medication accessibility. Before centralized procurement, the annual usage of insulin in public medical institutions nationwide was about 250 million units; after procurement, the usage of selected insulin reached 650 million units in 22 months, with an average annual usage of about 350 million units, an increase of nearly 40%.

2. Scale: Due to the price reduction, the market size of China's insulin market was approximately 21.4 billion yuan in 2022 and 18.7 billion yuan in 2023, a year-on-year decline of 21% and 12%, respectively. Starting in 2024, with the price reduction from centralized procurement driving insulin usage and the further stabilization of the price system following procurement, the domestic insulin market size is expected to resume growth, reaching approximately 20.6 billion yuan by 2025.

The follow-up centralized procurement will be implemented in May 2024, and after rule optimization, the insulin price system is expected to remain stable. Considering the essential nature of insulin, the domestic insulin market size is expected to maintain continuous growth in the future due to factors such as changes in the age structure of the population and improved medication penetration rates.

Non-procurement products support the performance of leading insulin companies during the procurement period, and the commercial value of innovative varieties needs to be emphasized

Novo Nordisk occupies nearly half of the insulin market in China. Due to adjustments in the price system and changes in procurement reporting, the sales revenue of its products within the procurement scope has declined from 11.013 billion Danish kroner in 2020 to 4.858 billion Danish kroner in 2025, a year-on-year decrease of 56%. However, thanks to the rapid growth of three non-procurement products: degludec/aspart, liraglutide, and icodec, its domestic insulin business revenue in 2025 is expected to decline by only 10% compared to the peak in 2020. Before the first round of centralized procurement, degludec/aspart and liraglutide were the only products of their kind available in the domestic market and were not included in the procurement. In 2025, the domestic sales revenue of these two products is expected to be 2.964 billion and 1.792 billion Danish kroner, respectively, with non-procurement insulin products accounting for 51% of Novo Nordisk's domestic insulin revenue. The key factor in the competitive landscape until the end of 2027 will be whether products are included in centralized procurement, and the value of innovative varieties from insulin companies needs to be emphasized icodec/icosema opens the era of weekly insulin formulations, focusing on investment opportunities in domestic innovative drugs

1. Novo Nordisk's icodec is the world's first approved weekly basal insulin formulation, showing significant advantages in efficacy and patient adherence compared to daily formulations. icodec will be included in the national medical insurance catalog in 2024, with rapid commercialization in the Chinese market, achieving nearly 310 million yuan in sales revenue for the entire year of 2025. Besides icodec, the only other weekly insulin formulations entering phase 3 clinical trials globally are Efsitora (Eli Lilly) and GZR4 (Gan & Lee), indicating a favorable competitive landscape; among them, GZR4 had a 2-3 grade hypoglycemia event rate of only 2.4%/6.3% in phase 2 clinical trials, lower than that of icodec (non-head-to-head); in phase 3 clinical trials, it significantly outperformed daily formulations in achieving the clinical indicators of HbA1c <7.0% or ≤6.5% for blood glucose control without clinically significant (grade 2) or severe (grade 3) hypoglycemia, potentially offering better safety than icodec.

2. The combination formulation of basal insulin and GLP-1RA can simplify treatment regimens, effectively lower blood sugar, and reduce adverse reactions related to weight gain and hypoglycemia risks associated with insulin therapy. The representative product, degludec insulin liraglutide, is expected to generate nearly 2 billion yuan in domestic revenue by 2025. Icosema is expected to be approved for domestic market launch in March 2026, being the first combination weekly formulation; GZR102 is the first domestic combination weekly formulation, with its GLP-1 component showing superior blood sugar-lowering effects compared to semaglutide in phase 2 clinical trials, possessing me-better potential.

Risk Warning

Risks of research and development progress not meeting expectations, risks of commercialization progress not meeting expectations, and risks of intensified competition