From the overall situation of the third-quarter report, the performance of the A-share pharmaceutical and biological sector in the first three quarters of this year does not seem very satisfactory. However, in the author's view, the huge social health demand, combined with continuous efforts from policies, supply side, and market side, makes the development potential of the pharmaceutical and biological industry limitless.

　　On one hand, the optimization of the policy environment is an important guarantee for the pharmaceutical industry to overcome growth difficulties. In recent years, the national level has successively introduced multiple policies aimed at accelerating the review and approval process of innovative medical devices, providing a favorable development environment for pharmaceutical and biological enterprises.

　　At the same time, policies are continuously releasing development dividends. For example, the General Office of the State Council recently issued the "Several Measures to Accelerate the Improvement of the Fertility Support Policy System and Promote the Construction of a Fertility-Friendly Society," which encourages the research and development and application of pediatric drugs; strengthens the research and application of reproductive health technologies, etc. The previously released "Action Plan to Promote Large-Scale Equipment Renewal and Consumer Goods Trade-In" by the State Council shows that by 2027, investment in equipment in medical and other fields will increase by more than 25% compared to 2023. The introduction of these policies is expected to bring incremental markets to the pharmaceutical and biological industry.

　　On the other hand, technological innovation is the core driving force for the sustainable development of the pharmaceutical and biological industry. With the rapid development of a new round of biotechnologies, such as gene editing and cell therapy, the pharmaceutical and biological industry has also ushered in new development opportunities.

　　The author notes that with the arrival of an aging society, there are still huge unmet clinical needs in the field of disease treatment in China. Pharmaceutical and biological enterprises actively embrace technological innovation by strengthening cooperation with universities, research institutes, and others, continuously investing in research and development in major diseases such as malignant tumors, cardiovascular and cerebrovascular diseases, Alzheimer's disease, and rare diseases. Enterprises investing real money into R&D and innovation have also laid a solid foundation for maintaining a good development trend in the future.

　　In addition, innovation in market models is helping pharmaceutical and biological enterprises move toward broader markets. Currently, from the perspective of online and offline channels, with the support of technologies such as big data and artificial intelligence, the pharmaceutical e-commerce model is reshaping the pharmaceutical sales pattern. Pharmaceutical and biological enterprises are actively exploring new models integrating online and offline channels, achieving innovation and expansion in market and service models. From the international market perspective, some pharmaceutical and biological enterprises have already been focusing on overseas market layout, evolving from initial raw materials and generic drugs to large-scale innovative technologies and innovative products "going global." The pharmaceutical and biological industry’s "going global" has entered a "high-level" stage. With the enhancement of industry competitiveness, the overseas market is expected to continuously bring performance growth momentum to enterprises.

　　Looking at a longer timeline, the fundamentals of the development of China's pharmaceutical and biological industry are steadily improving. For example, from the demand side, as China's aging population deepens, the market demand for medical services, drugs, devices, nursing, and other aspects related to disease treatment is expected to continue growing. From the payment side, in recent years, China's total health expenditure as a percentage of GDP has been continuously increasing, reaching 7.2% in 2023, and there is still considerable room for improvement compared to some developed countries. These factors strongly support the long-term positive outlook for China's pharmaceutical and biological industry.

　　The author believes that the vitality of the pharmaceutical and biological industry's development is accelerating to be activated, and enterprises need to seek new balances and opportunities in innovation development, demand exploration, cost control, and market expansion. Only in this way can they maintain vigorous development vitality in this era full of challenges and opportunities.