Top 10 Opportunities in the Medical Device Industry 10 Trends

[Source] Jianbang Jinyuan

With the development of society and economic progress, the medical device industry is also developing rapidly. So what are the opportunities and challenges facing China's medical device companies today?

Eight opportunities and challenges

Analysis and summary of the development of China's medical device industry at this stage can summarize the opportunities and challenges faced as follows:

1. National policy environment is conducive to industry development

Intensive introduction and implementation of various policies in 2017-2018, a good regulatory environment has allowed the industry to feel the arrival of the "best era"; in 2015, the policy puts emphasis on "combination of medical care"; 2016 "Healthy China 2030" The introduction of the National Health and Wellness Conference raised “Healthy China” into a national strategy; in 2017, “Made in China 2025” was implemented to accelerate the transition from a manufacturing power to a manufacturing power. In particular, the establishment of innovative medical device review and approval, the establishment of the MAH system, etc., the policy is hugely beneficial, and the future development of the industry is full of expectations.

2. The market continues to expand

In the past five years, China's medical device industry has maintained a compound growth rate of about 15%. It is expected that the growth rate of China's medical device industry will remain above 10% annually in the next 10 years. The ratio of sales of medical devices and pharmaceuticals in China is currently about 0.25: 1, the future is expected to further enhance, in this round of medical equipment "golden development period", meeting or exceeding the 1:1 goal of developed countries is not a fantasy.

3, the new medical reform stimulates the rapid growth of low-end devices

Since the new medical reform, market increments and equipment production and management companies from the middle and low-end medical consumables, POCT, grassroots laboratories and other fields have paid more and more attention to the grassroots market, which has already shown changes in the market. In the primary medical market equipment and in 2018 Consumables “renewing” and “filling gaps” remain trends.

4, domestic independent innovation equipment continues to emerge

In recent years, the state has successively introduced incentive policies for domestic medical devices, and good policy incentives have made the domestic medical device industry inspiring and developing rapidly. It is foreseeable that in the next 3 to 5 years, there will be a large number of domestically produced innovative medical device products. The advent of many medical practices will change due to the emergence of new technologies and new products.

5. Import and export continue to increase

The data shows that the changes in international market demand and the guidance of China's “One Belt, One Road” policy have led to unexpected results in exports, and the momentum is good. With the improvement of China's scientific and technological level, the structure based on "low value" will also undergo an inevitable change.

6. Accelerated mergers and acquisitions in the industry

In the field of circulation, mergers and acquisitions represented by Sinopharm, Shanghai Pharmaceutical, Jiuzhoutong, Ruikang Medicine and other enterprises have arisen one after another. The horizontal and vertical mergers and acquisitions of production enterprises are also in the ascendant, stirring the overall industry structure. We have reason to believe that this trend will continue, and Some regional leading enterprises will also join the tide of mergers and acquisitions, and cross-border mergers and acquisitions are on the rise.

7, home equipment flourish

According to the data, the current market size of home medical equipment is about 75 billion yuan, with an annual growth rate of 25%. Diagnostic monitoring instruments, such as traditional sphygmomanometers, blood glucose meters, stethoscopes, etc.; therapeutic equipment, such as home personal hemodialysis machines; rehabilitation equipment, such as medical beds, intelligent workstations, etc., all performed well, and there have been many Based on the Internet's new intelligent products, the country's "Internet + Medical" related documents will be promoted in 2018, which will promote the launch of new products based on "Internet +".

8. The rise of third-party services

According to projections, the medical device service market will have a market capacity of 100 billion yuan; medical imaging, testing, blood purification, and pathology will remain the main areas of "third-party", medical asset management, maintenance solutions, cost packaging, etc. There will be more and more third-party service models, and emerging three-party intensive service models such as logistics platforms and disinfection will also emerge.

The top ten development trends in the future

Looking into the future, China's medical device industry has shown ten significant development trends:

1. The medical device industry is eye-catching in the new cycle of economic development. With the advent of the new national economic cycle; the government's reform of the large-scale system has redefined the responsibilities of various government departments, and various policies have also carried out responsibilities for R&D, registration, procurement, production, distribution, sales, quality, and agency. Repositioning. The pilot and implementation of the Medical Device Licensing Holder System (MAH) clarifies the responsibility of product holders from the perspective of “responsibility”, and the industry is facing unprecedented opportunities.

2. With the implementation of the Healthy China Strategy and the implementation of “Healthy China 2030”, the big health industry will lead China's new wave of economic development in the future, and medical devices will play a huge role in it; in the future, the medical health industry will face unprecedented Opportunities and challenges, the medical and health industry based on "big health, great health, and great medicine" is expected to become the fastest growing industry in the development of the national economy and become the pillar and new impetus for China's economic development.

3. Policy and industrial planning will guide the concentration of the medical device industry, and mergers, reorganizations and integration will intensify in the next two to three years, and the concentration will increase rapidly. The medical device industry as a whole is more dispersed, and will tend to be concentrated in the future. With the implementation of the “two-vote system”, “battalion reform and increase”, “94” and “industry rectification” policies, and the new GSP for enterprise procurement, acceptance, storage, Regulations such as distribution will make higher requirements, industry consolidation will intensify, and concentration will increase rapidly in the next 2-3 years.

4. With the advancement of the supply-side structure reform in the medical industry, the “inventory” will be further cleared. The new supply will bring new demands, and the industry will face tremendous changes. After nearly two years of efforts, the drug supervision system actively solves the backlog of approvals. Accelerate the approval of innovative devices, crack down on clinical trial data fraud, process consistency check, etc., eliminate medical device zombie approvals; increase flight inspection efforts, eliminate backward production capacity with low technical level and high product repeatability, and “small, scattered, poor, A chaotic business enterprise. Eliminate the old marketing model through the "two-vote system" and GMP/GSP flight inspection. From the supply side to reform, a new supply of units can bring new demand for N units, which will accelerate the progress of the industry.

5. The state's supervision of the industry is becoming more and more strict. If the non-standardized enterprises are eliminated, the industry market environment will gradually improve; the large-scale flight inspection will eliminate the unhealthy trend of the industry. In 2018, the intensity of policy compliance control has increased, standardizing operations and finance has become a test of traditional marketing models, and the fight against monopoly, administrative intervention, and commercial bribery has continued to exert its strength. We assert that compliance companies are the hope of the future, illegal enterprises will gradually be eliminated, and the industry environment will gradually improve.

6. New technologies can create efficiency and save costs for medical service organizations and patients, and enable medical device companies to play a broader role in prevention, diagnosis, treatment and care. We predict that in the next 3 to 5 years, the medical device industry will introduce a large number of innovative products, and traditional diagnosis and treatment will be fundamentally subverted.

7. “Internet +” will be closely integrated with the medical device industry. The degree of informatization of the whole industry will be generally improved. The information of the products can be traced back, and the whole process of medical device production and circulation will be supervised by means of information technology. With the advent of the 5G era, the Internet of Everything will greatly enhance the wide application of medical devices. At present, the information traceability mechanism, system and coding in the field of medical devices are still not perfect and need to be further improved.

8, in the market and clinical applications will spawn a new "drug + device integration" model. Drugs and devices play a synergistic role in the diagnosis and treatment of medical institutions and patient health care. In recent years, some manufacturers have explored a fusion marketing model of “pharmaceutical-integration” and achieved success, such as Lepu Medical, AstraZeneca, etc. Some pharmaceutical commercial enterprises are also looking for breakthroughs in the development of devices, forming a model of "drugs + devices common development".

9. Capital assists the development of the medical device industry across the board. The merger and reorganization of international and domestic equipment fields is in the ascendant. In 2018, capital is developing in the direction of high-quality investment, giving unlimited power to the development of medical device enterprises.

10. Artificial intelligence application services will develop rapidly. Breakthroughs will be made in artificial intelligence technology, medical robots, large medical equipment, emergency medical equipment, bio-three-dimensional printing technology and wearable devices. On April 25, 2018, the "Opinions on Promoting the Development of "Internet + Medical Health"" (Guo Ban Fa [2018] No. 26) was issued by the General Office of the State Council, clearly proposing: "Promoting the 'Internet +' artificial intelligence application service. Research and development of clinical diagnosis and treatment decision support system based on artificial intelligence, carry out intelligent medical image recognition, pathological typing and multidisciplinary consultation, and application of intelligent speech technology under various medical health scenarios to improve the efficiency of medical services"; "Strengthen clinical and scientific data integration Sharing and application, supporting the development of medical health-related artificial intelligence technologies, medical robots, large medical equipment, emergency medical equipment, bio-three-dimensional printing technology and wearable devices." From the policy level, it provides a guarantee for the development of artificial intelligence medical care.

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