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China has become the world’s second largest medical device market with an average growth of 20 per cent year-on-year. However, this rapid growth has not kept up with strong demand driven by an increasingly aging population and a growth in the number of affluent consumers who seek better quality medical services.
China’s medical device market has grown tremendously over the last five years. Accounting for about 20% of the world’s population, wealthier upwardly mobile citizens demanding better healthcare, and more efforts by the Chinese government to provide healthcare to its citizens, there is no end in sight to this market growth.
However, as the market has grown, so have the pitfalls. Registration that was relatively easy five years ago in China is now a lot tougher and slower, and requires much more documentation. A dramatic increase in the number of tenders and volume based procurement (VBP) has reduced prices significantly.
Reimbursement of new products takes time, has bureaucratic barriers, and is generally geared to locally made products only. Finally, while intellectual property issues have gotten better, it is still not easy for foreign companies to win in China’s court system.
While VBP of devices has been primarily focused on the cardio and orthopedic sectors to date, there is no way to determine how many other device products will encounter huge price drops in the future. To avoid such situations, foreign device companies need to focus their business in China on new state-of-the-art medical technologies that the Chinese people need. Registering these new products on a timely basis is crucial to success.
China also encourages the development of private insurance. Given the reality that reimbursement for many products and services is very low, it is advisable to consider cooperating with private insurance companies that have enrolled a lot of wealthy people and families whose healthcare needs are obviously higher than those of the average person in China.
Given the size and growth rate of the Chinese medical device market, there are still plenty of opportunities for foreign companies to make profits. Some foreign companies are increasing their exports or are setting up manufacturing or joint venture manufacturing operations to make products in China, for the Chinese market.
The real danger for the foreign players is that local rivals steal a march on them. Hospitals withholding orders thanks to the anti-corruption reform may limit Western firms’ ability to keep introducing new device updates to maintain their competitive lead, allowing others to catch up. Domestic brands, which have historically lagged in the advanced end of the medical device market, took the whole of last decade just to hike their share from around 20% to 30%.
Any object intended for medical use is, in general, considered a medical device. These tools aid in patient diagnosis and treatment, enhancing quality of life and assisting patients in overcoming disease or illness
There are possible hazards involved with the use of medical devices and thus these goods must be proved to be safe and effective with restrictions put in place by organizations and governments around the world.
The amount of testing that is typically necessary before a gadget is authorized to be used increases in proportion to the risk that the item poses. However, it is also true that the potential benefit to the patient increases with risk.
China is one of the world’s largest medical device manufacturing hubs, and foreign multinational companies dominate the market, with China currently importing over 70% of medical devices.
There are three general classifications for medical devices in China Class I: “low risk” medical devices, which are safe and effective when administered routinely (e.g., surgical clothing and caps).Class II: “medium risk”(e.g., thermometers, and electrocardiogram (ECG) machine).Class III: “high risk” medical devices, (e.g., implants, ultrasound scalpel, hemodialysis machine).
Regulation for the Supervision and Administration of Medical Devices, following which a number of implementation regulations have been issued by the China Food and Drug Administration (CFDA), the key regulator of China’s pharmaceutical and healthcare industry. These include the Provisions for Supervision and Administration of Medical Device Manufacturing, the Provisions for Supervision and Administration on Medical Device Distribution and the Provisions for Administration of Medical Device Registration.
Through the intensification of its Healthy China 2030 strategy, the Chinese government is continually working to improve the health of its citizens. International businesses are encouraged to ship to China their cutting-edge medical technologies and equipment for disease prevention and treatment that local MedTech enterprises are unable to offer.
Since April 2021, the Chinese government has worked on a medical technology five-year plan (2021–25), aiming to make at least six Chinese companies reach the top 50 revenue-making medical device companies globally. Currently, there are four Chinese companies in the top 100, but none in the top 50.
The China Medical Devices market accounted for $XX Billion in 2023 and is anticipated to reach $XX Billion by 2030, registering a CAGR of XX% from 2024 to 2030.
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