The scale and potential of the global medical device market is huge
Starting in 2023, the IMF previously predicted that the global economy would grow by 2% this year, down from 2.7% in 2022. The GDP of all developed economies in the world is declining as a whole. The three major economies of the United States, the European Union and China are showing a slowdown trend at the same time. Among them, only China's GDP will maintain a certain increase in 2023.
International Monetary Fund (IMF) Managing Director Kristalina Georgieva pointed out that 2023 will still be a difficult year, with the global economy still fragile, inflation high and the cost of living crisis not yet over. Almost all economists around the world agree with this.
At the same time, according to the World Health Statistics Report released by the World Health Organization (WHO), in the post-epidemic era, as more and more people avoid or survive infectious diseases, countries with large medical and health expenditures are also facing aging populations. Non-communicable diseases will become the main health risk in many high-income countries. Typical risks include heart disease, dementia and stroke. The number of patients with chronic diseases such as hypertension, hyperlipidemia and diabetes is also increasing year by year.
The epidemic has seriously damaged many economic indicators, and inflation has caused a loss of consumer confidence. However, for the medical industry, the investment in health care in various countries has not decreased. At the same time, the sluggish world economy has led to increased pressure on public health expenditures. How to improve the quality of treatment, reduce medical costs, and improve the uneven distribution of medical resources... Countries around the world are actively planning countermeasures to solve these problems.
As medical devices are just needed in the process of treating patients, it is expected that the impact of the international economic downturn on the procurement of people's livelihood will be limited. According to the estimates of the Medical Equipment Association, by 2028, the global medical device market is expected to reach 760 billion US dollars, with a compound annual growth rate of 5.4%. With the increasing demand for global aging and chronic disease treatment, the global medical device market will continue to grow steadily in the future.
With the development of the epidemic in recent years, Chinese local medical device companies have gradually been accepted and recognized by the global market. As of 2021, the total export value of China's overseas medical devices is 84.73 billion US dollars, a year-on-year decrease of 36.44%, but it still has a substantial increase of more than 75% compared with before the epidemic. Reached a peak, pulling up export figures. We look forward to 2023. With the unblocking of the epidemic, China's medical device import and export trade will accelerate and increase in volume.
The export structure of China's medical devices has also changed. In 2021, medical consumables will still be the largest export category among all medical devices, but the year-on-year growth rate has dropped by 50.4%. The proportion of IVD reagents has expanded significantly, with a growth rate as high as 151.7%.
"Going overseas" is not only a development opportunity for enterprises, but also contains certain challenges.
Global Medical Equipment Market Size and Potential
According to the market analysis of Toubao, it is estimated that by 2025, the market size of the global medical device industry will be nearly 631.2 billion US dollars, and the compound growth rate from 2020 to 2025 is expected to be 5.4%. According to the statistics of the General Administration of Customs of China, the export value of China's medical devices in 2022 will be 478.5 billion yuan. From 2018 to 2022, my country's medical device exports will show an overall growth trend, with an average annual compound growth rate of 10.2%, which is much higher than the import and export of all products in my country during the same period. The growth rate of total trade and gross national product.
From a regional perspective, North America is still the global medical device market, the largest segmented regional sub-market, and the North American medical device market accounts for 32% of the global medical device market. , of which the US medical device market will reach US$186.5 billion in 2022, and remains the largest medical device market in the global medical device market, as well as the largest exporter of medical devices in China. 24.9% of the total.
Followed by the European medical device market, accounting for 24% of the global medical device market capacity. The European Union has become the second largest medical device market after the United States, with a market size of US$169.5 billion in 2022.
Asia-Pacific accounts for 20% of the global medical device market capacity. Among them, China is the second largest medical device market in a single country after the United States. In 2022, China's medical device market will reach US$165 billion. Japan's medical device market ranks second with a size of US$33 billion. It is worth mentioning that India, with a population of 1.4 billion, mainly produces medium and low-tech products. It is known as the "crossroad" in the middle of many manufacturers and trade routes. In 2022, its medical equipment market will reach 11.5 billion US dollars, which cannot be underestimated. watch for.
In terms of products, the IVD industry has been the main force of medical devices going overseas in the past two years, among which POCT companies, molecular diagnostic companies and immune companies account for more than 42% of their overseas business.
Through the above data, it is not difficult to see that Chinese medical device companies will face huge opportunities and challenges in the past, present and future.
my country's medical device industry is booming, and the country frequently promulgates favorable policies for medical devices
According to relevant industry reports, the operating income of my country's medical device industry will reach approximately 1.156 trillion yuan in 2021, a year-on-year increase of 11.24%. In 2022, the operating income of my country's medical device industry will reach about 1.3 trillion yuan, with a growth rate of about 12%. From January to November 2022, my country's total medical device exports will reach 444.179 billion yuan, with a compound annual growth rate of 10.2%. The report also predicts that the compound growth rate of my country's medical device industry will maintain a rapid expansion trend in the future.
In addition, the number of first-time registrations of medical device products has grown steadily. In 2022, NMPA approved a total of 2,172 Class III medical device products for the first registration, of which 1,818 were domestically produced and 354 were imported. Provincial drug regulatory authorities will approve a total of 13,063 domestically produced Class II medical device registrations and 27,117 Class I filing medical devices in 2022. All kinds of data fully demonstrate that my country's medical device industry continues to grow rapidly, and more and more Chinese companies with advanced technology, compliant operations, and sound quality are gradually demonstrating their international influence, and at the same time promote the expansion of the medical device market and domestic substitution accelerate.
According to the reply from the State Medical Insurance Administration, in 2014, the State Food and Drug Administration issued the "Special Examination and Approval Procedures for Innovative Medical Devices (Trial)", and in 2018, after revision and improvement, the "Special Examination Procedures for Innovative Medical Devices" was released. Special approval channels are set up for medical devices that are domestically pioneered, internationally leading, and have significant clinical application value. Relevant departments shall, in accordance with the principles of early intervention, dedicated personnel responsible, and full-process guidance, give priority to innovative medical devices and strengthen communication with applicants on the premise that standards and procedures are not reduced. In 2016, the State Food and Drug Administration issued the "Priority Approval Procedures for Medical Devices", for medical devices listed in major national science and technology projects or key research and development plans, for the diagnosis or treatment of rare diseases, malignant tumors, unique and frequently occurring diseases of the elderly, and for children. Priority approval will be given to medical devices and clinically urgently needed medical devices to promote the listing of such products as soon as possible.
The State Food and Drug Administration stated that the aforementioned two documents have played an important role in encouraging innovation in the medical device industry and promoting the listing of urgently needed medical devices as soon as possible. Qualified related medical devices can apply for accelerated approval according to the corresponding procedures.
In December 2021, the State Food and Drug Administration issued the "14th Five-Year" Medical Equipment Industry Development Plan, proposing to optimize the registration and review process of innovative medical equipment, and to support medical equipment with invention patents and significant clinical application value to enter the special approval channel. Priority approval.
Since 2021, many provinces in China, such as Zhejiang and Guangdong, have successively released the latest version of the "Imported Medical Equipment Purchasing List". Even for equipment that has entered the procurement list, reasonable procurement reasons are required, and domestic competition cannot be restricted. Taking the "Provincial 2021-2022 Public Procurement of Imported Product List (Medical and Health Equipment)" issued by the Sichuan Provincial Government Procurement Network as an example, there are 59 types of medical equipment that can be imported. In Guangdong Province, the number is 46.
For innovative medical devices, the policy level still leaves a certain market space outside of centralized procurement. In September 2022, the State Food and Drug Administration stated in its reply to the representatives of the National People's Congress that in the process of centralized procurement with volume, medical institutions determine the procurement volume based on historical usage, clinical usage and medical technology progress. Since the clinical use of innovative medical devices is immature and the amount of use is temporarily difficult to predict, it is still difficult to implement the method of carrying volume. In the process of centralized procurement with volume, the National Health Insurance Administration will reasonably determine the proportion of volume based on factors such as clinical use characteristics, market competition pattern, and the number of selected companies, and leave a certain market outside of centralized procurement with volume to provide space for innovative products to develop markets .
The domestic medical device industry has grown from being poor to full bloom in various fields, and has gradually broken through core fields and key technologies. In 2023, it will move towards the general direction of realizing domestic substitution, innovation and high-end.
Short boards that must be filled
There is a saying that goes like this: if you don’t do business in the Chinese market, you won’t be big, and if you don’t do business in the global market, you won’t be strong.
In recent years, the involution of the market and the pressure of centralized procurement have forced everyone to go to sea to find a way out and a broader world.
It is already a general trend for medical devices to go overseas, coupled with the catalysis of the new crown prevention and control business. According to Li Xiting, chairman of Mindray Medical, "this makes the international development of domestic brands at least five years ahead of schedule."
indeed so. According to statistics from the General Administration of Customs of China, my country's total medical device exports from January to November 2022 will reach 444.179 billion yuan, and the annual export volume is expected to be 478.5 billion yuan.
But while the export data is growing, we have to face another objective reality. Until today, the medical device products exported by my country are still mainly low-value medical consumables and low-end medical equipment.
Among the 478.5 billion yuan of exported products, the export value of medical consumables is the highest, such as protective masks, masks, diagnostic test strips, etc., with a total of 268.18 billion yuan.
Most of these products have low technical content and low prices, and mainly rely on OEM to generate income. As the risk of new crown infection decreases, the demand for low-value consumables such as protective equipment is gradually falling. In other words, the above-mentioned high sales of low-value consumable products are not sustainable.
In view of the normalization of centralized procurement, going overseas has become an important issue for medical device companies, especially how to convert from the previous field of low-value consumables to high value-added medical devices.
Fortunately, some companies have already embarked on the road of exploration.
For example, United Imaging Medical, although its internationalization rate is not high, its overseas revenue will only account for 7% in 2021, which will not contribute much to the company's revenue, but high-end medical imaging products have successfully exported to overseas.
From the perspective of the entire industry, some high-end equipment fields (such as imaging, surgical robots, gene sequencing, endoscopy, etc.), as the industrial chain is completely autonomous and controllable, it may be a matter of course to go to sea.
Although the global economic downturn in 2023 is a foregone conclusion, challenges and opportunities for Chinese medical devices to go overseas coexist. The deployment of equipment to the sea should start from the access. The earlier it sets sail to occupy the market, the easier it is for the enterprise to be in an advantageous position in the future competition pattern.
According to market demand, more than 55% of enterprises have the need to develop the European market, more than 30% of medical device companies have the need to develop the US market, and more than 10% of the enterprises have the need to develop the Southeast Asian market.