Study: Chinese medical devices replace developed countries’ products
- New breakthrough in CAR-T cell therapy: Lupus erythematosus patients achieved treatment-free remission for up to 17 months
- Is the new COVID Omicron variant BA.4.6 more contagious?
- How long can the patient live after heart stent surgery?
- First time: Systemic multi-organ recovery after death
- Where do the bacteria in the human gut come from?
Study: Chinese medical devices replace developed countries’ products.
In recent years, with the technological advancement of Chinese medical device enterprises and the maturity of the supporting industrial chain, as well as the promotion of national policies such as medical reform, graded diagnosis and treatment, and support for Chinese-made equipment, the Chinese medical device industry is expected to usher in a decade of rapid development.
Replacing imported products from developed countries with medical equipment made in China is the main theme of device development in the next ten years.
Looking back on the successful experience of substituting imported products, China will realize import substitution in more areas in the next five to ten years.
Tracing the successful experience in the field of import substitution
At present, Chinese-made medical equipment has gradually broken through a number of technical barriers, and has basically realized import substitution (more than 50% of Chinese-made medical equipment) subdivisions include:
1) Cardiovascular stents, cardiac occluders, artificial meninges, trauma and spinal products in implantable consumables;
2) Monitors, DRs, etc. in large and medium-sized medical equipment;
3) Biochemical diagnosis in the field of in vitro diagnosis;
4) Oxygen generators and blood pressure monitors in household medical equipment.
Experts believe that import substitution will still be the main theme of China’s medical device development in the next ten years, and this process needs to be accompanied by the innovation and upgrading of China’s own technology. By tracing the successful experience in the field of import substitution, it has a strong guiding significance for the future development direction of the sub-fields where China has not achieved import substitution
● Cardiovascular stent: complete import substitution in four years
Before 2004, China’s coronary stent market was basically dominated by imported products, and many multinational giants such as Johnson & Johnson, Medtronic, and Boston Scientific accounted for more than 95% of the market. Following the launch of Minimally Invasive Medical’s first Chinese-made drug-eluting coronary stent in 2004 and Lepu Medical’s second Chinese-made drug-eluting coronary stent in 2005, Chinese-made drug stents have gradually gained a place in the Chinese market.
According to the statistics of the Surgical Implant Professional Committee of the China Medical Device Industry Association, the market share of Chinese stents reached 59%, 65%, and 70% in 2006, 2007, and 2008 respectively, completely breaking the monopoly of the drug stent system industry by foreign companies situation. In 2008, the top six companies in China’s coronary stent system market share were MicroPort Medical, Lepu Medical, Shandong Jiwei, Johnson & Johnson, Boston, and Medtronic, which together accounted for approximately 93% of the market share, among which Chinese manufacturers are increasingly taking up Competitive Advantage. As of 2017, Chinese product brands Lepu, MicroPort and Jiwei accounted for 24%, 23%, and 20% of the heart stent market, respectively, accounting for 67% of the total market share, while Abbott, which has the highest share of imported brands, only had 13% , Chinese product brands began to dominate the heart stent market.
Tracing the process of import substitution of cardiovascular stents, after more than four years, Chinese companies have successively achieved breakthroughs in core technologies. With their price advantages, they have broken the monopoly of foreign-funded products in the Chinese market, changed the competitive landscape, and become the current China A small number of high-end medical devices that have won foreign brands and promoted the progress of the Chinese industry.
The Chinese-made heart stents can quickly realize import substitution in the short term, mainly due to the following reasons:
● Excellent product performance
Chinese stents are similar to foreign products in terms of drug and carrier selection and drug release technology; process technologies such as polishing and drug coating are close to or even exceed the international advanced level in some aspects; in terms of stent design, size specifications, ease of operation, and stent compatibility The integration of the delivery system can better adapt to the clinical needs of Chinese patients. Clinical studies have confirmed that Chinese-made coronary stents and imported stents have similar safety and effectiveness.
● Products made in China are cost-effective
In terms of product price, the unit price of imported drug stents in 2008 was between 159,000 and 19,300 yuan, while the unit price of stents made in China of the same quality was between 1.08 and 10 million yuan. Patients using Chinese products can save 1/3 compared to foreign equivalent products. About the cost of medical equipment, Chinese products have a greater price advantage. In recent years, due to the rise of Chinese-made cardiac stent products, the market price of imported brand cardiac stents has fallen by more than half.
● Comprehensive coverage of sales channels for Chinese products
In terms of product coverage, the products of foreign companies are mainly concentrated in economically developed areas such as Beijing, Shanghai, Guangdong and other places, while Chinese companies have entered all provincial, municipal and some county-level hospitals except for the above areas.
Taking Lepu Medical as an example, at the end of 2017, the company achieved full coverage in all provinces across the country, especially the 10 major provinces of high-value consumables such as Guangdong, Beijing, Henan, and Hebei, which are still in the period of heavy supply. For key customers in some regions, the company also adopted a direct sales strategy. In addition, the company has also created a closed-loop sales channel, that is, by establishing a cardiovascular cooperation center with primary hospitals, directly providing equipment, cardiac stents and medicines to these medical institutions, and other brand products cannot compete. It is through the multi-channel sales model that the company’s product sales have increased rapidly.
The competitive landscape of China’s cardiovascular stents was basically formed in 2009, and has remained stable since then. During the period 2005-2009, Chinese manufacturers enjoyed the dual drive of high industry growth and import substitution.
Taking Lepu Medical as an example, the compound growth rate of stent use in China from 2002 to 2008 was 40%, and the compound growth rate of use of Lepu Medical stents from 2005 to 2008 was 161.1%, which was higher than the industry growth rate.
In 2012-2014, due to the slowdown in the industry growth rate, the company’s original product price reduction pressure increased. The new product Nano+ was launched in 2011, but the volume has not been increased, resulting in the company’s 2012-2014 stent revenue growth rate in single digits. Even negative; after 2014, the company’s stent business resumed its upward trajectory, with a compound growth rate of 19.5% from 2014 to 2017. In 2017, it achieved revenue of 1.171 billion yuan, a year-on-year increase of 21.4%.
Changes in the future competitive landscape of cardiovascular stents mainly rely on the launch of biodegradable stents.
The blockbuster product “Bioabsorbable Coronary Artery Rapamycin Eluting Stent System” (NeoVas) independently developed by Lepu Medical officially obtained the medical device registration certificate approved by the National Medical Products Administration (NMPA) on February 27, 2019 , Is China’s first approved biodegradable stent, and is another milestone in China’s innovative medical device field.
From the perspective of time point, considering that Abbott has ceased sales, similar products of major competitors (MicroPort Medical, Lifetech, etc.) are still in the research stage, and NeoVas will take the lead in seizing the market and is expected to gain more than two years of first-mover Advantages, leading the market application and technological development of the fourth-generation cardiac stents. We estimate that biodegradable stents are expected to occupy more than 10% of the Chinese stent market in the next 3-4 years.
● Monitor: Chinese manufacturers led by Mindray promote the completion of import substitution
The monitor is a device or system that monitors the patient’s physiological parameters (such as body temperature, respiration, blood pressure, heart rate, pulse rate, etc.), can be compared with known set values, and sends out alarms when there is an excess. At present, the global medical monitor suppliers mainly include Philips, GM and Mindray Medical, and the market is oligopolistic.
The Chinese market is mainly divided into three echelons. Mindray Medical is the absolute leader in the industry, occupying 64.80% of the market share; the second echelon is represented by Philips; the third echelon is represented by Libang Instruments and Baolight enterprise.
The process of import substitution of monitors is inseparable from the development of electronic technology, computer technology, communication technology and biomedical engineering technology in the past two decades.
From the past mainly used for the monitoring of critically ill patients, to the current monitoring of general wards, from the beginning it was only used for anesthesia, ICU, CCU, ER and other departments, and has now expanded to neurology, brain surgery, orthopedics, respiratory, and obstetrics Departments, neonatology, and other departments have been equipped only by large hospitals at the beginning, and now they are widely used by county-level and even township medical institutions. Chinese-made monitors have played an important role in them.
Looking back at the development process of Chinese-made monitors, it started late and can be roughly divided into three stages:
The first stage-imitating foreign monitors, the industry started
Chinese monitors started late, around 1990-2000. Prior to this, Chinese monitors had almost no software concept and were completely unintelligent. The monitor at this stage is based on a single-chip microcomputer and has simple software, mainly imitating foreign models, and mainly imitating functions. The parameters have been modularized. China’s supporting industrial chain is not mature. Representative manufacturers include Zhuhai Lan Di, Baolight, Shenzhen Mindray Medical, Anke, etc.
The second stage-China’s independent manufacturing, performance breakthrough
The monitor at this stage is based on PC and has complex software. When the problem of parameter modularization was basically solved, a general-purpose personal computer PC hardware platform was used, and software was written in a high-level language. For the first time, the monitor had an operating system, and a great breakthrough in performance.
The extensive use of programmable devices and flash memory devices has greatly accelerated the speed of softwareization of hardware functions. At the same time, the emergence of suppliers who specialize in providing functional modules and complete sets of materials for other manufacturers has greatly reduced the production threshold of monitors, and therefore Chinese manufacturers have begun to emerge in large numbers. Representative manufacturers include Shenzhen Mindray, Jinkewei, Beijing Jingbo, Chaosi and so on.
The third stage-take the network as the core, realize the network
At present, many hospitals in China have achieved informatization, that is, they have clinical information system (CIS). As a monitor that undertakes the role of patient information collection, it also needs to be seamlessly connected to the hospital’s local area network. The patient’s physiological information obtained through the monitor can be transmitted to various places in the world via the Internet.
At present, the market share of monitors made in China has reached more than 60%. We believe that this number will continue to rise in the future. The production of monitors in China has greatly reduced the price and maintenance costs of imported products. Taking Mindray Medical, which has a market share of 65%, as an example, we believe that the key factors for the replacement of imported monitors made in China are mainly as follows:
Early technology start and large R&D investment
At the beginning of its establishment, Mindray was mainly engaged in the agency sales of foreign brand medical equipment. After early capital accumulation, the company began to cut into the research and development and manufacturing of medical equipment. In 1992, it developed China’s first blood oxygen saturation monitor. Subsequently, it continued to invest in research and development for technological upgrades and product updates. Since its establishment, Mindray has invested about 10% of its sales revenue in research and development every year.
The company’s monitors currently contain 9 series, with models covering portable, plug-in and remote control, etc., providing a full range of differentiated products, which have unique advantages for high-end handheld and central monitoring systems. In view of the relatively low professional quality and lack of experience of grassroots medical staff, Mindray will not hesitate to sink some high-end intelligent modules into low-end products to achieve “one-key” operation. The products are welcomed by the grassroots hospital market.
Timely mergers and acquisitions to create a globally competitive brand terminal
After 2000, large-scale mergers and acquisitions occurred in the global monitoring market, such as GE’s acquisition of Marquette’s monitoring business, Philips’ merger of HP’s monitoring business, and the survival of second-tier monitor manufacturers have been excluded. In this context, Mindray acquired Datascope’s vital information monitoring business for US$202 million in 2008, becoming the world’s third largest monitor manufacturer. Through this acquisition, Mindray not only obtained advanced foreign technology, but also expanded its presence in Europe and the United States. The market has gradually entered the stage of transnational operation, which has greatly enhanced the company’s strength in the global market and has also played a role in promoting import substitution in China.
Comprehensive distribution network coverage, to create an all-round, full-time and full-process after-sales service system
The company has more than 2,600 marketing staff. In China, the company mainly uses distribution methods for sales. The company prepared for the “two-invoice system” two or three years ago, and the policy risk of the sales network has been greatly reduced. After-sales service is also one of the company’s core competitiveness. The company has established an all-round, full-time, and full-process after-sales service system. It manages the entire service process with the help of the industry’s leading CRM customer relationship management platform, from providing a single service product to providing a whole Service solutions enhance customer stickiness and provide support for continuous product push and follow-up services.
●Biochemical diagnosis: starting from reagents, gradually completing import substitution
China’s IVD market generally shows a pattern of stagnant growth in the low-end market, rapid increase in volume in the mid-end market, and gradual expansion of the high-end market. We call it the “olive” market structure of IVD here. In the “olive-type” IVD market structure, the low-end enzyme immunoassay market has completed import substitution, and high-speed growth is fading away;
Chinese companies are limited by their weak instrument research and development capabilities, and will be able to perform high-end testing (such as flow cytometry, complete The competitiveness in the field of genome sequencing, etc.) is still relatively weak;
in the field of biochemical diagnosis, the performance of Chinese-made automatic biochemical analyzers has caught up with the level of imported products, and has a considerable price advantage. At present, the market share of China’s production exceeds 70%. , Which has basically completed import substitution, is the gold market segment in the past 5 years.
Roche, Danaher, Siemens and Abbott account for nearly 50% of the global in vitro diagnostic market. In the Chinese biochemical diagnostic market, international giants only account for about 30% of the market, and the proportion of Chinese production reaches 70%, but Chinese companies There is no degree of concentration, and their respective market shares are low. Major companies include Mindray Medical, Kehua Biology, and Jiuqiang Biology.
Reviewing the process of biochemical diagnosis to achieve import substitution, Chinese IVD companies mainly have certain advantages in the following aspects:
From reagent cutting to instrument-reagent integration
In the international market, Roche, Johnson & Johnson, and Beckman all develop supporting reagents based on their own instruments. In the 1990s, after imported brands entered the Chinese market, due to the high production cost of imported biochemical reagents and customs quarantine procedures, the price of imported biochemical reagents was very expensive, which brought opportunities for Chinese chemical reagent manufacturers.
Under the demand of hospitals to reduce the cost of reagents, some imported brands such as Abbott, Hitachi, Toshiba, etc. have adopted an open platform strategy to sell open automatic biochemical analyzers, that is, Chinese manufacturers can produce matching reagents, so biochemical Diagnostic reagents have become the entry point for many Chinese manufacturers to enter the field of in vitro diagnostics.
For example, Kehua Bio’s early growth relied on its excellent performance in the field of diagnostic reagents. After foreign companies entered the Chinese market in large numbers, the company followed the industry development trend, focused on biochemical analyzers, created an automated diagnostic instrument research and development technology platform, and gradually promoted the instrument And the development of “serialization” and “integration” of reagents.
If Chinese products are to achieve large-scale import substitution, they must be able to achieve (or at least approach) the technical performance of imported products at low prices. This also requires companies to have strong product research and development capabilities (especially instrument research and development capabilities). ). Mindray Medical, Kehua Biotechnology and other Chinese companies, whose biochemical analyzer technology and performance have basically caught up with the level of multinational companies, and thus have been recognized by downstream professional customers, can they achieve effective import substitution in the biochemical diagnostic market