China: Medical
Technology Potentials Are Enormous
Health Industry Summit (CMEF) in
Shanghai opens path to Chinese market, features products for global
distribution.
Is China still a key driver for
world economy? Some market observers underline that growth in 2014 was down to
7.4 per cent – the lowest rate within 24 years. However, this change is well
within the range of the central administration’s policy aiming at sustainable
dynamics. And what is even more important for the medical technology sector: As
of 2013, the Chinese medical technology market sported in excess of 24 billion
US-$ and the world’s highest sector growth rate – 25.9 percent. By 2020, the
administration aims to increase spending in the sector to approx.1 trillion
US-$. These impressive figures provide the perfect backdrop for Reed Sinopharm’s
Health Industry Summit which beckons to medtech stakeholders from around the
world this spring.
The Current Situation Of China’s
Healthcare Reform: According to results presented at the State Council of the
People’s Republic on January 19, the envisaged basic system providing care to
urban as well as rural regions has been established as planned. “The future
target of the country’s healthcare reform is to optimize healthcare resources
enabling residents to receive more effective prevention and clinical treatment
while paying less money out of pocket”, explains the marketing manager of a
large Chinese manufacturer who is active at a global level.
Budgets From The Government: As a
priority, the central government will re-enforce the services capability of
countylevel hospitals, and support implementing a standard of care for community
healthcare institutions. Furthermore, the administration is placing additional
emphasis on strengthening medical IT infrastructure and telemedicine services.
Influences On The Market: The
strengthening of county-level hospitals and community healthcare institutions
will lead to increased demand for medical devices. “Since the government aims at
gradually implementing a system in which community healthcare institutions act
as the patients’ first point of call for acute care, rehabilitation, and nursing
services to reduce the number of outpatient cases in public hospitals, these
institutions will need more diagnostic, rehabilitation, and hospital equipment”,
according to the marketing manager.
Further Drivers In The Market: In
addition, aims of the central administration include installing at least one
hospital with comprehensive services and one traditional Chinese medicine (TCM)
hospital in each county. Also the government encourages the involvement of
social capital in improving medical services, and creation of new non-profit
healthcare institutions is encouraged based on the cooperation of social capital
and public hospitals. The government will support those hospitals built with
social capital to increase their number of beds.
Drivers Of The Medical Devices
Market: In China, currently devices made by Chinese manufacturers are mainly
sold to public hospitals below category III – which is the top hospital category
in the country – and to private hospitals. However, some large innovative
domestic manufacturers have been successful in entering the top category market
thanks to their strong technical and financial resources, impinging on the
monopoly of imported devices category III hospitals.
Regions Make A Difference: Due to
the unbalanced economic development in the various regions of China, healthcare
resources mostly accumulate in the coastal areas, causing a large gap regarding
medical technology and medical services skills between the coast, tier 1 cities,
and the rural west of the country. In that rural area and parts of the under
developed provinces, medical equipments are generally used for a longer period
without replacement. Much of the equipment is comparatively old, and penetration
of high-end and value-added imported devices is low. With the continuous large
investment from both central and local administrations at the basic level of
care, a larger number of county-level hospitals and community healthcare
institutions will refurbish their infrastructure and purchase new medical
equipment. “As far as middle and high-level equipment is concerned, for various
reasons Chinese hospitals still prefer to buy imports. Both domestic and
imported medical equipment will have an opportunity to grow by a large extent in
China in the upcoming years”, explains the manager. Highend medical equipment
used in China is mostly from foreign manufacturers; in the middle-high end range
imports own 80% market share; in the middle to low end sector, imports have 40%
while national manufacturers take 60% of the market, and lowend equipment used
in China comes mostly from national manufacturers.
Features Chinese Hospitals Focus
On: Research and development of medical equipment requires huge staff and
financial resources, with the added difficulty of highly restricted access and
IPR (intellectual property rights) protection similar to the pharmaceutical
industry. According to the marketing manager, roughly 80% of the domestic
manufacturers focus on producing low value-added medical disposables, general
surgical instruments, rehabilitation equipment, home-use devices, and low-end
diagnostic equipment. Products with high value are mainly imports, which leaves
hospitals with little choice.
Summit To Present This Market
Information: From May 15 to 18 in Shanghai, the Health Industry Summit in
Shanghai - previously under the name of China International Medical Equipment
fair (CMEF) – will sport more than 100 conference sessions, with more than half
focusing on various fields of medical technology and market trends. “The
conference portfolio will include the China Integrated Medical Imaging Summit,
the In-Vitro Diagnostics China Summit, and many more”, explains James Wang,
marketing director of the Summit. The China Healthcare Investment Summit – the
key conference - will focus on topics such as China’s Health Reform and
Healthcare Service Development, New Trends in Health Industry Regulations, and
the Creation of the Intelligent Healthcare Ecosystem, drawing top level
participation as business leaders and investors contemplate the next big moves
related to investing in the booming China health market, outlines Wang.
Entering The Market: CMEF has
long been the leading medical equipment event in Asia, Wang goes on to say.
“While sourcing and trading activities may attract the crowds, however, it is
for companies wishing to enter the Chinese market that CMEF plays a vital role:
Finding the best partner and picking the right product suitable for the market
makes all the difference between growing rapidly and losing out”. No other event
in China provides a similar exposure to the thousands of key hospital decision
makers and end users where real trends are shaped, to institutions and R&D firms
where the next big opportunities are defined. Ultimately, underlines Wang, the
needs of the market and the technology benefits shape the opportunities of the
market in China.
International Players At The
Summit: Over 3,000 suppliers and nearly all of the key players in the market are
represented at the show – including, e.g. GE, Siemens, Philips, Mindray, Neusoft,
Toshiba etc. – from the U.S., Japan, Europe, Asia Pacific, and of course China.
New Set-Up Of The Congress And
Tradeshow And Investment Environment: The Health Industry Summit combines the
medical and pharmaceutical value chains into one mega event which explores a
multitude of synergies including distribution, international trade, and
investment opportunities. “Investment in the health sector is on the rise, with
255 investments in the health sector in China worth 19.5 bn RMB from January to
October 2014, representing a major jump in growth compared to 5.3 bn RMB in
2013”, says Wang.
The event comes at the perfect
time when China announces major investments and developments in the health
sector, including in the health services and new technologies in health IT
systems and digital health platforms. “In the context of the envisaged size of
the health industry in the country at 8 trillion RMB by 2020, the central
administration has made steps to speed up licensing and registration for health
food and nutrition products as well as other international technologies in the
medical and pharmaceutical fields. Favourable tax policies on selected product
imports are also on the agenda between key countries and China”, is Wang’s
overview of trends.
International Buyers: More than
10,000 international buyers from more than 140 countries will join the event.
The health industry Summit will effectively combine the world’s largest
integrated health expo (with 280,000square metres of exhibition space and an
estimated 200,000 visitors) with a full Summit program to help the health
industry in China to link up with its international counterparts. The event
looks to be a highly anticipated prelude for larger changes and greater things
to come
in the health sector and the worlds of medical technology and pharmaceuticals.
About the Health Industry
Summit:
Location: Shanghai, China
Date: May 15 to 18, 2015.
Focus: Medical Technology And Pharmaceuticals. Expected audience: 10,000
international buyers, 280,000 square metres of exhibition space, total 200,000
visitors)
Further information: en.cmef.com.cn
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