Major trends in oral medicine: Centralized procurement, medical care, supervision, who is the master?
Recently, the General Office of the National Health Commission, the Office of the National Healthcare Security Administration, the General Office of the Financial Supervision Administration, and the General Department of the NMPA issued the Notice on Further Promoting the Management of Oral Medical Services and security (hereinafter referred to as the Notice).
March 1, 2023, the Office of the National Healthcare Security Administration issued the Notice on Doing a Good job in 2023 Centralized Medicine Procurement and Price Management, announcing the focus of 2023 centralized procurement work, medical devices involving hard brain (spinal) membrane patch/hernia repair consumables, neurosurgical consumables, IVD, stapler, ultrasonic knife, dental implants and other more than 10 types of products.
Since 2022, changes in the field of oral medicine are accelerating, not only involving consumer medical products such as oral implants and orthodontics, but also affecting medical care policies and consumables markets.
#01 Centralized procurement is changing the consumer healthcare landscape
Centralized procurement is no longer limited to the scope of medical care, and its extension has penetrated into consumer medical fields such as oral medicine.
High gross profit consumer medical products such as growth hormone, dental implants, invisible orthodontics, and OK lenses have been included in the collection category. Under the normal development of collection, the medical field involving the burden of people’s livelihood may be charged in the future.
Dental centralized procurement: In August 2022, the Office of the National Healthcare Administration issued a notice requiring medical institutions at all levels, including private hospital institutions, to explicitly participate in the price investigation and registration of oral dental implant services for the first time. This work covered procurement alliances in 31 provinces and municipalities across the country.
Centralized procurement of orthodontic brackets: In October 2022, Shaanxi Provincial Public Resources Trading Center issued an announcement to carry out centralized procurement of orthodontic brackets in 15 regions including Shaanxi, Shanxi, Inner Mongolia, Liaoning, Heilongjiang and Xinjiang. On December 19 of the same year, Shaanxi Province announced the results of the proposed centralized procurement. 739 products of 49 enterprises entered the on-site competition (negotiation) price link, and 572 products of 32 enterprises were to be selected. The centralized procurement cycle is 2 years, and the purchase demand in principle shall not be less than 70% of the actual use of the previous year.
#02 Oral consumables centralized procurement and price adjustment
The centralized procurement of oral medicine not only affects the selection of products, but also has an obvious impact on the price.
- Price cut for centralized procurement：
Oral consumables such as dental implants and orthodontic materials begin to land in 2023, bringing a significant price drop. For example, the average price of dental implants dropped to more than 900 yuan, and the lowest selected price was only 548 yuan, a decrease of 55%. Orthodontic materials bracket consumables average price reduction of 43.23%, the highest reduction of 88%.
2. Use of selected products:
For the use of oral consumables, the relevant notice requires priority procurement of selected products, and it is linked to the reward and punishment system. This is expected to push more medical institutions to choose the right products and reduce treatment costs.
#03 Oral health care is expected to be covered by medical care：
The interpretation of the Notice pointed out that “optimize the price of medical services and medical care policies，do a good job in the price control of oral medical services, optimize medical care policies, support and encourage commercial insurance to play an active role, and effectively reduce the burden of medical treatment for the masses.”
There are some specific policy statements on whether oral health care is covered by medicalcare.
- Principles of medical care inclusion:
According to the relevant contents of the Notice of the National Healthcare Security Administration on Doing A Good Job in the Payment Management of Medical Consumables for Basic Medical Care issued on September 5, the access and management of medical consumables for basic medical care should always firmly adhere to the functional positioning of “ensuring basic”. “In principle, medical consumables with low clinical value, prices or costs far beyond the affordability of the fund and patients, and non-therapeutic rehabilitation equipment shall not be included in the scope of medical care payment.”
#04 Performance of the Dental Medical Market
By the end of 2022, the market size of China’s oral medical industry has increased to 170.4 billion yuan, an increase of 13.1% compared with 2021. Referring to the historical situation, the compound growth rate is expected to exceed 12% from 2022 to 2025, and it is expected that by the end of 2025, the market size of China’s oral health care industry is expected to grow to 270 billion yuan, which shows that China’s oral health care industry market prospects are broad.
However, due to the high technical threshold of dental implants, China’s dental implant market is monopolized by imported brands all year round, and the localization rate is only 6.8%. In China’s oral implant market, imported brands account for more than 90%, and domestic brands are about 10%. According to the data, in 2020, South Korea Osstem occupied the first place in China’s market, followed by Dentium, and the third market share was the Swiss brand Strauman.
On January 11 this year, the oral implant system centralized procurement was opened in Sichuan, resulting in a proposed selection result. The average price of selected products dropped to more than 900 yuan, an average decrease of 55% compared with the median purchase price of pre-centralized procurement. This centralized procurement gathered the demand of nearly 18,000 medical institutions across the country, reaching 2.87 million sets of implant systems, accounting for about 72% of the annual number of domestic implants (4 million).
However, after the centralized procurement, although the market share of European and American brands declined, the share of Korean brands increased, and domestic brands did not break through. In other words, under the restrictions of clinical use habits and recognition, domestic substitution in the field of dental implants will take time. To sum up, oral medical centralized procurement, price adjustment and medical care policy adjustment are pushing the oral medical market towards a more standardized and transparent direction.
At the same time, industry supervision is also being strengthened to crack down on improper practices. In this multi-dimensional rectification background, the “good money” of the oral health care market still could obtain better development.
China is encouraging China end uses for more domestic products in latest years. Thus, more and more overseas manufacturers are planning localization in China. BradyKnows localization team has extensive experiences in facility establishment, audit, supplier evaluation, manufacturing, registration, and marketing in China. Pls feel free to let us know any questions on China entry via info@bradyknowsmedical.com
Source：Medical Device Market
Translated & edited： Bradyknow
