The opportunities of medical devices in China
Contents related to medical and health in the report of the 20th National Congress of the Communist Party of China(CPC):
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We will establish a family support policy system and implement a national strategy to actively respond to the aging population.
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We will improve the public health system, strengthen the prevention, control and treatment system for major epidemics and build emergency response capacity, and effectively curb the spread of major infectious diseases.
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To build the world’s largest education system, social security system and medical and health system.
The construction of the world’s largest health system contains a huge demand
China’s huge population base and demographic problems require the establishment of the world’s largest health care system. As one of the two countries with a population of one billion in the world， China naturally has the largest potential demand for health care.
On the one hand, China’s population structure is prominent, which urgently needs to strengthen the construction of the medical and health system. According to the 2020 census data, the proportion of elderly people aged 60 and above in China has reached 18.70 percent, while the proportion of those aged 14 and below is as low as 17.95 percent. It is urgent to encourage fertility and cope with aging, which requires the construction of a comprehensive medical and health system covering the birth and death of people.
On the other hand, China’s medical and health consumption level is still far lower than that of developed countries. With the improvement of Chinese people’s living standards, the medical and health industry will face more demands for consumption upgrading. The people urgently need a stronger and more perfect medical and health system, and the medical consumption level is expected to approach that of developed countries.
Health system construction urgently needs medical “new infrastructure”
The construction of the public health emergency system has received much attention, and grass-roots medical facilities urgently need to make up for weaknesses. The report of the Twentieth National Congress again mentioned “improving the public health system, strengthening the system of prevention, control and treatment of major epidemics and building emergency response capacity”. The COVID-19 epidemic has attracted unprecedented attention to the construction of the public health emergency system.
The epidemic situation exposed the current situation of insufficient total medical resources and unbalanced distribution of China’s disease prevention and control weakness. Specifically:
First, the per capita number of ICU beds in China is far lower than that in developed countries. According to OECD data, the number of ICU beds per 100000 people in China is 4.5 in 2020, far lower than that in developed countries in the same period, such as Germany (28.2) and the United States (21.6).
Second, the total amount of medical and health resources is insufficient ，and the quality needs to be improved. In 2021, the proportion of China’s medical and health expenditure in GDP is 6.5%, the average value of OECD countries is 8.8%, while that of the United States is as high as 18%, which is still a big gap.
Third, the resource distribution structure is unreasonable. In space, there is a big gap between the development of medical resources in the east and the west, and high-quality medical resources are concentrated in coastal areas; Structurally, tertiary hospitals undertake many medical activities, and the supply of high-quality medical resources is insufficient.
In this context, after the epidemic, relevant departments issued a series of policies to encourage the sinking of high-quality medical resources represented by tertiary hospitals and guide the construction of grass-roots branches of tertiary hospitals.
In May 2022, the State Office issued the Opinions on Promoting Urbanization Construction with County Town as an Important Carrier to promote the upgrading and transformation of county-level hospitals (including traditional Chinese medicine hospitals), support counties with a certain population to improve county-level hospitals and promote the achievement of tertiary hospital facilities and service capabilities.
In May of the same year, the National Development and Reform Commission, the National Health Commission and others jointly issued the Work Plan for Orderly Expansion of the Construction of National Regional Medical Centers, orderly expanding the construction of national regional medical centers, basically completing the nationwide planning layout by the end of 2022, and striving to cover all provinces in the country in the construction of national regional medical centers.
Judging from the current results, the number of new hospital projects that were suppressed before the epidemic has recovered significantly, hitting a new high for two consecutive years. At the same time, the growth rate of completed fixed asset investment in both the health industry and the pharmaceutical manufacturing industry reached the peak at the beginning of 2021, and then fell back. However, the growth rate of fixed asset investment in the health industry remained relatively high, significantly higher than the growth rate of fixed investment in the pharmaceutical manufacturing industry, indicating that the construction of the medical and health system remains high.
Medical devices may continue to benefit
On the one hand, the new medical infrastructure is the general trend of the construction of the national medical system, and related enterprises such as medical special projects, medical equipment, and medical informatization will also benefit one after another; At the same time, in the post epidemic era, the global public health construction will be strengthened to adapt to the new wave of medical infrastructure. The construction of medical engineering and the supporting medical equipment of relevant departments will continue to scale up, which will also provide development opportunities for domestic medical device products to go overseas. The internationalization process of the medical device industry will continue to accelerate.
On the other hand, policy factors will also increase the demand for localization of medical devices. For example, the state encourages the priority purchase of domestic devices, and reduces the barriers to entry for high-quality domestic products. DRGs/DIPs put forward higher requirements for hospital cost control capabilities, and financial subsidized loans will be used to update and transform medical devices. The national demand for hundreds of billions of medical devices will be released soon, and the medical device industry will continue the boom period of high market demand.
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
By Must-read for Machinery Companies
Translated & edited | Bradyknows
