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China’s Medical Devices Market is Expanding
Author:   Source   Date:Jun,13,2014   Browse:9302   
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The past 5 years witnessed an annual compound growth rate of 23% in China’s medical equipment market,  increasing from $4.9 billion in 2007 to $14 billion in 2012. It ranks as the fourth largest market in the world, just behind the US, Japan and Germany. The annual increase rate of Chinese medical equipment market is expected to be around 20% in the next 5 years and the market will reach $35 billion.


State policies exert huge influence over the importof high-value medical equipment as explained below.


First, Chinese health policies tend to be "low level, wide coverage”, which directs the national health spending on basic medical cares.Multinational companies and their distributors should therefore take this aspect into account when expanding their market share.


Second, the National Development and Reform Committee (NPRC) will pose price markup on high-value added consumables and this will cause a direct impact to the profitability of such imported products. Manufacturers are actively reacting to such measures and American’s Advanced Medical Technology Association (AdcaMed) is also discussing with the NPRC on establishing a more effective and rational pricing mechanism.


Thirdly, provisions about centralized purchasing issued by Ministry of Health not only mount pressure on the price of high-value products, but also increase manufacturers’ workload. Third, regulations by the Ministry of Health on centralized procurement at provincial levels not only poses pressure to high value products, but increases the workload of manufacturers.


Last, independent innovation is the core issue of China’s Twelfth Five-Year Plan. The government encourages domestic enterprises to strengthen R&D capabilities and competitiveness,and leads transnational companies building R&D centers in China. Reforms in medical insurance payments, such as payment for individual disease and classification of diagnosis-related diseases, are under discussion and experiment, which will influence the decisions made by doctors and patients.


Currently, almost all multinational medical equipment manufacturers are focusing on tertiary hospitals in first and second tier cities, with little or no experience in other cities and hospitals. Under such circumstances, to maintain rapid business expansion, it is imperative for these manufacturers to expand their current portfolios to cities and hospitals at low levels.


Source: CINIC

Time: June 12th 2014

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