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Development status of China's medical device industry in 2022

 Last Update: 2023-02-01
 Source: Internet
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2022 is an extremely important year
in the process of the development of the cause of the Party and the country.
The century-old changes and the pandemic of the century continue to be intertwined, and the global medical and health industry continues to be tested
.
China's medical device industry has maintained a good trend of innovation and development on the road of high-quality development: the industrial scale continues to grow high, the development quality has reached a new height, innovation and development have taken new steps, and international competitiveness has been upgraded to a new level, showing the strong resilience
of the development of China's medical device industry.

01.
The industrial scale continues to grow rapidly

First, the scale of China's medical device industry continues to grow rapidly

According to the analysis of the Southern Institute of Pharmaceutical Economics (hereinafter referred to as the Southern Institute), the operating income of China's medical device industry (above and below the regulations) will reach 1.
156 trillion yuan in 2021, a year-on-year increase of 11.
24%, from 629.
7 billion yuan in 2015 to 1,156 billion yuan in 2021, with an average annual compound growth rate of 10.
65%, which is higher than the overall manufacturing growth level
in China.
In 2022, the operating income of China's medical device industry is expected to reach 1.
3 trillion yuan, with a growth rate of about 12%, which is significantly higher than the overall growth rate
of the pharmaceutical industry.
New crown detection reagents are the main force driving the growth of the industry, China's epidemic prevention and control nucleic acid testing normalization, new crown nucleic acid detection reagents and antigen detection reagents exported to the international market in large quantities, promoting the performance of related enterprises to grow
significantly.
In addition, the promotion of new medical infrastructure and the "Thousand Counties Project" has promoted the expansion of the medical equipment market and the acceleration
of domestic substitution.

Figure 1: Operating income and development trend of China's medical device manufacturers

Data source: National Bureau of Statistics, Ministry of Industry and Information Technology, Southern Institute of Medical Economics

Second, the number of first-time registrations of medical device products has developed steadily

The number of first-time registrations of Class III medical device products in China increased significantly, maintaining double-digit growth for two consecutive years, reaching 1,844 in 2022, a year-on-year increase of 63.
04%.

After the number of first-time registrations of Class II medical devices in China exceeded 10,000 in 2020, it has remained at a level of about 10,000 in the past three years, far exceeding the pre-epidemic level of 6,000, reaching 13,334 in
2022.
The number of new filings for Class I medical device products in China reached 29,807 in 2022, higher than the pre-epidemic level
.
In terms of the distribution of subdivisions, in 2022, the two fields of in vitro diagnostic reagents and passive implantable devices with the largest number of first-time registrations of medical device products in China accounted for 17.
2% and 21.
7% respectively, which together accounted for 38.
9% of the number of first registrations
of all products.

Third, the number of medical device manufacturers in China has exceeded 30,000

In the past three years, under the influence of the new crown epidemic, the number of medical device manufacturers in China has grown rapidly, exceeding 30,000 in 2022, reaching 31,503 as of September 2022
.
From the perspective of the production of medical device product categories, the number of enterprises that can produce first-class medical device products is 19,025, which is growing rapidly; The number of enterprises that can produce Class II medical device products is 14,119, with steady growth; The number of enterprises that can produce three types of medical device products is 2412, with rapid growth; The ratio of the three is about 8:6:1, which is the same as the
previous year.

Fourth, the number of operating enterprises exceeded 1.
1 million

As of September 2022, the number of medical device trading enterprises in China reached 1.
16 million
.
In recent years, medical device operating enterprises have grown at a double-digit rate, exceeding 1 million in 2021, reaching 1.
08 million, a year-on-year increase of 20.
88%.

The continuous expansion of the scale of medical device business enterprises has also promoted the vigorous development
of the overall industry.

02.
The quality of development has steadily reached a new high

First, the growth of total profits has slowed down

In 2021, the total profit of China's medical device manufacturers above designated size was 102.
1 billion yuan, a slight decrease compared with 2020, but still a substantial increase
of nearly 1 times compared with before the epidemic.
In 2021, the total operating profit of China's listed medical device enterprises will be 87 billion yuan, a year-on-year increase of 11.
36%, which is a substantial increase
of more than 2 times compared with before the epidemic.

Second, the operating profit margin has increased significantly compared with before the epidemic

The profit margin (total profit ÷ operating income) of medical device manufacturers above designated size in China increased from 9.
49% in 2015 to 12.
80% in 2019 and 17.
45% in 2020; In 2021, it was 15.
07%, a slight decrease, but there is still a relatively significant increase
compared to before the epidemic.

Third, the degree of industrial concentration has been continuously enhanced

The operating income of China's medical device manufacturers above designated size increased from 424.
1 billion yuan in 2015 to 677.
1 billion yuan in 2021, accounting for about
60% of the overall operating income of the industry.
In 2022, the number of listed medical device enterprises in China reached 163, a year-on-year increase of 15.
60%, and the previous two years were growing at a rapid rate
of 30%.
In 2021, the operating income of China's listed medical device enterprises reached 332.
4 billion yuan, a year-on-year increase of 18.
82%.

The revenue scale of listed companies increased from 16% in 2017 to 29% in 2019, of which the proportion of the top 20 listed companies in the overall industry size increased from 7% in 2017 to 16% in 2021, and the two proportions have continued to grow
in the past five years.
This fully shows that the development trend of the head enterprises is good, and the industry concentration is increasing year by year, which is in line with
the development goal of "further increasing the concentration of leading enterprises in the industry" proposed in the "14th Five-Year Plan" for the development of the pharmaceutical industry.

03.
New steps in innovation and development

First, the system of regulations and standards has been improved

Accelerate the construction of supporting systems of the Regulations on the Supervision and Administration of Medical Devices, and introduce a series of rules and regulations
such as the Measures for the Supervision and Administration of Medical Device Production and the Measures for the Supervision and Administration of Medical Device Business.
As of December 31, 2022, there are a total of 1,919 medical device standards in China, covering all professional and technical fields of medical devices in China, and the degree of consistency with international standards has reached 90%.

Among them, there are 260 national standards and 1659 industry standards; There are 284 mandatory standards and 1635 recommended standards
.

Second, the development of innovative medical devices has accelerated

In 2022, the State Food and Drug Administration approved 55 innovative medical devices, a year-on-year increase of 57.
14%.

Since 2014, the State Food and Drug Administration has approved a total of 189 innovative medical devices, and more innovative high-tech medical devices are rapidly benefiting the people, continuously meeting the growing health needs of the people, and becoming a strong driving force
for the high-quality development of the industry.

Third, the number of new product development projects of high-tech enterprises has increased significantly

In 2021, the number of new product development projects of medical device high-tech enterprises in China was 15,962, a year-on-year increase of 28.
39%.

In the past three years, the new product development projects of the high-tech industry of medical devices have increased
significantly at a rate of about 30%.

Fourth, the overall R&D intensity showed a stable and slightly increased trend

In 2021, the R&D intensity of China's listed medical device enterprises was 6.
39%, and it has remained above 6% in recent years; In 2020, the R&D intensity of China's medical device high-tech industry was 3.
97%, maintaining a level of nearly 4% in recent years, higher than the average level
of 2.
5% in the overall high-tech industry.

04.
Enhance international competitiveness to a new level

First, the scale of import and export of medical devices has steadily increased

In 2021, the import and export volume of China's medical device products was 872.
439 billion yuan, a year-on-year decrease of 24.
50%.

Among them, the import value was 324.
385 billion yuan, a year-on-year increase of 10.
63%, continuing to maintain a good growth trend; As the demand for epidemic prevention medical device products in overseas markets tends to stabilize, the export value is 548.
054 billion yuan, down 36.
44% year-on-year, but there is still a substantial increase
of more than 75% compared with before the epidemic.
As of November 2022, the import and export volume of medical devices in China was 743.
857 billion yuan
.
Among them, the import value was 299.
678 billion yuan, and the export value was 444.
179 billion yuan
.
Affected by the new crown epidemic, the global demand for medical device products to fight the new crown epidemic is strong, and China's medical device import and export has increased a step
compared with the overall scale before the epidemic.

Second, China ranks second in the world's second largest medical device market

Stimulated by the new crown epidemic, China's medical device market has expanded rapidly, showing an increasingly important position
in the global medical device market.
According to Frost & Sullivan's data, in 2021, the market size of the global medical device industry is expected to reach 3,407.
4 billion yuan, a year-on-year increase of 8.
15%.

According to data from the Southern Institute, in 2021, the size of China's medical device market will be about 1,156 billion yuan, the growth rate is about 1.
5 times the growth rate of the global market, and the market share is close to one-third of the global market, and China ranks the second largest medical device market
in the world after the United States.

Third, the international influence of Chinese medical device enterprises continues to expand

More and more Chinese enterprises with advanced technology, compliant operations and sound quality are gradually demonstrating their international influence
.
According to the 2022 Top 100 Global Medical Device Companies list released by the foreign website Medical Design & Outsourcing, two Chinese companies have successfully entered the list, namely Mindray Medical, ranked 32nd, and MicroPort, ranked
77th.
In 2022, the first WIPO Global Awards were presented to five innovative SMEs, including Chinese medical device company Suzhou Ruipening, demonstrating the innovation trend
of Chinese medical device enterprises in the international competitive environment.

05.
The comprehensive development index of the industry has been steadily improved

The "14th Five-Year Plan" started well, and the comprehensive development of the industry and the satisfaction of the public were at a high level
.
In 2021, the comprehensive development index (NFI index) of China's medical device industry was 336 points, an increase of 76.
5 points
over the end of the "13th Five-Year Plan" period.
Among them, the scale efficiency sub-index fell slightly, to 50.
2 points, down 3.
6 points from 2020; the innovation and development sub-index continued to maintain a rapid upward momentum, at 148.
5 points, up 46.
6 points from 2020; the industrial ecology sub-index remained flat, 5.
3 points, an increase of 0.
2 points; and the international competition sub-index rose steadily, at 131.
8 points, up 33.
2 points
from 2020.
The research report of the Southern Institute (a project of the China Drug Administration Research Association) shows that the public satisfaction of medical device safety in China is at a high level, indicating that the end-use link has generally good
feedback on the safety of medical device products.

(Note: [1] Project of China Drug Administration Research Association)

China Medical Device Industry Comprehensive Development Index (NFI Index)

06.
Suggestions for strengthening supervision work

First, further deepen the reform of "decentralization, management and service"

Increase policy guidance and optimize services
.
Set a reasonable transition period for newly issued regulations, standards and guidelines, strengthen publicity before implementation, strengthen guidance during the event, monitor implementation, and optimize and adjust
in a timely manner.
Give full play to the innovative role of the two sub-centers of medical device technical review and inspection of the State Food and Drug Administration, explore the trial implementation of the pre-review and exchange system of registration review materials, and establish communication channels
on clinical applications, key technologies or raw material verification and confirmation before product declaration.

The second is to strengthen the innovation of supervision methods

Strengthen scientific supervision and supervision of medical devices, accelerate the transfer and transformation of scientific and technological achievements, and strengthen the investigation and evaluation
of the implementation of policies and regulations and their implementation effects.
Strengthen the construction of regulatory informatization, establish a unified basic data public data pool, build a national integrated online regulatory data sharing platform, and realize real-time sharing and effective use
of regulatory data throughout the regulatory chain and product life cycle.
Strengthen the capacity building of network monitoring, improve the ability of grassroots supervisors to deal with violations of laws and regulations in online sales, dig deep into clues of violations of laws and regulations, strive to handle more major and important cases, and increase the deterrent effect
of supervision.

The third is to continue to strengthen research on policies, regulations and industrial economy

Adhere to good law and good governance, and adhere to the systematic, holistic, coordinated and timeliness
of regulatory legislation.
Continue to improve public awareness and understanding of policies, and strengthen the source governance
of regulations and standards.
Strengthen research on the regional distribution of the medical device industry, the characteristics of technical fields and the industrial chain, and improve the scientificity
of the overall supervision of resource allocation and industrial layout.
Do a good job in real-world data application research, continue to promote the formulation of relevant guidelines and requirements, and promote the application of
real-world data in product registration and supervision.

Fourth, strengthen cross-departmental communication and coordination

Strengthen cross-departmental policy consultation and cooperation on product naming, management classification, and coding, so that there are rules to follow, orderly and orderly, and problems are discovered and timely adjusted
.
Strengthen cross-departmental information sharing and joint inspection and law enforcement of leads on violations of laws and regulations, and strengthen case investigation
.
Establish an inspection resource sharing mechanism, and provide technical support
in areas such as medical device attribute identification and product quality inspection to friendly neighboring departments.

Fifth, expand and deepen international exchanges and cooperation

Actively participate in international regulatory exchanges and cooperation, coordinate with multilateral unified review and inspection standards and result recognition mechanisms, and promote regulatory convergence
in multilateral regions, especially countries and regions along the "Belt and Road.
" Encourage enterprises to participate in the policy formulation of international standards and regulatory regulations, and jointly strengthen comparative research on domestic and foreign laws and regulations; Enhance the international recognition, influence and discourse power of China's medical device standards, tools and methods
.

Sixth, multiple measures should be taken to promote social co-governance

Encourage industry associations and leading enterprises to carry out and participate in the research and revision of policies, regulations, technical specifications, group standards, and recommended standards, give full play to the leading role of industry associations and leading enterprises, and accelerate the development of
new technologies and new formats.
Promote the establishment of creditworthiness, guide enterprises to carry out production and business activities in accordance with law, expose typical cases of violations of laws and regulations in accordance with law, strengthen popular science publicity for consumers, increase the public's awareness of the safety of using equipment, and enhance the public's scientific cognitive ability
.

(The author of this article is the director of the Southern Institute of Pharmaceutical Economics of the State Medical Products Administration)

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