Inventory of the hot areas of domestic substitution of medical devices, which industries are already gaining momentum?

The realization of domestic substitution has always been an enduring topic in China's medical device field, and it has also been the development plan and goal of many sub-fields

Recently, the Ministry of Finance and the Ministry of Industry and Information Technology jointly issued the "Guiding Standards for Government Procurement of Imported Products Auditing Guidelines" (2021 version) notice outflow, which clearly stipulates the proportion of government agencies (institutions) purchasing domestic medical devices and instruments

Among them, 137 medical devices require 100% purchase domestically; 12 medical devices require 75% purchase domestically; 24 medical devices require 50% purchase domestically; 5 medical devices require 25% purchase domestically

In recent years, relevant policies have been providing support for domestic substitution of medical devices

On the other hand, the policy is gradually strengthening the standards for the procurement of imported medical devices.

Some policies related to the development of domestic medical devices since the beginning of this year

As early as 2007, the Ministry of Finance issued a notice on the "Administrative Measures for Government Procurement of Imported Products", mainly to promote and promote the implementation of independent and innovative government procurement policies, and to regulate the government's purchase of imported products

Since the beginning of this year, Zhejiang Province, Guangdong Province, and Sichuan Province have successively launched the latest imported medical equipment procurement lists.

From the low-end to the high-end, the next step for domestic substitution

Under the continuous promotion of policies, more and more high-quality domestically produced devices have entered the market, and the market share of domestic brands has also continued to expand.

As can be seen from the above figure, in recent years, the number of domestically approved Class II and Class III devices has been on the rise as a whole.

It can be seen that the number of domestic Class II devices approved is far greater than the number of imported Class II devices, indicating that in the field of low-end devices, domestically produced devices have basically replaced them, and the number of domestic Class III devices has not only gradually increased, but also the overall number.

The five categories of in vitro diagnostic reagents, passive implantable devices, infusion, nursing and protective devices, neurological and cardiovascular surgical devices, and medical imaging devices have been ranked among the top five approved.

Which areas have achieved domestic substitution?

Judging from the approved data, domestic substitution in most of the subdivisions of medical devices in China has begun to accelerate or even achieve domestic substitution.

IVD-Biochemical Diagnosis

Biochemical diagnosis is one of the earliest in vitro diagnostic sub-sectors in China.

Compared with other sub-fields of IVD, the technical barriers of biochemical diagnostic reagents are lower

Monitor

The development process of domestic monitors also corresponds to the growth history of Mindray to some extent

Coronary stent

In 1998, coronary stents began to be widely used in China.

In 2004, Minimally Invasive Medical launched the first domestic drug-eluting coronary stent, and then Lepu Medical and Jiwei Medical’s new products were launched successively.
With excellent technical performance and relatively cheap prices, domestic coronary stents began to grow rapidly.
Amount
.
According to statistics from the Professional Committee of Surgical Implants in China’s Medical Device Industry, the market share of domestic stents reached 59%, 65%, and 70% in 2006, 2007, and 2008, respectively.
Domestically produced alternatives
.
In addition to the above-mentioned fields, DR, cardiac occluders and other fields have also achieved excellent results in domestic substitution
.
Summarizing China's experience in the subdivision of equipment that has achieved domestic substitution, it can be seen that technology, cost performance, and brand are the magic weapons for domestic enterprises
.
In addition, in this process, most companies choose to launch products before the formation of the domestic competition pattern, forming a first-mover advantage, quickly seizing the market, and becoming the first echelon of domestic products
.

Domestic replacement, what are the next anchor points?

Although the development momentum of China's medical device market has not diminished in recent years, and has become the world's second largest medical device market, it is undeniable that there are still many subdivisions in China's medical device field that are dominated by imports
.
In this regard, Arterial Network analyzed the number of domestic and imported products of the three types of devices approved in the first half of 2021 and the main types of imported products, trying to analyze the status of domestic substitution in different fields, and looking for the next competition that is expected to complete localization in the future.
Tao
.

By analyzing the situation of domestic and imported three types of equipment approved in the first half of 2021, it can be seen that imported products in the fields of active implantation equipment, ophthalmic equipment, medical imaging surgical equipment, and active surgical equipment still occupy an important proportion.
In the field of implantable devices, imported products far exceed domestic products
.

1.
Active implantable device: ICD implantable cardioverter defibrillator

Among the 10 imported active implant devices approved in the first half of this year, about half were ICDs
.
According to the definition, ICD is an electronic device that is implanted in the chest cavity of a patient and connected to the heart through a vein through a defibrillation lead, which can automatically recognize and promptly terminate malignant ventricular arrhythmias
.

ICD has both defibrillation and pacing functions.
When the patient's heartbeat is fast, the ICD can be converted to normal heart rhythm through high-energy electrical pulses; when the patient's heartbeat is slow, the ICD can restore the heart rhythm to normal through low-energy electrical pulses
.
Reasonable use of ICD can correct tachyarrhythmia, reduce the incidence of sudden death, and prolong the life of patients
.
A number of clinical proofs have shown that ICD is the best treatment method to prevent sudden cardiac death
.
But at the technical level, ICD is a high-tech achievement that closely combines modern clinical cardiac electrophysiology with pacing technology and modern microelectronics technology.
Its product system integration is complex, and it has extremely high requirements for timeliness, effectiveness and safety.
It also has the pacing function provided by the pacemaker, so it is recognized as one of the three types of active implanted medical devices with the highest technical threshold and the highest R&D risk in the industry
.
Although the clinical application value of the product is obvious, the penetration rate of ICD in China is not high.
According to the data reported by the Arrhythmia Intervention Quality Control Center of the National Health Commission, the number of ICD implants in mainland China in 2018 was 4,471, which is much lower than that of European and American countries.
The amount of ICD implantation in some European and American countries
.

High cost becomes an important obstacle to the popularization of ICD

Price is an important reason for the low popularity of ICD equipment in China
.
At this stage, there are two types of ICDs commonly used in clinical practice.
The general price is between 60,000 and 80,000, and the price of some products is as high as 100,000 to 150,000.
Although part of the cost can be reimbursed by medical insurance, it is still a huge expense for ordinary families
.
Moreover, China's ICD field has not yet formed a clear treatment reference guide, and there are insufficient market education.
These reasons are also important factors that limit the development of China's ICD implantation volume
.
In addition, there are some hidden dangers in the later application and promotion of ICD
.
In April of this year, Medtronic voluntarily recalled ICD products for battery reasons, with a level of level one
.
Prior to this, companies such as Boston Scientific and St.
Jude (acquired by Abbott) have also carried out voluntary recalls of ICD products
.
As the three types of devices implanted in the body, the safety of the ICD is extraordinarily important
.

Which domestic companies are involved in the high-barrier ICD field?

In terms of the market, China's ICD field is in a state of import monopoly, and there is no domestically produced ICD product on the market
.
According to the "2019-2023 China implantable cardioverter defibrillator (ICD) market analysis feasibility study report", the current domestic ICD market is mainly occupied by brands such as Boston Scientific, Medtronic, Biotorch, and St.
Jude
.
Under the import monopoly, some domestic brands have begun to try to deploy in this difficult area of ​​research and development, and strive to seize the market with original products
.
As early as 2014, MicroPort Medical and Sorin (a heart rhythm management business under LivaNova) established a joint venture company "Creation Leading Heart Rhythm Management" to jointly develop, produce and market heart rhythm management devices (including pacemakers, ICDs, CRTs, etc.
)
.
In 2015, Chuangling Heart Rhythm Management launched the PLATINIUMTM series of implantable defibrillators.
This product has the world's longest life of 14.
3 years, which can reduce the risk of frequent ICD replacement.
The overseas market has received good responses
.
In 2018, MicroPort Medical announced that it had jointly completed the acquisition of Sorin with Yunfeng Fund.
Since then, MicroPort Medical has a complete CRM (cardiac rhythm management) product line
.
Another company with a layout in the field of ICD is Wushuang Medical from Suzhou
.
Since its establishment in 2017, Wushuang Medical has always focused on the R&D and industrialization of the three types of active products in the CRM field, while using ICD as the entry point
.
It is understood that Wushuang Medical’s first-generation ICD products have entered the registration inspection process and have declared innovative medical devices
.
2.
Medical imaging surgical equipment: endoscope

In the field of medical imaging surgical instruments, the number of domestically approved surgical instruments actually exceeds that of imported ones, but the approved products are more concentrated in CT and MRI
.
Among the 18 imported three-category medical imaging surgical instruments approved in the first half of this year, endoscopes accounted for an important proportion
.

Since the advent of the 19th century, endoscopes have continued to develop and are now used in gastroenterology, respiratory, general surgery, otolaryngology, orthopedics, urology, gynecology and other departments, becoming important medical diagnosis and treatment equipment
.
So far, the endoscope has developed four generations of hard-tube endoscopes, semi-flexible endoscopes, fiber endoscopes and electronic endoscopes
.
Electronic endoscopes have become the mainstream of the market due to higher imaging quality
.
At this stage, due to the increasing clinical demand for minimally invasive treatment, endoscopes for minimally invasive surgery have once again ushered in a good opportunity for development
.
According to data released by Evaluate MedTech, the global endoscope market sales reached US$20.
9 billion in 2019, and will continue to grow at a compound annual growth rate of 6.
3% in the next five years, and reach US$28.
3 billion in 2024
.
However, the development of domestic endoscopy and minimally invasive treatment is relatively late, and the development of domestic endoscope companies has been hindered to a certain extent.
At present, the domestic endoscope market is still dominated by imported brands
.
According to the "China Medical Device Industry Development Report 2019", overseas giants such as Karl Storz, Olympus, Stryker and other overseas giants occupy more than 90% of the market share of endoscope hard lenses, and there is huge room for domestic substitution
.

Gradually master the core technology and bring opportunities for the localization of endoscopes

For devices with high technical barriers such as endoscopes, achieving breakthroughs in core parts and technologies is obviously the top priority of localization
.
It is understood that the core components of the endoscope include the lens, image sensor, image processor, and light source
.
At present, domestic companies have achieved breakthroughs in core components such as image processors and light sources, which have become a strong support for the localization of endoscopes
.
In terms of image sensors, with the rise of CMOS image sensor technology, the original CCD image sensor technology has begun to be replaced
.
Compared with CMOS, CDD manufacturing is more difficult, the core technology is restricted by foreign giants, and the price is higher.
CMOS not only has relatively low technical barriers, but also has low energy consumption and low noise.
Its application is the localization of endoscopes.
Here comes the opportunity
.
With the deepening of technology, endoscopes have merged with many innovative technologies, materials and processes, and have developed in the direction of miniaturization, multi-function, and high-quality images, and many innovative categories have been derived therefrom
.
At this stage, three-dimensional endoscopes, disposable endoscopes, and capsule endoscopes are all the products with high attention in the market
.

Three-dimensional endoscope: the image effect is more intuitive

In terms of imaging, 3D and 4K are more intuitive and clearer than conventional endoscopes, and are currently the focus of technology research and development of most manufacturers.
Among them, three-dimensional endoscopes can restore the advantages of natural vision to a certain extent and are synthesized by image processors.
The latter image has a three-dimensional effect, which makes the anatomical level of the observed picture more obvious, which is conducive to improving the efficiency of the operation
.
Just this year, Weigao Robot’s 3D laparoscopic endoscopy was successfully approved.
Subsequently, Suray Medical and Minimally Invasive Medical have successively obtained NMPA approvals for 3D electronic laparoscopic endoscopy.
Results
.

Disposable endoscopes: Endoscopes become consumables, five companies are approved by NMPA

Traditional endoscopes are difficult to thoroughly clean and disinfect due to their complex structure, which also leads to the risk of cross-infection when the same endoscope is used between different patients
.
Disposable endoscopes have emerged as an effective solution to this problem
.
Disposable endoscopes not only perform well in solving the problem of cross-infection, but there is no loss of the endoscope for one-time use, which can ensure that the endoscope is in the best condition every time the package is unpacked, which improves the efficiency of the operation to a certain extent.

.
According to incomplete statistics, there are currently 5 domestic enterprises in the field of disposable endoscopes that have obtained NMPA registration certificates, and their products have been recognized by market regulators
.

Approval status of domestic disposable endoscope NMPA (partial)

Capsule endoscopy: convenient operation, solving the pain points of traditional gastrointestinal endoscopy

The incidence of gastrointestinal diseases in our country has always been high.
However, the traditional gastrointestinal endoscopic invasive examination method has brought great pain to patients, and patients are not very motivated
.
The capsule endoscopy does not require anesthesia, is comfortable and safe, and the diagnostic accuracy can reach the effect of ordinary endoscopy, which is favored by more patients
.
In addition, capsule endoscopy also performs well in avoiding cross-infection
.
It is understood that Anhan Technology, Jinshan Technology, Zifu Medical, and Shangxian Medical have all launched capsule endoscopy products and sold them all over the world
.

Domestic capsule endoscopy NMPA approval status (partial) In addition to the above categories, ultrasound endoscopy, a digestive tract inspection technology that combines endoscopy and ultrasound, is also an innovative direction of endoscopy
.
At this stage, Olympus, Fuji and Pentax have already launched products in the field of ultrasound endoscopy.
Domestic Kaili Medical has already made a layout in this field.
However, as a whole, there is no domestic ultrasound endoscopy marketed in China, and there are also huge Domestic alternative space
.

3.
Passive implanted devices: intraneural/surgical implants

Among the imported passive implant devices approved in the first half of this year, products such as neuroendo/surgical implants, joint replacement implants, orthopedic filling and restorative materials are the main import categories.
The neuro-intervention market involved is one of the areas where China is in urgent need of domestic substitution
.
According to the prospectus of Guichuangtongqiao, at this stage, China's neurointervention market is occupied by foreign-funded companies such as Medtronic, Johnson & Johnson, Stryker, etc.
93%, while domestic companies are building a complete product line from scratch
.
The neurointervention market mainly includes ischemic products for ischemic stroke and arterial stenosis, bleeding products for aneurysms, and pathway products that assist in establishing pathways
.
Among them, ischemic products have a larger market space due to more patients; bleeding products are more difficult to operate due to complex diseases, and have higher technical barriers; access products have achieved partial localization due to lower technical barriers
.
In terms of capital, neurological intervention is quite favored by investors
.
According to the incomplete statistics of the arterial network, there have been 8 financing mergers and acquisitions in the field of neurointervention since this year.
It can be said that compared with the field of coronary intervention that has successfully achieved domestic substitution, the capital environment faced by neurointervention is more friendly
.

In terms of product quality, domestic neurointerventional products have made significant improvements in quality, and some products even have better indicators than imported products.
However, the number of domestically produced products such as balloons, covered stents, dense mesh stents, and arterial stents is relatively small.
The market needs to be further breached
.
There are many reasons for the low penetration rate of domestic neurointerventional products.
Factors such as product price, patient cognition, cerebrovascular disease screening, and the number of stroke centers have all affected it to a certain extent.
This is also the need for breakthroughs in the field of neurointerventional devices in the future.
Place
.

Write at the end

In addition to the ICD, endoscopy, and neurointervention fields mentioned above, China also has a dominant position in the core components of heart valves, artificial blood vessels, and imaging equipment
.
Over the past ten years, China's medical device industry has continued to develop rapidly and has become the world's second largest medical device market.
However, the overall localization rate of China's medical device industry is still low
.
The vast import substitution market is bound to become a battleground for domestic medical device companies in the future
.
The road to domestic substitution is long and difficult, especially the fields that urgently need domestic substitution at this stage are mostly high-end medical devices with more technical barriers.
However, on the one hand, the huge domestic population base means a large amount of medical demand, and on the other hand, the policy continues to be favorable.
The development of domestic equipment has provided opportunities for the development of domestic enterprises
.
It is believed that in the future, as more and more companies increase their innovation and R&D efforts, there will be more fields in the domestic medical industry to realize domestic substitution, and a large number of innovative entities will also rise rapidly
.

Reference materials: [Hundred pages of heavy medical equipment in-depth report-Serial 2] Who is the best in the golden ten years-Xingzheng Medical and Health