Is China's medical device industry coming of age?
January 19, 2017
by Thomas Dworetzky, Contributing Reporter
Big changes may be coming to the China medical device market.
That is partly because 2016 is the first year of the 13th Five-Year Plan for Economic and Social Development of the People’s Republic of China, which has specifically targeted medical devices as one of its main areas of concentration.
It is also a time when the Chinese Food and Drug Administration (CFDA) has made public concerns about study data and reliability in the health care sector – and launched a new streamlined review process for medical devices under certain criteria.
Ultimately, the goal is to help foster a domestic medical device industry – and become less reliant on imports. At present, GE, Philips, and Siemens have a 70 percent share of the market, and foreign brands currently supply 80 percent to 90 percent of all high-end medical equipment in the country, as HCB News noted in a 2015 report.
“If we cannot make products with good quality and brands, China cannot become a manufacturing powerhouse as we hope,” said Sha Nansheng, vice director of the Department of Science and Technology of the Ministry of Industry and Telecommunication Technology (MIIT), at the time.
Part of the quality challenge has been regulatory. A September 2016 report from Radio Free Asia noted that the CFDA had found, after a year-long review of clinical trials, that over 80 percent of the data had been “fabricated.”
Another part of the problem has been the length of time to get approval for medical innovations. In order to combat this issue, the CFDA, in late December, 2016, published “Guidelines for the Preparation of Special Reports on the Application of Innovative Medical Devices” to help move medical device R&D forward. That change is due to go into effect in the beginning of 2017, according to the Regulatory Affairs Professionals Society.
The new plan permits devices with Class II (limited to imported) applications or a Class III (both domestic and imported) applications to seek a priority review if the device has been enrolled in the National Science and Technology Major Project or National Key Research and Development Plan, or if it can diagnose and treat rare diseases or has “significant advantages” over present approaches for cancer or geriatric, pediatric illnesses or other urgent clinical needs.
These devices require a technical review by the Center for Device Evaluation under the CFDA or at the provincial level.
According to the law firm Ropes & Gray, CFDA has also established expedited approval for devices needed for emergency public health incidents and that are innovative.
The Medical device market is a massive opportunity in China. According to Medtec, a technology news and event site, “in developed overseas markets medical devices and equipment account for 42 percent of the overall market size of pharmaceuticals and devices/equipment combined whereas in the local Chinese market the share of medical devices and equipment is just 14 percent.”
The potential to grow the local Chinese medical device sector is therefore “huge,” according to the company.
China’s medical device market is growing, despite some headwinds. According to market research firm Emergo, “China's economic growth is slowing down, but the medical device industry is still on the rise. The Chinese medical device industry was valued at $18.8 billion in 2016 and is projected to grow modestly through 2019, when it should reach over $24 billion.”
Evidence of growing interest in the medical device sector also comes from the increased participation in Medtec's China 2016, which took place in October 2016, in Shanghai. There were 302 exhibitors from 23 countries with 51 firms at the show for the first time.
That is partly because 2016 is the first year of the 13th Five-Year Plan for Economic and Social Development of the People’s Republic of China, which has specifically targeted medical devices as one of its main areas of concentration.
It is also a time when the Chinese Food and Drug Administration (CFDA) has made public concerns about study data and reliability in the health care sector – and launched a new streamlined review process for medical devices under certain criteria.
Ultimately, the goal is to help foster a domestic medical device industry – and become less reliant on imports. At present, GE, Philips, and Siemens have a 70 percent share of the market, and foreign brands currently supply 80 percent to 90 percent of all high-end medical equipment in the country, as HCB News noted in a 2015 report.
“If we cannot make products with good quality and brands, China cannot become a manufacturing powerhouse as we hope,” said Sha Nansheng, vice director of the Department of Science and Technology of the Ministry of Industry and Telecommunication Technology (MIIT), at the time.
Part of the quality challenge has been regulatory. A September 2016 report from Radio Free Asia noted that the CFDA had found, after a year-long review of clinical trials, that over 80 percent of the data had been “fabricated.”
Another part of the problem has been the length of time to get approval for medical innovations. In order to combat this issue, the CFDA, in late December, 2016, published “Guidelines for the Preparation of Special Reports on the Application of Innovative Medical Devices” to help move medical device R&D forward. That change is due to go into effect in the beginning of 2017, according to the Regulatory Affairs Professionals Society.
The new plan permits devices with Class II (limited to imported) applications or a Class III (both domestic and imported) applications to seek a priority review if the device has been enrolled in the National Science and Technology Major Project or National Key Research and Development Plan, or if it can diagnose and treat rare diseases or has “significant advantages” over present approaches for cancer or geriatric, pediatric illnesses or other urgent clinical needs.
These devices require a technical review by the Center for Device Evaluation under the CFDA or at the provincial level.
According to the law firm Ropes & Gray, CFDA has also established expedited approval for devices needed for emergency public health incidents and that are innovative.
The Medical device market is a massive opportunity in China. According to Medtec, a technology news and event site, “in developed overseas markets medical devices and equipment account for 42 percent of the overall market size of pharmaceuticals and devices/equipment combined whereas in the local Chinese market the share of medical devices and equipment is just 14 percent.”
The potential to grow the local Chinese medical device sector is therefore “huge,” according to the company.
China’s medical device market is growing, despite some headwinds. According to market research firm Emergo, “China's economic growth is slowing down, but the medical device industry is still on the rise. The Chinese medical device industry was valued at $18.8 billion in 2016 and is projected to grow modestly through 2019, when it should reach over $24 billion.”
Evidence of growing interest in the medical device sector also comes from the increased participation in Medtec's China 2016, which took place in October 2016, in Shanghai. There were 302 exhibitors from 23 countries with 51 firms at the show for the first time.