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6 Trends of Medical Device Industry
【Date：2018.08.09 Source：CG English Web】6 Trends of Medical Device Industry
Core tip: since 2014, the state has revised and improved the regulations of the medical device industry, and issued industry standards and classification formulation irregularly. The policies formulated are quite accurate. The intensive introduction of policies that business tax will be replaced with a value-added tax, the third phase of the golden tax, the two-ticket system for medical consumables and the improvement of centralized distribution, as well as the medical fee control, medical association and hierarchical diagnosis and treatment and other policies have overwhelmed us. The existing business model and market structure are facing huge challenges, and the industry is facing a reshuffle.
Under the new situation, well-known manufacturers of foreign medical device have closer cooperation with large commercial group companies such as Sinopharm, China resources, Kyushu Fujitsu and others, and it will become extremely difficult for the small and medium-sized agents and manufacturers of medical device to survive. What is the future development trend of medical device industry? Where are the new opportunities and new outlets in the industry? How to take the lead in the fierce market competition?
Changing from emphasizing relationship gradually to emphasizing the product as well as the brand
National policies such as replacing business tax with value-added tax, the third phase of golden tax, and anti-commercial bribery are oriented to not allow to promote sales with commission. The author Wang qiang believes that the way to promote the sales of medical devices with relationship will play an increasingly smaller role as time goes by, and the effect will be worse as the price of medical devices continues to drop.
From the era of windfall profits into era with reasonable profits and small profit
Prices drop has swept across the entire medical consumables tender since 2014, the price of Ningbo fifth batch of medical consumables dropped as high as 72%, and price of medical consumables in Shaanxi province in 2018 dropped up to 79%, the high value consumables industry is changed from huge profits into a reasonable profit. While product registration certificates of conventional products such as syringes, vacuum vessel are around one hundred copies. Because of many competitors, low-price competition and bargain of hospitals in bidding, ordinary material has ushered in an era with tiny profit.
Changing from channel into large commercial companies and the terminal as the leading position
At present, more than 90% of medical device manufacturing enterprises adopt the agency system and pursue the channel as the important way. However, after 2020, the implementation of two-ticket system for medical consumables and the improvement of centralized distribution, small and medium-sized agents will withdraw from circulation channels, and large commercial groups represented by Sinopharm, China resources, Kyushu Fujitsu and Shandong Ruikang will take the lead in the circulation channels.
In the field of IVD in China, the era of giving importance to terminal is coming. Mike, Runda, Seris, Shandong Ruikang and Dean and other companies adopt intensive operation to directly control the terminal, which has reached more than 2,000 in 2018, while Mike, Wanfu and other IVD production enterprises acquire local agents to establish subsidiaries, and increase the control of the terminal. The author Wang qiang learned that hundreds of hospitals in the field of high-value consumables were packaged or managed. It will be those who controls the terminal to take the initiative in the future!
Domestic medical devices replace imported ones
The reasons for replacing imported medical devices with domestic medical devices are as follows: first, medical cost control. At the end of 2017, the increase rate of medical costs in Guizhou province reached 18%, which is of great gap from the national regulation that the increase of medical costs should be limited to be 10%. Therefore, the first class hospitals in Guizhou replaced imported high-value consumables with domestic high-value consumables. Second, the country and some provinces such as Sichuan, Jiangsu, Liaoning and other provinces introduced measures to support domestic medical devices, some policy procurement projects give priority to the domestic medical devices.
The main sector is the conventional medical devices, the manufacturing enterprise of domestic medical device will eventually dominate. More than a decade ago, BD medical syringe occupy 80% of the market share, and then a growing number of domestic medical device manufacturing enterprise enter into the syringe industry due to lower threshold technology. As a result, the selling prices keep lower and lower, BD medical syringe sales continue to decline. Johnson & Johnson withdrew from the field of cardiac stents and now transferred the glucose meter. It is both because of the lack of high-profit support and the loss of technical threshold, which leads to the difficulty to keep the project in normal operation.
Competition of different sectors into the domination of professional company
The conventional products such as B-mode ultrasound, DR medical devices are made by hundreds of manufacturers, finally four manufacturers will occupy 80% market share after years of market competition. Taking the heart stents as an example, LOP, Microport, GWMS, Liaoning Yinyi occupy 80% of the market share of heart stents, so do the others areas of segment market of medical apparatus and instruments.
The reasonable division of labor of Industrialization and specialization
Why do some medical experts or technical experts come to start a business but they cannot make the scale of enterprise big, because they do not understand production and marketing, they need to pay a lot of tuition fees and take a lot of detours. Why do some agents cannot achieve success even if they spend 15 percent or more on cold chain logistics, while Sinopharm, Kyushu Fujitsu, China resources and other large commercial group companies spend only about eight percent to lead to perfect order, it is because the latter are more professional.
The implementation of medical device registrants in Shanghai and other regions lays a solid foundation for the specialization and reasonable division of labor of medical devices. The two-ticket system for medical consumables implemented after 2020 and the policy of improving centralized distribution force small and medium-sized agents to transform and focus on being service providers.
After 2020, the specialized labor division of the industrialization of medical devices will become more and more obvious. Medical experts or technical experts will focus on research and development. The profit model is to make money by selling research and development results. Large commercial group companies focus on logistics distribution, financial leasing, etc., while small and medium-sized agents provide services only, and coordinate with processing plants in specializing in OEM processing, production enterprises mainly focus on brand building and marketing; The asset-light operation of medical equipment will become a reality with professional person managing professional matters!
Grasp the good news, and follow the trend
Recently, some medical device manufacturers and agents are rushing to register, why? It is because the product registration authority of the second class medical devices will be transferred to the National Bureau, which also means that the product registration time of the second class medical devices will be extended, and there will be increasing difficulty in the registration and its cost will be on the increase.
Grasp the good news, and follow the trend
Recently, some medical device manufacturers and agents are rushing to register, why? It is because the product registration authority of the second class medical devices will be transferred to the National Bureau, which also means that the product registration time of the second class medical devices will be extended, and there will be increasing difficulty in the registration and its cost will be on the increase.
What kind of category to register? The author Wang qiang suggests to choose the varieties in free clinical directory, which can save the cost of hundreds of thousands of fee, and the registration time can also be half a year in advance. The most important is that some enterprise fails in registration certificate because there is something wrong in this link of clinic experiment. As a result, we should not only focus on the clinical free directory issued by the Food and Drug Administration, but also focus on the latest announcements and classification of the product issued by Food and Drug Administration.
Some varieties will be reduced from the third category to be the second category. In 2009, the National Food and Drug Administration [2009] No. 582 document: notice on adjusting the management of medical indoor air disinfection equipment clearly points out that medical indoor air disinfection equipment is no longer subject to administrative license according to medical devices, and there is no need to apply for registration certificate of medical device products. These are opportunities. As well, the state has invested 850 billion yuan in the construction of primary medical care, which also contains unlimited business opportunities. In recent years, enterprises such as Wandong Medical have won several government procurement projects and benefited from them. Are you involved? Has the business revenue of your enterprise increased? In 2020, medical association and hierarchical diagnosis and treatment will be implemented nationwide. How will you get the dividends generated by it?
Medical device is a sunrise industry, which contains infinite business opportunity, can you hold it?
