The medical device industry in mainland China has become a relatively independent industrial branch and one of the industries with the greatest market potential. The state policy support, economic development assistance and the aging of the society are all contributing to the development of China's medical device industry.
Although China's medical device industry faces many challenges such as small scale of enterprises and weak research and development capabilities, the relevance of China's medical device market to the world market will become closer in the next 5-10 years, which will enable medical device manufacturing processes, new materials applications, and research and development. The level and marketing network have changed significantly. China's medical device products should and will transform from high-end products with high value-added.
The changes in the market environment are prompting a group of industry-leading companies to take advantage of the capital market and accelerate the pace of mergers and acquisitions. China's medical device industry integration will show a leap-forward development trend, and the capital market will also gain substantial profits with the rise of the medical device industry group.
From the policy point of view, in 2013, the Ministry of Science and Technology released the special plan for medical equipment “Twelfth Five-Year Planâ€, and the Ministry of Industry and Information Technology released the “Twelfth Five-Year Plan†for new materials industry. The "Health China 2020 Strategy Research Report" issued by the Ministry of Health clearly pointed out that for independent research and development of pharmaceuticals, medical consumables, medical equipment and large-scale medical equipment, the Ministry of Health will specifically launch a major national health industry project of 10 billion yuan. These special projects will provide a strong impetus for the development of domestic medical devices.
The acceleration of economic development has led to a comprehensive upgrade in demand for medical services, resulting in an overall increase in demand for health services. The gradual opening up of the medical service market has accelerated the speed of domestic and foreign capital investment in China's medical service industry, which has directly led to an increase in demand for the medical device market.
From the perspective of social demographic structure, China, especially the more developed regions of China, has entered an aging society. Due to the gradual aging of the population, people's lives are becoming more affluent, people are paying more and more attention to health care, sales of rehabilitation equipment and home health care equipment have increased substantially, and physical therapy equipment has been widely purchased in hospitals and clinics at all levels.
However, China's medical device industry still needs to face the challenges of some existing problems. The main problems are insufficient research and development capabilities, weak innovation capabilities, insufficient R&D investment, and weak ability to transform scientific and technological achievements. It is precisely because China's medical device industry is in the early stage of the industry cycle, the industry has concentrated more SMEs, showing a scattered situation, the scientific and systematic nature of government supervision needs to be further improved, so the opportunities are bound to be full of challenges.
At present, China's high-end medical equipment market is almost monopolized by imported brands, while domestic brands with a high proportion of export products are mostly in the low-end market. According to statistics, about 90% of the medical device manufacturers that hold the "Medical Device Business Enterprise License" are low-tech SMEs with an annual income of less than 30 million yuan. The proliferation of imitations in the low-end market has accelerated the vicious competition at low prices and hindered the healthy development of China's medical device industry. The high-end market has long been occupied by imported brands, which has squeezed the profit margin of domestic medical device companies. If it is unable to climb from the low-end market to the high-end market, as China's demographic dividends ebb, the market expansion will slow down, low-cost and scale effects will no longer exist, and huge gross profit will also be shattered.
The medical device industry itself involves many fields such as medicine, machinery, electronics, and plastics (9605, -40.00, -0.41%). It is a multidisciplinary, knowledge-intensive, capital-intensive technology-based industry. At the same time, there is a large span between research and development, academic promotion, and after-sales service. The upstream industry has a restrictive effect on the development of medical devices, and the disorderly competition of downstream distribution channels has increased the regulatory risks of the industry.
In addition, with the scientific management of advanced countries, China still needs to continuously improve the scientific and systematic aspects of the medical device management system, and the supervision of the industry will be more strict. On June 1, 2014, the "Regulations on the Supervision and Administration of Medical Devices" was officially implemented. The new regulations deal with the registration and filing of medical device products, the production of medical devices, the operation and use of medical devices, the handling of adverse events, and the recall, supervision and inspection of medical devices. The parties have made clear and detailed regulations. Analysts pointed out that the new regulations have raised the threshold for enterprises and have had a great impact on enterprises. The change of new regulatory policies will significantly increase the manufacturing costs of enterprises.
The capital market will undoubtedly provide considerable assistance to the growth of the medical device industry.
The medical device industry is not affected by the economic cycle. The short development cycle and fast return on investment are undoubtedly the ideal investment targets for the capital market. At the same time, the medical device industry is a very segmented industry, in which the market space in the segmentation area is more narrow, and the technical requirements for the development of the segmentation leader are high and the investment is large. Therefore, the integration of M&A is also constantly in the segmentation field. An important way to grow and enter other segments.
In recent years, the cases of mergers and acquisitions in China's medical device industry have basically presented three patterns: one is to focus on market segmentation, the achievement is subdivided; the second is to become a comprehensive giant through mergers and acquisitions; The species is based on the advantages of science and technology to achieve medical integration. This will have a positive impact on the orderly development of the industry.
In 2014, China's medical device industry ushered in the policy year of the industry. In addition to the "Regulations on the Supervision and Administration of Medical Devices" mentioned above, the government has also issued the "Special Approval Procedure for Innovative Medical Devices (Trial)" and the "Special Action Plan for Five Remediation of Medical Devices". In addition, on May 26, 2014, the Health Planning Commission issued a notice on its official website stating that it would organize the selection of excellent domestic medical equipment. This will undoubtedly accelerate the arrival of another round of M&A integration boom in China's medical device industry.
At this stage, most domestic enterprises still lack core technology and independent brands, which are at the low end of the global value chain and have low added value. However, if we can co-ordinate the use of global innovation resources, and continue to weaken the traditional process, organizational management, business model and other forms of innovation, we will accelerate the formation of technology, brand, quality and service. A comprehensive advantage for the core.
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