Hi, All
A report from a book "The Challenge of the Chinese Medical Device Market" for your reference.
China, in terms of both its healthcare system and medical market, is a nation of contradiction. As the world's most populous country, and one in possession of the fastest growing major economy in the world, the nation offers a vast array of opportunities for overseas investors, complemented by a massive potential workforce and consumer base. The government has promised large-scale investment in order to improve healthcare.
However, several factors inherent in the nation's make up undermine many of these opportunities.
China may be the 8th largest medical market in the world but that position belies the fact per capita spending on medical devices and equipment is just US$2. Increasingly China is becoming a "two track" country. While there are some very high quality hospitals and clinics in the big cities, in rural areas facilities are badly-equipped and trained staff are lacking.
But that's just part of the story. The role of traditional Chinese medicine in limiting the growth of western medicine, the revised regulatory requirements for devices, the issue of how to fund rural health services, the emerging domestic manufacturing sector and a growing AIDS problem, are all now part of the mix.
POPULATION China is a large and fast growing market, but it is far from being a rich one. Of the population of 1.28 billion, around 870 million live in poor rural areas with little healthcare infrastructure, and have no money to pay for treatments in expensive county level hospitals. The vast majority of the Chinese population, therefore, has severely limited access to healthcare, especially that provided by expensive imported drugs. The government has plans to recreate some form of the defunct rural health insurance scheme, but it is difficult to see how this will generate the cash to provide anything other than the most basic level of care.
MEDICAL DEVICE MARKET ENVIRONMENT The medical device market is concentrated in the larger cities such as Beijing, Shanghai, Guangzhou and Tianjin. It is here that rapid economic growth has taken place during the last two decades, and where people have higher incomes capable of supporting greater expenditure on healthcare. Not surprisingly, the majority of China's advanced facilities and highly trained medical staff are to be found in the urban areas of the eastern part of the country. The medical market is further fragmented. Local city governments have a great degree of autonomy, and the richer cities are, in many spheres of life, self-ruling. This leads to differences in regulatory policies and attitudes; methods of operating in one city or province have no guarantee of success in another. The language issue must also be taken into account. There are many dialects of Mandarin Chinese, the official language, which can be incomprehensible Cantonese speakers, for example.
DOMESTIC PRODUCTION China has a large domestic production sector, split between locally owned manufacturing and joint venture projects with overseas companies. There are around 2,900 medical device manufacturers in China, most of which are state owned, medium to small companies, with less than 400 employees. Locally owned manufacturing is usually of basic medical supplies such as bandages, furniture, patient aids and medical/surgical instruments. While production quality will not usually be on a par with that of imported products, Chinese goods are cheap and will normally be preferred by State purchasers, who are keen to reduce costs and promote local industries.
MEDICAL DEVICE REGISTRATION China 's State Food and Drug Administration (SFDA) issued new regulations in 2004 for the registration of medical devices, simplifying the application and dossier review process. Additionally, the Medical Device Clinical Trial Regulation, effective in April 2004, called for more detailed requirements for clinical protocol, clinical hospitals and clinical reports in China. In March 2005, the SFDA announced new changes to its medical device registration requirements. Under the new requirements, a total of 12 documents must be submitted to the SFDA in both Chinese and English. Owing to the large influx of overseas companies wishing to register healthcare products in China, the SFDA has taken steps to address the previously awkward medical device regulatory environment
Julia Ho