Chinese Market Gets Hotter for Medical Devices

Mark Crawford

Citigroup Global Markets recently surveyed nearly 400 Chinese hospitals (about two percent of the country’s total) from 29 provinces and cities about attitudes toward the medical equipment market, medical consumable market, hospital construction cycle, and county-level hospital market.

Among the key findings:

“We estimate the total market size of the 11 medical equipment segments we surveyed to be about U.S. $5 billion in 2012, and expect the Chinese medical device market to grow about 17% in 2012 on 12% annual growth in medical equipment and 25% annual growth in medical consumables, largely driven by: 1) purchasing budget growth in Class-3 hospitals; 2) county-level hospital upgrade and expansion driven by government investments; and 3) a solid hospital construction cycle in 2012-15,” wrote Citigroup.

The report also states that multinationals will continue to dominate the market in 2012-15, citing that Chinese hospitals prefer multinational brands and are becoming more aware of product quality and functionality in selecting medical equipment.

Top U.S. med-tech companies have gained strong footprints in China. While GE holds a leading position for products such as MRI, CT, anesthesia, ultrasound, and DSA, “VAR has focused on the linac market and become one of three dominant linac brands in China. For medical consumables, MDT, JNJ, and SYK are the furthest along in China in the drug eluted stent and orthopedics markets.”

Other foreign manufacturers with sizeable Chinese market share include Phillips and Siemens.

This appears to be a good time to make a move (or expand further) into the Chinese market. Compliance with the quality system requirements of the U.S. FDA, Europe, or Canada (with an ISO 13485:2003 certificate) is accepted in China. However, device classification in China is not a straightforward process and can require a greater investment in money and time—which may be worth it considering the favorable attitudes toward U.S. manufacturers and the market size.

According to Emergo Group, regulatory consulting services group in Austin, Texas (www.emergogroup.com), top medical device regulatory issues in China include:

  • Determining device classification
  • Identifying the best route to obtaining State Food and Drug Administration (SFDA) approval
  • Developing a product registration standard
  • Conducting clinical protocols and coordinating clinical trials, if required
  • Translating documents and labeling
  • Obtaining the CCC Mark, if required
  • Preparing final submissions and acting as official legal agent and after-sales agent in China

For a flow chart of China’s regulatory processes, visit: http://www.emergogroup.com/files/medical-device-regulatory-process-china.pdf.
To see the complete Citigroup Global Markets report, visit: http://www.medcitynews.com/wordpress/wp-content/uploads/China-MedTech.pdf

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