2023 China Medtech Industry Outlook (Simon-Kucher)

Summary

• In September 2022, China unveiled a subsidized loan scheme amounting to 200 billion yuan (RMB) for hospitals to build up their hardware.§1
• The third round of national volume-based procurement (VoBP) for spine orthopedics covered more than 90 percent of the national volume for artificial spine consumables, with a contract period of three years.§1
• A product can win in the third VoBP round if its bid is lower than 40 percent of the highest bid from the same group.§1
• Out of 173 companies that joined the third round of VoBP, only 21 failed to win any bids.§1
• Optune, an irradiation treatment for glioblastoma, is included in over 30 city commercial health insurance policies (city CHIs).§2
• AK Medical shifted toward 3D printing for customized orthopedic products, which experienced a revenue increase of 303 percent in 2021.§3

Key insights

1. The hospital hardware loan scheme bodes well for medtech companies, especially in diagnosis, imaging, pathology, ICU, rehab and clinical research.§1
2. Volume-based procurement, import substitution and payment reform remain recurring themes shaping the industry.§1
3. The high winning rate in the third VoBP round leaves the competitive landscape largely undisrupted, unlike pharmaceutical VoBPs.§1
4. Hainan Bo'ao Hope City and Medicine Connect in the Greater Bay Area provide accelerated pathways for early access to innovative devices before NMPA approval.§2
5. Early access in the Greater Bay Area through Medicine Connect resulted in four successful cases after one year of implementation.§2
6. City CHIs are becoming increasingly popular in China's medtech market, with more including medical devices in their formularies.§2
7. Three key strategies to succeed are to assess the policy environment, adapt to change and innovate across products, go-to-market approaches and business models.§3