Image source @ Visual China
Text | Flint Industry Brain
Since July 2019, the General Office of the State Council has issued and implemented the "Reform Plan for the Governance of High-value Medical Consumables", proposing to straighten out the price system of high-value medical consumables, improve the supervision and management of the whole process of high-value medical consumables, purify the practice environment of high-value medical consumables and medical services, support the domestic high-value medical consumables market environment with independent intellectual property rights, enhance core competitiveness, promote the formation of a high-value medical consumables governance pattern with reliable quality, accelerate the circulation of consumables, and promote the rational use of products and the return of prices to rationality. Promote the healthy and orderly development of the industry and further reduce the burden of people's medical expenses.
As the second largest component of the medical equipment field of medical high-value consumables, after more than 30 years of rapid development, domestic high-value medical consumables are complete, basically able to achieve full coverage of varieties, orthopedics, vascular intervention, ophthalmology and other high-value medical consumables and biological materials have made significant progress and breakthroughs, but China's medical consumables exports are still dominated by low-end products.
01 Brief analysis of the development of high-value consumables industry
High-value medical consumables in the general sense refer to consumable medical devices that belong to various specialties, act directly on the human body, have strict requirements for safety, and have relatively high value. According to the latest version of the national medical device classification catalog, high-value consumables such as cardiac stents, artificial joints, and sealers belong to implant materials, artificial organs and interventional equipment, respectively, and the management category is generally the third class of medical devices. With the continuous updating of medical technology and the continuous innovation and development of medical means, new high-value consumables are also increasing. At present, the high-value consumables commonly used in hospitals mainly include artificial joints, cardiac surgery products, gastroenterology materials, catheter materials, anesthesia materials, ophthalmic materials and other nearly 2,000 models, involving neurosurgery, cardiothoracic surgery, orthopedics and other departments.
Table 1: High-value consumables industry categories and subdivisions Source: Flint creation is based on public information
The industrialization technology of key biomaterials has become an inevitable requirement for promoting the iterative upgrading of high-value consumables. There are large differences in the development stage of medical equipment tracks, and the short-term collection pressure of mature products of high-value consumables is larger, taking coronary stents as an example, the national collection and procurement landing in 2020-2021 has a greater impact on the revenue scale, profit margin and future growth space of the corresponding products. However, domestic clinical needs have not been fully met, such as cardiac intervention valves, neural interventions, peripheral vascular stents and other products, there is still a large space for import substitution in the medium and long term.
The market for new technology products is still growing rapidly, and the pressure of collection and procurement is small in the short term. Judging from the growth rate of the main segments of high-value consumables in recent years, the market growth rate of peripheral vascular and cerebrovascular interventional consumables in the cardiovascular field is greater than 30% higher than that of coronary vessels of about 20%. Compared with the mature coronary vascular consumables market, the peripheral and cerebrovascular markets are still growing at a high speed.
02 High-value consumables industry market size
The high-value consumables industry has broad prospects, and orthopedic implant consumables, vascular interventional devices, and non-vascular interventional consumables are breakthroughs in the industrial layout. In 2020, the market size of China's high-value medical consumables is about 135 billion yuan, accounting for 21.53% of the medical device market share. Among them, the scale of orthopedic implant consumables is 36.5 billion yuan, vascular intervention consumables are 48.1 billion yuan, neurosurgery consumables are 4.7 billion yuan, ophthalmic consumables are 9.4 billion yuan, stomatology consumables are 8.3 billion yuan, blood purification consumables are 8 billion yuan, non-vascular intervention consumables are 4.4 billion yuan, electrophysiology and pacemakers are 8.5 billion yuan, and other 5.2 billion yuan. The vascular intervention and orthopedic implant market in the domestic high-value medical consumables segment accounted for the highest proportion, accounting for 35.74% and 26.74% respectively. Vascular intervention, oral and blood purification increased at the top of the rate, exceeding 20%. Orthopedic implant consumables account for 1/4 of the high-value consumables market, high degree of technical integration, is an important track in the field of high-value consumables, but also a key area of domestic substitution of medical devices, trauma, spine, joints are the top three segments of orthopedic implants.
Figure 1: China's high-value medical consumables market size (100 million yuan) Source: Flint Creation is based on public information
Figure 2: The proportion of market size in China's high-value consumables segment Source: Flint Creation is based on public information
03 Under the pressure of gathering and mining, it will accelerate the import substitution and export of high-value consumables industry
National high-value consumables collection and mining landing. Since 2019, the procurement of consumables with quantity has begun to be piloted in many provinces and cities. After the General Office of the State Council issued the "Reform Plan for the Governance of High-value Medical Consumables" in July 2019, the procurement of high-value consumables began to accelerate.
The first batch of high-value medical consumables centralized bidding and procurement, the winning price of coronary stent products from 13,000 yuan / only, reduced to 700 yuan / only, the average decline reached 93%, is expected to save more than 10 billion yuan in the whole year.
Table 2: Major national policies and time nodes for medical consumables collection Source: Flint creation is based on public information
There are many sub-categories of high-value consumables, and some short-term categories are facing pressure on collection and price reduction, and there are large differences in the stage of technological development of domestic products and import substitution in each track. Among them, some varieties of cardiovascular, orthopedic, and blood purification consumables are relatively mature in technology, and the import substitution is also relatively complete, such as cardiovascular coronary intervention, occlusion and other products, and the localization rate has exceeded 80%. However, there are still more than half of the high-value consumables category, still dominated by imported products, such as joint products in the field of orthopedics, intraocular lenses in the field of ophthalmology, oral implants, peripheral vascular intervention in the cardiovascular field, interventional products in neurosurgery, pacemakers, endoscopic soft mirrors in the field of surgical surgery, etc.
In China, there is still a lot of room for development in areas where the clinical demand for high-value consumables has not yet been met and the supply of domestic products is relatively small. There is still a large consumable gap in many domestic diseases that has not yet been met. Taking the cardiovascular field of heart valves as an example, in the past, domestic heart valve stenosis and insufficiency were mainly treated by surgery, with large trauma area and long recovery time, and minimally invasive interventional products have not yet been listed in China.
Figure 3: The localization rate of the main categories of the domestic high-value consumables industry Source: Flint Creation is based on public information
04 In the future, the localization of high-value consumables is still a long road
1. Collecting and mining to achieve "volume for price" to promote localization Although China's medical consumables have occupied a relatively stable market share of more than 60% in the international market, the product grade and quality still need to be deeply recognized by the international market, the product structure still needs to change from low added value to medium and high added value, and the manufacturing model also needs to change from OEM production transformation and upgrading to the direction of original design manufacturers. China's medical consumables, especially high-value consumables manufacturers, are "numerous and small-scale", resulting in the phenomenon that China's related products are crowded out by international manufacturers' products when participating in market competition. It is still difficult for domestic consumables companies to shake the monopoly position of imported enterprises' products in the short term, mainly due to the extremely high technical threshold for the development and production of high-end consumables, and the technical difficulties such as chips, materials, and processes have not been solved. The road to localization in the future is still long and tortuous.
2. Consumables can be traced throughout the management, it is imperative in today's consumables with volume procurement, strict treatment of inflated prices in the context, high-value consumables have become the "highlight of the medical reform", with the future period of time, medical SPD (Supply - supply / Processing - spin-off processing / Distribution - distribution) management concept will help the implementation of the national medical reform action, while this will increase the proportion of high-value consumables management information, standardization capabilities in the hospital assessment standards, Therefore, it is imperative to innovate the refined management under the national collection of high-value consumables. At the same time, with the gradual maturity of DRG, according to the patient's age, sex, length of hospital stay, main diagnosis, disease, surgical treatment, disease severity and comorbidities, complications and other factors, the patients with similar clinical characteristics and medical resource consumption are grouped into a group, and the price, fee and medical insurance payment standard are determined in groups.