Dentistry is now one of the busiest departments in the hospital, and from children to the elderly, there is always a rush of people in front of the dental office.
Dental implants have become a beautiful scenery because of their high-precision technology and ideal repair effects. However, implanting a single tooth often costs thousands or tens of thousands of dollars. At the same time, with the intensification of the aging of the domestic population, the demand for potential dental implants continues to grow, and the cost burden of patients is heavy.
However, in recent days, after cardiac stents and artificial joints, dental implants that are also high-value medical consumables will also usher in centralized procurement.
The executive meeting of the State Council held on January 10, 2022 pointed out that it is necessary to gradually expand the coverage of high-value medical consumables collection, and collect orthopedic consumables, drug balloons, implants, etc. that are of concern to the masses at the national and provincial levels. This is the first time at the national level that dental implants should be included in the collection signal, directly hitting the pain point of "expensive teeth".
"Collection is extending to consumer-oriented medical care (like dental implants)." Zhao Bing, the head of a consumer medical technology company, told reporters. "Through volume procurement, the price of consumables for dental implants will first be reduced; second, the price of dental implant services will be managed from products to services." He expects the price of the first knife for dental implant collection to fall by 60% to 70%.
In addition, some industry experts told the first financial reporter that high-value consumables such as implants are included in the collection, which is intended to squeeze the cost of the intermediate links layer by layer, and the average decline in the early coronary stents and artificial joints can reach more than 80% or 90%, and it is expected that the dental implant consumables will also have such a high decline.
How to make huge profits in the "business of mouth"
Ms. Zou, who is in her fifties in Suzhou, Jiangsu Province, gradually encountered oral troubles, and after doing three teeth "bridge" ("bypass" refers to fixed dentures, usually grinding the teeth at both ends of the gap between missing teeth into a circle, as a base tooth, and then taking the mold to make dentures), considering the damage caused by molars, in the second half of 2021, she implanted a tooth in Suzhou.
"A one-time payment in a private clinic cost 12,500 yuan for implants imported from Sweden." She told reporters, "The same consumables cost 150 million yuan in public hospitals, and private clinics are relatively cheap." She said.
Ms. Zou spent a lot of effort to study various imported consumables, she felt that the price is indeed expensive, but the whole planting process is relatively smooth, after more than three months to complete the planting, there are no complications at present. The reporter visited the dental private hospital in Shanghai and learned that the current price of a dental implant ranges from 8,000 yuan to 15,000 yuan, which is similar to that of public hospitals.
According to the official website of the West China School of Stomatology of Sichuan University, there are many benefits of dental implants, such as stable position, high chewing efficiency, no wear of adjacent teeth, strong aesthetics, comfort and convenience, small trauma, fast healing and so on.
(Source: Official website of West China School of Stomatology, Sichuan University)
The consumables involved in dental implants can be divided into implant systems and repair materials, the implant system includes implants, implant abutments, crowns, where implants are the core components of dental implants, providing support for the entire implant system, fixation, and prosthetic materials generally include oral prosthetic membranes and bone meal for wound repair.
However, the reason why dental implants are expensive, according to Zhao Bing, is because the dental implant industry has several characteristics, the first is that the industry is not fully competitive and dominated by foreign capital; the second is that the cost of medical services is higher than that of products.
Dental implants need to involve consumables such as implants and crowns. According to guohai securities data, at present, dental implant products, including Europe, the United States and South Korea, account for more than 93% of the Chinese market, and the share of domestic implant products is less than 7%, and the industry is in a small and scattered situation. The world's major implant manufacturers include Duns Park Nord, Strausmann, Kava Group, Zimmer Bongmei and so on.
A dentist in Shenzhen told reporters that the vast majority of implant consumables at present rely on imports; as for consumables such as tooth crowns, although domestic products are gradually developing, some processing accuracy may not be as good as imports.
In his view, the core technical personnel of the dental medical device industry not only need to master the knowledge of medicine and mechanical automation, but also need to have multidisciplinary knowledge reserves such as management, mechanics, and materials science. Foreign stomatology has been ahead of domestic development for many years, and many large companies have formed a systematic research and development system. Therefore, under the overall situation, most doctors prefer to use imported consumables.
In terms of profits from imported consumables, according to Zhao Bing's estimates, the gross profit margin of high-end European and American dental implant products is currently 60% to 70%; while the gross profit margin of the low-end Korean dental products is only about 20%, and the gross profit margin of domestic dental implant products is 40%. The above-mentioned dentist also told reporters that taking dental implants as an example, the cost of full mouth implants can sometimes reach 500,000 or 600,000 yuan, and the cost of consumables may reach about 200,000 yuan.
However, in Zhao Bing's view, "for consumer medical industries such as dental and medical beauty, the 'big mountain' of its cost lies in products and services, and the service is the big head, and the channel cost is the third." ”
The above-mentioned dentist also said that whether it is a clinic or a hospital, the cost of dental implants accounts for a small proportion of consumables, and most of the costs are surgical costs, service costs, etc.
According to the analysis report of Guohai Securities, in 2020, the total size of China's implant market is about 29.7 billion yuan, of which the implant market size is 3.1 billion yuan; the prosthetic materials market size is 2.85 billion yuan; the crown market size is 1.05 billion yuan; and the remaining 22.7 billion yuan are product service scale.
Prices can be reduced by up to 80%.
The promotion of the collection and procurement policy is intended to reduce the cost of intermediate links, open up space for price reduction, cut off the gray interest chain of pharmaceutical circulation and use links, and purify the field of pharmaceutical circulation.
For example, the collection of high-value consumables led by the national level in the early stage has been carried out in two batches, of which the average price of the selected coronary stents has been reduced by 93%, and the average price of the selected artificial joints has been reduced by 82%. Some experts said that the expected price reduction of implant consumables can also be compared with the price reduction of coronary stents and artificial joint collection.
The above-mentioned dentist revealed to the first financial reporter that the consumables related to implants from the manufacturer to the terminal medical institution, through many agent links, the price sold by the agent to the hospital will be higher than the clinic, the reason is that the hospital also needs to bid, take care of all aspects of the relationship, etc., invisibly also helped to increase some costs.
Chen Hao, director of the Drug Policy and Management Research Center of Tongji Medical College of Huazhong University of Science and Technology, told reporters that the current business model of drugs and consumables is different, and after the two-invoice system, the circulation link of drugs has been greatly shortened, up to two levels, but the two-invoice system for consumables has not been fully implemented in the industry, and the consumables industry is a layer of agents, which has resulted in a lot of unreasonable costs.
He believes that once the collection of dental implants is promoted, it can reduce the intermediate circulation links and squeeze out a large number of intermediate costs, and it is expected that the price of related consumables will be very large. In addition, the impact of collection on dental implant consumables dealers will be very large, and the latter faces being shuffled (eliminated) out of the market. In the field of implant dental consumables, although foreign capital still dominates, it is more difficult to replace domestic products in the short term, but the collection can still promote a significant price reduction of related products.
The above-mentioned dentists believe that after the dental implant enters the collection, the price of related consumables will decline, but because the cost of dental implant surgery cannot be underestimated, it remains to be seen how much the overall decline will be.
When will the "freedom of dental implants" come
Previously, the national or local level to promote drugs, high-value consumables, the original sales market is mainly concentrated in public hospitals, and many belong to the scope of medical insurance payment, specifically with public hospitals as an incision, according to the public hospital's reported demand, to determine the bidding enterprise selection rules.
Unlike this situation, the oral medical service industry has a high degree of privatization, and the private sector has an advantage in terms of market share and number of medical institutions. According to the data of the National Health Commission, as of the end of 2019, there were about 885 stomatological specialty hospitals in the country, and 723 private specialty hospitals in stomatological specialty hospitals, accounting for 81.69%. According to the data of Tianyancha, there are currently 1239 enterprises with "oral implants" in their business scope.
More consumables related to dental implants, more sales markets are still in private medical institutions, and self-funding is the mainstay. From this point of view, will it face obstacles in promoting collection and procurement in industries dominated by private medical institutions?
Chen Hao told reporters that the collection and collection led by the national level is more products that are biased towards the scope of medical insurance payment, and at the same time involve the amount of reporting. Therefore, there may be some challenges in promoting dental implant collection nationwide, but it can be carried out at the provincial level, and the alliance collection explored in some places in the past has encouraged the participation of non-public hospital systems and social pharmacies.
Zhao Bing believes that once the national collection of implants has landed, the sharp price reduction of dental implants in public hospitals will force private hospitals to reduce prices.
He further introduced that private hospitals should also have related products and models. "It's like now public and private ophthalmology hospitals can use medical insurance to reimburse the crystals for cataract surgery, but the specific reimbursement plan has not yet been announced, and what can be determined now is that the procurement of dental implants will definitely be implemented, which is consistent with the overall direction of national collection."
In Chen Hao's view, private stomatological hospitals actually have a strong incentive to participate in the collection, and if there are many participating institutions, they can form a strong bargaining party and reduce the cost of consumables procurement. Dental implants will involve different consumables such as implants and implant abutments, and the collection can be carried out in the form of packaging using consumables such as cardiac stents and artificial joints.
At present, there are already places trying to incorporate dental implants into the collection. In November 2021, the Sichuan Pharmaceutical Equipment Bidding and Procurement Service Center issued a notice on the filling in of historical procurement data of oral medical consumables, and the scope of oral medical consumables reporting is mainly oral implant systems, including implants, repair abutments, implant repair accessories, etc.
The notice shows that this is the centralized procurement of the interprovincial alliance oral implant system led by the Sichuan Provincial Medical Security Bureau, and all public medical institutions (including military medical institutions, the same below) that carry out oral implant surgery should participate, and other public medical institutions and medical insurance designated social medical institutions should voluntarily participate in accordance with relevant regulations.
However, with the entry of dental implants into the collection, it is unlikely to be included in the scope of medical insurance reimbursement.
As early as September 22, 2021, the National Medical Insurance Bureau clearly stated in its reply to the "Proposal on Regulating the Cost of Implant Materials and Including the Cost of Dental Implant Materials and Including the Cost of Treatment and Service Into Medical Insurance' put forward by Li Xiaoli, a deputy to the National People's Congress, that at present, the national level adopts the exclusion method to manage the payment of consumables, stipulating the items that are not paid and partially paid by basic medical insurance. The medical insurance departments of each province (autonomous region and municipality) shall organize the formulation of the catalogue of basic medical insurance consumables and diagnosis and treatment projects in their respective provinces according to the actual situation of medical technology development and the operation of medical insurance funds in their respective regions. Due to the different levels of economic development and medical technology in different places, there are also certain differences in the scope of specific projects and the level of payment included. According to the regulations, at present, all provinces (autonomous regions and municipalities) are not included in the scope of basic medical insurance payment for glasses, dentures, prosthetics and other appliances.
"The Medical Insurance Bureau's promotion of the collection of consumables related to implants is not to intervene from the perspective of medical insurance payment, but from the perspective of price management and the perspective of accepting agency entrustment." Chen Hao said.
(At the request of the interviewee, Zhao Bing is a pseudonym in the text)