Grace Fu Palma, founder and CEO of Boston-based China Med Device, LLC, a firm specializing in commercialization and funding for medtech companies entering China, considers CFDA’s proposal for exempting certain IVD reagents from clinical trials.
China’s medical device industry has seen double-digit growth for many years and Chinese companies across different industries are entering into the medical device sector. These domestic companies have strong financial resources but lack technology, and they are eagerly looking for Western companies to buy or partner with them to shorten their time to market.
In 2015, the China State Council issued a 10-year manufacturing plan, “Made in China 2025”, that specifically targets medical devices among 10 domestic industries earmarked for growth. The ultimate goal, based on additional plans for 2025-2035 and 2035-2045 is to be the world’s leading manufacturer of medical devices.
One of the major focus areas in the 2025 plan is the biomedical and high-end medical device industry — and the sector is expected to achieve explosive growth in the next decade.
China’s device industry is experiencing rapid development due to improving living standards and health awareness. From 2004 to 2014, the compound growth rate of China’s medical device industry was 25%, much higher than the 7%-8% global growth rate.
However, the majority of products in China’s domestic medical device industry are low-cost, low-tech medical devices. By the end of 2013, there were 16,000 medical device manufacturers in China, 29% Class I, 54% Class II, and only 17% Class III manufacturers. From 2008 to 2013, CFDA has approved 78,784 low-end domestic Class I and Class II medical devices registered, but only 10,316 high-end Class III devices.
The “Made in China 2025” plan is focused on developing domestic high-end, profitable medical devices such as imaging equipment, medical robots, full degradation vascular stents and other high-value medical products.
The government will support domestic manufacturers to improve their R&D and technology innovation in a domestic medical device industry.
On the other hand, since the government is incentivizing the domestic device industry, importers may face more challenges and barriers if the authorities issue policies to restrict imports.
This is a good time for non-Chinese medtech companies to find other ways to enter China, such as through OEM partners, licensing technology, or establishing factories. — Grace Fu Palma | firstname.lastname@example.org (978) 390-4453 www.chinameddevice.com