We ran across this interesting article in MDDI on the market potential of China. Though the United States and Europe both greatly surpass China's healthcare, China is expected to catch up to Europe by 2020. A healthcare stimulus was implemented in China, which has lead to investment in the country’s healthcare infrastructure. China’s ultimate goal is universal healthcare for its citizens by 2020. Currently, healthcare spending is low in China, but it is expected to increase. Unfortunately, China has been struggling with rising labor and shipping costs. However, these circumstances have encouraged the medical technology industry to become more prominent and invest in R&D.
Instead of the FDA, China has the SFDA, which is quite similar. While the SFDA must register all imported devices, the Ministry of Health is responsible for public health policies, laws, and regulations. Though companies that have CE of FDA approval may easily place their products on the market in China, the FSDA has been deemed as complicated and will be improved in the years to come.
China has had a reputation for having phenomenal economic growth, but that reputation has become less true in recent years as challenges have arisen. In addition to rising salaries, the regulation system in China is sub-par with too many steps that are quite lengthy. China’s regulatory system places precedent on evaluation and rights over supervision and responsibilities respectively. Furthermore, the medical technology companies in China typically release products that and indistinguishable among others. Also, competition at the low end of the market had diminished prices and profit margins.
Despite the challenges China faces, many opportunities for medical device manufacturers exist. China has a growing middle class and aging population which create a demand for quality healthcare, leading to opportunities for medical technology entrepreneurs. Currently, the Chinese medical device market is supplied primarily by imports and local products by multinational joint ventures. Consequently, there is a large consumer population just waiting for the medical technology industry to expand. For example, the newly implemented Western-style lifestyles in China have lead to a imminent growth in the market for cardiac surgery devices. Medical imaging, patient monitoring, in vitro diagnostic technology, and high value consumables have a high growth potential.
China’s medical device market will grow immensely in the upcoming years. By 2025, there will be about 300 million senior citizens in China. Also, the middle class in China is currently larger than the U.S. population. Therefore, the demand for access to quality healthcare and the medical technology market are expected to grow with the present opportunities.
What are your thoughts on the market potential of China? Do you see companies taking steps to enter the market and grow market share? Please comment below.
Photo Credit:Andy Castro