Competition For High-End Medical Device Market Escalating: Multinational Giant'S Expansion Stagnates And Domestic Substitution Accelerates

In recent ten years, outstanding domestic manufacturers such as Neusoft medical, Lianying medical, Mindray medical and Wandong Medical have emerged in succession. Although the market share is still not high, it has realized the preliminary domestic substitution.

On the one hand, the development of international giants has stagnated due to the impact of the new crown epidemic, and on the other hand, Chinese enterprises have increased their innovation efforts to occupy high-end market share. The core technology battle is becoming more and more fierce.

A few days ago, GE Medical announced that the 256 row revolution CT production line, which is the highest end of the Chinese market, was officially put into production in the aviation and Health General Electric factory in Beijing Economic and Technological Development Zone. Prior to that, on November 11, at the Second World Health Expo, Lianying medical exhibited a number of new hard core products, including China's first ultra-high field animal MRI UMR 9.4T, the world's first 1875px super large aperture 3.0T MR Omega, China's first 640 slice CT Tianhe 640 and other medical imaging equipment with the world's leading level. On the other hand, Mindray's R & D investment reached 1.004 billion yuan in the first half of 2020, with a year-on-year increase of 29.06%. In the past three years, the proportion of total R & D investment in annual revenue has been maintained at about 10%.

While Chinese manufacturers are making great strides forward, multinational enterprises are affected by the new crown epidemic, and their income and profits are generally in a bottleneck. According to the annual report disclosed by Siemens Medical in November 2020, its annual revenue was about 14.5 billion euro, which was the same as that of the same period last year, but the net profit decreased by 1.7%, in which the imaging business only slightly increased compared with the same period last year.

"As a dual capital and technology intensive industry, medical imaging products have high technology content and large investment in the early stage. Once manufacturers establish technical advantages and seize market share, the corresponding dominance will be stronger. This is also an important reason why Siemens Medical Systems, GE Healthcare and Philips healthcare have been able to dominate the global supply of medical imaging equipment for a long time. " On November 24, Wang Jun, investment manager of a health industry fund in Beijing, told reporters of the 21st century economic report that the uncertainty of the impact of the new epidemic on the global economy has intensified the competition among medical image manufacturers.

On November 11, 2020, the second world great Health Expo opened in Wuhan International Expo Center. The picture shows the medical devices on display at the Expo. People's vision

Developing high end market

Medical imaging equipment, as an indispensable detection means of modern medicine, mainly focuses on traditional large-scale equipment such as CT, MRI, Dr, ultrasound, etc., and constantly develops new products such as PET / CT, PET / MR, DSA of nuclear medicine, which provides more accurate and abundant auxiliary parts for clinical diagnosis and treatment.

In this field, the head position has been monopolized by foreign enterprises. According to the statistics of evaluatemedtech, in 2017, the revenue of medical imaging equipment of Siemens Medical Systems Group, general electric medical group and Philips healthcare Department (commonly known as "GPS") accounted for the top three positions of medical imaging equipment, accounting for us $9.168 billion, US $8.769 billion and US $7.787 billion respectively, with market shares of 23.2%, 22.2% and 19.7% respectively. GPS three medical imaging giants occupy 65% of the global market share.

China, as a country with a huge demand for medical devices, used to research and develop CT and other large-scale medical imaging equipment with the whole country's efforts in the 1970s. However, with the promotion of reform and opening up, imported equipment entered the market, and the large gap in technology level made China's market quickly monopolized by imported equipment. The average number of imported products of various large-scale equipment exceeded 70%.

With the encouragement of national policies and the favor of capital, Chinese high-end medical device enterprises have a good opportunity to break through. In recent ten years, outstanding domestic manufacturers such as Neusoft medical, Lianying medical, Mindray medical and Wandong Medical have emerged in succession. Although the market share is still not high, it has realized the preliminary domestic substitution.

Wang Jun pointed out that the technical level and product performance are still the core gap between domestic products and imported products, making the competition of medical devices in China mainly concentrated in products with low technology content in the past decades. "However, after decades of accumulation, the technical level of Chinese manufacturers is gradually approaching that of imported manufacturers, such as the cutting-edge PET / MR in the field of imaging equipment. Before Philips, Lianying successfully launched the world's third PET / MR, which has been approved for marketing in China, the United States and Europe, and has been incorporated into Zhongshan Hospital, Xuanwu Hospital and other hospitals."

Zhang Qiang, chairman and chief executive officer of Shanghai Lianying Medical Technology Co., Ltd., said: "PET / MR is one of the most cutting-edge imaging equipment in the world, which has great value in clinical and scientific research fields. The successful development of this equipment not only promotes the core competitiveness of China's medical equipment field and high-end manufacturing industry, but also drives the technological upgrading of upstream and downstream industrial chains."

Mindray medical is also speeding up the pace of domestic substitution. Previously, Cheng Minghe, the new vice chairman of Mindray medical, said publicly that in terms of high-end color Doppler ultrasound, it has been able to replace most imported products, and only a small part of the application still has a gap. "Our 4K endoscope has also reached the international high-end level, but because it is a new product, it still needs to be widely used and gradually accumulate public praise after being recognized by more customers."

Domestic brand

Although in terms of product technology, Chinese manufacturers are still in the state of catching up, but based on China's local market, policy support, rapid market response ability and deep industry university research cooperation are the unique advantages of Chinese manufacturers.

In the course of the anti epidemic, the lack of domestic production of high-end medical equipment such as ECMO and the lack of supply of invasive ventilator, etc. fundamentally speaking, the technical level of China's high-end medical devices is insufficient. Therefore, the state proposes to speed up the supplement of China's high-end medical equipment, and realize the goal of independent and controllable high-end medical equipment.

"China's high-end medical device enterprises have inherent local advantages. As long as they are based on the Chinese market, constantly improve their technical level, improve product performance, and make use of their own cost advantages and service capabilities, they will certainly be able to gain advantages in market competition and break through the monopoly advantages of foreign enterprises." Wang Jun is full of confidence in Chinese enterprises going out to sea.

The outbreak of Xinguan epidemic forced Chinese enterprises to step into the global competition. In recent years, Lianying medical and Mindray medical have accelerated the pace of overseas distribution. Since its entry into the United States, Lianying medical has successively established four R & D centers, and established its North American headquarters and Houston production base in 2018. At present, Mindray medical has also established a research and innovation platform based on global resource allocation, with eight R & D centers and about 2500 R & D engineers.

This effort also played a role in the most critical time of the epidemic. Zhang Qiang said: "during the epidemic period, the" shelter CT "successfully developed by Lianying medical in only five days once served more than 70% of the shelter hospitals in Wuhan. The industry's first UAI intelligent auxiliary analysis system for new crown pneumonia took only five days to complete the research and development. It was launched in more than 100 first-line anti epidemic hospitals across the country, completing the screening and auxiliary diagnosis of tens of thousands of patients with new crown pneumonia."

In fact, the severe damage to the global supply chain system under the impact of the epidemic at the beginning of this year has also provided opportunities for Chinese enterprises entering the international market. With the recovery of social order in China and the acceleration of global epidemic situation, China's anti epidemic products have become the most demanding products in the world, including CT, respirators, masks and other products.

After the epidemic spread in Ukraine, Nepal and other countries and regions, Zhang said, "the epidemic has spread in more than 20 countries and regions around the world. In Thailand, Morocco, New Zealand, Argentina and other countries, we have completed the first installation, and Lianying medical high-end medical imaging equipment products have expanded in the global market. "

Cheng Minghe also expressed his confidence in the future of the industry: "judging from the current situation, the road of domestic substitution of high-end medical devices is still very long, which needs to be done step by step. However, from the perspective of the whole market, in recent years, domestic enterprises have always launched new products in the fields they are good at, and the momentum of domestic substitution is getting faster and stronger. From the perspective of users, they are also willing to choose more domestic products with high cost performance to try, and the overall environment has been greatly improved compared with the past. "

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