China and You:<br />· <br />Medical Devices & IVDs in the World’s Second Largest Economy<br />Dr. Davey Han<br />
China: The Medical Device and IVD Landscape<br /><ul><li>I want to export into China.What should I do?
I want to import or use imported Chinese products. What do I need to know?
I want to know about the Chinese market:
How many Medical Devices and IVDs are registered in China?
What arethe Market Drivers?
How Many Manufacturers?
How Many Distributors?</li></li></ul><li>China Facts<br />Population:1300M<br />Number of Hospitals: 76,060<br />Licensed ...
China Facts: Price Comparison<br />
Billions RMB<br />1200<br />1000<br />800<br />600<br />400<br />200<br />0<br />3<br />4<br />5<br />6<br />7<br />8<br /...
6 times 2000 – 2009</li></ul>Global Market Share<br /><ul><li>2009:   4%
2050: 25%</li></ul>A$1 = RMB6.4<br />
2009<br />14<br />12<br />10<br />8<br />6<br />4<br />2<br />0<br />Import(USD$bn)<br />Export(USD$bn)<br />Import and Ex...
Export $12.3 billion up11% from 2008 </li></li></ul><li>National Healthcare Reform PlanFor Accessible and Affordable Medic...
National Healthcare Reform Plan<br />Medical Insurance coverage – above 90% by end 2010<br />
National Healthcare Reform Plan<br />Fundpublic hospitals and community healthcare centers<br /><ul><li>Increased expendit...
Increase of government spending on healthcare exceeds overall
increased rate of government expenditure.</li></ul>Target    22,000 Township Hospitals<br />300 County Hospitals<br />    ...
National Healthcare Reform Plan<br />Basic Drug and Medical Device System Covers 80% of Grass-Root Medical Institutions<br...
National Healthcare Reform Plan<br />Make health care services equally available for urban and rural residents<br />
Healthcare Reform PlanChallenges:<br /><ul><li>Centralized bidding, and contracted producers of basic drugs = Win Big / Lo...
Downwards retail price pressure
Increased payment rates for professional services
e.g. fee for surgeon and nurses
Decreased feesfor automatedservices
e.g. diagnostic examination by CT scan(Prices down, but volume up)</li></li></ul><li>Healthcare Reform Plan:Opportunities:...
Achieving Reform Plan requires dramatic increase in government spendingon medical products
Encouraging private investment to build up for-profit hospitals will increase total HC expenditure </li></ul>Conclusion:<b...
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China and You - Medical Devices and IVDDs in the Worlds Second Biggest Economy

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The story of the emerging opportunities in China for Medtech. This presentation by Brandwood Biomedical Head of China Operations Dr. Davey Han explores the rapidly changing market in CHina for medical products, the lessons for international manufacturers and the opportunities and success factors in the emerging China market.

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China and You - Medical Devices and IVDDs in the Worlds Second Biggest Economy

  1. 1.
  2. 2. China and You:<br />· <br />Medical Devices & IVDs in the World’s Second Largest Economy<br />Dr. Davey Han<br />
  3. 3. China: The Medical Device and IVD Landscape<br /><ul><li>I want to export into China.What should I do?
  4. 4. I want to import or use imported Chinese products. What do I need to know?
  5. 5. I want to know about the Chinese market:
  6. 6. How many Medical Devices and IVDs are registered in China?
  7. 7. What arethe Market Drivers?
  8. 8. How Many Manufacturers?
  9. 9. How Many Distributors?</li></li></ul><li>China Facts<br />Population:1300M<br />Number of Hospitals: 76,060<br />Licensed Device Manufacturers: 13,530<br />Licensed Device Distributors: 40,310<br />Number of Domestic Devices Registered:95,627<br />Number of Foreign Devices Registered: 28,500<br />Aust<br />(23M)<br />(1300)<br />(<200)<br />(123)<br />Mmmm… This represents less than 0.5% of the Chinese market…<br />
  10. 10. China Facts: Price Comparison<br />
  11. 11. Billions RMB<br />1200<br />1000<br />800<br />600<br />400<br />200<br />0<br />3<br />4<br />5<br />6<br />7<br />8<br />9<br />0<br />0<br />1<br />2<br />0<br />0<br />0<br />0<br />0<br />0<br />0<br />1<br />0<br />0<br />0<br />0<br />0<br />0<br />0<br />0<br />0<br />0<br />0<br />0<br />0<br />0<br />2<br />2<br />2<br />2<br />2<br />2<br />2<br />2<br />2<br />2<br />2<br />Market Size<br />Growth: <br /><ul><li>22% compound annual
  12. 12. 6 times 2000 – 2009</li></ul>Global Market Share<br /><ul><li>2009: 4%
  13. 13. 2050: 25%</li></ul>A$1 = RMB6.4<br />
  14. 14. 2009<br />14<br />12<br />10<br />8<br />6<br />4<br />2<br />0<br />Import(USD$bn)<br />Export(USD$bn)<br />Import and Export of Medical Devices<br />Total I/E USD $ 18.4 billion in 2009<br /><ul><li>Import $6.1 billion up17% from 2008
  15. 15. Export $12.3 billion up11% from 2008 </li></li></ul><li>National Healthcare Reform PlanFor Accessible and Affordable Medical Services<br />Additional USD123 billion government in healthcare over 3 years<br />Five Goals:<br />Enhance Basic Medical Insurance coverage<br />Fund public hospitals, community healthcare centers<br />Establish National Basic Drug system, including medical device <br />Medical professionals to work in rural and community healthcare centers <br />Make public healthcare service equally available in urban and rural areas<br />
  16. 16. National Healthcare Reform Plan<br />Medical Insurance coverage – above 90% by end 2010<br />
  17. 17. National Healthcare Reform Plan<br />Fundpublic hospitals and community healthcare centers<br /><ul><li>Increased expenditureto build infrastructure and purchase medical equipment.
  18. 18. Increase of government spending on healthcare exceeds overall
  19. 19. increased rate of government expenditure.</li></ul>Target 22,000 Township Hospitals<br />300 County Hospitals<br /> 400 Chinese Traditional Medical Hospitals<br /> 950 Women & Child Hospitals<br />
  20. 20. National Healthcare Reform Plan<br />Basic Drug and Medical Device System Covers 80% of Grass-Root Medical Institutions<br />Centralised bidding & Procurement<br />Selected Manufacturers<br />Direct Distribution to Hospitals<br />Retail price to patients<br />
  21. 21. National Healthcare Reform Plan<br />Make health care services equally available for urban and rural residents<br />
  22. 22. Healthcare Reform PlanChallenges:<br /><ul><li>Centralized bidding, and contracted producers of basic drugs = Win Big / Lose Big
  23. 23. Downwards retail price pressure
  24. 24. Increased payment rates for professional services
  25. 25. e.g. fee for surgeon and nurses
  26. 26. Decreased feesfor automatedservices
  27. 27. e.g. diagnostic examination by CT scan(Prices down, but volume up)</li></li></ul><li>Healthcare Reform Plan:Opportunities:<br /><ul><li>Universal coverage will expand medical care demands of 1.3 billion consumers
  28. 28. Achieving Reform Plan requires dramatic increase in government spendingon medical products
  29. 29. Encouraging private investment to build up for-profit hospitals will increase total HC expenditure </li></ul>Conclusion:<br />Opportunitiesfor medical device industry far outweighChallenges<br />
  30. 30. Huge Market Growth Potential<br /><ul><li>Healthcare expenditure as % GDP
  31. 31. China: 4.7%
  32. 32. Western average:10%
  33. 33. Market size as % of Global
  34. 34. 2010: 4%
  35. 35. 2050 forecast 25%
  36. 36. 60+ demographic:
  37. 37. 2020 16%
  38. 38. 2050 25%(0.4 billion)
  39. 39. Revenue of Medical Devices vs Pharma
  40. 40. China: 1:5.0
  41. 41. Global average 1:1.9 </li></ul>Economy growing fast and relatively steadilyHealthcare expenditure grows faster than economy<br />
  42. 42. Pathways to Success for Australian Companies<br />The combination of <br /><ul><li>Market Size
  43. 43. Healthcare expansion; state and private
  44. 44. Manufacturer Base</li></ul>results in opportunities for<br /><ul><li>Export to China
  45. 45. Import from China</li></li></ul><li>Pathwaysto Success for Australian Exporters<br />What are the best registration, manufacturing and distribution options ?<br /><ul><li>Is it possible to succeed in China?
  46. 46. Is everything cheaper in China than elsewhere?
  47. 47. Should I manufacture in China?
  48. 48. What is the regulatory environment?
  49. 49. Is there risk to my IP?
  50. 50. What is the pathway to succeed as an exporter to China?</li></ul>Agent ->Rep office ->Joint Venture ->WFOE -> Direct Sales? <br /><ul><li>What to do first?</li></li></ul><li>Regulatory Environment in China<br />Product Regulators<br />Business Regulators<br /> Product License for Market<br />NDRC<br />Bidding Policy& Pricing Control<br />SFDA<br />MOH<br />MOH<br />Product Surveillance & Recall<br />Government Procurement & Trade Policy<br />Your Business<br />AQSIQ<br />MOF<br />Import License & Inspection<br />HC Reform & Reimbursement Policy <br />CIQ<br />MoHRSS<br />Company License of operation<br />International Trade Policy<br />Provincial <br />FDA<br />MofCOM<br />Medical Products strictly controlled by government Healthcare sector is centrally administered by government<br />
  51. 51. Legislation Systems in China<br />There are different levels of regulations and <br />the lower level must not contradict the superior level<br />National People’s Congress<br />National Laws or Acts<br />Examples:<br /><ul><li> Regulations of Supervision and Administration of Medical Device
  52. 52. Registration
  53. 53. Labelling
  54. 54. Classification
  55. 55. Post market Surveillance
  56. 56. QMS Auditing
  57. 57. Standardisation</li></ul>The State Counsel<br />Administrative regulation<br />The Ministries<br />Administrative<br />Provisions<br />China Compulsory Certification<br />
  58. 58. Different Type of Licenses to Do Business<br />License for <br />Distributor of<br />Selling Medical<br /> Device<br />China<br />Compulsory<br />Certification<br />Registration<br />Certificates of <br />Import <br />Medical<br />Devices<br />License of <br />Purchasing<br />Large Med<br />Equipment<br />License of <br />Importation<br />Certificate of <br />Import Inspection<br />Radiation <br />work Permit<br />
  59. 59. General Process to get SFDA registration<br />Registration Product Standard <br />Type test by SFDA authorized test house<br />Approx. 9 months to finish the process <br />(Can take much longer if not done right)<br />Clinical trial or evaluation<br />Submission to SFDA<br />SFDA Tech review<br />SFDA Admin Approval<br /> (Validity for 4 years)<br />
  60. 60. Imported<br />4000<br />3000<br />2000<br />1000<br />0<br />2005<br />2006<br />2007<br />2008<br />2009<br />Year<br />Registrations are complex, but achievable<br />Note: Decrease in 2006/7 caused by major delays during introduction of new registration requirements<br />2010<br />
  61. 61. Exporting to ChinaPathways to Success<br />Consider strategies for “Go To China”<br /><ul><li>Export finished products?
  62. 62. Local China manufacture, with opportunity for lower cost / easier registration pathway?
  63. 63. what activities of local manufacture are sufficient to label “Made in China”?
  64. 64. The right distribution partner</li></li></ul><li>Exporting to ChinaPathways to Success<br />Finding a trustworthy Chinese Partner<br /><ul><li>Compliance
  65. 65. Financial Stability
  66. 66. Supplies on time / in full
  67. 67. Understands my needs</li></li></ul><li>Export<br />600<br />500<br />400<br />300<br />200<br />100<br />0<br />Q1<br />Q2<br />Q3<br />Q4<br />Q1<br />Q2<br />Q3<br />Q4<br />Q1<br />Q2<br />Q3<br />2008<br />2009<br />2010<br />Importing from ChinaPathways to Success<br />China Government is Encouraging Export<br />Strong Increase of Export Certificates Issued by China SFDA <br /><ul><li>14% Increase in first 3 Quarters of 2010 vs 2009
  68. 68. 92% increase in first 3 Quaters of 2010 vs 2008 </li></li></ul><li>Importing from ChinaPathways to Success<br />What questions to ask when choosing andqualifying Chinese suppliers and partners?<br />How to be sure that the answers are valid?<br />
  69. 69. Importing from ChinaPathways to Success<br />Leading foreign companies: <br /><ul><li>Include China in their potential sourcing countries
  70. 70. Research and consider strategies for importing from China
  71. 71. Obtain expertise to identify reliable and capable vendors</li></li></ul><li>Pathways to Success<br />Don’t be scared!<br />You don’t have to know everything about China. Instead, you need to have the right partners with: <br /><ul><li>thorough technical knowledge of the regulatory pathways
  72. 72. effective contacts with government officials
  73. 73. excellent industry networks including manufacturers and distributors
  74. 74. ability to integrate all of this into effective strategy
  75. 75. able to execute on your behalf</li></ul>9/28/2010<br />
  76. 76. Pathways to Success<br />Only companies with vision and expertise will maximize success with:<br /><ul><li>Import and Export opportunitiesopened
  77. 77. Partnerships established and nurtured
  78. 78. Timely market access
  79. 79. Sustainable, profitable growth</li></ul>You need a partner with skills and representation in China and Australia to make this happen.<br />
  80. 80. Thank You!<br />

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