China Health Sector

Healthcare in China: Entering uncharted waters (2013) by Mckinsey & Company (Downloadable PDF)

China Healthcare

Investing in China’s healthcare system (2013) by PricewaterhouseCoopers (Downloadable PDF)

Investing in chinas healthcare system

  • According to the UKTI (2011),  the top 3 fatal diseases in China are cancer (28.53%), cerebrovascular (18.04%) and cardiovascular disease (16.29%).
  • The primary healthcare providers in China are government-run hospitals.  In addition, there are healthcare clinics that are either public hospitals or undertakings of the military or state-owned enterprises.  There are approximately 67,000 healthcare organisations in China, total hospital numbers are 27,000. China medicine Private hospitals and clinics are growing in number and catching.
  • In China, the professional end users are not necessarily the decision makers.  The key decision makers for hospitals are the top management and the purchasing department’s staff.  They are approached by medical representatives/distributors across China and abroad.  The two main methods for purchasing process are co-centralised bidding.
  • China is now the worlds 3rd largest market for medical health equipment
  • According to Espicom, by 2012 the market for medical devices will reach US$6.2 billion in China, equivalent to around US$4.6 per capita.  This remains one of the lowest per capita figures in the world.  The Chinese government’s investment in medical devices is increasing by around 13 per cent per annum.  In China, the ratio of sales volumes of medical devices to pharmaceuticals is around 1:8, while in developed countries it is generally closer to 1:1.  This highlights the great potential presented by China’s medical device market.
  • China factsThe Ministry of Health will soon launch guidelines for the procurement of medical devices.   Hospitals will no longer be allowed to select their own suppliers and only certified suppliers will be eligible to bid in tenders. Purchases of medical equipment valued at RMB 2 million or above (£150,000) will require approval by provincial health authorities and will only be bought from registered suppliers.
  • The medical device market (particularly the high-value side) is largely being supplied by multinational joint ventures and imports.  Domestic companies, although developing, are currently small, under capitalised and unable to compete at the higher end of the market.   At the present time, the manufacturing       strengths for medical equipment are still very much in the coastal areas.
  • The Chinese medical devices industry is regulated by the State Food and Drug Administration (SFDA).  Similar to other countries, medical devices are categorised into three classes. Class 1 are simple medical devices such as family use electronic devices.  Class 2 are complicated products and are those directly related to diagnostic treatment.  Class 3 are implants and life support devices.  All imported products must be registered by the SFDA in Beijing.  Sterilisation products need special approval from the Ministry of Health (MOH).
  • China factsIt is not totally impossible for a product to be registered by a manufacturer from overseas, but the process usually takes longer and can be problematic. Therefore registering from within China is recommended, which can be done either by a manufacturer itself if established in China, or by an appointed agent or distributor within China.
  • China has around 140,000 distributors of medical equipment.  Most distributors have a strong local focus. Therefore appointing a series of well-connected regional distributors is in most cases a better strategy than giving a single distributor Chinawide rights.  Finding the right partner in China helps foreign companies promote their products to end customers and hospitals in a relatively short time.
  • Traditional Chinese Medicine (TCM) has unique characteristics which interest the medical world.  It is therefore an important area for research and development for Western pharmaceutical researchers and manufacturers. There are abundant TCM resources in China and TCM research and manufacture are being strongly developed in some regions.
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