China’s MedTech industry is the 2nd largest in the world behind the US. The sales revenue for medical devices in China has risen from RMB 628 billion (USD 71.5 billion) in 2019 to RMB 734 billion (USD 83.5 billion) in 2020, with an increase of 18.3% year-on-year. An aging population, the rising treatment burden of diseases, increasing demand for modern treatment, as well as a government policy aiming at improving the quality and accessibility of healthcare, are contributing to the market growth.
The future of the medtech market in China
This fast-growing industry is expected to continue on an upward trajectory in the next 5 years with an average annual compound growth rate of 14% and its revenue will exceed one trillion RMB by 2023. China is thus becoming a market Swiss companies cannot afford to ignore. However, China is also one of the most difficult MedTech markets to enter. The production and use of medical devices is subject to a number of laws, regulations, strict standards, and certification processes.
What challenges should be considered?
The lack of regulatory alignment seems to be the main barrier and the pre-market approval especially for MedTech Class II and Class III products is highly time-consuming and cost-intensive. In addition, policy trends such as volume-based procurement (VBP) and a progressively localized medtech supply chain, will all be at play to shape the industry dynamics in the coming years.
With the COVID-19 pandemic accelerating the underlying trends in China’s MedTech industry, it is of utmost importance for Swiss companies to revisit their China business models in order to push future market growth.