Efforts to Replace Imported Medical Devices with Domestically-Produced Ones is Expected to Be Accelerated

  • 2019-06-27
Ophthalmic medical devices can be used for ophthalmic detection and treatment. Such devices mainly include intraocular lens, corneal contact lens, optical coherence tomography, corneal topographer, retinal fundus fluorescein angiography machine, YAG laser, photocoagulation laser, argon laser therapeutic machine, operating microscope, phacoemulsification machine, vitreous cutter, and retina freezer. In addition, ophthalmic medical instruments also include ophthalmic surgical instruments, such as scissors, tweezers, clip, hooks and needles.
Amid the rapid expansion of China's medical device industry, the ophthalmic medical device industry has been started from scratch and grown from small to large. And the product range of the industry has evolved from simple surgical devices to an increasingly diverse array of products that basically covers various products required to treat ophthalmic diseases. However, compared with developed countries, China as a latecomer in ophthalmic medical device industry has not put enough R&D investment in the industry. Therefore, medium and high-end products in China are more from foreign markets. The scale of domestic enterprises of ophthalmic medical devices in China is generally small, and most enterprises are not capable of large-scale production and do not have any competitive strength. They are plagued by insufficient investment in scientific research and poor innovation ability.
▍ Industrial characteristics
The ophthalmic medical device industry of China has the following characteristics. First, this industry in China enjoys great potential. The popularization of electronic products, aging population, and increase in myopia rate has led to a rise in the prevalence of eye diseases. This has prompted a surge in the demands of ophthalmic medical services, thus giving a boost to the market demand of ophthalmic medical devices. In addition, with the ongoing development of the ophthalmic medical device industry and the improvement of the techniques, the efforts to replace imported medical devices with domestically-produced ones are being accelerated.
Second, this industry is blighted by high level of regional concentration. The growth of ophthalmic medical device industry has been accompanied by several industry cluster districts and development zones of manufacturing industry. Ophthalmic medical device manufacturing enterprises are mainly concentrated in East China, South China and North China due to their high economic development level and scientific and technological level, and abundant talents. By virtue of high degree of economic development, population distribution and government's supporting measures, China's medical resources are mainly concentrated in East China, North China, Central China and South China. Therefore, the market for ophthalmic medical devices in China is mainly concentrated in the above regions.
Third, the industry is embroiled in a low market concentration With the gradual improvement of China's medical care system and the advancement of tiered diagnosis and treatment policies, the demand for ophthalmic medical device products has been on an upward trend. In addition to Grade 3A hospitals and specialized hospitals, community hospitals and hospitals at county and municipal level also need to purchase ophthalmic medical devices and replace old devices with new ones. However, enterprises generally only enjoy a higher market share in a specific field, and cannot handle the demands of the whole industry and provide a comprehensive range of products.
▍ Market scale
From 2015 to 2017, with the aging of China's population and the increase in the number of patients with eye diseases, the demand for ophthalmic medical devices of ophthalmology-related medical institutions has been on the rise. In 2017, ophthalmic medical devices had a market value of CNY 19.04 billion, a year-on-year increase of 19.4%.
From 2015 to 2017, the scale of China's artificial intraocular lens has been expanding, with a rising growth rate. In 2015, artificial intraocular lens had a market value of CNY 2.124 billion, with a year-on-year growth of 18.7%; in 2017, the number rose to CNY 3.312 billion, representing a growth rate of 26.2%. In 2015, corneal contact lens had a market value of CNY 2.838 billion, with a year-on-year growth of 16.7%; in 2017, the value lifted to CNY 4.12 billion, demonstrating a growth rate of 22.1%.
In terms of the market share of product type, in 2017, the corneal contact lens had a market share of 21.6% in the total ophthalmic medical device market in China, the intraocular lens had a share of 17.4%, and other medical devices had a share of 61.0%.
In 2017, Novartis had a relatively high market share (7.2%) in the medical device market in China, followed by Baushe & Lomb (6.8%), Johnson & Johnson (5.9%), Abbott, Topcon, Hydron, Global Vision, 66 Vision Tech, Weicon and OVC Tech.  
During the period from 2014 to 2017, despite of the fact that China was seen a rapid growth in the ophthalmic medical device market, and the export and import scale of that device, due to the less advanced technology of home brands, most devices were middle to lower-end products, and the import scale was much higher than the export scale. In 2017, the amount of imports of ophthalmic medical devices to China was CNY 7.56 billion, and the amount of exports from China was CNY 3.18 billion.
As for the market share by region, most ophthalmic medical devices were expensive, furthermore, the product demand increased with the regional economy, ophthalmic health care level and number of ophthalmic patients. The regions that had a relatively high demand of ophthalmic medical devices were North, East and South China. In 2017, the market share of ophthalmic medical devices in East China was 26.8%, in North China was 21.3%, and in South China was 18.1%.
▍ Development trend
In recent years, the special support plan for medical devices was launched by China to encourage the medical enterprises to innovate in medical devices.  The Ministry of Science and Technology, National Development and Reform Commission, Ministry of Industry and Information Technology have considered the medical devices as a major supporting target, and supported tremendously the projects that were in line with the national industry development. The ever growing market demand forced the domestic enterprises to keep innovating in ophthalmic medical devices, so as to obtain a leading edge in the competition. In the meantime, some foreign medical enterprises moved their production and R&D bases to China via OEM or ODM. The gap between home and foreign enterprises in ophthalmic medical devices is closing, and import substitution is expected to be implemented ahead of schedule. It is expected that the market value of ophthalmic medical devices in china will reach CNY 37.54 billion in 2021.
In terms of the market demand, the rapid advance in ophthalmic medical devices was attributed to the large consumer groups and consumer demand.  With a huge population base, China owns a high number of ophthalmic patients. Due to the environmental degradation, increasing usage amount and time of optoelectronic products, ophthalmic diseases were found in more and more patients. From this point of view, considering the great market demand, China enjoys a broad prospect in the optoelectronic medical devices.
In terms of the supply and demand balance, the medical device industry applied a unique business model by basing production on sales and stocking up in a reasonable amount. As a result, the supply scale of ophthalmic medical devices had lifted in step with the demand scale from 2014 to 2017. In 2017, the supply scale of ophthalmic medical devices in China reached CNY 19.29 billion, and the demand scale reached CNY 19.04 billion.
By virtue of beneficial policy, the home-made ophthalmic products enjoyed a price advantage over the imported products, which was helpful to lower the operation cost in hospitals and medical treatment costs. On the contrary, the home-made high-end products were far away to match the imported products in reputation and quality. To this end, a series of favorable policies related to medical devices were set out by China, so as to support innovation and home-made high-end products from domestic medical enterprises, and expand the industry of domestic ophthalmic products.
Technically, most ophthalmic medical devices were precise instruments with a high level of precision. In the coming years, in order to make the ophthalmic test more precise, convenient and practical and diagnosis more simplified, the combination of optics, machinery and electronics will be a trend in the home-made ophthalmic medical devices; all instruments will also be more perfect in function. For example, the combination of Multi Spectral Fundus Imaging (MSI) and compound imaging, in the layer and depth of imaging, and the transformation from wide angle to ultra wide angle, in imaging angle, will be the innovation trend of the fundus cameras. Fundus fluorescein angiography machine will be perfected to dynamically observe the change in fundus vascular microstructure and microcirculation, as a way to predict the progress of lesion.