China's Device Industry Report Card for the First Half of 2008
Chang-Hong Whitney
With half the year complete, now is an opportune time to evaluate China’s medical market and see how it has fared. First and foremost, China’s medical market is growing steadily in 2008, boasting double-digit gains all around. According to national statistics published by the National Development and Reform Commission, the medical device and instrumentation industry posted positive growth of 24.3% in the first quarter, ended March 31, compared to the same period in 2007. The central region presented bigger growth (31%) than the eastern (23.54%) and western (17.66%) regions.
Importation of foreign-made medical products also showed growth from January to May. According to statistics published by Nanjing Customs, importation of medical devices at this Chinese port increased 22.8% compared to the same period in 2007. The growth is noteworthy because it progressed in spite of the pricing controls and restrictions placed on equipment purchasing by the central and local governments. More products from Europe were purchased than those from the United States—importation of products from Europe increased 63.9%, while US imports actually decreased 0.8%.
High-end products such as computed tomography and magnetic resonance imaging (MRI) equipment still contributed the large percentage (60%) of total imports for medical products. The key driving forces for the steady increase in the environment of heavy government controls include the expanding demand in healthcare, growing disposable income among China residents and the aging population. In addition, high-end equipment purchased during the early 1990s generally has entered into the last years of useful life, prompting replacement purchases. Although Chinese companies can satisfy demands for mid-level products, high-end equipment still mostly comes from foreign manufacturers. Furthermore, the recent well-publicized earthquake in Sichuan Province partially contributed to the high import of medical products at Customs.
Movers and Shakers
Looking deeper into China’s medical device market, some global and regional companies are making the news as well.
For example, London, United Kingdom-based Smith & Nephew recently broke ground on its first China manufacturing facility in Suzhou Industrial Park, Suzhou City, Zhejiang Province. With an initial investment of $80 million, this China facility will manufacture medical devices to supply 65 countries around the world. Smith & Nephew will have plenty of internationally based neighbors there, as Suzhou Industrial Park is the location for other medical giants such as Johnson & Johnson, GlaxoSmithKline, Baxter and Eli Lilly and Company.
In terms of local medical device companies, Jiangsu Haiming Medical Equipment Company, through collaboration with the People’s Liberation Army Research Institute, has developed new equipment for use in cancer treatments; products include radiation therapy equipment, therapy simulators and double photon accelerators. The company recently released an electron accelerator (model HM-J-16)—which was jointly developed with Nanjing University—for treatment of cancer. The product’s remote monitoring and troubleshooting diagnostic system was the first to be approved in China.
Meanwhile, Changchun Optical Precision Instrument and the Physics Research Institute of China Academy of Sciences released a high-resolution fundus imaging compensation system. This instrument can clearly capture images of blood vessels of less than 3 microns, assisting in diagnosis of cardiovascular and other diseases.
Finally, Qinghua University’s bioengineering department has achieved significant progress in development of a non- invasive tissue/blood oxygen saturation instrument using a near infrared method. There are two conventional methods to measure blood-oxygen saturation: a blood-gas diagnostic test and fingertip oxygen saturation clip. The first method is a laboratory test requiring a patient blood sample. While accurate, this test cannot achieve continuous monitoring. The second method has been popular, but it measures arterial oxygen saturation at fingertips, not reflecting oxygen saturation levels in other areas of the body. The newest instrument uses near infrared spectrum technology to continuously monitor the absolute oxygen saturation value and changes in red blood cells. China is only the third country (after the United States and Japan) that manufactures this type of technology. In clinical trials, the new instrument was used to determine oxygen levels in the brain for newborn infants, for muscle injury recovery and for other surgery recovery and implants. The results of these trials validated the effectiveness of the instrument.
New Industry Standards Recently Released
Along with new technology comes a host of new standards to ensure products remain safe and effective. On April 25, the State Food and Drug Administration of China (SFDA) published 73 new technical standards for various medical devices. These technical guidelines and requirements pertain to specific products such as X-ray or ultrasound equipment, as well as implantable cardiac catheters.
The technical standards typically stipulate the technical parameters or requirements that a device must meet or satisfy. There are mandatory standards that a device must meet to be approved by the SFDA, and there are recommended standards, which manufacturers can comply with (or not) at their own discretion.
Typically jointly drafted by technical experts from SFDA testing centers and chief engineers of leading manufacturers in the industry (under the coordination and supervision of the agency’s Standard Department), the standards are product specific and often are referred to as “industry standards.” Over the years, the SFDA has continued publishing and revising standards to keep them current with the advancing technology level in China. Many of the recently published standards are new to the industry, but some are updates to existing standards. Of all these standards, 30 are mandatory (ie, device manufacturers must comply with them), while the remaining 43 are recommended.
Among the 30 mandatory standards, the newly established ones pertain to dental implants and dental materials; ophthalmology scopes; radiation treatment software; blood purification system; breast implants; and safety requirements for in-vitro diagnostic instruments. Updated standards pertain to devices such as lithotripters, cardiac implants, dialysis tubing, endoscopes, MRI, electrocardiogram machinery and gastric lavage machines.
Among the recommended standards, there are more new standards than updated ones. The newer standards include information areas such as specific bio-compounds for bio-engineering products; general requirements for surgical implantable products; special requirements for heart and blood vessel implants and stents; and in-vitro diagnostic instruments (such as automatic chemistry analyzers, blood analyzers and coagulation analyzers). Two major standards among the newly revised ones are the biocompatibility evaluation for dental equipment and risk management in application of medical devices.
All of the newly published mandatory standards will go into effect on Dec. 1, 2009, while the recommended standards will be implemented on June 1, 2009.
