The Current State and Development Trends of China's Medical Imaging Industry

Medical imaging refers to the technology and process of obtaining internal tissue images of the human body or a part thereof in a non-invasive manner for medical or medical research purposes. Its earliest origin dates back to the 19th century, marked by Roentgen's discovery of X-rays and their successful clinical application, ushering in the era of physical imaging. In the following decades, X-ray imaging, magnetic resonance imaging (MRI), ultrasound imaging, and nuclear medicine imaging were invented, forming the entire medical imaging industry. Currently, the market size of medical imaging equipment accounts for approximately 16% of China's entire medical device industry, making it the largest sub-sector in China's medical device market.

Table 1 Medical Imaging Technology Development Path

Data Source: Huoshi Chuangzao, compiled from publicly available information

In current medical testing methods, medical imaging data accounts for 90% of medical information, serving as the primary source of information for disease screening and diagnosis, and an important tool for assisting in clinical disease diagnosis and treatment. Currently, medical imaging equipment can be divided into large-scale imaging diagnostic equipment and other imaging diagnostic equipment. Large-scale equipment mainly includes digital X-ray imaging (DR), computed tomography (CT), magnetic resonance imaging (MRI), and nuclear medicine (PET and composite PET-CT, PET-MR, etc.), while smaller imaging diagnostic equipment includes ultrasound and endoscopy. Due to the different imaging principles, the clinical applications of various devices also differ. The characteristics and application scenarios of various medical imaging equipment are shown in the table below.

Table 2 Medical Imaging Equipment Classification and Application Scenarios

References: "Imaging Diagnosis"

Although the domestic high-end medical imaging market is currently largely monopolized by overseas giants, especially digital subtraction angiography (DSA) equipment, with domestic equipment accounting for less than 10%, and the competitiveness of domestic products in PET-MR and PET-CT equipment, which have higher technical barriers, is also relatively weak. At the same time, however, domestic imaging equipment companies represented by United Imaging, Wandong, Neusoft, and Mindray are gradually beginning to master core technologies and are in a stage of rapid growth in host manufacturing, gradually showing signs of catching up in certain areas. For example, MRI products represented by United Imaging and Neusoft, DR products represented by Wandong, and ultrasound equipment represented by Mindray and KLS, some products have already reached world-class standards, the self-sufficiency rate of corresponding components is also continuously increasing, and various technological breakthroughs have brought great confidence and hope to the domestic imaging industry.

At the same time, the imaging equipment of foreign giants is currently in a technological bottleneck period, lacking major breakthroughs, which also provides a very rare opportunity for domestic enterprises to catch up. Currently, domestic manufacturers have achieved certain results in host manufacturing, but in the upstream of the industrial chain, such as raw materials (sensors, signal chains) and core components (X-ray tubes, detectors, generators, RF coils, etc.), the self-sufficiency rate is not high enough, and the performance still has a certain gap with international Brands, requiring continuous investment in R&D.

Figure 1 Major Domestic Imaging Equipment Manufacturers and Representative Products

Data Source: Huoshi Chuangzao, compiled from publicly available information

Figure 2 Market Share of Major Imaging Equipment

Data Source: China Medical Equipment Association

Due to the high degree of specialization, complex structure, and long and dispersed industrial chain of the medical imaging equipment industry, the domestic imaging industry had a weak industrial foundation and insufficient technological accumulation in the past, leading to the long-term monopoly of the domestic medical imaging market by imported brands. To improve this situation and enhance the innovation capacity and industrialization level of the imaging equipment industry, the state has issued a series of policies in recent years to encourage and support high-value imaging equipment. At the same time, it is listed as an important part of "Made in China 2025", fully reflecting the state's emphasis on this field.

Table 3 List of Some Medical Imaging-Related Policies

Data Source: Huoshi Chuangzao, compiled from publicly available information

From a technological perspective, the overall trend of medical imaging equipment is towards clearer, faster, more convenient, safer, and more intelligent development. Therefore, while improving hardware design and manufacturing technology, supplementing and strengthening the upstream and downstream of the imaging equipment industry chain, and improving the self-sufficiency rate, domestic enterprises should also focus on the development of intelligent diagnosis.

Marked by AlphaGo's achievements in the Go world, artificial intelligence has developed rapidly in recent years. Medical imaging diagnostic results have characteristics such as standardized formats, easy access, and utilization, and are considered one of the fastest-landing areas for artificial intelligence in medical applications. Utilizing AI's sensory cognition and deep learning technology, applying it to the medical imaging field, improving the accuracy and efficiency of radiologists' diagnoses, and reducing misdiagnosis rates are one of the important development directions of the medical imaging industry, and also one of the opportunities for China's medical imaging industry to catch up with foreign giants. With the continuous strengthening of domestic policies towards high-end medical imaging, since 2016, the popularity of AI medical imaging has been continuously rising, and more and more start-up AI companies have begun to enter this field, including some Internet giants, indicating that both capital and the industry are optimistic about the prospects of this application.

Table 4 Some AI Medical Imaging Products and Companies

Data Source: Huoshi Chuangzao, compiled from publicly available information

After three years of development from 2016 to 2019, AI medical imaging currently shows two development trends. One is that AI film reading methods are becoming more aligned with doctors' daily film reading habits and actual clinical needs, while also continuously increasing the types of diseases and organs identified. The other is the vertical extension of product functions. In addition to lesion diagnosis, AI can further provide radiotherapy and surgical planning to assist doctors in diagnosis. Therefore, AI medical imaging products have also received considerable recognition among radiologists. While continuously liberating doctors' productivity, this method also provides a solution to the current imbalance of primary medical resources, that is, by building a smart imaging platform, even primary hospitals with a relative lack of radiologists can conduct complex examinations and diagnoses.

Of course, as an application of weak artificial intelligence, AI medical imaging is still in its early stages, and some obvious problems and bottlenecks have been exposed during its development. First, the current AI process of identifying lesions is basically carried out through deep learning, that is, "feeding" the equipment various diagnostic data of different images, and continuously training the AI software through deep learning to achieve the effect of machine lesion recognition. This method, which over-relies on data, has certain hidden dangers. One is that the amount of data must be large enough, and due to differences in the condition of different patients, the image characteristics of the same disease may also change. If the amount of data training is not comprehensive enough, when encountering special cases, misdiagnosis may occur. In addition, current medical data lacks unified standards, and standardized, universally applicable rules have not yet been proposed, lacking the "4V" attributes emphasized by artificial intelligence. Therefore, although the amount of data in China is large enough, in many cases, the utilization rate and value are not very high, which has created a certain degree of uncertainty for the practical application of AI medical imaging.

Secondly, since the current national positioning of AI medical imaging products is Class III medical devices, the mainstream AI imaging software is basically still in the registration and approval stage, and the effect of commercial use has not yet been shown. In addition, whether or not it can Enter the hospital's regular procurement catalog is also an important factor affecting the commercialization and implementation of the product. On January 15 this year, "Deep Pulse Score," the first artificial intelligence medical imaging auxiliary decision-making product to Enter the green channel for innovative medical device approval of the National Medical Products Administration, received approval, setting a standard for many AI imaging products, while its commercialization and implementation still needs to be tested by the market.

Currently, China's medical imaging industry is receiving considerable attention, especially high-end imaging equipment, with significant national policy support. At the same time, the core technologies of domestic manufacturers are becoming increasingly mature, and the industrial chain is becoming increasingly complete, continuously eroding the market share of overseas giants. The technological bottleneck period of giants also provides an opportunity for domestic enterprises to narrow the gap. The boom in the application of domestic AI in medical imaging has also provided a new direction for the development of medical imaging, which may be the most promising area for China to surpass foreign countries. In terms of the commercialization and implementation of AI medical imaging, deeply binding with hospitals and obtaining corresponding income from AI intelligent recognition and auxiliary diagnostic services may be one of the ways for this product to successfully land in the market.

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