Analysis of the Domestic and International Medical Device Industry in 2019 (Part 1)

With the improvement of global residents' living standards and the strengthening of medical care awareness, the demand for medical devices continues to grow. In recent years, although global economic development has been sluggish, the global medical device market has shown a steady growth trend, especially the domestic medical device market, which maintains a high-speed growth trend and has huge development potential.

I. Overview of the Global Medical Device Market

1. The global medical device market continues to grow, with the United States and Europe accounting for the majority of the market share.

In terms of the global distribution of the medical device market, the medical device industry in developed countries and regions such as Europe and the United States started early. Residents have relatively high income and living standards, and have high requirements for the quality and service of medical device products. The market size is huge, and demand growth is stable.

In 2017, the global medical device market size exceeded US\u00a0$400 billion, and in 2018, it reached US\u00a0$427.8 billion. It is expected to reach US\u00a0$450 billion in 2019.

Figure1 Global Medical Device Market Size (Evaluate MedTech)

2. IVD is the highest-selling sub-sector globally

From the perspective of various sub-segments of the medical device industry,IVD is the highest-selling sub-sector in the medical device industry, with sales of US\u00a0$52.6 billion in 2017; followed by the cardiovascular industry, with sales of US\u00a0$46.9 billion; and imaging devices, with sales of US\u00a0$39.5 billion, ranking third.

Figure2 2017 Global Medical Device Sub-segment Market Share

II. Overview of China's Medical Device Market

(I)In 2018, China's medical device market exceeded 500 billion yuan, with a growth rate far exceeding the global level.

With the increase in per capita disposable income, the increase in medical demand due to population aging, and the improvement of medical insurance coverage and depth, China's demand for medical devices will continue to increase. At the same time, in terms of policies, encouraging innovation and technological upgrading of medical devices has opened a green channel for domestic innovative medical devices, promoting import substitution, and is expected to break the monopoly of foreign products in many fields. Overall, demand-side and policy-side factors jointly promote the rapid development of the domestic medical device market.

From 2014 to 2018, China's medical device market maintained a high-speed growth trend. In 2014, the market size of China's medical device industry was 255.6 billion yuan. By the end of 2018, the market size of China's medical device industry reached 530 billion yuan, and it is expected to exceed 900 billion yuan in 2022.

Figure3 2014-2022 China Medical Device Sub-segment Market Size

2. Compared with the global level, IVD and high-value consumables have huge development space.

From the perspective of medical device sub-sectors, China's share of low-and mid-range medical equipment is the largest, while high-value consumables,China's share of IVD is only 20% and 11%, respectively, which is relatively large compared to the global level, and there is significant room for development.

Table1 2018 Sales of China's Medical Device Sub-segments

Figure4 2018 Market Share of China's Medical Device Sub-segments

3. China's leading medical device companies have reached a certain scale, but there is still huge room for development compared with international leaders.

Among the 35 domestic listed medical device companies, 17 companies had main revenues exceeding 10 billion yuan in the first half of 2018. Among them, Mindray Medical ranked first with 13.753 billion yuan, a year-on-year increase of 23.09%. It is worth noting that among these 17 companies with main revenues exceeding 10 billion yuan, there are 8 listed medical device companies engaged in in-vitro diagnostic reagents.

China's listedThe total revenue of the top 10 medical device companies in 2018 was 46.262 billion yuan, which is far less than the revenue of Medtronic (US\u00a0$29.7 billion) in 2017. Overall, China's leading companies have a large gap compared with international leaders, and there is huge room for future development.

Table2 Main Revenue TOP 17 of China's Listed Medical Device Companies

4. Significant agglomerated development of China's medical device industry

With the development of China's medical device industry, several medical device industrial clusters and manufacturing belts have been formed across the country. The Pearl River Delta, the Yangtze River Delta, the Beijing-Tianjin-Hebei region, and Central China have become China's four major medical device industrial clusters.

According to incomplete statistics, the sum of the total output value and sales of medical devices in these four regions accounts for more than80% of the national total. Due to the different conditions they possess, these four major industrial clusters show obvious regional characteristics.

Figure5 Distribution of Medical Device Industrial Parks in China

IV. Summary

With the improvement of residents' living standards and the strengthening of medical care awareness, the demand for medical device products continues to grow. The global medical device market size is steadily increasing, and it is expected thatit will reach US\u00a0$450 billion in 2019.

With the increase in Chinese residents' disposable income, the increase in medical demand due to population aging, and the improvement of medical insurance coverage and depth, China's demand for medical devices is stronger than the global average, and it is expected thatit will exceed 600 billion yuan in 2019. Overall, China has laid a foundation in terms of regional industries and leading companies. However, there is still room for development in terms of technological level, industrial scale, and layout in key sub-sectors compared with the global level.