Medical technology: China – from imitator to innovator

The exciting panel talk for the virtual MEDICA/COMPAMED past November was organized in collaboration with Healthcare Drinks – a networking group, that hosts events around the world and focuses on the Chinese healthcare industry. Besides our CEO Markus Wild, top-class attendees were: Chairman of Medela AG Michael Larsson; COO Glendy Wang of MicroPort; Managing Director Min Fang of Warburg Pincus; Head of Regulatory at PerkinElmer, Nancy Meng; and moderator of the panel talk and Managing Director of HTDK, William Jin. The result: an interesting exchange and discussion of topics and trends in the healthcare industry from a European and Chinese perspective. Reason enough to reflect on them here.

China recovers faster

2020 was a year with a lot of change and numerous challenges – also, and especially, in the health care industry. Economic success for some; harm for others: while innovative products, vaccines, masks, ventilators and laboratory equipment were in great demand; other medical areas were not. This applied to, for example, orthopedics, cardiology procedures and elective surgeries in general – including the demand of resources and supply chains connected to those matters. While celebrations, face-to-face meetings and a “normal” everyday life are now possible again to a large extent in China, the numbers in Europe continue to rise and there is still a lot of reliance on online communication and trade. In this context, the predictions of our CEO Markus Wild from the beginning of the COVID-19 pandemic are also interesting to read.

The situation on markets is similar: medical technology companies increasingly focus on projects in China because markets recover faster there. Regarding the field of new medical device approval, especially medical ventilators are at the forefront. Large volumes make it much easier to amortize innovation costs. Moreover, the strength of Chinese companies lies in the online sector anyway. The strategy for the coming years? Investments in China and southeast Asia. During the past year, different medical sectors, especially digital health, strongly grew in Europe, too.

Localization: China and Europe

Especially in times of Corona, international logistics processes are complicated to manage, default risks are high and prices have risen dramatically. The pandemic has further spurred already existing tendencies toward local production, which additionally has a positive effect on the environment. An essential factor on site is the staff because they understand the local culture. For good cooperation, partner companies need to understand both Western and Eastern cultures, such as our team in Shanghai.

Shanghai before Corona – but it already looks like this again now

Know-how about local conditions is essential, particularly for joint ventures – and Chinese companies therefore already express great interest in M&As with Europeans. A keyword for China’s success is convergence. The experts on the panel are of the mind that Chinese products of the premium sector are approaching European characteristics in terms of quality, as processes are optimized there quickly. Follow the master – but what follows after you have caught up with the master?

Weighing up between standards and the economy

Interest and demand on Chinese markets have risen everywhere – even or particularly in times of the crisis. The new investment agreement between China and Europe is intended to facilitate access to Chinese markets in the future. How is faster market access in China achieved? Regulations and corresponding control mechanisms in the EU are significantly stricter and not easy to comprehend for Chinese manufacturers. This applies to the new MDR approvals in particular: they are expensive and take a long time – rules for medical devices are challenging, especially for small and medium-sized companies.

Due to the extensive preparation of existing products for MDR, innovative projects in Europe have been put on hold since years – innovation backlog. That’s why business in China is perceived as a temporary solution: the path from idea to market is noticeably shorter. The RCEP trade agreement between China and several Asia Pacific countries is also supposed to simplify business activities. This is likely to further strengthen Asia’s status as a region: people look for post-pandemic growth opportunities. Standards for working conditions and the environment have not been set in the agreement. On the other side: EU standards that on the one hand impede medical technology innovations, but on the other hand are supposed to ensure fair conditions. Does it have to be an ‘either/or’ kind of arrangement? Fairer conditions everywhere thanks to an expansion of international cooperation – we are contributing to a solution with our company locations in Germany and Shanghai.

Thinking Ahead Project 5 | Reducing medical waste.
Innovation VS Optimisation, a medical innovation workflow for beginners

Jule

Jule writes about design processes and our medical design projects.

Originally written by Jule Opp, 27. November 2020. Last updated 25. January 2021

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