The medical devices industry is heterogeneous, innovative, and dynamic. It is commonly divided into several segments. Among the most important we include consumables, dental, diagnostic, and surgical equipment, ophthalmic, patient monitoring, diabetes care, nephrology as well as urology and cardiovascular devices.
The global market for medical devices is huge, and it will continue showing a significant growth in the future. In 2020, the total sales of medical devices were approximately USD 419,063.37 million whereas the global market size was USD 432.23 billion. The impact of COVID-19 has been unprecedented and staggering, with medical devices witnessing a negative trend regarding adoption rate across all regions amid the pandemic. The global market exhibited a decline of 3.7% during that year. However, the market is projected to increase its value from USD 455.34 billion in 2021 to USD657.98 billion in 2028. The forecasted compound annual growth rate (CAGR) of the global medical device market is expected to grow up to 6.4% in the next 5 years and more, measured in weighted local currency terms, compared to a CAGR of 5.6% related to the period 2015-2020. This result can be attributed to this market’s demand and growth, returning to pre-pandemic levels, once pandemic is over, just as the increasingly positive outlook and improvement of financial markets. Nevertheless, inflation threatens potential new business start-ups, which are vital for the medical device industry innovation, especially in recent years. Inflation reduces the availability of low interest loans, which attracts less investors, diverting money away from the market.
China Focus
China has thousands of companies producing medical devices. Many of these are small establishments producing low technology products. Leading Chinese manufacturers:
Xinhua Medical Instrument (Shinva); one China's oldest medical equipment producers
Mindray; a leading manufacturer of medical devices in China, having pioneered the introduction of pulse oximeter patient monitors.
Neusoft Medical; focuses on advanced imaging devices
Jiangsu Yuwell Science & Technology Development; provision of health management concepts and advanced product solutions
China & US Trade
Escalating trade tensions between the US and China have resulted in import tariffs on a broad range of US imported medical devices. However, a “Phase One” deal was signed on January 15, 2020, where China promised to increase purchases of US goods and services by $200 billion USD over the next two years, strengthen intellectual property protections, open its financial services sector and eliminate forced transfer of technology, among other provisions. In response, the US cancelled pending tariffs on $160 billion USD worth of Chinese goods and partially rolled back previously imposed. Pending the signing of a 'Phase One' agreement, in China suspended its previous tariffs on US imports and halved the additional tariffs that recently took effect from 10% to 5%, and from 5% to 2.5%. In addition, China's State Council Tariff Commission (SCTC) declared an exemption of 65 US products from additional tariffs from February 2020 to February 2021. Keeping this in mind, it is evident how there is a need for global harmonization of medical devices, and the reasons include: minimization of regulatory barriers, facilitation of trade between different countries and cost reduction of implementing regulations for governments and industry.
Various Categories
Consumables
The CAGR for consumables is projected to increase 3.4% during 2020-2025 in local currency terms, which will increase the value to CNY 51.2 billion by 2025. Despite the difficult economic situation, the consumables market will be upheld by sustained demand for personal protective equipment (PPE), like surgical masks and medical gloves, during the remainder of the pandemic Diagnostic Imaging
The diagnostic imaging market will expand by a 2020-2025 CAGR of 7.5% in local currency terms and 6.7% in US dollar terms, which would equate to CNY 85.6bn ($11.2 billion USD) by 2025. The CAGR for diagnostic imaging will be just below the medical device market average, however, increased funding for technology products as stated in China's 14th Year Plan will boost the market for imaging equipment.
Dental
The dental market is projected to increase by a 2020-2025 CAGR of 10.8% in local currency terms and 10.0% in US dollar terms, which should see it rise to CNY14.0 billion ($1.9 billion USD) by 2025. Pent up demand for dental products, and the widespread deferral of non-essential procedures during the pandemic will boost this market in 2021.
Orthopedics & Prosthetics Forecast
This market will expand by a 2020-2025 CAGR of 10.7% in local currency terms and 9.9% in US dollar terms, which should see it rise to CNY27.0 billion ($3.7 billion USD) by 2025. Similarly, to the dental segment, the market will be boosted by pent up demand after widespread procedure deferrals throughout 2020.
After a turbulent 2020 due to the pandemic, the medical devices industry has a favourable future ahead. China has consistently performed well in this industry, and with continuous favorable trade relations, the sky is the limit.
Thank you for reading and we look forward to working with you!
Comments