During his inspection tour in the south, General Secretary Xi proposed accelerating the localization of medical devices in healthcare institutions, aiming to drive the advancement and development of China’s medical device industry through the expansion of the domestic market. In recent years, the Chinese government has introduced a host of supportive policies and provided substantial financial assistance. However, at present, the rate of domestically produced medical devices in Chinese healthcare institutions remains unsatisfactory; foreign products still dominate the market, and China virtually has no foothold in the high-end segment.
 

Why are domestically produced medical devices unable to secure a significant share of the domestic market at high prices?

　　China’s medical equipment and device market ranks fourth globally in size. However, according to expert analysis, although the government is “controlling the scale” of public hospitals, this has not affected their “expansion” in medical devices—rather, it’s simply that different levels of medical institutions have varying configurations and models of medical equipment.

　　Meanwhile, the economy is steadily developing, and health insurance coverage continues to expand. As a result, grassroots insured individuals are increasingly demanding access to advanced, high-precision medical imaging equipment. In particular, ongoing reforms such as the integration of medical insurance, social insurance, and the “Three Insurances in One” initiative are driving the need for more medical devices. It is projected that over the next five years, the number of medical devices equipped in healthcare institutions nationwide will at least double.

　　However, data shows that in 2013, 80% of China’s high-end medical devices—such as CT scanners, mid-to-high-end monitoring equipment, 85% of laboratory testing instruments, and 90% of MRI machines, electrocardiographs, ultrasound devices, and high-end physiological recorders—were from foreign brands, with domestic products accounting for a very small share.

　　However, at that time, some high-end medical devices were exported extensively both domestically and internationally, entering mainstream markets in over 30 countries and regions including Germany, Japan, and France—but the domestic market share was not particularly promising.

　　What’s the reason? According to information released by the Prospect Industry Research Institute, the main factors are an unsupportive policy environment, insufficient investment in technology, weak innovation capabilities, and a relatively fragile industrial system.

　　Of course, this is due to “online” factors. According to the “2013 China Medical Device Industry Development Status Blue Book,” there are over 17,000 medical device manufacturers in China, and 90% of them are small- and medium-sized enterprises with annual revenues of no more than 20 million yuan.

　　Many small businesses focus on low-end products such as disposable syringes, which not only have low technological content in their production but also pose issues regarding the safety and effectiveness of their manufacturing processes and quality control.

　　The “offline” reasons stem from problems in market development: First, there is no standardized, systematic, and well-established market system, and government leadership is lacking. Second, the long-standing mindset of blindly admiring foreign products has not been broken, thereby stifling domestically produced medical devices. Third, there is little difference between the prices of domestically produced medical devices for examination and treatment and those covered by medical insurance. Fourth, many domestic manufacturers of equipment lack core technologies, making it difficult for them to compete with imported brands. Fifth, most top-tier Grade III hospitals rely on imported products to attract patients.

　　The author’s investigation into the operation of large-scale domestically produced medical equipment at several county-level hospitals also revealed that inadequate after-sales service is a significant reason why domestically manufactured medical devices are often excluded from use. For example, in a county hospital in northern Henan, a domestically produced ultrasound machine has been “dormant” for nearly half a year without receiving maintenance from the manufacturer. In five districts and eight counties of a certain city, there are nearly a thousand pieces of large-scale medical equipment, yet currently there is only one commercial repair station available. When such large-scale equipment breaks down, manufacturers must send technicians to the site for repairs, resulting in poor timeliness.

　　There is no doubt that domestic medical institutions represent a crucial market for the growth and development of our nation’s medical device industry, and they deserve serious attention and further development. However, in the author’s view, while intensifying technological and financial investments, the government must also provide strong support through relevant policies and institutional frameworks aimed at boosting the domestic medical device sector, breaking existing bottlenecks, and addressing its shortcomings.

　　Especially with regard to large-scale medical equipment, while intensifying quality supervision and improving production quality, it is essential to strengthen government leadership and step up efforts to develop the domestic market—for instance, by introducing stringent policies requiring public hospitals at different levels or hospitals designated for medical insurance to equip themselves with a certain proportion of domestically produced medical devices.

　　Reasonably differentiate the pricing for examination and treatment services between domestically produced medical devices and imported ones; give preferential treatment in medical insurance reimbursement. At the same time, place great emphasis on and strengthen after-sales service. It is recommended that large manufacturers or a consortium of several medium- and small-sized manufacturers jointly establish medical device repair stations in specific geographic regions, with permanent on-site staff to ensure prompt response to any call for assistance.

　　In this way, domestically produced medical devices are guaranteed in quality, operate efficiently, and come with low prices and affordable service fees, attracting both users and consumers. By showcasing their excellent industry image and market value in the healthcare market, these devices can gradually increase their domestic market share and thereby accelerate the rapid development of the national medical industry.