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1、Feb 2024Insights into Chinese Medical Device Companies Going Global Insights into Chinese Medical Device Companies Going Global-Popular Target Markets Overview and Key Success FactorsPopular Target Markets Overview and Key Success Factors2 2024.For information,contact Deloitte China.IntroductionChin

2、ese medical device companies are facing many challenges in the domestic market,such as severe homogeneous competition in low-value consumables and weak R&D capabilities in imaging diagnostic instruments.Meanwhile,the growth potential of overseas medical device markets remains promising resulted by f

3、actors such as large incremental segmented markets,and price-advantage of Chinese medical devices products in comparison to the oversea products due to higher overall pricing environment in the global markets.Therefore,the globalization of Chinese medical device companies is imperative.To enable Chi

4、nese medical device companies to select the appropriate target market,grow steadily in the target market,and showcase the competitiveness of made-in-China products,Deloitte China Life Sciences team selected seven popular target markets in the global medical device industry,including the United State

5、s,Germany,France,the United Kingdom,Brazil,Malaysia,and Singapore.Deloitte China has collaborated with Deloittes Life Sciences teams from the regional offices for several months to complete the report Insight into Chinese Medical Device Companies Going Global Popular Target Markets Overview and Key

6、Success Factors.The report presents in-depth research on the macroeconomy,healthcare system,market overview,regulatory system and other elements of the suggested target markets,demonstrates the characteristics of each market,analyzes the main models of Chinese medical device companies entry into var

7、ious markets,highlights the main challenges faced by Chinese medical device companies in the market,and outlined the key success factors and implementation suggestions for Chinese medical device companies to expand their oversea business.Deloitte is committed to escorting Chinese enterprises going g

8、lobal and providing services and support for the globalization of Chinese medical device enterprises through enriched overseas experience,in-depth industry insights and strong professional capabilities.Stanley Dai,Deloitte China deputy CEO,Deloitte China Chief Strategy Officer,andDeloitte China Cons

9、ulting CEO,notes that Chinese players are increasinglyproceeding towards globalization,with the vigorous development of the domesticmedical device market.“The core of Made in China is changing along with thetrend of Chinese enterprises going global,”he says.“It now holds a differentmeaning of high-t

10、ech represented by Chinese medical technology,in contrast withthe traditional manufacturing products of the past.This evolution is continuouslybringing new strength to the broad group of Chinese companies that aspire toexpand their businesses in overseas markets.”Jens Ewert,Deloitte China Life Scien

11、ces&Health Care Industry leader,says,Thegoal in globalization of Chinese medical device companies is not only to expandmarket share and enhance brand impact,but also an important approach forenterprises to enhance their global competitiveness and achieve long-termsustainable development.“Carrie Xiao

12、,Deloitte China Life Sciences Sector leader and Consulting leader,adds,“In the process of going overseas,Chinese enterprises need to formulate a far-sighted strategic plan,build a stable operating system,and establish strong supportfunctions to achieve sustainable globalization development goals.”“D

13、eloitte China will continue to collaborate with life sciences teams in othermember firms,incorporate project experience and local research results to providestrong and localized support for Chinese medical device companies going global.”3 2024.For information,contact Deloitte China.Contents1The Need

14、 for Chinese Medical Devices to Go Global2Overview and Characterization of Popular Target Markets3Success Factors of Going Global4Contact Us4 2024.For information,contact Deloitte China.Globalization of China Medical Device Companies48%61%77%88%90%52%39%23%12%10%0%10%20%30%40%50%60%70%80%90%100%Micr

15、oPortMindrayWeigaoUnited ImagingLepu Medical19%33%44%49%51%81%67%56%51%49%0%10%20%30%40%50%60%70%80%90%100%Philips Diagnosis&TreatmentRoche DiagnosticsGE HealthcareJohnson&Johnson MedtechMedtronicLeading Chinese Medical Device Companies-Share of Global RevenueLeading Global Medical Device Companies

16、Share of Global RevenueInternationalDomesticInternationalChinaReporting Period:FY2022The average percentage of international revenue of Chinas leading medical device companies is between 20-30%,while the averageproportion of international revenue of Global leading medical devices companies is betwee

17、n 50-60%.There is a large gap in the share of international revenue of leading enterprises in Chinas medical device field in comparison with leading international medical device enterprises,and the globalization potential for Chinas medical device companies is significant.Source:Annual Report(Report

18、 Period FY2022),Deloitte Analysis5 2024.For information,contact Deloitte China.The Need for Chinese Medical Device Companies to Go GlobalMultiple Challenges in the Chinese Medical Device MarketDomestic challengesOverseas opportunitiesMassive Potential in the Overseas Medical Device MarketVast overse

19、as market expansion potentialHigher margins and stability in product pricesSignificant growth potential for Chinese companies on oversea market penetrationChinese devices cost-performance advantageEnhanced overseas recognition of Chinese brands during the COVID-19 pandemicImport-reliant diagnostic i

20、magingWeak R&D innovation capabilitySmall and scattered low-value-consumable companies Severe homogenization competitionLow import substitution rate in the patient aid sectorFocus on middle-and low-end productsOrthopedic device price plummets after centralized procurementStruggling non-top firmsSour

21、ce:Deloitte Analysis6 2024.For information,contact Deloitte China.Multiple Challenges in Chinese Medical Device MarketChinese Medical Device Segment Market Share(2021)Although the diagnostic imaging sector has a significant market share,middle-and high-end imaging devices remain reliant on imports d

22、ue to their high R&D innovation requirements and account for the largest proportion(31%)of imported medical devices28%29%19%13%8%4%Other Medical DevicesDiagnostic ImagingMedical ConsumablesPatient AidsOrthopedics and ProstheticsDental DevicesUSD30.1bnImport-reliant diagnostic imaging Weak R&D innova

23、tion capabilitySmall and scattered low-value-consumable companies Severe homogenization competitionLow import substitution rate at the patient aids sectorFocus on middle-and low-end productsOrthopedic device price plummets after centralized procurementStruggling non-top firmsImport reliance due to w

24、eak R&D capabilityChinese market monopolized by foreign brandsIn 2021,Chinas middle-and high-end medical imaging market was monopolized by GE,Philips and Siemens(for example,in the CT sector,CR3 was 70%)Although numerous Chinese market players specialize in low-value consumables,over 90%of them are

25、small and medium sized,with annual revenues between RMB30 million and RMB40 millionSmall and medium sized Chinese playersFierce homogenization competitionWith updated technology,increased healthcare demand and tightened regulation in the future,scale manufacturing capacity and cost control ability b

26、ecome companies critical success factors amid fierce product homogeneity competitionIn the patient aids sector,Chinese companies mainly produce middle-and low-end products and their capability to develop products with higher technical barriers,such as pacemakers and ventilators,still needs enhancing

27、.The domestic substitution is progressing slowlyFocus on middle-and low-end productsLow import substitution rateTake pacemakers as an example.Their localization rate is only 5%.Medtronic,Abbott,and Boston Scientific account for over 80%of the market share,while only three Chinese companies have appr

28、oved products,including LepuMedical,LifeTechScientific and ChuanglingHeart Rhythm Management Medical DevicesOrthopedics is a key sector for volume-based purchasing,such as joint prostheses,spinal devices and sports medicine devices.Centralized procurement focuses on orthopedic devicesPrice plummetsV

29、olume-based purchasing slashes prices.In 2022,the joint prosthesis price slumped by 82%YoY on average.As top companies gained market share,other companies must make their cost control and technology R&D more competitiveSource:Open data,Deloitte Analysis7 2024.For information,contact Deloitte China.P

30、otential in Overseas Medical Device MarketBroad Overseas MarketThe global medical device market totaled over USD480 billion in 2021,with the U.S.as the largest market(40%)and Western Europe as the second largest(25%)Large segment expansion potentialIn segment terms,domestic and overseas markets diff

31、er in segment expansion potential.For instance,the orthopedic device segment can expand by eight timesPromising and Attractive Overseas Medical Device MarketHigh product pricesMedical device prices overseas are higher than those in the domestic market.For example,the coronary stent price in the Unit

32、ed States is about 6-10 times that in ChinaStable pricesMedical device prices overseas are stable.For example,Edwards SAPIEN 3 valve(for Aortic Stenosis)has maintained its unit price at USD32,500 since its introduction in 2011Chinese companies room for overseas expansionProducts offered by Chinese m

33、edical device companies have price advantage in comparison to products with similar quality standard and functionalities provided by leading Global medical device companies.Chinas medical device enterprises have great potential in globalization,the average international revenue of the leading enterp

34、rises only account for 20-30%Chinese devices great cost-performance advantageChinese medical devices have improved performance and competitive price.Chinese ventilators,for example,achieved favorable balance of trade,with BMC Medical(marketing with self-brand)and Mehow(as ResMed component supplier)a

35、s typical companiesEnhanced overseas recognition of Chinese medical devices during the COVID-19 pandemicOverseas markets widely recognized Chinese medical devices during the COVID-19 pandemic,especially low-value consumables with low technical barriers and middle-and low-end medical equipment,laying

36、 a solid foundation for Chinese medical device companies to go globalKey InsightsUnder the price control through centralized procurement,Chinese medical device companies may actively expand overseas:Through objectively analyzing product superiority and developing targeted global strategy schemeThe c

37、ompanies already recognized by the market may further enhance their competitiveness by quickly improving their R&D,manufacturing,and supply chain capabilitiesSource:Open data,Deloitte Analysis8 2024.For information,contact Deloitte China.Openness of Overseas Medical Device MarketEstablishment regist

38、rationInvestigational Device Exemption(IDE)for clinical studiesMedical device listingMedical Device Reporting(MDR)Premarket approval*Mainly on Class II and III devicesLabeling requirementQuality System regulationInclude GMS,GMP,etc.Australia,Brazil,Canada,Japan and the US collectively host a Medical

39、 Device Single Audit Program(MDSAP)which allows auditing organizations to conduct a single regulatory audit of a medical device manufacturer that satisfies the relevant requirements of the regulatory authorities participating in the program.Regulatory requirements for medical device manufacturersThe

40、 global MedTech industry is a relatively open market.Most countries adopt similar regulatory requirement procedures despite the difficulty(time&efforts needed)of product registration varies.The difficulty for product registration highly depends on the classification of the specific medical devices(e

41、.g.,Class I,II,III).Market Access OverviewSource:Open data,Deloitte Analysis9 2024.For information,contact Deloitte China.Contents1The Need for Chinese Medical Devices to Go Global2Overview and Characterization of Popular Target Markets3Success Factors of Going Global4Contact Us10 2024.For informati

42、on,contact Deloitte China.Southeast Asia,Europe and North America are top destinations,while emerging markets,such as South America,Africa and the Middle East,are showing potential來源：公開數據，德勤分析EuropeSoutheast AsiaNorth AmericaLatin AmericaThe Chinese government introduced logistics and financial poli

43、cies to encourage Chinese companies to go globalThe U.S.has the largest medical device market and is the global leader in R&D and innovative technologiesWith a developed economy,strong consumption power and complete facilities,the United States is the worlds largest medical device market and Chinese

44、 devices major consumerTherefore,despite factors such as the geopolitical risks,the United States is still the preferred choice for many leading Chinese medical device companies to go overseasBrazil,Latin Americas largest economy,urgently needs to develop its medical device marketBrazil is highly ur

45、banized,and more than half of Brazils population is considered middle classBrazil is the worlds eighth-largest healthcare market and Latin Americas largest medical device marketChinese companies expanding in Brazil account for only 1%,far lower than those from the U.S.,Japan and other regions,with r

46、oom for expansion China-Brazil agreements and policies,such as local currency settlement and taxation agreements,facilitate Chinese companiesThe UK,France and Germany have developed medical device industries that complement Chinese companies strengthAs the traditional core markets of Europe,the UK,F

47、rance and Germany boast solid economic strength,leading international position,high manufacturing efficiency and complete infrastructureAlthough some European countries have tightened policies on Chinese investment due to geopolitical factors,Europe is still an important market to enhance Chinese co

48、mpanys product,technology and service capabilities,and brand valueMany Southeast Asian countries and China entered into the Regional Comprehensive Economic Partnership(RCEP)for close cooperation;Singapore and Malaysia are the top destinations for device companies to extend their business presence in

49、to Southeast AsiaWith many ethnic Chinese,mature markets and high consumption power,Singapore and Malaysia are more receptive to Chinese productsIn Singapore,resources and facilities are complete,trade is free and taxes are lowPolicies and related institutions(Investment Development Authority,Chines

50、e Chamber of Commerce,etc.)facilitate Chinese companiesAs the business center of Southeast Asia,Singapore can be the gateway to the Southeast Asian market11 2024.For information,contact Deloitte China.In terms of market size,the European and American medical device markets are large and mature,and e

51、merging markets,such as South America and Southeast Asia,show a high growth rate and development potential Source:Open data,Deloitte AnalysisCountryMarket Size 2021(USD bn)2021-2026CAGRHealth Spending Per Capita 2022(USD)U.S.201.06.8%13,341Germany34.26.5%6,135France17.86.4%4,926UK14.28.0%4,827Brazil

52、4.15.2%963Malaysia1.98.0%520Singapore0.78.8%3,506AfricaUSD11.5 bn6.11%Southeast AsiaUSD12.2 bn6.98%AsiaUSD143.1 bn5.97%EuropeUSD160.7 bn3.85%North AmericaUSD216.6 bn 4.23%U.S.USD201 bn6.8%BrazilUSD4.1 bn5.2%South AmericaUSD25.8 bn6.34%UKUSD14.2 bn8.0%GermanyUSD34.2 bn6.5%France USD17.8 bn6.4%Malaysi

53、aUSD1.9 bn8.0%SingaporeUSD0.7 bn8.8%12 2024.For information,contact Deloitte China.Popular Target Market U.S.(1/4)Source:Open data,Deloitte Analysis Macroeconomy1Patient OverviewGDPPayer OverviewThe morbidity of NCDs,such as dementia,diabetes and some cancers,has been rising in recent years.U.S.Germ

54、anyFranceUKBrazilMalaysiaSingaporeMacroeconomy&Healthcare SystemMedical Device Market OverviewMedical Device Regulatory SystemMarket Entry Models&ChallengesHealthcare SystemUSD25.46 trillionGDP(Gross Domestic Product)2.2%YoY GrowthUSD76,500GDP per capitaTotal population:340 millionUSD13,341Health sp

55、ending per capita16.9%Health spending as a share of the GDP0.4%YoY Growth17%Percentage of seniors2Notes:1.Macroeconomic data source from statistics for 2022;2.Percentage of seniors refers to the percentage of the population aged 65 and olderDemographicsHealth SpendingIn 2022,cardiovascular diseases,

56、cancers,accidents and COVID-19 are the leading causes of death in the United States;the remaining leading causes were stroke,chronic lower respiratory diseases,Alzheimers disease,diabetes,chronic liver disease,etc.Life expectancy for the U.S.population in 2021 was 76.4 years,a decrease of 0.6 year f

57、rom 2020.50.1%5.5%18.9%15.4%1.9%8.3%Employer Non-groupMilitaryUninsuredPrivatePublicUninsuredHealth Insurance Status Distribution of the Total U.S.Population In 2021The U.S.does not have universal health insurance:Health care costs are covered through different private and public insurance programs.

58、The insured population of the U.S.is covered under employer-sponsored,non-group,and publicly funded health insurance.Private payers are dominating:Private(nearly 70%)is the main form of health insurance coverage among the U.S.population.The health insurance market is highly concentrated,where the to

59、p five insurers have a combined market share of nearly 50%Public insurance only covers some groups:Medicaid:Mainly provides health coverage to eligible low-income individuals or families,and the benefits provided include outpatient/inpatient hospital services,physician services or emergency hospital

60、 services,prescription drugs,etc.Medicare:The largest health insurance payer in the United States,initially covering people aged 65 or older,regardless of income or medical history,but now expanding to citizens under 65 with permanent disabilities and end-stage renal diseaseMedicaidMedicareCardiovas

61、cular diseases,cancers,and COVID-19 become leading causes of death Non-communicable diseases(NCDs)riseLife expectancy falls13 2024.For information,contact Deloitte China.29%7%31%12%11%10%7.7%7.3%6.6%6.4%6.3%6.1%Total6.8%Popular Target Market U.S.(2/4)01002003002016201720182019202020212022E2023F2024F

62、2025F2026F6.4%6.8%Market Size(in USD billion)U.S.Medical Device Market Size ForecastOther Medical DevicesDiagnostic ImagingMedical ConsumablesPatient AidsDental DevicesKey Growing SegmentsSegments:The U.S.medical device segments growth rate varies slightly,with a CAGR of 6.8%from 2021 to 2026;the se

63、ctors of other medical devices and diagnostic imaging are growing rapidlyMedical Device Imports:Imports accounted for approximately 30%of the U.S.medical device market,reaching a record high of USD63 billion in 2021;Mexico was the largest supplier(representing 18.1%of total imports),and imports from

64、 the EU accounted for one third,Ireland being the leading supplier in the EU(11.8%)China Exports:China was the second largest medical device supplier to the U.S.(12.5%).Chinese suppliers featured prominently in the patient aids sector(over a quarter of the import total),as well as the sectors of oth

65、er medical devices,medical consumables,and dental devicesUSD201 bnKey Growth DriversEconomy:The worlds largest economy/consumer market,high R&D investment,and vital innovation driving forceHealthcare Market:Continuous growth and aging of population,and increasingly common chronic diseases,boost dema

66、nd for health care;high health spending per capita and as a share of GDP reflect American peoples strong health consciousness;the healthcare system actively uses new technologies and novel devices to improve health care levelPolicy:The 21st Century Cures Act helps promote basic research,therapy deve

67、lopment,and achievement transformation,and accelerates the approval of novel devices;new Medicare rules expand the novel device coverage;policy support promotes the formation of regional innovation centers(e.g.,California,Minnesota)2021-2026 CAGRMarket Segment Size in 2021Source:Open data,Deloitte A

68、nalysis Medical Device Market OverviewMacroeconomy&Healthcare SystemMedical Device Market OverviewMedical Device Regulatory SystemMarket Entry Models&ChallengesU.S.GermanyFranceUKBrazilMalaysiaSingaporeOrthopedics and Prostheses14 2024.For information,contact Deloitte China.Popular Target Market U.S

69、.(3/4)Marketing PolicyFDAs current Good Manufacturing Practices(GMP)require any domestic or foreign manufacturer to establish a complete quality system for the design,manufacturing,packaging,labeling,storage,installation,and servicing of medical devices marketed in the United States.The regulations

70、make sure that a medical device is safe for use and effectiveSource:Open data,Deloitte Analysis Medical Device Regulatory SystemMacroeconomy&Healthcare SystemMedical Device Market OverviewMedical Device Regulatory SystemMarket Entry Models&ChallengesMedical Device RegulatorU.S.Food and Drug Administ

71、ration(FDA)As a comprehensive consumer protection agency of the U.S.federal government,the FDA has the Center for Devices and Radiological Health(CDRH)to regulate firms that manufacture,package,or sell medical devices in the United States.Registration PolicyClass I General ControlsAssuring effective

72、ness and safety(approximately 47%)Class II Special ControlsSubject to FDA requirements or industrial standards(approximately 46%)Class III Strict ControlsGMPand PMA are required(approximately 7%)U.S.GermanyFranceUKBrazilMalaysiaSingaporeFDA classifies medical devices into Class I,II,and III,dependin

73、g on the intended use of the device and the risk the device poses to the patient and/or the user.Regulatory control increases from Class I to Class III.The device classification regulation defines the regulatory requirements for a general device type.FDA has established classifications for approxima

74、tely 1,700 different generic types of devices.U.S.Agents:Any foreign medical device or drug facility must register with FDA and identify a U.S.agent before entry into the U.S.The responsibilities of the U.S.agent include assisting the FDA in communications with the foreign facility;the agent has a l

75、egal role,but is not included in the product labelingRegistration Accelerating Pathway:Substantial Equivalence:For Class II and Class III devices,if the information submitted to the FDA demonstrates that the new device is as safe and effective as the legally marketed device,the PMA and clinical tria

76、ls are not required,but a 510(k)must be submitted to FDA with a performance test conducted.The approval lasts 90 daysBreakthrough Devices Program:For novel medical devices that have the potential to provide more effective treatment or diagnosis of life-threatening or irreversibly debilitating diseas

77、es or conditions,when complying with PMA,510(k)and De Novo statutory standards,manufacturers can expect a prioritized review of their submission and be offered an opportunity to interact with FDA experts to efficiently address topics as they arise.RegulatorFDACenter for Devices and Radiological Heal

78、thCenter for Biologics Evaluation and ResearchCenter for Drug Evaluation and ResearchCenter for Food Safety and Applied Nutrition Office of Policy,Office of Strategic Partnerships&Technology Innovation,Office of Product Evaluation&Quality,Office of Communication&Education,Office of Science&Engineeri

79、ng Laboratories,Office of Management15 2024.For information,contact Deloitte China.Local subsidiariesDistributorsOEMPopular Target Market U.S.(4/4)Macroeconomy&Healthcare SystemMedical Device Market OverviewMedical Device Regulatory SystemMarket Entry Models&ChallengesMajor Market Entry Models of Ch

80、inese CompaniesMajor Challenges in U.S.MarketSource:Open data,Deloitte Analysis MindrayMedical established subsidiaries and offices in the United States and R&D centers in Silicon Valley,Seattle,and New Jersey.Mindray is building a leading cross-system medical product innovation system(OBMmodel)cove

81、ring planning,R&D,and registration.Mindray Medicals professional direct marketing team partnered with the four major Group Purchasing Organizations(GPOs)in the U.S.to make its products cover nearly 10,000 terminal medical institutions in the U.S.ZhonghongMedical,which specializes in disposable prote

82、ctive gloves for medical and industrial use,partners with large American medical device distributors(ODM model),such as Cardinal Health and McKesson,to develop,design,and produce customized products distributors sell and deliver to end customersOSSIFER equipped with workshops and equipment that comp

83、ly with GMP standards,provides Class II and III sterile medical consumables OEM services for medical device manufacturers in the U.S.Local operationInformation securityFor Chinese medical device companies interested in tapping into the U.S.market,there is a need to build local operations(especially

84、R&D,clinical,commercialization and other functions,in addition to sales and marketing)as early as possible and gradually enhance brand awareness and influence U.S.GermanyFranceUKBrazilMalaysiaSingaporeWith population aging and healthcare technology innovation,payers incur increasing health care cost

85、s and must exclude some medical devices(such as optional medical devices and rehabilitation devices)from coverage.Chinese medical device companies must have a deep understanding of American insurers specific medical device reimbursement policies to improve product accessibilityThe U.S.has strict pat

86、ient privacy protection law,HIPAA(Health Insurance Portability and Accountability Act).For Chinese medical device companies,any product that stores patient data must strictly comply with HIPAA information security requirementsThe impact of the COVID-19 on the supply chain resulted in medical device

87、supply shortage and surging material costs.As the U.S.government directed manufacturing to return to the U.S.through administrative measures and subsidies,Chinese medical device companies will face increasing competition from U.S.local firms in the future,and cross-border biological information and

88、product transmission will be increasingly regulatedAmerican consumers have a high awareness of rights protection and numerous medical dispute lawyer teams are available.If any product violates regulations and harms consumer rights,the manufacturer will face huge legal costs and damagesSupply chain l

89、ocalizationTightened reimbursementComplaints and legal risks16 2024.For information,contact Deloitte China.Popular Target Market Germany(1/4)Source:Open data,Deloitte Analysis Macroeconomy1Patient OverviewGDPPayer OverviewIn Germany,non-communicable diseases are the leading cause of death and morbid

90、ity,and changes in lifestyle and population structure determine their incidence rate.Cardiovascular diseases and cancers remain dominating,while the incidence rate of dementia,diabetes,mental health problems and musculoskeletal diseases is also risingU.S.GermanyFranceUKBrazilMalaysiaSingaporeMacroec

91、onomy&Healthcare SystemMedical Device Market OverviewMedical Device Regulatory SystemMarket Entry Models&ChallengesHealthcare SystemUSD4.06 trillionGDP(Gross Domestic Product)1.9%YoY GrowthUSD49,000GDP per capitaTotal population:84.40 millionUSD6,135Health spending per capita11.4%Health spending as

92、a share of the GDP1.3%YoY Growth22%Percentage of seniors2Notes:1.Macroeconomic data source from statistics for 2022;2.Percentage of seniors refers to the percentage of the population aged 65 and olderDemographicsHealth SpendingThe German populations state of health is not as good as that in many oth

93、er developed countries,and Germany is one of the countries with the highest mortality rate among developed countries(with a mortality rate of approximately 12.3 in 2022,while 8.2 in Switzerland,and 9.7 in the UK)Statutory Health InsurancePrivate InsuranceLong-term Care InsuranceCovering over 90%of t

94、he population,compulsory for low-income peopleCovering outpatient,medicine,surgery and hospitalization costs,and part of the rehabilitation treatment costsProvided by 145 competing,not-for-profit,self-governing sickness fundsProviding more benefits than the statutory health insuranceProvided by 24 f

95、or-profit insurers and 19 not-for-profit insurersCovering over 80%of the populationCovering care costs,and the amount of benefits provided depends on the care grade assessedCovering part of the care costs,and the out-of-pocket payments the insured make are generally between 30%and 40%,which are most

96、ly for the professional nursing services received in nursing homes;to be eligible for long-term care benefits,one must have been covered by health insuranceHigh mortality rateHigh incidence of cardiovascular diseases and cancers17 2024.For information,contact Deloitte China.22%8%24%18%15%13%6.8%4.6%

97、5.4%5.8%9.4%7.8%Total6.5%Popular Target Market Germany(2/4)0102030402015201620172018201920202021E2022F2023F2024F2025F6.1%6.5%Market Size(in USD billion)Germany Medical Device Market Size ForecastOther Medical DevicesDiagnostic ImagingMedical ConsumablesPatient AidsDental DevicesKey Growing SegmentsS

98、egments:The German medical device market segments shares are relatively fixed.Consumables(20%)and imaging(17%)account for a larger proportion,while the orthopedics and prostheses sector has a higher growth rateMedical Device Imports:Germany is the worlds major medical device exporter,while its impor

99、t volume is low,mainly importing consumables and other medical devices;in supplier terms,the EU is the leading medical device supplier to Germany(57%),followed by the United States(24%)and China(13%)China Exports:China(13%)was Germanys second largest medical device supplier,without considering EU co

100、untries.In 2020,diagnostic imaging devices accounted for approximately 30%of Chinas exports(mainly electrodiagnostic apparatus),and patient aid devicesnearly 25%(mainly therapeutic equipment)USD34.2 bnKey Growth DriversEconomy:As a leading economy in Europe with a high per capita GDP,Germany enjoys

101、a free economic environment and globally leading manufacturingHealthcare Market:Germany has a larger population base among European countries,and its severely aging population and high incidence of chronic diseases boost healthcare demand;Germany enjoys high-level clinical research and advanced heal

102、thcare technology,especially the technology in the imaging sectorPolicy:Germanys High-Tech Strategy 2025 promotes the integration of medical devices and artificial intelligence to further enhance medical device innovation and facilitate the development and expansion of the medical device market2021-

103、2025 CAGRMarket Segment Size in 2021Source:Open data,Deloitte Analysis Medical Device Market OverviewMacroeconomy&Healthcare SystemMedical Device Market OverviewMedical Device Regulatory SystemMarket Entry Models&ChallengesU.S.GermanyFranceUKBrazilMalaysiaSingaporeOrthopedics and Prostheses18 2024.F

104、or information,contact Deloitte China.Popular Target Market Germany(3/4)Source:Open data,Deloitte AnalysisMedical Device Regulatory SystemMacroeconomy&Healthcare SystemMedical Device Market OverviewMedical Device Regulatory SystemMarket Entry Models&ChallengesMedical Device RegulatorFederal Institut

105、e for Drugs and Medical Devices(BfArM)BfArM is responsible for administering medical device marketing,collecting,analyzing,and evaluating risks in the application of medical devices,and coordinating necessary measures based on reported adverse eventsRegulatorU.S.GermanyFranceUKBrazilMalaysiaSingapor

106、eFederal Ministry of HealthFederal Institute for Drugs and Medical Devices(BfArM)Non-active Medical DevicesIn-vitro DiagnosticsActive Medical DevicesClinical TrialsDigital Health and Nursing ApplicationLicensing 1Licensing 2Licensing 3Licensing 4Medical DevicesFederal Opium AgencyResearchInformation

107、 Technology,Clinical TrialsAdministering medical device marketing,collecting,analyzing,and evaluating risks in the application of medical devices,and coordinating necessary measures based on reported adverse eventsClassification and Registration Device Type:Non-invasive and low-risk devices,such as

108、thermometers and portable surgical instrumentsShort approval timelineClass I(Low Risk)Class II(Medium Risk)Device Type:Class IIaincludes some diagnostic facilities,dialyzers,syringes,etc.;Class IIb includes invasive devices,implantable devices,ventilators,etc.Approval Process:A device marketing auth

109、orization must be applied to the notified body,which will review the application and issue a CE certificate after review and approvalFor Class IIaproducts,the manufacturer is responsible for product design,and the notified body mainly inspects the quality systemFor Class IIb products,the notified bo

110、dy reviews the quality system and conducts spot checks on samples,while the manufacturer must submit product design documentationApproval Timeline:The registration is very complex,and the approval will last 3 to 6 monthsClass III(High Risk)Device Type:Implantable devices,heart valve prostheses,cardi

111、ac pacemakers,etc.,generally related to life supportApproval Process:The notified body will conduct a review,inspect the quality system,conduct spot checks on samples,review the product design documentation,and specially examine the product risk analysis report.The registration is the most complex,a

112、nd the approval will last 3 to 9 months19 2024.For information,contact Deloitte China.Local manufacturing facilitiesLocal firm partnershipLocal M&APopular Target Market Germany(4/4)Macroeconomy&Healthcare SystemMedical Device Market OverviewMedical Device Regulatory SystemMarket Entry Models&Challen

113、gesMajor Market Entry Models of Chinese CompaniesMajor Challenges in German MarketSource:Open data,Deloitte AnalysisBluesailMedical established manufacturing facilities and innovative R&D centers in Germany to enhance its capacity,expand product coverage(in the European region),and increase its loca

114、l presence and influenceUnited Imaging Healthcare strategically partnered with German company ITM Isotopen TechnologienMnchen AG in the fields of market,sales,imaging,and related products,focusing on innovation and optimization of precision health care imaging,and covering aspects of radiopharmaceut

115、icals,image processing,imaging digitization,patient workflow,patient management and supportWallaby Medical quickly entered the German market by acquiring German company Phenoxand leveraging its market channelsMindray Medicalannounced on Nov 30,2023,on the acquisition cutover of 75%equity of German c

116、ompany DiaSys to improve its overseas supply chain platform and make it more competitive in the German marketData reliability Local operationChinese medical device companies need to strengthen their own products clinical datacollection and analysis,and strictly comply with the German medical device

117、registration regulations(such as managing health technology assessment and complying with the requirements regarding patient groups in clinical trials)to improve registration efficiencyIn Germany,the medical device price is determined by the health insurance system.Medical device companies expanding

118、 to Germany must be capable of negotiating favorable prices and reimbursement terms with health authorities/insurance institutions and offer innovative cooperation approaches to make their products more competitive in priceAs Germany boasts the worlds leading medical device brands,and German consume

119、rs and medical companies prefer local,American,or other European companies,Chinese companies must strengthen their local manufacturing and operation capabilities in Germany to enhance market awareness and acceptanceU.S.GermanyFranceUKBrazilMalaysiaSingaporeWhen ensuring a stable supply chain,Chinese

120、 medical device companies also need to know the requirements regarding human rights and environmental standards specified in Germanys newly introduced Act on Corporate Due Diligence in Supply Chains(effective as of January 1,2023,for German companies and their suppliers)Supply chain compliancePricin

121、g and negotiation20 2024.For information,contact Deloitte China.Popular Target Market France(1/4)Source:Open data,Deloitte AnalysisMacroeconomy1Patient OverviewGDPPayer OverviewFrance runs a pluralistic health insurance system,mainly including social health insurance(Securite Sociale)and complementa

122、ry health insurance(Mutuelle):U.S.GermanyFranceUKBrazilMalaysiaSingaporeMacroeconomy&Healthcare SystemMedical Device Market OverviewMedical Device Regulatory SystemMarket Entry Models&ChallengesHealthcare SystemUSD2.78 trillionGDP(Gross Domestic Product)2.6%YoY GrowthUSD40,900GDP per capitaTotal pop

123、ulation:68 millionUSD4,926Health spending per capita10.9%Health spending as a share of the GDP0.3%YoY Growth20%Percentage of seniors2Notes:1.Macroeconomic data source from statistics for 2022;2.Percentage of seniors refers to the percentage of the population aged 65 and olderDemographicsHealth Spend

124、ingFrance Health Insurance StructureUniversal coverage(for all legal residents who have lived in France for at least three months)Administered by the French health insurance administration departmentGenerally reimbursing 70%of the health care cost;funded by employee contributions and government taxe

125、sComplementary Health InsuranceSocial Health InsuranceThe number of people with neurodegenerative diseases,such as parkinsonism,multiple sclerosis,and Alzheimers disease,is also on the riseCancer is the top cause of death in France,with more than 3 million people living with or having had cancer and

126、 more than 450,000 new cases diagnosed each yearIn 2021,the life expectancy for the French population was 82.4 years,up 0.1 year from 2020;the life expectancy difference between men and women was 6.2 years,an increase of 0.1 year from 2020Including mutual insurance,commercial insurance,etc.Taken out

127、 by individuals or employersComplementary health insurance covers costs in addition to social health insurance,and the combination of the two can usually reimburse 100%of the health care costHigh cancer incidenceRising neurodegenerative disease incidence Rising life expectancy21 2024.For information

128、,contact Deloitte China.18%10%21%19%17%16%7.2%5.8%7.2%5.4%4.6%8.9%Total6.4%Popular Target Market France(2/4)010203020152016201720182019202020212022E2023F2024F2025F5.4%6.4%Market Size(in USD billion)French Medical Device Market Size ForecastOther Medical DevicesMedical ConsumablesDiagnostic ImagingPa

129、tient AidsDental DevicesKey Growing SegmentsSegments:The French medical device market is expected to expand at a CAGR of 6.4%from 2021 to 2026;the segments of dental devices,orthopedics and prostheses,and other medical devices are growing fasterMedical Device Imports:France relies on medical device

130、imports,and its imports in 2020 accounted for nearly 80%of the market size;the U.S.is the first largest supplier,with U.S.imports accounting for nearly 20%of the market size,followed by Germany and Switzerland,and EU countries totally supplied approximately 35%China Exports:China supplies only 8%of

131、Frances medical device imports,mainly including low-value-added medical consumables,patient aids and other medical devices,with great potential for market expansion,especially to high-value-added sectorsUSD17.8 bnKey Growth DriversEconomy:As the third largest economy in Europe and the seventh larges

132、t globally,France enjoys a favorable economic environment and strong spending powerHealthcare Market:France has 20%of the EU population,which is noticeably aging,and increasingly common chronic diseases increase demand for health care;the universal health insurance and the governments healthcare ins

133、titution investment and upgrade program are improving the healthcare environment and promote the iterative facility upgradingPolicy:Frances Health Innovation Plan 2030 aims to make France the leading innovative European country in healthcare,promote the localization of medical device R&D and manufac

134、turing,and facilitate access to innovative medical devices for healthcare institutions;the 100%Sant decree intends to enable all those covered by French health insurance to access dental,optical and auditory care more efficiently,to further boost the demand for medical devices2021-2026 CAGRMarket Se

135、gment Size in 2021Source:Open data,Deloitte AnalysisMedical Device Market OverviewMacroeconomy&Healthcare SystemMedical Device Market OverviewMedical Device Regulatory SystemMarket Entry Models&ChallengesU.S.GermanyFranceUKBrazilMalaysiaSingaporeOrthopedics and Prostheses22 2024.For information,cont

136、act Deloitte China.Popular Target Market France(3/4)Product Pricing Administration PolicyIn France,manufacturers price medical devices,but the devices reimbursed by the social health insurance are priced by manufacturers together with the Comit Economique des Produitsde Sant(CEPS)by negotiation,and

137、their three-year framework agreement specifies terms of price,payment arrangements,rebates and penalties;if any manufacturer and CEPS fail to reach an agreement within 180 days,CEPS has the right to unilaterally set the devices reimbursement price ceilingSource:Open data,Deloitte AnalysisMedical Dev

138、ice Regulatory SystemU.S.GermanyFranceUKBrazilMalaysiaSingaporeMacroeconomy&Healthcare SystemMedical Device Market OverviewMedical Device Regulatory SystemMarket Entry Models&ChallengesMedical Device RegulatorFrench National Agency for Medicines and Health Products Safety(ANSM)ANSM regulates and con

139、tinuously monitors all medicines and health products on behalf of the state to ensure their safety throughout their life cycleRegulatorClass I:Most non-invasive devicesEuropean CommissionHealth and Food SafetyPublic HealthMedical Device Coordination Group(MDCG)Competent Authorities for Medical Devic

140、es(CAMD)French National Agency for Medicines and Health Products Safety(ANSM)Qualification RecognitionNotified BodiesCommunication&ExchangeCooperation&ExchangeUnder the EU Medical Devices Regulation(MDR)and In-Vitro Diagnostic Medical Devices Regulation(IVDR):The French National Agency for Medicines

141、 and Health Products Safety(ANSM),under the guidance of CAMD,regulates the medical device and in vitro diagnostic reagent market,authorizing clinical trials,inspecting the manufacturer site,and reviewing the conformity of devices that are being marketed,to ensure safety and effectivenessThe EU MDCG-

142、certified third-party notified body reviews the application information,auditing the manufacturers quality management system,and issuing the certificate of conformityRegistration PolicyAccording to devices intended use,term of use,the risk the device poses to the patient and/or the user,the EU class

143、ifies medical devices into:Class II:Surgical immersive devices and implantable devices for short-or long-term useClass III:Products derived from human or animal tissues,etc.,usually associated with life support Local representative:The EU MDR requires manufacturers outside the EU to designate a lega

144、lly authorized representative within the EU to respond to competent authorities requests,provide necessary information and documentation,cooperate in taking preventive or corrective actions,and make timely adjustments for complianceRegistration certification body:Class II and Class III medical devic

145、es are subject to the review of the third-party notified body certified by the EU MDCG,which will assess the application information,audit the manufacturers quality management system,and issue a certificate of conformity;after obtaining this certificate,the manufacturer must make the declaration of

146、conformity and the CE mark available before the product is marketed23 2024.For information,contact Deloitte China.Local subsidiariesPlatform distributionLocal M&APopular Target Market France(4/4)Macroeconomy&Healthcare SystemMedical Device Market OverviewMedical Device Regulatory SystemMarket Entry

147、Models&ChallengesMajor Market Entry Models of Chinese CompaniesMajor Challenges in French MarketSource:Open data,Deloitte AnalysisMindray Medical sets up branches and offices in France to market Mindrays products and provide after-sales service,implements the direct marketing+distribution sales mode

148、l,and has established long-term partnership with local leading healthcare institutionsLyncMedis a medical consumables export platform that sells to the Middle East and Europe through partnerships with CE and FDA certified suppliers.During the COVID-19 pandemic,LyncMedcompletedthe 150-million-mask or

149、der from the French government within one month by allocating supplier resources across ChinaIn 2018,MicroPortacquired LivaNovasheart rhythm management business.This acquisition provided MicroPortwith resources and manufacturing facilities in key European markets,expanding its European business,and

150、providing European distribution channels for MicroPortsother productsGreat cultural differences and high labor costsBoth public and private hospitals in France universally adopt the centralized procurement model,and the three public central purchasing bodies and the two private ones have strong barg

151、aining power.When the strict and random(random selection of doctors by the evaluation committee)evaluation mechanism ensures the quality,the low price wins the bid;the bid winner will be awarded a 100%share contract with a term of 2 to 4 years,so Chinese medical device companies must have competitiv

152、e scale supply capability,quality and price Over 90%of the 1,300 plus medical device companies in France are SMEs,and the sub-sectors concentrate on diagnosis,rehabilitation and surgery,which poses challenges for Chinese companies expanding to the French market to select partners or M&A targetsChine

153、se companies need to have a deep understanding of French business culture,gain the trust of the French government,trade unions and other business teams,and make local employees recognize Chinese companies,brands and corporate culture.At the same time,in France,the labor cost is high,the worker prote

154、ction system is perfect,and companies must improve manufacturing environment and safety standardsU.S.GermanyFranceUKBrazilMalaysiaSingaporeHard partner selectionGreat price pressure under universal centralized procurement24 2024.For information,contact Deloitte China.Popular Target Market UK(1/4)Sou

155、rce:Open data,Deloitte AnalysisMacroeconomy1Patient OverviewGDPPayer OverviewAccording to IARC forecasts,new cancer cases in the UK will rise to 610,015 cases in 2040 from 457,960 in 2020,exhibiting a CAGR of 1.4%;in 2020,prostate cancer was the most common cancer in men in the UK,accounting for nea

156、rly 23.1%of male cancer cases,and breast cancer was the most common cancer in women,accounting for approximately 25.5%U.S.GermanyFranceUKBrazilMalaysiaSingaporeMacroeconomy&Healthcare SystemMedical Device Market OverviewMedical Device Regulatory SystemMarket Entry Models&ChallengesHealthcare SystemU

157、SD3.07 trillionGDP(Gross Domestic Product)6.8%YoY GrowthUSD45,000GDP per capitaTotal population:68.60 millionUSD4,827Health spending per capita10%Health spending as a share of the GDP0.5%YoY Growth19%Percentage of seniors2Notes:1.Macroeconomic data source from statistics for 2022;2.Percentage of sen

158、iors refers to the percentage of the population aged 65 and olderDemographicsHealth SpendingDue to behaviors such as smoking,drinking alcohol,and less exercise,the UK has registered high rates of obesity and the incidence of cardiovascular diseases,chronic respiratory diseases,and other diseases in

159、recent yearsNational Health Service(NHS)Private InsuranceSocial Medical AidPrimary health care,involving the policlinic and the community clinic,usually provided by professionals such as GPs,comprising 75%of the NHS budgetReimbursing health care costs generated in private hospitals(outside the NHS),

160、also including critical illness and long-term care insuranceMainly for the elderly,low-income people,pregnant women,children and people with certain diseasesCovering health care costs that are not covered by the NHS,including prescription fees,some eye and dental costs,etc.Primary careSecondary care

161、Hospital care,dealing with serious illness and surgical treatment,and coordinating and allocating medical resources;only the patients referred by GPs are acceptedHigh cardiovascular disease incidence rate and obesity rateHigh cancer incidence25 2024.For information,contact Deloitte China.25%9%6%23%2

162、1%16%7.6%8.9%7.3%8.1%8.2%7.9%Total8.0%Popular Target Market UK(2/4)0510152015201620172018201920202021E2022F2023F2024F2025F4.2%8.0%Market Size(in USD billion)UK Medical Device Market Size ForecastOther Medical DevicesDiagnostic ImagingMedical ConsumablesPatient AidsDental DevicesKey Growing SegmentsS

163、egments:The consumables sector and the diagnostic imaging sector dominated the UK medical device market,accounting for more than 20%of the market share.Thanks to the governments support to radiology R&D,the diagnostic imaging sectors CAGR will lead the other sectors over the next few yearsMedical De

164、vice Imports:The UKs imports totaled approximately USD1 billion in 2020;the EU was the leading supplier(58%),followed by the Netherlands(19%)and China(16%)China Exports:Although the diagnostic imaging sector has a larger share in the medical device market and is proliferating in the UK,imports from

165、China only account for 8%and those from the EU dominate the market;China mainly exports consumables and patient aid devices to the UKUSD14.2bnKey Growth DriversEconomy:As the worlds fifth largest economy,the UK boasts advanced manufacturing,engineering machinery,chemical and related products,and hea

166、lthcareHealthcare Market:The increasing aging population and high incidence of chronic diseases are driving demand for health care;healthcare companies boast high-level R&D,and the government heavily invests in R&D innovation in radiology and other fields to improve the overall levelPolicy:The UK go

167、vernment promotes medical device technology research and innovation through the Accelerated Access Review(AAR),financial support,tax cuts and other measures2021-2025 CAGRMarket Segment Size in 2021Source:Open data,Deloitte AnalysisMedical Device Market OverviewMacroeconomy&Healthcare SystemMedical D

168、evice Market OverviewMedical Device Regulatory SystemMarket Entry Models&ChallengesU.S.GermanyFranceUKBrazilMalaysiaSingaporeOrthopedics and Prostheses26 2024.For information,contact Deloitte China.Popular Target Market UK(3/4)Manufacturer Quality Management Quality management system:The UK medical

169、device market has high quality management requirements for manufacturers,and manufacturers must establish and implement an effective quality management system to ensure stable and reliable product quality,and comply with relevant markings and requirements,such as ISO 13485 quality management system

170、standardsSource:Open data,Deloitte AnalysisMedical Device Regulatory SystemMacroeconomy&Healthcare SystemMedical Device Market OverviewMedical Device Regulatory SystemMarket Entry Models&ChallengesMedical Device RegulatorMedicines and Healthcare products Regulatory Agency(MHRA)The MHRA is the UKs co

171、mpetent government agency for medicines and medical devices.After Brexit,both pre-market and post-market regulation of medical devices are headed by the MHRAClassification&RegistrationU.S.GermanyFranceUKBrazilMalaysiaSingaporeRegistration Difficulty and Approval TimelineLow/ShortHigh/LongClass I(Low

172、 Risk)Class II(Medium Risk)Class III(High Risk)Including non-active devices,such as surgical instruments,medical dressings,dental materials,etc.Self-declarationand compliance with applicable technical standards are generally requiredClass IIa,including diagnostic equipment,syringes,etc.,with lower r

173、iskClass IIb,including joint prostheses,pacemakers,etc.,with higher riskReview and assessment are required,generally involving certification bodiesIncluding implantable heart valves,artificial hearts,etc.Rigorous evaluation and verification,including technical documentation review,clinical evaluatio

174、n and verification,are required to demonstrate safety and effectivenessUKCA:The UK introduced a separate UKCA marking after Brexit.The previous EU CE marking is valid until June 30,2024,and thereafter,the UKCA marking is required when the product is marketed in the UK marketUKRP:The MRHA requires th

175、at if a manufacturer is located outside the UK,a UK Responsible Person(UKRP)must be designated to deal with all matters relating to the registration of the manufacturers products in the UKRegional particularity:Northern Ireland remains subject to the EU medical device regulations and policies27 2024

176、.For information,contact Deloitte China.Local manufacturing facilitiesLocal subsidiariesLocal M&APopular Target Market UK(4/4)Macroeconomy&Healthcare SystemMedical Device Market OverviewMedical Device Regulatory SystemMarket Entry Models&ChallengesMajor Market Entry Models of Chinese CompaniesMajor

177、Challenges in UK MarketSource:Open data,Deloitte AnalysisOrient Geneinvested USD5 million in Scotland to establish a wholly-owned subsidiary,AccuBioLimited,and built manufacturing facilities to meet business expansion needs and nearby support in the European market.Kindly invested GBP2 million to se

178、t up a wholly-owned subsidiary in the UK,aiming to compete in the UK local market with its brand,enhance its international influence and promote the sales volume in the European market ZhendeMedical acquired the consumables business of Berendsen Healthcare in the UK to quickly expand to the UK marke

179、t and enhance Zhendespresence and influence in the UK consumables sector.AK Medical acquired JRI Orthopaedics,a leading orthopedic brand in the UK,to increase its presence in the orthopedic upscale market.U.S.GermanyFranceUKBrazilMalaysiaSingaporeThe UK medical device companies focus on product inno

180、vation,and Chinese companies must make their products more competitive in the UK market through product innovation or differentiationThe UK has a government-led healthcare system,where procurement is organized by the government and implemented by regional hospitals,and British enterprises prefer loc

181、al brands,which make it difficult for Chinese companies to establish partnership with local hospitals and get on the centralized procurement listIn the UK,companies face high labor costs and sustained labor shortage after Brexit.When establishing subsidiaries,manufacturing facilities,and R&D centers

182、 in the UK,Chinese companies will face a short-term difficulty in talent recruitment,which may affect production and operation efficiencyTalent recruitmentChannel buildingProduct differentiation28 2024.For information,contact Deloitte China.Popular Target Market Brazil(1/4)Source:Open data,Deloitte

183、AnalysisMacroeconomy1Patient OverviewGDPPayer OverviewU.S.GermanyFranceUKBrazilMalaysiaSingaporeMacroeconomy&Healthcare SystemMedical Device Market OverviewMedical Device Regulatory SystemMarket Entry Models&ChallengesHealthcare SystemUSD1.92 trillionGDP(Gross Domestic Product)2.9%YoY GrowthUSD9,000

184、GDP per capitaTotal population:203 millionUSD963Health spending per capita10.2%Health spending as a share of the GDP0.2%YoY Growth9.9%Percentage of seniors2Notes:1.Macroeconomic data source from statistics for 2022;2.Percentage of seniors refers to the percentage of the population aged 65 and olderD

185、emographicsHealth SpendingThe incidence of chronic diseases,especially cardiovascular diseases,cancer and central nervous system diseases,is increasing year by year.The top three deadly diseases are ischemic heart disease,stroke and lower respiratory infectionBrazil has a fragmented health system di

186、vided in Public System and Supplementary System:The Brazilian public healthcare system is known as the Unified Health System(Sistema nicode Sade,or SUS),is the worlds largest public healthcare system with the broadest coverage.“SUS”covers 100%of Brazilians,free of any cost at the point of service an

187、d decentralized into national,state and municipal levels.Supplementary Health System(private)is voluntary,supplementary to Public System and regulated by ANS.In 2023,25%of Brazilians(50,6Mi*)had private health insurance plans mostly provided as an employment benefit.There are more than 650 health in

188、surance companies,however 7 companies almost concentrate 40%of beneficiaries.In addition to effectiveness and safety,new devices must demonstrate cost-effectiveness before being covered by the SUS or supplementary health system.Overall,government procurement has strict standards and transparent eval

189、uation processesSUS Health Insurance Coverage:100%Private Insurance Coverage:25%The Brazilian womens life expectancy is significantly higher than mens,mainly due to the high incidence of inter-male violence and traffic accidents.In 2020,the Brazilian mens life expectancy was 72.5 years and womens,79

190、.7 years,a difference of 7.2 years,and this gap will persist in the futureCurrently,the number of the Brazilian population aged 60 and older exceeds that under 5.As life expectancy increases for those aged 30 to 50,Brazil will have more than 68 million older persons by 2050,making it the worlds sixt

191、h largest country for aging populationHigh incidence of chronic diseasesRapid population agingLarge difference in life expectancy between men and women29 2024.For information,contact Deloitte China.25%8%19%19%12%17%7.3%5.2%5.1%2.5%5.2%3.0%Total5.2%Popular Target Market Brazil(2/4)0102016201720182019

192、202020212022E2023F2024F2025F2026F-1.7%5.2%Market Size(in USD billion)Brazil Medical Device Market Size ForecastOther Medical DevicesDiagnostic ImagingMedical ConsumablesPatient AidsDental DevicesKey Growing SegmentsSegments:Brazils medical device market is expected to grow at a CAGR of 5.2%from 2021

193、 to 2026.The segments of medical consumables and diagnostic imaging have a larger market share and a considerable growth rate Main Growing Segments:The rising incidence of chronic diseases,cardiovascular diseases,and cancer boosts the demand for medical imaging equipment,cardiovascular-related equip

194、ment,breast cancer screening and radiotherapy equipment,and other high-end equipmentMedical Device Imports:Brazils medical device market relies on imports.In 2021,imports accounted for nearly 70%of the market.The U.S.(23%)and China(20%)were the leading suppliers.Except for the orthopedics and prosth

195、etics sector,Chinas exports were equal to those of the United StatesUSD4.15bnKey Growth DriversEconomy:The rising GDP,middle-class proportion,and residents disposable income promote higher demand and stronger purchasing power for healthcareHealthcare Market:Asthe worlds fifth largest country in term

196、s of population,Brazil has an ever-expanding medical device market amidst intensifying aging,extended life expectancy,and high incidence of chronic diseasesPolicy:New regulations on patient-tailored devices help accelerate the market access of personalized medical devices.The regulator streamlined t

197、he Class I low-risk medical device reporting.Some medical devices are exempt from import taxes for the time being2021-2026 CAGRMarket Segment Size in 2021Source:Open data,Deloitte AnalysisMedical Device Market OverviewMacroeconomy&Healthcare SystemMedical Device Market OverviewMedical Device Regulat

198、ory SystemMarket Entry Models&ChallengesU.S.GermanyFranceUKBrazilMalaysiaSingaporeOrthopedics and Prostheses30 2024.For information,contact Deloitte China.Popular Target Market Brazil(3/4)Source:Open data,Deloitte AnalysisMedical Device Regulatory SystemMacroeconomy&Healthcare SystemMedical Device M

199、arket OverviewMedical Device Regulatory SystemMarket Entry Models&ChallengesMedical Device RegulatorBrazilian Health Regulatory Agency(ANVISA)The Brazilian Health Regulatory Agency(Agncia Nacional de Vigilncia Sanitria,ANVISA)is a self-governing agency linked to the Brazilian Ministry of Health,part

200、 of the SUS.ANVISA oversees all medical devices in BrazilRegistration PolicyU.S.GermanyFranceUKBrazilMalaysiaSingapore ANVISA requires that all devices must complete a device registration process.Under Brazilian regulations,non-Brazilian manufacturers that intend to import devices into or distribute

201、 devices in Brazil need a local Brazilian Registration Holder(BRH)based in Brazil to submit product registration applications,manage device registration and the Brazilian Good Manufacturing Practice(BGMP)certification,perform post-market supervision,and report recalls and incidents to ANVISAMarketin

202、g Policy Pricing:The Brazilian government intervenes in medical device pricing.In March 2021,ANVISA approved a price regulation resolution to reduce medical device prices in Brazil.Medical device companies need to set prices according to the price supervision catalogue Marketing channels:Non-Brazili

203、an medical device suppliers must have offices or appoint local agents or distributors in BrazilOther Policies High taxes:Businesses in Brazil must pay over 90 types of taxes to the federal,state,and municipal administrations under complex taxation rules at the rate of 63.5%,23.5%,and 13%,respectivel

204、y.Taxes in Brazil are much higher than those in the United States and about twice as much as those in Mexico High labor costs:As each employee costs approximately 180%of their salary when benefits and taxes are considered,and the dismissal rules and regulations in Brazil are strict,foreign-owned ent

205、erprises cannot easily dismiss employeesClassificationClass I(Low Risk)Class IIClass IIIClass IV(High Risk)Registration Timelines30 days6 months6-12 months(the timeline can be shortened with MDSAP or ISO certificate)ValidityNo BGMPrequired and unlimited validityBGMPrequired and 10-year validity31 20

206、24.For information,contact Deloitte China.Popular Target Market Brazil(4/4)Macroeconomy&Healthcare SystemMedical Device Market OverviewMedical Device Regulatory SystemMarket Entry Models&ChallengesMajor Market Entry Models of Chinese CompaniesMajor Challenges in Brazilian MarketSource:Open data,Delo

207、itte AnalysisManufacturers may appoint their partners that import their products into or distribute their products in Brazil to submit product registration applications and hold product registration certificatesMicro-Tech holds certificates through its local distributor,PrometonThe third-party local

208、 representative agency holds certificates and provides market access compliance services,while distributors sell productsOperating costsTalent and partnersRevenue stabilityHigh operating costs due to strict labor regulations and high taxes in Brazil challenge Chinese companies operating model and co

209、st control after their entry into BrazilChinese companies that intend to enter the market through a light asset model will heavily rely on BRH and agents/distributors and thus need to carefully select local partners for registration and distribution,and evaluate the specific cooperation modelThe Bra

210、zilian government will intervene in medical device pricing to lower prices.Exchange rate fluctuations will cause higher currency risks,and low collection rates and long payment periods may exist.Chinese device companies need to develop risk control and mitigation plans for uncertainties in advancePa

211、rtisan bickering and civil unrest could threaten the Brazilian overall economic development.Chinese device companies need to keep an eye on the local situation and policy changes to avoid civil unrest and other risks impacting their local operationsPolitical risksU.S.GermanyFranceUKBrazilMalaysiaSin

212、gaporeLocal agents(partner holders)Local agents(third-party holders)Local subsidiary or marketing entity establishment/M&ALocal manufacturing entity establishment/M&AMicroPort Medical established a subsidiary in 2017 to acquire its Brazilian agents business,thus switching from distribution to direct

213、 marketing modelMindray Medical established a subsidiary,MRBR,in Brazil to market productsEntities must be qualified and licensed and have warehouses meeting the quality management requirements of BGMP.Entities must heavily invest when establishing or acquiring local manufacturing entities,but the B

214、razilian government will give priority and preferential policies to local firms at bidding32 2024.For information,contact Deloitte China.Popular Target Market Malaysia(1/4)Source:Open data,Deloitte AnalysisMacroeconomy1Patient OverviewGDPPayer OverviewIn 2022,cancer cases in Malaysia more than tripl

215、ed,compared to 2019.In addition to genetic factors,living habits are also a cause,especially less exercise and less healthy diet during the COVID-19 pandemic.Living habits may be a reason for the surging cancer cases during the past three yearsU.S.GermanyFranceUKBrazilMalaysiaSingaporeMacroeconomy&H

216、ealthcare SystemMedical Device Market OverviewMedical Device Regulatory SystemMarket Entry Models&ChallengesHealthcare SystemUSD496 billionGDP(Gross Domestic Product)8.9%YoY GrowthUSD12,000GDP per capitaTotal population:33.94 millionUSD520Health spending per capita4.4%Health spending as a share of t

217、he GDP0.2%YoY Growth7.5%Percentage of seniors2Notes:1.Macroeconomic data source from statistics for 2022;2.Percentage of seniors refers to the percentage of the population aged 65 and olderDemographicsHealth SpendingHalf of Malaysians are obese and one-fifth have diabetes.The incidence rate of chron

218、ic diseases,such as cardiovascular diseases and respiratory diseases(including tuberculosis,and obstructive sleep apnea),is increasingMalaysia has a universal healthcare system provided by the governmentThe Malaysian government-funded public healthcare system with public hospitals as health service

219、carriers is not based on a national health insurance scheme.Malaysian citizens who seek healthcare at government hospitals and clinics only pay a registration fee of RM1,without additional diagnosis/medication feesOnly 36%of Malaysian residents are covered by health insuranceNearly 14.3%of Malaysian

220、 residents purchase private health insurance,14.6%are covered by health insurance through their employers,7.3%covered by both,and the remaining 64%are uninsured100%36%High incidence of chronic diseases,such as obesity and diabetesSurging cancer cases33 2024.For information,contact Deloitte China.25%

221、24%28%17%4%12.0%5.2%6.3%8.8%8.2%4.1%Total8.0%Popular Target Market Malaysia(2/4)0.00.51.01.52.02.52016201720182019202020212022E2023F2024F2025F2026F8.9%8.0%Market Size(in USD billion)Malaysia Medical Device Market Size ForecastOther Medical DevicesDiagnostic ImagingMedical ConsumablesPatient AidsDent

222、al DevicesKey Growing SegmentsSegments:High-end medical devices,especially patient aids and diagnostic imaging products,have a large market opportunity,and cardiovascular-related products best serve the local needs.In the Malaysian medical device market,consumables and diagnostic imaging sectors dom

223、inate with over 20%of the market share.For the governments efforts to modernize medical devices,the patient aids sector(especially portable devices)is proliferatingMedical Device Imports:USD1.9 bnKey Growth DriversEconomy:Malaysia boasts a high per capita GDP and a relatively developed economy that

224、is driven by foreign trade,focusing on petroleum,chemical,and electronic productsHealthcare Market:Severe population aging,diabetes and obesity drive up the demand for healthcare,while the health tourism mainly for Asian medical travelers spur the market growthPolicy:The Malaysian government is devo

225、ted to modernizing health care in Malaysia and encourages medical products diversification and high-end medical device manufacturing.At the same time,Malaysia has a foreign-investor-friendly business environment and new free trade agreements may lower market access barriers2021-2026 CAGRMarket Segme

226、nt Size in 2021Source:Open data,Deloitte AnalysisMedical Device Market OverviewMacroeconomy&Healthcare SystemMedical Device Market OverviewMedical Device Regulatory SystemMarket Entry Models&ChallengesU.S.GermanyFranceUKBrazilMalaysiaSingaporeMalaysia mainly produces,and exports over 90%of,low-value

227、 consumables and orthopedic/dental products,and relies on high-end device importsLargest SellerLargest Buyer2%Orthopedics and Prostheses34 2024.For information,contact Deloitte China.Popular Target Market Malaysia(3/4)Source:Open data,Deloitte AnalysisMedical Device Regulatory SystemMacroeconomy&Hea

228、lthcare SystemMedical Device Market OverviewMedical Device Regulatory SystemMarket Entry Models&ChallengesMedical Device RegulatorMalaysia Medical Device Authority(MDA)MDA is a statutory body under the Ministry of Health Malaysia to oversee and regulate the medical device industry Conformity Assessm

229、ent Body(CAB)CAB reviews technical documentation and issues certificates Registration PolicyU.S.GermanyFranceUKBrazilMalaysiaSingaporeFor all devices imported into or manufactured in Malaysia,non-Malaysian manufacturers need a local authorized representative(AR)to communicate with MDA for medical de

230、vice registration and application filing.The AR must hold a business license and a Good Distribution Practice for Medical Device(GDPMD)certificate.CAB certificates and device registration certificates are required to be renewed every 5 yearsClassificationClass A(Low Risk)Class B Class C Class D(High

231、 Risk)Registration Timeline45 working days100 working days180 working days220 working daysRegistration ProcessAR directly files registration application with MDAAR submits technical documentation and CAB reviews the technical documentationManufacturing PolicyMedical device manufacturers must be ISO

232、13485 certifiedMarketing PolicyLocal company priority:Under the Malaysian policy,overseas entities direct marketing is allowed,but the Malaysian market,especially the public sector,gives priority to local renowned suppliersPromotion content review:Policies introduced in 2019 specified the content an

233、d conditions of medical device advertising and mandated the approval of registered medical devices advertisingProcurement PolicyMedical device procurement is mainly carried out by the Ministry of Health Malaysia and its subordinate departments.Local renowned suppliers generally win government tender

234、s,and the government does not directly intervene in pricing or force price reductions35 2024.For information,contact Deloitte China.Local subsidiariesPopular Target Market Malaysia(4/4)Macroeconomy&Healthcare SystemMedical Device Market OverviewMedical Device Regulatory SystemMarket Entry Models&Cha

235、llengesMajor Market Entry Models of Chinese CompaniesMajor Challenges in Malaysian MarketSource:Open data,Deloitte AnalysisKindlyplans to invest RMB21.7 million to establish a subsidiary in Malaysia together with TP CONCEPT PRECISION SDN.BHD to develop disposable medical devices.LepuMedical announce

236、d to establish a wholly-owned subsidiary in Malaysia to manufacture and market medical devicesShanghai Moge Biotechnology strategically partners with ALPS Medical Centre Malaysia to work in healthcare and biology,and promote RCEP members cooperation in healthcare MicroPort Group and the Ministry of

237、Health Malaysia initiated clinical research cooperation on Firehawk Rapamycin Target Eluting Coronary Stent System independently developed by MicroPortto further study the morbidity in patients with coronary heart disease in Malaysia and provide more relevant information for the cardiology departmen

238、t under the Ministry of HealthMalaysian medical device products mainly include surgical and examination gloves,medical dressings,consumables catheters,blood glucose monitoring products,contact lenses and other consumables-related products.Due to the fierce local competition,Chinese companies need to

239、 carefully determine the segment to enter,to avoid homogenization competition with local productsMalaysia has 200 plus medical device manufacturers,of which more than 30 are multinationals with offshore manufacturing facilities in Malaysia(e.g.,Abbott,Agilent and Braun),which challenges the supply c

240、hain capabilities of Chinese manufacturers entering MalaysiaAll companies in the manufacturing sector are required to have an 80-20 ratio of workforce between local and foreign workers,but Malaysia has been suffering labor shortage in recent years.Meanwhile,the local medical device manufacturing ind

241、ustry focuses on rubber products and other low-value consumables and has limited high-end talent resources.Therefore,Chinese companies may face a talent shortage after entry into MalaysiaFierce competitionTalent shortageSupply challengesU.S.GermanyFranceUKBrazilMalaysiaSingaporeClinical research coo

242、perationStrategic partnerships36 2024.For information,contact Deloitte China.SubsidyMediSaveMediShield+IPsMediFundPopular Target Market Singapore(1/4)Source:Open data,Deloitte AnalysisMacroeconomy1Patient OverviewGDPPayer OverviewAs a leading cause of death in Singapore,cancer happens to one in thre

243、e Singaporeans.Stress levels and lifestyle changes significantly increased the cancer rate.Colorectal cancer and breast cancer are the common cancerSingapore healthcare system is structured as S+3M:S:Government subsidies,covering up to 80%of basic health insurance premiumsM:Personal healthcare savin

244、gs account,mainly for small claims,and future health insurance premiums and security reservesM:Basic health insurance and private health insurance,protecting Singapore citizens against large hospital billsM:Government assistance,for needy Singaporean patients who are unable to afford their medical b

245、illsIn 2022,out-of-pocket expenditure as a share of health expenditure in Singapore was 28.5%,showing a downward trend,while the government budget increased YoYU.S.GermanyFranceUKBrazilMalaysiaSingaporeMacroeconomy&Healthcare SystemMedical Device Market OverviewMedical Device Regulatory SystemMarket

246、 Entry Models&ChallengesHealthcare SystemUSD0.47 trillionGDP(Gross Domestic Product)10.1%YoY GrowthUSD78,000GDP per capitaTotal population:5.64 millionUSD3,506Health spending per capita4.1%Health spending as a share of the GDP1.8%YoY Growth25%Percentage of seniors2Notes:1.Macroeconomic data source f

247、rom statistics for 2022;2.Percentage of seniors refers to the percentage of the population aged 65 and olderDemographicsHealth SpendingSingapores population is ageing rapidly,and the incidence rate of chronic diseases,such as diabetes,hyperlipidemia and hypertension,is rising.Specifically,the incide

248、nce rate of hyperlipidemia and hypertension is over 30%The Singaporean government encourages citizens to take preventive measures,pay attention to preventive care,and effectively prevent chronic diseases through early screening,which increase the demand for medical devicesHeavy chronic disease burde

249、nRising cancer casesEmphasis on preventive care37 2024.For information,contact Deloitte China.17%34%17%15%13%4%12.3%6.8%8.8%3.7%7.9%4.5%Total8.8%Popular Target Market Singapore(2/4)02004006008001,0002016201720182019202020212022E2023F2024F2025F2026F5.5%8.8%Market Size(in USD million)Singapore Medical

250、 Device Market Size ForecastOther Medical DevicesDiagnostic ImagingMedical ConsumablesPatient AidsDental DevicesKey Growing SegmentsSegments:Singapore has a large medical device market.The large sectors of diagnostic imaging and medical consumables account for 17%of the market share,while the segmen

251、ts of orthopedics and prostheses,as well as consumables,grow fasterMedical Device Imports:Singapore highly relies on medical device imports(85%),and mainly imports high-end equipment,such as CT machines and MRI machines.The U.S.is Singapores largest medical device source,supplying nearly 40%of the i

252、mportsChina Exports:China supplies only 2%of Singapores medical device imports and mainly exports diagnostic imaging and patient aid devices to SingaporeUSD700 millionKey Growth DriversEconomy:As the only developed country with a high per capita GDP in Southeast Asia,Singapore highlights peoples hea

253、lth,with a high health expenditure and a well-established healthcare systemTrade:As a trade hub,Singapore re-exports most of the imported medical devices to other countries to satisfy their demandDemand:Singapores serious aging and rising chronic disease cases raise the demand for health care and pr

254、eventive care,thus driving the demand for diagnostic devicesPolicy:Singapore rolled out the Healthier SG,a long-term healthcare plan,increased health expenditure budgets,and provided preferential policies to foreign investors to promote the industry development 2021-2026 CAGRMarket Segment Size in 2

255、021Source:Open data,Deloitte AnalysisMedical Device Market OverviewU.S.GermanyFranceUKBrazilMalaysiaSingaporeMacroeconomy&Healthcare SystemMedical Device Market OverviewMedical Device Regulatory SystemMarket Entry Models&ChallengesOrthopedics and Prostheses38 2024.For information,contact Deloitte Ch

256、ina.Popular Target Market Singapore(3/4)Marketing PolicyAll medical device dealers must apply for a medical device dealers license before importing,manufacturing,and supplying devices in SingaporeHSA will evaluate whether the dealer conforms to the requirements of the Good Distribution Practice for

257、Medical Devices(GDPMDS)before licensingEvaluation RouteApplicable ClassConditionsFullB,C,DClass B,C and D devices that have not been approved by HSA must be registered via the full evaluation routePriority Review Scheme:A medical device can be registered through the Priority Review Scheme route if i

258、t belongs to one of the five focused healthcare areas:cancer,diabetes,ophthalmic diseases,cardiovascular diseases,and infectious diseases,or it is a breakthrough technology with an edge over existing technology.The turnaround time(TAT)for Priority Review Scheme is 25%shorter compared to the TAT for

259、a standard full routeAbridgedB,C,DPriorly approved by at least one of HSAs overseas reference regulatory agencies(in Canada,the EU,Japan,the U.S.,etc.)ExpeditedBEBR-1:Approved by at least one of HSAs overseas reference regulatory agencies and marketed for at least three years in the aforesaid refere

260、nce regulatory agencys jurisdictionEBR-2:Approved by at least two of HSAs overseas reference regulatory agencies and no rejection/withdrawalC,DECR-1:Approved by at least one of HSAs overseas reference regulatory agencies and marketed for at least three years in the aforesaid reference regulatory age

261、ncys jurisdictionECR-2/EDR:Approved by at least two of HSAs overseas reference regulatory agencies and no rejection/withdrawalImmediateB,CApproved by at least one of HSAs overseas reference regulatory agencies;no safety issues globallyNo rejection/withdrawal from HSA or any of HSAs overseas referenc

262、e regulatory agencies;solely a standalone medical mobile applicationSource:Open data,Deloitte AnalysisMedical Device Regulatory SystemU.S.GermanyFranceUKBrazilMalaysiaSingaporeMacroeconomy&Healthcare SystemMedical Device Market OverviewMedical Device Regulatory SystemMarket Entry Models&ChallengesMe

263、dical Device RegulatorHealth Sciences Authority(HSA)HSA oversees medical devices in Singapore,and its responsibilities include registered device change notification,advertising and promotion,adverse event reporting,on-site safety corrective measures,and dealer licensingRegistration PolicyClass A:Low

264、-Risk DevicesExamples:wheelchairs.Class A medical devices are exempted from product registrationClass B:Medium-to-Low-Risk DevicesExamples:hypodermic needles or suction instrumentsClass C:Medium-to-High-Risk DevicesExamples:ventilators or bone fixation platesClass D:High-Risk DevicesExamples:heart v

265、alves or implantable defibrillators4-tier ClassificationMedical Device Registration Pathways39 2024.For information,contact Deloitte China.Local subsidiariesAcademic cooperation Local partnershipLocal M&APopular Target Market Singapore(4/4)U.S.GermanyFranceUKBrazilMalaysiaSingaporeMacroeconomy&Healt

266、hcare SystemMedical Device Market OverviewMedical Device Regulatory SystemMarket Entry Models&ChallengesMajor Market Entry Models of Chinese CompaniesMajor Challenges in Singaporean MarketSource:Open data,Deloitte AnalysisAndon Health and Xiaomi Corporation established iHealth Inc.and its Singaporea

267、n subsidiary to wholesale and distribute medical devices and conduct medical research and experimentsBGI Genomics set up a wholly-owned subsidiary in Singapore for licensing and marketingMindraysigned an academic exchange and cooperation agreement with Singapore Health Services to strengthen personn

268、el and academic exchanges and promote medical innovation togetherBGI Genomics signed a cooperation agreement with INEXInnovations Exchange,a health diagnosis company in Singapore,to establish a genomic sequencing center and carry out molecular genetic testing projects in SingaporeBluesailMedical acq

269、uired Biosensors International to enter the cardiac stent segmentHampered registrationTalent shortageReliance on channelsFor high-risk devices,the HSA may require clinical trials and usually encourages local clinical trials.However,the small number of patients in Singapore will make clinical trials

270、and registration more difficultThe healthcare talent shortage in Singapore may make medical device companies entering Singapore suffer the short-term difficulty in high-end talent recruitment,but the Singaporean government is accelerating healthcare talent cultivation through the Helix Immersion Pro

271、gramme,an on-job-training programmefor biomedical research and academic professionals,and the Singapore Therapeutics Development Review(STDR)implemented by the Agency for Science,Technology and Research(A*STAR)Singapores medical device demand comes from public and private hospitals and clinics,and t

272、he Ministry of Health is the largest consumer,accounting for nearly 75%of local demand.Therefore,it is critical for Chinese medical device companies to establish and maintain channels with the Ministry of Health40 2024.For information,contact Deloitte China.Contents1The Need for Chinese Medical Devi

273、ce Companies to Go Global2Overview and Characterization of Popular Target Markets3Success Factors of Going Global4Contact Us41 2024.For information,contact Deloitte China.Common Challenges Faced by Chinese Medical Device CompaniesSource:Deloitte Analysis Unstable MarketAs affected by geopolitical ri

274、sks,economic and monetary policies and other factors,it is difficult for Chinese medical device companies to predict the changes in local market regulation and access,as well as the acceptance of medical institutions and insurers,which increases the layout risk.StrategyBusiness and OperationCore Fun

275、ction BuildingInsufficient Knowledge of the CompetitionChinese medical device companies lack an understanding of the competitive landscape of overseas markets and the strengths and weaknesses of competitors,making it challenging to formulate strategies and goals and determine the region and products

276、.Chinese Brand RecognitionUnder the localization trend in countries,it is not likely for overseas users to recognize and accept Chinese products in a short term,which challenges device companies to build and stabilize marketing and sales channels.Supply Chain ImprovementA resilient global supply cha

277、in helps enterprises to improve management and operation efficiency and overall competitiveness.However,constructing overseas production and supply systems is complicated and requires large investments,which is difficult to manage.Challenging to Design Organizational StructureChinese medical device

278、companies may face challenges of culture integration,cross-regional power and responsibility division,and corporate culture and change management.Designing organizational structures and management models is challenging.Hard to Manage Overseas TalentDeveloped markets have higher labor costs,and some

279、countries lack medical device professionals.It is harder for Chinese medical device companies to attract,train,retain and employ talent.Local OptimizationThe changing business environment and competition landscape,diverse business culture,different procurement preferences for medical devices and oth

280、er factors require domestic enterprises to continuously optimize and adjust the operation systems in target overseas markets.Difficult to Share Information and DataChinese medical device companies face higher requirements for sharing sales data,customer demand and other information.They need to impr

281、ove the construction and application of digital capabilities.Unclear Self-awarenessChinese medical device companies have insufficient knowledge of their capabilities,sources,and needs,and lack systematic planning for endogenous growth and extensional expansion,which results in a vague global strateg

282、y.42 2024.For information,contact Deloitte China.Key Success Factors for Chinese Medical Device Companies to Go GlobalSource:Deloitte Analysis Strategic Guide（Grand Vision）Stable Operation(Steady Pace)Functional Building(Strong Support)Create Differential Advantages and Define Keys to SuccessIdentif

283、y their competitive advantages and disadvantages andcreate a differential positioning of technology,product design,channels,prices,services,etc.,according to the characteristics of overseas markets to gradually establish a service ecosystem.Define the key to success and continuously enhance the bran

284、ds competitiveness.Maintain the competitive advantage of product innovation and enhance brand image by continuous innovation and industry-university-research cooperation.Improve Supply Links,Reduce Costs and Increase EfficiencyDevice companies can gradually improve their supply systems,reduce operat

285、ing costs and enhance influence through many ways,such as building production bases,acquiring local device companies,and cooperating with other companies according to their capabilities and the process of going global.Reshape Organizational Structure and Improve Operational EfficiencyEstablish a str

286、ategic positioning-oriented organizational structure to improve operational efficiency,avoid ineffective communication,multiple reporting,unclear powers and responsibilities,and other problems,and improve local operational efficiency.Cultivate Talent Ecosystems and Enhance Enterprise AttractivenessE

287、nhance enterprises attractiveness to overseas talents,using talent cultivation as a significant measure to promote the high-quality development of international business.Gradually establish a talent ecosystem through remuneration and benefits design and corporate culture construction in combination

288、with other methods.Optimize Operations and Locally IntegrateUnderstand the business environment of target countries and strengthen communication with local hospitals,device companies,insurers and other stakeholders.Establish cross-cultural project management teams and adjust and optimize operations

289、according to local conditions to quickly integrate locally.Build Digital Capabilities and Empower Modern Management Practices Establish an enterprise-wide full-process digital management system and optimize the operational management and functional synergy throughout the value chain to improve the e

290、ffectiveness of global data sharing and overseas business and empower modern management practices.Track Changesand Avoid RisksRegularly pay attention to changes in the international landscape to identify potential risks(geopolitics,device access,finance and tax).Closely follow policy changes and adj

291、ust the global strategy and priorities in a timely manner to avoid risks effectively.Self-analysis and GoalSettingObjectively and systematically analyze the current domestic development and existing sources,and assess the necessity and feasibility of going global to define the direction and goals fo

292、r domestic and international business development.Gradually realize brand internationalization through greenfield investment,collaboration,JV,M&A,etc.,based on companys own characteristics.Market Research and PositioningObtain an overview of the overall and segment markets in target countries throug

293、h research,and benchmark with top players to identify their strengths and weaknesses to well position international development.43 2024.For information,contact Deloitte China.Planning-to-Implementation Framework Going GlobalStrategic TargetDevelopment PositioningGoing Global ModelImplementationEnabl

294、ing Functions What are the core capabilities that need to be developed for the going-global initiative?What is the enhancement plan?What is the talent mobilization structure and management structureto support the capabilities development?What is the long-term vision?(Global reputation,market leaders

295、hip)What is the target of going global(Revenue,profit,etc.)What is the strategic objective of going global?(Customer,branding,ecosystem)What is the business focus of going global?(Core business,innovative business)What is the geography focus of going global?(Europe,America,APAC)What is the ecosystem

296、 focus of going global?(Commercial,supply-chain,R&D)Prioritized measures and specific implementation solution.Defined performance measurement standards and methods.What is the going-global model based on characteristics of target market and current market,and strategic objectives of the company?(Exp

297、ort trade,cross-border M&A,greenfield investment)What is the roadmap and business model design?Five-step Framework and Key Questions to be AddressedIllustrative 1Illustrative 2Illustrative 4Illustrative 3Source:Deloitte Analysis 44 2024.For information,contact Deloitte China.Key Areas of Overseas Co

298、mplianceBusiness ProcessWork ContentCompliance ObligationRisk IdentificationDescription of Non-Compliance OutcomesMainDepartmentsSupportingDepartmentsPreliminaryProject StudyIdentify Product Type,Price Rangeand Estimated SalesRelevant Policies in Target Countrys Medical Devices Industry,Technical St

299、andard；Market Safety Regulations；TechnicalRisks,Policy Risks,Market RisksEconomicLoss，Reputation Loss,Administrative PenaltySalesDepartment,Finance Department,Technical DepartmentCompliance,Law Department,etc.Qualification Application&Product VerificationApply for Qualification of Export Medical Dev

300、icesRelevant Export Policies in Producing Country；Relevant Policies in Target Countrys Medical Devices Industry,TechnicalStandard；Market Safety Regulations；Intellectual Property Compliance Demands；Policy Risks,TechnicalRisksEconomicLoss，Reputation Loss,Administrative PenaltyTechnical Department,Impo

301、rt&Export DivisionOrder Acceptance&PlacementConfirm The OrderMarket Transactions&Contract Compliance Demands；Policy Risks,Market RisksEconomicLoss，Reputation Loss,Administrative PenaltySalesDepartment,Finance DepartmentProductionAccept The OrderField Environment,Personnel Safety,Standard Requirement

302、s for Safety Production；Supply Chain Compliance Management；PolicyRisks,Technical Risks,Market RisksPersonal Harm,Environmental Damage,EconomicLoss，Reputation Loss,Administrative PenaltyPurchasing Department,Production HeadquartersProductDistributionDistribution&Storage,Transportation,UsageRegulation

303、sfor QualityManagementof Medical Devices Distribution and Storage,Regulations for After-Sale Service(Maintenance,Repair,etc.),Adverse Reaction ManagementPolicy Risks,TechnicalRisksPolicy Risks,Technical Risks,Reputation LossSalesDepartment,Technical Department,Storage Logistics Department,MedicalDep

304、artmente.g.:KoreanLicense for Import and Operation，KGMPThailand Food and Drug Administration LicenseTaiwan Medical Device LicenseRelevant Overseas Supervision,Analysis of Compliance Demandse.g.:EU CECertificationUS FDA RegistrationSingapore HAS RegistrationMalaysiaMDA RegistrationBusiness of medical

305、 devices export is facing product entry supervision1e.g.:Cyber and DataSecurityProtection of Personal InfoProtectionof Personal PrivacyHumanGeneticResourceBusiness of medical devices is facing data supervision2e.g.:Tariff ChangeAnti-Trustand Anti-DumpingMedical devices export is facing trade protect

306、ion 3e.g.:Labors RightPaymentofExpatriatesSocial InsuranceSpecialWorking HoursOverseas labor is facing supervision4e.g.:Worldwide Supervision and Punishment for Corruption and BriberyAvoid intimacy with local officers Pay closeattention to giveawayBusiness of medical devices is facing bribery superv

307、ision56Business of medical devicesImporter/Producer supervision Source:Deloitte Analysis Illustrative 145 2024.For information,contact Deloitte China.Medical Device Classification Regulation:Class I,Class II a,Class II b and Class III(risk from low to high)Main regulations:EU 2017/745Medical Device

308、Classification Regulation:A,B,C,Dfour categories(risk from low to high)Main regulations：1.Health Products Act 20072.Health Products(Medical Devices)Regulations 20103.ASEAN Medical Devices Directive(AMDD)Health Sciences Authority(HSA)European Medicines Agency(EMA)Thailand Food and Drug Administration

309、(TFDA)Medical Device Classification Regulation:1,2,3,4 four categories(risk from low to high)Main regulations:1.Medical Device Act B.E.2551(2008)2.Medical Device Act/Ordinance B.E.2562(2019)Medical Device Authority(MDA),Ministry of Health Malaysia(MoHM)Medical Device Classification Regulation:Catego

310、ry A,B,C,D(risk from low to high)Main regulations:Medical Device Act(2012)Medical Device Classification Regulation:,four categories(risk from low to high)Main regulations:1.Medical Device Administrative Control System(MDACS)(listed system such as trader package system:local responsible person,local

311、manufacturer,importer,distributor,etc.)Hong Kong Medical Device BranchU.S.Food and Drug Administration(FDA)Medical Device Classification Regulation:Class I,Class II,Class III(risk from low to high)Main regulations:1.Federal Food,Drug,and Cosmetic Act2.Medical Device Amendments3.Medical Device Regula

312、tionsSource:Deloitte Analysis Relevant Overseas Medical Equipment Regulatory Authorities and Regulatory BasisIllustrative 146 2024.For information,contact Deloitte China.Tax Considerations Impact on the Method and Structure of Overseas InvestmentExporting products alone may no longer meet the needs

313、of medical device companies trying to expand their global presence given the current market environment,and companies are finding it necessary to invest overseas or establish production/sales bases abroad.For domestic Chinese medical device manufacturers seeking to invest overseas,it is important to

314、 first design a future-proof overseas investment structure.Anappropriate structure willnot only make it easier for companies to mobilize funds and exit a deal,but can also help reduce tax liabilities when repatriatingearningsand ramp up investment returns for shareholders.Investment Structure and Mo

315、delTax Treaty NetworkTax Regulation of the Target Country/RegionPillar Two:Global Minimum Tax Different overseas investment modelsmay involve different tax considerations or impact Investment structures tax impact on overseas financing and cash repatriation Investment structures impact on the ease a

316、nd cost considerations for future structural modificationor deal exits Tax categories and collection rules in the businesslife cycle Applicable tax incentives in the home country/region Overseas tax credit/Offshore income tax regulation Implementation in the target country/region Pillar Two rules an

317、d top-up tax calculation Additional tax compliance costs Breadth of the tax treaty network in the home jurisdiction of entities in the investment structure(includingintermediate holding companies)Applicable tax treaty benefits and compliance rulesDomestic investor entityIntermediate holding company(

318、Single or multi-layer)Setting up the optimal investment structure with bottom-up,big-picture thinkingCompany in investment target country/regionOverseas investment regulationForeign exchange management requirementsPRC tax impactFuture-proof design of an optimal overseas investment structureFlexible

319、deal exit strategyExtensive tax treaty networksPreferential offshore income tax mechanism Friendly FX management environmentTax policy of the target country/regionOrganizational structure of the overseas entityBusiness model of the overseas entityTax compliance requirements for the overseas entitySo

320、urce:Deloitte Analysis Illustrative 247 2024.For information,contact Deloitte China.As businessescontinue to deepen their presence globally,companies must establish tax management mechanismsthat cater to their globaloperations,including but not limit to business model optimization,building internal

321、reporting mechanisms and tax risk management systems for cross-border finance and taxation,tax compliance/risks for daily operations of overseas entities,transfer pricing risk management,taxation,compliance requirements and potential risks of moving funds across borders,strategy and implementation f

322、or intangible assets across borders.Routine tax compliance and risk management of overseas entitiesEnsuring overseas entities routine tax compliance is an important part of corporate tax management.It is necessary to establish a tax compliance process that is local to the entitys home market while p

323、utting together an appropriate local tax team.The parent company must also consider establishing a cross-border tax reporting mechanism and a risk management system to make sure the head office can understand and manage the tax risks of overseas entities as they arise.Global strategy and implementat

324、ion for intangible assetsAs industry competition intensifies,medical device manufacturers must continuously develop new products and innovate technology.As businesses globalize production,sales,and R&D,it is important for medical device manufacturers to formulate appropriate global intangible asset

325、strategies to optimize the tax impact of the development and use of intangible assets while ensuring asset safety and security.Tax compliance and risk management of cross-border fund allocationCross-border capital allocation is an important aspect of corporate financial management in global operatio

326、ns.Cross-border capital allocation involves complex foreign exchange and tax compliance requirements in various jurisdictions,requiring businesses to establish targeted tax risk management mechanisms.Global business model optimization and transfer pricing risk managementGiven the intricate internati

327、onal tax landscape,transfer pricing risk management plays an important part in tax management for businesses.By diversifying risks across different entities functions and tailoring local business models for different entities,businesses can manage the entities transfer pricing risks while optimizing

328、 the tax efficiency of the business as a whole,thus boosting investor return.Tax management for global operationsTax Management for Global Operations and Cross-border M&A Tax Due DiligenceCross-border M&Ahas become an essential vehicle for domestic medical device manufacturersseeking to invest overs

329、eas.Acquiringtheassets/equityof an overseas targetcan help reduce overseas market access riskand scale up overseas operations quickly.Tax risks are an important consideration for cross-border mergers and acquisitions,which can make or break a deal.Tax due diligenceis an important tool for companies

330、tryingto manage the tax risks of cross-border M&A.With tax due diligence during the deal evaluationphase,companies cansurveykey tax policies of the target country/region,tax burdens,major historical tax issues of the target company,and the impact on future operations,which helps domestic medical dev

331、ice companies understandthe full extent of the tax landscapeand potential tax risks of the target company during M&A negotiations,beforeclearly definingways to resolve such risks in an agreement before committingto the deal,incl.Common solutions may entail:Legal precautions defined in an agreement;D

332、eal price adjustments;Remedy and compensation for tax risks;Payment method and remedies for deferred payment.Tax due diligence:Ensuring the success of cross-border M&ASource:Deloitte Analysis Illustrative 348 2024.For information,contact Deloitte China.Business globalization takes collaborative effo

333、rts across different teams,the success of which is founded on global talent mobilization and management.Human resources,finance and business teams must work together to make global talent mobilization and cross-border talent mobility possible.Chinese companies will face diverse challenges and confusions in different stages of globalization regarding talent strategies and global talent management,i