Observing key trends in the global health care industry, analyzing the current status of global and Taiwan medical device development, and analyzing the growth strategy of Taiwan's medical device industry.
What is medical equipment?
Medical equipment products are all-encompassing and the market is highly closed
The definitions of the US Food and Drug Administration (FDA), the European Union, and Taiwan are similar. They are mainly distinguished by "functions." Devices with diagnostic, preventive, and therapeutic functions, including artificial intelligence (AI), will be included the category of medical equipment. Subject to the provisions of the Food and Drug Administration (TFDA) of the Ministry of Health and Welfare, it means "used to diagnose, treat, alleviate, directly prevent human diseases, regulate fertility, or affect human body structure and functions, and are not based on pharmacology or immunity. Or a metabolic method that acts on the human body to achieve its main function of equipment, equipment, appliances, substances, software, in vitro reagents, and related articles.”
The medical equipment industry is an essential industry that integrates cross-domain technologies such as biomedicine, materials, machinery, and electronics. With the economic development and the improvement of living standards, the aging society, the gradual increase in the population of chronic diseases, and the increasing demand for health care have made the medical equipment industry show a trend of high growth, and the medical industry symbolizes the country’s economic prosperity. The process of the health and quality of life of all citizens.
If relevant medical equipment or products are to be marketed in a region, they must comply with the definition of medical equipment in local regulations and obtain permission from the local health authority. The relevant laws and regulations are constantly adjusted, and while developing products, we must also pay attention to the target market and what certification needs to be applied, so as not to extend the time to market. In Taiwan, the Pharmaceutical Affairs Law, a special law for medical devices, was proposed in 2015. Although it has not yet passed the Legislative Yuan, differences in the classification of medical devices and drugs in the future require attention.
In the medical equipment market, products are all-encompassing, but product sales are limited to the hospital procurement system, and the market is highly closed. Therefore, doctors are encouraged to participate in the research and development process, and products are given priority to doctors to understand feedback and improve at the same time, it is very important to establish a good relationship of mutual trust with doctors, grasp the actual needs of doctors, and build brand trust. In addition, one big difference from the pharmaceutical industry is that the potential market for drugs is quite easy to calculate, but the cost of medical equipment comes from the entire treatment course and is related to the behavior of the user during the entire treatment course, rather than just looking at the price of a single product.
The global development trend of the medical equipment industry
The technological development trend of global medicine and the medical equipment industry is mainly led by the United States, Europe, and Japan. Because the products of the medical industry will directly affect the health of the people, the regulatory agencies of various countries only pay attention to the medical industry, and the listing review of drugs and medical equipment is rigorous. After the products are launched, they will continue to monitor to protect the lives of the people. Advanced countries such as the United States, Europe, and Japan have complete medical examination regulations, and various basic medical sciences have been rooted for a long time. In addition, they have abundant capital, and many multinational pharmaceutical and medical equipment companies have enriched their product lines and products through mergers and acquisitions. a marketing channel, so the development of pharmaceutical-related industries has its advantages.
With the rapid development of medical technology, there are now a variety of examinations, diagnoses, and treatment methods that need to be combined with the use of medical equipment and medicines, especially in the treatment of cancer and the diagnosis of classics. Although it is more difficult to market products, the new generation of products has only good results, which also greatly increases the barriers to competition. Due to the safety and accuracy requirements of medical equipment, bed testing and certification play an important role in the research and development of medical equipment, and it accounts for a large proportion of expenditures in the proportion of research and development. Medical equipment and medicines need to obtain testing and certification requirements, so the research and development time is longer, but its product threshold is relatively higher than other industries, so it can have a longer product life cycle and a higher gross margin.
The global medical equipment market can be divided into in vitro diagnostics and testing, cardiovascular treatments, and diagnostic imaging equipment.
Equipment, including imaging consumables, but not including negatives and information systems and orthopedic equipment. Important medical equipment products that have no potential for development mainly include high-end molecular diagnostics of cardiac vascular equipment, orthopedic products such as spine and joint implants, neuromodulation equipment, sleep interruption equipment, and endoscopes.
At present, Taiwan's medical equipment industry is divided into five major categories: diagnostic and monitoring medical equipment, surgical and therapeutic equipment, auxiliary/remedial medical equipment, in vitro diagnostic equipment, and other medical equipment, which are divided into the following:
- Medical equipment for diagnosis and monitoring
- Medical imaging, medical imaging devices are mostly products
- Physical measurement equipment
- Blood pressure measuring equipment
- Medical monitoring device
- Surgery and treatment of medical equipment
- Radiotherapy equipment
- Apparatus for breathing and anesthesia
- Other implantable appliances and medical appliances
- Surgical instruments
- Physical treatment equipment
- Dialysis device
- Ophthalmology and dental equipment
- Devices for cardiovascular surgery
- Auxiliary/repair medical equipment
- Make up for various parts of the body
- Motion aids
- Auxiliary equipment for body organ function
- In Vitro Diagnostic Equipment
- Inspection equipment
- Other related inspection equipment
- Test reagent
- Other medical equipment
- Medical furniture
- Wound care equipment
- Personal protective equipment
- Other plastic (rubber) rubber medical materials accessories
The key trends of the global health care industry: auxiliary, biomaterials, precision, and preventive medicine are "demands" that promote the development of the medical materials industry.
In recent years, with the increase in global life expectancy, the proportion of aging in countries around the world has continued to rise. It is estimated that by 2050, Taiwan’s population over 65 years old will be close to 40%. In the future, more and more elderly people will become the norm and become global medical expenditure. One of the reasons for the continuous rise. The deterioration of the physiological functions of the elderly, the continuous increase in the prevalence of chronic diseases, the issue of dementia, and the problem of wound care have resulted in the development of the assistive device market, barrier-free tourism and wound care materials, which are also quite potential markets.
Key issues for the development of the medical device industry in the future
Current status of global medical equipment development
- Assistive Device: Research and development of assistive devices to enable senior citizens to improve their quality of life and even become independent.
- Biomaterial: Research and development of synthetic materials that can be applied to living bodies, which can replace tissue or organ functions.
- Precision Medicine: According to the biological and disease characteristics of different patients, to make a more accurate diagnosis and more effective treatment to effectively reduce "non-essential" medical expenditures.
- Prevention Medicine: Incorporates health data, personalized data, and medical data into the health risk management and control system, and through massive data processing, AI analysis, and expert judgment, to improve living habits, early consultation, and treatment.
How will the global medical device industry developments in the future? At present, the United States, Germany, and Japan are the top three single-country medical material markets in the world. According to BMI Research, the global medical equipment market will reach 425.3 billion U.S. dollars in 2020, and is affected by the aging market. And implant products, assistive devices grow fast. The proportion of treatment will decline, and more funds will be spent on diagnostics, monitoring, and prediction products.
In addition, emerging countries have promoted the uneven distribution of domestic medical services and insufficient infrastructure through medical reform policies, and promoted the rapid development of domestic medical equipment. It should be noted that the development of the medical material market is not always average and fixed. Indonesia, the Philippines, Vietnam, Thailand, etc. all have different policies and social and cultural influences. Pay attention to the market conditions of your products in different regions.
In the future, there will also be more "big and big" strategies, where large and medium-sized companies use consolidation to integrate and reduce product portfolios, strengthen the chain of distributors, and expand market share. The main products are a diagnostic business, In Vitro Diagnostic Devices (IVD), orthopedics, and cardiovascular. It is predicted that by 2020, IVD will still have a considerable growth rate, and the age of glaucoma and cataracts will also make the ophthalmology infinite potential. Endoscopy, dentistry and cardiovascular fields cannot be ignored.
Taiwan’s medical equipment development status and growth strategy: promote "emerging products", integrate "niche products", and expand "advantageous products"
Finally, I brought the perspective back to Taiwan. In recent years, the number of medical material factories has been increasing, reaching 1,083, with European, American, and Japanese manufacturers as the main customers. They have the characteristics of a low proportion of R&D in turnover, low average gross margin, and susceptibility to exchange rates.
Further analysis of the import and export market, the growth of the output value of Taiwan’s medical equipment reflects the global trend: in the import market, there is an annual growth rate of 4–6%, mainly in the United States and Japan, and the imported items are related to inspection products and equipment. Consumables, high-end catheters, dialysis devices, etc. are large quantities, and while maintaining health insurance and Taiwan’s domestically manufactured products are limited, short-term changes are not significant; in the export market, the annual growth rate is maintained at 6–7%. Contact lenses and Diabetes test strips are among the top two, mainly exported to the United States and Japan. In recent years, they have strengthened clinical applications and technology upgrades with new materials to enter the international market.
Taiwan's medical machinery and equipment exporters and export items are all trending toward concentration. It is necessary to avoid excessive market singularity, and continue to pay attention to changes in regional economies, policies, and decisions of major international manufacturers, and adjust company and product positioning in a timely manner. In the next step, in the future, key technologies such as ICT, composite materials, and precision machinery can be used as the core to innovate medical products and technologies and expand the international market. The government also promotes a jump in output value through policy assistance, hoping to increase the annual growth rate from 6% to 9%.
At the same time, in response to the changing trend of the global health care industry, there are different development strategies for different product groups.
The four major advantages of "Ophthalmic Correction Products (such as Contact Lenses)", "Assistive Devices (such as Vehicles for Disabled People)", "In Vitro Diagnostic Products (such as Blood Glucose Test Strips)" and "Medical Consumables" with an output value of more than 10 billion The group hopes to develop new product lines such as tonometer, molecular diagnostics, patient displacement devices, and high-end catheters to expand their export performance. The niche product group with an output value of about 2 to 5 billion, including the four major systems of minimally invasive surgery, medical imaging, orthopedic medical materials, and dental medical materials, will guide research and development and develop emerging medical materials to complement the niche medical materials group. There is a gap in the product line of the company, and through cross-field cooperation between insurance companies, medical fields, pharmaceutical companies, and medical material manufacturers, to achieve "manufacturing service-oriented" and provide integrated solutions for international manufacturers’ products; also promote in institutions or hospitals The output of intelligent systems, pursuing the goal of "internationalization of the service industry".