Attention! The medical device industry is about to undergo a major transformation! The national policy is strongly promoting, and more than one-third of the domestic substitution gap has emerged

In the medical device industry, the topic of domestic substitution has remained evergreen in China's development in recent years. Recently, the support of the national fiscal interest subsidy policy and the marginal warming of the centralized procurement policy have injected strong impetus into the domestic substitution of medical devices, accelerating the industry's expansion. Given the current situation where the domestic substitution rate of over one-third of medical device products is less than half, this opportunity should not be missed.

一

The "combination punch" of policies is out! In 2025, domestic medical devices will enter a golden development period

1、"Measures for Optimizing Full Life Cycle Supervision to Support the Innovative Development of High-End Medical Devices" (approved on June 20, 2025) : It includes ten measures such as optimizing approval and improving standards, focusing on the innovation of high-end devices such as medical robots and high-end imaging. It will accelerate the release of relevant standards and the establishment of technical committees.

2、The "Implementation Plan for the Pilot Program of Integrated Application of Innovative Medical Devices in Sichuan Province" was previously issued, clearly stating that the pilot program will be jointly led and applied for by one medical institution in the province and one medical device manufacturing enterprise within the province. (The first batch of pilot projects will be announced in May 2025) : The pilot projects will be jointly applied for by medical enterprises within the province. The first batch involves 40 innovative medical devices. Subsequently, support will be provided for the establishment of joint laboratories and other facilities to promote innovation throughout the entire chain.

3、"Key Points for Deepening the Reform of the Medical and Health System in Shanghai in 2025" (released on May 26, 2025) : Encourage the research and development of innovative drugs and medical devices, improve the pricing, admission and payment mechanisms, and continue the previous policies supporting the review, promotion and medical insurance payment of innovative products.

4、Notice on Matters Concerning Domestic Product Standards and Implementation Policies in the Field of Government Procurement (Draft for Comment) (released in December 2024) : It clarifies the standards for identifying domestic products, and domestic products enjoy a 20% price deduction in government procurement quotations, promoting the popularization of domestic medical equipment.

二

The proportion of domestic medical devices has been continuously accelerating

As of 2024, among the 1,170 secondary product categories in the "Medical Device Classification Catalogue" (excluding in vitro diagnostic reagents), 67.01% of the products have a domestic production rate of over 75%, involving 784 secondary categories. Meanwhile, the number of secondary categories with a domestic production rate exceeding 50% has significantly increased, rising from 872 in 2020 to 1,011 in 2024, and the process of domestic substitution has continued to accelerate.

三

Market pattern and substitution basis

From the perspective of the market segmentation proportion of domestic medical devices (data from 2020),

• Medical equipment accounts for 59.0% of the share and is the core area.

• Low-value consumables, high-value consumables and IVD (in vitro diagnostics) accounted for 12.6%, 16.9% and 11.5% respectively.

The progress of domestic substitution in different sub-sectors varies significantly. This is not only influenced by technical barriers and the competitive landscape of the market, but also closely related to clinical demands and policy guidance.

四

Progress in domestic substitution in various fields

01 High substitution rate fields: Gradually consolidate the foundation

• In the fields of infusion sets and wound care consumables, the domestic substitution rate has reached as high as 95%. Enterprises such as Jiete Biotech and Gongdong Medical have established a firm foothold in the market by leveraging their mature technologies and cost advantages, meeting the basic clinical needs.

• The DR Digital direct imaging system also performed outstandingly, with a substitution rate of 92%. Enterprises such as Wandong Medical and United Imaging Medical have made technological breakthroughs, narrowing the performance gap with imported products and facilitating the equipment upgrade of medical institutions.

• The substitution rate of monitoring equipment is 78%. Products from leading enterprises such as Mindray Medical cover multiple scenarios, from emergency rooms to wards, providing reliable domestic solutions for patients' vital sign monitoring.

• The replacement rate of coronary stents is 78%. Enterprises such as Lepu Medical have promoted product iterations, broken the import monopoly in the field of cardiovascular intervention, and reduced the treatment costs for patients.

02 In the medium an

• The replacement rate of rapid detection and orthopedic spinal consumables is both 40%. Enterprises such as Innova and Dabo Medical have been continuously investing in technological research and development, optimizing product performance in response to different detection needs and orthopedic clinical application scenarios, and gradually increasing their market share.

• The substitution rate of biochemical and immunoassay is 30%. Enterprises such as Dirui Medical and Antu Biotech are making efforts in reagent research and development and instrument compatibility, attempting to break through the mid-to-high-end market that has long been occupied by imported brands.

• The substitution rate of ultrasound equipment and orthopedic joint consumables is 28%. Enterprises such as Klarity Medical are catching up in ultrasound imaging technology and joint prosthesis design and manufacturing, narrowing the gap with imported products.

  The substitution rate of CT equipment is 22%. United Imaging Medical and other enterprises have taken high-end R&D as a breakthrough point, improving core indicators such as imaging accuracy and scanning speed, and breaking the advantages of imported equipment in the high-end imaging field.

03 Low substitution rate fields: Challenges and potential coexist

• The substitution rate of endoscopes is only 10%. Although enterprises such as Klari Medical have made some layouts, they still need to break through in terms of fine imaging and adaptability to complex operations.

• The replacement rate of pacemakers is 6%, and the technical barriers are high. Domestic enterprises are in urgent need of breakthroughs in key technologies such as battery life and signal transmission accuracy. However, this also means huge room for improvement. Once a breakthrough is achieved, it will rewrite the market pattern.

三

Policy-driven and industrial opportunities

The national fiscal interest subsidy policy reduces the financing costs of enterprises, helping them increase investment in research and development and expand production and upgrade. The marginal warming of the centralized procurement policy, on the one hand, makes it easier for domestic high-quality products to enter the market through volume and price competition, and on the other hand, it also prompts enterprises to improve quality and cost performance.

At present, the domestic substitution rate of over one-third of medical devices is less than half. This is both a challenge and an opportunity. Domestic enterprises can focus on technological innovation, quality improvement and cost control, compete in different niche fields, fill market gaps and achieve the advancement from "replaceable" to "superior substitution" and "full substitution".

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