Deciphering the hidden monopoly of foreign medical machinery giants: "domestic army" is waiting for the rise
Domestic medical equipment.
X-ray computed tomography system produced by a domestic enterprise.
The market share of foreign medical devices in China in 2013.
At the beginning of this month, Reuters news that China's State Administration for Industry and Commerce investigated the Siemens medical department and its distributors, suspected that it would bribe the hospital in China, so that the hospital to buy its expensive medical equipment supplies, and said that "by Siemens The medical giants represented will change in China." This has also triggered speculation about whether China will "start" these medical giants.
According to the report, foreign-funded medical companies such as General Motors (GM), Siemens (SIEMENS) and Philips (PHIliPS) have a long-term market share of about 70% in China's high-end medical equipment market. The insiders also revealed that the behavior of large enterprises to seize the medical equipment market by improper means "has always existed." A series of Chinese official actions are releasing clear signals to support the domestic medical equipment industry.
Reuters reported that the number of hospitals involved reached 1,000. On May 4, the State Administration for Industry and Commerce publicly stated that “the State Administration for Industry and Commerce has not launched a survey on commercial bribery of Siemens.†Siemens Medical subsequently publicly responded: “A branch of the Shanghai Industrial and Commercial Department is diagnosing Siemens Medical Laboratory. The market and business model of the business is understood, and this model is widely adopted in the global industry.†However, some comments indicate that the survey may launch a round of extensive investigations against more medical device manufacturers.
This incident ultimately proved to be "Oolong." However, it is an indisputable fact that foreign-funded medical equipment manufacturers represented by Siemens, Philips, and General Motors have long occupied a large share in the high-end medical equipment market in China. In addition to these three, foreign producers selling medical equipment in China include Medtronic and Johnson & Johnson.
Eighty percent of the medical device market is occupied by foreign companies
The 2014 China Medical Equipment After-sales Service Survey Report shows that the GPS combination of GM, Philips and Siemens accounts for more than 80% of the market in several types of large-scale medical equipment such as CT, MRI, nuclear medicine and angiography. Among them, the three companies have a market share of 91.1% in angiography equipment.
In the case of Siemens, the financial report shows that Siemens has 62,000 employees in Asia and Australia. In 2014, it received 14.4 billion euros in revenue in the region, and allocated a total of more than a quarter of Siemens' key production equipment.
Bai Zhipeng, secretary general of the China Medical Equipment Association, told reporters that these enterprises from developed countries have developed very mature technologies as early as the 1960s and 1970s, but China has only slowly started from the 1980s. "Many domestic technologies and foreign companies have a large gap." However, Bai Zhipeng believes that this market distribution cannot be absolutely said to be a monopoly. "It is more appropriate to call it 'large occupancy.'"
An industry insider who did not want to be named told reporters that the possession of the medical equipment market brought long-term profit sources to the company. "Just like grabbing the site, once the equipment enters this field and enters the hospital, then After-sales service, repairs, and the purchase and use of consumables are a constant source of profit for manufacturers."
The current status quo is that the profits of the high-end medical equipment market are mostly earned by foreign companies. For a long time, rare local enterprises can compete with foreign medical giants. He told reporters that the phenomenon of seizing the medical equipment market in an unfair manner has always existed, including local enterprises and foreign companies.
"Use reagent to send equipment" mode has always been
"This (illegal behavior) is definitely there, but which institution is not good enough. But for example, sending equipment to the hospital, then signing the contract, using the specified reagents, I have heard of it." Bai Zhipeng said.
Cheng Guangbin, director of the Medical Engineering Department of the Armed Police Guangdong Provincial Corps Hospital, has long been responsible for the procurement and management of medical equipment. He said that medical device manufacturers have always used "unfair" means to seize the market. "In terms of biochemical testing, There are some equipments of several hundred thousand yuan and one or two million yuan. The manufacturers will directly send them to the hospital. After some calculations, for example, in the top three hospitals, the amount of equipment per day is very large. With this circulation, the cost of the equipment can be quickly recovered. For the company, it has been making money since then."
In the view of Meng Jiansheng, general manager of Guangzhou Dade Medical Equipment Maintenance Service Co., Ltd., the “reagent delivery device†model has existed in the domestic medical industry for many years, and Meng Jiansheng is also annoyed by this “monopoly behavior†bundled from equipment to later maintenance. He believes that although there is no clear law that this practice is illegal, insiders know the purpose behind this.
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