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Supportive policies pave way for in-house medical consumable firms

By ZHENG YIRAN | China Daily | Updated: 2022-09-28 09:21
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Some hemodialysis products are on display at an expo in Shanghai, Oct 22, 2020. [Photo/VCG]

With supportive policies and surging market demand, homegrown companies of disposable medical consumables are on the rise.

Disposable medical consumables are an important branch of the laboratory sector. They are widely used in experiments that require high precision which, for a long time, had been dominated by international companies. In 2020, imported disposable medical consumables took up some 90 percent of the Chinese market.

However, domestic companies are now making progress. This year, Chinese makers in the very sector, including Kirgen, Acumen Biomedical, Cell-nest and Lab Direct, have obtained financing. The investors include renowned enterprises such as Legend Capital, Long Hill Capital, Apricot Capital and Riverhead Capital.

"With the country's supportive policies on biotechnology, the constant boom in in-vitro diagnosis and the biopharmaceutical industry, and the rise in domestic substitutes, the disposable medical consumable sector in China realized sustained development. Currently, some leading domestic companies achieved technical breakthroughs in certain types of consumables and are expected to obtain greater market shares," said Li Chengping, an analyst at online healthcare service platform VBData.cn.

At first, China's disposable medical consumables were mainly imported. With the improvement of the country's economy and the advancement of technology, domestic suppliers emerged.

Li Jilong, director of the department of strategic development at Acumen Biomedical, said: "Domestic suppliers mostly emerged at the beginning of the 21st century. Limited by technical levels, professional competence and quality of craftsmanship, they started by producing low-value consumables. With technological innovation, some enterprises started to have business deployment in high-value ones."

In 2020, homegrown consumable suppliers embraced the harvest stage. Guangzhou Jet Bio-Filtration Co Ltd and Shanghai Titan Scientific Co Ltd were listed on the Science and Technology Innovation Board in January and November, respectively, while Zhejiang Gongdong Medical Technology Co Ltd was listed on the main board of the Shanghai Stock Exchange in September of the same year.

"The achievement was based on the accumulated efforts that Chinese companies had made. The outbreak of COVID-19 has, to some extent, promoted the domestic substitution progress of disposable medical consumables. Although beginning relatively late, with the constantly improving environment, the sector is embracing a promising future," Li said.

In May, the National Development and Reform Commission issued a plan on bio-economy development during the 14th Five-Year Plan (2021-25) period, and proposed to vigorously develop advanced diagnostic technologies and products such as molecular diagnosis, chemiluminescence immunodiagnosis — which are tests for blood diseases — and point-of-care testing.

"With supportive policies, the biotechnology industry is expected to attract more investment, further propelling the development of the disposable medical consumable sector," Li said.

And market demand has been surging. In 2018, China's medical consumable market was valued at 23.1 billion yuan ($3.3 billion), taking up 10 percent of the world's total. With China's large population base and the rapidly developing biopharmaceutical industry, demand for medical consumables skyrocketed. According to a report from Zhejiang Sorfa Life Science Research Co Ltd, the compound annual growth rate of the sector is expected to reach 20 percent between 2019 and 2023.

"The automation and digitalization of laboratories also spurred demand for high-end disposable medical consumables. Meanwhile, the COVID-19 pandemic raised rigid demand for vaccine research and development, as well as nucleic acid tests, while the importation of medical consumables was affected due to the COVID-19, domestic consumable suppliers have become a safe choice," Li said.

To better develop in the sector, industry experts suggest domestic companies master core technologies, constantly upgrade equipment and enhance product competitiveness.

"They should pay attention to ensuring quality stability and product reliability," Li added.

"Currently, the business focus of many manufacturers is still on the production and sales of low-value consumables with low additional technical value. Their products lack market competitiveness, and there is homogenization competition and serious internal friction. Only by technology innovation can they achieve high-quality development," said Geng Xinrui, brand manager of Lab Direct.

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