After the rise of innovative drugs, how much longer will it take for China's medical devices to explode?

Ask AI · Why does China emphasize engineer-driven innovation in medical devices?

Since China’s biopharmaceutical innovation has risen globally, China’s innovative medical devices are becoming the next field likely to explode.

On May 9th, Wang Xin, Chairman and CEO of Jian Shi Medical, a Chinese medical device company, told Yicai that “the biopharmaceutical industry is more scientist-driven, but the core of medical device innovation is engineers. China needs to cultivate engineers who understand medicine to promote technological iteration in the medical device industry, which still takes some time.”

Recently, Jian Shi Medical, together with Xichuang Venture Capital and Wuxi Binhu District, jointly established an industry incubation fund with a scale of nearly 1 billion RMB. While focusing on investing in cardiovascular interventional medical devices and surgical medical devices, they also attract medical engineering talent to build an innovative ecosystem for medical device transformation.

Wang Xin told Yicai that although more and more innovative achievements have emerged in China’s medical device industry in recent years, the market size of Chinese medical devices still accounts for only about 10% of the global market, leaving huge room for future growth.

Compared to the rapid growth trend of Chinese innovative drugs reaching overseas licensing agreements with multinational giants, only a few Chinese innovative medical device companies currently achieve outward licensing transactions. Larger-scale licensing deals in recent years include Edwards Lifesciences’ acquisition of overseas rights for Jian Shi Medical’s J-Valve heart valve business, and Boston Scientific’s licensing deal with Xianruida Medical.

Wang Xin, who previously held executive roles at Johnson & Johnson and Boston Scientific, is also familiar with capital market operations. In the early days of Jian Shi Medical’s founding, Wang Xin had acquired and integrated many globally innovative medical device products through investments. In 2024, Johnson & Johnson made a record-breaking $12.5 billion acquisition of Shockwave, a company specializing in shockwave balloon catheters. Earlier, Jian Shi Medical had established a joint venture with Shockwave in China and had begun localized production at its Wuxi factory.

However, capital markets fluctuate, and now the medical device industry is entering a period of value restructuring. A batch of Chinese device companies that previously aimed to benchmark platform giants like Medtronic are also adjusting their strategies. Wang Xin said that Jian Shi Medical’s strategy has shifted toward in-house product development and targeted acquisitions. “If a company remains in the stage of doing everything, it’s difficult to focus resources,” he said.

According to Jian Shi Medical, in 2024, the company launched a fully self-developed 90-degree ultra-bend angulated anastomosis device, which is the world’s first of its kind. This product has already entered several European countries, including Charité Hospital in Germany and the University of Cambridge Hospital in the UK, with market share growing rapidly.

“Companies need to know what to do and what not to do. They shouldn’t chase hot tracks blindly but should selectively focus on their core products,” Wang Xin told Yicai. “Surgical products and cardiovascular and cerebrovascular interventional products are Jian Shi’s two main core businesses. We are currently focusing on the domestic market for interventional products, while high-end innovative surgical products are heading overseas to Europe and America.”

Under the background of domestic centralized procurement policies, like innovative drugs, companies are now targeting developed overseas markets for high-end innovative medical devices, while exporting some mid- and low-end products to Southeast Asia, South America, and other regions. Wang Xin believes that regardless of the market, medical devices should not be “profitable products with excessive margins.” “It’s most important to sell good medical devices at reasonable prices, and also ensure the company earns enough profit to sustain R&D and innovation,” he said.

However, unlike the overseas licensing approach used by innovative drugs, most Chinese medical device companies currently expand abroad through building their own channels, which incurs high costs. Wang Xin sees a high potential for future cooperation and transactions between Chinese innovative medical companies and multinational corporations. “Although domestic brands aim to catch up with these global multinational medical device companies and narrow the gap, there is still significant room for cooperation with overseas giants, and such collaborations may happen in the near future,” he said.

Over the past decade, China’s medical device industry has undergone rapid changes, with multinational companies accelerating the development of local supply chains. Meanwhile, China’s intelligent manufacturing sector, driven by new technologies like humanoid robots, is developing rapidly, further benefiting the medical device supply chain.

“The demand for components in the medical device industry is usually small-batch and dispersed. Now, as the embodied intelligence industry’s supply chain needs grow, it can also promote the development of the medical device supply chain,” said Cheng Luda, head of global surgical markets at Jian Shi Medical, to Yicai.

(This article is from Yicai)