Pandemic breathes new life into medical business
Equipment production spikes sharply to meet global demand for life-saving devices
Chinese medical equipment producers are ramping up production capacity and boosting technology development to deal with the acute global shortage of clinical treatment machines, especially ventilators.
Ventilators, used to deliver air to the lungs, are crucial tools for keeping COVID-19 patients alive in severe cases.
With the world’s confirmed coronavirus cases having surpassed 857,000, with more than 42,000 deaths, governments are scrambling to get hold of clinical gear. Chinese medical equipment manufacturers have seen orders skyrocket, taking comfort from the nation’s rapid recovery from the pandemic.
Demands skyrocketing
Since early February, Shenzhen Mindray Bio-Medical Electronics Co — a leading medical equipment manufacturer — has been receiving a growing number of orders for ventilators, patient-monitoring devices and ultrasound systems from countries in the Asia-Pacific region, Europe and the Middle East.
Most recently, it has received the approval from the US Food and Drug Administration and will provide ventilators for American buyers.
The company said the number of orders has gone up four- or fivefold, and tens of thousands of medical apparatus and systems are being delivered around the world. One of its largest contracts came from Italy — one of the worst-hit countries — as it’s facing a severe shortage of medical gear.
Shenzhen Mindray Board Secretary Li Wenmei said the company is expanding production capacity at full speed — opening new assembly lines, optimizing processes, and recruiting new employees since the company resumed full operations in early February.
The pandemic has forced the company to rethink its development strategy for ventilators, and the focus is on promoting machines with noninvasive functions.
The Shenzhen enterprise has also organized a series of online talks between front-line physicians in China and the European community to exchange views on their firsthand experiences in treating severely ill patients.
Prunus Medical Co — another Shenzhen-based manufacturer — is also in the fray as its workers and engineers have been toiling for more than 10 hours a day to secure components and produce ventilators after having received urgent orders from Italy.
Other countries, including India,
Germany, Russia and Spain, have also placed orders for ventilators, anesthesia machines and handheld wireless color Doppler ultrasound devices, according to Prunus.
But guaranteeing the smooth delivery of the avalanche of orders is no easy task. As the categories of medical equipment components are vast and production is small, the demand for many gadgets in China has soared.
There are hundreds of suppliers behind major terminal device exporters, and they’re working round-theclock to meet domestic demand, while some have yet to resume full operations.
China produced some 15,000 ventilators in February alone — equivalent to the country’s annual production volume in 2019.
As the pandemic escalates around the world, leading global ventilator producers are ratcheting up production. Swiss-based Hamilton Medical — one of the world’s largest ventilator-makers — plans to expand production to about 21,000 ventilators this year, up from 15,000 in 2019.
But the company is struggling to meet the short-term demand. International carmakers like General Motors and Tesla are also planning to start mass production of ventilators.
Competitiveness growing
Zhang Yi, chief analyst at consultancy iiMedia Research, said the transformation is not like what Chinese automakers and electronicproduct manufacturers have done in producing face masks.
“Carmakers’ workshops can match the hygienic standards in ventilator production, but the more-crucial problems involve the complicated supply chains scattered around the globe, the rigorous testing and approval process, as well as intellectual property sharing,” he said.
One solution is to strengthen cooperation between carmakers and medical equipment producers, said Zhang, adding this may take quite some time.
Zhang admitted that China is a latecomer to the technology-intense field, and most domestic companies used to focus on household ventilators, while the majority of the nation’s public hospitals choose leading world brands.
Like the high-end healthcare domain, Chinese market for clinical ventilators is dominated by foreign manufacturers, such as Philips and US-based ResMed.
“However, China has been striving to improve its technology independence and the production power of high-end medical machines,” he said. Domestic manufacturers will gain a greater market share after the pandemic, Zhang predicted.
Jens Ewert, head of Deloitte China Life Sciences and Health Care Industry, noted that the Chinese government’s support for the sector plays a key role in the process, and the coronavirus outbreak will continue with the localization trend of ventilators.
“For a number of years now, China has initiated programs to build up its own capabilities and, naturally, domestic manufacturers have been investing, innovating and catching up with global players,” he said.
“We foresee a series of related policies to encourage local innovative medical device development, which will further pave the way for the rapid growth of domestic players. Domestic players will try to take advantage of this and build up on that value chain. Some will embrace external technology acquisition strategies or build their in-house capabilities, while others may want to go down the path of partnering and alliances,” Ewert said.
However, it’s still a tough nut to crack. “Making progress in high-end device manufacturing may require long-term efforts from both the academic and manufacturing perspectives as it goes through innovation and technological know-how.”
We foresee a series of related policies to encourage local innovative medical device development, which will further pave the way for the rapid growth of domestic players.’’ Jens Ewert, head of Deloitte China Life Sciences and Health Care Industry