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From the perspective of the global epidemic, the development of China's medical materials industry

the COVID-19 has lit a red light in the world. The global medical materials industry has been seriously affected, resulting in a shortage of important medical materials in many countries. Most of China's medical materials related enterprises are in an unfavorable position in the smile curve value chain, emphasizing production and manufacturing rather than R & D and design, and insufficient brand construction, which expose the problems existing in China's medical materials industry. In the important window period of global industrial restructuring, the top priority is to find out the shortcomings of China's medical materials industry, actively participate in the reconstruction of the global value chain, seize the opportunity to promote the replenishment, strengthening and expansion of the chain of key medical materials

distribution characteristics of the global medical materials industry

first, European and American enterprises occupy the high-end brand effect and market share. Take the ventilator as an example. According to the global ventilator Market ranking released by meticulous research in 2020, the top seven European countries occupy 4 seats and the United States 2 seats (see Table 1)

although China's ventilator market share reached 11.6 billion in 2018, 55% of them belonged to Philips Wellcome in the Netherlands and 25% were manufactured by RSM in Australia. Foreign brand ventilator is still in a monopoly position in China. Table 1 ranking of the top seven ventilator manufacturers with spoke type in the world enterprise name national enterprise profile 1 American BD company in the United States by 2020, the company will occupy the largest market share among all ventilator manufacturers

since 2018, its respiratory related products have been operated through an independent company called vian medical. 2 Philips Philips Netherlands produces ventilation systems and portable household ventilators for hospitals. The company said it would increase the production of several important health care products in March 2020, including 2000 ventilators per week. 3 harmington medical Switzerland specializes in the production of intelligent respiratory solutions

by March 2020, the company revealed that its production capacity had increased by 50% over the previous year, and it planned to double its production capacity by the end of April. 4 Fisher & Paykel New Zealand was founded in 1934, developed a unique humidifier system for intensive care, and now operates in about 120 different countries/regions. Founded in 1889, Delger Germany focuses on the ventilator used in the intensive care unit of the hospital, as well as the production equipment for anesthesia and patient monitoring. Reported annual revenue in 2019 was € 2.8 billion ($3billion). 6 Medtronic Ireland produces a variety of ventilator products for emergency care. The company announced in March 2020 that its ventilator production has increased by more than 40%.. 7ge healthcare is a subsidiary of General Electric (GE) in the United States, with a medical department worth $19billion. On March 24, Ford, an American automaker, announced plans to cooperate with it to increase the production of ventilator. Source: compiled by CCID think tank, April 17, 2020

Second, the production capacity of European and American enterprises has shifted outward, resulting in a shortage of raw materials for local production. Take the non-woven fabric in the upper reaches of the industrial chain of masks as an example. According to the statistics of nonwoven magazine, although China has become the world's largest producer and consumer of nonwoven fabrics, most of the nonwoven fabric manufacturers of the top ten international brands belong to European and American companies. In order to save production and transportation costs and get close to the target market, 90% of enterprises choose to transfer most of their production capacity to factories in Asia, burying the hidden danger that local stable supply cannot be guaranteed under extreme circumstances. During this epidemic, the raw materials of the French mask manufacturer MEDICOM group in China's factories were requisitioned, resulting in the idle production lines of local factories and the dilemma of cooking without rice. The Swiss ha 1 review also stipulated that meidun medical company fell into a production bottleneck due to Romania's ban on the export of ventilator parts

Third, China is in the middle of the smile curve. According to the smile curve theory, China's medical materials industry is mostly in the production and processing link, that is, the middle of the curve with low added value. For example, in the ventilator Market, only Swiss harmington medical has a global market share of 25%, while the kn95 mask produced by the mask industry giant 3M according to Chinese standards accounts for 90% of the market in this segment in China. China's medical material enterprises have few independent brand end products, and most of the high-end products are OEM plants of foreign brands. European and American enterprises such as 3M have set up a large number of factories in China, but keep their R & D capabilities at home, and rely on their advanced technology and strong brand influence to be at the top of the value chain

sketch map of smile curve

II. Problems revealed in China's medical materials industry. The key products and core technologies of high-end medical materials are monopolized by foreign enterprises. Take the extracorporeal artificial heart and lung machine (ECMO) as an example. At present, the global manufacturers of extracorporeal artificial heart and lung machine are led by Medtronic in Ireland, maikewei in Sweden and Renova in Britain. The three enterprises account for 60% of the global market share. There are five related enterprises involved in extracorporeal artificial heart and lung machines in China, but they are only limited to the production of auxiliary consumables and supporting testing instruments in the consumables package

as the core component of the extracorporeal artificial heart and lung machine, it is monopolized by membrana, a company under 3M. Relying solely on imports leads to the high cost of relevant equipment in China. There is a big gap in the innovation and R & D level of China's pharmaceutical materials enterprises compared with foreign countries. According to the annual global top 100 innovative enterprises list released by Kerui vian (former Thomson Reuters), only BYD, Xiaomi and Huawei in mainland China are listed, while 3M ranks first. The brand effect and the output of supporting services are seriously lacking. The brand effect and after-sales service at the top of the value chain are the weakness of China's medical materials industry

on the one hand, the formation of brand effect requires the establishment of a high reputation and high-quality corporate image. It can be seen from this export of medical materials that behind the rapid increase in material production capacity, the guarantee of quality is more related to the international recognition of made in China. After many countries raised the quality problems of China's export materials, the two enterprises were investigated and dealt with by the relevant departments of our country, which has seriously affected the image of our brand in the world

on the other hand, the absence of supporting services affects the actual value of medical materials. Some medical materials need professional operation, and there is a high demand for after-sales service. This time, the Czech Republic and the Philippines proposed that the detection kit exported from China had a high false detection rate, and later clarified that it was the improper operation of its medical staff. More complex ventilators have higher requirements for the professionalism of operators. After sales parameter adjustment and regular data analysis are essential service items, while only a few enterprises in China have service institutions abroad. The insufficient toughness of the supply chain restricts the transformation and expansion of production

on the one hand, China's medical material production enterprises pay more attention to the flexibility of the supply chain to ensure cost reduction and efficiency increase and shorten the delivery cycle. However, at a time when natural disasters, technological breakthroughs, geographical conflicts and other black swan and grey rhinoceros events have become the new normal, improving the resilience of the supply chain can better resist risks, on the contrary, there is a chain breaking crisis. For example, while the volume of ventilator orders in China has increased, due to the need to import flow control equipment such as key components and proportional valves from Germany, Japan and other countries, the production capacity is seriously constrained by the overseas supply of raw materials, the level of integration and coordination between the supply chain and the international industrial chain is not high, and the rail connection matching ability is insufficient

on the other hand, information asymmetry makes it impossible to achieve optimal allocation of resources. Due to the lack of understanding of the production capacity, product type, actual inventory and raw material production enterprise information of key medical materials, enterprises that change production and increase production of epidemic prevention materials encounter bottlenecks. Raw material production enterprises and manufacturing enterprises have obstacles in achieving rapid docking and precise matching

countermeasures take supporting the research and development of key core technologies as an important task. The epidemic may accelerate the return of manufacturing industry in Europe, America and Japan, and the possibility of core technology being countered increases. China urgently needs to aim at the missing high value-added links in the industrial chain of medical materials, extend the value chain to both ends of the smile curve, and strengthen the research and development of the missing core technologies of medical materials

on the one hand, we will focus on the core technology of important medical materials such as ventilator and extracorporeal artificial heart and lung machine, such as the proportional solenoid valve, turbofan and other special components used in severe treatment ventilator, so as to form a closed-loop supply chain and realize the localization of core components to deal with major emergencies

on the other hand, policies have been introduced to enhance the scientific and technological innovation willingness of medical material enterprises. China's innovative R & D mainly depends on various research institutions and laboratories, and the willingness of enterprises to innovate is generally low. Efforts should be made to improve the innovation motivation of workers as the main body of innovation. Learn from the 15% rule of 3M enterprises, and the national finance will give financial incentives to individual major innovations in enterprises, strengthen patent protection, and accelerate the transformation and implementation of achievements. Build high-quality service-oriented suppliers and promote chain extension and expansion

grasp the opportunity of large-scale export of medical materials and vigorously promote the extension of industrial chain. First, strictly control the quality of exported medical materials and speed up the integration of product standards with international standards. Establish an official list of qualified medical products and suppliers, update and release them in time, and recommend the list to countries for procurement. Secondly, we should speed up the export of products and supporting services to foreign countries

first, take advantage of the opportunity of international rescue by China's medical team, train local doctors and nurses through foreign aid personnel, and standardize the operation of ventilators, testing reagents and other equipment exported from China. Second, establish an overseas service network, build an after-sales service team through existing overseas enterprises, and provide timely and effective offline services

third, create online remote service support. Enterprises exporting products need to provide official operation instructions in different languages. See 4 End wear testing machine frequency, provide after-sales personnel with remote consultation and guidance, and develop telemedicine and detection and diagnosis

encourage enterprises to grow from a single product provider to a service-oriented supplier that focuses on products, services and overall solutions. Improve the toughness of the industrial chain, and strengthen the chain

first, we should build an open whole industry cluster in key areas, from raw material supply to end market, with horizontal division of labor and vertical integration, so as to achieve close collaboration between upstream and downstream, collaborative cooperation between production, supply and marketing, and synchronous and coordinated development of large, medium and small enterprises

the second is to give play to the leading role of the government, carry out capital introduction and supplementary chain, bind through contract signing and transfer of key technologies, introduce global leading enterprises in the pharmaceutical material industry, and drive the overall industrial benefits of local governments

third, maintain the scale advantage of the industrial chain of medical materials, and clarify the understanding that medium and low-end manufacturing does not represent backward production capacity. Strong production capacity advantage is the sharp weapon for the success of this war. China needs to vigorously cultivate effective production capacity as early as 2014 on the existing basis, and use advanced technology to improve the flexibility of production capacity. (Li Minmin, Gao Hong, Institute of safety industry, CCID think tank)

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