April 27, 2018 -- While China's diagnostic imaging market is currently dominated by large global players such as Siemens Healthineers and GE Healthcare, local players are set to increase their share in the market over the next ten years as the government prioritizes investments in rural hospitals, according to leading data and analytics company GlobalData.
With China's rising population, the number of patients suffering from ailments that should be managed through the use of diagnostic imaging devices has also increased. This growing pool of patients has led to a high demand for medical imaging in the country, with the market expected to reach $20 billion by 2025.
However, diagnostic imaging devices such as CT, ultrasound, X-ray, nuclear imaging or PET systems require specialized set-ups, huge upfront costs, including safety mechanisms for the machines and work flow set ups for radiologists. The high monetary investments needed for these devices are prohibitive for widespread installations in many emerging economies, including China.
Sarah Janer, Medical Devices Analyst at GlobalData, says: "In China's tiered hospital system, high-end imaging technology is usually only available in tier 3 institutions, or comprehensive hospitals with more than 500 beds. Tier 3 hospitals prefer to invest in premium systems such as 3T MRI and 128-slice CT to increase reimbursement rates. Subsequently, large global players have used their manufacturing bases to dominate the domestic diagnostic imaging market."
On the other hand, domestic manufacturers such as Mindray have limited access to core components such as crystals or tubes compared to the supply chains of industry giants and hence face obstacles in the production of high-tech devices.
To shore up the domestic diagnostic imaging players, the government has announced a five-year plan to equip rural hospitals with imaging technology.
Janer concludes: "Domestic companies have an upper hand when it comes to responsiveness to customer demands and strategic innovation in the Chinese markets. By attracting strong research and development teams and investing in efficient technology, they can overcome manufacturing barriers.
"They will also benefit from widespread investment initiatives as small rural hospitals are encouraged to purchase new as well as low and mid-range devices to improve their diagnostic imaging offerings. Over the next ten years, the Chinese imaging market will see local players substantially increasing their share. Over 80% of the current market is dominated by international manufacturers, but this number is expected to dwindle to at least 40% by 2025."
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