A New Wrinkle For China’s Medical Device Market (Forbes)
This week, China’s National Health and Planning Commission (NHPC) threw foreign medical device manufacturers a wrinkle: going forward, the Chinese government would pursue policies explicitly designed to favor domestic manufacturers over foreign manufacturers. The NHPC’s announcement was clear: “We want to strongly advocate health ministry organizations to use domestically-made medical devices, especially pushing top level class III hospitals to use domestically-made products.”
Justifying this policy, the government noted such measures were necessary for it to “effectively control unreasonable increases in the cost of medical care and reduce the burden on patients.” While some wiggle room does exist in this language (foreign companies are free to argue for the unique value of their particular products, and some latitude for Chinese hospitals to make purchasing decisions on the basis of these advantages), the tone and direction of the NHPC’s announcement should be cause for concern to foreign owned device companies.
If successfully implemented, the NHPC’s policy adds several layers of complexity to foreign medical device co...
