Imaging equipment is an indispensable medical product for building a clinical diagnosis and treatment system.

Medical imaging equipment interacts with the human body through a certain medium (such as X-rays, electromagnetic fields, ultrasound, etc.), and presents the structure and density of internal tissues and organs of the human body in the form of images for diagnostic physicians to judge and evaluate the health status of the human body.

Commonly used medical imaging equipment in clinical practice includes computed tomography (CT), magnetic resonance imaging (MR), X-ray imaging equipment, nuclear medicine diagnostic equipment, and ultrasound equipment (US).

Medical imaging of different modalities has different working principles, imaging characteristics, application scenarios, and advantages and disadvantages, but the functions are relatively consistent:

Medical imaging equipment is one of the basic diagnostic options before most diseases are currently intervened, especially in the context of aging in China. Most aging-related diseases such as cardiovascular and cerebrovascular diseases and tumors require imaging equipment as a means of pre-intervention diagnosis.

For domestic medical device companies, imaging equipment is a market that must be gnawed. After all, this is one of the largest market segments for medical devices, and the domestic market size alone exceeds 100 billion. A research report by China Merchants Securities predicts that the domestic imaging equipment market size is expected to approach 150 billion (terminal caliber) in 2026.

While the market size is huge, it also highlights the necessity and urgency of independent control in this field. Due to its late start, the field of domestic imaging equipment has always been controlled by the three GPS giants (GE Healthcare, Philips Healthcare, and Siemens Healthcare).

In order to break the monopoly of foreign medical device companies in the domestic market, in recent years, many national departments have continued to release signals to accelerate the localization of medical devices.

For example, since 2014, the China Medical Equipment Association has carried out the selection of excellent domestic medical equipment products, gradually guiding the improvement of the quality of domestic medical equipment, thereby promoting the branding and localization of medical equipment.

In 2021, the Ministry of Industry and Information Technology issued the "Guidelines for the Review of Government Procurement of Imported Products" (2021 Edition), which mentioned that except for two ultra-high-end ultrasound products, most imaging products require 100% domestic procurement.

With the support of various policies from top to bottom, the process of domestic substitution of domestic medical imaging equipment has begun to accelerate, and medical device companies have also waited for an opportunity for rapid development. Of course, for now, this is far from enough.

The CT market is one of the medical imaging fields with the fastest domestic substitution process. In terms of sales, my country's CT localization rate has reached about 50% in 2023, a year-on-year increase of 6.29%.

But in fact, in terms of sales, my country's CT localization rate in 2023 is only about 35%, which is still a big gap compared with sales. This also means that domestic equipment is more about winning by quantity.

The same situation also appears in the field of magnetic resonance imaging equipment (MRI). In terms of sales, my country's MRI localization rate reached 33.51% in 2023, a year-on-year decrease of 0.18%. In terms of sales, this ratio is 23.88%, a year-on-year decrease of 4.14%.

In some more advanced fields, the presence of domestic equipment is still relatively limited. The most typical is the DSA market. In 2023, my country's DSA localization rate (sales) is only about 10%, and in terms of sales, this ratio is only 6.63%. Among them, the market share of leading enterprise Neusoft Medical is less than 3%, and that of Wandong Medical is less than 2%. The three GPS giants still hold more than 90% of the market share.

The core reason for this phenomenon is that domestic imaging equipment companies still need to continue to catch up in terms of technology. As a precision instrument, imaging equipment, core components are the key to quality and often the bulk of the cost.

For example, CT's X-ray tube, high-voltage generator, detector, etc. account for more than 60% of the equipment cost, and MR's superconducting magnets account for 40%-60% of the equipment cost. However, due to the late start of the domestic industry and long-term dependence on imports, the quality gap between some domestic core components and imports is large, so it is difficult to compete in some high-end markets.

At the same time, domestic imaging equipment companies need to surpass the "brand" side. For some domestic equipment, they may no longer be at a disadvantage in terms of technology. For example, United Imaging Medical's high-end PET-CT equipment, from the perspective of technical parameters and indicators, some performance parameters and indicators are already better than foreign competitors.

However, due to the key role of imaging equipment in the diagnosis and treatment process, a strong "reputation" is also needed in the actual terminal promotion and use. When selecting equipment, tertiary hospitals pay more attention to the reputation and performance of manufacturers and instruments, rather than just the price, and make more cautious choices.

In other words, if domestic pharmaceutical companies really want to achieve comprehensive domestic substitution, they need not only technical breakthroughs, but also coordinated efforts on the brand side.

How to become a giant? The growth path of overseas medical device companies is relatively consistent: through international layout, reduce the risk of a single market, and finally open up growth space.

Domestic imaging equipment companies must also go overseas. The logic is simple. Like innovative drugs, the payment environment of overseas innovative medical devices is more friendly, and it can also bring more lucrative profits and the confidence to become a giant.

According to Frost & Sullivan, the global medical imaging equipment market is expected to reach US$84.3 billion in 2026. With a global market share of about 5%, it will be able to create another Mindray Medical. In 2023, Mindray Medical's revenue converted into US dollars was only US$4.9 billion.

Of course, let alone taking 5% of the market share, 1% of the market share is not easy to get. On the one hand, there is the issue of market access. In the core markets of Europe and the United States, most of them need to go through strict clinical trials to achieve the highest level of registration certificates.

On the other hand, the challenge lies in the sales model. At present, the domestic sales model is mainly distribution, and the core is to bind the thighs of distributors.

In overseas mature markets, the sales of medical devices are mainly direct sales and GPO models, which put forward high requirements on the sales ability of enterprises and subsequent after-sales service capabilities. This requires the continuous accumulation of corporate experience and resources.

Of course, the difficulty is more valuable. Going overseas not only means a broader market, but also can break through the blockade of giants. After all, the three GPS giants will account for more than 65% of the global market share in 2022.

At present, the rise of domestic imaging equipment has not only promoted the process of domestic substitution, but also promoted the breakthrough of domestic medical imaging leading companies overseas.

Including United Imaging Medical, Wandong Medical and other companies, they are using competitive products to open up Asian, African and Latin American countries, and even enter developed medical markets such as Japan and the United States.

We hope that the ambitious and dream-driven leaders of domestic imaging equipment will shine on the global stage and become super giants that can truly compete with GPS.

Source：https://mp.weixin.qq.com/