CSRC: Policy Signals Clarify Focus on Medical Device Opportunities
According to reports, CSRC has published a research report stating that high-level officials have repeatedly emphasized "anti-inflation" and "optimized procurement" policies to support innovative medical device development. This policy shift is expected to improve the payment system for medical devices, allowing manufacturers to maintain reasonable profit margins while promoting brand power and product performance. It is recommended to position ourselves in domestic optimized procurement with continuous breakthroughs in exports.
From a sectoral perspective, CSRC believes that the beneficiaries will be as follows:
High-value consumables: Double-dip effect. Following the approval of innovative high-value consumables, they may soon be included in local procurement, making it difficult for companies to sustain their growth curves. Under the new procurement policy, many excellent medical device companies will return to their growth tracks.CSRC categorizes high-value consumable companies into two types: 1) Unclear procurement: Previously only landed at the provincial level, but due to procurement risks, the valuation was suppressed and is expected to undergo revaluation. 2) Clear procurement: Already experienced national procurement and subsequent contract renewals with a certain probability of price increases.
IVD (In Vitro Diagnostic): Focus on clinical diagnostic pathways. As procurement optimization progresses, CSRC believes that the "low-price-only" approach is no longer applicable. Future IVD procurement will focus more on clinical demand and product quality, with high-quality, scale-efficient IVD companies expected to benefit.
MEDICAL DEVICES: Quarter-by-quarter improvement. Breaking away from the low-price-only approach, CSRC believes that prices will gradually stabilize. With procurements improving, it is expected that some companies' performance in 25Q2 will improve, while most will do so in 25Q3.
On July 24th, the National News Office held a themed press conference on "High-quality completion of the '14th Five-Year Plan'". The Vice Minister of the National Health Commission introduced that the 11th batch of pharmaceutical procurement work has recently started. According to the research and optimization measures approved by the State Council, the National Medical Insurance Administration will adhere to the principles of "stability in clinical care," "quality control," and "anti-inflation" to optimize specific procurement rules.
As part of the implementation of the measures to support innovative pharmaceutical development, the National Medical Insurance Administration recently held two symposia on medical insurance support for innovative pharmaceuticals. Over 30 representatives from medical institutions, research institutes, and industry organizations introduced the latest developments in pharmaceutical technology and products.
In these symposia, the National Medical Insurance Administration emphasized its commitment to supporting innovation, encouraging companies to increase their R&D investments, and promoting technological progress and product upgrading.
CSRC believes that innovative medical devices should not be a fixed concept, but rather a dynamic concept that is constantly evolving. The three principles guiding this approach are: 1) No existing products; 2) Products with the same therapeutic effects as existing products, but at a lower price; and 3) Products with similar therapeutic effects to existing products, but at a higher quality.