Medical device M&A is full of opportunities and challenges

In recent years, the pace of mergers and acquisitions of global pharmaceutical companies has been accelerating, and the targets from emerging markets are increasingly being concerned by investment groups. Despite the positive medical market, there are still discordant notes. Challenges and opportunities are coming one after another. China's medical device companies should pay more attention to catching up with the "old driver" shuttle bus.

In 2016, the pharmaceutical and health industry acquired more than 400 mergers and acquisitions, and the amount exceeded 180 billion yuan. In 2017, the mergers and acquisitions in the pharmaceutical industry continued unabated, and mergers and acquisitions in various segments were still very active. The mergers and acquisitions of enterprises could expand the market scale and complete the industrial chain layout, and at the same time further consolidate the market position. At the beginning of the new year, the three hottest strategies for M&A investment in the big health industry have been staged, and various strategies have been adopted. However, in the case of a good medical device market, three multinational corporations (GE), Philips, and Siemens, which are known as GPS in the industry, have been exposed to many cases of medical corruption.

The Big Three have long dominated several major medical devices such as CT, MRI, nuclear medicine, and angiography machines, with a market share of over 80%. In an interview with investigators, a medical industry researcher in a university said that GE and Siemens have been involved in multiple medical corruption cases in Anhui, revealing that there are always hidden rules in the procurement of large-scale medical equipment. In fact, the relevant departments of the state have long established a “blacklist” system for commercial bribery in the field of pharmaceutical purchase and sale. Once commercial and bribery companies are found to be involved in commercial bribery, they will be listed as bad records, affecting the bidding and procurement of their products.

安徽印发第一类医疗器械产品备案管理新规

In order to timely correct the industry chaos, strengthen the supervision and management of medical device recalls, and effectively promote the implementation of the main responsibility of corporate recall, according to the "Regulations on the Supervision and Administration of Medical Devices" (hereinafter referred to as the "Regulations"), the State Food and Drug Administration has enacted the "Medical Care" Device Recall Management Measures (hereinafter referred to as the “Measures”). The Measures will be implemented on May 1, 2017. The areas encouraged by the policy have large market space, high technical barriers, and a good competitive landscape. Relevant enterprises still have broad development prospects. Especially in the orthopedic orthopedic implants, cardiovascular degradable stents, high-end medical imaging equipment and other sub-sectors. The markets in these fields are still vast in China, and the technology and channel strength of domestic leading enterprises are continuously enhanced, and the potential for import substitution is greater.

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