A Major Supply Chain Transformation Is Reshaping the Future of the Medical Industry

A massive transformation is quietly taking place in the current healthcare industry.

In recent years, due to geopolitical factors and the international market environment, the importance of supply chain security has been raised to an unprecedented level. Reflected in the field of medical innovation, as a link between research and application, raw materials and products,Pharmaceutical and medical device supply chain and service enterprises have also received widespread attention from the industry and have been continuously heavily invested in by capital.

Data doesn’t lie. Take the pharmaceuticals sector as an example. According to incomplete statistics from VCBeat, in 2023 alone, the total financing amount in upstream pharmaceutical supply chains, such as CXO and innovative drug raw material supply, reached 30.14 billion yuan, approaching the total financing of 36.33 billion yuan for innovative drug research and development.

● In 2023, upstream supply chain projects generally attracted more investment than innovative drug research and development projects.

Source: "2023 Innovative Drug and Supply Chain Annual Innovation White Paper"

In some indicators, pharmaceutical and medical device supply chain and service companies are already industry leaders, such asThe average financing amounts for CXO and innovative drug raw material supply projects are 220 million yuan and 210 million yuan, respectively, far exceeding the average financing amount of 140 million yuan for innovative drug research and development projects.

Besides, a number of upstream supply chain enterprises in China have already possessed the ability to participate in international market competition, which provides greater room for imagination for the future development of the entire industry.

But like the two sides of a coin,The major transformation in the industry is both an opportunity and a challenge — the development history of China's pharmaceutical and medical device supply chain and service enterprises is not very long. Many companies have previously remained under the radar, lacking sufficient exposure. Excellent products suffer from insufficient industry recognition, and channels for cooperation and communication between upstream and downstream enterprises are not smooth, with "bottlenecks" everywhere.

Therefore, how to more "smoothly" promote cooperation and transactions between upstream and downstream enterprises in the pharmaceutical and medical device supply chain, and help these enterprises achieve a balance between scale and quality development, has become an important proposition in the industry.

Based on these issues, the fully upgraded 8th Future Healthcare Exhibition this year (hereinafter referred to as "VBEF") has provided an excellent platform for pharmaceutical device supply chains and service enterprises.

It is reported that "VBEF" will be hosted by VCBeat, VB100, VCBeat, and VBInsight, with strategic cooperation support from the Tianjin Binhai Zhongguancun Science Park Management Committee and Beitangwan Digital Economy Industrial Park. The event will be held in Beijing from May 7 to May 10, 2024. Specifically, at the pharmaceuticals and medical devices supply chain and service level,"VBEF" launched a new product release zone for future healthcare, showcasing outstanding products from the upstream pharmaceutical and medical device supply chain to the entire healthcare innovation industry, fostering connections and cooperation between upstream and downstream sectors. Additionally, it hosted five forums related to the pharmaceutical and medical device supply chain to strengthen industry linkages and experience sharing.

There is no doubt that, in the midst of a major supply chain transformation, the future of the healthcare industry is being rewritten.

From the current progress,China's pharmaceutical and medical device supply chain and service enterprises have achieved significant breakthroughs and are now experiencing their moment of glory.

In terms of the medical device supply chain, many leading companies have gradually paved the way for commercialization after years of research and development. They have developed strong competitive advantages, particularly in the fields of medical imaging, gene sequencing, X-ray detectors, mass spectrometry, and liquid chromatography.

Looking at the direction of the biopharmaceutical supply chain, many innovative companies in China have achieved independence, security, and controllability in their supply chains. In areas such as culture media, filtration equipment, and single-use reactors, they have completed industry breakthroughs from 0 to 1.

Taking the example of BioCreation Synthetic Biology, which has settled in the Tianjin Binhai Zhongguan Science and Technology Park, the company has addressed upstream bottlenecks and supply chain shortages in the biopharmaceuticals industry through fermentation and purification technologies, offering comprehensive solutions from equipment to processes. To date, BioCreation Synthetic Biology has established production lines for high-end amino acids and downstream products, as well as nucleosides and their derivatives, capable of achieving strain improvement and customization for various raw materials, precise control of the fermentation process, optimization and customization of separation materials, and analysis of critical impurity impacts.

An investor previously interviewed by VCBeat stated that the localization of supply chains has made remarkable progress in recent years, which is of great significance to the safe development of China's medical devices and biopharmaceuticals. Moreover, excellent localized products can not only be supplied to domestic companies but also go overseas, integrating into the global system.

Of course,From the development status of the entire pharmaceutical and medical device supply chain, China's pharmaceutical and medical device supply chain still has much potential to be tapped.

For example, in the biopharmaceutical supply chain, CXOs capable of conducting complete translational medicine research—such as those specializing in the synthesis of special molecules, unique activity evaluation models, experimental animals, and disease models—are currently scarce in the market. It is crucial to nurture and support such enterprises.

On the器械供应链 side, the raw materials and core components of some medical devices are still controlled by overseas companies. Affected by factors such as the international trade environment and the business conditions of overseas suppliers, development has been slow. There is an urgent need for the introduction of relevant professional talent and support from industrial policies.

In response to this, some key supportive policies are being introduced. For instance, the "14th Five-Year Plan for the Development of the Bioeconomy" issued by the National Development and Reform Commission specifically mentions the need to enhance original innovation capabilities.Enhance the supply chain security level of high-end biopharmaceutical products and equipment.

Guided by policy pathways, VCBeat has found that local governments across China are accelerating the innovative development of the biomedical industry's industrial and supply chains, as well as the layout of the pharmaceuticals industry. They are also improving the pharmaceuticals industrial chain and actively promoting the resilience and security of the biomedical industry’s chain.

At the same time, keenVC/PE has also provided financial support to pharmaceutical and medical device supply chain enterprises.Taking the细分赛道 of the upstream raw material supply chain for innovative drugs as an example, in 2023, a considerable number of innovative companies secured hundreds of millions in financing. Notably, Sangon Biotech (Shanghai) Co., Ltd. raised 2 billion yuan in its first round of financing, demonstrating the significant attention and recognition VC/PE firms have for supply chain enterprises.

●Top 10 Financing in the Upstream Raw Material Supply Sector of Innovative Drugs in 2023

Data Sources: VBInsight, Public Reports from Various Enterprises, VCBeat Research Institute

In addition,A closely-knit industrial ecosystem is also accelerating its construction.For instance, at present, association events and forums related to the pharmaceutical and medical device supply chain are being held one after another, providing companies upstream and downstream in the industry with opportunities for in-depth exchanges and fostering cooperation. At this "VBEF," there are five supply chain-related forums, including the Medical Device Design and Manufacturing Forum, Bio-regenerative Materials Forum, Laboratory Instruments and Equipment Forum, CGT Therapies Forum, and RNA Therapies Forum.

Taking the Bio-regenerative Materials Forum as an example, relevant guests will share insights on cutting-edge topics such as the opportunities and challenges of bio-regenerative materials, development strategies and application transformation in the sub-track of cell-based regenerative medicine. VCBeat will premiere the "2024 Bio-regenerative Materials Industry Research Report: A Key Branch of Regenerative Medicine, with Innovations Led by Three Major Segments—Orthopedics, Trauma, and Medical Aesthetics." Enterprise representatives will share topics such as the application of frontier technologies (e.g., 3D printing technology) in bio-regenerative materials, clinical translation of tissue repair functions, and diversified innovations in bio-regenerative materials based on their practical experience and industry development needs.

Another example is the Medical Device Design and Manufacturing Forum, which will focus on the theme of "Independent Development and Intelligent Manufacturing of Medical Devices." Experts such as the Deputy General Manager of the National Innovation Center for High-Performance Medical Devices and the Deputy Dean of the Innovation Research Institute; professors from Soochow University, U.S. FDA-certified toxicologists, and pathologists will be invited to support the event. The forum will gather key participants in the industry chain, including leading domestic upstream raw material suppliers and core component providers for devices, medical device CROs, CDMOs, service providers, and medical device companies, to jointly discuss the challenges and opportunities in the independent innovation and intelligent manufacturing of medical devices. It is not difficult to see that the discussion topics of each forum are both cutting-edge and highly focused.

However, it is important to note that apart from the support of policies and capital and the construction of the industrial ecosystem,The innovation of pharmaceutical and medical device supply chain enterprises themselves is the most important.

In this regard, for companies entering the industry, the first task is to enhance independent innovation capabilities and increase R&D investment, focusing on product development and business model innovation to address the "last mile" of transforming research results into market applications. Secondly, they should maintain close communication with upstream and downstream players in the industry, pay attention to real market demands, and promptly adjust their operations to achieve long-term development.

Throughout the history of global industrial development, no enterprise or track can take off independently from the entire industry.Only by integrating into the industry and collaborating with all participants in the industry can we truly achieve rapid and unstoppable development.。The pharmaceutical and medical device supply chain enterprises are no exception.

But achieving synergy is not easy. On the one hand, an increasing number of innovative Chinese medical products have been approved for marketing, yet China's medical innovation companies lack a good platform to showcase their voice and systematic opportunities for presentation. On the other hand, some breakthrough-seeking agents and upstream and downstream enterprises similarly lack a centralized venue to discover innovative medical products.

In response to this industry pain point, this "VBEF" will provide diversified "voice" formats for pharmaceutical and medical device supply chains and service companies, including independently setting up product release stages, product text display areas, "supply" interactive zones, and other offline product display options at the exhibition. Additionally, a special VBEF central stage will be set up for featured activities such as new product launches, global medical innovation product selection meetings, project roadshows, and highlight moments. Companies can utilize booths or release stages to gain multiple exposures through product promotion, corporate publicity, project promotion, and new product releases.

It is worth mentioning that, in order to explore the upstream products and solutions with the most innovative potential in the pharmaceutical and medical device supply chain field, and to select industry benchmarks to further promote the progress and upgrading of the supply chain industry, VCBeat VB100 also launched the "Outstanding Upstream Products in Pharmaceutical and Medical Device Supply Chain" selection activity, from which the supply chain products with the most procurement value and the best technical service supply chain products were selected.

It is reported that these outstanding products will not only be displayed in the new medical product release zone but also participate in the award ceremony at the "VBEF" event. They will enter a field for precise demand matchmaking involving enterprises, investment institutions, and government industrial parks, promoting cooperation and the construction of an innovation ecosystem.

In addition, the "Future Healthcare 100 List – Top 100 in Medical Commerce and Supply Chain Services" will also be released on-site, showcasing to the industry those pharmaceutical and medical device supply chain and service enterprises that have continuously broken through and innovated over the past year.

After solving the "voice" issue, how can collaboration precisely promote delivery?In response, "VBEF" has set up five major exhibition areas at the expo. Among them, the Future Medical Key New Technologies Exhibition Area mainly showcases products in the "bottleneck" areas of medical care, such as upstream key technologies in biomedicine and medical devices, core raw materials and components like electronic components, chips, and CT tubes. The Future Medical New Services CXO Exhibition Area focuses on displaying leading, representative, and innovative pharmaceutical CXOs and device CXOs, as well as industry chain empowering enterprises providing smart medical services. The Future Medical New Product Launch Section will showcase new products released by companies in fields such as supply chain solutions over the past year.

Currently, the entire exhibition has gathered 200+ new product launches, 3000+ companies, and 500+ investment groups. Over 600 companies and products have confirmed participation, attracting global buyers, including partners from Indonesia, Singapore, Belgium, Ireland, Spain, Germany, Australia, the UK, Canada, and other countries.

This shows that,At both the supply and demand ends, "VBEF" is gradually becoming a bridge, helping pharmaceutical and medical device supply chain and service companies to connect and collaborate with the industry more quickly and effectively, thereby seizing market opportunities and unlocking more possibilities.

Where Will the Future of the Medical Industry Go?

This issue is hard to predict, but one thing is certain,Medical innovation will become increasingly vibrant.Behind this lies the regulatory system's creation of a suitable and inclusive environment for the healthcare innovation industry over the past decade or more, such as strong support for innovative drugs and the green channel for medical device innovation.

Moreover, China's basic scientific research capabilities are strengthening, the shift of academic centers has begun, and truly globally influential domestic academic journals are emerging. This will provide fertile ground for original innovation.

Facing such a moment of structural change,The importance of the pharmaceutical and medical device supply chain becomes even more prominent — in line with the trend, China's medical innovation enterprises are bound to shift from "vertical industry chain extension, technology and service upgrades" to "horizontal alliances between strong players, complementary advantages, expanding brand influence, and increasing market share.", the cooperation and exchanges between enterprises have been strengthened, jointly exploring new territories.

Therefore, paying attention to the development of the pharmaceutical and medical device supply chain industry, accompanying the growth of pharmaceutical and medical device supply chain and service enterprises, has become an important proposition and "key battle" for the industry in the coming period.

"And to 'win this battle,' it is absolutely impossible to rely on a single company or institution alone; instead, it requires the joint efforts of all participants, including enterprises, governments, capital, and industrial parks."

Therefore, in the historic process of the major transformation of the pharmaceuticals and medical devices supply chain, every industry participant is an experiencer and promoter, collectively creating a brand-new future of medical innovation, and sharing the honor of this era.

May 7-10, 2024, welcome to attend the 2024 Future Healthcare Ecosystem Exhibition at the Beijing Yichuang International Convention and Exhibition Center, and witness a new historical moment in the development of the pharmaceuticals and medical devices supply chain industry!