China Announces Nationwide Price Cuts for 257 High-Value Medical Devices, Including a Record ¥40,680 Reduction on Cardiac Pacemakers

On September 8, the Heilongjiang Public Resource Trading Network released the "Public Notice on Adjusting Price Information for High-Value Medical Consumables," announcing the price reduction results for 257 types of consumables.

According to a review by Saibailan Medical Devices, the current price adjustments for high-value consumables cover electrophysiology, non-vascular implants, joint, dental, neurosurgery, extracorporeal circulation and blood purification, and vascular intervention categories. The affected products include those from renowned domestic and international medical device companies such as B. Braun, Boston Scientific, Fresenius, Shanghai MicroPort, and Smith & Nephew.

The maximum price reduction reached 54.55%. Eight types of medical consumables saw price reductions exceeding 50%, six types had reductions between 40% and 50%, fourteen types had reductions between 30% and 40%, and sixteen types had reductions between 20% and 30%.

For example, a certain cranial fixation titanium mesh and screw system from B. Braun Melsungen AG saw its price drop from RMB 6,600 to RMB 3,000, representing a 54.55% decrease;

A collagen-based bone repair material from Tianjin Saining Bioengineering Technology Co., Ltd. saw its price drop from 5,600 yuan to 2,800 yuan, a 50% reduction;

Shanghai Pharma Holdings’ intraocular lenses dropped from 3,500 yuan to 2,292.99 yuan, a decrease of 34.49%.

Although the percentage price reduction for some consumables was not the highest, the absolute price drop exceeded RMB 40,000. For a certain implantable cardiac pacemaker from Boston Scientific, the price decreased from RMB 93,060 to RMB 52,380, representing a reduction of RMB 40,680 and a percentage decrease of 43.71%.

This reduction has approached or even exceeded the average price reduction achieved in volume-based procurement programs in certain provinces.

On August 19 this year, the Anhui Provincial Healthcare Security Administration announced the completion of price negotiations for the second batch of centralized volume-based procurement of high-value medical consumables across public healthcare institutions in the province. Among these, 82 types of cardiac pacemakers saw an average price reduction of 46.75%.

On July 31, 2019, the results of the first-ever consortium negotiation for medical consumables in Jiangsu Province were announced. For pacemakers, negotiations were conducted by manufacturer. The average price reduction for selected products from winning manufacturers was 15.86%, with a maximum reduction of 38.13%.

Multinational Medical Device Companies Dominate the Hundred-Billion-Yuan Market

Cardiac pacemakers are implantable electronic therapeutic devices that deliver battery-powered electrical pulses via a pulse generator. These pulses are conducted through lead electrodes to stimulate the myocardium in contact with the electrodes, thereby inducing cardiac excitation and contraction. This mechanism aims to treat bradycardia and other heart rate disorders caused by certain types of arrhythmias.

The market for electrophysiology and pacemakers is significant. According to GlobalData analysis, the global cardiac rhythm management market size was estimated to reach approximately USD 14.3 billion in 2018 and is expected to reach USD 15.7 billion (approximately RMB 107.8 billion) by 2020, with a compound annual growth rate (CAGR) of 4.6%.

Pacemakers are primarily categorized into four types: single-chamber pacemakers, dual-chamber pacemakers, three-chamber pacemakers, and three-chamber cardioverter-defibrillator pacemakers.

According to data from China Industry Information Network, single-chamber pacemakers are considered low-end products, with domestic prices ranging from 20,000 to 30,000 yuan. Their therapeutic efficacy is limited; while they can meet patients' basic needs, they may lead to pacemaker syndrome. Dual-chamber pacemakers represent an upgraded version, priced at approximately 50,000 yuan. They operate by placing one electrode each in the atrium and ventricle, thereby better simulating the normal physiological state of the heart.

Three-chamber pacemakers represent the most advanced products, priced at approximately RMB 100,000 in China, and are capable of treating heart failure caused by left-right ventricular dyssynchrony. Three-chamber implantable cardioverter-defibrillator (ICD) pacemakers combine a three-chamber pacemaker with a defibrillator, demonstrating significant efficacy in patients with dilated cardiomyopathy; however, they command the highest prices, ranging from RMB 150,000 to RMB 250,000.

According to the 2015 China Cardiovascular Report, dual-chamber pacemakers accounted for nearly 67% of all types of pacemakers.

Domestic market penetration remains low, with multinational medical device companies dominating the majority of the market. According to data from China Industry Information Network, by 2017, Medtronic, St. Jude Medical, and Boston Scientific collectively held over 80% of the market share.

It is understood that the technological barriers to pacemaker research and development are relatively high; it was not until 2009 that domestic enterprises broke the foreign monopoly on cardiac pacemakers.

According to Huoshi Chuangzao’s analysis, Shaanxi Qinming Medical Instrument Co., Ltd. is China’s earliest enterprise specializing in the cardiac pacemaker business. In July 2009, its Qinming 2312S/M implantable cardiac pacemaker, jointly developed with Xi’an Jiaotong University over a six-year period, successfully obtained medical device registration certification, breaking the foreign monopoly in China’s pacemaker market.

In 2010 and 2012, Lepu Medical acquired a total of 75.1% equity interest in Qinming Medical through two separate transactions, thereby becoming its controlling shareholder. In 2016, Qinming Medical was officially renamed Lepu Medical Electronic Instrument Co., Ltd.