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The Annual Report of China IVD Industry 2021 Part II-I Opportunities

Industry news | 31 October, 2023 | CACLP

1.8  The state increases investment in the construction of medical institutions and facilities

 

In the middle of this year, the National Development and Reform Commission issued the Implementation Plan for the Construction of a High-quality and Efficient Medical and Health Service System during the 14th Five-year Plan Period (hereinafter referred to as the Plan) formulated by four departments. The state has made it clear that within five years, a high-quality and efficient integrated medical and health service system with complete system, reasonable layout, clear division of work, complementary functions, close cooperation, efficient operation and resilience should be basically completed. With the policy support, a large number of medical device gaps emerged, and the medical device market ushered in a trillion-level allocation tide. The Plan proposes that by 2025, a high-quality and efficient integrated medical and health service system with complete system, reasonable layout, clear division of work, complementary functions, close cooperation, efficient operation and resilience will be basically completed. The amount of investment subsidy within the central government budget for any single project of provincial, municipal and county-level CDC shall not exceed 200 million CNY, 50 million CNY and 10 million CNY respectively. The maximum amount of investment subsidies within the central government budget of regional medical centers, national serious infectious disease prevention and cure bases and national major medical rescue bases shall not exceed 500 million CNY, 300 million CNY and 300 million CNY respectively. The Plan requires strengthening the construction of county-level medical communities, encouraging the construction of open and shared imaging, ECG, pathological diagnostics, medical examination and other centers based on county-level hospitals, strengthening the provision of telemedicine and information equipment, connecting with high-level provincial and municipal hospitals, and connecting with primary medical and health institutions[3]. With the policy support, products such as IVD and medical equipment, as an important link of the construction of medical institutions, will gain incremental market, and listed companies on related tracks are expected to benefit.

 

Recently, the National Health Commission and the Department of Finance jointly released the Notice on Issuing the 2022 Serious Infectious Disease Prevention and Control Budget in Advance. The Notice makes it clear that 15.57 billion CNY of financial funds will be issued in advance to expand the national immunization program, AIDS prevention and control, tuberculosis prevention and control, schistosomiasis and echinococcosis prevention and control, mental health and chronic non-communicable disease prevention and control, COVID-19 and other key infectious disease monitoring.

 

At the same time, the Ministry of Finance also issued the Notice on issuing the 2022 Basic Public Health Service Subsidy Budget in Advance. Compared with 2021, the basic public health subsidy in 2022 issued in advance this time has increased significantly, totaling 58.85 billion CNY[5]. The central and western regions received more subsidies, all exceeding 20 billion CNY. Sichuan, Henan, Shandong, Hunan and other provinces received more funds. Nearly half of the subsidies will be invested into grassroots to improve basic public health services.

 

At the same time, aiming at the problem of insufficient cure capacity in public health emergencies, the National Health Commission pointed out that county-level hospitals were currently equipped with 9.7 ventilators on average (a minimum of 0 sets and a maximum of 24 sets), including 2.3, 1.9 and 5.5 on average for respiratory department, emergency department and ICU respectively. The number of ventilators in the eastern, central and western regions shows a decreasing trend. The hospitals in poverty-stricken counties are equipped with 6.5 ventilators on average, and the respiratory department, emergency department and ICU of the hospitals in poverty-stricken counties are also equipped with less ventilators than the general level of county-level hospitals. This also means that with the advanced issuance of subsidies, the major primary medical institutions will further supplement the missing medical devices, so as to improve the comprehensive medical service capacity and complete the tasks indicators assigned by the state.

 

Undoubtedly, in the post-pandemic era, with the new requirements of the state for the construction of public health at the grassroots level, there will be more new opportunities for the industry.

 

Last: Opportunities Pt.2

 

Next: Opportunities Pt.4

 

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