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China's Healthcare Reform: A Bonanza for Medtech Manufacturers

by Lynn Shapiro, Writer | May 20, 2009

"The after-market business is a large market for Varian," Pan says. "Our customers can purchase new compatible replacement tubes at competitive prices, which helps to keep their maintenance costs down in these trying economic times."

Varian Pan-Pacific also supports the expanding digital X-ray market in China with its PaxScan flat-panel digital X-ray image detectors for digital radiography, fluoroscopy, and cone-beam CT imaging.

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A Few Caveats

While the Chinese are relaxing their regulations so that new demand can be met quickly, there are still a few caveats to doing business there as an OEM.

"They want to accomplish their health care reform frugally," says AdvaMed's Nancy Travis, Vice President, Global Strategy and Analysis, who says the government has asked AdvaMed member companies to lower their medical equipment prices. "We're concerned that downward cost pressure will hurt our members," Travis told DOTmed. "We have a good dialog with the Ministry of Health and are going to be working with this agency to assure that any cost-cutting measures are done sensibly and respect the value of our members' technology," Travis says.

She says AdvaMed is also working with the Chinese government to streamline its cumbersome registration system.

The Chinese government is in a transition process, Travis says, gearing up to use ISO13485 standards, as Western companies do. The cornerstone of this quality management standard is to build quality into systems while they are being designed and continue to hone them even after they've hit the market.

"What most regulators do, in the U.S. and other developed countries, is accept test reports from manufacturers who they know use this system and then do factory inspections to verify the information," Travis says.

In contrast, "China still collects product samples from the companies and tests them themselves. Product testing can take a very long time. And some products are too advanced for China labs to test. So often times they'll try and do the test but may have to get back to the company, or the company has to help them. This can drag out the testing process for many months."

"China is somewhat receptive to changing this. They are willing to exempt some products from testing for re-registration, which takes place every four years. They've taken a partial step, but a step in the right direction," Travis notes.

Refurbished Goods Banned

Of note is the fact that refurbished imaging equipment was banned in China in 1998 because regulators didn't have the know-how to measure its quality. Perhaps this will change, as China gets up to speed on medical technology.