AdvaMed: China's push for hospitals to buy domestic devices all talk, no action

AdvaMed's Ralph Ives

Ralph Ives, AdvaMed's executive vice president of global strategy and analysis, told FierceMedicalDevices that China has not implemented its much-ballyhooed policy of using more domestic devices at its hospitals at the expense of foreign imports.

FierceMedicalDevices previously reported on a meeting between Chinese government officials and the heads of 44 large hospitals, during which the hospital heads were told to buy more domestic equipment.

"There's been statements by senior government officials, along the lines of they believe more of the devices should be domestic," Ives said during an interview in his office. "So far, and I've asked a lot of our members this, so far these are just statements of belief. I've asked our members, I've asked the U.S. government, I've actually asked the Chinese government, 'Are there any examples where you can you show me that this has been put into effect? Where the hospital says we'll only buy domestics?' and we found one example and we're not even sure whether that has been implemented."

"It's a very difficult policy to carry out for most medical devices, because quite frankly most of the innovative devices come from foreign sources," Ives said. "If you're a government hospital (in China) and you say, 'I want to buy domestic pacemakers,' you're not going to get a lot of pacemakers."

Ives said the bottom line is that AdvaMed--the trade association representing American medical device manufacturers--is concerned about the pronouncements but hasn't seen any concrete evidence that the policy has been implemented.

Government tendering (the allotment of federal bulk purchase contracts of medical devices) is a touchy and hot topic in China, as it is in most other countries. Ives said that AdvaMed has created a tendering task force in China. Chinese-speaking company representatives on the task force discuss their comments and concerns about the tendering system with the Chinese government, Ives said.

Most of the tenders are conducted at the provincial level. There have been 40 to 50 different tenders completed in the last couple of years, Ives said.

A related topic is government reimbursement of procedures and hospital care.

To that end, Ives said the Chinese government is interested in integrating diagnosis-related groups into their reimbursement system. Under the DRG system, the government pays hospitals a flat fee for in-patient care depending on the care delivered or procedure that was performed. In the U.S., there are about 750 different DRGs, such as lung transplant and seizures with major complications and comorbidities.

"The Chinese are trying to get a handle on healthcare costs, and they see that DRGs are implemented in many other countries. So they've come to us, and we've had roundtables to discuss some of the pros and cons of DRGs, and that may be something that they may try on a pilot basis sometime this year," Ives said, adding that it took the U.S. about 20 years to fully implement the payment system.

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