In recent years, the in vitro diagnostics (IVD) industry has experienced rapid development. According to the Annual Report on the In Vitro Diagnostic Industry (2022 Edition), the size of China's IVD market has reached 170 billion yuan in 2022, with a year-on-year growth of over 30%. However, with the gradual implementation of centralized procurement policies, the IVD industry is facing significant challenges and opportunities.

Centralized procurement policy: dual effects of price reduction and import substitution

The IVD industry mainly includes two categories of products: IVD reagents and IVD instruments. In the past, due to high technological barriers, the IVD market was monopolized by foreign-funded enterprises for a long time. However, since 2010, with strong policy support, local enterprises have made significant breakthroughs in the field of mid to low end immune diagnostic products and gradually entered high-end fields such as chemiluminescence and molecular diagnostics, striving to achieve import substitution.

The implementation of the centralized procurement policy has further accelerated this process. Taking the 2021 Anhui chemiluminescence reagent procurement as an example, with an average price reduction of 47.02%, domestic enterprise Mindray Medical won all the bids and became the big winner. This not only significantly reduces the price of IVD reagents, but also significantly increases the market share of domestic products, breaking the monopoly position of foreign-funded enterprises in the field of chemiluminescence.

The impact of centralized procurement on IVD instruments

IVD reagents and instruments usually need to be used together, so whether centralized procurement can drive the growth of instrument sales has become a focus of attention in the industry. Regarding this, IVD industry expert Lao Liu stated that centralized procurement of biochemical testing reagents is unlikely to drive instrument volume increase, as the cost and output of biochemical instruments are high, and manufacturers have weak willingness to invest. For chemiluminescence detection instruments, centralized procurement may bring market opportunities, but the overall impact is limited.

In addition, the impact of centralized procurement on the sales of IVD reagents is also quite complex. Although centralized procurement may promote sales growth in the short term, in the long run, factors such as healthcare payment reform and DRG/DIP also have a significant impact on sales. The main function of centralized procurement is to lower prices, rather than directly promoting sales growth.

Foreign funded enterprises entering: Changes in the pattern of centralized procurement

As IVD centralized procurement becomes normalized, foreign-funded enterprises are gradually participating in centralized procurement. For example, Roche Diagnostics has reached an agreement with medical institutions in the Nanjing area to reduce the average price of over 500 products by 30.3%, with an expected annual savings of 102 million yuan in procurement funds. In addition, foreign-funded enterprises such as Beckman have also actively applied for price reductions to prepare for the upcoming centralized procurement.

Although foreign-funded enterprises still dominate the field of chemiluminescence, domestic enterprises are gradually seizing market share through technological innovation and market strategies. Whether foreign-funded enterprises will significantly reduce prices due to the centralized procurement policy still needs to be carefully observed. However, the enormous potential of the market has led foreign-funded enterprises to adopt a more positive attitude towards centralized procurement.

Desheng New Materials: Supporting the High Quality Development of IVD Industry

Against the backdrop of normalized centralized procurement in the IVD industry, how enterprises can seize opportunities and respond to challenges has become the key to achieving sustainable development. As an important partner in the IVD industry, Desheng New Materials has always been committed to providing reliable solutions for IVD enterprises.

Desheng New Materials provides reliable raw material support for the production of IVD reagents and instruments with advanced technology and strict quality control. Whether it is the core material of chemiluminescence reagents or the key raw materials in diagnostic kits, Desheng New Materials can provide customized solutions for customers, helping enterprises stand out in the fierce market competition.

With the continuous expansion of IVD centralized procurement scope, industry competition will become more intense. Desheng New Materials will continue to uphold the concept of innovation driven and quality-oriented, work together with IVD enterprises to promote high-quality development of the industry, and contribute to the improvement of China's in vitro diagnostic level. In the context of normalized centralized procurement, IVD enterprises can only stand undefeated in the transformation by continuously improving their technological level and optimizing their cost structure. Desheng New Materials is willing to work together with you to create a better future for the IVD industry.