While the standard path for the industry is still being explored, it doesn't affect the industry's rapid growth period in any way.
China's medical health market is large, fast-growing, with vast incremental space, and is in the process of aligning itself with world-class medical highlands. Thanks to the release of medical consumer demand, policy guidance on the healthcare system, China's medical healthcare market has reached 13 trillion, and in the past eight years of rapid development, the market size of the compound annual growth rate of up to 13%, has now jumped to the world's second largest market. And according to a report by Sullivan Consulting, the total market size of medical e-commerce in China was RMB 187 billion last year and is expected to exceed RMB 558 billion in 2025. In the foreseeable future, both healthcare and business models will face a new jump, and the Chinese market is on the eve of a new era of digital healthcare.
Also valuing the prospects of this market, many companies at home and abroad have dabbled in it, strategically laying out around the three major themes in the frontier of digital healthcare in the post epidemic era, the first one being digital therapies. On cognitive behavioral therapy and software-enabled approach and other highly effective and innovative digital therapies; the second is the early screening and prevention of disease. Through big data technology and online patient education, early screening and prevention can be carried out before the appearance of clinical symptoms of diseases, improving the cure rate and health level of patients; and the third is user experience under the connected ecosystem. The multinational giants are collaborating with the local community to integrate the user experience into their digital ecosystems in the Internet era, thereby realizing service upgrades.
At present, domestic startups and enterprises, including Shangtang Technology, Shangmedic Information (App), Good Sleep 365, Micro Pulse, Keji, Firefly, etc., are focusing on the discussion of digital therapies, which also makes the ecosystem of relaying and complementing each other on the value chain of a healthcare innovation is being formed.
Zhang Jie, director of AI drug research at Shangtang Technology, believes that China's digital healthcare market is promising and has great potential. Shangtang Intelligent Healthcare firmly believes that with the help of cutting-edge technologies such as artificial intelligence, digital innovation will profoundly affect drug research, as well as all aspects of making comprehensive health decisions for doctors and patients.
"China will become the first country in the world that can realize the overall integration of O2O online and offline in healthcare to provide patients with a very good journey of disease, this kind of online and offline cooperation, the mode of providing services, in many FMCG fields, consumers are already very familiar with, for example, in the field of cosmetics, but in the medical industry is not quite the same. Especially with the deepening of aging, the creation of more medical needs, and the need for better disease prevention and awareness of treating the sick, physical resources alone are not enough, and a better ecosystem needs to be established." Dr. En-Ting He said.
PwC's "Mid-2021 Review and Outlook of M&A Activity in China's Healthcare and Healthcare Services Industry" report shows that from 2013 to the first half of 2021, China's healthcare and healthcare services M&A investments totaled more than 280 billion yuan cumulatively. Among them, 2016 and 2019 have so far presented the peak of industry M&A investment. in the first half of 2021, M&A deals were mainly contributed by financial investors, with the deal value accounting for 72% of the total deal value. financial investors' deals were concentrated in the field of digital healthcare, including AI-assisted diagnosis and treatment, medical informatization, and online diagnosis and treatment and health management.
According to MarketsandMarkets, the global digital therapy market is expected to grow to $13.1 billion in five years from $3.4 billion in 2021, continuing to maintain a growth rate of more than 20%. However, in China, due to various constraints, the commercialization of digital therapies is still in the early stage of market cultivation.
In fact, patient-centered health ecosystems are emerging around the world to meet the growing challenges. According to McKinsey's report, "The Future of Healthcare in Asia: Digital Health Ecosystems," Asia is paving the way for digital health ecosystems, where potential ecosystem stakeholders can create value by taking bold, strategic action. Such ecosystems are designed to seamlessly deliver the right care in the right setting at the right time by integrating three key "components": a network of healthcare providers across healthcare organizations, and intelligent systems that use behavioral, social, and health-related data to analyze patients' needs and select the right healthcare providers; Third, the technology backbone that enables the flow of data and insights between health providers.
In this regard, Ma Jing, head of commercialization at Sanofi China, said that there are big challenges in going from a technology to a product, and one of them is the challenge of regulation. In this global vision, how to regulate digital therapies has become a major challenge, especially a product based on software, in the face of the constant iteration of the Internet enterprise software, and all iterations have to be meticulously verified, and even reconfirmed and re-registered on the impact of the enterprise. This also requires regulators to think about how to define the product of digital therapy.
"If digital therapies are viewed as medical devices, whether this is a low to medium risk or high risk area has also become a topic of debate for many in the industry. After all, in order to productize and commercialize a medical device, you need to consider its regulatory pathway, and you need to provide relevant clinical validation data to prove its safety and effectiveness before you can finally get a registration certificate, and these are things that many digital therapy companies or startups need to consider." Ma Jing said.
"So, from a company level, we have to treat it differently. It's based on so many different factors that require us to have a different digital strategy in our local strategy drive and consider how to leverage the Chinese digital platform." Xie Lei said.
Watching the proliferation of companies engaged in digital therapies, there is no shortage of companies pursuing a fast-to-market, fast-iteration model, there is a great demand for clinical data and clinical use of feedback, and therefore, have long entered hospitals by giving away the system for free, in order to gain access to in-hospital data training and feedback from clinicians.
This also led to many business layout of the system is not good to sell, the homogenization of the competition is serious, and finally returned to the information technology company that the set of competition who has a harder business relationship, rather than the state of the system performance. In the homogenization of the competition model, the digital therapy industry as a whole is in the "trial" state, therefore, how to get through the commercialization model, to achieve the landing operation has also become a major key.
This also makes, in the new life cycle of China's independent innovative drugs, how to capital, innovation and R & D, clinical and other elements of the industrial chain of integration and linkage, to empower the development of China's digital health industry, to promote the completion of digital health care has also become a major key. Especially for the medical and pharmaceutical health industry, compared to other industries, the threshold of such industries is relatively high, the capital chain is relatively long, in order to realize the innovation in three to five years has a certain degree of difficulty.
In the social environment, policies and capital continue to develop to help the situation, through the multinational pharmaceutical enterprises innovation incubation can further promote the depth of biotechnology enterprises and industrial development of the aggregation, through the integration of science and technology and the economy of the blocking point, the advantages of science and technology into industrial advantages, and continue to promote the transformation of scientific and technological innovation to accelerate the landing.
Unlike Sanofi, as a leader in the field of optics and optoelectronics, ZEISS is actively expanding cross-border cooperation, while also focusing on new digital technology-enabled innovations, and is committed to creating a user-centered, data-interconnected solutions and a comprehensive ecosystem, as well as helping the development of the health care field with innovative optical technologies.
Xie Lei said, at present, Zeiss has built China Digital Solutions Center, for China some very special to build their own digital products and solutions. "For example, in eye health, we have localization, including cooperation with Ali, for the youth eye health small program, so they can better understand how to protect their eyes, but also better online and offline and hospitals to do joint, can help them improve eye health." Xie Lei said.
In the promotion of commercialization, multinational enterprises have a more sound system, but also at this stage, China's pharmaceutical industry is promoting "comprehensive independent innovation" industrial upgrading, at this stage, multinational enterprises in China to build innovation centers, will focus on China's most valuable cutting-edge technology, in order to achieve the goal of win-win. From the current development path, talent, capital, basic research is the three important factors of independent innovation, and multinational enterprises to carry out multi-party cooperation, *** through **** enjoy will also become the mainstream trend of Chinese enterprises in the future.
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