China Healthcare & Lifesciences Roadshow

Medical Technology

Draft The China medical devices market is forecast to grow to over $32bnby 2018 Forecast Section 5 – PwC Sector Insights U S $ ( b) China Medical Device Market $ (bn) +15% China is currently the fourth largest medical device market in the world with an estimated value of $16bn in 2013 The market has grown rapidly since 2008, almost doubling in size at a CAGR of over 20% This has been driven by rapid growth in dental and orthopaedics/prosthetic products, bolstered by strong economic growth 17% 39% 7% 4% 15% 18% Chinese Medical Device Market 2013, $ (bn) Consumables Diagnostic Imaging Dental Products Orthopaedics & Prosthetics Patient Aids Others UKTI MedTech overview for Chinese investors PwC July Growth in the industry is expected to continue to 2018 where the market is expected to grow to over $32bn By 2018 the Chinese market is expected to overtake that of Germany to become the third largest market, behind the USA and Japan Orthopaedics and prosthetics are expected to see the largest growth, driven by the aging population and a higher incidence of musculoskeletal disorders

China Road Show China Medical Device Market growing at 15-20% pa This has been for most of the last decade Fierce Medical ( Jan 29 th ) reports that China to surpass Japan to be No2 – topping £55billion Rising demand for Healthcare Expanding middle class driving demand. Since 2012 $125bn to extend insurance for 1.3bn popn. 95% of China popn. has health insurance

China Road Show Chronic diseases = 70% of disease cases W.H.O 2012 China had 3mn new cancer (over 20% of World Total) W.H.O 230 mn Chinese suffer from CV disease ( increasing by 50% before 2030) Almost 115 mn adults with diabetes ( 1/3ww) 180 million over 60 years old 90% public hospital but 90% is fee for services

China Road Show Regulatory Changes – Innovative Medical Device Assessment within CFDA. Key mechanism new to China mkt..correct tech issues during review Simplify re-registration..minor changes in process or manufacturing sites Imposing stricter clinical trial requirements whether imported or local. All 11 or 111 need local trials Oct 2014 New Regulation (650)

China Road Show Price pressure is intensifying Tendering is increasing Distributor channel mark up under pressure Re-imbursement is expanding Smaller Hospitals taking on larger role Separate regulatory and management bodies Private hospitals growth to provide 20% HC c

China Road Show ISSUES Window shopping Governance China focus IP Culture/Style

China Road Show OPPORTUNITIES Drive to innovation Lack of R&D ( Bradford Initiative) Upscaling of companies – Stock listed Investor opportunities New breed of CEO UK Hospital Ownership

Geographical Size Source: CBBC

China Road Show Over 500 Chinese companies exhibited at Medica in Dusseldorf First review – see for yourself! CMEF Shanghai May 22 companies Sidhil Manufactures and sells in China Owen Mumford Subsidiary in China Lidco/Aircraft via Beijing Gloryway Medical

China Road Show There are UK companies who are successful in China. There are new opportunities Sinopharm - Cross border e commerce from Shanghai Free Trade Zone for Class 1 and 11 Need for Innovation Help is available UKTI/CBBC