At a glance: The MIIT and China’s food and drug watchdog, the National Medical Products Association, released an application call to ‘unveil the list’ for three types of biomedical materials (polymer, metal and inorganic non-metallic materials). Unveiling the list refers to a competition-based research model whereby policymakers identify important technologies and select promising firms to develop them with government support, with the intention to later incorporate them into government procurement programs. In that sense it is akin to a pre-commercial procurement agreement.
Consortia of producers and up- and downstream stakeholders, including research institutes, can apply to participate in the scheme by February 10. Good political relationships and government titles such as “Little Giants” will go a long way, as provincial governments can recommend specific applicants.
Short-listed companies will benefit from preferential policies and resources, including land, capital and energy supplies. A professional body will evaluate newly developed products. The winner’s products will be listed on the NMPA’s medical device master file and benefit from a subsidized insurance scheme to promote high-tech products.
MERICS comment: Despite years of trying to produce high-tech biomedical materials domestically, China still relies heavily on imports. 70 percent of high-end biomedical materials come from other countries. Beijing views the ability to produce these materials locally not only as an economic opportunity, but also as a matter of national security, fearing potential supply disruptions caused by foreign countries.
Hence, officials are taking steps to address – what in their eyes is – a market failure in the medical technology industry by providing assurance to potential local suppliers that they will have a market for innovative or first-time China-developed solutions. They are also working to ensure that medical institutions will be compensated if materials do not meet their standards.
If successful, the policy would negatively impact foreign producers who currently supply high-tech biomedical materials such as high-end polytetrafluoroethylene (PTFE) varieties that are used for implants. If Chinese competitors can develop “good-enough” alternatives, foreign producers may be replaced in the market through local content requirements or “Buy Chinese” policies.
Article: Notice on Organizing and Carrying out the Work of Unveiling the List of Innovation Tasks for Biomedical Materials (First Batch) (两部门关于组织开展生物医用材料创新任务揭榜挂帅（第一批）工作的通知) (Link)
Issuing body: MIIT, NMPA
Date: December 15, 2022