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In October 2019, Johnson & Johnson Medical and TINAVI announced a co-marketing, distribution and R&D agreement to maintain competitiveness in China’s orthopedic industry, including its rapidly developing enabling surgery market. The collaboration is a prime example of technology and company evolution in the region.
China’s orthopedic market experienced year-over-year revenue growth in the high teens in the latter part of the last decade and is estimated to be between $3 billion and $4 billion. While the industry’s five largest companies, DePuy Synthes, Stryker, Zimmer Biomet, Smith+Nephew and Medtronic, maintain large shares of the market and benefit from their sheer size, smaller China-headquartered companies seek to scale by focusing on advancing areas of technology like robotics, 3D printing and materials.
“We have seen a lot of high-tech startup companies emerging year by year in this field,” TINAVI Medical Technology CEO Jin Xu told us. “The supporting capital investment system is increasingly strong, and the orthopedic society has a high tolerance for innovative methods and technologies.”
When asked what the primary market opportunities in China are, Viki Chen, Regulatory Project Manager at the consulting firm China Med Device, also pointed to technology. “The focus of the future orthopedic market is mainly on computer-aided technology, 3D printing technology and the exploration of new materials and new processes,” she said.
Chinese Market Sees Growth in Robotics
Ten different robotic systems are used in orthopedic procedures globally, and multiple companies, including DePuy Synthes, NuVasive and MicroPort Orthopedics, have robots in development. Due to the size of its 1.3 billion population and its robust orthopedic growth, China is a target market for robotic systems.
Beijing-headquartered TINAVI received approval by the National Medical Products Administration (NMPA) for its robot at the end of 2016. TINAVI’s TIANJI® robot is used for spine and trauma cases. According to Xu, about 100 orthopedic robots were installed in China by the end of 2019. Of those 100, 80 were TINAVI systems and the other 20 were Stryker’s Mako for knee replacement and Medtronic’s Renaissance or Mazor for spine indications.
While TINAVI enjoys a system placement advantage, Xu said that the company and its competitors face the challenges of making the technology more versatile and at a lesser cost.
“The first challenge is how to bring more and versatile values to the orthopedic surgeons. A typical orthopedic surgery has a long and complicated procedure. TINAVI focused on rebuilding this procedure, based on image guidance navigation, robot control and other intelligent technologies. But, due to the technology limitation, application of the robotic system is still focused on guidance of some particular process in the whole workflow,” Xu said. “Surgeons expect more when they encounter the robotic surgery idea. This is the common dilemma in front of all orthopedic surgical robot developers, and it takes time to fill the knowledge gap with more intelligent tech research and integration. Only when the orthopedic surgical robot fulfills more surgical function needs and brings more value, this kind of system will become an irreplaceable infrastructure in orthopedic surgery.”
Pointing to cost, Xu said that paying for robotic systems and their use remains a challenge for hospitals. The barrier requires additional efforts to education surgeons and decision makers on the product and its benefits.
The opportunity for TINAVI and other orthopedic robotic companies is that there are plenty of unmet clinical needs, Xu said. TINAVI, specifically, plans to release new product lines that will cover different market sectors, and the company is exploring different business models and international expansion.
“We have a lot to do to keep innovating the products and service,” Xu said. “After 15 years of development, TINAVI has built a strong R&D team with a high standard quality control system. And the TIANJI surgical robot system is the marketing leader in China by all means. We’d like to keep our heavy investment and launch new generation of products.”
3D Printing Gains Investments, Regulatory Guidelines
Globally, orthopedic manufacturers are adopting 3D printing due to the flexibility it offers in device design and surface structure, as well as the ability to personalize or customize implants.
In August, AK Medical announced the purchase of eight Arcam EBM printers to address an increase in demand for 3D printed orthopedic implants. AK Medical, a joint replacement and spine company, received NMPA’s first clearance for a 3D-printed metal implant in 2015 and is one of the larger players in the 3D printing space in its home country. The company 3D prints hip cups, spinal interbody cages, vertebral bodies and osteotomy guides. In 2019, its 3D-printed products generated revenues of RMB 123.4 million (USD $17.4 million), growth of +76.5% compared to 2018.
“Additive technology itself is tremendously advantageous in terms of cost, and personalized customization is increasingly becoming an industry trend,” Li Zhijiang, Chairman, CEO and Executive Director of AK Medical, told 3D Printing Industry. “When you begin to think of it in combination with CT, nuclear MRI, software, the Internet, 5G and many other technologies, then AM is likely to unleash greater potential to boost the entire medical industry.”
The adoption of 3D printing in China is supported by NPMA’s guidance, said Chen. The agency published five 3D printing guidelines for orthopedics in the second half of 2019, two of which—3D-printed acetabular cups and 3D-printed vertebral bodies—were finalized this June.
Chen also said that China’s guidance on custom medical devices, “Customize-Designed Additive Manufactured (3D Printed) Medical Device Technical Review Draft Guideline,” will help orthopedic manufacturers generate clinical data for different indications much faster and at much lower cost.
“It specifies that, when there is no predicate device to compare to (innovative products) with limited patient volume and no readily available referenced devices, NMPA is only asking for 10 to 20 pairs of an observatory study,” she said. “It can be used in conjunction with historical data to do the general analysis. A three-month follow-up period is the minimum requirement to determine the observatory clinical benefits. It is relying on postmarket follow-up evidence with such a short endpoint and small sample size.”
While 3D printing has received manufacturer investments and regulatory backing, there is a need to continue to educate surgeons. AK Medical noted “continuous market nurturing” in its annual report.
National Policy Shapes Company and Technology Landscape
The advancements of 3D printing, enabling technologies and materials in China sets a technology landscape that reflects that of an established orthopedic market.
In September, Changmugu Medical/Longwood Valley Medical Technology, a strategic partner of Johnson & Johnson Medical, announced that it secured funding to support research and development of its new orthopedic artificial intelligence and navigation system. In the last five years, orthopedic materials and coatings manufacturers Invibio, Evonik, Solvay, Lincotek Medical and Orchid Orthopedic Solutions have all made investments in the country, working with domestic and international manufacturers.
The companies and technologies that prevail might ultimately be assisted by national policy. The Chinese government continues to favor local companies and manufacturing over foreign manufacturers operating in the country. Since 2014, the country has issued more than 20 policies to support these efforts, Chen said.
“The ‘Healthy China 2030 Planning Outline‘ places considerable emphasis on the localization of high-end medical devices,” Chen said. “Relevant ministries and commissions have successively promulgated ’Medical Device Registration Management Measures’ and ’Medical Device Priority Examination and Approval Procedures’ and other policies, involving product development, registration approval, production and application and other processes, and provide support for the development of domestic medical devices at the policy level.”
The local emphasis could lead orthopedics’ largest multinational players to acquire or collaborate with more Chinese companies, deals like Johnson & Johnson’s partnerships with TINAVI and Changmugu Medical. These agreements could be further spurred by the fact that Chinese-headquartered companies have increased their device quality and technology savviness in recent years, Chen said.
“With the improvement of the quality level of domestic orthopedic implants, coupled with the price more in line with the requirements of the medical insurance reimbursement limit policy, the sales revenue of domestic orthopedic implants has grown rapidly in recent years, and the market share has increased significantly,” Chen said. “Compared with similar imported products, some domestic orthopedic implants have the same key technical indicators and performance, stable and reliable quality, and can replace most imported products in clinical practice.”
