Release date: 2015-07-21
First, let's see how "profiteering" is defined. If it is the difference between the manufacturing cost price of the medical device and the terminal price, it must be huge. For a few dollars, the terminal price may reach hundreds or even thousands of dollars, which is undoubtedly a huge profit. However, what is the truth? Let's take a closer look at what goes through the initial generation of the medical device to its final use.
1. Research and development:
The cost of research and development is very high. Many medical device companies spend 10-15% of the company's total revenue. Because medical devices are updated quickly, they often produce a new generation of products in 2-3 years. All scientists, engineers, technicians... all kinds of new materials, instruments, devices... These costs are R&D expenses and need to be covered in the sale of later products.
In addition, as long as it is R&D, there is a certain failure rate. The cost of these failed R&D products is also included in the price of the successful product and is included in the cost. The research and development of medical devices is relatively stable. The failure rate of drug research and development is very high. More than 100 drugs are often studied. Only one can be successfully listed. The successful drug not only has to bear its own research and development costs. It also bears the cost of research and development of the 99 drugs that failed.
The cost of developing a new drug in the past few years was $1 billion + 10 years. It is said that this standard is now rising to $2.5 billion. The reason why the cost of drug research and development is used here is because the difference between the instruments is too large, one needle is also counted as a device, and one MRI is also a device. The research and development costs of the two are naturally different; while the drug research and development is relatively stable, the difference is not too big. .
2. Clinical trials:
Clinical trials are actually part of research and development, and they are listed separately because the cost of this part is huge. A large part of medical devices need to be clinically tested before they can be launched, so this part of the cost is considerable.
The cost of clinical trials includes: management fees for hospitals/bases/ethics, research fees for doctors, free products, cost, customs clearance, transportation and custodial fees, trial design, database establishment and verification fees, data management, statistics Analysis, medical writing, safety monitoring ...
Some fees are not available for each trial, including: transportation to patients, inspection fees, random center (IVRS/IWRS), specimen transport and export, central laboratory, central reading, central ECG, electronic case report system , laptop and wireless internet access ...
For clinical trials, there are doctors, hospital administrators, clinical executives, data managers, statisticians, scientists, safety monitors... The wages of these people are also the cost of clinical trials.
The clinical trial obtains the cost of a patient's data. The other is not counted. It is only the research fee for the hospital. If it is calculated according to the high-risk type III equipment, it may cost as much as 20,000-30,000 yuan (in China. If it is The United States, more expensive), if it is 400 patients, and so on. Coupled with all other expenses, it is not uncommon for a clinical trial to cost $5 million.
It should be noted that a new device is not listed as a clinical trial. It is often how many trials you need to be listed in several countries, unless some small countries can exempt them. In addition, a trial often Only one indication can be applied. If the device has multiple indications, then each indication should be tested. So the same new product, the global 7-8 test is doing at the same time, is also a common situation.
Based on the above figures, it is not difficult to figure out how much money a medical device has spent on research and development and clinical trials before it can be sold.
3. Registration
In the past, some countries did not charge for registration. For example, China is now charging fees, and the fees are very high. The US FDA is always charging. These registration fees range from a few hundred thousand to several million and are collected by the government regulatory authorities, but it is clearly the patient's future commitment.
4, production
Production is familiar to everyone, production lines, raw materials, procurement, workers... these are costs. On the other hand, as a GMP production workshop, certification and maintenance operations are equally expensive, which is also a considerable expense.
5, transportation
It mainly includes the cost of customs clearance and logistics. Customs clearance fees are collected by the customs, and a certain percentage is charged according to the price of the products. The tariffs of our country are quite high. The more expensive the product is sold, the higher the tariff.
Some medical devices have special requirements for transportation and temperature. The products can only be stored at low temperature or constant temperature, and some even require cold chain transportation. The high cost of transportation is often beyond imagination.
6, prices and medical insurance
This is not to say much, a new product to enter the price system and medical insurance system, no half a year to a year, it is very difficult to do. Medical insurance is not yet available for every product.
7. Bidding and admission
In the past, it was only necessary to pass the hospital equipment section. Now it is a layer of bidding. The provinces have to bid, the cities are re-tendered, and the hospitals have their own tenders... Each level is accompanied by huge fees, which are naturally reflected in the product price.
The dealer has to mention this layer. Medical devices are almost always sold through distributors in China. Why is this situation caused? Everyone in the industry knows everything, so I won't go into details here. Often there are secondary agents under the first-level agents, and third-level agents... Each floor must be increased in price, because the product price difference should support the agent and the entire agency. The more links, the more natural fare increases.
This part of the doctor is more helpless. Chinese doctors’ income is too low and they have to rely on medicines and equipment to make up for it. This is not a happy thing. Especially the surgeon, just in his 30s, has just started to look a little. After the age of 50, his eyes have also been spent, and his hands have begun to shake. The time for really doing surgery is more than 20 years. So the occupational life of a surgeon is really short, and now the income of doctors can't make up for their investment. The price of the device also includes the portion that compensates for the loss of the surgeon's income.
8, use
Finally, the patient can use the product. At this time, the price that the patient needs to pay includes all the previous expenses, and it is necessary to support a large number of people from the government to the factory to the hospital to the agent to the doctor.
If you look at the cost price and the terminal price, the medical device is indeed a huge profit; but the profiteering is divided by many organizations. If you look at the profit of each party, you may not be able to make huge profits. It is only the patient who finally pays the bill.
In fact, in other industries, R&D, logistics, bidding, distribution (if using distributors), etc., the cost may be similar to medical devices; the only difference is that the device bears huge clinical trial costs, registration fees and make up for doctors’ income. The cost, which is rare in other industries.
Source: Healer
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