Israel at a glance

CHINA’S HEALTHCARE INDUSTRY

Israel at a glance

CHINA’S HEALTHCARE INDUSTRY

Israel at a glance

15,698 registered manufacturers

181,809 distributors

135,762 products registered CFDA database

20% of the products undergo registration renewal

0

5,000

10,000

15,000

20,000

TOP 10 Provinces possess Domestic Medical Device Registration Certificate

JiangsuShanghai

Zhejiang

Guangdong

BeijingTianjin

ShandongHebei

Hubei

Henan

CHINA’S MEDICAL DEVICES SECTOR

28 33 40 48 57 70 86105

147

210237

275

354

413

472

567

0

100

200

300

400

500

600

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Sale Revenue Medical Device from 2001 to 2016 in China (Unit: 100 Million US Dollars)

Israel at a glance

CFDA – China Food and Drug Administration

CNCA -Certification & Accreditation

Administration

AQSIQ - General Administration of

Quality Supervision, Inspection and

Quarantine

SAIC - The State Administration Office for Industry and Commerce

SIPO - The State Intellectual Property Office

NHFPC - National Health & Family Planning

Commission

CMA – China Medical Association

DRC – Development & Reform Commission

KEY PLAYERS

Israel at a glance

HOSPITALS IN CHINA

Public Private

Hospitals 13314 13000 51%-49%

Inpatients 123 Mil 16 Mil 90% - 10%

Outpatients 2.46 Bil 0.26 Bil 89%-11%

Israel at a glance

Imported Medical Device Domestic Medical Device

License Holder Outside China In China

Actual

Manufacturing SiteOutside China

Except for innovative products, the license

holder must also perform the key

manufacturing processes, since CFDA does

not allow subcontract manufacturing for

domestic manufacturer.

Regulatory CFDA

Level

Class I: Central CFDA

Class II: Central CFDA

Class III: Central CFDA

Class I: City-level CFDA

Class II: Province-level CFDA

Class III: Central CFDA

Qualification needed

to sell the product in

China (Class II/III)

1. Registration and Quality management

system (QMS) certification in country of

origin

2. Have a China agent

3. Imported Product Registration

1.QMS Audit in compliance of Chinese good

manufacturing practice (GMP)

2. Domestic Product registration

3. Manufacturer License

Pros1. Good brand recognition

2. Higher margin as an imported device

1. Future reimbursement benefit

2. Lower manufacturing Cost

Con1. Stricter CFDA regulation

2. Higher cost for market entry

1. Higher in-country investment

2. Intercontinental management

IMPORTS VS DOMESTIC

Israel at a glance

26% of registered products are

imported medical devices

REGISTRATION OF MEDICAL DEVICES

Israel at a glance

THE NEW MEDICAL DEVICES CLASSIFICATION CATALOGUE

Revised

classification

criteria

Reduced the risk

level of 40

categories

Added more than

5,000 product

name examples

Adding clinical

indications and

product

description

Implemented: August 2018

• Before: Approved CFDA certificates will not be affected

• After: Extension process will be according to the new catalogue

Israel at a glance

HEALTH INSURANCE IN CHINA

Basic Medical Insurance

Maternity Insurance

Critical Illnesses

Israel at a glance

Certificate release1. 5 months

CFDA Second Review3 months

Reply to CFDA remarksOne year time and one chance only

CFDA First ReviewClass II at province-level, Class III at Central-level

Dossier submission and administration review5 working days

Clinical Evaluation Report / Clinical Trial in China

Registration test in a CFDA-qualified lab2-3 months excluding biocompatibility test

QMS Audit

Setup a WFOE or JV & OMS Establishment

Manufacturer License

Cheaper Fees

Local GMP

Cheaper Fees

Chinese entity

Cheaper manufacturing

DOMESTIC MANUFACTURING

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Innovative products Up to 50% shorter46 applied only 4

imported

Intellectual property

Pioneer in China

Premarket research and prototype

FAST TRACK

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Direct investment Government tender

DIRECT & GOVERNMENT PURCHASING

Israel at a glance

Device Reimbursement

Distribution

Retail

PRE MARKET ISSUES

Israel at a glance

Cancer

DISEASE TRENDS

Israel at a glance

• In 2015 - 75.4 years

• In 2020 - 76.5 years (est)

Average life expectancy

•On January 1st 2016 the one child policy was formally abolished, allowing all couples to have 2 childrenOne child policy

2000 2050

DEMOGRAPHIC TRENDS

Israel at a glance

THE CHINESE 5 YEARS PLAN

Series of social and economic development initiatives. In 2016 the government was released the 13th plan for the years 2016-2020.

Innovation

Balancing

Greening

Opening-up

Healthcare system

Israel at a glance

THE CHINESE 5 YEARS PLAN

Chronic diseases Hygiene Education for health

Elders careSport facilities Women’s health

Israel at a glance

Business Model under the “Two Vote System” for

Foreign Companies

Manufacturer

Agent

Distributor

Product licensing , Entrust

Dispatching Public

HospitalSale, Dispatching

Service

Provider

the First

Invoice

the Second

Invoice

the First

Invoice

①

②

Israel at a glance

THE ISRAELI HEALTHCARE INITIATIVE

Israeli Know-How

Israeli Hospitals

Israeli Medical Experts

Israeli Technologies

Promoting selected programs which combine knowledge and devices.

Innovative IT Platform in Digital Health

Mobile Medical Training Simulations

Tele-Rehab Centers

Digital Health National Program

Emergency Properness

Israel at a glance

CHINESE INVESTORS

Technology transfer

Money Transfer

Early Stage vs Mature

Companies

Manufacturers

Traded companies

Distributors

University Funds

Development base Economy

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Fast trackDirect &

government purchasing

Pre-market issues

Disease trendsDemographic

trendsThe 5 years

plan

The Israeli Healthcare Initiative

Domestic manufacturing

What investors look for?