Reporter | Chen Yangyuan Yiming

Editor | Xie Xin

In the past two years, with the dual promotion of the country and the local government, the three major orthopedic consumables of joints, trauma, and spine have been included in the scope of centralized procurement. Behind the big price reduction, orthopedics, which was once considered a "hot potato", seems to have lost its glory.

But on the contrary, in June 2020, Tianzhihang, the "first domestic orthopedic surgical robot stock", was listed on the Science and Technology Innovation Board. Due to the enthusiasm, its market value was close to 60 billion yuan. As for the public, cool surgical robots always catch the public's attention at every major exhibition.

Looking at the entire field of surgical robots, according to statistics, in 2021, there were 33 domestic surgical robot financings, and 20 of them had a single financing amount of more than 100 million yuan. In November of this year, MicroPort Robots, which was spun off from MicroPort Medical Group, was listed on the Hong Kong Stock Exchange, setting a new IPO market value in the medical device industry that year. Since this year, Jingfeng Medical and Strategies have also submitted applications.

At the same time, pioneers have successively obtained the stepping stone to cash out. In the first half of this year alone, 9 surgical robots were approved by the National Medical Products Administration (NMPA). But what are their commercial prospects? Can these high-end medical equipment, which often cost tens of millions and cost tens of thousands of yuan to start up, be favored by hospitals and doctors, and who will pay for them?

Doctors use it less frequently

According to clinical application fields, surgical robots can be divided into endoscopic, orthopedic, pan-vascular, transnatural orifice, and percutaneous puncture robots. The first two types of products are the most mature and occupy about 80% of the market share.

Among them, the laparoscopic surgical robot is represented by the da Vinci robot, which was launched in the United States in 2000 and entered the Chinese market in 2008. Two domestic robots, Weigao Miaoshou-S and MicroPort Tomai, were approved in October 2021 and January this year respectively.

In the field of orthopedics, imported brands such as Medtronic, Zimmer Biomet, and Stryker are also taking the lead. Among domestic products, Tianzhihang’s third-generation products Dimensity and Dimensity 2.0 were approved in 2016 and 2021 respectively. In the first half of this year, Hehua Joint Robot, Bone Shengyuanhua Surgical Robot, Jianjia Robot, and Minimally Invasive Honghu also obtained certificates.

Theoretically, compared with traditional open surgery, surgical robots have the advantages of flexible and precise operation, high-definition field of view, short operation time, and less blood loss. They can help patients recover quickly after surgery, reduce surgical complications, and reduce doctor infection. risk and fatigue levels, and contributes to increased safety and homogenization of the procedure.

However, although products have been launched for a long time, the installed capacity and surgical penetration rate of surgical robots in China are still in their infancy.

In terms of installed capacity, the number of domestic laparoscopic surgical robots in 2020 is 189, which is only 5% of that in the United States. A research report from the Health Industry Research Institute pointed out that the global installed base of orthopedic surgical robots has exceeded 1,000 units, and the domestic installed base has exceeded 140 units; in terms of surgical volume, Tianzhihang reported in mid-2022 that it has completed nearly 30,000 orthopedic robot surgeries. Occupying the main domestic market share. But in fact, approximately 5 million orthopedic surgeries are performed in China every year.

Behind the low coverage and low usage, surgical robots “still have a lot of room for optimization in meeting clinical needs” is a common feeling among many doctors.

Xia Qun is the director of orthopedics at Tianjin First Central Hospital. According to his introduction to Jiemian News, he completes about 200 surgeries every month, and orthopedic robots are only involved in 3-5 of them. In fact, he only has Orthopedic robots are used only when the manual operation is not confident or not standardized enough.

"In many fields, orthopedic robots can indeed ensure accuracy, such as implanting pedicle screws in the spine, or performing surgeries in places such as hip muscles and soft tissues that are difficult to locate. But in small fields such as the cervical spine, orthopedic robots can also There is no absolute certainty, but manual operation allows doctors to feel the accuracy through the patient's gasping," he said.

In fact, for Xia Qun, who has 30 years of clinical experience, a surgery that can be completed in 30 minutes with bare hands may take an hour and a half to complete with the participation of an orthopedic robot.

Ren Xiuzhi, director of the Third Department of Orthopedics at Tianjin Wuqing District People's Hospital, also said that although robots have the advantages of increasing operating accuracy and reducing radiation damage to doctors in some special surgeries of spine surgery, their role in general orthopedic surgeries is Not too big. At present, the introduction of orthopedic robots in hospitals is more from the perspective of scientific research and to occupy technological high points, but the actual usage rate is not high.

Hospitals are struggling to recoup costs due to high prices

On the other hand, high introduction fees, start-up fees and environmental constraints have also deterred many hospitals from surgical robots.

Ren Xiuzhi said that taking orthopedics as an example, surgical robots are not only expensive, but also require the reconstruction of the operating room and management team according to the equipment. After being purchased at a high price, a dedicated team is required to operate it, which is a considerable burden for small hospitals. Xia Qun also believes that grassroots hospitals and even many large hospitals may not have the financial resources to purchase orthopedic robots. Of course, grassroots hospitals usually do not undertake ultra-difficult surgeries.

In terms of cost, Xia Qun and Tianzhihang President Ma Min both mentioned to Jiemian News reporters that the current price of introducing orthopedic robots is about 10 million yuan. Since orthopedic robots have not been used in China for a long time, there is no clear cost for start-up costs. Ma Min estimates that based on a large number of foreign surgical cases, the startup cost of orthopedic robots accounts for about 30% of the total cost of surgery. Based on this estimate, the cost of using orthopedic robots is about 1.3 times the previous cost.

However, Chen Ke, a person from a domestic surgical robot company, believes that the high price is not an obstacle to the use of surgical robots in hospitals. The real difficulty lies in how hospitals charge and recover costs.

According to Chen Ke and Ma Min, hospitals often adopt the cost method when considering purchasing and using surgical robots. That is to determine how long the life cycle of a medical device is and how many operations it can bear, and then allocate the purchase cost evenly to each operation to confirm the use cost and profit. But the current problem is that the charging standards for surgical robots are not clear.

At present, the start-up fee for orthopedic robots in Xia Qun's hospital is about 10,000 yuan per time. In other regions, the start-up fee is different according to the policies of each province. Some hospitals do not charge a start-up fee. Chen Ke believes that if the charging standards are clear, even if the equipment is relatively expensive, as the number of users increases, the cost of purchasing robots can be diluted and the payback time can be shortened. "But now the policy is unclear, how much surgery and consumables will be charged, and whether the hospital will lose money are all unknown, so many hospitals are waiting and watching."

Tianzhihang's sales data also confirms the hospital's hesitation to a certain extent. From 2017 to 2019, with the support of the national policy of establishing an orthopedic surgical robot application center, its orthopedic robot sales totaled 16 units, 20 units, and 41 units respectively, with sales revenue of 55.4222 million yuan, 98.7242 million yuan, and 214 million yuan respectively. After the expiration of this policy, Tianzhihang sold 30 surgical robots in 2020, with revenue of 112 million yuan. The industry also pointed out that its surgical robots sometimes enter hospitals but are not used.

At present, charging standards for surgical robots have begun to be gradually advanced at the national and local levels.

In late September this year, the "Notice on Standardizing the Use and Charges of Surgical Robot-Assisted Operating Systems" issued by the Hunan Provincial Medical Insurance Bureau caused the stock price of MicroPort Robots to plunge, falling by more than 13% that day.

This is not the first time relevant departments have mentioned surgical robot pricing standards. As early as early March this year, a "Guidelines on Improving Prices and Related Policies for Orthopedic "Surgical Robots" and "3D Printing" and Other Auxiliary Operations (Draft for Comments)" was circulated in the industry and was signed as "National Medical Security Administration Pharmaceutical Pricing and Tendering and Procurement Division”. The consultation draft stipulates the charging standards for robotic surgery:

If the surgical robot only has and plays the function of surgical planning, the value of the auxiliary operation will be reflected in the surgical price, and no separate charges will be established; if the surgical robot only has and plays the function of navigation and positioning, the maximum surcharge rate for each operation will not exceed 40%, and the price of the core surgery If the cost per case exceeds 5,000 yuan, the additional fee will be capped at 2,000 yuan per time; if the surgical robot completes or participates in part of the surgical operation under the control of medical staff, the additional fee will not exceed 80%; if the surgical robot participates in completing all surgical operations and performs remote operations For surgical operations, the increase ratio can be appropriately relaxed compared to the above.

At the end of March, the National Medical Insurance Administration and the National Health Commission issued a document clarifying that public medical institutions that use "surgical robots" and other intelligent systems to assist surgical operations will be charged a certain percentage based on the price of the "artificial joint replacement" project, not separately. Establish fee-based items.

From this point of view, Hunan Province’s notice continues the above-mentioned method of “no separate items, graded charges, and capped prices”. Among them, the increase rate for the last category of cases is 300%. In addition, the additional fees are temporarily not included in the payment scope of the medical insurance fund.

In this regard, Wang Haiyin, director of the Health Technology Assessment Research Department of the Shanghai Hygiene and Health Development Research Center, analyzed to Jiemian News that at present, it seems relatively clear that surgical robots will not be set as a separate charging standard for new projects. This may be contrary to the expectations of investors and robot manufacturers, but it is actually a balance between payment and innovation made by medical insurance.

Wang Haiyin explained that the reason why it is difficult to price surgical robots alone or to set a high price is that surgical robots currently have no obvious evidence of incremental clinical benefits or significant changes in surgical methods and paths. For procedural "micro-innovations" such as navigation and artificial intelligence, medical insurance recognizes them, but the charges must have a certain relationship with the current price system, so a certain increase rate will be given.

But obviously, after losing the strongest payer of medical insurance, the use and sales of surgical robots will be much more difficult.

Open or closed loop?The battle between models and the future

But in fact, the dilemma of surgical robots is by no means simply "money".

According to national regulations, most drugs are required to go through phase III clinical trials before they are launched on the market to prove their benefits on clinical indicators such as patient survival and median survival. In contrast, the requirements for medical equipment consumables are relatively low. Wang Haiyin introduced that most of the domestic robots are non-inferiority trials with relatively small sample sizes. They can achieve certain performance targets during approval and are not inferior to existing surgical methods. There are few clinically relevant data.

As a result, surgical robot R&D companies seem to be trapped in an endless loop. That is, if the value of surgical robots is to be recognized by hospitals and medical insurance, they must accumulate and submit clinical evidence. However, the inability to charge has resulted in a low usage rate of surgical robots in hospitals, seriously affecting clinical data collection.

Wang Haiyin believes that at this point, in addition to corporate investment, innovative medical insurance payments and hospital management access agreements may help surgical robots "break the circle" to a certain extent. For example, the medical insurance pilot is based on payment based on usage results. On the one hand, it can allow new technologies to be used, and on the other hand, it can link effects and payment to share risks.

In terms of domestic products, Tianzhihang has begun to explore co-building orthopedic surgery robot minimally invasive surgery centers with medical institutions in 2020. On the one hand, it will reduce the hospital's financial payment pressure, and on the other hand, it will help the company promote product iteration and market support.

In addition to optimizing technology and accumulating evidence, according to Gu Yushao, Medtronic's global senior vice president and president of Greater China, how to apply surgical robots will be a hot issue in the future. Is it better to have a closed-loop or open ecosystem? Closed-loop equipment and open consumables. Or open to both, the jury is still out.

The so-called closed loop or open loop refers to the consumable selection mode of each surgical robot during use and consumption. At present, surgical robots are usually divided into three parts: computer system (software and hardware such as console), high-value consumable robotic arm and accessories, and imaging system. The so-called closed-loop model means that the surgical robot system and various instruments and consumables used in surgery come from the same company. In contrast, the open mode means that the surgical robot system can be used with instruments from other manufacturers.

Among them, the former is represented by the Da Vinci robot. Because its robotic arm will be forced to lock after ten uses, it needs to be replaced. Therefore, with the growth of installed capacity, the revenue share of intuitive surgical consumables (instruments and accessories) continues to rise, increasing from 29.8% in 2005 to 56.3% in 2020, bringing a steady stream of cash flow to the company.

Foreign-funded enterprises Stryker and Smith & Nephew have also adopted the closed-loop model, and their orthopedic robots use their own prostheses. Medtronic’s Hugo general surgery robot, Mazor spine robot and Shenwai robot choose an open and compatible model.

This may be related to the different product layouts of each company and the procedures applicable to surgical robots.

As one of the world's largest medical device manufacturers, Medtronic has a wealth of surgical products that can be directly adapted to the Hugo robot. For medical devices not involved, such as endoscopes, Medtronic also cooperates with German endoscopic giant Karl Storz. Obviously, this naturally gives it more options.

In the field of orthopedics, an industry insider working for a foreign-funded surgical robot company told Jiemian News that compared with the screws used in spine robots, the structure of joint prostheses used in joint robots is more complex, and the robot parameters need to be adjusted according to its design, which involves As for the patent of the prosthetic manufacturer, "so I can't open it up even if I want to." Zhou Yijing, Vice President of Strategic Market and Business Development of Stryker China, also said that the simultaneous development of orthopedic robots and replacement joint prostheses can make surgery more intelligent, so Stryker has adopted a closed system design route.

Chen Ke mentioned that domestic robot companies are in a relatively unclear state in obtaining authorization from prosthetic manufacturers. Because of centralized procurement, prosthetic manufacturers are also having a hard time. "Now that someone is willing to use your prosthesis, of course you turn a blind eye. This is why no manufacturer comes out to talk about authorization issues. If the prosthesis manufacturer makes its own robot, it will be difficult to say." Chen Ke said.

Referring to the open/closed-loop model debate between in vitro diagnostic equipment and reagents, this may also become a focus of interest competition for many parties in the future regarding surgical robots.

In Wang Haiyin's view, whether it is clinical evaluation or manufacturer's profit, the important thing is that "surgical robots must be used first, otherwise it will stop here."

(Chen Ke is a pseudonym in the article)