Impact of China’s volume-based procurement on the Asia Pacific dental implant market

Sinead Finnegan

Dr Kamran Zamanian

Mon. 18. March 2024

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BEIJING, China: The Chinese government introduced a volume-based procurement (VBP) policy in November 2018 in the pharmaceutical industry, and this was later expanded in 2019 to include medical devices sold in China. The primary object of VBP is to reduce the average selling price (ASP) of items in order to make drugs and medical devices more accessible for the entire Chinese population; however, what impact is VBP expected to have on the wider dental implant market in the Asia Pacific region between 2024 and 2030?

The use of dental implants is experiencing rapid expansion worldwide, which is attributable to their clinical success rate and the increasing awareness of their benefit among both patients and clinicians.¹ The Asia Pacific dental implant market was valued at over US$840 million (€757 million) in 2023. Prior to the onset of the SARS-CoV-2 pandemic, the market had been on a consistent growth trajectory, and it has now rebounded from the decline in unit sales caused by the pandemic in 2019 and 2020. It is anticipated that the market will experience significant expansion between 2023 and 2030, growing at a compound annual growth rate of 13.8%. This growth is set to be driven by the region’s ageing population. In 2023, more than 13% of inhabitants in the region were aged 65 years or older, and this demographic is expected to more than double in size by 2050. 

Trends in the Asia Pacific dental implant industry

A prevailing and persistent trend in the Asia Pacific market concerning dental implants and final abutments is the emergence of value implants and final abutments, which are increasingly viewed as a viable and cost-effective alternative to their premium counterparts. Notably, products in the value and discount segments have substantially benefited from the diffusion of technologies and manufacturing techniques that were historically exclusive to premium segment dental products. As a result, the value and discount segment offerings are progressively perceived as viable substitutes for premium products. 

It is important to note that this trend is not expected to apply to China, where VBP is set to result in an expansion of market share for premium implants. The strategic VBP initiative aims to optimise procurement practices and achieve cost-efficiencies by capitalising on the advantages associated with procuring goods in substantial quantities. Consequently, premium implant manufacturers in China have been compelled to significantly reduce their prices in order to outbid competing firms for orders initiated by the Chinese government. 

Volume-based procurement in China

VBP aims to enhance procurement practices and attain cost-effectiveness by leveraging the advantages of bulk buying. This has had a significant impact on dental implant manufacturers and their pricing as they seek to remain competitive in the bidding for bulk orders. As a result, there has been a substantial reduction in the ASP of implants and final abutments. 

As premium implant manufacturers are forced to decrease their ASP in order to stay competitive in China, it is expected that they will gain market share on value and discount implants over the forecast period. VBP has had a downward effect on the ASP in both the value and discount segments, though not at the same level seen in the premium segment. 

Comparison of dental implant market growth in China versus the rest of Asia Pacific according to units sold between 2020 and 2030. (Image: iData Research).

Anticipated surge in dental implant procedures in China

The introduction of VBP in China has already led to a massive increase in procedural volume for dental implants. The treatment became more affordable for patients in China who would otherwise not have undergone the procedure. Straumann Group, a leading manufacturer of premium dental implants, noted a 40%–45% decrease in the ASP per implant, despite unit sales increasing by around 25%.² 

A comparative analysis of dental implant unit sales in China versus the rest of the Asia Pacific between 2020 and 2030 (shown in the figure) demonstrated that the overall market saw substantial growth in 2021, signalling a recovery in procedural volume after the pandemic; however, in 2022, China’s growth rate diverged significantly from that of the rest of Asia Pacific and has continued to follow a notably higher trajectory. This shift is attributed to the impact of VBP, which has expanded access to dental implant procedures for a broader population. The proportion of units sold in China relative to the Asia Pacific region is expected to undergo a significant transformation throughout the forecast period. In 2020, over 30% of dental implants sold in Asia Pacific were sold in China, and this figure is anticipated to rise dramatically, accounting for approximately 60% of dental implant sales in Asia Pacific by 2030.

Will volume gain recoup the fall in unit price?

Changes are expected over the forecast period in the competitive landscape of dental implant manufacturers in China and the wider Asia Pacific. With the increased competition for tenders in China, companies will be forced to decide whether to exit the Chinese market or to join the bidding for bulk orders. This has already led to decreased revenue margins in China for manufacturers. However, over the forecast period, the market is expected to recover from the effects of VBP, and profits are expected to increase once again. The increased volume of dental implant procedures will slowly offset the decline in the ASP of dental implants. 

Closing thoughts

The Asia Pacific dental implant market is set to experience significant growth between 2024 and 2030; however, this growth will not come without growing pains. Manufacturers of dental implants and biomaterials are experiencing increasing pressure in China owing to VBP, and this is reducing the overall ASPs of dental implants, final abutments and bone substitute material. New dental implant companies entering the market must face bidding wars against larger multinational companies, which may prove difficult to overcome. 

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