Next month, 'IVF' medical insurance reimbursement landed! Hundreds of billions of markets support the falling fertility rate!

On November 25, according to Zhejiang News Client, Hangzhou medical insurance "West Lake Yilian Insurance" included some assisted reproduction projects into the guarantee responsibility, and insured citizens who implemented assisted reproduction in 2023 will be reimbursed up to 3,000 yuan. This is the first medical insurance policy in China to include assisted reproduction. After assisted reproduction is included in medical insurance, it can reduce the burden on the public and benefit more patients. With the increasingly serious population problem, the national policy tilt in the field of assisted reproduction is obvious, and the industry is developing rapidly.

Assisted reproduction solves some of the causes of low fertility in youth

With the improvement of women's education level and ability, coupled with the increasing pressure of social work and life, the phenomenon of late marriage and childbearing in China has become increasingly prominent. The phenomenon of low fertility is the result of the intertwining and isomorphism of many factors. Among them, the strengthening of self-awareness is the internal reason for not wanting to give birth, the dilution of family concept is the subjective reason for delaying birth, the increase in survival pressure is the practical reason for not daring to give birth, and the physical condition restriction is the objective reason why you cannot give birth. Among the many reasons, assisted reproduction can partially solve the problem of not being able to give birth.

It is an indisputable fact that male fertility has fallen off a cliff. Studies have shown that between 1973 and 2018, the average sperm concentration of men worldwide decreased from 101 million to 49 million per milliliter, a decrease of 51.6%; Women's fertility is also deteriorating, and the prevalence of infertility in China has risen from 1%-2% in the 70s to about 10%-15% in the 90s, and has reached 18% in 2020, with the infertility population reaching 50.5 million; In addition, the age of first marriage of Chinese women has increased from 21.4 in 1990 to 26.5 years old today, and the average age of first childbearing has increased from 23.4 in 1990 to 27.3 years old in 2017. Poor living habits and heavy stress seriously affect the health status of residents, and a large number of residents have been in a sub-health state for a long time, which has led to an increase in the number of infertility patients; In addition, China is industrializing and urbanizing, and environmental pollution problems may also lead to reproductive diseases. About 52% of infertile couples in the country solve fertility problems through assisted reproductive technology.

The most widely used assisted reproductive technology is artificial insemination (AI) and IVF technology, artificial insemination sends sperm to the female reproductive tract through non-sexual intercourse to make a woman pregnant, and IVF technology fertilizes sperm and eggs in vitro through artificial methods, and then transfers them to the mother's uterus for development and delivery after the embryo matures. In terms of combined pregnancy and live birth rates, IVF (53.45%, 43.55%) is higher than AI (26.46%, 22.89%). In addition, the incidence of birth defects in China (5.6%) remains high and has become a serious public health problem in China. The third-generation pre-embryo transfer genetic diagnosis technology of IVF is an important means to achieve the first-level prevention and control of birth defects, which is of great clinical significance.

The population has entered the "zero growth" range, and policies support assisted reproduction

Since the founding of New China in 1949, in view of the dynamically changing national conditions and population development, the birth policy implemented in China has mainly undergone four stages of change and development: the stage of encouraging birth from 1949 to 1953, the stage of relaxed family planning from 1954 to 1977, the stage of strict family planning from 1978 to 2001, and the stage of relaxing family planning from 2002 to the present. The population of the first phase provided sufficient labor support for the productivity construction at that time; In the second and third stages, in order to achieve sustainable development of socialist modernization, family planning was implemented, and the population growth rate slowed down; After the 21st century, the national population growth rate continued to slow down, and the natural population growth rate in 2021 was only 0.34‰.

The population decline is becoming increasingly serious, and the country's policy tilt in the field of assisted reproduction is obvious. In 2021, 12 provinces and cities, including Shanghai, Hebei, Henan, Tianjin, Guizhou, Anhui, Shaanxi and Shanxi, issued the "Human Assisted Reproductive Technology Application Plan (2021-2025)" (referred to as the "Plan"). All provinces and cities have indicated in the "Plan" that they will increase the number of human assisted reproductive service institutions. Among them, Sichuan Province has the largest number of new institutions planned, reaching 20; Secondly, Anhui Province, Shaanxi Province, Jiangsu Province, etc. are planning to add no more than 10.

The "test-tube baby" track with high industry barriers and low penetration rate is poised to take off

The assisted reproduction industry chain can be divided into: upstream (medical devices, testing reagents and biomedicine), midstream ("Internet +" assisted reproduction providing pan-health menstrual management and vertical infertility services), and downstream (domestic/overseas assisted reproductive medical institutions and derivative service institutions).

In the middle and lower streams, the assisted reproduction industry has high industry barriers, the difficulty of market access is high, and it is difficult to get admission tickets.

01The number of assisted reproduction institutions is strictly limited

In 2015, the Health Commission promulgated the "Guiding Principles for the Planning of Human Assisted Reproductive Technology (2015 Edition)", which clearly stipulates the principle of "1 institution per 3 million population", which is the main reference basis for provinces to formulate reproductive center plans. In 2021, the Health Commission issued the "Guidelines for Planning the Application of Human Assisted Reproductive Technology (2021 Edition)", which stipulates the principle of "1 institution per 2.3-3 million population" from 2021 to 2025.

02 License is difficult to apply for, and qualification requirements are high

The Guidelines for Planning the Application of Human Assisted Reproductive Technology (2021 Edition) clearly point out that newly established human assisted reproductive technology should be planned for general hospitals, maternal and child health hospitals or maternity hospitals with high levels of obstetrics and gynecology and other related specialties and comprehensive medical treatment capabilities in the region. Under the same conditions, priority is given to medical institutions that provide health care services throughout childbirth, have comprehensive diagnosis and treatment methods for infertility, and apply traditional medicine to treat infertility.

03Licenses need to be applied for sequentially, and the process and time period are long

Domestic assisted reproduction institutions must obtain AIH, AID, IVF-ET, ICSI and PGD/PGS five types of assisted reproduction licenses, there is a trial operation time of 1 year after the establishment of the institution, the hospital applying for IVF-ET license needs to obtain an AIH license and officially operate for 1 year, and it takes about 4-5 years to obtain an IVF-ET/ICSI license. Hospitals applying for PGD/PGS licenses need to hold an IVF-ET/ICSI license and operate normally for 4-5 years, i.e. it takes about 8-10 years to obtain a PGD/PGS license.

04Regular inspections are required

After the establishment of the institution, the number of IVF cycles and pregnancy rate must meet certain standards, and the approval certificate of human assisted reproductive technology is verified every 2 years, and the verification is handled by the original approval authority. If the verification is qualified, human assisted reproductive technology can continue to be carried out; If the verification fails, the approval certificate shall be withdrawn.

According to the principle of "1 institution per 2.3 million to 3 million population", 1.4 billion people correspond to 467-609 institutions, but there are only 78 PGS/PGS license institutions, and there is still some room for development. Therefore, companies that can provide comprehensive three-generation test tube solutions for assisted reproduction institutions have strong market competitiveness.

The upstream industry does not directly serve patients, and mainly includes the production and sales of medical devices and drugs related to assisted reproduction. Medical devices and consumables for assisted reproduction include sperm egg extraction and separation equipment, culture media, laser microscopy imaging systems (for observing embryos and implanting sperm), and embryo incubators (represented by Vitrolife2). The drugs involved mainly include ovulation induction, ovulation induction and luteal support, etc., mostly hormonal drugs (representative companies are Merck Serono).

In 2020, the number of assisted reproductive service cycles in China reached 1.303 million cases, the number of IVF cycles was 952,000 cases, and the number of artificial insemination cycles was 351,000 cases. From the perspective of the demand scale of the assisted reproduction market, IVF accounts for 97%, with a scale of 421.2 billion yuan, becoming the leading market for assisted reproduction. However, the overall penetration rate of third-generation IVF in China is low, 3.8% in 2019, lower than 35.2% in the United States. Among them, PGT-A as the first step in screening, accounted for 56% of the market. It is predicted that in 2023, the total market size of PGT reagents will be 8.51 billion yuan.

Behind the growing number of ART institutions in China is the surging demand for PGT testing. With the release of the three-child birth policy and the increase of state support for the application of assisted reproductive technology, China's PGT service market is also expanding rapidly. At present, there are fewer entrants in the field of third-generation test tubes, and the market concentration will be higher in the future, and individual enterprises can enjoy a higher market share. In addition, under the wave of domestic substitution, many domestic manufacturers actively develop innovative equipment, which has gradually attracted market attention. For example, the PGT-A kit independently innovated and developed by Becom Medical, the first IVD listed company in the field of assisted reproduction, is the first certified kit in China, and its clinical data shows that it can increase the average pregnancy rate of IVF to 72% and the average abortion rate to 6.9%, which has a strong competitive advantage. In terms of instruments and equipment for third-generation IVF upstream PGT testing (i.e. preimplantation genetic testing/genetic testing), BGI Intelligent Manufacturing has successively launched MGISEQ-200, MGISEQ-2000 and DNBSEQ-T7 gene sequencers with completely independent intellectual property rights and international advanced level, gradually benefiting the domestic market and bidding farewell to the monopoly of imported brands. The liquid nitrogen storage system BCT38C independently developed by Become Medical is the first intelligent liquid nitrogen tank product in China that has obtained the medical device registration certificate, which can provide a deep and low temperature environment of -196°C for sperm/eggs/embryos, and is an indispensable equipment for fertility preservation.

Birth defects are an important factor that causes people to return to poverty due to illness, and PGT technology is conducive to reducing birth defects, achieving eugenics and childbearing, and benefiting more couples of childbearing age. With the introduction of the three-child policy and other childbirth-related policies, coupled with the rise in infertility rate and the increase in per capita disposable income in China, the penetration rate of assisted reproduction in China is expected to continue to increase, and future growth can be expected.