Medical Device Daily Contributing Writer
With China becoming increasingly competitive for device makers, Boston Scientific (Natick, Massachusetts) has set up a new research center to seek out innovations and better tailor products to the market.
The Boston Scientific Institute of Advancing Science (IAS) and an Innovation Center opened in Shanghai on Sept. 17.
"A key focus for Boston Scientific is innovation that delivers both clinical and economic value and aligns with customer needs by improving outcomes, reducing the cost of healthcare or increasing patient access to therapy," Zhu Lin, a public relations officer at Boston Scientific told Medical Device Daily.
The aim of the IAS is to train 700 medical practitioners every year through clinical practice and multidiscipline programs. The IAS will also support other educational projects across Asia Pacific and integrate existing training and educational platforms, including initiatives like the Horizon Academy launched in June and the existing E-club program.
"The IAS will offer various academic programs such as medical conferences, visiting expert lectures, symposia on complex lesions, diagnostic and therapeutic technology classes, on-site operation training, and international exchange, as well as training programs that will reach numerous provincial-level hospital throughout the country," said Warren Wang, vice president and managing director for China at Boston Scientific.
For its part, the innovation center will work to collect feedback from customers that the company will use to tailor products and technologies to the market.
Boston Scientific is one of the largest device makers in the world with some 24,000 employees around the world and global expenditures of $886 million into R&D around the world in 2012.
Critics say the company was slow to react to the rapid growth in China despite having set up a country headquarter in Shanghai in 1997. Boston Scientific also has offices in Beijing and Guangzhou with some 350 employees.
"China is key to our ongoing global expansion, and we believe that initiatives such as the IAS and Innovation Center will help us to continue adapting to the unique demands of the China market," said president/CEO Michael Mahoney in a release.
Brazil, Russia, India and China together accounted for about 29% of the company's growth in the second quarter of 2013 and the company said in its quarterly results announcement that it expects significant growth in this market going forward.
"Boston scientific has seen sustained sales growth in China of about 25% over the past five years and we are confident that growth can continue," said Zhu.
But China's huge underserved market may provide both opportunities and risk at the same time. After a failed trial with a direct sales business model early in 2004, Boston Scientific is now selling its products in China through distributors.
"We believe it is the most efficient way for our business at this stage," said Zhu.
The shift is part of a push to catch up with its major MNC competitors: Johnson & Johnson (New Brunswick, New Jersey)and Medtronic (Minneapolis). Both of them have larger operations in China and are working hard to develop products tailored for the market.
Johnson & Johnson Medical (China) was set up in 1994 and now has 2,800 employees in the country and two training and educational centers – the Beijing Academy Center, founded in 2005 and the Shanghai Academy Center, founded in 2001. In 2006, J&J set up another subsidiary in Suzhou and then launched its Asia Pacific Innovation Center in 2011 in the same city "to design and develop medical devices and diagnostic products specifically for emerging markets, primarily focused on China and India."
J&J is now planning to launch a new innovation center in Shanghai by the end of this year. It would be the fourth new innovation center the company would open this year after Boston, London and California.
Medtronic, the other major medical device multinational has had a presence in China for even longer, having started operating in the country in 1989. Medtronic now has 10 offices and a country headquarter in Shanghai. In August 2012, the company opened its first innovation center outside U.S. and Europe in Shanghai to generate local product R&D.
Medtronic's efforts to localize its operations in China go beyond expanding its presence. Medtronic aims to double the number of employees it has in China to 2,000 over the next four years. Last year, Medtronic acquired Kanghui Holdings, a large domestic device maker with a strong network in second and third-tier cities.