Medical Device Daily Executive Editor
SAN FRANCISCO – Doing business internationally was a hot topic during last week's Frost & Sullivan Medical Technologies Executive MindXchange at the Grand Hyatt hotel, the subject of two specific sessions and touched upon during several others.
Hiroshi Uchida, president of global operations for clinical diagnostics equipment provider Dade Behring (Deerfield, Illinois), who co-moderated a session on “Global Market Entry“ with Salil Pande, also with Dade Behring, said one of the key issues to address is whether the market potentially being addressed is global, regional or country-specific.
He said that in many cases, a decision to take a domestic product into global markets is built upon a rationale of maximizing revenues from that product in light of the expense of bringing it through the regulatory maze to commercialization.
While there are lots of statistics available as to where specific countries or regions rank in terms of being healthcare markets, Uchida said that from a practical perspective, they can be divided into two roughly equal camps: the U.S. and the rest of the world.
A key to succeeding in the “other 50%,“ he said, is understanding the differences in customers. “What are the cultural differences?“ he asked.
Audience member Victor Miranda, director of the continuous monitoring market segment at blood glucose monitoring firm LifeScan (Milpitas, California), commented: “You need to look at it in terms of the customer. What works for our country doesn't necessarily work in another region.“
Susan Alpert, MD, PhD, senior vice president and chief quality and regulatory officer at Medtronic (Minneapolis), said that “different cultures have different relationships between patients and doctors,“ and those differences have meant “a much slower uptake“ of her company's remote monitoring technology in some countries.
“It's a challenge,“ she said, “because it's a much different environment“ than, for instance, the U.S., where uptake has been fairly rapid.
While there is a broad belief in med-tech circles that a path to product approval in Europe is easier than it is in the U.S., Alpert, a top official in the FDA's Center for Devices and Radiological Health before joining Medtronic, said: “What you need to provide in the way of information elsewhere in the world is more than what you would need, say, for a 510(k) approving comparability to existing products, in the U.S.“
Harvey Rudolph, global program manager, medical devices, for Underwriters Laboratories (Lexington, Massachusetts), touched on requirements for regulatory approval internationally, noting that “most of the countries of the world are tending to follow the European [regulatory] model, nudging themselves toward meeting European-type information requirements.“
He said that “if you have a technical file put together, that usually will be accepted elsewhere.“
Using the example of Medtronic's remote monitoring technology and the company's efforts to push that technology beyond domestic markets, Alpert said, “we've made changes for international use, changed the claims we make, [gathered] more clinical evidence.“
Beyond regulatory agencies, she said, “the [international] reimbursement community is putting pressure on us to have more and more information.“ In many countries, Alpert said, “without reimbursement, your market is zero.“
Alpert noted that in Medtronic's case, “we look at all of our products as global. We have to spend the time and energy to figure out what that means.“
With its recent larger focus on chronic disease, she said Medtronic has “people on the ground in all these countries to tell us what the needs are.“
Alpert said the company, which is the world's largest pure-play med-tech firm, isn't “globalizing products – we're globalizing technologies, and we have to modify our products for different parts of the world, different age groups, different cultures.“
Miranda cited a few of these: “China will say, 'Take all the bells and whistles out and give [the device] to me for 50 cents. We'll sell a billion of them.' In Japan, doctors ask for features, not outcomes.“
The real issue, he said, is “what does your customer need?“
At another session on “How to Win in Europe,“ moderator Richard (Rick) Hughes, president of HealthLink Europe (Raleigh, North Carolina), emphasized the importance of distributor relationships, which he termed “a key part“ of succeeding in European markets.
Raymond Cohen, chairman of the board of Cardiac Science (Bothell, Washington), a prominent make of automated external defibrillators (AEDs) and other cardiology sector products, said the most important consideration is determining where your product fits.
For companies trying to decide where in Europe to start first, he suggested “the path of least resistance.“ If, for instance, your product “speaks“ – as does an AED – “you need to deal with the language issue, so maybe starting in the UK, as we chose to do, makes the most sense.“
Cohen added that U.S. companies “don't need to set up shop in Europe – you just need to go there.“
He lauded the Department of Commerce's U.S. Commercial Service as providing “unbelievable resources to help you – they set up meetings, arrange for interpreters, provide a wide range of services.“
Cohen added that attending the gigantic MEDICA trade show held in Dusseldorf, Germany, each November is another great place to start. “About 80% of the attendees are distributors,“ he said. “You can collect literally thousands of business cards while you're there.“
He said U.S. firms should set up distributorships in Europe country-by-country. “Pick a distributor who is going to the same customer base your product is aimed at.“
Cohen urged smaller companies looking to get a foothold in Europe not to discount Eastern European countries as possible markets. “There's a lot of business being done in these emerging markets,“ he said. “They're spending a lot of money on new technologies.“
He added that distributors in Europe “are the most technically savvy in the world – much, much higher than U.S. sales forces.“
The key, he said “is to do it – get your product out there.“
Julio Rategui, of Medrad (Indianola, Pennsylvania), said a key issue is the relationships European distributors have with their customers. “I have seen a number of U.S. companies that have underestimated the value that a distributor brings to those relationships.“
Rategui cautioned U.S. companies that decide to end their relationships with European distributors to “be prepared for a surprise . . . you need to find someone [else] who has 20 years of relationships with those customers.“
Hughes said he thinks entry to the European market “is not as complex as it used to be“ and that distributors “are not as parochial as they used to be.“ Another growth strategy he recommended is “to buy the distributor yourself. You're then buying those 20 years of experience.“