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As originally asked by SONIA ZHAO.
10 Tips for doing medical device business in China
• Regulatory – if you have CE or FDA approvals you shall not have regulatory difficulties. However, the registration classification and procedure will be different here.
Same as I mentioned, and I will put more points and detailes here, for low technique products, such as the formation change or a little change to make it much easier to use, do not need to do the intellectual protection. All you need to do is quickly occupying the market and getting your expected profit. Donot worry about the copying coz they will be copies in a fast speed in chinese market.
For high technique products, such as chaning the way of treatment or breakthroughing a problem in clinical, they need to have patents, eg. PTC, if you want to do an international business. These products normally need a long education time to the doctors and thus a huge amount of money and time will be spent. Therefore, if you didnot have the patent and others copied it, it would be a disaster.
All in all, everything in your marketing strategy depends on what is your product like, how many markets you want to occupy and how much profit you want to get in a reasonable period of time. That is all about these!!
As I mentioned before, one factor that I think will rise to the top will be the number and quality of patents filed by Chinese companies (including Mindray, Camilla :). It won’t be long until the real problem Western companies have will be with Chinese competitors enforcing IP rights in their own backyard!
Camilla, thanks for that link. That is consistent with what I’ve been told by several Chinese attorneys and US attorneys having experience in China.
David Sheets, my question is, when you say “they don’t care” who is the “they” you are talking about? If you mean the companies knocking off the products, I agree. If you mean the Chinese courts hearing infringement cases, I’m not so sure.
I’m not referring to that at all – I am painting more of a “broad stroke” – whether it be hot selling (read: high volume) technologies, luxury goods ,etc., they don’t care.
For instance, when they actually “knock off” an entire Apple Store – they don’t care about enforcement. When they “knock off” Cisco products they don’t care about ramifications.
When they “knock off” LV, Prada, etc., etc., hand bags, Rolex watches, Ping golf clubs, movie DVDs, Tiffany jewelry or Microsoft software – they just don’t care.
fortunately, for most medical devices, the industry is so small it isn’t worth them going after (though they do to some degree)
as far as taking precautions – puhlease, if Cisco and Micorsoft can’t do it, nobody on LinkedIn can!!
Date: Fri, 31 Aug 2012 13:09:24 +0000
Thomas J. Czarnowski h. Lada
There are 14000 medical device manufacturers in China and most of their exporting products are low technique products and thus these products can cover or occupy the low-technique market abroad coz they have much lower price. However, what china lacks of is the high technique and thus now many Chinese manufacturers or distributors want to find products with novel innovation in a specific field. They also consider the patent as an important issue since no matter they distribute the product or technique cooperation with the inventor, they do not want anyone copy the product. Therefore, the issue Domingo mentioned can only happen in the OEM field.
For Domingo’s concern, my suggestion is that a good product should have PCT (the international patent and the covered area must include China) to protect itself if the technique needs to be protected. Then, when you want to cooperate with Chinese companies, you shall put strict statements regarding to confidential issue in the contract. I have worked with one US company and launched their product for distributing by my employer at that time. Then, we found their OEM company in China has copied their product and changed the name. The copied products were sold to anywhere with a much lower price since they did not need to pay importing tax and high cost of the product. Just because this company did not sign any contract regarding to this issue, then the OEM company could do anything to them.This is a good example to show that the importance of patent and confidential statements.
Also, I am not sure what kind of third party you have worked with, Domingo. Do you mean the OEM company? the registration institute? coz this kind of issue will never happen in the type of my company: the information provider. Firstly, we donot need confidential information from your company; we can provide the market information to you without knowing how the product made, but only its application and general clinical results. Secondly, we have confidential statements in the contract and if this thing happened, we would be sued. Therefore, this will never happen in the cooperation between the customers and us.
As far as Chinese companies going after the export markets, I read that Chinese medical device exports increased by 50%+ per year in the past two years. They are selling first to emerging markets in Asia, Africa, S.Amer., and Eastern Europe. A few have ‘graduated’ to the more developed markets. For example, Neich Medical in Shenzhen makes PTCA balloon catheters that are ranked No. 1 in sales in Japan, which is the most difficult market to sell in the world. Chinese medical device exporters, from what I hear, are undercutting competitors by up to 30% in order to get foreign market share (which they can do as their costs are so much lower). It seems they are copying the Japanese automotive strategy of the 1970s by lowering their price to get market share.
In fact, this should be very disconcerting for U.S. medical device manufacturers but, unfortunately, it isn’t getting much attention. But I see this as being a game-changer in the near future, just as Japanese autos companies turned their industry upside down in the U.S., in the 70s.
On a side note, when dealing with Chinese companies where IP vulnerability may be an issue, I have found that, if possible, dealing with a Chinese branch/subsidiary of a Western company may give your company a bit more protection. Not only do they typically have similar operating procedures/values as their parent, but it forces them to enforce these values as much as possible when they are working with their domestic suppliers.
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