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What makes a US or European medical device company think their products are not ready for Chinese market.
< 1 min reading time
As originally asked by Christina Zhao.
I keep following one American ENT product for years like a boy runs after a girl, hehe. But until now, they are not willing to introduce their product to Chinese market, which fatally made me puzzled and sincerely what to learn more voices from suppliers who have the same idea. Thanks!
That’s what makes me love this group so much. Thank you for sharing for everyone’s benefit.
DR. MICHAEL WARD
You may wonder what medical research has to do with medical practice? Apart from the obvious increased awareness of state-of-the-art therapeutic approaches, an understanding of the approach to research….the ability to ask the right questions and then use objective methods to obtain an answer. This awareness leads to critical thinking….challenging the old ways that are around just because they have been practiced for a number of decades or championed by a medical leader in the hierarchy of China’s medical community. Critical thinking will encourage physicians to do more follow up on their patients to see if they truly helped. It will encourage them to question their approaches or approaches of others with objective methods and thinking. And it will encourage them to think critically about new therapies – with an open mind – and improve their therapeutic approaches where indicated.
Research is not just about studies in patients where specific medical questions are asked. Research is a mindset. I have seen physicians in China who understand this now. So don’t be too saddened, Christina.
I have no any doubt on your first 3 items in your advise for western companies and I have to say you just said on the points. The only thing I want to remind here is how experienced your distributor was is not the end of the cooperation story. How your experienced distributor will put on your project indeed mean something for you. As we always say, how rich your boyfriend is means nothings. But how much your boyfriend spends on you means everything.
For the no. 4 advise, I think it should depend. A distributor who is picky on choosing their project or planning to use their on-hand project to upgrade/succeed their company may don’t need their supplier’s eye to eye trace, as their own target had been enough attractive for them.
Our company has two suppliers from EU. One comes to visit us a couple times each year. And since 2012, we had organized their Chinese market to be No. 1 in the whole world markets. The US market and their native EU markets are both behind our Chinese market now. The other supplier never visited us yet while we ever visited them, but our business amount in the first cooperation year after registration was approved had been 3 times of our signed amount in our agreement.
But unfortunately, if a wrong distributor or an unsuitable distributor was chosen by mistake, it is necessary to seriously consider Michael’s above full four advise for survival.
Finally for sending a western person to China, I suggest western companies to be careful. You need to fully prepared this to avoid sending a back-seat driver instead of a intelligent brain for your distributor. A judgement on your distributor’s nature and work mode is necessary before taking this action. When your distributor has no near-sight eye problem, it is not profitable to send them a near-sight glasses.
DR. MICHAEL WARD
I mentioned hierarchy in my last comment….to expand upon that, culture as a whole in China is still fairly homogeneous and remains infused with many beliefs and practices from past decades and centuries. In a way, this is good to preserve one’s heritage and cultural practices. In a modern world, there can be clashes and disappointments when those in western society try to enter China. Most of the western countries, even those in Europe with a much older heritage than those in the U.S., Canada, Australia etc, are a melting pot with regard to the makeup/demographics of their respective societies. Thus old traditions are hard to maintain. Business practices of the west have not universally been adopted in China. Some have been well embrace but others rejected. These points are made because a joint business relationship between a China distributor and western company can often unravel because of insensitivity to respective cultures, lack of trust, or clashes of culture whereby a business approach is adopted by the China distributor that is not in the best interest of the Western company. Communication can also be fragmented….many in China do not like to have their Western business partner ‘lose face’ and thus will neglect to share bad news or negative information that is essential to know. Medical practice and the use of medical devices are very detailed but can be lost in translation.
Thus, I would advise the following to a Western company:
I have personally had great success in China, both in training physicians (I teach a blend of western concepts and western methods) and in working with clinical/medical/sales/marketing partners in China. I have to say that I spent time assuring my partners functioned according to my needs. The hardest challenge was getting them to say “no” to something with which they disagreed or in sharing negative information. Once that aspect was conquered, the relationships were very positive.
DR. MICHAEL WARD
I have first-hand experience at the latter in two instances. First, let me describe a joint program of medical exchange/training program between the hospitals in Tianjin and Penn State University Medical Center – for neurosurgery. I was present when the first 3 neurosurgeons came to Penn State for training. I warned Penn State to have an agenda and program pre-established but they said that when physicians come to their hospital for training they know what to do and join the neurosurgery teams right away. These 3 physicians from Tianjin stayed 2 days and sat in their designated rooms for the most part – then went touring the U.S. for the remainder of their 3-months.
I have personally witnessed SFDA representatives who were supposed to be coming to the U.S to interact and learn from the FDA – pay them a token visit and then tour around.
I watched a 30 neurosurgeons come to Hanover Germany for a scientific meeting…I knew many of them. They registered for the meeting and then spent the remainder of their time (hosted by J&J China) touring Switzerland.
So for some that leave China, they see the opportunity as possibly their only chance to see the rest of the world and academic/professional training is not high on their list.
I know a very well (personal friend) neurosurgeon in Hong Kong. He has reached out many neurosurgeons in mainland China for training. When they visit, their interest is more in general hospital administration (I assume preparing for promotion in their hospital) and shopping in Hong Kong. He tries to do collaborative research with physicians in mainland China and laments that they disappoint him in terms of protocol compliance and therapeutic requirements.
Again, the above does not mean all are like that and i have seen exceptions to the above. I believe that over time, those circumstances will be less and less and more well trained physicians with advanced knowledge will return to mainland China to influence others. This will take longer than anticipated though for one plain reason….the hierarchical manner in which Chinese hospitals and departments are run mean that older heads with older ideas, who are reluctant to adopt western ways, will have to be replaced by those who embrace change.
I will address distributors in another comment.
1. Your suggestion on “adoption of most medical devices is limited to large cities and hospitals” is valuable for both Chinese distributors and their suppliers. Especially, when the project is an advantaged innovation one. We ever succeeded on a Holland ENT project in this marketing strategy. While for those imported simple devices Class I or II, I think maybe it will be more profitable if we define the potential target markets by not only limiting by large cities and hospitals.
5. Regarding “Many of China’s physicians shun new therapeutic approaches and instead tend to favour and not question their past approaches”, this situation exists for reasons. In some local provinces, we have package cost limit for whole surgery cost. For example, the surgery package cost limit for an ENT surgery is RMB5000 (about $800) totally in some provinces, which is including all costs such as surgery fee, all dressing, instrument usage, etc. When the cost is over, the surgeon will be fined. Under this situation, the regulation on package cost limits the surgeons’ demand on adopting new advantage devices. And it is a situation in normal level hospitals, but for those end-top hospitals in large city or province capital cities, the situation is not the same. The doctors got the fresh therapeutic approaches when they got the training overseas and they carried them back to China, which indeed positively effect the situation step by step.
So, for a real good product meets market demand, Chinese market is not so hard to be successful especially when there is reliable distributor partner and a matchable marketing strategy like your point 1.
Now when the topic comes to a reliable distributor, what will you consider in the process of choosing a distributor? or we say what can make you think this company can be a workable distributor for my project in China? and normally how can you choose them out? Sincerely open my ears for you here.
Regarding which kind of medical devices are suitable to march into Chinese market, it has been complicated. I personally only recommend those innovation devices and some simple disposable devices with some fresh skills for this market. But the marketing strategies for these two kinds of devices need to be defined carefully with your fixed distributor in different modes. For instance, to introduce an innovation device from zero, setting up your own project KOL team and efficiently utilize this resource is a gorgeous way. But if the project is a simple disposable one, even if with fresh skills, more cost on KOL team building will mean more risks.
For the registration in SFDA, it is indeed a serious problem for all foreign devices. We ourself even ever met the case that the product was classified to be Class I in Europe, while it was classified to be Class II in China. And sometimes, for the similar products, Chinese manufacturers can do the registration in their local SFDA, while an imported foreign brand has to do the registration in National SFDA. The performance in national SFDA is much more strict than local SFDA as sometimes bureaucracy exists in local government sectors.
And to find a distributor who has good experience registration team on Chinese SFDA is also important, as they can focus on their own registration and duly / accurately give useful suggestion to SFDA when there are doubts. It will be more efficient than fully leave it by contracting a registration service company.
For the intellectual property, it is a headache for foreign companies. I had felt out this worry by myself when I talked with our potential US or EU supplier partners. But my idea is as long as your product had been launched in any market, the risks on being copied by others had existed. It is just time problem, sooner or later. And the risks on a good project is much higher. Personally, I think the confidential technology was not disclosed from SFDA side. The products are copied in China mostly from ever-cooperated distributors who ever held your confidential docs or the product itself. And these are the correct aspects you need to consider how to protect your own intellectual property from.
DR. MICHAEL WARD
1. Regulatory hurdles aside (which are changing and dynamic targets), adoption of most medical devices is limited to large cities and hospitals – smaller cities and remote areas are potential but don’t offer much now. Having said that, there are large population s among Beijing, Guangzhou, and Shanghai alone.
2. For complex technical devices, China’s physicians have limited skill and that requires considerable patience and training programs to achieve adoption.
3. U.S. medical devices are developed for Western markets essentially and the ROW opportunities are not factored into device development….as such they come with U.S. pricing, subject to foreign government restrictions. Often these devices are too expensive in a country like China where the bulk of the population remains without medical insurance and pays out-of-pocket.
4. Though China’s business and financial development has exploded onto the world scene and many internal enhancements have brought China up to a much higher standard of living, medical practice in China remains steeped in tradition and hierarchy such that changes in medical practice are hard to impose.
5. Many of China’s physicians shun new therapeutic approaches and instead tend to favor and not question their past approaches. This is because the thought process is that quantity (thousands of patients) = quality….even though the concept of follow up is somewhat foreign.
6. Having trained many cardiovascular and neurosurgical physicians in China, my general perspective is that they lack an innate ability to appreciate clinical trial design and subsequently a difficulty in assuring protocol compliance in studies one may have to do in China.
7. As noted by Michelle, choosing the right partners in China is crucial. Don’t expect to do that from afar and don’t expect to fly to China, sign someone or some company on your payroll and go home without knowing how you are going to provide ongoing management of activities in China.
Do I recommend going to China? For sure I do. But one has to recognize challenges and one has to be prepared to roll up sleeves and work hard for it.
There are many reasons for this. As you know, the buying market in China is complicated; especially for medical devices.
Selling a new medical device in China is a long-term commitment that requires considerable time, money, legal protection and SFDA regulatory requirements.
1. It is difficult for foreign medical products to compete with the price of Chinese made products if the device has little or no innovation (meaning simple disposables, class 1 or 2 products).
2. For a foreign medical device to enter China, a business must register the product for import and clear the product for distribution through the SFDA. This process can take up to 1 year or longer.
3. China is looking to import innovative, high end products. This requires foreign companies to share intellectual property, product details and other confidential product information with the SFDA before products can even enter the country. This becomes a strategy problem for foreign companies.
4. Selling the products is also a complicated process in China since each region of China handles the SFDA regulatory process differently.
5. Finding reputable distribution partners is a concern. This process requires personal meetings, contracts and other after-market agreements (with the distributors) detailing who will handle product recalls, adverse event reporting, product labeling and yearly SFDA requirements.
These issues just touch the surface.
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