Medtronic and other foreign medical device players face more competition in China
1 1-Dec-14, Forbes
Ten years ago, Medtronic’s sales in China amounted to $50 million. Today, the company will sell more than $900 million across China during 2014. The strategy Medtronic has embraced to achieve this stunning amount of growth has been multi-faceted: exporting innovative products from the US to China, establishing a R&D facility in China to design products specifically for the unique needs of the Chinese market, crafting partnerships with government to educate patients around under-served therapeutic areas, and acquiring domestic Chinese medical device manufacturers such as Medtronic’s 2012 purchase of Kanghui Medical for $816 million.
Taken together, Medtronic’s China ambitions point towards a company confident in their ability to navigate one of the most complex and turbulent healthcare economies in the world.
What could handicap a company like Medtronic’s Chinese ambitions? Certainly, un-friendly government policies that favor domestic manufacturers over foreign-owned companies. Absolutely, reimbursement policies that stagnate and never speak for more of the patient’s out of pocket expenditures. But one of the easiest to overlook ways that Medtronic’s China ambitions could struggle would be to see domestic manufacturers close the gap between the best-in-class product offering from Medtronic and what the domestic owned companies are capable of producing.