Originally Published MDDI October 2004

Q&A

U.S. Commercial Service: Helping Exporters Find Markets

The Healthcare Technology Team provides assistance to companies
looking to begin exporting their products.

Rhonda Keenum

Medical device firms seeking to export may want to tap the services of the Healthcare Technology Team. The team, one of several industry trade teams located within the Commerce Department's International Trade Administration (ITA), is anchored by the U.S. Commercial Service. MD&DI recently spoke with Rhonda Keenum, assistant secretary of trade promotion and director general of the U.S. Commercial Service, to discuss exporting and the services provided by the Healthcare Technology Team.

What is the mission of the Commercial Service and the Healthcare Technology Team?

The Commercial Service helps U.S. companies export, and it looks out for American business interests abroad. We have a network of offices in 108 U.S. cities and nearly 150 posts in 76 countries, so we are well connected and know the key players. Within the Commercial Service, we have teams whose missions focus on specific industry sectors. One of these sectors is healthcare technology. The Healthcare Technology Team comprises about 35 international trade specialists, an equal number of commercial specialists, and a Washington, DC–based staff in ITA's Manufacturing Services. This network provides in-depth counseling to healthcare technology clients.

What kinds of services and expertise do the Commercial Service and its Healthcare Technology Team offer U.S. medical device companies?

We provide an array of services, including export counseling, market entry strategies, videoconferencing, international partner searches, prearranged business appointments, trade events, and much more. Our Washington, DC–based team members are a resource for information and support for policy-related issues as well as for providing guidance on healthcare-related U.S. government agencies, like FDA and HHS. Smaller companies, whose resources are often limited, find these services cost-effective. Our team is familiar with medical device technologies and has an excellent understanding of markets, import requirements, and regulations. It has developed key contacts in the industry. We also refer companies with financing questions to the Small Business Administration and the Export-Import Bank.

Why the focus on small and medium-sized businesses?

Small businesses are the engine of our economy and create 70% of the new jobs in America. When it comes to exporting, small and medium-sized firms can export a lot more—they account for 97% of all U.S. exporters, but only about 30% of the total value of U.S. goods exports. Looking at the medical device sector, there are many firms that could be exporting, but may not be fully aware of the opportunities. A lot of businesses are unaware of the government's export programs and services, including those available through the U.S. Commercial Service.

Why should medical device companies consider exporting if they haven't already?

About 95% of the world's consumers live outside of the United States. Why sell to just 5% of your potential customers? To a large extent, the U.S. market for healthcare technology is very competitive and saturated.

Also, we're seeing a lot of growth in export markets. The estimated worldwide market for medical devices is between $160 and $170 billion. With market reforms and privatization, many countries have a real demand for healthcare and devices, including the developing world. U.S. healthcare technology is highly regarded in the worldwide marketplace; there is always demand for cutting-edge technology.

How does the Healthcare Technology Team work? What happens when a company contacts a team member?

Depending on the objectives of the company and its experience with exporting, the team would begin by helping the manufacturer identify key markets for its product and by providing it with research on that market. A company usually seeks help to identify overseas buyers. We can find the best program or service for a company based on that company's resources. Also, for companies interested in exhibiting at medical trade shows in the United States or abroad, or meeting with potential buyers, we can put them in touch with show organizers and include them in our matchmaker programs.

Many companies also contact us because they are having a problem with the registration requirements in a particular country. By using the team's network of resources, we can help them.

Could you give an overview of export markets for medical devices?

There are excellent markets for U.S. medical devices in places like Japan, the European Union, and Canada—in what we would describe as developed markets. Japan, for example, has an aging population that is fueling demand for the latest in medical technologies.

China's large population makes it a fast-growing market, with urban insurance programs and turnkey units within hospitals that, by operating on profit, are resulting in more equipment purchases. Southeast Asia, Singapore, Thailand, and Malaysia are working to improve their regulatory systems. India has the largest middle class in the world and a private health insurance and hospital system.

There are also excellent opportunities in Eastern Europe, especially with the recent expansion of the EU. The Middle East is another good market, with little or no regulatory restrictions. In South Africa, there is [a high] demand, but money and financing are problems. Latin America has mixed growth opportunities, as some countries are very restrictive on regulations and others, like Chile and Argentina, are less restrictive when it comes to importing U.S. medical devices.

You mentioned trade events. How do you use them to partner U.S. medical device firms with potential foreign buyers?

At the Association of Clinical Chemistry show in Los Angeles in July, several commercial specialists brought delegations of buyers, such as hospital purchasing agents, and medical device distributors to the event. The commercial specialists introduced the delegation members to our clients who were exhibiting at the event and, when possible, arranged one-on-one meetings.

For Medica, a medical device and equipment show held in Dusseldorf, Germany, each year, the Healthcare Technologies Team assists our office in Dusseldorf in recruiting for the Corporate Executive Office (CEO) program, which provides prearranged matchmaking meetings with potential partners, agents, and buyers. For about half the cost of a booth, the CEO program provides a shared office space on the exhibit floor for 18 companies. The participation fee includes a table and four chairs, interpreter, company listing in the Medica show catalog, and cellular phone for each participant. The team has developed excellent relationships with show organizers over the years, which allows us to offer these types of programs to our small and medium-sized business clients.

The Healthcare Technologies Team also organizes what is called a Showtime program at key trade events, where our visiting commercial specialists meet one-on-one with exhibitors. Our clients find this program beneficial because it provides them an opportunity to discuss a particular market for their products with the specialist who has significant experience in the area.

What are some other examples of the Healthcare Technology Team's activities?

We've facilitated export sales of U.S. medical devices in a number of ways. We helped a firm gain access to [U.S. government] financing for the sale of medical equipment to a clinic in Mexico; we provided contacts for a company looking to find buyers in the Philippines; we worked with an in vitro diagnostics firm to help it understand EU self-certification requirements. And we've set up hundreds of prearranged business appointments at our overseas posts through our Gold Key Service program, which enables companies to sign up distributors and other business partners.

What are some of the issues faced by medical device companies looking to export, and how does the team assist such companies?

Some of the biggest challenges companies face in international markets involve finding qualified distributors and partners, and understanding regulatory requirements and the limits on the healthcare budgets in foreign countries. Our domestic and international colleagues can assist companies with identifying qualified distributors. This is crucial. A company that chooses a poor distributor can spend years trying to rectify the situation and can lose valuable time in gaining market share.

Inconsistent or nontransparent regulatory issues also present a challenge to companies trying to enter new markets. Companies are often asked to provide a tremendous amount of documentation regarding the product, its manufacturing process, efficacy, etc., to register the product with the respective health ministry. The registration process, which is usually required before a product can ever be marketed or sold in the country, may take one to two years to complete.

Healthcare team members also assist U.S. medical device firms in a variety of other ways. Healthcare industry specialists gather information on regulatory and reimbursement systems in foreign countries, and they conduct fact-finding missions and prepare reports on the results. They also provide direct and indirect support for policy negotiations and initiatives. A Web site provides regulatory profiles on many prominent foreign healthcare markets. This information can be found at www.ita.doc.gov/td/mdequip.

Finally, as [in] the United States, many countries are experiencing shrinking healthcare budgets, requiring them to reduce costs through lower reimbursement for certain procedures or by denying coverage for procedures altogether. As this occurs, a medical device company's products may be needed, but without sufficient reimbursement, a foreign distributor may not be willing to market them.

How can manufacturers contact the U.S. Commercial Service?

First, there's our Web site at www.export.gov/cs, which provides information on overall Commercial Service programs and services. Also, www.buyusa.gov/eme/medical.html and www.ita.doc.gov/td/mdequip provide the names of team members and their contact information. Our Washington, DC–based team members can be reached through Jeffrey Gren, director, at JeffreyGren@ita.doc.gov, by telephone at 202/482-2470, or by fax at 202/482-0975.

Copyright ©2004 Medical Device & Diagnostic Industry