Boston Scientific to Expand in China

Qmed Staff

December 27, 2013

2 Min Read
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After seeing its revenue fall over the past years, Boston Scientific is looking to boost its bottom line in China. The company is adding employees in China and is debuting surgeon-training centers there, according to a Wall Street Journal report.

The move comes even as the Natick, MA-based medical device giant slashes hundreds of jobs in the United States and elsewhere, with savings from the "strategic growth initiative" going toward developing new products and other initiatives.

Boston Scientific, then, is hiring where it expects growth. A recent Motley Fool report drove home the point that countries such as Brazil, Russia, India, and China (the BRICs) are where Boston Scientific can expect growth in coming years.

Expanding inside China presents its own challenges, though.

China's more than 1000 distributors present complex logistical and managerial challenges, Warren Wang, vice president and managing director of Boston Scientific's China division, tells WSJ. Local governments are also pushing for lower medical device prices.

Boston Scientific is seeking more direct interaction with Chinese doctors through an undisclosed number of training centers it is opening inside the East Asian giant.

The company has plenty of competition from Chinese device companies, as well as rivals from back in the United States. Medtronic is presently leading the pack among 14 multinational medical technology companies in China, according to an analyst report by Morningstar.

In 2012, Medtronic acquired Kanghui Holdings, a Chinese conglomerate, for a price tag of $816 million. In addition to joint reconstruction devices, Kanghui manufactures spine and trauma devices. Armed with its distribution network, Medtronic will be well-positioned to distribute its products in China.

"Medtronic faces far more upside than other device manufacturers because of its extensive product portfolio," notes the Morningstar report. "With the addition of Kanghui's strong distribution network, Medtronic now has an avenue through which to move all of its devices into Chinese hospitals, including pacemakers, implantable cardioverter defibrillators, insulin pumps and heart valves."

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