Medtronic, like many other medical device firms, is looking at what the right mix of strategies is when trying to penetrate global markets.

The experience has been revealing.

In a presentation on globalization on Monday at the Innovation Workshop, Design of Medical Devices Conference, at the University of Minnesota, Monday, Patrick Lyon, Senior Manager, Globalization with Medtronic AF Solutions, implied that applying the U.S. template would be futile.

Not only is the overseas market different in terms of what devices are affordable and what the local needs are, each individual market – China, India – is unique. So innovating for those markets requires a deep understanding of patients’ needs, the regulatory agencies and the economics of that region, among other things, Lyon advised.

Take a page out of local innovation too.

An example of this is the Jaipur Foot Clinic in North India, Lyon said. The clinic has attacked the problem of amputations and lost limbs creatively for its patients, 90 percent of who are below the poverty line. Instead of trying to come up with the latest and greatest $5,000 bio prostheses they have “figured out how to make a foot for $40,” Lyon said.

They have been “wildly successful,” he said.

Cost, then, is an undeniable fact of globalization, and the Chinese stent market represents a difficult lesson for Medtronic and other multinationals in this regard.

Just a few years ago, Medtronic, Boston Scientific, Johnson and Johnson and Abbott led that market with their advanced bare metal and drug eluting stents commanding 60 percent market share.

But the Chinese device makers came up with much cheaper versions of those stents. Patients now have a choice of a more expensive stent made by the likes of Medtronic, Boston Scientific and others, where their out of pocket costs would be higher and a locally made, cheaper stent that has better reimbursement, Lyon said.

And it appears that the choice has been easy for Chinese patients.

Foreign multinational firms' share of the Chinese stent market has tumbled to a “steady 20 percent” from 60 percent just a few years, Lyon said.

“We have seen this[competition from local device makers] in stents, but we are also seeing it in orthopedics, diabetes ….,” Lyon said.

Still, as challenging as the overseas market can be, it allows great opportunity for innovation and in truly affecting how healthcare is delivered.

Lyon pointed to Medtronic’s Cardiac Reveal Insertable Monitor as an example of innovation that has helped patients in Russia. The device monitors the heart rhythm for people who have had fainting spells to determine whether patients have arrhythmia. Once the patient with the implanted device faints, the patient or family member immediately places the hand-held activator over the chest where the device is implanted. That records the heart beat before, after and during the fainting spell. The information is collected over the course of a year or whatever time period the prescribing doctor recommends to help in a diagnosis.

Russia has a large land mass and doctors want to see the patients who most needs attention and “minimize unwarranted visits,” Lyon explained.

Having the Cardiac Reveal will thereby prevent a trip to the doctor’s office after such unexplained fainting spells. The product is available in many markets aside from Russia, Lyon said.

While there are issues of cost and access that are key to solving the globalization puzzle, sometimes multinational companies simply want to use innovation just as a force for good. Take the case of Merck's Mectizan river blindness drug. When the drug giant realized that African nations just couldn't pay for this product, it chose to simply give it away for free, Lyon said. Now, the disease is no longer a major health concern.

"The benefit of good innovation isn't always in the dollars," Lyon said.

-- By Arundhati Parmar, Senior Editor, MD+DI

UPDATE: A previous version of the story wrongly reported that Medtronic's stent market share fell from 60 percent to 20 percent instead of all the multinationals combined]

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