Commercializing Medical Devices in China – WSGR Medical Device 2012 Conference

The panel was moderated by Elton Satusky, Partner at WSGR and focused on the impact that China’s growing middle class is having on healthcare services. The panel addressed strategies to best navigate China’s complexities and challenges, in order to successfully access the burgeoning Chinese medical device market. China is a very exciting place to be to do business said, Landon Lack, Founder of China MedConnect. MedConnect focuses on representing small US companies, to achieve access in China market. It is important to understand China market. A product well suited for US market, may not be well suited for China market. Also, china is big and diverse, and is extremely fragmented, said Lack. Lack advised that companies have a legal presence in China, or at least get a legal agent, in china. If a company expects China to be a good market, then planning a clinical study early on in China, would not be highly expensive and would add value, according to Lack. Also, in China, there is a greater value for US PMA approval than EU CE Mark. Getting IP protection is very important, in China. Even Chinese partner values the US company more, if it is protected in China. Regarding reimbursement, Lack opined, that it is tricky in China and it can be based on a procedure or on a device.

Kraig Black, COO and EVP, Corporate Development at Medafor said, China is an important market but it took them a few years to figure out to deal with China. Not filing for original patent protection in China, was a mistake, he said. Majority of the billion dollar hemostatic market in China is geared toward low end but it is rapidly changing, said Black. In doing a clinical study, he advised that companies use vetted FDA approved hospitals and it would not be difficult because in straight numbers, there are more top tiered hospitals in China, than in the US.

Also alluding to China’s rising status, Nick Pliam, Venture Partner with Decheng Capital & Bay City Capital, said that the old expectation that generation minus one device would work in China, is not true any more. Chinese market now demands the best. China is spending 4.5% of its GNP, on health insurance. China cannot afford to replicate the US healthcare system, and is in the process of figuring out the model that would work well. Pliam also emphasized, the importance of protecting the know-how in China. A partner in China should not be given all the pieces of the puzzle or he could go and do it all on his on, said Pliam. Additional problems in China are corruption and huge economic disparity. But as middle class is growing the trend in China is towards more, higher quality devices.

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