year. In contrast, higher-value device bids
most often are handled by the country’s
Ministry of Health.
growth, foreign medical device companies can expect to have greater opportunities to sell their products in China. ;
Purchasing and Pricing
Each hospital will have established departments that decide the sell-in volume
and payments for devices. For example,
some hospitals may designate their logistics department to make these critical decisions. When a product is being
presented for listing or bidding, tailoring
the marketing of the product to the audience can increase chances of success.
Thus, it will be helpful to research which
department will review your product.
When introducing a product to a hospital in China, foreign medical device
companies also may want to consider the
number of inevitable markups that are
added before the product reaches the
consumer. In many instances, foreign device companies will need to collaborate
with distributors because China’s regulations require that hospitals buy devices
from authorized distributors. These distributors will require a profit for their
services. Furthermore, the hospital will
increase the product’s price. The hospital’s contribution can be split into two
parts: a bidding fee and a selling fee.
After the bidding, the hospital usually
will choose to increase the price. Hospitals often also increase the price further
when finalizing the product’s selling price
to the consumer.
Hence, when foreign medical device
companies are deciding the price to the
distributor, these additional fees should
be taken into consideration in order to
determine a competitive unit price. The
distributor’s profit and the hospital’s two
fees usually are calculated as a percentage of the bidding price. With quality
market research, an appropriate bidding
price can be determined.
Ames Gross is president and founder of
Pacific Bridge Medical, a Bethesda, Md.-
based consulting firm that helps medical
companies doing business in the Asia market
( www.pacificbridgemedical.com). A recog-
nized national and international leader in the
Asian medical markets, he founded Pacific
Bridge Medical in 1988.
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