This is a great time to be a company serving the healthcare industry. That might seem ironic for Americans and Europeans given current and pending healthcare market slowdowns. My rosy assessment comes from global markets. According to a recent international health insurance industry survey, all healthcare markets are expected to see gross double-digit growth this year (the only exception is the European Union). Russia and Estonia are Europe’s exception, with higher growth predicted for 2012. Latin America and the Asia-Pacific region are expected to see the highest levels of growth. Markets with highest expected growth include China, Taiwan, Bangladesh, Indonesia, Malaysia, UAE, Saudi Arabia, Dominican Republic, Bahamas and Panama.
If your company services the healthcare market in a mature market like the EU or US, what kinds of decisions should you make in order to prepare for changes and growth in global healthcare markets?
Choosing Which International Markets
I’d recommend researching potential markets long before you ever decide to enter your first market. The most important indicators is where demand is building. International healthcare providers and payors both seek out healthcare software, devices and processes that add value or cut costs. You will meet them at trade shows and they will surface as sales leads. If there are a cluster of provider hospitals in Malaysia, then it would be valuable to find out why your product is particularly attractive in that market. The next and closely related indicator is price point. What would a customer in a new market be willing to pay for your product? Is it higher or lower than your home market? If it’s lower, can local supplies help to offset the competitive price? Finally, country stability should always be a factor. Afghanistan is nearly impossible to set up international operations, while in a country like Malaysia it is much easier. Why? Malaysia has higher levels of political, economic and societal stability. Gathering all of this information requires lots of reading and asking many questions in order to gain a better understanding of the opportunities and risks.
Distributors or Company Sales Reps
This is often a big decision for healthcare vendors. The tradeoff is control and profits versus risk. If a company uses local distributors to sell the product in-country, the company offloads part or all responsibility for marketing, sales and support. It is certainly easier, but can put intellectual property at risk. Also, distributors can compromise branding if the product is marketed in a way that contradicts the company’s brand. Lastly, distributors often represent many products and may not necessarily take your product sales seriously.
Company reps are under direct control of your company, including branding, IP, and accountability for sales. The tradeoff is risk – risk of running into challenges with local officials, of changing laws, differing customer expectations and currency exchange rates. The right choice depends on both the culture of the company and the culture of the host country.
Consult with government health ministry early
One more piece of advice… Take time to meet and socialize with local and regional government officials. This is much more important in international developing markets. The health ministry, in particular, may need to approve of a large local healthcare purchase. A good relationship can help to keep out other competition and lead potentially to additional sales at other healthcare provider organizations.
If you are interested in learning more about international market entry in the healthcare industry, please contact me. In the meantime, I wish you best of success in all of your international business ventures!
Source for Healthcare Insurance Industry Information: “2012 Global Medical Trends Survey Report” 2012 Towers Watson http://www.towerswatson.com/assets/pdf/7394/TowersWatson-GlobalMedTrendsSvyRpt-NA-2012-23911.pdf