Exploration For Medical Devices
Mr. Amit Dave,
M. Pharm, MBA,
Former CEO - Brazil Operations/ Vice President Export
– Zydus Cadila/Claris Lifesciences
In the first
article in this series, we have touched up on broad
background of the need and role of Regulatory laws. In
the next article, we saw the perspective of the
Regulatory outline. The article elaborated the
concepts of QRS, denoting Quality, Risk and the
Systems which will make the final product fool proof.
This outline will be followed
by product specific norms and Handling norms (HP). The
total concept will thus be represented by QRS HP
article discussed and described the starting point of
Regulatory norms of any country which is Product
Classification. We saw Classification of Medical
Devices in the major countries and understood that
this classification outline is fairly common across
the major countries of the world.
article, now we will see the commercial aspects of the
international market. Here we are starting with the
market selection (or country selection). Before that,
the article explains the logical reasons about why one
should choose and go for a market outside India rather
than sticking to India market only.
Now when we have seen some very broad aspects of
International registration as well as their similarities
with the Indian regulatory guidelines (current and
planned for the future implementation), we will see here
about commercial and market aspects for the
Why to explore international market
In the USA, export means to send goods to Mexico. On the
other side, almost all the European countries think of
export from the beginning. The main reason of this basic
thinking difference is because of the domestic market
size. US domestic market size is big enough while almost
all the European countries have smaller market size.
Since the market size is in parallel to the population,
a good comparison of population of the USA with that of
European countries will reveal this fact. USA population
is 33 crore while almost all the countries of Europe
have less than 5 cr population baring exceptions like
Germany, France, the UK, etc.
A similar thinking process has been observed in India.
Domestic market being large enough, the Companies think
of Export strategy only at a later stage. So why should
a Company think of Export?
The first reason is market opportunity size. If we
consider only nearby countries, without going too far,
and consider their total population, that itself is
almost equal to the population of India. In other words,
market size of only nearby countries will double the
size of the market opportunity available. And
incidentally, regulatory aspects are comparatively
simpler in these nearby countries.
The second reason is market realization. Even in “not
very rich” nearby countries, product realization for
Medical Devices is better than that in India. This
higher realization very well covers extra expenses spent
for these markets. Transportation cost (by sea) to many
of these countries is lesser than domestic transport
costs if planned smartly.
The third reason is less competition. Outside India,
competition is generally lesser. This is one reason of
higher realization, of course.
Distances generally scare a common person. We always
think that Export means far off and distant markets.
However, on little consideration, one will find out that
Ahmedabad to Kolkata is comparable to Ahmedabad to
Dubai; and Delhi to Chennai is comparable with Delhi to
old CIS countries.
To summarize, factors like large market opportunity,
better realization, less competition, and reachable
distance go in favour of overseas markets. These are
reasons enough to include Export in the strategic
planning of a progressive forward-looking company.
The next step is the market selection.
How to select target Export markets
The common practice followed here, albeit wrongly, is
the herd mentality. Since a competitor is going to
market X, a company also decided to go to the same
market. In doing so, either we miss a better
opportunity, or we probably follow the mistakes done by
a competitor. Also, no readymade shortcut solution is
available here. A company must make its own independent
decision in this regard, and some simpler way of
decision making should be followed. One such suggestive
method is explained below.
• Decide the criteria or factors which are important for
Examples are Regulatory simplicity, Better realization,
Larger market size, Political stability, Initial
contacts available in a country, Language barrier, and
so on. This is a good list. The decision maker can add /
substitute some of these criteria.
• Give priority and weightage to these criteria, from
high to low. Total weightage should be adjusted to 100,
for ease of calculation.
• Consider countries of a sub continent or a
geographical area first for evaluation, and put them in
an excel table in the first column.
• Put criteria on top of the table and put weightage in
the second row (demonstrated below).
• Now start evaluating each country under consideration
after gathering some information, internet exploration
and using known sources of information.
A table will be ready which will be a good way of
selection judgement. An example is demonstrated below.
Please see the table carefully, including explanations.
This will clarify the basic methodology.
Evaluation of East African countries for Medical
||Political / Economical
||Ethiopia has highest population. (E 11
cr; Tanz 5.5 cr; Kenya, Uga 5 cr each)
||Based on web search and pers knowledge
||Taken as an example, assuming info
from known contact
||Assumed that the Co. has a contact in
Kenya, who can connect with Uga, Tanz
||Ethiopia not stable
It is clear from the table that Kenya is the first
choice. (The reader is, however, requested to consider
this as an example only, and not a recommendation.)
By changing criteria or weightages and by internal
discussions, a Company can easily derive a logical and
correct conclusion by this method (which is adopted from
some consultancy company models)..