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“One size does not fit all. That is sort of the operating norm here,” Phalen said. “When you come into a market, distributors may have already hitched their relationships to other companies. Then, you have to develop new distribution channels. That changes by the year and the country. Flexibility is the key term here.”
Of course, a major element to overseas growth is reaching more patients, said Supratim Bose, a Boston Scientific executive vice president and president of the company’s Asia-Pacific, Middle East and Africa businesses.
“The question of emerging markets is and has been and will always be about creating the capability to serve more patients,” he said, noting that each market is substantially different.
In some markets, that means getting products to the people who can afford them — a growing middle class in China and India, for instance. In others, it means finding the right product to fit a market’s need and ability to pay. In many, it means building capacity.
Interventional cardiology, for instance, needs cath labs — where doctors perform an angioplasty and implant a stent using less-invasive catheters. Medical technology companies have helped develop 2,000 cath labs in China, although more are needed there and in many other countries.
In some places, it means overcoming long-standing patient fears of medical devices, Bose said. “We have to go step by step in most of the markets in some ways,” he said.
Wang said it takes a long-term commitment to cultivate foreign markets. In addition to training physicians, companies must work with regulatory officials, hospital administrators and key health care policymakers — as well as other companies and trade groups — to continue growing. “To create a market, you have to set up the right policies,” he said.
Tim Nelson, a former analyst with Nuveen Asset Management and Piper Jaffray & Co., said he agrees that it takes a long-term investment to see significant growth in emerging markets. He said he doesn’t doubt that Boston Scientific will reach its 15 percent goal — over time. But, at a time when the company still is working to lower costs while developing its product pipeline, Nelson said it doesn’t leave a lot of room for additional investment.
“That takes a while,” he said. “They really have to have the overall financial flexibility to afford that, and Boston Scientific has not had that in the past. And I am still not sure that they do.”
James Walsh • 612-673-7428