U.S. Government Helps Device Firms Access China's Healthcare Market

The U.S. Trade and Development Agency will travel to China later this month as the first step in facilitating a new partnership involving U.S. health care companies, the U.S. government and China's government.

The public-private partnership on healthcare was announced Jan. 19 in conjunction with China President Hu Jintao's visit to the U.S. It aims to combine the strengths of U.S. healthcare companies and the U.S. government to foster long-term cooperation with China in the areas of research, training, regulation and health care services (Also see "Chinese President Pledges China Will Not Discriminate Against U.S. Businesses; Broad Healthcare Partnership Unveiled" - Scrip, 21 Jan, 2011.).

Currently, 12 U.S. companies and six supporting organizations are participating in the partnership, including device makers Abbott, General Electric, Johnson & Johnson and Medtronic, plus device industry association AdvaMed.

They are joined by USTDA, the Department of Health and Human Services and the Department of Commerce, and China's ministries of health and commerce.

U.S. health care firms, including several medical device makers, approached USTDA to request assistance in forming a public-private partnership on health care in China. The agency has already facilitated two successful public-private partnerships with China in the aviation and energy sectors.

"We're the convener; we bring everyone together," USTDA Director Leocadia Zak said in an interview. "We're the catalyst to get this started."

Geoffrey Jackson, USTDA's regional director for East Asia, stressed the collective power of industry and government working together. "We're trying to create a framework in which the government, working with the private sector, can help facilitate more work than otherwise could be done by individuals working independently," he said.

Benefits To U.S. Healthcare Firms In China

China's healthcare market is burgeoning with the country committed to spending $124 billion over three years to expand health care access, broaden insurance coverage, enhance health infrastructure and expand coverage into Western rural areas (Also see "China Signals Need For Private Investment To Support Its Healthcare Reforms; Private Insurance Options Likely To Widen" - Scrip, 16 Dec, 2010.).

"China has been looking at the U.S. markets to help them forge their modernization plans in the healthcare arena," Jackson said in an interview. "We feel the U.S. has a lot of good experience to share. The idea is to identify those areas where we can complement one another well."

U.S. companies are keenly interested in seizing the opportunities offered by China's reform efforts. But they have told USTDA they need help with capacity building in China, Jackson said.

"American companies recognize that investment decisions will not be made unless China has the capability to really adapt the technology to the Chinese environment. We have to work very closely with the Chinese and respect their system and try to provide as much information to both our countries," Jackson said. "We want to help the Chinese advance their investment decisions in a way that is good for them and good for us."

The partnership will enable U.S. businesses "to sit down at the same table with their Chinese counterparts," Zak said. In the past two USTDA public-private partnerships, she said, the U.S. companies gained "a better understanding of the market in China and were able to develop relationships as a result of working together, which has resulted in increased U.S. exports."

Another beneficial outcome of the previous partnerships has been the formation of strategic alliances between companies. "We found that by strategically partnering in some areas, they got a bigger bang for their buck," Jackson said.

Sharing Of Best Practices In Healthcare

Jackson said the USTDA will sit down later this month with Chinese officials and participating U.S. company executives to begin planning the program, which officially begins in May. Then in March or April, Chinese healthcare professionals will visit the U.S. to share best practices and see innovative technologies important to healthcare delivery.

Over time, the federal agencies hope the partnership will improve cooperation between the U.S. and China in areas including rural healthcare, emergency response, personnel training, medical information technology and management systems, and exploration of integrative and traditional Chinese medicine.

The partnership is funded in small part by the U.S. government, with the vast majority of funding coming from U.S. private industry, Zak said.

USTDA hopes the partnership on healthcare will evolve and be sustainable, the way the other two partnerships have. The partnership on aviation was started in 2003 and has grown from 10-12 companies to 54 member companies, with a full-time secretariat that works in Beijing, Jackson said.

Every day since the announcement of the new healthcare partnership, USTDA has received requests or inquiries from companies asking how to participate, he said.

"We're very much interested in trying to corral as many American companies that want to participate with us in the advancement of this effort. The Chinese welcome it because they are always seeking new technology and know-how, and joint ventures with American companies. This is very much in our trade interest."

Rebecca Kern ( [email protected])

[Editor's note: This story also appeared in 'The Gray Sheet' , Feb. 7, 2011.]