By Ames Gross, President and Founder of Pacific Bridge Medical
This blog post was also published on MedTech Intelligence.
Most international medical device companies work with Asian distributors to sell their products in the local marketplace. Finding, qualifying, and signing up the right distributors is an important job since these distributors will sell your products locally. Too often, a medical device company will contact me saying they’re not happy with their current Asian distributor. While doing lots of due diligence prior to signing up an Asian distributor is crucial, another key aspect is who holds the registration.
Device companies selling in the Asian medical device market have three options with respect to their registration.
First, if they have an Asian office in that country and the appropriate regulatory people in-house, the company can register their medical devices on their own directly with the local Ministries of Health.
Second, you can have your distributors register your products (in this case in their name) and have your distributors be the local agents in each Asian country. While this is a relatively quick and cheap alternative initially (if the Asian distributor has a good in-house regulatory team), it could create problems down the road.
Every week, medical device companies contact me and say they’re having problems with their Asian distributors, and of course the distributors hold their product registrations and are their local agents. To transfer the registration to another supposedly better distributor will require that the medical device manufacturer either:
- Pays a large fee to the current distributor for a friendly transfer of registrations; or
- Asks the new distributor to re-register the products and go through the entire registration process again from the beginning. Your products will not be available on the market while they are being re-registered, and your competitors will claim you are an unreliable supplier, thus hurting your local sales.
The third option for registering your products is using an independent third party to register your products and hold the registrations in your name, not the distributor’s name. By doing this, you will have more control and can easily switch distributors as needed in the future. For medical device companies that can afford it, this is obviously the best way to go. However, you will have to pay for product registration and local agent fees on a monthly or yearly basis.
Given the above, what is the right course of action for a medical device company in Asia? If you are a small to mid-size company, you may want to choose and pay for local agents in the larger Asian markets, including Japan/China and possibly Korea/Taiwan. For the smaller Asian markets, make sure to sign up for the right distributors who have a highly qualified in-house regulatory team. The regulatory strategy a medical device company takes in Asia will depend on the size of the company and the size of the market for their specific products.