How to build internationalization strategy for HealthTech
Essential factors to consider when drafting an internationalization strategy for healthtech.
In an ideal case, the internationalization has been integrated right into the R&D process, because the target market may encompass cross-cultural and cross-national aspects that need consideration in the design phase.
In most cases, companies opt to localization approach that seems more robust solution but could cause some design alterations afterwards.
Another reason to choose your target market as early on as possible is to implement regulatory requirements into the R&D process by aligning them where applicable.
In other words, it underscores the fact that knowing, understanding and researching the target market is the key-step when expanding to another country.
Once it is clear that the device, application or product fits into the target market, it is time to assess if there is a demand for it and how attractive the market is considering the competition.
Internationalization Starts with a Strategy
It is a known fact that most internationalization attempts fail due to lack of thorough preparation and adhering to the chosen strategy.
When it comes to life sciences – healthcare technology, biomedical technology and pharmaceuticals – that is an industry operating in a heavily regulated environment, any attempt to seek market growth through internationalization faces a multitude of specific considerations.
Localization to specific markets is essential in internationalization.
One of the essential aspects when analyzing the potential market is to understand the external environment or business operations and those advantages and disadvantages it has compared to home-market. After all, this is the most substantial deviation of operations so far.
Legislations do Differ
Every country has its laws and regulations that need to be adhered to and preparing for the regulatory requirements is a must and best made with someone who understands the local legislation and human factors process. The need for clinical trials should be taken into consideration when navigating through the regulatory process. The one thing that some companies do not pay enough attention is the IP protection strategy that needs thorough planning with the local legal system in mind.
For reimbursement strategy, it is essential to understand how the healthcare system works. How much is healthcare spending, and what is the role of the government and insurance companies? How much is paid by the government and how much is covered by the insurance? How much is the compulsory insurance and how much is paid out-of-pocket by the patient? Who decides on the treatment? The physicians or the insurance company who pays the bill? In some countries, the reimbursement landscape can be very complicated due to the fragmented healthcare system and medical device distribution, including invoicing.
Business Models and Partnerships
When considering appropriate market entry strategies, adapting the business model to the environment is an iterative process where market fit, distribution and partnerships are some of the factors to consider. Also, what are the required skills and resources needed for successful business operations and is there a need to relocate workers or hire locally in critical positions? Modifying the business model may take considerable time as it involves many managerial questions, including R&D and Know-How against IPR infringements.
“Appropriate partnerships are the key” for successful internationalization, and it will also influence the business model, so taking time to do a thorough research of the key-players will pay back subsequently when creating a supply chain management system. One of the most important aspects of partnerships concerns distributors, with whom discussions also need considerable attention in terms of the trust of business operations. It is worth noting that all of this will influence the import and export operations in terms of manufacturing and financial issues.
Although building an appropriate strategy for internationalization of healthcare technology is dependent on the device, application or product as well as the target market, this outlines those aspects that are essential for building an effective strategy. Even if not all of the above applies to a specific case, they should nevertheless be taken into account when drafting up plans.