M4.3 Discussion Exporting and Economic Political Systems

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Excelsior University *

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435

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Medicine

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Feb 20, 2024

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docx

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Uploaded by JudgeDolphinMaster506

Class, For this discussion, the two countries that I have selected to research and provide information on to better suit the firm to launch its medical product internationally are China (non-democratic) and Indonesia (democratic). To determine the economic and political climate for your business venture. Analyze how the economic and political environment would impact the potential success of your product expansion. What might aid the expansion's success? What might hinder it? China (non-democratic): China's health care business is booming. Due to longer lifespans, chronic diseases, and more disposable income, rehabilitation medical technologies are in high demand. China's medical rehabilitation industry is predicted to generate $14.4 billion by 2023, growing over 18% annually. Due to China's vast population and demand for improved healthcare, the government seeks to improve it. The end of 2019 saw 254 million Chinese over 60, 18.1% of the population. The group will have 300 million members by 2025. Chinese government figures show 300 million individuals have long-term ailments and 30 million 0-15-year-olds need rehabilitation. These realities necessitate therapy, daily living, mobility, and bodily assistance devices (ITA, 2021). These data will aid the medical equipment product's Chinese launch. U.S. goods are also considered the highest-quality and most technologically sophisticated by Chinese hospitals, which has increased sales. Nearly 75% of US sales come from large state hospitals. The rising Chinese market offers several opportunities for U.S. enterprises (ITA, 2019). State hospitals in China will pressure the corporation to decrease pricing, which will hinder product spread. Other issues will arise from healthcare issues. Both the national and city governments of China have strong health care regulations. Uncertain regulatory regimes and significant wait periods for registering and reregistering items are obstacles. Price regulations, tenders, and bar code systems also slow company entry into the Chinese medical sector. Healthcare reforms have created new commercial opportunities, but not to all international corporations. The Chinese market is large, but U.S. companies entering there confront many challenges. Strict price and reimbursement laws, insufficient intellectual property protection, and long registration times make selling medications and medical equipment difficult. Changes in regulations make it harder for U.S. firms. Finally, in July 2018, China threatened 10%–25% tariffs on U.S. exports such medical devices (ITA, 2019). Indonesia (democratic): Indonesia is expected to have 275 million inhabitants in 2021, making it the fourth most populated nation overall. According to Statistics Indonesia, the government-run social and economic survey agency, 17.9 million Indonesians were 65 or older in 2020. Indonesian seniors are predicted to increase by almost 40% by 2025. It will be one of Asia's oldest nations. This will have a major impact on the economy and society, particularly health care. Indonesia, the fourth most populated nation, is a terrific area for U.S. medical device and equipment firms to flourish. The foreign introduction of medical equipment in Indonesia will benefit from these figures as it grows. Indonesia's national plan prioritizes healthcare, and the central and provincial governments are creating and improving healthcare facilities. Indonesia now has 2,925 hospitals: 1,071 public and 1,854 private. More people know how vital health care is, more public and private hospitals have opened, and Indonesia's "BPJS-Kesehatan" (Jaminan

Kesehatan Nasional, or JKN) public health insurance system began in 2014. Modernized medical gadgets are needed due to these modifications (ITA, 2021). Depending on the type, medical equipment must pay 5% to 30% more in import taxes for growth- limiting issues. This is in addition to 10% VAT. In 2014, Indonesia created an online catalogue for public health insurance medicinal products. This will cause foreign relations issues. Lembaga Kebijakan Pengadaan Barang/Jasa Pemerintah manages the e-Catalogue. The system lists thousands of medical equipment and hundreds of medications. This lets public and private hospitals and clinics buy medical equipment at a predetermined price without national or hospital bidding. The e-Catalogue portal can help U.S. businesses sell quickly. Businesses must negotiate pricing with the government to be in the e- Catalogue, and it's unclear how. Prices are usually discussed using a set range based on a multiple of the import transfer price. The price conversations ignore the cost of training local healthcare staff professionally. Due to this, e-Catalogue prices are cheaper than private health insurance prices (ITA, 2021). Of the two countries that you researched, which will you recommend to your medical equipment company for their proposed international expansion? As mentioned, each country has its unique strengths, weaknesses, possibilities, and risks when marketing a medical equipment product globally. China has a higher economic advantage than Indonesia and both nations charge high medical equipment tariffs, but the political climate makes it tougher for the corporation to meet its profit goal. Companies must navigate a complex healthcare organization network to register a product in China, which is complicated and time-consuming. After sending in papers and test samples, the process can take one to three years, depending on the product. The most essential thing is that hospital buyers frequently favor local enterprises (ITA, 2019). Problems will be less stressful and the product will spread faster than in Indonesia. Indonesia imports many medical goods and tools for local needs. Product registration, import permits, and logistics of getting gadgets into the country and selling them are best handled by a local distributor for most U.S. corporations. The Indonesian Ministry of Health (MoH) registers home medical equipment and supplies. In Indonesia, FDA-approved U.S. products are usually fine. To gain market share, U.S. companies must compete on quality, safety, efficacy, and post-sale service for new goods. Indonesia offers a large market for medical device and equipment manufacturers. This can also improve care in Indonesia (ITA, 2021). Due to its low political instability, Indonesia is the greatest place for the corporation to begin its worldwide expansion. Jerrell References: International Trade Administration. (2021, June 6). Market Intelligence. China and Hong KongMedical Equipment. Retrieved 19 July 2022, from https://www.trade.gov/marketintelligence/china-and-hong- kong-medical-equipment International Trade Administration. (2019). Healthcare - China. Healthcare Resource Guide. Retrieved 19 July 2022, from https://www.trade.gov/healthcareresource-guide-china

International Trade Administration. (2021, September 9). Indonesia - Country Commercial Guide. Healthcare (Medical Devices & Equipment). Retrieved 19July 2022, from https://www.trade.gov/country-commercial-guides/indonesia-healthcare-medical-devicesequipment

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M4.3 Discussion Exporting and Economic Political Systems

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