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Mutual Issues See US and China Optical Firms Focus on South America

Complaints over mutual misunderstanding with regard to culture and compliance have driven US and Chinese companies to both target the more compatible – and rapidly growing – South American optical markets, particularly affluent Brazil.

Photo: Vision of the future: State-of-the-art ophthalmology States-side.
Vision of the future: State-of-the-art ophthalmology States-side.
Photo: Vision of the future: State-of-the-art ophthalmology States-side.
Vision of the future: State-of-the-art ophthalmology States-side.

Laser and plasma surgical instruments represented the cutting edge of cutting edges at this year's American Academy of Ophthalmology (AAO) 2014 conference and exhibition. At the same time, ever more sophisticated imaging devices were very much in evidence, all designed to make ophthalmic procedures safer and faster.

Overall, trading conditions in US remain tough, thanks in part to an ever-changing and increasingly complex regulatory system, stiff competition and the need for US medical professionals to justify all expenditure in a profit-driven market. Helping American ophthalmologists work faster, minimise recuperation time through less invasive procedures and improving the patient experience, then, proved this year's major preoccupations.

Acknowledging the singular challenges of the sector, Joe Vetre, Vice President of Sales and Marketing for Volk, the Ohio-based lens manufacturing group, said: "The US market's completely different to any other. Everything is financially-driven. It's a unique piece of the healthcare globe.

"Everything has to have a return on investment, everything has to have a formulaic approach as to how the physician will be compensated for his time, his energy, his investment in instrumentation. It's completely unique in the global healthcare market."

R Brent Miner, US Business Development Manager for CSO, a Italian medical optics manufacturer, also sees the US as a discrete market, saying: "In the US, distribution is different to anywhere else. The market is much larger, so rather than have a dedicated distributor for a particular company, you wind up with either a master importer or with multiple distributors covering the market.

"But distribution isn't so much the obstacle – it's more the issue of registration with the various agencies, such as the FDA and similar agencies around the world. The US regulatory environment is a little more onerous than Europe, but not as difficult as China or Japan."

David P Gurvis, President of Marco, a Florida-based vision diagnostic equipment manufacturer, believes that ever-changing regulations have a real impact on the bottom line. He said: "At a macro level, there's been a lot of compliance, a lot of new rules that these doctors need to work on. I think that there's a lot of energy being spent just getting into compliance and maybe not as much on buying new equipment and running the practices.

"I think things like the Sunshine Act make it more difficult. It's basically a US government regulation that dictates how companies, suppliers and manufacturers deal with doctors, primarily focussing on the reimbursable.

"So you have to disclose to the government – but ultimately it will be known to everybody – if doctors are getting paid or if they're getting anything free from a company. I think it's a mix of good and unintended consequences."

CSO's Miner also noted the effect on business of these changing regulations. He said: "The Affordable Care Act is having an impact. Doctors are still coming to understand what it really means. In some instances, it has caused people to hesitate, so you have to see how that rolls out. I guess we have to wait to see what it really turns into."

Chinese manufacturers at the exhibition also reported difficult business conditions in the US, albeit for different reasons. Ian Zheng, a Manager with Shanghai Eder Medical Equipment Co Ltd, a Shanghai-based medical microscope manufacturer, said: "In China, we have the second largest market share in the surgical microscope field, but we're only famous in China.

"The US customer, though, is focussed on branding and reputation. They're willing to pay more. That's why we're here – to let them know that we offer equal quality to worldwide famous companies, but it's a lengthy process.

Photo: Capsulotomy equipment from Medisurg.
Capsulotomy equipment from Medisurg.
Photo: Capsulotomy equipment from Medisurg.
Capsulotomy equipment from Medisurg.
Photo: Medical microscopy courtesy of Shanghai Eder.
Medical microscopy courtesy of Shanghai Eder.
Photo: Medical microscopy courtesy of Shanghai Eder.
Medical microscopy courtesy of Shanghai Eder.

"The business customers we're talking to at this exhibition are mainly from Spain and Brazil, but not many from the United States. I think AAO can give us a bridge to the Brazilian, Mexican and South America buyers, largely because their markets are similar to the Chinese market."

Another Chinese exhibitor at the show, the Hangzhou Mule Tech Co Ltd, also found the US hard going. Once again – according to the company's Chief Executive, Deji Cheng – it found greater interest coming from South America. He said: "The main point for us in being here is to find potential partners and distributors. To that end, there has been some interest from Peru and Mexico.

"The US market is the most strict. If you want to sell in America you need to get certification from the FDA. That is the most important issue."

It would seem that Chinese and American manufacturers have similar experiences when it comes to finding each others' markets difficult, although each both are seeing great potential in South America. Assessing the changes taking place in the Chinese market, Vetre said: "The Chinese government is making it much more difficult to conduct business over there from a regulatory perspective.

"The market was something of a wilderness, chaotic for a long time. Now they're trying to get their house in order. It's become cumbersome, but there are other markets through out the world that have gone the same way.

"China has probably been our primary expansion market, but there are other areas – notably Brazil – where there are huge expansion opportunities. Brazil's the shining example, but Argentina, Peru, Columbia… There are a lot of other territories where we've made great strides by making an investment in staff."

As well as regulatory difficulties, one of the other major talking points at the exhibition related to reducing the invasiveness of surgical procedures. This has the benefit of reduced patient recuperation time, which improves productivity for the profit-driven US medical industry. Advances in the femtosecond laser, micro invasive glaucoma surgery, and also vitreolysis, were also common talking points among delegates.

In line with this, the Medisurg Research & Management Corporation of Pennsylvania was attending the show to promote its innovative range of surgical instruments. Dawn DelCampo, the company's Vice President, said: "We make devices for plasma ablation for cataract surgery and glaucoma. We're in an emerging technology sector, there's nothing else on the floor that can do what we can.

"We have an instrument that's able to go in and ablate, as opposed to tearing. If there are tears in a capsulotomy, for example, we can go in and stop the tears by making ablations in front of and behind the tear that prevent further injury. We don't need any dyes, unlike conventional scalpel surgery. It's very user-friendly.

"The glaucoma procedure that we have is also much quicker for the surgeon to perform. It's also much more comfortable for the patient after the surgery, with the post op-chair time being considerably reduced."

Another innovative product on show was a new 3D surgical imaging system, courtesy of Germany's Leica Microsystems. Rob Thomson, Marketing Manager for the company's medical division said: "3D imaging has been around for a while, but mainly as a teaching tool. This is the first surgical system that can be used on a daily basis.

"The main benefits to the surgeon are safety and speed, as it enables everyone in the OR to see what the surgeon sees in real time. The system was developed in partnership with TrueVision, who provided the 3D technology, while we provided the microscope end."

Photo: Leica: Delivering 3D-surgical imaging.
Leica: Delivering 3D-surgical imaging.
Photo: Leica: Delivering 3D-surgical imaging.
Leica: Delivering 3D-surgical imaging.

The AAO Exhibition and Conference 2014 took place at Chicago's McCormick Place on the 18 to 21 October. Over 500 exhibiting companies from North and South America, Europe and Asia presented the latest in ophthalmic technology to more than 20,000 delegates from across the world.

James O'Donnell, Special Correspondent, Chicago

Content provided by Picture: HKTDC Research
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