The biggest reason is that the regulatory process in the U.S. has gotten too unwieldy and slow, putting U.S. manufacturers at a disadvantage on their home turf, according to one of the authors of the Pricewaterhouse report, titled the Medical Technology Innovation Scorecard: The Race for Global Leadership.
“This is where the U.S. has lost significant ground over the last five years,” says Christopher Wasden, a Pricewaterhouse managing director. He says the Food and Drug Administration takes twice as long to approve a device, yet the data indicate that U.S.-approved devices are not any safer.
The FDA suffers from high turnover—which leads to inconsistent treatment of devices by the regulator—and focuses too much on whether a device is better than what is already available—a decision that in Europe is made by payers, Wasden says. Also, the FDA takes a stance that it should be deciding how doctors practice, again contrary to how Europe's regulators do it, he says.
When the Chinese asked Pricewaterhouse officials how they can be more competitive with its regulatory structure, they told them to use the European model, Wasden says. The U.S. healthcare industry already imports heavily from China, with hearing aids ranked No. 1 by dollar value in 2009, according to data from the Advanced Medical Technology Association.
While the U.S. saw a 20.8% increase in medical exports to China from 2008 to 2009, America already is a net importer in medical goods from China, having imported $2.3 billion worth of medical goods in 2009 and exported $1.3 billion, according to AdvaMed (See chart).
Even more competition could be coming. A medical industry trade center under development in Nashville is planning to include a 10,000-square-foot pavilion devoted to China-based companies, according to Market Center Management Co., the Dallas-based developer of the Nashville Medical Trade Center.
Huida Investment Management Co., Beijing, which is developing that pavilion, is “putting together a very large group of companies from China to tour the site,” says Bill Winsor, president and CEO of Market Center Management. “There's been a lot of interest among the Chinese,” Winsor says.