Purchasing and Pricing Each hospital will have established departments that decide the sell-in vo

Purchasing and Pricing

Each hospital will have established departments that decide the sell-in volume and payments for devices. For example, some hospitals may designate their logistics department to make these critical decisions. When a product is being presented for listing or bidding, tailoring the marketing of the product to the audience can increase chances of success. Thus, it will be helpful to research which department will review your product.

When introducing a product to a hospital in China, foreign medical device companies also may want to consider the number of inevitable markups that are added before the product reaches the consumer. In many instances, foreign device companies will need to collaborate with distributors because China’s regulations require that hospitals buy devices from authorized distributors. These distributors will require a profit for their services.

Furthermore, the hospital will increase the product’s price. The hospital’s contribution can be split into two parts: a bidding fee and a selling fee. After the bidding, the hospital usually will choose to increase the price. Hospitals often also increase the price further when finalizing the product’s selling price to the consumer.

Hence, when foreign medical device companies are deciding the price to the distributor, these additional fees should be taken into consideration in order to determine a competitive unit price. The distributor’s profit and the hospital’s two fees usually are calculated as a percentage of the bidding price. With quality market research, an appropriate bidding price can be determined.

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China’s hospital industry continues to grow quickly. The Chinese government’s healthcare initiatives are a strong indicator that this growth will continue for the rest of this year. As a direct result of this growth, foreign medical device companies can expect to have greater opportunities to sell their products in China.