As I have alluded on this blog before, the GCC states are pouring more and more money into health care infrastructure. It was only a matter of time before medical tourism became high on these countries’ agenda, and now plans are increasingly starting to take shape. There has been much in the news for the past years over the Cleveland Clinic Abu Dhabi which will soon be opened. But this center will have an increasing number of competitors in the market, with a slate of new facilities being introduced such as the new AED 3 billion Rashid Hospital development in Dubai which was announced in recent days.. What are the legal and business challenges to this new landscape for those seeking to take their wares into the region?
Here are two critical factors that come into mind for those who manufacture medical technologies seeking to sell in the region.
1. Exclusivity of Technologies and Brand Penetration. In a relatively small region flush with cash, it is to be expected that there is a high probability that there will be an overlap or redundancy of technologies and services. Companies bringing in foreign technologies (such as advanced medical devices) into the GCC may feel compelled to demand exclusivity rights for whatever they import, particularly pricey technologies that require high margins to be viable. For the foreign manufacturer or seller, the question becomes – if you have one bite at the apple (meaning the market) you should surely make sure your contract enables you to get out of a contract if the local partner is not up to par. Establishing benchmarks for sales, etc. can be one way to do this.
2. Service and Parts. Manufacturers and distributors should be very cautious to ensure that their equipment is serviced adequately. Otherwise, the probability of legal issues regarding warranties, etc. can be come problematic. Having trained local technicians can be a good first step – if you simply have a service arrangement with a local company, the chances of poor repair may increase, and this can increase liability, not to mention diminish the appeal of the product.
These are only a sampling of concerns that one may have. As with entering any market, healthcare is dicey and the MENA / GCC regions bring their own unique concerns.