Picker focuses on distributors in building Asia-Pacific business

July 13, 1994

China licensee assembles CT for local sale Picker International is accelerating efforts to build its Asia-Pacificbusiness through both targeted products and nationally focuseddistribution and licensing agreements. The Cleveland medical

China licensee assembles CT for local sale

Picker International is accelerating efforts to build its Asia-Pacificbusiness through both targeted products and nationally focuseddistribution and licensing agreements. The Cleveland medical imagingvendor has seen its effort pay off, with Asia-Pacific revenuerising about 20% in fiscal 1994 (end-March) over 1993, accordingto Christopher J. Peabody, senior vice president for internationaloperations.

"Our business in this region has been growing steadily,"he told SCAN. "It is becoming an extremely important segmentof our total business."

Picker operates two offices in the region, one in Singaporeand one in Hong Kong. The vendor doubled the number of directemployees in the region over the past several years from 12 to25, Peabody said.

Given the diversity of Asia-Pacific markets, Picker opted toapproach each country through partnerships with local groups ratherthan a centralized direct sales approach, he said.

"Asia-Pacific is made up of a large number of very separatemarkets," he said. "We don't know everything that needsto be known in each of these markets. So we have chosen localrepresentation through a good distributor in each market, whoknows the people and customs. It is our job to support that distributorwith products and training."

Picker introduced a new mid-tier CT system, the PQ-S, at theInternational Congress of Radiology meeting held in Singaporein January. Picker chose to debut the system there rather thanbring it out at the larger Radiological Society of North Americaconference a month earlier.

"It (the PQ-S) was designed for world markets where peopleneed the clinical benefits of spiral but really can't afford thetop-of-the-line models, like our PQ 2000," Peabody said.

In MRI, the vendor is using its Picker Nordstar joint venturewith Instrumentarium to capitalize on regional demand for low-costnon-superconducting MRI systems, which don't have cryogen requirements,said Timothy J. Rocco, director of the Asia-Pacific region forPicker.

"There is demand (for low-field MRI) particularly in developingnations, such as Indonesia and China, where cryogens are veryexpensive and hard to get," he said. "On the other hand,areas like Singapore and Hong Kong are high-end markets. Theylook for 1- and 1.5-tesla systems."

Despite low per capita proliferation of MRI, the sheer massof the Chinese market gives it the predominant position in installedMRI systems outside of Japan. Although much of the MRI equipmentin China is old and unreliable, it makes up about half of theregion's 400 or so MR scanners installed outside of Japan, Roccosaid.

CT demand regionally is about 10 times the size of the MRImarket, Peabody said. The vendor has two CT partnerships in China:

** Ambient, a Beijing-based distributor; and

** 3H, a unit of Guangdung province's Academy of Sciences,which has licensed Picker CT technology for local assembly anddistribution.

Creative purchasing. Some Chinese hospitals, freed from strictcentral government control, are developing innovative approachesto scanner purchasing, Rocco said. One Picker customer used fundsfrom its employees' credit union to finance a scanner purchase.While the plan was to pay back its employees in three years, thehospital was successful enough to repay in half that time.

"Before, they (the hospitals) might have been told whatto buy through the Ministry of Health," he said. "Now,they really look at technology, pricing, delivery and support.It is a very capitalistic approach to purchasing."

Chinese hospitals are reimbursed per procedure, he said. Thiscan prove quite profitable in high-volume situations.

"In the U.S., a busy department might do 20 to 25 patientsa day. The scanners in China do 50 to 70 patients a day,"Rocco said.

China has many radiologists, and most can use the help of vendorsin providing continuing education, he said. Picker has workedwith the Chinese Radiology Society to present symposia on bothMR and CT technology, including a spiral CT session in Beijingand an MR presentation in Canton.

While China has the largest potential for scanner sales inAsia-Pacific, Japan remains the biggest market. However, Japanesescanning volumes may be declining in some modalities, Peabodysaid.

"Japan is still a huge market, but it can be characterizedas flat," he said. "China is the fastest (growing inthe region)."

With slow growth in Japan, vendors must vie for market share.Picker was not very active in Japan until two years ago when itsigned a nuclear medicine distribution agreement with Shimadzu.Since then, it has gained a 30% share of the Japanese nuclearmedicine market, Peabody said.

Regionally, however, nuclear medicine is not a strong modality.Its use has been hampered in many parts of Asia-Pacific by a lackof trained specialists. The training gap is exacerbated by unevenaccess to radiopharmaceuticals, Rocco said.