Oesterle on China's medical profile:
There's an incredible gradient of heart disease between Harbin down to Guangzhou. There is 10 times the amount of heart disease in Harbin. So there are obviously some environmental issues. One interesting thing is that people are living longer in China and since we're in the business of treating chronic degenerative diseases, the market will necessarily grow for us here as the standard of living increases. As people live longer, they encounter a series of degenerative diseases, whether it's degenerative spine disease, diabetes, cardiovascular or neurological disease.
On device fakes:
The barriers to entry for our products are pretty huge. For example, the implantable pacemaker defibrillators – these are computers basically with integrated circuits, programmable software, telemetry, radios and so on – it's a complicated product to make.
On China's different markets:
We have a portfolio of therapies so our markets are different for every one – for deep brain stimulation, the market is probably defined by around 20 hospitals – as opposed to the market for angioplasty products, which might be 100, or 200 hospitals. Spine surgery and valve surgery, realistically, probably go on in big scale at 30 or 40 hospitals. Except for diabetes, most of the things we do are implants, so these necessarily occur in pretty sophisticated, top-tier hospitals.
On payment infrastructure:
It's not enough to show that devices work, you have to demonstrate they also save the system money. Proving the cost benefits must occur in the context of where you're using them – Switzerland may be very different from Shanghai. The question is not whether [a device] works, but whether it is worth this upfront cost. So infrastructure really begins by looking at these cost-benefit stories to sell not just to physicians but to government.
Victor Tsui on pay-offs:
This is a very complex market and obviously it has physicians asking for money. But there are a lot of legitimate requests – sponsorship for conferences, sending physicians for training, fellowships – and we have done a lot of that because this market needs a lot of that training and exposure to the latest technologies. But pay-offs are absolutely not allowed.
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