Posted at 4:58 PM
Thank you, Sandra, for the kind words and your leadership on our District Export Council. It’s great to see you again.
Tom, thanks so much to you and your team for working tirelessly with colleagues from the Midwest Network, our Export Assistance Centers across the country, and specialists in our Industry and Analysis bureau in Washington to put together such a fantastic event.
This event is well timed. Just last week, I was in China for the Asia-Pacific Economic Cooperation summit. While we were there, my team had the opportunity to participate in the opening of Advamed’s new office in Beijing. The pace of change happening in China is always astounding to me. Just look at the medical device market – China has grown by leaps and bounds in just a few years, becoming the fourth largest market in the world.
Overall, health care spending in China is expected to reach a whopping $890 billion a year by 2017, according to a Deloitte study. With the world’s largest population, continued prospects for robust growth, and an aging middle class population demanding more health care, China is clearly a market worth a lot of attention from U.S. companies.
And just a few weeks ago, Secretary Pritzker led a healthcare and energy business development mission to Japan and South Korea. Japan has a $153 billion market for medical and healthcare products, and South Korea’s total market for drugs and medical device products combined is roughly $21 billion. It’s clear from these trips that U.S. businesses are well-positioned to provide innovative health care solutions in all of these countries – and the United States government wants to help.
Now, I want to tell you about a company called Varian Medical Systems. Varian manufactures medical devices and software for treating cancer. They wanted to expand their exports and become the supplier of choice in select emerging markets – so they reached out to us about working with the Brazilian government. Our team, with the help of then-Ambassador Shannon, helped Varian secure a contract with Brazil’s Ministry of Health for 80 linear accelerators to be used in radiotherapy treatments for cancer patients – one of the largest linear accelerators sales in history, with a contract value of approximately $55.5 million.
Varian’s win is a big deal, but it’s just part of what we do every day at the Department of Commerce to help American businesses succeed abroad. The fact is – other countries want our goods.
U.S. leadership in medical technologies is widely recognized – and we are the world’s largest producer and exporter of medical devices. Last year, our medical device exports were conservatively valued at more than $42 billion. U.S. production of medical devices alone now well exceeds $130 billion in a global market valued at more than $300 billion. In addition to leveraging medical research, the U.S. medical device industry incorporates and commercializes advances from other sectors, including telecommunications, advanced materials, biotechnology, and pharmaceuticals, to spur further innovation.
In even better news, the global demand for our products is growing exponentially. Overall, the global health IT industry is expected to reach $250 billion next year, according to the World Bank. The healthcare market in India, for example, is developing rapidly and expected to reach $160 billion by 2017. Turkey is another growing market for medical technologies and healthcare services. And Brazil is one of the world’s largest pharmaceutical markets.
U.S. healthcare and life sciences sectors are seen as the world’s leading source of cutting edge products and services – and in these markets and others, there are tremendous opportunities for U.S. companies.
Over the past few decades, innovative life science products allowing for earlier detection of diseases and more effective treatments have changed the landscape of the healthcare sector, both domestically and abroad. Foreign governments are realizing that increased healthcare expenditures and simplified regulatory approval processes can provide wider access to innovative medical products and technologies, producing broad societal benefits.
Our message to these countries is this: U.S. companies are ready and able to help your governments improve health treatments, health maintenance, and overall health outcomes.
Beyond medical devices, there are a number of areas where the U.S. is well positioned for growth. In pharmaceuticals, U.S. firms conduct the majority of the world’s research and development and hold the intellectual property rights on most new medicines, according to PhRMA. The biopharmaceutical industry, one of the most R&D intensive in the world, currently has over 5,000 new medicines in development across the globe and supports more than 3 million jobs across the U.S. economy.
Health IT is another opportunity for U.S. companies reaching beyond our borders. Digitization of health information – a process already underway for several years in the United States – is now taking place overseas. Other countries are looking for the kinds of innovative solutions for exchanging information and data on treatment and management of health conditions being developed and deployed here, making Health IT a sector with great export promise in the coming years.
Helping American businesses take advantage of new export opportunities is one of our top priorities at the Department of Commerce. Early in his administration, President Obama created the National Export Initiative – or NEI – to spur economic growth and job creation. The program has been a remarkable success with four straight years of record high exports. Last year, after reaching out to customers, we introduced a revamped strategy called NEI NEXT, with five goals in mind: To help businesses find their NEXT customer abroad; To increase the efficiency of a company’s first and NEXT shipment; To help firms finance their NEXT order; To help communities integrate trade and investment into their NEXT growth plans; and to open up the NEXT big markets around the world while ensuring a level playing field.
Central to meeting the goals of NEI NEXT is a series of steps to strengthen our hand in trade and in global markets. Working with Congress, the U.S. Trade Representative, and industry, our practical and immediate tasks are clear. We must reauthorize the Export-Import Bank – a critical tool that better enables U.S. companies of all sizes to compete overseas. We must work with Congress to pass Trade Promotion Authority – to empower the President to move forward on high-standard, broad-based regional agreements like the Trans-Atlantic Trade and Investment Partnership and the Trans-Pacific Partnership that will expand exports, grow our economy, and create good jobs. We must make the case that free trade agreements can offer enormous benefits, especially for small- and medium-sized enterprises looking to tap into new markets.
In addition to our international efforts, the Department of Commerce is working hard here at home to help American businesses succeed abroad. We do strategic market research and promote trade and investment opportunities for U.S. manufacturers and investors. For example, our Office of Health and Information Technologies in the International Trade Administration is in the process of developing a Health IT Top Market Study for release in 2015. We have export assistance centers in 100 U.S. cities – including right here in Minneapolis – to help local businesses find and analyze markets where their goods and services are competitive. Our Foreign Commercial Service Officers promote the export of U.S. goods and services, attract foreign investment into the United States, and defend U.S. commercial interests abroad in more than 70 embassies and consulates throughout the world. And ITA’s Advocacy Center promotes U.S. companies bidding on foreign tenders against international competitors.
Another way we serve American healthcare and life science companies is through high level vertical trade missions. We are currently planning 3 upcoming missions to areas where there are growing needs for U.S. medical products and services: the Philippines and Indonesia; Kenya, South Africa, and Mozambique; and Egypt, Jordan, and Israel. Information about getting involved with these trips is included in your information packets. I also recommend checking out our Healthcare Technologies Resource Guide, which outlines opportunities and regulations for your products in international markets.
We have many members of our Global Markets team with us here today – including representatives of our Commercial Service, our Office of Health and Information Technologies, our Advocacy Center, and our Enforcement and Compliance unit – along with healthcare specialists from all of the foreign markets I mentioned earlier. They are all here to offer counsel and assist you with any specific issues your companies may face overseas.
Minnesota companies like Medtronic – the world’s largest medical technology company – and Pepin Manufacturing – a leading manufacturer of medical electrodes – have used our services to expand their presence in the global marketplace. I hope anyone in this room who isn’t already using the vast resources of the federal government to help you expand abroad will consider reaching out to us.
Our central task is to serve you – to help you export more goods, to help you find and navigate new markets, and to help you expand your global customer base. The Department of Commerce is a customer services organization at its heart, and you are our clients.
We are always open to suggestions on what we can do better to help your businesses grow, prosper and create jobs. Industry stakeholders have the opportunity to provide their views on priorities and problems through various mechanisms like the President’s Manufacturing Council and the Strategic Partnership Program, which leverage partnerships with trade associations and private companies.
We welcome your participation on our Industry Trade Advisory Committees, which Commerce jointly manages with the U.S. Trade Representative. And we also engage with industry through the Market Development Cooperator Program, which provides assistance awards of up to $300,000 each year to industry non-profit groups to pursue projects that help American companies export and create jobs.
I’ll just close with this: ninety-five percent of the world’s customers live beyond our borders. The healthcare and life science products and services your industry provides can enhance the health and welfare of citizens throughout the world.
The Commerce Department is committed to keeping the U.S. manufacturing sector innovative and competitive – and to helping you find new global opportunities, which will benefit your companies, your customers, and our country.
We look forward to working with you to bring your businesses and your products to the world.