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Medical device makers
urged to rethink Saudi
distribution models, report
says
(RIYADH)
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International medical
device manufacturers may
need to take greater control
of strategic accounts,
tendering, pricing, service,
and market data in Saudi
Arabia while retaining local
distributors for execution
and reach,
according to a new report by
Eurogroup Consulting.
The whitepaper,
Own It or Outsource It?
Finding a Smarter Way to
Distribute Medical Devices
in KSA, says the
traditional model of
appointing a distributor,
completing product
registration, and managing
tenders from a regional
office remains appropriate
for some portfolios, but is
under pressure as healthcare
procurement becomes more
complex.
Purchasing
decisions increasingly
involve clinicians,
biomedical engineers,
procurement and finance
teams, hospital clusters,
and centralized purchasing
channels such as
NUPCO, the
report says. Local-content
requirements are also
becoming a more important
consideration in government
procurement.
The changing
environment is increasing
the importance of local
account management, clinical
education, technical support
and after-sales service,
particularly for
higher-value and
service-intensive medical
devices, according to the
report.
Rather than
moving entirely to direct
operations, manufacturers
could use hybrid models in
which they retain
responsibility for strategic
accounts, tender strategy,
pricing governance,
regulatory strategy, service
standards and market
intelligence. At the same
time, distributors continue
to handle areas such as
importation, warehousing,
logistics, routine tender
administration, regional
coverage, and first-line
maintenance.
The
report outlines five
distribution models, ranging
from a traditional
distributor-led structure to
a strategic localization
partnership, with the
appropriate approach
depending on a company's
market scale, portfolio, and
localization objectives.
Distributors are not
becoming less relevant, the
report says. Still, their
role may shift from broad
ownership of a
manufacturer's market
activities toward execution
under more defined targets,
reporting requirements, and
performance measures.
The whitepaper also
argues that greater local
content does not necessarily
mean establishing
manufacturing operations in
Saudi Arabia.
It
proposes a phased approach
beginning with local
commercial and tender
capabilities, followed by
service and training,
warehousing and spare-parts
capacity, and potentially
repackaging or light
assembly. Selective
manufacturing or technology
transfer could be considered
where supported by the
business case.
The
report also distinguishes
between localization and
establishing a regional
headquarters, noting that a
Saudi-based headquarters may
support regional management
and cross-country functions
but would not, on its own,
resolve gaps in distributor
performance, customer
access, or service delivery.
Eurogroup Consulting
said manufacturers should
assess market
attractiveness, the degree
of commercial control
required, partner
capabilities, local-content
readiness, and organizational
investment when determining
their Saudi operating model.
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