Medtech to the United States

Trends and opportunities

The market

The United States (US) has the largest medical technology (medtech) market in the world, accounting for 40 per cent of the global medical device industry (Source: SelectUSA, ‘Medical Technology Spotlight’, 19 February 2021). The country is a net exporter of medtech and exported roughly US$28 billion in instruments and appliances used in medical, surgical, dental, or veterinary sciences in 2020 and imported US$27.6 billion. Australia exported roughly US$69.7 million in instruments to the US in 2020, making it the second largest destination of Australian medical devices following New Zealand (Source: TradeMap, 2021).

US innovation in the life sciences is expected to continue to grow, with the medical device market reaching US$208 billion in 2023 (Source: SelectUSA, ‘Medical Technology Spotlight’, 19 February 2021). An aging population, presence of chronic disease, and high medical costs will drive demand for medtech in the US creating an opportunity for Australian exporters to enter the market.

Australia’s outstanding medical science, strong intellectual property (IP) protection, robust regulatory regime, fast-tracked clinical trials, and expertise in successful commercialising medical science and technologies result in high quality products that are attractive in the US market.

Opportunities

Medtech that aims to make care more efficient, faster, cheaper, and more accessible will drive export opportunities into the US. Some medtech trends that are building traction in the US include:

• ehealth
• remote care
• personalised medicine
• mobile health apps
• portable diagnostics
• 3D printing.

Competitive environment

Mexico (26.7 per cent), Germany (11.7 per cent), Ireland (8.9 per cent), China (8.4 per cent) and Costa Rica (7.6 per cent) are the primary exporters of instruments and appliances used in medical, surgical, dental or veterinary sciences to the US. Australia ranked 37^th with 0.1 per cent of exports into the US (Source: TradeMap, 2021), so there is ample room for Australia to increase its share of the US market for medtech.

Tariffs, regulations and customs

The Australia-US Free Trade Agreement (AUSFTA), which came into effect on 1 January 2005, ensures greater access to the US market for Australian products.

This agreement also enhances prospects for Australian services, trade and investment, improves the regulatory and investment environment between the two countries, and promotes increased business mobility.

Please visit the Department of Foreign Affairs and Trade website for comprehensive information on the AUSFTA.

US tariffs are not unusually high by world standards. The US Customs Service and a number of government agencies regulate goods imported to the US. Non-compliance may result in delays, extra costs, litigation and even prohibition.

Tariffs and duty rates are constantly revised and are subject to change without notice. Comprehensive information on US tariffs can be obtained from the website of the US International Trade Commission.

Customs brokers are licensed by the US Department of the Treasury and assess tariff classification, quota compliance and anticipation of difficulties in the entry of products you export to the US. Austrade can help you find a customs broker to suit your exporting needs.

Industry standards

Foreign manufacturers of medical devices importing into the US must meet all regulations which include registering the establishment, listing the devices, adhere to manufacturing standards, report adverse events, and if applicable Premarket Notification 510(k) or Premarket Approval. The initial importer must also register medical devices with the Food and Drug Administration (FDA) and are subject to Medical Device Reporting. Devices that emit radiation require further FDA requirements and are subject to Medical Device Reporting (Source: FDA, ‘Importing into the U.S, 10 February 2021).

Marketing your products and services

Market entry

The US has an expansive medtech market which adheres to strict regulations particularly for safety and intellectual property. It is important to research the market to understand the protocol.

The US has clusters of life science ecosystems where there is more advanced infrastructure for medtech innovation and growth due to their proximity to funding and research institutions. Key states for medtech include California, Massachusetts, Minnesota, New York/New Jersey, Florida, Illinois, Indiana, Washington DC, North Carolina, Pennsylvania, Texas, Utah, and Wisconsin.

Industry associations and medtech conferences are key to growing a network in the US. Events are a productive way to meet partners and learn about current trends in the field.

Distribution channels

When looking at the US, exporters can distribute directly to the market or through third party distributors. Given the distance to the US, due diligence and ongoing communication is key when working with third parties.

Transport

Using a good customs broker and freight forwarder is the most efficient way to ship your goods. These companies are expert in documentation, freight rate negotiations and finding the most economical way to get your product to the buyer. For more information on freight forwarders, please email info@austrade.gov.au.

There are a number of ports on both the east and west coasts of the US. The largest ports (by tonnage) in the US are in Louisiana, Texas, New York, and California. Total transit time between Port Botany in Sydney and Lost Angeles Port is between 25-43 days (19 days on the sea) with an approximate cost of US$2435 (Source: SeaRates.com, 19 February 2021). Air freight is also available but can be more costly.

Links and industry contacts

Advanced Medical Technology Association (AdvaMed)
Food and Drug Administration (FDA)
Independent Medical Specialty Dealers Association
International Association of Medical Equipment Remarketers and Servicers
Medical Alley
Medical Device Manufacturers Association (MDMA)

Please note: This list of websites and resources is not definitive. Inclusion in this list does not imply endorsement by Austrade. The information provided is a guide only. The content is for information and carries no warranty; as such, the addressee must exercise their own discretion in its use. Australia’s anti-bribery laws apply overseas and Austrade will not provide business related services to any party who breaches the law and will report credible evidence of any breach. For further information, please see foreign bribery information and awareness pack.

Contact details

The Australian Trade and Investment Commission – Austrade – contributes to Australia's economic prosperity by helping Australian businesses, education institutions, tourism operators, governments and citizens as they:

• develop international markets
• win productive foreign direct investment
• promote international education
• strengthen Australia's tourism industry
• seek consular and passport services.

Working in partnership with Australian state and territory governments, Austrade provides information and advice that can help Australian companies reduce the time, cost and risk of exporting. We also administer the Export Market Development Grant Scheme and offer a range of services to Australian exporters in growth and emerging markets.