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Accord May Help O.C. Makers of Medical Devices : Trade: Sales to Japanese hospitals would be a big plus for an industry whose U.S. market is shrinking as facilities merge.

October 04, 1994|HOPE HAMASHIGE | SPECIAL TO THE TIMES

IRVINE — The new trade accord between the United States and Japan could give a welcome boost to Orange County companies that already sell medical devices such as electro-surgical and diagnostic equipment in Asia, analysts said Monday.

The U.S. market for costly medical equipment is shrinking as hospitals and other health-care providers merge to share resources and reduce costs, experts said. That has prompted medical device makers to expand their sales overseas.

"Because of all the consolidation, it is a tougher industry to be in," said Marie Conway, an analyst with NatWest Securities in New York. "If this agreement allows American companies to compete with Japanese medical device makers such as Hitachi, it will be a big plus for the whole industry."

The trade pact would give makers of medical devices access to one of Japan's major markets: government-run hospitals. That business, estimated to be worth $2.6 billion annually, has historically gone to Japanese manufacturers.

"The problem with Japan was never that tariffs were prohibitive," said Colleen Costello, a spokeswoman for the World Trade Center Assn. in Irvine. "It was that business and government worked so closely together it was difficult for newcomers to get into the market."

Among companies standing to benefit from the new accord is Beckman Instruments. The company, based in Fullerton, already sells about $114 million worth of medical equipment in Asia annually, most of it to Japanese buyers. By adding the government as a potential buyer in Japan, the company would see a vastly expanded market for machinery such as blood analysis systems that sell for $100,000 or more.

"We are optimistic about any agreement that will allow us to compete with Japanese manufacturers on a more level playing field," Beckman spokeswoman Jeanie Herbert said Monday.

Birtcher Medical in Irvine, which now sells about $2 million in electro-medical surgical equipment to Japanese buyers each year, is also optimistic. "We have been able to sell freely in Japan," said company President Kenneth Cleveland, "except to the government."

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