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Remarks at AdvaMed 2010 Medical Technology Conference

Wednesday, October 20, 2010

Commerce Secretary Gary Locke
Remarks at AdvaMed 2010 Medical Technology Conference

Thank you, Joe, for your kind introduction.  It’s great to have this opportunity to meet with the members of AdvaMed. 

For people who care about the economy, there are few subjects more important than the dramatic developments taking place in the medical technology industry. 

Over the past few decades, the introduction of innovative products that allow for earlier detection of diseases and for more effective treatment options have markedly changed the landscape of the healthcare sector, both in the U.S. and abroad. 

Medicine is now using nano-materials that enable the release of medicine at targeted organs. 

Collaborations in medical technology have led to advances in biomarkers, robotic assistance, ingestible diagnostic capsules and much more. 

Higher survival rates for cancer patients and a dramatic decline in death rates from cardiovascular disease have been the direct result of innovative products conceived, developed and commercialized by the med tech industry. 

Your businesses are responsible for breakthrough treatments that improve public health, create high-paying jobs, and are a constant font of innovation that spins off new businesses with significant growth prospects.

Above all, we owe this uniquely American success story to the vision and intellect of your scientists, engineers and business managers. . .

As a parent of a teenage daughter who suffered a terrible broken hip in a ski accident and who required emergency surgery to insert high-tech metal screws and allowed her to recover without a cast, I thank you for your innovations. 

As a patient myself who broke a back 20 years ago and was up and about within days with a ninja turtle-like suit of armor but plastic and removable and adjustable, I thank you for your innovations.

Our family thanks you for the deep brain stimulation device implanted into our Mom which has dramatically mitigated the debilitating effects of her Parkinson’s disease.

These messages of thanks are expressed by millions of individuals and families each day all across America, and indeed around the world.

Their work points the way toward an American economic recovery that is broad and sustainable. It points toward innovation.

For too long, our economy was on a path of illusory growth – one driven by speculation and debt-fueled consumption.

The United States simply must get back to cultivating industries and lines of scientific discovery that provide long-term benefits to society and spur sustainable innovation – the kind of work that your companies are doing every day.

This administration and the Commerce Department are pursuing a variety of innovation boosting strategies that will help spur growth throughout our economy.

One key area that I know is of great interest to AdvaMed is the Administration’s efforts to reform the U.S. patent office at home and crack down on counterfeiting and piracy of U.S. goods abroad.

The U.S. Patent and Trademark Office today is sharply focused on granting patent applications at higher quality and with greater timing flexibility. 

We don’t want to rely on continuing applications and continued prosecution as a false proxy for high-quality grants.

This change will have the follow-on benefit of reducing pendency as well.  So it is a real win-win.

Of course, receiving clear and quality patent rights is only half the battle when it comes to intellectual property. 

The life-saving medical technologies that you produce are among the strongest competitive advantages we have in the global economy

And it is a fundamental priority of the Obama administration and the Department of Commerce to protect them.

Our government has been in negotiation with the key trading partners of an Anti-Counterfeiting Trade Agreement, which takes aim at preventing counterfeiting and piracy on a global scale.

At last year’s U.S.-China JCCT meeting, we agreed on a number of issues, including further cooperation on intellectual property rights.  And I have already been to China multiple times to express the Obama administration’s commitment on this issue.

America will remain the most open major economy in the world. That’s been good for our nation’s quality of life, and it’s been good for our economy.

But we will continue to insist that that if we give foreign countries the privilege of access to our market, U.S. companies like yours also must receive the same access and protections in theirs.

This expectation has taken on greater importance since President Obama announced his National Export Initiative last January with a goal of doubling U.S. exports by 2015.

There’s no question that AdvaMed members will have a leading role to play in reaching this target.

U.S. production of medical devices now exceeds $100 billion, with a global market of roughly $256 billion. And the U.S. is the world’s largest exporter of medical devices.  Last year (2009), exports of medical devices were valued at more than $36 billion.

And always good news to a Commerce Secretary, medical technology has consistently enjoyed a favorable balance of trade – an edge we should maintain.

Despite the recent recession, millions of people around the world are emerging from poverty and demanding modern health care.

And, as noted in the New York Times last Sunday, populations everywhere are getting older faster.  By 2018, 65-year-olds will outnumber those under five – a historic first. The elderly and a growing worldwide middle class will increasingly look to your medical technologies to ensure a healthier, longer future for their families and themselves. . .

. . . which means that the U.S. med tech industry is strategically positioned to remain a vibrant and progressive industry and a dominant player in the global market for the foreseeable future. 

Under the president’s National Export Initiative, there's going to be a lot more resources to promote and support U.S. companies.

The NEI is an unprecedented effort, and it was designed to put Americans back to work in jobs that provide security, dignity and a sense of hope for the future.

Let me just briefly explain how the NEI is helping to grow exports and create jobs.

Number one is expanding the U.S. government's export promotion efforts in all its forms.

For example, Commerce is planning a series of med tech seminars in 2011, to help your companies make better use of federal export programs and build on the success of the first seminar which was held in Minneapolis last June. 

The NEI is also going to help improve access to credit, especially for small- and medium-sized businesses that want to export.

The Export-Import Bank has recently devised a Medical Technologies Initiative to ensure that more buyers qualify for Ex-Im support through a more flexible set of standards for those companies and countries that would not qualify for financing under the standard guidelines.

Finally, under the NEI, we’re increasing the government's focus on knocking down barriers that prevent U.S. companies from getting free and fair access to foreign markets.

Since the NEI was announced in January, these efforts, combined with a strengthening world economy, are producing results.

  • Exports are up roughly 18 percent over the first eight months of this year.  And,
  • U.S. exports of manufactured goods totaled approximately $827 billion, compared with $686 billion for the same period in 2009.

These increases are having an impact on the economy:

Exports accounted for more than one percentage point of GDP growth (at an annual rate) in each of the four quarters of recovery.

This was a larger contribution than either consumption or fixed investment.

And more exports, of course, mean more jobs. Because the more American companies sell, the more they need to make, and the more they need to make, the more people they need to hire.

So we are giving a high priority to leveling the playing field.  We are well aware of the challenges that the U.S. med tech industry faces in foreign markets – beyond the failure to protect IPR, which discourages legitimate trade and undermines the legal market for high tech goods.

As a result of the reduction or elimination of tariffs in many markets around the world, some countries have been resorting to non-tariff barriers to limit foreign competition. 

Some impose costly and redundant testing and compliance procedures, non-transparent standard-setting or regulatory procedures, and other requirements that act as impediments to free trade.

Others require standards unique to their market or region.

We’re hearing a lot, for example, from the international business community about the potential impact of China’s “indigenous innovation” policy, which threatens access to the Chinese market.

It’s a misguided strategy that serves no one well.  It stands to hurt foreign businesses, including U.S. companies.  But it also would hurt Chinese consumers, who would be denied access to products that could improve their quality of life.

Governments and businesses must be unified and insistent in opposing such policies.

To reach a consensus on issues affecting the med tech and other U.S. industry competitivess, we’re working closely through trade associations, industry-trade advisory committees, and our Manufacturing Council.

We were pleased last week to welcome AdvaMed member, Stephen MacMillan, president and CEO of Stryker Corporation, as the medical device and diagnostics industry representative on our 2010 Manufacturing Council.

We’re also, of course, actively engaged in various bilateral forums with key emerging markets including China, India and Brazil to promote open and fair trade.

This is important to your industry because:


  • U.S. med tech exports to China are projected to increase by 5 to 10 percent annually over the next five years as China implements healthcare reforms and expands health insurance coverage.
  • Last year, U.S. medical device exports to China (including Hong Kong) exceeded $1.2 billion.


  • India meanwhile has increased imports of medical products by a compounded annual growth rate of about 12 percent over the past 10 years.
  • This pace of growth is expected to continue, because high-quality healthcare products like those you are producing are sought after by India’s growing middle class, a population of around 300 million with rising disposable income and increasing medical expectations.
  • I will be in India next month, where trade is high on the agenda.


  • Brazil is another high-potential market. Brazil’s compounded annual growth rate (CAGR) for total market size and med tech imports both exceeded 20 percent from 2004 - 2009.
  • We share industry’s concern about Brazil’s recent proposals to restrict market access and promote the domestic med tech industry and are working to address them through the U.S.-Brazil Commercial Dialogue.

South Korea/ASEAN:

  • In Asia, South Korea is among the largest markets for medical devices, with a market value expected to exceed $3 billion in 2010.  And,
  • Within the ASEAN countries, healthcare is a priority, with plans to modernize and integrate healthcare sectors across the region.
  • A number of these Southeast Asian countries – Malaysia, Indonesia, Singapore and Thailand – have compounded annual growth rates exceeding 10 percent over the past five years.

The opportunity to sell more of what you make to the 95 percent of consumers who live outside our borders is real and immediate. Under the NEI, and with traditional drivers of American economic growth facing headwinds, we are committed to doing more than ever to help U.S. companies reach new markets.

I’ll close with this:  U.S. leadership in medical innovation is widely recognized.

The United States still comprises the majority of patents in pharmaceuticals, biotech and medical technologies. 

Each new medical discovery creates and sustains demand for further innovations, which fuel our national health, prosperity and productivity, and contribute to global well-being.

These are among the reasons we consider the U.S. medical technology industry one of the crown jewels of the American economy. 

We look forward to working with you in efforts that will allow you to continue to flourish in the global marketplace.

We want to help foster that growth however we can; and I want you to know that my door at the Commerce Department is always open.  

Thank you.