Foreign direct investment of Covidien Center of Innovation in medical device industry

ABSTRACT

Medical device industry has characteristics of multi-disciplinary convergence and is easy to apply with information communication technology. Such nature makes Korea medical device industry more globally competitive than the pharmaceutical industry. The foreign direct investment (FDI) of service industry in Korea continues to be at a standstill and the medical device industry is not an exception. Among this stagnant FDI situation in Korea, Covidien, a global medical device company has established the Covidien Center of Innovation as both an education and training facility for domestic and foreign healthcare professionals and a medical device research and development (R&D) center in August 2013. Along with the global attractiveness of superior clinical outcomes generated by healthcare professionals, the future medical device industry development will be fueled by continued R&D investments, researchoriented hospital R&D activities, and clinical studies, etc. It is important to provide attractive investment environments to embrace FDI similar to Covidien Center of Innovation into Korea in order to leverage healthcare professionals' competency at maximum and lead collaboration between medical device companies and healthcare professionals. It is imperative that 'innovative medical device enterprise' certification system similar to the curent 'innovative pharmaceutical enterprise certification' is created. If additional premium reimbursement prices are granted to medical devices developed and manufactured by the innovative enterprises which contribute to domestic R&D and healthcare professional education and training through FDI in Korea, it will help FDI activation in Korea to a great extent. And the reimbursement coverage for routine care costs in clinical trial will stimulate FDI in Korea.