Now That's an Easier Pill to Swallow

Let’s begin by contrasting two different medical experiences intended to diagnose heartburn: 1) A catheter is inserted into your body through the nasal cavity and left there for several hours while a measure of acidity is taken or 2) You swallow a pill and wait two hours while a measure of acidity is taken. Although the results of these different procedures are the same, the comfort of the patient and skills required to administer the tests vary significantly. Welcome to the age of wireless health!

Recently, a company based in the United States released a product which integrates wireless technology into a pill. When the patient swallows the pill, it transmits valuable data about the vital signs which normally are retrieved using much more challenging procedures. The company is obviously planning international expansion, as they received approval from the European Union in August.

Some interesting international business questions arise from selling high technology items in international markets. On top of the intellectual property (IP) rights issues, this particular product must also gain special approval from health agencies before being able to gain sales distribution. What are the important IP issues in a case like this? How does a company ensure that its technology is not duplicated? What is the best approach to distribution of such highly technical and regulated products? These issues and many others are those which companies face on a regular basis.

From a cost perspective, this new invention shows promise in lowering the healthcare bill for all. Because this technology enables patients to “self-administer”, doctors are relieved of laborious and uncomfortable procedures and can manage their time doing other value-added activities. At that point, all the doctor must do is interpret the results coming from the wireless pill and diagnose accordingly.

This product provides a great example of how complex international sales can actually be. From the outside, one may think “This is a brand new product with limitless opportunity.” But once you take a closer look, you see the regulatory and intellectual property rights which create new challenges and dynamics before entering into a new market. Careful due diligence must be completed before any international transaction, much less one which requires multiple legal hurdles and regulatory approval.