Why this is important to Wisconsin businesses: Opportunities for Wisconsin companies
The Russian medical device market has strong potential, with several factors contributing to this potential:
- Aging of the population due to increased life expectancy, along with an increase in the number of specific diseases associated with adverse ecology
- Increasing welfare of the population and development of publicly funded social programs
- Development of private medicine
- Development of telemedicine
On the other hand, the industry’s growth is held back by a number of problems. These factors include high dependence on imports and low volume of production, especially for high-tech equipment; technological lag in a number of areas of production; and inertia of consumers, who are often not ready to purchase innovative products, preferring low-margin ones that are already proven.
According to the federal customs service, the volume of medical device imports into the Russian Federation in 2016 amounted to $676.1 million. Thus, imports constitute two-thirds of the total consumption of medical devices. Imports exceed the production of medical devices and equipment in the Russian Federation by more than 8 times, and in Moscow this ratio is almost 38 times. At the same time, the growth rate of medical device and equipment imports exceeds the total growth rate for imports of all types.
Moscow is a key importer of medical products and equipment, because of its large consumption, favorable geographical location and developed logistics network. In 2016, Moscow accounted for 66% of all imports of medical equipment and products in the Russian Federation, with the following breakdown:
- Sanitary products: 19%
- Reusable medical instruments and devices, as well as their parts and accessories: 11.3%
- Prosthetics and orthopedics: 9.7%
A similar distribution of the main import categories is typical for imports across the Russian Federation.
Among the more than 4,200 manufacturers of medical products whose products are imported into Russia, the leading five are:
- GE (U.S.)
- Siemens (Germany)
- Toshiba (Japan)
- Drager (Germany)
- Phillips (Holland)
It should be noted that all these companies report high R&D expenses (ranging from 3.1% to 7% of company turnover).
Medical equipment consumption in the Russian market is structured as follows:
- Public procurement forms the basis of the market for medical devices and equipment (72% in 2016). Government procurement is the main sales channel for manufacturers and distributors of medical devices.
Based on federal programs for health care modernization and medical industry development strategy, priority segments of the high-tech medical equipment market include:
- Products with a high degree of visualization (tomography equipment, ultrasound devices, angiographic devices)
- Anesthesia/breathing apparatus and mechanical ventilation apparatus
- Surgical equipment
- Patient monitoring systems
- Despite constituting a smaller share of total consumption, the commercial segment has higher growth rates, largely because of the individual diagnostic tools sector, as well as private-pay medicine and telemedicine.
In general, manufacturers of high-tech medical equipment from Wisconsin have good prospects for exporting to Russia, and may wish to participate in the public procurement processes of government medical institutions. The main health care exhibition in Russia, Zdravookhraneniye, will be held in Moscow Dec. 2-6, 2019, as part of Russian Health Care Week.