Russian Medical Devices Market: Investment Opportunities, Growth Forecasts by Care Areas and Local Competitive Landscape (2015-2018)

  • ID: 3250765
  • Report
  • Region: Russia
  • 162 Pages
  • Ethnographic Medical Research Pvt. Ltd. (EMeRG)
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Even as Russia's economic slowdown continues, there is a silver lining for the medical devices market post 2016

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The purpose of the report is to analyze the key opportunities and investment areas for medical devices in Russia, despite the ongoing economic slowdown. With data gathered through in-depth primary research with various local and global medical device manufacturers as well as distributors, the report provides an in-depth understanding of the Russian medical device market from 2015-2018 by care areas. In addition to detailed market metrics and growth forecasts for over 30 medical device product categories, the report analyzes the key opportunity areas for foreign investors in Russian medical device market. The report is relevant for key stakeholders and decision makers in medical device organizations, venture capital and private equity firms; strategy consulting firms; as well as government, trade and commerce organizations.

Key Highlights and Questions Answered in the Report

In the period between 2010 and 2013, the Russian government had made significant progress in creating a favorable business environment for foreign investors. With policies around tax and custom concessions, IP protection, and creation of industrial parks; FDI in Russia grew by 83% in 2013. This had prompted various medical device manufacturers to look at localization of medical device production in Russia. However with the Ukraine crisis, there has been a negative perception within various industries towards doing business in Russia. With capital flight and trade restriction imposed on the country, the business environment has changed significantly for most industries including medical devices.

- How is the current political, economic, social and technological environment in Russia for foreign investors?
- What are the implications of restriction on imported medical device manufacturers in public tenders?
- What is the silver lining for foreign investors looking to do business in Russia in the near future?

Despite the improvements in healthcare policies in the past 5 years, healthcare remains largely inaccessible to rural areas. With a large proportion of medical devices being functional without maintenance contracts, the throughput and overall usage in public hospitals is being negatively impacted. While the private healthcare sector was growing at about 12% per year, the recent economic slowdown is likely to impact the flow of foreign investments into this sector.

- What are the various types of hospitals and healthcare facilities across Russia?
- What is the installed base of selected diagnostic imaging modalities in the country?
- What are the key opportunities for medical device manufacturers by disease areas including cardiovascular, renal, cancer and other disease types?
- What are the key opportunities in the Russian private health sector for various healthcare service providers?
- What are the trends in public and private health insurance in Russia?

With over 77% of the medical device consumption being dependent on imports, Russia has been looking to reduce its reliance on foreign manufacturers. As the government adopts pro-domestic manufacturer policies especially for public hospital tenders, there would be additional ramifications for multinational firms. Localization strategies adopted by MNCs for production of medical devices within Russia may also be impacted by the current economic downturn.

- What is the current market size for medical devices by various product categories?
- How will the market projections be impacted by the current economic slowdown and restrictions on imported devices?
- What are the opportunities for medical device manufacturers by various care areas including cardiology, critical care, operating room, diagnostic radiology, orthopedics, dialysis etc.?
- What are the key opportunities for manufacturers of diagnostic imaging equipment?
- What are the key differentiators for individual product categories being consumed across various care areas in Russia?
- What are the purchase criteria for medical devices in public hospitals?
- What are the current guidelines for medical device registration in Russia?

With over 1000 local manufacturers of medical devices, the Russian market for medical devices is fragmented for various product categories. Certain medical device manufacturers are looking to counter the current import restrictions by weighing localization strategies. Several global manufacturers have been looking to improve market penetration through strategic partnership with local dealers and small device manufactures.

- Who are the key global manufacturers of medical devices operating in Russia?
- Who are the key local medical device manufacturers?
- What are the key hospital dynamics and new hospital launches in 2014-2015?
- What are the various healthcare policies from 2014-2015 that are likely to impact the medical device market in Russia?

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Chapter 1: INTRODUCTION
1.1 Reasons for Doing this Study
1.2 Methodology and Information Sources
1.3 Disclaimer and Terms of Purchase

Chapter 2: EXECUTIVE SUMMARY

Chapter 3: BUSINESS ENVIRONMENT IN RUSSIA
3.1 Country Profile
3.2 PEST Analysis: 2014-2015
3.2.1 Political Environment for Business
3.2.2 Economic Environment for Business
3.2.3 Social Environment for Business
3.2.4 Technological Environment for Business
3.3 Russia: Business Environment in 2014-2015
3.3.1 Business Environment in Russia: Overview
3.3.2 Doing Business in Russia: SWOT Analysis

Chapter 4: RUSSIAN HEALTHCARE AND HOSPITAL INDUSTRY IN 2014-2015
4.1 Russia: Healthcare Demographics
4.2 Key Industry Challenges (2014-2015)
4.2.1 Key Industry Challenges in Public Health Sector
4.2.2 Key Industry Challenges in Private Health Sector
4.3 Key Drivers
4.4 Why Invest in Russian Healthcare
4.5 Understanding Key Disease Areas in Russia
4.5.1 Key Disease in Russia: Overview
4.5.2 Opportunities by Disease Areas
Cardiovascular Diseases
Cancer
Diabetes
Renal Disorder
4.6 Types of Hospitals in Russia
4.6.1 Understanding Public Hospitals
4.6.2 Understanding Private Healthcare Facilities
4.7 Health Insurance in Russia
4.7.1 Healthcare Funding in Russia: Overview
4.7.2 Public Health Insurance in Russia
4.7.3 Private Health Insurance in Russia

Chapter 5: MEDICAL DEVICE MARKET IN RUSSIA: 2014-2018
5.1 Overview of the Medical Device Market in Russia
5.1.1 Historical Revenues (2010-2014)
5.1.2 Revenue Forecasts (2015-2018)
5.2 Growth Opportunities in Russian Medical Device Market
5.2.1 Overview of Opportunities for Medical Device Manufacturers
5.3 Understanding the Russian Cardiology Devices Market
5.3.1 Need Gaps in the Russian Cardiology Devices Market
5.3.2 Cardiovascular Devices Market in Russia: Key Opportunities
Pacemaker Market
ECG Market
Blood Pressure Market
Interventional Cardiology Devices Market
Other Cardiology Devices Market
5.4 Understanding the Russian Critical Care Devices Market
5.4.1 Need Gaps in the Russian Critical Care Devices Market
5.4.2 Critical Care Devices Market in Russia: Key Opportunities
Patient Monitor Market
Ventilator and Other Respiratory Therapy Equipment Market
NICU Devices Market
Other Critical Care Devices Market
5.5 Understanding the Russian Dental Devices Market
5.5.1 Need Gaps in the Russian Dental Devices Market
5.5.2 Dental Devices Market in Russia: Key Opportunities
Dental X-ray Market
Dental Chairs Market
Dental Instruments Market
Other Dental Devices Market
5.6 Understanding the Russian Diagnostic Imaging Equipment Market
5.6.1 Need Gaps in the Russian Diagnostic Imaging Equipment Market
5.6.2 Diagnostic Imaging Equipment Market in Russia: Key Opportunities
CT Scanner Market
MRI Scanner Market
Ultrasound Market
X-ray Devices Market
Nuclear Medicine Equipment Market
Medical Imaging Accessories Market
5.7 Understanding the Russian Hemodialysis Market
5.7.1 Need Gaps in the Russian Hemodialysis Market
5.7.2 Hemodialysis Market in Russia: Key Opportunities
Hemodialysis Machines Market
Dialysis Consumables Market
5.8 Understanding the Russian Medical Consumables Market
5.8.1 Need Gaps in the Russian Medical Consumables Market
5.8.2 Medical Consumables Market in Russia: Key Opportunities
Medical Dressings Market
Contrast Agents Market
X-ray Films Market
Blood Grouping Reagents Market
Syringes Market
Needles and Other Invasive Consumables Market
Other Medical Consumables Market
5.9 Understanding the Russian Operating Room Devices Market
5.9.1 Need Gaps in the Russian Operating Room Devices Market
5.9.2 Operating Room Devices Market in Russia: Key Opportunities
Anesthesia Machines Market
Sutures Market
Surgical Gloves Market
Other Operating Room Devices Market
5.10 Understanding the Russian Orthopedic Devices Market
5.10.1 Need Gaps in the Russian Orthopedic Devices Market
5.10.2 Orthopedic Devices Market in Russia: Key Opportunities
Artificial Joints Market
Fixation Devices Market
Other Orthopedic Devices Market
5.11 Understanding the Russian Other Medical Devices Market
5.11.1 Need Gaps in the Russian Other Medical Devices Market
5.11.2 Other Medical Devices Market in Russia: Key Opportunities
Endoscope Market
Ophthalmic Devices Market
Other Medical Devices Market
5.12 Purchase Criteria for Medical Devices
5.13 Medical Device Distribution in Russia
5.14 Medical Device Regulations in Russia
5.14.1 Current Medical Device Guidelines

Chapter 6: COMPETITIVE LANDSCAPE IN RUSSIA
6.1 Global Medical Device Manufacturers in Russia
6.2 Local Medical Device Manufacturers in Russia

Chapter 7: KEY HOSPITAL AND MEDICAL DEVICE NEWS (2014-2015)
7.1 Hospital News: New Launches, M&As and Deals
7.2 Medical Device Market News
7.3 Healthcare Policy News

LIST OF FIGURES

Figure 1: Country Profile, Russia, 2014
Figure 2: Russia, PEST Analysis, 2014
Figure 3: SWOT Analysis, Russian Markets, 2014
Figure 4: Russian Hospital and Healthcare Demographics, 2014
Figure 5: Key Challenges in the Russian Public Health Sector, 2014
Figure 6: Key Challenges in the Russian Private Health Sector, 2014
Figure 7: Key Reasons for Death in Russia, 2014
Figure 8: Healthcare and Hospital Structure, Russia, 2014
Figure 9: Key Facts and Statistics, Private Health Centers in Russia, 2014
Figure 10: Historical Revenues, Russian Medical Device Market, 2010-2014 ($Bn)
Figure 11: Revenue Splits, Russian Medical Device Market, 2014 (%)
Figure 12: Revenue Forecasts, Russian Medical Device Market, 2015-2018 ($Bn)
Figure 13: Revenue Splits, Russian Cardiology Devices Market by Product Categories, 2014
Figure 14: Pacemaker Market in Russia – Market Metrics, 2014-2018
Figure 15: ECG Market in Russia – Market Metrics, 2014-2018
Figure 16: Blood Pressure Monitor Market in Russia – Market Metrics, 2014-2018
Figure 17: Interventional Cardiology Devices Market in Russia – Market Metrics, 2014-2018
Figure 18: Other Cardiology Devices Market in Russia – Market Metrics, 2014-2018
Figure 19: Revenue Splits, Russian Critical Care Devices Market by Product Categories, 2014
Figure 20: Patient Monitor Market in Russia – Market Metrics, 2014-2018
Figure 21: Ventilator and other Respiratory Therapy Equipment Market in Russia – Market Metrics, 2014-2018
Figure 22: NICU Devices Market in Russia – Market Metrics, 2014-2018
Figure 23: Other Critical Care Devices Market in Russia – Market Metrics, 2014-2018
Figure 24: Revenue Splits, Russian Dental Devices Market by Product Categories, 2014
Figure 25: Dental X-ray Market in Russia – Market Metrics, 2014-2018
Figure 26: Dental Chairs Market in Russia – Market Metrics, 2014-2018
Figure 27: Dental Instruments Market in Russia – Market Metrics, 2014-2018
Figure 28: Other Dental Devices Market in Russia – Market Metrics, 2014-2018
Figure 29: Revenue Splits, Russian Diagnostic Radiology Equipment Market by Product Categories, 2014
Figure 30: CT Scanner Market in Russia – Market Metrics, 2014-2018
Figure 31: MRI Scanner Market in Russia – Market Metrics, 2014-2018
Figure 32: Ultrasound Market in Russia – Market Metrics, 2014-2018
Figure 33: X-Ray Market in Russia – Market Metrics, 2014-2018
Figure 34: Nuclear Medicine Equipment Market in Russia – Market Metrics, 2014-2018
Figure 35: Medical Imaging Accessories Market in Russia – Market Metrics, 2014-2018
Figure 36: Revenue Splits, Russian Hemodialysis Market by Product Categories, 2014
Figure 37: Hemodialysis Machines Market in Russia – Market Metrics, 2014-2018
Figure 38: Dialysis Consumables Market in Russia – Market Metrics, 2014-2018
Figure 39: Revenue Splits, Russian Medical Consumables Market by Product Categories, 2014
Figure 40: Medical Dressings Market in Russia – Market Metrics, 2014-2018
Figure 41: Contrast Media Market in Russia – Market Metrics, 2014-2018
Figure 42: X-ray FIlms Market in Russia – Market Metrics, 2014-2018
Figure 43: Blood Grouping Reagents Market in Russia – Market Metrics, 2014-2018
Figure 44: Syringes Market in Russia – Market Metrics, 2014-2018
Figure 45: Needles and Other Invasive Consumables Market in Russia – Market Metrics, 2014-2018
Figure 46: Other Medical Consumables Market in Russia – Market Metrics, 2014-2018
Figure 47: Revenue Splits, Russian Operating Room Devices Market by Product Categories, 2014-2018
Figure 48: Anesthesia Machines Market in Russia – Market Metrics, 2014-2018
Figure 49: Sutures Market in Russia – Market Metrics, 2014-2018
Figure 50: Surgical Gloves Market in Russia – Market Metrics, 2014-2018
Figure 51: Other Operating Room Devices Market in Russia – Market Metrics, 2014-2018
Figure 52: Revenue Splits, Russian Orthopedic Devices Market by Product Categories, 2014
Figure 53: Artificial Joints Market in Russia – Market Metrics, 2014-2018
Figure 54: Orthopedic Fixation Devices Market in Russia – Market Metrics, 2014-2018
Figure 55: Other Orthopedic Devices Market in Russia – Market Metrics, 2014-2018
Figure 56: Revenue Splits, Russian Other Medical Devices Market by Product Categories, 2014
Figure 57: Endoscope Market in Russia – Market Metrics, 2014-2018
Figure 58: Ophthalmic Devices Market in Russia – Market Metrics, 2014-2018
Figure 59: Other Medical Devices Market in Russia – Market Metrics, 2014-2018
Figure 60: Key Purchase Criteria for medical devices in Russian Hospitals, 2014

LIST OF TABLES

Table 1: Installed Base Estimates of CT Scanners in Russia, 2014
Table 2: Installed Base Estimates of MRI Scanners in Russia, 2014
Table 3: Cancer Demographics, Russia, 2014
Table 4: Healthcare Facilities in Russia, 2013
Table 5: Revenue Forecasts, Russian Cardiology Devices Market, 2015-2018 ($)
Table 6: Revenue Forecasts, Russian Critical Care Devices Market, 2015-2018 ($)
Table 7: Revenue Forecasts, Russian Diagnostic Radiology Equipment Market, 2015-2018 ($)
Table 8: Revenue Forecasts, Russian Hemodialysis Market, 2015-2018 ($)
Table 9: Revenue Forecasts, Russian Medical Consumables Market, 2015-2018 ($)
Table 10: Revenue Forecasts, Russian Operating Room Devices Market, 2015-2018 ($)
Table 11: Revenue Forecasts, Russian Orthopedic Devices Market, 2015-2018 ($)
Table 12: Revenue Forecasts, Russian Other Medical Devices Market, 2015-2018 ($)
Table 13: List of Selected International Medical Device Companies Selling into Russia, 2014
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  • Azimut
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BUSINESS ENVIRONMENT IN RUSSIA

- The Russian government has made significant progress in creating a favorable business environment for foreign investors in the recent years even as the Ukraine crisis led to various trade restrictions
- With the country looking to become a technology oriented economy from an oil and raw materials one, several steps including tax and custom concessions, IP protection and creation of industrial parks and special economic zones have been taken. While improving investor confidence, it helped FDI in Russia to grow by 83% in 2013
- Following the Ukraine crisis, there has been a negative perception within various industries towards doing business in Russia. Capital flight and restrictions imposed by international community have dampened economic growth
- EMeRG predicts a moderate decline in the economic growth of Russia in short term (2015-2016). Restriction on imported medical device companies from participating in public tenders will have a negative impact on the market growth in short term. However, with the Russian government looking to increase productivity, creating high-tech production facilities and taking steps to improve investors’ confidence, the economic environment for doing business is likely to improve in long term

RUSSIAN HEALTHCARE AND HOSPITAL INDUSTRY IN 2014-2015

- With over 61% of the healthcare expenditure being accounted for by the government, the Russian healthcare system is primarily driven by the public sector. However, it is faced with major challenges including inaccessible healthcare in rural areas; inadequate primary care services; limited number of specialists as well as overworked specialists
- There has been a significant reduction in the number of rural healthcare facilities from 8249 in 2005 to 2085 in 2013
- The Russian private healthcare market is growing at about 12% per year. However only about 7% of all hospitals and about 10% of the clinics in Russia are private owned
- The private healthcare providers market is being impeded by moderately high market entry barriers including high capital investments, need for brand reputation etc.
- Recent healthcare reforms have been aimed at transitioning Russia into a health-insurance based system with focus on improved primary care, high-end technologies, establishment of tertiary care specialized facilities including cardiology centers, reduction of hospital capacity etc.
- The emphasis has shifted from inpatient to outpatient services as financial viability is being sought. Day-care centers for outpatient diagnosis, surgery and rehabilitation are being set up
- It is anticipated that the growth of single-specialty clinics will increase across a majority of Russian cities. Multispecialty / multidisciplinary clinics are anticipated to increase only in the large cities with a population of over 1Mn including Moscow, Saint Petersburg and Novosibirsk etc.
- There are a limited number of pathology labs with immunohistochemistry analysis capabilities for accurate cancer diagnosis. Most of these labs are confined to Moscow and St. Petersburg where waiting lists may extend up to 2 months leading to delayed diagnosis
- High localization of specialist cancer care facilities in major cities is one of the factors hindering early detection. Only 30% of cancer patients receive radiation due to lack of equipment, training and financial resources

MEDICAL DEVICE MARKET IN RUSSIA: 2014-2018

- Growing at a CAGR of 1.9% from 2015 to 2018, the Russian medical device market is expected to be valued at $7.19Bn in 2018
- Owing to the economic slowdown, the medical devices market was negatively impacted in 2014 as the market contracted by 0.3% over 2013. In 2015 too, the Russian medical device market is anticipated to shrink as the government looks to prohibit imported items into public tenders. While the current socio-economic factors may negatively impact market growth in immediate future, medical device sales are expected to increase post 2016
- Russia has one of the strongest domestic markets for medical devices primarily for low-end and mid-range devices. However, the products manufactured within the country do not match the quality standards of western companies
- It is expected that in future, foreign companies may enter into special investment contracts with the government while localizing its manufacturing facilities in Russia and creating job opportunities. Such initiatives may be impeded in the short term, given the current political and economic situation in Russia
- With the increasing cardiac disorders and arrhythmia prevalence, there has been a rise in pacemaker implantation in Russia over the past 5 years. The Russian pacemaker market is expected to grow at a CAGR of 2.7% from 2015 to 2018
- Lack of funds has severely hampered the growth of medical technologies in the country. A large majority of the diagnostic imaging equipment including CT scanners, MRI and digital radiography systems are not covered under any form of service contract. The overall diagnostic radiology imaging equipment and accessories market in Russia is expected to be valued at $1354.2Mn in 2018
- There exists a moderately negative perception among senior radiologists towards usage of contrast agents for radiological procedures. Many radiologists believe that they can visualize the anatomy effectively without the contrast agents
- With an increasing number of local manufacturers entering the market, the affordability of various critical care equipment including patient monitors as well as NICU devices has improved. However with dwindling exchange rates, the overall critical care devices market is expected to grow at a CAGR of 0.9% from 2015 to 2018 in Russia
- The high cost of liquid Helium is one of the key hindrances towards adoption of MRI. The liquid Helium costs about $25per litre, thus adding about $75,000-$100,000 to the initial price tag.
- The key to successful sales of medical imaging accessories is to bundle a majority of the items along with the capital equipment at point of sale, typically as specified in the tender
- There have been moderate changes to the medical device registration process and various nomenclature associated. Average cost for the entire process towards registration may include various overheads including commissions charged by consultants and other costs. On an average, registration of medical suppliers / consumables may cost about $3000-$5000 while that of high-end equipment may cost over $10,000

COMPETITIVE LANDSCAPE

- With a robust service and sales network, B.Braun has been successful in Russia especially with its range of infusion pumps. However, the company’s overall growth rate in Russia in 2014 was negatively impacted by the Ukraine crisis and the dwindling investor confidence. B.Braun has also been impacted by the increasing pro-local manufacturer outlook in public tender evaluations
- In April 2015, Johnson & Johnson announced the signing of a memorandum of cooperation with Russian pharmaceutical manufacturer –Pharmstandard. The agreement will help the companies improve local production of self-monitoring blood glucose systems in Russia
- In 2014, Philips ventured into performance management consultancy services for Russian hospitals. As part of the strategic partnership with MEDSI – one of the largest private clinics networks in Russia, Philips will lend its expertise in hospital management to facilities involved. This will include optimization of infrastructure management, patient flows and processes, as well as continuous training for the medical staff
- In 2014, Fresenius Kabi (the division dealing with drugs and technologies for infusion, transfusion and clinical nutrition) entered into a joint venture with Sistema JSFC and Zenitco Finance Management LLC to improve its domestic manufacturing capabilities in Russia. Fresenius was impacted by the Ukraine crisis in Russia leading to delays in various projects. This led to an organic sales growth of 0% for the company in the same year
- With over 1000 local manufacturers, the domestic production of medical devices is increasing at a substantial pace. Product categories manufactured by key local companies include various medical consumables, endoscopy products, ophthalmic devices, lab diagnostic devices, x-ray products and various accessories
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- AKC
- Aksi Group
- Alcom Medica
- Altonika
- Amico
- Association of Medicine and Analytics (AMA)
- Astrocard Meditek Ltd
- Axion
- Azimut
- B.Braun Melsungen AG
- Bayer Healthcare AG
- Becton, Dickinson and Company
- Conmet Holding
- Diaclon JSC
- Drägerwerk AG & Co. KGaA
- EFA
- EKOlab
- ELAMED-JSC Yelatma Instrument making enterprise
- Electron
- Elekta AB
- Eltech-Med
- Fresenius SE & Co. KGaA
- GE Healthcare
- Hartmann USA, Inc.
- ImDi LLC
- Intersan Plus
- JSC SPF Bioss
- Johnson & Johnson Services, Inc.
- Kreyt
- MSPA Endomedium
- Medprom
- Medtronic plc
- Microsurgical instruments
- Minimax
- Mitsar Co. Ltd.
- Nanospektr
- Neo Company
- Nephron
- OOO Petr Telegin
- Optimed
- Orion Medic
- Rateks
- Royal Philips (Koninklijke Philips N.V.)
- Siemens Healthcare
- Spectromed
- Stroyreanimatsiya
- Triton Electronics Ltd
- Vital Development
- Volo
- Zdravmedtech (ZMT)
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