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Opportunities Abound in Russia's Medical Device Market
September 5, 2013
2 Min Read
Medical device manufacturers in Russia face a significant number of challenges. However, these challenges are tempered against a wide variety of opportunities. Since the era of Soviet-lead healthcare has left a lasting shadow on the country, many parts of Russia's existing healthcare system are plagued with bureaucratic inefficiencies. However, Russia has made significant attempts to improve healthcare regulations and standards.
A Eurasian country with 83 federal subjects, Russia covers almost seven million square miles. It has the largest land mass of any country in the world, covering one-eighth of all inhabited land on earth. With a population of 143 million people as of last year, Russia is the ninth most populous nation.
Based on purchasing power parity, the Russian economy is the fifth largest in the world. In terms of nominal GDP, the country is the eighth largest. With some of the largest energy and mineral resources in the world, Russia has become one of the largest natural gas and oil producers. The country also maintains a significant number of trade agreements with other countries around the world. As of 2013, the country is a member of the World Trade Organization, the Asia-Pacific Economic Cooperation the Commonwealth of Independent States, G8, G20 and other similar groups.
Since the introduction of a National Health Project, Russia has been able to improve its healthcare standards in several significant ways. In recent years, many medical personnel have received increases in salaries. In addition, many medical facilities in the country have been upgraded with the latest technology.In December of last year, Russia extended its healthcare modernization program until the end of 2013. Since some regions in the country weren't able to complete the modernization program from 2011 to 2012, the government extended its time to implement the program until the end of the year. If there are unused funds remaining after this modernization initiative, they will be used to complete existing medtech projects. In total, the Russian government authorized $655 million for the modernization program this year. These additional funds were added to an initial $15.1 billion allocated for 2011 through 2012.
In January of this year, the Russian government approved a new development plan for its healthcare system. This program, comprising 11 initiatives, would take place from 2013 to 2020. Areas of focus include medical rehabilitation, physiotherapy, maternal healthcare, preventative healthcare and more.
On average, many medical device manufacturers is Russia are plagued with less-than-optimal working capital. Because of this, a significant number of Russian-based medical device companies produce medical devices that are considered obsolete by Western standards. Russian medical device manufacturers can only compete with their Western brethren on cost.
While Russia is home to a strong research community, few manufacturers or entrepreneurs in the country have experience in commercializing novel medical devices. To help change this, Russian officials implemented a new strategy this year that would spur the development of new, innovative medical products. This strategy will continue from 2013 to 2025.
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