Russian market holds promise and pitfalls for vendors
Amid all the talk of emerging global markets for medical imaging
equipment, one country often gets left out of the discussion:
Russia. Despite the oversight, Russia and other nations in the
former Soviet Union share much of the same potential as more publicized
markets in the Far East and Latin America.
One sign of Russia's potential is the formation and growth
of its first professional ultrasound society, the Society of Diagnostic
Ultrasound in Medicine. The 2800-member society was formed in
1990 and is growing at a rate of about 300 members a year. It
puts on two annual conferences and publishes the Journal of Clinical
Imaging, a glossy magazine that features slick ads from vendors
such as Acoustic Imaging, Acuson, ATL, GE, Picker and Toshiba.
Much of the society's growth has been directed by its president,
Dr. Oleg Y. Atkov, chief ofthe new diagnostic methods and research
department at the Russian National Cardiology Center in Moscow.
Atkov is also known for another notable accomplishment: He performed
the first ultrasound examinations in space while serving as crew
physician on a Soviet space station in 1984.
Atkov toured the U.S. this month on a visit sponsored by ultrasound
vendor Acuson of Mountain View, CA, which has installed a 128XP
scanner in Atkov's department. Atkov described the state of clinical
ultrasound in Russia and also gave advice to medical imaging vendors
considering a foray into markets in the former Soviet Union.
Unlike some emerging markets, there are a number of luminary
sites in Russia where high-level medical treatment and research
is being practiced. One such site is Atkov's department, where
physicians are conducting research in advanced ultrasound techniques
such as myocardial perfusion exams using contrast media. These
sites are capable of purchasing premium medical equipment, including
ultrasound scanners manufactured by Acuson, ATL and other vendors,
he said. Until recently, most of these facilities were in the
Moscow area, but high technology is beginning to spread to other
parts of the country.
"There is an imaging revolution in my country," Atkov
said. "Five or seven years ago, only big centers could buy
equipment (from companies) like Acuson, like MRI systems and CT
systems. Now you can find such systems thousands of kilometers
Growth in the Russian health-care system is coming from private
clinics that are springing up, as well as government ministries
that are setting up hospitals and clinics to serve patients in
specific industries, such as mining and agriculture. Many purchases
continue to be subsidized by the state.
For smaller hospitals and clinics, there is great demand for
basic, low-cost equipment. There is also a thriving market for
used medical equipment, according to Atkov. Equipment refurbisher
Comdisco has had success placing refurbished cardiac cath labs
in Russia (SCAN 8/31/94).
"In some cases people prefer a system with a good reputation,
but second hand," Atkov said. "The market for used equipment
Acuson's march on Moscow. Acuson entered the market in 1987
when it began selling scanners through a local distributor. The
vendor now has 100 systems installed and operates direct sales,
service and support from an office in Moscow, according to president
and CEO Samuel Maslak.
Acuson approached the market in the former Soviet Union as
a long-term investment and has targeted the development of quality
relationships with clinical experts, Maslak said.
"The country is going through tremendous changes economically
and socially. We don't have high expectations of immediate results,"
Maslak said. "What we believe, though, is that this is a
country that has many extremely well-educated people who have
the skills to use ultrasound, and they have the need for ultrasound
instrumentation for medical care."
Acuson estimates that the size of the Russian market is comparable
to that of mid-sized countries in Europe, according to Daniel
Dugan, senior vice president of worldwide sales, service and marketing.
Challenges to foreign firms include a lack of hard currency and
a shortage of information about potential purchasers. The country's
ongoing political turmoil can also cause anxiety for Western medical
Former Toshiba executive Ronald Schilling of RBS Consultants
in Los Altos Hills, CA, is bullish on Russia. In purely economic
terms, Russia has potential because there is so much room for
the country's per capita gross national product to grow, he told
The Russian medical imaging market is divided into two tiers,
according to Schilling. The upper tier consists of a small number
of prestigious hospitals that service the wealthy and well-connected.
One of these facilities, in St. Petersburg, recently purchased
a PET scanner, Schilling said. The second tier consists of hospitals
and clinics that need reliable, basic equipment. Schilling advises
medical imaging vendors operating in Russia to keep a close eye
on the cost of servicing equipment sold in the country.
"Don't get sidetracked by a few exotic things that are
not the norm (like PET scanners), and which are going to be painful
to service," Schilling said. "Companies need to look
at the service infrastructure."
What is Atkov's advice for Western companies trying to break
into the Russian market? Their sales strategies should not be
much different from those for developed markets like the U.S.,
he said. Vendors should get to know the purchasing decision-makers,
place their equipment in luminary sites and provide good service
and support after the sale.
"Russia is (a similar) country and nothing special,"
Atkov said. "Try to meet the specialists. If you invest in
research in some special clinic in Russia, it will be helpful
for the market."