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Russian market holds promise and pitfalls for vendorsAmid all the talk of emerging global markets for medical imagingequipment, one country often gets left out of the discussion:Russia. Despite the oversight, Russia and other nations in
Amid all the talk of emerging global markets for medical imagingequipment, one country often gets left out of the discussion:Russia. Despite the oversight, Russia and other nations in theformer Soviet Union share much of the same potential as more publicizedmarkets in the Far East and Latin America.
One sign of Russia's potential is the formation and growthof its first professional ultrasound society, the Society of DiagnosticUltrasound in Medicine. The 2800-member society was formed in1990 and is growing at a rate of about 300 members a year. Itputs on two annual conferences and publishes the Journal of ClinicalImaging, a glossy magazine that features slick ads from vendorssuch 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 researchdepartment at the Russian National Cardiology Center in Moscow.Atkov is also known for another notable accomplishment: He performedthe first ultrasound examinations in space while serving as crewphysician on a Soviet space station in 1984.
Atkov toured the U.S. this month on a visit sponsored by ultrasoundvendor Acuson of Mountain View, CA, which has installed a 128XPscanner in Atkov's department. Atkov described the state of clinicalultrasound in Russia and also gave advice to medical imaging vendorsconsidering a foray into markets in the former Soviet Union.
Unlike some emerging markets, there are a number of luminarysites in Russia where high-level medical treatment and researchis being practiced. One such site is Atkov's department, wherephysicians are conducting research in advanced ultrasound techniquessuch as myocardial perfusion exams using contrast media. Thesesites are capable of purchasing premium medical equipment, includingultrasound scanners manufactured by Acuson, ATL and other vendors,he said. Until recently, most of these facilities were in theMoscow area, but high technology is beginning to spread to otherparts of the country.
"There is an imaging revolution in my country," Atkovsaid. "Five or seven years ago, only big centers could buyequipment (from companies) like Acuson, like MRI systems and CTsystems. Now you can find such systems thousands of kilometersoutside Moscow."
Growth in the Russian health-care system is coming from privateclinics that are springing up, as well as government ministriesthat are setting up hospitals and clinics to serve patients inspecific industries, such as mining and agriculture. Many purchasescontinue to be subsidized by the state.
For smaller hospitals and clinics, there is great demand forbasic, low-cost equipment. There is also a thriving market forused medical equipment, according to Atkov. Equipment refurbisherComdisco has had success placing refurbished cardiac cath labsin 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 equipmentis good."
Acuson's march on Moscow. Acuson entered the market in 1987when it began selling scanners through a local distributor. Thevendor now has 100 systems installed and operates direct sales,service and support from an office in Moscow, according to presidentand CEO Samuel Maslak.
Acuson approached the market in the former Soviet Union asa long-term investment and has targeted the development of qualityrelationships with clinical experts, Maslak said.
"The country is going through tremendous changes economicallyand socially. We don't have high expectations of immediate results,"Maslak said. "What we believe, though, is that this is acountry that has many extremely well-educated people who havethe skills to use ultrasound, and they have the need for ultrasoundinstrumentation for medical care."
Acuson estimates that the size of the Russian market is comparableto that of mid-sized countries in Europe, according to DanielDugan, senior vice president of worldwide sales, service and marketing.Challenges to foreign firms include a lack of hard currency anda shortage of information about potential purchasers. The country'songoing political turmoil can also cause anxiety for Western medicalimaging companies.
Former Toshiba executive Ronald Schilling of RBS Consultantsin Los Altos Hills, CA, is bullish on Russia. In purely economicterms, Russia has potential because there is so much room forthe country's per capita gross national product to grow, he toldSCAN.
The Russian medical imaging market is divided into two tiers,according to Schilling. The upper tier consists of a small numberof prestigious hospitals that service the wealthy and well-connected.One of these facilities, in St. Petersburg, recently purchaseda PET scanner, Schilling said. The second tier consists of hospitalsand clinics that need reliable, basic equipment. Schilling advisesmedical imaging vendors operating in Russia to keep a close eyeon the cost of servicing equipment sold in the country.
"Don't get sidetracked by a few exotic things that arenot the norm (like PET scanners), and which are going to be painfulto service," Schilling said. "Companies need to lookat the service infrastructure."
What is Atkov's advice for Western companies trying to breakinto the Russian market? Their sales strategies should not bemuch 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 serviceand support after the sale.
"Russia is (a similar) country and nothing special,"Atkov said. "Try to meet the specialists. If you invest inresearch in some special clinic in Russia, it will be helpfulfor the market."