Russia Seeks Parity with Leading Medtech Economies by 2020

November 28, 2011 – 2:35 am

Sergey Tsyb

Sergey Tsyb, head of Department of Chemical Industries and Bioengineering Technologies within Russia’s Ministry of Industry and Trade.

Sergey Tsyb was running late. The head of the Department of Chemical Industries and Bioengineering Technologies within Russia’s Ministry of Industry and Trade had agreed to meet with me at Medica in Düsseldorf to discuss Strategy 2020 for the development of the pharmaceutical and medical technology industries. As it turns out, Tsyb was taking care of business—literally—by attending to localisation negotiations with a major multinational of implantable electronic devices. The back-and-forth was taking longer than anticipated. As I awaited his arrival, publicist Elena Slezkina gave me her perspective on Russia’s healthcare environment.

The Soviet Union may have had many problems, but healthcare was not among them. In fact, the state of medical technology was quite good for its time, Slezkina explained. Things started going downhill, however, in the 1990s. To make up for lost time, the Russian government now has made the advancement of medical technology a national priority, and it is using its petro-rubles to make a generous down payment on this endeavour. Tsyb is a spokesperson for this initiative, and an enthusiastic one at that, Slezkina told me. And right on cue, Tsyb strode into the meeting room, apologised for his tardiness, and warmly shook my hand.

This is the first time that Russia has articulated a long-term development strategy for the medical technology and pharmaceutical industries, Tsyb told me. A €4.5 billion investment programme for these two sectors was recently approved by the government, and now it is time to put that money to good use. The pharmaceutical side of the strategy is well underway; the medtech part of the programme took a little longer to implement—a couple of signatures are required from ministries that oversee regulatory approvals—but those are largely pro forma, says Tsyb, and he is here in Düsseldorf to move the project forward. His mission is to lead negotiations with international medtech leaders interested in localisation projects within Russia as well as to support Russian companies in their talks with potential partners.

Tsyb sees tremendous opportunities for Russia in the current economic climate, “where Europe and the United States wrestle with stagnation, while Russia finalises investment plans of some €15 billion to shore up its healthcare infrastructure.” As part of this programme, Russia is engaged in harmonising and streamlining regulatory requirements to enable Russian medical device manufacturers to export their technology more easily to other markets. Clarity and transparency for exporters—as well as importers—is a priority, says Tsyb, adding that this entire initiative is being closely monitored at the highest levels of Russian government. President Medvedev, I wondered? Yes, and Putin, too, I was told.

The market, which is currently valued at €3.5 billion, is projected to grow six-fold by 2020, according to government forecasts. To make this happen, the Ministry of Industry and Trade has advanced the following measures:

  • Establish cooperative financing of medtech-related R&D activities and manufacturing operations in Russia that correspond with demand from the public healthcare sector.
  • Foster transfer of competencies (i.e., manufacturing facilities for medical device components, materials, accessories and medical products and related R&D centres). Enabling instruments can include the drafting of offset deals involving public equipment procurement; supporting companies that expand competence localisation; and facilitating partnerships among Russian and foreign manufacturers with registration rights on products developed or manufactured in Russia.
  • Encourage the creation of a network of centres engaged in R&D, testing and evaluation and pilot production activities with subsequent mass production.
  • Recruit technical experts to boost assimilation of cutting-edge technologies by Russian companies.
  • Define medtech sectors where Russia has specialised expertise, such as nuclear medicine equipment, and help Russian companies to achieve world class production in those areas.
  • Develop the manufacture of disposable materials for diagnostic and therapeutic equipment.
  • Provide assistance in the redevelopment of existing manufacturing sites.

Russia, a world-class developer and manufacturer of medical technology by 2020? The country has ample financial and engineering resources to achieve that goal, but the will to succeed has not always been evident in these types of initiatives. Dynamic, engaging and seemingly candid, Tsyb gives the impression that this time might be different.

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