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Opportunities for Medical
Devices in Eastern Europe
Admittance into the EU
Presents New Growth Opportunities in Eastern European Medical Devices Markets
Overall Development and
Increasing Private Sector Participation Augur Well for Medical Device
Manufacturers in Eastern Europe
The accession of several eastern
European countries to the European Union (EU) has brought in standardised
regulations and norms even while opening up new markets for medical device
manufacturers in the region. At the same time, the lower operating costs in
these countries is making them an attractive destination for offshore
production.
While 2004 witnessed the entry of
ten countries into the EU, more countries are likely to follow suit by 2008.
This trend, along with the rapid overall development of eastern European
countries is creating exciting new growth opportunities for medical device
manufacturers. As new and aspiring EU members move to harmonise their
legislation to comply with EU standards, new market entrants, especially the
quality conscious private sector, will be encouraged to expand their presence in
the region.
"Many east European countries
have witnessed a transition from conservative communist or socialist regimes to
market economies," notes Frost & Sullivan Healthcare analyst Kavitha Ravikumar.
"Subsequent novel processes and procedures will demand improved infrastructure
in order to tackle the price-conscious nature of the markets and improve their
attractiveness."
The high degree of price
sensitivity prevailing in the markets is tilting the balance in favour of
lower-cost products, and is making it difficult for higher-priced quality
medical units to find acceptance. Moreover, the trend towards tender purchasing
has further squeezed prices and profit margins. In many cases, enterprises
providing flexible payment deadlines have been favoured in such procurement
deals.
In addition to being promising
markets, many eastern European countries are also emerging as cost-effective
manufacturing bases. Private investors are increasingly realising the region's
advantages in terms of lower taxes, labour and production costs and are,
consequently, hiking their investments. Furthermore, consistent development,
rising salaries and, the strong performance of local currencies are set to
contribute to the growth of the medical devices markets in eastern Europe.
"To leverage the region's vast
potential, manufacturers need to realise the importance of building local
relationships, conforming to local law and regulation as well as re- labelling
products as well as translating operation manuals into local languages," advises
Ms. Ravikumar.
Medical device manufacturers are
currently focussing on service sector technologies that have ample support from
improved infrastructure and production facilities. Financial aid from the EU and
other international sources is set to drive the demand for high-end technologies
from medical devices makers in future.
"Encouragingly, medical devices
companies in most countries in eastern Europe are benefiting from consistent
revenues by meeting the needs of the replacement markets, while government
initiatives such as modernising healthcare provisions will further strengthen
the market's growth," observes Ms. Ravikumar.
On a larger scale, it will become
necessary for market participants to take into account diverse factors such as
demographic and lifestyle changes, end-user views on specific products as well
as related industries, attitudes towards health, wealth, age, gender, work and
leisure. Enterprises will also be required to comply with new environmental
protection norms that conform with EU levels, which could necessitate some
restructuring in their processes and increased production costs.
If you are interested in a
virtual brochure, which provides manufacturers, end-users, and other industry
participants an overview of the latest analysis of Opportunities for Medical
Devices in Eastern Europe (B675-54), then send an e-mail to Radhika Menon
Theodore, Corporate Communications, at
rmtheodore@frost.com
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