Healthcare Technology Featured Article

October 02, 2014

Report: Distributors Offer Cost-Effective Access to Eastern European Medical Market

Medical manufacturers are looking closely at the medical technology market in eastern European countries, which is set to expand at a moderate and consistent 3.1 percent compound annual growth rate over the next four years, according to a recent report from Frost & Sullivan.

Medical technology service providers looking to diversify their businesses are attracted by size of the eastern European market, which had revenues of $5.4 billion in 2013. Instead of the more traditional method of establishing a sales team and local offices, however, companies are exploring the option of a distributor model to expand their reach into the region.

"By and large, distributors handle products across multiple medical device sectors and are able to effectively address the needs of large hospitals. Their relationships with key decision-makers, doctors and nurses of many hospitals can also help distributors secure supply contracts with hospitals more easily," said Parthasarathy Raghava, Frost & Sullivan healthcare senior research analyst. "This makes distributors integral to medical technology service providers' strategies with hospitals across eastern Europe."

Much of the growth in the eastern European market relates to the growth in private healthcare and the interest in importing new technology in the region. Distributors are uniquely positioned to help medical manufacturers establish and grow their reach in the private sector, according to the Medical Technologies Distributor Profiles in Eastern Europe report. Frost & Sullivan defines distributors as simple distributors, importers and wholesalers, and fourth-party logistics companies.

However, the eastern European distribution market is fragmented, characterized by smaller, family-run distributors. Medical manufacturers would do well to consider which distributors have the right contacts and resources to sell their products.

"In due course, most distributors will adopt a multi-sector, multi-brand distribution strategy to expand their customer base and boost revenues," Raghava said. "This strategy will align well with the continuing trend of bulk purchasing by hospitals, which reduces operational complications and contains costs."

Edited by Maurice Nagle

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