Philips, GE go Russian with locally built CT scanners

by Brendon Nafziger, DOTmed News Associate Editor | October 29, 2010

Royal Philips Electronics
is partnering with Electron
Evgeny Ageenko and his patients no longer have to make due with an aging, imported 2-slice CT scanner. The head of The Hospital of War Veterans in St. Petersburg can now look forward to working with a brand-new 16-slice scanner - what's more, it was assembled in his home town.

"[N]ow we have the opportunity to increase the capacity of our diagnostic CT procedures and significantly improve the quality of our clinical studies," he said in a statement.

The scanner, made by Royal Philips Electronics with local partner Electron, is a sign that for at least two OEMs, partnerships with Russian firms are starting to bear fruit, and that soon U.S. and global companies will be better able to tap into Russia's growing, multi-million euro imaging market.

Philips said Friday it and Electron's Russian-made CT scanner, recently installed in the St. Petersburg hospital, is the first locally produced one to include a Russian language interface and have specifications specifically tailored for the market.

The launch follows a partnership deal the two companies inked in May.

"Although partnerships are common in the West, for Russia this is a very unique arrangement to develop and produce much needed medical technology for local use," a spokeswoman for Philips said.

But Philips is not the only company in on the act. In September, GE Healthcare and its manufacturing partner Meditsinkie Technologii Ltd. unveiled what they said was Russia's first-ever domestically assembled CT scanner. Through their deal, the companies said they can make around 100 scanners per year.

"Domestic production allows us to price high-tech equipment more affordably for Russian customers," Vyacheslav Grischenko, region general manager of Russia and CIS states for GE, said in prepared remarks. "This should increase access to health technology and reduce costs for the health care system."

Philips' 16-slice scanner, predicted to image around 17,000 patients a year at The Hospital of War Veterans, was produced at Electron's production facilities in St. Petersburg. Around 15 percent of its high-tech components were made in Russia, the companies said. They hope by 2013 to raise that amount to 51 percent.

Anatoly Dabagov, president of MTL, said 25 percent of manufacturing for their scanner was domestic.

Both companies aim to tap into Russia's imaging market, expected to recover from shocks it took during the global economic downturn. Research firm Synovate estimates that this year the market could reach half of its 2008 numbers of 800 million euros, or $1.1 billion, and that in the next few years it will return to 2008 levels. GE said the Russian CT market alone could exceed 1.5 billion rubles, or around $48.6 million.

Demographic factors could also help fuel industry growth. Heart disease and cancer, whose diagnosis and treatment plans often rely on advanced imaging, are leading causes of death in the country.

Both companies have high hopes for the future. Philips said it was looking to expand its Russian-assembled portfolio to include a 64-slice CT scanner, advanced ultrasounds and even an MRI scanner.