Soviet health care delegation comes prepared to do business with U.S. medical device companies - also includes a joint statement

Soviet Health Care Delegation Comes Prepared To Do Business With U.S. Medical Device Companies

Ten Soviet officials representing a wide range of health care interest, ranging from research and development organizations to suppliers and providers, came to Washington, D.C. recently, prepared to discuss commercial opportunities with U.S. industry.

The Soviet delegation had quickly accepted the U.S. invitation to the third meeting of the U.S.-USSR Working Group for Medical Products Feb. 21-23, despite the recent reorganization in the Soviet Ministry responsible for the production of medical products. The former Soviet Ministry of Instrumentation, Automation and Control Systems has been placed under the auspices of the Ministry of General Machine Building, which was previously solely responsible for aerospace. V. Sokolov, Deputy Minister of General Machine Building, says "For the last 20 years, I have been involved in rocket development. But now under the Soviet program of `industrial conversion,' I am working to rapidly improve the Soviet medical product and supplies industry."

Strong U.S. Industry Interest

Juan A. Benitez, Deputy Assistant Secretary of Commerce for Science and Electronics, co-chaired the activities of the Working Group, a government-to-government body established in April 1988 to foster commercial trade in health care products. He successfully arranged for strong industry participation during the three-day program.

For the first time, industry was directly represented at the bilateral discussions by the Health Industry Manufacturers Association (HIMA) and the National Electrical Manufacturers Association. This is a reflection of Benitez's strong belief that the private sector should be key participants in such programs. Says Matt Gallivan, Director of International Affairs: "HIMA supports the Commerce Department's efforts to strengthen commercial ties between the U.S. medical device industry and Soviet health care suppliers and end-users." More than 140 representatives of the medical device industry were present at a seminar sponsored by the Working Group to listen to the Soviet presentations on the restructuring of the Soviet industry and potential areas for commercial collaboration.

Soviet Health Care Interests

The Soviet delegation explained to U.S. industry that their health care needs are large in terms of quantity as well as quality of medical products. They invited U.S. firms to help them in their task of improving the quality of life for the average Soviet citizen by providing better health care. Among the various forms of commercial collaboration, they suggest joint ventures and cooperation agreements, as well as direct trade. The Soviets pointed out that joint ventures could be advantageous to U.S. firms, as the labor costs in the Soviet Union are approximately one-tenth those in the United States. At the same time, they noted that while the business potential is large in the USSR, creative approaches for business are necessary, due to systemic problems, such as currency inconvertibility.

Among the priority areas of interest for commercial collaboration, Deputy Minister Sokolov cited the following: radiology products, endoscopes, inhalation therapy products, patient monitoring equipment, surgical hand-held instruments, dental instruments, and sterilizers, as well as hospital design and construction.

Health care products are being sought to stock several huge diagnostic centers being constructed in the USSR. Mr. Viktorov, Director of the All-Union Medical Engineering Institute, pointed out that there are currently 26 of these in operation. This number should increase to 150 by 1995. In addition, medical information centers where U.S. firms can permanently exhibit and sell their products are being established throughout the Soviet Union. The first information center should be open in Moscow in April 1990.

Medical Device Firms Gain Better Understanding

Industry comments were very favorable. Said one firm, "We gained a good insight not only into the Soviet problems in health care, but also the opportunities. It almost appears that through the restructuring of the Soviet economy, various ministries, organizations, and republics compete with each other for business.

After the seminar program, some 45 companies were given the opportunity to meet one-on-one with members of the Soviet delegation. The Working Group provided meeting rooms and interpreters to assist in specific business proposals. The U.S. firms came well prepared and many walked away with declarations to do business in the coming months. The Commerce Department's Susan Lewenz, a principal of the Working Group, agreed, "These types of dialogues tap the `pioneering spirit' of U.S. entrepreneurs to conduct business in one of the last untapped markets, the Soviet Union. But the Soviet market can be a difficult one in which to do business. U.S. firms need to study this market carefully and be prepared to work hard."

Delegation Site Visits

Following the official three-day program, the Soviet delegation went on site visits throughout the United States. All the firms visited received propositions to do business. Michael Deignan, Vice President of International Trade at the Baxter Health Care Corporation, said, "We organized a product display for the Soviets and they were very interested, especially in our instruments. We now plan on discussing commercial ventures with the Soviets and will seek to help them set up a trading network for selected products." Michael Fuchs, another key organizer of the Working Group, explains, "The Soviets are looking for commercial agreements that will benefit both sides. Successful U.S. firms will not only sell directly to the Soviets, but will also help them develop their own technology for domestic or export use. This will foster closer commercial ties between our two countries in the long term."

Upcoming Soviet Trade Show

The Working Group sessions also provided an opportunity for U.S. companies to prepare for the upcoming May 22-31 "Public Health 1990" exhibition in Moscow, where the Commerce Department is sponsoring an official pavilion. With 30 other countries competing for the attention of Soviet buyers during the show, the U.S. side of the Working Group successfully sought a number of ways to enhance the U.S. position at the pavilion.

The most important of these are Soviet agreement to organize and pay for a trade mission throughout the Soviet Union for U.S. exhibitors, as well as to organize daily site visits to local Moscow clinics and hospitals. Peter McKenna, Account Executive at Glahe International, the U.S. show producer for this exhibition, noted enthusiastically that the United States is the only country with this opportunity.

For information on the trade show, interested companies can contact George Keen, Director of Medical Equipment Trade Promotion in the Commerce Department, at (202) 377-2010, or Peter McKenna at (202) 659-4557.

COPYRIGHT 1990 U.S. Government Printing Office
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