MedTech market in Russia

At the end of 2023, the volume of investments in American digital health startups amounted to $10.7 billion, while a year earlier this figure was $15.3 billion, and in 2021 – $29.2 billion. Such data is provided in a study by Rock Health. Meanwhile, the MedTech market in Russia, on the contrary, continues to demonstrate stable growth, despite difficult economic conditions.

According to the Smart Ranking research agency, in 2023 the Russian medical technology market increased by 27%, to 46.63 billion rubles. At the same time, the revenue of 70 leading MedTech companies on the Russian market increased by 24.7% – to 7.46 billion rubles. According to Kama Flow partner Pavel Okhonin, these companies remain attractive for investment, which is indirectly confirmed by the data of the report of the analytical platform Dsight. Analysts estimate that MedTech raised $11 million last year, which is 13% of the total volume of the Russian venture capital market.

As Kamila Zarubina, vice president and executive director of the biomedical technology cluster of the Skolkovo Foundation (VEB.RF group), notes, the biomedical sector accounted for the largest deal in the Russian venture market in the first nine months of 2023. Within its framework, the platform for digital services Zdorovye.ru, a member of the biomedical cluster of the Skolkovo Foundation, raised 307 million rubles. from the Kama Flow investment fund and private investors of the Syndicate venture club.

The main trends in the Russian MedTech market, according to the Smart Ranking study, today include remote health monitoring and VR rehabilitation, widespread implementation of neural networks, focus on cybersecurity, informatization of regions and the desire for centralization, penetration of telemedicine and psychotherapy, as well as growing demand for hybrid solutions in B2B sector.

“The state is playing an increasingly active role in the development of the MedTech sector, becoming its key investor. This creates new opportunities for domestic developers and startups,” notes Igor Aznauryan, Doctor of Medical Sciences, professor and scientific director of the ophthalmological telemedicine service “Online Eye”.

They’ll figure it out for two

One of the main trends in the Russian MedTech market, Andrei Davidyuk, CEO of the Motorika company and Chairman of the Board of the Cybathletics Union, calls the growth in the use of artificial intelligence (AI) and data analytics. In particular, in 2024, Deputy Minister of Health of the Russian Federation Pavel Pugachev said at the Biotechmed forum that solutions using AI in medicine are already being implemented in 70 Russian regions.

Investment Director of Kama Flow Sergey Gaivoronsky predicts that in 2024, a clear trend in the Russian MedTech segment will be the creation of AI-based medical decision support systems. Such systems help prevent human errors.

“Most of the images (about 95%) show the absence of pathologies. Accordingly, when a doctor constantly works with the norm, he may miss a picture with pathology,” explains Igor Aznauryan.

In addition, according to the expert, AI is able to check the patient’s prescriptions for all medications and procedures, as well as filter out low-quality cards, sending them to doctors for revision. At the same time, the share of artificial intelligence is also growing in assistive technologies designed to help people with disabilities in learning, work and everyday life.

“We will use AI in our products for an intuitive interface for controlling prostheses, as well as for analyzing user activity and correcting rehabilitation in real time,” explains Motorika CEO Andrey Davidyuk.

In addition to artificial intelligence, current trends in the Russian MedTech market include data analytics, which is used to optimize the work of medical institutions, and bioinformatics, a means of developing new methods of treatment and diagnostics. In addition, telemedicine remains one of the fastest growing MedTech segments since the COVID-19 pandemic, which eliminates the need to waste time traveling and waiting in long lines, which is especially in demand among families with children.

“Finally, personalized medicine is gaining more and more popularity, the essence of which is the selection of individual therapeutic, diagnostic and preventive methods,” says Igor Aznauryan.

Emergency digital assistance

The desire of medical institutions to switch to working “digitally” contributes to the development of the market for both telemedicine services and various types of remote diagnostics, says Kamila Zarubina. Thus, according to a report by the consulting company DelveInsight, by 2027 the volume of the global digital health market will exceed $486 billion, and thanks to an average annual growth rate of 22% in 2028 it will already be $1.1 trillion, taking into account the fast-growing wellness segment.

“The promising growth of digital healthcare and the attention of investors is facilitated by developments in the field of telemedicine, as well as solutions that allow the active implementation of AI, including ChatGPT, and big data analytics,” notes Kamila Zarubina.

The main drivers of such decisions, according to the expert, are the increase in the number of chronic diseases coupled with the growth of the elderly population throughout the world, including Russia, the shortage of medical workers, including in the segment of care for the elderly, as well as a change in attitude towards telemedicine services in the public consciousness. Solutions related to the development of virtual assistants, personal medical assistants, telebots and electronic medical records are also beginning to gain significant popularity.

“These modern methods help improve the process of providing medical services, reduce treatment costs and provide better quality treatment for patients,” notes Igor Aznauryan. However, according to Kamila Zarubina, today it is not enough to install high-tech equipment in the clinic and introduce the latest software: it is also necessary to take care of preparing doctors to use the latest technologies in their routine practice. Therefore, in the next three to five years, a number of solutions may show significant growth in the volume of attracted investments.

Among them are those that allow the use of distance and hybrid training formats for medical personnel in the workplace, including equipment for simulation centers, robotic mannequins, as well as digital educational platforms with tools for managing training cases and the ability for doctors to communicate to make a diagnosis based on interdisciplinary consultation.

Subtleties of import substitution

Due to the withdrawal of a number of foreign companies from the market, Russian developers are actively occupying the vacated niches. In particular, according to Igor Aznauryan, they offer domestic analogues of software for medical institutions, medical equipment and consumables. In Russia, there are developments in the MedTech field that not only correspond to the level of world leaders, but sometimes even surpass them, adds Andrey Davidyuk.

“At the same time, there is a significant problem – a lag in the field of microelectronics, but Russian industry is working to solve it,” says the expert, noting that the decrease in the activity of Western manufacturers in the Russian market has not affected the development of new products. The fact is that many companies simply replaced suppliers with eastern ones.

At the same time, Kamila Zarubina points out that today only a fifth of the Russian assistive technology market has been developed. The available market volume is estimated at 193.7 billion rubles, which, according to the Moscow Innovation Agency, is slightly more than 20% of the potential volume. At the same time, imported goods occupy almost three quarters of the available market.

“Thus, there is obvious significant potential for import substitution and the development of Russian products in the field of prosthetics, neuroprosthetics, the development of exoskeletons and other medical products and technical means of rehabilitation aimed at maintaining and improving human health,” says Kamila Zarubina.

Prospects for medtech

Among the main trends in the global MedTech market that will be relevant in the near future, Kamila Zarubina highlights the centralization of healthcare, outsourcing of production, integration with the Internet of things and the widespread introduction of AI. Today, the development of a unified centralized system for regulating regulatory documentation is one of the main tasks of the global MedTech market, and outsourcing the production of medical devices will reduce the costs of creating prototypes, developing a product line and managing logistics, increasing the return on investment.

“When talking about integration with the Internet of Things and AI, it is worth paying attention to various kinds of smart solutions that allow real-time monitoring of a patient’s condition without reference to his location,” says Kamila Zarubina.

Among such solutions, the expert includes, among other things, capsules with built-in sensors, trackers, cameras and microchips. Thus, according to estimates by the analytical agency Research and Markets, the global market for smart tablets will reach $8.3 billion by 2028. As for the development of the Russian MedTech market, Igor Aznauryan assesses its prospects as very positive.

In particular, the MedTech market is expected to continue to grow in the coming years, especially in the areas of telemedicine, AI, and personalized medicine. Government support and import substitution will contribute to this process. “As a result, Russia can become one of the leaders in the global MedTech market,” the expert concludes.

Maria Frolova