GE Commits $300 Million To New Emerging Markets Business
By Jof Enriquez,
Follow me on Twitter @jofenriq
GE Healthcare is allocating $300 million to jump-start a newly-created business unit called Sustainable Healthcare Solutions (SHS) dedicated to emerging markets. The unit will develop and market low-cost, value-based products and services to boost healthcare delivery across multiple settings in African and Asian countries. SHS will build on GE's experience of partnering with government institutions and private organizations to improve healthcare delivery.
"SHS will leverage GE’s Fastworks methodology to accelerate, test and rapidly commercialize relevant, affordable technologies. By taking this ‘start-up’ model approach we can rapidly test new ideas, products and services to maximize effectiveness for customers before we scale up,” said Terri Bresenham, president and CEO of GE Healthcare’s Sustainable Healthcare Solutions unit, in a press release. “From basic primary care delivery through to more complex, structural healthcare challenges, SHS will aim to combine GE Healthcare’s capabilities and scale with the local know-how and expertise of our partners across Africa, Southeast Asia, India and South Asia."
According to GE, SHS will serve Bangladesh, Bhutan, Brunei, Cambodia, India, Indonesia, Laos, Malaysia, Maldives, Myanmar, Nepal, Philippines, Singapore, Sri Lanka, Thailand, Vietnam, and all 54 African countries.
In the release, GE cited two devices – the handheld ultrasound device Vscan Access and the Lullaby infant warmer – as examples of low-cost technologies it has developed that have improved outcomes in maternal infant care in remote rural settings, a major focus area for emerging markets as they try to meet the United Nations' Millenium Development Goals (MDGs).
“Sustainable Healthcare Solutions is a business that is focused on making affordable, high-quality healthcare accessible to the majority of the world’s population, partnering with public and private healthcare providers,” Terri Bresenham, CEO of GE Healthcare’s Sustainable Healthcare Solutions (SHS) business, said in a company article. The article explained how GE intends to help developing countries transition from terminal MDGs this year, to newly-set goals — called Sustainable Development Goals (SDGs) — in the next fifteen years.
“Making healthcare affordable and accessible to the world will not be possible without the participation and collaboration of the larger ecosystem which includes NGO’s, funding agencies, donors, healthcare providers, government, start-ups and other corporates,” Bresenham said in the article.
According to the press release, the low-cost healthcare equipment sector alone is now estimated to be worth over $8 billion, and it is growing significantly as developing countries continue to invest in healthcare infrastructure and improve capacity to run fledgling healthcare systems.
GE Healthcare CEO John Flannery said in a recent conference call that emerging markets will be a critical focus for GE Healthcare.
However, as much as equipment sales can impact the bottom line, Flannery told analysts that GE needs to adapt a more comprehensive approach to emerging markets and go beyond selling equipment to maximize the opportunity.
“If you stay in the equipment only business, that is a hamster wheel, just trying to stay ahead of the price dynamics,” he said, according to the Seeking Alpha transcript of the call. “If you are in the solution business, it’s actually a much bigger profit pool.”
In support of this strategy, GE recently pledged $1 billion over five years to train more than two million healthcare professionals in emerging markets by 2020.
In a previous interview with Economic Times, Flannery noted that ongoing R&D investment in medical device development in emerging countries is creating a self-sustaining product pipeline. For example, India, in which GE has a sizable presence, is now able to develop homegrown, low-cost, world-class products that are marketed to other emerging economies.
"Supervalue portfolio products are originally conceived here and designed for India at a different price point. We have been working on it for the past five years and launched 26 products in that series. Our latest, the 26th one in that line has been developed keeping in mind the relevant needs of the market co-created with the physicians," he said in the article.
"It's a CT (computed tomography) technology, advanced yet cost-effective. It took us four years and $20 million to develop this. It will be one of the most impactful designs that have been done for the country because you still have large parts of the country with no CT facilities and those which depend on decades-old machines, with high radiation exposure and substandard machines."