Azerbaijan Rises as the New Player in the Healthcare Industry: Market Insight
Steady economic growth and the government's strong commitment to healthcare make the country a very promising location for investment
LONDON, July 3, 2013 /PRNewswire/ -- The young but rapidly growing oil-rich Azerbaijan is presenting itself as a very attractive ground for global healthcare investors. Continuing government reforms coupled with the shortage of medical expertise, equipment and personnel are driving the transformation in the country's healthcare market. The government has increased its healthcare budget more than 10 times in the past decade and built or remodeled over 500 healthcare facilities so far.
With a growing population of over 9 million, averaging 30 years of age, Azerbaijan's future healthcare system will depend on an organized and well-established public health sector. Currently, Azerbaijan's healthcare expenditure remains small when compared to its GDP. This means higher out of pocket payments (OOP) for patients; 62 per cent of fees in 2007 were OOP. To alleviate this burden, the state is aiming for universal welfare as well as other reforms aimed at improved healthcare infrastructure and financing freedom to hospitals and healthcare providers. More than $225 million was spent for 9 state healthcare programs and total healthcare spending was $612 million in 2010. In 2013 this figure is expected to rise to $760 million.
"Azerbaijan's long-term plans focus on further developing its primary care and making coverage universal. The ongoing process provides a great opportunity for private investments," observes Frost & Sullivan Healthcare Research Analyst Uldouz Berenjforoush. "Further, most of the modern technology and equipment used in the new and renovated hospitals are imported, which positions Azerbaijan as an attractive destination for healthcare vendors. The flourishing economy and growing healthcare system provide lucrative opportunities for the pharmaceutical sector, medical facilities and equipment, as well as personnel investments."
In particular, there is a considerable market for pharmaceuticals, especially in delivering high-quality, low-cost products. Out of the 62 per cent OOP paid by Azerbaijani patients, more than 70 per cent is spent on pharmaceuticals, 60 per cent of which are imported. Turkey, Iran, India, Ukraine and Russia supply low-cost products, whereas medicines from US, France, Germany and other EU regions are much more expensive but have a better reputation.
As there is no domestic production, Azerbaijan is also a great market for medical device investments. Ultrasound scanners, electrocardiographs, X-ray equipment, laboratory analyzers, electronic surgery devices, endoscopes, gynecologic instruments and appliances, catheters, drains, and other expendable materials are in high demand. Currently, they are being imported from US, Germany, Japan, France, Russia, and Turkey. Russian and Turkish firms provide lower-cost equipment, which has resulted in an increasing popularity of Turkish equipment and supplies in the Azerbaijan market. The Japanese Aloka and Shimadzu brands are also becoming popular due to their low-cost and higher quality. German Siemens products dominate in the Azerbaijani hospitals.
Significantly, healthcare infrastructure in Azerbaijan is concentrated in its capital, Baku. The rest of the country is lacking sufficient number of beds for residents, offering a good area for investment with considerable future growth. Building the latest treatment facilities, specializing for instance in cancer, eye and heart-related treatment, for Azerbaijani citizens in their own country will reduce the treatment opportunities lost to medical tourism. Right now, the majority of citizens who can afford better treatment, travel to neighboring countries such as Iran and Turkey, which they feel have better quality of care. For instance, in 2012, 4106 Azerbaijani citizens received treatment in Turkey, and the same year approximately 1600 Azerbaijanis crossed the border to Iran daily for medical procedures.
The biggest issue for Azerbaijan's healthcare industry is the lack of human capital – not enough doctors and nurses with up-to-date expertise. However, the government is now promoting programs that encourage the youth to enter medical careers. By sponsoring their education abroad in Turkey, Europe and the US, a new wave of well-trained doctors is getting ready for work.
"A resource-rich country, Azerbaijan is seen as a potential hub for the region to not only provide the latest medical facilities with the best expertise to its population but also to attract interests from the neighboring countries, with investments in medical equipment, pharma, healthcare and training facilities," concludes Healthcare Industry Analyst Hilal Cura. "Azerbaijan's market outlook is very positive, with its high growth capacity, the economy's upward trend, and the government's focus on development. Any investment in the country's healthcare industry, therefore, promises to be rewarding."
If you are interested in more information on this Market Insight, A New Player In The Field: Azerbaijan, Healthcare Industry, please send an email to Anna Zanchi, Corporate Communications, at email@example.com
About Frost & Sullivan
Frost & Sullivan, the Growth Partnership Company, works in collaboration with clients to leverage visionary innovation that addresses the global challenges and related growth opportunities that will make or break today's market participants.
Our "Growth Partnership" supports clients by addressing these opportunities and incorporating two key elements driving visionary innovation: The Integrated Value Proposition and The Partnership Infrastructure.
- The Integrated Value Proposition provides support to our clients throughout all phases of their journey to visionary innovation including: research, analysis, strategy, vision, innovation and implementation.
- The Partnership Infrastructure is entirely unique as it constructs the foundation upon which visionary innovation becomes possible. This includes our 360 degree research, comprehensive industry coverage, career best practices as well as our global footprint of more than 40 offices.
For more than 50 years, we have been developing growth strategies for the global 1000, emerging businesses, the public sector and the investment community. Is your organisation prepared for the next profound wave of industry convergence, disruptive technologies, increasing competitive intensity, Mega Trends, breakthrough best practices, changing customer dynamics and emerging economies?
SOURCE Frost & Sullivan
More by this Source
Frost & Sullivan: Cutting Edge Approaches to Vulnerability Management
Mar 06, 2014, 11:19 ET
How Top 35 Most Valuable Products and Solutions are Transforming the Oil and Gas Industry
Mar 06, 2014, 11:13 ET
Browse our custom packages or build your own to meet your unique communications needs.
Learn about PR Newswire services
Request more information about PR Newswire products and services or call us at (888) 776-0942.