GE Healthcare Commits $300M to New Emerging Markets Unit
Wednesday, September 23, 2015
GE Healthcare said today it will spend $300 million to develop lower-cost technologies and healthcare delivery solutions across multiple care settings in emerging markets through a new business unit.
The new unit, Sustainable Healthcare Solutions (SHS), will work with governments, clinicians, private operators, and non-governmental organizations (NGOs) to improve access to quality and affordable health worldwide in a multi-phase effort, GE Healthcare said. SHS will combine GE Healthcare’s operations in India, South Asia, Africa, and Southeast Asia.
“Innovations that can create better patient outcomes in a sustainable way are urgently needed,” GE Healthcare President and CEO John Flannery said in a statement. “Many emerging economies are looking for experienced partners to help build skills, capacity and effective healthcare solutions for their patients.”
During a September 16 presentation to investors at the Morgan Stanley Laguna Conference, Flannery articulated the development of "Ecosystem solutions for emerging markets" as one of four “business priorities” for GE Healthcare, looking beyond products toward packaging and training. Flannery identified $1.2 trillion in unmet healthcare spending opportunity in emerging markets, in addition to $5.8 trillion in developed markets.
“There’s very strong growth around the world in healthcare. A lot of this is in emerging markets,” Flannery told investors. “There are huge megatrends at play here: There’s almost 6 billion people who still have limited access to healthcare, and big infrastructure build-out, so we have a double digit growth opportunity in the space.”
In emerging markets, he continued, “We’ve also learned that the product is not enough, there’s a lot of need in these countries for a turnkey package: financing, training, equipment, service, IT packages. We just won a $200M, seven-year order in Kenya. We think this is a business we can grow 20%-plus going forward.”