|Medtronic CEO Omar Ishrak|
Medtronic ($MDT) CEO Omar Ishrak has made no secret of how important emerging markets are to his company's growth, and India's swelling population and expanding medical access are key to the device giant's future, he said.
In a sit-down with India's Economic Times, Ishrak said Medtronic plans to grow its local presence by focusing on the economic value its devices provide. It's well known that advanced medical technology can improve the standard of care for patients, but Medtronic's challenge is to convince physicians and payers in India that the added cost of the company's products will lead to savings down the line.
"For instance, a hospital may be able to do a procedure with our solution that offers greater efficiency such as reduced blood loss during cardiac surgery, which results in reduced complication and reduced length of stay and cost savings," Ishrak told the newspaper. "Until now, we explained the clinical value to hospitals, but now we are quantifying cost savings as well."
Between China and India, there are about 400 million patients who can afford Medtronic's devices, Ishrak said, but the company has struggled to capitalize on those emerging markets. That's due to a lack of awareness among patients and physicians and a shortage of infrastructure, Ishrak said, but Medtronic is working to change that, investing heavily in the region to get its products adopted.
Ishrak has long said he wants Medtronic to get 20% of its revenue from emerging markets by 2016, and he's made some headway on that goal: As of the last quarter, markets like India and China make up about 12% of Medtronic's business, a 20% increase over the previous year.
"Geographical diversification is the immediate need," Ishrak told ET. "The share of emerging markets should double in next three to four years."
- read the interview
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