In the week since Russia launched its invasion of Ukraine, the response from the international community has built momentum in the form of sweeping economic sanctions. A joint statement was made on 26 February reading: “We, the leaders of the European Commission, France, Germany, Italy, the United Kingdom, Canada, and the United States, condemn Putin’s war of choice and attacks on the sovereign nation and people of Ukraine.” The Russian market is being increasingly isolated with each new measure, as sanctions target the export of high-technology goods and Russian banking transactions.

Medical devices and technologies are unlikely to be broadly targeted, given humanitarian considerations. Specific diagnostic and advanced surgery equipment are certain to become snared in semi-conductor, laser, and other export restrictions. Exports of medical devices allowed by sanctions to Russia will continue, but in the face of larger economic forces.

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The exclusion of Russia from SWIFT effectively prevents any transactions that use a Russian bank to interact with an international one. This vastly complicates procurement by any Russia-based entity from any medical device supplier that uses SWIFT accessible accounts. Orthopaedic device manufacturers with an international presence fall into this category almost exclusively.    

The ruble has dropped precipitously, shedding approximately 30% of its value, as widely reported by Reuters, with no real end to the volatility in sight. This reduced purchasing power means that medical device procurements are going to be more costly, and likely reduced in turn. Suppliers from countries that have not imposed sanctions, like Changzhou Meditech Trading Co., in China, are still going to pursue full value for their goods.

GlobalData had been projecting the Russian orthopaedic device market to account for $872 million in 2022, which is 1.6% of the expected global value of that market segment. The market leader is Zimmer Biomet Holdings, Inc., which is estimated to hold a 17% share of the orthopaedic devices segment. The trend points towards a significant decline in device revenue for the Russian market, though it is still too early to confidently assign upper and lower bounds.