Wednesday, April 18, 2007

The Eight-Dollar Ultrasound

Flood a market with ultrasound machines, and see what happens:
(WSJ) General Electric Co. and other companies have sold so many ultrasound machines in India that tests are now available in small towns like this one (Indergarh, India). There's no drinking water here, electricity is infrequent and roads turn to mud after a March rain shower. A scan typically costs $8, or a week's wages.

GE has waded into India's market as the country grapples with a difficult social issue: the abortion of female fetuses by families who want boys. Campaigners against the practice and some government officials are linking the country's widely reported skewed sex ratio with the spread of ultrasound machines. That's putting GE, the market leader in India, under the spotlight. It faces legal hurdles, government scrutiny and thorny business problems in one of the world's fastest-growing economies.
But their business practice model was simple:
The company also teamed with banks to help doctors finance the purchase of their machines. GE now sells about 15 different models, ranging from machines costing $100,000 that offer sophisticated color images to basic black-and-white scanners that retail for about $7,500.

To boost sales, GE has targeted small-town doctors. The company has kept prices down by refurbishing old equipment and marketed laptop machines to doctors who traveled frequently, including to rural areas. GE also offered discounts to buyers inclined to boast about their new gadgets, according to a former GE employee.

"Strategically, we focused on those customers who had big mouths," said Manish Vora, who until 2006 sold ultrasounds in the western Indian state of Gujarat for the Wipro-GE joint venture.
Don't think these "big mouth" sales practices are limited to India. I just wonder what will happen when the U.S. market becomes saturated with low-cost imaging devices. Maybe the analogy does not stop there: should CT scans of the heart be performed in healthy 40 year-old men without risk factors for coronary disease? Should ultrasounds be performed on healthy women with normal pregancies just to determine the child's gender? And what will happen when these techniques are used in other male-dominated societies, like China?

I wonder...


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