Opportunities in the Brazilian Market for Medical Products and Devices
The market for medical products and devices in Brazil, estimated at R$ 8 billion (US$ 4.5 billion) continues to expand. From 2008 to 2009 the market grew by 6% and is expected to increase by more than 10% in 2010 according to estimates by ABIMO - Brazilian Medical Devices Manufacturers Association. The optimism of the industry takes into account the prospects of growth in the Country, which might surpass 6,0% this year. In the pharmaceutical market for example, predictions point to a 13% evolution in 2010.
Trade balance figures show that in 2009, Brazilian exports totaled US$500 million, while imports reached US$2.7 billion; a significant deficit. Public purchases represented 21,5%, private sector 68,6% and exports 8,8% of the market, respectively
The conclusion that Brazil is already a key player continues to gain traction in the international market. Last year, Brazilian companies were able to close deals with buyers from Ukraine, Poland, Romania and Moldavia, as well as register more than three thousand contacts with representatives from 108 different countries during the largest medical-hospital fair in the world (Germany). However, major buyers are based in USA (25,8%), Argentina (8,1%) and Mexico (6,9%). Brazil has approximately 500 manufacturers of medical, hospital and dental equipment. Company size includes 52,2% mid cap and 25,7% in the small to micro cap range.
Orthosis, Prosthesis and Related Material (OPRM), used in medical interventions accounts for up to 80% of a hospital bill. The technological advancement of this field has been remarkable, mainly in some specialties like spine, orthopedic and cardiovascular surgery.
Since May 2010, it became mandatory for all requests for registration, revalidation and post registration amendments to present a GMP (Good Manufacturing Practices) certificate issued by Anvisa (the Brazilian FDA). Previously, presentation of the document was restricted to medicines. It´s one of the agency´s competencies to oversee the quality of medical equipment and grant its authorization. Today, roughly 85% of all registration requests for medical equipment and orthopedic implants are not approved on the first attempt. The companies are requested to make corrections for poor elaboration of the dossiers. Initial denials range from the absence of a document, a test or even the lack of clarity on the information provided. Anvisa, nonetheless, tries to improve its methodology for registration granting, ensuring higher speed and competitiveness for companies.
“Due to the huge growth of this industry, both national and international manufacturers are interested in broadening its activities by improving its manufacturing quality and/or assessing the possibility of having a production base installed in Brazil. In a market that frequently doesn’t see much competition on the quality and technology side, foreign companies are constantly gaining room in the Brazilian market”, said Glauco Santos, director of Register Brasil, a regulatory consulting company in Brazil.
It’s important to highlight that a normative resolution by the National Health Agency-ANS, RN 211 January 2010, updated the set of procedures and events that health plans are obliged to cover, including high priced items such as some OPRMs. The resolution entered into force on June 2010, with the inclusion of exams such as PET-scan (Positron Emission Tomography), Hyperbaric Oxigenotherapy and Periungueal Capillaroscopy. RN 211, added 54 procedures to medical-hospital plans as well as 16 to dental, to a list totaling more than 3000 items. This forces hospitals and clinics to update and adapt to the new guidelines.
In regards to pharmaceutical products, the Ministry of Health, which usually purchases on the grounds of the lowest price, has changed its methodology to avoid buying low quality products usually from developing Asian countries. Local content has become more important in this decision. A similar trend is observed with medical products and equipment. Products made in Brazil, undergo strict quality control, avoid high import tariffs and take advantage of the proximity of the consumer market. There is a huge potential for foreign companies, since most of these products still come from abroad.