Medtech Products in Brazil. December 2011 osec.ch
Table of Contents. 1.
Executive Summary. .................................3
2.
Market Overview. ......................................5
2.1 2.1.1 2.2 2.2.1 2.2.2 2.2.3 2.2.4 2.2.5 2.3 2.3.1 2.3.2 2.3.3 2.3.4 2.3.5 2.3.6
Overall Market Size. ................................................ 5 Imports .................................................................... 5 Market Drivers......................................................... 6 An ageing population. ............................................. 6 Government health policy. ....................................... 6 Private health insurance.......................................... 7 Growing number of doctors. .................................... 7 Medical tourism. ...................................................... 7 Market Segments. ................................................... 8 Hospital Consumables ............................................ 9 Diagnostic Equipments and Materials ..................... 9 Dental Products .................................................... 10 Orthopaedic Products ........................................... 10 Cardiovascular Devices ........................................ 11 Ophtalmic Devices ................................................ 11
3.
Domestic Manufacturers. ........................13
3.1 3.2 3.3
Competitiveness. .................................................. 13 Leading Brazilian Companies. .............................. 14 Multinational Companies. ...................................... 14
4.
Brazil’s Healthcare System. ....................16
4.1 4.2
The Public System (SUS). .................................... 16 Private Healthcare. ............................................... 17
5.
Hospitals and Diagnostic Laboratories. ..19
5.1 5.2 5.3 5.4
Hospitals. .............................................................. 19 Diagnostic Laboratories. ....................................... 20 Public Tendering. .................................................. 21 Avoiding Pitfalls..................................................... 21
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6.
Regulatory Environment. ....................... 23
6.1 6.2 6.3 6.3.1 6.3.2 6.3.3 6.4 6.5
ANVISA. ............................................................... 23 Company Licensing. ............................................. 23 Product Registration. ............................................ 23 Classification of Products ...................................... 24 Basic Documentation for Products Registration .... 24 Timelines .............................................................. 24 GMP Certification. ................................................. 25 Other Certificates. ................................................. 25
7.
Distribution. ............................................ 26
7.1 7.1.1 7.1.2 7.1.3 7.1.4 7.2 7.2.1 7.2.2 7.2.3 7.2.4 7.2.5 7.2.6 7.3
Options. ................................................................ 26 Hosting Company + Importer / Distributor : ........... 26 License-holding Importer / Distributor ................... 26 Local Manufacturer ............................................... 26 Own Subsidiary ..................................................... 26 Selection of Distributors. ....................................... 26 Regulatory Requirements on Distributors ............. 26 Sales force ............................................................ 26 Access to Market / Network / Reputation .............. 27 Participation at Trade Fairs and Congresses ........ 27 After-sales Services .............................................. 27 Strategic Convergence ......................................... 27 Partnership Agreements. ...................................... 27
8.
Marketing. .............................................. 28
8.1 8.2
Trade Fairs. .......................................................... 28 Other Promotion Channels. .................................. 29
9.
About the Authors. ................................. 30
1. Executive Summary. This report aims to provide a first glance at the Brazilian market for medtech products, and present a few challenges that Swiss companies will encounter when setting foot on Brazil. The cost and difficulties involved in the process should not be underestimated – but as the world’s sixth largest economy, Brazil offers business opportunities that merit closer attention. About two thirds of Brazil’s medtech demand is supplied by imports, which amounted to US$ 2.4 billion in 2010. The market is expected to continue growing at a rate of 6.1% over the next few years, driven by an ageing population and a growing number of medical practitioners, among other factors (see Chapter 2). There is a competitive national industry in some subsectors, including dental products and hospital consumables. Multinational corporations have also developed local manufacturing capacities, but the elevated local production costs hardly allow for using Brazil as an export platform (see Chapter 3). As the very high number of dental treatments and plastic surgeries suggest, Brazilian society puts a premium on physical appearance and well-being, even when medical services need to be paid out of pocket. Indeed, despite the introduction of a freeof-charge public healthcare system, more and more individuals and companies (for their employees) invest in private healthcare plans (see Chapter 3), sustaining more sophisticated medical service providers in the private sector. The latter adopt new medical technologies and actively contribute to spreading innovations beyond the established centres of excellence. However, many philanthropic and public hospitals still suffer from inadequate funding and management, complicating the task of medtech marketing professionals (see Chapter 5). Market access is contingent on product registration with the National Agency for Sanitary Surveillance, Anvisa. Depending on the classification of the product in question, this may involve an on-site GMP inspection by Anvisa (see Chapter 6). Since the product registration is assigned to the local distributor, it is essential to select distribution partners carefully. Before entering into a partnership agreement, criteria like sales force, after-sales services and strategic convergence need to be considered (see Chapter 6). Among other marketing channels, the Swiss Pavilions at the Hospitalar and CIOSP trade fairs are recommended as a showcase for Swiss companies interested in the Brazilian medtech market (see Chapter 8).
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7. Distribution. By Yvan Bernardin Medtech products require previous registration by the sanitarian authority (ANVISA) to be commercialized in Brasil. The product registration is a long, expensive and bureaucratic process that can only be done in the name of a company incorporated in Brazil and already certified by ANVISA with adequate AFE (Functioning Authorization of the Company, granted after another long, expensive and bureaucratic process). The product registration is valid for 5 years. It is therefore essential to choose the right local partner to register the products, beyond the questions of exclusivity established by contract.
7.1 Options. There exist several options to register and commercialize medtech products in Brazil: 7.1.1 Hosting Company + Importer / Distributor : Safe but expensive and not very motivating for the Importer/Distributor. The hosting company does not participate in the market development, and acts as a service provider at your expense, charging fees and full costs to register the products, and then a fixed monthly fee for the hosting service, regardless of whether products are imported or not. The market development for your products is fully assumed by the importer/distributor, and if you are not satisfied with his job, you can change at any time without re-registering the products. Comfortable for you but not so much for the importer/distributor... 7.1.2 License-holding Importer / Distributor Trust-based and consequently less safe. This is the normal situation : The exporter selects a high profile importer-distributor and then signs a distribution contract with him. The importer will take care of the registration process and will share its cost with the importer or will pay it in full in exchange of discount on products. A win-win relation must exist so that the partnership can be successful, because changing the importer-distributor in that case would mean to fully re-register the products at ANVISA, and lead with the exclusivity you may have granted by contract.
7.1.3 Local Manufacturer Not so common, and risky. In that case, the local manufacturer has an interest in complementing his product range, and he will act as an importer-distributor for your product line, to register, import and commercialize them in Brazil. As an advantage, he may have more efficient after-sales and maintenance services. But how can you be sure that he will put the same energy to sell your products as for his products ? And that he will not copy your products, as he already has industrial premises and probably R&D skills? 7.1.4 Own Subsidiary A long-term solution‌ Undoubtedly, if you can invest significantly and rely in the Brazilian market potential for your range of products, this is the best solution in a long-term vision. It will take at least 18 months to be ready for commercialization : around 12 months to create the company and obtain the adequate AFE authorizations from ANVISA, and then at least 6 months to register the products. Enough time to build your structure, recruit and train your local team, visit and convince your customers, and begin to disclose your brand in Brazil. This strategy requires time and investment but you will monitor and master your development. An option to shorten access-to-market is to buy a player or a competitor, with all ANVISA certifications, trained and experienced staff, loyal customers,‌ If you can afford it !
7.2 Selection of Distributors. When selecting a distributor, the following criteria need to be taken into account: 7.2.1 Regulatory Requirements on Distributors This is a necessary but not sufficient criteria to be your partner. Each AFE granted by ANVISA corresponds to very specific and controlled activities. To work with your product lines, the distributor must have the AFE to (import if necessary) store and sell Medtech products such as yours. It is therefore essential to check this before starting negotiations... One may argue it takes little time to extend an AFE, but we carefully recommend not to believe it! 7.2.2 Sales force This criteria must be carefully evaluated. Brazil is a huge country and an adequate sales force is required to reach all decision cen-
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