Health and medical to Brazil

Trends and opportunities

The market

Brazil is a complex market to navigate but represents significant opportunities for Australian companies.The market potential is huge, and this article details some of the key opportunities.

Brazil is the largest economy in Latin America and the 9th biggest in the world. Brazil’s healthcare market is the largest in the region and has undergone significant changes in recent years. Brazil has over 6,000 hospitals, of which 70% are private, 409,000 hospital beds, and 467,000 doctors [1] . Private hospitals have expanded and modernized to improve efficiency and provide better quality medical services, and approximately 80% of the medical equipment they use is imported [2] .

Brazil has a system of free and universal public health. Taxes paid by Brazilians cover all types of consultations and treatments offered by the Unified Health System (SUS) without charging any additional fee. The SUS is a fundamental structure for healthcare in Brazil, as a large proportion of the population is not able to access the private system.

Approximately 25% of the population has access to private healthcare [3] . Generally private health insurance is paid as a benefit to the employee and his family, which has helped to increase the number of people with access to better healthcare. Payment in Brazil is made through pay per service, but in order to reduce unnecessary costs, there are some discussions around implementation of a pay for performance system. The National Health Agency (ANS), establishes a list of procedures and prices that private insurance companies must provide to their members.

According to the World Bank, in 2017 private and public health expenses in Brazil corresponded to 9.1% of the GDP.

With a consumer market of some 140 million, it represents opportunity for Australian exporters across the board, including in health and medical technologies.

Australian companies CSL Behring, ALS Life Sciences, SDI and AD Instruments are established in Brazil, and many others exporting to the market.

To address the increasing prevalence of chronic diseases and a rising demand for better healthcare services, the Brazilian Ministry of Health has prioritized the digitalization of the SUS and has made significant investment in R&D for the development of innovative drugs and treatments. In recent years, Brazil’s healthcare market has opened up to foreign ownership in hospitals and clinics, and norms and standards of the sector are being harmonized to international standards to facilitate technology transfer and trade.

Brazil is a member of the Medical Devices Single Audit Program (MDSAP), in conjunction with Australia, US, Japan and Canada, which defines an international single regulatory audit program performed by an authorized auditing organisation. This makes it easier for Australian medical devices companies to expedite processes of approval to sell into the country. Brazil also joined the Global Digital Health Partnership (GDHP) along with a selected group of 13 countries. This initiative is led by the Australian Digital Health Agency (ADHA) and is a collaboration of governments, government agencies and the World Health Organisation to support effective implementation of digital health services around the globe.

Austrade has a proactive strategy to encourage more collaboration between Australia and Brazil, in the export of Australian technology and services, in the opportunity for Brazilian health and medical corporations to invest in Australia, and for more joint research development. We see opportunity in digital health, medical devices, pharmaceuticals and biotechnology.

Brazil is a member of the Medical Devices Single Audit Program (MDSAP), in conjunction with Australia, US, Japan and Canada, which defines an international single regulatory audit program performed by an authorized auditing organisation. This makes it easier for Australian medical devices companies to expedite processes of approval to sell into the country. Brazil also joined the Global Digital Health Partnership (GDHP) along with a selected group of 13 countries. This initiative is led by the Australian Digital Health Agency (ADHA) and is a collaboration of governments, government agencies and the World Health Organisation to support effective implementation of digital health services around the globe.

Austrade has a proactive strategy to encourage more collaboration between Australia and Brazil, in the export of Australian technology and services, in the opportunity for Brazilian health and medical corporations to invest in Australia, and for more joint research development. We see opportunity in digital health, medical devices, pharmaceuticals and biotechnology.

Opportunities

Digital Health

The sheer size of Brazilian healthcare market offer tremendous potential to use digital health to modernize and update their healthcare system.

The Ministry of Health announced possible investments of more than US$ 450m by 2019 to digitalize the public basic care units of the country’s Unified Health System (SUS). Private hospitals are also investing in technology and several new hospitals are obtaining international certificates for data management and reduction of paper use.

Among the most significant challenges in digital health in Brazil are high costs (alterations to premises, connectivity, equipment, training and communication); the country’s continental size and shortage of human resources to provide training in ICT for health.

Brazil has an immense potential for everything related to remote care, especially in remote areas with rural populations where there are fewer doctors and less infrastructure. The main drivers and motivators are related to costs of maintaining service units with qualified professionals, difficult access in several areas, the high cost of equipment and the transmission of knowledge and experience.

Australian expertise in this area can significantly contribute to build and improve digital health capabilities in the country.

In July 2018, Brazil joined the Global Digital Health Partnership along with a selected group of 13 countries. This initiative is currently led by the Australian Digital Health Agency (ADHA) and is a collaboration of governments, government agencies and the World Health Organisation to support effective implementation of digital health services.

Medical Devices

Brazil is the largest medical device market in Latin America, considering both local and multinational healthcare companies. The domestic production largely consists of low to medium end devices and is mainly focused towards the local market, whereas the high end medical devices and equipment are mostly supplied by foreign companies. The norms and standards of the sector have been harmonised to internationally accepted regulations for ease in transferring technology and conducting trade on a global level.

Opportunities exists in areas such as: diagnostics and monitoring equipment (innovative products to replace bigger and more expensive maintenance equipment), laboratory equipment, orthopedics, implants and new biomedical and advanced medical devices.

Pharmaceutical market

Brazil is the world’s 6th largest pharmaceutical market and fastest growing market in Latin America. The value of the Brazilian pharmaceutical market is about US$ 30,670 million.

The Brazilian pharmaceutical market comprises 392 companies, over 50,000 pharmacies and more than 500 distributors of pharmaceutical products.

Opportunities for Australian companies include large local pharmas actively seeking collaboration with other biotechs and pharmas to bring innovative therapeutic options to Brazil (e.g. new molecules, technologies, incremental innovation) in very flexible business model such as: co-development, licensing, distribution and so forth.

The production of generic medicines is growing rapidly in Brazil with approximately 2,000 new products registered every year. The low-cost generic and biosimilar sectors will play an even greater role, as the Brazilian government seeks to find cost-effective treatments and suppress copy medicines.

Biotechnology

Brazil is one of the most promising countries for biotechnology and is well placed to be a major player and partner in building global value in the bio-business arena. Home to almost 20% of the world’s genetic and chemical biodiversity, Brazil is internationally recognized for its scientific competence in health research. The country turns to bio-business as it witnesses the emergence of many promising start-up companies. The confluence of government support, a mature scientific community and a blooming venture capital industry, has contributed to making Brazil an excellent place for collaboration and investments in biotech.

The development of the biotech sector is a focus for the Brazilian government in the coming years, with investments of over R$ 200 billion in several programs through Brazilian Development Bank (BNDES) and Brazilian Innovation Agency (FINEP) to support research, development and innovation plans in areas such as Oncology, Antiinfectives, Metabolic Disorders, Central Nervous System and so forth.

Registration of health and medical products in Brazil

Medical device manufacturers need to obtain ANVISA (Brazilian Health Surveillance Agency) approval prior to selling their products in Brazil. Brazil has four classes of devices with ascending risk, and two registration pathways: ‘Cadastro’ and ‘Registro’

The ‘Cadastro’ registration is for lower risk devices, has a simplified application, and typically takes less time than ‘Registro’ .

Product Classification

Devices are classified into four classes based on risk (Class I-IV).

  • Class I (low risk) – Non-invasive products (around 3 months for approval)
  • Class II (medium risk) – Invasive products (around 3 months for approval)
  • Class III (high risk) – Surgical products (around 3 months for approval)
  • Class IV (maximum risk) – permanent implants and surgical products for long-term use with direct contact with the central nervous system, coronary system or biological absorbed. (from 8 - 15 months to up to 3 years)

Comparison between risk classifications for Medical Devices (ANVISA X CE Mark X FDA)

All classes require ANVISA approval ANVISA CE Mark FDA
  I I I
  II IIa II
  III IIb III
  IV III III

Market entry

Austrade strongly recommends that Australian exporters obtain professional legal and accounting advice before conducting business in Brazil. Austrade can provide referrals to service professionals.

In order to succeed in Brazil, a sound business plan, a longer-term strategy and some degree of local presence is required. Important points to address include:

  1. Setting up a local subsidiary or through a merger/JV or acquisition. It involves the process of registering subsidiary and products in order for the Australian company to start bringing products into Brazil.
  2. Identification of a local distributor that will market and distribute the products through different channels and regions in the country. In this case the licensed distributor owns the registration of the product.
  3. A smaller number of exporters establish representative offices due to the high costs involved and needs that cannot be met by local agents or distributors. Examples include but are not limited to: businesses that need a high degree of control over their products and after-sales service or have commercially sensitive intellectual property.
  4. Identification of a properly licensed company, that acts as a neutral agent to hold the registration on behalf of the foreign manufacturer enabling them to export and distribute the products into Brazil through different distributors.

Tariffs and Regulation

The Brazilian legislation mandates that all medicine devices & equipment and medicines should be approved by the Brazilian Health Surveillance Agency (ANVISA).

This is a bureaucratic and drawn out process which could require waiting time depending on the classification of the product. Consequently, players who want to commercialize products in Brazil have to take a medium to long term view.

Tariffs and duty rates are constantly revised and are subject to change without notice.

Austrade strongly recommends you to reconfirm these prior to selling to Brazil.

Key Healthcare events in Brazil

Global Summit Telemedicine & Digital Health
4-6 April 2019
São Paulo
http://telemedicinesummit.com.br/en/

Hospitalar Trade Show, Brazil
Largest healthcare tradeshow in Latin America
São Paulo
21-24 May 2019
http://www.hospitalar.com/en/

FCE Pharma, Brazil
Main tradeshow for the pharmaceutical sector in Latin America
São Paulo
21-23 May 2019
http://www.fcepharma.com.br/en/

Bio Latin America 2019
Main trade show for the Biotechnology sector in Latin America
São Paulo
Dates TBC
https://www.bio.org/events/conferences/bio-latin-america-conference

Links and resources

ANVISA (Brazilian Health Surveillance Agency) www.anvisa.gov.br
ABIMO (Brazilian Medical Devices Manufacturers Association) – http://brazilianhealthdevices.com.br
ABIMED (Brazilian Association for the High End Technology Health Medical Devices & Equipment Manufacturers and Importers) - http://www.abimed.org.br
Business Monitor International – http://www.businessmonitor.com/
World Atlas – http://www.worldatlas.com/articles/countries-with-the-biggest-global-pharmaceutical-markets-in-the-world.html
The National Bank for Economic and Social Development – http://www.bndes.gov.br
Opportunities and Challenges ICT Industry in Brazil – http://www.s-ge.com/en/filefield-private/files/60917/field_blog_public_files/69663
World Atlas - Biggest Pharmaceutical Markets in the World by Country 2016

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[1] National Registration of Health Establishments (CNES), Ministry of Health, 2017
[2] Brazilian Association of Private Hospitals (ANAHP), 2017
[3] National Health Agency (ANS), 2017

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