Brazil seems an attractive market for medical device manufacturers. With almost 200 million people residing in the country, the potential for this market is a notch lower than China but much more substantial than most other emerging markets. Combine that with the fact that Brazilians enjoy universal public healthcare through the Unified Health System (Sistema Único de Saúde, or SUS), and you theoretically have a large market with easy access to medical devices.
Of course, nothing is that simple when it comes to healthcare. While Brazilians have universal coverage, the population does not necessarily enjoy universal access to medical devices, as some private facilities turn away SUS patients and the wait times and public facilities remain a barrier to healthcare access for much of the population. Additionally, that coverage is not so favorable to medical device manufacturers.
Consider this: SUS reimbursement for medical devices is defined by a price list that hasnt changed appreciably in the past few years despite fluctuations of the local currency, the Brazilian Real (BRL). The BRL has fallen to half its value compared to USD since 2011, from $0.60 to $0.29 US. That means a device that was getting reimbursed for $1000 US is now only getting reimbursed for $500 despite the BRL reimbursement price remaining the same. Medical device manufacturers are instead better off focusing on getting private insurance to pay for premium treatments. Despite only covering 25% of the population, the private healthcare market in Brazil is the second-largest private healthcare market in the world after only the US.
But to get a device covered by private insurance means that it has to be approved first by ANVISA (the Brazilian equivalent to the FDA), which is a complicated and confusing process. The difficult part of gaining ANIVSA approval of a medical device is not the requirement of scientific evidence (the technical file required is similar to that needed for FDA approval or CE mark, though it needs to be in Portuguese), but rather ensuring that manufacturing facilities have received a Brazilian Certificate of Good Manufacturing Practices (BGMP certificate). This process, which requires ANVISA to inspect all relevant manufacturing facilities using its own agents, was implemented in 2009 and has lengthened approval times up to five years in some cases.
ANVISA has recognized that these delays are a serious issue and has increased its number of agents and also is participating in the Medical Device Single Audit Program (MDSAP), and certain companies are able to gain market access in a more timely fashion if theyre a member of ABIMED (a medical device manufacturing association, mainly connected to foreign manufacturers operating in Brazil) or by moving manufacturing facilities to Brazil (to speed up inspection times). While these efforts and alternative pathways have helped ease the burden of gaining device approval in Brazil, the process remains time-consuming and complex, andas discussed abovedevice approval still doesnt guarantee universal access.
Make no mistake: Brazil is a lucrative market, worth approximately $7 billion in 2014 with lots of room to grow. Theres something to be said about getting in on the ground floor and hanging on for the ride. And there are positive signs here that the avenues to market access will get more efficient in the future, too. For now, its still a high risk/reward proposition, andat least until the MDSAP program gets fully up and runningmay remain out of reach for smaller medtech manufacturers.
Interested in learning more? View our Spectrum Report on Going Global.