BURLINGTON, Mass., June 12, 2015 /PRNewswire/ -- Decision Resources Group finds that economic instability and fluctuating currencies have created numerous hurdles for medical device manufacturers in Latin America. Brazil and Argentina in particular are facing difficult economies, and both countries have felt the impact of slowing economic growth in China, a key export partner. The combination of a strong USD and slumping Latin American currencies has also created challenges for distributors because devices are purchased from manufacturers in USD but reimbursed in local currency; as these currencies fall, the value of the reimbursement paid to distributors decreases in relation to the USD price. As a result, it is expensive and increasingly unprofitable to import devices into Latin American countries.
Other key findings from recent Medtech 360 reports covering Latin America:
- Facilities equipped to perform advanced procedures are primarily concentrated in one or two major cities in each Latin American country. This has led to regional differences in care and complicated distribution landscapes that are difficult for companies to navigate. This trend is less prevalent in Colombia, where treatments are available in a greater number of cities.
- Funding for public facilities in Mexico is currently low, although the private sector is well developed. Due to the high volume of medical tourists, private facilities have state-of-the-art equipment, creating disparities in access despite the presence of universal health care; very few Mexican patients have private health insurance.
- Device overuse and overpricing are rampant in Colombia, leading the government to begin rolling out formal price controls in March 2015. Price regulation was first implemented for coronary stents, and other devices will be regulated over time.
- The so-called "Prosthesis Mafia" has recently come to public attention in Brazil. The government is currently investigating allegations that distributors have heavily inflated device prices, and one television network has accused physicians of accepting payments in exchange for performing unnecessary procedures.
Comments from Decision Resources Group Analyst Fernando Amador:
- "Some manufacturers are beginning to bypass distributors in order to increase profit margins or to better compete with low-cost domestic manufacturers. The direct-selling strategy is most difficult to implement in Mexico, where distributors have historically been even more prominent that in the other Latin American countries. To sell directly in this country, companies will have to build strong relationships with opinion leaders and invest heavily in educational programs for physicians."
- "Supply shortages for basic medical items have been common in Argentina due to the poor economic landscape. However, the upcoming Argentinian presidential election will create greater confidence in the market, and the economy is expected to improve. This will provide a more favorable market landscape in the future."
- Recent reports on this topic include Latin American Markets for Peripheral Vascular Devices 2015, Latin American Markets for Interventional Cardiology Devices 2015, and Latin American Markets for Urological Devices 2015.
- Further resources on this topic can be found in Decision Resources' Global Market Access Solution for Medtech.
- Karen Gierszewski has written a blog on the subject, which can be found here.
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About Decision Resources Group
Decision Resources Group offers best-in-class, high-value data, analytics and insights products and services to the healthcare industry, delivered by more than 700 employees across 15 global locations. DRG companies provide the pharmaceutical, biotech, medical device, financial services and payer industries with the tools, insights and advice they need to compete and thrive in an increasingly complex and value-based marketplace. DecisionResourcesGroup.com.
SOURCE Decision Resources Group