Tuesday, December 18, 2012

Brazilian Health Devices Industry Growth Disappoints

The Brazilian Association of High Tech Industry of Medical Equipment, Products and Supplies (Abimed) has recently shown the unsatisfactory results of the Brazilian health devices industry in 2012. Although it has grown above Brazilian growth rate (around 2%), the sector expected a higher progress at the beginning of the year.

The health devices market presented an increase of 4,2%, the industry showed a rise of 3,2% and the sector has created 5 thousand new jobs, which represents an increase of 3,2%.

There are many explanations for this disappointing fact. The national economic growth presented a terrible performance (not only because of the international crisis, but also because of the Brazilian structural problems), the National Health Surveillance Agency strike which jeopardized the health market supply and the slowness on inspections at international factories. Abimed also indicates that the devaluation of the exchange rate and the absence of support for innovation and local production postponed the development.

However, the Association believes there is space for a 10% rate of growth in 2013.

Brazil is the sixth economy in the world and it represents a 2,8% in World’s GDP, but only a 0,5% in the world’s health devices market. (…) we believe in the economic recovery.
Carlos Goulart
President of Abimed

Friday, December 14, 2012

Happy Holidays, everyone!

Biokyra wishes you a New Year full of peace and hope.

Happy Holidays, everyone!

Team Biokyra.

Friday, December 7, 2012

Be welcome, Innovation.

From Europe 2020 to Strategy for American Innovation. From Brasil Maior to Industrial R&D Promotion Programme. All the governmental programs mentioned above try to create conditions and stimulate a national foundation for innovative industries in the European Union, United States, Brazil and India. Innovation seems to be the answer for national development and sustainable economic growth.

Seeking to increase a better understanding of innovative approaches and measurement, the Organization for Economic Co-operation and Development (OECD) developed the Oslo Manual[1], which provides guidelines for collecting and interpreting innovation in an internationally comparable manner. Even with limitations, every new edition of the Oslo Manual represents a step forward to the understanding of the innovation process.

Using the meanings and criteria of the Oslo Manual, the UNESCO Institute of Statistics presented the 2011 UIS Pilot Data Collection of Innovation Statistics[2]. Comparing 12 countries from different regions and at different levels of development, it seeks to show the different stages of innovation process around the world, taking especial attention to developing countries.

As one shall conclude, innovation is a concern for both developed and developing countries. With different levels of innovation process, each one acts according to its needs and goals. Catching up is the main target for developing countries in order to not fall behind in international trade and development. As for developed countries, they have reached a stage of progress that the only way of not becoming outdated is with
“(…)Investments, technology development, innovation and good management practices(…)”
President Dilma’s speech, April 3rd, 2012

[1] For further information about the Oslo Manual, access http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/OSLO/EN/OSLO-EN.PDF
[2] For further information about the 2011 UIS Pilot Data Collection of Innovation Statistics, access http://www.uis.unesco.org/ScienceTechnology/Documents/Innovation-statistics-en%20(2).pdf

Tuesday, November 20, 2012

Cardiovascular Diseases: a Global Concern

Although the world of the new millennium has seen many improvements in the health sector, the path of healing diseases is far to be overcome. Cardiovascular diseases (CVD) are still huge challenges for the medical society.  More people die annually from this kind of illness than from any other cause and that is the reason why it has been given an especial attention worldwide.

According to the World Health Organization (WTO), an estimated 17.3 million people died from cardiovascular diseases in 2008, representing 30% of global deaths. Coronary heart diseases and stroke are the main causes of these deaths (almost 80%). It is well known worldwide the main factors that increase the probability of getting a stroke: unhealthy diet, physical inactivity, overweight, high blood pressure, tobacco use and harmful use of alcohol.

Besides, low and middle-income countries are the most affected, about 80% of world’s death from CVD. As reported by the WHO, “people in low and middle-income countries are more exposed to risk factors such as tobacco (…). At the same time they often do not have the benefit of prevention programs compared to people in high-income countries.” Meanwhile, at a macro-economic level, it represents a heavy burden on the economies of low and middle-income countries. Non-communicable diseases – including cardiovascular and diabetes – are estimated to reduce GDP by 6,77% in low and middle-income countries facing rapid economic development.

The programs to fight against cardiovascular diseases are highly expensive. Integrated actions at country level, led by governments, are the means to maintain the people away from risk factors and, hence, not allowing it to become a burden on national economies.

There is no difference in Brazil. Around 300 thousands of people die from cardiovascular diseases each year, according to the Brazilian government. Nevertheless, by the public healthcare system (SUS), the government provides many preventive actions programs, diagnosis and free treatments for CVD.

Tuesday, November 6, 2012

Medical Devices Industry in Developing Countries

With the arrival of the 21st century, a new era both in global technology industry and economic growth model began. Developed countries left the second industrial revolution behind and started focusing on the new generation of technologies: information technology, nanotechnology, internet, biotechnology. We are led to think that developing countries are still not capable of supporting this kind of industry, for requiring huge investments in R&D departments and qualified teams (without mentioning investments in infrastructure, energy and transportation). But there are some countries that are showing the world that this change is happening in the medical device sector.

 It is known that United States is the biggest global importer in this sector and verifying its top 5 importers partners of “Instruments, appliances for medical, etc science, nes (UN Comtrade HS901890), one will find that two of them in the last four years are developing countries: Costa Rica and Dominican Republic.

The exports of HS901890 from Costa Rica to the USA sum twice the exports from Canada and Japan to the USA combined and it is higher than the export from Ireland (another top 5 import partner of the USA) to the USA. In the “Case of Costa Rica – Facts and Implications for Trade Policy”, presented by the Minister of Foreign Trade from Costa Rica in the WTO public forum, September 19, 2011, we can verify Costa Rica’s evolution on the structure of industrial exports since 1994 until 2010 and it shows that it is possible for countries in development to improve its industries, technologies and R&D departments. In 2010, Costa Rica’s top 10 export products included microchips, medical prosthesis, pharmaceutical, computer parts and transfusion equipment. In 2003, Costa Rica was consolidated as one of the main Foreign Direct Investment (FDI) locations in Latin America and in 2010, the first high-tech exporter in the continent.

The recipe of this success is simple and well known: political and economy stability (hence, FDI attraction), solid export platform, investments in human resource base (education, language skills), good geographic location (in the middle of America and close to the USA market). But according to the CIA – World Factbook of 2012, there are still things remaining to be improved like bureaucracy and legal uncertainties.

For the studies of international trade, however, exports are considered as belonged to the country of origin. But if we make a deeper analysis, we will see that, in the case of Costa Rica, the majority of the medical device companies are multinationals with international resources and not a national initiative. Nevertheless, even if the main investments are from abroad and there has to be royalties and profit transmission, Costa Rica is responsible for the attractiveness of foreign direct investments. If this country wouldn’t have created reliable conditions for multinationals, they wouldn’t have been established in its territory. With the construction of this scenario, Costa Rica is earning international visibility and confidence, which are responsible for the creation of jobs and national development.

In the case of Brazil, country where Biokyra is established, the production in this area is still shy.

       The Brazilian capacity utilization is insufficient to supply its demand. One of the reasons why this happens is the size of the market. Brazil is the 5th biggest country in population and it has a public health care that attends everyone. Apart of its demand and needs, the national production and offer are still taking their first steps. Considering that the USA is the biggest export and import player in this sector, Brazil is its 11th biggest export partner, but only its 32nd import partner (based on HS901890, UN Comtrade). The reasons why Brazilian medical device industry is falling behind other developing countries industries are the same reasons for the entire Brazilian industrial complex. Basic investments needs in energy, infrastructure, transportation, and logistics are still an obstacle for Brazilian development. Bureaucracy, slowness in legal procedures, high taxes and low-qualified labor represent some other difficulties faced by entrepreneurs, export/import and logistics professionals.

As one shall see in the graphic, the deficit between imports and exports is still huge. In 2010, while Brazilians were exporting U$600 million, they were importing more than U$3 billion of this kind of medical device. In the graphic, based on HS901890, we can see clearly the difference between imports and exports. Nevertheless, there are governmental programs and financial aid to promote any kind of export in Brazil. In the case of medical devices, the program is called “Brazilian Health Devices”, which is supported by ABIMO (Brazilian Association of Medical Devices and Equipment), in association with Apex-Brasil (Brazilian Agency of Export and Investments Promotion). It brings together 140 enterprises of this sector and it has helped increase international sales in 260%. Stimulus to get the FDA certificate, internationalization program, strategic planning and international trade missions are examples of actions that “Brazilian Health Devices” provides. Even if there are still many obstacles to be overcome, Brazilian governmental is trying to make Brazil a great nation for R&D and technologies investments.

Friday, October 19, 2012

Strategic Action in a Global Market

International market is an opportunity for business growth. Enterprises become more profitable and competitive once they have to face global market and foreign competitors.  In the 21st century, companies can’t escape from internationalization or the effects that it causes in national economies. The health industry is no different. In 2009, the sales in this sector reached U$289 billion worldwide and it is expected to reach U$487 billion in 2016, with an annual growth of 7%; there are more than 27 thousands enterprises around the world, employing more than one million people.

Since it is an industry that requires new technologies, high investments in R&D and a highly qualified team, most of medical devices production concentrates in developed countries.


As shown in the graphic, the global top 5 exporters[1] of “Instruments, appliances for medical, etc science, nes concentrate more than half of exports, which reached more than U$40 billion in 2011.

Once an enterprise decides to internationalize, it has to consider: if its country belongs to any free trade area or bilateral agreement (it is usually easier to export to these countries); size and growth rate of the market, national and international competitors in the destination country, as well as national taxes of imports, definition of a strategy, logistics of exports. One important detail one shall consider, when deciding to export, is the non-tariff barrier. Even when there is no significant tariff barrier or national taxes of imports, there might be a barrier like quotas, technical or sanitary standards, administrative and bureaucratic delays at the entrance. Due to a strong international regulatory system about tariff barriers, countries are adopting non-tariff barriers as a way to protect their national industry and, in the same time, not “disobey” standards and rules in international trade.

The strategy for enterprises in this sector has had to be reviewed after what happened to the global economy in 2008 and 2009. Big medical devices companies are now paying attention to China, India and Brazil. Looking at the size of the population and the way they are gaining higher buying power, companies are trying to learn and understand how to approach these markets.

But, like in any other sector, selling a medical device in a developed country is not the same as selling it in a developing country. The different scenarios and culture complicate the sale of a standard product. Therefore, products are been created specifically for these emerging markets. Instead of selling the same product to developing and developed countries, companies are creating products for emerging markets. We have to consider that not all the companies are taking this step. Most of them are wary and skeptical about the returns they will obtain taking this strategy. There are a few enterprises that are already doing business in these countries, especially the European ones.

Like in any other company that has to customize their product according to the different countries or areas, there has to be two (or more) strategies and two (or more) lifecycles working in the same organization. So, it is important to have a good marketing team that deeply studies and examines the target market.


[1] One shall consider that Mexico belongs to the North America Free Trade Agreement (NAFTA); the USA is the biggest importer in the world representing 20% of the world’s demand and Mexico is its biggest provider.

Friday, September 28, 2012

Medical Device Development: step-by-step

The development of medical devices requires rigorous regulatory requirements, careful planning and strategies for commercialization, pursuit for new technology and improvements.  While we see various commercially successful medical devices in the market, no comprehensive development model has been published.

Apart from the company size and the market they share, medical devices companies have a very similar strategy to develop and get their products to market. Scientific researches about medical device project and development process are very good references to the product development strategy of the companies and help them to improve and validated their models.

Stanford University’s researchers have studied the process of how medical technology is brought to market. The model developed by Researchers at the Stanford University Program in Biodesign divides the development in six phases:

The clinical need must me identified and understood by the inventors and devices companies, this phase can be achieved, by direct observations, talking to patients or doctors. A large list of medical needs is made based on market size, clinical impact, and intellectual property.

When the need is identified, a review of all the perspectives is made. Market size, intellectual property, competitive structure, financial resources, regulatory requirements, likewise defining strategies.

Concept definition and feasibility take place in this phase, as well as strategies definitions. To accomplish the concept definition, both brainstorming sessions and 3D CAD occur. It is frequent to see the team’s marketing and the team’s R&D meeting with potential users (doctors, nurses, technicians, patients and others) to catch the clients’ attention. In addition, in Phase II we see the team of devices companies defining and analyzing the risks that can happen during the project.

In this phase, the team creates a test to verify and validate the concept, although the tests only occur in Phase IV. These tests involve both engineering and quality tests. Many steps of this phase are conducted and reviewed by members of clinical regulatory departments, including FDA (in the USA). Likewise, the production of documentary records.
Final validation, final product design and regulatory approval take place in this part of the process that brings medical devices to market. Final product design must conform to ergonomics standards.  Quality system starts working to define, document and approve the business, which contains both product and administrative perspective.

Before the launch, doctors will have received training to use the new device. Once it has been approved that the medical device is successful, both launch and distribution will take place. With the new device been used widespread, literature and indications of use are made and approved by FDA (in the USA). R&D has a main role in this phase since the device requires continuing improvements.

         Stanford University Program in Biodesign research was based in more than 80 experts in the private and public sectors, including industry representatives and FDA officials.

         Biokyra follows its own product development process that is generically very similar to Stanford Model. Each country has its own regulatory system so that the product development process should adapt to those particularities.

          To develop a medical device is not an easy task but when it is done following a systematic method or model the process will be efficient, the results will be successfully accomplished and the market will have their needs met.

References: http://medicaldesign.com/mag/model_device_development_0908/

Tuesday, August 21, 2012

Physicians and engineers: boosting communication

         Observing the experiences acquired from an engineer studying to become a physician, a question comes to mind: how ally the acknowledgments from two areas apparently and practically too different? Some institutions are promoting symposiums to find a link between medical doctors and engineers aiming to achieve a better communication and consequently develop better projects in the future.

        The main issue consists in two different mindsets; while surgeons are looking for solutions to improve their acquired skills, engineers are trying to be more innovative developing devices with new capabilities able to accomplish the same task. The fact is that the medical expectation is different from the engineered progress. The engineers have a challenge between the innovation and the conventional medical practice.

        According to Dan Buckland, an engineer who is training to become a physician, communication between physicians and engineers can be sometimes a little noisy because of the way they are trained: “Engineers learn to always approach a problem from first principles, whereas physicians are trained to see problems from a categorical view”. This happens due to their distinct training, point of view and also because of their experiences and perspectives.

        Improving communication between both parts will drive to an optimum way of finding solutions. To work in cooperation, surgeons should realize that engineers are trained to solve problems by optimizing the results and they are not going to consider “surgeons’ way of doing” as optimal. Likewise, the experience of senior and junior surgeons is essential to help engineers to design innovative products to save lives and assist surgical procedures to become faster and more efficient.


Friday, July 6, 2012

Brazilian Reinforced Medtech Market

The already high-growth medtech market of Brazil has been reinforced by the announcement of a stimulus package for national medical technology companies and hospitals. President Dilma Rousseff published on Wednesday 27th measures focused on the government acquisitions of equipment and capital goods for the healthcare system, reassuring the expectancy of this particular market to reach $20 billion by 2015 in Brazil.

Healthcare equipment manufactured by Brazilian companies will have preference on public orders, with a preference margin of 8% to 25% over the price of imported equipment. Moreover, special credit from the Banco Nacional do Desenvolvimento Econômico e Social (BNDES) will be available for the states and cities to modernize the health service, from the basic to the most complex concerns.

Brazil has the largest economy and largest medical device market in Latin America. With the implementation of these practices, an impact of R$ 2 billion and creation of 5 thousand jobs is expected, apart from the collection of R$ 50 million in taxes.

Monday, June 4, 2012

Brazilian private and public health system coverage growth

Brazilian health insurance market has reached revenues of  US$ 41 billion in 2011, increasing 11.7% over 2010, according to the National Health Agency (ANS).

The number of people covered by health insurance increased 4.3% and reached 47.6 million in December (about 25% of the brazilian population).

There were 1,600 health insurance operators in Brazil by the end of 2011. Three major health insurance groups - Amil, Bradesco and Intermédica - have approximately 13 million customers, which means nearly 30% of the 47.6 million users.

Following the same growth trend, SUS (Brazilian Public National Health Care System) has coverage of about 63% of the brazilian population and carries out 75% of the high-complexity procedures, playing a very important role in the entire health care chain in Brazil.

Although still representing around 1.2% of world medical products market, data indicates a growth rate above the world average in Brazil, while the government has been creating several incentives for the development of domestic medical products industry.