Second World Health Organisation’s Global Forum on Medical Devices

The Second World Health Organisation’s Global Forum on Medical Devices took place in Geneva on November 22-24th and gathered together the academia, international organisations, industry and NGOs. While one of the WHO’s strategic objectives is “to ensure improved access, quality and use of medical devices”, during this event the organisation emphasized how important it is to align medical device innovation with the public health need. According to the WHO, there is a mismatch between these two spheres.

      After hearing the stakeholders’ opinion, five insights were listed to help the industry work towards resolving the mismatch: 4 ‘A’s define the agenda to improve access to appropriate medical devices (Availability, Accessibility, Appropriateness, and Affordability); Diagnostics industry contributes to low resource settings beyond Corporate Social Responsibility activities; Bring research and manufacturing to low resource settings; Young entrepreneurs have a good grasp of localisation; Mobile is the way to go.

       To know more about the event, go to  www.who.int/medical_devices/2nd_gfmd/en/ 

References: http://www.medtecheurope.org/blogposts/195/40/blog/2013/12/02/5-WHO-Insights-into-conquering-the-medtech-mismatch

“3D: Printing the Future”

           3D Printing, or more professionally called Additive Manufacturing, is a process of making three dimensional solid object from a digital model. It can print in plastic, metal, nylon and so many other materials. It can make manufacturing prototype, end user products and even human organs by using a person’s own cells. This is possible because of its technology: it creates a three dimensional object by building it layer by layer successively.

        Besides the industry sector and academic researches, 3D Printing is being used by physicians and surgeons. The most recent event, that was all over the international media, is a case that took place in the United Kingdom. Surgeons are using 3D Printing to rebuild a patient’s face which was crushed in a motorbike accident. However, the surgery hasn’t been booked yet. The theme became an exhibition at the Science Museum in London and it is called “3D: Printing the Future”.

References: http://www.3dprinter.net/reference/what-is-3d-printing

        http://www.bbc.co.uk/news/uk-wales-south-west-wales-24926598

Brazilian Healthcare Industry: first semester of 2013

In the first semester of 2013, the Brazilian medical device sector increased 6,5% (compared to the same period of 2012). This is according to Abimed (Brazilian Association of High Technology Equipment, Products and Medical Supplies). This association represents 150 healthcare companies which are responsible for almost 60% of the Brazilian medical device sector.

According to the report, the sales were also increased by 8,6% and the sector was responsible for the creation of 3500 new jobs, both industrial and commercial sector. These numbers are way above national economy average.

The healthcare sector represents 0,6% of Brazil’s GDP, gathers 13 thousand companies responsible for 120 thousand jobs and its revenue was about US$ 9 billion in 2012.

References: http://www.abimed.org.br/notPadrao.aspx?idNoticia=110

Medtech Companies: Prepare for an Innovation Makeover

A report from PricewaterhouseCoopers’ (PwC) Health Research Institute concludes that Medtech companies must change the way they innovate. In a new economy that rewards better care, innovation is the key if they want to keep adding value to its customer.

The report indicates new alternatives for medtech companies to innovate and become more competitive, outside traditional research and development. The report also shows a survey made with medtech executives, with questions about their innovation activities. PwC analyst suggest a innovation makeover for medtech companies, because customers (either hospitals, accountable care organizations or individual customers) now demand more in financial, convenience and health terms.

“Medtech companies must focus more on service and business model innovations that meet new industry demands rather than on incremental product improvements.”

Besides, the report suggests three ways for medtech companies to innovate: operate as a “lean startup”, new innovation metrics and get closer to the patient.

References: http://www.mpo-mag.com/contents/view_breaking-news/2013-10-24/report-medtech-firms-must-change-approach-to-innovation/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%253A+MPOBreakingNews+%2528Medical+Product+Outsourcing+Breaking+News%2529

Emerging Markets: Brazil and the Medical Device Industry

Since the 2008 crisis that took place mainly in the United States and Europe, it’s been said a lot about the opportunities in emerging countries. But one shall be careful when analyzing these markets and try to evaluate its potential as objectively as possible.

        When it comes about Brazil and the medical device industry, some challenges one may face when trying to approach this market. Some of them are the bureaucracy, strong regulatory system added to long timelines and delays, high taxes and a structure that varies according to the product which makes hard to know in advance how much the price will be for the final customer.

        However, when you overcome the language and the cultural barriers, it is all worthwhile because Brazil is a huge market, with more than 190 million people, a large public healthcare system which represents 4.1% of its GDP, a US$4 billion in imports and US$700 million in exports of medical devices.

References: http://www.emdt.co.uk/article/medical-devices-brazil-oportunity?cid=nl.emdt03

Celebrate!
October 18 – Brazilian Doctor's Day

Google will start a new company focused on healthcare and biotechnology

Calico will be a new company focused on “health and wellbeing, in particular the challenge of aging and associated diseases”, says the company CEO and co-founder Larry Page in a Google+ post. He goes on in a press statement arguing that, even though the healthcare sector is a lot different from what Google does today, he believes that his company can “improve millions of lives”.

Google hasn’t released any specific plans or projects yet, but to keep the shareholders from worrying, Page says that these investments are very small in comparison to Google’s core business. This is Google’s second effort in the healthcare and biotechnology industry. Google Health was an attempt to store patient medical records online and it was abandoned because of privacy concerns. Besides, app developers in Google were also focused on others projects like Google Glass.

References: http://www.mddionline.com/article/google-calico-wants-you-live-forever

Global Cardiovascular Medical Devices Market by 2015

A report made by Research and Markets suggests that the global cardiovascular medical devices market will worth $65.6 billion by 2015. The report covers the years between 2009 and 2015 and it expects that the market of these devices will have grown at the compound annual growth rate of 9,8%.

When talking about regional markets, it indicates that North America will have the biggest share of the market at 40%, followed by Europe with a share at 30%. Asia-Pacific will be fastest growing region with a growth rate of 11,6% (comparing to the global growth rate of 9,8%), the market is expected to worth $17.9 billion by 2017.

Finally, Research and Markets divides the cardiovascular medical devices market in segments and for each one, the company indicates the CAGR (compound annual growth rate) and market values. For example, it expects that the Cardiac Rythm Management Devices will worth $22.3 billion at a rate of 9.9% by 2017, followed by Interventional Cardiac Devices that will worth $12.3 billion at a rate of 11.6%.

References: http://www.mddionline.com/article/global-cardiac-medical-devices-market-be-worth-656b-2015

Brazilian Healthcare Market 2012: a retrospective

    As an innovative industry, the Brazilian healthcare industry exports to more than 180 countries and generates around 100 thousand jobs in the national territory. The sector is considered an important component in the Brazilian economy. And so, it is important to analyze its updated market numbers.

   ABIMO is the Brazilian Healthcare, Medical and Dental Equipment Industry Association. It releases healthcare market numbers every year. One can access some of the 2012 statistics in ABIMO’s official webpage. There are information about the healthcare national production value, productivity, investment, international trade, national production and demand, Brazilian taxes, etc. Some indicators draw more attention than others. The “healthcare national production value” is one of them, as it reached almost R$5 billion (more than US$2.17 billion) last year. “Investments” is as well an important indicator and it represented more than R$300 million (more than US$130 million) in 2012.

    Unfortunately, the Brazilian healthcare industry must be careful about the numbers of international trade (imports surpassed exports) and the national production only represents 38,9% of the national demand.

References: http://www.abimo.org.br/modules/content/content.php?page=dados-economicos

Medical Device Firms and Its Challenges

As the medical device industry faces some significant market threats these days, like slow-growing market and strong regulatory system, it became necessary to be vigilant for signs and understand when changes are needed. Executives should pay attention to at least four signs that indicate that their companies need to adapt. Frost & Sullivan's Venkat Rajan, principal analyst, who leads the firm's analysis of the medical device sector, discusses what those are.

The first sign is “Utter Lack of Product Differentiation” which means that customers see medical device products as commodities and it leads to customers’ indifference to the product. The second sign is “Profit Model Under Pressure”, this means that the profit margin declines year by year and to assure its market presence companies are facing significant internal cost-cutting. The third sign is “Market Disruptors on the Horizon”, this sign has to do with fast technology development which means that a product becomes obsolete quickly and, sometimes, its substitute proves to be better, faster and cheaper. Finally, the fourth sign is “Internal Infrastructure Deteriorating”, this means that the company’s workforce usually is slow to adapt or innovate and its strategy normally is focused on maintaining its market presence instead of expansion.

References: http://www.mddionline.com/article/four-signs-medtech-firm-needs-reinvent-its-business-model

Healthcare Industry Continues to Impress

Startups of the healthcare sector in USA attracted $1.81 billion from venture capitalists in the second quarter of 2013. Medical device startups represented 38% of the deals and 35% of the dollars invested. This according to the Q2 Venture Capital Activity Report issued by CB Insights, a venture capital database.

Although money invested by venture capitalists into startups declined 14% when compared to the same period last year, the number of deals remained the same. Total investments represented 24% increase over the first quarter when the money invested reached $1.47 billion.

California was the investments main destination (43% of the $1.81 billion invested in the sector and 41% of the deals), followed by Massachusetts (20% of the money invested in the sector and 15% of the number of deals).

The healthcare IPO (Initial Public Offer) market also impressed: 11 of the 22 IPOs in the second quarter of 2013 were of healthcare companies.

References:http://www.mddionline.com/article/q2-venture-capital-investments-early-stage-healthcare-companies-reach-five-quarter-high

Brazilian Medical Device Sector: national supply, imports and investments

Since the domestic supply of medical devices in Brazil is not able to fulfill the Brazilian increasing demand, imports continue to be an important resource. In 2012, the country imported approximately $4 billion in medical equipment and it can hit $9 billion over the next 2 years.

To prevent Brazil from becoming too dependent on imported medical device products, the Brazilian government is trying to change this scenario. Public and private investment in healthcare research may reach $7 billion over the next four years (almost 0,30% of the GDP). These assets come from the National Bank of Economic Development (BNDES), Brazilian Innovation Agency (FINEP), National Health Ministry, Science and Technology Ministry and Pharmaceutics’ Labs. The research agenda is guided by the needs of the Brazilian Healthcare Public System (SUS).

References: http://www.qmed.com/news/brazilian-medical-device-imports-hit-9-billion-2018?cid=nl_qmed_daily

http://www.anpei.org.br/imprensa/noticias/pesquisa-em-saude-tera-investimento-de-r-13-bilhoes-em-quatro-anos/

Human Health Framework in the 21st Century

To understand the global framework of the 7 billion citizens’ health, the Harvard School of Public Health (HSPH) along with other institutions promoted a worldwide project called Global Burden of Disease. Described as “the largest study of its kind and the first such study since 1990”, the project intends to make a list of the main causes of death and disability, and brings together about 500 scientists from 50 nations.

One of the findings shows the decline in children’s mortality rate due to improvements  in infectious disease control with sanitation and vaccines. Another finding is the increase of life expectancy, but, unfortunately, people are spending their  later years in poor health as a result of chronic diseases (cancer, diabetes, etc). The leading causes of death are: Ischemic Heart Diseases, Lower Respiratory Infections, Stroke, Diarrheal Disease, HIV/AIDS.

To check the pdf version of the HSPH infographic, go to: http://www.hsph.harvard.edu/news/files/2013/05/HPHSPRING2013infographic.pdf

References: http://www.mddionline.com/blog/devicetalk/global-burden-disease

Medical Device Industry Growth in Latin America and Brazil

Since every crisis might be seen as an opportunity, strategic measures must be taken in these days. Emerging markets can be considered as a strategic target market to escape from the international crisis. One region that is getting international medical device investors is Latin America.

Because of cost advantages, suppliers and medical OEMs are entering Latin America. The region expects a growth by double digits in the coming years. Today, the Latin America medical device market is worth U$10.5 billion and it is expected to reach US$20 billion by 2015. The exports of Costa Rica’s medical device represented 11.8% of its total exports of good. The government of Peru invested U$333 million to improve public healthcare. In 2011, Colombia imported U$799.3 million in medical equipment and supplies.

As for Brazil, the largest market in Latin America, the exports of medical device reached US$555.1 million in 2011. The growing of middle-income families and aging population makes Brazil a special target. Despite of the expected growth in the medical device industry, high import prices and a bifurcated public/private system could impede a higher expansion.

References: http://www.mddionline.com/article/latin-americas-medtech-market-growing-double-digits-infographic

http://www.mddionline.com/article/brazil%E2%80%99s-growing-economy-fuels-vascular-delivery-device-sales-despite-market-limiters

Medtech Global Market 2011-2018

As the world lives a crisis season, economic and financial advice has become one of the most important analysis. Result Healthcare intends to guide healthcare companies providing these kind of advice and one of these attempts is the “What’s hot and key trends in Medtech in 2013[1]”.

The report indicates a growth in the medtech global market at 4.4% until 2018. It also predicts that the pharmaceutical sector will grow at only 2.5% and the in vitro diagnostics will be largest medtech segment, with some important sub-segment areas as robotic-assisted surgery and mobile health.

Some of the main conclusions of this report can be seen in the tables below:

So, one can say that there are reasons for medtech companies to be optimistic about the future.

References: http://medicaldesign.com/business/medtech-be-440b-market-2018-says-report

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[1]  To check on the report, go to http://www.resultshealthcare.com/media/105652/medtech_2013.pdf

Obtaining Funds in the Medical Device Industry

           As the supply of venture dollars is rapidly shrinking, the task of seeking funds is becoming even more difficult. More importantly than seeking, is the effort of being able to obtain the fund. The annual IBF MedTech Investing Conference, that took place in Minneapolis last week, provided some tips on how to fulfill this task.

         These tips to obtain fund in the medical device industry can be simplified in three C’s: cost, clinical outcomes and CMS (Centers for Medicare and Medicaid Services - reimbursement). Cost is referred to if the new technology/product can remove expenses from the system. The second C, clinical outcomes, is referred to if patients are doing better with the new technology. Investors want to see clinical evidence and proof that the new product is superior than the treatments already available on the market. And finally, the third C, CMS, is about reimbursement. Investors want to know if the Centers of Medicaid and Medicare will cover the procedure. It is common sense that there is a special highlight for cost, though.

         Despite of being challenging, companies that can demonstrate their command of the three C’s are more likely to obtain funds.

References: http://www.mddionline.com/article/three-cs-can-get-your-next-venture-funded

Medical Device Providers Adopting Sustainable Actions

As outsourcing seems to be a strategic measure that is getting more and more common worldwide, including when it comes to the medical device industry, suppliers are becoming an extension to the brand. So anything that the partner does, reflect on the company’s image and on the sales of end product. Hence, medical device manufacturers are asking suppliers to make their operations more sustainable.

There are several alternatives to become more socially responsible. Since adopting measures to take care of the environment such as plants, animals, air or water; to try making the office a better place to work. Unlike what one might think, that can help a company financially.  Some recycling or waste reduction projects  might decrease unnecessary expenses.

Earth Planet and the next generations appreciate these measures companies are adopting (or trying to)  today. Even if it is a marketing strategy or finance one, becoming socially responsible is aligned with society’s expectations.

References:http://www.mddionline.com/article/suppliers-make-sustainability-efforts

Meanwhile in the Brazilian Medical Device Industry

     Since Brazil has become one of the main destinies of many sectors worldwide, either because of its market size or its rising middle class, constantly monitoring what is happening inside its borders has become a routine task for foreign investors. The medical device industry is no exception, especially with such complex/bureaucratic regulatory system.

        However, this seems to be heading to a more harmonized system. A new Brazilian Good Manufacturing Practice (BGMP), RDC 16/2013, has gone into effect in the country. It means that two different BGMP resolutions (RDC 59/2000 for medical devices and Ordinance 686/1998 for in vitro diagnostic (IVD) devices) have been replaced by the new single one. The sector now only have one requirement to meet, hence, the BGMP has become less complicated. Companies now have 180 days to update their quality system and make it meet RDC 16/2013.    
       

        Another fact that has happened to the Brazilian medical device industry, and deserves both national and  foreign attention: in the end of last month (March, 2013) the Brazilian Medical Device Industry Association (ABIMO) has claimed, in Congress, the approval of a law that ensure tax isonomy between brazilian and imported products. Today, public and philanthropic hospitals have tax immunity when purchasing imported medical device.

“We do not want differential treatment. We are competitive. We export to more than 180 countries. Abimo’s proposal is simple: ensure tax immunity for all purchase orders made by institutions linked to SUS (Brazilian public healtcare system).”

Paulo Henrique Fraccaro, Abimo’s President            

        These two initiatives seem to be an effort to boost the national industry and make it more competitive. 

References: 

http://www.emergogroup.com/blog/2013/04/brazil-gmp-requirements-streamlined?utm_source=RADAR&utm_medium=newsletter&utm_content=Americas&utm_campaign=4April2013

http://www.valor.com.br/politica/3058980/industria-de-equipamentos-medicos-quer-isonomia-com-importados

Senate Votes to Repeal New Medical Device Tax

The Affordable Care Act, signed into law back in 2010, includes a 2,3% that will be charged on the total revenue of a medical device company, regardless of whether the company generates profit or not. It was meant to start this year and due to the polemic that it has raised among the medical device industry and in Congress, a repeal amendment was proposed.

On Thursday, March 21^st, the US Senate voted a 79-20 tally to repeal the medical device tax. The voting was bipartisan; it included 33 democrats against the tax. The amendment proposed is called Medical Device Access and Innovation Protection Act, introduced by both a Republican and Democrat Senators. The reasons for such a support to the amendment are due to a concern of losses in profits, job creation and R&D investments. The opponents to the repeal claim that the new tax will raise a $30 billion in 10 years and it will be funding the Affordable Care Act.

References: http://www.mddionline.com/article/medical-device-tax-jeopardy-after-senate-votes-repeal

Breaking into Emerging Markets

As the crisis of 2008 continues to effect the growth of developed countries like USA, European Union and Japan, it seems like the key to boost business all over the world is knowing how to approach emerging markets.

However, this step requires a special strategy. Since there are clearly differences between developed and developing economies, one must take into consideration these facts when deciding to formulate a strategy.  One frequently mentioned advice is not to approach emerging markets alone. Local partnership is recommended because the national partner has the know-how of the market, key-suppliers, regulatory environment, etc.

Another advice concerns to pricing. Local firms are used to lower labor cost so the final price is low. Pricing the product properly is essential to successful sales in these kinds of markets.

“ (…)it's imperative for device firms to recognize that cheaper does not mean lower quality.”

By Arundhati Parmar, Senior Editor, MD+DI

References: http://www.mddionline.com/article/going-it-alone-poor-strategy-trying-break-emerging-markets-0

Outsourcing as the key to Competitiveness

As the industry suffers from uncertainty pressures, the trend to remain competitive is turning to outsource. A Study surveyed MD+DI’s readership about outsourcing in the medical device sector ranked a list of concerning issues for the next 5 years. Regulatory hurdles, intellectual property, R&D and device tax were the most mentioned.  

The majority of the respondents agreed that outsourcing is an answer to save costs and time. For the next five years, most of them are looking for increasing the numbers of contract service. Besides manufacturing service, companies are interested in legal and regulatory services as well as R&D and design capabilities.

US-based service providers are the most common when outsourcing a project, however Russia and Latin America are the regions that the respondents most expect to expand outsourcing activity in the coming years.

Biokyra Pesquisa e Desenvolvimento is a Brazilian medical device company that may become one of the providers to the US industry when it decides to expand its contract service to Latin America.

References: http://www.mddionline.com/article/5-years-medtech-firms-will-outsource-design-legal-and-regulatory-services-over-manufacturing

Patent Application in Brazil increases 6% in 2012

Despite the international uncertainty, patent application in Brazil increased 6% between 2011 and 2012[1]. The growth started back in 2010, after the first symptoms of the global crisis in 2008 and 2009 which reduced the numbers of patent application.

Whether in universities, companies, multinationals or research institutes, innovation is the main concern among all of them, in every sector. Not only has the production raised but also the need for intellectual protection in a large emerging market.

Growing demand claims for more efficiency. The INPI (Brazilian National Institute of Intellectual Property) is taking its steps towards better efficiency by offering the inventors a system that enables online applications and monitoring, similar to the ones that the USPTO (USA) and EPO (European Union) already have. This is expected to make the patent filing process in Brazil simpler and more straightforward.

References: http://www.inpi.gov.br/portal/artigo/pedidos_de_patentes_apresentam_crescimento_de_6_no_ano_passado

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[1] For further information about INPI statistics, go to http://www.inpi.gov.br/images/stories/downloads/patentes/pdf/Patentes_Depositadas_e_Concedidas.pdf

Innovation in the Medical Device Sector

The concept of Innovation is always linked to the idea of creativity, novelty, technology. Nevertheless, it doesn’t restrict itself to gigantic transformations in expensive technologies. Innovation is usually seen when the problem is identified and better or new methods are created to solve it or to improve a daily process.

In the medical device industry, this preconception is frequently made. Even in this sector, innovation does not necessarily involve large investments but, most importantly, it involves the comprehension of the patient’s needs and its fulfillment to save his life or to improve his quality of life.

Unlike the consumer space where there are no barriers to different ideas, the medical device sector deals with regulatory systems, which dictate the requirements that the industry must meet. Obviously, the regulatory system is concerned about setting high standards for the safety of the patient, but sometimes it can inhibit innovative ideas.

References: http://www.mddionline.com/article/medtech-innovation-doesnt-have-be-expensive

Another Attempt to Globalize the Medical Device Industry

When it comes to a globalized economy, one obstacle always bothers the free trade: the regulatory systems of the countries. To stimulate the global economy and favor the free international trade, it is important to think of a way to converge rules and so, the free movement of goods will not become a slow bureaucratic process. As for a harmonized regulatory system for medical devices, the task is even harder because it also deals with national health laws.

This was the concern when in 1992 the European Union (EU), the United States, Canada, Japan and Australia gathered together to establish a method to harmonize the regulations on medical device. The voluntary group was called Global Harmonization Task Force (GHTF) and brought together representatives from medical device regulatory agencies and the regulated industry from its founding members.

Almost 20 years later, the new economic scenario called for new representatives. So, “to build on the strong foundation work of the GHTF and to accelerate international medical device regulatory harmonization and convergence”, the International Medical Device Regulators Forum (IMDRF) was conceived in February 2011, replacing the GHTF. Besides the original 5 founding members of the GHTF, it included Brazil to the discussion of future directions in forming an international harmonized and convergent regulatory system for medical devices.

The membership of China and Russia are currently being confirmed and the new Forum, including the 6 official members, China and the WHO (World Health Organization, an observer member), met in Ottawa in October 2011 to establish strategic topics for its operation.

Trying to standardize rules among the GHTF member countries was a big challenge, now with the creation of the IMDRF and new members added, the debate becomes even harder. Despite the adversity, the future results might turn out to be stronger and more creative once it takes into consideration different points of view. There is still a long way of hard work to build a harmonized and convergent regulatory system, which provides solutions to all the five countries and EU’s concerns. We hope the members create an environment of dialog to accelerate the harmonization and convergence of their regulatory systems, so that we could have a real “international medical device regulatory system”.

References: http://www.imdrf.org/