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