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 21^st 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.

References: http://comtrade.un.org/

                 http://brazilianhealthdevices.com.br/market 

         http://www.mddionline.com/article/domestic-medtech-industry-  emerging-markets-elicit-excitement-and-caution

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[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.

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:

“PREDEVELOPMENT, PHASE 0”

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.

“PHASE I: INITIATION, OPPORTUNITY AND RISK ANALYSIS”

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.

“PHASE II: FORMULATION, CONCEPT AND FEASIBILTY”

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.

“PHASE III: DESIGN AND DEVELOPMENT, VERIFICATION AND VALIDATION”

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.

  

“PHASE IV: FINAL VALIDATION AND PRODUCT LAUNCH PREPARATION”

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.

“PHASE V: PRODUCT LAUNCH AND POST-LAUNCH ASSESSMENT”

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/

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.

References:http://medgadget.com/2012/08/how-surgeons-and-engineers-can-communicate-better.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Medgadget+%28Medgadget%29

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 27^th 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.

References: http://www.mddionline.com/blog/devicetalk/brazil-announces-medtech-stimulus ,

http://saudeweb.com.br/30781/dilma-assina-pacote-que-favorece-a-producao-nacional-em-compras-publicas/ .

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.

Sources: http://www.blog.saude.gov.br, http://saudeweb.com.br/29827/convenios-medicos-faturam-r-834-bilhoes-117-a-mais/, http://portalsaude.saude.gov.br.

Intellectual Property in Brazil

Intellectual Property in Brazil

Much of the work done at Biokyra is related to the protection of intellectual property. Intellectual property refers to patents, copyrights and trademarks that can be bought or sold. The laws regulating them try to balance the interests of creators who wish to gain greater control over their ideas and take advantage of them, and the rest of society, calling for a greater flexibility of control.

A patent, in its classic formulation, is a public concession, granted by the State, which grants the holder the exclusive right to commercially exploit his creation. However, access is available to the public on the knowledge of the key points and the claims that characterize the novelty in the invention. The exclusive rights granted by the patent relate to the right to prevent others from manufacturing, using, selling, offering to sell or importing the said invention.

The Patent Cooperation Treaty, or PCT was signed on June 19, 1970 in Washington, in order to develop the patents and technology transfer systems. The PCT provides basically a means of cooperation between industrialized and developing countries. By October 2009 there were 142 countries signatories to the PCT.

The World Intellectual Property Organization (WIPO) is an intergovernmental organization with headquarters in Geneva, Switzerland. It is a specialized agency of the United Nations Organizations, and is responsible for the PCT. The PCT aims to simplify the necessary procedures in the case of a request for patent protection in several countries, making more effective and economic for both the user and for the government agencies in charge of the patent system administration. Brazil is a signatory to the PCT since 1978.

Biokyra has its own team to write patent applications and to monitor the process of obtaining intellectual property. 

Minimally Invasive Surgeries

The global market for minimally invasive devices and instruments has been growing at a high rate 7.9% between 2011 and 2016, when it is expected to reach US$21.1 billion worldwide.

Minimally invasive surgeries (MIS) have been performed in the United States and in Europe for more than 10 years. Since then, techniques and instruments have improved and nowadays many organs can be operated through minimally invasive surgery. 

MIS is performed without the need for a large incision in the patient. It is performed through natural orifices or by small incisions through which tubes, catheters or laparoscopes are inserted, and by imaging techniques such as video-endoscopy or fluoroscopy, allowing the surgeon to access the sick region. 

This classification also includes prostheses and devices that can be implanted by minimally invasive techniques.

Some of the advantages of MIS are:

• Accelerated and less traumatic recovery for patients;
• Faster procedures for physicians;
• Lower costs for hospitals;
• Lower costs for health insurance companies;
• High value added products for the industries;
• Increased number of people served in the society.