The health products industry  is one of the most dynamic sectors of the global economy.  The sector has more than 27000 industries around the world employing more than one  million people. It is expected that the emerging economies such as Brazil, China and India will bring a next wave of growth to the health products market.

A complex and diverse set of forces, such as government investments, consolidation of the middle class and high disease burdens, will sustain Brazil among the top attractive countries in the healthcare market, according to experts.

With a focus on business model changes in pharmaceuticals, medical devices, medical imaging equipment and healthcare IT solutions , the Brazilian healthcare market is expected to  maintain double-digit growth rates by 2015,

Brazilian healthcare sector has evolved greatly and is expected to sustain its growth in the future as well. Further, according to the latest report by RNCOS,  healthcare-related expenditures in Brazil have been rising and it is estimated that the healthcare related expenditures will grow at a CAGR of around four per cent during 2011-2014.

Despite the crisis faced by the global economy, the Brazilian industry's annual exports of health equipment  grew 11.7 per cent in 2011 compared to the previous year. Brazilian products reached 180 countries and generated US$ 707 million in revenues. This higher than expected growth has allowed the country to bring forward its goal of reaching US$ 1 billion in external sales for the sector by a full year to 2014.

Having operated in international markets for approximately a decade, the Brazilian health products industry's performance is reflected by its total revenues of R$ 10 billion (approximately US$ 5 billion) for 2012 - an increase of 17 per cent compared to 2011.

Between 1999 and 2011, the number of countries purchasing health equipment from Brazil grew from 40 to 180, showing that the sector's strategy of offering reliable products at competitive prices is generating results. The exports also reach mature and demanding markets, such as the United States, which is the largest importer, responsible for 25 per cent of the sales volume. Germany and Belgium also feature among the top 10 importing countries.

In 2012, the industry is investing in eight key markets such as  Angola, Saudi Arabia, Chile, the US, India, Mexico, Peru and Russia.

“Brazil invests in technology to develop reliable products that can be offered at an excellent cost-benefit ratio. Furthermore, we Brazilians are known for our flexibility, which means products can be adapted to the requirements of different clients”, says ABIMO (the Brazilian Medical Devices Manufacturers Association) president Franco Pallamolla.

According to an industry survey conducted between 1999 and 2011, the number of companies in the sector has grown from 326 to 506 over the period. Revenues for the period have increased by 421 per cent, from just over R$ 2 billion in 1999, to R$ 10 billion last year.  

The growth witnessed by the industry and the investment in exports created a requirement for international certification. Though the national agency, ANVISA, is highly efficient and demanding, it is still not well known abroad. Therefore, ABIMO began to provide consultancy services and support for Brazilian companies seeking to register with the FDA (Food and Drug Administration) - the American sanitary agency responsible for testing the quality of products before they are commercialised. This should result in the number of Brazilian companies with FDA certified products doubling over the next couple of years, with the figure expected to go from 19 to 40.

Currently, 80.7 per cent  of the Brazilian companies in the sector have certified quality systems, such as ISO 9001 and ISO 13485, with a further 9.1 per cent  in the process of receiving their certification. ABIMO also stimulates access to cutting edge technology through agreements with industry associations from other countries, and partnerships with multinationals. Approximately 980 research and development projects are underway in partnership with the most renowned Brazilian universities, such as USP (São Paulo University) and UFRJ (the Federal University of Rio de Janeiro).  

Medical technology is one of the industries identified by the government as a present and future economic performer. Recently Brazil unveiled a healthcare stimulus designed to benefit domestic medical technology companies and public hospitals. The healthcare stimulus is part of the larger 6.6 billion reais ($3.2 billion) stimulus package that would boost government spending in multiple sectors and lower subsidized lending rates.

To bolster its domestic medical device industry, the government is encouraging public hospitals to buy domestically manufactured medical equipment by allowing them to spend up to 25 per cent more on medical products made in Brazil than they would on comparable imports.

It also increases the spending capacity of public hospitals and eases access to credit for regional and municipal authorities at the Banco Nacional de Desenvolvimento Econômico e Social (BNDES). To tap into these credit lines, a minimum of 60 per cent of the money spent must be used to purchase domestically manufactured medical equipment, said Minister of Health Alexandre Padilha.

Brazil has the largest medical device market in Latin America. Its medical technology market has been growing at double-digit rates and  is expected to reach $20 billion by 2015, according to Frost & Sullivan.

In 2011, the Brazilian medical market was valued at US$4 billion equivalent to around US$21 per capita. Expenditure is far higher in developed urban areas, however. The country has a well established medical industry, comprising local and multinational companies. Imports had been fuelled by the appreciation of local currency against the dollar and increasing consumer demand for the latest technology.

Medical equipment industry is comprised of several associated products and services, such as medical equipment and devices, dental equipment and products, radiological and diagnostic imaging equipments etc and in recent times, both the export and imports of such devices have shown promising growth. In purview of the same, innovation and improvements in the medical equipment sector have remained consistent in the country.

There are numerous Brazilian manufacturers of medical equipment, many of which are small to medium-sized companies manufacturing low cost products for the local market. Others are major multinationals that serve both Brazil and export, while a third smaller group includes companies that export throughout the world, especially in areas such as anaesthesia, incubators, surgical instruments, implants and prostheses. Other areas with local manufacturing are hospital furniture, surgical center equipment, electroencephalographs, ventilators, electric scalpels.

The majority of companies lies in the medium-sized enterprises' group. Companies with annual revenues between US$ 940,000 to US$ 9.4 million represent 32.8 per cent, whereas micro companies (annual revenues of up to 120,000 real) answer to 23.1 per cent. Small companies account for 19.6 per cent; medium to large-sized companies for 16.4 per cent; and large-sized companies, with annual revenues above US$ 31.3 million, for 8.1 per cent. Large companies concentrate at least 30 per cent of the sector's total revenues.

According to a survey conducted by the Institute of Industrial Marketing Studies (IEMI), of the 449 companies operating in the country, 45.4 per cent are located in the capital of the southeastern Brazilian state of São Paulo, and 21.8 per cent  in the interior of the state.

The most important buyers of medical equipment are government, non-profit and private hospitals, clinics and diagnostic centres.

Government purchases are almost always done by public bid and are restricted to companies that have a local presence. Major equipment, such as image or laboratory diagnostic equipment is generally purchased directly from the manufacturer or its representative. The local representative often facilitates the importation process, but the actual transaction occurs directly between the buyer and the foreign company.

There are thousands of medical distributors throughout Brazil, mostly concentrated in the South-east; many of them import, package and re-label. Best sales prospects are in the fields of diagnostic equipment, endoscopy, cardiology (especially pacemakers and echocardiography), dialysis equipment, disposable materials and medical applications of IT.

There are some 3,000 equipment and supply distributors in Brazil, but only 3.3 per cent of these firms can be considered large companies. Excluding direct sales networks of multinational manufacturers, the majority of distributors operate on a regional rather than a national basis. In addition to the attractive size of the Brazilian medical market, the opportunities offered by Mercosur make Brazil a potential springboard for exports to Argentina,Uruguay and Paraguay.

The market for home health care products has grown significantly in recent years. Brazil has approximately 150 home health care companies, gaining increasing popularity as good ways to cut hospitalization costs while offering better services for patients.

Brazilian health insurance companies are responsible for paying 99 per cent of the costs related to home care treatment, and Brazil's Regional Nursing Council is developing procedures on how to regulate this market, including standards for health professionals. Private entities such as universities and even religious organizations represent new opportunities for equipment and training/management service suppliers, especially in northern provinces, besides the traditional states of Sao Paulo and Rio de Janeiro.