Claiming the 7th largest economy in the world and the largest in South America, Brazil is a force in the global medical device market – now one of the top ten fastest-growing in the world, according to Emergo Group.
Imports of orthopaedic implants reached more than $504 million in 2013, according to the Brazilian Health Devices Association, while exports exceeded $132 million, comprising about 18 percent of the country’s total medical exports. From 2010 to 2014, exports of orthopaedic implants increased by 67 percent, says Cristiano Amaral, International Trade Specialist at Ortosintese, a Brazilian orthopaedic device manufacturer.
Trauma is the strongest segment in the country, according to Amaral. Spine and joint replacement products have experienced slower adoption due to R&D and manufacturing complexity.
Similar to the other large orthopaedic markets worldwide, an aging population is one trend driving growth in Brazil.
Despite a current economic downturn and weak currency, growth over the course of the last decade is a second significant contributor to Brazil’s increased presence in the industry. The strengthened economy gave more consumers the means to afford private health insurance. This coupled with the efforts of the country’s government to make healthcare more accessible and affordable for patients has increased demand for orthopaedic implants, thus attracting investments.
“Due to consistent market growth, domestic and international manufacturers are intensifying expansion plans within the Brazilian market,” says Mauren Piucco, Administrative & Finance Manager, Visionare NeoOrtho, an OEM focused on the spine and trauma markets. “Competition increased investments in technology and quality of the products.”
Heavy investments in R&D, manufacturing and international standards have improved Brazilian-headquartered OEMs device quality and, in turn, market share.
“The orthopaedic industry in Brazil took quality issues seriously over the last five years,” Amaral says. “We were increasingly concerned with the quality of our products, constantly improving international standards and chasing for first grade raw material.”
Though the orthopaedic market has experienced growth, regulatory and manufacturing challenges persist, including long review times and Brazilian Good Manufacturing Practice (BGMP) audit queues by Agência Nacional de Vigilância Sanitária (ANVISA).
Other challenges, according to Piucco, include high taxes and swinging import duties, soaring labor costs and rigid labor laws, poor roads and limited rail network leading to increased freight costs, a poor education system that does not supply the demand for qualified workers, tax breaks and incentives offered to local industries, bureaucracy of government agencies and a low average selling price compared to Europe and U.S.
Piucco remains positive. “There are opportunities of an emerging market that, along with slow but steady improvements, have contributed to create a positive business environment,” he says.
This article was accompanied by two other articles as part of our emerging markets feature in the October issue of BONEZONE. They are: International and Domestic Manufacturers Compete to Serve Growing Asian Population and Manufacturing or Selling Medical Devices in Mexico: A Regulatory Conundrum.