Brazil Demands More, Fueling IVD Market

Brazil Demands More, Fueling IVD Market

Private healthcare spending can be the difference between a strong market or an under-performing one. In many emerging markets, the first thing to develop once consumers obtain more economic strength is disease detection. That bodes well for the Brazil IVD (in vitro diagnostics) market. The Brazilian medical device and equipment market is favorable and expected to show promise for participants looking to expand into Brazil's IVD market. There is a growing demand  for new medical devices in the laboratory market sector, and increasing investment in medical R&D is fueling additional growth for the IVD and lab equipment markets. Specific to diagnostics, Brazilian health professionals and patients are demanding innovative medical devices that target infectious disease and cancers. Brazil is Latin America's largest country by population, accounting for 33% of the region's total. Brazil's 65-and-over population segment is expected to account for 21% of the country's total population by 2050, up from 7% in 2010. Disease incidence is expected to increase overall because of the aging population's vulnerability to disease, according to Kalorama Information's new report, Brazil IVD Market Analysis

Brazil's in vitro diagnostic market is one of the largest, according to Kalorama. Brazil is the sixth most populated country in the world with 205.8 million people residing in the country in 2016, and according to our latest study the Brazil IVD market is surpassing $900 million. Brazil's healthcare system relies on both public and private spending, and private health spending is higher in the private sector at 53% compared to 47% for the public sector. This has made it a stable market opportunity for the Brazil clinical testing industry.

IVD Availability & Quality 

Health care in Brazil is funded by the Ministry of Health (Ministério da Saúde).  This agency runs all government hospitals (also known as Municipal Hospitals) and medical services.  Government-funded hospitals and clinics offer a wide range of medical services.  The system is popular in Brazil. However, government hospitals are often crowded because there is no cost.  Waiting times can be long and the facilities may not be as good as in private hospitals (such as a lack of air-conditioning or certain medical equipment).  The Brazilian Government oversees public health programmes such as Farmácia Popular whose aim is to make essential medications and drugs readily available for the population (at affordable prices) in pharmacies throughout Brazil.

Brazil's in vitro diagnostics market is not a new one. All of the country's major IVD companies and many innovators have set up shop in the BRIC countries for some time. They share the IVD market with a growing cohort of indigenous diagnostics manufacturers and partners. The market is dominated by a few international diagnostics companies, but there are local alternatives making reagents and medical devices as well. There is sufficient evidence that these IVD companies are well established in the area of routine diagnostic tests and systems. There is further evidence that Brazilian IVD companies are not waiting with bated breath for U.S. products. 

In-demand diagnostics products include: 

  • automation and automated clinical laboratory systems,
  • molecular test reagents, instrumentation and supplies,
  • automated and rapid microbiological tests especially in the area of HIV, malaria, tuberculosis, STD, hepatitis, and parasite testing;
  • diabetes monitoring devices,
  • hematology, chromotography and enzyme analyzers;
  • rapid diagnostic tests;
  • allergy tests;
  • tumor markers

IVD & Brazil's Private Health Industry 

The Brazilian healthcare system can be characterized as a single payer system. The government-run public health system, Sistema Unico de Saude  (SUS), was established by the 1988 Constitution and provides coverage to all Brazilians. It currently serves approximately 75% of Brazilians, and aims for universal access to healthcare.  Although it is effective in some regions and areas of medicine, facilities are under funded, more staff is needed and long waiting lists are common in the public sector.  Brazilians, if they have the financial means, generally purchase some form of healthcare coverage from the many private health insurance or cooperative health plans. An estimated 25% of the population is covered by at least one form of health insurance; 75% of the insurance plans are offered by commercial operators and companies with self-managed plans.

Reimbursement for the Brazil IVD market is complex and different for the public and private sectors.  Reimbursement is a bit of a misnomer for what happens in the public sector, rather there is a payment list issued by the government.  Free healthcare is guaranteed by Brazil’s constitution for everyone in the country, and public hospitals are given budgets to accomplish this.  Their diagnostic labs do what tests they can with the resources they have.  The result of this is that public customers may be using older diagnostic technology.

There is a reimbursement list for the amount the government will pay for diagnostic services provided by private institutions for patients without insurance or the ability to pay. This list includes all medical procedures and diagnostic services. The problem is that the list has not been changed in nine years.  While the SUS list has remained unchanged it is possible to add new tests to the reimbursement list.  This has allowed more recent tests to be reimbursed at a more reasonable level.

Because the public system is slow and rather basic, some private laboratories report that as much as a third of their income comes from direct patient payments.  For those paying for their own care, the pricing is generally market-based.  For those with private insurance, payments to laboratories are governed by the list put out by the Brazilian Medical Association (AMB).

According to Kalorama Information's Brazil IVD Market Analysis, a couple of key Brazil IVD market trends stand out:

  • M&A in the lab industry Is stabilizing. There are now four national, or regionally-dominate, laboratory service providers operating in Brazil. Intense consolidating reduced the number of large-volume labs from around 15 in the early 2000s.  Consolidation is now stabilizing and current providers are highly competitive.
  • Demand for high-sensitivity testing and high-volume testing equipment is increasing. There is a growing demand for advanced testing technologies, higher sensitivity and equipment that can meet the demand for faster results.  The stabilizing economic condition in Brazil and increasing middle class have supported this trend. 
  • Test turnaround times are a priority among patients. The growing private health system and increasing middle class expects faster results.  The middle class is responsible for the growing private health insurance industry, which accounts for about 53 percent of total health spending in the country. 

Kalorama Information’s full study on the Brazilian IVD market contains segmentation market analysis for various sectors of the Brazilian IVD market, including point-of-care, immunoassays and clinical chemistry.  The report identifies IVD market share leaders in the country.  The report can be found at: https://www.kaloramainformation.com/Brazil-IVD-10934090/.