Future of Med-Tech Sector in BRIC Countries: 2012-2015

Booming med tech sector will grow at a very aggressive rate. Investments in the sector are increasing. The BRIC countries are trying to bring US innovations the countries, assuming the US regulators are posing a risk to the innovations in the US. If the innovations move to outside US. The health care cost in the US is going to dramatically increase. Yet the US VC investments  in innovative med tech sector has gone up in the 2011 and expected to increase in 2012.  
"Infrastructure in the BRICs has improved notably in recent years, but still remains far behind developed country norms," according to the report. "Infrastructure investment will need to accelerate in the years ahead to prevent it from constraining future growth rates in the BRICs."

BRIC Countries- Individual growth rate predictions were:

• Brazil: 4.5 percent for 2011, 4.0 percent for 2012
• China: 9.4 percent for 2011, 9.2 percent for 2012
• India: 7.5 percent for 2011, 7.8 percent for 2012
• Russia: 5.3 percent for 2011, 5.6 percent for 2012

RUSSIA: This is the first time that Russia has articulated a long-term development strategy for the medical technology and pharmaceutical industries, Tsyb told me. A €4.5 billion investment programme for these two sectors was recently approved by the government, and now it is time to put that money to good use. The pharmaceutical side of the strategy is well underway; the medtech part of the programme took a little longer to implement—a couple of signatures are required from ministries that oversee regulatory approvals—but those are largely pro forma, says Tsyb, and he is here in Düsseldorf to move the project forward. His mission is to lead negotiations with international medtech leaders interested in localisation projects within Russia as well as to support Russian companies in their talks with potential partners. 

The market, which is currently valued at €3.5 billion, is projected to grow six-fold by 2020, according to government forecasts.

CHINA: The government’s 4 trillion RMB stimulus package and policies to boost domestic demand have helped most Chinese companies, but the medical device industry has benefited less than other industries. Because most SMEs manufacture only for the domestic market and medical device demand is determined by domestic institutions, recent medical reforms have not done a great deal to stimulate demand. Some export-oriented companies rely on OEM services and do not benefit from the expansion of domestic demand. If companies can think outside the box and try to expand foreign demand for their products, this might be a way to achieve quick economic gains. The financial crisis has decreased demand for traditional exports, but the decrease in purchasing power of foreign healthcare systems has also decreased the competitiveness of many foreign medical device SMEs. This gives Chinese companies a good opportunity to take advantage of their low manufacturing costs to get a foothold in foreign markets.

For years, companies have been succeeding in the domestic market but have not tried to expand overseas. This can be attributed, in part, to language and cultural barriers and to unfamiliarity with foreign market regulations. In the European Union, Chinese medical device companies only need to obtain CE certification to be eligible to directly enter more than 20 member states. CE certification is much less stringent than SFDA certification. Some small pharmaceutical companies have obtained CE certification while waiting for SFDA certification and marketed their products overseas right away. I suspect such strategies will become more and more popular.

Use human resources to accelerate the pace of product commercialization. Medical device development in China lacks the support of national research institutions, which are often out of sync with practical needs. This leaves technology and product development in the hands of medical device companies. Unfortunately most medical device companies use their limited investment funds to expand production and sales rather than to develop new products or technologies. China’s so-called new products are often imitations of foreign products, which limit the impact they might have on foreign markets.

Medical devices, especially small products, can be developed and manufactured in a relatively short time-frame, and human resources can be harnessed to drive innovation. Over the past 30 years of opening and reform, a significant portion of the 200,000+ Chinese students who have studied abroad have gone to work for major medical device manufactures. Domestic companies should find ways to put these intangible assets and technological assets to use. 

BRAZIL: Brazil has the largest economy and medical device market in Latin America, but per capita medical expenditure is still very low. The market fell in 2009 but recovered in 2010. The highest expenditure is in the large cities, such as Sao Paulo or Rio de Janeiro, but producers are moving into regional markets outside the major state capitals. Diagnostic imaging apparatus, followed by obesity weight loss, diabetes, orthopaedics, spine and consumables are the largest market sectors.
Dilma Roussef took office as President on January 1^st 2011, she has not decided whether herself or her predecessor Lula will run for the next elections in 2014.
Brazil, and Latin America in general, have emerged more quickly from the global downturn than more developed nations. Additionally the region is projected to grow at a faster rate in the near future. Brazil’s GDP is set to expand by a healthy 4.3% in 2011 and growth will be between 4% and 5% over the medium term. With a growing economy, if inflation is kept in check, there will be more money available to spend on healthcare both in the public and private sectors.
The shape of the medical device and diagnostic imaging sector is expected to change following recently announced manufacturing investments. In June 2010, GE Healthcare opened its first South American plant in Brazil, focusing around “healthymagination”. The factory represents an investment of US$50 million over 10 years. Philips Healthcare inaugurated the first Latin American plant for the production of MRI equipment in Brazil in October 2008.
Imports hold a relatively small share of the market, totalling US$1.8 billion in 2009. The economic slowdown and a more “realistic” exchange rate in 2009 have contained medical imports as imports increased just 1.7% in 2009 compared to a CAGR 2005-09 of 21.1%. Imports tend to be high-tech medical equipment not produced locally. In 2009, 68% of imports were supplied by Europe and the USA.
Medical exports reached US$442.3 million in 2009, reflecting a less favourable exchange rate. The country has a well-established medical industry, comprising local and multinational companies. Domestic production, however, is geared towards the local market. Exports are small in comparison with total production and the country consistently runs a negative balance of trade in medical equipment and supplies

INDIA: India’s medical device and equipment market is expected to reach US$6.41 million by 2014, growing 15.5% annually. The market has opened up for importers, MNCs as well as indigenous manufacturers. Driving this growth is increased awareness and affordability coupled with an expanding patient pool and ever-growing export demands from Western and emerging markets. The Indian medical device market is booming, writes emerging markets according to Sonali Deshpande of TrialMed Life Sciences in India. Currently valued at approximately US$3 billion, India’s medtech market is expected to grow 12% to 16% during the next five years (2016)