Call us on 020 3286 4122
April 18, 2016
With approximately 8,000 hospitals in Europe and 5,700 hospitals in the United States, leading global medical device manufacturers have for a long time relied solely on these core and more traditional markets for their revenue and profits. These more developed markets are highly competitive and well served with future medical device growth being either organic or reliant on technological advances. With both of these factors difficult to rely on for boosting sales and profit margins, leading medical device manufacturers are beginning to broaden their horizons and market. While hospital and healthcare expenditure are highest in the United States and Europe, emerging markets are lagging behind however; the size of the opportunity in these emerging markets deserves a closer look.
Latin America is home to over 16,000 hospitals with Brazil having more than 40% of the total establishments, giving it a greater number of institutions than the United States. Mexico is also a major force in Latin America and has the seventh largest hospital market in the world with more than 3,900 hospitals, 60% of which are private. The third largest player in terms of hospitals in Latin America is Colombia which is beginning to see an increase in medical tourism. In 2013, international patients spent approximately $216 million dollars on medical treatment in Colombia, up from $134 million in 2012. International patients are beginning to discover the benefits of having surgeries in Colombia where the costs are much lower and the surgeons are just as highly qualified and skilled as back in their home countries. With the majority of international patients in Colombia arriving from the United States, Canada, the United Kingdom, Spain, Germany, Venezuela and the Caribbean; the medical tourism market in Colombia is one of the healthiest with the government actively promoting medical tourism. As this market has developed and grown, Colombia has become one of the leading countries in all of South America for transplant procedures with its leading hospital facilities being as good as or better than their first world counterparts.
By analysing the hospital demographics, leading global medical device manufacturers can uncover a wealth of opportunities in Latin America. Geographic concentration, the size of the institution and the degree of specialisation are essential in the Latin American market in order to implement and develop a successful market growth strategy. Approximately 50% of all the hospitals in Brazil are located in just 6 out of the 26 states with one-in-five hospitals having more than 100 beds. Medical device manufacturers, companies selling hospital services and technology solutions in Brazil can target certain hospitals with greater ease, concentrating on their typical target market resulting in a more efficient and focused regional strategy. Hospital infrastructure in Brazil suggests that there is significant room for growth and improvement in outsourced medical services most notably in the management of hospital pharmacies, patient and medical records as well as the sterilization of materials and cleaning services. The demographics of hospitals in Mexicoare similar to those found in Brazil, with over 25% of hospitals found in 3 out of the 31 federal states of Mexico. Where it differs is that in Mexico’s hospitals, 10% of all the hospital physicians are also paediatricians. Companies looking to introduce a medical treatment or device into Mexico’s growing paediatric market, have immediate and direct access to their target audience through nearly 20,000 doctors.
Despite these attractive opportunities in Latin America, few global medical device manufacturers have taken the lead on making Latin America its priority. The medical device market of Latin America has therefore become highly concentrated with few companies holding a cornerstone to the industry. Although governments in Latin America are investing in research and development and improving manufacturing, the local level of these is more often than not restricted to second-generation products due to the fear of intellectual property infringement and piracy. The region of Latin America therefore remains largely reliant on imports for more sophisticated products from leading global manufacturers. Making that all important first step to establishing a market presence with long-term growth prospects in Latin America can be achieved with the correct investment in certain concentrated markets such as Brazil, Chile, Colombia, Mexico or Peru. In doing so, a fast mover can gain a significant foothold in the market and radically change the current state of affairs of the medical device market in Latin America.
Thanks for visiting the Latin Link blog! Contact us today for your free translation quote!