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Brazil lures medical equipment makers

by Brendon Nafziger, DOTmed News Associate Editor | January 01, 2012
Christ the Redeemer
Rio de Janeiro, Brazil
From the January 2012 issue of HealthCare Business News magazine

Brazil’s growing economy makes it attractive to device makers, but the country is off-limits to secondhand dealers.

You probably have never heard of Contagem, Brazil, an industrial town of some 627,000 souls about 277 miles north of Rio de Janeiro. But there, on July 22, 2010, GE Healthcare opened its first factory in South America.

For now, the plant is making an X-ray system that’s meant to be sold throughout the continent. Soon though, GE also hopes to produce higher-end equipment at the factory, including PET, CT and MRI scanners.



GE isn’t alone in moving to Brazil. Manufacturers of all kinds are headed there, hoping to gain a foothold in the world’s fifth most populous country. After all, Brazil has 400,000 hospital beds. The patients filling those beds are, increasingly, a bit older and a bit richer, and they want access to the same top-flight medical devices the developed world takes for granted.

For foreign companies, this vast nation – the world’s ninth largest – is attractive for many reasons. For one, it has weathered the economic doldrums better than most developed countries, with its gross domestic product forecasted to grow around 4 percent this year, according to Espicom, a market research firm. For another, the market is huge: the biggest for medical devices in Latin America, and the largest private insurance market, aside from the United States, in all of the Americas.

True, compared to the United States, the amount spent on health care per person is low — roughly one-tenth what it is here. Per capita health expenditures are $734, compared with $7,410 per capita in the U.S. (2009 figures), according to the World Bank. Health care accounts for 8 percent of Brazil’s GDP —slightly less than half of what it is in the U.S. Life expectancy at birth is also lower — 73 for Brazil versus 78 for the U.S., much of it owing to tragically high infant mortality rates, especially in rural areas.

In fact, the rural-city divide characterizes much of Brazil’s health care system. Brazil’s partly public system, on which much of its populace relies, has a low doctor-to-patient ratio, especially in the countryside. But Brazil is committed to modernizing its health infrastructure. And with growing wealth, the private sector is increasing in scope. Nearly every month, a brand-spanking new facility pops up, or a hospital announces it has outfitted a new surgical suite or imaging center, with many of these developments tracked by Hospitalar, an organization that runs a yearly conference on health care and hospital business in the country. In December, for instance, Hospitalar reported that 11 private hospitals in São Paulo were receiving $1.4 billion in investments over the next five years. One of these hospitals, Hospital Israelita Albert Einstein, plans to spend half a billion dollars over the next two years to expand its main facility and open a new branch.

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