Fact Sheet ELANBiz: Health products in Brazil 1

Transcription

1 Fact Sheet ELANBiz Health Products in Brazil Disclaimer The positions expressed are those of the authors and do not necessarily reflect the official opinion of the European Union. Neither the European Union nor any person acting on behalf of the European Union is responsible for the use which might be made of this information. Neither the European Union nor the ElanBiz consortium members are responsible or may be held accountable for any loss suffered as a result of reliance upon the content of this Fact Sheet Fact Sheet ELANBiz: Health products in Brazil 1 Developed by SPS Expert in Brazil. Updated, 09 January 2017 For additional information, use our service Ask the Expert Sector Description In Brazil, the health sector represents 0.6% of GDP. It is one of the most dynamic sectors of the world economy, with global annual revenues estimated at US$ 330 billion (2013), with approximately 30 thousand industries distributed around the world and more than 1 million workers, according to Brazilian Health Devices. The sector of Health Products is segmented into five major groups: Sector group HS product code Medical and hospital equipment ; ; ; ; ; ; ; ; ; Odontology ; ; Laboratory /20/80/90; ; ; ; ; Radiology ; ; ; ; ; ; Implants ; ; ; ; ; ; Source: Brazil Federal Revenue 1 Content information provided in this document, is of general nature only. For more detailed information, events and commercial trade offers as well as commercial business contacts, please contact the Comercial Offices on the member States, the European trade organizations and bilateral chambers of commerce. 1

2 Fact Sheet ELANBiz Health Products in Brazil Importance and market development Brazil is the seventh world market for health products. The sector accounts for about 5% of the country's total health expenditure. With a revenue of about US$ 17 billion (2014), it generates 0.6% of the Brazilian GDP. In Brazil, incomes derived from health goods and equipment in 2015 reached US$ 10 billion. Revenues (US$ 1.000) Source: Brazilian Health Devices 2 The Government is responsible for about 50% of the sector's purchases. This means that the health products sector can be quickly affected by economic crises or economic downturns in the country. For this reason, in the first half of 2016, Brazilian companies reduced their production by 12%. Imports reduced by 13%, which represents a total of US$ 2.3 billion. While exports decreased about 24%, to US$ 350 million. Participation of imported products and evolution With respect to the trade balance, imports from the sector sums more than US$ 4.5 billion from January to September The annual average of exports was US$ 728 million, with a trend of growth in exports and reduction of imports

3 Import evolution Imports 2011 (US$) 2012 (US$) 2013 (US$) 2014 (US$) Odontology , , , ,00 Laboratory , , , ,00 Radiology , , , ,00 Medical and , , , ,00 hospital equipment Implants , , , ,00 Consumer , , , ,00 goods Total , , , ,00 Source: Brazilian Health Devices Trade balance deficit in the sector is increasing as a result of the country's dependence on technology imports. According to the Brazilian Association of Medical Equipment, Dental, Laboratory and Hospital (ABIMO), trade balance have recently moved from a deficit of US$ 2.31 billion in 2009 to US$ 4.16 billion in Imports rate remained stable between 2013 and 2014, and are still very high in the sector. According to imports, there has been a slight increase in imports from 2013 to 2014 for equipments and implants. Although the largest increase has historically been in the Consumer goods, Lab and equipments. Main provider countries in 2015 (January September) US$ FOB Imports Countries US$ % 1 EUA ,5 2 Alemanha ,8 3 China ,2 4 Japão ,3 5 Malásia ,9 6 Suiça ,8 Total Source: Brazilian Health Devices Main European countries participating in imports to Brazil in the health sector were: Germany, France, UK, Ireland and Italy. 3

4 The following chart shows the trend of import / export in Brazil between 2014 and 2015: Local production The medical, dental, hospital and laboratory products are an innovative, proactive and competent industry capable of providing 90% of the domestic market needs. It exports to more than 180 countries, thus generating about 60,000 jobs in the country. Brazilian companies (more than ) produce annually about 11,000 products classified as medical equipment. The structure of the Brazilian medical equipment industry is still quite segmented, bringing together a large number of medium-sized and family structure companies (most of the industries are concentrated medium-sized companies, 54.3% of total). Next, the large to medium sized represented 16.6% and 13.9% were small-size companies. Most of domestic manufacturers are located in the state of São Paulo (76.8%) and other Southeastern states. By sector, domestic production is higher in the medical equipment segment, followed by implants (which recorded an impressive growth, surpassing Consumables), and closely followed by odontology sector. National manufacturing, continues to increase year on year, showing that there is a growing trend of nationalization, but imports still participates with high share rate, necessary given the lack of local supply of raw materials and components needed for the industry production. There is a heavy reliance on raw materials and electronic components imported into segments such as radiology, laboratories and Implants. Consumers trend Main demanding players for equipment and products health industry in Brazil are: 4

5 - The health service networks, encompassing public and private networks. - Government - Pharmaceutical industry and supplies and equipment medical industry. It is estimated that about 70% of the total commercialized in the hospitals in Brazil, is import origin, while around 30% are domestic products produced in Brazil. More than 65% is allocated to the private segment, main consumer of products offered by the health sector. It s important to highlight that only 38% of SUS (Public National Health System) purchases are domestic products or equipment, which demonstrates the enormous weight of imported products in this sector. Regarding consumption in Brazilian health market, the percentage share of domestic products recorded a 31.9% drop in 2013 (share in 2009 was 37.6% and raised to 38.6% in 2011). Public sector, through the Brazilian state, is main consumer second place in the sector, either through direct administration via public hospitals (at federal, state and municipal levels), or through the Public Health System (SUS), sponsoring accredited philanthropic and private hospitals. Just SUS, has a number of public and philanthropic hospitals serving about 200 million people in the country. This number can be considered as a big market for the health equipment industry, since the purchasing power of the Brazilian state is one of the largest in the world. Distribution and Trade Within the sector, principal products and equipment imported by Brazil were: Hospital and medical equipment: instruments for surgery, hemodialysis machines, electro-ophthalmology and diagnostics; Laboratory: testing reagents and equipment of high complexity; Odontology materials used in restorations, instruments and equipment, dental prostheses; Radiology (diagnostic imaging): MRI machines, Doppler ultrasound, computed tomography and angiography, movies and X-ray film; Implants: pacemakers, hearing aids and stents; There are approximately 3,000 equipment and materials distributors in Brazil, although only 500 of them can be classified as large companies. Excluding direct sales networks belonging to manufacturers, as well as large distributors, almost all agents are operating at regional level. Its modus operandi is usually through the purchase of products and equipment and resale them; rarely acting on commission. Because of the great heterogeneity of the sector, the fixed margin products in the resale s ranges between 10% and 70%. 5

6 Another important aspect is the segmentation on distribution. Distributors are often specialized in a particular area thereof, most do not cover the total territory (except for large companies), and so they are often appointed as distributors for a given area. Large distributors can subcontract smaller re-sellers throughout the country. This system of distribution through wholesalers, retailers and importers, operates for consumables and minor equipment goods. Regarding the distribution of big equipment s, it s s done directly by the manufacturer, for several reasons: 1) Most of the equipment manufacturers are large multinationals with offices and representatives in Brazil, selling directly to hospitals and laboratories. 2) This type of equipment requires a technical knowledge of the product that distributors cannot afford. Access requirements 1. Tariff and Import Duties: Due to the complexity of the Brazilian tax system, understanding of concepts and taxation require a thorough analysis of the extensive legislation and proper guidance of a local tax specialist. To clarify this complex tax system, the government, through the "National Health Surveillance Agency" ANVISA, has published a tutorial on tariffs to industrial products 3. Tax Initials Authority Variation Calculation Import Tax II Federal NCM CIF* x II% Tax on Industrialized Products Social Integration Program Contribution to Social Security Financing Tax on Circulation of Goods and Services * Cost, insurance and freight (CIF) IPI Federal NCM (CIF + II) x IPI% PIS Federal NCM and IR** COFINS Federal NCM and IR** ICMS State State of destination of the goods CIF x PIS% CIF x COFINS% ((CIF + Taxes*** + TS****)/(1 ICMS%))/ICMS% ** Taxation modality income tax; Collection can be done in two ways: taxable income, which focuses on the benefits; or deemed income, which focuses on billing. *** Sum os values of II, IPI, PIS, COFINS **** Siscomex Tariff: Euro 70,56 per import Source: ITA: "Analysis of the Medical and Hospital Sector in Brazil" in December Word+-+Tributos+-+Produtos+para+Sa%C3%BAde+vs+final.pdf?MOD=AJPERES 6

7 Find bellow some examples for different kind of products: Tariff Line Product I.I I.P.I I.C.M.S (São PIS COFINS Description Paulo) 3005 Gauze, bandages 2%-12% 0% 18% 2,10% 10,65% and similar articles 9011 Optical microscopes 0%-14% 5% 18% 2,10% 10,65% 9013 Crystal devices 18%- 15% 18% 2,10% 10,65% 14% 9018 Instruments and appliances used in medical, surgical, 0%-14% 2% 18% 2,10% 10,65% dental and veterinary 9019 Mechanotherapy appliances, 14% 2%- 18% 2,10% 10,65% massage and resuscitation 8% 9021 Articles and Orthopedics 0%-14% 0% 18% 2,10% 10,65% appliances 9022 X-ray devices and devices using Alpha, Beta and Gamma Ray 0%-14% 0%- 5% 18% 2,10% 10,65% Source: Brazil Federal Revenue: All taxes, except for II, are recoverable in the process through tax credit. 2. Sanitary Requirements Brazilian companies have made great efforts in the certification process, both process and product, as a result of the requirements of ANVISA and the requirements of integration into the international market. About 52% of companies have some kind of quality certification system, while 40% have licenses for the products they sell. Company wanting to export equipment to Brazil, must obtain a certificate of registration or INMETRO and ANVISA registration. 7

8 INMETRO - Certification Mandatory for all electrical equipment, please note that the CE mark is not accepted as equivalent. ANVISA Registration or Inscription It can only be done by Brazilian accredited institutions The approximate cost of certification for an equipment family is euros NOTE: The certificate is valid for five years Mandatory for equipment classified I to IV according to the degree of invasion to the human body Goods classified I and II can be inscrito, Classified III and IV have to be compulsorily registered. Inscription: takes about 3 to 4 months Registration: takes about 18 to 30 months Both Inscription and Registration are valid for 5 years Source: ITA: "Analysis of the Medical and Hospital Sector in Brazil" in December 2014 Recommendations: - See ANVISA website regarding specifically to health products import 4 - Representatives or distributors of the exporter in Brazil should conduct ANVISA registration procedure. Both the company and the product must be registered, the process takes from 6 months to 12 months. For companies that are already registered and wish to market a new product, the registration process takes between 4 and 6 months. - Another important aspect regarding distribution is the segmentation. Given the breadth of products that covers the sector, most of distribution dealers specialize in a particular area. Given the country area, most distributors do not cover the total territory, so distributors are often appointed in a given area or state. - Most common promotional activities in the health sector include exposure fairs and advertising in trade journals. In a continental-size country such as Brazil, trade fairs provide an excellent opportunity to show products and services to companies simultaneously to various Brazilian cities and states, which often attend the major international events held annually in São Paulo and other large cities such as Rio de Janeiro. - Analyze and account at your trade balance the so-called "Brazil cost". It is a concept that encompasses some structural inefficiencies in the Brazilian market that must be valued and included to product final price or profitability expectative, as well as taxes, logistics, bureaucracy, slowness and delays etc. 4 eiras/assunto+de+interesse/importacao 8

9 Major sector events - Hospitalar e Odonto Brasil - Feira internacional de produtos, equipamentos e serviços para hospitais, clínicas e laboratórios. - CIOSP-Congresso Internacional de Odontologia de São Paulo - Equip spa & Wellness - FCE Pharma-Exposición internacional de tecnologia para a indústria farmacêutica - REATECH- Feria Internacional de Tecnologias em Rehabilitação e Inclusão Links of interest - ANVISA: - Brazilian Health Devices: - ABIMO (Brazilian Association of the Industry Products and Medical Devices): - ABIMED (Brazilian Association of Medical-Hospital Equipment, Products and Supplies Importers): - ABRAMGE (Brazilian Association of Group Medicine): - ABIFARMA (Brazilian Association of the Pharmaceutical Industry): - SINCOMED (Labor Union of Retailers of São Paulo of Medical and Scientific Material for Hospitals): - SINAEMO (Labor Union of Industrial Products and Medical, Dental, Hospital and Laboratory Equipment): - FBH (Brazilian Federation of Hospitals): - National Health Agency: - Association of National Pharmaceutical Laboratories: - Datasus: - National Health Foundation: - Ministry Social Security: - Ministry of Health: - World Health Organization: - National Accreditation Organization: - Pan American Health Organization: - Federal Revenue: - Department of Health Care: w3.saude.(acronym state).gov.br. - State Health Secretariat of São Paulo: - Pharmaceutical Products Industry Labor Union of São Paulo State: - Portal Brazil Medicine: 9

10 Legislation of interest: The legislation applicable to the registration of medical and hospital equipment can be found in the ordinances: - Ordinance 2043 of 12/12/1994 of the Ministry of Health. - Ordinance 2661 of 20/12/1995 of the Ministry of Health. For additional information, we invite you to use the Ask the Expert service at You will receive an answer within 3 working days, free of charge Disclaimer The positions expressed are those of the authors and do not necessarily reflect the official opinion of the European Union. Neither the European Union nor any person acting on behalf of the European Union is responsible for the use which might be made of this information. Neither the European Union nor the ElanBiz consortium members are responsible or may be held accountable for any loss suffered as a result of reliance upon the content of this Fact Sheet 10