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Is Brazil the Next Big Thing in Healthcare?
                                                Healthcare?
                        Complex Brazilian Healthcare Market Poised for Growth

                                             Willian Fujioka, Industry Analyst
                                                        Healthcare
                                                      June 13, 2012




© 2012 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property of
Frost & Sullivan. No part of it may be circulated, quoted, copied or otherwise reproduced without the written approval of Frost & Sullivan.
Today’s Presenter

                    Functional Expertise
                    • 7 years of market intelligence expertise within the pharmaceutical industry and Frost &
                     Sullivan. Particular expertise in:
                       - Conducting qualitative and quantitative primary market researches
                       - Creating and designing market reports and executive dashboards with secondary data
                         (sales and prescriptions)
                       - Developing competitive intelligence environment and analyzing business development
                         opportunities
                       - Planning and implementing datamining and business intelligence projects
Willian Fujioka        - Managing sales force effectiveness activities
Industry Analyst,
Healthcare          Industry Expertise
                    • 7 years in the Healthcare sector, mainly:
Frost & Sullivan       - Cardiology
Latin America
São Paulo              - Respiratory
                       - Dermatology
                       - Gynecology
                       - CNS
                       - Oncology



                                                                                                                2
Agenda

•   Why is this a HUGE Growth Opportunity?
•   Let’s understand what will build this outstanding
    scenario = Let’s look beyond…
    •   ... the expansion of the C-class
    •   ... the non-branded generic drugs
    •   ... the Brazilian Unified Health System (SUS)
    •   ... the premium hospitals
    •   ... hypertension and epidemics
•   The key take-away


                                                        3
Why is this a HUGE Growth Opportunity?

Brazil has turned into a focus point globally…




                                                 4
Why is this a HUGE Growth Opportunity?

… and when we look a little closer, Healthcare shines.

                                                                                              CAGR
                     2011                                     2015
                                                                                            2011-2015

   GDP1       $2.49 trillion                         $2.87 trillion                               3.6%

 Healthcare
  Market2
              $32.50 billion                       $52.30 billion                               12.6%


                Sources: 1. IMF World Economic Outlook Database Apr 2012, GDP, current prices; 2. Frost & Sullivan analysis.


                                                                                                                        5
Let’s understand what will build this outstanding
scenario
                            Rise of the
                            midde class




                                            Emerging of
          Generics
                                            Healthcare IT




              Investments
                                      Heavy disease
                  from
                                         burden
              government


                                                            6
Let’s look beyond the expansion of the C-class
                                     Distribution of Population per Economic Class1, Brazil, 2003-2014
                              Economic Class                  2003                   2011                    2014
                                       A/B                              13.3                22.5                     29.1
                                        C                               65.9                105.4                    118.0
                                       D/E                              96.2                  63.5                    48.9

Number of Insured People and Total Population Coverage Rate2, Brazil, 2003-2011
                              50.0                                                                   45.7    47.6      40.0%




                                                                                                                                Total population coverage
  Insured people (Millions)




                                                                                   40.8     42.1
                                                                 37.0      38.8                                        35.0%
                              40.0             33.7    35.0
                                        31.8                                                                           30.0%
                              30.0                                                                                     25.0%
                                                                                                                       20.0%




                                                                                                                                           rate
                              20.0                                                                   24.0%   25.0%     15.0%
                                                                19.8%      20.5%   21.5%    22.0%
                                       18.0%   18.8%   19.0%                                                           10.0%
                              10.0
                                                                                                                       5.0%
                               0.0                                                                                     0.0%
                                        2003   2004    2005      2006      2007    2008     2009     2010    2011

                                                                                                                Sources: 1. FGV; 2. ANS.


                                                                                                                                                   7
Let’s look beyond the non-branded generic drugs


               Non-branded
                 generics




                               Biosimilars:     Other
   Branded    Pharma and       recent and     segments
   generics     Biotech         upcoming
                                regulation
                                                     Low-cost
                                                   versions with
                                                   similar value:
                                                     easier to
               Blockbusters’                       use/maintain,
                  patent                          produced locally
                  expiries                              etc.




                                                                     8
Let’s look beyond SUS
    SUS: Brazilian Unified Health System
    • Based on the Federal Constitution’s principles of health, which consider healthcare to be a
       citizen’s right and the state’s duty.
    • Central purpose: to provide universal, integrated, and egalitarian access to high-quality
       healthcare.
    • The policy-making comprises executive bodies, social participation and intermanagerial
       committees – in federal, state and municipal levels.


“Popular Pharmacy”
  • Up to 90% reimbursement from government to pharmacies, for drugs that treat +10 chronic diseases.
  • 100% reimbursement for hypertension, diabetes and asthma (just included).

Multiannual Plan (2012-2015), from Ministry of Planning
  • Main objective: Expansion, Development and Improvement of SUS
  • $175.96 billion budget

Investment Program for Health Industrial Complex, from Ministry of Health
  • Main objective: Create 20 PPPs with technology transfers to produce locally biosimilars and medical devices
  • $1.11 billion budget

                                                                                                                  9
Let’s look beyond the premium hospitals

                              Overall pressure
                                  for more
                               productivity in
                                  hospitals
           Modernization                            Aggressive
              of public                          expansion of big
           infrastructure                         private groups
                              Emerging of
                              Healthcare
                                  IT
          National Plan for                         Boom of
             Universal                            smartphones
            Broadband                              and tablets:
            Connection                              m-Health
                               International
                               accreditation
                                certificates                        Medical
                                                                    Tourism

                                                                              10
Let’s look beyond hypertension and epidemics
Main Trends for Top Health Disorders and Causes of Death1, Brazil, 2011–2015
Health of mothers and children
Maternal mortality                                 Slow decline
Preterm delivery                                   Increasing
Infectious diseases
Dengue                                             Seasonal epidemics
Visceral leishmaniasis                             Increasing
Non-communicable diseases
Overweight/obesity                                 Rapid increase
Diabetes                                           Increase
Hypertension                                       High prevalence, still increasing
Psychiatric diseases                               High prevalence
Asthma                                             High prevalence
Cancers of the breast, lung, prostate, and colon   Increasing
Tobacco use                                        Declining but still at unacceptable levels
Excessive use of alcohol                           Declining but still at unacceptable levels

              More than 2.0 million new cancer cases2 are expected by 2015
                                                                               Sources: 1. Lancet; 2. INCA.


                                                                                                      11
The key take-away

Yes, Brazil is a big thing in Healthcare, with opportunities for all
segments and not only current players in Healthcare industry.


                            Pharma and Biotech
                 Specific
                                                                   •   Local Companies
                 Drivers                                           •   Multinational
                             Medical Devices                           Companies
                 Specific
                 Drivers
     Overall                   Healthcare IT       Opportunities
     Drivers     Specific
                 Drivers
                             Medical Imaging                       •   Healthcare
                 Specific                                              Players
                 Drivers                                           •   Non-Healthcare
                            Clinical Diagnostics                       Players




                                                                                         12
Next Steps




Develop Your Visionary and Innovative Skills
       Growth Partnership Service                      Share your growth thought leadership and ideas or
                                                                join our GIL Global Community




                                Join our GIL Community Newsletter
                          Keep abreast of innovative growth opportunities




                                                                                                           13
Your Feedback is Important to Us

          What would you like to see from Frost & Sullivan?

Growth Forecasts?

Competitive Structure?

Emerging Trends?

Strategic Recommendations?

Other?


            Please inform us by “Rating” this presentation.

                                                              14
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SlideShare, and Twitter



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             http://www.linkedin.com/companies/4506




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                  http://twitter.com/frost_sullivan

                                                         15
For Additional Information



Britni Myers                 Reenita Das
Corporate Communications     Senior Vice President
Healthcare                   Healthcare
(210) 477-8481               (408) 857-9386
Britni.myers@frost.com       rdas@frost.com




Allison Tucker
Sales Manager
Healthcare
(210) 247-2462
Allison.tucker@frost.com




                                                     16

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Brazilian healthcare market 6 13-12

  • 1. Is Brazil the Next Big Thing in Healthcare? Healthcare? Complex Brazilian Healthcare Market Poised for Growth Willian Fujioka, Industry Analyst Healthcare June 13, 2012 © 2012 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property of Frost & Sullivan. No part of it may be circulated, quoted, copied or otherwise reproduced without the written approval of Frost & Sullivan.
  • 2. Today’s Presenter Functional Expertise • 7 years of market intelligence expertise within the pharmaceutical industry and Frost & Sullivan. Particular expertise in: - Conducting qualitative and quantitative primary market researches - Creating and designing market reports and executive dashboards with secondary data (sales and prescriptions) - Developing competitive intelligence environment and analyzing business development opportunities - Planning and implementing datamining and business intelligence projects Willian Fujioka - Managing sales force effectiveness activities Industry Analyst, Healthcare Industry Expertise • 7 years in the Healthcare sector, mainly: Frost & Sullivan - Cardiology Latin America São Paulo - Respiratory - Dermatology - Gynecology - CNS - Oncology 2
  • 3. Agenda • Why is this a HUGE Growth Opportunity? • Let’s understand what will build this outstanding scenario = Let’s look beyond… • ... the expansion of the C-class • ... the non-branded generic drugs • ... the Brazilian Unified Health System (SUS) • ... the premium hospitals • ... hypertension and epidemics • The key take-away 3
  • 4. Why is this a HUGE Growth Opportunity? Brazil has turned into a focus point globally… 4
  • 5. Why is this a HUGE Growth Opportunity? … and when we look a little closer, Healthcare shines. CAGR 2011 2015 2011-2015 GDP1 $2.49 trillion $2.87 trillion 3.6% Healthcare Market2 $32.50 billion $52.30 billion 12.6% Sources: 1. IMF World Economic Outlook Database Apr 2012, GDP, current prices; 2. Frost & Sullivan analysis. 5
  • 6. Let’s understand what will build this outstanding scenario Rise of the midde class Emerging of Generics Healthcare IT Investments Heavy disease from burden government 6
  • 7. Let’s look beyond the expansion of the C-class Distribution of Population per Economic Class1, Brazil, 2003-2014 Economic Class 2003 2011 2014 A/B 13.3 22.5 29.1 C 65.9 105.4 118.0 D/E 96.2 63.5 48.9 Number of Insured People and Total Population Coverage Rate2, Brazil, 2003-2011 50.0 45.7 47.6 40.0% Total population coverage Insured people (Millions) 40.8 42.1 37.0 38.8 35.0% 40.0 33.7 35.0 31.8 30.0% 30.0 25.0% 20.0% rate 20.0 24.0% 25.0% 15.0% 19.8% 20.5% 21.5% 22.0% 18.0% 18.8% 19.0% 10.0% 10.0 5.0% 0.0 0.0% 2003 2004 2005 2006 2007 2008 2009 2010 2011 Sources: 1. FGV; 2. ANS. 7
  • 8. Let’s look beyond the non-branded generic drugs Non-branded generics Biosimilars: Other Branded Pharma and recent and segments generics Biotech upcoming regulation Low-cost versions with similar value: easier to Blockbusters’ use/maintain, patent produced locally expiries etc. 8
  • 9. Let’s look beyond SUS SUS: Brazilian Unified Health System • Based on the Federal Constitution’s principles of health, which consider healthcare to be a citizen’s right and the state’s duty. • Central purpose: to provide universal, integrated, and egalitarian access to high-quality healthcare. • The policy-making comprises executive bodies, social participation and intermanagerial committees – in federal, state and municipal levels. “Popular Pharmacy” • Up to 90% reimbursement from government to pharmacies, for drugs that treat +10 chronic diseases. • 100% reimbursement for hypertension, diabetes and asthma (just included). Multiannual Plan (2012-2015), from Ministry of Planning • Main objective: Expansion, Development and Improvement of SUS • $175.96 billion budget Investment Program for Health Industrial Complex, from Ministry of Health • Main objective: Create 20 PPPs with technology transfers to produce locally biosimilars and medical devices • $1.11 billion budget 9
  • 10. Let’s look beyond the premium hospitals Overall pressure for more productivity in hospitals Modernization Aggressive of public expansion of big infrastructure private groups Emerging of Healthcare IT National Plan for Boom of Universal smartphones Broadband and tablets: Connection m-Health International accreditation certificates Medical Tourism 10
  • 11. Let’s look beyond hypertension and epidemics Main Trends for Top Health Disorders and Causes of Death1, Brazil, 2011–2015 Health of mothers and children Maternal mortality Slow decline Preterm delivery Increasing Infectious diseases Dengue Seasonal epidemics Visceral leishmaniasis Increasing Non-communicable diseases Overweight/obesity Rapid increase Diabetes Increase Hypertension High prevalence, still increasing Psychiatric diseases High prevalence Asthma High prevalence Cancers of the breast, lung, prostate, and colon Increasing Tobacco use Declining but still at unacceptable levels Excessive use of alcohol Declining but still at unacceptable levels More than 2.0 million new cancer cases2 are expected by 2015 Sources: 1. Lancet; 2. INCA. 11
  • 12. The key take-away Yes, Brazil is a big thing in Healthcare, with opportunities for all segments and not only current players in Healthcare industry. Pharma and Biotech Specific • Local Companies Drivers • Multinational Medical Devices Companies Specific Drivers Overall Healthcare IT Opportunities Drivers Specific Drivers Medical Imaging • Healthcare Specific Players Drivers • Non-Healthcare Clinical Diagnostics Players 12
  • 13. Next Steps Develop Your Visionary and Innovative Skills Growth Partnership Service Share your growth thought leadership and ideas or join our GIL Global Community Join our GIL Community Newsletter Keep abreast of innovative growth opportunities 13
  • 14. Your Feedback is Important to Us What would you like to see from Frost & Sullivan? Growth Forecasts? Competitive Structure? Emerging Trends? Strategic Recommendations? Other? Please inform us by “Rating” this presentation. 14
  • 15. Follow Frost & Sullivan on Facebook, LinkedIn, SlideShare, and Twitter http://www.facebook.com/FrostandSullivan http://www.linkedin.com/companies/4506 http://www.slideshare.net/FrostandSullivan http://twitter.com/frost_sullivan 15
  • 16. For Additional Information Britni Myers Reenita Das Corporate Communications Senior Vice President Healthcare Healthcare (210) 477-8481 (408) 857-9386 Britni.myers@frost.com rdas@frost.com Allison Tucker Sales Manager Healthcare (210) 247-2462 Allison.tucker@frost.com 16