BRAZILIAN MEDICAL DEVICE MARKET AND JAPANESE INDUSTRY’S ACTIVITIES IN BRAZIL 2017 JANUARY 23

JAPAN EXTERNAL TRADE ORGANIZATION（JETRO）

SAO PAULO OFFICE

Brazilian Medical Device Market

2

Source：ABIMO

(Units: US$ Billion)

2,1

-3,0

-8,3

5,2

9,0

0,5

-10

-5

0

5

10

2013 2014 2015

Industrial production Medical,Dental, Optical device vs.

General industry(%)

Source: ABIMO

Source: IBGE- Pesquisa Industrial Mensal - Produção Física

Medical device production grows

despite the economic downturn

Year General IndustryManufacture of devices and

materials for medical,dental andoptical goods

2013 2.1 5.2

2014 -3.0 9.0

2015 -8.3 0.5

Population Composition

Source：IBGE (「Projeção da População do Brasil por sexo e idade」）

~2015~

Birthrate(※)： 1.72 Average Life Expectancy：75.44 years old Female：79.05 years old Male：71.88 years old ※Average number of children a single woman gives birth

3

0 10.000.000 20.000.000

0-4yrs

10-14yrs

20-24yrs

30-34yrs

40-44yrs

50-54yrs

60-64yrs

70-74yrs

80-84yrs

Over 90

2015

0 10.000.000 20.000.000

0-4yrs

10-14yrs

20-24yrs

30-34yrs

40-44yrs

50-54yrs

60-64yrs

70-74yrs

80-84yrs

Over 90

2020

0 10.000.000 20.000.000

0-4yrs

10-14yrs

20-24yrs

30-34yrs

40-44yrs

50-54yrs

60-64yrs

70-74yrs

80-84yrs

Over 90

2030

0 10.000.000 20.000.000

0-4yrs

10-14v

20-24v

30-34yrs

40-44yrs

50-54yrs

60-64yrs

70-74yrs

80-84yrs

Over 90

2035

Brazil’s Top Import Partners

(Units: US$ FOB million)

4

Source：MDIC Japan 2.6%

USA 17.3%

China 17.0%

Germany 6.6%

Argentina 6.6%

Others 32.2%

The 8th largest expoter

2015

Value Value Share Growth Rate

USA 26,471 23,803 17.3% △10.1%

China 30,719 23,364 17.0% △23.9%

Germany 10,380 9,131 6.6% △12.0%

Argentina 10,285 9,084 6.6% △11.7%

Korea 5,421 5,449 4.0% 0.5%

Italy 4,675 3,703 2.7% △20.8%

France 4,457 3,679 2.7% △17.5%

Japan 4,877 3,566 2.6% △26.9%

Mexico 4,378 3,528 2.6% △19.4%

Chile 3,411 2,882 2.1% △15.5%

Spain 3,499 2,565 1.9% △26.7%

India 4,290 2,483 1.8% △42.1%

Others 58,586 44,315 32.2% △24.4%

Total 171,449 137,552 100.0% △19.8%

2016

Medical device Imports by Country of Origin (2015)

5

(Units: US$ FOB million)

Source：ABIMO Importacao brasileira por pais NCMs ABIMO em US Doller FOB

Japan, the 4th largest exporter

0,0

200,0

400,0

600,0

800,0

1.000,0

1.200,0

1.400,0

USA Germany China Japan Malaysia

190.6Million

Imports by Country of Origin (2015)

2013 2014

Value Value Value Share

USA 1,535 1,561 1,316 32.7%

Germany 727 678 541 13.4%

China 432 469 429 10.6%

Japan 242 239 191 4 .7%

Malaysia 205 180 184 4.6%

Switzerland 184 186 140 3.5%

France 167 154 123 3.1%

Ireland 112 118 115 2.9%

Puerto Rico 93 97 108 2.7%

UK 119 105 88 2.2%

Others 1,085 989 794 19.7%

Total 4 ,901 4 ,776 4 ,029 100 .0%

2015

Medical device Imports by Country of Origin (2016, January - June)

6

(Units: US$ FOB million)

Source：ABIMO Importacao brasileira por pais NCMs ABIMO em US Doller FOB

Japan, the 4th largest exporter

Imports by Country of Origin (2016, January - June)

2014(Jan .-June) 2015(Jan .-June)

Value Value Value Share

USA 768 638 566 32.7%

Germany 356 272 223 12.9%

China 226 225 160 9.3%

Japan 133 105 80 4 .6%

Malaysia 97 107 74 4.3%

Korea 30 37 72 4.2%

Switzerland 94 73 59 3.4%

Ireland 59 63 58 3.4%

France 81 63 52 3.0%

Puerto Rico 48 50 48 2.8%

Others 493 482 337 19.5%

Total 2 ,385 2 ,115 1 ,729 100 .0%

2016(Jan .-June)

0

100

200

300

400

500

600

USA Germany China Japan Malaysia

80.5 Million

Medical device Imports from Japan

7 Source: Ministry of Industry, Foreign Trade and Services (SECEX, Aliceweb)

(Units: US$ FOB million)

2012 2013 2014 2015

Value Value Value Value Value Share

73 .2 93 .1 76 .7 68 .6 58 .9 56 .5% -5 .3%

Other diagnost ic equ ipment 22 .7 45 .3 34 .6 22 .2 16 .8 16 .1% -7.2%

Other syringes, needles, catheters, cannulae and the like 8.0 8.4 7.8 6.3 6.2 6.0% -6.1%

Dental Dr i l l Engines, Whether Or Not Combined On ASingle Base With Other Dental Equ ipment , And PartsAnd Accessor ies Thereof

1 .0 0 .3 2 .6 2 .9 6 .0 5 .8% 56 .4%

Ultrasonic scanning apparatus 10.5 10.7 13.7 9.5 5.2 5.0% -16.0%

Other ophthalmic instruments and appl iances 1 .8 3 .2 3 .2 3 .4 2 .8 2 .7% 11 .8%

36 .2 26 .9 42 .4 27 .5 29 .2 28 .0% -5 .2%

Computed tomography apparatus 16 .6 12 .4 21 .7 13 .0 11 .2 10 .7% -9.4%

For other uses 6.8 3.8 6.5 4.9 4.9 4.7% -7.8%Other, for medical, surgical or veterinary uses 5.3 5.2 7.4 4.2 4.2 4.0% -5.8%

21 .7 20 .5 20 .2 13 .7 10 .8 10 .3% -16 .0%

2 .3 4 .5 4 .8 5 .9 2 .5 2 .4% 2 .8%

3 .9 0 .9 2 .3 2 .5 1 .6 1 .6% -19 .6%Dental cements and other dental fillings; bone reconstructioncements 3.9 0.9 2.3 2.5 1.6 1.5% -20.2%

1 .7 0 .9 1 .7 0 .6 0 .6 0 .6% -22 .2%

0 .1 0 .2 0 .5 0 .4 0 .4 0 .3% 42 .4%

0 .2 1 .3 1 .2 0 .1 0 .1 0 .1% -6 .4%

0 .9 0 .5 0 .1 0 .2 0 .1 0 .12% -39 .7%

140 .1 148 .9 150 .0 119 .7 104 .3 100 .0% -7 .1%

Instant pr in t fi lm

Mechano-therapy appl iances; massage apparatus;psychological apt itude-test ing apparatus; ozone therapy,Medical , surgical , dental or veter inary furn iture

Total

Instruments and appl iances used in medical , surgical ,dental or veter inary sc iences

Apparatus based on the use of X-rays or of alpha, beta orgamma radiat ions

Photograph ic plates and fi lm in the flat for X-ray

Wadding, gauze , bandages and simi lar ar t ic les

Pharmaceut ical goods spec ified in Note 4 to th is Chapter

Orthopaedic appl iances, inc luding crutches, surgical be ltsand trusses; spl in ts and other fracture appl iances;ar t i f ic ial parts of the body; hear ing aids and other

Descr ipt ion2016 Annual

AverageGrowth

8

■45.4%(2015)→ 70.5%(2016) Increased market share

■12.0 %(2015)→ 20.0%(2016) Increased market share

CT（HS Code：902212）

Dental drill engines (HS Code：901841)

Artificial tooth（HS Code：902121）

Medical device Imports from Japan(2016)

Source: Ministry of Industry, Foreign Trade and Services (SECEX, Aliceweb)

Japan 70.5%

Switzerland 18.1%

Germany 4.3%

Others 7.1%

Germany 36.1%

Italy 28.9%

Japan 20.0%

Others 15.0% China

40.9%

Japan 33.4%

USA 18.1%

Others 7.7%

9

Prior to 1990～ Import through local distributors

Late 1990’s～ Establish factories and local corporations expecting to expand market share in Brasil

2000～ Acquisition of local companies to expand production and sales network

Japanese Medical device and Pharmaceutical Companies in Brazil

About one-third of the Japanese medical device companies entered Brazil after 2010 10

Recently established： 2010 FUJIFILM DO BRASIL 2012 NIHON KOHDEN DO BRASIL 2012 OMRON ELETRÔNICA DO BRASIL 2014 3-D Matrix MEDICAL TECHNOLOGY 2014 Paramount Bed do Brasil 2016 ASAHI INTECC CO. LTD.

2010 and later～ Growing interest to expand sales in Brazil Direct sales, following the Brazilian regulations Business expansion through acquisition Medium-sized companies staring to enter Brazilian market

Japanese Medical device Companies in Brazil

Rio Grande do Sul ・Takeda Brasil

Sao Paulo ・Daiichi Sankyo Brasil ・Takeda Brasil

11

Manaus Free Zone ・Farmaceutica do Hisamitsu Brasil

Further market expansion 2012 Takeda Brasil acquires Multilab 2014 Otsuka Pharmaceutical enters Health food sector through

acquisition of Jasmine 2014 Sumitomo Dainippon Pharma and Daiichi Sankyo Brasil sign

license agreement

Prior to 1990 New and generic drugs, medical consumables such as Salonpas, ointments

Japanese Pharmaceutical Companies in Brazil

・Astellas Farma Brasil ・Eisai Laboratórios ・Otsuka Pharmaceutical ・Rohto Mentholatum

12

Efforts in Brazil since 2014

■Great Improvement on Registration Time

for Class I, II, III, IV products

■Transparency secured on examination

Improvement on examination process

Results since 2015

For a Better Business Environment

■Simplification of operating permit, Autorização de Funcionamento de

empresa(AFE) re-registration procedure, required for acquisition and

secondary investment.

■Greater interest in implementing 2.to 5. with the changes since 2014.

■Further expedition of customs clearance on imports

■Reduction in waiting time for GMP audits.

Outstanding Improvement!

1. Revocation of the validity (1year) of the Operating Permit, Autorização de Funcionamento de empresa (AFE) required for manufacturing and sales activities.2 . Extension of renewal term of the GMP Certificate (from 2 to a maximum of 4 years).3 . The GMP audit services performed by ANVISA can now be performed by a third party agency (ANVISA certified agency).4 . GMP audit information held by foreign authorities can now be used by ANVISA.5. Extension of product registration period (from 5 to maximum of 10 years).

2016 Aug. 6 . Flexibility in transfer of product registration in transactions

2014 Nov.

2015 Jan.

Information ○Information on the ANVISA approval and registration system and publication of reports related to medical device market in Brazil and other Latin American countries. ○Information on changes in the system through daily news letter “Tsusho Koho (Business News)”.

Supporting Efforts to Develop Business Environment ○Working together with Public-private sectors, participation in medical workshops

Seminars ○Brazil-Japan Seminar on Regulations on Pharmaceuticals and Medical Devices

Individual Consultation ○Support to Japanese companies in considering investment or to expand investment. ○Consultation on the medical device market and on new changes in the system in Brazil. ○Support to companies by experts.

13

【Study Reports】 November 2015 Latest Trend in Medical Device Market in L. America

https://www.jetro.go.jp/world/reports/2015/01/3c99cdea65145906.html

March 2015 Overview of Approval and Registration System of

ANVISA (Brazil’s National Health Agency)

https://www.jetro.go.jp/world/reports/2015/02/fcea1fc7565daddb.html

October 2013 Medical Device Market in L. America

https://www.jetro.go.jp/world/reports/2013/07001514.html

March 2012 Brazil’s Medical Device Market and Regulations

https://www.jetro.go.jp/world/reports/2012/07000870.html

Activities of JETRO

14

MUITO OBRIGADA！

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