Nelson Valenzuela
LATAM and Caribbean Director
View from the Top

Articulate Growth for Mexico

Wed, 09/06/2017 - 12:48

Q: What is your view on selling through public tenders in Mexico?

A: Due to the market niche we work in, we are obligated to deal with huge distributors that offer integral services, which is complicated. They consolidate several brands and sell a complete service to the hospitals of IMSS and ISSSTE, although PEMEX, SEDENA and SEMAR have remained outside this model. Both IMSS and ISSSTE classify Arthrex’s technology as minimally invasive (MI) and 90 percent of these MI procedures are abdominal, while 10 percent is for joints. This turns into a fight every year as the volume reduces. Being only 10 percent of the contract, distributors do not place the same emphasis on arthroscopy. The ideal scenario for us would be for integral services to end or include arthroscopy in orthopedic tenders. Ideally, we would provide services directly to government institutions but they never have the budget to buy everything.

Q: What is Arthrex’s strategy to expand its reach in the private market and to stand out against its competitors?

A: We have learned we need to analyze more factors before making the decision to launch a new product, to focus on more profound marketing studies using a sniper technique. Globally, Arthrex has 12,000 products, of which 2,600 are available in Mexico, which is the right number of SKUs based on the Mexican market’s need. This has enabled us to see growth rates of 17-18 percent in the country. Another key point is service: when we sell an anchor, we are also selling the accompanying equipment and a technician to help. For MX$25,000 (US$1,389) worth of sales, we have to move MX$600,000 (US$33,000) of equipment, products and personnel. We have to define our service standards and stick to them. We go with a full set of equipment, the instruments are in perfect condition, the technician will be well-trained and we will be there for anything needed. This reinforces our credibility with doctors.

Q: Which products are you bringing to Mexico?

A: We do not want to deprive Mexico of innovation, so we work on a diversified portfolio for A and B markets as physicians move between distinct hospitals and different reimbursement scenarios. In Mexico, the most common surgeries would be shoulder instability, rotator cuff tears, anterior cruciate ligaments rupture, meniscus reparation, syndesmosis, Achilles tendon repair and internal braces for ankle stability. These seven surgeries all have an A and B portfolio available in Mexico.

Q: Arthrex has an educational center in Florida. To what extent does the education you offer in Mexico help doctors improve their skills?

A: In addition to the Florida Center we have one in Mexico and one in Brazil because we have the obligation to correctly train doctors to use our products. The courses are open to everyone, even those who do not use our products. Some courses are available online through Arthrex’s webpage, which puts over 4,000 videos online, and through our Surgeon’s Virtual App, which enables doctors to first practice digitally before moving onto dry labs. In our labs we use imported cadaveric pieces from the US. Unfortunately, in Mexico the culture of organ donation is poor and if we have chance to use a Mexican cadaver, the law is clear, demanding use of the full body. Can you imagine putting a full body on a table just to practice on the knee?

Q: What is the most important product you will be launching in Mexico in 2017?

A: Apollo, a bipolar radiofrequency for arthroscopy. It will be brought to Mexico in July 2017. Arthrex has the fastest processing times of all medical device companies in Mexico and our products are approved within an average of 60 days. In our 2015-2016 financial year, we registered 102 products. The priorities for this year will be to maintain operational excellence and for our sales team to begin identifying new opportunities and to relaunch technologies that did not have the initial impact we had hoped for. The second priority will be human capital management. The third point will be to continue our great work in compliance, not as an obligation but as a way of business.