Health Trade Gap Highlights Business Opportunity

Q: How has the medical device industry contributed to the country’s health sector?

A: The Ministry of Economy is increasing its involvement in this sector, as the country ranked eighth in the world for medical device manufacturing. Mexico is No. 28 in consumption of said products. While this is excellent for our trade balance, the gap indicates too little spending on medicine in the public sector and a lack of integration of innovation. B. Braun specifically exports 4 percent of its total sales and 6 percent of its manufacturing. Last year we grew an outstanding 46 percent as a company and to date we have grown 30 percent. B. Braun hopes to close 2016 with 25 percent growth.

The medical devices that are most popular in Mexico tend to be those with very basic applications. The public sector represents 70 percent of our business and the majority neglects to employ innovative products. A large part of the costs of treating a patient is in infrastructure or other non-medicinal aspects, as the treatment only tends to be 5 percent of the cost. The public sector’s focus on saving money in this small proportion of patient cost simply generates a cost-oriented mentality.

Q: Which areas of the industry drive growth for B. Braun?

A: Hemodialysis is one of the fastest growing areas, with a 10-15 percent market share. B. Braun’s vanguard technology for hemodialysis helped gain our market participation. Glaucoma is another expanding market, as chronic renal failure is affecting an increasing number of people and B. Braun has solutions for these conditions. Across all business areas, our company is growing by a minimum of 18 percent thanks to the high level of service that differentiates us.

Our new short-stem hip prosthesis, metaphyseal prosthesis, is becoming more popular. This minimizes the bone damage on implantation, making future replacement hips easier to insert. The previous product offered by B. Braun designed according to the anatomy of Mexican citizens, Logical Angioplasty System (SLA), enjoyed 15 years of success in the market for more than 20,000 individuals.

The new prostheses have benefited 250 people so far, an impressive statistic for an implant in its first nine months on the market. Our 3D endoscope equipment is another example of innovative technology. This system allows a surgeon to observe depth on a screen while operating, which makes tying and closing surgery easier and more accurate. This year we are launching hydrocephalus valve systems, a further example of our pioneering treatments. Our business models aim to combine products with services and offer added value for patients. Our integral services are targeted at equipment and sterilization central rules and across surgical treatments. The cost of our solutions is reasonable, which is vital for long-term treatments. That our prices are in Mexican pesos means we can offer the same value for clients over 12-month periods.

Q: What are the greatest challenges you have faced in pharmaceutical logistics?

A: We directly manage our own logistics, for which we are beginning to construct a new 3,000m2 logistics center with space for 4,000 pallets. This narrow-aisle center will manage heights of up to six pallets, advanced water treatments and sustainable elements including Helios photovoltaic technology. We manage a mixed logistics solution, including direct delivery to hospitals or personally collecting medical equipment that requires maintenance. This type of service cannot be matched by other logistics providers due to technical particularities. Logistics is becoming more challenging. Federal institutions are participating in a consolidated purchase system, wherein they offer one price for about 900 locations and require a logistics solution across several states.

Q: Where is B. Braun focusing the reinvestment of its profits in Mexico?

A: Every year, B. Braun invests MX$20-30 million in modernization and introducing new technology to its manufacturing. We are focusing investments in three key areas, the most important of which is our logistics center. The center’s cost will surpass MX$50 million (US$2.7 million).