Luis Nieto
Director General
ConvaTec
/
View from the Top

Helping Patients Help Themselves

Wed, 09/07/2016 - 12:20

Q: Have you seen any developments in the acquisition of medical devices due to regulatory improvements in Mexico?

A: Healthcare expenditure and access to medicine and medical devices are still relevant challenges for Mexico. 2015 was a difficult year for the public sector due to an increase in budget control. The approach many companies are taking is to work together and strengthen the bond with end users, physicians and nurses. Companies around the world are demanding an accurate estimate of market potential. Executives are struggling locally to get current market value, a step before in the chain. No actual information exists and “guesstimates” are no longer acceptable. There are different alternatives to market valuation, the most viable being an entity coordinating a third party to compile information from as many companies as possible and presenting it in the form of intelligence. The association grouping multinational innovative device manufacturers (AMID) might be the best entity to conduct this effort, due to the rising importance it is taking in our day to day activities.

The distribution channels are changing with little or no perceived value. Public sales are commonly and increasingly managed by what is known as integrators. They have gained significant power to control what they sell and how they sell it or integrate it. It is not clear how this has impacted access in a positive way. Mexico’s economy is certainly stronger than other countries’ in the region, but this is not reflected in usage, access and benefits for the patients. We keep seeing diseases such as hypertension and diabetes rising.

Q: What new business models are being developed in the industry to adapt to barriers in the healthcare system?

A: Administrative processes should be easy for customers to operate. Companies should, and most of them are, heavily investing in new technology, effective tools for approaching potential customers and raising awareness. Achieving or at least getting close to standard of care levels for the diverse therapies offered by innovative companies is now possible as the main barrier has been traditionally physician and patient awareness. With the correct approach and use of the available digital platforms, you can truly impact the right audience and based on quality content, including clinical evidence, develop patient flow, benefits and growth.

Out of pocket health expenditure

Q: Part of ConvaTec’s value proposition is increasing quality of life through innovation. How do you measure quality of life?

A: One of the ways in which companies measure success is the extent to which patients are able to take care of themselves. About 60 percent of our consumers are either ostomy patients or wound patients, so ConvaTec provides training and abundant information for them to control their condition. The idea is to create a new situation where the patient is entirely responsible for his condition and is able to do something about it. By no means are they going to stop needing healthcare professionals, but if they know more about managing their own health their condition will certainly improve. The government invests 3.2 percent of GDP in health and due to poor awareness, late detection of diseases and a questionable exercise of the public budget in terms of efficiency and transparency, coverage is a humongous challenge. Three percent of GDP is invested in health privately, which includes less than 10 percent of the population covered by private insurers and the incredibly high and not necessarily properly prescribed consumption of medicines. The sector has a great opportunity to improve with benefits for patients and economic development for the country and the industry.

Q: Services subrogation is an increasing trend in the public sector. To what extent will this affect the way you negotiate with buyers?

A: I do not see a lot of subrogation. At current rates, I find it impossible for public institutions to send massive amounts of patients to private hospitals. What I think is a possibility is for private companies to build and run public hospitals, which might prove successful if supervision and transparency are ensured. We do business with public institutions, integrators, distributors and retailers, as we continue to create clinical acceptance of our products among users.

Q: What opportunities do you see in participating in consolidated purchase tenders?

A: I do not see any benefits in this initiative if product quality and patient differences are not considered. Rather, we will continue selling to different institutions. Pricing of consolidated purchases is an issue since they ask for extremely low prices, yet companies are not open to offering low prices while they are expected to also invest in innovation and education. Every state’s healthcare system and institution creates an opportunity to invest in awareness and channel development.

 

This transcription is a written reproduction of an interview with Luis Nieto in his personal capacity as an executive in the medical device industry. The opinions expressed are the author’s own and do not reflect the view of ConvaTec or any of its subsidiaries. This transcription was not subject to the approval of Convatec or any of its subsidiaries.

Health Expenditure