Striving to Expand Automation and Innovation

Q: How long has Siemens Diagnostics operated in Mexico and how important is this country to your global strategy?

A: Siemens Diagnostics is the combination of several companies that merged 80 years ago, including Bayer Diagnostics, Dade Behring, and DPC. These companies were all reference points for diagnostics and were present in Mexico for many years. Thus, the merger meant that Siemens Diagnostics immediately had a strong diagnostics division with an important presence in Mexico. Our priorities are to expand automation and lean laboratory principles in the Mexican market, and to introduce innovative tests that are not used in Mexico, such as tumor markers and vitamin D tests. We also want to make clients comfortable with our products and services and demonstrate that the company is in Mexico for the long run. Siemens Diagnostics has a long term plan for Mexico and the rest of the world. It is investing heavily in our country to reach the position it has in other markets like the US.

Q: What are the main opportunities for your products in Mexico?

A: In vitro diagnostics and laboratory automation are highly important fields that are currently underutilized in Mexico. The reason is that both the public and private healthcare sectors face severe constraints, whether due to swingeing budget cuts or investor concerns. These pressures are not unique to Mexico; other countries are also facing an aging population, a prolonged rise in chronic diseases, and budget cuts from their respective governments. However, while citizens in other countries are demanding more resources from their government, Mexico must respond to budget cuts either by reducing costs or reducing investments in less profitable activities. While automation is being used to liberate resources and increase efficiency in the likes of Argentina and Chile, this trend is very contained in Mexico. The Mexican government is also trying to implement a strategy that focuses on prevention, mainly for obesity and diabetes, but could also consider the potential that laboratory testing has for this same purpose. IVD tests can provide early diagnostics that allow health professionals to make timely decisions in the management of chronic diseases and prevent greater expenses to the health system in the future. Another challenges lies in providing information to the Mexican medical community, which is often unaware of the latest developments in diagnostic testing. For example, Vitamin D tests are utilized worldwide, especially north of the Equator where citizens get low sun exposure. While this test is extremely useful for Nordic countries, it also provides a lot of information for countries like Mexico. This test has become widespread in South America over the last four years but it has been largely ignored in Mexico. It can help to predict cardiac and renal diseases but doctors have not adopted it. We need to educate the market as to the benefits of these tests but this has proven to be extremely complicated so far. Our sales are not very different from those of other companies. The government accounts for 70-75% and the rest is taken up by the private sector. While the private sector is growing in Mexico, our government is constantly challenged by the increased demand from an aging population and growth of chronic diseases.

Q: What percentage of the healthcare budget is allocated to diagnostic equipment?

A: This is a difficult number to determine. There is a rule of thumb worldwide that states that roughly 4% of healthcare budgets are spent on the operation of laboratories, where around 70% of clinical decisions are made. In Mexico, this calculation is not straightforward as the healthcare system depends on a variety of systems and institutions. While hospitals have clear budgets for medical devices, these are not properly defined. Approximately US$474 million is spent on IVDs but this is tallied up as part of expenditure on medical devices. Thus, authorities have to choose to spend on medical devices, medical products, or even treatments themselves. This has led to a situation where institutions prefer to spend their budgets on tried and tested products. Another problem is that all information on treatments and expenditure is decentralized. There are reams of laboratory information spread across many laboratories but no one seems to be using them for research purposes. We obtain most of our information from surveys carried out by market consultants as there is little access to public records for such information.

Q: How can this situation be fixed so that laboratories can share data and what would be the impact of implementing a shared database?

A: It is this rather frustrating to know this information exists but is not being used in the right way. For example, patients tested for tumor markers, hormones, glucose, or cholesterol leave records at their hospitals but that information is kept on stand-alone systems. This means a holistic, multi-centric analysis of this information cannot be implemented; it must be carried out through smaller analyses at every single center. There are ethical considerations as patients have a right to privacy but we can obtain a lot of significant information without violating their privacy. This data will allow us to determine many trends in the health of the Mexican population. While many hospitals publish information of this kind, a complete database of all this data should be gathered from all hospitals to determine the right trends. Without these networks, research cannot blossom as researchers are isolated. When this information is consolidated, I am sure researchers will find data that will allow them to tackle many of Mexico’s health problems in a comprehensive way.

Q: Siemens Diagnostics has a very broad range of products. What are your major divisions?

A: We have several major divisions. One of them is immunochemistry, which usually encompasses hormones, tumor markers, infectious diseases, allergies, and clinical chemistry. Another is automation, in which we are putting a lot of effort as we have the technology and knowhow to rapidly develop it. We have an additional division covering hemostasis, hematology, and specialty tests. Within this division, we have instruments to manage coagulation and hematology, including blood cell counts and special tests such as therapeutic drug monitoring and the measuring of plasmatic proteins. We also have a specialized division named “point of care” which targets small clinics, outpatient and specialty centers. This division has a very unique mix of products since these isolated centers need smaller instruments and a lot of connectivity to send the information they collect to larger systems. The final area is our molecular biology division, which is producing innovative and unique biotechnology products. For example, we have put for

Q: How open are your customers to adopting new trends in informatics and digital communications and what is the role of automation?

A: Opinions about such innovation are mixed. Most of our customers demand IT solutions as they are faster and easier than informing patients manually. It is now essential for most companies to have an information system that will generate reports and store data about the patient’s medical history. However, no single analyzer can perform all tests so all laboratories must have a range of different equipment to fulfill all their needs. We call these standalone systems. With standalone systems, laboratory technicians often need to move back and forth in the lab to perform all necessary tests, or to divide the sample into smaller ones that can be reexpedited wherever necessary. Automation can connect all standalone instruments into an intelligent unit that performs all the necessary tests without human intervention. This will allow laboratories to relocate people to optimize their time instead of forcing them to repeat tasks. Automation will also reduce the need for manual sample manipulation, thereby reducing the risks of contamination, human error, and hazards to health care practitioners. To date, few Mexican laboratories have incorporated this automation equipment. While such new pieces of equipment entail high initial costs, worldwide experience is that laboratories realize permanent cost reductions and productivity increases in the long-term. The total cost of ownership, accounting for time spent, the training staff undergo, and the number of samples performed, among other factors, should be properly considered when making a holistic analysis of the implementation of these technologies.

Q: How much do you rely on distributors and how do you choose them?

A: A large segment of our market is handled by integrators, highly sophisticated companies that specialize in providing turnkey solutions to laboratories. While we have a large portfolio, there is no company anywhere that can fully cover all the needs of all laboratories. Integrators take care of consolidating the needs of the market and providing complete solutions. They also provide technical and logistic services to remote areas that we are unable to access, and make investments that governmental institutions may be unwilling to make. We also have distributors that make our products available into different segments and geographies across the country. We are investing heavily in properly training our distributors to ensure that they are qualified to represent our products. In some way, they represent us even better than we would represent ourselves since they have the advantages of a local presence and knowledge.