The largest and most populous country in South America, Brazil has undergone major changes since 1985, when the military regime was peacefully transitioned to a civilian democracy. Brazil benefits from abundant natural resources and a large labor pool that makes it the major economic power on the continent. Being the largest economy in South America, Brazil also is the largest medical device market by far.
The rise of Brazil’s medical device market can be attributed in part to the fact that the economy has grown rapidly and tens of millions of people have been lifted out of poverty in the last 20 years. The number of Brazilians living on $2 per day has dropped by half in the last 10 years to about 10% of the population. Still, Brazil is a country of extremes, with significant regional disparities in income and access to healthcare. The south is relatively prosperous compared to the northern parts of the country. 
Economic growth slowed considerable in 2011 and 2012 but with the World Cup coming in 2014, and the Olympics in 2016, Brazil is likely to see an economic boost.
Brazil has a very urban population. Roughly 85% of the population lives in cities, slightly higher than the US, Uk or France. The most populated regions are the Southeast and Northeast coastal areas. While most people have only heard of Sao Paulo and Rio de Janeiro, there are 17 cities with 1,000,000+ residents. However, Sao Paulo is the driving business engine of the country. Most large companies are located there and the majority of international companies choose Sao Paulo as their base over Rio. 
Population distribution by state
The population growth has been steadily dropping in Brazil since the 1960s due to the onset of the fertility decline, from 3% in 1960 to 0.9% in 2012, corresponding to a similar trend in Japan, France or the US. Current projections estimate the growth rate will continue to drop to about 0.3% per year between 2045 and 2050. 
Brazil’s population is made up of 25% people between the ages of 0-14, 68% people between 15-64 years and 7% people over 65. The median age in Brazil (29) is close to the world average but lower compared to countries such as the US, Germany or Japan. Compared to the world average, Brazil has a lower percentage of young people (27%), more people between 15-64 years (68%) and less seniors (9%). The percentage of seniors is expected to grow to 18% by the end of 2050 while the percentage of youngsters will represent only 19.9%, making Brazil one of the countries that will experience one of the fastest rates of population ageing among the most populous countries in the world. 
According to data from the World Health Organization in 2011, Brazil ranks 73rd worldwide in terms of life expectancy. Life expectancy for males and females in Brazil is 69 years, respectively 77, compared to Japan’s average of 80 and 87 and France’s 78 years, respectively 84. This has increased in Brazil from 2001 to 2011 with 3 years for men and women and will continue to do so, increasing the percentage of seniors in Brazil’s age structure.
Brazil’s Gross Domestic Product according to the World Bank was 2.253 trillion USD in 2012. This mean a growth rate of 0.9% from the previous year – smaller compared to that of the US, with 2.21%, or Japan (1.94%) but larger than Germany (0.67%) or France (0.01%). 
With Brazil’s unemployment at a historic low (5.5% in 2012), its high level of income inequality has declined for the last 14 years. More and more people are coming out of poverty – 21.4% of Brazilians lived below poverty line in 2009 compared to 30.8% in 2006. The GDP per capita for 2012 in Brazil was $12,100, close to the world average of $11,975.
For the medical device sector, the revenue reached $4.791 billion in 2010, an increase of almost 200% from 2003. Some of the most exported medical products in 2012 were consumables (hypodermic, textiles, adhesives etc.) and implants (orthopedics, neurological, cardiac etc.), while the most imported products are implants and laboratory equipment or consumables. 
Brazil is part of the Mercosur, an economic and political agreement between Argentina, Brazil, Paraguay, Uruguay and Venezuela that promotes free trade, as well as fluid movement of goods and currency. Apart from the member countries, Bolivia, Chile, Colombia, Ecuador, Guyana, Peru and Suriname currently have associate member status. Regional trade is expecting to increase as EU is negotiating free trade agreement with Mercosur.
According to data from Banco Central do Brasil, Brazil’s imports have increased by 25.2% year-over-year in July 2013. Brazil is the 8th largest trading partner for the US, with $76 billion in trade in 2012.
The structure of the Brazilian healthcare system is a Unified Health System which is governed by the Federal Constitution of 1998. In terms of government vs. private expenditure, the system resembles that of the US, where less than half of the costs are covered by the government. Being a Constitutional right, healthcare in Brazil is provided to all Brazilian residents and foreigners on Brazilian territory though the Unified Health System (SUS), the national healthcare system. The Health ministry is responsible with administering the national health policy, the primary health care being the responsibility of the federal government. Around 20% of the country’s 200 million people have private health insurance, while the rest are covered by public insurance, making it one of the biggest private markets along with the US, with 197.3 million people covered.
Given the magnitude of its population and size, the per capita medical expenditure is low and varies drastically between urban and rural areas. Even though Brazil is one of the world’s largest economies, the medical expenditure per capita is still very low. The yearly health expenditure per capita is an average of $1,009 or 9% of its GDP, being ranked 44th in terms of health expenditure worldwide. The yearly health expenditure per capita has been increasing steadily by 45% compared to 2008, making a very attractive market for medical manufacturers. The biggest healthcare cost per capita in the South American continent is paid by Argentina, with $1,433 and Chile $1,292 while Brazil comes in fourth, spending $1,043 per capita.
Even though healthcare spending is higher than other Latin American countries, Brazil key health indicators such as infant mortality rate or life expectancy are below those of Argentina’s, Chile’s or Mexico’s. Brazil’s healthcare system was ranked 125th by the World Health Organization (WHO), with the reasoning that people make high out-of-pocket payments for health care. In 2013, with the program launched by the Ministry of Health, $603 million were invested in improving the infrastructure of health services for the construction, renovation or expansion of hospitals.
Brazil’s general government expenditure on health as percentage of the total health expenditure was 46% in 2011, similar to the United States but considerably lower than countries such as France (77%) or Japan (80%). Government expenditure on health in Brazil has increased by only 1% from 2002 to 2011. 
According to World Bank data, private expenditure on health in Brazil is one of the highest in Latin America and compared to the worldwide average (39%). Compared with other leading economies, Brazil’s private expenditure on health is the same as the USA but considerably higher than countries such as Japan or France.
Even though Brazil’s health system should limit out-of-pocket expenses, reports show Brazil has one of the highest ratios of families dealing with crippling expenditure on health. (source). These expenses are lower than 63%, the worldwide average and higher than those of the US or France.
Brazil boasts the largest medical device market in Latin America. Imports account for a small percentage of the Brazilian market. Domestic manufacturers focus on local demand and as such, exports are also few in numbers. Devices that are imported are typically manufactured either in the US or Europe (who comprise sixty percent of the total imports) and are usually high-tech and specialized. The biggest challenge for foreign manufacturers will be appealing to a market that is heavily reliant on domestic producers.
ANVISA, the Agencia Nacional de Vigilância Sanitária, is the agency responsible for the regulatory framework of medical devices. This framework was implemented in 1976 with Law No. 6360, Decree 79.094/77. The specific requirements for registering a medical device with ANVISA are outlined in Resolution RDC No. 185/01. All products must be registered with ANVISA prior to being imported in Brazil. In 2009, Brazil sold around $289 billion in health products with sales projected to grow at $487 billion in 2016. Most of these sales were from manufacturers (76%) located in the Sao Paulo area. 
1.8 physicians and 6.4 nurses serve every 1,000 people. Brazil falls behind the EU average of 3.3 physicians and 8 nurses for every 1,000 people and the US, with 2.4 physicians and 8.2 nurses per 1,000 people
There are 2.3 hospital beds per 1,000 people in Brazil available in both public and private hospitals, a number far below the EU average of 5.8 beds. Out of the 7685 hospitals, 67% of them belong to the private sector. Measures have been taken to encourage in the health sector following a plan launched in 2008 and supported by International Finance Corporation, the Brazilian and the Inter-American Development Banks.
Doing business with Brazilians
According to data from the World Economic Forum, Brazil is ranked 56th in the Global Competitiveness Index for 2013-2014, behind countries such as Chile (34th) or Panama (40th). In terms of the BRICS economies, China is the leading country, ranked 29th, followed by South Africa on the 53rd position. Compared to last year, Brazil dropped from the 48th position, a move justified by a tightening of access to financing, concerns about government efficiency and corruption, among others. The same source cites a survey that lists the inadequate supply of infrastructures, tax regulations and rates as well as the inefficient government bureaucracy as being the most problematic factors for doing business.
Brazil requires 8 types of document to allow imports, which is one more than the average in the Latin America and Caribbean region and 3 more than the OECD average of high income countries.
- Bank document
- Bill of lading
- Cargo release order
- Commercial invoice
- Customs import declaration
- Entry Invoice (Nota Fiscal)
- Packing list
- Technical standard/health certificate
The time to import a product in Brazil is 13 days on average, 4 days less than the average in the Latin American and Caribbean region and 3 days more than the OECD high income countries’ average. This estimate takes into account obtaining, filling out and submitting document, transport, custom clearance and inspections, port and terminal handling but excludes transport time.
Brining a device into Brazil implies 3 main duties and taxes: the MERCOSUL’s Common External Tariff (CET), the Industrial Products Tax (IPI) and the Merchandise and Service Circulation Tax (ICMS). The CET, charged for imports from non- MERCOSUL countries, averages at 14%, but, depending on the type of product, can go as low as 0% or as high as 20%. The IPI is applied to both foreign and domestic manufactured goods and varies between 0-15%, depending on how the essential the imported good is deemed by the government. The first two fees go usually hand in hand; if the CET is high, then most likely the IPI will be high as well. The ICMS is a sort of VAT payable at all stages of sale and varies from 7-25% depending on state.
The Logistics Performance Index (LPI) is the average score for a country reflected by the efficiency of custom procedures, trade and transport related infrastructure, ease of arranging competitively priced shipments, quality of logistics services, ability to track and trace consignments and timeliness of shipments in reaching their destination.
1 = Low; 5 = High
According to data gathered by Doing Business, Brazil ranks low among other economies when it comes to the ease of enforcing contracts. Enforcing a contract takes 731 days, involves 44 procedures and costs 16.5% of the value of the claim, putting Brazil at 116 out of 185 economies ranked by Doing Business. China ranks well ahead of Brazil, on the 19th position, Japan is ranked 35th and Chile 70th, while the regional average for Latin America and the Caribbean is the 115 spot.
For a detailed overview on how the Brazilian real (R$) compares to the US dollar (US$), please see the graphic below.
If you plan to setup a division of your company in Brazil, then the total tax rate for medium-size businesses, according to a World Bank report, is 69.3% of profits, up 2.2% since 2012. This is a significant difference from the OECD high-income average of 42.7%.; the rate is also higher than the US, with 46.7%, France – 65.7% or Japan with 50%. Tax regulations are the same for foreign and domestic firms.
Data compiled October 2013. Updated yearly
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