FrontierView recently hosted a group of Brazil General Managers from the leading pharmaceutical, medical devices and diagnostics multinationals to discuss Brazil’s macroeconomic and healthcare outlook for 2023. The discussion centered around the political landscape of President Lula’s first year in office, the impact of larger SUS budgets and the ongoing trend of consolidation and vertical integration in the private sector.

When compared to business sentiment from other industries, as captured in our All-Industries Brazil Executive Roundtable, healthcare companies in Brazil are broadly more optimistic about 2023 performance, and most executives feel confident about hitting commercial and financial targets, despite a slowdown in the Brazilian economy. Nevertheless, three policy changes are keeping executives on high alert: tax reform, changes to the fiscal anchor, and the Health Ministry’s push for localization.

Capturing opportunities while shielding from risks:

  • In the public sector, larger SUS budgets and targeted initiatives aimed at reducing waitlists are the two key areas of opportunities.
    • Although a larger healthcare budget is a positive advancement by the new administration, there is no consensus on whether this increase in spending is sustainable, and for how long. 
    • A third of executives polled believe the government will face pressure to lower spending already in 2023, while the remaining believe that the 2023 budget is sustainable, but pressure to rein in spending will be felt in 2024.
  • In the private system, one key trend for 2023 was clear: most payers will be looking to enter vertical-integration agreements with providers, either via traditional M&A or joint-ventures, in an effort to better control costs utilizing managed care techniques.
    • Payer’s willingness to finance hospital infrastructure comes at an opportune time, when top provider groups are having to slow inorganic growth ambitions and focus on integration of recently acquired units.
    • Most executives believe that over the next 3-5 years, Brazil’s provider space will see a resumption in M&A, but this time combined with significant co-investments (joint-ventures) with payers for organic expansion of infrastructure.

FrontierView solutions:

  • By utilizing FrontierView’s monitoring of Lula’s evolving healthcare policies, firms can stay up to date on shifting government priorities and develop medium and long-term scenarios for performance across their public sector portfolio.
  • Firms can track FrontierView’s benchmarking of industry leaders’ expectations for opportunities in the public and private sectors to pressure-test their internal assumptions for 2023 growth.
  • FrontierView’s Premium Healthcare Datasets (PHD) provide therapy-specific beneficiary and procedure data across the public and private sectors (gathered from DataSUS and ANS), which companies can use to assess market size and plan new product launches.
  • FrontierView clients can also request personalized briefings with the research experts to receive the latest view on the Brazilian market and obtain answers to pressing policy questions.

Related content:

Download an executive summary of the key highlights discussed during our Brazil Healthcare Executive Roundtable

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