February 9, 2023 • 32 mins
Ernesto has 27 years of experience leading healthcare strategies to drive access and expansion for new products, developing value propositions for public and private stakeholders, and assessing global market opportunities for healthcare companies. He has worked for both government agencies and global healthcare companies in roles ranging from strategic marketing and new product development to health economics and reimbursement. Also, Ernesto led several Market Access projects across the US, Europe, Latin America, and the Middle East; Ernesto is the CEO and Founder of ValueConnected.
Ernesto also coordinates the ValueConnected team in applying Artificial Intelligence (AI) and Data Science to address significant unmet needs in healthcare, accelerating the adoption rate of medical technologies that can generate value for patients, payers, and providers. He holds an MBA from the University of Texas at Austin, US, and a Bachelor’s degree in Business Administration from Fundação Armando Ávares Penteado(FAAP), in São Paulo, Brazil.
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Episode Transcript
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Speaker 1 (00:00):
Welcome to the Latin MedTech Leaders Podcast, a
conversation with MedTechleaders who have succeeded or
plan to succeed in LatinAmerica.
Please subscribe on yourfavorite podcasting platform.
Apple Podcast, Spotify, GooglePodcast.
Amazon Music is teacher tuningiHeartRadio, Pandora, or these
are Welcome to the Latin MedTechLeaders podcast, a conversation
(00:24):
with leaders who have succeededor plan to succeed in Latin
America today.
Our guest is Ernesto NoDa, c eo, and founder of Value
Connected.
Ernesto has 27 years ofexperience leading healthcare
strategies to dive access andexpansion for new products,
developing value propositionsfor both public and private
(00:46):
stakeholders, and assessingglobal market opportunities for
healthcare companies.
So, Ernesto is a pleasure tohave you here in the show.
Welcome.
Speaker 2 (00:54):
Thank you very much, uh, Julio, for inviting me.
It's a pleasure to be here aswell.
Speaker 1 (00:59):
Excellent, Ernesto.
So let's get started, uh,talking about your journey.
How is it that you got where youare today,?
Speaker 2 (01:07):
?
Well, I started selling medicaldevices in 1997, and I was a
rememberable selling what wewould consider a techn
technological update in thatmoment in which was, uh, sutures
in which the threads wereconnected to the needles, so the
surgeons will not needle surgeonsystems will not need to insert
(01:27):
the thread into the needle andstart suturing.
So they came connected, and thatwas a fantastic innovation at
that moment.
And after selling that and other, uh, innovations, which we
would call, um, in that period,I started to have some pushbacks
from, uh, doctors.
They were telling me, Ernesto,why is this new technology more
(01:49):
expensive?
Why should we pay for that?
And then I would describe thefeatures, the technical aspects
of the technologies, andbasically they would say, yeah,
we are convinced, but we are notthe ones, uh, signing the check
and somebody else, uh, needs todo that.
And you need to talk topurchasing departments or in
certain circumstances, payers,private and public.
(02:12):
And then when I was started, uh,and I remember to this day, my
first, uh, meeting with, uh,purchasing department at a
hospital, I was not preparedthat you talk to purchasing
departments.
And I did, uh, a strategy that Ilearned that moment that makes
you, you, you look smarter.
I just took a, a, a notepad andgrab it all together with me,
(02:35):
and I entered the room of thepurchasing department with a
notepad than a pen on my hands,because this makes you feel,
makes you look more intelligentbecause intelligence, because
intelligence, because I had noidea what to ask.
And then the purchasingdepartment to the purchasing
manager told me, Ernesto, youare the first person from a
medical technology companycoming to talk to me, and I am
(02:58):
the bad guy, and I have to judgeproducts every day, which I
don't know what they do.
I, they, I don't know why theyshould be used for.
And the only metric that I haveis the price.
And I mean, if something causes100 and another causes 50, I am
gonna select the 50 becausenobody's telling me why the 100
(03:18):
is sufficient.
And that's the moment that Ishift my career to market
access.
And because I, I came fromhealth economics and marketing,
I always look as healtheconomics as marketing and
reimbursement as sales.
The only difference is thatinstead of being marketing sales
to physicians, clinicaldecisionmakers, it's marketing
(03:40):
and sales, health, economics,reimbursement to economic
decision makers for chasers,payers.
And then I started moving thiscareer, and of course I could
see how intertwined they were.
And I then I, uh, I wanted tohave years, uh, later my MBA in
the University of Texas atAustin, United States, working
(04:01):
there as well, came back toLatin Americas, I'm from Brazil.
And then eventually I receivedan offer to come to Europe.
And in Europe, because you havesuch a strong public healthcare
system, 95, 90 7% of thehealthcare expenditure in
Europe, it comes from publicpayers.
Then I realized the importanceeven more of market access.
(04:22):
And in 2013, I started my owncompany Value Connected, which
now has 38 associates in 36countries.
And we have an office in Brazil.
I'm currently in Sao Paulo rightnow in Brazil.
And that's basically doingexactly, uh, what I, uh,
perceived as a major challengein my career.
So value connected, uh, and theword value and connected, they
(04:46):
mean let's connect value to bothsales and market access
approaches, because the marketin general will not be convinced
only by technical features.
And that's basically an overviewabout my career.
Speaker 1 (05:01):
.
Fantastic.
Uh, that's a great story here,Ernesto.
I loved it.
Alright, so let's talk abouttrends.
Ernesto.
What do you see happening in theworld in Latin America from the
economic, political, socialstandpoint that is relevant to
our discussion today?
How is it that, that what'shappening that is making Latin
America more attractive, uh, forcompanies to, to enter the
(05:21):
market?
Speaker 2 (05:22):
Right.
What is interesting to, tomention, I'm gonna focus my, my
pointing in Latin America, nowwe can discuss other markets
mm-hmm.
later.
But what is very important isthat before the Covid pandemic,
so that means 2018, 2019, we sawan increasing interest from
(05:43):
external companies to enter theLatin American market.
And in many circumstances, theysaw the opportunity for growth,
but they were hitting, uh, theceiling of a reimbursement or
hitting the ceiling of marketaccess.
So there was some discussionsalready thinking maybe we have
already medical societies on ourside.
(06:04):
We have doctors, nurses on ourside.
Why are we not progressing?
And we saw a lot of interest tounderstand the dynamics of a
payment mechanisms, how, uh, themarkets evolve.
And I can talk more detailsabout certain countries there.
But then the, the pandemic cameand the interest for Latin
(06:25):
America did not, uh, change.
But the healthcare system inLatin America changed.
We have, um, in Latin America,that's most, uh, um, it's more,
uh, is even stronger.
In Brazil, we have a verysignificant presence of a
private healthcare.
And what happens is that inprivate healthcare, the dynamics
(06:48):
are a little bit different thanin public, because in public, of
course, you have a public systemthat tries to provide the best
possible for everyone.
So if I'm providing an expensivetest here, I won't have, uh,
money to provide something elsethere.
And there is always this, um,discussion for private, if you
(07:09):
are paying, um, then means youare covered.
And basically that population ispaying for its, uh, its own
healthcare service.
So in that sense, what we haveseen in Latin America is a
strong trend towardsdigitalization, telemedicine,
not necessarily going intoartificial intelligence, into
(07:31):
algorithms that can predict this.
We don't, we see some intereston that, but a strong interest
for remote consultation, um, andtelemedicine, and this is
happening a lot because the, the, the healthcare systems,
especially private, theyrealized it's much cheaper and
more efficient to see or, or, orto diagnose or, or follow up
(07:55):
patients like that.
And even specific systems of theway that the prescriptions are
designed, the way thatconsultations are designed, they
are all, um, with QR codesnowadays.
So there has been an increasinginterest on that.
Now, the other trend that Iwanted to, to come, uh, and the
(08:15):
last important change, uh,trend, and of course there are
others, is the need to takepatients out of the hospital
because of course the, thehospital capacity is
significantly affected bycoronavirus.
We, you have, we have seen inArgentina, Mexico, Colombia,
Chile, Brazil, even the academicinstitutions telling students
(08:38):
the, the, the medicine, theschool of medicine students to
come back home to study fromhome because they need to use
that capacity to treat thosepatients.
And of course, thank God,hopefully, um, the demand for,
for healthcare to, tocoronavirus has been decreasing
because of the vaccination,because of many other aspects.
But in 2020, it was like that, Ihad many friends who were in
(09:03):
medical school and I would callthem, and they were at home and
they were studying at home.
So the, the huge capacity wasdedicated to, um, ventilation,
intubation to treating thesepatients.
So a lot of, uh, the demand hasto be held up and has to be, uh,
uh, managed at, managed at home.
(09:24):
So a lot of a patient monitoringa lot of, uh, mechanisms to
avoid an extensive length ofstay due to patient
deterioration, infection, theystarted to become more important
in Latin America.
So in that sense, to summarize,um, that has been a stronger
interest, stronger demand forhealthcare in Latin America.
(09:45):
And that demand has not, uh, uh,decreased at all during the
pandemic.
It has changed it to things tokeep patients as short as
possible in the hospital and or,and or to remove them to the
hospital to go to ambulatory orto home care.
Speaker 1 (10:01):
Yes.
Yes.
Uh, I, I keep hearing somethingthat says the cell phone or the
small phone is a new clinic,right?
Yes.
Everything will be done on thecell phone nowadays.
And I was, uh, patient my cell acouple weeks ago, had an eye
infection, and I, for my firsttime, I had a telemedicine
consultation.
I saw the doctor via video call.
(10:24):
So it was a, a great experience.
And he prescribed something tothe pharmacy.
I went to the pharmacy, pickedit up, and that was it.
So simple.
Didn't have move around the city, search for parking, any of
that stuff was a quick thing.
Speaker 2 (10:38):
So absolutely.
And all these technologies, theyhad been around for many, many
years.
Yeah.
And of course, it took Afor, ittook an unfortunate case of, uh,
uh, COVID.
But if we look from the positiveside, if we make an effort
looking from the positive side,the healthcare systems in the
world, they developed a lot dueto the, uh, pandemic.
(10:59):
And unfortunately, it's, it'snecessary to have this kind of
circumstances to get at such alevel of development.
Speaker 1 (11:05):
Yes, I agree.
All right.
So let's talk about, uh, whatyou're doing today at Value
Connected.
Uh, can we talk about company,the work that you guys do?
What's the profile of yourclients?
Are you involved in any excitingprojects today?
So please elaborate
Speaker 2 (11:20):
On that.
Yes, absolutely.
Now, we are involving, involvedin, in many, many exciting, uh,
projects.
I am passionate about, uh, AIand, um, and digital, uh,
healthcare myself.
So that's something that reallygets my attention a lot.
And, but if looking to what weare doing right now, what the
basic, what we do is toaccelerate access of patients
(11:42):
and providers to the medicaltechnologies they need.
So what do, the typical problemthat we see is that medical
companies, uh, launchingproducts in the market, which
are products that they trulybring benefits to patients, but
the, the medical companies don'tknow how to translate those
benefits to the decision makers.
(12:03):
What is important to understand,of course, we focus, um, uh,
mostly in medical technologiesand digital health, but we also
work with pharmaceuticals.
But if you look into digitalhealth and medical technologies,
uh, that's the second mostinnovative industry in the
world.
That means every 35 minutes,that is a new patent for a medic
(12:26):
on average, a new patent for amedical technology in, uh,
registered.
So when you, when medicalcompanies come to hospitals, to
providers and say, here, deardoctor, dear nurse, dear
committee, we have this newexciting product here that does
this and that it has a lot ofbenefits, a lot of research, a
(12:47):
lot of efforts, a lot ofinvestments put on that product.
But the first reaction from thehealthcare provider and payer is
to think, oh my God, an upfrontcost, another cost.
And especially in Latin America,when we have, uh, a, a more
delicate situation in terms ofecon economy, especially related
to certain markets and certainsegments, the breaks are always
(13:10):
on.
There is always some kind of abarrier to say, wait, let's
evaluate this technology better.
And especially in Latin America,if you cannot demonstrate that
you save costs, it is going tobe very hard.
You may have very high levelevidence, but if you are
increasing costs, then it's notimpossible.
With that happens all the time,but it's going to, you need that
(13:33):
to make this kind of aargumentation.
So we help our patients,patients, our clients, to
identify how can we translatethe benefits of the products to
value.
And value means why should I payfor your product?
Why is it something that weshould use and we should pay
(13:54):
for?
And an example of this was in2000 and, um, and 18.
And that's a very special, uh,project to my, uh, to me come to
my heart.
And I will explain why in 2018we were, were working with, uh,
this, uh, this large company.
Usually we work with largecompanies, we, but we also work
with, uh, startups as well.
But we were working with thislarge companies that was trying
(14:18):
to obt obtain an inclusion of,um, um, home care mechanical
ventilation in the nationalhealthcare system of Brazil.
So it's a national health systemwith a 212 million people to
include something, the nationalcoverage, it's complicated.
And we made our analysis, and ifwe would tell the healthcare
(14:39):
system in Brazil to pay for thatdevice, for the, the, for
ventilation at home, not only athospital, but at home, this
would increase costs.
And this kind of obvious,because then you have the
ventilators at the hospitals,which are already being used,
but then you have to pay forventilation at home.
But that, and that's the firstreaction when you think about
(15:02):
price.
But then we start our work,which is shifting from price to
cost and from cost to value.
So let's take these two stepsfrom price to cost.
It's not only about the price ofthe ventilation, but the cost of
the treatment.
A patient at home is, I wouldsay, represents 25, 30% of the
(15:25):
cost of a, of the same patientin the hospital.
So when you start putting these,uh, costs, they tend to balance
them off.
Not that you mention patientswith mechanical ventilation that
needed to go to the hospital,they are usually feeling very
bad.
So they did, they require a lotof attention.
So we made these scenarios tothe Brazilian healthcare system,
(15:47):
say, listen, this is the cost ofthe ventilation, but actually
let's consider the other coursesthat are related.
And we doubt getting into muchdetails.
We developed eight scenarios topresent to the Brazilian
government.
So we, we moved to from price tocost, and then to cost to value.
The national healthcare systemof Brazil has a chronic over
(16:07):
demand.
It's always, um, uh, more,there's a always a line of a
patient demanding access tohealthcare.
And these patients, when theydon't get treated, most of them
will deteriorate.
And, uh, not that to mention theworst possible scenario, which
is, uh, unfortunately thepatient, uh, come into death,
(16:28):
but there's also the patientgetting more expensive to treat.
So what we showed to theBrazilian government was the
value of, uh, uh, treating thesepatients at home.
And although it would beslightly more expensive because
it would be that capacity inthe, in the, in the public
hospitals would be released toother patients.
(16:49):
So we present there and was wasa very magical moment for me
because, uh, I got to talk to alot of patients and we got to,
to, um, because we need to dothis to understand the patient
experience.
And we had the patients thatwere living in public hospitals
for 2, 3, 5 years, they werethere because they could not be
(17:14):
discharged.
And by the moment, um, theywould have a me mechanical
ventilation at home reimbursed.
They could come back to theirfamilies with, uh, in a, in an
environment which has a muchlower, uh, propensity for
infection.
So, uh, fortunately we, this wasa project that they started in
2018 and we succeeded.
And the Brazilian governmenteventually, uh, included home
(17:38):
care ventilation in the nationalco um, wow.
Coverage plan.
Nice.
That's super nice.
And of course, nobody expectedthat.
And then coronavirus came andheat and we, uh, we feel very
happy.
And this is one example of theprojects that we do, that I, I
feel extremely happy and my, myteam feel extremely happy that
if we could save at least onepatient yeah, that could receive
(18:01):
mechanical ventilation at homeand not at the hospital,
especially during coronavirus,then this project was more than
than worth it.
So that's the kind of a projectsthat we do.
And again, um, governments,payers, they have so many
technologies to look at healthpolicies, so many things.
It's important to do this workfrom price to cost, from cost to
(18:24):
value, and act more as a partnerto these healthcare stakeholders
instead of a, a supplier or amanufacturer of a medical
products.
Speaker 1 (18:34):
Okay.
Alright.
So the question that I have nowis about how can a new
technology get inserted into thehealthcare system in a country,
specifically Brazil?
Let's, is there a framework?
Is it a step-by-step process,process that ha that a company
has to go through?
Could you please guide usthrough the process?
Because I'm sure listeners wannaknow how they can get
(18:57):
reimbursement for theirtechnologies, right?
Speaker 2 (18:59):
Absolutely.
We can talk about, uh, othercountries as well as well.
But let's focus on Brazil and Iwill make some parallels.
Um, yes to, to Latin America ingeneral.
So first of all, the first,let's start with good news.
Uh, Latin America is very, thelatinamerican in general is very
open to international evidence.
So for example, if you have astudy that was developed in
(19:23):
overseas and another country,but it's a a, a study that has a
good methodological approach,um, uh, does not need to be
fantastic, but it, it has a gooddescription of outcomes, it will
be accepted, it will bereviewed.
Unfortunately, uh, uh, registrydata is not so well accepted in
(19:45):
Latin America.
Uh, and we have registry dataswith, uh, data databases, excuse
me, with thousands of patients,sometimes with dozens of
thousands of patients, but theyare not so well accepted.
So have international data, um,uh, especially if it's, uh,
randomized and prospectivethat's extremely well accepted.
(20:05):
So that's the first thing.
And of course, case, local casestudies talking about Brazil,
for all the countries in LatinAmerica, Hulu, Brazil is the
country that has the strongestseparation between private and
public healthcare.
All other markets in the mainmarkets, Colombia, Mexico, Chile
, uh, Argentina, that is a kindof, uh, uh, overlapping and a
(20:30):
strong overlapping in Brazil.
There is a certain overlapping,but there is a strong
differentiation the way thatmedical products are assessed
and evaluated.
So to come into this, um,Brazil, the public healthcare of
Brazil has one of the mostcomplete, um, healthcare
information databases in theworld.
(20:51):
Really say what is exactly, Iknow it's, uh, in many
circumstances it could bebetter, but the level of
information you cannot obtain inthe healthcare system of Brazil
data source is second to none.
Um, uh, I would say even, evento to Germany.
Having said that, this what howpolicies are designed, if people
(21:13):
are using this information,that's another story.
But what I'm saying is that inthe public healthcare system of
Brazil, which covers every wholeresidents in Brazil, that is a
formal process, a formal healthtechnology assessment process.
Oh, there is a process readyplace, okay?
Mm-hmm.
exactly.
So that you can submit yourtechnology and any institutional
(21:35):
person in Brazil can submit.
Of course, if, uh, if a medicalsociety submits a patient
association or a doctor willhave more influence, a more, a
stronger weight, then of courseif the company itself submits,
but there's no problem for thecompany self submits.
Yeah.
Okay.
And they evaluate the, thetechnologies and the cortech is
(21:57):
extremely well organized.
They usually took six months toevaluate a medical technology.
As soon as the coronavirus, uh,heat, they publish the website,
we will continue to reviewtechnology, but our timelines
are flexible.
We just, uh, submitted somethingto, to contact and they
responded in six months.
So, uh, it did not affect veryquestion predictable.
(22:20):
Yeah.
Very, very predictable.
The process itself, and theprocess is that, and this is
specifically now during this,this time because there were
other meetings, but everybody'sis, uh, uh, hesitant to have
face-to-face.
How does it work?
You submit your technology orprocedure for evaluation in the,
for the contech, uh, rememberit's not a product.
(22:41):
You have to submit a procedureprocedure.
So you have a device that can beused in different procedures.
You'll have to make differentapplications.
The Contech will receive thatand they will inform if there is
something missing like a form orstuff like this.
Once this is complete, processesstarts and they will perform an
internal evaluation and theywill have an internal meeting.
(23:01):
And all the meetings for Contech, they are recorded and made
available over YouTube, maybemaybe other platforms as well.
But I always access YouTube andthey will discuss and they will
come to what is called apreliminary conclusion.
By the moment they reach apreliminary conclusion, which
could be, yes, we think thisshould be included in the sus,
(23:22):
or SUS is the national publichealthcare system, or no, we
should, uh, not included.
Then they, uh, made a public,they start of a public
consultation that they say,listen, we are open to receive
comments from the society, andthey are looking specifically
for additional evidence.
The main goal of contact is toassess evidence.
So they open this publicconsultation, which usually
(23:44):
lasts between 20 and 30 days.
And after the publicconsultation, they will call the
applicant the person who, orinstitution who made the
application.
And they will listen to theapplicant in a second meeting
and they will listen.
They will, they ask questions bythe moment that meeting ends.
The second that meeting ends,the pplicant leaves, and this is
(24:05):
online, pplicant leaves, and theecotech starts reviewing the
public consultations and theyreach a final conclusion.
Okay.
Which will be published, um, inthe, uh, um, in the report.
The website.
Yeah, in the website.
Once this conclusion is made, ofcourse, if it's negative,
nothing changes.
If it is positive, the tech hasthe road to device, the Ministry
(24:27):
of Health of Brazil, but theContech does not have the road
to decide which funds should beused for what.
So even in our case, when we gotmechanical ventilation, we got
approval from Contech, but ittook six months.
And that's completely normalfrom the Ministry of Health to
say, okay, we're gonna fund thistechnology, but let's allocate
the money from here from there.
And that's a complex decisionwhich happens internally.
(24:50):
So overall from the Appliccomplete application to a
decision for QuTech six monthsand another six months to have
an inclusion in the publichealthcare system.
But that, uh, once again, theapplications to Antech can be
made at 24 7 anytime you want.
Okay.
I'll move into private.
Now.
(25:12):
Private healthcare, uh, we havethe, a national private agency
in Brazil, uh, in Portuguese,it's a n s.
And what they do is that inprivate healthcare there is a
national list of coverage, butas opposed to public healthcare,
the national list of coveragein, in, um, Brazil private does
(25:36):
not define a tariff, does notdefine a payment in the public
healthcare in Brazil, that is anational payment, that is a
national tariff.
There's a code.
There may be some exactly cold,there may be some adjustments
based, oh, I am an academichospital.
I'm a hospital in a, you know,that needs more funds.
Absolutely.
There's a incrementaladjustment.
(25:56):
Minimal for private iscompletely different.
So for example, you may uh, addinto public coronary artery
bypass graft at 10,000.
Hes in private, it will becoronary artery bypass graft.
And that's a, and there are twocodes in private healthcare, I
mean two code systems inprivate.
(26:18):
That is the payment for theprocedure itself, which will be
decided once it is in themandatory list.
It will be negotiated betweenthe provider, which could be a
hospital, a clinical laboratory.
It'll be decided between theprovider and the payer.
Each private payer.
And there is another, uh,payment, which is the physician
fee.
(26:38):
And that there are manyphysician fees in the same
procedure.
For example, surgical procedurethat are physician fees for
opening the patient, for theanesthesiologist, for making the
procedure.
All the procedures that arethere and these physician fees,
they are ranked according to acertain grade, which starts with
one A, which is the lowestgrade, and then one way, one A,
(26:59):
one B, one C to way to b B2Cuntil 14 C.
And each private payer will say,I will, I pay one a one
hundreds.
The other will say, oh, I payone a two hundreds.
And they will decide how muchwill be there.
So what is important private,uh, uh, healthcare, uh, that is
in comparison to public, that ismuch less availability of data.
(27:24):
Data is fragmented.
There are five types of privateplans have private health plans
in Brazil.
And basically they will followwhat is in the mandatory list
and they will decide, negotiatehow much that tariff will be.
And that's the moment that'sthis negotiation part that many
companies in Brazil don't followup.
(27:46):
And it's, uh, out of pocketpayments in Brazil happens very
frequently, especially in in SaoPaul and Rio, the largest
cities.
But altogether, it represents inthe best case scenario, best
case scenario, 5% of the market.
We are talking about this.
For example, if you take roboticsurgery, the, the out-of-pocket
(28:07):
payment represents less than 1%of the total demand of the
market.
So in the best case, we'retalking about 5%.
And the problem is that manycompanies, they turn on their
conditioner, they stay relaxed,and they stop there.
Let's go into our out of pocket.
And then that is the opportunityto expand that usage applying to
the a n s to the nationalcoverage.
(28:28):
And there are of course in,there's a lot of flexibility.
There is possibility also, andthat's the last point to say,
um, potential to make individualagreements with health plans.
And there are those health plansthat own their own providers,
their own, their own hospitalsand labs.
Others that are more likeinsurance companies.
They are financial institutionsthat pay for coverage and they
(28:50):
will perceive value differently.
If you come to insurancecompanies, say we reduce the
length of state insurancecompany will not, will not react
the same way as if you tell themwe reduce costs.
But if you come to a, a healthplan, which is in Brazil is
called group medicine, that hasa possibility to have these
providers and you say, listen,we will reduce the life of state
(29:12):
.
They will say, wait, wait, youare reducing the cost of my
provider that belongs to thesame group.
So it's important, uh, in themaking a summary in the public
healthcare system, that is onepathway.
Uh, it's uh, it's a, a verydefined pathway, harder to
accomplish of course, but ofcourse that's why it's important
that we do the proper work.
But in private, that is a lot offlexibility.
(29:35):
There's a lot of possibilitiesthat you can take.
Speaker 1 (29:38):
Wow.
It looks like we can, we canhave like five different
episodes just to talk about this because we're, we're
just starting to, to scratch thesurface of Brazil.
Imagine Mexico, Columbia,Argentina.
I mean, this is fascinating.
So, um, we're close to the endof the show and, and, um, I have
many more questions, but, uh,we're running out of time.
(29:58):
, we may, we may doanother episode.
I mean, that's, that's somethingwe can do, uh, uh, certainly.
So Ernest, Ernesto, the lastquestion I have for you is, what
will be your words, your finalwords of wisdom?
What would you say to the CEO ofa medical technology company
from the United States or Europewho is just starting to explore
Latin America as a place to dobusiness?
(30:20):
He wants to start in the region,he wants to serve individual.
What would be your first tip ortwo or three tips, uh, to him or
her?
Speaker 2 (30:28):
Absolutely.
So, uh, for somebody wanting toenter in to enter the Latin
America market, it could besomebody overseas or could be
even a, a local company willingto expand more.
What is important to understandis that try to involve as early
as possible in your strategicplanning.
The perspective of payers don'trely only on key opinion
(30:50):
leaders.
They are not important.
They are essential.
You, you won't achieve a successif you don't have opinion
leaders in the ground period.
Absolutely.
But they are not the only onestaking the decision.
So it's very expensive to make ahuge connection with doctors
that why start may start usingthe product, getting paid out of
a pocket and then try to expandfrom there and then realize you
(31:13):
did not have the, the properevidence upfront and you could
have spent the time beforecollecting that evidence.
So even if, if you are launchinga product in Latin America and
you are going to through, gothrough the regulatory stages,
sometimes changing two, threethings in your study protocol
(31:34):
will make a regulatory studyapplicable to a reimbursement
decision.
It's not a rocket science tomake this, this, this leap, this
jump is not even a leap thisjump.
And if you are already, uh,register your product's already
registered and so it means youare running against time, then
try to involve payers as earlyas possible and as early as
(31:55):
possible means do it now.
If you have done so, do it now.
Talk to them.
Understand what type of evidenceare they requesting?
What do they define as a metricof success?
How would they evaluate theproduct?
Because at the end of the day,and that phrase explains the
ravine value is a perception, isnot what you as a medical
(32:17):
company would think your producthas value, but how the decision
makers, the local decisionmakers perceive the product that
you're bringing.
But that's basically the, thefinal words that I have.
Speaker 1 (32:27):
.
Alright, Ernesto, thank you somuch.
I, I think, uh, listeners arelearning so much from your
wisdom and your experience inLatin America.
And as I said, we shouldprobably plan for another
podcast episode, uh, to talkabout my pleasure countries.
But um, thank you so much forbeing a guest in our show.
I look forward to being in touchand uh, it was a delightful
(32:48):
conversation.
As you usual
Speaker 2 (32:50):
.
My pleasure.
Thank you so much for theopportunity.
Have a great day everyone.
Thanks Julia.
Bye bye-Bye.
Welcome to the Latin MedTech Leaders Podcast, a
conversation with MedTechleaders who have succeeded or
plan to succeed in LatinAmerica.
Please subscribe on yourfavorite podcasting platform.
Apple Podcast, Spotify, GooglePodcast.
Amazon Music is teacher tuningiHeartRadio, Pandora, or these
are Welcome to the Latin MedTechLeaders podcast, a conversation
(00:24):
with leaders who have succeededor plan to succeed in Latin
America today.
Our guest is Ernesto NoDa, c eo, and founder of Value
Connected.
Ernesto has 27 years ofexperience leading healthcare
strategies to dive access andexpansion for new products,
developing value propositionsfor both public and private
(00:46):
stakeholders, and assessingglobal market opportunities for
healthcare companies.
So, Ernesto is a pleasure tohave you here in the show.
Welcome.
Speaker 2 (00:54):
Thank you very much, uh, Julio, for inviting me.
It's a pleasure to be here aswell.
Speaker 1 (00:59):
Excellent, Ernesto.
So let's get started, uh,talking about your journey.
How is it that you got where youare today,
Speaker 2 (01:07):
Well, I started selling medicaldevices in 1997, and I was a
rememberable selling what wewould consider a techn
technological update in thatmoment in which was, uh, sutures
in which the threads wereconnected to the needles, so the
surgeons will not needle surgeonsystems will not need to insert
(01:27):
the thread into the needle andstart suturing.
So they came connected, and thatwas a fantastic innovation at
that moment.
And after selling that and other, uh, innovations, which we
would call, um, in that period,I started to have some pushbacks
from, uh, doctors.
They were telling me, Ernesto,why is this new technology more
(01:49):
expensive?
Why should we pay for that?
And then I would describe thefeatures, the technical aspects
of the technologies, andbasically they would say, yeah,
we are convinced, but we are notthe ones, uh, signing the check
and somebody else, uh, needs todo that.
And you need to talk topurchasing departments or in
certain circumstances, payers,private and public.
(02:12):
And then when I was started, uh,and I remember to this day, my
first, uh, meeting with, uh,purchasing department at a
hospital, I was not preparedthat you talk to purchasing
departments.
And I did, uh, a strategy that Ilearned that moment that makes
you, you, you look smarter.
I just took a, a, a notepad andgrab it all together with me,
(02:35):
and I entered the room of thepurchasing department with a
notepad than a pen on my hands,because this makes you feel,
makes you look more intelligentbecause intelligence, because
intelligence, because I had noidea what to ask.
And then the purchasingdepartment to the purchasing
manager told me, Ernesto, youare the first person from a
medical technology companycoming to talk to me, and I am
(02:58):
the bad guy, and I have to judgeproducts every day, which I
don't know what they do.
I, they, I don't know why theyshould be used for.
And the only metric that I haveis the price.
And I mean, if something causes100 and another causes 50, I am
gonna select the 50 becausenobody's telling me why the 100
(03:18):
is sufficient.
And that's the moment that Ishift my career to market
access.
And because I, I came fromhealth economics and marketing,
I always look as healtheconomics as marketing and
reimbursement as sales.
The only difference is thatinstead of being marketing sales
to physicians, clinicaldecisionmakers, it's marketing
(03:40):
and sales, health, economics,reimbursement to economic
decision makers for chasers,payers.
And then I started moving thiscareer, and of course I could
see how intertwined they were.
And I then I, uh, I wanted tohave years, uh, later my MBA in
the University of Texas atAustin, United States, working
(04:01):
there as well, came back toLatin Americas, I'm from Brazil.
And then eventually I receivedan offer to come to Europe.
And in Europe, because you havesuch a strong public healthcare
system, 95, 90 7% of thehealthcare expenditure in
Europe, it comes from publicpayers.
Then I realized the importanceeven more of market access.
(04:22):
And in 2013, I started my owncompany Value Connected, which
now has 38 associates in 36countries.
And we have an office in Brazil.
I'm currently in Sao Paulo rightnow in Brazil.
And that's basically doingexactly, uh, what I, uh,
perceived as a major challengein my career.
So value connected, uh, and theword value and connected, they
(04:46):
mean let's connect value to bothsales and market access
approaches, because the marketin general will not be convinced
only by technical features.
And that's basically an overviewabout my career.
Speaker 1 (05:01):
Fantastic.
Uh, that's a great story here,Ernesto.
I loved it.
Alright, so let's talk abouttrends.
Ernesto.
What do you see happening in theworld in Latin America from the
economic, political, socialstandpoint that is relevant to
our discussion today?
How is it that, that what'shappening that is making Latin
America more attractive, uh, forcompanies to, to enter the
(05:21):
market?
Speaker 2 (05:22):
Right.
What is interesting to, tomention, I'm gonna focus my, my
pointing in Latin America, nowwe can discuss other markets
mm-hmm.
But what is very important isthat before the Covid pandemic,
so that means 2018, 2019, we sawan increasing interest from
(05:43):
external companies to enter theLatin American market.
And in many circumstances, theysaw the opportunity for growth,
but they were hitting, uh, theceiling of a reimbursement or
hitting the ceiling of marketaccess.
So there was some discussionsalready thinking maybe we have
already medical societies on ourside.
(06:04):
We have doctors, nurses on ourside.
Why are we not progressing?
And we saw a lot of interest tounderstand the dynamics of a
payment mechanisms, how, uh, themarkets evolve.
And I can talk more detailsabout certain countries there.
But then the, the pandemic cameand the interest for Latin
(06:25):
America did not, uh, change.
But the healthcare system inLatin America changed.
We have, um, in Latin America,that's most, uh, um, it's more,
uh, is even stronger.
In Brazil, we have a verysignificant presence of a
private healthcare.
And what happens is that inprivate healthcare, the dynamics
(06:48):
are a little bit different thanin public, because in public, of
course, you have a public systemthat tries to provide the best
possible for everyone.
So if I'm providing an expensivetest here, I won't have, uh,
money to provide something elsethere.
And there is always this, um,discussion for private, if you
(07:09):
are paying, um, then means youare covered.
And basically that population ispaying for its, uh, its own
healthcare service.
So in that sense, what we haveseen in Latin America is a
strong trend towardsdigitalization, telemedicine,
not necessarily going intoartificial intelligence, into
(07:31):
algorithms that can predict this.
We don't, we see some intereston that, but a strong interest
for remote consultation, um, andtelemedicine, and this is
happening a lot because the, the, the healthcare systems,
especially private, theyrealized it's much cheaper and
more efficient to see or, or, orto diagnose or, or follow up
(07:55):
patients like that.
And even specific systems of theway that the prescriptions are
designed, the way thatconsultations are designed, they
are all, um, with QR codesnowadays.
So there has been an increasinginterest on that.
Now, the other trend that Iwanted to, to come, uh, and the
(08:15):
last important change, uh,trend, and of course there are
others, is the need to takepatients out of the hospital
because of course the, thehospital capacity is
significantly affected bycoronavirus.
We, you have, we have seen inArgentina, Mexico, Colombia,
Chile, Brazil, even the academicinstitutions telling students
(08:38):
the, the, the medicine, theschool of medicine students to
come back home to study fromhome because they need to use
that capacity to treat thosepatients.
And of course, thank God,hopefully, um, the demand for,
for healthcare to, tocoronavirus has been decreasing
because of the vaccination,because of many other aspects.
But in 2020, it was like that, Ihad many friends who were in
(09:03):
medical school and I would callthem, and they were at home and
they were studying at home.
So the, the huge capacity wasdedicated to, um, ventilation,
intubation to treating thesepatients.
So a lot of, uh, the demand hasto be held up and has to be, uh,
uh, managed at, managed at home.
(09:24):
So a lot of a patient monitoringa lot of, uh, mechanisms to
avoid an extensive length ofstay due to patient
deterioration, infection, theystarted to become more important
in Latin America.
So in that sense, to summarize,um, that has been a stronger
interest, stronger demand forhealthcare in Latin America.
(09:45):
And that demand has not, uh, uh,decreased at all during the
pandemic.
It has changed it to things tokeep patients as short as
possible in the hospital and or,and or to remove them to the
hospital to go to ambulatory orto home care.
Speaker 1 (10:01):
Yes.
Yes.
Uh, I, I keep hearing somethingthat says the cell phone or the
small phone is a new clinic,right?
Yes.
Everything will be done on thecell phone nowadays.
And I was, uh, patient my cell acouple weeks ago, had an eye
infection, and I, for my firsttime, I had a telemedicine
consultation.
I saw the doctor via video call.
(10:24):
So it was a, a great experience.
And he prescribed something tothe pharmacy.
I went to the pharmacy, pickedit up, and that was it.
So simple.
Didn't have move around the city, search for parking, any of
that stuff was a quick thing.
Speaker 2 (10:38):
So absolutely.
And all these technologies, theyhad been around for many, many
years.
Yeah.
And of course, it took Afor, ittook an unfortunate case of, uh,
uh, COVID.
But if we look from the positiveside, if we make an effort
looking from the positive side,the healthcare systems in the
world, they developed a lot dueto the, uh, pandemic.
(10:59):
And unfortunately, it's, it'snecessary to have this kind of
circumstances to get at such alevel of development.
Speaker 1 (11:05):
Yes, I agree.
All right.
So let's talk about, uh, whatyou're doing today at Value
Connected.
Uh, can we talk about company,the work that you guys do?
What's the profile of yourclients?
Are you involved in any excitingprojects today?
So please elaborate
Speaker 2 (11:20):
On that.
Yes, absolutely.
Now, we are involving, involvedin, in many, many exciting, uh,
projects.
I am passionate about, uh, AIand, um, and digital, uh,
healthcare myself.
So that's something that reallygets my attention a lot.
And, but if looking to what weare doing right now, what the
basic, what we do is toaccelerate access of patients
(11:42):
and providers to the medicaltechnologies they need.
So what do, the typical problemthat we see is that medical
companies, uh, launchingproducts in the market, which
are products that they trulybring benefits to patients, but
the, the medical companies don'tknow how to translate those
benefits to the decision makers.
(12:03):
What is important to understand,of course, we focus, um, uh,
mostly in medical technologiesand digital health, but we also
work with pharmaceuticals.
But if you look into digitalhealth and medical technologies,
uh, that's the second mostinnovative industry in the
world.
That means every 35 minutes,that is a new patent for a medic
(12:26):
on average, a new patent for amedical technology in, uh,
registered.
So when you, when medicalcompanies come to hospitals, to
providers and say, here, deardoctor, dear nurse, dear
committee, we have this newexciting product here that does
this and that it has a lot ofbenefits, a lot of research, a
(12:47):
lot of efforts, a lot ofinvestments put on that product.
But the first reaction from thehealthcare provider and payer is
to think, oh my God, an upfrontcost, another cost.
And especially in Latin America,when we have, uh, a, a more
delicate situation in terms ofecon economy, especially related
to certain markets and certainsegments, the breaks are always
(13:10):
on.
There is always some kind of abarrier to say, wait, let's
evaluate this technology better.
And especially in Latin America,if you cannot demonstrate that
you save costs, it is going tobe very hard.
You may have very high levelevidence, but if you are
increasing costs, then it's notimpossible.
With that happens all the time,but it's going to, you need that
(13:33):
to make this kind of aargumentation.
So we help our patients,patients, our clients, to
identify how can we translatethe benefits of the products to
value.
And value means why should I payfor your product?
Why is it something that weshould use and we should pay
(13:54):
for?
And an example of this was in2000 and, um, and 18.
And that's a very special, uh,project to my, uh, to me come to
my heart.
And I will explain why in 2018we were, were working with, uh,
this, uh, this large company.
Usually we work with largecompanies, we, but we also work
with, uh, startups as well.
But we were working with thislarge companies that was trying
(14:18):
to obt obtain an inclusion of,um, um, home care mechanical
ventilation in the nationalhealthcare system of Brazil.
So it's a national health systemwith a 212 million people to
include something, the nationalcoverage, it's complicated.
And we made our analysis, and ifwe would tell the healthcare
(14:39):
system in Brazil to pay for thatdevice, for the, the, for
ventilation at home, not only athospital, but at home, this
would increase costs.
And this kind of obvious,because then you have the
ventilators at the hospitals,which are already being used,
but then you have to pay forventilation at home.
But that, and that's the firstreaction when you think about
(15:02):
price.
But then we start our work,which is shifting from price to
cost and from cost to value.
So let's take these two stepsfrom price to cost.
It's not only about the price ofthe ventilation, but the cost of
the treatment.
A patient at home is, I wouldsay, represents 25, 30% of the
(15:25):
cost of a, of the same patientin the hospital.
So when you start putting these,uh, costs, they tend to balance
them off.
Not that you mention patientswith mechanical ventilation that
needed to go to the hospital,they are usually feeling very
bad.
So they did, they require a lotof attention.
So we made these scenarios tothe Brazilian healthcare system,
(15:47):
say, listen, this is the cost ofthe ventilation, but actually
let's consider the other coursesthat are related.
And we doubt getting into muchdetails.
We developed eight scenarios topresent to the Brazilian
government.
So we, we moved to from price tocost, and then to cost to value.
The national healthcare systemof Brazil has a chronic over
(16:07):
demand.
It's always, um, uh, more,there's a always a line of a
patient demanding access tohealthcare.
And these patients, when theydon't get treated, most of them
will deteriorate.
And, uh, not that to mention theworst possible scenario, which
is, uh, unfortunately thepatient, uh, come into death,
(16:28):
but there's also the patientgetting more expensive to treat.
So what we showed to theBrazilian government was the
value of, uh, uh, treating thesepatients at home.
And although it would beslightly more expensive because
it would be that capacity inthe, in the, in the public
hospitals would be released toother patients.
(16:49):
So we present there and was wasa very magical moment for me
because, uh, I got to talk to alot of patients and we got to,
to, um, because we need to dothis to understand the patient
experience.
And we had the patients thatwere living in public hospitals
for 2, 3, 5 years, they werethere because they could not be
(17:14):
discharged.
And by the moment, um, theywould have a me mechanical
ventilation at home reimbursed.
They could come back to theirfamilies with, uh, in a, in an
environment which has a muchlower, uh, propensity for
infection.
So, uh, fortunately we, this wasa project that they started in
2018 and we succeeded.
And the Brazilian governmenteventually, uh, included home
(17:38):
care ventilation in the nationalco um, wow.
Coverage plan.
Nice.
That's super nice.
And of course, nobody expectedthat.
And then coronavirus came andheat and we, uh, we feel very
happy.
And this is one example of theprojects that we do, that I, I
feel extremely happy and my, myteam feel extremely happy that
if we could save at least onepatient yeah, that could receive
(18:01):
mechanical ventilation at homeand not at the hospital,
especially during coronavirus,then this project was more than
than worth it.
So that's the kind of a projectsthat we do.
And again, um, governments,payers, they have so many
technologies to look at healthpolicies, so many things.
It's important to do this workfrom price to cost, from cost to
(18:24):
value, and act more as a partnerto these healthcare stakeholders
instead of a, a supplier or amanufacturer of a medical
products.
Speaker 1 (18:34):
Okay.
Alright.
So the question that I have nowis about how can a new
technology get inserted into thehealthcare system in a country,
specifically Brazil?
Let's, is there a framework?
Is it a step-by-step process,process that ha that a company
has to go through?
Could you please guide usthrough the process?
Because I'm sure listeners wannaknow how they can get
(18:57):
reimbursement for theirtechnologies, right?
Speaker 2 (18:59):
Absolutely.
We can talk about, uh, othercountries as well as well.
But let's focus on Brazil and Iwill make some parallels.
Um, yes to, to Latin America ingeneral.
So first of all, the first,let's start with good news.
Uh, Latin America is very, thelatinamerican in general is very
open to international evidence.
So for example, if you have astudy that was developed in
(19:23):
overseas and another country,but it's a a, a study that has a
good methodological approach,um, uh, does not need to be
fantastic, but it, it has a gooddescription of outcomes, it will
be accepted, it will bereviewed.
Unfortunately, uh, uh, registrydata is not so well accepted in
(19:45):
Latin America.
Uh, and we have registry dataswith, uh, data databases, excuse
me, with thousands of patients,sometimes with dozens of
thousands of patients, but theyare not so well accepted.
So have international data, um,uh, especially if it's, uh,
randomized and prospectivethat's extremely well accepted.
(20:05):
So that's the first thing.
And of course, case, local casestudies talking about Brazil,
for all the countries in LatinAmerica, Hulu, Brazil is the
country that has the strongestseparation between private and
public healthcare.
All other markets in the mainmarkets, Colombia, Mexico, Chile
, uh, Argentina, that is a kindof, uh, uh, overlapping and a
(20:30):
strong overlapping in Brazil.
There is a certain overlapping,but there is a strong
differentiation the way thatmedical products are assessed
and evaluated.
So to come into this, um,Brazil, the public healthcare of
Brazil has one of the mostcomplete, um, healthcare
information databases in theworld.
(20:51):
Really say what is exactly, Iknow it's, uh, in many
circumstances it could bebetter, but the level of
information you cannot obtain inthe healthcare system of Brazil
data source is second to none.
Um, uh, I would say even, evento to Germany.
Having said that, this what howpolicies are designed, if people
(21:13):
are using this information,that's another story.
But what I'm saying is that inthe public healthcare system of
Brazil, which covers every wholeresidents in Brazil, that is a
formal process, a formal healthtechnology assessment process.
Oh, there is a process readyplace, okay?
Mm-hmm.
So that you can submit yourtechnology and any institutional
(21:35):
person in Brazil can submit.
Of course, if, uh, if a medicalsociety submits a patient
association or a doctor willhave more influence, a more, a
stronger weight, then of courseif the company itself submits,
but there's no problem for thecompany self submits.
Yeah.
Okay.
And they evaluate the, thetechnologies and the cortech is
(21:57):
extremely well organized.
They usually took six months toevaluate a medical technology.
As soon as the coronavirus, uh,heat, they publish the website,
we will continue to reviewtechnology, but our timelines
are flexible.
We just, uh, submitted somethingto, to contact and they
responded in six months
So, uh, it did not affect veryquestion predictable.
(22:20):
Yeah.
Very, very predictable.
The process itself, and theprocess is that, and this is
specifically now during this,this time because there were
other meetings, but everybody'sis, uh, uh, hesitant to have
face-to-face.
How does it work?
You submit your technology orprocedure for evaluation in the,
for the contech, uh, rememberit's not a product.
(22:41):
You have to submit a procedureprocedure.
So you have a device that can beused in different procedures.
You'll have to make differentapplications.
The Contech will receive thatand they will inform if there is
something missing like a form orstuff like this.
Once this is complete, processesstarts and they will perform an
internal evaluation and theywill have an internal meeting.
(23:01):
And all the meetings for Contech, they are recorded and made
available over YouTube, maybemaybe other platforms as well.
But I always access YouTube andthey will discuss and they will
come to what is called apreliminary conclusion.
By the moment they reach apreliminary conclusion, which
could be, yes, we think thisshould be included in the sus,
(23:22):
or SUS is the national publichealthcare system, or no, we
should, uh, not included.
Then they, uh, made a public,they start of a public
consultation that they say,listen, we are open to receive
comments from the society, andthey are looking specifically
for additional evidence.
The main goal of contact is toassess evidence.
So they open this publicconsultation, which usually
(23:44):
lasts between 20 and 30 days.
And after the publicconsultation, they will call the
applicant the person who, orinstitution who made the
application.
And they will listen to theapplicant in a second meeting
and they will listen.
They will, they ask questions bythe moment that meeting ends.
The second that meeting ends,the pplicant leaves, and this is
(24:05):
online, pplicant leaves, and theecotech starts reviewing the
public consultations and theyreach a final conclusion.
Okay.
Which will be published, um, inthe, uh, um, in the report.
The website.
Yeah, in the website.
Once this conclusion is made, ofcourse, if it's negative,
nothing changes.
If it is positive, the tech hasthe road to device, the Ministry
(24:27):
of Health of Brazil, but theContech does not have the road
to decide which funds should beused for what.
So even in our case, when we gotmechanical ventilation, we got
approval from Contech, but ittook six months.
And that's completely normalfrom the Ministry of Health to
say, okay, we're gonna fund thistechnology, but let's allocate
the money from here from there.
And that's a complex decisionwhich happens internally.
(24:50):
So overall from the Appliccomplete application to a
decision for QuTech six monthsand another six months to have
an inclusion in the publichealthcare system.
But that, uh, once again, theapplications to Antech can be
made at 24 7 anytime you want.
Okay.
I'll move into private.
Now.
(25:12):
Private healthcare, uh, we havethe, a national private agency
in Brazil, uh, in Portuguese,it's a n s.
And what they do is that inprivate healthcare there is a
national list of coverage, butas opposed to public healthcare,
the national list of coveragein, in, um, Brazil private does
(25:36):
not define a tariff, does notdefine a payment in the public
healthcare in Brazil, that is anational payment, that is a
national tariff.
There's a code.
There may be some exactly cold,there may be some adjustments
based, oh, I am an academichospital.
I'm a hospital in a, you know,that needs more funds.
Absolutely.
There's a incrementaladjustment.
(25:56):
Minimal for private iscompletely different.
So for example, you may uh, addinto public coronary artery
bypass graft at 10,000.
Hes in private, it will becoronary artery bypass graft.
And that's a, and there are twocodes in private healthcare, I
mean two code systems inprivate.
(26:18):
That is the payment for theprocedure itself, which will be
decided once it is in themandatory list.
It will be negotiated betweenthe provider, which could be a
hospital, a clinical laboratory.
It'll be decided between theprovider and the payer.
Each private payer.
And there is another, uh,payment, which is the physician
fee.
(26:38):
And that there are manyphysician fees in the same
procedure.
For example, surgical procedurethat are physician fees for
opening the patient, for theanesthesiologist, for making the
procedure.
All the procedures that arethere and these physician fees,
they are ranked according to acertain grade, which starts with
one A, which is the lowestgrade, and then one way, one A,
(26:59):
one B, one C to way to b B2Cuntil 14 C.
And each private payer will say,I will, I pay one a one
hundreds.
The other will say, oh, I payone a two hundreds.
And they will decide how muchwill be there.
So what is important private,uh, uh, healthcare, uh, that is
in comparison to public, that ismuch less availability of data.
(27:24):
Data is fragmented.
There are five types of privateplans have private health plans
in Brazil.
And basically they will followwhat is in the mandatory list
and they will decide, negotiatehow much that tariff will be.
And that's the moment that'sthis negotiation part that many
companies in Brazil don't followup.
(27:46):
And it's, uh, out of pocketpayments in Brazil happens very
frequently, especially in in SaoPaul and Rio, the largest
cities.
But altogether, it represents inthe best case scenario, best
case scenario, 5% of the market.
We are talking about this.
For example, if you take roboticsurgery, the, the out-of-pocket
(28:07):
payment represents less than 1%of the total demand of the
market.
So in the best case, we'retalking about 5%.
And the problem is that manycompanies, they turn on their
conditioner, they stay relaxed,and they stop there.
Let's go into our out of pocket.
And then that is the opportunityto expand that usage applying to
the a n s to the nationalcoverage.
(28:28):
And there are of course in,there's a lot of flexibility.
There is possibility also, andthat's the last point to say,
um, potential to make individualagreements with health plans.
And there are those health plansthat own their own providers,
their own, their own hospitalsand labs.
Others that are more likeinsurance companies.
They are financial institutionsthat pay for coverage and they
(28:50):
will perceive value differently.
If you come to insurancecompanies, say we reduce the
length of state insurancecompany will not, will not react
the same way as if you tell themwe reduce costs.
But if you come to a, a healthplan, which is in Brazil is
called group medicine, that hasa possibility to have these
providers and you say, listen,we will reduce the life of state
(29:12):
.
They will say, wait, wait, youare reducing the cost of my
provider that belongs to thesame group.
So it's important, uh, in themaking a summary in the public
healthcare system, that is onepathway.
Uh, it's uh, it's a, a verydefined pathway, harder to
accomplish of course, but ofcourse that's why it's important
that we do the proper work.
But in private, that is a lot offlexibility.
(29:35):
There's a lot of possibilitiesthat you can take.
Speaker 1 (29:38):
Wow.
It looks like we can, we canhave like five different
episodes just to talk about this
just starting to, to scratch thesurface of Brazil.
Imagine Mexico, Columbia,Argentina.
I mean, this is fascinating.
So, um, we're close to the endof the show and, and, um, I have
many more questions, but, uh,we're running out of time.
(29:58):
I mean, that's, that's somethingwe can do, uh, uh, certainly.
So Ernest, Ernesto, the lastquestion I have for you is, what
will be your words, your finalwords of wisdom?
What would you say to the CEO ofa medical technology company
from the United States or Europewho is just starting to explore
Latin America as a place to dobusiness?
(30:20):
He wants to start in the region,he wants to serve individual.
What would be your first tip ortwo or three tips, uh, to him or
her?
Speaker 2 (30:28):
Absolutely.
So, uh, for somebody wanting toenter in to enter the Latin
America market, it could besomebody overseas or could be
even a, a local company willingto expand more.
What is important to understandis that try to involve as early
as possible in your strategicplanning.
The perspective of payers don'trely only on key opinion
(30:50):
leaders.
They are not important.
They are essential.
You, you won't achieve a successif you don't have opinion
leaders in the ground period.
Absolutely.
But they are not the only onestaking the decision.
So it's very expensive to make ahuge connection with doctors
that why start may start usingthe product, getting paid out of
a pocket and then try to expandfrom there and then realize you
(31:13):
did not have the, the properevidence upfront and you could
have spent the time beforecollecting that evidence.
So even if, if you are launchinga product in Latin America and
you are going to through, gothrough the regulatory stages,
sometimes changing two, threethings in your study protocol
(31:34):
will make a regulatory studyapplicable to a reimbursement
decision.
It's not a rocket science tomake this, this, this leap, this
jump is not even a leap thisjump.
And if you are already, uh,register your product's already
registered and so it means youare running against time, then
try to involve payers as earlyas possible and as early as
(31:55):
possible means do it now.
If you have done so, do it now.
Talk to them.
Understand what type of evidenceare they requesting?
What do they define as a metricof success?
How would they evaluate theproduct?
Because at the end of the day,and that phrase explains the
ravine value is a perception, isnot what you as a medical
(32:17):
company would think your producthas value, but how the decision
makers, the local decisionmakers perceive the product that
you're bringing.
But that's basically the, thefinal words that I have.
Speaker 1 (32:27):
Alright, Ernesto, thank you somuch.
I, I think, uh, listeners arelearning so much from your
wisdom and your experience inLatin America.
And as I said, we shouldprobably plan for another
podcast episode, uh, to talkabout my pleasure countries.
But um, thank you so much forbeing a guest in our show.
I look forward to being in touchand uh, it was a delightful
(32:48):
conversation.
As you usual
Speaker 2 (32:50):
My pleasure.
Thank you so much for theopportunity.
Have a great day everyone.
Thanks Julia.
Bye bye-Bye.
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