Read the Conversation
EF: We have transitioned from the pandemic and entered the "new normal." What are B. Braun's priorities for 2023?
BB: B. Braun wants to improve the service to patients and customers. Our participation in the system has significantly increased over the last few years; however, only selling the product is not enough. We want to discuss value creation with our customers and patients.
We understand that healthcare systems lack qualified professionals, especially in Europe and the US. Even though Brazil’s situation is much better, this is still an issue in every hospital. Additionally, in the current framework, a nurse or a doctor spends 30 percent of their time organizing bureaucracy and logistics instead of spending time with the patient. We are working hard to find solutions and show that our services can save money and improve patient outcomes. It is a complex endeavor since the solution has to be implemented in all areas of the company.
In Brazil, we are investing in a new physical location for our technical service. We hold a dominant position in the local infusion therapy market, and it is not solely due to having the best pump. Our market leadership is primarily attributable to our service package, including product education, as insufficient training of healthcare professionals is a problem we detected on the market.
Infusion therapy is critical, and a hospital cannot function without it. Therefore, when talking to medical staff and CEOs of big hospitals, price is not the issue. Their biggest problem is the reliability and availability of the service. By focussing on our services as well as on our products, we can ensure we deliver in all areas.
EF: What new products is B. Braun launching, and how will they affect your portfolio in Brazil?
BB: We recently launched a new generation of hip implants that have been very successful in Brazil. This is a highly complex service offering because hip or knee surgery requires special surgical instruments and several sizes of implants.
In the minimal invasive surgery field, we are coming up with a new generation of our 3-D tower called "Einstein Vision." In addition to extraordinary transparency and depth visually in 3D, it will have a fluorescent functionality to differentiate the structure of tissues. For neurosurgery, we will be launching a new neuro microscope this year.
In Brazil, we have implemented the latest generation of our infusion pumps. This implementation requires not only the pump but also its connectivity. Our method enables seamless traceability within the hospital administration system, ensuring that patients' prescriptions are diligently monitored. It allows tracking and recording vital information such as the product administered, the time of injection, and the patient to whom it was issued. The monitoring is centralized, connecting the alarm functions of the pumps to the nursing desk.
We have a local medical factory to produce pump and gravity sets, so we are not reliant on importation. Our production footprint is entrenched. While other companies only assemble in the country, we buy the granulite from the chemical producers, extrude the hoses, produce the subcomponents, and everything else right here- making a true Brazilian product.
B. Braun is an international company operating with in- and exports. However, every health system needs to ensure that local resources are available. Every country must invest in a serious health industry and count on the political commitment to guarantee this happens.
EF: B. Braun defines itself as a partner of the system in Brazil. What strategic partnerships are you forming in Brazil to accelerate innovation and improve access to your products?
BB: Customer-focused action is part of every company’s strategy. In strategic cooperation, we have to listen to the customer and understand their needs.
These needs can refer to new designs, services, or products. Therefore, we are deep into discussions with big hospital chains and individuals leading hospitals in Brazil to understand their necessities. The topic goes beyond patient outcomes. For example, logistics is still an area that can be improved in the health industry.
The Brazilian customer is very heterogeneous. The interactions, needs, and questions are very different with high-end reference hospitals and remote public hospitals. While other industries allow clear, standardized processes, this does not apply to the healthcare sector. Government tenders and delivery specifications are strictly defined. We hold discussions with virtually integrated groups about patient-based, result-based payment, full integration of systems, and more.
We have digitalized our systems and created online stores where all transactions, orders, and invoicing can be automated and integrated with the customer. We have a vendor-based inventory running with several hospital groups. These aspects highlight the need to optimize the business, especially in Brazil, where imports have very long lead times. We are working on integration and forecasting the customer's needs to avoid delivery delays, considering that no hospital has long reserve stocks and no alternative suppliers are available. As hospitals seek reliable, dependable partners, our approach points to mid-term and long-term results.
EF: How is B. Braun preparing for a future where home care is more prevalent in Brazil?
BB: We know that the right solution for the patient is to reduce hospitalization time and optimize the patient's journey to be treated at home. B. Braun has a lot of products that support these patient outcomes, starting with the solutions we offer for surgeries. For example, by gluing a hernia instead of stitching or stapling, a patient can be discharged earlier. With the right wound care products to apply at home, this becomes a very good solution.
We are working very closely with the big Brazilian clinic groups forming for outpatient care. We are restructuring our organization to prioritize the development of our outpatient care business, despite the evident lower revenue compared to our hospital operations. We are allocating resources to effectively foster its growth and ensure its success.
EF: What aspects need to be considered to improve the environment for the medical device industry in Brazil?
BB: Brazil’s health system is evolving and growing. Although there are obstacles, there is nothing fundamentally wrong with the country’s market environment.
Considering Brazil’s tax complexity, it becomes evident that the country needs to optimize its tax reform. Currently, the tax regime is manageable, but the risk of not having a double taxation agreement is a hurdle. It is a problem for businesses in countries such as Germany, where these agreements do not exist.
Many business decisions are based on the tax impact, not objective criteria, which is wrong and counterproductive. Taxation should not be a deciding standard for location, products, and services.
A free trade agreement between Europe and MERCOSUR would benefit all players involved. From a geostrategic perspective, a constructive relationship between the two continents is something that we should all strive for.
The government should actively support industrialization. It is very important to understand how the secondary industry in Brazil can develop further. A local production footprint creates jobs and consequently alleviates other burdens in society. B.Braun alone employs 790 people in production facilities and offers an extensive trainee program.
In a global context, where Europe and North America face structural problems, a slowdown of innovation, and a lack of industrial workers, Brazil has a valuable asset of qualified production staff. The country also provides excellent programs to develop medical staff. Many healthcare professionals are moving from Brazil to Europe and the US. Brazil has a young population, and people are educating themselves. People want to grow, and this window of opportunity is a win-win situation.
