Before going into health itself, we cannot fail to point out that the concept of Latin America is a historical construction, representing the portion of countries located in South America and Central America, in addition to Mexico - although there are debates about this inclusion -, which geographically forms part of North America. Despite the elements common to these countries that are part of the so-called Latin America, they have different stages of development, which is reflected in the maturity of the health market and Healthtechs in each country.
When we talk about the expansion of Healthtechs in Latin America, the pandemic has a great influence on this process. According to the Latin America Reports, of the 7 million people who lost their lives due to COVID-19, 42.5% were in the Americas region. This tragic scenario triggered many innovations and technological advances in health, several of them led by Healthtechs.
However, it should be emphasized that health demands in the region did not necessarily arise with the pandemic: they are linked to structural problems in the health systems of Latin American countries. In this sense, the growing investments in startups of health technologies in the region are based on the return they get, since these Healthtechs begin to solve old and latent pain of populations in Latin America.
In numbers, the Fundraising The number of health companies grew by 4,700% between the years 2015 and 2021. In addition, in 2021, the collection of Healthtechs Latin American women was four times higher than in 2020. In addition, Latin America Reports also reported projections from the Oxford Business Group that indicate that by 2026 the Latin American health technology market may reach a total of US$ 5.6 billion.
Challenges of Healthtechs in Latin America and health as a whole
According to LatAm Tech Report 2022, some of the main challenges in Latin America are the sector's infrastructure, talent retention, data privacy, and regulatory issues. As for the data, for example, the report highlights that in order to build solutions and improve products and services, for example, the Healthtechs they need to collect a lot of information, which is a topic that is always debated due to numerous factors, including the issue of the privacy of health data.
Already “Health Overview: Latin America and the Caribbean 2023”, carried out by the OECD, presents other health challenges faced by the population in the region and that need to be addressed. In addition to issues of access, inefficiency, and infrastructure, the report highlights challenges related to demographic trends - such as the aging of the population - that alert to new demands on the sector. It should be noted, for example, that there is a need for continuous investment in primary care capacity in Latin America to reduce waste and prepare for the increasing incidence of chronic diseases with aging.
Despite these common challenges, as mentioned at the beginning, Latin American countries have different levels of development and different structures with regard to health. As we are already more familiar with the specific challenges of Brazilian health, about which Healthtechs If you take a closer look, it is worth highlighting some peculiarities of the Mexican scenario, given the expansion of startups in this market. According to the OECD report, regarding performance in the pandemic, Mexico had the third highest number of deaths. This index was attributed to the prevalence of risk factors such as chronic diseases and obesity, but also due to the challenge of fragmented care and the extinction of Seguro Popular surrounding the implementation of a new universal health program.
Mexican growth and trends in Healthtechs in Latin America
Faced with this situation, health startups are gaining space. According to a 2022 study by HolonIQ, is Brazil really at the forefront of this movement of Healthtechs in Latin America, but Mexico is also gaining ground. On HolonIQ's annual list with 50 Healthtechs most promising in Latin America, 52% of them are Brazilian, 24% from Mexico, 10% from Argentina and 6% from Chile. It is worth noting that in the previous year, Brazilian startups occupied two-thirds of the list, while Mexican startups represented 14% of the total, showing a strengthening of this ecosystem in Mexico.
The study also indicates that businesses focused on virtual consultations and home service provision remain strong in the Latin American region, which is attributed to the legacy of the pandemic. Telemedicine, for example, brought regulatory pressure and became a common reality. Within the sphere of providing services in homes, HolonIQ highlights, for example, Healthtech Brazilian ISA LAB — with vaccination in homes — and the Chilean Examedi — with health tests in the home environment. One observed change was that, in 2021, more than a quarter of the list consisted of Healthtechs focused on health systems, such as electronic health records, while in 2022 this percentage dropped to 10%.
Another highlight is that 90% of the startups mentioned in the study are very young, less than six years old. Still, 40% of them were founded in the last three years, reflecting the pandemic's impact on this expansion. Finally, HolonIQ points out, as yet another possible trend to be observed, that B2B models increased in the last year, but that those focused on the consumer still represent the majority of Healthtechs selected from the 2022 list.
Health Silk Road in Brazil?
Finally, since Brazil is the largest Latin American market, it is worth highlighting some points raised in a recent PWC study, the”Brazil on the Health Silk Road”. In short, although the Brazilian health market has many opportunities, there is still a reticence regarding the entry of investments and innovation due to various factors, such as dependence on inputs, regulatory issues, lack of integration between health systems, etc.
In this sense, the study reiterates the importance of partnerships with other countries regarding trade and technology transfer, highlighting China as an actor that can contribute to the evolution of the Brazilian health sector. In 2020, for example, a partnership was already established between Brazil and China around vaccines: the Butantan Institute, in agreement with Sinovac Biotech, developed and tested CoronaVac.
In this conception of a Health Silk Road in Brazil, the study emphasizes as an opportunity the strengthening of joint research aimed at the area of vaccines and technology transfer, indicating that China can help Brazil to establish itself as a hub of vaccine production. However, there are several challenges, ranging from the tax burden - which is one of the highest in the world, making it difficult to invest in the sector - to the strong dependence to import medicines and supplies.
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