PERU:

INTRODUCTION TO THE PERUVIAN HEALTHCARE SECTOR AND BUSINESS OPPORTUNITIES

Jorge Fernández Gates, Senior Advisor Peru, Colombia, Bolivia and Ecuador

Health: a high priority for the Peruvian Government

• Government allocates 5.5% of the GDP to thehealth sector. Latin American average is 7%.

• Sector is fragmented in different Ministries. • MoH is responsable for defining the general

policies.• Current Government has prioritized this sector

and promised to increase the sector’s GDP share.

Main causes of death in Peru (2014)Cause Total % of Total % of Men % of Women

1 Malignant Tumors (Neoplasms) 19 360 20% 18% 23%

2 Influenza (flu), pneumonia 13 349 14% 13% 15%

3 Other bacterial diseases 7 222 8% 7% 8%

4 Other external causes from accidental traumas

5 686 6% 8% 4%

5 Other heart diseases 4 740 5% 5% 5%

6 Ischemic heart diseases 4 497 5% 5% 4%

7 Cerebrovascular diseases 4 137 4% 4% 5%

8 Other respiratory diseases affectingthe interstice

3 903 4% 4% 4%

9 Hypertensive diseases 3 792 4% 4% 4%

10 Diabetes Mellitus 3 695 4% 4% 4%

Other 26 079 26% 28% 24%

Total 96 460 100% 100% 100%

Source: MINSA 2014

There are 60 000 new cancer cases registered yearly in Peru

Cancer Cases in 2016

Men Women

1 Cervical 4 639 0% 100%

2 Stomach 4 341 49% 51%

3 Breast 3 952 0% 100%

4 Prostate 3 909 100% 0%

5 Colorectal 3 053 43% 57%

10 Leukemia 1 343 54% 46%

Source: El Comercio 2016

Peru’s fight against cancer has strenghtend but…

Peruvian National Cancer Institute• Peruvian National Cancer Institute (INEN)

implemented a initiative called “Plan Esperanza” in order to improve cancercomprehensive care and the accesibility of the low-income population by providing free cancer treatment.

• INEN is the largest and most modern hospital specialized in cancer treatment in Peru. Theare always investing in the latest technologyregarding their sector.

…still the prevention work has lots to improve

• Population is still not aware of the preventionwork.

• In Latam only 5 out 10 cases detected survivecáncer.

• The number of INEN’s hospitals across thecountry is still not sufficient.

• Telemedicine a good tool for faster diagnosis.

Main sector’s challenges• Big gap in infrastructure. Especially

among public hospitals located outside Lima.

• Doctors salaries are still low compared to the region. Only 4% of all doctors earn more than 4 000 USD per month.

• Inequality in attention on public and private hospitals

• Use of telemedicine in rural areas in order to facilitate the access to proper healthcare for poor populations.

• Insufficient number of proper medical equipment in strategic areas and lack of trained employees to use them.

Health System in Peru

Public sector

Ministry of Health

Ministry of Labour (EsSalud)

Ministry of Defence

Ministry of Internal Affairs

Upcoming investments in the Peruvian public health sector

• Investments in new high-complexity hospitals for the period2018-2019 are around USD 450 million.

Since the private healthcare market has become extremelly competitive, in the last two years large insurance companies together with the privateclinics are investing considerable amounts of funds to improve theirinfrastructure to provide a high quality client service.

Upcoming investments in the Peruvian private health sector

Digital era entering recently but rapidly intoPeruvian hospitals• The infrastructure gap in Peru is big

challenge for the healthcare sector.• The hard geography hampers people

to access to proper attention and care.

• Telemedicine has become a boom in the private healthcare sector since2016.

• Most of the companies are developingtheir own apps.

Clínica Internacional will go for telephoneconsultations• Clínica Internacional is one of the biggest chain of

private clinics in Peru. • It was bought by the Insurance Company Rimac.• They launched their own app for arrange medical

appointments. These have already over 90 000 downloads.

• In 2018 they are going to launch telephoneconsulations. They expected to reach over 400 during the first period.

• They plan to launch also a remote monitoringplatform for patients with chronic diseases such as diabetes, hypetension, asma, etc.

• For these purposes, the company will invest USD 14 million

Clínica Delgado: One of the most modern clinics in LatinAmerica

• Belongs to the Spanish Peruvian InvestmentGroup Auna inaugurated in 2014.

• The investment for this clinic was 120 million.

• In 2017 announced they will invest in telephone consultations. They will havespecific medical staff for this purpose.

• This will also permit that doctors from otherclinics can follow online medical proceduressuch as surgeries.

• 20% of their annual budget will be allocatedfor these purposes.

Grupo San Pablo• Currently developing their own app to

book medical appointments and online payment for their three clinics. Theirambition is to apply this in all their clinics.

• They have also expressed the necessityof implementing an app to have theresults of imaging and labs.

• They have invested so in USD 1,5 millionin developing their ICT capacities and planning to increase this.

Grupo Sanna• By the end of 2017

announced they will focus in telephone consultations and other apps to strenghten theirrelation with their clients.

Health fair TECNOSALUD 2018• Tecnosalud is the biggest health

fair all over Peru.• It is arranged by Lima Chamber

of Commerce. • It takes place between 13-15th

of September in the city of Arequipa

• There are more tan 400 nationaland international providerspresent.

• http://www.tecnosalud.com.pe/

Peru• Area: 1 285 216 km2• Inhabitants: 32 million• Language: Spanish, Quechua and Aimara• Urban population: 77%• Currency: Sol• Constitution: Democratic Republic• President: Pedro Pablo Kuzcynski• GDP: 219 billion USD (2016)• GDP per capita: 6 598 USD (2016)• Inflation: 1.36% (2016)• Main exports: Mining ores, vegetables, fish meal,

textiles• Main Imports: Machinery & equipment, vehicles

Peru

• Political and economic stability since 2000• Stable legal framework for investments• Lowest average inflation in the last ten years• 3rd best in the region according to Doing Business

2017 • 21 Free Trade Agreements in force (FTA with the EU

since March 2013)• Member of the Pacific Alliance together with Mexico,

Colombia and Chile• Exports mainly based on raw materials (mining ores

and natural gas)• China and USA are the most important trade

partners.

Peru: Leading GDP growth among the PA members

Finland in Peru• Finnish embassy was re-opened in Lima in 1999.

• Over 40 Finnish companies present in Peru: 9 established subsidiaries and around 35 with local representation or distribution. Most of them providing to the mining and energy sector.

• The subsidiaries are: Konecranes, Lamor, Metso, Nokia Network Solutions, Normet, Outotec, Pöyry, Robit and Wärtsilä. Most of these cover the Colombian market from Peru. They employ 477 people and had a turnoverof USD 168.3 million by 2016.

• 4 Finnish healthcare brands locally represented: Planmeca, Merivaara, Instrumentarium and Wallac

Peru’s population is relatively young

• Life expectancy in Peru has augmented 15 years since the lastfour decades.

• For men is 72 and for women is 77,3 years of age. In average, Peruvians liveup to 74,6.

Things to consider!• FTA between EU and Peru is working

smoothly. However Peruvian CustomsAuthority sometimes is highly bureaucraticwith some medical devices

• Average time to get permissions 6-8 months.

• Big presence of Asian brands. Price issensible in the market but, if the solutionhas a clear differiantior, the chances are good.

• Private clinics are less bureacratic and open to new technologies.

• Sales cycle in Peru is 1-1.5 years.

Next steps• Business Opportunity on Digital

Hosipitals in Peru will be publishedon www.marketopportunities.fi

• Start discussions with potentiallocal distributors/agents.

• Visit the region and meet face-to-face potential clients

• Visit to the biggest fair on medical equipment and related solutions. Tecnosalud September 13-15th.

Tervetuola Peruun!Jorge Fernández GatesSenior AdvisorPeru, Colombia, Bolivia and EcuadorJorge.Fernandez@businessfinland.fi