Current Review of Clinical Testing Compliance to Global Standards in Latin America

Current Review of Clinical Testing Compliance to Global Standards in Latin America

Current Review of Clinical Testing Compliance to Global Standards in Latin America

Understanding the factors that shape the market of ISO 15189 accredited clinical laboratories and how opportunities emerge.

The medical testing market is a small but critical part of a country’s healthcare services. By offering testing and diagnostic services, medical testing laboratories support a variety of other medical practitioners by making them able to better treat or prevent illnesses in their patients. In this highly specialised field, accreditation to ISO 15189 testifies to the technical competence of clinical laboratories and conformity to international standards.

What is Medical Testing?

Medical testing is the assessment of specimens in a laboratory in order to better diagnose or treat patients. Accreditation includes conforming to quality management, technical, as well as safety and ethical standards.

The ISO 15189 standard, however, does not have especially high uptake in Latin America. Not only is the standard not mandatory, but other competing international standards are available to medical testing laboratories. The result is that, within Latin America, ISO 15189 accredited laboratories typically represent less than 1% of the total population of medical laboratories.

Despite this, the number of laboratories maintaining ISO 15189 accreditation is rapidly growing among certain types of facilities. We find that the need for international recognition is a critical driver when it comes to unmandated uptake of ISO 15189 accreditation. Ultimately, however, widespread use of ISO 15189 will depend on future regulation or incentives, as evidenced by countries like France.

ISO 15189: Limited uptake in Latin America

Government intervention plays a key role in the uptake of ISO 15189. At this time, only a few countries including Australia, Latvia, France, and the Netherlands, mandate accreditation to ISO 15189. For such countries, mandatory accreditation allows medical testing laboratories to become a key pillar of the healthcare system since the standards are highly technical and laboratories undergo regular audit.

Lacking such government intervention, however, laboratories often seek other, less burdensome forms of accreditation or no accreditation at all. Among the tens of thousands of medical testing laboratories in Latin America, only 111 are accredited to ISO 15189. In any given country, ISO 15189 accredited laboratories account for less than 1% of the total laboratories. Part of the reason for this low uptake is the fact that accreditation is not mandated and that medical testing laboratories often opt for other ISO standards which, though less sector specific, also attest to the quality of the laboratory.

ISO 15189 is a particularly stringent standard in that it uses quality management systems similar to ISO 9001, and testing standards similar to ISO 17025, but also contains additional technical standards specific to medical testing laboratories. Without regulation mandating use of ISO 15189, medical testing laboratories have some leeway in terms of how they attest to the quality of their work while still using internationally recognized standards.

Aspiring to be recognised internationally appears to be the main reasons for getting accredited

Given that accreditation to ISO 15189 is not mandatory, and less stringent alternatives are available, medical testing laboratories within Latin America are a unique group. Though they might typically offer the same types of services as unaccredited laboratories, ISO 15189 accreditation affirms a higher degree of competence. In examining the sum of the accredited medical testing laboratories in Latin America, Sector & Segment has been able to identify the key characteristics of accredited bodies in the region.

ISO 15189 accredited medical testing laboratories are predominantly national firms. That is to say they only operate within a single country. Out of all of the accredited laboratories examined, only one was a global firm: Quest Diagnostics operating in Mexico. It is likely that for firms such as Quest Diagnostics seeking to expand globally, ISO 15189 accreditation helps to build a strong reputation and meet both local and global standards.

Accredited medical testing laboratories also tend to offer services to the market rather than simply for internal use. This makes sense, as non-mandatory accreditation largely serves as a tool for demonstrating competency and technical expertise to clients or external parties. In a small minority of cases, however, internally-oriented laboratories also stand to benefit from accreditation since it helps testifies to the overall credibility within an institution or company.

Much more variety exists within the types of services offered by these accredited laboratories. While the majority of accredited laboratories focus on offering services in the field of medical testing (which belongs to the broader field of TIC, “testing, inspection, and certification”), 44% engage in a wider variety of business. In the case of laboratories, this could mean offering hospital or non-test related research services.

Within medical testing services available, most ISO 15189 accredited laboratories ultimately specialize in a few key medical areas. On average, accredited laboratories in Latin America offer services in four medical areas. Most commonly, those are the core commercial areas in medical testing: Clinical Chemistry, Haematology and Coagulation, Immunology, Immunochemistry and Endocrinology, and Urinalysis.

The number of medical areas that laboratories operate across varies significantly by country, along with the number of test methods used and tests executed. Mexico’s medical testing laboratories, for example, on average cover 4 medical areas, 28 test methods and 58 tests. Whereas Ecuador’s laboratories cover 2 medical areas, 20 test methods, and 27 tests.

Because uptake of ISO 15189 is limited in most countries, it is hard to draw any conclusions. Uruguay has only one accredited laboratory, but it covers 6 medical areas and conducts more than 70 tests. In examining accredited medical testing markets in Latin America, each country has to be examined individually in order to fully understand its needs and opportunities.

What makes accredited laboratories stand out from non-accredited laboratories?

Because Mexico is host to the most developed market of accredited ISO 15189 laboratories, it gives us a broader indication of how accredited laboratories are distinct from other laboratories, and what the motivating factors might be for attaining accreditation. We find that accredited laboratories in Mexico tend to be far larger than those that are not accredited, and also more likely to be publicly run.

The vast majority of medical testing laboratories in Mexico are small operations. 94% of laboratories in Mexico have fewer than 10 employees. In comparison, accredited laboratories tend to be much larger – only 27% of accredited laboratories have fewer than 10 employees. Furthermore, 13% of accredited laboratories have more than 250 employees. These larger organizations stand to benefit more from accreditation since they can spread the cost of accreditation over business, improve their reputation, and standardize management practices and technical competencies across a large number of laboratories.

Accredited laboratories in Mexico are also much more likely to be publicly run. 13% of accredited laboratories are public compared to only 1% of all laboratories in Mexico. This is likely because accreditation is often closely tied to government regulation and is driven by the government’s aim of improving domestic quality. In the case of Mexico, the Mexican norm NMX-EC-15189-IMNC, which establishes the ISO 15189 standard locally, was put into place in 2005 and has been promoted as a way of improving quality ever since. As such, public entities are likely expected to cooperate in the drive towards standardization and higher standards.

In countries with less developed markets, accredited laboratories tend to be elite institutions and points of reference for other laboratories and organizations in the country. In Uruguay, for example, the only ISO 15189 accredited laboratory claims to serve over 80 institutions across Uruguay. As the only ISO 15189 accredited laboratory in Uruguay, it is able to distinguish itself from all other medical testing laboratories in the country.

In some cases, these laboratories also provide services internationally or aim to have international recognition in a particular field. In such cases, laboratories are able to leverage their ISO 15189 accreditation to support that image. In Brazil, for example, one of the country’s 3 accredited laboratories is the Mendelics Analise Genomica SA, which aims to be recognised as a global reference for genetic diagnostics and interpretation.

ISO 15189 is growing in popularity in Latin America

Although ISO 15189 remains a voluntary standard across Latin America, the number of laboratories has shown significant growth in the last five years. Between 2013 and 2018, the number of laboratories in Latin America grew by a CAGR of 21%.

In cases such as Ecuador and El Salvador, an accredited medical testing market only emerged recently. In 2013 neither country had any ISO 15189 accredited bodies but by 2018 they had 8 and 2 accredited bodies respectively. Argentina, which evidenced the strongest growth in the examined years, went from having 1 accredited body to 11.

Most of the laboratories being accredited are not seeking to generate a reputation in highly specialised fields. Instead they are focusing on core medical areas such as Clinical Chemistry, Haematology, and Immunology, Immunochemistry, and Endocrinology. We find that medical areas which are most common also tend to be some of the fastest growing within Latin America. This shows that within the relatively young Latin American market, demand is primarily for highly competent laboratories that can perform staple medical tests.

This growth is a testament to the increasing popularity of the standard across Latin America. Although accredited laboratories remain a small proportion of the total number of laboratories, larger laboratories, especially those seeking some form of international recognition, are turning to ISO 15189 accreditation. Wider uptake, however, will likely require some form of government regulation or incentive.

Sector & Segment are committed to continue tracking the evolution of the regulation and ISO 15189 accreditation uptake over time.

How India’s intense competition in the powdered health-food drink space will ultimately help Indian kids get better nutrients

How India’s intense competition in the powdered health-food drink space will ultimately help Indian kids get better nutrients

How India’s intense competition in the powdered health-food drink space will ultimately help Indian kids get better nutrients

Two important acquisitions in the Food & Beverage space are impending in India: H. J. Heinz’s Complan and GSK’s Horlicks and Boost brands1. These 3 brands are believed to represent almost two-thirds of the Indian children’s Health-Food Drink (HFD) market that is estimated to be worth between US $ 860 million2 and over $1 billion (70 billion Indian rupees)3 in annual sales. As a result, strong contenders are currently bidding to acquire these brands: global consumer-goods giants Unilever, Nestle and Coca-Cola for Horlicks and Boost, and Zydus Cadila Group (a leading Indian pharmaceutical company) for Complan.

The current position of the brands for sale is being shaped by mixed factors. On the positive side, Horlicks and Complan are market leaders with a lot of heritage in a strong category. But, on the negative side, they are quickly losing market share to a variety of contenders – both international premium and local affordable players.

Stuck in the middle, these heritage brands are being squeezed; keeping pace without carefully revisiting ingredients, tastes and pricing could be a challenge. Buyer beware.

Horlicks, Boost and Complan: Historic Leaders of the HFD space

The market of HFDs in India emerged in the 1950s with the introduction of Horlicks, a malt-based nutritious drink. Horlicks quickly grew in popularity, especially in South and East India where availability of milk was scarce3.

Other brands including Boost (also owned by GSK) and Bournvita (currently owned by Mondelez) followed. As the market matured, brand-extensions were launched including “Junior Horlicks”, a junior range targeting 2 to 6-year-olds, which was launched in 1995.

Capitalising on their uptake among Indian families, these brands worked hard to achieve a broader and broader distribution in the general trade (small store format), even in rural areas. This put them at the centre of health nutrition for children after breastfeeding and weaning.

The past 15-20 years were particularly prosperous for these powder-based malted HFDs. They saw a steep boost in sales driven by the emergence of an Indian middle class and their desire maximize the physical and intellectual development of their children. These parents regard nutritional supplementation as an important way to help their toddlers, pre-schoolers and grade-schoolers to reach their full potential – a belief positively reinforced by frequent marketing and advertising campaigns targeting these families, especially on TV.

But this context also accelerated the uptake of other types of child-nutrition solutions. Boosted by the growth of the modern trade (larger store format) and e-commerce, new competition was able to gain visibility and reputation among parents. The household names Horlicks, Boost and Complan are now being challenged by a variety of other national and international brands that take advantage of limitations among those household brands, such as high sugar content or limited amounts of growth-related nutrients in their formulation.

Challenger # 1: HFDs with better nutrients (e.g. Nutricia’s Protinex)

As a consumer segment, educated middle-class Indian parents are concerned with the amounts of what they consider unhealthy or desirable nutrients and are particularly keen on scrutinizing food labels.

International companies have seen this as an opportunity to launch new HFDs with additional nutrients or the same nutrients as traditional HFDs but in higher quantity. For example, Danone Nutricia’s Protinex was launched to fill a gap in HFDs with high protein content. Its “tasty chocolate” formula contains 8g of protein per serving vs. 3.9g for Junior Horlicks Stage 1 and 5.9g for Complan Jar Royale Chocolate. Furthermore, it also beats competitors on the concentration per serving of most other vitamins and minerals in the formula – making it a “no brainer” for label-reading parents able to pay a premium for a product with better nutrients (as Protinex costs almost twice as much per serving as Junior Horlicks).

Challenger # 2: Paediatric Nutrition (E.g. Abbott’s Pediasure)

In 2000, Abbott launched Pediasure, specially formulated for children aged 1 to 10 years old and conceived of as a full meal replacement for picky eaters. Together with Ensure (targeting adults but also frequently taken by children), Pediasure is estimated to have a 10% market share of the HFD market; and both brands continue to grow quickly2.

This success is attributed to Abbott’s commercial strategy which capitalises on the critical role played by paediatricians in recommending nutrition formulas to parents. In order to boost recommendations, Abbot’s representatives visit these healthcare professionals (HCPs) and educate them about the important role of complete nutrition in a child’s brain and physical development. In parallel, the advent of a large educated middle-class of parents also resulted in a more hands-on approach to children’s health monitoring with regular routine visits to HCPs. And the fact that they could afford these premium products ultimately created a snowball effect for Pediasure and Ensure.

Abbott also promotes its products directly to consumers (D2C) and are widely available in mass distribution channels. This “double-hat” approach, both medical and D2C, is not specific to India but has been the trademark of Abbott Nutrition for market entry around the world: first Abbott Nutrition targets HCPs to drive recommendation of their brands, then after 5-10 years, when their medical reputation has been established, they introduce D2C communication and aim for mainstream distribution to encourage broader product adoption. As in many Asian markets, this approach is paying off in India.

Challenger # 3: Growing-up Milks (e.g. Mead Johnson’s Enfamil)

Parents’ concern with the ingredient content of nutritional option has paved the way for the growth of adjacent nutritional categories, particularly growing-up milks.

A large reason why malt-based HFDs had been so successful in India was the fact that milk was not easily available and, when it was, its quality was poor. In contrast, malt-based HFDs were both accessible and able to mask an unpleasant milk taste3.

These historic success factors, however, are losing their relevance. A variety of infant milk formulas are now accessible, and most of them have “follow-up” toddler versions. Mead Johnson’s Enfamil Stage 3 is a particularly strong player in the space and has adopted a message around physical and brain development, competing head to head with traditional malted HFDs who leverage similar marketing lines.

Growing-up milks are sold at a premium price point; for example, Enfamil Stage 3 is four times more expensive than Junior Horlicks on a one serving basis. However, urban middle-class parents are willing to pay that higher price to provide what they perceive as better-quality nutrition, in line with the child-feeding practices of North American and European countries.

Challenger # 4: Local affordable HFDs (e.g. Patanjali’s Powervita)

The 3 types of contenders that we have laid out all have in common that they are led by premium brands owned by international companies (Abbott, Danone Nutricia and Mead Johnson). But leading HFDs’ competition also comes from the opposite side of the spectrum where local, affordable brands cater to rural families and urban working classes with low incomes. For example, Patanjali’s Powervita has a similar packaging look to Horlicks and Bournvita but is cheaper – ₹ 7.8 per serving (based on Amazon India prices) vs. ₹ 15.1 for Horlicks Junior and ₹ 8.2 for Bournvita.

The differentiation of local HFDs is not just on price but also on the brand’s identity, ingredients and taste. For example, Powervita is inspired from traditional ayurvedic medicine and borrows its marketing terminology from that space: “Shatavari promote health energy level and boost immunity” and “Shankhpushpi & Brahmi [is] good ayurvedic remedy for memory and brain”. In fact, Patanjali was co-founded by a very popular guru, Baba Ramdev, and, as such, has a lot of appeal among families with strong traditional Indian values4.

Beyond ayurvedic ingredients, the adaptation to local tastes can also appeal to Indian consumers. “Badam” (almond in Hindi), present in MTR’s Instant Badam Drink Jar is a good example. The importance of meeting local tastes has even been recognised by international players like Abbott that now manufactures locally its nutritional products with Indian flavours – e.g. “kesar badam” (saffron & almonds) for Pediasure5.

Although local HFDs represent a small amount of the total value of the HFD market due to their lower pricing, there are successfully taking some volume shares from most established players, slowing down the adoption of traditional brands Horlicks and Complan among Indian families emerging from economic scarcity.

Final thoughts

While Horlicks and Complan’s brand equity should still continue to attract socially ascending families to its products once they can afford them, the growth will certainly be lower than would have been originally predicted based on pure socio-economic factors.

The long-term future of Horlicks, Boost and Complan will very much depend on the type of innovation they manage to bring to the market in both tastes and ingredients. A substantial increase in protein, vitamin and mineral content could certainly help them to stay relevant, ultimately benefitting Indian children.

The promising potential for the Energy Inspection market in Mexico

The promising potential for the Energy Inspection market in Mexico

The promising potential for the Energy Inspection market in Mexico

Driven by new technical regulations and improved surveillance of existing ones, the Energy end-user sector in Mexico is a key growth area for firms engaged in the accredited inspection industry. Both accredited inspection firms as well as equipment suppliers stand to benefit from this rapid ongoing change.

A Revolution in the Mexican Energy Infrastructure

The increased demand for the services of accredited Energy inspection companies and associated equipment suppliers began in 2013 with the liberalization of the Mexican energy market. This historic change allowed hundreds of private investors and companies to enter the market but also demanded new regulation to manage risks and support public outcomes. In this new environment, accredited Energy inspection firms play a crucial role in ensuring new quality standards and regulations are being met.

Market liberalization inspired conversation about the future of Energy regulation in Mexico and continues to shape the market today. Topics such as licensing, renewables, energy infrastructure, among others, are being reviewed by Mexico’s Ministry of Energy with the aim of developing more forward-looking energy policy and regulation.

Opportunities in Energy inspection

Opportunities for conformity assessment bodies focused on Energy will span a variety of associated environments and industries. In order to raise standards and prepare Mexican infrastructure for the future, the Mexican government is turning to technical regulations and standards as a means of enforcement (see table).

In many cases this will require accredited Energy inspection bodies that can certify quality and conformity in products, processes, and installations. In the case of transportation, for example, the expected need for electric vehicles charging stations will come with two new opportunities: inspections of the installations and of the energy providing system (legal metrology).


•        Integrate and apply energy efficiency codes in local construction regulations (state and/or municipal).
•        Maintain, update and strengthen the Energy Efficiency Technical Regulations and their evaluation systems.
Industry •        Unify criteria to request environmental and energy information for large energy users.
•        Develop incentive programs, accreditations and recognitions to promote Energy Management Systems (EnMS).
Transportation •        Develop technical standards for electric vehicle charging systems.
Municipal public services •        Update technical standards related to the design and operation of municipal services with integrated ICTs, associated with the concept of smart cities.
Agro-industry •        Develop technical standards applicable to equipment and systems used in agriculture.
Energy bids

•        Obligations of renewable energy

Demand continues to outstrip supply in Energy Inspection

Although the cost of Energy inspection is high, the market remains unable to keep up with the demand for accredited Energy inspection firms. This is especially true for inspections concerning electrical interconnections and natural gas in which there are only a few bodies available to meet the hundreds annual of inspection requests.

In the case of inspections of electrical interconnections, the number of bodies providing inspections is insufficient to meet the number of requests from industry. As it stands, there are 10 inspection units that must provide for nearly 800 requests for inspection per year. Furthermore, the number of requests for inspection of interconnection is expected to continue growing at 4% per year.

In the case of natural gas, the number of inspection bodies nearly meets demand, but the number of requests for inspection in this field is expected to increase rapidly in coming years. In Mexico there are currently only 15 inspection bodies accredited to the NOM-001-SECRE-2010 natural gas standards. Unless these bodies manage to significantly increase their capabilities, this number will have to grow rapidly to meet the 10-20% growth in demand expected over the next six years.[1]

More to come

Demand for accredited Energy inspection firms and associated equipment suppliers is unlikely to diminish in the near future. Sector & Segment expects the number of technical regulations focused on energy to continue growing as the Mexican Ministry of Energy implements the energy transition strategy, energy reforms, new regulations and new technical standards. As these changes are implemented, demand for accredited Energy inspection firms and OEMs will increase as a way of ensuring quality and conformity.

Peru: The Fastest Growing Market in LATAM for ISO 17020 Inspection

Peru: The Fastest Growing Market in LATAM for ISO 17020 Inspection

Peru: The Fastest Growing Market in LATAM for ISO 17020 Inspection

Assessing drivers of growth in the Peruvian ISO 17020 inspection market and implications for Latin America.

Critical to the health, safety, and competitiveness of countries globally are the thousands of testing, inspection, certification, and calibration firms that ensure conformity to global standards across industries. In a globalised world, these companies form an integral part of any country’s trade strategy by raising standards and building confidence between trading partners. Domestic demands for safer and higher quality products also require improved assessment mechanisms. These factors, and others, have set the stage for this often shrouded market to deliver consistent growth and opportunities for those with the right knowledge.

Sector & Segment combines deep sector expertise with data-driven insight to provide targeted and actionable reports. Our insight is based in our unique databanks that cover entire ecosystems of companies and customers. Over the past 6 months, we have processed more than 150,000 data points related to more than 2,200 accredited inspection bodies present in 13 Latin American countries.

Leveraging some insights from our analysis[1], this piece focuses on Peru, the fastest growing accredited inspection market in terms of number of accredited inspection firms in Latin America. It examines the reasons behind Peru’s explosive growth and some implications for the broader Latin American market.

Even among the strong growth present in the Latin American accredited inspection industry Peru has shown itself to be exceptional. Between 2012 and 2017 the number of accredited inspection bodies grew at a CAGR of 57%, outpacing all other countries in the region. The source of this growth lies in a series of policies targeted at advancing the protection of the environment initialised in 2013, alongside regulation targeted at rational use of energy, drinkable water, air quality, and  manufacturing quality, among others. The result is that Peru has an abundance of young accredited inspection firms that have been founded to meet these growing regulations.

This growth has not made Peru the Latin American industry leader in any end-user sector. Peru remains the 6th largest country by total number of accredited inspection bodies. It has, however, become the second largest country in terms of accredited bodies in consumer goods, and the third largest in environment. More importantly, the growth shows exactly how powerful policy can be in stimulating the inspection industry.

Demands for better protections


Within Peru, growth in the accredited inspection industry has spanned several end-user sectors. The strongest growth has been present in consumer goods, but energy, environment, and industrials in Peru have all displayed above average growth for Latin America in those sectors.

The overall accredited inspection growth that has been witnessed in Peru can be tied back to Peru’s overall economic growth. Between 2005 and 2015 Peru’s GDP grew at an average of 5.8%. Strong economic growth has perhaps created two opportunities: the government has had the leeway to increase regulation without fear of overburdening the economy, and citizens have become more demanding when it comes to consumer protections.

This is reflected in the rising number of technical standards being published each year in Peru. In the years following 2012, the number of technical standards published by the government and associated technical bodies have grown almost exponentially. While not all of these technical standards are related to the ISO 17020 accredited inspection market, the trend reveals both the aims and actions taken by the government to boost quality and transparency.

Key Sectors

According to data gathered by Sector & Segment, consumer goods and energy have been the strongest growth area in terms of the number of accredited inspection firms in Peru. Our findings are reflected in government priorities. 16% of all standards published between 2012 and 2017 were related to food, beverage, and clothing manufacturing and a further 10% were related to the manufacture of electrical equipment.

By looking at the committees responsible for the creation of standards, it is also evident why environmental inspection has experienced such strong growth. The technical committees responsible for the rational use of energy and environmental management have been highly active, producing 138 technical standards between 2012 and 2017.

Opportunities remain in Peru

No exponential growth lasts forever but opportunities still remain in Peru. In 2017 new technical standards appear to still be focused at energy, the environment, industrial goods, but also construction. The Peruvian accredited inspection market will have to continue to grow quickly to meet this influx in technical standards.

Although Peru has taken significant steps towards establishing its inspection market, there remains much potential within the country. Based on our analysis of the number of accreditation firms relative to both population and GDP, Peru continues to lag behind the broader Latin American market. This helps to explain the rapid increase in technical norms and standards which seek to level the playing field.

A model to emulate in other developing countries?

The growth evidenced by Peru also offers some insights into the future of the inspection market in Latin America. Environmental inspection has been long neglected but policies such as those enacted in Peru could generate further opportunities in their respective countries. Only six Latin American countries currently have any accredited environmental inspection bodies and only three of those countries have more than five bodies in total.

Furthermore, in Latin America there are several other countries with broadly undeveloped accredited inspection markets. Should those governments opt to follow Peru’s example with stronger consumer protections and industry standards there could be future booms in accredited inspection.

[1] More information available in our 160-page report  “Industry Analysis of the ISO 17020 Accredited Inspection Bodies in Latin America” published in July 2018


Does more complexity mean more value for Medical Nutrition?

Does more complexity mean more value for Medical Nutrition?

Does more complexity mean more value for Medical Nutrition?

In the past 10 years, the Medical Nutrition (“MN”) sector has shown significant evolution of its sales and marketing approach. For a long time, this sector targeted dietitian teams based in hospitals with relatively simple product lines segmented by age groups (paediatric vs. adult), product formats (enteral vs. sip) and flavours.

But the context changed as hospital budget constraints driven by national government cuts put pressure on the costs associated with MN, which has often been regarded by payers and healthcare professionals (“HCPs”) as a mere commodity.

In response, MN manufacturers started adopting a different go-to-market approach, focusing on specific therapeutic areas and bringing some disease-specific innovations to the market in order to fight back commoditisation. Disease-specific MN products are intended to be so uniquely suited for a specific patient group that they can justify a premium price and still obtain better payers’ subsidies, provided they are supported by enough scientific and health-economic evidence.

By offering something uniquely suited to a disease rather than a generic nutritional solution, Medical Nutrition Companies hope to gain broader hospital recognition (including from specialist doctors) instead of being systematically referred to the “Dieticians’ floor” or “the kitchen”. This subsequently increases their chances of becoming core components of treatment protocols alongside pharmaceutical drugs.

Where do MN companies stand today against the adoption of a “disease-specific” model?

By analysing the way the top 4 global MN manufacturers present their product portfolio on their global websites we can see a concerted shift towards a “disease-specific” model (see table below).

Among these companies, Nestle Health Science and Nutricia Advanced Medical Nutrition appear to be leading the shift toward a disease-specific approach; they are broadly spread across numerous adult and paediatric pathologies.

Fresenius seems to have opted for a narrower pathology focus, maintaining a more holistic positioning of MN, except for a few “star” therapeutic areas.

Finally, Abbott has maintained a more traditional segmentation by age group, which leads to a list of products which offer minimal mention on the underlying pathologies they target. This positioning is interestingly in exact contrast with Nestle’s and Nutricia’s although they cover a similar breadth of medical conditions.

Our analysis shows that none of these companies rely today on a broad malnutrition concept suitable for undefined sets of therapeutic areas. This exposes the (perceived) necessity among industry leaders of increased specialisation to cope with hospital budget pressures.

What does it mean for sales and marketing organisations?

The shift toward a disease-specific positioning of MN has many consequences on the way marketing and sales teams of MN companies operate.

First, marketers and sales representatives of MN companies should align their internal structure to the therapeutic areas they intend to play in. In sales, medical expertise becomes as critical as nutritional knowledge and commercial flair. This most likely entails hiring new talents with a pharma background and/or a medical degree. The cost of the sales force may subsequently increase to align with the pharmaceutical industry.

Second, it requires the addition of Medical Affairs team members dedicated to proving the health-economic benefits of an innovative disease-specific product vs. a more generic one; this is because, nowadays, few medical products and solutions, as effective as they may be, will get adopted by payers and HCPs without solid health-economic evidence proving better or quicker therapeutic outcomes and shorter hospital stays.

Finally, it adds layers of complexity to marketing teams’ portfolio management strategy at the country level. On one hand, they need to continue to serve their current markets, and on the other, they are expected to prioritise the adoption of therapeutic areas based on the incidence-based opportunity these represent. As a result, it wouldn’t be a surprise if marketing managers struggle to decide how to update their product mix without putting at risk the health of their P&L.

Balancing the future “Perfect” and the current “Good” is possible

These are some of the questions that may arise in these marketing organisations:

  • What medical conditions should we prioritise?
    • In which ones can we offer more value to patients?
    • Which ones are easier for us to support based on our current set-up, the current level of medical awareness and protocols and the structure of the medical channels they relate to?
    • As a result, which ones truly offer the best combination of patient value and capability fit, and should therefore be our priority number one?
  • Do we already have products in the market to support these medical conditions?
    • And if not, does our global company have adequate products that are not currently present in the target country that we could add and launch?
  • Assuming no incremental budget, can our team prioritise these disease-specific initiatives whilst still serving our current customers and the bestselling products in our existing portfolio?

In fact, there is often a fear that shifting the focus onto a specific pathology or new product can undermine the many efforts over the years by sales and marketing teams to develop their existing portfolio and sales.

But standing still is never a solution so how to go about it?

Can we help?

Sector & Segment can help MN companies to navigate through these complex issues and come up with solutions that measure the pros and cons of different portfolio “scenarios”.

Over the years, our team has conducted 80 strategic projects in 25 countries across 12 therapeutic areas of Specialist Nutrition, helping its clients to develop product and disease specific propositions.

For more information, please contact me at