Low-cost health tech Dr. Consulta to enter vaccine sweepstakes

. Jan 23, 2021
Low-cost health tech Dr. Consulta to enter vaccine sweepstakes Vaccines being administered in Rio de Janeiro. Photo: Delmiro Junior/Shutterstock

Earlier this year, an association of private clinics in Brazil began negotiations to purchase 5 million doses of a potential coronavirus vaccine developed by Indian lab Bharat Biotech. The move stirred controversy and criticism among experts— who saw it as a way for rich patients to “cut in line” — but regulators have yet to issue their opinion on the matter. Meanwhile, private companies are scrambling to be ready as soon as they have a green light from authorities. Within this parallel vaccine race, a new, big hitter is looking to join the fray: health tech Dr. Consulta.

</p> <p>Founded in 2011, Dr. Consulta works as a <a href="">low-cost</a> healthcare network allowing patients to schedule doctor&#8217;s appointments and lab exams via a smartphone app. It is present in São Paulo, Rio de Janeiro, and Belo Horizonte — three of the country&#8217;s most-populous cities — and employs <a href="">more people</a> than any other health tech in Brazil.</p> <p>Much of the draw of Dr. Consulta&#8217;s services is that they allow citizens without private health insurance policies to access cheap medical care, without going through Brazil&#8217;s free — and often overburdened — public health system.</p> <p>In an exclusive interview with <strong>The Brazilian Report</strong>, Dr. Consulta founder and chairman Thomaz Srougi confirmed that his company is seeking to use this same model with coronavirus vaccination.</p> <p>Indeed, low costs will be key for any vaccination effort on the private network. A recent poll showed that 57 percent of Brazilians <a href="">would not pay</a> for a vaccine. &#8220;People expect that a Covid-19 vaccine should be widely available and free,&#8221; pollster Maurício Moura told finance magazine Exame.&nbsp;</p> <p>&#8220;We are talking to everyone. But supply and demand are so imbalanced that, for now, we are just touching base and making sure that we will be able to bring vaccines to our patients as soon as they become available to private companies,” says Mr. Srougi, adding that his company has yet to open formal negotiations with any vaccine manufacturer.</p> <p>If the plan works, Dr. Consulta could become a crucial player in distributing jabs in some of Brazil&#8217;s biggest urban centers. After being forced to close units midway through 2020, the health tech has managed to reopen five medical centers and has 30 operating units.</p> <p>&#8220;Everybody will probably buy vaccines at the same price point, but the most efficient companies, with fewer costs and expenses, will be able to sell them at lower prices. And we have traditionally been able to provide people with the lowest prices,&#8221; Mr. Srougi tells <strong>The Braizilian Report</strong>. He expects that private firms would only be allowed to sell vaccines in the second half of 2021, at the earliest.</p> <h2>Dr. Consulta cashes in on telemedicine boom</h2> <p>If the pandemic forced Dr. Consulta to close some of its brick-and-mortar clinics, it also propelled the company into a household brand nationwide thanks to its telemedicine services — a feature the firm developed in just nine days. Patients from all over the country now have access to the platform, with the capacity to schedule up to 2,000 appointments every day, with 300 professionals from 30 different specialties.</p> <p>According to Mr. Srougi, half of the company&#8217;s new customers had their first experience with Dr. Consulta through telemedicine. He proudly states that 92 percent said they would use these services again. Since launching its online medical care platform, the company gave 110,000 telemedicine appointments which now make up for 10 percent of Dr. Consulta&#8217;s total business. During the peak of the coronavirus crisis, that share reached roughly 20 percent.</p> <p>“Patients with chronic conditions prefer to see doctors face to face. When issues are not urgent, they go with telemedicine services,” he says.</p> <p>Despite regulators still only allowing telemedicine as an emergency tool during the pandemic, Mr. Srougi says there is no turning back to the old days. He adds, however, that telemedicine is unable to replace examination methods such as lab tests.</p> <p>By using technology to cut costs and increase reach, Dr. Consulta managed to stay financially afloat. After a slump between March and April 2020, when Brazilians were still abiding by <a href="">social isolation rules</a>, patients started to return in May. By June, customer flows were back to normal levels, with the company ending the year with a positive balance of new clients.&nbsp;</p> <p>Even though they have not yet disclosed balance sheets from 2020, Mr. Srougi assures Dr. Consulta was profitable before the pandemic and managed to remain as such during the health crisis, despite increasing compensation for doctors and service costs at a pace four times slower than the overall healthcare sector.&nbsp;</p> <h2>High-growth ecosystem</h2> <p>The <a href="">Brazilian health tech sector experienced a boom</a> last year, with the arrival of new players such as health insurance startups Alice and senior citizen <a href="">healthcare provider Nilo</a>.</p> <p>Per think-tank Distrito, Brazilian health techs had raised USD 93.6 million from investors in the first ten months of 2020 — 49 percent more than the entirety of 2019.&nbsp;</p> <p>Only in 2017 did the sector attract more investment. However, on that occasion, 93 percent of the USD 141 million invested went to Dr. Consulta.</p> <p>Experts on Brazil&#8217;s startup ecosystem believe it is unlikely the country will see a health tech <a href="">unicorn</a> any time soon. However, if there is to be one, Dr. Consulta is by far the leading candidate, with a valuation of USD 457 million.&nbsp;</p> <p>“It would be fun to [become a unicorn], the team would be proud,” says Mr. Srougi. But he says the focus shall remain on providing better, faster services. And he has no plans of <a href="">taking the company public</a>.

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Natália Scalzaretto

Natália Scalzaretto has worked for companies such as Santander Brasil and Reuters, where she covered news ranging from commodities to technology. Before joining The Brazilian Report, she worked as an editor for Trading News, the information division from the TradersClub investor community.

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