Read the Conversation
EF: What inspired you to create ARC, and what is the benefit of working in a private consultancy versus being attached to a big company?
AC: After spending nearly thirty years working for various healthcare companies of different sizes and profiles, I began asking myself, what more can I add? When I talk about my purpose, it centers on my dedication to patients. From the very beginning, I knew I wanted to continue working in the healthcare and life sciences industry because I feel deeply connected to the process of patient care. This has always been clear to me.
Despite opportunities to shift to different segments, I remain genuinely happy and fulfilled in this field. After so many years in this industry, I recognized that working for a company, there are numerous guidelines and corporate strategies, often set by headquarters in Europe and the United States, which I realized were limiting my room for improvement within my current role. This realization led me to explore the consulting area. To validate this potential move, I sought feedback from seven different great leaders. These included Nilton Paletta, Antonio Britto, as well as Theo van der Loo, who was at that time part of Bayer, and Victor Mezei, a former GM of Pfizer. They knew me very well but were also tough enough to give me the appropriate, concrete and robust feedback that I needed.
Their unanimous advice emphasized the importance of my reputation, recognition, and legacy in the healthcare field. Their insights reaffirmed the significance of my work and the strong legacy I have built in the healthcare industry. This is important because we work with people’s health, and this is a sensitive matter. I did not want that entire Professional Transition to be perceived merely as something temporary, nor did I want to be seen as a typical consultant; instead, since the beginning, I aimed to establish a company that adds substantial value. During the second part of this personal assessment and decision-making process, which took around six extra months, I focused on setting up the strategic pillars of the company. I consulted with former professors from Harvard and engaged with my former university, among others.
Through these discussions, we established five strategic pillars: strategic planning, marketing due diligence, advisory board support, fractional management, and interim management. Interestingly, fractional management is not commonly used in Brazil, though it is advantageous and well-utilized in the rest of Latin America. Another point in this process was reaching out to various contacts and knocking on doors to find opportunities. Despite maintaining good relationships within the ecosystem and receiving a lot of help from different channels, there were no concrete proposals or agreements at that time.
This experience, starting eight years ago in 2016, taught me in a very challenging way what it takes to be a consulting company that adds value. First and foremost, I realized that the market is extremely sovereign. This means that no matter what you offer, it does not matter unless you are genuinely addressing the needs or evident requirements of the stakeholders. This understanding became the cornerstone of our approach, ensuring that we align our services with the real demands and expectations of the market.
Secondly, when considering what services to offer, we must not try to present too wide of a variety of services to our clients. Instead, offer a very clear and well-defined package to ensure it is better understood by your potential clients.
Thirdly, an interesting point not directly related to local or family companies is the nature of client interactions. When engaging with a client, especially during initial conversations or briefings, what they communicate is not always exactly what they want, and rarely is exactly what they need. This necessitates a very “therapeutic” approach, where you carefully understand the client, discern their true needs, and translate those into a concrete project. This approach was the very genesis of our consulting company. Once we began working, it was fascinating to see how we were able to identify and address the needs of healthcare companies.
Over time, new stakeholders emerged than just your standard Pharma or MedTech companies, such as private tech firms, government entities, and service companies. At the end of the day, although they have substantial funds, they sometimes struggle with implementing institutional plans effectively. This is where our expertise comes in.
We have had clients, including private equity funds, seeking our assistance with company evaluations, due diligence for acquisitions, and other strategic services. Currently, we are thriving, actively engaging with various sectors within the ecosystem. We are involved in government discussions and are part of the regulatory environment agenda, contributing to shaping the future of healthcare in our region. We are trying to transit all around those different cycles of the entire ecosystem.
EF: What is something that a lot of executives are inquiring about this year, and what is something that you think they should be looking at more closely?
AC: Firstly, clients often express a lot of interest in AI technology and how deeply it will affect them or their companies. There is a lot of talk about this, but what they are not always looking for is a long-term strategic plan. Having sat in a GM position, I understand that many executives focus primarily on the financial situation for the current year. However, they rarely have someone on their team providing a broader perspective and long-term vision. This is something clients do not typically ask for spontaneously, but when we bring it up, they clearly see how we can add considerable value.
I am talking about an external perspective, an unbiased vision, offering insights into what is happening in other companies and around the world. Even in large organizations, they may not have a complete understanding of global trends and developments within their own company. This external perspective is crucial. Leaders in healthcare companies and other stakeholders are deeply involved with both internal and external short-term challenges. Because of this, they often do not put enough effort into understanding the broader context and environment.
Strategic planning should involve identifying and conceptualizing what the future will look like in five or ten years. You move theoretically to that future point, look back, and ask, "What steps did we take to get here?" At the end of the day, leaders are not putting enough effort into seeing the bigger picture. This is fantastic in theory but at the end of the day, how can you do that? How does a general manager from a big or small company affiliated with Brazil ask for resources from headquarters for something that is not going to impact their results this year? It is all about the five-year goal. This is a challenge, and it is quite hard to obtain support.
There is an outstanding European company that was originally focused on one specific therapeutic area but is now making substantial revenue in another one. Despite their success, they recently called for a review of their strategic plan. Many fundamental issues were identified, yet no actions had been taken to address them. For example, their most important product, which generates billions at both local and global levels, is being prescribed by physicians with whom the company has had little to no direct contact. This highlights the difficulty in finding company leaders who truly understand and analyze the root causes of their good results. We are always questioning companies and trying to generate a reflection of what they can do better.
Throughout Latin America, but specifically in Brazil due to the size of the market, there are some intriguing points to consider. A writer once said that Brazil combines the best of Europe with the worst of Africa, highlighting its extremes. It is so vast and diverse that if you leave for a week and return, everything might have changed. Yet, if you come back after two years, nothing seems to have changed at all.
In the healthcare sector, Brazil represents a significant portion of the LATAM market, around 47% of the total. Another point, quoted from a former health minister, is that in Brazil, even the past is hard to predict. This constantly changing environment poses challenges for general managers reporting to headquarters in Europe or elsewhere. Today, the regulatory environment might indicate that registering a product takes two to three years. However, a change in the regulatory agency could suddenly alter that timeframe to anywhere between three to six months.
There are also many challenges presented by people’s perceptions; at the end of the day, we are what others think we are. The perception of an affiliate by headquarters can shape how a company and its leaders are viewed around the world. Therefore, managers must not only focus on company performance, and their company’s reputation to others, but also on how they and their affiliates are viewed by their own headquarters. There are so many challenges. Amidst this, they often lack the time for an external perspective on what they could do differently. Sometimes, it is not about investing more money and effort, but rather about reallocating resources and adopting different perspectives.
EF: Do you have any milestones that you want to share or any more details about your business that you want to include?
AC: Talking about our business model, I would say that we remain focused on expertise, commitment, and meeting the needs of healthcare companies across the region. We believe that we can add value in a robust, capable, and updated manner by offering the external perspective we have been discussing. Healthcare companies often lack the time for this perspective, and we aim to fill that gap.
We believe that anticipating and understanding potential scenarios and preparing ourselves to support our customers in the most agile and effective way, should be our top priorities. At ARC, we recognize the importance of staying ahead of changes in the healthcare ecosystem. This includes monitoring government movements, analysing changes in the regulatory framework, and incorporating new technologies like AI. We understand that to tackle the challenges of the health system effectively and efficiently, we need to think beyond traditional boundaries between healthcare and life science industry companies.
Our approach is built on a few key pillars: strategic prospect assessment, strategic definition and plan construction, and implementation and execution management. These pillars form the foundation of our projects, whether we are prospecting for new opportunities or assisting with better execution for established companies. For example, a non-Brazilian company looking to enter the Brazilian market would focus on prospecting and analysis, while a company already established here might need support with execution and implementation. Our goal is to be more prepared by working proactively, not just reacting to changes. It is not about being a guru, or magician, or using tarot cards; it is about practical, informed planning and execution in a more focused way.
A few years ago, I was working on an interesting project for a local company and had a discussion with the owner. Changing an owner's mindset is always a big challenge because they have already established their own approach. My position was that the best strategy for that specific company could not be copied from major companies like Bayer or Pfizer. Instead, the most effective strategy is one that is tailored to their unique context and needs. While references and models can be useful, simply adopting a pre-existing strategy is not the best choice. The most successful strategies are those developed with a psychological understanding of the company’s specific circumstances, goals, and challenges.
EF: Why is $1 invested in Brazilian healthcare worth more than in other countries?
AC: Firstly, from a macro perspective, growth in the health and life sciences market is largely going to come from pharma emerging markets. Among these, Brazil stands out as one of the most well-organized countries. The local sanitary agency, ANVISA is very well prepared and structured. As an example, ANVISA is currently dealing with significant initiatives like the Orbis project. Orbis involves mutual recognition of product registrations. This means that if the FDA approves a product for the American market, it is automatically approved by ANVISA in Brazil, and vice versa. This demonstrates how effectively ANVISA is working with high standards and established patterns from a regulatory point of view.
Structurally, Brazil is certainly the most well-organized country in Latin America in terms of infrastructure, supported by strong institutions. Brazil also presents relative financial stability in its government, and even more so in its banking sector.
Technology use across various segments and markets is also very advanced. Brazil has a favorable regulatory environment for our industry, a large population in need of healthcare, and a massive public health system. Although the private sector prevails in the market, the national health system is constitutionally mandated to provide healthcare. This generates trade-offs and essential discussions, especially concerning expensive treatments like orphan drugs.
Currently, Brazil offers a fertile environment for investment. The demand for healthcare innovations is high. For example, this week, we have the Hospitalar Fair, where the largest hospital system in Sao Paulo, Hospital das Clínicas, is launching an initiative called HUB Innova HC. This innovation hub aims to compete with private sector movements like those from Hospital Israelita Albert Einstein (Eretz BIO) and Hospital Sírio-Libanês. Given these dynamics, if I had extra funds, I would invest in Brazil. There are risks, but the opportunities here outweigh those in more developed or stagnated markets.
EF: Do you have any final message for your industry colleagues?
AC: I firmly believe that all of us, without exception, are crucial stakeholders in the healthcare discussion and agenda. We must understand that there is no longer space or room to behave as witnesses or spectators. We need to act proactively and participate in the discussion. This involves engaging in public health policies, constructively analyzing current models, identifying areas for improvement, observing global trends, and influencing our leaders to take appropriate action.
We have an implicit obligation to be responsible actors in this crucial issue. The challenges are immense, and the effort required is substantial, but the stakes are incredibly high. This concerns the future of humanity, our children, our families, and beyond. Despite the daunting nature of these challenges, we cannot give up.
