Painel Abramed 2021 - O DNA do Diagnóstico - inglês

The coverage rate by age group shows the growth in the participation of the population over30yearsofagecoveredbyprivatehealthcare plans and insurance, especially in the older population. Note that 44.9% of women and 35.1% of men aged 80 or more have a healthcare plan. In these age groups, the increase was 13 and 9.9 percentage points, respectively, in the last 10 years. This more expressive participation of this age group is justified by the need for more frequent monitoring and medical- hospital care, since the elderly population is generally affected by permanent or long-term chronic diseases. GRAPH COVERAGE RATE OF BENEFICIARIES OF HEALTHCARE PLANS BY AGE AND SEX (DEZ.11/JUL.21) 38 Source: Beneficiary Information System - SIB/ANS/MS-Tabnet. Extracted on September 20th, 2021. Prepared by Abramed. Total 23,9 25,9 44,9 80 years or more 35,1 35,0 70 to 79 years old 29,5 32,7 28,4 60 to 69 years old 28,8 31,1 33,2 50 to 59 years old 27,3 21,1 14,8 40 to 49 years old 30,1 15,8 21,3 30 to 39 years old 30,3 24,2 20,0 20 to 29 years old 19,0 15 to 19 years old 14,4 10 to 14 years old 15,9 5 to 9 years old 21,7 1 to 4 years old 24,8 Up to 1 years old 20,3 Male – DEC 2011 Male – JUL 2021 Female – DEC 2011 Female – JUL 2021 BRAZILIAN SUPPLEMENTARY HEALTH MARKET 101ABRAMED PANEL

The increase in the number of beneficiaries the number of beneficiaries is related to the above 35 years of age or older was expressive intergenerational pact. Generally speaking, between June 2001 and June 2011, especially this pact establishes that younger people, in among beneficiaries 80 years of age or older. theory healthier and less prone to use medical In this age group, the number of beneficiaries services, take on a financial portion slightly increased from 411 thousand in June 2001 to 863 above what would be appropriate for their thousand in June 2011. In the following decade it profile. In contrast, the older population pays a continued to grow, reaching 1.2 million by June slightly lower portion and thus allows them to 2021. remain in the healthcare plans. However, the ever-decreasing entry of the younger population An important insight regarding the variations endangers the long-term sustainability of the between age groups and the composition of health market. GRAPH VARIATION RATE (%) OF THE NUMBER OF BENEFICIARIES OF HEALTHCARE PLANS BY AGE GROUP IN % (JUN.01/JUN.11 AND JUN.11/JUN.21) 39 Source: Beneficiary Information System - SIB/ANS/MS-Tabnet. Extracted on September 20th, 2021. Prepared by Abramed. 80 years old or more 41,6 109,9 75 to 79 24,0 60,9 70 to 74 35,3 34,2 65 to 69 41,2 36,7 60 to 64 23,6 54,2 55 to 59 13,6 72,2 50 to 54 3,3 61,4 45 to 49 5,0 49,1 40 to 44 30,9 36,3 35 to 39 30,6 38,8 30 to 34 -2,1 74,7 25 to 29 -20,3 81,5 20 to 24 -17,2 45,8 15 to 19 -11,0 17,1 10 to 14 -4,3 23,1 23,3 5 to 9 9,4 2,1 30,7 1 to 4 Up to 1 year old -8,7 34,8 JUN 2011 – JUN 2021 JUN 2001 – JUN 2011 102 ABRAMED PANEL BRAZILIAN SUPPLEMENTARY HEALTH MARKET

MAP COVERAGE RATE OF BENEFICIARIES OF HEALTHCARE PLANS PER MUNICIPALI- TY ACCORDING TO STATE (JUL.21) 4 Sources: Beneficiary information system - SIB/ANS/MS-Tabnet. ExtractedonSeptember 1, 21. IBGE. Diretoria de Pesquisas - DPE - Coordenação de População e Indicadores Sociais - COPIS. Prepared by Abramed. Note: Estimates of the resident population in Brazilian municipalities with reference date on July 1st, 2021. Coverage rate in % 10 –| 15 15 –| 20 20 –| 25 25 –| 30 30 –| 40 40 –| 50 > 50 0 0 –| 5 5 –| 10 BRAZILIAN SUPPLEMENTARY HEALTH MARKET 103ABRAMED PANEL

The availability of resources and economy of scale are essential for the development of a sustainable healthcare network. 03.3 Hospitals and hospital beds IN JUNE 2021, THERE WERE AROUND 7,156 PRIVATE AND PUBLIC HOSPITALS (SPECIALISED, GENERAL AND DAY HOSPITALS) IN BRAZIL. This set of hospitals differs in several services in the more developed regions. aspects, especially in their legal sphere, in These areas have a greater proportion which there is a predominance of public of hospitals, laboratories, equipment hospitals (2,751); private for-profit hospitals and human resources, such as doctors, (2,573) and private non-profit hospitals nurses and other health professionals. (1,832), distributed mainly in the Southeast, In this arrangement, economies of scale, Northeast and South of the country. The availability of resources, quality of services organization of the healthcare network in and access are essential foundations for Brazil shows, like other economic activities, the formatting and sustainability of the a greater concentration of the supply of healthcare network. 104 ABRAMED PANEL HOSPITALS AND HOSPITAL BEDS

TABLE HOSPITALS BY LEGAL SPHERE ACCORDING TO REGION AND STATE (JUN.2021) 21 Source: Ministério da Saúde - Cadastro Nacional dos Estabelecimentos de Saúde do Brasil - CNES. Extracted on August 1st, 2021. Prepared by Abramed. Region State Total Share Private FOR Private NON Number profit profit of People NORTH Rondônia 602 7,4% Acre 98 1,0% 193 47 362 NORTHEAST Amazonas 26 0,4% 48 6 44 Roraima 116 1,3% 6 4 16 Pará 13 0,3% 25 3 88 Amapá 263 3,4% 2 - 11 Tocantins 15 0,3% 84 31 148 71 0,7% 3 2 10 25 1 45 2.136 27,3% 3,4% 727 265 1.144 Maranhão 281 1,8% 59 8 214 4,4% 47 9 61 Piauí 117 1,7% 85 59 160 2,0% 32 18 74 Ceará 304 5,1% 62 13 85 1,4% 104 40 166 Rio Grande do Norte 124 0,7% 38 13 35 6,7% 32 14 15 Paraíba 160 268 91 334 40,5% Pernambuco 310 9,5% 690 1,8% 165 Alagoas 86 7,9% 32 21,2% 190 Sergipe 61 303 16,1% Bahia 693 6,1% 225 3,4% 152 SOUTHEAST 2.505 6,6% 949 866 41 721 225 331 32 Minas Gerais 113 8,7% 41 40 Espírito Santo 498 1,3% 240 68 330 Rio de Janeiro 1.173 1,6% 443 427 37 São Paulo 4,1% 72 1,7% 198 SOUTH 1.074 313 536 23 475 100,0% 179 144 Paraná 272 87 144 2.751 Santa Catarina 327 47 248 38,4% Rio Grande do Sul CENTRE-WEST 839 391 118 24 53 Mato Grosso do Sul 114 77 23 216 35 Mato Grosso 172 74 7 Goiás 449 2.573 1.832 36,0% 25,6% Distrito Federal 104 BRAZIL 7.156 PROPORTION PER LEGAL SPHERE 105HOSPITALS AND HOSPITAL BEDS ABRAMED PANEL

The supply of hospital beds is concentrated mainly in the Southeast and Northeast of the country The number of hospital beds totaled 448,858 in June 2021, distributed in the public and private sphere, between specialized, general and day hospital. As in the distribution of the hospital network, most hospital beds are concentrated in the Southeast (181,757 - 40.5%), followed by the Northeast (122,408 - 27.3%), South (72,483 - 16.1%), Center-West (39,122 - 8.7%) and North (33,088 - 7.4%). 106 ABRAMED PANEL HOSPITALS AND HOSPITAL BEDS

TABLE NUMBER OF EXISTING INPATIENT BEDS PER LEGAL ENTITY ACCORDING TO REGION AND STATE (SPECIALIZED, GENERAL AND DAY HOSPITALS – JUN.2021) 22 Source: Ministério da Saúde - Cadastro Nacional dos Estabelecimentos de Saúde do Brasil - CNES. Extracted on August 1st, 2021. Prepared by Abramed. Region State Total Share Private FOR Private NON Number NORTH profit profit of People Rondônia 33.088 7,4% NORTHEAST Acre 4.607 1,0% 6.926 3.972 22.190 Amazonas 1.615 0,4% 1.128 401 3.078 Roraima 6.023 1,3% 116 234 1.265 Pará 1.279 0,3% 808 225 4.990 Amapá 15.185 3,4% 233 - 1.046 Tocantins 1.362 0,3% 3.909 2.756 8.520 3.017 0,7% 6 190 1.166 726 166 2.125 27,3% 122.408 3,4% 27.130 24.540 70.738 1,8% 3.352 745 11.137 Maranhão 15.234 4,4% 1.945 753 5.353 1,7% 3.953 5.429 10.235 Piauí 8.051 2,0% 1.540 1.500 4.785 5,1% 2.398 850 5.740 Ceará 19.617 1,4% 4.843 5.324 12.693 0,7% 2.072 1.578 2.802 Rio Grande do Norte 7.825 6,7% 1.020 935 1.358 6.007 7.426 16.635 Paraíba 8.988 40,5% 9,5% 44.203 Pernambuco 22.860 1,8% 8.647 7,9% 2.560 Alagoas 6.452 21,2% 12.017 20.979 Sergipe 3.313 16,1% 6,1% 13.470 Bahia 30.068 3,4% 6.785 6,6% 2.425 SOUTHEAST 181.757 4.260 78.685 58.869 42.818 8,7% 23.921 10.250 Minas Gerais 8.275 1,3% 14.124 3.301 2.414 Espírito Santo 35.353 1,6% 1.035 6.234 17.102 Rio de Janeiro 95.311 4,1% 2.070 45.229 29.103 São Paulo 1,7% 8.077 2.942 SOUTH 72.483 100,0% 45.630 13.383 27.583 105.853 13.426 7.372 Paraná 15.466 23,6% 9.828 3.213 Santa Catarina 29.434 22.376 2.798 Rio Grande do Sul CENTRE-WEST 39.122 9.380 15.618 3.224 1.427 Mato Grosso do Sul 5.686 1.675 3.605 3.037 7.309 Mato Grosso 7.350 1.444 3.277 Goiás 18.423 162.207 180.798 36,1% 40,3% Distrito Federal 7.663 BRAZIL 448.858 PROPORTION PER LEGAL SPHERE 107HOSPITALS AND HOSPITAL BEDS ABRAMED PANEL

03.4 Medical Demographics BRAZIL HAD AROUND 500,000 PHYSICIANS AND 547,344 REGISTRATIONS22 BY THE END OF 2020, WHICH REPRESENTS A RATIO OF 2.38 DOCTOR PER THOUSAND INHABITANTS. Out of this total, 61.3% have one or more country. This sharp growth was driven mainly specialist titles and 38.7% are general by the opening of new schools and openings practitioners. In the last decade there were in medical courses, according to the study more than 179,000 new doctors working in the Medical Demography in Brazil 2020. GRAPH EVOLUTION OF THE NUMBER OF PHYSICIANS (1920/2020) 40 Source: CFM - Medical Demography in Brazil 2020. Adapted by Abramed. Note: According to CFM, the data considers the number of physicians (individuals). 500.000 320.477 239.110 182.033 113.495 14.031 15.899 20.745 22.730 25.841 42.718 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 22 Considers the number of physicians (individuals) and the number of physician registrations (CRM registrations). The “Registration” data is available from 1951 onwards, the year the Medical Councils were created. 108 ABRAMED PANEL MEDICAL DEMOGRAPHY

Despite the growth rate in the last decade, the figures show that the proportion of doctors per thousand inhabitants differs greatly between the regions of the country, characterising a scenario of inequality in the distribution of these doctors, especially in municipalities in rural areas within or outside metropolitan regions (MR). TABLE DISTRIBUTION OF PHYSICIANS AND RATIO PER THOUSAND INHABITANTS BY REGION (2020). 23 Fonte: CFM - Demografia Médica no Brasil 2020. Adaptação Abramed. Nota: ¹Consideraonúmeroderegistrosdemédicos(inscriçõesnosCRMs). Region Physicians¹ Distributution Ratio per Rural within Urban within by region % thousand MR MR North 23.964 Northeast 96.303 inhabitants 0,19 2,60 Southeast 278.325 0,19 3,93 South 80.278 4,6 1,30 0,90 3,82 Centre-West 44.658 18,4 1,69 0,77 4,33 53,2 3,15 0,44 4,18 15,3 2,68 8,5 2,74 On the international scene, Brazil has a comparison presents limitations since each similar proportion of doctors to South country has specific health system and Korea and Poland, with around 2.4 doctors demographic characteristics. However, it per thousand inhabitants. However, it is is noted that some countries with a higher below the average proportion of 3.5 doctors proportion of elderly in the population, observed for selected countries of the such as France and the United Kingdom, Organization for Economic Cooperation have higher rates than those observed in and Development (OECD). Naturally, this Brazil. 109MEDICAL DEMOGRAPHY ABRAMED PANEL

GRAPH RATIO OF PHYSICIANS PER THOUSAND INHABITANTS - SELECTED OECD COUN- TRIES (2018 OR MOST RECENT YEAR). 41 Source: OECD Health Statistics 2020 - Frequently Requested Data. Prepared by Abramed. Greek 6,10 Austria Portugal 5,24 Norway 5,15 Lithuania 4,81 Switzerland 4,60 Germany Sweden 4,34 Denmark 4,31 Czech Republic 4,27 4,19 Spain 4,04 Italy 4,02 3,98 Iceland 3,89 Slovakia 3,52 OECD Average 3,52 Estonia 3,48 Hungary 3,38 New Zealand 3,35 3,30 LatviaI 3,22 Israel 3,21 3,18 Finland 3,17 Eslovenia 3,13 2,98 France 2,84 Belgium 2,72 Luxembourg 2,61 United Kingdom 2,59 Canada 2,49 United States 2,44 2,39 Chile 2,38 Japan 2,38 Mexico 2,18 South Korea 1,88 Brazil Poland Colombia Turkey JUN 2011 – JUN 2021 JUN 2001 – JUN 2011 110 ABRAMED PANEL MEDICAL DEMOGRAPHY

03.5 Total health expenditure HEALTH EXPENDITURE IN BRAZIL SHOUL TOTAL BETWEE R$668.5 BILLION AND R$683.7 BILLION IN THE YEAR 202123, IN NOMINAL TERMS. The increase in health expenditures is a In terms of the proportion of GDP, health worldwide phenomenon, driven, among expenditure in the country represents 9.2%, other factors, by the demographic transition considering the average percentage over the process, since the increase in the proportion last five years. Of this total, about 4% were of elderly in the population tends to raise government consumption expenditures and health expenditures. The elderly have a 5.2% family and private sector expenditures, on greater burden of chronic diseases and use average. This percentage as a total proportion health services more frequently. Studies24 of the GDP is similar to that of other more point out a positive association between developed countries, such as Australia (9%) age and health expenses, that is, the higher and the United Kingdom (9.9%). However, the the proportion of elderly in the population, composition of health expenditure in Brazil is the greater tends to be the share of health very distinct and has a significant participation expenses. of the private sector. GRAPH BRAZIL - HEALTH EXPENDITURE AS A SHARE OF GDP - TOTAL, PUBLIC AND PRIVATE (2010-2018) 42 Source: WHO – World Health Organization: 2000-2009. IBGE - Conta-satélite de saúde: Brasil: 2010-2017. Prepared by Abramed. 8,0 7,8 7,9 8,2 8,7 9,1 9,3 9,2 9,5 9,2 3,6 3,5 3,4 3,6 3,7 3,9 4,0 3,9 4,3 4,0 4,4 4,4 4,5 4,6 4,9 5,2 5,3 5,4 5,2 5,2 2010 2011 2012 2013 2014 2015 2016 2017 2018 Média 2018/2014 Private Government Total 23 Abramed Estimates. 24 Impact of ageing on healthcare expenditure in Supplementary Healthcare (2020-2031) 111TOTAL HEALTH EXPENDITURE ABRAMED PANEL

Brazil presents a proportion of public United States has the highest expenditure spending well below the other middle- on health as a proportion of GDP, with income countries and a private contribution a share of 16.8% in 2019. In the member well above when compared to several countries of the Organization for Economic developed countries. In the most recent Cooperation and Development (OECD), period, the public sector made 4.3% of spending averages 9.9% of GDP in 2020, expenditures, while the outlays of families with significant participation of the public and companies represent, on average, 5.2% sector in financing health expenditure, of of total spending on health in 2018. The approximately 7.6%. GRAPH HEALTH EXPENDITURE AS A SHARE OF GDP (2018 OR LATEST YEAR UP TO 2020) 43 Source: OECD Health Statistics 2020. Extracted on August 24th, 2021. Prepared by Abramed. Note: Ranked in descending order according to the percentage of public expenditure. United States (2019) 13,9 2,9 16,8 Germany (2020) 10,7 1,9 12,5 United Kingdom (2020) 10,4 2,3 12,8 France (2019) 9,3 1,8 11,1 Japan (2019) 9,3 1,8 11,0 Canada (2019) 7,6 3,2 10,8 OCDE Average (2020) 7,6 2,3 9,9 Switzerland (2019) 7,5 3,8 11,3 Italy (2020) 7,4 2,3 9,7 Portugal (2020) 6,6 3,5 10,1 Australia (2019) 6,5 9,4 9,4 Spain (2019) 6,4 2,7 9,1 Chile (2020) 5,9 3,5 9,4 Brazil (2018) 5,2 4,3 9,5 Israel (2019) 4,8 2,7 7,5 South Africa (2018) 3,6 4,7 8,3 Russia (2019) 3,4 2,2 5,6 Mexico (2020) 2,7 2,7 5,4 India (2018) 1,0 2,6 3,6 Private Public 112 ABRAMED PANEL TOTAL HEALTH EXPENDITURE

Health expenditure as a share of GDP increased considerably between the 1970s and the most recent period, from 4.6% to 9.9% on average for the OECD member countries. This accelerated increase in spending raises challenges, especially in the financing and financial sustainability of health systems. In several countries there are changes in the way healthcare is financed through new models of reimbursement and more active involvement of patients. In some cases, patients must bear part of the health care costs, through financial regulation mechanisms, such as coparticipation and deductibles. GRAPH EVOLUTION OF HEALTH EXPENDITURE AS A SHARE OF GDP IN % (1970-2020). 44 Source: OECD Health Statistics 2020. Extracted on August 24th, 2021. Prepared by Abramed. 18 16,8 16 United States 2019 14 12,8 12 United Kingdom - 2020 10 11,5 8 Germany -2020 6 11,1 France - 2019 4 2 11,0 Japan - 2019 1970 10,8 Canada - 2019 10,1 Portugal - 2020 9,7 Italia - 2020 9,5 Brazil - 2018 9,1 Spain - 2019 1980 1990 2000 2010 2018 2019 2020 113TOTAL HEALTH EXPENDITURE ABRAMED PANEL

Per capita health spending in Brazil went The faster from approximately US$ 756.3 in 2000 to US$ growth of per 1,531.0 in 2018, with an accumulated variation capita health of 102.4% in the period. On the other end of expenditure the scale is the United Kingdom, whose public compared to the health system inspired the creation of the SUS. evolution of the The NHS (National Health System) showed GPP is a global accumulated growth of 139.8%, while in other trend. developed countries, such as Japan and the United States, per capita spending grew 135.9% and 132.8%, respectively. The estimate is that health spending per capita will increase every year, but at a moderate growth rate, and that the existing disparities in the composition of public and private spending will persist in the coming decades25. GRAPH HEALTH EXPENDITURE PER CAPITA (PPP26 US$) – CUMULATIVE VARIATION ON SELECTED COUNTRIES IN % (2000-2018) 45 Source: WHO – World Health Organization. Prepared by Abramed. 150 139,8 100 United Kingdom 50 135,9 0 Japan 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 132,8 United States 114,0 Canada 108,6 France 102,4 Brazil 25 Past, present, and future of global health financing: a review of development assistance, government, out-of-pocket, and other privates pending on health for 195 countries, 1995–2050. 26 PPP (Purchasing power parity in US$). 114 ABRAMED PANEL TOTAL HEALTH EXPENDITURE

One worldwide trend is the faster growth of health spending per capita compared to the evolution of GDP and GDP per capita. Between 2000 and 2020, health spending grew at a faster pace. In Brazil, GDP accumulated a hike of 53.9% and per capita GDP 63.7%, while per capita health expenditures grew 102.4% in the same period. This phenomenon intensifies especially among the elderly population, in which we observe a reduction in income and progressive increase in health spending. GRAPH HEALTHCARE EXPENDITURE AND GDP PER CAPITA (PPP US$) AND GDP - CUMU- LATIVE VARIATION ON SELECTED COUNTRIES IN % (2000-2020) 46 Sources: WHO – World Health Organization. World Bank | World Development Indicators database. Prepared by Abramed. Note: Annual percentage growth rate of GDP at market prices based on constant local currency. Aggregates are based on constant 2010 U.S. dollars. UNITED STATES 74,9 132,8 UNITED KINGDOM 46,1 139,8 SPAIN 143,1 JAPAN 28,5 70,0 135,9 FRANCE CANADA 28,0 77,5 57,2 BRAZIL 108,6 18,9 77,1 21,6 114,0 63,7 102,4 60,2 63,7 53,9 Health expenditure per capita GDP per capita GDP 115TOTAL HEALTH EXPENDITURE ABRAMED PANEL

Incorporation of diagnostic procedures THE LIST OF PROCEDURES AND EVENTS IN SUPPLEMENTARY HEALTH ESTABLISHES THE MANDATORY MINIMUM COVERAGE THAT HEALTHCARE PLANS MUST OFFER TO PREVENT AND TREAT DISEASES. TABLE LIST OF PROCEDURES AND EVENTS IN HEALTH - NEW DIAGNOSTIC PROCEDURES2021 (ANS) 24 Source: ANS - Rol de Procedimentos e Eventos em Saúde 2021 - Annex I (RN 465/2021). Adapted by Abramed. Procedure Subgroup – 2021 List Group – 2021 List Capsule EndoscopyEnteroscopy Diagnostic or Interventional Endoscopes of the intestine (DUT) Enteroscopy Laboratory Procedures Interferon Gamma Release Immunology Assay(DUT) Laboratory Procedures Coprology Laboratory Procedures Calprotectin, Fecal Pathological and Cytopathological Dosage(DUT) Biochemistry (Blood, Urine and Anatomy sFlt/PLGF test ratio (DUT) Other Materials) Genetics Procedures Diagnostic Imaging Methods PD-L1–Detection by Genetics Immunohistochemical Molecular Genetics techniques (DUT) FLT3–Mutation research (DUT) CT scans Optical Coherence Tomography (DUT) Molecular Genetics DNA molecular analysis (DUT) 116 ABRAMED PANEL INCORPORATION OF DIAGNOSTIC PROCEDURES

This is an attribution of the National The incorporation of new health technologies Supplementary Health Agency (ANS) as and the definition of rules for their use in established in Law 9.656/98. Periodically, the supplementary healthcare are regulated by ANS publishes the list of procedures that will Normative Resolution (RN) No. 470/2021 have mandatory coverage by healthcare plans (as of October 1st, 2011), establishing the and insurers, through successive update cycles procedural routine for updating the List of of the List of Procedures. Procedures. Considering that new health Chapter – 2021 List Plan Segmentation High complexity Usage procedures guideline Diagnostic and Therapeutic (nº) Procedures No 141 No 140 Outpatient, inpatient with or No 134 without obstetrics and reference No 139 plan segmentation High complexity 146 142 No 69 High complexity 110 117INCORPORATION OF DIAGNOSTIC PROCEDURES ABRAMED PANEL

technologies are continuously incorporated New technologies play an essential role in into care practice, the process of updating the quality, speed, and accuracy of diagnosis, the List of Procedures will now be permanent also making it possible to define and and not every two years, as previously set monitor treatments, increasing the chances forth in RN 439/2018. The adoption of a new of controlling and curing diseases. Another technology will bring benefits on a large scale, important factor is that new technologies, with efficiency for the diagnosis, treatment through predictive and non-invasive exams, and clinical outcome of patients, and mainly, increasingly value the well-being of patients, in convergence with the sustainability of the through health promotion and disease healthcare market. prevention. However, the incorporation of new procedures in health is often pointed The procedures incorporated in the List are out as one of the main factors that drive the those that offer collective gains and better growth of healthcare expenses in the world, clinical results in order to contribute to the according to several authors and studies27. development of health actions in Brazil. The inclusion of new technologies is preceded by It is undeniable that the technological a careful evaluation process, in accordance advance applied to healthcare contributes with national health policies, the principles to the increase in life expectancy, and the of Evidence-Based Health (EBH) and the benefits generated by this advance justify its availability of resources through the use incorporation in the healthcare cycle. This of the principles of Health Technology advance is transforming healthcare and the way Assessment (HTA). In this process, it is doctors relate to patients, as they increasingly essential to maintain the sector’s economic- value the patients’ well-being. The care in the financial balance and the transparency of statements not to generate movements that administrative practices. impact on the reduction per se of diagnostic tests and procedures requires rationale focused In 2021, RN no. 465/2021, in effect as of April on the health outcome; otherwise, it may cause 1st, 2021, updated the List of Procedures and irreversible damage to the patients’ health. Health Events and established the eligibility of 69 coverages, 50 of which are related to The incorporation of the endoscopic capsule medications and 19 are related to procedures enteroscopy exam, as well as the others added such as exams, therapies and surgeries. to the 2021 list, corroborates the constant Among laboratory procedures, six diagnostic need to update and adopt technical criteria procedures were included, all of which have and, mainly, the gains obtained through the Guidelines for Use (DUT), which establish adoption of these new technologies in the the criteria to be observed in order to ensure supplementary health sector. coverage. Other two procedures had changes in the DUT with expansion or inclusion of coverage. 27 BALFOUR et al., 2004; BECKER, 2004; CAREY, 2003; HOF, 2003; VASSALO, 1997. Is Technological Change In Medicine Worth It? 118 ABRAMED PANEL INCORPORATION OF DIAGNOSTIC PROCEDURES

Capsule endoscopy enteroscopy CAPSULE ENDOSCOPY ENTEROSCOPY (EC) IN PATIENTS WITH GASTROINTESTINAL BLEEDING OF OBSCURE ORIGIN HAS BEEN ADDED TO THE 2021 LIST WITH THE AIM OF PROVIDING THE INFORMATION NECESSARY TO ESTABLISH A MORE ACCURATE DIAGNOSIS NOT EVALUATED BY TRADITIONAL METHODS (UPPER DIGESTIVE ENDOSCOPY AND COLONOSCOPY), ALLOWING ENDOSCOPIC ACCESS TO THE ENTIRE LENGTH OF THE SMALL BOWEL. As a result of the economic evaluation, the incremental impact of the incorporation of the endoscopic capsule for the scenario of conservative dissemination of the technology estimated in the accumulated period of five years, was a reduction of R$ 2.2 million, which represents an average savings of R$ 431 thousand per year. Considering the more intense dissemination scenario, the reduction was of R$ 6.2 million (-R$ 1.2 million per year) and in the scenario with the possibility of performing the test in 30% of the patients it was of R$ 1.3 million (increase of R$ 2.3 million per year). 119INCORPORATION OF DIAGNOSTIC PROCEDURES ABRAMED PANEL

120 ABRAMED PANEL

The Diagnostic Medicine Sector 04 121ABRAMED PANEL

04 THE DIAGNOSTIC MEDICINE SECTOR THE SERVICES OF THE DIAGNOSTIC MEDICINE SECTOR CONTRIBUTE TO MAXIMISING THE PROVISION OF CARE IN TODAY’S COMPLEX HEALTHCARE SYSTEM. THE SECTOR INCLUDES A RANGE OF MEDICAL SPECIALTIES, WITH DIFFERENT SPECIALTIES, INCLUDING CLINICAL PATHOLOGY, NUCLEAR MEDICINE, MEDICAL GENETICS, RADIOLOGY AND DIAGNOSTIC IMAGING. Imaging laboratory services and other services associated with the diagnostic process are the most economical and least invasive source of objective information about the patient’s health status and help in the prevention and diagnosis 122 ABRAMED PANEL THE DIAGNOSTIC MEDICINE SECTOR

The diagnostic medicine sector is continuously innovating and developing through more efficient processes and new technologies. of diseases, improving the results of treatments, Diagnostic medicine plays a fundamental role ensuring patient safety and fulfilling the on the patient care cycle even in the face of essential functions of health surveillance. It is a structural and technical challenges, driven by sector that innovates and develops continuously regulatory and legislative requirements, raising through processes and technologies, being able the cost of compliance for the sector each year. to carry out high quality and accurate diagnostic The incorporation of new technologies suitable tests in accordance with the epidemiological and necessary for addressing various diseases situation of the country. Therefore, the and processing tests is another recurring barrier companies continuously invest in research in the sector, even if this leads to better results. and development of molecular diagnostic Nevertheless, the diagnostic medicine sector solutions, in digital transformation, in process stands out in the Brazilian private healthcare automation, in the integration of electronic market, considering the various socioeconomic, medical record systems, among others, with the demographic, and epidemiological factors that objective of providing high quality services and foster the growth and development of this contributing to better health care. sector. 123THE DIAGNOSTIC MEDICINE SECTOR ABRAMED PANEL

04.1 DIAGNOSIS AND THERAPY SUPPORT SERVICE (SADT) and diagnostic support units IN BRAZIL THERE ARE 26,545 DIAGNOSIS AND THERAPY SUPPORT SERVICE (SADT) UNITS, ACCORDING TO DATA FROM THE NATIONAL REGISTER OF HEALTH ESTABLISHMENTS OF THE MINISTRY OF HEALTH (CNES/MS), AT THE END OF JUNE 2021. This number includes the units that operate The sector has in the diagnostic and therapeutic support experienced segments, where activities that assist in faster growth in the diagnostic process or complement the the North, South, treatment and rehabilitation of the patient and Northeast are carried out. As mentioned, the regional of the country distribution of this number of units is directly over the last ten related to socioeconomic conditions and the years. availability of health services. The Southeast region holds 11,209 units and represents 42.2% of the existing total nationwide, consisting mainly of private for-profit entities. The sector’s pace of expansion was more intense in absolute numbers in the Southeast, with an increase of 3,574 units over the last ten years, rising from 7,635 in June 2011 to 11,209 in June 2021. In relative terms, the North (65.8%), South (62.4%) and Northeast (51.9%) experienced faster growth over the same period. 124 ABRAMED PANEL THE DIAGNOSTIC MEDICINE SECTOR

TABLE DIAGNOSTIC AND THERAPEUTIC SUPPORT SERVICE UNITS (SADT), BY REGION AND STATE (JUN.2021) 25 Source: Ministry of Health - Brazilian National Register of Health Establishments - CNES. Extracted on August 1st, 2021. Prepared by Abramed. Region State Total Participation Private FOR- Privado NON- Public -profit -profit North 1.336 5,0% 136 312 1,2% 1.185 15 18 Rondônia 70 0,3% 289 5 8 123 0,5% 62 -- 22 Acre 0,1% 98 3 2 Amazonas 19 1,9% 71 492 0,2% 16 1 4 Roraima 53 1,0% 415 6 11 267 18,1% 49 -- 576 Pará 4.803 1,9% 256 -- 62 Amapá 506 4.191 36 1,5% 443 1 159 Northeast Tocantins 402 1,8% 38 Maranhão 490 1,2% 238 5 36 307 2,3% 444 8 127 Paiuí 610 2,8% 271 -- 55 741 1,0% 481 5 24 Ceará 268 0,6% 680 6 8 Rio Grande do 165 5,0% 243 1 67 Norte 1.314 42,0% 155 2 440 Paraíba 11.209 14,4% 1.236 11 157 3.830 2,7% 10.502 267 10 Pernambuco 721 7,1% 3.606 67 75 1.882 18,0% 701 10 198 Alagoas 4.776 25,2% 1.779 28 194 6.699 9,0% 4.416 162 63 Sergipe 2.381 5.9% 6.345 160 36 1.575 10,3% 2.289 29 95 Bahia 2.743 9,4% 1.494 45 150 2.498 1,6% 2.562 86 32 Southeast 430 2,4% 2.315 33 63 650 4,2% 388 10 49 Minas Gerais 1.117 1,1% 578 9 6 301 100,0% 1.056 12 1.496 Espírito Santo 26.545 293 2 5,6% Rio de Janeiro 24.538 511 São Paulo 92,4% 1,9% South Centre-West Paraná Santa Catarina Rio Grande do Sul Mato Grosso do Sul Mato Grosso Goiás Distrito Federal Brazil Proportion by Legal Sphere 125THE DIAGNOSTIC MEDICINE SECTOR ABRAMED PANEL

GRAPH DIAGNOSTIC AND THE RAPEUTIC SUPPORT (SADT) BY REGION (JUN.11/JUN.21) 47 Source: Ministry of Health - Brazilian National Register of Health Establishments - CNES. Extracted on August 1st, 2021. Prepared by Abramed. Southeast South Northeast Centre-West North 3.574 2.573 1.692 848 530 46,8% 62,4% 54,4% 51,4% 65,8% 11.209 7.635 6.699 4.803 4.126 3.111 Southeast 1.650 2.498 1.336 806 South Centre-West Northeast North Jun/11 Jun/21 The increase in the number of SADTs has especially happened towards municipalities in the interior of the country and metropolitan regions. Therefore, it filled a gap in the offer and availability of diagnostic services, beyond the more economically developed regions. Despite this advance, many municipalities have no SADT unit. In the last ten years, the number of municipalities without any SADT units has gone from 2,907 (52.2%) to 2,005 (36%). The dark areas represent the municipalities with the presence of units in June 2011 and June 2021. 126 ABRAMED PANEL THE DIAGNOSTIC MEDICINE SECTOR

MAP MUNICIPALITIES PRESENTING DIAGNOSTIC AND THERAPEUTIC SUPPORT SERVICE FACILITIES (SADT) (JUN.2011/JUN.2021) 5 Source: Ministry of Health - Brazilian National Register of Health Establishments - CNES. Extracted on August 1st, 2021. Prepared by Abramed. 2011 2021 JUN 2011 JUN 2021 0 2.907 (52,2%) 2.005 (36,0%) >= 1 2.663 (47,8%) 3.565 (64,0%) The availability of healthcare facilities Quality and is concentrated in municipalities with a scale economies population above 100,000 inhabitants. In are extremely the healthcare sector, as in various economic relevant for the segments, scale economies are extremely sustainability relevant for the maintenance and sustainability of laboratory of laboratory and imaging activities. For this and imaging reason, a greater supply of health services is seen activities. in these more highly populated regions. It is noted that 55.2% of the SADT units; 58% of the 127THE DIAGNOSTIC MEDICINE SECTOR ABRAMED PANEL diagnostic support units; 51.7% of the hospitals; and 69.4% of the clinics, are distributed in a set of 326 municipalities in the country. Region- -wise, the Southeast accounts for 42.2% of the total number of SADT units and 44.1% of diagnostic support units.

TABLE DISTRIBUTION OF SADT UNITS, DIAGNOSTIC SUPPORT, HOSPITALS AND CLINICS ACCORDING TO POPULATION SIZE AND REGION (NUMBER AND % DISTRIBUTION - 26 BRAZIL–JUN.21) Source: Ministry of Health - Brazilian National Register of Health Establishments - CNES. Extracted on Septem- ber 1st, 2021. Prepared by Abramed. Inhabitants SADT % Diagnostic % Hospitals % Consulting % Support offices Up to 5.000 inhabitants 591 Units 0,4 2,5 654 1,1 From 5.001 to 10.000 1.156 2,2 356 1,8 117 5,5 1.878 3,2 4,4 797 4,0 392 12,3 5.307 11,4 From 10.001 to 20.000 2.184 8,2 1.537 7,7 880 17,2 18.701 14,5 16,4 3.037 15,2 1.234 10,8 23.739 35,3 From 20.001 to 50.000 4.362 13,5 2.654 13,3 770 21,9 57.967 34,1 28,0 5.541 27,8 1.565 29,9 55.968 100 From 50.001 to 100.000 3.591 27,2 6.030 30,2 2.138 100 164.194 100 19.952 100 7.156 From 100.001 to 500.000 7.443 More than 500.000 7.218 Grand Total 26.545 Centre-West 2.498 9,4 2.109 10,6 839 11,7 11.543 7,0 Northeast 29,8 16.924 10,3 North 4.803 18,1 3.368 16,9 2.136 8,4 4.921 3,0 Southeast 35,0 87.453 53,3 South 1.336 5,0 961 4,8 602 15,0 43.353 26,4 Brazil 11.209 42.2 8.804 44,1 2.505 100 164.194 100 6.699 25,2 4.710 23,6 1.074 26.545 100 19.952 100 7.156 The number of units with the exclusive purpose of Diagnostic Support (Clinical Analyses and Diagnostic Imaging Laboratories) totaled 19,952 in June 2021. This number does not include the other diagnostic and therapeutic support services (SADT) presented above, classifiedintheNationalHealthEstablishments Register (CNES), such as: outpatient clinics, rehabilitation units, health support houses, psychosocial care units, among others. As a result, only the number of laboratory and imaging units is presented, considering the region, federative unit and legal nature, which represents 75.2% of the units identified as SADTs. 128 ABRAMED PANEL THE DIAGNOSTIC MEDICINE SECTOR

TABLE DIAGNOSTIC SUPPORT UNITS, BY REGION AND STATE (JUN.21) 27 Source: Ministry of Health - Brazilian National Register of Health Establishments - CNES. Extracted on September 1st, 2021. Prepared by Abramed. Region Stado Total Participation Private FOR- Private NON- Public -profit -profit North 961 4,8% 5 261 13% 889 67 4 Rondônia 62 0,3% 247 10 –– Acre 97 0,5% 56 6 –– Amazonas 0,1% 86 11 –– 18 1,7% 1 Roraima 336 0,1% 18 –– –– Pará 19 0,8% 303 32 –– Amapá 168 16,9% 17 2 30 3.368 1,8% 256 6 –– Northeast Tocantins 353 3.131 207 Maranhão 0,9% 338 15 3 172 1,9% 6 Paiuí 374 1,3% 157 12 1 255 2,1% 348 20 1 Ceará 410 3,2% 236 18 8 Rio Grande do 648 1,0% 365 44 –– Norte 204 0,6% 600 40 1 Paraíba 119 4,2% 188 16 10 Pernambuco 833 44,1% 113 5 112 8.804 14,8% 786 37 15 Alagoas 2.949 3,4% 8.438 254 6 669 7,2% 2.842 92 19 Sergipe 1.439 18,8% 656 7 72 Bahia 3.747 23,6% 1.1.372 48 73 6.699 9,4% 3.568 107 25 Southeast 1.870 5,2% 4.536 101 18 1.040 9,0% 1.806 39 30 Minas Gerais 1.800 10,6% 1.002 20 19 2.109 1,7% 1.728 42 4 Espírito Santo 342 2,5% 2.004 86 7 Rio de Janeiro 508 4,8% 319 19 7 São Paulo 949 1,6% 466 35 1 310 100,0% 916 26 239 South 19.952 303 6 1,2% 18.998 715 Centre-West Paraná 95,2% 3,6% Santa Catarina Rio Grande do Sul Mato Grosso do Sul Mato Grosso Goiás Distrito Federal Brazil Proportion by Legal Sphere 129THE DIAGNOSTIC MEDICINE SECTOR ABRAMED PANEL

MAP MUNICIPALITIES WITH A DIAGNOSTIC SUPPORT FACILITY (SADT) (JUN.2021) 6 Source: Ministry of Health - Brazilian National Register of Health Establishments - CNES. Extracted on September 1st, 2021. Prepared by Abramed. 0 >=1 The Annual Social Information Report of the diagnostic medicine market. Thus, it is (RAIS)28 talso allows the number of health possible to quantify the establishments related establishments in Brazil to be counted, to diagnostic complementary service activities providing a set of variables relevant to and subclasses: pathological and cytological understanding the composition and evolution anatomy laboratories, clinical laboratories, 28 Established by Decree no. 76.900, of 12/23/75. Ministry of Economy / Special Secretary of Social Security and Labor. 130 ABRAMED PANEL THE DIAGNOSTIC MEDICINE SECTOR

GRAPH NUMBER OF ESTABLISHMENTS (0 TO 30,000) ENGAGED IN SUPPLEMENTARY DIAGNOSTIC SERVICE ACTIVITIES29 (2010/2020) 48 Source: RAIS Establishment - Ministry of Labor. Access on April 1st, 2021. Prepared by Abramed. Clinical Labs 12.565 Pathological and cytological 1.287 anatomy laboratories Diagnostic Imaging Services 6.037 CT Scanning Services 476 467 Diagnostic services by 592 graphic register Diagnostic services by optical methods MRI services 341 754 Dialysis, chemotherapy, radiotherapy, hemotherapy, lithotripsy Human tissue and cell 22 banking services Previously unspecified 1.910 activities Total 24.452 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 tomography services, among others. The most recent data available comprise the period 2019. However, for the year 2020, they were estimated considering the linear trend of the sector. 29 Considers the National Business Registry (CNPJ) as exclusive for the relevant activities. 131THE DIAGNOSTIC MEDICINE SECTOR ABRAMED PANEL

The evolution of the number of establishments diagnostic imaging service units. In the last related to diagnostic activities is influenced, ten years, the fastest growth in absolute terms especially, by innovation and technological has been observed in clinical laboratories, with advances. This evolution allows for increasingly more than 4.3 thousand new establishments, earlier detection and even the probability and in diagnostic imaging services, with 2.6 of a person developing a certain disease. thousand new units. According to RAIS data, there were around 24,500 establishments related to diagnostic In relative terms, growth was more intense in and therapeutic services at the end of 2020. Of diagnostic services by graphic records (graphic this total, 12,600 (51.4% of all establishments) methods), with 209.3% increase between 2010 are clinical laboratories and 6,000 (24.7%) are and 2020. These services include several tests GRAPH EVOLUTION OF THE NUMBER OF ESTABLISHMENTS ENGAGED IN DIAGNOSTIC AND THERAPEUTIC ACTIVITIES IN % (2010 = BASE 100 - CUMULATIVE VARIATION 2010/2020) 49 Source: RAIS Establishment - Ministry of Labor. Accessed on April 1st, 2021. Prepared by Abramed. Note: Entries in descending order in relation to the variation between 2011 and 2020. 250 200 209,3 150 150,0 100 96,0 85,8 75,4 60,3 50 50,8 31,3 0 -8,8 -36,3 -50 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2010 Diagnostic services by graphic record Diagnostic services using optical methods Diagnostic imaging services Diagnostic imaging services Dialysis services, Clinical Labs chemotherapy, radiotherapy hemotherapy, lithotripsy Tomography Services Cell and Tissue Bank Services Pathological and cytological anatomy labs MRI services Previously unspecified activities 132 ABRAMED PANEL THE DIAGNOSTIC MEDICINE SECTOR

for diagnosing heart diseases, including resting diagnostic imaging segment, the increase electrocardiogram, exercise stress test, high- was greater in the Northeast (166.7%), North resolution electrocardiogram, Holter, ABPM (126.2%) and Centre-West (115%) over the same (ambulatory blood pressure monitoring), period. This growth towards the interior of cardiopulmonary test and Tilt-Test30. the country is directly associated with the number of beneficiaries of healthcare plans Regionally, there was an increase in the and the offer of healthcare services to the number of clinical laboratories in the North population. (86.1%), Northeast (76.3%) and Centre-West (69.5%) regions over the last ten years. In the TABLE NUMBER OF ESTABLISHMENTS RELATED TO DIAGNOSTIC COMPLEMENTATION SERVICES ACTIVITIES (2010/2020) 28 Source: RAIS Establishment – Ministry of Labor. Accessed on April 1st, 2021. Prepared by Abramed. Region Clinical Labs Diagnostic Pathological Tomography MRI services imaging and Services North cytological Northeast anatomy labs Southeast South 2010 2020 2010 2020 2010 2020 2010 2020 2010 2020 Centre-West 411 765 130 294 79 99 13 26 8 11 Total 48 123 39 64 1.600 2.821 409 1.091 335 339 140 183 142 159 North 64 89 49 72 Northeast 3.235 4.996 1.520 2.819 640 515 51 55 22 35 Southeast 316 476 260 341 South 1.870 2.756 675 1.099 243 211 Centre-West Total 724 1.227 346 744 114 123 7.840 12.565 3.080 6.047 1.411 1.287 ∆ (abs) ∆ (%) ∆ (abs) ∆ (%) ∆ (abs) ∆ (%) ∆ (abs) ∆ (%) ∆ (abs) ∆ (%) 354 86,1 164 126,2 20 25,3 1.221 76,3 682 166,7 4 1,2 13 100,0 3 37,5 1.761 54,4 1.299 85,5 -125 -19,5 886 47,4 424 62,8 -32 -13,2 75 156,3 25 64,1 503 69.5 398 115,0 9 7,9 4.725 60,3 2.967 96,3 -124 -8,8 43 30,7 17 12,0 25 39,1 23 46,9 4 7,8 13 59,1 160 50,6 81 31,2 30 https://www.bp.org.br/diagnosticos/exames/exames-de-metodos-graficos 133THE DIAGNOSTIC MEDICINE SECTOR ABRAMED PANEL

Small family businesses (up to nine employees) Small family are predominant in the diagnostic medicine businesses are sector.Onaverage,71.8%ofthecompaniesinthe still predominant segments analyzed have up to nine employees in the diagnostic and less than 1% have more than 100 employees. medicine sector. This proportion has remained practically stable over the past 10 years, except for MRI services, where there has been an increase in the number of companies with more employees. This increase may be associated with the increasing regulatory demands in the maintenance of radiology activities, especially those related to the class councils of professionals working in these areas. TABLE STRUCTURE OF DIAGNOSTIC MEDICINE COMPANIES BY NUMBER OF EMPLOYEES (2010/2020) 29 Source: RAIS Establishment - Ministry of Labor. Access on April 1st, 2021. Prepared by Abramed. Size Clinical Labs Diagnostic Pathological Tomography MRI Services (employees) imaging and Services cytological 2010 2020 2010 2020 anatomy labs 2010 2020 2010 2020 220 309 2010 2020 23 19 20 16 0 employees 518 562 1.612 3.256 81 58 157 216 153 106 608 1.206 743 577 73 114 40 66 From 1 a 4 4.425 6.782 378 702 298 290 45 69 23 80 202 410 173 237 17 43 20 51 From 5 to 9 1.515 2.650 44 104 92 99 -- 13 4 17 12 39 19 17 11 -- 3 From 10 to 19 818 1.484 38 48 -- 1 -- -- -- 1.2 11 -- -- -- 2 From 20 to 49 404 740 1 -- -- -- -- -- -- -- 3.080 6.037 -- -- 316 476 260 341 From 50 to 99 106 245 1.411 1.287 From 100 to 249 42 82 From 250 to 499 9 12 From 500 to 999 2 5 1.000 or more 1 3 Total 7.840 12.565 134 ABRAMED PANEL THE DIAGNOSTIC MEDICINE SECTOR

Trends and challenges in the diagnostic medicine sector THE OUTLOOK FOR THE DIAGNOSTIC MEDICINE SECTOR IN BRAZIL IS PROMISING, EVEN IN THE FACE OF ECONOMIC, REGULATORY AND LEGISLATIVE CHALLENGES. Every year it is one of the most evolvong and New technologies innovative sectors in the search for technogies enable diagnostic that are capable of improving and enhancing tests to be the quality of diagnosis in the healthcare area. carried out with The advent of technology allows diagnostic quality and tests to be carried out on a large scale, in precision less time, with better quality and precision, avoiding waste and escalating healthcare 135THE DIAGNOSTIC MEDICINE SECTOR ABRAMED PANEL costs. Numerous factors have driven the sector’s growth, including the use of artificial intelligence and digital processes to support diagnosis, the modernisation of equipment and new laboratory technologies, the use of telemedicine and subspecialties on a large scale, innovations in the area of genetics and integrated healthcare networks, among others, have driven the sector’s growth and development. These trends point to a scenario of sectorial strengthening and development in the coming years, with the emergence of several health startups focused on solutions in the various segments that permeate patient care.

Artificial intelligence supporting diagnostics DIAGNOSIS ASSISTED BY ARTIFICIAL INTELLIGENCE (AI) CAN CONSIDER ALL AVAILABLE MEDICAL EVIDENCE, IDENTIFY PATHOLOGIES ACCURATELY AND PROVIDE PERSONALIZED CARE, IMPROVING TREATMENT RESULTS IN THE FACE OF THE EXISTENCE OF NUMEROUS HEALTH DATA, STILL BARELY EXPLORED. The ability to store, retrieve and analyze health making for planning, management, data electronically is expected to increase measurement and learning purposes. accuracy by considering all available data and The use of analytics has helped health information from similar tests, rather than professionals to predict, diagnose and considering results in isolation and not in treat several diseases, reducing costs comparison. Artificial intelligence software and improving the quality of the service is capable of incorporating family history, provided. Some estimates indicate that risk factors, and results of various tests to the application of data mining techniques aid in the diagnosis of numerous diseases. In can generate savings of US$ 450 billion per this way, data analysis techniques will enable year in the healthcare system in the United improvements in the documentation process States.31 According to Allied Market and access to scientific evidence, as well as the Research’s report Healthcare IT Market development of prediction and anticipation by Product Type and End User: U.S, the models for hospital events. Finally, it will allow healthcare IT market in the United States the sharing of knowledge and new discoveries was valued at about US$61 billion in 2017 in medicine. and is expected to reach approximately US$149.2 billion by 2025, with an average The information production considering growth rate of 11.7% per year. This increase qualitative and quantitative aspects demonstrates the relevance of artificial requires the efficient use of a set of data. intelligence systems in the process of This will enable evidence-based decision diagnosis and quality in patient care. 31 A Systematic Review on Healthcare Analytics: Application and Theoretical Perspective of Data Mining 136 ABRAMED PANEL THE DIAGNOSTIC MEDICINE SECTOR

Data security in healthcare THE GENERAL DATA PROTECTION LAW (LGPD - LAW NO. 13.709/18) CAME INTO FORCE IN SEPTEMBER 2020 AND REPRESENTS A NEW REGULATORY CHALLENGE IN THE BRAZILIAN HEALTHCARE MARKET. Inspired by the European General Data In the health sector, the anticipation is Protection Regulation (GDPR), the LGPD that access to the data necessary for the should provide greater transparency, security provision of health services will be obtained and reliability for all players and users of with the authorization or express consent health services. One of the characteristics of of patients, considering the advances this regulation is the requirement that the obtained in the various areas of health exchange of data of European citizens only through the use of this information. Part of be made with countries with compatible the scientific advance has been constructed legislation. Hence also the need for Brazil based on the set of diverse information, to have a similar law, under penalty of this mainly epidemiological. Likewise, planning affectingitseconomicactivities.Thelegislation the offer of the most appropriate health in Brazil regarding the protection of personal services given the socioeconomic profile data is not recent. Since the enactment of the of each region is only possible through the Federal Constitution, in the 1980’s, and the analysis of this data. The new diagnostic emergence of consumer protection laws, there equipment is capable of generating a large have been regulations dealing with several volume of information which is promptly specific aspects of the protection of this type analyzed by software that consolidate and of information. In this sense, the new law interpret thousands of images and reports. consolidated the protections and rights that Consequently, diagnostic medicine delivers were previously dealt with in a fragmented results with greater accuracy and precision, manner in dozens of different laws, bringing providing minimally invasive practices and greater legal certainty to the issue. procedures. 137THE DIAGNOSTIC MEDICINE SECTOR ABRAMED PANEL

Observing international experiences and long privacy policies”. Thus, 56% of internet adhering to regulatory requirements is users accept the terms of use or privacy of paramount to achieve regulatory compliance websites without reading them. in data protection, considering the specificities of the agents involved in the healthcare sector. The results of the study show an average Thus, the development of an internal area increase of 86% in the number of complaints responsible for data management is a path to regarding the protection of personal data in be followed by most healthcare companies. the very first months after the start of GDPR. In absolute terms, the growth was not as In 2019, almost a year after the implementation expressive, with 1,899 complaints on average. of the GDPR, 67% of European citizens were In the UK, the increase was more significant: already aware of the data protection law 20,462 complaints and 57%32 knew of the existence of a public authority in their country responsible for protecting their rights over personal data. In this sense, the study conducted by the marketing agency Into The Minds33 presented some results on the evolution of the number of complaints about personal data in Europe. The research included the participation of 30 countries, through the use of information provided by national data protection authorities. According to the author, the expansion of connected devices and the digitalization of personal data are converging to a significant collection of this information and, consequently, greater data protection and security challenges. Even in the face of regulatory requirement, several companies induce the user to automatic consent, by using flashy acceptance buttons and “mile- 32 Special Eurobarometer 487a (March 2019) 33 GDPR European statistics: evolution of the number of complaints per country-Pierre-NicolasSchwab–IntoTheMindshttps:// www.intotheminds.com/blog/en/gdpr-statistics-europe/ 138 ABRAMED PANEL THE DIAGNOSTIC MEDICINE SECTOR

GRAPH VARIATION OF CLAIMS AFTER LGPD IN % (SELECTED COUNTRIES-2018/2017) 50 Source: IntoTheMinds. GDPR European statistics: evolution of the number of complaints by country. Adapted by Abramed. Sweden 479,7 Liechtenstein 270,3 Croatia 256,7 Denmark Luxembourg 149,2 Belgium 125,0 112,7 Poland 102,4 United Kindom 98,2 79,0 Lithuania 64,7 Bulgaria 55,9 Norway 54,2 Slovakia 44,8 Ireland 44,5 Cyprus 43,3 Slovenia 39,4 Latvia 36,1 Romania 32,5 France 30,7 Italy 21,7 Hungary 8,6 Malta 0 Estonia 139THE DIAGNOSTIC MEDICINE SECTOR ABRAMED PANEL

Internet of Medical Things (IoMT) THE TERM INTERNET OF MEDICAL THINGS (IOMT) COMPREHENDS A SET OF MEDICAL DEVICES, SOFTWARE AND APPLICATIONS CONNECTED WITH THE PURPOSE OF ALLOWING THE EXCHANGE AND MONITORING OF PATIENTS’ HEALTH DATA. This is an innovative way of connecting coming years. It is estimated that diagnostic available medical resources and healthcare accuracy is fundamental for a satisfactory and services with the aim of treating patients more successful patient care. In this sense, machine accurately and effectively, since it assists in learning algorithms have the potential to monitoring patients’ health in real time and assist healthcare professionals in several areas, can assess the effects of treatments remotely. both in the reception and triage of patients It is estimated that the global IoMT market in care units and in the diagnosis of diseases, will be worth around $158.1 billion by 202234 as well as clinical prognosis. The continuously and that there were between 20 and 30 billion observed data should increasingly improve the connected medical devices by the end of 2020, algorithms and, consequently, the diagnosis which demonstrates the impact of IoMT on and care outcomes. the medical industry and its wide use in the field of computing. Additionally, the use of IoMT has been considered promising in delivering better patient outcomes, reducing healthcare expenditures, and making healthcare systems more effective by avoiding unnecessary interventions and hospitalizations. Approximately 60% of healthcare agencies in the world have already adopted this technology and another 27% intend to adopt it in the 34 Deloitte Report - Medtech and the Internet of Medical Things | How connected medical devices are transforming health care. 140 ABRAMED PANEL THE DIAGNOSTIC MEDICINE SECTOR

IoMT global Number of market US$ devices US$ 41,2 US$ 158,1 4,5 20 to 30 BILLIONS IN 2017 BILLIONS IN 2022 BILLIONS IN 2015 BILLIONS IN 2020 141THE DIAGNOSTIC MEDICINE SECTOR ABRAMED PANEL

Telemedicine THE PANDEMIC HAS DRASTICALLY ALTERED THE DELIVERY OF OUTPATIENT CARE IN 2020. SINCE THE START OF THE PANDEMIC, PATIENTS HAVE BEGUN TO POSTPONE ELECTIVE CONSULTATIONS AND TREATMENT, SHIFTING THEIR PRACTICES FROM FACE-TO-FACE CONSULTATIONS TO THE USE OF TELEMEDICINE. The health market needed to adapt quickly to willingness of patients to use telemedicine; deal with the unfolding of the health crisis in greater willingness of providers and, most the world and to seek ways to assist patients in importantly, permanent regulatory changes the face of social isolation measures. More than enabling greater access and reimbursement of a trend, telemedicine is a necessary reality in expenses. Even in this scenario, there are still healthcare for the world population. Driven, challenges to be worked on to achieve the full among other factors, by the need to overcome potential of telemedicine. Among them, the barriers in regions with limited infrastructure in need for data integration between the actors of access to health services and budget constraints the health system, a better integration of virtual experienced particularly by developing activities and work routines of physicians in countries. their daily routine in order to enable hybrid models of care and the alignment of incentives Telemedicine, as well as its various subspecialties, for value-based virtual work. telediagnosis, teleconsultation, telemonitoring, teletherapy, telecardiology, teleradiology, With the arrival of covid-19, there was an teleophthalmology, among others, constitute expected accelerated and widespread increase an important tool capable of minimizing the in the demand for medical and hospital services, problems of access, equity, quality and cost- supplies, professionals and all the components effectiveness faced by several countries and their that make up the cycle of care. In addition, healthcare systems. In general, the expectation the need for social isolation, for the protection is that online procedures are cheaper than in- of healthcare professionals and patients, has person ones, which may result in the reduction further contributed to adaptations of healthcare of healthcare costs and avoid waste. In this services through the use of this technology regard, several technologies are being developed in order to mitigate the spread of covid-19. to meet the needs of patients, doctors, and other In Brazil, telemedicine was exceptionally healthcare professionals. authorized by the Federal Council of Medicine (CFM), in addition to the provisions of CFM In the United States, studies indicate that the Resolution No. 1643 of August 26th, 2002, for the use of telemedicine increased 38 times compared purposes of teleguidance, telemonitoring and to the pre-covid-19 period. This change was teleconsultation in response to the pandemic. made possible by the favorable perception and Later, Law nº 13.989, of April 15th, 2020, was 142 ABRAMED PANEL THE DIAGNOSTIC MEDICINE SECTOR

GRAPH HOW COVID-19 CHANGED THE LANDSCAPE OF TELEMEDICINE USE IN THE UNITED STATES 51 Source: Telehealth: A quarter-trillion-dollar post-Covid-19 reality? McKinsey Covid-19 Consumer Survey 2020. Adapted by Abramed. 11 % 76 % Were using Are interested in using telemedicine in telemedicine today 2019 64% 57% Are more Of providers see comfortable telemedicine more using it favourably than before covid-19 80 new modalities The types of services available for telemedicine have increased considerably with the regulatory changes in Medicare and Medicaid, enabling and expanding access to virtual care in a range of clinical specialties. enacted, authorizing the use of telemedicine in covid-19 pandemic. These guidelines outlined an emergency basis while the crisis generated by the use of a variety of free and low-cost tools covid-19 lasts. Regarding supplementary health, for video communication with the public, ANS proposed actions for the use of telehealth including FaceTime, Facebook Messenger in order to enable and monitor the use of remote video chat, Google Hangouts video, and services to beneficiaries of healthcare plans. Skype. The conclusion is that the telemedicine platform played a relevant role in controlling In other countries, telemedicine has also dissemination and expanding knowledge about been instrumental in expanding the capacity the disease. The continuation of the large-scale and access to the healthcare systems, as well use of telemedicine is uncertain. However, as minimizing the risk of contagion. In the some lessons for the future are pointed out in United States, the pandemic reduced barriers order to avoid the inappropriate use of medical to access to telemedicine and promoted services, establishing more efficient screening its use in managing various forms of care. processes. The Department of Health and Services established a set of guidelines, in accordance 143THE DIAGNOSTIC MEDICINE SECTOR ABRAMED PANEL with the Health Insurance Portability and Accountability Act (HIPAA), to address the

04.2 Diagnostic Imaging Equipments DIAGNOSTIC IMAGING HAS PLAYED A PRIMARY ROLE IN ADDRESSING COVID-19. HIGH-RESOLUTION CHEST TOMOGRAPHY AND CHEST X-RAYS HAVE AIDED IN THE DIAGNOSIS AND ARE ESSENTIAL TO FOLLOW THE EVOLUTION OF THE DISEASE AND DEFINE CLINICAL MANAGEMENT. However, the distribution of imaging diagnosis Technological equipment and radiologists is uneven, advances allow particularly in the inner regions of the country. exams to be Such fact tends to hinder the offer of exams carried out in less in these regions, and brings up regulatory time with better issues that could reverse such scenario, such quality, precision as the Resolution of the Collegiate Board of and lower costs. Directors/ANVISA RDC 25, dated February 15th, 2001, which regulates the importation, commercialization and donation of used and reconditioned healthcare products. Technological advances in imaging equipment allow exams to be carried out efficiently, in less time, with better quality and accuracy, lower costs and, above all, ensuring the well-being of patients. For this reason, an evolution in the quantity of available equipment has been perceived in the last ten years. By the end of the first half of 2021, there was approximately 138,300 diagnostic imaging equipments in use in Brazil, according to data from CNES. In the same period, there were 110.1 thousand optical method equipments and 51.5 thousand graphic equipments. 144 ABRAMED PANEL THE DIAGNOSTIC MEDICINE SECTOR

GRAPH DIAGNOSTIC IMAGING EQUIPMENT, GRAPHIC AND OPTICAL METHODS IN USE IN BRAZIL (JUN.11/JUN.21) 52 Source: Ministry of Health - Brazilian National Register of Health Establishments - CNES. Extracted on July 1st, 2021. Prepared by Abramed. 0 20.000 40.000 60.000 80.000 100.000 120.000 140.000 97.361 Diagnostic Imaging 138.256 32.447 Optical Methods 110.112 Graphic Methods 33.476 51.473 JUN 2011 JUN 2012 JUN 2013 JUN 2014 JUN 2015 JUN 2016 JUN 2017 JUN 2018 JUN 2019 JUN 2020 JUN 2021 Ultrasound devices are the most common mammography devices totalled 5.9 thousand. among the imaging equipments. In total there The devices used to perform more complex are 44.6 thousand devices in use by the end exams and with greater precision, such as of June 2021. The X-ray devices totalled 29.3 tomograph, MRI, gamma-camera and PET/ thousand (except dental X-ray devices) and CT, totalled 9.4 thousand. 145THE DIAGNOSTIC MEDICINE SECTOR ABRAMED PANEL

GRAPH NUMBER OF IMAGING EQUIPMENTS IN USE IN BRAZIL (JUN.11/JUN.21) 53 Source: Ministry of Health - Brazilian National Register of Health Establishments - CNES. Extracted on July 1st, 2021. Prepared by Abramed. Note: Does not consider dental X-Ray equipments. 0 10.000 20.000 30.000 40.000 50.000 60.000 70.000 80.000 90.000 59.080 Total 89.170 25.914 Ultrasound 44.626 24.118 X-Ray 29.237 4.246 Mammograph 5.929 2.238 CT Scanner 5.569 MRI 1.176 2.944 788 Gama- camera Scan 749 PET/CT 116 JUN 2011 JUN 2012 JUN 2013 JUN 2014 JUN 2015 JUN 2016 JUN 2017 JUN 2018 JUN 2019 JUN 2020 JUN 2021 146 ABRAMED PANEL THE DIAGNOSTIC MEDICINE SECTOR

The information corresponding to the number of diagnostic imaging equipments according to the type of establishment indicates a distribution, principally, among hospitals, specialized clinics/specialized outpatient clinics and diagnostic and therapeutic support service units (SADT). It is observed that these healthcare establishments have the largest quantities of equipment in use in the country. TABLE NUMBER OF IMAGING EQUIPMENTS IN USE IN BRAZIL PER TYPE OF FACILITY (JUN.21) 30 Source: Ministry of Health - Brazilian National Register of Health Establishments - CNES. Extracted on July 1st, 2021. Prepared by Abramed. Note: Does not consider dental X-Ray equipment. Total number of equipments per type of facility may be different from the total number of equipments due to lack of registration. Size Ultrasound X-Ray Mammogra-CT MRI Gama - PET/CT (employees) ph Scanner Camera Scan Basic Healthcare 1.696 763 63 16 2 3 14 Unit Specialized 11.506 4.134 1.453 1.154 603 149 16 Outpatient Clinic Consultation Clinic 5.011 2.153 117 159 31 31 5 Specialized Hospital 1.484 1.176 142 242 80 56 13 General Hospital 10.147 12.506 221 1.907 704 164 31 Day Hospital 677 228 67 94 28 7 – Polyclinic 4.319 1.497 542 250 122 26 1 Emergency Service 322 1.107 15 33 5 2 – General Emergency 106 224 6 12 3 1 – Room 8.605 5.010 2.124 1.659 1.355 303 35 Support Healthcare,Diagnosis 258 20 12 3 6 1 & Therapy Service Unit 29.223 5.925 5.563 2.941 749 116 Mixed Unity 335 Total 44.588 147THE DIAGNOSTIC MEDICINE SECTOR ABRAMED PANEL

The hospitals (Specialized, General and Day) diagnosis of several diseases, such as: gastritis, together have the largest number of ultrasound esophagitis, tumors, bleeding and more serious equipments, with 12,308 (27.6% of the total); diseases such as hiatus hernia and early stages X-Rays 13,910 (47.6%), CT scanner, 2,243 (40.3%); of stomach cancer. The respiratory endoscopy, and PET/CT, 44 (37.9%).While the SADT units also known as bronchoscopy, is an exam that have the largest quantity of mammographs, allows the visualization of the airways, helping 2,124 (35.8%); MRI, 1,355 (46.1%); and gamma- in the precise diagnosis of any alterations in the camera, 303 (40. 5%), as of June 2021. anatomy and several diseases, such as tumors, infections, stenosis, foreign bodies, among In the group of diagnostic equipment by others. In this sense, it is noticed a tendency of optical methods, the endoscope stands out as growth in the offer of these equipments in the an important instrument for the detection and last years. GRAPH SHARE OF IMAGING EQUIPMENT IN USE IN BRAZIL BY TYPE OF FACILITY IN %. (JUN.21) 54 Source: Ministry of Health - Brazilian National Register of Health Establishments - CNES. Extracted on July 1st, 2021. Prepared by Abramed. Note: Does not consider dental X-Ray equipments 47,6 46,1 40,3 40,5 37,9 30,3 35,8 27,6 27,6 30,2 29,8 25,8 24,5 19,3 17,1 20,5 19,9 20,7 14,1 13,8 7,3 Specialized Clinic / Hospitals (Specialised, Diagnostic and Therapeutic Specialized Outpatient General and Day) Support Service Unit Clinic Ultrasound X-Ray Mammograph PET/CT MRI Gama-Camera Scan CT Scanner 148 ABRAMED PANEL THE DIAGNOSTIC MEDICINE SECTOR

GRAPH THE USE OF OPTICAL METHOD EQUIPMENTS IN BRAZIL (JUN.11/JUN.21) 55 Source: Ministry of Health - Brazilian National Register of Health Establishments - CNES. Extracted on July 1st, 2021. Prepared by Abramed. Note: Does not consider ophthalmologic equipments. 0 5.000 10.000 15.000 20.000 25.000 30.000 35.000 40.000 Total 27.088 38.407 3.445 Respiratory Tract 5.187 Endoscope 1.960 Urinary Tract 2.789 Endoscope 8.949 Digestive Endoscope 14.624 Optometry 9.397 equipment 10.480 Laparoscope 3.337 5.327 JUN 2011 JUN 2012 JUN 2013 JUN 2014 JUN 2015 JUN 2016 JUN 2017 JUN 2018 JUN 2019 JUN 2020 JUN 2021 Regarding graphic methods equipment, it is noticeable a more accelerated growth of electrocardiographs. This is an important equipment for monitoring the electrical activity of the heart. Its use is indicated to investigate diseases that affect the heart muscles. 149THE DIAGNOSTIC MEDICINE SECTOR ABRAMED PANEL

GRAPH USAGE OF GRAPHIC METHODS EQUIPMENT IN BRAZIL (JUN.11/JUN.21) 56 Source: Ministry of Health - Brazilian National Register of Health Establishments - CNES. Extracted on July 1st, 2021. Prepared by Abramed. Note: Does not consider ophthalmologic equipments. 0 10.000 20.000 30.000 40.000 50.000 60.000 Total 33.476 51.473 29.756 Electrocardiograph 45.290 3.720 Electroencephalograph 6.183 JUN 2011 JUN 2012 JUN 2013 JUN 2014 JUN 2015 JUN 2016 JUN 2017 JUN 2018 JUN 2019 JUN 2020 JUN 2021 Regarding graphic methods equipment, it is noticeable a more accelerated growth of electrocardiographs. This is an important equipment for monitoring the electrical activity of the heart. Its use is indicated to investigate diseases that affect the heart muscles. 150 ABRAMED PANEL THE DIAGNOSTIC MEDICINE SECTOR