Abstract
Brazil is the second most attractive BRIC market for pharmaceutical producers.
This report is ideal for executives wanting to understand the key drivers in
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market in context. The reports provide:
- Five-year projections for economic, demographic, health expenditure,
health workforce and pharmaceutical market indicators.
- Specialised intelligence on OTCs, generics, biologics and biosimilars.
- Exclusive economic and demographic data from the Economist Intelligence
Unit (EIU) for each market in the series.
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infrastructure, health services and health personnel.
The reports are updated quarterly, providing you with the latest information
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and industry news on a regular basis.
BRAZIL - MARKET REVIEW
Brazil is the second most attractive BRIC market for pharmaceutical producers.
Controlled drug prices have increased below inflation levels but price
controls are not directly linked to consumption levels. In fact, between 1997
and 2008, the pharmaceutical market by volume increased significantly only in
2004. Demand should increase as the country is emerging from the economic
downturn much quicker than anticipated, therefore the outlook is positive
compared to other Latin American markets. The exchange rate of the real
against the US dollar fell in early 2009, but it has now recovered. This is
good news for producers as imports are now cheaper; Brazil, contrary to what
happens in other BRIC countries such as India, still relies on raw material
imports, which diminishes its market strength. Recent regulatory developments
include the implementation of the National Drug Control System, published in
November 2009; registration requirements for APIs, published in November 2009;
and a new labelling & packaging regulation, published in September 2009.
ANVISA is also working on a draft for the regulation of biologic copies; the
aim is to encourage local production of these medicines.
The pharmacy sector in dollar values registered a slow growth in 2009. Future
OTC sales are expected to be affected by the new advertising regulation,
enforced in June 2009, and the new dispensing practices, published in August
2009. One of the new dispensing measures was that OTC medicines could no
longer be sold over the counter. This, however, was overturned by ABRAFARMA in
October 2009. Generics sales continue to grow at a higher rate than the
overall pharmacy sector, and they are expected to represent 20% of the sector
by volume in 2010. In September 2009, it was rumoured that the local generic
producer, Neo Quimica, was being acquired by Pfizer, but instead it was
grabbed by Hypermarcas in December 2009. This was the second major acquisition
in the generic sector in 2009, following sanofi-aventis' acquisition of
Medley. This wave of acquisitions is a blow for the government which has been
trying to create a leading local pharmaceutical group with the help of the
National Bank for Economic & Social Development (BNDES). EMS, Ache and
Eurofarma remain local, and a hypothetic merger of Ache and Eurofarma would be
supported by the government.
Local manufacturing investments continue in order to increase market
positioning locally and internationally. Biolab plans to create a new R&D
facility in 2010. Cristalia has inaugurated a new R&D centre; the company
claims to be the local producer with the highest R&D portfolio and
investments. EMS is investing in a new Drug Delivery Systems (DDS) platform.
Eurofarma continues to invest in its animal health division in the local
market, whilst it has acquired an Argentine pharmaceutical producer in order
to develop its international operations. Hipolabor is building a second
manufacturing plant for the production of antibiotics. Even public producers
follow the same trend. Fundacao para o Remedio Popular (FURP), for example,
has inaugurated a new manufacturing plant for the production of generic
medicines, the first of its type.
Leading foreign pharmaceutical companies are strengthening their operations.
Daiichi-Sankyo, the only Japanese company with manufacturing operations in
Brazil, is expanding its plant. GlaxoSmithKline has announced a multibillion
alliance with Fiocruz' s Bio-Manguihos to develop vaccines. Nycomed has
announced investments of US$300.0 million over the next five years. Novartis
is setting up a vaccines plant. Brazil is the most important BRIC market for
sanofi-aventis. The company has increased its market share following the
acquisition of Medley, and has announced its plans to create a plant for the
production of generic contraceptives. Solvay has announced the creation of a
new share services centre. In the wholesaling sector, Celesio, the largest
European wholesaler, has acquired a majority state in the Panpharma group.
Other companies are re-assessing their operations. Boehringer Ingelheim, for
instance, has signed a third-party manufacturing agreement with Zambon, whilst
Roche has announced plans to sell its manufacturing plant in Brazil.
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