The Pharmaceutical Market: Brazil

Abstract

Brazil' s national pharmaceutical policy is focused on increasing access and reducing prices. This report is ideal for executives wanting to understand the key drivers in the pharmaceutical market and have access to a wealth of statistical data, including five-year market projections. Included with the report are 3 free quarterly updated outlook reports, enabling you to keep up to date with market developments for a year.

The government is fostering R&D programmes and mergers & alliances in the local industry in order to create bigger local producers which can compete with multinational subsidiaries, therefore pushing prices down. The depreciation of the US dollar is helping many importers of raw materials and finished pharmaceuticals, but for the local industry, there is a need to restrict its reliance on imports. The market is performing very strongly, encouraged by high GDP per capita.

Historically, at least one third of the Brazilian population has not had access to medicines. Not surprisingly, the generics sector is booming in Brazil and many leading foreign generics producers have established subsidiaries and manufacturing facilities in the country. Market penetration, however, is difficult due to local practices, very low prices and market protectiveness. Four domestic producers dominate the sector and multinational competition is, somehow, restricted. Apotex, for instance, has decided to retaliate and sell its manufacturing facilities.

The distribution sector is starting to consolidate too. The three leading distributors represent 28.0% of the pharmacy sector, which is still a low level compared to more established markets. However, Profarma has already announced its intentions to selectively acquire small regional distributors. The other two leading distributors also need to expand within Brazil. In addition, pharmacy chains continue to increase their presence but competition is strong.

In recent years, increasing regulatory measures have destabilised the industry. The new body to regulate prices (CMED), created in 2003, has increased price controls. The National Medicines Agency (ANVISA) has also rushed through a number of regulations which have resulted in further costs for the industry, and practices such as third-party manufacturing have become more difficult. The Brazilian market, in a way, is becoming more sophisticated and aims to recover its leadership in the region and mirror other emerging markets, particularly India.