The Brazilian Market for Generic Drugs
Representing the current largest Generic drugs market in Latin America, Brazil reveals its potential in the area. Know how this sector of the Pharma Industry operates in the country and what are the most promising areas for investments.
Generics first started to be commercialized in Brazil in 1999, after the promulgation of a specific Law (known as “Lei do Genérico”, or “Generic Law”), that authorized laboratories to handle and sell drugs that already lost their ten-year-long patent.
With prices at least 35% cheaper than brand-name drugs and rigorous quality control, generics have become increasingly trusted by the population and doctors in Brazil. This great leap is due to the patent expiration of many significant blockbuster drugs allied to a very incisive support by the government.
For a couple of years now, the Generic Industry has experienced an expressive growth. In 2011, the market has increased 32.3% regarding the amount of unities sold in comparison to 2010 numbers. In terms of sales, the generic market was responsible for BRL 8.7 billion, representing an increase of 41% compared to 2010.
The Market
According to a study made by the IMS Health Consulting Institute, Generics currently represent 20,6% of the Brazilian pharmaceutical industry sales. The number proves that generic businesses in Brazil still have a lot to expand, as in Europe and in the US generics sales have a 35% to 60% participation.
Brazilian companies still respond for the biggest part of the generic drugs' marketplace. About 88% of the capital invested in generics is national, 3,6% Indian, 1,8% German, 5,1% Swiss, 1,1% American and 0,3% Canadian. But these numbers are about to change as more and more foreign generic players are seeking Brazil to invest in the area.
The prominent players in the Brazil's Generics Market are the Brazilian companies Medley, EMS Sigma Pharma, Eurofarma Laboratórios Ltda and Aché Laboratórios Farmacêuticos S/A, and the Indian multinational Ranbaxy Laboratories Ltd.
Based on patent expiration of many blockbuster drugs within the next years, segments such as, diabetes, antithrombotic, erectile dysfunction, oral contraceptive, antiretrovirals, and cardiovascular are the key investment areas for Brazil’s Generics industry. Among these, diabetes, antiretroviral, cardiovascular, and oral contraceptives hold a significant potential for future growth, deserving a deeper look.
From Laboratory to Drug Stores
The Brazilian Health Surveillance Agency (Anvisa) is the institution responsible for regulating the manufacturing and sales of generic drugs. According to the Generic Law, the drugs can only get to the consumer after bio-equivalence tests, done in human beings. Generic drugs must guarantee the same efficiency than their reference drugs. Anvisa established that until 2014 all generic drugs in circulation will have to be approved in such tests, otherwise they will be discontinued.
Until now, Anvisa has registered the generic version of 337 active substances, that pretty much cover the pathologies and chronicle diseases that most affect Brazilian population. The technical criteria required for the registration of generic drugs in Brazil are the same as the ones adopted by regulatory agencies from countries like Canada (Health Canada), USA (FDA), UE (EMEA) among others.
Government Support
Since the Brazilian Federal Government passed the Generic Law, it has been doing constant publicity regarding the stimulation of generics' sales. It was a great move, after all, the biggest pharmaceutical client in Brazil is the Federal Government itself.
Just think about the amount of medicines bought in public health programs. The Brazilian Federal Government distributes free contraceptives, medicines for hypertension, asthma, diabetes, Parkinson's, glaucoma, osteoporosis and rhinitis, all through the “Aqui tem Fármacia Popular” initiative, that establishes that about 75% of the drugs sold are generic.
Besides, the Sistema Único de Saúde, SUS (Brazilian public health system) provides free treatments for AIDS, tuberculosis, Alzheimer, Hepatitis, transplants, Lupus and several others. Most of those medicines are bought in their generic version as well.
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