Brazilian Pharmacy Market
With sales growing, Brazilian pharmacies are attracting interest from investors. This article will cover the main aspects of the Brazilian market, its peculiarities and the current main players.
Overview
Brazilian pharmacies are going through a period of changes. This market has been growing year after year. The products sold are being diversified. The number of small companies is decreasing. International players are paying more attention to Brazil. And the entity responsible for a big share of this sector — Abrafarma, an acronym for the Brazilian Association of Pharmacies and Drugstores Chains — believes that these changes will keep happening in the near future.
Most recent data from Abrafarma helps make that a plausible statement. Total sales of the Brazilian pharmacies in 2013 reached BRL 28.7 billion, a growth of nearly 13.5% in comparison with 2012.
The number of stores is also growing: 334 pharmacies were opened in 2013, resulting in a total of almost 4,950 points of sale in the country.
Main Players
Abrafarma annually discloses two rankings of the biggest pharmaceutical companies in Brazil. One is classified according to revenue, and the other is based on the number of stores. The states where these pharmacies are headquartered are identified next to their names.
Top 10 - Revenue
- Raia Drogasil - São Paulo
- Pague Menos - Ceará
- Drogaria São Paulo - São Paulo
- Pacheco - Rio de Janeiro
- Big Ben - Pará
- Araújo - Minas Gerais
- Panvel - Rio Grande do Sul
- Nissei - Paraná
- Onofre - São Paulo
- Imifarma - Pará
Top 10 - Number of Stores
- Raia Drogasil - São Paulo
- Pague Menos - Ceará
- Drogaria São Paulo - São Paulo
- Pacheco - Rio de Janeiro
- Wal-Mart - São Paulo
- Panvel - Rio Grande do Sul
- Nissei - Paraná
- Mais Econômica - Rio Grande do Sul
- Big Ben - Pará
- Imifarma - Pará
The Peculiarities Of The Brazilian Market
Brazilian pharmacies are a bit different from the stores encountered in the United States and England, for example. Drugstores in Brazil are not like the foreign ones, that may be compared to supermarkets, selling food, accessories, cosmetics, and even home apparel.
Regulation
Basically, pharmacies may only sell medications, cosmetics, toiletries, medicinal plants and products related to human health. The National Health Surveillance Agency — Anvisa — prohibited the sale of products like food and beverages inside this type of establishment, with a few exceptions, such as:
- Foods for special diets, specific populational groups, or with functional properties
- Teas, honey, propolis, and royal jelly
- Vitamins and minerals
- Probiotics with allegations of functional properties
This rule is not always followed by Brazilian pharmacies. Some stores, especially the ones located in smaller cities, often display snacks and even electronic devices. Anvisa is strongly against this practice, and, even though the entity has legal backing, some injunctions and local legislation allow pharmacies to sell those forbidden products.
Interest From Foreign Companies
The rapid growth of the Brazilian pharmacy market was strong enough to draw the attention of companies from other countries. Specialists affirm that the entrance of foreign pharmacy chains are more likely to happen by buying smaller companies.
That was already concretized with the sale of the Brazilian Drogaria Onofre to the American giant CVS. This acquisition occurred in 2013.
Rumours of other foreigners coming to Brazil included Walgreens, also from the United States, and Boots, from the United Kingdom. So far, though, no move was made, nor announced by these companies.
Trends
To keep growing in revenue and store openings, the pharmacy sector in Brazil relies more and more on the sale of items that are not medications. According to Abrafarma, in 2013, this category represented 33% of the sales, and the expectation is that this percentage will keep growing.
Generic drugs are also considered key for the expansion of this market. In 2013 this category raised, among the companies associated to Abrafarma, a total amount of BRL 3.5 billion, representing 18% of all their sales.