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Brazil Pharmaceuticals and Healthcare Report Q1 2008Published by: Business Monitor International Published: Feb. 25, 2008 - 89 Pages Table of Contents
AbstractWith estimated year-on-year (y-o-y) growth of 17% in 2007, down only slightly from 20% growth in2006, Brazil represents one of the fastest-growing major pharmaceutical markets in the world. BMIestimates generics market growth of 44.0% as that segment continues to drive the overall marketplace.According to our newly-extended forecast for the five years to 2012, the Brazilian pharmaceutical marketshould see a 7.1% average annual growth rate, reaching a value of US$18.3bn in 2012.As impressive as recent growth has been, volumes remain stagnant or declining, with industry associationFebrafarma projecting a 1.77% fall in volumes sold during 2007. This trend is striking, given thesubstantial investments in expanding access to medicines made and pledged by the government ofPresident Luiz Inácio Lula da Silva. With the economy growing and public and private spending surging,the slip in volumes is troubling. One factor is surely the replacement of older, less effective medicineswith modern treatments and more effective drug delivery. But, inescapably, a major part of the equation isineffective delivery via both the traditional wholesale and retail sector and government programmes,coupled with greater consumption of costlier medicines, generally at the top end of the market. Still, Brazil’s continued attractiveness for local and foreign players was reflected by a number of dealsand new projects announced in Q407. After committing more than US$100mn to expand productionearlier in the year, Novartis is reportedly planning a new vaccines production facility in Pernambucostate, an investment that could eventually reach US$500mn - although there had been signs in lateOctober 2007 that the project could be delayed, reportedly due to concerns over Brazil’s patentprotections. Leading South African generics maker Aspen gained exposure to the market with itsacquisition of 50% of Strides Latina, a subsidiary of fast-growing Indian player Strides Arcolab. Frenchplayer Solvay and UK’s AstraZeneca are said to be in actively eyeing local acquisitions. Importers arealso prospering. According to a survey by local consultancy Lafis, Brazil’s medicines trade deficitwidened by 42% y-o-y over the first eight months of 2007, reaching US$1.8bn. Nonetheless, multinational investments reflect a longer term confidence in the potential of Brazil as aproduction hub and are being met by new investments by domestic drugmakers. Local players Libbs andMedley announced substantial investments in technology and production capacity in a bid to maintainstrong positions in the generics segment, as well as increase export capacity. Brazilian private equitycompany GP Investments reportedly paid BRL241.6mn (US$120.2mn) for 50% of generics and overthe-counter (OTC) maker Farmasa. The strong local market and a weak dollar have helped local playersinvest and get mainly imported active pharmaceutical ingredients (APIs) more cheaply. Whatever thestructural problems facing the market, improving intellectual property (IP) conditions and majorgovernment investment in modernising the sector are encouraging sustained investment on levelsunmatched in other Latin American countries. Get Full Details About This Report >> |
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