Brazil Pharmaceuticals and Healthcare Report Q2 2008

Brazil's pharmaceutical market remains one of the bright spots globally, having posted 17.0% growth in 2007 and reaching an estimated value of US$12.9bn in final consumer prices. Despite the highly publicised break of Merck's efavirenz patent in mid-2007 - which the government pledges is an isolated instance - the overall regulatory environment is one of the strongest in Latin America. Key drivers include generics as local industry retools to meet stronger bioequivalence standards and foreign players enter, along with vaccines and broader infusions of spending from the government. BMI is forecasting 12% market growth in 2008 and an average five-year growth rate of 7.2% between 2007 and 2012, when the market is expected to reach a total value of US$18.3bn.

The forecast expects a relatively steady decline in market growth rates through 2012. Primarily, this is because we believe that the main drivers will be oriented to cost-savings and import substitution and indeed this is the explicit policy of the government, which has the most active industrial policy in the sector of any Latin American government. In January, the Brazilian Ministry of Health said it wanted 80% of medicines used in its national immunisation programme to be produced domestically, primarily by its Farmaguinhos state manufacturing group. And worries about Brazil's willingness to issue compulsory licences in the future reportedly influenced the decision by Boehringer Ingelheim not to launch its tipranavir HIV/AIDS drug in the market for the time being.

We expect the main drivers of market growth through 2012 to be the generics market, which grew at a 46% clip in 2007. This rate of growth is unsustainable over the longer run, but growth will be nearly double the market average for the forecast period, with an average rate of 13.5% annually. By 2012, legitimate generics will account for 20% of the market, the highest proportion of any large Latin American market and a reflection of Brazil's progress in developing bioequivalence rules and testing.

Another key area for investment by multinational companies will be biotechnology and the wider R&D sector, given the country's relatively low costs and heavy recent investments by the government. In the last few years, biotech players such as Genzyme, Shire, Biogen and a host of smaller players have established or expanded operations in Brazil, while clinical research organisations (CROs) are using Brazil as a hub for growing Latin American operations.

Medical devices represent a third area of growth and investment that is expected to outpace the overall growth rate of the pharmaceutical market. Beginning this quarter, BMI is expanding its coverage to Brazil's medical device market, which, valued at US$2.47bn in 2007, is the largest in Latin America. The largely liberalised market should see growth well ahead of the overall pharmaceutical market trend, averaging 19% year-on-year (y-o-y) to 2012 and driven by increases in healthcare expenditure and the government's drive to modernise healthcare. A key development to watch will be consolidation in the presently fragmented distribution sector and growing demand for medical devices and equipment for the home.

• Executive Summary
• Brazil Pharmaceuticals And Healthcare Industry SWOT
• Brazil Political SWOT
• Brazil Economic SWOT
• Brazil Business Environment SWOT
• Pharmaceutical Business Environment Ratings
• Limits Of Potential Returns
• Risks To Realisation Of Returns
• Brazil - Market Summar12
• Regulatory Regime
• Intellectual Property
• Regulator Interference
• Data Protection
• Compulsory Licensing
• Intellectual Property Environment
• Other Regulatory Issues
• Subsidies On Generics
• Tax Burden On Pharmaceuticals
• Industry Developments
• Healthcare Sector
• Domestic Pharmaceutical Industry
• State-Owned Manufacturing Sector
• PROFARMA Initiative
• Generics Sector
• Multinational Research-Based Sector
• Industry Forecast Sce39
• Overall Market Forecast
• Key Growth Factors - Industry
• Key Growth Factors - Macroeconomic
• Prescription Market Forecast
• OTC Market Forecast
• Regulatory Overview
• Advertising
• OTC Sector: Competitive Landscape
• Key Growth Factors
• Generics Market Forecast
• Recent Developments
• Competitive Landscape
• Outlook
• Medical Device Market Forecast
• Other Healthcare Data Forecasts
• Key Risks To BMI's Forecast Scenario
• Competitive Landscape
• Leading Products
• Manufacturers
• Distribution
• Retail Market
• Recent Market Performance
• Company Monitor
• Leading Multinational Companies
• Sanofi-Aventis
• Pfizer
• Merck & Co
• Novartis
• GlaxoSmithKline (GSK)
• Roche
• Nycomed (Altana Pharma)
• Merck KGaA
• Novo Nordisk
• Indigenous Manufacturing Sector
• Ach / Biosinttica
• EMS Sigma
• Eurofarma
• Medley
• BMI Forecast Modelling
• How We Generate Our Industry Forecasts
• Pharmaceutical Industry
• Pharmaceutical Business Environment Ratings Methodology
• Ratings Overview
• Weighting
• Sources
• List of Tables
  • Table: Americas Pharmaceutical Business Environment Ratings
  • Table: Brazilian Drug Market Trends
  • Table: Brazilian Health Expenditure Trends
  • Table: Economic Activity
  • Table: Brazil's Prescription Drug Market Trends (US$mn unless otherwise stated)
  • Table: Brazil's OTC Market Trends (US$mn unless otherwise stated)
  • Table: Brazil - Retail Price Differentials On Key Off-Patent Compounds
  • Table: Brazil's Generics And Patented Market Forecasts
  • Table: Brazil Medical Device Forecasts
  • Table: Pharmaceutical Trade Data And Forecasts (US$mn)
  • Table: Socio-Demographic Forecasts
  • Table: Pharmaceutical Business Environment Indicators
  • Table: Weighting Of Components