The Pharmaceutical Market: Brazil
Market Research Report

The Pharmaceutical Market: Brazil Market Research Report

THE PHARMACEUTICAL MARKET: BRAZIL - REVIEW
Concentration levels are expected to increase in the Brazilian wholesale and retailing sectors. In the wholesale sector, there are over 300 pharmaceutical wholesalers but this number continues to fall, due to mergers and acquisitions. Panarello, Profarma, Santa Cruz and Athos Pharma are the leading wholesalers. In October 2011, Profarma announced the acquisition of 60.0% of Prodiet. In the retailing sector, pharmacy chains account for around half of the private pharmacy sector by value but they only represent about 10.0% of the total number of outlets. Competition among the five leading pharmacy chains is fierce, and the sector has been consolidated by a wave of mergers in recent years, particularly in 2011. Three leading chains, DPSP, Raia Drogasil and Brazil Pharma, are incorporating their mergers/acquisitions in 2012, but the process of consolidation is expected to continue. The market is expected to witness further acquisitions of small- and medium-sized chains. ABRAFARMA believes that further mergers among the leading pharmacy chains should also be expected in the mid-term. Pague Menos is one of the leading pharmacy chains that could make a move in 2012.

Brazilian generics sales continue to grow at a higher rate than the overall pharmacy sector. New patent expiries and the implementation of the Sade No Tem Preo programme, which distributes free medicines for the treatment of hypertension and diabetes, encouraged further generic sales in 2011. In 2011, there were over 100 generic companies operational in the market. The leaders were EMS, very closely followed by Sanofi's Medley, and then Germed and Eurofarma. In 2011, major developments included Prazzi-Donaduzzi's plans to increase production, announced in December 2011; Aspen's acquisition of six medicaments owned by Myrallis in August 2011; a distribution agreement between Novartis' Sandoz and Sanofi's Medley, valid from June 2011; and Stride Arcolab's joint-venture with BioChimico, announced in January 2011. Previous major developments include Pfizer's purchase of 40.0% of Teuto in October 2010, Valeant's acquisitions of Bunker in May 2010 and Delta in April 2010, Sanofi's acquisition of Medley in 2009, and Hypermarcas acquisition of Neo Qumica in 2009.

The government aims to encourage the development of biosimilar drugs in Brazil. In 2012, ANVISA is expected to publish specific guidelines for the development of biosimilars of monoclonal antibodies. In October 2011, ANVISA published four guidelines for biosimilars. Along with these guidelines, ANVISA created a technical chamber for biologics and posted the main current regulations, including those for the registration and post-registration, in its web site in 2011. The Ministry of Health is very keen to encourage the local production of biosimilars. As part of these efforts, for instance, the Ministry of Health and the government of Sao Paulo signed an agreement with Instituto Butantan in December 2011. Local companies also consider the biosimilar sector very attractive, therefore a number of initiatives are in the pipeline. Foreign companies have also shown interest. Amgen, for example, acquired the local producer Bergamo in April 2011, and reacquired a number of products previously licensed to Mantercorp, which was acquired by Hypermarcas in January 2011. Novartis has confirmed its plans to build a plant for the production of vaccines against meningococcal B within three years.

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