Pharmaceuticals - Brazilian market

Brazil passed its patent law in 1997. Three years later generic medicines established themselves as a less expensive alternative, given the high demand and high prices for formulations.

Brazilian generics are normally known as `similars` and have been the mainstay of the Brazilian manufacturers. Every international patent is understood to have several local copies which outsell the original. Brazil, however, does not manufacture bulk drugs. Similars, which have been subject to lenient regulatory regime, are coming under increasing scrutiny and the National Agency for Health Supervision of Brazil, ANVISA, is expected to introduce obligatory bio- equivalence tests, pharmaceutical equivalence, certificate of origin for the ingredients and GMP certification for such products. Non-prescription medicines account for approximately 30 per cent of industry sales in Brazil.

The Brazilian government, in recent years has been aggressively promoting the sale of generic medicines in Brazil, having made registration procedures simpler. From 2000 till year 2002, the number of firms
manufacturing generics is understood to have gone up from 7355 to 111,650, while sales in the same period are understood to have gone up from US$ 31.6 million to US$ 366 million.

Approximately 600 generic formulations were understood to have been registered till July 2002, in more than 1.9 million presentations. By mid-June 2002, 426 formulations were on sale, most through government-encouraged generic sale counters. These products are understood to have a market share of almost 10% per cent in 2002, expected to increase in 2003 to 18%. Sale of generic formulations in Brazil increased 614% in 2001 over 2000. Value in the same period increased 500%, from US$ 25.4 million, to US$ 126.7 million, as per Brazilian government statistics.

The Brazilian pharmaceutical market has shrunk lately. According to the Institute IMS Health, retail sales fell by almost 20 % in 2001 from US$ 6.14 billion to US$ 4.93 billion. The number of units sold also fell from 1.28 billion to 1.25 billion. Brazil, however, continues to be the 10th largest pharmaceutical market among countries which protect intellectual property.

According to ANVISA, in 2000-2001, Brazilian generics industry invested approximately US$ 175 million. The industry
imports far more than it exports. In 2001, imports of formulations was US$ 1.25 billion while imports of bulk drugs reached
US$ 780 million, according to the Brazilian Association of Chemicals and pharmaceuticals, ABIQUIM. Exports of formulations from Brazil amounted to US$ 241.7 million.

Indian companies have been increasingly attracted to Brazil. A few years ago several companies started selling bulk drugs to Brazil. Since then Indian majors like Ranbaxy, Core Health Care, Strides, Torrent etc. have set up operations in Brazil to market their formulations and are even planning to set up manufacturing bases here. A list of Indian pharmaceutical companies active in Brazil is enclosed.

JUNE, 2002