Report From: Brazil - Pharmaceutical Technology

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Report From: Brazil
Designated as a "pharmerging market," Brazil is revamping its pricing models.

Pharmaceutical Technology
Volume 33, Issue 9, pp. 18-22

Promoting partnerships and investment

Also in front-page Brazilian pharmaceutical industry news are a torrent of new deals. In 2008, the country's commercial deficit was nearly $3.5 billion, and yet, pharmaceutical-based imports totaled $4.5 billion, or about 80% of domestic demand. Exports in 2008, meanwhile, totaled $1 billion (3). In April 2009, the government initiated nine public–private partnerships between government-run labs and private companies. The initiative aims to save $80 million per year in governmental drug purchases. Seven state-owned pharmaceutical companies will partner with 10 private firms, including Brazil's Globe and India's Lupin Pharmaceuticals, to produce 21 medicines offered by the public health system. The contracts aim to transfer the technology of and develop 24 pharmaceuticals that have reached patent expiry. They include treatments for diseases such as HIV, tuberculosis, and asthma as well as conditions related to hemophilia and cholesterol. The government's direct purchase of these medicines currently accounts for $400 million per year.

On the research and development (R&D) side, private and public companies currently invest around $14 billion per year into new products and treatment—that's less than 1% of the world's total R&D investment, according to ANPEI, the country's National Association for Research and Development of Innovative Companies. But investment is expected to increase. "Brazilians just need one opportunity to take off," said Brazilian neuroscientist Miguel Nicolelis, a leading researcher at Duke University in North Carolina, during a press event in April 2009 in Sa Paulo.

In the past, developing countries were restricted to manufacturing products developed by the headquarters of multinational companies based in developed economies. Now, the search for lower costs has promoted a cultural change toward decentralization among multinationals. A 2008 Febrafarma poll showed that R&D investments by Brazilian companies went up 68% and by multinational firms, 11%. Between January and April 2009, foreign direct investment in Brazil's domestic market reached $366 million, as compared with $73 million during the same period in 2008, according to Febrafarma. Novartis, for example, is investing $200 million to build a new facility in the state of Pernambuco.

In addition, Cristalia, a Sa Paulo-based laboratory, is beginning R&D activities in biotechnology. A facility under construction will consume around $25 million in investments to start production of human growth hormone and interferon in 2012. The Brazilian government spends $60 million every year to buy these drugs and until 2007, the company had 12 patents registered in Brazil and nearly 60 filed abroad.

Following this path, Pfizer (New York) plans to increase by 20% the number of researchers it employees (currently 50) in Brazil during the next two years, according to a company release.


With more investments being poured into private–public partnerships to manufacture pharmaceuticals locally and pending legislation set to improve the cost and quality of domestically manufactured products, Brazil's pharma market is indeed emerging. Overall, prospects are good for Brazilian and international companies willing to partner with the government or local research institutions to develop pharmaceutical products not only directed to Brazilian consumers but also to the global market.

Marcelo Sicoli is a consultant with Enterbrazil Consultancy in Brasilia, Brazil.


1. "Brasil e India Precisam Fortalecer Parcerias," Gazeta Mercantil, May 19, 2009.

2. IMS Health Market Prognosis, March 2008.

3. Brazilian Ministry of Foreign Trade,

4. Article 196, Brazilian Constitution, 1988.


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