As the country's economy becomes more stable, Brazilians now face "wealth-related" health issues including obesity, diabetes,
and cancer. Consequently, the best opportunities found within the local industry will be from common illnesses as well as
complex diseases, says Antônio Britto.
Another opportunity cited by most pharma analysts is related to the local generic-drug market, which currently accounts for
more than 20.5% of generic-drug sales. Analysts agree that the expansion of the generic-drug market in Brazil and the expiry
of various blockbuster drugs have attracted international manufacturers overseas. Moreover, the government of Brazil supports
local generic-drug manufacturers, and production figures have growing quickly as a result.
Of the 540 pharmaceutical companies in the country, 90 produce generic drugs. International manufacturers including Roche,
Pfizer, and Sanofi-Aventis for example, have developed facilities in Brazil to compete with local companies despite the strong
government support towards the domestic players. Nevertheless, the need for research and innovation continues as the region
presents many growth opportunities for access and consumption of pharmaceutical drugs and products, according to Interfarma.
Facing the challenges
"Brazil shows important advantages [compared with other countries]; however, there are also issues to be faced," says Britto.
For example, the local taxes are an issue to be dealt with when entering the market as well as well-recognized infrastructure
problems, which have always been a concern to companies because the transportation infrastructure has not been able to keep
up with demands.
While the local government has in the past invested in this area and is set to invest further to cater for upcoming international
sports events that will be staged in Brazil, goods, including pharmaceutical products, still continue to pile up at airports
and ports. According to Britto, new players must be prepared to bear the high costs of regulatory delays and taxes, of which
Brazil is among the highest in the world, as well as put up with infrastructure challenges that pose difficulties in ports
and airports. He also mentions challenges in recruiting highly technical employees for specific jobs due to the country's
education deficiencies, mainly in the areas of science, chemistry, and engineering.
International press reports have stated that the regulations in Brazil tend to be confusing; hence, partnering with a knowledgeable
supply-chain provider would be best for new companies entering the local market. In fact, the government has suggested that
new companies partner with a local firm to enter the Brazilian market. However, Britto does not believe in a formula that
applies to all companies. "It all depends on the type of company and product to be developed in Brazil and it depends on the
market it will be competing in," he says.
Britto considers Brazil to be well regulated and states that the system is rigorous. "Brazilian regulation is as good as the
best global regulations on average. The problem is not the lack of regulation, but the lack of professionals capable of putting
the existing regulation in practice."
It is clear that to succeed in this complex market, pharmaceutical companies will need to rethink their strategies carefully.
Roland Berger Strategy Consultants agree that there is no such thing as a generally valid strategy but a multi-dimensional
plan to thrive in such an unknown environment.
—Hellen Berger is a business writer based in São Paulo, Brazil.