In 2009, Brazil's domestic pharmaceutical sales totaled 1.8 billion drugs in units compared with 1.6 billion in 2008, an increase of 8.2%, according to IMS Health. Sales totaled R30.2 billion ($16.8 billion) in 2009, and 15% of drugs sold in 2009 were generic.
In fact, the country's generic-drug market grew just over 19% last year with strong third- and fourth-quarter sales that totaled R4.5 billion ($2.5 billion) for the entire year, 24% higher than in 2008 when sales totaled R3.6 billion ($2 billion). In units, generic-drug manufacturers sold 330.9 million drugs, compared with 277.1 million in 2008, according to IMS Health.
According to Alexandre Galotti, market analyst for the São Paulo-based consulting firm Tendências Consultoria Integrada, it is natural for sales to grow at an increasing rate in a relatively new market (Brazil's generic-drug market took off in 1999). In consolidated markets around the world, however, market shares continue to be high, while growth patterns tend to decrease over time.
"As the sector grows older, the market will continue expanding in terms of volume and sales, but at lower percentages," Galotti explained in Portuguese. The good news, he added, is that Brazil's market still has plenty of space to develop. "The current expiration of patents, for example, could boost the development of new generic drugs."
Another reason for Brazil's significant generic-drug growth may be the global economic crisis that began in 2008. "During times of insecurity, patients search for lower-priced drugs to continue their treatments or even start a treatment that otherwise would not be started if generics were not available," explained Galotti.
What does the future hold?
Similar global factors are likely to shape the generic-drug sector in the future, according to analysts. For example, approximately $35 billion in blockbuster patents will expire worldwide in the years to come. At the same time, health costs are expected to increase each year.
In Brazil, patent expirations could lead to the transfer of approximately R800 million ($444 million) to the generic-drug market between 2010 and 2011, according to São Paulo based PróGenéricos, whose members include large generic-drug laboratories operating in Brazil. The association aims to help increase access to generic drugs by promoting the expansion and consolidation of the market in the country.
Association data show that around 25 blockbuster-drug patents will expire by the end of 2011, leading to optimistic
The domestic generic-drug market to date has been driven by several factors, including strong political backing. Challenges remain, however, including the availability of cheaper "similar drugs," which are not true generics in terms of bioequivalence; fewer prescriptions for generic drugs possibly due to lack of knowledge from private practitioners; and limited support from Brazil's overall private sector.
Still, the market is changing, says Galotti. "Brazilians undoubtedly trust generic drugs more than before, and private health practitioners now prescribe those drugs more constantly."
In addition, according to Carlos Grabois Gadelha, vice-president of production and health innovation for Brazil's Oswaldo Cruz/FIOCRUZ Foundation, Brazil has been thriving thanks to the country's newfound macroeconomical stability, stable growth rates, and controlled inflation.
Gadelha spoke at the Valor Económico trade seminar in São Paulo in March. The vice-president added that as demand for health products and services explodes in the near future, the industry may face a lack of production capacity and slowed innovation.
To help solve the potential problem, Brazil's government aims to increase public production of drugs, restructure its official laboratories, and support local manufacture of relevant drugs, said Nelson Brasil de Oliveira, vice-president of the Brazilian Fine Chemical and Biotechnology Industry Association (Abifina), at the Valor Económico seminar.
Looking ahead, trade officials expect generic drugs to account for more than 22% of Brazil's overall market share by 2011. In this case, the country could become one of the largest generic-drug markets in the world, according to the Pró Genéricos.
Hellen Berger is a business writer based in São Paulo, Brazil.