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As part of the BRIC bloc with Russia, India, and China, Brazil is one of the world's leading emerging economies and is also considered by IMS Health to be one of seven pharmerging nations, which also include Mexico, Turkey, and South Korea.
PharmTech: It has been noted that Brazil's northern region is growing at the same pace as most of China and that Brazil expects to continue to grow its economy. Are there key goals for the bio/pharmaceutical sector in particular?
Palmeria: Brazil should continue growing at a rate of 5% per year in the next few years, largely driven by its internal market. In the case of the pharmaceutical market, the past few years have been prosperous, due to the increased income in the lowest levels of the population that began to acquire more health products, and to the increased public spending to attend the new public health needs of the population.
This positive environment of the past 10 years has allowed for the modernization of the Brazilian pharmaceutical industry and its increased production capacity. The main challenge in the next few years will be to uphold the supply of health products for the increasing demand, while at the same time consolidating research, development, and innovation efforts within the country, especially in the area of biotechnology products.
PharmTech: The Brazilian government plans to move 16 million people out of poverty and into the healthcare system during the next 10 years. Is this part of a larger government initiative? What progress been made to date?
Palmeria: The recent economic boom in Brazil..., together with the government policies for income transfer, have taken more than 36 million Brazilians out of poverty, which increased the middle class by more than 50% of population. This result is extremely relevant for a country that still has a very high rate of income inequality. Even so, it is estimated that there are around 16 million Brazilians with a family income of less than US$45 per month, which are families that are difficult to reach by the traditional measures of the state.
It was for these reasons that the Brazilian government created the Programa Brasil Sem Miséria (Brazil without Poverty) in 2011 to take this underprivileged group of Brazilians out of poverty and give them access to the country's main social services. Within the scope of the program, healthcare is included as a fundamental right and an important pillar in the public policy to include this part of the population.
PharmTech: Moving so many people into the healthcare system will provide great business opportunity—as well as challenges—for the healthcare and drug sectors. What steps is the government taking to address these? What advantages may exist for bio/pharmaceutical companies outside of Brazil?
Palmeria: The key word to healthcare in Brazil is access. The government has been working hard to increase the supply of medicines to the populace. On the side of development and production in the country, this effort involves several fronts: technology transfer agreements via public-private partnerships; finance for the development and production of strategic products for the Brazilian health system; continued improvement of the regulatory regime; and centralized purveying and negotiating directly with producers.
The opportunities for companies arise inasmuch as the government is able to acquire more products and sustain the adoption of new protocols in the Brazilian Universal Health System.
PharmTech: What is your country's short- and long-term perspective on the manufacture of biopharmaceuticals, including biosimilars?
Palmeria: The Brazilian government is working to construct an industrial platform for biotechnology within the country that, in the short-term, produces biological products that are not new (biosimilars). This industrial structure should, however, include the possibility to innovate and develop new biotechnolgy products in the longterm.
PharmTech: GE Healthcare and Amgen have recently made bold moves to acquire facilities and companies in São Paulo. Have you seen increased action along these lines from multinational bio/pharmaceutical firms? Do you expect more?
Palmeria: In the past two years, BNDES has received a growing number of consultations, both formal and prospective, from foreign companies in the health industry that are interested in the Brazilian market. Yes, we do expect more—and that these activities come to be real investments in the Brazilian health industry. Investments that contribute to the established industrial technology and that contribute to the challenge of increasing the access of the Brazilian public to health products and services will be very welcome.
PharmTech: Brazil's regulatory system and healthcare policies seem to be stable and well-respected on a global scale, which have contributed to its role as a pharmerging nation. What components of this governance structure hold advantages for outside bio/pharmaceutical companies wanting to do business in Brazil (e.g., IP rights, taxes, regulatory approvals, market access)?
Palmeria: Companies that wish to invest in the Brazilian health industry will encounter an extremely favorable environment, especially for projects regarding the abovementioned question. Brazil has a regulatory regime and intellectual property environment that are in compliance with global standards, as well as a scientific and technological base that is consolidated and expanding. Finally, regarding long-term credit, BNDES and other government agencies offer favorable conditions to support industrial investments in production facilities as well in research, development, and innovation activities.
PharmTech: Brazil is known as a "pharmerging" market by the bio/pharmaceutical industries in North America and Europe. How do you view this label? How do you see your country in the global marketplace in terms of the bio/pharmaceutical space?
Palmeria: Today, Brazil is among the 10 largest economies in the world. With a population of 180 million, a vast territory, and immense mineral wealth, the country is positioned as a promising economy. With a robust middle class, a diversified industrial base, a sustainable energy matrix, and a stable democracy that is anchored in solid institutions, the country is clearly on a path for growth—led not only by internal consumption, but also by a significant volume of exports. In this scenario, Brazil can legitimately aspire to be one of the world's five foremost economies.
As far as the health industry is concerned, the scenario is even more promising as it is challenging. As mentioned, the income-transfer programs, together with economic growth, have brought 36 million Brazilian out of poverty to become real citizens able to consume goods and services. The improvements in quality of life of Brazilians have made demographic changes that will give Brazil, in just a few decades, a demographic pyramid similar to that of Europe. Life expectancy in Brazil is currently 73 years old. The change in the epidemiological profile of the populace is also impressive: today, the average Brazilian has more chronic-degenerative diseases than infecto-contagious illnesses. At the same time, it is important to point out the ambitious public health system which covers more than 100 million people. According to the Constitution of Brazil, health is the right of everyone and it is an obligation of the State to provide it.
Our pharmaceutical industry, which today holds the 7th rank in the world, grows by double digits, without indications of slowing down. Projections indicate that Brazil will occupy the 6th position by 2015. The Brazilian government has been stimulating the industry by supporting and financing projects that contribute to reducing the vulnerabilities of our health system—a fact that together with a continually improving regulatory regime have shown signs of the strategic nature of our health industry. Therefore, in this promising scenario it is indeed possible to affirm that, more than having a label of 'pharmerging market,' Brazil is has all the conditions to become a solid and developed pharmaceutical market in the short run, and it has huge opportunities for those that wish to take part.
PharmTech: The growing occurrence of South–South trade is leading to some multinational companies (as well as nations) to question their current market-growth strategies. How does your organization view South–South trade in terms of benefits, and perhaps disadvantages?
Palmeria: From our viewpoint, the increased volume of South–South trade reflects the search for opportunities and exchange among commercial partners with complementary interests. Regarding Brazilian interest in developing a strong biotechnology industry in line with national interests, our country is obviously seeking partnerships with enterprises and governments where this technological wave has been consolidated, regardless of the regions or geographic location.