Access the Brazilian market

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In Brazil, the market for pharmaceuticals is worth US$35 billion and is expected to be the third largest in the world by 2020, after the U.S. and China.

Total healthcare expenditure already exceeds US$220 billion, and there is a growing private market - a quarter of the country’s 200 million people are currently insured this way.

The rise of private payers is a key trend in Brazil, as the growing middle class seeks an improved quality of care. The value of healthcare shares has risen enormously in recent years, including an increase of above 50% in 2010.

The private market is very concentrated, with a small number of major players at the top. Although there are a variety of health care companies - including insurance companies, HMOs, self-funded plans, cooperatives and charitable groups - corporate plans take up around 75% of the market.

As a result of these figures, interest in South America’s leading economy has never been greater. For pharma and medical device companies targeting expansion in Brazil, it’s essential to understand the dynamics of the healthcare market.

Market access in Brazil

The Brazilian system presents unique challenges for companies seeking to access the market and promote adoption of their drugs and medical devices.

The geography of the country is one factor complicating market access efforts. It’s difficult to engage with payers and providers that are spread out over sparsely populated areas, and there isn’t always the right level of IT infrastructure to build up relationships remotely.

There’s a high level of bureaucracy. It’s estimated that establishing a presence in the country can take up to two years, and regulatory submissions can take an additional two years to go through. Corruption also remains an obstacle in certain areas, despite government initiatives to increase transparency.

Despite the costs and the challenges, Brazil remains a very attractive market for the life sciences industry. While the economic outlook for the Brazilian economy in general is not as positive as in recent years, Moody’s forecast of 2% growth in 2014 is encouraging in comparison with the struggling developed economies.

For the life sciences industry in particular, there are reasons to be positive about investing in Brazil. In recent years, several measures from the Brazilian government have decreased taxation on pharmaceuticals, including a measure last year in the key state of São Paulo, which suspended some taxes on goods purchased by the Foundation of Popular Medicines (Fundação para o Remédio Popular). The government also offers incentives for companies to manufacture drugs or devices within the country.

Partnering for success

Encouraged by the state, technology transfer partnerships are one way for global pharma companies to get a foot in the door. In 2012, Boehringer‐Ingelheim teamed up with the Institute of Drug Technology (Farmanguinhos) to supply the active ingredient of Pramipexole, one of 30 such agreements to be made by multi-nationals so far.

For small and medium-size pharma companies, it often makes sense to seek partnership with an existing local player or a global company with a presence in the country. In addition to providing access to vital local knowledge, this avoids the cost and timelines associated with going it alone.

Wondering why we haven’t posted in a while?

Our blog has moved to a different location.
Visit http://blog.basecase.net to check out our latest blog posts.