Brazil's traditional commitment to healthcare improvement and growing middle-class population present significant revenue-generating opportunities for multinationals in the country. The Brazilian pharmaceutical market is now an integral part of all large pharmaceutical companies' strategic outlook. However, given the significant influence of the Brazilian government in the pharmaceutical sector and its determination to promote the domestic pharmaceutical industry, we believe local drugmakers will outpace multinationals.
Headline Expenditure Projections
- Pharmaceuticals: BRL52.4bn (US$26.8bn) in 2012 to BRL57.0bn (US$26.4bn) in 2013; +8.7% in local currency terms and -1.6% in US dollars terms. Forecast revised downwards from Q413 due to macroeconomic forecast changes.
- Healthcare: BRL410.8bn (US$210.1bn) in 2012 to BRL442.4bn (US$204.8bn) in 2013; +7.7% in local currency terms and -2.5% in US dollars. Forecast revised downwards from Q413 due to less optimistic macroeconomic forecast data.
Risk/Reward Rating: Brazil scores 61.5 in BMI's Pharmaceutical and Healthcare Risk/Reward Rating (RRR), making it the fourth most attractive pharmaceutical market in America. We have re-weighted the RRR components to improve the tool, and adjusted scores for all markets in the Pharmaceuticals and Healthcare reports.
Key Trends And Developments
- In October 2013, Brazil's local media Valor Economico reported that by June 2013 half of Brazilian pharmaceutical sales were generated by domestic manufacturers. In volume sales terms, local companies accounted for over 70% of the market share.
- In September 2013, the Brazilian government was planning to renew the 'buy Brazil act' law adopted in 2010, which has introduced a preference for goods and services produced in Brazil of up to 25% in government procurements.
- In September 2013, Brazil's National Survey on Access, Use and Promotion of Rational Use of Drugs (Pesquisa Nacional sobre Acesso, Utilizacao e Promocao do Uso Racional de Medicamentos (PNAUM)) was initiated. This will evaluate the consumption of medicines in the country.
- In September 2013, Brazil's National Health Surveillance Agency (ANVISA) suspended new applications for medicine registrations, filed after July 31 2013, with 'Good Bioavailability and Bioequivalence Practices' certifications issued by clinical research centres located outside of Brazil.
- In August 2013, Brazil's National Agency for Sanitary Surveillance (ANVISA) published a new resolution on August 16 that updates the regulatory procedures for certificates of good manufacturing practices for medicinal products.
BMI Economic View: With data indicating that Brazil's economic recovery is beginning to falter, we are revising down our 2013 and 2014 real GDP growth forecasts, as we believe that a number of headwinds will temper economic activity in the coming months. In particular, we believe that the aggressive sell-off in the exchange rate, combined with rising interest rates and elevated inflation will see private consumption growth underperform our previous expectations.
BMI Political View: We see a number of issues on the horizon that could weigh on public support for President Dilma Rousseff in the coming months, making her re-election more challenging than current polling data suggest. That said, despite facing significant political headwinds in recent months, she remains the frontrunner in next year's presidential race, suggesting some resilience in support for her.