Global Interest in Brazil
According to the National Ministry of Health, the Brazilian pharmaceutical market has grown by $28 billion annually, backed strongly by generics sales. Although government programs largely support generics, Brazil's president has also encouraged long-term foreign investment in the country's pharmaceutical industry. Thus, companies that know how to work in Brazil are finding their place in this fast growing market.
The pharmaceutical market in Brazil - the second largest among the seven ‘pharmerging’ markets (which also include China, India, Russia, Turkey, Mexico and South Korea) - is expected to grow annually by 7 to 10 % from 2008 to 2013, according to IMS Health, a leading provider of market intelligence for the pharmaceutical industry. These future forecasts are well above any growth rates for markets in North America, Western Europe and Japan.
In addition, experts predict that the Brazilian population will experience exponential growth (from 191 million in 2011 to 220 million by 2040), with significant growth in the elderly population as well as an increased incidence in chronic diseases. Currently in Brazil, the primary therapeutic research areas are focused on anti-hypertensive agents, anti-ulcer medications, oral diabetic therapeutics, lipid regulators, and muscle relaxants. All of the above factors have played a role in the growing interest in the Brazil's expanding pharmaceutical industry.
Despite the incentives, there are some challenges which foreign companies must address. Issues such as the favoring of generics and high counterfeit sales, as well as compulsory licenses, price setting, tax laws, slow product approvals and linguistic barriers, have all played a negative role. Despite these issues, however, gaining access to the fast-growing Brazilian pharmaceutical market has proven to be profitable for companies who know how to go about it.
According to marketing experts in Brazil, creating strong partnerships with local companies is a key factor for multinational companies wishing to succeed in the country. Foreign companies can benefit from a local company's knowledge of the local market as well as their relationships with health care-related organizations and institutions. In turn, local companies are increasingly interested in establishing partnerships with international companies, especially companies that are strong in R&D. The Brazilian government has invested largely in generics and vaccines, and as a result these are the focus of foreign companies interested in collaborating with Brazilian companies.
One example of this is the partnership between Celesio, a German leading international service provider in the pharmaceutical/health care industry, and Oncoprod Group, a leading Brazilian wholesaler specializing in specialty cancer pharmaceutical products. In a recent negotiation, Celesio acquired 60 % of Oncoprod Group. Celesio's selection was based on the fact that in Brazil, specialty pharmaceuticals are available almost exclusively in hospitals and specialized clinics rather than regular pharmacies due to the fact that they have specific requirements for handling and storage. Thus, hospitals and clinics must rely primarily on specialty distribution companies such as Oncopod for these products.
In 2009, Celesio bought a majority stake in Brazil's largest drug distributor Panpharma. Following recent government cuts to drug reimbursements in Germany, Celesio chose to invest in the more profitable Brazilian market rather than at home. This trend is becoming increasingly common. The German-based company addressed cultural and linguistic barriers by having Celesio’s representatives in Portugal manage the Brazilian Panpharma counterparts. This system worked well for Celesio, but not all companies have this as an option, and they must partner with language service providers in order to overcome linguistic and cultural barriers.
With Latin America’s largest and strongest economy, and increasing expenditures per capita in pharmaceuticals, the future of the Brazilian pharmaceutical market looks very promising. If foreign companies know how to choose the right partner to help them navigate their way, they can greatly benefit from investing in Brazil’s quickly growing pharmaceutical market. In addition to choosing the right Brazilian pharma company, choosing the right language service provider to help overcome language and cultural barriers also plays an important role. We at Language Connections have experience working with companies in the life science industry that have invested and are working in Brazil, and we know the importance of effective communication in fostering successful business relationships.
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