Cover art by Sebastião Rodrigues. Courtesy of the artist.
|
If I were to suggest a title for your report," says Antônio Britto, "it would be, 'Trying to Fly'." Britto, a former state
governor and federal minister, and currently executive president of Interfarma, the association representing research-based
pharma companies in Brazil, reflects a more optimistic view than in 2007. The last time Focus Reports visited the country,
executives were rife with the old saw, "Brazil is the country of the future—and will always be." Now, however, they speak
in different terms. Brazil was the last country to enter the financial crisis, and the first to exit. As the host of both
the 2014 World Cup and the XXXII Olympiad in 2016, and as a country cleaning out corruption from its highest offices, it is
emerging from a decade which saw 40 million of its 200 million inhabitants joining the middle class, and creating a new block
of "pharmerging" consumers.
|
This bulging middle class, known as "Class C" in Brazil, has been the main driver in Brazil's retail pharmaceutical market,
more than doubling to U$26 billion and surpassing countries like the UK and Canada to achieve a top 10 global ranking, projected
to reach top 5 by 2015. Indeed, this demographic shift is the result of faster growth and progressive social policies under
eight years of a populist Lula government, resulting in record high average wages ($R1,629, approx. U$931 per month) and record
low unemployment (6.4%), and less income inequality, with a declining Gini coefficient, the international measure of wealth
distribution, from the help of programs like the Bolsa Família, a conditional transfer payment scheme.
Alexandre Padilha, minister of health
|
Growth has pushed inflation, which is sitting at 6.3%, at the upper range of the Central Bank's 2.5% to 6.5% target, even
with the dampening effects of a real which has hit recent highs of 1.58 reais to the dollar. Approaching record levels since
the currency first floated in 1999, the real was dubbed by Goldman Sachs as the world's most overvalued in 2009, and it has
since appreciated by nearly 10% against the U.S. dollar. All this despite macroeconomic controls by the federal government—without
which it's estimated the real would be worth 20% more—outlined by none other than Lula's successor, Dilma Rousseff, who recently
reiterated her commitment against speculators in a Financial Times op-ed piece entitled, "Brazil will fight back against the currency manipulators."
This staunch commitment to national development, and positive macroeconomic indices, have created a perfect storm for rising
standards of living, inclusive of expenditures on health. Nilton Paletta, country manager and VP, Latin America for IMS Health,
explains the shift. "The one major factor influencing country growth and pharma growth alike is the change in social class
distribution. Based on the increased stability of the economic situation, including employment and GDP growth, we have seen
Social Class D to move to C, and C to B." In 2010, Class C exceeded 100 million, with Brazil's biggest class comprising over
half its population. "This helps increase access and impacts the market's growth, because these people have more income, and
if officially employed also benefit from private health insurance, which both contribute to better access to medicines and
doctors," Paletta says.
|
PharmExec Blog
Follow Us
RSS
Bookstore
