José Correia da Silva, president of ABIQUIFi, an association which represents the producers of pharmachemical and pharmaceutical
raw materials, states another important factor is the growth and the development of government healthcare expenditures: "The
Brazilian government spends a lot of money on SUS (Sistema único de Saúde/Unified Health System), which comprises a healthcare
infrastructure and a strong centralization for the purchase and distribution of medicines."
Fernando Pimentel, minister of development, industry and foreign trade
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These expenditures are accounted for in the R$15 billion (US$8.57 billion) institutional market, the counterpart to a US$26
billion retail spend which remains overwhelmingly out of pocket. "The fact is, there is a market of 200 million potential
consumers that have just arrived to a medium level of medical attention. Part of the reason for the increase is that the population
is so far from a level considered normal by the standard of more wealthy countries. To achieve a level of a Spain, or an Italy,
Brazil must double again, at minimum," Correia da Silva notes.
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One of the contributing factors to perhaps seeing these figures double again is, interestingly, how the figures themselves
are calculated, due to the fact that Brazil has adopted electronic invoicing. IMS's Paletta explains the importance of the
changes: "This had made the market become more visible and most likely dramatically decreased informality. This means that
we are seeing two elements to the growth figures. One is the real growth, which is when you compare 2011 to 2007 at the same
base by looking at how many wholesalers or data providers we had in our panel in 2007 versus the same panel in 2011." The
other, which accounts for some 4% to 5% of the 18% year-over-year growth, "comes from the smaller, regional wholesalers and
pharmacy chains. They were not represented before in our data panel. Now we can measure the impact of those wholesalers who
were not in the panel. Therefore, the market is certainly growing, but at 13% to 15% growth rate, though this is still an
important growth."
Dirceu Barbano, director, ANVISA
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Paletta speaks to the practical repercussions for companies operating in a rapidly growing space: "This has changed market
dynamics, because pharma companies used to rely solely on big wholesalers and pharmacy chains. Now they see opportunity to
go to the small regional wholesalers who represent approximately 10% of market volume, or some R$4 billion (US$2.29 billion);
however, to play in this market opportunity it is required a completely different 'go-to-market' strategy and certainly a
customized 'business model' because the market conditions are quite different."
Nilton Paletta, country manager and vp, Latin America, IMS Health
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Such conditions are influenced at the highest level by Alexandre Padilha, minister of health, an MD with a history of directing
indigenous and malaria health projects, and whose tenure began along with the current administration's in January 2011. "The
new government believes that good health and quality of life can be achieved through the cooperation and collaboration of
many government sectors and other partners," he says. Padilha affirms that, although assuring access is a challenge, health
is a right, and therefore the issue must be addressed: "The Brazilian Constitution recognizes, under article 196, that 'health
is a right of all and a duty of the State.' That means that addressing the social determinants of health is both a conceptual
and a legal imperative for our government. Brazil firmly believes in universal access and supports all initiatives that promote
universal health care."
Lauro Moretto, executive vp, Sindusfarma
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Padilha suggests sustainable and predictable financing, new technologies, and the close link between health indicators to
social issues as pillars of the administration's path to achieving the Constitution's lofty goal. His counterpart at the Ministry
of Development, Industry and Foreign Trade, Fernando Pimentel, suggests one way: following on the success of courting IBM
and General Electric, who in 2010 invested hundreds of millions of dollars in local R&D facilities. Pimentel says it's crucial
to attract such international equivalents in the pharmaceutical industry, although "Brazil has difficulties that we need to
overcome rapidly, especially in areas of patents, and some specific types of research, such as in genetics, in live-cell organisms,
and access to biodiversity. Until these are resolved the answer to this question will be up in the air."
Nelson Mussolini, executive vp Sindusfarma
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Jose Bastos, president of MSD, concurs, and refines Pimentel's approach: "Most important among these are the basics—the educational
system. It's good, but it needs to be a lot better, and produce many more people in the universities who can perform research."
Bastos further stresses private/academic partnerships, such as the kind spurred by the aforementioned multinationals, as well
as identifying areas where Brazil is already very strong, to go towards creating a pharmaceutical equivalent of an Embraer,
Vale, or Petrobras. "In health, there are areas where, because of the particularities of the country, there is good research,
such as in infectious disease. We must better identify those centers and approach them to create a closer relation between
them and industry, to improve the visibility of the work they do and further opportunities for cross-collaboration," Bastos
notes.
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