BRAZILIAN GENERICS MARKET QUADRUPLES IN FOUR YEARS
New market data indicated that the size of Brazil's generics market has increased by four times since 2001, when a law recognising the products as a distinct entity was introduced. With overall market share now estimated at 11.5%-or about US$1.5bn -- and growth at 20% per year, a growing number of major players are entering the sector.
Local media sources note that even producers of non-bioequivalent copies -- known in Brazil as "similar" drugs --are developing new generics, partly boosted by the drug regulator's goal of introducing mandatory bioequivalence tests by the end of the decade. However, the four largest players in the sector are all Brazil-based, and account for two-thirds of the generics market's annual value. Nevertheless, foreign players, including Novartis and Germany's Merck KGaA as well as a number of Indian firms, are stepping up their local presence.
Brazilian producers are confident that price conditions are positive enough to justify heavy investment, as local law stipulates that generic equivalents must offer a minimum 35% discount on the reference molecule. Even with Brazil's harsh price controls, margins are high enough to have delivered strong growth. Consequently, a leading pharmaceuticals industry source has simply commented that in Brazil, "the ones who make generics are the ones who are growing."
Taking one example, local firm Medley has leapfrogged 23 places in sales rankings in the last four years, and gained a market share of 28.83%. The company now reports that generics account for 55% of annual turnover.
Meanwhile, the government continues to see generics as a key element in plans to expand healthcare, mainly by using the sector as a relatively cheap means of treatment. Although it is far from certain that generics will expand treatment to the 55% of the population living in abject poverty in the short term, the sector's value is expected to reach US$2.7bn by 2009.