Brazil Plans to Upgrade State-Run Drugmakers

Senior health officials in Brazil have accepted recent criticism of the state-run drug-manufacturing sector, which was recently blamed for an acute shortage of essential medicines earlier this year. The country's 18 public sector drug producers make eight of the fifteen treatments distributed under Brazil's HIV/AIDS programme, but much of the sector is reliant on imported raw materials, particularly from India.

Indeed, dependence on imported raw materials has been a long-standing problem for both public and private companies in Brazil's drug industry. State-run producers are dependent on public sector procurement contracts, and recent supply shortfalls and quality infringements have been awkward, especially in view of new modernisation funding totalling BRL80mn (US$30.08mn) awarded to a number of key government-run producers.

Meanwhile, private sector drugmakers are becoming increasingly important to the government's ambitions to widen public access to healthcare, although there remain doubts over the sector's future development. Brazil has a well-established local manufacturing industry, and the government has pledged BRL700mn (US$259.34mn) on 15 new projects involving private companies. Nevertheless, the introduction of a new generics-dominated reimbursement list and moves to encourage foreign generics makers indicate that authorities are unwilling to rely entirely on the domestic industry to meet its population's healthcare requirements.