BRAZIL'S GENERICS MARKET SET TO CONTINUE EXPANSION

Growth in Brazil's generics drug market is expected to continue due to government investment in the sector, as well as the continuing reliance on cheap drugs in the country's lower income areas. According to official sources, generic consumption in the country doubled to 123mn units between 2001 and 2004. Around 70% of the generics market in Brazil is comprised of so-called "similares," unofficial copies of patented products.

The government has highlighted pharmaceuticals as one of Brazil's three "key"strategic industries and has been investing heavily in this area. This has included expanding the manufacturing capacity of a number of state-controlled drugmakers as well as providing funds for the private sector. Industry observers report that the authorities may now begin to encourage consolidation in the domestic industry. It has also been suggested that investment in the domestic drug industry is designed to promote the production of active pharmaceutical ingredients (APIs), an area where the country is notably deficient and is forced to rely almost exclusively on imports. The liberalisation of the market in the early 1990s resulted in the collapse of around 1,000 small-scale API producers.