Brazil Pharmaceutical Market Overview ' Expanding healthcare access drives double-digit sales growth

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Brazil Pharmaceutical Market Overview ' Expanding healthcare
access drives double-digit sales growth
Published on August 2010

Report Summary

Introduction

Brazil's retail pharmaceutical market was valued at $12.6 billion in 2009, having grown by 14.3% between 2008 and 2009. Key growth
drivers include the expanding population, improved access to healthcare, and the burgeoning middle class which is increasingly
opting for branded drugs. Consequently, Big Pharma is targeting Brazil to off-set slowing sales growth in more developed markets.

Scope

*Overview of socioeconomic and demographic trends, healthcare system, regulation, pricing, reimbursement and intellectual property
position in Brazil

*Assesses the size of Brazil's pharmaceutical market by prescribing setting, therapy area, leading brands and by leading companies

*Examines Brazil's generics and biosimilars landscape in terms of regulatory issues, level of penetration, key players and degree of
brand erosion

*Quantifies Brazil's R&D and manufacturing infrastructure for the leading pharmaceutical companies, including key metrics and
domestic M&A analysis

Highlights

Brazil spent 10.8% of its GDP on both retail and hospital prescribed pharmaceuticals in 2009, reflecting the government's changing
priorities, prioritizing healthcare including initiatives to expand access to medicines.

Intellectual property protection remains problematic for branded pharma, with issues associated with patent linkage, drawn out patent
reviews, conflict between the two agencies involved in assessing patent applications, and the fact that there is no set period of data
exclusivity.

Strong market growth in conjunction with improving regulatory standards has led to Brazil becoming a hotbed for investment from
both multinational and domestic companies. Big Pharma players are gaining a stronger presence through M&A, expanding
operations, and new product launches.

Reasons to Purchase

*Evaluate the evolving regulatory landscape and the impact of pricing and reimbursement controls on market access in Brazil.

*Quantify the size and growth of the prescription pharmaceutical market in Brazil, analyzing key therapy areas, brands and

Brazil Pharmaceutical Market Overview ' Expanding healthcare access drives double-digit sales growth (From Slideshare) Page 1/10


companies.

*Assess drivers and resistors of generic and biosimilars uptake in Brazil.

Table of Content

ABOUT DATAMONITOR HEALTHCARE 2
About the Healthcare Strategic Analysis Team 2
Geographic specific reports: 2
Global issue reports: 2
1. Brazil - Executive Summary 3
Strategic scoping and focus 3
Key findings - healthcare drivers and resistors in Brazil 4
Key findings - healthcare drivers and resistors in Brazil 4
Brazil - Socio-demographic and economic analysis 7
Socio-demographic trends 7
Socioeconomic trends 8
Brazil - Healthcare system and drug regulatory analysis 11
Brazil healthcare expenditure 11
Brazil healthcare system overview 12
Brazil regulatory issues 13
Brazil pricing and reimbursement issues 13
Brazil - Prescription pharmaceutical sales analysis 15
Pharmaceutical market size 15
Leading therapy areas 15
Leading pharmaceutical brands 15
Leading pharmaceutical companies 15
Brazil - Drug expiry analysis 17
Brazil retail generics market 17
Brazil brand erosion post patent expiry 17
Brazil biosimilars market 17
Brazil - Pharmaceutical Industry Infrastructure analysis 19
Pharmaceutical industry infrastructure overview 19
Related reports 21
Upcoming related reports 21
Table of Contents 22
2. Brazil - Socio-demographic and economic analysis 23
Key findings 23
Socio-demographic trends 23
Socioeconomic trends 23
Demographic trends in Brazil 25
Brazil's population expected to expand rapidly, peaking in 2040 26
Declining number of births with improving infant mortality rates 28
The Brazilian population is slowly aging 29
The Brazilian population is living longer 30



Disease burden in Brazil 31
Heart disease a leading cause of death in Brazil as in more developed markets 32
Violence and social deprivation still significant despite progress 33
An unexpectedly high rate of prostate cancer deaths representative of gaps in healthcare provision 34
Political climate 35
The end of the Lula government but his legacy will live on 35
The effect of the global economic crisis has been felt less in Brazil 36
PAC gives Brazil much needed infrastructure development 36
Is the Brazilian economy in danger of overheating' 37
Debt reduction a fundamental feature of Lula's economic policy 38
Increased prosperity has brought income disparities 41
Business environment 41
Setting up business in Brazil can be complex and difficult 41
The Brazilian tax system is complicated and confusing 42
Workforce is extensive but poorly educated 42
3. Brazil - Healthcare system and drug regulatory analysis 44
Key findings 44
Brazil healthcare expenditure 44
Brazil healthcare system overview 44
Brazil regulatory issues 45
Brazil pricing and reimbursement issues 45
Healthcare system 47
Healthcare expenditure in Brazil is rising 47
Growing cost pressures may lead to a cut in the medication budget 49
Healthcare is delivered through two systems 50
The SUS provides universal healthcare coverage in Brazil 51
SUS management has become less centralized 52
Private health insurance system - most Brazilians use the SUS, but the private health segment is expanding 53
Brazil has sought to expand healthcare coverage to reduce inequalities 54
The Family Health Program reduces burden on hospitals and specialist care 54
The Popular Pharmacy program was set up to increase the supply of medicines to the poor 55
Regulatory issues in Brazil 56
Regulatory issues in Brazil 56
Drug approval and regulatory processes - pharma companies regard Brazil's regulatory environment as unpredictable 56
ANVISA is the national body in charge of regulating medicines in Brazil 56
Similares are being phased out - bioequivalence studies are required for generic drugs in Brazil since 2003 57
Plant inspections are causing lengthy approval times in Brazil 57
ANVISA introduces a new decree on pharmacovigilance 58
Intellectual property protection in Brazil 58
The speed of patent review is slow and backlogs exist 58
There is conflict between the two agencies involved in assessing patent applications 59
There is no set period of data exclusivity in Brazil 59
Compulsory licenses on HIV/AIDS drugs were used only as a threat until May 2007 60
Pipeline patents have awarded several HIV/AIDS drugs extra protections but could be overruled in the future 61
Drug counterfeiting is on the rise in Brazil 61
Drug importation - imported pharmaceuticals have to be registered with ANVISA 62
Pricing and reimbursement in Brazil 63
Pricing issues in Brazil 63



Pricing of new drugs is controlled by the CMED 63
Prices of marketed pharmaceuticals are controlled through price freezes and increases 64
Antiretroviral therapies are priced low in Brazil 65
Reimbursement issues in Brazil - Reimbursable pharmaceuticals are included on the National list of Essential Medicines 66
The Pharmaceutical Care in Primary Healthcare program provides access to essential drugs 67
Strategic program for pharmaceutical assistance includes medicines for neglected diseases 67
The Specialist Pharmaceutical Assistance Component provides specialist and high-cost medicines 68
Despite the SUS reimbursement programs, many patients still do not have access to medicines 68
4. Brazil - Prescription pharmaceutical sales analysis 70
Key findings 70
Pharmaceutical market size 70
Leading therapy areas 70
Leading pharmaceutical brands 70
Leading pharmaceutical companies 70
Pharmaceutical market size in Brazil 72
Leading therapy areas in Brazil 74
Central nervous system was the largest therapy area in terms of sales 76
Musculoskeletal drugs have shown the fastest growth rates 76
Urology and metabolic have shown the slowest growth rates 77
Leading pharmaceutical brands in Brazil 78
Top-selling drug Dorflex sees its franchise extended with follow-up product 81
Cialis to maintain momentum thanks to lifecycle management strategy 81
Lipitor is expected to continue reaching high sales even after patent expiration 81
Leading pharmaceutical companies in Brazil 82
Sanofi-Aventis is now the leading pharma company in Brazil following its acquisition of Medley 83
Novartis's Brazilian retail sales growth driven by its Diovan franchise 84
The leading domestic companies are exhibiting double-digit growth rates 86
EMS 87
Eurofarma 87
Neo Quimica 88
5. Brazil - Drug expiry analysis 89
Key findings 89
Brazil retail generics market 89
Brazil brand erosion post patent expiry 89
Brazil biosimilars market 89
Brazilian generics market dynamics 91
Similares versus true generics 92
Brazilian generics volume uptake 94
Brazilian generics value uptake 95
Brazilian generics market size 96
Drivers and resistors in the Brazilian generics market 97
Several legislative measures have driven generic uptake 98
Loose patent regulations lead to increased market potential for generic players 99
Market pressures drive down generics prices below the mandatory 35% discount 99
International pressures could hamper generics importers 100
Similares provide affordable healthcare, but bioequivalence legislation has fueled the uptake of true generics 100
Key generics players in the Brazilian market 101
Acquiring local generics players is key strategy for foreign players to penetrate the Brazilian market 102



Sanofi-Aventis extends its dominance in Brazil 103
Pfizer seeks to extend its presence in Brazil 104
Valeant acquires two Brazilian generic drug companies 105
Lupin committed to gaining ground in Brazil 105
Opportunities for the generics industry 106
Small molecule brand erosion in the Brazilian market 107
Number of generic entrants by therapy area 107
Brazil biosimilars market dynamics 108
Drivers and resistors of biosimilar growth in Brazil 108
Rising healthcare costs 108
Biosimilars approval process enacted in 2005 109
Indian-based companies dominate the market 109
New and future biosimilar launches 111
Opportunities for the biosimilar industry 112
Monoclonal antibody therapies could soon face biosimilar incursion in Brazil 113
Biosimilars in development internationally 115
6. Brazil - Pharmaceutical Industry Infrastructure analysis 116
Key findings 116
Pharmaceutical industry infrastructure overview 116
Key company infrastructure in Brazil 117
EMS 118
Novartis 121
Ache Labs 125
Medley 128
Sanofi-Aventis 128
Eurofarma 131
Pfizer 134
Bayer Schering 138
Castro Marques 141
Merck & Co. 143
7. Bibliography 147
Brazil - Executive Summary 147
Publications and online articles 147
Brazil - Socio-demographic and economic analysis 148
Datamonitor reports and products 151
Brazil - Healthcare systems and regulations 151
Brazil - Prescription pharmaceutical sales 155
Brazil - Drug expiry analysis 156
Brazil - Pharmaceutical industry infrastructure analysis 160
APPENDIX 162



Exchange rates used in this report 162
Datamonitor prescription pharmaceutical definition and therapy area classification 163
About Datamonitor 164
About Datamonitor Healthcare 164
Datamonitor consulting 164
Disclaimer 165
Disclaimer 166
List of Tables
Table 1: Brazil - changes in the key value drivers of the Brazilian pharmaceutical market, 2005-09 5
Table 2: Brazil - demographic indicators, 2005 and 2010 8
Table 3: Brazil - key economic indicators, 2005-2012 10
Table 4: Brazil - healthcare expenditure indicators, 2006-09 12
Table 5: Brazil - a range of pricing and reimbursement tools are used, 2010 14
Table 6: Brazil - retail sales and volume of the pharmaceutical market $ and IMS Standard Units), 2009 16
Table 7: Brazil -key metrics for the retail generics and biosimilars market, 2010 18
Table 8: Brazil - R&D and manufacturing infrastructure data, 2010 20
Table 9: Brazil - demographic indicators, 2005 and 2010 25
Table 10: Brazil - top 10 causes of mortality, 2004 31
Table 11: Brazil - disability-adjusted life years (DALY) rates compared to Australia, Japan, the other BRIC nations, North America,
and the five major EU markets (5EU), 2009 32
Table 12: Brazil - key economic indicators, 2005-2012 36
Table 14: Brazil - key health system indicators, 2000-09 51
Table 15: Brazil - a range of pricing and reimbursement tools are used, 2010 63
Table 16: Brazil - retail sales and volume of the pharmaceutical market $ and IMS Standard Units), 2009 73
Table 17: Brazil - retail pharmaceutical sales by therapy area ($m and %), 2005-09 75
Table 18: Brazil - retail pharmaceutical volume by therapy area (SUm and %), 2005-09 76
Table 19: Brazil - retail sales growth for top 20 pharmaceutical brands ($m and %), 2009 79
Table 20: Brazil - retail volume growth for top 20 pharmaceutical brands (SUm and %), 2009 80
Table 21: Brazil - retail sales growth for the leading international pharmaceutical companies ($m and %), 2009 84
Table 22: Brazil - retail volume growth for the leading international pharmaceutical companies (SUm and %), 2009 85
Table 23: Brazil - retail sales growth for the leading Brazil-based pharmaceutical companies ($m and %), 2009 86
Table 24: Brazil - retail volume growth for the leading Brazil-based pharmaceutical companies (SUm and %), 2009 87
Table 25: Brazil -key metrics for the retail generics and biosimilars market, 2010 90
Table 26: Brazil - comparison of generic penetration versus other major pharmaceutical markets ($ billion and %), 2007-08 (retail
market only for Brazil) 91
Table 27: Brazil - retail sales of the leading generics companies, 2009 101
Table 29: Brazil - a comparison of biosimilar prices in four government tender bids in Brazil 110
Table 30: Brazil - retail sales of biologics (both brands and biosimilars), 2009 111
Table 31: Brazil - retail sales of branded monoclonal antibodies, 2009 113
Table 32: Brazil - retail sales growth for the leading international pharmaceutical companies ($m and %), 2009 117
Table 33: Brazil - EMS's R&D and manufacturing infrastructure, 2010 118
Table 34: Brazil - EMS's R&D and manufacturing infrastructure data compared with other top 10 companies in Brazil, 2010 119
Table 35: Brazil - Novartis's R&D and manufacturing infrastructure, 2010 121
Table 36: Brazil - Novartis's R&D and manufacturing infrastructure data compared with other top 10 companies in Brazil, 2010 122
Table 37: Brazil - Ache Labs's R&D and manufacturing infrastructure, 2010 125
Table 38: Brazil - Ache Labs's R&D and manufacturing infrastructure data compared with other top 10 companies in Brazil, 2010 126



Table 39: Brazil - Sanofi-Aventis's (post acquisition of Medley) R&D and manufacturing infrastructure, 2010 128
Table 40: Brazil - Sanofi-Aventis's (post acquisition of Medley) R&D and manufacturing infrastructure data compared with other top 10
companies in Brazil, 2010 129
Table 41: Brazil - Sanofi-Aventis's Brazilian-based M&A activity, 2008-2010 130
Table 42: Brazil - Eurofarma's R&D and manufacturing infrastructure, 2010 131
Table 43: Brazil - Eurofarma's R&D and manufacturing infrastructure data compared with other top 10 companies in Brazil, 2010 132
Table 44: Brazil - Pfizer's R&D and manufacturing infrastructure (post-acquisition of Wyeth), 2010 134
Table 45: Brazil - Pfizer's R&D and manufacturing infrastructure data compared with other top 10 companies in Brazil, 2010 135
Table 46: Brazil - Bayer Schering's R&D and manufacturing infrastructure, 2010 138
Table 47: Brazil - Bayer Schering's R&D and manufacturing infrastructure data compared with other top 10 companies in Brazil, 2010
138
Table 48: Brazil - Castro Marques's R&D and manufacturing infrastructure, 2010 141
Table 49: Brazil - Castro Marques's R&D and manufacturing infrastructure data compared with other top 10 companies in Brazil, 2010
141
Table 50: Brazil - Merck & Co.'s R&D and manufacturing infrastructure, 2010 143
Table 51: Brazil - Merck & Co.'s R&D and manufacturing infrastructure data compared with other top 10 companies in Brazil, 2010
144
Table 52: Currency exchange rates, 2010 162
Table 53: ATC (anatomical therapeutic chemical) classification codes assigned to a given therapy area within the prescription
pharmaceutical market 163
List of Figures
Figure 1: Brazil - key value drivers of Brazil's pharmaceutical market, 2009 4
Figure 2: Brazil - drivers and resistors facing branded pharmaceutical companies 6
Figure 3: Brazil - population and population growth rate, 1950-2050 26
Figure 4: Brazil - population growth compared to Australia, Japan, the other BRIC nations, North America and five major EU markets
(5EU), 1950-2050 27
Figure 5: Brazil - birth rates per 1,000 individuals compared to Australia, Japan, the other BRIC nations, North America and the five
major EU markets (5EU), 1950-2050 28
Figure 6: Brazil - proportion of population over 65 years compared to Australia. Japan, the other BRIC nations, North America and the
five major EU markets (5EU), 1950-2050 29
Figure 7: Brazil - life expectancy compared to Australia, Japan, the other BRIC nations, North America and the five major EU markets
(5EU), 1950-2050 30
Figure 8: Brazil - gross domestic product (GDP) per capita growth rate compared with Australia, Japan, the other BRIC nations, North
America and the five major EU markets (5EU), 2005-09 38
Figure 9: Debt trap rankings for the Brazil, the UK, France, Germany, Italy, Spain, US, Canada, Australia and Japan, 2010 39
Figure 10: Total debt against GDP, and total cost of servicing debt against total government expenditure (minus annual budget
balance) in Brazil, Japan, UK and US ($ billion), 2009 40
Figure 11: Unemployment rates in Brazil, the five major EU markets, North America, Japan, Australia and the other BRIC nations,
1990-2008 42
Figure 12: Brazil - proportion of GDP expenditure on healthcare is significantly higher than for the other BRIC nations, 2006 47
Figure 13: Brazil - structure of the healthcare system, 2008 50
Figure 14: Brazil - three funding schemes for drugs reimbursed by the Unified Health System (Sistema Único de Saúde; SUS) 66
Figure 15: Brazil - relative retail sales and volume of the Brazilian retail pharmaceutical market (indexed against volume or value in
2005), 2005-09 72
Figure 16: Brazil - retail pharmaceutical sales by therapy area (%), 2005-09 74
Figure 17: Brazil - retail sales growth for the leading retail pharmaceutical brands($m and %), 2009 78
Figure 18: Brazil - retail sales growth for leading pharmaceutical companies (%), 2005-09 82
Figure 19: Brazil - aggregation of retail sales between 2005 and 2009 to demonstrate the affect of Sanofi-Aventis's acquisition of



Medley 83
Figure 20: Brazil - volume (%) and value (%) of true generic retail and hospital sales as a share of total Brazilian pharmaceutical
sales, 2004-09 93
Figure 21: Brazil - comparison of generic value uptake versus other major pharmaceutical markets (%). 2007-08 94
Figure 22: Brazil - comparison of generic value uptake in Brazil versus other pharmaceutical markets, 2007-08 95
Figure 23: Brazil - comparison of generics market size versus other pharmaceutical markets ($ billion), 2007-08 (retail market only for
Brazil) 96
Figure 24: Brazil - drivers and resistors to generic uptake, 2010 97
Figure 25: Brazil - example of typical generic packaging 98
Figure 26: Brazil - benefits and challenges of achieving greater market access through acquisition 102
Figure 27: Brazil - aggregation of retail sales between 2005 and 2009 to demonstrate the affect of Sanofi-Aventis's acquisition of
Medley 103
Figure 28: Brazil - Medley provides significant diversification of Sanofi-Aventis's Brazilian portfolio, 2009 104
Figure 29: Brazil - branded retail sales at risk of generic erosion ($m), 2010-13 106
Figure 30: Brazil - yearly generic entry across Anatomical Therapeutic Chemical-1 (ATC-1) groupings within a 5 year period, 2000-07
107
Figure 31: Brazil - total number of cancer cases, 2009-2015 109
Figure 32: Brazil - retail sales ($m) of marketed biologics due to come off-patent, 2010-2015 112
Figure 33: Brazil - drivers and resistors to biosimilar monoclonal antibody entry, 2010 114
Figure 34: Brazil - key biosimilars in development internationally by product class, 2010 115
Figure 35: Brazil - EMS's pharmaceutical operations, 2010 120
Figure 36: Brazil - Novartis's presence compared with other top 10 companies in Brazil 123
Figure 37: Brazil - Novartis's pharmaceutical operations, 2010 124
Figure 38: Brazil - Ache's pharmaceutical operations, 2010 127
Figure 39: Brazil - Sanofi-Aventis's (post acquisition of Medley) pharmaceutical operations, 2010 130
Figure 40: Brazil - Eurofarma's pharmaceutical operations, 2010 133
Figure 41: Brazil - Pfizer's presence (post-merger with Wyeth) compared with other top 10 companies in Brazil 136
Figure 42: Brazil - Pfizer's pharmaceutical operations (post-merger with Wyeth), 2010 137
Figure 43: Brazil - Bayer Schering's presence compared with other top 10 companies in Brazil 139
Figure 44: Brazil - Bayer Schering's pharmaceutical operations, 2010 140
Figure 45: Brazil - Castro Marques's pharmaceutical operations, 2010 142
Figure 46: Brazil - Merck & Co.'s presence compared with other top 10 companies in Brazil 145
Figure 47: Brazil - Merck & Co.'s pharmaceutical operations, 2010 146


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