Indian cos flock to tap Brazil’s generics market

Ananth Iyer - Mumbai

Brazil, with half of its USD 4 billion pharmaceutical market waiting to be genericised, is enticing many Indian pharmaceutical companies. According to industry sources, at least half a dozen Indian companies - including big ones such as Ranbaxy, Cadila Pharma and Lupin - are investing in manufacturing facilities in Brazil.

Ranbaxy, which is already the fifth largest generic company in Brazil, is expected to begin manufacturing operations there by the year-end. Industry sources say Cadila Pharma too intends to set up a plant by December this year. The company has already registered a basket of products in the Brazilian market. Another “significant” investment will come from Strides Acrolabs, which is planning to begin work on a greenfield project in Brazil in the fourth quarter of 2003.

Interestingly, Indian companies, which a year back, were considering joint ventures with local partners as a more strategic route, are now wanting to go all alone, even if that means making substantial capital investments. Industry experts say one reason could be that Brazil is a gateway to other potential Latam markets Mexico, Argentina and Chile. Lyka-Hetero and Lupin Laboratories are looking to tap Mexico, through Brazil. Ipca too is aggressively looking at the Latam markets, beginning with Brazil, industry sources say.

Together, Mexico and Brazil account for USD 10 billion, according to IMS Health. The pharmaceutical market in Mexico, valued at USD 6 billion, is growing at a robust 12 per cent. Industry sources say the most assured way to tap the Mexican market is through Brazil.

The picture may not be as rosy in Brazil. The pharmaceutical market in Brazil is estimated at USD 4.1 billion, but the market registered a 12 per cent negative growth in 2002. However, the picture is very rosy for generics. In order to increase access, the Brazilian government is aggressively promoting generics. “Generics account for six per cent of the total market and are growing at 70 per cent every year. In fact, we estimate generics to account for 50 per cent of the total pharmaceutical market in the coming years,” Vera Rosana Nunes Valente, manager, Department of Generics, Anvisa told Express Pharma Pulse in September last year.

Statistics reveal that the number of generics companies has increased from just four in 2000 to 36 in 2002. The product registrations for generics in this period has grown from 13 to 634, while registrations for bulk actives have increased from 13 to 232. The number of new applications show a phenomenal increase from 29 in July 2000 to 2,060 in August 2002.

Besides, Indian companies can also explore the government tenders, which account for nearly USD 1.3 billion. “The government of Brazil is a big buyer of drugs and pharmaceuticals, accounting for 30 per cent of the total market. They buy largely through generic companies,” Vera Rosana said.

Access to medicines is a big problem in Brazil. Only 50 per cent of 172 million Brazilians have access to drugs and pharmaceuticals. However, only 20 per cent of this can actually afford to

buy the prescribed drugs. The average unit price of drug formulations in Brazil is USD 4.07 and the government is desperately trying to bring this down to increase access, the Brazilian official said.