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BRAZILIAN PHARMA MARKET OVERVIEW Part 1 - Recent Past, Current Scenario

BRAZILIAN PHARMA MARKET OVERVIEW Part 1 - Recent Past, Current Scenario : 작성자, 카테고리, 작성일, 조회수, 원문,출처, 정보 제공
작성자 임이슬 카테고리 전문가 인사이트
작성일 2017-11-15 조회수 4,194
원문
출처

BRAZILIAN PHARMA MARKET OVERVIEW
Part 1 - Recent Past, Current Scenario
Edson Luis de Brito, Pharm.D. – Executive Consultant in Korea Heath Industry Development Institute, KHIDI

전문가
Edson Luis De Brito
(에드손 브리토)
KHIDI 해외제약전문가
상임컨설턴트
세부 전문분야
  • 마케팅, 사업개발, 인허가
컨설팅 내용
  • 중남미지역 진출 전략 및 시장 개척
  • 중남미 시장 분석, 마케팅, 사업개발
  • 임상시험 모니터링, 코즈메틱 분야

INTRODUCTION

Brazil has been considered as one of the most important emergent markets in several economic segments, and the pharmaceutical market is no different. In fact, for many years the drug industry in Brazilian market is prevailing in terms of growth, even in bad economic waves, which time to time cross Brazilian economy.

Other important aspect that makes Brazil as a global reference is its Regulatory Agency for Drug and Food: ANVISA (acronym originated from the Portuguese words AGENCIA NACIONAL DE VIGILANCIA SANITARIA) which is very active and possesses a high power to interfere in several markets and fields such as advertising, clinical research, drugs, food, land transport, air transport, agriculture and others– many times colliding with Publicity Organizations and even with Brazilian Ministry of Agriculture, Fishing and Supply, increasing the confusion and bureaucracy.

Although the controversies that surround the regulations in Brazil, the country remains attractiveness to healthcare business, due to many other aspects of its legislation for Health and its consistent population growth. These characteristics added to a dynamic domestic manufacture sites, a very small and poorly encouraged environment of Research and Development for innovative drugs make Brazil a country able to import the innovation that Brazilians people need from the more experienced excellence centers worldwide, including South Korea.

This article expose the history behind the regulatory environment that made Brazil a global protagonist in this field, the constant increasing of the volumes of healthcare products and the political and economic positive changes expected for the years to come, that can keep Brazil as good partner for business development at the healthcare field.

Regulatory Environment in the end of the XX and beginning of XXI Centuries

To understand the present moment is interesting to visit the recent history that shaped the Regulatory environment of Brazil.

Until 1995, the Brazilian regulatory environment faced relative ease, as there was no regulatory agency that would address all possible health sector irregularities. In that time Brazil not respected patents and it was very common innovations being launched by domestic companies that could reach copies of those innovation before the owned proprietary of the innovative product.

And also, if a global company had developed an innovation and launched it in other countries , but not had commercialized in Brazil, in less than one year a copy of that one could be in Brazilian market, even that it had a patent protection internationally.

In that time, the big pharma companies aimed to market, concentrating themselves on the private market instead public and reach a drug registration was simple, with basic proofs of the safety and effectiveness.

Many things started to change in 1996, after Brazil established the Patent Law, respecting the innovative products, including pharmaceuticals. With this milestone, one big concern of the Ministry of Health of that time was that the new innovative products could cost much more and the branded products, with no patent protection also could have a price above the reasonable. Thus, State bureaucracy proposed some changes that could impact with unpredictable consequences the pharma market: To abolish all pharmaceutical branded products which the patent had expired, making them to be prescribed only by the Generic name of the molecule. Their argument was that without the marketing and promotion costs, the price of the pharmaceuticals should to be around 40% lower than they were.

However, most of the drug makers, in special, the global ones, did not agree with that proposition, claiming for the maintenance of a long term investments they did, to have their brands recognized by the market, some of them for decades, including those that were mixing themselves with the product, such as, for example, Aspirin or Tylenol. To support the matter that brands were important, the drug makers representatives presented the counter argument that no-branded products could lead the customer to use products that haven`t the same profile of quality already verified in the products sold for years in the market, under a recognized and well reputed brand, letting the customer under an unnecessary risk to acquire a product with a different profile of that one he/she is used to use and no confidence in the therapeutic effects provided by them.

In 1998, two episodes, one of falsification of pharmaceuticals and other of negligence in terms of pharmacovigilance, leaded to more discussions about the matter of the pharmaceuticals companies should or not use the brands in the pharmaceutical products.

The episodes mentioned also leaded the Brazilian Pharma sector to suffer a huge pressure, and the federal Administration created a Parliament Inquiry Committee to investigate and suggest modifications in the legislation, aiming to have more control and compliance in the healthcare sector. Thus, the System of Sanitary Surveillance was created, to start to develop regulations for the Brazilian market and overcome the deadlocks. This was the embryo of ANVISA [figure 1].

Actually, ANVISA started up in 1999, in the same year that Law of Generics came into force [figure 1]. The Brazilian Law of Generics, also known as Law 9787/99, stipulated that products with the status of Generic would be interchangeable with the reference product, being able the replacement of one by another. However, to be considered as a Generic Drug as per the Law 9787/99, the pharmaceutical should to be non-branded, to have same profile of pharmacokinetics and pharmacodynamics, dissolution and absorption compared to the reference drug, in a very narrow interval of confidence. The result of this was that Brazil had three different categories of pharmaceutical products: The reference product, usually the first to be inserted in the market, The similar product , those pharmaceuticals that were copies of the reference products and branded as well, but not properly interchangeable and the Generic Pharmaceutical , a non-branded product, but submitted to Pharmacoequivalence and Bioequivalence tests. The first generics as per the Law 9787/99 entered in the market between 2000 and 2002.

Since then, ANVISA has had the power to regulate everything that happens in the pharmaceutical sector. This power made ANVISA to create regulations for promotion of pharmaceuticals, regardless the media involved: TV; Radio; Sales rep; Periodicals; Magazines; Journals, all of them were under the rules of ANVISA and sanctions could happen if infringement of that regulations take place.

In 2004, ANVISA brought into light regulations for new similar drugs, which also should to be submitted to Pharmacoequivalence and Bioequivalence tests, and those that already were in the market had the following ten years (until 2014) to perform the tests, or they would not receive the revalidation of their registrations [figure 1]. Continuing the construction of the environment regulated in all aspects, ANVISA created more rules for Biological Products, in 2005, determining that Biologicals could not to be interchangeable with the other same molecule Biological product, with this, the concept of Biosimilar technically does not exist in the point of view of ANVISA, differently of other Regulatory Agencies of the world, as EMA for example, but comparability between biological products with the same final molecule.

In 2006, it took place regulations to promote products under special control of the prescription, those ones listed in the Act (Portaria) 344/1998. The majority of the active pharmaceutical ingredients applied in the list 344/1998 are products with action in the central nervous system (e.g. antidepressants), some hormones with steroids designation and others.

Also in 2006, more rules to grant GMP certificates for domestic and overseas drug makers, and more requirements to register a product took place, with a very difficult and judicious process of inspection, has been developed especially in foreign companies, and many controversies have started to happen, due to individual subjectivities of the inspectors. Lasting a period between 2007 and 2010, it was defined regulations for clinical trials and regulations for risk III and IV for medical devices.

From 2011 so far, ANVISA is updating many inner process, but due the constant instability of the Brazilian political environment, which impacts in the conduction of the organs related to the Ministry of Health, the results take a time to occur. The expectation is that ANVISA become a little more flexible, at least in some cases, that they are demonstrating to be since then.

Brazilian Healthcare System Services

In 1988, the Brazilian Legislation House promulgated a new Federal Constitution, with several social rights and protection of the individual values, which brought a strong feeling of freedom to the citizens of Brazil.

Amongst the majority of the rights conceived by the Brazilian Federal Constitution, that one mentioned at its article 196 deserve a particular consideration, once it has create an obligation related to the health problems of the population, and depending on how it is construed, can be a huge source of costs and unbalances in the public health budget.

Figure
[Figure 1] Timeline of the Brazilian Regulatory Environment

Art. 196 of Brazil’s Federal Constitution of 1988 literally mentions that:
 “Health is a right of everyone and a State obligation, guaranteed it through social and economic policies which aim the reduction of the risks of the diseases and other injuries, providing universal and equal access to actions and services for their promotion, protection and recovery.”

Complementarily, the Law 8080 that created the Public System of Health in Brazil, known as SUS (acronym from the Portuguese Sistema Unico de Saude), also mentions the responsibility of the Brazilian State in terms of the care and maintenance of health treatment for disorders of the population in Brazil, not necessarily for the Brazilian citizens. Art. 2 of the Law 8.080/90 mentions that.

“Health is a human being fundamental right, and the State must provide the necessary conditions for its full exercise” In other words, even a foreigner being in the Brazilian territory, will have the coverage by SUS regardless the financial capability or having any health insurance product that could be not used in case of treatment of an emergency or not.

This happens partially because of the Brazilian Public System (SUS), structure, where around 70% of the population reach treatment. This structure consists in hospitals and ambulatories regulated by SUS, but not managed at all. Some hospitals are totally public, belonging to the Federal field, to the State field or the Municipality fields. However, other hospitals are managed privately, with a part of the beds reserved for SUS users, and the bill is charged to the public health system which will reimburse the hospital at its only own criteria.

While 70% of the patients are users of the SUS, part of the remaining 30% are supported by Health Management Organizations (HMO`s) or Health Insurance Companies (HIC), mostly of them are hired by the employers as a benefit to their employees, and a very small part is able to pay by its own means either by paying some HMO/Heath Insurance or directly to the doctors.

To regulate the Health Management Organizations and Health Insurance Companies, it was created the National Agency of Complementary Health (identified through the acronym ANS). This Agency does not consider any differentiation between HMO and HIC considering them as Medical Services Access Suppliers or simply Suppliers.

Previously to the creation of ANS, the health private system was managed and charged according their own criteria and struggles between users and suppliers were frequent, however after the legal safety provided by the Agency, together other economic factors, the number of users of private system increased around 21.1% at 2017 (until march 2017) when compared to December 2007 [figure 2].

Figure
[Figure 2: Evolution of the beneficiaries 2007-2017. Source: ANS]

Brazilian Economy and Market for Pharmaceuticals

With a population predicted, for the end of 2017 around 208.000.000, Brazil currently is at the position number five among the countries more populated in the world. Even though increasing about 3.000.000 people per year, Brazilian demographic percentual is deaccelerating compared to the same period of the last century. This will lead Brazil to have around 220 million inhabitants at 2030 [figure 3] and shape the age concentration, in that year to come, in almost 18% of Brazilian population will be 60 years old or more

Also Brazilian life expectation is about 73 years currently, and for 2030 is estimated that this expectation reaches the 80 years [figure 4], making Brazil a country with an aged population and consequently, many of those people will need healthcare and attention for their quality of life.

Figure
Figure 3: Brazil Population from 2000, when the country had about 180 Million people to 2030 projected population estimated in 220 Million people. Figure
Figure 4: To be Borne Expectation of life, from 2000, when it was about 75 years to the estimative of 80 or more in 2030.

This demonstrates a real need that the Brazilian economy finds forms to keep increasing or at least not decreasing very much, and should have the maturity to use the resources to be produced in the future wisely.

In 2016, the Brazilian GDP reached the amount of US$ 1,8 Trillion (approximately R$ 6.000.000.000.000), but the public (Government) expenditures consume is about 43%, much more than the reasonable for a country that faces three years of recession with many social engagements not satisfactorily fulfilled.

It is in this environment that Brazilian Pharmaceutical sector fights to keep itself as an attractive sector in the economy and also to maintain the capabilities to cover the population needs in both areas: Public and Private. In fact, even though the Brazilian economy had experienced imbalances with ups and downs, the pharmaceutical sector is keeping its growth in terms of units and values (in local money, at least).

Thought the institutional expenses are not too much precise, and the values of the retail market could vary between the price listed and the price practiced (with average discounts), is estimated that the pharmaceutical Brazilian market could have reached the size of US$ 31 billion in 2016 as a whole.

The retail market is the better audited, and market surveys pointed that US$ 25 billion were in movement in the drugstores of Brazil, leading the country to be positioned at 7 in the top 10 Global Pharmaceutical Market. However, the volume of units sold are about 3.7 billion units in the retail market [figure 5] that is very expressive, but with room to grow in the future.

Figure
Figure 5: Brazilian Market Evolution from 2007 to 2016.

In terms of drugs used for specific diseases or symptoms, it is possible to see the percentual evolution in the last 13 years, emphasizing the last 10 ones [figure 6].

Figure
[Figure 6] – Performance of retail market in Brazil from 2003 – 2017 (May 2016 ~ May 2017)

The major sold pharmaceutical products in retail market are those ones related to certain types of therapeutic classes of which we can emphasize the main six as follow:

Analgesics: the main analgesics, sold in Brazil, are medications for daily pains, which can be bought mostly of time without prescription, such as dipyrone. Other analgesics with a good volume of sales are aspirin and paracetamol together non-steroidal anti-inflammatory drugs. The narcotic analgesics, due to their nature and potential to develop dependence, are more frequently used under prescription only and for hospitalized patients. Analgesics are about 9% of the retail market in Brazil.

Anti-hypertension and Anti-cholesterolemia: after analgesics, anti-hypertension and anti-cholesterolemia drugs and are the second more sold among the drugs that are in the retail market in Brazil. Hypertension is clearly a disorder mostly related to behavior and life style. Angiotensin-2 Receptor Antagonists (A2RA), mainly losartan, followed by Angiotensin Conversion Enzyme (ACE) products, such as enalapril, captopril and others, in combination or not with diuretic, are most sold in retail market. They reach around 9% of the prescribed/sold products.

Due the close relation between hypertension and abnormalities in the metabolism of lipids and glucose, drugs to improve of the balance of cholesterol (LDL-HDL) reach the third position in the retail market, with around 7% of the products sold at the drugstore.

Cold and Flu : Because of the symptoms such as body aching, sore throat and allergy caused by cold and flu, medicines used to treat and relief the disable transitory situation for the patients are the third more important class of medication used no Brazil.

Erectile dysfunction: With the generic versions of Pfizer Sildenafil citrate (Viagra) mainly, among others, the pills for male sexual impotence seemed to be in the consumer recall in Brazil. This happened not only because men with erectile dysfunction actually are going to face their problems, but also younger men believing that using it, they will can to improve their sexual performance. Thus, this therapeutic class is in the fourth position in the raking of best seller drugs.

Anti-depressants: Branded products and the recent generic versions of the most used 5-HT selective inhibitors, for the depression treatment together with the less modern therapies, such as the tricyclic antidepressants, had put the anti-depressants drugs the fifth position in terms of the more prescribed class and best seller pharmaceutical products in Brazil. In general, moments when the economy is not too much affordable, make this class of product raises up their sales volume.

Conclusion of the Part 1

The regulatory environment became one of the most challenging point for the Brazilian market when some critical issues took place in the end of the 20th Century. A very tough matching regulation was created and inserted obligatorily to all pharma companies, retiring some players, created many other opportunities to other players, and as result it was experienced a consistently sales growth during the first and half decade of the 21st Century.

Brazil is one of the pharmaceutical emerging markets that seemed to cross revolutionary changes in the two recent decades.

Even though those changes have reflected in the retail market, they also impacted positively for more pharma companies in the institutional market.

Institutional market (which will be more detailed in the Part 2 of this article), also became a source of revenues for big pharma companies (that previously had neglected that, due to their portfolio less specific than nowadays) now more linked to high complexity treatments and rare diseases, then an arena for small and middle sized pharma companies with capabilities to play head to head with one another, even the bigger, seems to be presented from this point to the years to come.

References :

  • Close-up International News Report, 2017, May report – Sao Paulo – Brasil
  • http://sindusfarma.org.br/cadastro/index.php/site/ap_indicadores
  • http://cuiabahoje.com.br/ola-dermivaldo-envio-conteudo-sobre-maior-feira-do-setor-farmaceutico-do-pais-que-acontecera-em-sao-paulo-na-proxima-semana-e-que-reunira-mais-de-5-mil-participantes-diariamente-em-sao-paulo-pr/
  • http://pfarma.com.br/noticia-setor-farmaceutico/estudo-e-pesquisa/2944-pesquisadores-analisam-a-regulacao-de-medicamentos-genericos-no-brasil.html
  • http://pfarma.com.br/noticia-setor-farmaceutico/legislacao-farmaceutica/3036-romero-juca-quer-venda-de-medicamentos-em-minimercados-e-lojas-de-conveniencia.html
  • http://pfarma.com.br/noticia-setor-farmaceutico/legislacao-farmaceutica/3332-aprovado-novo-medicamento-hyqvia.html
  • https://www.eadplus.com.br/blog/veja-perspectivas-para-o-mercado-farmaceutico-em-2017/
  • http://www.farma.saude.sp.gov.br/atas/
  • https://ww2.ibge.gov.br/apps/populacao/projecao/
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