Nine of the largest local pharmaceutical films in Brazil – Ache, Biolab, Cristalia, Libbs, EMS, BioNovis, Hebron, Eurofarma and Orygen – have invested BRL538 million (USD174.3 million) during the first five months of the year, focusing mainly on the production of biosimilars.
IHS Life Sciences perspective | |
Significance | Brazil's national pharma industry association has reported that the top-tier domestic pharmaceutical companies invested BRL538 million (USD174.3 million) during the first five months of 2015. |
Implications | Domestic pharmaceutical companies' investments grew by 52% compared to the first five months of 2014. These investments have been allocated mainly to produce biotechnology medicines, specifically biosimilars, as part of Product Development Partnerships signed between the companies. |
Outlook | There are 104 ongoing partnerships for domestic production of 97 products, involving 19 public and 57 private laboratories. In January, the health ministry selected 21 products for technology transfer in 2015 as priority items for the country's healthcare service. |
Brazil's national pharma industry association, FarmaBrasil, which represents nine of the largest local pharmaceutical firms in the country – namely Ache, Biolab, Cristalia, Libbs, EMS, BioNovis, Hebron, Eurofarma, and Orygen – has reported that the companies invested BRL538 million (USD174.3 million) in the first five months of 2015.
According to FarmaBrasil, although the Brazilian economy is presenting signs of recession, domestic pharmaceutical companies' investments grew by 52% compared to the first five months of 2014. Additionally, FarmaBrasil has forecasted that combined annual investments could total BRL1.9 billion by the end of the year, if the investment pace remains similar.
FarmaBrasil represents companies that account for more than 12% of the pharma market in Brazil. These companies achieved sales of USD5.8 billion in the first quarter of the year, 21% of the total recorded by the Brazilian retail sector.
Product Development Partnerships
FarmaBrasil has pointed out that these investments were allocated to produce biotechnology medicines, mainly biosimilars, as part of Product Development Partnerships (PDPs) signed between the companies, the federal government, and public laboratories. For instance, BioNovis – a joint venture between Ache, Uniao Quimica, Hypermarcas, and EMS – has invested more than BRL739 million in a biological drug laboratory in Valinhos, São Paulo, with the bulk of production already sold to Brazil's health ministry.
According to Reginaldo Arcuri, president of FarmaBrasil, this investment is justified by the fact that many of the biotechnology projects started on paper and resulted in companies initiating clinical research, product development, and the construction of appropriate industrial plants for the production of these highly complex medicines.
Outlook and implications
Brazil has been at the forefront of building up a domestic biosimilars industry through PDPs. There are 104 ongoing partnerships for domestic production of 97 products, involving 19 public and 57 private laboratories. In January, the health ministry selected 21 products for technology transfer in 2015 as priority items for the country's healthcare service (see Brazil: 29 December 2014: Brazil's MoH selects 21 products for technology transfer in 2015).
The agreements involve local companies entering into partnership with international companies with expertise in producing new biologics and biosimilars. The PDPs aim to reduce prices of innovative drugs, guarantee patient access to innovative treatments, and promote savings to the system. According to FarmaBrasil, biosimilars produced by the domestic companies will cost between BRL2,000 and BRL15,000 per dose, a significantly lower cost in comparison to current prices.
There are 10 Brazilian companies involved in biosimilars drug development, including PharmaPraxis, Fiocruz, Libbs, Cristalia, and the two recently formed blocs BioNovis and Orygen (Biolab and Eurofarma). The focus of nearly all of these companies is developing biosimilar versions of blockbuster monoclonals such as Enbrel, Avastin, and Herceptin (see Brazil: 17 November 2014: Brazil's MoH announces new PDP regulation and two new partnerships for innovative medicines).
With government support and local production capabilities, the future commercial outlook of the Brazilian domestic industry looks positive, despite the internal difficulties that the country is facing and the risk of entering recession. However, these PDPs can negatively affect the international pharmaceutical industry that may lose power in the market due to the possible increased production capacity of the domestic laboratories. Nevertheless, some international pharma companies have seen the PDPs as a useful opportunity to consolidate their position in the Brazilian market, with Merck Serono (Germany) developing six biological medicines with Bio-Manguinhos/Fiocruz and the Vital Brazil Institute.