Lilly invests in its Brazilian packaging plant

Brazil is one of the emerging markets that drugmakers have gravitated toward in recent years, hoping for returns that outpace the slower growth at home. Serving these countries generally requires local production--and that means investments in upgrades. That is the phase Eli Lilly ($LLY) is in with a packaging operation in São Paulo.

The Indianapolis-based drugmaker will invest about 15 million real ($6.4 million) over two years on the upgrades to the facility, reports Brazil Pharma News. The drugmaker will replace a couple of blister-pack machines with the latest-generation technology, as well as optimize the layout at the plant and improve control systems on other lines, spokesman Andrew McLaughlin said in an email. The upgrades will improve quality and boost production beyond the 10 million units a year that can currently run through the lines, he said.

Among the products it packages at the facility are Lilly's erectile dysfunction drug Cialis, antidepressant Prozac and insulins Humalog and Humulin, as well as Evista, its drug for treating and preventing osteoporosis and for reducing the risk of getting breast cancer.

Lots of other drugmakers are doing business in Brazil, a country with a growing middle class. Sanofi ($SNY) has big operations there and even Russia's Biocad said last year it would build a new $40 million facility in the southern Brazilian state of Paraná to make biosimilars.

While emerging markets have seen better growth than many areas, they have financial cycles as well. Lilly warned that it does not expect to see the same returns from its emerging market operations this year as in the past.

- get the Brazil Pharma News story (reg. req.)

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