China and India may top the list of fastest-growing pharma markets, but Brazil is no slouch, either. Drugmakers are wheeling and dealing there at an increasingly faster pace, as companies like Merck ($MRK), Reckitt Benckiser and Daiichi Sankyo join old-timers like Sanofi and GlaxoSmithKline in beefing up there. And with Big Pharma reportedly circling around Aché Laboratorios Farmaceuticos, Brazil is looking even more important in the Big Pharma picture, the Financial Times figures.
The story in Brazil is similar to that in China and India. Pharma sales are benefiting from growing government expenditure on healthcare, a growing middle class able to foot the bill for treatments, and proliferating chronic disease such as diabetes and cancer. Brazil's retail pharmaceuticals market amounted to about $25 billion last year.
All that has inspired Japan's Daiichi to work more closely with generics subsidiary Ranbaxy Laboratories, to expand their business in the country. As MoneyControl reports, Daiichi is using the "hybrid business model" it has employed in other emerging markets: Pushing its branded meds and Ranbaxy's branded generics through one expanded distribution network.
Daiichi is just the latest drugmaker with designs on a bigger slice of Brazil. Amgen ($AMGN) went to Brazil two years ago. In its first Brazilian foray, the Big Biotech snapped up hospital-drug supplier Bergamo for $215 million and bought back the Brazilian rights to several of its own drugs. A year ago, Merck teamed up with Supera Farma in a joint venture, aiming to sell some 30 products at first, and expand the portfolio with time. Reckitt bought the rights to some Bristol-Myers Squibb ($BMY) OTC drugs for $482 million, including a substantial share in Brazil.
Meanwhile, the market veterans have been broadening their reach. Novo Nordisk ($NVO) sells its branded diabetes drugs in Brazil, but it also offers cheap, older insulin meds, which are purchased by the government. Sanofi-Aventis ($SNY) expanded into over-the-counter drugs and branded generics with its purchase of Brazil's Medley. GlaxoSmithKline ($GSK) offers branded drugs targeted to the middle class--a growing sector of the drug market--but it's also aiming for other market segments with less expensive products.
Will interest in Brazil grow even more as India's stance on intellectual property toughens up? Brazil has its own generic-substitution issues that can't be ignored. But drugmakers looking to hedge their Indian bets may increasingly look to Latin America.