The pharmaceutical market - Brazil

1.1 Definition and scope of study

The pharmaceutical industry encompasses the development, production and marketing of medicine. North America has the largest global market in terms of revenue, mainly as a consequence of the historical role of the American industry. However, the Chinese pharmaceutical sector has recently shown the highest growth rates. Nevertheless, the main pharmaceutical companies come from the United States (Pfizer, Johnson & Johnson, AbbVie) and Europe (Novartis, Roche, GlaxoSmithKline, AstraZeneca, Sanofi).

Most of the income of these companies is from patented drugs, in which oncology is the main prescription-based therapeutic class. Not coincidentally, many players in the pharmaceutical sector invest 20% or more of their revenues in the research and development (R&D) segment. This participation may be significantly higher in small companies specializing in research. The United States is a traditional stronghold of pharmaceutical innovation and most new substances introduced to the market originate in the United States. Due to the constant loss of patent protection, the invention of new drugs is of utmost importance for the industry, as the expiry of patents leads to significant financial losses.

Brazil has become a major attraction for investors in the industry and the pharmaceutical market as a whole. The sector is expected to close up 9% this year, with an average growth of 6.5% per year between 2018 and 2023, supported by the growing access of the population to medical services and products. In addition, the country is the 6th largest pharmaceutical market in the world, behind only the United States, China, Japan, Germany and France. The sector is expected to continue growing. With Brazilian currency increasingly devalued, a competitive environment in expansion and international companies focused on innovative medicine, it leaves room for national competitors to operate in the segment of already mature products.