The call of the big buck has lured the Indian pharma firms to touch down every prospective hot spot on the atlas of global marketplace. The aspiring entrepreneurs who always dared to fly beyond borders have landed up in all the lucrative markets including the US, Europe, Japan and Latin America.
Brazil, the second biggest in the Latin America and the 10 largest in the world continues to be a major attraction for globetrotting Indian Pharma. Several of the Indian firms, big and medium, have set up their base in the Brazilian pharma market which is currently estimated at US $ 8 billion.
According to sources, about 20-21 companies from India are having operations in Brazil. Ranbaxy, Torrent, Strides Acrolab, Dr Reddy's, Wockhardt, Unichem, Aurobindo, Glenmark etc have own subsidiaries in Brazil. Besides having their product portfolio registered there, many of these firms are also exporting APIs to this market.
Ranbaxy, which ranks amongst the top 5 generic companies in Brazil has achieved US $ 37 million sales in 2004. It launched a total of ten generic molecules and three branded products including Contiflo (Tamusulosin) and Cutison (Mometasone) in the year. Also, the company is in the process of setting up a manufacturing plant in Sao Gonzalo to meet the growing demand in the Latam region.
Similarly, Torrent Pharma also got several products in the cardio and neuro-psychiatry segments registered in Brazil. This Ahmedabad-based company has reportedly clocked sales of around $ 18 million in the previous year. ``Our experience with Brazilian pharma market has been quite good for the last three years. We are planning more products introductions in the near future. Torrent is the only company from India operating through prescription drugs route in Brazil,'' says H Balakrishna of Torrent.
Though buoyant enough to plays a leading role as manufacturing hub for the entire South American continent, Brazil still banks largely on imports. It imports nearly US$2.5 billion pharmaceutical products per year to satisfy domestic demands, as the local production meets the needs of only 25-30% of its population, at present.
After formally regulating the generics market in 1999, the government continues to encourage new entrants in the generic drugs space by offering preferential purchase options in public tenders and special financial investment conditions through state finance organizations as an effort to make the drugs affordable.
Inadequate domestic manufacturing capacities and the prevailing high price structure make the country one of the most attractive destinations for players worldwide, especially from India who champions low-cost production technologies.
``The existing pro-socialist government has also taken the vow that it would ensure the reach of affordable medicine to all sections of the society. This, as per the current realities, can only be achieved through outsourcing. And it would definitely benefit Indian companies,'' opines a senior official from a leading drug firm based in Mumbai which established a subsidiary in Brazil a year back.
Despite these potential opportunities in the generic space, some of the Indian players think the pharma market in Brazil is really tough and too complicated. Brazil insists on bio-equivalence studies done from ANVISA certified centres for generic product registration. Getting an ANVISA certification itself is a cumbersome process. It may take many months, even years, for the ANVISA staff to come and conduct an inspection in India. ``When ANVISA conducts inspection they go by each and every production line. And each of this certification process costs 15 to 16 thousand US dollars. Product registration too is time consuming. ANVISA explains that it does not have adequate staff to carry out the mounting registration related procedures,'' laments an official with Nicholas Piramal India Ltd (NPIL), Mumbai. NPIL exports APIs of ibuprofen, fluconazol etc to Brazil.
Volatility of the market and high competition among the players on the pricing front is another issue exporters are faced with. Unlike the US market, which insists on DMF filing as standard procedure, Brazil does not have any specific norm for API approvals. Drug makers source cheaper raw materials and the Chinese companies are there to offer them at a rate which is anytime low, exporters complain.
"The cost to be a player in Brazil is enormously high. You sink $ 50,000 down and under to get an ANVISA approval plus the cost of product registration. And the returns are not very impressive. High volatility of the market further cuts down your profits. At present, most of the Indian companies are suffering operating losses, I believe. Still, they can hinge their profit hopes in the coming days. For, Brazil is a futuristic market. Once the market gets stable, their gains will be big and the days are not too far off," remarks an analyst tracking the industry based in Mumbai.