Brazil is the fifth largest export destination for the Indian companies. In 2006-07 financial year, exports to Brazil accounted at Rs 745 crore or US $182 million. Exports to Brazil accounts 2.82 per cent of the total global exports and is growing at the rate of 26 per cent per year.
Brazil, one of the fastest growing and the fifth largest and most populous country in the world, offers huge opportunities for the Indian drug manufacturers, especially for the generic players. The Brazil market mainly comprises of branded and generic products.
According to sources, the huge market potential of the Brazilian market is yet to be tapped, as medical facilities still remain inaccessible to nearly half of the population. However, in the past few years the government has taken several steps for the promotion of the generic drugs with a view to make healthcare services accessible to all sections of the population, sources added. The generic market of the country was formally regulated in 1999 in an effort to reduce the prices of medicines.
As per the latest reports, the Brazilian generic market is expected to account 23 per cent of the total market by 2011, thanks to the government support. At present Brazil is the largest generic drug market in the Latin America. The generic market of the country is expected to receive further boost as several products are going out of patent in the next few years.
The country mainly depends on the foreign companies to meet its requirement. It is learnt that the government is actively encouraging new entrants into the country's generic market. Since Indian companies are fast growing as the powerhouse of global generic market, Brazil promises huge opportunities to the Indian generic players. Hyderabad-based companies such as Dr. Reddy's Laboratories and Aurobindo Pharma have their presence in the region with separate subsidiaries.
Speaking to Pharmabiz, Dr P V Appaji, executive director, Pharmaceuticals Export Promotion Council (Pharmexcil), said, "Brazil is one of the rapidly growing economies and offers huge market potential for the Indian pharmaceutical companies."
According to the Pharmexcil, Brazil is the fifth largest export destination for the Indian companies. In 2006-07 financial year, exports to Brazil accounted at Rs 745 crore or US $182 million. Exports to Brazil accounts 2.82 per cent of the total global exports and is growing at the rate of 26 per cent per year.
Commenting on the potential of the market, a senior official at Aurobindo said, "It's a unique market. However, compared to other countries, the regulatory scenario is stricter. It offers huge potential to the Indian companies, as the government is supporting generic drugs to ensure healthcare services to all."
According to Dr. Reddy's Laboratories, its revenues from the emerging markets nearly doubled from Rs 2866 million in 2005-06 to Rs. 5633 million in 2006-07, driven by growth in Israel, South Korea and Brazil. Revenues from North America grew by 23 per cent, from Rs1655 million to Rs 2030 million in 2006-07 due to significant increase in the sale of new products as well of the existing portfolio. It runs its Brazil business through a separate entity, Dr. Reddy's Farmaceutica Do Brazil Ltd, set up with an investment of Rs 9.71 crore in the equity capital. The company's total assets stood at Rs 26.03 crore and its turnover touched Rs 3.85 crore.
Aurobindo Pharma, another major Hyderabad-based drug manufacturer, runs its business in Brazil through a separate subsidiary, AB Farmo Industria Farmaceutica Ltd. It has registered a turn over of Rs 1,020.1 million in 2006-07 financial year. Sources said that Brazil business contributes nearly five to six per cent to the company's total turn over. It has applied for 40 products in Brazil and already received approvals for 26 products.
Sources said that the pharmaceutical export to Brazil is expected to receive further boost as the BRIC nations (Brazil, Russia, India and China) are taking all efforts to strengthen their relations.