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Market Insight Brazil

Matt Stewart Pharma News Specialist
Matt Stewart Pharma News Specialist

The document summarizes key information about Brazil's consumer healthcare market from 2014 to 2021: - Brazil has the second largest consumer healthcare market in the Americas behind the US, with sales topping $6 billion in 2015. - While economic downturns slowed growth in 2015-2016, the market continues to outperform other retail sectors as employment and incomes rise. - The market remains highly complex with both private and public healthcare systems. Majority of consumer products can only be sold in pharmacies, which are dominated by three large chains. - Regulatory approval can take 1.5 to 4 years and advertising must follow strict ANVISA guidelines, though recent changes may increase competition and shift to consumer marketing. -

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OTC bulletin 07 October 2016 OTC GENERAL NEWS 10 2014 2015 2016 2017 2018 2019 2020 2021 US$6.18bn US$6.19bn US$6.17bn US$6.27bn US$6.42bn US$6.62bn US$6.85bn US$7.12bn Consumer healthcare market in Brazil sales and growth 2014-2021 +0.3% -0.4% +3.1%+2.3%+1.7% +3.9%+3.4% Brazil is a land of opportunity for OTC firms, according to Dr Gian Trepp, founder of market access specialists GBT Pharma. How- ever, it is also a highly complex market that needs clever navigation, he warns. The second-largest consumer healthcare mar- ket in theAmericas behind only the US Brazil is considered the giant of the South American pharmaceutical sector, Trepp points out, with consumer healthcare sales alone topping US$6 billion (C5 billion) in 2015 (see Figure 1). Despite an economic downturn and politi- cal crisis in 2015 and 2016 hitting value sales growth in the consumer healthcare sector, the category continues to perform better than many other areas of retailing in Brazil,Trepp explains. The economy has now stabilised and manyBraziliansareexperiencingbetter em- ployment prospects and have more dispos- able income, Trepp adds. These trends, he believes, coupled with an ageing popu- lation and government healthcare initia- tives, have created a fertile environment for con- sumer healthcare companies. However, to take advantage of the opportu- nities fully in the Brazilian consumer healthcare market, companies have to be aware of its highly- complex nature, Trepp warns. The Brazilian healthcare sector is one of the most unique, complex and fragmented in LatinAmerica, Trepp points out. It comprises both private healthcare via pre-paid health insurance plans and private medical organisa- tions and free public health services. Furthermore, private spending on healthcare still outstrips state spending, he notes, driven by the rise in disposable income. Brazilian consumers continue to be mind- fulandconsideratewhenitcomestotheirhealth and wellbeing, Trepp explains, and this is perhaps due to the fact that their own health and wellbeing is one of the things within their control in the midst of economic turbulence. The most commonly sold OTC products are analgesics, cough and cold preparations and vitamins and minerals, Trepp says, which to- gether account for around three-fifths of total sales of OTC medicines in Brazil. There is also a strong trend towards fitness and personal care, he notes, in addition to pri- mary healthcare programmes seeking to shift pressure from hospitals by encouraging more preventive care in communities. The majority of consumer healthcare prod- ucts may only be sold in drugstores or para- pharmacies, Trepp explains, and unsurprising- ly this channel dominates the market. Pharmacy chains currently control 55% of the market, Trepp points out, with three main players Raia, Rede Pague Menos and CVS dominating the sector. Looking at the regulatory environment,Trepp claims that the Brazilian regulators are some of the most demanding in the world. The time required to register a product can range from 18 months to four years, he warns, and while OTC brands can be advertised, any promotional activity needs to comply with rigid guidelines laid out by the Brazilian Food and Drug Administration, ANVISA. However, in August, ANVISA updated its regulations to help expand the number of OTC medicines available in the country (OTC bul- letin, 9 September 2016, page 18). The new regulation will allowANVISA sim- ultaneously to reassess the status of currently available OTC drugs while approving new prod- ucts. It is expected to increase competition in the OTC category and encourage a shift towards consumer marketing over physician detailing. For companies looking to enter Brazil, there are a few key things to bear in mind, Trepp says. Aside from the fact it is an increasingly competitive market, be mindful that across the board in the Brazilian healthcare industry there are huge differences between partner compa- nies, he advises. It is crucial that firms do not underestimate the sheer scale of the market when sourcing a local partner, Trepp adds. The chosen partner must have the necessary structure and resources in place to cater for a market of this size. Furthermore, in Brazil, the high levels of intervention at government level, either through price control, lengthy regulatory procedures or high tax burdens, are a big consideration for new players, he notes. However, the opportunities here can far outweigh some of the challenges, Trepp in- sists, but securing a good local partner is crucial. Any local partner needs to have the scale to cater to your needs in this vast market, Trepp advises, with the sales force and merchandising capabilities to match your ambitions. Furthermore, the partner needs to have an in- depth knowledge of the market trends, he adds, and, crucially, proven relationships with the re- tail chains. Retailers are king in the market. Despite its complexities, the Brazilian con- sumer healthcare market is set to expand, Trepp forecasts, driven by economic trends, increasing health spending and favourable demographics. With a carefully considered entry plan and the right local partner and product portfolio in place, he adds, the market could reap huge dividends for forward-thinking consumer health- care healthcare firms looking to grow here. OTC Market Insight: Brazil The Brazilian healthcare sector is one of the most unique, complex and fragmented in Latin America Figure 1: Sales and growth in Brazils retail consumer healthcare market from 2014 and projected to 2021 (Source Euromonitor)

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Market Insight Brazil

  • 1. OTC bulletin 07 October 2016 OTC GENERAL NEWS 10 2014 2015 2016 2017 2018 2019 2020 2021 US$6.18bn US$6.19bn US$6.17bn US$6.27bn US$6.42bn US$6.62bn US$6.85bn US$7.12bn Consumer healthcare market in Brazil sales and growth 2014-2021 +0.3% -0.4% +3.1%+2.3%+1.7% +3.9%+3.4% Brazil is a land of opportunity for OTC firms, according to Dr Gian Trepp, founder of market access specialists GBT Pharma. How- ever, it is also a highly complex market that needs clever navigation, he warns. The second-largest consumer healthcare mar- ket in theAmericas behind only the US Brazil is considered the giant of the South American pharmaceutical sector, Trepp points out, with consumer healthcare sales alone topping US$6 billion (C5 billion) in 2015 (see Figure 1). Despite an economic downturn and politi- cal crisis in 2015 and 2016 hitting value sales growth in the consumer healthcare sector, the category continues to perform better than many other areas of retailing in Brazil,Trepp explains. The economy has now stabilised and manyBraziliansareexperiencingbetter em- ployment prospects and have more dispos- able income, Trepp adds. These trends, he believes, coupled with an ageing popu- lation and government healthcare initia- tives, have created a fertile environment for con- sumer healthcare companies. However, to take advantage of the opportu- nities fully in the Brazilian consumer healthcare market, companies have to be aware of its highly- complex nature, Trepp warns. The Brazilian healthcare sector is one of the most unique, complex and fragmented in LatinAmerica, Trepp points out. It comprises both private healthcare via pre-paid health insurance plans and private medical organisa- tions and free public health services. Furthermore, private spending on healthcare still outstrips state spending, he notes, driven by the rise in disposable income. Brazilian consumers continue to be mind- fulandconsideratewhenitcomestotheirhealth and wellbeing, Trepp explains, and this is perhaps due to the fact that their own health and wellbeing is one of the things within their control in the midst of economic turbulence. The most commonly sold OTC products are analgesics, cough and cold preparations and vitamins and minerals, Trepp says, which to- gether account for around three-fifths of total sales of OTC medicines in Brazil. There is also a strong trend towards fitness and personal care, he notes, in addition to pri- mary healthcare programmes seeking to shift pressure from hospitals by encouraging more preventive care in communities. The majority of consumer healthcare prod- ucts may only be sold in drugstores or para- pharmacies, Trepp explains, and unsurprising- ly this channel dominates the market. Pharmacy chains currently control 55% of the market, Trepp points out, with three main players Raia, Rede Pague Menos and CVS dominating the sector. Looking at the regulatory environment,Trepp claims that the Brazilian regulators are some of the most demanding in the world. The time required to register a product can range from 18 months to four years, he warns, and while OTC brands can be advertised, any promotional activity needs to comply with rigid guidelines laid out by the Brazilian Food and Drug Administration, ANVISA. However, in August, ANVISA updated its regulations to help expand the number of OTC medicines available in the country (OTC bul- letin, 9 September 2016, page 18). The new regulation will allowANVISA sim- ultaneously to reassess the status of currently available OTC drugs while approving new prod- ucts. It is expected to increase competition in the OTC category and encourage a shift towards consumer marketing over physician detailing. For companies looking to enter Brazil, there are a few key things to bear in mind, Trepp says. Aside from the fact it is an increasingly competitive market, be mindful that across the board in the Brazilian healthcare industry there are huge differences between partner compa- nies, he advises. It is crucial that firms do not underestimate the sheer scale of the market when sourcing a local partner, Trepp adds. The chosen partner must have the necessary structure and resources in place to cater for a market of this size. Furthermore, in Brazil, the high levels of intervention at government level, either through price control, lengthy regulatory procedures or high tax burdens, are a big consideration for new players, he notes. However, the opportunities here can far outweigh some of the challenges, Trepp in- sists, but securing a good local partner is crucial. Any local partner needs to have the scale to cater to your needs in this vast market, Trepp advises, with the sales force and merchandising capabilities to match your ambitions. Furthermore, the partner needs to have an in- depth knowledge of the market trends, he adds, and, crucially, proven relationships with the re- tail chains. Retailers are king in the market. Despite its complexities, the Brazilian con- sumer healthcare market is set to expand, Trepp forecasts, driven by economic trends, increasing health spending and favourable demographics. With a carefully considered entry plan and the right local partner and product portfolio in place, he adds, the market could reap huge dividends for forward-thinking consumer health- care healthcare firms looking to grow here. OTC Market Insight: Brazil The Brazilian healthcare sector is one of the most unique, complex and fragmented in Latin America Figure 1: Sales and growth in Brazils retail consumer healthcare market from 2014 and projected to 2021 (Source Euromonitor)