Brazil: new frontier for pharmaceuticals

Dec 16, 2019

Il Sole 24 ore

Mr. Graziano Messana talks about the growth of the Pharmaceutical Market in Brazil: great investment and settlement opportunities for Italian companies that focus abroad.

Learn more about business opportunities in Brazil here.

The size of the Brazilian market for pharmaceuticals and medical devices stands at about 30 billion dollars, with progressive growth.

By 2022, Brazil will be among the top five markets in the world, with total spending on drugs of between 38 and 42 billion dollars, while spending on medical devices alone will reach 14 billion dollars. The average drug consumption is estimated to be around 107 dollars per person.

Let us remember that Brazil has an extension comparable to that of the European continent.

Although health spending on GDP is in line with the global average (ca 10%), in Brazil (9%) European or American countries (9%), there are, therefore, real opportunities for growth, and, with it, Italian companies can play an important role.

Historically, private companies have financed a larger share of health spending in Brazil; On average, public expenditure grew by 0.5% a year and private spending by 1%. This is mainly since a good proportion of the Brazilian population uses private health insurance. We are talking about 50 million users who have private policies out of 210 million inhabitants overall.

Understanding the underlying dynamics of these numbers and increases in health spending in Brazil is essential to understand what will be the lines of development of the sector, integrated with the digital transformation taking place. This phenomenon is affecting several sectors of the Brazilian public administration, including health care. Organizations are increasingly needing to make significant investments in processes and technologies that reduce costs, increase access to health care, and improve care for people.

Three current trends will be essential for the pharmaceutical industry in Brazil: Smart data, artificial intelligence, and Self-Care.

Distance care and diagnosis is growing

Virtual presence is replacing the traditional view that a medical diagnosis can only be administered through a visit to the clinic or hospital. With this, health care can be guaranteed everywhere with the following enormous benefits that this brings to a country of continental dimensions such as Brazil.

Demographic trends continue to be positive, but there is an incidence of non-infectious diseases on a still very high proportion of the unassisted population, mainly in the North and Northeast regions.

In this scenario, Italian companies have significant opportunities for growth both through a direct presence and with collaboration agreements with healthcare professionals.

The biggest beneficiary of these changes is the consumer, who is now at the center of health care. This approach helps create new models and business solutions for diagnostics, treatment and monitoring.

Companies belonging to segments such as home care, including physiotherapy or fitness practices, have been well received by consumers within this market.

It is no coincidence that Sol, historically Italian family business but now listed on the stock exchange, has started its investment processes recently in Brazil in the home care sector, already tracing a success story. The prospect is that “smart health,” in the medium and long term, can be supported and integrated more and more fast, efficient, and economically sustainable.

Given the shortcomings of the NHS, health services will continue to be the most attractive sub-sector for new mid-term investors. In this context, it is noted that several foreign companies in the last 18 months (USA, Canada, Germany, Sweden, Australia, Italy) have expanded their presence through M&A operations.

Some Italian companies such as Chiesi, Zambon, Baldacci, ACS Dobfar, to name the best known, are well positioned in Brazil and are a valid induced for other realities, including PMI, such as the Tuscan PQE Group that deals with certifications and quality control. Large companies and a promising market are driving factors for small and medium-sized Italian companies that, after all, are our entrepreneurial fabric.

For Italian players that are looking for investment abroad, this is the right timing to consider an investment in Brazil.

The exchange rate is attractive, considering an investment in EURO, and also, there is great attention that is placed on the care of the person, both from a preventive and diagnostic point of view, as well as treatment and access to the best therapies.

Original article.

Learn more about business opportunities in Brazil here.

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