A great growth potential on the healthcare market

The Brazilian healthcare industry market grew at a compound annual growth rate (CAGR) of 14% between 2003 and 2011, reaching almost US$35 billion. However, despite the size of this market, Brazil still depends on imported drugs and equipment for this segment. In 2012, Brazil imported US$ 6.14 billion on drugs and US$ 2.61 billion on pharmaceutical ingredients, according to the Brazilian Association of the Pharmochemicals Industry and Pharmaceutical Ingredients (ABIQUIFI). In the same year, US$ 4.4 billion were spent on imports of medical equipment, according to the Brazilian Medical Devices Manufacturers Association (ABIMO).

In response to this unfavorable scenario, since 2000, Brazil's government has been taking several steps to strengthen the national health industry sector and to attract foreign direct investment, such as:

  • Reducing industry bottlenecks by investing in production capacity, stimulating local production of the Active Pharmaceutical Ingredients (APIs), and promoting tech-transfer contracts;

  • Defining the Unified Public Healthcare System (SUS) high-priority products and using its purchasing power on behalf of CIS development;

  • Creating tax incentives for research and development (R&D) investments;

  • Developing funding programs to promote R&D at a national level.

Pharmaceutical Sector

From 2006 to 2011, Brazil rose from the tenth to the sixth position in the pharmaceutical retail market size ranking and is expected to reach the fourth place by 2016.

Conducting clinical trials is a building block for a robust R&D culture in the pharmaceutical industry in the medium term and Brazil is gaining prominence in conducting trials for new drugs. Brazil is currently second in the number of clinical trials performed among middle-income countries, according to a study published by the International Federation of Pharmaceutical Manufacturers & Associations (IFPMA).

The public investment in the pharmaceutical industry is projected to reach US$ 4.2 billion by 2017, and the public purchasing power to foster the national industry will reach US$ 15.3 billion.

Medical Devices Sector

In 2012, total Brazilian medical devices consumption was estimated to be US$ 7.5 billion, with a 38.9% share of local production.

Companies in the medical devices sector are one of the most active in terms of research and development activities. The Brazilian medical devices companies investment in R&D reached US$ 24.2 million in 2011, approximately 7% of this sector's total net revenue (PINTEC 2013).

R&D activities in Brazil has a promising future. Besides the growing internal market, about US$ 35 billion in 2011; pharmaceutical companies installed in the country are using R&D as an intelligent strategy to strengthen their presence and influence in regional markets, as well as to increase their consumer markets. The Brazilian geographic and political positioning among Latin American countries is also an advantage.