BMI View: P olitical instability and thus risk will remain elevated over the coming quarters in Brazil, contributing to increasing uncertainty in terms of policy direction within the pharmaceutical s and healthcare sector. Nonetheless, over a multiyear timeframe, the Brazilian electorate will demand progress on promised reforms, including higher-quality public services and greater government transparency , boosting the long-term growth outlook for the sector. Stated g overnment commitment to such reforms bodes well for the country ' s healthcare landscape going forward .
Headline Expenditure Projections
Pharmaceuticals: BRL66.8bn (USD20.1bn) in 2015 to BRL71.7bn (USD20.0bn) in 2016; +7.4% in local currency terms and -0.1% in US dollar terms. Forecast in local currency terms is unchanged from Q 3 16.
Healthcare: BRL502.5bn (USD150.8bn) in 2015 to BRL549.7bn (USD153.6bn) in 2016; +9.4% in local currency terms and +1.8% in US dollar terms . Forecast in local currency terms has been revised from Q316 due to new historical data .
|e/f = BMI estimate/forecast. Source: The Brazilian Pharmaceutical Industry Federation (Febrafarma), Group of Executives of the Pharmaceutical Market (Grupemef), Interfarma, World Health Organization (WHO), BMI|
|Pharmaceutical sales, USDbn||26.350||20.050||20.040||22.310||24.190||25.000||25.850|
|Pharmaceutical sales, % of GDP||1.09||1.13||1.15||1.15||1.14||1.13||1.11|
|Pharmaceutical sales, % of health expenditure||13.5||13.3||13.1||13.0||12.9||12.8||12.8|
|Health spending, USDbn||195.210||150.830||153.550||171.880||187.420||194.670||202.210|
Brazil scores 59.0 in BMI's Pharmaceutical and Healthcare Risk/Reward Index (RRI), making it the seventh-most attractive pharmaceutical market in the Americas this quarter. We highlight that Brazil will continue to be an important market for multinationals in Latin America. The weakening of the Brazilian real has helped pharmaceutical exports. In addition, the government's increasing efforts to promote local industry is likely to further boost the sector in the long term. Further, Brazil's rapidly growing population and government commitment to expanding access to essential medicines and care are vital for driving growth in the market. In addition, stable economic growth is increasing both private insurance coverage (covering approximately 25% of the population) and out-of-pocket spending on medicines.
In May 2016, new Health Minister Ricardo Barros stated that the Ministry of Health only has enough resources for the SAMU Emergency Service and the program Farmacia Popular (which offers reduced price medications) until August. The Ministry of Health's outstanding debt from the previous year has accumulated to BRL14bn (USD4bn), with the ministry only receiving BRL7.2bn (USD2.1bn) from the government on a monthly basis.
There have been 66,180 confirmed cases of the Zika virus in Brazil during the 2015-2016 outbreak (according to Pan American Health Organization [PAHO] data, as of July 28 2016). This accounts for 74% of the total number of confirmed cases across all of Latin America and the Caribbean. Estimates of the epidemiological curve by Brazil's Ministry of Health show Zika infections peaked in mid-February 2016; with a sustained decrease in confirmed and suspected cases from March 2016 onwards. This decline is likely due to the onset of the Brazilian winter and less of the warm, damp conditions that supports the Zika vector, the aedes aegypti mosquito).
BMI Economic View
The Banco Central do Brasil (BCB), under new governor Ilan Goldfajn, will pursue a prudent policy course over the coming months. The Q216 inflation report released on June 28 and the minutes from the bank's July 19-20 monetary policy meeting - the first two major releases of Goldfajn's tenure - indicate that there is little room to cut interest rates in the next few months due to elevated inflation. This has driven a shift higher in the short end of the DI futures curve in recent days. At present, we maintain our end-2016 Selic rate forecast of 13.75%, which implies 50 basis points of cuts from the current level. We expect that a deceleration in inflation combined with weak growth will prompt the bank to begin an easing cycle in Q416.
BMI Political View
Brazil is set for a shift towards more centrist policies, as former Vice President Michel Temer has provisionally ascended to the presidency following the Senate's vote to open an impeachment trial for President Dilma Rousseff on May 12. The new president will face challenges in implementing his agenda over the coming quarters and his success will largely hinge upon his ability to forge a strong legislative coalition and maintain popular support. While early policy statements from Temer and his aides indicate upside for Brazilian growth over the next few years, staunch legislative opposition from Rousseff's PT, an ongoing impeachment trial and potential for substantial public pushback against cutting spending in the midst of a deep economic recession will likely stymie the pace of reform.
The Brazil Pharmaceuticals & Healthcare Report features BMI Research's forecasts for drugs and healthcare expenditure and imports and exports, focusing on the growth outlook for the prescription, OTC, patented drugs and generics market segments.
BMI's Brazil Pharmaceuticals & Healthcare Report provides industry professionals, strategists, company executives, investors, analysts and sales/marketing heads with independent forecasts and competitive intelligence on the Brazil pharmaceutical and healthcare industry.
- Benchmark BMI's pharmaceutical and healthcare market forecasts for Brazil, to test other views - a key input for successful budgeting and strategic business planning in the Brazilian pharmaceutical and healthcare market.
- Target business opportunities and risks in the Brazilian pharmaceutical and healthcare sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Brazil.
- Assess the activities, strategy and market position of your competitors using our company profiles (including SWOTs, KPIs and latest activity) and competitive landscape tables.
BMI Industry View
An at-a-glance perspective on the latest regulatory developments, key forecast indicators and major corporate developments, covering the prescription, OTC and generics markets. The pharmaceuticals and healthcare SWOT outlines strategic factors that affect the basic assumptions underpinning BMI’s forecast analysis, and taken together with BMI’s political, economic and business environment SWOTs, it gives a complete overview of market climate.
BMI Industry Forecast Scenario
Industry forecasts to end-2019 for all key indicators, supported by explicit assumptions, plus analysis of key downside risks to the main forecasts:
- Healthcare: Total healthcare expenditure (USDbn), healthcare expenditure (% of GDP), healthcare expenditure per capita (USD), hospital beds, doctors, and birth & mortality rates (all per ‘000 population).
- Pharmaceutical Market: Drug expenditure in USDbn, % of GDP and per capita (USD).
- Patented Drug Market: Prescription drug sales (USDbn & % of total sales).
- Generic Drug Market: Generic product sales (USDbn), generic sales (% of total sales).
- OTC Drug Market: OTC sales (USDbn & % of total sales).
- Macroeconomic Forecasts: Nominal and real GDP, % real GDP growth, % private consumption growth, % industrial output growth, % consumer price index, % GDP price deflator, exports, imports, trade balance, current account balance, foreign direct investment, exchange rate against USD, government expenditure and external debt.
BMI’s Pharmaceuticals and Healthcare Risk Reward Index
BMI’s Risk Reward Index provides investors (both national and multinational) looking for opportunities in the region with a clear country-comparative assessment of the market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors, with each position explained.
A snapshot of key market characteristics, including total size of the pharmaceuticals and healthcare segments, growth drivers, leading therapeutic areas and the competitive landscape
A focus on government healthcare reforms, epidemiological trends, mergers and acquisitions, product launches, market entries, FDI activity, R&D, biotechnology, clinical trials and supply chain issues.
Details of the industry regulatory framework and key legislation covering the licensing of new products/services, pricing and reimbursements, intellectual property, taxation and advertising, as well as analysis of the overall regulatory burden.
The competitive landscape section provides comparative company analyses and index by USD sales and % share of total sales – for the total pharmaceutical sector, as well as the OTC, generics and distribution sub-sectors.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate Company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.