Laboratories defend fair prices to invest in Brazil
In recent months, two multinationals, Eli Lilly and Roche, have announced that they are going to stop producing medicines in Brazil, as part of the global reorganization of their industrial operations and portfolio. On the other hand, the local pharmaceutical industry has engaged in talks with the federal government in search of rules that will stimulate new projects and accelerate investments.
Between 2016 and 2018, national capital laboratories announced investments of at least R$ 3.4 billion in expanding production capacity and product development, and there is momentum for more. "It's an industry that can develop rapidly, which has grown by double digits a year over the last few decades, but it needs a friendlier business environment," says the executive president of the FarmaBrasil Group, Reginaldo Braga Arcuri. The eleven pharmaceutical companies brought together in the association accounted for 26% of the Brazilian pharmaceutical market in 2018, with R$ 16.6 billion in sales, and are responsible for the R$ 3.4 billion in disbursements announced over three years and compiled by FarmaBrasil.
According to Arcuri, the time is ripe for debate on a policy for the sector, especially since the demands are in line with the liberal discourse of the new government. Despite the difficulties, large national laboratories have taken the risk and are investing in innovation with their own money. "The industry doesn't want protection or subsidies," he says. Clear rules and adequate prices for innovation, adds Biolab's scientific director and partner, Dante Alario Junior, will stimulate national projects that currently exist in the field of ideas, or that are available on the international market and arrive in the country as imported products.
Biolab itself is negotiating with an American multinational to transfer new technology for production in the country, but the implementation of the project depends on the price that will be set by the Medicines Market Regulation Chamber (CMED). In 2017, it opened a research and development center in Canada, with an outlay of R$ 140 million, and announced investments of R$ 450 million in a new factory in Pouso Alegre (MG). If incremental innovation is not paid for in the country, however, there is a risk that Biolab will produce certain treatments in Canada and export them to Brazil, recognizes Alario. The closure of local production by foreign laboratories - a trend that has gained momentum since 2010 - opens up a vacuum in the domestic market that shouldn't be filled by imports, says Arcuri. Last year, according to FarmaBrasil, the trade deficit in medicines grew by 13%, to around US$ 6 billion, the highest in at least two decades.
Much is said about Brazil's dependence on imported active ingredients, but what weighs heavily on the trade balance is ready-made medicines. While imports of active pharmaceutical ingredients (APIs) grew 25% in the year, to US$ 2.1 billion, foreign purchases of medicines came close to US$ 7 billion, up 9.7%, driven by biologics and other highly complex medicines.
The industry's aim, Arcuri says, is not to prevent imports, but to enable local laboratories to expand exports and participate in the global market. With more than 300 member companies, the Pharmaceutical Products Industry Union (Sindusfarma) is very concerned about the closure of more factories in the country. "The big Brazilian pharmaceutical companies are not following this path because they don't yet have scale outside the country. But the same thing is happening that happened with pharmochemicals [APIs] a few decades ago," says the organization's executive president, Nelson Mussolini.
According to Arcuri, the central focus of the policy defended by the industry at the moment is the pricing of incremental innovation, which brings additional gains to that provided by the existing molecule - such as the use of nanotechnology to increase or facilitate the absorption of a product. Investment in nanotechnology in this case, he explains, ends up not being remunerated by the current pricing rule. Consequently, the industry is discouraged from going ahead with new projects. "Without innovation, there are no exports. And the pharmaceutical companies' game is global," he adds. The sector's assessment is that, until now, the local industry has been a supporting player in the global pharmaceuticals market, despite having the foundations - technical knowledge and scale, among other factors - to consolidate itself as a protagonist. "We are already at the frontier of biosimilars.
The biggest bottleneck is still the price rule for incremental innovation," says Alario. From this first phase, which was the transfer of technology for the production of biosimilars in the country, some laboratories are already venturing into the development of even more complex and innovative medicines.