The editorial team at Panorama Farmaceutico explain why coordinated action is needed within Brazilian pharma to reduce dependence on API imports from abroad and increase medical sovereignty. *
The COVID-19 pandemic has exposed the global pharmaceutical industry’s dependence on markets such as India, the source of about 20 percent of the world’s generic supplies. Against this backdrop, increasing domestic production of medicines is likely to become even more important for countries across the world, including Brazil.
For Telma Salles, executive president of the Brazilian Association of Generic Medicines Industries (PróGenlicos) , Brazil needs to lose its dependence on inputs from abroad. “As a minimum, we have to be capable of producing enough to supply our domestic market, if not in everything, then what is essential,” she notes.
Brazil is capable of producing a significant amount of medicines in domestically, since about 75 percent of demand is supplied by the local pharmaceutical industry. “However, for the production of these drugs, we are 76.4 percent dependent on imports of active pharmaceutical ingredients (APIs)”, explains Reginaldo Arcuri, executive president of the FarmaBrasil Group (GFB) , an entity that brings together 12 companies with national capital: Aché , Biolab , Biomm , Bionovis , Blanver , Cristália , EMS , Eurofarma , Hebron , Libbs , Orygen, and Receptor .
According to Sylvia Hacker, head of new business at Sauad Farmacêutica, part of the Neopharma group, there is an urgent need for integrated actions, aimed at minimum autonomy for the manufacture of inputs, with less bureaucracy. “You can’t depend on 90 percent of imports. The ideal would be fifty-fifty, remembering that importing is also a way to obtain competitiveness and implement technological innovations,” she posits.
In the 1980s, Brazil made a decision that it would not invest in APIs. Since then, local industries specializing in inputs are rare. For Telma, an API factory for domestic production is not possible. “Raw material costs involve huge amounts and dedicated production. We need to have a vigorous input industry, with the capacity to compete with India. But for that you need volume to have more competitive prices. The production of inputs in Brazil ends up being expensive, because the cost is high, our labour costs are higher, and we have a lot of taxes,” he laments.
A Defence Industry
For Arcuri, the pharmaceutical industry with national capital is capable of responding to the challenges of producing more with quality, with innovation and reducing the country’s external dependence. “One of the most important aspects is the framing of the pharmaceutical and pharmaceutical industry as a strategic defence product (PED) and strategic defence company (EED), defined by Law 12.598 / 2012,” he points out.
“The governments of several countries are accelerating their investments in pharmaceutical products because their security strategies now aspire not only to national development but also to defend populations against health-based threats, such as bioterrorism and pandemics,” he explains.
Pharma Industry Barriers
It is estimated that 70 percent of the approximately 2,300 registered API producers in the world are located in China and India, countries that are very competitive in cost. Another part of the explanation for the lower margins obtained by the pharmaceutical industry is its high degree of fragmentation, which contributes to the fierce rivalry between competitors.
The recent history of the international pharmaceutical industry is permeated by a broader movement towards the internationalization of production activity. “In search of lower costs, leading companies from various industrial sectors from the United States and Europe have moved to other countries. Through various public policies, countries like India have managed to strengthen their national companies and have acquired technological and production skills.
A Competitive National Industry
Brazil continues to import, in an increasing way, medicines of all types, mainly those of greater added value, contributing to the high deficits in the trade balance of all the industries related to health. Imports of medicines reached USD seven billion in 2019, with USD two billion (30 percent) of which were biological medicines.
The country imported a significant amount of products with high added value, such as biological medicines. During 2019, the category of finished immunotherapeutic drugs (in doses or ready for retail sale) led imports, reaching USD one billion.
In this respect, it is worth highlighting the relevance of manufacturing organic products locally. “The companies associated with the FarmaBrasil Group have this commitment, through the Partnerships for Productive Development (PDPs), especially for the production of infliximab, betainterferone 1A, etanercept, golimumab, certolizumab pegol, rituximab, trastuzumab, bevacizumab, palivizumab, insulins, tocilizumab, adalimumab, among others,” concludes Arcuri.
* This is a translation of an article originally published 4 May, 2020 in Panorama Famaceutico here (Portuguese).