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EDITORIAL Opinion Business and finance Supply Chain/Logistics Information Technology Packaging/Drug Delivery Marketing/Services Legal/Regulatory Executive Training & Development LATEST NEWS MEDIA INFORMATION: 2009 MEDIA KIT SUBSCRIBE

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Executive Training & Development Entering the Brazilian Pharmaceutical Market By: Marcelo Sicoli, EnterBrazil

Date: 2009-02-22

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S t a bl e e c o n o m i c s a n d g r o w i n g he a l t h c a r e c o n c e r n s m a k e B r a z i l o ne o f t h e t o p e m e r g i n g m a r k e t s , w i t h a c u r r e n t g r o w t h r a t e > 20 %

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M a n y a n a l y s t s a r g ue t h a t t h e f u t u r e f or B r a z i l , w hi c h ha s b e e n c a l l e d f or de c a d e s “ t h e c o u n t r y o f t h e fu t u r e , ” ha s f i n a l l y a r r i v e d . W i t h i nf l a t i o n u n de r c o nt ro l a nd e c o no mic gro w t h a bo ve t he w o rld a v e r a g e ( 5 .4 % a n d 5. 3 % i n 2 0 0 7 a n d 2 0 0 8, r e s p e c t i v e l y ) i t s c o ns i d e r a b l e p o pu l a t i on o f a l m os t 2 00 m i l l i o n p r e s e nt s v e r y a t t r a c t i v e p r o s p e c t s f o r p ha r m a c e u t i c a l c o m p a ni e s a l l o v e r t h e w o r l d . T h e h e a l t h s e c t or a s a w h o l e r e p r e s e nt s 8 % o f t he B r a z i l i a n GD P, a r o u nd U S$ 8 0 bi l l i on p e r y e a r . G ov e r nm e n t p u r c h a s e s r e p r e s e n t 50 % of t h e m a r k e t f or m e di c a l e qu i p m e n t s , a nd m o r e t h a n 9 0 % o f t h e va c c i nes a nd 2 5 % o f a ll drugs ( B ra z il ia n M inis t ry o f Hea lt h). I n 2 00 8 , t he B r a z i l i a n p ha r m a c e u t i c a l m a r k e t w a s e s t i m a t e d t o r e a c h U S $ 1 4 . 9 b i l l i o n , 3 4 % o f L a t i n A m e r i c a , j um pi n g 2 3 % f r o m 2 00 7 ( I M S H e a l t h ) . T w e n t y p e r c e n t of t h a t i s m a d e up o f g e ne r i c d r u gs , w h i c h c o s t o n a v e r a ge 3 5% l e s s t ha n r e f e r e n c e d r u gs ( P r o g e ne r i c o s ) . B r a z i l i a n c om p a n i e s h a v e a m a r k e t s h a r e o f a r o u nd 2 0 % o n l y .

Workforce and Supply Chain Top Location Must-Have Lists for Biopharma

O n t h e f o r e i g n t r a de s i de , B r a z i l i a n pr od u c t s t o t a l e d m o r e t h a n U S $ 96 1 m i l l i o n i n e x p or t s i n 2 00 8 , a 2 9 % i n c r e a s e f r o m 2 00 7 . T he m a i n e x p or t m a r k e t s a r e V e n e z u e l a ( 14 % ) , A r g e nt i n a ( 1 3 % ) a nd t h e U S A ( 1 2 % ) . O n t h e o t h e r h a n d , i m p o r t s a m o u n t e d t o U S $ 4. 2 8 bi l l i on , a n i n c r e a s e o f 2 1 % y e a r o v e r y e a r , c o m i n g m a i n l y f r o m t h e U S A ( 19 % ) , G e r m a n y a n d S w i t z e r l a n d ( 1 3 % e a c h ) . F o r e x a m p l e , a l l 4 5 0 t o ns o f a m ox i c i l l i n ( a nt i b i o t i c s ) c o ns um e d p e r y e a r a r e i m p o r t e d .

Despite historic risk during the metamorphosis from glamorous high-tech startup to pillar-of-thecommunity manufacturer-employer, biopharmaceutical companies remain near the top of the list of industries that US states see as key to their economic future. Biotechs looking for a place to throw down roots . . .

E s t i m a t e s p oi n t ou t t ha t 3 0 % o f t h e d r u g s s o l d i n B r a z i l a r e n o t r e gi s t e r e d . A c c o r d i n g t o t he B r a z i l i a n F e d e r a l P ol i c e , 50 0 t h o us a n d un i t s ( 13 0 t o ns ) o f n on - r e g i s t e r e d a n d c ou n t e r f e i t m e d i c a t i o ns w e r e s e i z e d i n 20 0 8 , m a i nl y a m ph e t a m i ne s , s t e r oi ds , c on t r a c e p t i v e s a nd d r u gs fo r e r e c t i l e dy s f u nc t i o n . N e w l e g i s l a t i o n ( t o b e i m pl e m e n t e d g r a du a l l y du r i ng t h e ne x t t hr e e y e a r s ) w a s pa s s e d i n J a n u a r y o f 2 0 0 9 b y t h e Se n a t e t o e n f or c e m on i t o r i n g o f m e d i c a l p r o d uc t s v i a e l e c t r o n i c b a r c o d e s y s t e m s o n t h e p r o d u c t i on , c o m m e r c i a l i z a t i on , d i s t r i b u t i o n , a n d m e di c a l p r e s c r i p t i o n of d r u gs .

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Fed eral reg ulato ry b od ies T h e N a t i o n a l H e a l t h S u r v e i l l a nc e A g e nc y ( A N V I S A ) , c r e a t e d i n 1 99 9 , i s t h e e q u i v a l e n t o f t h e A m e r i c a n F D A . A NV I S A i s a n i n d e pe n d e n t l y m a na g e d, f i n a nc i a l l y - a ut o no m o u s r e g ul a t or y a ge n c y , w i t h s e c u r i t y o f t e n u r e fo r i t s d i r e c t or s du r i n g t h e p e r i o d o f t h e i r m a nd a t e s . A NV I S A i s m a na g e d b y a bo a r d of d i r e c t or s , c o m p r i s e d o f f i v e m e m b e r s . Wi t h i n t h e s t r u c t u r e o f F e d e r a l Pu b l i c A d m i ni s t r a t i o n, t h e A g e n c y i s l i n k e d t o t h e M i n i s t r y o f H e a l t h , u n d e r a M a n a g e m e n t C on t r a c t . T h e a g e nc y i n c o r p o r a t e s a dd i t i o na l m a n d a t e s : c o o r d i n a t i o n of t h e Na t i on a l S a n i t a r y S ur v e i l l a n c e S y s t e m ( S NV S ) , t h e N a t i on a l P r o g r a m of B l o o d a n d B l o o d P r o d u c t s a n d t h e N a t i o n a l P r o gr a m o f P r e v e nt i o n a n d C on t r o l of H os pi t a l I n f e c t i o n s ; m on i t or i n g o f d r u g p r i c e s a n d pr i c e s o f m e d i c a l de v i c e s ; a t t r i b u t i o n s p e r t a i n i n g t o r e g u l a t i o n , c o n t r o l a n d i n s p e c t i o n o f s m o k i n g pr od u c t s ; t e c h n i c a l s u p p or t i n gr a n t i n g o f p a t e n t s b y t h e N a t i o n a l I n s t i t u t e o f I n d us t r i a l P r o p e r t y . A N V I S A i s h e a d q ua r t e r e d i n t h e c a p i t a l o f B r a z i l , B r a s i l i a , p r e s e n t l y t he f ou r t h - l a r g e s t c i t y i n t h e c ou n t r y . I n a d d i t i o n, A NV I S A e x e r c i s e s c o n t r o l o v e r p o r t s , a i r p o r t s a n d bo r d e r s a n d a l s o l i a i s e s w i t h t he B r a z i l i a n M i n i s t r y o f F o r e i g n A f f a i r s a n d f o r e i g n i n s t i t ut i o n s ov e r m a t t e r s c on c e r ni ng i n t e r n a t i o n a l a s p e c t s o f s a n i t a r y s u r v e i l l a n c e . M o r e i n fo r m a t i o n , a s w e l l a s m a n y r e l e v a n t l a w s i n E n g l i s h c a n be o bt a i n e d f r o m t h e a g e nc y ’ s w e bs i t e . [ 1] U S P h a r m a c o pe i a r e c o g n i z e d t h e v a l u e of t h e B r a z i l i a n m a r k e t b y op e n i n g i t s f o ur t h o v e r s e a s l o c a t i o n ( a f t e r S w i t z e r l a nd , I n d i a a n d C hi n a ) i n S a o P a u l o l a s t A u g us t . “ B r a z i l ha s o n e o f t h e f a s t e s t - g r o w i ng p h a r m a c e ut i c a l i n d u s t r i e s i n t h e w o r l d , [ a n d ] i s i n c r e a s i n gl y a dh e r i n g t o i n t e r n a t i o n a l q u a l i t y s t a n d a r ds ,” s a i d D r F l a v i o V o r m i t t a g , M D , M S , V P, i n t e r n a t i on a l , fo r U S P . K e y t r a d e a s s o c i a t i o n s i n c l ud e F e b r a f a r m a , t h e B r a z i l i a n P ha r m a c e u t i c a l I n d u s t r y

22/6/2009 18:23

Pharmaceutical Commerce

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F e d e r a t i o n , I n t e r f a r m a , t he B r a z i l i a n R e s e a r c he d - b a s e d P h a r m a c e u t i c a l M a n u f a c t u r e r s A s s n . , a n d Pr oG e n e r i c o s , t h e B r a z i l i a n A s s n. o f G e n e r i c D r u g s I n d us t r y ( s e e bo x ) . I n t e r f a r m a i s t h e r e p r e s e nt a t i v e o r g a n i z a t i o n t o t he U .S . ’ s P ha r m a c e u t i c a l R e s e a r c h a n d M a n uf a c t u r e r s A s s n . ( P hR M A ) . I n t e l le c t u a l p ro p e r t y ri g h t s I n B r a z i l , n o he a l t h- r e l a t e d p r o d u c t c a n be p r o du c e d , i m p o r t e d , e x p o s e d f o r s a l e , o r d e l i v e r e d fo r c o n s u m p t i on b e f o r e a r e g i s t r a t i on i s o b t a i n e d f r o m A N V I S A . B e f o r e t h a t , a c o m p a n y ha s t o b e f i r s t r e g i s t e r e d w i t h t h e s t a t e l e v e l h e a l t h a u t h o r i t y a n d t h e n i n t h e F e d e r a l l e v e l ( d on e by A N V I S A ) . I f a c o m p a ny d o e s no t w a n t t o s t a r t f or m a l op e r a t i on s i n t h e B r a z i l i a n t e r r i t or y a nd o nl y e x p or t pr o du c t s t o t h e c o u n t r y , t h e r e i s t h e p o s s i b i l i t y o f h i r i n g a c o m p a n y o r f i n d i n g a d i s t r i b u t o r a l r e a dy l e ga l i z e d t o be c o m e a n e x c l u s i v e d i s t r i b u t o r o f t he f or e i g n p r o d uc t s i n B r a z i l . T h e r e g i s t r a t i on o f a d r u g i s v a l i d f or 5 y e a r s , a nd t h e c o s t s v a r y a c c o r d i n g t o t he s i z e o f t h e c o m p a n y r e q ue s t i n g i t . A l a r g e c o m p a n y ( r e v e n u e a b ov e U S $2 5 m i l l i o n ) f or e x a m p l e , w ou l d s p e nd R $ 8, 0 0 0 ( U S$ 4 , 0 00 ) fo r l i c e n s i n g a n e w p r o d uc t , w h i l e t he r e g i s t r a t i o n o f a “ f a m i l y ” o f pr od u c t s ( s a m e d r u g w i t h d i ff e r e n t s i z e s a n d p r e s e nt a t i o n s ) w o u l d c os t R $ 1 2 ,0 0 0 ( U S $ 6, 0 0 0) . J us t t o r e c e i v e a v i s i t fr om a n A NV I S A t e c h n i c i a n t o o bt a i n a “ C e r t i fi c a t e of G oo d M a n u f a c t u r i n g Pr a c t i c e s ,” a c o m p a ny w i l l h a v e t o s p e n d U S $1 8 , 50 0 , r e ga r d l e s s of i t s s i z e . O n e p o i n t o f c on c e r n f o r fo r e i gn c o m p a ni e s i s t h e o b s e r v a n c e o f i nt e l l e c t u a l p r o p e r t y r i g h t s . A t l e a s t i n c o m p a r i s on w i t h R u s s i a , I nd i a a n d C h i n a , B r a z i l i s b e s t p os i t i on e d i n r e ga r d s t o t h e T R I P S ( A g r e e m e n t o n T r a d e - R e l a t e d A s p e c t s o f I nt e l l e c t u a l P r o pe r t y R i g ht s ) n o r m s . N o n e t he l e s s , i n e m e r g e nc y s i t ua t i o ns , n a t i o n a l l e g i s l a t i o n a llow s the c ance ll at ion of pat ents ( or “ compuls ory l ice ns ing” a s it is ca ll ed) , a s s e e n i n M a y 2 0 07 , w i t h t h e a n t i - A I D S dr ug E f a v i r e n z , p r o du c e d b y M e r c k S ha r p & D oh m e , e v e n a f t e r a n o f fe r w a s m a d e b y t h e c o m p a n y t o l o w e r t h e p r i c e b y 3 0 % . A m a j o r c r i t i c i s m o f t h e l e g i s l a t i o n ( w h i c h p r o v i d e s t h a t t h e A g e nc y h a s 9 0 da y s t o a s s e s s t h e p r o c e s s e s f i l e d w i t h i t ) i s t h a t i t d o e s n ot m e n t i on a de a d l i n e fo r t h e e v a l u a t i o n o f t e c h ni c a l r e q ui r e m e n t s , w h i c h c a u s e s s o m e p e t i t i on s t o t a k e m o r e t h a n a y e a r t o b e f i n a l i z e d, s i nc e t h e y e n t e r a w a i t i ng l i s t w i t h n o r e g u l a t i o n . D o i n g b u s in e s s in B r a z i l M a n y p o s i t i v e a s pe c t s o f t h e B r a z i l i a n ph a r m a c e u t i c a l m a r k e t d r a w t he a t t e n t i o n of f or e i gn e r s . M o s t s e n i o r o ff i c i a l s i n t h e M i n i s t r i e s a nd R e g u l a t o r y A g e nc i e s d o n o t s p e a k E ng l i s h . H o w e v e r , s om e j u ni or of f i c i a l s c a n b e f ou n d w i t h g o o d k n o w l e dg e o f t h e l a n g u a g e . A l t h ou g h t h e c o u n t r y i s s t i l l p l a c e d i n i nt e r m e di a r y p os i t i o n s o f w o r l d c o r r u p t i o n r a n k i n g s , t h e f a c t t h a t t h e B r a z i l i a n F e d e r a l Go v e r n m e n t p a y s e m p l o y e e s s a l a r i e s s om e t i m e s 3 t o 4 t i m e s hi gh e r t h a n t ho s e f ou n d i n t he p r i v a t e s e c t o r on a n e nt r y l e v e l a c t s a s a n i m p o r t a n t d i s i nc e n t i v e . W i t h q u a l i f i e d p r of e s s i on a l s f r o m t o p u ni v e r s i t i e s c o m p e t i n g fo r a p ub l i c j ob , pr i v a t e c o m p a ni e s i n s om e i n d u s t r i e s h a v e a h a r d t i m e t o f i n d q ua l i fi e d p r o f e s s i o n a l s . B r a z i l i a n s , c u l t u r a l l y s p e a k i n g, a r e a l w a y s v e r y o pe n a n d r e c e p t i v e t o f or e i g ne r s i n i n f or m a l s o c i a l e n v i r on m e n t s a s w e l l a s i n t h e c o r po r a t e r e a l m . O n e t hi n g t o b e h i g hl i g ht e d, h ow e v e r , i s t h a t c o m p a n i e s ne e d t o e s t a b l i s h a p u bl i c p e r c e p t i o n of g e n e r a t i n g j ob s a n d p r o m o t i ng p ub l i c h e a l t h, a n d n o t o f p u t t i ng p r o fi t a b i l i t y f i r s t . O n e o f t h e m o s t c o m p l e x a n d h i g he s t t a x bu r d e n i n t he w or l d a l s o p o s e s s e r i ou s c h a l l e n ge s f o r c o m p a ni e s op e r a t i n g o r pl a n n i n g t o s t a r t a c t i v i t i e s i n t h e B r a z i l i a n t e r r i t o r y . A c c o r d i n g t o a r e p o r t b y t h e W o r l d B a n k , a c o m p a n y c a n s pe n d u p t o 72 % o f i t s p r o fi t s o n t a x e s a n d t a k e 2 , 6 0 0 h o ur s pe r y e a r t o f u l f i l l b u r e a u c r a t i c o bl i g a t i o n s , c om pa r e d t o 43 0 . 5 h o u r s i n ot h e r L a t i n A m e r i c a n C ou n t r i e s a n d 2 02 . 9 i n t he de ve lo pe d w o rld. PC

A B O U T TH E A U TH OR M a r c e l o S i c o l i i s e x e c u t i v e m a n a ge r o f E n t e r B r a z i l C on s u l t a nc y ( e n t e r b r a z i l . c o m , t e l : 5 5 ( 6 1 ) 3 3 6 1 1 8 6 9, e - m a i l , m a r c e l o s i c o l i @ ho t m a i l . c o m ) , i n B ra s il ia . E nt er Bra z il s pec ia liz es i n ma r ke t s t udie s , d i r e c t c o n t a c t w i t h i m p o r t e r s / e x po r t e r s , a n d t h e c om pl e t e i m p l e m e nt a t i o n p r o c e s s o f o pe n i n g a n d m a n a g i n g a b us i n e s s o ff i c e i n t h e B r a z i l i a n t e r r i t or y . R e c e n t c l i e nt s i n c l u d e S c h e r i ng - P l o u g h ( U S A ) , T a t e & L y l e ( E ng l a n d ) , F e de x ( U SA ) , Se r u m I ns t i t ut e - V a c c i ne s ( I n d i a ) .

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