On 30 May 2023, President Lula da Silva assembled the first South American summit in nearly a decade. In reviving the Union of South American Nations (UNASUR), the Brazilian leader hoped to drive the pharma trade forward and raise disease response standards across the region.

All twelve leaders present signed the Brasilia Consensus, which was dedicated to “reaching an effective South America Free Trade Area” like the European Union (EU). The Consensus also includes commitments to cooperate on various agendas, including raising investment, improving market access, and removing unilateral trade measures.

With clear and ambitious goals for Brazil’s pharma sector in view, nearly 12 months on, the industry reflects on the improvements made and strides that still need to be realized.

Pursuing world-leading healthcare

Brazil has the world’s largest government-run public healthcare system and the continent’s biggest economy. It also has the largest pharma industry in South America, producing approximately $14.7bn in annual pharma sales.

“Brazil has its particularities, like any other country, but we have a dynamic healthcare system, which is a global reference in several areas and of which we are very proud,” a spokesperson from Merck KGaA Brasil told Pharmaceutical Technology.

GlobalData, the parent company of Pharmaceutical Technology, forecasted that healthcare spending in Brazil will grow by 4% in 2024, reaching BRL $940.9bn per year ($192.5bn).

Hailing the pharma industry as “Brazil’s strategic asset”, sector association Sindusfarma is highlights Brazil’s role in global efforts to research and produce vaccines against Covid-19, and be an important player in clinical research and manufacture of immunizing drugs on a large scale.

In Brazil, pharma companies with national capital maintain partnerships with local universities, resulting in the discovery of active ingredients and new drug developments exported to several countries. Simultaneously, international pharma companies have conducted clinical research on Brazil’s emerging products.

Hopeful for regulatory harmony

Due to its fractured state, fixing Brazil’s challenging regulatory landscape was a priority at the 2023 South America Summit. Lula emphasised the need to implement regulatory convergence norms to eradicate the restrictive pharma import and export conditions.

Almost 12 months later, Brazil’s regulatory environment remains a significant hurdle for the pharma industry to overcome. “Without legal certainty and stable rules, this is practically impossible,” says Nelson Mussolini, executive president of pharma industry association Sindusfarma (Sindicato da Indústria de Produtos Farmacêuticos) and a Brazilian Health Council (CNS) member.

Misunderstanding over intellectual property’s role is an area requiring reviews and updates. “Political and health leaders still persist in assuming that patent breaking, even temporarily, can encourage the production of medicines and vaccines and expand the population’s access to essential goods for public health,” Mussolini details.

Still he says the handling of the coronavirus in Brazil demonstrated its control was only possible due to technology transfer negotiations among national and international pharma industries, public laboratories, research centers and Brazilian and world authorities.

“It was not a haphazard success,” Mussolini says, commenting on Brazil’s approach to Covid-19. Clinical trials for new drugs involve complex processes, long and uncertain development stages, and high costs. “In Brazil and around the world, observing intellectual property rights is critical for the development and supply of new drugs and vaccines and the strengthening of the clinical trials system,” Mussolini adds.

Brazil’s broader political and legal landscape also raises questions. “The country loses investments of more than BRL 2bn ($382m) every year because of unnecessary bureaucracy and provisions that, by creating legal uncertainty, drive away sponsors of clinical trials,” Mussolini states.

“A government policy is still lacking,” Mussolini adds, highlighting that Brazil needs “a long-range plan allowing the country to explore the great potential of the pharmaceutical area as a vector for scientific, technological, economic and social development”.

“We are not advocating here for the withdrawal of individuals’ rights from research but for the modernisation of the regulatory framework,” Mussolini asserts.

Investing in disease management

The spread of infectious diseases has caused catastrophic effects in South America, caused by insufficient funding, training and resources as well as its fragmented regulatory environment. Almost 43% of the world’s Covid-19 fatalities were in Latin American and Caribbean nations, where vaccination rates were slower as wealthier nations stockpiled vaccines.

Furthermore, in the past decade, Latin American and the Caribbean countries have gone from having one of the highest childhood vaccination rates globally to one of the lowest, UNICEF reported, seeing 67 million children not receiving one or more vaccines in three years due to health service interruptions.

Still, Sindusfarma’s Mussolini earmarks the Latin American country as an experienced frontrunner in harnessing its capabilities to develop drugs safely and effectively. “Brazil has tradition and experience in clinical trials, and it has internationally renowned researchers, hospitals and research centers,” Mussolini says. Today, Brazil aims to enhance pharma research and production and lower the region’s dependence on foreign medical imports from countries such as the US, China and Russia.

Biotechnology, including biologics, biosimilars and advanced therapies, is shaping Brazil’s pharma sector. “Brazil is the only country with more than 100 million inhabitants that has a free and universal public health system that opens space for technological development and collaboration to create programs focused on expanding the population’s access to treatments for diseases that impact public health,” a spokesperson from Merck KGaA Brasil shares.

Achievements 12 months later

“Brazil produces high-quality medicines, has a large installed capacity and little by little has been accumulating patents for innovative products,” Mussolini promotes. “In addition, its public and private health system is extensive and a reference for universal care,” shares.

“Currently national and global health is going through a period of great transformation and despite being a complex market, the pharmaceutical sector has become increasingly attractive and promising, especially for foreign companies with a long-term vision,” says Merck Brasil’s spokesperson.

“Its population’s consumption potential is enormous,” Mussolini shares. As a result, many large pharma companies are present in Brazil and have expansion plans. Merck KGaA Brasil, for example, has pledged to invest more than BRL$100m ($19 mn) in the country by 2025 to modernize its industrial park in Rio de Janeiro. In February 2024, the pharma company announced it will be opening a new $21.7m distribution centre in São Paulo.

In March 2024, Brazil’s Fundação Oswaldo Cruz (Fiocruz), a national public health foundation, announced an agreement with Boehringer Ingelheim to manufacture generic empagliflozin, a diabetes drug, to use in Brazil’s public health system.

However, despite Brazil’s potential and large company presence, Mussolini says, “As the current health crisis has shown, this is not enough”. Pharma is a multibillion-dollar market. “In view of its privileged status in the pharma and health area, the country can and should dream bigger, both to meet its needs and to take advantage of the opportunities that the post-pandemic international context offers in our continent,” says Mussolini.