Tuesday, 4 August 2009

Brazil - The consolidation of the Brazilian pharmaceutical distribution sector continues

Celesio invests in Brazil …

The German Celesio, the largest European wholesaler, acquired a majority stake in the leading Brazilian pharmaceutical wholesaling group Panpharma in July 2009. This is Celesio’s first acquisition outside of Europe, triggered by the company’s lost bid to overturn pharmacy ownership laws in Germany and Italy. The move will also help Celesio to diminish its reliance on the British pharmaceutical market which has been affected by price cuts in generic medicines and the weakness of the British pound against the euro. Founded in 1976, the Panpharma group comprises the Panarello, Sudestefarma and American Farma companies. The group has about 17.0% of the Brazilian retail pharmacy sector and is expected to increase its market share following Celesio’s investments.

Growth opportunities …

Brazil is the largest pharmaceutical market in Latin America and one of the most attractive BRIC markets. Espicom Business Intelligence projects a CAGR of 7.9% over the next few years. Between 1997 and March 2009, annual cumulative pharmaceutical sales more than trebled in local terms, whilst they nearly doubled in dollar terms. Consumption levels by volume have increased particularly since 2004, as the market is becoming more generic-lead. In fact, Brazil has the largest generic market in Latin America. The industry expects to do well in the current economic downturn and generics are expected to represent 20.0% of the retail pharmacy sector by volume in 2010. sanofi-aventis’ acquisition of Medley, announced in April 2009, is going to change the generic market, with increasing foreign participation.

Further reading - An in-depth analysis of the Brazilian pharmaceutical market is available from Espicom: The Pharmaceutical Market: Brazil

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