Generic expansion loses steam

Arquirrivais in the generics segment, the Brazilian company EMS and the Medley, controlled by France's Sanofi, for span the span each shelf space of pharmacies in the country. The strategy adopted by these companies and competitors-the aggressive policy of discounts-up to then was the main weapon to advance in market share. This practice, however, has reached its limit, experts heard by the value. "The discount spree is ending," said a source.
By law, the generic drugs are 35% cheaper than the reference. But, in practice, the average discounts on these products reaches 50%. "On the market, many companies gave 90% discount for certain products to win the market", said the same source.
Sales of medicines in the country are losing steam in recent months, which for now is considered a factor. In the case of generics, that record a growth above the average of the reference products, Drugmakers already signaling review the route of industry expansion.
In the first quarter, the participation of generic drugs in the domestic market stood at 27.3%. In the same period last year, the slice was 25.8%, according to the Brazilian Association of generic drugs (generics). "Our goal is to end this year with 30% participation and, in 2015, with 35%. But we will do a review, "he said to the President of the generics, Telma Salles.
Sales of generic drugs in the period totaled 176.5 million units, an increase of 15.5% over the first quarter of 2012. In revenue, the industry was worth r $ 2.9 billion, up 21% on the same period last year. The total pharmaceutical market, which includes all categories of medicinal products, totaled 657.8 million units in the period, up 9.8% recorded in the first three months of 2012. To delete the generic of the total sales, the sector's growth was lower: 8.4% in units. In values, the performance comes to be negative in 2.8% without accounting for generics, according to the consulting firm IMS Health.
The generics market continues to boost the industries, but sales are well below the average observed two years ago, said Telma Salles. Between 2010 and 2011, lived a golden phase, with the fall of important patents like Lipitor (combat high cholesterol), Viagra (erectile dysfunction), both from Pfizer, and Crestor (heart disease), AstraZeneca, considered "blockbusters" (champions). The era of famous molecules is running out. For this year, among the main products that must lose the patent are the Ezetimibe (MSD), to treat cholesterol; Neofinavir (Roche), used in the Aids cocktail; and Sirolimus (Wyeth), immunosuppressant to prevent rejection and transplant organs. "Despite the slowdown in sales, the generics market has strong potential for expansion."
A survey by the Institute of postgraduate studies for pharmaceuticals (ICTQ) shows that 68% of Brazilians say they consume generics. This, however, is concentrated in the capitals of the Southeast and South of the country-the State of São Paulo in Brazil is in first place. According to the same survey, 70% of Brazilians say they rely on the effectiveness of these medicines. The laboratories Medley, Neo, Eurofarma, Aché, EMS and German are singled out, in sequence, as the most reliable.
The value, the President of Sanofi to Latin America, Heraldo Marchezini, stated that the year 2012 has been tweaking and competition in the industry is a natural movement of the market. In 2009, when purchasing the generic leader Medley national in the country, Sanofi has unleashed a strong consolidation movement, driven by fat margins.
The Medley and the national EMS are giant competitors in this segment. In the last 12 months up to March, the Medley sold 175 million units of medicines. The EMS, in the same period, 161 million units. But if sales of the companies controlled by the Group-Legrand and Germed-national company exceeds the Medley, with 230.5 million units.
The EMS see with ease the changes in behaviour and individual adjustments. "We are in a segment [generic] that was extremely driven in recent years in Brazil, attracting great diversity of ' players ' and a high degree of competitiveness. And that tends to continue organic growth above the levels of the total market, inventory adjustments periods living and any achievements arising from liquidity management of the distribution chain, "said the company in a statement. "The EMS permanent evolution of bet your portfolio, in its pioneering spirit and agility that characterize its management culture, which puts it in the leading position for seven consecutive years." From January to March, the company expanded in about 20% of its turnover in comparison with the same period in 2012. In the generics market, the real growth was 23%.
According to Nelson Mussolini, President of the syndicate of Pharmaceutical Industry in the State of São Paulo (Sindusfarma), margins of pharmaceutical have been affected by increased costs, including labor and Exchange. "The bargaining was 8.5%, not to mention the Exchange." Pharmaceutical industries are heavily dependent on imports of raw materials for the production of medicines.