Generic sales have further expansion from 2012

Sales of generic drugs in pharmacies in Brazil jumped 18.7 percent in the first quarter of this year, to 270 million units, with the highest rate of expansion recorded for the interval from 2012. The economic crisis, the anticipation of purchases before the 12% adjustment authorized by the Government from April and an aggressive discount policy help explain this performance, which drew the attention of the industry itself because of its magnitude. Historically, in other times of crisis, as in 2009, sales of generics have just driven by consumer substitution of brand-name drugs, which are more expensive, for those products. This movement, in the evaluation of Executive Chairman of the Brazilian Association of generic drug Industries (PróGenéricos), Telma Salles, could have been retried earlier this year. "In times of economic difficulty, the generic absorbs more consumers," he says. At the same time, the increase of up to 12.5% in the price of medicinal products authorised by the federal Government, with implementation beginning in April, may have led to a greater effort of anticipation. This was the first time in more than ten years, the maximum adjustment index for medicines was above inflation, which would have powered the race for purchases before the entry into force of the increase. Only in March, according to data from IMS Health, complicated by consulting PróGenéricos, generic sales totaled 107.5 million units, above the average recorded in January and February, from 81.5 million and 81 million, respectively. This effect was noticed in the pharmaceutical market as a whole, says the Chief Executive of the pharmaceuticals industry Union in the State of São Paulo (Sindusfarma), Nelson Mussolini, for whom "real life to the pharmaceutical industry" will happen from May. "Everybody knew that there would be losses via replacement reset and that this year would be greater, because the formula [the index] is widely known," he says. From next month, however, when the readjustment will be incorporated into the drug chain, the industry will begin to feel the effects of rising unemployment and it is likely that the expansion rates displayed on this new year will not be repeated. "For the first time in the last ten years, the growth [in real sales] must be less than inflation," opines Mussolini. Last year, the high was 12%. In the generics segment, the posture is also caution about projections for the accumulated from 2016. "There''s no way to know how the economy will behave on the policy challenges that Brazil needs to consider," said Telma, noting that sales of generic recorded 0.4 percent drop in February compared with January. According to the Executive, is not ruled out the possibility of the segment to perform for the first time in history a result below the double digits. With the strong performance of the first quarter, generics again boosted the total volume of sales of medicines in the country. From January to March, the total pharmaceutical market grew 9.6% by volume, for 890.1 million units, while in revenue, already considered the discounts applied, the expansion was 10.8%, to 11.3 billion R$. "To exclude the generic industry, the result is growth at 6%," says Telma. The perception that laboratories can have launched a more aggressive discount policy in the first quarter is powered by low sales growth in this type of medicine. From January to March, growth for this criteria was 9.52 percent, to 1.5 billion R$, included all discounts applied, lower than the 18.7% expansion in units sold and 10.7% of the total. According to industry sources, some laboratories would have intensified promotions throughout the quarter, with a view to maintain or expand market share of generics. At the top of the ranking of the segment are Hypermarcas, the EMS and the Medley (of Sanofi). About this policy, the Executive Chairman of PróGenéricos States that, traditionally, retailers grants significant discounts to consumers and remember that the profit margins of the laboratories follow in retraction, pressed by cost increases and the exchange rate.