10 YEARS OF GENERIC MEDICINES

IN BRASIL.

Growth – Earnings – Challenges

PróGenéricos - Generic Medicines Industries Association

Odnir Finotti - CEO

Brasil Population profile x Income x medicines access restriction

Fonte: IBGE (POF), SM = Salário Mínimo

More than US$5800

5%

US$2325 to US$5800

14%

US$930 to US$2325

31%

Bellow US$930

50%

Access Restriction

• No

• 30 – 40%

• 50 – 65%

• Above 65%

Private HealthPlan

• 78%

• 53%

• 29%

• 8%

A

B

C

D

• Generic medicines was created by Law Decree 9.787,

in 1999.

• It introduced the concept of interchangeble medicines

with bioequivalence proof regarding reference

products.

• First product launched in market: Feb/2000

Laws help to create new markets should entrepereneurs

see opportunities.

Objective and challenge: Increase access to reliable

medicines by improving offer and fostering

competitiveness to reduce price.

source: Companies – Pró Genéricos

Investments and Destination

From 1999 to 2004 = US$ 170 million

More US$ 354 million forecasted until 2010.

63%

24%

9%4%

Pharmaceutical and

Bioequivalence Tests

GMP Adjustments

Developing of New

Generic Drug

Increase Productive

Capacity

Employment Growth rate.

1999 = 100%

source: Companies – Pró Genéricos

11,0%

13,9%

21,2%

22,9%

26,8%

44,5%

2000 2001 2002 2003 2004 2005

GENERIC MEDICINES IN

BRAZIL

ACTUAL DATA

Generic Medicines = Market Authorization

source: Anvisa –Jun/2009

90% of the most known diseases

can be treated with generic

medicines.

89 pharmaceutical companies hold registers for Generic

Medicines .

# of Market Authorization

Manufacture Site Origin.

2.405

193

27

17

13

8

9

20

Brazil

India

Germany

Canada

Israel

Austria

Argentina

Others

Source: IMS Health

88,6% are developed and

manufactured locally in

Brasil.

Market Survey – Evolution Index

Source: IMS Health

Generic Medicines growth rate is much higher than those for

the total market.

Generic Medicines Market Share Market Survey – Evolution Index

Generic Medicines has constantly gaining market share

4 companies out of 10 largest pharmaceutical companies are

generic medicines producers.

Source IMS Health

PHARMACEUTICAL MARKET BRASIL - 10 TOP COMPANY RANKING

COMPANYMoving Annual Total - March

% Part.1999 2005 2006 2007 2008 2009

EMS 29° 5° 3° 2° 1° 1° 6,59

SANOFI-AVENTIS 1° 1° 1° 2° 2° 2° 6,24

ACHÉ 3° 2° 2° 3° 3° 3° 5,68

MEDLEY (SA) 32° 7° 6° 4° 4° 4° 5,67

NOVARTIS 2° 4° 4° 5° 5° 5° 4,1

EUROFARMA 28° 9° 8° 6° 6° 6° 3,90

PFIZER 7° 3° 5° 6° 7° 7° 3,06

BAYER SCHERING 23° 6° 7° 7° 8° 8° 2,86

ASTRA ZENECA 19° 22° 20° 15° 12° 9° 2,37

BOEHRINGER 11° 8° 9° 9° 9° 10° 2,24

Generic Medicines have contributed to

the development of the local companies.

RESULTS

AND

EARNINGS

Generic medicines must be 35% cheaper

than reference products (inovators).

Actually they have been 50% cheaper.

Generic Medicines - Increase access to

reliable products while saving money for

the patients.

Quite effective in providing more access to

reliable and cheaper medicines while

expanding the market.

3.6

00

4.7

51

6.1

01

7.2

79

8.4

90

10

.2

21

11

.4

32

3.109

3.612

4.297

4.856

5.197

5.798

6.743

3.267

2.887

2.681

2.459

2.329

2.178

2.041

9.9

76

11

.2

50

13

.0

79

14

.5

95

16

.0

15

18

.1

98

20

.2

16

2,003 2,004 2,005 2,006 2,007 2,008 2,009

GENERICOS SIMILARES MARCAS REFERENCIA TOTAL

ATENOLOL = million units

56

,5

%

brand referencegenerics

Generic 65% cheaper than reference product(Atenol®)

Patent expired in Feb 07. Legal actions

delayed Generic launch

26

7,8

13

32

6,6

74

40

4,0

17

54

7,9

66

45

9,6

85

21

2,4

50

0 0 0 0 36

4,8

48

1,0

53

,2

28

96

,2

70

15

4,0

39

21

0,9

55

22

9,2

74

19

2,0

80

28

4,1

86

36

4,0

83

48

0,7

13

61

4,9

72

77

7,2

40

1,0

16

,6

13

1,5

49

,8

64

2,004 2,005 2,006 2,007 2,008 2009

CLOPIDOGREL – Market evolution afteGeneric

launching.

Referência Genérico Marca Similar Total

36,1%

56,5%

brandreference Generic

Generic is 57% cheaper than reference product – Quickly took

leadership while doubling market size.

Most prescribed medicines in Brazil.

Source: Close Up- Abr09

Only Generic medicine can substitute the reference product.

Rivotril

Amoxycillin

Lexotan

Enalapril

Atenolol

Sibutramine

Metformin

Cephalexin

Bromazepam

Nimesulide

•Physicians are more and more prescribing Generics. 8 out of the10 top prescribed medicines in Brasil are Generics.

•Public awareness campaign among physicians informing aboutGeneric availability would contribute to increase prescriptions.

•Advertising activities among public hospitals and health centreswould contribute for the correct instruction about therapeutic andeconomic benefits of Generic medicines.

•Pharmacists play important role regarding substitution forGeneric medicines, therefore they are target for educationalprograms in order to dispense Generic Medicines accordingly

Generic medicine definitely increase access to medicine and

resulted in R$12,1 billion savings for the Brazilian population.

Savings for the population has reached

around US$ 6,0 bn.

Generic Medicines are also good tax payers.

VAT collected = US$ 2, 0 bn.

Fonte: Empresas Associadas – Pró Genéricos

0.074 0.236 0.470

0.797

1.226

1.796

2.528

3.438 3.672

2001 2002 2003 2004 2005 2006 2007 2008 2009

CHALLENGES

Source: IMS Health

Generic medicines have bigger market share where governments play a

key role in providing medicines.

60%

18%

45%

83%

30%

60%

35%

51%

44%

60%

7%

70%

63%60%

26%

14%

22%

55%

13% 13% 14%

20%

29%26%

4%

53%

31%34%

Units US$

Increasing Generic Medicines market Share

Challenges

Law enforcement: medicines prescribed by physicians can only

be changed by generic medicines.

Market research made as “secret customer” – the researcher shows the prescriptionor ask for the medicine by name and observe the pharmacist.

Source: Research Ipsos/Opinion – Dez/03

Results:

In 67% client receive the correct medicine.

In 33% client receive another type of product and, in this

case, 78% the suggested product was not generic.

Challenges

Increase the access to reliable and efficient

drugs

Public tenders

Law 9787 force the prescription by generic

name in public hospitals and health centers.

Law 8.666 force that the public tenders must

acquire medicines by the lowest price.

That is the reason why generic medicines have

poor participation in public tenders.

To qualify the public acquisitions in health

sector is the objective of PL 3536/04.

Challenges

Increase the access to reliable and cost

effective medicines.

To make sure that the pharmacists will follow the law

therefore dispensing generic medicines accordingly.

• To include new products and therapeutic classes in the

Health Ministry program Farmacia Popular would

expand the access to medicines to the population who

need it most.

• At the present the program offers 8 therapeutic

classes. The products included in the program are

subsided and the users co-participate with around 10%

of the public price.

To reduce the high taxes on medicine is

mandatory to enhance access.

Products Final price % tax.

Human

Medicines

35,7%

Salt 29,4%

Egg 21,8%

Meat 18,7%

Rice and bean 16,5%

Wheat flour 15,5%

Milk 13,8%

Reduction of tax increase the access and reduce the informal practice.

Public Price for medicines is

controlled by the

government. Among many

others, only VAT accounts

for 17% of the public price.

High taxes lead to

misappropriation and

informal practices , while

keeping high prices which

means a barrier to access

to medicines.

Intelectual Property Law instead of being an incentive to

innovation has become an excuse to extend period of

protection for product already on the public domain.

To guarantee the enforcement of the law.

To avoid patent extension or any other attempt aiming at

extending the period of protection and exclusivity

determined by law.

More and more companies are seeking for extra protection

time by using legal actions.

All those actions already in course have caused delays for

the introduction of generic version.

Obedience to the Intelectual Property Law would avoid legal disputes and

uncertainties on the right time to start commercialization of Generic

version.

PRÓ GENÉRICOSAssociação Brasileira das Indústrias de Medicamentos Genéricos

Rua Alvorada, 1280 – V. Olímpia - São Paulo

Tel.: +55-11-38979767

Website: www.progenericos.org.br

E-mail: progenericos@progenericos.org.br