1) Brazil has improved its infrastructure, scientific capabilities, and strategic initiatives to promote drug discovery research. Positive economic growth, political stability, expanding patient populations, and increasing governmental and private investments are creating new opportunities for drug R&D in Brazil. 2) The Brazilian pharmaceutical market is the largest in Latin America, with increasing investments from both domestic and multinational companies. The government has also established laboratories and initiatives to promote local innovation and reduce reliance on imports. 3) Brazil possesses natural resources and biodiversity that could provide opportunities for new drug discoveries, especially through partnerships between domestic and international researchers utilizing Brazilian expertise and technologies.

1. IDrugs 2009 12(8):497-502
© Thomson Reuters (Scientific) Ltd ISSN 2040-3410
FEATURE REVIEW
Brazil: An emerging partner in drug R&D
Debora G Rodrigues
Address
Hospital Alemão Oswaldo Cruz, Scientific Department, Brazilian Society of Pharmaceutical Medicine (SBMF),
Rua João Julião, 331 - Bela Vista, São Paulo, 01323-903, Brazil
Email: sbmf@sbmf.org.br
With the need for innovation in drug discovery and development and changes to patent laws that are enabling greater IP protection,
many pharmaceutical companies are pursuing international cooperation agreements with foreign companies as part of a global
development strategy to enhance product pipelines. Brazil, the largest pharmaceutical market in Latin America, has improved its
infrastructure, scientific and technological capabilities and has created a sustainable strategy to promote drug discovery research
activities. Positive economic growth, a stable political structure, expanding patient populations and increasing governmental, private and
foreign investments are creating a new landscape for drug R&D in the country. As Brazilian-based pharmaceutical companies become
further established, new opportunities for partnerships and collaborative alliances are becoming available for the drug discovery process,
as well as for co-manufacturing and co-marketing efforts. This feature review provides an overview of the Brazilian pharmaceutical
market and discusses current opportunities, emerging trends and challenges for this expanding market.
Keywords Brazil, clinical trial, drug R&D, pharmaceutical market
Introduction become important outsourcing locations for conducting
The advent of new drug screening technologies, such as trials; these countries have large populations, established
drug robotics, bioinformatics, HTS, combinatorial chemistry regulatory systems, qualified investigators, well-established
and molecular modeling, as well as progress in the multinational pharmaceutical bases and expansive
fields of molecular biology and biotechnology, promised a pharmaceutical regional markets.
new era of medicine and significant advances to the drug
discovery process. However, productivity in the area of In addition to the outsourcing of clinical trials, the pursuit
drug discovery has yielded disappointing results. The of cost-effective innovation has driven multinational
number of NCEs and blockbuster drugs introduced to the pharmaceutical companies to increase early-stage drug
market has declined in the last decade. In 2008, the FDA development activities in countries such as India and China.
approved 24 new drugs compared with 18, 22 and 20 in Among the emerging countries in Latin America, Brazil is
2005, 2006 and 2007, respectively, suggesting a modest particularly appealing for conducting R&D. The country's
increase in the number of approvals. However, compared economic stability, strengthening technological and
with the number of drug approvals granted in the previous scientific capabilities, expanding regional market and
decade (eg, 37 in 1998, 45 in 1997 and 56 in 1996), the governmental incentives for innovation have made
number of successful NDAs has decreased significantly. pharmaceutical companies in Brazil attractive partners
Furthermore, with respect to therapeutic novelty, few of for collaboration in early drug R&D. This feature review
the 24 drugs approved in 2008 are anticipated to become provides an overview of the changes that have occurred
blockbusters. in the Brazilian pharmaceutical market during the last two
decades, highlights the future challenges and opportunities
To address patent expirations on blockbuster drugs, strong faced by the industry, and discusses the governmental
growth in the sales of generic drugs, and fewer drug and private initiatives aimed at establishing a strong
approvals, pharmaceutical companies are attempting foundation in drug R&D. The progress and difficulties
to identify ways to improve the drug discovery and experienced in conducting multinational clinical trials in
development process. Strategies pursued include Brazil are also discussed.
acquisitions of IP and entry into licensing deals, outsourcing
drug development phases, and establishing new R&D The Brazilian pharmaceutical market
collaborations. The pressure for accelerating drug Among emerging countries, Brazil, Russia, India and
development and reducing the costs of clinical trials has China comprise the so-called BRIC nations. The concept of
led to the outsourcing of trials to countries outside of the BRIC nations was introduced in 2001 by Jim O'Neil, a
US and EU. In the last two decades, emerging markets global economist with Goldman Sachs, and refers to the
such as India, China, Russia, Korea and Brazil have fast-growing developing economies of these countries.

2. 498 IDrugs 2009 Vol 12 No 8
The BRIC thesis posits that China and India will become pharmaceutical company in Brazil, was valued at
the dominant world suppliers of manufactured goods and approximately US $287 million. In 2007, the value of
services, respectively, while Brazil and Russia will become the leading company, Brazilian-based EMS SA, was
similarly dominant as suppliers of raw materials (www2. approximately US $870 million. Three additional Brazilian-
goldmansachs.com/ideas/brics/book/99-dreaming.pdf). based companies were also ranked among the top 10
The BRIC nations represent almost 40% of the world's pharmaceutical companies in Brazil in 2007 (Table 1). In
population, hold large reserves of natural resources and overall drug sales in the country, Brazilian-based
have experienced a steady increase in national and foreign pharmaceutical companies have a national market share of
investments. With respect to the pharmaceutical industry, approximately 30% and control 80% of generic drug sales.
progress in improving regional pharmaceutical companies In the first quarter of 2009 15.8% of drug sales comprised
and expanding scientific and technological capabilities has generic drugs and, by 2011, sales of generic drugs are
been observed among the BRIC nations in the last decade. forecasted to constitute 23% of all drug sales. Sandoz
International GmbH (headquartered in Germany) is the
Brazil shares the traits that are common to all of the BRIC only foreign company that has succeeded in entering the
nations, but is also characterized by some unique features. Brazilian generic drug market.
The Amazon rainforest (the majority of which is located
within the country) is estimated to hold more than 50% Drugs and vaccines sold in Brazil are produced by four
the world's unexplored species of plants, animals and types of companies: regional Brazilian pharmaceutical
insects. Brazil is ruled by a politically stable regime and has companies, foreign multinational pharmaceutical
the second smallest population among the BRIC nations companies, government-owned vaccine manufacturers
(after Russia), with approximately 192 million inhabitants; and government-owned pharmaceutical laboratories
the majority of the population lives in the southern region (referred to as official labs). In Brazil, the 18 official labs
of the country. Prior to the last quarter of 2008 and the and 2 government-owned vaccine manufacturers produce
impact of the global financial crisis, Brazil received steadily approximately 200 different drugs and dominate the
increasing national and foreign direct investment (FDI) public vaccines market (Figure 1). The official labs and
and, together with Mexico, is the Latin American leader government-owned vaccine manufacturers are the primary
in FDI. The total figure of FDI in the Brazilian market suppliers to the Brazilian public health system and the
increased from US $18.8 billion in 2006 to US $37.4 billion Brazilian Program for National Immunization, respectively.
in 2007. Even after the onset of the global financial crisis, The official labs are an important presence in the Brazilian
the inflow of FDI increased by 20.6% in 2008, with a total pharmaceutical market: 31% (713 million units) of the
investment of US $41.7 billion (www.unctad.org/Templates/ drugs distributed by the public health service from
Webflyer.asp?docID=10510&intItemID=1923&lang=1). January to July 2008 were produced by official labs.
The Brazilian pharmaceutical market is ranked tenth in the Initiatives by the Brazilian government
world and first in Latin America. The steady and robust The Brazilian government has introduced several regulatory
growth of the Brazilian economy and, particularly of the changes that have contributed to improvements in the
generic drug sector, led to a greater than 100% growth country's pharmaceutical industry. In 1997, the government
rate in the value of the country's pharmaceutical market introduced a major reform in the country's patent law
from 2003 to 2007. In 2003, Pfizer Inc, the leading that aligned local legislation with international community
Table 1. The top 10 pharmaceutical companies in Brazil in 2003 and 2007.
2003 2007
Rank Value Value
Company Company
(USD million) (USD million)
1 Pfizer Inc 287 EMS SA* 870
2 Aché Laboratorios Farmaceuticos SA* 271 sanofi-aventis 774
3 sanofi-aventis 250 Aché Laboratorios Farmaceuticos SA* 677
4 Novartis AG 246 Medley SA Industria Farmaceutica* 673
5 Roche Holding AG 178 Novartis AG 530
6 EMS SA* 173 Eurofarma* 425
7 Schering AG 144 Pfizer Inc 418
8 Schering Plough Corp 143 Bayer Schering Pharma AG 387
9 Medley SA Industria Farmaceutica* 143 Boehringer Ingelheim Corp 314
10 Merck Sharp & Dohme 142 Nycomed Pharma AS 288
*Regional Brazilian pharmaceutical companies
Source: IMS Health – Pharmaceutical market Brazil moving annual total (MAT)

3. Drug R&D in Brazil Rodrigues 499
Figure 1. Locations of Brazilian government-owned pharmaceutical laboratories and vaccine manufacturers in Brazil.
FFOE
NUPLAM
LIFESA
RN
LTF
PB LAFEPE
PE
AL
SE
LIFAL
FUNED
ES
Farmanguinhos
IQUEG RJ
LPM
LQFEx
LEPEMC
LFM
Bio-Manguinhos
LAFERGS LAFESC FURP IVB LAQFA
Government-owned pharmaceutical laboratories are shown in blue, and vaccine manufacturers are shown in red.
FFOE Faculty of Pharmacy, Dentistry and Nursing (Federal University of Ceará), FUNED The Ezequiel Dias Foundation, FURP University
Foundation of Río de la Plata, IQUEG Chemical Industry of the State of Goiás, IVB Vital Brazil Institute, LAFEPE Pharmaceutical Laboratory
of the State of Pernambuco, LAFERGS Rio Grande do Sul Pharmaceutical Laboratory, LAFESC Santa Catarina Pharmaceutical Laboratory,
LAQFA Aviation Pharmaceutical and Chemical Laboratory, LEPEMC Laboratory of Education, Research and Extension in Drugs and Cosmetics,
LFM Marine Pharmaceutical Laboratory, LIFAL Alagoas Pharmaceutical Industry Laboratory, LIFESA Pharmaceutical Industry Laboratory
of the State of Paraíba, LPM Drug Production Laboratory, LQFEx Army Pharmaceutical and Chemical Laboratory, LTF Pharmaceutical
Technology Laboratory, NTF Pharmaceutical Technology Center, NUPLAM Food and Drugs Research Center
standards, such as the World Trade Organization (WTO) funding for innovation projects. The law provides
agreement on Trade-Related aspects of IP Rights (TRIPS). incentives to increase collaborative alliances between
Among the BRIC nations, the patent laws in Brazil are now Brazilian public, scientific and technological institutions
the most similar to the TRIPS agreement. Several with pharmaceutical companies. The second law, known
governmental measures, such as the publication of the as the Law of Good, was passed to create jobs in local
Brazilian drugs national policy in 1998, the creation of pharmaceutical companies for Brazilian postgraduates,
the National Agency for Sanitary Surveillance (ANVISA; with the help of governmental grants. Together with
equivalent to the FDA) in 1999 and the passing of a law economic incentives, legislation is promoting the formation
governing generic drugs in 1999, have made Brazil a more of a drug R&D foundation in Brazil.
regulated market player. Since its inception, ANVISA has
played a significant role in the Brazilian pharmaceutical The Brazilian government has recognized the existing
market by releasing several normative regulations, acts imbalance in the number of pharmaceutical imports
and instructions to better control the drugs produced in and exports: in 2008, the country imported more than
the country. As a result, Brazil has increasingly adhered to US $4.28 billion in healthcare products and exported
international standards of quality and is producing drugs of US $961 million, creating a deficit of approximately
higher quality. US $3.3 billion. Improving infrastructures for production
and research activities is necessary to address the
In 2005 and 2006, the Brazilian government passed two imbalance in pharmaceutical imports and exports. In
important pieces of legislation in an effort to accelerate December 2008, the Brazilian government ordered official
innovation and facilitate national and international labs to preferentially purchase active pharmaceutical
agreements. The first was the Innovation law, which ingredients (APIs) from suppliers headquartered in Brazil;
allows private Brazilian companies to receive government most APIs used by Brazilian manufacturers have been

4. 500 IDrugs 2009 Vol 12 No 8
imported from India, China and other low-cost countries. Atlantic Forest, the Cerrado tropical savanna and other
This governmental measure is aimed at strengthening Brazilian ecoregions. The Brazilian government has passed
the Brazilian market and reducing foreign dependence. several regulatory laws to control access to Brazilian
Furthermore, in April 2009, the government proposed biodiversity and regulate bioprospecting. Individuals or
regional public-private partnerships between official labs companies in the country interested in studying Brazilian
and pharmaceutical companies headquartered in Brazil. biodiversity must apply for licenses to collect material
The proposal is expected to facilitate the development and conduct research on the plants or microorganisms
and local production of 24 drugs that are no longer obtained. Moreover, Brazilian law stipulates that
protected by patents and to provide incentives for regional international exploration is only allowed in collaboration with
technological cooperations. a Brazilian partner. While Brazilian academic institutions
have intensively screened the ecoregions of the country,
State funding is considered a key driver in the Brazilian foreign support in expertise and technology will be
marketplace, promoting both the improvement and growth valuable for continued exploration and the development of
of R&D and production activities and serving as the main new drugs from biodiversity research.
contributor to the purchasing sector. Several sources
of financing are available to pharmaceutical companies The improving scientific and technological capability of
headquartered in Brazil, including sponsorship funds from Brazil is another factor that favors drug discovery and
local research fund agencies such as FAPESP (Fundação development in the country. Brazil's scientific progress is
de Amparo à Pesquisa do Estado de São Paulo), FAPERG demonstrated by increasing citations of research papers
(Fundação de Amparo à Pesquisa do Estado do Rio Grande published. In Latin America, Brazil was ranked first in 2008
do Sul) and FAPEMIG (Fundação de Amparo à Pesquisa in terms of number of publications, followed by Mexico,
do Estado de Minas Gerais) as well as financing support Argentina and Chile. According to data available from
from national institutions linked to the Ministry of Science Thomson Reuters ISI Web of Knowledge Journal Citation
and Technology and the Ministry of Development, such Reports, the number of published research papers in
as the Brazilian Development Bank (BNDES) and the Brazil increased from 7923 to 18,933 between 1993 and
Brazilian Research and Project Financing Agency (FINEP). 2005. In 2007, Brazil was ranked 15th worldwide in
The main goals of BNDES and FINEP are to support terms of the number of scientific articles published by a
innovation and the international expansion of Brazilian country; in 2008, the country's ranking was 13th.
companies. FINEP is the primary source of grants for the The improvement in Brazil's scientific and technological
pharmaceutical sector, and provides financing through capability is also demonstrated by an increase in the
both reimbursable and non-reimbursable funds. BNDES number of postgraduate students in the country, totaling
provides financial support to all Brazilian economic sectors approximately 140,000.
through several sources of financing, including low-interest
capital. In the pharmaceutical sector, BNDES offers Despite several factors favoring drug discovery and
support and incentives to promote innovative drug development in Brazil, some barriers and challenges must
development, national and international collaborative be overcome before Brazil can emerge as a major player
alliances, and the establishment or improvement of in global pharmaceutical R&D. For the discovery and
healthcare infrastructures. development of new drugs, companies have mainly entered
into partnerships with Brazilian universities and technology
Early-stage R&D in Brazil: Opportunities and incubators located in science parks. Few international
challenges co-development partnerships have been established, as
Many large pharmaceutical companies are establishing the majority of agreements made with foreign companies
new collaborative alliances and research hubs in China, have been limited to marketing or service provision
India and other developing countries for preclinical relationships. Furthermore, only a small number of
and early-stage drug development activities. Domestic GLP-certified companies offer services for preclinical
pharmaceutical companies in Brazil are no longer only studies and other early stages of drug development. Most
generic drugs manufacturers, but are investing profits in preclinical studies are conducted in university laboratories,
improving production processes, building new facilities local private companies and outside of Brazil.
and increasing R&D activities. Although the number of
marketed drugs developed in Brazil is small, pharmaceutical Additional obstacles preventing progress in Brazilian drug
research is active at Brazilian universities and regional discovery and development include a lack of innovative
companies. Most research is focused on the incremental culture, and the absence of educational programs and
innovation of existing drugs (eg, novel formulations), qualified professionals with experience in all drug R&D
rather than on the identification of novel compounds. phases. Although some companies have attempted to
increase their R&D efforts, in Brazil only one-third of R&D
The vast biodiversity in Brazil, recognized as a potential investments are made by the private sector; this limited
source of new drugs, further supports the country's private investment prevents the expansion and maturity
capacity for innovation and appeal as a partner in of the pharmaceutical sector in the country. In addition,
international collaborations. In addition to the Amazon approximately 75% of Brazilian researchers are employed
rainforest, there are also unexplored species in the by public institutions and are focused on basic research

5. Drug R&D in Brazil Rodrigues 501
rather than developing and licensing new therapeutics benefit from having access to large populations, saving
or technologies. Altogether, such challenges have costs and shortening the timeline for clinical trials.
hindered Brazil's ability to become a competitor in global Moreover, as Brazil has a large population and an
pharmaceutical R&D, and additional efforts to resolve expanding pharmaceutical market, conducting trials in
existing issues are necessary. the country has the additional advantage of building
relationships with future consumers and opinion leaders.
The Brazilian clinical trials market
In recent years, Brazil has become the main Latin American Conclusion
country where trials are conducted, followed by Mexico, Pharmaceutical R&D activities have become global, and
Puerto Rico and Argentina (www.clinicaltrials.gov/ct2/search/ emerging countries are an integral part of expansion plans
map). Brazil has a large population with a heterogeneous for companies attempting to capture a larger portion of the
ethnic and epidemiological profile, a diversity of diseases, worldwide pharmaceutical market. Brazil is an important
treatment-naïve patients, and also has a lower cost base participant in the globalization of drug development, and
than developed countries. There are a significant number conditions for technological innovation in the country
of highly qualified investigators in Brazil, who have been have become favorable. The country is in transition from
demonstrated to develop good investigator-patient imitator to innovator in healthcare-related products.
relationships, thus promoting favorable adherence rates Brazil has qualified investigators and researchers, access
for trials conducted in the country. High recruitment rates to one of the largest biodiversities in the world, low costs
have also given the country an advantage for some types compared with developed countries, a solid base for
of trials for which recruitment can be a challenge (eg, patent protection and a stable economy. Moreover, Brazil
oncology trials). is a regulated market player with an established legal and
regulatory framework for producing and commercializing
Despite the attraction of conducting trials in Brazil, high-quality drugs. These features favor the participation
obtaining regulatory approval for clinical trials conducted in of the country in global drug discovery and development.
the country can require 9 months to 1 year. The Brazilian However, there are also challenges to overcome, mainly
regulatory approval process involves three approval related to the lack of innovation, private investments
phases, two ethics approvals, and an approval of the trial and companies specialized in early drug development
protocol. The ethics approvals are granted by two groups: stages and preclinical research in the country.
a local ethics committee and the National Commission for
Ethics in Research (CONEP). The third approval regarding The Brazilian government and academia, as well as several
the trial protocol is obtained from ANVISA. The protracted regional companies, have made considerable progress
timeline for regulatory approval may be the greatest in recent years toward building an innovative pathway
impediment for the expansion of the drug development in the pharmaceutical sector. To improve its capacity for
sector in Brazil. innovation, Brazil must encourage more financial investment
and involvement from pharmaceutical companies in
A taskforce including representatives from the technological developments. The country also needs to
pharmaceutical industry, ANVISA and professional promote and facilitate new national and international
associations, such as the non-profit Brazilian Society of collaborations. Companies that are already established
Pharmaceutical Medicine, is addressing ways of making in the region would be ideal candidates to drive this
positive changes in the Brazilian regulatory approval movement. Multinational pharmaceutical companies
process. In June 2008, ANVISA amended the approval should also consider Brazil for the establishment of new
process and released a new regulation to facilitate and collaborative alliances and as part of the strategy to
shorten the Brazilian regulatory approval process. expand drug development bases.
According to the new regulations, ANVISA no longer requires
that all of the centers participating in a trial receive the
ethics committee approvals before proceeding with the
Acknowledgements
The author gratefully acknowledges Dr Gustavo Kesselring
application for ANVISA approval, thus allowing parallel
(Brazilian Society of Pharmaceutical Medicine [SBMF]) for
submissions for the ethics and protocol approvals; this
his helpful suggestions and Diana Lucifero and Liza Sovran
may shorten the regulatory approval timeline by at least
(Thomson Reuters) for editorial support.
4 weeks. Furthermore, several proposals for major
changes in clinical trial regulations are being considered to
improve Brazil's infrastructure, including new regulations to Further reading
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protocols for CRO and research site inspections.
2. Goldman Sachs Ideas: Global Economics Paper No 99. (2003):
October 01 www2.goldmansachs.com/ideas/brics/book/99-dreaming.
During the last 10 years, Brazil has become an important pdf
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3. Kuhrt K: The BRIC countries: Opportunities for regulated
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selected based on the country's medical needs, and patients
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can benefit from drugs that would otherwise enter the Brazilian health biotech-fostering crosstalk between public
market years later. International pharmaceutical companies and private sectors. Nat Biotechnol (2008) 26(6):627-644.

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5. Rodrigues DG: Clinical research and drug development in 7. NIH Clinical Trials – Latin America: National Institutes of Health,
Latin America: Weighing the pros and cons, talking about the Bethesda, Maryland, USA (2009). www.clinicaltrials.gov/ct2/search/
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