Brazil: Where the beaches are golden, and the people lack medicine

216 million people. The largest country in South America and the sixth most populous in the world.

At 2.2%, the Brazilian pharmaceutical industry holds the most significant proportion of the global market share compared to any other Latin American country. This is up from 1.8% or US$ 21 billion in 2020 but lower than the 2019 market value of US$ 24.25 billion. With a production value of over 46 billion Brazilian reals that year, pharmaceutical production in the country was dominated by drug manufacturing (96%). As for the medtech market here, in the years to come, it is forecasted to grow at a CAGR of 8.01%, touching US$ 15.14 billion by 2027.

Brazil spends a significant proportion of its GDP on healthcare; in 2019, it was comparable to the UK's 10.15%. Per capita health spending, at US$ 639 in 2019, is projected to be US$ 1099 in 2050. As a percentage of GDP, health spending is set to go up from 9.3% to 14.8% in the same period. When categorised by source, government expenditure accounts for almost US$ 435 of this 2050 projection, with out-of-pocket expenses at US$ 176 and other private spending at about US$ 486. Development assistance stands at a mere US$ 1.01.

In May this year, Brazil's Fiocruz entered into an agreement with Merck to produce Brazil's first oral antiviral Covid-19 drug. Fiocruz will supply the drug to Brazil's SUS, the country's unified health system. The Brazilian institute will also study the potential use of the drug against dengue and chikungunya, viruses that are endemic in Brazil. This agreement comes a year after BioNTech took manufacturing of the Pfizer-BioNTech Covid vaccine to the country with Eurofarma in Sao Paulo.

These investments, however, are uncommon. Very few foreign companies have been able to establish their presence in Brazilian territory. Three companies from the US and one each from France, Italy, Denmark and Japan form the main international presence in the country. Bringing finished pharmaceutical products into Brazil has been a challenge for reasons including the unavailability of reliable data (considering the high percentage of non-retail, governmental spending), complex regulation, and legislative differences.

In Brazil, local production meets local demand. 66% of pharma production sites are domestically-owned. Companies like Aché Laboratorios Farmacéuticos lead the industry, with a revenue of about 3.5 billion Brazilian reals in 2020.

Brazil's clinical trial landscape is also flourishing. Brazil leads Latin America with close to 8000 studies recorded as of February 2021 and 9000 as of July 2022. In 2019, 2.1% of the world's clinical trials on autoimmune and inflammatory diseases were conducted in Brazil.

With high recruitment potential from an ethnically-diverse population, a high level of urbanisation, and good hospital infrastructure, Brazil is a location worth considering for early feasibility studies (EFS) of medtech products. Especially considering the time and monetary investment of an EFS in the US and the complexities of the new European Medical Device Directive, clinical trials are increasingly moving to Latin America.

On the regulatory front, in September 2022, the health regulatory agency ANVISA announced updates to Brazil's medical device registration regulations, effective 1 March 2023. The regulation defines new rules for risk classification of medical devices, specific classification rules for new tech like software as a medical device (SaMD) and nanomaterials, labelling requirements, and notification or registration procedures for medical devices. In-vitro diagnostic devices, used or refurbished medical devices, and personalised medical devices remain unaffected by these regulatory updates.

When it comes to Brazil's disease burden, several health concerns to be addressed. According to the Global Burden of Disease 2019 study, the list of most common causes of death in Brazil was led by ischemic heart disease, stroke, lower respiratory infection, and chronic obstructive pulmonary disease, with diabetes, Alzheimer's, chronic kidney disease and cirrhosis also on the list. Further, Brazil has a high burden of dengue and chikungunya cases – 10.1 million and 1.2 million cases, respectively, from 2014 to 2021; even in 2022, cases continue to surface.

As for tuberculosis, incidence increased from 2016 to 2019, with reported cases in 2019 being 12% higher than forecasted by historical trends – TB incidence and mortality stood at 46 and 3.3 per 100,000 population. Contributing factors include deteriorating living standards due to a recession, delayed access to healthcare and reduced government spending on health due to the economic contraction. Potentially, the rise in TB reporting is not due to a real increase in numbers but rather the introduction of a new, more sensitive diagnostic tool, Xpert MTB-RIF15.

For malaria, Brazil reported 1.8 million cases and 450 deaths in the decade starting in 2011. Incidence varied across the country, with the extra-Amazon region having a lower total number of deaths than the legal Amazon region but a fatality rate 123 times higher in 2019. Compared to 2017, 2021 saw a decline of 28% in malaria cases, but the 2021 number still stood at 140,385 cases.

In the future, a pressing concern will likely be changing demographic trends. Life expectancy has increased dramatically in the South American country, going up from 45.5 in 1940 to 75.5 in 2015. By 2040, Brazil's older population is predicted to grow to 20%. By 2050, the country will have over 66 million people over the age of 60 – a number that currently stands at about 24 million. This predicts demand for more age-associated health solutions relating to oncology, hypertension, Alzheimer's etc.

Health, as per the Brazilian Constitution, is a universal right and a state responsibility. In 1990, a unified health system, or SUS (Sistema Único de Saúde), was created to cater to the health needs of the country's citizens. While the SUS provides significant coverage, geographical inequalities and funding concerns need to be reassessed, as does public-private partnership. With Brazil's future seeing more aged citizens than those in the working age group, the pressures on government services to provide for the increasingly dependent population are high.

The results of the recent elections hold hope for public healthcare budgets. Bolsonaro's policies included healthcare budget cuts, resource reduction for ANVISA, and consequent backlogs in drug evaluations. The new President-elect, Lula da Silva promises more support for and investment in ANVISA, the SUS, health infrastructure and the domestic pharma industry – interventions that are necessary as Brazil looks at new challenges in its healthcare landscape.

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