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EF: How do you foresee FARMA's contribution towards achieving sustainable and strategic growth in 2023, and what is your viewpoint on this objective?
RA: There are two dimensions to consider regarding the local pharma industry in Brazil. The first is the internal dimension, which involves the changes with the new government in power. The government has a special interest in promoting industry growth since Brazil has lost its traditional share of the Gross Domestic Product. Efforts are underway to promote Brazil's neo-industrialization, with a particular emphasis on boosting the Economic and Industrial Complex of the Healthcare Sector (GECEIS). This involves the announcement and preparation of measures, programs, and legislative acts.
To boost local production of healthcare products, the Ministry of Health has relaunched the Executive Group for the Economic and Industrial Complex of the Healthcare Sector (GECEIS), with a target of achieving a minimum of 70% local production within the next four years. Although it is an ambitious goal, Brazil already produces over 60% of pharmaceutical products, making it feasible to achieve this target in this product area. However, the production of active pharmaceutical ingredients (APIs) and other sectors is currently lagging, with local production at only 5-6%. To achieve the target, the government must significantly enhance its efforts and adopt data-driven strategies to scale up its initiatives.
The Brazilian Government is keenly interested in exploring regional and continental models for the development of pharmaceutical products. This is a crucial consideration for our associates who are either already established or beginning to focus on the highly competitive US market. In addition to our domestic market, there is a growing interest in the Latin American and North American markets, and our companies are poised to make significant strides in these regions. This presents a unique opportunity for the Brazilian pharmaceutical industry to assert itself on the global stage. The Brazilian Government is actively pursuing the development of new products and technologies in Latin America. We are closely monitoring discussions on the new policies proposed by the American government regarding nearshoring, which could have a significant impact on the industry's growth and development in the region.
Naturally, this also applies to Europe since we have been endeavouring for the past 22 years to eventually ratify our free trade agreement for commerce with the European Union. Additionally, we have a global presence through external market partnerships, with China being our largest commercial partner and the United States being the second largest. The government is actively pursuing new opportunities for collaboration.
EF: What is the advantage of the national industry over a big corporation when it comes to meeting special healthcare needs in Brazil?
RA: Over the past decade, we have invested more than $2.17 billion dollars in expanding our companies, and building new industrial plants, and production lines. Compared to foreign companies established in Brazil, Brazilian companies already invest more in research and development locally. This gives us an advantage in decision-making about production in Brazil, making us competitive in supplying both the public and private sectors of the domestic market with a substantial amount of locally manufactured medicines.
Our productions are based on synthetics, and the volume and the supply of the market are established with the participation of local progress, which grows each year. However, with around 50-60% of the Brazilian population representing various levels of low income, there are significant income and living condition disparities that need to be addressed. The primary focus needs to be on supplying the population through the free public health system, which is guaranteed by the Constitution. The increasing age of the Brazilian population also brings an increase in diseases, some of which are shared with populations in wealthier countries. This poses a significant challenge for the public health system, private health system, and pharmaceutical industry. To address this challenge, we are heavily investing in research and development, with a focus on both incremental and radical innovations. Our aim is to produce new molecular entities in Brazil in the coming years.
This is crucial for following the path of "latecomer" countries throughout history, such as Germany in the late 19th century, Korea in the 20th century, and China currently. Brazil has the potential to achieve this since it has a well-established and economically strong industrial sector for pharmaceuticals. However, the significant income inequalities need to be addressed to generate growth and provide better opportunities for the Brazilian population.
The government is fully committed to improving the current situation. As we explore potential solutions, it is important to also consider the possibilities offered by Industry 4.0 and other innovative industries.
EF: What innovations can we anticipate in the national pharma market in the upcoming months or years?
RA: As far as we can use the public information that companies allow, we have important projects in the pipeline that are focused on producing real medicine. One group of projects uses Brazilian biodiversity as a source, while others use synthetic and biological pathways. For instance, some companies have already developed capabilities and bio-models for producing biosimilars, and are collaborating with Brazilian Universities and Research Centers, in efforts to develop RNA-based products to treat COVID and vaccines based on the same technology. Our companies have developed products based on Brazilian biodiversity, maintaining ESG principles and ensuring that their use preserves Brazilian biodiversity and the access to knowledge by indigenous populations, always shared when there is an economic return. There are already products derived from Cannabis sativa in Brazilian companies.
EF: What are the main challenges to innovation in Brazil today?
RA: As a country, we face several challenges that we need to address urgently. Firstly, we lack a sufficient skilled workforce to analyze the products in our pipeline and to train more employees to keep up with the rapid evolution of science and technology in our products. Secondly, our patent office, INPI, is also facing workforce shortages due to budgetary constraints, which are crucial for our industry's ability to innovate and bring new products to market. Additionally, we are currently dealing with the potential impact of the tax reform in Brazil. While the reform appears to be progressing well, there is a concern that it may lead to a 20-30% increase in the final prices of pharmaceutical products, which is a significant issue that we must address in the next four to five months. Therefore, we must take action to find solutions.
EF: What is a solution to attract more people to the healthcare sector in general?
RA: Here in Brazil, many are eager to work in the industry. The challenge is that we don't have enough trained professionals who are both academically and practically prepared to work in the industry. While the salaries are attractive and the environment stimulating, for public institutions like ANVISA the government must open new opportunities for public contests and rebalance the number of positions in the industry due to retirements and other factors.
Additionally, there is constant competition among pharmaceutical companies to attract and retain talent. However, the lack of adequately trained professionals limits the industry's ability to fulfil its requirements to a significant degree.
EF: What recommendations would you offer to policymakers and newly elected officials in order to translate the goal of achieving 70% national production into an actionable plan?
RA: The government has publicly recognized the health sector as a key driver for Brazil's new industrialization. The pandemic highlighted the vital importance of the public health system, which was sometimes unclear to the public. Now, the focus is on the vaccine program, which had declined in the previous government but is now afloat again. Effective coordination within the federal government is essential for us to fully realize the potential of the health system and establish ourselves as world-class producer of innovative medicines. Coordination should also be done in conjunction with the private sector so that state policies are created for the development of an innovative policy for the Brazilian pharmaceutical industry.
This can be challenging due to the competition between ministries and secretaries, but successful examples in HIV control, vaccine production, and generics demonstrate that coordination is possible. Effective coordination between the public and private sectors is crucial, as demonstrated by previous successful examples. The Brazilian National Confederation of Industry (CNI) has proposed a neo-industrialization strategy based on the concept of missions, which requires a coordinated effort to succeed. The government's commitment is essential in achieving this goal, and we remain hopeful for more success stories in the years to come.
