As Latin America’s largest pharma market, worth USD 62 billion in 2024, Brazil is retooling its industry to meet new demands. Driven by changing demographics, chronic disease burdens, and the growing expectations of a more affluent middle class, the Brazilian government is prioritising local production in key therapeutic niches while domestic companies are scaling capabilities through public-private partnerships. At the same time, both local and multinational players are pursuing M&A to capture growth.

 

Universal Coverage, Access Challenges

Brazil’s Sistema Único de Saúde (SUS) is one of the world’s largest universal healthcare systems, serving over 200 million people. The model has laid the groundwork for strong local pharma activity: in 2023 Brazilian companies were responsible for 51 percent of the market’s total turnover with generics accounting for 43 percent of all units sold.

But despite its universal access, inequality still defines the Brazilian market. “There is still enormous growth potential within the domestic market, particularly when it comes to addressing social inequality,” says Reginaldo Braga Arcuri, executive president of Grupo FarmaBrasil, a coalition of Brazil’s top domestic pharma firms.

Multinational companies are also eyeing the opportunity. Eli Lilly’s SVP and President of LatAm, Karla Alcazar, highlights: “Latin America, particularly Brazil and Mexico, plays a critical role in Lilly’s global strategy. The region’s significance stems from the immense unmet healthcare needs, particularly in areas like diabetes and obesity, where prevalence rates are some of the highest in the world.”

 

Meeting Emerging Needs

Beyond untapped potential, as with many other nations, Brazil is undergoing a huge demographic shift with an aging population and a higher prevalence of chronic and non-communicable diseases (NCDs). Locally sourced generics have trouble meeting the demand for conditions like cancer, cardiovascular disease, hypertension, and diabetes and these therapies are primarily still imported from abroad.

To tackle this problem, the Ministry of Health is looking to target specific strategic niches with a programme aimed at leveraging the purchasing power of the public system (SUS) and driving local production.

“Attempting to re-establish broad-spectrum local production is neither economically viable nor strategically necessary,” Arcuri warns. However, he points out: “a new discussion [with the government] is emerging, focused on high-potency synthetic oncology drugs… These medicines… may represent a viable niche for local production.”

The growing Brazilian middle class has also contributed to shifting healthcare demands. With larger incomes, this segment has a higher willingness to spend out-of-pocket for innovative treatments, leaving a gap that domestic companies are yet unable to fill.

“In terms of market composition, national companies lead in the volume of public purchases, particularly in basic components and generic medicines. By contrast, multinational companies dominate in terms of value,” says Arcuri.

 

Public-Private Partnerships and Tech Transfer

To bridge gaps and expand local capacity for high-cost therapies, Brazil has turned to its hallmark model: public-private tech transfer partnerships, formalised under frameworks like the “Greater Brazil Plan” and the Industrial Health Complex Programme.

“The Ministry of Health identifies high-cost therapies, then selects a public laboratory and partners it with a private Brazilian company to form a development alliance,” Arcuri explains.

“ANVISA actively participates in the committee managing these PDPs,” adds Romison Rodrigues Mota, director at the national regulatory agency. “This enables us to monitor technology development from inception… facilitating registration or post-approval variations for domestic production.”

The model is particularly effective because the Ministry guarantees a pre-agreed purchase volume, significantly reducing investment risk for companies while the public system gains access to cutting-edge therapies. “This framework has already enabled the local development of biosimilars, and we are now entering a longer-term effort to develop New Molecular Entities (NMEs),” Arcuri adds.

Brazil’s strategic alignment between health, industrial, and innovation policies through programmes like the Industrial, Technological and Foreign Trade Policy (PITCE) is providing critical infrastructure, funding, and incentives for building biopharmaceutical capabilities. Tax incentives, preferential credits, subsidies and technology transfer are also helping to advance this shift.

“Today, that transition is well underway. Companies like Bionovis and Libbs, for example, are already producing monoclonal antibodies, marking a clear evolution in the technological capacity of Brazil’s national industry,” Arcuri says.

Supporting Brazil’s R&D capabilities is a network of top public research institutions like Fundação Oswaldo Cruz (Fiocruz) and the Brazilian Biosciences National Laboratory (LNBio), actively involved in development, manufacturing, and public health policy.

 

M&A

Another trend shaping Brazil’s pharma market is its constant dealmaking activity. Not only are global players snapping up local entities – Pfizer bought up a 40 percent stake in the local generics producer Laboratorio Teuto Brasileiro, for example – but home-grown companies are also consolidating their positions, and in some cases, expanding globally.

Arcuri cites several examples: “Eurofarma operates seven manufacturing facilities across Latin America. EMS, Brazil’s largest pharmaceutical company, owns a biotech firm in the United States and has acquired Serbia’s former state-owned laboratory, Galenika, which now manufactures peptides for its liraglutide injector. Meanwhile BIOLAB established an R&D centre in Ontario, Canada.”