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Viagra’s Patent Expires in Brazil. Market Is Flooded With Cheap Generic Pills

Viagra The day after Pfizer Inc’s patent for Viagra expired in Brazil, Carlos Sanchez flooded pharmacies with his generic erectile dysfunction pills. It was a day his army of lawyers, researchers and marketers had been preparing for more than three years, even winning a bid to move up the patent’s expiration date.

At a cost of 10 Reais (about US$ 4), Sanchez’s pills were five reais cheaper than Pfizer’s, which had cut its prices in half just weeks before the patent ended.

Sanchez’s copy of the little blue pill gave him an early foothold into the market for erectile dysfunction medicine in Brazil, where sales have quintupled in the last four years.

Consumers from an emerging middle class that pay for two-thirds of drug costs out of pocket tend to choose generics at the drug counter.

IMS Health (IMS) forecasts the industry will grow by 10% annually through 2019, as government subsidies for drug purchases and financing for innovation from Brazil’s state development bank offset economic growth that slowed to 2.2% in 2013, according to Geraldo Biasoto, economist at Universidade Estadual de Campinas.

While Brazil’s pharmaceutical industry isn’t known as a hotbed of innovation  –  Sanchez invests about half as much as Pfizer in research and development as a percentage of revenues – it hasn’t stopped drug copycats such as Sanchez from becoming billionaires.

Since taking over his family’s drug-store business at age 26, Sanchez has turned EMS Participacoes SA into a pharmaceutical company with revenue of two billion reais in 2013.

His net worth is valued at 2.9 billion, according to the Bloomberg Billionaires Index, including an art collection funded by years of dividends.

Maurizio Billi, the majority shareholder of the third-largest Brazilian drug producer, Eurofarma Laboratorios Ltda, has amassed a fortune worth more than 1.2 billion, while Ache Laboratorios Farmaceuticos SA, a Sao Paulo-based company that had sales of 1.9 billion Reais in 2013, has made billionaire fortunes for its three major shareholders, the Depieri, Baptista and Siaulys families.

Eurofarma and EMS are surpassed in scale by Laboratorio Neo Quimica, the pharmaceutical unit of consumer goods company Hypermarcas SA, which had revenue of 2.3 billion reais last year.

The two companies are the second- and third-biggest producers of sildenafil citrate pills in Brazil, trailed by Pfizer in sixth place, according to IMS Health.

EMS exports to more than 40 countries in Latin America, Europe, Africa and Asia.

Mercopress

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