Boston, MA -- (SBWIRE) -- 11/12/2012 -- BMI View: The Brazilian pharmaceutical market is still our favourite regional market in Latin America despite the recent downgrade in our Risk/Reward Ratings. The government has increasingly invested in the healthcare sector and pharmaceutical industry to stimulate local production capacity, reduce the financial burden of diseases and lessen the country's trade deficit. Multinationals can capitalise on the strong growth of the market by introducing innovative, high-tech products and collaborating with local companies.

Headline Expenditure Projections

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- Pharmaceuticals: BRL42.9bn (US$25.6bn) in 2011 to BRL47.7bn (US$23.9bn) in 2012; +11.1% in local currency terms and -6.9% in US dollars terms. Forecast up from Q312 due to more optimistic industry projections.

- Healthcare: BRL345bn (US$206bn) in 2011 to BRL378bn (US$189bn) in 2012; +9.6% in local currency terms and -8.0% in US dollars. Forecast down from Q312 due to lower macroeconomic projections.

- Medical Devices: BRL7.8bn (US$4.7bn) in 2011 to BRL8.9bn (US$4.5bn) in 2012; +14% in local currency terms and -4.5%% in US dollars terms. Forecast revised upwards from Q312 due to analyst intervention.

Risk/Reward Rating: Brazil's position in the Americas Pharmaceutical Risk/Reward Rating (RRR) system - which ranks markets according to attractiveness to multinational drugmakers - has moved from the 4th place in Q312 down to the 5th in Q412, due to a significant downward forecast change to Brazil's real GDP growth as the country's economic imbalances have begun to unwind sooner than consensus suggested. Brazil is no longer as prominent as it once was in the Latin American region, particularly now the outlook for Mexico is more optimistic. BMI's RRR ranking change between Brazil and Mexico in Q412 highlights an opportunity for multinational drug companies to re-evaluate their long-term regional strategy in Latin America if further significant changes occur.

Key Trends And Developments

- From September 2012, a total of 25 states and federal districts in Brazil will offer a zero-tax rate on the circulation of goods and services tax (ICMS) for free hypertension, diabetes and asthma medications supplied by the Farmacia Popular (Popular Pharmacy) programme.

- In July 2012, Takeda successfully completed the acquisition of Brazilian pharmaceuticals firm Multilab. The purchase makes the Japanese multinational company a top-10 drugmaker in the world's sixth-largest economy. Multilab's operations will be incorporated into Takeda's Brazilian unit.

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