Analgesics Industry In Brazil

TRENDS

• 2009 was marked by swine flu, which contributed to maintaining strong sales in that year. In 2010, analgesics continued to show robust growth driven by rising disposable income, especially amongst lower-income consumers, who had limited access to medicines in Brazil. According to Euromonitor International estimates, households with monthly disposable income over US$750 increased from 31.1% in 2005 to 46.8% in 2010.

• Analgesics increased by 14% in current value terms in 2010. The category showed faster growth compared to the review period, when a CAGR of 13% was recorded in current value terms. Despite the fact that OTC products were moved to behind the counter in parapharmacies/drugstores, there was no negative impact on sales of analgesics and other categories within consumer health.

• In systemic analgesics, ibuprofen continued to show the fastest growth in value terms, increasing by 16% in 2010. Ibuprofen is the less mature analgesic type and key players such as Wyeth (recently acquired by Pfizer) and Boehringer Ingelheim continued to make strong investments to promote Advil Extra Alívio and Buscofem through advertising campaign and merchandising actions at the point-of-sale.

• Combination products also experienced strong growth in 2010 of 14% in value terms, driven by sales of Dorflex (Sanofi-Aventis) and Neosaldina (Nycomed Pharma), which was promoted through advertising campaigns on television and magazines, and promotions in parapharmacies/drugstores. Additionally, Sanofi-Aventis expanded the portfolio to include Dorflex P, which is positioned to treat tension headaches.

• Topical analgesics/anaesthetic recorded 29% value growth in 2010; a stronger growth rate compared to the review period, which witnessed a CAGR of 15%. Investments in advertising campaigns, promotions at the point-of-sale and new formulas such as Cataflam Artrite, positioned to people who suffer from arthritis, contributed to elevate growth rates significantly in 2010.

• In topical analgesics/anaesthetic, cream/gel format accounts for the bulk of sales, 56% overall, due to lower unit prices compared to other types such as patches and sprays. Patches also experienced growth to achieve a 14% value share driven by sales of Salonpas, which recently announced the improvement of the adhesive on the patches.

• Analgesics is one of the categories that was released to price control by CMED (Chamber of Medicine Regulation) since competition is particularly tight in this category. The average increase in unit price in medicines allowed by CMED was about 4.8% and analgesics increased by between 3% to 4%. In the case of combination products, it was witnessed that unit prices declined by nearly 3% in current retail selling price due to promotions promoted by manufacturers and fierce competition in this category.

• The presence of herbal analgesics is low in Brazil. Acheflan, topical analgesics/anaesthetic, is the key herbal product and it was a sales success when it was released in 2005. In 2010, Acheflan reached sales of more than R$5 million.

• Child-specific analgesics increased by 10% in value terms; a slower pace than overall analgesics. There are few products targeted specifically to children. It is common for manufacturers develop analgesics, especially in liquid format, that are targeted to both adults and children.

• Over the last two years of the review period, manufacturers invested in analgesics to target specific purposes such as Buscofem (Boehringer Ingelheim), which was released to alleviate period pain in 2008. Sanofi-Aventis also adopted a similar strategy and it released Dorflex P to treat tension headaches in early 2010. Novartis Biociências recently released Cataflam Artrite, aiming at consumers who suffer from arthritis. This strategy was adopted in a bid to distinguish itself from other products, including generics.

• Although under-the-counter sales are very common practice in Brazil, ANVISA (Health Surveillance Agency) has been investing in reducing this practice. It has approved measures to retain the prescription of some medicines in parapharmacies/drugstores so that ANVISA can control sales of strong remedies to consumers. Narcotic analgesics are controlled by the Health Surveillance Agency using this practice.

SWITCHES

• There were no switches in analgesics in 2009 and 2010.

COMPETITIVE LANDSCAPE

• Sanofi-Aventis Farmacêutica remains the leading manufacturer within analgesics, holding a 23% value share in 2010, as a result of the strength of three brands in combination products, aspirin and dipyrone – Dorflex, AAS and Novalgina. Despite Dorflex continuing to increase its market share, AAS and Novalgina experienced declining share due to the competition within generics. Therefore, Sanofi-Aventis saw its share fall in 2010.

• Janssen-Cilag Farmaceutica Ltda, owned by Johnson & Johnson, also witnessed a significant reduction in market share due to the weak performance of Tylenol in 2010. Tylenol has also been struggling to maintain market share as a result of stiff competition from generics. To increase sales, it invested in an advertising campaign to promote Tylenol and other brand extensions.

• Hypermarcas SA and Nycomed Pharma experienced share growth, reaching 11% and 10% value shares in 2010. Both companies invested in advertising campaigns to promote their products; Engov and Doril for Hypermarcas, and Nycomed for Neosaldina.

• Bayer SA, which has experienced a declining share since 2005, intends to make strong investment in promoting Aspirina, which that is a traditional analgesic on the Brazilian market. The company aims to advertise the greater benefits of Aspirina rather than focus on the product’s ability to treat headaches and muscle pain.

• Investment in new products or brand extensions with different positioning like Boheringer Ingelheim which released Buscofem (ibuprofen) positioned to target period pain and Sanofi-Aventis which introduced Dorflex P to alleviate tension headaches, has created points of differentiation from other brands, in particular generics, which have slowly been gaining presence in analgesics.

PROSPECTS

• Branded analgesics will continue to face stiff competition from generics over the forecast period. As a result, it is expected that manufacturers will continue to invest in advertising campaigns and merchandising actions at the point-of-sale to promote their brands. There are some companies like Sanofi-Aventis which recently acquired Medley SA Indústria Farmacêutica, specialist in generics, and Hypermarcas which acquired Neo Química in early-2010, with a wide portfolio in generics, in a bid to maintain good performance in analgesics in the long term period.

• Euromonitor International estimates that analgesics will increase by 35% in constant value terms from 2010 to 2015. It is expected that analgesics will continue to show good sales performance over the forecast period due to growing disposable income, especially amongst socio-economic strata C and D.

• Topical analgesics/anaesthetic and ibuprofen will show the highest growth in constant value terms between 2010 and 2015, growing at CAGRs of 9% and 8%. In ibuprofen, it is expected that new players will enter this category as it is less mature and there is room for growth. Topical analgesics/anaesthetic will continue to receive strong investment in advertising campaigns and promotional activity at the point-of-sale.

• With OTC products available behind the counter in parapharmacies/drugstores, it opened the opportunity for manufacturers to diversify investment to promote their products in a bid to attract the attention of consumers. Companies might invest in display stands near the counter and enter into partnerships with parapharmacies/drugstores, in addition to advertising campaigns.

• With the advance of generics, high price increases are not expected in analgesics, in particular in combination analgesics, ibuprofen and dipyrone, which showed the fastest growth over the review period.

Source:    Euromonitor International