Confused Picture on Brazilian Pharmaceuticals Output

Recent data on Brazilian pharmaceuticals production presents a somewhat confused picture. According to the IBGE national statistics office, domestic drug output in November 2004 was 8.3% lower year-on-year, compared with an 8.1% rise in overall industrial output for the period. In recent months, there have been reports of a strong recovery in the country's drug sector, and government spending continues to increase apace, with its free treatment programme expected to grow 15% this year to BRL4bn (US$1.50bn).

Meanwhile, local drug industry groups have responded with their own statistics. The Febrafarma umbrella association claims that at year-end drug unit sales rose 11% on the previous year, with revenue increasing by 23% in US dollar terms, partly favoured by an appreciating currency. The IBGE, for its part, maintains that over whole the year drug sales were only 0.9% higher year-on-year.

Febrafarma has cited changes to IBGE's methodology in 2002, which changed categories only to include active pharmaceuticals ingredients produced in the country, in accordance with international standards. Nevertheless, slow imports growth of only 3% in the year fails to account for the discrepancy between strong sales revenue and slow growth in physical production. Observers discount the possibility that generic imports could account for the differences.