Read the Conversation
EF: With a focus on APIs, what were the biggest lessons learned from navigating a unique moment in health's modern history?
SF: We learned that we are more dependent on price than strategy. Without a state policy that provides legal stability and support for those in our business, it isn't easy to produce APIs in Brazil. There are around ten or twenty companies manufacturing diverse APIs, which represents 5% of the consumption in Brazil, and around 95% of that depends on raw materials from China and India, but the Brazilian government is looking for strategic options. We recently met with representatives of the US Congress looking at a collaboration between the US, Canada, Mexico, and possibly Brazil to manufacture some products and specific guidelines to provide raw materials and establish all the production on our territory. During World War II, Wyeth was created for a strategic reason, to have large-scale penicillin production because they needed drugs for the wounded. We are API dependent, and although we have a lot of medication, we don't have the newest technologies (biotechnology, immunotherapy, etc.). The Chinese and Indians are starting to go in that direction, and the US and Europe have a good production to offer against non-communicable diseases, which is from where we get our products. We have learned the lessons, but we aren't reacting fast enough to the needs. The Brazilian Congress is working on a project that will provide advantages to API drug manufacturers in Brazil, with federal tenders and expediting registration when using Brazilian APIs. According to what is discussed in Congress, there would be a 20% advantage for those who get the tender, which is good news because there is strong competition with other generic companies. The situation in drugs is different because it is a much-regulated sector with very strict rules. We joined the ICH in Brazil, which is very cautious about approving an outside dossier on generic products and works as a barrier to bringing products to Brazil. There is a lot of oncological medication coming from India at the present. The API registration, the CADIFA, is revised every five years, and we must list our API suppliers, and they make a very long list.
EF: Do you think the pandemic has impacted policymakers? Is this the moment to shape policies noting the importance of local industry development in pharma or healthcare?
SF: We have two issues here: policy and the cost of products. A French colleague told me they tried to manufacture Paracetamol in France, but it costs four or five times more, and the customer is not prepared to pay the difference just because it is made in France. The Brazilian government is looking for collaboration options, the US has a population of 330 million, Mexico over 100 million, and Brazil 200 million, and collaboration would increase the manufacturing volumes. We have to be wise and choose what we will be able to manufacture in volume and not try and do everything because it won't work considering the competition's reduced pricing. It takes 36 months to develop a product, months of work and investment, and much longer for molecules. Brazil still doesn't have a pricing rule for new molecules, something we have been fighting for quite some time. For example, the Brazilian authority has approved 10 milligrams for prostate cancer treatment and 5 milligrams for a different kind of cancer. We have a drug for prostate cancer using half the usual consumption of 10 milligrams, which means half the dosage in chemotherapy and is better for the patient. But the authorities halved the price when we went to pricing because the treatment was half the dosage. The pricing should be lower than the 10 mg price but higher than the 5 mg, but they didn't approve it.
EF: Could you elaborate on your current portfolio and if you work with both private and public sectors? Has the pandemic affected the performance and evolution of a chronic portfolio in an infectious disease scenario?
SF: Blanver was founded by my father 38 years ago, manufacturing raw materials for excipients mainly for Brazil, and then we began to export. In 2017 we sold the business to a French company and focused on the pharmaceutical business. We started with only two products for HIV, a small pipeline that we had started working on two years prior, and it took time to get the products registered and approved. In 2018 we included a generic hepatitis product that gave big savings to the government, about 1 billion in the first year, increasing from 13 thousand to 50 thousand patients in treatment.
We were the first PDP (Partnerships for Productive Development) in Brazil. At first, we focused on working only with the government. However, when we did the strategic planning in 2015, we decided to look at various areas, including CNS (Central Nervous System) and Oncology, deciding that Oncology would be the other best strategic pillar in our portfolio. The government continues to be an important stakeholder, but we have opened other avenues, we increased our HIV portfolio, started with Oncology this year after searching for molecules for six years, and we have various products that are being registered. We have changed our strategy bringing in innovative products and generics to build our line. Originally, we brought only generics, but that made us one more company with second-level pricing, fighting for a place in the market, and having an extra pillar made us sustainable. Today, our portfolio covers HIV, we started treating 100 thousand patients, and now we are treating 480 thousand patients, quintupling the original number. We have fixed dosage drug combinations and new fixed dosage combinations coming soon. We are in the process of registering five to ten products in the same line. We went through a transformation, divesting part of the business focusing on HIV, working with the government, and transitioning into a different product portfolio for CNS and Oncology, innovators, and generics. This year we signed a new partnership with Vifor Pharma to do the distribution and sales of their products starting in July with solids, and injectables before the end of the year. We also have agreements of contract manufacturing, which in the past we did on a large scale; now, however, we are working with international companies with partnerships as a marketing authorization holder.
EF: How do you choose your partners?
SF: We have had excellent experiences establishing partnerships, which we have done since 1988 when we first started to export, covering up to a hundred countries. Our organization is small and effective in commerce and marketing because our goal is to support the distributors who are our eyes and ears in the market. It is impossible to be everywhere at once, so it is necessary to rely on others. We have focused our expertise in Brazil but have agreements in many other countries. We allied with Varifarma in Argentina and Stendhal in Mexico, Blanver takes care of Brazil, Varifarma of the rest of South America, and Stendhal of Mexico and Central America. We agreed to supply seventeen Latin American countries, and most importantly, we all have excellent people in each of these nations. Collaborations give access to products, and it is to all our advantage not to work alone. The important aspect of partnerships is choosing people who know how to sell the product in their country. Over the last thirty years, the hardest for us has been establishing a distribution network and finding the right distributor in each country.
EF: Do most of your business come from Brazil or internationally?
SF: In Brazil, till 2019, we worked 100% with the government, and then we started to intervene in the private market in a small way. I believe this year we will be in around 65% for the public sector and 35% for the private sector. We are now entering a new international phase and we are excited about this upcoming chapter.
EF: You have undergone a major macroeconomic transformation of the healthcare sector while also navigating transformation in the portfolio. How has this journey been?
SF: In every journey, a bit of luck is essential; if we work hard and long, maybe our chances of being lucky will increase. They say there is a very thin line between stupidity and courage, and I think this applies to us to some degree. Bigger sales teams don't necessarily have more effective results, and today there are many new tools to reach doctors and the product's users. We decided we didn't need a huge amount of products or a big team to build the company. It is no longer necessary to have one thousand sales reps, which is a big investment and a high cost for any organization. We cannot, of course, compete against big companies, but that is not our intention; we target areas that aren't that important for them, and there is room for everybody.
EF: Blanver will be celebrating its 40th anniversary; what would you like to celebrate with your team?
SF: I would like to see more of our products on the market, not under other labels, and for our people in Brazil to be recognized for their hard work. I am proud of my team and the company we have built.
