Impacts of the new coronavirus in the pharmaceutical industry

"I Want to Invest" Portal | 04/17/2020
Fonte: "I Want to Invest" Portal
Itaú BBA hosted a live stream on Friday (17th) with the CEOs of Biolab and Blau to discuss the impacts of the new coronavirus in the sector, as well as the future of the pharmaceutical industry in Brazil.
The interruption in China's supply chain affected several different sectors. That is because most inputs come precisely from China, which is a major raw material manufacturer.

Supplies
According to Biolab's CEO, Cleiton de Castro Marques, the pharmaceutical sector works with very long production cycles. The process has cycles stretching as far as 180 days, from the entry of products in import processes, analyses, quarantines, among others. This avoided a major initial impact on medication manufacturing activities in Brazil due to the lockdown in China.

"We were really concerned when the U.S. suspended all flights to China." Because the industry needs the airplane's "trunk". Without it, we have no cargo. "The sector relies heavily on India and China," Marques added.
In addition, India also uses Chinese supplies to make its products. So, this halt in the production chain affected India and ultimately took a toll on pharmaceutical companies in the country.

Marques underlines that, due to the cycles and stocks in channels, the population will hardly feel the impact, after reassuring that the situation is almost fully back to normal. "India is already shipping goods." Now, the sector is only dealing with isolated issues, which will sort themselves out in the medium term.
According to Marcelo Hahn, CEO of Blau, since China is a major producer of basic and intermediary materials, the impact in China affected the entire world, including India.

At first, Blau struggled with Indian manufacturers because they weren't getting these intermediary goods from China. For Hahn, the shutdown in India is more concerning than in China.

Marcelo Hahn agrees with Marques in the sense that long production cycles helped mitigate the impact on the sector.
Sales

According to Blau's CEO, the company saw a sharp increase in demand for certain medications, especially those used to treat the new coronavirus. Hospital supplies have also performed very well.

In turn, other products related to retail and the dermatology line recorded major drops in sales.

For Hahn, the biggest uncertainty lies in the financial results of hospitals, due to the decrease in surgery revenues. On the other hand, ICU revenues have been growing.

Therefore, the pharmaceutical industry should keep a close eye on the financial health of hospitals. The executive underlined that the company is not raising credits for clients.

Future
Marques believes industrial policies should be revised. "The whole world realized that these things are essential needs, and we can't continue to rely on India and China."

There should be a whole new appreciation for the pharmaceutical industry, with incentive programs for the chemical area.
The CEO of Blau added the need to review Brazil's regulatory red tape and pointed out the need for more investments in healthcare, which still treads far behind that of developed countries.

After the coronavirus crisis, Hahn expects the country to provide better conditions for entrepreneurs to invest in the pharmaceutical industry: "Everything here works on a very long-term basis," he said.

The pharmaceutical industry is heading towards change, but the path is still unclear. But there are major changes in the horizon, said Marques.
Learn more
arrow_backward See more articles
Customer Service 0800 724 6522
faleconosco@biolabfarma.com.br
Be connected