Industry Research Report on the Retail Pharmacy in Brazil.¶
Value Chain outline¶
The value chain of the retail pharmacy industry in Brazil is a multi-stage process that ensures the availability of pharmaceutical products and related services to the population. It primarily encompasses Manufacturing, Distribution, and Retail.
Identification and description of each step in the value chain¶
Manufacturing (Indústria Farmacêutica): This initial step involves the creation of pharmaceutical products. It is a highly technical and regulated phase focused on research, development, and large-scale production of medicines, vaccines, and other health-related items. Activities range from discovering new molecules to synthesizing active pharmaceutical ingredients, formulating dosages, ensuring quality control, and packaging the final products. Strict adherence to Good Manufacturing Practices (GMP) is mandatory to guarantee product safety, quality, and efficacy.
Distribution (Distribuição): This crucial step connects manufacturers to the points of sale and healthcare institutions. It involves the logistical processes required to store, handle, and transport pharmaceutical products across the country. Key activities include warehousing under specific conditions (including cold chain for certain products), managing inventory, processing orders from various clients, and ensuring timely and secure transportation. Distributors play a vital role in maintaining the integrity of products and ensuring their availability where and when needed.
Retail (Varejo Farmacêutico): This is the final stage where products reach the end consumer through pharmacies and drugstores. Historically focused on dispensing medications, the retail pharmacy sector in Brazil has evolved into a broader health and wellness destination. Activities include selling prescription and over-the-counter drugs, as well as a wide range of non-pharmaceutical products. Pharmacies also increasingly offer various health services, positioning themselves as accessible points for primary health attention.
Identification and description of segments for each step of the value chain.¶
Manufacturing: * Segments: The manufacturing segment can be categorized by the type of medication produced (e.g., reference, generic, similar, biological, phytotherapeutic) and by the origin of the capital (national or multinational). Public laboratories also form a distinct segment, focusing on supplying the public health system. * Types of players: Multinational pharmaceutical companies with global research and production capabilities, large national laboratories with significant market share, and public laboratories linked to federal and state governments. * Main activities: Research and development of new drugs, synthesis of active pharmaceutical ingredients (though a significant portion is imported), large-scale production of finished pharmaceutical forms, stringent quality control testing, packaging and labeling, regulatory approval and compliance, and marketing to healthcare professionals and consumers. * Examples of key players: Leading national players include Grupo NC (which controls EMS), Eurofarma, and Hypera Pharma. Multinational giants like Pfizer also have a strong presence. Public institutions such as Fiocruz and Instituto Butantan are important for public health supplies.
Distribution: * Segments: Distribution can be segmented by the scope of operation (national or regional), the type of products handled (general portfolio or specialized/high-cost), and the customer base served (retail pharmacies, hospitals, public sector). * Types of players: Large national distributors with extensive logistical networks, regional distributors focusing on specific geographic areas, and specialized distributors handling complex products like biologicals and high-cost medications, often serving the institutional market. * Main activities: Purchasing and receiving products from manufacturers, storing goods in appropriate facilities that meet regulatory standards (including temperature control), managing inventory efficiently, processing and fulfilling orders from diverse clients, planning and executing transportation logistics to ensure timely and secure delivery, and managing reverse logistics for returns and expired products. Pharmacists play a key role in ensuring compliance and product integrity during storage and transport. * Examples of key players: The market includes large distributors whose associated companies represent a significant portion of the value moved. Specialized distributors are represented by associations like ABRADIMEX. Historical mentions include Profarma, PanPharma (now part of Viveo), and Santa Cruz.
Retail: * Segments: The retail segment is primarily divided into large national and regional pharmacy chains and independent pharmacies. Another segmentation can be based on the business model, including traditional pharmacies, pharmacy franchises, and those with a strong online presence. * Types of players: Large pharmacy networks operating numerous branches across multiple states, smaller regional chains, independent pharmacies (single stores or small local groups), and increasingly, online pharmacies and marketplaces. * Main activities: Direct sale of prescription and over-the-counter medications, sale of a wide range of non-pharmaceutical products (hygiene, cosmetics, convenience), providing pharmaceutical care and counseling, managing in-store and online inventory, implementing marketing and loyalty programs, and offering basic health services like vaccination, basic health checks, and medication management support. * Examples of key players: The largest national chains by revenue and store count include RD Saúde (Raia Drogasil), Grupo DPSP (Drogaria São Paulo and Pacheco), Farmácias Pague Menos, Farmácias São João, and Panvel. These players are actively expanding their physical footprint and digital presence. [See Key Players Table in provided context]
List of types of players in each segment¶
- Manufacturing: Multinational Pharmaceutical Laboratories, National Pharmaceutical Laboratories, Public Pharmaceutical Laboratories.
- Distribution: Large National Pharmaceutical Distributors, Regional Pharmaceutical Distributors, Specialized Pharmaceutical Distributors, Logistics Operators.
- Retail: Large Pharmacy Chains, Regional Pharmacy Chains, Independent Pharmacies, Pharmacy Franchises, Online Pharmacies/Marketplaces.
Detailed description of the main activities within each segment.¶
- Manufacturing: This involves the entire process from drug discovery and initial research to the production of the final dosage form. Activities include synthesizing active pharmaceutical ingredients (APIs), which often relies on imported inputs. It also includes formulation, which is the process of combining the API with other substances to create the final medicine (e.g., tablets, capsules, liquids). Large-scale manufacturing takes place in facilities that must adhere to strict Good Manufacturing Practices (GMP) to ensure consistency and quality. Quality control testing is performed at various stages of production. Packaging and labeling are critical to protect the product and provide necessary information to healthcare professionals and patients, adhering to regulatory requirements. Obtaining and maintaining registration for each product with ANVISA is also a key activity.
- Distribution: This step is focused on the efficient and compliant movement and storage of pharmaceutical products. Activities include receiving finished goods from manufacturers, verifying quantities and quality, and storing them in warehouses designed to maintain specific temperature, humidity, and security conditions, crucial for product stability, especially for those requiring a cold chain. Effective inventory management is essential to prevent stockouts and minimize waste. Order processing involves receiving and verifying orders from pharmacies, hospitals, and other clients. Picking, packing, and shipping involve accurately selecting ordered products and preparing them for transport. Transportation logistics require planning efficient routes and using vehicles that maintain the required conditions during transit, adhering to regulations for transporting pharmaceutical goods. Managing reverse logistics for expired, damaged, or recalled products is also part of the process. Pharmacists within distribution companies are responsible for ensuring compliance with regulations and the quality of products throughout the supply chain.
- Retail: The core activity in retail is the direct sale and dispensing of pharmaceutical products to consumers. This includes verifying prescriptions, providing information on correct medication usage, potential side effects, and interactions. Retail pharmacies also sell a wide variety of non-medicinal products, contributing significantly to their revenue. Inventory management at the store level is important to ensure product availability. Customer service is a key differentiator, including offering loyalty programs and personalized attention. Increasingly, retail pharmacies are offering basic health services like blood pressure measurement, temperature checks, rapid tests, and vaccination, acting as accessible healthcare points. Many chains are also investing heavily in e-commerce platforms and fast delivery services to cater to changing consumer habits.
List examples of key players with detailed profiles.¶
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Manufacturing:
- Grupo NC (EMS): As of 2024, Grupo NC, through its main company EMS, is the largest pharmaceutical laboratory in Brazil based on sales to pharmacies, with revenues reaching R$ 26.4 billion. EMS is a significant player in the generic and similar drug markets and has been expanding its portfolio, including over-the-counter products.
- Eurofarma: Ranked as the second-largest pharmaceutical company by sales to pharmacies in 2024, Eurofarma showed strong growth (22.4%). It is a major Brazilian laboratory with a diverse product line and has been active in acquiring portfolios to strengthen its market position.
- Hypera Pharma: A prominent Brazilian pharmaceutical company, Hypera Pharma was the second largest in sales to pharmacies in 2023 but experienced more modest growth in 2024 (7.3%). The company has been strategically diversifying its portfolio, including a focus on specialty medications and consumer health products.
- Pfizer: A leading multinational pharmaceutical company globally and a significant player in the Brazilian market. While its global ranking in 2024 showed a projected decrease in revenue due to lower COVID-19 product sales, it remains a major force, particularly in innovative and high-specialty drugs. Pfizer was the top company by net revenue among bilionárias in Brazil in 2022.
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Distribution: While specific current market share data for individual large distributors is not as readily available as for manufacturers and retailers in the provided sources for 2024/2025, the distribution sector is essential. Companies associated with ABRADIMEX are key players in the specialized distribution segment, focusing on high-cost and hospital medications and moving a significant volume and value in the institutional market. Historically, major national distributors have included Profarma and Viveo (which includes the former PanPharma). These entities manage the complex logistics required to supply the vast network of pharmacies and healthcare facilities across Brazil.
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Retail:
- RD Saúde (Raia Drogasil): The largest pharmacy chain in Brazil by both revenue and number of stores. In 2023, RD Saúde maintained its leadership in revenue among Abrafarma associates. They ended 2023 with over 10,395 units among Abrafarma associates. The company is known for its focus on customer experience, continuous expansion (planning hundreds of new stores), significant investment in technology, e-commerce, and expanding health services offered in-store. [See Key Players Table in provided context] They showed high productivity per point of sale in 2023.
- Grupo DPSP (Drogaria São Paulo and Pacheco): The second-largest pharmacy group by revenue in Brazil. Formed by the merger of two traditional chains, Grupo DPSP maintains a strong presence, particularly in the Southeast. They were the third largest in number of stores among Abrafarma associates in 2023.
- Farmácias Pague Menos: Ranked as the third-largest pharmacy chain by revenue in 2023 among Abrafarma associates, Farmácias Pague Menos demonstrated the highest growth among the top players (21.82%). [See Key Players Table in provided context] Their acquisition of Extrafarma significantly expanded their reach and store count, making them the second largest in number of stores among Abrafarma associates in 2023. The company is expanding its health services and digital operations. [See Key Players Table in provided context]
Show estimates of volumes and sizes of each step in the value chain.¶
The retail pharmacy sector in Brazil is a significant market in terms of both value and volume. In 2024, the total sales in the retail pharmacy market reached R$ 158.4 billion, representing an 11% growth compared to 2023. The volume of sales in 2024 was 8.1 billion units, a 6.1% increase from the 7.6 billion units sold in 2023. As of the end of 2024, there were 93.7 thousand pharmacies and drugstores operating in Brazil.
Focusing on the major players, the networks associated with Abrafarma, while representing only about 10% of the total pharmacies, accounted for R$ 91.3 billion in sales in 2023, demonstrating their significant market share in terms of revenue. [See Key Players Table in provided context] These associated networks were responsible for 53% of medication dispensations in 2023. [See Key Players Table in provided context] Projections for 2024 indicated that large pharmaceutical retail companies expected to surpass R$ 100 billion in revenue. [See Key Players Table in provided context]
In the manufacturing step, the total sales by the pharmaceutical industry to retail surpassed R$ 200 billion, reaching R$ 229 billion in 2024 according to some data. The top 10 pharmaceutical companies by sales to pharmacies in 2024 collectively moved R$ 111.7 billion, representing 48.6% of this market. This indicates a significant concentration in the manufacturing sector.
In the distribution step, distributors played a crucial role in the movement of goods to retail. In 2024, distributors were responsible for 57% of the volume commercialized by retail, totaling 4.6 billion units. In terms of value (at Pharmacy Purchase Price - PPP), distributors accounted for 55.7% of the retail business, amounting to R$ 88.3 billion in 2024. Specialized distributors serving the institutional market moved R$ 44 billion in the 12 months up to March 2025. There were 4,500 distributors of pharmaceutical products in Brazil in 2022.
Value Chain Summary Table¶
Value Chain Step | Main Activities | Segments | Types of Players | Estimated Volumes (2024/2025) | Estimated Sizes (R$) (2024/2025) |
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Manufacturing | Research, Development, Production (APIs, finished goods), Quality Control, Packaging, Labeling, Regulatory Affairs, Marketing. | By Product Type (Reference, Generic, Similar, Biologicals, etc.), By Capital Origin (National, Multinational), Public Laboratories. | Multinational Pharmaceutical Laboratories, National Pharmaceutical Laboratories, Public Pharmaceutical Laboratories. | Sales volume to retail: ~8.1 billion units (includes direct sales). Total units sold in Brazil (2022): 5.7 billion. | Total sales to retail: R$ 229 billion (2024). Top 10 labs sales to retail: R$ 111.7 billion (2024). Total industry sales (2022): R$ 131.2 billion. |
Distribution | Procurement, Warehousing (including cold chain), Inventory Management, Order Processing, Picking/Packing, Transportation, Reverse Logistics. | By Scope (National, Regional), By Product Type (General, Specialized), By Customer (Retail, Hospital, Public). | Large National Pharmaceutical Distributors, Regional Pharmaceutical Distributors, Specialized Pharmaceutical Distributors, Logistics Operators. | Volume commercialized by retail through distributors: 4.6 billion units (2024). Specialized distributors (institutional): ~10 million deliveries/month. | Value commercialized by retail through distributors: R$ 88.3 billion (PPP) (2024). Specialized distributors (institutional): R$ 44 billion (12 months to Mar 2025). |
Retail | Direct Sales (Prescription/OTC), Product Dispensing, Inventory Management, Customer Service, Health Services (Vaccination, Tests), E-commerce, Merchandising. | Large Pharmacy Chains, Regional Pharmacy Chains, Independent Pharmacies, Pharmacy Franchises, Online Pharmacies. | Large Pharmacy Chains, Independent Pharmacies. | Total units sold: 8.1 billion units (2024). Abrafarma associates: 53% of medication dispensations (2023). | Total sales: R$ 158.4 billion (2024). Abrafarma associates sales: R$ 91.3 billion (2023). |
Examples of Main Players¶
Manufacturing:
- Grupo NC (EMS): A dominant force in the Brazilian pharmaceutical industry, Grupo NC, with its flagship company EMS, held the largest share of sales to pharmacies in Brazil in 2024, reaching R$ 26.4 billion. The company is a key player in the production and commercialization of a wide range of medicines, including generics and over-the-counter products, demonstrating a strong focus on the retail market channel.
Distribution:
- Specialized Distributors (ABRADIMEX Associates): This group of distributors is critical for the institutional market in Brazil, handling the logistics of high-cost and specialized medications. These companies are essential for ensuring that complex treatments, often requiring strict temperature control and specialized handling, reach hospitals, clinics, and public health facilities across the country. In the 12 months leading up to March 2025, these distributors moved R$ 44 billion in the institutional market. Their operations require advanced logistics and adherence to specific regulations for these sensitive products.
Retail:
- RD Saúde (Raia Drogasil): As the largest pharmacy network in Brazil in terms of revenue and store presence, RD Saúde is a leader in shaping the retail pharmacy landscape. The company strategically invests in expanding its physical store network across Brazil and enhancing its digital capabilities, including e-commerce and fast delivery services. [See Key Players Table in provided context] Furthermore, RD Saúde is actively transforming its stores into health hubs by expanding the range of health services offered to consumers, such as vaccination and basic health checks, aiming to provide a more comprehensive healthcare experience. [See Key Players Table in provided context] Their high productivity per point of sale underscores their operational efficiency.
Volumes and Sizes¶
The Brazilian retail pharmacy market demonstrates significant scale and consistent growth. In 2024, the sector's total sales reached R$ 158.4 billion, marking an 11% increase compared to the previous year. The volume of products sold in the retail channel in 2024 amounted to 8.1 billion units, a 6.1% rise from 2023. The physical footprint of the retail sector included 93.7 thousand pharmacies and drugstores operating across Brazil by the end of 2024.
Within the retail landscape, large pharmacy chains command a significant portion of the market. The networks associated with Abrafarma, despite representing a smaller fraction of the total number of pharmacies (around 10%), generated R$ 91.3 billion in sales in 2023 and were responsible for 53% of the medication dispensations in the country. [See Key Players Table in provided context] Looking ahead, large retail companies projected exceeding R$ 100 billion in revenue in 2024. [See Key Players Table in provided context]
In the manufacturing segment, the value of sales from the industry to the retail channel reached R$ 229 billion in 2024. This highlights the substantial value of pharmaceutical production feeding into the retail market. The market is concentrated at the top, with the ten largest pharmaceutical companies in Brazil accounting for 48.6% of these sales in 2024, totaling R$ 111.7 billion.
The distribution step is critical for facilitating the flow of goods. In 2024, distributors were responsible for channeling 57% of the volume sold in retail, equivalent to 4.6 billion units. In value terms (PPP), distributors accounted for 55.7% of the retail market, moving R$ 88.3 billion in 2024. The specialized distribution segment serving the institutional market (hospitals, clinics, etc.) had a turnover of R$ 44 billion in the 12 months leading up to March 2025.
References¶
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