Medley ends March as leader and dispute gets fierce
Valor Econômico
The fierce dispute between the pharmaceutical industries peaked in March when the lab Medley took over the leadership in the ranking for the first time since the rival EMS Pharma - of the EMS group - consolidated as the number 1 of the sector in 2007. Data released by the American consulting IMS Health show that, in March, Medley exceeded its main rival in the sales of units. Figures obtained by Valor with sources of the sector show Medley closed March 7.4% of market share and earnings of R$ 262.2 million (U$ 163.9 million), compared to 7.1% of EMS Pharma, which sold US$ 250.6 million (US$ 156.6 million) in the same month.
The values of IMS are "full", that is, they consider the sale of medicines without the discounts offered by the industries at the counter of the drugstores, which may get to 75% depending on the product. The fight got so fierce that EMS Pharma reacted fast and resumed the leadership in April, as indicates the survey of the American consulting firm. "From March on, competition started really being head to head", says a source of the market asked by Valor. While the earnings of EMS Pharma grow at a rate ranging between 25% and 35%, Medley grows more than 40%. "Achieving the full market leadership in the month of March was the crowning of a continuous work of many years", said the CEO of Medley, Décio Decaro.
"We imagined Medley would overcome EMS Pharma. But it was a surprise it happened already, now", says Bruno Sávio Nogueira, analyst at the consulting firm Lafis and specialist in the pharmaceutical sector. For him, one of the main factors that support the leap of Medley was the new vigor injected by the French group Sanofi-Aventis, which acquired the company in 2009. The multinational has strong operations in Brazil and it is here it concentrates its second largest operation after France. "Besides the financial investments in the Brazilian subsidiary of the multinational, the high knowledge of the management processes has improved the trading conditions of the company and its cost structure", says Nogueira.
The power of reaction of EMS Pharma, controlled by businessman Carlos Eduardo Sanchez, cannot be overlooked though. The company continues to surprise with its growth rates and, especially, its ability of launching products. In the area of generics, the laboratory is known for leading the introduction of new drugs after the breaking of patent of the reference formulas. The aggressiveness, however, can be a problem for the company. Sources of the market say the productive capacity of EMS Pharma has not kept up with the pace of the demand for their products. According to the same source, the imbalance between supply and demand at EMS Pharma occurs since the end of 2010. "The problem is that, in the shortage of medicines of EMS Pharma, the consumer can choose another brand". The group will invest R$ 360 million (US$ 225 million) in three new plants: Manaus (AM), Brasília (DF) and Jaguariúna (SP). They should be ready by 2012.
Medley would also have a vulnerable point. To an observer, the strategy of the company is to gain market "sacrificing" the margins. "There is room in Brazil for that because the profitability is higher compared to Europe, for instance. At some point, Medley may step on the brake in gaining participation to recover profitability", he adds.