How Eurofarma can impact the cannabis market in Brazil

The recent foray of the pharmaceutical giant Eurofarma into the promising market of medicinal cannabis in Brazil has stirred the waters of the industry and attracted keen attention from various experts.  

The therapeutic potential of cannabis, combined with the growing global interest, culminated in Eurofarma's strategic decision to explore this field, marking a significant milestone in the Brazilian scenario. Different voices such as the founder and CEO of Verdemed, a company of pharmaceutical products derived from cannabis, the journalist and specialist in the sector, Ricardo Amorim, and the economist and entrepreneur in the national plant ecosystem, Joaquim Castro, converge and diverge in their analyses of the impact of this pioneering entry.  

Partnership between giants 

Verdemed's CEO, José Bacellar, explains how the partnership between Eurofarma and Verdemed came about, leading to the pharmaceutical company's entry into the national cannabis sector.  

"Discussions with Eurofarma began in 2019 and gained momentum in late 2021 and early 2022, coinciding with the increase in sales in pharmacies and the growing visibility of the cannabis derivatives market. We project a demand exceeding R$ 250 million for cannabis derivatives in 2023, considering sales in pharmacies and government acquisitions," highlighted Bacellar.  

Based on this data, the companies began discussions on a partnership, formalizing the contract in 2022 for isolated products: CBD 20mg/ml, 50mg/ml, 100mg/ml, and 200 mg/ml in 30 ml bottles. Approvals from Anvisa were obtained in July 2023 for Verdemed and November for Eurofarma.  

"Starting in 2024, we will produce the same isolated products for Eurofarma that are already available in Canada by Verdemed. This partnership validates the quality of our products, demonstrating the company's commitment to Brazilian doctors and patients," the CEO concludes.  

Cannabis as a growth opportunity 

Ricardo Amorim, known for his work as a journalist in the cannabis sector, sees Eurofarma's entry into medicinal cannabis as a bold strategic move. For him, the diversification of pharmaceutical products, incorporating cannabis, represents a sensitive response to market demands and a growth opportunity for Eurofarma.  

"The entry of a major pharmaceutical player into the cannabis market gives us two pieces of information: the segment has matured and competition will increase. It remains to be seen how doctors, who are the only generators of demand for these products, will react to the novelty," highlights the journalist.  

Amorim, who is also a representative of the Brazilian Congress of Medicinal Cannabis Committee (CBCM), explained in an interview with the Sechat portal that Eurofarma will likely use its persuasion power and sales force to gain market share, making life difficult for companies already operating in the segment.  

"If the fight reflects on prices, patients benefit, but those who fought to create this market may be left behind. Or be bought out in a consolidation move that I consider inevitable, especially if regulation continues to advance in the country," he concludes.  

Challenges of the National Ecosystem 

On the other hand, Joaquim Castro, an economist and founder of Clínica Gravital, which operates in the cannabis ecosystem in Brazil, emphasizes that Eurofarma's entry brings with it unique challenges and opportunities, however, he states that market responsibility is necessary. For him, the integration of medicinal cannabis into the Brazilian pharmaceutical market requires a cautious approach due to regulatory complexities and the stigma still present regarding the plant.  

"Discreetly, the largest pharmaceutical companies in the country recognize the potential of medicinal cannabis as a producer of molecules with broad and safe use by the medical class. No one who has been in the industry for years has seen Eurofarma overtly at sector events," analyzes Castro, who points out that no one has seen company executives openly and consistently advocating cannabis as a therapeutic alternative.  

"And so, in a precise move, they debut in the sector. Whenever someone the size of Eurofarma enters a segment, it carries significant weight."  

The entrepreneur draws attention to the company's portfolio, which until now has only had products with isolated cannabidiol (CBD) allowed by Anvisa.  

"Cannabis has other components of the plant besides CBD. Experienced doctors practically no longer use the isolated compound. The question is: what type of composition do municipalities and entities that make larger purchases seek? Who influences these bids and directs the technical requirements for formulation A or B?"

According to the entrepreneur, "it's part of the game. If they come to add and show the safety of cannabis-based products, they will be very welcome. However, if they come merely to participate in public tenders and not help the industry concretely break through the prejudices and barriers that abound in the sector, it will be a passive presence. Time will tell."  

The specialist also points out that there are two parallel cannabis markets that often intersect. One is the market of medical offices, with scattered sales and professionals knowledgeable about the subject but not very attractive to the large industry. And the other, a rapidly expanding market, is that of tenders and litigations.  

"I don't see Eurofarma with the hierarchy of a cannabis brand to have strength in medical offices, but it will be a major competitor for companies focusing on public purchases. And this can be very good for public coffers," he concludes.