The document proposes an entry strategy for an Italian pharmaceutical company to enter the Brazilian market through a local Brazilian partner. It summarizes the Brazilian partner's assets and experience. It then outlines possible entry strategies, highlighting private label and owning a local brand managed by the partner as low cost options. The document proposes an implementation roadmap involving negotiating with the partner, setting up regulatory documentation, and establishing marketing and control activities. It concludes by recommending next steps of evaluating the opportunity and meeting with the potential Brazilian partner.

1. TrustPartners
Confidential
Brasilian market: proposed entry
strategy for Italian pharma
Companies
October 2011
Strategic Partners Group 1
Proprietary & Confidential TrustPartners

2. OBJECTIVES
Document purpose is to describe and analyze the opportunity for an Italian pharmaceutical Company to enter the
Brazilian market, through :
• A quick introduction of the potential Brazilian Partner, who can support the Italian Company to enter in the
market, in terms of organization, business managed and proper assets
• An overview of possible strategies to entry the Brazilian market and the constraints due to the local market and
legislation
• The proposed approach and the support that TrustPartners together with Strategic Partners Group (SPG), an
international strategic consulting firm, can offer during the agreement process and after
Strategic Partners Group 2
Proprietary & Confidential TrustPartners

3. INDEX
 Our Brazilian Partner
 Brazilian market entry opportunity
 Proposed approach
 Next steps
Strategic Partners Group 3
Proprietary & Confidential TrustPartners

4. BRAZILIAN PARTNER: COMPANY PROFILE (1/2)
Description
• Our Brazilian Partner is a company specialized in the Brazilian healthcare market
Main information and focused on trade import/export activities
• Its management has more than 20 years experience in healthcare and food
distribution in Brazil and Latam, working for multinational firms located in Brazil /
Latin America
• Our Brazilian Partner’s offices are located in the Sao Paulo state, the most important
region of Brazil (in terms of population, income pro-capita and business)
• The Company has the ANVISA certification to import and distribute healthcare
products in the Brazilian market
• It can currently distributes pharmaceutical products in the most important pharmacies
in the Sao Paulo state (which accounts for 40% of the pharmacy market in Brazil)
• Our Brazilian Partner has its own warehouse close to Sao Paulo city that can be expanded
Proper assets on needs
Source: Analysis TrustPartners based on Brazilian Partner web site and other sources
Strategic Partners Group 4
Proprietary & Confidential TrustPartners

5. BRAZILIAN PARTNER: COMPANY PROFILE (2/2)
Description
Agreements and • Currently, their existing product portfolio is mainly composed of medical devices
product portfolio articles
• Many advanced discussions with other international firms will probably integrate the
portfolio with:
• Medical instruments and Diagnosis tools
• Vitamins and food supplements
• Plastics disposables and laboratory supplies
• Oral electrolyte products
Business model • Transport activities around Brazil are committed through sub-contracts
arrangements, to dedicated local firms
adopted
• Our Brazilian Partner has also good relationships with relevant stakeholders in the
pharmaceutical industry in Brazil, such as:
• The ANVISA, the national certification boureau that control and allows companies
to sell their products in Brazil
• Several Pharmacy chains, that access Brazilian Partner to the healthcare final
market
Source: Analysis TrustPartners based on Brazilian Partner web site and other sources
Strategic Partners Group 5
Proprietary & Confidential TrustPartners

6. BRAZILIAN PARTNER: KEY ASSETS
Description
• Direct coverage of Sao Paulo market, that represent about
Brazilian market know how 40% of the Brazilian overall healthcare market
• Possible wider coverage through sub-contracts arrangements
Experience in registration • Direct access to registration process due to the strong
process relationship with local stakeholders (ANVISA)
Strong relationship with • Coverage of the main distribution channels (pharmacies,
physicians and wholesalers)
local stakeholders
Brazilian Partner key
assets
• Warehouse located in the most important region of Brazil,
Proper assets and compliant to the local requirements
Immediate availability to • Availability of all requirements needed to start commercial
start business and distribution activities
• High flexibility in adopting business model proposed by the
Flexibility Clients
Strategic Partners Group 6
Proprietary & Confidential TrustPartners

7. INDEX
 Our Brazilian Partner
 Brazilian market entry opportunity
 Local market key points
 Market entry strategies
 Proposed approach
 Next steps
Strategic Partners Group 7
Proprietary & Confidential TrustPartners

8. PHARMACEUTICAL MARKET IN BRAZIL: KEY POINTS
• In the last years the Brasilian government has pointed out several actions to
get better the pharmaceutical and healthcare market (and improve its
image worldwide), through:
• Incentives and benefits for manufacturing and/or R&D plants located in
Brazil
• Public sanitary service enlargement to a wider share of population
• Awareness campaigns to the population, based on the most relevant
therapeutic areas
• Market barriers are still high, due to an heavy taxation and relevant risks of
patent protected molecular liberalization, in case of “national emergencies”
• No patented products cover a low market share (even if grew up over years)
Population: of about 18-20%
190 million
Pharmaceutical market value • Distribution channel is highly concentrated among few Operators (the first
2010: 23Billion$ four cover about 60% of the national market): usually they require a fee of 5-
Growth rate 2010-2015: 10% based on the total revenues
20-25%
• Big pharmacies have a relevant market share in the national retail market;
their network controls big part of the most developed regions, in particular in
the south-east of Brazil
Strategic Partners Group 8
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9. THE ANVISA CERTIFICATION PROCESS
6 months 12 months 18-24 months
• Cosmetics
• Nutraceuticals
• Food supplements
• Healthcare
• Medical devices
• Pharmaceutical
products
Products portfolio has to be defined evaluating the time to market
Strategic Partners Group 9
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10. INDEX
 Our Brazilian Partner
 Brazilian market entry opportunity
 Local market key points
 Market entry strategies
 Proposed approach
 Next steps
Strategic Partners Group 10
Proprietary & Confidential TrustPartners

11. POSSIBLE ENTRY STRATEGY IN BRAZIL
Description Pros and cons
• Actions focused to direct create new • Control upon the activities
local organization or manage / • Know-how acquisition
Own Subsidiary acquire local companies
• High costs and risks
• Registration issues with
ANVISA
• Entry Company goals are achieved • Low control upon the
Own brand managed through the strategic support of activities
Possible entry strategy other local pharma Partners
by local Partner • No know-how acquisition
• These companies sustain Italian • Low costs and investments
Company’s activities with
investments, know-how and their
own resources
• Entry Company product portfolio is • Low costs and risks
directly managed by local • Short time to market
Private label Partnerships with distributors /
importers • Low control and interaction
with the final market
Strategic Partners Group 11
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12. ENTRY STRATEGY IN BRAZIL: POSSIBLE APPROACH
Italian Company
involvement
Own subsidiary
High
• The Italian Company may
decide to gradually increase
its involvement in the
Medium Own brand managed by local Partner
Brazilian market based on
commercial results or key
product strategy
management
Low Private label
Time
Products management
outsourced
Company internal management
Strategic Partners Group 12
Proprietary & Confidential TrustPartners

13. ENTRY STRATEGY IN BRAZIL: KEY FACTOR
Description Partner support
• Selection of the products based on the time • Regulatory information
Time to market to market needed
• Registration process may be realized using • Registration process
Registration own brand or a private label
• Discussion about the availability of the • Co-investing
Investments Partner to co-invest in some business area
• Evaluation of the market characteristics and • Know-how of the local
Local market coverage identification of the areas to be covered market
• Supporting local Partner in defining local • Know-how of the local
Sales force strategy strategies and tactical decisions market
Strategic Partners Group 13
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14. INDEX
 Our Brazilian Partner
 Brazilian market entry opportunity
 Proposed approach
 Next steps
Strategic Partners Group 14
Proprietary & Confidential TrustPartners

15. IMPLEMENTATION ROAD MAP
Long term activity
Deal guidelines Negotiation Project set up
management
Activities • Product portfolio • Support in negotiation • Documentation • Relationship and flow
identification based on activities preparing for ANVISA management between
the analysis of the • Definition of the licensing process the two involved
ANVISA requirements agreement terms & • Development of a parties
and the existing conditions control and
Brazilian Partner communication system
portfolio • Agreement closing
between the two parties
• Customer targeting and • Know-how handover
market analysis and training for the local
• Typology and modality sales force
of investments • Start up of the marketing
activities, for entry
Italian Company, versus
Opinion leader, Final
Clients and Physicians
Strategic Partners Group 15
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16. IMPLEMENTATION ROAD MAP: PROJECT GUIDELINES
Long term activity
Deal guidelines Negotiation Project set up
management
Activities 1. Products “in scope”:
• Organization of meetings with our Brazilian Partner
• Company’s products classification on the basis of ANVISA
criteria
• Time to market definition for the different products
• Portfolio products identification
2. Market analysis:
• Identification of the main regional cluster
• Customer Targeting and distribution channels (pharmacies,
hospitals and private clinics, stores, …)
3. Commercial agreements between the two parties:
• Analysis of current entry Company partnerships for Import/Export
activities to find possible solution to be used
• Negotiation, with the Partner, about the best commercial solution
(with minimum stock, selling on consignment, …) and the product
selling price
Strategic Partners Group 16
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17. IMPLEMENTATION ROAD MAP: NEGOTIATION
Long term activity
Deal guidelines Negotiation Project set up
management
Activities 1. Support in negotiation activities
2. Definition of the agreement Terms & Condition:
• Legal arguments
• Commercial conditions
• Products price and margins
3. Documentation development support
4. Agreement closing
Strategic Partners Group 17
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18. IMPLEMENTATION ROAD MAP: ACTIVITIES SET UP
Long term activity
Deal guidelines Negotiation Project set up
management
Activities 1. Legal and regulatory aspects verify:
• Analysis of local requirements and constraint for the product
distribution
• Road map definition
• Proper documents development
2. Control activities set up:
• Identification of the key phases of the process
• Development of a communication and control system
3. Marketing and know-how activities regarding the product:
• Organization of training activities, for the Sales force, about the
product portfolio
• Selection of a list of Opinion leader, medics and other relevant
stakeholder, to provide marketing activities
Strategic Partners Group 18
Proprietary & Confidential TrustPartners

19. INDEX
 Our Brazilian Partner
 Brazilian market entry opportunity
 Proposed approach
 Next steps
Strategic Partners Group 19
Proprietary & Confidential TrustPartners

20. NEXT STEPS
• To verify Company interest in the opportunity
• To identify the most effective entry strategy
• To organize a first meeting with our Brazilian Partner
Strategic Partners Group 20
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