The company comprises a number of divisions:
• Marcas, which offers similars of branded medicines but with innovations that have acompetitive advantage over other products on the market. Examples include multivitamin Gerovital and appetite stimulant Apevitin BC.
• Genéricos, which was established in 2000 and is claimed to offer the largest collection of generics in Brazil, encompassing more than 500 presentations.
• Sigma-Pharma, which primarily comprises Rx medicines. Its portfolio is heavily marketed to doctors and physicians.• Hospitalar, which develops and supplies drugs specifically for hospital use
• Consumo, which manufactures and markets OTCs, including vitamin C supplement Energil C and topical analgesic Balsamo Bengue.
The company also has a number of subsidiaries, including Germed Pharma, a line of generics created in 2002, which became an independent company in 2009. In 2011, EMS announced that itplanned to execute an IPO for Germed Pharma within the next 2 years. Other subsidiaries include Legrand, whose primary business is OTCs and generics, and Nova Química, which competes in the Rx and generics markets.
Generics: Growth driver
Generics (both Rx and OTC) are EMS’s largest cash generator, accounting for 60% of revenue. In 2011, sales of its generic unit grew by 35% to totalapproximately Rs2mn and the company expects this figure to increase to Rs$3mn in 2012. Established in 2000, one year after ANVISA introduced law 9.787 allowing for the creation of generic drugs, EMS’ generics business has gone from strength to strength and it now rivals Medley (owned by Sanofi) for the title of leading generics player in Brazil. A key to its success is its strategy to be first to market withnew entries once brands come off patent. One example is when Viagra (Pfizer) lost marketing exclusivity in 2010. Within days of the patent expiry, EMS had launched two versions of the erectile dysfunction drug: generic sildenafil citrate and a similar version named Suvvia. According to an industry source, these generic launches helped the market to grow by 700%, with EMS claiming two-thirds ofsales.
With discounts of up to 60% off the reference brand, it is clear to see why EMS’ generics are an attractive option to consumers. However, the company has also invested heavily in doctor detailing and trade- and consumer-directed marketing campaigns to communicate the message that the generics are as effective and safe as the reference brand. To instill confidence in the products, thecompany invites doctors to visit its R&D centres based in Hortolândia, São Paulo, while in 2011 it teamed up with retailer Onofre to offer consumers the chance to win a trip to look round EMS' laboratories. The campaign entitled, “Eu quero visitar o maior laboratório do Brasil” (I want to visit Brazil's greatest laboratory) was implemented after Onofre discovered that a number of consumers still havedoubts about generic products.
Additionally, EMS has an extensive sales team who are well equppied with up-to-date technology to inform healthcare professionals and pharmacists about its portfolio of generics and recent launches. The company also provides pharmacy staff with training about its products, as well as implementing POS activites. Within the pharmacy, EMS advocates the adoption by theretailer of a shelf layout which displays EMS’ generics and similar brands alongside the reference brand. However, while EMS’ original strategy for its generics was to use packaging similar to that of the reference brand, in 2009 the company changed tact and attempted to establish EMS as a brand in itself with the desire to move away from its cut-price image.
To reinforce the brand message...