en.Wedoany.com Reported - Brazil's Administrative Council for Economic Defense (Cade) has initiated a review process for the acquisition of French pharmaceutical company Sanofi's Brazilian generic drug business by EMS. The transaction, announced in early March by the Sanchez family-controlled company, involves approximately $600 million and will be formally executed by Novamed, part of the NC Group. The review initiation notice was published in the Federal Official Gazette on June 1, signed by Deputy Director Felipe Neiva.
According to the 126-page notification document submitted to Cade, the merger will result in product overlaps across approximately 40 therapeutic categories. In the document, EMS stated that due to the highly fragmented nature of the Brazilian generic drug market, this overlap will not lead to excessive market concentration. Given the complexity of the transaction, EMS and Sanofi have opted for the ordinary review procedure, which has a 240-day timeline. The acquirer noted that even if the company gains pricing power post-transaction, it cannot arbitrarily raise prices, as the market is regulated by the Drug Market Regulation Chamber (CMED), an agency under the National Health Surveillance Agency (Anvisa). The document emphasizes that CMED has mechanisms to curb abuse of market power, limiting arbitrary price increases.
In the generic drug product areas shared by EMS and Medley, the document lists the most relevant categories, including cardiovascular, diabetes, gastrointestinal, dermatology, gynecology, urology, antibiotics, psychiatric, and neurological treatments. For some market segments where the combined market share may exceed 40%, such as hydroxychloroquine—a drug that was recommended by some doctors as part of an "early treatment" protocol during the COVID-19 pandemic, though never scientifically proven—EMS explained that considering the availability of alternative therapies, actual market competition remains significant. Another example is naratriptan, used to treat migraines; EMS believes there are multiple treatment approaches for this condition, involving different therapeutic categories depending on physician prescriptions. Of the 27 markets in the retail channel and 14 overlapping markets in the institutional channel, the company reported that 19 are below 40%.
The transaction will also include a production facility in Campinas, São Paulo, consisting of two properties, as well as the intellectual property and trademark rights for Medley products. EMS will also inherit Medley's distribution contracts operated by third parties in the states of São Paulo and Minas Gerais. EMS stated that this transaction represents an opportunity for the NC Group to expand its generic drug supply, while Sanofi uses it to accelerate its focus on innovative products for sustainable growth. To demonstrate that the change in control will not alter the competitive landscape, EMS cited recent large-scale investments by competitors: Cimed invested R$450 million in a factory in Poços de Caldas, Minas Gerais; Eurofarma is also building a new industrial complex in Minas Gerais with an investment of R$2 billion; Hypera invested R$363 million in a cancer drug factory; and other investment cycles.
In the application document, EMS listed at least 30 major pharmaceutical groups active in the Brazilian generic drug market, including Eurofarma, Aché, Hypera Pharma, Prati-Donaduzzi, Teuto, Cimed, Geolab, União Química, Biolab, and Vitamedic. According to data from the Brazilian Generic and Biosimilar Drug Industry Association (PróGenéricos), the country, as the world's seventh-largest pharmaceutical market, saw the generic drug industry generate revenue of R$23 billion in 2025, a 13.4% year-over-year increase, with sales volume growing 75% over the past five years. Currently, generic drugs account for 40% of total national sales, with an average discount rate of 70%. There are 102 laboratories producing 4,665 dosage forms registered with Anvisa, with annual sales exceeding 2.5 billion units.
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