The rise of the BRICS

The establishment process of the five most important emerging countries also involves the
pharmaceutical sector. According to research by Iqvia, within three years, four of these nations
will be among the world’s leading pharmaceutical markets.

10/05/2023

Business

Caterina Lucchini

The acronym BRICS refers to a group of 5 major emerging countries consisting of Brazil, Russia, India, China and South Africa. These states, due to their size, the population growth taking place in some of them (especially India) and their relevance geopolitical are increasingly important on the international chessboard.

In 2026, according to Iqvia data, among the world’s major pharmaceutical markets will appear four of the five BRICS countries, namely China, Brazil, India and Russia at the second, sixth, ninth, and twelfth places (ltaly is ranked eighth).

The numbers of the foreign market

The pharmaceutical industry ended the year with an all-time export record: 2022 indeed confirmed the more than 44% growth in export value in the first ten months, with a positive foreign balance of 6.7 billion euros. According to the latest report released by Farmindustria (July 2022), the detail by commodity sector sees medicines prevailing, accounting for 82.7% of exports and 74.2% of imports. Basic substances and other products account for 9.5% of exports as well as 17.1% of imports. Finally, vaccines account for about 8% of exports and 8.6% of imports.

For active ingredients, our country is 75% dependent on the far east, China and India in in particular. China also represents the country on which the EU depends for intermediate needed for the production of drugs, especially those of established use.

Minus the 27-country European Union, which garners 58.7% of total exports and 7% of imports, among non-European countries the main trading partner is the United States (14% of exports and 9.1% of imports). Also significant is the weight of trade with Asia, which record a share of 8.7% of total exports, while imports account for 6.6%. Russia collects 0.6% of Italian exports.

Leading role for pharmaceutical exports

According to ICE (Agency for the Promotion Abroad and Internationalization of Italian companies), Italian exporting companies reacted promptly during and after the pandemic, registering higher export growth rates for Italy than those of other comparable large economies. By the end of 2021, Italian exports had already exceeded pre-pandemic levels by 7.5%, and the first six months of 2022 saw a further trend growth of 22.4%. It is necessary to read the data taking into account inflation which, after 30 years, has once again become one of the variables that is characterizing the evolution of the global economy. However, even in volume, Italian export marks a growth. Seventy-five percent of national exports are machinery, metallurgy, fashion, motor vehicles, agribusiness, chemicals (2.5%) and pharmaceuticals (4.1%) (ICE, report 2021-2022).

In this picture of general growth for several sectors, it is the Farmindustria report that highlights how strong and pronounced is the push of the drug to foreign markets compared to other sectors. The graph clarifies how the internationalization process involves the pharmaceutical sector much more than the average industry, both because of the presence of foreign companies in Italy and the foreign projection of Italian ones. Companies with Italian capital realize more than 70% of their sales, thanks to an internationalization strategy supported by products with high added value and investments made in Italy. Among firms with foreign capital, the pharmaceuticals is the leading sector in terms of the sum of R&D investment and exports. Such enterprises, in fact, export more than 90% of their production and account for 14% of the presence multinational manufacturing industry in Italy in terms of employees, turnover, R&D investment and exports.

Export development from 2001 to 2021

Actions to support export

As part of the system action coordinated by MAECI (Ministry of Foreign Affairs and International Cooperation) and the “Export Pact,” the ICE Agency has put in place implemented 20 new actions from 2019, aimed at modernizing and making its services more usable to businesses; it modulated during the pandemic and accelerated after it its more traditional service (trade fairs in Italy and abroad and training) and strengthened its organization with new competitions for officials and managers and the expansion of its network abroad. These actions resulted in a 1.55-fold increase in businesses served and a 2.79 times the support services provided to businesses.

The BRICS are also receiving attention and have embraced many of the growth initiatives of the foreign network promoted by MAECI. The expansion aims to strengthen the action of ICE with a greater presence in neighboring markets, with a medium-term vision in emerging Asian countries and with a new strategic focus on the countries of Africa Sub-Saharan.

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