Interview with Marco Billi, Vice President of International Business and Innovation, Eurofarma, São Paulo, Brazil
Innovation is vital to long-term success in the pharmaceutical sector, both for business operations and product development, says Marco Billi, Vice President of International Business and Innovation for Eurofarma, the second largest Brazilian life science manufacturing company and leader in the medical prescription market. Eurofarma, which is an IFC investment client, recently partnered with IFC’s DigiPharma team to develop and implement a digital transformation strategy, enabling the pharmaceutical leader to improve operational efficiency, increase customer satisfaction, and reduce expenses. In an interview, Billi shares the keys to running a successful branded generics company, ways to approach research and development, and where he hopes the company will be later this century.
How did Eurofarma get started 50 years ago? What are the driving forces that have led to your success?
After World War II, my Italian grandfather, who went to university to study chemical engineering, came to Brazil to work for a pharmaceutical company and eventually set off on his own as a third-party manufacturer, which at the time was still a new way of doing business. He got really good at production efficiency and was able to offer his customers high-quality, high-volume manufacturing at competitive pricing. Eventually, my grandfather started diversifying his product offering through organic growth and acquisitions, and Eurofarma was born.
2001 marked a big turning point for the industry when the law approving generic medicine was passed in Brazil. Many players left the market because they didn’t have experience manufacturing high-quality, low-cost medications. They also didn’t have the capacity to invest in development to ensure the comparable efficacy between generics and innovative non-patented medicines. Since we prioritized quality from day one, it wasn’t a leap for us to make bioequivalent medicines that would meet strict regulations. We started experiencing significant growth at this time. In 2009, we started our expansion into Argentina. Today, Eurofarma is a global company with a strong presence across Latin America, and in some part of the United States and Africa.
Several factors have contributed to our success. First, my grandfather was a non-conformist. He operated as a third-party manufacturer when most pharma companies manufactured their own products. He prioritized quality over profits and focused on growth over the long term because he knew that survival in this industry depended on continued innovation. He was never satisfied with the status quo, and these values are embedded in the DNA of the company and is the way my father, our current CEO, continues to run the company. Lastly, it is a very people-oriented company. We promote from within and continuously train and support our staff, and people stay with us for a long time.
What are the key factors that make a branded generics company competitive in Latin America?
It is important to maintain a broad portfolio and regularly bring innovative new medicines to doctors and hospitals. Selling one highly successful medicine is not enough to sustain a company over the long term. It is also essential to be known for consistently manufacturing high-quality products. Finally, no branded generics company can remain competitive without strong distribution channels.
Agility is also key to success. Large multinational companies can be slow to make decisions because they don’t face much competition. This goes back to what I said earlier about not being satisfied with the status quo, even if profits are steady. Ninety percent of our portfolio has competition. We are used to making strategic decisions quickly and pivoting when needed.
Eurofarma has been focusing more and more on innovation and research and development. What is driving this? Can you explain your approach?
As I said, innovation is critical to survival in the pharmaceutical sector. We established ourselves as a company well versed in generics because we have a lot of experience producing high-quality medicines and we know how to do that quickly. Maintaining our strong generics business gives us the resources to invest in a research and development strategy.
We look at chemical compounds that already exist in the market and explore new delivery mechanisms, like patches, sprays, or new concentrations. We also develop brand-new medicines by licensing chemical compounds from partners. We now have more than 30 patented medicines in the market.
We have also established a $100 million biotech fund to stay closely connected to innovation in other areas of health. We buy equity in companies outside of Brazil developing new services, hardware, software, and medical products. We are also very enthusiastic about the health tech ecosystems and have a venture capital fund to invest in startups.
Describe the importance of a digital agenda to your business and the process of implementing DigiPharma with IFC. What impact has it had?
Innovation is not just important to product development but also in how we run our business. And we know that digital solutions are essential to keep up with the rate of change in this industry. We were in the process of developing our five-year strategic plan and advancing our digital agenda would be a key part of it.
The DigiPharma team started with an evaluation of our digital maturity. When it came to adopting new business models or having the structure in place to invest in startups, our digital transformation was ahead of the curve.
However, when it came to operational efficiency, we were behind. For instance, our sales team followed a protocol for visiting doctors in the field and promoting products by providing samples. The DigiPharma team promoted a multichannel approach. But, to address customers’ preferences, we needed answers to basic but important questions: Which doctors preferred virtual visits? How often did they expect to be visited? Which hospitals preferred one type of sample over another? We are in the process of leveraging digital technology to capture answers so our sales team can provide a more personalized customer experience. DigiPharma also helped us to better predict production cycles based on demand. We have already seen cost savings.
What type of pharmaceutical products do you expect to experience the biggest growth?
Weight loss drugs and medications to address gastrointestinal disorders will continue to increase.
An exciting area of growth is the combination of traditional medicine with digital health to improve patient outcomes even further. For example, there are mobile apps that cancer patients undergoing traditional treatment can use to track symptoms, sleep, and side effects from medication. Preliminary research on the efficacy of these apps found that patients using them required fewer doctor visits.
I am excited to see how new software and even hardware innovations will be used to complement traditional therapies.
What is your vision for the future? What kind of company will Eurofarma become in 10, 50, and 100 years?
Over the next 10 years, we will be working to become the largest pharmaceutical company in Latin America. We also plan to expand our presence around the world. As we continue to develop innovative products and execute our digital transformation strategy, we hope to be recognized as a global digital health company. And of course, we will always honor our core values and grow in a responsible, sustainable manner.
It is challenging to quantify solid targets over 50 or 100 years. We aspire to develop a medicine or discover the cure for a disease that will dramatically change people’s lives. Doing so will secure Eurofarma as a global pharmaceutical pioneer.
This interview has been edited for length and clarity.
Published in April 2023
Marco Billi began his career in the financial market working at companies such as BTG Pactual and Saint Paul Advisors, where he was involved in mergers and acquisitions (M&A). In 2017, Billi joined Eurofarma in M&A and after successfully acquiring multiple projects and structuring the corporate venture area, Marco became the General Manager of Eurofarma, Colombia. Next, Billi was the Northern Latam International Director (Mexico, Colombia and Central America) and, most recently, Vice President of International Business and Innovation. Billi holds a degree in Economics and International Relations from Facamp (Faculdades de Campinas).