Following the news that Brazil’s first-round elections ended inconclusively, with left-wing frontrunner Luis Inácio Lula da Silva securing 48.4% of the vote—less than the 50% needed to avoid a runoff—and incumbent President Jair Bolsonaro receiving 43.2%, which is far higher than pollsters had predicted, with most estimates having put his support in the high thirties;

William Masters, Pharma Research Analyst at GlobalData, offers his view on how these candidates will impact the pharmaceutical market:

“Luis Inácio Lula da Silva and Jair Bolsonaro have starkly different approaches to public healthcare policy, with Bolsonaro having consistently cut healthcare budgets over his four years in office, while attacking regulators during the COVID-19 pandemic. Lula da Silva has promised to significantly increase spending on the Unified Health System (SUS) if elected, alongside investment in healthcare infrastructure and support for the pharmaceutical industry.

“The surprisingly close result will also mean a much tighter race in the runoff vote. In a sense, the implications for the pharmaceutical industry for each candidate is simple: more public spending under Lula and more cuts under Bolsonaro.

“As consequential are congressional and state governorship elections. Healthcare in Brazil is managed at the federal, state, and municipal level, and outcomes in elections at all levels have implications for policies and spending. Bolsonaro’s Liberal Party (Partido Liberal, PL) won eight out of the 27 senate seats up for election, compared to just four for Lula da Silva’s coalition. In the lower house the PL won 99 out of 513 seats, making it the largest single party in Brazil’s fractured congress. Bolsonaro allies also won key governorships in Rio de Janeiro and Minas Gerais, and an ally is also expected to win a runoff election in São Paulo, the wealthiest and most populous state in Brazil. The gains for Bolsonaro allies mean even a victory for Lula da Silva in the second round will mean he has to work with a potentially hostile congress, limiting his policy options.

“There remains a short-term risk of Bolsonaro not accepting the election result if he loses by a narrow margin. The President has repeatedly questioned the reliability of the country’s electronic voting system and has stated that if he wins anything less than 60% of the vote then it would be evidence of fraud.

“If Bolsonaro loses the election but refuses to concede, this would severely test Brazil’s institutions. It could result in severe political and economic uncertainty, and at the very least cause international investors and companies to panic.”

GlobalData’s World Markets Healthcare covers up-to-the-minute information relevant to the pharmaceutical and healthcare markets around the world, covering both leading and emerging markets in detail, and includes incisive analysis of new market developments, detailed country reports, and 10-year market size forecasts for 70 countries.