Brazil Pharmacy Stocks Sink Up to 8% on Mercado Livre Prescription Push

Brazil pharmacy stocks plummeted on Thursday following the announcement that Mercado Livre would begin selling prescription medicines. Shares in Brazil's major pharmacy chains dropped up to 8%, with Pague Menos suffering the largest decline at 8%, closing at R$3.45 (US$0.67) after falling over 10% immediately after the news. RD Saúde, which owns Raia and Drogasil chains, fell 5.38% to R$18.45 (US$3.56), marking the second-largest drop in the Ibovespa index that day.

Panvel, a southern Brazil chain, lost 4.90% to R$12.43 (US$2.40). The broader market also experienced weakness, with the Ibovespa down by 0.99% due to rising US bond yields and fiscal concerns at home.

Mercado Livre's announcement came during its Meli Experience event in São Paulo, where it revealed its plans to sell prescription drugs. Buyers would upload a prescription, and a Mercado Livre pharmacist would review it before the order shipped, ensuring the pharmacy kept the prescription. Fernando Yunes, head of Mercado Livre in Brazil, stated that the company's approach was "responsible" and that the next step was a marketplace linking partner pharmacies directly with consumers.

The company had already introduced prescription drugs in a São Paulo pilot in March, which showed high search volumes and conversion rates. In July, Mercado Livre expanded to include prescription drugs without the requirement for the pharmacy to keep the prescription.

The e-commerce giant already sells medicines in Argentina, Chile, Colombia, and Mexico, with Brazil being its largest market. Mercado Livre plans to open a marketplace for pharmacy chains, with three on the platform in October and a target of 20 by year-end. These partners will support a new delivery service, Envios Agora, promising delivery within 60 minutes for items weighing up to 15 kilograms.

The service is being tested in selected São Paulo neighborhoods and will be expanded city-wide. Mercado Livre also plans to open 20 new large logistics sites in Brazil by the end of 2026.

Analysts argue that the pharmacy collapses stem from the loss of high-spending customers who spend significantly more than the average and visit stores more frequently. They also highlight that the sell-off might have been exaggerated, as Mercado Livre intends to collaborate with pharmacies rather than compete against them. The law 15.357 of 20 March 2026 enables pharmacies to hire e-commerce platforms for logistics and delivery, and Anvisa, the health regulator, is drafting detailed rules for marketplace sales. The outcome of Anvisa's decision will determine the extent to which this model can expand.