Chile Pharmaceuticals and Healthcare Report Q4 2009

In BMI's Q409 Business Environment Ratings (BER) for the 10 markets of the Americas, Chile's composite score continued to worsen, with the country now placed eighth overall. Generally speaking, Chile's attractiveness as a destination for pharmaceutical investment suffers from low retail prices for medicines and the fact that reimbursement is minimal, despite the recent expansion through the flagship Universal Access and Explicit Guarantees (AUGE) healthcare plan,. While formal pricing restrictions are relatively limited, retail competition will continue to hamper faster value development of the pharmaceutical market, especially during the currently adverse economic situation. In the meantime, deficiencies in the country's intellectual property (IP) environment will continue to deter foreign direct investment (FDI). Overall, therefore, we forecast that the market will grow at a modest compound annual growth rate (CAGR) of 4.40% in local currency terms, from CLP635bn (US$1.21bn) in 2008 to CLP787bn (US$1.70bn) in 2013.

Although larger regional markets such as Brazil continue to attract most international attention, Chile is also aiming to increase foreign interest in its pharmaceutical research and development (R&D) programmes. To this end, in June 2009, the United States National Cancer Institute (NCI) and Chile's Ministry of Health formed a partnership that aims to accelerate progress on cancer research in the US and Latin America. Earlier in 2009, Chile and Cuba signed a memorandum of understanding (MoU) in the area of biotechnology. Chile is hoping that the deal will allow for a future technology transfer between the two countries in areas including human health and agriculture.

According to BMI's Burden of Disease Database (BoDD), Chile is South America's healthiest country. Authorities seem committed to the improvement of public health, becoming the first government to approve Wyeth's Prevenar PCV13, a pneumococcal 13-conjugate vaccine for infants and young children, in July 2009. According to our BoDD, 2,977 disability-adjusted life years (DALYs) were lost to meningitis in children aged between 0-4 years in Chile during 2008, representing 60% of the total DALYs lost to meningitis and highlighting the need for the implementation of a focused pneumococcal disease vaccine programme in the country.

In terms of other healthcare developments, in July 2009 the Chilean Ministry of Health called for a reform of the country's health insurance scheme, which discriminates against women. Health insurance for females costs twice or even three times as much as that for men, as women are considered to be a higher risk. In 2008, two bills aimed at ending health insurance gender discrimination were put forward to the country's congress, although no progress has since been reported in this area. BMI notes that in the past the insurance sector has also come under fire for refusing to provide coverage to older, higher-risk beneficiaries.