The Outlook for Pharmaceuticals in Latin America to 2014

The eight leading Latin American pharmaceutical markets are expected to grow by a CAGR of 9.9% between 2008 and 2013, outpacing the slowing North American markets. Each country report provides a comprehensive analysis of the pharmaceutical market, including five-year market forecasts. For each country you will receive 4 completely updated reports sent quarterly, plus a comprehensive report sent annually.

8 Major Markets Covered!
Argentina
Brazil
Chile
Colombia
Cuba
Mexico
Peru
Venezuela

The pharmaceutical markets in Latin America are worth US$50 billion - and growing fast!

The eight Latin American markets represent a market of 474 million people with a GDP of US$3.4 trillion in 2008. The region is better prepared to face global instability than in the past but economic growth is expected to slow down in 2009 and 2010, after a recent period of remarkable growth. Access to medicines in the public sector has increased, particularly among the least well-off population, with initiatives such as Remediar in Argentina, PAC Saúde in Brazil, Auge in Chile, Seguro Popular in Mexico and Barrio Adentro in Venezuela. Governments are using their bargaining power to negotiate - and centralise - drug purchases in an effort to contain costs. At a regional level, MERCOSUR members have decided to establish a drug price database to compare and monitor drug prices. Overall, public drug expenditure in the region will continue to rise, as there is a considerable level of unfulfilled demand.

Private pharmacy sales are surging, as countries such as Brazil, Mexico and Venezuela have higher disposable incomes in a climate of macroeconomic stability. Innovative drug prices have risen, but governments have started to control them, either directly or indirectly. Contrary to what has happened in developed markets, generics consumption in Latin America is low, with the exception of Brazil. Local protectionism, very low prices and high production capabilities have helped the country to develop a sizeable bioequivalent generics market which has proved tough for foreign generics producers. In Mexico, Calderon’s government has started a renewal process for drug registrations, and it is expected that there will only be patented and bioequivalent generics by 2010. For the time being, however, Mexico remains on the 2008 USTR Watch List. The region is also facing a growing incidence of drug counterfeting, but initiatives are in place to control it.

Attractive opportunities remain in Latin America. The eight pharmaceutical markets covered by Espicom Business Intelligence will represent a value of US$80 billion at retail prices in 2014. With nearly twice the population of Mexico and a GDP of US$1.4 trillion, Brazil is the largest market. Economic stability and the depreciation of the US dollar are helping to bring private pharmacy sales to record figures in the country. Mexico is the second leading drug market, whilst Argentina and Venezuela each represent about a quarter and a third of the Brazilian and Mexican drug markets. Local producers are strengthening their manufacturing capabilities in order to maximise their export markets, particularly in other neighbouring Latin American countries. Combined domestic production represents about half of the regional market. Imports are valued at over US$10 billion but low exports contribute to a deficit in the pharmaceutical balance of trade of US$7 billion.


Highlights from the region

ARGENTINA

In terms of size, the Argentine market is much smaller than Mexico and Brazil, but similar to Venezuela. The pharmacy sector, traditionally dominated by branded products, has showed an impressive double-digit growth in recent years but the growth rate is expected to slow down in the years to come, especially as real economic growth is projected to fall in 2009. The balance of pharmaceutical trade remains in deficit; local producers have a surplus, whist foreign producers have a significant deficit.

The pharmacy sector is characterised by high drug prices, excessive margins, high concentration levels and a lack of regulation. Pharmaceutical production, distribution and the market are dominated by the leading 20 pharmaceutical manufacturers. In comparison with other Latin American markets, local pharmaceutical production is strong and local producers lead the pharmacy sector. The leading company in the pharmacy sector by sales value is Roemmers, followed by Bagó. Both have strong manufacturing capabilities and are entering new export destinations in order to diminish their reliance on the local market.

BRAZIL

In terms of size, the Argentine market is much smaller than Mexico and Brazil, but similar to Venezuela. The pharmacy sector, traditionally dominated by branded products, has showed an impressive double-digit growth in recent years but the growth rate is expected to slow down in the years to come, especially as real economic growth is projected to fall in 2009. The balance of pharmaceutical trade remains in deficit; local producers have a surplus, whist foreign producers have a significant deficit.

The pharmacy sector is characterised by high drug prices, excessive margins, high concentration levels and a lack of regulation. Pharmaceutical production, distribution and the market are dominated by the leading 20 pharmaceutical manufacturers. In comparison with other Latin American markets, local pharmaceutical production is strong and local producers lead the pharmacy sector. The leading company in the pharmacy sector by sales value is Roemmers, followed by Bagó. Both have strong manufacturing capabilities and are entering new export destinations in order to diminish their reliance on the local market.

CHILE

Equity, participation, solidarity and quality are the four pillars of the Chilean Healthcare Planning Objectives between 2000 and 2010. This is a major step to strengthen a more preventive and universal primary care system, to enforce and expand the programme AUGE to 56 ailments by 2007, and to improve IT health systems and management & auditing needs. The goals for 2010 are to increase health equities, meet the needs of the ageing population, face sociological changes, service an ‘empowered’ population and continue to enhance sanitary surveillance.

The Chilean pharmaceutical market is the sixth largest market in the region, after Mexico, Brazil, Argentina, Venezuela and Colombia. The pharmacy sector is very competitive due to the presence of a well-developed domestic industry specialised in generic and copycat products, which supplied 60.1% by value and 81.8% by volume of the pharmacy sector in 2005. The hospital sector has increased in value terms, since the Ministry of Health initiated the health reform and launched programmes such as AUGE, which provides universal access for ailments not previously covered.

COLOMBIA

The Colombian pharmaceutical market is the fifth largest in the region. The healthcare reform programme has been instrumental in boosting consumption of pharmaceutical products, but growth has been largely in volume terms. The majority of the market is supplied by the relatively well-developed domestic industry; most of the subsidiaries of international drug producers have closed their manufacturing facilities. The largest indigenous manufacturers are engaged in the production of generic copycats. The deficit in the balance of pharmaceutical trade has increased since the introduction of intellectual property rights in the mid 1990s. In April 2008, an argument between the US White House and Congress stopped the trade agreement with Colombia being fast-tracked and perhaps delayed it indefinitely; this is a setback for Uribe’s government.

CUBA

Cuba has a relatively strong domestic pharmaceutical and biotechnological industry, which responds to the needs of the population and export opportunities. The pharmaceutical market is valued at US$501 million in 2009, equal to US$44 per capita. Domestic production accounts for between 80% and 90% of the market, the remainder being imports. In 2007, imports amounted to US$70.9 million, domestic production of human pharmaceuticals reached 383 million pesos (US$413.6 million), therefore the market was worth an estimated US$390.7 million.

The Cuban economy outperformed many Latin American economies from 1998-2008. However, in the latter half of 2008, three hurricanes and the worldwide credit crunch led to an end of year deficit of US$4.2 billion. The storms severely impacted on over 2,000 health centres as well as Cuba’s power and road networks. Economically, medical and pharmaceutical services remain priority export sectors.

MEXICO

In June 2009, Mexico finally approved the modification of the General Health Law that will allow the sale and production of biologic and biosimilar medicines for the treatment of chronic diseases. Article 222 Bis defines and regulates biologic and biosimilar medicines, including the requirements to register and market these medicines. The new regulation represents sizeable opportunities for both local and foreign producers. Local producers such as Probiomed, Silanes and Landsteiner Scientific already produce biologic medicines in Mexico. Competition, however, is expected to arise from foreign producers. On a patient level, the new regulation provides product safety and availability.

Under a decree published on 5th August 2008, local manufacturing plant requirements are being phased out over a two- year period. Competition from foreign producers is going to increase, particularly from those which until now did not have the resources to establish manufacturing facilities in Mexico. Imports of antiretrovirals were released in August 2008. Imports of vitamins, homeopathic medicines, vaccines, sera, haemoderivatives and biologic hormones were released in February 2009. Producers of other biologics such as insulin and erythropoietin will also be able to export to Mexico from August 2009. The market will be fully open by the second half of 2010.

PERU

The Peruvian pharmaceutical market is the seventh largest in the region. Historically, growth in pharmaceutical expenditure has been positive but unstable. There are preferential custom duties and product registration towards Latin American countries. Due to a lack of local infrastructure and quality standards, exports are comparatively insignificant. Imports of original drugs are almost exclusively consumed by the private pharmacy sector, whilst locally produced branded and unbranded generics are consumed by the private pharmacy and public sectors. The public sector is making efforts to co-ordinate central drug purchases. The approval of the USA - Peru Trade Promotion Agreement (PTPA) in December 2007 will result in further intellectual property compliance by the pharmaceutical industry.

VENEZUELA

The Venezuelan pharmaceutical market is comparable to Argentina, but ranks well behind Brazil and Mexico. The economic outperformance experienced in recent years has boosted out-of-pocket pharmaceutical expenditure in the private pharmacy sector to unexpected levels. The Barrio Adentro Mission, which is the basis of the new National Public Healthcare System (SPNS), has also increased drug expenditure, particularly in the public sector. The market has grown in value but also in volume, as generics consumption has risen, demanded by the previously excluded population, now covered by Barrio Adentro. Pharmaceutical market growth, however, is expected to fall as the economy will deepen in recession in 2010.

Venezuela has complex pharmaceutical legislation. The Rafael Rangel National Institute of Hygiene (INHRR) is responsible for checking the drugs under the pharmaceutical registration process, and controlling pharmaceuticals already approved and marketed. The registration process is slow for both national and multinational manufacturers. The process to renew registrations of pharmaceuticals with a seven-year or longer registration started in the second half of 2008. The deadline to request the renewal of an expired sanitary registration has been extended until 31st July 2009. In case of pharmaceuticals whose sanitary registration is going to expire in 2009 or afterwards, the renewal request must be presented at least 45 days before expiring.    



FOR EVERY MARKET, SENT QUARTERLY

MARKET OUTLOOK

• Current market size
• Unique 5-Year market projections to 2014
• Market outlook
• Comment & rating, covering 8 key areas such as use of generic drugs, intellectual property, pricing and the health systems
• Market structure
• Statistical data on imports and exports
• Market developments, covering recent and impending developments with respect to key issues such as regulation, health facilities, funding and government policy
• Key national data projections

FOR EVERY MARKET

BACKGROUND DATA
Population data, including growth trends and age structure
Demographic indicators detailing principal causes of death and morbidity

HEALTHCARE SYSTEM
Organisation & administration
Health expenditure
- Expenditure by source of funding and type
Hospital services
- Hospital data such as beds by type, region, specialty, patient admissions and surgical procedures
Outpatient care
Medical personnel
- Data on healthcare professionals covering such areas as doctors by specialty, nursing staff and dentists

ACCESSING THE PHARMA MARKET
Regulatory environment
Distribution and trade fair information
Domestic production
Company information

CONTACT DETAILS
For healthcare organisations and trade associations

Please see individual report listings for further details.