The Pharmaceutical Market: Argentina

Espicom's in-depth pharmaceutical market reports are ideal for executives wanting to understand the key drivers in pharmaceutical markets and have access to a wealth of statistical data. Each report opens with an outlook section that provides analysis of the market, 5-year market forecasts, national data projections, market outlook and key developments such as regulation, pricing/reimbursement, intellectual property, health facilities and government policy. The report also provides extensive background information, population trends, health status, health expenditure, organisation & administration, hospital services, medical personnel, healthcare development, market access information, trade data for raw materials and finished products and essential industry contacts. Included with the report are 3 free quarterly updated outlook reports, enabling you to keep up to date with market developments for a year.

The Argentinian pharmaceutical market is valued at US$6.1 billion in 2008. In terms of size, the Argentinian market is much smaller than Mexico and Brazil, but similar to Venezuela. The pharmacy sector, traditionally dominated by branded products, has shown an impressive double-digit growth in recent years but the growth rate is expected to slow down in the years to come. 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 Bag. Both have strong manufacturing capabilities and are entering new export destinations in order to diminish their reliance on the local market.

The drug price index has risen at a lower rate than the consumer price index (CPI) in recent years. Using Base December 2002=100, the drug price index increased by 32.4% between December 2002 and June 2008, whilst the CPI rose by 54.0%. Pharmaceutical producers expect to increase drug prices by up to 10% in 2008, following drug price rises of around 8% in 2007. These increases follow a number of unsuccessful drug price agreements with the government which started in December 2005. Producers believe that drug prices should rise because of increasing production costs and wages.

Including internal demand, exports and imports, pharmaceutical sales were valued at 2.7 billion pesos (US$843.8 million) at manufacturers' prices between July and September 2008, which represented a rise of 49.0% in local terms over the same period in 2007. The central nervous system represented 16.5% of the total, followed by the alimentary tract & metabolism (15.9%) and the cardiovascular system (12.3%). Sales from Argentinian producers represented 17.3% of the total, followed by Indian producers (14.9%) and German producers (9.1%).

Cumulative domestic production amounted to 5.4 billion pesos (US$1.7 billion) between January and September 2008. There are 110 manufacturing plants in Argentina, of which 93 are owned by local producers. The industry employs about 27,000 people directly. Over three quarters of the producers are located in the city and the province of Buenos Aires. In order to maximise their export opportunities, local producers are strengthening their manufacturing capabilities, increasing their export destinations and diversifying their product offering.