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The Outlook for Pharmaceuticals in Latin America
By: PR Newswire
Dec. 13, 2012 08:23 AM
NEW YORK, Dec. 13, 2012 /PRNewswire/ -- Reportlinker.com announces that a new market research report is available in its catalogue:The Outlook for Pharmaceuticals in Latin America
Strong pharmaceutical market growth opportunities and regulatory developments are making Latin America more attractive
The region needs to increase drug access, in spite of intensifying cost-containment measures. Therefore, attractive opportunities for (bio)pharmaceutical producers exist in Latin America. Brazil has the largest pharmaceutical market. Strong economic performance will fuel pharmacy sales growth in the forecast period. Mexico is the second leading market. Recent regulatory developments will create further market opportunities in the country, particularly for generic producers in both the private and public sectors. In Argentina, the pharmaceutical industry is expected to perform well in the coming years, with strong growth in production, sales, exports and employment. Pharmaceutical companies, however, are encouraged to act in smaller Latin American markets to maximise their full regional sales potential.
Generics consumption in Latin America is low, with the exception of Brazil which has a dynamic bioequivalent generic sector. In the last two years, foreign producers have penetrated what, until then, had been considered a tough sector due to local protectionism and low prices. Major developments include Pfizer's purchase of 40.0% of Teuto in November 2010, Valeant's acquisitions of two generic producers in the first half of 2010, and Sanofi's acquisition of the largest local generic company Medley in 2009. As a result, multinationals represented over 40.0% of the generic sector in 2010, compared to 12.0% in 2008. This wave of acquisitions is a blow for the government, which aims to create a leading local pharmaceutical group able to compete internationally.
In Mexico, the number of people accessing public healthcare will increase as the country is implementing universal health coverage, which means that some private pharmacy consumption will be transferred to the increasingly attractive public sector. Growth in the private pharmacy sector, therefore, is expected to be more moderate in the forecast period. Fuelled by the current economic slowdown and new regulatory measures, generics penetration in the pharmacy sector will increase and contain the private pharmacy sector by value. Strategically, Sanofi already acquired the local generic producer Kendrick in 2009, whilst Valeant acquired Tecnofarma. The amount of opportunities will be squeezed but the pharmaceutical market is large enough to be attractive in the long-term.
THESE REPORTS ANALYSE THE ISSUES
The Outlook for Pharmaceuticals in Latin America is a unique collection of management reports from Espicom Business Intelligence. Each report provides individual and highly-detailed analysis of each market, looking at the key regulatory, political, economic and corporate developments in the wider context of market structure, service and access. The reports are available individually, or as a discounted collection, and prices include 4 completely updated reports sent quarterly, together with a comprehensive statistical appendix. There are over 60 markets covered in the worldwide series.ARGENTINAThere are over 200 pharmaceutical companies operating in the pharmacy sector, of which over half are Argentine. Local producers dominate the pharmacy sector, led by Roemmers, Bagó, Gador and Elea. Recent significant developments include the agreement to start the construction of the Polo Farmacéutico de Buenos Aires, signed by 13 local companies in October 2011; Roemmers' acquisition of 50.0% of a small local OTC company, reported in July 2011; and Roemmers' two-year agreement to distribute and sell 26 primary care products from a Swiss company, announced in January 2011. Mexico and Brazil offer more incentives for multinationals to set up their regional subsidiaries, but two foreign companies made recent strategic acquisitions in the Argentine oncology market in QIII 2011. Previously, GSK acquired Laboratorios Phoenix in June 2010.
The Brazilian pharmaceutical market ranks first in the Latin American region. Pharmaceutical demand will continue to rise, fuelled by increasing disposable income, therefore the market outlook is positive for the 2011-2016 period. Generics are expected to have a pharmacy market share of 20.0% by value and 25.0% by volume in 2011. Competition among the five leading pharmacy chains is fierce, and the sector has been consolidated by a recent wave of mergers. In September 2011, Drogaria Sao Paulo, the leader in the state of Sao Paulo, and Drogarias Pacheco, the leader in Rio de Janeiro, announced a merger, creating what will be the largest pharmacy chain in Brazil, DPSP. This merger took place after the merger between Drogasil and Droga Raia, announced in August 2011, creating the second largest pharmacy chain, Raia Drogasil.
CHILEThe Chilean pharmaceutical market is expected to increase by a moderate CAGR in US dollar terms between 2011 and 2016. In July 2011, the Institute of Public Health in Chile (ISPCH – Instituto de Salud Pública de Chile) confirmed that it had sent the project to create a National Medicines Agency (ANAMED – Agencia Nacional de Medicamentos) to the Congress. The new agency is expected to update the regulation of medicines, strengthen ISPCH's regulatory functions and implement a number of measures to increase the competitiveness of the pharmaceutical industry. The creation of ANAMED is part of President Sebastián Piñera's National Policy of Medicaments that aims to ensure that medicaments sold in Chile meet efficacy, safety and equivalence standards. The industry believes that the creation of ANAMED could speed up the pharmaceutical registration process.
The pharmaceutical market in Colombia is the fourth smallest pharmaceutical market in the Latin American region. The market is set to expand at a one-digit CAGR in dollar terms between 2011 and 2016. The economic and political environment is stable, therefore the outlook is positive for pharmaceutical market growth. Colombia is looking to increase drug access for the whole population under the universal insurance programme (SGSSS), which should expand the market accordingly. Pharmaceutical imports and exports will increase. The number of pharmaceutical companies operating in the market has also risen. Gross pharmaceutical production will continue its upward trend and the industry is expected to create more employment. The leading pharmaceutical company is Tecnoquímicas, followed by Baxter, Roche, Abbott and Bayer. In February 2011, Nycomed, now acquired by Takeda, announced the acquisition of a local company.
CUBAThe economy is expected to do well in the 2011-2016 period, and the Economist Intelligence Unit (EIU) believes that mid-term economic policy is expected to be focused on making the economic system more flexible and promoting more private initiatives. The Cuban pharmaceutical market is the smallest in the Latin American region but, based on current research, production and trade trends, Espicom projects a moderate CAGR in dollar terms between 2011 and 2016. The Cuban pharmaceutical market increased in value by five times in the 2075-2010 period. Cuba has developed a well-established pharmaceutical industry based on the formulation or manufacturing of generic medicines. An important Cuban biotechnology industry has also been developed. The government is responsible for domestic production, which represents between 80% and 90% of the market.
Generic sales in Mexico are still negligible in the private pharmacy sector. However, the National Association of Interchangeable Generic Medicines (AMEGI) believes that consumption of generic medicines in the private pharmacy sector will increase considerably in the forecast period. A number of patents for bestselling drugs will expire in the coming years, and this will accelerate generic market growth. Generic sales are high, when considering sales in the public sector. The public sector is accountable for about 80.0% of generic sales by value, whilst the private pharmacy sector represents the remaining 20.0%; generic sales represented 3.5% of pharmacy sales. In terms of competition, a number of foreign producers, i.e. Sanofi and Valeant, have acquired a couple of local producers, whilst others have formed partnerships with local producers.
PERUThe Peruvian pharmaceutical market is the second smallest in the region. The market is expected to increase by a moderate CAGR in dollar terms between 2011 and 2016. Pharmaceutical expenditure per capita is the lowest in the region. This means that there are growth opportunities, as the economy is expected to perform well in the forecast period. The market increased five times between 2075 and 2010. In January 2011, the Israeli company Teva Pharmaceutical Industries announced that it was acquiring Infarmasa from The Rohatyn Group (TRG) and Altra Investments. Teva commented that the combination of Medco, which is Teva's existing operation in Peru, and Infarmasa would create one of the top two pharmaceutical companies in the country.
Inflation rates are expected to remain extremely high in the forecast period, over-inflating the Venezuelan pharmaceutical market in local terms. GDP growth, particularly from 2012 onwards, and population growth are expected to encourage pharmaceutical sales, in spite of drug price controls and currency exchange controls. MPPS will continue to implement Barrio Adentro, but threats in the public sector include government drug imports from countries that co-operate with Venezuela and government pharmaceutical production. Espicom projects the Venezuelan market to rank as the fourth largest in the Latin American region in 2016. OTC and generic sales are expected to increase in the forecast period. There are about 33 pharmaceutical producers, most of which are local. Foreign producers have consolidated their regional operations in other countries in the last ten years, but Bayer, Daiichi Sankyo, Pfizer, Sanofi, La Sante and Teva remain.
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