£4212 / $67340 / €5122
Strong pharmaceutical market growth opportunities and regulatory developments are making Latin America more attractive
The region needs to increase drug access, despite 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 and counterbalance their full regional sales potential.
Brazil and Mexico aim to become global leaders in the regulation of biologic and biosimilar medicines
In Brazil, ANVISA is expected to publish specific guidelines for the development of biosimilars of monoclonal antibodies in 2012; the agency published four guidelines for biosimilars in October 2011. Along with these guidelines, ANVISA created a technical chamber for biologics. The Ministry of Health is very keen to encourage the local production of biosimilars, whilst both local and foreign companies consider the biosimilar sector very attractive and are making slow but steady progress. In Mexico, a new decree that reformed and updated the Regulation of Health Supplies (RIS) in terms of biologic medicines was signed and published in the official bulletin (DOF) in October 2011. The new decree provides the legal requirements for any company interested in registering a biologic or biosimilar drug.
8 KEY MARKETS COVERED
Highly detailed analysis providing comprehensive regularly updated reports for leading markets in the region:
HIGHLIGHTS FROM THE REGION...
There 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 2011.
Concentration levels are expected to increase in the Brazilian wholesale and retail sectors. In the wholesale sector, there are over 300 pharmaceutical wholesalers but this number continues to fall, due to mergers and acquisitions. Panarello, Profarma, Santa Cruz and Athos Pharma are the leading wholesalers. In the retail sector, pharmacy chains account for around half of the private pharmacy sector by value but they only represent about 10.0% of the total number of outlets. Competition among the five leading pharmacy chains is fierce, and the sector has been consolidated by a wave of mergers in recent years, particularly in 2011. Three leading chains, DPSP, Raia Drogasil and Brazil Pharma, are incorporating their mergers/acquisitions in 2012, but the process of consolidation is expected to continue. The market is expected to witness further acquisitions of small- and medium-sized chains. ABRAFARMA believes that further mergers among the leading pharmacy chains should also be expected in the mid-term.
Laboratorio Chile, Recalcine, Andrómaco, Saval and Bagó are the leading companies. Laboratorio Chile forms part of the Teva group. Recalcine forms part of Corporación Farmacéutica Recalcine (CFR), which launched an IPO in the Chilean Stock Exchange in May 2011. CFR acquired a 50.8% shareholding in the Canadian Uman and a 41.9% shareholding in the Vietnamese Domesco in November 2011. Andrómaco and Saval remain in local hands, whilst Bagó is the subsidiary of the Argentine Bagó group. Some local producers have been acquired in recent years; the Brazilian Eufofarma acquired Volta and Farmaindustria in December 2010; the Spanish subsidiary of the Italian pharmaceutical company Italfarmaco acquired Labomed in July 2009, and the German Fresenius Kabi acquired Sanderson in 2007.
Colombia has the fourth smallest pharmaceutical market in the Latin America region. The pharmaceutical 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.
Locally-produced drugs do not operate in a market as such, and therefore it is difficult to place a value on them. The 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 Americas region. Espicom projects a moderate CAGR in dollar terms between 2011 and 2016. The Cuban pharmaceutical market increased in value by five times in the 1995-2010 period.
Mexico aims to become a global leader in the regulation of biological and biosimilar medicines. A decree that reformed and updated the Regulation of Health Supplies (RIS) in terms of biological medicines was signed and published in the official bulletin (DOF) in October 2011. The new decree provides the legal requirements for any company interested in registering a biological or “biocomparable” drug in Mexico; Mexico has opted for using the “biocomparable” term rather than the most commonly used “biosimilar” term to define off-patent biologicals “comparable” with innovative biologics. The new decree will be enforced 180 days after its publication in the DOF; any registration requests for biological medicines remaining on the enforcement date will be resolved considering the requirements valid when the original submission took place.
The 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 1995 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 was 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. 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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