Argentina Pharmaceuticals and Healthcare Industry Update Quarter 3 2012

  • June 2014
  • -
  • Business Monitor International
  • -
  • 128 pages

Includes 3 FREE quarterly updates

BMI View: The attractiveness of Argentina’s pharmaceutical industry to drug industry players is deteriorating due to the country’s unsustainable macroeconomic trajectory and the resurgence of nationalism. The double-digit growth rates projection over the five years through to 2016 are mainly driven by inflationary pressure, even though demand continues to grow. The intellectual property (IP) regime’s shortcomings and especially the government’s support for state-operated domestic drugmakers remain a threat to multinational pharmaceutical firms .

Headline Expenditure Projections
- Pharmaceuticals: ARS37.91bn (US Dollar 7.58bn) in 2011 to ARS45.35bn (US Dollar 7.75bn) in 2012; +19.6% in local currency terms and +2.2% in US dollar terms. The US dollar projection has increased since Q212 due to exchange rate fluctuations.
- Healthcare: ARS161.41bn (US Dollar 32.28bn) in 2011 to ARS187.77bn (US Dollar 32.08bn) in 2012; +16.3% in local currency terms and -0.6% in US dollar terms. Absolute historical numbers have decreased slightly from Q212 due to new data.
- Medical devices: ARS3.85bn (US Dollar 769mn) in 2011 to ARS4.65bn (US Dollar 794mn) in 2012; +20.9% in local currency terms and +3.3% in US dollar terms. Projection up slightly from Q212 due to macroeconomic factors.
Risk/Reward Rating: Argentina again remains eighth in BMI’s Pharmaceutical Risk/Reward Ratings (RRRs) for the Americas in Q312 out of the 17 countries surveyed in the region. The country’s composite score of 52.2 out of 100 is mostly propped up by its favourable rewards profile, including the projection steady annual growth of the pharmaceutical industry ’s value. Argentina’s risks will remain elevated on account of the persistent shortcomings of its IP regime and pharmaceutical pricing and procurement environment. Argentina has a quickly deteriorating business environment and there has been a resurgence of nationalism, which are factors that will deter interest in the industry . The value of Argentina’s pharmaceutical industry is expected to grow at double-digit rates through to 2016 in local currency terms, though this is largely due to inflationary pressure.

Key Trends And Developments
- In March 2012, Corporación Farmacéutica Recalcine invested US Dollar 20mn in a facility at the Pilar Industrial Park in Argentina. The new manufacturing plant will have initial capacity to produce 50mn units of injectable oncology drugs a year. The products, which are 20% cheaper than those from multinationals, will be distributed in Argentina and abroad. They will generate estimated revenue of US Dollar 20-30mn a year.
- In February 2012, the National Administration of Drugs, Food and Medical Technology (ANMAT) proposed a national pharmaceutical traceability scheme. This would allow full tracking of the medicine supply chain, from production to dispensation, to tackle the issues of counterfeit, stolen, unlicensed and other illegal medicines.
- In February 2012, the Minister of Health for Santa Fe province, Miguel Angel Cappiello, said Laboratorio Industrial Farmacéutico (LIF) will produce over 9.5mn paracetamol 500mg tablets to supply the Remediation Programme of the Nation. The production target aims to cover the entire needs of the province and is intended to provide relief from dengue fever symptoms. BMI believes the government’s plan will have limited success as a similar resolution for more public production was not enforced by the Ministry of Health in 2008. In addition, the new law will further prevent the industry from arranging resources efficiently and will actually prevent low-cost drugs from reaching consumers, as competition between state-run and private pharmaceutical industry players has been distorted.
- In January 2012, French supermarket chain Carrefour completed the sale of its five pharmacies in Argentina to a group of independent pharmacists, four years after entering the industry . The firm ’s ambitious plan of having a network of pharmacies and playing a significant role in the Argentine retail pharmacy segment was hindered by local laws and policies, which prevent pharmacy concentration in terms of geography and industry share. BMI Economic View: Argentina’s unsustainable macroeconomic trajectory will continue to pose moderate risks to the country’s commercial banking segment . While low levels of penetration suggest financial institutions have great potential for growth in the country, we believe double-digit inflation and the government’s interventionist policies will continue to undermine the market ’s performance in the short term.
BMI Political View: Over the past few months, we have consistently highlighted that the government’s interventionist economic policies pose a significant risk to industry players operating in strategic markets in the country, particularly in the oil and gas segment . While much of the attention so far has been focused on oil industry player YPF following reports that the authorities were discussing outright nationalisation of the firm, we reiterate our view that risks remain elevated across the segment and the government could grow its reach to other players as well

Table Of Contents

Executive Summary . 6
Industry SWOT Analysis 8
Argentina Pharmaceuticals And Healthcare Industry Environment and Risk Analysis 8
Argentina Political Environment and Risk Analysis . 9
Argentina Economic Environment and Risk Analysis . 10
Argentina Business Environment SWOT .. 11
Pharmaceutical Risk/Reward Ratings . 12
Data : Americas Pharmaceutical Risk/Reward Ratings, Q312 12
Rewards ... 13
Risks . 13
Argentina - Industry Summary ... 15
Regulatory Regime 16
OTC Regulation ... 17
Intellectual Property Environment ... 18
IP Disputes .. 21
Counterfeit Pharmaceuticals ... 22
Pricing Regime 24
Data : Pharmaceutical Price Build-Up 24
Data : Drug Price Freeze, from 2005 to 2008 . 25
Reimbursement Regime 26
Other Regulatory Issues ... 26
Industry Trends And Developments 28
Epidemiology ... 28
Healthcare System ... 29
Healthcare Insurance ... 30
Medical Tourism .. 31
Medicinal Plants .. 31
Research and Development . 32
Clinical Trials .. 32
Medical Devices ... 34

Market Projection Scenario .. 36
Overall Industry Projection .. 36
Data : Pharmaceutical Sales, from 2008 to 2016 37
Key Growth Factors - Market 38
Data : Healthcare Expenditure, from 2008 to 2016 . 39
Data : Government Healthcare Expenditure, from 2008 to 2016 . 39
Data : Private Healthcare Expenditure, from 2008 to 2016 40
Key Growth Factors - Macroeconomic ... 41
Data : Argentina Economic Activity, from 2011 to 2016 . 44
Prescription Drug Industry Projection . 45
Data : Prescription Drug Sales, from 2008 to 2016 . 46
Patented Drug Industry Projection .. 47
Data : Patented Drug Sales, from 2008 to 2016 .. 48
Generic Drug Industry Projection 49
Data : Generic Drug Sales, from 2008 to 2016 50
OTC Medicine Industry Projection .. 51
Data : OTC Medicine Sales, from 2008 to 2016 .. 52
Pharmaceutical Trade Projection ... 53
Data : Pharmaceutical Trade, from 2008 to 2016 ... 56
Medical Device Industry Projection . 57
Data : Medical Device Sales, from 2008 to 2016 . 58
Other Healthcare Projections . 59
Key Risks To BMI’s Projection Scenario 59

Competition Overview 61
Pharmaceutical Market .. 61
Domestic Pharmaceutical Segment . 62
Foreign Pharmaceutical Segment ... 63
Recent Firms Developments ... 65
Vaccines Segment 66
Pharmaceutical Wholesale Segment 67
Retail Pharmacy Segment ... 68
Company Profiles .. 71
Local Firms .. 71
Roemmers 71
Laboratorios Bagó ... 74
Multinational Firms .. 77
Pfizer 77
Roche ... 79
Novartis ... 81
GlaxoSmithKline .. 83
Sanofi ... 85
Merck and Co . 87
Boehringer Ingelheim .. 89
Demographic Outlook ... 91
Data : Population By Age Group, 1990-2020 (‘000) ... 92
Data : Population By Age Group, 1990-2020 (% of total) ... 93
Data : Key Population Ratios, 1990-2020 ... 94
Data : Rural And Urban Population, 1990-2020 . 94
Glossary . 95
BMI Methodology ... 97
How We Generate Our Pharmaceutical Market Projections 97
Pharmaceutical Risk/Reward Ratings Methodology 98
Ratings Overview . 98
Data : Pharmaceutical Risk/Reward Indicators .. 99
Weighting ... 100
Data : Weighting Of Components .. 100
Sources .. 100

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