Central America Pharmaceuticals and Healthcare Industry Update Quarter 4 2011

Includes 3 FREE quarterly updates

BMI View: Uninitiated pharmaceutical firms and medical device companies will find Central America a challenging, but ultimately rewarding proposition. Industrial action is common, procurement is inefficient and healthcare policy implementation is often delayed. Positive aspects include increasing government commitment to the provision of medical services, improving regulations and increasing investment by multinational firms.

Headline Expenditure Projections
- Pharmaceuticals: US$3.02bn in 2011 to US$3.15bn in 2012; +6.9% in US dollar terms. Our forecast has been slightly upwards since Q312 due to improved macroeconomic factors.
- Healthcare: US$13.41bn in 2011 to US$14.57bn in 2012; +8.6% in US dollar terms. Our forecast has been revised upwards since Q312 due to improved macroeconomic factors.
Risk/Reward Ratings: In BMI's Q412 Pharmaceutical Risk/Reward Ratings (RRRs), based on our analysis and assessment of the market's appeal to pharmaceutical companies, the Americas region continues to rank second-lowest globally with a score of 49.2 out of 100, behind Western Europe (66), Asia Pacific (53) and Central and Eastern Europe (51), but ahead of the Middle East and Africa (44).
Of the seven Central American countries surveyed, only Guatemala’s RRR score has changed in Q412, down from 38.4 in Q212 to 36.9 this quarter.

Key Trends And Developments
- In July 2012, there was another case of healthcare worker industrial action in Central America. Over 2,800 doctors in Honduras went on strike over unpaid salaries and benefits, totalling HNL60mn (US$3.1mn). In addition, the physicians were seeking a 6.5% pay increase for this year.
- In July 2012, it emerged that supplies of the HIV/AIDS drug Truvada (tenofovir + emtricitabine) had been ‘exhausted’ in one of the main clinics in Quetzaltenago, Guatemala. A re-supply order had been dispatched to the supplier in India, but the stocks of medicine will not arrive until mid- September 2012. This situation underlines the need for improved pharmaceutical procurement methods in Central America.
- In July 2012, the Public Health Council (CSSP) in El Salvador announced that, in conjunction with raising fees paid by health professionals, it would conduct a census of health facilities in the country. It was alleged that many were operating illegally and did not have the correct licences.
This development is an example of the improving regulations in the region. - In June 2012, the member countries of the Bolivarian Alternative for the Peoples of Our America (ALBA), which includes Nicaragua, announced that they will purchase drugs together for the first time. This decision came as members seek to improve prices and access for essential medicines. Delegates from members finished the details of the purchase agreement at a summit organised in Nicaragua, presidential spokesperson Rosario Murillo said. The countries also plan to purchase medical technology together.
- In May 2012, Ferrer Grupo, a Spanish pharmaceutical company, introduced the polypill Trinomia in Guatemala at a price up to 50% cheaper than other similar drugs. The medicine is a combination of three drugs, ramipril, simvastatin and aspirin, recommended by the American Heart Association, the European Society of Cardiology and World Health Organization (WHO) for secondary prevention of cardiovascular disease. Trinomia was developed as an affordable medicine to target Latin American countries and was first commercially available in Guatemala in February 2010.
- In April 2012, Guatemala’s President Otto Pérez Molina launched a financial assistance programme entitled ‘Mi Bono Seguro’ (My Secure Bond), which will pay 0.75mn families living in poverty a one-time sum of GTQ600 (US$38) to access healthcare and/or education. This is another example of governments in Central America increasing their commitment to the provision of medical services.
BMI Economic/Political/Social View: Central America will remain heavily dependent on the performance of developed-state economies, particularly the US, which remains a major source of remittance flows and demand for exports. Drug-related violence and rising levels of insecurity will remain the major concern for most of the region's electorate, particularly elevated among the 'northern triangle' states of Guatemala, El Salvador and Honduras. The region's economic trajectory remains highly divergent, with Panama set to experience one of the fastest real GDP growth rates in the world over the next few years, whereas El Salvador and Honduras will struggle