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Central America Pharmaceuticals and Healthcare Report Q1 2011
Business Monitor International, Nov 2010, Pages: 49
The Central America Pharmaceuticals and Healthcare Report provides industry professionals and strategists, corporate analysts, pharmaceutical associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Central America's pharmaceuticals and healthcare industry.
Long our favourite Central American economy from a growth perspective, Panama is fast becoming one of our favourites from a broader Latin American and even global perspective. Real GDP expansion of 6.3% y-o-y in the second quarter of 2010 has led BMI to revise up its full-year growth projection to 6.4% for 2010, and an even stronger 6.5% for 2011.
On the other hand, in El Salvador, where economic growth is now set to slow, fiscal sustainability concerns are again on the rise. With expenditures starting to tick up we are growing increasingly concerned about the state of the country’s public finances. In Guatemala's case, the situation is so bad that President Alvaro Colom has said the country's public services could collapse in a short space of time. BMI’s Country Risk team maintains their view that narcotic-related crime in Central America is set to increase in the medium term. The current level of political instability and structural shortcomings are factors limiting growth
of the regional pharmaceutical industry, which means that full investment potential will not be realised in the short-term.
As illustrated above, the region’s heterogeneous macroeconomic performance means that Central America is the riskier market for multinational pharmaceutical companies looking to expand in Latin America. Encouragingly, the region’s long-term prospects are forecast to improve. In 2010, BMI noted marginal but important improvements in levels of bureaucracy, corruption and transparency of legal frameworks.
With the pharmaceutical market value of all seven countries – Costa Rica, Panama, El Salvador, Guatemala, Honduras, Nicaragua and Belize – combined, Central America represents the sixth largest market in Latin America. In Q111, the region is expected to experience growth in pharmaceutical sales. BMI forecasts the region’s total pharmaceutical market value to reach US$2.68bn by the end of 2011 – a 7.2% increase from US$2.35bn estimated for 2010. BMI projects a pharmaceutical sales compound annual growth rate (CAGR) of 7.3% over a five-year period, and 8.2% over a ten-year period, with pharmaceutical sales expected to reach US$5.14bn by 2019.
Individually, most of the countries are secondary or even tertiary emerging markets for pharmaceuticals. Market access is challenging, mainly because the seven countries that comprise Central America lack regional harmonisation with respect to approvals, pricing and reimbursement.
The potential for market growth in the region is limited in comparison with other Latin American regions, due to low pharmaceutical per-capita spending and the large proportion of the population on low incomes. Governments face high burdens of communicable and preventable diseases, including malnutrition, dengue fever, malaria and relatively high incidences of other curable diseases. Diplomatic and nongovernmental donations remain common vehicles for improvements in healthcare in the region.
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