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Peru Pharmaceuticals and Healthcare Report Q1 2011
Business Monitor International, Dec 2010, Pages: 79
Peru 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 Peru's pharmaceuticals and healthcare industry.
Recently released central bank data shows that the Peruvian economy continues to expand at a rapid rate, growing by 8.94% year-on-year (y-o-y) in August 2010 and confirming our bullish outlook for the country. Growth rates are continuing to tick down gradually from the blistering 12% posted in June, but we expect economic expansion to remain robust over the coming years, largely on the back of booming commodity prices and strengthening domestic consumption. Real GDP growth is forecast at 7.8% in 2010 and 5.8% in 2011, respectively, which will provide a solid base for continued investment in the country’s healthcare sector. This, in turn, should boost access to pharmaceuticals, both in volume and value terms.
For 2010, we expect per-capita pharmaceutical expenditure in Peru will post a 20% y-o-y increase, to reach a still very modest US$42.5, which indicates long-term potential. Overall, Peru remains an average regional market in terms of its attractiveness to foreign companies. In BMI’s Pharmaceuticals & Healthcare Business Environment Ratings (BERs) for Q111, Peru is again ranked ninth of the 17 markets now surveyed in the Americas matrix. However, its position is expected to improve markedly in the longer term, due to a combination of demographic, economic and trade factors.
Presently, however, Peru’s intellectual property (IP) environment represents one of the major drawbacks to the involvement of foreign companies, although this area is expected to improve in light of the increasing trade links with developed markets.
At consumer prices, Peru’s pharmaceutical market was valued at just over PEN3bn (US$1bn) in 2009, with a 12.8% y-o-y increase forecast for 2010. Over the 2009-2014 forecast period, the value of the market is expected to post a compound annual growth rate (CAGR) of 9.75%, reaching PEN4.9bn (US$1.9bn). However, the growing discrepancy between the value of commodity exports and production volumes is leaving many South American economies, and particularly Peru and Chile, increasingly exposed to a correction in commodity prices. The increasing bias towards extractive industries is coming at the cost of developing the manufacturing sector, potentially weighing on the region's long-term economic development, which also carries significant downside risks for our healthcare and pharmaceutical forecasts.
Multinationals are expected to mostly remain active in Peru through imports and – more recently – clinical trials. Increasingly, however, Indian companies are showing interest in investing in different sectors in Peru, including the medicines industry. The companies are reportedly looking to enter various joint ventures (JV) to strengthen their business links with pharmaceutical and other sectors in Peru.
The governments have discussed the possibility of signing multiple agreements that could include a bilateral free trade agreement (FTA).
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