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Chile Pharmaceuticals and Healthcare Report Q1 2011
Business Monitor International, Jan 2011, Pages: 84
The Chile 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 Chile's pharmaceuticals and healthcare industry.
Blessed with some of the world's largest reserves of natural resources, many of Latin America's major economies have long been reliant on commodity exports both to support domestic consumption and balance external accounts. The growing discrepancy between the value of commodity exports and production volumes is leaving many South American economies, and particularly Chile and its neighbour Peru, increasingly exposed to corrections in commodity prices. Moreover, BMI believes 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.
In BMI’s Q111 Business Environment Ratings (BERs) for the Americas, Chile receives a composite pharmaceutical rating of 50.8, placing the country eighth in the matrix. Future value growth will depend in part on the continued successful implementation of the 2007 Industrial Property Law and expected amendments, as well as the speed at which Chile aligns its regulations with its international obligations. Should new patent legislation be gradually tightened along the lines of the terms originally envisaged in the US free trade agreement (FTA), expenditure will rise considerably, local manufacturing costs will increase and market exclusivity will be better secured for original products. However, much depends on the government’s success in balancing its healthcare reforms, as well as the need to restrain cost growth on one side and fulfil its desire to placate its international trading partners on the other.
Pronounced social inequality has been the main characteristic of Latin American countries. However, with the increasing purchasing power of Chile's expanding middle class, BMI believes pharmaceutical sales will benefit from decreased reliance on the richest, providing reasonable sales growth potential in volume terms. Other factors contributing to market growth will be the expansion of the public sector reimbursement scheme (AUGE), and the rising enrolment in the Isapres health insurance programme.
In 2009, prescription drugs accounted for 76.7% of the total drug market, at a value of CL445.36bn (US$798mn), while the OTC medicines market reached a value of CLP135.06bn (US$242mn), representing 23.3%. In the same year, the patented drugs market reached a value of CLP409.37bn (US$734mn), accounting for 70.53% of the total drug market, while generic drug sales reached a value of CLP35.99bn (US$64mn), accounting for 6.2%. With a growing and ageing population, public sector health expenditure is expected to increase from CLP4,228bn (US$7.58bn) in 2009 to a value of CLP6,431n (US$13.89bn) in 2014, equating to a compound annual growth rate (CAGR) of 8.75% in local currency terms and 14.12% in US dollar terms over the 2009-2014 forecast period. Public sector health expenditure as a percentage of total health expenditure is expected to increase from 60.1% in 2009 to 63.0% by 2014, despite the government’s efforts to curb the rising healthcare costs.
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