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Argentina Pharmaceuticals and Healthcare Report Q2 2011
Business Monitor International, Feb 2011, Pages: 99
The Argentina 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 Argentina's pharmaceuticals and healthcare industry.
Argentina's economy is poised for another strong year of growth in 2011, and we are revising up our real GDP growth forecast to 4.6% year-on-year (y-o-y) from 4.1% previously. While the domestic consumer will lead the way in terms of driving growth, exports and fixed investment will provide increasingly important supporting roles, helping to ensure broad-based growth over the medium term. This strong economic outlook also bodes well for the shape of the country’s healthcare spending, half of which is provided through public sources, as well as pharmaceutical expenditure. In fact, the government share in the overall healthcare expenditure is forecast to continue rising over the coming years, which should also have a beneficial effect on the use of medicines.
However, Argentina does have a risky profile in terms of investment, which has once again resulted in the country ranking sixth in the publishers regional Business Environment Ratings (BERs) for Q211. This is indicative of the challenging intellectual property (IP) and pharmaceutical pricing and procurement environments. While the economic recovery should mitigate some of those risks, multinationals are likely to prioritise other Latin American destinations for their pharmaceutical investments.
We calculate that the country’s pharmaceutical market reached a value of ARS17.22bn (US$4.42bn) in 2010, representing a compound annual growth rate (CAGR) of 20.30% in local currency over the 2005-2010 historical period. We expect the total value of the drug market to continue growing over the coming years, posting a ten-year CAGR of 14.26% in local currency terms. In 2020, the value of the market is therefore expected to top ARS65.32bn (US$12.81bn), thus almost tripling in US dollar terms. Key drivers of this will be volume- and epidemiology-based, while the higher uptake of generics will also shape the market’s growth.
Foreign players also seem to see this potential in the Argentine generics market. To this end, German HELM purchased a 30% stake in Argentine pharmaceutical company Amarin Technologies in December 2010. The stake purchase will enable HELM's pharmaceutical division to enter the generic transdermal products market, which has promising growth potential. Through this cooperation with HELM, Amarin will gain access to international markets.
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