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Chile Pharmaceuticals and Healthcare Report Q1 2012
Business Monitor International, Jan 2012, Pages: 89
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.
- Benchmark BMI’s Independent 5-year Pharmaceutical and Healthcare Industry Forecasts on Chile to test other views - a key input for successful budgeting and strategic business planning in the Chile pharmaceutical and healthcare market.
- Target Business Opportunities & Risks in the Chile Pharmaceutical and Healthcare Sector through our reviews - and major deals, projects and investments in Chile.
- Exploit The Latest Competitive Chile Pharmaceutical and Healthcare Intelligence & company SWOTS on your competitors and peers through company rankings by sales, market share and ownership structure – includes multi-national and national companies in Chile.
BMI View: At a value of CLP1,381bn (US$2.71bn), drug expenditure in Chile represented 1.32% of GDP in 2010, while per capita spending reached an estimated US$158. Chile’s economic development is forecast to experience steady modest growth. Fiscal expenditure will increase and real GDP growth is expected to come in at 5.9% in 2011, providing a solid foundation for the further growth of healthcare and pharmaceutical expenditure. In addition to healthcare modernisation and economic growth, another driver of Chile’s pharmaceutical market growth is its ageing population and the increasing disease burden, especially of non-communicable conditions.
Headline Expenditure Projections
- Pharmaceuticals: CLP1,381bn (US$2.71bn) in 2010 to CLP1,449bn (US$3.12bn) in 2011; +5.0% in local currency terms and +15.0% in US dollar terms. Forecast unchanged from Q411.
- Healthcare: CLP8,320bn (US$16.33bn) in 2010 to CLP9,252bn (US$19.90bn) in 2011; +11.2% in local currency terms and +21.8% in US dollar terms. Forecast up slightly from Q411 due to macroeconomic factors.
- Medical devices: CLP248.42bn (US$488mn) in 2010 to CLP256.33bn (US$551mn) in 2011; +3.2% in local currency terms and +13.1% in US dollar terms. Forecast down from Q411 due to changes to historical data and trends.
Business Environment Rating: In Q112, Chile remains in an eighth position in the Americas matrix of 17 countries. Its composite rating figure again stands at 55.2 out of 100, with the scores stronger on the rewards side than the risks side. We expect Chile to climb up the regional matrix over the coming years as operational risks become addressed. Globally, Chile is 44th out of the 95 countries surveyed in total.
Key Trends And Developments
- In November 2011, the US Pharmacopeial Convention (USP) signed a memorandum of understanding with the Chilean Pharmacopoeia Foundation (CPF). The agencies have agreed to develop reference testing material and exchange scientific information, as well as increasing awareness about the quality and safety of medicines. The USP has signed several deals in 2011, including with similar groups in Brazil and Russia.
- Around the same time, the executive president of the Chamber of the Pharmaceutical Industry (CIF) dismissed calls to introduce bioequivalence standards across Chile’s generic drug sector, as it would ultimately lead to an increase in the price of generic drugs. Chilean generic drugmakers see the bill proposing the standards as an attempt to appease international drugmakers, which have long complained about Chilean manufacturers producing nonequivalent, ‘me-too’ drugs.
- In September 2011, a Ministry of Health audit of Chile’s private insurance companies left Isapres de Chile facing 12 fines totalling CLP109mn (US$222,500). Most of the penalties related to the company’s insurance practices. The investigation followed public complaints that Isapres de Chile was withholding patient benefits despite reporting record profits. Public outrage has prompted the Ministry of Health to confront private insurers, warning that the government is willing to fine companies that challenge the country’s consumer protection laws. Health officials have also called on parliament to establish an agency to calculate and monitor risk adjustments. BMI Economic View: We are sticking to our below-consensus Chilean real GDP growth forecast of 5.9% for 2011 as we believe declining exports, combined with a moderation of private consumption and gross fixed investment, will weigh down the headline growth figure. Given the strength of the authorities’ growth-supporting policy arsenal, however, we are happy to be above consensus for 2012 and forecast real GDP growth at 4.8%. Nevertheless, we believe government consumption will remain low in 2012, in line with the Piñera administration’s fiscal consolidation plans. While we think Chile’s sovereign wealth fund will provide the authorities with a sufficient fiscal buffer to prevent a sharp deterioration of economic growth in 2012, we believe the effect of an increase in public spending on growth will be relatively limited, given that we expect government consumption to contribute only 0.4 percentage points (pp) to GDP growth in 2011.
BMI Political View: While we expect political and economic stability to prevail in Chile, President Sebastián Piñera will continue to face strong opposition in 2012. Even though the opposition leftwing coalition has so far failed to win the hearts and minds of protesters, we believe a further deterioration of global economic conditions could channel the widespread discontent into a concrete political threat to the government. Our view that 2011 would be a tough year for Piñera has played out, as the boost in public support Piñera received after the devastating earthquake of 2010 soon gave way to growing dissatisfaction with the government’s policies. Chileans seem to be gradually losing confidence in the administration’s ability to implement structural reforms in key areas such as education and healthcare.
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