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Peru Pharmaceuticals and Healthcare Report Q1 2012
Business Monitor International, Jan 2012, Pages: 93
Business Monitor International's 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.
BMI View: Despite its steady growth over the past decade, Peru remains a relatively small pharmaceutical market – valued at no more than US$1.1bn in 2010 – despite the population size nudging 30mn. Risks remain elevated, primarily in relation to of intellectual property (IP) standards and pricing and reimbursement issues, especially as private sources cover as much as 40% of total annual healthcare spending. BMI, nevertheless, envisage steady year-on-year (y-o-y) growth in pharmaceutical expenditure through to 2015, mostly on account of volume demand due to population growth.
Headline Expenditure Projections:
- Pharmaceuticals: PEN3.07bn (US$1.09bn) in 2010 to PEN3.35bn (US$1.22bn) in 2011; +9.3% in local currency terms and +11.4% in US dollar terms. Forecast up significantly from Q411 due to analyst intervention based on industry expectations.
- Healthcare: PEN18.42bn (US$6.57bn) in 2010 to PEN19.39bn (US$7.05bn) in 2011; +5.2% in local currency terms and +7.4% in US dollar terms. Local currency forecast unchanged from Q411.
- Medical devices: PEN858mn (US$306mn) in 2010 to PEN896mn (US$326mn) in 2011; +4.4% in local currency terms and +6.5% in US dollar terms. Forecast down significantly from Q411 on the basis of new historic data and analyst intervention.
Business Environment Rating: Peru’s composite score for Q112 is 6.9% higher quarter-on-quarter (q-oq). At 46.2 out of 100, the score puts Peru in a slightly improved ninth position out of the 17 countries surveyed in BMI's Pharmaceutical and Healthcare Business Environment Ratings (BERs) matrix for the Americas. Peru’s risk and reward profiles are very evenly balanced, indicating a market in transition. Globally, Peru is 61st out of the 95 markets surveyed in BMI's pharmaceuticals universe, above Egypt and below Indonesia.
Key Trends And Developments:
The Union of South American Nations (Unasur) will work with Peru on the development of public health strategies, the president of the Unasur health council said in September 2011. The cooperation will focus on social inclusion at all levels of government, which is one of the important policies of the Peruvian president.
By August 2011, following the inspection of manufacturing facilities in China, only three Chinese drug manufacturing facilities have been granted Peruvian good manufacturing practice (GMP) certificates, with inspections at other companies ongoing. The Peruvian authorities also said 70 Chinese drug manufacturing facilities without appropriate GMP certification can no longer sell medicines in the country. Of the companies, 69 did not apply for certification in time and one failed to meet quality standards. Peru previously accepted GMP certificates from the manufacturer’s country of origin but the Ministry of Health now demands Peruvian certification standards exclusively. Indian drugmakers were expected to register for inspections by July 2011.
This inspection of country-of-origin manufacturing standards will help to improve drug safety but will also likely delay market access.
BMI Economic View: In response to a gloomy global economic outlook, the government approved a PEN1.6bn stimulus programme in October 2011 to buoy the economy, following PEN890mn worth of stimulus spending in September. BMI expects this will be heavily tilted towards construction projects to boost public sector works and improve infrastructure. BMI believes the stimulus plan will pose upside risks to its 6.2% real GDP growth forecast for 2011, which would also improve prospects for public sector and services funding in the coming years. BMI forecasts government revenue to rise to PEN91.4bn in 2011 and PEN95.9bn in 2012 on the back of rising sales tax revenue.
BMI Political View: President Ollanta Humala, who took office in July 2011 pledging to fight political corruption, has faced his first scandal as his vice president, Omar Chehade, has been accused of influence peddling. This could weaken the integrity of the president’s tough stance on corruption – he replaced twothirds of the country’s most senior police officers to purge alleged widespread corruption – though he still had a 62% popular approval rating in an Ipsos-Apoyo survey in October. BMI expects policy continuity in Peru, which bodes well for healthcare services improvements.
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