Argentina Pharmaceuticals and Healthcare Report Q2 2012

Business Monitor International's 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.

BMI View: Measured in local currency and in US dollars, the value of Argentina’s pharmaceutical market is expected to grow at double-digit rates over the five years to 2016, in large part due to inflationary pressure, even though the demand continues to grow. Risks to foreign players will remain elevated, on account of intellectual property (IP) regime shortcomings and especially the government’s support for state-operated domestic drugmakers, in a bid to reduce reliance on expensive imports. The over-the-counter (OTC) drug market will face new challenges in the shape of retail restrictions on sales of medicines outside pharmacies and anti-chain sentiment.

Headline Expenditure Projections
- Pharmaceuticals: ARS34.19bn (US$8.24bn) in 2011 to ARS40.12bn (US$9.33bn) in 2012; +17.4% in local currency terms and +13.3% in US dollar terms. US dollar forecast is slightly increased from Q112 due to exchange rate fluctuations.
- Healthcare: ARS161.68bn (US$38.96bn) in 2011 to ARS186.63bn (US$43.40bn) in 2012; +15.4% in local currency terms and +11.4% in US dollar terms. Absolute historical numbers have increased slightly from Q112 due to new data.
- Medical devices: ARS3.19bn (US$769mn) in 2011 to ARS3.76bn (US$874mn) in 2012; +17.7% in local currency terms and +13.6% in US dollar terms. Forecast up slightly from Q112 due to macroeconomic factors.

Risk/Reward Rating: Argentina again remains fifth in BMI’s Risk/Reward Ratings (RRRs) for the Americas in Q212 out of the 17 countries surveyed in the region. The country’s composite score of 59.7 out of 100 is mostly propped up by its favourable rewards profile, including the forecast steady annual growth of the pharmaceutical market’s value. Argentina’s risks will remain elevated on account of the persistent shortcomings of its IP regime and pharmaceutical pricing and procurement environment.

Key Trends And Developments

- In December 2011, leading global clinical supply chain service provider Marken said it will build a pharmaceutical depot in Buenos Aires. The depot will offer a full range of temperature controlled storage capabilities, supplementing its depots in Mexico and Singapore. The company aims to increase the supply of drugs to previously limited-supply areas, offering a novel service to clients.
- In November 2011, Canadian generic pharmaceutical company Apotex opened the first laboratory in Argentina to offer biosimilar medicines in the areas of neuroscience, cardiology and general line. The laboratory’s therapeutic efficacy has been approved by the Canadian health ministry and the US Food and Drug Administration (FDA) following bioequivalence and bioavailability tests. BMI notes that Argentine pharmacologists have emphasised the importance of biosimilar medicines and their bioequivalence tests in providing the same quality, therapeutic efficacy, potency, duration of action and safety as of the original drug.
- Despite having a highly capable domestic research sector and Latin America’s first clinical trials registry, Argentina has seen a decline in the number of drugmakers and clinical research organisations investing in early- and late-stage clinical trials. Faced with domestic challenges and regional competition, the country has faced difficulties maintaining its clinical trial sector since 2009. ClinicalTrials.gov reported that just 93 trials have been conducted in the year to the end of November 2011. While we believe previous government efforts helped promote Argentina as an attractive destination for clinical research, the recent policy trajectory will likely mean companies shift their research focus towards more lucrative neighbouring countries.

BMI Economic View: Although double-digit inflation continues to be one of the most severe economic problems in Argentina, we believe the issue has resonated less among voters, largely because of the government’s accommodative attitude towards unions. This has resulted in generous wage and pension increases in the last few years, though the sustainability of such a direction has been called into question.

Despite the Argentine economy’s strong resilience to global headwinds in 2011, we reiterate our view that growth is set to slow in 2012 due to a drag from net exports and moderation of private consumption and fixed investment. On the other hand, we expect Argentina’s domestic demand story to remain relatively healthy in 2012 as monetary and fiscal policies remain very expansionary and double-digit inflation will encourage consumers to spend rather than save their disposable income.

BMI Political View: We believe President Cristina Fernández will see her landslide victory in the October 2011election as an approval stamp on her handling of economic policy rather than an opportunity to implement the structural reform the country urgently needs to address its macroeconomic imbalances. As a result, we expect the government to continue to pursue heavy-handed growth-supporting policies.

Fernández will likely continue to resort to capital controls to avoid a devaluation of the currency, implementing only marginal adjustments to the government budget to bring the fiscal balance back into surplus in 2012. SHOW LESS READ MORE >

Executive Summary

SWOT Analysis
Argentina Pharmaceuticals And Healthcare Industry SWOT
Argentina Political SWOT
Argentina Economic SWOT
Argentina Business Environment SWOT

Table: Americas Pharmaceutical Risk/Reward Ratings, Q212

Rewards
Risks

Argentina – Market Summary

Regulatory Regime
OTC Regulation
Intellectual Property Environment
IP Disputes
Counterfeit Pharmaceuticals
Pricing Regime

Table: Pharmaceutical Price Build-Up
Table: Drug Price Freeze, 2005-2008
Reimbursement Regime
Other Regulatory Issues
Industry Trends And Developments
Epidemiology
Healthcare System
Healthcare Insurance
Medical Tourism
Medicinal Plants
Research And Development
Clinical Trials
Medical Devices
Industry Forecast Scenario
Overall Market Forecast

Table: Pharmaceutical Sales, 2008-2016
Key Growth Drivers – Industry

Table: Overall Healthcare Expenditure, 2008-2016
Table: Governmental Healthcare Expenditure, 2008-2016
Table: Private Healthcare Expenditure, 2008-2016

Key Growth Factors – Macroeconomic
Table: Argentina Economic Activity, 2011-2016

Prescription Drug Market Forecast
Table: Prescription Drug Sales, 2008-2016

Patented Drug Market Forecast
Table: Patented Drug Sales, 2008-2016

Generic Drug Market Forecast
Table: Generic Drug Sales, 2008-2016

OTC Medicine Market Forecast
Table: OTC Medicine Sales, 2008-2016
Table: Pharmaceutical Trade, 2008-2016

Medical Device Market Forecast
Table: Medical Device Sales, 2008-2016

Other Healthcare Forecasts
Key Risks To BMI’s Forecast Scenario
Competitive Landscape
Pharmaceutical Industry
Domestic Pharmaceutical Sector
Foreign Pharmaceutical Sector
Recent Company Developments
Vaccines Sector
Pharmaceutical Wholesale Sector
Retail Pharmacy Sector
Company Profiles

Local Companies
Roemmers
Laboratorios Bagó

Multinational Companies
Pfizer
Roche
Novartis
GlaxoSmithKline
Sanofi
Merck & Co
Boehringer Ingelheim

Country Snapshot: Argentina Demographic Data

Section 1: Population
Table: Demographic Indicators, 2005-2030
Table: Rural/Urban Breakdown, 2005-2030
Section 2: Education And Healthcare
Table: Education
Table: Life Expectancy, 2005-2030
Section 3: Labour Market And Spending Power
Table: Employment Indicators, 2001-2006
Table: Consumer Expenditure, 2000-2012 (US$)
Table: Average Annual Manufacturing Wages, 1995-2001
Glossary

BMI Methodology

How We Generate Our Pharmaceutical Industry Forecasts
Pharmaceutical Risk/Reward Ratings Methodology
Ratings Overview
Table: Pharmaceutical Risk/Reward Indicators
Weighting
Table: Weighting Of Components
Sources

- Roemmers
- Laboratorios
Bagó - Pfizer
- Roche
- Novartis
- GlaxoSmithKline
- Sanofi
- Merck & Co
- Boehringer Ingelheim