Argentina's pharmaceutical market is expected to triple over the decade from around $5.6 billion in 2012 to $15 billion by 2020, according to research and consulting firm GlobalData.
Domestic companies outnumber major names
Domestic laboratories account for over 50% of the Argentine pharmaceutical market, including key companies such as Roemmers and Bago, while pharma giants such as Bayer, Novartis, Roche, Abbott and GlaxoSmithKline also operate in the country.
Domestic players have a competitive advantage in Argentina, as they are provided with government benefits such as favorable tariff protection, while raw material import costs historically undercut the transfer pricing generally applicable for multinationals.
The Argentine government enacted a law as part of the Health Emergency Act, enforcing physicians to include generic names of prescribed products, enabling pharmacies to use generic substitution. The resultant increase in generic sales led to the growth of Argentine generic drug manufacturers.
Argentina's regulations governing intellectual property rights have historically provided a distinct advantage to domestic companies, who were free to manufacture and sell products similar to patented versions. But since Argentina became a signatory of Trade Related Intellectual Property rights (TRIPS) and General Agreement on Tariffs and Trade (GATT), local manufacturers could be negatively affected by restrictions on the manufacture and sale of patented products (The Pharma Letter April 24).
However, Argentine pharmaceutical companies lack the vast production capacities of Chinese and Indian companies, and are unable to compete with lower prices offered by them. Argentina also faces competition from other Latin American countries such as Mexico and Brazil, who have strengthened their pharmaceutical industries over the last decade.
In addition, the R&D efforts of domestic pharmaceutical companies do not hold a fruitful history, and, although investment has increased over the past few years, no local players have been able to develop new chemical entities, making it difficult for domestic companies to compete with innovative multinationals.
Argentina is considered a favorable destination for cost-effective clinical trials within the Latin American region, and was one of the first Latin American countries to implement the recommendations of the WHOs Good Manufacturing Practices and Control standards, endorsing compliance to an international set of quality standards for pharmaceutical production. Clinical trial standards are also similar to the International Conference on Harmonization Good Clinical Practice (ICH-GCP) standards.
Argentina's ANMAT (Ministry of Heath) is responsible for drug regulation in the country, which has 42.6 million people according to CIA estimates. In 2013, the Argentine government added more than 200 additional drugs to the National Drug Traceability System, which track all drugs listed in the Register of Medical Specialties, and will require that agents of the National Health Insurance must certify the authenticity and traceability of drugs submitted for reimbursement. In addition, new reimbursement requirements from the Uniform Reimbursement System have been established for catastrophic diseases, which are those diseases of low incidence and high economic impact that require long term treatment, according to a report from health care advisory firm Decision Resources.
Decision Resources analyst Lulu Pickering said: "The Argentine pharmaceutical market accounts for about 13% of the Latin American pharmaceutical market, making it an important target for multinationals interested in the LATAM region of about 600 million people." (TPL May 31)
Sources: GlobalData, Decision Resources, CIA.
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