Key Tendencies In the Drug Industry: A Chilean View

Emilio Valdatta, head of Chile's Laboratorio Maver, outlined 10 key factors affecting the pharmceutical industry in his paper on key tendencies in the industry, which he gave at the 11th Latin American Pharmaceutical Industry Symposium held last month in Asuncion, Paraguay.

Speaking from a Latin American standpoint, Mr Valdatta said that corporate consolidation is a key element. Products are being introduced that gain a large market share in their therapeutic area. This results in the need for economies of scale, which can only be achieved by the merger of two or more firms, and this means further concentration of the industry.

Secondly, he identified five forces that lead to mergers, acquisitions, strategic alliances and joint ventures. These are: economies of scale, principally in distribution and R&D; cost reduction to eliminate the duplication of functions; maturing markets and the costs of growth, which motivate companies to acquire market share; product and marketing strategies; and a decline in the rate of innovation.