Argentine GDP growth bodes well for health care and drug spending, says BMI

Argentina's economy is poised for another strong year of growth in 2011, and Business Monitor International is revising up it real Gross Domestic Product (GDP) growth forecast to 4.6% year-on-year from 4.1% previously. While the domestic consumer will lead the way in terms of driving growth, exports and fixed investment will provide increasingly important supporting roles, helping to ensure broad-based growth over the medium term.

This strong economic outlook also bodes well for the shape of the country's health care spending, half of which is provided through public sources, as well as pharmaceutical expenditure. In fact, the government share in the overall healthcare expenditure is forecast to continue rising over the coming years, which should also have a beneficial effect on the use of medicines.

However, Argentina does have a risky profile in terms of investment, which has once again resulted in the country ranking sixth in BMI’s regional Business Environment Ratings (BERs) for second-quarter 2011. This is indicative of the challenging intellectual property (IP) and pharmaceutical pricing and procurement environments. While the economic recovery should mitigate some of those risks, multinationals are likely to prioritize other Latin American destinations for their pharmaceutical investments.