Boston, MA -- (ReleaseWire) -- 07/21/2012 -- BMI View: The attractiveness of Argentina's pharmaceutical market to drug companies is deteriorating due to the country's unsustainable macroeconomic trajectory and the resurgence of nationalism. The double-digit growth rates forecast over the five years through to 2016 are mainly driven by inflationary pressure, even though demand continues to grow. The intellectual property (IP) regime's shortcomings and especially the government's support for state-operated domestic drugmakers remain a threat to multinational pharmaceutical companies.
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Headline Expenditure Projections
- Pharmaceuticals: ARS37.91bn (US$7.58bn) in 2011 to ARS45.35bn (US$7.75bn) in 2012; +19.6% in local currency terms and +2.2% in US dollar terms. The US dollar forecast has increased since Q212 due to exchange rate fluctuations.
- Healthcare: ARS161.41bn (US$32.28bn) in 2011 to ARS187.77bn (US$32.08bn) in 2012; +16.3% in local currency terms and -0.6% in US dollar terms. Absolute historical numbers have decreased slightly from Q212 due to new data.
- Medical devices: ARS3.85bn (US$769mn) in 2011 to ARS4.65bn (US$794mn) in 2012; +20.9% in local currency terms and +3.3% in US dollar terms. Forecast up slightly from Q212 due to macroeconomic factors.
Risk/Reward Rating: Argentina again remains eighth in BMI's Pharmaceutical Risk/Reward Ratings (RRRs) for the Americas in Q312 out of the 17 countries surveyed in the region. The country's composite score of 52.2 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. Argentina has a quickly deteriorating business environment and there has been a resurgence of nationalism, which are factors that will deter interest in the market. The value of Argentina's pharmaceutical market is expected to grow at double-digit rates through to 2016 in local currency terms, though this is largely due to inflationary pressure.
Key Trends And Developments
- In March 2012, Corporacion Farmaceutica Recalcine invested US$20mn in a facility at the Pilar Industrial Park in Argentina. The new manufacturing plant will have initial capacity to produce 50mn units of injectable oncology drugs a year. The products, which are 20% cheaper than those from multinationals, will be distributed in Argentina and abroad. They will generate estimated revenue of US$20-30mn a year.
- In February 2012, the National Administration of Drugs, Food and Medical Technology (ANMAT) proposed a national pharmaceutical traceability scheme. This would allow full tracking of the medicine supply chain, from production to dispensation, to tackle the issues of counterfeit, stolen, unlicensed and other illegal medicines.
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