The Pharmaceutical Market

Summary

Espicom's in-depth pharmaceutical market reports are ideal for executives wanting to understand the key drivers in pharmaceutical markets and have access to a wealth of statistical data. Each report opens with an outlook section that provides analysis of the market, 5-year market forecasts, national data projections, market outlook and key developments such as regulation, pricing/reimbursement, intellectual property, health facilities and government policy. The report also provides extensive background information, population trends, health status, health expenditure, organisation & administration, hospital services, medical personnel, healthcare development, market access information, trade data for raw materials and finished products and essential industry contacts. Included with the report are 3 free quarterly updated outlook reports, enabling you to keep up to date with market developments for a year.

The Chilean pharmaceutical market is the sixth largest market in the region, after Mexico, Brazil, Argentina, Venezuela and Colombia. The pharmacy sector is very competitive due to the presence of a well-developed domestic industry specialised in generic and copycat products, which supplied 60.1% by value and 81.8% by volume of the pharmacy sector in 2005. The hospital sector has increased in value terms, since the Ministry of Health initiated the health reform and launched programmes such as AUGE, which provides universal access for ailments not previously covered. The pharmacy sector was valued at over US$800 million at manufacturers' prices in 2006. LabChile continues to be the leading producer. Other leading producers include Recalcine, Saval and Andrmaco. LabChile was acquired by IVAX in 2001 but is currently owned by Teva, following Teva's acquisition of IVAX. In March 2005, Andrmaco acquired Silesia, further consolidating the sector. The largest producers meet GMP standards but smaller producers have not fully complied. Bioequivalence standards are not compulsory yet although tests are being performed on selected active ingredients. Pharmacy prices are still among the lowest in the region, at an average of US$3.9 in 2005. The pharmacy chains Cruz Verde, Farmacias Ahumada and SalcoBrand control around 90% of the pharmacy sector. As the distribution channel is so consolidated, these pharmacy chains are engaged in aggressive price wars. They also practice own-label production, vertical distribution and product & market diversification. For instance, Farmacias Ahumada operates in Mexico and Peru, although market entry in Brazil has been unsuccessful. In the Chilean hospital sector, CENABAST centralises expenditure on pharmaceuticals. In January 2004, an Ethics Code (Cdigo de tica) was enforced to solve discrepancies between national and foreign producers, in terms of regulation, consumer rights, respect to the industry, competition and advertising. Under the Chilean Industrial Society (SOFOFA - Sociedad de Fomento Fabril), an Ethics Commission was also created to act as intermediary. The Ethics Code is based on SOFOFA's ethical regulations and regulations issued by the Chilean Association of Advertising Agencies (ACHAP - Asociacin Chilena de Agencias de Publicidad). Between 1999 and 2004, a new patent law was under debate to bring Chilean patent law in line with international standards, including TRIPS compliance. The law should have been enforced in January 2000 according to the WTO-imposed deadline, but was fiercely resisted by domestic producers. Finally, the Chamber of Deputies and the Senate approved the modifications to Law No. 19,039 in November 2004. The new Law No. 19,996 was published in the official bulletin (DO - Diario Oficial) in March 2005. Nevetheless, the United States Trade Representative (USTRP) placed Chile on the 2006 Watch List.

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