Healthy competition

Local and multinational pharma companies battle for LatAm market share.

Local and multinational companies are jostling for a position in Latin America’s growing pharmaceuticals market and the prize is a big one. Brazil’s pharmaceutical market alone is worth some USD 21 billion with Mexico a distant second at USD 7.4 billion and Argentina rounding out the top three with a pharmaceutical market value amounting to USD 4.79 billion.

Pfizer, GSK, Sanofi etc are battling it out with the locals including NeoQuímica, Climed and EMS in Brazil, Grupo Invekra in Mexico and Laboratorios Gador in Argentina. A local executive in the pharmaceutical sector explained, “While local pharmaceutical companies are competing with the multinationals, it is pertinent to point out that their strength is the sale of high-spectrum, over-the-counter drugs and not highly specialised drugs.”

“While local pharmaceutical companies are competing with the multinationals, it is pertinent to point out that their strength is the sale of high-spectrum, over-the-counter drugs and not highly specialised drugs.”

Executive in the pharmaceutical sector, Mexico

Both local and multinational pharmaceutical companies face similar challenges in the region: registration requirements, logistics, supply maintenance and country-specific regulations hinder the development and expansion of the pharmaceutical industry across Latin America.

In Mexico, an industry executive bemoaned a lack of government support as one of the biggest challenges facing the industry, “The relationship with the government is rather ambiguous, it is not that it is bad but it is not close enough to push common agendas. As a result it is complex to work through regulatory issues, drug approvals, drug marketing etc.”

“The relationship with the government is rather ambiguous, it is not that it is bad but it is not close enough to push common agendas. As a result it is complex to work through regulatory issues, drug approvals, drug marketing etc.”

Executive, pharmaceutical sector, Mexico

Governments in Latin America offer little support in general as health initiatives suffer from chronic public underfunding. The multiplicity of actors and a lack of a comprehensive vision of health individual, communities and industry, limits even the access of local pharmaceutical companies in their own markets, according to the United Nations Economic Commission for Latin America and the Caribbean (“CEPAL”). Furthermore, only 57% of total health expenditure in Latin America comes from public sources and private health expenditure eases the path for multinational companies to consolidate their presence in the region.

This lack of support is perfectly illustrated with tensions between local pharmaceutical companies and the government in Mexico after President Andrés Manuel López Obrador decided to acquire medicines abroad, affirming that it would reduce corruption in tenders.

Another major obstacle facing local pharmaceutical companies is a lack of talent as the pharmaceutical executive in Mexico highlighted, “There is no interest in supporting the next generation of scientists in Latin America. In fact, the regions most talented scientists tend to leave and join the major multinational drug companies in the US and Europe. We need to support local talent and incentivise them to stay if we are to develop a proper pharmaceutical industry. It all starts with the scientists.”

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