Argentina's pharmaceuticals market is forecast to grow from a value of around US$5.6 billion in 2012 to $15 billion by 2020, according to new research.
This fast growth will be driven by a strong presence of domestic manufacturers, high-quality production capabilities and favourable clinical trial regulations, says the report, which is published by research and consulting firm GlobalData.Domestic manufacturers currently account for over 50% of the Argentine drugs market, and key players here include Roemmers and Bago, while multinationals such as Bayer, Novartis, Roche, Abbott and GlaxoSmithKline also operate in the country.
The trend towards domestic pharmaceutical production has existed for several decades in Argentina, the report notes. Local players are provided with government benefits such as favourable tariff protection, while the costs of raw materials imports historically undercut the transfer pricing which is generally applicable for multinationals, thus giving domestic players a competitive advantage in their home market.
Also, the generic drug sector in Argentina has grown, their sales having increased as a result of legislation included in the Health Emergency Act; this mandates that physicians must include the generic names of prescribed drug products, which allows for generic substitution by pharmacists.
In the past, Argentina's regulations governing intellectual property rights have also provided a distinct advantage to domestic companies, which were free to manufacture and market products similar to patented versions. However, since the country became a signatory to the World Trade Organisation (WTO)'s Trade-Related Aspects of Intellectual Property Rights (TRIPs) agreement and the General Agreement on Tariffs and Trade (GATT), local manufacturers may now be negatively affected by restrictions on the manufacture and sale of patented products.
But the country is also regarded as a favourable destination for cost-effective clinical trials within Latin America, and was one of the first nations in the region to implement the recommendations of the World Health Organisation (WHO)'s Good Manufacturing Practice (GMP) and Control standards, endorsing compliance to an international set of quality standards for pharmaceutical production. Clinical trial standards in the country are also similar to those of the International Conference on Harmonisation - Good Clinical Practice (ICH-GCP).
However, Argentina's pharmaceutical industry faces a number of barriers, the report goes on to note. For example, domestic players lack the vast production capacities of Chinese and Indian manufacturers, and are unable to compete with the lower prices which these firms are able to offer.
Argentina also faces stiff challenges from other Latin American countries such as Mexico and Brazil, which have strengthened their pharmaceutical industries over the last decade, it says.
In addition, the R&D efforts of Argentine drugmakers have not proved fruitful, and although investment has increased over the last few years, no local player has proved capable of developing New Chemical Entities (NCEs), which makes it difficult for domestic firms to be competitive with innovative multinational drugmakers.
GlobalData also predicts that the market for medical devices in Argentina will grow at a more modest rate that pharmaceuticals, increased from a value of around $1.7 billion last year to $2.4 billion by 2020.