The eight leading pharmaceutical markets in Latin America will grow by an average of 9.9% each year to 2014, by which time they will be worth a combined $80 billion at retail prices, says a new report.

The eight markets - Argentina, Brazil, Chile, Colombia, Cuba, Mexico, Peru and Venezuela - together have a population of 474 million people and their combined Gross Domestic Product (GDP) totaled $3.4 trillion last year, says the report, from Espicom.

The region’s economic growth is expected to slow down this year and next after a recent period of remarkable growth, it notes. Domestic pharmaceutical production represents about half of the region’s market and imports are worth over $10 billion, but low exports contribute to a deficit in the pharmaceutical balance of trade of $7 billion. Public-sector access to medicines has increased, particularly among the least well-off, with initiatives such as Remediar in Argentina, PAC Saude in Brazil, Auge in Chile, Seguro Popular in Mexico and Barrio Adentro in Venezuela. Governments are using their bargaining power to negotiate and centralise drug purchases in order to contain costs, and overall public drug expenditure in the region is expected to continue growing, as there is a considerable level of unfulfilled demand.

However, the report also notes that private pharmacy sales are also surging, due to higher disposable incomes in countries such as Brazil, Mexico and Venezuela. Prices of innovative drugs have risen, but governments are taking steps to control them, either directly or indirectly. Moreover, in contrast to developed markets, consumption of generic drugs is very low in Latin America, apart from in Brazil, which is the region’s biggest market and where local protectionism, very low prices and high production capabilities have combined to develop a sizeable bioequivalent generics market which has proved problematic for foreign generics makers.

The report also notes that:
- Mexico’s government has started a renewal process for drug registrations, and it is expected that there will only be patented and bioequivalent generics by 2010. However, local manufacturing plant requirements are also being phased out and the market will be fully open by second-half 2010. Also, this June, the health law was amended to allow the production and sale of biologic and biosimilar medicines;

- Argentina’s pharmacy sector is dominated by branded products and characterised by high prices, excessive margins, high concentration levels and a lack of regulation. The sector’s recent double-digit growth is expected to slow down and the balance of pharmaceutical trade remains in deficit; local producers have a surplus, whilst foreign producers have a significant deficit;

- Chile is pursuing ambitious goals to improve health care by 2010, and has a very competitive pharmacy sector due to the presence of a well-developed domestic industry specialised in generic and copy products, which supplied 60.1% by value and 81.8% by volume of the domestic market in 2005;

- Colombia is also pursuing healthcare reform which has boosted pharmaceutical consumption, largely in volume terms. Most of the market is supplied by the domestic industry, with the majority of international drug producers having closed their production facilities in the country;

- Cuba has a relatively strong pharmaceutical and biotechnological industry, and domestic production accounts for 80%-90% of the domestic market, which has been valued at US$501 million for 2009;

- Peru produces little in the way of pharmaceutical exports. Imports of original drugs are almost exclusively purchased by the private pharmacy sector, whilst locally-produced branded and unbranded generics are consumed by the private pharmacy and public sectors; and

- Venezuela’s recent economic outperformance has boosted out-of-pocket drug spending in the private sector, while health care reforms have also increased drug expenditure, particularly in the public sector. The market has grown both in value and volume, as generics consumption has risen amongst previously-excluded populations. However, market growth is expected to fall as the economy deepens into recession in 2010.