Venezuela’s government is considering taking over one of Pfizer’s two plants in the country, on at least a temporary basis, after production at the site ceased for reasons that have not been made clear.

Eduardo Saman, the country’s Trade Minister and also head of the national consumer protection agency, has said that he planned to ask President Hugo Chavez to order the takeover because the plant produces essential medicines which the country needs.

Pfizer Venezuela SA has recently requested and received government permission to purchase large quantities of dollars in order to import medicines, which it is required to do under the currency controls introduced in 2003. No reason has been given for the closure of the plant, which is situated in Valencia, in the eastern part of the country but, in a statement issued in New York, Pfizer said that it would continue to provide important medicines across a range of key therapeutic areas and added that it is “committed to engaging in an ongoing dialogue with the Venezuelan authorities.”

Earlier this month, Pres Chavez inaugurated a new pharmaceutical production facility in Caracas and announced funding for another manufacturing unit. The centres will produce a range of medicines including antibiotics, insulin and antiretroviral drugs, for sale at discounted rates to Venezuelans and the member states of the Bolivarian Alternative for the Americas (ALBA) cooperation group – Bolivia, Cuba, Dominica, Honduras, Nicaragua and Saint Vincent and the Grenadines.

Already this year, the government of Pres Chavez has taken control of a number of food processing facilities, on the grounds that they have not been making rice and pasta available at government-set prices, and also this month, the president announced plans to nationalize a number of subsidiaries of Techint, the Argentine/Italian group of engineering and construction companies. Since being re-elected in 2006, he has nationalised a number of major operators in the oil, electricity, steel and telecommunications fields.

Market set to fall 18% this year
Meantime, a new report from Business Monitor International (BM) forecasts that Venezuela’s pharmaceuticals market will contract by 18% this year, as a result of overall weaknesses in the national economy and, in particular, inflation. In US$ terms, the market will decline by a further 12.2% per annum to 2013, it says.

BMI describes Venezuela’s economic prognosis as “dire,” and forecasts that real Gross Domestic Product (GDP) will contract substantially by 5.6% this year and 1.7% in 2010. “The deep recession and rising inflation will force the government into public spending cuts, which could impact the health sector,” it warns.