South American markets have thrown open lucrative opportunities for pharma companies across the world. The region which covers Argentina, Brazil, Ecuador, Uruguay, Paraguay, Bolivia, Chile, Colombia, Peru and Venezuela which are all big markets of the future. According to the global pharmaceutical market forecast of 2012, dwindling drug pipelines and patent expiration of a number of blockbuster drugs may challenge the growth of global pharmaceutical market in future. This is where the growth in the Latin American markets is expected to be strong with Brazil and Mexico amongst the fastest emerging pharmaceutical markets in the world.
Brazil is the second largest pharmaceutical market in Latin America. There is a huge opportunity for drug manufacturers with perseverance and long -term strategies to succeed. This region is known for its stringent norms, competitive pricing and intellectual property norms set by its government machinery. The markets are lucrative if companies set up a base there and try to capitalise on the manufacturing and marketing capabilities, opine observers of the South American markets.
There is a large requirement from the growing population for new medicines in Brazil. But the biggest challenge is the government measures to curb prices. Pharmaceutical companies will need to carefully assess the market for their products to deal with these difficult challenges, say industry sources.
The major companies present in Brazil are Strides Arcolab, Dr Reddy's, Bal Pharma, Elder Pharma, Glenmark, Torrent, Flamingo Pharmaceuticals, Lifeline Industries etc.
The study, 'Indian Pharmaceutical Off-shoring Landscape', provides a detailed analysis of the Indian pharmaceutical off-shoring industry by Zinnov Consulting. According to the study, the Indian pharma sector is also growing robustly and is expected to move from being domestic led to exports driven by 2010. A transition is also being observed in the growth of pharmaceutical markets from the top seven established pharmaceutical markets to emerging markets like India, China, Brazil, Mexico, South Korea, and Russia - which will grow at 12 to 13 per cent in 2008, and become a $85-90 billion market, says the study.
Says Archana Dubey Mitra, associate vice-president, API & exports, Bal Pharma Ltd, "We are already present in Brazil, Argentina and Mexico and Chile. It is marketing its APIs ebastine, gliclazide, ameloride and benzydamine to name a few."
"Although these are the markets for tomorrow, the credit period for payments insisted by these countries is huge and is estimated anywhere between 120-180 days which is a serious issue. The government of India will need to address the issue. With the global downturn impacting opportunities in the regulatory markets of the US, UK and Japan, we need to look at the emerging markets including the BRIC (Brazil, India, Russia and China) nations which fuel the growth prospects in the export market," said Mitra.
"A visible trend is the focus on distributors-channeled paths to enter the region. There is a huge growth for lifestyle disorder drugs in the region," she added.
Though Mexico has grown way ahead of Brazil in 2009, still Brazil is viewed as the base to take off pharma marketing operations. This is because the government of Brazil is beefing up the existing healthcare structure by increasing hospitals across the region, say sources.
Going by the increased ageing population, there is an automatic demand for medicines particularly for chronic diseases like diabetes, arthritis and also for the treatment of cardiovascular and respiratory diseases.
Strides Arcolab which has a major presence in South America in mid-April 2009 has decided to hive-off of its Speciality Pharmaceuticals business into a wholly owned subsidiary 'Strides Specialties Private Ltd'. "The reorganisation of business is a major step to attain greater efficiency and accountable customer focused business units, while still retaining the aggressive and entrepreneurial spirit of Strides," says Arun Kumar, Group CEO, and Strides Arcolab. Strides Latin America is the only Indian company in the region with a regional manufacturing strategy and rank among the fastest growing new companies.
In Brazil, the company has two manufacturing plants and it is setting up a global facility for penems. "Our product range consists of generics and hospital products. A large window of opportunity for these products has opened up through our tie-up with Cellofarm, a leading Brazilian distributor of hospital products," said Arun. It has successfully penetrated Mexico market with a distribution strategy built around Solara, a company with Strides participation. Solara is one of the market leaders in the hospital segment with an equally impressive presence in the private sector market.