The burgeoning South American pharma markets is a big attraction for a number of Indian pharma companies like Strides Arcolab, Dr Reddy's, Bal Pharma, Elder Pharma, Glenmark, Torrent, Flamingo Pharmaceuticals and Lifeline Industries Ltd.
The market outlook of this region is quite positive for the 2011-2016 period since the higher consumption of both patented and generics medicines in these markets will continue to be fuelled by increasing disposable income. The economic growth of the South America countries is the key driver for promising prospects for the pharmaceutical industry.
South America market spans Argentina, Bolivia, Brazil, Chile, Columbia, Ecuador, Guyana, Paraguay, Peru, Suriname, Uruguay and Venezuela. Brazil is the largest pharmaceutical market in South America.
According to Carolyn Buck Luce, global pharmaceutical leader at Ernst & Young, the South America region is now led by Brazil which is an important emerging market for the pharma industry as they guarantee at least low double digit growth. However to expand the market they need to look for acquisitions and adopt collaborative practices.
Pharmaceuticals in South America is recognized as a high growth industry for global drug makers. The eight markets of the Latin American region are valued over $30 billion. Although the individual markets are growing at different rates , the total market is expected to grow at a compound annual growth rate of 10 per cent over the next seven years.
In June this year, India and Brazil met at the Pharmaceutical Round Table at Sao Paulo in Brazil and highlighted the creation of a industry-level working group to sort out hurdles faced by pharma exporters. Union Minister for Commerce, Industry and Textiles Anand Sharma invited companies from Brazil to invest in India`s national infrastructure, manufacturing in Special Economic Zones.
According to Sharma , Brazil and India could further strengthen their ongoing co-operation in the pharma field by making drugs and medicines available at affordable prices.
“The provision in TRIPS of invoking the route of compulsory licensing for making available cheaper drugs, though introduced at the behest of developing / under-developed countries, was in fact used more often by developed countries. In March this year, Hyderabad-based Natco Pharma was allowed to manufacture and sell in public interest cancer-treatment drug Nexavar at a price over 30 times lower than charged by patent-holder Bayer Corporation, under compulsory licensing (CL),” he had pointed out.
During the discussions in the round table, Indian pharma companies raised the issues of requirement of multiple testing despite having approvals from regulatory agencies in developed countries, delays in registration of products in Brazil, issue of import licenses as also port clearances; insistence by Brazil in respect of new molecules on reference price in India ,where costs are less.
Brazilian side while pointing out that many of the problems being faced by Indian companies are also faced by Brazilian companies, referred to problems faced by their companies in India and agreed with the Indian side to constitute an industry level working group to identify hurdles in further strengthening of the pharmaceutical co-operation and giving concrete suggestions towards this end to the governmental channels.
Sharma also spearheaded interactions with the Federation / Centre of Industry of the State of Sao Paulo (FIESP / CIESP) and had discussions with the members of Brazil-India Chamber of Commerce. There was also an extensive exchange on bilateral issues: the growing economic and commercial links between Brazil and India, partnership in IBSA, BRICS and G-20, and the immense potential to take relations to a higher level.
In the wake of the depression resulting out of the Euro Zone crisis and its impact on emerging markets, there was a need to consolidate South-South co-operation, and trade issues including the Doha Round, said Sharma.
The Minister and the delegation also met the President of the National Development Bank, Dr. Luciano Coutinho. Issues relating to inter-bank co-operation between BNDES and EXIM Bank, the proposal of a BRICS Bank, agreement on trade in local currency among BRICS countries, and the role that BNDES can play in financing joint ventures between Brazil and India, were discussed.
The future of these markets could involve increased public spending on treating typical middle-class diseases like diabetes and cardiovascular diseases, as more and more people are being lifted out of poverty and succumb to poor eating habits and lack of exercise. But it also needs dramatic improvements in public access to healthcare.
According to the Federation of Indian Export Organization (FIEO), the Latin American region which comprises 18 countries are important locations for growth. “If exports from India maintain an annual growth trend of 25 per cent, it can cross $500 billion by 2014. It is only the emerging markets which can boost growth. Out of the $500 billion of exports, the major chunk comes in from Asia estimated at $230 billion from the ASEAN region with $ 100 billion coming in from India. Exports to Africa and Latin America will also zoom said Ramu S Deora, president, FIEO.
One of the major growth drivers for the pharma market in South America is the aged population above 65 years, which provide ample opportunities for the growth of drugs treating Alzheimer’s disease, rheumatoid arthritis and osteoarthritis. There is also a huge incidence of cancer which is now giving opportunities for companies like Biocon, Strides Arcolab and Venus Remedies to increase their presence in this region.
In addition, the national governments have stepped in to increase access to healthcare by its population. This has led the Latin American markets which are already growing at double digit rates to receive a huge boost for increasing the use of pharmaceuticals. The economic growth of the 18 countries in the Latin America are giving a major boost to the increasing the prospects of this region for Indian and other global pharmaceutical companies, according to the World Pharmaceutical Frontier Report.