The Latin American countries, which have been globally recognized as the next big emerging pharmaceutical destination after India and China, offer many opportunities for the world pharma and healthcare industry. Particularly for India, Latam countries like Brazil, Argentina, Peru, Colombia, Chile, Cuba, Ecuador, Guyana, Venezuela, Trinidad and Tobago, Panama and Mexico are huge markets for export of APIs, formulations, herbals and other healthcare products and equipment.
According Dr. P.V. Appaji, Director General of pharmaceutical promotion council of India (Pharmexcil), Latin American countries have great opportunities for the Indian exports. As a part of an initiative to explore the export opportunities in the Latam region, Pharmexcil with the support of government of India is organizing an India-Latam pharma business meet at Sao Paulo in Brazil from August 5 to7, 2014.
“This time we are participating in a big way at CPhI South America. We are organizing India pavilion spread over 132 square meters. Indian pharma exporters can
utilize this opportunity by exhibiting their products, services and capabilities to the local traders and build long - term business relations. We are also inviting about 60 prominent buyers and importers from neighbouring Latin American and Caribbean countries and will be conducting one-to-one meetings with the Indian delegates,” said Dr. Appaji.
In order to strengthen the pharmaceutical business ties between India and Brazil, the council with the help of India-Brazil Chamber of Commerce is also inviting pharma distributors, importers, manufacturers from Sao Paulo and neighbouring cities for a one on one meeting with their Indian counter part. The members can also take part in technical seminars and also visit local pharma companies arranged by the council.
Apart from exploring Brazil markets, the council is also planning to take trade delegation to three to four Latin American countries for Buyer Seller Meets (BSM).
Opportunities for Indian cos in Latam
With growing population and ever increasing healthcare needs, the pharmaceutical markets in Latam offer potentials for Indian pharma companies to explore. In order to tap the huge market potentials in the South American region, it is essential to cross the regulatory hurdles specific for each country in the region.
Already the South American markets have attracted many Indian pharma companies like Strides Arcolab, Dr Reddy's, Bal Pharma, Elder Pharma, Glenmark, Torrent, Flamingo Pharmaceuticals and Lifeline Industries Ltd.
According to industry experts, the market outlook of Latam region is quite positive in the period between 2011 and 2016. They are of the view that 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 a key factor for the promising prospects for the pharmaceutical industry.
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 double digit growth. However to expand the market, they need to look for acquisitions and adopt collaborative practices.
Pharmaceuticals in South America are 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 2012, India and Brazil had met at the Pharmaceutical Round Table at Sao Paulo in Brazil and highlighted the creation of an industry-level working group to sort out hurdles faced by pharma exporters. The Indian government had also invited companies from Brazil to invest in India’s national infrastructure, manufacturing in special economic zones.
Among major concerns for the Indian pharma companies in the Latam region, particularly Brazil are delays in registration of products, issue of import licenses and port clearances; insistence of reference price in India for new molecules.
In order to ease out the issues both Indian and Brazil have constituted an industry level working group to identify hurdles and further strengthen the pharmaceutical co-operation among the two countries.
Healthcare experts are of the view that 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 regions in Latin America 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 to companies like Biocon, Strides Arcolab and Venus Remedies to increase their presence in this region.
In addition, the national governments have stepped on gas to increase healthcare access to its population. This has given a big boost to the Latin American markets which are already growing at double digit rates for increasing the use of pharmaceuticals. The economic growth of the 18 countries in the Latin America has increased the prospects for Indian and other global pharmaceutical companies to increase trade with these regions, according to the World Pharmaceutical Frontier Report.
Altering and adopting regulations Latin America has been a long sought after, though difficult to penetrate pharmaceutical market.
In order to access a portion of the huge Latin American market, many companies are chalking out strategies. Part of these strategic discussions centre around how to address the differences in regulations among the countries in the region and the various requirements needed to register products from country to country.
Many countries in South America are reciprocating to the Government of India initiatives to boost trade relations with major Latam countries. As part of this, major Latam players are entering into trade agreements and signing MoUs to alter specific regulations for easing business relations in specific areas.
Emerging Latam countries like Brazil and Mexico are now adopting new regulations to compete in quality with firms in developed countries like the EU and the US, while addressing their own sourcing needs.
Reciprocity agreements
In order to help alleviate some of those difficulties and promote trade between Latin American countries, several regulatory bodies have entered into reciprocity agreements. One such agreement between health authorities in Argentina, Brazil, Colombia and Cuba came into effect. This agreement allows Good Manufacturing Practices (GMP) inspection reports for the member countries to be the basis of GMP certificates in any of the other member countries, allowing regulators to expend resources elsewhere.
Several similar reciprocity agreements have been reached including one between Mexico and Chile, and a recent one involving Mexico, Chile, Colombia, and Peru. The Mexican regulatory agency, the Federal Commission for the Protection from Sanitary Risks (COFEPRIS) has also been in talks with the European Medicines Agency (EMA) regarding mutual recognition of GMP information as well, indicating a strong interest in pursuing more regulated markets.
Brazil, the largest Latam market
Among Latin American countries, Brazil has the largest market share with an estimated worth of $25 billion. In addition to the required registration documents and fees; the Brazilian Health Surveillance Agency (ANVISA) requires GMP certifications for each product imported into Brazil. ANVISA has been conducting inspections of finished dose (FD) manufacturers for some time and began to require registration of active ingredient manufacturers in recent years. Currently, ANVISA is conducting inspections of companies that are manufacturing APIs on the list of priority products established by the health authority and, earlier this year, asked companies to delay certification requests for products not included on this list.
ANVISA has conducted inspections in a number of countries with almost half of successfully inspected sites being located in China and India combined, and the remainder coming from European, Latin American and rest of the world. With a substantial number of API suppliers located in Europe, maintaining existing and creating new opportunities for co-operation is vital for growth in Latin America. In addition to inspecting manufacturers importing into Brazil, ANVISA requires inspections of local manufacturers of API and FD products as well.
Indian exports to Latam
India’s pharmaceutical exports to Latam region stood at US$ 682.11 million for the year 2010-2011. The exports have grown at 4.81 per cent per annum and reached to US$ 714.9 million during the year 2011-12. Overall share of India’s drugs and pharmaceutical products export to Latam region stood at 5.83 per cent during the year 2012.