Abstract
In BMI’s Q309 Business Environment Rankings for the 10 markets of the
Americas, Chile receives a
slightly lower composite pharmaceutical rating,
but remains ranked seventh out of the 10 markets
surveyed in the Americas.
Downward revisions to economic fundamentals have conspired to lower most
countries’ scores, and Chile’s attractiveness will continue to
suffer due to limited reimbursement, low
retail drugs prices caused by
strong competition, and the deficient intellectual property (IP)
environment.
In fact, Chile is once again featured on the 2009 Priority
Watch List prepared by the Pharmaceutical
Research and Manufacturers of
America (PhRMA)’s Special 301 Submission. The two key problems in
Chile for research-based drugmakers remain data protection and the lack of
co-ordination between the
patent office and medicines regulator. However,
comments by various officials following the publication
of the report
indicate that Chile was not overly concerned at being included on the Priority
Watch List,
viewing the document as a means of promoting the interests of
private US companies.
Nevertheless, in the next five years, the drug
market value – CLP635bn (US$1.21bn) in 2008 at consumer
prices
– is expected to continue rising steadily, to reach CLP801bn (US$1.73bn)
in 2013. The compound
annual growth rate (CAGR) is expected to come in at
7.38% in US dollar terms, but just 4.77% in local
currency terms, as the
peso makes gains against the US dollar towards the end of the forecast
period.
Generic medicines should make gains against their patented
counterparts, boosted by the expansion of the
Universal Access and
Explicit Guarantees (AUGE) healthcare plan and the strength of the local
pharmaceutical industry, as well as the forecast GDP growth of just 0.9% for
2009, which will negatively
impact job security and consumer spending.
Strong competition among the leading pharmacy chains (Farmacias Ahumada
(FASA), Salcobrand and
Cruz Verde, which jointly control some 93% of the
market) and their pressure on manufacturers to offer
lower prices are
likely to continue to keep retail prices relatively low. However, following a
probe by
Fiscalía Nacional Económica (FNE)’s office into
monopoly abuse by the three retailers, launched in late
2007, the
companies were fined US$12mn each. In March 2009, FASA admitted to colluding
with rivals
Cruz Verde and Salcobrand to push up the prices of more than
200 drugs in the country, although the
other two chains denied the claims.
Nevertheless, the probe confirms a pressing need for better regulation
of
the retail market, which would likely benefit the consumer.
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