Abstract
BMI forecasts a negative US dollar value growth between 2009 and 2013 for
Venezuela’s drug market,
due to the expected economic difficulties
in 2009 and 2010. In local currency terms, the market is
expected to
increase to around VEB21.2.bn (US$2.23bn) by 2013. However, its dollar value
should be
lower than in 2008. Part of the problem is that Venezuela has
very high inflation which is eroding any
nominal growth in the drug
market.
Despite the current economic difficulties in the country,
Venezuelan President Hugo Chávez is looking to
increase the domestic
pharmaceutical production sector. In May 2009, he inaugurated a drug
production
centre in Caracas. He also approved a US$40mn budget for 2009
and US$43mn budget for 2010 for the
construction of a pharmaceutical
industrial complex in Guacara. The medicine production centre was
initially set up in 1993 but was abandoned and labelled unproductive as a
result of a lack of government
investment. The newly refurbished centre
will produce a range of generic medicines including insulin,
antibiotics,
syrups and antiretrovirals (ARVs). Production is set to start shortly, using
raw materials
sourced from India, China, Sweden and Germany. President
Chávez said, ‘We are going to convert
ourselves into exporters
of medicines in the future. First, of course, for us, and later to share with
other
countries.’ The medicines are to be sold at subsidised or
production cost prices to the country’s citizens
and to countries of
the Bolivarian Alternative for the Americas (ALBA), a trade bloc.
Meanwhile, Venezuela’s consumer protection agency is planning to ask
President Hugo Chávez to take
over a closed Pfizer medicine factory.
The plant is located in the eastern city of Valencia, which is an
economic
hub that contains the South American country’s top manufacturing
companies. It is not known
why the world’s largest drugmaker ceased
production, but Pfizer has stated it is ‘committed to engaging
in an
ongoing dialogue with the Venezuelan authorities.’ The appropriation of
the factory will send
shockwaves around the already damaged business
environment in the country. Despite, the impact of the
financial crisis on
Venezuela’s revenues, Chavez has recently embarked on a large
nationalisation spree.
According to AFP, Chavez announced in May 2009,
that in order to pave the way for a state-run set of
enterprises, the
government will nationalise various iron and steel firms in the country.
Venezuela finds itself at the bottom of the rankings once again in Q309, as
BMI forecasts a serious
contraction in the country’s pharmaceutical
market. The operating environment for drugmakers is also
challenging due
to weak IP laws and a political regime that regularly speaks out against
private enterprise.
| 
View Cart
