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Home > Healthcare > Pharmaceutical > General Pharmaceutical
Venezuela Pharmaceuticals and Healthcare Report Q3 2008
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Despite a challenging operating environment, Venezuela’s pharmaceutical market remains onmultinational drugmakers’ radars on account of its size. BMI estimates that the drug market (over-thecounterand prescription) is worth VEB4.6bn (US$2.1bn). Over the forecast period, we expect substantialgrowth in pharmaceutical consumption to drive the market, despite price controls on many medicinesholding down price growth in the face of strong consumer price inflation. By 2012, we expect drugmarket expenditure to have reached VEB11.4bn (US$3.3bn), representing average year-on-year (y-o-y)growth of 20% in local currency terms. A depreciating currency means that in US dollar terms, growthwill be much slower, averaging 9% y-o-y.
In BMI’s updated Business Environment Rankings for Q308, Venezuela remains in second to lastposition. Its large market and country structure means that strong returns from the market are possible.However, Venezuela has the riskiest regulatory environment in the region on account of its weakintellectual property protections and strict policy on pharmaceutical pricing.
Venezuela has been devoting successively larger proportions of its GDP to healthcare over the pastdecade, with health expenditure reaching 6% of GDP in 2007. The administration of President HugoChávez has been quick to link Venezuela's increased health expenditure to the country's improved healthindicators. In particular, Chávez has claimed Mission Barrio Adentro, the social welfare programmelaunched by his administration, has saved 347,789 lives over the past five years. However, theprogramme has been criticised as a wasteful use of funding. In July 2007, Chairman of the VenezuelanMedical Federation Douglas León Natera claimed that up to 70% of the projects of Barrio Adentro hadbeen either abandoned or were left unfinished.
In June 2008, Venezuela’s pharmaceutical industry association CAVEME estimated that 10% of drugssold in the country are either counterfeit, expired, unregistered, stolen or smuggled from abroad. Eventhough it started voicing its concerns in 2001, the association estimates that the number of illegalmedicine packages on the Venezuelan market has risen from 36.6mn in 2004 to 51.1mn in 2007, a hike ofnearly 40%.
However, not all multinationals are deterred by these challenges. Another development in June 2008 sawUS-based Bristol-Myers Squibb (BMS) sell exclusive distribution rights for 30 prescription medicines inseven Latin American countries, including Venezuela to Switzerland's Merck Serono (part of MerckKGaA). According to a press release by Merck Serono, the portfolio generated sales of more thanUS$90mn in Latin America in 2007.
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