Central America Pharmaceuticals and Healthcare Report Q2 2010

Central America has limited domestic manufacturing and is therefore dependent on pharmaceutical imports. The region's negative trade balance is fo…

When taken as a whole, the pharmaceutical market of Central America is an attractive prospect for drug makers. Combined sales of prescription drugs and over-the-counter (OTC) medicines are forecast to increase from US$2.35bn in 2009 to US$2.49bn in 2010. This equates to respectable 6.1% growth and makes Central America’s pharmaceutical market the sixth-largest in Latin America, behind Puerto Rico (US$2.71bn) and ahead of Colombia (US$2.24bn).

However, market access is challenging, mainly because the seven countries that comprise Central America lack regional harmonization with respect to approvals, pricing and reimbursement. BMI’s Pharmaceuticals & Healthcare Business Environment Ratings reveals that Costa Rica, Panama, El Salvador, Guatemala, Honduras, Nicaragua and Belize should not be priorities for drug makers looking to penetrate Latin America. Individually, the Central America countries are secondary or even tertiary emerging markets for pharmaceutical firms.

Sizes of pharmaceutical markets range from US$13mn in Belize to US$632mn in Guatemala. Meanwhile, annual per-capita spending ranges from US$19.2 in Nicaragua to US$116.5 in Panama. Through to 2014 and 2019, sales of pharmaceuticals in Central America are forecast to post compound annual growth rates (CAGRs) of 8.52% and 8.54%, respectively. BMI’s newly overhauled healthcare expenditure forecast model shows that spending on medical services in Central America is projected to increase from US$9.58bn in 2009 to US$19.73bn in 2019, a CAGR of 7.49%. Governments account for the majority of expenditure, but private sector contributions are growing.

Central America has limited domestic manufacturing and is therefore dependent on pharmaceutical imports. The region’s negative trade balance is forecast to increase from -US$1.21bn in 2009 to – US$2.05bn in 2014. Imports are generally from the US, Western Europe and Mexico.

An under-developed healthcare sector is the main constraint on Central America’s clinical trials sector. Between 2006 and 2009, a total of 222 clinical studies were conducted in the region. To put this in context, neighboring Mexico hosted 181 clinical trials in 2009 alone. Few multinationals have a direct presence in Central America. Patented drugs are imported by wholesalers and marketed to those on high incomes through the private sector. Notable indigenous drug makers include Donovan Werke, Ancalmo Internacional and Grupo Pharma International. In line with the global trend, local manufacturers will increasingly become acquisition targets as the regional pharmaceutical market matures.

TABLE OF CONTENTS

Executive Summary 5

SWOT Analysis 6

Central America Pharmaceuticals & Healthcare SWOT 6

Pharmaceutical Business Environment Ratings 7

Table: Americas Business Environment Ratings, Q210 7

Regulatory Regime 8

8

Intellectual Property Regime 9

Central America Pharmaceutical Market Forecast 11

Central America Healthcare Market Forecast 14

Central America Pharmaceutical Trade Forecast 16

Central America Clinical Trials Sector 18

Macroeconomic Forecast 20

Table: Guatemala – Macroeconomic Forecasts 20

Table: Costa Rica – Macroeconomic Forecasts 23

Table: El Salvador – Macroeconomic Forecasts 25

Panama – Macroeconomic Forecasts 26

Table: Honduras – Macroeconomic Forecasts 28

Table: Nicaragua – Economic Activity 29

Table: Belize: Economic Activity 31

Political Risk Analysis 32

Industry Developments 35

Competitive Landscape 37

Company Profiles 38

Ancalmo Internacional 38

Historical D 38

Donovan Werke 39

Forecasts 39

BMI Methodology 40

How We Generate Our Pharmaceutical Industry Forecasts 40

Pharmaceutical Business Environment Ratings Methodology 41

Ratings Overview 41

Table: Pharmaceutical Business Environment Indicators 42

Weighting 43

Table: Weighting Of Components 43

Sources 43