India exported 995 million dollars of pharmaceuticals to Latin America in 2015-16 (April to March). In addition, India had exported surgical products worth 21.8 million dollars, herbal products- 6.4 m and Ayush products- 1.4 m.
This billion dollar show of Indian pharma in Latin America is creditable in the context of the disheartening news headlines from Latin America about the Venezuelan crisis, the Brazilian presidential impeachment and the regional GDP contraction of 0.4% in 2015 which is projected to worsen to 0.6% in 2016. It is even more encouraging to know that exports to 16 out of the 20 countries have shown increase from last year. Exports to Mexico have gone up from 120 million dollars to 153 million, to Colombia from 65 to 71 m, to Peru from 48 to 62 m , to Chile from 56 to 60 m, to Argentina from 40 to 44 m and to SICA group (the group of 8 central american countries) from 136 to 138 m.
Despite the slowing down of the region's economy since 2011, the Indian pharma exports have been steadily increasing from 826 million dollars in 2011-12 to 916 million in 2012-13, to 943 m in 2013-14 and crossing a billion dollars in 2014-15. It is true that the pharma exports have declined marginally from 1035 million in 2014-15. But this 3.8% decrease is insignificant in comparison to the 10% (estimate) drop in the total imports of (all products) the region in 2015.
In 2015-16, Brazil continued to be the top destination of exports with 316 million dollars, followed by Mexico-153 million, Venezuela-74 m, Colombia-71 m, Peru-62 m, Chile-60 m, Argentina-44 m, Guatemala-31 m, Dominican Republic-27 m and Ecuador-24m.
Exports to Mercosur were 450 million dollars, to Pacific Alliance –346 million and to SICA - 138 m.
Out of the total exports of 995 million dollars, finished formulations accounted for 650 million and bulk drugs 345 million. It is worth noting here that India has been increasing its export of finished formulations in recent years even while the bulk drug exports have shown decline.
There has been a 50% fall in exports to Venezuela (from 145 m to 74 m), which is not surprising, given the shortage of foreign exchange and the mismanagement of the Venezuelan economy. The drop in the exports to Brazil from 363 m to 316 m is understandable, given the Brazilian economic recession. The other two countries which saw some decline in Indian exports were Haiti and Uruguay. Even in the case of Brazil, the fall in India's exports is just 13% while the total Brazilian pharma imports have fallen by 24% from 7 billion dollars in 2014 to 5.3 bn in 2015.
Brazil is the leading destination not only quantitatively but also qualitatively. It had bought 201 million dollars of finished formulation and 115 m of bulk drugs from India. But Mexico had imported just 41 m of finished drugs but 112 million dollars of bulk drugs.
India's exports are set to continue to grow in the coming years in view of the (a) expected recovery of the economies (b) more proactive healthcare policies of the governments and (c)the growth in pharma sales and imports predicted for the region. With the tightening budget for health care due to the slower income growth, both the governments and the consumers are likely to go in for more generic drugs and less patented ones. This is good for Indian pharma which has earned a good name in the region for having helped reduce the cost of healthcare with affordable generic drugs.
Here is a brief overview of the leading pharma markets of the region.
Brazilian pharma market
Brazil is Latin America's largest pharmaceutical market with sales of 19.7 billion dollars in 2015 which is forecast to reach 29 bn by 2020. In 2015, sale of prescription drugs were 14.7 billion ( 73% of total sales) and over the counter (OTC) drugs 5 bn. Sale of patented drugs in 2015 were 9.4 billion and generics 5.3 bn.
The proportion of generics has reached 35% of prescription drug sale and 25% of total drug sale. These have been increasing since 1999, when the Brazilian government introduced the Generic Law proactively promoting the sale and use of generics. Thanks to the governmental intervention, the Brazilian prices of medicines are much lower than in the other big countries of the region such as Mexico and Argentina. The local companies dominate the generic production with 70% of total sale in Brazil.
The country has over 6,700 pharmaceutical wholesalers and 56000 independent drugstores, which account for 90% of all drugstores in the country. The independents have a share of 49% of total pharmaceutical sales, while the chain stores have 51% share. Abrafarma chain, which accounts for only 5% of all drugstores has a 36% share of sales.
Mexico
Mexico imported medicines worth 3.9 billion dollars in 2015. This is forecast to increase to 4.9 bn by 2020. Of the totale sales of 11.2 billion in 2015, prescription sales were 9.7 bn and OTC sales 1.5 bn. Generic medicines which accounted for 30% of the total pharma sales in 2015 is projected to increase to 47% in the next ten years. There are over 25,000 pharmacies of which 70% are small and medium ones which account for 60 % of the total sales.
Argentina
Argentina imported pharma worth 2.1 billion dollars in 2015. Of the Argentine pharma sales of 6.9 billion dollars in 2015, prescription drugs accounted for 87% of the sales and OTC 13%.
Patented drugs have a share of 56% of the Argentine pharmaceutical market. Around 71.8% of the domestic market demand is met by locally produced pharmaceuticals, while imported products supply the other 28.2%. There are around 150 pharmaceutical wholesalers in Argentina. The distribution sector is dominated by three distributors - Disprofarma, Rofina Farmanet and Globalfarm - accounting for over 65% of sales.
Argentina imported pharma worth 2.1 billion dollars in 2015. Of the Argentine pharma sales of 6.9 billion dollars in 2015, prescription drugs accounted for 87% of the sales and OTC 13%.
Patented drugs have a share of 56% of the Argentine pharmaceutical market. Around 71.8% of the domestic market demand is met by locally produced pharmaceuticals, while imported products supply the other 28.2%. There are around 150 pharmaceutical wholesalers in Argentina. The distribution sector is dominated by three distributors - Disprofarma, Rofina Farmanet and Globalfarm - accounting for over 65% of sales.
Central America
The pharma sales of six countries of the region ( Guatemala, Costa Rica, Panama, Nicaragua, El Salvador and Honduras) increased to 3.9 billion dollars in 2015 from 3.7 bn in 2014. It is projected to reach 7.3 bn by 2024. The pharma imports are projected to increase to 3.5 bn dollars in 2019 from 2.8 bn in 2015.
Sources: Pharmexcil and BMI Research
