Latin America: How pharma can navigate a complex market

Bureaucracy, political upheaval, and lack of regulations continue to make Latin America a difficult market for European and North American pharma to enter – and COVID-19 has only worsened these issues. Developing market specialist Dr Zulf Masters OBE takes us through the nuances of being successful in this region.

Having worked all around the world to supply medicines to developing markets, Dr Zulf Masters understands the biggest barrier for a pharma company entering these regions is a lack of understanding of their complexities.

His company, UK-based Masters Speciality Pharma, partners with big pharma, SME and biotech companies to bring their products to patients in developing markets. Although Latin America is a vast and varied region, it is one that, generally, presents difficulties for the industry as access to treatments is limited.

“There are a number of companies that, even in the last decade, have left the Latin American market completely because they just couldn't handle the local nuances, such as devaluation of currencies, economic problems, political issues, the bureaucracy and, dare I say, quite a lot of corruption,” Dr Masters says.

Political issues in some countries are among the most conspicuous challenges in the region, and Dr Masters says they continue to “create havoc”.

“Sometimes this havoc can cause a huge swing in economic issues and lead to significant losses if you're not careful.

“For example, during the impeachment time of Dilma Rousseff in Brazil, business with public healthcare completely dried up. We had to be nimble and move very quickly to start working with HMOs and the private sector to remain profitable.”

Thankfully, many governments are working towards emulating systems from other countries to make their healthcare systems more robust. For example, price regulations are becoming more common in Latin America, often being based on models such as NICE’s.

“Several countries have brought in regional harmonisations and regulations, and the regulatory environment is becoming increasingly sophisticated and complex,” says Dr Masters. “Our medical and regulatory team have started teaching partners all over Latin America to embrace developing world regulatory and pharmacovigilance tactics and programmes.”

However, increased regulation can be a double-edged sword – they increase safety and efficacy but can also make access to medicines more difficult in many markets.

“National budgets are squeezed because drugs like new biologics are very, very expensive,” says Dr Masters. “National budgets are not used to spending $84,000 per patient per year for just one person who has hepatitis C. They are becoming very, very selective in what they can import.”

As a result, Latin American countries often end up importing products from cheaper but less-regulated markets like India and China, leading to some counterfeit medicines being introduced into the supply chain.

“It's a big task for people like us in the industry to educate these systems and explain what they’re doing wrong,” Dr Masters says.

These regulations have also resulted in many essential COVD-19 products becoming unavailable in Latin American countries.

Colombia’s recent price regulations, for example, resulted in a lack of products like Midazolam, an anesthesia for people on ventilation.

“Because the price regulations are so drastic, many companies who had registered products like Midazolam had left the country by the time COVID came,” Dr Masters explains.

He adds that the pandemic has brought to light the fragility of healthcare systems in the region.

“Governments and individuals have found out that pandemic strategies are not easy to handle when you have very draconian bureaucracies in place. Locking down ports and airports added additional problems because most of these companies, even those who manufacture locally, have to depend on APIs coming in from China and India. The entire supply chain was disrupted, and the cost of logistics often increased tenfold.”

But like in other regions, healthcare systems are finding innovative ways to get around the unique problems posed by COVID.

“In countries like Brazil, where many people live in poor areas far away from centres of excellence or clinics, telemedicine and remote consultations have become very important. That trend is likely to accelerate.”

Finding solutions

Dr Masters says that many of these issues can best be sidestepped by industry and government working together.

“It has to be an almost symbiotic relationship where we’re helping each other out and showing governments the right way to do things. We need to encourage them not to take paths that will lead to more counterfeit medicines entering their markets, because they will never come back from that.”

Dr Masters believes that having a local presence and employing local people can help companies better understand the cultures and economies of these regions.

“Companies from North America, Europe and other developed areas tend to be used to thinking in fairly logical systems,” he says. “In Latin America, bureaucracy is not always logical. It's important to be well-informed, adapt yourself and find the right partnerships.”

He uses the example of sickle cell disease product Siklos, which Masters was attempting to bring into Brazil.

“The product was already registered by the FDA, but the Brazilian regulators decided they were above the FDA and started asking questions that were often irrelevant.

“Sickle cell disease patients in the Northeast of Brazil are generally poor and in desperate need of this medication, but the country will drag its feet and put up roadblocks.

“Health authorities and governments will have to rethink their strategies and reduce the barriers to entry if this situation is to improve.”

Similarly, Latin America is not part of many smaller biotech companies’ business models when they are first starting out, but partnering with companies local to the region that are organised according to EU/US laws can derisk the venture and help expand access beyond what they would normally be able to achieve.

“At Masters, for example, we do a lot of market research into disease areas and disease prevalence, and even do some local clinical trials if needed. Then we feed this information back to the company, and when the product is registered by the FDA we will look at licensing it into our markets and registering them locally.”

But Dr Masters says he is confident that the market will change.

“There are many emerging markets in Latin America who are always looking to North America and Europe as being the standard-bearers of drug regulation, and they are changing the way they think based on what they’re seeing there. They’re talking to those people to see how they can regulate their prices properly and equitably.”

The industry has an important role to play in helping these governments in this transition.

“Helping facilitate these discussions and connections, providing education and conducting local trials are all steps the industry can take to help open up these markets even further for other companies.”

About the interviewee

Zulf Masters, CEO of Masters Speciality Pharma, started his career back in 1980 working at Beecham as a medical rep, moving into international sales and marketing for certain emerging markets. This gave him the idea of founding Masters in 1984 to address the unmet patient need in emerging markets. The company began by serving the Caribbean from a single location from where, as Founder and CEO, Zulf has led Masters into becoming a truly international business. Masters Speciality Pharma is today a global pharmaceutical company, headquartered in the UK, with a 35-year successful track record in supplying medicines to hospitals, clinics, and government organisations in more than 75 countries.