What is the current situation in the pharma markets of Latin America? Interview with Market Access Expert

On behalf of pharmaphorum, Michal Kanderka of KakushinWebinars.com interviews market access expert, María Inés Guaia, Owner / Pharma Regulatory Affairs Consultant at K&G South on pharma in Latin America.

María Inés Guaia has broad experience with Latin-American pharmaceutical markets, including roles as a Regulatory Affairs Specialist at Bayer and as a Member of the Advisory Board at Curazene. Here she shares her thoughts, with Kakushin's Michal Kanderka, on pharma in Latin America.

Interview summary

PK: What do pharma markets look like after Latin America bounced back from the 2008 financial crisis?

MIG: First of all, the 2008 financial crisis didn't have a huge impact on Latin America, mainly because the financial markets are not as significant in Latin America as they are in the US or Europe; these countries have more of a real commodity-based economy. Of course, the worldwide recession had an impact in every corner of the global economy, but capital flow was restricted in many LatAm countries when the crisis happened, and that protected their economies to some extent.

After the crisis, more restrictions and protectionist measures were generally imposed or enhanced and that had a negative impact for multinational companies as barriers to international trade were increased. Many countries applied policies to protect and promote the national industry. Some countries already had them in place, which in many cases effectively attracted new investment from pharma companies that opened new facilities and transferred functions, both administrative and manufacturing-related from the central headquarters to local or regional affiliates.

This move brought creation of local know-how, infrastructure and capability that allowed further growth of the local pharmaceutical industries. Now it is possible to find many local manufacturers, packagers and service providers for the pharmaceutical industries that meet amost all needs.

As per the drug consumer market, the impact of the crisis was mild given that the demand in LatAm countries is pretty inelastic: a significant share of the pharma market is managed by national health authorities and social health insurance that didn't significantly cut expenditure in healthcare due to the crisis. The OTC business and direct-to-consumer market is not as relevant as it is in other countries, such as the US, so the decrease in pocket money didn't affect the pharma sales market as much.

PK: Brazil is perceived as a pharma giant, yet many would still regard it as an emerging market. What proves such logic?

MIG: Brazil is already a giant in terms of sales volume, but is at the same time an emerging economy given that the pharma market has the potential of growing much more. Brazil is still undergoing the so-called epidemiological transition in which infectious, poverty-related diseases, give way to lifestyle and aging-related diseases, chronic and degenerative conditions that bring the need for more sophisticated drugs and treatments, including biotech products and complex medical devices.

Brazil has also both current importance and growth potential in its pharmaceutical industry, as is it a key manufacturing, packaging and distributing hub for the region, and is gaining global relevance as an R&D center, especially in the area of clinical trials.

PK: The Mexican market has undergone several changes in recent years. How did these affect the current state? Did the obstacles to access the market disappear?

MIG: In 2011, a new General Commissioner, Mikel Arriola Peñalosa, was designated to be in charge of the COFEPRIS, the Mexican health authority. Mr. Peñalosa came with a lot of enthusiasm, many new ideas and an open mind and has changed radically the way the agency works.

As far as the pharma market is concerned, he implemented the recognition of GMP certifications from some countries of reference to relieve the institution and the pharmaceutical companies from the burden of repeated inspections and work duplication.

He also implemented schemes in which third parties, generally labs or consultants especially authorized, can perform some of the regulatory functions to expedite times and lighten the work on the regulatory agency. This functions range from pre-revision of submission dossiers to lab analysis and facility inspections. This offers the option for the companies to pay a prime rate to expedite some processes, without eliminating the agency's decisions or compromising the quality, safety or efficacy of the product in the market.

Also very relevant to the facilitation of market access has been the Agreement for Innovation, introduced in the second half of 2012. The Agreement for Innovation allows novel drug products to enter the local market in an expedited way by recognizing registration in other countries and prioritizing drugs manufactured locally or clinically tested in Mexican patients.

All these exciting changes, together with periodic issuance of clear guidelines on different aspects of product registration and life-cycle activities by the agency, make it so much easier for companies to understand and comply with the Mexican drug regulations.

Many of the obstacles disappeared, timelines are improving, and new options and strategy possibilities are on the table, although COFEPRIS is still very strict with the dossier quality and pays very close attention to risk / benefit assessment, compliance with international norms and the safety, efficacy and quality of the products.

I would say that is still a difficult agency to navigate, but for the right reasons.

PK: From where you stand, what are the main differences between particular countries in Latin America in relation to market specifics?

MIG: The Latin American region is a very diverse one. You can find some countries that are huge markets by themselves, and significant R&D effort is put into satisfying their needs, such as Brazil and Mexico, and others that are so small that are generally treated as a group, like the Central America and Caribbean.

There are also significant differences in the pricing and reimbursement characteristics. Regarding pricing, we can find countries that leave the pricing up to the companies and the markets, such as Chile or Argentina, others where the price of pharma products is determined based on reference prices, like Mexico, and others in which the HTA assessment plays a role, which is the case of Brazil. For reimbursement, we find in Latin America the whole range of payers, from the private sector, to the national government, including different sub-national levels of the government.

About the interviewee:

You can meet María Inés Guaia online at the 2nd annual Pharmaceutical Market Access in Latin America Webinar organized by KakushinWebinars.com this February where she will speak on Pharma Regulatory Affairs in Mexico.

Closing thought: What is the current situation in the pharma markets of Latin America?