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Citi’s Online Academy Presents:
The Pharmaceutical & Healthcare Industry in Latin America
Jamie Davies
Oscar Mazza
Head of Pharmaceuticals & Healthcare
Business Monitor International
Consumer & Healthcare Industry Head
Citi Transaction Services Latin America
Agenda
Introduction
1
Risk/Reward Ratings
2
Market drivers
0 min
3
Case Studies
4
Company Activity
5
7
Q&A
30 min
2
Introduction
• Established in 1984.
• Headquartered in London, with
regional offices in Singapore,
Johannesburg and New York City.
• Clients include corporations,
investment banks, consultancies,
governments and academic institutions.
• Over 100 research analysts.
Image: the City of London
3
The Global Context
Pharmaceutical Sales In 2011
Asia US$265bn
Latin America US$70bn
Europe US$329bn
Middle East US$16bn
Africa US$19bn
North America US$358bn
Source: BMI
BMI View: moderate risk, moderate reward
4
The Global Outlook
Pharmaceutical Sales (US$bn)
Middle East +116%
Africa +145%
Latin America +119%
1,600
1,400
1,200
Asia +82%
1,000
800
Europe +18%
600
400
200
North America +22%
0
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Source: BMI
BMI View: emerging markets to drive industry growth
5
Economic Expansion
Real GDP Growth In 2012
China
India
Peru
Chile
Colombia
Argentina
Brazil
Mexico
Russia
Venezuela
United States
Japan
United Kingdom
Germany
France
Eurozone
-1
0
1
2
3
4
5
6
7
8
Source: BMI
BMI View: Latin America has several favourable economies
6
Drivers Of Market Growth
Healthcare Spending In 2011
Guatemala
Paraguay
Dominican Republic
Puerto Rico
Ecuador
Venezuela
Brazil
Mexico
Chile
Argentina
Nicaragua
Honduras
El Salvador
Belize
Peru
Bolivia
Panama
Uruguay
Costa Rica
Colombia
Government
Private
0%
10%
20%
30%
40%
BMI View: surprisingly divergent
50%
60%
70%
80%
90%
100%
Source: WHO
7
Demographics
Population Growth In 2011
Venezuela
India
Colombia
Mexico
Peru
United States
Chile
Brazil
Argentina
United Kingdom
France
China
Eurozone
Japan
Russia
Germany
-.4
-.2
.0
.2
.4
.6
.8
1.0
1.2
1.4
1.6
Source: BMI
BMI View: appeals to vaccine manufacturers
8
Demographics
Pensionable Population As % Of Total Working
Population In 2011
Japan
Germany
France
United Kingdom
United States
Russia
Argentina
Chile
China
Brazil
Mexico
Peru
Venezuela
Colombia
India
0
5
10
15
20
25
30
35
40
45
Source: BMI
BMI View: truly ageing populations decades away
9
Disease Burden
Diabetes Prevalence In 2011
Mexico
Russia
Japan
United States
Chile
Brazil
Venezuela
China
Colombia
India
Germany
France
United Kingdom
Argentina
Peru
0
2
4
6
8
10
12
14
16
Source: IDF
BMI View: a typical emerging markets profile
10
Healthcare Access
Number Of Hospitals Beds Per 1,000 Population
Argentina
Brazil
Canada
United States
Panama
Chile
Mexico
Peru
Ecuador
Paraguay
Uruguay
El Salavador
Costa Rica
Belize
Venezuela
Bolivia
Guatemala
Nicaragua
Honduras
0
0.5
1
1.5
2
2.5
3
BMI View: an under-appreciated growth driver
3.5
4
4.5
5
Source: PAHO
11
Company Activity
Acquisitions
Fixed capital investments
Partnerships
Other
BMI View: a sharp uptick in activity
12
Foreign Company Performance
BMI View: only surpassed by Asia Pacific
13
Anti-American?
BMI View: outperformance by European firms
14
Risk/Reward Ratings
Market expenditure
Spending per capita
Market Rewards
Market growth
Rewards
Urban/rural split
Pensionable population
Country Rewards
Population growth
Risk/Reward Rating
Patent respect
Policy enforcement
Market Risks
Approvals expediency
Risks
Economic diligence
Policy continuity
Lack of bureaucracy
Country Risks
Legal diligence
Business transparency
BMI View: an objective assessment tool
15
Risk/Reward Ratings
Brazil Pharmaceutical Risk/Reward Rating
Market expenditure
Spending per capita
Market growth
Urban/rural split
Pensionable population
Note: the higher the
score, the more
attractive the
market feature
Population growth
IP Laws
Policy/reimbursements
Approvals process
Economic structure
Policy continuity
Bureaucracy
Legal framework
Corruption
0
1
2
3
4
5
6
7
8
9
10
Source: BMI
BMI View: a frequent initial market
16
Risk/Reward Ratings
Latin America Pharmaceutical Risk/Reward Ratings
Brazil
Argentina
Mexico
Colombia
Chile
Peru
Panama
Costa Rica
Belize
El Salvador
Venezuela
Guatemala
Nicaragua
Honduras
Regional Average
Attractiveness
i.e. priority for
product launch
0
10
20
30
40
50
60
70
Source: BMI
BMI View: an increasingly attractive region
17
Foreign Company Case Study: Sanofi
Sanofi's Performance In Latin America
900
12
800
10
700
600
8
500
6
400
300
4
200
2
100
0
0
Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411
Latin America Sales (EURmn) (LHS)
Latin America sales as % of global sales (RHS)
Source: Sanofi
BMI View: strength through organic and inorganic growth
18
Local Company Case Study: Genomma
The Relative Performance Of Genomma Lab
Internacional And The Mexico IPC Index
450
400
350
300
250
200
150
100
50
0
Genomma
Mexico IPC Index
Source: Bloomberg
BMI View: should concentrate on its domestic market
19
Market Case Study: Brazil
• Highlighted by multinationals.
• Pricing pressures.
• Unfair public-private partnerships?
Brazil's Pharmaceutical Market
35
30
30
25
25
20
20
15
15
10
10
5
5
0
0
2009
2010
2011
2012f
Sales (US$bn)
2013f
2014f
2015f
Change % y-o-y
BMI View: the recent outperformer
Image: Oswaldo Cruz Foundation (Fiocruz)
2011 2012f 2013f 2014f 2015f CAGR
Expenditure
42.9
(BRLbn)
Current
forecast
y-o-y %
16.4
growth
Expenditure
39.6
(BRLbn)
Early 2011
forecast
y-o-y %
7.5
growth
47.9
53.3
58.9
64.4
11.7
11.2
10.5
10.1
42.6
46.1
49.9
54.1
7.6
8.3
8.0
8.6
20
10.7
8.1
Market Case Study: Mexico
• No energy liberalisation?
• Dependent on US economy.
• General security concerns.
Mexico's Pharmaceutical Market
20
15
10
15
Image: Petróleos Mexicanos (Pemex) oil rig in the Gulf of Mexico
5
2011 2012f 2013f 2014f 2015f CAGR
0
10
-5
-10
5
-15
0
-20
2009
2010
2011
2012f
Sales (US$bn)
2013f
2014f
2015f
Change % y-o-y
BMI View: a positive surprise
Expenditure
(MXNbn)
Current
forecast
y-o-y %
growth
Expenditure
Early 2011 (MXNbn)
forecast
y-o-y %
growth
161
175
189
204
220
8.5
8.3
8.1
7.9
7.7
152
156
161
165
170
2.5
2.6
2.8
2.9
2.9
21
8.0
2.8
Market Case Study: Venezuela
• High oil prices.
• Repatriation of revenues.
• Anti-American sentiment.
Venezuela's Pharmaceutical Market
10
40
30
20
10
0
-10
-20
-30
-40
8
6
4
2
0
2009
2010
2011
2012f
Sales (US$bn)
2013f
2014f
Change % y-o-y
2015f
Image: Hugo Chavez
2011 2012f 2013f 2014f 2015f CAGR
Expenditure
(VEFbn)
Current
forecast
y-o-y %
growth
Expenditure
(VEFbn)
Early 2011
forecast
y-o-y %
growth
BMI View: October 2012 election is key
33.3
41.2
49.8
59.3
69.5
24.6
23.8
21.1
19.0
17.1
29.4
36.1
42.8
49.9
57.6
10.0
23.0
18.4
16.7
15.4
22
20.2
18.3
Market Case Study: Argentina
• Under-reporting of inflation.
• Patent approval backlog.
• Import restrictions.
Argentina's Pharmaceutical Market
10
25
8
20
6
15
4
10
2
5
0
0
2009
2010
2011
2012f
Sales (US$bn)
2013f
2014f
2015f
Change % y-o-y
BMI View: consistently defying risks
Image: Instituto Nacional de Estadística y Censos, INDEC
2011 2012f 2013f 2014f 2015f CAGR
Expenditure
(ARSbn)
Current
forecast
y-o-y %
growth
Expenditure
(ARSbn)
Early 2011
forecast
y-o-y %
growth
37.9
45.4
53.7
62.9
72.8
30.7
19.6
18.4
17.1
15.7
34.2
39.9
46.2
53.2
60.9
17.2
16.7
15.8
15.2
14.3
23
17.7
15.5
Conclusion
The Pharmaceutical Markets Of Latin America
25
20
Brazil
Venezuela
15
Local currency
market growth
(2011-2016 CAGR)
Ecuador
Paraguay
10
Argentina
Nicaragua
Bolivia
Uruguay
Peru
5
Colombia
Guatemala
Panama
El Salvador
Costa Rica
Honduras
Chile
Mexico
0
0
50
100
150
200
250
x-axis = per-capita pharmaceutical spending in 2011 (US$); size of bubble = absolute market size (US$bn)
BMI View: crucial to identify opportunities and risks
24
Questions
For all questions and inquiries related to Business Monitor International,
including interest in a free trial or to obtain more information about our
subscription services, please contact:
Claudio Salazar
Account Manager - LATAM & Caribbean
Office: +1.646.368.1775| Cell: +1.347.922.8902 | Fax: +1.212.202.5062
csalazar@businessmonitor.com
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