Jamie Davies Head of Pharmaceuticals & HealthcareBusiness Monitor International
Oscar MazzaConsumer & Healthcare Industry HeadCiti Transaction Services Latin America
The Pharmaceutical & Healthcare Industry in Latin America
Citi’s Online Academy Presents:
Agenda
Introduction
Market drivers
Risk/Reward Ratings
Company Activity
Case Studies
Q&A
0 min 30 min
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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
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The Global Context
BMI View: moderate risk, moderate reward
Pharmaceutical Sales In 2011
Latin America US$70bnEurope US$329bn
Middle East US$16bn
Africa US$19bn
North America US$358bn
Asia US$265bn
Source: BMI
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The Global Outlook
BMI View: emerging markets to drive industry growth
Source: BMI
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200
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600
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1,000
1,200
1,400
1,600
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Pharmaceutical Sales (US$bn)
North America +22%
Europe +18%
Asia +82%
Latin America +119%Africa +145%Middle East +116%
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Economic Expansion
Source: BMI
BMI View: Latin America has several favourable economies
-1 0 1 2 3 4 5 6 7 8
EurozoneFrance
GermanyUnited Kingdom
JapanUnited States
VenezuelaRussia
MexicoBrazil
ArgentinaColombia
ChilePeruIndia
China
Real GDP Growth In 2012
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Drivers Of Market Growth
Source: WHO
BMI View: surprisingly divergent
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
ColombiaCosta Rica
UruguayPanama
BoliviaPeru
BelizeEl Salvador
HondurasNicaraguaArgentina
ChileMexico
BrazilVenezuela
EcuadorPuerto Rico
Dominican RepublicParaguay
Guatemala
Healthcare Spending In 2011
Government
Private
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Demographics
BMI View: appeals to vaccine manufacturers
-.4 -.2 .0 .2 .4 .6 .8 1.0 1.2 1.4 1.6
GermanyRussiaJapan
EurozoneChina
FranceUnited Kingdom
ArgentinaBrazilChile
United StatesPeru
MexicoColombia
IndiaVenezuela
Population Growth In 2011
Source: BMI
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Demographics
BMI View: truly ageing populations decades away
0 5 10 15 20 25 30 35 40 45
IndiaColombia
VenezuelaPeru
MexicoBrazilChinaChile
ArgentinaRussia
United StatesUnited Kingdom
FranceGermany
Japan
Pensionable Population As % Of Total Working Population In 2011
Source: BMI
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Disease Burden
BMI View: a typical emerging markets profile
0 2 4 6 8 10 12 14 16
Peru
Argentina
United Kingdom
France
Germany
India
Colombia
China
Venezuela
Brazil
Chile
United States
Japan
Russia
Mexico
Diabetes Prevalence In 2011
Source: IDF
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Healthcare Access
BMI View: an under-appreciated growth driver
Source: PAHO0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5
HondurasNicaragua
GuatemalaBolivia
VenezuelaBelize
Costa RicaEl Salavador
UruguayParaguayEcuador
PeruMexico
ChilePanama
United StatesCanada
BrazilArgentina
Number Of Hospitals Beds Per 1,000 Population
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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 Pacific13
Anti-American?
BMI View: outperformance by European firms14
Risk/Reward Rating
Risk/Reward Ratings
Market expenditure
Spending per capita
Market growth
Urban/rural split
Pensionable population
Population growth
Patent respect
Policy enforcement
Approvals expediency
Economic diligence
Policy continuity
Lack of bureaucracy
Legal diligence
Business transparency
Rewards
Risks
Market Rewards
Country Rewards
Market Risks
Country Risks
BMI View: an objective assessment tool 15
Risk/Reward Ratings
0 1 2 3 4 5 6 7 8 9 10
Corruption
Legal framework
Bureaucracy
Policy continuity
Economic structure
Approvals process
Policy/reimbursements
IP Laws
Population growth
Pensionable population
Urban/rural split
Market growth
Spending per capita
Market expenditure
Brazil Pharmaceutical Risk/Reward Rating
BMI View: a frequent initial market
Source: BMI
Note: the higher the score, the more attractive the market feature
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Risk/Reward Ratings
0 10 20 30 40 50 60 70
Regional AverageHondurasNicaragua
GuatemalaVenezuela
El SalvadorBelize
Costa RicaPanama
PeruChile
ColombiaMexico
ArgentinaBrazil
Latin America Pharmaceutical Risk/Reward Ratings
BMI View: an increasingly attractive region
Source: BMI
Attractiveness i.e. priority for product launch
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Foreign Company Case Study: Sanofi
BMI View: strength through organic and inorganic growth
Source: Sanofi
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Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411
Sanofi's Performance In Latin America
Latin America Sales (EURmn) (LHS) Latin America sales as % of global sales (RHS)
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Local Company Case Study: Genomma
BMI View: should concentrate on its domestic market
Source: Bloomberg
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100
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The Relative Performance Of Genomma Lab Internacional And The Mexico IPC Index
Genomma Mexico IPC Index
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Market Case Study: Brazil
2011 2012f 2013f 2014f 2015f CAGR
Current forecast
Expenditure (BRLbn)
42.9 47.9 53.3 58.9 64.4 10.7
y-o-y % growth
16.4 11.7 11.2 10.5 10.1
Early 2011 forecast
Expenditure (BRLbn)
39.6 42.6 46.1 49.9 54.1 8.1
y-o-y % growth
7.5 7.6 8.3 8.0 8.6
Image: Oswaldo Cruz Foundation (Fiocruz)
BMI View: the recent outperformer
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2009 2010 2011 2012f 2013f 2014f 2015f
Brazil's Pharmaceutical Market
Sales (US$bn) Change % y-o-y
• Highlighted by multinationals.
• Pricing pressures.
• Unfair public-private partnerships?
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Market Case Study: Mexico
2011 2012f 2013f 2014f 2015f CAGR
Current forecast
Expenditure (MXNbn)
161 175 189 204 220 8.0
y-o-y % growth
8.5 8.3 8.1 7.9 7.7
Early 2011 forecast
Expenditure (MXNbn)
152 156 161 165 170 2.8
y-o-y % growth
2.5 2.6 2.8 2.9 2.9
Image: Petróleos Mexicanos (Pemex) oil rig in the Gulf of Mexico
BMI View: a positive surprise
-20
-15
-10
-5
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2009 2010 2011 2012f 2013f 2014f 2015f
Mexico's Pharmaceutical Market
Sales (US$bn) Change % y-o-y
• No energy liberalisation?
• Dependent on US economy.
• General security concerns.
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Market Case Study: Venezuela
2011 2012f 2013f 2014f 2015f CAGR
Current forecast
Expenditure (VEFbn)
33.3 41.2 49.8 59.3 69.5 20.2
y-o-y % growth
24.6 23.8 21.1 19.0 17.1
Early 2011 forecast
Expenditure (VEFbn)
29.4 36.1 42.8 49.9 57.6 18.3
y-o-y % growth
10.0 23.0 18.4 16.7 15.4
Image: Hugo Chavez
BMI View: October 2012 election is key
-40
-30
-20
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2009 2010 2011 2012f 2013f 2014f 2015f
Venezuela's Pharmaceutical Market
Sales (US$bn) Change % y-o-y
• High oil prices.
• Repatriation of revenues.
• Anti-American sentiment.
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Market Case Study: Argentina
2011 2012f 2013f 2014f 2015f CAGR
Current forecast
Expenditure (ARSbn)
37.9 45.4 53.7 62.9 72.8 17.7
y-o-y % growth
30.7 19.6 18.4 17.1 15.7
Early 2011 forecast
Expenditure (ARSbn)
34.2 39.9 46.2 53.2 60.9 15.5
y-o-y % growth
17.2 16.7 15.8 15.2 14.3
Image: Instituto Nacional de Estadística y Censos, INDEC
BMI View: consistently defying risks
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2009 2010 2011 2012f 2013f 2014f 2015f
Argentina's Pharmaceutical Market
Sales (US$bn) Change % y-o-y
• Under-reporting of inflation.
• Patent approval backlog.
• Import restrictions.
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Conclusion
BMI View: crucial to identify opportunities and risks
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0 50 100 150 200 250
Local currency market growth
(2011-2016 CAGR)
x-axis = per-capita pharmaceutical spending in 2011 (US$); size of bubble = absolute market size (US$bn)
The Pharmaceutical Markets Of Latin America
Costa Rica
Mexico
Panama
Uruguay
El Salvador
Colombia
Honduras
Guatemala
Peru
Bolivia
ParaguayNicaragua
Ecuador
Brazil
Chile
Argentina
Venezuela
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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 [email protected]
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