BMI's Executive Summary

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Venezuela's pharmaceutical market was estimated to be worth US$2.07bn in 2007. Following strong growth of around 7% per annum over the past couple of years, BMI expects market expansion to slow over the forecast period, mirroring a slowdown in GDP growth. However, the contractions of 2002 and 2005 should not be repeated despite a cost conscious government strategy that will see increased generics substitution. We expect the drug market to average 4% growth to reach a value of US$2.52bn by 2012.

The generics and over-the-counter (OTC) drug sectors are expected to grow strongly at the expense of patented drugs, which will continue to suffer from an unfavourable intellectual property (IP) environment. Unsurprisingly, given the patent office has failed to grant a patent to a drugmaker since 2003, Venezuela featured on the USTR Special 301 Report's Priority Watch List for countries with significant IP failings in 2007, and can be expected to remain there in 2008.

A further factor constraining market growth is the system of strict government price controls that have been in place since 2003. No price increases have been allowed on a list of 1,300 'essential medicines' despite an increase of 70% in consumer prices over the time period.

Generic substitution is one way in which the government hopes to control its health budget. Another is through the promotion of preventative medicine. An expansion of the state immunisation programme is proving successful after it emerged that Venezuela set a regional record in November 2007 by administering 6.8mn rubella vaccinations in just three weeks.

BMI has overhauled its Business Environment Rating methodology for Q108. Under the new system, Venezuela is placed ninth in the Americas region out of ten markets surveyed – ahead only of Peru. Venezuela scores particularly poorly in the areas of market risks and country risk. The dangers of a weak IP environment and political regime that often berates the private sector make for a risky operating environment for drugmakers. However, strong growth is expected in the generics sector, making the market relatively more attractive to generics players.

A development in 2007 was the announcement that the Venezuelan Institute of Scientific Research (IVIC) would be charged with checking the bio-equivalence of locally produced generics. In addition to aiding the process of generic substitution, the government also hopes this will clear the way for more Venezuelan-made generics to be exported.

Contents

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Chapter 1 - Executive Summary

Venezuela Pharmaceuticals Industry SWOT

Venezuela Political SWOT Analysis

Venezuela Economic SWOT Analysis

Venezuela Business Environment SWOT Analysis

Venezuela Business Environment SWOT Analysis

Chapter 2 - Business Environment Rankings

Latin America

Business Environment Ranking

Economics - Long-Term Risk

Politics - Long-Term Risk

Regulatory Barriers

Domestic Sector Threat

Market Growth Potential

Market Size Ranking

Chapter 3 - Venezuela: Market Summary

Chapter 4 - Regulatory Regime

Intellectual Property Environment

Other Regulatory Issues

Chapter 5 - Industry Developments

Healthcare Sector

Pharmaceutical Sector Developments

Company Activity

Chapter 6 - Industry Forecast Scenario

Overall Market Forecast

Key Growth Factors - Industry

Table - Venezuela Drug Market Trends

Key Growth Factors - Macroeconomic

Table: Economic Activity Indicators

OTC Market Forecast

Table - Venezuela OTC Market Indicators

Prescription Drug Market Forecast

Table - Venezuela Prescription Market Indicators

Generics Market Forecast

Table - Venezuela Generics Market Indicators

Import/Export Forecasts

Other Healthcare Data Forecasts

Table - Venezuela Pharmaceuticals & Healthcare Sector

Key Risks To BMI's Forecast Scenario

Chapter 7 - Competitive Landscape

Overview

Chapter 8 - Company Monitor

Company Profiles: Leading Multinationals

Sanofi-Aventis

Pfizer

Merck & Co

Novartis

GlaxoSmithKline

Indigenous Company Profiles

Elmor

Grupo Farma

Chapter 9 - Latin America: Regional Market Overview

Chapter 10 - BMI Forecast Modelling

How We Generate Our Industry Forecasts

Technical Process

Pharmaceutical Industry

Sources

Chapter 11 - Appendix: Regional Demographic Data

Wages (ave per annum), US$

Population

Household Spending Per Capita, US$

Private Consumption Per Capita, US$ PPP

Market Size, GDP, US$bn

Chapter 12 - Country Snapshot: Venezuela Demographic Data

Section 1: Population

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education & Healthcare

Table: Education

Table: Healthcare: Vital Statistics

Table: Healthcare: Expenditure

Section 3: Labour Market And Spending Power

Table: Employment Indicators

Table: Consumption And Stratification

Competitive Landscape for Latin America Pharmaceuticals and Healthcare: Sample of Companies Ranked

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Cross-border analysis of regulatory systems comparing the patenting environment, summarising regional pricing and reimbursement factors and monitoring the growth of the Pharmaceuticals sector across the region. Company SWOTs cover leading multinational and national drug companies operating in each market.

Network of Latin American Pharmaceuticals & Healthcare Sources

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BMI's Latin American Pharmaceuticals & Healthcare Reports are based on an extensive network of multilateral organisations, government departments, pharmaceuticals industry associations, chambers of commerce and company reports. Information sources include: