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Feature

A Changing Course for Healthcare in Latin America?

Posted on: 07 Apr 06

Summary

Healthcare is receiving greater attention in Latin America than ever before and a number of countries in the region are in the midst of major reforms. The government policies that are being developed have important implications for pharmaceutical companies looking to expand in this emerging pharmaceutical region.

Healthcare challenges

Healthcare is receiving greater attention in Latin America than ever before and a number of countries in the region are in the midst of major reforms. However, these healthcare changes are taking place in an environment that is very different to many of the industrialised countries of the world, and are complicated by the profound social inequalities to be found across the region.

 

The provision of healthcare is an expensive task and requires ongoing investment, but as democracy begins to play a greater role in Latin America, more attention will be paid to the poorer sections of society and in meeting their needs. The large, growing populations and different healthcare requirements across Latin America present governments with difficulties in implementing an approach that is acceptable to all.

 

The challenges in finding the right approach are illustrated by looking at basic socioeconomic data for countries that are currently involved in the most far-reaching healthcare reforms in Latin America and comparing them with those for industrialised nations (1, 2). The latest available estimates suggest that the proportion of the population living below the national poverty line is 54% in Peru, 47% in Venezuela, 44.3% in Argentina, 40% in Mexico, 22% in Brazil, and 20.2% in Chile (2). In comparison, using the same approach, the proportion of the population living below the national poverty line is put at 12% for the USA, 17% for the UK, 6.5% for France, and 4% for Belgium (2).

 

Economic factors

Although Latin American governments are investing heavily in healthcare they face economic problems in guaranteeing long-term funds for such initiatives. In recent times there have been a number of financial crises in Latin America that have disrupted government plans and have prompted a rethinking of the healthcare strategy required.

 

It is within this political and economic uncertainty that governments have placed even greater emphasis on cost containment strategies for healthcare than before. Most countries in the region are looking at issues such as essential drug lists, prescribing controls and encouraging the usage of generics. This has implications for pharmaceutical companies who market branded products. They have looked to Latin America as a promising emerging market and must reassess their commercial strategies to suit the changing healthcare environment. They have already complained that the approach to intellectual property protection in many Latin American countries is lax and they will view the moves to overtly promote generics with unease. A number of Latin American countries have passed laws that make it compulsory for doctors to prescribe pharmaceutical products by their generic name (International Non-Proprietary Name (INN)) instead of by brand name. Although it is not mandatory, generic substitution is possible (3).

 

Companies are finding that they are being judged on the affordability of their products and that in countries such as Brazil, the government is not averse to using direct measures to force a company to drop its prices. Latin American countries are keenly aware of how nations elsewhere in the world have dealt with rising pharmaceutical expenses and are looking at which policies might be appropriate for their healthcare systems.

 

Outlook

The manufacturers of branded products are also carefully monitoring the Latin American healthcare situation as the emphasis on essential medicines has seen national governments begin to challenge their patents. The recent success of the Brazilian government in maintaining its strong stance with the industry over the pricing of AIDS treatments is likely to encourage other governments to follow suit. Thus, the affordability of a particular medicine will become a crucial factor for its success in the future Latin American market.

 

References

  1. Sandullo E (2003). Latin America lagging behind in health care provision. IMS Health. http://www.ims-global.com/insight/news_story/0312/news_story_031217.htm
  2. Anon (2005). Field Listing - Population below poverty line. The CIA World Factbook. http://www.cia.gov/cia/publications/factbook/fields/2046.html
  3. Homedes N, Linares RL and Ugalde A (2005). Generic Drug Policies in Latin America. Health, Nutrition and Population (HNP) Discussion Paper. The International Bank for Reconstruction and Development / The World Bank.

Dr Faiz Kermani

Last updated on: 27/08/2010 11:40:18

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