Pharmaceutical sales in Venezuela reached $3.57 billion in 2008, set to grow at CAGR of 28%

Pharmaceutical sales in Venezuela reached 7.5billlion bolivar $3.57bn) in 2008, according to a new study added to the offering of Research and Markets. By 2013, it forecasts the Venezuelan pharmaceutical market will be worth 26.0 billion bolivar, increasing at a compound annual growth rate (CAGR) of 28.23%.

The authors note that, as a result of the weakening Venezuelan bolivar, drug market expenditure in US dollars will experience a decline over the forecast period to $2.74 billion, equating to a negative CAGR of -5.18%. One part of the problem is that Venezuela has very high inflation levels which are eroding any nominal growth in the drug market. In 2009 and 2010 the consumer price index is expected to average around 40%.

The report's fourth-quarter Business Environment Ratings continue to demonstrate that Venezuela's pharmaceutical market is one of the most challenging in the Americas, and Venezuela finds itself with the lowest overall rating once again. The structure of the country, with its fast-growing urban population, creates an environment in which strong returns can be achieved, particularly for players with a strong hand in the generics sector. However, the operating environment for drugmakers is challenging due to weak intellectual property (IP) laws and a political regime that regularly speaks out against private enterprise.

Govt restricts imports of finished medicines

Furthermore, in August 2009, in a move that further reduces Venezuela's attractiveness to multinational drugmakers, the country's Minister of Trade announced that the government will restrict the import of finished medicines into Venezuela in order to support local production. The authors welcome the government's focus on increasing the local production of medicines; however, in the short term, they do not expect Venezuela's reliance upon imported drugs to decrease significantly. According to the International Trade Center (ITC) and the United Nations Commodity Trade Statistics Database (UN Comtrade), Venezuela is heavily reliant on pharmaceutical imports. The authors expect this trend to continue through to 2013.

It has been revealed that an increasing number of Venezuelans are turning to the private sector for treatment in order to gain access to better facilities and resources. The value of health insurance contracts has risen by 60% since 2005 and private medical services cannot keep up with the increased demand for private care. According to the report's health expenditure forecast, it is clear that the government only contributes to just over half the health expenditure in Venezuela. It believes that low government investment in health care has led to the deterioration in national healthcare facilities and has contributed to the rise in patients opting to pay for private health care.