Venezuela's pharmaceuticals market remains most challenging of the region, says BMI

In Business Monitor International's updated, second-quarter 2010 Business Environment Ratings (BER) table for the 10 major countries of the Americas, Venezuela is once again ranked the lowest, reaffirming its view that the country remains one of the most challenging pharmaceutical markets in the region.

Globally, Venezuela ranks only 68th of the 71 countries surveyed, as negative factors such as weak intellectual property (IP) laws (including the most recent patent-annulment of Bayer's Avelox (moxifloxacin) patent) and a political regime that regularly speaks out against private enterprise continue to outweigh possible draws to the market, which include its fast-growing urban population and the support for the Barrio Adentro health care system (including the preferential exchange rate introduced in January 2010 to ensure the continued supply of medicines).

The authors calculate that, under pressure from economic and pricing factors, pharmaceutical sales in Venezuela reached 7.47 billion bolivar ($3.49 billion) in 2009, a decline on the previous year. By 2014, BMI forecasts the Venezuelan pharmaceutical market will be worth just under 28.94 billion bolivar, increasing at a CAGR of 31% in local currency terms. However, the authors note that, as a result of the weakening Venezuelan bolivar, drug market expenditure in US dollars will experience a decline over the five-year forecast period, to fall by a CAGR of 3.67% to a value of $2.89 billion. 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 30-35%.