Argentina - What are the most recent developments affecting the biologic sector in Argentina?

The most recent developments include new production capabilities in the public sector, and a licence agreement between GTC and Bio Sidus in the private sector.

Pharmaceutical R&D activities in the public sector are focused on biotechnology. Historically, investments have been low, concentrated on basic science and developed by public institutions which do not co-operate with the private sector. Recent developments affecting the biologic sector, however, include the plan to create the Pilar Biotechnology Park; the installation of a plant for the production of vaccines against seasonal influenza and influenza A (H1N1), in co-operation with the private sector; and technology transference for the local production of the yellow fever vaccine in Argentina.

In the private sector, GTC Biotherapeutics and the Argentine Bio Sidus, part of the Sidus Group, entered into a registration licence agreement in May 2010 under which Bio Sidus will perform all necessary actions to obtain sales authorisations for GTC's lead product, the recombinant human antithrombin ATryn. A product licence agreement for the supply of material and marketing rights will be negotiated separately. It is anticipated that the review process in Argentina will be completed within a fast-tracked period of no less than six months from the filing of the dossier with the regulatory authorities.

Further reading - A detailed analysis of the Argentinian pharmaceutical market is available from Espicom: The Pharmaceutical Market: Argentina (published May 2010)

Australia - What actions are the Australian government taking to improve the healthcare system and how will this impact the pharmaceutical market?

Prime Minister Kevin Rudd has already implemented an overhaul of the healthcare system and is expected to announce further reforms in the May Budget.

In March 2010, Prime Minister Kevin Rudd announced an A$50 billion (US$46.4 billion) overhaul of the healthcare system, which will free up funds for economic infrastructure over the next decade. The overhaul includes investment to add a record number of medical specialists over the next 10 years, and spending on aged care will also increase.

The government is expected to announce in its May Budget plan to slash US$2 billion in health spending over four years, by paying pharmaceutical companies less for their medicines. The plan will include increasing the use of generic medicines and ensuring that patients pay less for a range of commonly used blood-pressure and cholesterol-lowering drugs. Also under the proposed plan, people could save on the cost of prescription drugs.

Further reading - An in-depth analysis of the Australian pharmaceutical market is available from Espicom: The Pharmaceutical Market: Australia (published May 2010)

Bangladesh - What is the state of the pharmaceutical balance of trade in Bangladesh?

The balance of trade will remain negative and the deficit is likely to grow.

Bangladesh does not export pharmaceutical products to any significant degree, although there are tentative signs of growth since 2006. Finished medicaments accounted for almost the whole export market in 2008. Imports are low but continue to increase. Raw materials accounted for just less than 50% of all imports in 2008. Imports of finished medicaments and antisera & vaccines represented the remainder of the total.

It is difficult to project how the balance of pharmaceutical trade will change throughout the forecast period. On the one hand, reports indicate that exports are rising. On the other hand, Bangladesh’s pharmaceutical reputation may have been tarnished by the recent scandal involving Rid Pharmaceuticals, which could result in fewer exports of domestically-produced drugs. Espicom expects that the balance of trade will remain negative and the deficit is likely to grow.

Further reading - Detailed information on the pharmaceutical market in Bangladesh is available from Espicom: The Pharmaceutical Market: Bangladesh (published May 2010)

Brazil - Is there room for more acquisitions in the Brazilian generic market?

Brazil is the most attractive bioequivalent generic market in the Latin American region and will continue to attract the interest of multinationals.

Pharmacy sales of generic medicines increased by 24.0% in value terms and 19.0% in volume terms in 2009. Generic medicines have increased their pharmacy market share in recent years, passing from representing 4.0% of the pharmacy sector by value in 2001 to 15.1% in 2009. In volume terms, generic medicines represented 19.4% of the pharmacy sector by volume in 2009, compared to 4.8% in 2001. Market growth opportunities will continue in 2010 and generics are expected to represent about 22.0% of the pharmacy sector by volume in 2010 and 33.0% by 2014.

Due to its growth potential, foreign producers continue to penetrate the Brazilian generic sector. The American pharmaceutical producer Valeant, for instance, announced the acquisition of a Brazilian generic producer in May 2010. This was its second acquisition in Brazil in less than one month. A number of international and local producers seem interested in the acquisition of the local generic producer Teuto. In 2009, two leading generic producers, Neo Química and Medley, were snapped up by Hypermarcas and sanofi-aventis, respectively.

Further reading - A detailed review of the Brazilian pharmaceutical market is available from Espicom: The Pharmaceutical Market: Brazil (published May 2010)

Canada - What effect will recent pricing changes in Ontario have on the generic pharmaceutical industry?

There is concern that generic price cuts will make it harder for manufacturers to produce low-cost generic medicines currently on the market, not to mention develop and manufacture new ones.

In April 2010, Ontario announced plans to reform its prescription drug system, including cutting the price of generic drugs to 25% of the cost of the brand-name originator, and ending the practice of professional allowances paid to pharmacists by generic drug companies, often used for rebates instead of patient care. Other provinces are expected to follow Ontario’s lead with these new measures.

Ontario officials have dismissed claims that the new regulations will lead to job cuts, shorter opening hours and store closures. However, the Canadian Generic Pharmaceutical Association (CGPA) has expressed concern that the generic price cuts could undermine the ability of manufacturers to produce and supply low-cost generic medicines currently on the market, as well as developing and bringing to market new ones. The CGPA is also concerned that the moves could jeopardise jobs within the industry. In addition, Shoppers Drug Mart, the largest pharmacy chain in Canada, has claimed that the withdrawal of professional allowances would force it to close stores and shorten opening hours. Shares in the company have fallen by 12% since the government’s announcement.

Further reading - An in-depth analysis of the Canadian pharmaceutical market is available from Espicom: The Pharmaceutical Market: Canada (published May 2010)

China - How significant is the Chinese biologic/biosimilar market?

The Chinese government has recognised the importance of the biologic/biosimilar market and China claims to be the largest vaccine producer in the world.

The biotechnology industry was identified as a key strategic sector in the government’s 11^th Five Year Plan for 2006-2010. The biologic/biosimilar market is an integral part of the biotechnology industry.

China has 29 domestic companies which produce 49 different types of vaccines for the prevention of 26 infectious diseases. The total annual vaccine output has exceeded 1 billion doses.

In September 2009, China approved the clinical use of an A H1N1 influenza vaccine produced by the domestic company Sinovac, making it the first company in the world to be granted with a production licence for the disease.

Further reading - A detailed analysis of the Chinese pharmaceutical market is available from Espicom: The Pharmaceutical Market: China (published May 2010)

Germany - How will the German government deal with large deficits seen within the health insurance sector?

The government has proposed a package of reforms aimed at easing the financial problems of statutory health insurers.

In March 2010, the coalition parties agreed on a package of reforms which the government hopes to bring into force by 2011. The proposals includes an increase of the mandatory discount for patented drugs sold to the statutory health system from the current 6% to 16%, which could potentially save 1.1 billion euros (US$1.4 billion). In addition, prices will be frozen at August 2009 levels until the end of 2013, and the current fixed price system for some patented drugs, as well as the discount price contract system for generic, or copied drugs, will be retained.

The government is focusing primarily on a new system to set prices for new, innovative drugs, which the Health Minister claims entirely accounted for the increase in drug spending in 2009. Manufacturers will have the freedom to set prices themselves for the first year of a drug being on the market, but it will need to compile a dossier on its costs and benefits, which will be assessed by the authorities. If the drug does not offer additional benefit to medications already available, it will immediately be put under the fixed price system. The prices of drugs which do offer additional benefit will be subject to central negotiation on prices for the statutory system.

The proposals have angered industry associations which had been promised deregulation for the drug sector when the coalition government was formed, and noted that the system would jeopardise investment prospects. The plans were welcomed by the GKV, however.

Further reading - An in-depth review of the German pharmaceutical market is available from Espicom: The Pharmaceutical Market: Germany (published May 2010)