Argentina's ministries of production and finance have signed an agreement with the Industrial Chamber of Argentine Pharmaceutical Laboratories (CILFA), in which medicines produced locally will have an average price reduction of 7%, applicable from 21 December at the retail level.
IHS Life Sciences perspective | |
Implications | Argentina's minister of production, Francisco Cabrera, and the finance minister, Alfonso Prat-Gay, signed the price-reduction agreement with the president of the Industrial Chamber of Argentine Pharmaceutical Laboratories (CILFA), Isaiah Drajer. The reduction includes medicines treating several chronic conditions, and the reductions range from 2% to 21% at the retail level. |
Outlook | Although the Argentine government's focus on domestic producers is unfavourable for international pharma companies based in the country, it is important to note that Argentina's limited infrastructure will potentially hinder implementation of the new healthcare policy. The production of essential, innovative medicines demands a sophisticated infrastructure that local producers may not possess. |
The Argentine minister of production, Francisco Cabrera, announced on 17 December the conclusion of an agreement with national laboratories through which drugs produced locally will have an average price reduction of 7%, applicable from 21 December at the retail level.
Cabrera and the finance minister, Alfonso Prat-Gay, signed the price-reduction agreement with the president of the Industrial Chamber of Argentine Pharmaceutical Laboratories (CILFA), Isaiah Drajer. The reduction includes medicines treating several chronic conditions, with the reductions ranging from 2% to 21% at the retail level.
Outlook and implications
The government's policy aims to encourage domestic production of medicines and, in turn, to decrease reliance upon imports. Additionally, the measure is in line with the current austerity programme adopted by Argentina's government, as medicines produced domestically tend to offer lower prices.
The agreement between the government and CILFA – which represents 44 domestic pharmaceutical companies – follows a recent resolution by the ministry of health, published in November, that established a policy of giving preference to the reimbursement of high-cost medicines that are produced locally (see Argentina: 19 November 2015: Argentina's MoH enforces preference for reimbursement of high-cost medicines that are produced locally).
The government's policy of boosting domestic medicine production has in fact already shown positive results. Argentina's Association of Pharmacy and Biochemistry (Safybi) reported in May that during the past 12 months, medicine production grew by 30%, reaching ARS51million (USD5.5 million), with 50% of the medicines produced by local companies using public capital (see Argentina: 28 May 2015: Domestic companies produce more than 50% of medicines consumed in Argentina).
The reduction of medicine prices, and the preference given to reimbursement of locally produced medicines, display a clear commitment by the Argentine government to supporting local industry and securing lower prices. However, according to the representative of the Argentinean Civil Defence Association of Users and Consumers, Pedro Bussetti, medicine prices have increased during recent months by more than 40% – the decision to decrease prices by an average of 7% is not, therefore, as effective as the government has claimed.
Although Argentina's focus on domestic producers will not be welcome news for international pharma companies based in the country, it is important to note that Argentina's limitations in infrastructure will potentially hinder implementation of the new healthcare policy. The production of essential, innovative medicines – such as biologics products to treat cancers, diabetes, and the hepatitis C virus – demand a sophisticated infrastructure.