IHS Global Insight Perspective | |
Significance | Pharmaceutical exports have experienced an impressive growth since 2003, expanding by 147% to reach US$658 million in 2009. |
Implications | While imports experienced a more significant growth at 154% through the same period, annual cumulative growth from 1992 showed exports' expansion rates at 16.6% while imports were at 12%. |
Outlook | Despite fluctuations in export performance in 2009, a historical perspective on the sector's development brings positive prospects for this year. While imports continue expanding at a faster rate, exports' production share in Argentina reflects the rising importance of this sector. |
Argentina's pharmaceutical exports have scored an impressive rate of growth in the past years to reach US$658 million for 2009, when total pharmaceutical production reached US$3.1 billion. Looking back over seven years, exports expanded by 147% from 2003's US$266 million, reports abeceb.com. During the same period imports experienced a 154% growth. However, looking into annual cumulative growth rates from 1992 onwards, pharmaceutical exports marked 16.6%, while imports reached 12%.
Internal Production Exports Share | |
Year | Share (%) |
1994 | 3 |
1995 | 4 |
1996 | 6 |
1997 | 8 |
1998 | 9 |
1999 | 10 |
2000 | 10 |
2001 | 11 |
2002 | 29 |
2003 | 17 |
2004 | 21 |
2005 | 20 |
2006 | 22 |
2007 | 21 |
2008 | 21 |
2009 | 21 |
Source: ABECEB, INDEC 2010. | |
Historical Overview of Pharma Exports' Production Share
Exports' production share in Argentina expanded from 3% in 1994 to 21% in 2009, with the most dramatic peak in 2002 with 29%. Between 2003 and 2006, production for local consumption showed a cumulative growth rate of 7.4% in volume terms and 18% in value terms. For 2009, a total of 523 million pharmaceutical units were sold in the country, compared with 2008's 512 units.
According to this source, the pharmaceutical industry accounted for 7% of the country's GDP in 2009. Argentine companies cover 58% of the market, while international firms cover the remaining 42%.
Main Destinations for Argentine Pharma Exports
Looking into leading export destinations, Brazil continues at the top of the list with a share of 16% of total Argentine pharmaceutical exports and a value of US$106 million for 2009. Following Brazil is Venezuela jumping from US$62.7 million in 2008 to US$71.5 million in 2009. In third and fourth places come Uruguay and Canada.
Export Destinations (US$ mil.) | |||||||
| 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 |
Brazil | 59.2 | 75.4 | 72.1 | 81.5 | 88.6 | 106.7 | 106.2 |
Venezuela | 17.3 | 35.8 | 27.6 | 36.6 | 50.0 | 62.7 | 71.5 |
Uruguay | 20.3 | 32.8 | 27.4 | 30.9 | 53.7 | 60.3 | 61.0 |
Canada | 0.1 | 0.2 | 0.3 | 31.2 | 42.9 | 57.6 | 55.3 |
Chile | 27.5 | 33.3 | 30.4 | 34.7 | 36.9 | 33.1 | 40.2 |
Colombia | 15.8 | 18.7 | 21.9 | 25.2 | 32.4 | 38.6 | 33.6 |
Mexico | 18.7 | 23.1 | 26.5 | 24.5 | 28.3 | 28.7 | 29.0 |
Paraguay | 11.6 | 13.1 | 15.3 | 19.2 | 19.7 | 25.0 | 26.6 |
Total | 266.4 | 344.8 | 351.2 | 434.3 | 510.8 | 625.5 | 658.20 |
Source: ABECEB, 2010 | |||||||
From every US$100 spent on drugs manufactured in Argentina, US$21 are invested in products that will be exported to other countries. Brazil accounts for 3% of all drugs manufactured in Argentina.
Outlook and Implications
In line with pharmaceutical overall growth in Argentina, reaching a 21% y/y growth to 11.672 million pesos (US$3.009 billion) for 2009, exports continue showing a positive performance on a general basis (see Argentina: 13 April 2010: Argentina's Pharmaceutical Market Reports 22.3% Y/Y Growth for 2009). This is particularly true when bringing a historical perspective and including the market's performance in the past decade.
The country's economic recovery following the 2002 crisis has been highly reflected in the sector's performance, including local drug demand and export expansion rates. While exports' rate of growth continues to be undermined by import expansion (particularly evident in the third quarter of 2009, which brought a drastic month-on-month export drop and raised the alert on the long-term steady recovery path of the country's balance of trade), exports' growing share of total internal production reflects the rising importance of the sector. Taking into account that local demand has highly benefitted from a series of key events (i.e. the availability of new treatments, firms' effective marketing strategy, cheaper drugs, the introduction of the generic prescription decree in August 2002 and Argentines' strong culture of self-medication), the positive boost to exports' production share in Argentina is particularly significant (see Argentina: 26 January 2010: Drug Demand Doubles in Six-Year Period in Argentina).
Looking into this year, the development of the pharmaceutical industry is expected to remain on the positive side in Argentina. Major challenges are expected to continue including the problems with counterfeiting activities, expanding production costs in the country and peso devaluation.