Drug companies in Argentina have "unilaterally" cut the discount on drugs sold under the government's Solidarity Fund for healthcare. Following a law introducing mandatory generic prescribing in 2002, the drug industry had offered a 30% discount on leading branded products, but the maximum discount now falls to 25%.

Drug industry sources claim the cut was necessary to maintain margins, as strong generic competition -- mainly from local producers -- is reportedly eroding sales value. About 4,000 products are available under the Solidarity Fund scheme, with the costs of the discount shared between pharmacists and suppliers.

Meanwhile, Argentina's drug agency, ANMAT, has issued tough new consumer advertising guidelines. Drug marketers will shortly be unable to use any material that "provokes anxiety" or makes mention of indications not expressly approved by the regulator. New guidelines will also apply to wording such as "clinically proven" or "natural," and new consumer labeling will be necessary for dietary supplements.

Argentina's regulatory environment has tightened and generic competition has grown in recent months. New official data indicates that drug sales growth has cooled after two years of recovery from the economic collapse of 2001. National statistics agency INDEC reports that pharmaceuticals industry turnover increased 6% in the second quarter, with sales 8% higher year-on-year. Exports declined 11.6% in the three-month period on an annual comparison, a 22% fall in relation to the previous quarter. Sales and industry turnover showed slight increases, up 0.7% and 2.4%, respectively.