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Argentine Drug Market Recovers to Pre-Crisis Levels

June 8, 2005

Media sources in Argentina claim that pharmaceutical consumption levels have recovered to the levels reported prior to the economic collapse in 2000. According to a retail market survey of OTC and prescription pharmaceuticals, sales in 2004 were 12% higher year-on-year at 387mn units, worth some ARS6.1bn (US$2.11bn).

However, the report notes that the survey does not account for a substantial proportion of generic medicine sales, as many local manufacturers distribute wholesale to pharmacies and hospitals. This is likely to represent a significant portion of overall drug sales, as generic prescribing is mandatory in Argentina, although consumers have retained much of their traditional preference for branded drugs.

The survey also notes that, in US dollar terms, the value of sales in 2004 was less than half that in 2000, a time when the currency was "convertible" almost at parity with the US dollar. Sources at an unidentified multinational drugmaker confirmed that many leading foreign research-based firms now repatriate less than half the capital they sent in 2000.

Meanwhile, typifying a growing trend in the Argentine sector, domestic firms have led the growth rankings, amid a lower-income operating environment and new generics-friendly reimbursement structures.