RISE OF GENERICS SECTOR TO SHAKE UP CHILEAN DRUG MARKET

Chilean drug manufacturers are pinning hopes on the production and export of genuine generics, as the market remains dominated by branded drugs and cheap copies. US research-based firms continue to complain over Chile's alleged failure to comply with the intellectual property provisions of the two countries' recent free trade agreement, but the local sector has continued to modernise faster than many of its Latin American peers.

Improvement in the quality of Chilean firms' offerings is likely to be driven by the recent introduction of WHO-standard GMP and the prospect of stringent bioequivalence legislation. It is hoped that the measures will eventually force cheap, non-bioequivalent copies -- so-called "similares," which account for roughly 40% of all drugs sold in Chile -- off the market.

Nevertheless, competition is increasing in Chile's generics sector. A new government healthcare programme, known as AUGE, envisages heavy usage of Indian generics, while leading Argentine manufacturers are hoping to boost market share. However, with local leader LabChile now part of Israel's Teva, Chile's potential as an export base and a valuable market in its own right is becoming more apparent.