Health Sector

An Expert's View about Medical, Health and Cosmetics Products in Peru

Posted on: 29 Sep 2012

For the acquisition of drugs and other supplies the government is seeking to harmonize the process of pharmaceuticals acquisition and the reduction of drug prices.

Health Sector in Peru In 2011 Peru’s pharmaceutical market had an estimated US$ 1.5bn in sales. Sales should continue to rise to about US$ 2.5bn in the upcoming years. The market for medical devices grew 15% in 2011 with estimated sales of US$1.2bn. Market overview The sector combines both privately and publicly run health care providers. Health care services are available in Lima and other major cities. In the case of the public sector, MOH, Essalud, the armed forces and police, have all established health care networks. The Essalud scheme, which forms part of the ministry’s network, caters to Peruvians in the formal economy who are integrated into the social security system known as Instituto de Seguridad Social (IPSS). Overall the health sector in Peru remains the sole responsibility of the Ministry of Health (MOH). The Ministry oversees the implementation of a universal health insurance scheme. Currently more than 30% of the population does not have access to health coverage. Insurance coverage is still low throughout Peru. Although government has been increasing health care funding in the last 10 years, the private sector accounts for the largest share of expenditure, with out of pocket costs amounting to 75% of the total. Out of pocket expenditures remain high, but the number of citizens with health insurance currently at 65%, has increased considerably from just 35% in 2006. As consumption grows and also Peru’s middle class, private health insurance companies will continue to attract new members. For the acquisition of drugs and other supplies the government is seeking to harmonize the process of pharmaceuticals acquisition and the reduction of drug prices. The approach includes inter-institutional and corporate purchases. The Constitution protects free market competition and bans price controls measures. In this sense, the government will continue to utilize these purchasing strategies to achieve reductions in expenditure. In November 2009 a law for medications including medical devices and sanitary products was approved. This law provided significant improvements and modifications to the regulatory environment, by offering quality services to patients and laying a foundation for the future development of the pharmaceuticals industry in Peru. The law reinforces the Office of Medications, Raw Material, and Drugs (DIGEMID), which monitors quality control of medications in the country. According to the law counterfeit drug businesses are accountable with a stricter penal code. Owing to this, the pharmaceutical market saw an increase in competition between serious long term players and a reduction in counterfeit products (20% of total sales). The market has shown substantial growth in the past few years, owing largely to a self- medicating population resulting from expensive fees for doctor visits. A study conducted by DIGEMID showed 34% of patients in Lima self medicate. Self administering may pose a threat to the generic drug market. Consumers mostly opt for brand name drugs, since scepticism lurks over the quality of generic drugs. However, the government and private sector have begun media campaigns to educate on the effectiveness of generic drugs registered with DIGEMID. Generic drugs accounts for 17% of the market and this share is expected to grow substantially in the next few years. Given their affordability, the government favours the importation, production and use of generic drugs, especially in the public sector health care system. The pharmaceuticals manufacturing sector, though small, mostly produces generic drugs. A leading player in the industry, US-based Bristol Myers Squibb recently acquired Abeefe- one of Peru’s most prominent local pharmaceuticals company. Inkafarma (based in Peru), Quimica Suiza (Peru), Farminindustria (Peru), Bioticas Fasa (Peru) and Bayer (Germany), are significant players in the sector. Other foreign pharmaceutical companies with offices in Peru include GSK (UK), Lilly (USA), Pfizer (USA), Roche (Switzerland) Sanofi Aventis (France) and Wyeth (USA). The Peruvian market remains attractive with a stable political environment, steady economic growth an expanding middle class, the government’s initiative to strengthen investments in the health care sector and the implementation of Free Trade Agreements (FTAs). FTAs with the US and other countries have reduced tariffs and prices for medicines and medical devices. Peru’s FTA with the European Union (EU) will come into effect in late 2012 or early 2013. Key opportunities ξ 30 million market with a huge growth potential as Peru steadily consolidates as an emerging economy with fast paced growth in the region. ξ New clinics are opening in Lima and across the country pushing the demand for medicines and medical devices. ξ Generic drugs ξ Medical devices: laparoscopic surgery, X ray equipment, diagnostics and laboratory equipment, ultra sound and MRI ξ FTA with EU will lower Peruvian import prices for UK pharmaceuticals and medical devices. Latest export opportunities – Healthcare Latest export opportunities – Peru Getting into the market When doing business in Peru, a distributor or agent is the key route into the market. It is important to be clear about the benefits to Peruvian companies when you talk about your business and your long term commitment. More about doing business in Peru Contacts Market intelligence is critical when doing business overseas, and UKTI can provide bespoke market research and support during overseas visits though our chargeable Overseas Market Introduction Service (OMIS). To commission research or for general advice about the market, get in touch with our specialists in country - or contact your local international trade team. ξ Juan Luis Reus, UKTI. British Embassy Lima. Tel: +51 617 3033 or email: Contact your local international trade team Events UKTI runs a range of events for exporters, including seminars in the UK, trade missions to overseas markets and support for attendance at overseas trade shows. TECNO SALUD 2013 (medical devices): September 2013 Website address: Latest events – Healthcare Useful links More about OMIS and other UKTI services for exporters
Posted: 29 September 2012