Latin American pharmaceutical overview - IOS Press

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IOS Press. Latin American pharmaceutical overview. José Luis Valverde. Chair Jean ... Five main free trade zones are developing: North American Free Trade.
Pharmaceuticals Policy and Law 16 (2014) 179–206 DOI 10.3233/PPL-140384 IOS Press

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Latin American pharmaceutical overview José Luis Valverde Chair Jean Monnet EU Law, Granada, Spain E-mail: [email protected]

Latin America is a diverse, multi-coloured and dynamic region; boast the highest life expectancy among developing regions. In Latin America persistent social exclusion and inequities in wealth distribution and in access and use of services are reflected in health outcomes. With its population reaching 600 million people in 2011, Latin American pharmaceutical sales were at $62.9 billion. LA’s pharmaceutical market represents approximately 25% of global pharmaceutical sales. As a developing market, Latin America is quite complicated and diverse in terms of regulatory, reimbursement, market, demographic, and political characteristics. The harmonization of pharmaceutical regulation has been initiated in conjunction with the creation of regional free trade zones. Five main free trade zones are developing: North American Free Trade Agreement (NAFTA); MERCOSUR; Central America; Andean Area; and The Caribbean Community. Regulatory frameworks overall have improved as a result of free trade and intellectual property agreements. Regulatory enforcement bodies, quality investigators, proactive Good Clinical Practice (GCP) and policy development, have been cited as contributing to Latin America’s explosive growth. Latin American countries are currently moving policies to support productive development and innovation. The local biotechnology industry is developing rapidly. Keywords: Latin America, health care, pharmaceuticals, free trade, pharmaceuticals law, health policy

1. The health in the Region of South America The Americas is an immense geographical region spanning two continents, North and South America, and includes the islands of the Caribbean Basin. Central America, joins the two continents. The contemporary human geography of Latin America, is by no means homogenous. The geographical size, population, economic clout, and role in the world political system of these nation-states, varies tremendously. Latin America are a diverse, multi-coloured and dynamic region that requires local knowledge, expert insight and up-to-date reporting. Latin America and the Caribbean boast the highest life expectancy among developing regions. Improvements in life expectancy in the Americas over the past 20 years hide differences within the Region. Region wide, immunization coverage against measles reached 94% in 2009. And the mortality rate for children under 5 years old more than halved between 1990 and 2009. The Region also ranks high in reproductive health. This progress notwithstanding, inequities persist in the Region, and even some of the indicators presented above mask disturbing differences from country to country. c 2014 – Network of Centres for Study of Pharmaceutical Law. All rights reserved 1389-2827/14/$27.50 

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For example, although the 94% Regional average for measles immunization coverage is impressively high, the percentage of children vaccinated against the disease in Haiti, Paraguay, and Bolivia only reached 60%, 71%, and 86%, respectively. Poverty, too, is widespread in the Americas: almost 1 in 5 of the Region’s residents lives on less than US$2 a day. Tuberculosis remains the second-leading infectious disease killer in the Americas, after HIV/AIDS. Since 1990, TB cases in the region have declined by 60 percent, and TB deaths have declined by two-thirds. Currently, an estimated 23,000 people die each year from TB in the Americas, and 270,000 become sick with TB. Haiti, Suriname, Bolivia, Guyana and Peru have the highest TB incidence, ranging from 106 to 230 cases per 100,000 people in 2010. Within Latin America and the Caribbean, the extent of HIV infection varies greatly. The lowest infection rates are reported in Bolivia, Ecuador and other Andean countries, with rates under 0.4%. On the other hand, in the Caribbean HIV rates among adults reach 2% of the population. For more than two decades, Latin America and the Caribbean have led the developing world in expanding access to antiretroviral therapy (ART) for people with HIV. To assure continued progress toward universal ART access, PAHO is promoting the transition of treatment programs into a new phase in line with the global “Treatment 2.0” initiative. It is not necessary to remember the peculiarities of all the Latin America countries. But some statistical number will express his grand diversity and the impossibility of to do one synthesis. In the different subsequent chapter will be are possible to do complementary visions. The documentation disposable it is rich and acute. Over all it this necessary to do reference to the editions of the Book Health in the Americas.1 Health in the Americas, 2012 Edition, is the latest official five–year report on the health situation, health determinants, and health trends in the Americas, issued by the Pan American Health Organization’s Secretariat. This edition encompasses two broad and complementary sections-one describes and analyzes the health situation in each of the Region’s 48 countries and territories; the other examines the salient health issue in the Region as a whole. The content of Health in the Americas provides valuable information for documenting the progress made and challenges to be faced in implementing the Health Agenda for the Americas, 2008–2017. The content of this publication describes and analyzes data over every country and territory in North America, Latin America, and the Caribbean. It is one excellente source of documentation. 1 Health in the Americas, 2012 Edition. Pan American Health Organization’s Secretariat. https://www. paho.org/saludenlasamericas/index.php?option=com_content&view=article&id=62&Itemid=57&lang= pt.

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In the year 2000, at the Millennium Summit the member states of the United Nations adopted the UN Millennium Declaration, committing their nations to a new global partnership to reduce extreme poverty and setting out a series of time-bound targets, with a deadline of 2015, that have become known as the eight Millennium Development Goals. Five of them are directly linked to global health: Eradicate extreme poverty and hunger; reduce child mortality; improve maternal health; combat HIV/AIDS, malaria and other diseases; ensure environmental sustainability. On the basis of these goals, the UN publishes every year a report summarizing global action that has been taken in order to achieve these goals. Determinants of health including food and nutrition security, water and sanitation. The outstanding question is not whether water and sanitation prevent diseases in a biomedical sense, but what interventions are appropriate and effective in settings in which piped water and sanitation are unavailable because of their expense. Primary Health Care policies and national plans, supported by development partners, are a pre-requisite for sustainable improvements in health outcomes.

2. Vaccination in the Americas A global public health dream came true in 2012 with the launch of the first ever World Immunization Week. More than 180 countries and territories in all six WHO regions focused at the same time on the importance of vaccination against deadly diseases. Since 2003, Vaccination Week in the Americas has reached some 400 million children and adults with vaccines against diseases including diphtheria, measles, mumps, tetanus, whooping cough, rubella and congenital rubella syndrome, hepatitis and influenza. Forty five countries and territories in the Western Hemisphere participated in Vaccination Week in the Americas and World Immunization Week in 2012, with the goal of reaching 44 million people. Immunization prevents an estimated 23 million deaths from vaccine preventable diseases each year. Thanks largely to vaccination, the Americas was the first region to eradicate smallpox (in 1971) and to eliminate polio (in 1991). The last endemic case of measles in the Americas was reported in 2002, and the last endemic case of rubella in 2009. Nearly all countries in the Americas have eliminated neonatal tetanus as a public health problem. Diseases including diphtheria, tetanus and whooping cough have been reduced significantly in the Americas thanks to vaccination coverage averaging 93% in children under 1. Vaccination coverage is improving globally. In the Americas, Europe and the Western Pacific, immunization coverage is more than 90%.

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Despite major progress in vaccination, many children in the Americas have not completed their vaccination schedules, and hard to reach populations continue to have lower rates of vaccination coverage.

3. Health policies and social protection Brazil and Mexico stand out as the most significant regional powers in terms of a real extent, population, and economic activity. Argentina has at times projected itself successfully as a regional power and leader, while Venezuela, has recently attempted, mostly unsuccessfully, to do so as well. In Latin America persistent social exclusion and inequities in wealth distribution and in access and use of services are reflected in health outcomes. Almost all of Latin America has now embarked on structural reform of the healthcare sector. In some countries, such as Chile and Brazil, this has meant private purchasers of medicines replacing public ones. In others, such as Argentina and Mexico, it has meant greater and more decentralised public funding of pharmaceutical purchases. The Argentine Republic the population was 40,117,096 in 2010. The performance of the public health system with regard to the neediest and the geographically remote has promoted equity by preventing maternal and child mortality, premature mortality, communicable diseases, and malnutrition, and by improving sanitation. Despite its many funding difficulties, Argentina spends proportionately more of its GDP on healthcare than other countries in the region, at around 8.6% of GDP. Studies indicate that less than 10% of the population have private health plans, while public sector health insurance nominally covers 93% of citizens. In Costa Rica the estimated population in 2010 was 4,563,500 inhabitants. In 2009, contributory health insurance coverage reached 87.6% of the total population. Major health achievements up through 2010 have included a low infant mortality rate, low maternal mortality and high life expectancy at birth. Chile estimated population in 2010 was 17,094,275 inhabitants. The Chilean economy has continued to grow steadily. In 2009, the per capita gross domestic product (GDP) was US$14,341 and annual inflation was 0.3%. The government has invested substantially in healthcare coverage and provision. In Cuba the National Health System has a complete integrated network of services based on primary care and the family physician and nurse model. It is oriented toward health promotion as well as disease prevention, cure, and recovery at all care levels. The capacity of its academic institutions is ample in terms of training human resources. Brazil, one of the five largest countries in the world, has over 190 million inhabitants. The last decade saw the beginning of a period of economic growth in Brazil, linked to improvements in income distribution and to unprecedented reductions in social inequalities and extreme poverty.

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In 2008, all municipalities in the country were connected to the water supply system, and 55.2% were served by the sewerage system. Brazil is a middle-income country with a persistent and acute poverty problem. Brazil has a per capita consumption of medicines of approximately US $51 per year. Almost half the medicines are consumed by 15% of the population, who represent the wealthiest segment of the population.2 In Guatemala there are several forms of insurance in the country: public, social security, and private. Private insurance and social security cover less than 25% of the population; 17% is covered by the Guatemalan Social Security Institute. The Honduran health system is made up of the public sector, provides services to 60% of the population. Mexico has a total population of 112,336,538 and continues to be a country of young people. In 2003, Mexico initiated a new set of health reforms which aimed to provide health coverage to approximately 50 million people who were without any form of financial protection for health. The 2003 Mexican health reform legislated the System of Social Protection in Health, of which Seguro Popular (People’s insurance) was the new public insurance scheme that assures legislated access to comprehensive health care. For 2008, 50.6 million Mexicans were living in poverty that year. Paraguay in December 2009, Resolution 1,074 of the Ministry of Public Health and Social Welfare was adopted, decreeing that all services provided by state health care centers be free of charge. The process of change that began in 2008 brought free health services and access to primary care to more than 2 million Paraguayans and should lead to structural reforms. Social security covers 17% of the economically active population. In Panamá the public health sector serves 90% of the population, but the concentration of facilities, services, and human resources in the urban areas makes their distribution inequitable and indigenous groups and remote populations have limited access to health care Perú, in 2010, the country’s population was 29,461,933. Between 2006 and 2010, Peru’s economy grew 31%, with an annual rate above 7.7%. In 2010, 62.6% of the population had health insurance.

4. Regulations related to blood transfusion Blood collection and processing centers in Latin America are part of a variety of institutions that may or may not be involved in patient care. Hospital-based blood banks, although part of the blood services of the national system, are structured to respond to the hospital’s needs, and so their resources are 2 Cohen, Jillian Clare, Expanding Drug Access in Brazil: Lessons for Latin America and Canada, Canadian Journal of Public Health 97.6 (Nov/Dec 2006): I15-8.

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allocated and managed accordingly. The situation is further complicated by decentralization, especially in federal countries such as Argentina, Brazil, and Mexico, where states or provinces have their own local authorities, including those dealing with health issues.3 Regulations related to blood transfusion began to appear in the 1960s (in Argentina, Brazil, Chile, and Costa Rica), 1970s (in Bolivia, Colombia, Ecuador, Paraguay, Uruguay, and Venezuela), 1980s (in Honduras, Mexico, and Nicaragua), and 1990s (in Guatemala, Panama, and Peru). In El Salvador, the only aspect mentioned by the law was voluntary donation in 1988. These regulations appeared first because of concerns about transmission of infectious diseases such as syphilis and Chagas’ disease. These concerns were followed by worries about hepatitis in the 1970s and then HIV in the 1980s. On the other hand, enforcement of the laws, decrees, and regulations varies from stringent (very few) to lax, and most countries do not have a well-trained group of inspectors, such as Brazil has.

5. Promoting innovation in the region Innovation has always been the backbone and underlying strength of the pharmaceutical industry. During decades the industry has delivered multiple life-saving medicines contributing to new treatment options for several medical needs. Latin America cannot be analyzed as a whole. As Mercosur, a South American trade pact, has not effectively set up a program for science, technology, and innovation, it is expected that the innovation continues to come from isolated countries, mainly from Brazil, Mexico, Venezuela, Chile, and Argentina. Indeed, in those countries, new government programs and laws have been created to stimulate those innovations. From 1950 to 2008, the US Food and Drug Administration (FDA) approved 1,222 new drugs (new molecular entities (NMEs) or new biologics). 1,103 are small molecules and 119 are biologics. However, although the level of investment in pharmaceutical research and development (R&D) has increased dramatically during this period – to US$50 billion per year at present – the number of new drugs that are approved annually is no greater now than it was 50 years ago. Indeed, in 2008, only 21 new drugs were approved for marketing in the United States, which is well below the level required to secure the future of the pharmaceutical industry.4 Latin American countries are currently moving policies to support productive development and innovation up their development agendas. In particular, they are creating new incentives and new forms of finance. Amid renewed interest in innovation, start-ups are an emerging topic in Latin American countries. 3 Gabriel A. Schmunis and Jose R. Cruz, Safety of the Blood Supply in Latin America, Clinical Microbiology Reviews, Jan. 2005, p. 12–29 Vol. 18, No. 1. 4 Lessons from 60 years of pharmaceutical innovation, Nature Reviews Drug Discovery 8, 959–968 (December 2009).

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Several Latin American countries are in the process of strengthening their existing instruments and designing new programmes to foster start-ups. Different countries in the region have adopted different support models. Latin American countries are highly heterogeneous and are implementing different support mechanisms. Innovation is growing more slowly in Latin America than in OECD countries. In Latin America, investment in research and development (R&D) grew from an average of 0.5% of gross domestic product (GDP) in 2004 to 0.63% in 2009, while in OECD countries it grew from 2.2% to 2.4% during the same period.5 The unparalleled growth of commercial biotechnology in the USA and Europe during the past two decades has also been marked by its steady development in Latin America. Brazil, Cuba, Argentina, Chile, Mexico and others have made significant strides in building their research and production capacity in modern biotechnology. A country-by-country study carried out during the past few years on 14 Latin American nations’ shows that there are over 430 biotechnology firms in the region. Currently Argentina, Brazil, Chile, Colombia, Cuba and Mexico are the Latin American countries most active in commercial biotechnology.6

6. Clinical research in Latin America Two decades ago, clinical trials were carried out only in developed countries. Among the regions of interest, Latin America has played its role successfully. There are currently an estimated 4000 clinical trials being conducted. Modernization of local regulatory guidelines is ensuring faster project start-up and shorter clinical trial approval times. The region has established regulatory bodies that are tasked with the development and enforcement of guidelines for clinical research, and the formation of ethics committees to make sure patient safety and ethical concerns are top priorities. Latin America has also proactively developed policies that adhere to the International Conference on Harmonization (ICH) guidelines on Good Clinical Practice (GCP). The number of clinical trials started in the three largest countries in the region increased significantly over the past five years. For example, the number of clinical trials started in Brazil has increased 58% (from 153 in 2005 to 241 by 2009). In Argentina, the growth in new trial starts is more modest at 16% (from 97 to 112 over the same period), while Mexico has achieved a 49% increase in new trial starts (from 106 to 158 over the same period). In March 2008, the government recognised the necessity of aligning Argentina’s quality standards with Europe’s. According to data from Clinicaltrials.gov, which 5 Start-up Latin America: Promoting innovation in the region, Anonymous. Paris: Organisation for Economic Cooperation and Development (OECD), 2013. 6 Quezada, Fernando, Commercial biotechnology in Latin America: Current opportunities and challenges, Journal of Commercial Biotechnology 12.3 (Apr 2006): 192–199.

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records clinical trial information globally, Argentina held 208 clinical trials in 2008, up from 184 in 2006. Significant efforts have been done to adequate preclinical and clinical services to the Good Standard Procedures. Local companies have launched preclinical and clinical programs, in compliance with Good Clinical Practice-International Conference on Harmonization (GCP-ICH) high-standard guidelines, and are now performing high-standard all-phase protocols in the region. Regulatory enforcement bodies, quality investigators, ethics committees ensuring patient safety, proactive Good Clinical Practice (GCP) policy development, and huge research naïve populations have been cited as contributing to Latin America’s explosive growth.7 Currently, Argentina, Brazil, Mexico, Chile, Colombia, and Peru are the primary Latin American countries conducting clinical trials. This is in large part due to the fact that their combined populations account for approximately 80% of the region’s total population, greatly facilitating their ability to meet subject enrollment requirements. Today clinical trials in Latin America have fewer delays than the United States or Europe. Nowadays, 7.5% of the studies carried out worldwide have been conducted in LA; the mean annual growth in this region has been greater than the growth experienced by developed countries, such as the United States-20% and 11%, respectively, in the last year. For instance, Brazil, Argentina, and Mexico have enrolled the greatest numbers of patients. In Brazil clinical trials opportunities abound as a number of contract research organisations expand their capacity for Latin American trials. The outsourcing of clinical trials to Latin American countries has steadily increased over the last 10 years, primarily due to the demands for greater subject enrollment. As Latin American governments continue to improve their health care and regulatory environments, this region will continue to be an important location for clinical research. An advantage of Latin America is that it has densely populated areas, with an increased likelihood that subjects will meet the prerequisites for the trial.8

7. Convergence versus harmonization With its population reaching 600 million people in 2011, Latin America is a fast growing region. Latin American pharmaceutical sales in 2011 were at $62.9 billion. 7 Rodrigues, D. G. Clinical Research and Drug Development in Latin America: Weighing the Pros and Cons, Talking about the Future, Journal of Investigative Medicine, Volume 55(5), 1 July 2007, pp. 223– 229. 8 Nievas, Ofelia Rodriguez; Schefler, Sandra Grosworsel. Trials in Latin America, Applied Clinical Trials 19.7 (Jul 2010): 52–55.

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The primary regulatory consideration across the Latin American region for pharmaceutical companies is the increasing trend toward standardized regulations. Each of the seven major markets has adopted regulations that are based on the Mercado Común del Sur or the Pan American Health Organization’s recommendations. As a developing market, Latin America is quite complicated and diverse in terms of regulatory, reimbursement, market, demographic, and political characteristics. But the road toward total harmonization is steep. One proposal has been that of “Convergence” rather than “Harmonization”. Harmonization would require changing laws in each country and is, therefore, more difficult to achieve. Convergence of regulations is considered as the most viable solution for the Latin American region.9 In other cases, such as Mexico, international agreements like the North American Free Trade Agreement protect intellectual Propriety. The Mexican federal commission for sanitary risk (COFEPRIS) also holds equivalence agreements with Health Canada and FDA for the regulation of drugs and medical devices. Additionally, in September 2012, COFEPRIS and the Chilean Public Health Institute signed a cooperation agreement that will allow for the harmonization of regulatory requirements within the Americas region, breaking the entry barrier present in many countries. Mexico has also signed other equivalence MOUs with El Salvador and Ecuador, and a MOU is in the making with Colombia. MOUs with Brazil and Argentina are expected in the near future. In May 2010, Chile became the first South American country to join the Organisation for Economic Co-operation and Development (OECD).

8. Medicines registration in the Latin America A well-functioning pharmaceutical subsystem is a critical component of the overall health system and is key to the health system’s access, equity, and efficiency. However, consistent access to pharmaceuticals remains a challenge in many national health systems. WHO’s role in medicines regulation is based on its constitutional mandate. These require WHO to support member states in their efforts to implement national medicines policies and programs, to ensure equity of access to essential medicines, medicines safety and quality, and the appropriate use of medicines.10 The requirements for the initial registration of medicines (marketing authorization) in the Americas, was prepared by the Working Group on Medicines Registration of the Pan American Network on Drug Regulatory Harmonization (PANDRH).

9 Sackman,

Jill E. Report from Latin America, Pharmaceutical Technology 37.4 (Apr 2013): 52–55. Prat, WHO Guidance for the assessment of drug regulatory systems. World Health Organization. 2007. Geneva 2007. 10 Alain

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The PANDRH is a continental forum on drug regulatory harmonization that was officially established in November 1999. Its members include the drug regulatory authorities of all Pan American Health Organization (PAHO) state members, regional pharmaceutical industry association representatives, academia, consumer groups, professional associations and representatives from the five subregional trade integration groups within the Americas, such as the Andean community, the Caribbean community (CARICOM), the Central American Integration System (SICA), the Southern Common Market (MERCOSUR) and the North American Free Trade Agreement (NAFTA). PANDRH members meet during the Pan American Conferences on Drug Regulatory Harmonization (CPANDRH), which have taken place every 2 years since 1997, in order to support the harmonization processes through the analysis of specific matters and the adoption of recommendations and harmonized guidelines that apply for the entire region. Conferences are also a way to disseminate the decisions of global initiatives on drug regulatory harmonization, such as the ICH.11 Its purpose was to provide requirements for establishing regulations and regulatory tools that will contribute to the harmonization process of medicines registration to ensuring the efficacy, quality and safety of medicines to be available in the countries of the Region. Another important legal instrument is the Certificate of Pharmaceutical Product (CPP): based on the model established in the WHO “Certification scheme on the quality of Pharmaceutical Products Moving in International Commerce (CPP).” It applies to the case of imported medicines, as it is the certificate issued by the National Regulatory Authority (NRA) issuing the health registration. This certificate also attests to the Good Manufacturing Practices (GMP) of the manufacturing laboratories. The First Latin American Conference on the Economic and Financial Aspects of Pharmaceuticals recommended that Latin American countries develop policies on generic drugs. Ecuador and Brazil have laws regulating the use of generic drugs. Part of the national health law discusses the use of generic drugs in Argentina, Chile, Colombia, Costa Rica, Mexico, Nicaragua, Peru and Uruguay Brazil in September 1999 stated that for a product to be registered as generic there was a need to prove bioequivalence.12 Less than half of all countries are implementing many of the basic policies needed to ensure appropriate use of medicines, such as regular monitoring of use, regular updating of clinical guidelines and having a medicine information centre for prescribers or medicine and therapeutics committees in most of their hospitals or regions. Irrational use of medicines is an extremely serious global problem that is wasteful and harmful. In developing and transitional countries, in primary care less than 40% 11 Hoffmann, Elise; Fouretier, Alice; Vergne, Caroline; Bertram, Delphine, Pharmacovigilance Regulatory Requirements in Latin America. Pharmaceutical Medicine 26.3 (Jun 2012): 153–164. 12 Homedes, Núria; Ugalde, Antonio, Multisource drug policies in Latin America: survey of 10 countries, World Health Organization. Bulletin of the World Health Organization 83.1 (Jan 2005): 64–70.

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of patients in the public sector and 30% of patients in the private sector are treated in accordance with standard treatment guidelines.13

9. Access to medicines as part of the right to health At least one third of the world’s population has no regular access to medicines. Inequity in access to essential medicines is part of inequity in health care. The WHO has agreed to use the legal recognition of the right to health as an indicator of a government’s commitment to improving access to essential medicines. More than 30 countries have not yet ratified the International Convention on Economic, Social and Cultural Rights and 60 countries do not recognize the right to health in their national constitution.14 The goal of universal health coverage is to ensure that all people obtain the health services they need, without risk of financial ruin or impoverishment, now and in the future. Despite the progress, the coverage of health services and financial risk protection currently fall far short of universal coverage. An estimated 150 million people suffer financial catastrophe each year because they have to pay out-of-pocket for health services. The conditions causing ill-health, and the financial capacity to protect people from ill-health, vary among countries. Consequently, given limited resources, each nation must determine its own priorities for improving health, the services that are needed, and the appropriate mechanisms for financial risk protection. Universal coverage is now an ambition for all nations at all stages of development. Per capita pharmaceutical expenditures in 2005/2006 ranged from US$7.61 in low-income countries to US$431.6 in high-income countries, with considerable variation between income groups in each country. Compared to 1995, the rate of increase is greater in middle- and low-income countries. Sixteen percent of the world’s population living in high-income countries accounts for over 78% of global expenditures on medicines.

10. Essential medicines. WHO’s model list The pharmaceutical markets of the high-income countries differ widely from those in developing countries. In the lowest-income countries, spending on medicines comes largely from household resources and has to be paid for out of pocket at the time the person is ill. 13 Requirements for Medicines Registration in the Americas Washington, DC, June 2013 Pan American Health Organization, 2013. 14 Hans V. Hogerzeil, Zafar Mirza Access to essential medicines as part of the right to health, World Health Organization 2011. The World medicines situation 2011.

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Since 2002, essential medicines have been defined as “those that satisfy the priority health-care needs of the population. They are selected with due regard to public health relevance, evidence on efficacy and safety, and comparative cost-effectiveness. Exactly which medicines are regarded as essential remains a national responsibility.” The EML is an important strategy in improving access to and use of medicines, especially for the vulnerable segment of a population. Since 1977, WHO has produced a Model List of Essential Medicines which is revised every two years. The Model List consists of a core list and a complementary list. The core list includes the medicines needed for a basic health-care system, listing the most efficacious, safe and cost-effective medicines for priority diseases and conditions. The complementary list presents essential medicines for priority diseases which are effective and safe, but for which specialized health-care facilities or experience may be needed. Today the main criterion for deciding if a medicine is essential is effectiveness. Therefore, the high cost of an effective medicine is not a reason for excluding it. The most recent version (2011) of the WHO Model List contains 445 medicines and 358 molecules excluding duplicates.

11. Intellectual property rights One relevant issue for the pharmaceutical industry is one effective intellectual property legislation. In the past, patent protection was absent in Latin America, allowing local firms to copy innovative products introduced from abroad. However, virtually all of Latin America is now covered by intellectual property legislation. During the 1994 Uruguay round of the General Agreement on Tariffs and Trade (GATT), the member states negotiated the Trade Related Aspects of Intellectual Property Agreement (TRIPS). TRIPS, stabled the minimum standards for worldwide intellectual property regulation. However, countries have pursued an increasing number of bilateral free trade agreements (FTAs) in different parts of the world. Some scholar consider this TRIPS-plus provisions are likely to prejudice public health by making access to medicines substantially more difficult.15 Led by Chile in 1991, most Latin American governments are gradually introducing legislation in keeping with WTO intellectual property rules. Most LA patent regulations are not exclusively in line with the TRIPS agreement; they are a kind of “healthy-sensitive” patent legislation that, in some instances, incorporates some of the TRIPS flexibilities. The degree of patent vigilance also varies in LA. Some LA countries still fail to accomplish some patent obligations, but some of them, such as Brazil and Mexico, have quite structured patent rights protection. Only widespread 15 Cartagena, Rosario G; Attaran, Amir, A study of pharmaceutical data exclusivity laws in Latin America: is access to affordable medicine threatened? Health Law Journal 17 (2009): 269–296.

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international cooperation and a sustainable drug development program would favour the introduction of more rigorous patent legislation and vigilance.16 But complaints have arisen in several developing countries that patent enforcement is essentially incompatible with a sound public health policy. For this reason Brazil has a system where pharmaceutical applications are studied not only by the Patent Office but also by the health authority. In turn, Paraguay adopted a Brazilian-type system and recently issued restrictive guidelines for pharmaceutical applications of its own. Lately Argentina’s have recent regulation restricting patentability of many types of pharmaceutical inventions. A Latin American initiative, the Prosur, “Proyecto Sur” (Project of the South), more formally Industrial Property Regional Cooperation System, it is an organisation formed by the patent offices of Argentina, Brazil, Chile, Colombia, Ecuador, Paraguay, Peru, Surinam and Uruguay to provide a common platform for carrying out novelty searches and patentability examinations, in order to avoid duplicating efforts. Thus in Latin America, bilateral agreements with the U.S. stipulate a basic 5 years of data exclusivity – although countries with the most recent FTAs have some flexibility to adjust the period upward or downward. The U.S. applies different data exclusivity standards to different geographical regions.

12. Poverty vs. patent policies In the past years international concern has focused on whether pharmaceutical patents interfere with access to “essential medicines” in lower-income countries. The relationship between patents and access to essential medicines it is complex. One important study finds that in sixty-five low- and middle-income countries, where four billion people live, patenting is rare for 319 products on the World Health Organization’s Model List of Essential Medicines. Only seventeen essential medicines are patentable, although usually not actually patented, so that overall patent incidence is low (1.4 percent) and concentrated in larger markets. This and other results shed light on the policy dialogue among public health activists, the pharmaceutical industry, and governments that is often based on mistaken premises about how patents affect corporate revenues or the health of the world’s poorest. Poverty, not patent policies, more often inhibits access to essential medicines in the developing world. Poverty it is the more basic reason why billions of people lack medical treatment. The failure of billions of patients to receive necessary therapies is largely a consequence of economic policies.17 16 Rodrigues, D. G. Clinical Research and Drug Development in Latin America: Weighing the Pros and Cons, Talking about the Future, Journal of Investigative Medicine, 55(5), 1 July 2007, pp. 223–229. 17 Attaran Amir, “How Do Patents And Economic Policies Affect Access To Essential Medicines In Developing Countries? Poverty, not patent policies, more often inhibits access to essential medicines in the developing world”, Health Affairs, Vol. 23, N◦ 3 (2004).

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To improve access, policy makers should improve public sector provision of care, increase health insurance coverage, and expand medicines benefit policies in health insurance systems. Protection from the risk of relatively large health care expenditures should improve access to and decrease the financial burden of care. Subsidizing health care costs by insurance schemes is crucial for overcoming financial barriers to care and protecting households from high expenditure burden.18

13. Pharmacovigilance activities Pharmacovigilance activities have been ongoing for 4 decades. Studies have increased exponentially since 1980. Contributions of Latin American countries to the field of pharmacovigilence have been remarkable, considering the constraints on these countries.19 Most Latin American countries have high or medium levels of regulatory pharmacovigilance requirements, in line with international standards. Countries that have a low requirement level must still develop a pharmacovigilance system and appropriate regulatory measures, and they are strongly encouraged and supported by the WHO. Since the early 1990s, Latin American pharmacovigilance systems have developed considerably. According to the Good Pharmacovigilance Practices for America,20 marketing authorization holders (MAH) are required to meet basic obligations, such as setting up an appropriate pharmacovigilance system, reporting adverse events and the transmit all of periodic reports to the competent authorities according to their local legislation. To date, in eight Latin American countries (Argentina, Brazil, Colombia, Costa Rica, Cuba, Guatemala, Mexico and Venezuela, a responsible person for pharmacovigilance must be designated by each MAH. The review and analysis of pharmacovigilance regulatory requirements in 21 Latin American countries showed that, for licensed pharmaceutical products, 16 countries (Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador, Guatemala, Mexico, Panama, Paraguay, Peru, Uruguay and Venezuela) have regulations for immediate reporting of adverse events. Nine of them (Argentina, Brazil, Colombia, Costa Rica, Cuba, Ecuador, Guatemala, Mexico and Uruguay) have implemented periodic reporting. For clinical trials, ten countries (Argentina, Bolivia, 18 Anita K. Wagner, Amy Johnson Graves, Sheila K. Reiss, Robert Le Cates, Fang Zhang, Dennis RossDegnan, THE WORLD MEDICINES SITUATION 2011. Access to care and medicines, burden of health care expenditures, and risk protection: Results from the World Health Survey, Health Policy 100 (2011) 151–158 World Health Organization 2011. 19 Gonzalez JC. Arango VE. Einarson TR, Contribution of Latin America to pharmacovigilance, Annals of Pharmacotherapy. 40(7-8):1394–99, 2006 Jul–Aug. 20 Pan American Health Organization. Red PARF Technical Document No. 5. Good pharmacovigilance practices for the Americas. 2010 Dec [online]. Available from URL: http://new.paho.org/hq/index.php? option=com_content&task=view&id=1592&Itemid=513&lang=en.

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Brazil, Chile, Colombia, Cuba, Guatemala, Mexico, Peru and Venezuela) also have regulations for the immediate reporting of adverse events and eight of them (with the exception of Bolivia and Cuba) have implemented periodic reporting. Vaccine safety has been developed in six countries (Argentina, Brazil, Colombia, Cuba, Guatemala and Mexico) and Argentina, Mexico, Panama and Venezuela are part of the international network SANEVA, launched by the WHO.21 There is no Latin American equivalent of the European Medicines Agency. Mercosur and PAHO can make recommendations, but cannot enforce a common set of rules the way a common governing body can. And to complicate matters, even as countries implement regulations to be more aligned with Mercosur and PAHO recommendations, they may not implement the same regulations at the same time.22 The Subregional Pharmacovigilance Programmme and the Pan American Network for Drug Regulatory Harmonization assist countries in Latin America in developing pharmacovigilance regulations that are harmonized with other Latin American countries. Bilateral free trade agreements with the USA continue. The region aims to increase its global position, in an effort to counteract other emerging markets, particularly China and India. Some of the main challenges and opportunities in the region include promoting innovation.

14. The market and the pharmaceutical industry Before the 1990s, Latin America’s trade and investment were driven by the USA. In the 1990s, Europe became the region’s leading source of trade and investment. Recently, the region looks toward Asia as the next engine of external growth. An OECD paper describes the influence of the Asian economies on Latin America. LA’s pharmaceutical market represents an important fraction of the worldwide drug sales market compared with other developing nations, approximately 25% of global pharmaceutical sales. Per capita expenditure on pharmaceuticals is considerably higher in some parts of LA than it is in other developing economies. Compared with China, countries such as Mexico and Venezuela spend more than double on pharmaceutical products −$23, $70, and $64, respectively. The region aims to increase its global position, in an effort to counteract other emerging markets, particularly China and India. The Mercosur and Andean groups, however, have proved to be quite impractical to align its members in a common front.

21 Hoffmann, Elise; Fouretier, Alice; Vergne, Caroline; Bertram, Delphine, Pharmacovigilance Regulatory Requirements in Latin America. Pharmaceutical Medicine 26.3 (Jun 2012): 153–164. 22 Sackman, Jill E. Report from Latin America, Pharmaceutical Technology 37.4 (Apr 2013): 52–55.

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Bilateral free trade agreements with the USA continue, Uruguay being the last wishing to follow Chile’s successful move; Peru and Colombia are on their way. Opportunities remain as Argentina is mirroring Brazil in order to increase its industrial capabilities whilst Mexico is keeping its pace. The eight major Latin American markets, Argentina, Brazil, Chile, Colombia, Cuba, Mexico, Peru, Venezuela represent a market of 468 million people with a GDP of US$2.7 trillion in 2007.23 Since 2008, the region is by far the fastest growing pharmaceutical market in the world. By 2017, Brazil will become the fourth largest pharma market, behind the US, China and Japan. Strong, steady growth, resiliency in the face of global downturn, positive regulatory frameworks and a motivated public all translate into one of the world leading emerging markets. But the region also poses significant barriers. In some countries, such as Columbia, Mexico and Chile, right-of-centre politics mean a favourable regulatory environment and government support. In Venezuela, Ecuador, Bolivia and Nicaragua, however, left-leaning administrations can pose challenges. Generic policies have been advocated for a long time by the World Health Organization (WHO). Generic policies are highly heterogeneous in their objectives and instruments. Brazil enacted a law in 1971 that allowed the production of patented drugs in order to provide affordable medicines, encourage research and development, and reduce dependency on imports. Eventually, pressure from the United States government drove Brazil to introduce pharmaceutical patent laws. Through Brazil’s liberal interpretation of the TRIPS Agreement, which included a provision that pharmaceutical products must be “worked” or manufactured locally or the government could turn to the use of compulsory licensing. By the year 2015, the pharmaceutical industry in Brazil, the market is projected to reach $32.8 billion. Legislation passed in 2010 gives preference to goods and services provided by domestic or foreign companies installed within the Mercosur economic bloc.24 Mexico has the second largest pharmaceutical industry in Latin America, with average gross sales around $9 billion per year. Looking ahead, Mexico’s annual growth rate for the pharmaceutical industry is projected to be 11.7% between 2009 and 2014, and will likely reach close to $14.9 billion. The government is also collaborating more with the US FDA, including by simplifying authorizations for imported products into Mexico. Additional improvements include the introduction of regulations aimed at controlling the quality of generic drugs in the country.25 23 Sackman,

Jill E. Report from Latin America, Pharmaceutical Technology 37.4 (Apr 2013): 52–55. also known as the Southern Common Market, is made up of Argentina, Brazil, Paraguay, and Uruguay. Bolivia, Chile, Colombia, Ecuador, and Peru have associate-member status in the bloc. 25 Berger, Hellen. Report from Latin America, Biopharm International 24.9 (Sep 2011): 10,12. 24 Mercosur,

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Argentina’s 2002 economic crisis and devaluation prompted the Congress to pass a law obliging physicians to use the generic names of drugs when writing prescriptions.26 Chile maintains a solid and stable healthcare system. Is the sixth largest pharmaceutical market in the region. Protectionism towards the domestic industry characterises the market. The Colombian pharmaceutical market is the fifth largest in the region. Colombia is a popular hub for offshore manufacturers looking to distribute throughout the Andean region. In the region, about 72% of pharmaceutical expenditures are out-of-pocket. Health care systems spend a relatively high percentage of their resources on the purchase of medicines, and the poor spend a disproportionate amount of their income on pharmaceuticals. There is ample evidence in the literature that drugs are very poorly used. The processes of prescribing, dispensing, and using medicines are very deficient in Latin America, and improving them is a complex and challenging task. Strong regulatory bodies and strengthened law-enforcement capabilities could deter the pharmaceutical industry from continuing to commit abuses through the drug promotion system.27

15. The harmonization of pharmaceutical regulation A growing geographical trend since the end of World War II has been the tendency for groups of countries to create regional economic blocs. The most advanced form of regional integration is the European Union (EU). The other most significant development has been the North American Free Trade Agreement (NAFTA), creating a single, tariff-free market between Canada, the United States, and Mexico. The harmonization of pharmaceutical regulation has been initiated in conjunction with the creation of regional free trade zones. Harmonization can yield gains to consumers, private enterprises, and governments. National regulatory agencies are able to benefit from the work of other agencies and streamline their own efforts, while better ensuring the quality and safety of products. The experience of the European Union has shown that the harmonization process can be long and involves significant debate among a number of parties. Agreements on drug testing and quality control are frequently easiest to achieve, whereas the harmonization of registration and licensing procedures and of drug price levels tends to be more difficult. 26 Guillaume Corpart Muller, The Outlook for Generics Pharmaceuticals in Latin America – The Outlook for Generics. Info Americas [Miami] 01 Feb 2007: n/a. 27 Núria Homedes, Antonio Ugalde, and Joan Rovira Forns, The World Bank, pharmaceutical policies, and health reforms in Latin America. International Journal of Health Services, Volume 35, Number 4, Pages 691–717, 2005.

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In Latin America, fourth main free trade zones are developing: MERCOSUR: Argentina, Brazil, Paraguay, and Uruguay; Central America: Costa Rica, El Salvador, Guatemala, Panama, Honduras, and Nicaragua Andean Area: Bolivia, Colombia, Ecuador, Peru, Venezuela, and Chile. The Caribbean Community (The 15 CARICOM countries). The case of Mexico it is different, his harmonization it is whit the North American Free Trade Agreement (NAFTA). While country members of the Mercosur and Andean groups have joined forces to combine regulations and approval processes, there have been delays along the way. Regulatory frameworks overall have improved as a result of free trade and intellectual property agreements. All fourth regions have included discussions on Good Manufacturing Practices (GMP) and registration requirements, but the progress to date has varied among them. MERCOSUR possesses the firmest structural foundations of the three and has made the most progress particularly in GMP regulations. The Central American initiatives have been hampered by a lack of legal and administrative structures needed to ensure that the agreements reached by its technical groups are uniformly adopted and implemented within its countries. The Andean area has attempted to develop a common pharmaceutical market since the 1970s, but this has still failed to become a reality. Nonetheless, progress has been made in developing essential structures to facilitate harmonization and technical groups have been formed for three areas: drug registration, GMP inspection, and quality control.28 Caribbean countries have been aligned to a number of regional integration mechanisms and associations.

16. Mexico and the North American Free Trade Agreement (NAFTA) Mexico are the second-largest drugs market in Latin America, after Brazil and one of Latin America’s most developed markets, with regulatory standards superior to most of its southern neighbours. And Mexico are strong trade links to the US, Canada and the EU.29 The improved performance by market regulator COFEPRIS has allowed Mexico to acquire a reputation for early, speedy approvals of medicines that meet urgent local epidemiological needs and allow direct access to other robust growing pharmaceutical markets in Latin America. 28 Pharmaceuticals and Health Sector Reform in the Americas: An Economic Perspective. Pan American Health Organization, 1998. 29 Moïse, Pierre; Docteur, Elizabeth, Pharmaceutical Pricing and Reimbursement Policies in Mexico. OECD. Health Working Papers 25. (2007).

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In November 2012, El Salvador and Ecuador recognised medicine registrations issued by the Mexican Federal Commission for Protection Against Sanitary Risks and allowed easy entry for pharmaceutical products approved by the organisation. It is derived from COFEPRIS’ reorganisation by the Pan-American Health Organization (PAHO) and the World Health Organization (WHO) as a National Regulatory Authority of Regional Reference of Medicines and Biological Products. We note that Chilean government has also signed an agreement with Mexico to allow pharmaceutical products registered in Mexico to enter Chile directly. The value of the total pharmaceutical market in Mexico reached US$13.36bn in 2011. Per capita expenditure on pharmaceuticals in Mexico is high compared with neighbouring countries (US$113 in 2011). Pharmaceutical expenditures are an especially important component of overall health expenditures in Mexico. Pharmaceutical spending in Mexico represented 20.9% of total health expenditure, above the OECD average of 17.7% Only 25% of Mexicans have access to a doctor and 40% of mild ailments are treated through self-medication.30

17. Mercosur Mercosur was established in 1991 and encompasses Argentina, Brazil, Paraguay, Uruguay and Venezuela which officially joined in July 2012. Paraguay is temporarily suspended from Mercosur since June 2012. The EU has bilateral Partnership and Cooperation agreements with Argentina, Brazil, Paraguay and Uruguay. The EU is currently negotiating a trade agreement with Mercosur as part of the overall negotiation for a bi-regional Association Agreement which also cover a political and a cooperation pillar. These negotiations with Mercosur were officially relaunched at the EU-Mercosur summit in Madrid on 17 May 2010. The objective is to negotiate a comprehensive trade agreement, covering not only trade in industrial and agricultural goods but also services, improvement of rules on government procurement, intellectual property, customs and trade facilitation, technical barriers to trade. The EU is Mercosur’s first trading partner, accounting for 20% of Mercosur’s total trade. Mercosur’s biggest exports to the EU are made of agricultural products (40% of total exports) and raw materials (28%), while the EU mostly exports manufactured products to Mercosur and notably machinery and transport equipment (45% of total exports) and chemicals (22% of total exports). 30 Mexico. Pharmaceuticals and Healthcare report Q2 2013. Business Monitor International www.busin essmonitor.com.

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In Mercosur are underlying principles for harmonization of pharmaceutical legislation and regulations are that there is no centralized approval system (a pharmaceutical product needs to be registered at the national level before it can be marketed in a country) and that requirements and procedures for registration should be the same in all countries. By the end of 1995, the Mercosur countries had adopted common good manufacturing practice (GMP) guidelines for production of large parenteral solutions and an inspection guide, a common guide for inspection of production facilities of pharmaceutical products, common requirements for production facilities for pharmaceutical ingredients and raw materials, an inspection guide for raw materials’ production facilities, common guidelines on GMP and quality control of blood products. 17.1. Argentina is one of the most promising pharmaceutical markets Domestic pharmaceutical companies in Argentina are more competitive than many other Latin American drug makers. But continued government resistance to aligning domestic patent law with international norms will prevent any substantial increase in multinational activity. The regulatory environment should benefit from the collaboration between Latin American regulators and the Spanish and Portuguese medicines agencies which it is hoped will lead to better regulatory services in the region. Pharmaceutical R&D activities in the public sector are focused on biotechnology. The strong education system has produced a skilled labour market, which is increasingly flexible. Argentina’s pharmaceutical market, calculated to have been worth US$7.7bn at final consumer prices in 2012, is the fourth largest in Latin America, behind Brazil, Mexico and Venezuela. The main regulatory authority in Argentina is the National Administration of Drugs, Food & Medical Technology (ANMAT). In 2008, ANMAT and Brazil’s regulator ANVISA agreed to harmonise their respective pharmacopoeias. The agencies also pledged to pool resources by sharing analytical expertise. Latin American medicine authorities have recognised the necessity of such a collaboration with their European counterparts as a significant advance towards improving regulations.31 17.2. Brazil are the Latin America’s largest pharmaceutical market Along with much of Latin America, Brazil is attracting significant international investment. Politically, the debate over generics and their accessibility in limited 31 Argentina

pharmaceuticals and healthcare. Report Q1 2014. www.businessmonitor.com.

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income countries has also drawn international attention and won backing from the World Health Organization, and the World Bank.32 Traditionally, Brazil has been Latin America’s largest pharmaceutical market. A peculiarity of the domestic pharmaceutical market is the relatively low price of medicines in comparison with other large markets in the Americas. In 2011, pharmaceutical expenditure in Brazil reached a value of US$28.72bn. The main regulatory authority in Brazil is the National Health Surveillance Agency (ANVISA). ANVISA has implemented compulsory certification of good manufacturing practice (GMP) guidelines for international drugmakers exporting to Brazil and the implementation of a recall system, which allows the immediate withdrawal of products that have quality variations or are under suspicion. The government is increasingly investing in the healthcare sector and pharmaceutical industry to reduce the financial burden of diseases.33 The local biotechnology industry is developing rapidly, presenting international players with a number of opportunities.34 17.3. Paraguay still has unsolved public health problems Paraguay still has unsolved public health problems. The National Directorate of Health Surveillance regulates medications and oversees quality control of pharmaceutical products, with the collaboration of national laboratories. A national list of essential medicines (441, including vaccines) was established, and initiatives are under way to promote the rational use of drugs and establish a national drug formulary.35

18. Andean community In June 2012 the EU signed an ambitious and comprehensive Trade Agreement with Colombia and Peru. The agreement is provisionally applied with Peru since 1 March 2013 and with Colombia since 1 August 2013. Once fully implemented, it will open up markets on sides as well as increase the stability and predictability of the trading environment. Contacts are maintained to explore a possibility to integrate Ecuador and Bolivia, who are also members of the Andean Community, into the trade deal with the EU. 32 Research and Markets: Branded vs Generic Drugs in Latin America. Anonymous. Business Wire [New York] 09 Dec 2010. 33 Jillian Clare Cohen, Public Policies in the Pharmaceutical Sector: A Case Study of Brazil, January 2000 The World Bank. Latin America and Caribbean Regional Office. 34 Brazil pharmaceuticals and Healthcare. Report Q1 2013. www.businessmonitor.com. 35 Health in the Americas, 2012 Edition https://www.paho.org/saludenlasamericas/index.php?option= com_content&view=article&id=50&Itemid=45&lang=pt.

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The EU is the second largest trading partner of the Andean region after the US. Trade with the EU was worth 14.3% of the total trade of the Andean Community in 2010. The Andean countries export predominantly primary products (agricultural products (38%), fuels and mining products (54%) to the EU. 18.1. Colombia, the majority of the market is supplied by domestic industry Colombia it is currently the fifth-largest market in the region, although its size is bolstered more by large population (of over 50 mn) than by high per capita spending on medicines. Pharmaceutical sales in Colombia are calculated to have reached a value of US$4.20bn in 2012. Patented drugs accounted for the largest proportion of medicines consumed in Colombia. Colombia’s increased state investment in healthcare services in the past few years drove strong annual growth in pharmaceutical consumption. Counterfeit drugs continue to represent up to 40% of the total marketplace and undermine research-based and true generic sales. The regulatory system remains challenging.36 The majority of the market is supplied by the relatively well-developed domestic industry. Colombia is looking to increase drug access for the whole population under the universal insurance programme (SGSSS), which should expand the market accordingly. Pharmaceutical imports and exports will increase. The Free Trade Agreement (FTA) between the USA and Colombia will result in further intellectual property enforcements which might affect the indigenous industry. 18.2. Peru, low levels of annual per capita drug consumption The Peruvian pharmaceutical market is the least attractive to multinationals in the short to medium term. It is the smallest market by absolute size, with the lowest growth rate in local currency terms. The government has made extended healthcare coverage and service a central policy goal, increasing spending on medicines. Poor IP regulation is a major deterrent to investment and new drug launches. Peru has one of the lowest levels of annual per capita drug consumption in Latin America. Peru’s prescription drug market reached a value of US $1.15bn in 2012. Expansion of health insurance programmes increasing potential for drug consumption. The Free Trade Agreement (FTA) with the US – more recently combined with FTAs with the EU and the EFTA – should improve the operating environment for foreign companies.37 36 Colombia pharmaceuticals and Healthcare Report Q2 2013. Published by Business Monitor International Ltd. 37 Peru. pharmaceuticals and healthcare report Q4 2013 Business monitor international www.business monitor.com.

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18.3. Bolivia, the state will guarantee the people’s access to medicines Bolivia, located in the center of South America, has a population of 10,426,154 inhabitants. The growing prevalence of chronic, non communicable diseases demands a care model that focuses on health promotion and on prevention, with the aim of eliminating risk factors and improving the country’s social determinants. In 2008, the social security subsector covered 30.58% of the country’s population. An estimated 11.8% of the population is covered by the public subsector. Article 41 of the new Constitution establishes that the State will guarantee the people’s access to medicines and that it will give priority to generic drugs, pointing out that access to essential drugs cannot be impeded by intellectual property rights. In the area of pharmaceuticals, the Laboratory for Quality Control of Medicines and Toxicology (CONCAMYT) has been prequalified by WHO as a reference laboratory for the Region of the Americas. 18.4. Ecuador, increased health care coverage Ecuador has a population of 14,483,499. Ecuador’s Constitution guarantees the availability of and access to medicines and promotes the development of human resources for health. The importance given to health is evident in the increase in the budget allocated to health. The country has regulations and guidelines to guarantee the availability, access, quality, and rational use of pharmaceuticals. In 2007, the share of national firms in the pharmaceutical market was 14% and that of international firms was 86%; that same year, pharmaceutical expenditures by the Ministry of Health accounted for 15.2% of the budget. 18.5. Underdeveloped market in Venezuela In Venezuela the market is underdeveloped, suffering from persistent currency devaluation, political and economic isolation and low per capita spending on medicines. International patent holders continue to face weak intellectual property protections. Government tenders are biased in favour of local manufacturers or foreign companies able to match lowest price. The trade agreement between Mercosur and the Andean Community could advance Latin American trade harmonisation. But the government resistance to pricing and intellectual property reform will prevent any meaningful increase in multinational investment. Venezuela have made the country’s pharmaceutical market increasingly unattractive to multinationals. Currency devaluation will continue to threaten the market’s growth in US dollar terms. In 2011, pharmaceutical expenditure in Venezuela reached a value of US$8.45bn. Access to medicines can be expected to become a major issue, with spending power

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still low due to the combined effects of continued underfunding in healthcare and broader economic contraction.38

19. Chile and its bilateral, regional and multilateral trade agreements Chile’s open economy and its bilateral, regional and multilateral trade agreements have facilitated a steady increase in trade between it and pharmaceutical markets globally, boosting the country’s international competitiveness. In October 2012, Chile signed an agreement with Mexico at the Ninth Meeting of Medicine Regulators of the Ibero-American Countries (EAMI), in Santiago, Chile. The trade agreement will allow pharmaceutical products registered in Mexico to enter Chile directly. Mutual recognition will benefit consumers and the pharmaceutical industries in both countries and mark a milestone for the Chile domestic pharmaceutical industry. The IP rights environment is improving slowly but steadily. The market is relatively small compared with its Latin American peers. Chile has one of Latin America’s lowest per capita drug spending rates, due to below average pharmaceutical prices. Chile, like other Latin American countries, is an increasingly attractive clinical trials location, due to low costs, high medicine standards and treatment-naïve populations.39

20. Central America pharmaceuticals The pharmaceutical market in Central America – consisting of the seven markets of Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Panama and Belize – is yet to fully develop its domestic manufacturing capabilities, and therefore depends on a large amount of pharmaceutical imports. Given the limited resources of most Central American economies, the elevated violence, corruption and social unrest that currently define the region’s political risk profile are likely to remain continued obstacles to growth. The pharmaceutical market of Central reached a value of US$3.47bn in 2012, making Central America’s combined pharmaceutical market the seventh largest in Latin America, behind Chile and ahead of Ecuador. Underdeveloped regulatory and patent linkage processes and poor clinical data protection. High prevalence of counterfeit medicines40 38 Venezuela. Pharmaceuticals and healthcare report Q1 2013. Business monitor international www.busin essmonitor.com. 39 Chile pharmaceuticals and healthcare report. Q1 2013. www.businessmonitor.com. 40 Central America Pharmaceuticals and Healthcare Report Q4 2013. 2013 Business Monitor International.

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In Costa Rica, the Advisory Committee on Drug Quality is in charge of reviewing and proposing standards in the field of drug quality as well as monitoring implementation of the Central American Technical Regulation on Pharmaceutical Products. Since 1982, has kept an Official List of Drugs in line with the National Drug Formulary. The cost of drugs in El Salvador is one of the highest in the Region. The regulation of drugs and pharmaceutical supplies is weak and is the responsibility of the Higher Council for Public Health and the Ministry of Public Health. A national drugs policy has been formulated and agreed upon. In Guatemala the public sector dispenses 25% of the drugs to patients, the private sector 74%, and “others” dispense 1%. The Department of Registration and Control of Medicines and Pharmaceutical Products of the Ministry of Public Health and the National Health Laboratory have the authority for regulating pharmaceuticals. In 2010, the Department of Registration and Control reported 15,228 registered pharmaceutical products. In Honduras the Ministry of Health estimates that the Honduran pharmaceutical market has grown to US$230 million. The market consists of new drugs (41.9%), branded generics (50.9%), and unbranded generics (7.3%). In Nicaragua national drug policy promotes access to essential drugs at no charge as well as the use of generics, in accordance with the National Strategic Plan for Rational Drug Use.

21. The health in the Caribbean region The Caribbean includes countries and territories with different political structures and status. Caribbean countries also have different legal systems. Most Englishspeaking territories operate under a common law legal system, while the other territories tend to operate under a civil law system. Most territories are considered small developing states, due to their geographic size and population size as well as the scale of their respective economies. Caribbean countries have been aligned to a number of regional integration mechanisms and associations. These challenges are reflected in the establishment of the Caribbean Community (CARICOM). The 15 CARICOM countries41 and the Dominican Republic make up the Caribbean Forum of African, Caribbean and Pacific States (CARIFORUM). These countries, together with countries of Africa and the Pacific, constitute the ACP (African, Caribbean and Pacific Group of States) countries that negotiated an Economic Partnership Agreement (EPA) with the European Union (EU) in April 2004. 41 CARICOM Member States: Antigua and Barbuda, Bahamas, Barbados, Belize, Dominica, Grenada, Guyana, Haiti, Jamaica, Montserrat, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Suriname and Trinidad and Tobago; and CARICOM associate members: Anguilla, Bermuda, British Virgin Islands, Cayman Islands and Turks and Caicos Islands.

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The framework for ACP-EU relations is centred on economic development, reductions in and eventual eradication of poverty and the smooth and gradual integration of ACP states into the global economy. The recognition of a lack of economies of scale and the need for a larger voice in the global environment catalyzed the steps taken by Caribbean countries toward regional integration through the formation of the Caribbean Free Trade Association in 1965. Although agreements are within the groups of member countries, CARICOM recognizes and pursues trade agreements with its geographic neighbors, such as Cuba, the Dominican Republic, and Venezuela. The EU experience has been instructive for CARICOM due to the similarity of the objectives, but the approach has been quite different.42 The Caribbean Commission on Health and Development, have the aim of identifying the health priorities for the Caribbean region. These priorities are currently targeted as major health issues under the Caribbean Cooperation in Health.43 In the Caribbean, the establishment of the CARICOM Single Market and Economy (CSME) provide a favourable environment for regional integration. However, there is the need for the Caribbean to focus on achieving a strong, comprehensive and integrated public health response through Health Promotion Strategies that address these priority needs. 21.1. The pharmaceutical situation in the Caribbean The goal of the Caribbean Pharmaceutical Policy is to guide Caribbean countries in ensuring equitable access to, availability of and affordability of essential medicines; quality, safety and efficacy of all medicines; and Rational use: therapeutically sound and cost-effective use of medicines by health professionals and consumers. The regional pharmaceutical policy is guided by the main principle of access to medicines as a human right. Additionally, it is guided by the values and principles of public health, with an emphasis on the renewed Primary Health Care strategy.44 According to PAHO/WHO, in 2003, only four countries reported that they had legal provisions for the establishment of a medicines regulatory authority. By 2007, this number had increased to 11. According to the CARICOM report, none of the existing legislation is fully comprehensive. Seven of the countries studied have 42 Pan American Health Organization (PAHO) and the Caribbean Community Secretariat (CARICOM). Report of the Caribbean Commission on Health and Development. Kingston, Jamaica: Ian Randle Publishers; 2006. Available at: http://www.cpc.paho.org/InfoSources/reports/cchd/CCHD%20Report.pdf. 43 Caribbean Community (CARI-COM) Secretariat. Landmarks of Caribbean co-operation in health. Available at: http://www.caricom.org/jsp/community/chronic_non_communicable_diseases/landmarks_ cch.jsp. 44 Pan American Health Organization. Caribbean Community. Caribbean Pharmaceuti cal Policy. Washington, DC: PAHO, 2013.

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privately owned pharmaceutical manufacturing plants that produce multi-source (generic) products only; four of these countries have export capacity. Although the issue of implementation of TRIPS flexibilities had been under discussion for several years, only one country had included TRIPS flexibility provisions in its legislation as of 2007. The availability and utilisation of essential medicines lists (EMLs) and standard treatment guidelines (STGs) increased in the Caribbean between 2003 and 2007. The average total expenditure on medicines in the public sector in participating Caribbean countries was (US$4,000,000), but the median per capita/per year public expenditure was nearly twice as high in the participating Caribbean countries (US$20.90) as in the Region of the Americas as a whole (US$11.50). The Regulatory framework objective are develop a sub-regional regulatory framework for medicines and strengthen collaboration among the national authorities and establish a Caribbean Network of Medicines Regulation, including the existing Pharmacovigilance Network of the Caribbean, working in close collaboration with the Pan American Network for Drug Regulatory Harmonization (PANDRH)45 ; strengthen the Caribbean Regional Drug Testing Laboratory (CRDTL)46 and support its incorporation into CARPHA.

22. Cuba seeks to capitalise on its biotech expertise The Republic of Cuba continues the ongoing process of updating its economy. The Constitution of the Republic of Cuba establishes health care and protection as a duty of the State and a right of all citizens. Total health spending as a percentage of the GDP increased from 7.7% in 2006 to 11.9% in 2010. Cuba has a large program of international collaboration and assistance for health, and contributes to human resources education and to the organization of health programs and services in several areas of the world, but especially the Region of the Americas. Cuba is one of the world’s last unreconstructed communist countries. Despite this, the country has a reputation for the quality of its health services and health indicators, and has an impressive pharmaceutical/biotechnology research sector. During the Cold War, Cuba was a major Soviet ally, and the market remained largely closed to the West. During the 1990s, however, many countries in the West established links with Cuba. Domestic pharmaceutical production has kept growing, with increasing biotechnology export opportunities not only in developing countries but also in Europe and 45 Health Research for Action/Caribbean Community. Regional Assessment of Drug Registration and Regulatory Systems in CARICOM Member States and the Dominican Republic. Georgetown, Guyana: CARICOM, 2009. 46 Currently, Caribbean Public Health Agency/Drug Testing Laboratory (CARPHA/DTL).

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other developed countries.47 Cuba maintains a list of essential medicines (CBM), with 827 in 2005, of which 521 are domestically produced. On 1995, Cuba signed on to the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), marking its official entry into the global pharmaceutical market.48 Although Cuba has limited economic resources, its health care system have too many doctors. Everybody has a family physician. The whole system It is tightly organized, and the first priority is prevention. This highly structured, preventionoriented system has produced positive results. Cuba’s literacy rate is 99%, and health education is part of the mandatory school curriculum.49 The economy is expected to do well in the 2011–2016 period, In mid-term economic policy is expected to be focused on making the economic system more flexible and promoting more private initiatives. The Cuban pharmaceutical market is the smallest in the Latin American region but, based on current research, production and trade trends would projects a moderate CAGR in dollar terms between 2011 and 2016.

47 Ernesto López Mola; Silva, Ricardo; Acevedo, Boris; Buxadó, José A; Aguilera, Angel; et al..Biotechnology in Cuba: 20 years of scientific, social and economic progress, Journal of Commercial Biotechnology 13.1 (Oct 2006): 1. 48 Jiménez, Marguerite Rose, Cuba’s Pharmaceutical Advantage, NACLA Report on the Americas44.4 (Jul/Aug 2011): 26–29,43. 49 Campion, Edward W, MD; Morrissey, Stephen, PhD. A Different Model – Medical Care in Cuba, The New England Journal of Medicine 368.4 (Jan 24, 2013): 297–299.