Bureaucracy, political upheaval, and lack of regulations continue to make Latin America a difficult market for European and North American pharma to enter – and COVID-19 has only worsened these issues.
There are a number of companies that, even in the last decade, have left the Latin American market completely because they just couldn’t handle the local nuances, such as the devaluation of currencies, economic problems, political issues, bureaucracy and corruption.
Political issues in some countries are among the most conspicuous challenges in the region, and continue to “create havoc”.
Sometimes this havoc can cause a huge swing in economic issues and lead to significant losses.
During the impeachment time of Dilma Rousseff in Brazil, business with public healthcare completely dried up. Companies had to be nimble and move very quickly to start working with HMOs and the private sector to remain profitable.
Thankfully, many governments are working towards emulating systems from other countries to make their healthcare systems more robust. For example, price regulations are becoming more common in Latin America, often being based on models such as NICE’s.
Companies from North America and Europe tend to be used to thinking in fairly logical systems – but in Latin America, bureaucracy is not always logical. Several countries have brought in regional harmonizations and regulations, and the regulatory environment is becoming increasingly sophisticated and complex.
However, increased regulation can be a double-edged sword – they increase safety and efficacy but can also make access to medicines more difficult in many markets.
National budgets are squeezed because drugs like new biologics are very expensive. National budgets are not used to spending $84,000 per patient per year for just one person who has hepatitis C, for example. They are increasingly becoming more selective in what they can import.
As a result, Latin American countries often end up importing products from cheaper but less-regulated markets like India and China, leading to some counterfeit medicines being introduced into the supply chain.
These regulations have also resulted in many essential COVD-19 products becoming unavailable in Latin American countries.
Colombia’s recent price regulations, for example, resulted in a lack of products like Midazolam, an anesthetic for people on ventilation.
Because the price regulations are so drastic, many companies who had registered products had left the country by the time COVID came, bringing to light the fragility of healthcare systems in the region.
Governments and individuals have found out that pandemic strategies are not easy to handle when you have very draconian bureaucracies in place.
Locking down ports and airports added additional problems because most of these companies, even those who manufacture locally, have to depend on APIs coming in from China and India. The entire supply chain was disrupted, and the cost of logistics often increased tenfold.”
But like in other regions, healthcare systems are finding innovative ways to get around the unique problems posed by COVID.
In countries like Brazil, where many people live in poor areas far away from centres of excellence or clinics, telemedicine and remote consultations have become very important. That trend is likely to accelerate.
Finding solutions
Many of these issues can best be sidestepped by industry and government working together.
It has to be an almost symbiotic relationship where the two systems are helping each other out and showing governments the right way to do things. Pharma needs to encourage them not to take paths that will lead to more counterfeit medicines entering their markets because they will never come back from that.
Health authorities and governments will have to rethink their strategies and reduce the barriers to entry if these challenges are to improve.
Similarly, Latin America is not part of many smaller biotech companies’ business models when they are first starting out, but partnering with companies local to the region that are organized according to EU/US laws can derisk the venture and help expand access beyond what they would normally be able to achieve.
There are many emerging markets in Latin America who are always looking to North America and Europe as being the standard-bearers of drug regulation, and they are changing the way they think based on what they’re seeing there. They’re talking to those people to see how they can regulate their prices properly and equitably.
The industry has an important role to play in helping these governments in this transition.
Helping facilitate these discussions and connections, providing education and conducting local trials are all steps the industry can take to help open up these markets even further for other companies.