Portugal: Riding the Wave of Economic Reform - Pharmaceutical Executive


Portugal: Riding the Wave of Economic Reform

Pharmaceutical Executive

Pick a Partner, Please

IMS Health, a longstanding source of information analysis for the pharmaceutical business, has found an immense opportunity to develop its consulting skills. Carlos Mocho, general director for Spain and Portugal, explains: "Following an aggressive strategy of establishing partnerships and hiring skilled talents from established companies such as Deloitte, KPMG and Boston Consulting Group, IMS Health has consolidated its consulting division." The impact of the shift has been immediate. "IMS Health Iberia is growing above 20% per year," continues Mocho. "The traditional areas of information analysis are following the global IMS trend of 12% increase; on the other hand, the new areas have a major contribution in these successes, reaching 40% increases in some cases."

The new structure of IMS Health Iberia divides the company into two parts, one focused on information management and the other on health economics. "Recently, IMS Health has acquired a company in Barcelona called HRO Group that enlarged our competencies in such fields," Mocho says of the expansion of the company's consulting business. "At the moment, there are 10 people in Portugal and 30 in Spain involved in the consulting business." Furthermore, IMS Health has decided to take a strategic approach combining its Iberian operations in Lisbon. "We are discussing two very close regions. The Portuguese market, compared to some regions in Spain, is very similar in terms of size and trends. As an example, the trend is taking companies such as Pfizer or Merck Sharp & Dohme to introduce products and approach clients in both markets at the same time. In such a way, IMS Health can provide better services to its clients."

ITF Farma, part of the Italian Italfarmaco Group, is one of IMS Health's clients. When separating from its Portuguese partner in 2003, ITF took into account the particular nuances of the Portuguese market to design a tailor-made approach. "The size of the Portuguese market demands a very particular strategy. In addition to having the traditional portfolio of the group, Portugal has some generic products that no other facility in the group has, considering that it is a very good financial opportunity," says Ana Girbal, general director of the company in Portugal. "In terms of results, if you have to break even by the fourth year as an independent company in the country and increase investments, you have to be very pragmatic," she continues. "The group's traditional core business is represented by the cardiovascular and immuno-oncological areas; nevertheless, ITF Farma Portugal does not have products related to such areas, with the exception of generic products." The strategy has proven to be very effective as the company moves toward a US$12 million turnover in 2007, representing an increase of 13% compared with 2006.

Generics at a Crossroads

Joao Gomes Esteves
The generic market was a latecomer to Portugal, having been legally authorized in 2002. Nevertheless, the favorable conditions created by the government have turned the category into a remarkable success story, allowing it to flourish beyond almost anyone's expectations. "Nobody believed, me included, that the generic market would represent 16% of the market in only four years. That was the projection for a 10-year period," says Apifarma's Gomes Esteves. As generic products are, on average, 35% cheaper than innovative products, the government has identified the segment as a tool to reduce its reimbursement bill. As a result, the government has decided to invest heavily in educational campaigns targeting doctors, pharmacists and consumers, and approvals for product introduction have been easily obtained. The additional 10% subvention on the reimbursement scheme has also been a critical factor in the successful implementation.


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