Portugal: Riding the Wave of Economic Reform - Pharmaceutical Executive


Portugal: Riding the Wave of Economic Reform

Pharmaceutical Executive

OTCs: Off and Running

Within the Portuguese pharmaceutical industry, the generic market is said to be the protégé of the former Portuguese government, and the OTC market the son of the current one. When Prime Minister Jose Socrates took office in 2005, his first official speech sowed the seeds of what would grow into a pharmaceutical sector revolution in Portugal. At that time, Socrates announced the enlargement of the distribution channels for over-the-counter products and the potential to sell them in non-pharmacy outlets.

250 Stores Already Selling OTCs

Given the social forces in the country, it was a courageous decision and a difficult one to implement.

"In Portugal, retail pharmacies are very well organized, concentrated and extremely powerful. Needless to say that the class has been totally hostile to this initiative; in fact, there are even rumors that the National Association of Pharmacies was pressuring intermediary sellers not to supply non-pharmacies," says Minister of Health Antonio Correia de Campos. "Moreover, the association owns 49% of one of the biggest local distributors, Alliance Unichem, and with the shares of sister companies it controls up to 60% of the country's pharmaceutical distribution." At the moment, there are 250 stores already commercializing OTC products. "I would say that only when we reach 1,000 there would be significant volume to compete with the traditional commercial circuits," Correia de Campos concludes.

The expected time frame for achieving such results is around four years. The non-pharmacy outlets must adhere to strict selling conditions, which makes the National Institute of Pharmacy and Medicines (INFARMED) a big part of this process. "As INFARMED had to create all the support structure and organization of a new area, we were not very sure how the industry would react," says Vasco de Jesus Maria, president of INFARMED. "Fortunately, there was a very good reception, which made the entire implementation possible in a shorter period of time. As a result, sales in the new outlets are increasing, reaching about 1.3 million (US$1.7 million) since the adoption of this measure in 2005."

The recent interventions should bring the Portuguese OTC market share closer to that of other European countries; however, the market is still relatively undeveloped. "It will take time; the current OTC market share in Portugal is below 10%. The richer the country, the more OTC products; the poorer the country, the more people try to access the reimbursement system," says Apifarma's Gomes Esteves. He is, however, very optimistic. "The market will grow up to 50% over the present figures. In other words, from the current 8% it would reach a 12% market penetration." Bear in mind that the average for the European Union member states is around 15%. To foster an increase in market share, INFARMED is very aware of its responsibility to review the product list and give companies the ability to move products from non-reimbursed (but still under prescription) status to OTC status.

Jose Verissimo
"Currently, there are many more active substances classified as non-prescription medicines, and in the forthcoming months the number of OTCs will increase considerably," says Vasco de Jesus Maria, president of INFARMED. "From our most recent assessment, 44 new active ingredients will get OTC status, corresponding to 400 new presentations. Currently, it is a small market, but I am sure it will grow very much in the near future." In addition to that, the promotion of OTC products is very much in line with the governmental reality of budget constraints. A study conducted by the European Association of Auto-medication in 2004 concluded that if OTC sales rose 5%, the Portuguese state would save approximately US$200 million.


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