Chilean Pharma: Exploring Beyond Copper - Pharmaceutical Executive

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Chilean Pharma: Exploring Beyond Copper


Pharmaceutical Executive



PHOTO CREDIT / DIEGO CARCAMO SILVA
Considered to be Latin America's economic powerhouse, Chile is typically a solitary country that is forgotten, or remembered, because it is the most politically and economically stable in the region and therefore produces minimal headlines for the world—unless they involve tragic seismic events or heroic mining rescues. This loosely-populated nation of almost 17 million is ranked as the 30th most competitive country in the world (ahead of Brazil and Mexico), holds an A+ credit rating, a AA grade for investments and is the only Latin American nation accepted as a member of the OECD. With health indicators such as life expectancy and infant mortality rates that rival those of most developed nations, surely this country's healthcare and pharmaceutical sectors must also be thriving. Indeed Chile's pharmaceutical industry, estimated at US$1.5 billion in 2010 and expected to reach US$2 billion by 2015, is lucrative but has not always been the most popular among Big Pharma. For decades the country has been notorious for producing the cheapest similar and generic drugs in Latin America, some of them marketed in violation of patents and without proper bioequivalence studies. With other serious issues such as the concentration of distribution channels into three main pharmacy chains that control 93% of pharmaceutical sales and the dominance of a "lowest price wins" public healthcare system, representing 80% of the population, the country's pharmaceutical sector quickly became uninviting for innovators. This was up until 2006 when then President Bachelet saw the great need to overhaul the healthcare system of her country and began a series of reform policies that marked the beginning of the sector's revitalization. While efforts are still ongoing, the push for a modern and efficient healthcare system is in full force today and the country is now poised to offer fresh and attractive opportunities within its own borders and beyond, for local and foreign companies alike.

SANITIZING THE HEALTHCARE SYSTEM


"A major issue for our healthcare system is related to the structure and quality of health institutions, including hospitals and regulatory entities." — JAIME MAÑALICH, MINISTER OF HEALTH
Pharmaceutical demand in Chile is focused on 80 diseases that are covered by the Regime of Explicit Health Guarantees (GES-AUGE) healthcare program enacted in 2005, which ensures government-funded coverage for patients regardless of age, class, and ability to pay. While this universal health plan covers four-fifths of the population, under Chile's dual healthcare system the remaining 20% is entitled to pick their coverage from a number of private insurance companies known as ISAPRES. Jorge Rodriguez, CEO and general manager of Deloitte Chile, explains that "the private healthcare system began operating in 1981 and since then it has been perfecting itself to offer the highest quality services. Governmental authorities have witnessed this transformation and today are aiming to improve their provision of healthcare so that it is on par with those offered by the best private providers in the country." As a key partner to the healthcare sector, Rodriguez aims "to assist the government in their objective of providing better healthcare to a greater number of people in Chile" by providing consulting and advisory services to the government's reform initiatives.


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