The way that payment is structured varies tremendously. For example, in Mexico, the government pays for approximately 45%
of healthcare—significantly less than other Latin American countries. Other markets in the region, particularly Venezuela
and Chile, have implemented Latin American social medicine (LASM) practices. In Venezuela, these practices have manifested
as Mission Barrio Adentro, a national social welfare program comprised of neighborhood healthcare clinics built in the past
decade intended to provide universal primary care to Venezuelans. Though both WHO and UNICEF have praised the program for
its holistic approach to community health, critics have argued that building the planned 8500 local clinics siphons resources
away from traditional hospitals.
It’s crucial that pharmaceutical companies understand how healthcare is delivered in each Latin American market, because there
is such a degree of diversity. How payment is structured and care is delivered impact the number of stakeholders to whom companies
have to present the case for their products.
Key market considerations
Beyond understanding the regulatory landscape of each market, there are other market characteristics to consider as well.
For example, in some markets like Argentina, the majority of pharmaceutical sales are currently going to domestic companies.
Chile, on the other hand, only produces a small amount of medical equipment locally, though some protectionist regulation
meant to encourage local industry complicates the landscape for companies looking to expand there. Some countries, such as
Colombia, produce pharmaceuticals that are imported by other countries in the region, especially Venezuela.
Beyond the current makeup of the pharmaceutical industry in each nation, understanding the demographics and political landscape
of each market is essential. Chile, for example, while smaller in market size than Brazil or Argentina, has the highest gross
domestic product (GDP) per capita in Latin America. In May 2010, Chile became the first South American country to join the
Organisation for Economic Co-operation and Development (OECD).
The Mexican market offers some other demographics that make it attractive for healthcare. The population has continued to
grow by nearly 9% between 2005 and 2010, at the same time that life expectancy also increased. In addition, the Mexican government
has, in the past decade, launched programs aimed at expanding health insurance. In 2003, the government started Seguro Popular,
which offered publicly provided health insurance to some poor families. In the years since, Mexico has launched other initiatives,
including Medical Insurance for a New Generation aimed at disadvantaged children under the age of five, and Universal Care
Coverage for Pregnant Women in 2009. Health spending is still lower than the OECD average, but coverage has increased.
The existing infrastructure must be kept in consideration. Mexico has a considerable manufacturing industry, but its research
and development sector is less developed. Mexico spent $6.4 billion, or 0.4% of its GDP, in R&D across all sectors in 2011.
As a percentage of GDP, this is less than half as much as Brazil spent the same year, and less than a quarter of the OECD
average (2, 3).