Latin American pharmaceutical sales reached $37 billion in 2007, 14 percent up from the previous year. Brazil, Mexico and Argentina lead the way with 39 percent, 40 percent and 12 percent market share respectively. Brazilian per capita pharmaceutical consumption stood at $562 in 2007, 50 percent above the region-wide average of $362.
In addition to competition stemming from established multinational companies, the expiration of nearly 1,000 patents region-wide in the last four years has exponentially increased the number of generic drugs. Generic drug sales in Latin America in 2007 are estimated at $2.72 billion, up 27 percent from $2.15 billion in 2006.
With such promising growth figures, it is no surprise that drug manufacturers worldwide have their eyes set on this market. Packaging is a critical factor in the purchasing decision of Latin American consumers, and needs to be carefully considered by manufacturers who hope to operate successfully in the region.
In 2007, pharmaceutical packaging production in Mexico was estimated at nearly $28 million. It was led by plastic bottles, followed closely by blister packs and other flexibles. Sales of glass bottles, ampoules and vials were much less significant, pointing to clear consumer preferences. However, factors apart from preferences are also taken into account when a pharmaceutical company launches a medication into the market.
The foremost and decisive factors are the medicine’s own characteristics. Whether it is sensitive to light or humidity, for example, will determine a manufacturer’s decision of flexible packaging over a plastic bottle. Due to the activeingredients, chemical composition and patient reaction, a manufacturer will on occasion be forced to produce a medication in a less desirable form such as an injectable solution or a suppository.
Primary and secondary packaging play a decisive role in completing a sale, even more so in the OTC segment. When a customer is comparing medications, packaging can help resolve their indecision. Attractive designs and colors play an increasingly important role in the purchasing decision, but a package must also assure the patient that they can trust the medication, and that it will produce the desired effect.
Primary packaging (the layer closest to the pharmaceutical product) is of utmost importance, particularly in a Latin American market increasingly conscious of accidental drug ingestion by children, or of elder persons’ needs. Climatic conditions are especially important when distributing in tropical countries where factors such as humidity and UV ray exposure may exist.
Another important consideration is the high level of delinquency in the region. Lack of government insurance and access to medications has led to the emergence of numerous black markets across Latin America. The situation is worse in certain countries, but prevails across most of the continent. The World Health Organization (WHO) estimates counterfeit drugs represent between 10 percent and 30 percent of medicaments sold in Latin America. Pharmaceutical manufacturers operating in the region should protect their genuine drugs with enhanced mechanisms such as laser printing for tamper-proof labeling, a surprisingly uncommon practice in Latin America. Other mechanisms include simple hologram technology, or tamper-evident labeling in bottles and boxes.
In the coming three to five years, companies are expected to implement sophisticated chip technology in primary and secondary packaging to help reduce the risks of counterfeit drugs. These companies may develop more customized solutions to deal with the complex issue of pharmaceutical fraud.
To take advantage of the $37 billion Latin American market, successful manufacturers will need a comprehensive strategy that encompasses not only effective medications with innovative active ingredients, but also range of other marketing issues, including distribution, sales and communications. A well-designed product package that takes into account local consumer preferences, safety considerations and drug characteristics will help companies gain a competitive edge in this fast-growing market.
This article is republished with permission from Tendencias, the magazine of Kroll InfoAmericas.