Mapping the Latin American vaccine market
*Why vaccines are crucial to the health and prosperity of Latin America*
By on Mar 29, 2011Why vaccines are crucial to the health and prosperity of Latin America
The vaccine industry is looking to expand into new geographies, and Latin America might offer attractive opportunities.
The regions increasing wealth and growing awareness of vaccinations, coupled with the political and economic stability achieved during recent years, creates an interesting market for the region as a whole.
However, obtaining an overview of the Latin American market is rather difficult, mainly due to the diversity within the region in terms of regulation and development as well as the difficulties of financing vaccination programs.
Brazil and Cuba, for example, have created a strong, state-controlled vaccine industry to achieve self-sufficiency in vaccine supply. (For more on Brazil, see Breaking into the Brazilian pharma market.)
Indeed, technology transfer partnerships between domestic companies and international vaccine makers have facilitated entry into the Brazilian public sector market but have also reduced the long-term market opportunity.
In the absence of a strong domestic vaccine industry, the rest of Latin America heavily depends on vaccine imports. (For more on the Mexican pharma market, see Making the most of the Mexican pharma market.)
The current situation in Latin America is characterized by a lack of standard decision making for incorporating new vaccines, a variability in national schedules, a lack of funding, and significant diversity in regulatory frameworks.
Variability in national schedules
When a pharmaceutical company, either local or international, wants to propose the incorporation of a new vaccine in a countrys national schedule, it must informally lobby experts and health authorities.
There is no standardized process to assess the necessity in terms of disease and the offer in terms of supplier.
The decision results from a specific initiative and its technical background; decisions will be made by authorities using political criteria.
This lack of a standardized pathway creates an intense problem for the pharmaceutical industry, which must look for different channels to raise awareness among decision makers and to prove the product contributes to the health of the population.
The variability in national schedules is important because national programs are a massive opportunity for pharmaceutical manufacturers; the inclusion of certain vaccines will ensure high demand and sustainable profit in the long term.
Yet no Latin American country has an updated and complete schedule as in Europe; some have only recently included vaccines considered basic by the World Health Organization (WHO), such as pneumococcal and hepatitis B vaccines.
There are still countries that have not implemented what the WHO/Pan-American Health Organization (PAHO) guidelines in regard to the first level of general vaccination, which includes hepatitis A, DTP (diphtheria, tetanus, pertussis/whooping cough; acellular type), rotavirus, and pneumococcal vaccine.
Lack of funding and weak regulatory frameworks
The lack of funding to acquire new vaccines in order to have an updated vaccination schedule is another important feature of the Latin American vaccination markets.
Considering that vaccination is a public health issue and financing should come from public funds, resources should be identified to sustain vaccine policies and avoid government temptation to divert resources to other health-related activities.
Unfortunately, Latin American regulatory frameworks are not strong enough to guarantee this situation, a fact that impedes the entrance of new vaccines and the maintenance of universal coverage.
Certain non-governmental organisations (NGOs), such as the Global Alliance for Vaccines and Immunization (GAVI), have committed valuable help to support the purchase of vaccines.
GAVI has provided funding and logistics support to countries in Asia and Africa.
However, the majority of countries in Latin America are excluded from receiving these benefits.
According to the PAHO, only six countries satisfy the criteria required by GAVI to be eligible for such support: Bolivia, Guyana, Honduras, Nicaragua, Cuba, and Haiti, which together account for just 7% of the total Latin American population.
Due to the huge gap between rich and poor, private markets offer a promising opportunity, particularly to manufacturers of novel, high-priced vaccines that currently have little chance of being integrated into routine vaccination schedules.
The Fondo Rotatorio (Rotary Fund), operated by the PAHO since 1979, is among the most valuable initiatives facilitating the financing of vaccines.
For many years, the Fund set out guarantees when manufacturers wanted to introduce vaccines, ensuring a minimum volume of purchase.
The Fondo Rotatorio worked well most of the time, but new disease challenges and new technological breakthroughs have made the introduction of new products more difficult and expensive.
Regulatory frameworks, coupled with a lack of resources, constitute another important barrier in this market.
The lack of a common rules and evaluation, certification, and approval procedures causes delay in the introduction of new vaccines.
There is significant diversity among Latin American countries in terms of need, as the prevalence of diseases varies within the region.
The yellow fever vaccine, for example, is used in many countries in central South America, but the disease is not found in Chile because it doesn't have a tropical climate.
The diversity in need prevents a common regulatory framework and slows down the incorporation of vaccines in more than one country,
A common framework would offer a more attractive market for pharmaceutical companies and reduce prices.
Vaccines and regional development
Vaccination has saved millions of lives in Latin America; the near eradication of polio and measles are good examples.
Vaccination has also contributed to the recent economic development of the region.
However, neither the current economic context nor the opportunity to definitively eradicate some diseases has proven a strong reason for governments to find extra resources for vaccination strategies.
On the contrary, vaccination has a lower priority than other initiatives, such as the introduction of information technology and the construction of hospitals.
Even countries with higher than average GDP do not have updated national vaccination schedules.
Giving vaccination such a low priority could slow down social development in the region, especially among vulnerable groups.
Further investment in vaccines can contribute to the development of Latin America and foster health outcomes in the future.
Ruben Gennero is a healthcare and pharma Latin American markets analyst with IHS Global Insight.
For more on Latin American markets, join the sectors other key players at Market Access & Government Opportunities Mexico on April 12-13 in Mexico City and Sales & Marketing Excellence Brazil on June 15-16 in So Paulo.