Argentine Drug Industry Breathes Sigh of Relief as Market Continues Recovery
According to recent data from IMS Health, Argentina's drug market, worth US$1.78bn from January to November 2004, continues its rapid recovery. This represents an 18% year-on-year increase, which in itself is a slowdown in growth from the first quarter of last year, when year-on-year growth was 50%.
Underpinning this market recovery has been the country's relatively rapid recovery from its recent economic crisis. Real GDP increased almost 9% in 2003, and is estimated to have risen by 8% in 2004. Forecasts for 2005 place economic growth at a respectable 5%, indicating that market performance will stabilise after the stagnation, recession and rapid recovery of recent years.
However, some problems remain, in particular regarding the country's defaulted debt. Although the government's hard line on repayment may have eased financial pressures in the short term, in the long term this position could seriously harm the market for Argentina's debt, to which it will eventually need to turn to finance long-term growth beyond the recent rebound. In the coming years, pharmaceutical market growth is likely to be less than spectacular, as the country's financial authorities will continue to encourage the currency to remain at a relatively low conversion rate against the US dollar, making many innovative medicines expensive for much of the population.
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