PERUVIANS FEAR US FTA HERALDS DRUG PRICE RISE

As negotiations on a free trade agreement (FTA) between the US and Andean countries proceed at a crawl, pharmaceutical pricing has proved a key target for groups opposed to the plan. The president of Peruvian manufacturers' association ADIFAN recently launched a tirade against the FTA, while Peru's unpopular government wavers between denying these claims and promising to offset any resulting price increases.

Pharmaceutical patent law is also a key concern, with multinationals' local subsidiaries claiming that just 10 of the roughly 5,000 products on the Peruvian market are patented -- mainly because of widespread copying. Government sources claim that Peru's average pharmaceutical prices are already the highest in the region, and note that Chile's drug prices have not risen sharply since its own FTA with the US was implemented. However, this may owe something to Chile's competitive generics makers.

Meanwhile, Peru has removed the VAT levy on drugs, cutting average selling prices by 8%. Nevertheless, the government is reported to be implementing a system of widespread price controls ahead of the FTA.