MEXICAN IP REFORMS COULD BOOST LATIN AMERICA'S COPY DRUG MARKET

Recent reforms in Mexico intended to remove cheap, patent-infringing copy drugs off the market could have unintended consequences. With tougher intellectual property laws, local copy drug firms could choose to relocate elsewhere in Latin America. Mexico updated its intellectual property legislation in February, requiring drugmakers to re-register their products and prove bioequivalence by 2010.

One example of this emerging trend is Farmacias Similares, part of a business empire reportedly worth US$600mn, owned by Mexican magnate Víctor González. The chain has denounced the recent intellectual property reforms, amid claims that U.S. drug multinationals bought votes in Mexico's Congress to secure the law's approval. González -- who compares himself to billionaire U.S. philanthropist and former presidential candidate Ross Perot -- has expanded his company's presence in Peru, Argentina, Chile and Central America.

Further expansion plans are also underway in Colombia, coinciding with new national legislation, which should ease generic prescribing. Local sources believe that as doctors will not be obliged to state brand names on prescriptions, the poorly policed copy market -- which already accounts for 40% of pharmaceutical sales in Colombia -- is set for a boost.

Meanwhile, one of the few barriers facing copy drugmakers will be tougher patent terms in regional agreements such as CAFTA and the U.S.-Andean Free Trade Agreement. It is also expected that some governments will act to protect their own generic drug manufacturers. Nevertheless, given lax law enforcement and strong demand from the region's poor, illicit copies are likely to retain a significant market share in Latin America for the foreseeable future.