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    LatinPharma 2003: Forging Alliances Between 'Natural' Partners


    © International Trade Centre, International Trade Forum - Issue 2/2003

    To form partnerships, natural product companies need to develop internationally-accepted business practices.

    The world market for natural products is estimated to reach US$ 100 billion by 2010. Medicinal products make up around 80% of this market. By linking up pharmaceutical and natural product companies, ITC is assisting the pharmaceutical industry in Latin America to become competitive exporters of natural medicinal products.

    Natural resources are found across the developing world, but developing countries have not explored the commercial possibilities for this rich biodiversity in depth. Peru, for instance, is home to about 20% of the world's medicinal plants, yet in 2002, its exports of natural medicinal products were a meagre US$ 5 million, or the equivalent of 0.03% of world exports.

    Encouraging business development

    ITC's LatinPharma initiative supports business development and the strengthening of intra-regional trade in the Latin American pharmaceutical industry. In 2002, its first year, LatinPharma explored the topic of generic drugs and related business opportunities for the region.

    LatinPharma 2003 focused on fostering strategic alliances between pharmaceutical companies and producers of natural medicinal products in the Andean Community. The two are obvious partners in the region: pharmaceutical companies have the production capacity, marketing know-how, access to financial markets and distribution channels - but they are operating below capacity, due to competition from multinational drug firms. Natural product companies have access to raw materials, research and development of new formulas, and a customer base which is about twice the size of that for medicines.

    Trade support institutions in each Andean country undertook supply and demand studies with specialized associations to analyse the markets and verify the potential for these partnerships. Overall, the studies revealed very positive prospects, with the region's export potential estimated at US$ 61 million. However, to make business partnerships a reality, natural product companies still need to address some issues. The most important are:

    • developing internationally accepted practices, such as quality management, good manufacturing practice (GMP), packaging and bio-equivalence studies (see below); and

    • obtaining legal advice on various issues related to doing business, such as patents and intellectual property rights to protect their knowledge.

      Comprehensive approach

      A virtual discussion forum to identify and debate issues prepared the way for a series of conferences, a trade fair and a buyers-sellers meeting (Lima, Peru, July 2003). During the conferences, Latin Americans shared both successful and unsuccessful experiences. International experts provided advice on many issues dentified by the studies, such as the harmonization of registration procedures.

      Learning how to market a company and its products is the final step to becoming export-ready. LatinPharma's trade fair, while small scale, allowed small and medium-sized businesses to 'experiment' with this kind of event in order to participate eventually in larger international gatherings. The trade fair also targeted industry suppliers such as machinery and packaging companies.

      After learning so much, participants got down to business. ITC screened company profiles and arranged one-to-one meetings between potential business partners.

      A role for everyone

      As LatinPharma 2003 dealt with natural products, ITC requested the knowledge and input of UNCTAD, and particularly its BIOTRADE initiative. UNCTAD organized a series of parallel workshops specifically for the natural products sector, as well as a round table with regional experts on key issues such as patents. Regional institutions also played a key role in organizing the event. LatinPharma 2003 was held at the Secretariat of the Andean Community of Nations, while the Andean Development Corporation financed the participation of regulatory and accreditation agencies.

      What is bio-equivalence?

      Bio-equivalence studies compare a generic or innovative pharmaceutical product to the leading product available in the market, to determine its pharmacokinetic equivalence (or bio-equivalence). A drug is defined as bio-equivalent if it is similar to the market leader in the rate and extent of absorption of the drug into the body. A bio-equivalence study usually comprises a clinical phase: in which healthy volunteers receive, on two separate occasions, a single dose of the test drug. The volunteers are confined to a clinic and blood samples are collected at predefined time intervals. These samples are subsequently analysed in a drug analysis laboratory, to measure the concentration of the drug and/or drug-metabolite in the sample. This information is processed and interpreted to determine the bio-equivalence parameters described above.

      For more information about LatinPharma, contact Emmanuel Barreto, ITC Adviser on South-South Trade, at barreto@intracen.org