Argentina
This case study on Argentina was carried out by Luis Mariano Genovesi, UNCTAD Consultant and Law Professor at Universidad de Buenos Aires, Argentina. The case study report was finalized by Kiyoshi Adachi and Christoph Spennemann of the Intellectual Property Unit, under the overall responsibility of Mr James Zhan, Director of the Division on Investment and Enterprise, and Mrs Nazha Benabbes Taarji, Officer-in-Charge, Investment Capacity-Building Branch. The assistance of Erin Close, Intern, in the finalization of this document is gratefully acknowledged.
Contents
Abbreviations 17 1. Background and methodology 18 2. Description of the firm, structure and range of products 19 3. ELEA’s technological capacity 21
3.1 In-house research and development 22
3.2 Licensing agreement with Warner Lambert/Pfizer 23
3.3 Strategic alliance for development with Argentine universities 24
3.4 Participation in the Sinergium Biotech Consortium 25
4. The pharmaceutical market in Argentina 26 5. The framework for local production and technology transfer in Argentina 33
5.1 Drug regulation 33
5.2 Marketing authorization 33
5.3 Clinical trials 37
5.4 Drug prescription by international nonproprietary name 38
5.5 Patents 38
5.6 Transfer of technology and foreign direct investment 39
5.7 Industrial policies 41
5.8 Science and technology policies 42
6. Analysis of ELEA 44 7. Implications of local production and related technology transfer
on access to medicines 46 8. Policy-relevant findings 47 References 51 Annex: Interviewed individuals and institutions 53
Abbreviations
ACTH corticotropin ANMAT
Administración Nacional de Medicamentos, Alimentos y Tecnología Médica (Drugs, Food and Medical Devices National Administration)
ANPCyT Agencia Nacional de Promoción Científica y Tecnológica (Scientific and Technological Promotion National Agency) CILFA Cámara Industrial de Laboratorios Farmacéuticos Argentinos ELEA Laboratorio Elea S.A.C.I.F. y A.
FONARSEC Fondo Sectorial Argentino (Argentine Sectoral Fund) FONCYT Fondo para la Investigación Científica y Tecnológica
(Scientific and Technological Research Fund)
FONTAR Fondo Tecnológico Argentino (Argentine Technology Fund) GAD glutamic acid decarboxylase
G-CSF human granulocyte-colony stimulating factor, recombinant GYM GyM S.A. (originally Golosinas y Medicamentos)
hCG human chorionic gonadotrophin hMG human menopausal gonadotrophin HTS Harmonized Tariff System (Mercosur)
INDEC Instituto Nacional de Estadística y Censos (Statistics and Census National Institute)
INPI Instituto Nacional de la Propiedad Industrial (Industrial Property National Institute)
LHRH luteinizing hormone-releasing hormone
MCN Nomenclatura Común del Mercosur (Mercosur Common Nomenclature)
MINCyT Ministerio de Ciencia y Tecnología (Science and Technology Ministry)
PIC/S Pharmaceutical Inspection Convention and the Pharmaceutical Co-operation Scheme
PMSG serum gonadotrophin
SPPS solid-phase peptide synthesis TRH thyrotrophin-releasing hormone UBA University of Buenos Aires UNQ Quilmes National University
1. Background and methodology
This case study was designed to investigate the high prevalence of domestic pharmaceutical companies in Argentina, the source of their technology, the factors behind their sustainability, and the issues that local companies currently face. Specifically, this case study examines the technological innovation strategy of a large Argentine pharmaceutical company through its research and development (R&D) efforts; the transfer of technology from multinational R&D-based firms to local firms in Argentina; and strategic alliances with public universities and R&D institutions, including South–South cooperation.
UNCTAD thanks Laboratorio Elea S.A.C.I.F. y A. (ELEA) for agreeing to be the subject firm for this case study.
A case study research methodology was used in this study. Data were collected from academic literature and policy documents and through open-ended, face-to-face interviews with individuals in Argentina. Interviewees were identified through purposive sampling. For the preparation of this case study, 18 people from various sectors of the pharmaceutical industry were interviewed, including 10 pharmaceutical experts (affiliated with Laboratorios Beta, Roemmers, Raffo, ELEA, Cámara Industrial de Laboratorios Farmacéuticos Argentinos (CILFA), Gador, Tecnofarma and Chemo); 5 government representatives (from Administración Nacional de Medicamentos, Alimentos y Tecnología Médica (Drugs, Food and Medical Devices National Administration;
ANMAT), Ministerio de Ciencia, Tecnología e Innovación Productiva (Science and Technology Ministry; MINCyT), and Instituto Nacional de la Propiedad Industrial (National Industrial Property Institute; INPI); 2 university representatives (from the Pharmacy and Biochemistry School of the University of Buenos Aires and Quilmes National University; UNQ); and 1 representative of Fundación Mundo Sano, a nongovernmental organization (NGO).1
In addition, a semi-structured questionnaire designed to capture the dynamics of firm-level activities related to production and technology transfer was administered to the above-listed firms, the results of which are included in the case study where relevant.2
This case study defines innovation as any new product, process or organizational change that is new to the enterprise, context and country in question. The innovation need not be novel to the world at large (UNCTAD, 2007). In keeping with the scope of the project, technology transfer is defined as all components of technology, both codified (such as blueprints, hardware, machine parts and plant technologies) and tacit (such as know-how and skills), that are essential to enhance the capacity of the organizations in the recipient country to produce pharmaceutical products.3
1 See Annex: Interviewed individuals and institutions.
2 See Annex: Field questionnaire.
3 A uniform definition of technology transfer was used for all components of the project, including the trends survey, the regional dialogues and the stakeholder analysis.
2. Description of the firm, structure and range of products
ELEA is an Argentine laboratory located in the city of Buenos Aires. It was founded in 1939 under the name Argentine Endocrine Laboratory. In 1973, the company converted to a public limited corporation and changed its name to ELEA. The shares of ELEA have been held by the Gold, Sielecki and Sigman families since the 1990s; none of the ELEA shares are publicly traded.
These three families possess extensive experience in the pharmaceutical sector, including more than 60 years of management experience gained after founding other laboratories.4
In 2003, ELEA merged with GyM S.A. (GYM), another laboratory controlled by the same shareholders. GYM had served as the Warner Lambert Company’s (Warner Lambert)5 licensee for the complete Parke Davis line of products in Argentina since 1989. After the merger, ELEA assumed the role of Warner Lambert’s licensee, a role it continues to fill. ELEA also possesses licences to commercialize products made by Chiron Corporation (vaccines) and Novo Nordisk (hormone therapy), and a promotion agreement with Novartis for its line of transdermal patches in hormone therapy.
In 2003, ELEA’s sales ranked seventh out of all domestic and multinational laboratories operating in Argentina. By 2009, ELEA held 3.8% of the market and reported sales of US$ 145.5 million. ELEA also improved its ranking two spots and moved up to the fifth position, behind Roemmers, Bagó, Bayer and IVAX.6 Compared with other domestic laboratories, ELEA ranked third.
ELEA’s main market is the domestic one. In 2009, ELEA exported US$ 4.6 million of pharmaceutical drugs, which represents only 0.6% of Argentina’s total exports of finished pharmaceutical products. But ELEA exports its products to diverse destinations, including Azerbaijan, Bolivia, Brazil, Chile, Colombia, Dominican Republic, Ecuador, Guatemala, Lebanon, Mexico, Panama, Peru, Spain, Switzerland, United Arab Emirates, Uruguay, Turkey, Turkmenistan and Vietnam.
ELEA operates one manufacturing facility in the city of Buenos Aires. This plant produces solid, semi-solid and liquid formulations, but it specializes in liquid solutions. It is one of the most sophisticated pharmaceutical facilities in Latin America. The facility has the capacity to annually produce 50 million tablets, 50 million capsules, 109 tons of semi-solids (29 million suppositories and 1.2
4 The Gold family founded and managed Chemotécnica Syntial. In 1997, the then GD Searle (now Pfizer) purchased Chemotécnica Syntial’s pharmaceutical division. The Sielecki family founded and managed Laboratorio Phoenix, which the family sold to GlaxoSmithKline in June 2010 (see http://www.gsk.com/media/pressreleases/2010/2010_pressrelease_10053.htm).
5 Pfizer acquired Warner-Lambert Company in 2000. Thus, ELEA’s licensor is Pfizer (see http://
www.pfizer.com/about/history/pfizer_warner_lambert.jsp).
6 ELEA is ranked first in the sale of statins (11.1% of the market share), bisphosphonate bone calcium regulators (28.5%), antiepileptics (20%), laxatives (21.6%), antihistamines (18.8 %), antacids (86.4%), and antipruritics (80.9%). Furthermore, ELEA is second in sales of hormone replacement therapy (21.3%) and hormonal contraceptives (22.2%). Source: ELEA.
million ointments), 800 m3 of solutions, and packaging for 16 million units. A Uruguayan company related to ELEA also operates a second plant in Uruguay for the production of specific hormonal and contraceptive medications.
ELEA’s current portfolio is very diverse: it consists of 120 products and is available in 286 different presentations. The drugs cover a wide range of therapeutic areas, such as (i) a female health line, with a focus on osteoporosis, contraceptives and hormone replacement therapy; (ii) a cardiovascular line, consisting mainly of lipid-reducing agents, antihypertensives, potassium-sparing products, antiplatelet therapies and oral antidiabetic therapies; (iii) a neuroscience and psychiatric line, including antiepileptic, antidepressant and antipsychotic products; (iv) vaccines, including antimeningococcal polysaccharide (B+C) vaccines and hepatitis B vaccines; (v) an anti-infective and medical clinic line, including antibiotics and antivirals, anti-inflammatories, analgesics, antacids, antihistamines and antihaemorrhoidal products; (vi) antiretroviral medications for human immunodeficiency virus (HIV) and acquired immunodeficiency syndrome (AIDS);7 and (vii) over-the-counter products, such as laxatives, dermatological products, pregnancy tests and antacids. The composition of sales by product line is shown in Figure 1.