PHARMACEUTICAL INDUSTRY
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Table of conents
1. Why invest in the pharmaceutical and health industry in Uruguay? .......................... 3
2. Characterization of the sector – Segments and stakeholders .................................... 7
2.1 R&D process support ........................................................................................................... 7
2.2 Clinical Research ................................................................................................................ 15
2.3 Manufacturing ................................................................................................................... 18
2.4 Logistics and regional distribution .................................................................................... 23
2.5 Business service centers .................................................................................................... 24
2.6 Information technology and health .................................................................................. 26
3. Availability of Human Resources ........................................................................... 28
4. Institutional framework ....................................................................................... 37
5. General and sector-based regulatory framework ................................................... 39
5.1 General incentives ............................................................................................................. 39
5.2 Specific sector incentives .................................................................................................. 43
6. Main challenges ................................................................................................... 45
7. Annexes .............................................................................................................. 47
7.1 Trade agreements and investment protection ................................................................. 47
7.2 Global trends ..................................................................................................................... 49
7.3 Uruguay at a glance (2013) ............................................................................................... 53
PHARMACEUTICAL INDUSTRY
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1. Why invest in the
pharmaceutical and health
industry in Uruguay? This report describes Health and
Pharmaceutical Industry-related services
developed in Uruguay. This report has
been prepared to provide updated
information on the services offed in
Uruguay to health companies and
institutions and is a guide for international
stakeholders who seek investment or
partnership opportunities in the country in
these fields.
Uruguay features a series of general
conditions which have been held during
several years and that position it as a
privileged destination, for the location of
operations of global firms.
Uruguay's main crosscutting benefits
MARKET & NEARSHORE
• Easy access to Brazil and Spanish-speaking countries
• Convenient time zone & cultural affinity
• World-class facilities & connectivity
RELIABILITY
• Strong democracy, political, social & economic stability
• Easy for business & free capital or profit repatriation
• Outstanding tax benefits & government support
TALENT
• Highly skilled & multilingual professionals - Spanish, English, Portuguese-
• Competitive, adaptable & committed labor force
• Long-term education policies
LIFE
• Slower pace, enjoyable and relaxing place to live
• Vast cultural, educational & health offerings
• Polite and friendly people
Added to these general advantages are
specific aspects such as the quality of
human resources and the presence of
world-renowned research institutes as the
Instituto Pasteur.
Uruguay offers a set of complimentary
services and investment opportunities, in
line with an approach that goes from the
genesis of the drug to the most advanced
services in the regional distribution and
administrative back office or customer
service (business service centers) value
chain, creating a cluster focused on foreign
direct investment.
PHARMACEUTICAL INDUSTRY
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Business Opportunities
The main sector-related business areas in
which the country presents opportunities
for international companies are:
Business services centers, (e.g. regional
headquarters, shared services centers)
from where to attend commercial,
administrative or coordination needs of
supply chains from affiliates in Brazil and
the rest of the Americas, as performed not
only by companies from this sector but
from other business verticals which have
found in Uruguay a quality service platform
at competitive costs and a solid
environment.
Regional distribution centers, with
extensive benefits for transit, fractioning,
packaging and adding value to goods with
and without cold-chain requirements. The
free zone, free port and airport regimes
provide a completely differential
framework for these operations.
Support services in R&D processes, based
on the quality of human resources and the
development of organizations as the
Instituto Pasteur, Pando technological
cluster and Parque de las Ciencias, with
cutting-edge infrastructure and equipment.
Manufacturing services, with over 30
production plants and adequate
infrastructure for, for example, processes
such as aseptic filling of biological products
or the manufacturing of molecular biology
and immunodiagnostics kits as well as
recombinant proteins with GMP
certification.
Clinical research projects, strengthened by
medical research groups focusing on
specialties such as oncology or
hematology, among others. Moreover, in
this area both public and private
institutions participate in the development
of research activity and capacities for its
expansion. In this respect, work is being
conducted jointly with the Ministry of
Public Health for the purpose of assessing
the possible implementation of
improvements to the regulatory
framework in order to boost such activity
maintaining the necessary safeguards for
all those involved.
PHARMACEUTICAL INDUSTRY
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The following platforms for the
development of these activities are worth
noting, industrial and service parks
developed under the free zone regime,
where projects have been undertaken in
the service sector for the pharmaceutical
industry, including backoffice centers,
regional distribution centers, and
manufacturing and research.
Parque de las Ciencias (Science park)
(http://www.parquedelasciencias.net/es/
): Free Trade Zone geared towards
accommodating pharmaceutical and
biotechnological companies as well as
those that provide support services to this
industry. Parque de las Ciencias has been
operating since December 2011 and
already has 65,000 m2 built, many of them
are industrial projects that benefit from the
world class infrastructure provided by the
park.
It is located in the department of
Canelones, only 1km away from the
Carrasco International Airport
(Montevideo) offering convenience to
companies exporting pharmaceutical
products. Among its main clients is Mega
Pharma, building a 23,000 m2 plant for
solid products.
Another venture is Eriochem
(http://www.eriochem.com/), with a
facility dedicated to the production of
oncology solutions for injection.
Selenin is another company that operates
from the park. It is a logistics company
specialized in pharmaceutical products
which adds to its list of services the
handling of raw material, fractionation,
packaging and cold storage.
Furthermore, there are also office building
projects, industrial and logistics buildings
for rent and a research and development
center, among other many industrial
projects.
A cluster has been created in this modern
park increasing the synergy between the
support services required by companies,
providing an infrastructure that matches
the highest quality standards. It is expected
to create about 2,000 direct qualified jobs
in relation to life sciences, technology and
research.
Zonamerica (www.zonamerica.com): It is a
business park located in Montevideo, the
first free zone to begin operations in
Uruguay. It is located on Route 8, Km 17,5.
It currently has 8 business platforms,
almost 300 companies and generates over
10,000 jobs.
In the pharmaceutical and health sector, it
accommodates companies such as:
Merck Serono Uruguay, Ares Trading
Uruguay S. A. (ATUSA)
(http://www.merck.com.uy/es/index.html)
: company owned by Merck Serono,
division of Merck KGaA from Germany
which specializes in innovative
pharmaceutical products. Since 1996,
ATUSA operates as regional distribution
center. In addition, it renders regional
services which include backoffice,
regulatory affairs and supply chain
coordination services.
Adium Pharma
(http://www.adium.com.uy): International
distribution and secondary packaging of
finished generic drugs and raw material.
Blausiegel
(http://www.bioxel.com.uy/?cat=53):
International distribution of finished
products.
PHARMACEUTICAL INDUSTRY
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Nanokem (http://www.nanokem.net):
Synthesis of peptide active principles and
polymeric carriers used in pharmaceutical
formulations; formulation of injectable
pharmaceutical products of sustained and
conventional release. The respective
design, process development and
commercial execution is conducted for
both activities.
Eckener Braun: Import and distribution of
raw materials for pharmaceutical products
for Grupo Boehringer Ingelheim
companies; clinical trials coordination
services for Latin America, except Uruguay;
Genia Geo
(http://www.geniageo.com/pt/):
Comprehensive advice on the installation
of laboratories in molecular biology,
forensic genetics and DNA databases; Yakir
S.A.: Import and export of therapeutic
devices for medical use; ECLA
(http://www.eclainternational.org/):
Quality control and distribution of kits for
medical trials; Shimadzu
(http://www.shimadzu.com/): Offices,
distribution and regional training center
(medical and laboratory divisions).
The following table summarizes the list of
the main public and private stakeholders
that comprise, in Uruguay, an ecosystem
with synergies for the pharmaceutical
industry, providing the possibility to scale
regional operations, from a safe and easy
country for business.
Main stakeholders of the services ecosystem for the international pharmaceutical industry1
1 INALOG: National Institute for Logistics (INALOG); MIEM: Ministry of Industry, Mining and Energy (biotechnology and pharmaceutical sector councils); ANII: National Agency for Innovation and Research; MSP: Ministry of Public Health, UXXI: Uruguay XXI, Government Agency for the Promotion of Investment and Exports.
PHARMACEUTICAL INDUSTRY
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2. Characterization of the sector
– Segments and stakeholders
2.1 R&D process support
Uruguay boasts research institutes that
focus on capturing international-industry
cooperation projects, especially regional.
Such institutes have next generation
technological platforms as well as
competent human resources. The
University of the Republic in the various
schools related to the sector has multiple
research groups, with basic and applied
research approaches.
Furthermore, there are institutes like the
Instituto Pasteur in Montevideo, direct
affiliate of the Institut Pasteur in Paris,
which implied a milestone for Uruguay in
terms of Research and Development, given
that not only did it promote the
incorporation of new technologies into the
country, but also the attraction of valuable
human resources.
These institutes, apart from contributing to
industry projects, provide specific training
for industry personnel who require special
equipment and environments, that would
otherwise have to take place on the
company premises, somehow hindering
every-day company operations.
Most of these institutions, as well as free
zones with specific developments for the
sector (Zonamerica and Parque de las
Ciencias) are concentrated in one zone of
the Metropolitan Area of Montevideo,
forming the "hub of innovation."
For the purposes of this document, for
sector analysis we have taken into
consideration researchers working in the
areas of Life Sciences and technology, i.e.
Natural and Exact Sciences, Science and
Technology, Agricultural Sciences and
Medical and Health Sciences.
Completing the map of subsector
stakeholders are the National Agency for
Innovation and Research (ANII), other
institutions of public support and the pool
of researchers trained in areas of Life
Sciences and Technology (Natural and
Exact Sciences, Science and Technology ,
Agricultural Sciences and Medical and
Health Sciences).
Of a total of 1,637 surveyed researchers
who comprise the National System of
Researchers, 69% (1130) work in areas of
interest to the sector.
PHARMACEUTICAL INDUSTRY
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Top stakeholders involved in R&D services:
Research institutes that currently exist in
Uruguay:
a) Institut Pasteur de Montevideo -
http://www.pasteur.edu.uy
The Instituto Pasteur de Montevideo is a
non-profit foundation, created in 2004 by
the Institut Pasteur in Paris and the
University of the Eastern Republic of
Uruguay. It has highly qualified human
resources and state-of-the-art equipment
available for the entire scientific
community, both local and regional, as well
as for companies that use these
technologies. The Instituto works on
integrated projects in biotechnology
associated with productive human and
animal health-related sectors, among
others. In this framework, biotechnological
services are developed for national and
foreign companies.
The following services are currently
available:
Biochemistry and Proteomics Analysis
Unit
Transgenic Animals and Experimentation
Unit
Cell Biology Unit
Molecular Biology Unit
Protein Crystallography Unit
Protein Biophysics Unit
Bioinformatics Unit
Recombinant Proteins Unit
Biopharmaceutical Laboratory: Quality
Control and Development
Examples of companies that work with the
Instituto:
- The Spanish company Biopolis, which in
2009 optimized an animal model (mice)
outsourcing system was put in place for
the preclinical study and analysis of
biotechnological molecules and
ingredients requested by European
clients.
PHARMACEUTICAL INDUSTRY
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- The French company Danone, between
2008 and 2011, through its global
research and development center
Danone Research, has developed in
collaboration with the Instituto Pasteur
in Montevideo, a platform of highly
predictive biotechnological models for
the study of dairy food prototypes with
beneficial effects on human health.
- The company Gema Biotech (Argentina)
with which work is being undertaken in
the development of
biopharmaceuticals.
- Laboratories Santa Elena and
Microsules of Uruguay where projects
have been conducted for the
improvement of veterinary vaccines.
b) Polo Tecnológico de Pando -
http://www.polotecnologico.fq.ed
u.uy/es/
The Instituto Polo Tecnológico de Pando
(PTP) of the School of Chemistry of the
University of the Republic, Uruguay, serves
as a research, development and innovation
center, in the areas of Chemistry,
Biotechnology, Materials Science and
Environment, specializing since its
beginnings in the productive sector of
goods and services.
The Polo Tecnológico de Pando works on the
promotion and development of R&D
activities in the productive sector, through:
technological transfer.
design, development and participation in
research and innovation projects, both of
its own and in conjunction with other
companies.
joint project development with
companies for submission to different
funding agencies.
incubation and technical advice to
entrepreneurs.
courses, seminars and other training for
companies.
Major areas of research include: Food and
Nutrition, Biotechnology, Bioanalytical
Chemistry, Biopharmaceutics and
Pharmaceutical Technology, Fine
Chemistry, Environmental Analysis and
Nanotechnology.
Successful cases in the Polo Tecnológico de
Pando
- Biotechnology: The Celsius SA company,
in collaboration with the area of
biotechnology, undertook a research
project that resulted in an innovative
ELISA kit for the diagnosis of hydatidosis
and another one for the diagnosis of the
Chagas disease. Both products are being
manufactured and sold by the company.
It also participated, together with
Prondil S.A., in the development of a
immunochemical kit which allows real-
time monitoring of the production
process of the antigen for a veterinary
vaccine and makes the process more
efficient. The company, which exports
90% of its production of veterinary
vaccines, has adopted this control and
optimization system to produce other
vaccines.
- Nanotechnology: In partnership with
Grinlab, and financed by ANII, the
PHARMACEUTICAL INDUSTRY
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Nanotechnology area has carried out
the "Development of cosmetic
formulations of Marcela based on
nanotechnology." Thanks to this work,
in 2011 the first Uruguayan product
incorporating nanotechnology was
launched into the market.
- Food and Nutrition: The Aceites
Vírgenes Ltda. company is a company
that emerged from the Polo
Tecnológico de Pando to develop a cold
pressed Virgin Canola Oil, not available
so far in the domestic market. The Food
and Nutrition area has provided advice
on the production process and the plant
lay-out; it conducted statutory records,
performed quality control of the end
product and studied the product's
useful life, which enabled the product
to be currently sold in large
supermarkets in the local market.
- Bioanalytics: The Apiter laboratory is
engaged in the development of
products derived from propolis, which
like other products of natural origin for
pharmaceutical or food use, is a
complex mixture and there are no
standardized methods for quality
assessment. The Bioanalytics area
developed strategies for the
characterization of propolis, which
contributed to establishing the profile
of Uruguayan propolis and defining a
consistent quality for Apiter's export
products. The company was selected by
the ANII High Impact Innovation
Program to implement this project
which also involves the development of
new projects and the expansion of
production. In a project initiated only
three years ago for Hípica Ríoplatense
company, the Bioanalytics laboratory
has developed new confirmatory
methods of analysis for anti-doping
drug tests in horse races. The new
approach and the new analytical and
scientific capabilities to undertake many
of these controls are evidenced by the
evolution of positive cases detected in
Uruguay, which have increased to the
point in which it has reached similar
detection percentages to those of
racetracks in the region and the world.
- Fine Chemistry: The Fine Chemistry area
was involved in the development of
industrial scale production processes for
a cerebral vasodilator for human use
that is derived from theophylline.
Currently, the product is sold to
national laboratories which produce the
drug for the human pharmaceutical
field and trade it on the local market.
- The Biopharmacy and Pharmaceutical
Technology area have developed the
extended-release tablet of antiepileptic
action. This development required
bioavailability and bioequivalence
studies involving volunteers at the
Assessment Center for Drug
Bioavailability and Bioequivalence
(CEBIOBE, for its Spanish acronym) and
resulted in the registration of a
proprietary drug with an innovative
treatment plan, unlike any other
proprietary drug on the market.
- Environmental Analysis: Thanks to the
ongoing knowledge update and to its
significant scientific production, the
Environmental Analysis laboratory has
received several international awards
and has obtained recognition as a
model for certain matters. Furthermore,
it is the only laboratory that conducts
anti-doping drug tests of all equestrian
sports organizations in the country. In
PHARMACEUTICAL INDUSTRY
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the determination of body composition
through isotope methods, the expertise
of the platform has been such that
foreign professionals have been
prompted to travel to receive training
on this research platform, and various
units of the region have submitted
samples for analysis.
c) Instituto de Investigaciones
Biológicas Clemente Estable
(IIBCE) - http://www.iibce.edu.uy/
The Clemente Estable Institute for
Biological Research (IIBCE, for its Spanish
acronym) is a public non-profit institution
dependent on the Ministry of Education
and Culture (MEC, for its Spanish acronym),
which brings together several research
groups engaged in different fields of
biological sciences with the following
objectives:
To generate and develop scientific
research in order to obtain new
knowledge in the field of life sciences
and related areas.
Train scientific and technical
researchers, as a national and
international leader in science,
technology and innovation.
To contribute to the country's scientific
and cultural development, as well as to
its scientific policy planning.
Every fortnight the Institute opens its
doors to schools and high schools, both
public and private, for the purpose of
informing students on their research
activities. Moreover, once a year it
conducts the "Open Institute" activity
during which conferences, interactive
exhibitions of equipment and experimental
techniques are conducted, as well as
laboratory tours.
d) Center for Biomedical Research
(CEINBIO). -
http://ceinbio.udelar.edu.uy/
The Center for Biomedical Research
(CEINBIO, for its Spanish acronym) was
created in 2004 upon the initiative of Dr.
Rafael Radi. It is a central unit in chemistry
and biomedical research which boasts
international recognition.
Based in the Department of Biochemistry
at the School of Medicine, it works as an
interdisciplinary and multi-institutional
academic space, where researchers and
topics in the areas of chemistry,
biochemistry, cell biology, physiopathology
and pharmacology in oxidation-reduction
processes converge. In addition, it interacts
with various departments and research
units of the School of Medicine, Sciences,
Chemistry, Biological Research Institute
and the Instituto Pasteur in Montevideo.
A major focus of its activities has been to
participate in the training of high quality
human resources. There are several
students currently undertaking PROINBIO,
PEDECIBA-Biology, PEDECIBA-Chemistry
doctoral studies, as well as foreign interns
(students and professors), conducting
research on chemical, biological,
physiopathological and pharmacological
PHARMACEUTICAL INDUSTRY
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aspects of free radicals and antioxidants in
different laboratories of the Center.
Recently, the Center has established
contact with the pharmaceutical and food
industry and has given advice in the fields
of Chemistry, Biology of Free Radicals and
Antioxidants. The industry has also shown
growing interest in the development of
antioxidant compounds that are being
elaborated and tested in our laboratories,
in addition to the functional analysis and
antioxidant properties of natural products
and foods.
e) Uruguayan Centre of Molecular
Imaging (CUDIM) -
http://www.cudim.org/
Uruguayan Centre of Molecular Imaging
(CUDIM, for its Spanish acronym) has been
committed to the development of
research, training, and applications in the
area of health sciences. In particular, the
following activities are encouraged:
Diagnosis: clinical examinations for
patients with public and private
health coverage mainly in the areas
of oncology and neurology.
Training: to promote teacher,
professional and vocational
development.
Clinical and biomedical research:
in the development of cyclotron-
PET impact on various diseases and
on the evaluation of new drugs in
research and development.
Other stakeholders with extensive
resources and human capital for R&D but
not specifically focused on health-related
areas are:
PHARMACEUTICAL INDUSTRY
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f) National Institute for Agricultural
Research - (INIA) -
http://www.inia.org.uy
National Institute for Agricultural Research
(INIA, for its Spanish acronym) has ties with
other research institutes engaged in the
human area, sharing basic knowledge on
biology, biotechnology and other areas, in
an environment of open innovation.
g) Technology Laboratory of Uruguay
- (LATU) -
http://latu21.latu.org.uy/es/
The Technology Laboratory of Uruguay
(LATU, for its Spanish acronym), as INIA,
brings together valuable human resources
in the field of science. One of its main tasks
is to provide various types of services to
the industry. It also acts as product certifier
and grants authorization for products to be
sold in the country.
Location and First Innovation Consortium:
Except for the INIA, which given its
commitment to the agricultural sector
features many experimental stations
throughout the country, the remaining
institutes are concentrated in Montevideo
and Canelones, more specifically in the
"Hub of innovation", along Avenida Italia
street, ending past the Carrasco Bridge,
towards Pando, as illustrated below.
Furthermore, this location is close to
Carrasco Airport, and within this hub are
the Free Zones which have the most
influence on the sector, Parque de las
Ciencias and Zonamerica, described
hereinafter.
The most notorious research institutes are
in close proximity to each other, which
promotes easy mobility of human
resources between them as well as
collaboration in the creation and
management of shared projects.
Thus, in November 2013 an agreement was
signed for the creation of the First
PHARMACEUTICAL INDUSTRY
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Innovation Consortium in Uruguay, by the
Institut Pasteur, the Pando Technology
Park, the Uruguayan Centre of Molecular
Imaging, the National Institute of
Agricultural Research and the Institute for
Biological Research Clemente Estable.
The Consortium focuses its activities on the
areas of animal health, biomedicine,
genomics and green chemistry, and will
prioritize the generation, collection and
transfer of scientific and technological
knowledge thus contributing to help
improve the competitiveness of domestic
firms in these areas.
The five participating institutions intend to
conduct joint R&D projects, especially of a
multidisciplinary nature. They will carry out
joint training programs for researchers and
technicians and will make infrastructure,
equipment and human resources available
for common projects.
This Consortium has turned into the
cornerstone for the promotion of R&D
services related to the pharmaceutical and
health industry, also leveraging synergies
to attract other companies who need these
services, but in connection to, for example,
the agricultural sector.
PHARMACEUTICAL INDUSTRY
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2.2 Clinical Research
Bearing very stringent regulatory
requirements and high R&D costs, life
science companies are increasingly seeking
new places to outsource activities that can
provide the necessary capacities to meet
the stringent demands of research. In the
selection process of these new places,
companies assess a number of key criteria,
including: regulatory framework, qualified
human resources, scientific experience,
technical skills, infrastructure, academy–
company collaboration, research centers
and health care centers such as hospitals
and clinics.
Pharmaceutical companies tend to
outsource Clinical Research services,
involving scientists, regulatory agents,
doctors and patients who participate in the
research projects.
Such subcontracting is mostly done
through Contract Research Organizations
(CROs), specialized companies who
manage clinical research outsourcing
(drugs, medical devices and diagnostics).
CROs must comply with strict protocols
and must assure their customers
(pharmaceutical and medical devices
companies) and regulators that:
• Their clinical trials are conducted in
accordance with acceptable technical
standards,
• They comply with national and
international ethical standards and
• Data is trustworthy and fraud-free.
It is estimated that there are over 1,000
CROs worldwide and that the sector
receives approximately 30% of total global
investment in R&D and bio-pharma.
Over 50,000 clinical trials are conducted
annually and 40% are performed in "non-
traditional" research locations. The
industry is worth US$ 20 billion, with the
top 10 CROs accounting for approximately
50% of total CRO revenue.
Clinical researches are also developed, led
by groups of doctors who work in a
coordinated manner focusing on different
specialties, capitalizing on their experience
and contact with patients in industry
projects.
Uruguay currently is in condition to meet
the demand for research projects due to
the following factors:
It boasts good basic training in
medicine and research groups in
specific diseases (study groups in
hematology and cancer, among
others).
Health has historically been one of
the areas of knowledge with the
longest university tradition in the
country, reaching 4.5 doctors every
100 inhabitants.
Healthcare institutions
accommodate patients with
various diseases, thereby it is
possible to carry out multicenter
trials which require a reduced
number of people. Consequently,
the small number of inhabitants
would not be a hindrance to
develop the activity.
Large innovative laboratories have
commercial representation in the
country and their interest in
developing projects in Uruguay has
been surveyed.
PHARMACEUTICAL INDUSTRY
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The country has leading technology
in the CUDIM, highly valued by
pharmaceutical companies.
However, from a regulatory standpoint,
times are still considered extensive by
sponsors, a situation which is currently
being worked on together with the MSP
authorities in order to be adapted.
Map of major stakeholders
In Uruguay, according to data furnished by
the MSP, from 2009 to September 2013, 15
trial-type research protocols were
submitted for evaluation, 11 of which were
for conducting Phase III studies, 2 for Phase
II and 2 for Phase IV studies. The areas of
knowledge covered were: Oncology (6
projects) Cardiology (2 projects), Hemato -
Oncology (2 projects), Rheumatology (1
project), Surgery (1 project),
Gastroenterology (1 project), Dentistry (1
project) and Gynecology (1 project).
Of these 15 protocols, 10 were approved, 2
denied, 1 withdrew from approval and 2
were in the evaluation process. In addition,
the date the information was furnished, 10
of the approved protocols were underway
and 3 had been completed.
When comparing these figures at
international level in the same period,
some considerations can be made.
First of all, it is worth noting that most
clinical trials are conducted in European
countries and in the USA, places which also
concentrate the world's highest incomes
(http://clinicaltrials.gov2).
2 http://clinicaltrials.gov is a public site which provides information on clinical trials
PHARMACEUTICAL INDUSTRY
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Within Latin America, the country with the
greatest number of trials is Brazil with 1990
cases, followed by Argentina with 711,
Colombia with 387, Chile with 380 and
Peru with 306. The rest of the countries
have a significantly lower number of cases,
Uruguay being one of the countries with
the lowest amount3.
Taking into consideration these figures in
relation to the population of each country,
and taking into account that the
characteristics of the Uruguayan
population are similar to those of Europe
and the United States, a fact which is highly
regarded by international laboratories, we
can conclude that if managed properly and
all international standards are applied to
safeguard patients, Uruguay has a good
chance to continue growing in this aspect,
creating a direct positive contribution to
increasing knowledge on certain diseases
and a greater availability of qualified
employment.
Companies and organizations involved in
clinical research in Uruguay4:
performed throughout the world. It is powered by sponsors and monitored by the US National Library of Medicine (NLM) and the National Institutes of Health (NIH). 3 In the period under review, between 1 January 2009 and 30 September 2013, 19 cases occurred in Uruguay. When consulted, the MSP mentioned that there are studies that need not register with the MSP, therefore the difference makes sense. 4 The list is not complete, there are probably more stakeholders to be identified and thereby complete this report. Moreover, given the limited experience in our country, most of the stakeholders mentioned herein are potential developers. As can be seen it consists of various stakeholders working in different areas of health, such as medical centers, research institutes, universities and private companies.
Health Care Centers
Public hospitals:
- Hospital de Clínicas.
http://www.hc.edu.uy/
- Hospital Militar [Military Hospital].
http://www.dnsffaa.gub.uy/
- Hospital Policial [Police Hospital].
https://sanidad.minterior.gub.uy
- Hospital Pasteur.
http://www.asse.com.uy/uc_5213
_1.html
- Hospital Maciel.
http://www.hmaciel.gub.uy/
- Hospital Pereira Rossell.
http://www.pereirarossell.gub.uy/
- Hospital Saint Bois.
http://www.saintbois.com.uy/
- Hospital Carlos Santin Rossi.
- Hospital Vilardebó.
http://www.hospitalvilardebo.com
.uy/
Prepaid Medical Assistance Institutions
(IAMPP, for its Spanish acronym):
- Centro Asistencialista del Sindicato
Médico del Uruguay (CASMU, for
its Spanish acronym).
http://www.casmu.com.uy
- Hospital Británico.
http://www.hospitalbritanico.org.u
y/
- Asociación Española.
http://www.asesp.com.uy/
- Hospital Evangélico.
http://www.hospitalevangelico.co
m/
- Médica Uruguaya.
PUBLIC INSTITUTIONS
National Institute of Rheumatology.
- National Cancer Institute.
Some of these organizations also participate in Bioequivalence clinical trials.
PHARMACEUTICAL INDUSTRY
18
- National Institute of Infectious
Diseases.
RESEARCH INSTITUTIONS
- Uruguayan Centre of Molecular
Imaging (CUDIM)
http://www.cudim.org/
- Institut Pasteur of Montevideo
http://www.pasteur.edu.uy/
ACADEMY
- School of Medicine of the
University of the Republic.
http://www.fmed.edu.uy/
- Center for Biomedical Sciences of
the University of Montevideo.
http://ccb.um.edu.uy/
- School of Medicine of the
University Institute of the Latin
American Center for Human
Economy (CLAEH).
http://www.claeh.edu.uy/medicina
/
- National Academy of Sciences.
http://anciu.org.uy/
- National Academy of Medicine.
http://www.anm.org.uy/
GROUPS OF PHYSICIANS
- Uruguayan Cooperative Oncology
Group (GOCUR).
http://www.sompu.org.uy/05gocu
r.php
- Uruguayan Vaccine Research
Center (Pediatrics–Pediatric
Infectious Diseases).
CRO
- Bdbeq Research.
http://www.bdbeq.com
http://www.bdbeq.com
- Drug Bioavailability and
Bioequivalence Evaluation Center
(CEBIOBE).
- Activa 8. http://www.activa8.com/
- Trioncology.
http://www.cirg.org/html/index.ht
ml
2.3 Manufacturing
Uruguay has a long tradition in the
pharmaceutical industry, having created
entrepreneurs and human resources with
vast experience and knowledge in the field;
mandatory features to provide
international laboratory services
demanding high quality standards, as well
as for the set-up of new plants.
In fact, despite its small population, the
country has over 30 pharmaceutical
facilities authorized by the Ministry of
Public Health (MSP), some with the Good
Manufacturing Practice certificate.
Furthermore, investment has been made in
modern technologies for sterile filling in
vials and syringes of biological products as
well as for the production of molecular
biology and immunodiagnostic and
recombinant protein kits.
The total offer of pharmaceutical products
in the Uruguayan local market, in 20135,
was of US$ 730 million per year and the
sector directly employs more than 4,700
people, with a high percentage of
technicians and professionals6.
5 Source: Deloitte. 6 Source: BPS.
PHARMACEUTICAL INDUSTRY
19
Among pharmaceutical laboratories for
human use are multinational companies,
worldwide manufacturers of patented
products, generally present with business
offices (grouped in the Chamber of
Pharmaceutical Specialties and Related
Products–CEFA) and national and regional
companies that manufacture or sell similar
or generic pharmaceutical products
(grouped in the National Association of
Laboratories–ALN– founded in 1943).
Map of major stakeholders
Manufacturing, exports and imports of
the Pharmaceutical Industry in Uruguay.
The production of the pharmaceutical
industry has displayed a process of
recovery after a significant shrink during
the 2002–2003 economic crisis. As from
2004, the industry began a strong recovery
and growth process, which led turnover to
be trebled. Thus, in 2013, it is estimated
that annual production exceeded US$ 480
million7
7 Source: Deloitte.
PHARMACEUTICAL INDUSTRY
20
Chart No. 1: Gross Value of Production of Uruguay's pharmaceutical industry (US$ millions)
Source: INE economic activities survey (EAE, for its Spanish acronym) and Deloitte estimates.
Sector exports recorded an increasing
trend as from 2003, reaching around
US$ 200 million in 2013. This growth is
largely associated to the fact that as from
said year various laboratories began using
raw material from Asian markets (China
and India), which implied a significant
reduction in cost. In the first half of 2014
pharmaceutical sector exports stood at
US$ 90 million.
Chart No. 2: Pharmaceutical industry exports (US$ millions)
Source: Uruguay XXI based on DNA. Includes drugs for animal use.
The sector's main export products are
drugs packaged for retail sale, accounting
for 59% of exports in 2013, followed by
vaccines and antisera with 26% of the total
(see table No.1).
192
90
0
50
100
150
200
250
Exports by Free Zone
Exports from customs territory
2005 2006 2007 2008 2009 2010 2011 2012 2013 1st half
2014
207
480
100
150
200
250
300
350
400
450
500
2001 2003 2005 2007 2009 2011 2013*
PHARMACEUTICAL INDUSTRY
21
NCM4 Description NCM4 2013 Part (%) 3004 Drugs packaged for retail sale 113 59% 3002 Vaccines and antisera 51 26% 3006 Pharmaceutical forms and items 15 8% 2936 Provitamins or natural vitamins or reproduced by synthesis 6 3% 2937 Natural hormones or reproduced by synthesis 6 3%
Other Mercosur Common Nomenclature 1 1% Total 192 100%
Table No. 1: Uruguay's pharmaceutical industry exports by product (US$ millions)
Source: Uruguay XXI based on DNA. Includes drugs for animal use.
Chart No.2 also shows the increasing
importance of goods exported from Free
Zones. These products enter Zonamerica
and the Science Park from Uruguayan
customs territory under the transit regime
before being exported to other countries.
The role played by these Free Zones as
logistics service centers even with goods in
transit from other countries is discussed
hereinafter.
Table No. 2: Pharmaceutical industry exporting companies (US$ millions, 2013)
Source: Prepared by Uruguay XXI based on data from DNA. Only includes exports from customs territory. Includes
drugs for animal use.
Regarding imports, a significant increase
has also been observed, reaching US$ 262
million in 2013. Meanwhile, in the first half
of 2014 sector imports stood at US$ 115
million.
Chart No. 3: Pharmaceutical industry
imports (US$ millions)
Source: Uruguay XXI based on DNA. Includes drugs
for animal use.
Company Exports (US$) From
Roemmers 27.2 Argentina
Laboratorios Clausen 18.1 Uruguay
Laboratorios Microsules 17.9 Uruguay
Urufarma 11.7 Uruguay
Fármaco Uruguayo 9.0 Uruguay
Laboratorio Libra 7.7 Uruguay
Merial 7.1 France
Total 142.4
92
240 262
115
0
50
100
2005 2007 2009 2011 2013 1st 2014
250
200
150
half
PHARMACEUTICAL INDUSTRY
22
Staff employed in the Pharmaceutical and
related industries
The pharmaceutical industry directly
employed 4,711 people in December 2013,
mostly highly qualified technical staff.
Added to these are jobs created in related
activities such as the marketing and sale of
products and health related services.
Table No. 3: Staff employed in the pharmaceutical industry and related activities (2013)
Description Number of
people
Manufacturing of pharmaceutical products, medicinal
chemical substances and botanical products. 4,711
Manufacturing of radiological, electromedical and
electrotherapeutic equipment 8
Retail sale of pharmaceutical and medicinal products
as well as cosmetics and toiletries. 10,387
Veterinary activities 1,532
Hospital activities 62,513
Medical and dental practice activities 3,956
Other activities related to human health 20,517
Source: Prepared by Uruguay XXI based on data from BPS at December 2013.
Pharmaceutical Industry Investments
In recent years investments made in the
pharmaceutical industry have been
considerable. This is mirrored in figures
from investment projects recommended by
COMAP to be promoted. In the 2005–2014
period 118 investment projects were
submitted, for an amount close to
US$ 180 million.
PHARMACEUTICAL INDUSTRY
23
Table No. 4: Investment recommended by
COMAP – Pharmaceutical sector,
laboratories and drugs for animal use
(US$)
US$
2005 3,861,876
2006 19,018,073
2007 1,218,965
2008 10,770,735
2009 20,829,023
2010 19,176,800
2011 44,698,332
2012 28,014,304
2013 22,990,045
1st half 2014 8,881,093
Source: Prepared by Uruguay XXI based on data from
COMAP.
2.4 Logistics and regional distribution
Uruguay has extensive experience in all
matters related to logistics and distribution
to the region, making it a model logistics
hub. In Uruguay, the sector includes
several activities which are developed in
ports, airports, highway networks,
specialized logistics companies strategically
located or within logistics parks.
Some of these parks are covered by the
free zone regime, allowing tax free entry of
products into the country, encouraging the
development of distribution from
Montevideo, strategically located city
within hours from the largest South
American markets.
Source: Juan Opertti
Free zones (5 minutes from the airport)
have the necessary infrastructure to
provide logistics and distribution services,
such as Selenin in the Science Park and
Costa Oriental in Zonamerica, both with
facilities for fractionation, packaging and
PHARMACEUTICAL INDUSTRY
24
cold storage. They also house international
companies with their own distribution
centers, as is the case of Merck Serono
(regional center for the distribution and
services of biotechnological and
pharmaceutical products from
manufacturing plants based in Europe for
all Latin America) Uruguay, Adium Pharma
(international distribution and secondary
packaging of finished generic drugs and
raw materials) and Blausiegel
(international distribution of finished
products), all operating from Zonamérica.
For the development of all these activities,
setting up distribution centers both directly
operated by international pharmaceutical
companies or by outsourced services, the
country in addition benefits from Free
Ports and Airports, Customs Bonded
Warehouses, Investment Laws and
Industrial Park Laws.
Opportunities for the regional distribution of pharmaceutical products
2.5 Business service centers
Uruguay features a series of crosscutting
attributes for the development of business
services, generating opportunities for the
development of captive operations such as
regional headquarters or service centers
(e.g. foreign trade, supply chain, finance
and accounting, human resources,
customer services, research and analysis)
in order to provide support to regional and
global business.
The country is positioned as a reliable
platform for the provision of high quality
services at competitive costs. This has led
international companies to establish
service centers, improving their business
processes and regional integration.
Many renowned international companies
in different business verticals have
developed this type of operation (e.g.
PHARMACEUTICAL INDUSTRY
25
Caterpillar's Finning, Sabre Holdings, RCI,
Ocwen Financial Corp., Towers Watson,
Louis Dreyfus Commodities, SKF, Tenaris,
Trafigura, Syngenta, Basf) as well as
companies from the pharmaceutical sector
(e.g. Megafarma, Merck Serono, Roche).
Megafarma has set up its headquarters in
the Science Park. Merck Serono has a
shared service center in Zonamerica from
where the company renders regional
services in different areas such as
marketing, quality, finance and legal
affairs. It has also opened a shared services
center for regulatory matters in the region
and a supply chain service center
supporting Head Office in the monitoring
of worldwide supply activities. Roche has a
logistics coordination center located in a
free zone to manage the movement of its
products between production plants and
distribution sites in South America.
Uruguay offers a favorable business
climate and social and political stability
(projects continue regardless of the
government in office); it has investment
grade status granted by the main credit
rating agencies and has experienced
sustained GDP growth during the past 10
years. Investors access top quality services
(such as the fastest downloading speed in
LATAM), in an environment which ensures
an excellent quality of life for executives
and their families.
In Uruguay foreign and national
investments receive the same treatment,
there are no restrictions on the
repatriation of capital or profits and
investments can be made in national or
foreign currency. Furthermore, there is an
attractive tax regime for foreign operations
focusing on foreign markets, together with
the availability of qualified and multilingual
(Spanish, English, Portuguese) human
resources.
Map of major stakeholders
PHARMACEUTICAL INDUSTRY
26
2.6 Information technology and health
In addition to the above mentioned
pharmaceutical industry services, there are
IT and health related services, taking
advantage of Uruguay's combination of
experience in the field of software
manufacturing and exporting and the daily
opportunities that arise in the health
market.
It is estimated that in 2012, software
exports were around US$ 300 million, with
an increase of about 10% over the previous
year. The United States is the main market
accounting for 27% of the total; followed
by Brazil with 12.4% and Chile with 9.4%. In
the same year, 12,000 highly qualified
people were directly employed by the IT
industry (engineers, analysts,
programmers, computer technicians and
other professionals). These figures account
for the expertise the country has acquired
in these technologies and its ability to
develop solutions aimed at the health
sector, which as shown below, it is in full
international expansion, becoming a hub
for opportunities.
Even in the world, the digital health
industry is emerging. It combines
technology and health, radically changing
the way it is accessed and the use of
personal health information. It connects
smart phones and tablets (all which are
new 24/7 means of accessing information)
with large volumes of data on the cloud,
creating new mechanisms of participation,
a greater participation of physicians on line
(interactive physicians), and giving rise to
conversations about health on social
networks.
The health care system has been slow to
adopt the use of ICTs. As a result, there has
been a lack of productivity improvements
in health care in comparison to the rapid
growth in other sectors of the world
economy. The high cost of health care is
demanding solutions for major health
challenges, such as prevention and patient
monitoring, among others. Researchers are
continuously identifying innovations and
interventions to improve the population's
health.
Digital technologies shall facilitate the
"aging at home" concept, keeping ill
patients at home but monitored and
treated through technology and interaction
through technology, including
telemedicine. Many of these services will
result in savings on health care costs in the
medium term, representing an investment
opportunity which will have an assured
return for health systems.
In Uruguay some projects that address
needs and previously marked trends have
been surveyed. As will be seen, sometimes
they arise from health care providers or
laboratories themselves as a solution to
their own problems, which they then
decide to market, leading to a new
business unit or start up.
Companies and projects surveyed in
Uruguay8:
Apraful
(http://www.apraful.com.uy/):
develops management systems for
health firms, such as clinics,
nursing homes and hospitals.
8 Information provided by the Chamber of Information Technology of Uruguay (CUTI, for its Spanish acronym) and prepared by Uruguay XXI.
PHARMACEUTICAL INDUSTRY
27
Clinixon
(https://www.clinixon.com/es/sobr
e/): develops a tool to motivate
patients to continue medical
treatment. In addition, the tool has
the required features to manage
medical clinics (agenda, electronic
medical record, reminders, among
other items).
EviMed (http://evimed.net): has
extensive experience in the
provision of medical education,
adapting their proposal to local
context and real needs.
Geocom
(http://www.geocom.com.uy/web
/geocom/geosalud): developed a
comprehensive system for the
management of information
related to hospitals, covering all
areas of health care center
management.
IBM Uruguay
(http://www.ibm.com/uy/es/):
IBM Uruguay has a division
specializing in health, which
develops solutions in conjunction
with other local companies.
IWTG
(http://www.iwtg.com/soluciones.
html?a=8): develops solutions for
laboratory trials, which require
safe and auditable procedures, in
line with local and international
standards.
Suat
(https://www.suat.com.uy/servicio
s_opcionales/soluciones/):
develops and markets a system for
the management of medical
records.
Urumovil
(http://www.urumovil.com/):
develops solutions for different
inconveniences suffered by people
who have at least one form of
disability.
Vipermed (http://vipermed.uy/):
develops solutions for the
management of medical records
and patient treatment, from any
device connected to the Internet.
PHARMACEUTICAL INDUSTRY
28
3. Availability of Human
Resources
Population and labor force
Most of the country's population and labor
force is located in the metropolitan area of
Montevideo (56%).
2007 2013
Population in the metropolitan area 1.8 M 1.9 M
Labor force in the metropolitan area 0.8 M 0.8 M
Unemployment rate in the metropolitan area 9.20% 7.2%
Literacy rate in the metropolitan area 99.0 99.4
Working hours and wages
Work days are limited to 8 hours per day,
totaling 44 hours a week for white-collar
workers and 48 hours a week for blue-
collar workers. Call centers have a weekly
limit of 39 hours, 6 days a week.
Average work day (# hours) 8
Average work week (# hours) 44 - 48
Mandatory premium for
overtime (%)* +100%
Premium for third shift work
(%) +20%
Premium for required
standard language (%) +10-20%
* Senior management positions do not receive
overtime pay
University – graduates and
undergraduates
Uruguay has a good educational level and
free access to education up to university
level.
As per the last statistical records, the
country's university population exceeds
150,000 enrolled students, with an
admission of 23,000 students and 8,000
graduates per year approximately.
Over 85% of the university population
corresponds to the public university
system, remaining relatively stable in the
past 5 years.
For the service sector associated with the
pharmaceutical and health industry, the
following are considered:
i) On the one hand, university
degrees directly related to
Pharma & Health (hereinafter
prioritized degrees), such as
research services,
manufacturing or provision of
PHARMACEUTICAL INDUSTRY
29
healthcare services. The main
university courses that have
been considered are
biotechnology, life sciences,
agricultural sciences, nursing,
pharmaceuticals, food,
medicine, nutrition, dentistry,
chemistry, veterinary and
different specializations related
to medical technology..
ii) On the other hand, university
degrees associated with
business services and ICT,
catering for shared services
centers based on foreign trade
operations, supply chains,
management and accounting,
human resources management
or financial and market
analysis. For this segment the
following university degrees
and professions are taken into
account: International Affairs
and Business, Public
Accountant, Management,
Marketing, Economics and
related, Psychology, Industrial
Relations and Human
Resources, Law and Notary,
Social Science and ICT.
In university professions directly related to
Health & Pharma services there are 39,000
enrolled students, with an annual average
of 5,800 student entries and 2,200
graduates, showing a high effectiveness in
annual graduation rates and representing
approximately one third of the student
population.
Additionally, 87,000 university students are
enrolled in degree courses related to
business services and ICT, with an average
of 13,200 new admissions and over 4,600
graduates per year.
Regarding non-university higher education,
12,000 enrollments take place between the
public and private systems, out of which
800 are associated with Pharma & Health
Services, 3,200 with courses related to
Business Services and 3,400 with
Information Technology.
Undergraduates and Graduates Technician or
equivalent
Graduate Degree
or equivalent
General
Number of Educational Institutions in the
Metropolitan Area 42 36
Total number of Students 12,000 150,000
Total number of admissions of new students Not available 23,000
Total annual pre-graduates Not available 8,000
Studies directly related to Pharma and Health services
PHARMACEUTICAL INDUSTRY
30
Total No. of students enrolled 800 39,000
Total annual admissions Not available 5,800
Total annual graduates Not available 2,200
Studies related to business services
Total No. of students enrolled 3,200 77,000
Total annual admissions Not available 11,800
Total annual graduates Not available 4,200
ICT related studies
Total No. of students enrolled 3,400 10,000
Total annual admissions Not available 1,500
Total annual graduates Not available 350
The following table displays the distribution by prioritized university courses:
Knowledge area Admitted Graduates Enrolled
Medicine 1,234 556 8,396
Chemistry 428 169 5,220
Medical Technology 1,077 293 4,767
Veterinary 536 114 3,681
Nursing 537 335 3,406
Dentistry 373 301 3,060
Agricultural Sciences 423 154 2,382
Nutrition 434 116 2,189
Biological Sciences 140 95 1,967
Pharmaceutical Sciences 121 35 1,857
Food Engineering 124 32 1,194
PHARMACEUTICAL INDUSTRY
31
Obstetrics 366 66 1,133
Biotechnology 29 - 145
TOTAL PHARMACEUTICAL AND HEALTH
SERVICES 5,822 2,266 39,397
Administration 2,176 449 12,429
Certified Public Accountant 2,378 1,099 13,498
Economics and related studies 558 371 4,381
Marketing 61 17 398
International Relations and Foreign Trade 664 163 3,613
Law - Notary Public 1,379 790 19,428
HR and Labor Relations 940 121 2,941
Psychology 1,420 683 7,864
Social Sciences and Communications 1,927 480 11,451
Tourism 84 6 374
Others (Translator, Archivist, Secretarial
Studies) 253 93 1,032
TOTAL BUSINESS SERVICES 11,840 4,272 77,409
Information Technologies 1,110 250 7,686
Electronics 281 79 2,094
Telecommunications 40 22 252
Telematics 6 8 49
TOTAL IT 1,437 359 10,081
*Source: information produced by Uruguay XXI based on 2012 statistical yearbook of the Ministry of Economy.
In the following chart the prominent role
played by medicine in comparison to the
rest of the university courses related to the
subject can be clearly appreciated.
PHARMACEUTICAL INDUSTRY
32
In addition to the number of annual
graduates, as indicated above, Uruguay has
a high level of university students that
may be part of the labor market with
some of the skills required for these
business segments.
In fact, in UdelaR prioritized degree
courses, according to the latest University
Census (2012), 77% of students have up to
20 approved subjects and 19% between 20
and 40 subjects, with Medicine being one
of the courses with the highest number of
graduates.
With regard to the age of university
students of the Pharma and Health
prioritized courses, 11% are under 20, 70%
between 20 and 29 and 19% over 30. On
average, these students are younger than
the total number of UdelaR university
students.
54% of university students of the selected
courses are inserted in the labor market.
Distribution is lower than the rest of
UdelaR students, where there is 63% of
students engaged in employment.
Now, among students who are working in
the selected careers, 48% are employed in
an activity not related to their profession,
12% is poorly related and the remaining
40% is related.
As for the number of hours dedicated to
work, of all the students doing courses
related to the business segments, 7% work
less than 10 hours, 14% between 10 and 20
hours, 22% between 21 and 30 and 57%
over 30 hours.
PHARMACEUTICAL INDUSTRY
33
High School Education
In high school education, both public and
private, there are 117,497 students
enrolled, 41,432 of which are in fourth
grade, 42,125 in fifth and 33,940 in the last
year of high school.
The orientations chosen by students in fifth
and sixth grade are associated with
interests or possible options for technical
or university courses which they will
eventually attend in the future. In this
regard, among the different orientations
for fifth grade the following distribution is
noted:
Enrolled in fifth grade of High School
In sixth grade orientation is more specific.
There are currently different syllabuses
distributed as follows:
Enrolled in sixth grade of high school
In relation to higher education in technical
college, the responsible institution is the
Council of Technical Education (UTU, for its
Spanish acronym) which reports a total of
36,185 students enrolled in the various
technical high school courses.
PHARMACEUTICAL INDUSTRY
34
Enrolled in technical high school
education
There is a strong orientation of students to
undertake humanistic courses, followed by
biological sciences and scientific studies.
Languages
Some public elementary schools teach
English as part of the Plan Ceibal and most
private schools have included it in their
syllabus. Regarding Portuguese, some
primary schools have included it in their
syllabus. In secondary education teaching
English is compulsory both in public and
private schools.
Languages
% of University
population
(public system)
English
(Able to read, write,
speak)
64%
Portuguese
(Able to read, write,
speak)
28%
Other: French,
German or Italian
(Able to read, write,
speak)
18%
* Source: Information gathered by Uruguay XXI
based on University Census. UdelaR 2007 (student
perception).
The general command of the English
language, as well as Portuguese, among
students stands out. In other languages it is
similar to the overall total of UdelaR
students.
Graduate studies
As for postgraduate and Master's degrees,
Uruguay has an extensive academic
offering distributed among the UdelaR
public system and the private system
formed by 4 private Universities and 6
University institutes with available study
programs.
PHARMACEUTICAL INDUSTRY
35
At the end of 2012 there were more than
11,500 enrolled students and an average of
3,500 annual entries and 1,500 graduates.
Professionals
There are 102,856 professionals registered
with the Professionals Retirement and
Pension Fund of Uruguay (CJPPU), with a
high proportion of these in health related
professions, which is strongly influenced by
the amount of Physicians developed by the
country.
Knowledge Areas No.
Biological Sciences 726
Nurse 5,511
Physiotherapy 539
Speech Therapists 177
Agricultural Engineer 5,449
Clinical Laboratory 482
Physician 15,602
Heart and Lung Specialists 107
Nutritionist 1,257
Dentist 4,902
Ophthalmology 42
Midwife 653
Psychomotricity 362
Pharmaceutical Chemist 2,379
Industrial Chemist 1,613
Radiology 273
Dental Technology 586
Veterinary 3,692
TOTAL PHARMACEUTICAL
AND HEALTH SERVICES 44,352
Administration
no data
available
Certified Public Accountant 16,642
Economics and related
studies
no data
available
Marketing no data
available
International Relations and
Business and Foreign Trade 1,094
Law - Notary Public 21,578
Human Resources 46
Psychology 4,780
Social Sciences and
Communications 4,014
Tourism 53
Other (Translator, Archivist,
Secretary) 507
TOTAL BUSINESS SERVICES 48,714
Information Technologies 6,642
Electronics no data
available
Telecommunications no data
available
Telematics no data
available
TOTAL ITO 6,642
PHARMACEUTICAL INDUSTRY
36
This is because Health has historically been
one of the areas of knowledge with the
longest university tradition in the country,
reaching 4.5 doctors every 100
inhabitants.
Researchers
The National Agency for Research and
Investigation (ANII, for its Spanish
acronym) has systematized and classified
researchers, areas of knowledge and
international journals in which it publishes,
embodied in the National System of
Researchers (SNI, for its Spanish acronym).
The SNI classifies researchers according to
the following areas: Humanities, Natural
and Exact Sciences, Engineering and
Technology, Agricultural Sciences, Medical
and Health Sciences and Social Sciences.
For the purposes of this document, for
sector analysis we have taken into
consideration researchers working in the
areas of Life Sciences and technology, i.e.
Natural and Exact Sciences, Science and
Technology, Agricultural Sciences and
Medical and Health Sciences.
Of a total of 1,637 surveyed researchers
who comprise the National System of
Researchers, 69% work in areas of interest
to the sector as can be seen in the
following chart.
Researchers by field
PHARMACEUTICAL INDUSTRY
37
4. Institutional framework
Ministry of Public Health (MSP, for its
Spanish acronym): its mission is to
establish policies and strategies for the
performance of essential public health
functions, in order to ensure collective
health as a basic human right and a public
asset which the State is accountable for. In
this regard, it is the agency which
establishes and delivers regulations
required for the authorization of
production and registration of drugs. For
further information visit
http://www.msp.gub.uy/.
Ministry of Industry, Energy and Mining
(MIEM, for its Spanish acronym): it is
responsible for the design and
implementation of government policies
related to the sectors of industry, energy,
mining, telecommunications, micro, small
and medium sized companies, aimed at the
transformation and strengthening of the
national productive industry, its energy
matrix and communications system, for
sustainable development with social
justice, in the framework of regional
integration and insertion in a globalized
world. In this framework, the MIEM leads
the Sector Councils policy, two of which are
related to the sector. For further
information visit http://www.miem.gub.uy.
Pharmaceutical Sector Council: in 2008 the
Productive Office was established and
supply chains we re prioritized, within
which lies the Pharmaceutical Industry. The
Pharmaceutical Sector Council implements
policies designed by the Productive Office
for the development of the sector. It is
composed of national and international
companies and public and private
institutions related to the pharmaceutical
area, which have worked together in the
preparation of a diagnosis and action plans
that are currently being implemented. For
further information visit http://gp.gub.uy.
Biotechnology Sector Council: analogous
to the Pharmaceutical Sector Council, the
Biotechnology Sector Council brings
together all sector related stakeholders.
Given that the development of biological
drugs is the current technological trend,
both councils work together in
coordination in the area of Human
Biotechnology. For further information visit
http://gp.gub.uy.
Global Export Services Support Program-
Uruguay XXI: opportunities for setting up
and exporting services related to the
pharmaceutical and health industry have
been identified. The Global Export Services
Support Program, in conjunction with
stakeholders, implements the strategy for
the development of service exports and
investment attraction, through the
creation of promotional material, training
courses and attendance to international
industry events, among others. For further
information visit http://gp.gub.uy.
Sindicato Médico del Uruguay (SMU): it is
an association which brings together health
professionals, providing different type of
services for its members, including
representation before the government and
other institutions, information to
members, training, among others. For
further information visit
http://www.sermedico.com.uy.
Uruguay's Chemistry and Pharmacy
Association (AQFU): professional
association which brings together
Pharmaceutical Chemists graduated from
the School of Chemistry of the University of
the Republic. It offers its members ongoing
PHARMACEUTICAL INDUSTRY
38
training, participation in activities related
to their profession, union and social
information and activities. For further
information visit http://www.aqfu.org.uy.
Association of National Laboratories (ALN,
for its Spanish acronym): founded in 1943,
it brings together national and regional
pharmaceutical companies aimed at
promoting the development of the
pharmaceutical industry in Uruguay. For
further information visit www.aln.com.uy.
Chamber of Pharmaceutical and Related
Specialties (CEFA, for its Spanish
acronym): it gathers affiliates of
multinational pharmaceutical companies.
Uruguayan Association of Biotechnology
(AUDEBIO, for its Spanish acronym): this
association brings together companies and
institutions related to biotechnology,
including the participation of human
health-related organizations. Its goal is to
support the development of biotechnology
in Uruguay. For further information visit
http://audebio.org.uy/.
PHARMACEUTICAL INDUSTRY
39
5. General and sector-based
regulatory framework
5.1 General incentives
1. National and foreign investment
promotion regulations
Uruguay is very attractive compared with
other countries that receive investments
from the rest of the world, and for several
years now, it has had an active policy to
promote investments in the country.
Law 16,906 (1998) declared of national
interest the promotion and protection of
domestic and foreign investments. One of
its main features to be highlighted is that
foreign investors are granted the same
incentives as local investors and there is no
tax discrimination or restrictions for
transferring profits abroad.
Decrees 455/007 and 002/012 updated the
regulations of said law. For any investment
projects submitted and promoted by the
Executive Branch, it is possible to compute
as part of the tax payment (IRAE -
Corporate Income Tax) between 20% and
100% of the invested amount, depending
on the type of project and the score
attained on the basis of a matrix of
indicators. The IRAE nationwide flat rate is
25%. Personal property included in fixed
assets and civil works are exempt from the
Net Wealth Tax, and the Value Added Tax
is recovered from the purchase of
materials for civil works. Moreover, the
import of personal property included in
fixed assets which is not competitive in the
national industry is exempt from import
taxes or duties.
2. Reimbursement of VAT paid when
purchasing supplies
VAT paid in purchases is generally
recovered by discounting VAT invoiced in
sales, paying the State just the difference
thereof. Since in exports (of goods and
services) said tax is not invoiced, the
reimbursement of VAT included in the
purchase of materials is authorized directly
upon the company’s request. The Tax
Administration Office (DGI) issues credit
certificates which may be used in the
payment of other taxes.
Decree No 220/998 lists the transactions
covered by the concept of services exports.
By way of example the following are
mentioned: international broadcasting of
television material produced in the
country, logistics support services to
international cinema and TV production
companies, consultancy services provided
to people abroad, services rendered to
people abroad in the design, development
and implementation of specific logistics
support, services rendered by international
call centers provided that their main
activity is destined for the external market
and aimed at such, data processing,
services provided for the design,
development and implementation of digital
contents, market and social research
services, and advertising services rendered
by advertising agencies to customers
overseas.
3. Law on Free Zones
Free Zones in Uruguay are regulated by
Law No. 15,921 of December 17, 1987.
They can be operated on a private or state
basis. Free Zones under private operation
are administered, monitored and
controlled through the General Trade
PHARMACEUTICAL INDUSTRY
40
Office - Free Zone Area, Ministry of
Economy and Finances9. This office is the
main point of contact for all the
regulations, permits and controls regarding
Free Zones in the country. As for state
operated free zones, this is the area in
charge of their management.
Any kind of activity can be developed in
Free Zones: trade, industrial or services.
The various activities may involve the
processing of goods, storage, assembly and
disassembly of cargo, the provision of
services from Free Zones to other countries
and, in some cases, Uruguay. The industrial
activity may not only involve added value
but also change in the nature of goods.
Businesses authorized to operate from
Free Zones may be natural or legal persons
under any company form. As for legal
persons, there are no restrictions on their
form but they need to have an exclusive
purpose. There is no distinction between
domestic or foreign investments and the
latter are not required to meet any special
process or requirement. Foreign
companies are allowed to setup branches.
Up to 25% of their staff can be foreign10.
Goods can be indefinitely kept in the free
zones and their destination can be changed
at any time.
Benefits granted to companies set up in
Free Zones include the following areas:
Exemption from Corporate Income Tax
(IRAE), Wealth Tax (IP) and any other
9 www.zfrancas.gub.uy.
10 Note: This percentage can be reasonably
increased, with the prior authorization from the
government. It is worth mentioning that there is a
Bill which provides for a more flexible integration
under analysis.
current or future domestic tax. The
State is the guarantor of this exemption.
Dividends distributed among
shareholders domiciled abroad are also
tax-exempt in our country.
Foreign staff may be exempt from
making social security contributions in
Uruguay.
Sales and purchases of goods and
services to and from abroad are VAT
exempt. Sales and provision of services
within ZF are also VAT exempt.
Non-resident entities are also IRAE
exempt regarding activities developed
with foreign goods declared in transit or
kept within Free Zone, when they are
not bound for the national customs
territory. They are also IRAE exempt
when sales bound for the national
territory do not exceed 5% of the total
disposals of goods in transit or kept
within Free Zone.
Goods traded by Free Zones with the
rest of the world are exempt from
customs duties.
Law amendment project: Special
Economic Zones
Throughout these 25 years of validity, Free
Zones regulatory framework has been
successful in attracting investments,
creating jobs and diversifying exports. The
Special Economic Zone Bill which updates
Law No. 15,921 is generally aimed at
making two adjustments. On the one hand,
it updates and distinguishes the outlined
purposes and, on the other hand, it
expands the regime in order to foster
activities that promote countrywide
PHARMACEUTICAL INDUSTRY
41
development within a context of deep
transformation at global and local levels.
With regard to the updating of objectives,
new objectives have been incorporated
into the existing ones: the increase of
national labor skills, generation of national
added value, development of high-
technology and innovation activities,
decentralization of economic activities and
regional development. The authorization of
the development of new zones only to
projects located outside the Metropolitan
Area and which entail important economic
investments or less significant investments
but which purpose is to settle projects with
high technological content in the country
that contribute to the national
development in areas such as science,
technology and innovation is expected.
A new particular form called Service
Thematic Zones, aimed at promoting
activities in the health care, amusement
and entertainment and audiovisual areas is
included.
Another change would be keeping the
minimum percentage of national labor at
75% for industrial and commercial
activities and reducing it to 50% for
services activities, as this would be a
hindrance for the setup of companies that
render Global Exports Services. Moreover,
additional benefits are granted to
developers who submit inland projects as a
means to develop economic processes with
regional significance.
Finally, it is worth mentioning that all rights
acquired by already setup companies
remain unchanged as a sign of the stability
and continuity of the regime (which has
remained unaltered for six periods of
government under three different politic
parties). In line with this, the
abovementioned changes have no effect
on the international agreements executed
by Uruguay regarding Free Zones.
4. Free ports and airports
The Free Port system was established by
Law No. 16,246 on Ports of April 1992, as
regulated by Regulatory Decree No.
412/992, both for the Port of Montevideo
and other ports with capacity to receive
overseas vessels (Nueva Palmira, Colonia,
Fray Bentos and Paysandú).
Among other things, the law provides for
the free movement of goods within the
port customs facilities without requiring
authorizations or formal processes, and for
the free change of destination thereof
during their stay at said facilities, free from
taxes and duties applicable to imports.
Within port facilities the free movement of
goods is exempt from domestic taxes and
services rendered are VAT exempt.
Moreover, it provides for the possibility to
perform several operations with goods,
such as “warehousing, repacking,
rebranding, classification, batching and
unbatching, consolidation and
deconsolidation, handling and
segmentation.” Foreign legal persons are
Wealth Tax exempt for goods kept in
warehouses and Corporate Income Tax
exempt for income related to said goods.
The new Uruguayan Customs Code, which
has not been enacted yet, amends the
currently “indefinite” term for the
warehousing of goods to 5 years, which
can be extended.
In turn, contrary to the Free Zones, the
regulations applicable to Free Ports give
the possibility to keep the certificate of
origin - MERCOSUR, and use the duty
PHARMACEUTICAL INDUSTRY
42
preferences it grants. Moreover, it allows
the issuance of derived certificates of
origin.
In 2002, article No. 23 of Law No. 17,555
and Decree No. 376/02 provide for the
application of the Free Port system to
services rendered at Carrasco
International Airport. In November 2008,
Decree 409/008 regulates the application
of the law on Carrasco International
Airport, giving rise to the “Free Airport.”
Thus, benefits granted by law are
translated into operating, customs and tax
advantages to companies operating within
airport facilities.
Thereafter, the main airport terminal of
the country has airport customs facilities
from where to provide several logistics
value-added services to goods, giving rise
to a Distribution Center for the region.
5. Bonded Warehouses
On the understanding that port facilities
could not be enough to store and perform
logistics activities, Decree Law No.
15,691/1984 (Customs Code) authorized
the establishment of Bonded Warehouses.
These are fenced-in, closed or open
(esplanades), launches and pontoons
(floating warehouses) and tanks where
goods are stored with authorization from
Customs. Foreign goods are considered in-
transit by the national customs territory
and can be unloaded and reshipped at any
time, free from imports or exports duties
and any domestic taxes.
By law, bonded warehouses can be
government or state-owned, privately-
owned or rented by the State. In turn,
bonded warehouses can be used for
commerce, free-trade or industrial
purposes. Special warehouses used for
fractioning of bulk items are also allowed.
The operation of Bonded Warehouses is
similar to that of Free Ports, except that
Bonded Warehouses can be used for
industrial activities, i.e. operations destined
to change the nature of goods, such as:
Inclusion of local parts, features and
products (such as industrialization of
raw materials and semi-manufactured
products).
Adjustment, assembly and finishing of
vehicles, machinery and equipment.
All other similar transformation
operation.11
Goods are not allowed to remain under
this system for more than one year, even
when they are transferred to another
warehouse of the same or another
owner12, Free Ports do not have this
limitation. As for warehouses, the new
Uruguayan Customs Code brings forward
another distinction, including “logistics
warehouses” where changes of goods’
nature but not of goods’ origin are allowed.
6. Temporary admission
The Temporary admission scheme is
provided for by Law 18,184 and Regulatory
Decree 505/09. This authorizes tax-exempt
introduction of foreign goods into the
market to be subsequently exported within
a set timeframe. These goods can be
reshipped both in the condition they were
introduced or after having undergone
specific transformation, manufacturing,
repair or value-adding processes. In turn,
11 Article 100 of Customs Code.
12 Law No.16.736 of 5 January 1996, Article 180; and Decree No.216/06 of 10 July 2006, Article 21.
PHARMACEUTICAL INDUSTRY
43
article 11 of said law provides for the
application of this scheme to machinery
and equipment entering the country for
repair, maintenance or upgrading. The
term set by law for the stay of goods under
this scheme is eighteen months13.
Interested industrial companies may apply
for the import of goods under the
Temporary Admission scheme with LATU
(Laboratorio Tecnológico del Uruguay),
authorizing entity.
Moreover, Law 18,184 also offers Stock-
taking and Draw-back mechanisms. The
Stock-taking mechanism consists of
replacing goods imported under the
general scheme with the import of similar
goods, free from taxes and levies, when
they have been used as input for the
transformation of exported products in the
country. The Draw-back mechanism gives
the possibility to claim the refund of taxes
and levies paid for the import under the
general scheme of goods which, by
definition, can be imported under
temporary admission and which were used
in the country for the manufacture of
products bound for export.
7. Industrial Parks
According to Law 17,547/2002, an
industrial park is a plot of land which
includes infrastructure elements (roads,
access to energy and water, waste
treatment systems and communication
systems, warehouses, etc.) which enable
the development of industrial and logistics
activities14 within them. The
13 In some particular and duly justified cases, the
Executive Branch may extend this term up to eighteen additional months, non-extendable. 14 Article 6 of Decree 524/005 reads “apart from
industrial operations, storage, packaging, selection, classification, fractioning, assembly, disassembly,
abovementioned law provides for natural
or legal persons who set up within
industrial parks being subject to the
benefits and obligations set forth in the law
on investments (refer to section 5.1).
Specifically, according to decree 524/005
which provides the regulatory framework
for Law 17,547, industrial park users will be
granted:
Wealth tax exemption for fixed assets
(machinery and civil works) used in the
park for a term of seven years.
Exemption from import taxes for
machinery and equipment and fixed
assets to be introduced into the civil
works.
VAT credits regarding value added
included in the purchase of materials
and services for civil works and
equipment for data processing, among
others.
Currently, Uruguay has six authorized
industrial parks: Alto Uruguay Industrial
Park, Juan Lacaze Industrial Park, Zona Este
Industrial Park, Paysandú Industrial Park
and Parque Productivo Uruguay (Suárez).
As in the case of free zones, current
regulations are being updated and the
“Industrial and Service Parks Promotion
and Protection” bill is being studied by the
Parliament.
5.2 Specific sector incentives
Promotion of biotechnological activity:
handling or combination of goods or raw materials can be performed, provided they are exclusively associated to the industrial activities set up in the parks”.
PHARMACEUTICAL INDUSTRY
44
Decree No. 011/01315 provides for the
promotion of activities that generate
biotechnological products, services and
processes applicable to different strategic
production sectors, prioritizing the
agricultural, environmental, human and
animal health sectors. The Executive
Branch, in consultation with the
Biotechnology Sector Council, shall review
said prioritization every two years and may
include new sectors to be promoted in
biotechnological development.
To be eligible for the benefits under the
decree, at least one of the following
alternatives should be satisfied:
implementation of a Program for the
Development of Suppliers of
biotechnological products and services; the
company should be a micro, small or
medium sized company in the industry of
biotechnological products and/or services;
or it should be a new company that will
produce biotechnological products and/or
services.
Legislation provides for the exemption
from Corporate Income Tax (IRAE, for its
Spanish acronym) on income derived from
promoted activities, according to the
following percentages and terms:
a) fiscal years beginning between 1
January 2012 and 31 December
2017: 90%.
b) fiscal years beginning between 1
January 2018 and 31 December
2019: 75%.
15 http://www.mef.gub.uy/unasep_industria_biotecnologia.php
c) fiscal years beginning between 1
January 2020 and 31 December
2021: 50%.
Procurement Subprogram for the
Pharmaceutical Industry:
Decree 194/01416 creates the Government
Procurement Subprogram for the
Pharmaceutical Industry. It is applicable to
procurements carried out by the three
branches of government, the State Audit
Court, the Electoral Court, Contentious-
Administrative Court, departmental
governments, autonomous bodies and
decentralized services, public education
bodies and, in general, all agencies,
services and government bodies.
16 http://archivo.presidencia.gub.uy/sci/decretos/2014/07/miem_1153.pdf
PHARMACEUTICAL INDUSTRY
45
6. Main challenges
Uruguay is a country that features many
advantages due to its proximity to large
Latin American markets. In this regard, one
of the main challenges is to work for it to
become established as an excellent
opportunity for the pharmaceutical
industry to set-up their development
platforms towards the region.
Furthermore, it is worth noting that the
scale of the country enables the
implementation of plans and programs
reaching the entire population, as
demonstrated by the implementation of
the Plan Ceibal, which gave laptop access
to every school-aged child. This could also
be applied to health-related plans and
programs, an opportunity to attract
international companies interested in using
the country as a test bed, with the
resulting benefits to the population.
However, for international businesses to
continue choosing our country some
efforts should be made and these should
focus on the following aspects.
Build the "Country Brand."
Uruguay does not have a strong position in
the international pharmaceutical sector.
This has been noted when interviewing
international consultants in this field as
well as in international missions that we
have attended.
Currently, with the support of the Global
Services Program, we are working on
building a "pharmaceutical industry
network ”, which connects multinational
companies with local and regional
stakeholders to attract added value
investments. This is done by developing
promotional materials (brochures,
presentations and websites) as well as
jointly attending international events. This
successive participation has enabled a
better understanding of the parties
involved in the industry at an international
level and consequently, there are already
some projects in the pipeline.
Haste in project approval processes
Currently “speed” is a key competitive
advantage that is being exploited by small
economies. The industry’s perception is
that Uruguay has more bureaucracy than
is needed for approval processes, which is
a disadvantage when compared to other
regions. Not having a clear approval
process for clinical research and
manufacturing of biosimilars, for example,
limits the country in the field of research
and manufacturing of pharmaceutical
products.
In this regard, work is being conducted in
conjunction with the regulatory authority
in order to improve approval processes,
registration and inspection of facilities, as
well as clinical research projects, following
the highest Good Practice standards.
Development of the Academy-
Business relationship.
Considering that one of the opportunities
that has been identified is the rendering of
R&D services to the pharmaceutical
industry, capacity development aimed at
improving the Academy-Business
relationship is paramount for this service
not only to be successfully provided but
appreciated and valued by the industry. In
this respect, the Global Services Support
Program collaborates with public and
private R&D industries attending business
PHARMACEUTICAL INDUSTRY
46
meetings with companies interested in
these type of services, promoting this
activity with encouraging results.
Capacity utilization in Information
Technology and Communications
Uruguay boasts significant installed
capacity in all matters concerning
Information Technology and
Communications, with highly trained
human resources, a constantly growing
industry receiving national and
international investment.
Given that in the health market the
development of this area is still emerging
in the world, good opportunities arise for
the country to work in this field, for
example in the computerization of
hospitals (digitalization of patient history),
as well as in various applications for
monitoring patients.
Capacity utilization in Logistics and
Back Office Services
Uruguay has experience in the provision of
back office services, either through
multinational companies' Shared Services
Centers, or through companies that
provide services to companies who
outsource it. Since it is a service which
crosscuts various industries, these
established human resources and
experience capacities can attract the
international pharmaceutical industry to
work in the country. Something similar
happens with the logistics part, although in
this case capacities and experience is a
feature, it would also be necessary to
invest in appropriate infrastructure for the
stockpiling of drugs.
PHARMACEUTICAL INDUSTRY
47
7. Annexes
7.1 Trade agreements and investment protection
Uruguay is a country with a small economy,
which is open to international trade.
Therefore, it benefits from a significant
number of treaties and agreements
including Trade preference agreements,
Service agreements, Government
Procurement Agreements, Investment
Agreements and Agreements to Avoid
Double Taxation.
Information on agreements signed by
Uruguay has been outlined below.
For further information, please refer to the
“International agreements” document at
http://www.uruguayxxi.gub.uy/inversiones
/guia/acuerdos-internacionales.html.
Trade preference agreements:
It is possible to access several markets
from Uruguay with preferential access,
provided the country-of-origin regime
established in each agreement is observed.
Uruguay, together with Brazil, Argentina,
Paraguay and Venezuela is part of the
Southern Common Market (MERCOSUR).
Uruguay has signed, as part of the
Mercosur or independently, a series of
trade agreements that allow access to
other markets with preferential tariffs
beyond Mercosur.
MERCOSUR has signed trade agreements
with many countries in Latin America: Chile
(1996), Bolivia (1996), Colombia, Ecuador
and Venezuela (2004), Peru (2005) and
Cuba (2006). An agreement that exclusively
covers the automotive sector was signed
with Mexico (2002). Outside the region,
the Mercosur has signed agreements with
Israel (2007), India (2004), SACU (2008),
Egypt (2010) and Palestine (2011).
Mercosur is also part of the Global System
of Trade Preferences (GSTP) among
developing countries, in force in Uruguay
since 2005. SACU, Egypt and Palestine
agreements have not yet come into force.
Uruguay has also entered into a bilateral
Trade Agreement with Mexico (2003),
which enables the free movement of goods
and services between both countries.
Service agreements:
Service agreements intend to grant
guarantees to the parties on the respect
for some basic principles, such as national
treatment and the most favored nation,
guaranteeing the entry to markets with no
discrimination. In general, these
agreements entail commitments of the
countries with respect to the different
service trade sectors and four supply
forms: cross-border supply, consumption
abroad, commercial presence and
presence of natural persons.
The importance granted by Uruguay to
service trade has resulted in the
subscription of agreements involving
commitments in this respect. To date,
three service agreements have been
entered into with MERCOSUR, Chile and
Mexico.
Government procurement agreements:
Most countries have specific rules in place
which regulate the market of
procurements by the State or State
companies, including restrictions or
discriminations favorable to nationals
within these rules. Public procurement
PHARMACEUTICAL INDUSTRY
48
agreements intend to guarantee some
basic principles related to national
treatment and transparency in procedures,
among other things.
Even though Uruguay has an open market
in terms of government procurement, in
which foreign investors and bidders may
submit their proposals, currently there is
an agreement in place with Chile and
others are under negotiation.
Investment agreements:
Presently, Uruguay has thirty agreements
in force regarding Investment Promotion
and Protection. Three of these agreements
(Chile, Mexico and United States) include
pre-establishment, while others are post-
establishment, not including liberalizing
provisions.
The scope of the agreements signed by
Uruguay is extensive, providing the
greatest possible guarantees to those who
decide to invest in the country. Most of the
signed agreements have an open definition
of investment, in which the universe of
investment is implied hence, having a very
broad Agreement coverage. There are five
cases in which the definition is exhaustive,
where a sufficiently long and broad list is
provided, therefore what is encompassed
by the Agreement in these cases is also
very important.
The main principles sought by investors in
these type of agreements are mirrored in
the agreements currently in place in the
country. All agreements signed by Uruguay
guarantee foreign investors certain
principles such as the clause of the most
favored nation, provisions of fair and equal
treatment, expropriation related clauses
and no restrictions on transfers clauses.
Likewise, all agreements signed by Uruguay
on investments contain provisions related
to the settlement of disputes between an
investor and the State where the
investment is made and between States,
including the possibility of resorting to an
international court by an investor who has
a claim against the State.
Agreements to avoid double taxation:
Different tax criteria may cause companies
or individuals to be subject to taxes for the
same source of earned income in more
than one country when operating at
international level. International
agreements seek, among other things, to
avoid double taxation limiting the taxing
powers of each country.
Uruguay has thirteen agreements in place
with provisions that eliminate double
taxation between the parties, regarding
income and wealth taxes, and ensure non-
discrimination in taxation. These
agreements offer stability and
predictability in tax matters, establishing
mechanisms to avoid double taxation and
indicating which of the Contracting States
has tax competence for the main taxes
related to income and wealth. This is
achieved by the waiver of jurisdiction of
one of the States or by imposing maximum
rates in the event double taxation is
admitted and generating mechanisms to
deduce or exempt taxes paid in another
territory.
Uruguay has this type of agreement with
the following countries: Spain, Switzerland,
Portugal, Mexico, Malta, Liechtenstein,
India, Korea, Finland, Ecuador, Germany,
Hungary and Argentina.
PHARMACEUTICAL INDUSTRY
49
7.2 Global trends
The global market for health-related
services and products is clearly growing.
This can be seen in the sales performance
of pharmaceutical products and medical
technology. In 2012, global sales of these
two types of goods totaled nearly a trillion
dollars. According to Evaluate Group
projections, in the 2012–2018 period, drug
and medical equipment sales shall grow at
an average annual rate of 3.8% and 4.5%,
respectively.
The growth of the sector is also reflected in
the resources allocated for research and
development (R&D) activities. The
pharmaceutical industry's global spending
on R&D and medical technology in the next
6 years are expected to reach US$ 997
billion accumulated.
Chart No. 1 – Worldwide sales of drugs (US$ billions)
Source: EvaluatePharma.
Chart No. 2 – Worldwide sales of medical technology (US$ billions)
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450
500
2012 2013 2014 2015 2016 2017 2018
Source: EvaluateMedTech.
91%
90% 9%
10%
716 717 749
790
835
881
926
500
600
700
800
900
1000
2012 2013 2014 2015 2016 2017 2018
Generic
Branded
PHARMACEUTICAL INDUSTRY
50
Chart No. 3 – Global companies expenditure on R&D (US$ billions)
Source: EvaluateMedTech and EvaluatePharma.
The main drivers of the world's
pharmaceutical and health industry are
listed below17:
The world population is expected to
grow from 7,000 million to 9,000 million
by 2050 (UN).
Chine is investing US$ 125,000 million in
the health system and is a fast growing
market.
Generics are offering significant savings
compared to brand products and thus
drugs are becoming more affordable,
particularly in developing countries.
The aging population is driving the
growth of new high-cost technology,
particularly in the field of
biotechnology-based drugs and medical
devices based on minimally invasive
techniques.
17 Eamon Shehee, strategic plan for the pharma & health sector in Uruguay - 2012
Longevity is leading to higher incidents
of chronic diseases associated with the
modern lifestyle and aging.
Increasing demand for specialized
treatments of more complex diseases,
which involve a more intense
intervention and expensive treatments.
The health needs of many
subpopulations of patients with specific
diseases are creating a growing
multiplicity of medical specialties.
Governments, through tax and financial
incentives are the main promoters of
research and innovation, as well as the
main funders of health, together with
medical insurance companies.
Consumer pressure has led to the
provision of an improved health care
service for older adults and people with
fewer resources.
Government budgets are under intense
pressure, which in turn is being
transferred to product and service
155 159 164
168 173 177 181
75
100
125
150
175
200
2012 2013 2014 2015 2016 2017 2018
Pharmaceutical products Medical technology
PHARMACEUTICAL INDUSTRY
51
suppliers who are forced to reduce their
prices.
The biopharmaceutical industry is on
the path of convergence of biology and
engineering, but it will eventually be the
investment made by technology
companies which will ultimately
transform the biotechnology industry
from a "discovery science" into an
"information science."
Drugs tailored to each patient and
adapted to their genomic conditions
(pharmacogenomics) are having a
growing impact on health.
The adaptation of information
technologies, materials science,
imaging, nanotechnology and
sophisticated modeling and simulation
are fields in which many breakthroughs
have taken place and these are the
main drivers of the rapid growth of
medical devices and diagnostics.
Given the aforementioned global trends, at
present it is a fact that the management
and administration of companies linked to
the health and pharmaceutical industry
must make a strong emphasis on
maintaining innovation standards, but with
a restriction on raising prices, therefore
generating loss of profitability. As a result,
new opportunities for the provision of
services have arisen and will continue to do
so in the future.
Some of these opportunities are described
below:
Due to high internal costs, large
companies engaged in pharmaceutical,
medical devices and diagnostic methods
activities are under increasing pressure
to outsource, and are looking for
innovative service providers,
particularly in research and drug
distribution.
There are opportunities for short term
added value in the manufacturing of
generic drugs, where subcontractors
can offer process innovation,
productivity improvements "Lean Six
Sigma” 18, nanotecnology and strict
quality control.
There are also opportunities for
contracted small biotechnology
manufacturers, who may offer
"GMP"19skills. This is the result of a
growing number of patented
biotechnological drugs whose patents
will expire and shall be replaced by
biosimilars (biotechnological generic
drugs).
Strong local manufacturing capabilities
in biotechnology provide for
opportunities in the short term to offer
specific training and research in
purification, packaging, process
improvement and in the new delivery
processes. (It is worth noting that
capabilities required for the
bioprocessing industry are significantly
more complex than for the
manufacturing of conventional small
molecule drugs.)
Most biotechnological drugs should be
distributed by injection and have
limited stability. Consequently, the drug
should be packaged in vials or syringes
in a sterile fill finish center. The outlook
18 SIX SIGMA is a methodology for process improvement, focused on reducing the variability thereof, reducing or eliminating defects or flaws in the delivery of a product or service to the client 19 Good Manufacturing Practice.
PHARMACEUTICAL INDUSTRY
52
for regional providers of sterile finish
capabilities is positive.
The challenge of providing direct
patient therapy in hospitals or at home
in a very controlled environment
represents a considerable opportunity
for cold-chain logistics.
"Lyophilization" is a process for the
drying of blood plasma, without
destroying physical structure. The
market is growing rapidly driven by new
biological products such as monoclonal
antibodies and recombinant proteins. A
recent survey showed that 70% of
global capacity has been committed
until 2015. (Pharmsource)
There are ample opportunities for the
outsourcing of market research and
market access activities, patient
information services, marketing, local
distribution, clinical trials, adverse event
monitoring, bioinformatics, sales,
aftercare services, regulation services,
etc.
In the broader area of services, there
are significant opportunities for the
innovation of services related to the
modification and the delivery of
traditional back office services in an
innovative way and to the use of IT to
boost efficiency.
PHARMACEUTICAL INDUSTRY
53
7.3 Uruguay at a glance (2013)
Official name Oriental Republic of Uruguay
Geographical location South America, bordering Argentina and Brazil
Population 3.4 million (2013)
Area 176,215 km2
Capital city Montevideo
Official language Spanish
Gross Domestic Product (GDP) US$ 55,707 million (2013)
GDP per capita US$ 16,421 (2013)
Life expectancy at birth 73 years (men), 79 years (women)
Annual population growth 0.4% (2013)
Crude birth rate 14.3 per 1,000 inhabitants (2012)
Crude death rate 9.3 per 1,000 inhabitants (2012)
Literacy rate 98%
Main cities Montevideo, Punta del Este, Salto, Rivera, Paysandú and Colonia
Political division 19 departments
Weather Temperate and humid, homogeneous precipitation throughout the year
Currency Uruguayan peso (1 US$ = 22 pesos; annual average 2013)
System of weights and measures Metric decimal system
Form of state governance Democratic republic with presidential system
Time zone GMT -3:00
7.4 Main economic indicators 2008-2013
Indicators 2009 2010 2011 2012 2013
GDP (anual growth rate) 2,4% 8,4% 7,3% 3,7% 4,4%
GDP (US$ million) 30.461 38.882 47.237 50.004 55.708
Population (million) 3,34 3,36 3,37 3,38 3,39
GDP per capita (US$) 9.107 11.584 14.017 14.792 16.421
Unemployment rate (% EAP, annual average) 7,7% 7,2% 6,3% 6,5% 6,6%
Exchange rate (pesos per US$, annual average) 22,6 20,1 19,3 20,3 20,5
Exchange rate (annual growth rate) 7,7% -11,1% -3,7% 5,2% 0,8%
Annual inflation rate 5,9% 6,9% 8,6% 7,5% 8,5%
Total exports (US$ million) 8.711 10.719 12.868 13.398 13.603
Total imports (US$ million) 8.191 10.089 12.779 14.685 14.964
Trade surplus (US$ million) 521 630 89 -1.287 -1.361
Trade surplus (% of GDP) 1,7% 1,6% 0,2% -2,6% -2,4%
Overall fiscal balance (% of GDP) -1,7% -1,1% -0,9% -2,8% -2,4%
Gross capital formation (% of GDP) 20,1% 18,9% 21,1% 23,6% 23,6%
Gross debt (% of GDP) 75,4% 61,4% 57,2% 62,3% 59,5%
Foreign direct investment (US$ million) 1.529 2.289 2.504 2.687 2.796
Foreign direct investment (% of GDP) 5,0% 5,9% 5,3% 5,4% 5,0%
Sources: BCU, INE and MEF