pharmaceutical industry - smartservices.uy · pharmaceutical industry 3 1. why invest in the...

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


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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.


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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.


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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.


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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.


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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.


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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.


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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


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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


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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


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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:


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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


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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.


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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.


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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


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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.


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.


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).


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.


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*


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


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.


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


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.


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.



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.


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.


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


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


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 graduates Not available 4,200

ICT related studies

Total No. of students enrolled 3,400 10,000


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


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.


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.


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.


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


speak)

28%

Other: French,

German or Italian


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.


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


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


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


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/.

http://audebio.org.uy/


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


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


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


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.


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”.


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


2019: 75%.

15 http://www.mef.gub.uy/unasep_industria_biotecnologia.php

c) fiscal years beginning between 1


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


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


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.


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

http://www.uruguayxxi.gub.uy/inversiones/guia/acuerdos-internacionales.html

http://www.uruguayxxi.gub.uy/inversiones/guia/acuerdos-internacionales.html


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.


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)

349357

374

394

414

434

455

200

250

300

350

400

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


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


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.


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.


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

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