Effect of Free Trade Agreements on Pharmaceutical Market Competition: The Case of the 2009 US-Peru Free Trade Agreement and Its Implementation as National Drug Policy

Authors

Lita Araujo, MCPHS University
Enrique Seoane-Vazquez, Chapman UniversityFollow
Michael Montagne, MCPHS University

Document Type

Article

Publication Date

4-2-2021

Abstract

Free Trade Agreements (FTA) are controversial for threatening essential aspects of health, especially access to affordable medicines. The US-Peru FTA required changes in the Peruvian pharmaceutical legislation that resulted in the implementation of the National Drug Policy (NDP) of 2009. The NDP included more robust technical requirements for registration, a Peruvian Good Manufacturing Practices certificate, a longer timeline for drug registration, and an increase in registration fees. This study evaluated the impact of the FTA on the number of registrations and competition in the Peruvian pharmaceutical market.

Data for the period January 2005 to April 2014 were provided by the Peruvian drug regulatory authority (Dirección General de Medicamentos, Insumos y Drogas, DIGEMID). A total of 31,114 pharmaceutical products with unique registration numbers were evaluated. Brand drug new registrations decreased from 1789 in 2005 to 455 in 2013, and the number of generic registrations decreased from 621 in 2005 to 114 in 2013. Brand re-registrations also decreased from 714 in 2005 to 58 in 2013. There were 228 brand products awaiting registration in 2009 and 1,908 in 2013. The proportion of products awaiting registration was three times greater for brand than for generic products in 2009–2013.

Registration of brand and generic medicines significantly declined after the implementation of the US-Peru FTA in 2009. The decline in the number of registrations was associated with more robust technical requirements, a longer DIGEMID registration timeline, and an increase in registration fees. The stronger registration requirements are expected to increase the quality of the drugs marketed in the country, but also less competition and a reduction in domestic registrations.

Comments

This article was originally published in Health Policy OPEN, volume 2, in 2021. https://doi.org/10.1016/j.hpopen.2021.100039

Recommended Citation

Araujo L, Seoane-Vazquez E, Montagne M. Effect of free trade agreements on pharmaceutical market competition: The case of the 2009 US-Peru free trade agreement and its implementation as national drug policy. Health Policy Open. 2021;2:100039. https://doi.org/10.1016/j.hpopen.2021.100039

Copyright

© 2021 Published by Elsevier B.V.

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This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.