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HEALTHCARE HEALTHCARE LIFE SCIENCES LIFE SCIENCES REVIEW REVIEW PHARMACEUTICALS: SHAKING UP THE SYSTEM PHARMACEUTICALS: PAGE 21 PHARMACEUTICALS: CHILE FROM SHAKING UP THE SYSTEM SHAKING UPA THE SYSTEM MANAGER’S PAGE 21 PAGE 21 PERSPECTIVE PAGE 12 & CARVING OUT A MEDICAL DEVICE MARKET CARVING OUT A MEDICAL PAGE 56 CARVING OUT 21 A MEDICAL PFIZER’S DEVICE USD MILLION MARKET DEVICE MARKET INVESTMENT IN CHILEAN PAGE 56 PAGE 56 BIOMEDICINE PAGE 16 CONVERGENCE IN ACTION: CASE STUDY: SILANES FOCUS ON DIABETES CONVERGENCE IN ACTION: PAGE 70 CONVERGENCE IN PAGE ACTION: INTERVIEW JOÃO UNIVERSIDAD DE 82 LOS CASE STUDY:WITH SILANES FOCUS ON DIABETES CASE STUDY: SILANES FOCUS ON DIABETES SIMÕES OF GRÜNENTHAL ANDES’ FIRST SCIENTIFIC PAGE 70 PAGE 82 PAGE 70 PAGE 82 CHILE SPIN-OFF PAGE 24 PAGE 32 MEXICO 2013 MEXICO 2013 COFEPRIS Revamped COFEPRIS Revamped PHARMA’S CHANGING LANDSCAPE Mikel Arriola, the man who changed an institution and an industry PAGE 18 CHILE published in association with Mikel Arriola, the man who changed an institution and an industry PAGE 18 Mikel Arriola, the man who changed an institution and an industry PAGE 18 HELIA MOLINA, CHILE’S MINISTER OF HEALTH, ON THE COUNTRY’S NEW DRUGS LAW PAGE 8 published in association with published in association with 2013 2013 2013 August 2014 Brought to you by 2 Es posible acercar la ciencia y la sensibilidad. A través de una amplia gama de productos en cardiología, cirugía cardiovascular, cirugía de la columna, ORL, diabetes, y neuromodulación Medtronic demuestra día a día que una idea innovadora puede transformar miles de vidas. www.medtronic.com CHILE AUGUST 2014 3 As Minister of Health, I am proud to introduce this special report dedicated to the pharmaceutical and healthcare industry. We consider this communication platform as a great opportunity to display the capabilities of pharmaceutical companies and healthcare in Chile. 2014 represents an exciting time for healthcare in Chile with the implementation of a new medicine law; ensuring the creation of a system that makes access to medications easier and more transparent for patients and moreover assures a sufficient supply all over Chile. The new government of Chile has made a commitment to improving the health of the population and the Ministry of Health will be active to reduce chronic diseases. Chile has one of the most important developed markets in the region. With an excellent base for human resources, strong infrastructure, immense production capacity renowned for high quality and affordable costs, Chile continues to provide the best healthcare to Chileans while at the same time ensuring an efficient regulatory environment for pharmaceutical companies With this special report on the industry, I invite all members of the pharmaceutical and healthcare community to take a look at the exciting activities that Chile has to offer. Warm regards, Dra. Helia Molina Milman Minister of Health Chile CHILE AUGUST 2014 4 Acknowledgements Focus Reports would like to thank Jean Jacques Duhart, president of CIF; Elmer Torres Cortes, president of ASILFA; Ricardo Fábrega, director of the Public Health Institute, and Eduardo Bitran, executive vice president of CORFO for their cooperation and support in this project and Helia Molina, Minister of Health, for taking the time to meet with us and provide her support for this endeavor CHILE AUGUST 2014 5 “Sharing Expertise”, more than just two words. «Sharing Expertise» is a promise from B. Braun to customers and colleagues to share medical knowledge and expertise for the benefit of health, to use this knowledge and build on it effectively and consistently, in dialogue with partners. B.Braun Medical S.p.A. - Av. Puerta Sur 03351 | San Bernardo, Santiago de Chile | Fono: 56-2-24407100 | Fax: 56-2-26234334 CHILE AUGUST 2014 6 CONTENTS Chile: Pharma’s Changing Landscape 8 Level playing field 9 The R&D Incentive 10 Tecnofarma: an outstanding example 11 Chile from a manager’s perspective 12 Changing Landscapes 12 Deutsche Pharma: partner of choice 13 Multi Latina 14 A particular market 14 The Overview effect 15 Pfizer’s USD 21 million investment in Chilean biomedicine 16 Agility and flexibility the key to successful product launches 18 Building a network for natural products 20 Bringing Medtronic to Chile 22 Grünenthal on how to blend the cultures of two family companies 24 Leading Chile’s biotech wave 26 Chile’s geography proves challenging for logistics companies 28 German hospital at the forefront of private medicine in Chile 30 Universidad de los Andes’ first scientific spin-off 32 This report was prepared by Pharmaboardroom.com Publisher: Ines Nandin Project Director: Martijn Jimmink Project Coordinator: Gabriela Cordova To read exclusive interviews and more info, please log onto www.pharmaboardroom.com or write to [email protected] Copyright All rights reserved. No part of this publication maybe reproduced in any form or by any means, whether electronic, mechanical or otherwise including photocopying, recording or any information storage or retrieval system without prior written consent of Focus Reports. While every attempt is made to ensure the accuracy of the information contained in this report, neither Focus Reports nor the authors accept any liabilities for errors and omissions. Opinions expressed in this report are not necessarily those of the authors. CHILE AUGUST 2014 7 CHILE AUGUST 2014 8 CHILE: Pharma’s Changing Landscape “2014 represents an exciting time for healthcare in Chile with the implementation of a new national drug law; ensuring the creation of a system that makes access to medications easier and more transparent for patients and, moreover, assures a sufficient supply all over Chile,” explains Helia Molina, a doctor specializing in pediatrics and nephrology and Chile’s Minister of Health since March 2014. The ‘Ley de Farmacos,’ or Drugs Law, was passed by Chile’s former government in January 2014; its implementation now rests with the new administration. CHILE AUGUST 2014 aUGUSt 2014 FOCUS REPORTS S1 pharmaboardroom.com 9 Special SponSored Section chile report “The new government of Chile has The Chamber of the Pharmaceutical made a commitment to improving the Industry in Chile (CIF), which reprehealth of the population,” Molina exsents the international innovators, will plains, “and the Ministry of Health will carefully monitor the implementation of expand the list of chronic diseases inthe new healthcare law, which requires cluded in the Regime of Explicit Health prescriptions to mention the name of the Guarantees (AUGE) plan, which enchemical compound. While this is seen sures government-funded coverage for as positive for the customer, who will patients regardless of age, class, and From left: Helia Molina, Minister of Health; now have access to cheaper alternative Ricardo Fabrega, director of the Public ability to pay.” products and also their personal brand Health Institute This should contribute to boost a preference, for, innovators there is still market that is already expected to grow a major concern about bioequivalence. 8.2 percent between 2012 and 2017 according IMS Health. In Chile, as in other Latin American countries, similIn 2012, the Chilean pharmaceutical market was worth a ares have high market penetration: generic drugs that do total of USD 2 billion, according to the latest available data not have proven bioequivalence. “If the law would allow from IMS. physicians to prescribe any generic drug including nonThe new government plans to introduce further legisla- bioequivalents, all efforts made by previous governments tion to improve healthcare in Chile. In her paper entitled would be for nothing,” says Jean Jacques Duhart, execu‘50 Commitments for the First 100 Days of Government,’ tive vice president of CIF. “A large portion of products on President-elect Michelle Bachelet builds the basis of her the Chilean market cannot demonstrate quality, safety and plan for better health services for the nation, committing efficacy through bioequivalence studies. Similares are neito invest significantly in the construction of new hospitals, ther generics nor originals and have not demonstrated their increase the number of specialists to combat long waiting quality, efficacy and safety as recommended by the World lists in the public sector and provide patients with better Trade Organization.” access to free drugs. He also warns: “This is not merely a concern in terms As it currently stands, Chile’s universal healthcare plan of health and risk for patients but it also introduces an imcovers 80 percent of the population. The remaining 20 per- portant market distortion—different actors are competing cent are entitled to pick their coverage from a number of with different standards.” private insurance companies known as ISAPRES. 80 percent of people in Chile should have access to free drugs un- LeveL pLaying fieLd der FONASA, the public health insurance system; however, the reality is that there are often shortages at hospitals, and Chile is aiming to achieve complete bioequivalence of geas a result people turn to private pharmacies to fill their nerics by the end of 2014. Chile’s Public Health Institute prescriptions out-of-pocket. As a result, despite FONASA, is leading the bioequivalence testing, aimed at regulating out-of-pocket expenditures in Chile are some of the high- differences between generic and bioequivalent drugs. The est in the OECD: A total 4.6 percent of the average Chil- recently appointed director of the Public Health Institute, ean family’s budget is spent on healthcare, compared to the Ricardo Fabrega, echoes the need for drastic change and OECD average of 2.86 percent. stresses that: “laboratories that produce generics will have There is positive news on some fronts however: after to understand that they must comply with bioequivalence years of infamously tense relations between MNCs and studies; otherwise we will take them out of the market.” the government, both parties finally seem to have found The request for bioequivalence could be a game changer. a platform for dialogue. “As an industry, we have an ac- Companies producing similares could be forced out of the tive dialogue with the ministry regarding the expansion market, or to drastically change their practices. Accordof access to innovative medicines, but the discussion is ing to Carlos Cicogna, managing director of MSD Chile, still young and we still have a lot to do,” explains Erich it could also drive investments from MNCs in the country: Viertel, country manager at Janssen Chile. “Finding the currently, MNCs are responsible for more than half of the best path to lead Chile toward economic development has bioequivalent generics on the market. “The environment is been an ongoing task of Chilean governments and lead- getting more attractive for innovators such as MSD: with ers over the last century. And if the country is able to the new regulations we will see an equal playing field; fair sustain its current momentum, at the end of this decade conditions are being implemented. And as a result there is it will probably become the first fully developed country an increasing interest from the industry to increase investin Latin America.” ment in the country.” S2 FOCUS REPORTS aUGUSt 2014 CHILE AUGUST 2014 10 Special SponSored Section pharmaboardroom.com chile report Cicogna, who has been in Chile since 2009, has already witnessed drasThe R&d incenTive tic change in the market: “There have been two major developments in the With the goal of making Chile a hub past five years: the implementation of for innovation, the Chilean Ministry the new drug law and the shift in landof Economy and CORFO, the Chilscape: the top players on the Chilean ean Economic Development Agency, pharmaceutical market used to be local announced last year that four multiplayers, but today the key players are From left: Jean Jacques Duhart, executive national companies would invest in vice president, CIF; Erich Viertel, country multinationals.” new research and development centers. manager, Janssen Another proposal currently being From the pharmaceutical sector, Pfizer discussed in parliament is the complete will invest in a precision medical cenoverhaul of ANAMED, the national regulatory agency for ter studying new genome-based diagnostic technologies for medicines in order to bring it in line with other regulacancer. The aim is to enhance Pfizer’s precision medicine tory bodies around the world. Elmer Torres Cortes, general approach to help understand the underlying biology of dismanager of ASILFA (the association representing generics ease and identify patients likely to benefit from new drugs. companies in Chile) explains, ANAMED is currently part For the project, Pfizer partnered with the government to of Chile’s Public Health Institute, but should be separated develop technology and research: CORFO has contributed in order for it to stand as an independent regulator of mediUSD 7 million out of a total investment of USD 21 million. cines. The current plan being discussed for ANAMED is “Our expectation is that with the initial support of the govfor it to reach level four of the Pan American Health Orgaernment, this will be the first of a series of programs that nization (PAHO) assessment table, at which point it can be Pfizer will develop in Chile,” explains CORFO’s executive designated a reference authority for medicines. “ANAMED vice president Eduardo Bitran. “With this subsidy, which should be autonomous, independent and capable of moniwe consider seed money, we expect Pfizer to change its view toring the local and international industry. We believe this of the country and continue to develop applied research in is fundamental for the pharmaceutical industry in Chile,” Chile. As a country we are sending a signal with the aim Cortes adds. that other pharmaceutical companies will follow suit.” QP - Tecnofarma - Phex Chile_1 CHILE AUGUST 2014 aUGUSt 2014 FOCUS REPORTS S3 pharmaboardroom.com 11 Special SponSored Section chile report Chile lead the per capita rate of cliniThis strategy seems to be paying off: cal trials in Latin America (0.34 per 10 “The feedback from the industry has 000 inhabitants, threefold of that of been extremely positive and as a result Brazil or Mexico). we have received many inquiries about Roche has a long history of conductthe center,” says Ricardo Avila, mediing Clinical trials in Chile. Currently cal director at Pfizer Chile. “It seems the company has 19 on-going trials in that there is an increasing interest to 10 different disease stages and is eager increase investment in the country.” to conduct more in the future. AccordPfizer’s country manager in Chile, Car- From left: Carlos Cicogna, managing ing to Ciro Caravaggio, general manlos Murillo, feels responsibility to turn director, MSD; Elmer Torres Cortes, ager of Roche conducting clinical trials this project into a success in the coming general manager, ASILFA in Chile can be expensive, the process years and believes that Pfizer has paved can be slow, and requires significant approval hurdles. the way for Chile to position itself as a biotech hub for “Furthermore, many don’t see the value the trials can bring Latin America. “I expect the ecosystem to start flourishto a hospital or a patient. For a major oncology hospital, ing soon,” he asserts. “This country is for our company an example of how we can work in partnership with the government.” Over the past decade, as clinical research activities have been growing steadily within Latin America, Chile has With the introduction of the meaworked hard to become a regional leader for conducting sures to enforce bioequivalence, clinical trials. Due to its qualified human capital base and companies must adapt quickly if favourable government environment, the country has comthey want to continue to compete petitive advantages for developing such a cluster. Currently, in the market. Tecnofarma, a Uruguayan company that has been in the Chilean market since 1983, is moving rapidly on this front, and is bullish about its future prospects in the country, having Antonio Avila, general manager, recently secured new Santiago Tecnofarma office space as part of the company’s continued growth plans. Antonio Avila, general manager of the company, arrived in 2011, after working experience in Venezuela and Dominican Republic, with a fresh outlook on the business. Avila adapted the business model to the current needs of the market. The company increased its business units and launched new products to the market while focusing on its core products. With a broad product portfolio, Avila is currently focusing on products for oncological and non-oncological therapies. “Tecnofarma launches about 4-5 products per year,” Avila says. “This is challenging for a pharmaceutical company and only succeeds with a wellplanned business model.” The company has a positive attitude towards bioequivalence and Avila is confident that the company will meet the deadlines for bioequivalence standards for its products in Chile: “The government created three product lists detailing the dates by which the products should have proven bioequivalence and therapeutic efficacy. We are already advancing on each list and I am positive we will reach the objecwww.tecnofarma.cl tives,” Avila explains. Tecnofarma: an outstanding example 1-1.pgs 07.23.2014 magenta cyan yellow 23:38 black S4 FOCUS REPORTS ADVANSTAR_PDF/X-1a aUGUSt 2014 CHILE AUGUST 2014 12 Special SponSored Section pharmaboardroom.com chile report Chile from a manager’s perspective Ciro Caravaggio took the helm of the Chilean operations of Roche a little less than three years ago after an experience in Roche’s headquarters in Basel, and a career with the same company in his home country, Canada. Caravaggio describes how different Chile and the Chilean environment were from what he expected. First and foremost I found healthcare was more politicized and Ciro Caravaggio, in the media than I was used to. general manager, In particular as I arrived we were in the midst of launching Roche Herceptin, a revolutionary product for the treatment of breast cancer. Herceptin was not reimbursed in the public setting at the time and several actors where pushing to get the drug approved. Immediately it became clear to me that there was no formal evaluation process in place. Naturally each country is different in terms of market access and its reimbursement system but what was different in Chile is that the industry is not officially part of the reimbursement or access process. Cécile Bassereau, managing director B. Braun Chile, took over the reins of the Chilean operation in 2012. She describes the challenges and achievements she faced as the head of local operations. I took the helm of a German company, in Chile while being French. In such a multicultural environment I am trying to transmit that we have to be flexible and tolerant without prejudice. Chile has been developing extremely fast, with a five percent GDP growth rate in the past decade. Nevertheless public Cécile Bassereau, hospitals in Chile do not have access to some state-of-the-art managing director, technology and sometimes the cost of a medical device looks B. Braun like a barrier. But it is important to look at long-term benefits. That being said, it is a challenge and our responsibility to influence decision makers to make them adopt a long-term cost benefit approach to treatments with the help of state of the art technology. João Simões has been with Grünenthal since 2004. Prior to his appointment as head of integration at Grünenthal Chile, he served as CFO for Latin America and country manager, in his home country, Portugal. Simões elaborates on the fundamental differences between a country like Chile and Southern European markets. I see similar trends in terms of healthcare. In Southern European markets, healthcare is substantially funded by the government. In Chile we see a similar trend as the newly elected João Simões, head government is moving forward with the improvement of the of integration, country’s healthcare system; increasing coverage for Chileans. Grünenthal Chile Public healthcare in Chile is improving its quality, but the coverage on medicines is still below the expectation of its people. Chileans want access to medicines for which they do not have enough resources. Universal healthcare is a global trend, which we also see in Chile. Although I see both worlds coming closer the Portuguese and Chilean market dynamics are still quite different today. Healthcare in Portugal is mostly funded by the government, while Chile still has a high patient out-of-pocket expenditure on health. clinical research is an integral part of care and not an afterthought; it is critical! So many patients are at the end of their treatment and want new hope.” Historically the clinical trial environment has been seen as a matter for international companies but the CIF is working hard to turn around this situation. “We are working on involving more local partners in clinical trials and research and development. It is our ambition to establish Chile as a leader for clinical trials and research in medicines”, CIF executive vice president, Jean Jaques Duhart said. changing Landscapes Pharma M&As are back with a vengeance. Latin America, which is predicted to grow two to three times faster than developing markets in the years to come, has been a prime target. Chile has not been spared in this recent activity, with several acquisitions in recent months. The dealmaking in Chile started in December 2013 when Grünenthal Group, an international research-based pharmaceutical company headquartered in Aachen, Germany, completed the acquisition of Andrómaco Laboratories for an undisclosed sum. Andrómaco is a leading Chilean pharmaceutical company with over 70 years in the market that specializes in prescription drugs, but also has a wide range of high technology products, generics and OTC. Grünenthal accepted the public tender offer with respect to the acquisition of all issued and outstanding shares of Andrómaco. João Simões, head of integration at Grünenthal Chile, explains that the acquisition has been a QP - Deutsche Pharma - Phex Chile_1 CHILE AUGUST 2014 aUGUSt 2014 FOCUS REPORTS S5 pharmaboardroom.com 13 Special SponSored Section chile report major step in the company’s growth Prescription Drug Sales in Units strategy and has almost doubled its revTop 5 Ranking 2011 enues up to USD 450 million in Latin (Mkt Share) America. In the words of Grünenthal 1 Laboratorio Chile 6.2% Group’s CEO, Eric-Paul Pâques: “With 2 Laboratorio Saval 5.2% Empresas Andrómaco, we acquire the Andromaco 3 4.7% best regional company to complement 4 Recalcine 4.3% our own business and our therapeutic Laboratorio Bago 5 3.8% areas in the Andean countries and Cen- From left: Carlos Murillo, country manager, Top 5 Ranking 2014 tral America.” In Chile, it propelled Pfizer; Eduardo Bitran, executive vice (Mkt Share) president, CORFO Grünenthal into the market’s top four 1 Laboratorio Chile 5.8% companies. 2 Grunenthal Group 4.9% The latest move In May 2014, Alliance Boots, a British pharmacy-led 3 Saval Corp 3.8% in a series of multihealth and beauty group, signed an agreement to acquire 4 Abbott Corp* 3.8% billion dollar deals Farmacias Ahumada (FASA) Group. FASA is a publically5 Bayer 2.7% came in May with *Recalcine and Abbott consolidated listed pharmaceutical specialist in Latin America comprisyear, with the ac- IMS Data April 2014 ing of two retailers: Farmacias Benavides, based in Mexico quisition of CFR Pharmaceuticals by Abbott Laboratories. and Farmacias Ahumada, based in Chile. Together the reThe largest maker of heart stents and adult nutritional bevertailers operate over 1,400 stores, with combined revenues ages joined the wave of mergers and acquisitions with a USD of around USD 1.4 billion: the third largest retail phar2.9 billion agreement to acquire Chile’s biggest drugmaker. macy chain in Mexico with around 1,000 stores, and one Santiago-based CFR sells a range of products for women’s of the three largest retail pharmacy chains in Chile with health, heart and respiratory diseases in 15 markets across around 400 stores. Deutsche Pharma: partner of choice Deutsche Pharma stands out as one of the more interesting cases of a local success story. The company was established in 1992 and expanded internationally to Ecuador in 1995. Two years later, when the Chilean branch got acquired by Sanofi, Luis Aguilera, Deutsche Pharma’s general manager, continued leading the Luis Aguilera, general manager, company in Ecuador. In 2008 Ro- Deutsche Pharma emmers acquired the Ecuadorian based company and Aguilera decided to re-establish Deutsche Pharma in Chile. Today the company commercializes its own brands and acts as distributor, supplying the local market with a variety of products for paediatrics and dermatology. Focusing on high value products, Aguilera has found partnering to be an indispensible part of the company’s strategy. “There are segments of the market that have unmet needs and that is why we are constantly looking for partnerships that will add value to our portfolio,” he said. The company recently partnered with a New Zealand based company for the distribution of the very first bioequivalent isotretinoin, a medication primarily used to treat cystic acne. 1-1.pgs 07.23.2014 magenta cyan yellow 23:38 black S6 FOCUS REPORTS ADVANSTAR_PDF/X-1a aUGUSt 2014 CHILE AUGUST 2014 pharmaboardroom.com 14Special SponSored Section chile report Multi Latina Biosano, a 100 percent Chilean pharmaceutical manufacturer that specializes in injectables, is a good example of the many corporations that start in one Latin American country and spread throughout the region. “A company active in the Chilean pharmaceutical market has to reinvent its business model every three years because today we are competing against some of the largest multinationals,” says Maurizio Reginato, Commercial Director at Biosano. Biosano’s strategy is therefore to expand its services portfolio and to increase its export markets. The company currently exports to 13 Latin American countries and Biosano is already present with a direct office in Colombia. Additionally the company is in the process of opening offices in Peru and Ecuador. “Given our expertise in manufacturing products under inter- Latin America. The deal will more than double its branded generic drug business in Latin America and establish the company among the top 10 pharmaceutical companies in the region. a paRTicuLaR maRkeT Although Chile is a relatively small market, with only 17 million inhabitants, its geography makes it a challenging national standards, our current aim is to build a regional network with which we can expand our activities into the fast growing Latin American market,” explains Reginato. In order to expand its product portfolio the company is looking at biotechnological products. “We are in the process of concluding partnerships in order to launch biotechnological products into the market place,” Reginato adds. environment for logistics and distribution services. Chile stretches over 4,300 km along the southwest coast of South America, a distance roughly the same as that from San Francisco to New York. At the same time, its width never exceeds 240 km, making the country more than eighteen times longer than its widest point. It goes without saying that Chile’s harsh geography, typified by the Andes mountain range, is one of the major challenges for the distribution of drugs. 10 years serving pharmaceutical industry • Distinguished by a solid logistic service • Experience and expertise on the pharmaceutical industry • Strategic partners that add value to your business • Deliver high demanding solutions • ISO 9001:2008 certified www.perilogistics.cl Tel: 56 2 24807800 QP - Peri Logistics - Phex Chile_1-1.pgs 07.23.2014 magenta cyan yellow 23:37 black aUGUSt 2014 CHILE AUGUST 2014 O AD_1-1.pgs magenta 07.29.2014 00:19 cyan yellow black ADVANSTAR_PDF/X-1a QP - Heel - Phex Chile_ ADVANSTAR_PDF/X-1a FOCUS REPORTS S7 pharmaboardroom.com 15 Special SponSored Section chile report “Since 2007 we have been work“Reaching the outlying regions for ing with the Ministry of Health for private laboratories is very complicated the distribution of vaccines and one of to achieve,” says Edgardo Díaz Navarreour first customers was CENABAST,” te, director of CENABAST, the public Sánchez adds. purchasing entity and distributor for all Unlike large international logistics public hospitals and clinics, and Chile’s companies such as DHL and UPS, both of de facto largest purchaser. “We reach which are present in Chile, Peri Logistics the whole country, either through own only works with pharmaceuticals or supdistribution system or that of a logistics From left: Edgardo Díaz Navarrete, director, CENABAST; Raúl Sánchez, plements. One of Peri Logistics’ strengths operator,” says Navarrete. “We have general manager, Peri Logistics is its cold chain expertise. Peri Logistics managed to expand our reach by esrecently expanded its services to address tablishing great partnerships with third the need for specialized temperature-controlled ground transparties that allow us to conduct our services uninterrupted.” portation services. The company’s facility accommodates seven But this is not the only particularity of distribution in cold storage rooms, which allow them to successfully conduct Chile. “The Chilean market place is very particular,” exthe annual vaccination campaign. plains Raúl Sánchez, general manager of Peri Logistics. “For example, the pharmaceutical market is characterized by the vertical integration and dominance of three major pharmacy chains in the country, which control together 92 percent of the market. This is something you don’t see anywhere else in the world. And, international logistics providA company specialized in homeoers that decide to come to Chile must take such particularipathic treatments, Heel has had ties into account.” to develop an innovative market- The Overview effect ing strategy in order to compete with Western medicine in its chosen markets. Much of Heel’s success in the Chilean market can Eduardo Loyola, be attributed to Eduardo Loyola, general manager, who has been at the helm of Heel Heel’s Chilean affiliate for almost a decade, and has, through his innovative view of the market, helped homeopathic treatments be introduced alongside their better-established Western counterparts. “Generally, the person taking family decisions on medicine in Chile is the mother,” Lozoya explains. “As a result, we focused our marketing strategy on paediatrics, which is also one of the largest if not the largest group of doctors in Chile. From the doctors we learned that mothers were often looking at a less aggressive cure for their children’s illnesses. Doctors were not able to provide such an alternative. This was a huge opportunity,” he continues. “We educated paediatricians about our products and consequently reached the doctors.” “Since I was appointed, Heel Chile has grown at a rate of over 20 percent per year. I believe that when I joined Heel, only 30 doctors were involved in alternative therapy. Today there are 3,000 doctors involved and this number is increasing.” Lozoya compares his management technique to the Overview Effect, first described by author Frank White in 1987, an experience that transforms astronauts’ perspectives of the planet and mankind’s place upon it. _1-1.pgs 07.23.2014 magenta cyan yellow 23:37 black S8 FOCUS REPORTS ADVANSTAR_PDF/X-1a aUGUSt 2014 CHILE AUGUST 2014 16 Interview with: Ricardo Avila, Medical Director & Carlos Murillo Medina, Country Manager - Pfizer Chile Pfizer’s USD 21 million investment in Chilean biomedicine PharmaBoardroom: September last year Pfizer announced the opening of a USD 21 million precision medicine center of excellence in Chile. What is the importance of this center and how will it contributes to Pfizer’s commitment to Chile? CARLOS MURILLO MEDINA: This is definitely a big step for Pfizer, not only in Chile but worldwide. It is the first center of excellence that we are building in Chile and in Latin America. The investment is intended to enhance Pfizer’s precision medicine approach to help understand the underlying biology of disease and identify patients likely to benefit from a new drug. In the future, this approach could make it possible to precisely select disease targets and improve the safety and effectiveness of medical treatments in real-world practice. The center, located in Santiago, will coordinate with our precision medicine center in La Jolla, California, and where until now this type of research was conducted. In line with the goal of making Chile an innovation hub in the world, we are moving towards basic research with developed technology. The construction of this center of excellence will contribute to the consolidation of Chile and the region as a center of research in biomedicine for the rest of the world. We are confident that others will follow, and that our commitment and success will attract more investment and research programs in Chile and Latin America. We have chosen to build the center in Chile because of the country’s favourable R&D incentives. Moreover Chile is one of South America’s most stable and prosperous nations. RICARDO AVILA: In fact, we just came out of a meeting at the Camara de la Industria Farmaceutica de Chile, the chamber that groups the innovative pharmaceutical companies, where the members got together to listen to our plans. The feedback has been extremely positive and as a result we have received many inquiries about the newly build center. It seems that there is an increasing interest from the industr y to increase investment in the country. We expect to begin operations in 2014, and among our objectives is that our work will be in collaboration with Chilean universities and research centers with the goal of developing qualified and experienced human capital in R&D in the medium term. We are open to all sorts of collaboration and are currently in the process of building a network. What makes this project special is that we are partnering with the government to develop technology and research. The Chilean Economic Development Agency (CORFO) is inves ting USD 7 millio n in t he research center and it must be said that CORFO’s International R & D Centers of Excellence program has been fundamental in forging the path to make Chile a regional innovation hub. Ricardo Avila, MEDICAL DIRECTOR & CARLOS MURILLO MEDINA, COUNTRY MANAGER - PFIZER CHILE CHILE AUGUST 2014 17 Using the latest technology, the center of excellence for precision medicine, will focus on research for the treatment of cancer and to establish more accurate diagnoses. The center will be developing data that is going to allow the company to apply and use around the world. Pfizer Chile will therefore be increasingly important to our global operations and not only in terms of sales. PB: What is Chile’s potential to position itself as a biotech hub for Latin America? CARLOS MURILLO MEDINA: I believe that Pfizer has opened the door to this possibility and I expect the ecosystem to start flourishing soon. The country and therefore the pharmaceutical market are relatively small. But for us it is not about the size of the market. T he Chilean gover nme nt has approved incentives aimed at generating an environment more favourable for innovation. Together with Pfizer there have been a growing number of businesses in Chile pursuing innovative projects. We have started to recruit people and the level of talent in Chile that we have been able to find has been really interesting. Chileans are extremely professional and distinguished, and I think it is important to showcase these qualities and make use of this potential. I believe that Chile can contribute to the talent pool of Pfizer and the biotech area in general. PB: Pfizer’s previous Country Manager for Chile, Monica Zerpa, told us in 2010:” One of our biggest challenges in Chile involves the government´s dominant role in regulating the healthcare system”. “Because of budget constraints, the government favors lowcost generic medicines produced by loc al laboratories”. How has this evolved over the past four years? We expect to begin operations in 2014, and among our objectives is that our work will be in collaboration with Chilean universities and research centers with the goal of developing qualified and experienced human capital in R&D in the medium term. CARLOS MURILLO MEDINA: What you find in Chile is not different than any other market. On the one side there is the need to provide access and on the other to control costs. A logic consequence is that governments are moving to lower cost suppliers. This global trend drives the growth of the generic industry. Some however regard Chile as a contradiction. The countr y is one of Latin America´s fastest growing economies and has one of the highest GDP per capita in the region. Moreover looking at the macro statistics of health, Chile has one of the lowest infant mortality rates and has one of the highest life expectancy. In this regard the country is performing extremely well. A particularity for Chile is the reimbursement issue or access to high value therapies. Today the country has developed to a point where citizens are no longer satisfied with what they have. Chile has made tremendous progress over the last decade in terms of improving the quality of life of its citizens but at the same time cancer patients do not have access to the latest treatment. And patients who do are paying huge amounts of money out of pocket. This is a tipping point and the new government will need to work on this. There needs to be change in providing reimbursement and access to high value therapies to patients. CHILE AUGUST 2014 18 Interview with: Ciro Caravaggio, General Manager - Roche Chile Agility and flexibility the key to successful product launches PharmaBoardroom: How sensitive and reactive do you think are KOLs in Chile? What have you found is the recipe to “have their ears”? CIRO CARAVAGGIO: Stakeholders in the private system are very on top of the newest innovations and many of them are early adopters. Access to those drugs moves relatively quickly. Naturally we still need to conduct work to ensure the drug is on the formulary and insurers cover it but overall we see good results here. In the public system the healthcare professionals are also very open to educational events. The issue here is that very few high value high cost drugs are covered and therefore there is less value in educating on drugs they cannot use. PB: How is this reality reflected in the way you conduc t produc t launches or organize your sales force? CIRO CARAVAGGIO: Depending on the drug, sometimes we have distinct efforts in the private and public sectors. A great example of this is our HER2 franchise. We have a robust portfolio that includes Herceptin and Roche’s new subcutaneous (SC) formulation of Herceptin. This SC form reduces the time breast cancer patients spend receiving treatment, can free up healthcare provider time and helps improve health centre efficiency. In fact we were the first country for Roche to launch this SC form of Herceptin, which is important for Chile. In the public system the country has access issues in terms of chemo chair Ciro Caravaggio, GENERAL MANAGER - ROCHE CHILE CHILE AUGUST 2014 capacity. If we can free up capacity by giving SC treatment it is a huge benefit for the hospitals and improves the quality of life for patients. Additionally, we have Roche’s new HER2 products, Perjeta and Kadcyla. Perjeta is used before surgery in people with HER2-positive early stage breast cancer and Kadcyla a drug for advanced HER2-positive breast cancer. Because both drugs are not reimbursed in the public sector we have a medical sales representative focusing on those specific drugs in the private system. In the public sector other representatives are working with Herceptin, which recently received financial coverage. Their focus is on education around the drug in order for the patient to get the most benefit and value out of the drug and in addition provide access to the SC form of Herceptin. PB: How has Roche been performing since you arrived three years ago and what has been your main challenge? CIRO CARAVAGGIO: We naturally get directions from our global headquarters to excel and do our best in every area. However, for a small country such as Chile we have to prioritize. Our focus has therefore been getting our high value drugs such as Herceptin reimbursed in the public system which serves 80% of Chileans. Because we had success in getting some of our products reimbursed in the public system, we have grown tremendously over the last three years. Personally, one of our main challenges has been developing trust and 19 credibility internally. Initially I sensed a real distance between senior management and the people. That is why listening and following up on commitments is important. Moreover it was critical to get out there with the medical sales representatives to understand the different perspectives and see what we were doing well and where we could improve. Conducting clinical trials in Chile can be expensive, the process can be slow, and requires significant approval hurdles. Furthermore, many don’t see the value the trials can bring to a hospital or a patient. PB: Roche ranks between the 3rd and the 5th largest company per sales in the World, yet in Chile you are still far behind this figure (15th). This is of course not a “race”, but still, do you believe that this reflects where Roche should be, or is there room for performing and ranking better in Chile? CIRO CARAVAGGIO: First of all, this figure, captured by IMS Health, is based on retail sales in Chile. As Roche is a biotechnology company only a small percentage of our sales derive from retail. When I look at our overall position in the Chilean market we are in a good position, ranking among the top three multinational pharmaceutical companies in Chile. For oncology, our key business, we are the market leader. In terms of growth, we exceeded the growth rate of the Chilean market both in 2012 and 2013 and we expect to exceed market growth in 2014. The key to success lies in identifying the areas where our efforts will have success. With that said, you may have a very good product but you also need the right people in the organization. Even an outstanding product can flop if you don’t have good people. Therefore, I want people working for Roche to understand that they as an individual can make a difference in patient treatment, access, and helping the medical community get the best benefit out of our drugs. This has been a challenge, but I believe today we have people with the right mindset in the right places within our organization. PB: Roche has a long history of conducting Clinical trials in Chile. Some are saying that this is often a way to “wage off” criticism that foreign companies are not doing real investment in the country. How do you react to this? Why is it so important and how active have you been on that front? CIRO CARAVAGGIO: As you mentioned Roche has been very active in clinical trials in Chile. We have 19 on-going trials in 10 different disease stages and we are eager to conduct more in the future. Conducting clinical trials in Chile can be expensive, the process can be slow, and requires significant approval hurdles. Furthermore, many don’t see the value the trials can bring to a hospital or a patient. For a major oncology hospital, clinical research is an integral part of care and not an afterthought; it is critical! So many patients are at the end of their treatment and want new hope. We would love to do more and we believe conducting clinical trials is a significant investment we make in the country. In addition, we invest in education, fellowships, screening programs, diagnostic infrastructure and in patient support programs. Moreover we do a lot to ensure drug access with differential pricing. I believe we do more than national firms in this regard. CHILE AUGUST 2014 20 Interview with: Gerardo Sanchez, General Manager - Nutrapharm Building a network for natural products PharmaBoardroom: Could you start by giving an introduction to Nutrapharm and explain why the company is interesting for the market? GERARDO SANCHEZ: Nutrapharm has been established in 2008 in response to the worldwide tendency to opt for natural products without toxins and harmful elements that contribute to people’s better health. At the time many supplement manufacturers were exploiting the low standards for safety and efficacy for natural health products and supplements. I saw an opportunity here to create a company offering natural food supplements with scientific back up. Nutrapharm’s products improve the quality of life of people through healthy products, with strong scientific and clinical support. Our excellence products help in the treatment of some diseases and, more importantly, to the prevention of others and to improve, in an effective and safe way, the population’s life quality. Our products are 100 per cent natural and contain either by nature or by later development an ingredient or a set of ingredients which, in a specific concentration and with the recommended consumption frequency, show in studies to reduce the risk of getting chronic degenerative diseases or to improve people’s general state of health. Chile witnessed increasing demand for vitamin and dietary supplements as a result of improvement of disposable incomes and living standards. Chilean consumers are more willing to spend their money on vitamins and Gerardo Sanchez, GENERAL MANAGER - NUTRAPHARM CHILE AUGUST 2014 dietary supplements because they are more aware of the preventive qualities of these products. Our products are used and recommended by doctors of different specialties. We are currently in the process of registering our products in Latin American countries according to the requirements of the country. And, this year we are completing the registration process. The first country we will export to is Uruguay. We have concluded the relevant contracts and have already received the first order. Other countries we are looking at are Peru, Colombia, Mexico and Ecuador PB: What could you tell us about the regulatory environment for supplements? GERARDO SANCHEZ: Within Latin America, food supplements are subject to diverse regulations. One of the main challenges is the categorization of supplements fall under either the food or the medicine umbrella. In Chile, food and health supplements fall within the food category. A number of food supplements have clinical studies showing various health claims but are not regulated separately. And, because there is no control of these supplements, some companies with so-called “miracle products” do not meet quality standards and are a detriment to those producers who sell supplements with scientific backing. Furthermore consumers are limited in their options to access many quality products that are available in most developed countries. 21 I have always guided the company believing in assuring the highest quality standards for our products and this is illustrated by the fact that we have the only plant for food supplements that is GMP certified. Moreover our quality control laboratory is certified as an external pharmaceutical laboratory; our facilities cover all the requirements for a pharmaceutical laboratory. Nutrapharm’s healthy products and functional foods are prepared with the latest technology. Nevertheless, our products are still labelled as food supplements. And this, I would like to see changed: to create a category in order to properly regulate products that benefit people’s health. To achieve this, I have recently brought this matter under the attention of the N a t i o n a l P h a r m a c e u t i c a l A g e n c y, ANAMED, which is charged with the registration and regulation of pharmaceutical products. Furthermore, I am the President of ALIMSA, the Association of Producers and Importers of Food and Health Supplements. As ALIMSA we have held a series of meetings with the Public Health Institute (ISP), the Chilean Medical Association and the Health Commission to bring this under the attention and emphasize the urgency to regulate the food supplement segment. PB: How could you describe the network of natural products here in Chile? GERARDO SANCHEZ: The Chilean market is characterized by the vertical integration and dominance of three major pharmacy chains and four supermarket chains in the country. Since one and a half year ago, supermarkets have started selling natural health products and supplements. Since then supermarkets have significantly increased their share in the sector but is still very young. Another sales channel is the independent pharmacies. However this is a challenging market for us. Firstly because of the logistics; covering the remote areas where the pharmacies are located. And, secondly payments from the independent pharmacies can take up a long time. Delay of payment is of course a difficult situation for a young company. PB: What is your strategy to demonstrate the importance of your products? GERARDO SANCHEZ: In terms of education we are focussing on three groups: physicians, pharmacies and the end-consumer. For every group, we use different approaches toward education and sales. We use a tool called: Publi Reportage, an infomercial. The infomercial is a newspaper article that aims to show the relevant aspects of our products. In addition we are currently in the process of launching a television commercial to bring our products under the attention of the end consumer. My ambition is to grow awareness for the food and health supplements together with the ALIMSA members. Our products are beneficial for overall health and, more importantly, to the prevent people from getting sick. To this end I believe it is imperative to work with the authorities to train people about our products to follow healthy lifestyle habits. Overall we see health awareness rise and perception increase that our products help improve the health and the body’s defence mechanisms in a safe way. On an international scale food and health supplements grow on a double digit rate, which is faster than the prescription drugs segment. Therefore we expect this area to grow significantly in Chile too. CHILE AUGUST 2014 22 Interview with: Gonzalo Valdebenito, Country Manager - Medtronic Chile Bringing Medtronic to Chile PharmaBoardroom: Could you please begin with a brief overview of this affiliate with some of the recent key achievements? GONZALO VALDEBENITO: Medtronic has been present as a direct operation in Chile since October 2013 and the commercial office currently employs 35 employees. We decided to set up offices in order to optimize our products and services offering to patients and physicians in the country. To achieve this, we concluded termination agreements with our former distributors with the objective to enhance our presence in some of our key therapeutic focus areas. Medtronic is the world’s largest medical technology company, offering an unprecedented breadth and depth of innovative therapies and we therefore focus on training and educating Chilean physicians and patients to help them understand the technologies that we have available. We are closely collaborating with physicians in order to develop products and services to fulfil their needs. We are focusing on strengthening the company’s pillars, building an efficient business model and investing in key support functions such as educators and clinical specialists. In Chile we are making sure that Medtronic’s strategy is properly executed by bringing our global expertise to the local market. With a global reach that extends to more than 140 countries, we have a deep understanding of many universal healthcare challenges that we translate into the Chilean market. PB: Medtronic was founded in 1949 in Minneapolis, United States and has been present in Latin America for a Gonzalo Valdebenito, COUNTRY MANAGER - MEDTRONIC CHILE CHILE AUGUST 2014 long time. Why did it take Medtronic so long to open offices in Chile? GONZALO VALDEBENITO: Our business model via distributors in Chile has been successful for many years; these local partners contributed to develop the market and build adoption of our therapies. As a leadership team, we are constantly evaluating and looking for ways to do business more effectively and expand access to our products and services. Chile is a stable country with a solid economy, a clear institutional framework and wellrespected democratic institutions. And, considering the country’s overall economic growth we see an increase in healthcare spending. These are all good reasons to open local offices. Moreover the country has welldeveloped hospitals and excellent doctors, which means that medical professionals in the country see the advantage and usefulness of our high-tech medical devices and want to partner with us directly to offer them to their patients. Furthermore there have been notable changes in the market. There have been positive changes on the reimbursement side. In the field of pacemakers we initially did not receive reimbursement while today it is a standard of care both in the public and private sector. Additionally we are supporting physicians by providing data to the authorities with the goal to obtain reimbursement for other innovative products. Again, we have the best technology available in the world but without reimbursement our products are not accessible for every patient who needs it. In the end what matters is that patients get quick access to our technologies. 23 To take our diabetes division as an example: our insulin pump, with a fine catheter delivers the exact amount of insulin required and significantly contributes to the quality of life of people living with diabetes. For this product we are currently working together with the relevant stakeholders in order to obtain reimbursement. PB: As a high technology medical device company, how do you assess the quality of healthcare in Chile – and what could be done to improve it? GONZALO VALDEBENITO: I see room for improvement in two areas: the first is a move towards effective universal coverage and the second is training and education for physicians and patients. This is also our responsibility as industry partner. In Chile, there are a number of therapies that are still underdeveloped and this is where we need to provide solutions to help patients. With regard to the healthcare system we do see improvement on the reimbursement side of new therapies. We believe that in a way, the government and relevant institutions need more clinical and economic studies to better understand our therapies and how to apply these in the private as well as public sector. Sometimes the cost of the device looks like a barrier. It is important to look at benefits in the long term such as reduction in hospitalization costs and length of stay. The implantable defibrillator is a good example. Initial costs look more expensive than to treat a patient with pills for congestive heart failure. However, over the long term, the defibrillator will prevent the patient from visiting the hospital for the treatment of fluid in the lungs, swelling, renal failure or other complications. Our device, which is implanted, can alert the physician if there is a fluid build-up in the lungs. The physicians can intervere much faster and not wait to subsequently treat these complications. That being said, it is a challenge and our responsibility to influence decision makers, to make them look at the long term and adopt a long term cost benefit approach to treatments. PB: Mr. Valdebenito, Medtronic opened its office in Chile eight months ago and you were appointed Country Manager. What made you the right man for the job? GONZALO VALDEBENITO: Prior to this position I worked seven years for one of Medtronic distributors. I have therefore gained significant experience working as a partner with Medtronic. Medtronic is the company with the broadest and most innovative product portfolio in the industry and due to my previous experience I learned about the tremendous solutions the company offers to the public and private sector in Chile. At Medtronic, we seek to deliver truly innovative and life-changing devices for our patients, in order to improve lives worldwide. There are still a lot of patients who need our products and do not have access to them. Our greatest goal is help people, and whether we are a young or an established organization, this ambition does not change. I am extremely motivated to continue to build what we have started here. CHILE AUGUST 2014 24 Interview with: João Simões, head of integration - Grunenthal Chile Grünenthal on how to blend the cultures of two family companies PharmaBoardroom: The big news for Grünenthal not only in Chile but in the whole of Latam is of course the acquisition of Andrómaco. Why did this fit so well in Grünenthal’s strategy to multiply its Latam revenue by two? JOÃO SIMÕES: Prior to the acquisition we were looking at companies present in the fastest growing markets in the region and having the right critical mass. Companies with a robust commercial presence, generating sales through medical prescription, and not by pushing their products through the channel. These conditions eliminated quite some players on the market and eventually led us to Andrómaco. Furthermore Andrómaco had a strong presence in therapeutic areas like gynecology and Neuropsychiatry (CNS), areas which Grünenthal aims to strengthen. Andrómaco was present in markets where we were strong already and thus becoming an even bigger player. PB: You were appointed leader for Grünenthal Chile, right after the friendly IPO was successfully concluded in order to conduct the acquisition process. Until today how far has the integration process evolved? JOÃO SIMÕES: We have prepared the integration process well in advance. The first moment we started the negotiations for the acquisition we immediately internally began the process. As a result we had a well-structured process once the acquisition materialized. Currently and with our new colleagues at Andrómaco we are taking the time to validate the process we have defined and João Simões, HEAD OF INTEGRATION - GRUNENTHAL CHILE CHILE AUGUST 2014 are aligning our goals. Subsequently we will start implementing changes. It is imperative that we are taking the right decisions and therefore take our time. Our aim is to merge the best of both worlds, not imposing the Grünenthal way of working over what we have acquired. PB: In M&A, one of the toughest thing is “cultural” integration. Both Andrómaco and Grünenthal have a very strong corporate identity, with long family history. How difficult is it to “blend” the two cultures? JOÃO SIMÕES: From an outsiders perspective the two cultures could look very far apart. However in reality the companies are not so different and the things that we have in common should be the pillars of the new culture we are building. Currently we are taking our time to better understand the culture in detail. Naturally people are the most important element in an acquisition. Since the acquisition we have treated people with transparency. Each and every one is fully informed about the steps we are taking. We are not imposing change, we have the people be part of the change. PB: How far will the integration go, and what should be the impact in terms of development strategy and positioning for both companies? JOÃO SIMÕES: There is space for all the businesses we have today. We are currently assessing the attractiveness of all businesses in order to decide where the focus will be. As Grünenthal, we do not want to destroy the important assets that we have acquired. We will understand first subse- 25 quently decide what is best for the future organization that we are building. PB: Besides the immediate registered growth in revenue and market share Grunenthal will make in many Latam countries, what else do you think can be learned by the company from this acquisition? JOÃO SIMÕES: More important than what we can learn is what can we leverage? Andrómaco’s way of doing business has been fundamentally different than Grünenthal but at the same time extremely successful. We are learning about Andrómaco’s way of doing business and determine how we can leverage portfolio, business model and structures of people. PB: In Chile, through this acquisition, Grünenthal gets propelled from being a midsize/mid-market company, to one of the top four, which is probably a unique case for Grünenthal anywhere in the world. How is this “changing the deal from a manager’s point of view”? Do you think this comes with special responsibilities? JOÃO SIMÕES: It is not about imposing Grünenthal into Andrómaco. We need to evaluate what is best for both businesses. If we have portfolio, which is valuable and adapted to the needs of the patients we will take it. Again, we are taking best of both worlds no matter what side it comes from. That means we have to adapt the new company to the new responsibility. As a German company our processes are extremely structured. We are following each step in order to make the right decision. PB: Can you give us a brief overview of Chile’s importance and contribution to Grünenthal’s target of USD 450 million revenue in Latin America? JOÃO SIMÕES: Speaking about the Latin American revenues Chile accounts for approximately a third. In terms of operations outside Chile, Grünenthal has a higher critical mass than Andrómaco, whereas in Chile it is the other way With our new colleagues at Andrómaco we are taking the time to validate the process we have defined and are aligning our goals. Subsequently we will start implementing changes. It is imperative that we are taking the right decisions. around. As Andrómaco was born in Chile the company had a bigger presence in this country than in any other Latin American country. The acquisition has allowed us to be a relevant player in the Chilean market and shape the environment. Grünenthal’s objective is to become the most patient-centric company and we take that very seriously. PB: Where would you like to take the organization in the next three years? JOÃO SIMÕES: We have an ambition to become a key player in the Chilean market. Our strategy, which we are currently defining, will be based on growth. We do not merely aim to become a key player in terms of numbers but also in the healthcare market. As Grünenthal we are committed to the country and collaborate with the different stakeholders including authorities, doctors and patients. Grünenthal’s international objective is to expand in the emerging Latin American market, which has included the acquisition of Andrómaco. Due to this acquisition we acquired the best regional company that has complemented our own business and our therapeutic areas within the countries of the South and Central America. The acquisition was the right step to leverage our presence in the Latin American market. But if we want to become a big player in the region we will have to grow in Mexico and Brazil. Today we are present in these markets and aim to grow the organization significantly in order to become a major geographic player in Latin America. CHILE AUGUST 2014 26 Interview with: Matias Vial, Executive Vice President - Cells for Cells Leading Chile’s biotech wave PharmaBoardroom: Could you start by giving an introduction to Cells for Cells? MATIAS VIAL: The company is a spinoff of the University of the Andes, and seeks to innovate in basic research on stem cells, as a way to lead to new therapies that address highly prevalent degenerative diseases. We also aim to provide effective and proven treatments for patients Chilean and Latin American through clinical trials in hospitals and health centers that have the necessary infrastructure. Our strategy is to move along with clinical studies, focusing on phase 1 and phase 2 studies. Located at the University of the Andes, Cells for Cells has advanced GMP facilities and modern and functional infrastructure that has been built to meet the highest quality standards to ensure the process of research and development of innovative and reliable cell therapies. Currently we are in the process of building our second GMP Lab within the Universidad de los Andes Hospital. From there we will be able to take studies to proof of concept, and produce therapies with the aim to bring to the market. Cells for Cells is the first biotech company in Chile with such value proposition. Chile has taken significant steps to incorporate biotechnology into its economy. Through a series of powerful initiatives, including a new regulatory framework and economic incentives, it seeks to develop a world-class biotechnology sector. The company has opened the door to a new industry in Chile with the goal to be competitive on an international level. Matias Vial, EXECUTIVE VICE PRESIDENT CHILE AUGUST 2014 - CELLS FOR CELLS In order to illustrate our international ambitions we have named the company Cells for Cells instead of “Células para las Células” in Spanish; we are thinking worldwide. We are pleased with the appointment of our Chief Scientific Officer who has prior experience at the Singapore-MIT Alliance (SMART) Labs in Singapore. SMART is a major research enterprise established by the Massachusetts Institute of Technology (MIT) in par tnership with the National Research Foundation of Singapore (NRF) in 2007. His appointment has led the way for a cadre of top notch researchers to join this initiative in Chile. PB: What does Chile has to offer for a company such as Cells for Cells? MATIAS VIAL: In a world of constant change, Chile is a beacon of economic and institutional stability. In international comparisons of competitiveness and economic freedom, Chile is at the forefront of South America, and despite its emerging status, it´s in a very good competitive position. I was in Spain earlier this month and I realized that Chile has huge credibility abroad. In the last few years, Chile has emerged as a pole of innovation that is spoken about throughout the world. Our research aims to move “from bench to bedside” or from laboratory experiments through clinical trials to point-of-care patient applications. When I am speaking about the term, “bench to bedside” I refer to the concept of translational medical research. This concept aims to “translate” findings in basic research into medical practice and meaningful health outcomes. In order to achieve this we have 27 established partnerships with Chilean hospitals and research centers abroad. Chile provides the opportunity to reach patients faster and cheaper compared to developed markets. PB: We hear substantial hurdles on way to further growth for biotech companies, among others lack of capital. For you, what have been the challenges in raising capital? MATIAS VIAL: We have been extremely fortunate with three private investors who founded Cells for Cells three years ago. The company started with USD 3 million in private equity, and 3 years after we received another USD 10 million from the same investors. In addition we have obtained USD 2 million from CORFO and Conicyt, a Chilean governmental organization overseeing a variety of programs aimed at generating the economic development of Chile. Chile’s biotechnology sector is very young and as a result lacks a platform, framework or policy. For that reason we applied for another CORFO funding, with the objective to create a platform for open innovation to scale clinical, technical, commercial and regulatory part. Together with Clinica Davila, the largest private clinic in Chile, we obtained through competitive funding by CORFO USD 10 million for a period of 10 years to create a new company, REGENERO, that will be focused in the develop of allogenic stem cells therapies (lupus, diabetes, skin ulcers and chronic renal failure) Together with the University of the Andes, the public and the private sector Cells for Cells is forming a new cluster for stem cells. And, as a result the Ministry of Education awarded us a grant for USD 10 million six months ago. In total we have therefore received more than USD 40 million in grants and private funding for stem cell therapies. Chile has taken significant steps to incorporate biotechnology into its economy. Through a series of powerful initiatives, including a new regulatory framework and economic incentives, it seeks to develop a world-class biotechnology sector. Cells for Cells has obtained more than 15 projects in the sphere of stem cell therapy and we expect to have more than 100 people working here. Having that said, this will be an important hub for biotechnology in Chile. PB: How do you rate the commitment of the Chilean government of fostering the right environment for the biotech industry? MATIAS VIAL: The country remains overwhelmingly reliant on copper and therefore highly vulnerable to fluctuating commodity prices. As a result, the outlook has encouraged Chile to diversify its mining based economy. And biotechnology is a great opportunity. To bring our work under the attention of the government I believe that it is necessary to demonstrate quick success; that as an industry we are building something substantial. It would be a major achievement if we could cure a patient disease with Chilean technology. As Cells for Cells we have invited government officials at our facilities in order to show the potential we have here. Furthermore we have managed to attract USD 40 million in funding and several great researchers; showcasing our progress. CHILE AUGUST 2014 28 Interview with: Raúl Sánchez R., General Manager - Peri Logistics Chile’s geography proves challenging for logistics companies PharmaBoardroom: What have been the main milestones of the company? RAÚL SÁNCHEZ R.: Peri Logistics was established in 2004. At the end of that same year we completed the construction of our facility and were fully operational. 2009: We added a new area of the facility, adding a 100% more capacity for storage. 2013: ISO 9001:2008. According to current Chilean legislation, logistic providers are categorized as “droguerías”, which are not allowed to have Good manufacturing practices (GMP) cer tification. In this regard, we obtained the ISO 9001:2008, an international standard related to quality management system, applicable to any organization from all types of business sectors and activities. This has allowed us to be the only pharmaceutical logistics operator with such accreditation in Chile. It is a guarantee of quality for our prestigious clients. However according to the new medicine law droguerias will be controlled by ANAMED, the national pharmaceutical agenc y, which might change the status of logistic providers. In that case, Peri Logistics will opt for GMP certification because we believe this serves as a warranty to existing and potential customers. Furthermore, Peri Logistics already works according such high standards. PB: What would you say is Peri Logistics comparative advantage versus large global logistics providers such Raúl Sánchez R., GENERAL MANAGER - PERI LOGISTICS CHILE AUGUST 2014 as DHL or UPS that are heavily investing in the country? RAÚL SÁNCHEZ R.: One of the main features that distinguish Peri Logistics as a pharmaceutical logistics operator is our flexibility. Peri Logistics has the ability to adapt to the needs and requirements of its customers. And, opposed to large international logistics companies such as DHL and UPS, Peri Logistics only works with pharmaceuticals or supplements; we are a specialized company. Moreover we are an independent logistics provider, not involved in any other activities. Additionally the Chilean market place is very particular. For example the pharmaceutical market is characterized by the vertical integration and dominance of three major pharmacy chains in the country, which control together 92 per cent of the market. This is something you don’t see anywhere else in the world. And, international logistic providers that decide to come to Chile must take such particularities into account. One of Peri Logistics’ strengths is its cold chain expertise. Since 2007 we are working with the Ministry of Health for the distribution of vaccines and one of our first customers was CENABAST, the public purchasing entity and distributor for all public hospitals and clinics; the pharmaceutical industry’s de facto biggest purchaser. Peri Logistics’ facility accommodates seven cold storage rooms, which allow us to successfully conduct the annual vaccination campaign. 29 PB: You conducted two studies for temperature with prestigious national institutions. What could you tell us about these studies and who are the partners you are working with? RAÚL SÁNCHEZ R.: We worked together with IDIEM, a division of the University of Chile. They conducted a study in regards to temperature fluctuations inside our storage facility. On the basis of this study we took action to lower the temperature in our facility. We conducted a second study in order to further lower the temperature focusing on natural solutions; no air-conditioning. The collaboration with the university has been a major success. The scientists groups have visited us several times in order to control the temperature systems that we have installed after the studies, and today our storage facility maintains an appropriate level of temperature throughout the year; day and night. PB: Usually the key to success for logistic providers is in their excellent customer relationship management. How would you characterize your CRM efforts? RAÚL SÁNCHEZ R.: Our comparative advantage is the excellence of our service and the fact that we are able to provide fully integrated solutions to our clients. Due to our vast expertise and our extensive network, Peri Logistics has the ability to adapt to the demands of all our different clients and to address their needs directly. Along with the high level of service standards that we deliver, we have very positive relationships with all of our clients and this is something that we take pride in. We don’t look at our customer relation as consumer / provider; Peri Logistics positions itself as a partner to all its clients. Our clients feel secure with our operations. The fact that the General Managers we work with do not have to pick up the phone is a sign that the process is running smoothly and we are doing a good job. Our clients focus is to generate sales through the sales of their products and we contribute to this objective by providing the logistics. PB: How are you targeting international clients that wish to find a logistics provider in Chile that can help in the commercialization of their products? RAÚL SÁNCHEZ R.: The pharmaceutical industry in Chile is very small. Generally customers that knock on our door heard of us through word of mouth. The beginning however was not easy. Potential customers admired our facility but getting our firsts customer took a while. The companies that we were in contact with asked us for references and as long as we could not provide these they were not willing to take the risk. Today however we work with the largest pharmaceutical companies operating on the Chilean market. Our focus is on high cost medicines, from biotechnological companies. These products arrive in little quantities but need to be handled specifically. PB: You are celebrating Peri Logistic’s 10th year anniversary this year. What would you like to achieve in five years from now? RAÚL SÁNCHEZ R.: I believe that Peri Logistics has positioned itself as a recognized player in the Chilean pharmaceutical market. In the next five years I aim to strengthen our position in the market. To achieve this we are expanding our services portfolio to our customers. In addition we aim to be recognized more as a partner than a provider to our clients. And, offering more services than we are now will contribute to us being a partner of choice. CHILE AUGUST 2014 30 Interview with: Paula Ithurbisquy, General Manager - Clinica Alemana German hospital at the forefront of private medicine in Chile PharmaBoardroom: As an introduction, could you introduce Clinica Alemana to our readers? PAULA ITHURBISQUY: Clínica Alemana is affiliated with the German-Chilean Beneficence Corporation, a nonprofit foundation established in 1905. The German community in Chile opened its first hospital in 1918, located in the Independencia area in Santiago. The building was sold to the Bank’s Pension Fund 1970.In March 1973 the current Clinica Alemana opened, located where it is today. In the following years the clinic established itself as one of the first private health facilities in the country. Chile’s health-care sec tor was opened up to the forces of the market by a new law in 1981 that allowed private insurance companies, called Isapres, (Instituciones de Salud Previsional) to compete for business. Prior to that, all Chileans were obliged to pay 4% of their income into the state-run Fondo Nacional de Salud (FONASA). The new law gave people, who could pay more, a greater choice and access to better services. This development has helped to open up the private health sector in Chile. Since then, Clinica Alemana has been a leader in the field of private health care, pursuing and ongoing medical development as its main priority. Our outstanding professionals and infrastructure make it happen. Our programs and services are designed to enable the medical community, patients and their families to take greatest Paula Ithurbisquy, GENERAL MANAGER - CLINICA ALEMANA CHILE AUGUST 2014 advantage of our wide range of health care options. Clinica Alemana’s principal strengths are Preventive Medicine, High Complexity Medicine, Emergency Department and Intensive Care Units. Today we have 4,000 people working for Clinica Alemana! Also, we have a partnership agreement with Universidad del Desarrollo. In early 2002 the Faculty of Medicine was created as a result of the partnership between the University and Clinica Alemana. PB: To which extent is Clinica Alemana a benchmark for other Chilean clinics / hospitals to aspire to? PAULA ITHURBISQUY: Today Clínica Alemana is recognized as one of the best and most advanced hospitals in Latin America. The clinic has transformed itself as a reference for the industry. Clinica Alemana has been able to provide the latest in health care technology and continuously expanded its services. I took over the helm of the clinic in 2012, with the ambition to continue leading the private industry. Our daily activities are always focused on our patients. Clinica Alemana’s objective is to be the most patient-centric clinic and we take that very seriously. Therefore, we constantly strive to provide the most modern technology, the best infrastructure and, above all, the highest-qualified and most caring professionals in order to satisfy all our patients’ healthcare needs. Our aim is to excel in the provi- 31 sion of these services, especially because we are aware that the people we care for are usually going through difficult moments in their lives. Naturally every hospital can purchase the latest technology, attract the best doctors and build facilities. But what sets Clinica Alemana is the patient experience. We have created an atmosphere where patients feel at home, feel loved and receive the attention they deserve. PB: How do you evaluate the level of patient care? PAULA ITHURBISQUY: In fact, this year, Clínica Alemana ranked first in a study, known as the Praxis Xperience Index (PXI). The Praxis consulting company recently launched a survey to measure how customers view their experiences with the most important Chilean brands. The investigation included 98 brands and 25 industries in various sectors, such as retail, health, financial services, home services, public transportation and telco (cable TV, mobile phones, triple pack), among others. One of the reasons that Clinica Alemana has been recognized as the best and most advanced hospital in Chile is because we are a branch of the German-Chilean Beneficence Corporation, a non-profit foundation. We have therefore been able to execute a longstanding policy of profit reinvestment. In addition we have a longterm view on our strategy in order to be prepared for the next century. PB: Clinica Alemana has been ranked second best for many years. Due to its reputation the clinic receives patients from all over the continent. Would you outline what programs you have developed to reach out to international patients? PAULA ITHURBISQUY: Clínica Alemana has the strongest program in Chile to reach international patients. Our service is called International Patient Service. This program makes it easy for international patients to make appointments with physicians, to seek a medical second opinion or treatment for a complex illness if it is needed. Our International Patient Coordinator manages the following medical and personal needs prior to your arrival, during your stay and after returning home. We are receiving many Bolivian and Peruvian patients, who visit us for complex surgeries. I expect significant growth in this area. PB: How does Clinica Alemana attract and retain the best talent available? PAULA ITHURBISQUY: Medical schools in Chile deliver very good doctors. Looking at Clinica Alemana, we are a prime location for medical graduates given our high level medical facilities and equipment and our overall reputation. Therefore we are able to attract the best medical personnel. Of our consultants many trained and worked abroad. Our doctors have the opportunity to work and train at our partner hospitals around the world. For example, if we purchase the latest technology in urology we send urologist abroad to train and get familiar with the equipment. When the urologist comes back to Clinica Alemana, he transfers the knowledge to our specialists. For example, MD Anderson, part of the University of Texas is our sister institution. Since 2003 when our agreement was signed, MD Anderson have continued to collaborate with Clinica Alemana in the departments of Urology, Genitourinary Medical Oncology and Radiation Oncology regarding novel treatments and technologies used in the fields of prostate, renal, bladder and testicular cancers. The standard of care received by a patient at Clínica Alemana is the same as you will receive in Western Europe and the US. CHILE AUGUST 2014 32 Universidad de los Andes’ first scientific spin-off Cells for Cells Cells for Cells (C4C) is a Chilean biotech Company devoted to the research and development of novel therapies based on adult stem cells. Established in 2010 as the first biotech spin-off of Universidad de los Andes, C4C is part of the regenerative medicine’s cluster that the University is building with local and international scientific and commercial partners, plus the combined financial support of private and public sectors. Within 3 years, this cluster has raised 42 USD million for R&D for the coming 10 years. The final goal is the launching of innovative solutions, therapies, services or devices to cover unsolved degenerative diseases. Matias Vial, Director of R&D and Innovation at Universidad de los Andes and Cells for Cells’ Vice President, explains that the company’s fingerprint is to do research “from bench to bedside”, which is so called translational medicine. “To reach this objective we are building collaboration alliances with local hospitals and clinicians in order to perform international-standard clinical CHILE AUGUST 2014 studies, which is still a sub-regulated area in Chile.” With two international patent applications, a pioneer research line at C4C uses menstrual fluid as a novel and minimum-invasive source of stem cells. Menstrual stem cells (MenSC) have demonstrated to have unique properties, which can induce therapeutic benefits for target diseases or indications. Maroun Khoury, C4C’s Chief Scientific Officer explains that MenSC are being studied at their lab in health indications such as cancer, inflammatory diseases and tissue regeneration, with the aim to develop early-stage and cuttingedge proprietary technologies. Other C4C’s ongoing projects involve the licensing of proven outsider’s technologies with minimal internal improvements, as a way to speed-up the innovation process to bring health solutions into the Chilean society. This is the case for cornea regeneration using limbo-corneal cells, a licensed technology, which will allow bringing to Chile a world-class, safe and efficacy therapy. 33 For exclusive interviews and more insights, log on to pharmaboardroom.com CHILE AUGUST 2014 34 Company index Abbott Laboratories .................................. 13 IMS Health.................................................... 9 Alliance Boots ........................................... 13 Janssen......................................................... 9 ANAMED.................................................... 10 Medtronic............................................... 22, 23 B Braun........................................................ 12 Biosano ...................................................... 14 Ministry of Health..................................... 8,9, MSD..........................................................9, 10 Cells for Cells...................................26, 27, 32 Nutra Pharm .......................................... 20, 21 CENABAST................................................ 15 Pan American Health Organization.......... 10 Chamber of the Pharmaceutical Industry in Chile (CIF)................................................9, 12 Peri Logistics.....................................15, 28,29 Chilean Economic Development Agency Pfizer........................................... 10, 11, 16, 17 (CORFO)..................................................... 10 Clinica Alemana..................................... 30, 31 Deutsche Pharma....................................... 13 Public Health Institute................................ 9 Roche........................................... 11, 12, 18, 19 DHL.............................................................. 15 Tecnofarma.................................................. 11 Grünenthal........................................12, 24, 25 UPS.............................................................. 15 Heel.............................................................. 15 World Trade Organization.............................9 CHILE AUGUST 2014 35 CHILE AUGUST 2014