The pharmaceutical industry in Paraguay is developing rapidly, with key players investing to grow both in the country and regionally in Latin America. A clear example is the Scavone group, which boasts a highly diversified industrial capacity. Pharmabiz paid a visit.
Here in Argentina, the national pharmaceutical industry has historically stood out in the region for its robust structure and productive framework. That’s sometimes led the local sector to disregard the solidity of the industry in neighbouring markets that pack a lower quantitative weight.
However, Paraguay is increasingly standing out. This can be seen in the number of Argentine executives who have emigrated to their northern neighbour, drawn by more stable macroeconomics and competitive wages to cover certain areas of management areas for drugmakers who are seeking to expand their geographic scope and compete with their Southern Cone peers.
Amid this scenario, the Scavone group is growing. Led by the family of the same name, it’s a major player in the pharmaceutical industry locally and it’s looking to expand. The group invited Pharmabiz to visit its companies and learn more about its outlook from key executives.
Paraguay registered inflation of 8.1% in the year 2022, while price variations over the last five years averaged 3.38% and the forecast for the next few years is around 4%. That’s not bad on an international level, and compared with Argentina, where inflation for 2022 was 95%, it’s another world. When interviewed by Pharmabiz, Paraguay’s minister for industry Luis Castiglioni highlighted this as one of the selling points of the country currently led by Mario Abdo Benítez (presidential elections will be held this coming Sunday, April 30).
According to Brazil’s Fundação Getulio Vargas, Paraguay comes out number one in the region for the best business climate. Castiglioni stresses that its tax system is simple and competitive, with 10% levied in VAT; 10% on personal income; and 10% in income tax.
Scavone group, led by Oscar Vicente Scavone, operates a wide range of companies. Its pillars are Laboratorios Catedral; Laboratorios Éticos; Laboratorios Galeno; Farmavone; and Swiss Pharma. It also has Bax Pharma; VyT Farma; and Promepar, and the group owns Farmacias Catedral, a chain with 134 points of sale.
Meanwhile, seeking vertical integration, the group, which counts on the active participation of Scavone’s daughters, Giovana and Francesca, has branched into other business units. Highlights here include the industrial packaging division, with the firms Viscount, focused on plastics; Ampar, focused on glass vials; and Ingraf and Gráfica Mayo, which produce packaging for medicines. There’s also the logistics operator Farmanova; Infotec, which specialises in reagents; Audimer, focused on equipment and systems; and Hollow Punch, an expert in punching solutions. The group also operates in diversified businesses, including real estate.
Scavone currently exports to Uruguay, Chile, Bolivia, Peru, Ecuador and the Middle East. The group aims to become a regional player, with a clear focus on exports. That’s why in 2020, it created Farmavone, which integrates all the conglomerate’s companies with an eye on external markets. Its plans include advancing with the necessary documentation for regulatory validation in different markets. This is all under the baton of Hernan Streber, the Paraguayan corporate manager who leads manufacturing coordination. The goal is to expand through a plan of continuous improvement plan to cover the increasing demand and new needs that emerge.
The group’s ABC
Laboratorios Catedral is a century-old name and second in sales in US dollars nationally, according to data from IQVIA as of February of this year. The company has been growing its market share, rising from sixth place in 2019 according to the specialist consultancy. At the helm in the role of commercial manager is the Argentine, Ariel Bascarutti. The company invested €26 million in its Asunción headquarters, which opened in 2016. Products include beta-lactams; oral solids; semisolids and injectables. In addition, the firm markets mass consumer brands, like Solares Babe, under a licence from its Spanish namesake, and the recently released nutritional line Novarix. It also sells the Citracurio line for the hospital channel through a licence with the Spanish drugmaker Normon. Visit Catedral website.
Then there’s Éticos, which the firm defines as a boutique drugmaker and which is currently fourth place in market share in Paraguay, according to audits. With a manufacturing plant in the city of San Lorenzo, in the Central Department. its corporate commercial director is the Argentine Marcelo Gil. Its portfolio includes lines for pain, feminine care, ophthalmics, respiratory, and OTC. It also has a growing line of bioethics, which, through an agreement with the Chemo group, includes the development of the first biosimilars in the country following a process of technology transfer. This business started commercial management in 2018 and has generated agreements with firms such as Japan’s Takeda and Italy’s Kedrion. This year, Éticos plans to expand its portfolio with lines for diabetes and dentistry while it continues consolidating its monoclonal portfolio. Visit Éticos website.
Galen Laboratories, which was acquired by the family in 2016, is also led by an Argentine – Julian Festino as commercial manager. The company also has a plant in San Lorenzo, which is currently undergoing renovation and expansion. Once the work is finished, It will focus on the production of solids, liquids and oral powders, and powders for external use. Once finished, it will be the only plant in the country with the capacity to manufacture effervescent pills. Highlights of its portfolio include the pediatric dietary supplements Buona, through an agreement with Italy’s Steve Jones. See Galen website.
Promepar is Scavone’s great OTC promise. The company was founded in August 1983, and focuses on the representation and marketing of imported products, although the group put its stamp on it in the year 2010 when it became a division of Éticos, with Chemo Group and part of Insud Pharma holding a 50% share. The company is led by another Argentine, Jose Peace Iturralde, and has lines Winter, Urology, OTC and what it calls Institutionals. Its brands include the supplement Nervigenol and the isotonic Hemohidrat, which are all promoted in the mass media. See Promepar website.
Another of the group’s businesses, and one of its big bets, specialises in soft capsules. Swiss Pharma took shape in 2017. Headed by Blas Vázquez, the company has made a place for itself in the region despite the size of rivals like the US giant Catalent and Colombia’s Procaps. In this way, It managed to supply itself with products «made in Paraguay«, including its versions based on ibuprofen 400mg; simeticone 200 mg; and krill oil, among others. The company, which produces 96 million units per year, has set about exporting to Latin America, starting with Bolivia and already with an eye on Argentina. See Swiss Pharma site.
The pharmaceutical industry in Paraguay
The Paraguayan market, as of February 2023, shifts some 87,902,710 units a year, according to IQVIA. In US dollars, this translates to $ 466,810,392. Of that total, ethical products are highly significant, accounting for $ 402,886,409
According to IQVIA, under the Paraguayan health system, 21% of the population is covered by state welfare cover from the Instituto de Previsión Social (IPS), while 8% have a private provider. Therefore, there is still a long way to go in terms of access to health and especially in relation to oncological and more complex drugs.
Other than Scavone, the main companies in the sector are Indufar; and Quimfa. Other Latin American drugmakers with a presence include Argentina’s Adieu; Uruguay’s Megalabs; Argentina’s Bagó, and Chile’s Saval, again according to data from IQVIA.