Venezuela pharma sector starved of foreign currency
Slow issue of health permits is further complicating matters
Venezuela's pharma sector is in a critical condition as medicine manufacturers and traders are struggling to get their hands on hard currency, the lack of which is hindering them from importing medicines, manufacturing ingredients and materials. US dollars are crucial for most industries in the country’s import-reliant country, which earns most hard currency from oil exports. Venezuela faces an increasingly grim economic outlook and dollars are often in short supply on official exchanges, preventing manufacturers and traders from paying bills issued by foreign suppliers.
Further complicating matters for medicine manufacturers, industry leaders say that government-regulating bodies have been slow to issue or renew health permits, a requisite for drug companies to obtain foreign currency under Venezuela’s complex foreign exchange system.
'The situation is very serious,' said Freddy Ceballos, President of the Venezuelan Pharmaceutical Federation (Fefarven), which estimates that the pharmaceutical sector has run up some US$3bn in debts with suppliers. The outstanding taxes and bureaucratic backlog required even to try and pay them off has crippled health services across the country, with pharma traders and manufacturers unable to supply hospitals and clinics.
Last week Fervaren criticised the government, saying that less than 10% of health permit applications or renewals had been approved since President Nicolás Maduro took office in March 2013.
Since Fervarven's declaration, Ceballos said that permits are now being issued, but 'that doesn't guarantee we [pharmaceutical companies] receive dollars or that medicines will be brought into the country'.
While the government has recognised that there are shortages, its officials and ministers maintain that they are part of an 'economic war' being waged by businesses and the country's political opposition to topple the administration. Indeed, Health Minister Francisco Armada has sought to resolve the deficits through trade pacts with allies such as China, Argentina, Ecuador, Uruguay and Portugal.
Additionally, Armada pledged to increase availability of medical supplies by expanding the state run pharmacy chain, Farmapatria, and by the creation of a new state body, the National Corporation for Health Supplies (Consalud).
Ceballos said that such efforts are welcome, but 'the government must also ensure that [the] pharmaceuticals [industry] has dollars as well'.
