The fallout from the pandemic is beginning to become apparent across issues such as centralized procurement, timelines for marketing authorizations, and the pressure for system reform. As health ministries across Latin America continue to push to close deals for vaccine access, other challenges are being prioritized. COVID-19 has created new budget pressures for stakeholders across the healthcare ecosystem, including patients, pushing leaders to stop waiting for COVID-19 recovery to drive other necessary reforms. While we see Chile and Peru take actions to significantly expand access given their relatively strong fiscal position, we are witnessing a delicate balancing act in Colombia and Brazil, while governments in Argentina and Mexico are facing significant challenges to address near-term shortfalls in funding.
Argentina
In 2020, social security revenues in Argentina were down 5% in real terms compared to 2019. As a result of these declines, funding to providers increased dramatically. While the Emergency Assistance Fund covered revenue declines compared to March 2020, the total monthly revenue of the Obras for March 2020 was 4% lower in real terms than that of March 2019. Amid the financial bailouts for the Obras, Vice President Cristina Kirchner has floated the idea of a major overhaul. While it is unlikely this reform will pass due to political opposition, the reform suggested by Kirchner includes integration of public, private, and social security health systems, with centralized financing and automatic collection of reimbursements.
Colombia
At the end of 2020, the government announced 2021 adjustments to the Plan Básico de Salud (PBS) and the Unidad de Pago por Capitación (UPC) for the contributive and subsidized regimes through Resolution 2481. In 2021, the UPC increased by 5.18% for both regimes, as the government continues striving to narrow the gap between the contributive and subsidized regime UPCs. While the PBS covers medicine, procedures, and clinical lab services, medications are its largest cost driver. Though medication coverage rose by 9.9% YOY in 2021, the number of total medications covered (599) remains 15.4% below 2015 levels, when the PBS covered 708 medications. This places additional pressure on the recently established presupuestos máximos mechanism, through which non-UPC expenses are financed.
Brazil
Delays in market authorization processes are likely to become more acute in 2021 as ANVISA’s budget continues to fall, personnel shortages persist, and the agency is forced to center efforts on pandemic-related initiatives.
We believe firms operating in Latin America must be adequately informed regarding current policies and key risk factors to react swiftly to local conditions and ensure a smooth recovery. FrontierView’s Director of Healthcare Research, Alec Lee, walks you through the 2021 Healthcare Events to Watch to help you understand the major events that healthcare executives need to track this year.
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