Read the Conversation

EF: You have a strong background in economics and public policy so what attracted you to work in ALAFARPE?

AF: I worked in the public sector for many years and I have also worked in the private sector and multilaterally for the World Bank. Whether it is done by the government or multilateral organizations, the economic application of the health sector is trust-oriented in terms of development for people and societies. In Peru, there have not been further developments in the health sector for many years, and as a result, there is evidence of huge gaps in Peruvian healthcare that must be closed with constructively driven development and with the involvement of the private sector. The pharmaceutical industry is one of the world’s most regulated industries and as such, has a responsibility and an important role to play with many opportunities to get involved in quality healthcare in terms of universal healthcare coverage. 

EF: Could you elaborate on ALAFARPE´s market footprint, members, facts and figures, and public and private market share? 

AF: ALAFARPE, the Peruvian Association of Pharmaceutical Laboratories, has a history of over 60 years and represents the interests of 23 companies. Our members include multinationals and laboratories that operate plants in the country, members with diverse business models, most of them with innovative therapies or generics. All our members share the core values of innovation, quality, and the high ethics of the pharmaceutical industry. In Peru, there are about 4 million people who have no health insurance and for their benefit, we try and promote a more sustainable regulatory framework. Our market, which is small in comparison with the rest of the Latin American markets, has a value of 1.9 billion dollars. In 2008, the market expanded 6% but by 2019, the growth has slowed to 2%. The low economic growth of the country has affected the growth of the health sector and ALAFARPE´s proportionate share of the whole market is 35% which means there is a lot of room for improvement of access to innovative therapies as the rest of the market is covered by local laboratories and importers of generic biosimilars. In terms of public investment, Peru has 5.5% of the GDP expenditure allotted to health, but during the pandemic, the public health budget has been increased slightly by 20 million soles which are about 11.4% of the total public health budget in Peru in terms of expenditure.

EF: How can we keep momentum on fiscal strategies in Latin American economies for the allocation of healthcare budgets? 

AF: It is not just a matter of additional budget, but that said budget must come in hand with an effective expenditure strategy. I have been in this association for 3 years and the effectiveness of the health budget expenditure has been low, so it is a matter of having an effective strategy of quality expenditure. Due to these issues and delays the industry suffers, but more importantly, the patients suffer, especially the patients with cold treatment coverage. About 58% of the country´s vulnerable population has an insurance issued by the Ministry of Health but they have not even been able to get complete treatments which by right, should be theirs. So, the effectiveness of the budget is a variable we should work on in both the public and private sectors, complying with contract, vision, and transparency. The government must comply with timelines, the effectiveness of expenditure, and most importantly, with the quality of strategic resources for Peru as the patients desperately need assistance. We need to achieve compliance, quality, safety, and effectiveness in terms of healthcare.

EF: What is Peru’s biggest burden of disease? 

AF: There is more than a 1-billion-dollar gap per year on investments made by the state versus the needs of the population in high complexity illnesses, chronic, and orphan diseases. Moreover, one of the impacts of the Covid-19 pandemic has been the interruption of prevention programs, diagnostics, and treatments for this group of patients. In the case of oncological patients, the reduction of attentions has been a dramatic 70% between February and June of this year, according to official figures. In the case of patients with orphan or rare diseases, the fall on attentions has been of 56% in the same period, according to official figures. The high chronic diseases and other high complexity illnesses have the biggest impact on public expenditure so, the government must work in this area with the participation of the industry. There are specific models coming from Africa and Europe that are trying to be implemented in Latin America such as risk-sharing models of access and new models. Risk-sharing between the government and the industry would allow for a faster level of access to innovation, to new therapies for the benefit of the patient, and to calibrate the expenditure of medicines for a sustainable deal in health systems. Countries that are focused on containment are difficult to turn around but results can be seen in terms of low levels of hospitalization or re-hospitalization and service in terms of the productivity of the patient; all variables we are trying to put on the table for a medium level strategy of not only value, level and price but to include a more holistic view of healthcare.

EF: What would be your advice on tactic and strategic decision making towards balancing communicable and non-communicable diseases, even with the urgent need to address Covid-19?

AF: Our association has developed a recent study that calculates the impact of the interruption of treatments during Covid-19. Up until September, there have been almost 11 000 deaths as an excess over regular figures associated with the interruption of treatments for chronic and high complexity patients in Peru. We are discussing with technical evidence the root causes of the interruption for chronic patients and one of the main reasons is the reduction in consultancy, issues with transportation to and from the hospital, and the healthcare environment all having an impact on the patients. We are searching for opportunities to change and transform the impact in terms of improving telemedicine, electronic records, and electronic prescriptions so they become a reality to caregivers, private clinics, hospitals, and different private stakeholders that work in the logistics areas. With this big picture in mind and putting the patient’s interest at the center, there are possibilities to begin to develop public-private partnerships as a way of reducing the gap of treatment –also positively affecting the government’s savings and investments. The mortality rates we are seeing from both Covid-19 and non-COVID diseases are mostly preventable but they happen because of a lack of compliance with the national schedule and these are issues we must solve as soon as possible, preferably before we get the new vaccine for Covid-19. We are pushing for an agenda where the government, the private sector, and the civil society will be prepared in logistics and communications while mitigating the effects of the lack of treatments due to Covid.

EF: What are the key therapeutic areas and which are the most dynamic companies in Peru today?

AF: We do not really follow the commercial activity of our associates so that is hard to answer. But I can say that the companies with wider portfolios in the private sector and with a higher level of imports have been negatively impacted since consultancy and prescriptions have dropped a lot. In spite of this, there are opportunities to include more innovation due to the fact that the government is trying to do large centralized purchases, not to mention its efforts in increasing access to include generics and biosimilars and incorporate a balance with access innovation. It is important to regulate generics to have quality and safety, we have had regulation for about 9 or 10 years now but it was only approved last year and now we have 3 or 4 bio-equivalent generic molecules in the market approved by our regulatory agency, DIGEMID. There is a lot of room for improvement in this area to incorporate more bio-equivalent molecules into the market and system to guarantee the quality and effectiveness of the treatments and medicines for the patients.

EF: What is your personal definition of access? 

AF: Access for me is about equity, the opportunity to get the therapy the patient needs when it is needed. It is the right to have a treatment of quality that is safe in any therapeutic area. Access is not only about being affordable, but it is also about having a regulatory framework and approval timelines, about the opportunity and positive impact new molecules have on patients. 

EF: Leaders today are in a very unique position as nobody is prepared to face a pandemic so, what is your advice to other leaders on the times of transformation like we are living today? 

AF: To begin with, I would suggest openness and collaboration, to work closely with civil society and the private sector. Leaders from all sectors should make constructive proposals, work more on testing, tracing, potential isolation strategies, and above all, on communication, especially in Latin America where the populations are diverse and live many different realities. We are now studying the numbers Covid has left and they are very worrying; this is not a criticism, but an attempt to understand and to learn. We have to work on communication and on constructing bridges with the government to save our people from the effects of the pandemic. Peru has a very high level of informality in all areas and a very diverse culture and the communication should come from the country’s leaders: the government, private sector, and civil society, so they all participate in this big vision of a developed healthcare system while mitigating its impact on the economy. We need more and better information, endorsement, and empowerment of local authorities to implement and operate government strategies in the different regions, towns, and villages trying to avoid political issues that almost always exist in Latin America and especially during the pandemic. Health should never be politicized (and it almost always is).

EF: How big is the digital health footprint in Peru and what can be done moving forward in this area?

AF: The digital health agenda has been renewed during and because of the pandemic. The digital health agenda has existed within the government, but implementation has been very slow so now is a very good moment to join efforts and grow together with the Ministry of Health. For example, during the pandemic, the Ministry of Health emergency system collapsed due to all the calls coming in so we worked with the digital strategy people at the Ministry setting up the best option the private sector could offer for telemedicine in terms of a platform for emergency calls for Covid-19, the derivation to hospitals, and also an extension of face to face consultations and orientation. As the pilot program solved the first stage problem, we plan on following this up for our members to develop these systems by doing consultations, capacity building for medical personnel, doctors and nurses, emergency calls, etc. After ALAFARPE´s collaborative role in the first stage of the pandemic, there are many initiatives from the private sector which have come to stay and this has made the patient framework change over the last three months. We now have a special regulation for telemedicine, the Health Ministry has approved electronic prescriptions for certain universal medicines -which could soon be followed up with chronic diseases prescriptions-, and the delivery of medicines for those specific universal medicine patients with high-risk mobility. Over these last months, we have advanced very quickly on approved regulation in different areas and as a result, I am very optimistic about working on closing the gap. Peru is geographically a difficult country to deal with healthcare, it has a low distribution of doctors in certain areas so digital orientation or consultation will go a long way toward closing the gap, not only in terms of diseases and illness, but also in prevention.

EF: What could be done to push the healthcare agenda for the next 10 years?

AF: We are trying to promote a more sustainable regulatory framework while protecting free and healthy competition in the pharma industry. We are also promoting good practices in terms of corporate social responsibility as there are a lot of issues that need to be solved between the private sector and the government to achieve a development impact on society. There are preventable diseases that we are already working on but if we work jointly with the government, we would have a more scalable project. The Covid experience offers evidence that the government and industry can work on accelerating development and join efforts in preventing new pandemics coming our way, not to mention all the preventable diseases that can be avoided.

August 2020