Sebastián Araya van der Schraft, General Manager at Laboratorio Kampar S.A. discusses the new medicine law in Chile—considered a victory by the last government—and further explains why Mexico is the next step in the company’s internationalization strategy.
In 2010 you mentioned that Kampar had three big business developments planned: the commercialization of a generics line, the aim to represent more international houses and expanding the lines Kampar currently had. Four years on, where do you stand?
Frankly, Kampar has been successful in regards to its growth strategy. In addition to our existing partners, we currently have managed to partner with several prestigious European companies to bring their products to the Chilean market. Furthermore, we are also currently negotiating with a US based company to bring their niche product to the market here.
Kampar’s generics business has excellent results despite the fact that we work with the three main pharmacy chains that control a majority of the market. We have added more products into the field of generics in order to provide more options to the public system, which is our biggest client.
Our primary strategic focus has remained the field of oncology. For example, we work with the German company, Medac GmbH, which is one of the leading manufacturers of oncology products in Germany. In addition, we are selling a product for the cure of rheumatoid arthritis; Metoject®. We have incorporated this product into all principal hospitals in Chile and, with Medac GmbH, we are in the process of exporting this product to Mexico as well.
Due to new markets and new treatments in Chile the company has increased its sales revenues by 20 percent over the years 2011 and 2012.
What have you identified as the primary growth areas in the Chilean context?
Our products are recognized for their high quality and for directly addressing the needs of patients. This is the reason why we achieved so much growth in critical markets such as oncology where patients, doctors and hospitals consider that our products speak for themselves. We have a high market participation in the country and that is why international companies are interested in working with us.
Kampar’s principal growth derives from innovative drugs; we are a leader in providing products for the cure of Leukemia, for example. At the same time, our generic line is growing significantly.
Today, Latin America accounts for a small portion of the world market, yet this is expected to increase. Do you see an increasing demand for the treatment of cancer?
Absolutely. Cancer is threatening to overwhelm Latin American countries with the number of cases of cancer increasing over the years.
Although rapid diagnosis and access to treatment has improved significantly, the region remains poorly equipped to deal with the alarming rise in cancer incidences.
Products and devices are available for diagnosis and treatment of cancer in the region but, unfortunately, not enough to satisfy the demand. As a matter of fact, in Chile there are 50 oncologists in a country of 17 million habitants. As a result, treatment of cancer is limited—for example, Colorectal cancer, a cancer from uncontrolled cell growth in the colon or rectum (parts of the large intestine), or in the appendix, incidences are rapidly increasing in Chile. It has been demonstrated that it can be prevented and cured when the diagnosis is made in early stages.
In conclusion, Chile demands more companies that will provide doctors and hospitals with products and devices for the treatment of cancer. This is something the country is aware off and we are making progress.
How has the competitive environment for Kampar evolved?
When Kampar started its operations in 2004, four companies provided products in the field of oncology. Today there are 26 laboratories. Having said that, Kampar has by far the largest offer, with over 60 products in its oncology portfolio.
Our competitive advantage is that we partner with several prestigious companies from well-known markets such as Germany, Switzerland, Austria and the US. Moreover, our products comply with all the highest international standards and certifications.
What are the advantages for Kampar to outsource all of its production activities?
In fact, this is the model that we have acquired from Asta Medica GmbH Germany, a company that my father, Armando Araya Rico, was the General Manager of. Currently, there aren’t any production facilities for oncology products in Chile. Kampar has a partnership with Euromed, a manufacturing company that does not produce the pharmaceutical products itself because they arrive already finished. Furthermore, Euromed/Eurofarma is the second largest in Brazil and therefore a great support in helping us expand into other markets.Our core business at Kampar is to commercialize/marketing the drugs; we consider ourselves specialists in marketing medicines.
What are the latest developments of your international strategy?
We are exporting to Venezuela, Bolivia, and Colombia. One of our growth markets, Venezuela, however is experiencing significant political unrest. As a result, sales revenues have fallen in the country. In Bolivia we are expecting to launch two additional products that are currently not available in the market.
Our main focus is Mexico. With a free market economy, Mexico is considered to be one of the largest economies worldwide and we see huge demand coming from that country. Kampar has not launched any products so far as we are still in the process of registration. Nevertheless, we have already received purchase orders from several Mexican hospitals. In Mexico, we have hired 10 local staff from pharmacists to administrators and expect to export the first batch of products in the next months. The opening of our Mexican office is planned for July 2014.
In January, the Senate passed a new law concerning the handling and sale of medicines. The former ministry of health celebrated it as a ‘victory’. What is your uptake of the new medicine law and how will it impact your operations?
I believe it will have a positive impact on our business and export lines. Naturally, the efforts made by the government are with the aim to ultimately benefit the patient.
One of the key changes in the Medicine Law is that medicines must have a bioequivalence. As a representative of EU and US based companies, this is positive because the products we bring to Chile have bioextension, which we are able to commercialize in Chile.
Our recent elected President, Michelle Bachelet, is trained as a doctor and served as Health Minister under her predecessor, President Ricardo Lagos. Having said that, she is closely involved in Chile’s healthcare system; we can therefore expect great commitment in fostering the right environment for the pharmaceutical industry.
This year Kampar is celebrating its ten-year anniversary. Looking back, what has been your main achievement or biggest milestone?
It is the great motivation of our employees that made our leading position a reality. We are very proud of our company, and have achieved many great things. The most important is the motivation and the satisfaction of our people.
Moreover, we have already received support from several KOL´s, which has contributed to our growth. We are the principal provider of pharmaceutical products in oncology to hospitals of the Ministry of Health.
Furthermore our “P x Q” strategy has proven to be successful: we offer good prices based in large quantities. Our products comply with the highest international standards and certifications and our aim is to provide these products to hospitals in order to make the best treatment available to patients.
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