Venezuela’s “Paralyzed” Pharma Firms Point Finger at Forex Controls

EspañolWorkers at Pfizer, the largest pharmaceuticals company operating in Venezuela, downed tools to protest on April 8 over severe shortages of the raw materials needed to manufacture medicines.

Over 500 jobs at Pfizer are at risk amid a possible paralyzation of a factory in Venezuela.
Over 500 jobs at Pfizer are at risk amid a possible paralyzation of a factory in Venezuela. (El Carabobeño)

Pfizer employees reported that the company is only producing at 40 percent of capacity, and that the only medicine being produced on a large scale is Atamel — a brand of acetaminophen desperately needed in a country where the chikungunya virus has become a national epidemic.

Ali Mora, secretary general of the Pfizer workers’ trade union, told press that the number of pharmaceuticals being produced by factories had fallen by 60 percent.

“We had a diversified range of 80 products, but now we’re barely producing five. The majority of the rest are being made in Europe,” Mora said.

The Venezuelan Pharmaceutical Federation (Fefarven) also sounded the alarm on the following day about national shortages. Fefarven President Freddy Ceballos reported that Caracas is facing 60 percent shortages in supply of medicines, rising to 70 percent scarcity in the interior of the country. Ceballos explained that the problem was due to the lack of liquid foreign currency reserves, crucial to import the goods needed for domestic production.

Ceballos told the PanAm Post that the situation facing the pharmaceutical sector is grave, and argued that if currency reserves weren’t made available soon, the supply of medicines to meet national needs would dwindle to almost zero.

“We call on the Venezuelan state to prioritize the awarding of reserves to the entire pharmaceutical sector. Laboratories clearly need materials to be able to produce. They have to find a way of stimulating production,” he said.

The industry representative reported that the last time it received foreign currency was at the end of 2014. He warned that “as long as the government doesn’t make available the necessary dollars in a planned way, the same problems will continue.”

Ceballos further argued that even if the government awarded the necessary reserves today, it would take between three and four months for the market to return to normal, adding that the Health Ministry should establish closer communications with Cencoex — the state body that hands out reserves to industries.

Systemic Failure

The Ferfarven chief reported shortages in medication for pain relief, blood pressure, cardiac problems, and respiratory conditions, as well as multivitamins for pregnant women and contraceptives: “We’ve arrived at the extreme of seeing parents looking for contraceptives for their children,” he added.

Sixty percent of medicines are missing from shelves in Caracas, Venezuela, rising to 70 percent in the interior of the country.
Sixty percent of medicines are missing from shelves in Caracas, Venezuela, rising to 70 percent in the interior of the country. (Bancaynegocios)

“It’s necessary to realize that all medicines are important, regardless of whether they’re for rare illnesses. The whole world has the right to secure the medicines that it needs.”

“We’re also very worried about the supplies sector. What good is medicine if you don’t have the supplies to administer it intravenously?” asked Ceballos, highlighting a “grave” shortages of gauzes, syringes, and catheters, among other products.

Ceballos called on recently appointed Health Minister Henry Ventura to revise the ministry’s operations, following confirmation from the state comptroller’s office about the existence of “huge numbers of expired medicines in the country” due to flawed purchasing procedures.

He also emphasized the “urgent” need to update statistics relevant to the medicines market. “Epidemiological reports are essentially not being updated at all; the government should carry out a study of what are the existing illnesses and what are the necessary medicines,” Ceballos argued.

State Projects Paralyzed

Venezuelan daily El Nacional meanwhile reported on Thursday, April 9, that government projects to install four expensive pharmaceutical factories in the country have barely got off the ground.

The plants, designed to substitute imports, are to be constructed through agreements with Cuba, Colombia, and Portugal. While resources have been assigned and government funds paid out, all of them are yet to be built.

Carlos Walter, director the Center for Development Studies (Cendes), confirmed that deals signed by the Venezuelan government with Colombia in December 2012 had failed to materialize, and had instead been substituted for a pharmaceuticals factory in Yaracuy state.

The Shanghai Zhongla & Trading Company delivered manufacturing equipment for the plant after the Venezuelan government paid over US$800,000, but the factory was never built. At the close of 2014, government figures report that raw materials to be used in the manufacture of medicines at the plant worth over $7.5 million remained in storage, and all had expiry dates of 2014 and 2015.

According to Walter, Venezuela has also signed a deal with China to build a factory for intravenous fluids and serums, but government records show that the project is barely in the feasibility study stage.

The Cendes director added that another deal with Cuba, to build a pharmaceutical complex dedicated to the production of essential medicines, is yet to be honored.

“In 2011, they started moving earth in the location where it was going to built at Yare in Miranda State, and they approved the financing of the project with resources supplied by [national development funds] Fonden and the Independence Fund, for an unknown amount,” Walter explained.

“The objective of this firm is to produce 125 essential pharmaceutical products. There’s been no official information on progress in the project since 2013,” he concluded.

A fourth agreement is included in the catalog of failed projects: a deal with Portugal to build a factory for cephalosporins and penicillin, two kinds of essential antibiotics.

The plant, with a price tag of $96.6 million, was due to be completed in 2014, but in 2013 it became the responsibility of social welfare program Misión Barrio Adentro Foundation. The factory is yet to be completed.

Translated by Laurie Blair.

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