Oscar Vicente Scavone, President of Scavone Laboratories, in conversation with Leading Edge on the industry in all its facets
Interview
Leading Edge (LE): The Paraguayan pharmaceutical sector has expanded significantly over recent years, with growth rates of more than 20%. Nonetheless, the sector is facing a series of challenges. In your opinion, what are the
greatest of these challenges?
Oscar Vicente Scavone (OVS): First of all, the growth in the pharmaceutical sector in Paraguay has been due to the growth in social security medical coverage. The government’s investment, via the Ministry of Health in Paraguay, in all aspects of social wellbeing, including medication, infrastructure, hospitals and clinics, has increased greatly over the past years. This public investment has been fundamental to market growth. The private sector has also seen a natural growth due to a combination of the two care systems.
The challenges presented to the system come firstly from the level of technology required by manufacturing laboratories and pharmaceutical factories. Investment in technology is very expensive and is inescapable, as regulations require it. There is no option of whether to invest or not. Another challenge is to keep up-to-date with all the regulations that are brought out, as the pharmaceutical industry is constantly changing, incorporating new safety systems, and developing new products.
LE: The Scavone Pharmaceutical Group is responsible for all stages, from production to distribution and sale. What does this mean for efficiency and cost savings?
OVS: Production and having your own factories is the core of this industry. For our distribution, which is the commercial part, in Paraguay we do not have well developed product distribution systems. A few very well-established, organised, and properly managed companies are the exception. The traditional method of selling through distributors doesn’t exist. As a result, each company develops its own distribution means. As for us, at this time, we are planning a single distributor for our whole corporate group. This is one of the ways in which we intend to lower costs and improve efficiency.
It is not easy to change mentalities in Paraguay, but over the past three years, and thanks to this administration in particular, important progress has been made in this respect
LE: The Scavone Group is present in all Mercosur countries as well as in Chile, Ecuador, and Central America. Do you have any plans for international expansion to other countries in the region?
OVS: Firstly, exports have greatly helped to elevate the quality standards of the Paraguayan industry in general, and of our group in particular. We were already meeting regulations that were applicable in countries with greater health regulations, such as Chile and Argentina, but not in effect in Paraguay at the time, which helped in complying with legislation when it became obligatory in Paraguay. Secondly, Paraguay’s pharmaceutical exports lead the rankings of exports in non-traditional categories, and we have been the recipient of awards from the Ministry of Trade and Industry. The industry in general is currently exporting more than US$50 million annually in finished products from national brands. And in new markets, we are doing particularly well in Africa, where we have opened up the market in Angola, and we are preparing for an inspection from the European Medicines Agency in 2017. We are in the middle of preparations with the IT systems and other aspects that make up the administration department of a pharmaceutical factory, to undergo their audit and to achieve certification. What really interests us is Eastern Europe, as it is a very promising and accessible market. Paraguay as a country continues to manage costs very competitively, and we have reasonable expectations that things will go well for us. We have at least five pharmaceutical companies that meet the conditions to export to the European Union.
LE: How has the current administration caused a change in the day-to-day mentality towards politics and the economy in Paraguay?
OVS: It is not easy to change mentalities in Paraguay, but over the past three years, and thanks to this administration in particular, important progress has been made in this respect. Corruption has been faced head on, and we have seen significant improvement in that area. Improvements in transparency have been equally important. For example, public information has now been uploaded to the internet, and the whole population
has access to it. Laws and regulations are now respected more, with noticeable improvement even in compliance with traffic regulations. There has been a substantial improvement in all these areas.
