Business Monday

Gateway City/Trend: MIA key player in U.S. pharma export trade

Ken Roberts
Ken Roberts

As incomes have grown in Latin America and the Caribbean over the past decade or so, so too have appetites for many creature comforts we all too often take for granted in the United States. Things like cellphones, education, computers, restaurants and nicer clothing. Another one is access to better health care.

That’s good news for the pharmaceutical and medical device companies with Latin America headquarters in South Florida. That includes companies like the Swiss multinational Novartis, the Japanese firm Nipro Diagnostics, and the U.S. companies Opko, Medtronic, Baxter, Stryker, Welch Allyn, Boston Scientific, Johnson & Johnson and others.

As they have benefited, so too have the logistics companies that handle expensive medical devices and the temperature-sensitive and highly valuable pharmaceutical shipments. It’s also been good for the airlines on which the pharmaceutical products fly. (Most do not travel by ship.)

It’s also been good for Miami International Airport, which to capitalize on its burgeoning stature as an important hub for pharmaceutical exports, recently became the first U.S. airport and one of the first in the world to sign on as a partner with the International Air Transport Association on its certification program for handling and shipping pharmaceutical products.

It ranks sixth for all pharma exports among the nation’s roughly 475 airports, seaports and border crossings.

A number of companies are joining with MIA to build on the certification program, including Amerijet, Brinks, Centurion Cargo, Consolidated Aviation Services (CAS), and Liaison CAN/US, as previously reported in the Herald.

Make no mistake, this is not only good for the health and welfare of Latin America and the Caribbean, it’s big business. Through the first nine months of 2015, South Florida – which included not only MIA but also PortMiami and Port Everglades – exported $1.85 billion of pharmaceutical products. That’s more than all Customs districts except Chicago, San Juan, New York City and Cleveland, which has pulled ahead of South Florida this year.

This column is about medicine in dosage form, South Florida’s sixth most valuable export and one of the subcategories under the general banner of pharmaceutical products in U.S. Census Bureau data. The others cover blood thinners, blood and plasma, medicine that is not in dosage form, and adhesive bandages.

This column is also the continuation of a series about South Florida’s most valuable exports, and follows similar series on the top imports and the top trade partners.

Both in South Florida and nationally, the category of pharmaceuticals in dosage form – think pills – is the largest, accounting for 51.89 percent on the national level and 48.70 percent locally. In that category alone, MIA ranks fifth nationally.

Through the first nine months of 2015, U.S. exports of medicine in dosage form – the subject of this column – have grown slightly, from $18.07 billion to $18.17 billion while falling locally, from a record $1.06 billion to $896.91 million.

U.S. rank: Medicine in dosage form is the nation’s 10th most valuable export this year, the same ranking it held last year at this time, down two from the No. 8 rank five years ago and equal to the rank of a decade ago. These exports have generally outperformed total U.S. exports over the years, up 0.55 percent this year compared to a decline of 6.07 percent for all exports. Over the last decade, exports of pharmaceuticals in dosage form have increased 85.40 percent while overall U.S. exports have increased 70.61 percent.

South Florida trade: The growth trajectory story locally is similar, although the ranking story has been rosier. Ranked No. 6 this year and last, medicine in dosage form was ranked No. 11 five years ago and eighth a decade ago.

Over the course of the last decade, South Florida medicine exports have increased 88.08 percent – similar to the national average – and overall exports are up 76.66 percent. That’s slightly faster than the national average. The five-year growth record is particularly good for these exports, up 35.33 percent compared to 3.22 percent for all South Florida exports. But, this year compared to last is not so good. Pharma exports are down 15.47 percent compared to 8.65 percent for all exports.

Why?

Export markets: What’s happening is similar to what’s happening for most of South Florida’s exports, including another seven of the top 10: They are being hobbled in large part by Brazil, which is in the midst of a dire economic and political situation.

Of the $164.20 million decline this year, $106.27 million can be attributed to Brazil. While Brazil accounts for just under 40 percent of the value of all medicine exports, it is accounting for almost two-thirds of the decline. Were it not for new No. 2-ranked Argentina, to which exports are increasing 42.51 percent, the year would be truly disastrous.

Importance to South Florida: For the last three years, exports in this category have accounted for slightly more than 2 percent of the value of all exports, not an insignificant percentage considering there are more than 1,100 categories. The leading export, civilian aircraft, engines and parts only accounts for 8.79 percent.

South Florida competition: While South Florida ranks fourth in the nation for exports of medicine in dosage form – one higher than for all pharmaceutical categories combined – it doesn’t export large quantities to similar markets as any of the three ahead of it, with the exception of Mexico. The other three, however, do have similar markets.

Most of the exports for No. 1-ranked San Juan, No. 2 Chicago and No. 3 New York City are shipped to Europe. When it comes to exports to Latin America and the Caribbean, as with so many other exports, it is South Florida and then everybody else. South Florida is accounting for just under 60 percent of the total this year, with New York City accounting for slightly more than 10 percent.

Latin America, excluding Mexico, is accounting for 6.85 percent of all U.S. exports this year, down from the record 7.98 percent the year before. A decade ago, the percentage was 6.16 percent.

This is the sixth in a series of columns about South Florida’s top 10 exports. Coming next: South Florida’s seventh most valuable export is the printer. Reach Ken Roberts, president of World City, at kroberts@worldcityweb.com. Twitter: @tradenumbers.

Brazil’s accounting for lion’s share of losses

Total

medicine

export

Sept. 2015

YTD

1-year

1-year

10-year

10-year

Change

in rank

Sept. 2015

YTD

World total

$ 896,908,483

-$164,200,457

-15.47%

$420,043,795

88.08%

0

1

Brazil

$ 358,644,274

-$106,273,649

-22.86%

$271,708,818

312.54%

1

2

Argentina

$ 118,054,644

$35,217,160

42.51%

$102,136,605

641.64%

-1

3

Colombia

$ 95,278,103

-$3,946,148

-3.98%

$79,248,921

494.40%

0

4

Italy

$ 53,218,370

-$27,577,993

-34.13%

$39,238,051

280.67%

0

5

Mexico

$ 40,816,364

-$36,860,034

-47.45%

-$9,826,537

-19.40%

0

6

Venezuela

$ 38,637,685

-$34,770,214

-47.37%

$23,902,407

162.21%

0

7

Chile

$ 31,875,545

-$3,597,412

-10.14%

$26,466,697

489.32%

0

8

Panama

$ 22,277,331

$524,323

2.41%

-$51,028,957

-69.61%

2

9

Uruguay

$ 19,211,486

$10,502,616

120.60%

$17,441,757

985.56%

-1

10

Peru

$ 18,743,181

$3,809,687

25.51%

$16,861,839

896.27%

-1

11

Belgium

$ 10,553,818

-$1,116,630

-9.57%

-$8,173,778

-43.65%

5

12

Japan

$ 8,856,650

$4,198,303

90.12%

$8,571,530

3,006.29%

1

13

Australia

$ 8,807,385

$967,344

12.34%

-$15,655,053

-64%

-2

14

Ecuador

$ 7,556,647

-$861,567

-10.23%

$2,847,653

60.47%

0

15

France

$ 6,587,615

$1,473,832

28.82%

-$6,405,057

-49.30%

SOURCE: WorldCity analysis of U.S. Census Bureau data

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