In 2020, Latin America ranked fourth globally in terms of production output of pharmaceuticals and medical equipment, with a turnover of USD107 billion. Following a contraction in 2020, due to the COVID-19 pandemic, the industry is set to return to growth in 2021. Long-term development will, however, be subdued due to the difficult operating environment.
The Latin American pharmaceuticals and medical equipment industry is expected to decline slightly over the forecast period, representing the weakest performance among the regions, mainly due to a difficult operating environment in Puerto Rico, the region’s largest drug and device producer. The region is, however, set to remain the fourth largest producer of pharmaceuticals and medical devices globally.
Production of pharmaceuticals in Brazil and Argentina is set to record steady post-pandemic growth. This expansion will be largely driven by growing demand for healthcare services from ageing populations, expanding investment in healthcare infrastructure, greater interest from foreign investors, as well as efforts to strengthen capacity in weak or lacking areas, including production of mRNA-based vaccines.
Two decades of transformational development, coupled with a range of incentives, have helped Costa Rica to strengthen its position as an advanced and innovative hub for the production of medical equipment. Home to a large number of leading medical original equipment manufacturers, the country is also set to witness strong expansion of medtech contract manufacturers.
Supply chain disruptions brought about by the COVID-19 outbreak have underscored the benefits of production nearshoring. Thus, the US’s plans to diversify the supply chain of pharmaceuticals and medical equipment, as well as efforts to localise production in Latin America, are expected to bolster investment in the region and support future growth.
While production of pharmaceuticals and medical equipment in Latin America primarily targets cost-effective products, such as generics and biosimilars, domestic demand for innovative and high-complexity products, including biopharmaceuticals, is largely satisfied by imports from leading global producers operating in developed economies.
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