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Pharmaceuticals and Medical Equipment in Latin America

December 2022

In 2021, Latin America ranked fourth globally in terms of production output of pharmaceuticals and medical equipment, with a turnover of USD123.9 billion. Going forward, the industry is forecast to record slow growth due to soaring inflation, subdued economic growth and persisting structural problems. Global supply chain disruptions and accelerating nearshoring, however, may present opportunities for Latin America’s drugs and devices producers.

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This report comes in PPT.

Key findings

Growth of Latin America’s pharmaceuticals and medical equipment industry to be slow

The outlook for the pharmaceuticals and medical equipment industry in Latin America remains clouded by the region's slow economic growth, persisting structural problems and elevated poverty levels which result in lower domestic demand for pharmaceuticals. As a result, the region is expected to remain the fourth largest drugs and devices producer, expanding at the slowest pace among all global regions over 2021-2030.

Costa Rica to record the steepest increase in production value

Costa Rica is set to record the highest production value increase within the region, especially in medical devices, driven by various tax incentives, business-friendly policies, strong technological development and great interest from foreign investors. However, Puerto Rico is forecast to maintain its number one position in terms of the industry’s production value, supported by a concentration of world-leading life science producers, a broad manufacturing base and a skilled workforce.

Nearshoring to benefit Latin American producers

As supply chain disruptions brought about by COVID-19 highlighted the need for production nearshoring, the US, one of the main export destinations for Latin American drugs and devices, is making efforts to reduce its dependence on China and to boost production in neighbouring countries. According to the Inter-American Development Bank, nearshoring could add USD78 billion in additional exports of goods and services in Latin America, with pharmaceuticals among the industries expected to benefit the most.

Region to remain vulnerable to external supply disruptions due to high reliance on pharma imports

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. China, Western Europe and the US remain the region’s major suppliers, with India actively aiming to increase its pharma exports to Latin America.

Key findings
The industry is set for the slowest growth in Latin America across global regions
Inflation and slowing economic growth to result in turnover decline over 2022
Brazil to record absolute value decline in majority of drugs and devices categories
Argentina to strengthen pharmaceutical independence from existing market leaders
Rising investment flows to support Costa Rican and Mexican pharma sectors
Pharmaceuticals to maintain the largest turnover share in Latin America
Relatively high industry fragmentation as small firms dominate drugs and devices industry
Small firms remain the most prevalent, yet large ones account for most of the production
Most exports are destined for other Latin American countries and the US
Latin America is reliant on external supplies of drugs and devices
Puerto Rico: Production context
Puerto Rico: Foreign trade landscape
Brazil: P roduction context
Brazil: Foreign trade landscape
Mexico : Foreign trade landscape
Argentina : P roduction context
Argentina : Foreign trade landscape
Costa Rica: P roduction context
Costa Rica: Foreign trade landscape
Colombia : Production context
Colombia : Foreign trade landscape
Chile : P roduction context
Chile : Foreign trade landscape
Cuba : P roduction context
Cuba : Foreign trade landscape
Peru : P roduction context
Peru : Foreign trade landscape
Ecuador : P roduction context
Ecuador : Foreign trade landscape
Uruguay : P roduction context
Uruguay : Foreign trade landscape
Dominican Republic: P roduction context
Dominican Republic: Foreign trade landscape
Panama: P roduction context
Panama: Foreign trade landscape


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