Trends and Insights on the Pharmaceuticals in Latin America

Though geographically closed, Latin America’s nations are miles apart in terms of doing business. Global pharmaceutical firms are drawn to Latin America due to the overall double-digit growth rate of the region’s market growth. However, before executives take their business to anyone market, they must cautiously consider the opportunities against economic, political, and regulatory factors that impact the industry growth.

As per the findings of this report, Latin America has a rapidly emerging healthcare system, and the pharmaceutical sector in the region is also on the verge of accelerated growth. The pharmaceuticals products and CMOs (contract manufacturing organizations) are expected to grow at a CAGR of 7% through 2023, attaining US$76 billion in total value. Brazil is the largest in Latin America’s pharmaceutical market by value as of 2020. Brazil’s pharmaceutical market value was estimated at USD 21 billion in 2020. Mexico, the largest pharmaceutical market in Latin America, is estimated to be USD 7.4 billion. Argentina recorded USD1.1 billion from pharmaceutical sales in the first quarter of 2021, representing a 57% increase from 2020 (CEPAL, 2021). Overall, Latin America accounted for approximately 3.5% of the global pharmaceutical market revenue in 2020. Generic drugs and CMOs are the largest Latin American pharmaceutical markets. Latin America’s generic drugs market is presently valued at USD37.1 billion and is expected to hit a market value of USD50.6 billion with a 6.4% CAGR between 2020 and 2026. The CMO market value is expected to increase from USD15 billion in 2020 to USD39.7 in 2027, 14.7% CAGR. Latin America’s over-the-counter drugs market is also growing significantly and is projected to record 8.64% CAGR between 2021 and 2026, and an increase in market volume in the same period from USD11.4 million to USD17.3 million. Several factors are attributed to the accelerated growth in Latin America’s Pharmaceutical market (Research and Markets, 2019).  


The accelerated growth in Latin America’s pharmaceutical industry, mainly the CMO market, is attributed to the increased foreign investment, an improving regulatory environment, a growing geriatric population, and rising trade deals between Latin America and other countries, including the United States, Japan, Canada, and several nations in Europe. Most of Latin America’s pharmaceutical pharms are increasingly outsourcing manufacturing activities to foreign contract manufacturing companies to increase capacity, capacity, cost-efficiency, and time to market. Brazil is the chief recipient of Latin America’s foreign direct investment and is emerging as the world manufacturing hub for pharmaceutical contract companies. Brazil accounted for 24.9% of the total pharmaceutical CMOs in Latin America in 2019 (Research and Markets 2019). Favorable factors, including several Good Manufacturing Practice (GMP)-certified plants and low manufacturing cost, many multinational pharmaceutical firms are attracted to the Brazilian market, thus widening the CMO industry’s score in Brazil (Finchelstein, 2017). Furthermore, because of the lower investments in research and development within the pharmaceutical sector, Brazil is anticipated to have significant scope for CMO companies in the coming years (Valverde, 2014). Mexico comes closer as the second-largest Latin America’s market for pharmaceutical CMO products

Contract manufacturing has created enormous opportunities for Mexican pharmaceutical companies and has many benefits. The country’s healthcare expenditure is about 5.5% of the GDP, while health insurance coverage has expanded over time to reach 89.3%, triggering pharmaceutical firms to develop more interest in the Mexican market. The lower government support and lower per capita healthcare spending by the Mexican people widen the scope for subcontracting pharmaceutical manufacturing (Lopes et al., 2019). The constant growth of generic drugs sales is also boosting the revenues of local pharmaceutical CMOs. Furthermore, the accelerated growth in the generic product market in the country is also attracting investments from multination companies seeing to access other Latin American Markets through production activities in Mexico. The Indian-based multinational pharmaceutical firms are the leaders in developing generic medications in Mexico and significantly invest in the country (Salas et al. 2020). This depicts a steady growth for CMOs in Mexico and potential return on investment. 

The growth of contract manufacturing is also preferred to get expertise in specific business categories such as active pharmaceutical ingredient (API) manufacturing, which is unavailable in-house. Latin America reports an increasing demand for API and related ingredients. Pharmaceutical products and the CMO market cover API and ingredients, pharmaceutical packaging, and finished dosage according to the product type (CEPAL, 2021). The finished dosage segment accounted for about 85% of the pharmaceutical products market in 2015 and is considered an essential part of analytical research, formulation, pharmacokinetics, and clinical pharmacodynamics and accounts for a significant share of the pharmaceutical market in Latin America. The API and ingredients segment is anticipated to grow at a high rate because of the establishment of major global companies and rising demand for APIs in the region. The API and ingredients also dominated the CMO segment in Latin America 2015, taking up approximately 60%. The segment’s growth is attributed to rising demand for efficiency and cost-saving (Transparency Market Research 2016). The increasing rate of cancer cases in Latin America is also driving the growth of the pharmaceutical product CMO market in the region. According to a report by World Health Organization, Latin America reported 1,044,017 new cancer cases in 2018 (Cazap, 2018).

Competitive Landscape

Latin American pharmaceutical products and CMO market is moving towards a highly fragmented market. The vendors are highly expanding across the region, forming collaborative and strategic initiatives with firms to boost their market share and profits (Kumara Behera & Varma, 2017). Some of the market’s notable developments include the strategic partnership between Catalent and Zumutor Biologics, Inc. for Catalent to manufacture Zumutor’s ZM008 in February 2020. Major players in the industry include Catalent Inc. and Boehringer Ingelheim Group, among others.

However, despite a favorable business environment for pharmaceuticals products and CMO in Latin America, coupled with accelerating growth of the market and low manufacturing cost, among other factors, companies must be wary of skills gaps in the region due to low education. In Latin America, firms do not have the skills needed to meet more than any emerging region (World Economic Forum 2015). The World Bank Enterprise Surveys indicate that 36% of companies in the region cite finding an adequately qualified workforce as a significant problem in Latin America and the Caribbean countries, a figure that is higher than the global average of 21% (Aedo & Walker, 2012). Addressing the skill gaps is fundamental for the productivity of the companies operating or intending to expand in Latin America. The best way to address the skill gaps is through public-private cooperation, working with the government to improve graduate skills (Gasparini, Galiani, Cruces, & Acosta, 2011). Companies require a new mindset to engage in training and education and develop the industry’s workforce, including industry-based training and workshops to bridge the knowledge gap.

Overall, the Latin American pharmaceutical industry is experiencing accelerated growth due to increased foreign investment, an improving regulatory environment, a growing geriatric population, and rising trade deals between Latin America and other countries. The most significant trend in the Latin American pharma market is contract manufacturing organizations (CMO), companies that serve other firms in the pharmaceutical industry on a contract basis. Rising growth in generic product demand alongside the lower government support and lower per capita healthcare spending in most Latin American regions is widening the scope for subcontracting the pharmaceutical manufacturing (CMO) market.


Aedo, C., & Walker, I. (2012). Skills for the 21st Century in Latin America and the Caribbean. World Bank Publications.

Cazap, E. (2018). Breast Cancer in Latin America: a map of the disease in the region. American Society of Clinical Oncology Educational Book38, 451-456.

CEPAL, N. (2021). Development in transition: Concept and measurement proposal for renewed cooperation in Latin America and the Caribbean. Available at: <> [Accessed March 4, 2022].

Finchelstein, D. (2017). The role of the State in the internationalization of Latin American firms. Journal of World Business52(4), 578-590.

Gasparini, L., Galiani, S., Cruces, G., & Acosta, P. (2011). Educational upgrading and returns to skills in Latin America: evidence from a supply-demand framework, 1990-2010. World Bank Policy Research Working Paper, (5921).