Latin America has a fast growing healthcare sector and the pharmaceutical industry in the region is likely to witness steady growth during the forecast period of 2016 to 2024. The growth of the pharmaceutical products and CMO market in LATAM is attributed to high foreign investment, a rising geriatric population, an improving regulatory environment, and an increase in trade agreements with other countries such as the U.S., Canada, Japan, and several countries in Europe.
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Most pharmaceutical companies in LATAM are gradually outsourcing manufacturing activities to contract manufacturers in order to achieve cost efficiency, quality, capacity, and time to market. It is also being done to obtain expertise in a particular business category such as API manufacturing and packaging, which is not available in-house. According to Transparency Market Research, the pharmaceutical products and CMO market in Latin America is expected to grow from a value of US$127.9 bn in 2015 and to US$286.2 bn by 2024 at a strong CAGR of 9.3% therein.
Argentina to Present Immensely Lucrative Options for Players
Based on product type, the LATAM pharmaceutical products market is led by the finished dosage form segment, accounting for a share of just under 86% in 2015. This segment is projected to amount to US$244.4 bn by 2024, retaining its lead throughout the forecast period. “The API and ingredients segment, on the other hand, has been witnessing strong growth in Latin America and is projected to register a 9.8% CAGR during the forecast period,” the analyst predicts. The CMO market in Latin America was led by the API and ingredients segment, with the finished dosage form segment registering a high growth rate from 2016 to 2024.
Brazil leads the LATAM pharmaceutical products as well as CMO market in terms of value. Fueled by the growing focus on research, this market is projected to value US$67.3 bn by the end of the forecast period. Argentina, on the other hand, is anticipated to emerge as one of the most lucrative markets by 2024, registering an impressive 11.6% CAGR from 2016 to 2024.
Rising R&D Cuts to Encourage CMO Activities
“Several LATAM countries such as Brazil, Mexico, Peru, and Colombia have been undergoing an improvement in their regulatory frameworks and a more streamlined manner of processes,” the author of the study has observed. The open business environment has attracted multinational pharmaceutical companies and encouraged drug makers to invest in LATAM. Swift drug approvals and a traditional inclination toward free trade has worked in the favor of the healthcare sector in most LATAM countries and this has driven the pharmaceutical products market in the region.