Latin America Pharmaceutical Contract Manufacturing & Research Services Market Size, Share & Trends Analysis Report By Services (Manufacturing, Research), By Country (Chile, Brazil), And Segment Forecasts, 2023 - 2030

Report Overview

The Latin America pharmaceutical contract manufacturing & research services market size was valued at USD 22.5 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 7.4% from 2023 to 2030. Drug shortfall, tighter budgets, rising competition, patent expiration, and insufficient resources are some of the major factors boosting market growth. The time- and cost-saving benefits associated with the implementation of outsourcing are contributing to market growth. The key players are consistently capitalizing on technology, infrastructure, and personnel to gain a bigger share of the outsourcing revenue. Mexico has implemented a comprehensive regulatory framework to govern pharmaceutical contract manufacturing and research services.

The Federal Commission for Protection against Sanitary Risks (COFEPRIS) is the primary regulatory authority responsible for overseeing these activities. Intellectual property protection is a crucial aspect of the regulatory framework. Mexico has implemented intellectual property laws in line with international standards to safeguard innovations in the pharmaceutical industry. The Industrial Property Law and the Patent Law provide legal protections and incentives for research and development. Furthermore, import and export regulations, overseen by COFEPRIS and the Mexican Tax Administration Services (SAT), ensure compliance with customs procedures, licensing, and documentation requirements for the smooth flow of materials, products, and samples.

Biopharmaceutical manufacturing is recognized as a leading sector in terms of growth potential. Many healthcare entities believe that this sector would be one of the top 10 revenue generators in the coming years. Moreover, the market players are making continuous efforts for the development of this sector to meet the increasing demand for bio-based pharmaceuticals, which, in turn, is anticipated to result in a surge of CMOs for biopharmaceutical production. This healthy growth of biopharmaceuticals has resulted in the development of a large service pipeline. Understanding the cost-effectiveness associated with contract manufacturing, many firms have begun to outsource parts of their biopharmaceutical manufacturing to contract manufacturers.

Furthermore, in-house R&D at biopharmaceutical majors is no longer the sole source of successful innovation in the industry, with novel molecules discovered by small- to mid-capital companies before being acquired by established players. As a consequence, CROs have increasingly begun to highlight contract wins with such smaller biotech entities as an important driver of sustainability in volumes. Latin American companies are enhancing their global market presence by putting efforts into the modification and expansion of domestic specialty manufacturing facilities as well as focusing on worldwide partnerships. On the other hand, the expansion of international and well-established companies, such as Thermo Fisher Scientific Inc. (PPD) and IQVIA, Inc., in countries like Brazil, Mexico, Argentina, and Chile is expected to fuel market growth in the region. These countries are perceived to have great potential for pharmaceutical development.

Services Insights

The manufacturing segment dominated the industry with a revenue share of 66.2% in 2022. Based on services, the market is segmented into manufacturing and research. Contract manufacturing services comprise the solutions and facilities for the manufacture of API/bulk drugs, advanced drug delivery formulations, packaging, and finished dose formulations. These services accounted for the largest share in 2022, in terms of revenue generation, as a large number of global companies are seeking the outsourcing of therapeutic development from the production of drug substances (APIs) to finished drug products due to limited capacity and lack of expertise.

The contract research services segment is anticipated to register the fastest growth rate of 7.5% during the forecast period. One of the major factors driving the growth of this segment includes the clinical testing cost requirement that has skyrocketed in the past few years, and the overall cost is anticipated to increase by a few billion dollars every year. Consequentially, this compels pharmaceutical companies to outsource the clinical research aspects of drug development.

Country Insight

Brazil accounted for the largest revenue share of 69.4% in 2022. Factors driving the market in the country include the rapidly developing biotechnology hub in the northeastern region of the country. Moreover, the low manufacturing costs of pharmaceuticals and the presence of a significant number of Goods & Manufacturing Practices (GMP)-certified plants are attracting investors from other countries to establish their presence in Brazil. This, in turn, is expected to have a positive impact on the market for pharmaceutical contract manufacturing & research services in Latin America.

Mexico is anticipated to register the second-fastest growth rate of 7.5% during the forecast period. This growth can be attributed to the goal of transforming Mexico into an innovation-driven country, of which, the pharmaceutical industry is one of the major sectors. Current government's goal to enhance the Mexican market as a cost-competitive manufacturing hub is anticipated to revolutionize the market growth in this country in the coming years.

Key Companies & Market Share Insights

Key market players are undertaking various strategic initiatives, such as the signing of the new partnership agreement, collaborations, mergers, acquisitions, and geographic expansions, to strengthen their industry presence, thus providing a competitive advantage. For instance, in December 2021, Samsung Biologics and AstraZeneca formed an agreement to manufacture Evusheld, which is an amalgamation of binary antibodies in development for the potential treatment of COVID-19. These factors are promoting the demand for CMOs and CROs in Latin American countries. The initiatives to decrease the commodity prices are expected to improve the region’s economic growth thereby boosting the revenue generation in the outsourcing market for pharmaceutical development. Some of the prominent players in the Latin America pharmaceutical contract manufacturing & research services market are:

• Boehringer Ingelheim International GmbH

• Fresenius Kabi AG

• Unither Pharmaceuticals

• Lonza

• Pfizer Inc.

• Charles River Laboratories

• Laboratory Corporation of America Holdings

• IQVIA, Inc.

• Recipharm AB.

• AbbVie, Inc.

• Catalent, Inc.

• West Pharmaceutical Services, Inc.

Latin America Pharmaceutical Contract Manufacturing & Research Services Market Report Scope

Latin America Pharmaceutical Contract Manufacturing & Research Services Market Segmentation

This report forecasts revenue growth and provides an analysis of the latest trends in each of the sub-segments from 2018 to 2030. For this report, Grand View Research has segmented the Latin America pharmaceutical contract manufacturing & research services market based on services, and country:

• Services Outlook (Revenue, USD Billion, 2018 - 2030)

  • Manufacturing

  • Research

• Country Outlook (Revenue, USD Billion, 2018 - 2030)

  • Brazil

  • Mexico

  • Argentina

  • Colombia

  • Chile

  • Venezuela

  • Peru

  • Uruguay

  • Ecuador

  • Bolivia