The Latin America pharmaceutical contract manufacturing organization market is expected to register a CAGR of 3.3% during the forecast period 2020 - 2025. Being one of the North American Free Trade Agreement members, Mexico has access to the best established and emerging pharmaceutical markets in North and Latin America. In addition, the Indian pharmaceutical industry is increasing its footprint in Mexico with huge investments, thus driving the growth of the market.
Brazil is the primary recipient of foreign direct investment in Latin America and it is emerging as a global manufacturing hub for pharmaceutical contract companies. Brazil held the second largest market share in the pharmaceutical contract manufacturing market in Latin America, having accounted for 24.9% in 2019.
Due to favorable factors, such as low manufacturing costs and numerous Good Manufacturing Practice (GMP)-certified plants, the pharmaceutical companies are interested in entering the Brazilian market, thereby widening the contract manufacturing industry's scope in the country. Due to lower investments in R&D within the pharmaceutical industry, Brazil is expected to have significant scope for the contract service providers over the forecast period.
Pharmaceutical contract manufacturing has witnessed nominal growth in Argentina. The sales growth has slowed down due to economic deceleration. Despite the country's current economic situation, the pharmaceutical contract manufacturing market witnessed an improved situation over the last few years.
Life expectancy in Chile has increased more than in most other OECD countries over the past few decades, although it is still almost two years below the OECD average. Furthermore, in relation to the pharmaceutical industry, activities in the country are being well conducted, which, in turn, are likely to impact the market for CMO. For instance, in September 2019, India and Chile formed an agreement to allow the drug manufacturing companies in India to participate in the tenders proposed by the Chile government. This will enable Chile to import cheaper drugs from India.
With the outbreak of COVID-19, there is a disruption in the supply chain. As the outbreak has become more widespread, it has become a burden for pharmaceutical plants worldwide to maintain the inventory required for manufacturing, thus creating challenges for the manufacturers.