Market Size of Latin America Pharmaceutical Contract Manufacturing Organization Industry
Study Period | 2019 - 2029 |
Base Year For Estimation | 2023 |
Market Size (2024) | USD 3.05 Billion |
Market Size (2029) | USD 3.47 Billion |
CAGR (2024 - 2029) | 2.65 % |
Market Concentration | Low |
Major Players*Disclaimer: Major Players sorted in no particular order |
Latin America Pharmaceutical Contract Manufacturing Organization Market Analysis
The Latin America Pharmaceutical Contract Manufacturing Organization Market size is estimated at USD 3.05 billion in 2024, and is expected to reach USD 3.47 billion by 2029, growing at a CAGR of 2.65% during the forecast period (2024-2029).
The low cost of drug registration and the ongoing economic development of Latin American countries are two factors driving the growth of pharmaceuticals in the region. Rising investments in research and development and technological advancements in the pharmaceutical industry boost the contract manufacturing market in Latin America.
- With the increase in the aging population, the prevalence of chronic conditions has also increased, which has boosted pharmaceutical market growth and caused pharmaceutical companies to outsource manufacturing to contract manufacturers in Latin America.
- Pharmaceutical companies outsource production for rapid turnaround time, lowered expenses, and revenue growth. The rising inclination of drug manufacturers to focus on core competencies to grow the company's revenue boosts the market's growth. Also, outsourcing manufacturing can accelerate the drug development process for companies, giving them a competitive advantage in the market.
- According to the Wisconsin Economic Development Corporation, a government agency, Mexico is the second-largest pharmaceutical market in Latin America and is one of the world's top 15 pharma markets. The Mexican market prefers branded over generic products, making it an ideal market for licensing innovative medicines. The Mexican market is attracting more international pharma firms and contract manufacturers due to their government initiatives that have improved the country's competitive edge in research and development (R&D), which is likely to increase the availability and affordability of biosimilar medicines in the country.
- Additionally, investment in innovative research and development (R&D) equipment, the increasing cost of medical insurance and healthcare along with maintaining drug registration policies and low costs of labor, scientists, raw materials, and preclinical and clinical trials involved in the development of new drug products, many international pharma companies have been drawn to outsourcing their research and development activities to contract manufacturers, thus boosting the market's growth.
- However, the current situation discourages investment and presents challenges for PE firms. CMOs that have invested in upgrading their facilities in the past few years are stuck with more expensive debt because variable interest rates have increased for loans. Also, the increasing cost of capital will force companies to limit plans to modernize their plants. This might hinder the market's growth between 2024 and 2029.
Latin America Pharmaceutical Contract Manufacturing Organization Industry Segmentation
The study tracks and analyzes the demand for outsourcing CMO activities within the pharmaceutical industry based on current trends and market dynamics. The market numbers are derived by tracking the revenue generated by the market players who are providing CMO services. This report analyzes the factors based on the prevalent base scenarios, key themes, and end-user vertical-related demand cycles.
The Latin American pharmaceutical contract manufacturing organization Market is Segmented by service type (active pharmaceutical ingredient (API) manufacturing (small molecules, large molecules, and high potency API (HPAPI)), finished dosage formulation (FDF) development and manufacturing (solid dose formulation (tablets and others), liquid dose formulation, and injectable dose formulation), and secondary packaging), and country (Brazil, Mexico, Argentina, and Rest of Latin America). The market sizes and forecasts are provided in terms of value (USD) for all the above segments.
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Latin America Pharmaceutical Contract Manufacturing Organization Market Size Summary
The Latin America Pharmaceutical Contract Manufacturing Organization market is poised for steady growth, driven by factors such as the low cost of drug registration and the region's ongoing economic development. The market benefits from rising investments in research and development, alongside technological advancements that enhance the pharmaceutical industry's capabilities. The increasing prevalence of chronic conditions, coupled with an aging population, has led pharmaceutical companies to outsource manufacturing to contract manufacturers in Latin America. This trend is fueled by the need for rapid turnaround times, cost reduction, and the strategic focus of drug manufacturers on core competencies to drive revenue growth. Mexico, in particular, stands out as a significant player in the region, attracting international pharmaceutical firms due to its favorable market conditions and government initiatives that bolster research and development.
The demand for liquid drug formulations is on the rise, contributing to the market's expansion. This growth is supported by government initiatives in healthcare, innovations in biologics, and the increasing incidence of cancer and age-related disorders. Brazil, as the largest healthcare market in Latin America, is expected to see strong demand due to its changing demographics. The market is also experiencing growth in the development of pediatric-specific dosage forms and the continued use of liquid formulations in nasal and ophthalmic sectors. Despite challenges such as increased capital costs and the need for facility upgrades, the market remains dynamic, with strategic acquisitions and partnerships enhancing the capabilities and reach of key players. The Mexican market, with its low production costs and proximity to the United States, continues to attract global pharmaceutical companies, further driving the growth of contract manufacturing organizations in the region.
Latin America Pharmaceutical Contract Manufacturing Organization Market Size - Table of Contents
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1. MARKET DYNAMICS
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1.1 Market Overview
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1.2 Industry Attractiveness - Porter's Five Forces Analysis
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1.2.1 Bargaining Power of Suppliers
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1.2.2 Bargaining Power of Consumers
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1.2.3 Threat of New Entrants
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1.2.4 Intensity of Competitive Rivalry
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1.2.5 Threat of Substitutes
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1.3 Industry Value Chain Analysis
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1.4 Market Drivers
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1.4.1 Increasing Prevalence of Chronic Diseases
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1.4.2 Low Manufacturing Costs
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1.5 Market Restraints
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1.5.1 Stringent Regulatory Requirements
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1.5.2 Capacity Utilization Issues Affecting the Profitability of CMOs
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2. MARKET SEGMENTATION
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2.1 Service Type
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2.1.1 Active Pharmaceutical Ingredient (API) Manufacturing
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2.1.1.1 Small Molecule
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2.1.1.2 Large Molecule
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2.1.1.3 High Potency API (HPAPI)
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2.1.2 Finished Dosage Formulation (FDF) Development and Manufacturing
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2.1.2.1 Solid Dose Formulation
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2.1.2.1.1 Tablets
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2.1.2.1.2 Others ( Capsules, Powder, etc.)
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2.1.2.2 Liquid Dose Formulation
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2.1.2.3 Injectable Dose Formulation
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2.1.3 Secondary Packaging
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2.2 Country
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2.2.1 Brazil
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2.2.2 Mexico
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2.2.3 Argentina
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Latin America Pharmaceutical Contract Manufacturing Organization Market Size FAQs
How big is the Latin America Pharmaceutical Contract Manufacturing Organization Market?
The Latin America Pharmaceutical Contract Manufacturing Organization Market size is expected to reach USD 3.05 billion in 2024 and grow at a CAGR of 2.65% to reach USD 3.47 billion by 2029.
What is the current Latin America Pharmaceutical Contract Manufacturing Organization Market size?
In 2024, the Latin America Pharmaceutical Contract Manufacturing Organization Market size is expected to reach USD 3.05 billion.
Latin America Pharmaceutical Contract Manufacturing Organization Market Report Snapshots
- Latin America Pharmaceutical Contract Manufacturing Organization Market Size
- Latin America Pharmaceutical Contract Manufacturing Organization Market Share
- Latin America Pharmaceutical Contract Manufacturing Organization Market Trends
- Latin America Pharmaceutical Contract Manufacturing Organization Companies