Developing markets have been a source of interest to pharmaceutical companies for decades and it is not a revelation that the developing markets of Latin America, in particular, have been growing in importance over the years. Indeed, the attractiveness of this region has become more and more apparent as the governments of these countries have taken great strides in developing a more robust market for the pharmaceutical industry. As the regulatory framework has evolved in this region, so too has its appeal.
As economic instability spread across much of the world last year, the Latin American pharmaceutical markets remained largely insulated from the worst of it, thanks in no small part, to less exposure to credit-squeeze fundamentals and conditions ripe for outsourcing. Indeed, by many accounts the pharmaceutical industry is blossoming in that region, spurred by a number of factors.
With a population of over 500 million people, the sheer size of the market makes it too large to be ignored. According to one projection by the United Nations, the overall population in this region is expected to grow about 23% over the next 20 years, to about 623 million. Moreover, there has been a steady period of double-digit growth of the pharmaceutical market in Latin America (Figure 1), and the total market growth rate in the individual countries of the region are expected to continue with double-digit growth as well (Figure 2).
The region is also attractive for its competitive costs, convenient time zone with respect to interacting with the U.S. and Europe, and quality standards comparable to other traditional research markets. With approximately 50% of pharmaceutical industry growth by 2020 expected to come from emerging regions, 15–18% of this growth will be attributed to Latin America.
To take clinical trials as an example of pharmaceutical industry activity, according to statistics put out by clinicaltrials.gov in 2009, over 4,000 clinical trials were conducted in Latin America. It is worth noting that the saturation of clinical trial sites in Latin America as compared to the U.S. and Western Europe stands in stark contrast: the number of clinical trial sites per million in Latin America was 2, as compared to 82 in the U.S. and 11 in Western Europe.
Such lack of saturation in the region, coupled with high enrollment rates and growing regulations, make the growth of clinical trials in Latin America likely to continue all that much more in the future. However, while the clinical trial application process in Latin America is seemingly straightforward, the process is not without its land mines.
Today, the majority of the countries in the region have local regulations aligned with the Declaration of Helsinki, Council for International Organizations of Medical Sciences, and International Conference on Harmonization-Good Clinical Practice (ICH-GCP) guidelines, and all of these countries have a regulatory agency responsible for pharmaceuticals, medical devices, and clinical research. However, at the regional level, despite efforts by Mercado Comun del Sur, regional pharmaceutical regulatory implementation has not kept pace with national developments.
As a result, there are still different levels of regulatory sophistication in the region. The extent to which a given regulatory framework has evolved, and the corresponding infrastructure in the pharmaceutical industry that is in place, varies country to country within Latin America.
Although Latin America, as a whole, provides numerous business opportunities, such as conducting clinical trials or manufacturing drugs, six countries in the region are of particular interest: Brazil, Mexico, Colombia, Peru, Chile, and Argentina. These six countries represent over two-thirds of the population in Latin America and account for approximately 70% of the clinical trials there.
While these countries share some common regional characteristics, it is important to be sensitive to the differences that exist among them as well. The remainder of this article seeks to address these differences, while highlighting the opportunities and challenges in three of these markets in particular, Brazil, Mexico, and Colombia.