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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.