Pharmaceutical Contract Manufacturing & Research Services Market

Report Description

The Latin America pharmaceutical contract manufacturing & research services market size was USD 22.50 Billion in 2022 and is likely to reach USD 42.78 Billion by 2031, expanding at a CAGR of 7.4% during 2023–2031. The growth of the market is attributed to the rising competition of pharmaceutical products, insufficient capital resources, drugs demand shortfall, and patent expiration of drugs.

Contract manufacturing refers to the production of products by the firm using the name or the brand of another firm. The contract manufacturing organization (CMO) provide products to the firm focusing on the requirements of consumer’s designs, formulas, and specifications. A contract research organization (CRO) specializes in providing several research activities for firms that are related to the medical device and pharmaceutical industries.

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The CRO offers research services in several key domains such as pharmacovigilance, biologic assay development, biopharmaceutical development, clinical trial management, preclinical research, and clinical research. Moreover, the organization helps reducing the costs for the firms associated with the developing of drugs and new medicines in the markets. It also offers services to the pharmaceutical industry including from the drug development to manufacturing of the products.

The COVID-19 pandemic outbreak had hampered the regional market as the world witnessed travel restriction, emergency lockdown, and extensive burden on healthcare services.  Moreover, sudden disruption in the supply chain, shutting down of manufacturing units, and shifted focus of the healthcare sector towards control management of COVID-19 spread had negatively impacted the overall market growth.

However, as the pandemic situation increasingly started getting better in several regions and to some extent globally, the market was slowly recovering and started picking up its normal business operations due to rising demand for pharmaceutical drugs for various infectious diseases.

Market Trends, Drivers, Restraints, and Opportunities

• High number of patent expiry of several drugs in the market is a key driving factor of the market and is expected to push the market growth in the coming years.

• Decreased production cost of APIs, increasing price pressure, and rising focus on the cost reduction are the major factor driving the growth of the market.

• Growing change of drug developers’ preference from cost control to value-added solutions, risk sharing between CMOs and pharmaceutical companies, and launch of novel technical facilities, are some major factors driving the market.

• Dynamic changes in the pharmaceutical sector combined with severe burden over the heavy expenses for installation of healthcare infrastructure and technology are key challenges. These factors are expected to act as major restraints to the regional market expansion.

• Rising new novel drugs, high benefits from the outsourcing to the company, reduced burden, and cost-effective method are some of the central factors putting better opportunities for the market development during the projected period.

Scope of Pharmaceutical Contract Manufacturing & Research Services Market Report

The report on the Latin America pharmaceutical contract manufacturing & research services market includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.

Latin America Pharmaceutical Contract Manufacturing & Research Services Market Segment Insights

Manufacturing segment is expected to grow at a rapid pace

Based on services, the Latin America pharmaceutical contract manufacturing & research services market is bifurcated into manufacturing and research. The manufacturing segment is sub-segregated into advanced drug delivery formulations packaging, API/bulk drugs, packaging, and finished dose formulations.

The finished dose formulation segment is further classified as liquid formulations, solid formulations, and semi-solid formulations. The research segment is divided into oncology, neuroscience, vaccines, cardiology, inflammation & immunology, and others.

The manufacturing segment is expected to grow at a rapid pace during the projected period owing to the rising focus for huge number of companies towards outsourcing of production of active pharmaceutical ingredients to finished drug product. The demand for outsourced drugs development is in surge globally due to the scarcity of expertise and limited capacity of the existing production units.

The outsourcing gives advantages to the firms in the form of reduced cost of production, less use of resources, and good quality products. This is why, the demand for contract manufacturing is increasing.

The research segment, however, is anticipated to register a fast growth rate in the near future especially due to decrease in clinical testing cost and rapid expansion of clinical testing procedures due to wide research programs.  

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Brazil is anticipated to constitute a key market share

In terms of geography, the Latin America pharmaceutical contract manufacturing & research services market is classified as Brazil, Mexico, Chile, Venezuela, and Rest of Latin America. Brazil is anticipated to constitute a key market share during the forecast period owing to the rising biotechnology firms in north-eastern part of the country.

Furthermore, the presence of large number of GMP-certified plants in the country along with small manufacturing costs are appealing the investors from different regions to launch their firms in this country.

Additionally, surge in pharmaceutical spending supports the development of more advanced healthcare systems in the country. In recent time, Brazil has unveiled one of the largest universal healthcare systems in the world - the Sistema Único de Saúde for advancing the healthcare system in the country. This is estimated to propel the growth of pharmaceutical industry in Brazil.

The market of Mexico, however, is expected to grow at a substantial rate during the forecast period due to growing number of drug manufacturing units in the country. Mexico is the second-largest market in Latin America for pharmaceutical contract manufacturing. With growing sales of generics as well as number of generic drugs, the contract manufacturing market is growing rapidly in the country.