KOTRA "Let's Seize the Latin American Pharmaceutical Market Changed by COVID-19"

[Asia Economy Reporter Suyeon Woo] KOTRA published a report on the 7th that examines the overall pharmaceutical industry trends in six major Latin American countries (Mexico, Brazil, Chile, Peru, Colombia, Argentina) and presents entry strategies for Korean companies.

Through this report titled 'Latin America Pharmaceutical Industry and Entry Strategies for Korean Companies,' Korean companies can obtain useful information on certifications, government policies, and production status necessary for entering the Latin American market, where health-related interest has increased after COVID-19. The report is available for free download on the overseas market website.

Kim Ki-jung, Head of KOTRA's Latin America Regional Headquarters, said, "This report will provide practical help for Korean companies entering the Latin American pharmaceutical industry," adding, "KOTRA will actively support our companies to successfully enter the market through various marketing projects."

◆ Brazil, the largest pharmaceutical market in Latin America= According to the Brazilian Pharmaceutical Industry Association (SINDUSFARMA), Brazil's pharmaceutical market ranked 7th worldwide as of 2019 and is the largest in Latin America. It is expected to rise to 5th place globally by 2023. However, recently, Brazil's economic situation has worsened with a sharp increase in unemployment and a decline in income levels, leading to reduced consumer purchasing power. Consequently, pharmaceutical expenditures have also decreased, and there is a growing preference for generic drugs (copies of original products whose patents have expired) due to their lower prices.

◆ Mexico, the 2nd largest pharmaceutical market in Latin America= According to global market research firm Fitch Solutions, as of the first quarter of this year, Mexico's pharmaceutical market ranks second in Latin America after Brazil. The Mexican government has allocated approximately $33.2 billion for the health sector this year, a 1.8% increase from the previous year, striving for industry growth. Thanks to low production costs and the advantage of simultaneously targeting North and South American markets, 20 global pharmaceutical companies, including Bayer, Pfizer, and Novartis, have entered Mexico.

◆ Chile, increasing medical expenditure and the Korea-Chile FTA as opportunity factors= Although Chile's pharmaceutical market is relatively small, the average per capita medical expenditure ranks among the top in Latin America due to the recent increase in chronic diseases. Chile boasts the most stable policy environment and an open economy among Latin American countries, attracting many multinational pharmaceutical companies. While Chile's general tariff rate is 6%, Korea enjoys tariff-free benefits on pharmaceutical exports under the Korea-Chile FTA.

◆ Peru, actively utilizing the advantage of tariff-free benefits= Interest in health has increased due to the prolonged COVID-19 pandemic, and Peru's pharmaceutical market is expected to grow by about 3% in 2021 compared to the previous year. Recently, due to the worsening COVID-19 situation, domestic factory operations have been reduced or halted, decreasing domestic pharmaceutical production and increasing dependence on imported medicines. Peru's pharmaceutical tariff rate is 6%, but a 0% tariff rate is temporarily applied to medicines, supplies, and medical devices necessary for COVID-19 prevention.

◆ Colombia, with rising income and expanding middle class, experiencing rapid pharmaceutical market growth= Due to the expansion of the middle class from recent income increases, Colombia's per capita pharmaceutical consumption is expected to rise from $89.5 in 2020 to $122.1 in 2025. Colombia's general pharmaceutical tariff rate ranges from 5% to 10%, but under the Korea-Colombia FTA, some pharmaceuticals receive tariff-free benefits. For pharmaceuticals excluded from immediate tariff elimination, gradual removal is planned by 2022 according to the concession type.

◆ Argentina's pharmaceutical market continues to grow despite economic difficulties= Argentina's pharmaceutical market is estimated to have grown to $9.71 billion in 2020, driven by an increase in non-communicable diseases, an aging population, and a surge in demand due to COVID-19. The Argentine government provides free medical care to those without social security insurance and with insufficient purchasing power and is working to improve domestic production capacity through cooperation with foreign pharmaceutical companies. Meanwhile, Argentina is the first Latin American country to locally produce the Russian vaccine Sputnik V.

This content was produced with the assistance of AI translation services.