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Study Sees 'Untapped Potential' of Latin American Market

May 9, 2005

A new study of Latin America's drug market prepared by PricewaterhouseCoopers claims that Latin America's drug market holds sizeable "untapped potential" for both R&D and innovative drugs. According to the report, the world's top 10 pharmaceuticals companies account for 42% of sales in Brazil and 47% in Venezuela, against more than 50% in the UK and nearly 60% in the US.

Although the survey acknowledges that China may be a very attractive long-term investment option, the country's per capita drug spending is currently one of the lowest in the world -- far below that in Latin America. Many multinational drug companies have preferred to outsource marketing operations to local specialist firms, guaranteeing greater success. The study also notes that, amid similar outsourcing practices in R&D, the number of clinical trials in the region grew tenfold between 1995 and 2000.

Despite Latin America's frequent political and economic instability, the report's authors argue that leading pharmaceutical companies with global ambitions cannot afford to ignore the region. With solid growth in Mexico and Brazil, Latin America's gateway economies and leading manufacturing bases, the risks associated with entering this market are falling off significantly.