Pharma Seizes Latin American Opportunities

Approximately $12.7 billion has been invested in Latin America’s (LATAM’s) pharmaceutical market through mergers and acquisitions (M&As) in recent years. And with untapped potential identified in countries across the region, companies are expected to seize upon further opportunities to drive future growth, says a new report from GlobalData.

According to the report, the number of M&As completed in the region increased by 214% between 2008 and 2012, and accounted for the majority of the region’s total deals during this period.

“M&As in this region have mainly consisted of global pharma firms acquiring local companies…” says Aparna Krishnan, GlobalData’s Analyst covering Healthcare Industry Dynamics. “The largest deal that took place between 2008 and 2012 was UnitedHealth’s acquisition of Brazil’s Amil Particapacoes in 2012, which cost the US-based firm a massive $4.9 billion.”

In terms of therapeutic areas, the LATAM region’s oncology sector saw the most significant number of deals between 2008 and 2012 - 120 in total. The high level of investment comes in response to recent studies, which depict a rise in incidence levels and mortality rates that LATAM’s current health systems are unable to handle adequately, says GlobalData. The region’s governments have increased investments in disease surveillance and embarked on preventive campaigns.

However, there are barriers for companies looking to capitalise on LATAM’s opportunities.

“In addition to unstable political conditions standing in the way of markets such as Cuba and Venezuela, various sectoral challenges, including intellectual property rights and the intense impact of a high-volume, small margin-based generics market, are also proving a hindrance,” says Krishnan. “Nevertheless, thanks to low-cost drug manufacturing and clinical trial opportunities, pharma firms will continue to benefit from having a presence in the region.”