Growing Mexico Is Home to Solid CMO Population
Proximity to the US, a strong regulatory scheme, affordability and decades-long relationships forged with the help of the North American Free Trade Agreement (NAFTA) are among the factors that may make Mexico an attractive location for contract manufacturing services, particularly for products sold in the US or Latin American markets. The country is also fairly well-populated with Contract Manufacturing Organizations (CMOs) that already have experience producing drugs to meet the regulatory requirements of the US and other nations.
According to a May 2016 report by PharmSource’s colleagues at GlobalData, the Mexican pharmaceutical market is forecast to grow to $29.4 billion by 2020, up from $19.4 billion in 2015, at a CAGR of 8.7%. This is largely due to an improved and updated regulatory environment, a broad population base and government initiatives in the public healthcare sector, including reforms in the public health insurance system.
The GlobalData report noted that Mexico is also the main Latin American exporter of pharma products, with $5.1 billion of exports in 2015. Of that amount, 23.1% went to Switzerland, 22.4% to the US, 7.8% to Panama, 6.5% to Venezuela and 5.6% to Colombia.
Overall growth in foreign direct investment (FDI) has also helped the pharma sector in Mexico. In 2015, the pharma sector in Mexico received $23.5 billion in FDI, with the US, Luxembourg, Ireland, Canada and Japan the biggest investors, according to the GlobalData report. Estimates for 2012 put that figure at $982 million.
This article is reprinted from the June issue of Emerging Markets Outsourcing Report. The full article addresses the CMO market opportunity in the Mexican pharmaceutical market. To learn more, click here.