A Vision for Latin America
Over the last decade Latin America has undergone several changes that have affected the health industry in the region significantly. With a population of approximately 500 million, spread over several countries, and a GDP of $5.2 Tn, Latin America has a pharmaceutical market of $70 Bn and a Medical Devices market of about $10 Bn, both growing steadily. This growth has been generated to a large extent by the economic boom in the region. Countries such as Brazil, Chile, Argentina, Colombia and Peru have experienced strong growth in the healthcare sector, driven by their growing economies. The growth of these economies has meant that increasing numbers of people have access to healthcare. Many governments had stimulated investment in healthcare, leading to the construction of more hospitals and clinics, with a consequent growth in treatments.
In parallel, the regulatory and reimbursement processes in the US and Europe are becoming more complex demanding, and consequently companies are taking longer to obtain approvals for use of their products. If coupled with the current economic crisis facing much of the Western economies it is not surprising that health companies are looking to new horizons to generate their growth.
Latin America, together with Asia, is increasingly looked at as a solution for generating growth and the result is that the region figures much higher in the priority lists of companies when it is time to think about market launches. This is reflected in the business mix today. A decade ago many companies expected Latin America to represent a small share of global business. Today that proportion is increasingly larger, with an expectation of decent growth.
Latin America, however, is not a single market, and this is where the challenges begin. For example, each country has its own regulatory requirements, and companies must make separate presentations in each country. The requirements, although converging, do differ, and the timing is increasingly disparate, something which has a profound implication on market prioritisation and launch timing, and this impacts the degree of preparation required before launch. Once regulatory approval has been obtained the next challenge is to get products used by customers. It is critical for a company to ensure that customers not only receive the products that they require, but that the appropriate marketing, communications and product adoption strategies are in place in order to generate real business, in each country. This has to be considered in a commercial and competitive context for each country, as well as very differing political and economic contexts which can vary significantly in time, as well.
Being competitive in the Latin American markets therefore not only relies having customer access, but also the ability to deal with disparate and varying local contexts, with a high degree of compliance, in a competitive environment. Detailed and reliable local market knowledge is critical in order to get this right, but it is not enough. This poses a major challenge for the small and medium sized companies in the Health sector. Local companies are increasingly aware of this and are consequently focusing their strategic effort on offering a local “one-stop shop” solution for product distribution and marketing, and some are moving away from the old model of manufacturing their own locally competitive products.
As new products target more specialised markets, we can expect that there will be more local companies specialising in what they are good – accessing and managing Latin American markets – and providing a much need service to small and medium, health companies with fewer headaches. Whilst this is more developed in the pharmaceutical market, there is plenty of scope for expansion and we expect this to extend itself into other areas.