Latin America Pharma: Innovate and Simplify for Growth

September has brought confirmations and warnings for the pharmaceutical industry in Latin America. On the one hand, IQVIA's new report, "The Global Use of Medicines 2025: Outlook to 2029," anticipates that Latin America will lead the global growth in volume of drug use over the next five years, with a compound annual rate of more than 2% ("The highest volume growth over the next five years is expected in Latin America,  exceeding 2% compound annual growth"). At the same time, IQVIA highlights a slowdown from the five-year average of close to 5.0% until 2024, which would fall to 2.2% in 2025–2029, mainly due to lower expected economic growth. The regional momentum will be supported by the recovery of sales in Argentina and the strength of the Brazilian market, elements that make up the new competitive map.

The paradox is obvious. While demand projects growth, large multinationals maintain strategies to reduce investment and resources in the region, with outsourcing of operations – and in some cases withdrawals – in Mexico, Central America and South America. Brazil appears as an exception: with a market of around US$17 billion, it retains its status as a strategic enclave for the global industry.

Why, then, is it disinvested in a region with a tailwind in consumption? There are three underlying reasons that explain this gap between potential and real bet:

Regulatory and legal complexity: Harmonizing a strategy for more than 30 countries in Latin America and the Caribbean involves disparate regulatory frameworks, heterogeneous processes, and high compliance costs.

Growing production challenges, exacerbated by protectionist policies from the United States, which hinder operational management and put pressure on costs and deadlines.

Fragilities in distribution: Logistics, cold chain, and geography add layers of risk and complexity to sourcing.

At the same time, the Latin American pharmaceutical industry is going through a profound transformation. The region is beginning to emerge as a strategic player in research, production and development. Digitalization, regulatory changes, demands for equitable access, and advances in biotechnology are reshaping the future of the ecosystem. The question for those of us who operate in the region is as simple as it is decisive: how do we increase Latin America's attractiveness for multinational investment?: Two levers must order the agenda: innovation and simplification of operations in the region.

Open Innovation and New Models

The future of the Latin American pharmaceutical industry will depend, to a large extent, on its ability to innovate in an open and collaborative manner. It is no longer enough to maintain internal research and development structures: the key will be in the co-creation that involves pharmaceutical companies, startups, universities and governments. This approach, known as open innovation, is consolidating itself as the most powerful engine of competitiveness in the sector.

In recent years, inspiring examples have begun to emerge in different countries that illustrate this path:

Digital4Health: A platform that articulates collaboration between companies, startups and public actors, demonstrating how the integration of capabilities accelerates innovation and reduces the time between the laboratory and the patient.

Carlos Slim Foundation (Mexico): Through the Center for Technology and Innovation (CTIN) and the Center for Digital Innovation (CID), it develops care models and technological tools to improve the health of vulnerable populations. Its commitment is focused on innovation, sustainability and replicability.

Sanofi Bogotá Hub: A shared services center that celebrates its third anniversary as a global benchmark in operations management, an example of how the region can host structures with a global impact.

Takeda ICC Mexico: An Innovation Capability Center where digital specialists convert complex data into strategic information, facilitating decision-making and supporting high-impact initiatives.

These cases show that Latin America has the opportunity to reposition itself: to stop being perceived only as a drug-consuming region to become a hub for innovation in health.

The question is no longer whether we can innovate, but how to accelerate and scale these collaboration models to transform the region into a global reference pole.

Simplifying Operations

One of the clearest lessons learned from the post-pandemic period is that Latin America needs to strengthen its productive capacity and ensure the resilience of its supply chains. Shortages of essential medicines and dependence on imports exposed the vulnerability of health systems at critical times.

Faced with this challenge, several countries in the region have begun to implement policies to encourage the domestic manufacture of medicines and promote the arrival of investments in biotechnology, in an effort to ensure health sovereignty and greater autonomy in the face of future crises.

But the real structural challenge goes beyond production: the complexity of regulatory environments. Each country establishes its own regulatory frameworks and approval procedures, which leads to fragmentation and duplication of efforts. The result is that innovation takes longer to reach patients and healthcare professionals.

Some positive signs are beginning to appear. The agreement between COFEPRIS (Mexico) and Anvisa (Brazil) sets an encouraging precedent: it seeks to strengthen regulatory collaboration, streamline the registration of medicines and medical devices, mutually recognize regulatory capacities,  and encourage local production. Such initiatives are a first step towards greater regional integration, which is essential to increase competitiveness.

The consequence of these obstacles is clear: In the space left by large multinationals, large-scale regional companies have emerged that cover most countries and have established themselves as solid alternatives to ensure that innovation reaches all corners of the continent. Examples such as Megalabs, Adium or Avanzia Pharma show that it is possible to build regional players capable of managing complex operations and sustaining a presence in multiple markets.

Regulatory simplification and harmonization, combined with a robust productive ecosystem, will be decisive in making Latin America a more attractive territory for international investment.

Talent Management: The True Competitive Advantage

If there is one thing that distinguishes Latin America from other emerging markets, it is its human capital. In countries such as Mexico, Colombia or Brazil, we find poles of scientific and technical talent that represent an invaluable resource for the health industry. In addition, labor costs, although rising, remain competitive against other regions, reinforcing the region's attractiveness as a home base for innovation hubs and shared services.

However, talent management faces complex challenges that companies must face with a vision of the future:

Shortage of qualified professionals: Demand exceeds supply in profiles with advanced technical competencies and key soft skills such as leadership, resilience and adaptability.

Transforming expectations: New professionals are looking for more than just a competitive salary. They demand purpose, possibilities for growth, and alignment with the company's values.

Hybrid work and organizational culture: Preserving the identity and cohesion of companies in teleworking environments and distributed teams is one of the greatest current challenges.

International labor mobility: Visa limitations and the complexity of moving talent between countries in the region slow down the creation of agile and diverse regional teams.

Leadership development: The region urgently needs to train leaders capable of facing volatile environments, managing the mental health of their teams and guaranteeing well-being as a strategic axis.

These factors explain why Latin America has managed to consolidate itself as a base for services and innovation hubs on a global scale, but they also warn of the need for a comprehensive strategy to attract, retain and develop talent.

In an environment where innovation and digitalization are advancing at a rapid pace, the quality of talent will be the most important differentiator between countries and companies leading the future of health in the region and those lagging behind.

From Receivers to Leaders

Latin America is facing a historic opportunity: to redefine its role in the global pharmaceutical industry. The next few years will be decisive in determining whether the region continues to be seen only as a receiving market or if it manages to position itself as an actor that creates innovation, knowledge and global solutions.

The market offers a favorable context, the scientific ecosystem is growing in maturity and the human talent of the region is increasingly competitive. However, capitalizing on this potential requires a clear strategic vision, based on three pillars: open innovation, regulatory and production simplification, and intelligent talent management.

The leadership of the future in the pharmaceutical industry will not be measured only in the production capacity or the magnitude of investments, but in the ability of companies to collaborate, innovate and generate sustainable value.

Pharmaceutical companies that know how to read this new logic will not only grow at the regional level: they will define the course of healthcare in Latin America in the next decade.