A vibrant and diverse continent, home to over 650 million people and the highest life expectancy among developing regions, Latin America is now emerging as a globally relevant life sciences investment destination. LatAm has a robust heritage of scientific achievement – Bernardo Houssay (1947) and César Milstein (1984) of Argentina and Baruj Benacerraf of Venezuela (1980) are all former winners of the Nobel Prize in Physiology or Medicine – and today accounts for a full ten percent of the world’s clinical trials.
Moreover, the USD 98 billion LatAm pharma market is still set to be the world’s fastest growing over the next few years. IQVIA estimates that the market will expand at a compound annual growth rate of 10.1 percent up to 2025, well above both developed markets like North America (3.1 percent) and Europe (3.9 percent) as well as other developing regions like Africa (6.5 percent) and the Indian subcontinent (9.4 percent).
However, the idiosyncrasies of Latin American politics mean that governments in the region often flip from right to left wing between administrations, frequently contributing to dramatic changes in policy direction as well as high levels of inflation. In the context of a global economy still reeling from the aftereffects of the COVID-19 pandemic and buffeted by the high energy and food costs brought about by the ongoing war in Ukraine, this is a particularly striking concern.
Indeed, Deloitte warns that advanced economies aiming to rein in inflation via aggressive monetary tightening in 2023 could lead to higher borrowing costs and a more expensive dollar, deepening LatAm’s inflation problems and naturally having an impact on the growth potential of its life sciences and healthcare industries.
The growth opportunities for multinationals in LatAm are myriad and varied, as Roche LatAm Area Head Rolf Hoenger explains. “Our entire portfolio is present here and while there are differing income levels across LatAm, most countries have relatively developed health systems. This creates opportunities to work with national governments to bring our innovations to patients in our key therapeutic areas of oncology, haemophilia, haematology, multiple sclerosis, ophthalmology, Alzheimer’s, and rare diseases.” Novo Nordisk SVP LatAm Allan Finkel adds that “While LatAm is not the company’s largest region in terms of sales, we are the fastest growing across all international operations.”
While LatAm is not the company’s largest region in terms of sales, we are the fastest growing across all international operations
Allan Finkel, Novo Nordisk
A similar tale is true for medtech giant Medtronic, as the company’s SVP and President for Canada and Latin America Hugo F. Villegas outlines. “LatAm’s contribution to Medtronic’s global growth in revenues and profits has been recognised by both our current and former CEOs, who take a keen interest in our work here. They understand the significant opportunities around expanding access to our technologies in LatAm, where around one third of people lack access to healthcare or healthcare technology. These opportunities cover both improving patients’ lives and boosting the business itself. We grew by 24 percent last fiscal year, while the company overall grew by single digits, and this year will bring more of the same.”
Patrick Doyle, now head of global commercial development, but formerly regional president for Latin America at Viatris adds that “Latin America is a critical region and part of the emerging markets that can contribute to business growth, but also offer talent and diversity. In the diversity of markets, businesses, opportunities and challenges across Latin America, I see an enormous pool of capable people who can be guided and developed into being the best and most effective leaders that can contribute to achieving our goals.”
For generics behemoth TEVA, LatAm is able to serve as a testing ground for new initiatives that can then be rolled out in other geographies. “Latin America offers companies the opportunity to perform well and generates excellent performance examples to showcase around the world,” highlights Rodrigo Fernandez, VP LatAm cluster and GM Mexico. “We have a couple of very good showcase examples of e-commerce in Mexico and Chile that are leveraging the case for that globally and there is Austedo in Brazil, which is the third or fourth market in the world to launch the drug apart from the US and China.”
No Plain Sailing
As might be expected, the picture is not entirely rosy, with uneven levels of healthcare funding a particular concern. “The Pan American Health Organization (PAHO) recommends that each country invests around six percent of their GDP on public health, but the regional average is still well under this benchmark,” states Hoenger. “This level of underfunding creates issues not only around access to innovation, but also the provision of basic care.”
FIFARMA Executive Director Yaneth Giha expands on the region’s key healthcare challenges. “In addition to the insufficient level of public health expenditure in the region, there is also insufficient healthcare capacity. This covers everything from doctors to nurses, intensive care units (ICUs), and digital health capabilities. During the COVID-19 pandemic, this lack of digital infrastructure was laid bare and those living outside of cities found it much more difficult to access care. Argentina is our region’s best performer on this front, followed by Brazil, but there is still a lot of work to be done in other countries. These indicators show that Latam was not well prepared for the pandemic.”
Giha continues, “The final challenge is related to patient access to innovation. As the IQVIA WAIT Indicator shows that the average delay between marketing authorization and patient access varies between 1.5 years and more than 3.5 years. For example, it takes around 1,294 days in countries like Colombia and 941 days in Argentina for new innovations to get approved, registered, and made available to patients following approval from the US Food & Drug Administration (FDA) or European Medicines Agency (EMA).”
LatAm’s unfortunate reputation for political and economic volatility has significant knock-on effects for healthcare organisations operating on the continent, as Boehringer Ingelheim’s Managing Director for South America Dirk von Niekerk explains.
“Since 2020 we have had to deal with the COVID-19, but this was preceded by serious political instability in most countries in South America and a change in government in Argentina at the end of 2019,” he notes. “This was followed by the conflict in Europe combined with the elections of new governments in, Chile, Peru, Ecuador, and Colombia. The combination of this series of events has brought with it significant pressure on the economic stability of the region, as can be seen by significant rises in inflation and devaluation of local currencies in most countries.”
There are certain things in Latin America that help us have a consistency which goes above political circumstances … Countries can switch from left to right and back but there are certain fundamental institutions that remain consistent over the long term
Luis Arosemena, GSK
With several countries shifting towards the left and aiming to implement more universal healthcare systems, von Niekerk cautions that such a monumental process cannot happen overnight. “With many new governments in the region, we also expect to see changes to the healthcare environment in many of our countries,” he adds. “Based on my experience in South Africa the creation of a national health system is more difficult than one would think and could potentially take a significant number of years to complete, creating a lot of uncertainty in the process.”
In terms of dealing with these challenges, GSK’s SVP Emerging Markets Luis Arosemena highlights the consistency of the institutions that remain in place – regardless of the administration in government – and how life science companies are able to work with them. “There are certain things in Latin America that help us have a consistency which goes above political circumstances,” opines Arosemena. “Countries can switch from left to right and back but there are certain fundamental institutions that remain consistent over the long term.”
“This happens in Argentina, for example, where inflation and devaluation often take the headlines, but we know that the country’s healthcare system is quite mature and developed. Of course, you need to be alert and ready to act which is why the role of general managers is key. If you have a sound portfolio of products and reach patients, you are creating a sustainable solution that will help the system navigate short-term variability.”
Flexibility is the name of the game for Sandra Ramirez, Latin America lead for Astellas Pharma. “Our purpose is to work in alliance with the different governments, independent of their political ideology, identifying the best way to create alliances, keeping in mind that the priority is the patient,” she says. “We are always open to evaluating different models to ensure access, adapting to the conditions of the market, its regulatory context, and the financial context of the country.”
Novo Nordisk’s Allan Finkel strikes a similar tune. He adds, “there are things that we can change and things we cannot. Volatility is one of the things that you cannot, meaning that we need to find ways to perform in a volatile environment. I was born and raised in Brazil and so I have experienced this volatility all my life, understanding the need to adapt. Volatility also creates opportunities for growth and teaches our teams to be flexible, experimental, and creative. For this reason, professionals who have experience working in LatAm often perform very well in other geographies.”
Despite the uncertainty of these markets – due to inflation, political issues or even social ones – these challenges are what make us stronger and perform better
Dagoberto Cortés Cervantes, Sanfer
The region’s network of local pharma manufacturers, many of which have expanded beyond their own nation’s borders in recent years, must also operate in this volatile context. This leads to a need for adaptation and resilience in the eyes of Dagoberto Cortés Cervantes, director of Grupo Sanfer, which today draws 39 percent of its revenues from outside its home country of Mexico.
“The macroeconomic, political and social variables, as well as the exchange rate volatility, do affect conditions in the region, so we are extremely careful with investments, and we always look for local financial leverage to make the operation robust and be ready to solve any unplanned situations. We consider the special needs of each country and look to build a portfolio of products and services that are tailored to local needs.”
Cortés Cervantes continues, “Another aspect is resilience and despite the uncertainty of these markets – due to inflation, political issues or even social ones – these challenges are what make us stronger and perform better. We have pushed ourselves and hit the targets we have set, even outgrowing our own goals and expectations, proving that different or difficult is still possible, you just need to think outside of the box to make an impact. We are more resilient having faced challenges head-on instead of focusing on all the negative outcomes. It is a mindset that says if you accomplish this, you can accomplish anything.”
Market Access: Two Steps Forward, One Step Back?
While significant progress has been made in recent years in some Latin American countries around earlier market access for innovative products others seem to have regressed and are facing huge product registration, reimbursement, and rollout backlogs. Indeed, a recent FIFARMA/IQVIA study showed that patients in Argentina and Colombia are waiting 900 days and those in Peru over 1000 days to access new medicines following US Food & Drug Administration (FDA) or European Medicines Agency (EMA) approval.
Early access is a key industry concern the world over, not only to allow patients to receive potentially lifesaving treatments that may not have a suitable alternative, but also to maximise revenues in the period where new products are patent protected.
There are great examples of countries in LatAm where the doors are open to productive dialogue around innovation and there is full alignment on the need to provide more and better patient access
Florencia Davel, BMS
The market access scenario in LatAm is, in the words of BMS VP, General Manager LatAm & Local Representatives Center of Excellence Florencia Davel, “a mixed bag.” She explains that “There are great examples of countries in LatAm where the doors are open to productive dialogue around innovation and there is full alignment on the need to provide more and better patient access. The challenges we must face depend on the market and cover not only discussions around products being commercialised but also clinical trials. Greater clinical trial numbers will lead to faster innovation adoption and greater inward investment, which is firmly in line with the stated agendas of most LatAm governments. There has been good progress on this front in Mexico, Colombia, Argentina, and Chile for example, although we are still struggling in markets such as Peru.”
Davel adds, “Empathetic dialogue and an understanding of our shared goals, and the value that innovation brings to health systems are critical, as is facilitating enabling infrastructure, creating better access to institutions, and fostering a holistic view of diseases from prevention to diagnosis and treatment. Moreover, we work with governments to help them understand the pharma industry’s impact on productivity and employment; for every industry employee, we generate indirect employment of around 1.7, almost doubling the employment rate.”
AbbVie LatAm VP Flavio Devoto takes a similar tack, highlighting both the successes and enduring challenges of getting innovation to patients in his region. “You have to see both sides of the coin,” he cautions. “On the positive side, LatAm has improved a lot in terms of access over the past 20 years and many countries – such as Brazil – have now enshrined healthcare as a right in their constitutions. However, healthcare systems and the roles played by the public and private sectors differ significantly between countries in the region, creating varying challenges. Nevertheless, LatAm has improved access thanks to the alignment of different stakeholders with patients and the public now having a much stronger voice than before, which can only be a positive.”
“On the more challenging side, many patients in LatAm still must wait a long time to access innovation post-approval. We have seen improvements in some countries, but significant delays remain due to bureaucracy and cost-containment measures. Some systems are not set up to address the speed of innovation. Every year, new medications and new diagnostic tools come online, so preparations need to be made to ensure that these innovations are made available to the patient and affordable to the system.”
Roshel Jayasundera, managing partner at Axios International unpacks the situation. “LatAm has a mix of high-, middle-, and lower-income markets, which presents varied challenges,” she begins. “Within each country, there are public sectors – often with varying levels of social insurance coverage – and the private sectors – either paid for fully out-of-pocket or via insurance. For patients, this fragmentation and diverse options mean understanding which bracket they fit into and whether a medication is available to them is not straightforward. Moreover, being able to see a doctor immediately or having to wait six months could be life-changing for a cancer patient.”
LatAm has improved access thanks to the alignment of different stakeholders with patients and the public now having a much stronger voice than before, which can only be a positive
Flavio Devoto, AbbVie
Others, such as Novo Nordisk’s Allan Finkel, are much more positive, especially about the situation in his home country of Brazil. He claims that “We are quite happy with the speed at which products are approved here. Regulatory agencies across LatAm are improving a lot and in Brazil, for example, we are now able to launch products almost simultaneously with Europe and the US. Similar timeframes are emerging in countries like Argentina, Colombia, and Mexico. The stereotype that LatAm takes a longer time than other regions to incorporate new products is no longer true, and there is real stakeholder willingness to bring innovation to market as soon as possible.”
GSK Brazil Country Manager Andre Vivan da Silva adds that “Compared to my experiences in other countries, the regulatory agency in Brazil is quite advanced. To give you an example, there is a project here for oncology through which Brazil’s Health Regulatory Agency (ANVISA) and the US FDA have connected with respect to timing. There is a fast track for oncology drugs, so as soon as the FDA approves a drug, ANVISA can then approve it in a matter of weeks. This is a real example of ANVISA being timely.”
Alignment and Reliance
Regulatory reliance or alignment, whereby the national regulatory authority in one jurisdiction considers and gives significant weight to assessments performed by another national regulatory authority or trusted institution in reaching its own decision, could be crucial to solving some of the access barriers in LatAm.
While a fully-fledged regulatory alignment system is not yet in place, Finkel is confident that “this much-discussed topic will soon become a reality, further bolstering approval speeds.” Roche’s Rolf Hoenger adds that “While there might not be much external noise on this topic, there is a lot happening beneath the surface. These are specialised discussions with regulatory authorities and perhaps not as headline-grabbing as some of our other efforts. However, we have had some spectacular success around regulatory reliance, especially in Mexico and some of the Central American countries.”
We have seen some great achievements in LatAm, such as the Brazilian regulator ANVISA’s participation in Project Orbis, a programme which provides a framework for the concurrent submission and review of innovative oncology products among international partners
Sarah Aiosa, MSD
Making an international comparison, MSD’s SVP and LatAm President Sarah Aiosa notes that “One significant challenge in LatAm is the lack of a central regulatory body like the European Medicines Agency (EMA) in Europe. However, we have seen some great achievements in LatAm, such as the Brazilian regulator ANVISA’s participation in Project Orbis, a programme which provides a framework for the concurrent submission and review of innovative oncology products among international partners. I am excited to see how the learnings from pilot projects such as this can be scaled up elsewhere.”
FIFARMA’s Yaneth Giha expands that “Many of the national agencies in LatAm have shown good progress in the last few years. ANVISA of Brazil is still the leading agency in the region, thanks to its openness, ability to work with other stakeholders, and awareness of global industry trends. Argentina’s ANMAT has also made some significant steps forward in the last few years. However, there is room for improvement at INVIMA (Colombia) and COFEPRIS (Mexico). This represents a fantastic learning and growth opportunity, in areas such as regulatory reliance and good regulatory practices.”
Clinical Trials: A Seismic Opportunity
With drug research and development now a more global process than ever, industry sponsors are increasingly looking to integrate a more diverse patient pool in their clinical research efforts. Subsequently, Latin America – which has numerous selling points as a clinical trials destination – could be set to assume an even greater role in global clinical research.
As contract research organisation ICON points out, LatAm performs strongly on several clinical trial indicators, including patient access, with over 600 million inhabitants and an 80 percent urban population providing patient concentrations for stronger enrolment. Moreover, cardiovascular, arthritis, cancer, and infectious diseases are as prevalent as in the US; patient drop-out rates are one third of those in the US and EU; a strong patient-doctor relationship exists; and finally, there is less competition for patients than in the US and EU with fewer clinical trials enrolling yielding superior enrolment rates.
This region has an ethnically diverse population, strong doctor-patient relationships, and great clinical research centres, all of which are increasingly attracting the eye of our member companies when choosing where to base their clinical trials
Yaneth Giha, FIFARMA
With only Spanish and Portuguese spoken in LatAm there is no language barrier, the region has a good reputation for quality in terms of FDA inspections, and a substantial market for later sale of approved drugs exists with registration accelerated by participation in multi-regional clinical trials.
Yaneth Giha of FIFARMA – the leading association for the innovative pharmaceutical industry in Latin America – explains that “LatAm can be a great place for clinical research and in many aspects is already a great place for clinical research. This region has an ethnically diverse population, strong doctor-patient relationships, and great clinical research centres, all of which are increasingly attracting the eye of our member companies when choosing where to base their clinical trials.”
She continues, “It is estimated that ten percent of clinical research worldwide is done in LatAm, predominantly between Brazil, Argentina, and Mexico and where IQVIA estimates the pharmaceutical industry has made investments of approximately USD 980 million. Four years ago, Argentina defined clinical research as a governmental priority, catching up to Brazil and Mexico which have long had a strong footprint thanks to their large populations and local markets. Colombia and Chile are also becoming more significant, making up 20 percent of the LatAm total, with other countries accounting for the remaining ten percent.”
Clinical Trials: Industry Positivity
Other industry leaders and FIFARMA members are similarly positive. “There are some very important and sophisticated centres in LatAm,” opines Sandra Ramirez, Latin America lead for Astellas Pharma. “Brazil, Mexico, Colombia and Argentina all host such centres with very high-quality service and physicians at the level of top international institutions across the world.”
Takeda’s Maria Gabriella Pittis agrees, noting that “LatAm is actually a very good place to do clinical trials with excellent levels of expertise, an improved regulatory framework – especially in Argentina and Colombia – and good quality institutions. For example, the trial for Takeda’s dengue vaccine was conducted across eight countries, four of which are in LatAm. While the fact that dengue is endemic in these countries is obviously a big factor in locating these trials there, it showed that we do have sufficient infrastructure.”
She adds that clinical trials can have several positive knock-on effects, both in health and economic terms. “R&D, especially clinical trials, are one of the biggest value-adds that our industry can give,” unpacks Pittis. “An IQVIA study in nine LatAm countries shows that pharma companies, through R&D, have a huge impact on the economy. Clinical trials create a lot of value, not only on the kinds of jobs that we create, that are obviously very educated and valuable, but also on the number of jobs. For each direct job, there are 1.65 indirect jobs created.”
The trial for Takeda’s dengue vaccine was conducted across eight countries, four of which are in LatAm
Maria Gabriella Pittis, Takeda
MSD is another firm with a significant LatAm clinical trial footprint. As Sarah Aiosa clarifies, “Our global clinical trials operations team in LatAm is leaving a lasting mark on both our region and the world.”
“MSD is currently sponsoring almost 200 clinical trials at nearly 2,000 active sites across LatAm with almost 16,000 randomized patients, which is bringing diversity to the global R&D programs of which they are a part. Indeed, two LatAm countries – Colombia and Mexico – are the top patient enrollers worldwide, and LatAm has contributed with approximately 15 percent of our total active trials. Moreover, MSD holds important clinical trials data management centres and pharmacovigilance centres that service the entire world from Argentina, Colombia, and Costa Rica.”
Florencia Davel of BMS is also keen to play up her company’s LatAm clinical trial footprint, asserting that “BMS’s LatAm clinical trials operations are significant, and the company has invested USD 200 million in this area over the last five years. More than 2,000 patients are receiving treatment with BMS medicines via clinical trials in more than 484 centres in the region, with major hubs in Argentina, Mexico, Colombia, and Chile.”
She continues, “Our centres in LatAm participate in Phase I and early-stage trials and BMS has become a top enroller in breast cancer in Mexico. Moreover, the physicians with which we work are authors of key publications around these trials. As mentioned previously, our clinical trial investments in the region grew by 20 percent last year, and we foresee this trend continuing.”
“Two of the company’s five global diversity and inclusion commitments, launched in 2020, are directly related to clinical trials. These two commitments – addressing health inequities and building more clinical trial diversity – fit perfectly with our work in LatAm, where there is significant health inequity which can be addressed through clinical trials as well as a diverse multi-ethnic population.”
Clinical Trials: Challenges & Next Steps
In terms of the challenges surrounding locating even more clinical trials in LatAm, FIFARMA’s Giha highlights regulatory barriers as a key concern. “One challenge is making our regulatory systems and the regulations surrounding clinical research more attractive,” she claims. “For example, in Colombia, the regulatory agency was previously taking around six months to approve a clinical trial. Then it moved to around two months, which sends a strong message, as did Argentina’s move to change its regulation four years ago to incentivise clinical research investments and make the process more efficient. The ethics commissions that have sprung up can also create obstacles, but these commissions are now improving and have a better understanding of how to create solutions.”
Looking at Mexico, Cristobal Thompson, executive director of the Mexican Association of Pharmaceutical Research Industries (AMIIF), feels that while challenges remain in terms of protocol delays, the country still has a huge opportunity ahead of it in clinical research. “In 2014 we built a 10-year strategic plan stating that Mexico would become a powerhouse in clinical research,” he states. “I still believe that. We can still reach that goal by 2024 if we accelerate the approval times for clinical research protocols. It is still on our agenda, and for the last five years I have been spreading the word about it, as we could be bringing in an excess of USD 500 million dollars a year. And it is not about facilities, because the truth is that facilities in Mexico are producing only at about 70 percent of their capacity.”
BMS’s Davel feels that, in her native Argentina at least, clinical trial infrastructure could be built up in public hospitals, rather than just the private hospitals where much of the continent’s clinical research currently takes place.
She states that, “Many LatAm countries – especially those where we have clinical trial hubs – stand out from other emerging markets for the high level of infrastructure they have in place, particularly in the private sector. However, BMS wants to increase the participation of public sector hospitals in clinical trials and to this end in Argentina we have an award-winning initiative known as the ESSENCE project, recognized in the company’s Innovation Tournament as a game changer. This initiative aims to address both our health equity and clinical trial diversity commitments by ensuring that the supporting infrastructure is in place for public sector hospitals to participate in clinical trials.”
The Land of Opportunities
Despite the region’s challenges and particularities, LatAm remains, in the words of BMS’s Florencia Davel, “a land of opportunities.” She expands, “my motto is that every crisis leads to opportunity. We have a diverse population, strong healthcare systems across the region, and our approach is to work collaboratively with other stakeholders to address what matters: bringing more innovation to more patients more quickly. Through health economic assessments, we aim to pinpoint how best to incorporate new medicines into a country’s formulary and health system, thereby creating a more sustainable overall system that treats patients as quickly as possible, lessening the burden on them, their caregivers, and their country.”
Partly thanks to the pandemic, governments and the general public now understand healthcare better and have made healthcare a higher priority, which will help us partially offset the impact of the [region’s] challenges
Hugo F. Villegas, Medtronic
Medtronic’s Villegas concurs, adding that “2023 will be a challenging year with different but not greater complexity than in previous years. There are significant challenges around inflation as well as the supply of products due to the scarcity of certain raw materials. Some LatAm economies will enter a recession, leading to lower expenditure on healthcare from both the public and private sectors.
He adds, “However, partly thanks to the pandemic, governments and the general public now understand healthcare better and have made healthcare a higher priority, which will help us partially offset the impact of the aforementioned challenges.”
Giha of FIFARMA concludes, “The pandemic showed us the importance of robust and sustainable healthcare systems that are focused on the patient’s wellness, regardless of the political agenda in the countries. People’s health is beyond ideologies and one of the key challenges, not only for FIFARMA, but also for government stakeholders, local associations, and society in general, is to identify opportunities to work together to improve access, availability, and innovation. There are different strategies that can be implemented jointly with the countries to improve the conditions of patients in LatAm without neglecting the sustainability of the health systems in the region.”