Pharma emerging markets: what is Latin America’s place within R&D?

Ruben Gennero &amp, Valentina Jaramillo

IHS Global Insight &amp, Investigacion Clinica Latam

Continued from “Pharma emerging markets: Latin America

In a previous post we examined the opportunities offered by Latin-American markets in the pharmaceutical field. The huge growth experienced during the last decade combined with a modern and smart approach taken by governments, such as Brazil, might turn the region into an important player sooner rather than later. Indeed, Brazil is projected to become the fifth largest global pharmaceutical market by 2015, at the current pace.

However, in such context of positive expectations it is worth drawing attention to Latin America with regard to the very first step of every pharmaceutical development- the current scenario for research and development in the region. What are the pros and cons to investing in a region which is geographically far from the most developed centres, but very close in terms of capabilities and opportunities?


“What are the pros and cons to investing in a region which is geographically far from the most developed centres, but very close in terms of capabilities and opportunities?”

According to the National Institutes of Health (NIH), currently there are 3,363 studies in South America, 1,500 in Central America and 1,355 in Mexico which give a total of 6,218 trials in Latin America as a whole. They are distributed throughout the region in different amounts with Brazil (2,221 trials), Mexico (1,355 trials) and Argentina (1,133 trials) leading the region. If we compare with the other regions, it is worth noting that there are 106,373 studies across the world. Out of that total, the United States represents 50.5% (53,792 studies), and Europe has 25.4% (27,001 trials). The remaining 24.1% is distributed amongst the rests of the world.

These numbers say a lot, especially if we think that one of the biggest myths regarding research and development by pharmaceutical companies is that giant companies perform the most of their research in developing countries, and therefore, can take advantage of them. These figures suggest this is just a myth because most of the trials are performed in developed countries. This shows that clinical research does not necessarily equate to taking advantage of developing countries. In addition, it is worth mentioning that as part of the remaining 24.1%, several regions are involved. From these numbers we can see that there is a great challenge in making Latin America the leading region in the clinical research business, and we should embrace this challenge. Latin America has the knowledge, the population, the regulations and technical requirements to increase the number of trials and gain position in the research and development market.

How can we explain these numbers? Firstly, of the 6,218 trials being conducted in Latin America, just 218 trials are in phase I. Given the fact that phase I trials require a bigger infrastructure, not many countries in the region are capable of running these trials. Coupled with that, timing in terms of regulatory processes negatively affects this step. With regard to phase II, 1,074 trials are currently being conducted and this figure has been increasing over the past few years because the industry has realised that researchers in Latin America are well prepared to take on such a challenge. If these researchers participate in phase II studies they gain an understanding of the molecule from the beginning and will continue to participate in the next phases of the development. Phase III studies represent the biggest share in terms of clinical research conducted in Latin America with 3,050 studies. This number might increase in the short term, since they are the most popular type of trials in Latin American countries. These are increasing local participation and reputation within the clinical research field. Finally, phase IV studies remain to be developed in the region and pose one of the main challenges for the pharmaceutical industry in terms of exploring the attractiveness of the innovative sector within these emerging countries.


“Latin America has the knowledge, the population, the regulations and technical requirements to increase the number of trials and gain position in the research and development market.”

However, the number of clinical trials alone doesn’t says too much. The regulatory process firmly corresponds with the competitiveness of the region as an emerging market. Since the development of a new drug is time consuming, expensive and consists of elements of uncertainty, all extras in terms of time result in added expense and problems the process of running a trial.

Therefore, having clear rules and reasonable start-up time frames for a study are priorities if Latin America wants to be competitive in the research and development market. One of the main difficulties, perhaps, is the variations in time frames across Latin American countries, which varies a lot due to regulatory differences and is a constant problem of the region. Indeed, Latin America should be capable of finding a way to harmonize the different regulatory process for clinical trials throughout all the countries. It would then be able to offer a more attractive option to the pharmaceutical industry when deciding which emerging markets to consider for new trials.

The negative impact of the lack of a consistent regulatory environment as a region and its negative impact can be observed using the example of phase I studies. In such studies the recruiting period is very short and therefore countries with long study start up periods, including long regulatory processes, are left out. When time frames are too long, by the time the pharmaceutical company gets approval for the trial, the recruitment is already closed. If this happens the impact of the incurred costs becomes quite high for the company, therefore when choosing where to carry out phase I studies, the start-up times become a priority. For the other phases time frames are also important but to a different degree because the recruitment periods are longer.

As we have seen, there are pros and cons with regard to the current situation and opportunities of Latin America in terms of clinical research. Despite the drawbacks previously mentioned, opportunities such as high standards in terms of quality of data, and the availability of good universities, along with government’s willingness to establish a cooperative environment for clinical research and innovation, hopefully offer an attractive opportunity. The challenge is to overcome the view of this region as isolated countries and work towards an integrative environment that can offer appropriate conditions to boost research and innovation, with a Latin American flavour.

The next piece in this series will be published at the beginning of June

About the authors:

Ruben Gennero MD, MBA, MPH is a Healthcare &amp, Pharma Analyst – Latin American Markets at IHS Global Insight. He can be contacted at

Valentina Jaramillo DVM is co-founder of Investigacion Clinica Latam. She is also founder and moderator of the twitter hashtag #hcsmla. She can be contacted at

Where do you see Latin America fitting within R&amp,D?