Industry Trend Analysis - Drugmaker Opportunities Marred By Underling Risks - DEC 2017


BMI View : Despite its robust growth trend, Guatemala's pharmaceutical market will see limited interest from multinational drugmakers over the coming years as low per capita spending on medicines and endemic industry-risks weigh on the country's appeal. Nevertheless, Guatemala certainly has the potential to improve its manufacturing base and operating environment, owing to its relative lack of development, supporting a more positive long-term outlook for the country's pharmaceutical sector.

Guatemala's pharmaceutical market has significant growth potential, yet the opportunities for drugmakers are largely skewed towards those producing generic drugs as underlying issues persist. In 2016, Guatemala's pharmaceutical market reached a value of GTQ8.2bn (USD1.1bn) and this is expected to increase to GTQ9.0bn (USD1.2bn) in 2017. This positions Guatemala's pharmaceutical market relatively favourably compared to the rest of Central America, yet insignificant on a wider Latin America scale. Indeed, Guatemala's pharmaceutical market is the eighth largest (out of sixteen excluding Venezuela) in the Latin America region, largely overshadowed by the emerging economies of Brazil, Mexico, Argentina and Chile. As such, multinational pharmaceutical activity is limited in the country; Guatemala's main pharmaceutical suppliers are regional drugmakers - largely positioned in Mexico and Panama due to their strong manufacturing bases.

Like many of the smaller pharmaceutical markets in Latin America, Guatemala is characterized by a relatively underdeveloped pharmaceutical sector. There is a lack of established medicine regulation and pricing, poor access to healthcare services, and a lack of significant investment incentives for foreign drugmakers. These market dynamics are reflected in Guatemala's low per capita expenditure on medicines (USD65 in 2016) and overreliance on imported pharmaceutical goods.

Underdeveloped Yet High Growth Potential
LHS: Pharmaceutical Expenditure (USDbn); RHS: Five-Year Pharmaceutical Expenditure CAGR (%, loccur)
Source: National Sources, BMI

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