The growth in demand for in vitro diagnostic (IVD) tests in Latin America is opening up a range of opportunities in the region but those opportunities are coming from some surprising sources.
While growth in Brazil is likely to be lackluster, a recent report suggests that other markets in the region could take the lead. Opportunities in this space might be particularly enticing in Colombia, Peru and Chile.
"In six years, Colombia, Peru and Chile combined will represent an IVD market that is 60 percent of the size of Brazil's despite the combined national populations being less than half the Brazilian population," said Bruce Carlson of Kalorama Information (Rockville, Maryland), a market research firm.
For the time being, Brazil remains the preeminent market in terms of scale, but a number of factors are making other countries in the region look particularly interesting for the IVD market.
"Several factors have made other South American markets increasingly relevant to global IVD business expansion," Kalorama said. "While Brazil figures heavily into IVD strategies for the Latin American continent with a population of over 200 million people and industry to support globally distributed supply operations . . . the country's regional economic clout does not necessarily ensure its status as a leading target expansion market for IVD companies."
Markets around Brazil, on the other hand, are doing well.
"The less competitive IVD markets of Chile, Colombia and Peru are expected to grow by faster rates through 2019 while outpacing growth for the Latin American IVD market as a whole," said Kalorama in a release.
The company highlighted the potential of Colombia, the second most populated country in the region.
"Colombia is emblematic of the emerging opportunities in Latin America for global IVDs," the firm said. "[The country] is sufficiently urbanized at roughly 75 percent of the total population to support effective distribution and access to patient populations. With economic diversification and newfound wealth, Colombia has begun to improve its near-universal healthcare system established with the 1991 constitution. Consumption expenditure growth has roughly matched recent GDP growth at four to seven percent annually."
Colombia's southern neighbor of Peru is also showing signs of strength, and with those signs, opportunities are on the rise for the IVD market.
"Peru is in a period of marked economic improvement with the International Monetary Fund designating the country a leading Latin American economy and destination for investment," the market research firm said. "Recent sustained economic growth has been possible through the inauguration of political stability in the beginning of the century."
Despite the country's widespread poverty, which has been estimated in between 30 to 50 percent of the country´s population, and a weak healthcare system, Peru could emerge as the fastest growing market in upcoming years.
"Peru has approximately 1,300 clinical labs," said the market research firm. "While featuring a less developed healthcare system, Peru has seen significant growth in healthcare demand over the past decade and is projected to lead all Latin American countries in IVD market growth through 2019."
Chile is also another market with great potential for entirely different reasons. Chile has a strong private healthcare system that covers most of the population, a system that is at the heart of the opportunity.
"Nearly universal healthcare coverage is provided to Chileans through both a public insurer (Fonasa) covering 75% of the population and group of regulated, private insurers," Kalorama said. "Fonasa guarantees coverage for a list of specific health issues; additional, heavily subsidized care was recently made available to the elderly. Despite moves made to improve the effectiveness of public care following its privatization under (President Augusto) Pinochet, the level of care remains significantly higher in the Chilean private healthcare sector."
Pinochet was president from 1974 to 1990.
Meanwhile, in Brazil, the market could remain flatter even if it does get a boost from an improving regulatory environment.
Last year, Brazil revoked a provision that established the requirement for inspection of Good Manufacturing Practices for the registration and revalidation of sanitary registrations for IVD products under Class II. (Medical Device Daily, Apr. 3, 2014; Aug. 11, 2014).
Anvisa, the Brazilian health surveillance agency, also opened the door last year for applicants to submit registration applications of IVD products classified as Class III and Class IV, along with the protocol of submission of GMP applications.