2 minute read
2. Medical devices
from Innovation for development: the key to a transformative recovery in Latin America and the Caribbean
chain. They include development, manufacturing, logistics and product distribution activities involving the use of imported active ingredients, primarily from Asia.2
In terms of foreign trade, the region has an increasing deficit and is highly dependent on imports. Its participation in the global export of pharmaceutical products accounted for 0.7% of the total in 2020, far lower than its rate of participation in global exports of all goods (5.4%). There has been a downward trend in pharmaceutical exports since the start of the last decade and its value decreased from a maximum of US$ 7.1 billion in 2012 to around US$ 4.9 billion in 2020. In the trade of pharmaceutical products, the region is persistently in deficit and the value of its imports was six times greater than the value of its exports in 2020 (see figure II.1).
Figure II.1 Latin America and the Caribbean: foreign trade in pharmaceutical products, 2010–2020 (Billions of dollars)
40
30
20
10
0
-10
-20
-30
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Exports Imports Balance
Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of UN Comtrade Database [online] https://comtrade.un.org/.
Intraregional trade, meanwhile, exceeded US$ 6 billion in 2012, but fell to US$ 4.808 billion in 2018. The localization model for subsidiaries of large multinational companies to supply the regional market generates trade flows between countries that are significantly smaller than the imports from outside the region. Larger countries are net suppliers of pharmaceutical products to the rest of the region, as evidenced by the regional trade surpluses of Argentina, Brazil, Colombia and Mexico. However, some small countries, such as Cuba, Panama and, to a lesser extent, El Salvador, Guyana and Uruguay, also have intraregional surpluses.
The value of the medical device industry was estimated at US$ 430 billion in 2018 (IQVIA, 2019). Global production is largely located in the United States, Europe and Japan, which were the places of origin of the world’s 30 largest companies in the sector in 2019.
The market leaders are subsidies of large, knowledge-intensive multinationals, such as Johnson & Johnson, General Electric, Phillips and Siemens. These companies, after having achieved high production volumes in the market of their countries of origin, expanded their exports worldwide.
2 Brazil, the country in the region with the greatest level of autonomy in terms of active ingredients, has a local supply rate of 23.6% (Sweet, 2021).
