Opportunities to invest in the pharmaceutical industry in El Salvador: An Interview

The Central American Group: Hello, Maricela. Thank you for joining us to discuss the pharmaceutical industry in El Salvador.

Maricela Ibarra: Thank you for this opportunity. It’s a pleasure to speak with you.

As you mentioned, I’ve worked as a Senior Investment Attraction Specialist for El Salvador for over a decade. I now work at the country’s new investment attraction agency named Invest in El Salvador. It is the principal agency responsible for promoting and facilitating investments in El Salvador.

Invest in El Salvador is a government institution that is pivotal in attracting and assisting foreign investors. Our primary mission is to promote El Salvador as an attractive destination for foreign investments and exports. It is crucial in fostering economic growth, creating job opportunities, and contributing to the country’s development. Our agency provides various services to assist investors, including helping with company registration, offering information on investment opportunities, guiding investors through the legal and regulatory framework, and facilitating necessary permits and licenses.

In my position, I’ve had the privilege of witnessing the remarkable growth and transformation of El Salvador as a hub for pharmaceutical investment. The country has made significant strides in creating a business-friendly environment for the pharmaceutical industry in El Salvador and offering incentives that are particularly attractive to pharmaceutical companies looking to expand or establish a presence in Central America.

Over the years, I’ve had the opportunity to work with a diverse range of international investors, helping them navigate the investment landscape in El Salvador and showcasing the advantages of this vibrant sector. A skilled workforce, strategic location, and a solid commitment to innovation and quality mark the pharmaceutical industry in El Salvador.

I’m looking forward to sharing insights on why El Salvador has become a strategic destination for pharmaceutical investments and the numerous opportunities that await investors in this ever-evolving sector. It’s an exciting time for those considering the pharmaceutical industry in El Salvador, and I’m here to shed light on the possibilities and advantages.

Central American Group: How is the collaboration between the government and pharmaceutical companies to promote investment and research and development in the country?

Maricela Ibarra: Collaboration between the government and pharmaceutical companies in El Salvador is a critical driver of the sector’s growth and innovation. We understand the importance of fostering a conducive environment for investments in the pharmaceutical industry in El Salvador, and promoting research and development to ensure the industry’s success is also a must.

The Salvadoran government has proactively created a favorable ecosystem for pharmaceutical companies. We work closely with industry stakeholders, offering incentives, streamlining regulatory processes, and providing investment protection. These measures are designed to reduce barriers and facilitate the establishment and expansion of the pharmaceutical industry in El Salvador.

Moreover, El Salvador recognizes the significance of innovation in this sector. By partnering with pharmaceutical firms, we encourage the development of new, high-quality products, ensuring they meet international standards, including the requirements set forth by the World Health Organization (WHO).

The government’s role also facilitates dialogue between industry leaders, research institutions, and regulatory bodies to create an environment that fosters collaboration and innovation. We’re committed to ensuring that El Salvador remains an attractive destination for pharmaceutical investments while promoting advancements in research and development. For example, we’re supporting Bioacces. This company is involved in Clinical Trials. We’ve been helping them to locate in our country, offer services in this area, and export to the rest of Central America and the Caribbean.

By working hand-in-hand with companies in this sector, we can collectively drive growth, enhance product quality, and contribute to developing new pharmaceutical solutions. Our commitment to collaboration is a dedication to the success of both investors and the overall pharmaceutical sector in El Salvador.”

The Central American Group: What are the main investment opportunities offered by the pharmaceutical manufacturing sector in El Salvador?

Maricela Ibarra: Certainly, it’s an exciting time for the pharmaceutical industry in El Salvador. Over the last five years, this sector in our country has experienced remarkable growth. We’ve seen a consistent rise in the export value. The sector recorded an export value of approximately $169 million in 2022 (including vet and human medicines).

One of the critical factors that make El Salvador an attractive destination for investment is our strategic location in Central America. This location provides excellent access to North American markets, with a significant portion of our pharmaceutical exports heading to the United States. In the last year, the United States emerged as one of our top export destinations, accounting for more than USD $10 million in exports.

However, we have also maintained strong trade relations with our Central American neighbors, with our top three export destinations being Guatemala, Honduras, and Nicaragua. Together, these countries receive more than 60% of all our country’s exports, emphasizing the robust regional trade network we have established.

We are proud of our experience in manufacturing high-quality international products. This experience extends to the production of medicines for human and veterinary consumption. This specialization ensures that we meet and exceed international standards, providing confidence to our investors and partners.

El Salvador offers investors a solid infrastructure, a skilled and growing workforce, a commitment to innovation, and attractive incentives to establish and expand pharmaceutical manufacturing operations. Whether you’re a pharmaceutical company looking to optimize your supply chain, engage in research and development, or explore new export markets, our sector presents numerous opportunities for growth and success.

Why El Salvador?

1. Strategic Location: El Salvador’s strategic location in Central America offers a gateway to an extensive regional market, including neighboring countries needing high-quality pharmaceuticals.
2. Investment-Friendly Environment: El Salvador has been recognized for its open and investment-friendly policies, with a streamlined registration process and intellectual property protection for pharmaceutical products.
3. Robust Regulatory Framework: The country has a robust regulatory framework aligned with international standards, ensuring the safety and efficacy of pharmaceutical products.
4. Growing Healthcare Industry: El Salvador’s healthcare industry is experiencing significant growth, creating a strong demand for pharmaceutical products for both human and veterinary use.
5. Skilled Workforce: Our nation boasts a highly educated and skilled workforce in the pharmaceutical and healthcare sectors. The sectors accounted for 6,267 employees in the last year.

In a recent news press published by  The Financial Times, fDi Benchmark. Competitive costs for companies in the sector, El Salvador is in the 3rd position on Lower Cost in America, below Colombia and Honduras, and just above Argentina.

In summary, I wanted to add the possibility of commercialization in a growing regional market producing from El Salvador. In addition to external opportunities, companies participating in the pharmaceutical industry in El Salvador can access a growing internal market of more than USD $4 billion.

The Central American Group: Are there any international trade agreements that can benefit pharmaceutical companies operating in El Salvador?

Certainly, international trade agreements benefit pharmaceutical companies operating in El Salvador. One notable agreement is the Central America-Dominican Republic-United States Free Trade Agreement, commonly known as CAFTA-DR. This agreement fosters open and robust trade between El Salvador, the United States, and other participating Central American nations. For pharmaceutical companies, CAFTA-DR provides several advantages, including reduced tariffs, streamlined customs procedures, and robust intellectual property protection. These provisions create a favorable environment for market access, trade expansion, and the protection of intellectual property rights—essential elements for the pharmaceutical industry’s success.

These international trade agreements not only facilitate the export of pharmaceutical products but also promote cooperation and innovation. They enhance the competitive edge of companies operating in the pharmaceutical industry in El Salvador and foster a thriving environment for continued growth and development.”

Last message:

El Salvador offers investors a solid infrastructure, a skilled and growing workforce, a commitment to innovation, and attractive incentives to establish and expand pharmaceutical manufacturing operations. Whether you’re a pharmaceutical company looking to optimize your supply chain, engage in research and development, or explore new export markets, the pharmaceutical industry in El Salvador presents numerous opportunities for growth and success.

I encourage investors to visit our dedicated website, www.investinelsalvador.gob.sv, for more information, and feel free to reach out to me directly on my cellphone at + (503) 70717044 for a more personalized discussion. The pharmaceutical sector in El Salvador is ready to welcome and support your investment endeavors.”

The Central American Group: Thank you for sitting with us for this interview, Maricela. It’s evident that there are a lot of positive things happening in El Salvador’s pharmaceutical industry.

Maricela Ibarra: Thank you for the opportunity to discuss the pharmaceutical industry in El Salvador.