Q1. Could you start by giving us a brief overview of your professional background, particularly focusing on your expertise in the industry?

I have been a professional in logistics and operations for 16 years now, the last 11 of which have been spent working with pharmaceutical companies and the pharma industry. I was the Latin America logistics manager for the inbound shipments into the region. I was then working as a Distribution and supply chain manager for Mexico, and I'm currently responsible for supply chain logistics and security across the whole Latin American region. I have been collaborating with various forums and serving as a panelist at cold chain distribution and pharmaceutical organizations. We're a part of different collaborations.

I also have an MBA from Boston University, and all of these have helped me develop a career in the pharma industry, specifically in logistics operations and supply chain management, mainly in Latin America, with strong connections to Europe, the US, and Asia as well.

Q2. How has Latam supply chain risk profile changed over the last 3–5 years, and where do you still see the most material residual risks to uninterrupted drug supply?

I think specifically for Latam, the main risks are the economic and political instability. So we have a lot of changes, a lot of different governments shifting, and a lot of modifications to how the pharma industry is setting up and adapting to the new regulations and changes in government.

The changes in policies, specifically in Latam, are affecting many of the pharmaceutical companies' purchases, which are coming from the government, so all changes in these organizations pose challenges for them.

For the pharma industries and also from an economic point of view, you have challenges in terms of 

• Price of the drugs
• Negotiation with the government
• Increasing competition
• Similar products coming into the region from different markets 

There's also an increased security risk. We are seeing many more country products distributed in the region, with some commercial diversion from other markets like Turkey, Egypt, and parts of Asia as well. And those represent challenges for the organization, companies, and also for the market. 

Supply chain disruptions—especially during COVID—created significant challenges for supply chain organization. In the post-COVID period, we saw steep increases in transportation costs, as well as rising local operational costs. Even sourcing basic raw materials, such as carton boxes, became more complicated. At the same time, efforts to develop new technologies for improved product quality and security added further complexity. Ensuring higher product quality and security is becoming increasingly challenging for the region. One of the main issues we face is making sure we have reliable suppliers and trustworthy business partners.

It is also essential to ensure that the costs charged for products and services are fair and reflect the value provided.

Q3. How do you assess the risk that new pricing or localization policies in major Latam markets could require significant re routing of flows or local value add, and what contingency plans already exist?

A big part of it is logistics and localization. One strategy is to have manufacturing sites in the region that will give you certain advantages. But you also face challenges in terms of expertise, development, and infrastructure in the region. A lot of the pharmaceutical companies I'm familiar with bring products from other parts of the world, manufacture them elsewhere, and then bring them here. So, you have two ways to do these kinds of operations across major Latin markets. Again, what we're trying to do is to bring the supply chain closer, at least the last part of the manufacturing, which is the boxing and the preparation of the product. To bring it closer and try to achieve most shipments, especially for special drugs or pharmaceutical products, are small bulk shipments. It's not this huge production, so in for a long time, they were being chipped by air, most of them. Now we have a change in those operations, and we're trying to shift the chipping from air to ocean to gain a moral competitive advantage, but you also have some regulations that become a challenge.  Like the expiration dates of the drugs, the time spent in transportation, and some of the challenges we're facing with local markets that don't want to receive the product close to an expiration date. 

So, you're trying to mix all these factors, bring the supply chain as close to you as you can in the most cost-effective way possible with ocean shipments, and there are some hubs of pharmaceutical production in Costa Rica that have some experience. You have some logistics hubs in Panama and Uruguay that also support free trade zones, where you can store the product, and then deliver to major markets, especially when we're talking about small-volume drops. So, you're trying to consolidate on those free trade zones and then make a smaller jump to the markets in terms of logistics, not bringing the product all the way from each of the markets in Asia or Europe.

Q4. Given rising freight and tariff volatility, what is the current thinking on air vs. ocean vs. regional sourcing for key therapeutic areas, and how sensitive is Latam P&L to another 20–30% move in international freight or tariff rates?

Normally, in pharmaceutical companies, you're trying to keep transportation and logistics expenses below 5% of the product's cost when you sell it in the market. An increase of 20-30% could represent a big challenge. Then you have these chief of Earth-to-ocean or regional sourcing that we're facing. This is something we're trying to do as a market, and the pharmaceutical companies are trying to do: get regional sourcing closer, use these free trade zones to deliver products to certain markets, and, when you have large markets like Brazil, it's a huge market with huge volumes. Then you start having this discussion of the Earth to the ocean. Even for cold change, we have experienced that we have the technology, the product, the supply, and good supplier options, and we're able to use them. It's also a challenge, and you have incremental lead time. So, it's a mix between those two. 

At least from my perspective, you're not only closing to one of them, but you want to keep like your main, or what we are seeing is you want to keep your main logistic or distribution channel and then have a backup for those. There's a lot of products that we're changing from air to ocean. However, we'll still have the air option in case of an emergency, oversale, incorrect planning, or a challenge requiring rapid volume increase due to an affected area or the local warehouse. And we're also using these regional sources to try to consolidate some volume, bring it closer to the region, and then, in most cases, just fly it to the final destinations. It's definitely a challenge. It's definitely something that we are seeing more in the former industry that we're trying to achieve, to have that closeness to our final markets. But the volume mix and the cost are what we're looking to buy. Balance as well with the lead times, and, as I mentioned before, the expiration of the drugs and having them in the market at the right time, with the right volumes.

Quality is also a major concern. There's a lot of technology in active and passive chippers that supports us in making this shift between different transport modes, but those changes sometimes bring additional costs. So those are also things we need to consider and figure out what the most agile option is and how we can chip into that without risking supply at the markets.

Q5. From the operations side, what were the most critical lessons for the Latam supply chain, and which of those still create upside or risk today?

I think it's a political and economic situation. So we're seeing competitors and many new pharmaceutical companies bringing products to market.  They have more options for the same therapies, and you need to represent yourself as the most cost-effective and convenient for patients. With the markets, the chiefs in government, and the political scenario in the region, it is also a challenge, especially for the specialised trucks. Governments are the main target market in the region. So that's also a challenge.

From a supply chain perspective, we are seeing rising costs for logistics security services, particularly in high-risk markets like Brazil and Mexico. These countries are among the largest in the region, and their security challenges contribute significantly to overall supply chain risk. Even in other countries, such as Argentina, or at key entry points like airports and ports, security incidents can disrupt the flow of goods and increase the risk of product theft and diversion onto the black market. Ensuring a secure supply chain is an ongoing challenge.

Additionally, regional distribution requires working with local vendors and suppliers who consistently meet the quality standards required in the pharmaceutical industry, including GxP and all good manufacturing practices. Developing trusted partners in the region and maintaining confidence in their ability to uphold these standards remain key challenges and risks in the supply chain.

Q6. From an operator’s perspective, what early warning indicators in the supply chain would signal that large pharma peers are likely to see margin pressure or guidance risk in the next 12–24 months?

We are facing rising input costs, including the increasing prices of raw materials, pharmaceutical ingredients, and packaging materials, which are experiencing a global spike. So those are challenges for the markets. Again, the economic landscape in Latin America is challenging. So every price increase represents a challenge for the pharmaceutical industry in Latam. You also have increases in logistics and transportation expenses, fuel surcharges are going up, and more goods are being transported worldwide. So you also have certain rights to transport the products along. That's also a challenge, and basically, the market's going to the one that is available to pay a little bit more, it's more. It has a more effective supply chain, which ensures space and transportation. So that's a challenge.

We have also seen some shipping disruptions. Like the thing that we have in the Swiss Canal, I know it was in Africa, but it affects the whole availability of chips, air cargo, and overall, the logistics world. All of those represent challenges and are increasing the price challenge for the organization's margins. Drug companies, pharmaceutical companies, and new organizations are challenging the status quo and trying to enter the market as well. Those are challenges that we're facing.

Q7. If you were an investor looking at companies within the space, what critical question would you pose to their senior management?

One or one of the main ones, is to understand the pipeline that they're working on, where they're focusing their strategy in terms of specialty drugs, OTC, big volume, exactly where they're driving their strategy, and then in terms of the markets specifically for Latam, what is the strategy in terms of transportation, logistic costs, the sourcing units, where they're established or are they planning to get into the markets in Latin America? Which organizations are they considering if they plan to have a sub-regional division, maybe having one for North America, Central America, and the Caribbean, and one for South America with Brazil or Uruguay as a host as a free trade zone, and then distribute from there, understand exactly how they're fearing this out, and what will be the focus on the market as well, local markets.

Governments are a big part of the pharmaceutical business here in Latam. So, how are they approaching that? Are they planning to reach those businesses, are they bringing added value with the product they're bringing to the region, and how will this make a difference compared to the other pharma companies already established here?