Looking to Latin America: A Better Fertility Journey
In our article, we discussed broader trends in the global fertility market, including the widespread increase of medical tourism to address reproductive health needs. One region where we see a prevalence of cross border care is in North America between the United States andLatin America.
In the U.S, a ~$8B fertility market where ~1/8 couples experience infertility, fertility treatments are most often not covered by insurance, making them very expensive and inaccessible to most with the average IVF cycle costing up to ~$25k. In order to access care, in many cases, traveling to destinations in Latin America may be a more affordable and accessible alternative to typical treatment costs, where clinics can offer IVF cycles at a quarter of the cost with greater quality of care and patient experience. With the recent reproductive rights challenges cemented by the Dobb’s decision and the right to pursue IVF in question in some areas of the U.S., we expect an even further acceleration of fertility related medical tourism to neighboring Latin America.
In particular, Mexico stands out as an attractive destination for patients seeking superior care, with no visa requirements, affordable flights, and a thriving medical tourism market projected to grow at 12.8% CAGR through 2026. Within Mexico’s medical tourism industry, assisted reproduction is the 3rd top reason for medical travel, with the average cost of an IVF cycle costing only ~$6,500 on average.
Further, Mexico has favorable regulatory conditions for the spectrum of assisted reproductive technology treatments. Mexico does not have specific laws which restrict or prohibit IVF treatments, egg donation, gender selection, genetic screening, or sperm donation and there are no restrictions on single women or LGBQT+ couples pursuing fertility treatment. Sperm, egg, and embryo donations and surrogacy are permissible under certain conditions.
In addition to IVF treatment, Mexico is also emerging as a hotspot for social egg freezing, increasingly attracting young women from the U.S. as a destination to freeze eggs for use later in life. In particular, cities such as Cancun, Los Cabos, Puerto Vallarta and Mexico City have seen an increase in popularity benefiting from corporate policies where ~35% of Americans (~55M) can work remotely, and another 23% can work remotely sometimes. These cities offer beautiful travel experiences with affordable luxury medical tourism often coordinated directly by clinic concierges. Additionally, hybrid models where patients can do the first few consults via telemedicine, and only come in for the clinical parts are pushing costs down and opening up accessibility beyond just the highest economic demographics. While egg freezing can range between $9-16k and higher in the US, freezing and preserving your eggs in Mexico can range between $1-4k with relatively lower storage fees.
Beyond the medical tourism factor, demand for fertility services is also growing internally in Latin America. With a population of ~666M in Latin America and ~129M in Mexico alone, there is a large population base who are increasingly turning to fertility services. In Mexico, there are ~4.5M people of reproductive age with infertility, based on ~15% of men and women aged 20-44 experiencing infertility issues. While some reports estimate the fertility services market to be ~$1.2B in Latin America, we estimate the demand to be much higher with a serviceable obtainable market size of ~$2.2B in Mexico alone, adjusting for individuals of reproductive age likelihood to pursue treatment.
Yet, Latin America currently represents only 6% of the global fertility market, with no clear leader. Of the 175 registered clinics in Latin America, 94% have only one location, creating a clear opportunity to create and consolidate a network of clinics in the region and capture the inflection point in demand. With a current low penetration for IVF clinics and growing national and international demand, Mexico and other countries in Latin America present a compelling investment opportunity.