The plant is scheduled to be operational by 2020 and will provide pharmaceutical goods that will benefit both countries and in other countries across the Latin America region.

The two countries signed a cooperation agreement last May, which seeks to boost and incentivize local production of medicines across Latin America. 

Currently, Bolivia imports 70 percent of the pharmaceuticals used in the country at an estimated cost of US$56.4 million dollars a year.

Labiofam director general Jose Antonio Fraga told Reuters that the project has the potential to significantly reduce prices and improve access for certain medicines, with positive outcomes for Bolivian healthcare system.

"This is basically for poor people because they can't afford the prices set by the trans-nationals,"Fraga said. "So these industries will be subsidized by the state or their products will be sold at a very small profit margin, just to sustain themselves, not to get rich."

The announcement coincides with a recent decision made by Bolivian President Evo Morales who stated that his government seeks to invest US$350 million in the local pharma industry in order to reduce dependence on international pharmaceutical imports.