BMI View: Colombia's deteriorating regulatory regime will continue to limit the country's attractiveness to multinational pharmaceutical companies in the coming years. Despite the country's growing rates of medicine consumption, the increasing compulsory license risks and patent regulation burdens as well as substandard pricing controls will remain critical threats to pharmaceutical investment in the country over the long term .
Headline Expenditure Projections
Pharmaceuticals: COP9,101bn (USD3.31bn) in 2015 to COP9,581bn (USD3.10bn) in 2016; +5.3% in local currency and -6.6% in US dollars.
Healthcare: COP59,425bn (USD21.6bn) in 2015 to COP64,692bn (USD20.9bn) in 2016; +8.9% in local currency and -3.4% in US dollars.
|f = BMI forecast. Source: WHO, National Sources, BMI|
|Pharmaceutical sales, USDbn||4.320||3.310||3.100||3.510||3.710||3.860||4.030|
|Pharmaceutical sales, % of GDP||1.14||1.14||1.10||1.09||1.07||1.06||1.05|
|Pharmaceutical sales, % of health expenditure||15.9||15.3||14.8||14.4||14.1||13.9||13.6|
|Health spending, USDbn||27.190||21.640||20.920||24.320||26.250||27.860||29.580|
In our Q316 regional Risk/Reward Index, Colombia is ranked eighth oout of 19 markets surveyed in the Americas region, unchanged from the previous quarter. The country's overall Risk/Reward score was 53.0, just above the regional average of 50.1. Colombia boasts above-average Rewards and Risks, although we caution that the country's intellectual property regime will continue to represent barriers to multinational involvement. Nevertheless, Colombia will continue to be of interest from a longer-term point of view, not least on account of its substantial population.
Key Trends and Developments
In April 2016, Colombia's Health Minister, Alejandro Gaviria, announced that the government will issue a Declaration of Public Interest, which will provide a legal pathway for the compulsory license on Novartis' anticancer drug, Gleevec/ Glivec (imatinib), in Colombia. This is the first step for the Superintendency of Commerce to issue the compulsory license for the production of this drug in Colombia.
In April 2016, Tecnoquimicas, one of the largest domestic drugmakers in Colombia, entered a partnership with mAbxience, a Spanish biopharmaceutical company specialized in research, development and manufacturing of biosimilars. The development is expected to increase the industry's capacity to supply biosimilars.
BMI Economic View
Headline growth in Colombia will continue to decelerate in 2016. Elevated inflation and weakening labour market dynamics will erode households' purchasing power, while rising interest rates will make capital more expensive to obtain, undermining real private consumption growth. We forecast real GDP growth of 2.4% in 2016 (revised from 2.9% previously) and 2.8% in 2017 (from 3.3% previously), notably slower than the average expansion of 4.6% during the previous five years.
BMI Political View
Disagreements between the FARC and Colombian government on the implementation of a peace accord will continue to delay the conclusion of the country's years-long peace process. Nevertheless, a peace deal remains highly likely in the coming months given significant incentives for both parties. Issues yet to be agreed include the disarmament of the insurgent group and the implementation of the peace accord.
The Colombia Pharmaceuticals & Healthcare Report features BMI Research's forecasts for drugs and healthcare expenditure and imports and exports, focusing on the growth outlook for the prescription, OTC, patented drugs and generics market segments.
BMI's Colombia Pharmaceuticals & Healthcare Report provides industry professionals, strategists, company executives, investors, analysts and sales/marketing heads with independent forecasts and competitive intelligence on the Colombia pharmaceutical and healthcare industry.
- Benchmark BMI's pharmaceutical and healthcare market forecasts for Colombia, to test other views - a key input for successful budgeting and strategic business planning in the Colombian pharmaceutical and healthcare market.
- Target business opportunities and risks in the Colombian pharmaceutical and healthcare sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Colombia.
- Assess the activities, strategy and market position of your competitors using our company profiles (including SWOTs, KPIs and latest activity) and competitive landscape tables.
BMI Industry View
An at-a-glance perspective on the latest regulatory developments, key forecast indicators and major corporate developments, covering the prescription, OTC and generics markets. The pharmaceuticals and healthcare SWOT outlines strategic factors that affect the basic assumptions underpinning BMI’s forecast analysis, and taken together with BMI’s political, economic and business environment SWOTs, it gives a complete overview of market climate.
BMI Industry Forecast Scenario
Industry forecasts to end-2019 for all key indicators, supported by explicit assumptions, plus analysis of key downside risks to the main forecasts:
- Healthcare: Total healthcare expenditure (USDbn), healthcare expenditure (% of GDP), healthcare expenditure per capita (USD), hospital beds, doctors, and birth & mortality rates (all per ‘000 population).
- Pharmaceutical Market: Drug expenditure in USDbn, % of GDP and per capita (USD).
- Patented Drug Market: Prescription drug sales (USDbn & % of total sales).
- Generic Drug Market: Generic product sales (USDbn), generic sales (% of total sales).
- OTC Drug Market: OTC sales (USDbn & % of total sales).
- Macroeconomic Forecasts: Nominal and real GDP, % real GDP growth, % private consumption growth, % industrial output growth, % consumer price index, % GDP price deflator, exports, imports, trade balance, current account balance, foreign direct investment, exchange rate against USD, government expenditure and external debt.
BMI’s Pharmaceuticals and Healthcare Risk Reward Index
BMI’s Risk Reward Index provides investors (both national and multinational) looking for opportunities in the region with a clear country-comparative assessment of the market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors, with each position explained.
A snapshot of key market characteristics, including total size of the pharmaceuticals and healthcare segments, growth drivers, leading therapeutic areas and the competitive landscape
A focus on government healthcare reforms, epidemiological trends, mergers and acquisitions, product launches, market entries, FDI activity, R&D, biotechnology, clinical trials and supply chain issues.
Details of the industry regulatory framework and key legislation covering the licensing of new products/services, pricing and reimbursements, intellectual property, taxation and advertising, as well as analysis of the overall regulatory burden.
The competitive landscape section provides comparative company analyses and index by USD sales and % share of total sales – for the total pharmaceutical sector, as well as the OTC, generics and distribution sub-sectors.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate Company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.