BMI View: Multinational drugmakers will continue to face a tough business environment in Colombia. With a low oil price environment affecting government revenues, authorities will be incentivised to curb pharmaceutical expenditure as a means of expanding access to healthcare. This includes price revisions or the threat of compulsory licenses, which will affect products beyond Gleevec (imatinib) .
Headline Expenditure Projections
Pharmaceuticals: COP9,101bn (USD3.31bn) in 2015 to COP9,581bn (USD3.17bn) in 2016; +5.3% in local currency and -4.3% in US dollars. Forecast unchanged from previous quarter.
Healthcare: COP59,373bn (USD21.6bn) in 2015 to COP64,442bn (USD21.3bn) in 2016; +8.5% in local currency and -1.3% in US dollars. Forecast revised downwards slightly due to updated historical data.
|f = BMI forecast. Source: WHO, National Sources, BMI|
|Pharmaceutical sales, USDbn||4.316||3.315||3.172||3.541||3.776||3.933||4.106|
|Pharmaceutical sales, % of GDP||1.14||1.14||1.10||1.07||1.05||1.04||1.03|
|Pharmaceutical sales, % of health expenditure||15.9||15.3||14.9||14.5||14.1||13.8||13.6|
|Health spending, USDbn||27.192||21.624||21.338||24.473||26.721||28.453||30.275|
In our Q117 regional Risk/Reward Index, Colombia is ranked eighth out of 19 markets surveyed in the Americas region, unchanged from the previous quarter. The country's overall Risk/Reward score was 51.8, just above the regional average of 50.6. Colombia boasts above-average scores for Rewards and Risks, although we caution that the country's intellectual property regime will continue to present barriers to multinational involvement. Nevertheless, Colombia will continue to be of interest from a long-term point of view, not least on account of its substantial population.
Key Trends and Developments
While a compulsory license for Novartis's Gleevec/Glivec (imatinib) has not materialised, authorities moved to cut the drug's price by 45% in September 2016, citing 'public interest' in increasing access to the drug. The decision was announced by Minister of Health and Social Protection Alejandro Gaviria, and comes after parties involved failed to reach a price agreement. This has prompted a formal petition from the US Trade Representative. According to Gaviria, the authorities are studying this petition but do not intend to put off the price cut much longer..
BMI Economic View
Colombia's congress will pass crucial tax reforms before the end of 2016 that will generate revenues, offsetting the negative effects low oil prices have had on government intakes. The overhaul will help improve the country's fiscal standing; however, significant political opposition is likely to result in a weaker bill than originally proposed, raising the risk of sovereign ratings downgrades and higher borrowing costs for the country.
BMI Political View
On October 2, Colombian voters narrowly rejected a referendum on the peace accord formally signed last week between the government and the Fuerzas Armadas Revolucionarias de Colombia (FARC), injecting new uncertainty into the prolonged peace process. While uncertainty will generate near-term economic headwinds, a negotiated solution remains the most likely outcome, with opponents likely to push for less accommodative judicial and political provisions.
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.