BMI View: A growing burden of chronic diseases, along with the Colombian government's push toward improving its national healthcare system will ensure the country's retained appeal to multinational drugmakers and healthcare suppliers. Despite remaining concerns surrounding Colombia's counterfeit drug market, the country's overwhelming demand for medical access will keep health and medicine spending on a positive trajectory over the long term.
Headline Expenditure Projections
Pharmaceuticals: COP8,643bn (USD4.3bn) in 2014 to COP9,110bn (USD3.6bn) in 2015; +5.4% in local currency terms. F orecast revised upward from Q 2 15 due to historical data.
Healthcare: COP53,417bn (USD26.7bn) in 2014 to COP57,414bn (USD22.4bn) in 2015; +7.5% in local currency terms. Forecast revised upward from Q 2 15 due to historical data.
In our Q415 regional Risk/Reward Index, Colombia has maintained seventh place out of 19 markets surveyed in the Americas region. The country's overall Risk/Reward score was 50.3, just above the regional average of 48.7. 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 numbers.
Key Trends and Developments
A commission of German experts, led by Parliamentarian Karl Lauterbach, visited Colombia to share their expertise on their home country's social security system. The delegation participated in a forum titled 'Germany Colombia: similar health systems, a lot to learn,' an initiative of Colombia's health and social protection ministry.
Colombia's Ministry of Health is set to release additional funds worth USD50bn to expand hospital infrastructure in the country in H215, according to Deputy Minister of Public Health and Service Fernando Ruiz Gomez. The move will help develop hospital infrastructure that caters to the need of the Colombian population
The second specialised criminal court of the Quibdo circuit has reportedly charged Asprilla Elpidio Guerrero, former secretariat of health auditor of Choco, for embezzlement, sentencing him to nine years and two months in jail. The investigation is related to a payment of COP1.74mn (USD687.8) that the institution had made to seven drugstores in Choco for allegedly providing expensive drugs not included in the Columbian healthcare plan, POS.
The University of Pittsburgh Medical Center (UPMC) has signed a 10-year agreement with the Cardiovascular Foundation of Colombia (FCV) to develop and co-manage an oncology centre for adults and children. The proposed oncology centre will be funded by the FCV and will include chemotherapy and radiation therapy services, along with a bone marrow transplantation unit.
BMI Economic View
Colombian real GDP growth will slow dramatically in 2015, as the impact of weaker oil production and lower oil prices weighs on trade dynamics and undermines consumer confidence. While we expect a modest economic rebound starting in 2016, real GDP growth will remain persistently weaker in the coming years.
BMI Political View
While Colombia's long-term political outlook is set to remain relatively stable compared with its neighbours, we identify several massive political challenges for the government over the next decade and highlight three scenarios for change. Over the coming years, we expect inequality, drug trafficking, and left-wing insurgents to be the main drivers of long-term political risks facing the country.