Boston, MA -- (ReleaseWire) -- 03/06/2014 -- As BMI's July 2013 forecast for government drug pricing pressure to increase in Colombia has materialised, we now believe drugmakers' revenue streams will continue to be constrained over the coming years. On the positive side, we expect volume sales will be boosted and partially offset the negative impacts of further drug price cuts. Colombia's relatively advanced drug reimbursement system will still offer revenue-generating opportunities for multinationals in comparison with other second-tier Latin American pharmaceutical markets.
Headline Expenditure Projections
- Pharmaceuticals: COP8,126bn (US$4.35bn) in 2013 to COP8,709bn (US$4.63bn) in 2014; +7.2% in local currency terms and +6.5% in US dollar terms. Forecasts broadly unchanged in relation to the previous quarter.
- Healthcare: COP42,811bn (US$22.92bn) in 2013 to COP46,186bn (US$24.57bn) in 2014; +7.9% in local currency terms and +7.2% in US dollar terms. Forecasts broadly unchanged in relation to the previous quarter.
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Risk/Reward Rating: In our Q214 regional RRR assessment, Colombia moved to eighth place out of 18 markets surveyed in the Americas region. Colombia boasts above-average Rewards and Risks. Although we caution that the country's intellectual property (IP) regime and its unresolved security situation will continue to represent barriers to multinational involvement, Colombia will remain of interest from a longer-term point of view, not least on account of its substantial population.
Key Trends And Developments
- In January 2014, the Colombian Medical Federation released a new list of medicines under the government price controls in 2014. It is expected to save the Colombian Ministry of Health US$136mn in 2014 as a result of having 39 of the most expensive drugs in the country under the Direct Control Regime. Drugs on the control list cover many major disease treatments, such as diabetes, hypertension, bacterial infections, Parkinson's disease, Alzheimer's disease, cancer and immunosuppressive treatments. Sanofi, AstraZeneca and Roche will experience the greatest impact from this new wave of drug price cuts according to estimations from the Colombian Medical Federation, based on 2012 sales recorded by these Europe-based firms.
- In December 2013, CORPAUL, a Colombian pharmaceutical company, planned to invest COP14bn (US $7.2mn) in its pharmaceutical plant in Guarne to increase its capacity and produce 35mn units of sterile injectable solution per year.
- In October 2013, Pfizer Colombia joined the United Nations Global Compact (Global Compact) initiative to endorse social responsibility and sustainability in conducting business operations.
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