Colombia Pharmaceuticals Report Q2 2009


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In BMI's updated Business Environment Ranking table for the Americas, Colombia's score has remainedthe same, again ranking the country fifth out of the 10 major markets in the region. While the risingpopulation numbers and a steady forecast market growth represent considerable draws for foreigncompanies, the persistent problems regarding its intellectual property (IP) environment ' as well as thehigher attractiveness of other larger and better regulated Latin American markets - will continue tohamper foreign direct investment (FDI) over the coming years.Colombia's drug market compound annual growth rate (CAGR) in local currency terms is forecast at asolid 11.56%, similar to the US dollar CAGR, which is expected at 12.04%. In theory, the futureratification of the penned Free Trade Agreement (FTA) by the US should provide a legal basis to continueto improve enforcement to meet its treaty obligations, although continued delays to the ratification of thedeal are breeding uncertainty.On a positive note, there has been an increase in the presence of non-profit organisations addressingColombia's healthcare needs, to the tune of US$81mn in 2005. In light of mounting evidence of thecountry's exposure to the global economic downturn, BMI's Country Risk team believes Colombia willbe unable to escape a recession in 2009. The GDP growth forecast has been revised downwards, from2.9% and 4.5% in 2009 and 2010, respectively, to 2.1% and 3.9%. This will further reduce thegovernment's focus on improving the country's healthcare systems, leading to more non-profit institutionsentering the country. In fact, given that price rises in private healthcare are the second-largest componentof top-line inflation figures, alternative funding sources will be crucial for ensuring adequate access tohealthcare and ensuring that certain social groups (such as indigenous and female population) are notfurther disadvantaged.Colombian private health insurance firms have recently been criticised for failing to provide care forHIV/AIDS patients. The United Nations Program on AIDS (UNAIDS) has expressed serious concernsover the absence of a transparent national strategy that has left private health insurers with little or noincentives to provide relevant treatments for affected patients. Nevertheless, according to the latest reportby UNAIDS on the global HIV/AIDS epidemic, Latin America is performing better in terms of scaling upaccess to antiretroviral (ARV) drugs compared with rates of coverage in other low- and middle-incomecountries. However, a perception that the price of treatment in Latin America is high compared with otherregions is leading to mounting pressure on Latin America's leaders to talk tough on perceived overpricingof ARVs. A number of non-governmental organisations (NGOs) have already petitioned the Colombiangovernment to issue a compulsory licence for one ARV, following failed requests that its manufacturervoluntarily lowers the drug's price.

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