The Colombian Chamber of Pharmaceutical Industry reports that Colombia produced COP5.9 billion in medicines in 2015, a substantial increase compared with a decade ago, when production was valued at COP2.16 billion. Imports were estimated to be worth USD2.3 billion at the end of 2015, increasing by 15% compared with 2014.
Implications | Exports showed a downward trend, dropping from USD500 million in 2014 to USD472 million in 2015. Meanwhile, medicine consumption in Colombia rose to approximately 4,000 drugs in volume terms and COP11.7 billion in value terms. |
Outlook | The Chamber of Pharmaceutical Industry in Bogota together with the Ideas for Peace Foundation and several local institutions have forecast that the advance stage of the peace process between the Colombian government and the guerrilla group FARC had attracted international investment among several industries, including the pharmaceutical industry. |
According to Rodrigo Arcila, president of the Colombian Chamber of Pharmaceutical Industry, Colombia produced COP5.9 billion worth of medicines in 2015, a large increase compared with a decade ago when production was valued at COP2.16 billion.
Meanwhile, medicine imports were worth USD2.3 billion at the end of 2015, increasing by 15% compared with 2014. Exports were on a downward trend, decreasing from USD500 million in 2014 to USD472 million in 2015. The main exports markets were Germany (16%) and the United States (14%), followed by China (9%) and Switzerland (8%).
The Chamber of Pharmaceutical Industry also reported that medicine consumption in Colombia grew to approximately 4,000 drugs in volume terms and COP11.7 billion in value terms.
Peace process
The Chamber of Pharmaceutical Industry in Bogota together with the Ideas for Peace Foundation and several local institutions have reported that the advance stage of the peace process between the Colombian government and the guerrilla group FARC would reap economic benefit for the country, mainly attracting international investment among several industries, including the pharmaceutical industry.
Outlook and implications
Colombia is emerging as one of the top markets in Latin America, despite the devaluation of the Colombian peso against the US dollar last year. The Chamber of Pharmaceutical Industry report shows a positive profile for the pharmaceutical industry in this market.
Despite the fact that local medicine production is not as strong as in other Latin American countries, such as Mexico or Brazil, Colombian domestic companies have been playing an important role in the development of the pharmaceutical market in the country, with local production mainly focused on generics and biosimilars of pharmaceutical products. The government is expected to continue supporting local production and exports. The slight drop on exports it is likely to be the result of the increase in production costs, as several pharmaceutical companies import raw materials to produce medicines rather than slow down the production of medicines to source these locally.
The upward trend in imports is also great news, especially considering that the Colombian government continues enforcing a strong pricing control system that targets mainly high-cost medicines (see Colombia: 10 February 2016: Colombian MoH releases draft resolution to include over 200 medicines in IRP system, proposes drug price increase).
In fact, in February, the Colombian MoH's draft resolution introduced 202 innovative medicines to the direct control of pricing based on the international reference price (IRP) system, adopted in 2013 (see Colombia: 10 February 2016: Colombian MoH releases draft resolution to include over 200 medicines in IRP system, proposes drug price increase).The pharmaceutical industry has accepted the direct control of prices in the case of more than 800 drugs, but the strength of the dollar has substantially increased production costs. This makes it likely that the pharma industry would not welcome another round of price controls.
However, the strong level of medicine imports is likely to continue as more international pharmaceutical companies are willing to bring their products to the Colombian pharma market if the peace process deals are fully agreed, which depends on a plebiscite taking place before the end of this year.