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Colombia Pharmaceuticals & Healthcare Q4 2006Published by: Business Monitor International Published: Nov. 1, 2006 - 66 Pages Table of Contents
AbstractBMI takes a negative view of the medicines reference pricing system introduced in Colombia in July 2006. This report argues that the mechanism is set to add significant complexity and risk to the business environment for innovator pharmaceutical firms. R&D-based players already face a flawed and partial data exclusivity and patents regime, with only a minority of the New Chemical Entities (NCEs) protected under existing legislation. Furthermore, BMI believes that the US free trade agreement - while laying the foundations for long-term positive market development - offers few short-term opportunities in Colombia. The introduction of direct price controls marks an expansion of the Regimen de Libertad Vigilada, or 'Monitored Freedom Regime'. Compounds on this positive list have three or fewer competitors, and comprise around 300 mainly generic APIs in 400 presentations. However, the new mechanism is a departure for patented molecules that have no chemically identical competitor, which will now be subject to price ceilings. One positive note is that over-the-counter medicines will be exempted from the controls. The new system of comprehensive price controls, which will cover both the private and public sector markets, is novel in that it includes independently collated local price data. Prices will also be benchmarked against levels in six other Latin American states, with quarterly adjustments made according to the prevailing US dollar exchange rate against the Colombian peso. The new mechanism's enabling legislation also calls for price data to be printed on drug packets, although there is little further detail on these plans. The negative impact of the new controls should be understood within the context of continued legislative deadlock over attempts to reform the under-resourced public healthcare system. Meanwhile, new data indicate that the market continues to underperform some of its Latin American neighbours, a trend that has been partly responsible for driving several major foreign manufacturers to downscale in recent months. While the Peruvian and Chilean markets recorded double-digit growth in US dollar terms in 2005, market expansion in Colombia was estimated by BMI at little more than 6%. The structure of the market is unlikely to change in the short term, with the prescription sector accounting for 83% of market value, and worth US$1.59bn, at year-end 2010. Meanwhile, the branded sector will remain strong, but 'generic' medicines are forecast to account for 38% of sales. This is due to the continued dominance of so-called 'similar' medicines, or inferior branded copies of local origin. In terms of overall sales, the market is expected to approach US$2.0bn by year-end 2010. BMI intends to revise Colombia's position in our regional Business Environment Ranking in the short term, pending further developments in healthcare sector legislation. However, the country's current low ranking - in equal fifth place with Venezuela - illustrates the high level of risk to the local operations of R&D-based foreign companies in Colombia. Key Benefits of ReportRely On Our Independent 5-Year Forecasts As A Benchmark to test other views - a key input for successful budgetary and strategic business planning. Target Business Opportunities & Risks through our reviews of latest industry trends, regulatory changes, and major deals, projects and investments Exploit Latest Competitive Intelligence & Company SWOTS on your competitors and peers through company rankings by sales, market share and ownership structure - includes multinational and national companies. Scope of Report Executive Summary & Industry SWOT An at-a-glance perspective on latest regulatory developments, key forecast indicators and major corporate developments, covering the prescription, OTC and generics markets. The SWOT outlines strategic factors which affect BMI’s forecast analysis, and taken together with BMI’s Economic and Business Environment SWOTS, give a complete overview of market climate. Market Summary Outline of market characteristics, growth factors, leading therapeutic segments and a competitivness of the market. Regulatory Regime Guide to and analysis of country intellectual property developments and pricing & reimbursement issues, which constitute the regulatory make-up of the market. Industry Developments Focus on government healthcare reforms, epidemiological trends, company M&As, product launches, market entries, FDI activity, R&D and patent legislation. BMI 5-Year Industry Forecast 5-Year Forecasts to end-2010 for all key industry indicators (see list below), supported by explicit assumptions, plus analysis of key downside risks to the main forecast, including: Drug market expenditure (US$bn); drug expenditure per capita (US$); as % of gdp Prescription drug market (US$bn)/as % of total market; sales by alimentary tract/metabolism; antibiotics, cardiovascular, central nervous system, oncology, musculoskeletal and respiratory system OTC market (US$bn)/as % of total market (sales by analgesic, cough and cold, digestives, skin treatments, vitamins and minerals) Generics market (US$bn)/ as % of total market Health expenditure (US$bn, % of gdp and per capita); public sector health expenditure as % of total; number of hospitals; beds, hospital admissions, doctors, births and deaths per 000 population Forecasts based on bespoke BMI economic modelling, using historical data sets of macroeconomic and industry variables to derive rigorous statistical relationships, anchored in advanced linear regression techniques. BMI 5-Year Macroeconomic Forecasts BMI forecasts for all headline macroeconomic indicators, including: Nominal and real GDP, % real GDP growth, % private consumption growth, % industrial output growth, % consumer price index, % GDP price deflator, exports, imports, trade balance, current account balance, foreign direct investment, exchange rate against US$, government expenditure, external debt Competitive Landscape & Profiles Intelligence on the market position of major MNC power houses and indigenous companies. BMI profiles key research-based companies. Company SWOTS are provided for all key strategic players, complete with a company activity overview, its leading products and analysis of business opportunities. Get Full Details About This Report >> |
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