Industry Trend Analysis - Market Competition And Pricing Issues To Challenge Drugmakers - DEC 2017

BMI View: Colombia ' s pharmaceutical market is highly competitive which will place pressures on profit margins. The generic medicine segment dominates medicine sales however intense competition and the prominence of a few major multinational drugmakers will continue to drive prices down while. The innovative medicine sector will also face challenges, primarily due to severe pricing restrictions. Despite positive epidemiological trends, the market will underperform due to these issues.

Colombia's pharmaceutical market will remain highly challenging for multinational innovative pharmaceutical manufacturers. As with almost every emerging market, affordability levels are low for high-value patented drugs. Moreover, aggressive medicine price policies focussed on the innovative medicine segment will pose additional headwinds to drugmaker opportunities ( see 'Medicine Pricing Intervention Will Continue To Hamper Profit Potential', July 6).

The Colombian pharmaceutical market was worth COP9.58trn (USD3.14bn) in 2016, at 14.6% of healthcare expenditure. For 2017, we forecast y-o-y growth of 5.3% in local currency terms and 10.9% in US dollar terms to COP10.1trn (USD3.48bn). Over our five-year forecast period to 2021, medicine sales will increase to COP12.6trn (USD4.21) at a local currency compound annual growth rate (CAGR) of 5.7% (6.1% in US dollar terms). Due to the challenges facing the market, this growth rate will be inferior to almost all South American pharmaceutical markets.

Price Controls To Repress Growth Opportunities
Colombia: 5-Year Drug Sales CAGR (%, loccur)
Note: Excluding Venezuela. Source: BMI

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