Colombian pharmaceutical market offers long-term rewards, says BMI

Colombia has been ravaged by decades of civil conflict and the fighting has internally displaced nearly 3 million people over the years. Many Colombians have ended up living in shanty towns with little access to health or educational services, notes a new report from Business Monitor International.

This negative scenario has been revived by the severe flooding the country endured in 2010, which has placed significant pressures on public resources and social provision. Colombia’s government, led by President Juan Manuel Santos, will continue to re-establish diplomatic relations and keep up efforts to attract foreign investment, even if it means realigning the focus of its foreign policy away from the USA and towards its fast-growing Latin American neighbours. The relative small supply of credit means that Colombia’s low-income population, which accounts for a large proportion, will remain unable to drive up consumption considerably. BMI believes consumer spending will remain subdued in the short-to-medium term, despite the country’s healthy export sector and year-on-year real Gross Domestic Product (GDP) growth projected at 4.7% in 2011.

BMI believes Colombia offers mostly long-term rewards for pharmaceutical firms. The country’s population (expected to reach almost 50 million by the end of the decade), combined with a gradual rise in per-capita consumption will provide opportunities for expansion in the pharmaceutical and health care sectors. However, the persistent shortcomings of the intellectual property (IP) and pricing and reimbursement regimes continue to hamper the more direct involvement of foreign companies.