Boston, MA -- (SBWIRE) -- 09/12/2013 -- The World Health Organization (WHO)'s recent adjustment to Colombia's historical healthcare expenditure highlights the government's efforts to contain costs and the greater-than-expected financial difficulties affecting the country's private healthcare reforms. We forecast relatively strong growth in Colombia's public healthcare spending, as the cost of healthcare provision escalates and demand increases for drugs and services under the Obligatory Health Plan (POS). The country's private healthcare sector will grow at a much lower rate, as there is no indication to show that the financial troubles plaguing Colombian private insurers are diminishing.

Headline Expenditure Projections

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- Pharmaceuticals: COP7,580bn (US$4.22bn) in 2012 to COP8,111bn (US$4.47bn) in 2013; +7.0% in local currency terms and +5.9% in US dollar terms. Forecast in line with Q213.
- Healthcare: COP40,307bn (US$22.43bn) in 2012 to COP43,113bn (US$23.75bn) in 2013; +7.0% growth in local currency terms and +5.9% in US dollar terms. Forecast somewhat lower in relation to the previous quarter, as historical figures decreased substantially on the back of new data.

Risk/Reward Rating: Colombia' Pharmaceutical Risk/Reward Rating (RRR) score for Q313 ranks it the eight most attractive pharmaceutical market in the Americas region (out of 17 countries), which is one place lower than previously, following the adjustment of our assessment tool. Nevertheless, we retain our positive view of Colombia's longer-term commercial opportunities for pharmaceutical companies, which are supported by factors such as substantial population numbers, steady economic development and the underdeveloped pharmaceutical demand. On a negative note, we continue to view intellectual property (IP) shortcomings as problematic, but improving.

Key Trends And Developments

- In March 2013, Colombia-based privately-held pharmaceutical company Procaps reported its plans to bolster research and development (R&D) in 2013 through a US$14mn investment. The company aims to expand its soft gelatin capsules business in Colombia and other countries. According to the vice president of corporate affairs, Marcela Carvajalino, Procaps' turnover reached US$440mn in 2012.

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