Colombia: Confidence in uncertainty
Under the administration of President Juan Manuel Santos, Colombia is focusing on bolstering the commercial sector. Thanks to the ratification of free trade agreements with 14 countries around the world since 2011, including the United States, foreign direct investment reached a record high of COP 29 trillion ($16 billion) in 2012. While this is good news for the pharmaceutical industry, there is still a strong debate about how healthcare in Colombia can be improved. While Colombia enjoys near universal coverage, a feat rarely seen in Latin America, the financial strain caused by this broad coverage has created the need for change. The industry is watching as the country enters a period of transformation.
“The title of your report is ‘Confidence in Uncertainty’,” remarks Alejandro Gaviria, Minister of Health and Social Protection of Colombia, as he sips a freshly brewed into coffee from his office in the historic Candelaria district of Bogotá. “Ultimately, it is my goal to foster more confidence in the system and among all stakeholders in the health industry. Therefore, I hope that your next report in Colombia will be called ‘Confidence and Certainty.’ Colombia is in an exciting state of change, and the country has great potential as one of the most promising emerging markets in the world today.”
Colombia has experienced economic improvement in recent years. Since 2010, the country has shown an average of 5.1 percent growth in GDP, placing it well above the Latin American average. Colombia’s trade balance increased from $24.6 billion in 2002 to $119.3 billion in 2012. The country’s foreign currency rating was recently upgraded by credit agency Standard and Poor’s from BBB- to BBB, increasing the country’s attractiveness for foreign direct investment (FDI). The country’s debt to GDP ratio has decreased from 40 percent in 2010 to 33 percent today.
The pharmaceutical industry is no exception. Business Monitor International has estimated an increase in pharmaceutical sales from COP 7.55 billion ($4.2 billion) in 2012 to COP 8.07 billion ($4.45 billion) in 2013, suggesting that there is growth in Colombia, but at a rather slow rate. This may be indicative of potential but it is unclear if Colombia will experience a surge anytime soon.