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May 2009
Pharmaceutical Sector
1) Where are we coming from?
2) What are we doing?
3) Pharmaceutical market and policies of this sector
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The country has been growing steadier and faster than the Latin American
average
GDP Growth: Colombia (2000 – 2008) %
Source: DANE (National Accounts), DNP, EIU (Market Indicators & Forecasts)Note: * Forecast DNP
Last update March 16
Forecasts2009 2010
Col L.A. Col L.A.
Latin Focus 2.1 1.1 3.0 2.9
EIU -1.0 -1.2 1.5 1.7
IMF 3.5 3.2 5.0 4.1
President Uribe
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Striking performance in FDI, Exports and foreign visitors
President Uribe
Source: DNP, Central Bank (Banco de la República)
Note: * Forecast
2002/2008 Increases
214%
Exports
FDI
Tourism
355%
120%
US Million
US Million
Million of visitors
Important results in social indicators
Source: DNP, Estimates MERPD- ENH and ECH
Unemployment Rate fell by 4.2 points. 02/08
President Uribe
Note: * Forecast
Poverty fell by 13 points
Income Distribution GINI (0= equitable distribution; 1=high concentration of income)
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Market Confidence: recovering our investment grade (soon)
Risk Analysis Agency
Debt in Foreign Currency
2003 2008 Outlook
STANDARD& POOR’S BB BB+
Moody’s Ba2 Ba1
Fitch BB BB+
Source: Standard & Poor’s, Moody’s, Fitch
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March 22 de 2007
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Security has improved along with sustained economic growth
The recipe is simple: Democratic Security = Confidence = Investment = Growth
In 2008‐Investment as
proportion of GDP went to 30%
‐ GDP grew 3,5%‐Murders continue
to go down
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Three main Colombian´s cities safer than Washington D.C.
Homicides per 100.000 inhabitants per year 2007
Source:CrimeObservatories
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-44%
Source: Min. of Defense
Violence Levels are decreasing dramatically
President Uribe
-85%
-50%
2002/2008 decreases
Market Confidence
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1) Where are we coming from?
2) What are we doing?
3) Pharmaceutical market and policies of this sector
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Trade agenda: Preferential access to 1.2 billion consumers
From preferential access to 233 million consumers in 2002 to access to 1,200 million consumers in 2010
2002
2010
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2002
Investment Agreement Agenda:19 BIT´s with 42 countries, and 21 DAT´s
with 23 countriesDouble Taxation Agreements (DTA) – Investment Agreements
(BIT)Both instruments will be available to all commercial partners
2010
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Two years in a row as the first reformer in Latin
America (2009)
Colombia
improved 26
positions in two years!
Second most “business friendly” country in Latin America Doing Business
2007-2009
Country Ranking 2007
Ranking2009
Chile 28 40
Colombia 79 53México 43 56
Perú 65 62
El Salvador 71 72
Panamá 81 81
República Dominicana 117 97
Argentina 101 113
Costa Rica 105 117
Brazil 121 125
Ecuador 123 136
Venezuela 164 174Source: Top reformers report. World Bank 14
The most competitive FTZ’s in Latin America: 15% income tax and allows
sales to the local market
15% corporate income tax
No import duties
No VAT tax
Benefit from international agreements
Can also sell in domestic market
Investment in millions And Direct JobsUS$ 29.81 150
Goods
Investment in millions And Direct JobsUS$ 1.99 – 9.14 500
Services
Investment in millions Or Direct JobsUS$ 14.91 500
Agrobusiness Biofuels investment or employment
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56 Free Trade Zones
Number of Approved Free Trade Zones
New FTZs in Figures
Total new Investment (USD Million) 4,668
Total new Direct Jobs 39,620
Colombia offers legal stability contracts to guarantee investment
projects.
Investments over USD 1,500,000
Investor pays 1% premium based on the amount of theinvestment.
Period
Conditions
Up to 20 years maximum.
Contracts
approved
41 legal stability contracts,February 2009
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1) Where are we coming from?
2) What are we doing?
3) Pharmaceutical market and policies of this sector
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Health Expenditure is increasing per Colombian (2002-2008)
Source: Economist Intelligence Unit
Source: Economist Intelligence Unit
Colombia has the 3rd largest health expenditure as percentage of the GDP in Latin America
Colombia has the largest Public expenditure in Latin America
Source: World Competitiveness Year Book 2008, IMD
Colombia ranks second in Latin-American infrastructure (2008)
Source: World Competitiveness Year Book 2008, IMD
Increase in both laboratory sales and profits reflect the potential of the
pharmaceutical market Laboratory sales and profits in Colombia 2002-
2007(US$ million)
Source: BPR Associate
Disease (2006) Cases Rates
Malaria (rate per 100,000 habitants of population at risk of malaria)
108,432 1,089.84
Dengue (rate per 100,000 habitants of puopulation at risk of dengue)
38,271 171.87
Tuberculosis (per 100,000 habitants) 10,696 24.64
Tubercolosis con basiloscopia positiva 7,648 17.62
VIH/SIDA (Per 100.000 habitants) 3,548 8.17
Sifilis congénita (per 1,000 live births) 1,420 2.00
Lepra(Prevalence per 10,000 habitants) 931 0.21
Tos ferina (per 100.000 under 5 yeras old) 204 4.73
Meningitis per haemophilus influenzae (per 100,000 habitants)
20 0.05
Fiebre amarilla (per 100,000 habitants) 5 0.01
Tétanos neonatal ( per 1,000 live births) 4 0.01
Rabia humana (Per 100,000 habitants) 2 0.00
Source: World Health Organization, Pan American Health Organization, Ministry of Social Protection
Main Colombian Diseases
Colombian environmental laws and compliance do not hinder the competitiveness of business
Following Law 788 of 2002:
100% exemption from the income tax for companies that develop new drugs in Colombia,supported by Colciencias a government entity .
A deduct tax income of 125% of the value of the investment in scientific or technologicaldevelopment in the taxable period that took place.
Source: World Competitiveness Year Book 2008, IMD
Source: World Competitiveness Year Book 2008, IMD
Intellectual property rights are adequately enforced in Colombia
Conclusions
Colombian economy ready to receive investment
Colombian business environment supported by oneof the best legal system in Latin America.
Investors receive too many incentives to invest inColombia.
Colombia pay for innovation in science andtechnological, even more if this innovation is made indrugs for humans.
Pharmaceutical sector is growing, which shows agreat opportunity to invest in this sector.
Colombia has one of the best health system in LatinAmerica
Conclusions
• In the last few years, Colombia has experienced a marked improvement in its macroeconomic performance, internal security and stability for businesses. As a result social indicators have improved dramatically.
• Colombia has achieved a solid structural growth, based on an increase in the investment rate and higher productivity levels.
• The country has guaranteed its external funding for 2009 trough multilateral institutions such as IADB, WB and CAF.
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• Colombia is aggressively negotiating trade and investment agreements expanding its markets and becoming more attractive to investors.
• The Colombian Government is committed to generating the most favorable conditions for domestic and foreign investment instruments such as the free-trade zones regime and legal stability contracts.
Conclusions
