PAYING THE COST TO BE THE BOSS
While multinationals often enjoy success in Colombia, questions often arise about situations international competitors create
for local pharmaceutical companies. Despite the fact that 70 percent of demand for products in both the retail and institutional
markets come from domestic brands or generics, domestic drug makers in Colombia are being overpowered by the presence of multinationals.
"Multinational companies, especially those with major biotechnology products, have seriously affected the finances of the
healthcare system," said Alberto Bravo Borda, executive president of the Association of Colombian Pharmaceutical Industries
(ASINFAR). "A small number of units are monopolies, either because they are protected by patent or data protection laws, or
because they have no competitors on the market because of INVIMA, who have closed the door for biosimilar products in the
Another significant issue that has arisen from the presence of multinationals is the pricing of drugs in Colombia. Emilio
Sardi, executive vice president of local pharmaceutical manufacturer Tecnoquímicas, said that "some companies have sold their
products here at much higher prices than those in other countries, which is ridiculous to accept. When the government is paying,
they have a right to intervene in the setting of prices. Such a change will hurt companies that have been taking advantage
of the country and may open up a field for competition where companies like Tecnoquímicas or others may have access to a new
Sardi does recognize the potential of Colombia as a place to do business: "The Colombian market is tough, albeit growing.
Companies that do well here can do well in many other places. If the government enforces rational regulations for the health
system, there is a field to grow here. There are people capable of performing high-quality research and development in Colombia,
but they have not really been used or given the opportunity to prove their capabilities."
If Gaviria implements a new system of reference pricing that reduces the cost of drugs, local companies may become more competitive.
As the strongest national pharmaceutical company, Tecnoquímicas enjoys a significant percentage of market share in Colombia.
The company purchased the Hidraplus and Wasser Chemical brands from Baxter in December 2012 as part of their vertical integration
strategy. With acquisitions like these, Sardi hopes to regain the title of market leader in Colombia, a position that seems
to be highly sought after by Tecnoquímicas, Lafrancol and Sanofi.