United States Agency for International Development - Programa MIDAS, 2007
Download Study: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1920926
Download Annexes and PowerPoint below
The overall conclusion of this study is that domestic pharmaceutical producers in Colombia will face increasing challenges from foreign enterprises if and as the market is further opened to competition. If there is a national interest in maintaining or improving the local and global market position of Colombian enterprises, steps should be considered to encourage upgrade of the facilities of private operators to meet standards prevalent among major international generics suppliers. Facilities upgrading would have positive consequences for the Colombian public in terms of improving the quality of products on costs, financial assistance to local firms will be required. Some restructuring of the local industry (in terms of consolidation) should be anticipated.
Strengthening Colombia’s domestic manufacturing industry should, over the long term, increase local private investment in R&D. Nonetheless, Colombia is presently at the low end of government funding for R&D programs, and at the low end of R&D as a percentage of GDP (reflecting low private investment in R&D). If Colombia seeks to take advantage of its strength in areas such as ownership of biodiverse resources, it should likely increase its public funding for R&D in sectors with potential opportunity. It might also consider promoting partnerships with firms and institutions from countries already heavily invested in biotechnology R&D, taking care in negotiations for fairly sharing in the commercial output of such ventures, and to promote training opportunities for its scientific community.
From an industrial policy standpoint, it is important to assess whether Colombia has a comparative advantage in the pharmaceutical sector that justifies government intervention and support in favor of local industry. Because government resources are scarce, it is sensible to allocate them toward industry sectors in which prospects for success in the global economy are higher. However, it also should be recognized that the pharmaceutical sector is not the same as other industry sectors. A strong local pharmaceutical industry can help to assure reasonably priced high quality medicines for local consumers, and it is important for public security. Particularly in times of public health emergency, a country runs substantial risk if it is wholly dependent on foreign sources of medicines supply. Maintaining a strong base of industrial capacity is important. Without a technologically sound local industry, the capacity to respond to public health threats may be jeopardized. This is not to suggest a policy of pharmaceutical “autarky” or self-sufficiency, but rather to emphasize that production capacity in pharmaceuticals raises different issues than production capacity in flowers or coffee. Economics and public health must be considered in tandem.
Download File