Consumer health shows growth in 2013
OTC products and vitamins and dietary supplements (vitamins and dietary supplements) are increasingly considered the first-line treatment and prevention for minor health conditions by Colombians. Despite economic deceleration in 2013, perceived overpricing of some products and the uncertainty introduced by the likely reform to the healthcare insurance system, consumer health posted growth in 2013. The gradual rise in disposable income has allowed consumers to look for remedies for minor diseases and vitamins and dietary supplements to prevent or minimise potential health conditions related with a busier and more stressful way of life. OTC products are showing faster growth than their counterparts provided through the institutional healthcare system or Compulsory Health Plan (POS – Plan Obligatorio de Salud), as in many cases consumers decide to skip the paperwork needed to access essential and basic medicines. The expansion of consumer retailers during the review period has been another factor driving growth.
Public health system to undergo structural reform
The health system reform currently in process in the Congress promises to be the most disruptive modification since the Law 100 of 2003 which radically changed the face of healthcare in Colombia. The reform is greatly focused on offering an alternative management of the structural and financial issues of the system. Its essence also aims to expand universality and access to medicines, whose prices are currently involved in social debate because some compounds are exclusive to particular manufacturers. However, this is leaving prevention, the self-care culture and promotion of better lifestyles in a secondary place. In this context, OTC products and vitamins and dietary supplements are likely to continue to be seen as fundamental remedies in a system focused on the cure instead of prevention. Lack of prevention and consumer awareness can result in people developing more serious or chronic conditions with the corresponding financial burden for the healthcare system. Many of them are widely considered preventable through small changes in lifestyles.
Bayer is closing one of its plants in Colombia
Within an atmosphere marked by deindustrialisation, Bayer is saying goodbye to its traditional and long-lasting manufacturing plant in Cali, Colombia. The facility provided emblematic OTC brands such as Alka-Seltzer and Aspirin to the local and regional markets. The company has decided to take the production to Central America due to lower cost burdens and more competitive conditions according to the company’s analysis. The local branch of the company will shift to imported products whilst preserving sales, marketing and administrative functions in Colombia. Along with manufacturing plants closing in Colombia, large acquisitions have also given a new shape to the market. Chilean pharmaceutical company Recalcine acquired Laboratorio Franco Colombiano (Lafrancol) and Sanofi-Aventis acquired Genfar, one of the leading local companies in generics.
Cooperation and diversification help chemists hold on to sales
Independent chemists have bravely resisted the advances of chained pharmacies and parapharmacies like Cafam, Olímpica, Locatel and Farmatodo and modern grocery retailers like hypermarkets and supermarkets thanks to a strengthening diversification of their product offer, a model learnt precisely from their staunch competitors. With stronger trade associations like Asocoldro and cooperatives such as Copidrogas and Dromayor, independent pharmacies have been able to introduce improvements, creating a cycle of positive feedback. Thanks to a centralised purchasing and supply chain model based on economies of scale, training in modern marketing and administration and a higher negotiation power with manufacturers, the model has proven to be successful to keep that retailing channel current in a more competitive retailing environment.
Counterfeiting, contraband and price controls foreseen in consumer health
Consumer health is expected to have a positive performance over the forecast period, although counterfeiting and contraband dampen the prospects of the industry and price controls could be a major hurdle for value growth in Colombia. Both multinational and domestic companies suffer contraband, which costs millions of pesos to manufacturers and importers and represents a grave risk to people’s health. The actual burden is hard to measure because official figures are based on actual seizures, which minimises the impact, putting the problem on a marginal level. However, companies need to spend an important amount of resources to fight against counterfeiting and contraband and fortunately, trade associations have worked to create a collaborative and unified front against them, as counterfeiters are usually involved with several brands, mostly the best-selling ones in the OTC market. The resources divested to fight counterfeiting and contraband as well as price controls that may reduce profit are likely to affect, amongst others, the budgets needed to launch and promote new and older products.
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The Consumer Health in Colombia market research report includes:
- Analysis of key supply-side and demand trends
- Detailed segmentation of international and local products
- Historic volumes and values, company and brand market shares
- Five year forecasts of market trends and market growth
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Our market research reports answer questions such as:
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- What are the major brands in Colombia?
- What are the main trends in OTC Healthcare?
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This industry report originates from Passport, our Consumer Health market research database.