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Colombia Pharma report July 2013

Brought to you by


More exclusive interviews and country reports are available at www.pharmaboardroom.com


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Acknowledgements Focus Reports would like to thank

Catalina Crane, High Presidential Advisor for Public Private Affairs, Francisco Paula de Gomez of AFIDRO, Rodrigo Arcila of ANDI, Rafael Romero Pi単eros of Commission VII, and Alberto Bravo of ASINFAR for their cooperation and enthusiasm in this project and

Alejandro Gaviria, Minister of Health and Social Protection of Colombia, for taking time out of his schedule to meet with us and provide his support for this endeavor


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CONTENTS

3 ACKNOWLEDGEMENTS 7

COLOMBIA: CONFIDENCE IN UNCERTAINTY

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FROM 93 TIL INFINITY ?

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LICENCE TO PILL ?

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TOP BILLING FOR A PHARMERGING MARKET

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THE INNOVATOR’S DELIGHT

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MIXING UP THE MEDICINE

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PAYING THE COST TO BE THE BOSS

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ROBOT ROCK

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LEARNING FROM HISTORY

INTERVIEWS

20  Interview with: Alejandro Gaviria, Minister of Health and Social Protection of Colombia Interview with: 22  Carlos Alberto Florez Gonzalez, Andean General Manager of Medtronic Latin America Inc. Interview with: 24  Blanca Elvira Cajigas, Director General INVIMA Interview with: 26  Mrs. Katherine Eissner, General Manager Andean Region Hospira Interview with: 28  Mauricio Botero, General Manager of Sanofi Colombia Interview with: 30  Rafael Arango, Director General - Grupo Amarey Interview with: 32  Alejandra Calderon & Andrés Rivera, Operations & Sales Manager - Cegedim Colombia This report was prepared by Focus Reports Project Director: Mariuca Georgescu

Journalist: Cameron Rochette

Contributors: Alina Manac & Emilie Laumond

Report Publisher: Ines Nandin

Copyright All rights reserved. No part of this publication maybe reproduced in any form or by any means, whether electronic, mechanical or otherwise including photocopying, recording or any information storage or retrieval system without prior written consent of Focus Reports. While every attempt is made to ensure the accuracy of the information contained in this report, neither Focus Reports nor the authors accept any liabilities for errors and omissions. Opinions expressed in this report are not necessarily those of the authors.


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COLOMBIA:

C贸digo-Huella-Laberinto (Fingerprints) by Maria Ruiz, Courtesy of Janssen Colombia

colombia report

Confidence in Uncertainty

U

nder 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 (USD 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.

This sponsored supplement was produced by Focus Reports. Project Director: Mariuca Georgescu Journalist: Cameron Rochette Contributors: Alina Manac & Emilie Laumond Report Publisher: Ines Nandin For exclusive interviews and more info, please log onto or write to contact@focusreports.net

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JAYA PRA KASH Con la auto-disciplina y la determinación Jaya logró cambiar su estilo de vida Jaya tiene diabetes tipo 2

Jaya fue diagnosticado con diabetes tipo 2 en 1983. Desde entonces, el número de personas con diabetes en todo el mundo ha alcanzado proporciones pandémicas. Sin un cambio significativo, tanto como 550 millones de personas podrían tener diabetes en el año 2030.1 Estamos comprometidos a disminuir la curva de la pandemia de la diabetes. A través de nuestra iniciativa cambiando la diabetes™ , estamos abogando por soluciones prácticas y sostenibles y llevando la diabetes a la cima de las agendas de salud en todo el mundo. Para mayor información acerca de la diabetes consulte a su medico.

1. International Diabetes Federation. IDF Diabetes Atlas, fifth edition, 2011. Material revisado y aprobado por la dirección medica y de asuntos regulatorios de Novo Nordisk Colombia SAS Nit 900.557.875-3 Av. Calle 82 No 10-33 Oficina 1101 Bario El Retiro - Teléfono +57 314 9990 - Derechos reservados 2013 ® cambiando la diabetes es una marca registrada de Novo Nordisk A/S


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colombia report “The title of your report is ‘Confidence in Uncertainty’,” remarked Alejandro Gaviria, Minister of Health and Social Protection of Colombia, as he sipped a freshly brewed tinto 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 (USD 4.2 billion) in 2012 to COP 8.07 billion (USD 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.

FROM ’93 TIL INFINITY? President Santos appointed economist Alejandro Gaviria as the new Minister of Health and Social Protection in September 2012. Gaviria’s priority has been to create health reform that would introduce the next episode of Colombia’s payer system, following the introduction of Law 100 in 1993, which

From left: Alejandro Gaviria, Minister of Health and Social Protection; Rafael Romero Piñeros, President Commission 7 – Chamber of Representatives

extended health coverage to nearly all of the country’s population. This Law created a mixture of private and public health insurance providers, or Entidades Promotoras de Salud (EPS). While this system brought about near-universal health coverage, some argue that the EPS has evolved over the last twenty years into a business, rather than being a basic right guaranteed to all Colombians. Many accuse the EPS of corruption and mishandling finances. Gaviria attributed the system’s financial stress to an increase in recobros, or requests for reimbursement of drugs and treatments not included in the Plan Obligatorio de Salud (POS), which lists all medications to which Colombians are entitled. Insurance providers have struggled to reimburse patients for these treatments, and lack of resources reached a breaking point in 2009 when the Colombian government declared a Social Emergency Crisis and passed a number of tax laws in 2010 to save the system. However, this did not build a long-term solution. Colombia’s health system operates under two schemes, contributory and subsidized. Forty percent of the Colombian population holds formal employment and receives health insurance through the contributory scheme that is paid for by both employees and employers, granting access to private hospitals.The remaining 60 percent of the population, who do not hold formal employment, are subsidized by the public health system, which is generally of lesser quality.

One of the biggest changes Gaviria has proposed is the replacement of the EPS with a single-payer publicly funded “Fondo Unico.” The contributory and subsidized systems were combined in 2012, and both would operate under the Fondo Unico. “With this new fund, we need to have the best control of resources possible, which will re-establish the legitimacy of the system. It can be seen as a ‘fund of investment’,” said Gaviria. Another change could replace the POS with “Mi Plan,” which would remove many financially crippling items from the POS such as cosmetic and aesthetic treatments. “The Law 100/93 allowed some functions of the State to be delegated to the private sector,” said Gaviria. “This ruling essentially created a virtual fund. Twenty years later, one can see that it is not sustainable anymore. We realized that the State has to take on some functions.” According to Rafael Romero Piñeros, President of the Seventh Commission of the Chamber of Representatives, which addresses a number of social issues including health, a purely publicly funded program would allow resources to be directly reinvested into services such as primary care and disease prevention. The system had previously essentially existed as a triangle: “the patient was paying for a service and then charging it back to the State,” commented Romero. “That intermediate step will cease to exist, and therefore corruption will disappear. The success of the reforms will depend on the strength of the government and the collaboration of many different actors.”

LICENSE TO PILL As part of the ongoing restructuring of Colombia’s healthcare model, the National Institute of Food and Drug Surveillance (INVIMA), Colombia’s food and drug regulatory body, has undergone major transformation. The Institute was certified in 2010 as one of five National Regulatory Authorities

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colombia report

From left: Blanca Elvira Cajigas, Director General INVIMA; Francisco de Paula Gomez, Executive President, AFIDRO; Mr. Rodrigo Arcila Gomez, Executive Director ANDI

of Regional Reference by the public health institution PanAmerican Health Organization in Latin America. “This positions INVIMA as a national regulatory authority within the international sanitary environment,” noted Dr. Blanca Elvira Cajigas de Acosta, director general of INVIMA. INVIMA enforces standards set by the Ministry of Health. Biotechnology regulations, which have never existed in Colombia before, have been discussed for years but never fully implemented by the Ministry. Francisco de Paula Gomez, president of the Association of Research and Development of Pharmaceutical Laboratories (AFIDRO), says that this has been a long time coming. “We are talking about a sanitary regulation and the minimum set of regulations must

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Tecnoquimicas is permanently commited to applying the latest tecnologies and highest standards in its manufacturing processes. (Soft gel capsule production area).

be enforced according to the prerequisites of the World Health Organization (WHO),” he said. “I believe that in order to promulgate growth in this area, there needs to be a greater number of companies and medicines in the market, particularly innovative biotherapeutic medicines and high quality biosimilars, and not just some questionable medicines whose origins are in some process of biotechnology.”

TOP BILLING FOR A PHARMERGING MARKET Michael Himmel, general manager Andean Region of Japanese pharmaceutical company Takeda, noted that “the difference

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colombia report $4,500

10.0%

9.3%

9.0%

$4,000 $3,500 $3,000 $2,500 $2,000 $1,500

From left: Michael Himmel, General Manager Andean Region, Takeda; Mario Sturion, General Manager North Latin America Cluster, Janssen

between Colombia and other Latin American markets basically lies in the comparative de-centralization of key customers over the country. Being successful in Colombia means being able to adapt to this structural and geographical reality. The fact that Colombian healthcare practitioners are professional and very well prepared makes this task manageable.” The evidence of this de-centralization is seen in that pharmaceutical com-

$1,000

$3,134 2.3%

$3,394

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7.5% $4,007 $3,490

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2.8% $2,770

$3,065

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$500 $0

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Sales Development of the Colombian Pharmaceutical Industry

panies are found not only in Bogotá but throughout the country. Colombia’s flagship pharmaceutical company, Tecnoquímicas, is based in Cali, as well as multinationals such as Johnson & Johnson, or Reckitt Benckiser. Procaps, another of Colombia’s biggest pharmaceutical com-

panies is headquartered in Baranquilla. Colombia’s pharmaceutical market is also unusual in that a number of the top companies in the country are domestic. This may be an indicator of the growth potential for local companies looking to expand in the Colombian market.

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Anuncio Hospira Colombia 2013 - Pharmaceutical Executive FI AL

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colombia report the Central Intelligence Agency Factbook, is an indication of an improving economy. Mario Sturion, general manager North Latin America cluster of Janssen said that “Colombia enjoys free trade agreements with many countries around the world. As a result, Colombia will be more aligned with international stanFrom left: Rolf Hoenger, General Manager Roche; Norton Oliveira, General Manager dards and regulations moving forward. MSD; Mauricio Botero, General Manager Sanofi; Gloria Stella Gonzalez Perez, President Colombia also has a history of strong Advance Scientific people development with universities, international programs and research institutes that nurture Pharmaceuticals contribute roughly 2.5 percent of the Coa well-prepared labor force. Colombia is a key country of folombian economy and the majority of companies in the councus for Janssen in Latin America.” According to Sturion, Cotry have been steadily increasing profits. Rodrigo Arcila Golombia offers “a stable political and economic environment, mez, executive director of the Pharmaceutical Chamber of the centers of excellence that can properly conduct international National Business Association (ANDI) notes that “the probclinical trials and respect for intellectual property rights and lem of insecurity has decreased, external debt is controlled innovation.” well, and foreign investment is increasing. For the time being, Colombia also has geographic advantages. “To be in Cothe pharmaceutical sector is importing more than exporting. lombia is an advantage because it is an entry door for Central However, the cost of production is really low,” which, accordAmerica,” said Gloria Stella Gonzalez Perez, president of loing to Gomez, is a solid advantage for Colombia. cal pharmaceutical company Advance Scientific Group. “If I The fact that all three credit agencies have upgraded Coam in Asia, or in Europe, Colombia is very strategic in terms lombia’s government debt to investment grade, according to

We assume with complete responsibility our commitment with life.

Grupo Amarey Nova Medical Transversal 23 No. 93-23 Tel.(571) 7447300 Línea de atención al cliente 018000180066 www.grupoamarey.com Bogotá - Colombia

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of logistics. Similarly, for investors, the fact that Colombia has harbors in two different oceans is an advantage for importing raw materials or technology. Moreover, Bogotá From left: Alberto Bravo Borda, Executive has many advantag- President ASINFAR; Emilio Sardi A., Executive Vice President Tecnoquimicas es: its infrastructure, talented people, and good training programs for the pharmaceutical industry.” While numbers indicate slow growth, the pharmaceutical industry of Colombia has much room for potential given the country’s economic improvement. Colombia’s GDP has grown at a faster rate than Latin America’s over the last 25 years. A quick walk throughout any of Colombia’s major cities demonstrates a real sense of development that might not have existed as little as 20 years ago. However, even with the qualities for which stakeholders have accounted, there are still more mountains to climb to ensure Colombia’s strong position in the global pharmaceutical market. C

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Clinical trials have become increasingly important for pharmaceutical companies in Colombia. For Rolf Hoenger, CEO of Productos Roche S.A., innovation is key. “Innovation guarantees that you are competitive in the market,” Hoenger stated. “As long as you produce and bring new molecules to the market, you can be very successful. This is especially true in Roche’s case where there are clearly differentiated products. Innovation always pays off because you always bring something to the market that is asked for.” Hoenger also cites clinical trials as a critical part of the Colombian pharmaceutical industry. “Clinical trials provide a benefit for the industry to further develop, but also for the government because all these patients are treated free of charge,” continued Hoenger. “Furthermore, these patients get access to the latest in existing medicines and the doctors obtain experience in good clinical practice. It is a win-win for everybody. You have doctors who are trained very well in Colombia, which makes the country reliable for clinical trials.” The U.S. pharmaceutical company Merck Sharp & Dohme (MSD), which runs one out of every three clinical trials in Colombia, is also taking advantage of this reliability. Norton Oliveira, general manager of MSD in Colombia, said that the company’s “significant investment in clinical research in Colombia results in the generation of employment, continuous education to the medical community, support to research units and programs, and technology transfer.” The affiliate also runs an MSD data management center, which CMY

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colombia report COLOMBIA GDP Billions of U.S. dollars 350

331.655 288.188

300

144.581

150

50

250

207.41

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100

300

244.645 235.836

250

91.702 2004

350

200

162.807

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113.774

100 2006

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2010

2012

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Colombia’s GDP has historically fluctuated between 4% and 7%, similar to household consumption expenditure

consolidates data from clinical trials and pharmacovigilance programs for all of the Americas, including the United States.

MIXING UP THE MEDICINE Acquisitions have also played a role in the dynamics of the Colombian phar-

MEDIA PAG HORIZONTAL.indd 1

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maceutical industry. The most recent significant example was the purchase of local generics manufacturer Genfar by Sanofi, placing Sanofi as the market leader. “The local expectation is to consolidate our number one position in the total market, be the number one generics company and place Colom-

Ensuring quality in all its processes and products is a priority in Tecnoquimicas. (Quality control laboratory in one of the manufacturing plants located in Cali, Colombia)

bia as a hub for generics activity in the Andean and Central American region,” said Sanofi Colombia general manager Mauricio Botero. “Genfar currently has large operations in Ecuador, Peru, Venezuela, and Central America. Revenues are $150 million, and $70 million are in Colombia alone. There are many

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NOVO NORDISK According to the International Diabetes Foundafiliate trained more than 1,800 doctors last year tion, 3.3 million Colombians suffer from diabetes in Colombia, and will train more than 2,200 doctoday and five million Colombians will have diators this year,” said González. “We are building betes by 2025. Danish diabetes company Novo very strong and integrated patient support proNordisk claimed the lead in the diabetes fight grams. This involves talking about diabetes and in Colombia by placing Carlos Manuel González its implications, teaching patients healthy habParra in charge of establishing its Colombian afits, how they need to dramatically change habits Carlos Manuel filiate in 2010. The company has already made Gonzalez Parra, and how to involve family.” Given the unhealthy great efforts to improve the situation in Colom- General Manager food that many restaurants in Colombia serve, bia. While creating the affiliate was itself a great Novo Nordisk “Novo Nordisk is planning to meet with one of challenge, González noted that Novo Nordisk now the most important chefs in Colombia in order to has 100 percent coverage of all doctors and institutions. promote healthier eating habits for the population,” said As Colombia is one of the company’s most important LatGonzález. “You cannot prevent diabetes if you cannot prein American markets, Novo Nordisk has already launched a vent obesity, because the two are directly related.” number of innovative products in the country, including NovWhile the Colombian affiliate is only three years old, oRapid and Victoza. “Novo Nordisk has a huge portfolio, and González aims for Novo Nordisk to be the number one we already have extremely low-priced insulins in Colombia, diabetes player in Colombia. “We want the government cheaper than a cup of coffee!” joked González. to think that Novo Nordisk is the best partner to improve As part of its professional development investment, the lives of diabetes patients,” he added. “We will have “last year Novo Nordisk created a training program for brought the best practices of diabetes treatments from healthcare professionals called Diabetes Academy. The afaround the world to Colombia.”

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Maria Cristina Álvarez, Country President, NOVARTIS What have been Novartis Colombia’s most significant improvements since we met you in 2010? Novartis Colombia has entered new therapeutic areas such as multiple sclerosis, respiratory, and significantly expanded its oncology portfolio. The affiliate is investing twice as much in clinical research as it did four years ago. Novartis Colombia is more robust, which means a greater number of truly innovative products are being launched.

Maria Cristina

Alvarez, President, What products are you most excited about in 2013? Novartis has recently introduced Gilenya®, the first ever Novartis oral treatment for multiple sclerosis. It has already been in the market for one year. Nine out of ten patients have found significant success with this product, which is very important to ensure the efficacy of the product. In oncology, Novartis has developed a revolutionary treatment for women with metastasic breast cancer, Afinitor®, which has also been in the market for a year. The company also has a very interesting pipeline in the respiratory area, mainly pulmonary chronic obstructive disease and asthma, as well as in psoriasis and other dermatological diseases.

What is the clinical trial situation in Colombia for Novartis? Novartis Colombia has invested approximately USD 30 million in 200 clinical studies with 4000 patients in the last five years. I expect to least duplicate our investments in the next five years as a result of Novartis Colombia’s strong pipeline. In 2011, Novartis was given the “Work Life Balance” award by the European Institute of Social Capital. What did Novartis Colombia do to be given this honor? It is due to the power of the culture that we have developed in Novartis Colombia. It is a culture based on collaboration and openness that really engages every employee towards our mission, which is doing whatever we can do and trying our best to satisfy the needs of patients who can benefit from Novartis’ products. expectations to consolidate Sanofi as a leader in Colombia in generics and accelerate penetration in other countries.” As generics play an important part in the pharmaceutical industry due to their affordability and accessibility for many Colombians, this strategic Genfar purchase will allow Sanofi to retain market leadership. Chilean pharmaceutical company Recalcine’s recent purchase of Colombian Lafrancol implies a strategic integration and synergizing of both companies’ best practices as a means of staying competitive in the Colombian market. Acquisitions of brands or plants are becoming S11 FOCUS REPORTS

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more commonplace; in 2012, Brazilian pharmaceuticals company Eurofarma acquired a plant from Merck, Sharpe & Dohme (MSD) in Colombia as a means of expanding their presence in the country.

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

Novarties facilities in Bogotá, Colombia, an example of the company’s commitment to the environment

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 country.” 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 market.” Sardi does recognize the potential of Colombia as a place to do business:


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colombia report “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.

ROBOT ROCK Medical devices are one of the most profitable niches in Colombian health. Marisol Sanchez, president of the Camara de Proveedores de Salud noted that “the medical device sector correlated to roughly COP 2.01 trillion (USD 1.1 billion) in 2012, with more than 10 percent growth from last year. Ninety percent of medical devices in Colombia are imported. However, national medical devices companies have been successful, and some of them are even exporting to Central America and other parts of South America.” To put this in perspective, the medical device market in Colombia is bigger than that of Mexico, where the pharmaceutical industry has traditionally been stronger. The Colombian medical device sector has a solid following despite its high price tag. Carlos Alberto Florez Gonzalez, Andean general manager of medical device company Medtronic S13 FOCUS REPORTS

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From left: Marisol Sánchez, Executive President ANDI - Camara de Proveedores de la Salud; Katherine Eissner, General Manager Andean Region Hospira

Latin America, said that “Colombia has well-trained doctors working in very well-developed hospitals, and they really understand the benefits of this new technology. These doctors are also continuing to improve their knowledge by frequently visiting hospitals and participating in different local and international congresses, where they can learn about new developments in technology and bring this information back to Colombia. They understand the ultimate benefits for patients.” Florez founded the Colombian affiliate of Medtronic in 2008 and has led the affiliate in rapid growth. Medtronic Colombia initially used a distributor network to sell products, but is transitioning to a more direct presence in the country with a brand image focus. Medtronic Colombia also runs operations in Venezuela and Mexico. “Now is the time to leverage the knowledge that we have acquired here in Colombia in countries like Mexico to move to a more direct operation, where the market is still under penetration and development,” said Florez. “Colombia is very important and is one of Medtronic’s countries targeted for solid future growth alongside the traditionally strong markets like the United States, Japan and Western Europe.” Florez expects this growth to come from new technologies, such as the Symplicity™ therapy for renal denervation, and Melody, a transcatheter pulmonary valve therapy that combines the use of medical devices and

medicines. Despite the availability of these devices, patient access still remains a problem in Colombia. Medtronic works with the Colombian government to ensure patient access. “The organization is internally developing a program called Patient Access Acceleration (PAA) which will accelerate access for patients in Colombia for various procedures. Colombia offers very high potential for such technology because Medtronic is still penetrating most of its technologies in the country.” Rafael Arango, director general of Colombian pharma and medical device success story Grupo Amarey, uses an entire department dedicated to researching key industry trends to determine which medical devices are best to import into Colombia. He also sends employees to congresses worldwide to learn about the best investment opportunities. Arango pointed out that “in terms of devices, minimally invasive surgery is the biggest trend in the industry. Invasive surgery is now smaller, less traumatic, and recovery is much faster.” He is most excited about the potential of the da Vinci robot in Colombia, produced by U.S. manufacturer Intuitive Surgical. Arango described this device as “the ‘Microsoft’ of surgical equipment. Other companies are introducing technologies compatible with Intuitive. If Amarey can manage that platform in Colombia, the Group will be riding the wave of new laparoscopy and in general the newest minimal invasive approaches in the region.” Katherine Eissner, who became general manager Andean region of pharmaceutical and medical device company Hospira in January 2012, has a similarly positive outlook on her company’s ability to supply the Colombian market. “Hospira is the strongest injectable provider in the United States and has a heritage of antibiotics, oncology and other segments,” she said. “The Colombian population will have the opportunity to obtain best in class


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GEMEDCO GEMEDCO stands out as one of the more interesting cases of a local success story. The company acts as a sales and service representative on behalf of GE Healthcare, supplying the local market with a variety of products including ultrasound, computed tomography, nuclear medicine and contrast media. GEMEDCO’s general manager, Luz Stella Gomez, has taken great steps to transform the company’s image from a family-owned Luz Stella Gomez, General Manager business into a corporation. One of her initial Gemedco priorities “was to establish an external Board of Directors, choosing people with expertise in different areas such as healthcare, finance, international law, government and business strategy,” she said. Gomez is creating “the necessary changes to transform it into a true corporation by establishing a Corporate Governance with clear strategic plans and guidelines to take the best decisions for the benefit of the corporation.” Gomez attributes the GEMEDCO’s success to its sale of internationally recognized brands and an attractive market due to a growing economy.

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injectables in terms of price, quality and accessibility. Innovation does not necessarily imply high cost; it means cost-benefit, i.e. what I am willing to pay and why. Why is the system willing to pay, what are the benefits for the system and patients? I think that the whole sector understands that the patient ultimately makes decisions and is starting to understand better his/her rights and making choices based on that.”

LEARNING FROM HISTORY While the future remains as a hazy cloud for the pharmaceutical industry in Colombia, the country keenly awaits the outcome of reform that could put health care back on track to be accessible and affordable for everyone. Colombia’s near-universal health coverage may place the country among the best in the region, but leadership has come at a price. Under Minister Gaviria, the imminent health reforms aim to reduce corruption, make drugs more affordable, and allow pharmaceutical companies to continue on their paths to success.

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Alejandro Gaviria, Minister of Health and Social Protection of Colombia

INTERVIEW WITH:

Alejandro Gaviria, Minister of Health and Social Protection of Colombia Focus Reports: Our last report was in 20092010 when the “social emergency crisis” happened. What would you say have been the most important changes in the health system since that time? ALEJANDRO GAVIRIA: The main cause of the crisis has been a drastic increase in the number of recobros (individuals asking to be reimbursed for drugs or services that are not included in the POS –Obligatory Plan of Health). Because this number has been multiplied by six or seven, the system has been crippled, and insurance providers have struggled to pay off debts. In response to this emergency, a number of tax laws were hastily implemented to create short-term solutions to funding problems. Regulation of prices is one of the most important issues. Drugs that are currently listed in the POS can priced at any level. The Ministry plans to implement a solid reference pricing system to avoid this from happening in the future. The upcoming health reforms will change the system created by Law 100 of 1993. This reform is raising many expectations; it is my hope that Colombians will perceive this as the reform. This reform will solve different problems, particularly in regard to the flow of resources moving from public funds to hospitals and from suppliers to drug stores. The idea of this crisis has been present in the minds of Colombians for the last three or four years. A new reform is seen as another answer to what most believe is a

long-lasting crisis, which affects the finances of all the actors in the system, from insurance providers to hospitals. Here in the Ministry, we are focused in resolving this financial crisis and the flow of resources as a main priority. The Ministry is also focused on improving the quality of attention of patients and access to drugs for everybody. Any reform has to consolidate social success. Universal coverage in Colombia has created somewhat of a paradox: while coverage has increased to a level much higher than most Latin American countries both in terms coverage and package, it has been achieved with far scarcer resources. This is what has caused the increase in recobros. Colombia has to consolidate both social and financial issues, improve health access and the quality and speed of services. At the same time, the financial sustainability of the system must be guaranteed.

FR: One of the challenges that we have seen with different Ministries of Health around the world is about creating the best cost-cutting methods. What are the steps that you are taking to help cut down on costs, while also incentivizing innovation investments in Colombia? ALEJANDRO GAVIRIA: The current government strategy is to contribute to the cost of technologies and innovation. The Ministry is working on the sustainability of the system, well-managed use of technology, and integrating innovation processes.

ALEJANDRO GAVIRIA, MINISTER OF HEALTH AND SOCIAL PROTECTION OF COLOMBIA


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It is my intention to ameliorate the system in a way that reduces inequalities and provides a simpler, fairer scheme for everyone in Colombia. The Ministry’s current agenda contains price regulation, investment in biotechnology, and institutional reform to restructure the CNPM (National Commission of Drugs Prices) as well as patent structure. I want to reward innovation and to make drugs more affordable for the population by providing alternatives to patients. Competition needs to be encouraged between laboratories to prevent monopolies and high prices.

FR: Why would you say the Fondo Unico is the best option nowadays? ALEJANDRO GAVIRIA: Fondo Unico is not a “payer fund”; rather, it will work as an extensive treasury of the system, creating an improved flow of resources. Law 100/93 allowed some functions of the State to be delegated to the private sector. This ruling essentially created a virtual fund. Twenty years later, one can see that it is not sustainable anymore. We realized that the State has to take on some functions. That is why it has to be a fund which is a “ juridical person” (personalidad juridica), and not a virtual fund! The insurance system was not ruled by strict conditions from the State: the system lost a lot of legitimacy because of corruption issues. With this new fund, we need to have the best control of resources possible, which will re-establish the legitimacy of the system. It can be seen as a “fund of investment”. The system will have access to more information, in terms of cost to health services, in order to charge the same price in every EPS. The frontier between the subsidiary sys-

Universal coverage in Colombia has created somewhat of a paradox: while coverage has increased to a level much higher than most Latin American countries both in terms coverage and package, it has been achieved with far scarcer resources. tem and contributive system is unfortunately more blurry now. The State will pay for people under the contributive system. We have to manage the two regimes in the same way, which is why both regimes will be under the Fondo Unico. Assuming that your reforms will be approved, what will this mean in terms of economic transformation of the country? The direct positive effects of the reform will be the possibility of overcoming the crisis and the uncertainty that goes along with it, and establishing confidence between all players. Additionally, it will be very difficult to plan if the economy of Colombia will grow as a whole after the reform.

FR: Is there anything you would like to add to say to the international pharmaceutical community? ALEJANDRO GAVIRIA: The title of this year’s report is “Confidence in Uncertainty”. It is my ultimate goal to create more confidence in the system and among all stakeholders in the 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.


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Interview with: Carlos Alberto Florez Gonzalez, Andean General Manager of Medtronic Latin America Inc.

INTERVIEW WITH:

Carlos Alberto Florez Gonzalez, Andean General Manager of Medtronic Latin America Inc. Focus Reports: Can you briefly outline the short history of Medtronic in Colombia? CARLOS ALBERTO: In 2008, Medtronic in Colombia consisted of five employees in the Andean region and annual sales of around $14 million. Medtronic Colombia is going to close this fiscal year with 92 employees in the Andean Region with sales close to $100 million. It was a very professional and challenging option to manage the brandnew Andean region, particularly since nobody believed in the potential of Colombia for Medtronic back then. Colombia has come a long way from the days of constant security and economic fears. Today, it is the second largest operation in Latin America. Mexico will join the Colombian operation and structure, which reflects the success of the Colombian affiliate. FR: What have been some of the main challenges that you have overcome at Medtronic Colombia? CARLOS ALBERTO: Firstly, I needed to create a Medtronic image. As the affiliate was only working through a distributor network, nobody recognized Medtronic as a brand. People recognized the quality of Medtronic products, but ultimately individuals called different products by the distributor company representing the products. I was surprised when I visited doctors who would note something particular qualities of Medtronic products, depending on their area of expertise. The main objective was

to create a Medtronic brand and recognition as a whole portfolio that the company has despite the use of distributors. We started to present Medtronic as a big corporation as it is rather than smaller pieces of for different uses.

FR: Mr. Arango of Grupo Amarey told us that while products that are non-POS can cost millions to produce there is still a demand for such products in Colombia. Is that true for Medtronic? CARLOS ALBERTO: Completely. This is one of the reasons why Colombia is now one of the countries that Medtronic is looking to for significant potential growth. Colombia has well-trained doctors working in very welldeveloped hospitals, and they really understand the benefits of this new technology. These doctors are also continuing to improve their knowledge by frequently visiting hospitals and participating in different local and international congresses, where they can learn about new developments in technology and bring this information back to Colombia. They understand the ultimate benefits for patients. The problem is that doctors then look for ways to charge such technology to the EPS. This means that CTCs are playing a bigger role, and Medtronic has to work with them. Medtronic asks CTCs what they want to analyze and their desired clinical outcomes, since the company can provide much research. The Colombian market has

CARLOS ALBERTO FLOREZ GONZALEZ, ANDEAN GENERAL MANAGER OF MEDTRONIC LATIN AMERICA INC.


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good opportunities for new devices and technology, and hospitals are prepared to manage those devices. Colombian doctors are prepared to the point of being compatible with European or American doctors in terms of the ability to perform with new devices. The system is now trying to improve how those new technologies are getting to the market.

FR: Is the strategy to integrate Colombia, Venezuela and Mexico indicative of a change or trend in the market in terms of medical device companies? CARLOS ALBERTO: I think this is particular to Medtronic. German Garcia left a significant opportunity when he departed from Medtronic Mexico. Medtronic is also in a transition from a distributor network to a more direct operation. The Colombian transition has been very successful in the last five years; now is the time to leverage this knowledge here in Colombia in countries like Mexico to move to a more direct operation. 90 percent of sales in Mexico are through distributors, whereas 80 percent in Colombia is direct. Therefore, I believe that this is a very unique situation for Medtronic. For the pharmaceutical side of Medtronic, Mexico is actually ten times bigger than Colombia and even bigger than Brazil for some companies. However, the medical device market in Mexico is still under penetration and under development, particularly since some people still prefer to go to the US for treatments. Mexico needs more implants. Some devices are used more in Uruguay. Even though there are millions of people in Mexico, the number of doctors and procedures per million is very small. Mexico can take advantage of systems already setup in Colombia, Argentina or Brazil. But not every company

in Colombia is going to take responsibility for Mexico. They can work together and use the knowledge and experience of countries like Colombia. Looking at Colombia, what do you see as the main growth drivers in your product portfolio for the upcoming year? CARLOS ALBERTO: New technologies are the main growth drivers. For example, Medtronic has developed a state-of-the-art 30-minute renal denervation procedure for hypertension, and Medtronic is the only company in the world offering this technology at the moment. Medtronic treats more common diseases like hypertension, obesity and diabetes, which have become very pandemic in certain places, with very easy and effective procedures. We are also combining devices and medicines into one product.

FR: If we were to return to Colombia in the next few years, what is your vision for Medtronic at this point? CARLOS ALBERTO: My objective is for Medtronic to be the leader in the Colombian market in every single business unit and product portfolio that the affiliate has. I want to be seen with as a company that partners heavily with the government to improve the system and patients’ lives in Colombia. As any company, profit is also important, but I find that the better way to do it is by working closely with the government and developing strategies that the government wants to do. That is why Medtronic Colombia started with costeffectiveness analysis. In five years, Medtronic will be a confident partner with the government.


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Interview with: Blanca Elvira Cajigas, Director General INVIMA

INTERVIEW WITH:

Blanca Elvira Cajigas, Director General INVIMA Focus Reports: Dra. Cajigas, you were appointed Director General of INVIMA just over two years ago. What have been the biggest challenges that you have faced since the start of your tenure? DR. BLANCA ELVIRA CAJIGAS DE ACOSTA: When I was appointed two years ago, the priority for INVIMA was the sanitary vigilance of food. We participated in a lot of studies in that field along with the Planning Department. In 2010, the government changed, and the new administration had different priorities, so one of my earliest tasks has been to readjust the agency to the new requirements. At this time, the government wanted to strengthen vigilance on food but also on sanitary regulations in general. We lead a consultancy during 2011 along with different entities, agencies, and reference countries. INVIMA looked at the regulatory environment in the United States, Canada, Australia, Japan, and last but not least Brazil, who has certification from the PanAmerican Health Organization. From that observation, INVIMA started restructuring its organization alongside with the Ministry of Agriculture, Ministry of Social Protection, the Ministry of Health and Social Protection, and the President of the Republic. In October 2012, the new organization and norms of INVIMA were approved. All the subjects concerning access to the markets and improvements of the competitiveness of Colombia will come later. During this year and a half, INVIMA improved much of the regulatory BLANCA ELVIRA CAJIGAS, DIRECTOR GENERAL INVIMA

framework of the country. The national system of vigilance is led by the Ministry of Health, but there are different entities with different missions. On one hand there is the National Health Institute (Instituto Nacional de Salud), led by Fernando de la Hoz, focused on epidemiologic vigilance, on the other hand INVIMA, focused on sanitary vigilance on consumer products in general. There is the Secretary of Health as well. Every entity is working under the Ministry of Health.

FR: What is your position with respect to the level of integration of the various vigilance agencies across Latin America? What does INVIMA have to learn from such agencies like COFEPRIS in Mexico, or ANVISA in Brazil? DR. BLANCA ELVIRA CAJIGAS DE ACOSTA: INVIMA was certified in 2010 by the PanAmerican Health Organization (PAHO). In Latin America, Brazil and Argentina were the first countries to do this. Then Cuba, Colombia, and Mexico followed. This positions INVIMA as a national regulatory authority within the international sanitary environment. ANVISA, the Brazilian agency, has an international scope and are well-known in Europe. With the other agencies, INIVMA agreed on different things: the agency signed different confidentiality clauses to have access to information on each other’s activities. Secondly, the various agencies are exchanging best practices. For example, nowadays, INVIMA is working to combine technology and san-


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itary inspection. Since Argentina has a good system in this regard, Colombia sends over people to be trained.

FR: Colombia is generally one of the first countries for innovative products, but products from other countries, like India for example; often have difficulty trying to enter the Colombian system. How does INVIMA create a balance between strictness and availability? DR. BLANCA ELVIRA CAJIGAS DE ACOSTA: I have to point out that INVIMA does not create the norms; they are created by the Ministry of Health and Social Protection. INVIMA only participates from the technical point of view. The agency can propose criteria, but it is the Ministry that approves them. INVIMA is trying to make the norm flexible, according to three standards: quality, efficiency and safety. Every laboratory has to meet those three conditions in order to receive INVIMA’s certification. It is quite simple: if the laboratories meet them, they are accepted; otherwise they are rejected. We cannot admit any laxity, because we regulations must be respected. Colombia has been working on biotechnology regulations for more than six years (2 years in INVIMA, and four years before), and it is clearly a lengthy process. When you create a norm, you have to take into account those three criteria (quality, efficiency and safety), but also you have to consider access to the population. INVIMA is very committed into providing access to the Colombian population. FR: If we were to return to Colombia in three to four years, what goals would you like INVIMA to have achieved by that point? DR. BLANCA ELVIRA CAJIGAS DE ACOSTA: First of all, you will find us in a brand new build-

Being able to offer a service of public consultancy is main priority: having reliable information online, and being available for consultation at any moment. ing. The agency will move into its new headquarters in Bogotá in 2014-2015. Secondly, INVIMA will have an online information system so that the agency can offer total transparency to its customers. Being able to offer a service of public consultancy is main priority: having reliable information online, and being available for consultation at any moment. Users will be able to consult the rankings of all registered products. Today, INVIMA has high-skilled and experienced individuals, but wants more doctors. The agency has the ambition to attract new profiles. INVIMA wants to open new regional offices, as well as to be closer to Colombians, advising them both on food and drugs. In five years, INVIMA should have implemented a number of regulations, particularly with biotech, to such an extent that all stakeholders, international companies and agencies know what the rules of the game are. The Ministry of Health will help to build new norms. INVIMA also plans to strengthen a national network of laboratories and will invest many human and technological resources in this project. The agency is already well positioned at the international level. It is even more recognized outside Colombia’s borders than it is nationally. That is why I want to strengthen INVIMA’s position nationally. I also want to reinforce the legal part of INVIMA, by strengthening its legal department of sanitary responsibility.


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Interview with: Mrs. Katherine Eissner, General Manager Andean Region Hospira

INTERVIEW WITH:

Mrs. Katherine Eissner, General Manager Andean Region Hospira Focus Reports: You started with Hospira just over a year ago. Could you describe the initial goals you set for yourself and how your expectations have lived up to reality over the last twelve months? KATHERINE EISSNER: The company started seven years ago when Abbott decided to spin off its institutional business. I believe that Colombia and Chile were the first countries in Latin America where Hospira decided to build an organization directly rather than via a wholesaler. When I arrived, I found that Hospira had strong image and reputation, sustainable sales and profit, market leaders in key segments, low rotation of people and a committed group. I was brought in as someone with a different background to reorder the organization for the next 10-15 years with a new view. The pharmaceutical industry has been very focused on ethics and compliance in recent years, and this is a theme where I’m a strong believer and that I am stressing. This is still an affiliate of an American company and as Hospira is in the stock market, some things are not negotiable. Nevertheless, in addition, I was hired to move the affiliate into a new direction of strong, healthy and profitable business ready to set a tone for the next decade. FR: Accessible healthcare for the Colombian population has favoured the use of low-cost pharmaceuticals. As the government has indicated a revamping of the national healthcare system, in what ways is Hospira leveraging its comparative advantages to

be favoured by the public system? KATHERINE EISSNER: What Hospira offers at the global level is exactly what the Colombian affiliate has in smaller proportions. Hospira is the strongest injectable provider in the United States and has a heritage of antibiotics, oncology and other segments, and the Colombian population will have the opportunity to obtain best in class injectables in terms of price, quality and accessibility. The company is also renowned for its pumps and consumables business as well as in the sedation market. Hospira is focused on patient safety and the cost-benefit of working with the right consumable for the right pump for the right patient, leading the way in the modernization of pump technology in Colombia. Hospira is the market leader in pumps and it has the best-in-class models and will continue to innovate. I would also add that innovation does not necessarily imply high cost; it means cost-benefit, i.e. what I am willing to pay and why. Why is the system willing to pay, what are the benefits for the system and patients? I think that the whole sector understands that the patient ultimately makes decisions and is starting to understand better his/her rights and making choices based on that. In Colombia you can change your EPAs whenever you want, or change doctors or choose between one clinic/hospital and another. There is no excuse for not having the best. Hospira is working on these three segments to be one of the most competitive companies in Colombia, where the market

MRS. KATHERINE EISSNER, GENERAL MANAGER ANDEAN REGION HOSPIRA


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is very aggressive and our competitors often challenge us as market leaders. We love to make the difference.

FR: Alexander Papanikolau of Hospira Austria said that he was building up his affiliate through much vertical integration, special partnerships with logistics companies. How important is this to Andean operations? KATHERINE EISSNER: Hospira Colombia is looking for long-term partnerships, especially with insurers, hospitals/clinics, and providers. The affiliate is looking for three to five years partnerships as well as some short-term partnerships based on a case by case analysis. Hospira invests in partners that are enthusiastic and see a larger, sustainable and shared future. What is the strategic importance of Colombia in the Hospira regional world? In the region, Hospira Colombia is currently market number 2, behind Brazil. We are even larger than Mexico, which is unusual in other private or institutional businesses. Globally, we are ranked in the top 25 worldwide. The Colombian affiliate is a sixty-person organization, with a strong brand image and market share in all the segments. It is a true success story, due to an experienced, empowered and committed team. The setup of the business is unique, so it is difficult to compare even inside Latin America because this affiliate is significantly “older� than almost every other Latin American affiliate. Therefore, this is not representative of the potential of the market. Brazil’s market should be five times that of Colombia and Mexico three times. However, Colombia still very important based not only on Hospira business, but also on the political and economical stability. If we were to return to Colombia in

Hospira is the strongest injectable provider in the United States and has a heritage of antibiotics, oncology and other segments, and the Colombian population will have the opportunity to obtain best in class injectables in terms of price, quality and accessibility. three or four years, what would you personally like to have achieved by that point? You will see new launched products in the 3 current segments (pumps, sedation generic injectables) as well as new complete product lines like oncology, managed by an ethical, professional, efficient and profitable organization. The structure will mainly grow in sales people and Colombia will be still responsible for the Andean Region You will see more mid-term and long-term synergies with targeted partners.

FR: What is your personal mission in Hospira? KATHERINE EISSNER: First, our mandate is to Fix the Foundation in the first year, which takes some time to do, but is a must to establish a solid ground. Second, continually improve and make the difference. Colombia has a competitive market with many choices. The opportunities you have to differentiate are really the details that make the difference. Last but not least, we need to Turbocharge Growth in a sustainable manner, guided by ethics and compliance to provide the best in class products to our markets.


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Interview with: Mauricio Botero, General Manager of Sanofi Colombia

INTERVIEW WITH:

Mauricio Botero, General Manager of Sanofi Colombia Focus Reports: Prior to working as General Manager of Sanofi Colombia, you worked in similar positions in Ecuador and Venezuela. What was your initial mission upon returning to Colombia and how have the last few years lived up to your expectations? MAURICIO BOTERO: The main mission I had upon my return to Colombia in 2004 was to consolidate the merger between Sanofi and Aventis and to recover the performance of the affiliate, which had experienced a difficult year related to performance versus the market and internal results. I was in Venezuela at the time, and was asked by the former Latin America VP to return to Colombia. FR: In more recent years, have there been any key milestones that Sanofi has achieved under your leadership? MAURICIO BOTERO: Sanofi is the number one company in Colombia today as a total pharmaceutical group. This includes all divisions and the company’s institutional sales. That is the main achievement that we, as a team, have made in Colombia. Four or five years ago, Sanofi Colombia began to develop other business lines in pharma, such as OTC and generic products, which is why Sanofi is the leading company in the Colombian pharmaceutical market at the moment. The affiliate also had several new product launches – not only blockbusters, but local developments as we have an industrial facility in Cali where Sanofi develops generics and OTC products. Having worked as the general manager MAURICIO BOTERO, GENERAL MANAGER OF SANOFI COLOMBIA

of the Colombian affiliate for a number of years, what would you identify as the key characteristics of the Colombian pharmaceutical market? Dynamism is an important characteristic. Colombia has one of the biggest institutional markets in Latin America. We also have the fact that in Colombia there are many local players. IMS audits 150 companies in Colombia, the majority of which are local or Latin American companies. There are only 25 large pharmaceutical and R&D companies in Colombia. Colombia also has a very high and innovative distribution channel, especially for retail. If you compare Colombia with other Latin American markets, retail in other countries is in hands of very few clients. It is the opposite here – pharmacy chains, wholesalers; and it is a very sophisticated and dynamic market. Newcomers from countries like Venezuela or Chile are entering the market. It is an interesting market for new players, and some participants are specifically coming in order to be part of the pharmaceutical market, particularly OTC.

FR: In 2012, Sanofi had net sales of €35 billion, and the organization stands out as one of the top pharmaceutical companies in the world. What is the relevance of Colombia to Sanofi’s regional and global operations? MAURICIO BOTERO: For 2013, Colombia will be Sanofi’s third largest operation in Latin America, after Brazil and Mexico. Venezuela used to be ahead of Colombia, but with


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the acquisition of Genfar, Colombia will surpass Venezuela. As I mentioned, Sanofi is the number one company in Colombia at the moment. As a total pharmaceutical group including Genzyme and Pasteur, Sanofi is miles ahead of the competition.

FR: With the acquisition of Genfar, what are your expectations that will come about as a result? MAURICIO BOTERO: The local expectation is to consolidate our number one position in the total market, be the number one generics company and place Colombia as a hub for generics activity in the Andean and Central American region. Genfar currently has large operations in Ecuador, Peru, Venezuela, and Central America. Revenues are $150 million, and $70 million are in Colombia alone. There are many expectations to consolidate Sanofi as a leader in Colombia in generics and accelerate penetration in other countries. Essentially, we are buying time. Establishing a generics business is not easy when you are starting from scratch. With this acquisition, Sanofi will accelerate its generic strategy in other countries. FR: Sanofi is a very diverse company that invests in many therapeutic areas. What do you expect to be the main growth drivers in your portfolio for 2013? MAURICIO BOTERO: The primary source of growth will come from the generics business and some new launches that we did in 2011/2012. In terms of branded products, a highly specialized product for cancer, will be an important driver this year as well. Sanofi has also launched some new OTC products. After 2013, some new molecules from the corporate pipeline will arrive.

The local expectation is to consolidate our number one position in the total market, be the number one generics company and place Colombia as a hub for generics activity in the Andean and Central American region. FR: How important is R&D to Sanofi’s operations in Colombia? MAURICIO BOTERO: R&D is important and will be even more so when these new molecules arrive in two years. Sanofi Colombia is a semi-hub for clinical studies, but for new molecules we will see some very interesting projects coming from Genzyme and Pasteur; in addition to Sanofi’s own developments. Sanofi has a product for diabetes, which will be launched in 2014, another in Genzyme for multiple sclerosis and the development of the dengue vaccine of Sanofi Pasteur. In addition to the corporate portfolio, we have a local portfolio based on generics and OTC products. It is the perfect balance for growth. FR: What is your vision for Sanofi Colombia in the next few years? MAURICIO BOTERO: My vision is to continue being the number one company and consolidate this position in the pharmaceutical market, to be one of the most important health providers in the country and to be a hub for generics for the Northern Cone countries. I want to show Sanofi is as a diversified group in pharma. I am proud of the organization. It is amazing to work here. Ever since I joined the company, I have wanted to grow, and Sanofi has provided that for me.


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Interview with: Rafael Arango, Director General Grupo Amarey

INTERVIEW WITH:

Rafael Arango, Director General Grupo Amarey Focus Reports: What impact will the reforms by Minister Gaviria have on the medical device and pharmaceutical industries? RAFAEL ARANGO: Colombia has a growing and ageing population therefore demand for health services and products will grow. The constitutional court declared that everyone has the same rights for health. That is great because previously there were clashing problems between the two different systems: contributive and subsidized. No matter what happens, those two systems are now equalized, meaning that the system has to provide more services. Every Colombian has now the right to demand those services. The demand for services will be much greater in the future than it is today. The constitutional court also decided that only one of the contributive or subsidized schemes would be allowed, since the government could not decide. The amount of services and money that the government has to invest in health will continue to grow. These three factors will make the Colombian health market grow in the long run. FR: The group has a number of companies in diverse niches and with diverse portfolios. How do you choose which medical devices are needed in Colombia? RAFAEL ARANGO: We have a department at Amarey that researches the key industry trends in the pharmaceutical world. Additionally, many Amarey employees attend various congresses in many of the areas the group represents. This is how the Group sets

Rafael Arango, DIRECTOR GENERAL - GRUPO AMAREY

strategies. In terms of devices, minimally invasive surgery is the biggest trend in the industry. Invasive surgery is now smaller, less traumatic, and recovery is much faster. Whatever exists in this area, we want to be there. Robotic surgery is another key area. Amarey is the distributor of an American company called Intuitive. When you see the developments in technology, it is just like laparoscopic surgery twenty years ago. Amarey is distributing also the robot thru its subsidiary Ucitech in Panama where robotics is growing and becoming a huge success. For a 3-million person country, this is amazing. Thus, Intuitive wants to create a platform for surgery. They are allowing other companies to work with their technology. At the end of the day, the Da Vinci robot will become the ¨Microsoft¨ of surgical equipment. Other companies are now bringing in their technologies and they want them to be compatible with Intuitive. If Amarey can manage that platform here in Colombia and Costa Rica where we also have distribution, as well as Panama, the Group will be riding the wave of the new laparoscopy and in gen-

Recalcine buying Lafrancol and Sanofi buying Genfar are acknowledgements of the market changing in Colombia.


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eral the newest minimal invasive approach in the region. Amarey is also searching specialized products for intensive care units (ICU). Most of Amarey’s pharmaceutical products are geared towards that. Considering that hospitals are now redeveloping their structure so that most beds are for intensive care, this is a very good strategy. Diagnostics are also very important as it is better to prevent than to treat.

FR: What makes you the partner of choice? RAFAEL ARANGO: When I am trying to convince companies that Amarey is the partner of choice, I usually bring them to the company. We show them what Amarey has, what the Group has done with other companies, and the success rate of different products. When you compare Amarey’s distribution to other distributors, Amarey is number one. The people we hire are the best. We bring people from the pharmaceutical business that used to work in multinational companies with a wonderful record. When we started the laparoscopic business I brought one person from J&J who knew the business in and out. When Amarey started distributing for Stryker, we put together a completely different team focused on that particular field and they became very successful.. The pharmaceutical business is changing, such as the pressure to lower prices. Amarey used to be a specialized company, in the sense that we liked effective products for particular diseases. Usually those products were unique. The company needs to move to other types of pharmaceuticals and broaden its portfolio. Recalcine buying Lafrancol and Sanofi buying Genfar are acknowledgements of the market changing in Colombia. In that sense,

Invasive surgery is now smaller, less traumatic, and recovery is much faster. Whatever exists in this area, we want to be there. Amarey is also moving. The Group is engaging in new agreements with companies that offer different kinds of medicines. I still want Amarey to continue looking for very niche molecules with good solutions, but only in very niche markets with no competition.

FR: What is your vision for Grupo Amarey in the next few years? RAFAEL ARANGO: I want the minimally invasive surgery, diagnostics and ICU businesses to develop much more, which will bring success for the company during the next 30 years. Amarey is planning to grow 33 percent this year. This is aggressive growth given the economic climate. We need to shoot high to find out how far we will get. Amarey also needs to become even better in distribution. The company has invested greatly to be the number one distributor in Colombia, with the best numbers in satisfaction and services. Furthermore, our inter-company development in communications technology has allowed us to work much more efficiently. The Group has opened outlets in other cities. Its distribution operation is more structured, and Amarey is handling many different products. National and international companies love this. For three years, we have been distributing successfully for Roche, GSK and Pfizer, for example. I am proud because these multinationals have operations here but they are giving us products to be handle by us.


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Interview with: Alejandra Calderon & Andrés Rivera, Operations & Sales Manager - Cegedim Colombia

INTERVIEW WITH:

Alejandra Calderon & Andrés Rivera, Operations & Sales Manager - Cegedim Colombia Focus Reports: Can you briefly summarize Cegedim Colombia’s scope of activities and operations, as well as the structure of the affiliate? ALEJANDRA CALDERON & ANDRÉS RIVERA: We are in charge of validating and guaranteeing operations and sales in the Andean Region and the Southern Cone. The Colombian affiliate focuses primarily in “Mobile Intelligence,” our CRM solution, enabling our customers to have a 360° view of all their stakeholders. Besides the CRM, Cegedim also focuses on database management activities. OneKey is , the biggest database in the world, with more than 8,2 million records, and 100% accuracy and validated phone numbers. Sales activities are also focused on promoting other products, such as AggregateSpend 360° to control promotional spend, Primeum –Cegedim to manage incentive compensation, Xtelligence business intelligence reporting tool and Physician Connect to build influence networks. FR: How would you describe the integration process of both companies and what have been the main synergies between Cegedim and Dendrite in the Colombian context? ALEJANDRA CALDERON & ANDRÉS RIVERA: It had been a big surprise because Dendrite was much bigger than Cegedim in the Americas. While there were some difficulties to link two different cultures, each brought their own assets. Dendrite, a public company in the share market, was focused on profits and

product personalization. Cegedim was more focused towards customer service, process optimization, employee training, etc.; and proposedstandardized products that can be adapted.

FR: Given the recent healthcare reforms proposed by Minister Gaviria, what impact might this have on Cegedim’s operations in Colombia, and what adaptations will you have to make as a result? ALEJANDRA CALDERON & ANDRÉS RIVERA: The system will be more efficient since the government will have more control. Price regulation will decrease the costs for the patients, and multinational companies will have to be more flexible. Cegedim will help these companies redesign their strategies to be even more competitive. Multinational companies need to focus on institutions in addition to the private market, and ensurestrong customer relationshipsthrough good follow-up with patients about treatments. The service has to be complete: not only delivering a product but also providing good attention to the patient. FR: What have been the main growth drivers in Colombia for 2013? ALEJANDRA CALDERON & ANDRÉS RIVERA: Mobile Intelligence is Cegedim’s main product in terms of revenue. Consequently, one of the main growth drivers in Colombia and the region for 2013 will be the Mobile Intelligence regional deployments. Moreover, Cegedim Colombia will be offering some new

Alejandra Calderon & Andrés Rivera, OPERATIONS & SALES MANAGER - CEGEDIM COLOMBIA


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products in order to increase its solutions portfolio. One of them is“AggregateSpend 360.”This already exists in Europe and the USA. It allowscompanies to manage expenses related to samples, sales representatives, and promotional material. Also, “Premium– Cegedim,” a product born from a joint-venture, enables themanagement of incentives given to the sales force.

FR: Given the increasing biotech industry in Colombia, will you be tailoring your business to this crucial part of the pharma industry here? ALEJANDRA CALDERON & ANDRÉS RIVERA: Yes. We are also placing special focus on the larger Columbia-based companies - proposing standardized products that are more affordable. Cegedim is also diversifying by targeting medical devices companies. In this niche, Cegedim has developed a specific Mobile Intelligence configuration for medical device companies. FR: What makes Cegedim the partner of choice? ALEJANDRA CALDERON & ANDRÉS RIVERA: First of all, Cegedim is focused solely on the life sciences industry. This provides the company with a real advantage as we have knowledge of the industry through a vertical vision. Cegedim understands the industry and knows the needs of its customers. Secondly, we have the support of a truly international group; Cegedim operates in 80 countries with headquarters in Boulogne-Billancourt, France. Finally, we would say that the organization has good references; the biggest companies worldwide trust us. Our products are adapted to the needs of the industry. Our portfolio is a whole host of services: CRM, databases, business intelligence – reporting, incentive compensation, expense control and

interactive marketing and support services.

FR: Cegedim is an expert in marketing strategies and solutions, but what is your own strategy to further position your name in the Colombian pharmaceutical market? ALEJANDRA CALDERON & ANDRÉS RIVERA: Cegedim’s strategy is to strengthen the relationships with its existing customers, providing them with quality products and services. We want to satisfy our customers, and be a strategic partner for them. Cegedim is close to its customers, all of whom are supported fully throughout the process. FR: What would you like to have personally achieved by that point as well? ALEJANDRA CALDERON & ANDRÉS RIVERA: Cegedim has been a school for us; and we are just starting to understand the manyprocesses that lead to the prescription of a doctor. It is easy to become passionate about your work here, and there are many things to learn. The industry is moving through the institutional market, and there are less sales representatives. Cegedim is preparing as well to move the institutional market forward, developing products to support the key account management of companies (KAM). We are ready to support the customers. FR: What would be your final message to our customers? ALEJANDRA CALDERON & ANDRÉS RIVERA: The pharmaceutical industry and the medical device companies are going through many changes and challenges, such as reform, pricing regulation, increase of competition, and complexity of structure, just to name a few. Cegedim is helping them to look for better efficiency, and to create strong relationships. This process will lead to better treatment for the patient.


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Company index Advance Scientific Group.................... 7

Medtronic............................................ 13

ANDI....................................................... 7

Merck Sharpe & Dohme..................8, 11

ASINFAR...............................................11 Baxter.................................................. 13

Ministry of Health and Social Protection.............................................. 4

Business Monitor International........... 4

Novartis................................................11

Camara de Proveedores de Salud..... 13

Novo Nordisk...................................... 10

Cegedim Colombia...............................32 Entitades Promotoras de Salud.......... 4 Eurofarma.............................................11 GEMEDCO........................................... 14 Genfar...............................................9, 11 Grupo Amarey..................................... 13 Hospira................................................ 13 Intuitive Surgical................................. 13 INVIMA.........................................4, 5, 11

Pan-American Health Organization..... 5 Procaps.................................................. 6 Productos Roche S.A............................ 8 Recalcine..............................................11 Sanofi................................................9, 11 Seventh Commission of the Chamber of Representatives................................ 4 Reckitt Benckiser.................................. 6

Janssen.................................................. 7

Takeda.................................................... 5

Johnson and Johnson.......................... 6

TecnoquĂ­micas...........................6, 11, 13

Lafrancol...............................................11

World Health Organization.................. 3


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PAST REPORTS


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Pharmaceuticals Colombia report 2013  

Written after exclusive interviews with Colombia's decision makers from local and multinational companies, manufacturers, distributors, expe...