Read the Conversation
Meeting highlights:
- Healthcare Financing Crisis: Colombia's healthcare system faces chronic underfunding due to an accelerated expansion of coverage without clear additional financing sources, an inverted structure as more people are in the subsidized regime than the contributive one, as well as assorted inefficiencies in the system. EPS (insurers) are spending more than they receive, leading to a supply chain breakdown and pharma companies halting sales due to unpaid debts.
- IQVIA's Strategic Role: IQVIA is actively helping pharma companies navigate this crisis by analyzing their portfolio viability in the retail vs institutional segments and forecasting scenarios beyond 2025. The shift toward out-of-pocket purchases is redefining market dynamics.
- Retail Market Relevance: As institutional funding weakens, some therapeutic areas are shifting to retail. IQVIA is supporting pharma companies in regaining retail competitiveness, especially for lower-cost products, after years of institutional market dominance.
- Colombia's Strategic Appeal: Despite financial turmoil, Colombia offers universal healthcare with broad access, high drug coverage (+95% of approved medicines), and strong innovation uptake, making it a compelling market for investment and clinical trials.
- Rebuilding Trust and Collaboration: To regain trust, pharma must contribute more than medicines through communication, transparency, and public-private partnerships. The emerging dialogue among key stakeholders signals a collaborative approach to rebuilding a sustainable healthcare model.
EF: How do you see 2025 from your perspective? What are the priorities on the agenda of IQVIA?
DR: The ultimate challenge in the healthcare system is financing. Almost 30 years ago, when the system was designed, part of the financing was expected to come from formal employers and employees, the contributive regime, was expected to account for about 75% of the population, and the subsidized regime was not supposed to exceed 25% of the population. What we see now is that the contributive system is smaller than the subsidized one. This represents one of the pillars of healthcare financing.
There are two other pillars: the national budget and taxes. Those two, historically, have been compensating for the deficit in the first pillar. This situation is not new. This has been ongoing for some time. What is different now is that, in the past, other governments designed processes or provided additional funding to stabilize the system. They would cancel debts and save EPS that has been underwater. That is exactly what has not happened this time. Every three to five years, we face a financial crisis because the Colombian healthcare system covers everything that has a sanitary registration or marketing authorization for commercialization.
Currently, over 95% of these registrations are automatically covered under the Plan de Beneficios en Salud, our national formulary. The remaining 5% can also be approved if the physician justifies that the patient needs it and has exhausted all options within the formulary. While this is fantastic from the patient’s perspective, it is difficult to cover financially.
Having lived in Colombia for the past 10 years, I have witnessed several healthcare crises. What makes this one different is how long it has been allowed to continue, around 14 to 16 months. Since EPS providers receive $100 but spend an average of $110 treating, diagnosing, and delivering medication to patients. As a result, the deficit continues to grow. Although ADRES (our funding body) does pay the EPS, the amount is insufficient to cover the actual costs. The EPS then pays logistics operators, known locally as “gestores farmacéuticos,” but these operators are also underfunded. They must choose which medications and therapeutic areas to prioritize and which pharmaceutical companies to partner with.
This leads to supply issues. Pharmaceutical companies cannot continue selling if they are owed significant amounts, such as one or two million dollars, for more than 200 or 300 days. At some point, they have to stop until a payment agreement is reached. That is what has been happening for the past 16 months.
Over the past 15 years, the institutional market has grown rapidly, increasing by around 12-18% every year. Meanwhile, the retail prescription segment (excluding OTC) was declining in volume but increasing in value. Nowadays, volume in the institutional segment has declined, and value growth has decelerated. Retail, on the other hand, is showing the opposite trend. While both segments move in proportion, they are not equal in size. The institutional market represents approximately 70% of the total, while retail accounts for about 30%.
Now, returning to the priorities for IQVIA, it is helping our clients navigate uncertainty, which means helping them understand whether their portfolio is retail-friendly or not. For instance, if you work in oncology or high-cost areas, the retail market is nonexistent, less than 1%. Nobody can afford it, and it doesn't exist. The product is not available in pharmacies.
In Colombia, EPS are legally required to cover medications, making it a difficult decision for patients to pay out of pocket. Still, that is happening. Some patients, albeit in small numbers, are turning to the retail market. Our priorities are helping the pharmaceutical industry look beyond 2025. Try to look ahead two to five years. Help them compensate or overcome what is happening in the institutional market. The good part is that demand remains strong. But pharma companies are deciding not to sell. The risk is too high.
IQVIA helps clients navigate this crisis and consider potential outcomes. We do not have a crystal ball, unfortunately, but we can help model scenarios. One of the most optimistic scenarios is that healthcare becomes a critical issue in political campaigns. In less than a year, Colombia will hold its first round of presidential elections. Something must change within the next six months, or it will become a challenging situation for the government parties to overcome.
EF: How important is it for IQVIA to be part of the conversations that are actively shaping the sector?
DR: It is vital. Over the past 20 years, and particularly in the last five, IQVIA has successfully understood the evolving needs of the pharmaceutical environment. We have developed several new business areas. Historically, we have been recognized for our data, but we have expanded far beyond that into areas that enable the pharmaceutical industry to make faster, more effective decisions.
For example, we offer a service that is growing at an amazing rate: contract sales and patient solutions, including support programs. It is not a third-party service; it is a fully dedicated service to support patient programs and assist medical sales representatives, or trade representatives that visit pharmacies.
If a pharmaceutical company needs a new supply coordinator but does not have the headcount, it can hire IQVIA to fulfill this role. This is an IQVIA headcount, including all training, compliance, and management support required to complete the work. This is a key part of our operation. As I always say, IQVIA has a global vision of being part of healthcare, supporting patients, and driving healthcare forward; that is our vision. Driving healthcare forward is not always as close to us as we would like it to be. However, with patient support programs, it becomes clear.
And right now, a vital part of the conversation is the impact that the healthcare system crisis is having on patients and on the pharmaceutical market. No one knows what will happen, we need to share information to build together and co-create future scenarios. And that is what we are doing every day now.
The conversation is very heavy. However, we find value in being part of it. Over the past decade, we have evolved to measure the institutional segment not only through public data but also through our own. And to upgrade the conversation towards a more 365-degree context, including the codependency and proportion between institutional and retail. That has always existed, but we have never framed it in this way. Now, it is especially relevant.
Many indications or therapy groups are migrating non-proportionally to the retail market or out-of-pocket market. This creates an opportunity for pharmaceutical companies to expand their presence in retail. Many forgot how to compete in the retail market. When the institutional segment is too large and growing rapidly, especially for high-cost companies, the retail segment may seem irrelevant. As a result, companies may have overlooked parts of their portfolio that could be successfully sold via retail and grow there. We are helping those companies navigate the competitive landscape and dynamics, as well as what capabilities they need to be successful in the retail market.
EF: What is it that makes Colombia so strategic? Why should companies invest a dollar in Colombia over a dollar elsewhere?
DR: Colombia still has one of the best coverage systems in the world, not just compared to Latin America, where the comparison is easy. Colombia is much better in terms of what is covered, including services, medications, diagnostics, tests, and appointments with physicians; everything is covered. In terms of possibilities for the healthcare industry, not only pharma but healthcare as a whole, Colombia is an attractive market because you can actually reach 50 million people unlike other markets, where you can only reach those with private insurance or the means to pay for it.
Today, the head of the largest bank in Colombia has the same coverage as a homeless person. There is a backlog of 2.3 years at INVIMA, but currently over 95% of the sanitary registrations are covered. Once INVIMA grants approval, the product can be prescribed and covered by the EPS. This has historically made Colombia a strong market for pharma. Even with price controls, volume and market penetration are significantly higher than in many other countries. So overall, it is a favorable business environment.
It is a market where innovation is fully covered. The newest oncology drug, once it receives regulatory approval, will be covered. That is not the case in most countries in Latin America, or even globally. Of course, it comes with financial challenges. Typically, the concern is about when the sanitary registration will be granted, which may be in three or four years. But once you have it, there's full coverage. Patient support is key in navigating access barriers. These barriers have always existed, but they are fewer compared to countries like Chile or Mexico, which have more privatized systems.
There is an additional advantage in Colombia. Until now, EPS has received incentives to be efficient and proactive in preventing diseases. Patients are cheaper if you can treat them earlier. We used to be an efficient market. Of course, there have been EPS that were not financially viable in the past, and other governments have also intervened and liquidated them. We will evolve into something else. The institutional market will not disappear; culturally, there is no possibility of that happening, but meaningful changes will be needed to make it sustainable.
EF: Earlier this year, IQVIA was recognized globally as a frontrunner in Gen AI. There is a lot of noise around the topic. How do you distill all of that, and how is IQVIA working to identify useful applications? What impact can that have on a healthcare system?
DR: Our priority for Gen AI will continue to be helping the healthcare environment make faster and better decisions. It has to be in a controlled environment. All of our efforts are going into closed-circuit systems. That means the model learns from your data and decisions, rather than from outside sources. It also makes it safer in terms of how data is shared. What we aim for is to help managers, senior managers, and others make informed decisions faster. The problem with having too much information is that anything could seem like the right path, depending on what you read or where you zoom in. There are too many sources and too many valid directions. That is where Gen AI comes in: to distill all that information and make it digestible so decisions can be made faster.
Because what happens when you have too many sources and too many options is that it takes a long time, a lot of effort, and a lot of people behind a decision. And it often ends up being trial and error; you are never really sure what the correct path is. For me, generative AI needs to help in this way: to filter out information that clouds judgment instead of clarifying it.
EF: How do you think we can build trust in healthcare? And how would you challenge the sector to take that step forward?
DR: The pharmaceutical industry has always coexisted with being both an angel and a villain. Sadly, history provides numerous examples of instances where the pharmaceutical industry played a villainous role, making it easy to conclude that it is all about profit, not the patient. But that is not the case for many companies. What we need to figure out is how to contribute to the conversation by bringing value beyond just selling drugs. It is also about communication and understanding. In many governments, not just Colombia, there are players who see pharma companies as a necessary evil.
It's the pharmaceutical industry that brings R&D, and innovation, sets standards of care, and runs clinical trials, and that’s an economic engine in many countries. The problem is we only look at part of the equation: the price charged for a drug vs. the cost to the government or healthcare system.
Now, using an example from Colombia: the financial situation is so dire that all the players are coming together to find a solution, which has never happened before. EPS, logistics operators, patients, physicians, and pharma, all typically have separate voices. However, now, eight different players are collaborating to create a financially viable path forward. It occurred due to a crisis, but overall, it may serve as an example of how to bring value to the table and hopefully be heard. Because we have not always gotten a seat at the table.
