Optimizing pharmaceutical distribution channels in Mexico
Mexico’s last decade of political and economic stability has brought about demographic changes that are shifting the structure and needs of the country’s healthcare industry. In parallel, the regulatory framework for pharmaceutical products has been evolving to address a new socio-economic reality of greater economic polarization, leading the different actors of the industry to test the new rules through innovation. Whereas innovation has traditionally been known as the development of new pharmaceutical products, in Mexico innovation pertains to experimenting with new business models that break away from traditional paradigms regarding the distribution, pricing and sales methods of pharmaceuticals.
In the short term, Mexico will face an accelerated aging population, which will generate significant increase in demand for medical services, particularly in the detection, prevention and treatment of chronic diseases. Under such market dynamics, no longer will product characteristics be the differentiating factor for their sales, but rather there will be an equal onus on secondary services and benefits that are offered to patients. This combination represents a great opportunity for both pharmaceutical laboratories and pharmacy chains across the entire spectrum of products; from prescription drugs to OTC and personal care. Ultimately, this is a chance for the industry to enhance the added value they can offer patients through their products.
At BacherZoppi, we are prepared to support, design and execute innovative marketing strategies across all types of distribution channels and of points of sale. Through the hard work of our talented sales-force in conjunction with the most current marketing data provided by our collaborators, we are determined to develop the best practices in optimizing pharmaceutical distribution channels.
The Pharmacy Modernizing Mexico’s Healthcare Industry
2011 marked the beginning of a decline in Mexico’s young population (ages 15-24), decreasing from 20.2 million in 2010 to 14.1 in 2011. This has also initiated a reversal of the country’s population pyramid. The group of elderly (those above 64 years old), is currently on a fast-track growth path that will see its expansion from 5.8 million in 2008 to an estimated 25.9 million in 2050. As we speak, two-thirds of healthcare expenditures in the poorest 10th percentile of the population stem from the purchase of medicines. With the new trend of people living longer, the demand for medicines, medical services and personal health products is bound to by amplified dramatically, further exacerbating the heavy medical expenses of the Mexican population.
At BacherZoppi, we are prepared to support, design and execute innovative marketing strategies across all types of distribution channels and of points of sale.”Equally as striking has been the change over the past few years in the way Mexicans purchase medical products and the structure of their points of sale. Recent studies have revealed that, while pharmacy chains and self-service locations only account for 30 percent of the total points of sale, they are responsible for 80 percent (in terms of quantity) of all pharmaceutical products sold.
All market actors are currently readjusting to accommodate this reality, including the pharmaceutical laboratories, distributors and pharmacies themselves. Pharmacies of all kinds, whether independent, chains or wholesalers, are now looking to determine their competitive advantage in order to survive under the new market dynamics. For independent pharmacy owners, this has meant a reduction in their presence as it becomes increasingly harder for them to compete with larger chains. They have been relegated to selling generic medicines that are not favored by the majority of consumers or medical experts. On the other hand, pharmacy chains are fostering a market penetration of private brands that has allowed both national and international laboratories to become direct providers of their own brands. This has meant an increase in volume of such products, counterbalanced by a reduction in their final sales price.