The election of populist President Andres Manuel Lopez Obrador (AMLO) on 1 July 2018 heralded a new era of hope and optimism for Mexicans. In the first 13 months of his term, he has made full use of his popularity. With enviable approval ratings consistently exceeding 60 percent, he has been emboldened to undertake radical reforms, notably in the area of healthcare.


Healthcare in Mexico is a sore subject. With total healthcare expenditures in the country having stagnated at around 5.4 percent in the past few years – and half of that coming from out-of-pocket spending – government spending on healthcare trails miserably behind the OECD average of six percent. However, in his attempt to transform the healthcare sector, President AMLO may have inadvertently bitten off more than he can chew.


While stakeholders generally agree that historical underinvestment in health has resulted in huge unmet needs in the country – including a lack of human resources, infrastructure, and innovative medicines and medical technology – Mexico does boast some successful healthcare models like its highly lauded childhood immunization program and the introduction of the Seguro Popular in 2003, which added 50 million previously uninsured Mexicans to the public healthcare system. While 90 percent of Mexicans are ostensibly covered by some form of public healthcare, institutions and geographical fragmentation – across the key institutions of IMSS, ISSSTE and the now-defunct Seguro Popular as well across the 32 states of Mexico – has made it incredibly difficult for the efficient and consistent delivery of quality and affordable healthcare to Mexicans.


In March 2019, the Federal Commission for Economic Competition (COFECE) found that the three largest pharmaceutical distributors in Mexico (comprising 62 percent of sales to IMSS and ISSSTE) were colluding to inflate costs by up to 30 percent. Having run on a strong anti-corruption platform, President AMLO took a hard stance and centralized the procurement of all medicines and medical supplies through the federal Ministry of Economy. At the same time, he dismantled Seguro Popular and declared his intention to unify the entire public healthcare system under the newly created INSABI organization, ostensibly returning control to the federal government in order to weed out corruption.


Nevertheless, industry actors have lamented the lack of understanding of industry processes as well as a severe lack of clarity regarding the new rules of the game. Nearly 70 percent of the product tenders listed in the 2020 procurement round were not filled, leading to a debilitating shortage of key medicines in public hospitals as 2020 dawned. After patients and their families took to the streets to protest this shortage, President AMLO passed an emergency decree permitting the one-time bypassing of COFEPRIS, Mexico’s food and drugs regulator, for medicines manufactured overseas needed to meet the ongoing medicines shortage, drawing outrage from the industry.


However, even though uncertainty continues to prevail, dialogue seems to be resuming slowly through the concerted efforts of all stakeholders. On 7 February, key leaders from the public and private sectors sat down together to open a frank and productive dialogue on these issues. While a positive step in the right direction, much remains to be done, in the short term for the resolution of the current medicines shortage, and in the long term for the health of the overall sector – and for the welfare of Mexican patients.