COVID-19 has highlighted the importance of secure regional pharma supply chains across the globe, not least in Mexico where the state of Hidalgo has signed a deal with six Indian generics firms to establish a pharma hub for manufacturing and logistics.
One of the leading pharma markets in Latin America, Mexico is home to over 200 pharmaceutical companies, including many large multinationals. However, as in Europe, the USA, and globally, Mexico suffered medicine shortages in the wake of the COVID-19 pandemic and is now looking to build a domestic supply chain. This would in theory decrease the country’s reliance on sourcing active pharmaceutical ingredients (APIs) and essential medicines from Asia.
The Indian companies involved in the deal are Dr. Reddy’s, Zydus Cadila, Glenmark, Torrent, Hetero, and Ackerman Pharma, many of whom featured in PharmaBoardroom’s 2018 reports on Indian pharma. Having signed letters of intent, these outfits will have preferential status in the public procurement of medicines and eased registration and export rules. Some of the six already have manufacturing facilities in Mexico, while others have only marketing offices. There are currently around 21 Indian drug companies with business operations in Mexico.
Mexico has a lot to offer Indian generics firms, with a USD 10.6 billion domestic market, a large patient population, high generics penetration of over 80 percent, and good links with the rest of the continent. As Zydus Cadila Mexico’s MS Nagendra pointed out to PharmaBoardroom back in 2017, “Mexico is an attractive market for those companies that are looking for a manufacturing hub to serve the rest of the countries within the region. Mexico has very competitive manufacturing costs and the fact that Cofepris is very well positioned within Latin America makes Mexico a great gateway to neighbouring countries.”
Speaking in the wake of the latest deal, a Mexican commerce ministry official noted that, “Mexico has stringent regulatory standards, superior to most of its Southern neighbours, and its pharmaceutical imports last year stood at USD 4.3 billion.”
Indian pharma has been increasing its Mexican footprint in recent times, reporting a 67.6 percent growth in drug exports to Mexico in the first five months of the ongoing fiscal year until August to USD 92 million. This is up from about USD 55 million in the same period last year, according to Ravi Uday Bhaskar, director general of the Pharmaceuticals Export Promotion Council of India (Pharmexcil) in the Economic Times of India. Bhaskar added that in the previous fiscal year, total exports to Mexico were about USD 160 million.