Key facts about Localization in Mexico. Prepared in association with Olivares, a leading global law firm, this is an extract from The Pharma Legal Handbook: Mexico, available to purchase here for GBP 99.
1. Are there any rules or regulations requiring and/or encouraging localization in your country? What is the legal framework defining these localization rules and policies?
Largely, there are no specific rules or regulations requiring and/or encouraging localization in Mexico. Thus, there is no legal framework defining localization rules and policies in Mexico.
Although the legal framework may involve a slight advantage if part of a specific process is carried out in Mexico or may be appointed as a requirement.
2. Have there been any recent significant changes involving localization rules? If yes, when did they take place and what did they involve?
3. Is the process of obtaining a marketing authorization impacted by localization policies in your country? If yes, how so (what are the incentives received or the requirements)?
Despite the lack of a specific legal framework defining localization rules and setting policies in Mexico There are some provisions, which may fall under localization policies in relation to marketing authorization process
Concerning drugs containing new molecular entities which are not authorized in other countries and are intended to be registered in Mexico, it is possible to file the report of clinical studies with the participation of the Mexican population demonstrating the safety, quality and efficacy of the product. This can be submitted instead of a Free Sale Certificate or its equivalent in other countries.
Even though such provision does not necessarily mentions that the study should be conducted in Mexico, it was amended in 2014 in order to stimulate the participation of foreign companies in Mexico.
Moreover, for the authorization of biologics it is required to conduct clinical trials in Mexico.
If the eventual MAH is a foreign company with no establishment in Mexico, the MAH must submit a license/certificate/document issued by the local corresponding Sanitary authority that proves that it has an authorized manufacturing facility in that country.
It is not necessary to have a subsidiary, however it is necessary to have a legal representative in Mexico.
The local representative must have a warehouse authorized by COFEPRIS (or a contract with an existing warehouse, in order to be able to be considered as legal representative of the MAH holder within the eventual authorization.
In general, the warehouse should mainly be an authorized site and have a registered Sanitary Responsible (a person in charge of supervising and managing the activities at the facilities).
Is not mandatory that the legal representative is a subsidiary or an affiliate of the Marketing Authorization Holder (MAH).
4. Is the pricing process for pharmaceutical products impacted by localization policies in your country? If yes, how so (what are the incentives received or the requirements)?
5. Is the reimbursement of pharmaceutical products impacted by localization policies in your country? If yes, how so (what are the incentives received or the requirements)?
6. Is the access to public or public tenders of pharmaceutical products impacted by localization policies in your country? If yes, how so (what are the incentives received or the requirements)?
In fact, on July 31, 2020, the “Specific Agreement between the Institute of Health for the Welfare of the United Mexican States (INSABI) and UNOPS” was signed for the execution of the Implementation Project called “Acquisition of medicines and medical supplies” for the period 2021-2024, which allows open international competitive bidding modality (national and international market companies) for the consolidated purchase of medicines under the procurement policies and procedures of UNOPS.
The Mexican Government transfers to UNOPS all the resources and UNOPS oversees implementing, tendering and contracting said activities, as well as managing the respective contracts with third parties.
Also, on January 28, 2020 a Decree was published in the Federal Official Gazette by the Ministry of Health which states the sanitary requirements equivalence and allows the importation of drugs without marketing authorization into México.
If the product has met all the requirements and procedures of the foreign regulatory agency, i.e., if they were granted a MA, this is considered equivalent to having complied with all the requirements of the Mexican legislation. In addition, products which have previously been approved by the EMA, FDA, Health Canada, the Swiss Agency for Therapeutic Products (Swissmedic) or the TGA in Australia can benefit from an expedited MA approval process with time frames up to 60 working days.
7. Are import tariffs, importation and/or exportation permits, trade and/or taxation of pharmaceutical products impacted by localization policies in your country? If yes, how so?
8. Are there any other incentives or advantages offered by the current local localization rules in your country? If yes, what are they?
9. Are there discussions about the possibility of implementing localization policies in your country? If yes, what are the proposed reforms and when should they come into place?
There are no specific discussions about the possibility of implementing localization policies.
On the other hand, some amendments have been proposed that may fall under the shadow of localization polices, such as “plant requirement”. The Mexican legislation used to state a “plant requirement”. Thus, it was required to have a manufacturing or conditioning plant in our country, in order to obtain a marketing authorization (even if the product was manufactured abroad and imported). This caused different pharmaceutical companies to sign hosting agreements with national companies to be able to sell their products, these national companies were, then, the holders of the marketing authorizations.
The plant requirement was eliminated in 2008. According to the current regulation, the holder of a marketing authorization still needs to have a manufacturing plant, but that plant may be located abroad.
Recently, a proposal to amend the Health Law Regulations was published. This project has proposed to include the “plant requirement” again.
In this regard, the Mexican Association of Pharmaceutical Research Industries (AMIIF), has conducted lobbying efforts in order to prevent the approval of such reform.
Moreover, there is a legal precedent issued by an International Court, ordering Mexico to eliminate said requirement. The International Court considered that Mexico violated the international treaty concluded with Central America, by demanding the “plant requirement”, since the principle of “national treatment” was violated, in relation to El Salvador.
Thus, we believe that the chances of such an initiative being approved are few, however, we continue to follow up.