With a regulatory authority risen to become a reference in the region and cost-competitive manufacturing, the pharma sector in Mexico is paving the way to fuel future growth, for local and international players alike. A healthcare reform under way is part of the recent structural reforms undertaken by President Enrique Peña Nieto’s government, which has one objective: restarting the engine of growth.
“I have always been firmly convinced that having an efficient and transparent authority could only generate growth in the industry you regulate” – Mikel Arriola, head of the Federal Commission for the Protection against Sanitary Risk (Cofepris)
Few emerging markets can boast changes and a reform agenda as ambitious as Mexico’s. Creating the conditions to drive growth in the pharmaceutical sector has been the top priority of Mikel Arriola, head of the Federal Commission for the Protection against Sanitary Risk (Cofepris) and undisputed regulatory star of the sector. “I have always been firmly convinced that having an efficient and transparent authority could only generate growth in the industry you regulate,” he notes. And since his appointment, back in April 2011, he has been walking the talk. Besides catching up on the backlog of 25,000 drug registrations left behind by the previous administration, the commissioner has pushed to cut the timeframe to authorize new medicines on the market from 360 to 60 days.
Today, the pharma sector represents 1.2 percent of Mexico’s nearly USD 1.4 trillion GDP and 7 percent of the manufacturing GDP, second in importance only to the buoyant automotive sector. Rafael Gual, general director of Canifarma, has made it his personal objective to transform the pharmaceutical industry into the most important manufacturing sector in Mexico. “Besides the numeric objective, what is important is that we are working closely with the government to ensure the pharmaceutical sector is recognized as an increasingly important player in the economic development of the country,” he notes.
According to IMS Health, by the end of 2013 the pharmaceutical market in Mexico was worth nearly USD 15 billion, with a compound annual growth rate of approximately 6 percent in the 2009-13 period, but only a modest 3 percent growth in 2013 and less than one percent in 2014. Today, with an 84 percent volume share, Mexico is the second market in the world for penetration of generics behind the US.
Healthcare is one of the next items on Peña Nieto’s busy agenda. “When Seguro Popular was approved a decade ago, we were aware that this was a mid-term reform and that the next step was the integration of the public institutions providing healthcare services in Mexico and the possibility of interaction with private care providers,” comments Julio Frenk, former minister of health and currently dean at the Harvard T.H. Chan School of Public Health. After universal enrollment – today almost completed – the next step is universal coverage, which means access to a package of comprehensive healthcare services with financial protection.
Over the last decade, despite the number of Mexicans enrolled skyrocketing, total expenditure on healthcare increased from 6 percent to just 6.2 percent, well below the average 7.4 percent of other Latin American countries and the 9.3 percent average of OECD countries; on top of this, nearly half is still paid directly by patients. Additionally, the Ministry of Health recently announced a cut of nearly USD 650 million to the health budget.
The first in a series of two reports on Mexico called ‘bringing energy to health’, this new pharma report on Mexico, available today on PharmaBoardroom.com for free download, looks at the ways in which Mexico is bringing vital lessons learned to healthcare reform, and the steps that need to be taken to turn Mexico into a globally competitive pharma nation.
Mikel Arriola, federal commissioner of Cofepris
Julio Frenk, dean at the Harvard T.H. Chan School of Public Health
Enrique Ruelas, former president of the National Academy of Medicine
Guillermo Soberón, Mexico’s former minister of health
Miguel Salazar, president and country managing director of Boehringer Ingelheim
Pedro Galvís, managing director of Merck
Alexis Serlin, country president of Novartis
Cristóbal Thompson, executive director of AMIIF