Juan de Villafranca: Challenges and opportunities of the Mexican Pharmaceutical Industry

It is important to mention the role of AMELAF (Mexican Association of Pharmaceutical Laboratories), founded in 2003, as an independent organization that represents 45 Mexican companies that operate 83 pharmaceutical plants throughout Mexico. Many laboratories are already 70 years old and today are managed by the second and third generations.

The Association promotes a pharmaceutical industry that is responsible and trustworthy: Mexican laboratories that produce high-quality generic medicines that are safe, effective, and affordable for Mexico’s population.

The objective of AMELAF is to represent the interests of its members and provide them with tools to operate better and to be able to provide effective and safe quality medicines at competitive prices. Focused on issues such as regulatory, public market, private market, foreign trade, supply chain, and biotechnology.

The Mexican pharmaceutical industry needs to face many challenges, but at the same time, great opportunities are being identified. The Mexican market is worth more than 14,000 million dollars among the 15 leading markets in the world.

Most of the products of the Mexican industry are generic. However, there have been extensive inroads into biotechnological medicines. There have been significant investments in new plants with modern equipment and trained and highly efficient personnel.

The Mexican pharmaceutical industry is adapting to new realities, such as the unique composition of the markets and all the changes that have occurred in the supply chain. Nearshoring should be encouraged as an important regional strategy that can complement the production of medicines.

In this regard, work is being done on developing new suppliers at the local level, but the need to increase the manufacturing capacity of APIs is also emerging. Mexican medicines are starting to be exported and soon Mexico can become an export power.

Undoubtedly, the most important of the public policies that can affect the industry are in terms of regulation, where there is a clear high standard and there are no privileges, so it is a guarantor of the products quality.

The use of generic medicines should be promoted because industrial property rights are respected but there should be no abuses by patent holders. Encouraging the registration of new generic medicines helps the supply and reduces the prices of medicines.

In the case of Mexico, what will play a key role is to have an Industrial Pharmaceutical Policy, that can: provide long-term certainty to promote local production of pharmaceutical products and protect public health.

With intense public debate around healthcare reforms implemented by the current administration, many local companies are no longer seeing Mexico as a fair market. With the generalized statement of unproved corruption schemes, the Government has favored the import of Drugs rather than local manufacture. Elements that played an important role, such as the local added value, when at least a part of the manufacturing process was carried out in Mexico, are now disregarded in the tender process. The current administration is focusing on final price and savings, competition has broaden opening to Asian Companies, even without the requirement of local bioequivalence trials.

We are way past the point of “preparing” to be in the business, and most companies who want to be in this field made the decision years ago and are now in it. The trend is towards highly specialized and biotech products.

Access to the Mexican markets worldwide has however, turned to be somewhat unreliable because factors such as:

Cost contention policy of Governmental institutions
Health system fragmentation between public insurance, government institutions, public hospitals and private market
Supply chain problems due to the COVID-19 pandemic
Relaxation on clinical and technical evidence requested by the local authorities
Absence of a clear long term health policy

The main challenges are:

Absence of innovation
Patent evergreening
Increasing participation from companies that previously were hindered to enter the Mexican market
Price decrease
Quality risk due to the lower sanitary controls implemented by the new policies

What are the opportunities?

COFEPRIS, the National Regulatory Agency has the status of “reference agency for LatAm”. This because Mexico is now a member of PICS and has adhered to ICH making all requirements for drug registration in accordance with first world standards. These regulations include the starting materials purchasing, and with the supply chain disturbed as it is, there is a clear opportunity for Mexico to regain importance in API manufacturing and to take advantage of the nearshoring policy implemented in the USA. Clinical trials in Mexico are cheaper and easier to run.

Mexico has the people needed for the manufacture of some of the worlds most required APIs. There is a clear opportunity that can be harnessed for this unmet need, there is lack of support of the Mexican government, which through its policies continues to disincentivize science and development in Mexico. A cross-border operation, with part of the process carried out in the USA and part on Mexico is a way around this.

Pharmaceutical industry is not for everyone. The risks, costs and regulations to be addressed are extremely high and demanding. We depend on motivation, innovation, individual and teamwork. We have the resources to scale things that can’t be done in academia or government.

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