Mexican Pharmaceutical Market
Advantage Mexico

The Mexican pharmaceutical market worth $12 billion leads the Latin American market . It’s the tenth largest in the world. The next five years are projected to show tremendous growth in the market. Mexico has signed the largest number of FTA’s(Free Trade Agreements) in the world with 33 countries.These include Venezuela and Columbia(G-3), EU,Latin American Countries,Israel,Japan including USA and Canada(NAFTA).Being a member of NAFTA gives Mexico an opportunity to tap both the well-established pharmaceutical markets such as the US and Canada as well as the emerging Latin American pharmaceutical markets. The Mexican pharmaceutical sector is also the fastest growing sectors of Mexican industry. To add to all this there is a positive change in the mindset of Latin American businessmen and political leaders who have started realizing the the importance of India as an emerging economic power .The uncertainity and delay in grant of Visas for Indian exporters is history.Visas are issued promptly. There is immense business opportunity for Indian pharma companies in this region.

Public –Private Market Composition

Two thirds of the population is covered by the social security system. The public sector accounts for huge consumption and the Government health system alone consumes around US $ 2 billion worth of medicines. The Government procurement is done through the tender route and the key requirements are local content/ manufacturing and registration. This segment has stiff price competition, which is however compensated by volumes. In terms of private market, systemic anti-biotics, analgesics, anti-inflammatory/ rheumatic drugs, anti-cough formulations, vitamins, ant-acids, hormones, nasal decongestant, anti-spasmodic, and ace inhibitors dominate the consumption. Private and public sectors account for 80 percent and 20 percent of the total market in terms of value and vice versa in terms of volume. The prices of public sector are five times lower compared to prices of private sector. This results in a minor share for Mexican pharmaceutical firms in the private sector.

Current Industry Position-

The Mexican pharmaceutical industry has over 400 companies that produce pharmaceutical products in the country. The market is largely dominated by multinational companies – to the extent of 80 percent of total pharma production in the country. There is no single company that occupies more than 10 percent in the private sector. 36 companies cover almost 80 percent of the market. Leading local producers include Armstrong Laboratorios, Laboratorios Liomont and SicorDomestic companies are small and fragmented. More than 50% of the pharmaceutical companies are located in Mexico City (Distrito Federal), followed by around 10% in Estado de México; 12% in Jalisco; 6% in Puebla and 4% in Morelos.

Traditionally, Mexican firms have focused on the manufacture of generic products, for which patents have expired, targeting the public sector as their main customer. Innovative pharmaceuticals are almost entirely limited to multinational firms that transfer advanced technologies from their parent companies.

Parallel markets of drugs in Mexico:

1. Branded patented products.

2. Branded generics.

3. Interchangeable Generics (GIs).

4. Similares- generics that have not obtained bio-equivalence certification

5. Public health sector generics.

Generic market- Mexico offers a significant untapped growth potential for generic drugs. The total market for generics is projected at US$2.2 billion or 11 times larger than the current market estimates of US$200 million.

OTC Market-Due to the rising population and greater tendency for consumers to self-medicate the Mexican OTC market share is steadily rising. The concept of wellness is beginning to develop in Mexico, and is expected to become an increasingly important factor in creating demand for OTC healthcare products. As such, consumer’s awareness of preventative health measures, nutrition and physical fitness is expected to continue expanding. As a result of this, vitamins and dietary supplements (VDS) are expected to show considerable growth.

Major products- Cough, cold and allergy remedies, vitamins and dietary supplements (VDS), analgesics and medicated skin care products.

Major Therapeutic segments-

Cardiovascular- Mexico is dealing with two trends at the same time: a large young population and an ageing population, hence specialty care products are becoming increasingly important as diseases considered exotic in Mexico 7-8 years ago, are becoming a major source of growth for pharma companies.

Cardiovascular, anti-infectives, respiratory, vitamins, digestives, anti-tuberculosis, anti-malarial, anti-diabetic and analgesics, Isosorbide dinitrate, Verapamil, Diltiazem, Propranolol, Nitroglycerine; Procainamide, Lidocaine, Enalapril, Nifedipine, Furosemide, Minoxidil, Pravastatin, Simvastatin, Chlorthalidone, Spironolactone are some of the cardiovascular drugs used for treatments in Mexico.

Diabetes Market- Diabetes is growing every day in Mexico, and the Ministry of Health has declared it one of the most important health issues. Diabetes is of major concern in Mexico, specifically with reference to Type 2 diabetes when compared to Type 1. Estimated diabetic patients in Mexico are 4.4 million. Prevalence rate of adult population is estimated to be 14.2%.

Tolbutamide, tolazamide, glimipiride, etformin, pioglitazone, rosiglitazone, insulin etc are the popular drugs used in the treatment of Type 2 diabetes.

HIV/AIDS- Another disease of major concern is AIDS with a prevalence rate of 0.3%. Mexico is the second country in Latin America with highest reported cases of HIV. Anti-retroviral therapy is the most common therapy for AIDS. Lamivudine/zidovudine (COMBIVIR), zidovudine (AZT), ritonavir, indinavir, didanosine (ddI), lamivudine (3TC), zalcitabine (ddC), stavudine (d4T), nevirapine, saquinavir and efavirenz are the common drugs used for treatment of AIDS in Mexico.

Infections-Major infections in Mexico- Malaria, typhoid fever and dengue fever, and Meningitis.

Indian Presence-

Indian bulk drugs and finished formulations are exported to almost all the countries of Latin America .The Indian pharma companies have consolidated their presence in the region with a business of 400 million dollars. Some have established manufacturing units in Mexico and Brazil. Sensing the opportunity in Mexico, Indian and foreign generic producers have been expanding their presence here. Ranbaxy Laboratories and Wockhardt Limited have announced their Mexican joint venture plans, while in September 2005; Dr Reddy's Laboratories acquired Rochi's API (Active Pharmaceutical Ingredients) business in Mexico for $61.5 million.The leading pharmaceutical packaging company Bilcare from Pune is planning to start up a factory in Mexcico to tap the growing market. In 2005, Mexico sent an 11-member trade mission to India to explore ways in which to work with Indian pharmaceutical companies. As part of the visit, meetings were held with Ranbaxy Laboratories, Cipla Ltd, Biocon and Wockhardt. Elder Pharmaceuticals was the first Indian company to get a drug registered in Mexico. India’s leading generics player, Strides Acrolab Limited (Strides) has a manufacturing facility in Mexico.

India’s Strengths-

India is emerging as a powerhouse of pharmaceutical R&D. The strength of the Indian Pharma industry lies in leveraging the country’s strengths in organic synthesis and process engineering and developing, without compromising on quality, cost-effective technologies in the shortest possible time for drug intermediates and bulk activities. The Indian pharmaceutical industry has the highest number of plants approved by the US Food and Drug Administration (FDA) outside the US. It also has the largest number of Drug Master Files (DMFs) filed which gives it access to the high growth generic bulk drugs market. Generic drug manufacturing is the main growth driver for the future. India is set to capture a large portion of the market by leveraging its inherent strengths in technology, R&D facilities and trained human capital.

Ayurvedic medicines have become very popular in Latin America. Ayurvedic Spas are becoming fashionable in Latin America. Companies such as Dabur and Himalayas have already made entry. Given the Latin American regard for Indian Culture, spiritualism and yoga, there is very good potential to export Ayurvedic and natural products.

Latest trends -

New pharmaceutical regulations were enforced in 2005. By updating Article 376 of the General Health Law in January 2005, product registration is no longer unlimited. From now on, it will last for a five-year period. At the same time, bioequivalence standards are finally fully implemented. This means that copycat products are no longer exempt. Also, the drug classifications will be reduced to four categories.

As a result, the market is expected to shift. Bioequivalent generics, which represented around 2.7% of the pharmacy sector recently, are expected to increase their share in 2006, taking over most of the sector left by copycats, which accounted for 10.3% in 2003. For research-based products, the only competitors will be bioequivalent generics. There is a new wave of generic producers looking for business opportunities in Mexico.

Further regulation is also expected regarding over-the-counter (OTC) switching and advertising. OTC advertising was further regulated in 2005, which means that many 'miracle products' will be withdrawn from the market. Overall, the OTC sector will increase in 2006, fuelled by more consumer demand.

Opportunities

The growth potential remains high with a large chunk of the population not yet integrated, increasing life expectancy, the introduction of modern medical practices and potential for exports. The Mexican market is growing at a good pace with the increase in per capita drug expenditure of about US$15 in the last 5 years making the entry into the market a profitable proposition. Indian embassies have become proactive in Economic Diplomacy and provide information, guidance and assistance to Indian exporters and businessmen. Trade and industry bodies and the Pharmaceutical Export Promotion councils should organize more promotional events such as BSMs(Buyer Seller Meet), exhibitions, Participation in Latin American fairs and visit of delegations and take full advantage of the “Focus –LAC” programme of the Commerce Ministry which provide financial support for export promotion activities.

In conclusion we can say that great opportunity is available for the Indian pharma companies. They can harness the rapidly growing sectors like diabetes, cardiovascular and HIV/AIDS segments in the Mexican market. This would not only boost their business but will also help to increase the competition in the Mexican market which will definitely lead to the reduction of drug prices and help the Mexican consumer. Thus it is a win- win situation for both the people of Mexico and the Indian pharma industry.

References-

· Embassy of India, Mexico, Market Report on Chemicals & pharmaceuticals ,July 2002

· CII’s “Background Note on ‘Pharmaceutical Market In Mexico” Prepared by Cygnus.

· Business With Latin America-R Viswanathan

· www.businesswithlatinamerica.com

· http://www.espicom.com/prodcat.nsf/Product_ID_Lookup/00000392?OpenDocument

· http://www.genengnews.com/news/bnitem.aspx?name=1945420

· www.ibef.org

· www.thehindubusinessline.com

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