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Article: New hopes for Mexico

Sue Rees, July 2019

In December 2018 the new Mexican President, Andres Manuel López Obrador came into office after a landslide victory of over 65% of the votes (more than 30 billion voters). López Obrador was a former Mexico City mayor and has been a major political figure for over twenty years. Widely regarded as both a populist and nationalist, his ideology is to end poverty and improve the lives of his people by fighting corruption and increasing austerity within the government. 

MexicoIn theory, Lopez Obrador’s ideology should mean good news for Mexico. But can he deliver on his promises? Sceptics say the reform lacks sufficient detail. We spoke to Dr Xavier Tello, CEO of Strategic Consulting in Mexico, who has over 17 years’ experience in medical marketing for big pharma, and Talia Pagano, a local independent expert we work closely with in Mexico, for their views on the likely impact on healthcare under López Obrador’s presidency.

Dr Tello told us, “We have a word in Spanish – ‘ocurrencia’- which means a nice idea with no plan. This is how many people feel about this healthcare reform.”

López Obrador is proposing radical changes within the government structure and administration in an attempt to achieve universal healthcare coverage reduce out-of-pocket expenditure and unify the healthcare system. He has appointed his former Mexico City Health Secretary (a Swedish national) as the new Health Undersecretary to help support and implement his vision. He has also instigated shakeups within COFEPRIS, the regulatory authority, in an attempt to take greater control. The ‘Seguro Popular’, the insurance system for the poorest part of the population, is seeing major changes, with a goal to reduce corruption and integrate its functions with other current federal health systems such as IMSS, ISSSTE and PEMEX. The entire purchasing and tender system is likely to change under his leadership. Before taking office, López Obrador pledged, “We are going to open tenders to buy medicines anywhere in the world where they offer better prices.”

Dr Tello’s main concern is the lack of public health expenditure. Although López Obrador wants to significantly increase the amount of people getting access to healthcare, the budget for health is not changing. López Obrador says that by reducing corruption, introducing efficiencies and standardising salaries, the US$6.3bn budget will be sufficient. However, Dr Tello is not convinced, “The UK spends over eighty times more than Mexico on healthcare,” he told us, “The allocation per patient will not be enough to treat them adequately.”

What impact is the reform likely to have on pharma? Longer patent protection is benefiting pharmaceutical companies, in particular those with novel therapies and biologics. Talia told us, “Lobbyists from major multinational companies in the US have put strong pressure on Mexico to extend patent protection from 8 to 10 years to be in line with other markets. According to the AMIIF (Mexican Association of Pharmaceutical Research Industries), raising protection standards encourages research in Mexico and attracts investments from foreign industry to the country.” In addition, streamlining the drug approval process will help the industry, as the process is currently considered more complex than in other markets.

On the flip side, Dr Tello thinks there could be preference for national companies over global outsiders, “It may be the case that in order to commercialise drugs in Mexico in the future, companies will have to manufacture them in the country.” Our advice to global pharmaceutical companies wanting to be successful in Mexico is to look at investing in clinical research in the country, perhaps via national collaborations, and to ensure the brand is competitively priced.

If López Obrador succeeds in his objective of lowering corruption and achieving higher levels of transparency alongside more robust patent protection, then there is a view that Mexico is likely to become a more attractive destination for the pharmaceutical industry in the future.

One thing that is certain: at this time, nothing is certain!

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