Mexico Health Review 2015 by Mexico Business Publishing

2015

“It is essential to develop a Universal National Healthcare System that treats each citizen equally, regardless of working status”

Dr. Mercedes Juan López, Minister of Health

In 2015 Mexico moved a step further to achieving its aims of universal healthcare coverage, with 96.7% of the population now covered by one or more of the key public institutions. Ensuring access to healthcare through the construction of a universal National Healthcare System is part of the government’s National Development Plan 2013-2018, the ultimate aim of which is an inclusive Mexico. The improving access to healthcare, combined with an aging population, and growing middle class, is also increasing consumer demand for medicines, creating a thriving pharmaceuticals market. Simultaneously the country is witnessing an epidemiological shift from communicable diseases to chronic degenerative diseases, due in large to the well-documented growing obesity problem. Looking to address what many experts have characterized as a ticking time bomb for public budget, the government is seeking to transform the nation’s healthcare model from a treatment centered one focused on disease prevention. Policies and programs that support innovative R&D for new medicines are being supported, with reforms to encourage investment, and to strengthen the country’s scientific and technological infrastructure being implemented. At the same time the sector’s regulatory agency COFEPRIS has been enacting swathes of reforms aimed at improving access through the streamlining of processes for pharmaceutical business operations, which has also resulted in a thriving generics market.

Mexico Health Review 2015 is being released at this time of transformation to provide the most comprehensive overview of the healthcare and life sciences industry. Through a series of insightful interviews with the public, private, and academic sector leaders, combined with in-depth analysis and data, the publication aims to foster industry communication and development, and serve as a catalyst for growth.

ALL RIGHTS RESERVED ÂŠ Toguna, S. de R.L. de C.V., 2015. This annual publication contains material protected under International, United States and Mexican Laws and international Treaties. Any unauthorized reprint or use of this material is prohibited. No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system without express written permission from Toguna S.A. de C.V. Mexico Health Review is a registered trademark. The publisher has made all reasonable efforts to provide accurate information, and the information contained in this publication is derived from sources believed to be true and accurate. However, the information in this publication should not be considered to be complete or definitive, and may contain inaccuracies or typographical errors. The publisher accepts no responsibility regarding the accuracy of information and use of such information is at your own risk. The publisher will not be liable to any party for any direct, indirect, special or other consequential damages arising out of any use of information in this publication. The publisher provides no representations or warranties, express or implied, including any implied warranties of fitness for a particular purpose, merchantability or otherwise in relation to any information provided by the publisher in this publication.

ISBN: 978-0-9968026-0-4

TA B L E O F C O N T E N T S 1

STATE OF THE SECTOR

CLINICAL RESEARCH & INNOVATION

PUBLIC HEALTHCARE

MEDICAL DEVICES & INFORMATION SYSTEMS

PRIVATE HEALTHCARE & INSURANCE

BIG PHARMA

BRANDED GENERICS & OTC

PHARMACIES, PACKAGING, & DISTRIBUTION

BIOTECHNOLOGY

MEDICAL TOURISM

DIAGNOSTICS

DOING BUSINESS IN MEXICO

10 11

THERAPEUTIC COSMETICS & BEAUTY

DIET & OBESITY

The last decade has been one of change for the Mexican healthcare sector. Population aging and

the increase of chronic non-communicable diseases are part of a significant demographic and epidemiologic transition fully driving the demand for healthcare services and placing universal coverage at the top of the government agenda. As a result, the healthcare sector value chain shows a positive outlook with the number of medical care units increasing by 14% between 2003 and 2013, government spending in medicines growing 64% from 2008 to 2012, and pharmaceutical companies investing more than MX$200 billion between 2007 and 2013.

This chapter provides a comprehensive overview of the current state of the sector, and puts the recent achievements into context based on the perspectives of the key stakeholders. It will also provide an analysis of regulation and governmental policy developments. Finally it will discuss the current status of the national healthcare system and the road to convergence.

HIGHLIGHTS • The sector as it stands • Demographic and epidemiologic considerations • Structure of the healthcare system • Healthcare policies implemented by COFEPRIS • The Sectorial Program for Healthcare • Public and private partnerships

STATE OF THE SECTOR

Our contribution to improving health is to research and develop innovative medicines that make a real difference in the treatment of patients. In a world where health challenges are increasing, we are committed to using the best science for life. And to make this a reality, we have invested more than US$ 4.2 billion in Research & Development around the world in 2013 in search of solutions that make a difference to people's health, because we know that health is our most valuable asset.

CHAPTER 1: STATE OF THE SECTOR 6

ANALYSIS: Universal Healthcare in a Changing Landscape

ANALYSIS: Key Figures & Decision Makers

VIEW FROM THE TOP: Mikel Arriola, Federal Commissioner of COFEPRIS

SPOTLIGHT: Key Policies

VIEW FROM THE TOP: Dr. Armando Ahued, Secretary of Health of Mexico City

VIEW FROM THE TOP: Rafael Gual, CANIFARMA

EXPERT OPINION: Healthcare 2020 Mega Trends, Deloitte’s GOV2020

VIEW FROM THE TOP: María Eugenia Bonilla-Chacín, World Bank

VIEW FROM THE TOP: Francisco Xavier Valdez, IMS Health

VIEW FROM THE TOP: José Campillo García, FUNSALUD

VIEW FROM THE TOP: Roberto Tapia Conyer, Carlos Slim Foundation

VIEW FROM THE TOP: Augusto Bondani, Former CAS of COFEPRIS

VIEW FROM THE TOP: Dr. Dagoberto Cortés Cervantes, CANIFARMA / Hormona

VIEW FROM THE TOP: Cristina Viruega Aranda, TAPVS

SPOTLIGHT: Third Party Authorization

VIEW FROM THE TOP: Dr. Enrique Graue Wiechers, UNAM School of Medicine

ANALYSIS: The Sectorial Program for Health 2013-2018

EXPERT OPINION: José Alarcón, PwC

UNIVERSAL HEALTHCARE IN A CHANGING LANDSCAPE Health protection is a universal right in Mexico as dictated by Article four of the Federal Constitution. Nevertheless,

DEATHS AND DISABILITY PER RISK FACTOR (DALY per 100,000)

only in 2015 has this achievement become attainable with

cardiovascular diseases

96.7% of the population currently covered by one or more healthcare institutions. This development can be attributed of President Enrique Peña Nieto’s National Development

cancers

12%

to a new alignment with one of the five fundamental goals

24%

chronic respiratory diseases

11%

Plan 2013 – 2018, the ultimate aim of which is an inclusive diabetes

Mexico. One proposed strategy to achieve the measures set out in the Plan consists of ensuring access to healthcare services through the construction of a universal National

12% 21%

Healthcare System, in which prevention, protection, and

other NCDs

14%

communicable, maternal, perinatal and nutritional conditions

promotion of health are prioritized.

injuries

DEMOGRAPHIC AND EPIDEMIOLOGIC CHANGES

Source: WHO

Mexico is in the midst of significant demographic and

average of 9.3%. Of the total healthcare expenditure

epidemiologic changes commonly associated with its

in Mexico, 51.7% is invested by the public sector and

current transition toward becoming a fully developed

48.3% is private, according to the WHO. Out-of-pocket

country, with an increasingly aging population and the

spending

rise of chronic and degenerative diseases. Life expectancy

the largest percentage among OECD countries and a

increased from 41.5 years in 1940 to 74.3 in 2012, with a

factor that could present a significant access barrier to

significant reduction in mortality levels across practically

healthcare services. Furthermore, human resources are

all demographics, a level of progress mainly caused by

a vital component in the improved performance in any

higher living standards. As Mexico’s population ages,

healthcare system, meaning that the strain of Mexico’s

the population pyramid is destined to invert, with the

healthcare sector is further exacerbated by the fact that

largest group consisting of individuals between 50 and

the number of physicians in Mexico is around two per

55 years old by 2050, in contrast to ten to 25 years old

1,000 inhabitants, which falls below the WHO minimum

in 2010. Developments in hygiene education and public

recommendation of 2.9. Not only does Mexico need more

infrastructure, with the introduction of potable water

physicians, but also a more equitable distribution across

and proper sewage disposal, have played an important

the different regions and states.

represents

91.5%

private

expenditure,

role in shifting Mexico’s epidemiologic profile from a focus on acute infections to chronic non-communicable

THE NATIONAL HEALTHCARE SYSTEM

diseases. In 1990 the three main causes of death in

In Mexico, the healthcare system is comprised of the

Mexico

pneumonia,

public and private sectors. The former includes institutions

and diarrhea, whereas today cardiovascular diseases,

such as The Mexican Social Security Institute (IMSS), the

diabetes mellitus, and malignant tumors are the principal

State’s Employees’ Social Security and Social Services

causes of mortality. In fact, 25 years ago, seven out of ten

Institute (ISSSTE), Petróleos Mexicanos (PEMEX), the

Mexicans fell within parameters for a normal Body Mass

Secretariat of Defense (SEDENA), and the Secretariat

Index (BMI), but the current scale indicates that seven

of the Navy (SEMAR), all of which offer social security

out of ten Mexicans are overweight. All of these factors

for a total of 72 million people including employees and

represent a strain on the healthcare system, creating a

their families. Additionally, the Ministry of Health, State

necessity to adapt in order to improve public access to

Healthcare Services (SESA), the IMSS-Oportunidades

high quality services.

Program (IMSS-O), and Seguro Popular rely on the federal

were

cardiovascular

diseases,

and state governments as well contributions to cover the

Despite its progress, the achievement of similar indicators

unemployed and self-employed, who otherwise pay out of

to those of other OECD countries remains a challenge

pocket expenses for private healthcare. The private sector

for Mexico. The average life expectancy across OECD

consists of insurance companies as well as healthcare

countries is 80.1 years and the neonatal mortality rate 2.8

providers such as private hospitals, clinics, and consulting

per 1,000 births, compared to 8.6 in Mexico. In addition,

offices. The number of people with private insurance is

healthcare spending in Mexico represents 6.2% of the

8.9 million, just 7.3% of the population. Beneficiaries tend

gross domestic product (GDP), well below the OECD

to duplicate coverage in both public and private sectors,

20 18

16.9

%GDP HEALTHCARE EXPENDITURE OF OECD COUNTRIES (%GDP)

6.2

5.9

5.4

Estonia

Turkey

7.1

MEXICO

7.3 Chile

Luxemburg

6.8

7.5

7.3 Israel

7.6 Korea

8.1

8.0 Hungary

Czech Republic

8.9

9.1

9.0 Iceland

Ireland

9.1 Finland

Australia

Slevak Republic

9.3

9.3 United Kingdom

9.2

9.3 OECD

Italy

9.3 Norway

Greece

9.4

9.4 Slovenia

9.5

Spain

Portugal

10.0

9.6

New Zealand

Sweden

10.9

Canada

10.3

Denmark

Japan

11.0

10.9

Austria

Belgium

11.3

11.1

Germany

11.6

11.4

France

Switzerland

11.8

Netherlands

4 2 Poland

private

public

Source: OECD 2014

and therefore optimizing services while expanding access

which represent 80% of the total sales volume. This trend

remains a challenge for the national healthcare system.

is caused by patent expirations, decreased prevalence of the drug development process globally, the Mexican

The National Commission of Social Protection for Health

marketâ&#x20AC;&#x2122;s price sensitivity, the national generics policy, and

(CNPSS), also known as Seguro Popular, was created by

new regulations on bioequivalence resulting in increased

means of reforming the General Law of Health in 2002 with

confidence in generics. From 2008 to 2012 government

the aim of providing health protection for all people without

spending in medicines increased by 64%, but integrating

social security. Having been implemented in 2004, the

new medicines into the catalogs of the General Health

organization offers The Catalogue of Universal Healthecare

Council and institutions such as IMSS and ISSSTE remains

Services (CAUSES) as well as the Fund against Catastrophic

a challenge for innovative pharmaceutical companies.

Health Expenditure (FPGC). Its creation is aligned with governmental efforts to achieve universal healthcare

By largely abandoning the development of new antibiotics,

coverage, and the agency currently provides protection for

big pharmaceutical companies have now placed an

55.6 million Mexicans.

increased

importance

chronic

and

degenerative

diseases such as diabetes, a market with a value worth

HEALTHCARE SECTOR VALUE CHAIN

MX$6 billion. With the fierce competition generated by the

Providers within the healthcare sector include hospitals,

introduction of generics, big pharmaceutical companies

clinics, pharmaceutical companies, medical devices and

are being increasingly forced to adapt strategies including

infrastructure, pharmacies and diagnostics laboratories,

incorporating generic drugs into their portfolios or

among others. According to the National Healthcare

establishing an increased focus on innovation, often through

Information System (SINAIS), the number of medical units,

the acquistion of other innovative companies.

consisting of private and public hospitals, ambulatory care, and social assistance units, increased from 19,505 to 22,228

Distribution channels also underwent important changes

between 2003 and 2013, which represents a 14% increase.

between 2014 and 2015, with mergers and acquisitions as

An important phenomenon is the growing number of

well as new international players transforming the rules

people visiting doctors at pharmacies as pharmacy chains

of the game in the segment, pushing manufacturers to

continue growing across Mexico.

develop new negotiation schemes within the supply chain. After the local plant requirement was derogated in Mexico,

Mexico is the eleventh largest pharmaceutical market in

many companies were able to adjust from a focus on

the world and the second largest in Latin America, with

manufacturing to concentrating investment on innovation.

an average growth rate of 4.3% per year between 2007 and 2013. The industry is worth approximately US$13.2

Investment in clinical research in Mexico is set to increase

billion as reported by the National Chamber of the

from US$160 million to US$500 million in ten years, according

Pharmaceutical

representing

to the Mexican Association of Pharmaceutical Research

1.2% of the countryâ&#x20AC;&#x2122;s GDP. Growth in the pharmaceutical

Industry

(CANIFARMA),

Industries (AMIIF). Mexico invests 0.54% of its GDP in

industry in Mexico is largely driven by generic medications,

research and development (R&D) and this figure is expected

to increase to 1% by 2018. Pharmaceutical companies

allowing additional treatments for more than one million

established in Mexico allocated 13% of their total investment

patients in the public sector. As for innovative medicines,

to R&D in 2011, representing MX$22.6 billion with 37.4% of

Mexico recently became the fastest country to authorize

this figure assigned to phase III clinical trials, according to

commercialization of new molecules. COFEPRIS issued 133

CANIFARMA. Furthermore, a significant part of the clinical

new market authorizations for 20 different therapeutic areas

research in the pharmaceutical industry is concentrated on

covering 73% of mortality causes in the country between

biotechnology. Today 35% of new drug registrations in Mexico

2010 and 2014. In addition to improving approval times

are biopharmaceuticals, most of which are designed to treat

for medicines, COFEPRIS became the fifth Latin American

cancer and neurologic and rheumatologic diseases. The

regulatory agency to receive the PAHO certification as a

legal and regulatory framework for biopharmaceuticals

reference body in 2012, enabling Mexican registrations to be

in Mexico is complete and clear, with a special focus on

recognized in seven countries in the region. COFEPRIS was

biocomparables, which are the subsequent versions of

also declared a functional agency for vaccines by the WHO

biotechnology medicines after patent expiration.

in 2014, now belonging to an elite group of 28 countries that possess this accreditation.

Regulatory improvement is inextricably linked with the above-mentioned improvements. COFEPRIS issued 23,736

While achieving universal coverage in Mexico has been

sanitary registrations from March 2011 to February 2015,

a difficult and ambitious process, the process can be

partly due to the implementation of a pre-authorization

galvanized with the cooperation of all actors in the value

process in which processing time was reduced by

chain. Increasing access to healthcare products and services

approximately two years on average. In addition, 31 active

is a common goal within the industry, with the ultimate aim

substances have been released since October 2011, resulting

of improving the health of the Mexican population in order

in 340 new market authorizations of generic medicines

to propel Mexico to the forefront of the world stage as a

that relate to 71% of mortality causes in Mexico, and

more productive and economically prosperous country.

STRUCTURE OF THE MEXICAN HEALTHCARE SECTOR STRUCTURE OF THE MEXICAN HEALTHCARE SECTOR Sector Public Social Security

Ministry of Health

Private

Funding Govermment Individuals contribution

Employeeâ&#x20AC;&#x2122;s Employer contribution

Workers contribution

Contribution of the Federal Govermment

Contribution of State Govermments

Health Seguro Popular Recovery fees

Purchasers ISSSTE

IMSS

PEMEX SEDENA MARINA Hospitals, clinics and physicians of these institutions Providers

Ministry of Health and SESA

IMSS Oportunidades

Hospital, clinics and physicians of these institutions

Users Workers of the formal sector

Source: PwC

Families of the workers

Retirees

Self - employed people, workers of the informal sector and unemployed people

Individuals

Employers

Private insurance companise

Private providers

Population with payment capacity

DR. MERCEDES JUAN LÓPEZ Minister of Health Having started her career as a surgeon specializing in rehabilitation medicine in Hospital Mocel, Dr. Mercedes Juan subsequently went on to become a Professor at the Interdisciplinary Center for Health Sciences of the Mexican National Railways. Subsequently, she began her political career and in 1988 she was appointed Undersecretary of Health Regulation and Development at the Ministry of Health, going on to become Secretary of the National Health Council of the Ministry of Health in 1994. She is the first woman to hold the title of Minister of Health. Dr. Juan has received several awards in recognition of her work, including the Benito Juárez medal awarded by the Mexican Society of Geography and Statistics and the Commissioner’s Special Citation from the FDA.

MIKEL ARRIOLA PEÑALOSA Commisioner of the Federal Commission for the Protection Against Sanitary Risk (COFEPRIS) Mikel Arriola holds a degree in Law from the University of Anahuac North, a Master’s degree in Public Policies and Public Administration from the London School of Economics and Policital Science (LSE), as well as a Master’s in Law from the University of Chicago. Arriola acted as Chief Compliance Officer of Financiera Rural and Deputy Director General of Banrural from 2003-2005. In 2007, he began his political career as Assessor at the Tresury, before going on to become General Director of Planning and Revenue at the Undersecretariat of Revenue and subsequently the Head of the Tax Legislation Unit at the same institution. On his arrival to COFEPRIS, Arriola enacted a sweeping reform of regulatory procedures, streamlining the approval process for pharmaceutical registrations and during his tenure; COFEPRIS has been named as a National Regulatory Authority of National Reference by PAHO and as a Functional Regulatory Agency for vaccines by the WHO.

DR. GABRIEL O’SHEA CUEVAS Federal Commisioner of the National Commission for Social Healthcare Protection (CNPSS) A graduate from the Medical Faculty of the University of Guadalajara, Dr. O’Shea specialized in Ophthalmology, and is certified by the Mexican Board of Ophthalmology. After working as a Professor, he became Assessor in the 55th and 56th Legislatures of the Federal Chamber of Deputies. Dr. O’Shea was subsequently appointed Director of the California Transplant Center in the State of Mexico, and in 2009 he was named Undersecretary of Health and General Director of the Mexican Institute of Health. In January this year, as Head of CNPSS, Dr. O’Shea implemented an initiative charging more than 1,400 managers with the responsibility for ensuring that the needs of the more than 57 million Seguro Popular affiliates are met.

JOSÉ ANTONIO GONZÁLEZ ANAYA Director General of the Mexican Institute of Social Security (IMSS) José Antonio González Anaya obtained a degree in Economy and Mechanic Engineering from the Massachusetts Institute of Technology (MIT), as well as a Master’s in Economy and a Doctorate in Economy from Harvard University in Massachusetts. González is a respected authority on economic issues, having had numerous books published including “Macroeconomic Reforms in Latin America: The Second Round.” In 1991, he held the position of Director of Economic Analysis at the Technical Secretariat of the Presidential Office. As well as working at the Ministry of Finance and Public Credit during the administrations of Vicente Fox and Felipe Calderón, he was a Senior Economist at the World Bank in the Bolivian, Paraguayan and Peruvian divisions. González also works as an academic at the University of Stanford in California.

| VIEW FROM THE TOP

A MODERN POLICY FRAMEWORD FOR A NEW ERA OF HEALTHCARE MIKEL ARRIOLA Federal Commissioner of COFEPRIS Q: What is the origin and function of COFEPRIS?

COFEPRIS represents 9.8% of the GDP, including the food

A: Historically Mexico did not have an autonomous body

industry, tobacco and alcoholic beverages, drugs, chemical

to execute policies relating to pharmaceuticals, so all

products, fertilizers and pesticides manufacturing, and

registrations were issued through the Ministry of Health.

medical, dental and ophthalmic disposable materials.

In 1984, constitutional reforms declared health a universal right in Mexico, although the tools to implement this

Q: What have been the key elements of your strategy

reform were not available until 2001 when Julio Frenk, the

since you were named Federal Commissioner?

Minister of Health at that time, made the changes to the

A: With so many registrations and renewals being requested

General Law of Health that created a financing entity for

after 2005, COFEPRIS faced a crisis by 2010, at which

public healthcare, known as Seguro Popular, along with the

point 8,000 marketing authorizations were unattended

regulatory agency COFEPRIS. The mission of COFEPRIS is

due to inefficient processes. This had a negative impact on

to protect the population from sanitary risks by means of

the market and meant that few products were available, at

several powers such as preventive measures, the issuance

high prices, to the point where COFEPRIS was not globally

of new regulations, combating informality, and the power

competitive. After being named Federal Commissioner

to act in the case of an emergency. The establishment

in 2011, the first strategic move made by my team was to

of COFEPRIS was the first step in creating a modern

expand access to medicines. The policy we implemented

policy framework for the regulation of pharmaceutical

was focused on opening up access to more alternatives

goods, and has driven significant increases in government

for medicines, vaccines, and medical devices. In 2010, 152

drug purchasing to achieve universal coverage. Drug

registrations were issued, and since 2011 we have issued

registrations have in reality been conducted in Mexico

more than 24,800, representing a market expansion of

since the 1920s; however, because manufacturers were not

around US$2.4 billion, as well as a 16,300% increase in the

required to renew their registrations, information on the

number registrations.

number of products available in the market was practically nonexistent. Only in 2005 did renewals become mandatory

We adopted two specific policies in order to empower

for all medicines, vaccines, and medical devices, which was

the consumer. Our first concerned generics and involved

a great step forward for the industry in terms of quality

unblocking 32 active substances related to 71% of mortality

and regulation. Today, the value of products regulated by

causes in Mexico that did not have generic versions despite their patents already being expired. Not surprisingly, these drugs had the highest prices in Latin America. We identified

OUT OF POCKET SPENDING (%) 60

the clinical applications related to those 32 substances, separated them by groups, and issued joint generics

53.8

53.0

52.1

51.1

49.6

authorization. The economic impact was positive, creating 48.0

45.5

44.8

competition among the generics that entered the market at the same time. By March 2015, 357 new generics made from these 32 active substances were on the market, representing savings of US$1.5 billion and an average price reduction of

61% for both public and private sectors. In fact, drug prices 20

prescribed for the three main causes of mortality in Mexico â&#x20AC;&#x201C; cardiovascular diseases, diabetes, and cancer â&#x20AC;&#x201C; decreased

91% on average. Furthermore, while generics represented 54% of the volume and 30% of the value of the total

Source: Ministry of Health

2012

2011

2010

2009

2008

2007

2006

2005

pharmaceutical market in 2010, these figures reached 84% and 52% of the total market in 2014, respectively.

The penetration and growth of generics in the market

our excellent scientific assets. We received the PAHO

comprises one of the best examples in the world on how

certification in 2012 to become the fifth reference

to improve access to medicines. Our other strategy is to

agency in Latin America. Sanitary registrations issued

launch new molecules on shorter timeframes; at one point

by COFEPRIS are currently recognized in seven Latin

we had the world’s slowest approval times. FDA and EMA

American countries: Ecuador, El Salvador, Colombia, Chile,

approval did not add value to our authorization process,

Costa Rica, Panama, and Belize. Exports have benefited

and the cost of this approval was also very high. As a

from other countries’ trust in Mexico. In the past, for every

result, we implemented an innovation-focused policy in

US$1 we exported we were importing US$7. Now the ratio

2012, and began to authorize applications from FDA and

is 1 to 5, with exports increasing 30% in the last two years.

the European Union within 60 working days. The number of new molecules registered increased from three in 2010

What

are

the

main

objectives

the

new

to 150 between 2012 and 2015. In addition, prices dropped

biopharmaceuticals regulation?

from MX$6,000 for a molecule for cardiovascular diseases

A: Since 2009, following reforms to the health legislation,

to MX$1,000, with per capita expenditures dropping from

biopharmaceuticals have been recognized under Mexico’s

MX$2,000 in 2010 to MX$700 in 2014-2015, on average.

legal and regulatory framework. Such products have strong growth potential since our per capita consumption

As a policy maker, my main task is to protect the consumers

is US$1 a year, compared to US$120 in developed

from

health

countries. New regulations provoked controversy, since

care products has dropped from 5% (of total household

health

risks.

Household

expenditure

some biosimilars registered as generics were bought by

expenditure) in 2006 to 2.5% today. Our measures have

the IMSS and ISSSTE. Safety was of huge concern due

been effective in reallocating resources, helping families to

to the lack of the necessary clinical trials. To balance

reduce their expenditure on medicines and use it for other

innovative biopharmaceuticals and biosimilars, we set

necessities. We have also managed to generate equilibria as

up strict requirements for such products. The regulations

a consequence of other policies of ours that have favored

issued in December clearly state that authorization of a

innovative manufacturers. We are now more competitive

drug depends entirely on clinical trials proving the safety

in terms of authorizing clinical trials and attracting these

and efficacy of that drug. Innovative products are the

to Mexico by means of two specific agendas. IMSS is both

reference for comparability tests on new biosimilars, while

the country’s biggest supplier of medicines and the biggest

established biosimilars have a timeframe in which they can

employer of doctors. Mexico’s National Institutes of Health

be characterized. Those who fail to comply will be phased

are highly specialized in many diseases and their research can

out. With the rules now widely available on how to launch

compete with developed countries. We have authorized both

biosimilar products, local manufacturers can comply with

IMSS and the National Institutes to pre-review and authorize

the market’s entry requirements more easily. The legal

clinical trials, reducing authorization from 3 months to 1

and regulatory pathway is now clearer here than in many

month. This promotes innovation in the country and presents

Asian, East European, and Latin American markets, so

an appealing message for investors. One key element in

we expect a lot of investment to come to Mexico. Our

bringing clinical trials to Mexico is the time regulatory

regulations are based on EMA standards, currently the

agencies spend on approving study protocols. Although

highest measure for biosimilars authorization. Finally,

60% of trials are conducted in the US – with most of the rest

active pharmacovigilance in the National Institutes of

taking place in Europe – we were also losing money to Costa

Health has already been implemented for these products.

Rica and Colombia. To make Mexico more competitive we needed to sort out backlogs in the authorization of clinical

Q: What can you tell us about COFEPRIS’ concerns of so-

trials. This industry invests US$80 billion annually, of which

called ‘miracle products’?

only US$300 million reaches Mexico.

A: We have a policy of zero tolerance for these products. A reform was issued in 2012 to regulate the advertising of

Q: How does the PAHO certification and recognition by

products that are not registered as medicines but are sold

other international bodies help Mexico?

based on treatment capabilities and curative promises. That

A: Such recognitions have an impact on the balance of

year, we phased out 60 products and 3,500 TV spots per

trade. Though Mexico is a manufacturing country, we

month. Then we obliged TV companies to ask for sanitary

have a trade deficit in pharmaceutical products because

registration before selling advertising spaces, enabling us to

we neither innovate nor export enough. Three years ago,

eliminate these products from television. Because we have

the international agenda was relegated, so COFEPRIS

official powers to attack the illegal market, our first target

did not have a recognized presence in the world despite

was “miracle” products, a non-regulated sector which poses

a risk to public health. As a non-regulated sector, more than

Q: What was COFEPRIS’ contribution to taxes on sugary

2.5 million units of miracle products were banned during

drinks and the ban on TV advertising promoting unhealthy

2011-2015, compared to 40,000 in 2010. Our task now is

food?

to ensure that all advertising of registered products is very

A: The tax was launched by the Ministry of Finance as

clear and does not provide misleading information.

part of the agenda to attack obesity. The three-point plan consists of prevention, medical attention, and regulation.

Q: The approval process for medical devices has changed

Our responsibility were the regulations implemented in

of late. How will this improve the sector in the short-term?

February 2014, which prohibited TV advertising during

A: A risk analysis we conducted in 2011 led us to deregulate a

programs with audiences predominantly consisting of

market of 14,000 registered medical devices. Up to that point,

children. As a result, we were able to reduce the amount of

the number of requirements for both simple and complex

spots of these products by 40%. Our new processed food

devices was the same, and this represented a huge obstacle

labelling policy has taken effect in July 2015, meaning that

for market entry. This policy’s first phase deregulated 1,669

companies have to be very clear on both their products’

products as medical devices, which represented 12% of the

total calories and the percentage of daily calories each

total market and saved the industry around MX$4 billion. Last

portion represents according to the source of nutrients.

December’s second phase deregulated 573 more devices,

The National Institutes of Health supported this initiative,

lowering prices, boosting access, and saving MX$1.4 billion. A

which is intended to work in an integral manner to fight

new policy was also issued, recognizing medical devices from

obesity.

Japan, the US, and Canada and authorizing them within 30 working days. Now, these foreign products represent 20% of

Q: What are your top priorities for 2015?

the total medical devices industry in Mexico. A fast turnaround

A: First, we must keep expanding the market, internally and

time is vital, since updated versions of medical devices are

externally, helping to tip the balance of trade. Renewing

often released within 6 or 8 months. Third parties are now pre-

our PAHO certification is another important priority ahead

authorized to register medical devices, decreasing approval

of our audit. Another target is the illegal market. Expanding

times from 30 months to 20 working days. To incentivize the

our robust formal market is our primary weapon, while

industry’s growth access must expand. The Mexican formula

informing consumers that prices are lower in the formal

to accelerate growth and improve access to medical devices

pharmacy stores than in the informal market is another.

has been quite straightforward. Growth stood at 1.8% during

Finally, COFEPRIS remains committed to protecting the

2008-2010 and increased to 20.3% in the 2010-14 period.

population from sanitary risks. As a result, we expect to

There is a clear correlation between efficient regulation and

deliver even better results both to consumers and the

industrial growth.

industry as a whole.

CHANGE IN APPROVAL TIMES SINCE PASSING OF INNOVATION ACT 400

360

350 300

300

290

270

250

220

200

203

180

180 150

150

120

120 90

100

Source: COFEPRIS

Mexico (after agreements)

Brazil

India

Argentina

China

Australia

Spain

Singapore

Saudi Arabia

Canada

Mexico (before)

| REGULATION SPOTLIGHT KEY POLICIES

requirements for biotechnologicala, further amendments

Since 2010, COFEPRIS has used regulation as a tool for market

were required to smooth out regulatory processes. Legislation

transformation. The commission has an impressive reach,

has now brought regulations in line with best international

regulating MX$151 billion worth of pharmaceutical products

practice on pharmacovigilance, manufacturing, and labeling.

per year. The interventions into health regulation have not

A major opportunity exists for potential investors. Per capita

only made higher-quality medications more freely available

consumption of biodrugs stands at US$1 per year, while

to consumers, but have also revolutionized pharmaceutical

developed countries’ per capita spend is US$120.

production. FDI into Mexico has reached US$350.6 billion since 2000, and the commission has focused on smoothing

Outlook: Legislation has made a point of holding

the regulatory path to market for investors. With 390,000

biotechnological and biosimilar drugs to high international

people employed directly and indirectly in the industry, the

safety standards, while the dropping of barriers to market

removal of barriers to market entry will bring with it higher

entry means that the Mexican health sector would appear

employment. Mexican pharmaceutical companies view

to be bidding to become a global leader in this new field.

COFEPRIS approval as a springboard to FDA certification, while major players have identified Mexico as a regulatory

INNOVATION POLICY

benchmark for the Latin American market. A number of

Between 2011 and 2014, 133 new innovative medicines –

flagship policies stand out as the main achievements to date.

across 20 different therapeutic classes – were launched, targeting 73% of the main causes of death in Mexico. Tadalafil,

GENERICS POLICY

the heart medication, is an example of an innovative drug

COFEPRIS’ generics’ policy pivots on making quality drugs

which has flourished in Mexico. Prior to entry into the market,

accessible to the Mexican consumer, both in the public

domestic consumers had to pay MX$20,670 for the product,

and private sectors. By focusing on drugs which treat the

with customs clearance and importation spiking the price.

main mortality causes – cardiovascular diseases, diabetes,

After regulation, Tadalafil costs the consumer MX$8,100.

and cancer – the benefit passed on to Mexicans is clear.

Cancer drug Prolia and diabetes medicine Empagliflozina

Drugs intended to treat these illnesses now cost less

also saw price-drops of an average of 70% Another major

than a tenth of that prior to new regulation. According to

change has been the removal of the local plant requirement.

figures, treatments for diabetes, cancer, and cardiovascular

Until 2011, Mexican law required drug companies to have a

illnesses have dropped in price by a similar margin. Since

manufacturing plant on Mexican territory to enter the market.

October 2011, the commission has released 32 active

Since the repeal of this law, 387 pending registrations have

substances, for use in 357 new generic medications.

been cleared for entry.

The new drugs address 71% of mortality causes to the estimated 1 million Mexican patients that have used the

Outlook: Innovative drugs are expected to draw investment

drug. Meanwhile, competition between new products has

of US$100bn over the next five years, as barriers to entry

resulted in a 61% drop in prices to the buyer – and a US$1.5

are cleared and regulations become easier to navigate.

billion saving to the economy as a whole.

COFEPRIS also predicts a 100% increase in the workforce of innovative firms operating in Mexico.

Outlook: COFEPRIS is likely to push this further. As of 2014, generics accounted for 84% of market volume and 52% of

MEDICAL DEVICE POLICY

market value. Application processes for drugs with FDA

COFEPRIS’ 2011 risk assessment led to the deregulation

and EMA approval are now under 60 days. With three new

of 14,000 registered medical devices, lowering a major

molecules registered in 2010, and an average of 50 per

barrier for entry. 1,669 devices were cleared for the market

year registered between 2012 and 2015, the streamlining of

in December 2011, and a further 573 products released in

regulatory processes is likely to continue.

January 2015. The deregulation freed up a total of MX$1.4 billion, representing more than a sixth of the total medical

BIOTECHNOLOGICAL MEDICINES POLICY

devices market. New policies allow medical devices from

Biotechnological medicines have found themselves in a phase

Japan, the US, and Canada to enter within 30 working days.

of latency. While only 26 biotechnological and two biosimilar drugs have been approved for the market over the last six years,

Outlook: Better regulation is improving utilization of

35% of all of all applications for sanitary registration for new

medical devices amongst the public as well as increasing

molecules are for biotechnological drugs. This has to do with

access to new technologies. With significant related

the cautious pace of legislative reform for biotechnologicals.

reductions to both family and governmental medical

While legislation did clear up uncertainties around the

expenditures the market is set to grow.

| VIEW FROM THE TOP

HEALTHCARE IN THE CAPITAL: A CHALLENGE AND AN OPPORTUNITY DR. ARMANDO AHUED Secretary of Health of Mexico City Q: In your opinion, what would constitute the most

the principal pathology in the country, and a chronically

significant challenges currently faced by the Mexican

overlooked issue, is oral health. We are also integrating

healthcare system?

education about healthy and unhealthy foods, as well as

A: The changing face of the healthcare industry within Mexico

portion control. As part of this program, we have enforced

City presents complex issues requiring innovative strategies

guidelines to make schools cavities-free and we recently

and solutions, which constitute both a challenge and an

declared a school with 1,700 students free of cavities. The

interesting opportunity. Demographic and epidemiologic

promotion of healthy eating habits and oral hygiene at a

transitions already represent a significant burden for both the

young age is invaluable to foster a generation of healthy

public and private healthcare system in Mexico. Population

grownups and to prevent chronic problems caused by an

aging directly impacts healthcare systems as a direct result

overwhelmingly overweight and obese population.

of the rise of chronic and degenerative diseases such as diabetes, hypertension, cardiovascular and cerebrovascular

Q: In terms of the obesity crisis, what measures have been

diseases, cancer, and metabolic diseases. This generates

taken during your administration to tackle the growing strain

a greater need for specialists, resources, and technology,

placed on the healthcare system by chronic degenerative

exacerbating the strain on the Mexican healthcare budget

diseases?

and representing a significant challenge for the country due

A: Mexico currently has the highest level of childhood

to its focus on a reactive treatment model rather than on the

obesity and the second highest level of adult obesity, which

implementation of effective strategies for prevention. The

constitutes a sanitary emergency due to its correlation to

healthcare system must undergo several transformations

chronic and degenerative diseases. There is overwhelming

in order to address this shifting epidemiology. As a result,

evidence to suggest that seven of the ten main causes of

our strategy focuses on prevention, health promotion, early

death, including certain cancers, are associated with obesity.

detection, and effective adherence of patients to treatments.

As a result, addressing this problem would greatly alleviate

We have implemented a more proactive model aimed at

the strain on the healthcare system. Mexico City’s government

preventing chronic conditions and providing medical care

is employing several measures, including traffic light guides

in a timely way. In order for Mexican population to be able

on food packaging to indicate nutritional value and installing

to comply with guidelines for healthy balanced lifestyles,

water fountains in schools to lower soft drink consumption.

education is a priority.

Subsequently, a law was issued specifying that water is to be offered in restaurants for free. To promote physical activity

Q: What strategies have you implemented in order to

we are currently increasing the number of urban gyms in

address these aforementioned chronic healthcare issues?

public spaces from 600 to 1,000. We also promoted small

A: An important factor in addressing this crisis is

positive lifestyle changes with the installation of machines

acknowledging that the responsibility for healthcare not only

inside subway stations to dispense tickets to anyone who

lies with the authorities; any strategy must be implemented

completes 10 squats. Within the subway system, we have

at a grassroots level within the family. It is crucial to empower

another program called “Ola Blanca” to measure blood

the public with the necessary knowledge and capacity for

pressure. Finally, our program “Menos sal, más salud,” in

self-treatment by stimulating the modification of inherent

collaboration with the Mexican Association of Restaurants,

lifestyle habits. One of my main agendas as Mexico City’s

enforced the removal of salt from restaurant tables to combat

Secretary of Health has been the incorporation of obligatory

consumption levels, a major cause of hypertension.

healthcare education at schools. This way we are addressing

the issue in an integral and intrinsic way at a young age,

Q: The Mexican Genome Project found that unique genetics

before unhealthy habits can become ingrained. For example,

within the Mexican population create higher susceptibility

we have implemented a program called “SaludArte” aimed

to diabetes. Which implications does the disease have for

at demonstrating effective tooth brushing techniques since

the population?

A: Diabetes is the second highest contributory factor to

examination,

pharyngeal

exudate,

electrocardiogram,

mortality after cardiovascular diseases. Mexicans inherently

prostate-specific antigen test, mammography, Papanicolaou

carry some genes associated to type 2 diabetes, the onset

test, and ovarian ultrasound are provided at no cost. The

of which is associated with an unbalanced diet, high sugar

challenge remains on increasing access to create a universal

intake, and sedentary lifestyle. Treatment for consequences

healthcare system.

such as dialisis throughout the progression of the disease can cost up to MX$2,000 per session becoming a major burden

Q: One of your most successful programs is “El médico en

for both private and public healthcare. Raising awareness

tu casa.” What gaps was this designed to address and what

of the disease among patients is crucial for alleviating

results has the program generated?

risk factors during early stages through lifestyle changes

A: “El médico en tu casa” stemmed from an urgent need to

and adherence to treatment. Unfortunately, studies have

reduce neonatal and maternal mortality in the delegations

found that seven out of ten people neglect to make these

of Iztapalapa and Gustavo A. Madero. We began to map the

changes despite being provided with information regarding

demographic with a door-to-door initiative, and realized

potential complications. Concern rises only after the disease

that the health problem in Mexico extended beyond pre-

has progressed irreversibly, despite the fact that early

natal care. The program began with a staff of 3,000 medical

interventions bear lower costs and are more effective.

professionals and later extended to the 16 delegations of Mexico City. Since the program started in September 2014 we

Q: Mexico has low cancer screening rates - what efforts are

have visited 1,660,000 homes and have provided treatment

being made to create a more preventative mindset?

for 103,000 people in vulnerable conditions, 17,000 people

A: We have implemented sizable campaigns promoting

living with disabilities, 90,000 elderly people confined

prostate cancer detection as preemptory testing is not

to their homes, 900 bedridden patients, 140 terminal

carried out in 85% of men and 99% of people never undergo

patients receiving palliative care, and 90 people who have

a colonoscopy. Thus cancer is diagnosed at advanced

been abandoned. Of the 19,618 pregnant women we have

stages when it has already metastasized. Early cancer

treated so far, 6,700 had previously never received pre-natal

detection increases treatment options and the possibility of

checkups, even on the second or third trimester, largely due

curing it. As for breast and cervical cancer, 65% of women

to a lack of education about the importance of these visits.

fail to be tested on a regular basis in Mexico despite the

We also implemented the Law of Anticipated Will which

prevalence of units providing prostate-specific antigen tests,

allows terminal patients the option to die at home, provided

mammography studies, and ovarian ultrasounds for free. We

with palliative care and medical staff. Recently, the National

have 12 clinics conveniently situated at subway stations and

Polytechnic Institute (IPN) announced that 3,600 of its

two in the Supply Center in Mexico City that carry out daily

physicians will participate in this program. The government

tests, but clearly there are more needs to be done to combat

plans to audit every home in Mexico City, so even those with

poor detection rates.

social security are not being overlooked. I am extremely optimistic this initiative will provide medical support to the

Q: What strategies have you implemented to increase

most vulnerable members of society.

access to healthcare services within Mexico City? A: In Mexico City we have two complementary healthcare

Q: In terms of your legacy, how would you characterize your

systems; the Law of Gratuity covers 90% of the public and

mindset towards the Mexican healthcare sector?

Seguro Popular 80%. Seguro Popular covers costs accrued

A: While all issues related to health are multi-faceted,

by catastrophic diseases with the national institutes of health

complex, and in constant flux, efforts to address them should

and the hospitals of the Ministry of Health, while Gratuity

be consistent and comprehensive. We are considering the

offers primary and secondary level care in clinics and in the

possibility of opening two new general hospitals, a clinic for

32 secondary public hospitals in Mexico City. The Law of

HIV/AIDS, a geriatric clinic, and remodeling ten health centers.

Gratuity states that those who live in Mexico City with no

We are committed to continue working to change the public

access to social security are automatically granted access

mindset to incorporate healthy habits. Provided the public

to free medical consultations, medication, laboratory tests,

begin to lead a healthy, balanced, responsible lifestyle, the

medical imaging tests, hospitalization, and surgeries as well

pressure on the healthcare system can be alleviated greatly.

as to all health promotion, prevention, and early detection

Our proactive healthcare model is setting the foundations

programs. In the medical units at subway stations checkups

for future administrations to focus on prevention and health

are performed, complemented by laboratory and medical

promotion and we have been pioneers in issuing laws designed

imaging tests to detect the 66 most prevalent diseases in

to protect vulnerable members of society and guaranteeing

Mexico. Hematic biometry, blood chemistry, general urine

more comprehensive access to healthcare services.

| VIEW FROM THE TOP

A UNIFIED FORCE FOR INDUSTRY GROWTH RAFAEL GUAL Director General of the National Chamber of the Pharmaceutical Industry (CANIFARMA)

Q: As Director General of CANIFARMA what is your

evidence that pharmaceutical companies chose to belong to

overview of the pharmaceutical industry?

CANIFARMA. Fifteen years ago every company that operated

A: The pharmaceutical industry has greatly evolved in

in Mexico had to subscribe to their umbrella organization so

the last five years. In the past four years we designed a

belonging to CANIFARMA was mandatory. The legislation

development program and introduced it to the transitioning

has been modified and nowadays pharmaceutical companies

government in 2012. We have also made a point of the

can choose whether to stay or leave us. They chose to remain

potential the pharmaceutical industry has to become one of

and we have about 200 members organized in sections

the pillars of the Mexican economy. In 2013 both the Minister

such as medical devices, pharmaceutical companies, and

of Health and the Vice-minister of Economy on the new

veterinarian companies. Thus, we are neutral mediators

government acknowledged the pharmaceutical industry

between pharmaceutical companies. We take the same

as a strategic area for the health sector and a priority for

stance on the competition between generics and innovative

the Mexican economy, which in turn created a number of

medication and that between innovative biotechnologicals

opportunities to foster the growth of the pharmaceutical

and biosimilars. In every case we promote a fair and neutral

industry, and its involvement in development programs.

environment for the negotiations.

Q: What are the pillars for the advancement of

Q: What is your perspective on the cooperation between

CANIFARMA?

pharmaceutical companies and the public health sector?

A: There are three pillars for advancement. The first is to

A: Pharmaceutical companies are enthusiastic to cooperate

focus on industrial development in order to increase the

with the public sector, especially to perform clinical trials.

participation of the pharmaceutical sector in the chemical

To foster this cooperation the most important factor

gross domestic product from 17 to 20%, for which we

would be to reduce the time required by the public sector

are working alongside the government. The second is to

to authorize clinical-trial protocols, which would in turn

increase clinical research in Mexico. We are negotiating

encourage companies to increase their involvement with

agreements towards this objective with IMSS and several

the IMSS. There is progress in this regard as COFEPRIS

National Institutes of Health, such as nutrition and

has already improved their regulatory processes, but there

oncology, as our country can become the most important

are several obstacles, mainly the complicated procedures

center for clinical trials in Latin America with the support

of approval of new drugs in the formularies of IMSS and

of these institutions. The main obstacle is the long time

ISSSTE, who represent the largest share of the sector.

required to move forward the legislation for clinical trials.

CANIFARMAâ&#x20AC;&#x2122;s main objective is to facilitate and optimize

The third pillar is to improve the regulatory framework, for

the time for the approval of clinical trials in Mexico.

which we are working alongside COFEPRIS, who acquired recognition as a national reference regulatory agency from

Q: What measures should be taken in order to reduce the

the Pan American Health Organization (PAHO) in 2012.

time required for new medicines to come to the market?

This is a huge asset for the pharmaceutical industry since

it opens new markets in Latin America.

be helpful and we hope that these institutes will work

Standardizing

these

different

procedures

would

together to this end. On the other hand, the industry has to

Q: What is CANIFARMAâ&#x20AC;&#x2122;s role in the pharmaceutical

create new processes to introduce innovative medications

industry?

to these institutions. A joint venture between both parties

A: CANIFARMA is unique in Latin America. Most countries

would be convenient so as to share the risk of introducing

have only two organizations representing each side:

new medications, by sharing also the cost of treatment

innovative and generics. Mexico is the only country to have

against its effectiveness; this is, if the drugs provided by

an umbrella organization like CANIFARMA which brings them

the industry improve the result of the treatment, the cost

both together and can mediate between them. We have

would be paid by the public sector. If on the contrary, the

treatment is ineffective the pharmaceutical companies

established mechanisms to facilitate the access to these

would cover the costs of the treatment.

funds for smaller companies by promoting meetings and providing mediation between them and financial

Q: Some companies might believe that Mexico does not

institutions. We started this process in June 2013 with

have the proper facilities for manufacturing medications.

support from the government and have now a number of

In your opinion what does Mexico need to become a

success stories with national and international companies.

manufacturing hub? A: I think that Mexico is already a manufacturing hub. Some

Q: Is pharmaceutical innovation too expensive for national

local companies may not be satisfied with the regulatory

pharmaceutical companies?

framework and the tax incentives, but many small foreign

A: It may be expensive but there is funding and work with

companies come to Mexico and grow in the Mexican market.

several institutions that carry out innovative research,

Big pharma may have some problems to maintain their

through mechanisms such as the CANIFARMA R&D prize

facilities in Mexico because their global policies must be

for universities, or the relationship of research institutes

adapted to Mexico. However, they recognize that our country

and scientists with different companies. The problem is

has very strong advantages, such as the size of the population,

that institutes and universities develop many interesting

a strong local market, and a privileged geographical

molecules that never reach the market. CANIFARMA

situation. Besides, Mexico has a strong intellectual property

is working to develop the linkage between research

framework, and the new PAHO recognition is also a warranty

institutions

for the investment of international companies.

problem is the dependence of the public health sector on

and

pharmaceutical

industries.

Another

generic medications. IMSS and ISSSTE have the final say Q: Are imports and exports balanced within the country?

to determine the cost of medications. The advantage of

A: The current market is very unbalanced for Mexico. We

generics is that they are safe and thus can be provided to

have to import many active pharmaceutical ingredients and

a large number of patients at a more affordable cost. The

there are little exports to Latin America. The exports market

public health sector, with its limited budget, is unwilling to

is growing with the PAHO recognition but there is still a lot

fund innovation, even if it would be advantageous in the

of work to be done. We believe that the market for active

long term. This problem however, is not unique to Mexico, it

principles will be balanced in three or four years and our

is quite common of public health sectors all over the world.

sector will not be dependent on imports from other countries. Q: What is the public health sector’s main priority? Q: Are there any opportunities for innovation in Mexico?

A: Right now, the public health sector is mainly interested

Who should fund them?

in treating the main diseases that affect the Mexican

A: Mexico has several opportunities for innovation on

population, such as diabetes and cardiovascular diseases.

clinical research. President Enrique Peña Nieto has

Since a large population of patients requires treatments

proposed to increase the investment in R&D to 1% of the

for these diseases, there is not enough budget to treat

GDP by 2018 but this target is unlikely to be achieved.

other illnesses that affect smaller numbers of patients.

We believe that investments on R&D should come from

Prevention programs to reduce this type of ailments are

pharmaceutical companies in joint ventures with the

being implemented, but CANIFARMA is not involved in this

government. The pharmaceutical industry invests about

process as this is a public health decision. These programs

3.7% of their sales in R&D in Mexico, a very different figure

aim at reducing the cost of treatment by controlling the

than that from the government.

progress of the disease.

Q: Companies that are just beginning their operations

Q: There are predictions that in 2020 Mexico will become

in Mexico often claim that it is very difficult to acquire

a manufacture center in Latin America. How close are we

financial support. Should CANIFARMA become involved?

from that?

A: When companies are just starting they may find

A: It’s a work in progress. We have to accelerate the

difficulties to acquire funding, but this is slowly changing.

growth of the pharmaceutical industry in order to achieve

Our recent recognition as a priority sector for the Mexican

this goal. Our objectives are to increase governmental

economy is opening doors. Right now we receive support

support for the development of innovative medicines,

from several institutions such as Nacional Financiera and

to improve negotiations with the companies that are

the National Institute for Entrepreneurs (INADEM). Also

affiliated to CANIFARMA, and to promote their growth.

Bancomext and ProMéxico provide financial support

Our final objective is to increase the number of members

for exports and CONACYT funds research. We have

in the chamber to 250, in the different sections.

| EXPERT OPINION

HEALTHCARE 2020 MEGA TRENDS

electronic medical records (EMRs). Analytical tools take

Extract from Deloitte’s GOV2020 - The dominant health

into account patients’ genetic profiles to suggest the best

care trend in 2020 is, quite simply, pervasiveness. Mobile

treatment options and explore alternate treatments based

health apps, telemedicine, remote monitoring, and ingestible

on the experiences of others with similar symptoms and

sensors generate rich data streams, allowing doctors and

genetic profiles. Year 2020 sees the creation of warehouses

patients themselves to track every heartbeat, sneeze,

of health data that use big-data analytics to identify patterns

or symptom in real time. Bioinformatics and analytics

and inform public health decisions and research.

allow for personalized risk assessments and tailor-made medicine. Breakthroughs in robotics, 3D printing, and stem-

Participatory medicine

cell research make surgical procedures safer and improve

Patients use their own health data to make better

outcomes. Health care systems shift their focus to wellness

decisions. Patient-centered information networks, such

and prevention to compete against insurgent competitors.

as Crohnology for Crohn’s disease, help people better manage their health, share best practices with fellow

PATIENT-POWERED HEALTH CARE

patients, and lower medical costs by tap-ping into the

“Tailor-made” medicine

knowledge of the crowd.

The use of bioinformatics in health care grows exponentially. Based on human genome sequencing and body composition,

NEXT-GENERATION CARE

custom medicines, and treatments are developed and

Holography-assisted surgery

prescribed to patients. This helps treat dreaded illnesses

Specialized surgeons perform holography-assisted surgery

such as cancer and genetic disorders—where failure rates

to treat patients remotely and instruct other physicians

of medicines are historically high. Government closely

on operating procedures. Holography makes surgery less

oversees research, testing, and therapeutics; regulates

invasive and potentially offers better outcomes for patients,

accuracy and affordability; and plays a centralized role in

while also freeing up surgeon time. Philips and RealView

determining best practices for treatment plans.

Imaging have developed live 3D visualizations that can be touched and marked up to help doctors during surgeries.

The mHealth revolution Mobile technology proves to be a game-changer for

3D printing in health care

health care. The ubiquity of mobile phones and growing

3D printing technology revolutionizes surgical practices,

health needs make “mHealth” an afford-able and easily

giving practitioners access to identical replicas of certain

accessible alternative to traditional health care. Advanced

body structures—and eventually organs. It reduces surgical

mHealth applications include telemedicine, sophisticated

errors and improves rehabilitation in post-op. Joint

diagnostics

into

replacement surgeries are cheaper and use customized

smartphones, personalized services, and self-monitoring.

prints of patient’s joints. Medical education uses this

Governments address security and privacy risks arising

technology to create cheaper prototypes for teaching,

from the growth of mHealth.

avoiding ethical issues associated with using cadavers.

THE DATA REVOLUTION

Breakthroughs in stem cell research

Social media analytics in health care

Developments in stem cell research lead to the production

Anonymized data from social networks are used for

of synthetic organs and smart drugs to improve physical

biomedical research, personalized medicines, clinical trials,

and mental function. Breakthroughs such as induced

and the construction of predictive models. Advances in

pluripotent stem (iPS) cells short-circuit the long debate

health-focused, natural-language data processing allow

over the use of human embryos in research and speed up

analysts to use big data to identify the decisions patients

stem cell therapies to cure human disease. Government

make and, more importantly, why they make them.

incentivizes research and development and introduces

Government uses social media analytics to gain insights into

policy measures to navigate ethical issues hindering

patients’ consumption patterns and health requirements.

widespread market adoption of this tool.

through

attachments

plugged

Health care analytics is a $21 billion industry in 2020. Remote monitoring

Evidence-based care

Sensor-enabled remote monitoring devices transmit vital

Doctors use high-end analytics to diagnose and treat patient

patient biometrics to physicians and other caregivers in real

conditions by mining massive clinical information from

time. 2020 sees the use of ingestible “smart pills” with sensors

to wirelessly relay information on health indicators within the

Outcome-based payment

body to a smartphone. Doctors can track health indicators

2020 sees the growth of value-based care models that link

more closely and receive precise information about which

the price of care to the value of the performance or health

medications their patients actually took, and when.

outcome, holding medical practitioners accountable for the care they provide. The model is driven by performance

Health care robotics

metrics such as hospital readmissions or patient ratings,

Robots sterilize surgical tools without human intervention,

and by linking doctor payments to patients’ health.

reducing the incidence of infection and freeing up hospital staff time. Robotic systems dispense drugs in pharmacies

Rise of private health insurance exchanges

with zero errors while automated kiosks allow patients

Private players form a significant part of health insurance

to enter medical symptoms and receive customized

exchanges in the United States and some other countries.

recommendations

New exchange products supported by technology open new

and

information.

Automation

dramatically reduces errors and helps improve outcomes.

avenues for these players, offering customers more options.

The global medical robotic systems market reaches $13.6

Private exchanges match public ones in terms of volume and

billion in 2018.

spread insurance products at competitive prices.

HEALTH CARE SYSTEMS

HEALTH CARE IN DEVELOPING NATIONS

An expanded definition of health

“Nutrition transition” and disease paradox

Health care systems evolve from “sick care” to wellness.

Globalization, rising incomes, and a shift to sedentary

Nutrition, behavioral, environmental, and social networks

work spur the growth of lifestyle diseases in developing

act as vital health foundations. Health care is defined not

countries, including obesity, certain types of cancer,

by care facilities but by the status of consumers’ health.

diabetes, strokes, and heart attacks. As global fast-food

2020 sees the convergence of allopathic and alternative

chains expand and cheap, calorie-rich foods become

medicine,

widely available, countries undergo a “nutrition transition,”

and

management.

physical

Government

and

behavioral

promotes

medical care

changes in health, diet, and exercise that accompany

through incentives, requirements, and payment models,

wellness

economic progress. This engenders a shift from curing

particularly in countries where it is the primary payer.

disease to controlling and managing chronic conditions. Globally, over 1.5 billion adults are overweight; 500 million

Integrated care

of them are obese.

Accountable care organizations (ACOs), patient-centered medical

homes

(PCMHs),

outcome-based

payment

Growth of telemedicine

models, providers, physicians, and payers join together

to provide patients with bundled services, providing

nations improves, telemedicine extends health care—and

care at lower cost. Hospital-physician alignment allows

particularly access to specialist care—to more citizens. Local

prioritized

treatment

for

patients

requiring

the

communication

infrastructure

developing

urgent

clinics and practitioners can consult remote specialists via

attention. Electronic health records and e-prescriptions

video-conferencing, mHealth applications, and remote

improve accountability and transparency. Government

diagnostic tools. Chinese and Indian companies continue

encourages integrated care to systematically raise health

to invest heavily in video-related health technology in

care standards.

parts of Africa. Existing mobile network operators may subsidize telemedicine programs.

Communities as health care providers Aging populations and a growing disease burden raise the

Focus on preventive health care

demand for skilled health care professionals, potentially

Long-term prevention and management is achieved

creating a shortage across the globe. As a result, health

through

care systems increasingly rely on community outreach,

encouraging healthy habits. Public-private partnerships

peer-support initiatives, and partnering with patients

deliver vital health information through mobile phones to

and families to supplement care. In developing nations,

mothers in low- and middle-income countries in Africa and

community health care workers with little training provide

Asia. Messages are targeted to each stage of a woman’s

education, support treatment, use diagnostic devices, and

pregnancy so that the information reflects what she is

deliver medicines, allowing specialists to handle more

experiencing, establishing an emotional connection and

complex tasks.

encouraging healthy behavioral changes.

education

and

awareness

campaigns

and

| VIEW FROM THE TOP

SUSTAINABLY REDUCING POVERTY THROUGH PUBLIC HEALTH INVESTMENT MARÍA EUGENIA BONILLA-CHACÍN Senior Economist for Health of the World Bank Q: The World Bank’s mission is to eradicate poverty. Few

CONAPO. Challenges remain, however, and the aging

would argue with the sentiment that health is wealth -

of the population and the burden of NCDs, such as

what role does health promotion play in reaching your

diabetes, cardiovascular diseases, and cancers, is quickly

objectives?

intensifying. Disability-adjusted life years lost (DALYs)

A: Increased income growth improves health outcomes,

are a measure of overall disease burden, referring to the

and improvements in health have a positive impact on

life expectancy years lost due to ill-health, disability, or

wealth. Both are required for the sustainable reduction of

early death. According to our research in 2013 with the

poverty. Investments in public health, childhood nutrition

Institute for Health Metrics and Evaluation (IHME), the

programs,

have

three leading causes of DALYs are diabetes, ischemic heart

important positive impacts on cognitive and non-cognitive

disease, and chronic kidney disease. Thanks to the creation

skills. The knock-on effects include improved learning

of Seguro Popular, the country has also made significant

capacities, increased school completion rates, better labor

development in access to health services and in financial

market outcomes, and greater productivity. Moreover, the

protection

latter two increase individual incomes, society’s incomes,

Regardless, the country faces important challenges to

and adult health outcomes.

ensure better health outcomes and financial protection

and

early

childhood

development

against

catastrophic

health

expenditure.

in case of ill health. Large inequalities in outcomes and Q: What are the highlights of the Country Partnership

healthcare resources exist across federal entities and the

Strategy for Mexico?

health system as a whole remains fragmented, causing

A: The Mexico Country Partnership Strategy (CPS) covers

inefficiencies in the use of resources. Internal organization

the fiscal years from 2014 to 2019 and is aligned with

is subject to the same inefficiency.

the goals of Mexico’s National Development Plan (NDP) for 2013-2018. It suppports the Mexican government’s

Q: What specific strategies should Mexico implement to

development agenda for increased productivity and

eradicate poverty and promote health?

inclusive and sustainable growth. The CPS fosters the

A: Mexico already has experience with programs aimed

corresponding goals of ending extreme poverty and

at eradicating poverty, particularly through Prospera, the

promoting sustainable, shared prosperity. To promote

renowned conditional cash transfer program, where cash

an integrated social protection system, the CPS not only

transfers provided to poor families are contingent upon

fosters integration of the health sector, but the plan

children going to school and receiving preventive health

extends to improving the functioning of the health system,

care services. In addition, Seguro Popular was created to

especially primary care, as concerns the shift from acute

improve health outcomes and ensure financial protection

illness response to the prevention and control of chronic

against the costs of illness among those with no social

conditions. The latter tend to be non-communicable

security coverage, who are more likely to be poor. This

diseases (NCDs), such as diabetes and heart disease,

program has been successful in improving health insurance

which relate in particular to obesity.

coverage, health care utilization, and financial protection among its beneficiaries. However, there are still significant

Q: How would you summarize the current health situation

gaps in improving effective coverage of services by

in Mexico, and what are the main challenges to ensuring

enhancing the quality and thus the effectiveness of the

the right quality of care for all its citizens?

services provided to improve health outcomes among the

A: Mexico has achieved important gains in health outcomes

poor. In addition, there is a need to generate fiscal space to

over the last decades, with reductions in maternal and

be able to progressively increase the package of services

child mortality, and the control of communicable diseases.

covered by this program, particularly those covered by

Between 1960 and 2012, average life expectancy in

the Fund for Protection against Catastrophic Health

Mexico increased by 17 years, according to data from

Expenditure.

Q: Mexico’s epidemiological profile has switched from

Q: Mexico’s obesity crisis is causing a spike in chronic

infectious to chronic degenerative diseases. What is the

diseases. What can be done to improve nutrition

World Bank’s strategy to tackle this problem?

education amongst poor communities?

A: Our knowledge base and financial services, as well

A: Mexico’s obesity crisis is playing a major role in the

as our ability to bring various stakeholders together,

rise of chronic diseases and many developing countries

mean that the World Bank can support health systems

are facing this issue. There is no magic pill to prevent and

in preventing and controlling NCDs. As a multisector

control obesity. Nevertheless, a number of promising

institution, the World Bank can support countries in

policies have proven to be effective in improving diets

the design and implementation of population-based

and promoting physical activities with some directly

interventions. These strategies focus on NCD-related

affecting Body Mass Index. The Mexican government

risk factors such as unhealthy diets, physical inactivity,

has implemented many promising policies aimed at

tobacco use, and alcohol abuse. The World Bank also

halting the increasing prevalence of obesity in the

supports several countries around the world to strengthen

country, including a comprehensive national strategy for

health surveillance systems which monitor NCDs and

the prevention and control of overweight, obesity, and

their risk factors. Finally, the World Bank supports several

diabetes.

countries in reforming health care networks to ensure early detection and control of these conditions. Many health

This strategy has three pillars. The public health aspect

systems in the developing world were designed to respond

includes surveillance, health promotion, education, and

to acute episodes of illness and to provide maternal and

prevention. The other batch of policies seeks to improve

child care, but not to be proactive in ensuring the health

access to services for the prevention and control of NCDs.

of the population under their responsibility, a model that

Finally, cultural change requires regulation and fiscal

is unsuited to early detection of chronic conditions, clinical

policy, including new food-labeling regulations, controls on

prevention, or to coordinated care across health providers.

marketing foods to children, and taxing sugar-sweetened

In this context, the World Bank Group supports several

beverages and high-calorie foods of low nutritional value.

countries in changing the care model to one which adheres

The World Bank Group is prepared to support these and

to these conditions, as well as supporting chronic patients

any other activities aimed at helping to halt the increase in

in their self-treatment.

obesity in Mexico.

www.codigof.mx

| VIEW FROM THE TOP

BREAKING DOWN MARKET COMPLEXITIES, OPTIMIZING THE ROAD TO GROWTH FRANCISCO XAVIER VALDEZ General Manager, Mexico & Central America, IMS Health Q: How has IMS Healthâ&#x20AC;&#x2122;s role as an advisor to the health

portfolios. While COFEPRIS has considerably improved

industry been evolving?

the speed of regulatory processes in medicine registration,

A: IMS Health has several platforms globally, designed to

there are still some slow stages. Adding new medications

address our client needs in terms of customer relations and

to the portfolio of governmental institutions is a slow

marketing. We offer popular consulting services for portfolio

process since, to be approved, a drug has to be accepted

segmentation, salesforce effectiveness, market access, and

by the General Health Council and has to be integrated

healthcare economics. The services we have traditionally

into IMSSâ&#x20AC;&#x2122; National Formulary. Analyzing all these steps,

provided are still in high demand, but the face of the market

IMS Health has determined that incorporating medicines

has changed considerably in the last few years. We want IMS

into the public sector generally takes about 4.2 years.

Health to become more technology oriented, so we provide specific software for monitoring campaigns and we have

Q: What are the recommendations that IMS Health is

new social media services to help our clients track their social

making in terms of the streamlining of these processes?

networks. We are also branching out in order to provide more

A: Some of these approval procedures are repetitive and

technology-oriented services, and now have a consulting

unnecessary. If a drug is available in another country and is

group specialized in data warehousing. IMS Health aims to

already approved in Mexico by COFEPRIS, it should be ready

help clients build reports and manage scorecards, which

to be incorporated into the public health sector. If COFEPRIS

will facilitate managers with decision-making processes. We

has decided that a drug complies with all regulations, it

decided to implement these services after observing that our

should not be necessary to repeat the approval process with

clients are facing a more complex environment and need to

a second organization. However, there are always budgetary

make well-informed decisions. Many consulting companies

considerations for each individual institution. COFEPRIS is

provide a large amount of information but very few of

making new products available but some institutions are

them actually process this information to provide insights

reluctant to introduce them to the public, as they prefer to

to clients. Our objective is to create strong tools to provide

save money by buying generics and biosimilars. In my opinion,

these insights, to become a data-based company, and have

the money saved by introducing generics should be used

the right technology to support our services.

to purchase innovative medicines, but in reality this is not always a possibility. The government must make important

What

have

been

the

most

recent

dynamics

decisions between improving its services and increasing

characterizing the health sector in Mexico?

coverage to more patients. It is not easy to determine the

A: The market in Mexico is very complex, and we have

most appropriate way to utilize this money, as IMSS also has

observed that the retail market is not growing as fast as

to tackle other economic challenges such as pensions.

expected. Last year the market for medications grew just

0.4% in terms of value and decreased in terms of units. The

Q: What is the market potential for biosimilars in Mexico?

main problem is the current competition between generics,

A: In comparison to the US or Europe, Mexico has

branded generics, and branded medications. There is also

more availability for biosimilars. This is a very positive

competition between the different distribution channels,

development for manufacturers, as they are creating new

with independent pharmacies competing with chain

and innovative ways to make biosimilars. The production

pharmacies and supermarkets. Conversely, the public

of biosimilars will also allow these companies to grow

health sector has grown 10.8% in terms of value. There

by acquiring the necessary technology. The increased

are interesting opportunities for growth in the public

popularity of biosimilars is beneficial to institutions, as

sector with the inclusion of new chemical entities as well

they now have more available products at a reduced cost.

as new biological products, but the public sector is slow

Increased competition also means it is good for the market.

in acquiring these products and not every governmental

The only problem manufacturers of biosimilars are facing

institution is including these new pharmaceuticals in their

is the recent legislation change. Some biosimilars were

erroneously labeled as generics and these products must

by buying drugs for several institutions, including ISSSTE.

now comply with additional tests in order be properly

Making centralized decisions is more strategic for public

reclassified. Mexican biosimilars are subject to trials in order

health institutions, as it places them in a better position

to preserve their license and continue to be commercially

to negotiate prices and conditions with sellers. In the

available. While this presents a challenge, Mexico has

past, prices for the same medications varied depending

several compliant companies that will easily be able to meet

on which public institution acquired them, but now the

the requirements of the new regulatory framework.

pricing is homogenized. The only problem to overcome is determining which institution will make the primary

Q: In which direction is the pharmacy market developing

decisions concerning the medication and service needs

in Mexico?

of each institution as the services provided and treatment

A: IMS Health has seen a large growth in Mexican pharmacy

guidelines can vary greatly between institutions.

chains while their competition has slowly declined. Last year, we saw a decrease in sales of drugs at supermarkets and,

Q: Why should investment in the development of the

while sales for independent pharmacies have increased,

health industry be a priority for the government?

competition driven by the large portfolio held by larger

A: Health directly impacts productivity, so investment should

pharmacies have forced many independent sellers to close.

be a priority for the government. The government may not be

Equally, patients prefer chains, as they usually go to the

investing enough to satisfy the health needs of the Mexican

closest pharmacy available, thus chains benefit from their

population but it is currently facing budget constraints in

economies of scale. Chains also have loyalty programs that

every area, not just healthcare, so the authorities may not

reward habitual purchases, something that is only possible

be able to address all current needs. The healthcare budget

if the company is large enough to negotiate with suppliers.

was recently reduced by US$663 million as a direct result of the decrease in oil prices. Now, with analysts predicting

Q: What is your opinion on the increase of physicians at

that oil barrel prices will not rise above US$50-60 in 2016,

the point of sale in Mexico?

the government is taking preventive measures to mitigate

A: There are around 15,000 physicians in pharmacies, which

the impact on the economy and adjusting the budget to

is beneficial for the patient as it provides accessibility, and

prepare for next yearâ&#x20AC;&#x2122;s predicted losses.

is also convenient for the pharmacy chains as it enables them to capture more sales. There are not enough doctors

Q: What priorities are top of the list for IMS Health in 2015?

to meet patient needs, so doctors within pharmacies can

A: We want to provide more services and technology tools

help to alleviate the pressure on primary care physicians,

for our clients so they can focus on the market rather than

subsequently benefitting the saturated public health sector

wasting their time on market analysis and cross-referencing

by saving money. Some people may believe there is a

data. We have several new services for our clients and, as

conflict of interest, as physicians at the point of sale would

a result of our recent acquisition of Cegedim, this year we

be motivated to sell products from the pharmacy where they

are planning to launch a prescription business, specializing

work. We do not believe this is a problem, as doctors are not

in customer services management solutions and physician

obligated to prescribe a specific brand and pharmacies must

information. I believe we will have a positive year financially

ultimately respect the brand prescribed by the physician.

and will be providing more services and products.

Q: There is a proposed reform to the General Law of Health that plans to integrate IMSS, ISSSTE, and Seguro Popular. What would be the benefits of this integration? A: The subject of integration is a complex topic. The idea of integrating these institutions was created during the government of President Vicente Fox, but implementation has been difficult as these institutions are very different in terms of services, capacity, cost, platforms, types of hospitals, and logistics. Homogenizing all these services is difficult as there is no consensus on how to provide them or how to charge for them. However, there is some consensus in terms of acquisitions, and drug purchases are being consolidated by the main public institutions. As the leading institution, IMSS is setting purchasing trends

| VIEW FROM THE TOP

PRIVATE SECTOR PRINCIPLES, PUBLIC SERVICE MOTIVATIONS JOSÉ CAMPILLO GARCÍA Executive President of FUNSALUD Q: What are FUNDALUD’s greatest strengths?

Q: Do you foresee a convergence between ISsSTE, IMSS,

A: FUNSALUD was founded 30 years ago as a private

and Seguro Popular?

organization funded by Mexican businessmen. The 100 initial

A: The very fragmentation of all three institutions makes

funders worked as a think-tank to connect private-sector ideas

the current model unsustainable in the long run. So

with public policy in health. As a think-tank we are ranked at

convergence is inevitable, but we don’t know when it will

number 12 in the world and our goal is to become the benchmark

happen. First there must be collaboration and coordination

for private interactions with the public sector. One of our

across hospitals and facilities regardless of the institution

strongest points is our associates from the pharmaceutical

they belong to. Consolidated purchasing, referencing, and

industry, who keep us abreast of new innovations. Data

counter-referencing of patients are all basic and necessary.

on disease and technological trends helps us formulate

FUNSALUD first proposed universal health care between

public policy proposals, rather than simply promoting new

2011 and 2012, but this as a process that will take from 20

developments. Our proposals are always independent and

to 30 years as the system must respond to long-standing

neutral, since we are not a PR company. FUNSALUD aims to

problems, such as inefficiencies in expenditures and increased

produce policy documents to influence the public sector with

costs due to duplicated services. In this situation the one

scientific evidence. Ours is a neutral arena aimed at building

who suffers most is the patient, and so segments of the

consensus so that we can reach conclusions beyond political

population already affiliated to public healthcare institutions

considerations or media presence. We eliminate conflicts of

are increasingly using private services. Recently, we have seen

interests between industry and the public authorities, since

the appearance of health services in pharmacies. According

after receiving funding from the private sector we leave the

to our research, from 50,000 to 60,000 doctors now provide

name of the company and the commercial brands aside.

consultations and issue prescriptions at the point of sale.

Therefore, the monetary contributions become neutral capital

Generally their professional profile is the same of those hired

both for the Government and FUNSALUD.

in the public sector and this service has the advantages of being close, efficient, and readily available. In our opinion, this

Q: What are the most concerning things about health

form of privatization is not necessarily appropriate or helpful.

problems in the Mexican population?

These doctors do not provide a deep analysis and instead of

A: Mexico’s population and society are changing rapidly.

clinical records, they provide brief commentaries. Moreover,

Our population is growing older and faces lower rates of

because the phenomenon grew spontaneously, there are a

infectious diseases and higher rates of chronic ones. Since

variety of regulatory gaps to overcome. COFEPRIS has tried

the 1960s, our society has transitioned from a rural to a

to regulate doctors at points of sale, but they do not have the

mostly urban makeup, with 72% of Mexicans living in cities.

capacity to monitor every one of them.

This has changed the way disease impacts society, with

pollution, urban criminality, and poverty influencing the

Q: To what extent are Mexico’s unique health problems a

health of Mexico’s population. The rise of diabetes depends

result of genetics and of lifestyle?

partly on this population shift, the changes it entails for

nutrition habits, and other environmental factors. About 10

predisposition to certain illnesses, but low physical activity

million Mexicans suffer from diabetes, making this a real

and poor nutrition have a greater impact. The preference

epidemic. Among adults 20 years and older, 9.17% have

for leisure activities gravitates more towards TV and

been diagnosed with diabetes. Of all people with diabetes,

videogames and contemporary jobs encourage a sedentary

46.95% also have with hypertension, 4.47% have had a

lifestyle. Also in Mexico, exclusive breastfeeding during the

stroke, and 54.46% have a reported family background of

first six months of an infant’s life is less frequent, which

diabetes. It is estimated that a large number of people are

we observed in a survey on feeding habits subsequent

diabetic but undiagnosed, which is worrisome as diabetes

to breastfeeding. Many children are already obese by

is preventable and treatable if detected at early stages.

the time they enter kindergarten or elementary school

Recent

works

genetics

indicate

genetic

and that means that parents contribute decisively to the

a national cancer registry together with the Secretary of

phenomenon of obesity. The responsibility for prevention

Health, INCAN, and the Institute for Public Health. It will

strategies lies within the Secretary of Health, but without

include both hospital and population based information at a

inter-institutional collaboration it will not be possible to

national level. We are involving the pharmaceutical industry

solve the problem and measures such the taxation of soft

to provide adequate funding for this initiative.

drinks will be ineffective. Since this new tax was imposed in 2014, around MX$16 billion has been collected. However,

Q: What other projects is FUNSALUD developing?

not a single peso has reached the Secretary of Health

A: One of our successful initiatives is the repatriation of

as the funds went to the Treasury and were utilized for

medical talent, including 150 highly qualified surgeons

other purposes. In my opinion the collection from this tax

and scientists from the US. To do this, incentive programs

should go to the health sector or to other sectors that

were designed to match the incomes of Mexican medical

could invest them in public health. Unfortunately, this is

professionals working in the United States. FUNSALUD

not in our current political culture. Integral collaboration is

also launched the initiative of the National Institute of

needed, from SAGARPA to the Ministry of Education. For

Genomic Medicine (INMEGEN), which today is a strong

instance, dietary habits cause problems, but the industry

and an influential institution. We want genetic medicine

must produce healthier foodstuffs – so SAGARPA and the

to have an influence on diabetes treatment among other

Secretary of Labor should be involved

non communicable diseases. To this end, FUNSALUD is backing an ambitious initiative from INMEGEN to

Q: FUNSALUD has several initiatives for health promotion.

repatriate more scientists as they complete their PHD

What is involved in this type of program?

postgraduate work. We are seeking to repatriate at

A: We run some specific projects as a consortium, funding

least ten scientists over a ten-year period, with a

those areas we seek to develop. For instance, breast cancer

US$106 million scheme called Cátedras de Excelencia

is on the rise and the country does not have enough human

Watson-México en Ciencias Genómicas. We also have

and financial resources to set up the right strategies and

established a joint collaboration with Nestlé. The Nestlé-

tools to tackle it. While breast cancer is considered treatable

FUNSALUD fund was established twenty years ago and

if detected at early stages, many cases only reach public

supports scientific research and the generation of policy

services when they are already at critical stages and that

concerning nutrition. It is also a resource for scholarships

places them beyond the capabilities of a public hospital.

to develop talent. This fund is a benchmark for the

This causes more suffering for the patient and family, and

industry worldwide, not just in Mexico. Our goals for this

more expenses for the system. For example, last year

year are to promote wider, deeper participation between

a huge expansion of the National Institute of Oncology

public and private sectors, across all fields and through

(INCAN) was inaugurated and two weeks later it was already

diverse formats, and to develop a public policy proposal

overcrowded. If all institutions are allowed to become critical,

on nutrition and obesity, along with the national registers

there will be no budget or talents that suffice. At present,

for kidney disease and cancer. We are also planning to

these institutions have no exact figures for cancer patients,

start an evaluation system for all hospitals, private and

only estimates. FUNSALUD is leading an initiative to develop

public, which we lack in Mexico.

| VIEW FROM THE TOP

A FOUNDATION TO ACCELERATE INNOVATION ROBERTO TAPIA CONYER CEO of Carlos Slim Foundation

Q: What is the purpose of the health division of the Carlos

measurement tools to classify individuals by risk category

Slim Foundation and what are the main challenges you

and provide personalized treatment options. MIDO has been

have been trying to address?

implemented in primary health units, subway stations and

A: The Carlos Slim Foundationâ&#x20AC;&#x2122;s health division aims to

bus hubs, setting a new paradigm in health services outreach

fully utilize its capacity to shake up the Mexican system

and proactive prevention. As for infectious diseases, we are

and accelerate innovation. Even though we have an alliance

focusing on reengineering the national vaccination program

with the Ministry of Health, this objective has been rather

by developing a new information system, based on an

complicated as the current system is static and resistant

innovative electronic vaccination card, to improve decision

to change. There are also many constraints, including fixed

making and immunization coverage. At the same time, we

budgets and complex regulatory processes. Since there is

are working on the development of a therapeutic Chagas

strong accountability for mistakes, many individuals are

vaccine and supporting policy making for the possible

afraid to take any innovative measures. The current system

introduction of the dengue vaccine in Mexico. We also have

hampers innovation and is unable to adapt to evolutions in

educational programs such as our on-line training platform

the publicâ&#x20AC;&#x2122;s health and lifestyle.

PIEENSO and are investing in research and development for genomics, cancer, metabolomics, and proteomics.

Q: What specific programs have you established to help achieve the goals of the Foundation?

Q: What are the central aims of the PIEENSO program?

A: We have defined several areas that we believe to be

A: Around 66% of physicians and nurses in basic health

aligned with the main health problems faced by the

clinics have not received continuous education courses

country. The first is maternal mortality, which remains a

following graduation. They are unaware of innovative

large problem despite strong efforts to reduce it in Mexico

clinical management and treatments, updated national

over the last 20 years. The reason behind the high rate of

and international guidelines, and new medications for

maternal mortality is the lack of systematic early access to

illnesses like diabetes. We decided to use technology as

prenatal care services and the quality of care. To help solve

a platform to promote education for health professionals

this problem, our first step has been to create a network in

and created several online courses to address the issue.

low socioeconomic areas with high maternal mortality rates,

With the endorsement of institutions such as UNAM, the

which includes community health posts, midwifes, mobile

Joslin Diabetes Center in Boston, and the Mayo Clinic,

units, primary health units, and general and specialized

among others, we are producing valuable continuous

hospitals. Through these networks, and by using information

education programs. The content of the courses is

systems developed by the foundation, our goal is to identify

developed by experts using formats such as video-lessons,

women in the early stages of pregnancy and provide them

documentaries, and interactive exercises. We have trained

with access to quality care. Another major challenge to the

about 12,000 people with this program over the last four

health system as a whole, and a huge financial burden, is

years on issues relating to maternal health, diabetes, breast

the growth of non-communicable diseases such as obesity,

cancer, cervical cancer, vaccines, and genomics.

cardiovascular diseases, and diabetes. It is 31 times cheaper

to prevent diabetes than to treat it and therefore prevention

Q: How much of a problem is medical access in Mexico

is crucial. While the government is conscious of the problem,

and how is the foundation working this issue?

implementing the proper prevention strategies has proved a

A: Clinics often do not have the necessary medications and

challenge. For this reason the foundation takes a systematic

laboratory tests, and studies have shown that patients have

approach to tackling the problems of diabetes, obesity and

to visit clinics 3.5 times on average in order to obtain the

hypertension, including creating Integrated Measurement

prescribed medications. Approximately 46% of patients that

for Timely Detection (MIDO), an early detection and

visit hospitals or clinics are forced to buy their own drugs

proactive

from external pharmacies as they cannot acquire them

prevention

strategy

that

uses

innovative

for free through the system. This is mainly due to a lack of

genetic risk profile for this disease. We are now working

resources within budgets as well as a lack of communication

with the National Institute of Medical Sciences and Nutrition

between clinics and secondary care units. There is also little

Salvador Zubirán to develop a low cost genomic test to

incentive to change the current system, since people who

measure individual genetic risk of developing diabetes.

use these clinics take whatever medicine they are given as

Haplotypes have been identified that determine whether

they have no alternative. They are also unable to complain

an individual could be sensitive to Metformin or other

or provide proper feedback as they are afraid of being

medications, which will greatly help to identify the most

denied service. We are trying to change that, through our

appropriate treatments for each specific individual. In the

model CASALUD, which proposes a new approach in health

case of breast cancer we are collaborating with the National

care delivery, using a variety of technology-based tools

Institute of Oncology to implement a genetic risk diagnosis

to facilitate better care in Mexico. CASALUD is based on

platform for the early detection of this disease in women.

five pillars: proactive prevention and detection of chronic diseases, evidence-based disease management, supply

Q: Should money obtained from taxation of junk foods

chain improvements, capacity building of health care

be used for educational programs and other initiatives

professionals, and patient engagement and Health.

relating to public health? A: The objective of the recent soft drinks taxation strategy

Q: What partnerships does the organization have to

was to impose high prices that would dissuade people

promote these programs?

from buying soft drinks regularly. Unfortunately, the money

A: We are always working in partnerships, the most

collected from this tax could not be utilized in prevention

important of which is with the Ministry of Health. Our

programs as Mexico’s fiscal system does not permit the

collaboration with the Secretary of Health, Dr. Mercedes

targeted use of money collected from specific taxes. So while

Juan-López, and her team, has been highly successful.

the tax for soft drinks did lead to a drop in sales, the funds

Together we have implemented our models across

could not be used to directly benefit the nation’s health.

the country, bringing innovations, sustainability, and

The authorities have been wary of this particular topic since

accountability elements and allowing us to contribute to

a situation that arose concerning the use of tobacco taxes,

better public health policy. Other important partnerships

when certain branches of the government tried to utilize

are with the National Institutes of Health and universities

the collected money for specific health programs. Despite

like UNAM, IPN, CINVESTAV, and the University of Yucatán

the funds being raised as a result of a penalization of the

(UADY). We strive to facilitate interaction between these

tobacco industry, many people frowned upon the idea of the

entities to reach our common goals. In the same vein,

funds being channeled into public programs. The taxation of

we partner with private companies that have promising

tobacco was seen as a great accomplishment but the large

technology and practices to speed up transfer of

complications stemming from the use of the funds led the

innovation into practice. With the same objectives, we have

government to avoid future direct allocations of tax revenues.

partnerships with strong international institutions such as the Broad Institute of MIT and Harvard, the University

Q: What are your priorities for 2015?

of California, San Francisco (UCSF), Baylor College of

A: The CASALUD model on non-communicable diseases

Medicine, UNICEF, the Inter-American Development Bank,

(NCDs) has already been implemented by the Foundation

the Bill & Melinda Gates Foundation and The Carter Center,

in 20 of the country’s 32 states but we want to expand

among others.

this to at least 26 states by the end of 2015. We are helping the government to analyze the logistics of the

Q: The Carlos Slim Foundation’s partnership with the

introduction of the dengue vaccine, which will make us

Broad Institute has seen you invest in genomic research

one of the first countries to implement it. We also have a

in Latin America – how involved is Mexico in this research

program for dengue surveillance in Mexico and we want

at the moment?

to have an impact in education. Also, we are delighted

A: This area of research is gaining pace as Mexico has had a

that this year the Ministry of Health will be introducing the

National Institute of Genomic Medicine (INMEGEN) for the

electronic vaccination card as its new vaccine information

past ten years. Our initiative brought together INMEGEN, the

system. In addition we are implementing a very successful

Broad Institute, the world leading institution in the field of

program focused on maternal and child health, nutrition

genomics, and several other Mexican research institutions.

and immunizations that addresses the needs of women

The goal of our initiative is to study the genomic bases of

and children in the poorest areas of Chiapas, Mexico and

diabetes and different types of cancer in the country. We

Guatemala, Belize, Honduras, El Salvador, Costa Rica,

are very happy to say that we have discovered a Mexican

Nicaragua, and Panama in Central America.

| VIEW FROM THE TOP

DEFINING THE RIGHT NATIONAL POLICY FOR BIOTECHNOLOGY DRUGS AUGUSTO BONDANI Former Commissioner of Sanitary Authorization (CAS) of COFEPRIS Q: What was the process followed to create the regulatory

laboratories in developing their products before they

framework for biosimilars?

are presented to the NMC. All of this ensures that the

A: It was believed that biosimilar medicines could not have the

evaluation of a new molecule by COFEPRIS is carried out

same safety and efficacy as innovative medications because

comprehensively, and that the efficacy and safety of the

characterizing and comparing proteins was rather difficult.

medication are systematically examined.

However, with technological advances in characterization and more adequate designs of pre-clinical and clinical trials,

Q: Do you see biotechnological medicine as potentially

it is possible for biosimilar medications to be compared with

lucrative for Mexico?

innovators in terms of safety and efficacy. The first significant

A: The importance of biotechnology medicines is growing in

development in terms of regulating biotechnology drugs was

Mexico as well as internationally. Currently, I do not believe it

the 2007 Interinstitutional Forum at the Mexican Chamber

is very lucrative for Mexico since the majority of the national

of Deputies hosted by President of the Health Commission.

pharmaceutical laboratories are registering biotechnology

After this modifications to the law were issued, and during

medicines with active ingredients that are manufactured

my time as Commissioner we collaborated further with

abroad. At the moment the sale of biotechnological

CANIFARMA. These meetings lead to the creation of the

medication comprises between 15% and 17% of the total sales

Regulation of Biotechnology Medicines. This represented

in the pharmaceutical sector, and they are expected they

a big challenge for biosimilars that had been approved

will be 40% and 50% in the next few years. If laboratories

without the adequate pre-clinical and clinical studies to

in Mexico only manufacture biosimilars with imported raw

prove efficacy and safety. However, at that time, stopping

materials, we will depend on the import prices, making us

their sale would have represented a serious problem for the

vulnerable. In turn, this could provoke a shortage of essential

health sector in economic terms. Therefore, it was necessary

life-saving medications for patients with chronic and terminal

to reach agreements with CANIFARMA, resulting in certain

diseases. At the moment, there is only one laboratory in the

norms and guidelines to temporarily solve the problem. It is

country manufacturing biocomparables self-sufficiently.

expected that all biosimilar products will have the adequate studies to demonstrate safety and efficacy for use by the

Q: What are the principal problems faced in the production

Mexican public in a reasonable time.

of biotechnological medications? A: Biosimilar medications are already being made by

Q: How efficient is the process COFEPRIS follows to

major companies alongside innovative products. Moreover,

authorize new molecules including biopharmaceuticals?

countries with adequate national medication policies like

A: The current approval process demands laboratories

India, China, South Korea, and Brazil perform clinical trials

to submit their applications before the New Molecule

to demonstrate efficacy and safety, using hundreds of

Committee, which is comprised of independent experts,

test subjects with high cost implications. Disregarding the

medical

from

expense of implementing techniques to produce biosimilars

Universities and Scientific Academies. This body then

in our country, it is very challenging for a national laboratory

presents its opinion to COFEPRIS, which further evaluates

to afford clinical trials incorporating the same number of

the medicine in question. With respect to biotechnological

patients. As a result, the only way for Mexico to compete

medication, there is a Subcommittee of Biotechnological

in this field is by following the example of other countries

Products made up of experts in the fields of pharmacology,

and implementing a national policy for biotechnology

toxicology, statistics, immunology, and bioethics. This body

medications. At the moment, I am working on a project with

evaluates the submissions and presents its findings to the

FUNSALUD to draft a document setting the requirements for

New Molecule Committee (NMC) so that they can evaluate

this policy. It is important that Mexican companies develop

the medicines thoroughly. There is also a Subcommittee

biosimilars from scratch to produce innovations, as this is

of Developing Products, which supports pharmaceutical

what will really bring attention and investment to Mexico.

specialists,

and

notable

investigators

| VIEW FROM THE TOP

THE RISE OF GENERICS IN A CHANGING MARKETPLACE DR. DAGOBERTO CORTÉS CERVANTES Former President of CANIFARMA, CEO of Hormona

Q: How is the increasing presence of generics changing

COFEPRIS consist of these fixed combination products.

the marketplace?

These products represent an interesting opportunity since

A: The use of generics represents significant savings in

it is challenging to produce fixed-combination products.

public expenditure. The government now spends 80% of

They require a lot of research, laboratory testing, and highly

its budget on innovative medicines, which in terms of units

specialized chemists. However these products do sell for

only represents 20% of its purchases. Conversely, generics

higher prices than regular generics.

represent 80% of total purchases and yet only comprise 20% of the budget. A good example of this is Atorvastatin,

Q: What are the main misconceptions about Mexico’s

which treats high cholesterol. It was first developed by

health sector that need to be corrected?

Pfizer and branded as Lipitor. Lipitor has been a worldwide

A: Twenty five years ago, Mexico imported only 10% of raw

success and was the number one selling pharmaceutical in

materials needed to produce a pharmaceutical product,

Mexico. Once the patent expired, it only took two months

but today we import 95%. Mexico’s numerous free trade

for five generic versions to enter the market, which resulted

agreements have made our sector very dependent on

in a price drop of 66%. Immediately after the price drop, the

foreign countries, especially on India and China, and 65% of

social security system that used to buy Lipitor increased

the ingredients we import come from these countries. This

its purchases by 200%, driven by a huge increase in the

can cause serious problems for pharmaceuticals as once a

number of patients who could access the treatment. The

drug is approved, ingredient suppliers cannot be changed

increasing use of generics is also important considering

as the pharmaceutical company can only use ingredients

Mexico’s changing demographics. Years ago, the product

from the supplier listed in the sanitary registry. If a registered

portfolio of a Mexican pharmaceutical company would

foreign supplier has a problem with the delivery or prices

have 70% of drugs targeted to fight infectious diseases.

go up this presents a big problem. As a consequence, the

Today chronic diseases, mental diseases, and degenerative

social security system that used to buy that drug finds itself

diseases are the top killers. Medicines for cancer,

in difficulty too. We have highlighted this problem to the

hypertension, diabetes, and high cholesterol have now

current adminstration .

become the top priorities. Pharmaceutical companies are constantly studying the market in order to be ready to

Q: What role should R&D play in transforming Mexico into

bring a generic version of an innovative product as soon as

a key exporter?

the patent expires. This begins three or four years before

A: We have to discontine our culture of manufacturing

the patent expires in order to have the generic version

commodities and look to become a manufacturer of high-

ready and waiting. The increasing presence of generics is

technology and high-quality generic products. R&D is

beneficial for big pharma as well as the generics market,

undoubtedly the right way forward. If Mexico is able to

since it opens up the sector to new innovative products.

understand the needs of foreign countries in terms of top mortality causes, healthcare systems, and purchasing

Q: How can pharmaceutical producers innovate in this

behaviors, millions of new potential consumers can be reached.

competitive market?

Mexico is lagging behind the OECD standard, in terms of R&D

A: Mexican pharmaceuticals are looking to offer fixed

investment, but plans to increase this spending by 1% by the

combinations of medicines by identifying ways to integrate

end of 2015 have been announced. Efforts should focus on

the active ingredients of two medicines into one pill. This

biotechnology as these are the products of the future. A

will reduce side effects and the number of pills in a dose,

group of Mexican pharmaceutical representatives recently

while increasing general comfort, which is especially helpful

travelled to South Korea to look for business opportunities in

for elderly people, who may to take five to six pills per day.

the biotech field through technology transfer initiatives. The

This is another way of adding value to a generic product.

aim of this trip was to reduce the time it will take Mexico to

Approximately 20% of the sanitary registries granted by

become a manufacturer of biotech products.

| VIEW FROM THE TOP

BREAKING BARRIERS WITH A UNIQUE AUTHORIZED THIRD PARTY MODEL CRISTINA VIRUEGA ARANDA Director General of TAPVS Q: How do you describe TAPVS history?

that we head the list of ATP’s with 30% of the total

A: First of all, we have to make a distinction between two

market share, from which more than 60% is focused

different entities. On the one hand we have the sanitary

on medicines (our core business), positioning TAPVS

health state regulators and, on the other hand, authorized

as the market leader. We also offer our customers the

third parties (ATP’s) as auxiliaries to the authority since the

evaluation of medical devices as well as facility inspection

1990’s health law reform. The Congress created this figure

to complement our services, making TAPVS a one-stop

as a tool of the Ministry of Health to increase its coverage by

shop option. To date, we have evaluated about 2,500

providing not only a Favorable Technical Opinion (FTO’s) of

application dossiers as an extension of coverage of the

marketing authorization licenses, but also a recognition of

Health Authority in order to reduce the release time of

bioequivalence. Initially, the third party figure rose ten years

the marketing authorizations.

ago with bioequivalence studies, since in order to have a marketing authorization license for generic drugs, this was

For the pharmaceutical industry we represent a better time

the main requirement. However, there are many other fields

to market, providing an 85% time reduction. We give our

in which ATP´s are applicable, such as the tequila industry.

clients the possibility of commercializing their products and at the same time help ensure that the Mexican population

In 2011, the Mexican authorities introduced the figure

has much freer access to medicines. Access leads to

of Authorized Third Parties in order to accelerate the

competition, which in turn leads to lower prices. The

authorization process of medicines and medical device

benefits are passed on to the people. One particular thing

applications. It is important to mention that COFEPRIS

we are proud of is that we have regulated new molecules to

has a wide coverage that ranges from cosmetic products

treat 70% of chronic diseases. This way, our work directly

to complex drugs molecules. No single institution could do

addresses the leading causes of death in Mexico including

this job alone — nor is there a budget in the world that could

diabetes, cardiovascular, respiratory, among others, and

possibly cover it. The Health Authority has used this tool to

directly influences the health of the country.

make their work more efficient. Q: What sorts of challenges do you face in your day-toWhen the opportunity came our way, we visualized

day activities?

TAPVS. During my time as head of the legal department

A: Our work means breaking barriers. We come to the

at COFEPRIS from 2000 to 2006, I established a strong

pharmaceutical industry with a fresh pair of eyes and we

background in regulatory law, as well as a long working

are committed to the safety and quality of products, which

period in the pharmaceutical industry. We synthesized both

means we have to be highly aligned with current regulations.

of these aspects of my career to create a company that

That is, if the product does not meet the standards set by

could provide services to the pharmaceutical industry by

the health authority COFEPRIS, we are jointly responsible

being an extension of the health authority.

for any effect on the health of the population. This means that our review has to be very thorough. We have a shared

Q: How do you measure your progress as an institution?

responsibility with the laboratory, helping to ensure that

A: We started TAPVS with 14 employees and have today

the product is perfect. The government does not absorb

become a company of more than 82. We expect to have

the cost of authorized third parties; it is the third party

100 employees by the end of 2015. About 80% of our team

itself who does. Likewise, the decision to go through this

is composed of technical professionals representing the

path depends only on the industry. Therefore it is not an

heart of TAPVS. We try to merge youth with experience,

imposition on the health authority, but an alternative.

creating a unique combination of professional reviewers,

which has had a high-end result in front of COFEPRIS and

Q: How does the work of TAPVS measure against similar

our clients. At present, COFEPRIS statistics demonstrate

institutions in other countries?

| REGULATION SPOTLIGHT A: Since we are not simply an advisory body, but a

THIRD-PARTY AUTHORIZED CENTERS

regulatory one, our work is governed by executive

In March 2011, the federal government launched

legislation from a national level. Some of our multinational

a strategy that aimed to reinforce the position of

clients have begun to ask us to export our model abroad.

COFEPRIS as sanitary regulator and strengthen the

They have noticed that some countries have extremely

pharmaceutical policy, which had a backlog in the

slow regulatory agencies, or else have complicated

issuance of 8,000 applications for health supplies

barriers to entry that block access to that country’s market.

and long approval times. This was largely due to

As an authorized third party regulatory agency, we are

every document filed in COFEPRIS being processed

located outside the scope of government and commercial

through a single authorization lane. To expedite the

interests. This is what establishes our impartiality. If you

sanitary authorization process, specialized lanes were

look at the list of companies that have chosen us to work

implemented under a risk-based approach, enabling

with them, they are mostly multinational companies with

products to be properly categorized and evaluated.

high standards of compliance, so there is no favoritism.

In addition, two months later, in June 2011, public calls for authorized third parties were published in the

Q: Do you have any overseas expansion plans?

Official Journal of the Federation, with the objective

A: The scheme of authorized third parties as regulatory

of reducing sanitary authorization waiting times from

verification units exists nowhere else in the world. The

two years to four months.

concept of a third party in other countries is just as a certifying body. Other nations have a version of this

Third-party centers are entitled to evaluate the

process, but it is not the same as it is in Mexico. We are,

submissions

in essence, a private sector extension of the government.

renewals of sanitary registrations for medical devices

Some people and foreign governments have shown interest

or allopathic drugs, vitamins, and herbal drugs. In

in our model so as to translate it into one for their own

addition, they can conduct verification visits for the

countries. We have to explain to them what the scheme

certification of good manufacturing practices. There

of an authorized third party is, along with its benefits, to

are 18 authorized third-party companies currently

make it cross borders. This of course is always based on

in operation and, to date, 3,561 products have been

the best practices that guide us in the Mexican legislature.

authorized in less than 20 days. This has allowed

pre-dossiers,

modifications,

and

COFEPRIS to significantly reduce the processing Q: What is your short-term development plan?

time of each individual filing. For instance, processing

A: Firstly, we want to obtain biotechnology certifications.

times for new product registrations have been

Until we have these documents in our hands, we will not

reduced by two years on average. The approval of

consider this year to have been successful. We are also

these registrations was carried out by 86 evaluators in

seeking approval to regulate other categories of medicines,

the verification units, who contribute to the activities

including vitamin supplements. This will help reach the overall

performed by 138 evaluators in COFEPRIS. In this way,

number of products entering the market. Another wider

besides being a unique model in the world, third-

goal is to keep up our standards, continuing to build the

party centers represent the right arm of COFEPRIS

pharmaceutical industry’s trust in us. We have most recently

when it comes to improving processing times, which

expanded into technology, an area in which we had been

are now competitive in global markets.

pushing to enter for quite some time, as well as vaccinations. Controlled drugs are already under our mandate, so we are

IMPACT OF THE PRE-AUTHORIZATION PROCESS ON APPROVAL TIMES

currently reviewing regulations on drug categories 4, 5, and 6, along with vitamins. Given our pioneer status in the

discussions with Colombian regulators, so concretizing that relationship is the next step. Regulatory bodies in Peru, Bolivia, and Venezuela have made inquiries about our model and how it can be transferred to their own markets. Finally, regulatory bodies in Argentina have presented us with their authorities’ structures, so this indicates the beginning of a sharing relationship there.

Process type

export the model to other countries. We have had productive

modifications

the Mexican market, we believe we have the know-how to

extension

registration

field of regulation and our strongly established position in

COFEPRIS approval

Pre-authorized approval

4.5

COFEPRIS approval

Pre-authorized approval

3.75

COFEPRIS approval

Pre-authorized approval .05 months 0

25 30

Source: COFEPRIS

| VIEW FROM THE TOP

EDUCATING THE PHYSICIANS OF THE FUTURE DR. ENRIQUE GRAUE WIECHERS Director of UNAM School of Medicine

Q: What are the main milestones of the School of

for doctors are centralized and certain areas of Mexico,

Medicine?

mainly large cities, have an excess of doctors, while rural

A: The School of Medicine has more than 436 years of

areas have a shortage. This is a socioeconomic problem as

history and has long been influential in the way Mexico

doctors naturally seek work where the best opportunities

develops its medical human resources. We are closely

are available. The health sector must stimulate migration

affiliated with the country’s health sector as a whole and

to unpopular areas, perhaps by establishing different

have 3,568 professors and approximately 18,000 students,

payment plans and incentives. Infrastructure must also

of which 7,000 are undergraduate students and 11,000 are

be overhauled in order to address these problems, which

postgraduate students. Every year we receive between 800

requires solutions from both the Ministry of Finance and

and 1,000 students while 850 students graduate. Most of

the Ministry of Health. In my opinion, we have a sufficient

our undergraduate students join the university through the

number of general practitioners and we may soon have an

direct admissions system based on high grades obtained at

excess in comparison with international parameters. This is

high schools affiliated with the university, while there are 300

potentially problematic as these doctors might soon face

additional places for which 16,000 students compete each

problems finding employment.

year. Since the process is highly competitive, we can ensure that we welcome the best students available and provide

Q: Are doctors inside pharmacies affecting the sector?

them with the most comprehensive education possible.

A: While this vision may have been initially beneficial, the

To enter our graduate program, 40,000 candidates take a

phenomenon is now beginning to have a negative impact

national examination based on which 7,500 are selected.

on the health sector. In theory the practice is beneficial as it increases the availability of medical services, however the

Q: What are the most important changes that have been

problem is that these small consulting rooms do not provide

made to the curriculum during your tenure?

quality care and often sell only the medicines available

A: The school updates its curriculum approximately every six

at that specific pharmacy. The practice must be better

years. The latest changes were made in 2010, thus the next

regulated by the government and improvements must be

update will be implemented between 2016 and 2017. The

made in order to ensure that they have all the necessary

most recent updates involved a deep and comprehensive

diagnostic equipment needed to provide quality care. This

approach to the shifts in Mexico’s epidemiological profile,

practice is also detrimental to general practitioners since,

focusing mainly on degenerative diseases. Our goal is,

while it provides them with steady work, salaries are low.

and has always been, to prepare doctors according to the needs of the population. This curriculum accounts for

Q: What are your main research priorities?

both Mexico’s aging population and the rise in chronic

A: We carry more than 120 different research lines

degenerative diseases, including hypertension, diabetes

conducted by 280 researchers. Our research lines are on

mellitus, rheumatism, and Alzheimer’s, among others.

par with those of developed countries, and the only area

We are including new subjects such as geriatrics and are

for improvement is the transfer of knowledge. UNAM

updating several programs to provide an improved focus

is currently prioritizing improvement of the technology

on nutrition, diabetes, and hypertension. Despite this we

transfer process from simply generating ideas to developing

will not disregard infectious diseases.

inventions and patents. To increase the probability of research projects reaching the market, we have created a

Q: What can be done to mitigate the shortage of

division focused exclusively on the transfer of technology,

specialists in certain medical areas?

which will allow researchers to send their patents to a

A: The health sector has been developing disproportionately,

centralized system to facilitate their incorporation into the

creating an excess of physicians in certain specialties and a

market by making technologies available to companies

shortage in others. Another problem is that most resources

who may wish to commercialize them.

THE SECTORIAL PROGRAM FOR HEALTH 2013-2018 One of the goals of the National Development Plan 2013 –

elimination,

2018 is for an inclusive country, and health plays an essential

The Universal Vaccination Program is one of the most

role for welfare and human capital. President Enrique Peña

developed in the world with 14 vaccines, which, along

Nieto stated in the Sectorial Program for Healthcare 2013

with an integral strategy aimed at controlling most of the

– 2018, that it is necessary to promote a transformation of

vaccine-preventable infectious diseases, managed to cover

Mexico’s 70 year old National Healthcare System in order

88.6% of children under one year old. During the three

to adapt to the current social, economic, epidemiologic,

National Health Weeks, more than 34 million vaccines

demographic, technological, and environmental changes.

were administered, while 29 million doses were applied in

This program is the instrument through which the Federal

the influenza season. Moreover, preventive actions were

Government establishes the strategies and actions to

taken against potential entrance of Chikungunya virus,

achieve the goals concerning healthcare defined in the

including notifying the epidemiologic system and training

National Development Plan. With six core objectives, 39

for surveillance units all over the country. MX$69.2 million

strategies and 274 action lines, it indicates the pathway

were allocated as soon as the first case of transmission

toward achieving a universal healthcare system.

was confirmed in the state of Chiapas in November 2014.

health

protection

infectious

diseases.

both the population and the National Healthcare System as malignant tumors are the third cause of death in the

2. Ensuring effective access to quality healthcare

country. A very important strategy for ensuring effective

services

access to quality healthcare services includes improving

3. Reduction of risks affecting the health of the

cancer detection and access to treatment, especially for

population in any activity

breast, cervical, and prostate cancer. In 2014 more than 2

4. Removal of gaps related to health between

million mammograms were carried out in the public sector

different social groups and regions in Mexico

and 2,396 and 1,872 new cases of breast and cervical

5. Ensuring generation and effective use of health

cancer were respectively diagnosed early. In addition,

resources of

detection of cancer. This represents a growing concern for

and

promotion and disease prevention actions

6. Construction

eradication

Unlike developed countries, Mexico has low rates of early

THE SIX OBJECTIVES 1. Consolidation

and

the

universal

1,292 medical professionals were trained in detection and

National

control of breast cancer.

Healthcare System under the leadership of the Ministry of Health

Central to health is the improvement of access to quality, safety, and efficacy of drugs and medical

RENOWNED STRATEGIES AND RESULTS

supplies. COFEPRIS continues to increase the number

One of the most prominent strategies implemented within

of new molecules approved as well as the number of

the aforementioned first objective is the National Strategy

released molecules for generics registrations, and has

for Prevention and Control of Overweight, Obesity, and

been recognized by the WHO and PAHO as a reference

Diabetes. It comprises actions such as developing prevention

regulatory agency.

campaigns

for

chronic

non-communicable

diseases,

promoting physical activity among individuals, families,

The introduction of universal healthcare is arguably

and in schools and communities; improving monitoring

the most pivotal of all the objectives. The current

systems for diabetes, hypertension, dyslipidemia, and

administration aims to guarantee access to healthcare

overweight and obesity; and early diagnosis of the latter

for all Mexicans according to the Constitution. Seguro

in schools, workplaces, and communities. The “Chécate,

Popular has now registered 57.3 million people, a general

Mídete, Muévete” campaign was found to encourage 61%

population coverage increse of 3.1%, and a 4.7% increase to

of the audience to make lifestyle changes, according to the

elderly coverage since 2013. Integration of the system also

Ministry of Health.

took some steps forward with collaboration agreements between the different institutions at federal and state

Strategies for health protection against transmissible

level. IMSS-Prospera signed agreements with Seguro

diseases

Popular, ISSSTE, and the states of Oaxaca and Chiapas,

have

vaccination

also

been

campaigns

and

implemented, early

comprising

diagnostics

and

while SEDENA and SEMAR were incorporated into the

treatment. Strengthening the epidemiologic surveillance

services exchange program of the General Agreement of

system is key to improving decisions concerning control,

Collaboration.

| EXPERT OPINION

ROADMAP FOR THE TRANSFORMATION OF THE

behavior, with sedentary lifestyles causing obesity, which

HEALTHCARE SYSTEM - ROLE OF PUBLIC PRIVATE

in turn could increase medical costs by 30%. Deaths from

PARTNERSHIPS (PPPS) By José Alarcón, Partner at PwC -

chronic degenerative illnesses are expected to increase

With an estimated 16% of Mexican citizens who still

by 15% in the next decade. Moreover, climate change and

cannot access medical care, PWC Partner and Leader of

resource scarcity will have a massive impact on healthcare,

Healthcare Practice José Alarcón Irigoyen believes that the

as by 2050 it is estimated that 50% more energy, 40% more

system could be on the brink of a collapse, which could

water and 35% more food will be required in order to satisfy

provoke reform and a complete overhaul of the system.

the expanding population. The implication of the need for

Alarcón believes change must be accelerated through

more resources will be huge if the Seguro Popular system

collaboration between the public and private healthcare

attempts to remain operating under the current system.

sectors. Alarcón cites five mega trends that are changing the face of medical cover, not only in Mexico but globally.

One of the most significant trends of this generation is the

The first trend is changing demographics driven by a rapidly

speed of technological advancement. In 2003, a global

expanding middle class and an ageing population. By 2030,

population of 6.3 billion people was using 500 million

it is predicted that spending on the middle classes will reach

connected devices. By 2020, with a predicted population

US$55.7 trillion, an increase of over 250% compared with

of 7.6 billion, there are expected to be 50 billion connected

US$21.3 trillion in 2009. By 2050, 21% of the world population

devices, which equates to roughly 6.5 devices per person.

will be 60 years old or above. Alarcón also believes that the

Technology, according to Alarcón, has the potential in the

evolution of Mexico’s population will be very different to

medical field to transmit more complex services to more

that of other demographics, such as Asia and Europe.

remote regions and the evaluation of new technologies will be imperative in the fight to reduce costs. New generations

The second trend explored by Alarcón is the change in

are also looking to access medical care through new

economic power. The E7 countries will increase their

channels and patients are increasingly looking for a

combined GDP to US$138.2 trillion by 2050, eclipsing the

customer experience from their health providers, such as

UD$69.3 trillion which will be held by G7 countries the

they would experience from any other industry. In order

USA, Japan, Germany, the UK, France, Italy, and Canada.

to account for these changes, Alarcón believes that they

The implication of a growing GDP, says Alarcón, will be a

have to be faced on three levels. The first is on a country-

growing demand for healthcare. Healthcare will also be

wide scale, through measures to ensure efficiency and

impacted by accelerated urbanization, with most of the

effectiveness. This will be the responsibility of public,

population of the Americas becoming urbanized by 2030.

private and industrial sectors, as well as continents and

By 2020, it is estimated that four out of every 100 people

regions and will ensure political and macroeconomic

in the world will be Hispano-Americans, developing the role

stability, balance, intra-industrial competitiveness, human

of the Latin-American community within the international

infrastructure,

healthcare system. In turn, urbanization impacts intrinsic

measure will be within specific sectors and will focus

and

effective

legislation.

The

second

CURRENT HEALTHCARE PROVIDER FOCUS AND AREAS REQUIRING FURTHER ATTENTION Current Healthcare Provider Focus and Areas Requiring Further Attention (Source PwC)

Continuum of care Preventive Care Primary Care Immediate Care Specialty Visit Diagnostics Complementary Treatment Emergency Care Hospital Services Rehabilitation Care Long-term Care Specialized Nursing Residential Care End-of-life Care further attention is needed

Further Attention is Needed

health providers generally focus on these areas

Health Providers Generally Focus on These Areas Source: PwC

on transparency, with oversight by suppliers, providers,

focus onto areas like preventive and primary care and

lenders and regulators. This sector will take into account

specialized healthcare would mean more effective use of

research and development, investments, and regulation of

the budget due to early detection of illnesses and therefore

healthcare. The third level will be the responsibility of the

less pressure on the public healthcare system. With this

individual entity with a focus on compliance and regulated

multichannel approach that is already implemented in places

by legal bodies and companies. The responsibility of this,

like the Basque Country and the UK using call centers and

segment will be the monitoring of controls, information

technology, the private sector could provide the infrastructure

and communication and risk assessment.

and charge according to use. Another accelerator discussed by Alarcรณn in which the public and private healthcare sectors

If nothing changes, Alarcรณn believes, the cost of the public

could work cohesively is through strategic purchasing. The

healthcare industry will increase to breaking point. At the

public sector would offer contracts to the private sector in

same time, the shortage of qualified healthcare professionals

certain areas, for example buying medical supplies in bulk. In

is expected to increase from 7.2 million in 2013 to 12.9 million

effect, all of the medical supply companies would enter into

by 2035. As a result, qualified healthcare professionals will

bidding wars for large public contracts and therefore more

be moving from developing to developed countries, meaning

competitive prices would be available for the public sector.

that educated healthcare professionals are becoming scarce in developing populations. At the current rate, the world will

Accelerator four would provide private companies with

require 2.2 million hospital beds, two million extra doctors

payment based on results delivered. In this way, a shift in

and six million extra nurses by 2034. With appropriate

priorities would be required from targeting monetary input

measures in place, a saving of US$90 trillion could be made.

to focusing on outputs. Spending on medical staff and

Mexico would be required to spend an additional 1.5% of its

equipment would obviously still be needed, but rather than

GDP in addition to the current 6.2% spent on healthcare in

trying to stem the spiraling health problem, preventive care

order to meet demand.

and early detection would be incentivized, and this in turn would result in better outcomes for the patient, therefore

According to Alarcรณn, sharing resources between the

relieving the strain of reactionary healthcare.

public and the private sectors could be an effective way to alleviate the pressure on Seguro Popular. With the access

The final accelerator would maximize technology use.

and quality offered by the public sector, as well as the

Using mHealth, better connections can be made with

efficiency and innovation that the private sector contributes,

patients in rural areas and the quality of care could be

the system could be remodeled using a combination of five

improved allowing medical staff to optimize time. Using

accelerators. The first accelerator proposed by Alarcรณn is

this technology, Alarcรณn estimates that the total healthcare

comprehensive funding for synergy between the public

costs could be reduced by US$3.8 billion, freeing up 10%

and private sectors, which can be done in a number of

of the current healthcare spending for reinvestment in

ways. Firstly, with competitive a Seguro Popular, the

research and development projects. The system could

government

non-essential

also provide an additional 2.3 million patients with access

services to private institutions. Another method would be

can

sub-contract

certain

to healthcare. In the Monica Pretelini Hospital in Toluca,

increasing efficiency in a small number of specialized areas

robots have already been introduced to support physicians,

by working with private institutions. A more comprehensive

facilitate medical education in hard to reach areas, reduce

option would be for the government to subcontract

travel costs and increase operating room response times,

privatized healthcare for the 90 million Mexicans who do

with encouraging results.

not have access to medical cover, dividing the costs of those who are able to pay and those who are not. Finally,

In Mexico, a major problem facing the healthcare system is

certain procedures that are oversubscribed in the Seguro

the focus on reactionary care rather than preventive care.

Popular system, such as dialysis, could be contracted to

Although in the short term, implementation of preventive

private insurance companies.

care may be costly for the public health system, the private sector could support this process by implementing the

The second accelerator would be the implementation of

five accelerators and over the long term, public healthcare

networks in order to better proportion the type of medical

costs could be reduced significantly. This system could

attention given to patients. For example, at the moment,

not only save the government a considerable amount of

substantial

money, and result in a healthier workforce, allowing the

resources

are

focused

hospitalization,

emergency rooms and diagnostics. However, shifting the

country to prosper further.

Comprising social security institutions and the Ministry of Health at the federal and state levels, the Mexican public healthcare system is striving to achieve universal coverage and integration.

With this goal in mind, the major institutions are moving towards unifying payment systems and undertaking consolidated purchases, an approach which in 2015 resulted in savings of up to MX$4.6 billion. Access to healthcare services has improved with Seguro Popular covering 55.6 million people in 2014 and the total healthcare spending growing from MX$231 billion in 2004 to MX$524 billion in 2013. Nevertheless, challenges such as reaching the four million people with no coverage, avoiding affiliates duplication, and addressing quality issues remain paramount.

This chapter aims to provide an overview of the efforts made by the major institutions to improve access to healthcare services. We also look at prevention programs, innovative models, and education and research projects executed by the Ministry of Health and the National Health Institutes. Perspectives from the key industry figures are presented and examined.

HIGHLIGHTS • Changing landscape of the public healthcare sector • Integration of the sector • Consolidated purchases • Prevention programs • Professionalizing research

PUBLIC HEALTHCARE

CHAPTER 2: PUBLIC HEALTHCARE 40

ANALYSIS: Transformations Awaiting the Public Sector

INSIGHT: Dr. José Antonio González Anaya, IMSS

VIEW FROM THE TOP: Pablo Kuri Morales, Undersecretary of SPPS

VIEW FROM THE TOP: Dr. Gabriel O’Shea, National Commissioner of Seguro Popular

ANALYSIS: Looking Back at Ten Years of Seguro Popular

ANALYSIS: The Road to Public Market for New Medicines

SPOTLIGHT: Consolidating Public Purchases

EXPERT OPINION: Joaquín Miranda, IMS Health

ANALYSIS: Unbalanced Human Capital Supplies

VIEW FROM THE TOP: Dra. Teresa Corona Vázquez, INNN

VIEW FROM THE TOP: Dr. David Kershenobich Stalnikowitz, INCMNSZ

VIEW FROM THE TOP: Dr. Antelmo Abelardo Meneses García, INCAN

TRANSFORMATIONS AWAITING THE PUBLIC SECTOR The Mexican public healthcare system is composed

purchases, IMSS led the major purchase of medicines and

of mutually complementary services provided to 1,182

medical supplies for 2015 which involved ISSSTE, PEMEX,

hospitals by both, the Ministry of Health and social

SEDENA, SEMAR, 21 national institutes of health, and 16

security. Total public expenditure on healthcare increased

federal states with savings of MX$4.6 billion.

by 127% between 2004 and 2013, from MX$231 billion to MX$524 billion, representing 3.3% of the GDP. The Ministry

Some of the remaining challenges include improving access

of Health that includes hospitals, National Institutes of

to services and avoiding duplicated coverage. For instance,

Health, and supports Seguro Popular relies on Federal

Seguro

and State financing. On the other hand, social security

Expenditure (FPGC) integrated 208 suppliers for medical

includes institutions like IMSS, ISSSTE, PEMEX, SEDENA,

care - including private and public clinics – located mostly

and SEMAR, which receive funding from individuals,

in Mexico City, State of Mexico, Jalisco, Tamaulipas, and

employers, and workers. In 2014, 57,952,000 people were

Guanajuato, while the other states still have few providers.

affiliated with IMSS and 12,753,000 with ISSSTE, while

In addition, the Superior Audit of the Federation (ASF)

in 2012 PEMEX possessed 755,000 affiliates, SEDENA

estimated that nearly four million Mexicans had no access

832,000 and SEMAR 279,000. Seguro Popular provided

to any healthcare institution this year. Yet 12.7 million

cover for over 55.6 million people in 2014.

people affiliated to Seguro Popular are also covered by

Popular’s

Protection

Fund

for

Catastrophic

IMSS, ISSSTE, PEMEX, and IMSS Oportunidades, therefore, As part of the National Development Plan 2013 – 2018, The

through closer collaboration, institutions could avoid

Sectorial Program of Health imposed the guidelines for

duplicating affiliates in order to allocate adequate resources

achieving a universal and integrated national health system.

to those who cannot access healthcare.

Attempts have been made to integrate public healthcare institutions, such as the unification of the payment system

Demographic and epidemiological changes are galvanizing

and a move toward consolidated purchases. Dr. Gabriel

the generation of strategic collaborations with the private

O’Shea, National Commissioner of Seguro Popular believes

sector. IMSS spent MX$29 million on private hemodialysis

“the merger will concern portability and convergence, with

and radiotherapy services in 2014. In addition, it has

the primary goal for convergence being unifying payment

manifested its intention to subrogate more services,

scales.” Despite the fact that a consensus has not yet been

including treatment for 16,000 people with diabetes, a

reached, over 15 different meetings have been held to

contract for which 16 private companies were interested

improve dialogue between IMSS, ISSSTE, Seguro Popular,

in participating in tenders. ISSSTE outsources auxiliary

and the Ministry of Health. Regarding consolidated

services for diagnostics as well as physiotherapy treatments.

TIMELINE - THE DEVELOPMENT OF THE MEXICAN HEalthCARE SYSTEM

Creation of Hospital General de México

Creation of social services to provide healthcare to rural communities

1905

1935

IMSS starts providing services in Mexico City

1943

1944

IMSSCOPLAMAR becomes IMSS Solidaridad

1979

1989

1917

1943

1960

1983

Creation of the General Health Council

Creation of IMSS

Creation of ISSSTE

Enactment of the General Law of Health

Sources: Ministry of Health and COFEPRIS

Creation of the Ministry of Health and Assistance

Creation of social services to provide healthcare to rural communities

Lack of specialists has been particularly problematic, since Mexico has two general physicians and specialists per 1,000 people, while the OECD average is 3.2. According to Dr. Enrique Graue, Director of the Faculty of Medicine of UNAM, the health sector has developed inconsistently, causing an excess of physicians in certain specialties and a shortage in others. Additionally, for some areas of Mexico – mainly large cities – there is a surplus of doctors, while rural areas are facing shortages. Addressing the issue, Dr. Teresa Corona, Director General of the National Institute of Neurology and Neurosurgery (INNN) said, “patients living in different regions do not have access to these resources, obliging them to travel to one of these three cities [Mexico City, Monterrey, and Guadalajara] and representing a burden for the National Institutes of Health.” To solve this, she goes on, “health services in every single state could be consolidated to increase the number

from endocrinologists, cardiologists, ophthalmologists,

of general and specialty hospitals.” As for Dr. David

nutritionists, and psychiatrists on a monthly basis, and as

Kershenobich, Director General of the National Institute

they develop better awareness of the implications of their

of Medical Science and Nutrition (INCMNSZ), the problem

disease and learn how to manage it, they are then given

is not dictated by a shortage of specialists but on a lack

annual appointments.”

of general practitioners. The INCMNSZ has implemented telemedicine solutions to provide support to doctors in

In addition to creating innovative models for medical

several parts of Mexico.

care, research is now at the core of the National Institutes of Health’s strategy. The INNN has developed a research

Quality is increasingly becoming prioritized among the

line on neurocysticercosis – a common infectious disease

Ministry of Health, IMSS, ISSSTE, PEMEX, SEDENA, and

in Mexico – as well as neurodegenerative diseases such

ISSEMyM, with 18 hospitals belonging to the institutions

as Parkinson’s disease and dementia. The INCMNSZ is

accredited by the General Health Council. Generating

establishing a promising research line to elucidate the

innovative models is vital in offering more comprehensive

role of the interaction between intestinal microbiota and

medical care. For instance the INCMNSZ implemented a

human genes in developing chronic diseases. Moreover,

new treatment model that could be easily incorporated

the

into the health system. Dr. Kershenobich explains “in

institutions such as the Broad Institute of MIT and

INCMNSZ, patients with diabetes no longer visit the

Harvard to identify Mexican gene variants associated to

hospital

diabetes.

frequently,

instead

Creation of COFEPRIS

2001

1992 The Ministry of Health and Assistance becomes the Ministry of Health

receiving

integral

care

Modification to the General Law of Health strengthening COFEPRIS

2003

2003 Creation of the System of Social Protection in Health (Seguro Popular)

organization

Creation of the National Center for Technological Excellence in Health (CENETEC)

2004

2005 Seguro Popular incorporates 31 states

collaborates

with

international

COFEPRIS introduces the Program for the Continuous Liberation of Generics

Modification to the General Law of Health including generic names into medical prescriptions

2011

2013

2012

COFEPRIS recognized as a regulatory reference agency by PAHO

PURCHASING POWERHOUSE BRINGING BETTER HEALTHCARE As the most important health institution in Mexico, the

month in order to renew their prescription. Now doctors

Mexican Social Security Institute (IMSS) currently has

can provide re-fillable prescriptions to those patients,

two main priorities: to improve the quality and speed of

which save time and can be used for up to three months.

medical services, and to financially heal the institution.

Patients with these prescriptions can visit the pharmacy at

The institute is constantly faced with difficult decisions, as,

IMSS to pick up medication without visiting their doctors,

while the health needs of the population keep growing, the

releasing seven million spaces for consultations.

budget to meet those needs does not. Thus, IMSS must constantly evaluate the effectiveness of the measures

The institute also has strong plans to renew and expand its

it implements in order to decide the best way to spend

infrastructure, thus it has developed an ambitious program

its budget, always taking into consideration the need to

for this purpose in which MX$5 billion (US$333 million) will

improve services for its affiliates. As IMSS states, “the most

be invested in 2015. This expansion program will promote

important part is ensuring the best possible impact for the

the growth of medical units under savings and efficiency

70 million Mexicans that we are responsible for.”

criteria. In order to do this, a new model for medical

“Consolidated purchases have allowed IMSS to save a total of MX$4.5 billion (US$300 million) in the past two years.”

Dr. José Antonio González Anaya, Director General of IMSS

Last year, IMSS faced an substancial deficit that led it

units, which takes into account the needs of our affiliates,

to implement a process for financial healing. By the

was created. Through an analysis of IMSS infrastructure,

president’s instructions, from the beginning of the current

existing demand, and productivity of existing infrastructure,

administration, IMSS implemented a series of measures

the locations where it was necessary to prioritize new

to raise the productivity and efficiency of the services

infrastructure were determined. The considered expansion

provided by IMSS, without increasing the financial

for 2015 includes the construction of 28 new units for general

resources invested in them. In order to do this, the institute

practitioners and the substitution of 12 in bad condition or

established a program focused on the deregulation,

which are located on sublet property. Recently, the new

simplification,

which

Hospital General Regional de Reynosa was put into partial

became the most ambitious program in its history. IMSS

and

digitalization

services,

operation and now second level hospitals in Villa de Alvarez,

also aims to strengthen transparency and competency

Leon, Nogales, and El Marques are under construction, and

for all buying processes, due to the fact that it is the

tenders will soon begin for four more hospitals.

second largest purchaser of goods and services in the

country. Additionally, the institute intends to increase the

In 2015, IMSS led the largest consolidated purchase of

excellence of medical attention. An example of the results

medications for the public sector, which incorporated 42

of these measures is the digitalization of worker-employer

participants and consisted of about MX$51 billion (US$340

fees, which 650,000 out of 800,000 registered businesses

million). This acquisition represented savings of MX$4 billion

now pay online. This measure allowed the institute to

in comparison to 2014, which, added to the savings from

save MX$200 million a year on bank commissions, mail

2013, represent a total of MX$8.3 billion (US$533 million) for

commissions, and paper. Another example is consolidated

all participants. For IMSS, savings from these consolidated

purchases of medications, which are now led by IMSS for

purchases for this year represented MX$2.5 billion (US$166

the health sector as a whole. These purchases allow several

million), which, added to the MX$2 billion (US$133 million)

institutions to buy medicines and supplies at wholesale

savings of last year, represent a total of MX$4.5 billion

prices, which are very low. This initiative has allowed IMSS

(US$300 million) savings. To strengthen this integral strategy,

to save MX$4 billion on medicines over the last two years,

in March 2015, IMSS implemented the pilot program called

enabling it to buy more. Finally, the institute has created

Vales Medicamentos (Medication Vouchers) in Mexico City.

re-fillable prescriptions. Previously, some patients with

This program allows patients to acquire medicine at any of

controlled chronic degenerative diseases, such as diabetes

IMSS’ 60 pharmacies in Mexico City if it is not available from

and hypertension, had to visit their main practitioner every

the local general practitioner’s unit. This program has been

highly successful. At this point the institution is buying 20%

12% for children between five and nine years of age. During

of medicines and expending MX$4 billion (US$260 million)

that same period, the number of diabetes diagnoses has

less in order to ensure opportune supply to help patients

risen from 2.1 million to 7.4 million, and early detection has

acquire their medicines as soon as possible.

expanded to the age of 20. Given the importance of early nutrition, a change was implemented to the eating regimes

Mexico is facing an epidemiological shift with chronic

of IMSS’ daycares in 2013. As a result, a significant decrease

non-communicable diseases affecting a larger number of

on the percentage of overweight and obese children from

Mexicans than infectious ones. This situation has grown to

two to five years old was perceived. “From January 2013 to

the point that if the government does not invest enough

May 2015, we perceived that children who spent more time in

to handle these diseases, the costs associated to obesity

IMSS daycare would pass from an overweight or obese status

and diabetes will completely consume the budget for public

to a normal weight,” IMSS mentioned. “On average, 4% of

health services by 2050. In order to tackle this growing

overweight children and 7% of obese children who attended

problem, several government institutions are implementing

for less than a year reduced their weight to a normal level.

strategies to handle these diseases, including IMSS. While

When children attended between one and two years, these

the rate of these diseases is growing, for the last few years

percentages were raised to 18% and 21%, respectively, while

the institution has managed to reduce the mortality rate

they were again raised to 45% and 27% respectively for

linked to chronic non-communicable diseases in comparison

children who attended for more than two years.”

to the rest of the health sector. Even so, IMSS believes that there are still opportunities to improve the efficiency of

IMSS

prevention processes and detection and control of patients

responsibilities. The institute states that “the results we have

without raising costs.

obtained these last two years do not mean that the financial

extremely

mindful

its

achievements

and

pressures of the institute have been solved, there is still a lot of On the matter of prevention, IMSS has focused on increasing

work to be done and the challenges for the next few years are

the number of preventive checkups through PREVENIMSS,

still formidable.” The reduction in the use of reserves in 2013

a highly successful program. Through the last decade, the

managed to place the institution on an inflexion point which

number of checkups went from eight million to 29 million by

set the way towards a healing process of its financial situation.

the end of 2014. The goal for this year is to get to 30 million

For IMSS, 2014 was a year for consolidation of results, since

of checkups for PREVENIMSS. IMSS has also successfully

the use of reserves was halved for the second consecutive

led the program Chécate, Mídete, Muévete, managing to

year while the service was improved. The results accomplished

align the efforts of the government to change Mexico’s

over the last few years will give the institute financial breathing

eating and exercise habits. In order to handle diabetes,

room and allow it to expand its infrastructure and consolidate

strong efforts have been implemented for early detection.

and institutionalize its services in 2015 and the rest of this

Between 2006 and 2014, the child obesity rate monitored

administration. These improvements will provide tangible

by IMSS diminished from 6.3% to 5.8% and from 14.8% to

benefits in favor of the more than 70 million affiliates.

| VIEW FROM THE TOP

PUBLIC HEALTH CENTRAL TO NATIONAL WEALTH PABLO KURI MORALES Undersecretary of Prevention and Health Promotion at the Ministry of Health (SPPS) Q: What is the most concerning aspect of Mexicoâ&#x20AC;&#x2122;s

universal coverage of all necessary services, devices, and

epidemiological profile?

medicines: preventive medicine, quality of medical care,

A: The major challenge in Mexico seems to be the rise in

and effective access to healthcare services. The objective

non-communicable diseases, as well as the prevalence

is to work alongside medical professionals, doctors, nurses,

of emerging and reemerging diseases, meaning that

and social workers, who have to be constantly trained.

resources within the health sector must be optimized.

Physicians and nurses are generally concentrated in large

The Mexican public health system registers 44 million

cities for several reasons, such as financial gain, access to

diagnoses per year, of which about 26 million constitute

proper training and facilities, and recognition, so there is

respiratory diseases and five million gastrointestinal

no encouragement to move and work in rural areas. Also,

diseases, while urinary tract infections are the third most

we do not have a proper evaluation system to analyze the

prevalent. Despite the fact that chronic diseases such as

quality of their work and properly incentivize them.

hypertension and diabetes account for only the fourth highest diagnostic rate, they are the leading cause of death

Q: What would such an evaluation system look like?

in the country. While the SPPS identifies and addresses the

A: Since many people work in rural communities, it is

problems, these conditions often arise because of a lack

more difficult for us to evaluate their performance and

of communication, education, or finances, and as a result

measure the impact of the healthcare policies that we are

it is necessary to develop comprehensive approaches to

implementing. In order to provoke change, we are working

alleviate the impact of these problems.

to establish an independent system, which will be operated and coordinated by the Autonomous University of Nuevo

Q: What actions are required in order to address these

Leon (UANL). The university is currently finalizing the

problems effectively?

three strict indicators that will be applied to all the policies

A: We must ensure that universal coverage becomes a

implemented by the government and when complete,

reality, which means creating a system where people

these will be applied comprehensively across the Mexican

have comprehensive access to treatment instead of being

states. While Mexican states are decentralized, their health

insured in name only. Preventive medicine, quality of

strategies are aligned to the national strategy and since

medical care, and effective access to healthcare services

July 2014, when this program became a priority, we have

must be developed in order to support universal coverage

become aware of the contributions of each Mexican state

to all services, devices, and medicines. The main objective

to the national goal. We published a baseline for this

is to work alongside medical professionals, doctors, nurses,

information at the end of the second quarter of 2015,

and social workers, providing constant training while

which will now be updated every six months.

providing motivation through new incentives. Physicians and nurses are generally concentrated in large cities, with

Q: In what other ways can communication be facilitated in

little incentive to move and work in rural areas, a personnel

order to ensure resources are not squandered?

shortage which is exacerbated by the fact that we do not

A: There is a problematic lack of communication between

have a proper evaluation system to analyze the quality of

states and between different levels of government, such as

work and provide adequate incentives.

Secretariats of Health in each state and federal authorities, as well as information breakdowns between the managerial

Q: What are the actions that need to be carried out in

level and operational level within the states. This is why we

order to increase the diagnosis of chronic diseases?

are making an integral effort to improve our communication

A: Mexico does not have a diagnostics problem, the main

strategy, and since communication greatly depends on

issue is that we have to secure universal coverage, where

individual authority, this problem can be solved by strong

people have real access to the system instead of being

leaders. We hold meetings every 45 days to communicate

insured in name only. Three pillars are needed to support

the necessary guidelines that the states must follow, and

these meetings are complemented by national annual or

in urban areas, where many parents are not at home for

bi-annual conferences. Current technologies also allow us

meals and cannot consistently monitor the products

to hold meetings remotely.

consumed by their children. In large cities, it is also difficult for children to walk to school due to a complex number of

Q: What prevention programs is the SPPS currently

factors, making them more reliant on cars, and although

implementing, and how are they structured?

there have been initiatives to solve this, more attention is

A: One of our famous media campaigns is named

required.

“Chécate, Mídete, Muévete” (Check Yourself, Measure Yourself, Move Yourself), which constitutes the first phase

of an awareness raising project about the importance of

implementing prevention programs?

monitoring health indicators, and will be complemented

A: The main problem is a lack of personal responsibility

by a second phase in which we offer implementation

and we must educate the public to take responsibility

techniques. Another program included changes to Article

for their health and that of their families. For instance we

3 of the Mexican Constitution to prohibit the sale of

provide information about risks associated with vector-

unhealthy products in schools. We are also developing

borne diseases, and its pervasiveness within unhygienic

care networks for diabetic patients, with demonstrative

environments with accumulation of garbage. We have

projects in 21 states, and while these only cover primary or

also observed that implementation varies greatly from

secondary care, they also work as an outreach program for

program to program and easier initiatives to implement

people in remote communities. Moreover, there is a pilot

are generally those for which only environmental changes

program underway to create electronic registrations for all

are required, such as using insecticides to kill mosquitoes

patients and we have also changed regulations to prohibit

carrying dengue fever, and due to administration of a single

all advertisements of sugary beverages to children while

injection, vaccination programs tend to be straightforward.

creating a new tax structure for these products.

We find that is it more difficult to impact ingrained habits

What

are

the

most

challenging

issues

when

and influence people to make long-term, significant Q: On what basis are the prevention programs created?

lifestyle changes, even to the detriment of their health.

A: Public healthcare policy requires consistency as each administration inherits the legacy of that which precedes

Q: Which strategies will be implemented to prevent chronic

it, and this government has certainly built upon the

diseases from consuming the public health budget?

experiences of previous ones. Due to feedback from

A: We already allocate a significant proportion of the

international forums provided by organizations such as the

healthcare budget to treatment of chronic diseases and

WHO, the majority of health programs may be reinvented

addressing their further reaching implications. We know

or relaunched, using experiences from national and global

that 70% of Mexicans are overweight, the majority of whom

best practice. However, addressing healthcare challenges

will subsequently present symptoms of chronic diseases at

is not solely a government responsibility and requires a

some point in their lives. At the current rate, it appears

considerable contribution from society as a whole.

that complications caused by these diseases will consume the budget and even require exponentially increased

Q: How are the funds collected from the sugar tax being

healthcare expenditure. Although the problem has existed

distributed to promote health?

for many years, Mexico is only now beginning to react by

A: Due to previous issues with similar public programs,

changing healthcare guidelines, but several decades are

general taxes such as these cannot be earmarked for a

required in order to truly have positive impacts and invert

specific purpose. A small percentage of the proceedings

the trends. Our current strategies are modest but we have

collected from the sugar tax were given to public

formulated three realistic and comprehensive goals, the

schools, a contribution that must be complemented

results of which can only be measured over the long term.

by municipalities acting to enforce federal regulations

We want to reduce the speed at which these diseases

and monitor the products sold in schools. Article 114

grow, increase the number of people receiving adequate

of the Mexican Constitution stipulates the duties of

treatment, and implement prevention strategies across

municipalities, and these terms include protecting the

Mexico. Other groups have tried to launch strategies to

health of their citizens, which is an issue that presently

combat chronic diseases, but providing medicine alone

lacks a committed approach. For example, the prevalence

will prove an ineffective method without the cooperation

of obesity in children would be greatly reduced if families

of the Mexican public in changing inherent lifestyle

were adequately educated about healthy eating, and

habits, and the incorporation of environmental and social

the nutrition problem tends to be a more concentrated

determinants.

| VIEW FROM THE TOP

THE FIRST LINE OF DEFENSE FOR PUBLIC HEALTHCARE DR. GABRIEL O’SHEA National Commissioner of Seguro Popular Q: As the National Commissioner for Seguro Popular,

diseases, including breast cancer, uterine cancer, prostate

what can you tell us about its creation and purpose?

cancer, diabetes, HIV, cardiovascular diseases, and cornea

A: As an ophthalmologist and a transplant surgeon, I was

and bone marrow transplants.

the first physician to become National Commissioner. Before accepting this position, I was Secretary of Health for

Q: Mexico’s public health expenditure is below the OECD

the State of Mexico. This state has the largest health system

average. How can Seguro Popular help the Mexican

in the country, covering 16 million inhabitants, so I had real

government improve its healthcare investments?

experience dealing with the public health sector on a large

A: While there may never be enough investment in

scale. When I took this position, I was already familiar with the

healthcare, it is possible to improve results by prioritizing

particulars of the public health system, its programs, budget,

needs and ensuring that budgets are used appropriately.

priorities, strengths, weaknesses, and areas of opportunity.

The public health sector should focus on a range of

The Social System for Health Protection (SPSS), also known

factors, such as preventive measures to control chronic

as Seguro Popular, was created as a social alternative for

diseases, consolidated acquisitions to ensure a steady

health protection for Mexicans who were not affiliated to

supply of drugs, and more efficient control of the

any other public health institution, such as IMSS or ISSSTE.

resources transferred from Seguro Popular to the states.

One of the main reasons for its creation was to reduce the

Seguro Popular used to have no control over how the

out-of-pocket costs that Mexicans paid for medication and

states utilized the budget granted to them by the central

medical services. The introduction of Seguro Popular has

government, which led to problems as money was allocated

reduced these costs from 56.2% in 2003 to 45.2% in 2012,

to unrelated areas. To resolve this, President Enrique Peña

according to the OECD.

Nieto urged the central health sector to increase control by modifying the General Health Law. These changes

Q: What is the extent of treatments covered by Seguro

were implemented in June 2014 and now this ensures a

Popular?

higher supply of medicines, more adequate equipment

A: Seguro Popular covers 100% of primary healthcare,

for state hospitals, and more doctors and nurses. Seguro

which comprises medical consultations with general

Popular has also implemented other measures to improve

physicians,

other

healthcare, including Programa 32x32, which encourages

preventive studies. It also covers 85% of secondary care,

an exchange of services among all 32 states in Mexico.

which is comprised of four basic specialties: gynecology,

Finally, our current administration has financed 227

pediatrics, general surgery, and internal medicine. Finally,

projects to construct, renovate, and equip hospitals in 22

it covers 100% of tertiary level care through the Fund

states, with a total investment of US$300 million.

vaccinations,

mammograms,

and

for Catastrophic Expenses, incorporating 59 expensive

procedures using reserves amounting to US$903 million.

Q: What were the main changes made to the General

To reduce this sum, the Mexican government should make

Health Law?

prevention a priority. It is believed that 80% of the diseases

A: The recent changes to the law strengthened transparency

that Mexicans contract in their lifetimes can be solved at

in the use of resources. We also increased penalties from four

the first level of care, if diagnosed in time. Currently, there

to seven years in prison and fines from 1,000 to 500,000

are 64 million Mexicans with diabetes who are not in control

days of minimum wage to whoever misuses Seguro Popular

of their blood glucose levels and in 15 years, these patients

resources. The improvements to the law also allow patients

will need highly advanced and expensive procedures such

to receive medical attention at public hospitals in any

as dialysis, amputations, or laser photocoagulation to treat

state in the country while empowering them to request

diabetic retinopathy. Through the Universal Catalog of

reimbursement from the patient’s state of residence. This

Health Services (CAUSES), Seguro Popular offers several

was not possible before and states simply had to absorb

procedures for the detection and prevention of preventable

those costs. This convergence will also allow refunds

between different institutions. Other changes include the

exceed the capacities of the public health sector, we have

consolidated purchasing of medications. The collaboration

agreements with 35 private hospitals, from which Seguro

between ISSSTE, IMSS, and the National Institutes of Health

Popular can solicit services.

of 17 states, gave IMSS a stronger position to negotiate lower costs. In 2014, more than US$206 million were saved

Q: The upcoming reform of the General Health Law is

by consolidating the purchases of five states. In 2015, the

expected to integrate the public health sector, including

scope was broadened to 17 states and US$519 million

IMSS, ISSSTE, and Seguro Popular. How will this precisely

were saved. Since Mexican states are autonomous, the

affect Seguro Popular?

acquisition of medicines cannot be managed at the federal

A: This process will focus on portability and convergence

level, meaning that even though they receive their budget

for it will not be possible to merge all these institutions

from federal reserves, they ultimately decide how to spend

into a single body, as each has its own collective contract,

it, which is why it is necessary for states to agree and

payment scales, and union that will prevent a complete

consolidate their purchases.

merger. Our first goal in this process is to unify the payment scales, which is far from straightforward. We

Q: How do you ensure the provision of quality services?

have had 15 different meetings about this subject over

A: Many believe that Seguro Popular is a public institution

the last two years but no consensus has been reached.

comprising hospitals, doctors, and medicines, but in reality

Still, we have already unified delivery services and

Seguro Popular is a large insurance organization that works

emergency attention. We recently signed a general

as a financial instrument. We seek to guarantee that our

agreement between IMSS, ISSSTE, the Ministry of Health,

affiliates can provide high-quality healthcare, a process

and Secretariats of Health in different states to provide

to which we contribute in several ways. The quality of a

pregnant women with access to 463 specialized clinics

hospital is generally evaluated according to its equipment,

in Mexico.

personnel, infrastructure, and the availability of medication. To ensure this quality, we have created the State Regime

Q: How much do the complications stemming from

of Social Health Protection (REPSS) that organizes visits to

chronic diseases cost Seguro Popular?

hospitals and clinics to monitor the quality of the services

A: The budget for the prevention of chronic diseases

provided and ensure that patients receive efficient and timely

stands at US$1 billion. Years ago, Mexican lives were mostly

treatment and medication. REPSS also ensures that patients

threatened by infectious diseases but now we are dying

are not being overcharged for these services. Finally, we also

of conditions such as diabetes, strokes, and cancer, which

created guidelines with the Treasury to delineate Seguro

are extremely expensive for the public health system. Our

Popularâ&#x20AC;&#x2122;s expenditures. The guidelines stipulate that 30% of

priority is to improve the quality of health services and to

the funds sent to the states must be spent on medication

increase preventive measures to limit chronic diseases.

and deposited in the Federation Treasury (TESOFE), where

These measures take the form of prevention campaigns,

the central government can monitor usage. This is intended

one of which is currently seeking to promote the preventive

to eliminate the shortage of medication.

detection of breast cancer by bringing mammograms to rural communities. There are also campaigns for preventing

Q: The public health sector receives a large amount of

smoking, detecting prostate cancer, and providing prenatal

patients but has a limited amount of hospitals and a

care to pregnant women. In my opinion, the budget for

budget deficit. How can it still meet its obligations in

preventive measures should be raised by 50% in order to

terms of adequate care?

reduce future costs.

A: The budget for Seguro Popular for 2015 is approximately US$5.2 billion. Of this budget, 40% is spent on salaries, 30%

Q: Is there any campaign focused exclusively on rural

on medication, 20% on preventive measures, 6% on REPSS,

areas to address healthcare issues?

and 4% for building new hospitals, rehabilitating old ones,

A: Yes, but they should ideally be rolled out nationwide.

and the acquisition of new equipment. Around US$187

We provide health services for The Ministry of Social

million is used every year to improve infrastructure. President

Developmentâ&#x20AC;&#x2122;s Prospera program, the goal of which is to

PeĂąa Nieto has made 26 healthcare commitments, mainly

help the poorest in the country. It involves an initiative to

to renovate hospitals and replace obsolete equipment,

fight hunger in rural communities and provides educative

which will largely be funded by Seguro Popular and the

materials in more than 20 indigenous languages on

Ministry of Health. However, while our number of affiliates

several topics, such as preventing unplanned pregnancies.

has greatly increased, the number of public hospitals has

Prospera has a budget of about US$313 million to address

remained static. In cases where the needs of the patients

these issues.

LOOKING BACK AT TEN YEARS OF SEGURO POPULAR The implementation of Seguro Popular in 2004 increased

diseases has fallen from 15.4% to 10.8%. The introduction of

access to healthcare for all Mexicans. Prior to this,

Seguro Popular heralds a major advancement in Mexico’s

coverage was reserved only for those employed by the

development. However, the fact that the percentage of the

government, the formal sector, or individuals with enough

population with access to the healthcare system nearly

economic resources to afford private healthcare. This

doubled in less than ten years presents a huge challenge.

system overlooked more than 50 million Mexicans who were either self-employed, unemployed, or working in

To improve infrastructure the government spent over US$5.3

the large informal sector. Today an increasing number of

billion in the last decade to build, expand, and refurbish more

the population has gradually received essential medical

than 2,750 hospitals, clinics, and other primary points of

coverage. In 2014 the program provided basic healthcare,

medical care. Focus was provided not only to infrastructure,

hospital care, and preventive medicine to 55.6 million

but also on providing appropriately qualified medical

Mexicans. Certain medical services such as infant and

personnel as well as timely and effective healthcare. Some

newborn vaccinations were recently included through the

state hospitals remain understaffed, leading to average

Medical Insurance for a New Generation initiative.

waiting times of 90 minutes before an incoming patient receives any assistance. This is especially problematic in

The system is financed by the federal government in

remote and rural locations, since most medical specialists are

collaboration with the state governments, plus public

concentrated in the urbanized areas of the country. Despite

contributions. One of the main goals is to provide inclusive

the fact that in 2012, among all OECD countries, Mexico

access to otherwise unaffordable treatments. According to

produced the fifth highest number of medical graduates per

reports Seguro Popular has on average reduced expenses

100,000 people, efficient allocation of resources still proves

by 36.8% in general and by 51.7% for households in which

arduous.

hospitalization was required. The government has vowed to increase spending on healthcare from 7% to 10% of total

Meeting the demand for medicines is another challenge.

expenditure to maintain and further improve the level of

The budget of Seguro Popular is relatively low at only

medical care of the Seguro Popular. Since its introduction,

US$200 per person each year, and most medicines are paid

life expectancy has risen to 75.4 years, which is similar to

on an out-of-pocket basis, which leads to a large demand

that in the US. Meanwhile, infant mortality has reduced

for cheap effective drugs. Although out of pocket expenses

from 18.2% to 14.1% and the proportion of communicable

have been reduced from 53% to 45% of the total private

THE ROAD TO PUBLIC MARKET FOR NEW MEDICINES Drug regulation remains a complex process. In order to

its own right. From discovering a molecule to conducting

reach the Mexican public market, new medicines must

in vitro tests, from preclinical studies to clinical trials,

pass through a number of processes. Drug development

the early life of a new drug can last between eight and

and import require separate processes, but both new local

12 years. The number of molecules that become safe and

medicines and imported drugs are subject to COFEPRIS

effective medicines remains somewhere around one out of

approval and to General Health Council (GHC) evaluation.

every 10,000.

The drug must then be included on the National Formulary before being evaluated by public institutions, and finally

Changes to the COFEPRIS administration have streamlined

being made available to hospitals.

the process, but difficulties remain. In the past, the transfer from GHC approval to the National Formulary could take up

A 2014 survey conducted by IMS Health found that the

to 1.3 years, followed by examination periods of eight months

process took an average of 4.3 years. Despite COFEPRIS

as the relevant public institutions examine the drug’s case for

speeding up the overall process to 3.1 years, Mexico’s

incorporation in their formularies. Indeed, the number of new

regulatory processes lag far behind the UK, Japan (two

medicines included in IMSS’ register has dropped from 24 to

years each), France (1.8), and the US (1.1). Indeed, the

four between 2011 and 2013. ISSSTE’s register included 23

development of particular drugs is a complex process in

new drugs in 2011. In 2013, none were added.

healthcare expenditure since the introduction of Seguro

of the Seguro Popular, both the number and the span of

Popular, they are still much higher than the OECD average of

deliveries has greatly increased, which has in turn intensified

18.5%. Meeting this demand provides huge opportunities for

the formidable task of timely and effective distribution.

pharmaceutical companies to diversify their portfolios with generic products and supply the market with cost-effective

The biggest hurdle is taking the next step in developing

drugs. A further challenge is the distribution of medical

comprehensive universal healthcare in Mexico. While

equipment and medications to remote rural locations in

Seguro Popular has pushed the industry into a new

Mexico, not only because these locations are isolated, but

phase, it was only the precursor in the modernization of

also because medical equipment and medicines are strictly

the country’s healthcare system. Large inconsistencies

regulated and require the implementation of effective

remain between hospital standards as well as Irregularities

environmental controls during distribution. With the advent

between the different insurance types.

AFFILIATES OF IMSS, ISSSTE & SEGURO POPULAR (millions)

Number of affiliates to IMSS, ISSSTE, and Seguro Popular (millions of people)

0 2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

IMSS ISSSTE Seguro Popular

Source: INEGI

Source: INEGI 2014 (in the case of IMSS and Seguro Popular the data is up to June 2014; for ISSSTE the data is estimated up to December 2014). The pilot phase of Seguro Popular took place in 2002-2003

ISSSTE’s rate of rejection stands at 24%, with that of IMSS’

of reasons were not disclosed. The problem is reciprocal.

rising to 71%. Question marks over economic valuation

Pharmaceutical companies must be prepared to submit

led to 62% of IMSS rejections. Where the remainder of

proper scientific, clinical, and economic evidence data.

rejected substances is concerned, 15% were of uncertain

Meanwhile, the burden is on public institutions to streamline

safety and effectiveness, 8% failed to reach a population

processes so that medicines are made available to patients

study sufficient to be considered, – and the remaining 15%

within a shorter space of time.

ROADMAP TO ACCESS TO NEW MEDICINES IN THE PUBLIC MARKET

Drug development

COFEPRIS approval (safety and efficacy)

8-10 years

2 months

General Health Council evaluation

Institutions evaluation

1.3 years

Drug available in public instutions

1 year

8.5 months

3.1 years Sources: IMS Health, General Health Council

| SPOTLIGHT

CONSOLIDATING PUBLIC PURCHASES

Industry (CANACINTRA) and the National Association

Medicine procurement comprises efforts such as managing

of Health Supplies Distributors (ANDIS) to expedite the

tenders, defining contract terms, assuring pharmaceutical

process and provide sufficient information to interested

quality, obtaining competitive pricing structures, and ensuring

parties. In order to improve competitiveness, IMSS signed

medicines are listed in the national formulary, according

an agreement with the Federal Economic Competition

to the WHO. In December 2014, Mexico made advances

Commission (COFECE) to design more competitive

in meeting these requirements, with IMSS completing the

acquisition models in which the number of products

largest consolidated purchase in the history of the Mexican

submitted into the tender process increased, generating

public system. The institution reported savings of MX$4.6

savings of MX$1.2 billion (US$80 million). Additionally, a

billion (US$30 million) due to a decrease in prices compared

more competitive price point was achieved by purchasing

to the previous year. An estimated MX$51 billion (US$340

80% of each medicine from the lowest bidder and 20%

million) were invested in medicines and medical supplies

from the second lowest, contrasting to the 60/40 model

for 2015, MX$8 billion (US$533 million) more than in 2014,

employed in 2014.

benefitting more than 90 million affiliates. The success of this process relied on an inter-institutional collaboration led by

The combination of these factors represented useful

IMSS in which the number of participants involved increased

opportunities for an increasing number of companies

from 14 to 42, including IMSS, ISSSTE, PEMEX, SEDENA,

interested in submitting proposals, which grew by 5%

SEMAR, all 21 national institutes of health, and 16 federal

this year. The competition opened up for generics too,

states. This purchase included 14 tenders comprising more

with the 12 most important distributors decreasing their

than 1,900 different drugs and wound care supplies, and a

participation from 81% in 2013 to 72% in 2014 and 58% in

volume that rose from 1.3 billion in 2014 to 1.5 billion units

2015. Moreover, the increased participation of SMEs was

this year. Financial savings from generics and wound care

witnessed by increased participation, from 73 in 2013 to

supplies were estimated to stand at MX$3.9 billion (US$260

126 in 2015. According to Social Communications at IMSS,

million) while MX$620 million (US$ 41 million) were saved

promoting competitiveness in terms of price and quality,

from the purchase of innovative medicines.

guaranteeing

transparency

throughout

the

process,

budget optimization, and most importantly, ensuring The authenticity of all sanitary registrations was verified

procurement of medicines for the population, collectively

through a collaborative agreement with COFEPRIS, while

have a positive impact on the Mexican economy. More

Transparencia Mexicana A.C. guaranteed a transparent

consolidated purchases are expected to take place in

process. In addition, 20 meetings were held between

the coming years as the health system moves toward

CANIFARMA, the National Chamber of Transforming

universality and integration.

MEDICINES & SUPPLIES PURCHASED BY IMSS 2015

MEDICAL EQUIPMENT PURCHASED BY IMSS 2015

227 422 634 674

hased by IMSS in 2015 s (Source: IMSS)

nes

l supplies

25,659

Medical equipment purchased by IMSS in 2015 MX$ thousands (Source: IMSS)

Medical devices

4,822

General surgical instruments

1,793

acients and psychotropics

3,499

Specialty surgical instruments

Medical equipment items

tory supplies

ctive matrial

ormulas

7,611

9,701

23,880

medicines medical supplies vaccines stupefacients & psychotropics Source: IMSS

laboratory supplies

specialty surgical instruments

radioactive material

medical devices

infant formulas

general surgical instruments

medical equipment items

| EXPERT OPINION

OPPORTUNITIES FOR THE HEALTH SECTOR

•

• •

elements

simplifying

the

A minimum sentence of four years in prison for those The strengthening of the information mechanisms and accountability

reached US$911 million this year. Such pressures have resulted in underinvestment in infrastructure and medical

found to be diverting public funds

difficult financial situation. The IMSS presents a deficit for approximately US$1.6 billion while that of the ISSSTE

establishing

as a governing body of the Ministry of Health

Health - One of the biggest challenges facing the Social Security institutions of Mexico (IMSS and ISSSTE) is their

The

consolidation of the Social System for Health Protection

By Joaquín Miranda, Engagement Manager of IMS

•

The transfer of resources from the federal government to federal entities may be made in cash or in kind

equipment and have forced institutions to seek different schemes to reduce operating costs. One of the actions that these organizations have engaged in is the practice

These

of consolidated purchases in which they can obtain a best

consolidated purchases along the Mexican states despite

reforms

have

not

established

mandatory

price through volume.

obvious financial savings, but if a large number of states are expected to participate, this may facilitate a reform in

GOALS AND OPPORTUNITIES FOR THE GOVERNMENT

the near future to compel states to consolidate medical

IN THE NEAR FUTURE

purchasing.

Medical Units Drug Supply An

adequate

administration

contracts,

supplier

•

Distribution Schemes. The distribution models vary

deliveries, inventory control in central stores and medical

from institution to institution. For instance, IMSS uses

units, as well as the purchase of items that fall out with

a decentralized model, which is managed by its own

the tender system will be the main goals for public

resources, ISSSTE uses a centralized model which is

institutions to be able to guarantee the drug supply in

managed by a third party, PEMEX has a mixed model,

its pharmacies. This issue has been an ongoing complaint

and Seguro Popular models of distribution vary by

from users at the main public institutions in the country

state. The government should define once and for all

in the last years.

the distribution model for medical supplies which will be most suitable for institutions to achieve adequate supply at a reasonable cost.

Consolidation of Seguro Popular Purchases With the introduction of “Strategy 5.5- Promoting Efficient Spending on Medical Supplies in the Health Sector

•

Consolidated Purchasing of Other Products and

Agenda 2013-2018,” the use of consolidated purchasing of

Services. The health sector is seeking to increase its

medical supplies for the public sector was implemented.

savings through schemes that allow it to consolidate

Additionally, the reforms approved are focused on

other types of acquisitions like medical equipment,

improving transparency in the handling of Seguro Popular

integral medical services and vaccines. This has already

resources among those at the forefront. These laws include:

begun and should become a priority in the near future.

PURCHASES 2012 VS 2013 (number of product types)

MEDICINES ACQUIRED PER INSTITUTION

400

800

357

350

700

300

632

600

250

500

467

400 300

195

159 56 NSHAE

0 ISESALUD

PEMEX

ISSSTE

Increase 1-9%

Same price

Decrease 1-9%

Decrease 10%

Decrease 30%

0 Decrease 50%

225

100

Increase 50%

Increase 30%

Increase 10%

252

200

IMMSS

100

SEDENA

166

150

SEMAR

200

Source: IMS Health

UNBALANCED HUMAN CAPITAL SUPPLIES Mexico’s economic credentials are impeccable at a macro

developed unevenly, with excesses in some specializations

level. Designated an “emerging power” by the G8, and

and shortages in others. Medical students seem to have

an upper-middle income country according to the World

little interest in specialties which they perceive will not

Bank’s indices, Mexico is undoubtedly one of the world’s

provide the high economic compensation and prefer

major economies. A large and strong working population

those that they believe will, such as plastic surgery. Low

is essential for economic growth, but experts remain

salaries play a strong hand in the decision according to

concerned about the country’s ability to look after its

the National Union of Workers of the Ministry of Health

workers.

(SNTSA), which states that specialists in some states earn MX$7,000 (US$455) a month.

Despite Mexico’s upper-middle income status, the country suffers from a problem associated with developing nations:

A look at figures from the Mexico’s health-workers’ union,

a shortage of doctors.

the National Union of Workers of the Ministry of Health (SNTSA), tells the full story. With specialists in some states

According to WHO statistics, the global gap of 7.2 million

earning MX$7,000 (US$467) a month, medical students

professional health workers in 2012 is likely to rise to 12.9

and practitioners choose to go elsewhere, seeking work

million with damaging consecuences. Overwork tends

in well-remunerated sectors, such as plastic surgery, and

to shorten consultations, hence lowering the quality of

higher-income states, fir example Mexico City.

medical care and increasing the price that patients have to pay due to limited competition.

Mexican universities also lack the capacity to prepare such specialists. Applications for single programs routinely

In 2014, INEGI registered 281,000 physicians who are

surpass the 25,000 mark, when an entire medical school

currently working professionally. According to the WHO,

may only have the capacity for one quarter of that 632

in 2011 Mexico had 2.095 physicians per every 1,000

number. Meanwhile, the shortage of specialists continues

citizens, with 2.5 doctors per thousand people being the

in areas as oncology, geriatrics, neurology, psychiatry, and

US average. Both are below the WHO recommendation of

nephrology.

2.9. A greater problem faced by the Mexican healthcare system is a shortage of specialists and their uneven

The load of patients per specialist is a heavy one. The

concentration in the Mexican territory. According to

Mexican Society of Oncologic Studies states that there are

INEGI, Mexico currently has only 1.2 specialists per 1,000

only 1,200 oncologists in Mexico responsible for treating

people. “The shortage of specialists is due to a lack of

125,000 new cases of cancer per year. The problem is

planning from the central government, along with poor

passed on directly to the patient, with 80,000 Mexicans

planning of physicians’ retirement plans,” says Dr. Enrique

dying every year of malignant tumors. “Of the more

Graue Wiechers, Director of UNAM School of Medicine.

than 115 schools of medicine in Mexico, only eight teach

According to Dr. Graue Wiechers, the health sector has

oncology,” says Dr. Antelmo Abelardo Meneses García,

UNAM APPLICANTS

29.2%

27.2%

28.9%

27.1%

26.5%

26.3%

5,464

6,375

6,251

6,291

6,372

6,476

6,964

6,939

2009

2010

2011

Source: Interinstitutional Commission for the Formation of Human Resources for Health

2013

25.5%

2012

23.7%

accepted

22,027

2008

23,103

26,315

2007

21,386

26,259 23,846

2006

23,050

24,959

Director General of the National Institute of Oncology (INCAN). Geriatric care is also lagging far behind, ten

Whatever the strategies eventually adopted across the

million elderly people require highly specialized care

health sector, they must be comprehensive. Mexico’s

throughout Mexico, according to the National Institute

disease burden crosses demographics, class lines, and

of Older Persons (INAPAM). There are only 400 geriatric

state limits. Solutions to the problems facing healthcare

doctors available to look after them. Finally, chronic

must do the same.

kidney failure affects nine million Mexicans, with only 800 nephrologists available to treat them. Another significant problem for the sector according to Dr. Teresa Corona Vázquez, Director General of the Nacional Institute of Neurology and Neurosurgery (INNN), “has nothing to do with the lack of specialists. The issue lies in the concentration of specialists around the urban centers of Mexico City, Guadalajara, and Monterrey.” Patients living in other states do not have access to these resources, forcing patients – including those requiring emergency care – to travel to these three cities. The burden weighs heavily on the country’s National Institutes of Health, which struggle to treat such a large number of individuals. Physicians often prefer to stay in large cities, as job opportunities tend to gravitate around urban hubs. According to Dr. Graue Wiechers, “doctors are unwilling to travel to places where they feel unsafe, or where they feel they will not be able to grow professionally and economically.” Dr. Corona Vázquez, of the INNN, agrees, with reference to a high-specialty Hospital in Tapachula, Chiapas, whose state-of-the-art equipment is not enough to attract specialists to the area. Chiapas is not the only state affected: Oaxaca, Veracruz, Guerrero, the State of Mexico, Quintana Roo, Hidalgo, and Puebla report a steep specialist deficit. Varying strategies have been proposed to solve this problem. The director of UNAM’s medical school, believes that this is a joint problem for the Treasury and the Ministry of Health. “The health sector has to stimulate migration to those areas, perhaps by establishing different payment plans. The whole sector must be better planned to solve this problem.” Dr. Corona Vázquez recommends strengthening health services in every single state in order to increase the number of general and specialty hospitals, so that hospitals in neglected states can provide competitive employment offers. Raising salaries appears to be one way forward identified by important players. The National Union of Workers of Social Security (SNTSS), in conjunction the State Delegation of Chihuahua and the Business Coordinating Council of Chihuahua, has proposed raising salaries by 46% to attract specialists to that state. One unconventional alternative proposed by Dr. David Kershenobich Stalnikowitz, Director General of the National Institute of Medical Science and Nutrition Salvador Zubirán (INCMNSZ), incorporates telemedicine. “General physicians can request specific information from remote specialists which reduces the necessity of having specialists spread all over the country.”

| VIEW FROM THE TOP

MULTIDISCIPLINED RESEARCHERS DRA. TERESA CORONA VÁZQUEZ Director General of Instituto Nacional de Neurología y Neurocirugía (INNN) Q: You have been involved with this institute for the past

disease, while Amerindian genes seem to confer certain

22 years and directed it since 2007. What have been your

protection. We are still studying different origins according

greatest achievements during this time?

to the subtypes of multiple sclerosis in Mexico, which is

A: When I began working at INNN, my personal goal was

the result of cumulative efforts over many years including

to become an active participant of the institute’s research

research on an endogamous community in the Lacandon

system and the National Coordinating Commission of the

Jungle, where this phenomenon appears to be nonexistent.

National Institutes of Health and High Specialty Hospitals

The reason for this may be that this population’s genes are

(CCINSHAE) in order to continue my trajectory within the

purely Amerindian, or may be influenced by epigenetic

National Research System (SNI). This research eventually

factors such as the surrounding environment. This population

led to the creation of the INNN’s clinic for multiple sclerosis

also frequently suffers from intestinal infections and there is

as, at the time, we noticed a rise in the number of patients

a hypothesis that suggests that infections of this type confer

suffering from this disease both in Mexico and in Latin

certain protection from other immune diseases, such as

America. Later, I was appointed Director General of INNN

multiple sclerosis. There are new medicines being developed

by its board. The objective of this clinic is to provide

to treat this disease, the only problem is that they are too

appropriate care to patients through a multidisciplinary

expensive for the majority of the Mexican population.

approach including rehabilitation, support groups, and neuropsichiatry. I also established several research lines

Q: What are the main challenges that the institution is

such as neurocysticercosis, an extremely common disease

facing nowadays?

in our country and currently, our clinical laboratory for

A: The institute provides medical attention to individuals who

neurodegenerative diseases is expanding its research lines

do not have social security of any kind, but we also receive

to include Parkinson’s disease, and dementia, among others.

patients with social security who desire to be treated at the

In addition, having worked in the Education Division. We

National Institutes of Health. We have a scale of six different

manage to standardize all the specialties in the institute to

ways to reimburse treatment costs. Out of our entire patient

assimilate UNAM Faculty of Medicine’s post-graduate studies

base, 85% belong to the first three possibilities, which means

and now we are incorporated as part of this campus. We

that they are able to cover less than 15% of the real cost. The

have created 31 different post-graduate programs besides

INNN must provide high quality treatments and care for all

our specialties, including a nationally recognized specialty

patients without taking into account their economic means.

in neurology created in collaboration with CONACYT. This

While our mission is to provide quality care, all National

division has grown enormously and it is still growing. INNN’s

Institutes of Health were created for scientific research,

greatest strength and advantage is that we can cater to

distinguishing us from other health institutions. INNN has one

all specialties related to neurological sciences, including

of the highest research levels in proportion to its number of

clinical, biomedical, and even sociomedical. Our students

researchers, as we have the greatest amount of members

are able to develop a multidisciplinary and integral approach

of the SNI due to the high number of research topics on the

to neurology. We also have courses on neurogenetics,

central nervous system. Both Europe and the US have declared

neurochemistry, and neurophysiology, as well as laboratories

2015 the Year of the Brain, with the aim of educating society

and improve care for chronic non-communicable diseases

inflammation,

neuroimmunoendocrinology,

and

immunology, among others.

related to the brain. As the country is facing an epidemiologic shift, the INNN is facing a demographic transition, meaning

Q: What is the cause of for the increase in multiple sclerosis?

we must re-evaluate and innovate our schemes. The average

A: There is no specific reason at the moment, but we believe

age of our researchers is between 40 and 50 years old, so we

it to be a genetic problem. Mexicans are a mixed race with

expect an extremely bright future with young researchers that

genetic material from many sources. We have perceived

are producing promising research and will continue to do so

that Mediterranean genes experience a susceptibility to this

for the next ten to 15 years.

Q: Are you receiving patients from Seguro Popular? What

Q: What would you suggest to tackle the problems arising

other collaborations does the institute have?

out of the shifting epidemiological profile?

A: Recently, Seguro Popular replaced our molecular

A: At this point, the health sector must focus on prevention

imaging unit and agreed to replace our linear accelerator

and improve access to healthcare. It is well-known that

for radioneurosurgery which is extremely expensive but will

several factors influence the development of cerebrovascular

benefit a large number of patients. This linear accelerator will

diseases, all of which are related to obesity and the lack

allow us to provide non-invasive treatments for brain tumors

of physical and mental activity. The Ministry of Health is

and other neurological diseases. At this point we receive

currently implementing several prevention campaigns and

patients aged under 18 from Seguro Popular who require

removing unhealthy food from schools, but these strategies

treatment for brain tumors, and we hope to expand access

should be continued and expanded. The Mexican population

to adults in the near future. Our institute does not treat

must become aware of the correct strategies to prevent

children but we are collaborating with the National Institute

these diseases, which include changing their eating habits

of Pediatrics when needed. We are now installing a state-of-

and increasing physical activity. Nowadays there are good

the-art NMR spectrometer funded in part by the Fundación

programs to promote healthy habits to school children

Gonzalo Río Arronte – which has greatly supported us over

which is an essential step to preserving the health of the

the years – with the other half of the funds donated by

Mexican population. Within the institute we are providing

Beneficencia Pública. One of our main goals is to keep the

programs to prevent these diseases including one that offers

institute at the forefront of treatments and medical devices.

continuous education for physicians in order to help them provide external consultations to prevent diabetes, obesity,

Q: Mexico is currently facing a lack of specialists in many

and hypertension. We also have various programs in other

areas – is this the case for the INNN?

areas, including 14 support groups for several diseases, one

A: This is a serious problem but while we may need

of which is for families of patients with dementia to help

more data on this topic, we have perceived a small lack

them manage the constant stress and violence they face.

of specialists in neurosciences. The main problem is not the absence of specialists but the fact that those

Q: How are you collaborating with other institutions to

with specialized skills are concentrated in Mexico City,

extend your research?

Guadalajara, and Monterrey. There is a High-Specialty

A: The regulations of the National Institutes of Health restrict

Hospital in Tapachula, Chiapas, which has excellent

us from providing several services. Currently, the external

resources and equipment but few doctors wish to relocate

resources we get are related to our research areas and come

to this area. Rural areas lack private hospitals and clinics,

mostly from CONACYT and some private companies or

so physicians are unable to earn competitive salaries,

foundations. On the other hand, we are able to provide some

which reduces interest in those regions. On the other

services like the Positron Emission Tomography (PET) scans,

hand, hospitals in Mexico City have many specialists that

which are much less expensive in the INNN than through

strong competition exists for every single job.

a private institution. Providing external services is not prohibited by current regulations, but these modifications

In my opinion there are enough neurologists to combat these

aim to increase the services available for private hospitals

diseases yet science has become extremely reductionist,

and create agreements with private insurers to increase

with specialists for each disease, including multiple sclerosis,

availability of funds. On the other hand, every institute is

amyotrophic lateral sclerosis, dementia, and cerebrovascular

able to provide different services for the private sector, for

diseases. Since the field has become reductionist, the

example the National Institute of Public Health performs

general sentiment seems to exist that there are not enough

surveys for private companies. This topic is still under

specialists even though qualified neurologist is not necessary

evaluation, and while we at the INNN have been slightly

to diagnose any of these diseases. Specialists are often

more restricted, there are projects that we are interested in

necessary to make a precise diagnosis or special treatments

developing including biomedical markers for some diseases.

but this is not always the case. Q: What are your priorities for 2015? Mexico is undergoing an ‘incomplete’ epidemiologic

A: This year we want to finish the construction of the new

transition and demographic shift: because we are still

linear accelerator and NMR spectroscopy units, and some

facing infectious diseases, as well as maternal and infant

of our newest infrastructure. We also plan to develop our

health problems, common to developing countries, but

research areas and improve the quality of our services. Last

we are also facing illnesses typically associated with

year, INNN celebrated its 50th anniversary and our goal is

developed countries such as dementia and Parkinson’s.

to continue growing in research, education, and care.

| VIEW FROM THE TOP

GROUNDBREAKING MODELS FOR INTERNAL MEDICINE DR. DAVID KERSHENOBICH STALNIKOWITZ Director General of Salvador Zubirán National Institute of Medical Science and Nutrition (INCMNSZ) Q: What have been the latest developments and

in order to educate the populations on nutrition and train

achievements of INCMNSZ?

medical personnel to be able to handle nutritional needs.

A: The INCMNSZ was created to address nutrition and

The INCMNSZ currently supports other institutions such

internal medicine, focusing on all aspects of the internal

as the Ministry of Social Development (SEDESOL) and

medicine for adults but traumatology and gynecology.

the Government of Mexico City in specific programs such

Ours is a third-level hospital with advanced equipment

as SaludArte. Also, we publish the Nutrition Notebook

and trained personnel capable of handling highly complex

(Cuaderno de Nutrición) addressed to all the population

situations. We have expanded the ER from 400m to

to instruct them on health improvement. Our tactic

1,600m. A common problem up to this point was that

against obesity is to focus on nutrigenomics, and we stand

patients waiting for emergency consultations were in

as the forefront of this area worldwide. The INCMNSZ is

the same room as hospitalized patients in semi-critical

currently researching endemic food to understand how

condition. We have also improved our methodology to

they affect the genes of the population, and to determine

treat ER patients by providing manuals detailing the

their role in the obesity crisis.

process to triage patients which used to take up to five hours. This handbook has speeded up the admission

Q: What is the institute’s research focus at the moment?

process to three minutes after the patient arrives. We

A: In the area of nutrition we have an important research

have also upgraded the emergency area included a simple

project on gut microbiota, which will have a considerable

tomography, dialysis equipment, and procedural rooms to

impact on the Mexican population. There are more genes

provide fast attention for emergencies. We receive more

within our gut flora than in our own genes, so our goal

than 100 emergency patients on a daily basis with complex

is to map their interaction. It is a popular opinion among

cases that have not found resolution in other hospitals. We

researchers that the genes of our gut flora are strongly

have also worked for the past two years in creating our

related to the development of several diseases, including

own electronic system, which will link all our services and

chronic ones. We also have research lines in internal

will be portable to allow doctors to provide consultations

medicine mainly in obesity and diabetes.

outside the institute. The institute is collaborating with the Broad Institute

Q: The institute is responsible for several nutrition

of MIT and Harvard in Boston, to map polymorphisms

programs, including “Un kilo de ayuda” (A Kilogram of

in diabetics. We determined that some polymorphisms

Help). What impact have these programs had?

increase the possibility of developing diabetes mellitus

A: The institute was founded when malnutrition was a

by a multiple of six. A third area is related to infectious

large problem in Mexico. Nowadays, the percentage of

diseases, inculding HIV and tuberculosis, for which we

the population facing this problem has greatly reduced,

have biosafety level 2 and 3 (BSL 2 and 3) laboratories

but it is still an important matter for the country. At

One of our latest accomplishments is our Research

present, we face the opposite problem: obesity and

Support Network (Red de Apoyo a la Investigación),

its consequences, an issue that is threatening a large,

launched in January this year alongside the National

growing percentage of the Mexican population. Two very

Autonomous University of Mexico (UNAM), the National

different sets of knowledge are required to tackle both

Institute of Oncology (INCAN), the National Institute of

segments of the spectrum. To handle undernourishment,

Cardiology (INC), and the National Institute of Genomic

we run several programs including “Un kilo de ayuda,”

Medicine

which is focused on supporting nutritional development

repatriate 15 Mexican researchers that were living abroad,

by providing nutritious food to the most marginalized

and required the creation of a core laboratory within our

areas of the country. We are also present in many

institute to provide assistance to researchers in several

indigenous communities in Oaxaca and in Tarahumaran,

areas.

(INMEGEN).

The

network

allowed

Q: An important problem in Mexico is the lack of

visits, the patient is fully aware of his or her disease,

specialized physicians, especially in rural areas. What is

and prepared to manage it without constant sessions.

the institute doing to address this situation?

Further consultations, are only required once a year. This

A: I believe that the problem is the lack of general

model has been highly successful and it has even been

practitioners.

telecommunication

incorporated to other hospitals. There is a similar need to

systems, including television, internet, and cellphones, it

With

the

current

change these models for other diseases, such as leukemia

is not necessary to have specialists all over the country as

and lymphoma. While the INCAN is responsible for dealing

consultations can be provided by general physicians who

with these diseases, our responsibility is creating novel

may request specific information from remote specialists.

models of care.

The institute integrates several telemedicine classrooms to provide remote consultations and conferences. The main

Q: How do you approach research and innovation within

thing to focus on is educating the general population and

the institute?

providing them the way to change their habits and prevent

A: Medicine requires the cooperation of all the national

diseases. Educating physicians on the available resources

and international institutions to keep up with the latest

and the best way to use them is a crucial element of our

developments in research and education in order to

work. Because nutrition is a complex issue, it requires long

provide the best care to patients. In September, we will

and sophisticated solutions, not just more specialists.

have a training program for doctors so they can update their knowledge on internal medicine. For example, in

Q: What are the profiles of your university collaborators

the area of Hepatitis C we are working with the newest

and your students?

direct antiviral agents that are able to cure the disease

A: We are collaborating mainly with UNAM, since our

instead of just managing it. In this case, we are bringing

residents are incorporated to UNAM’s training programs.

a researcher who developed one of these medications. In

For undergraduate studies, we are collaborating with

the area of anesthesia, there is a new concept called pain-

the Panamerican University, La Salle University, Anahuac

out, which mitigates post-surgery pain, for which we are

University, Tecnológico de Monterrey, and the Autonomous

also bringing researchers involved in the development of

University of Nuevo Leon (UANL), among many others.

this new technique. For this program, we always identify

Through the years, the institute has searched for the best

15 global leaders in their respective fields to share their

ways to select its residents. Now, just to be eligible for

knowledge on generating new ideas. We also plan to

our admission tests, a student’s grades have to be within

continue with the Cathedra Salvador Zubirán, which

the top 10% of his or her university. Every year, we receive

aims to bring to Mexico foreign researchers interested in

about 500 requests that comply with this requirement. All

working and living here for a year.

undergo a written examination and personal interviews with several members of the institution. From this demographic, we select a total of 160 residents. We focus on selecting committed and involved doctors interested in teaching and doing research. This allows us to select the best students to improve our human resources. Q: Besides education and innovation, on what other areas do you focus to improve public healthcare in Mexico? A: Our responsibility as an institute is to develop healthcare models that can be incorporated into the health system. For example, chronic non-transmittable diseases such as diabetes mellitus, hypertension, and chronic renal damage cannot be cured, only managed. As such, they require attention not just from one doctor or specialist but from several over the patient’s entire life. The previous system required a patient to have frequent 15-30 minute consultations with several specialists over the course of various days, and our new model provides integral care where patients receive several consultations one day over the course of six hours. After four monthly medical

| VIEW FROM THE TOP

IMPROVING EARLY CANCER DIAGNOSTICS DR. ANTELMO ABELARDO MENESES GARCÍA Director General of Instituto Nacional de Cancerología (INCAN)

Q: How has the INCAN evolved over the years?

A: We have noticed a fluctuation in the frequency of some

A: I have worked for INCAN for more than 32 years, the

types of malignant tumors. For example, cervical cancer was

past two as Director General, so I am fully aware of the

historically the most frequent malignant neoplasm. However,

institute’s evolution. INCAN was created in 1946 with goal

from the beginning of 1990, prevention and diagnostic

of educating oncologists, providing excellent patient care,

programs were intensified reducing this type of cancer. The

and performing research on many cancer related areas

increase of the hypercaloric diet which raised overweight

in Mexico. Research is what differentiates institutes from

and obesity levels to more than 70% of the population,

hospitals. In 1982, when I arrived at the institute, it was a

alongside diminished physical activity and increased alcohol

strong institution for education and patient care but not

consumption, led to an increase in breast cancer. Another

for research. Through the years this has changed. At this

large factor is the rise of non-communicable diseases which

point the institute focuses more on applied research as our

killed 40% of the population in 1980, but now represent 80%

goal is to find solutions that may help patients as soon

of death causes. The rate of several types of cancer can be

as possible. Our main research lines focus on the most

lowered through lifestyle changes as many of them are related

frequent types of cancers in the country such as breast,

to smoking and to the consumption of red meat, processed

cervical, prostate, colon, lymphoma, ovary, and pulmonary

foodstuffs, and soft drinks instead of fruits, vegetables, and

cancer. Over the last few decades, INCAN has defined

cereals. Other factors are the exposure to viral agents such

itself for its academic relations with foreign institutes,

as hepatitis B and C. For those reasons, INCAN is currently

including MD Anderson, Houston Cancer Center, the Broad

promoting the “Programa Integral de Prevención y Control

Institute, ICO Barcelona, and Harvard School of Medicine.

de Cáncer” (Integral Program for Cancer Prevention and

INCAN is a decentralized institution that receives patients

Control, PIPCC) to address risk factors that can be modified

without public or private insurance, so between 30%-40%

in order to reduce the incidence of these types of cancer.

of our patients abandon treatment due to the high costs of medications.

Q: How does INCAN support patients beyond providing excellent medical attention?

Since the introduction of Seguro Popular, we have increased

A: INCAN provides support in several areas, including

the rate of covered patients. Ten years ago only 4% of our

helping

patients were able to receive the best available care. The

equipment, and supplies, and providing them emotional

reason for this is that only half the population has access

and psychological support. For example, we have a

to medicine through social security. The other half does not

program denominated “Unidades Funcionales” (Functional

have any type of health insurance and they often cannot

Units) which has allowed us to improve attention, reduce

pay for it. Seguro Popular covers some types of cancers and

waiting times, and increase the systematization of INCAN’s

keeps increasing the number of diseases covered every year.

patient registries. The study of the specific characteristics

In 2005 it covered cervical cancer, in 2007 breast cancer,

of every patient has allowed us to develop more research

then lymphoma, testicle cancer, prostate cancer, bone

protocols and incorporate more patients. After determining

marrow transplants, and colon cancer. Now, 36.5% of the

that most patients of ovarian cancer were young but were

population has full coverage giving them access to the best

already in advanced stages, a group of doctors gave a

available treatments. INCAN was introduced into Seguro

proposal to the Chamber of Deputies which allowed us to

Popular in 2005 which has allowed the institution to increase

create a functional gynecological oncology unit. A group of

the number of patients and their adherence to treatment,

Deputies helped us gain a MX$5 million (US$333 million)

reducing treatment abandonment to less than 3%.

budget for this unit, which was subsequently raised to

patients

acquire

medications,

medical

MX$11 million (US$733 million) in 2012 and now comprises

Q: How has Mexico’s epidemiological profile evolved over

about MX$35 million (US$2.3 million). This has allowed us

time?

to cover about 700 patients on all stages of the disease,

besides providing them rehabilitation. The “Centro de

prevention. These events are meant to be undertaken twice

Apoyo de Atención Integral” (Support Center for Integral

per year in states where these programs are viable, and we

Attention) provides quality psychological therapy for

have received several requests from states interested in

patients and their families, reducing the hardships in facing

incorporating “Cancerotón.”

the disease and its collateral effects. For patients who have survived this disease, INCAN has created a program called

Q: Is INCAN authorized as an Enabled Unit to facilitate the

“Supervivientes del Cancer” (Cancer Survivors) which aims

approval process for clinical studies?

to create a registry of patients who have survived for more

A: Yes, we belong among the Enabled Units and we are

than five years. This registry aims to collect information

already offering services for clinical trials. To this date

on the characteristics of the patients, their life quality,

we have supported seven different projects on their pre-

and integration to their work and society. It also collects

approval stage. We believe this area will grow exponentially

information on relevant legislation. Cancer survivors

mainly because we are improving our infrastructure.

commonly present side effects which alter their physical

We now have a new hospitalization area and a unit for

appearance and cause them to be discriminated by society,.

bioequivalence studies and clinical studies in phase I.

For instance they can lose their jobs, be rejected by their

These units will bring investments from international

own partners, and may become unable to obtain health

pharmaceuticals, reinforce medical attention, and generate

insurance. We are focusing on creating research policies

new research projects. Before the creation of the Enabled

and to generate legal and emotional support for patients

Units, the approval process for clinical protocols took

subscribed to this registry.

about 12 months. Now this process has been halved, which

The stories of survivors can

prove to cancer patients that cancer does not equal death.

will stimulate investments in this area.

Q: What other projects is INCAN developing?

Q: How is INCAN helping promote prevention and early

A: We have several strategies to support the population at a

detection for patients?

national level. Some of them are the development of a national

A: Following the Presidential initiative to develop the PIPCC,

registry based on the population, the “Cancerotón,” and the

INCAN began a series of meetings from 2008 to diagnose

PIPCC. The country has some hospital and histopathological

the state of cancer in Mexico. INCAN has begun to coordinate

registries, but it never has had a national registry of cancer

alongside specialists of different Health Institutions to establish

patients. A registry of this kind would allow us to determine

this program and diagnose the state of the infrastructure

incidence rates (new cases per 100,000 habitants), gain

of oncological units, equipment, and human resources,

information on the state of different malignant tumors and

among others. This is being elaborated by an intersectoral

their evolution over the years, and to register mortality for

board taking into account the objectives of the institute for

every new case on an annual basis. We began this registry

prevention, timely diagnostics, treatment, rehabilitation, and

on Merida, Yucatan, and we hope to see our first results

palliative care for cancer patients. Nowadays, from 60% to

by mid-2016. With the help of the International Agency for

70% of malignant tumors are diagnosed at advanced stages.

Research on Cancer (IARC) we are going to develop the

For example, breast cancer in Mexico is only diagnosed early

second registry of this kind on Guadalajara, and afterwards

10% of the time, while in the US 60% of breast cancer cases

on Monterrey. Having information on these three cities will

are diagnosed at early stages. Stomach cancer is another

allow us to have a representative sample of the incidence

example, as in Mexico it is diagnosed early only on 3% or 4%

of cancer in Mexico. This registry collected information from

of cases while in Japan is diagnosed early 90% of the time. A

local health institutions, including IMSS, ISSSTE, SEMAR,

late diagnosis of cancer can be catastrophic for the economy

PEMEX, and SEDENA, and it will enable us to generate public

of patients and their families, and for the public sector. Our

policies aimed to control cancers and tumors. The program

strategy focuses on prevention and timely diagnostics to

“Cancerotón,” created through INCAN’s patronage, aims to

prevent the progression of this disease. If this does not

bring information regarding cancer to the general public

happen, many resources are invested on patients in advanced

and to collect financial resources to acquire equipment or

stages that have a low opportunity for remission. Our current

develop specialized clinics aimed towards early diagnostics

priorities are to consolidate medical attention, professionalize

of breast, cervix, prostate, and colon cancers, as well as

oncology education, establish the “Colegio de Investigadores”

tumors on the esophagus cardia union. This program will

(College of Researchers) to define their main research

also allow states with good infrastructure to implement a

lines, and strengthen human resources for chronic non-

clinic for hereditary cancer in order to develop research lines

transmittable diseases. We are also going to strengthen our

for cancer prevention. The final goal is to actively engage

campaigns on several topics, including smoking and obesity

the public to make them aware of the importance of cancer

and the exposure to viral agents and pollution.

Mexico’s healthcare expenditure was 6.24% of the GDP in 2013, of which 48.3% represented

private expenditure according to the World Bank. Out of pocket spending represented 91.5% of the total private expenditure, with the little remaining covered by insurance companies. 20142015 witnessed the growth and expansion of big private hospital groups and their continuous quality improvement through General Health Council certification. At the same time insurance companies are increasing the number of products and services offered to the healthcare sector.

Achieving universal healthcare coverage requires closer collaboration between the public and private sectors. Private hospitals are open to collaborate with public institutions subrogating specialized services, while insurance companies are developing highly valuable cooperation models in which they could manage public budget with increased efficacy and significant cost-savings.

This chapter will examine the role the private sector has to pay in supporting universal coverage, along with the measures being taken to increase insurance levels.

• Quality of Mexico’s private hospitals • Integrated healthcare initiatives • Collaboration between public, private hospitals and insurance companies • Insurance penetration • Insurance policies and programs for chronic diseases

PRIVATE HEALTHCARE & INSURANCE

CHAPTER 3: PRIVATE HEALTHCARE & INSURANCE 64

ANALYSIS: Development of Private Healthcare in Mexico

MAP: Hospitals Accredited by the Joint Commission International

SPOTLIGHT: Process of GHC Certification

ANALYSIS: GHC Certified Hospitals in Mexico

VIEW FROM THE TOP: Alejandro Alfonso Díaz, ABC Hospitals / ANHP

VIEW FROM THE TOP: Javier Flores Hinojosa, Hospital San José |Hospital Zambrano Hellion

VIEW FROM THE TOP: Dr. Edmundo Mesta Casavantes, Hospital Ángeles Valle Oriente

VIEW FROM THE TOP: Alejandro Franco, Hospitaria

VIEW FROM THE TOP: Adriana Cavazos, Ginequito

VIEW FROM THE TOP: Dr. José Enrique Islas Varela, Insemer

ANALYSIS: Legislating Assisted Reproduction

VIEW FROM THE TOP: Juan Ignacio Gil Antón, GNP Seguros

ANALYSIS: Increasing Health Insurance Penetration Levels

VIEW FROM THE TOP: Juan Alberto Vélez Arredondo, Seguros Multiva

ANALYSIS: Bespoke Insurance Policies for Chronic Diseases

VIEW FROM THE TOP: Rogelio Domingo Lozano Gonzáles, Vitamédica

DEVELOPMENT OF PRIVATE HEALTHCARE IN MEXICO Mexico’s private healthcare infrastructure consists of

complying with high-quality requirements for medical

more than 3,000 private hospitals and clinics containing

attention and patient security – and eight are accredited by

35,000 beds according to INEGI statistics. In 2014, the

the gold standards of the Joint Commission International

Ministry of Economy stated private hospitals have played

(JCI). GHC’s requirements are aligned with those of JCI

a significant role in improving medical infrastructure in

and improve hospitals’ image while guaranteeing the best

Mexico since 2007, with a foreign direct investment (FDI)

medical practice, earning patients’ trust and preference.

of US$234 million in the last fourteen years. The market is dominated by major hospitals, such as Hospital ABC and

COLLABORATION BETWEEN PRIVATE AND PUBLIC

conglomerates including Grupo Ángeles Servicios de Salud,

SECTORS ON THE RISE

Grupo Star Médica, Christus Muguerza, among others,

At a time when Mexico is striving to achieve universal

which are paving their way for economic prosperity and

coverage, the importance of collaboration between the

growth. Three major trends characterize today’s private

public and private sector has become greater than ever

healthcare environment, namely consolidation and growth

before. Mexico has the largest out of pocket spending among

of hospital groups through expansions and certifications,

OECD countries – 45% of the total healthcare expenditure

development of highly specialized clinics and insurance

and 91.5% of private spending in 2013. According to the

services, and greater collaboration between the private and

OECD, out of pocket expenditure can create barriers to

public sector. Achieving universal coverage is perhaps the

healthcare access as households are more likely to delay

major driver as well as a growing middle class demanding

or forgo necessary medical attention when having trouble

high quality accessible services.

affording medical bills, resulting in financial crisis when the accumulated costs become so high that patients can

Private hospitals are diffusing competition to areas

no longer afford basic necessities such as food or clothing.

outside the three big cities. Grupo Ángeles Servicios de

The WHO recommends that countries keep out of pocket

Salud acquired CIMA México’s hospitals in the Northern

spending below 15% of the total health spending. In an effort

area of the country and announced plans to build three

to decrease out of pocket spending, private hospitals are

more hospitals and three medical towers in June 2015, while

willing to collaborate with public institutions by providing

Grupo Star Médica revealed its determination to expand to

them with highly specialized medical services. In the last

Veracruz, Chihuahua, Tijuana, and Leon. Moreover, Grupo

five years, IMSS has increased its expenditure on private

Christus Muguerza aims at duplicating its sales between 2014

services such as hemodialysis and radiotherapy from US$1

and 2017 through strategic alliances and operating existing

billion in 2009 to US$1.7 billion in 2014. Moreover, according

hospitals in the Western and central areas of the country with

to Xavier Valdez, Director General at IMS Health, IMSS

an FDI of US$100 million from its American partner Christus

recently announced a public tender to subrogate medical

Health. Along with expansion plans, private hospitals are

care for 16,000 diabetic patients to private institutions.

aspiring to obtain certifications. At present, more than 100

All of this represents attractive business opportunities for

private hospitals have been certified by the General Health

private hospitals and an example of cooperation between

Council (GHC) – the national elective recognition for hospitals

both sectors in improving access to medical care. Besides

HEALTH INSURANCE COVERAGE IN MEXICO 10,000

8,917

8,000

30%

70%

2,254

2,439

5,018

6,128 3,578

2,973

2,581 30% 2013

1,994

4,239

2012

1,465

2,012

4,222

2010

1,274

4,099

2009

3,889

3,934

2008

1,049

3,843

Source: SESA Accidentes y Enfermedades, INEGI

6,678 70%

2007

2,980

2206

985

6,476

4,029

2005

2,835

2003

3,820

5,354

6,093

5,339

2004

2,000

5,118

5,947

2011

6,000 4,000

8,659

7,991

subrogating services, public institutions could be further

in Mexico as well as the high cost of private insurance

aided by insurance companies, which could manage

coverage. The same consulting firm explains insurance

budgets and mitigate the administrative burden of the

policies are expensive for the average Mexican due to low

hospitals. The Mexican Association of Insurance Institutions

integration between public and private healthcare, while

(AMIS) is pushing forward a proposal which would enable

in other countries private insurance is a complement for

insurance companies to administer payments, manage

public coverage. In addition to increasing their market

risk funds, structure medical attention networks, and offer

penetration, insurance companies are aware that chronic

complementary coverage and integral programs for patients

diseases are the leading cause of death in Mexico, as well as

with chronic diseases, helping Seguro Popular to improve

of their economic impact. For instance, Seguros Monterrey

transparency, efficacy, cost savings, and productivity.

New York Life has an insurance policy, called Afronta, which covers cancer, heart attack, multiple sclerosis,

INSURANCE COMPANIES STILL HAVE LOW MARKET

stroke, Parkinson’s disease, and organ transplantation. AXA

PENETRATION

Seguros offers Vida DBTS, an exclusive life insurance for

Insurance companies also face the challenge of increasing

people with diabetes, while Seguros Multiva is focusing on

their market penetration in Mexico, as well as offering

developing programs for preventing diabetes. 2014 and

insurance policies for chronic and degenerative diseases

2015 have been characterized by strategies implemented

like diabetes and cancer. Today, 8.9 million people

by hospitals and insurance companies to expand their

have medical insurance – constituting 7.3% of the total

coverage while simultaneously providing the population

population – with only A, B, and C+ socioeconomic sectors

with quality medical services. More changes are expected

having access to it. According to PwC, the reasons for this

such as acquisitions, innovations, and greater collaboration

low market penetration include a lack of insurance culture

between private and public institutions.

| HOSPITALS ACCREDITED BY THE JOINT COMMISSION INTERNATIONAL

1. CHIHUAHUA, CHIHUAHUA

3. CANCUN, QUINTANA ROO

Clínica Cumbres Chihuahua (2008)

Hospital Galenia (2012)

Hospital Ángeles Chihuahua (2012) Centro Oncológico Chihuahua (2014)

4. MEXICO CITY ABC Medical Center IAP (2008)

2. SAN PEDRO GARZA GARCIA, NUEVO LEON

ABC Santa Fe (2008)

Hospital Ángeles Valle Oriente (2008)

Médica Sur S.A.B. de C.V. (2014) Source: Joint Commission International

| PROCESS OF GHC CERTIFICATION 1. SUBSCRIPTION AND SELF-EVALUATION Minimum

requirements

for

application

2. AUDIT include

Once the self-evaluation is approved, the hospital can

prerequisites that the hospital has been operating for

pass to phase two: a three-strand audit of patient care,

at least one year, and has the basic health license issued

internal systems, and other GHC standards. Auditors must

by the Mexican government. In addition, standards

be accompanied by a secretary from the hospital to take

relating to policies, procedures, and information systems

minutes of the inspection, ensuring that the voluntary nature

must be met at three levels: essential, necessary, and

of the hospital’s decision is respected. The inspections are

recommended. A hospital must comply with the entirety

conducted from an office space the hospital provides, and

of the first category, 80% of the second, and 50% of

are accompanied by feedback sessions at the end of the day.

the third. Because patient safety is the focal point

These feedback sessions allow for the immediate redress of

throughout the process, a commitment to high-quality

issues on the part of the hospital without effect on the status

standards must form part of the hospital’s mission

of the hospital’s certification process. The inspection body

statement.

produces a preliminary report, which allows the hospital

GHC CERTIFIED HOSPITALS IN MEXICO AGUASCALIENTES

Hospital Santa Catalina

Centro Hospitalario de Aguascalientes

Hospital Santa María Chapalita Hospitales Ángeles del Carmen

BAJA CALIFORNIA

Mundo Físico

Centro Médico Hospital del Prado Instituto de Oftalmología de Baja California

MEXICO CITY ASMED

CHIHUAHUA

Asociación para evitar la Ceguera en México

Centro Médico de Especialidades del Conchos

Centro Médico Dalinde

Christus Muguerza del Parque

Centro Hospitalario Sanatorio Durango

Clínica Panamericana de Chihuahua

Clínica CIME

Hospital Ángeles Chihuahua

Faco Laser Centro de Oftalmología Avanzada

Hospital Star Médica Ciudad Juárez

Hospital Español

Hospitales de Juárez

Hospital Médica Londres Hospital Merlos

COAHUILA

Hospital Trinidad

Beneficencia Española de la Laguna

Hospitales Ángeles Clínica Londres

Hospitales Ángeles Torreón

Hospitales Ángeles Metropolitano Hospitales Ángeles México

GUANAJUATO

Hospitales Ángeles Mocel

Hospital Insurgentes de Irapuato

Hospitales Ángeles Roma

Hospital San José de Celaya

Instituto de Oftalmología Fundación de Asistencia Privada

Hospitales Ángeles Leon

Conde de Valenciana

Médica Avanzada Contigo

Instituto Médico de la Visión

Médica Campestre

Laser Ocular Lomas Médica San Luis

JALISCO

Médica Sur

Centro Oftalmológico San Ángel

Operadora HMG

Centro Médico Puerta de Hierro

Sanatorio Oftalmológico Mérida

Hospital Country 2000 Hospital México Americano

MICHOACAN

Hospital Real San José

Hospital Fray Juan de San Miguel

Hospital San Javier

Hospital Star Médica Morelia

Hospital San Javier Marina

Sanatorio La Luz

Source: General Health Council, 2015

to address concerns without an impact on the application

3. DECLARATION

process. The first three days of the audit focus on medication,

The preliminary report is revised by the auditors and the

infections, and facilities. For the audit to be effective, the

commission before a decision is issued. The pass-grade

hospital’s board and personnel must all be present at an initial

for the audit requires hospitals to score five out of ten

conference, during which the hospital director introduces

for each standard requirement, with six out of ten for

the institution. The hospital’s risk management strategy is

each subsection, and an average of five across the whole

tested during a simulation, with an emphasis on the handling

standardization process. Where hospitals partially complete

of hazardous materials and response to emergencies. The

the required standards but pass the observation, or vice

preliminary report checklist includes punctuality, organization,

versa, they are given six months to fulfil the remaining

staff interactions, and interactions between staff and auditors.

criteria. Once approval is issued, the hospital must pass a

The report is intended to delineate the patients’ perception

verification audit, along with periodic, random visits by the

of the services they are receiving, as well as documenting the

auditors. If the hospital fails the certification process, it must

objective effectiveness of diagnosis, treatment, and recovery.

wait six months before it can make another attempt.

NAYARIT

STATE OF MEXICO

Centro Médico Puerta de Hierro Tepic

Centro Médico de Toluca

Hospital San Javier Nuevo Vallarta

Coorporativo Hospital Satélite Hospital de Especialidades Bosques de Aragón

NUEVO LEON

Hospital Río de la Loza

Audiodiagnóstico Alta Especialidad

Hospital San José Satélite

Christus Muguerza Clínica Vidriera

Hospitales Ángeles Lomas

Christus Muguerza Hospital Alta Especialidad

Novavisión Laser Center

Christus Muguerza Hospitales Clínica Cuauhtémoc y Famosa

Sanatorio Florencia

Clínica Supera García

Star Médica Hospital Vivo Parador Azteca

Doctors Hospital

Star Médica Lomas Verdes

Hospital Clínica Nova OCA Hospital

SONORA

Servicios Médicos Quirúrgicos de Monterrey

Hospital CIMA Hermosillo

Servicios Hospitalarios AVE

Hospital San José de Ciudad de Obregón

Supera MexFam

Hospital San José de Hermosillo

PUEBLA Hospital Puebla

QUERETARO Centro Láser de Querétaro Hospital San José de Querétaro Hospitales Ángeles Querétaro

QUINTANA ROO Centro Médico de Cozumel Hospital Amerimed Cancún

SAN LUIS POTOSI

TAMAULIPAS Beneficencia Española de Tampico Clínica Hospital CEMAIN Hospitales Ángeles Tampico Hospital Christus Muguerza Reynosa San Ángel Hospital

VERACRUZ Hospital Covadonga Córdoba Hospital Covadonga Orizaba Hospital Español de Veracruz Hospitales Ángeles Xalapa

Hospital Lomas de San Luis Internacional Hospitales Ángeles Centro Médico del Potosí

YUCATAN Centro Médico de las Américas

SINALOA

Clínica de Mérida

Hospital Fátima

Oftalmérida

Hospital Sharp Mazatlán

Star Médica Mérida

| VIEW FROM THE TOP

PRIVATE SECTOR APPROACHES, PUBLIC SECTOR PRINCIPLES ALEJANDRO ALFONSO DÍAZ CEO of ABC Hospitals and President of the National Association of Private Hospitals Q: To what extent are Mexico’s private hospitals now on

permitted to publish it, but many hospitals perceive a

par with the leading hospitals of the world?

risk in making certain figures publicly available due to

A: We encourage hospitals and clinics in the private

the possibility of damaging the hospital’s reputation with

sector in Mexico to focus on improving the image of the

unfavorable data. The way forward is to share information

country’s hospitals on a global scale. At ABC, we measure

within the private hospital association, a measure I have

our performance against the institutional standard, which

promoted for a long time.

is based on data from our affiliated hospital in Houston, Methodist International.

Q: Mexico’s recent reforms have had a limited focus on the health sector. What opportunities for reform, if any, have

The lack of indicators available in terms of Mexico’s

been missed?

hospitals is one of the things that must be addressed,

A: Although the healthcare sector has been performing

and the situation is exacerbated by the lack of shared

well, it has not received intense focus and any reforms

information between hospitals. Many hospitals fail to

implemented require time to bear fruit. The demographic

collate information in the right way and others are simply

changes taking place in Mexico are going to have an

wary of sharing. As the first hospital in Mexico to share

impact economically. Soon, current specialists will retire

clinical results online, we were disappointed that other

and young professionals will be required to fill the vacuum

hospitals did not follow suit. Our affiliation with Houston’s

in healthcare provision. Both the political gains and the

Methodist Hospital provides access to data that we can

real gains have to be examined when addressing this issue.

use as a benchmark, which is complemented by regularly

Many politicians want to build big hospitals, because that

reviewed indicators.

creates immediate impact, but this must be complemented with a long-term focus on areas such as the creation of

We aspire to be on par with any leading hospital in the world

talent, addressing the lack of physicians, nurses, and other

and we are industry leaders in certain specializations, such

healthcare professionals. The private hospital association

as neurosciences, orthopedics, cancers, and surgeries. In

has been stressing the importance of action with both the

order to achieve a high level of success, it is necessary

local and federal authorities.

to work over many years to change behaviors with the understanding that the hospital’s principal purpose is

At ABC we have three times the number of installations

providing quality treatment to patients. One mistake in

in place compared to ten years ago, but paying for

healthcare can change lives irreparably, so quality is non-

construction and new equipment is the easy part,

negotiable.

provided that funds are available. The daily running of the hospital is the area in which most focus should be

Q: With access to data regarding hospital standards in

centered, especially staff training, quality standards,

Mexico so limited for patients, how has ABC gone about

and provision of effective care. Fortunately, the current

creating awareness of its quality and services?

Minister of Health is aware of this issue and is working to

A: Sadly, information on quality of hospitals, surgeons

address it.

and procedures in the country is simply not available.

ABC has been actively promoting transparency in this

At ABC we put a lot of money into education, with an

area for several years, but in terms of our own reputation

investment of US$15 million every year. We recently began

we have so far been entirely reliant on first hand

working in conjunction with one of the most prestigious

recommendations and word of mouth. However, access

schools of medicine in Mexico, Tecnológico de Monterrey,

to required information is essential to both patients and

and we have built an entire student facility at our Santa Fe

professionals in order for the industry to evolve. The

campus. This is one of the only organizations in Mexico to

information is currently generated, and we are legally

host a fully integrated teaching hospital.

Q: How can cooperation between the various governmental

decrease in the average price per patient, meaning that

institutions help to prepare the entire industry for the

our cost-benefit ratio has improved. Ultimately, insurance

challenges that lie ahead?

companies are our partners, with an inextricable link

A: Policy makers in this country must recognize the

created by a mutually beneficial relationship in terms of

important and previously overlooked role of private

patient numbers. We have also implemented welfare

hospitals in improving the countryâ&#x20AC;&#x2122;s healthcare situation.

programs that run concurrently with our regular activities,

Private hospitals tend to be perceived as a manner of

the scale of which continues to grow as we become more

compensating for inefficiencies in the public sector, and

profitable. We have learned that if our patients and quality

the potential for referrals from public hospitals is not fully

are our focus, then profits will naturally see a positive

capitalized on.

impact.

Furthermore, too much installed capacity in the private

Q: What is one of the most exciting long-term objectives

sector is underutilized. In the private sector, we receive

for the hospital?

paying patients who are often only able to attend

A: One of our biggest challenges is to promote our

appointments at high traffic times such as mornings,

presence nationally and to provide access in previously

evenings, and weekends, leaving considerable potential for

untapped areas. In certain cities, populations lack access

the sale of services to the government at fixed costs that

to the sort of healthcare quality that ABC can offer, which

are lower than those we charge to the private segment.

is a challenge we want to address. I would like to see ten

This will not impact treatment provided to our current

hospitals opened in ten different locations in Mexico over

patient base, but will enable optimization of the facilities

the next decade.

we have in place. Our attitude to competition means we want to provide Q: Which misconceptions create the view that private

an appropriate range of services across a variety of fields.

hospitals exist only to serve the wealthy?

One factor requiring attention is acquisition of talent,

A: This perception is something that really bothers me,

because with our current geographic spread, talent can be

but due to the exponential improvements in medicine,

easily shared, but this will be made increasingly difficult

associated costs have been increasing. As an industry, we

with the procurement of more hospitals across widely-

are in danger of outpricing medical access despite our

spread areas.

highly developed medical services. We are working to reduce costs and refocus our attentions, allowing greater

Q: How would you like to be able to define the legacy of

access to the services we provide. Premium services will

ABC hospitals in the Mexican healthcare industry?

always be available for those who can afford them, but

A: I would like young doctors to focus less on individual

wider services should be more accessible.

advancement in favor of peer collaboration. It is only through working collectively across various fields and

For the last 50 years, the premium segment, ABC Plus,

institutions that patient care can be adequately prioritized.

has been our main focus in the provision of healthcare.

Simultaneously, by continuing to provide high-quality

However, having conducted studies on the population,

services across a wider demographic, we can make a real

we have found that the ABC Plus segment is expected

impact on the medical industry, achieving higher levels of

to experience limited growth in the future, whereas the

success.

economy segment has more growth potential. We will continue to invest in being able to provide first-class

We currently have a program in place designed to tackle

services, but we have now also made the strategic decision

pediatric congenital heart disease in collaboration with

to invest several billion pesos in more widely accessible

a not-for-profit institution called Kardias. As part of the

services.

program, we have so far performed approximately 100 surgeries on patients who were previously on long waiting

Q: What practical measures are you taking to increase

lists, using funds generated from ABC plus patients.

access whilst maintaining profit? A: For a long time, ABC has had a small quantity of patients paying a high cost for their healthcare, presenting the challenge of improving quality while reducing cost. In the last five to six years, we have been developing

The National Association of Private Hospitals was established to bring together the industryâ&#x20AC;&#x2122;s private institutions with the aim of improving the quality and prevlance of private healthcare in Mexico.

our relationships with insurance companies due to the

| VIEW FROM THE TOP

LEADING NORTHERN TEACHING HOSPITAL JAVIER FLORES HINOJOSA Director General of Hospital San José / Hospital Zambrano Hellion

Q: What is the relationship between Hospital San José

built with the specific intention of specializing in oncology

and Hospital Zambrano Hellion?

and cardiology, but afterwards we expanded our specialty

A: Both hospitals are part of the health division of the

portfolio to open several institutes that treat diverse

Tecnológico de Monterrey. Hospital San José will turn

diseases.

46 this year and has 200 beds, while Hospital Zambrano Hellion is only three years old and has 60 beds. Both are

Q: Does belonging to Tecnológico de Monterrey give

general hospitals that also provide highly specialized

these hospitals any advantages?

treatments as part of tertiary care, and are completely

A: Tecnológico de Monterrey shares our clear mission of

equipped with diagnostic imaging and hemodynamics.

providing improved services by educating excellent medical

The main difference is that Hospital San José provides

professionals. In 2014, we took an important step by

radiotherapy services. Our alliance with the School of

establishing our National Medical School at three different

Medicine of Tecnológico de Monterrey helps us support

campuses:

both hospitals. Hospital San José is perceived as both a

Tecnológico de Monterrey also has a strong R&D area,

medical school and as a specialized hospital, since we are

and its biotechnology center carries out groundbreaking

heavily committed to educating our medical professionals.

research. Sadly, we are unable to use any of its research

Monterrey,

Mexico

City,

and

Guadalajara.

because the expense involved in commercialization requires Q: How would you compare Mexican health standards to

external financing.

those in other countries? A: It is difficult to define a specific standard, since several

Q: What are the benefits of being part of the Monterrey

indicators must be considered and several major Mexican

health cluster?

institutions are interested in providing the best quality

A: The health cluster was created as a public-private

healthcare for patients. We are mainly concerned with

synergy in Monterrey, intended to position the city as

clinical outcomes, so we are establishing standards to be

a health hub. This is a long-term goal to which every

used across Mexico. Sadly, there is little public information

hospital contributes by providing qualified professionals

in Mexico comparing quality and patient outcome across

and to promote medical tourism. Moreover, the Director of

hospitals, so we are obliged to compare ourselves with

Nursing at Hospital Zambrano Hellion is now the president

foreign hospitals. As affiliates of the Houston Methodist

of the cluster’s Nursing Committee.

group in the US, we exchange and implement guidelines on best practices in our operation, administration, and clinical

Q: Do you consider Monterrey to be a popular destination

practice, thereby improving the quality of patient care.

for medical tourism? A: We continue to treat many medical tourism patients, but

Q: To what extent has the epidemiological shift in Mexico,

numbers have declined since 2004-2007 for example when

changed the approach of the hospital?

we received about 500 patients every year for bariatric

A: The epidemiological profile has changed significantly in

surgery. At the time this procedure did not have FDA

Mexico. Chronic diseases have replaced infectious diseases

approval in the US, but it was approved in Mexico, which

as the main cause of mortality in the Mexican population.

meant that this number dwindled once the FDA approved

In response, three years ago we established three strategic

the procedure in the US. We have made several efforts to

lines of action, prioritized at a financial and infrastructural

promote medical tourism through international fairs, and

level.

myocardial

we work with several brokers who sell our services abroad.

infarctions, heart failure, and other vascular diseases. Our

These brokers send us patients for highly specialized

neurology strategy treats cerebrovascular accident and

surgeries, but not as many as before. Niche work like

neurodegenerative diseases, while our oncology work is

bariatric surgery could boost sales again. Such procedures

focused on breast cancer. Hospital Zambrano Hellion was

become popular abroad when performed by highly trained

The

first

cardiology,

treating

medical professionals. Other factors have negatively

ISSSTE Nuevo Leon to provide tertiary care to federal

influenced medical tourism, such as the rise of organized

workers. The negotiation process for subrogating services

crime. Generally, 15% of our patients come from outside of

usually revolves around specific needs. For instance, Hospital

Monterrey, but between 2009 and 2011, we had very few

San José is accredited to provide care for breast cancer,

patients from other parts of Mexico. During these years we

cervical cancer, and pediatric cancer to Seguro Popular.

received absolutely no foreign patients and the number of

I can confidently state that our breast cancer program is

domestic patients plummeted, although the situation has

the most successful in Mexico. Since 2010, we have treated

greatly improved since.

650 patients per year from Seguro Popular. The number of patients gradually increased as word spread about the

Medical tourism comes about through efforts of individuals

availability of our services through Seguro Popular.

performing dental and cosmetic surgery. Other surgeries are usually covered by the patient’s health insurance in

Q: What certifications do Hospital San José and Hospital

their home countries. However, opportunities still remain

Zambrano Hellion have today?

for other specializations, such as with trauma patients.

A: We are currently working towards becoming accredited

These patients have either visited doctors who could not

as an academic medical center by Joint Commission

provide treatment or do not have medical insurance in

International (JCI). We are likely to obtain this accreditation

their home country. Procedures carried out in Mexico are

since we are collaborating with the School of Medicine

usually 30-40% less expensive than in the US, while the

of Tecnológico de Monterrey. JCI has accredited several

quality standards are the same. Insurance providers could

organizations worldwide, three of which are in Latin America.

lower their costs by outsourcing patients to Mexico.

We are currently submitting the necessary information and we expect to be accredited by the end of 2015. Hospital

Q: What percentage of your patients have medical

San José has already been certified by Mexico’s General

insurance and how many pay out of pocket?

Health Council (GHC), showing that we can adhere to strict

A: Numbers fluctuate but we estimate that 75% of our

certification standards, and Hospital Zambrano Hellion is in

patients have medical insurance while the rest pay out

the final stages of GHC certification.

of pocket. In Mexico, only 8.6 million people have health insurance, representing 7.3% of the population. In most of

Q: There are a high number of specialized physicians

Mexico, there is little interest from consumers to acquire

in large cities, but this number is substantially lower in

medical insurance, but larger cities like Mexico City and

rural areas. What can private hospitals do to increase

Monterrey are beginning to develop a different attitude.

coverage? A: The School of Medicine of the Tecnológico de Monterrey

As the Mexican population continues to increase, the

covers the entire state of Nuevo Leon. As mentioned, 15% of

government will have to outsource services to us, and it

our patients come from rural areas. Besides collaborating

is the responsibility of the entire health sector, including

with several smaller hospitals, our clinics provide emergency

public and private hospitals, medical insurers, and the

care for highly specialized procedures and we are building a

government, to anticipate this change. Mixed plans that

clinic in Santa Catarina with the assistance of municipal and

split the costs of medical care between the public health

state governments to provide medical care for low-income

sector and private hospitals are possible. Primary care

patients. We also began by providing ophthalmological

could be provided by the public health sector, with highly

care at that clinic before developing medical treatments

specialized medicine financed by health insurers and

for women and children. Another project aims to improve

provided in private hospitals.

the education of our doctors while increasing medical coverage in the entire Monterrey metropolitan area. The

Q: Is the amount of services you provide increasing or

School of Medicine of Tecnológico de Monterrey offers

decreasing as the public health sector strives to achieve

undergraduate and graduate courses, as part of which we

universal healthcare?

provide undergraduate education that takes place in our

A: We already sell services to the public health sector,

hospitals, while our postgraduate training at various centers

including IMSS and ISSSTE. This involves a bidding process

throughout the state. This program has been made possible

among the private hospitals interested in providing services

through collaboration between our hospitals and Nuevo

to the public sector. Such services are beneficial for us

Leon’s Ministry of Health. During the ten years since this

because they increase our patient numbers, and we are

work began, our students visited several hospitals to gain

able to incorporate public patients without affecting our

insight and experience, and medical coverage in the region

own patients. Since 2010, we have had an agreement with

has increased as a direct consequence.

| VIEW FROM THE TOP

A NEW VISION FOR A THIRD LEVEL HOSPITAL DR. EDMUNDO MESTA CASAVANTES Director General of Hospital Ángeles Valle Oriente

Q: Hospital Ángeles Valle Oriente is the result of the

comprising 42,000m2. We closed the ER as it did not

acquisition of Hospital CIMA – what is the new vision for

comply with national norms and we started afresh with

the hospital?

the construction of a new, appropriately equipped ER. Our

A: Grupo Ángeles acquired Hospital CIMA at a time when the

goal is to expand the ICU and focus on critical medicine,

hospital had fallen into bankruptcy due to an overall lack of

meaning we had to build an imaging department to allow us

understanding about the complexities of the private sector. In

to accommodate for emergencies. Currently, we have eight

Mexico there is a complicated interrelation between the public

beds in the ICU with plans to expand to 18 but we also want

health sector, the private health sector, and private insurance

to create a separate pediatrics ICU with eight beds. In fact,

companies, which private hospitals have to understand in

the restructuring of the hospital is so comprehensive that

order to thrive. The hospital had neglected to invest in the

when completed, only the original chapel will remain. We

appropriate equipment and infrastructure, and it fell behind in

expect the occupation level within the hospital to average

these areas. It was also the only hospital in Mexico dedicated

at least 60%, since in the private sector when a hospital

to pharmacovigilance, which is not a business model that can

reaches 75% occupancy it indicates that the hospital must

support a general hospital in this country and the appropriate

look at expansion. The situation is different from the public

investments to turn it from a pharmacovigilance hospital into a

sector where it is possible to achieve 100% occupancy with

general hospital were not made. Grupo Ángeles is an investor

ease. Such a feat is not desirable for private hospitals, as

in other successful CIMA hospitals and it wanted to establish a

having such high occupancy makes logistics complicated

hospital in Monterrey, since hospitals are heavily dependent on

and can place patients in unsafe conditions. Safety is one

private insurance companies and more than 20% of insurers

of our main concerns along with quality, so for that reason,

in Mexico are based in Monterrey. What interested us about

60% occupancy is the appropriate level to provide the best

hospital CIMA particularly was its location and its employees.

quality and safety to our patients. Another part of the project

After acquiring Hospital CIMA we started a complete

is a new 20-story tall building that we will start to construct

renovation of the infrastructure and equipment.

in March once we have obtained all the necessary permits.

Q: As newcomers to Monterrey, how do you plan to

Q: Do you think hospitals in Mexico can compete with

compete with local hospitals?

those in developed countries?

A: First of all, we want to learn from the mistakes of the past.

A: It is impossible to compare private hospitals in Mexico

Grupo Ángeles therefore wants to become the best-equipped

with those in the US or Europe, since the systems are unique

hospital group in Mexico, an ambition that we are already

to each country. Our goal is not to compete with hospitals

working to accomplish. For example we were aware that

in other countries but to become the best hospital in our

Doctors Hospital had a state-of-the-art 256-slice CT scanner,

specific area and to have the best equipment and the best

which was the best in Monterrey. We always aim to stay ahead

technology. No hospital can excel in every area so we must

of the competition, so we acquired a more advanced 384-slice

choose fields in which to specialize. At Hospital Ángeles,

CT scanner from Siemens. In the US there are no more than

we want to focus on clinical care, particularly radiology,

ten of these CT scanners, and there are probably only three

neurology, orthopedics, and internal medicine. We chose

of them in Latin America, and we are the first hospital to have

these specialties by analyzing current statistics on morbidity

this technology in Mexico. In order to be leaders in equipment

and epidemiology for the area, and since obesity is among

and technology we are not just renovating, but orchestrating a

the main diseases currently affecting the health of Mexicans,

complete reengineering of the hospital.

we are focusing heavily on cardiovascular disease.

Q: What capacity are you aiming for the hospital to have?

Q: How many of your patients have private insurance, how

A: At this point we have 75 beds and we are planning

many pay out of pocket, and how closely do you work

to expand to 150 beds with the anticipated final area

with insurance companies?

A: About 90% of our patients are insured and the remaining

in Mexico, and even in the US, are having trouble finding

10% pay out of pocket. We currently have several contracts

enough qualified nurses, even though a lot of universities

with private insurers and we plan to work more closely with

and medical schools are investing in educating these

these companies to make the system more efficient. In

professionals. The lack of interest in nursing as a profession

Mexico, very few people would invest in medical insurance

is largely due to the fact that nurses are not compensated

in the past as they were unaware of the benefits. Unlike the

adequately. While government agencies pay nurses a

rest of Mexico, however, people in Monterrey tend to have

determinate amount, private institutions cannot afford

greater awareness of the importance of medical insurance

to pay the same levels as we do not receive money from

due to US influence. Since private hospitals are dependent

the government to subsidize these costs. Currently, we are

on private insurers it is not possible to build these types

setting up education programs in collaboration with UDEM

of hospitals in areas that do not have the necessary

and Tec de Monterrey. We are only beginning to build the

population to support them.

infrastructure for residents and interns, and plan to start the internship program and a residency in radiology this year.

Q: What is your perspective on the potential to develop Mexico’s medical tourism sector?

Q: To what degree do you collaborate with the public

A: In my opinion there is no medical tourism industry in

sector?

Mexico, only private and singular efforts for out of pocket

A: We are currently collaborating with IMSS, ISSSTE,

services. Foreign patients come to Mexico for services that

and PEMEX to provide treatments for specialties and

their own insurance companies and healthcare systems

sub-specialties. The public sector mostly approaches us

will not provide, such as cosmetic and bariatric surgery.

for surgeries that require advanced equipment. We are

It is unlikely that patients with health insurance in other

planning to strengthen this collaboration with the public

countries will come to Mexico for medical care. It could

sector in the future when we have more of the necessary

be possible to develop a real medical tourism sector in

infrastructure. We provide the same high quality standards

Mexico, but several reforms would be required, such as

to all of our clients, but with some paying out of pocket and

an overhaul of policies of foreign insurance companies,

others insured, the amount they pay varies. Patients receive

which currently do not tend to cover medical expenses in

the same services with the only variation sometimes being

Mexico. This move could save insurance companies money

the rooms allocated to them. We are limited by the fact

but may affect private interests, as Mexico’s image is not

that IMSS and ISSSTE are not always willing to send their

as prestigious as other countries in terms of healthcare.

patients to our hospital, so we can only provide support.

Patients may also need to return to Mexico for aftercare,

At this point, it is more convenient to have one hospital

which could be problematic. These changes will not take

providing services for the public sector and a different one

place in the short to medium term as Mexico needs to

for private sector patients. At the moment, we are focusing

change its worldwide image to make patients feel safe.

on the A and B+ sectors of the population.

In this way, I do not believe that medical tourism is a real bankable approach, so while I would offer the services, I

Q: What specific goals does Hospital Ángeles have for

will not invest heavily in the practice.

2015? A: We have several goals. We must acquire all the necessary

Q: What current certifications does the hospital have?

equipment and prepare our medical professionals by

A: We are accredited by the Joint Commission International

training them in different centers with a high patient volume,

(JCI) and we are working on obtaining the accreditation

a project that will take about three years. Also, we plan to

from Mexico’s General Health Council (GHC). The former

start the construction of the new building and to obtain

has two different standards - process and structure - and

the GHC certification. I have no doubt we are going to

the latter has stricter requirements than those of the JCI.

achieve these goals, as from my point of view we have many

To get the accreditation from GHC you have to comply

advantages. We buy larger volumes at more competitive

100% on structure and 80% on process, and, as a results,

prices than anyone else and Hospital Ángeles Valle Oriente

not all hospitals in Mexico are accredited by GHC.

is backed by the whole Grupo Ángeles. Doctors are aware of the many advantages we offer and experienced physicians

Q: What are the biggest challenges that Hospital Ángeles

prefer us over the competition. I am a firm believer in a free

Valle Oriente, and the hospital sector in general, is

market where competition is based on a hospital’s statistics

currently facing?

of mortality, morbidity, and results, and with this in mind

A: One of our largest problems is the recruitment of nurses.

physicians will prefer our hospital. In the long term we aim

This problem is not exclusive to our hospital, as all hospitals

to build more hospitals in Monterrey.

| VIEW FROM THE TOP

INCREASING MEDICAL CARE IN GENERAL ESCOBEDO ALEJANDRO FRANCO Director General of Hospitaria Q: What motivated the choice of General Escobedo,

our case means that Hospitaria would need to have the

Nuevo Leon as the location for Hospitaria?

foresight to allocate resources today that will generate

A: An investment company that owned the land occupied

revenues after six to 12 months. Unfortunately, we do not

by the hospital in General Escobedo was interested in

have the capabilities to work in this way right now but it

starting a new business and founded Hospitaria in 2012.

is something we will certainly consider in the future. In my

The company conducted extensive market research and

experience, when a private hospital signs a collaboration

studied the area to understand the specific needs. Until

agreement with a public institution, its equipment and

recently, people from the surrounding community had to

operating rooms become saturated with external patients,

travel all the way to the center of Monterrey in search of

and this can discourage direct patients. We received a

high-standard medical services. In order to establish a high

collaboration proposal from one of the biggest public

quality hospital with specialized infrastructure in this area,

healthcare institutions a year and a half ago, which we could

the investment company had to partner with an expert

not accept because it was not in alignment with our growth

in healthcare services and finally decided to work with

strategy at that time. In hindsight, if we had accepted the

Ginequito. In addition, the World Bank also contributed

project, our growth would have been constrained.

financially to this project. Q: What are the biggest challenges facing physicians in Q: How does Hospitariaâ&#x20AC;&#x2122;s business model differ from

Nuevo Leon today?

other private hospitals in the area?

A: Mexico is the second most obese country in the

A: The mission of this second-level hospital is to provide

world. Educating the population on preventing disease

medical care at a fair price. Our mission is not providing

and leading a healthy lifestyle is challenging because it

cheap services, but giving patients the opportunity to pay

requires a cultural transformation. Average life expectancy

a fair price for services received. In the biggest private

in Mexico has increased over the years, but this also means

hospitals the percentage of patients that are insured can

that people suffer from chronic and degenerative diseases

be as high as 90%. At Hospitaria, 50% of our patients have

instead of dying from acute and infectious diseases. The

private insurance, while the other 50% pay out-of-pocket.

number of highly specialized physicians is increasing in

This requires the hospital to work more efficiently because

Mexico, but it is not easy to treat the complications arising

the latter group expects to see the benefits of every peso

from diabetes or to prevent cardiovascular problems when

paid. Contrastingly, privately insured patients are less

patients do not receive timely treatment. People are not

demanding because they perceive our services as part of the

accustomed to having annual check-ups or consulting a

benefits they receive for having insurance. This model will

physician when they feel sick. Transforming this mentality

allow us to also satisfy a future need for public healthcare,

is a difficult task for all parties.

which will consist of public institutions actively looking for private hospitals that can help them relieve their healthcare

Q: Which special programs or activities do you have for

burden. Hospitals that are able to provide excellent services

promoting prevention and opportune diagnostics?

at lower costs are the ones that will capture the attention of

A: We are convinced that improving health goes hand in

the public institutions.

hand with community work. We want people to experience our generosity and support, so we visit different companies

Q: What factors should be considered when deciding to

in the area to discuss breast cancer, accidents, obesity,

collaborate with public institutions in order to open the

and other topics. Some companies are concerned about

doors to their patients?

high levels of absenteeism. For instance, a company

A: Collaborating with public institutions, although altruistic,

shared with us that their female employees are frequently

is a complicated business. There are significant delays for

absent because their sons have addiction problems and

government institutions in terms of payment, which in

are often involved in street fights. We invited a psychiatrist

to help these women to preemptively identify problematic

such as pain intensity can only be properly expressed in

behaviours in their sons. We have also provided free

your native language. We expect the number of foreign

medical consultations within both the residential and non-

patients to increase in the medium term, but we need

residential areas of Escobedo and San Nicolás, Nuevo

to consolidate this market first and we do not want

León, which included basic blood tests and dietitian

our current patients to wrongly perceive the hospital

services. We have signed agreements with 80 companies

as providing expensive treatment because we receive

to provide them with emergency services, and we expect

foreign patients. Other private hospitals have completely

to be providing services to 150 companies by the end of

different price scales for foreigners, but currently we

this year. We believe it is important to have a significant

do not operate in this way. This could perhaps become

impact on the companies we are working with rather than

a competitive advantage in terms of attracting more

simply increasing our contract numbers.

medical tourists to our hospital.

Q: Are you currently providing any type of education

Q: What are your strategies for consolidating the business?

program?

A: We rely on our physicians and promotion campaigns.

A: One of the requirements that hospitals need to comply

We offer free membership for young physicians as well

with in order to become a teaching hospital is to have the

as highly specialized ones as both groups are invested

certification of the National Health Council. Hospitaria

in expanding their patient base. In this way Hospitaria

was founded two and a half years ago and hospitals are

represents an excellent platform for both patients and

ineligible to apply during their first year, so we are still in

physicians. We also have a very well-defined strategy

the process of becoming certified. Once we receive the

based on providing competitive prices and discounts to

certification we can start offering education programs. This

insurance companies. ABC Hospitals, Starmedica, Christus

does not apply to nurses and we are currently developing

Muguerza and other groups offer discounted treatment of

an education program for nurses.

between 15-28%, while we give discounts of 3-4%. Insurance companies accept this discount level because our baseline

Q: How have the requirements for the National Health

prices are already competitive. We have visited the general

Council certification changed and what other certifications

managers of several companies that have around 3,000

are you looking to acquire?

employees and pay up to US$380,000 for annual insurance

A: I had the opportunity to be involved in the Joint

policies. Each year this amount increases by US$63,000–

Commission International (JCI) certification of Hospital

US$95,000 due to the economic value of accidents in the

Christus Muguerza, which was the first hospital in Mexico

workplace. Hospitaria helps these companies lower their

to obtain this certification. At that time, the requirements

expenses through the offering of lower prices. In addition,

for certification set by the General Health Council (GHC)

we intermittently offer promotional discounted prices for

were not strict at all, but since then the level of exigency

different services and laboratory tests.

has increased tenfold. The requirements are similar to the JCI and nowadays they perform audits. Our current

Q: To what extent are private hospitals becoming more

focus is on obtaining the national certification and then

open to sharing data on clinical outcomes?

we can look outwards for an international certification.

A: We are part of the Mexican Consortium of Hospitals.

There is a Canadian certification that would be interesting

All of the hospitals that are part of the consortium share

to explore. These certifications are not only useful for

their outcome data, which are then collectively published.

providing patients with the most effective services, but

Nevertheless, hospitals still keep the information regarding

also for building a strong brand. This hospital complies

their underlying causes of treatment failure and mortality

with all FDA norms and requirements and the whole

confidential. Moreover, the names of the hospitals and

infrastructure was designed based on strict security

physicians are always protected, so the readers can only

parameters.

access the figures.

Q: Have you identified any interesting opportunities to

Q: What are your top priorities for 2015?

promote medical tourism within the hospital, and is this

A: My first priority is consolidating Hospitaria. I have

an area you are focusing on?

personally witnessed the inauguration and development

A: About 5% of our patients come from the US, Canada,

of several hospitals and I am impressed with Hospitaria’s

China, and Japan. These foreigners mainly work for

evolution. Our goal is to open eight hospitals in the next

companies based near the hospital. We have bilingual

ten years and we are also planning to expand to other

and multi-lingual physicians, which is important as factors

parts of the country.

| VIEW FROM THE TOP

COMPLETE CARE AT ATTRACTIVE PRICES ADRIANA CAVAZOS Commercial Manager of Ginequito

Q: What are the roots of Ginequitoâ&#x20AC;&#x2122;s unique positioning?

the general population and not be perceived as a hospital

A: Ginequito was founded in Nuevo Leon 39 years ago

solely for female care. The hospital will be connected to

by a group of gynecological doctors concerned with

the Ginequito wing that has 60 rooms, as well as to our

female and newborn health. Since then, we have been

other medical centers. In this way, the whole infrastructure

innovators. We were the first hospital in Mexico to employ

will become a comprehensive, interconnected medical

the gynecological laparoscopy, using glasses and cameras

complex. In addition, another wing will be opened for

to operate with keyhole incisions. We are also experts and

consultations, which will allow the doctors to remain close

leaders in assisted reproduction. The hospital is home to

to their patients.

the IECH fertility center, which saw the birth of the first

Mexican baby conceived through assisted reproduction.

Q: What differentiates Ginequito from other private

Assisted reproduction techniques can cause multiple

hospitals in terms of infrastructure and relationships with

pregnancies that can be high risk and babies can be

insurers?

born in critical conditions. In response, we have acquired

A: Ginequito focuses on the C and C+ segments, which

extensive experience in neonatal intensive care and have

have seen a shortage of beds within the private sector.

created the appropriate infrastructure in our Institute

Other hospitals have facilities aimed at A and B segments

of Maternal-Fetal Medicine, where the most specialized

that are not fully occupied. At Ginequito, 60% of patients

studies are carried out on pregnancy outcome, serving as

pay out of pocket and 40% have some form of health

a reference for other hospitals. We are currently working

insurance. We develop our relationships with insurers by

on a program incorporating feedback from parents who

offering competitive prices and charging for what the

have had premature, high-risk babies and who have

patient actually needs and uses, since we realize that the

subsequently left the hospital without complications.

patients seek to manage their expenses and streamline

Additionally, we have always been concerned with teaching

costs just as much as the insurance companies. We also

and innovation regarding this specialty. As a result we act

try to be as efficient as possible with our pricing since

as a base for the Gynecology Council exams that evaluate

insurance companies evaluate hospitals according to their

the doctors practicing in this field. Ginequito is also a

average annual costs in order to decide which policies can

medical society, and in our two medical centers we have

be covered. Our price level caters to all insurers, including

around 200 doctors practicing, the majority of whom are

policies with low and high premiums. Our doctors are

gynecologists. There is no other institution in Nuevo Leon

aligned with this strategy since it is their responsibility to

with the same concentration of specialists.

order the procedures and tests for the patients.

Q: How many patients do you treat each year and what

Q: What measures have you implemented in order to

have been the highlights of Ginequitoâ&#x20AC;&#x2122;s growth in recent

widen access for patients?

years?

A: We facilitate hospital access through packages that

A: Currently, we treat an average of 6,000 patients

include complete medical care but are more economic.

per year, 80% of whom are obstetrics patients and the

Doctors can offer these packages at preferential rates

remaining 20% require other female medical procedures. In

to patients facing financial difficulties. We also offer

2005, a floor was opened for surgical medical specialties,

payment plans as Alivio Capital, specializing in healthcare.

which also caters to general surgical procedures for men,

Ginequito has been involved in high impact projects like

without taking the focus from our main differentiator -

Hospitaria, a relatively new hospital located in Escobedo,

women. In the middle of 2016, we will open a new wing

Nuevo Leon, which was created to facilitate access to

for general surgery and specialty care that will belong to

comprehensive medical and professional attention in an

a new general hospital with 50 beds. This will be part of

area that previously lacked a hospital. Additionally, we

Ginequito, but will receive another name so as to target

have an agreement to treat public sector employees from

the town of San Pedro. Such towns have clinics for first

promotes the exchange and publishing of information to

point of medical attention but all the patients requiring

help generate more transparent and accurate statistics on

hospitalization and surgical intervention have to be

a national level. We also belong to the Mexican Consortium

transferred to a reference hospital. Private hospitals are

of Hospitals, which includes 32 private hospitals from

always open to negotiating with the public sector to find

across the country and is dedicated to building synergies

ways to increase the number of patients treated through

and sharing best practices in terms of medicine, ethics and

mutually beneficial arrangements.

human resources organization. We are accredited by the General Health Council with one of the highest qualifications

Q: How much interest is there from foreign patients in

and we are in the process of becoming recertified, which

seeking treatment in Monterrey and in Ginequito?

requires being audited. Having a prestigious certification

A: In reality, we receive very few patients in terms of

represents various advantages while also intensifying our

hospitalization and obstetrics because few foreign people

goal of continuous improvement.

want their children to be born in Mexico. However, in the field of fertility we see many foreign patients. Other procedures

Q: What are your main priorities for this year?

like cosmetic surgery, bariatric surgery, and varicose vein

A: Ginequito is a private hospital with the highest number

surgery are also attractive for medical tourists. Patients are

of births in Nuevo Leon and we are looking to solidify this

looking for specialization and we have qualified doctors who

leadership position through our focus on specialization

are recognized at the national and international level. In fact,

and support of doctors. Ginequito is a hospital with an

attraction of foreign patients to Monterrey is determined by

open-door policy, which means that the institution is

medical specialization and not by perception of the city

committed to help solve the problems faced by doctors

as a tourist destination. Additionally, we participate in the

just as much as those faced by patients. This is one of our

Health Cluster along with other private hospitals with the

main differentiators. Given that the group is expanding,

objective of making a united effort for the promotion of

it is important for us to enlist new doctors from other

medical tourism. We have established useful links between

specialties for the new General Hospital. Finally, this year

the hospitals and are focusing on strengthening each one

we will undergo the recertification process by the General

while mitigating the competition between us given that

Health Council, which undoubtedly will consolidate our

each hospital is defined by its specialty. The cluster also

strength and success.

Healthcare integral services analysis

Medical technology management training

Consulting and management of healthcare architectual projects, based in national and international references Investment and management analysis for healthcare projects

Clinical engineering department outsourcing services

Healthcare infrastructure and medical equipment planning

Reserch studies for planning and evaluation of new technologies

Risk assessment for medical technology procurement and management

Technovigilance management services for healthcare enterprises and hospitals

Escocia No. 24 Oficina B, Col. Parque San Andrés, Delegación Coyoacán, C.P. 04040 Distrito Federal, México. Tel: 011-52-55-53363815 011-52-55-56687440 /Escalabiomedica @Escalabiomedica

The key to the success of your projects in infrastructure and health technologies

| VIEW FROM THE TOP

ACCESSIBLE FERTILITY TREATMENT IN DEMAND DR. JOSÉ ENRIQUE ISLAS VARELA Director General of Insemer

Q: How do you define infertility, and how many couples in

Q: How do chronic diseases, such as obesity and diabetes,

Mexico are facing this problem?

impact fertility?

A: Infertility is categorized when a couple is unsuccessful

A: These factors negatively affect the possibility of getting

after a year spent trying to conceive through unprotected

pregnant. In the few cases where patients have diabetes or

sexual relations. Some of our patients had failed to

hypertension, we ask them to control their blood sugar or

conceive for up to 15 years before coming to us. Several

blood pressure before starting treatment. Our patients are

have even visited other clinics and doctors without success.

mainly young and healthy people who do not present these

Therefore, one of our main goals is raising awareness

diseases. However, obesity has been proven to reduce the

about infertility and reducing the number of couples who

viability of implantation, so we require that obese women

are under the impression that this problem can never be

reduce their weight to increase the chances of a successful

solved. About 15% of couples between 25 to 45 years old

pregnancy. Our treatment often includes various alterations

have fertility problems. We receive approximately 5,000

to patients’ lifestyle. They have to visit a psychologist to

patients per year and we perform In Vitro Fertilization

determine whether they are suffering from stress, depression,

(IVF) for about 1,000 of them. Most patients only require

or anxiety, or to help determine whether any problems within

preliminary treatments to get pregnant instead of an entire

the relationship might reduce their success rate. Our patients

round of IVF. The main factors that contribute to infertility

must also visit a nutritionist if they have weight problems. We

are smoking, living a sedentary lifestyle, endometriosis,

prefer not to start treatment until these situations have been

and age. The latter is the most significant factor as women

resolved so as to maximize the success rate of the procedure.

above 38 years old will find it difficult to successfully get

Nevertheless, we will still treat a couple even if they refuse to

pregnant due to the decreasing quality of the ovum. This

change their lifestyle to improve the success rate. Our ethical

same issue leads to increased risk of misscarriage and

committee helps us decide the proper course of action for

developmental problems.

specific cases. For example, we cannot accept patients who suffer from AIDS or terminal diseases, while women can also

Q: What is Insemer’s success rate?

be rejected due to their age.

A: Insemer aims to become an institute that can solve up to 90% of infertility problems. Our IVF treatments

Q: Which role do certifications and partnerships with

have a success rate of 50% after the first procedure, 75%

other hospitals play in your services?

after the second procedure, and above 90% once we

A: We are certified by the Advance Fertility Center of Texas.

reach the fourth treatment. This places us in the top five

This hospital helps Insemer to improve its techniques while

reproduction clinics in Mexico, and we are proud to say

we send physicians there for training. We also collaborate

that these numbers are consistent with the success rates

with Hospital Español, Hospital Ángeles, and Hospital

of clinics in Spain, the US, and the UK. A major problem

ABC to perform cesarean sections. We do not have other

for couples seeking IVF is that they often do not have

certifications yet, but we are working to obtain ISO 9000.

access to such treatments or switch doctors if the initial

This is a complex process for a hospital since there are

procedure fails, which can be detrimental as it is better

different regulations for every single profession within the

to undergo the entire process with the same doctor.

hospital, from nurses to administrative assistants, as well

This enables a doctor to better understand the specific

as for every specific room in the hospital, such as waiting

characteristics of each couple and implement necessary

rooms and operating rooms. We are working to obtain this

changes to improve the success rate of future procedures.

certification by the end of 2015.

The whole process, including laboratory tests and drugs

for ovulation stimulation, costs approximately US$7,000.

Q: Given that fertility treatments are not covered by

This compares to an average cost of US$21,000 in the US

insurance companies, do you offer financial support

for a treatment with the same success rate.

schemes for low-income patients?

A: We provide several discounts as we often receive

a reduced cost. The waiting list for one round of IVF in a

middle- to low-income patients. High-income patients

public hospital is eight months. Sadly, our government

usually travel to the US for fertility treatment. For some

perceives IVF as an unnecessary luxury and private insurers

reason, many of them tend not to trust Mexican doctors,

are unwilling to cover it for the same reason.

which is unfounded as Mexico has many highly experienced doctors. Our success rates are on par with those in the US

Q: How far away are we from being able to choose the

while our services are far cheaper. However, it is difficult

characteristics of our children?

to persuade many high-income patients of the value of

A: It is impossible to modify features such as hair or

seeking treatment in Mexico.

eye color but not to change the basic genetic profile of the parents. Parents can work with donors that have

Q: Which role could subsidized fertility treatments and

the desired physical qualities, and we can carry out

cooperation between public and private clinics play in

preimplantation genetic diagnostic tests to screen for

increasing access to such services?

genetic abnormalities. This is far more important than

A: Only two hospitals in Mexico provide subsidized fertility

picking superficial features such as eye color. Efforts are

treatments, the National Institute of Perinatology and

currently being made to determine the future health of

Centro Medico Nacional 20 de Noviembre, but they do not

a baby before birth. It is impossible to repair an embryo,

collaborate with private clinics. This differentiates Mexico

but it is possible to distinguish the healthiest embryo

from other countries. In the UK the NHS pays for the first

from those available. By mapping the chromosomes in an

round of IVF, while Argentina has passed a law allowing the

embryo, we are able to detect its predisposition toward

government to fund fertility treatments in private clinics. We

several types of cancer, hypertension, and diabetes, for

currently have the capacity to perform 2,000 treatments

example. Our studies offer a 99.9% certainty of a healthy

per year but we only perform half that number. If the public

embryo but, after implantation, further studies are

sector were willing to collaborate with us, we would be

performed to confirm the fetus health. So far, we have

able to acconditionate an additional 1,000 treatments at

never made a mistake.

LEGISLATING ASSISTED REPRODUCTION Mexico is well-positioned in terms of having advanced

same-sex couples that wish to procure surrogacy services.

fertility treatments, yet there is no legislation or public

Furthermore,

policy regarding assisted reproduction procedures to help

exclude certain people by default based on prerequisites

the 180,000 yearly registered infertility cases. This opens

such as age and, in extreme cases, marital status. The issue of

a debate about creating pertinent legislation for these

discrimination in the health system is pointed out by Pronahi,

procedures in order to guarantee citizen rights to form a

an organization that helps people diagnosed as infertile,

family and freely decide on the number of children they

which believes that the legislation should guarantee fertility

wish to have, as stated in Article 4 of the Constitution.

treatments for same-sex couples as well.

Some believe assisted reproduction should be part of the

Dr. Ingrid Brena, a researcher at UNAM’s Institute of Juridical

public healthcare system’s reproductive health portfolio,

Research, highlights the dangers in the lack of legislation for

related to family planning. At the moment there are no

surrogacy. She urges the authorities to guarantee the rights

policies that guarantee assisted reproduction services for the

of all the people involved in the procedure. She points out the

whole population, and there is no invigilation or regulation

complications in registering children born from surrogacy for

for private institutions that provide services. According to

male same-sex couples who have to undergo an adoption

CEFAM, a center specialized in female fertility, the most

process even if the child shares genes with one of the fathers.

simple assisted reproduction treatment in Mexico costs

According to her, most problems in this area come from the

MX$15,000, while more complex procedures, like surrogacy,

fact that many local civil regulations require the name of the

cost at least MX$690,000. Currently, the term “infertility”

mother stated in the birth certificate to match the name of

refers to couples that have been unsuccessfully trying to

the parents wishing to register the newborn. Considering

conceive for over a year, and excludes recurring pregnancy

that there have been at least eight initiatives to legislate

loss and couples that have failed to conceive again after a first

surrogacy, none of which proceeded to anything concrete,

child. The discussion on the right to assisted fertilization also

Dr. Brena accuses legislators of putting their beliefs ahead of

gives a voice to single women who wish to be mothers and

a social problem that affects millions of Mexicans.

many

assisted

reproduction

techniques

| VIEW FROM THE TOP

INSURANCE POLICIES TO IMPROVE ACCESS TO PRIVATE HEALTHCARE JUAN IGNACIO GIL ANTÓN Corporate Insurance Director of GNP Seguros Q: What factors have driven GNP Seguros’ growth within

productive, meaning that they perform better. However,

the health and life insurance segment in particular?

selling lifestyle changes is difficult as people do not realize

A: As the market leader in the corporate and individual

that this is a valuable investment. Consumers may be willing

insurance sectors, we have an excellent network of

to buy gym memberships, but convincing them to follow

stakeholders and branches. We also have the biggest

a health regimen is difficult. We want businesses to have

distribution chain of any insurer in Mexico. This is a competitive

larger and healthier workforces; we are not here just to sell

market, but we have a secure position. Our network has

a policy. We are beginning to offer businesses methods

strengthened over time, through the relationships developed

to reduce insurance expenses in order to improve and

with hospitals, doctors, clinics, and other stakeholders in

make medical attention more cost-effective. Since 90% of

the health sector. In fact, it is difficult to find a healthcare

clients referred to a hospital are covered by some insurance

provider who is not associated with us in some kind of

company, our intention is to lower the cost for hospitals.

business relationship. Our market share accounts for one

The affordability of private hospitals depends on insurance

third of all people who are insured in Mexico, amounting to

companies. If we become more expensive, then so do

approximately 1.1 million corporate clients.

they. Our goal is for private healthcare to become more affordable for more Mexicans. As such, our work is aimed at

Q: How has the market for private health insurance in

reducing the cost of healthcare for our clients. To work with

Mexico been evolving?

the public sector, we must take advantage of our strengths.

A: The incidence of serious illness is growing. Cancer and

We generally have better patient records management than

diabetes are taking up a large and growing outlay, both from

the public sector. IMSS can launch huge packages, such as

individuals and from the public health budget. As our lifestyles

an insurance program for diabetes serving around 16,000

change, more of us suffer from diabetes, hypertension, and

people, but it is not in the nature of a business to do this.

stress. While the number of people suffering from such

What we can offer is a more streamlined documentation

illnesses is growing, the proportion of policy holders remains

process to speed up the provision of treatment and the

quite low. While life quality, in general, is better than in the

issuing of policies, and tighten financial plans.

past, changing habits mean that health depends more on prevention than on surgical procedures. This will mean that

Q: What are GNP Seguros’ plans to improve its client’s

people get sick less often, and less severely, and it is possible

life quality?

to reduce the number of people suffering chronic illness with

A: We want to be seen as more than an insurance company

prevention programs. Companies and families can spend

by directly taking part in the health of Mexicans. Our

less on medical treatment if we have a healthier population.

interest in becoming a better company does not stop at

Knowledge is power here. By surveying risk factors, such as

an increase in revenue; we want to change the concept of

age and weight, we can predict what illnesses the population

health towards changes of habits and illness prevention.

is likely to suffer. Based on this data, we can help people

Consequently, our focus is improving the health of our

embark on a health management program. We foster

clients. Since Mexican women have a high incidence of

improvement in life habits, with a view to boosting health and

breast cancer – a preventable, treatable illness – we have

life quality. In investing in the lives of our clients, we are doing

offered check-ups and mammograms to all women who

something good for them.

have an insurance policy with us since 2013. We are also covering psychological costs related to the disease, both

Q: How would you describe GNP Seguros’ current

to the patient and to the family. This would reduce the

interactions with the public and the private sector?

pressure for IMSS and other public insurers. From a study

A: Since a number of cancers are related to lifestyles, the

on 2,000 people who made small changes in their basic

cost of these illnesses can be reduced with lifestyle changes.

health and fitness programs we observed an average 30%

Employees who get sick less often are happier and more

reduction in illnesses of all kinds across the group.

INCREASING HEALTH INSURANCE PENETRATION LEVELS The insurance sector in Mexico has a good balance

in Health in Mexico, published by AMIS and FUNSALUD in

between life insurance and non-life insurance, with the life

2015, cost is the main reason people do not seek medical

segment accounting for 45% of the total written premiums

attentions. Today 84% of the population is covered by public

in 2015. This proportion is expected to remain stable by

and private health insurance, leaving 16% or 18.7 million

2019. Both segments are forecasted to grow between 6%

people. Paradoxically, it is estimated that 64% of out of

and 7% per year. Among the factors contributing to such

pocket spending is either redundant to public expenditure

growth rates, population ageing and the increase in life

or incurred by the unprotected population.

expectancy are perhaps the most significant ones. This means that in the upcoming years, the number of people in

There exists a significant opportunity for both public and

the retirement age will continue driving the growth of life

private institutions to expand protection. The potential market

insurance premiums, since people who are older than 65

for private insurance is large, currently representing only

years tend to buy life products so as to feel more secure.

4.1% of total health expenditure. The top five general private

Improving healthcare provision and access to medicines is

insurers in Mexico are Metlife (16.23%), GNP (11.77%), AXA

vital to support the further growth of this segment.

Seguros (11.82%), Banamex (5.53%), and BBVA Bancomer (4.36%). In the individual health insurance segment the top

Government

efforts

expand

healthcare

coverage

five are Plan Seguro (42.52%), MediAccess (40.4%), AXA

through Seguro Popular have resulted in increased public

Seguros (7.68%), General de Salud (9.24%), and Centauro

spending, nevertheless, Mexicoâ&#x20AC;&#x2122;s out of pocket expenditure

(0.09%). As Seguro Popular has expanded affiliations with

remains the highest among OECD countries. A larger

the lowest income population, the private insurance sector is

penetration of health insurance would help in reducing this

now more likely to grow in an effort to reduce out of pocket

figure. Microinsurance products have good prospects of

expenditure. Two options are depicted in this area: innovation

growth and 66% of the Mexican population are potential

in the private insurance sector that is complementary but

microinsurance customers.

independent from the public sector, and innovation in the private insurance sector in close collaboration with public

Only 7.3% of Mexicoâ&#x20AC;&#x2122;s population has health insurance.

institutions, aimed at significantly increasing private and

According to a study, Towards Universal Financial Protection

public insurance and reducing out of pocket spending.

| VIEW FROM THE TOP

HEALTH INSURANCE PORTFOLIO SEES DOUBLE DIGIT GROWTH JUAN ALBERTO VÉLEZ ARREDONDO Director General of Seguros Multiva Q: Having worked for 30 years in the insurance sector,

A: The situation regarding chronic diseases is strongly

how would you characterize the evolution of the Mexican

related to education and socioeconomic levels, since most

market?

of the people suffering from these diseases are unaware of

A: The Mexican insurance market has become more

how to prevent them or of how to seek insurance services.

complex in a variety of ways: the largest insurers

Research into Mexico’s epidemiological profile indicates that

worldwide are entering the market, creating new trends,

most patients who suffer from these diseases are uninsured.

and introducing international best practices. This makes

While this is prevalent in Mexico, it has not yet affected the

the local market more competitive yet more saturated,

insurance industry, as we have not perceived a substantial

with local insurance companies having to work harder to

increase in the number of claims related to chronic diseases.

compete with the newcomers. Another factor affecting the

Based on the experiences of foreign insurance companies,

insurance market is the introduction of new technologies,

we are planning to launch a product focused on these

allowing consumers to be better informed about available

specific diseases. This can be complicated because we want

products and push insurance companies to improve

to provide the best quality service to this segment of the

services. Technologies are becoming more sophisticated

population, while, on the other hand, providing coverage for

and there is a worldwide initiative to adopt risk-based

already obese or diabetic people could pose a problem for

capital approaches to improve corporate governance. In

insurance companies. The very nature of insurance is that it

addition, new insurance regulations were implemented in

works by collecting small payments from a wider number

April 2015. These regulations explain the basic procedures

of people to cover the large costs of a limited number of

necessary to implement the risk-based capital approach

medical conditions. The best policy for a health insurer is

in Mexico. While similar systems are already implemented

to acquire as many customers with as few health issues as

worldwide, Mexico will be the first country in Latin America

possible to enable it to properly cover the medical needs of

to implement this model for the insurance sector.

very sick customers. For that reason the increasing number of people who are sick will negatively impact our currently

Q: What measures is Seguros Multiva taking to differentiate

healthy customers. By opening the door to include people

itself in this increasingly competitive market?

with chronic diseases, we will have to increase our prices.

A: While each company is different and has its own

We have to find the right balance in order to be able to offer

competitive

a competitive product for healthy people and those with

advantages,

Seguros

Multiva

has

the

advantage of being a Mexican company that belongs to

chronic diseases.

Grupo Empresarial Ángeles and Grupo Financiero Multiva, both of which support our growth. Seguros Multiva

Q: Do you foresee health insurance coverage improving

has many different business lines, but we are placing a

in Mexico?

particular focus on health. Last year, more than half of our

A: There is a poor insurance culture in Mexico, as 50% of

premiums came from the health sector, and this should

healthcare expenditure is paid out of pocket. However,

grow to 70% in 2015. Grupo Empresarial Ángeles has been

we are seeing increasing demand for health insurance

instrumental to our growth, as we provide health insurance

products from the general public. Most Mexicans use

for all its groups, including Grupo Financiero Multiva,

public services when they have a medical need, but they

Hospitales Ángeles, Camino Real, and Imagen. We are also

are becoming increasingly aware that social security might

working with several government organizations, such as

not be able to satisfy all their requirements and therefore

the UNAM, while seeking to build up our presence outside

are considering alternatives to complement their coverage.

of Mexico City.

We are also seeing increased demand as healthcare costs are rising and more people are realizing that they will need

Q: How is the insurance sector reacting to Mexico’s aging

insurance at some point in their lives to be able to afford

population and the increase in chronic diseases?

the best medical services.

PERCENTAGE OF THE TOTAL POPULATION WITH PRIVATE MEDICAL INSURANCE

expect similar growth for 2015, both in individual clients and corporate insurance. It will become increasingly difficult to continue to grow at this rate but we expect to

Year

Percentage

2003

3.7%

2004

3.9%

most insurance companies as the entire insurance industry

2005

4.9%

grew by about 3% in 2014 in Mexico. We opened three new

2006

2007

5.6%

2008

5.7%

continue expanding to the rest of Mexico, given the many

2009

areas where we do not have offices. We want to take full

2010

6.1%

advantage of the Grupo Ă ngeles network to fulfill our

2011

6.9%

2012

7.6%

2013

7.3%

be able to maintain double-digit growth for the next few years. Our rate of expansion is much larger than that of

branches last year in Puebla, Queretaro, and Leon in order to provide more comprehensive services to our clients for health, automotive, and other types of insurance. We will

potential. Our main priority for 2015 is to fully comply with new regulations, the second is to sustain our growth rate, and the third to improve our services for insurance holders and insurance agents. To do so we are working on several initiatives to improve our IT platforms, to

Source: SESA Accidentes y Enfermedades, INEGI

make our products more competitive, and to ensure they Q: How will the recent changes in the legal framework

comply with our clientsâ&#x20AC;&#x2122; needs. We are also promoting

impact your business?

several initiatives to improve working conditions for our

A: We expect that this reform will drive the entire industry

most valued capital: our employees.

toward a higher degree of professionalization and more corporate

governance.

This

reform

will

encourage

the sector to be more careful about the risks that it is underwriting, which will be positive for the whole sector. In the long term, the new regulations will push us towards innovation and efficiency, even though the learning curve will have an initial cost. Implementing said regulation will be expensive, as we will require more actuaries and new employees, as well as the improvement of our IT infrastructure and acquisition of new systems in order to produce the information required by the regulator. The initial increase in our expenses will impact our business and all others in the industry, which subsequently will have an effect on insurance prices. Therefore, this reform will negatively impact the immediate growth of the insurance industry, as new companies may have trouble starting up and smaller companies will not be able to afford the new regulatory requirements. However, some experts claim that the industry will be consolidated by 2017. While it may be necessary for us to pass the cost of implementing this new regulation onto our customers, we must be conscious of maintaining a competitive advantage now that the market is becoming more competitive. Q: How will your expansion manifest itself in 2015? A: Seguros Multiva currently has health insurance policies for around 45,000 people. We are a small insurance company but we are growing rapidly. In 2014, the company grew by 30% overall, but our health area grew by 50%. We

BESPOKE INSURANCE POLICIES FOR CHRONIC DISEASES Obesity is becoming a rising health concern in Mexico,

risk of hypertension by 21%, diabetes 26.3%, breast cancer

with 73% of adults over the age of 20 obese or overweight

22.41%, prostate cancer 44.67%, dyslipidemia 9.63%, and

according to IMCO. The country has already overtaken the

metabolic syndrome 4.68%. Similarly BBVA Bancomer offers

US and is one of the most obese countries in the world,

a popular health insurance package designed for those with

only surpassed by several small island nations in the Pacific

cancer, called RespaldoSeguro Contra Cáncer. If a patient

and a number of Middle Eastern countries. As a result, the

holds this product, the policy will pay out upon receiving a

prevalence of chronic diseases such as heart conditions

cancer diagnosis. The product is currently owned by around

and diabetes is steadily rising. It is estimated that chronic

50,000 people and the price starts at MX$150 per month

obesity related diseases cost the Mexican government

depending on individual circumstances. The policy is paid to

approximately US$3.5 billion annually. A person with

the beneficiaries upon death of the holder. Seguros Monterrey

diabetes spends approximately a third of their income on

New York Life (SMNYL) has sold 2.9 million of their Afronta

medical costs in Mexico. As part of the Seguro Popular

policy, which is designed to be taken out after diagnosis with

program for Mexican citizens there is access to treatment

a chronic or terminal disease such as Parkinson’s disease,

for chronic obesity related diseases at the Diabetes and

multiple sclerosis, and cancer. The policy works in a similar

Obesity Clinic in the Hospital de Especialidades of the

way to BBVA Bancomer’s RespaldoSalud cover and contains

Centro Medical Nacional Siglo XXI. However, providing

an identical 180-day cooling off period.

this care is a massive strain for government resources, especially as the number of people living with diabetes

These are welcome developments given the strain that

is expected to increase by 175% to 11.9 million patients

diseases like diabetes put on the government-funded

by 2030, according to CENETEC. As the government

Seguro Popular program. It is also a large market since it is

struggles to cope with demand, a private healthcare

estimated that ten million Mexican citizens have diabetes,

market is emerging, targeted at those living with chronic

but is it an effective business model for companies to offer

diseases like diabetes.

such a service to chronic patients? The answer is that the insurance policies have extremely strict requirements for

Typically, after being diagnosed with a chronic disease, it

payouts, while there are certain exclusions for payment,

is difficult for patients to find comprehensive, affordable

such as contraction of skin cancer and melanoma, cancer

healthcare due to the continual need for expensive medical

related to AIDS or HIV, and lung cancer as a consequence

procedures and medication, as well as the predisposition

of smoke inhalation, among others. In cases such as obesity,

to developing further chronic degenerative health issues.

companies are beginning to see untapped markets which

In 2012, AXA Seguros launched the first health insurance

may not initially seem to be profitable. However, for the

package in Mexico designed especially for those with

AXA policy alone, no similar product exists on the market,

diabetes called Vida DBTS. The benefits of the package are

meaning that the company has a monopoly position in a

two-fold: not only is it designed as a life insurance policy,

market consisting of ten million customers. Although the

but it also helps to cover lifelong health costs. Moreover, if

policy may not at first make business sense to the untrained

the patient’s condition is declared terminal, they can expect

eye, the list of restrictions and payout limits greatly reduces

to receive a payout of 30% of the value of the policy. The

the cost to the company. Such products are in great

cost of the insurance fluctuates depending on the type,

demand because people with chronic diseases have no

age and personal circumstances of the patient. However,

other viable, comprehensive option for healthcare coverage

someone of the age of 40 would generally expect to pay

and therefore are generally willing to pay higher premiums.

MX$1,000 per month. A man aged between 35 and 40

years old can receive a guaranteed payout of MX$1 million

The question of treatment over prevention is still a challenging

with a policy costing MX$986 per month, depending on

issue for the Mexican government. Currently, public spending

other factors. GNP Seguros offers the program GNP Cuida

on treatment of illnesses is 11 times greater than that on

tu Salud to generate positive changes in general health

education aimed at prevention. The government seems to

by evaluating the risk for developing several diseases and

be making an attempt at restrospective treatment rather

providing recommendations to promote a healthy lifestyle.

than preventing initial development of chronic diseases. The

It targets six chronic and degenerative diseases such as

private health insurances offered by companies such as AXA

diabetes, obesity, dyslipidemia, hypertension, breast cancer,

and BBVA Bancomer may help to alleviate some of the strain

and prostate cancer, and covers 15,000 employees at ten

on the Seguro Popular system so that the government can

different companies. A study conducted among 2,000

redirect funds to education campaigns, in turn mitigating the

people participating in the program showed it reduced the

need for such insurance products.

| VIEW FROM THE TOP

TAILORED IN-HOUSE CORPORATE INSURANCE ROGELIO DOMINGO LOZANO GONZÁLES Director General of Vitamédica

Q: What is the story behind the creation of Vitamédica?

then focus on healthier people to help them eliminate

What is Vitamédica’s main role in the healthcare sector?

unhealthy habits such as lack of exercise, a poor diet, and

A: Vitamédica was created through the merger of two

high levels of stress. We also want to help them identify

healthcare services administrators: Meximed and Vitamédica.

specific genetic factors that potentially increase the risk

It was created to address the previously unsatisfied need

of developing certain diseases. Chronic diseases require

to provide health services to the employees of two banks.

an integral management, so we are creating more and

Vitamédica is a unique organization in the healthcare

more specific programs to provide these prevention and

sector of Mexico due to its service philosophy, excellence,

diagnosis services.

coverage, and a win-win negotiation scheme. We are backed by more than 20 years of experience and we currently have

Q: How does Vitamédica choose its suppliers?

four business lines: Products and Insurance, Reversion

A: We have a series of stringent requirements in place for

Banks, Assistance, and Business and Preventive Health.

suppliers, doctors, clinics, and hospitals. For instance, we

These were designed for the creation and administration

ask doctors to be able to prove their medical qualifications

of medical service networks. We mainly provide service

and we ensure that they are accredited by the council

to banks, insurance companies, and corporations. Some

in their specific specialties. Vitamédica ensures that all

examples of our services are compensation processes and

clinics and hospitals have the necessary operational and

the administration of medical services from the first level

sanitary permits. To facilitate access to medications for

of attention to hospitalization, which are provided through

patients who are located in rural communities where there

a network of more than 10,000 suppliers, more than 6,500

are no pharmacy chains we are currently working with

doctors, hospital services, and pharmaceutical services with

approximately 150 and 200 independent pharmacies. It

more than 6,800 points of sale on more than 600 locations

is common for rural areas to have few medical services,

on the whole country. We work mainly by providing health

thus it is sometimes necessary to relocate complex cases

services required by companies to their employees, but we

to areas with better resources. In some cases it has even

also work with companies that are interested in improving

been necessary to move patients to the areas of the

their employees’ quality of life. We do not generate

country with a high concentration of medical facilities,

insurance policies, we only administer them.

like Mexico City.

Q: What do chronic degenerative diseases represent for the

Q: What are your priorities for 2015?

healthcare sector and how does Vitamédica address them?

A: We are focusing on improving the service we are

A: The need for medical services is rising, which is

providing to our current customer base rather than looking

accompanied by an increase in the number of healthcare

for more clients. We will also begin to implement two

policies and insurance. On the other hand, the price of

different business lines focused on contained measures

medical services has also risen as a byproduct of the

to create a more effective system for available services,

increasing prevalence of chronic degenerative diseases

and on the development of prevention strategies with a

which are starting to become a large burden on Mexico’s

specific focus on diabetes, hypertension, and metabolic

healthcare system. We believe this problem is of great

syndrome since they are the fastest growing diseases

importance so we are gradually focusing on prevention

on the Mexican population. We are trying to develop

programs. We have initiatives aimed at individuals who

prevention strategies which will allow better management

are at early stages of the disease, as well as preventive

of resources to simplify access to specific services. This

measures for those who are healthy. The goal is to

is important as our country does not have the necessary

promote healthy habits to avoid the incidence of acute

doctors and specialists available in every area, so it will

cardiac events that require immediate hospital attention.

be necessary to widen our network in order to facilitate

Our strategy is to begin with high-risk individuals and

access to medical professionals.

Mexico is the eleventh largest pharmaceutical market in the world and the second largest in Latin America with an average annual growth of 4.7% and FDI of US$2.86 billion between 2005 and 2012. The increase in life expectancy and pharmaceutical expenditure, an improving regulatory framework, and a stable business environment are the major drivers for industry’s growth. The pharmaceutical landscape is however undergoing an important transformation with the increasing demand for cheap drugs, patent expirations, changes in the distribution segment, and

important mergers and acquisitions forcing big pharmaceutical companies to adapt strategies to stay competitive. Access to new medicines also remains a topic of major importance to be addressed in order to promote the industry’s competitiveness.

This chapter will provide an assessment of the recent changes in regulation and industry trends as well as a discussion of the strategies implemented by big pharmaceuticals to stay ahead of the competition in these times of change. As innovation remains at the core of big pharma companies, access to new medicines and barriers to innovation in Mexico will be examined as well as business opportunities in the orphan drug niche market.

HIGHLIGHTS • Changing landscape • Competitive strategies • Regulatory improvement • Access to new medicines • Focus on R&D and innovation • Orphan drugs

BIG PHARMA

CHAPTER 4: BIG PHARMA 90

ANALYSIS: Universal Health Demands Propel Growth

VIEW FROM THE TOP: Cristobal Thompson, AMIIF

INNOVATIVE DRUG SPOTLIGHT: Zykadia (Certinib) from Novartis

VIEW FROM THE TOP: Ugo de Jacobis, AstraZeneca Mexico

VIEW FROM THE TOP: José Alberto Peña, GlaxoSmithKline

VIEW FROM THE TOP: Miguel Salazar Hernández, Boehringer Ingelheim

100

VIEW FROM THE TOP: Rafael Suárez, Ferring Pharmaceuticals

101

INNOVATIVE DRUG SPOTLIGHT: Striverdi Respimat (Olodaterol) from Boehringer Ingelheim

102

VIEW FROM THE TOP: Tomás Bordonaba, Grünenthal

102

ANALYSIS: 3D Drug Printing Gets FDA Go Ahead

104

VIEW FROM THE TOP: Dr. John Markels, Merck Sharp & Dohme

105

INNOVATIVE DRUG SPOTLIGHT: Dolutegravir from GlaxoSmithKline

106

VIEW FROM THE TOP: Karel Fucikovsky, Pierre Fabre Médicament

107

INNOVATIVE DRUG SPOTLIGHT: Imbruvica (Ibrutinib) from Janssen-Cilag

108

VIEW FROM THE TOP: Luis Calderón, Alexion Pharmaceuticals | AMIIF

110

ANALYSIS: Bringing Hope to Patients with Rare Diseases

111

VIEW FROM THE TOP: Dr. Dea Herrera, AFM

112

ANALYSIS: No Sign of Slow Down for M&A Activity

113

SPOTLIGHT: Trans Pacific Partnership

UNIVERSAL HEALTH DEMANDS PROPEL GROWTH Mexico is the eleventh largest market for pharmaceuticals

importance of generating and maintaining brand loyalty

in the world and occupies second place in Latin

among Mexican physicians.

America after Brazil. 20 of the 25 leading international pharmaceuticals are operating in Mexico, demonstrating

Mexico also offers several advantages for the manufacture

the strength of the sector. According to ProMéxico, from

of pharmaceuticals, including its proximity to the US and its

2005 to 2013 an annual average of US$400 million a

low manufacturing costs. Miguel Salazar Hernández, Director

year was received in foreign direct investment totaling

General of Boehringer Ingelheim Mexico, explains that for

US$3.46 billion of overall investment in the industry. In

the company manufacturing advantages include “a lot of

2013 the pharmaceutical sector’s production was valued

flexibility allowing customization of services for patients,

at US$13.98 billion and, based on ProMéxico’s average

benefitting the social security system, and enabling us to

annual growth projection of 9.6% from 2014 to 2020, this

mantain competitive costs. Mexico is proving to be more

figure is expected to climb to US$24.21 billion by 2020.

competitive in the manufacture of pharmaceuticals than

Furthermore, in 2013 Mexico’s pharmaceutical exports

China.”

were valued by ProMéxico at US$1.7 billion with the main markets being the US and Latin America.

While Mexico’s pharmaceutical sector seems to be in an excellent position, it faces hindrances such as

Mexico’s

patented

austerity policies, expiration of patents, and the rise of

medicines, which represent 51% of the market (US$7.4

current

market

divided

into

generic medications. The industry is also adapting to a

billion), generics, which comprise 35% (US$5.1 billion),

changing market as the country conforms to a shift in its

and the remaining 14% represents over the counter (OTC)

epidemiological profile, from infectious diseases to chronic

products (US$2.1 billion). In terms of volume, COFEPRIS

degenerative diseases. This has emerged as a result of an

states that generics represented 84% of the market in 2014

aging population, a sedentary lifestyle, and the growing

and this figure is expected to continue rising.

number of overweight and obese individuals. Chronic diseases are becoming an increasing burden for the

Rafael Gual, Director General of CANIFARMA, states,

healthcare sector. The latest Survey of Health and Nutrition

¨the industry has evoloved greatly over the last five years

(ENSANUT 2012) showed that at least 60.6 million

and we have designed a strong development program¨.

Mexicans, 52% of the population, are either overweight or

The association recently published its first census of the

obese. The Mexican Institute for Competitiveness (IMCO)

pharmaceutical industry and identified a 7.2% share in

indicates that the main causes of mortality in Mexico are

manufacturing GDP, ranking the sector as one of the

diabetes, cardiovascular diseases, and tumors. IMCO has

largest manufacturing sectors in Mexico, second only to

discovered that “obesity can also be a risk factor for other

the automotive sector. According to CANIFARMA, 80,000

diseases, it can be a drain on a system where people are

people are currently employed in the sector, approximately

hospitalized and treated due to being overweight, and

45% of whom are sales representatives, demonstrating the

it causes absenteeism in labor terms as well as a loss

PATENT DRUG MARKET FORECAST 100

75 US$10.2 billion 10

50 US$7.4 billion 25

Source: Business Monitor International

2023f

2022f

2021f

2020f

2019f

2018f

2017f

2016f

2015f

2014f

2013

2012

2011

2010

2009

of productivity.” A central issue for any government is

manufacturing plant in Mexico in order to encourage the

ensuring access to medication for its entire population,

introduction of new medicines into the country. Patent law

thus there is now a growing interest in the development of

was also modified to include chemicals and now patents

medications to treat these diseases.

initially grant protection for 20 years with the possibility of a further three year extension.

The innovative pharmaceutical sector is also facing challenges. Cristobal Thompson, Executive Director of

It is important to consider that the pharmaceutical

the Mexican Association of Pharmaceutical Research

industry may not just be affected by local regulations but

Industries (AMIIF), is concerned with the limited access to

also by international ones. The Trans-Pacific Partnership

pharmaceutical innovation because “according to a report

(TPP), a proposed trade agreement on economic policy,

developed by IMS Health last year, patients in the public

is advocating initiatives including the protection of clinical

system have access to less than 10% of innovation approved

data, an agreement for which Mexican organizations like

by COFEPRIS. Innovative treatments that are being

AMIIF are currently involved in negotiations on behalf of

approved take almost five years to do so, which, compared

the innovative sector. Socorro España Lomelí, Executive

to key global markets with similar levels of economic

Director of the National Association of Medication

development, constitutes the longest timeframe.”

Producers (ANAFAM), paints a less favorable picture of this treaty as she believes that it could create complications for

Nonetheless, Ugo de Jacobis, AstraZeneca’s President

Mexican industries who may take a long time to reach the

and Director General, points out that “Mexico, along with

standards proposed by the TPP thus delaying industrial

Brazil, is one of the few countries in the Latin American

growth, exports, and the development of biotechnological

region

pharmaceutical

medications. Several groups, including Doctors without

innovation.” Mexico is not necessarily leading in R&D at

borders and Oxfam, warn that this treaty will stall growth in

this point in time, but this is steadily changing. Prior to the

developing countries as it will affect patents and increase

administration of President Enrique Peña Nieto the total

the cost of medications. Most discussions between

amount of investment in R&D in Mexico was just 0.37% of

TPP members are private and thus public information

GDP, an extremely low amount in comparison to the 6%

remains limited, meaning that determining the potential

average of the OECD. This is perhaps the ideal time to take

implications is difficult.

that

continues

invest

advantage of the federal government’s new philosophy concerning R&D, pledging an increase in spending to 1%

The rise of generic medications may seem like a threat to Big

by the end of this year.

Pharma but this is not necessarily the case. As Dagoberto Cortés, former head of CANIFARMA and Director General

There is still ground to be gained. For example, while

of Hormona, states that “generics represent significant

COFEPRIS has streamlined its approval process, at this

savings

point innovative medicines still take up to five years to

thus freeing up budget for the acquisition of innovative

be approved by the National Formulary. COFEPRIS is in

medicines. Currently, 80% the government’s budget is

the process of homogenizing its regulations in line with

used for innovative medicines, which now represent less

international authorities in Central and South America and

than 20% of its acquisitions by volume. International

was recently recognized by PAHO as a regulatory agency

pharmaceuticals are also creating new strategies to adapt

of reference. Gema Moreno Vega, Partner and Leader

to the shifting market. Thompson states that now “almost

of Life Sciences and Healthcare Industry at Deloitte,

all of the big pharmaceutical companies have a generic

states that this recognition will “allow companies to sell

company or division within the corporation” and many are

a product in [Central and South America] as soon as it is

developing biosimilar products. De Jacobis also mentions

approved in Mexico whilst harmonizing regulations with

AstraZeneca’s strategy to provide “integral services and

those of the FDA.”

disease management programs.”

Local regulations will prove an important factor in promoting

Mexico currently seems to offer fertile ground for productive

innovation and strengthening the pharmaceutical sector in

investment where the pharmaceutical industry can find

Mexico. John Markels, General Director at Merck Sharp &

plenty of opportunity to grow. Recent epidemiological shifts

Dohme (MSD), states that “Mexico is an very good place to

may increase the need for innovative medications to treat

do business” as companies can take advantage of a “growing

the growing patient population, and regulatory changes by

population, large market, strong IP protection, improving

the government are expected to ease the introduction of

regulatory infrastructure, a significant private laissez-faire

new medications into the country while safeguarding the

market and a significant public market.” Mexican authorities

health of its citizens. While the Mexican healthcare sector’s

have modified and created new regulations in order to

reliance on generics may be perceived as a threat to the

facilitate the production of medications in Mexico. In 2008,

industry, innovative strategies to adapt to this market could

the government gradually eliminated the need to have a

turn this into a further opportunity for growth.

government

expenditure

medicines,”

| VIEW FROM THE TOP

PUSHING FOR AN INNOVATIVE HEALTH SYSTEM CRISTOBAL THOMPSON Executive Director of Asociación Mexicana de Industrias de Investigación Farmacéutica (AMIIF)

Q: As an advocate of pharmaceutical innovation, how

A: The national legal framework has evolved but there

would you harness Mexico’s innovative strengths and

are still some issues that need to be addressed. Firstly,

what needs to be done to create an optimal environment

it is necessary to guarantee effective enforcement of

for innovation promotion?

formulation and use of patents in order to mitigate the

A: The low level of access to pharmaceutical innovation is

risk of product infringement. Secondly, there is a huge

a concern. According to a 2014 IMS Health report, patients

concern regarding the require protocol for removing

in the public system have access to less than 10% of the

products found violating patents from the market.

innovation approved by COFEPRIS. Mexican approval of

Thirdly, linkage systems must include patent use in

innovative products is the slowest compared to global key

accordance with the Court precedents. Furthermore,

markets, taking as long as five years. With non-commutable

the statutory reform of implementation of regulatory

diseases on the rise, it is essential to give the patients the

data protection is still pending, as the guidelines in force

opportunity to access the available treatment options at

could be questioned or revoked at any time. Finally, it is

the earliest stage of their disease. We believe that a higher

necessary to establish clear criteria for the importation

efficiency in health spending (current spending of 6.2% is

of raw material or finished product for those importers

the lowest in all OECD countries) is the first critical step.

that are seeking a marketing authorization, due to

There is then a need to increase the spending to levels

the possible abuse of the Bolar exemption by some

similar to the average of OECD countries.

importers.

MEXICAN PHARMACEUTICAL INDUSTRY DATA Proportion of GDP

1.2%

Proportion of manufacturing GDP

6.8%

Annual exports (US$ billions)

2.2

Q: The regulatory agency is now more efficient – nonetheless, what key areas need to be addressed in order to bring more investment to Mexico? A: The current officials in COFEPRIS have offered the pharmaceutical

industry

open

communication

Health expenditure (percentage of GDP)

6.2%

channel as the main mechanism of interaction between

Health expenditure per capita

1,048

authorities and industry. This environment allows us

Total pharmaceutical market (US$ billions)

Direct jobs

74,600

Indirect jobs

313,605

to have a platform to promote the use of international standards

from

clinical

research

marketing

authorization. With the adoption of these international standards by COFEPRIS, we have the recognition from PAHO and the WHO of the Mexican regulatory authorities

Source: COFEPRIS, CANIFARMA & INEGI

as a reference agency for drugs and vaccines.

Another area of great interest is Clinical Research, in which innovation industry currently invests US$160 million a year.

There are currently two main challenges: firstly, to find

Despite COFEPRIS’ improvement of protocol approval,

out how to harness the potential of Clinical Research in

further acceleration in the next two to three years in line

Mexico as the main opportunity to attract investments

with benchmark countries means investment levels could

from pharmaceutical companies. In order to do so,

reach over US$500 million a year. Yet another factor that

we must implement a clear pathway for the clinical

would contribute to an increase in this type of investment

protocols authorization process. Secondly, in terms of

is tax benefits.

the initial steps for introducing new products into the national market, it is critical to ensure the transparency

Q: Is the Mexican based big pharmaceutical industry

and efficiency of the New Molecule Committee and its

satisfied with the current patent protection environment

subcommittees to avoid unnecessary delays when a new

in the country?

product submission has been filed. We are currently

working with COFEPRIS on both issues and we expect

in the development of new medicines or in the research

to have made developments by the end of the year.

of new uses. Furthermore, this legislation extends to all national and transnational companies who invest in

Q: How can multinational companies collaborate with

clinical research; anyone can be the subject of protection.

the government in order to further improve access to

Regarding the TPP negotiation, AMIIF has presented its

pharmaceuticals?

position to the Mexican government and we are following

A: There are common priorities for pharmaceutical

the negotiation. I would say that companies cannot be

companies and the government when it comes to health.

clasified as exclusively innovative or generic. On one hand,

Having a healthy population and reducing recovery

almost all of the big pharmaceutical companies have a

time increases productivity in the workforce. Under this

generic company or division within the corporation and

scope we understand that innovation and technology are

some of them are working to develop biosimilar products.

strategically crucial to reaching our target. That is why we

On the other hand, there are generic companies investing

are developing new collaboration frameworks aimed at

in research and development. In this way their positions

improving processes and generating data. One of our most

are not completely divergent.

ambitious government proposals relates to innovation access models.

Q: What are AMIIFâ&#x20AC;&#x2122;s goals over the coming year? A: We aim to continue working to accelerate patient

Q: How will the Clinical Data Protection initiative benefit

access to innovation and to work in alliance with the public

the local pharmaceutical industry? Do you believe the

sector to pave the way for attracting increased investment

innovative and generics industries can reach agreement

in the field of Clinical Research. We want to become

on their varied positions on the matter?

a strong actor in supporting the transformation of the

A: Clinical Data Protection refers to the process of

health system in order to achieve superior outcomes by

obtaining protection against unfair commercial use and

increasing the expenditure and spending more efficiently.

reliance on the information enclosed in the product

We advocate the premise that we are all patients, so we

dossier. As a matter of principle, clinical data protection

will adhere to our commitment of contributing to better

gives peace of mind to those who invest millions of dollars

healthcare in Mexico.

| INNOVATIVE DRUG SPOTLIGHT ZYKADIA (CERTINIB) FROM NOVARTIS

a phase I study and 37.1% in phase II study. While at this

Highlighted as one of the four new medications to treat

point there is insufficient clinical information to determine

lung cancer approved by the FDA since 2011, Zykadia is the

whether patients treated with Zykadia live longer, a

result of an approach based on a thorough understanding

median duration of response was estimated at eight and

of a disease and its causes. Zykadia was developed to treat

half months in the phase I study and nine months in the

non-small cell lung cancer (NSCLC) caused by a defect of

phase II study. Further studies are being implemented to

the anaplastic lymphoma kinase positive (ALK+) gene .

measure the effects of Zykadia over longer periods of

While NSCLC represents about 85% of lung cancers, only

time. Zykadia was approved by the FDA in April 2014 and

approximately 5% of patientsâ&#x20AC;&#x2122; tumors are ALK+, leaving

by the EMA in February 2015. It was approved for use in

these patients with few treatment options. Several of

Mexico by COFEPRIS in March 2015.

these patients can effectively use crizotinib (another AKL

inhibitor), but there is a small subset that is unresponsive

or intolerant to this medication. Novartis Pharmaceuticals developed this drug specifically to inhibit the autophosphorilation of AKL and the proliferation of ALK mediated cells to limit tumor growth. Zykadia has shown an objective response rate of 56.4% on

N H

N N

N H

| VIEW FROM THE TOP

SETTING THE PACE FOR SPECIALIZED INNOVATION UGO DE JACOBIS President and Director General of AstraZeneca Mexico

Q: Which particular AstraZeneca accomplishments do

six new products over six years. This includes our broad

you think have been pivotal to advancements in the local

pipeline of next-generation medicines, focused on four

market?

main disease areas: breast, ovarian, lung, and hematological

A: Today, AstraZeneca is a company worth US$26.1 billion.

cancers. Moreover, the company’s portfolio for respiratory

We are expecting strong and consistent revenue growth to

diseases includes drugs for chronic obstructive pulmonary

meet our targets for 2017, leading to annual revenues of more

disease (COPD) and asthma, among others, and we are

than $45 billion by 2023, when we hope to be serving close

developing several promising assets to treat inflammation

to 200 million patients globally. Since the merger between

and autoimmune diseases. Consecutively, we are investing

Astra and Zeneca in 1999, AstraZeneca has been defined as

in human capital to attract new talent, hence science and

one of the most innovative companies in Mexico, setting the

innovation is at the center of this transition, and our staff

pace for developing and launching new medicines onto the

and organizational culture must support this.

market. We have an innovative portfolio, with several market-

leading products, across cardiovascular disease, diabetes,

Q: To what degree do you need to work with the Mexican

oncology, and respiratory diseases all of which shows how

public sector to reach these goals?

AstraZeneca has been exceptional in matching strategy

A: We stand out in the way we manage our medical affairs

with execution. In 2001, AstraZeneca was ranked the 18th

capabilities, which is a specialty many companies lack. We

largest pharmaceutical company in Mexico. Today, we are in

are now closer to key opinion leaders and stakeholders,

fifth place, having climbed 14 positions due to the strategic

running continuous education programs, and developing

management of important medicines such as Crestor and

relationships with the public sector. It is clear that Mexico

Nexium. We are leading with these products even in the

is moving in the direction of providing universal healthcare

face of competition from generics. Today, AstraZeneca

coverage, so we must build strategic alliances with public

is shifting towards the development of highly specialized

entities so that patients can access our innovative products.

medicines, with biologics now accounting for almost 50%

In the past, AstraZeneca’s stability relied on its primary

of our pipeline. Naturally, we are aware of the importance of

care portfolio. Today, with increasingly innovative medical

primary care so we will maintain our diabetes and respiratory

advances, complicated healthcare delivery and budgetary

portfolio. However, our plans for innovation focus on further

issues, we have to develop new alliances and partnerships

specialization within our main therapy areas with targeted

with public institutions to generate advances in science and

medicines, including immunotherapies, with a view to

care to the Mexican population. This is the only way we can

building a more sustainable, durable, and profitable company.

truly impact society and help patients.

Q: Why was a transition from primary care to highly

Q: How would you rate Mexico’s medical innovation

specialized areas implemented as a strategy in Mexico?

capabilities

A: Three strategic priorities support the implementation

Colombia and Argentina?

of this transition on a global level: achieving scientific

A: Mexico, along with Brazil, is one of the few countries in

leadership, a return to growth, and becoming a great place

Latin America that continues to invest in pharmaceutical

to work, specific goals that were set so that AstraZeneca

innovation. Public hospitals were not available for clinical

could become a leading company in the specialty care area.

research in the past but this has changed and IMSS can

Return to growth represents reallocating resources to our

now conduct a considerable proportion of the clinical trials

main therapy areas and key growth platforms. In Mexico,

operating in Mexico, which will strengthen innovation.

we employ four growth platforms that focus on acute

Moreover, some years ago, COFEPRIS saw significant

coronary syndrome, and diabetes, respiratory, and oncology

delays in the approval of clinical trials. This used to take

portfolios. Our goal is to become one of the three leading

more than 24 months, discouraging companies from

companies in this sector, and to do so, we will be launching

carrying out clinical trials in Mexico. Today, this process has

comparison

with

countries

such

been accelerated with the aim of Mexico becoming one

proposals for the government. It is impossible to compete

of the most efficient countries in launching new products.

with generics on price, but we know that our medical

Drugs tested on Mexican patients can now be registered

and scientific expertise and global experiences, including

much faster, which means Mexico is closer to becoming a

integral services and disease management programs are

reference country for clinical trials in the region. COFEPRIS

second to none. In addition to this, companies should

has recently been recognized by PAHO as a regulatory

develop more programs addressing affordability issues.

reference agency, making the approval process for new

In Mexico, we have incorporated innovations in different

drugs easier in both Mexico and Latin America.

public institutions across the country by demonstrating the cost-effectiveness of doing so.

Q: Does Mexico represent a significant R&D base for AstraZeneca?

Q: What should be done to improve oncology care in

A: Mexico has become an important country for our R&D

Mexico?

operations in the area of clinical trials. Currently, Mexican

A: I do not think Mexico lacks oncology care, as there are

patients are participating in a total of 27 clinical trials. We

several oncology clinics throughout the country. However,

will soon be conducting several new oncological clinical

there seems to be a lack of coordination of efforts in this

trials, and the fact that IMSS has reopened the door to

area. Few resources are allocated in specialized clinics

these trials represents a big opportunity for advancing

and more awareness is needed regarding the importance

research. Furthermore, AstraZeneca funds local innovation

of treating such diseases in specialized units. Oncology

carried out by CINVESTAV and UNAM under the

institutions can integrate their services in order to

investigator-sponsored research scheme. Two key aspects

work alongside other organizations, such as local and

for advancing innovation in Mexico are improving access to

global diagnostic laboratories, companies that transport

innovations and ensuring that we have strong intellectual

biological samples, and clinical research centers. Moreover,

property law for pharmaceutical and biotechnological

infrastructure requires further improvement. To achieve this,

developments. If both aspects are addressed, companies

the government needs to improve communications among

will be able to operate efficiently in Mexico and more

different institutions as there exists a breadth of knowledge

patients will benefit from the medicines.

base in IMSS and in the National Institutes of Health.

Q: Do you foresee a clash between the innovative and the

Q: What motivated AstraZenecaâ&#x20AC;&#x2122;s sale of its Over the

generic sector as they grow?

Counter (OTC) portfolio to Genomma Lab?

A: We welcome a robust and competitive generic sector.

A: AstraZeneca defines its core business as a being

However, we need to ensure that regulatory and legal

biopharmaceutical innovations. We focus on the discovery,

frameworks value innovation and the underlying intellectual

development,

property

improved

medicines, which is why the Mexican OTC portfolio was

medicines for patients. It provides the incentives required to

sold. We do not foresee future efforts to penetrate the

conduct the research and development that produces new

OTC market, as it is not part of our corporate strategy.

medicines for patients globally. It takes approximately 10-15

Innovation is our main focus, so this was a mutually

years and over US$1 billion to develop a medicine. For every

beneficial arrangement. Other pharmaceutical companies

medicine that makes it to patients, there are thousands of

have more diverse portfolios, while AstraZeneca is working

other drug candidates that have failed.

on creating innovation organically. We have 13 New

necessary

develop

new

and

commercialization

prescription

Molecular Entities in the pipeline, either at the pivotal phase Q: With healthcare expenditure in Mexico still at only 6.2%

2-3 stages or under regulatory review. We are focusing on

of GDP, do you see real innovation being supported in the

the highly specialized and personalized medicines of the

medium term in Mexico?

future, which is pure science.

A: Mexicoâ&#x20AC;&#x2122;s expenditure on healthcare is certainly below the Latin American average, but it seems that more

Q: How does access to information influence the

opportunities for innovation may occur. Public budget

development of the Mexican Health sector?

savings from using generics could potentially be directed

A: Mexico has sufficient data and information about health,

into innovation. Seguro Popular is willing to provide access

although it is not updated as frequently as that of Europe

to innovative medicines too. Greater collaboration between

and the US. Mexico is pretty similar to other parts of the

the private and public sector is necessary to include more

world: half of the patients do not know they have a given

innovative products in the National Formulary. On the other

disease, and only half of those who are aware of their

hand, the private sector has to develop new collaboration

disease receive treatment.

| VIEW FROM THE TOP

ADDING VALUE IN A DYNAMIC AND DIVERSIFIED MARKET JOSÉ ALBERTO PEÑA Vice President of GlaxoSmithKline (GSK) Q: What role does Mexico play in the global strategy of

currently in the process of being approved by the IMSS

GSK and how important is the local market?

Formulary, which will allow widespread access. With

A: Mexico is usually considered an emerging country, but

increased diagnoses of Lupus in recent years, it represents

the Mexican pharmaceutical market is in many respects

an excellent opportunity for GSK and for patients who

mature and at the same level of development as some

can now receive a treatment that not only focuses on the

European countries. Mexico is among GSK’s top 20

symptoms but also on controlling the disease.

global markets, and is a country where a lot of innovative programs have been undertaken. Although challenging,

Some

pharmaceutical

Mexico is attractive to GSK beyond business and sales

generics and OTC portfolios in order to fully focus on

terms, due to its dynamics and diversification. R&D has

innovation – where is GSK focusing its efforts?

seen exciting growth locally in recent years. Vaccines

A: We recently closed a three-way deal with Novartis, in which

are at the core of our R&D activities, and Mexico was

we divested our oncology business. In turn we purchased

the top recruitment country for the first global rotavirus

the vaccine business from Novartis, and a joint venture was

vaccine. In addition, we had a successful experience last

created where GSK is the major shareholder of the OTC

year in conducting clinical trials for asthma and COPD.

consumer business. The four long-term corporate level

Approximately 10% of all patients that participated in

priority areas for GSK are respiratory, HIV, vaccines, and the

these multi-national trials were recruited in Mexico, and as

consumer business. Additionally, GSK has been a pioneer in

we presented local data for the drug registration process

HIV treatments since the 1980s and we have products without

to COFEPRIS, our product was approved within 90 days,

a patent or with expired patents, as well as a new series of

representing a significant improvement on the previous

innovative products that we will be bringing to Mexico in the

three-year timeframe. Nevertheless, there are still some

near future. Our strategy for Mexico comprises six priorities:

challenges to overcome regarding the approval process

respiratory,

for biologics and vaccines in order to ensure better access.

products that do not have a patent. The consistent revenues

HIV,

vaccines,

companies

urology,

have

divested

dermatology,

and

from these areas are then further invested in innovation Q: How do you address potential approval delays?

and growth. Dermatology is an interesting segment of the

A: Access to innovative medicines is one of the most

pharmaceutical industry that is growing faster than the

significant challenges that we currently face in Mexico.

industry itself. We began to prioritize dermatology with the

The Mexican government faces many constraints in

acquisition of Stiefel in 2010 and the subsequent purchase

terms of budget and regulatory procedures. What needs

of the local leader in 2011. We have previously managed all

to be highlighted is that more effective treatments can

of our therapeutic areas in a very similar way, and now we

enable patients to become economically active again in

customize our strategy based on both our internal needs and

a shorter time and can therefore have a direct impact on

the external environment in Mexico.

productivity. For this reason, it is important to explore the new paradigm in which innovative products are evaluated

Q: Vaccines have been the subject of much controversy

on a case-by-case basis.

recently, how is GSK dealing with confused consumers? A: Unfortunately, there is a global movement in some

Q: GSK recently launched an innovative drug for the

countries against vaccination, which should be addressed.

treatment for Lupus – what is unique about this treatment,

Vaccines have been responsible for some of the most

and is it available privately and publicly in Mexico?

important

A: In September 2014 we launched Benlysta, which is the

eradication of polio, smallpox and significant progress in

first real innovation for Lupus that has been developed

the fight against many other diseases including cervical

in the last 50 years. The National Formulary has already

cancer. The statistics regarding practically eradicated

approved the drug making it available privately and it is

diseases such as measles, that have recently seen

developments

healthcare,

namely

the

significant outbreaks in the US and the UK are compelling.

these projects really transform the way the government

Independent clinical trials and post marketing surveillance

and the pharmaceutical industry collaborate.

have been conducted for vaccines, the results of which show that there is no correlation between vaccines and

Q: What needs to be done to further improve the clinical

some of the key issues in question.

trials industry? A: The clinical trials industry has strong potential in Mexico.

Q: How have the different changes in the distribution

I visualize that the investment in R&D can be tripled or

segment, such as the bankruptcy of Casa Saba and the

quadrupled in the next three to five years. Infrastructure,

closing of local pharmacies, affected GSK?

human resources, and the necessary experience exist in

A: There have definitely been significant changes in the

the country. We have conducted clinical trials for many

distribution segment in the last couple of years. With more

products in Mexico including a trial for Benlysta. We must

than 30% of the market share, Casa Saba had powerful

ensure that all of the different actors work together in

distribution

order to remove the potential barriers so that Mexico can

capacities,

particularly

independent

pharmacies, managing to reach 18,000 out of the total

be visibly more attractive and competitive.

25,000 to 30,000 pharmacies that operate in the Mexican market. The independent pharmacies are the ones that

Q: What are your top priorities for 2015?

have suffered the most during this transformation and we

A: We recently re-shaped the way we run the business and our

have plans this year to diversify our distribution channels,

strategies in Mexico. We want to ensure excellent execution

so we are looking for previously unexplored options such

at all levels, creating value equally for our shareholders,

as working with regional distributors.

our people, healthcare professionals, and patients. We are working closely with decision makers in order to hold the

Q: What collaborations do you have with bodies such as

right discussions to improve access to innovation and to

CONACYT and academia for advancing research?

understand the difficulties we know the government is

A: We recently signed an agreement with CONACYT to

currently facing. We expect the vaccine business to keep

sponsor placements for Mexican postgraduates in different

growing, and we applaud the efforts of the government

GSK centers around the world according to their specialized

in implementing the official vaccination program, which

field. As a unique project in pharmaceuticals, CONACYT

is arguably one of the best in the world. As global leaders

and GSK are very proud of the venture, and it has helped

in this field we want to provide further support now that

to generate further dialogues about a separate initiative

there are several difficulties in the global supply of vaccines.

that consists of funding research projects in Mexican

Despite the many challenges that the private market is

institutions and research groups. Significantly, GSK will

currently facing, we want to provoke changes in the market

not claim rights on the results from such projects, because

in order to maximize our opportunities in this dynamic

our larger aim is the development of scientific research in

sector. Finally, we have a global agreement with Save the

Mexico. The country has a phenomenal base of researchers

Children. It is rewarding to belong of a company that takes

and there is a lot of clinical research happening that we

its social responsibility, previously by working with different

want to support. We know from previous experience that

stakeholders that are not related directly with our business.

RM Pharma Specialists is made up of a team of experienced professionals committed to developing a leadership position in conducting and controlling clinical research studies Quality and continuous improvement is at our core. Our services include: • Conduction of phases II to IV clinical studies specializing in rheumatology • Conferences and workshops on rheumatology and clinical research for general physicians and other specialties • Clinical studies monitoring • Development and implementation of Standard Operation Procedures for clinical sites

97 Amores 734, Colonia del Valle. Delegación Benito Juárez. C.P. 03100 México, D.F. Tel.: 53364206 y 59150592

| VIEW FROM THE TOP

LOCAL MANUFACTURING CONFIDENCE HERE TO STAY MIGUEL SALAZAR HERNÁNDEZ Director General of Boehringer Ingelheim

Q: Where is the Mexican Boehringer Ingelheim office

While the marketing strategy will change over the next

positioned in relation to the global office?

few years, doctors will mantain the right to choose

A: From our Mexico City office we run seven companies

patient medication. The shift may occur over the next

throughout Central America, and our presence makes

15 years, meaning we must make several enhancements

company

to the pharmaceutical industry to ensure the most

internationally. Whenever Boehringer Ingelheim wants

innovative medicine is available for all patients. Mexico

to develop a new product, the corporate headquarters

can improve its healthcare system, it just needs a push in

tends to consult the top ten offices, so it is vital for

the right direction.

the

tenth-biggest

office

within

the

Mexico to belong to this group. Not only do we expect to mantain our position, but by 2020, we expect to

Q: What is Boehringer Ingelheim doing to improve

have grown due to the 3.5% market share we enjoy in

access to its range of innovative products?

Mexico. The average for our branches worldwide stands

A: Access is a challenge for all country directors in

at 1%, which means we are outperforming our own

pharmaceutical companies. Our products add a lot of

company’s benchmark. At this point, 75% of our income

value to standards of care, and that ultimately creates

comes from prescription medicine, between 12-15% from

added value for money. For example, the most used

OTC products, and the rest from animal care. Driven

anticoagulant in Mexico is 60 years old, despite many

by research, discovery, and the development of new

new

molecules, we are the only privately owned multinational

challenged this product with a new anticoagulant

in Mexico. Unlike public companies, which respond to

effective on intracranial bleedings. We also produce

market trends, our stability gives us the advantage of

a drug for diabetes, which is an improvement on the

being able to make long-term plans. After all, our stocks

traditional treatment. Innovation is our aim, and so far

will not fall if one of our products fails, so we are free to

COFEPRIS has been quick to approve our products,

decide the direction our company takes.

given the quality of clinical and monitoring data behind

innovative

medications.

Boehringer

Ingelheim

us. Once an innovative drug has been approved, it can Q: What do you identify as the main drivers for the

often only be accessed through the private market. This

Mexican pharmaceutical market, and how are company

means that 80% of patients that could benefit from these

strategies changing to adapt to the evolving dynamics?

drugs are unable to access them. Although COFEPRIS

A: Mexico’s situation is rather unusual since it is a

has made progress there is still work to be done by the

developing country that behaves like a mature market. In

General Health Council (CSG), ISSSTE, and IMSS. We

contrast to double-digit growth seen in other emerging

are trying to convince the public institutions to opt for

markets like Russia and China, that of Mexico has not

innovation, but it will take time to see good results and

exceeded 3% in recent years. Our growth patterns are

support from authorities.

more similar to mature markets like the US. Mexico’s pharmacy spending in the healthcare sector tends to

Q: Do the restrictions on sales to the private sector

be out of pocket, but this is the country’s only typical

affect the overall profitability of the market in Mexico

“emerging market” behavior. This dynamic means that

for innovative companies like Boehringer Ingelheim?

few people are actually sustaining the sector’s growth,

A: The current situation does not have an impact on our

resulting in an imbalance from society’s perspective.

sales, but patients are affected by reduced access to innovative medicines. Boehringer Ingelheim’s forecasts

Ideally, all demographics should have equal access to

are not based on money but on an index called the

quality medical care. The pharmaceutical landscape is

“Patient Capture Benefit Rate.” This is calculated in

changing as a whole, forcing many companies, including

terms of the number of patients who will potentially

Boehringer Ingelheim, to develop new business models.

benefit from our products.

Patients come first for us, then doctors. This strategy

Q: Do you plan to incorporate generics into your

has made us the second-fastest growing company every

portfolio of products or are you planning to divest

year for the past five years. Mexico is, at this point, a hub

certain areas to focus on others?

for clinical research, we also have a center for molecular

A: We are not a generics company, but we have sold

animal research in Guadalajara. While many companies

generics since the 1970s. Our portfolio includes several

are moving plants from Mexico to other countries,

generics,

Boehringer Ingelheim’s stability means we can take

our strongest performers. We carry out third-party

long-term decisions to mantain our core therapeutic

manufacturing, but this is only a very small portion of our

areas in Mexico.

work. We try to accelerate the life cycle of our products

with

anti-hypertension

drug

among

to benefit patients, so to that end we are increasing our Our core areas consist of diabetes care, respiratory and

research division and our capacity for biosimilars. Unlike

cardiovascular care (including anticoagulants), as well as

many other international pharmaceutical companies, we

oncology. We also plan to move into anti-infectives and

do not plan to divest our OTC area. On the contrary, we

central nervous system products. Narrowing our research

are interested in acquiring companies with strong OTC

into the areas where we believe we can contribute the

divisions. To reach new customer bases, our consumer

most increases our impact. While we have an acute

healthcare product division will work with a new set of

disease research area, we have put more emphasis on

products from the end of this year or the beginning of

chronic disease treatments, having invested millions

2016. This division adds value to Boehringer Ingelheim.

of euros in our manufacturing facilities, reflecting the

Most of our OTC products – such as Lonol, Pharmaton,

confidence we have in their growth potential. Of all

Bisolvon, and Buscapina – enjoy top positions in the

the pharmaceutical manufacturing plants operating in

market, and bring in a sizeable portion of our income.

Mexico, only ours are approved by the FDA to export

The sector remains attractive in spite of its growing

prescription medicine, consumer health care (OTC) and

complexity.

animal health products into the US. While the US is one of our main markets, we also sell to Canada, Asia, Africa,

Q: Are biotechnological products important for your

and Europe.

work the Mexican market? A: Although we are the number one manufacturer

Q: What are the advantages of manufacturing in Mexico?

for biotechnology products worldwide, we do not

A: Mexico is proving to be more competitive in the

commercialize all our products, since we also carry out

manufacture

Our

third-party manufacturing. For four years, Boehringer

operations here can be flexible, and our services

pharmaceuticals

than

China.

Ingelheim and Eli Lilly have worked together on diabetes

customized to benefit patients and the social security

research. One of the diabetes care drugs we plan to launch

system alike. Our costs are also very competitive. We

is a biotechnology product, but we do not yet carry out

have even closed factories in other countries in order

biotechnology production in Mexico. Nevertheless, we

to move production to Mexico. There have been doubts

do plan to launch some biosimilars, as these benefit

about Mexico’s capacity to supply to the 300 million-

both Mexican patients and local governments, with an

strong US market, but Mexico has proven its capability

aim of entering the market within the next three to five

for quality and capacity. Soon, 80% of our diabetes

years. Currently we sell two innovative products which

products will be produced in Mexico.

are well-established in the market, one for cancer and the other for strokes.

How

important

are

community

initiatives

Boehringer Ingelheim?

Q: What are your expansion plans within Mexico?

A: Our manufacturing operations provide many jobs

A: We are set to move the manufacture of 80% of our

and we are proud of our plant in Xochimilco, which

diabetes care products to Mexico, bringing worldwide

has supported the community for almost 50 years.

export opportunities to the country. Among our pipeline

Social sustainability is close to the heart of Boehringer

products over the next five years are several innovative

Ingelheim. We are engaged in supporting entrepreneurs,

compounds

education, and healthcare. Annually, 1,800 of our

therapeutic areas. To realize this potential, we must

employees serve the community in our “Value Through

expand our factories and reach more doctors. To this

Innovation Day,” with activities ranging from teaching

end we are tripling our access team as this is the team

in impoverished communities to painting schools. This

that explains the value of our products to the authorities

year, we are running a reforestation day.

and helps facilitate the regulatory approval process.

with

significant

potential

several

| VIEW FROM THE TOP

GOOD GROWTH POTENTIAL FOR NICHE PRODUCTS RAFAEL SUÁREZ Director General of Ferring Pharmaceuticals

Q: What is the main focus of Ferring’s activities in Mexico

and now we only have two, focusing on both the private

and how do these support your aims of improving

and public sector. In the second year we expanded our

healthcare for the population?

sales to hospitals by strengthening our sales force. We

A: Ferring Pharmaceuticals has been in Mexico since 1997,

realized that we needed to allocate more resources to

and our products are well recognized and positioned

this as well as to innovation in digital tools. We provided

in the field of obstetrics. Our philosophy is “people

our

come first,” and that applies to patients, doctors, and

and developed websites, and electronic materials to

employees. The focus of our obstetrics products is the

cover physicians. In this third year we are focusing on

reduction of maternal mortality. Physicians need effective

consolidating expansion. The results of the first two

medicines

life-threatening

years have been good and we are building the basis

situations. Additionally, we provide fertility products

for the future, as well as looking for opportunities to

to clinics. Forming a family is something that many of

grow either organically or abroad in the Latin American

these patients have been trying to achieve for years,

region. We are launching products for obstetrics and for

so it is very motivating for us to help them realize their

gastroenterology.

for

the

management

sales

representatives

with

tablets,

materials,

dreams. Furthermore, we have a social responsibility program called Bebé en casa, which is a website that

Q: Does Ferring engage in any local R&D activities, and

helps couples that cannot have a baby and that have

what could be done to attract more research?

financial constraints. Patients fill out a form and go to the

A: Ferring Pharmaceuticals has many research centers

clinic and if they comply with certain characteristics they

across the globe, but not in Mexico. However, we do

are provided with discounts on fertility medicines. This

conduct phase III clinical trials in Mexico, so Mexican

program started three years ago, and is now implemented

patients are also part of our R&D and innovation activities.

in 20 clinics. More than 70 babies have been born under

The more patients we get to participate in studies in

this project. Another social responsibility project is a

Mexico, the better. AMIIF recently signed an agreement

fertility project called Proteger. Female cancer is a health

with IMSS to accelerate the process for conducting

concern right now for our government, so when a woman

clinical trials in the IMSS, which will promote growth of

is diagnosed with breast cancer, before she receives

the clinical studies industry and innovation in Mexico.

chemotherapy, she can go to one of the participating

Moreover, when a drug obtains market approval, it still

clinics to get her eggs collected and frozen, and when she

takes several years to become available to the public

is cancer-free she can go back to the clinic and become

sector due to the pharmacoeconomic data required by

pregnant.

the different institutions and as a result the number of molecules approved by the General Health Council is still

Q: After moving from Merck to Ferring Pharmaceuticals,

lagging. Therefore, improvement in this regard is essential

what were your main objectives?

to leveraging innovation in the country.

A: Ferring produces high-quality drugs that are very well

100

positioned in the European market as well as in other

Q: Mexico’s attentions on biotechnology are steadily

countries, and the company has very good projections,

increasing – how does the country’s development pace in

which represents an opportunity for me to contribute to

this regard compare to other markets?

the company’s development and growth. I was given the

A: The growth of the biotechnology sector in Mexico is

opportunity to take a General Manager position, which

evident in the amount of innovative products that multi-

has allowed me to manage the manufacturing plant in

national companies are launching in the country, which is

Lerma, the State of Mexico as well as the commercial

comparable to levels in other markets. Additionally, more

office. It took me a year to understand and restructure

local companies are opening extensive manufacturing

the business. When I started we had three business units

plants in the country. The biotechnology business is a

hot topic from a regulatory viewpoint today, especially at

catalogue of services and products available for patients

COFEPRIS. We have to make sure that all products, whether

insured by the Seguro Popular, and it includes medical

innovative or biosimilar, comply with the requirements to

attention for complex diseases such as prostate cancer.

guarantee safety and efficacy.

A greater convergence of the public and private sector is needed to improve access to healthcare services,

Q: COFEPRIS has improved many of its processes to bring

and private hospitals will play a role in helping the

more products to the marketplace â&#x20AC;&#x201C; what have been the

government in the short-term. This process obviously

practical implications for companies like Ferring?

takes time and we need to figure out how best to support

A: COFEPRIS has worked very hard not only for the

such integration.

biotechnology sector, but also for improving the process of drug registration in general. In the past, it took one

Q: What main opportunities have you identified for your

year for a drug to be approved. This process was recently

growth?

accelerated, and a new molecule can now be approved

A: The obstetric sector is growing. Working with the public

within 60 days. Regarding traditional molecules, they

sector is an opportunity for us in order to make sure that

have to make sure that processes with time delays do

patients have access to our products. In the private sector,

not get reintroduced when the five-year administration

our products are very well positioned, and there is a huge

period of COFEPRIS comes to an end. COFEPRIS has

room for growth. We have recently launched some new

developed new communication channels to improve

products and we are still in the learning curve phase

processes, which must be maintained over time. As for

with physicians who are using our products. Additionally,

biopharmaceuticals, studies to prove their efficacy and

we want to consolidate our expertise in our four key

safety must be complete.

therapeutic areas. Even though Mexico is an emerging market, it is not growing that much in general terms.

Q: Do you see the need for greater convergence of the

However, for niche products we expect good growth.

public and private sectors?

We are expected to develop more partnerships, and aim

A: The public sector is working on implementing

to launch more products into the market. In terms of the

universal healthcare coverage and its needs to ensure

region Brazil is a larger market and will see more growth,

that all diseases are covered. For instance, CAUSES is the

however Mexico constitutes a close second.

| INNOVATIVE DRUG SPOTLIGHT STRIVERDI

RESPIMAT

(OLODATEROL)

FROM

receptors reducing the inflammation response in the lung

BOEHRINGER INGELHEIM PROMECO

by relaxing the bronchi thus permitting the increase of

Chronic obstructive pulmonary disease (COPD) affects 8%

air flow. Unlike other bronchodilators, it can be used daily

of the Mexican population and kills 21,000 Mexicans every

over prolonged periods of time as it has very few and mild

year. The National Institute of Respiratory Diseases (INER)

adverse effects.

predicts that this disease will become the third mortality cause in Mexico by 2020. COPD is characterized by a

Developed by Boehringer Ingelheim, Striverdi Respimat

progressive breakdown of lung tissue by an inflammatory

was first approved for use in the UK, Denmark, and Iceland

response after exposure to irritants. The two main risk

in 2013. In July 2014 it was approved by the FDA for use in

factors for this disease are smoking and exposure to coal

the US and it was approved by COFEPRIS in March 2015.

or wood smoke, making this disease especially prevalent in developing countries. COPDâ&#x20AC;&#x2122;s main symptoms include respiratory problems, wheezing, coughing, and chest tightness, and can be fatal if left untreated.

O HN

Striverdi Respimat is a highly selective long-acting beta-2

H N O

adrenergic agonist (LABA) developed specifically to treat COPD. This drug mimics the effect of epinephrine at beta-

OH 101

| VIEW FROM THE TOP

BRINGING BETTER PAIN MANAGEMENT SOLUTIONS TOMÁS BORDONABA Director General of Grünenthal

Q: Grünenthal established operations in Mexico in 1998.

new products and our access to institutions. This has led us

Since then, how has Grünenthal come to consider the

to launch three new products in the last two years with one

potential of the Mexican market?

of these, Palexia, obtaining National Formulary approval in

A: Latin America is Grünenthal’s engine of growth. Our

record time. Our third strategy is business development,

sales in Latin America have reached US$500 million and

in which we are looking for new companies and brands to

we aim to double that to US$1 billion by 2020. This would

acquire in Mexico and Brazil.

see our operations in the region surpass those in Europe. Naturally, Mexico and Brazil will be vital in making that

Q: Why do you feel Palexia was able to be approved in the

strategy feasible. Curiously, Mexico and Brazil are among

National Formulary so quickly?

the youngest companies in the group with Grünenthal

A: Palexia was approved in seven to eight months as

only having been established in Brazil three years ago.

opposed to the four year average. The reason Palexia was

In comparison, we began operating in Peru in 1968 and

so quick in securing approval is that it is a new product

in Ecuador in 1973. This means we have less products

which provides an effective value proposition for chronic

and sales in Mexico and Brazil than in the rest of Latin

pain. As opposed to strong opioids like morphine, Palexia

America, but we are confident that the market here will

works based on a dual mechanism. It is particularly good

grow faster. In Mexico, Grünenthal has already reached

at handling combinations of neuropathic and regular pain.

US$51 million in sales but we want to achieve US$100

It also has fewer side-effects than its competitors while

million by 2018.

being available at a reasonable price. We are now in the process of getting the approval of institutions like IMSS,

Q: What is your current strategy for the local market?

ISSSTE and Seguro Popular.

A: We are looking to maximize the presence of our existing product portfolio among the private and public health

Q: What is the most difficult part of submitting

sectors. We are also seeking to accelerate the launch of

applications to different institutions?

3D DRUG PRINTING GETS FDA GO AHEAD Scientists have been developing 3D printing technologies

process was carried out using a 3D scan of a pig trachea

for almost 30 years but only recently has the technology

and the FDA approved material polycaprolactone (PCL).

come to the forefront of the medical and pharmaceutical

Since the surgery, the baby’s trachea has completely

industries, raising the potential to deliver drugs in a

regenerated and the PCL is expected to degrade naturally

personalized format that could revolutionize the sector. In

in the patient’s system, causing no long lasting side effects.

August 2015 the FDA approved the first ever 3D printed

In the same year, Organovo successfully printed a human

drug for consumer consumption. Spritam, an epilepsy

liver using 3D bioprinting techniques.

treatment, will be produced by US pharmaceutical Aprecia and will, according to the company, “transform the way

Since then, within the pharma industry in particular, it has

patients experience taking medication.”

been found that 3D printing can actually overhaul and improve the administration of drugs due to its capabilities.

102

In 2013, researchers from the University of Illinois, the

Researchers at the University College of London School of

Institute of Genomic Biology and the University of

Pharmacy have been able to print different shapes of drugs

Michigan worked in collaboration to 3D print an artificial

using a technique known as “hot melt extrusion.” This is

trachea for an infant with the rare tracheobronchomalacia,

relevant as convincing findings have revealed that the

which causes the windpipe to continually collapse. The

shape of a drug considerably impacts its effectiveness. For

A: We have to customize our value proposition to specific

Pain, which presents a range of tools, such as online

countries and institutions. Our submissions show the result

classes, live courses for hospitals, and specific workshops

of global clinical trials, compare the price point with that of

for areas like cancer or palliative care. We also teach how

the competition, and also show how each drug will impact

to use the drugs available in Mexico to treat different types

Mexico’s epidemiological profile.

of pain. This remains a priority for Grünenthal.

Q: Grünenthal has global clinical trials and invests

Q: How are you advancing the state of palliative care in

significantly in R&D. Do you hope to carry out clinical

Mexico?

trials and R&D in Mexico?

A: As part of our battle against chronic pain, we are

A: This area is now more accessible in Mexico and presents

advocating for better palliative care practices, which sees

considerable

public

us work alongside organizations like FUNSALUD. It is

institutions to benefit from clinical trials in the same way as

unquestionable that advances in this field will benefit patients

the private sector has for years. It will also give Mexico a lot

and their families. But the Mexican mindset about death does

of exposure around the world. As for Grünenthal, we have

not make this an accessible topic. However, the country is

two or three clinical trials underway in a combination of

accumulating more palliative care specialists as people age

private sector hospitals and smaller public sector facilities.

in the country. One effective practice has been put in place at

Until now, we have not been able to access larger public

the National Pediatrics Institute, where parents are trained in

institutions for clinical trials but we would be very happy to

palliative pediatric care and the hospital takes equipment to

revisit this subject with IMSS. Mexico has excellent research

the patients’ home, which reduces the level of stress for the

centers that will provide good results but this has not yet

patient and for the family.

opportunity.

This

finally

allows

been explored on a large scale. Q: What are your top priorities in 2015? Q: What training and education programs do you provide

A: We need to continue growing by maintaining the regular

for physicians to become familiar with your products?

launch of new products, marketing successfully, and boosting

A: We invest significantly in medical education, especially

our presence in private and public institutions. We also want

to deal with chronic pain which is not given enough

to help develop palliative care initiatives that are being put

attention in Mexico, despite the fact that 30 million people

in place by the government. We feel this is a crucial issue in

suffer from chronic pain. This ranges from back pain, which

Mexico. Additionally, we are always looking for advantageous

is the main cause of debilitation in Mexico, to terminal

companies to acquire. We integrated Empresas Andrómaco

illnesses which cause sufferers to die in a great deal of

in Chile in 2013 and we would like to replicate that with

pain. Early detection is vital in order to prevent pain from

Mexican firms that have a history of growth and whose

becoming chronic. Our flagship program is called Change

products, like ours, have a degree of differentiation.

example, the shape of the drug can determine how fast the

cites the more affordable cost in recent years, claiming that

medication is released, which may be a particular benefit

3D printing procedures which would previously have cost up

in the administration of certain products including blood

US$30,000 can today be as cheap as US$500.

thinners and immunosuppressants. The traditional process of manufacturing drugs, however, does not have the same

Despite the now established uses of 3D printing for

capability of producing them in the same complex shapes

devices, for the first time 3D printed drugs are being made

as 3D printing methods.

available to consumers, and it remains to be seen how this will impact the industry. Chris Rivera, President and

The 3D printing industry in 2012 was valued at US$2.2 billion

CEO of the Washington Biotechnology and Biomedical

but this should more than double to US$5.2 billion by 2020.

Association, believes that if 3D printing is able to adopt

In Latin America, the process is evolving equally quickly. In

an effective business strategy, the result could be a drop

Mexico, a doctor used 3D printing techniques to create skin.

in profits for traditional pharmaceutical production. On

Carlos Ramirez, Director of the Mexico, Central America and

the other hand, he sees this as a unique opportunity for

Caribbean division of 3D printing company STRATASYS,

innovation if the sector can collaborate with scientists to

believes that the technology is becoming more and more

integrate the techniques into marketing strategies. The

accessible and widely used. Javier Cruz, Engineering Director

prospect of personalized medicine brought directly to the

of 3D Insoft believes that, in the next two years, 3D printing

home of the consumer is sure to be one of the biggest game-

will become a massive industry within the medical sector. He

changers in recent years

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| VIEW FROM THE TOP

FOCUSING RESOURCES TO TAKE ON THE MARKET DR. JOHN MARKELS Director General of Merck Sharp & Dohme (MSD)

Q: MSD, known as Merck in the US and Canada, is one of

third focus is virology, including Hepatitis C and HIV. We

the largest pharmaceutical companies in the world. What

have outstanding HIV products including non-nucleoside

is Mexico’s role in your global strategy?

reverse-transcriptase inhibitors (NNRTIs) and integrase

A: MSD has the same goal for Mexico as it does for the

inhibitors, which were important parts of the revolution that

rest of the world: to deliver innovations that can improve

helped transform HIV from a death sentence into a chronic

and save lives, something that we have been doing for

disease. Our final operation tackles Alzheimer’s, a disease

over 100 years. Mexico is a strategic country for MSD for

for which cases are doubling every five years and which has

several reasons and it is part of MSD’s Emerging Market

so far been intractable. MSD has a novel drug in phase III

Commercial Organization which is specific to Latin

that inhibits the production of a peptide protein, which is a

America, the Middle East, and Africa. Despite challenges

precursor to the build-up of plaques in the brain.

such as insecurity, Mexico is a strategic place to conduct business, and constitutes one of our top two Latin

Q: How has the increase of generics in Mexico affected

American markets for many reasons, namely its growing

your sales?

population, large market, strong IP protection, improving

A: MSD’s strategy is innovation. Certain companies have

regulatory infrastructure, a significant private laissez-faire

a generics line incorporated within their business model

market, and a significant public market. In spite of all this,

while others have chosen to ally with other companies.

the Mexican market does not see double-digit growth like

But the generic business model is beneficial to us provided

certain other emerging markets. Mexico is also a clinical

that intellectual property is respected and protected. It is

research base for us. We currently have 41 protocols in

also valuable to the system as it frees up money allowing

different areas but one of my main goals is to find ways

the government to acquire large quantities of cheaper

of increasing the amount of clinical research carried out

medications, meaning the money saved can be re-invested

in Mexico. Clinical trials in Mexico are cost-effective and

to acquire innovative drugs. This has been a challenge

efficient while the country also has the infrastructure to

in Mexico but not impossible. We are now working with

quickly enroll patients. At this point we are working both

regulatory authorities to help ensure that the government

with the public and the private sector equally, and the only

dedicates money to innovation so people can access the

basic research we are doing here is a study on pediatric

medication they need. At the same time, we are facing

cancer, which is carried out by the Merck Foundation with

the dilemma of what to do after our products age. So

FUNSALUD.

far, our medical representatives have focused on creating awareness among doctors about the value of our products,

Q: What are your main product lines in Mexico?

but a complementary sales strategy is needed in which we

A: MSD has developed a broad range of products over many

partner with local companies that are more focused on

years. The first line covers cardiometabolic issues, such as

branded generics, which is a particular benefit to us as we

diabetes, heart disease, and hypertension. For diabetes,

can use their sales experience.

we have developed Sitagliptin, which controls blood sugar

104

without common side effects such as hypertension. We

Q: MSD divested most of its OTC portolio to Bayer and

have also launched a new DPP-4 inhibitor with extended

acquired Schering-Plough - what motivated these moves?

release and we are developing statin drugs. Our second

A: While some companies choose to work in many

range is women’s health, including contraception, fertility,

different areas, we are focusing our resources on areas

and osteoporosis. With this in mind, another concern is

where we can have an impact on health and where

that Mexico has one of the highest rates of teen pregnancy

innovations can make a difference. OTC is an exciting and

in the world, which local health authorities recognize as

expanding segment but it was not our core business, but

one of the country’s most significant challenges, which

MSD has made several recent decisions that are altering

we are helping to address in a government initiative. The

its long-term business strategy. Five years ago, we bought

Schering-Plough, which forced us to alter our production

our pharmacy chain customers. The market itself is also

and business plans, and subsequently we had a very large

changing and now pharmacy chains are offering medical

number of manufacturing sites and a significant level of

consultations at the point of sale, which may be perceived

over-capacity. As part of the merger, we had to restructure

as a threat by some but may represent and interesting

our manufacturing strategy which required closing some

opportunity to adapt.

plants, moving others, and opening new ones to ensure we had the correct manufacturing infrastructure. As

Q: What expansion plans do you have for Mexico?

Mexico is critical for our company, we maintained our

A: We are always looking for new expansion opportunities.

manufacturing presence here while consolidating it to

For example, MSD just bought Cubist Pharmaceuticals,

an efficient core instead of having many underutilized

one of the largest and most productive antibiotics

units. We take manufacturing extremely seriously and we

manufacturers. The world requires a revolution in the

believe having a single, high-quality facility is far more

antibiotics market, as the number of antibiotic-resistant

strategic than to try and manage a vast network in every

bacteria is increasing worldwide and the situation is

country.

becoming highly dangerous.

Q: Mexico has faced several challenges in the healthcare

New products to fight these bacteria are needed, which

distribution area of late. How has this affected your sales?

is why we incorporated Cubist Pharmaceuticals’ research

A: MSD has a hybrid strategy, wherein we use distributors

lines into our business strategy. MSD also has a global

for the public and private sector, while working directly

deal with Samsung for biologics, a process that is now at

with pharmacy chains. Either of these strategies can work

phase III and we are currently bringing these products to

well depending on the customer. Casa Saba going bankrupt

Mexico. By growing organically, our goal is to be the best

certainly created a disruption for the entire industry. Casa

healthcare company in Mexico which means becoming the

Saba was our largest distributor but, since the bankruptcy,

fastest-growing multinational, which will be achieved by

we have learned how to effectively reach patients and we

making smart global acquisitions in each country. These

are now stronger than before. In comparison, we have a

global deals have significantly increased our rate of growth

mutually beneficial relationship with our distributors and

in the past years.

| INNOVATIVE DRUG SPOTLIGHT

DOLUTEGRAVIR FROM GLAXOSMITHKLINE

patients (those who have) but it showed superiority in been

comparison to other treatments for treatment-naïve adults

infected by the Human Immunodeficiency Virus (HIV)

and adolescents. Dolutegravir is used in combination with

with thousands more being infected every year. While

two other nucleoside reverse transcriptase inhibitors.

Around

35.3

million

people

worldwide

have

immunotherapy drugs have turned this disease from a death sentence to a manageable condition, not all

Dolutegravir is commercialized in the US as Tivicay and

available drugs are effective for all patients as some have

was approved by the FDA in August 2013. It was approved

been infected by drug resistant variants of the virus.

by the European Commission in January 2014 for use in the European Union and it was approved by COFEPRIS in

Dolutegravir

the

latest

March 2015.

second-generation

integrase strand transfer inhibitor approved by the FDA and it has demonstrated impressive anti HIV efficacy. This drug inhibits HIV-1 integrase, an essential protein for the replication of the virus

CH3

inside the host’s cells. Dolutegravir quickly reduces

treatment-naïve patients (those who have not taken any type of HIV therapy) and treatment-experienced

H N

N H

levels of HIV virus in the body and causes fewer side effects than other medications. It is useful both for

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| VIEW FROM THE TOP

INNOVATIVE PRODUCTS FROM HEALTH TO BEAUTY KAREL FUCIKOVSKY Director General Mexico and Central America of Pierre Fabre Médicament

Q: Which markets does Pierre Fabre specifically target

product access at all points in the trade chain between

and how do you divide your two core business lines?

our company and our distribution partners.

A: To date Pierre Fabre splits its two business lines in a deployed concept described as ‘From Health to Beauty’.

Q: Does Pierre Fabre share the current focus on orphan

The two companies of the group are Pierre Fabre

and specialized drug development?

Dermocosmetics and Pierre Fabre Médicament. Our

A: We have commercialized an orphan drug to support

concerns are divided between health (45%) and beauty

bone marrow transplants to adult and pediatric patients.

(55%). Both Pierre Fabre Dermocosmetics and Médicament

We also recently signed a local license agreement with

offer leading products in their respective sectors, and we

Ferring Pharmaceuticals for the launch and distribution of

are strong in gynecology, angiology, and general medicine,

tranexamic acid, a gynecological product already approved

with one of our most distinguished products Navelbine

by COFEPRIS. However, a focus on highly specialized

Oral prescribed for patients suffering breast and lung

products and biopharmaceuticals is premature due to

cancer. We distinguish ourselves from other companies

access constrictions and budget issues. That said, R&D

by working closely with our physicians to provide support

investment for companies like Pierre Fabre is key to our

on continuous medical education. Locally, we emphasize

long-term innovation strategies. As such, we continue to

business development, so that we stand out as partner of

invest in oncology solutions, however I expect companies

choice for new entrepreneurial pharmaceutical companies

to reduce R&D budgets due to access limitations and patent

seeking to enter the Mexican pharmaceutical market,

protection losses. The Ministry of Health and COFEPRIS have

as well as established companies requiring additional

significantly improved approval processes for innovation

expertise and access capabilities. We have also worked

drugs, but access to the institutional market, remains a

with key leaders in the field of oncology to introduce a

concern. The time it takes for a new molecule to reach the

new PFM molecule to treat bladder cancer. We believe

market from the laboratory stands at almost four-and-a-half

in innovation, invest heavily in R&D, and will continue to

years, longer than in other Latin American countries.

seek the support of legal and regulatory entities to ensure that innovation in pharmaceuticals will be available for the

Q: How is the changing distribution landscape impacting

benefit of patients.

the market and your strategies? A: Old players are leaving the arena and major companies

Q: What opportunities do you see in the Mexican

are continuing to expand. As chain pharmacies grow in

dermocosmetic market?

number and enter new market territories, we see distributors

A: The young dermocosmetic industry is not the only

seeking integral solutions for consumers and patients.

therapeutic sector rich in opportunities. Today there are

The public health care system is also evolving, presenting

more players in the sector, with a consumer base more

lower operational and distribution costs, and improving

aware of the treatment, brands, and access options,

services to patients. Distributors for the institutional sector

which generates more room for competition. The

are developing operations to optimize treatments for

dermocosmetic market is attractive from a business

individual patients. This requires a substantial amount of

perspective, as the typical consumer in this sector has a

investment and technology development. As new players

more voracious appetite for novel and ethical products

integrate and different trade rules form, we expect to see

and services. One challenge is to communicate with

major changes in the coming years.

our consumers in an ethical and transparent way, while

106

simultaneously listening to feedback. A process that

Q: What social responsibility initiatives is Pierre Fabre

depends on direct and digital marketing, customer

working on in Mexico?

relations management, database marketing, and person-

A: We work with the main healthcare institutions on

to-person promotion at points of sale. This ensures

chronic disease detection campaigns and programs.

future we expect to continue providing efficient, accessible

greatly on R&D, not only to develop new products, but

treatments for various pathologies, like we have with

with an aim to enhancing existing products by adding new,

Hemangiol, a product developed to treat hemangioma

beneficial components.

in pediatric patients. Thanks to its therapeutic success, Hemangiol has been rapidly approved by the FDA and is

Q: CANIPEC and PROFECO signed an agreement banning

currently undergoing the COFEPRIS registration process.

products with ambiguous advertising. Has this new visibility been beneficial to the market?

Q: Pierre Fabre has a long history producing medicines

A: Visibility is critical, and while there has been progress,

from phytochemicals and natural extracts. Is the company

there remains room for improvement. Chambers of

continuing to develop this area? Is there confusion over

commerce and our own authorities must continue working

phytochemicals and herbal supplements?

together to enhance the regulations and advertising of

A: Pierre Fabre’s origins lie in the development of organic

pharmaceuticals and dermocosmetics. As an industry,

medicines. Fabroven is a root extract developed by our

we will continue delivering safe, effective products and

late founder, and it was on the back of this product that

treatments to the market, and will continue to use the

the company was founded. Fabroven has been in the

correct and appropriate advertising channels.

market place for over 50 years, so it is a well-established, well-studied product which possesses solid scientific and

Q: What are your main objectives for the coming years?

medical recognition with an emphasis on its distinction from

A: Our pharmaceutical business has much more to deliver

herbal supplements. Like any drug, phytopharmaceuticals

from an organic growth perspective. This is a priority

comply with the highest standards of manufacture and

of ours. We will continue to establish strong alliances

quality assurance. European consumers are buying more

with local and multinational companies to promote and

natural products, while Mexico has a long history of using

distribute products. We are also in negotiations with

plants as medicines. Mexican universities such as the one

other global pharmaceutical companies such as Medinova

at Chapingo conduct extensive research on plants, and

and Medigene, whose innovative products are ready for

their work on agave cactus fungi may well contribute to

promotion within the women’s health market, a segment

cancer treatments. The dermocosmetic market focuses

that we aim to prioritize.

| INNOVATIVE DRUG SPOTLIGHT

IMBRUVICA (IBRUTINIB) FROM JANSSEN-CILAG

was approved by the FDA in November 2013 for the

Most cancer treatments have focused on killing cells that

treatment of mantle cell lymphoma and in February 2014

divide rapidly, a prominent feature of cancerous cells. A

for chronic lymphocytic leukemia. It was approved for use

huge problem with this approach is that many healthy

in Mexico by COFEPRIS on March 2015.

cells also divide rapidly causing numerous side effects to

most cancer treatments. A growing alternative to this are

targeted therapies which are currently among the main foci of anticancer drug development.

First designed by Celera Genomics in a structure-based approach to create a molecule to inactivate Bruton’s tyrosine kinase (BTK), Imbruvica was then acquired by Pharmacyclics and Johnson & Johnson’s Janssen-Cilag division. Imbruvica is a targeted therapy for the inhibition

N N

N NH2

of BTK, a crucial enzyme for B-cell development. This drug forms a covalent bond on the active site of BTK which inhibits the enzyme, which is essential for the survival of malignant B-cells thus its inhibition blocks the signals that

drive their uncontrolled growth and division. Imbruvica

107

| VIEW FROM THE TOP

ORPHAN DRUGS - THE RIGHT ACCESS PATH LUIS CALDERĂ&#x201C;N CEO of Alexion Pharmaceuticals and President of the Mexican Association of Pharmaceutical Research Industries (AMIIF)

Q: How many obstacles remain to the development of a

any use without conscious corresponding human capital

thriving biopharmaceutical sector in Mexico?

development?

A: The challenge that Mexico is facing today is the

A: I think this is a multi-faceted problem. Healthcare

lack of access to innovative products. COFEPRIS has

expenditure in Mexico is only 6.2% of GDP, which is very

certainly made a great effort to improve approval times.

low compared to the average of 9% within OECD countries.

However, public institutions such as IMSS, ISSSTE, and

Furthermore, considering that 50% of that expenditure

Seguro Popular still have certain things to do in order to

comes from out-of-pocket expenses, the government

improve their processes and increase access within the

invests only 3.1% in health expenditure. A large part

public market to medicines. Processes should speed up in

of this budget goes to administrative costs and other

order to bring drugs to the population that needs them.

processes, rather than being invested in medical training

Additionally, the number of physicians who specialize

and medicines. Therefore, resources should be better

in therapeutic areas where biologics are prescribed

allocated to improve the healthcare system. It is not that

is concerning; for instance, there are around 600

the government is not playing its role but it is taking a long

hematologists in Mexico, which is a very small number

time to effect the transformation of the whole sector. On

when you consider that we have a total population of

top of that, the national healthcare sector is complicated

120 million. The same happens in other specialties such

due to health disparities in the Mexican population. While

as endocrinology, where there are only 180 physicians.

chronic conditions including diabetes, obesity, and cancer

Endocrinologists should treat patients with diabetes, so in

represent a crisis for the sector in terms of mortality rates,

order to take advantage of biologics there is a huge path

there are still 30 million people below the poverty line

to follow to increase the number of trained physicians

who require basic primary care services and medicines,

from different hospitals.

such as antibiotics. It is therefore a big challenge for the government to create effective strategies to address

Q: Why is specialization such a challenge and what should

such disparities, as well as to define the top-priorities and

be done to address the issue?

develop the necessary infrastructure for the future.

A: Specialization is necessary to address the modern challenges in the healthcare sector. In the 1980s, the

Q: Notwithstanding these challenges, have there been

Mexican population increased dramatically and, in order

encouraging developments?

to meet the growing demand for healthcare services for

A: Many new biotech-driven companies are entering

children, the government established the right incentives to

the market, and COFEPRIS has successfully shortened

create more pediatricians. I do not see the same intensity in

the approval times for new molecules. Mexico was

the governmentâ&#x20AC;&#x2122;s agenda to address the need of specialists

the first country to grant market authorization for two

in therapeutic areas for chronic and degenerative diseases.

biopharmaceutical products, which was the result of

In addition to this, the general knowledge that physicians

several moves such as improving the clinical research

are obtaining in school with regards to chronic and

pathway in the country, as well as recognizing other high-

degenerative conditions is still lagging. If they do not enter a

quality regulatory agencies such as the FDA and EMA.

high-specialty and get clinical training in specific areas such

COFEPRIS has significantly improved its review process,

as diabetes and obesity, their knowledge is very limited.

which certainly represents a benefit for the industry.

Thus, better education and training programs for physicians

Companies are now authorized to start developing but

are necessary in Mexico. In fact, this reduces the number

not commercializing biosimilars eight years before patent

of biopharmaceuticals that are available in the marketplace.

expirations.

Q: The government has recently developed a regulatory framework for biopharmaceuticals and biosimilars. Is this

108

Q: What role is AMIIF hoping to play in developing the market?

A: We are working on a joint effort with COFEPRIS to

in which third-party organizations such as the national

develop the right norms for biopharmaceuticals, biologics,

institutes of health are now allowed to participate in

and biosimilars. We have learned a lot from international

the approval process for study protocols. AMIIF and

experience on biologics and it is a dynamic field that has

COFEPRIS recently signed a collaboration contract with

dramatically changed in the last ten years. The clinical

IMSS for the latter to also participate in such processes,

studies that are required for product approvals are

and furthermore, IMSS is now authorized to conduct more

completely different from those required for generics.

clinical studies than before. Therefore, more innovation is

Therefore, this is a matter of continuous learning in

coming to Mexico not only for Alexion but in general terms.

order to keep the pace with harmonized regulations

It is expected that many companies expand their research

and new developments. The same thing will apply for

activities in the country, which I am sure will benefit the

nanotechnology and stem cells therapy. Regulation is

whole Mexican industry.

always lagging behind innovation because it is impossible to regulate what does not exist yet. The challenge for

Q: Do you believe Mexico should pick an area to focus on

COFEPRIS is to develop transparent processes for the

for economic development based on investment returns?

approval of biosimilars, and we are collaborating with

A: This is a matter of the government deciding where it

them in this regard.

wants to win and how. A couple of years ago, the South Korean government set the bold goal of becoming a

Q: How is this progress impacting the orphan drugs

leader in the innovative pharmaceutical market. They

segment on which Alexion focuses on?

signed agreement contracts with the US, redefined

A: Orphan drugs have a specific approval pathway for

their intellectual property model, and heavily invested

market authorization to obtain orphan drug designation,

in the pharmaceutical industry. Similarly, the Mexican

which is very different from the one that traditional

government has to decide if it really wants to win in the

products follow to get sanitary approval. Also, the

biotech and healthcare sector, and if it is willing to invest

approval process for orphan drugs is not as lengthy as for

more in this field. Progress will not only happen due to

traditional products; it is a faster and less complex process

entrepreneurship but it requires a huge amount of money

that takes 40-60 days. Last year, COFEPRIS developed

and resources. This sector is very risky and high a return

a draft norm for orphan drugs along with AMIIF, which

of investment is needed to sustain a biotech business. The

will be approved in the upcoming weeks or months.

government needs to realize that a risky sector has higher

Hopefully, this will bring certainty to the regulatory status

failure rates, and in addition high interest rates make this

of orphan drugs.

sector even a more difficult one for business development. Therefore, a clear play-to-win strategy is needed in Mexico

Q: How challenging is it to obtain approval for drugs that

to invest the right resources in the right sector, whether it

are targeting such a small handful of patients?

is automotive, energy, or biotech.

A: Firstly, our products have to comply with regulatory requirements. Once we get approval, we submit a proposal

Q: Should Mexico be looking to other countries, such as

to the General Health Council, and then we request access

South Korea and Brazil, as role models?

to one of the different Institutions. In the past, it was very

A: In terms of innovation, Mexico could replicate what

difficult to get approval from the General Health Council,

South Korea has done regarding intellectual property law

as it was mandatory to present a cost-effect analysis for

and creating the right environment for innovation. South

orphan diseases, which is practically impossible because

Korea is a unique example of how products have been

there is no data to build a consistent model for an accurate

developed and how they have emerged from the pipeline.

assessment. Fortunately, the cost-effect analysis was

Brazil has a complete different approach due to the fact

recently replaced with a budget impact model by decision

that it decided to take the biosimilars path rather than

of the General Health Council, which accelerated the

the innovation one. In order to bring biopharmaceuticals

approval process for orphan drugs.

to the country, it has to be defined that of would happen through the innovation path or biosimilars one. Being an

you

envisage

Alexion

and

other

major

emerging market, we need to take a look at which path

pharmaceutical companies bringing R&D projects to

is more successful than the other. The government is

Mexico?

realizing that the opportunity to go abroad is important

A: There have been several changes in the Mexican

and that will be transforming the industry. I do not know

regulatory environment and market to support this. We

whether the focus will be on innovation or on generics

have a better and quicker regulation for clinical studies

and biosimilars, as this is not yet clearly defined.

109

BRINGING HOPE TO PATIENTS WITH RARE DISEASES Infectious and chronic diseases have occupied the main

to the less than ten approved in the 1970s. Another

focus of both the public and private health systems and rare

encouraging factor is the Human Genome Project. Since

diseases have taken a back seat. Rare diseases are those

it is estimated that approximately 80% of rare disease

that affect a small number of individuals, although there is

are of genetic origin, sequencing the human genome has

no universal definition of which diseases classify as rare and

allowed great progress for personalized medicine, yielding

how many sufferers there are, as numbers vary from country

tools for treating many previously unexplored conditions.

to country. While in the US a disease is considered rare if

Also genetic markers allow doctors to diagnose a patient

it affects less than one person per 1,500, in the European

population before it even begins to show symptoms.

Union the requirement is one per 2,000 individuals. Mikel Arriola, head of COFEPRIS classified a rare disease as one

In Mexico the total number of individuals affected by rare

that affects one person in every 2,000, but this number may

diseases is undetermined, but COFEPRIS recently stated

vary by geographic area and time period. These diseases

that approximately 50,000 patients have been diagnosed.

are often genetic and in some cases there are as few as

Another large problem is that clinical studies of ODs are

only one or two documented cases. Their low prevalence

limited by the small number of available patients thus

makes them extremely difficult to detect and quantify and

slowing their introduction into the country. Taking into

there are no concrete numbers of how many exist, but it

account the impressive and on occasion prohibitive costs of

is estimated that there may be about 6,000 or 7,000 such

ODs, Mexicoâ&#x20AC;&#x2122;s public health sector faces a difficult decision

diseases and each week five more are identified.

between providing life-saving medicines to a few patients at extremely elevated costs or treating many more patients

Rare disease diagnosis is often challenging. Exact numbers

with less expensive medicines. Soliris, for example, can only

are uncertain, but it is estimated that around 350 million

benefit 77 diagnosed patients in Mexico but would imply

people worldwide are currently suffering from a rare

spending US$34 million on its development.

disease. Developing countries face even more uncertainty as quality healthcare services are not guaranteed, making

Even so the current COFEPRIS administration has made

it even less likely for patients to obtain a timely diagnosis.

sustained efforts to introduce ODs to Mexico. In January

Even after patients are diagnosed they are unlikely to obtain

30th 2012 the articles 224 Bis and 224 Bis 1 were added to

an effective treatment as few pharmaceutical companies

the National Law of Health with the aim of facilitating the

are willing to invest in orphan drugs (ODs) to treat them.

approval and introduction of ODs to Mexico and allowing

The drug development process is highly expensive and

the Ministry of Health to propose recommendations to

time consuming; development of a single medication

the National Institutes of Health for the development of

can take more than ten years and cost millions of dollars.

these medicines. The effect of this law was significant and

As these drugs target very few individuals, a recovery of

immediate. In the past three and a half years 52 orphan

invested capital is unlikely. This fact makes ODs extremely

drugs have been introduced to Mexico in comparison to

expensive and unattainable to many patients. For example

the single drug approved in 2010. Over the course of 2015,

Alexion Pharmaceuticalsâ&#x20AC;&#x2122; Soliris (eculizumab), used to treat

19 new ODs have been approved by COFEPRIS.

paroxysmal nocturnal hemoglobinuria, costs US$440,000 per year of treatment. At this point it is estimated that the cost of an OD is 19 times higher than the cost of regular medication with patients ultimately covering the costs. The

AUTHORIZED NEW ORPHAN DRUGS

Number of authorized new orphan drugs (Source: COFE 13

2010

prices of ODs are set on a case by case basis but generally the smaller number of patients who benefit from the drug,

2011

the higher its cost. 2012

While

the

process

has

been

laborious,

both

the

governments and pharmaceutical industries are promoting

2013

the discovery and development of ODs, giving hope to numerous patients. In the US the Orphan Drug Act of

2014

1983 provided economic incentives for developers of ODs including seven years of market exclusivity, tax credits, and grant funds. Since this act was passed about 500 new ODs were approved, a large number in comparison

2015

Source: COFEPRIS

110

Accumulated total: 52

| VIEW FROM THE TOP

BRINGING TOGETHER ACADEMIA, INDUSTRY AND GOVERMENT DR. DEA HERRERA President of Asociación Farmacéutica Mexicana (AFM) Q: What are the main activities and goals of AFM?

these chapters, we stay informed about the curricula of

A: We create opportunities for our colleagues and members

pharmaceutical science courses and provide advice on

to gather and exchange knowledge as well as promoting

how to improve or modify them to ensure that students

technology transfer. Our expo has been running for 44 years,

graduate with the widest possible skillsets. Our publication,

over which time, it has grown to become the nationwide

the Mexican Journal of Pharmaceutical Sciences, includes

ExpoFarma that exists today. We also hold an annual National

scientific articles written by university researchers and

Conference of Pharmaceutical Sciences, which brings

provides advice for CONACYT.

together students, academics, industry professionals, and government officials to discuss the direction of the country’s

pharmaceutical sector and set future objectives. For 2015

pharmaceutical studies in Mexican universities?

What

else

can

done

further

promote

the congress focused on pharmaceutical formulation due to

A: We need to invest more in education. AFM promotes well-

its trend affecting the pharmaceutical industry worldwide.

educated and well-trained pharmaceutical professionals as

To tackle these problems we invite experts from the US,

one of the best investments Mexico can make for the future

such as FDA personnel or leading academics, to share their

of its healthcare sector. Adequate education will drive the

experience with Mexican professionals. Finally, we organize a

innovation of new medications and technologies in Mexico.

Healthcare Regulation Summit primarily concerning industry

AFM also promotes many activities with students as they

players, who must abide by national regulations of drug

will be the future leaders of COFEPRIS, other government

manufacture and sale in Mexico. We bring them together

organizations, and private companies. We want them to

with healthcare policy-makers so that they may jointly

realize as early as possible the importance of all these

assess the impact of regulations on the industry and study

sectors working together to develop Mexico’s healthcare

any amendments or areas of mutual concern. Alongside

sector. Furthermore, they must understand that education

these major events, AFM offers a range of training courses,

is a continuous process given how quickly pharmaceutical

covering technical issues that concern the pharmaceutical

companies evolve.

industry. We also conduct talks, the topics of which evolve each year depending on prevalent industry trends.

Q: Why did ExpoFarma 2015 focus on topics such as manufacturing?

Q: What is the traditional profile of AFM’s members?

A: ExpoFarma revolved around different areas related to

A: Our members are not companies, but individuals

pharmaceutical manufacturing, including the production

enrolled in pharmaceutical science programs. We also

of pharmaceuticals, new technologies to determine the

work with experts and professionals from a wide range of

best raw materials, automation of manufacturing solutions,

industries related to the pharmaceutical sector. Besides

and strategies to analyze each step of the production line.

our strict membership criteria, we also seek to nurture our

We want to pitch all these ideas to potential clients, such as

influence and outreach by maintaining very close relations

local laboratories that may not have the resources to carry

with government agencies, such as COFEPRIS. For

out research abroad and buy these new technologies.

instance, we organize the Healthcare Regulation Summit jointly with COFEPRIS and CANIFARMA to maximize the

By exhibiting these technologies at our events, we allow

scope of our audience and offer a participation incentive

potential clients to realize the benefits of investing in them.

to the industry, government, academia, and students.

As President of AFM, I have a full-time position at the Autonomous University of Morelos where I run a research

Q: How do AFM collaborate with academic institutions on

lab. I prefer to see the piece of equipment working and

research matters?

compare it to competitors’ technologies than simply

A: AFM has student chapters in different universities

listening to a technician’s explanation. This ideology

across Mexico, which all have academic advisors. Through

pervades all our activities at AFM.

111

NO SIGN OF M&A SLOW DOWN Recent years have been busy in terms of global M&A deals

Mexico based business in a US$34 million deal, expanding

and the pharmaceutical sector has played a significant

the company’s operations in the country.

role. According to IMAP’s Global M&A Pharma Report 2015 lower tax rates in 2014 were a major driver for deals, but

As for Latin America, 2014 was a busier year than 2013

the main motivator was growth ambitions. Following a

with 24 reported transactions mostly taking place in Brazil

major joint innovative deal between Novartis and GSK the

and Mexico. Important acquisitions such as Profarma by

two now own a global OTC leader, GSK grew it’s vaccines

ameriSourceBergen were seen. Moreover, the number of

division, and simultaneously Novartis divested its animal

transactions undertaken by companies with private equity

health unit to Eli Lilly.

shareholders has been showing a steady grow. The Mexican based group Invektra (Sanfer), now partly owned by General

In the first quarter of 2015 global pharmaceutical deals

Atlantic, is a good example of inorganic growth (Labinco

reached US$59.3 billion, a 94% increase over that same

in Colombia is now part of More Pharma). Chile played the

period a year ago, and the highest value for this stage in

leading role in 2014 in terms of acquisitions with Abbott

any year since 2009 according to Thompson Reuters. Half

acquiring CFr (recalzine) for the amount of US$3.4 billion –

way through the year consultants KPMG reported a total

by far the largest transaction in the region. Experts believe

of US$221 billion worth of deals had been completed. This

this seems to be a unique strategy rather than a trend

predatory environment has created what some experts have

since no other big pharmaceutical company has acquired a

characterized as a trigger-happy climate, with companies

regional branded generics enterprise before.

eager to buy before they are bought. Huge deals such as AbbVie’s US$21 billion deal for Pharmacyclis, and Pfizer’s

The reasons behind the long-term flood of activity are,

US$17 billion deal for Hospira have created ripples in the

according to experts, multi-faceted, but the key motivators

industry, with experts uncertain of the real returns that will

are investor pressure and diminishing opportunities for

be seen from such massive investments. The world’s largest

innovation. In the generics sector combining efforts can

generic drug maker Teva Pharmaceutical industries acquired

see reduced costs and increased efficiency at the same

Allergan’s generics business for US$40.5 billion, and Allergan

time. When it comes to the bigger picture and how all

in turn purchased biopharma firm Naurex for US$560 million.

this activity will impact healthcare itself, the hope is that

Valeant Pharmaceuticals was the successful purchaser of

combined efforts in the face of high cost innovation and

Salix Pharmaceuticals in a US$15.8 billion bidding war with

fewer new discoveries, will lead to optimized R&D and

Endo International. Ireland’s Perrigo acquired Pantheon’s

better access for the public.

TRANSACTIONS WITH A DEAL VALUEThan LARGER THAN US$2MergerMarket, BILLION Transactions With A Deal Value Larger US$ 2BN (Source Thomson Reuters, IMAP research) Actavis / Allergan

Actavis / Forest

Novartis / GSK’s oncology

Bayer / Merck & Co’s OTC unit

Merck & Co / Cubist

Roche / InterMune

McKersson / Celesio

LabCorp / Covance

Eli Lilly / Novartis Animal Health

Mylan / Abbott’s generics (ex-US)

GSK / Novartis’ vaccines

Mallinckrodt / Questcor

Perrigo / Omega Pharma

Sun Pharmaceutical / Ranbaxy

Merck & Co. / Idenix

Abbott / CFR

Otsuka / Avanir

Meda / Rottapharm

Forest / Aptalis

Endo / Auxilium

Deal value $ (billion) scale

non-core business disposal

Main deal drivers:

Scale

Source: MergerMarket, Thomson Reuters, IMAP research

112

add-on to core business

Non-core business disposal

Add-on to core business

| SPOTLIGHT

TRANS PACIFIC PARTNERSHIP

the US is currently promoting a 12 year data-exclusivity on

The Trans-Pacific Partnership (TPP), a proposed free trade

biotechnological drugs. Some parties, including Partner at

agreement (FTA) involving Australia, Brunei, Canada, Chile,

Olivares Alejandro Luna Fandiño, believe that this treaty

Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the

will allow for the growth of the Mexican Life Sciences

US, and Vietnam, is creating both anticipation and anxiety

industry. Since the TPP promises strong IP protection, it

among its members and other third parties. The TPP began

can stimulate local R&D and the introduction of innovative

as an expansion of the Trans-Pacific Strategic Economic

medicines into the country by international companies.

Partnership Agreement between Brunei, Chile, Singapore, and New Zealand, but since 2008, and other eight countries

On the other hand, the TPP raises several controversial points

have joined the negotiations while several others have shown

as its regulations also influence local economic activities

interest in incorporating. To join negotiations, prospective

including government purchases and IP protection. Another

members must prove to be committed to the goals of the

concern is that, by stimulating trade among its members,

treaty and must be approved by a consensus of the current

countries that currently trade with Mexico may shift their

members. Mexico was invited to participate on June 18th

trade to other members of the TPP thus reducing Mexico’s

2012, during the G20 in Los Cabos. While negotiations were

exports. The TPP is raising strong concerns on healthcare,

meant to finish in 2012, this treaty is still being discussed to

as its application could potentially impact many health

this date due to the sensitive nature of some of its clauses.

policies especially in developing countries. One of those

One of the reasons for this controversy is the fact that,

policies relates to the patent of pharmaceuticals. Dr. Suerie

unlike several other trade agreements, the negotiations

Moon, Research Director and Co-Chair of the Forum on

for the TPP have been performed behind closed doors

Global Governance for Health, recently spoke on Vector

thus the public only has minimal information available. As

Pharma 2015 on the potential dangers this treaty could

negotiations have extended beyond expectations, several

bring to developing economies, especially in the matter of

members are introducing strategies to streamline the

health. This fear is shared by other groups including Doctors

process. For example, US President Barack Obama has

Without Borders and Oxfam International. Current World

put TPP on the US Senate Fast Track which will allow for

Trade Organization (WTO) regulations state that patents last

a faster resolution, be it approval or rejection. A concern

for 20 years, but new regulations introduced by the TPP such

of this move is that it does not allow for the revision and

patent linkage and data-exclusivity could potentially expand

modification of individual policies within the TPP.

this timeframe, placing a great burden on the manufacture of generic and biosimilar medications. These measures

The TPP envisions eliminating tariff and nontariff barriers to

would negatively affect Mexican manufacturers of those

trade and harmonizing trade agreements among members.

medications, which would have to either remove products

Many believe it to be a mayor opportunity for Mexico. Luis

from the market or delay their introduction. Patients in

Roberto Abreu, president of the National Association of

developing countries would also be heavily affected by

Mexican Importers and Exporters (ANIERM), praised the

these measures, since generics can represent up to a 90%

potential of the TPP to open new markets, mainly with

cost reduction in comparison to a patented medicine.

Australia, Brunei, Malasia, New Zealand, Singapore, and

Therefore, patients in developing countries depend on these

Vietnam, with which Mexico has no current FTAs and few

reduced prices for acquiring life-saving medications and

exports. The TPP also aims to strengthen patents and the

their disappearance from the market can have catastrophic

exclusivity of medical data, which prevents regulatory

effects on their lives. Another considerable effect would be

agencies from registering generic versions of drugs for a

“investor-state dispute settlements” which will allow private

determinate number of years. Mexico is currently part of

companies to sue member countries for damages if they

the North American Free Trade Agreement (NAFTA) and

estimate that future profits may be affected.

the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), both of which enforce exclusivity

With no final date (formal or informal) for negotiations in

of medical data and protect it from unauthorized replication

sight, the TPP is still undergoing alterations and many topics

for five years but they are not strongly enforced. The TPP

are still on the table. Many groups are still concerned about

aims to strengthen current patent law and its enforcement

the implications of the TPP for developing and developed

by adding additional intellectual property (IP) protection

economies but there is still room for negotiation on several

mechanisms, including patent linkage, extensions on

of its points, thus there is still time for all sides to discuss

patent life or compensations due to regulatory delays,

controversial topics and generate agreements that will be

and data package exclusivity for new compounds. Also,

beneficial for all parties.

113

General mistrust historically led to generics playing a minor role in Mexico largely resulting

from a lack of regulation that allowed low quality drugs to flood the market. By 2010, however, COFEPRIS had improved regulation leading to a gradual change in the public perception towards a more general acceptance of generics. Since October 2011, 32 active substances have been released corresponding to 357 new market authorizations of generic medicines, resulting in an average price reduction of 61% and improved access to treatments for more than one million patients in the public sector. Currently generics represent 80% of the market in terms of volume, but only 20% in terms of value.

This chapter will outline the improvements in regulation and the growing role of generics in meeting Mexico’s healthcare needs. The strategies used by pharmaceuticals to create branded generics and attract a loyal consumer base in the market will also be examined. Furthermore the manufacturing and growth possibilities of over the counter drugs is reviewed as well as the increasing number of private label drugs entering the market.

HIGHLIGHTS • Generics policy • Regulatory improvement • Pharmacy own-brand products • Entrance of Indian companies • OTC products

BRANDED GENERICS & OTC

CHAPTER 5: BRANDED GENERICS & OTC 118

ANALYSIS: Generics Commanding the Pharmaceutical Market

119

ANALYSIS: An Unrivaled Generics Policy

120

VIEW FROM THE TOP: Socorro España Lomelí, ANAFAM

122

VIEW FROM THE TOP: Dr. Dagoberto Cortés Cervantes, Hormona

124

VIEW FROM THE TOP: Alfredo Rimoch, Liomont | ANAFAM

126

VIEW FROM THE TOP: Efrén Ocampo, Psicofarma

127

VIEW FROM THE TOP: Américo García, Apotex

128

VIEW FROM THE TOP: Eduardo Sosa, Aspen Labs Mexico

130

VIEW FROM THE TOP: Adrián Ruiz, Hetlabs Mexico

131

ANALYSIS: Bioequivalence Studies Shifting Generics Paradigm

132

VIEW FROM THE TOP: Eugenio García-Verde Salazar, Glenmark

133

VIEW FROM THE TOP: Luis Abel Zerecero Mañon, Laboratorios Keton

134

VIEW FROM THE TOP: Juan Francisco Hernández, Wockhardt

135

VIEW FROM THE TOP: José Ángel García Hinojosa, Loeffler

136

ANALYSIS: OTC Market Exceeds Growth Predictions

137

VIEW FROM THE TOP: Julio Barrios, Colgate

138

INSIGHT: José Luis López, Industrias Suanca

139

SPOTLIGHT: Tightening Advertising of Miracle Products

117

GENERICS COMMANDING THE PHARMACEUTICAL MARKET Stepping in to fill many gaps in the healthcare sector,

45% of the market value, according to an analysis done by

the generics’ industry in Mexico has evolved remarkably

FUNSALUD with data from IMS Health. The generics’ market

in the last decade. Fifteen years ago, local manufacturers

comprises branded generics sold to the retail market and

were distrusted by the general public and the medical

pure generics sold to both public institutions and retail

community due to quality issues and safety concerns.

market. Sales to government represent 70% of the total sales

Big pharmaceutical companies were acutely aware that

of generics, which already make up 80% of the medicines

a huge wave of patent expirations was approaching, but

bought by public institutions. On the other hand, the private

at the time most local manufacturers did not have the

label segment is the fastest growing in the private market

necessary resources and capabilities to be competitive.

due to the rapid expansion of pharmacy chains, growing

Many changes have occurred in the last five years though,

importance of supermarkets, and increased customer loyalty

leading to a robust and thriving market for generics as well

and convenience in terms of cost and accessibility.

as millions of Mexicans having access to world-class, lowcost generics.

Developing more strict regulations has been key to improving the general perception of generics. Mexican

Mikel Arriola, Commissioner of COFEPRIS, stated that in

Norm NOM-177 establishes the mandatory requirements

the last four years the number of generic medicines on the

– including bioequivalence studies – for generics to

market grew 15,000%, from 153 in 2010 to 23,500 in 2014.

be approved as interchangeable with their reference

For Mexicans, the entry of generics means a reduction

products. This norm is aligned with global standards and

in the annual medicine expenditure from MX$2,100 to

has certainly managed to ensure safe and efficacious drugs

MX$750.

prevail in the pharmaceutical market, such as patented

IMPACT OF COFEPRIS REGULATIONS ON GENERICS’ PRICES IN THE PRIVATE MARKET 6,000 Average reduction in prices MX$1,052 (reduction of 62%)

5,000 Reduction of 82% in price

4,000 3,000 2,000

Reduction of 61% in price

Reduction of 88% in price

Reduction of 89% in price

Reduction of 81% in price

Reduction of 86% in price

Reduction of 72% in price

Reduction of 79% in price

Reduction of 81% in price

Reduction of 83% in price

Reduction of 80% in price

Reduction of 68% in price Reduction of 70% in price

Reduction of 73% in price

Reduction of 59% in price

1,000

Cefepime (respiratory)

Zoledronic acid (bone)

Escitalopram (psychiatry)

Valsartan (cardiovascular)

Telmisartan (cardiovascular)

Montelukast (respiratory)

Irbersartan (cardiovascular)

Losartan

Clopidrogel (cardiovascular)

Sildenafil (erectile dysfunction)

Olanzapine (psychiatry)

Pioglitazone (diabetes)

Bicalutamide (oncology)

Atorvastatin (cardiovascular)

Source: COFEPRIS

The main drivers for generics are patent expirations, the

medicines and interchangeable generics. Besides, low

implementation of more strict regulatory requirements

quality and counterfeit products have been phased out of

ensuring quality and safety of generics, elimination of

the market. Rafael Gual, Director General of CANIFARMA,

barriers to market entry, growth of pharmacy chains

explains the strength of generics lies in increased trust in

commercializing generics and own brand products, and last

their safety and efficacy and in the fact they are provided

but not least, patients and government’s demand for low

to a large number of patients at low costs.

cost medicines. Today Mexico is the country with the second

118

largest penetration of generics, representing 84% of the total

The government has also implemented an effective

pharmaceutical sales in 2013 – up from 50% in 2010 – and

pharmaceutical policy aimed at improving access of the

population to a well-supplied drug market comprising

Another important area of growth for local companies and

both innovative and generic medicines. According to

manufacturers are OTC products. IMS Health estimated

COFEPRIS, since 2012, 357 generic drugs have been

the growth of the market for OTC products will grow by

released with 32 active substances to treat 71% of

21.4% between 2011 and 2016. Nevertheless, some of the

the mortality causes in Mexico. This has resulted in

big players in this market have faced several difficulties

accumulated savings of more than US$1.5 billion and

in supplying drugs this year as a result of major issues

allowed to treat more than 1.12 million additional patients

affecting the distribution segment. The most relevant areas

in the public sector. Moreover, generics’ prices have been

are gastrointestinal disorders, pain, vitamins, respiratory

reduced by an average of 62% in the private market. Prices

problems, and dermatological products. Additionally,

for atorvastatin and bicalutamide, for instance, are 89%

COFEPRIS has taken important steps regarding tightening

and 88% lower compared to the innovators’ respectively.

of regulations for OTC products as to prevent miracle

Drugs for diabetes and cardiovascular diseases are

products from expanding in the market. The future for

actually 83% and 55% lower in Mexico than the average in

generics in Mexico seems promising. Quality is increasing

South American countries. This has ultimately made the

and there is a consensus among consumers and physicians

Mexican generics’ industry more competitive, capable

that generics are as effective as innovators, creating strong

of expanding to other countries and attracting foreign

opportunity for competition with big pharmaceutical

investment.

companies.

AN UNRIVALED GENERICS POLICY In 2011, when Mikel Arriola was appointed Federal

used to treat 71% of causes of mortality in Mexico, such

Commissioner of COFEPRIS, there was a backlog of 8,000

as hypertension, diabetes, asthma, cancer, and arthritis,

drug registrations waiting for approval. In 2007, generic

meaning that the medicines will have significantly further-

drugs accounted for 44% of all pharmaceuticals sold in

reaching effects on the public health system. According

Mexico. After Arriola implemented an overhaul of approval

to Arriola, the central objectives of the pharmaceutical

processes, the backlog was cleared and, by the end of

policy are to create a wider and more effective range of

2011, the ratio of generics on the pharmaceutical market

therapeutic options and to promote competition in order

had soared to 71%. The timeframe for generics approval

to continue to reduce healthcare costs.

has dropped from 360 days to 60 days, with COFEPRIS estimating that the cost associated with the process has

Consumption of generics over the last four years has

been reduced by 90%.

increased by 30% to 84% of total pharmaceutical volume, highlighting increasing acceptance by public of

With these reduced timeframes, 357 generic medications

generic medication, largely due to the implementation of

were released from 2012 until March 2015, reducing costs

bioequivalence testing. An estimated 51% (US$7.4 billion)

in pharmacies on average by 61%. The government has also

of the Mexican pharmaceutical market now consists of

saved money as a result of the initiative, with more than 80%

patented innovative drugs, while generics represent 35%,

of volume of drugs purchased by the public health sector

valued at US$5.1 billion. Over the counter medications

constituting generics, while the agency spent only 20% of

constitute 14% of the market, earning US$2.1 billion.

its budget on these acquisitions. In contrast, the remaining

CANIFARMA expects the generics market to overtake

80% of the government healthcare budget is spent on

innovators both in value and volume by 2018.

innovative medications, which make up less than 20% of its pharmaceuticals in terms of volume. FUNSALUD estimates

Although out of pocket spending has reduced by 5% in

that the cost of patented drugs can be up to twelve times

the years from 2000 until 2012, Mexico’s out of pocket

higher than generics.

expenditure still significantly outweighs the OECD average. Moreover, predictions indicate that with the proposed TTP

As well as implementing new legislation, COFEPRIS has

agreement, access to generic drugs could become more

used various techniques in order to comprehensively

difficult due to the treaty’s higher level of patent protection.

consolidate the functions of the organization. These

Moreover, there is the risk that the government may overrule

include outsourcing to private healthcare companies and

the tax exemption for pharmaceutical drugs if it fails to see a

relaxing the import regulations related to pre-approved

lack of growth within other economic sectors. The legislation

medications. As a result of the work carried out by Mikel

implemented by Arriola and his team at COFEPRIS has

Arriola, in 2012, the WHO recognized COFEPRIS as a

had a significant impact on the pharmaceutical market, as

reference body for medicines and biological products. The

well as on the economy. The question for the future will be

approved drugs are not only cost-effective, but they are

whether or not this growth can be sustained.

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| VIEW FROM THE TOP

MANIFESTING MARKET POTENTIAL SOCORRO ESPAĂ&#x2018;A LOMELĂ? Executive Director of ANAFAM

Q: What services does ANAFAM offer to the companies

Q: Did the bioequivalence studies improve the image of

it represents in Mexico and what are the advantages of

generics for the general public?

belonging to the association?

A: The pharmaceutical industry as a whole had to

A: The association represents 27 different entities, including

proactively

laboratories, companies, and public institutions. Through

medications with methods including implementation

the association, we create different initiatives to support

of political and advertising campaigns, education of

the national industry to manifest its position and monitor

physicians, and the hosting of conferences and training

its interests. We also promote initiatives facilitating tenders

courses. We had to raise awareness that generics are not

in consolidated purchasing of high quality medication

necessarily the same as biosimilars and provide proof

for the public sector in order to bring healthcare to the

through bioequivalence testing. We made concerted

public. We collaborate with COFEPRIS to establish norms

efforts to educate the government health agencies

for national and transnational companies alike and in this

and their subsidiaries, primarily about the economic

way, development of the industry is promoted globally. We

benefits these products represent. Currently 20% of the

want to generate an increased competition for the national

governmentâ&#x20AC;&#x2122;s pharmaceutical budget is used to buy

industry to enable compliance with FDA standards.

generics, which represent 80% of acquisitions, while 80%

demonstrate

the

benefits

generic

of the budget is used to buy innovators that constitute Q: The generics industry currently represents more than

20% of total acquisitions. Generics, therefore, have created

85% of the market volume. What have been the key

tremendous benefits for the economy, patients and the

factors in creating this growth?

health sector in general. Generics have also benefitted the

A: The generics market gained momentum in 2010 thanks

end customer, since they have facilitated a reduction in out

to a legislative change subjecting generic medicines to

of pocket spending from 49.6% to 44.1% over the last four

bioequivalence studies, which guarantees that the generic

years according to COFEPRIS data.

has the same efficacy and behaves in the same way as

120

the innovator. COFEPRIS registrations guarantee that the

Q: How does the production of branded generics by

medications comply with the bioequivalence norms and

international companies impact the local industry?

any non-compliant medication is immediately removed

A: This has posed a challenge, but it has also forced the national

from sale. The performance of these studies prompted

industry to increase competition and cooperation, and the

national laboratories to overhaul their infrastructure and

support of the healthcare authorities has in turn promoted

increase the quality of generics while simultaneously

R&D within local industry. In 2010, with the expiration of so

working to extend their market share. After the expiration

many patents, many national companies began to focus

of several patents in 2012, national laboratories began to

their resources on research and invest in infrastructure and

produce generic versions and transnational companies

equipment to increase competition and various national

decided to continue manufacturing the same medications

companies focused their efforts on the acquisitions to boost

but to commercialize them as generics. Moreover, the

their generic lines. They collaborated with the government

healthcare authorities realized the need to obtain a large

agencies to strengthen national regulation in order to

quantity of medication at a low cost in order to satisfy

compete overseas. A significant area of focus for the whole

the needs of the public health sector. The appointment

sector is reducing dependency on importing materials from

of Mikel Arriola as director of COFEPRIS created a

abroad. Before NAFTA was ratified in 1994, Mexico had a

clearer interpretation of the legislation after expiration

strong pharmachemical industry but this treaty forced many

of an innovative patent, creating more opportunity for

small companies out of business. The pharmaceutical sector

the manufacture of generics. The Continuous Release of

became dependent on importing core pharmachemical

Generics Program has subsequently allowed the release of

materials and currently 95% of raw materials are imported.

more than 357 generics since 2012 until the present day.

The national pharma industry in Mexico is attempting to return

to self-reliance and not depend so much on importation of

by the Institute of Intellectual Property to grant a patent,

raw materials, which mainly come from China and India. The

which can take a number of years. This treaty is highly

pharmaceutical industry is confident in the growth potential

controversial and has strong opposition from several

of pharmachemicals in Mexico, given the support of the health

groups, including Doctors Without Borders.

authorities and the federal government. Now Commissioner Arriola is implementing various measures to promote more

Q: Are you concerned the TPP will be approved too soon?

competition in the sector through a modification of the Good

A: We still do not know whether or not the TPP will be

Practice regulations relating to medication manufacture

implemented but recently the US government assigned the

(NOM-059-SSA1-2013) and drugs (NOM-164-SSA1-2013), the

legislation to its fast track. We have been in negotiations

purpose of which is motivating companies to adhere to the

and we are worried that if this law passes through the fast

high quality standards demanded by the FDA.

track process and is approved without a comprehensive analysis of each individual part, it will have a catastrophic

Q: What strategies have been implemented by the sector

effect on the national pharmaceutical industry. The main

to increase exports?

problem with this regulation is with biotechnological

A: The current vision of the industry is investment to

medications, which have existed in Mexico for 20 years,

increase competition, which will facilitate exportation.

even though no proper regulation exists for them. The costs

However, many of the companies we represent export

implicated in completely characterizing these medicines

within Latin America, especially now that the Pacific

to comply with the TPP proposal can cost between US$5

Alliance has been introduced so we are currently

million and US$6.2 million, which is not feasible for small

negotiating with these countries to improve healthcare

companies that possess several molecules. We must

regulations so that they can export pharmaceuticals to

improve communication with the authorities since these

Mexico. At the moment, we are working towards FDA

costs are unacceptable for laboratories, and will generate

recognition of Mexican registrations and COFEPRIS has

highly inaccessible prices for patients who will be priced

also received international recognition by the Panamerican

out of accessing the medications that they need. Currently

Health Society and the WHO. The organization is currently

the public health sector is the main buyer of these types of

working towards accreditation by the Pharmaceutical

medications so if the costs increase, the public sector will

Inspection Convention and Pharmaceutical Inspection

not be able to provide medicine universally.

Cooperation Scheme (PIC/S). Currently only 27 countries are recognized by this association.

Q: What has been the market impact of pharmacy ownbrand pharmaceuticals?

Q: What does the Trans-Pacific Partnership (TPP)

A: In my opinion this benefits the sector, since they form

contribute to the national industry?

part of a wide range of pharmaceutical products. The

A: The current TPP proposals for reform are strongly

pharmacies producing these brands are national and

influenced by international pharmaceuticals, mainly from

international generics manufacturers. The presence of

the US, which could be problematic for the Mexican

doctors in pharmacies is a completely commercial initiative

industry since one of the issues the TPP deals with is the

that can be seen as a double-edged sword. If the medicine

strengthening of intellectual property regulations. Any

does not have the desired effect, the patient can lose trust

delay in Mexico meeting the imposed standards would

in all the products with that pharmacyâ&#x20AC;&#x2122;s brand, unaware

directly impact the growth of the industry, exportations,

that this medicine was produced in a laboratory that has

and the development of biotechnological medications

no affiliation with the pharmacy, therefore inappropriate

by local laboratories. One concern is that the TPP is

distribution of these products affects the manufacturing

proposing protection clinical data for biotechnological

laboratory. Mexicans are not accustomed to verifying

medications for 12 years in addition to 20 years of patent

the manufacturer of the medicine. For this reason, it is

protection, which would paralyze Mexican production

necessary to ensure that all pharmaceuticals, generic or

of biocomparables and would create enormous costs

otherwise, comply with all quality and safety regulations.

for the government in the purchase of biotechnological

Many pharmacy chains provide assurances that their

pharmaceuticals. Another problem is the lengthening of

suppliers maintain high standards of quality, with the

patents, supposedly extending the patent by the time taken

aim of protecting their brand. As an association, we host

by COFEPRIS to authorize the health registrations, which

events in collaboration with ANADIM and ANAFARMEX

would be acceptable since COFEPRIS has streamlined its

to promote education around generics and we feel that

process of registration authorization. However, another

the entire industry is jointly liable in the prioritization of

goal is to extend the patent by the amount of time taken

common objectives.

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| VIEW FROM THE TOP

STRONG BASE LINE BOOSTS INNOVATION DR. DAGOBERTO CORTÉS CERVANTES CEO of Hormona

Q: How has Hormona’s presence in Mexico evolved

Q: How opposed are the viewpoints of the international

throughout its long history of operations in the country?

and national pharmaceutical companies on this subject?

A: The current owners acquired this company in 1987.

At the time, they were seeking a company which had a

companies which are in a strong position in terms of the

solid reputation within the Mexican medical community.

resources needed to conduct the clinical trials on new

Hormona started its pharmaceutical investments in Mexico

biotechnological products. On the other hand, there

after the Second World War, when importing drugs from

are national companies waiting to release biosimilar

Europe became very difficult. At that time there was a

products when the patent for a major biotechnological

huge lack of product for the Mexican market, and the

drug expires. National companies, although prepared to

government was very concerned about supply, so Hormona

carry out the necessary basic trials to confirm that the

took advantage of the opportunity to synthesize its own

drug is therapeutically safe, are opposed to carrying out

steroidal products and to manufacture local products

the same clinical trials conducted on the drug’s original

for local needs, subsequently becoming one of the most

release twenty years ago. The pharmaceutical chamber,

important providers for the government sector. At the

CANIFARMA, is striving to align the needs of both sides,

end of the 1990s, Hormona entered into agreements with

identify lines of mutual perspective, and represent them

international companies that already had strong product

both fairly. Finally, the Health Ministry must consider

bases. Today, we have agreements with GSK, Novartis

the pharmaceutical needs of the population, including

AG, Sanofi, Menarini, MSD, along with a number of other

the social security situation. The primary objective of

major companies, to sell branded generics. We have used

COFEPRIS is to ensure that all products available to the

these partnerships to transfer technology, and to build a

Mexican market are manufactured using the highest

manufacturing facility which can produce drugs in Mexico.

standards, and that Mexicans have access to the right

one

hand,

there

are

major

pharmaceutical

drugs. Ultimately, this need will be prioritized over the Q: How is the Mexican pharmaceutical industry evolving?

views of the pharmaceutical companies.

A: In December 2014, Mexican Official Norm 257 was

122

implemented, which governs the conditions under which

Q: What are Hormona’s main strategies as a national

new biotechnological products can be registered, as

company to prepare for the shift to biotech products?

well as renewing those sanitary registers which were

A: At Hormona we are reinforcing our product base line,

approved previously. Most international companies have

since it is the success of those products that will provide us

already conducted the major clinical trials needed for such

with the resources to invest in biotechnology. In Korea we

products and have already made significant investment.

have found two promising options for collaboration, but

Fortunately, Mexican law allows national companies to

those in the US appear limited. There are two characteristics

import finished products directly from abroad and to store

that we would like any prospective perfect partner to have.

them here, removing the need to spend millions of dollars

The first is the quality of their product portfolio. A good

manufacturing the products in Mexico itself and as a result,

partner would be a company with a presence in treatments

many national companies are seeking partners from abroad.

for the top five mortality causes in Mexico- diabetes,

The Mexican Health Ministry has created opportunities for

cancer, metabolic syndrome, obesity, and cardiovascular

local companies abroad though its efforts to internationalize

disease. We often encounter excellent companies, but with

and standardize Mexican regulations, which has opened

strengths in areas such as Ebola or HIV, which for us is not

the doors for us to internationalize. We are increasingly

the right match. The government mainly purchases those

looking beyond Mexico for exportation opportunities. At

types of drugs, and the reality is that just 17% of our total

the moment we export to Colombia, Argentina, and to five

revenue comes from the public sector. Secondly, we want

Central American countries. However, we want to look more

partners to be able to sign contracts for at least ten years,

to European, African, and Asia Pacific markets.

and have a strong pipeline for that ten-year period. We

are ruling out the possibility of making acquisitions locally

Q: How do you think the practice of physicians at the

with the aim of saving time and resources.

point of sale should be addressed? A: We have been working with the government to highlight

Q: How do you position each new drug in the market?

both the strengths and weaknesses of this market trend.

A: It is necessary to recognize that today the market

There are 13,000 private clinics in the vicinity of drug

share of pure generics is 65%. When it comes to branded

stores, conducting more than 350,000 consultations per

generics these drugs hold a unique place in the market,

day, which equates to almost 100 million consultations per

as both physicians and consumers remain loyal to specific

year. The health systems do not have the capacity to carry

branded generics. Twenty years ago it was easy to bring a

out that many consultations alone and therefore these

drug to the market, but today there are so many options it

private offices serve a function. What we are trying to do

is no longer straightforward. Building a brand for a generic

is establish a balance between the benefit and the risk,

drug is a crucial tool in gaining market share. In terms of

which relates to a potential conflict of interest. Doctors

trust for generics, consumers are confident now that if a

need to have complete professional freedom to prescribe

drug has approval for the Mexican market then it meets

whichever medication they believe is best, rather than being

all of the required standards. In the last ten years we have

restricted to prescribing the own-label drugs available at

launched more than 35 products to the Mexican market,

that particular point of sale. If not, there is a clear conflict

and perhaps only 20% of those are innovative drugs.

of interest. Fortunately, the authorities are examining the

However, we have also developed our own technology,

situation to establish the right balance. Drug stores also

which differentiates our products from other generics,

need to be sure that they have the right resources in place

and both physicians and consumers in Mexico recognize

to provide for prescriptions without having to substitute

this. We have carried out our own research to improve

alternative drugs. We have seen cases where a prescribed

commonly used products, reducing the frequency of

drug has been replaced with an alternative drug and a

dosages by developing slow-release capsules.

mistake in the name of the active ingredient led to serious health consequences for the patient. We must be ready to

Q: What do you see as being the main trends that will

foster a universal health system and that means utilizing all

define the future of the Mexican pharmaceutical market?

options available while ensuring stringent quality control.

A: Undoubtedly biotechnology will define the future. Genomic medicine is another area that we are exploring,

Q: What can national pharmaceutical companies do to

but it is still in the early stages of development. Thirty

carve out a valuable niche in the market?

years ago, just two million people were over 65 years old.

A: The unique challenge for Mexican pharmaceuticals is to

Today, there are 11 million. Over the next twenty years this

become powerful manufacturers while also developing their

figure is also expected to grow to 20 million. This poses

own technology. The days when the only role of national

a huge problem for the government. For the universal

companies was to reproduce drugs upon patent expiry

healthcare system, the Seguro Popular system is a huge

are long behind us. The problem is that a lot of Mexican

burden. The government has to be aware of this, and

companies are not proactively taking advantage of the

the pharmaceutical companies must quickly adapt the

opportunity to provide new technology for current drugs

configuration of their portfolios. Those companies that

and differentiate their products. We believe that the future

still believe that epidemiology will focus on infectious

for Mexican pharmaceutical companies is to become value-

diseases in the future will not survive. Drug stores have

adding entities by developing their own technology. Last year

also become a significant feature of the countryâ&#x20AC;&#x2122;s health

the pharmaceutical industry imported US$500 million worth

landscape. For the big chains, own-label drugs are not

of goods, but exported only US$100 million. At present, the

a threat to pharmaceutical companies, but rather a

pharmaceutical industry imports 90% of the Active Principle

complementary point of sale. The days when pharmacists

Ingredients (API) needed to produce drugs, making us

were the gatekeepers of all medication are now gone.

dependent on external sources. To address this, we must

The growth in over-the-counter products means that

re-establish the pharma-chemical industry in Mexico. Thirty

consumers play a much bigger role in choosing their own

years ago, we produced 85% of the ingredients we needed to

medications. The sellers, however, are not manufacturing

manufacture drugs. This changed when Mexican borders were

the drugs. As such, it remains our ultimate responsibility

opened for trade and we are now dependent on countries

to ensure access to quality drugs. The only problem

like China, India, and Korea for our active ingredients. We

that we have seen arising out of the trend of in-store,

have held dialogues with the President and informed him

own-label drugs is the coinciding introduction of onsite

about our concerns. Mexicoâ&#x20AC;&#x2122;s future governments have a big

physicians.

task ahead of them.

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| VIEW FROM THE TOP

STAYING AHEAD IN A COMPETITIVE LANDSCAPE ALFREDO RIMOCH CEO of Liomont, President of ANAFAM

Q: What is the story behind Liomont’s 75-year presence in

range of high-specialization products which can address

the Mexican pharmaceuticals industry?

age and obesity-related diseases.

A: Liomont was founded in 1938 by a German chemist who developed his own products. The company decided

Q: With competition increasing and M&A growing in the

to focus on the private sector early, at a time when

pharmaceutical sector, how much of a challenge will it be

many locally based companies were involved solely in

for Liomont to maintain its top-ten market position in the

the public sector. Only a handful of companies in Mexico

coming years?

have developed as we have: the majority remain focused

A: Defining our current overall ranking is difficult. While we

on the public sector. In fact, today, 40% of our units are

are positioned eighth in terms of volume, we are number 16

distributed to the public sector. This represents only 7% of

in terms of value. This is because we position our products

our sales, however, since associated prices are so low. Our

at more accessible prices. For many years, we were the

commitment to ethics and quality, embodied in our slogan,

fastest growing company in the pharmaceutical industry

“pharmaceutical ethics since 1938,” is another pillar to our

in Mexico. Lately this has slowed down due to competition.

success. What this involves in practice is a commitment to

Mexico carries a weight of expectation as an emerging

promises made, as well as to the best in product quality

market open to global investment. Of the developing

and business practice. Our mission is to be a synonym for

countries in our region, Mexico has shown particular

quality and trust.

promise in terms of stability and opportunity, which has attracted foreign companies to the country. The resulting

Q: What role should private companies like Liomont play

competition has forced us to adapt our strategies. At the

in improving access to healthcare amongst the general

same time, this is also a sector whose low growth runs

public in Mexico?

contrary to expectations. So far in 2014 the pharmaceutical

A: Central to this topic is the guarantee of fair access to

market in Mexico has not actually grown in value at all. In

products when patents expire. Today, in many countries,

terms of volume the growth has been negative. The contrast

governments struggle to fulfil their responsibility to

between expectations and reality is hard to understand. I

provide national healthcare, putting a huge stress on

believe that alternative markets are growing, but under the

public finances. Private companies play an important role

statistical radar. Mexico’s increasingly stringent regulatory

in increasing accessibility, particularly those which can

climate means that established practices are no longer

provide generic alternatives to expired patents. We all

viable in terms of cost and speed issues. Staying ahead of

know patented products are much higher in terms of cost,

the game is therefore becoming crucial. For companies to

so, as local companies, we can provide important access

grow they must look to the global landscape for inspiration.

to cheaper products. At the same time, government is

Partnership with foreign companies in specific areas is a

responsible for immediate accessibility, so they must be

promising approach, as is expansion through exportation.

able to avoid the financial pressure of relying on expensive imports.

Q: What measures is Liomont taking to expand its capabilities?

124

Q: In what areas does the company have the largest

A: Purchasing small innovative companies is one interesting

impact potential?

option and we are actively searching for opportunities. We

A: We have an extensive product line, which mostly

also wish to ensure that we have a strong technological

addresses age-related chronic disease, cardiovascular

platform. Our manufacturing site’s technology is EMA-

issues, and high-specialty drugs. When a patent for a

approved. We now export to European countries including

major drug expires, 30 different registrations of its active

Spain, Italy, and Portugal. After an FDA audit, we are now

ingredient appear immediately, eroding the market.

selling products in the US, with further products awaiting

Presence in major markets is important, but so too is a

authorization. A global mindset is vital for any company

aiming for longevity in the industry. Liomont has stayed one

A: An innovative drug can take ten years to advance from

step of new regulatory requirements in Mexico, while other

the laboratory to the market. We are currently working

companies find themselves impacted by such rapid changes.

on one innovative drug with an academic institution

By matching international standards throughout our history,

and, while the success of a particular project cannot be

we have been able to anticipate changes in the local market.

foreseen, a sustained effort is vital for the industry. Today, there are perhaps ten companies in Mexico which could

Q: What are the deepest challenges facing pharmaceutical

compete with Liomont. To combat this, South Korea offers

companies?

one possible model. Before South Korea could establish

A: Incremental innovation is the fundamental concept

long-term strategies to foster innovation, a complete

for how companies from other countries have achieved

overhaul of regulatory practices and incentive schemes

growth. This happens in countries like Japan, Korea, and

was carried out.

China, where companies continually strive for incremental innovation. Ultimately, this means the private sector

Q: How do you see the market in Mexico evolving over the

collaborates with universities on joint research initiatives.

coming years both generally and for Liomont itself?

To duplicate this, Mexico must overcome some basic

A: Currently, generics and branded generics make up

problems in the way that researchers work. Researchers

around 70% of the industry. The two are difficult to

are paid a bonus for publishing results, which cannot then

separate since some off-patent innovative drugs continue

be patented â&#x20AC;&#x201C; to the detriment of the industry. Without

to be marketed by innovative companies. Branded

product protection, it is difficult to launch a project.

pharmaceuticals comprise 75% of the marketâ&#x20AC;&#x2122;s value. In that

Additionally, researchers distrust industry. As a country

sense the balance is very asymmetrical. In future, generics

we must work to bridge communication between private

may increase to around 80% of market volume. In other

and academic sectors so that our joint aims are clearly

countries, niche markets are important for determining

understood and we can collaborate effectively.

what products may succeed in the long term. We live in an age of excess production, thanks to a plethora of global

Q: What is the timeline for bringing an innovative drug to

producers. If the effect of the major reforms currently

market for Liomont? Do you see more Mexican companies

taking place meets expectations, then the country should

becoming innovators?

be able to reach new heights in pharmaceuticals.

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| VIEW FROM THE TOP

DOMINATING PRIVATE NEUROPSYCHIATRY MARKET EFRÉN OCAMPO Director General of Psicofarma Q: What is Psicofarma’s role in the Neolpharma group and

A: We do produce innovative drugs. One is a combination

how is the market for neuropsychiatric disorders growing?

of three existing products. We have international patents

A: The Neolpharma group encompasses five manufacturing

in the fields of oncology and neurology that have resulted

companies – NeolSyM, Alpharma, Neolpharma, Psicofarma,

from collaborative research with UNAM. We are also

and a company acquired in Puerto Rico – plus 14 other

conducting research in biotechnology and nanotechnology.

service providing companies. Psicofarma focuses on the

We have launched 15 controlled products, but our aim

private market for neuropsychiatry and is the most important

today is to complete more new drug applications. We have

company in the Neolpharma group. This a growing market,

a significant amount of health research ongoing in Puerto

both globally and in Mexico. By number of prescriptions

Rico, where we already have a medicine to reprogram cells

and product portfolio, it boasts the biggest market share

against several types of cancer. It is already FDA approved

in neuropsychiatry in Mexico. We have experienced double-

for clinical trials, as an orphan drug, and its patent was

digit growth over the last seven years.

recently granted in the US.

Q: Who are your main customers, and what are the latest

Q: Which certifications do your plants have and how does

trends in this specialty area?

this influence you export position?

A: Our main buyers are patients, so we approach

A: Our plants comply with best-practice regulations in

specialized

and

manufacturing. The growth of COFEPRIS has helped Mexico

psychiatrists to promote our products. The recent work of

consolidate its presence in the region. Psicofarma already

a number of oncologists has linked cancer to psychological

exports to Central America and Pacific South America, while

problems, meaning that specialists want their patients to

another project to target Atlantic South America is being

be emotionally stable. Studies performed in the UK have

developed in the medium term. Finally, our NDA product

established that lower levels of anxiety and depression

approval in the US is being submitted for drug registration in

lead to more patients following through in all phases of

the European Community. In addition, we have joint ventures

their treatment. This increased treatment efficacy has a

with several Indian companies, one of which is an important

significant impact on quality of life and remission.

player, with well-established R&D and manufacturing

physicians

such

neurologists

processes for biotechnology drugs. Psicofarma is interested Q: What are the most common mental disorders in Mexico?

in producing biotechnology drugs in Mexico, importing

A: Bipolar disorder, epilepsy, depression, and anxiety are the

APIs and operating some clinical trials. Our eyes are also on

most prevalent mental disorders. As the Mexican population

Chinese companies producing biopharmaceuticals. As for

ages, conditions like Alzheimer and Parkinson’s disease

APIs, we acquired a manufacturing plant formerly owned by

become more common. Mental disorders are frequently

Schering Plough in Mexico, and are currently renewing it. The

neglected and misunderstood in Mexico because of a lack

first phase of this project consists of supplying Neolpharma’s

of proper information on the topic. People are not used to

companies in Mexico before branching out to Puerto Rico.

visiting the doctor when they feel emotionally unstable, or even when the elderly present symptoms such as dementia.

Q: What is the strategy behind having a manufacturing

This is in spite of the fact that these disorders represent a

plant in Puerto Rico?

burden for patients and families alike. Such disorders still

A: Puerto Rico is under US jurisdiction, so it is an excellent

carry a stigma for the family members of patients. More

platform for penetrating the American market and is a

education and early diagnosis, then, are essential to help

manufacturing hub for Latin American pharmaceutical

people access proper treatment.

companies interested in producing generics. We are working closely with the government of this country and have

126

Q: What role does innovation play in your business

recently launched a product for hyperthyroidism in Puerto

strategy?

Rico, which represents about one third of the market share.

| VIEW FROM THE TOP

ADAPTING TO A BRANDFOCUSED MARKET AMĂ&#x2030;RICO GARCIA CEO of Apotex

Q: How would you describe the evolution of the generics

adopted aggressive strategies when launching new products

market in the companyâ&#x20AC;&#x2122;s 18 year presence?

but we are currently launching ten to 15 new molecules a year. the

Today, foreign companies are very interested in the Mexican

pharmaceutical industry was not focused on generics. As

market, with companies from India entering the country

Mexico is a brand-focused market, it was difficult to establish

with aggressive strategies. We are now in the process of

a foothold when we began. A few key distributors already had

increasing our capabilities and generally, the presence of

contracts with innovative companies, and were not interested

more competition makes it a more challenging arena. We

in generics. When we began to develop new channels,

should not underestimate any of our competitors. That being

including directly supplying pharmacy chains, Apotex was

said, the sector is not as dynamic as in other countries and

able to harness the true potential of the market Once it

many companies that were established years ago could not

was established that generics are high-quality drugs, many

keep pace with the new regulatory requirements, and so

companies entered the market. Today the market consists of

disappeared or were acquired.

When

Apotex

entered

the

Mexican

market,

pure generics and branded generics, which contrasts with the situation in developed countries. The pure generics market

Q: What have the main developments been within the

represents just 5% in sales value and 14% in units of the total

industry?

pharmaceutical market and is dominated by the pharmacy

A: Physicians at pharmacies is something not seen in

chains. However, pharmacy chains will soon have portfolios

other countries. This approach was first considered to be

full of products with expired patents and we must be smart in

unregulated and unethical but today it represents a major

analyzing the products that need to be launched to improve

relief for the public system, as doctors in pharmacies

our portfolio and our brand. This means being more than just

provide important medical attention to patients. Instead

a manufacturer for pharmacy chains. We will enter other high-

of preventing the practice, the government is regulating

value market segments and develop new channels.

it. Physicians should be responsible for providing patients with the best course of treatment, and resist pressure from

Q: How different is Apotexâ&#x20AC;&#x2122;s production portfolio in

pharmacy chains to prescribe certain drug lines. As Seguro

Mexico to its original market in Canada?

Popular continues to develop, so will the opportunities for

A: We do not have the same portfolio in Mexico as we do in

greater convergence of insurance companies, public bodies,

Canada. Apotex produces more than 58 products in Mexico,

potential investors, and pharmacy chains. From a business

our biggest sellers being omeprazole, oral electrolytes, and

point of view, COFEPRIS forces companies to adhere to the

nimesulide. In Canada, Apotex employs 2,000 scientists in

same rules, meaning that our competitors are on par with

R&D and locally we also have a specialized R&D team. We

us. There is more control over the third parties authorized to

are currently building a new manufacturing site in Mexico

conduct bioequivalent studies and approval times are faster.

to double our manufacturing capacity as pill production accounts for 43% of our sales. We hope to double this through

Q: Where would you like to see Apotex in five years?

technology transfer agreements. I am also implementing a

A: In five years, Apotex aims to be the number one generics

new model for launching products, as well as setting up new

company in Mexico and to penetrate the therapeutic

processes, and a renewed culture for the commercial team.

areas of most valuable to our customers. Finally, Apotex will increase its presence in Latin America. There is an

Q: How challenging is it to create brand differentiation?

excellent opportunity for us to gain leverage and we intend

A: Even when generics were perceived as low-quality products,

to be a driver of change. A biosimilar for Filgrastim will

the Apotex brand was trusted and we have maintained this

be launched in the US shortly, with the supervised version

reputation. We still have room for improvement because

of the product commercialized in Mexico. We are seeking

our business processes and customer relations need work,

partnerships and alliances with other companies to bring

and our portfolio must expand. In the past, Apotex has not

these products to Mexico and Latin America.

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| VIEW FROM THE TOP

A DIVERSIFIED PORTFOLIO FOR SUCCESS EDUARDO SOSA Director General of Aspen Labs Mexico Q: What role does Mexico play in Aspen Labs’ vast global

Our other division is pharmaceutical, in turn subdivided into

presence?

three areas. The first is women’s health, an area on which

A: Aspen Labs has operated for 160 years, enjoying great

we are focusing our expansion efforts. We have acquired

success in many countries. Throughout that time, Latin

several branded products for this division from Merck

America has been an instrumental region for our growth.

Sharp & Dohme, including contraceptives and hormone

We incorporated in Mexico in 2004, and we view the

replacement therapies. The second subdivision is critical

country as one of the top five most important emerging

care, for which we have two of the most important products

markets for our business. In 2016, we estimate that Mexico

for thromboembolic diseases. Finally, our prescription

will represent 36% of Aspen Labs’ total value in Latin

subdivision includes cardiology, steroids, corticoids, and

America and 6% of its global value.

drugs for controlling uric acid.

Q: What has been your main strategy for growth in the

Q: Aspen Labs is investing US$20 million in a manufacturing

local market?

plant in Vallejo, near Mexico City. What is the goal of this

A: In Mexico, our business is divided between nutrition

investment? What function will the plant serve?

and pharmaceuticals. We recently acquired Nestlé’s infant

A: This plant used to belong to Wyeth Pharmaceuticals

formula division (previously Wyeth), which now represents

and was divided into pharmaceuticals and nutrition. Pfizer

60% of our total sales in Mexico. We have a slightly different

acquired that plant but decided to move its pharmaceutical

approach to the commercialization of these products to

branch to another location. Therefore, we acquired it solely

Nestlé, since we have our own R&D division dedicated to

for our nutritional line. However, we have now reversed that

improved nutritional alternatives. This formula is a nutritional

decision and will be investing to reactivate the pharmaceutical

product, not a medication, so our promotion strategy

line. Half of the money was used to update the plant and

revolves around its benefits and its alignment with the

obtain COFEPRIS authorization to begin manufacturing

nutritional needs of infants. We are invested in promoting

pharmaceuticals there once more. We are beginning to

lactation, but remain aware that, for several different

produce corticoids and analgesics and the plant will also

reasons, such as work or medical disability, mothers are

manufacture our OTC line, with nine brands for Mexico and

sometimes unable to breastfeed. More Mexican women are

two to export to Central and South America. The other half

now engaged in full-time work, and so they do not have the

of the investment was used to improve our capacity for

time to breastfeed. In these cases, it is extremely important

nutritional products. At this moment, the Vallejo plant is

to use formula to provide proper nutrition to babies under

producing our main nutritional product for Mexico and Latin

a year old. We also have products aimed at providing the

America, which is infant formula for stages one, two, and

proper amount of vitamins and minerals to children from

three. This investment will also allow us to produce special

one to five years old. The formula is the closest alternative to

formulas for reflux and other conditions. Manufacturing in

breast milk available and the best option to prevent obesity.

Mexico gives us several advantages. We can keep costs low and be more competitive, react faster to the country’s market needs, and generate more jobs for the Mexican population. Q: How important is Aspen’s OTC line to its growth strategy? A: At this point we have one OTC product called Nytol which is used to combat insomnia. In the next twelve months, we will introduce three different brands in this area to strengthen our OTC presence. The OTC market is growing extremely fast. However, this popularity has made

128

the sector very competitive, so we often have to compete

only do so with certain products that are not expensive to

with cheap products that are well marketed but do not

produce. This is not sustainable for our more expensive

deliver on their claims. Our strategy is to differentiate

products so we channel them through the private market.

ourselves with clear results and through the demonstration of the efficacy of our products through science. Branding

Q: Why does the Mexican market have such a preference

is one of the most important factors for the success

for generics?

of our OTC products. This has become evident as more

A: Mexicans still have a lot of respect for prescriptions. If

companies have started to invest heavily in branding in the

physicians prescribe a specific brand, patients are more

last couple of years. We intend to increase our investments

likely to respect the brand than to look for a generic, even

in this area and reduce our investments in other promotion

though the name of the active pharmaceutical ingredient

techniques, such as exhibitions and point of sale activities.

(API) is available to them in the same prescription. Doctors are also prescribing branded generics, which they

Q: Have you perceived any change in your usual

trust. This may be because they are reluctant to risk their

distribution channels?

patientsâ&#x20AC;&#x2122; health by switching to unknown generics. There

A: Distribution channels have changed in recent years both

is a recent law that states that pharmacies must respect

in our nutrition and pharmaceutical lines. Our nutrition

the name of the brand being prescribed, which stops them

clients, especially those in retail, are increasingly requesting

from substituting the product for a generic alternative.

to deal directly with us instead of using wholesalers.

This is still not always the case but we have observed that

This can be either good or bad for us depending on the

about 50% of prescriptions are respected without being

capacity of the retailer and the demand for our products

switched. However, physicians at the point of sale is a new

in their specific geographic zone. Many times, retailers

trend and sometimes they are far more likely to prescribe

are interested in dealing directly with us but risk facing

medicines that favor the specific pharmacy they work at.

large losses if they do not have the right market volume.

Every manufacturer could be negatively affected by this

Pharmacy chains are becoming unwilling to keep relying

practice, as this risky behavior increases every year. Our

on distributors but are still facing this risk, due to not

strategy to compete with such problems is to increase

having distribution capacity. Distribution may be easy in

our brand equity by promoting the real benefits of our

Guadalajara, Monterrey, and Mexico City but not in rural

products and generating confidence among doctors and

areas. This is why we balance our sales based on the needs

patients as to the quality of our products. We also have

of each region. On the pharmaceutical side, the distribution

strong pharmacovigilance to guarantee our productsâ&#x20AC;&#x2122;

channels have undergone considerable changes especially

safety and quality.

after the fall of Casa Saba. Many manufacturers are starting to abandon distributors and instead deal directly with the

Q: What are your main growth plans for increasing Aspen

point of sale. Other distributors are allying with each other

Labâ&#x20AC;&#x2122;s position in the market?

to remain strong in the market.

A: In Mexico, we are trying to increase our sales to be among the top ten pharmaceutical manufacturers by

Q: How important is the generics portfolio for Aspen

2020. We are currently in 27th place so we need to secure

Labs?

double-digit growth for the next three years to achieve

A: We have two different areas for generics. One is branded

this goal. To help with this goal, we are also planning to

generics, which are our core business and where we work

acquire new brands for specialized products and to launch

with medical representatives. The second area covers

new ones in our prescription and nutritional area. These

pure generics, which are manufactured for tenders to the

new launches will be a particularly important pillar of our

Mexican government. We do not have a sales force for these

growth. Over the next three to five years, we will research,

products as they are sold in tenders. This was our initial core

develop, and launch nutritional products for adults and

business in 2004 but we are now reducing its scope. We are

for certain conditions, such as diabetes, cancer, and

no longer focusing so heavily on tenders: instead, we are

metabolic diseases. At this moment, we have completed

shifting our attentions to branded generics and nutritionals.

our integration so we hope to increase our nutrition

The majority of our generics are already part of national

market share at least by eight points in 2016. We are also

bids on which our competitive edge is distribution and price

improving our brand equity as Aspen Labs. While we are

point. However, most of our branded generics are not part

highly recognized in South Africa, Australia, and other

of such bids. Part of the reason we are moving away from

parts of the world, this is not the case for Mexico. As such,

public tenders is that they bring a lot of pressure to lower

we are investing a lot of time and money in branding to be

prices. While we are able to be competitive in bids, we can

recognized as an international company.

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| VIEW FROM THE TOP

HIGH HOPES FOR LOCAL MANUFACTURING ADRIÁN RUIZ Director General of Hetlabs Mexico

Q: What has been your experience of establishing a

A: Indian companies have generally had limited success

foothold in the local market?

in this area in Mexico. For us, it has been easier to focus

A: Globally, many markets have seen price erosion in

on our big pharma customers over the last five years that

generic products, but Hetlabs still sells branded generics

are working on the renewal of market authorizations. For

here in Mexico, maintaining a competitive price base, and

example, we are working with the best ARV companies

supporting the improved regulation that has helped to

and we supply products to them. We maintain a good

temper the prevalence of competitors with low quality drugs.

margin because we are vertically integrated. In reality this

We have been operating in Mexico for three years, investing

is a joint venture because they have the image, capabilities

over US$50 million in clinical trials, in pharmaceutical studies,

for distribution, and market knowledge, and we are experts

and in registering products. COFEPRIS has successfully

in product development. Our new factory will be able to

audited nine of our factories in India, covering more than 200

supply products to the Government that are not part of any

products, and we have now attained 22 market authorizations

deal with our current customers. We have to respects the

in Mexico. Our Latin American operations began in Mexico,

contracts and agreements we have with our private partners.

where we partnered with major companies to act as a provider

So we have some patented products that we will launch

of APIs. We are now looking to open a factory in Mexico to

directly to the market and for these we have strong partners

serve as a base for these markets at a cost of US$150 million.

for marketing and creating their image.

At the moment, we only import products to Mexico, but plan to produce finished dosage forms in the country from the

Q: What kind of innovative products are you developing?

first half of 2016, when our manufacturing site is established.

A: We produce innovative products in the cardiovascular area

Although Mexico was an important manufacturer of APIs in

for obesity and dyslipidemia, as well as for central nervous

the past, it has lost competitiveness in this field.

system. We are conducting clinical trials for these products, which is essential in gaining the confidence of physicians

Q: How has Mexico’s attractiveness as a healthcare base

and improving the image of Indian companies. Regarding

improved due to recent regulatory changes?

biotechnology products, we are not developing innovative

A: The regulation is now clear, allowing for clinical trials to

biopharmaceuticals at the moment, only biosimilars.

be performed only within the medical community. In the

However, the only biosimilar product that was registered

past, such trials were commercial and aimed at gaining

for the Mexican market, Rituximab, was recently withdrawn.

data to sell products or formulate a market strategy.

There are plenty of good clinical research centers in Mexico.

COFEPRIS’ regulatory processes mean that Mexico is

National institutes of health have excellent physicians,

becoming a much more attractive market for clinical trials.

and some of the best doctors specialized in obesity and

Quality is improving in Mexico along with certainty among

diabetes are Mexican. Unfortunately, there are not enough

consumers and physicians that generics are as effective

investments to develop this area, which should not solely

as innovators, which in turn improves competitiveness and

be viewed as the responsibility of the government. The

allows the opportunity for direct competition with bigger

government should be a regulator but the private sector

companies. We own 30%of the HIV market making us

has to provide more services. In Mexico, almost all clinical

market leaders and we are active participants in the WHO

trials for the pharmaceutical industry are phase III and IV

Program to combat AIDS, collaborating with African health

studies. Phase I and II studies also need to be conducted in

authorities. We also hold patents for certain antiretrovirals

the country and more companies should invest in this area.

(ARV). CONACYT’s interest in pushing these innovations

The Mexican government is investing in R&D but it is not

to market creates a promising opportunity in ARV, in

enough and companies have to invest more in the country.

biotechnologicals, and in oncological products. Q: To what extent does Mexico need to improve its image Q: How easy is it to penetrate the public sector market?

130

regarding the quality of the country’s clinical trials?

A: There are plenty of good clinical research centers in Mexico.

A: Clinics at the point of sale are a reality nowadays, but

The National Institutes of Health have excellent physicians.

it is essential that their doctors comply with regulatory

Some of the best doctors specialized in obesity and diabetes

requirements. Authorities must ensure that they provide

worldwide are Mexican. Also, surgeons fly from Mexico to the

patients with the medicines that were prescribed. The

US to carry out heart surgeries. Unfortunately, there are not

branded products that pharmacy chains sell are produced

enough investments to develop this area, and that is not only

with Good Manufacturing Practices (GMP) by other

the responsibility of the Government. In developed countries,

companies, so our challenge is to learn how to compete

it is the participation of the private sector that drives the

with such products and to introduce successful branded

development of this sector. The Government should be a

generics. It is not a matter of choosing between brands, but

regulator but the private sector has to provide more services.

about visiting a physician and obtaining the product that

In Mexico, mostly all clinical trials for the pharmaceutical

was prescribed. In this regard, authorities should ensure

industry are phase III and phase IV studies, so phase I and

that physicians are always updated about new medicines

phase II need to be conducted in the country too, and more

and those that are no longer prescribed.

companies should invest in this area. There are big Mexican companies doing clinical trials for orphan drugs in the US

Q: What are your main goals for the next year?

and Mexico. Multi-national companies are losing their patents

A: Our factory will supply products to the government.

and they do not have plans to expand their R&D activities

We want to be recognized as the best option for branded

to Mexico, unless they identify a particularly big opportunity

generics and high quality APIs, and to be among the top

here, such as the vaccines market. The Mexican Government

20 pharmaceutical companies in terms of sales. As for

is investing in R&D in the country, however the budget is not

generics, we carried out a comparison among Indian and

enough, so companies need to invest more in the country.

non-Indian companies and, according to IMS health data, we are the most successful company of the last 20 years,

Q: Pharmacy chains are selling their own brands of

despite having entered this market only three years ago.

medicines and have doctors at the point of sale. How

We have 20 market authorizations, which will rise to 40 by

does this impact the pharmaceutical industry?

the end of 2015.

BIOEQUIVALENCE STUDIES SHIFTING GENERICS PARADIGM Making bioequivalence studies a mandatory requirement

control tests based on either the Mexican or international

was a necessary step that COFEPRIS took in 2010 to ensure

pharmacopoeias. Results from interchangeability studies are

quality and efficacy of generics in a market previously

only valid for subsequent batches of the generic medicine

flooded by low quality drugs called similares. Mexican

obtained by the same manufacturing process. Moreover,

Norm

necessary

clinical trials for such studies must be conducted under

tests and methods to demonstrate interchangeability

the quality and ethics standards established by the General

and biocomparability of drugs and biopharmaceuticals,

Law of Health, Regulation for Health Research, Norm NOM-

respectively, as well as the requirements third-party

012, CONBIOETICA, Good Clinical Practice, etc., and can

laboratories must comply with to perform such studies.

be performed on either healthy volunteers or patients,

Interchangeability tests are scientifically sound studies

depending on the nature of the medicines being evaluated.

NOM-177-SSA1-2013

establishes

the

including bioequivalence, bioavailability, and comparison of dissolution profiles, aimed to ensure that a generic

The implementation of these requirements is directly

medicine has the same quality, quantitative composition in

associated to both the increasing levels of acceptance of

active substance, and pharmaceutical form as the reference

generics among the population and the positive impact of

product â&#x20AC;&#x201C; an innovative product facing patent expiration.

Mikel Arriolaâ&#x20AC;&#x2122;s Generics Policy, such as savings of US$1.53 billion in government expenditure, increased capacity to

For any given generic medicine, third-party units and sponsors

treat more than one million patients in the public sector,

can only use one batch, while the reference drug must be

decreased out of pocket expenditure, and average price

determined by the sanitary authority. Both the testing drug

reduction of 61%. This has resulted in the pharmaceutical

and its reference must comply with the Good Manufacturing

market comprising only two type of medicines: patented

Practices, as established by NOM-059, and have quality

drugs and interchangeable generics.

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| VIEW FROM THE TOP

SPRINGBOARDING FROM A SINGLE ENTRY POINT EUGENIO GARCÍA-VERDE SALAZAR Director General of Glenmark Q: Glenmark Pharmaceuticals is headquartered in Mumbai,

had a meeting with the India-Mexico Business Chamber to

but has a global outlook – what role does Mexico play in

promote collaboration between both countries to facilitate

the company’s international strategy?

trade. Mexican regulation requires COFEPRIS to inspect the

A: Glenmark has grown quickly from being a company with

manufacturing plants of companies importing products and

an estimated value of US$30 million to more than US$1 billion

it has already inspected and approved several of Glenmark’s

in just 14 years. We have expanded to 88 countries and have

manufacturing plants. Mexico has several useful commercial

15 manufacturing plants worldwide as well as five research &

trade agreements which allow Mexico to recognize good

development centers. Between 2008 and 2009, we opened

manufacture practices in other countries and vice versa, but

offices in Mexico, Venezuela, Peru and Ecuador and currently

this does not imply that COFEPRIS will be able to accept

Mexico is one of Glenmark’s top priorities as a country with

the product immediately.

a strong healthcare economy and sales potential. Our first challenge was to introduce our dermatology line to the local

Q: How have you adapted to the expanding market and its

retail market, as at the time the Glenmark brand was unknown

inherent differences?

in Mexico. Following that the next challenge was to integrate

A: Mexico consumes the second highest levels of generics

a team of qualified professionals who are fully compliant

after the US, and the consumption is much higher than that

with our values, goals, and identity. Glenmark covers

of Germany, the UK, and France. The pharmaceutical market

several different therapeutic areas including dermatology,

in Mexico has grown only slightly in value over the past

respiratory, oncology, and cardio metabolic. We also have a

five years, by about 2 to 3%, but it has grown considerably

strong research arm that is currently conducting studies on

in volume, at more than 20%, due to the introduction

arthritic pain and biotechnology. Our strategy in Mexico has

of generics. Generics have allowed the government to

differed slightly from our general global strategy as we began

significantly reduce their medicine expenditure, negotiate

with only a single prescription product for dermatology

better prices, and provide treatment to more patients,

and a dermocosmetics line. From that point we prioritized

therefore acquiring resources to finance other medical

the creation of operations, stimulation of cash flow, and

projects. Two years ago we sold exclusively to the retail

submission of a diversified product line. In Mexico 20% of our

market, whereas today, we sell 80% to the retail market

products are innovative, and some are patented, while the

and 20% to the government. Our goal is to reach 60%

remainder of our local portfolio consists of branded generics.

within the retail market and 40% within the public sector.

Q: What were the biggest challenges you encountered

Q: What are your expansion plans?

establishing a product base?

A: Glenmark Pharmaceuticals was recognized as the Best through

Company Across Emerging Markets and Best Overall

distributors, and gaining the support of key investors in

Pipeline in 2011. We will keep working to obtain greater

Mexico has been extremely difficult. Several investors

market share, mainly in the dermatology and respiratory

have had negative experiences with companies originating

areas, which are our strongest at this point. We will expand

from India or China, some of these companies entered the

our oncology portfolio, as well as other areas such as

Mexican market temporarily and subsequently withdrew

diabetes and cardiology, which are both important divisions

their products. Convincing companies of our long-term

for Mexico. Glenmark will also continue researching its key

investment viability was problematic. The other issue is

therapeutic areas and we will seek other areas to expand

that India, China, and Korea all represent manufacturing

on. We also plan to expand specific business lines within the

threats to local industry and the main way for the local and

government sector, since we have an extremely well defined

international industry to protect itself against competition

strategy in the public sector. Glenmark Mexico has grown

has been through perpetuation of the preconceived

more than 250% in terms of personnel in the last four years

negative image of foreign products. However, we recently

and at an increased rate in terms of sales.

132

The

Mexican

market

operates

mainly

| VIEW FROM THE TOP

LOCAL SUPPORT FOR FOREIGN MARKET ENTRANTS LUIS ABEL ZERECERO MAĂ&#x2018;ON Director General of Laboratorios Keton Q: What market requirement did Laboratorios Keton set

company using raw materials with uncertain origins or a

out to fill and how has the market changed?

company that fails to meet quality standards.

A: Laboratorios Keton started out as a manufacturer of generics and now works mainly with assembly laboratories

Q: What is your main production strategy?

on behalf of between eight and ten foreign companies,

A: Today we are mainly dedicated to assembly, which

some of which are market leaders. Currently, Laboratorios

represents 80% of our income with the remaining 20%

Keton has 140 employees, some with almost 35 years of

coming from the laboratories we represent. In Mexico,

seniority, of which 26 are highly specialized technicians.

active ingredients are rarely produced, mainly originating

Previously, no specialization was required from employees,

from India or Italy. Currently, COFEPRIS is carrying out

the only requirement being a minimum knowledge of

an in-depth audit of all the distribution and storage

the pharmaceutical industry. The situation has changed

companies in order to ensure that they have specific

drastically, and today highly qualified specialists are

facilities to accommodate the pharmaceutical industry,

required in each division of the company. There was also

such as refrigeration chambers, and that they follow all the

a lack of regulation within the industry and now we are

necessary requirements in handling the drugs.

directly regulated by 20 different authorities. COFEPRIS is currently carrying out an in-depth audit of all distribution

Q: How has your production strategy changed?

and storage companies in order to ensure that they have

A: We currently manufacture beta-lactam antibiotics and

specific facilities to accommodate the industry. Many of

oral cephalosporins in two different areas within the same

the national companies have merged, and others have

plant, but we are trying to integrate both areas. We only use

been absorbed by international companies. For this reason,

well-known laboratories that comply with all the COFEPRIS

there are sufficient skilled individuals in the country to

guidelines in order to eliminate potential risk for ourselves

promote the development of the industry.

and our clients. Moreover, if the product encounters a manufacturing problem or fails quality control testing,

Q: How do you help companies enter the local market?

we are responsible for that product and we are therefore

A: Laboratorios Keton has represented several foreign

obliged to cover the corresponding costs, so the substitute

companies over the last 12 years, providing not only

laboratory must be approved by us as well as by our main

representation and legal support, but also manufacturing

client. At the moment there are few laboratories dedicated

facilities. We implemented this business plan as a reaction

to assembly since much greater profit is generated by the

to the local plant rule. As a result, many foreign companies

sale of the product than by its manufacture.

could only operate through hosts in the country, who registered brands on their behalf under a domestic company

Q: What are your plans for expansion of Laboratorios

name. We have worked within the pharmaceutical industry

Keton?

for approximately 56 years, so the company name generates

A: We are considering opening a new plant within the

trust within the pharmaceutical world. We also ensure that

next five years in order to manufacture mainly antibiotics

the products we import fully comply with all quality control,

and possibly oncology medications and other high

labelling, and security requirements in the country of origin

specialty products, which will require an investment of

as well as in Mexico. Legally the registrations belong to

approximately US$5 million. We are also bringing our

Laboratorios Keton but we have an agreement in which we

own products to market, but this will be a long term plan

pledge to return the registration when requested or at a

since this would currently place us in direct competition

specified point in time. In order to begin collaboration, we

with our own clients. We are planning to locate 60-80%

have a policy of visiting the main offices and manufacturing

of the investment for the plant from public funds, such

plants of a given company. Under no circumstances do we

as CONACYT, due to a general lack of private funding

take unnecessary risks by agreeing to collaborate with a

sources.

133

| VIEW FROM THE TOP

UNIVERSALLY ACCESSIBLE INSULIN TREATMENTS JUAN FRANCISCO HERNÁNDEZ Vice President Latin America of Wockhardt

Q: What role is Mexico playing in Wockhardt’s global

Q: Who do you mainly sell to in Mexico?

strategy?

A: We sell both to the government and to the private

A: Wockhardt has a suitable portfolio for chronic diseases

sector. In the private sector we sell mostly to pharmacy

so Mexico was a logical step for us, since the country

chains, working directly with them so that we can set the

takes the lead worldwide in several chronic diseases such

final price for each of our products. Today 60% of our sales

as diabetes and this is the first epidemiological problem

go to the government but I would like to increase our sales

in Mexico. Our local portfolio is exclusively focused on

to the private sector to 60%. One of Wockhardt’s goals is

this and consists of insulin and oral antidiabetics. In

to make insulin treatments accessible to everyone and we

June 2012 we established the Wockhardt Latin American

have an international foundation that aims to make insulin

headquarters in Mexico, and at this point all sales in Latin

accessible to low income diabetics worldwide.

America are directed through Mexico. Q: What key innovations are you bringing to market? Q: What was the company’s strategy to position itself in

A: We have a R&D facility that produces innovative products

the market?

and in Mexico we have introduced Wosulin Dispopen, a

A: Wockhardt is in charge of its own representations and

single use, affordable, insulin dispenser. This pen, which

distribution as we do not currently have any lcoal joint

was developed and patented by our company, facilitates

ventures We produce mostly branded generics but we

the delivery method and simplifies their treatment. Patient

also have an R&D department which will launch three new

acceptance is very important in this market and we

antibiotics in the next two years. We are also an innovative

observed that patients followed their treatment using this

company for biotechnology products and have our own

product. Our goal is to introduce this pen to each Seguro

plant to develop APIs for insulins, which helps us to

Popular office in every state to present its advantages and

maintain competitive costs. We also need to be prepared

its moderate price in comparison to vials. The problem is

for the fact that diabetes will worsen for future generations

that to work in the public sector a medicine has to enter

and attempt to change the current culture with disease

the National Formulary, which may take up to three years.

prevention strategies.

We have been in this process of submitting this product for approval for about a year and it may take about one

Q: As an Indian company, what barriers did you have to

more year for it to be accepted.

overcome to enter the Mexican market?

134

A: Indian and Chinese companies have a negative reputation

Q: What are your most important short-term expansion

in Latin America and we needed to convince authorities and

plans?

doctors of the quality of our products. Currently, Mexican

A: We want to expand to include central nervous diseases

manufacturers use raw materials from China or India, since the

such as Alzheimer’s, epilepsy, Parkinson’s, and oncology

local API manufacturing business has basically disappeared.

products. We have a solid portfolio of medicines for

Most companies focus on importation and commercialization

these diseases and therefore, we believe that we can fill

of APIs and approximately 80 to 90% of the raw materials

this gap. Our brand is strong enough to provide many

come from either of those countries. One of our main

national and international companies with products

strategies is to have all plants certified to comply with the

with the same API but under different brands. In Mexico

regulatory guidelines from the largest regulatory authorities

we produce insulin for two of our own brands and also

around the world, including FDA, TGA, COFEPRIS, and MISA.

for GlaxoSmithKline. These two products are targeted

We want to be seen as a reliable company, trusted by doctors,

towards type I and II diabetes. This year my priority is

so we invest considerably in clinical trials. Wockhardt has its

to consolidate our diabetes portfolio in Mexico and to

own CRO in India that performs our bioequivalence studies

launch other antidiabetic products. We want to increase

and more than 150 clinical trials a year.

our profits in Mexico to US$20 million this year.

| VIEW FROM THE TOP

SAVVY STRATEGIES FOR A FRAGMENTED MARKET JOSÉ ÁNGEL GARCÍA HINOJOSA Marketing Vice President of Loeffler

Q: What are Loeffler’s main product lines and what is your

evolved and now pharmacies are obtaining larger discounts,

approach to developing these?

sometimes up to 50-70%, transforming the market and

A: Loeffler, part of the Grupo Loeffler Russek group, was

lowering prices. Today it is unusual for pharmacies to

created 15 years ago. The Loeffler brand focuses on generics

operate under the “market of three” approach as selling

and veterinary, Russek on manufacture, and Farmacenter

products at the lowest possible price while generating the

as a distributor for the health sector. Since 2000, Loeffler

highest possible profit is the main aim.

has seen double-digit growth every year and our business doubles every three years. Our line of OTC products is our

Q: What do profit margins today look like in comparison to

largest in terms of numbers but lowest in terms of value. The

past structures and how do you choose your distribution

price for OTC generic products is comparatively low and our

avenues?

products sell 40% cheaper than the originals. While we sell

A: The sale of branded medicines may leave the producer

a lot of these products, they represent just 8% of our profits,

with a 30% profit while the sale of generics may leave a 70%

even though these products grow by about 25% per year. We

profit, but the prices of generics are low in comparison. Our

work exclusively with salesmen, distributors, and pharmacies.

laboratory sells products at a much smaller price than any branded medication, which fits within our goal to sell high

Q: To what extent are the changing dynamics within the

quality products at an accessible cost. Additionally, some

point-of-sale area also impacting the market?

companies are starting to eschew distributors and prefer

A: It is apparent that the market is shifting towards

to negotiate directly with the point of sale. While our core

pharmacy chains but small pharmacies are still in

business is through distributors, we have been approached

demand by the general public. The market is constantly

directly by pharmacy chains. The market for distributors is

changing with old pharmacies closing and new ones

still very large and strong however. Many new companies

opening, although the market is too large for pharmacy

are starting to create small pharmacy chains with five

chains to completely overtake the competition and small

to eight branch offices, mainly for generics. This area is

pharmacies are creating alliances between themselves.

quickly growing and starting to become our core business.

There is strong competition coming from Chinese and Indian pharmaceuticals, which produce generics in high

Q: In what way have you structured your sales strategy?

quantities and at low costs. While competition is fierce,

A: Sales to the government represent between 15-18% of our

this represents an opportunity to improve processes and

total sales. The rest goes to major retailers selling own brands.

infrastructure and offer products of superior quality.

We also sell to pharmacy chains, to generics pharmacies, and manufacture for large laboratories. Producers approach us

Q: How would you characterize the local distribution

as they know that our plants follow strict safety and quality

market?

regulations. Manufacturing for international pharmaceuticals

A: Distributors have different approaches depending on

was our core business, but we have been slowly abandoning

their size and clients. The two largest distributors work

this, as it is more convenient for us to produce generics and

with the five largest wholesalers, and they work mostly

OTC products. This was an internal strategic decision not

with brands. Regional distributors work mostly with

brought about by market shifts. While many international

generics. There are about 800 regional distributors in

pharmaceuticals are closing their manufacturing plants,

Mexico and of those about 25 stand out from the rest. The

more generics producers are entering the market. The

commercialization process of generics is very different from

generics market is growing enough that gradually generics

branded medicines, and has been known as a “market of

are starting to resemble branded pharmaceuticals. For

three.” A third of the utility is for pharmacies, another for

example one of our main products started selling at a rate

distributors, and the remainder for manufacturers. This was

of 70,000 units and now sells from 250,000-300,000 units.

how the generic market was conceived but it has gradually

People recognize it and request it by name.

135

OTC MARKET EXCEEDS GROWTH PREDICTIONS The presence of more pharmacies per head in Mexico

increase in profits in 2013 as a result of introducing two

than

regulatory

new products into the market, Neurobion and Floratil. The

environment, and high level of foreign investment has

OTC market is propelled partly by longer life expectancies

created formidable pharmaceutical and medical devices

and an aging population, hand in hand with a strong

markets. Expected to be worth US$27.9 billion by 2020,

domestic production industry, and a favorable regulatory

according to GlobalData, Mexico’s healthcare industry

environment. Pharmaceutical companies may also seek

engages over 350 domestic and multi-national companies

to exploit switch opportunities (the formal process of

in the manufacture of pharmaceutical products in Mexico.

switching a prescription-only medicine to an OTC medicine)

As a result, consumers increasingly understand the power

to protect revenues from branded drugs that are about to

of the active ingredients, rather than brand, and buying

lose their patent protection and take advantage of newly

products at lower prices contributes to the growth of store

available channels such as supermarkets and the internet.

any

other

country,

improving

brands and generic products within OTC medicines. Many drugs previously restricted to prescription-only status,

OTC MEDICINE CATEGORIES

are becoming available over the counter. These products

Category

2012 (US$ millions)

AAGR 2013-2017 (%)

are considered safe, and their increased use indicates that

Health Care Products

4.6

and taking some of the financial burden of drug treatment

Analgesics

301

1.3

Sleeping Pills and Relaxants

1.8

Cold and Cough Medicines

649

3.4

Stomach Conditions Relief

461

4.3

Ear Conditions Relief

0.0

Eye Conditions Relief

3.7

Dermatological Products

337

2.8

Smoking Cessation Aids

2.1

Injury Treatments

0.8

patients are taking greater responsibility for their own health from public and private health systems and insurance companies. Mexico’s OTC medications have experienced a tightening of regulations partly in response to an increase in drug-resistant strains of infectious diseases. In the past, patients without adequate supervision have taken improper doses of antibiotics, causing diseases to mutate into stronger strains untreatable with existing vaccines or antibiotics. Nevertheless, while authorities do not want to discourage sensible out of the pocket spending, COFEPRIS regulations seek to protect the population from irresponsible use of products, and the increasing numbers of doctors at points of sale provide guidance to minimize self-medication.

Source: ProMéxico

The population could continue to see growth in over the counter medications, benefitting patients with low incomes as a result of more competitive prices, as well as companies that wish to enter into the Mexican market with

An estimated 1,187 brands of OTC products were reported

the assurance that the sector will continue to expand in the

in 2012 to be on sale in Mexico, compared to 700 brands

short to medium term.

in 2007. In Europe and North America, strategies to encourage consumers to treat minor ailments without aid from state infrastructure and public finances require a complex partnership between government agencies, healthcare professionals, pharmacists, and retailers. In the Mexican healthcare industry, top pharmaceutical companies such as Genomma Lab mostly deal with generic drugs, exemplified by the almost 500 new brands of OTC products in just five years. In 2014 Electrolit, Aspirina, Next, Tempra, Sal de Uvas Picot, Suerox, Vitacilina, Pedialyte, Alka Seltzer and Agrifen accumulated the greatest sales volume in units in Mexico, while Merck, Genomma Lab and GlaxoSmithKline continue to acquire more OTC products. Merck reported a 55%

136

| VIEW FROM THE TOP

OTC MAMMOTH LEADING ORAL HEALTH EDUCATION JULIO BARRIOS School Program & CSR Coordinator, Colgate

Q: Dental health is usually relegated as a cosmetic

City, Morelia, Leon, Monterrey, Guadalajara, Puebla,

problem by different institutes of health – what can be

Veracruz and San Luis Potosi. We are also expanding

done to change this perspective?

the program to incorporate isolated rural communities

A: This perspective can be changed by analyzing the

with the help of different Universities and the ADM, as

severity of the consequences of poor dental health

well as that of our eleven ambassadors that are able to

that affect people in a biological, psychological, and

provide treatment to approximately 1,000 children per

social way and the relationship of these factors to other

day in these areas.

diseases such as diabetes. Unaddressed oral problems, such as cavities, can lead to extremely expensive

Q: Are you collaborating with public or private health

treatments, absenteeism in the workplace, and at times

institutions to create similar programs?

even fatal complications. Colgate is working with other

A: Colgate is collaborating with the organization Reading

institutions to provide education programs on basic

is Fundamental to promote Healthy Bedtime Habits,

dental health for patients. We are also implementing the

although this has yet to be implemented in Mexico. We

“Saludarte” program for health professionals alongside

promote healthy habits through Bright Smiles, Bright

the Mexican Dental Association (ADM) and the Ministry

Futures by focusing on daily brushing that includes hand-

of Public Education (SEP).

washing, exercising, teeth brushing, and following a healthy diet. For this purpose, Colgate works closely with several

In this initiative, we train teachers from different

government agencies, governmental dependencies, and

Universities, like the Autonomous University of Mexico

other private organizations. These institutions include the

(UNAM), about daily brushing, dental emergencies, and

Integrated Family Development (DIF) from Mexico City

general topics surrounding oral heath so they can share

and Puebla, the Mexican Ministry of Health (SSA), and the

their knowledge with their students and patients. We are

Alliance for a Cavity Free Future. Colgate is promoting

collaborating with oral health education departments

the Global Handwashing Day and through Bright Smiles,

in schools by offering different videos that teachers

Bright Futures we promote hand-washing, due to a firm

can use to show the students how to brush their teeth.

belief that oral health is multi-faceted and constitutes

Colgate also distributes flyers and brochures at schools

more than just teeth brushing. Therefore, we encourage

with different teeth brushing techniques and all the

other healthy habits to prevent bad hygiene and therefore,

necessary information to help the parents provide an

diseases.

appropriate oral education to their children. Q: Is Colgate planning to create more programs of this Q: When was the global Bright Smiles, Bright Futures

type?

program implemented in Mexico and how many children

A: Colgate is planning to expand on existing programs,

have you treated in the country?

through

A: This program has been active for 25 years, and

governmental institutions, the private sector, schools,

throughout that time, over 40 million children have

universities, and other dental health professionals. We

benefitted from its implementation. Over the past four

believe in a continuous improvement and the creation

years, the average number of children that have received

and implementation of new material that will be more

treatment has been 2.2 million per year and Bright Smiles,

appealing to people and schools. Our main goal for this

Bright Futures has now increased its coverage. We are

year is to create a culture of daily brushing and to change

working closely with various oral health specialists and

ingrained perceptions regarding oral health. We plan to

private and governmental institutions to help us attain

help over 2.3 million children with our programs and to

our goals. This program is currently being implemented

reach a larger demographic by providing donations of our

in different towns around the country such as Mexico

Colgate NeutrAzúcar toothpaste.

enriching

the

support

given

different

137

SOLID MARKET FOR GENERIC ALIMENTARY SUPPLEMENTS In 2000, Industrias Suanca was founded as a generics

The company is also beginning to sell via a Farmacias del

pharmaceutical laboratory and today the company offers

Ahorro initiative called Diabetics’ Corner. Walmart is the

a wide range of products including injectable medications

largest distributor of Suanca medications and supplements,

and tablets, and has now expanded into alimentary

and so convinced of the strength of the Suanca’s products,

supplements. In accordance with Good Practice Regulations

the supermarket giant would like to acquire the formulas to

laid out by COFEPRIS, Suanca separated these two lines,

produce an own brand version. López says that the company

contracting a third party to manufacture the supplements.

has no interest in selling the brand, but points of sale remain

The separate company was named Vitapromin, allowing

limited. As a result of the distribution costs involved in selling

the separation of these two elements, and enabling the

directly to small pharmacies, the first sales point is usually

new company to sell under the Codifarma brand.

the Central de Abastos market place, from where products

“The advantage of working with the government is the quantities ordered by public institutions, often tenders of more than a million units” José Luis López, Director of Administration and Finance for Industrias Suanca

José Luis López, Director of Administration and Finance for

are resold to private doctors and small shops, making sales

Industrias Suanca, explains that the company principally sells

monitoring complicated.

to the public sector. To be able to sell to the private sector the company would have to invest heavily in advertising,

Suanca works with an external assembly plant to package

slowing long-term growth. The company operates a full

their products. High standards of production and hygiene

line of products born from the Vitapromin supplement,

must be assured beforze contracting any health sector

which consists of a combination of vitamins and other

distributor. Industrias Suanca also monitors raw materials

nutrients, both in powder and liquid forms. Subsequently, the

and attains certified products, as well as employing

company has created more products aimed at the private

a quarantine periods. However, the conservation of

market including Vitapromin Kids, and GlucoPromin. The

high quality standards is not difficult for the company,

two product launch into the private sector has been slower,

due to experience following more stringent quality

yet GlucoPromin has assumed a position in the market,

measures selling

largely due to its reasonable price in comparison to direct

model requires to very clear registers to monitor the

competitors, whose products tend to be imported and

production value of each product, manufacturer, price,

in liquid form, which is more costly to transport. The high

and sales. Being able to access these documents allows

number of diabetic patients requiring this type of medication

the company to check patents and understand which

maintains a constant client base.

products are being developed. Suanca intends to develop

pharmaceuticals. Suanca’s

business

new food supplements, having witnessed the success The biggest competitors facing Industrias Suanca are

of Glucopromin. This will include specialized products

international companies, possessing a considerable body

for expectant mothers to meet calcium and folic acid

of merchandisers with hundreds of medical representatives.

requirements, as well as a new supplement for mature

While the Mexican market is heavily oriented toward brands,

adults, requiring a new line of investigation and innovation.

the equivalent product Ensure is priced much higher, limiting

138

access for some customers out of which Industrias Suanca

In the future the company hopes to expand into

has built a strong client base. A customer can save 25% of the

promoting their products directly to doctors via

cost of buying Ensure, which retails at at US$74 per month.

medical visitors as well as through new collaborations

Although Ensure currently occupies 95% of the market,

with pharmacy chains, as impulse buys when displayed

customers continue to demand lower prices and Industrias

at the point of sale or as complements to prescribed

Suanca is confident there is a market gap. Pharmacists

medicine. López insists that pharmacy collaborations

cannot recommend products with different ingredients to

will be the main focus for the medium term, because

those requested but doctors at the point of sale can prescribe

profound market research into points of sales is a long

a variant, which allows Suanca to penetrate the OTC market.

process.

| SPOTLIGHT

LIMITING ADVERTISING OF MIRACLE PRODUCTS

by celebrities to incite the public to buy immediately using

â&#x20AC;&#x153;Miracle products,â&#x20AC;? promising everything from weight

limited time offers.

loss and reversing aging to curing cancer, diabetes, osteoporosis, and many other diseases, lack the clinical

2012,

the

General

Health

Law

Regulation

studies necessary to support their claims. They come in

Advertisement (RLGSMP) was modified to regulate

many forms, including creams, medications, supplements,

the publicity of OTC products and eliminate products

infusions, and even exercise equipment and are usually

with unverifiable claims. These regulations obliged TV

accompanied by media campaigns on radio, television,

companies to request sanitary registration before selling

and magazines. Miracle products are not subject to any

advertising spaces and to notify the Ministry of Health

type of tests nor have they been examined by Mexican

on every sold spot. It also allows the Ministry of Health to

regulatory authorities. Moreover, their manufacturing

force media to suspend the advertisement of any product

process has not been inspected with the same scrutiny

violating these regulations within 24 hours and increases

applied to pharmaceuticals and some may contain toxic

fines from 60% to 400% for manufacturers, distributors,

ingredients.

and traders. Fines can now reach up to 16,000 days of minimum wage.

Every medication must complete rigorous clinical trials so that its safety and efficiency can be approved by

COFEPRIS is responsible for regulating the market and

COFEPRIS before reaching the market. OTC medications,

enforcing this law and after the reform was implemented,

which do not need a prescription, are the only products

the council created a mechanism called Copy Advice,

which can be advertised. Before 2012, due to loopholes

which is a tool to pre-analyze advertising projects before

in Mexican legislation, these products were allowed to be

submission to COFEPRIS.

registered as nutritional supplements, herbal remedies, or beauty products, all of which are subject to fewer

The organization has also made several agreements with

regulations than medicines. Since they promote their

CANIPEC and PROFECO to enforce this legislation and in

ability to cure numerous diseases at an affordable price,

2011 it eliminated adverts from 60 brands. According to

they became extremely popular among the general

COFEPRIS, from 2011 to 2015 a total of 2.5 million units of

population, risking exposure to undocumented side

miracle products were banned.

effects and potential toxicity. Despite

the

changes

regulations

limit

their

Since these products are not prescribed by physicians they

advertisement, the general public continues consuming

base their publicity entirely on television, radio, magazines,

these products. In order to solve this problem, stronger

and newspapers, and are generally aimed at middle aged,

enforcement of regulations may be necessary alongside

middle class individuals looking for fast solutions for

educating the general public on the dangers that miracle

complex problems. On television they are usually endorsed

products present.

TRENDS IN MIRACLE PRODUCT PURCHASING AFTER NEW REGULATION FOR ADVERTISING

58 52

CANIPEC agreement 47 41

Copy Advice starts

PROFECO agreement march 13, 2012

40 31

30 Suspension orders and advertisement rejections

Creation of and reforms to General Law of Health Regulations on Publicity Matters

10 0

feb11

mar11

apr11 may11

jun11

jul11

publication

enforcement

Assurance to CV Directo and Innova

aug11 sep11

6 1

oct11

nov11 dec11

jan12

feb12 mar12 apr12dec12

2013

2014

Source: COFEPRIS

139

The biotechnology industry in Mexico is growing at an annual rate of 25% and employs an

estimated 25,000 people. The discovery of the genome and its relationship to illness is leading to major investments into targeted therapies that address underlying causes of disease and its pathways. Industry professionals throughout Mexico agree that biotechnology will compliment the disease treatments of the future and be pivotal in supplying healthcare needs. With a complete regulatory framework for biopharmaceuticals and their subsequent versions after patent expiration, called biocomparables, Mexico is ready to grow in a market that already represents 35% of all new drug registrations.

This chapter will discuss the current state of the sector and its main drivers including regulation. An overview of the biotechnology clusters will be provided together with insights on the development potential of the market from the key industry players. Remarkable developments in the fields of genomics, personalized medicine, and regenerative therapies taking place in Mexico will be addressed along with an assessment of the remaining measures needed to enable Mexico to reach its potential.

HIGHLIGHTS • Role of Biotech in supporting the future demand for medicine • Research clusters • Regulatory framework for biopharmaceuticals • Genomic and personalized medicine • Regenerative medicine

BIOTECHNOLOGY

PHARMACEUTICAL & BIOPHARMACEUTICAL INDUSTRY

PRECLINICAL STUDIES

BIO-EQUIVALENCE STUDIES

FOOD ANALYSIS

ENVIRONMENTAL TESTING

RESEARCH AND DEVELOPMENT

D. R. Instituto Politécnico Nacional (IPN), Unidad Profesional Lázaro Cárdenas, Prolongación de Carpio y Plan de Ayala s/n, Col. Santo Tomás, C.P. 11340, Delegación Miguel Hidalgo, México, D.F.

contacto@udibi.com.mx mperezt@encb.ipn.mx smpt.2011@hotmail.com udibi@ipn.mx T: 57296000 / EXT: 62557 y 62543

CHAPTER 6: BIOTECHNOLOGY 144

ANALYSIS: Undisputed Potential for Biotechnology

145

INSIGHT: Dr. Eduardo García-Luna Martínez, UDEM BioCluster

146

VIEW FROM THE TOP: Sandra Sánchez y Oldenhage, PROBIOMED

148

INSIGHT: Dr. Carlos Eduardo Medina de la Garza, CIDICS UANL

150

INSIGHT: Dr. Cristóbal Noé Aguilar, SMBB

151

ANALYSIS: New Norm to Clear Pathway for Biopharmaceuticals

152

VIEW FROM THE TOP: Dr. Gerardo Jiménez Sánchez, GBC Group

154

EXPERT OPINION: Dr. Hugo Barrera Saldaña, Vitaxentrum

157

VIEW FROM THE TOP: Dr. Hugo Barrera Saldaña, Vitaxentrum

158

VIEW FROM THE TOP: Jesús Esparragoza Fox, ReHealth

160

VIEW FROM THE TOP: Elvin Penn, Amgen

161

SPOTLIGHT: Third-Party Authorized Centers for Biocomparability Studies

162

LABORATORY SPOTLIGHTS: INMEGEN | UNAM IBT | UDIBI

163

SPOTLIGHT: Biotechnology Clusters: Nuevo Leon, Jalisco, Morelos, and Guanajuato

164

VIEW FROM THE TOP: Dr. Gustavo Cabrera, Global Biotherapeutics

166

VIEW FROM THE TOP: Alejandro Calderón Díaz, Grupo IFACO

168 INSIGHT: Dr. Juan Padierna, LEI 169

INSIGHT: Enzo Gravina, Bioconnect

143

UNDISPUTED POTENTIAL FOR BIOTECHNOLOGY Biotechnology, defined as the use of cells, cellular

A significant drawback of biotechnological drugs is that

components, and biological processes to develop new

they can be much more expensive than conventional

technologies, has numerous applications in many areas

therapies. Prolonged timeframes required to identify the

including industry, agriculture, and healthcare. This area is

target therapy and determine its genetic sequence, create

rapidly developing and in 2013 the market worldwide was

the need for greater investment in biotechnology R&D than

valued at US$270.5 billion and is expected to grow at a

conventional drugs (20%-25% of revenue in comparison

compound annual growth (CAGR) rate of 12.3% from 2014

to 15% according to EuropaBio). Taking into account

to 2020, according to Grand View Research. One of the

the complexities in developing new biotechnological

strongest areas of biotechnology is biopharmacy, which

drugs

and

represented 62.1% of revenue in that same year. This area is

large

pharmaceuticals

followed by bioservices (24.7%), which refers to the use of

companies in order to economize on development

biotechnology in preclinical and clinical research. Among

costs, and biotechnology companies are implementing

the reasons for the growth of this market is the current

manufacturing and commercialization schemes. Smaller

trend from international pharmaceuticals to launch their

firms are also collaborating with pharmaceuticals or

own biotechnology products, either by creating their own

academic institutions to fund R&D. Investments in R&D

biotech division within existing companies or by acquiring

in medical biotechnology are expected to grow by 4.2%

biotech firms. In 2018, seven of the 10 top-selling drugs will

annually and reach US$30.5 billion in 2020, according to

be biopharmaceuticals. Large biotechnology companies

IBISWorld.

replicating are

their

manufacture,

acquiring

many

biotechnology

such as Novo Nordisk and Amgen are now powerful players in the pharmaceutical sector due to the strong link

Mexico has more than 20 years of experience in the

between biotechnology and the drug discovery process.

biotechnology industry with over 132 products registered.

While the mayor players in the field are based in Europe

The industry now represents 35% of the applications for

and the US, biotechnology production in India, China,

new medicines, according to COFEPRIS. Most of these

and other emerging countries has expanded by double

medications are intended to treat cancer, rheumatologic,

digits over the past few years, leading pharmaceuticals to

and neurological diseases. Mexico is focusing mainly on

outsource R&D to these markets.

biocomparables, also known as biosimilars, the generics

GLOBAL BIOTECHNOLOGY MARKET REVENUE BY SECTOR

of biotechnological drugs for which patents has expired. In 2015, 32 products with combined sales of more than US$50 billion will lose their patent, representing a huge

5.5%

opportunity

for

biocomparables

manufacturing.

Nevertheless, due to the complicated manufacturing

7.7%

biopharmacy

62.1%

process, which often requires live, genetically modified organisms, biocomparables require a much more complex

bioservices

manufacturing process than regular medicines. Several laboratories are undertaking this production including

bioagriculture

24.7%

Probiomed, Landstainer, Psicofarma, Liomont, and Pisa. Mexico is one of the few developing countries with a strong

bioindustrial

regulatory framework for biotechnological products and biosimilars. In 2009, article 222 Bis was added to the General Health Law to define the legislative basis for the regulation of biotechnological products and biosimilars. This legal

Medical biotechnology has brought many positive changes

framework had several loopholes as many medications

to the practice of medicine, leading to new ways to design

were registered as conventional generics in order to avoid

and produce medications targeted at a molecular level, the

implementing compliance measures. Between 2009 and

development of more accurate tests for disease diagnosis

2014, around 65 products were registered as generics

and even genetic and proteomic tests for disease

under less strict regulatory requirements, but in December

prevention, and the possibility to use gene therapy to cure

2014 the publication of the Mexican Official Norm 257 led

diseases previously considered incurable. Biotechnology

to their reclassification and demanded producers perform

also brings the promise of personalized medicine, which

necessary biocomparable studies. Currently, all biosimilars

will allow tailored therapies for individual conditions and

must prove their safety and efficacy, as well as their close

needs.

similarity to the reference product.

Source: Grand View Research 2014

144

HOLDING ON TO BIOTECH TALENT IN MONTERREY Nine years ago, through combined efforts from the

dangerous viruses and bacteria. Among their projects

government, universities, and interested parties from the

are new preventive treatments for the dengue virus and

private sector, the Monterrey BioCluster was created.

HIV, such as a gel that prevents its transmission. The same

The initiative was originally conceived to compliment the

laboratory is exploring the genetic map of Mycobacterium

development of biotechnology in Monterrey, solidifying

tuberculosis, investigating how it becomes resistant to

it as a strategic economic industry. Its pioneers set

antibiotics in order to develop a cheap treatment and

objectives to group small companies entering the sector,

to prevent its transmission. Treating antibiotic-resistant

transfer global knowledge to Monterrey, attract qualified

tuberculosis can cost up to US$750,000 per person, so

professionals to develop innovative products, and create

reducing these costs would remove a substantial drain on

public awareness of the importance and versatility

public health spending.

of biotechnology. The cluster is now well positioned to communicate the importance of the sector to the

As well as investing in the eradication of infectious

government, as well as to provide its member companies

diseases, the university’s School of Medicine and Medical

with the necessary knowledge for expanding.

Specialties is not neglecting chronic disease. Clinical trials and research projects in multiple locations are investigating

As Director of the Health Sciences Division of the

certain chronic diseases.

University of Monterrey (UDEM) and President of the Biotech Cluster, Eduardo García-Luna seeks to integrate

The School of Dentistry is contributing to the battle against

different areas of the health sector into a development

chronic diseases, as people with non-controlled diabetes

program for the region. García-Luna’s personal goal is to

or chronic metabolic syndrome generally have poor oral

increase awareness and innovation in every area related to

health. Nutrition also performs an essential role in the

biotechnology, including health, energy, garbage disposal,

prevention of chronic diseases, so UDEM is managing an

and food, because he believes that biotechnology can be

education project to help the development of communities

harnessed to solve a multitude of problems. He also plans

and allow people to have a balanced lifestyle.

to expand the number of companies in the cluster from 35 to 40 before stepping down. One of the cluster’s goals is to reduce the timeframe between a product’s introduction to the market and its point of sale, as well as to avoid unnecessary approval expenses, such as repeated procedures. To address this, UDEM and other institutions are working on a process to apply efficient transfer of technology models from other countries to Mexico. This analysis of tried and tested strategies helps optimize resources and saves valuable

“The objective of the BioCluster is to gather the strength of all small companies, attract

transfer

qualified

knowledge, professionals

to develop innovative products, and create public awareness of

time.

the importance and versatility of

The government recently pledged to increase R&D

biotechnology”

investment from 0.54 to 1% of GDP, which will be granted through funding programs from CONACYT among other

Dr. Eduardo García-Luna Martínez, Director of the Health Sciences Division of the University of Monterrey (UDEM) and President of the BioCluster

institutions. Both the cluster and UDEM collaborate with CONACYT, receiving funds for startups and for the creation

Mexico has seen certain clusters succeed and others fail,

of intelligence within the sector. Meanwhile, UDEM is

but in the health sector, the successful clusters have been

working closely with CONACYT and other funding centers

those that promote integration and education within the

in Mexico to promote basic science, as other areas are

sector. The biggest challenge will be to change existing

more concerned with clinical trials and clinical research.

perceptions within the sector and persuade people that clusters allow a country to compete globally and

While these are perhaps more interesting areas, basic

share information. The Monterrey BioCluster is clear on

science key to keeping the whole pipeline moving. This

these objectives and Guadalajara has excellent clusters,

has led UDEM to host one of very few biosafety level

although there is still plenty of ground to cover in the

3 laboratories in the country, working with extremely

rest of Mexico.

145

| VIEW FROM THE TOP

SETTING THE GLOBAL BENCHMARK FOR MEXICAN BIOTECHNOLOGY SANDRA SANCHEZ Y OLDENHAGE Director General of PROBIOMED Q: After heading up Amgen Mexico, what prompted your

is now manufacturing and commercializing biosimilars.

move to local giant PROBIOMED?

Looking at the size of the market and the number of patents

A: I made this move for a number of reasons: the

expiring, the coexistence of innovative products with

challenge it represented, the prestige of PROBIOMED,

biosimilars is crucial for healthcare systems to be able to

and my desire to build a legacy by projecting a Mexican

meet future patient demand from a treatment perspective.

company that cares for health and patients. The founder

In this way, savings that arise from the use of biosimilars

of PROBIOMED, Jaime Uribe de la Mora, recognized the

can be further invested in innovative drugs. I expect the

need for evolution to propel the company forward, and

government will be forced to implement such strategies in

this will be part of his legacy. De la Mora started selling

the medium term.

APIs 45 years ago and moved on to selling generics and ultimately biosimilar products. He has reinvented the

Q: How can Mexico become more innovative and therefore

company and adapted to numerous market changes.

more competitive?

Today, PROBIOMED is the only company in Mexico that

A: This industry can be a real engine of innovation but is

produces biotechnology products from the gene to the

in dire need of an industrial development policy. Mexico

finished product, relying on four manufacturing plants

has the highest and second highest levels of childhood

and employing 1,300 collaborators.

and adult obesity respectively worldwide. Obesity causes cardiovascular diseases and diabetes, which means 70-

Q: What are the essential elements needed to progress

80% of patients will end up in dialysis and the system will

the company from a local family company to an

run the risk of collapsing. Biopharmaceuticals are mainly

institutionalized global player?

used for chronic and degenerative diseases as they are

A: First and foremost, we need to get the right corporate

more effective and are better suited to our physiology

governance and structure in place. It is vital to implement

than chemically synthesized molecules. However, this does

strategy, structure, and objectives in order to align

not exempt all players to from continuing to work on on

accountability

prevention strategies.

and

communication

throughout

the

company. Furthermore, by continuing to ensure ROI and by launching innovation and excellence strategies, we

Q: Where is PROBIOMED aiming to position itself in terms

can ensure that the company is capable of surpassing

of value proposition in this highly competitive industry?

the competition. Timing is also a key factor for success.

A: Today, PROBIOMED is the only company in Mexico

Being the pioneer in this field, and having launched 16

that is able to manufacture high-quality products at a low

biotechnology products in the last 17 years, PROBIOMED

cost. We develop from the geneâ&#x20AC;&#x2122;s inception to the final

has a competitive edge. The company is very proud of

medication, whereas most pharmaceutical companies

what we have accomplished in 45 years. Competing with

import finished products and very few import APIs to

big pharmaceutical companies is no easy feat and we

manufacture final products. In contrast to traditional

are now an industry leader that poses a threat to most

generics,

incumbents. With increased focus on patient needs, we

significant innovative processes, such as the genetic

plan to continue expanding as a global innovator.

engineering of living organisms, and the use of bioreactors

the

manufacturing

biosimilars

requires

for the production of proteins and antibodies. It is essential

146

Q: What role should biotechnology products play in

to promote local manufacturing so that Mexico does not

treating chronic and degenerative diseases?

become reliant on importation. PROBIOMED is also the

A: The market dynamics in Mexico are mainly driven by

only company in the world that has a complete portfolio

a demographic and epidemiologic transition that in turn

of medication for unmet medical needs such as cancer,

is putting pressure on everybodyâ&#x20AC;&#x2122;s budget. The biggest

rheumatoid arthritis, end stage renal disease, multiple

business opportunity in the biopharmaceutical industry

sclerosis, and diabetes.

Q: Is enough being done to push forward the development

from the market. However, we are undergoing a process

of the biopharmaceutical industry in Mexico?

of renovation where every company will have to submit

A: Mexico has made impressive progress from a regulatory

more data to support their registration as per NOM 257.

standpoint in a very short time. With the new benchmark

COFEPRIS has therefore granted a specific timeframe to

NOM 257 regulations, innovative biopharmaceuticals and

allow companies to conduct the necessary studies to gain

biosimilars will be able to coexist in the Mexican healthcare

approvals as biocomparables.

system, protecting patients’ safety and efficacy. Before the regulatory framework for biosimilars was developed, safety

Q: How important are exports to your growth strategy

requirements were not as strict as they are now. The new

and what obstacles stand in the way?

norm requires characterization and biocomparability studies

A: With the international recognition of COFEPRIS, it will

as well as safety and efficacy trials that demonstrate their

be easier for Mexican companies to penetrate markets

high similarity to the reference products. PROBIOMED fully

in Latin America. Our value proposition is being able

believes in this approach but the country is still not fully ready

to provide high-quality products at low costs, which is

for this in terms of infrastructure. If a full characterization

exactly what governments and patients are looking for.

study is required, no local supplier can do this in Mexico. The

We are currently exporting to 14 countries across four

Mexican industry needs more investment and support that

continents and we will expand this to countries with a real

will allow companies to meet regulatory requirements and

demand for our products. Unlike in Mexico, countries like

ensure quality standards.

Brazil, South Korea, India, Malaysia, and Russia incentivize the manufacturing of biotechnology. Since manufacturing

Q: Is PROBIOMED planning to perform the mandatory

plants require huge investments, we are still deciding which

studies abroad in order to gain registration renewals?

country would provide the best location. Strong incentives

A: We want to ensure we fully comply with the new regulation

include ten-year tax exemptions, a guaranteed percentage

as it impacts PROBIOMED at all levels of its process. For

of government contracts, and a price incentive in exchange

approval in Mexico, clinical trials can be done locally, but

for technology transfer through a local partner. Some

some tests will have to be outsourced internationally,

countries will even match 30-50% of the initial investment

such as physicochemical characterization. COFEPRIS will

as long as the company invests in the country.

evaluate this on a case-by-case basis and publish a set of requirements for a specific product, according to previous

Q: What does the foreseeable future look like for the

studies and available information. There are approved

biotechnology sector in Mexico?

third-party organizations for bioequivalence studies but

A: We are working with universities and research centers

that is not the case for biocomparability.

in Mexico and other countries such as Brazil, Germany, and Russia. We have 1,300 employees in Mexico and a

Q: What is your perception of the withdrawal of Rituximab

lot of them are highly qualified investigators. Today, the

from the market and how does this impact patients?

biotechnology industry is growing at around 25% a year and

A: PROBIOMED’s Rituximab was not withdrawn from the

will maintain a double-digit pace for the foreseeable future.

market due to a lack of quality or efficacy. It was due to

Interestingly, local companies are growing the most while

a legal situation in which the Supreme Court of Justice

the share of multinational companies is actually decreasing

entitled COFEPRIS to determine whether biosimilars

in Mexico due to the expiration of patents and the rise of

approved under previous regulation should stay on the

generics. Furthermore, while Mexico is lagging behind the

market, given the allegations of the innovator company.

US and Europe in terms of development, technological

Since there was no regulation for biosimilars at the time

advances will disrupt the whole industry’s dynamics in the

Rituximab was registered, COFEPRIS decided to revoke

medium term. As for genomics, it will take another two or

its registration until new regulations were in place. IMSS,

three decades for them to truly have an impact on patients

the biggest consumer of this drug in Mexico was spending

and the wider industry. Targeted medicines are central to

MX$1 billion on the innovative product on an annual basis.

the genomics revolution and specific drugs are starting

When Rituximab entered the market, expenses went down

to be developed and prescribed for certain types of

to MX$200 million with double the number of patients

cancer, replacing the standard chemotherapy treatment.

being treated. We are working closely with COFEPRIS to

This is the promise of personalized medicine, but a lot of

meet every single requirement, which represents a colossal

research is still needed. Unfortunately, the timeframe from

investment of time, money, and resources. As for the other

discovery to development is becoming longer as diseases

65 biosimilar products that were previously registered as

are found to be more complex than previously expected,

per the generics regulation, they will not be withdrawn

significantly increasing the required investment.

147

DEVELOPING INNOVATION THROUGH COLLABORATION With 34 centers aimed at building knowledge and

team investigating the potential effect of molecules and

innovation,

medicines which may be useful candidates for further

Nuevo Leon (UANL) is an integral part of Monterrey’s

research and development. “This work involves detailed

growing health cluster and the Center for Research and

projections and tracking to see if these molecules merit

Development in Health Sciences (CIDICS) is something

further investigation,” says Medina de la Garza. “Many

of a flagship in the university’s innovation strategy.

molecules are still protected by patents, and this extends

Founded in 2009 by Dr. Jesús Ancer Rodríguez, the

to specific usage of medicines. Securing patents is the

center’s watchword is integration. CIDICS’ research staff

first step toward using established medicines for new

is supervised by professors at UANL’s health sciences

purposes.”

the

National

Autonomous

University

schools, ensuring that research addresses the priority health needs of Mexico’s northeastern region. While

Not content to let innovation develop in isolation, CIDICS

CIDICS does have a strong biotechnology focus, its work

takes care to channel innovation and healthcare where it is

on genomics puts UANL at the vanguard of personalized

most needed. “Our public health department works closely

medicine in Mexico.

with IMSS and a number of hospitals run by the state’s

“The idea behind CIDICS was to build a dome under which we could bring together all of the university’s multidisciplinary laboratories in a spirit of collaboration, blending disciplines which had previously been thought of as separate” Dr. Carlos Eduardo Medina de la Garza, Director General of CIDICS, UANL

Secretariat of Health,” says Medina de la Garza. “All of their “The idea behind CIDICS was to build a dome under which

successful research is channeled into this collaboration,

we could bring together all of the university’s multidisciplinary

in the hope that policy will be based on our work.” The

laboratories in a spirit of collaboration, blending disciplines

work of CIDICS translates from the campus to the issues

which had previously been thought of as separate,” says

most directly affecting people living in Nuevo Leon, with

CIDICS’ current Director General, Carlos Eduardo Medina de la

extensive outreach campaigns in a number of municipalities

Garza. “All of our research now takes place in the same center,

throughout the state. Medina de la Garza describes the

meaning better laboratories and inventive installations. For

center’s outreach work with some pride. “We work on very

instance, clinical studies and biological models for medical

clear-cut issues, such as teenage pregnancy. We also run

testing exist side by side.” CIDICS has grown quickly, with 150

a working group on addiction and violence prevention

researchers and students comprising the center’s 18 working

programs. One of our highest-level doctors focuses her

groups. “The most important areas of research are genomics,

work on reintegrating addicts who are in recovery. This

molecular biology, and experimental therapy,” explains

is unusual for research centers, so we are proud of these

Medina de la Garza. “A lot of our research – particularly in

successful social experiments. The next step is to involve

gene therapy – is tested out at hospitals in Nuevo Leon. We

high-tech genetics studies in attacking diseases that

concern ourselves with the pre-clinical stage, while clinical

affect the population. In this way, we can connect genetics

testing takes place in the hospitals. At our University Hospital

research directly with health,” he adds, going on to mention

‘Dr. José Eleuterio González,’ we have done a lot of successful

three of the major chronic diseases affecting the Mexican

work on prostate cancer. The major advantage of CIDIC is that:

population: diabetes, obesity, and breast cancer.

our researchers work directly with doctors. Our commitment to integration means that our researchers belong to faculties

Certain barriers remain ahead. While the center’s medical

where they are working as professors. This interaction covers

capacity and infrastructure are not in doubt, Medina de la

all the main bases of our work, from medicine to odontology,

Garza acknowledges the distance to be run in attracting

from psychology to nursing, public health and nutrition, and

more medical tourism to the area. “We want to give foreign

biological and sports science.”

patients a greater sense of trust in our services. We need to strengthen our brand, both in other states and abroad,” he

148

Immunomodulators constitute one area of innovation

says. “We need state government policies to get behind us,

in which CIDICS is a leader, with the Center’s research

however, and to promote innovation. We already receive a

lot of US citizens, with many of them seeking transplants

regard.” Within CIDICS, however, the spirit of collaboration is

from Dr. David Gómez Almaguer, Head of the Hematology

strong. “What really excites me is the degree of cooperation

Service.” Another barrier is to get other members of

between schools,” Medina de la Garza says. “We share a

Monterrey’s health cluster to work in a spirit of collaboration

common purpose. All medical investigation requires deep

“A lot of the players tend to pursue their own interests,” he

involvement from the major players in that field, so we are

explains. “A sense of the greater good is important in this

lucky we to have a team which recognizes this.”

149

BIOTECHNOLOGY SOCIETY CONNECTING STAKEHOLDERS In recent years there has been a positive effervescence in the

Canada, ceasing to be just a service provider or source of

biotechnology sector in Mexico. As an important player in

raw materials.

Latin America, Mexico outpaces the rest in the development and application of innovative biotechnologies for agriculture,

“Bio-networks are already operating with the aim of

mining, biofuels, animal and human health, among others.

strengthening the sector, Aguilar states. He further explains that

clusters

promote

competitiveness

and

regional

Dr. Cristóbal Noé Aguilar, President of the Mexican Society

economic development based on certain local advantages,

for Biotechnology and Bioengineering (SMBB) explains

like natural resources and geographic conditions.

several government programs – CONACYT, SE, SAGARPA, SEP, SEMARNAT, SENER, state governments – are promoting

While they concentrate researchers and companies, perhaps

research, development, and innovation in this area, driving the

a more interesting feature is their capacity of generating spin-

generation of a new biotechnology industry. Micro, small, and

offs aimed at developing and commercializing innovative

medium enterprises have been created successfully. Most of

products, which ultimately contributes to economic growth.

them are important sources of bioproducts, fine chemicals, and biomolecules for pharmaceutical, food, agricultural, and

Mexico has several poles of biotechnological development

environmental sectors.

along the country. However, few of them have managed to achieve the creation of clusters and these are growing and

Although, most of the financial resources come from

becoming the drivers of the biotechnology industry. Some of

entities such as CONACYT, an important of number of

the clusters Aguilar considers the most relevant due to their

projects have been financed by complementary programs

remarkable work are BioCluster in Monterrey, Nuevo León,

supporting collaborations between enterprises, government,

Cluster BioTQ in Querétaro, BioBaja in Baja California, and

and academia, including high educational institutions and

the RedBlac, specialized in biotechnology for dairy products.

research centers.

They include more than 50 members such as important

“The biotechnological sector has been positively dynamic in recent years.

Several

governmental

offices have begun to stimulate research,

development,

and

innnovation in the area” Dr. Cristóbal Noé Aguilar, President of the Mexican Society for Biotechnology and Bioengineering (SMBB)

enterprises, universities, and research centers. “There is an enormous potential to strengthen the emerging clusters in Jalisco, Morelos, Yucatán, Sinaloa, Sonora, Veracruz, Coahuila, among others,” he adds. Large investments are done in training and high-quality scientific programs, while further promoting, improving, and multiplying the efforts made in the field remain important challenges. “Mexico is reaching unprecedented sustained growth of its biotechnology, taking significant steps in building its research and production capacity of modern biotechnology,” explains Aguilar. The SMBB gathers more than 2,000 members, many of them students and young

Aguilar identifies two major drivers for this industry. Firstly the

researchers, biotechnologists, and some well-known industry

government is committed to increasing investment in R&D,

professionals, who participate in improving public perception

with life sciences and biotechnology being two of the most

of biotechnology, the regulatory framework, and intellectual

relevant focus areas; secondly, the consolidation of existing

property protection.

clusters will promote the creation of new biotechnological

150

centers dedicated to R&D in the four areas of biotechnology:

Some of the activities of the SMBB are aimed at demanding

food, pharmaceutical, agricultural, and industrial. World-

new and better financing mechanisms by promoting better

class education programs in these areas are key to Mexico’s

workforce development. To achieve this, it is essential that

development. “Several under and postgraduate academic

the government and related public institutions as well as

programs are forming the biotechnologists and bioengineers

agencies adapt their policies and operations to meet the

of the future, who require new strategies to be hired by

changing needs. Finally, according to Aguilar, it is necessary

companies, academic institutions, and research centers,”

to continue to strengthen networking, knowledge sharing,

Aguilar adds. To achieve this, he stresses the importance

exchange of technology, and most importantly business

of developing a government plan for Mexico to become

investment, for all actors to get involved in supporting the

an equal and efficient partner to Europe, Asia, USA, and

growth of this sector.

NEW NORM TO CLEAR PATHWAY FOR BIOPHARMACEUTICALS On December 11, 2014, Mexican Official Norm NOM-257-SSA1-2014 was published in the Official Journal of the Federation (DOF), setting out the requirements for the evaluation, registration, clinical trial authorization, and required specifications for biotechnology medicines. These medicines make up the most innovative drugs for cancer, rheumatoid arthritis, diabetes, and other chronic and degenerative diseases, and account for 35% of all new drug approvals. The complex manufacturing processes for biopharmaceuticals – comprising genetically engineered microorganisms and cells – make them expensive and challenging to replicate on a ‘generic’ level upon patent expiry. Nonetheless, with such high prices, alternatives are essential for public access and the growth of Mexico’s biocomparable market is seen as key. As Francisco Kuri, New Developments Manager of Landsteiner Scientific, warned at the Biopharma 2014 event in Mexico City, an unaffordable and inaccessible medicine is a medicine that essentially does not exist. In Mexico to date, the market entry of biocomparable products has already contributed to price reductions of up to 96% in the field. The approval of the Norm now goes some way to establishing an equal playing field for all biotechnology producers in the hope of allowing the industry to thrive. Article 222 Bis of the General Health Law provided the definition and legal basis for biopharmaceuticals for the first time in Mexico in 2009. This established that the sale of only innovative and biocomparable biopharmaceuticals would be allowed in Mexico, and all biopharmaceuticals needed to comply with strict tests to demonstrate quality, safety, and efficacy. In October 2011, further requirements for products’ quality, safety, and efficacy validation were specified by virtue of the Regulations for Health Supplies (RIS). Subsequently, Mexican Official Norm NOM-177-SSA1-2013 was published in September 2013, setting out the tests and methods for drug interchangeability, including guidelines and requirements for third parties and research centers performing biocomparability studies. A period of uncertainty amongst the biotechnology community followed, in which companies feared the withdrawal of biogenerics from the market. The implementation of NOM 257 now clarifies the position further and should therefore provide some relief. The norm sets out the role of COFEPRIS and its New Molecules Committee and Biotechnology Products Evaluation Subcommittee in determining the necessary tests for biocomparables on a case-by-case basis. The mandatory implementation of the quality assurance program, including process validations, product and process auditing, and preventative and corrective actions reporting is also established. Furthermore the norm dictates that authorization of clinical trials to use biotechnology drugs will follow the same process as any other pharmaceutical. Pharmacovigilance must be conducted according to NOM220-SSA1-2012 and biocomparability studies according to NOM-177-SSA1-2013. Reference drugs for biocomparability studies must be registered in Mexico and COFEPRIS will publish a list of authorized reference biopharmaceutical drugs online. Prior to the development of the regulatory framework for biosimilars in Mexico, local companies registered biocomparables under the general generic category. Now that the regulation is approved and implemented, companies must comply with new, stricter requirements in demonstrating their biocomparability in order to renew current registrations. Such measures should reduce the likelihood of disputes similar to that between Roche and Probiomed, which culminated in the withdrawal of Probiomed’s Rituximab biocomparable from the market. To address such scenarios, NOM-257-SSA1-2014 includes a transitory article allowing companies an extended timeframe to meet new requirements and present the necessary tests required by COFEPRIS. This will also create both demand and opportunities for research centers and local laboratories in Mexico to provide services for the complete range of biocomparability studies. Sandra Sanchez y Oldenhage, Director General of Probiomed, stresses the essentiality of biocomparables in meeting public health needs, with innovative biophamaceuticals representing a considerable strain on the public budget. Beyond even accessibility, on a broader level Sanchez believes that biocomparables will support further research and development by allowing greater reinvestment in future innovations. Mikel Arriola, head of COFEPRIS, has confirmed his commitment to establishing a complete, modern, and transparent rule system for both local and multinational manufacturers of biotechnology with the aim of placing Mexico at the forefront of the industry within Latin America. Former Comissioner of Sanitary Authorization of COFERPIS and industry expert, Augusto Bondani, believes that the new Norm is conducive to achieving a national policy for biotechnology. Looking ahead, Bondani emphasizes that further efforts by the government are essential and should include prioritization of new biopharmaceutical drug applications at COFEPRIS, the opening of the IMSS to clinical trials and biocomparability studies, increased investment of funds through CONACYT, and, following the precedent of Korea and India, provision of fiscal incentives for biotechnology companies.

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| VIEW FROM THE TOP

BRINGING CUTTING-EDGE GENOMIC APPLICATIONS TO MEXICO DR. GERARDO JIMÉNEZ SÁNCHEZ CEO of GBC Group Q: What has been your role in the sequencing of the

into economic wealth and our work included a broad variety

human genome in Mexico?

of applications, such as healthcare, food, environmental

A: I was responsible for producing the first medical

management, and oceans preservation, among others. After

analysis of the Human Genome Project (HGP), which was

I finished my term at INMEGEN, we established GBC Group,

published along with the first draft of the HGP in Nature

a biotechnology consulting group that develops solutions for

in 2001. The whole genomic sequence was completed

business challenges in different areas including healthcare

later in April 2003. This deepened my knowledge of the

and food science. Later, we established a second company,

impact genomics has on medicine, which is the first step to

Genómica Médica focused on making DNA technologies

developing key public health solutions. In 2001, following

available to local communities and utilizing genomic tools

discussions with Professor Guillermo Soberón, then

to produce innovative methods for DNA extraction. We

Executive President for the Mexican Health Foundation

had designed projects for our customers, but found that

(FUNSALUD), about the implications of the HGP in

many were difficult to carry out due to lack of knowledge,

Mexican healthcare, an alliance was established with the

infrastructure, and specific details that required technical

Ministry of Health, CONACYT, UNAM, and the private

skills or technology which is currently unavailable in Mexico.

sector through FUNSALUD, with the aim of evaluating the

That was a main driver leading to the foundation of Genómica

feasibility of developing a national strategy for genomic

Médica, which now implements projects for our customers

medicine in Mexico. The study defined key participants, the

through our genomics laboratory established in Mexico City.

appropriate legal structure, and the funding sources. The

Later in 2012 we established “Genómica y Bioeconomía” a

Secretary of Health, under the leadership of Julio Frenk,

nonprofit organization, whose strategic liaisons consist of

proposed the creation of the National Institute of Genomic

bringing together the government, scientists, and CEOs in

Medicine (INMEGEN) in 2002, and it was finally founded

order to push forward genomics innovation in Mexico.

as the 13th National Institute of Health in Mexico in 2004. We brought Mexican human resources from abroad and

Q: What does a greater understanding of genomics really

acquired all the necessary infrastructure and technology.

represent for the global economy in the years ahead, and what role can Mexico play?

Q: How has the sequencing progressed?

A: In 2009, the OECD published the report called Bioeconomy

A: One of the most important achievements of INMEGEN

2030 on the role that genomics will play in the global

so far has been sequencing the Mexican Genome Diversity

economy in the next decades. This report shows very clear

Project. We visited large cities and rural communities

trends that indicate genomics will be a major contributor

in Mexico to collect DNA samples. One of the biggest

to the economy by 2030. In November 2013, we held the

challenges was creating understanding in ethnic groups

International Forum on Genomic Innovation and Economic

about the value of their participation in the project, thus

Growth, which focused on how to translate genomic

we conducted community engagement processes in their

innovation into wealth and wellbeing. The Forum was

own language. The Mexican genome project was published

attended by the Secretary General of the OECD, José Angel

in the Proceedings of the National Academy of Sciences

Gurría, as well as experts around the world on areas such as

in 2009. A number of genomic medicine initiatives have

biotechnology and innovation. At the same time President

used this information to further conduct anthropologic

Obama announced that the Human Genome Project saw a

and medical lines of research in this area.

return of US$141 per dollar invested, meaning that the total return has been about US$1 trillion. As for Mexico, innovation

152

Q: What inspired your venture into the private sector with

generally takes longer than in more developed countries,

GBC Group?

mainly because of the lack of incentives and infrastructure,

A: In 2006, I was elected President of the OECD Working Party

with a heavy regulatory burden. As genomics innovation

in Biotechnology. This area is focused on translating science

translates into better medicines, prevention strategies and

quality of life, smart investments can have a huge impact.

Q: How accessible are these sorts of services to those

Canada champions in health, food, and environmental

covered by the public sector?

applications of biotechnology, while the US champions

A: This sort of service can translate science into major

in healthcare applications, and the UK is making forward-

public health benefits, although as of yet we have only

looking policies to develop genomic innovation responsibly.

launched these tests for the private sector. The cost of

I want to see Mexico championing in translating science for

service in Mexico is much lower than in the US, at just a

emerging economies.

fraction of the price. However, we must bear in mind the different healthcare systems, as in many cases this service

Q: What have been the Mexican Genome Diversity Project’s

is covered by health insurance companies in the US, and by

most important discoveries and how has Genómica

public systems in Europe. As well as financing, education is

Médica translated them into commercial applications?

needed so that people become aware of the technological

A: The aim of this project was to analyze the genetic

innovations for healthcare.

components of Mexican mestizo and other ethnic groups. We know that there are several genetic differences among

Q: What are the main barriers to the commercialization of

African, European, and Asian populations, so we wanted to

research in Mexico?

find genetic commonalities. The results showed that despite

A: Scientists often believe that research should not

the fact that Mexicans share 99.9% of their genetic sequences

be commercialized since many are not accustomed to

with the rest of the world, there are a number of genetic

thinking as entrepreneurs, and they do not see science as

variants that are more prevalent in the Mexican populations

a means for creating wealth. In contrast, in other countries,

and some variants are involved in the way an individual

it would be imprudent for governments to invest money in

would respond to a medical treatment. Thus by identifying

science without thinking about the return. Basic science

a collection of those variants present in the Mexican

is important, but so is financing sources and budget

population, we translated that knowledge into genetics tests

allocation for scientific innovation. Scientists in Mexico

to prevent adverse reactions to commonly used drugs. We

could be taught how to apply science to solve problems

have implemented DNA tests that can help clinicians avoid

with major economic impacts. Innovation is at the core

prescribing a drug that will damage an individual’s health,

of knowledge economy, and new developments can

calculate personalized doses based on that individual’s

take from five to 20 years to generate profits, as well as

genetic makeup, or provide recommendations for alternative

requiring significant levels of investment.

medications that will best treat a given patient. The number of genetic tests available is increasing and we are one of the

Q: To what extent are you working with the academic

first Mexican companies to offer those services to the public.

sector to tackle this problem? A: We became aware that universities wanted to translate

Q: What particular DNA tests have you developed based

knowledge into applications, but that there was no

on such findings?

place they could send their samples for DNA extraction

A: This project sheds some light on other diseases and

and analysis in Mexico. For this reason, we established

genetic variants as well, and we have developed six different

a laboratory to receive biological samples for DNA

molecular diagnostics for pharmacogenomics testing that

extraction, and there we carry out DNA amplification,

are the first genomic tests for public health in Mexico. These

sequencing, and final analysis. DNA is traditionally

tests reveal the optimal dose of a specific drug as well as

obtained from blood samples, but there are several

its maximum recommended dose for an individual. We

benefits to using saliva since it does not require syringes,

examined the 140 drugs for which the FDA has authorized

refrigeration, specialized personnel, or sophisticated

pharmacogenomics tests and then we selected those

infrastructure. We have become the exclusive distributor

medications of most relevance to our healthcare sector. For

instance, simvastatin is used all over the world for treating

extraction from saliva, designed to extract DNA and

high cholesterol. Some people have a risk for muscular

RNA from humans and other species. Furthermore, we

damage when they take simvastatin and the FDA defines the

are developing an innovative solution in which filter

risk as low, medium, or high. At Genómica Médica, we can

paper is used for collecting blood or saliva for DNA

read the genetic variants involved in metabolizing simvastatin

extraction. The sample can be sent at room temperature

in a patient’s saliva sample. Based on the results we can

to our laboratory where we can extract DNA from it, a

provide the recommended dose for the drug based on the

process that can potentially be used to bring genomics

genetic variant using international therapeutic guidelines.

to rural communities in Mexico. I believe that Mexico has

This represents a complete paradigm shift in medicine.

enormous potential for innovation and growth.

certain

Canadian-manufactured

kits

for

DNA

153

| EXPERT OPINION PIONEERING CONTRIBUTIONS TO GENOMICS AND

the Human Growth Hormone (HGH) - which also houses

PERSONALIZED

the genes for normal human growth hormone (hGH-N),

MEDICINE

Dr.

Hugo

Barrera

Saldaña, CEO Of Vitaxentrum

human growth hormone-variant (hGH-V) and human chorionic somatomammotropin (CSH) - was recognized

I. ORIGINS OF THE GENOMIC REVOLUTION

as the most direct predecessor and one of these key

The Nobel Prize winner Dr. Renato Dulbecco proposed

pieces The information gathered on this locus (~66,500

sequencing of the human genome in 1985 to strengthen

nucleoids; which we will refer to as chapter GH of HGP),

cancer research and many scientific leaders adhered to

will become a mine that we have to excavate to extract the

his idea. In 1988 the US government entrusted the Human

basic applied value of genes and other elements, allowing

Genome Project (HGP) to the Department of Energy

us to illustrate how genomic information can contribute

which collaborated with the National Health Institute and

discoveries that can later be transformed into biomedical

prestigious investigation centers in US, Europe, and Asia. In

and clinical innovations.

Latin America, my laboratory was named by the UNESCO headquarters as the center for regional development of

III. FROM GENERALIZED MEDICINE TO PERSONALIZED

the HGP and hosted no fewer than ten theoretical-practical

MEDICINE

courses. The HGP formally began in 1990 to reveal the

The HGP accelerated the discovery of the genetic causes

complete sequence of accumulated hereditary material

of many illnesses and, as a result of this knowledge, the

on our cells chromosomes. As a result, scientists aspired

development of new laboratory exams for diagnosis,

to learn how many genes constitute an entire genome,

classified in subtypes, evaluate the risk of hereditary

to bring greater understanding to the species’ evolution,

illnesses,

identifying genomic variations that differentiate people,

take and even predict the response they will have to

populations and ethnicities, as well as determining the

treatments. At these levels genomic medicine is referred

genetic roots of illnesses and the variations in response to

to as Precise or Personalized Medicine, which in relation

medicine from different patients.

to pharmochemicals and its search to explain variability,

diagnose

the

course

that

the

illness

will

is called Pharmacogenetics. When referring to medication In April 2003, on the fiftieth anniversary of publication on

such as the new biological bases (biomedicine) in which the

DNA structure by James Watson and Francis Crick, the

goal is to anticipate if there would be a response or not,

project was officially concluded with a statement from the

should a cell alteration be present or not as a result of a

White House informing the North American population

gene mutation, it is called precise or personalized medicine.

and the rest of the world that our genome consists of around 3 billion pairs of nucleotides (A, G, C and T) and

Pharmacogenetics and personalized medicine brought with

is made up of approximately 23,000 genes, of which the

them the new mantra of modern medicine “the right doses

regions that direct the synthesis of proteins (exons) barely

of the right medicine for the right patient at the right time,”

represent 2%.

revolutionizing the concept of the same pill for all patients with the same illness, and converting it into a different pill

Throughout the human population, the genome contains

for each illness according to the individual characteristics of

similarity of up to 99.9%. The remaining 0.1% that

that group of patients. As a result patients are connected

distinguishes individuals is made up of around three million

at a genomic level with the correct treatment, avoiding

Single Nucleotide Polymorphisms (SNP).

not only ineffectiveness, but also adverse effects that can even lead to fatal consequences. This validates the idea

II. PROVIDING EVIDENCE OF THE FEASIBILITY OF THE

suggested by Hippocrates almost 2,500 years ago, that “it

HGP

is far more important to know what person has the disease

The fact that the HGP had managed to gather funds by the

than what disease the person has.”

beginning of 1990 was made possible thanks to lobbying from Watson, among others, before the US Congress,

The causes of a drug being ineffective or toxic are varied.

in addition to numerous scientific and technological

Diverse studies have discovered that certain SNPs present

advances that were pivotal to considering the project

in genes of the proteins responsible for absorption,

feasible, despite its scale and considerable complexity for

transport, metabolism, and elimination of drugs (processes

that time.

jointly referred to as ADME) can be the reason for the level of success of a given drug. The branch of genetics that

154

Whilst maintaining proportion, our daring project to

studies these genes is called pharmacogenetics and is

manually sequence the chromosomal site or locus of

sometimes interchangeable with pharmacogenomics.

IV: PROOF OF ACCOMPANIMENT OF PERSONALIZED MEDICINE The concept of the existence of particular cellular conditions that are necessary for a medicine to work

8. In 1994, Everardo González defended his thesis on the topic of designing a new method via PCR for the DxM of hGH locus deletions.

is not new. For decades, and certainly well before our

9. In 1998 the FDA approved the monoclonal

HG concept was completely formed, it was well known

antibody (mAb) anti.EGFR Herceptin® for

that those children that lacked the gene responsible for

expressed breast tumors.

the hypothesis of normal growth hormone production

10. That same day the diagnostic HerceptTest

(hGH-N) did not respond to injections of the artificial

packet was approved as an accompanying test

version created with genetic engineering or reengineered HGH (HGHr), because their immune systems detected it

for said expression. 11. As a result of this group of patients, Herceptin®

as a foreign object and produced antibodies to eliminate

became

it from the body.

diagnostic package approved by the FDA.

the

first

personalized

product/

12. The FDA labelled, recommended or requested When my colleagues in paediatrics heard about our world

accompanying tests for a growing list of cancer

record involving the human genome they suggested a new

therapies, cardio-vascular illnesses, transplants,

challenge for me: to find a way to be able to distinguish

neurology, and psychiatry.

the infants a priori that responded and those that didn’t. This challenge motivated me to develop something that,

Currently, it is estimated that up to half of drugs in the

up to that point in time, had been the first diagnostic test

development process target cellular alterations that result

of accompaniment invented in the world, to the extent that

from genome mutations, which means that their approval

this case pre-empts the effectiveness of the treatment of

will be conditioned by the FDA to accompany therapeutic

slowed growth as a result of a hormone deficiency.

use with the molecular test that reveals the genomic condition which is indispensable for its efficacy and safety.

V. REWRITING HGP Just as described above, translating the discovery of the

VI. THE BUSINESS OF GENE DIAGNOSIS

complete sequence of the hGH locus into a method that

Routine genetic and genome diagnostics are not yet offered

would, for the first time ever, facilitate the distinction of

either in hospitals or laboratories. This is because it is a high-

infants with a hormone deficit and could benefit from the

risk business, since the market is only beginning to prepare

artificially engineered hormone, was the means for us to

to adopt this radical technological change. Moreover, the

become pioneers in two major revolutions in biology and

medical community is not yet sufficiently informed to

medicine: the HGP and personalized medicine, the history

understand its findings and reach, an indispensable element

of which is summarized in the box below.

to organize and incorporate its results into clinical practice. Furthermore, in some cases, not even laboratories that

1. In 1985, the Nobel Prize winner Dr. Renato

claim to be dedicated to Molecular Biology, possess all

Dulbecc, reflected that the best way to

the necessary information to offer validity and necessary

advance cancer research would be through

utilities, especially when many discoveries and genomic

human genome sequencing.

predictions have not yet begun to corroborate with clinics’

2. In 1989, Chen and colleagues sequenced

follow-up, which can sometimes take years of patient care.

the locus of the growth hormone, supplying crucial evidence to the feasibility of the human

Since this requirement of expertise is combined with

genome.

necessary sophisticated experimental infrastructure as well

3. In 1990, the HGP was debuted.

as considerable investment, in addition to highly skilled

4. The first draft of human genome sequencing

personnel and prepared executives to manage the business

was published in 2001. 5. The sequencing of our 23,000 genes was registered in 2003. 6. The GenBank became the reference for biology and medical investigation (genetic variation).

world, SMEs such as ours, dedicated to Molecular and Genomic Biology, are the most suited to sparking off this kind of promising business - more so if they join alliances with visionary investment groups in the health sector. There are many companies that, having begun as SMEs in the US

7. In the 1990s, the idea of designing individually

and having a solid base early on, are becoming huge success

tailored treatments according to each patient’s

stories. One can hope that in our country we will continue

genome was conceived, but rarely applied.

to be actors, not just spectators, in this genomic revolution.

155

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| VIEW FROM THE TOP

A NUCLEUS FOR R&D AND INNOVATION DR. HUGO A. BARRERA SALDAÑA Founder and CEO of Vitaxentrum

Q: How was Vitaxentrum created and how has it evolved

Q: Which of these areas do you think presents the biggest

over the years?

growth potential?

A: Vitaxentrum is the home of two companies, Innbiogem,

A: Mexico has huge scientific capacity, especially in

a consulting firm, and Vitagénesis, a biotech and genomics

agricultural and industrial biotechnology, but there are

start-up. After starting Vitagénesis we built Vitaxentrum

very few good human health genomics and modern

to both host and create a nucleus of R&D and innovation

biotechnology experts, despite the many opportunities

in order to translate discovery and invention capacities

in that field. The area of diagnostics is always evolving,

into solutions that benefit society. We spent two years in

whether due to new regulations or to the release of new

UANL’s incubator program before acquiring the necessary

products to combat cancer and other conditions. Recent

equipment through state funding and CONACYT. With

conferences I have attended revolved around such cutting-

Vitaxentrum, the outcome was quality scientific research

edge innovations as liquid biopsy, a new technique for

to render great technology, which in turn opened up

analyzing blood to detect cancer cells and their DNA.

interesting business opportunities. The next step was

Many new applications will continue to emerge as the

to expand the region’s biotech and genomics industrial

market moves forward.

ecosystem. To achieve this, we started with the worldclass biomedical research and graduate program we had

Q: With all of Vitagénesis’ results being published in

initiated in the mid 1980’s at UANL, and then we developed

scientific journals, does the company also file for patents?

technology services units. Subsequently, we helped to

A: We secured a couple of very important patents when I

create the university’s technology transfer center. We

was at university. The first was a new process to produce

then continued with the creation of a new university

recombinant human growth hormone, which was granted

undergraduate

biotechnology.

in the US, Europe, and Japan. We even licensed that

Finally, we proposed, designed, and raised funds for new

technology to a leading Mexican biotech company. A

entrepreneurship infrastructure in the form a bio-incubator

gene therapy patent was also granted, though it remains

at the State Technology Park in Monterrey.

unlicensed because Mexico is not fully ready to begin gene

program

genomic

therapy at the clinical level. A major obstacle in producing Q: What types of clients does the company attract in the

our clinical-grade gene therapy vectors has been the

sector?

absence of a production facility. However, while funding

A: The first are those who hire us to improve their

used to be difficult to secure in this field, the Mexican

bioprocesses,

molecular

government has now allocated more grants to high-tech

biology, genetic engineering, and genomics. The second

endeavors. However we remain far behind the US in terms

are big pharmaceutical companies and hospitals often

of regulatory oversight and development programs for the

needing DNA testing to help them better diagnose or

healthcare industry.

given

our

proficiency

predict a patient’s treatment outcome. The third are the clinics, hospitals, and physicians, which are always

Q: How can different players boost entrepreneurship in

seeking support in our specialist areas of molecular

Mexico’s healthcare sector?

diagnosis,

Furthermore,

A: True entrepreneurship, where people take real personal

we are constantly writing applications for grants and

risks in starting companies, is a very new concept in Mexico,

collaborating with leading international institutions

and young graduates still prefer to start companies in

so that Vitagénesis can acquire new technology and

traditional sectors. The healthcare industry has not been

remain at the forefront of global developments. Finally,

seen as a major target for entrepreneurs. To help with this,

we regularly publish our discoveries and inventions in

at Vitaxentrum, Innbiogem identifies important needs, and

prestigious scientific papers, and are seeking to gain

works with Vitagénesis to contribute high-tech solutions

international quality certifications

and move them forward within the market.

prognosis,

and

prediction.

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| VIEW FROM THE TOP

HIGH HOPES FOR NASCENT STEM CELL THERAPY INDUSTRY JESÚS ESPARRAGOZA FOX Managing Director of ReHealth Q: What have been the highlights of ReHealth Regenerative

physicians, and COFEPRIS. Stem cell therapy requires

Therapies’ activities since its creation?

physicians to do a proper evaluation and follow-up with

A: Stem cell therapy is still a nascent field in Mexico

patients. Furthermore, there is still a lot of misinformation

with great expectations for the next five years. ReHealth

about this field, many people think stem cells are

Regenerative

miraculous and can cure any condition. This leads them

partnership with DaVinci Biosciences, based in Costa

to pay up to US$80,000 to receive stem cells in hopes

Mesa California, with the aim of providing storage,

that their condition will be cured. Several of our patients

commercialization, and implantation of stem cells for

have done this abroad and we have had to explain to them

patients with cardiovascular diseases and sports injuries

that this was an unethical, unprofessional service. We then

in Mexico. We receive full technical and scientific support

explain to them that stem cells may possibly improve

from DaVinci Biosciences, which has recognized Mexico’s

their quality of life. We explain to them the properties of

potential and capabilities in the medical and scientific

stem cells that may help in their condition and they are

fields. Nevertheless, bigger investments are needed in this

ultimately very satisfied with the explanation and service

country. For instance, stem cells can be extracted from

we provide. Alongside this, we have someone dedicated

bone marrow, quantified, and visualized in our laboratory,

to visiting and training physicians to explain the scientific

but replicating them remains a challenge that requires

background and medical results of stem cells, since most

sophisticated technology. For the time being, we export

doctors are not familiar with them, which is a barrier to

bone marrow stem cells to The BioBox, an affiliate of

expand access to this treatment. Regarding the technical

DaVinci Biosciences for storage and cryopreservation in

and infrastructural aspects of stem cell therapy, Mexico

hopes that if needed at a later date patients can use these

has many brilliant scientists that are perfectly capable of

rather than having another procedure done. We are in the

doing research and developing competitive technologies.

works of replicating DaVinci’s technology in Mexico. This

However, more investment is necessary to acquire

system will allow us to work in the cardiovascular, lung,

specialized technology and infrastructure. For instance, we

orthopedics, traumatology, and diabetes areas, but we

would like to have a laboratory with DaVinci Biosciences

have plans to also cover autoimmune diseases. We plan

equipment, however, access to funding is harder and takes

on commencing a fully funded clinical study once all

longer in Mexico, which delays the development of new

appropriate regulatory approvals are in place. In addition,

services that cover specific needs in the market. We are

as part of the DaVinci Biosciences’ family of companies,

also looking for the same equipment and supplies being

DV Biologics sells and supplies different types of human

used in California but, despite everything being available

cells to biotechnology and pharma companies engaged in

in Mexico, these are all being manufactured abroad. As for

drug discovery and development.

clinical trials, conducting a formal study protocol is very

Therapies

(ReHealth)

was

created

costly and can easily reach in excess of US$500,000 in Q: What are the most important barriers to producing and

Mexico, with the insurance alone to cover the study costing

commercializing stem cells in Mexico?

US$30,000-40,000 and this is only for a small number

A: Stem cell research is fascinating and many research

of patients. Mexican scientists are thus prevented from

groups around the world are busy advancing knowledge

advancing promising lines of research. However, ReHealth

in this field. Nevertheless, their therapeutic application is

is taking small but solid steps in each of these aspects

rather new and limited to certain hospitals and clinics in

and continued effort will consolidate our position in the

developed countries. There are many diseases that could

healthcare industry.

be treated with stem cells, but the medical community

158

is very careful not to prescribe them without sufficient

Q: Many patients have their eye on countries like Mexico

medical

safety.

for cheaper medical treatments. Do you have any plans to

In addition, more education is needed for patients,

join the hospitals already profiting from medical tourism?

evidence

about

their

efficacy

and

A: Between 60-70% of our patients are from the US and

multiple sclerosis with very interesting results. We are now

Canada, who come to Guadalajara to receive our stem

commencing with five clinical studies on stem cells’ safety for

cell therapy. However, while patients come to this city for

cardiovascular and rheumatoid arthritis through a CRO that

particular treatments or physicians, medical tourism in

manages all these trials. In addition, we are very interested in

Guadalajara has not received a lot of attention yet. In order to

stem cells and their effect on aging. There is research that

strengthen our presence abroad, we attend major networking

suggests stem cells can prevent the shortening process of

and academic events, such as the Annual World Congress on

cells’ telomeres to a certain degree, slowing down aging.

Anti-Aging Medicine in Las Vegas, where we explain who we

Telomeres are the tails of chromosomes that become shorter

are and what we can do for patients. While many are unsure

with every cell division, determining the life span of the cells.

about coming to Mexico, we are making headway and to help

This research line received a Nobel Prize some years ago,

speed this process up we need to generate agreements with

but the only laboratory that is currently able to measure

clinics, laboratories, and hotels to offer complete medical

telomeres the correct way is based in Spain. This research

tourism services for our patients. Patients often tell us what

group in Spain is investigating the effects of diet, exercise,

kind of tests they need ahead of time so we can help them

and other lifestyle factors on the length of cells’ telomeres.

find the right diagnostic clinics and physicians in Guadalajara,

Other physicians are using stem cells for other issues such

which goes a long way toward helping them to better plan

as articulations, sports injuries, diabetes, and inflammatory

their stays. Finally, there is a significant American and

diseases. We are also very interested in generating important

Canadian community of retired people based near Chapala

data regarding their efficacy for chronic and degenerative

Lake in Jalisco, from where many people come to us looking

diseases, such as Alzheimer’s and Parkinson’s. Unfortunately,

for treatment for various ailments.

brain diseases are still very risky to deal with because the cells have to go inside the brain, and no sustained therapeutic

Q: You have already mentioned the ongoing research on

effect has been detected as of now. Stem cells are immune

stem cells therapy, but what is your contribution to this

regulators with anti-inflammatory abilities. They can create

field and are you conducting clinical trials in Mexico?

new blood vessels in a process called angiogenesis. As

A: In the beginning, we were interested in extracting stem

scientists, we need to be able to objectively measure all of

cells from bone marrow and inserting them into the heart.

the benefits; while remaining focused on the therapeutic

We then started using these for spinal cord injuries and

effect we are investigating to truly improve quality of life.

November 18 -19, 2015

Centro Banamex, Ciudad de México, DF

Mexico’s leading event for pharma, biotech and academia The global pharmaceutical landscape is changing and Mexico is perfectly placed to benefit. Treating chronic diseases in traditional markets like the US and Europe has become saturated and the focus has switched to emerging markets like Mexico and Latin America as a whole. Big pharma investors are becoming more and more attracted by Mexico’s favorable regulatory incentives such as the elimination of mandatory manufacturing requirements. The 3rd annual Biopharma Mexico conference celebrates this growth and ushers in further investment. It brings together local and international pharma, principal investigators and scientists from the country’s main universities, COFEPRIS and payers to discuss opportunities and challenges in the sector.

Mikel Arriola

Alexis Serlin

Edvard Philipson

Federal Commissioner COFEPRIS

Country President Novartis Mexico

Vice President, Latin America Ferring Pharmaceuticals

REGISTER TODAY Register today at www.terrapinn.com/mexicohealthreview or scan this QR pattern with the camera on your smartphone. 159

| VIEW FROM THE TOP

PRIORITIZING ACCESS TO GLOBAL INNOVATION ELVIN PENN Director General of Amgen Q: How supportive is Mexico as a location for Amgen’s

to come to market in 2017. Our initial three biosimilars

innovation efforts locally?

are all in pivotal studies. Two additional biosimilars are

A: Our biggest responsibility is to ensure that all the

clinically ready and four are in the process of development.

science and technology that Amgen develops for patients

We see biosimilars as a very good opportunity, not only

is brought to Mexico, and that patients have full access to

from the commercial standpoint but also for improving

new medicines. We have nine products available in Mexico,

patient access to medicines. In order to thrive in

seven of which are included in the National Formulary. Our

Mexico, biopharmaceuticals and biosimilars need a clear

areas of focus are oncology, nephrology, cardiovascular,

and strong regulatory framework. With this in mind,

bone

neuroscience.

COFEPRIS recently included biotechnology products

Unfortunately, new medicines can take up to four years

under the umbrella of Norm 257 and through AMIIF, we

to gain access into the National Formulary and to public

participated in the development of this new norm. Its

institutions’ formularies. However, over the last two years

effective implementation is crucial for developing the

approval times have been optimized with COFEPRIS.

industry and guaranteeing the efficacy and safety of all

Despite the long timeframes for inclusion, Amgen will

products that are available in the market. Mexico is a

continue to bring more innovative products to Mexico and

country full of opportunities for R&D. Amgen’s global

is a multinational leader in the biopharmaceutical sector

investment was US$4.1 billion last year, and in Mexico we

in the country. At the moment our pipeline is among the

have invested more than US$19 million in clinical trials

most remarkable in the industry in terms of innovation.

over eight years. We have 18 ongoing clinical trials on

diseases,

inflammation,

and

cardiovascular diseases, osteoporosis, and cancer in Q: How has the biotechnology sector grown in Mexico in

different centers such as the National Institute of Medical

the last years? What does this represent for Amgen and

Science and Nutrition Salvador Zubiran (INNSZ) and

for your ambitions as General Manager?

Hospital La Raza. One of them targets high cholesterol

A: The Mexican pharmaceutical market is worth US$15 billion

levels, which is evolocumab (AMG 145) and 300 Mexican

and is the second-largest in Latin America after Brazil, which

patients are participating in clinical trials for this drug.

represents a big opportunity for biotechnology. Additionally,

Others target specific gene variants or mutations and

pharmaceuticals represent one of the sectors with the most

can be classified as personalized medicine. For instance,

significant growth in the Mexican economy. According to a

we have a product for colorectal cancer for a specific

study conducted by FUNSALUD, the biotech sector grew

population that has a particular gene mutation.

44% between 2011 and 2012, and continues to outperform the rest of the pharmaceutical industry in terms of growth.

Q: What challenges need to be overcome for Mexico to

According to COFEPRIS, 35% of the products being approved

fulfill its potential in the biotechnology industry?

are biotech drugs. For companies like Amgen, this is an

A: Mexico must take significant steps toward improving

excellent outlook. Therefore, at a local level, one of our most

patient

important duties is innovation. As General Manager, part of

institutes are the authorized third parties that review study

my function is to challenge the status quo, and pushing

protocols, while IMSS has recently transformed its internal

forward innovative solutions and initiatives on a daily basis is

process to allow pharmaceutical clinical trials. As such,

essential for the different goals that we need to accomplish.

Mexico will be able to fulfill its potential as an R&D hub in

access

medicine.

Today,

national

health

the region. We are collaborating with the government and

160

Q: Do you agree that including biosimilars in the

associations to identify solutions to the different ailments

portfolios of innovative companies can lead to savings for

in the Mexican healthcare system. These improvements

reinvestment in R&D?

will help us achieve our most important goals, which are

A: I completely agree with this strategy. In fact, Amgen has

bringing innovative products and biosimilars to Mexico

nine biosimilars in development, with the first expected

and making them available for patients.

| SPOTLIGHT THIRD-PARTY

AUTHORZIED

CENTERS

FOR

Probiomed explains that there is no supplier in Mexico that

BIOCOMPARABILITY STUDIES

can do the full characterization of biocomparable products

Biotechnology represents a promising alternative over

therefore more investment is needed to support and

chemically synthesized drugs for chronic and degenerative

develop the necessary infrastructure for local companies

diseases,

biocomparables

to meet regulatory requirements and ensure quality

were developed. Before the regulatory framework for

standards. This could ultimately push forward the local

biocomparables was developed in Mexico, 65 products

industry and increase the number of patients who benefit

were

from high quality biocomparables at low costs.

but

registered

patents

expited,

traditional

generics

several

companies, at a when quality and safety requirements were more lenient. Norm 257, issued in December 2014, requires characterization studies that demonstrate the safety and efficacy of all biocomparables as well as their similarity to reference products. This has resulted in a backlog of

AUTHORIZED THIRD-PARTY UNITS FOR ANALYTICAL CHARACTERIZATION AND PRE-CLINICAL STUDIES IBT UNAM

biocomparables awaiting evaluation for compliance with the new regulations. Failing to meet the required standards will result in product withdrawal from the market. This also means that public healthcare institutions that have been using biocomparables prior to the new regulations, that transpire to not meet the new requirements, will need to replace these drugs with their innovative versions at considerably higher prices.

UNIPREC INMEGEN CIATEJ UDIBI UANL

The whole biotechnology industry is still developing worldwide but the global environment remains somewhat cautious about biocomparables. Approval timelines for regulatory processes are significant as Mexico competes

AUTHORIZED THIRD-PARTY UNITS FOR CLINICAL STUDIES

with countries all over the world and rapid approvals are extremely important for the success of a new medication. Fortunately, timelines in Mexico are better than in other Latin

CECYPE Accelerium

American countries, according to Jose Luis Viramontes, Remote Site Management and Monitoring Director of PPD Latin America, but the process for biocomparables is more complicated than that for small molecules, and therefore slower. COFEPRIS will evaluate biocomparable drugs on a case-by-case basis and will publish a set of requirements for a specific product. Therefore, some products may

Bioemagno IPharma Laboratorio ClĂnicos Puebla

Source: Mexico Health Review

need more studies than others and some companies will practically need to start from scratch if they want to stay in the game. To make these decisions, COFEPRIS has implemented a strategy that is comparable to that of any advanced country and formed a Biotechnology Products Evaluation Subcommittee, managed by experts on the subject and which passes its decision onto the Committee of New Molecules, which in turn confers with the COFEPRIS. Moreover, it authorized third-party units to offer analytical characterization and pre-clinical studies, as well as clinical studies for biocomparables. Although such third-party units have experts in the field, Sandra Sanchez y Oldenhage, Director General of

161

| LABORATORY SPOTLIGHTS NATIONAL

INSTITUTE

GENOMIC

MEDICINE

tackle problems in several areas including health, energy,

(INMEGEN)

environment, and agriculture. It now has more than 100

Created in 2004 in response to a revolution in biological

researchers and is responsible for hundreds of publications.

sciences and in experimental biology at the time, INMEGEN

One of the main goals of the institute is to educate future

is a national and international leader in genomic research.

professionals and its Bachelor in Genomic Sciences is

As the eleventh National Institute of Health, the institute

currently producing its eighth generation of graduates.

was created as a result of the Promoter Consortium of

The institute also has an MSc and a PhD program on

Institute of Genomic Medicine, integrated by UNAM,

Biochemical Sciences and provides several workshops on

the Ministry of Health’s National Council of Science and

bioprocesses, biosecurity, and microscopy.

Technology, and the Mexican Foundation for Health. The institute aims to incorporate much of the biomedical

At this point the institute is divided into five departments,

research and molecular oriented research into the Mexican

consisting of Cell Engineering and Biocatalysis, Molecular

healthcare sector.

Biology of Plants, Genetics of Molecular Development and Physiology, Molecular Microbiology, and Molecular Medicine

At the time of INMEGEN’s creation the human genome

and Bioprocesses. As leaders in genomic research, IBT has

project was believed to generate many opportunities for

collaborated with national and international institutions

health and the institute aimed to bring those benefits to

in many different countries, including but not limited to,

Mexico. Over time it has created several projects with

the US, Germany, Belgium, France, Spain, Turkey, Brazil,

companies in the private sector and universities, including

Japan, and Australia. The institute is also working with

UNAM and the Broad Institute. INMEGEN has also led

such private sector organizations as Landsteiner Scientific,

many research lines, including within pharmacogenomics,

Laboratorios Liomont, and Innbiogen.

oncogenomics,

proteomics,

nutrigenomics,

and

the

genomic of infectious and chronic diseases, among others.

IPN’S UNIT OF DEVELOPMENT AND RESEARCH OF

The institute has also led the largest study on diabetes

BIOPROCESSES (UDIBI)

on the Latin heritage population and discovered a gene

Created in 2012 to perform preclinical studies for biologic

variant specific to the Latin American population that

and pharmaceutical products for the pharmaceutical

explains the propensity of Mexicans to develop diabetes.

industry, UDIBI is now undergoing a consolidation process to become a laboratory for preclinical, clinical, and

UNAM’S BIOTECHNOLOGY INSTITUTE (IBT)

biocomparability studies of biotechnological medications.

Located in Cuernavaca, Morelos, UNAM’s IBT was created

As part of the installations of the National School of

more than 30 years ago with the aim of developing research

Biological Sciences of IPN, UDIBI aims to expand on the

to generate knowledge on molecular biology, cell biology,

research goals of IPN and to link the results to other

biochemistry,

institutions.

microbiology

immunology,

biochemical

engineering, genomics, and bioinformatics, among many others. The institute’s goal is to use biotechnology to

UDIBI

has

four

immunology,

main

cellular

laboratories,

microbiology

specializing

and

cell

culture,

experimental models, and chromatography, and currently offers four different services. The first is the analysis of

pharmaceuticals

and

biopharmaceuticals

through

studies in vivo and in vitro. The second is the detection of pathogens in food through state-of-the-art equipment and highly qualified professionals. The third is analysis of water and the toxicity of pesticides. Finally, UDIBI offers its highly qualified professionals, services, and tools to support the development and evaluation of new pharmaceuticals. In order to promote R&D in biotechnology, UDIBI is allied with UNAM’s Unit of Preclinical Research (UNIPREC) and

the

Medicine

and

Diagnostics

Development

Network (RedFarmed). UDIBI now provides in vitro pharmacokinetics and pharmacodynamics studies for the development of biosimilars, biocomparability studies, quality control tests, and several tests for clinical trials.

162

| BIOTECHNOLOGY CLUSTER SPOTLIGHTS NUEVO LEON One of Mexico’s manufacturing hubs and engines of economic growth, Nuevo Leon is also a technology innovation center with a significant involvement in the biotechnology industry. The academic sector contributes to this position, with the Nuevo Leon Autonomous University (UANL) offering several graduate programs in biomedicine, molecular biology, and agrobiotechnology, among others. Similarly, the ITESM Biotechnological Center integrates its chemical engineering, agrobiotechnology, biology, and biomedicine programs with innovative business models. The Technological Research and Innovation Park (PIIT) was created through a partnership between the government, universities, and the private sector. Some of the fields developed in the park include nanotechnology, biotechnology, healthcare, and advanced materials. The state also hosts an important biotechnology cluster aimed at supporting the acquisition and application of scientific knowledge in the field, as well as transferring and commercializing technology in order to create products, processes, and services that address the market’s needs. The cluster brings together higher education institutions, government entities, and close to 35 private companies. JALISCO Jalisco enjoys a reputation as one of Mexico’s forerunners in clinical research, healthcare, and the manufacturing of pharmaceuticals and advanced technology. In addition, this state is home to prestigious educational institutions and research centers, such as the University of Guadalajara (UdeG) and the Centro Universitario de Ciencias Biológicas y Agropecuarias (CUCBA), focused on health, genetics, neurobiology, molecular and cellular biology, and agrobiotechnology, among others. The Guadalajara-based Western Biocluster (Bioclúster del Occidente) is an association tasked with increasing the competiveness of pharmaceutical and biomedical companies that operate in Jalisco, as well as promoting the development of new biotechnology firms. This cluster includes higher education institutions, such as UdeG, ITESO, and Guadalajara Autonomous University, as well as entities such as the Regional Chamber of the Transformation Industry, the Science and Technology State Council, and several pharmaceutical and veterinary science companies. The cluster’s goal is to promote the growth of life sciences in Jalisco while protecting and commercializing patents developed in the region. Additionally, the cluster has made technological and academic cooperation agreements with clusters in other cities across the world. Its lines of research are involved in the production of vaccines for veterinary use, studies on possible cures for cervical and uterine cancer, and research on the liposomes found in food, among others. MORELOS The state of Morelos has a significant talent pool specialized in areas related to biotechnology. Morelos accounts for the second largest number of memberships in the Mexican Biochemistry Society and the second largest number of registered life science researchers in the National Researchers System, as well as being home to several research centers focused on biology, genomics, and health. UNAM heads the Morelos life sciences cluster, as it has a Biotechnology Institute specialized in vegetable molecular biology, molecular medicine, and biotechnology, and a Genomic Sciences Center. Nonetheless, there are other outstanding research centers such as the National Public Health Institute, which carries out investigations on diseases like HIV, diabetes, tuberculosis, and cancer, among others, and the Center of Biotechnology Research, which belongs to the State of Morelos Autonomous University and focuses on biological control, natural products, and the environment. GUANAJUATO Guanajuato is well-acquainted with institutions doing research on biotechnology, and the National Laboratory of Genomics for Biodiversity ranks highly on the national list of such institutions. This is one of the most internationally important centers dedicated to sequencing and performing functional analysis of the genomes of plants, animals, and microorganisms with potential applications in agriculture, medicine, and even assorted industries. The center is part of the National Polytechnic Institute’s Center of Research and Advance Studies (CINVESTAV), a center of excellence in basic and applied research related to agricultural biotechnology. The support of the state government and CONACYT has enabled CINVESTAV to develop graduate programs in vegetable biotechnology and to have highly knowledgeable researchers in areas like biochemistry, biotechnology, and microbiology. The Technological Institute of Celaya is another important member of this cluster, as it offers specialized programs in chemistry, biochemical engineering, molecular biotechnology, and bioengineering, among others. A distinctive feature of this institution’s researchers is that they always seek commercial applications for their projects, as can be witnessed with its wide range of patents for the agriculture and food industries that have been acquired by national and international companies. Other relevant institutions in Guanajuato include the University of Guanajuato’s Institute of Experimental Biology and the National Institute of Forestry and Agriculture Research.

163

| VIEW FROM THE TOP

CULTIVATING ENTREPRENEURSHIP IN GENE THERAPY DR. GUSTAVO CABRERA CEO of Global Biotherapeutics Q: What opportunities and barriers did you identify when

of principle therapeutic experiments for type 1 diabetes

you founded Global Biotherapeutics?

and hemophilia A, with extremely encouraging results. We

A: When we established the company in 2009, we

are aiming at completing proof of principle therapeutic

identified several gaps in the field of gene therapy, such

and toxicological data sets on large species by late 2016.

as finding the right way to deliver genes to specific cells

Furthermore, we have begun to draw regulatory road

or organs. Today, it is still difficult to deliver an insulin

maps towards phase one clinical trials and we are aiming

gene to a diabetic patient without any risk, as is the case

at Investigational New Drug (IND) filings with the FDA by

when delivering clotting-factor genes to patients suffering

early 2017, as well as filing with the European Medicines

from hemophilia. These problems have existed in the field

Agency (EMA). Due to the length of the licensing process,

for the last 20 years, and my partners and I realized the

scientists in a research center, university, or national

technology we are generating is the ideal solution that also

institute usually request government funding, but we chose

represents a commercial opportunity. Our gene delivery

the alternative route of establishing a startup. Startup

platform will revolutionize the field of gene therapy and

companies in developed countries have three possible

may finally allow patients to realize the potential of gene

funding options: angel investors, venture capital firms and

therapy to treat genetic diseases and chronic illnesses.

national funding sources which invest in startups, or private

Developing a new idea and then pitching it to the global

investment from family and friends. Global Biotherapeutics

market can be challenging, especially in countries like

is currently traveling through the valley of death. We have

Mexico where a culture of entrepreneurship is in its

not sold our technology yet because our patents have just

infancy. We are interested in transferring this technology

been published, and we need to have a well-articulated

to big pharmaceutical companies. We have overcome

intellectual property strategy to attract big companies. We

many barriers, since opening an office with a laboratory

recently submitted our first paper on our technology to the

infrastructure, having the permits to import our reagents,

European Society of Gene and Cell Therapy (ESGCT), with

and

complex

another paper appearing in the journal Molecular Therapy.

processes in Mexico. CONACYT has provided considerable

We also presented the technology in Washington, and are

support through various funding programs, and has been

willing to license this technology to major companies, but

patient in understanding the potential of the technology

major pharmaceutical companies generally only begin to

that we are developing. Through identifying the fact that

show interest after IND filings are complete.

obtaining

corresponding

licenses

are

Mexicoâ&#x20AC;&#x2122;s government had become interested in stimulating alternate means of wealth creation and economic growth,

Q: What diseases are you aiming to tackle?

with knowledge and technology at the core of this trend,

A: Since GBT has developed a platform technology through

we are seeking to shift the balance from Mexicoâ&#x20AC;&#x2122;s main

which several pathological conditions could be treated,

economic drivers like oil, tourism, and mining, towards

several criteria are taken into consideration when selecting

innovation in the biomedical field. GBTâ&#x20AC;&#x2122;s biggest priority

GBTs therapeutic programs. We are currently focusing on

for 2015 is conducting safety and efficacy studies for type

developing three therapeutic programs to combat diabetes,

1 diabetes and hemophilia A on large animal species.

hemophilia and cancer respectively, a program specifically aimed at areas with unmet medical needs. We applied for

164

Q: How close are you from transferring or licensing this

a grant in order to develop a solution for diabetes type I,

gene therapy delivery platform?

and as the government has a vested interest in developing

A: So far, we have successfully proven that our gene delivery

solutions, the proposal was granted. We chose hemophilia

technology is safe and effective in rodent and porcine

because it is a pathology involving just one damaged gene

models using reporter genes, we have developed novel

that could be easily repaired using gene therapy. In terms

laparoscopic surgical devices for the future implementation

of cancer treatment, our technology is robust and extremely

of GBTs technology in humans and we have initiated proof

safe, and our laboratory results suggest it may well be

useful for solid tumors. For investment purposes, companies

therapeutic programs, in compliance with both FDA

require promising data, which we have presented for our

and EMA requirements, and with this feedback we will

gene therapy technology. Meanwhile, we are still generating

subsequently work in collaboration with COFEPRIS, with

data on biodistribution, toxicology, safety, and efficacy which

a view to implementing standard practices for phase one

are the most important elements to evaluate in gene therapy.

clinical trial authorization in Mexico. We have also held several promising meetings with the heads of the National

Q: How do you ensure your platform is safe?

Institute of Medical Sciences and Nutrition Salvador

A: While some current gene therapy techniques encounter

Zubiran (INCMNSZ) and the National Institute of Oncology

toxicology problems, such as altering hepatic biomarkers

(INCAN), discussing the potential for introducing phase

and other side-effects, our platform does not. Insulin to treat

one clinical trials in Mexico.

type 1 diabetes or factor VIII to treat type A hemophilia, for example, both consist of naturally-occurring endogenous

proteins encoded within human DNA structures, meaning

universities, research centers and other companies to

that the process of drug discovery dramatically changed

advance your technology?

with the arrival of biotechnology. We deeply understand

A: So far we have worked in collaboration with many

the molecules in terms of their structure, their physiology,

world-class prestigious scientific institutions in Mexico

their pharmacological and toxicological profiles, and their

to help us develop our technology, such as CINVESTAV’s

therapeutic dose windows. In the field of gene therapy,

Pharmacology Department, UNAM’s Instituto de Química,

the challenge has been developing processes to deliver

UNAM’s Instituto de Biotecnología and UAM Xochimilco, as

these DNA sequences that encode the therapeutic protein

well as organizations like the National Institute of Genomic

to a target organ in a manner that is safe, controllable,

Medicine, National Institute of Pediatrics, and the INCMNSZ.

and yields sufficient therapeutic protein to cure the

We view these interactions as historically fundamental in

condition. The fact that GBT’s technology meets all these

Mexico’s transition to an economy of knowledge and these

requirements displays that, far from creating risk, we can

affiliations earn us additional credibility within the industry.

greatly reduce the danger involved in hepatic-based gene

From these inter-institutional collaborations, not only do

therapy. We complement these processes with extensive

our institutions learn the complex process of biomedical

in vitro tests that provide information about how cells

pharmaceutical innovation, we also benefit financially from

and tissues react in the presence of this therapy, as well

CONACYT’s funds.

What

partnerships

have

you

established

with

as employing stringent risk management techniques, such as applying scientific rigor, quality control in terms of

Q: What problems have you experienced in presenting the

personnel and affiliates and incorporating any necessary

technology to major pharmaceutical companies?

development points.

A: Regenerative medicine is divided into two branches: gene therapy and stem cell therapy. We are actively seeking

Q: In what way are COFEPRIS regulations conducive to

partners within the pharmaceutical industry that might

launching gene therapy technologies within the Mexican

be interested in GBT’s hepatic vector delivery platform.

market?

Companies such as Sanofi, GSK, AstraZeneca, Novartis, Novo

A: Mexico is a relatively young country, which is developing

Nordisk, and Baxter have expressed interest in the emerging

rapidly, meaning that terms like innovation, scientific

biomedical field of regenerative medicine and have made

entrepreneurship, and research and development remain

substantial investments with other startup companies. We

relatively new concepts in our collective consciousness.

have also tried to collaborate with Mexican pharmaceutical

Our regulatory body COFEPRIS must make a concerted

companies, but efforts have been relatively unsuccessful

effort to maintain the global pace and must prioritize

since Mexican pharmaceutical companies are comfortable

the implementation of adequate guidelines for new

within the domestic market and do not view innovation as

technologies like gene therapy, since enforcing these

a driver for growth. Mexican pharmaceutical companies

rules and guidelines is at the core of acquiring global

overlook the concept of innovation as a central element of

credibility. Given our geographical proximity to the US,

corporate competitiveness and survival generally perceiving

Mexico has the potential to become a major strategic hub

R&D as a luxury rather than a vital investment. The innovation

of pharmaceutical development, and although COFEPRIS

process iis time consuming and expensive, yet the rewards

has made strides in terms of regulatory framework,

in global markets are hugely attractive and we want to be

there are still no regulatory guidelines for gene therapy

the pioneer that positions Mexico as a nation with the talent,

in the country. As a result, we contracted a European

the passion, the drive, the focus, the perseverance and the

firm to draft GBT’s regulatory protocols for our various

knowledge to innovate and compete on a global scale.

165

| VIEW FROM THE TOP

INCREASINGLY SOPHISTICATED THIRDPARTY MANUFACTURING ALEJANDRO CALDERÓN DÍAZ Director General at Grupo IFACO Q: As a reaction to the developing market, how has the

A: Since GBT has developed a platform technology through

company evolved since its creation?

which several pathological conditions could be treated,

A: Grupo IFACO was created as a third party manufacturer

several criteria are taken into consideration when selecting

for international companies, but during the 1970s we

GBTs therapeutic programs. We are currently focusing on

changed our business model to incorporate an increased

developing three therapeutic programs to combat diabetes,

focus on our own brands. The removal of the regulations

hemophilia, and cancer respectively, a program specifically

requiring international companies to have a manufacturing

aimed at areas with unmet medical needs. We applied for a

plant in Mexico saw a drop in the country’s production

grant in order to develop a solution for type I diabetes, and as

capacity as factories were relocated. Since then, the

the government has a vested interest in developing solutions,

Mexican generic market has increased in volume but

the proposal was granted. We chose hemophilia because it

reduced in terms of value, with products more accessible

is a pathology involving just one damaged gene that could

to the general population even as pharmacies’ profit

be easily repaired using gene therapy. In terms of cancer

margins are adversely affected. Pharmaceutical companies

treatment, our technology is robust and extremely safe,

are therefore renting underused spaces to manufacturing

and our laboratory results suggest it may well be useful for

companies. The arrival of international companies in Mexico

solid tumors. For investment purposes, companies require

has provoked seismic changes in the market and initiated a

promising data, which we have presented for our gene

return to third-party manufacturing practices, both for raw

therapy technology. Meanwhile, we are still generating data

materials and finished products. We have also expanded

on biodistribution, toxicology, safety, and efficacy, which are

into biotechnology and the complexity of these products

the most important elements to evaluate in gene therapy.

has seen us develop and implement highly sophisticated schemes in collaboration with several different actors. The

Q: What adjustments are you making to your generics line

resulting strategies are similar to joint ventures, with the

in response to increased competition?

common goal being the development and production of

A: From the outset, we have focused on the quality of our

biotechnological products.

products as a key perpetuator of growth. We are expanding our offices by 5,000m2 to increase our biotechnological

Q: In what ways are you collaborating to manufacture

capacity, as well as investing in panels and equipment

biotechnological products?

that have never been used previously in Mexico. Once

A: While we have been manufacturing human growth

our plant expansion is complete, we want to secure

hormone and insulin for several years, we are now

accreditation from the FDA and EMA for the production

beginning to integrate more complex molecules that

of biocomparables and generics. COFEPRIS does not

require specialized equipment and professionals. We are

currently have collaboration agreements with either agency

collaborating on this project with several companies from

but their approval will greatly simplify exports. We must

the US since these investments demand a level of skill and

be capable of guaranteeing that the products released to

investment that no one company is capable of providing.

market are of the highest quality, although our products are

The collaboration also fuses our two principal knowledge

already comparable to those products we currently use as

bases, with the ultimate goal of developing and exporting

references. Our product lines range from common drugs

these products, since our production capacity exceeds

with a cost of approximately MX$20 to highly sophisticated

the demand of the Mexican biopharmaceutical market.

products, and our drug development strategy involves the

Biotechnology is a medium-term investment, meaning

release of a generic equivalent as soon as a given patent

that it generally takes longer to see a return than similar

expires, meaning that COFEPRIS approval is our priority.

investments in chemical products.

Another goal is to make our products accessible to those without social security, since half of Mexico’s population

Q: What diseases are you aiming to tackle?

166

faces a restrictive budget and a lack of access to medication

and healthcare services, and as a solution we aim to lower

Q: What challenges has Grupo IFACO faced during its

prices for products aimed at that demographic. The key to

time in the manufacturing industry?

this is a new distribution channel called the “impulse market”

A: After the 1985 earthquake in Mexico City, the government

consisting of large wholesalers who sell to pharmacies, small

encouraged manufacturers to diversify in terms of locations,

hospitals, and clinics generally frequented by individuals

so we moved our three laboratories and their corresponding

with a low income.

offices to Guadalajara. Collaboration with the Biocluster in the region has been problematic, since many companies

Q: How have distribution channels evolved in the last few

are unaccustomed to cooperating. We have worked with

years to meet market requirements?

universities, but collaboration with private companies

A: Traditional channels have been impacted by the

is made difficult by a lack of government regulation.

introduction of international pharmaceuticals to the

Moreover, through Cryopharma we produce seven different

market. The pharmaceutical market has also changed

active

enormously since the introduction of generic medicines at

the manufacture of our own brands, but we have since

the end of the last century. This has given the industry a

begun to commercialize them to third parties. Several API

dynamism that it had been lacking for decades, and has

manufacturers left the country before pharmaceutical

forced existing market leaders to adopt more strategic

producers followed suit, meaning a lack of competition for

policies. The largest retailers used to be national companies

the domestic industry; a problem that has been exacerbated

such as Nadro and Casa Saba, but regional companies

by increased competition from India, China, and South Korea.

have encroached on the potential offered by the impulse

A further complication is that medications sold to the public

market by focusing on the pacific, southeastern, and

continue to drop in price. When the API is manufactured in

central regions of the country. These distributors are

Mexico, this product fulfills the “national content degree”

isolated and their territories do not overlap, and so their

required by government regulations, provided that the

business model is to create strong relationships with their

API represents 65% of the final price with the remainder

clients and intensify local presence.

constituting foreign products, manufacture, and distribution

pharmaceutical

ingredients

(APIs),

initially

for

costs. Fulfilling the national content degree allows a product Q: The Trans-Pacific Partnership (TPP) aims to lengthen

to participate in the government’s tenders, which account

patent protection - how does this agreement affect your

for 80-90% of the government’s purchase of medications,

business lines?

medical supplies, and devices. This requirement was obtained

A: Mexico has experimented with several different free

from acquisition laws influenced by free trade agreements

trade agreements, so we have learned to adapt quickly

with the US and the percentage has been slowly increasing

to change. NAFTA oversaw the development of a legal

from 50%. The problem is that the final price of a product has

framework for patents and industrial property but this

been lowering and this, alongside the high exchange rate, has

subsequently led to abuses, mainly from patent-owners

generated concern within the industry.

attempting to extend their protection period. The TPP also aims to implement other conditions, such as a specific

Q: What are your expansion plans and priorities for 2015?

waiting period for the clinical data of biopharmaceuticals.

A: We hope to have completed construction of our new

The TPP will be principally beneficial in countries where

biotechnology plant in Jalisco by the end of this year,

companies generate patents for global enforcement. On

increasing API production and incorporating new product

the other hand, these regulations will limit the amount

lines such as prefilled syringes. By this point, we will have

of medications that the government can acquire at low

an aggressive commercialization scheme in place to

prices through consolidated purchases, meaning that the

tackle the impulse market. Our attention is focused on

population is likely to face restrictions in access to certain

distributors to government departments which do not

medications. Mexico is in a precarious situation since our

operate through tenders. Next year we plan to restart

regulation for biotechnological drugs is rather new and

new promotion strategies targeting doctors and patients,

most innovative medicines are biopharmaceuticals, so

which we aim to accomplish with select products, since our

increasing the patent protection period will limit Mexico’s

short-term goal is to enter this niche market. Eventually,

market participation. A major issue is transparency and

production capacity will be high enough to justify exports.

due to the highly confidential nature of the majority

COFEPRIS’ reputation as a regulatory agency is solidifying,

of the discussions and proposals thus far, there is little

which will facilitate the acquisition of international

public knowledge of the exact wording of the proposed

certifications. We currently have strong partners for our

law. CANIFARMA, just like all agencies involved in these

current biotechnological lines, but are constantly looking

negotiations, had to sign a confidentiality agreement.

to extend our collaborations.

167

BRINGING IMMUNOTHERAPY RESEARCH TO THE INDUSTRY After 25 years in a comfortable position as a research

the quantification of sexual hormones, and later with

professor at the IPN’s National School of Biological

a methodology for measuring interferons, the proteins

Sciences, Juan Padierna decided to branch out alone

released in response to pathogens. This methodology

and pursue the establishment of his own clinical analysis

was much more complex than the previous, involving

laboratory with his brother, Luís Padierna Olivos, and son,

cell cultures, virology, biochemistry, cell biology, and

Alberto Padierna. The two brothers had studied the immune

biostatistics and was a stepping stone into broadening their

system, analyzing diseases such as AIDS, viral infections,

expertise even further. They began to take advantage of the

and cancer, so it was logical that the laboratory would take

vast network of researchers accumulated over the years at

advantage of this vast experience in immunotherapy.

IPN, allowing them to create innovative methodologies and

“Recently molecular biology has become more aknowledged by professionals; however, more efforts are needed to push forward applications such as genomic and personalized medicine” Dr. Juan Padierna, CEO of Laboratorios de Especialides (LEI)

With little funding success, was far from guaranteed, but

attract new investment in 15 different fields ranging from

fortunately for the Padierna family the project was swiftly

accounting to veterinary medicine.

padded out with patient referrals from their existing network of connections, supporting their niche project

LEI started using molecular biology to diagnose HIV in the

from the outset without depending on external funding.

1990s, to measure how patients responded to treatment.

Most of their ideas came from knowledge gathered through

Later, they moved towards diagnosis, but since regulatory

research which had yet to be applied in the industry. For

authorities require further tests to confirm a positive

example, when evaluating a patient whose immune system

diagnosis, molecular biology has progressed slowly in Mexico:

had been compromised by a disease such as AIDS, cancer,

professionals until recently lacked knowledge of molecular

or tuberculosis, it is more important to know the cellular

biology, and either did not know the basics or were surprised

immune response than the humoral immune response,

at the cost of performing these tests. Over the last two or

and to test this response they used intradermic stimuli.

three years, molecular biology has become more recognized

If there was no reaction, they analyzed the macrophage

by these professionals. Since the company’s main goal was

migration inhibitory factor, followed by a very simple

to increase knowledge in order to provide a wider range

measurement of the number of T lymphocytes and their

of services, they invested in creating a molecular biology

involvement in a positive or negative response. Such tests

laboratory in Mexico, following the specifications of the CDC.

are basic and have been performed since the beginning of

This laboratory is self-sustaining and is key to the company’s

the twentieth century, but they had not been integrated,

aim to foster a culture for molecular biology, which can

and incredibly no other laboratory in the world performed

implement genome therapies and personalized medicines.

these integrated tests. Padierna’s intention with such tests was, from the start, to make other laboratories dependent

With

on their work, to become leaders in the industry.

that knowledge is not enough anymore. They rely on

it’s

scientific

rooted

background,

LEI

knows

collaboration to offer a specialized service that is different

168

LEI’s initial work as a clinical analysis laboratory allowed

from organizations focused on innovation with technology

them to branch into other areas rapidly and by 1992 the

transfer units that require someone to generate an idea and

Padierna family started working with Serono, a national

someone to develop it for the market. LEI is able to adapt

pharmaceutical producer aiming to measure the potency

to very specific requirements and to the letter, performing

of a thymus extract acting as an immunopotentiator, borne

original research and collaborating with various universities.

on Juan Padierna’s international expertise in rosettes, the

To mention but a few, an education project with the Technical

required methodology for this procedure. This was the

University of Tecámac provides training and experience to

first step in their collaboration with the pharmaceutical

students, and a joint project with IPN expands their research

industry and the success encouraged Serono to seek their

into investigating Streptococcus pneumonia, the results of

expertise performing more difficult procedures involving

which will be used by pharmaceutical companies.

BIOTECHNOLOGY CONNECTIONS In 2007, after an in-depth analysis of Mexico’s healthcare

opportunities for all parties interested in the sector. To

needs and strengths, Bioconnect was created. While other

develop Mexico’s life sciences sector, every opportunity

companies focusing on the Mexican life sciences area were

ought to be explored.”

mostly concerned with linking academia to the government, Bioconnect aimed to implement a triple helix concept,

At this point, Bioconnect is strongly interested in

a successful model for university-industry-government

attracting investors. To this end, the company is working

relationships. The company focuses on a key event aimed

to align the interests of a range of key stakeholders,

business

including entrepreneurs, universities, angel investors,

opportunities within the Mexican life sciences industry, a

mentor networks, and venture capitalists. Bioconnect’s

sector strategic to the generation of business and investment

conferences, and innovative programs focus on relationship

opportunities. The event, which is currently in its seventh

building to provide new opportunities for universities and

edition, aims to foment strategic interactions to promote

researchers in Mexico. Bioconnect is currently collaborating

innovation and bring together the main players in the sector,

with CONACYT and supports students to promote their

academia, government, and industry. The event offers the

projects by giving them the necessary information relating

opportunity to connect with leaders in the sector, conduct

to commercialization in the country. Gravina says, “we

business meetings, attend conferences on the main events

are obliged to make entrepreneurs and science students

facing the healthcare industry, and propose new projects.

aware of possible funding routes. We also provide support

Bioconnect has tirelessly worked to link academic research in

throughout the process of obtaining those funds.”

identifying

and

capitalizing

Mexican

life sciences with market opportunities in the health sector. At this point the sector is facing important opportunities, as well

While the company is strong, there is a strong desire to

as challenges to close the gap between these three players.

expand. In 2015 Bioconnect aims to continue integrating

Enzo Gravina, Director General of Bioconnect, explains that,

the

“aggressive strategies will bring together all stakeholders

universities, and consultants into the existing structures of

in the life sciences industry.” In his opinion these strategies

the life sciences industry. As Gravina expalins “we plan to

are vital in order to raise the science and technology sector

link these potential projects across the industry, promote

to 1% of the national GDP. Gravina believes that “the sector

development in the field of technology throughout the

needs to generate more jobs and new scientific discoveries,

country. We will also continue to promote Bioconnect as

but also must invest in networking and technology-transfer

an excellent technological partner for all research centers.”

technology

developed

research

centers,

169

Many Mexicans are either diagnosed in the late stages of disease or not diagnosed at all, which

represents a serious threat to public health. Areas of particular concern include diabetes, cancer, and other chronic and degenerative diseases. Innovative measures should be taken to ensure timely diagnosis as a means of supporting prevention and providing promptly treatments. The diagnostics business is growing in Mexico, and laboratory chains are expanding and improving their quality standards. Additionally, new techniques and services are being developed and provided such as DNA tests for HPV, HCV, HIV, cancer, telemedicine, and biomarkers for personalized medicine. The Government is developing new norms for diagnostics, such as NOM-041-SSA2-2011, which sets the standard for prevention, diagnostics, treatment, control and vigilance of breast cancer. Greater convergence is needed amongst insurance companies, private hospitals, the pharmaceutical industry, and the public sector when it comes to access to diagnostics, especially for the low-class socioeconomic class.

The chapter will provide an analysis of the diagnostics field in Mexico, its principal actors, their actions for improving access to diagnostics, quality standards and innovative tests and the important link between diagnostics and prevention.

HIGHLIGHTS • Role of diagnostics in the prevention of disease • Diagnostic chains • Quality certifications of diagnostics laboratories • Innovative techniques for viral and complex diseases • Government actions for increasing access to diagnostics

DIAGNOSTICS

CHAPTER 7: DIAGNOSTICS 174

ANALYSIS: Diagnostics: The Front Line in Early Detection

176

VIEW FROM THE TOP: Carlos Hernández Álvarez, Siemens Healthcare Diagnostics

178

VIEW FROM THE TOP: Carlos Septien Michel, Grupo Diagnóstico PROA

179

ANALYSIS: Franchise Market Support Boosts Laboratory Chain Coverage

180

VIEW FROM THE TOP: Abelardo Perches, CTR Scientific

182

EXPERT OPINION: Aldo Zavalza Mendoza, IMS Health

183

INSIGHT: Julián González, Check-up Center

184

VIEW FROM THE TOP: Félix Valverde Espinoza, Quest Diagnostics

185

SPOTLIGHT: Laboratory Automation in Mexico

186

VIEW FROM THE TOP: Franck Admant, bioMérieux

187

ANALYSIS: Gene Sequencing Changing the Rules of Drug Prescription

188

SPOTLIGHT: Prenatal Diagnostics

189

ANALYSIS: Reduced Margins of Error for Mammograms

173

DIAGNOSTICS: THE FRONT LINE IN EARLY DETECTION With an ageing, increasingly urbanized population, the

There are significant opportunities for the diagnostics

country is facing an unprecendented challenge in the tackling

segment in Mexico. For instance, late HIV testing comprises

of obesity-related chronic illnesses, which are pushing the

50% of all new identified seropositive cases in Mexico. In

already stretched healthcare budget to breaking point. In

addition, 50% of breast cancer patients are diagnosed

addition, emerging infectious diseases such as influenza A

at stages three and four of the disease according to the

H1N1 and Chikungunya fever require modern techniques to

National Institute of Public Health (INSP), and 14,000

be identified and studied thoroughly. In the current medical

new cases of prostate cancer are diagnosed annually, of

environment, there is a greater need than ever to develop

which 8,000 are in advanced stages. A study aimed at

more sophisticated diagnostic methods and to make them

describing the prevalence of early diagnosis and treatment

available for people to be diagnosed in a timely manner.

of hypertension in Mexico found that 47.3% did not know

This is aimed at alleviating the strain on overburdened areas

they had this condition.

of the health system, such as primary clinics and hospitals, and shift focus onto preventative care and early detection.

Diagnostics companies such as Grupo Diagnóstico PROA, Quest Diagnostics, Laboratorios Dr. Moreira, Laboratorio

In 2012, the global market for diagnostics represented

Médico Polanco, Check-Up Center, and Analitek are

US$45.6 billion and is expected to grow by 7% annually

emerging as market leaders in preventative medicine

over the next five years according to Frost and Sullivan.

in Mexico. Much of the diagnostic technology such

At this point the US and Europe account for 60% of this

as tomography has been in use for decades, but only

market. In developing countries diagnostics growth is

recently has its value been capitalized upon, as health

led by the local government’s need to provide access to

professionals realize that long-term savings of early

quality healthcare, but it is being hampered by budget cuts

diagnostics outweigh the initial costs. Laboratory chains

and regulatory hurdles. Diagnostics is a rather large area

for diagnostics are growing steadily in Mexico and their

that comprises several different methods and strategies.

value proposition is based on easy access, certifications,

Carlos Hernández Alvarez, Regional Director of Siemens

and customer-oriented services. Economies of scale and

Diagnostics Hispanoamerica, explains that there are three

knowhow have also been key in their growth.

general methods for diagnostics: “the first method, which focuses on the physical test from a physician, is a technique that is rarely used nowadays. The other two methods are much more popular through imaging techniques or through clinical tests.” The latter is constantly being updated and new tests are under perpetual development to facilitate and speed up diagnosis. For some diseases a timely diagnostics may be the difference between life and death. One of the biggest costs for the health system in Mexico is obesity-related diabetes, with 6.4 million people suffering from this disease according to ENSANUT. On the surface, diagnostics may seem problematic due to the costs associated with research and equipment, but a study published by the NIH found that pre-emptive eye tests to diagnose chronic diseases, such as diabetes, meant a decrease in overall health costs for the patient, less absenteeism and a reduced likelihood of employment being terminated. Moreover, a study carried out by the Epidemiology and Health Services Research Unit of IMSS in 2010 found that for each US$1 invested in prevention

174

through the pre-diabetes and hypertension program

Developments in the in vitro diagnostics segment –

PREVENIMSS, between US$84 and US$323 would be

molecular diagnostics for infectious diseases, chronic

saved over a twenty year period. The study concluded that

diseases, oncology, and genetic testing – has made

there was also still room for government investment in

it possible to detect diseases in a more accurate and

prevention and diagnostics.

effective way. Félix Valverde Espinoza, Regional Director

of Quest Diagnostics Mexico, states that â&#x20AC;&#x153;a growing

Among the first applications of personalized medicine

worldwide trend is the rise in molecular and DNA-based

investigations is trastuzumab, a monoclonal antibody

tests.â&#x20AC;? These can comprise clinical tests for several

used to treat a specific form of breast cancer in which the

viruses and bacteria and are of utmost importance to

HER2 protein is over-expressed. This type of breast cancer

the population. For instance, in 2009 the Institute of

represents 30% of all cancers of this type and generally

Diagnostic and Epidemiological Reference (InDRE), the

does not respond to standard therapy. Other such

Mexican counterpart of the Center for Disease Control

examples include Zykadia, a drug that has been approved

(CDC), required rapid implementation of protocols for

recently in Mexico, developed to treat non-small cell lung

the detection of AH1N1, popularly known as swine flu to

cancer (NSCLC) caused by a defect of the anaplastic

measure and control the outbreak in Mexico. Other new

lymphoma kinase positive gene (ALK+). While NSCLC

developments are tests for the detection of HIV and

represents about 85% of lung cancers, only approximately

the Human Papillomavirus (HPV) with the objective of

5% of patientsâ&#x20AC;&#x2122; tumors are ALK+. Personalized medicine

identifying several strains. For example, the FDA approved

can also be used in other areas, such as cardiovascular

a new assay for the differentiation of HIV-1 and HIV-2

diseases. The main method to prevent rejection of a heart

antibodies, and HIV-1 p24 antigen in July 2015. HIV-1 is the

transplant was an endomyocardial biopsy, an invasive

most common strain of HIV worldwide and HIV-2 is most

procedure that cannot be used on all patients. Now,

commonly found in West Africa, but cases of HIV-2 have

genetic tests performed on a blood sample are a non-

been identified in other countries. Differentiating between

invasive alternative to manage the care of post-transplant

both strains is important as, while both diseases show the

patients.

same symptoms, they progress at different rates and thus require different treatment schemes. This test, the BioRad

Mexico is moving forward in the acquisition of new

BioPlex 2200 HIV AgAb assay, can be applied to children

technologies for diagnosis. Although initially costly,

over two years of age, adults, and pregnant women. It can

advanced diagnostic methods such as genomic sequencing

also be used to screen organ donors. As for HPV tests, the

and preemptive tomography testing can reduce the long

cobas HPV Test which simultaneously detects 14 different

term financial demands on the health service. Moreover, the

high-risk HPV types provides specific information on HPV-

negative implications associated with manual diagnostics

16 and HPV-18. This test amplifies DNA using Polymerase

could be avoided and human error could be even further

Chain Reaction (PCR) and nucleic acid hybridization to

minimized,

identify high risk types at infection levels. It is meant to be

diagnostic techniques such as differential diagnosis and

used as a primary screening tool for cervical cancer and, if

pattern recognition. With an emphasis on diagnostic R&D,

results are positive, it should be followed by a colposcopy.

the medical industry could be revolutionized to the point

along

with

time

consuming

traditional

of longer life-expectancy, shorter waiting times, and an The completion of the Human Genome Project in 2003 has

optimization of services at a lower cost within both the

been a catalyst for an overhaul of the diagnostics industry,

public and private sectors.

heralding the introduction of a new, more accurate form of diagnostics based on genomic sequencing. The global genomic mapping project streamlined the diagnostic processes, facilitating a more comprehensive understanding of diseases, allowing physicians to prescribe appropriate treatments and more accurately predict potential side effects, as well as permitting the scientific community to identify mutations linked to fatal diseases such as cancer. In addition, the project led to the Mexican Genome Diversity Project, which was completed in 2009 and produced findings that revealed inherent differences in Mexican Mestizo DNA that make the population more susceptible to certain chronic diseases. This also resulted in significant implications for personalized treatment, recognizing that genetic make-up not only differs from population to population, but also on an individual level, and the smallest unique mutations can mean that a viable treatment option for one person is ineffective or even detrimental to another. The development of genomic mapping on a wider scale will not only encourage increased access to preventative medicine, but also a more targeted and accurate means of diagnosis, minimizing the possibility of complications during treatment.

175

| VIEW FROM THE TOP

STRIVING TO EXPAND AUTOMATION AND INNOVATION CARLOS HERNĂ NDEZ ALVĂ REZ Hispanic America Regional Director, Diagnostics Division of Siemens Healthcare Diagnostics Q: How long has Siemens Diagnostics operated in Mexico

future. Another challenges lies in providing information

and how important is this country to your global strategy?

to the Mexican medical community, which is often

A: Siemens Diagnostics is the combination of several

unaware of the latest developments in diagnostic testing.

companies that merged 80 years ago, including Bayer

For example, Vitamin D tests are utilized worldwide,

Diagnostics, Dade Behring, and DPC. These companies

especially north of the Equator where citizens get low

were all reference points for diagnostics and were present

sun exposure. While this test is extremely useful for

in Mexico for many years. Thus, the merger meant that

Nordic countries, it also provides a lot of information for

Siemens Diagnostics immediately had a strong diagnostics

countries like Mexico. This test has become widespread

division with an important presence in Mexico. Our priorities

in South America over the last four years but it has been

are to expand automation and lean laboratory principles in

largely ignored in Mexico. It can help to predict cardiac

the Mexican market, and to introduce innovative tests that

and renal diseases but doctors have not adopted it. We

are not used in Mexico, such as tumor markers and vitamin

need to educate the market as to the benefits of these

D tests. We also want to make clients comfortable with our

tests but this has proven to be extremely complicated so

products and services and demonstrate that the company

far. Our sales are not very different from those of other

is in Mexico for the long run. Siemens Diagnostics has a

companies. The government accounts for 70-75% and the

long term plan for Mexico and the rest of the world. It is

rest is taken up by the private sector. While the private

investing heavily in our country to reach the position it has

sector is growing in Mexico, our government is constantly

in other markets like the US.

challenged by the increased demand from an aging population and growth of chronic diseases.

Q: What are the main opportunities for your products in

176

Mexico?

Q: What percentage of the healthcare budget is allocated

A: In vitro diagnostics and laboratory automation are

to diagnostic equipment?

highly important fields that are currently underutilized in

A: This is a difficult number to determine. There is a

Mexico. The reason is that both the public and private

rule of thumb worldwide that states that roughly 4%

healthcare sectors face severe constraints, whether due

of healthcare budgets are spent on the operation of

to swingeing budget cuts or investor concerns. These

laboratories, where around 70% of clinical decisions are

pressures are not unique to Mexico; other countries

made. In Mexico, this calculation is not straightforward as

are also facing an aging population, a prolonged rise in

the healthcare system depends on a variety of systems

chronic diseases, and budget cuts from their respective

and institutions. While hospitals have clear budgets

governments. However, while citizens in other countries

for medical devices, these are not properly defined.

are demanding more resources from their government,

Approximately US$474 million is spent on IVDs but this is

Mexico must respond to budget cuts either by reducing

tallied up as part of expenditure on medical devices. Thus,

costs or reducing investments in less profitable activities.

authorities have to choose to spend on medical devices,

While automation is being used to liberate resources

medical products, or even treatments themselves. This has

and increase efficiency in the likes of Argentina and

led to a situation where institutions prefer to spend their

Chile, this trend is very contained in Mexico. The Mexican

budgets on tried and tested products. Another problem

government is also trying to implement a strategy that

is that all information on treatments and expenditure is

focuses on prevention, mainly for obesity and diabetes,

decentralized. There are reams of laboratory information

but could also consider the potential that laboratory

spread across many laboratories but no one seems to

testing has for this same purpose. IVD tests can provide

be using them for research purposes. We obtain most

early diagnostics that allow health professionals to make

of our information from surveys carried out by market

timely decisions in the management of chronic diseases

consultants as there is little access to public records for

and prevent greater expenses to the health system in the

such information.

Q: How can this situation be fixed so that laboratories can

A: Opinions about such innovation are mixed. Most of

share data and what would be the impact of implementing

our customers demand IT solutions as they are faster

a shared database?

and easier than informing patients manually. It is now

A: It is this rather frustrating to know this information

essential for most companies to have an information

exists but is not being used in the right way. For example,

system that will generate reports and store data about

patients tested for tumor markers, hormones, glucose,

the patient’s medical history. However, no single analyzer

or cholesterol leave records at their hospitals but that

can perform all tests so all laboratories must have a

information is kept on stand-alone systems. This means

range of different equipment to fulfill all their needs.

a holistic, multi-centric analysis of this information

We call these standalone systems. With standalone

cannot be implemented; it must be carried out through

systems, laboratory technicians often need to move

smaller analyses at every single center. There are ethical

back and forth in the lab to perform all necessary tests,

considerations as patients have a right to privacy but

or to divide the sample into smaller ones that can be re-

we can obtain a lot of significant information without

expedited wherever necessary.

violating their privacy. This data will allow us to determine many trends in the health of the Mexican population.

Automation can connect all standalone instruments into

While many hospitals publish information of this kind, a

an intelligent unit that performs all the necessary tests

complete database of all this data should be gathered

without human intervention. This will allow laboratories to

from all hospitals to determine the right trends. Without

relocate people to optimize their time instead of forcing

these networks, research cannot blossom as researchers

them to repeat tasks. Automation will also reduce the need

are isolated. When this information is consolidated,

for manual sample manipulation, thereby reducing the

I am sure researchers will find data that will allow

risks of contamination, human error, and hazards to health

them to tackle many of Mexico’s health problems in a

care practitioners. To date, few Mexican laboratories have

comprehensive way.

incorporated this automation equipment. While such new pieces of equipment entail high initial costs, worldwide

Q: Siemens Diagnostics has a very broad range of

experience is that laboratories realize permanent cost

products. What are your major divisions?

reductions and productivity increases in the long-term.

A: We have several major divisions. One of them

The total cost of ownership, accounting for time spent,

encompasses

the training staff undergo, and the number of samples

hormones, tumor markers, infectious diseases, allergies,

immunochemistry,

which

usually

performed, among other factors, should be properly

and clinical chemistry. Another is automation, in which

considered when making a holistic analysis of the

we are putting a lot of effort as we have the technology

implementation of these technologies.

and knowhow to rapidly develop it. We have an additional division covering hemostasis, hematology, and specialty

Q: How much do you rely on distributors and how do you

tests. Within this division, we have instruments to

choose them?

manage coagulation and hematology, including blood

A: A large segment of our market is handled by

cell counts and special tests such as therapeutic drug

integrators,

monitoring and the measuring of plasmatic proteins. We

specialize in providing turnkey solutions to laboratories.

also have a specialized division named “point of care”

While we have a large portfolio, there is no company

which targets small clinics, outpatient and specialty

anywhere that can fully cover all the needs of all

centers. This division has a very unique mix of products

laboratories. Integrators take care of consolidating the

since these isolated centers need smaller instruments

needs of the market and providing complete solutions.

and a lot of connectivity to send the information they

They also provide technical and logistic services to

collect to larger systems. The final area is our molecular

remote areas that we are unable to access, and make

biology division, which is producing innovative and

investments that governmental institutions may be

unique biotechnology products. For example, we have

unwilling to make. We also have distributors that

put forth specialized molecular biology tests allow that

make our products available into different segments

detect HIV/AIDS with higher certainty than other types

and geographies across the country. We are investing

of tests.

heavily in properly training our distributors to ensure

highly

sophisticated

companies

that

that they are qualified to represent our products. In Q: How open are your customers to adopting new trends

some way, they represent us even better than we would

in informatics and digital communications and what is the

represent ourselves since they have the advantages of

role of automation?

a local presence and knowledge.

177

| VIEW FROM THE TOP

LEADING DIAGNOSTICS CHAIN EYES EXPANSION CARLOS SEPTIEN MICHEL General Corporative Director of Grupo Diagnóstico PROA

Q: How would you describe Grupo Diagnóstico PROA’s

will gradually increase our efficiency, and as the general

position in Mexico? What are your plans as its new

population begins to be more aware of preventive measures

director?

to safeguard health we will be able to lower costs by making

A: As clinical analysis and imaging laboratories, we are market

our systems more efficient. Personal economics will also play

leaders. We have 200 branches in seven states in Mexico

a part in our growth. Our challenge within the sector is to

which makes us leaders in terms of coverage and we plan

develop methods for providing necessary tests at affordable

to continue to broaden into other regions. This expansion is

prices. Other laboratory chains are entering the market

part of our organic growth and will be performed through a

and we welcome competition since we believe that clients

complete analysis of the area and optimization of logistics

provide indirect feedback about the quality of services when

for sample handling and transportation and will require

choosing a provider. The challenge is to implement the

modification of our business practices to adapt. We are also

necessary internal infrastructure to be able to satisfy client

anticipating inorganic growth, through acquisitions and

needs, especially since customers are becoming increasingly

alliances with laboratories in the region and we are seeking

demanding and aware of consumer rights.

access to large populations that we can service through our current structure. At this point our expansion plans

Q: Is Grupo Diagnóstico PROA working with the public or

are limited to Mexico, with a view to growing at a rate of

the private sector?

20 branches per year. As Director, I am currently focusing

A: We are working with both. In the case of the private sector

on optimizing internal controls and processes allow us to

we are implementing several strategies, such as provision

become more efficient and reduce our operation prices.

of services to insurance policies for major and minor health

This will help us to handle our planned expansion and to

expenses. By increasing these collaborations, insurance

provide integral services for our patients and physicians, as

providers are able to offer these products to their clients and

well as working within the medical community to provide

optimize the cost-benefit ratio of their policies. Furthermore,

better services and foster collaborative growth. We also

the public health sector is becoming increasingly saturated

want to provide added value in the form of genomic tests,

so it is becoming increasingly necessary to provide

more advanced systems, and more specialized studies,

competitive services to care for these patients. Grupo

while maintaining our position at the forefront of the sector.

Diagnóstico PROA is also collaborating with the public health sector, which has plans to subrogate some services

Q: How would you describe the Mexican market for

such as hemodialysis, diabetes treatments, and laboratory

diagnosis?

management. As the government has limited services and

A: We perceive that Mexico has a lot of potential for growth

the population’s healthcare needs keep increasing, it is

in the diagnostic sector, mainly in preventive diagnosis. At

becoming more necessary to outsource to third parties from

this point the country needs to improve its infrastructure

the private sector that can match these needs. We aim to

and provision of raw materials for molecular and genetic

generate mutually beneficial collaboration strategies with

diagnosis in order to be better equipped and to nationalize

the government and as the population expands, so will the

testing. We as service providers have an opportunity

need for these services.

to perform tests targeted at diseases that are currently

178

growing in the population. Laboratorio Medico del CHOPO

Q: Do you believe there is a growing interest on prevention

provides these tests at affordable prices which is beneficial

on the general population?

for the health sector as a whole as it lowers the general

A: Yes, I believe there is a growing awareness on preventive

costs of medicine and creates greater accessibility. We are

care and individuals are becoming increasingly aware of

complementing this by providing access to state of the

the implications of preemptive healthcare. The government

art equipment through escalation of costs which allows us

is also implementing prevention campaigns such as

to offer more competitive prices. A larger volume of tests

“Chécate, Mídete, Muévete” and Grupo Diagnóstico PROA

is allocating more funding to advertising in anticipation of

institutes of health on several tests to analyze the human

growing demand. Our goal is not to create alarm but to

genome. At this point, the most common DNA tests are

generate awareness of the many types of tests available

paternity tests, which have been used for many years. We are

to the public, including genetic tests that will allow the

also collaborating with universities and we have a scholarship

mapping and prediction of potential susceptibility to

program as we try to maintain relationships with future

certain diseases. We already offer genetic tests and, while

medical professionals. We are currently collaborating with

these are still relatively few in number, we are planning

Universidad La Salle, Universidad Autónoma Metropolitana

to promote this area. These tests are expensive and by

(UAM), the National Council for Professional Technical

performing them on a large scale we hope to lower prices.

Education (CONALEP), the National Evaluation Center for Higher Education (CENEVAL), and the National College of

Q: What areas of diagnostics are you planning to expand?

Colposcopy Education and Research.

A: We plan to expand our imaging services to provide greater value to both our patients and the medical community and we

Q: Does Grupo Diagnóstico PROA have any certifications?

are actively incorporating telemedicine into our practices to

How important are they for the sector?

optimize our timescales and coverage. Some of our equipment

A: Certifications are extremely important for us as

already incorporates telemedicine software and automatically

they provide the certainty that we are implementing

sends data to physicians in real time upon completion of tests.

international standards for our clients. We cannot overstate

We are also increasingly using the internet to electronically

their importance in terms of patient safety and security,

mail test results to doctors and patients and we have a

especially with the growing public awareness of quality

cellphone app which allows results to be downloaded onto

standards within the medical industry. Our advantage is

a smartphone. These services will greatly benefit rural areas

our capacity to perform a large number of tests with high

by utilizing large networks. Another growing market trend is

quality and thus have lower unit operation costs, whereas

the automation of devices, which we are already incorporating

smaller laboratories may have trouble obtaining these

into our laboratories. We are currently working with several

certifications as these will raise operational costs.

FRANCHISE MARKET SUPPORT BOOSTS LABORATORY CHAIN COVERAGE In an effort to generate more jobs in Mexico, in 2007, the

There are many benefits to franchising a store instead of

former Governor of the State of Mexico, Enrique Peña

owning one. Firstly, franchises are an extremely effective

Nieto announced the launch of a new project aimed to

way to establish brand loyalty and trust from the consumer.

support franchises. Although there was no shortage of

Additionally, while higher profits tend to be generated by

clinical laboratories in Mexico, they typically operated on

owning a business outright, the risk level can reach 80%

a small scale and were extremely fragmented. Now, with

within the first five years. By entering into a franchise, this

an increased focus on franchising, some companies such

rate will not exceed 5% in the first five years, according to

as Laboratorio Médico del Chopo and Laboratorio Médico

consultancy firm, Gallástegui Armella Franquicias.

Polanco have been able to increase their market share within the industry, with the latter even being named one

Profitability of franchises, however, is highly dependent

of the top 25 franchises in Mexico among companies such

on the size of the investment, the business model and the

as Subway and Häagen-Dazs.

financial fundamentals. A constant review of business models and concepts is essential in order to maintain profitability of

The laboratories have seen an annual growth of 30%, due to

franchises, according to Juan Manuel Gallástegui, director

increased awareness among the Mexican population. This is

of consultancy Gallástegui & Armella. Careful analysis is

reflected in the fact that Laboratorio Médico Polanco owned

required in order to reduce overheads and investment,

ten units and 20 franchises in 2007, compared with the 49

while at the same time maintaining standards of quality

branches it currently owns. According to INEGI data, the

and service, therefore generating a higher rate of return.

average monthly earnings of the company are US$845,000,

The aim of franchising, says Enrique Alcázar of Alcázar &

80% of which comes from franchises and only 20% from

Aranday, is to reduce costs for the central company, while

owned stores.

simultaneously increasing presence and market positioning.

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| VIEW FROM THE TOP

MOLECULAR BIOLOGY DIAGNOSTICS ON THE RISE ABELARDO PERCHES CEO of CTR Scientific

Q: What are the main changes you have seen in the

industry. In academia our main customer base is within

market for diagnostics equipment while working for CTR

biomedical research and in the industry we are focusing

Scientific and how has your business strategy helped you

on industrial and quality control to support the monitoring,

to remain competitive?

prevention, and correction of environmental problems

A: I have worked for CTR for more than 35 years, and

before they occur. In the healthcare area we sell to both

during that time I have witnessed many changes in the

the public and the private sector, since it is not viable for

industry. Similarly to the communications industry, the

us to sell exclusively to one area. IMSS and ISSSTE are the

medical technology industry has undergone significant

main players in the public sector and IMSS is the largest

transformation in terms of how equipment operates, the

buyer in the country, with more purchasing power than

methodology used by doctors to request diagnostics,

any other institution in Latin America. IMSS is a strong

and the way patients provide information. We have seen

negotiator and is able to acquire products at very low

enormous growth in all areas of the medical devices market

prices, in part due to consolidated purchasing. The private

over the last five or six years. Today we have a diverse client

sector in Mexico is also growing at an accelerated rate,

base, including schools, hospitals, clinics, and research

which is helping to reduce the burden carried by IMSS.

centers, from small technical schools to the National

CTR Scientific owns investments in the private sector in

Institute of Genomic Medicine in Mexico City. CTR Scientific

every major city in Mexico but, in comparison to the public

has operated for 45 years and a key factor in our strategy

sector, the private sector is still comparatively small.

to continue being competitive in the market is remaining aware of the current global market fluctuations. Twenty

Q: How rapidly is Mexico evolving from a technology

years ago any new technology took from eight to ten years

perspective?

to be introduced to the local market, whereas the current

timeframe can take less than a year. Unfortunately that is

certain industries and the country is quickly acquiring

not the case for clinical laboratories, since their equipment

the latest technology in DNA sequencing. Polymerase

must undergo a time-consuming registration and approval

Chain Reaction (PCR) is a Nobel Prize-winning process

mechanisms by COFEPRIS, a process which has been

that rapidly replicates DNA. The PCR process was

streamlined in recent years. Even so, the situation has

patented 15 years ago and is now used widely by

improved considerably as COFEPRIS has been improving its

crime scene investigators due to its enhancement of

approval process. Globalization has allowed companies in

derivative techniques, helping to simplify evaluation

Europe and the US to expand into Latin America, meaning

and interpretation. Most research institutes in Mexico

that new platforms are being introduced to the Mexican

act as a platform for significant research using PCR and

market. In my opinion the healthcare system in Mexico is

DNA sequencing. Development of the DNA sequencing

among the best in the world. One current problem is that

process allows medical professionals to assemble a

sometimes diagnostics technology is not properly utilized in

comprehensive overview of patient history, as well as

Mexico, which is a lost opportunity. The reason is that labor

predicting potential future illnesses. Many universities

costs in the US are high compared to Mexico, therefore in

and research centers are now opening biotechnology

the US it is sometimes necessary to speed up a process in

laboratories and, while several years ago most in-depth

order to save costs. The situation is very different for Mexico

research was conducted in areas in and around Mexico

as labor is much cheaper than equipment.

City, the industry has seen a recent expansion across the

Mexico

developing

quickly,

especially

within

country, lately. Universities such as the UNAM and the Q:

180

What

areas

are

you

predominantly

providing

Instituto Politecnico Nacionalâ&#x20AC;&#x2122;s Center of Investigation

equipment to?

and Advanced Studies (CINVESTAV), among many others,

A: At this point half of our sales come from the healthcare

are paving the way for areas such as Nuevo Leon, Jalisco,

area and the other half from academia and the private

Guanajuato, and Colima to be considered as influential

areas for biotechnology. CONACYT is also prioritizing

the doctor’s interpretation of clinical tests and do not

the provision of financial support of the doctors carrying

require

out research as well as capitalizing on investment from

detection depends heavily on pathology and biopsy

companies with interest in these technologies. Most

examination, which are complicated to process, as they

people think that Mexico invests little in research but

require surgery and a complex sample preparation, a

CONACYT’s investments are growing every year and the

process that includes freezing, cutting and dyeing, before

results are promising. The trend of leaving the country

microscopic analysis. New microscopes have higher

to work in the US or the UK is becoming a less attractive

resolution and displays that allow oncologists to analyze

option for medical professionals and contrarily there

samples on screen. While automation is important in this

are greater levels of foreign investment in Mexico. Many

area, an oncologist’s experience is irreplaceable. One of

people are unaware of the significant work carried out by

the most complex specialties in medicine is pathology,

the government within the sector over the last 12 years,

as it requires a lot of experience in the interpretation of a

an effort which has allowed current research centers to

number of different tests as well as extensive knowledge

obtain extremely qualified researchers and excellent

of the patient.

sophisticated

laboratory

equipment.

Cancer

equipment. Q: How receptive is the local market to new technologies? Q: Is there any specific area of diagnosis where there is a

A: The most effective way for us to decide whether a new

particular need for good equipment?

technology conforms to our business model is by listening

A: One of the fastest growing areas in Mexico is molecular

to our clients’ needs. Regardless of the capabilities of any

biology diagnostics or PCR. Most diagnostics test work by

new technology price is always an issue in Mexico and

detecting the antigen to a given infectious disease rather

locally many people may fail to correlate the high cost of

than the virus itself. These techniques only provide about

new technology with the amount of R&D carried out. We

85% accuracy whereas molecular biology techniques

must tropicalize foreign systems to comply with pricing

permit the detection of the DNA of the virus itself. Molecular

within the Mexican range and every new technology must be

biology techniques, although allowing for approximately

evaluated in order to gauge whether or not it will be a viable

99% certainty, are more difficult to implement as samples

product here. The delay in introduction of new technology

must be purified, replicated, and interpreted by highly

to the Mexican market is often caused by adaptability issues,

specialized professionals. Even so, this area is growing

particularly in terms of price perception and affordability,

rapidly as doctors are increasingly seeking high speed

but as technologies age and become more affordable, the

and reliability for their laboratory tests. The Institute of

possibility of success within Mexico increases.

Diagnostic and Epidemiological Reference (InDRE), the Mexican counterpart of the Center for Disease Control

Q: What are your expansion plans and what are your

(CDC), implemented the fastest protocol for the detection

priorities for 2015?

of H1N1 in 2009. In less than six months the InDRE installed

A: At this point we have eight offices in Mexico, the main

PCRs in every state laboratory in Mexico in order to detect

one being based in Monterrey and the second largest in

and control the disease and today all state laboratories have

Mexico City. We want to open new offices in areas where

their own PCR instruments. Another area of development

research centers are growing in prominence, such as the

is the automation for clinical chemistry in several tests,

Yucatan peninsula and Baja California. We are also trying

including glucose, cholesterol, uric acid, and red and white

to expand into forensics and environmental laboratories.

blood cell counts. This is just for diseases as there are

In addition we organize the annual Expo Científica CTR in

different techniques for clinical chemistry and microbiology.

Mexico City, an event that includes two days of conferences, where 40 vendors from all over the world can promote

Q: In what way is technology demand increasing for the

their technology. We also organize a conference in food

detection of chronic and degenerative diseases?

safety, which is important for Mexico as food exports

A: This is a unique area as it is heavily dependent on

are among its largest sources of income and each food

human examination of samples. For instance, autoimmune

export is required to be thoroughly tested for pesticides

diseases are detected by pathologists who analyze the

and pathogens before exportation. We will also host a

pattern of the antinuclear antibodies using a fluorescence

one-day seminar on vector borne disease Chikungunya,

microscope

rheumatologist

the prevalence of which is growing in Mexico. We want to

determines the type of autoimmune disease found in the

create awareness of the disease in order to be prepared

sample. The detection of autoimmune diseases, including

to deal with it as it is contracted in tropical environments

Crohn’s, rheumatoid arthritis, and Graves’, depends on

through mosquito bites.

and

subsequently

181

| EXPERT OPINION

PATIENT JOURNEY: HOLISTIC VISION, FOCUSED

patient going directly to a point of sale or to a doctor’s

STRATEGY

surgery. This phase of patient experience is full of

By Aldo Zavalza Mendoza, Qualitative Manager, IMS

myths and preconceptions that block access to medical

Health - Our industry dedicates huge financial effort and

attention. Both the form and content of communication

countless working hours to healthcare. Still, one forgets on

must therefore be tailored to the patient. We have

occasion that health is more than a theoretical, economic

treated patients who are in denial, having lived under

and medical concept. At the center of our ideas is an

the impression that they “thought this would never

extremely important person: the patient. We understand

happen.”

that the process of living through an illness involves a doctor and market conditions. All the same, we cannot

The third priority involves dealing with the patient’s

assume that understanding the market and understanding

reaction to diagnosis, and, above all, the needs that

medicine automatically means that we can see illness from

emerge in this type of ‘mourning’ process. While the

the perspective of the patient. For this reason, we seek

pharmaceutical industry does provide patients with

first-hand information directly from people in treatment.

information intended to help the doctor, we need to

At IMS Primary Intelligence, we took on the obligation

understand that the patients’ main needs at that moment

of focusing on and revising the concept of health from

are emotional. They do not think of themselves as a

the perspective of the patient. “Patient Journey” is the

patient but of their position within a nuclear family. We

expression of our hope to contextualize illness in all phases

also see a kind of voluntary misinformation, since most

of patient experience.

patients are not prepared to accept the consequences of what their illness means in real terms, and process

SOCIO-CULTURAL FACTORS

this data in such a way that delays their own consent to

Firstly, we must understand that every illness involves a

medical intervention.

cultural context. Living with diabetes in Mexico is very different to living with diabetes in France, for instance.

UNDERSTANDING

TREATMENT

CYCLES

AND

Access to medical treatment and services is different

CHALLENGES

in both countries, and so is the way in which illness is

A discussion of the treatment process naturally covers

experienced. Social constructs oblige us to revise our

economic implications and patients’ understanding.

entire perspective. It is curious to discover, for instance,

In the case of a patient living with diabetes, we must

that a Mexican patient will “socialize” illnesses in particular

examine if the patient’s dietary and hygiene habits

ways. Male diabetes patients tend to hide their illness for

change to reflect this new reality. Often, taking a tablet

fear of their masculinity being called into question. Home-

seems like enough of an intervention, leading to a

made remedies are also an integral part of the Mexican

relaxed – even careless – attitude to their health. Patients

response to illness.

have trouble integrating medical treatment into healthy living habits. We see a real opportunity here to develop

Breast cancer and diabetes are therefore the two diseases

medical tools that result in integrated, across-the-board

we have chosen to focus on, as they are the most relevant

care for patient health.

national health priorities. We aim to discover patterns of behavior and assimilation of the two diseases, both of

To date, we are taking steps to understand the stages of

which impact the doctor’s approach to the patient and the

long-term chronic or acute illnesses. For hospitals to truly

course of action taken. One of the keys to the exercise is

follow these stages, they must take stock of the patient’s

to understand that the patient is more than a diagnosis, a

economic, emotional, and social life. The Patient Journey

medicine, or a statistic. The concept of the “patient” is a

includes two key factors in its analysis, one being the

complicated matrix made up of social contexts, anxieties,

stakeholders who influence and intervene in patient’s

family, and emotional needs. Much of this data is from a

information and decision-making, as they deal with the

source doctors could never replicate.

needs specific to each phase. Understanding all of these factors allows us to design effective strategies to bring

PATIENT-PATHOLOGY RELATIONSHIP

182

us closer to the patient in an effective way. However, we patient’s

cannot afford to leave the human factor out of health

perception of their own illness, what information they

treatment. The patient turns to us for guidance and they

make use of, and where they found this data. At a basic

are undoubtedly one of our most important, substantial

level, this means understanding what factors result in a

sources of information.

Subsequently,

must

understand

the

EMPLOYEE CHECKUPS IN DEMAND FROM CORPORATIONS The

economic

cost

The

stress

technology. “It is true that we are the first company to

skyrocketing, manifesting

bring the full-body scan to Mexico from the US,” says

itself in low productivity,

González. “Tomography, a scan which covers the area from

work

work-related

Julián González, Managing Director of Check-up Center

absenteeism,

company

also

considered

innovator

and

the head to the pelvis, has been in use there for twenty

health problems. In 2013,

years. Within three years of us adopting the technology,

GNP Seguros stated that

two of the main hospitals in the country followed suit.” The

Mexico had the highest

scan is combined with comprehensive medical checkups

rate of work-related stress

processed by Quest Diagnostics’ laboratories, which

worldwide, with 75% of

provides a full scan on the lipids profile, HIV status, thyroid

employees

reporting

stimulation hormones (TSH), Cardiac C-reactive proteins,

high levels of anxiety Check-up Center has uncovered

and cardiovascular homocysteine. Urine tests also provide

opportunity in adversity. The company offers quick, non-

information on diabetes, meaning that the disease profiles

invasive body scan consultations at two clinics, one in

covered by Check-up Center coincide with the main health

Santa Fe and the other near Insurgentes Sur: Mexico City’s

issues faced by Mexico’s new urban class.

white-collar stress hotspots. Managing Director Julián González ties his company’s recent success to increased

Given that Mexico’s health and obesity problems are

stress levels worldwide. He cites steady growth figures

associated with a shift towards a sedentary nature, Check-

from the company’s foundation in the year 2000, but notes

up Center seeks to integrate health improvements into

that the industry saw increased demand in the wake of

a healthier professional lifestyle. As companies begin to

the 2008 world financial crisis. “Most of our customers are

witness healthcare integrated into workers’ contracts, Check-

multinational companies,” he explains, “whose managers

up Center’s portfolio has grown to 200 companies, including

have become increasingly concerned about the health and

several major international ones who include these services

wellbeing of their workers. After all, employees are more

in employee benefits packages. The majority of Mexican

exposed to stress nowadays.”

insurance firms already cover Check-up Center services. González wants to take his message of positive lifestyle

Check-up Center is not only targeting stressed-out office

change further. Not only does his company intend to prevent

workers, however. Its check-up packages are the spearhead

health problems, they are also capitalizing on the country’s

for early intervention medical treatments in the country.

growing awareness of health and fitness as a lifestyle choice.

Mexico’s movement from a primarily rural to a primarily

“We are not looking to target professional athletes but people

urban society has meant a shift in its disease landscape.

who exercise as a hobby, especially those who prefer extreme

In the past, acute, communicable disease constituted

sports or who exercise for several hours a day. Current sports

the country’s primary health cost. However, as sedentary

medicine research thoroughly describes the hazards in

urban lifestyles become the rule, Mexicans tend to suffer

practicing certain sports without prior medical examinations.

from chronic diseases such as diabetes, certain cancers,

We are currently designing appropriate protocols to provide

and cardiovascular illness.

highly specialized tests for these individuals as they need adequate evaluations to ensure their health and safety.”

The culture surrounding healthcare and its apparatus remains associated with the acute diseases landscape, however,

González is conscious of the importance of early

particularly where diabetes is concerned, as patients do not

intervention in preventing major health crises and of the

report symptoms until complications occur. The procedures

value of his company’s format in preventing life-threatening

required after this point can often be costly. Private hospitals

complications. “Our focus is on Mexico’s main causes of

are the first ports of call, and therefore the first to benefit from

disability and death. We avoid procedures that do not

the spending. Check-up Center wants to turn this around. “We

address these,” he says. “Mexicans generally do not take

only provide patients with diagnosis and recommendations, if

preventive health measures, only visiting their doctor or

necessary. We do not offer treatments, prescribe medicines,

taking diagnostic tests when they notice serious symptoms

or suggest further procedures,” says González. “Since we are

or find themselves in an emergency. We want to change

not seeking to promote any treatments, patients are confident

this culture. To that end, we are developing prevention

that we are providing a comprehensive service, recommending

campaigns aimed at our clients and the companies who

medicine based on evidence, whereas hospitals may be trying

employ us, as they are equally concerned with creating a

to sell them something.”

culture of prevention in the country.”

183

| VIEW FROM THE TOP

A QUEST FOR PREVENTION AND TIMELY DIAGNOSTICS FĂ&#x2030;LIX VALVERDE ESPINOZA Regional Director of Quest Diagnostics Mexico Q: What is the Mexicoâ&#x20AC;&#x2122;s role in your corporate strategy?

of our laboratories are specialized in concrete areas so not

A: Quest Diagnostics has worked in Mexico for more than

all samples can be analyzed at every laboratory. Most of

40 years and the country is one of our priority markets in

our equipment is expensive and it is more cost-effective to

Latin America. We first entered this market by acquiring

concentrate a large volume of tests in a single location, which

Laboratorios Frontera, one of the most important diagnostic

is why some of our laboratories receive samples from across

companies in Mexico City. Our operations in this country are

the globe. Furthermore, while automation is becoming a

different from the rest of Latin America. We work mainly as

trend worldwide, it is not gathering pace in Mexico. One of

a reference business, which means the tests that hospitals

the likely restrictions in introducing automation to Mexico

cannot process are mailed to our laboratories in the US

is that it requires a high volume of tests in order to fully

and the results are transmitted online. Alongside this, we

capitalize on the benefits of the technology. Many Mexican

also have local offices and laboratories that allow us to

patients may be unwilling to undergo or unable to afford

provide services within Mexico and neighboring countries.

these tests and we need to work to convince them of these

Our main defining character is innovation as we provide

advantages. Our testing process is very competitive and

exclusive tests and are constantly developing new ones.

very efficient, with the longest waiting period being the time

We work with hospitals, physicians, insurance companies,

needed to mail the sample to the laboratory. We overcome

other laboratories and companies that are implementing

this somewhat by having IT platforms that are connected

wellness programs or drug testing. On occasion, we offer

to our corporate systems, so we are able to easily transfer

our services directly to patients, but this remains a small area

results to laboratories and physicians.

that we need to expand. Furthermore, we offer innovative tests which are already available in the market, but of which

Q: What are the trends in the diagnostics sector and what

few Mexican physicians are aware. We are raising awareness

are the newest tests you have introduced to the market?

of our newest tests and services by providing more

A: We have several different tests in every area but our

comprehensive information to physicians and hospitals.

largest portfolio of tests covers oncology, neurology, and,

Among other activities, we organize training and informative

infectious and cardiovascular diseases. Despite this, we are

sessions for physicians. Our main communication channels

always developing new technologies and we have the most

in Mexico are hospitals and laboratories, through which we

diverse set of tests possible. However, a growing worldwide

ultimately communicate key information to physicians.

trend is the rise in molecular and DNA-based tests. These are not common in Mexico yet, although demand is steadily

Q: Who are your main customers?

increasing. While there are many new tests being developed

A: While we do work with the public sector, we focus

in this area, few companies can provide them. The area of

mainly on the private sector as it usually has the economic

personalized medicine is also growing but these procedures

resources and the incentives to acquire the most modern

take considerable time and money. These tests are

tests. While public hospitals belonging to IMSS and ISSSTE

extremely accurate and beneficial for patients as, not only

have sound infrastructure and qualified physicians, they

can they provide unique and precise information but they

usually have limited budgets due to the high quantity of

can also guide doctors to provide effective treatments and

patients they must treat. This is another reason leading

to suggest targeted prevention strategies. With the help

us to send certain tests to the US. While we can perform

of our main suppliers we are trying to automate some of

most tests in Mexico, it is not economically feasible for us

our services. It is only viable to automate the most popular

to perform all of them here given the large investments

areas of the business in order to gain the most benefits.

in equipment and personnel this would require. Most

184

importantly, moving all tests to Mexico will not improve our

Q: Do you believe that Mexico could grow enough in the

service times or efficiency since we cannot run tests every

next five years for Quest Diagnostics to concentrate many

single day without a set minimal volume. Furthermore, most

tests in the region?

A: Absolutely. Mexico currently has a young population

A: The first requirements to set up a business like ours are

but this will change in the near future to provide us with an

efficient couriers and proper sample preservation. Our

opportunity to work on prevention. It is common for Mexicans

laboratories worldwide are certified by ISO and the College

to wait for a disease to manifest itself before treating it,

of American Pathologists. In addition to this, our network

which may incur increased costs and lower their quality of

comprises more than 2,200 Patient Service Centers, with

life. Insurance companies could help us to raise awareness

more than 45,000 employees supported by a medical and

about different diseases and of the tests that could be used

scientific staff of more than 700 M.Ds and PhDs, whose key

to diagnose them. Some insurance companies are actually

focus is putting patients first. We plan to grow both in Mexico

already including these tests in their policies. Ultimately,

and in Latin America. At this point, we are offering our tests in

prevention is better for the whole sector as it improves

almost every country in Latin America as demand is growing

patients’ lives and helps save costs by reducing the number

through the region. Within Mexico, we want to increase the

of preventable diseases. We are collaborating with public

number of Patient Service Centers (PSC) in Mexico City

and private institutions to promote prevention and timely

and the metropolitan area. However, while there is potential

diagnostics, especially for emerging infectious diseases. We

to expand, it is not our main focus at this point since we

have specific tests for reproductive clinics to measure the

are able to cover all our clients’ needs with our current

health of an expectant mother and monitor the growth and

laboratories. We currently have 29 Patient Service Centers

development of the fetus. These tests are becoming more

in Mexico City and six in Ciudad Juarez, Chihuahua, and our

common as women are having children later than ever.

main focus in Mexico is to offer our specialized tests. Quest Diagnostics also wants to work toward offering diagnostic

Q: What plans do you have to expand and consolidate in

solutions to employers, pharmaceutical companies, and

Mexico?

Contract Research Organizations (CROs).

| SPOTLIGHT LABORATORY AUTOMATION IN MEXICO

samples over a certain point and to modify specific routines.

Laboratory automation has various advantages including

Contrastingly, the modular model creates independent work-

time optimization, increased efficiency and accuracy, and

cells that perform specific tests individually and samples

a reduction in human error. This strategy can be used in

must be transported among them by technicians. This model

diagnostics, drug discovery, and research laboratories across

offers the advantages of requiring a smaller initial investment

several research areas. There are many reasons to automate

and smaller infrastructure while providing more flexibility

a laboratory including a shortage of qualified technicians

and allowing users to prioritize tests and samples.

and economizing time for researchers, thus laboratory automation is becoming a trend in countries where labor

While laboratory automation seems to be advancing,

costs are high. Laboratories with a limited budget may also

Mexico has failed to follow the trend. Carlos Hernández

decide to invest in automation to save costs over the long

Alvárez, Hispanic America Regional Director at Siemens

term. The firm Research and Markets expects the trend of

Healthcare Diagnostics, considers that this trend is very

automation to grow at a compound annual growth rate of

contained in Mexico because a general perception is that

7.0% from 2014 to 2019. Driving the growth of this market

the equipment is too expensive. Félix Valverde Espinoza,

are numerous factors including equipment miniaturization,

Regional Director of Quest Diagnostics Mexico, shares a

higher reproducibility and accuracy, and a larger market.

similar point of view. In his opinion the high volume of tests needed to fully capitalize on the benefits of the technology

There are currently two models for automation of clinical

is a likely restriction in the introduction of automation

laboratories, known as the modular model and the complete

to Mexico. Another problem is labor costs, as Abelardo

automation model. The latter has the advantages of allowing

Perches, CEO of CTR Scientific, tells us that in Mexico

an integral management of the sample, offering savings

labor is much cheaper than new equipment. Despite the

on disposable equipment, and a better optimization of

difficulties, this area is growing in Mexico. Perches tells us

equipment and human resources. On the other hand this

that the automation of clinical chemistry is growing for

model requires a strong initial investment, large infrastructure,

many different tests. It is true that, being a convenient

and provides low flexibility to increase the number of

alternative, automation is here to stay.

185

| VIEW FROM THE TOP

TAKING MICROBIOLOGY DIAGNOSTICS TO THE NEXT LEVEL FRANCK ADMANT Director General of bioMérieux Q: How does Mexico compare to the rest of the world in

differentiating between countries. We would then be able

terms of opportunities in the diagnostic market?

to provide customized advice to each country because

A: Despite the move to help millions of people access basic

this cannot be generalized globally. Antibiotic resistance

medical care through the Seguro Popular, there are still gaps

happens to be different across the globe. Therefore,

and opportunities in the healthcare sector. Each country

epidemiologists and infectologists in Mexico will look at

has its own issues and must find solutions according to

drug resistance information and identify which is more

their capabilities and resources, so comparing countries

common in the country. This can be a valuable input to

only makes sense if one can learn from others’ experience.

determining which antibiotics are still worth administering

One area I believe Mexico could improve is the fight against

and in which dose. bioMérieux can connect the software and

antibiotic resistance. The US has a five to ten year action plan

provide customized advice to prescribe the right antibiotic.

to fight antibiotic resistance, and the WHO has a database

This is expected to save millions of dollars; pharma budgets

software called WHONET aimed at collecting and analyzing

are usually between 20-25% of hospitals budgets, while

information on resistance to specific drugs at varying doses,

microbiology only represents 3-5%, showing that Mexico

in which countries such as Colombia, Argentina, and Chile

has a considerable opportunity for growth in diagnostics.

are involved. bioMérieux is participating in this initiative and

In addition, patients with infectious diseases are not usually

this is a valuable tool for physicians to prescribe the right

screened and isolated, increasing the probability of wide

antibiotics at the right dose. Mexico has not yet reached the

spreading resistant infectious agents in hospitals.

same level of commitment in this area, so there are still plenty of commercial opportunities to fill this gap.

Q: What are the most important projects that you are implementing in Mexico?

Q: Do you have any plans to stand alongside WHONET in

A: A syndromic approach to microbiology is overtaking

this battle against antibiotic resistance in Mexico?

the simple search for the bacteria or virus that is causing a

A: We see it as a duty to work with the Ministry of Health,

given disease. We now know that this is too simplistic: since

the state institutions, IMSS, and Seguro Popular to tackle

septicemia presents a problem for contamination because

this issue. Unfortunately, this topic is frequently viewed as

a patient can die within three to five days from this disease

a consumption of resources in the public sector because

and blood cultures to test antibiotics take the same length

it is a long term investment. However, patients stay for a

of time to test. Two years ago we began a study in patients

longer time in intensive care units simply because the right

who had experienced multiple hospital admissions in La

antibiotic was not administered, costing US$2,500 per day

Raza, to develop a sepsis protocol as there is no specific

for every patient. Finding the right antibiotic thus represents

medicine for this condition and physicians need to act as

daily savings for the institutions, but we are struggling to

quick as possible. This protocol uses rapid microbiology in

convince physicians that investing now and waiting two

which the diagnosis is ready within 24 hours, so we think

to five years for the return of investment will be worth it in

it is the solution to mitigate this potentially fatal problem.

the long run. We can understand this reticence as budgets

We would like to see this protocol being included in the

have been constrained in the short-term, however the bigger

Basic Formulary and we are interested in participating in a

picture has to be taken into account because it is not unusual

tender process to implement it in public institutions. This is

in this industry for returns to be seen ten or 20 years after a

a unique opportunity that is connected to the antibiotics-

study or initiative is started.

resistance issue and will also be important in a population like Mexico, where 6.4 million have been diagnosed with

186

Q: Are you developing specific technology for the

diabetes, a disease that increases the risk of gangrene.

government to help them with his problem?

We plan to stick to the protocol and are opposed to short

A: We have software that collects data and stores it, and

cuts, but locating resources to provide these solutions in

is aiming to connect all units to automated data, before

hospitals will be our biggest challenge.

Q: What does such rapid microbiology technique consist of?

hospital, and therefore exposure to infection. As for

A: Traditional microbiology techniques include sample

chronic and degenerative diseases, the diagnostic market

collection, inoculation, growing bacteria or fungi in petri

for diabetes is saturated with products such as glucose

dishes, antibiotic sensitivity testing, among others can

monitors, but we are aimed at providing added-value

take up to three weeks to identify which microbacteria

applications for infectious diseases as well as chronic ones

as well as the right treatment. We are working on a new

such as cardiovascular diseases and cancer. For instance,

technology that can cut this down to 24 hours providing

the biomarker procalcitonine provides a prompt and

physicians with enough information to make a decision

accurate diagnosis of sepsis and is being used by many

regarding prescription and dose. This rapid microbiology

of our customers today. BioMérieux invests in acquiring

tool relies on molecular biology techniques and mass

knowledge on biomarkers in order to develop quick

spectrometry, and can be part of an automated laboratory

lifesaving diagnostic solutions for physicians.

aimed at increasing productivity and gaining recognition of its quality processes. Therefore, we are focusing on

Q: Do you offer training courses as part of an after-sales

technology for laboratory automation in the private sector.

service of diagnosis equipment? A: We consider it part of the duty to train staff with

Q: Are you developing specific services for the private

the devices we sell before they purchase them for their

sector?

laboratories, and the company also offers a certified

A: We serve both the private and public sector, and

one-week course in collaboration with local universities

although they require different services and innovation, we

relating to resistance and diagnostics. bioMérieux hopes to

adapt to the needs of each client. Rapid microbiology is

sow the seed of interest among professionals that could

part of what we are offering to reduce patient turnaround

eventually join our ranks in the fight against resistance to

times, relevant to both sectors by reducing time in

antibiotics.

GENE SEQUENCING CHANGING THE RULES OF DRUG PRESCRIPTION As a result of the sequencing of the human genome in

pathways traced by psychotropic drugs may be effective in

2003, paradigms in medical research and treatment have

helping patients choose between an array of options based

shifted forever. Genomic science has brought personalized

on their side effects.

medicine closer to reality. The main effects are visible in clinical trials, when test groups are targeted according to

Pharmacogenomics is no magic solution, of course. Drugs

speed of metabolism of certain drugs. This filter obtains

act across more than one gene, and genetic diseases tend to

more consistent results earlier, shortening the time-to-

be caused by variants or mutations in more than one gene.

market for new drugs.

Nor do genes act in isolation. Thinking of genes as a kind of naturally occurring switch, environmental issues are the

Precision is the key word here. Around 2.2 million severe,

stimulus necessary to activate or deactivate them. Without

adverse events occur every year in the US as a result of

these catalysts in a person’s surroundings, genetic illnesses

medications. One third of these are due to interactions

may remain latent throughout the lifetime of the carrier.

between genes and drugs, not between drugs and drugs. Gene variations in leukemia patients can dictate the type of

One indisputable fact is the long-term financial worth of

treatment they can receive. Some require 10% of the stated

investment in genomic sciences. However, few laboratory

dose. Abacavir - an antiretroviral drug effective in combination

chains and independent companies currently provide

with other drugs against HIV - causes hypersensitivity in

pharmacogenomic or otherwise personalized treatments

between 5% and 8% of its patients during the first six months

to the general public. In Mexico, Genomica Médica, offers

of treatment, a reaction which is associated with a gene

six different pharmacogenomics tests including a DNA test

variant. Screenings for the variant are now a standard part of

aimed at identifying genetic variations of SLCO1B1, which

treatment with regimens containing Abacavir. In an industry

encodes the metabolizing protein of the cholesterol-reducing

where the practice is to increase dosage when a patient is not

drug simvastatin. Another test focuses on identifying genetic

responding, pharmacogenomics can guide doctors to a less

variations of the enzyme CYP2C19, which is responsible for

risky resolution of the issue. Finally, studying the biochemical

the metabolism of clopidogrel.

187

| SPOTLIGHT PRENATAL DIAGNOSTICS

or both must carry the same autosomal-recessive disorder.

Developed as an additional practice to prenatal diagnostic

If there is no strong family history of the disease and if

for parents who risk the transmission of a severe genetic

either of the parents carries a recessive mutation, they

disorder, preimplantation genetic diagnosis (PGD) tests the

may be unaware of the risk until either birth or prenatal

cellular material from embryos that have been fertilized in

testing. In some cases, one or both of the parents carries

vitro. PGD can also tests oocytes, which are gametocytes

a dominant mutation of the gene and is thus aware of

produced in the ovary during gametogenesis, to determine

the risk of passing it to their children. Before PGD these

the risk factor for in vitro fertilization (IVF). While embryos

parents had options including using a donor who is not

affected by a genetic disorder can be viable, children

a carrier, adopting a child, or avoiding reproduction. Now

may suffer from a physical or cognitive disability or even

PGD can be used to select an embryo with minimal risk.

a decreased lifespan. Parents can use prenatal testing to determine whether the fetus is carrying a genetic condition

Generally, the technique is used to test for three different

serious enough to merit the consideration of potential

categories of genetic disorders. The first is single-gene

termination of the pregnancy. Many parents prefer to avoid

disorders, which can be either autosomal dominant,

such decisions if possible, so PGD is an optimal choice as it

autosomal recessive, or X-linked recessive, and for which

negates the need for selective pregnancy termination. PGD is

the specific mutation is already known. The second refers to

often recommended for potential parents who have a family

X-linked disorders, for which the specific gene mutation is

history of genetic conditions or chromosome problems,

not known but the disorder can be avoided by gene selection.

those who have a child with a serious genetic condition, or

Finally, the third refers to chromosomal rearrangements. PGD

those who have terminated a pregnancy after detection of

is ideal for parents who carry the same autosomal-recessive

complications through prenatal testing, but it can be used

gene disorder. Common disorders of this kind include

by any parent who undergoes IVF. The procedure carries the

Huntington’s disease, Marfan syndrome, sickle cell disease,

same risks as IVF, including potential damage to the embryo

cystic fibrosis, and spinal muscular atrophy. All of these are

but it is largely considered safe by most physicians. Generally

life long diseases and their severity varies from person to

every embryo produced by IVF is tested for these diseases

person, many affecting quality of life and expectancy. PGD

and only those that are found not to carry risk are implanted.

is a sophisticated technique that is only currently utilized in specialized laboratories, but there are more than 70 centers in Mexico already offering these tests. José Islas Varela, CEO of Insemer, highlights the importance of preimplantation genetic diagnosis for at-risk couples to determine whether an embryo has a greater chance of suffering from certain genetic diseases. As Varela states, “by mapping all the chromosomes in an embryo, we are able to detect predispositions towards several types of cancer, hypertension, and diabetes, among several other diseases. Our studies provide 99.9% certainty of a healthy embryo but, after implantation, further studies are performed to confirm the fetus health.” While many genetic disorders can be diagnosed from a

188

PGD was introduced in the 1990s and initially used to

single cell, having only one cell limits the scope of the tests.

determine the sex of the embryo. This technique continues

This differs in the case of prenatal diagnosis, as biopsied

to be used for diseases only affecting one gender, but it has

samples provide hundreds of cells from which doctors can

since evolved and PGD is now used to screen for more than

obtain large quantities of genomic DNA. There are also time

200 genetic diseases. PGD requires IVF, embryo biopsy

constraints as results must be available within 12 to 48 hours

and the use of either fluorescent in situ hybridization

in order for the embryo to be viable for IVF. Moreover, the

(FISH) a technique that uses fluorescent probes labeled

test cannot completely eliminate the risk of a genetic disorder

DNA or RNA strands to hybridize the target DNA sequence

as some of these disorders have not been thoroughly

to identify and quantify it or polymerase chain reaction on

studied. Nonetheless the technique is advancing at a rapid

a single cell. It can detect Mendelian disorders, structural

speed alongside advances in molecular genetics, thus it is

chromosome abnormalities, and mitochondrial disorders.

a favorable alternative for many potential parents and, as it

In order for parents to carry a reproductive risk either one

improves over time, it will provide a wealth of information.

REDUCED MARGINS OF ERROR FOR MAMMOGRAMS Breast cancer, one of the principal causes of death among

When

women is receiving increased attention from an IPN project.

a standard test database for researchers for direct

Only 10% of malignant breast tumors are caught in the initial

comparison of the results. Few mammographic databases

stages, which does not paint a particularly encouraging picture

are publicly available, but one of the most easily accessible

of the future for breast cancer diagnoses. This, combined

databases, and therefore the most commonly used, is that

with data from a study that tested almost 90,000 women in

operated by the Mammographic Image Analysis Society

Canada, half of whom received annual mammograms while

(MIAS). Films in the MIAS database have been digitized

the remainder received a single physical exam, highlights a

to 50 micron pixel edge with a Joyce-Loebl scanning

pronounced necessity for scientific advances in this area of

microdensitometer, a device linear in the optical density

research. For about 22% of the patients tested over a 25-year

range 0-3.2 that represents each pixel with an 8-bit word.

period who were diagnosed with invasive breast cancers,

Luna explains that the neural network has been tested on

treatment was not available, not needed or not wanted.

the globally used database of ‘mini-MIAS’ but developers

Furthermore, the original recommendation of yearly or bi-

would prefer to carry out investigations using an image

yearly mammograms for women over 50 years of age in

bank created with Mexican patients, rather than from

Mexico has not proven to offer any reduction in mortality

an organization of UK research groups. The use of data

beyond diagnoses achieved with physical examinations or

collected from the local demographic would provide more

usual care.

accurate guidelines for scientists, overcoming challenges

benchmarking

algorithm,

scientists

use

in human genetic diversity. Demand exists to improve accuracy of mammograms. Using artificial neurons and algorithms, the IPN aims to

Luna explains that their plans include representing each

combat the elevated number of false positives attained

mammogram numerically to create a guide in which

from mammograms, to achieve an earlier, more accurate

new mammograms can be introduced and identified as

diagnosis. Benjamín Luna Benoso, a specialist at the College

presenting cancer or not. The IPN’s objective with this project

of Information Technology, as well as Rolando Flores Carapia

is to support doctors and radiologists to make the most

and student Hugo Flores Gutiérrez from the Center of

appropriate decisions regarding diagnostics, and ultimately

Innovation and IT Development have been investigating the

to replicate treatment success and use resources as efficiently

use of digital mammograms employing neural networks that

as possible. With significant variations in genetics being

are sensitive to breast tissue density, markers, and pectoral

highlighted by the international Human Genome Project

muscle. Their technology is designed to detect whether the

and more relevantly the Mexican Genome Diversity Project,

patient has cancer through a series of steps following digital

accurate diagnostics techniques and technology to improve

image processing, segmentation of the digital mammogram,

mammograms are becoming essential to the cost-effective

characteristic extraction, classification, and response.

optimization of the Mexican healthcare system.

189

With only 0.45% of the GDP invested in R&D activities in Mexico, further investment is needed,

and the Government has pledged to increase investment up to 1% by 2018. New funding programs are being initiated by CONACYT. A history of uncommercialized research is being addressed, with the aim of brining innovatoins to the public. At the same time, technology-transfer offices are emerging in order to assist with the commercialization of knowledge.

Only 1.2% of multinational clinical trials are conducted in Mexico. Investing in the local clinical trials business has many advantages, including a large population of “naïve” treatment patients with a broad range of diseases, many professionals, and an ideal geographical location. Clinical research centers are improving quality levels and acquiring certifications in order to attract more trials. Moreover, Contract Research Organizations (CROs) are growing at double digit pace, and working their way to consolidation through professionalization and process optimization. COFEPRIS has implemented several strategies to accelerate study protocol process reviewing and approval, while IMSS has opened its doors to the conduction of clinical trials. This chapter will discuss major trends in the clinical trials industry. Helix cooperation between universities, the government, and the private sector will be examined as well as the current successes in this respect.

HIGHLIGHTS • Clinical trials and CROs • Basic and applied research at Universities and Institutes • R&D initiatives and possibilities • Technology transfer

CLINICAL RESEARCH & INNOVATION

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CHAPTER 8: CLINICAL RESEARCH & INNOVATION 194

ANALYSIS: R&D Expansion in Mexico

196

VIEW FROM THE TOP: Dr. Enrique Cabrero, CONACYT

198

VIEW FROM THE TOP: Dr. Xavier Soberón, INMEGEN

200

INSIGHT: Dr. Manuel Zertuche, School of Biotechnology and Food Science ITESM

201

VIEW FROM THE TOP: Dr. Miguel Beristain Hernández, School of Life Sciences ITESM

202

VIEW FROM THE TOP: Dr. Sonia Mayra Pérez Tapia, UDIBI

204

ANALYSIS: Certification Brings More Clinical Trials

205

MAP: World Clinical Trials

206

VIEW FROM THE TOP: Jenny Paredes, ACROM

207

VIEW FROM THE TOP: Miriam Serrano, APEIC

208

VIEW FROM THE TOP: Dr. José Luis Viramontes, PPD | Former President of ACROM

209

VIEW FROM THE TOP: Cecilia Moreno, PPD

210

INSIGHT: Arturo Rodríguez, Infinite Clinical Research

211

ANALYSIS: The 13 Principles of Good Clinical Practice (GCP)

212

VIEW FROM THE TOP: Karen Hahn, ICON

213

VIEW FROM THE TOP: Jenny Paredes, PRA Health Sciences

214

VIEW FROM THE TOP: Dr. Sergio Guerrero, Accelerium Clinical Research

215

ANALYSIS: Units to Support Pre-Authorization (UHAPs)

216

VIEW FROM THE TOP: Melissa Rosales, RM Pharma Specialists

217

INSIGHT: Dr. Raúl Sansores, Centro Respiratorio de México

218

VIEW FROM THE TOP: Dr. Juan Alfredo Tamayo, COMOP

219

VIEW FROM THE TOP: José Luis Mata, Inspire Pharma

193

R&D EXPANSION IN MEXICO While Mexico has focused on growth and economic stability

the other hand an area that is growing strongly in Mexico

for the past few years, the country has fallen behind on

is clinical trials. It is estimated that only one in every ten

R&D. In 2014, Mexico held the 66th position on the Global

thousand developed molecules is released commercially

Innovation Index Ranking. R&D is of extreme importance

and new drug application (NDA) numbers have been

to economic development as innovation is created through

dropping worldwide. Clinical trials play a pivotal role in

research, the use of human capital, and existing knowledge

the pharmaceutical industry as they are essential for the

development. The country has made considerable efforts

development of new medications from these molecules.

to develop this area but so far results have been limited. According to the OECD, R&D represented 0.54% of the

As the strategic importance of emerging markets increases,

GDP in 2014 which is considerable lower than the 2.36%

clinical trials are set to flourish in Latin America, with Brazil

average of other OECD countries. Recently, President

and Mexico showing the fastest growth rates. Unfortunately,

Enrique Peña Nieto’s administration pledged to increase

Mexico currently participates in only 2,213 out of 177,688

healthcare R&D expenditure to 1% of GDP by 2018 and

multinational studies. Thus, the different players of the

subsequently fund more programs to produce high-

Mexican healthcare sector and pharmaceutical industry

quality research in related fields such as biotechnology

must implement several measures to attract more trials to

and health. Dr. Enrique Cabrero, Director of the National

the country. Dr. Luis Miguel Beristain, Head of the School

Council of Science and Technology (CONACYT), believes

of Life Sciences of Tecnológico de Monterrey, points that

that the country will be able to reach this goal by 2018.

in Mexico the overall cost of clinical trials is estimated to be 31.5% lower compared to costs in the US. In spite of

CLINICAL TRIAL PROTOCOLS APPROVED IN 2013

reduced costs, the US National Institutes of Health cites Mexico’s participation in multinational studies at only 1.2%

1.9%

of studies conducted globally in 2014.

2.3%

Mexico has qualified professionals, certifications, and regulations based on international standards, but the

54.1%

country lacks collaborative efforts and the efficient allocation of resources. Organizations must collaborate to develop more innovative research projects and increase their capabilities of locating funding, rather than struggling alone as is so often the case in Mexico. There is a significant

41.7%

opportunity for Mexico to create, join, and manage national and international research networks. For example, if several contract research organizations CROs in the

private sector

not sponsored research at national institutes

sponsored research at national institutes

IMSS

country collaborated to develop research, refer volunteers, and share best practice, this would go a long way toward attracting more R&D to Mexican shores. Clinical trials stimulate the economy due to the need for pharmaceutical

In order to reach international levels in R&D, CONACYT is

companies to sponsor studies and hire (CROs), local

currently implementing the Special Science, Technology

hospitals, universities, and research centers in which to

and Innovation Program (PECiTI). This program aims to

conduct them. This represents more job opportunities,

gradually raise the monetary resources for R&D until they

technical development for medical and non-medical staff,

reach 1% of GDP, contribute to the investment of human

the possibility to develop new medicines, and increased

capital, promote the development of local the vocation

opportunities for patients to access the latest treatments.

and capabilities of local STIs to strengthen sustainable and

In terms of career development, working on clinical trials

inclusive regional expansion, and to fortify the scientific

for new molecules represents an excellent opportunity for

and technological infrastructure of Mexico. The council

researchers in terms of experience and trains them with

is also implementing several programs for promoting the

advanced knowledge of emerging treatments.

sector including a Postgraduate Scholarships Program which granted scholarships to more than 400,000 students

With this in mind, there are several factors that influence

from national and international institutions. Additional

the decision of a sponsor to bring clinical trials to Mexico.

programs by CONACYT to promote R&D in Mexico are

For instance, Mexico has a privileged geographical location,

the National System of Researchers (SNI), the Innovation

a large ethnically diverse population, qualified staff, low

Incentives Program (PEI), and Cátedras CONACYT. On

costs, treatment-naïve test subjects, and an improving

Source: WHO

194

regulatory framework. On the other hand, a considerable

comprise specialized guidelines based on international

drawback for investors is the current long approval times

regulations as well as the Good Clinical Practices (GCPs)

for clinical trials. In order to reduce approval times, and

of the International Conference on Harmonization (ICH),

indirectly make Mexico more attractive to potential

which are a set of homogenized ethical and quality

investors, COFEPRIS recently implemented a procedure in

standards for the protection of subjects who volunteer

which the National Institutes of Health pre-authorize study

for clinical trials. Many professionals involved in this kind

protocols within four weeks. Eleven support units (UHAPs),

of research in Mexico are already trained and qualified

including IMSS and UNAM’s hospital, are expected to be

on ICH’s GCPs, but these standards will soon become

approved for validation in the short term. Unfortunately,

mandatory. Hopefully, such changes will enhance quality

although drugs approved by the FDA do not need to

and competitiveness in Mexico.

undergo a renewal process, COFEPRIS requires renewal every five years, representing an administrative burden

The Mexican healthcare sector and pharmaceutical industry

for both the regulatory agency itself and companies that

could capitalize on the country’s potential for more clinical

finance R&D.

trials and bring more foreign companies to the sector. If several clinical research organizations in the country

“These issues need to be addressed if we really want to

worked jointly to attract more studies, develop their own

improve Mexico’s competitiveness,” says Sandra Martínez,

collaborative research, refer volunteers, and share good

Regulatory Affairs Director LATAM from Aspen Labs.

practices, the resulting collaborative environment could

Mexican Official Norm NOM-012-SSA3-2012 establishes

be a valuable starting point for driving change. Moreover,

mandatory

researchers,

closing the gap between the industry and academia may

pharmaceutical companies, sponsors, ethics committees

be indispensable in reducing the number of basic research

and the regulatory agency must comply for research

projects that neither emerge into the market nor realize

projects involving human subjects. Reforms to this NOM

any valuable application in society.

requirements

with

which

7.8

7.34

6.95

Vietnam

Thailand

India

9.45 Argentina

8.09

9.8

10.83 Brazil

Nigeria

11.6

11.62 China

South Africa

11.68 Ucraine

13.28 Russia

11.72

13.55 Chile

UAE

13.66 Colombia

12.38

14.27 Mexico

17.4

14.36

23.24 Japan

Malaysia

24.18 Australia

21.32

25.12 Singapore

27.15

27.59

28.52

CLINICAL RESEARCH & INNOVATIONS: INTELLECTUAL PROPERTY GLOBAL INDEX

Indonesia

Turkey

Canada

New Zealand

France

Source: Global Intellectual Property Center

195

| VIEW FROM THE TOP

OPPORTUNITIES AND CHALLENGES IN THE KNOWLEDGE ECONOMY DR. ENRIQUE CABRERO Director of CONACYT Q: What are the biggest opportunities and challenges

development was about 0.54% of GDP in 2014. In European

that you identified for CONACYT when you were named

countries, the figure is above 2%. Our most important tool

Director?

here in Mexico is our Specialized Science, Technology and

A: We have a plan for the next few years that addresses

Innovation Program (PECiTI), produced in conjunction

the main challenges we have faced. Our Special Program

with academia, entrepreneurs, and other social actors.

for Science, Technology, and Innovation identifies the

The program lobbies to raise the monetary resources for

need for further investment in these three areas. Further

R&D until they reach 1% of GDP. The second component

issues include the lack of specialized human capital, the

seeks to contribute to investment in human capital,

different levels of scientific development across regions,

while the third promotes the capacities of local science

the need to promote linkages with the productive sector,

and technology actors, so that regional development

and the need to strengthen scientific and technological

will be both sustainable and inclusive. PECiTl also builds

infrastructure. Our main challenge as a country is to

connections among institutes of higher education, and

develop the capabilities required to create a knowledge-

connects public research centers with enterprise, in a

based economy. Empirical evidence demonstrates there

bid to generate knowledge with a practical purpose.

is a positive relationship between economic welfare

The final objective seeks to strengthen the scientific and

and investment in science and technology. Science and

technological infrastructure of Mexico.

technology expenditure leads to more innovation, with the result that competitiveness increases in tandem with

Q: CONACYT is widely recognized for its funding

economic growth. Thirty years ago, countries like Taiwan,

programs and scholarships. What are your most important

Finland, and Korea had similar GDP per capita levels to

programs, and how have they grown over the last five

Mexico, and are now economically prosperous countries.

years?

In this administration, we share the idea that knowledge

A: Our Postgraduate Scholarships Program has granted

is required to enter a new era where human capital is the

363,694

main production value.

institutions in Mexico. During the same period, CONACYT

scholarships

study

higher

education

sponsored 42,764 students to study in prestigious schools

196

Q: President Peña Nieto has pledged to increase R&D

abroad. Another distinguished program is the National

expenditure to 1% of GDP by 2018. How does this translate

System of Researchers (SNI) that provides financial

into CONACYT’s strategy, action plans, and budget?

stimulus and academic recognition to excellence. Founded

A: The present administration has given unprecedented

30 years ago, the SNI has become a fundamental part of

support to science and technology. The budget assigned

the higher education system, as well as being adopted by

for 2015 is almost 25% bigger than 2012’s budget, proving

other Latin American countries. Additionally, CONACYT’s

the government’s interest in developing science and

Innovation Incentives Program (PEI) supports scientific

technology. Should this tendency continue, we will reach

research

our goal of 1% by 2018. It is important to mention that,

innovation, with a particular emphasis on micro-, small- and

nowadays, the government is the main investor in gross

medium-sized enterprises. One of the important aspects of

domestic expenditure in research and development,

this program promotes the connection of enterprises with

providing 72% of that total. I expect that public funding,

higher education institutions and public research centers.

consistent public policy, and direct and indirect incentives

Finally, Cátedras CONACYT, is a new tool focused on young

to enterprise will boost activity in this sector. This will favor

researchers with strong potential, which promotes the

the interest and commitment of entrepreneurs seeking

integration of human resources into the portfolio of those

to invest in these areas. The proportion of GDP directed

who already have a PhD. Doctors are integrated to the

to research and development is lower than in developed

public research centers and higher education institutions to

states. Mexico’s gross expenditure on research and

develop projects in priority areas for the nation.

projects,

technological

development,

and

Q: What specific measures have you taken to support

Millimeter Telescope, the largest and most complex

research projects and promote innovation in the states

scientific instrument ever built in Mexico. Another flagship

that are lagging such as Chiapas, Guerrero and Oaxaca?

project is the High Altitude Water Cherenkov Gamma-

A: Last January, representatives of four public research

Ray Observatory. Both of these are the product of the

centers belonging to CONACYT signed the Strategic Alliance

collaboration between the US and Mexico. Establishing

for Sustainable Development in the Pacific-South Region

strategic alliances with international partners is essential

(ADESUR), agreeing to work side by side on projects related

in todayâ&#x20AC;&#x2122;s globalized world. We must admit that we

to food sustainability, sustainable tourism, agricultural

have

biotechnology, functional food and nutraceuticals. Coconut

and to recognize that the current problems require

production chains were an area of particular focus. We

multidisciplinary approaches and do not follow physical

recently designed 32 innovation state agendas, made up of

borders. We are doing our best to keep students in Mexico,

495 projects for the most important economic sectors in

by providing them with access to job opportunities. Our

each state. Currently, we are working with our colleagues

Professorships program, created two years ago, offers

at the Ministry of Economy, as well as several other financial

the opportunity for recent PhDs to work at public higher

agencies, in order to coordinate funding and target these

education institutions, public research centers, and federal

projects in the states of Chiapas, Guerrero, and Oaxaca. Life

and state institutions which conduct scientific, social or

science and health topics are very important for us. These

technological development research. So far, the program

topics define the PECiTl and our main requests for support

has created 799 jobs.

limited

resources

for

addressing

all

priorities

include those directed at solving national problems through the application of science. Moreover, our recently created

Q: What are CONACYTâ&#x20AC;&#x2122;s aims in terms of national and

professorship program focuses on regional and national

international standing over the next few years?

priorities.

A: We are working hard to encourage research, development and innovation throughout our programs. In the future,

Q: How do you compare Mexicoâ&#x20AC;&#x2122;s R&D and innovation

CONACYT will give society ownership of own knowledge

levels in this field to the rest of the world?

economy by connecting social needs to education

A: This administration is focusing its efforts the transition

institutions, research centers, and enterprise. To this end,

to a knowledge-based economy. We have made significant

specialized human resources must be incorporated into

progress, if we compare the increase in the economic

the labor market. Infrastructure is required to strengthen

resources assigned to science and technology in previous

research. The creation of spaces with digital connectivity

years. Over the long term, we want to top the list of

will allow us stakeholders to store, transfer, share and

countries that invest the most in the Straits Time Index, on

analyze substantial amounts of information.

a par with Korea, Israel, Japan, and the US. We are working hard to reach our current goal of increasing research and development expenditure to 1% by 2018. While realistic, this goal is also a challenge, given current economic conditions, and our main challenges are to increase budgets and to build a national system of science and technology investment. We also aim to connect enterprise with the academy and research centers, and to develop science and technology in this way. Q: Do you see international partnerships growing? What would you recommend for companies and universities interested

establishing

strategic

alliances

with

international partners? A: At CONACYT, we are constantly looking to sign agreements with international universities and higher education institutions, so that our grant holders can access the best quality education. The same goes for companies and research centers. International partnerships have also contributed to the development of megaprojects in our country, such as the Alfonso Serrano Large

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| VIEW FROM THE TOP

GENOMIC MAPPING AT THE FOREFRONT OF INNOVATION DR. XAVIER SOBERÓN Director General of INMEGEN Q: What is the main aim of INMEGEN?

we should have a shared analytical platform for the entire

A: The institute was established in response to the major

public health sector, which will help with the molecular

revolution in biological sciences and in experimental

characterization of tumors. That means that the private

biology in general. The focus on health, specifically in

sector may also participate by using technology developed

the genomics field, was triggered by the human genome

in Mexico or imported from abroad.

project. When the institute was conceived I had the opportunity to participate in some of the early discussions

Q: To what extent are you collaborating with the private

concerning how the project should be developed due to

sector in this regard?

my expertise in DNA chemistry, protein structure, and

A: We have around ten different collaborations with

function. We were aware that the human genome project

different companies in several areas. We have some of

would bring about a lot of opportunities for research

the most developed facilities for technology transfer and

within the healthcare industry, which was one of the initial

the most developed internal regulations approved by our

reasons the funding was provided for such a large project.

governmental body which allows us to engage in contracts with the private sector. Some of these regulations lack

Q: How successful has INMEGEN’s journey been so far?

enforcement in the other institutes, so we are more

A: Our foundation at INMEGEN is our solid and large staff

advanced because we know that this field is contemporary,

of exceptional researchers, which is a real asset as many

and will continue to produce more business opportunities.

institutions struggle to attract such high caliber scientists.

198

There are also several examples of high quality outputs,

Q: What is the role of INMEGEN’S Technology Transfer

but one area that has been particularly acclaimed was our

Office?

collaboration with the Broad Institute of MIT and Harvard,

A: Our technology transfer office is registered with

through which we produced some important papers

CONACYT, which means that we benefit from some of

related to the unique characteristics of the Mexican genetic

the incentives that CONACYT provides for innovation. We

background. This was the largest study conducted on a

already developed three projects within the industry, but

population with Latin heritage and a previously undiscovered

there is also the potential for five more. Typically a company

gene variant was discovered, accounting for roughly 25% of

will approach CONACYT to propose collaborating with us on

the diabetes epidemic in the country as it was found that

a project and our researchers will work with the companies

Latin Americans, especially Mexicans, are particularly prone

directly to provide them with some of our expertise and

to developing diabetes. This indicates that the genome is an

technological capabilities. In such cases, there are clear

area we particularly need to investigate.

rules of usage and protection for the intellectual property.

Q: How far away are you from producing medicine to treat

Q: How do you anticipate INMEGEN’S recent agreement

Mexico’s individual genome expressions, and what role

with IMPI will lead to increased patent registrations by the

will both the public and private sectors play in this?

institute?

A: This will happen soon and there are several areas where

A: We identified the field of genomics as having a lot

we are more advanced in this sense, certainly when it

of intellectual property so we signed a knowledge

comes to cancer. One example is the discovery that the

sharing agreement with IMPI. INMEGEN can help IMPI to

inherited propensity for cancer is related to several genes

understand and anticipate some of the issues that it will

that we have discovered, such as the BRCA1 and BRCA2

face in technical terms, and in turn they keep us aware

genes that indicate a high risk for breast cancer. Of course,

of new regulations and rules. Many developments will

there are certain diseases that are particular to certain

be patented but only a fraction of those will become

populations, but cancer is more of a global disease, and

actual products, so we should not over-emphasize the

is more similar in different parts of the world. Very soon,

intrinsic value of a patent. Of course, we realize that it is

completely necessary, specifically when interacting with

a little too young and inexperienced to compete with our

large companies, to produce patentable results.

scientists in Mexico. In a strategic area such as systems biology, it is not easy to recruit scientists, as they are in

Q: Why is INMEGEN so unique in Mexico when it comes to

high demand globally. Collaborating with the National

technology transfer?

University, CINESTAV and the health sector, we are trying

A: Most of my peers in other institutes are not allocated

to obtain private funding to enter into a similar program

the resources to carry out research in this field, so when

with the Howard Hughes medical institute for which we

a promising project arises they are forced to decline or

want to recruit ten young scientists per year over the

work on it in their own time. There is not a single other

course of ten years so that we achieve critical mass.

health institute that has a technology transfer office, or has internal regulations regarding the distribution of benefits

Q: How challenging is it to acquire new infrastructure and

and royalties. It is not something that is part of the culture

to what extent do you outsource when there are gaps?

in the health science sector.

A: We are extremely well equipped in terms of infrastructure but what many people do not realize is the speed at which

Q: The government has pledged to increase expenditure

equipment becomes obsolete. There is a perception that

on R&D to 1% of the GDP â&#x20AC;&#x201C; how do you hope this will

we do not require equipment as critically as some other

impact the sector?

institutions so we have not been successful in attaining

A: Over the course of my 30 year career, this promise has

funding from recent programs. We are buying around US$2

been made at least six times. This is the first time that I

million worth of new equipment this year and at the national

have seen an actual reflected increase in real terms. The

level, we will have some fairly solid capabilities for genomic

highest investment we previously saw was when we got

investigation. We can also capitalize on established

close to 0.45% of GDP. Now we have reached a level of

connections abroad, and we are open to using some of the

0.54%, which shows real improvement. Some of my more

whole genome sequencing currently being carried out with

basically-trained scientists are now devoted to innovation

the large international companies due to cost restrictions.

and are working directly with companies, so we are very well positioned to benefit from that particular pledge.

Q: What are the main obstacles facing the advancement of genome research in Mexico?

Q: How do INMEGEN researchers interact with universities

A: The main obstacle is persuading the clinical area that

like UNAM, and how do you foster talent growth?

the research is valuable. The significance of the discovery

A: A collaborative environment has been fostered over time.

of the human genome is on par with the discovery of

Some UNAM researchers work with institutes on a sub-

antibiotics and the development of surgery. Over the

contracted basis and institutes fund some research. The

coming decades, a lot of energy will be required to

National University will also pay for scientists and technicians

train and persuade physicians to experiment and adapt.

from several institutes to work on multi-disciplinary projects.

Homogenizing clinical practice guides and training staff to

This can create tension because CONACYT has created

utilize the new technology will also be a key issue which

a new modality to hire young research scientists who are

needs to be addressed.

distributed into different research placements but who are significantly better paid for their level of expertise compared

Q: Is the main challenge that the government refuses to

with our own scientists from the same program. The fact that

invest the required amount to fund training? Or does the

research scientists are not paid competitively is a problem

clinical sector itself not quite understand the scope of the

that we need to address because these researchers are well

transformation it will have to undergo?

renowned and they realize that they are an asset. Sadly

A: There are challenges everywhere, but I think one of

one of the main reasons that Mexican talent is leaving the

the main challenges has been the ability to communicate

country is because of low salaries, among other issues such

effectively with the clinicians, which is absolutely necessary

as difficulties in getting decent financing and the lack of

to advancing research. I think that this research will

capacity for speedy and pertinent expenditure.

transform things so completely, that the community will be resistant to the changes for a while. Also, the government

Q: How successful have your initiatives with private

still wants to see a return before investing more money.

companies been in attracting talent back to Mexico?

When we start developing new ways to treat diabetes, to

A: We had a program financed by the Televisa foundation

classify the patients, and to develop treatments, they will

in which we made an international call for scientists.

be convinced that they will recover any investment as well

Unfortunately, some of the most qualified candidates were

as making a significant profit.

199

TURNING RESEARCH INTO PRODUCTS – ACADEMIA’S ROLE Monterrey Institute of Technology and Higher Education

entrepreneurs with tools to advance their projects. For

(ITESM) is commited to advancing research and innovation

Dr. Zertuche, Mexico is well positioned for quality biological

in Mexico. Within ten years, the university has generated

research and its application to the health sector. The country’s

vast knowledge and expertise in the biotechnology field,

biggest challenge, however, remains creating and exporting

enabling them to help the food and life science industries

its own technology rather than importing and distributing

optimize their bioprocesses. Expanding biological systems

it. “Mexico has a solid platform to launch solutions onto the

and extraction and purification processes has resulted in

market, the problem is that very few are willing to capitalize on

many benefits, proving that biotechnological research could

it. I believe that if we continue at the same rate of growth that

have a pronounced impact on many fields such as agronomy,

has been seen over the past few years we will have a mature

energy, pharmaceuticals, environment, and food science. The

industry in the next ten years and will see a lot of Mexican

Monterrey Campus focuses on the health sector in general including pharmaceuticals and nutrition, with modern research lines in the field of genomics and diagnostics. Dr. Manuel Zertuche, Director of the School of Biotechnology and Food Science, says that the college “has been putting a lot of effort into developing new technologies, new medical devices, and sensors to improve diagnostics.” Nanotechnology is also a promising field set to revolutionize health and life sciences. In Mexico it is quite common for researchers to limit their research to publication instead of commercialization. In this regard, Dr. Zertuche explains that, “when a researcher publishes his findings, it means that he has indeed contributed in some measure to his field of study and is a good indicator that innovation has been reached. Nevertheless, publishing articles should not be a scientist’s sole objective; findings should impact society with innovative products or services.” To achieve this, more mechanisms that connect academia

“What really matters to us is the journey from patent to finished product or consumable. We have registered over 350 patents over the past ten years, which is not a vast number compared to the total number of patents filed in Mexico, but sizeable when it is compared to other institutions” Dr. Manuel Zertuche, Director of the School of Biotechnology and Food Science at ITESM

with the private sector could be developed. The university

products entering the market,” Dr. Zertuche affirms. Synthetic

understands the value of this sort of relationship and has

biology and nanotechnology are predicted to become niche

created links between students, professors, and companies.

industries requiring Mexican participation. To achieve this,

Spaces where companies are invited to view and participate

Dr. Zertuche says is necessary to change specialists from

in project development with their expertise and capital have

researchers to developers and to start negotiating with

been created. In this way the Biotechnology Center created

other nations in order to create innovations. Finding a way to

a protein product called Provita, which has captured

effectively market ideas to potential investors is key. To tackle

the interest of several companies due to its potential

this the college invites international institutions to further

applications. Provita is a soluble stable protein that can be

develop their most promising projects.

added to water, milk, and even solids, in order to enhance nutritional value. It is intended to help address the problem

Dr. Zertuche’s priorities are to continue this work and to

of high calorie, low protein food consumption. Provita has

increasingly push the biotechnology and food engineering

the same amino acid content and quality as animal protein,

divisions to the next level. Attracting the best talent is an

but a lower cost and environmental impact.

important goal for the university to keep its leadership position and entrepreneurial environment. Additionally, the

200

Since 2005, ITESM has been the leader in patent filing

ITESM Monterrey Campus recently created ClusterTEC in

in Mexico, but

it is not the university’s biggest focus.

order to enhance its research, innovation, and entrepreneurial

ITESM has the largest technology transfer system in the

capabilities, since connections with companies have proved

country, and in less than ten years has created 15 industrial

to be useful for graduates to commercialize their ideas and

parks where ideas born in the university are developed.

open new businesses. Finally, Dr. Zertuche reinforces his

The university’s business incubator helps researchers

commitment to advancing innovation: “Academia plays a very

in all phases of product design and development until it

important role in improving the country’s innovation level and

reaches the market, with an academic group providing

we are determined to continue working with this resolution.”

| VIEW FROM THE TOP

CONNECTING ACADEMIA AND INDUSTRY DR. MIGUEL BERISTAIN HERNÁNDEZ Director of Monterrey Institute of Technology and Higher Education (ITESM) School of Life Sciences

Q: What is ITESM Mexico City Campus’s relationship with

COFEPRIS approval. Our researchers work extensively on

research?

the same molecules to minimize the required amount of

A: ITESM is endeavoring to be the best academic institute

testing. Most researchers in public universities unfortunately

in Latin American and, to achieve this, our main focus

do not have the financial resources to carry out molecular

is strengthening our production of academic research.

tests on biological systems, so normally only conduct in vitro

Although we have excellent researchers, the vast majority

and in vivo tests. We focus more on preclinical and clinical

of our expertise has been centered on teaching. Mexico

areas as well as biotechnology and biomedical therapies.

City Campus still has no medical graduates yet since the

One of our Directors created a diagnostics platform through

medical curriculum is relatively new, but each semester, 20

information systems under ITESM’s intellectual property and

nutritionists, 30 biotechnologists and 17 medical biologists

its technology has been applied to the early detection of

graduate. To strengthen research, a year ago we decided

cervical cancer. Our university has helped companies engage

that all professors had to generate an adequate research

in the generation of technology. Our greatest achievement

profile under which to develop projects to attract financing

lies in our creation of a greater diffusion of medical prevention

from international or private funds. Our professors now

and early diagnosis.

spend less time in seminars and devote most of the day to research areas of interest. A success example is Dr. Jorge

Q: How important are partnerships between academia,

Valdez’s research in biotechnology, for which he has been

public bodies, and the private sector?

awarded the Rosenkranz prize.

A: Research represents a common interest to all parties. We are building links with international universities in order

Q: What are some of the main challenges facing the

to create research networks to accelerate the exchange of

country?

medical information. We are also working with industrial

A: Mexico faces a significant challenge as, despite possessing

and biomedical engineers to improve hospital processes

advanced epidemiological profiles, patient mortality is high

and address key shortcomings in the technical and

due to inadequate medical training. To some extent the

administrative management of hospitals. This way, we

country is a contradiction. Within its borders highly qualified

seek multidisciplinary partnerships to improve processes

doctors and progressive medicine can be found, but the

so that patients receive quality, efficient, and humane care.

inequitable distribution of specialized medical treatment is

We have been asked to support a research center in the US

evident. Fortunately, in Mexico there are expert physicians

dedicated to cancer research due to the low prevalence of

willing to distribute their time between both high-tech

evolved cancers in that population. ITESM also collaborated

private hospitals and hospitals lacking in proper facilities.

with the EU and ProMéxico on a project to help certify 40

The School of Life Sciences is adapting to the shifting

clinical research centers. On undertaking this project I

epidemiological profile by focusing on chronic diseases, as

became aware of the size of the clinical research market

well as continuing its work on contagious infections. Work

globally, but noted that Mexico lacked the same impact in

on non-transmittable illnesses should not impede research

the industry. Despite a high level of bioscience expertise

on still-prevalent infectious diseases. It remains crucial to

and significant talent in Mexico, there seems to be a national

work on solid information systems to accurately detect

and international reluctance to conduct studies here as it

possible disease outbreaks.

is perceived that protocols are not strictly followed and quality is not guaranteed. There have been instances of

Q: Much of the University research carried out in Mexico is

data manipulation, which has serious implications across

never commercialized - why is this?

the medical industry. As a result, even the smaller Mexican

A: The majority of public universities focus their efforts on

clinical sites are now seeking to be certified under quality

basic research. Before developing a new treatment, numerous

standards and, measuring by current progress, we expect

clinical trials must be performed in order to gain FDA or

to be close to certifying 37 of the 40 clinical sites.

201

| VIEW FROM THE TOP

A PIONEERING LOCAL RESEARCH CENTER DR. SONIA MAYRA PERÉZ TAPIA Executive Director of the Unit of Research and Development in Bioprocesses (UDIBI)

Q: How did your involvement in the Transfer Factor Project

regulatory affairs, and quality control tests. Our quality

lead to the establishment of the UDIBI research center?

control standards set us apart and specific guidelines,

A: Transfer factor has a long history in Mexico. When it was

norms, and ISO standards are implemented at UDIBI. It is

discovered in 1955, knowledge in the field of immunology

difficult to find a laboratory in Mexico that works with Good

was in its infancy, so when Dr. Sherwood Lawrence found

Laboratory Practice, so we stand out in this regard. We

that partial immunity to infectious diseases was transferred

are still too small to really compare ourselves to research

from immune cells to others, he believed only one molecule

centers in Europe and the US, but our quality services are

was responsible for that effect, which was designated

the same as those from other universities in the world

‘transfer factor’. Later on, as the field of immunology

despite being cheaper. We can perform viral validations

developed and the different biological processes were

for biologics at one-tenth of the average price in US, which

gradually understood, transfer factor remained a mystery.

is about US$1-2 million. At present we provide two local

Respected Immunologist Dr. Sergio Estrada Parra met

companies with such services, and are negotiating with a

Dr. Lawrence at a conference about 40 years ago, and

multinational company for preclinical studies, validation,

discovered that the transfer factor’s action was mediated by

and proof of concept of different molecules.

a mix of more than 1,000 peptides. In 1971 the first product was registered at the regulatory agency and 30 years ago

Q: How is your long-term vision for UDIBI evolving?

Dr. Estrada started producing a small batch of this product

A: We have to take advantage of the different trends

from leukocytes of healthy people in the Escuela Nacional

developing in the pharmaceutical industry right now.

de Ciencias Biologicas of the Instituto Politecnico Nacional

Firstly, we want to focus on providing more specialized

(IPN). I have been working on transfer factor for 20 years. In

services for the development of biocomparables. Later, as

the project’s early stages, there was a great need for more

our expertise is developed, we want to produce innovative

preclinical studies and general development, but we quickly

biopharmaceuticals. UDIBI is a National Laboratory that

moved from producing 20 to 1,000 bottles of transfer

receives funding from CONACYT, and therefore we are

factor a year, and now we are producing 500,000 bottles

committed to providing services for academia. I am part

per year. The product has gained COFEPRIS approval in

of Red Farmed, which is a network for pharmaceutical and

its injectable and oral forms and, due to it being obtained

diagnostic method development at CONACYT, and one

from leukocytes of human blood, strict guidelines and

important goal they are working toward is to find four or

requirements must be complied with, especially for viral

five molecules with a satisfactory research background in

control. As the project continued growing, we needed a

order to transform them into actual products. In order to

larger scientific staff to increase our production capabilities

continue being a National Laboratory, UDIBI has to invest in

as well as to advance our knowledge of transfer factor and

R&D for products that can be commercialized and at present

immunology. As a result we also started providing services

we have about 15 molecules under preclinical development

for the biopharmaceutical industry, and so a designated

that can be transformed into products. The R&D process

research center was founded in 2012, called UDIBI.

encompasses basic research, proof of concept, preclinical studies, and clinical trials. We have several molecules

202

Q: What is the main focus of UDIBI at this point, and

and medical devices in the basic research stage, but only

how would you compare its standards on a national and

a handful of them manage to evolve to the next stage,

international level?

during which the proof of concept and preclinical studies

A: We provide pharmacokinetics and pharmacodynamics

are designed and executed. If positive results are obtained,

in vitro studies for the development of biosimilars. Our

major pharmaceutical companies may be interested in

biggest contracts are for providing biocomparability

conducting clinical trials and we can create technology-

studies, as well as identifying several blood analyses for

transfer agreements with multinational companies with this

clinical trials, expert advice for scientific projects and

purpose and if not, UDIMEB has its own clinical studies unit.

Q: Have you found accessible funding for the projects and

Q: How is the Government reacting to this pressure?

how attractive do you think the field is for investors?

A: The government has already changed the law, but this

A: We are receiving funding from IPN and the private

problem still manifests in research institutes. The government

sector, but we need even more investment to keep

is also investing more in life sciences, and CONACYT recently

growing. I see a lot of opportunities and we also have

signed a contract with SANOFI to provide training in this

the option to expand the business by collaborating with

company, which benefits graduates as well as SANOFI.

the private sector. Mexican authorities removed the local

The National Institutes of Health receive funding from the

plant rule some time ago, and for this reason many big

Government, but their activities and initiatives are different

pharmaceutical companies closed manufacturing plants

from those in public Universities. The latter have business

in the country but continue selling products in the Mexican

incubators that are available to every start-up. Also, the

market. However, the same companies are required to carry

budget and administrative process of research centers and

out test drugs for quality, which is a significant business

projects are determined by the university and a simpler

opportunity. The National Entrepreneurship Institute

administrative process for this kind of projects is necessary.

produced a report that highlights the biopharmaceutical

UDIBI comprises the transfer factor project, services for the

sector as a priority for the Mexico City area, due to the

pharmaceutical industry, and medical care to patients, which

presence of qualified professionals, companies, hospitals,

are considered different projects that receive money from

the regulatory agency, certified laboratories and research

different sources. Even though projects are successful and

centers, although these activities are not yet truly

create a reliable revenue stream, money is not allowed to be

integrated.

used according to the needs of the center. The Government should be aware of this problem and create new models for

Q: What needs to be done for R&D and innovation to

the administration of research centers and projects.

thrive in Mexico? A: The first stumbling block to innovation in Mexico is the

Q: What role should clusters play in helping support

conflict of interest that exists in institutes. Investigators at

industry growth?

institutes are not allowed to commercialize their research

A: There are health clusters in Morelos, Nuevo Leon,

or to create variations, and they do not receive significant

Queretaro, Jalisco, and Mexico City, but none of them are

compensation for their discoveries or products they

functioning properly. The most important cluster with

invent. This explains why transfer factor is still only a

the longest history is in Monterrey, but generally health

project in this institute, even though it has commercial

clusters are not well organized in Mexico. Good planning

potential. Red Farmed published a study on state-of-the-

should involve the participation of companies, institutions,

art of biopharmaceuticals in Mexico and found that there

regulatory agency, and all agents of the innovation cycle,

were hundreds of molecules in research centers that do

but instead there is a lack of collaboration between

not have the appropriate support to become products.

companies, academia, and the government. In Morelos the

Certain articles of the Science and Technology Law and

land intended for developing the cluster is empty because

the Public Servants Law have been reformed to authorize

no security has been established in the area and it does not

the creation of companies by employees but nevertheless

have the necessary services for it to function. A few years

institutes have stringent policies in this regard. Therefore,

ago, the whole sector had great expectations for the cluster

fostering innovation in Mexico relies on shifting the

in Cuernavaca, but it has not been a successful initiative. At

mindset of both Directors and researchers, and this is

present, we work directly with the private sector instead of

the only way for it to thrive. Researchers are expected

being part of a cluster, but we are open to participating in

to engage in passion-driven scientific endeavors without

clusters in the future if they are properly structured.

any commercial or monetary ambitions. However R&D activity can benefit everyone in Mexico if the right policies

Q: What is your strategy for communicating your services

and incentives are implemented. I strongly believe this

to big pharmaceutical companies?

paradigm will change in the next few years since the

A: First of all, a greater budget is needed for improving

number of scientists that are pressuring the Government

our visibility, and we need to incorporate a marketing and

to allow commercializing research is increasing. If this

public relations team into UDIMEB, as well as financial and

does not happen, scientists will continue to leave research

regulatory experts. Furthermore, we need a strategic plan

centers and even the country, to join companies offering

for developing alliances with bodies such as CANIFARMA

more incentives. Not supporting researchers in the

and COFEPRIS for establishing new projects and providing

right way has a dramatic impact on R&D and innovation

more services, which will create jobs for students and

indicators in Mexico.

PhDs. We expect this to take several months.

203

CERTIFICATION BRINGS MORE CLINICAL TRIALS In 2012, The Mexico City Campus at Tecnológico de

According to Dr. Victor Belalcazar, Director of Icaro, one of

Monterrey announced a two-year project to assist 40

the clinical research centers that earned the certification,

clinical research sites in becoming certified to ISO

“there is nothing more important than improving quality as

9001, the global standard for quality management. In

a means to increasing competitiveness.” Yolanda Cervantes,

collaboration with the Competitiveness and Innovation

Clinical R&D and Medical Affairs Vaccines Director at

Program (PROCEI) and the European Commission, the

GlaxoSmithKline Mexico, said that more research centers

aim of the program was the training and certification of

are expected to join this initiative and become part of the

40 Mexican small and medium enterprises (SMEs) that

collective drive for quality that Mexico is experiencing.

conduct clinical studies. The clinical trials industry in

Similarly, Francisco García Zetina, Executive Director of

Mexico is expanding, and more collaboration among key

Products and Establishments Approval of COFEPRIS,

players is necessary to promote further development.

stated that certified clinical research centers will undergo

Working for the professionalization of clinical research

less regulatory scrutiny, although by its very nature

and improving the quality of knowledge possessed by all

the requirements are constantly adapting to prevent

actors in the industry will ideally position Mexico as an

compromise of patient security.

attractive investment opportunity for more multinational clinical trials and aid the country to become a clinical

Regarding clinical research in other Latin American

research hub in the Latin American region.

countries, Humberto Reynales, CEO of the Center of Attention

and

Medical

Investigation

(CAIMED)

and

The project began with the concept of developing an

President of the Colombian Association of Clinical

innovative quality model for clinical research centers.

Research Centers (ACIC), described a norm requiring

International regulations as well as the Good Clinical

Colombian research centers to be certified by the

Practice (GCP) standards were reviewed to incorporate the

Colombian regulatory agency INVIMA. ACIC enforces

best requirements and recommendations into the model.

several protocols such as ethics committee improvement

Subsequently, several SMEs were contacted to participate

and training for researchers. Furthermore, he highlighted

in the project, selected according to their experience,

the importance of developing a collaborative network in

knowledge and technological capabilities. According to the

Latin America for strengthening the clinical trials industry

Project Leader, Dr. Dora Carranza, Director of the Clinical

in the region, while applauding the already high standard

Research Unit of Tecnológico de Monterrey, Mexico City

of clinical research professionals and quality practices.

Campus, one of the biggest challenges was transforming investigator mindsets from an exclusive focus on patient

The 40 SMEs are located throughout the Mexican

care to the acknowledgement of the research units as

territory and the next step in the training process is to

businesses, requiring a business strategy, quality policy

build a network of certified quality centers with the

and standard procedures.

aim of consolidating their presence in the industry and working with related associations, such as the Alliance of

The Mexico City Campus of the University undertook

CROs in Mexico (ACROM) and the Mexican Association

training of staff from the 40 research centers through

courses

the

Investment in the clinical trials industry in Mexico could prove prudent since Mexico has a large untreated patient

implementing a quality management system enables

pool, a high prevalence of a variety of chronic degenerative

companies to increase customer satisfaction by process

diseases, and an array of highly qualified professionals.

control and monitoring. In the clinical trials field, both

Moreover, the country’s geographical proximity to the US

patients and multinational companies are clinical site

and other Latin American countries has created a strategic

customers, so not only must high quality sites comply

advantage. Mexico has proved to be able to conduct

with GCP and regulatory requirements, but also prove

high quality clinical trials through exemplary audits and

capabilities in quality planning, strategic allocation of

inspections results, and recently COFEPRIS developed

resources, evaluation of suppliers, personnel training

a pre-authorization process in which nine Institutes of

and documentation, all of which must be specified in a

Health can review and pre-authorize study protocols

standardized procedures manual. Employment of such

within 20 days. While Mexico continues to develop its

protocols ensures that patient safety is guaranteed and

R&D capabilities, hosting more clinical trials becomes a

customer requirements are met. An authorized company

catalyst for the creation of jobs, as well as representing a

accredited the research centers to ISO 9001 standards.

therapeutic alternative for patients.

204

than

two

services

(AMIIF).

and

consultancy

Industries

over

direct

Pharmaceutical

Developing

course

and

Investigative

years.

| WORLD CLINICAL TRIALS Map of Number of Clinical Trials in the World (Source: ?)

World 195,286 Canada 14,117

Europe 54,440

South Asia 3,196

US 86,605

Africa 4,657

Southeast Asia 3,991

Mexico 2,401

Middle East 8,138

Japan 3,748

Central America 2,227

North Asia 3,621

Australia 5,136

South America 6,656

East Asia 18,896

Canada 14,117 United States 86,605 Mexico 2,401 Central America 2,227

South America 6,656

Europe 54,440 Africa 4,657 Middle East 8,138 North Asia 3,621 East Asia 18,896

South Asia 3,196 Southeast Asia 3,991 Japan 3,748 Australia 5,136 Source: www.clinicaltrials.gov

205

| VIEW FROM THE TOP

AN ASSOCIATION TO SUPPORT CRO GROWTH JENNY PAREDES President of ACROM

Q: You were recently named president of ACROM. What

delayed our work and the approval process. Now, we meet

are your plans and goals for the association?

with the Ministry of Health on a monthly basis to discuss the

A: ACROM was established five years ago with three

new regulations and representatives of every association

primary aims: to become known as the main Mexican body

review all the information. We are now able to have an open

for clinical research, to upskill staff on project management

and frank discussion with regulatory authorities. However, we

and study coordination, and to organize conferences with

do not expect many changes to the current regulation, since

national and international organizations. These three

these alterations would only add to the elements companies

main goals have been addressed, so we are evolving

must comply with. Instead, any modifications should help

towardsdirect influence on Mexican legislators by working

authorities to catch up with their backlog and become more

in conjunction with other associations such as COFEPRIS

efficient by standardizing processes across the country.

and the National Bioethics Commission, responsible for the legislation governing all the ethics committees in the

Q: You are also creating an association of CROs in Latin

country. We also work with IMSS in its push to increase

America. To what extent will you ally yourself with existing

its number of clinical trials nationwide. The CROs under

CRO associations in other countries?

ACROM currently conduct 90% of all research in Mexico.

A: In 2014, we began an initiative called ACROM LATAM, aimed at uniting all CRO associations in Latin America.

Q: Does ACROM place importance on the creation of

The goal is to standardize processes and to harmonize

relationships with academia and research organizations?

communication across all the countries involved. We are

A: We are collaborating with some universities like UNAM,

still working toward this goal since, at this point, we are still

ITESM, UAM, and La Salle to establish research training

establishing ACROM LATAMâ&#x20AC;&#x2122;s regulatory framework. There

models. We also want to organize a job fair to ensure

are many different working cultures involved, making

that students are aware of the wide range of possibilities

our standardization efforts all the more complex. At the

that clinical research can offer as a career. The expansion

same time, ACROM is also trying to gain recognition by

of clinical research should create many new jobs but, if

TransCelerate, the main association of CROs in the US in

students are unaware of its existence, we will have a lack

order to increase its presence and influence.

of qualified professionals. After that, the next step is to raise awareness about the importance of commercializing

Q: To what extent do you expect the clinical trial industry

research. There is still a lot of work to be done here as

to grow in Mexico within the next three to five years?

many investigators do not understand the need to

A: This area grew by 5% in the last five years but has the

commercialize research. CONACYT has a comprehensive

potential for considerable future growth. Mexico has a

scholarship program with CANIFARMA but these are too

lot of strengths but the main one is the size of its patient

focused on basic research and not on clinical research.

population, which will only keep growing. The public

We need to work together to increase the number of

health sector already no longer has the capacity to provide

clinical studies being carried out. In 2014, we signed a

services to this vast population, so by carrying out clinical

collaboration agreement with AMIIF because they expect

research in Mexico we would be able to offer patients more

to make a huge investment on clinical trials by 2020.

options for care. Patients in Mexico still have a good patientphysician relationship, meaning that they trust their doctorâ&#x20AC;&#x2122;s

206

Q: COFEPRIS will publish a revision of NOM 12 this year.

prescriptions and suggestions. This is highly dissimilar

How will this affect ACROM and its members?

to other countries where patients often request a second

A: The industry has witnessed considerable change in the

or a third opinion. Another advantage is that most of the

last three years as COFEPRIS has become far more open to

Mexican population lacks access to health insurance, which

collaborating with associations in the review and proposal of

makes clinical research potentially beneficial for them as an

new policies. The old regulations were often confusing, which

alternative to access innovative treatments.

| VIEW FROM THE TOP

THE RIGHT CLINICAL RESARCH PROFESSIONALS MIRIAM SERRANO President of the Association of Professional Specialists in Clinical Research (APEIC) Q: What is APEIC’s mission? Can you tell us about some

professionals receive a direct reward from continuous,

of its key activities?

specialized education, a steady job, and from highly

A: Our mission is to convene all the area’s clinical research

competitive salaries. Mexico has great potential to grow

professionals so as to establish a tight network. Our main

in clinical research, so this is a fertile field for young

goal is to strengthen our human capital and maximize

professionals who are integral in accelerating this growth.

Mexico’s competitiveness in the field of clinical research. In the short term, APEIC focuses on building strategic

Q: Plenty of research projects are being overlooked. How

alliances with various stakeholders in clinical research,

are you closing the gap to increase productivity and

which

competitiveness in research?

include

the

relevant

government

authorities,

research institutes, patients, and pharmaceutical industry

A: First of all, APEIC works hard to ensure that both

players. We also seek to work with independent review

sectors realize that clinical research speaks only one

boards and ethics committees (IRBs and IECs), contract

language, as defined by scientific and ethical principles

research organizations (CROs), and other vendors.

and regulations. By sticking to this script, it will eventually become clear that everybody is pursuing the same goals.

Q: What needs to be improved to attract further

The most efficient way to achieve these goals is by working

multinational studies?

together and capitalizing on every possible synergy. On

A: The research industry in Mexico is facing a number

one hand, the pharmaceutical industry needs scientific

of noteworthy challenges at the moment. The industry

breakthroughs to drive innovation. On the other hand, the

is sensitive to changes in clinical trial timelines and the

academy depends on technical and economic support to

startup time in clinical trials is one of the most relevant

continue research. As a result, the academy and industry

indicators of global competitiveness. The number of

should and must be a highly productive partnership. This

clinical trials conducted in Mexico over the last five years

partnership is crucial to the local pharmaceutical industry

has fluctuated, and a direct correlation can be observed

and academy, since it will enable the Mexican industry

between

variations.

to shift from replicating products such as generics and

Research industry growth is stalling overall, and therefore

biosimilars to developing innovative solutions that address

reducing startup times is key if we are to capitalize on

those local health needs that are not currently being met.

Mexico’s full potential, which could amount to three

Furthermore, the academy will benefit from transforming

times the current investment levels. We need to be sure

its research programs into tangible benefits for society,

that all key stakeholders across the board are aware of

which is the common goal of both sectors.

regulatory

timelines

and

these

their responsibilities where regulatory requirements are concerned.

Q: What other major events have you planned for this year? Can you tell us about your main priorities going

Q: To what extent does clinical research appear to be an

forward?

attractive and profitable field for young professionals?

A: Our first priority is to carry out a census on the current

A: The ideal clinical research professional is an individual

state of medical knowledge among clinical professionals

whose experience, training, and education provide the skills

nationwide. Based on this data we can identify training

to yield high quality data. Research subjects’ rights, safety,

needs and thereby plan our annual academic program,

and well-being are protected by local and international

which

regulations, as well as scientific and ethical standards.

conference. We also plan to launch the National Program

Therefore, an awareness of all of these regulations is

of Certification of Clinical Research Professionals (CRP),

crucial. Another important factor is the researcher’s ability

with a view to demonstrating that CRP in Mexico have the

to meet trial commitments – timelines, recruitment, quality

skills, knowledge and expertise required to compete at a

assurance as well as their own predictability. Research

global level.

will

then

integrated

into

our

national

207

| VIEW FROM THE TOP

ASSURING OPTIMAL SITE QUALITY PARAMOUNT DR. JOSÉ LUIS VIRAMONTES Director of Remote Site Management and Monitoring at PPD and Former President of ACROM

Q: How would you classify Mexico’s success in attracting

Q: Is COFEPRIS taking the right action in order to speed

clinical trials to date?

the process along?

A: By comparing the number of trials implemented in

A: We have seen significant cooperation and COFEPRIS

Mexico to other countries in Latin America, we can perceive

has proposed new initiatives to improve timelines. They

that we are in a competitive position. There is evidence

separated approvals from amendments, which used to

that the quality of research in Latin America is on par with

run simultaneously and was problematic since there are

any other country in the world. Although there are some

usually several amendments per protocol. We are also

problems in the region, we have also clear strengths and

exploring other alternatives, such as the possibility to run

we are trying to promote the industry among decision-

the ethical committee approval process parallel to the

makers all over the world. To attract foreign companies, we

approval process by COFEPRIS. Right now, unlike in other

are increasing our collaboration with academia and with

countries, this process is sequential: ethical committees

research institutions, with a host of great researchers who

have to approve the proposal before it can be submitted

have a mainly academic approach. I would say that their

to COFEPRIS. In 2013 a new and efficient initiative called

focus is on clinical training and academic research so they

Unidades Habilitadas para la Aprobación de Proyectos

have little interest in clinical trials. At the same time, clinical

de Investigación (UHAP) was launched. Nine units were

investigators perceive the CROs as intermediates between

created at the most important national institutes of health

themselves and international pharmaceuticals. So our

in Mexico with the objective of accelerating the approval

current goal in Mexico is to improve our relationship with

process. Working independently from ethical committees,

universities and research institutions in order to promote

they evaluate the documentation, and within 30 days submit

the importance of recognizing professionals in the field of

it to COFEPRIS who will then require only 20 days to review

clinical research.

it, reducing the approval time by about a month. COFEPRIS also has a new initiative to alleviate their backlog of clinical

Q: What is your opinion on the timelines involved in

trial approvals before the end of the year called the Grupo de

bringing a product to the market in Mexico?

Alta Productividad (GAP). They contact every company that

A: Mexico has very well defined processes to approve clinical

has projects with pending approvals, requesting additional

trials. We are working together with the government to

information as needed in every case, and once provided, they

address pertinent issues, and timeframes in Mexico are now

agree on a meeting to review the submission.

shorter than in other Latin American countries. The approval

208

process takes about six months from the beginning of the

process to the final decision by the regulatory authorities. In

certifications – how important are these?

clinical

research

centers

are

acquiring

general we are working within very competitive parameters

A: We all agree that training and certification will bring

and on average, the speed of obtaining approval is faster

widespread benefits to the industry. However, while

than that of other large countries. There are three steps that

certifications are useful, by themselves they do not prove

dictate the whole approval processes. Firstly, the company

that a site is compliant with regulatory practices. Certification

submits the subject drug to regulatory authorities. While this

is different to effective performance. A global problem is the

is a relatively efficient process, there are still some areas of

lack of a certification that can guarantee quality performance

opportunity to simplify our internal procedures. The second

in research. A company needs internal certification to prove

step is related with the approval from ethical committees

they are compliant with ICHs and GCPs and that they are

as required by the regulatory agency. The third component

trained in good clinical practices but there is no official

in the clinical trials approval process relates to the agency

accreditation for this. Like in many countries, in Mexico there

review (COFEPRIS). They have an official timeline of three

is no mandatory certification to conduct pharmaceutical

months, and although timeframes have improved, there are

research. As CROs, we are most concerned with assuring the

still delays and backlogs.

quality of the site.

| VIEW FROM THE TOP

OUTSOURCING CLINICAL RESEARCH TO DRIVE COMPETITIVENESS CECILIA MORENO Head of Clinical Operations at PPD Q. How seriously is the CRO industry taken as a sector in

opportunity to optimize resources and expertise within the

its own right in Mexico?

region and boost our delivery features to the benefit of our

A: CROs play a significant role within the clinical research

clients. The Northern Cone is augmented and balanced by

(CR) industry in Mexico and all over Latin America, mainly

the Southern Cone, which is comprised of Argentina, Brazil,

due to the general trend of outsourcing CR services. In

and Chile.

Mexico this is partly a result of the integration of the local CRO industry association in ACROM, and its important role

Q: Recently IMSS opened to clinical trials – are you hopeful

in interacting with the industry and the regulatory authorities

this will incrase clinical trial levels?

such as COFEPRIS. In the coming years, the CRO industry,

A: IMSS and has an impressive infrastructure, with almost

as a recognized sector, will keep on acting as a consolidated

2,000 medical units nationwide, of which 36 are third-level

driver to promote the competitiveness of Mexico.

hospitals. In 2013, IMSS provided more than 125 million office visits, which equates to more than 350,000 a day. Over

Q: In spite of its strengths, only 1.2% of global trials are

the past ten years, few companies have conducted clinical

conducted in Mexico - how can this be improved?

trials within IMSS, but this new direction is now opening the

A: In general, all of Latin America has the potential to

possibility to conduct pharmaceutical studies in its facilities.

increase its participation in the pharmaceutical research

This openness should be considered as very positive, with

market. As an emerging country, Mexico still needs to

the hope of substantially increasing Mexico’s potential to

develop and regularly promote its advantages, such as its

compete for large global and regional trials.

geography, population, epidemiology, economy and medical infrastructure. The three most important factors in which all

Q: What is your perspective of Mexico as a platform for

stakeholders are working together are the improvement of

managing more clinical trials?

professionalization of clinical sites, the implementation of a

A: Latin America is attractive to global investors given

more efficient regulatory process to approve clinical trials,

its large population, and wide accessibility, among other

and finally the encouragement of greater collaboration

factors. Under these circumstances, Mexico currently has

among academia, regulatory authorities and the industry.

a great opportunity to become the regional leader in CR

Working in an integrated manner within the region will also

due to its current positive macroeconomic environment

help to increase its competitive position in terms of country

and open regulatory position. There is a general effort

mix determination and resource optimization.

in Mexico to replicate as much as possible the proven successful Korean model (Korean Network for Clinical

Q: What role does the PPD office in Mexico play locally

Trials, KONECT), which may help growth.

and regionally? A: Mexico was the third office PPD opened in Latin America

Q: How do the ongoing delays in approving and opening

in 1999, after Brazil and Argentina, in response to the

new protocols impact CROs?

growing potential of the region. During the last 15 years,

A: The average clinical trial approval timeline in Mexico, about

PPD’s main role in Mexico has been to support the global

six months, can be considered competitive when compared

and regional business through using the highest quality

with other Latin America countries. However, it is widely

standards. In the local market, PPD has been building a solid

recognized that there are still many key development areas

image with strong and proactive participation in most of the

that must be addressed. COFEPRIS is actively proposing ways

local CR forums. In Mexico we have always been responsible

to enhance the efficiency of its internal processes, to address

for clinical operations conducted in Central America and

the approvals backlog. They are also requesting the industry

the Caribbean, and since 2014 we have been part of PPD’s

help with the process by holding meetings to discuss all

Northern Cone of Latin America, which includes Colombia,

pending approvals and collectively reviewing all the relevant

Ecuador, Peru, and Venezuela. This structure offers us the

information, and so far this strategy has been effective.

209

REGIONAL DEMAND FOR LOCAL CLINICAL RESEARCH KNOW-HOW Only 15 years ago, the Mexican clinical trials industry was

In its 15 years of operation, Infinite Critical Research has

virtually non-existent. With very few experts in the country

developed significant expertise in financial planning

and with a lack of proper regulations, big pharma companies

and risk management to protect itself against uncertain

were simply uninterested in bringing clinical trials to Mexico.

revenue streams.

This combination of factors led Arturo Rodríguez, CEO of Infinite Clinical Research, and his partner to found Infinite

Aside from these financial constraints, Infinite Critical Research

Clinical Research as a CRO that could provide regulatory

has had to keep up with the evolution of Latin America as a

affairs

and

destination for clinical trials. Mexico only emerged as a clinical

international CROs. Today, he sees his company as a unique

research hub in recent years after its regulations for the

success story in the Mexican clinical trials industry. Competing

industry finally caught up with expected standards. In 2000,

with multinational CROs is no easy task. As the headquarters

when the CRO took its first steps, Argentina was the preferred

of the largest pharmaceutical companies are located

location for clinical trials in the region. “The situation changed

abroad, the selection of countries for conducting clinical

dramatically as Mexico improved its services, competitiveness,

trials is also performed outside of Mexico. Furthermore,

and specialists,” says Rodríguez.

services

for

pharmaceutical

companies

international CROs have the size, resources, infrastructure, and knowledge to conduct and manage multinational clinical

Recently the public authorities have taken real steps to help

trials as outsourcing services for pharmaceutical companies,

bring more clinical trials to Mexico. IMSS has been open

allowing them to dominate the global market. Nevertheless,

to conducting clinical trials without holding intellectual

whenever companies begin operations or open protocols in

property rights, and Infinite Clinical Research has a number

a new country, they face the challenge of complying with

of ongoing clinical trials with IMSS that have shown

local laws and regulations, which requires experienced and

promising results. COFEPRIS has also been transformed: in

knowledgeable personnel. According to Rodríguez, Infinite

2012, it conducted audits of clinical research sites, followed

Clinical Research has been catering to this need since its

in 2013 with a process to verify the compliance of ethics

foundation: “we have provided 70% of the international

committees as well as the certification of specific CROs in

CROs based in Mexico with legal support to establish their

2014. Alongside this, COFEPRIS has implemented a pre-

operations in the country. This is better than competing

authorization process in which the National Institutes of

against them by trying to attract clinical trials,” he says.

Health can review protocol submissions within two weeks. According to Rodríguez, these steps have reinforced

“The challenge for local CROs is

provide

services

and

support pharmaceuticals with the same quality and expertise as international CROs” Arturo Rodríguez, CEO of Infinite Clinical Research

Mexico’s leadership position in Latin America at a time when different players in the clinical trials industry are increasing their quality standards. Infinite Clinical Research is ready to capitalize on the changes taking place by expanding in Mexico, as well as in Central America and the Caribbean. “These countries need Mexico’s support for developing this promising industry, which is beneficial to patients and national economies. We have experience in promoting clinical trials in countries

210

This is not the only challenge facing local and smaller CROs

with environments that do not allow them to meet their

as drug development is also a high-risk business. With

full potential,” reveals Rodríguez. “Besides this, we will

only one out of 5,000 molecules becoming an approved

consolidate Infinite Clinical Research in Mexico now that

drug, billions of dollars are invested in molecules that may

the world has begun to recognize the advantages of

seem to be apparently safe and effective in early stages of

conducting clinical trials in the country.” Despite this

development, but ultimately turn out to be insecure and/or

positive vision for the future, he still hopes for one final

ineffective later on before being canceled. “Multinational

change. He believes that Mexico must undergo a cultural

CROs are absolutely aware of this risk, and they plan their

transformation to move beyond a widely held belief

operations and budgets accordingly,” states Rodríguez.

among Mexicans that clinical research is an unethical way

However, such advanced planning is trickier for local

of experimenting with patients. “Conducting clinical trials

CROs. If a protocol managed by Infinite Clinical Research

must be recognized as a highly regulated professional

is canceled due to security issues, up to five months may

activity

lapse until a new contract for a study protocol is signed.

innovations,” he concludes.

that

benefits

people

with

very

important

THE 13 PRINCIPLES OF GOOD CLINICAL PRACTICE (GCP) GCP is the global standard for conducting research involving human beings. It comprises 13 ethical and

5. Clinical trials should be scientifically sound, and described in a clear, detailed protocol.

scientific quality principles aimed at protecting the safety

6. A trial should be conducted in compliance with the

and well-being of human participants and applies to all

protocol that has received prior Institutional Review

clinical investigations, with a particular emphasis on clinical

Board (IRB) approval, Independent Ethics Committee

trials of medicinal products and medical devices. It was

(IEC) approval or favorable opinion.

developed by the regulatory authorities of the EU, Japan,

7. The medical care given to, and medical decisions

and the US, in a group named the Tripartite International

made on behalf of, subjects should always be the

Conference on Harmonization (ICH). The agreement was

responsibility of a qualified physician or, when

finalized in 1996, and became effective in 1997. Soon after

appropriate, a qualified dentist.

implementation, the GCP gained international recognition

8. Each individual involved in conducting a trial should

as a benchmark for best practice, becoming a reference for

be qualified by education, training and experience to

many regulatory agencies around the world while creating local regulations for clinical trials.

perform his or her respective task(s). 9. Freely given informed consent should be obtained

1. Clinical trials should be conducted in accordance with

from each subject prior to clinical trial participation.

the ethical principles that originate in the Declaration

10. All clinical trial information should be recorded,

of Helsinki, and that are consistent with GCP and the

handled, and stored in a way that allows its accurate

applicable regulatory requirements.

reporting, interpretation, and verification.

2. Before a trial is initiated, foreseeable risks and inconveniences

should

weighed

against

11. The confidentiality of records that could identify

the

subjects should be protected, respecting the privacy

anticipated benefit for the individual trial subject and

and confidentiality rules in accordance with the

society. A trial should be initiated and continued only

applicable regulatory requirement(s).

if the anticipated benefits justify the risks.

12. Investigational products should be manufactured,

3. The rights, safety, and well-being of the trial subjects

handled, and stored in accordance with applicable

are the most important considerations and should

good manufacturing practice (GMP). They should be

prevail over interests of science and society.

used in accordance with the approved protocol.

4. The available nonclinical and clinical information on an investigational product should adequately support the

13. Systems with procedures that assure the quality of every aspect of the trial should be implemented.

proposed clinical trial.

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| VIEW FROM THE TOP

BRINGING PHASE I STUDIES TO MEXICO KAREN HAHN Director of Clinical Trial Management at ICON

Q: What role does Mexico play in ICON’s global strategy?

as larger molecules, which involve complex protocols and

A: ICON is a multinational company from Ireland that opened

study designs, are replacing them. These studies are harder

its Mexico office in 2004 and is now the largest in the region.

to manage as they involve different tests and information

We have two hubs in Mexico, one for commercialization

than regulators are accustomed to. Another emerging area

and another for medical safety. The latter now incorporates

is clinical trials for medical devices. ICON and other CROs

about 30 people and provides services to Latin America,

are also starting to bring Phase I studies to Mexico, which

Europe, and the US during Phases II and III including post-

are scarce due to a lack of experience conducting these

commercialization studies and regulations. The FDA is

studies, making international companies reluctant to bring

highly interested in results from our Mexican offices, as

them into the country. The country has many strategic

Hispanics are one of the largest minorities in the US and it

advantages in terms of attracting these studies such as

is easier to capture patient data in Mexico than in the US.

lower costs and highly qualified professionals.

Q: In what ways can CROs differentiate themselves as the

Q: In your opinion, does Mexico have the correct

marketplace becomes more competitive?

regulatory environment for clinical trials?

A: We are heavily investing in technology and recently

A: We do not yet have the appropriate regulation but

launched eConsent (eIC) which was developed using insight

COFEPRIS is working on modernizing the system. It is

provided by research from Carnegie Mellon University. This

important for us to communicate the knowledge that we

is built on our Firecrest technology platform that enhances

have gained over the years and to implement the necessary

study performance by delivering a range of tools, services,

reforms in order to be able to compete with other countries

applications and solutions for more effective investigator-

in Latin America. COFEPRIS has implemented some novel

patient engagement, leading to better study management.

efficiency strategies, such as the High Productivity Group

We are providing this service for all our clinical studies and

(GAP), which was in charge of reviewing all the pending

other companies are hiring us based on that system, even

submissions last year. Also implemented was the Enabled

those that are conducting their own clinical trials but want

Units for Pre-judgement Support (UHAP), a group made up

to incorporate our Education Technology Platform.

of nine national institutes that are supporting COFEPRIS in its pre-approval process. COFEPRIS also received international

Q: How much work is there actually right now for CROs?

recognition last year from the WHO as an approved

A: At this point 60% of clinical trials in Mexico are conducted

Regulatory Agency in Vaccines as well as PAHO endorsement

by CROs and ICON is one of the top five companies in this

after their inspection. We need to build on this recognition,

area in terms of size, projects, and revenue. Pharmaceutical

and while this will be a relatively slow process, eventually

industries see us as partners and trust us to provide insight

COFEPRIS will be recognized by the global industry.

into clinical development and conduct whole programs, not just single studies. We support our clients in early phase

Q: Is there a positive perception from patients of clinical

studies by helping them to determine which molecules are

trials in Mexico?

most promising using technology that can predict to a certain

A: Patients used to have a negative perception of clinical

extent the functionality of a molecule. We are also starting to

trials, and we have been working to change this. An ongoing

conduct bioequivalence studies and we have trials specific to

issue that discourages patients is that Mexican regulations

vaccines that are new to Mexico’s national health system.

prohibit their remuneration. We are only allowed to pay healthy volunteers and then only a small stipend that

212

Q: What are the main trends being seen in the clinical

cannot qualify as a salary, so there is a need to focus on

trials industry driving ICON’s growth?

other benefits we can deliver to participants such as access

A: At this point biosimilar studies are more common than

to high level medical attention and to novel study drugs or

generics. The number of small molecule studies has reduced

devices.

| VIEW FROM THE TOP

OPTIMAL ENVIRONMENT FOR ONCOLOGY STUDIES JENNY PAREDES Manager of Clinical Operations at PRA Health Sciences

Q: How have you tailored your local presence in Mexico to

to adapt, but now we are able to implement risk monitoring

fit the particular market here?

on a daily basis with real-time data provided through

A: We carry out both full service studies and embedded

technology. The systems facilitate the process and make

studies, the latter being a brand new department integrated

us more detail-oriented. Further benefits of the technology

into our infrastructure. We did this by acquiring a local CRO.

we use include the fact that the client is given the same

We currently service around ten local contracts within the

information that we see, and we are able to interpret results

department of embedded studies alone. The embedded,

more quickly, meaning we can implement action plans

or implanted model, involves situating a resource within

within hours. An emerging market within clinical trials is

the company to monitor the study carried out by client.

mobile clinical trials, incorporating smartphones, meaning

This diversification has created a significant opportunity

that in the future even a laptop will not be necessary.

for us, although we still see demand for our full service studies. We find that the full service studies cater more

Q: Do you think typical late diagnosis of cancer patients in

to international needs, whereas the embedded research is

Mexico is an opportunity for CROs like PRA?

mainly carried out locally, due to the higher level of control

A: This issue has a significant impact on PRA in particular,

the option provides to the client.

since the majority of our studies are conducted in oncology and we are a renowned company in this field. Around

Q: What type of training do you provide in order to keep

75% of our studies centers on oncology, with roughly 25%

employees up to date about the various industry changes?

constituting Central Nervous System (CNS) studies. There

A: Each member of our team, CRA or otherwise,

is definitely an opportunity in the field and there are two

undertakes an initial 30-day training program upon joining

favorable factors for PRA. One is the fact that the Mexican

the company. The process involves training on local

population places great importance on physician-patient

Standard Operating Procedures (SOPs), client SOPs and

relationships, meaning that they do not tend to seek second

project-specific SOPs and this forms the basis of the CRAâ&#x20AC;&#x2122;s

opinions since they have an inherent trust in their primary

continued growth within the company. Every three months,

care physician. The other advantage is the prevalence of

PRA has a standard of issuing updated SOPs, since the

late diagnoses in Mexico. Despite efforts by the government

industry is constantly changing, so all PRA employees are

in campaigning for breast cancer awareness, there still

regularly retrained. Each CRA must also pass a quality visit,

exists a pronounced lack of education, meaning that poor

meaning that the functional manager monitors the CRA

populations generally do not understand the implications of

within the working environment, and this is carried out at

the disease and do not seek medical treatment.

least once or twice a year depending on the complexity of the study. It is not project-specific, but gives us an effective

Q: How do potential clinical trial patients access

indication of the quality of the study, understanding of the

information about relevant studies?

study, and whether the sponsor requirements are being

A: We have identified awareness-raising as an area in need

met. We also implement an annual online four-day CRA

of development. At the moment, we generally advertise

assessment, which gauges the training quality provided to

through newspaper advertisements and word-of-mouth.

the CRA and whether or not employees are up to date with

Sometimes

developments in the current clinical research industry.

we also have doctors who specialize in certain diseases

physicians

provide

recommendations

and

or conditions acting as oppinion leaders, who identify Q: How has the incorporation of technology impacted the

potential patients through their own practices and medical

way in which clinical trials are conducted?

contacts. It is becoming easier to communicate with patient

A: Technology has created a significant change in

associations, who can facilitate discourse at a patient level.

monitoring, which impacts quality of training and the way in

Additionally, social networking is now invaluable in terms of

which quality reviews are carried out. Initially, it was difficult

raising awareness, so we advertise through social media.

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| VIEW FROM THE TOP

WORLD CLASS LOCAL RESEARCH FACILITIES DR. SERGIO GUERRERO President/CEO of Accelerium Clinical Research

Q: What does your considerable experience in the regional

range of clinical trials including dental studies, bioequivalence

clincial trials industry tell you about Mexico?

and biotechnology studies from phase I to phase IV for the

A: In 2000, I was relocated to Mexico and at that stage it was

testing of drugs, biologics and medical devices. We are

clear that Mexico was participating in very a small number of

among the very few research sites that have the required

clinical trials. Most clinical trials were performed in Europe,

international infrastructure to perform Phase I clinical trials

Canada and the US, mostly because the pharmaceutical R&D

in Mexico. We performed our first phase I trial just last year

areas were concentrated in those countries. Pharmaceutical

so this is still a very small operation. Of our current studies,

companies slowly began to explore the option of Latin

80% are clinical phases and 20% bioequivalence studies,

America playing a part in clinical trials. There are three key

since 95% of our studies are commissioned by international

countries that interest pharmaceutical companies: Brazil,

companies from the US or Europe.

Argentina, and Mexico. Pharmaceuticals are generally more interested in these countries for clinical trials due to

Q: What are some of the main challenges facing the CRO

their established regulatory framework and experienced

sector in Mexico?

medical professionals. Mexico itself is a significant country

due to the evolution of regulatory framework and the

appropriate research sites and meeting the deadlines

better understanding of clinical research practices among

for recruiting the number of volunteer subjects for each

investigators and ethics committees. Additionally, the

study contracted. Our international indicators illustrate

presence of the significant transnational CRO industry means

that the clinical research industry is 50-60% behind

that Mexico is now the second most significant country for

schedule due to incomplete patient recruitment within

participation in clinical research in the Latin American region.

the allocated time. A research site usually requires from

The

biggest

challenge

for

CROs

selecting

three to 20 patients for a clinical trial depending on the Q: What is the history of Accelerium in performing clinical

drugs being studied and the study selection criteria.

trials?

Selection criteria are also strict, and when selecting one

A: Accelerium was created in 2011 for the execution and

patient for a particular trial more than two thirds of the

administration of clinical trials in Mexico. We are pioneers

evaluated patients are rejected due to incongruity with

in the industry, working alongside the biotechnology and

the study criteria. If a site fails to complete the patient

pharmaceutical industries in collaboration with regulatory

recruitment within the allotted time it can be difficult for

agencies in order to increase our international exposure.

the CRO to promote future studies with the same client.

Now we offer several services to the local and international

Perhaps it is necessary to work on oversights related to

pharmaceutical industries including reviewing project

training and site infrastructure in order to create better

feasibility, recruiting investigators and patients, and

standards among the research sites.

ensuring that studies follow national and international regulations. We have all the necessary resources to perform

Q: How do you identify the right patients?

clinical trials including a management teams, clinical

A: Our first step is to analyze the patient population and

teams, investigators, laboratories, quality assurance, and a

the local incidence of the disease needed for any particular

pharmacy. We also have experienced clinical teams with

clinical trial. Subsequently, we approach physicians or

qualified specialists, nurses, technicians, and ethics and

investigators for potential patients that qualify according

research committees. Our facilities and equipment are

to the study criteria. The second strategy is to publish an

fully functional with 36 beds and specialized areas for

advertisement in the local newspaper directed towards a

interchangeable drug and biotechnology studies.

particular disease or study. Patients associations proved to be an effective method of recruitment since we were

214

Q: What type of studies does Accelerium perform?

able to find many groups of patients that have the same

A: Our current 6.1km facility was created for the execution of a

disease and are seeking alternative treatment.

UNITS TO SUPPORT PRE-AUTHORIZATION (UHAPS) Nine enabled Units to Support Pre-authorization (UHAPs) of clinical trials were created as part of the collaboration framework to evaluate clinical research protocols between COFEPRIS and the Coordinating Commission of the National Institutes of Health and High Specialty Hospitals (CCINSHAE), with the aim of improving the authorization process for clinical trials in Mexico. 1.

Children Hospital of Mexico Federico Gรณmez

2. National Institute of Cardiology Ignacio Chรกvez 3. National Institute of Oncology (INCAN) 4. National Institute of Medical Science and Nutrition Salvador Zubirรกn (INCMNSZ) 5. National Institute of Respiratory Diseases (INER) 6. National Institute of Neurology and Neurosurgery Manuel Velasco Suรกrez (INNN) 7. National Institute of Rehabilitation 8. National Institute of Public Health 9. CCINSHAE

215

| VIEW FROM THE TOP

LOCAL RHEUMATOLOGY STUDIES EXPERT SEES STEADY GROWTH MELISSA ROSALES Director General of RM Pharma Specialists Q: What is the story behind the creation of RM Pharma

us, as well as becoming the site with the largest number of

Specialists?

patients worldwide in one study in rheumatoid arthritis, in

A: RM Pharma was established in 2009 to provide consulting

2013. The audit of the sponsor produced zero findings, which

services to the pharmaceutical industry and to conduct

positioned the site and Mexico as a country where studies

clinical studies as an independent monitor. Entrepreneurship

are conducted with high quality and meet international

has been at the core of RM Pharma since its creation. My

standards. However, if we were to have an inspection by

experience in the pharmaceutical industry compelled me to

the FDA this would allow us to continue learning from

take the risk of creating my own company, and it started as

observations or findings generated to improve our current

a clinical research site specialized in rheumatology in 2010.

quality management system. In addition, this should be

That same year we were selected to conduct two studies,

replicated in other clinical research sites in the country to

and by 2013 we had 12 studies to conduct that year.

improve the image of Mexico as a partner of choice in which to conduct future clinical studies.

Q: What is the impact of autoimmune diseases in Mexico? A: The field of autoimmune disease in Mexico is similar to

Q: What other activities does RM Pharma have besides

other countries in the region. It is important to point out

clinical trials to promote health in Mexico?

that autoimmune diseases cover a wide spectrum of clinical

A: At RM Pharma we have an annual plan for disseminating

entities, affecting joints, connective tissue, skin, liver, lungs,

health information. For example, we generate quarterly

and thyroid gland, among others. We are working mostly

conferences for patients and the general public on

on rheumatic autoimmune diseases; of these, rheumatoid

autoimmune

arthritis is the most pertinent. It affects 1-2% of the

associations and provide workshops on nutrition and

population and is one of the main causes of disability in

stress management.

diseases

and

approach

patient’s

Mexico. The coverage of social security has increased in recent years and several efforts have been made to inform

Q: Only 1.2% of multi-national clinical trials are conducted

the general population about this rheumatic disease.

in Mexico – what needs to be done to attract more studies? A: In the past, there was no legal certainty for the

Q: Being certified by ISO 9001, what are the advantages

authorization of trials, with rules and requirements varying

of implementing a quality management system in the

with each new head of the COFEPRIS. Today this situation

organization?

is changing with new proposals from COFEPRIS to reduce

A: With this system we have an overview of the tasks that

protocols approval time and the generation of a national

need to be done, not only one particular task at a time.

database of clinical research sites and a database of

Moreover, the quality management system ensures the whole

Principal Investigators operating clinical research in Mexico.

process is recorded so it can be reviewed and discussed

Both databases will be elaborated by the pharmaceutical

at any time, which is convenient for all participants at the

companies and CROs in order to reduce approval timelines

center. The ISO 9001 would also be helpful to promote our

to 20 days. Nevertheless, there is not yet enough clarity as

site by implementing new protocols so that any CRO can be

to how and when this process will start. In addition, in the

confident about the quality provided by our site knowing it

majority of the cases, research sites and pharmaceuticals

has an external and international certification. To date, few

or CROs meet all of COFEPRIS’ requirements, but because

Mexican centers have achieved this qualification.

of the lack of legal certainty, a large number of late starting protocols remain in Mexico due to long official

216

Q: As an FDA audits candidate, how does this influence

approval timelines. Since most clinical research studies

RM Pharma and Mexico’s global reputation?

are international with a competitive recruitment approach,

A: RM Pharma was the top patient recruiter around the world

expected delays prevent some pharmaceutical companies

for a particular study. This achievement was important for

from conducting studies in Mexico

FIGHTING THE BATTLE AGAINST LUNG DISEASE As chronic and degenerative diseases currently play a major

with the creation of jobs and foreign investment. Therefore,

role in big pharmaceutical companies’ innovative portfolios,

this should be a significant motivation for collaboration

the need to conduct clinical trials for such diseases increases.

between

In Mexico today, the risk of chronic and degenerative diseases

companies, and research centers.

the

regulatory

authorities,

pharmaceutical

has overtaken the risk posed by contagious diseases and infections, and respiratory disease is no exception. Tobacco

The work of Dr. Sansores also includes developing a

smoking has a prevalence of 14 to 20% in the Mexican

cutting edge smoking cessation program which is tailored

population, which equates to 20 million smokers, and is

around the individual personality traits of each patient.

directly related to cardiovascular and cerebrovascular

As a general rule, approaches to smoking cessation take

diseases, diabetes, and chronic obstructive pulmonary

a blanket approach and “more effective results will be

disease (COPD). Leading to serious complications such as

seen if programs are tailored to meet patients’ needs on

emphysema, chronic bronchitis, and bronchiolitis, COPD is

a personal basis,” explains Dr. Sansores. There are key

already the fourth most common cause of death in Mexico.

differences among patient genotypes which account for

One company involved in combatting these diseases in

varying levels of neurotransmitters and behaviors and as a

Mexico is Centro Respiratorio de Mexico (CRM), specializing

result, it is not appropriate to assume that a method which

in clinical trials involving respiratory and pulmonary function.

is successful with one patient will be equally effective

“Clinical trials can be a promising alternative for patients who do not have access to private or public healthcare services, especially when dealing with chronic diseases that incur lifelong expenses” Dr. Raúl Sansores, CEO of Centro Respiratorio de México

CEO Dr. Raúl Sansores explains “clinical trials can be a

with another. Ultimately, in genomics there will be a lot of

promising alternative for patients who do not have access to

opportunity for innovation of this type of tailored medicine

private or public healthcare services, especially when dealing

and testing in the coming years.

with chronic diseases that incur lifelong expenses.” In this way, the clinical trials industry helps the healthcare sector in

Dr. Sansores is vocal in raising awareness about the

lessening the burden of disease, efforts that can be further

dangers of smoking and the prevalence of chronic

supported by increasing quality standards in Mexican clinical

smoking-related conditions. Taking into consideration that

research sites. Dr. Sansores is an advocate of investment in

COPD has a prevalence of 12% in smokers, CRM engaged

safety procedures and adopting the quality and commitment

in a mass media program calling for universal smoking

that exists in labs in the US and Europe, so CRM was recently

cessation on November 19, coinciding with World COPD

certified to ISO 9001. According to Dr. Sansores, “taking

Day. On Smoking Cessation Day which falls on March 31,

risks when conducting clinical trials can compromise

a number of activities are carried out in order to raise

patient safety, so this quality accreditation is a worthwhile

public awareness of the issue. Moreover, as COPD is an

investment in that it guarantees all operations within the site

underdiagnosed disease with up to 90% of COPD patient

are standardized, monitored, and effectively managed.”

symptoms going undiagnosed in Mexico, the clinic provides pulmonary function tests free of charge with the

With the recent efforts in reviewing the Mexican Official

aim of preemptively detecting COPD.

Norm NOM-012-SSA3-2012, focus is increasingly being placed on refining the quality requirements for conducting

In terms of expansion, CRM has plans in the near future to

clinical trials and Dr. Sansores describes this development

expand the research center in terms of infrastructure and

as a necessary step. However, he believes that the approval

staff. Developing capabilities for conducting bioequivalence

process for study protocols could be further improved. This,

studies will be a major focus and expansion into new

along with sites’ certification, could strengthen Mexico’s

specialized areas of study such as metabolic disorders are

competitiveness in terms of attracting multinational

in the pipeline. The main goals for CRM are to increase the

clinical trials to Mexico. Clinical trials do not only benefit

number of clinical trials conducted and develop partnerships

the patient, but bring economic advantages to the country,

for establishing new projects in different fields.

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| VIEW FROM THE TOP

TACKLING CHALLENGES FROM BONE DISEASE TO RENAL FAILURE DR. JUAN ALFREDO TAMAYO CEO of the National Committee for the Prevention of Osteoporosis (COMOP) Q: What led you to establish the National Committee for the

Q: Some major reforms have been announced to the

Prevention of Osteoporosis (COMOP)?

public structure - do you see these being implemented?

A: Under harsh economic conditions but with the financial

A: There is a widespread general impression that large

support of pharmaceuticals, I founded COMOP in 1994.

public institutions, such as IMSS and ISSSTE, do not need

The original objective was to perform a range of studies

to be reformed given their successful 60-year history,

with the National Institutes of Health. These studies cover

which complicates any attempts to integrate them. There

clinical trials and epidemiological studies, incidence, and

is already a measure of cooperation between public

prevalence of bone disease. Today, we have expanded

institutions, such as consolidated purchasing of medication

this to include prevention work and we have a clinical

from pharmaceutical companies, which saves millions of

trial facility and our own medical review board. We follow

dollars. On the other hand, many areas, such as drug and

strong standards for quality and transparency, and are

treatment delivery, cannot be fused. The fragmentation

ISO 9001 certified. We are collaborating with companies

between the 32 Secretariats of Health is enormous and

all over the world and are recognized by the European

thus very hard to overcome. Furthermore, one of the largest

Commission and Tecnológico de Monterrey. We have been

obstacles to transforming the health sector is the change

full members of the International Osteoporosis Foundation

of administrations every six years. Every new administration

since 1999.

implements different changes and regulations, making the process of reaching a consensus more convoluted. On the

Q: How challenging was it to acquire funding for COMOP?

other hand, the private sector is ready for change. The

A: We have been working with private donors and

most appropriate solution would be to reach an agreement

pharmaceuticals for more than ten years. Once the

between the public and the private sector.

financial pressure caused by the economic crisis was alleviated, corporations once again sought to provide

Q: Beyond osteoporosis, what other areas of study have

financing through philanthropy. We opened the first

you focused on?

entrepreneur society, Access Salud, where both the

A: I have extensively researched methods for the detection

non-profit and the for-profit sectors could collaborate.

of early-stage kidney disease. These diseases are a

NGOs participate through COMOP while companies are

big financial drain on healthcare resources all over the

administered by Access Salud. We are now looking at

world. Early detection would allow the increased survival

the venture capital programs offered by National Monte

of those suffering. I worked with several investors to

de Piedad or the Bill and Melinda Gates Foundation. We

develop a network of human dialysis centers. Today, there

have business plans for expansion and we want to make

is a growing trend to open specialized clinics in Mexico

franchises.

to cater to diseases as the public sector is currently not offering the most cost-efficient treatments. We have

218

Q: What health initiatives is COMOP involved with?

several initiatives to address kidney disease. Firstly, we

A: We have an initiative called “Bone Health Through Life,”

have a collaborative program, edX, the online education

in which we monitor bone health from birth to the end of

platform which launched in June 2015. Secondly, we

a patient’s life. We are also focusing on dignified aging

want to promote the early identification of non-dialysis

and reestablishing our old advocacy groups that were

dependent kidney disease, for which we are developing a

forgotten during the periods of economic uncertainty.

network of 16,000 doctors. This initiative started in 2015

From 1994, we polished the integrated services for health

and will seek to improve the standard of primary care in the

with the program “Niños y Adolescentes +Fuertes, +Altos,

specialized treatment of kidney disease. The third focus is

+Sanos,” a joint collaboration with the World Health

on hemodialysis, namely the promotion of nutrition and

Organization. We are the only center in Mexico with that

nephroprotection in collaboration with pharmaceutical

collaborative agreement.

companies.

| VIEW FROM THE TOP

FACILIATING CLINICAL PROTOCOLS JOSĂ&#x2030; LUIS MATA Director General of Inspire Pharma

Q: What were the most important opportunities you

the traditional structure of setting up and managing research

identified in the CRO industry segment?

from our facilities, we embed ourselves in the habitat of the

A: Inspire Pharma was established in 2013 with the idea of

patient and investigator. This reduces project risk by ensuring

developing a different kind of clinical research center. We

that investigation procedures are carried out in a familiar

wanted to bridge a gap between two sides of the sector.

environment for patients and physicians alike.

On one side, the pharmaceutical industry is in dire need of professionals trained in clinical research and on the

Q: What proportion of your clients is represented by CROs

other, the private medical community has a high patient

and how have their criteria for research sites evolved?

flow rate but does not perform clinical research due to a

A: Around 70% of our customers are represented by CROs.

lack of knowledge and experience in the field. Therefore,

When selecting a research center, they mainly look for

Inspire Pharma can help the pharmaceutical industry

extensive experience in conducting clinical trials and a high

to identify researchers and physicians who meet all the

population of potential patients. Our working model involves

necessary requirements for conducting clinical research.

providing the necessary experience and knowledge to obtain

Simultaneously, we can train and advise these physicians

quality results while our partners provide clinical expertise

on the correct procedures for carrying out the entire

and high patient volume. Our partners agree that the best

research process surrounding clinical research. Therefore,

way to develop quality clinical research is to develop projects

we facilitate the process of conducting clinical protocols in

in the same environment the patients are accustomed to, so

Mexico due to our quality research services.

they have a deep understanding of our infrastructure model and provide invaluable support. Developing Phase I projects

Q: What do physicians need to understand better about

is not currently in our immediate plans. Furthermore, patients

the clinical trials industry?

experience real benefits through Inspire Pharma. The main

A: Doctors are not familiar with many aspects of the

advantage for the patients involved in such research is the

pharmaceutical industry, such as functionality, purpose

access they are given to a new generation of drugs and

and the avenues for professional development it can

medical devices with the potential to help cure their diseases,

offer them. To counter this, we propose the integration

as well as being able to access private healthcare services,

of education related to clinical research into university

which will closely monitor the development of their condition.

curricula, and in the meantime, forums should be created to train doctors on target areas and to help future researchers

Q: What do you look for in potential clinical research

better understand the pharmaceutical industry. We believe

sites?

that, by educating physicians about key issues facing the

A: All our procedures are based on operating manuals and

clinical research industry, future medical specialists will

SOPs that meet the requirements of any quality system,

be trained with a clear idea of how their medical practice

but do not have a certification by an official entity such as

correlates with clinical research. As a result, there will be

ISO. So far, none of our clients have requested that specific

more opportunities for conducting clinical trials in Mexico.

certification but we believe that it would beneficial for COFEPRIS to create specific accreditations for research

Q: What are the priority areas for your clinical trial studies?

centers. This would be a long term project and we do not

A: We are working on projects related to ophthalmology,

anticipate the implementation of these measures in the near

metabolism, and medical weight loss devices. We determined

future. We have also participated in FDA audits and we know

these areas as our priorities since the incidence of diseases

that we are subject to further audits at any given time. Our

related to these specific fields is high in Mexico, yet treatment

operations rely on manual procedures because we realize

options remain limited, providing the ideal environment for us

there is a direct correlation between the number of successful

to support the countryâ&#x20AC;&#x2122;s medical infrastructure. We are also

audits received by Mexican companies and the attraction the

unique in terms of research centers as, instead of adopting

country poses as a beneficiary of foreign investment.

219

There is a large presence of foreign medical device manufacturers in Mexico due to the country’s manufacturing strengths and the open economy. Mexico is the ninth exporter of medical devices in

the world and is the number one supplier for North America with a market share of 35%. Regulation improvements are also being implemented, such as the Fast Track Health Accord, which allows devices to be approved within thirty days if they are already approved by the FDA or the Canadian authorities. Systems connectivity is becoming more important in healthcare, where equipment and devices play a vital role in monitoring patients in both critical and stable conditions. The growing fields of teleradiology and digital health are thus becoming more relevant in today’s daily medical practice.

The chapter will provide an overview of the medical device manufacturing landscape and examine the improving regulatory process. The role of integrators in providing valuable solutions to both innovative manufacturers and hospitals will be analyzed as well as the opportunities for information systems and digital health in advancing medical care.

HIGHLIGHTS • Manufacturing clusters • Acquisition in the public system • Systems and e-health • Integrators • Regulatory improvement

MEDICAL DEVICES & INFORMATION SYSTEMS

El momento en que la calidad te hace parte de la industria. Nosotros trabajamos para este momento.

// CALIDAD

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ZEISS se ha consolidado en el mercado mexicano desde 1912, siendo hoy la empresa líder en máquinas de medición por coordenadas, posicionándose como un socio reconocido en la industria. met La metrología industrial de ZEISS es un sistema perfectamente equilibrado: desde los componentes hasta los sensores, software, y los mejores especialistas. Todos los equipos están diseñados para ofrecer los resultados más confiables en el menor tiempo posible.

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CHAPTER 9: MEDICAL DEVICES & INFORMATION SYSTEMS 224

ANALYSIS: Medical Devices: An Evolving Industry

226

VIEW FROM THE TOP: Pablo Dávila Gutiérrez, AMID

228

VIEW FROM THE TOP: Alejandro Paolini, Siemens Healthcare

230

VIEW FROM THE TOP: Carlos Jimenez, B. Braun Aesculap

231

VIEW FROM THE TOP: Paulina Escobedo, B. Braun Medical

232

VIEW FROM THE TOP: Sergio Villa Escobosa, BioSkinco

234

ANALYSIS: Classification of Medical Devices According to Risk

235

VIEW FROM THE TOP: Rima Alameddine, CR Bard

236

VIEW FROM THE TOP: Claudia Cárdenas Alanis, Escala Biomédica

237

VIEW FROM THE TOP: Francisco Morales, 3M Health Care

238

VIEW FROM THE TOP: Edna Álvarez, Malvern Instruments

239

VIEW FROM THE TOP: Martin Ferrari del Sel, Dräger Mexico

240

VIEW FROM THE TOP: Luis Nieto, ConvaTec

241

VIEW FROM THE TOP: Ángel de Vecchi Armella, VECO

242

EXPERT OPINION: IMS Institute for Healthcare Informatics

244

INSIGHT: Ulises Bacilio Pérez, Grupo PTM

245

VIEW FROM THE TOP: Marianela Santos Flores, Health Angel Monitor Systems

246

VIEW FROM THE TOP: Antonio Carrasco Ruiz, PLM

223

MEDICAL DEVICES: AN EVOLVING INDUSTRY The Medical devices industry has been growing closely alongside the medical sector. This area is exceedingly large as it incorporates an extremely wide variety of devices. The Global Harmonization Task Force defined a medical device as any article, instrument, apparatus, machine, appliance, implant, software, or material used for many different purposes including, but not limited to, prevention, diagnosis, or treatment of a disease or an injury, the support of life or physiological processes, disinfection of medical devices, and control of conception. The global market for medical devices continues to grow but it is being impacted by three different trends: value-based health care, increased regulations, and internal resource constraints led by the downturn of the economic sector. The production of medical devices worldwide was valued at US$624 billion in 2013 and it is expected to grow at an average annual rate of 7%, thus the sector is expected to reach US$996 billion by 2020, according to ProMéxico. The industry has grown considerably in Mexico, and it is considered to be an important economic sector. According to ProMéxico and INEGI, Mexico currently has more than 2,344 companies with more than 148,000 workers dedicated to the manufacture of medical devices, most of them located in Mexico City, Nuevo Leon, Baja California, Chihuahua, Tamaulipas, and Sonora. Mexico is attractive for international

Currently, Mexico is both the largest medical device importer

manufacturers of medical devices as the country can offer

and exporter in Latin America and it is expected to remain

competitive costs, highly qualified professionals, and a

so for the next few years. According to Espicom, more

geographically strategic position from which to export to

than 90% of medical devices produced by Mexico in 2014

Latin America. The evolution of this sector can be attributed

were exported to the US. The rest is divided among other

to many factors within Mexico including scientific and

markets, including France and Belgium. ProMéxico declares

technological progress, a prolonged life expectancy, and an

that total exports for 2014 reached US$7.7 billion. The main

aging population. ProMéxico states that Mexican production

products exported are medical, surgery, and odontology

of medical devices was valued at US$14.6 billion in 2014 with

instruments (74%), followed by orthopedic devices (11%)

an expected average annual growth of 7.2%.

and respiratory and massage equipment (7%).

Production of OF medical devices in Mexico PRODUCTION MEDICAL DEVICES IN2008-2014 MEXICO

(Source: ProMéxico with dates of System of National Accounts, INEGI and Global Insight, 2015 ) 15,000

14,188

14,360

2012

2013

14,627

13,423 12,161 12,000

9,276 8,578

9,000

6,000 2008 US$ Million Source: ProMéxico, INEGI, and Global Insight

224

2009

2010

2011

2014

MANUFACTURING COSTS IN THE MEDICAL DEVICES INDUSTRY COMPARED TO THE US

Manufacturing Costs In The Medical Devices Industry (Source: Global Trade Atlas and ?, 2015) Mexico -18.9%

CAN -5.4%

-20

-15

NED -5.0%

UK -4.3%

FRA -2.8%

-10

ITA -1.6%

JPN -1.1%

-5

AUS -0.7%

GER 0.2%

Source: ProMéxico

The country is extremely attractive for international

The final three are odontology supplies, surgical materials,

companies as the sector attracted US$1.9 billion in direct

and hygiene products.

investments from 2000 to 2013. Among the main reasons for the interest shown by international companies to produce in

Medical devices are classified according to risk factors set out

Mexico are the considerably lower manufacturing costs of

in articles 82 and 83 of the regulation of Health Supplies, and

medical devices, which cost 18% less to produce in Mexico

COFEPRIS has defined three classes. Class I includes devices

in comparison to the US.

already known in most medical practices with proven safety and efficacy, as well as those devices that are not inserted

Mexico is among the only 34% of countries with a medical

into the human body. Class II refers to devices that are

device policy incorporated into the National Health

already used in medical practices but are manufactured with

Program, according to the WHO. COFEPRIS is responsible

different materials or are used at different concentrations,

for the classification and regulation of all medical devices

and include those that are inserted into the human body

and, taking into account the large number and variety, the

but do not stay inside for more than 30 days. Finally, Class III

Technical Committee of Healthcare Supplies has divided

devices are those that remain in the body for more than thirty

them into six categories based on their intended use.

days. Their approval process and subsequent introduction to

The first is medical equipment, which refers to specific

the market depends on this classification.

instruments to provide medical or surgical attention, or to be used in the exploration, diagnostic, treatment, or

The medical devices industy represents a promising

rehabilitation of patients. The second are prosthetics

area of development for the economy. Backed by a solid

and every device intended to replace or complement an

legal framework and strong regulations to ensure Good

organ or tissue in the human body. The third are diagnostic

Manufacture Practices and avoid the introduction of

agents including antigens, reactants, and growth and

low-quality products, the medical device market is well

contrast media to be used in clinical and preclinical tests.

positioned for expansion.

Mexican exports of medical devices 2008-2014 (Source: ProMéxico with data from Global Trade Atlas, 2015)

MEXICAN EXPORTS OF MEDICAL DEVICES 8,000

7,699

6,886

7,000 6,343 6,072 6,000

5,798

5,064

5,138

5,000 2008

2009

2010

2011

2012

2013

2014

US$ Million Source: ProMéxico, INEGI, and Global Insight

225

| VIEW FROM THE TOP

IMPROVING ACCESS TO WORLD-CLASS DEVICES PABLO DÁVILA GUTIÉRREZ President of AMID

Q: What is your overview of the medical device industry in

Q: Mexico is the ninth largest exporter of medical devices

Mexico and what role does AMID play?

worldwide – do you believe the industry can grow further?

A: The medical device industry is extremely large,

A: Mexico can grow as an exporter of medical devices and

encompassing

NMR

incorporate itself into the top three, but the process will

spectrometers. The industry is divided into several niche

be challenging as several steps must be taken in order to

areas so it is difficult to define it as a whole, as each sector

accomplish this. The first is improving the internal market

behaves differently. The main commonality of the industry

for medical devices. Mexico’s internal consumption of

is its extremely fast growth in Mexico and its potential to

medical devices is relatively low and in order to attract

contribute both to the health and economy of the country.

external investments into the country this has to improve.

COFEPRIS divides the industry according to risk. The

While we are in ninth place as medical device exporters, we

council has a list of basic medical devices that do not

are in 26th place as consumers. The second is to promote

need to be registered, and the others are classified into

the consumption of more Mexican raw materials as at

different groups, all of which have different requirements.

this point their use is minimal. Alongside the Treasury’s

The problem is that once a medical device has been

General Directorate of Light Industries, we are analyzing

approved by COFEPRIS it can be sold to the private sector

the market in order to determine the main requirements

in Mexico but not to the public one, since it must first be

of the manufacturing industry in Mexico. We want to bring

approved into the National Formulary. To be incorporated

together international manufacturers of medical devices

into the National Formulary, a product needs approval by

and local producers of raw materials in order to foment

the General Health Council (GHC) which selects products

cooperation, strengthen the sector, and promote the

according to the needs of the Mexican population. After the

growth of the local industry.

several

fields

from

sutures

GHC has approved a specific device it must then undergo a second revision by each specific institution which aims

Q: What is needed to strengthen R&D in Mexico?

to incorporate it. Thus, when a product is approved by

A: Our government needs to provide more incentives

COFEPRIS, it can only reach a very small percentage of

within this sector. At this point there are some initiatives

the public, as most of the Mexican population uses public

from CONACYT, but Mexico is still far from becoming an

health services and hospitals belonging to IMSS and

industry that generates innovative medical devices. We are

ISSSTE.

working alongside IMSS’ innovation division to bring R&D to Mexico. Now we are focusing on applied research, which

Q: What are the main trends seen in the market for

will eventually allow the sector to develop basic research.

medical devices?

226

A: Several areas are being innovated. An area that is

AMID is also aiming to generate clinical studies to

growing is interconnectivity among devices to allow a

determine

faster and easier transfer of information. Several hospitals

studies are currently not being brought to the country

are attempting to digitize their electronic records in order

as we do not have adequate regulatory guidelines for

to make them easier to access by doctors, which will

their implementation. In Mexico we have large health

allow these hospitals to provide faster and more efficient

institutions, experienced doctors and nurses, and a

services for patients. Another trend is minimally invasive

large patient pool, especially in terms of obesity-related

surgery which requires smaller and more advanced

diseases such as diabetes. As a result, performing clinical

equipment but is less traumatic for patients. Long-term

studies in Mexico would be ideal for several companies in

implants, which can last a patient’s whole life, are also

the US and Europe. Mexico has many experienced doctors

a focus in the industry. All new developments focus on

with innovative ideas, thus we are hoping to collaborate

preserving patient health while being safe for use by

with the IMSS to develop strategies for these doctors to

medical professionals.

develop their own research lines.

the

efficacy

medical

devices.

These

Q: COFEPRIS recently removed 573 medical devices from

service for each given device. Distributors are essential

the list of products requiring registration - what impact

partners for us and we require that they be experts on

has this had?

their fields. Distributors have evolved and are now much

A: Removing these devices from the market will be beneficial

more professional. AMID’s companies are conscious of the

for COFEPRIS as it will allow their regulators to spend

importance of partnering with professional distributors to

more time analyzing innovative medical devices. This will

be able to provide better services and face less risks.

allow medical devices to come to the country faster to help improve the lives and productivity of Mexicans. In fact, less

Q: What other training services do you offer for

than 10% of the Mexican patients have access to innovative

distributors?

medical devices today. The medical devices industry is

A: We have a committee that focuses on ethics and

the most complex for COFEPRIS as it is under constant

compliance as we believe these to be cornerstones for

renovation and so it submits the largest amount of registries

all negotiations. Compliance is a pillar for us and we

for examination. In AMID we currently have 7,100 sanitary

were the first association in Latin America to publish an

registries for 310,000 products with COFEPRIS and over

ethics code for healthcare. All companies that belong to

the next five years we are planning to introduce 1,400 new

AMID are committed to conducting business with the

products. These numbers only represent the 24 companies

utmost transparency and honesty and we are pushing our

that belong to AMID, rather than the sector as a whole.

distribution partners to follow these standards. As well as

COFEPRIS is drafting new regulations for pharmacovigilance

our ethics committee we provide two different training

which aim to oversee whether these medical devices are safe

services, the first designed to help doctors and nurses keep

and to notify regulatory authorities of every negative effect

up to date on the latest medical devices on the market and

or side effect. The goal is to ensure the safety and quality of

their use. Since medical devices evolve so fast, physicians

every product released onto the market.

are often unaware of the latest devices so we train professionals on the safe use of these new technologies. In

Q: How would you describe approval timelines for medical

2014 we provided training for more than 25,000 medical

devices?

professionals among all of AMID’s members, a number that

A: Approval processes are extremely lengthy and can

continues to grow each year. The second one, which we

take several years. A common problem of these long

are implementing alongside our Committee for Regulatory

timelines for the approval of medical devices is that while

Affairs and COFEPRIS, are workshops for our associates to

a product is being approved new variations are being

create simplified dossiers for new products according to

created, meaning that the recently approved products are

the authorities’ requirements. We are trying to introduce

outdated when they finally reach the market. There are

good practices for the introduction of new sanitary

currently less new medical devices being introduced to

registries. AMID is also preparing a training program on the

the market in comparison with generics as the evaluation

impact of the new norm for the Recognition of Revenue for

process for medical devices is based on the guidelines

all General Directors of our companies.

for pharmaceutical approval, so it has many unnecessary requirements. Clinical trials for pharmaceuticals require a large number of people and are extremely expensive. On the other hand, medical devices require a smaller population and shorter timelines so they remain state-ofthe-art when they are approved. One of our goals is to

ACQUISITION OF MEDICAL DEVICES IN MEXICO Less than 10% of Mexican patients have access to innovative medical devices

global average Mexico’s average

collaborate with regulatory authorities to generate specific

18%

19%

guidelines for medical devices. 15%

A: Distribution channels have certainly evolved over the last few years. Mexico is too vast for all medical device

13%

-18%

-38%

2012

changed for medical devices?

11%

2011

enormously over the past few years – have they also

12%

2010

Q: Distribution chains for pharmaceuticals have changed

-33%

-28%

-26%

-33%

13%

14%

10%

companies to have a presence in each region of the country,

Next 5 years

in the installation, use, and repair to provide a timely

2014

Thus we require our distributors to be highly qualified

2013

especially as medical devices require specialized services.

Source: AMID, PwC, and Strategy& analysis

227

| VIEW FROM THE TOP

CLOSING THE GAP BETWEEN THE DEVICE AND THE SERVICE ALEJANDRO PAOLINI Executive Vice President of Siemens Healthcare Q: What is the role of Mexico in Siemens Healthcare’s

Q: Do you believe that healthcare is a priority for the

global strategy?

Mexican government?

A: Siemens Healthcare currently represents less than 20%

A: Healthcare has not been the government’s top priority

of Siemens’ total revenue. However, the healthcare division

for the last two years. In 2014, the medical devices market

remains an important business as the area represents

did not grow as expected for that very reason. At the time,

a significant segment of the company’s profit and we

the government was more concerned with the Energy and

generate a large portion of its cash flow. Healthcare is a

Tax Reforms. However, healthcare will eventually become a

profitable business and global trends indicate that the

priority that can no longer be postponed. Mexico currently

industry will continue growing in Mexico and worldwide.

invests around 6% of its GDP on healthcare, which is low for

Mexico is by far our most relevant market in Latin America

the OECD. Taking into account Mexico’s infrastructure and

and presents great short- and medium-term potential.

population, the government should immediately increase

Excluding Brazil, Mexico is the largest market for us

investments to cover the current demand. The previous

in Latin America, with Colombia in second place but

presidential administration implemented Seguro Popular,

not even making up half of Mexico’s size. On the global

but there are still many gaps to be covered in terms of

scale, Mexico is in tenth place among the second wave of

the number of available talents, infrastructure, medical

emerging countries so it is appropriate to call this country

equipment, and medicines. Siemens wants to cover those

a land of opportunity.

gaps in medical devices as it provides a complete portfolio for all medical devices needed in different markets.

Q: What is your main focus within the healthcare division?

Siemens is widely recognized for its high-level innovative

A: We provide medical devices mainly for diagnostics and

technologies but we do not only sell the latest equipment.

for prevention and we are the only company that covers the

For example, developing countries such as Mexico need

whole spectrum for diagnostics, including two out of three

equipment that is both affordable and good enough to

methods of diagnosis. The first method, which focuses on

cover the large demand. Siemens can offer advanced yet

the physical test from a physician, is a technique that is

affordable solutions to fulfill this need. We are aware that

rarely used nowadays. The other two methods are much

resources are limited and the healthcare sector must look

more popular: through imaging techniques or through

at every aspect before making a decision.

clinical tests. Most companies cover either just imaging

228

or laboratory, not both. Naturally, this means that we face

Q: What proportion of your sales goes to the government

different competitors such as GE and Philips for imaging,

and what percent to the private sector?

and Abbott and Roche in the laboratory segment. This

A: The exact percentages differ from year to year, but

coverage is an opportunity for us as the healthcare sector

an average of the last five years indicates an even split

is continuously growing due to an aging global population.

between both sectors. In the last three years, we mostly

Usually, a person spends 60-70% of their total healthcare

sold to the private sector, since the previous governmental

expenditure in the last 20 years of their lives. In contrast,

administration did not invest in healthcare during their

Mexico’s health profile is starting to resemble that of

last year and the current administration has not increased

other developed countries as communicable diseases are

its investments. In contrast, the private market has been

being replaced by chronic ones, such as obesity, cancer,

quite active, as large private healthcare groups have been

diabetes, and cardiovascular diseases. As long as Mexico

expanding either by acquiring or building brand new

continues growing, the incidence of these diseases will

hospitals. These different growth trends reflect different

only increase. However, one of the main challenges that

needs. While IMSS and ISSSTE have basic needs and do

Mexico must face is the fact that, while chronic diseases

not need the latest technologies, the National Institutes of

are clearly increasing, the public healthcare system still has

Health are focused on cutting-edge research and therefore

to treat communicable diseases.

require the latest equipment. The needs of the private

sector also depend on the type of hospital and its patients,

is only around 30 units per year, which makes it too small

but its main focus is to achieve an investment return.

for us to have local plants dedicated to this sector. Our main competitors are in the same situation and most

Q: How are digitalization and technological developments

international

changing the devices sector?

process in Germany and the US from which most products

A: Digital health and information solutions are quickly

are imported. Furthermore, the medical devices industry

growing in the healthcare sector. It has become clear that

is highly regulated and must remain that way. Our devices

the future lies in the digitalization of services. Siemens has

must be safe and efficient and the public must be certain

already discontinued the use of analog equipment and

of that fact. Therefore, the challenge for all countries is

all our systems are digital. We are making considerable

to have a strong and efficient regulatory authority whose

investments in the development of new operating systems.

main objective is to protect the population. Conversely,

We are also focusing on technology for medical imaging

regulatory authorities cannot be so restrictive that they

in many areas and we are developing new software for

become barriers for innovation. In that sense, COFEPRIS

processing images. For example, we have invested in the

has made huge progress in the last three years, especially

development of the Picture Archiving and Communication

since Mikel Arriola took office. The situation has improved

System (PACS). Another crucial driver is that medical

dramatically but it must keep doing so. COFEPRIS has

resources,

heavily

changed the regulatory framework for medical devices

concentrated in some parts of the country while they are

and has eliminated more than 500 medical devices from

essentially inaccessible in others. Digitalization can help

its list, since they did not comply with regulations. Since

to close this gap as it allows clinics to perform specific

then, several manufacturers have praised Mexico for

tests in remote areas of the country but with specialists

easing up on regulations and making it easier to develop

immediately being able to analyze them from a distance.

new technologies here. Our goal, as part of AMID, is to

Despite this opportunity, Mexico still has a long way to go

help COFEPRIS increase its efficiency. One of the main

as several parts of the country do not even have access

advantages of Mikel Arreolaâ&#x20AC;&#x2122;s administration is that it has

to basic equipment. Closing this gap will be a slow and

always been open to conversation and to new ideas.

including

medical

devices,

are

manufacturers

center

their

production

gradual process that will take considerable time. Q: What are your top priorities for 2015? Q: Do you foresee Siemens manufacturing devices within

A: Our main priorities are to meet our commercial targets and

Mexico and how do you view the change in regulations for

continue expanding as we meet all the necessary conditions

medical devices?

to outgrow the market. While Siemens Healthcare does not

A: Siemens has nine plants in Mexico for several devices

currently have a manufacturing base in Mexico, our plans

but none for healthcare products. This is because it is

are focused on solid and continuous business expansion

complicated to manufacture medical devices in Mexico,

as we expect that the market will grow. We want to take

as the industry requires a high level of technology as

advantage of our strong position and expand our leading

opposed to mass production. For example, the Mexican

position in the diagnostics market, since we are the only

market for Magnetic Resonance Imaging (MRI) equipment

company covering the complete diagnostics sector.

229

| VIEW FROM THE TOP

EDUCATION AND DEMONSTRATION KEY TO COMPETITIVENESS CARLOS JIMENEZ Director General of B. Braun Aesculap Q: How has B. Braun Aesculap adapted its product lines to

technologies such as spinal implants that are well-

accommodate for the unique Mexican market?

established in developed countries. These spinal implants

A: We have chosen to invest in Mexico and we are making

will soon be manufactured at our plant in the State of

great efforts to create dialogue with important players in

Mexico as part of a new worldwide system which will

the sector, such as the Ministry of Health. B. Braun has also

see an increase in our production capacity in Tuttlingen,

joined AMID in an effort to provide a better quality of life

Germany, while several of the production processes will be

to patients. One of the biggest priorities for B. Braun is

outsourced to various countries, including Mexico.

innovation, which is often rejected as a huge expense. Still, while innovative treatments can initially be more expensive,

Q: As part of this outsourcing process, to what extent do

a thorough analysis of the complete value chain must be

you have to upskill your personnel in Mexico?

implemented to determine total costs, and this has shown

A: We do not have highly qualified technicians in Mexico

that innovative technologies can often be less expensive in

as we either have engineers who are overqualified

the long-term. We are collaborating with stakeholders to

or production workers who do not have the proper

change this mindset.

qualifications to operate our machinery. Therefore, we implemented

our

own

five-to-eight-year

educational

Q: B. Braun initiated a joint venture with Promedici in

program in the plant. The process is long as employees

1993. What made Aesculap the right partner at the time

must become experts in each specific competency before

and how has the partnership evolved over the years?

advancing to the next. The problem is that, as employees

A: This joint venture began after an alliance with IMSS,

become more valuable, they also become more attractive

which allowed us to produce in Mexico and specified that

to competitors. Several companies are unwilling to invest in

a certain percentage of our products must be consumed

the training of their employees as they fear high employee

at IMSS institutions. The institute actually became the

turnaround, which is common in other industries. While

promoter of the alliance between B. Braun and Promedici

this is a risk for us, we believe that our compensation

since it was interested in increasing the production of

package and social environment will allow us to retain

medical devices in Mexico. One device that we developed

these individuals as they recognize that they have the

alongside Mexican doctors is a hip replacement, which

opportunity to progress with B. Braun.

is called the Logical System of Arthroplasty (SLA). This product was developed for a specific anatomic situation

Q: How are you creating awareness about the new

found in Mexicans, as it has been discovered that the

products that you are developing?

population has a slightly thinner femur and hip bone.

A: We are investing heavily in our consultancy services. At this point, 40% of our sales are surgical instruments as

230

Q: After IMSSâ&#x20AC;&#x2122; manufacturing requirement was lifted, B.

well as endoscopic and hemodialysis systems. We are also

Braun reduced its production in Mexico but kept its plant

attempting to overcome the common difficulties faced by

open. How has your manufacturing strategy in the country

producers in participating directly in consolidated sales.

evolved over the years?

Very few companies in Mexico are able to deliver to such

A: We are currently planning to increase our production

a wide spread of locations within 24 hours, so we must

capacity and to bring products to Mexico as a result of

determine a way to keep prices competitive while reaching

B. Braunâ&#x20AC;&#x2122;s strategy to increase its number of production

our clients on time, which has led to us handling about 50%

plants in developing countries. Thus, our product portfolio

of our sales directly and 50% through distributors. This

in Mexico must expand, especially in terms of highly

is slightly unusual for most international companies that

innovative products that are currently only available in

depend on distributors, but we like to work directly with

developed countries due to the possibility of incentivized

many clients as distributors are concerned with products

reimbursement.

and do not offer consultancy services.

are

also

introducing

innovative

| VIEW FROM THE TOP

INTEGRATING SERVICES FOR COMPLETE THERAPEUTIC SOLUTIONS PAULINA ESCOBEDO Director General of B. Braun Medical Q: B. Braun Medical came to Mexico in 2011. How has the

Q: Who are your main clients?

company evolved since then?

A: Currently, 80% of our clients come from the public sector

A: B. Braun Medical has had an interesting journey in Mexico

and 20% from the private sector. Our target is to increase our

and we have consistently reached our development targets

strength in the private sector and we are in a strategically

in terms of sales growth and revenue. The Mexican market is

effective position to meet that goal. Hospitals in the public

highly complex for us as we are competing with companies

sector generally use integrators to provide complementary

that have been in Mexico for many years, and it has been

services from several different institutions but since we are

challenging to position ourselves as leaders to bring innovation

manufacturers of both devices and pharmaceuticals we

to the market. B. Braun Group in Mexico is determined to

have the unique advantage of offering complete packages

grow 20% yearly in Mexico. The two divisions that represent

for comprehensive medical treatment.

B. Braun Medical (Hospital Care and Out Patient Market) constitute 65% of sales globally, so we expect to localize this

Q: How did you collaborate with DHL to come up with the

trend by the year 2020, with revenue over US$61 million. B.

most appropriate model for your logistics center?

Braun Medical has the strategic vision to incorporate itself into

A: Logistics services are an extremely important part of our

the Mexican market by improving quality of care. A potential

strategy. While we generally prefer to interact directly with

obstacle to meeting this goal is the lack of certifications and

our clients, in cases where we are unable to do so, we look

unification of practices between different hospitals and out-

for partners with common interests that are able to provide

patient care settings. In September 2012 the publication of

quality services for the end user. DHL offers a specialized

the Official Mexican Norm 022 that defines the Conditions

service for pharmaceuticals, called PharmaShare, which has

for the Administration of Infusion Therapy created the

proven to be innovative, efficient, and safe. An important

opportunity for discourse. Hospitals are now incorporating

challenge for a medical device company is prompt delivery

these good practices and acquiring certifications. We are

of products to hospitals in emergency situations, which is

helping hospitals through these processes as it is extremely

easier to achieve using third-party logistics as we can control

important for end users in hospitals to be well informed and

delivery times at reasonable costs. DHL fully complies with the

up-to-date about medical practices.

regulatory requirements of COFEPRIS and private hospitals and after having worked with them since October 2014, this

Q: What therapeutic areas does B. Braun Medical see as

collaboration has allowed us to reduce logistics costs by 20%.

most important in Mexico? A: B. Braun Medical works in both medical devices

Q: Devices approval can take up to four years â&#x20AC;&#x201C; how do

and pharmaceuticals. We are in the unique position of

you tackle this challenge?

supplying complete therapeutic services related to each

A: We have discovered that integrating services has

medical device, including equipment, disposables, and

accelerated approval times. COFEPRIS is currently taking

medications necessary to obtain the best outcomes for

into account the relevance innovation has for devices, and

patients, providing an integrated service as manufacturers.

while this has proven complex approval times are being

B. Braun Medical is currently focused on two therapeutic

reducing. We are working together to bring innovation into

areas: one being infusion therapy and the other pain

the country. Collaboration begins with the preparation of

therapy. Statistics show that 90-95% of patients that

dossiers to import new devices. It is necessary to provide

visit hospitals require some type of IV treatment, so it is

complete and detailed documentation at every step of the

extremely important to develop protocols both for general

way for all the devices that we bring into Mexico. We also

situations and for specific problems faced by individual

create market access departments. We are trying to bring

patients. In terms of pain therapy, we are global leaders

international experience to the country and apply it to

in regional anesthesia and we provide medical assessment

solve national problems, and we are building foundations

on the best products for specific problems.

to support the launch of good technology in Mexico.

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| VIEW FROM THE TOP

CUTTING-EDGE BIOLOGICAL WOUND TREATMENT SERGIO VILLA ESCOBOSA CEO of BioSkinco Q: How was Bioskinco founded?

for closing chronic wounds of several patients, we decided to

A: Bioskinco was founded in 1998 in search of cell therapy

get involved in this other field of healthcare, always focused

and biotechnology projects developed by Mexican scientists.

on benefitting patients at the hand of specialists, and aware

In 1999 an agreement was signed with CINVESTAV to

that it was a long road competing with many big companies

bring Epifast, which is now a registered trademark, to the

and quality products. In the year 2010, we participated in

market as a start-up project. The product was developed at

the MEDICA conference in Dusseldorf with the support of

CINVESTAV by renowned researchers under the leadership

ProMéxico, offering the world important advantages for

of Dr. Walid Kuri-Harcuch, whose work in turn was based

patients, their families and the healthcare system through

on that of Dr. Howard Green, who developed a human

this unique Mexican technology. Given this current status, we

keratinocyte cell culture in the 1970s. During the time that

believe that Epifast is ready to go international.

he worked with Professor Green, Dr. Kuri-Harcuch, who was then an advanced student, incorporated new developments

Q: How does Epifast work?

into the process, and when he returned to his research

A: Epifast is a layer of cultured human keratinocyte cells

in México he applied a cryopreservation into the layer of

that are produced from a certified cell bank obtained from

human keratinocytes, which allowed the layer of cultured

a foreskin. The human keratinocyte cells have been checked

cells to be stored and carried by a Vaseline gauze for at

for any kind of contamination from bacteria and viruses

least two years at -70°C. This cryopreservant is a Mexican

and to certify that are disease-free. When the product is

innovation, owned by Bioskinco. The production of Epifast

applied to the wound, it encourages healing by delivering

started in December 2000 and the story of Bioskinco has

human growth factors, such as human cells, that allow the

actually written by and due to the success of Epifast. During

tissues to heal in their own healing process. Epifast is a

the first six years of operation, the company focused on

biological product that releases Human Growth Factors

convincing authorities, hospital directors, clinicians, and

like Transforming Growth Factor (TGF) Alpha & Beta. These

nurses of the important role of Epifast in the treatment of

factors, among many others, trigger signal pathways that

burns and the advantages that it represents. The focus of the

allow wounds to heal with the patient’s own cells and tissues.

authorities that we met with was to save money, although always while saving lives and maintaining high-quality

Q: Who are your biggest customers?

standards of care. Some doctors offered their experience

A: Bioskinco’s biggest customer is IMSS. The second largest

to make a cost-efficiency study on the use of Epifast, which

customers are the individual state healthcare systems

showed excellent cost savings of 28-55%. Some physicians

and institutes in various Mexican states. Most states have

who are leaders in the treatment of burns published their

an important support from the Seguro Popular System,

experiences on the benefits for patients when using Epifast,

which covers at least 50 million low- and middle-income

such as less pain, fewer surgical procedures, as well as

people, presenting an enormous task in the New Mexican

better outcomes with less scarring, all of which result in a

Healthcare system. Other important clients are the PEMEX

shorter hospital stay, among other savings and advantages.

hospitals, the Armed Forces and Navy hospitals, the Federal Workers healthcare system or ISSSTE, and the healthcare

232

Q: How did the Epifast brand grow?

system for state workers available in almost all the states

A: During the first five years of Bioskinco, several surgeons

of Mexico. In the private sector many important hospitals

created their own learning curve for the use of Epifast in burn

use Epifast. Insurance companies cover the use of Epifast

cases, including a surgical procedure called “early tangential

at private hospitals, clinics, and in doctor’s offices as the

excision.” Many more doctors and nurses understood the

best treatment for their patients and clients. Private

role of Epifast as a coadjutant for an improved treatment

health insurance companies are therefore very important

of the patients. During that same period, and after many

customers. Finally, private distributors are important

health professionals using Epifast as part of the treatment

customers of Bioskinco based on their knowledge of several

clients and institutions and the opportunities that they offer

Latin America, and we visualize the next step to be Europe,

to expand and deepen the market presence of Epifast.

and other countries like Canada, US, India, and China. After several participations at MEDICA we opened a branch in

Q: How sophisticated is the market for burn treatments

Germany in 2013 and we are in the process of providing

at this point?

the necessary documentation to EMA for registration. We

A: There are several biotechnology based products, most of

are working closely with Mexican authorities to facilitate

which were developed in the US, Asia, or Europe. The market

this internationalization process, and we have its support.

for basic and advanced wound care and burns products is

Inside the company, we plan to increase our production

currently dominated by large international pharmaceuticals,

capabilities by 2017, in order to meet the requirements

like Smith & Nephew, ConvaTec, BSN Medical, MĂślnlycke

of both, national and international markets. This includes

Health

Sciences

investing enough to double our production capacity in

Corporation, and many others, that mainly produce market

the next four years. We will be looking for alternatives to

biomaterials,

financing it next year.

Care,

Organogenesis, equipment,

Integra

nanomaterials,

Life

hydrocolloids,

ointments, creams, supports, gauzes, although the fewest sold by them are biological products. These products are

Q: What are your priorities for 2015?

generally focused on different stages of the wound and burn

A: One is to raise awareness among more surgeons,

treatment process and are based on animal and/or synthetic

physicians, nurses, and hospital administrators of the

compounds like collagen and others, and their technology

benefits of Epifast in the treatment of burns and wounds.

focus is very different from ours. The companies named

We are also working very closely with health professionals

above and many others, big and medium size, have been

to encourage them to publish their experiences and to

unwilling to get involved in cell culture, as it is an extremely

present them in as many forums as possible. Another very

complicated and regulated process. The vast majority of

important priority is to work on a Prospective Study on

cell-based product therapies are developed in different R&D

the benefits of Epifast in the treatment of several types

labs around the world, or are being tested in clinical trials,

of burns and wounds, and to improve the knowledge in

or are in a Phase I or II for registration. However, very few

both fields for the sake of the patients. One important

are competitors as a perfect substitute for Epifast, and

decision that has to be made is whether to develop a

not many as dressings for healing, mostly for covering. We

portfolio for burn and wound treatments. That process

compete in the burns and wound care market with many

was just started with the support of our German branch,

products that are designed to dress wounds and burns using

which is bringing several projects to the table for analysis.

a different mechanism of action. These medical dressings

Finally, it is essential to continue growing. We prefer to do

are manufactured by international companies, among many

this cautiously and sustainably with balanced finances,

others, and most of them are based for distribution in MĂŠxico

ethical and good practices. Bioskinco and Epifast are

as competitors of Bioskinco and Epifast.

focused on bringing hope to many patients who suffer from skin traumatisms, burns, and chronic wounds, and

Q: What are your expansion plans?

to improve their quality of life provided by the hands of

A: We are looking at Internationalization. More specifically

surgeons, physicians, nurses, healthcare professionals, and

we are in the process to export Epifast to several countries in

authorities of MĂŠxico and the world.

233

CLASSIFICATION OF MEDICAL DEVICES ACCORDING TO RISK In

December

2014,

COFEPRIS

re-classified

573

•

products no longer requiring sanitary registration for commercialization, including previously considered low-

with a proven safety and efficacy record •

risk medical devices as well as those no longer considered

This measure represents savings of MX$1.38 billion and

Class II: those that are known in the medical practice with variations in their materials, and are not usually in

health supplies. Removal of sanitary requirements is part of a strategy that aims to reduce barriers to market entry.

Class I: those that are known in the medical practice

the human body for more than 30 days •

Class III: those that are known in the medical practice and are usually in the human body for more than 30 days

the total number of deregulated products now makes up 2,242, with accumulated savings of MX$5.4 billion since

The Health Products Technical Committee issued 20 rules

2011.

that COFEPRIS uses to determine the class of the device. Several companies offer consultancy services to help

It is vital to accurately classify medical devices prior to

with aligning applications with COFEPRIS requirements,

beginning the registration process by submitting a detailed

documentation,

Registration Dossier that includes complete technical

translations even acting as independent Mexico Registration

product

information

and

applicable

testing

grouping

strategies

for

registration,

results.

Holders. Since 2012, an option of incorporating third-party

Improper classification can impact the regulatory approval

reviewers (TPR) has been made available by COFEPRIS.

process and associated costs. Therefore, it is important to

This option requires companies to pay an independent

correctly determine each device’s classification following

accredited commercial TPR to pre-approve applications.

the rules promulgated by COFEPRIS according to the

TPRs are local Mexican companies and are not associated

following categories:

with any globally recognized registrars or notified bodies. COFEPRIS will then complete a final review and issue the

•

Medical

equipment

(appliances,

accessories

and

registration certificate.

instruments for medical use) •

Prosthetics, orthotics, and functional aids

A fast track process, the Equivalency process, is offered

•

Diagnostic agents

as a regulatory route to companies that have approval

•

Dental supplies

in Canada, the US, or Japan. Companies must meet

•

Surgical materials

other route-specific requirements, such as having been

•

Hygiene devices

inspected by the FDA with an available inspection report, but this can greatly accelerate and simplify the process

Medical devices in Mexico are subsequently further

for companies launching products that have already

classified according to risk, using a version of European

undergone a rigorous review through a credible regulatory

rules adapted to the Mexican market:

authority.

MEDICAL DEVICES

YES

Low

2,242 List of products that are no longer classified as medical devices

Source: COFEPRIS

234

98 “IA”

Medium

High

III

| VIEW FROM THE TOP

LATIN AMERICA IN THE SPOTLIGHT RIMA ALAMEDDINE Vice President & General Manager, Latin America of CR Bard

Q: How does the Mexican market compare to the rest of

(INCAN), the National Institute of Pediatrics (INP), and the

Latin America?

National Institute of Neurology and Neurosurgery (INNN).

A: Bard Mexico celebrated its 20th anniversary a few

While we would like to boost our public-sector presence,

months ago, making Mexico our longest standing base

this depends on the registration processes and requirements

in the region by far. Our growth here has passed through

of the National Institutes of Health. Once we meet these

various phases. Four years ago, for instance, we began

requirements, we will shift our focus to obtaining tenders.

to take steps to expand our market presence to a point which covered the entire country. Our five divisions now

Q: Do you think it is necessary to have a universal,

have distribution partners nationwide. Mexico’s role in

homogenized regulation within the Latin American

Latin America is a major one, both in terms of revenue and

region?

recognition. Finally, the strong brand recognition we enjoy

A: It would be incredibly beneficial, not just to the industry

here is a significant factor in operating on the scale that we

but to the economy, if Latin America implemented a

do. This means that new channel partners tend to be very

common, regional framework for regulation for all new

receptive to collaborating with us.

product registrations. It is extremely challenging and expensive for companies to invest and explore the market

Q: What are the divisions of Bard here in Mexico?

because registration is required individually in every country.

A: First, Bard Access Systems (BAS) provides all of our access

Most of the revenue from the Latin American region comes

catheters. Bard Peripheral Vascular (BPV) provides devices

from regulated countries. Given that some registrations can

such as stents that prevent blood clots from traveling to the

take up to a year and a half to be approved, patients are

lungs. Bard Medical Division (BMD) is diverse and, along

being deprived of access to the best technology, the best

with the Foley and Sunza supplies, encapsulates colostomy

products and the best medical devices.

bags for urinary tract infections and gastrointestinal issues. Another path we are exploring is patient temperature

Q: Do you have manufacturing plants in Latin America

management, effective in preventing brain damage and

and specifically in Mexico?

other complications during certain procedures. Our fourth

A: Our BAS division has three manufacturing plants in

division is Bard Biopsy Systems (BBS), which supplies a range

in Nogales, Reynosa, and Ciudad Juarez. These plants

of biopsy devices for various parts of the anatomy. Finally,

were chosen due to their strategic position close to the

Davol covers hernia repair. While all five have been growing,

border with the US. In this way they can support the

access systems are particularly strong at present since we are

entire manufacturing process north of the border, while

generating enormous amounts of information. For example,

still availing of the costs and logistics advantages gained

we have been demonstrating to the medical community the

through operating in Mexico. The products are partially

benefits of inserting a peripheral catheter rather than putting

assembled in Mexico, and subsequently sent to the US for

it into the jugular or inserting an intravenous (IV) catheter.

completion. From the US, they are distributed within Latin

As a result, the BAS division has enjoyed accelerated growth.

America and all over the world.

Q: Who are your main clients within the public and private

Q: What is the role of integrators in Mexico?

sectors in Mexico?

A: One single provider whose portfolio includes contracts,

A: The private sector accounts for about 70% of our business,

maintenance, payments, and processes is extremely useful.

with public health accounting for the rest. However, we have a

This is where integrated services have played a vital role in

presence in both sets of institutions. Our main private-sector

Mexico. Some even have the capacity to overhaul whole

clients are the ABC, Star Médica, Médica Sur, and Grupo

systems, providing not only technology and hardware,

Angeles hospital chains. We work with a number of public

but also carrying out site adjustments so as to begin

health institutes, including the National Institute of Oncology

operations at optimum capacity.

235

| VIEW FROM THE TOP

HELPING HOSPITALS ACHEIVE TECHNICAL EXCELLENCE CLAUDIA CÁRDENAS ALANIS CEO of Escala Biomédica

Q: What type of projects helped to strengthen your

within budget constraints to attain sufficient medical

reputation in this growing field?

supplies, as well as making concerted efforts to eliminate the

A: We help hospitals to achieve excellence in their technical

discrepancies between healthcare provisions in major cities

operations by identifying their needs and problems, and

and rural areas. The government supports digital health,

sharing our technical and operative expertise to solve them.

which requires improved medical infrastructure and crucial

The timescales involved in these projects can range from just

data management, since portable electronic medical records

one month to four years, depending on the scope involved

are still lacking in Mexico and these developments require

and the customers’ requirements. We participated in a major

effective communication strategies.

expansion project for the National Institute of Oncology (INCAN) where we provided clinical engineering assessment,

Q: How have international certifications changed the face

technical guidance, evaluation of equipment acquisitions,

of Mexico’s health sector?

and assessed the risk of moving facilities and installing new

A: The biggest advantage of international certifications is

infrastructure. Our largest current project is the construction

the standardization of high-quality services and procedures,

of the Naval Medical Center for the Secretariat of the Navy.

which will lead to incremental numbers of foreign patients coming to Mexico due to greater confidence in adequate

Q: Are there sufficient biomedical engineering jobs in

levels of service and regulation. The Joint Commission

Mexico for talented graduates and what areas are they

International (JCI) is currently debating to the prospect

particularly interested in?

of increasing the number of foreign patients that JCI-

A: I have noticed that biomedical engineering students

accredited hospitals can receive.

seem particularly interested in developing prosthetics and medical equipment. These areas are certainly growing in

Q: How would you compare public and private hospitals

Mexico but not at an appropriate pace to accommodate

with regards to their acquisition and use of digital health

for the number of students that graduate. Therefore, they

technologies?

often need to find jobs in different fields or move to other

A: Public and private hospitals experience common

countries, meaning that much of Mexican talent is lost or

problems regarding data management and adequate

constrained. However, CONACYT has developed numerous

infrastructure and few have sufficient funds allocated to

programs to support students, and universities are striving

acquiring the latest equipment, meaning that a better

to raise funds for R&D projects in nanotechnology, tissue

allocation of resources is needed on all sides. Electronic

engineering, and genetic engineering, among others.

medical records in public and private hospitals use

As a means of supporting this ongoing process, Escala

similar processes but lack of infrastructure and process

Biomédica has set up an internship program that gives

management

students the opportunity to participate in specific projects.

incorporate the system within the public sector.

makes

difficult

comprehensively

These include the creation of valuation models for highimpact technology and for primary, secondary, and tertiary

Q: What is your opinion of the new COFEPRIS norm for

care hospitals, new purchasing schemes, guidelines for

technovigilance?

telemedicine, and efficiency indicators.

A: This new norm is significant for the development of safer medical devices but its content should be clearer.

236

Q: What would you highlight as the key needs of the

The system that will be adopted for reporting and

current Mexican healthcare system?

managing events related to medical devices is crucial

A: One of the most important trends in the Mexican healthcare

for the success of technovigilance, and this will be easier

system today is the move towards universal coverage. In

to implement since hospitals are already familiar with

order to achieve this, the agency must implement a more

the general requirements due to their experience with

streamlined infrastructure and employ an effective system

pharmacovigilance.

| VIEW FROM THE TOP

GLOBAL REACH BRINGS LOCAL GROWTH FRANCISCO MORALES Health Care Division Director at 3M

Q: As the new director of 3M Health Care in Mexico, what

Q: What barriers does Mexico have to face to achieve a

are your main goals?

complete digitalization of its healthcare services?

A: I can see many opportunities to accelerate the growth

A: Mexico’s healthcare system has embraced the transition

of the healthcare sector in Mexico. 3M encourages its

from paper to electronic format over the last ten years,

scientists to create connections across countries and

which provides portability and data availability, but there

divisions. However, while we have two centers (the

is still a long way to go. This data can be valuable if it

Innovation Center in Mexico City and the R&D Center in

follows systematic processes that would create accurate

San Luis Potosi) in Mexico, we currently do not have a

coding, grouping, and analysis through statistical tools.

team of researchers on healthcare. This does not stop our

This analysis can generate information that could lead to

researchers from creating connections among different

improved outcomes and cost. The challenge continues

businesses in Mexico and countries such as Brazil or China

to be the creation of a database culture, which directly

to tackle healthcare problems. These connections are of

benefits hospitals and payers.

utmost importance for 3M as they allow us to grow our business and create more innovative products. We have

Q: How important is innovation for 3M Health Care?

several R&D centers and 46 technology platforms around

A: To promote innovation, 3M has implemented two different

the world, as well as 11 technology platforms in Mexico.

initiatives. Firstly, the company enables the exchange of ideas across countries and research areas and also allows its

Q: How significant is Mexico to 3M’s Health Care Division?

researchers to spend 15% of their time working on individual

A: Health Care is integral for 3M. In 2014, global company

projects with all the company’s resources at their disposal.

sales were US$32 million, constituting a healthcare and

Secondly, 3M has well-established processes to transfer

organic local currency sales growth of more than 5.8%. We

research to the market. For example, we have developed

also invest 5.6% of our revenue in R&D, as we are fueling

products in the nanotechnology area which can be used

innovation through investment. On a positive note healthcare

for microreplication or for dental applications. Another area

is a relatively stable area, and has not been as negatively

with multiple purposes is adhesives, an area for which 3M

impacted as other industries during times of economic

is renowned. We have adhesives for industrial applications,

instability. We cannot overlook or neglect this area as it has

such as gluing metal to plastic, and for healthcare, to bond

an important influence on people’s lives. In Mexico, we are

dental implants to the dentin. Most of our research areas

focused on oral care yet we have several other divisions

strongly collaborate with academic institutions, research

including the health information system, which produces

centers, and professional associations. We have created a

software for hospitals and a platform for food safety. The

healthcare academy, which is a global initiative to provide

importance of healthcare software is growing in Mexico but

education through lectures and webinars. In Mexico, our

it has just scratched the surface. 3M is working with hospitals

innovation center in Santa Fe aims to bring customers closer

to create enhanced coding processes to allow them to collect

to our technologies and show them the solutions we provide.

meaningful data and group episodes. Q: How would you compare Mexico’s healthcare level to Q: Who are your main clients?

the rest of the world?

A: The public and private sectors are equally important

A: Mexico is the second largest market in Latin America

for us. We have seen that both share three core priorities.

and provides a significant number of opportunities for 3M.

One is access, this means efficiently increasing their patient

I believe that Mexico is making considerable progress in

coverage. The second aspect is cost, since all hospitals have

healthcare, which will continue in the future across both the

budget constraints. Finally, the third element is quality, as all

private and public sectors. E-commerce is growing rapidly

the healthcare institutions are aiming to provide the highest

and it is already strong in the US so many of the tools that we

possible quality with the resources available to them.

have developed for that segment could be brought to Mexico.

237

| VIEW FROM THE TOP

MEXICO: THE GATEWAY TO LATIN AMERICA FOR MEDICAL DEVICES EDNA ÁLVAREZ Latin America Manager at Malvern Instruments Q: What significance does the Mexican biopharmaceutical

techniques helps to push drugs more rapidly through the

industry hold for Malvern Instruments’ global operations?

development pipeline.

Malvern

Instruments

provides

technological

solutions for many industries – from automotive to

Q: What measures have you been taking to increase your

biopharmaceuticals. We have direct operations in 15

expertise in the large molecule area?

countries and have local support in a further 77. The

A: Our BDI team works with end customers who

past decade has seen biopharmaceuticals become

have analytical needs and also with those who lead

the fastest growing type of therapeutic agent. The

technology development, in established organizations

challenges of moving from the development of small

or in small companies and academia, enabling effective

molecule drugs to dealing with more complex biological

communication and solution sharing. Uniquely, embryonic

materials are considerable and wide ranging and

technologies are often provided directly to pharmaceutical

new analytical tools are needed to bridge the gap.

partners for review and assessment, exposing them to

Malvern’s Bioscience Development Initiative (BDI) is an

technologies they may not otherwise have seen and

independent, entrepreneurial organization. It partners

providing a low-risk opportunity to test out novel ideas.

with industry and academia to rapidly identify and

This quickly determines whether or not a technology is

assess analytical problems and bottlenecks within

likely to provide a useful solution, which will ultimately

biopharmaceutical development and manufacturing,

decide if it is progressed through to the next stages of

to design and deliver technological solutions. The

traditional product development.

European and US biopharma markets are already very large and Latin America is an emerging market with very

Q: Researchers in Mexico do not have the culture of

promising growth opportunities for the next five years.

commercializing research – how does this impact the

We established a direct presence in Mexico in 2013. The

instrumentation industry and to what extent are you able

bulk of research is conducted in Europe and the US, but

to support your clients in this respect?

developing countries are allocating more resources to

A: Mexico has great potential for growth but some

R&D. Mexico is two to three years behind developed

barriers need to be overcome to fulfill it. One barrier is the

countries in terms of R&D and acquisition of technology

lack of entrepreneurial culture. Scientists should be more

but it is the gateway for all of Latin America.

interested in commercializing research and creating startups that could benefit a lot of people with their innovative

Q: What are the company’s key strengths and how

products or services. We have very remarkable scientists

challenging is it to move into new areas?

who have applied for grants and obtained funding in

A: Our materials characterization systems are used by

order to conduct research and purchase our instruments.

scientists and engineers to solve challenges associated

238

with maximizing productivity, developing better products,

Conversely, we have also seen scientists with impressive

and getting them to market faster. Malvern’s analytical

ideas that do not secure any financing. Whenever we

instruments address a wide variety of measurement

establish first contact with a prospective client we listen

needs, helping users accelerate research and better

to their needs so we can come up with a solution. Then

understand the materials they work with. Malvern’s

we work on a justification process and run samples and

analytical toolkit for small molecule applications supports

demos in the lab to present along with some results.

the characterization of active pharmaceutical ingredients

This brings certainty to our clients and is very useful for

and excipients, alone and in formulations, for innovative

building trust and close relationships. Only when we are

and generic drug development. Used throughout drug

certain that our technology can provide a solution for

discovery, formulation development, and pharmaceutical

a customer do we make a sales proposal and provide

manufacturing, Malvern’s combination of complementary

support with comparison tables and other evidence.

| VIEW FROM THE TOP

WORLD CLASS ANESTHESIA AND VENTILATION DEVICES MARTIN FERRARI DEL SEL General Manager of Dräger Mexico Q: What role does the country represent for Dräger’s

ventilation devices. We are the biggest supplier worldwide

global strategy?

within these two areas. In the last three years, we have

A: Last year was significant as we celebrated our 125-year

renewed our critical care ventilators portfolio and now we are

anniversary globally and our ten-year anniversary as Dräger

carrying out a similar overhaul within our anesthesia division

Mexico. Our company is a family owned business and our

by launching new devices worldwide and in the Mexican

current CEO, Stefan Dräger, represents the fifth generation

market where we have already positioned and installed our

of the family to run the company. We are part of the Central

top technology anesthesia workstations. A unique solution

and South America Region, with headquarters in Panama

that we offer worldwide is the Pulmovista 500, an Electrical

City and offices in Brazil that have been established for

Impedance Tomography device, which is a breakthrough

60 years. This is our youngest market, established in 2012

in mechanical ventilation. Until now it was not possible to

to improve our customer intimacy and as a support to

determine the regional distribution of bedside ventilators, now

our seven subsidiaries. In Mexico, our operations began in

our non-invasive EIT solution visualizes regional air distribution

2004, and since then, we have been growing considerably

within the lungs in real time. In terms of software, Dräger

as a sales and service organization. Mexico is a key player

provides several products to monitor patients and remotely

in our region and worldwide and most of our global

access their medical information. We are most proud of the

strategies are employed in the country. We have a broad

interconnectivity and communication between our devices

network of distribution channels throughout Latin America

and the different world-class Hospital Information Systems via

to provide territory coverage and customer support.

HL7 protocol. This capability offers remote access to patient information, using our wide range of clinical systems such as

Q: Who are your biggest customers in Mexico and what

the Innovian information management system that creates a

does Dräger define as being its competitive advantage?

complete, continuous, digital record of the patient´s critical

A: Our main client is the public sector but the private sector

care information. Currently in Mexico we have already installed

is a strategic target for us. We were engaged for the new

some of these solutions, but there is a long way before it

building of INCAN. Our involvement began in the design

becomes a standard in the main health institutions.

and planning phase of critical care areas and operating rooms, extending to the current clinical training stage.

Q: How far away is Mexico from achieving a complete

We are working with 38 private clinics from the Private

digitalization of health services?

Hospital Consortium that are formalizing their business to

A: The digitalization of processes and information in the

accommodate more patients. We hope to offer packages,

healthcare sector is relatively well-established, but Latin

for example an Intensive Care Package, to make clinical

America always seems to be the last area for investment in

investment more economically viable. Our competitive

new projects or renewals. The majority of health investment

advantage lies not only in our technology and innovation

tends to go towards primary health needs and digitalization

but also in our capability of providing a comprehensive

is seen as a luxury, not as an essential technology. This is

and integrated solution to the hospitals, which is why we

beginning to change in the private segment. Our priority

have a dedicated Solution Center and Dräger Academy

is to offer long-lasting products, reducing long-term cost

departments operating in Mexico, as well as our Lifecycle

of ownership and providing more connected treatments,

Solution Department that that takes care of the complete

which will consequently reduce medical errors. We offer a

buying experience of our customers and business partners.

system called Smart Care that was developed only ten years ago, which is an automated weaning system to speed up

Q: What innovations are you bringing to the market this

recovery times by 30% in ICUs, reducing potential infection

year and how did you choose their clinical area?

exposure. There is still collaboration required between

A: Our main two core areas are operating room and critical

health institutions and authorities to provide and set the

care units, and our biggest markets constitute anesthesia and

proper standards in this emerging digital world.

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| VIEW FROM THE TOP

FOSTERING AWARENESS TO IMPROVE PATIENT OUTCOMES LUIS NIETO Director General of ConvaTec Q: How many years has ConvaTec operated in Mexico?

A: One key challenge this industry has to face is patient

What attracted the company to this market?

awareness. Patients, their families, and society in general

A: ConvaTec is a global medical products and technologies

need to be more aware and more effectively incorporated

company with leading market positions in ostomy care,

into the healthcare system. We have developed some

wound therapeutics, continence, and critical care, as well

projects with the aim of covering parts of the country

as infusion devices. Our products provide a range of clinical

where patients do not know about our products, as well as

and economic benefits, including infection prevention,

addressing economic exclusion by improving access. We

protection of at-risk skin, improved patient outcomes, and

view it as an industry responsibility to help reach excluded

reduced total cost of care. ConvaTec has been present in the

patients. We use traditional sales calls, seminars and other

Mexican market for the last 30 years, as part of the Bristol

type of events to reach these patients and we have set

Myers Squibb group. We became an independent company

up a program to provide primary care and access to our

in 2008, and because Mexico is an emerging market, we see

products. This helps patients to understand that they have

investment in the country as an opportunity for coverage

the ability to overcome the limitations they believe they

and growth.

have after having an ostomy. We help patients understand that they can live an active life again, as well as recovering

Q: How do you differentiate your portfolio from your

their social and work lives.

competitorsâ&#x20AC;&#x2122; products? A: We are developing and launching products faster than

Q: Who are your main customers at this point and how do

ever before. Our traditional areas are ostomy care and

you see this base evolving?

wound management, but we recently entered the critical

A: We sell to the public and private entities, with a variety

care area. In future, we plan to roll out products for surgery

of channels, services, and portfolios. There are many efforts

and anesthesia among others. As our products are of a very

from different groups to enable ostomy and diabetic

high quality, we intend to approach every segment of the

patients to access more funding and reimbursement for

market. The goal for us is to be known for our excellent

aftercare products, but the results right now are gradual.

integrated services, for clear customer orientation, and for

Once ostomy patients are discharged from the hospital,

growing patient awareness.

70-75% go on to buy their products themselves. Some patients are now pushing public and private payers to

Q: In ConvaTecâ&#x20AC;&#x2122;s experience how is the regulatory

cover medical supplies. There are important economic

environment in Mexico?

reasons why they should provide such products. The more

A: The regulatory affairs environment is improving. We

patients recover their normal lifestyles, the faster they can

have seen significant progress in the product registration

go back to work and reintegrate to society as productive

process. A number of alternatives to the process are now

individuals.

open, including FDA equivalence, third-party authorization, and so on. These new options make it possible to register

Q: How easy is it to collect data in Mexico about the type

a product and launch it into the market much faster and

of patients you provide for?

more efficiently. We have gained approval for more and

A: It is complicated to acquire specific data and this

more products in Mexico, and patients are ultimately the

is a problem in Mexico that is not only limited to our

ones who benefit. Healthcare professionals are using also

field. We rely on experience and estimations. Currently

better technologies with better results.

we have to estimate the market value and market share. There are companies in the data and statistic

240

Q: How are ConvaTec and the wider industry attempting

fields doing an excellent job at addressing this gap and

to address the challenges facing this segment of the

assessing markets. We will see in a few years how market

market?

intelligence evolves.

| VIEW FROM THE TOP

LOCAL EXPERTISE BOOSTS AIR PURIFICATION SPECIALISTS ÁNGEL DE VECCHI ARMELLA Director General of VECO Q: How has VECO evolved since its foundation?

products. Even though our critics disagreed, we were

A: VECO is a family company founded in 1968 and

perfectly able to provide quality products, which allowed

created in order to provide direct services and supplies to

us to grow in the market. Many years later, former President

pharmaceutical laboratories. We faced many challenges

Carlos Salinas de Gortari opened the market to foreign

at the beginning, as there were many low-quality and

products, thus increasing the competition. Recently the

counterfeit products on the market. While the amount of

market has become centralized. While there are around 500

low-quality products has diminished, so too has the number

companies in Mexico able to manufacture them, the market

of laboratories, with only the most competitive remaining.

has centered in only four. This has discouraged competition

Others either close or are acquired by international

as the cost to implement a plant of this type is too high.

companies. When we created VECO, there were 650 pharmaceutical laboratories in Mexico, but now, according to

Q: Besides the need for continuous renovation, what other

our calculations, there must be approximately 130, of which

strategies have companies implemented to compete with

few are Mexican-owned. VECO began by commercializing

foreign companies?

equipment to manufacture medicines. We then moved on to

A: We began by exporting products. In 1974, we created

the development of fume hoods and laminar flow cabinets,

Veco do Brasil and we opened an office in the US in 1977.

used to provide a sanitary environment for experiments,

We currently export to Europe, the Middle East, and all of

to avoid sample contamination, and to protect users form

Latin America. Now that markets are open, we compete

toxic fumes. Our fume hoods have HEPA (High Efficiency

with companies from all over the world. We are currently

Particle Arrestance) filters capable of filtering particles

focusing on the construction of clean rooms, which were

down to 0.003mm. Some are able to filter as far down as

initially used for the manufacture of computers but now are

0.00001mm. Gradually, we decided to stop manufacturing

mostly used in hospitals and pharmaceutical laboratories,

devices that were not economically profitable, deciding

for many reasons including the preparation of mixtures for

instead to focus on fume hoods, as the product range

chemotherapy. In those cases patients must be completely

has gained strength in the market. We are working as

isolated inside these rooms as their immune systems are

two different companies, VECO and de Vecchi Ingenieros,

compromised. At this point the public sector represents

within Grupo Devinsa, and we collaborate with Vectech

60% of our sales and the rest goes to the private sector.

Pharmaceutical Consultants, an international consulting company which validates pharmaceutical manufacturing

Q: What are the main opportunity areas for these air

practices to ensure they comply with regulations.

purification systems? A: These systems will always be necessary for the

Q: What was VECO’s strategy to position itself in the

production of large numbers of medicines. When we

market?

first created the company air purification inside these

A: At the beginning, we imported our filters from Sandia

rooms was achieved with UV light, but this light causes

National Laboratories. This manufacturer developed these

skin damage. We are constantly trying to follow the latest

filters for NASA, which used them for space travel as

trends pushed forward by international markets. At the

instruments had to be completely free from dust which

beginning, we did not develop our own technologies

could damage them. In 1972, we began to manufacture

as we used to adapt those from foreign companies, but

equipment in Mexico under the slogan “quality is developed

gradually we began to develop our own products. Our

throughout the entire process.” While this motto is important

main advantage is our size, which allows us to have great

for many sectors, it is extremely relevant for healthcare as

versatility to create highly specific products to address

this area deals with peoples’ lives. When we started we

individual needs. We work with the pharmaceutical

were heavily criticized by international manufacturers, as

industry on research, manufacture, and quality control,

the law at the time strongly regulated the sales of imported

and we also work with university and hospital laboratories.

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| EXPERT OPINION

PRIORITIES, PITFALLS, AND PROMISES FROM THE

build stronger relationships with customers by providing

IT WAVE

new value, reducing costs by doing more with less and

By IMS Institute for Healthcare Informatics - Life sciences

optimizing the commercial organization, and improve the

companies are a vital player in the healthcare delivery system

effectiveness and agility of commercial teams, including

through their discovery, development, manufacturing, and

speed and effectiveness of decision making.

marketing of innovative treatment options for patients. They play an important role in improving access and supporting

The needs of life sciences companies seeking to realize the

the appropriate use of medicines by physicians through

full potential of current technology are broad and diverse.

education and awareness programs. A more efficient and

However, over half of our survey respondents indicated the

effective system results from the active participation of

greatest needs were associated with data – gaining greater

physicians, investors, patients, and manufacturers, even if

insights and value from data, integrating data sources,

interests are not always aligned and contradictory positions

and delivering it faster to end users. This may reflect the

are sometimes taken.

urgency with which tangible advances are needed in light of the business and commercial needs of these companies.

Information Technology (IT) has long been viewed as

This also suggests that a very different information

a function or department that supplies data support

technology investment focus, activities, success measures

and delivery services. Within a life sciences company,

and roles are required more today than in past decades.

its purpose is to store and process information on core functions of the business, such as sales and distribution of

The role of the Chief Information Officer (CIO) also needs

medicines, and to disseminate that information to internal

to be very different, both in terms of managerial and

users in their sales, marketing, or analytic departments.

technical skills, as well as the profile and role that he or she

Over the past ten years, basic tasks of the IT function

has within the executive management team. With direct

– data integration, warehousing, help desk support,

operating budgets typically exceeding US$100 million

and report generation – were commoditized and often

annually and investment budgets similarly scoped, the

outsourced. However, as companies become more focused

CIO can now be viewed by brand managers, operating

on developing new approaches designed to optimize

leaders and executive leaders as the critical linchpin to the

commercial performance, management teams are turning

company achieving success – with its partners in healthcare,

to technology-based approaches that can support these

investors, and employees. Life sciences companies now

aims through cloud-based platforms, applications, system

have more information than ever to understand medical

integration, and analytic tools. Technology is being utilized

prescriptions, patients, and investors. However, their

as a critical means by which companies can better align

information systems are frequently not in a position to use

their activities across departments internally, take actions

this data to deliver additional value to these customers. This

that are better tailored to customer needs, and be readily

might include efforts to tailor communication to physicians

flexible to adjust course and tactics. Properly utilized IT is

with specific patient profiles, provide reimbursement

seen as the means by which companies can simultaneously

services to ensure patients receive financial support (when

CAPABILITIES OF CURRENT CAMPAIGN MANAGEMENT SYSTEMS

Capabilities Of Current Campaign Management Systems (Source: IMS Health Technology Survey, 2014) Create and run multi-step behavior triggered campaigns Inform future campaign design using outcomes tracked from past campaigns Provide campaign performance data in near-real time Create and run multichannel marketing campaigns 0%

20%

40%

does not do this

Does not do this Source: IMS Health

242

Not well

60%

not well

Very well

80% ok

100% very well

entitled to it), or deliver education materials tailored to the

Campaign performance data in near-real time

prescriber’s interests. In commercial terms, they typically

To ensure launches are successful and to correct their

fail to optimize marketing tactics due to a lack of advanced

course rapidly if needs be, companies require campaign

functionality in their multichannel marketing (MCM)

performance data in near-real time. To avoid squandering

system, namely the ability to run multichannel marketing

resources it is critical to understand what is working.

campaigns or multi-step behavior-triggered campaigns,

Advanced analytic tools combined with streaming data

provide campaign performance data in near-real time, or

allow companies to rapidly micro target campaigns only

inform future campaign design using results tracked from

to where they are effective.

past campaigns. Informing future campaign design using outcomes Companies recognize the need to improve their customer

tracked from past campaigns

engagement, with 71% of respondents saying investments

Closed loop systems can improve insights and support

in their MCM system are ‘extremely or very important’

marketing decisions by recording customer preferences, and

and nearly 90% of those from large companies saying the

by measuring the success of the overall campaign. ‘Intelligent’

same. Cloud-based multichannel marketing applications

MCM applications can learn from past customer responses

can deliver the following and align commercial activity to

and allow companies to deliver more relevant messages over

customer needs:

time. This can ensure that physicians are equipped with the information they need to help them deliver better patient

Multichannel marketing campaigns

care. It can also help ensure healthcare provider time and

Finding the ways doctors will listen and learn about

company resources are not wasted. Ultimately the key value

medicines is critical, as is the delivery of effective

of new intelligent cloud-based MCM systems is that they give

messages across channels. Systems should be able to

greater control to the end user. The problem presented in

deliver coordinated customer contacts across channels to

past systems was that users relied on third-party vendors

ensure messages are received, but deliver them only to the

for campaign planning, execution, and measurement, and

specific subgroups of customers who benefit from hearing

often had significant lag-times to deploy campaigns; cloud-

this message.

based applications put greater control in the hands of brand managers giving them the ability to execute directly through a

Multi-step behavior-triggered campaigns

cloud-based interface. They can design their own campaigns

In the past, customers were grouped into segments and

or refine dashboards and analytics to measure performance.

marketing was based on those static classifications. Event

Experts in life sciences commercialization activities indicate

and decision tree models of marketing are now built

that with such cloud-based and user-directed MCM system

into cloud-based MCM systems and allow refinement of

technology, cost reductions of 25-35% are achievable, with

marketing activities based on customer’s earlier action

additional benefits from lower campaign administration and

- for instance, delivering written clinical trial data to a

management costs, improved customer response rates and

provider who attended a lecture discussing a new study.

campaign revenue gains.

LIFE SCIENCES COMPANY NEEDS

Life sciences company needs (Source: IMS Health Technology Survey, 2014) 77%

Creater insights and value from data 59%

Integration of data sources

51%

Faster delivery of data to end users 41%

Integration of point-solutions or systems for improved workflow

40%

Qualified teams and infrastructure to support existing applications

38%

Greater use of unstructured data

34%

Ability to acquire and integrate third-party tools

30%

Improved privacy and security Data cleansing and curation Additional IT/technology talent

26% 20%

Source: IMS Health

243

UTILIZING TELEHEALTH TO BRING FASTER RADIOLOGY RESULTS With an increasing burden on medical health professionals,

do not have the technology to overcome these problems.

Ulises Bacilio Pérez, CEO of Grupo PTM saw a gap in the

At Grupo PTM, Bacilio has developed software which

market for an increased focus on telehealth. At age 16, he

can provide results almost immediately, overcoming low

learned to develop Enterprise Resource Planning (ERP)

bandwidths without image quality loss.

software, which he attempted to employ to effectively administrate the health records of his family’s hospital

The company works almost exclusively with private

in the State of Mexico. Unable to finish the project at

hospitals, at times integrating certain small public sector

the time, given its complexity, he decided to continue

projects, mainly with mobile units in rural areas that are too

the project independently in later years. After medical

remote to have efficient access to hospitals. The government

school, Bacilio witnessed the need for administration

has supported this initiative, creating mobile units for

software within the National Institute of Oncology, citing

indigenous communities to carry out several tests such as

that the few radiologists in the hospital could barely cater

mammograms. This can be problematic at times, according

to the demand of the 3,000 patients per month seeking

to Bacilio, especially transmitting images from these rural

treatment at the hospital.

areas to hospitals in main cities with low-quality software

“Many small companies are developing innovative software for pathology, indicating that the sector development challenges are not to do with technology market conditions but other factors” Ulises Bacilio Pérez, CEO of Grupo PTM

“The public health system is too large to provide

and poor infrastructure. However, this type of technology

appropriate care for all patients, and long waiting lists

leaves a much smaller carbon footprint as it minimizes

for treatment are common,” explains Bacilio. “I always

travel and it is not necessary for clients to spend money

believed that automation could streamline the process

on printing materials. The current pillars of focus for Grupo

as doctors have large caseloads, yet must spend much

PTM are radiology, teleradiology, and CT scans. Due to time

of their time searching through physical records.” The

constraints and the strength of the competition, some of

software was developed at a cost of US$30,000 but was

the software developed by the company was created under

subsequently sold for US$300,000, which is relatively

public platforms, such as the OsiriX Imaging Software for

inexpensive within the industry. In the first and second

medical imaging, which is free, FDA approved, and was

years, the company expanded by 200%, in the third year,

adapted by Bacilio to meet the needs of the Mexican

growth was 100% and the company’s founders featured

market. In conjunction with Play Business, the company

on the front cover of CNN Expansión in September 2014

has also developed the Consultapp smartphone app, which

as Entrepreneurs of the Year.

provides medical diagnoses in Spanish through a cellphone. The app is able to provide specialist consultations and can

Although the company was born due to a necessity for

even call an ambulance for the patient.

IT products within hospitals, Grupo PTM now provides a platform for a range of services, including one that

The company is looking towards mHealth (mobile health)

can store radiology images economically and efficiently.

as the future of the company, and this year plan to further

These programs are intended to help doctors reduce the

develop Consultapp, along with other applications. Bacilio

amount of paperwork required to organize appointments

has expansion plans stretching into other specialties,

or transmit images and information to technicians and

such as radiology, ophthalmology and pathology, not

other doctors.

only within Mexico, but also other Spanish-speaking countries. Since similarities exist between the Mexican

244

The healthcare system in many developing economies is

and Colombian healthcare market, Bacilio indicates that

extremely complicated, due to fragmented developments

Colombia may be the next step in development, but

in infrastructure and slow internet speeds. The largest

stresses that considerable strategy and knowledge of the

files can reach up to 1GB and with the relatively low 10-

local market and population will be required before Grupo

20kbps upload speeds in Mexico, many companies simply

PTM will consider expanding outside of Mexico.

| VIEW FROM THE TOP

TELEHEALTH STARTUP AIMS TO INSPIRE MARKET DEVELOPMENT MARIANELA SANTOS FLORES Director General of Health Angel Monitor Systems Q: How advanced is telehealth in Mexico compared to the

Q: How do you envisage the system being utilized?

rest of the Americas?

A: The system comprises software that records and sends

A: Telehealth refers to a broader scope of remote

the information and hardware that collects it. The hardware

healthcare services than telemedicine. While telemedicine

can be variable, as many different devices and sensors can

refers specifically to remote clinical services, telehealth

be used. The platform will eventually be able to receive

can refer to remote non-clinical services, such as provider

information from any device in the market. We are mainly

training, administrative meetings, and continuous medical

focused on providing services with the software and

education, in addition to clinical services. In Mexico,

integration. Once installed and configured, the platform

there is a general impression that telehealth programs

advises the doctor who will provide medical attention from

are exclusively for audio or videoconferences and image

a remote location. An example use area is dermatology

sharing. In reality these are just a subset of a vast area

where 90% of prescriptions are OTC so it would be easy for

that public and private health institutions could take

dermatologists to diagnose and prescribe remotely. Doctors

advantage of to make a difference either in prevention

in those pharmacies will simply need to apply the sensors

or in patient health recovery. Mexico is still not aware of

to the patient, which will collect and send all the necessary

the full potential of these technologies, leaving us behind

information to the cloud where a specialist will be able to

other countries in Latin America, such as Costa Rica,

remotely download and interpret it. The technology is being

Colombia, and Chile. I believe this will improve over the

implemented in hospitals and pharmacies. The service will

next three to four years. This technology is inexpensive

be completely free for patients as it will be funded by a third

and easy to access from any mobile device. One of our

party, possibly the pharmacies themselves.

main aims is to prove that developing start-ups in Mexico is possible for everyone.

Q: How well regulated is this area right now? A: COFEPRIS is currently not regulating telehealth devices

Q: How was Health Angel Monitor Systems born?

at the required speed to trigger market growth and cover

A: I have created a total of eight spinoff companies in the

different needs, but the commission is expected to be

telecommunications industry, including the telemedicine

involved in the regulation of medical gear and services

startup. I conceived the idea of creating a monitoring service

used in telehealth. We are collaborating with COFEPRIS to

with the value proposition of allowing medical practitioners

create Mexican regulations for these systems. This process

from different specialties to monitor patient vital signs

has moved slowly, however, as the market is not fully aware

and other indicators remotely, so as to develop new levels

of the benefits of these products and services. We have

of service. I saw more than 200 similar applications in

already received approval from some European regulatory

Europe, but none of them could be specifically applied to

agencies, among others.

Mexico, so I had to develop one to address our specific needs. The device developed has sensors that are able to

Q: What are your expansion plans?

detect up to 25 different inputs from humans, such as ECG

A: We are going to use the contact center with the platform

12 Leads, temperature, and heart rate, through one easily

already developed to rapidly expand regionally to countries

to handle and portable medium. This information is sent in

that are already open to this technology. We are also starting

real time to our secure cloud from any mobile device, and

a project with the Mexican Consulateâ&#x20AC;&#x201C;General in California

is afterwards made available to doctors to enable remote

where we will monitor the health of Mexicans living in

diagnosis. I began this with a partner in Silicon Valley, and

the US. This program aims to provide medical advice for

we took three years to develop the device in an Italian

Mexicans who may not speak English or have insurance. An

university. With the support of INADEMS and CONACYT I

electrocardiogram costs about US$1,300 in California but

developed a two-year strategy alongside MIT to create the

our service will be available for free at the consulate and will

software and the hardware.

provide patients medical information online and in Spanish.

245

| VIEW FROM THE TOP

DIGITALIZING TRADITIONAL MEDICAL PUBLISHING ANTONIO CARRASCO RUIZ CEO of PLM Q: Across seven decades of experience, how has the

prescribe, we act as a legal instrument. Quality is vital, but

company evolved to the present day?

so is layout. For a book to be user-friendly and add value

A: The company was created in 1942, with goal of creating

it needs to be navigable. The PLM Medical Dictionary’s

the Mexican equivalent of the Vidal pharmaceutical

index, for instance, allows you to use five pages to scan

dictionary which was unavailable in Mexico at the time. In

5,000. We applied this same principle to our website;

this single compilation, the entire industry’s drugs are listed

our search engine algorithms are engineered to make

by name, as well as common questions about the drug,

the medical researchers’ job straightforward. The beauty

its interactions, their combinations, and their chemical

of today’s metadata management technology is that you

form. PLM has changed substantially from 1942 to the

can link information in one place with thousands, even

present date. Now we are a multinational company, and

millions of articles worldwide. Technology has moved the

our headquarters in Mexico are managing offices in Central

patient to the center of the medical ecosystem. Patients

America, Colombia, Ecuador, and Peru. We have also

are more aware of what is happening within their body,

invested in Venezuela and Chile. What has not changed is

what medicines they are taking, and this increases their

that we are still the number one source for doctors looking

consumer power. In the past, if a doctor told a patient that

for pharmaceutical information. Doctors trust PLM to be

they need methadone they would take it regardless of

neutral and unbiased by commercial pressures. This is why

whether they know what it is or not.

we work with 72% of doctors in the region. With 74 years of experience behind us, several generations of doctors have

The doctor’s role remains important so our information is

worked with PLM which amounts to millions of patients

written in the language of the doctor, and this must be

treated using our information.

translated for our patients. Without knowledge of certain terms, the situation may be dangerous. Self-medication

Q: How important is it for PLM to remain neutral in the

happens a lot in Mexico, with antibiotics for example

delivery of information?

until recently, to the point that it poses a public health

A: Doctors do now come to us seeking advice on specific

risk. Irregularities do exist in the supply of certain drugs.

products. They come for the most up-to-date, accurate

Additionally, the chronic diseases faced today such as

information available, in a convenient layout. Since

diabetes, obesity, and heart problems, require medical

the beginning PLM has collected information on the

treatment over a lifetime, which is more doctor-oriented.

pharmaceutical industry without ever launching a single original product into the market. This is crucial for our

Q: How do you perceive Mexico’s position in the trend of

neutrality. Doctors listen to their patients, and then consult

digitalizing services? Is its implementation realistic here?

us. We notice that whenever a public health campaign is

A: As the leader in health, the public sector must develop

launched, the hits on our website and apps soar, because

a better understanding of the digital world for this to

doctors turn straight to us for guidance.

happen. Their role is to standardize practice, such as the electronic medical prescription. The Ministry of Health may

246

Q: What inspired your decision to start producing apps

issue many norms, but these do not describe what is truly

and begin digitalization?

happening in the world. In terms of health in the digital

A: It was based on a change in accessibility trends.

age, interoperability is the name of the game. In Spain,

Content is key in this industry, in print publishing and in

for example, provinces currently log electronic patient

the digital world. As long as you have solid content, you

records. The same discussion around interoperability

will be read, regardless of whether you produce an app, a

between federal and state health services is beginning to

website, or a book. All of our content has been regularized

happen in the US. They too are discussing ways to make

by the appropriate agencies of individual countries in our

the health system interoperable, as this is how health will

region, and since we list what a doctor can and cannot

be financed in the future.

Q: Has your human capital hiring changed with the

of these clients, however, see any attraction in entering

business’ own changes in direction?

the Mexican market.

A: IT is the largest department in our company, with 20 members. We have also replaced our Clinical Pharmacy

Q: What are your more significant priorities for the

Practitioner writers with a dedicated laboratory for

following year?

research and information. The staff of this library has

A: Our center of gravity has shifted from being a publisher

specialized Master’s degrees in Scientometrics, with

to a digital means of distributing information. Our target

qualifications in information searching and procurement,

is to complete that shift by the end of this year. We will

database structuring, and ontology engineering. This is a

not yet invest in hospitals with the app as it is a huge ERP

huge change for our company. The trend toward Internet

investment, but we are managing small-scale investments

use minimizes competition with other Mexican companies

first. Earlier this year, we launched a combination

producing similar books. Language will not be a barrier

pharmaceutical product for hospitals, which is intended to

much longer, when computers can translate complex

boost patient hydration. Our next step is to ensure that the

technical scientific texts and even slang without difficulty.

drug is correctly administered. Setting dosage is one step, and the possibilities for duplicity (two drugs replicating

Q: Do you have plans for expansion in the near future?

the same effect) and counter interactions is the next.

A: Our expansion depends on technology. At present, we are a best-practice company for IBM’s software,

Q: Do you share the data that you obtain from doctors’

hardware,

search patterns of physicians?

and

cloud

technology,

contributing

conferences on our use of the software. Once we roll

A: We share this data with our clients in the pharmacy

the format out across the board we will be able to

industry as a value added service. The information includes

enter any market with ease. In just two years, we have

the number of, for example, gastroenterologists who have

registered 180,000 doctors operating in the region, so

consulted a product’s article on the app and site, and when

momentum is building. However, Apple, Samsung, Oracle,

they did so. The time data is particularly important if there

and many other technology companies have extensive

has been a sales drive or a public health campaign, for

health branches, none of which reach Mexico, a market

instance. We have logged 220 million searches since the

containing millions of people, because it is “too small” or

launch of our database in 2012, mainly from our regional

“not ready.” To get the market ready, all that is needed is

countries. Our meetings used to concern publishers,

organization. The US invests approximately US$40 billion

printers and front covers for our books, but now we ask

in health technology, spread across imaging, radiology,

about how we can make navigation quicker and easier,

and IT systems. In Mexico, the figure is much smaller: we

to cope with our database’s averages of 2,500 users per

work with some small startups, generally from Spain or

second, for instance. Technology will change the way we

the US, to whom we sell our databases on demand. Few

sell, distribute, and seek out medical help.

247

When it comes to cosmetics, Mexico has a positive balance of trade with a US$1.5 billion surplus. The market for therapeutic cosmetics products in Mexico has boomed in the last decade with

increased purchasing power raising demand levels. The cosmetics market has also evolved into a dermocosmetic one in which therapeutic product market share is steadily growing. The market for dermatological products had a 6% value growth in 2013, which is higher than the pharmaceutical industry’s average in Mexico. Moreover, 486,499 treatments were carried out in the cosmetic surgery field in 2013. Treatments offered are on average 40% cheaper than in the US, the number one market in the world for cosmetic surgery, and the quality is rated as similar and almost all doctors and staff are bilingual. Mexico itself is rated as the third largest consumer of cosmetic surgery behind the US and Brazil.

This chapter will look at the market for cosmetic surgery in Mexico as well as the current state of and the potential for therapeutic and beauty products.

HIGHLIGHTS • Dermocosmetic products • Beauty & cosmetic products • Quality of cosmetic surgery • Regulatory improvement • Innovative treatments

THERAPEUTIC COSMETICS & BEAUTY

CHAPTER 10: THERAPEUTIC COSMETICS & BEAUTY 252

ANALYSIS: A Leading Global Position in the Cosmetics Market

254

VIEW FROM THE TOP: Carlos Ramón Berzunza Sánchez, CANIPEC

256

VIEW FROM THE TOP: Ricardo Spinola, Farmapiel

258

VIEW FROM THE TOP: Blanca Miller Kobisher, SMCME

258

VIEW FROM THE TOP: Geraldine Waked, Sesderma

260

INSIGHT: Oscar Monroy Medicina Estética Europea

261

INSIGHT: Alejandro López, Cosmetobelleza Natural IM

262

VIEW FROM THE TOP: Carlos de Kruyff, CDM Labs

264

INSIGHT: Fernando Álvarez, FBD

264

TECHNOLOGY SPOTLIGHT: Nanotechnology and DNA Repair

266

INSIGHT: Frank Rosengaus, Ultrabody

267

VIEW FROM THE TOP: Dr. David Kirsch Kleiman

251

A LEADING GLOBAL POSITION IN THE COSMETICS MARKET Complementing the mainstream healthcare sector both in

the market over countries that do not benefit from the

terms of production and generation of employment, the

same proximity to the US. The cosmetic surgery and

beauty industry encompasses cosmetics, personal care,

dermocosmetics industries have grown rapidly, especially

and OTC products. There are, however, notable differences

in Mexicoâ&#x20AC;&#x2122;s northern states, and both offer attractive

in the barriers to entry for each sector. The cosmetics

business opportunities from an investment perspective. For

sector is subject to fewer regulations than the traditional

example, in contrast to ten years ago, all the major players

pharmaceutical industry, and consequently it is easier for

for dermal fillers now have a presence in Mexico. Besides

companies based in Mexico to represent foreign brands.

Mexicoâ&#x20AC;&#x2122;s proximity to the US, two significant global trends

This has resulted in a thriving market. In 2014, Mexican

have been catalysts for growth. An increased consumer

exports of cosmetics and personal care products totaled

awareness of the impact of sun exposure has resulted

US$3.8 billion while imports amounted to approximately

in a 50% rise in sales of solar protection between 2008

US$1.9 billion. Mexico is the largest exporter of such

and 2013, and the masculine personal care segment has

products in Latin America, and currently exports more than

registered a 36% growth over five years. Carlos Berzunza,

the rest of the region combined. The value of the Mexican

Director General of CANIPEC, a not for profit organization

market for beauty products is estimated to be US$10

joining the National Chamber of the Cosmetics Products

billion, positioning the industry in 10th place globally.

Industry, and the National Association of Personal Care and

Mexico has a competitive advantage in certain areas of

Home Products Industry, emphasizes the male cosmetic

2,603 2,603 837837

2,347 2,347 840840

1,889 1,889 716 716

1,722 1,722 755755

1,576 1,576648648

2,950 2,950 886886

market as a significant growth opportunity, especially in

EXPORTS (US$ million)

countries like Mexico with large populations. The entry of more women into the Mexican labor force is resulting in a general rise in income per household. In 2013, the skin-care and hair-care segments grew 8%, while dermatological products grew 6% reaching MX$4.4 billion. This growth rate exceeded the growth of the overall pharmaceutical market, but dropped in 2014 with consumers restraining their spending on beauty products and other markets due

cosmetics

2013 2013

2012 2012

20112011

2010 2010

2009 2009

2008 2008

to increased taxes on some food products and beverages.

to national GDP in 2014 and this percentage is increasing, seeing 14% growth over five years. Most CANIPEC affiliates

1,419 1,419 451451

1,308 1,308 416416

produce personal care or home care products, but the 1,309 1,309 383383

1,080 1,080312 312

862862288288

national market, which are estimated to generate more than 300,000 direct and indirect jobs, contributing 1.2%

domestic hygiene

IMPORTS (US$ million)

1,010 1,010336336

CANIPEC represents 80% of the companies in the formal

organization also works with companies that provide raw materials, assembly plants, traders, and manufacturers of own label goods. Despite the challenging economic conditions experienced in 2009, CANIPEC reported stability in the cosmetic sector. Investments made during this year led to an increase in production capacity, mainly for exports, meaning Mexico continued to offer attractive investment opportunities. Foreign direct investment in

2013 2013

domestic hygiene

2012 2012

20112011

2010 2010

cosmetics

2009 2009

2008 2008

the cosmetics industry over the last nine years averaged US$300 million per year. As for aesthetic and cosmetic procedures, Mexico had 1,550 plastic surgeons in 2014 providing 706,072 procedures, The Mexican market for beauty products is estimated to be US$10 billion, positioning the industry in 10th place globally with an expected growth of 14%.

Source: Euromonitor International

252

including nonsurgical treatments like botulinum toxin and hyaluronic acid injections, and surgical ones such as liposuction, rhinoplasty, among many others, as reported by the International Society of Aesthetic Plastic Surgery

(ISAPS). Companies that form part of CANIPEC follow

that are required by physicians, dermatologists, and

a Code of Self-Regulation and Advertising Ethics for

specialists. Plastic surgeons and medical professionals

Cosmetic Products and Homecare Products (COSMEP)

are a good example of our key customer base,” explains

which incorporates 19 principles such as legality, veracity,

Spinola. In response to some of the main general trends

honesty, fair competition, respect, dignity and comparative

in the industry, Farmapiel is focusing on suncare lines and

advertising.

affiliated products as well as therapeutic treatments for scarring.

An area in which some experts have identified key opportunities are those specialties where differentiated

The use of phytochemicals as active ingredients within

solutions can be introduced, particularly in the field of

dermatological lines is also on the rise, and while European

therapeutic cosmetics. Ricardo Spinola, CEO of Farmapiel,

consumers have set the precedent for consumption of

a local dermatological company, is focusing on this area

products containing these ingredients, Mexico has a pre-

for that very reason. “We see clinical dermatology as

Columbian tradition of using plants as medicine. Many

our key segment, including the provision of products

research centers in Mexican Universities are interested in this field and companies like Pierre Fabre are importing

COSMETICS MARKET IN 2013 (US$ million)

lines to Mexico. The ingredients derived from plants used by researchers are the result of combining chemistry,

Position by country

Sales

United States

73.2

screening, as well as original observations or proposals

Germany

42.9

from external partners, and require specialist knowledge,

which the Mexican labor force is able to offer. “There are

France

chemical

taxonomy,

epidemiology,

high-throughput

many excellent products in the market place that have

Italy

16.8

China

44.2

Japan

their origins. When it comes to phytopharmaceuticals,

United Kingdom

16.9

they must have and prove the highest standards of

Russia

14.1

Mexico

10.8

a natural source, including aspirin, and these products should not be disregarded or minimized because of

manufacture and quality processes,” explains Pierre Fabre’s Director General for Mexico and Central America Karel Fucikovsky.

253

| VIEW FROM THE TOP

COSMETICS AND PERSONAL CARE MARKET RIPE FOR GROWTH CARLOS RAMÓN BERZUNZA SÁNCHEZ Director General of CANIPEC

Q: CANIPEC incorporates the National Chamber of

billion, representing a surplus of almost two to one. Within

Cosmetics Products and the National Association of

this industry, Mexico is the biggest exporter in Latin

the Home and Personal Care Industry - what is the

America, and at the moment we export more than the rest

association’s focus?

of Latin America combined. Currently we are in 11th place

A: CANIPEC was initially called the National Chamber of

in cosmetics and 12th in domestic care products in terms

Industry and was first designed as a branch of the National

of exports but one of our long-term goals is to become

Chamber of the Transformation Industry (CANACINTRA).

one of the principal exporters on a global level.

One of the most influential moments in the history of the Mexican chambers was when the requirement to operate

Q: What sort of growth has the market seen in recent

as a government subsidiary was annulled. Previously, a

years and how much potential is there for continued

company could not form part of the business industry

momentum?

without belonging to a chamber, but this clause was declared

A: The market has significant potential and, although

unconstitutional by the Supreme Court of National Justice

through our strategies we have achieved significant

due to its violation of freedom of association laws. In this way,

growth, we must continue capitalizing on the momentum.

each chamber was given the freedom to recruit companies

The continuous expansion of this sector is around 5-6%

as affiliates by offering powerful incentives. At CANIPEC,

annually, with the exception of 2014, a particularly complex

we prioritize the generation of added value, which means

year in which the personal care industry grew less than

creating an agenda that propagates interest and supports

1% and that of domestic care grew by about 3%. This

our members. In 2010, a ten-year strategy was formed by

environment was caused by various factors including the

CANIPEC affiliates in the cosmetic sector in order to align

global economic situation, and variations in the conversion

our values with the companies’ individual business plans. In

rates. Since all our measurements are taken in dollars in

a new initiative in 2011, we decided to incorporate the home

order to compare them with other countries, and internal

care industry into our operations, and since then we have

circumstances like modifications in tax laws.

represented both industries and currently have 65 affiliate companies, representing approximately 80% of the market

Q: What are the main sales and distribution networks

of each business area. Currently, Mexico is the second largest

for CANIPEC members and to what extent is this aspect

market in Latin America with a value of more than US$15

changing?

million between cosmetics and personal care products.

A: The majority of our affiliates manufacture personal care or home care products, or belong to the value chain within

254

Q: What are the main features of this ten-year strategy?

this industry. We also work with companies that provide

A: We have two strategies, one designed for cosmetics,

raw materials, assembly plants, traders and manufacturers

drafted in 2010, and the other for the domestic care

of own label goods. This industry has four distinct sales

sector that was completed in 2014. Both have various

channels. Firstly, the direct sales channel constitutes

commonalities since one of our main aims was to

companies that operate through sub-contracted self-

incorporate both industries under the CANIPEC umbrella in

employment, mainly through sales catalogs. Secondly,

order to generate synergies. These strategies have similar

there are companies dedicated to retail sales, which

objectives in developing the national and international

generally tend to be convenience stores. Thirdly, there are

markets and attempting to strengthen exportations from

prestige stores, like department stores and pharmacies.

Mexico. Currently, Mexico is in receipt of a significant

Finally, we have companies using specialized channels to

amount of foreign direct investment and also possesses

distribute products, like dermatological pharmacies, spas,

a strong national investment sector. In 2014 we exported

or professionals within beauty salons. Different sub-sectors

US$3.9 billion worth of home and personal care products

within this market are facing an uneven evolution and one

from Mexico and we imported approximately US$1.9

of the challenges we face is coordination of the entire

market due to fluctuations in individual products. Certain

of each country must ensure the health of consumers, and

products face permanent demand but others see sales

we are working with the various authorities to promote

corresponding with delimited periods and seasonal factors.

regulatory controls within the industry. We are collaborating

It is not possible to determine a generalized behavior but

with COFEPRIS, PROFECO, and IMPI among others, but

we have seen a strong rise in own brand products.

we must also raise consumer awareness by implementing protocols to guarantee the purchase of legitimate products,

Q: How important is it for CANIPEC to help foster

beginning with the use of legitimate distribution channels.

innovation within the industry and what are your main

On occasion, misleading advertising campaigns have

strategies in this regard?

meant that companies have claimed that products belong

A: This industry is highly focused on R&D of new products

to a different sector or have made unsubstantiated claims

and as a result invests heavily in this area. Our objective

about the efficacy of a product. This affects consumers

as CANIPEC is to create a competitive, innovative, and

and the industry equally, in terms of wasting money and

global business, providing added value across the industry.

fostering unfair competition. The companies that form part

This covers everything from educational tools to support

of CANIPEC have created a Code of Self-Regulation and

business decisions and we also try to provide members

Advertising Ethics for Cosmetic Products and Homecare

with useful figures and trends within the sector. The

Products (COSMEP) which incorporates 14 principles such as

industry is extremely open to free trade, and as a result

legality, veracity, honesty, fair competition, respect, dignity,

we carry out constant information exchanges with our

and comparative advertising among others.

counterparts in other countries and disseminate the trends that our companies have seen. We also try to provide our

Q: With which other organizations are you collaborating?

members with a more favorable business climate so that the

A: We are collaborating with various organizations,

companies can expand in both national and international

such as SEMARNAT with which we have now created an

markets. To facilitate foreign trade we are working closely

agreement for the promotion of sustainable consumption.

with the government on various initiatives. Last week we

We are also working with the Undersecretary of Industry

attended a summit of the Pacific Alliance in Peru, which

and Commerce of the Ministry of Economy in order to

was attended by Enrique PeĂąa Nieto along with his Latin

increase the strategic value of the personal care and home

American counterparts. These alliances present excellent

care sectors. We are currently implementing complex

opportunities, and through communication between the

protocols with various stakeholders in order to promote

Business Chambers of Colombia, Chile, Peru and Mexico

the development of the sector, such as the integration of

we managed to obtain an agreement ratified by the

productive chambers that have the potential to generate

representatives of each country in order to allow us to

more than 185,000 direct and indirect employment

present our respective governments with a unique plan to

opportunities, notwithstanding the income generated from

simplify the necessary negotiation processes. Our proposal

self-employment. We work closely with the Undersecretary

is angled towards a regulatory convergence, which would

of External Commerce, the Undersecretary of Industry and

facilitate market access to comply with the regulatory norms

Commerce, and the Undersecretary of Competition and

of our country, therefore fostering bilateral and reciprocal

Regulations. We also collaborate with the legislative to

trade. These initiatives started by consensus between

strengthen the regulatory requirements of the sector using

private sector agencies three years ago. Government

international practices as a baseline.

representatives in the Ministries of the Economy and various health authorities analyzed the proposal and decided to

Q: What are the main trends in the personal care sector?

approve it. This provides solid evidence of the work that the

A: We observed an increase in the masculine care market.

industry can perform through collaboration and has served

Previously, there were very few products focused on men

for the implementation of better practice.

and now we are seeing that the stigma associated with these products has declined. However, certain sectors such as solar

Q: Is the industry affected by the introduction of low

protection products require promotion, as Mexicans tend

quality products from China or India?

not to use enough solar protection to combat the damaging

A: To overcome this challenge, CANIPEC is promoting more

effects of the sun. CANIPEC is highly involved in advertising

educated consumption. Our companies always seek to

and regulation and in promoting an informed consumption,

guarantee that the products are secure and trustworthy, since

providing the consumer with product information, tips,

strong investments are made in the creation and promotion

recommendations,

of their brands and therefore employing bad practices would

Additionally, we make a concerted effort to discredit

be detrimental to their business. The regulatory authorities

inaccurate industry information provided to the consumer.

and

correct

usage

instructions.

255

| VIEW FROM THE TOP

ADVANCING INNOVATION IN CLINICAL DERMATOLOGY RICARDO SPINOLA CEO of Farmapiel

major

or using products to treat acne for example. The other

pharmaceutical companies in the dermatological field as

You

have

long

history

working

for

factor benefitting the sector is the increase in economic

well as with a major hospital. What made you decide to

purchasing power of Mexico. More and more people will

branch out on your own with Farmapiel?

have access to healthcare, including dermatology over

A: My long-term ambition has always been to branch out

the coming years. Both of these trends should have a

as an entrepreneur. I have for the most part worked within

positive impact on the growth of the dermatology sector

the dermatological field throughout my career, although

in general.

I had the honor to be selected as CEO for Medica Sur in 2011. Medica Sur was implementing a new strategy and

Q: How dynamic is the current dermatological climate in

I spent two and a half years there helping them realize

Mexico and where is your main focus?

that vision. The hospital is home to some of the best

A: As with any other pharmaceutical business, it is

physicians in Mexico, even in Latin America, that are highly

extremely competitive and has many players. Mexico has

professional and ethical, and I was very proud to be a part

always been an attractive market because of its size and its

of the team. However, recently the opportunity arose for

opportunities for growth. The competitive environment is

me to acquire Farmapiel and the company met my target

tough in general terms, and dermatology is no exception.

requirements in terms of size and therapeutic class, which

We believe however that the opportunities exist for

was dermatology. There are very few pharmaceutical

companies that want to introduce differentiated solutions

companies in Mexico that are truly local. Farmapiel was

to add value for physicians and their patients. There are a

founded in 1991 in Mexico and was a family owned business

lot of commercial activities in dermatology but what we

until I acquired it in 2013. I am not venturing into the

are focusing on is therapeutic solutions. We see clinical

business entirely alone - I recently invited a private equity

dermatology as our key segment, not necessarily consumer

fund, EMX Capital, to hold a majority stake in the company

products, but rather products that are required by

and it has been productive to have them on board. This is

physicians, dermatologists, and specialists. Plastic surgeons

the first stage in my growth plan for the long-term future

and medical professionals are a good example of our key

of the company.

customer base. Nevertheless, we do not limit ourselves and we do sometimes see potential opportunities to provide

Q: How have evolving consumer and patient patterns

products for other sectors or niche activities. Thankfully

changed the dermatological industry?

our team is capable and expert enough to be able to be

A: I think there are two critical factors in Mexicoâ&#x20AC;&#x2122;s case

flexible. The innovation we have in this field is much more

when dealing with looking at the potential growth of

advanced today than it was ten years ago. Patients have

dermatology products. One is that peopleâ&#x20AC;&#x2122;s health and

access to better information, better products, and more

habits have changed significantly compared to 20

comprehensive, integrated solutions. So while we focus on

years ago. On a global scale, people take better care

therapeutics, a degree of activity in the commercial arena

of themselves, wanting to live a healthy life and look

is of course essential and companies need to be involved in

younger. This has also increased the life expectancy to an

promotional activities and distribution processes.

average of 75 to 80 years old. Increased life expectancy

256

leads to a corresponding growth in dermatology and the

Q: What sorts of therapeutic products are you focusing on?

industry has developed on a large scale in the last few

A: When I acquired Farmapiel, the company specialized

years, with a major impact on the health sector. There are

in clarifying agents and products for wound healing and

an infinite number of specialists today who are able to

for acne. Now we are expanding the different sectors of

diagnose every kind of skin problem. In terms of skincare,

the company to include sunscreens and products to treat

people have more of a desire to protect and care for their

more severe conditions such as atopic dermatitis. Our aim

skin, and so are more amenable to wearing sunscreen

is to develop products centered on improving the health of

patients’ skin, creating better quality of life and confidence.

A: The regulatory environment in Mexico has been

We have products for the treatment of acne and scars and

rapidly catching up to international standards. In terms

conditions such as keloid scars. We also have lightening

of therapeutic care, dermatology products must be

products for age spots, sunspots, and radiation spots. We

validated and certified in Mexico through the Ministry

provide pediatric products and therapeutic solutions for

of Health. Personally, I would like to see processes

allergic reactions that affect the skin. We have launched

progressing faster, but the government has provided us

new products, including sunscreens, products to help

with different routes such as pre-reviews to speed the

reduce hair loss, and others designed for specific skin

process up. These options may be appealing depending

conditions. In fact, hair loss products make up some of the

on company priorities.

top selling dermatological products in the industry right Q: To what extent do you see Mexico being able to develop

now in Mexico.

as an R&D hub for dermatological products? Q: How have you devised your production strategy?

A: I think Mexico has interesting opportunities and we

A: We currently import semi-completed products from

have been working with the Ministry of the Economy,

the US and Europe to pack and finish in Mexico. We have

CANIFARMA, and CONACYT to consider our options for

recently acquired a manufacturing plant in San Juan del

innovation in dermatology. In collaboration with other

Rio, Queretaro, which is being remodeled to comply with

companies with interesting ideas we are exploring ways to

COFEPRIS requirements. Our plan is to have a first-class

work together and to bring about, new medical solutions.

manufacturing site for semi-solid dermatology products,

At this point, we are looking at different dosing ideas in

including creams, gels, ointments, lotions, and solid

terms of the way in which some of the dermatological

form products. We will continue importing the cosmetic

products are being packaged. We have explored this with

products with the best reputations. In Europe and the

international companies in the US and Europe. We expect

US, there are some refined cosmetic advantages that we

to work very closely with some universities; in fact, we

want to keep in the market. On a separate level we have

have already been working with UNAM. From time to time

identified an opportunity to undertake manufacturing in

we also work with other universities in different parts of

our Mexican site for some highly specialized dermatology

Mexico. CANIFARMA has access to specific programs with

companies, not only in Mexico, but elsewhere too.

the Ministry of Economy and ProMéxico.

Production sites in developed countries have become more expensive and more complicated to operate and we

Q: What export potential is there for Farmapiel’s products?

see an opportunity to become a high quality, low cost

A: As well as contract manufacturing, we are also looking

producer. Due to our proximity to the US, we have also

at exporting our products, firstly to Central America and

considered doing some contract manufacturing for some

the Caribbean. Activities by groups such as ProMéxico

companies there.

serve as excellent gateways for companies like ours to enter world markets. We may look at opportunities

Q: Do counterfeit products in the dermatological market

in the US and Europe because we are certain to see

severely impact the sector?

some interest from that market. To achieve this goal

A: This type of illegal activity takes place everywhere in

we have ensured that our equipment is top notch in

the world. In Mexico we have seen that the authorities are

order to meet the expected quality standards of the

taking legal action to prevent the distribution of counterfeit

US and European companies. We obtain some of our

products but there are still more procedures to consider.

equipment from Mexico and some abroad, and we find

CANIFARMA has been actively working, through specific

the equipment locally to be high quality at low cost. Our

committees to pursue distributors of counterfeit drugs in

goal is to obtain certifications in different countries as

Mexico and they have seen promising results so far.

evidence that, despite being able to provide a low cost, our quality is high. The documentation of processes

With any advancement in technology or packaging, the

and systems for pharmaceutical companies is extremely

threat of counterfeiting is imminent, so constant awareness

important in order to minimize potential risks and errors.

is required.Fortunately, Farmapiel has never had to deal

Through this, we ensure good manufacturing practices

with such problems.

and this can be more important than the equipment itself. The recent recognition of COFEPRIS by the WHO

Q: Is the regulatory environment in Mexico regarding

and the PAHO is beneficial for the industry and having

dermatological

recognized standards from the regulatory agencies

products

support a thriving industry?

sufficiently

structured

makes us a member of an elite, compliant group.

257

| VIEW FROM THE TOP

CONTINUOUS MEDICAL TRAINING FOR NON-INVASIVE AESTHETIC PHYSICIANS BLANCA MILLER KOBISHER President of the Mexican Scientific Society of Aesthetic Medicine (SMCME)

Q: What was the strategy behind the foundation of the

Q: What kind of training programs do you offer, and to

SMCME?

whom?

A: Both the SMCME and the Pan-American Institute of

A: The SMCME and IPPC provide continuous medical

Scientific Professionals (IPPC) were set up to promote

education accredited by the UNAM for medical doctors

knowledge, professional skills, values, and doctor-patient

who require medical and clinical knowledge for their daily

relations to medical doctors living in Mexico and Central

practice. Our programs have been designed and reviewed

America, without doctors and specialists having to travel

to cater to the needs of medical doctors, and submitted

outside the Western hemisphere. UNAM’s accreditation

to UNAM’s Department of Continuous Education at the

and recognition of our educational program got us off the

FES Zaragoza campus. In recent years, this campus

ground, along with permissions from health and education

reviewed and approved our program, meaning that those

authorities. The typical SMCME member is a medical doctor,

doctors who graduate from our courses receive a diploma

with that term including general practitioners, specialists

from UNAM FES Zaragoza, which is recognized by the

and even subspecialists, who are interested in the field

Health and Education authorities, and by COFEPRIS. We

of minimally invasive aesthetic and anti-aging medical

have participated both with government and with health

procedures. We are fundamentally an education organization

regulation institutions to provide a legal framework for this

for doctors. Medical treatments do not fall under our remit.

field of activity.

| VIEW FROM THE TOP

HARNESSING THE POWER OF LIPOSOMES GERALDINE WAKED Director General of Sesderma

Q: What were your initial goals upon joining Sesderma

creating brand loyalty by listening to the demands of

and what have you achieved to date?

the Mexican market and today, we are one of the most

A: When I was appointed as Director General, I pledged to

recognized brands in Mexico among physicians and final

strengthen Sesderma’s participation in the Mexican market

users, and our participation has become stronger with a

by enhancing the benefits, technology, and efficacy of our

team that consists of committed representatives that truly

products, as well as building a team committed to the

believe in the brand they represent.

corporate mission, vision, and values. In order to penetrate

258

the local market, consolidation of our relationship with

Q: What is Sesderma’s competitive advantage in Mexico’s

physicians was crucial, since we have a common goal of

crowded health and beauty market?

providing patients with effective skincare solutions. Dr.

A: Our main strength relies on our comprehensive catalogue

Gabriel Serrano, Sesderma’s owner, recruited me due to

of innovative products, but the best way to compete is by

my 16 years’ experience launching brands to the Latin

offering products with the highest quality in the market

American retail market. Our strategy has focused on

and to continue investing in R&D. We offer clinically proven

Q: What are the most popular products in the aesthetics

A: We work with one non-profit organization in order to

market in Mexico? What training do you provide on the

assist the general public. Beauty is not exclusively for

risks surrounding low-quality products?:

the rich, and should be open to every sector of society.

A: The OTC products with the largest growth in Mexico

Improved access to treatment is required. The SMCME and

are sunscreens and products for pigmentation disorders,

IPPC constantly collaborate with international medical

with botulinum toxin, absorbable facial fillers, and skin-

societies in aesthetic medicine to promote the quality

hydrating products being the most important prescription

and excellence in our educational programs. Many such

goods. The Mexican market offers products that comply

institutions have similar university programs in their own

with the sanitary regulations, as well as those that do

countries, so we maintain extensive ties to offer medical

not, so physicians should be wary of the products they

doctors the latest information in this field.

prescribe. The SMCME and IPPC are continuous medical education institutions. Our interest lies in imparting to

Q: The medical tourism industry has grown considerably

doctors the scientific, evidence-based knowledge they

over the past few years. How is this sector influencing

need to conduct ethical patient-doctor relationships, and

aesthetic medicine and what needs to be done to increase

to develop a skill-set geared towards minimally-invasive

Mexico’s position?

procedures

anti-ageing

A: Medical tourism is a natural outcome of the evolution

techniques. The SMCME and IPPC only recommend and

aesthetics

medicine

and

of aesthetic medicine. Many of the medical doctors who

use products approved by government authorities, but

have come to develop medical knowledge, ethical values,

we do not endorse any brands, and nor do we participate

and skills of minimally invasive procedures in aesthetic

in the commercialization of any products that are not

medicine and anti-ageing have established successful

approved for medical practice. Our educational programs

clinics which minister to this growing market. Since doctors

are not built around any specific products.

should constantly update their medical knowledge and skills through ethical medical practice to assure a steady

Q: How do you collaborate with other organizations for

growth of this sector, medical tourism can only benefit

promoting innovation and quality in this field?

doctors and our work as a whole.

formulas incorporating nanotechnology, which guarantee

catalogue contains 500 products sold in Spain, of which 220

effective results within a short timeframe due to the

are available in Mexico today, whereas Mediderma has 102

enhanced skin penetration of liposomes containing active

products in Mexico. We are unique in terms of innovation,

ingredients. This results in people who use or prescribe

reflected in our “listening to people’s skin” slogan and the

our products trusting the brand and it generates loyalty

groundbreaking work carried out by our R&D department in

in physicians who witness our products’ efficacy on a

developing products demanded by the market. For instance,

daily basis and act as a communication channel between

we have entered the genocosmetics market with DNA-

patients and ourselves. Their input is therefore invaluable to

repairing products putting us at the forefront of cosmetics

us because it helps us understand the market and develop

innovation by meeting specific customer requirements.

quality products that can be marketed at a fair price. Q: What are your plans for consolidating and expanding Q: What are your main distribution channels and current

your presence in Mexico?

product lines?

A: We must align with the corporate strategy and

A: Our two main distribution channels are physicians

consolidate last year’s work. We will continue working

and pharmacies. We have a line called Mediderma for

collaboratively with physicians and focusing on the

exclusive professional use and provided only to physicians.

retail market to increase accessibility to final users and

Pharmacies, on the other hand, distribute Sesderma products

effectively provide beneficial products to the public. We

at a national level, within both health and beauty divisions.

want to become physicians’ preferred option when it

Health comprises products for pathologies, while beauty

comes to exclusive professional products based on efficacy

consists of hygiene, antioxidants, depigmentation products,

and quality. Finally, we are planning to incorporate integral

capillary products, anti-aging, and we are introducing a

medical visits, which begin with distribution channels and

new genital rejuvenation line. The complete Sesderma

end in at-home treatment.

259

BRINGING AESTHETIC MEDICAL INNOVATIONS TO MARKET The last few years have seen many doctors breaking into

Veracruz, and Cancun. For Monroy, it has been easy to

the field of aesthetic medicine, which has experienced a

adapt marketing strategies to the Mexican skin and

significant market growth that makes it easier to import

population. “The growth of social media means that

products and launch them on the Mexican market just a

most of our customers are already acquainted with

week after Europe. Medicina Estética Europea is taking

mesoaesthetic pharmaceutical products even before they

advantage of this opportunity. Having started as a family

are launched to the local market,” Monroy says.

company, its initial goal was to create a company to import cosmetic products with an initial client base of four major

Recently COFEPRIS has closed several unaccredited

cosmetics companies. Today, Oscar Monroy, Commercial

aesthetic clinics that were operating illegally or providing

Director of Medicina Estética Europea is convinced of the

unregistered products. Monroy believes COFEPRIS is

strength of the market. “Our innovative products are able

doing a great job in regulating the sector and closing

to keep pace with their European counterparts,” he says.

clinics that were operated by unqualified professionals

Medicina Estética Europea manages top-quality product

lines from mesoestetic Pharma Group, a pharmaceutical

guidelines also record sanitary data for every cosmetic

laboratory recognized as international leaders in the field

product imported into Mexico, including ingredients and

of dermatology and aesthetic medicine.

therapeutic requirements. Monroy explains, “Regulation

were

providing

unsafe

treatments.

Regulatory

for cosmetics is considerably less strict than it is for Mesotherapy is at the core of Medicina Estética Europea’s

cosmetic medicines. At Medicina Estética Europea, we

business. This is a non-surgical cosmetic treatment

do not sell skin medications, only aesthetic products, nor

that targets the mesoderm by using electroporation

do we have an interest in incorporating them since the

equipment. As a complement to aesthetic surgery,

aesthetic market is relatively large.” Monroy also stresses

mesotherapy is particularly effective against cellulite,

the importance of developing education courses for

signs of ageing, and unwanted pigmentation. Struggling

professionals interested in opening an aesthetic clinic

to get people to familiarize themselves with new niche

so as to provide guidance on required regulations and

products is something that companies frequently face.

certifications.

“When the company was created, these products and procedures were almost completely unheard of in Mexico,

Future plans for the company include expanding its

so we encountered a great deal of skepticism,” Monroy

national coverage. Monroy is determined to capitalize

explains. Today, however, it is extremely common to

on regional and national conferences and symposiums

find non-invasive, hyaluronic acid-based products that

by promoting the best products for aesthetic cosmetic

can alter the skin without damaging it. Monroy believes

medicine. Events are an excellent way to stay up to date

there are significant growth opportunities for aesthetic

with the latest technologies. Moreover, Monroy states,

products formulated with non-reticulated hyaluronic acid

“Over the course of 2015, we hope to consolidate our

without a filler effect like the company’s Mesohyal range.

business, strengthen ties with our current clients, and

This substance provides the skin with additional moisture,

expand into other states. Nuevo Leon is first, followed by

improving its quality and elasticity in both facial and body

Baja California, since both are strong markets. Finally, we

treatments

will strengthen our sales force, bringing products closer to our clients and educating them on our products.”

Medicina Estética Europea targets qualified physicians and dermatologists, generally those with aesthetic medicine studies that are backed by a Mexican institution. This goes hand in hand with education workshops run by laboratory-hired professional speakers at medical conferences. The company held its last event at the PanAmerican Institute of Scientific Professionals (IPPC), and it also holds events on proper skin care across the country, including Veracruz, Cancun, Merida, Mexico City, Guadalajara, Monterrey, and Tijuana. As exclusive distributors for prestigious brands, Medicina Estética Europea has an extremely large, prosperous market, especially in humid and hot climates, such as Merida,

260

“When

the

company

was

created, mesotherapy products and

procedures

were

almost

completely unheard of in Mexico. Today, non-invasive, hyaluronic acid-based products are very common” Oscar Monroy, Commercial Director of Medicina Estética Europea

A NATURALLY DERIVED WINNING FORMULA From the very start, Cosmetobelleza Natural IM has put

strategic advertising. Cosmetobelleza made its name with

quality at the center of its business. The company’s rapid

mass-scale publicity campaigns. The same is true today.

expansion has not compromised this guiding principle.

Bus hoardings, radio, and word of mouth remain the three

Founded in 1989, Cosmetobelleza is the market leader in

axes of the company’s marketing strategy. “This means that

mascara sales, with its naturally produced makeup range

our cosmetics market is focused in the center of Mexico

on sale at all of Mexico’s biggest retailers and major

City,” says López, but from there it radiates into every state

pharmacy chains. From Walmart to Liverpool and Palacio

in the country. The industry’s biggest distributors, Coppel

de Hierro, the company’s products are available to both

and Walmart, are the major department store chains in

the Mexican luxury market and the low-income customer

the country, with a presence in every state of Mexico. In

base that accounts for the majority of consumers.

addition, López attributes the success of the company

“Since few cosmetic companies use actual natural elements, Cosmetobelleza’s connection to Mexico’s herbal tradition gives it an edge over many competitors in the market” Alejandro López, Director General of Cosmetobelleza Natural IM.

“Most big brands only sell image, presence and packaging.

to close collaborations with Mexican providers. Having

They ignore the product,” says Alejandro López, Director

an international presence has also been a priority for

General of Cosmetobelleza. “The surface of our brand is

López. Consumer appeal for quality products has driven

not sophisticated, but the product we sell is of the highest

Cosmetobelleza to establishing a presence in Guatemala,

quality. Because of our commitment to what is inside the

Panama, Costa Rica, Colombia, Peru, and Ecuador, with

packaging, customers prefer our brand to those that spend

the aid of ProMéxico, and considering entrance to the

money on superficial aspects of their marketing.”

Brazilian market in the short-term. From its Texas offices, Cosmetobelleza manages a growing US presence. The

Healthy living has become a mainstream topic over the

brand’s other developed markets include Spain, England,

last two decades, with natural product companies such as

and Australia. The company also had a lengthy partnership

Cosmetobelleza – a company that prides itself on being free

with Jolie de Vogue, the biggest makeup manufacturer

of animal testing - being the main beneficiaries of this shift.

and distributor in Colombia, which ended only when the

Indeed, the company’s trajectory reflects wider trends in the

latter was bought by L’Oréal. “Even though technically we

industry. “We began as a tiny startup, and slowly we have

are competitors, distributors in Central and South America

reached the level of a mid-scale business. INEGI’s statistics

have asked us to manufacture products for them,” López

define ‘large businesses’ as those which have a workforce

explains.

and sales-rate similar to ours,” according to López. As the company awaits COFEPRIS export permits to Cosmetobelleza adapts long-established traditions into

enter the Brazilian market, the Cosmetobelleza director

its unique selling point. The country’s history of natural

is sanguine about industry regulation. “As president of

products is far richer than that of many other countries

ANIPRON, a non-profit association bringing together

and López uses this as a competitive advantage. “Since

natural product companies, I had the opportunity to

few cosmetic companies use actual natural elements,

contribute to discussions at COFEPRIS and observe the

Cosmetobelleza’s focus on Mexico’s herbal tradition gives

regulatory changes. The requirements for cosmetics

it an edge on many competitors in the cosmetics market,”

are very different to medical products. I feel that if a

he explains. “All we need is COFEPRIS authorization to

business complies with basic requirements it should

send out a whole raft of such products,” says López.

have no problem with COFEPRIS.” López has witnessed the regulatory improvement Mexico has undergone in

Balance is the focus for Cosmetobelleza going forward,

the last years as things starting to change. Moreover,

with

Cosmetobelleza has received the most favorable evaluation

international growth. What is impressive about the

national

brand

consolidation

synergy

in terms of manufacturing with a five year certificate of

company is its commitment to quality products over

Good Manufacturing Practice.

261

| VIEW FROM THE TOP

MARKET CONSOLIDATION BRINGS OPPORTUNITY FOR SMART DISTRIBUTORS CARLOS DE KRUYFF Associate & Managing Director of CDM Labs

Q: What led you to undertake the role of Managing

our portfolio. As distributors is critical to protect ourselves

Director of CDM Labs and what is your perspective on the

by having a wide variety of products. At this point we are

dermatologic market?

only working within the cosmetics arena, but our objective is

A: I have been in the pharmaceutical business for almost 30

to cover other dermatological segments such as therapeutic,

years, the last 18 years as managing director for a French/

aesthetic, and corrective products. Some of these segments

Swiss dermatology company in charge of Mexico and Central

are growing exceedingly fast and have nearly doubled in the

America. As result I have a deep knowledge and experience

past year.

of dermatology and its market. I previously collaborated with Dr. Jorge Ocampo Candiani, a Key Opinion Leader in

Q: How do you identify the different products that you

this field and one of the most accomplished dermatologists

include in your portfolio?

in Mexico and worldwide. Dr. Ocampo is President of the

A: We have to map the dermatological market, a process

Ibero-Latin American Dermatology College (CILAD), Head

that has two phases. In the first we analyze all the segments

of Dermatology at the Autonomous University of Nuevo

of the markets to identify which are strongest and which are

Leon (UANL), and founder of CDM Labs. He asked me to join

growing fastest. We also investigate what our competitors

the company in June 2014 and from that point onwards, we

are doing. In the second phase, we analyze the price and

have been developing the company to be more professional

the profile of the product. We carry out this process for all

to enable us to become strong players in the dermatology

segments of the market to identify which areas to focus on.

sector. We are a small company but we want to become

The most important segment for dermatologists is always

one of the main dermatology companies in Mexico. The

acne, which represents the majority of dermatological

current landscape of the dermatology market is complex

consultations. With the recent mergers and acquisitions

as there have been several mergers and acquisitions that

in the dermatological market many products have been

have completely changed the market. In the last few

withdrawn and this is a large area of opportunity for us.

years, a number of large pharmaceutical companies have acquired dermatology companies, completely modifying

Q: In what direction are you planning to develop the

the prescribing habits and market conditions, changing

companyâ&#x20AC;&#x2122;s acne line and what challenges have you been

priorities and focus, but also creating new business

facing?

opportunities. Many companies are taking advantage of

A: While there is no magic pill for acne, there are effective

the situation, some of them with their own dermatology

treatments such as oral isotretinoin, which covers all

divisions, and they are developing innovative products to

the four physiological effects of acne, although it must

attack the opportunities.

be administered carefully. Some products containing oral isotretinoin from important companies have been

262

Q: CDM Labs was stablished in 1991 as a family company.

withdrawn from the market, leaving a gap. At this point

How has the company evolved and how do you want to

there are only two branded generic medications for it.

see it evolve further?

Commercializing pharmaceuticals is not easy however

A: At CDM Labs we are currently distributors, not yet

and COFEPRIS has strengthened their requirements

manufacturers. From 1991 we have worked with GenovĂŠ

for new additions. We identified some potential foreign

Dermatologics and since 2015 we have been collaborating

partners but their products could not meet all the

with Laboratoire Dermatologique ACM, a French company.

necessary requirements, and we were forced to abandon

We have several current goals and the largest is to

those. For cosmetics, it is easier as there is no strict

professionalize all of our processes, policies, and personnel.

registration process in Mexico. The only requirements are

We want to further the education of our employees and

that an official advice form is submitted, and packaging

to hire more experts in the field of dermatology. In the

recommendations and guidelines are followed, therefore

meantime we will focus on introducing more products to

commercialization is less time-consuming, which is perhaps

why the market is saturated with cosmetics. The council is

and key for our company as they already have a complete

more concerned with pharmaceuticals, medical devices,

infrastructure and regional coverage many patients for our

and biological products at the moment, but I believe this

products. We have an exclusive line of products for Doctors

will change in the near future. These potential changes will

under the brand DermoBase, with specific promotional

be beneficial for companies with proper infrastructure and

initiatives. We provide doctors with their own brand and the

internal regulations that can comply with all the necessary

opportunity to offer something different to their patients.

requirements. On the other hand, companies that do not

This is a growing trend, since other companies are realizing

have their regulations in order will find themselves in

that promoting to doctors is an efficient way of generating

trouble. This change will be a filter that will lead to the

more business. This strategy is becoming more popular, not

withdrawal of low quality products from the market.

just in dermatology. Distributors are also specializing in other areas and favoring those that require special conditions in

Q: When do you believe these new regulations will be

storage and quick distribution. Companies are putting more

implemented?

and more focus on service to doctors but also to patients,

A: It is likely that in the coming years COFEPRIS will implement

since this last audience is becoming more informed and

a more strict registration process for cosmetics, requiring

prepared due to internet and social media campaigns.

documentation of the product and of its manufacturing process. In the Americas, only the US and Mexico do not

Q: What is your opinion of the incorporation of plant

have strict regulation processes. Brazil, Argentina, Central

extracts and other natural ingredients to medications?

America, among many other countries in Latin America

A: The trend of adding phytochemicals to products is

have such regulations. While these processes are not as

growing and such lines are seeing success especially in

complex as one for a medication, it does regulate the

Europe, and there is a great opportunity in countries like

market. COFEPRIS is closing clinics that do not comply with

Mexico. In the second half of 2015 we will launch two

regulations and withdrawing unregulated products from sale.

products that include phytopharmaceuticals, one to treat

Miracle products and certain procedures can be dangerous,

Rosacea and another that is similar to a corticosteroid

especially if they are not properly regulated. Many devices

and will treat several skin conditions. These products

can also be dangerous if used improperly by inexperienced

are comparable to medicines since they have proven

individuals who may not take safety measures.

therapeutic effects derived from plants. There is a large area of opportunity in Mexico for phytopharmaceuticals.

Q: What is your strategy to compete with the inexpensive,

The general population is unaware of these products and

low quality products that are filling the market?

doctors only trust branded pharmaceuticals which have

A: The main thing that differentiates us is that we work closely

clinical studies to support them. We have clinical studies

with doctors who endorse our products. Our main strategy

for the products we will launch this year and we have

is to direct our promotional efforts to doctors who prescribe

studies that prove our products will have a comparable

our products to their patients. Dermatologists normally

effect to other medications. The companies we are working

prefer to prescribe recognized and patented brands and

alongside have clinical support and medical endorsement

products, so promotion that comes from ethical and serious

so they will focus on targeting consumers, as there are many

companies with clinical and technical support are welcome.

consumers who never visit dermatologists and only use

These doctors prescribe mostly patented medicines and

self-medication. Over the counter products are significant

sometimes branded generics, even though in Mexico these

opportunity areas for us and, while we are already present

products are safe since they now require bioequivalence

in many pharmacies, we are working to further increase

tests, in the case of oral medications. For that reason we have

our visibility. We are working on two different fronts for

to focus on branding our products and ensuring that our

promotion: through physicians and through pharmacists to

brand is renowned and respected. In dermatology, there are

properly inform our final consumer.

no large price differences between patented medicines and branded generics. Previously our commercial distribution

Q: What are your top priorities for 2015?

plan would focus on three different schemes. One is the

A: We are focusing on growth in many areas of the company

traditional way, which is distributing to the sector through

and adopting a 360Â° approach. To increase the number of

wholesales. The second is to work with Pharmacy Chains,

products we distribute, the number of employees, and rising

like Farmacias San Pablo, Farmacias Paris, or Farmacias

productivity in our operations. Our main goal is to tackle the

Dermatologicas, among others. The third is to work with

outcomes of the market mapping we performed to detect

specialized distributors who sell directly to small clients

opportunities, to optimize our spending and resources, and

and doctors pharmacies. This strategy is highly efficient

focus on demand.

263

COMMERCIALIZING COSMETICS CONTAINING NANOMATERIALS The cosmetics and dermatology sector in Mexico has

Leorex brand and Álvarez wants to increase this number

many strengths for companies hoping to enter the market.

to 20. Firstly, the Leorex mask was launched, followed by

Firstly, there are not as many generics being introduced

the booster, a specialized treatment for the face and neck,

as in the mainstream pharmaceutical market. Secondly,

and then a moisturizer, serum, and eye gel. The latter three

the sector is expected to see double-digit growth over

products are already sold directly to the public and will be

the next decade due to rising demand. Finally, cosmetics

sold in pharmacies in the next two to three years.

are far easier to register in Mexico than other products, which often require two to three years for market approval.

Leorex employs nanoparticle technology. The world

The whole field of aesthetic medicine is growing rapidly

market for products that contain nanoparticles is expected

and many institutions and specialists are becoming more

to reach US$2.6 trillion in 2015. The Leorex mask is applied,

involved as they recognize this potential to build clientele

and the nanoparticles build a matrix that adheres to the

and brand trust, as well as boosting profits. This evolution

skin and contracts, providing anti-aging properties within

is evident at aesthetic medicine conferences where the

15 minutes. The reaction is physical, not biochemical, and

range of doctors and professionals present is expanding.

lasts eight to ten hours. The mask can be applied in clinics,

“We were initially interested in placing our products in regular pharmacies but there are significant barriers to entry the market for smaller companies to this segment.” Fernando Álvarez, Director General of FBD

FBD focuses on the private dermatology and cosmetics

and FBD recommend it be applied directly before an event

market, which is considered to be more transparent and

or social occasion.

easier to access than the public sector. The company elected to represent the Leorex brand in Mexico, and expert

As a cosmetic, Leorex could be sold everywhere but

management of the distribution channels and market

FBD strategically decided not to target the OTC market.

dynamics by Fernando Álvarez, Director General, meant it

Leorex is sold by prescription through specialized doctors

embarked on this new venture wholeheartedly. There are

only. Although this is not a legal requirement, it allowed

five products currently being commercialized under the

the company to overcome the barriers to entry into the

| SPOTLIGHT

NANOTECHNOLOGY AND DNA REPAIR.

has proven to contribute both to the prevention of DNA

DNA repair enzymes

damage and its repair. Photolyase in products for skincare

UV-B rays (290-320 nm) damage skin DNA through the

is generally prepared from Anacystis nidulans and listed in

formation of cyclobutane pyrimidine dimers (CPDs). If

labels as plankton extract, some examples include PRIORI

left unrepaired, CDPs are mutagenic and contribute to

MD’s Clinical Recovery Serum, and Ocean Rescue Marine

photocarcinogenesis through suppression of the skin’s

Contour Cream.

immune system. CPDs are the principal cause of melanomas.

264

Sunscreens prevent this by protecting the skin from UV-B

Nanomaterials as carriers

rays, either reflecting these rays or transforming them into

Nanotechnology, the science of manipulating matter at

heat. Topical application of the enzyme photolyase, for

a miniscule level, has numerous applications. In the case

instance, recognizes and binds to CPDs, reverting them

of skincare products, nanomaterials act as drug carriers

to normal form after exposure to photoreactivating light

and are able to pass the almost impermeable skin barrier.

(300-500nm). The addition of photolyase to sunscreens

A current trend in cosmetics production is incorporating

pharmacy market for smaller companies, and work through

FBD presents its marketing plans to the original brand owners

physicians and special dermatological pharmacies, such as

before formulating a Mexico-specific strategy , which is

Farmacia Dermatologica and San Pablo. The pharmacies

adjusted according to feedback and experience. However,

themselves assume no responsibility for the development

the company retains exclusivity agreements that ensure it

of a product, and companies are therefore required to

can tak final decisions on producing Leorex, PE Serum, and

pay for access to shelf space, ensure a certain amount of

Epiology successfully in Mexico. The company also chooses to

rotation, and sometimes pay extra for additional branding

work with SMEs, with the belief that they are often capable of

or advertising. This makes the initial investment quite

driving innovation more than big pharmaceuticals. Extremely

hefty. Having seen many companies’ distribution channels

high quality aesthetic medicine is available in Mexico. Álvarez

expand rapidly by working directly with physicians, Álvarez

cites major hospitals employing plastic surgeons who provide

still perceives plenty of room for the enterprise to grow

an excellent level of care, although salons and spas are

working solely with dermatologists and plastic surgeons.

evolving from simply giving massages to offering full aesthetic procedures, which will require careful legislation.

In terms of intellectual property rights to protect the Leorex technology, the company holds the patent in Israel and in

FBD’s

Mexico, as well as that of another technology, PB Serum,

authorities will implement even stronger regulations in

which is based on enzymes. PB Serum applies the technology

the cosmetic sector, though as part of a broader vision

used in FBD products alongside other machines, such as radio

for the country’s healthcare sector. Regulations need to

frequency, carboxytherapy, and electroporation, and is unique

be designed alongside a profound understanding of the

in its field and it has no direct competitors with the same

knock-on effects of new regulation on the rest of the

quantity of clinical trials or a compelling body of evidence.

sector. According to Álvarez, the Mexican healthcare

Director

General

anticipates

that

Mexican

system has certain urgent priorities and cosmetics are The company has also launched Epiology, an innovative

being regulated, but as part of a chain of measures for the

treatment from New Zealand to fight acne, that has already

entire industry and involving clinics and hospitals directly

undergone clinical trials in New Zealand. Epiology began as an

to maintain strict controls on the whole industry.

OTC product in pharmacies in New Zealand but FBD decided to begin selling it through dermatologists. The product

FBD

contains an immunodefensive protein that possesses anti-

dermatologists and plastic surgeons. Álvarez also has high

inflammatory effects, coupled with an activator to maximize

hopes for PB Serum and their Epiology products. Álvarez

these effects. This treatment is derived from a natural source,

is positive about the future of the Mexican dermatology

does not cause skin irritation, and remains classified as a

market. He notes that there are opportunities for Mexican

cosmetic. Álvarez’ experience in the acne market meant

companies to represent foreign brands in the country,

his strategy to offer the product via dermatologists was a

as companies based in the US or the EU do not always

triumph, resulting in the dermatologists FBD works within

consider Mexico as a priority market. However, FBD has

Mexico being invited to present their experience with

seen that once it presents a business case to them, they

Epiology at a dermatology conference in New Zealand.

are also often enthusiastic about the country’s potential.

clinically proven ingredients into cosmetics through the

vesicles

use of nanomaterials. This trend is meant to fill the gap

believed to be able to fuse with cell membranes to release

between beauty products that cleanse and moisturize and

content inside the cell. These are the most studied and the

therapeutic cosmetics with demonstrated efficacy. Many

used carriers in cosmetics. Nevertheless, studies on their

major cosmetic brands are incorporating nanotechnology

ability to permeate the skin are inconsistent. Fullerenes –

to their products, such as L’Oreal’s RevitaLift Double

carbon spheres of approximately 1nm in diameter – can

Lifting, and Lancome’s Rénergie Microlift. Sunscreens are

encapsulate medications within their spherical structure

the most common cosmetic products using nanomaterials,

but are mostly used to capture free radicals. Finally, solid

with titanium dioxide and zinc dioxide compounds in

lipid nanoparticles are oily droplets of lipids used to

doses of 20nm to provide broad protection against

protect encapsulated ingredients from degradation and

ultraviolet light. The nanocarriers currently used for

deliver cosmetic agents over a long time. These particles

skin care include liposomes, fullerenes, and solid lipid

are able to improve penetration into the strateum corneum

nanoparticles. Liposomes, concentric mono or bilayered

and can enhance the UV protection effect of sunscreen.

plans

continue

generally

positioning

composed

Leorex

among

phospholipids,

are

265

MORE LOCAL AND FOREIGN PATIENTS KEY TO GROWTH In 1995, when Dr Frank Rosengaus heard about a cutting

beyond the reach of most patients as some treatments at

edge non-invasive surgical procedure on the cusp of

Ultrabody are priced competitively and payment plans are

being approved by the FDA, he knew he had to bring the

offered. One issue that dissuades people from undergoing

procedure to Mexico. The procedure is now one of the

facial plastic surgery is misinformation on procedures.

most popular non-surgical procedures in the world - laser

Another challenge is the need for greater enforcement

hair removal. With this success, Rosengaus expanded his

of regulations. Just like any other surgical or medical

portfolio in innovative technology, setting up Ultrabody in

procedure, regulations state that certified board doctors

2006 as a hub for pioneering the latest surgical procedures

should perform cosmetic surgery but these laws are often

in Mexico. Ultrabody has since introduced many previously

not enforced due to lack of resources.

unheard-of procedures in Mexico, including a non-invasive Dr. Rosengaus also wants to change the views of the medical

way of destroying fat through lypolisis.

industry in Mexico, promoting medical tourism hotspots for As part of the Scientific Committee on Facial Plastic

foreigners, and sees wellness tourism as an area of potential.

Surgery, Rosengaus has a definite advantage in being

The country could further exploit its potential in terms

constantly aware of new promising technology and

of medical tourism considering its strategic geographic

procedures. Rosengaus believes that Mexicoâ&#x20AC;&#x2122;s long history

location facing competition from countries like Costa Rica

of participation and innovation in facial plastic surgery

and Argentina that have heavily promoted their medical

serves as a remarkable foundation for further innovation

tourism industry. Mexico also needs to modify regulations

being brought to the country. Facial plastic surgery schools

so companies are able to adapt to new medicines and

were first established in Mexico in the 1940s, and over time

technologies faster, according to Rosengaus. Location

the country has developed a solid reputation. Through its

is another important factor in what kind of patients each

sister agency Ultimate Medical, Ultrabody now offers a

Ultrabody Clinic receives, says Rosengaus. Seven years ago,

range of education programs for plastic surgeons, as well

the organization opened a series of medical spas offering

as providing teaching courses to students. Students come

legal, minimally invasive procedures that can be performed

from Chile, Argentina, Cuba, and Colombia, to receive

outside a clinic. The main office in Mexico City mostly

personalized

courses,

receives Mexican patients, whereas the spas rapidly became

and learning procedures such as Simultaneous Cadaver

medical tourism destinations, with the clinic in Riviera

Dissection and Patient Application.

Maya being favored by European clients and the clinic in

education

through

specialized

â&#x20AC;&#x153;Mexico has had facial plastic surgery schools since the 1940s and the country has developed a solid reputation over that timeâ&#x20AC;? Dr. Frank Rosengaus, Director General of Ultrabody,

Locally Rosengaus is also seeking to increase the

Monterrey mostly receiving American clients. Rosengaus

penetration of well-established facial plastic surgery,

believes the medical tourism industry should be capitalized

since only 2% of Mexicans utilize this type of service. As a

on and promotes the Mexican medical tourism industry

physician, he is now largely concerned with non-invasive

around the world during speaking assignments in China or

procedures such as Botox and injectable dermal fillers,

while treating patients across Latin America and Asia.

which are the two most applied procedures in Mexico

266

by volume after vaccines. In the US, 6 million Botox

Developing innovative techniques in medicine, however,

applications are made a year for aesthetic or therapeutic

requires the promotion of clinical trials, which, according

purposes. Filler use has also greatly evolved in the past 20

to Rosengaus, has been a slow and complicated process.

years. Rosengaus believes their popularity can be increased

Although Ultimate Medica is currently performing clinical

in Mexico since studies show they are safe, fast, reliable,

trials, merging with Ultrabody is not a possibility at the

and can be used to solve many issues that cannot be

moment, and therefore Rosengaus is seeking ways in

addressed with surgery. It is a misconception, Rosengaus

which Ultrabody can bring clinical trials in facial plastic

believes, to say that these procedures are financially

surgery to Mexico.

| VIEW FROM THE TOP

NO SHORTAGE OF WORK FOR COSMETIC SURGEONS DR. DAVID KIRSCH KLEIMAN Plastic Surgeon

Q: What has been your experience of the cosmetic surgery

has also helped us. Surgeons used to do facial surgery

industry in Mexico and how has it evolved?

manually and with replacement tissues, which was very

A: I have been performing plastic surgeries for 35 years

invasive. Advances in laser technology mean that such

and have treated thousands of cases. A passion for plastic

operations can now be performed quickly, less invasively

surgery will always motivate me in this field. When I first

and with less scarring. Many of my patients hear about

began practicing in Monterrey, there were only three main

me through word of mouth. Cosmetic surgery remains a

plastic surgeons working in the city, however over the years

taboo among Mexicans and they are unlikely to openly

this number has grown and we have become overworked.

discuss procedures they have undergone. Nevertheless, if

My approach has been to allow my consultations to run as

they are satisfied with the result, they do recommend their

long as needed to ensure I understand the needs of my

surgeon to their friends and relatives. However, although

patients. I also provide insurance to cover any follow-up

US patients insist on quality, as plastic surgery becomes

surgical costs and hospital care, should a problem arise

more popular in Mexico, a new problem has arisen. Patients

after the surgery.

are not looking for the best surgeons but for the most affordable options and we must be careful to ensure the

Q: What are the most commonly requested plastic surgery

supply of cosmetic surgeries meet standards approved by

procedures in Monterrey?

the FDA. This needs continued attention and support from

A: Cosmetic surgery is the most common type of

the authorities.

surgery in private practices while reconstructive surgery is more commonly found in emergency rooms and

Q: What should medical tourists do when choosing a

the public system. Within cosmetic surgery, the most

plastic surgeon in Mexico?

popular operations depend on the age of the person.

A: First of all, they should go to the American Society of

Teenagers usually request nose and ear jobs or breast

Plastic Surgeons. It is very difficult to enter its ranks so it

augmentation, although some do approach my practice

stands as an excellent guarantee of quality. The Society

for breast reductions. Young women tend to favor breast

holds records of Mexican members and recommendations

enhancement and liposuction, and later in life reserve

made by their patients. Patients must always check the

consultations

the

track record of their surgeon and many potential patients

appearance of ageing, such as facelifts. Recent mothers

from the US call me to confirm my credentials and whether

may want to have tummy tucks and liposuction on the

I can perform the surgery they need before traveling.

discuss

surgeries

that

reduce

abdomen. I have patients who continue to consult me well into their 80s, for example, I have an 87-year-old client

Q: What other problems does Mexico need to solve to be

who traveled from New Zealand so that I could operate

a respected plastic surgery destination?

on her face, breasts, and abdomen. I consult many unique

A: Mexico needs serious, well-trained, and dedicated

patients and provide all kinds of cosmetic surgery.

plastic surgeons. Anyone in this profession must respect the control and supervision of the Mexican Association of

Q: Have you seen any significant interest from medical

Plastic Surgery ,all their results must be supervised and

tourists?

any problematic cases must be reviewed in front of a jury

A: In the past, I received more patients from the US than

of their peers. Transparency is the only way for Mexico to

from Mexico, due to lower prices here and a broader

truly become a first-class plastic surgery market. National

acceptance of plastic surgery in the US. Until now, private

and local associations would also benefit from being more

clinics in Mexico offered surgeries cheaper than public

proactive in collecting data about operations, so as to

hospitals. However, these hospitals have realized what a

identify problematic areas and evidence of our successes.

promising market they are missing out on and are now

Finally, it is crucial to be fully open with their patients

trying to attract patients too. The evolution in technology

about the type of products to be used in their procedures.

267

With 73% of the population overweight and 35% obese, Mexico faces the challenge of allocating the necessary resources to prevent the healthcare budget from collapsing in the next 30 years. Three major causes have been identified including high calorie intake, sedentary lifestyle, and genetics. Obesity not only leads to chronic and degenerative diseases such as diabetes,

cardiovascular diseases, and several types of cancer, but also represents an economic burden for the country, hampering productivity and competitiveness. The annual loss associated with early death from diabetes is US$5.5 million. In response to this, the government is developing new programs to tackle obesity, including a new taxation law to discourage the consumption of sugary drinks approved in 2013 as well as new food labelling requirements.

This chapter will assess the present and future consequences of the diet and obesity crisis as it stands today, and examine the measures being taken by the government. The work of several associations and foundations is crucial in this endeavor as well as that of pharmaceutical companies developing innovative treatments for obesity. The significance of the food industry will also be examined along with a focus on the growing market for healthier, organic, and functional foods. Finally, the growth of the health and fitness club industry is examined.

HIGHLIGHTS • Obesity, diabetes & cardiovascular diseases • Governmental programs • Novel treatments for obesity • The role of the food industry • Fitness programs

DIET & OBESITY

SEPTEMBER 7, 2016

SHERATON MARIA ISABEL MEXICO CITY

JOIN THE INDUSTRY LEADERS TO INFLUENCE THE CHANGING FACE

OF THE MEXICAN HEALTH INDUSTRY AGENDA MEXICO HEALTH SUMMIT 2016 8:00

Registration