2017
Prevention is the name of the game. We have to bet on that and cultivate it from a young age. JosĂŠ Narro, Minister of Health of Mexico
2017 As 2016 turned the corner into a new year, macroeconomic uncertainty kept the world – and the global business community – on tenterhooks. The Mexican health industry cast a wary eye on events north of the border that were impacting the local exchange rate while also focusing treatment efforts on obesity and diabetes, which continued to top the country’s major health concerns. Considered as epidemics by the government, steps are being taken to eradicate these diseases in the country, especially through prevention. However, universal access to health, a key to promoting prevention in an increasingly aging population that is not accustomed to continuous medical checkups, remains an illusive ideal in the face of a fractured Mexican health system and the large number of people who continue to work informally, which complicates their access to a system marked by budget cuts. In this context, collaboration between the public and private sectors is vital for improving quality of life.
In the private sector, global economic uncertainty, and the election of US President Donald Trump, led large pharmaceutical companies to begin 2017 with some misgivings about peso volatility versus the two major currencies: the dollar and the euro, although initial fears faded as stability returned to the domestic currency. In fact, most continue to report growth and show a commitment to the development of health in Mexico through investments in areas such as clinical research, an area in which the country aspires to become a referent.
The health sector, which represents around 6 percent of the country’s GDP, continues to be a strategic industry for Mexico, a country blessed by an ideal geographical location, neighbor to the US and gateway to Latin America for many companies, and a diverse population. Mexico Health Review 2017 offers key insight into the challenges and the opportunities the industry continues to face, providing top-shelf interviews, analyses, insights and infographics. Mexico Health Review 2017 is essential to understanding the state of the health industry in Mexico today and for the path ahead.
ALL RIGHTS RESERVED Š Mexico Business Publications S.A. de C.V., 2017. 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 Mexico Business Publication 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: 978-0-9993108-0-9
TABLE OF CONTENTS
1
YEAR IN REVIEW
8
BIOELECTRONICS & BIOTECH
2
HEALTHCARE SYSTEMS
9
NUTRITION & WELLNESS
3
BIG PHARMA
4
GENERICS & BIOSIMILARS
11
HEALTH CONCERNS
5
MEDICAL DEVICES
12
INSURANCE
6
BIG DATA & HEALTH APPS
13
ATTRACTING & RETAINING TALENT
7
CLINICAL RESEARCH & TESTING
14
DOING BUSINESS IN MEXICO
10
LOGISTICS & SUPPLY CHAIN
Downtown, Mexico City, Mexico Tourism Board
YEAR IN REVIEW
1
As public institutions face shrinking budgets, they are struggling to cover a larger number of patients who are increasingly suffering from preventable disorders such as type 2 diabetes (T2D), obesity and conditions such as cardiac insufficiency that ensue. These have also worsened due to poor lifestyle habits such as a lack of exercise, smoking and alcohol consumption. External factors are also worrying. The Mexican peso has dropped against many currencies, pushing up the cost of importing goods and parts. This has hit the bottom line of companies in all sectors of the industry. Many are so far reluctant to pass on those added expenses to consumers, but for how long? An uncertain security environment in Mexico and the persistent problem of access to healthcare for many add to the question marks surrounding the sector.
This chapter will provide an overall review of the healthcare industry, featuring insights from the most prominent and important figures in the sector. It includes interviews from pertinent health and industry associations, government institutions and health-related agencies while discussing the state of the Mexican health system, the changes in regulation that occurred over the year, the progress made and the challenges to come.
5
7
CHAPTER 1: YEAR IN REVIEW 8
ANALYSIS : Despite Headwinds, Optimism Reigns
12
VIEW FROM THE TOP: José Narro, Ministry of Health
14
VIEW FROM THE TOP: Julio Sánchez y Tépoz, COFEPRIS
16
VIEW FROM THE TOP: Rafael Gual, CANIFARMA
18
VIEW FROM THE TOP: Cristóbal Thompson, AMIIF
20
VIEW FROM THE TOP: Edgar Romero, AMID
22
VIEW FROM THE TOP: José Campillo, FUNSALUD
24
INSIGHT: Patricia Uribe, CENSIDA
Carlos Magis, CENSIDA 26
INFOGRAPHIC: COFEPRIS Breaks Down Barriers
27
VIEW FROM THE TOP: Ana Güezmes, UN Women
28
VIEW FROM THE TOP: Pressia Arifin-Cabo, UNICEF
30
ANALYSIS: Air Pollution World’s Fourth-Biggest Killer
ANALYSIS
DESPITE HEADWINDS, OPTIMISM REIGNS Despite geopolitical and economic pressures both at home and
epidemics, the first noncontagious diseases to
abroad, Mexico’s health industry is pulling together to improve
be considered as such. Although many private
access, raise awareness of the need for prevention and taking
and public-sector initiatives are afoot to combat
steps to position itself as global hub for clinical research
the diseases and related complications, to make true progress personal habits need change, says
8
Global economic and geopolitical uncertainty marked the
José Narro, the Minister of Health of Mexico. “The population
latter part of 2016 and the first half of 2017 and sparked
is not fully conscious about the dimension of the problem.
concern for many companies worried that currency
Secondly, although there has been a deceleration of the death
fluctuations would negatively impact their bottom line. The
rate, there is no decline. The number of deaths due to diabetes
peso yo-yoed in line with US polling predictions in the run-up
multiplied by about seven times between 1980 and 2015, from
to the November 2016 US elections and further depreciated
around 14,600 in 1980 to 98,500 in 2015. In the 21st century
against the US dollar post-elections as newly elected President
so far, there have been 1.1 million Mexican deaths directly due
Donald Trump maintained his nationalistic rhetoric, much of it
to diabetes. This is a grave problem. We must ensure that
directed against Mexico. The dollar appreciated against many
the measures that appear to be effective are maintained. We
other currencies, including the euro, against which the peso
also must act to protect young children and teenagers. For
faltered, negatively impacting many European-based health
this reason, in May 2017 we began the Salud en tu Escuela
companies. As 2017 rolled out, the Mexican peso stabilized
(Health in your School) program, which will send doctors to
and saw its best quarter in decades. The health sector plans
over 1,700 primary and middle schools to talk about key health
for the long-term and most companies reported growth and
topics,” Narro says.
plans to continue investing in Mexico, despite their initial fears. “Teva has drawn up a list of countries with growth markets
The government’s measures include raising awareness
and Mexico is among those,” says Guillermo Ibarra, Director
through various publicity campaigns but it remains hampered
General of Teva Mexico, a unit of the world’s largest generics
by access issues with the public health system and a shrinking
company, which produces 120 billion tablets and capsules
government budget. With less money to spend, government
per year. “One of my jobs has been to internally sell Mexico to
institutions have placed a priority on generics, pressuring Big
our global headquarters. It is a country that has industrialized
Pharma companies. On the other side of the ledger, both the
greatly and is not reliant on commodities; it has steady
public and private spheres have penciled in clinical research
economic growth of around 2-2.5 percent per year, which
as a strategic segment that could provide a windfall to
in the long term makes Global want to continue investing
companies, government institutions and ultimately, patients.
in the country. We have invested many millions of dollars in
A FRACTURED SYSTEM
improving, updating and raising the bar for our plants.”
The theme of access to health remained a significant topic Aside from the economic headwinds that buffeted the
in 2016/2017. The many Mexicans working in the informal
sector before tailing off, two diseases loomed over the health
sector are denied access to the main public healthcare
industry: obesity and diabetes, both of which were declared
institutions and are obliged to pay out-of-pocket for
EXCHANGE RATES ON THE FIRST DAY OF THE MEXICAN PESO EXCHANGE RATESWORKING AT THE BEGINNING OFMONTH THE MONTH 3Q16 TO 4Q17
25
2016 20.36
21.04
21.02
21.71
2017 22.04 21.09
20
18.30
15
20.96 20.74
July
18.85
18.85
Aug
Sept
——US Dollar
19.32
Oct
21.89
20.73
Nov
19.95
20.77
20.49
20.87
19.90
19.13
Dec
Jan
——Euro
Source: Ministry of Economy
Peso to Dollar
22.43
Peso to Euro
Feb
March
18.73
18.77
18.59
April
May
June
MEXICO’S PHARMACEUTICAL MARKET treatment or use Seguro Popular. This encourages the
MEXICO'S PHARMACEUTICAL MARKET (US$ billion)
population to delay seeking diagnosis and treatment, as
3.3
many prefer to live in blissful ignorance of a condition than to have it formally diagnosed. Not beginning treatment causes diseases to worsen and the effects cost dearly. “In most countries, pharmaceuticals represent only 10
Generics
11.2
Total value
percent of the total cost of diabetes. If people can invest that first 10 percent or even a little more to get access to better products, a big part of the other 90 percent of costs
9
can hopefully be avoided. In Mexico, this is critical, because the system is now treating the complications of people that
Sources: BMI Research, Seale & Associates
began suffering from diabetes 15 years ago. Since then, the diabetic population has more than doubled,” says Yiannis
35 percent. Like glaucoma, macular degeneration must be
Mallis, Vice President and General Manager of Novo Nordisk
detected early because the impact is irreversible. Diabetic
Mexico, the market leader for diabetes pharmaceuticals.
retinopathy is common due to the big diabetes problem in Mexico and occurs in both T1D and T2D. It also requires
Faced with shrinking budgets, public institutions are
early diagnosis to stop the progression of problems in the
struggling to cover a larger number of patients who are
retina,” he says. However, the theme of access remains. To
increasingly suffering from preventable illnesses such as
carry out checkups and catch conditions and diseases early,
type 2 diabetes (T2D), obesity and the ensuing conditions
the population must have access to healthcare services.
from these diseases such as cardiac insufficiency. These are worsened by poor lifestyle habits such as a lack of
Amid belt-tightening, public-sector institutions are
exercise, smoking and alcohol consumption. Dealing with
stretching budgets to cover more people. The Seguro
the complications is keeping the hospital sector busy.
Popular, for instance, has started eliminating duplicate
While public institutions are bursting, private hospitals
registrations with other institutions. “We have cleaned
have capacity to spare. The two are working on a more
up our database and no longer have 9 million duplicate
efficient way of collaborating to alleviate the public sector
registrations. We will continue to work on this in 2017 and we
burden and improve access. Several PPPs were announced
expect to reflect this in a higher quality service for patients
during the year for the construction of hospitals, most of
because there will be more resources per policyholder.
which will be operated by ISSSTE. However, many argue
Seguro Popular has been sharing information with other
that increasing the number of hospitals is not the key to
health systems since 2016, a year in which we lowered the
improving the health of Mexicans. “Health is a process, not
number of policyholders by 3 million,” says Gabriel O’Shea,
a state. Health ranges from the complete state of physical
National Commissioner for Social Protection in Health of
and mental wellbeing as defined by the WHO, to a second
Seguro Popular.
before death, when health is basically lost. In between there are many states, some better than others. If people see
PRIVATE SECTOR UNDER PRESSURE
health this way, prevention can be put in place. We want to
Companies are also feeling the pressure to make their
promote education so that more people can take control of
products available to a larger proportion of the population.
their health. We must begin to build processes for healthy
Big Pharma companies are often the only producers of a
aging,” says Narro.
certain treatment and therefore have a responsibility to ensure it is as widespread as possible. In recent years, as the
This is vital with any disease but it is especially important
government tender process has consolidated and amplified,
for diabetes and cancer given their impact, related
budget requirements often mean generics are favored over
ailments and high number of sufferers, which big and small
patented brands and some brands have even been liberated in
companies have recognized. Janssen, part of giant Johnson
Mexico so that generics companies can create less expensive
& Johnson, for example, is working on early diagnosis
versions of the products. This has pushed some Big Pharma
methods for prostate cancer while young Mexican startup
companies out, and some have created their own generics
Higia Technologies is developing early detection methods
lines to remain competitive. “In 2016, the Mexican health
for breast cancer. Rogelio Villarreal, Director General of
industry saw one of its toughest years, achieving single-digit
Centro de Oftalmología Monterrey and Ojos Para México
growth in terms of value due to the introduction of new
Foundation, says the problem runs across many afflictions.
products and price increases,” says Raúl Camarena, General
“Although the prevalence of glaucoma is 5 percent at
Manager of Aspen Labs Mexico. Despite a difficult year, the
40, at 70 it is 18 percent and above that it rises to 30-
Mexican pharmaceutical market remains the second largest in
ANALYSIS NUMBER OF ELDERLY ADULTS PER 100
NUMBER OF ELDERLY ADULTS IN MEXICO (per 100 CHILDREN AND YOUTHS children and youths) 38
40 35
20
10
16
18.5
sector, Perrigo, is confident in the Mexican market. “Our operations. Not only do we share a very similar business
26.4
25
chains and retailers. The world’s largest company in this business in Mexico is extremely important to Perrigo’s global
30.9
30
branded generic products available from large pharmacy
model with the US branch of Perrigo but we service many
21.3
of the same strategic customers that have presence on both sides of the border. We have identified Mexico as
15
the country in Latin America with the greatest potential
10
for growth as the economic and demographic conditions
5
are very promising for our industry. We believe that each
0
day there will be more opportunities to develop significant 1990
1995
2000
2005
2010
2015
NAFTA,” says Ricardo Ganem, Vice President and General
AVERAGE AGE IN MEXICO
AVERAGE AGE IN MEXICO (years)
Manager of Perrigo Mexico. “Each retailer is different, with distinct formats and specific strategies. Our job is to work
30 26 25 21
22
27
24
with them in developing products and brands that best fit each of their strategies. Even smaller pharmacies have varying strategies. Some sell from behind a counter like
20
traditional pharmacies, whereas others are more like minisupermarkets where you could even buy groceries and
15
other convenience items. This is a model more often seen in the US but it is a growing trend in Mexico,” he adds.
10 5 0
supply-chain partnerships between our countries due to
Medical device manufacturers face some of the same issues as Big Pharma companies, as some devices have high price
1995
2000
2005
2010
2015
Source: INEGI
points and suffer if budgets remain too low to invest in new equipment. In addition, specialized devices are facing tough competition from more generic, cheaper and older models. “The prices are also low, so they are not sustainable
Latin America and among the top 15 worldwide, according to
in the long term. We can offer those prices for one year, but
KPMG. BMI Research reports that the Mexican pharmaceutical
not several years running, especially with the depreciation
market as a whole was worth US$11.2 billion in 2015, of which
of the Mexican peso against other currencies. This is not
Seale & Associates estimate US$3.3 billion was attributable to
sustainable and endangers quality,” said Martín Ferrari,
generics. Generics producers are keen to make sure their more
Director General of Dräger Mexico.
affordable alternatives are available in as many points of sale as possible. Releasing packets of innovative medicines so that
One method that can be used to find ways to improve
generics companies can create options and increase access
healthcare is Big Data. Although the collection of Big Data
has been one of the greatest weapons in the government’s
in healthcare has been slow in the past due to the lack of
plan to offer increased access. However, price pressures have
digitalization, with the penetration of smartphones and the
begun impacting companies that are unwilling or unable to
increased number of startups it is taking off in 2017 with
go as low as requested. “We hardly sell to the government
giants such as Grupo PLM, Google and even Facebook.
because it has adopted an aggressive price-reduction policy.
“Many healthcare organizations use incredibly sophisticated
This policy erodes income at companies like pharmaceuticals,
technology in diagnostics and treatment but substantial parts
which need to earn money to continue reinvesting in research.
of their workforce use only rudimentary or no technology.
For companies like us, selling to the government is not
Less than 20 percent of payments to healthcare providers and
viable. We have decided to only sell particular products to
their suppliers are done digitally, for example,” states a 2016
state hospitals, so 95 percent of our sales are to the private
McKinsey article in Harvard Business Review. These gaps are
market,” says Felipe Espinosa, CEO of Mexican pharmaceutical
huge opportunities to digitalize and implement Big Data tools
Laboratorios Collins.
in Mexico, as with the right push the country could leapfrog.
As a result, many companies have begun turning to the
TESTING … TESTING
private sector for growth, looking for other streams of
The first half of 2017 also saw a push for clinical research as
revenue such as manufacturing for private labels, the
the authorities stepped in to help make Mexico the clinical
research hub many have been predicting for years. “In
is a hot topic that requires care. We are a low-margin
January 2017, we signed an agreement to promote clinical
industry, so all additional costs immediately impact
research that simplifies processes and integrates them. To
our profitability. We need to be prudent about how we
meet all requirements and obtain all permits used to take
manage additional expenses, which, ideally, we should
365 days but we are reducing this to 45 days. Our goal is
not have. The health industry in Mexico is also a complex
to triple the investment in clinical research in Mexico and
and fragmented one that requires different skillsets.
we hope to see US$600 million over the next two years,
I truly believe that Mexico is one of the most complex
up from under US$200 million. An agreement has been
healthcare markets,” says José Alberto Peña, Director
reached with IMSS and ISSSTE will soon join the program.
General of Grupo Marzam, one of the country’s big four
We are working on another agreement with the national
wholesalers/distributors of the health sector.
11
health institutions and with UNAM. This will no doubt happen by the end of 2017,” says Julio Sánchez y Tépoz,
Then there is the black market and the issue of
Commissioner of COFEPRIS. Medicines that are released
counterfeit medicine. To render faking medicine less
by companies cannot be sold immediately in the Mexican
appealing, pharmaceuticals are enhancing security at
market, as regulation stipulates that they must undergo
their warehousing facilities, as well as working to provide
testing by COFEPRIS, in addition to the clinical trials they
security features on their packaging. Holograms, braille
underwent either in Mexico or elsewhere, to first ensure
and QR codes are just some of the methods used to prove
their safety and efficiency. The backlog COFEPRIS saw in
authenticity. The medical devices sector suffers less from
this area led the regulatory agency to create the authorized
counterfeiting but more from the illegal importation and
third-party figure which can perform testing on its behalf.
sale of devices that are not stored in adequate conditions
“Speeding up processes through authorized third parties
to ensure patient safety. Herbal products have also faced
helped make the regulatory procedures more efficient
shake-ups recently, with many being removed from sale
and thus increased the attractiveness of Mexico as an
after COFEPRIS inspection. Ensuring the authenticity of
investment destination for health,” says Geraldine Rangel,
claims on packaging has been a main goal for this sector.
Director General of Healthlinks, a Mexican firm that provides
However, IMSS has been looking into including herbal
market analysis to companies wishing to enter Mexico.
medicine, a Mexican tradition, as the public institution is in desperate need of safe, cost-effective alternatives.
SECURING PRODUCTS The flip side of improving access is maintaining security, a
LOOKING FORWARD
challenge logistics companies are up to. The distribution
Although challenges remain in the Mexican healthcare
of essential medicines in Mexico is complicated by the
system, there are also opportunities for companies to
tough geographical terrain and the uncertain security
bridge gaps, the most notable of which is set to remain
environment. Many employ distinct methods to prevent
access to healthcare as both sectors seek to increase
vehicle theft, such as using dual GPS to circumvent
treatment options for a growing number of people, at a
jammers, employing electromagnetic locks and distinct
price that does not break the bank. Companies will need to
route planning. “One of the greatest challenges we face
balance this with providing innovative solutions, as well as
is Mexico’s size, so we must ensure the provision ofan
ensuring they can be amplified to suit the needs of Mexico’s
effective, efficient and continuous service. Security
121 million inhabitants.
T2D, BREAST AND PROSTATE CANCER DEATHS IN MEXICO (thousands) DEATH IN MEXICO
60
98,521
94,029
89,469
85,055
80,788
80
82,964
100
0
2010
T2DT2D Prostate Cancer Source: INEGI
Prostate Cancer Breast Cancer
2011
2012
Breast Cancer
2014
2015
6,273
6,447
5,997
6,296
6,023 2013
5,548
5,613
5,911
5,222
5,666
5,508
20
5,062
40
VIEW FROM THE TOP
A 121 MILLION PEOPLE CHALLENGE JOSÉ NARRO Minister of Health of Mexico
12
Q: In 2016, you declared diabetes and obesity a crisis.
Young people are generally healthy, although they must
However, FUNSALUD’s José Campillo has said that rates
look after themselves. The elderly are another issue
are leveling off. Is this a success?
altogether: the idea of being ill frightens them. They
A: I cannot yet say that we have had success because the
prefer not to go for check-ups for fear some condition
population is not fully conscious about the dimension of the
will be discovered, but prevention is the name of the
problem. Secondly, although there has been a deceleration
game. We have to bet on prevention and this has to be
of the death rate, there is no decline. The number of deaths
cultivated from a young age. We used to think that a
due to diabetes multiplied by about seven times between
chubby child was happy and healthy but they must have
1980 and 2015, from around 14,600 in 1980 to 98,500 in
a healthy weight. We must all act.
2015. In the 21 century so far, there have been 1.1 million st
Mexican deaths directly due to diabetes. This is a grave
Q: Life expectancy is increasing. What challenges are
problem. We must ensure that the measures that appear
arising for healthcare as a result?
to be effective are maintained. We also must act to protect
A: Mexico’s population, like many around the world, is going
young children and teenagers. For this reason, in May 2017
through a demographic transition. Population pyramids
we began the Salud en tu Escuela (Health in your School)
have changed from 20 years ago when there was a strong
program, which will send doctors to over 1,700 primary and
base of young people. Now, the number of old people is
middle schools to talk about key health topics.
increasing. Forty-five years ago, the median age was 17.8. Now, it is 27, so we can say that the population is maturing.
Q: How do you control the various media campaigns
Children and the elderly are dependents and there are
aimed at children and what is the key to promoting
just over five million people aged over 70 but that figure
healthier habits?
will increase to over 17 million in 2050. Today, a regular
A: There is increased control over advertising campaigns
infection can be cured while chronic, nontransmissible,
that target children, such as for candy, food and drinks.
nonparasitic infections can be controlled. Health is a
I agree with President Peña Nieto that health begins at
process, not a state. Health ranges from the complete
home. It begins with topics such as hygiene, nutrition
state of physical and mental wellbeing as defined by the
and lifestyle. We need to work with parents because they
WHO, to a second before death, when health is basically
must understand that a child of four should not have food
lost. In between there are many states, some better than
portions equal to that of the father. School is the second-
others. If people see health this way, prevention can be
most important place where children develop good or
put in place. We want to promote education so that more
bad health habits. The Ministry of Health and the Ministry
people can take control of their health. We must begin to
of Public Education have an excellent relationship and the
build processes for healthy aging.
Education Reform will enable us to further improve this. Q: Pollution is an ongoing issue in Mexico that directly Q: How effective have public information campaigns been?
impacts health. What is the Ministry of Health doing in
A: There is an important link between public campaigns
this regard?
and health but we have to keep pushing. There have been
A: We have serious problems in Mexico City, but both
great marketing campaigns to raise social awareness in
local and federal governments are taking action. We now
this country. Going back several decades, there were
have much better ways of measuring pollution levels and
intelligent, wonderful campaigns that were strong for
better instruments to measure the impact that polluting
their time concerning reproductive health, family planning
particles have. Some actions taken include the restriction
and nutrition. We are continuing this tradition and in 2017
of vehicles and industrial activity, which limit mobility. The
our focus is on diabetes.
Environmental Commission of the Metropolis (CAMe) is a
coordinating mechanism that includes local, state and federal
Q: To what extent will the Ministry of Health be working
levels of government. President PeĂąa Nieto requested that
on reforming medical degrees for young doctors?
the commission includes the Ministry of Health.
A: We are working on a revision at the moment and in early May we attended the ANFEM assembly. The number
Q: What challenges arise in ensuring the continuity of
of schools, programs and students has increased greatly.
projects after the 2018 presidential elections?
The number of specialists, however, has not increased
A: There has been much done in terms of health over the
greatly, because there is neither need nor space for
past few years. Under the current government, maternal
a greater number to train as specialists. We have not
mortality has fallen by over 18 percent, infant mortality has
valued the role of the general practitioner. If there are
decreased by 6 percent, mortality due to accidents has
no positions for general doctors, how can they be hired?
also dropped and the frequency of dengue fever has been
There are organizational aspects of health that must be
reduced by two-thirds. In addition, there have been many
reviewed, so we must be clear. The reality of rural Mexico,
new medicines incorporated into the healthcare system.
where we need doctors, is not attractive to them. We
Since 1948, the change has been phenomenal. Infant
are speaking only of doctors but there are many other
mortality has decreased by over 90 percent. Back then, 132
professions in healthcare. The topic of human resources
of every 1,000 children died before their first birthday. Now,
is obviously central and so we are working on this.
the rate is 12 of every 1,000. This country has been lucky with public policy in several programs, otherwise we would not
Q: What are your priorities for 2017?
have been able to achieve what we have. A clear example is
A: Diabetes is one of our highest priorities, but it is difficult
vaccination. For over 40 years we have been dedicated to
to tell which is the most important because there are
vaccinating the population. There is no rubella or congenital
many, such as cancer and heart disease. When speaking
rubella in Mexico, we have controlled diphtheria and tetanus
of priorities, I often speak of diabetes because it generates
and neonatal tetanus has been eliminated.
the most deaths as a single cause. Cardiovascular disease may cause more deaths when grouped together, but the
Since 1974, there has been a program for family planning
causes are many and can be split into three main groups:
and now for reproductive health. Thanks to these
heart attacks, hypertension and others.
programs, Mexico has 121 million inhabitants instead of over 150 million. There has been an extremely successful
Another great issue is pregnancy in girls and teenagers.
campaign running since the 1980s to protect children
Children of 10-14 years old are having babies. There were
against diseases caused by dehydration. I trust that
400,000 births in 2015 and almost one in every five births
even with political changes, current health policies will
is to a teenage mother. The government has implemented
be maintained.
a national strategy aimed at preventing teenage pregnancies, which are often unwanted and unplanned.
Q: What is the Ministry of Health doing to spread its
The consequences are many: families are ruptured, studies
message on reproductive health to all of Mexico,
are abandoned, the young girl often has to work and often
including rural areas?
the father of the baby disappears and leaves her with the
A: We have to make the problems visible or they will
child or children. We have been working with different
not be solved. We are providing information and
structures since January 2015 on this strategy, which is
education and we must also provide services. In the rural
being coordinated by the National Council of Population
environment, we have two mechanisms to spread health
(CONAPO). Prevention and education are fundamental.
awareness, the first being state governments. Programs are defined nationally but implemented by the states.
Regarding cancer, the Chamber of Deputies and the Chamber of Senators in the Mexican Congress has
We must also ensure the service is available. IMSS-
approved the establishment of the National Register
Prospera, for example, has services for teenagers in
of Cancer, which will be a powerful tool for delineating
rural and indigenous environments. We must guarantee
public policies on how to allocate resources and where
that services to provide condoms, pills and other anti-
the focus should be. Cancer is the third highest cause of
contraceptive methods such as salpingo-ophorectomy
death in Mexico.
or a vasectomy can be offered. Some are more adequate for young people than others, but for someone that has already had many children, one of these methods may
Dr. JosĂŠ Narro is a surgeon from the Faculty of Medicine at
be more appropriate. We must guarantee access to
UNAM, with a master's in communitarian medicine from the
information and to these services for all so that people
University of Birmingham, England. Narro was head of UNAM
can make their own, informed decisions.
from 2007 to 2015 and in 2016 was named Minister of Health
13
VIEW FROM THE TOP
DYNAMIC CHANGES PROPEL MEXICO TO WORLD STAGE JULIO SÁNCHEZ Y TÉPOZ Commissioner of COFEPRIS
14
Q: What are the most important advances COFEPRIS has
working on this idea around two years ago with the aim
made in the past year?
of closing the knowledge gap because knowledge is not
A: We have made great strides on ethics and transparency,
shared in the pharmaceutical sector. Those that have money,
we have become an institution that is much closer to
like large companies with the capacities to invest in R&D,
citizens and we have put 10 catalogues of open data at
do so in specific areas. But there is a gigantic difference
their disposal. These are registers of licenses, permissions
between the amount of R&D that goes on in developed
and other types of information that was previously
countries compared to less developed economies. A first
requested of us. We have also installed a telephone
gap is created here. A second gap occurs because of the
service that receives 16,000 calls per month.
difference in technical knowledge. They want to protect knowledge and for this reason it is not transmitted. Secondly,
COFEPRIS regularly removes patents from groups of
knowledge only reaches those countries that collaborate and
medicines to allow for the production of generics. In 2016,
that offer assurances.
we released Group #14 because in February 2016 there was an issue with influenza and the active substance to treat
As an example, it is doubtful that Brazilian research
it, oseltamivir, was only produced by one laboratory and
centers share their knowledge quickly, efficiently and
manufactured in Switzerland. In May 2016, we liberated
transparently with Nigeria because standards are
Group #14 and there are now three generics available for
asymmetrical. We need to improve the flow so that
oseltamivir. In total, 37 active substances have been liberated
every country can benefit quickly and efficiently from
through our generics strategy, producing 491 generics, which
knowledge. We aim to contribute to reducing these gaps
represent MX$25 billion (US$1.4 billion) in savings while an
as much as possible through a center of excellence. This
extra two million people can be treated thanks to these
was an idea of the WHO and APEC and they should
savings. In 2017, we will continue with this strategy and more
compile information and generate joint public and private
than 40 new molecule authorizations will be announced. Last
actions so that knowledge can be shared. Our center has
year, Mexico was named Vice President of the International
several research and training projects underway in areas
Coalition of Medicines Regulatory Authorities (ICMRA), an
in which it is difficult to find an expert. There are few other
international association that unites the 14 most important
centers but those that exist are linked. Japan, the US and
regulatory agencies, for two years. We are a leader due to
Brazil each have one.
our generics strategy, innovation, reduced processing times for protocols and special pathways for administrative forms,
Q: According to ProMéxico, Mexico carries out only 1
which can now be obtained in 15 days instead of two years
percent of global clinical trials. How will you boost this
as it was five years ago.
number? A: In January 2017, we signed an agreement to promote
Q: How is COFEPRIS working on bringing more knowledge
clinical research that simplifies processes and integrates
to Mexico?
them. To meet all requirements and obtain all permits
A: One of the most important themes internationally is the
used to take 365 days but we are reducing this to 45 days.
creation of the COFEPRIS Center of Excellence. We began
Our goal is to triple the investment in clinical research in Mexico and we hope to see US$600 million over the next two years, up from under US$200 million. An agreement
The Federal Commission for the Protection against Sanitary
has been reached with IMSS and ISSSTE will soon join the
Risks (COFEPRIS) is a regulating authority responsible for 44
program. We are working on another agreement with the
cents of every peso spent by Mexican households, 9.8 percent
national health institutions and with UNAM. This will no
of GDP and 10.9 percent of foreign trade
doubt happen by the end of 2017.
Q: How do you evaluate which areas should be the main
A: My mandate is to protect public health. If I had one
focus for sanitary authorities?
dream for 2017 it would be for the population to be closer
A: We evaluate which conditions have the greatest
to us, to consult us, to give us a chance and to call us. It
prevalence in Mexico through reports such as ENSANUT,
would be wonderful if before citizens took a decision of any
which was released in late 2016 and covers NCDs. We
kind, they first looked after themselves and consulted us.
use these results to assign resources and generate
To ensure this message reaches all of Mexico, we have an
biotechnology to solve the most prevalent health
amazing program called Seis Pasos de la Salud (Six Steps
problems in Mexico. We were the first country in the
of Health) that is translated into 17 indigenous languages.
world to authorize the dengue vaccine and we are in
It will see a new component with the Ministry of Public
the process of establishing a protocol for its application.
Education through which we will soon reach schools.
Q: What results have you seen and what do you expect from the new pharmacovigilance NOM?
COFEPRIS REGULATES
COFEPRIS RESULTS (2012-2016)
44¢
152.4 million vaccines
A: NOM-220, which was published in March 2017, represents a paradigm shift. It implies that many more players are responsible for pharmacovigilance: the patient, the doctor, the laboratory, the pharmacy and the distributor. This change generates more reports that help COFEPRIS to provide a more punctual and strategic follow-up on the effects and quality of these medicines. With few reports, all we can do is check manufacturing plants but with pharmacovigilance we have more information and this propels change.
of every peso spent in Mexican households
approved and analyzed to ensure their quality in the National System of Vaccination
Q: What process does the commission use to identify areas of overregulation and resolve them?
+250 innovators
A: We will be working on the third phase of deregulation of medical devices and we are considering removing regulation from 10 percent of the devices currently on the market, perhaps more. This has been presented in international forums where we have been identified as innovators. We base our decision on analyses of sanitary risks. Scientific advances in medical devices means that the
9.8%
74%
of gross domestic product
cheaper than in the US
21
therapeutic areas covered
sanitary risks are lowered or eliminated as faster and more effective solutions are discovered. The sanitary risk
+6,300 medical devices
of technology in medical treatment and medical devices changes depending on technological advances and the same happens with medicine. There are combinations that do not generate increased secondary side-effects. Another element is that we realize that there are delayed administrative processes. We are digitalizing processes to
10.9%
2,242
of Mexican trade
deregulated devices
6,307
new registrations
avoid unnecessary costs in transport, paperwork and time. This is part of COFEPRIS Digital, implemented in December 2016, which has taken 99 forms and administrative processes online. With the extra 50 that we are adding,
+500 generics 42
1,998,202
additional patients treated
we will save 600 tons of paper in a year. All these simplified processes will help bring us closer to citizens and to provide a much more agile service. In addition to being based on reviews, we also perform an audit biyearly, one of which is focused on our internal quality-management system. Q: What is the single most important area COFEPRIS will be focusing on in 2017?
41 40
61%
price reduction 2012
2014
% of out-of-pocket expenditure of total health spending Source: COFEPRIS
71%
of mortality causes covered
15
VIEW FROM THE TOP
SIMPLIFIED REGISTRATION BOOSTS MEXICO PHARMA MARKET RAFAEL GUAL Director General of CANIFARMA
16
Q: How has the pharmaceutical industry evolved in the
those countries. Existing regulations and laws in Mexico are
past two years?
not insufficient; all that is lacking is evidence that they are
A: I think it has evolved well and regulation has continued to
being followed. Having them written is one thing, ensuring
advance. The structure of registration has been simplified so
compliance is another. The recognition from the WHO and
that time targets set out in the law are met for any process
PAHO of Mexico in terms of vaccines provides certainty that
involving the sanitary authorities. This is an important advance
the role is being fulfilled. COFEPRIS has to report evidence
that has allowed the pharmaceutical industry to be more
of verifications and certainty of reports. Tracking may be
competitive in Mexico and in international markets. Being
different in the US and Europe, but we are still missing an
recognized as a regulatory agency has allowed COFEPRIS
agreement with the FDA and the EMA on a bi-dimensional
to be much more agile in registering products in Central and
code that can be applied worldwide.
South America. Q: What advantages does Mexico present for clinical In terms of R&D, we have authorized a series of third parties
research, other than its large population?
to be much faster in clinical authorizations, which will allow
A: In Mexico, most R&D is carried out in private centers. The
Mexico to become a center of clinical research. In economic
main issue is researchers being paid to carry out the studies.
terms, the market has maintained 3-4 percent yearly growth
There is a promising environment in IMSS to incentivize
over the past decade, a rate that will probably not increase as
clinical research in Mexico, sponsored by the industry as
the market is mature and grows in line with the population. The
there were issues with IP. This has been changed. Previously,
export market has grown in double digits and will continue
if IMSS found a second use then the IP belonged to the
to do so thanks to COFEPRIS, which has been recognized as
agency. But an agreement has been reached so that the
a national regulatory reference agency in Central and South
IP does indeed belong to the industry sponsoring the
America. Companies have this advantage in addition to GMPs.
research. The advantage is that there are 50 million patients
Thanks to economies of scale, the Mexican economy is more
in IMSS with varying stages of disease because in Mexico
competitive and can export to these other regions.
there is no culture of prevention, which means diseases are available for study at advanced stages that may be hard to
Q: How has the new pharmacovigilance NOM affected
find in other countries.
companies and how easy or difficult is it for companies to adapt to it?
Q: What other steps are being taken to boost clinical
A: The new norm offers patients security and provides faster
research in Mexico?
product registration. If a drug does not have any reports
A: IMSS, COFEPRIS and CANIFARMA are on the verge
of major adverse effects caused by the pharmacovigilance
of signing a contract to facilitate the path to clinical
NOM, then registration can be renewed quickly. The NOM
research. During our CANIFARMA Awards 2016 we
also commits other parties such as doctors and patients to
announced that a research fair would be held during
reporting adverse effects. It is no longer the sole responsibility
which companies will be able to have direct contact
of the industry. It will cost the industry more but we think
with the companies that won the awards in 2016 and
we will reach an agreement with the authorities on what is
2015, to allow the research to be taken to market. Julio
necessary and what is desirable.
SĂĄnchez, Commissioner of COFEPRIS, has announced he will support this with a certificate and the research
Q: How is CANIFARMA helping the industry homogenize
will be followed by COFEPRIS from the beginning. This
its regulation with the FDA and EMA?
will contribute to further improving the relationship with
A: They are already homogenized. There is not much
the industry. Brazil and Argentina are Mexico’s biggest
difference between the regulation that exists in Mexico and
competitors in clinical research in the region. The fact
that we have a large number of patients to register in a
Q: What area will you focus on in the future?
clinical trial aids our competitiveness worldwide. Mexico
A: Previously, a product had to be registered every five
can increase patient numbers greatly if we make the most
years. We are working on a scheme that will allow changes
of IMSS. Brazil and Argentina are more agile.
in a product to be recorded before its five years are up, as the current process created bottlenecks at the end of
Q: What are the biggest challenges in the human pharma
five years. Many products are modified slightly and this
industry?
will allow companies to reregister it as soon as it happens.
A: We need to become an important center for clinical research because its potential is underused and we have to consolidate COFEPRIS’ recognition to open new markets for the industry. There is great quality in the products manufactured in Mexico and they are competitive. In addition, we need to continue consolidating regulations. I would add access, which is one of the main issues in the country, including new technologies which, despite having a greater cost, can bring increased benefits to the population.
CANIFARMA ACHEIVEMENTS Two new NOMs established: NOM - 059 for GMPs for medicinal products and NOM - 164 for GMPs for pharmaceutical products
Changed regulation on advertising
We need to facilitate this access in IMSS, ISSSTE, CSG and the National Formulary and I personally believe that opening clinical research in IMSS will facilitate the inclusion of new technologies, because having done the trials will shed light on the benefits they can provide in comparison
Established an institutional relationship with COFECE
2013-2018 development program for the pharmaceutical industry - results so far
Processing times shortened
NOM - 241 on GMPs was revised for medical devices
to current medicine. Q: What are the biggest challenges in the veterinary
Created the CANIFARMA Award to encourage research on the most significant causes of mortality
pharmaceutical industry?
JOBS CREATED BY COMPANIES AFFILIATED TO CANIFARMA (thousands)
A: They are extremely different. First, because there is no animal social-security system and there is no worry of incorporating new technologies. Challenges are more
the Mexican market. There are many multinationals here that are growing. The main issue is the topic of pure salts in food mixes. If a farmer administers pure salts instead of the correct medication it will cause problems. There are also issues with antibiotic resistance due to residue in food. There is no pure clenbuterol medicine for example, only
MX$200 billion
250 200
is the current value market of the Mexican pharmaceutical industry
150 100
79,000
as the market has been conservative in worrying only about
300,000
300
related to competitivity and access to international markets,
50 0
Direct
Indirect
medicine that contains traces of it. Sadly, we do not have the muscle in Mexico to create a regulation around this. Q: What role do you play in investigations such as that of COFECE? A: We give COFECE the information it requests but we do not have a proactive role. We clarify the panorama of the pharma industry. There are topics such as prices that
50%
of CANIFARMA employees have higher education degrees
are forbidden for discussion during any of the chamber’s meetings. In every act it says that it is forbidden to exchange
The market has maintained 3 to 4 percent yearly growth over the past decade
commercial information. This legally binds the chamber and its members to avoid these issues, so we provide requested
Sources: COFEPRIS, CANIFARMA
information. We are asked for example why all expired patented products do not have generic alternatives. It may not be commercially viable, it may be a difficult product to
The National Chamber of the Pharmaceutical Industry
create or the ingredient source may be unique, and this is a
(CANIFARMA) works toward developing the industry in Mexico
worldwide condition. If the patented product is interesting
with three main objectives: sanitary regulation, research and
enough for a generic to exist, it will.
innovation and economic development and industry policies
17
VIEW FROM THE TOP
COLLABORATE TO INNOVATE CRISTÓBAL THOMPSON Executive Director of AMIIF
18
Q: Research, development and innovation are AMIIF’s top
epidemiological impact of the main therapeutic areas to be
three core values. Which is the most important for 2017?
prioritized in this project (potentially: diabetes, cancer and
A: Innovation is always at the top of the agenda. It is the
cardio-vascular diseases). The objective of the second group
reason why we exist and we have been working on this. The
is to analyze new performance indicators and criteria to align
goal of AMIIF’s 2024 vision, its midterm plan for innovation,
patients and institutional needs in said therapeutic areas.
is to contribute to improving Mexico’s productivity and
The third group is a legal team discussing how and when the
competitiveness through pharmaceutical innovation. That
government could be able to implement innovative access
is our key goal. As President Peña Nieto has said, we are
models, aligned with the proper legal framework. Financial
experiencing a renaissance for innovation. For example,
and legal experts and doctors also attend these meetings.
hepatitis C products, which have a 95 percent rate of cure, have just been approved for inclusion in the public health
We are also looking at how we can bring in more resources
system, which is an incredible breakthrough. There are new
via clinical research. In January 2017, there was an agreement
treatments in HIV and patients are living almost as long as
made between all parties with President Peña Nieto present.
nonpatients and with minimum side-effects. There are also
Its objective is to increase investment in the sector from
new innovations in cancer treatments.
around US$250 million to above US$600 million. A meeting in early May 2017 brought together COFEPRIS, IMSS, ISSSTE, the
The objective of the agreement is to increase annual investment in clinical research from around US$250 million to above US$600 million
decentralized institutions, ProMéxico, the Ministry of Economy, SAT, Customs and the industry. We will have monthly meetings to provide updates on each area, understanding that by the end of 2017 we should have a better process for getting protocols approved to bolster the amount of funds coming into Mexico. A pillar of increasing access to innovation is to make understood its potential impact on productivity and competitiveness. Last year, we presented a study with the automotive industry in Guanajuato, which tried to show the impact of lost productivity on a sector. In the case of the auto industry, the impact of lost value was around 7.3 percent of the industry’s value, of which 1.3 percent was absenteeism and
One issue for pharmaceutical innovation is how to finance
6 percent was due to presenteeism. We are close to the big
it. We sat down with IMSS and now we have three teams
employers such as the Business Coordinating Council (CCE),
working with the institution to establish innovative access
COPARMEX and CONCAMIN to make sure that everyone has
models based on patient health outcomes. The project
a voice in making sure our health system, social security and
began between February and March 2017. Our first group
Seguro Popular deliver a better job.
is working on the analysis of the cost to the system and the Q: How much awareness remains to be raised among governors? Research
A: At the beginning of May 2017, Dr. Narro, Minister of Health,
Industries (AMIIF) encompasses over 40 of the leading
attended our board meeting for the first time. He said that
pharmaceutical and biotechnological research companies in
health and education are the two highest social equalizers. At
Mexico and aims to promote innovation in the health sector
the federal level, we have done a great job and awareness is
The
Mexican
Association
of
Pharmaceutical
19
Hemophilia research
higher than it was three years ago. Having said this, budgets
A: We hear a different version every day, from modernization
were cut last year, showing that although there is awareness,
of NAFTA, which is something we want and that the
this does not correspond to action yet.
government is clear about in its position, to removing it completely. Although we do not know what will happen, we
At the governor’s level, we have to improve awareness.
are prepared for various scenarios. The chairman of GE was
Investment must be holistic: people must be healthy and with
here in May 2017. He made it clear that NAFTA was very good
a good level of education. They must have infrastructure and
and he said that the big employers need to start speaking up.
public services, but there must be a good health system too.
I think they will start coming out and saying that yes there
We have been asked by the Ministry of Economy to undertake
are areas for improvement but overall commerce is highly
another study like the one we did in Guanajuato, a state that
integrated. How can it be disintegrated? Impossible. The
is growing at 6-7 percent per year. If employment continues
companies here have been present for many years and they
to grow but the health system does not keep pace, there will
will not go back. It the treaty collapses, we will not see major
be a bottleneck, a problem of too much success too quickly
issues, unless a tax is imposed on imported products, but
but with a gap in these kinds of public services for workers
we do not think that will happen. Overall, NAFTA has been
and their families. Again, investment usually goes to places
beneficial for all three countries and I am sure renegotiation
with good infrastructure. If this is not addressed, there will be
will center on optimization and on areas that did not exist
limitations in economic development.
when it began, such as e-commerce.
In May 2017, Mikel Arriola, Director General of the IMSS,
Q: How does the Accelerated Access initiative decided in the
announced tests in Nuevo Leon in which IMSS would follow
WEF in Davos this year complement AMIIF’s 2024 vision?
up on company employees to see who was at high risk and
A: This is a huge initiative. Top pharmaceutical companies are
to begin taking preventive measures early on. The more
joining together to develop a common framework that will
information we can give the government, the better.
help patients and countries battling NCDs in low and middle income countries. The industry is talking about looking for
Access to innovation is low, as only 10 percent of innovative
a full, holistic approach to the health system, trying to find
medicines approved by COFEPRIS are in the public health
ways to make overall improvements and enabling medicines
institutions. Early diagnosis and secondary prevention is much
to patients. For example, 300 billion units of medicine
less expensive than waiting five years for patients to get out
are donated every year to Africa, but it lacks distribution
of control. Then, by the time you give them innovation, the
infrastructure. What we are implementing in Mexico is already
cost will still be too high. In Guanajuato, we asked companies
a step ahead of what my colleagues in other countries tell me.
what they were given from the government: land and tax incentives. They did not think to ask about health. Getting
Q: What will AMIIF focus on in 2017?
the big employers onboard is a big part of the agenda and
A: Our main focus is how we can grant greater access to more
this will resonate when we hold events. Investment will come
patients. We will be finalizing steps to attract more investment
but states have to look at how to maximize that investment.
to clinical research, to keep working with COFEPRIS to continue improving timings and processes for approvals of
Q: A renegotiation of NAFTA is likely. What will AMIIF’s top
new molecules and finally to maintain the current standards
priorities be?
of IP protection.
VIEW FROM THE TOP
PROMOTING THE MEDICAL DEVICES SECTOR EDGAR ROMERO President of AMID
20
Q: AMID was created to eliminate “regulatory challenges”
two or three years and the evaluation system for new
in the industry. What are the biggest problems?
products is not used to working with such short time
A: AMID was indeed created for regulatory reasons to
frames. Medical devices account for 70-80 percent of
bring products to Mexico. COFEPRIS was the main focus
sanitary registrations in Mexico. How to evaluate them
of our efforts for around eight years. Our agenda is now
and the cost/benefit over time is a new challenge for any
broader and our main focus is access: how to collaborate
government, including Germany and the US. The main
with authorities to gain advances for patients and be a
challenge is bringing these devices to the country.
more productive country based on investment in health. We also have an ethics and compliance committee because
Q: What is the impact of the black market, which is
we must ensure these practices are the best they could
usually associated with pharmaceuticals, on medical
possibly be in Mexico while trying to establish the same
devices companies?
rules as in Europe and the US. We are also working against
A: The impact of the black market may not be as large
the black market. We want products to be controlled and
in medical devices as in pharma but there are medical
traced from the point they leave the manufacturing site to
devices that cross borders illegally without the proper
the point they are implanted in a patient. Finally, we are
temperature controls and distribution procedures.
working on being known as a reference in healthcare in
Appropriate techno-vigilance needs to be implemented.
the same way as the pharma industry.
It is not that devices are copied like in other industries; for example, many are bought abroad and brought
Medical devices account for 70-80 percent of sanitary registrations in Mexico
across the border without the correct quality protocol and temperature control, or a hospital may throw away devices and they are fished out from the trash. We have an agreement with COFEPRIS: if we find out about the sale of illegal products, they act immediately to remove them from the market. Q: How are AMID members impacted by COFEPRIS’ deregulation of medical devices?
Q: How have medical device trends evolved since 2015?
A: We have always had good channels of communication
A: Products now have a shorter innovation cycle than 15-
with COFEPRIS, but in 2016 and 2017 AMID planned a
20 years ago. There is an increasing number of players
full schedule with them. They are working on the third
with new technological processes, including Big Data.
package of deregulated medical devices. The first came
Consequently, the government faces the challenge of how
through in 2011 and the second in 2014. This deregulation
to evaluate them and ensure that the most innovative
is simply recognizing that certain products used in medical
medical devices reach patients. Now, from releasing a
practice are not medical devices and as such should not
product to releasing its next generation, there are only
be regulated by COFEPRIS. There are some companies that are part of AMID that commercialize these products, but they are merely components of medical devices per
The Mexican Association of Innovative Industries of Medical
se. This causes a problem as the number of devices in
Devices (AMID) aims to promote efficient and transparent
the market is multiplied by the number of side products
regulatory and procurement processes and to ensure safety,
that are produced. COFEPRIS was saturated by regulating
quality and effectiveness of solutions in healthcare services
these products they never needed to. These deregulation
packages are a list we share with the authorities of these
designed before the corresponding regulation. At this
accessories that can be deregulated. We are responsible
moment, the challenge is how to evaluate innovation
for 80 percent of COFEPRIS’ sanitary registers and as
faster. We are behind when compared to similar countries
innovation cycles decrease, their workload increases.
such as Colombia, Chile, Brazil and Argentina.
Deregulating these items is good because COFEPRIS can use its time to check true technological innovations
Q: How are global economic conditions impacting
instead of regulating these other products. This will
imports and exports of medical devices?
increase investment in innovation because less time
A: Since the Mexican peso depreciated against the dollar,
needs to be spent on other things.
it has been an industrywide worry but companies plan on a long-term basis. The peso appreciated against the
Q: What regulatory points are you lobbying for to
dollar in the first three months of 2017, strengthening
improve access?
from MX$22 to the dollar to MX$19. There has been an
A: The toughest part of gaining access is going through
impact on profitability but we need to think long-term
the CSG. We are asking them to make their processes
and see this trend through. No company has shown
simpler and to implement the most adequate rules
genuine concern or considered leaving the country.
possible for medical devices as the current rules were designed for pharma. If we followed pharma’s rules,
AMID associates are projecting growth above 9 percent
we would have to innovate at the same rhythm as that
in sales during 2017 and expectations for 2018 remain in
industry, which is much slower. We have been working
a good health. In addition, AMID is ensuring its presence
with the CSG since 2016 and we have just begun our first
in free-trade negotiations such as NAFTA. We are
efforts with the IMSS on a process level. They have the
being present as an industry to ensure the continuation
ability to define whether or not a product will reach a
of adequate conditions. We generate US$8 billion in
patient through public hospitals. We are looking at how
medical devices exports but we export 92 percent of
we can help make this process faster.
that to the US. The medical-devices sector is considered an emerging economic area for Mexico, along with IT and
Of the three stages of approval (COFEPRIS, CSG and the
pharmaceuticals.
institution), CSG is always the hardest for us. The process can take up to four years, while an ideal process takes
Q: What will be AMID’s main focus for 2017?
two to three years. We want to implement this time frame
A: During the second half of my presidency, we will
for everyone, regardless of their product, and we want to
focus on finishing our work with the CSG to improve
make the approval process predictable so that everyone
patient access to medical devices for better diagnostics,
follows the same steps. This is an additional challenge.
treatment, prognosis and the patient’s quality of life.
If the innovation cycle shortens but approval still takes
AMID will also continue promoting ethics and compliance
the same amount of time, it becomes unprofitable to
in the healthcare industry. We grew from 23 to 30
create new products; by the time a product is approved
companies last year thanks to a broader agenda and we
a second generation is already available, so we have to
now run several agenda items in parallel, which enables
try and gain general approval. In summary, innovation is
us to get more done.
21
VIEW FROM THE TOP
DIABETES AND OBESITY: HEALTHCARE PRIORITIES JOSÉ CAMPILLO Executive President of FUNSALUD
22
Q: In 2016, FUNSALUD established diabetes, breast
prevalence to increase. FUNSALUD has corroborated this
cancer, obesity and mental illnesses as priorities. Have
number with its own studies. In 2013, we estimated that
these changed in 2017?
the cost of diabetes would be MX$362 billion (US$20.1
A: Our priorities remain the same because these
billion) per year or 2.3 percent of national GDP. This figure
conditions have a high incidence and involve a great cost
will continue to grow and there may come a time when
to society and the country’s finances. At the end of 2016,
the public sector does not have the economic, technical
Minister of Health José Narro declared diabetes a health
and human resources capacity to deal with this tsunami.
emergency. It was an atypical statement because there was intention to take drastic action but only to emphasize
Q: Which countries can Mexico look to for a way to
that diabetes is a serious national public health problem.
attack this epidemic?
At the end of 2016, the ENSANUT survey was released.
A: Chile and Costa Rica are seeing good results, although
It measures obesity, overweight and diabetes prevalence
the comparison in terms of population is different.
among the Mexican population. In some segments, which
European countries like the UK also have good models.
vary between urban and rural communities, rates begin
However, we are seeing the problem in all countries,
to stagnate rather than continue shooting upward.
which is due to urbanization, lifestyle changes and
However, there is another hypothesis: we are reaching
consumption habits. I think Mexico, the country with the
saturation levels where things cannot get any worse. In
highest obesity rate after the US, could be the place to
2017, emphasis should be placed on the prevention of
experiment with immediate action. One action should
diabetes and its complications. Data from this survey
be to increase clinical research, especially for economic
show there has been a 175 percent increase in diabetic
reasons. It is a gigantic global market in which Mexico
foot amputations.
does not even reach 0.1 percent and needs to be improved. Mikel Arriola, Director of IMSS, is convinced
Q: Are citizens more aware now than before of this type
of this. The industry is also ready and COFEPRIS is at
of complication?
the best moment in its history, with great international
A: I do not think the population has that information and
recognition. Mexico can be an important crucible to start
if it does, it has not resulted in a lifestyle change. This
doing scientific research on diabetes that provides us a
is the main challenge of a problem that is multifactorial
favorable cost/benefit ratio. In 2017, it would be desirable
and that depends not only on food but on life habits. A
for the Ministry of Health to take the lead to carry out a
change in the population’s mentality is required.
concerted policy with the Ministry of Economy and the Presidency of the Republic. Ties with the industry exist
Q: The IMSS estimates that in the next 35 years the
thanks to the great work carried out by COFEPRIS.
number of patients with diabetes in the country will double. Do you agree?
Q: What has changed in the last 12 months in relation
A: There are many possibilities. In addition to the 6.5
to conditions such as breast cancer or mental illness?
million diabetics diagnosed it is thought there is almost
A: The capacity of care for these diseases has increased.
the same number undiagnosed, so the logical thing is for
However, budgetary or political considerations have meant that these are no longer priorities for the federal government. In terms of breast cancer, much progress
The Mexican Foundation for Health (FUNSALUD) is a private
has been made in perception and detection. The
institution that aims to contribute to the improvement of
pharmaceutical industry is shielded from any political
health in Mexico by being a reference point for the discussion
aggression by the current president of the US and the
of the health agenda
Ministry of Health is at the core of the solution. By
23
The Pulmovista 500, an electrical impedance tomography system performing respiratory monitoring
improving the health of the working population, great
everything, appears in none of them. It is an element
savings will be made.
that is systematically forgotten but without a healthy population there can be no healthy economy. The priority
Q: Universal access to health is a goal of FUNSALUD.
for 2017 should be to place health at the heart of any
How is the Ministry of Health working toward that goal?
strategy, which is not easy.
A: Universality is not a utopia but an obligation. Family wealth should not be affected by healthcare. It is an
Q: To what extent are doctor ’s consultancies in
inalienable universal right that cannot be postponed.
pharmacies a solution or an externalization of the
The conditions of the country in 2017, and perhaps for
problem of health access?
the next five years, are going to be very adverse, so we
A: Their existence tells us many things. It is a phenomenon
have to rethink proposals to reinterpret the reality and
that appeared spontaneously to solve problems that
be precise in our aspirations. The most important part is
should have been resolved by the government. However,
to ensure prevention and first-level care. One of the main
waiting times are shorter and care is personalized,
problems is that the model we followed was seen from
inexpensive and close. They are a tool that depends on
the perspective of the disease and not from health; we
us to make them favorable or harmful. There are about
have been curing and not conserving health. We need a
15,000 offices and they must be taken into account.
policy of prevention.
Now, ethical principles have to be established as well as a register of patients and greater communication, among
Q: How will budget cuts affect the goal of achieving
other elements. FUNSALUD wants to make a substantive
universal access to health?
proposal in this regard in 2017 in which we will try to
A: Recently, an agreement for the protection of the family
bring together government, academia and industry to
economy was signed and four strategies were proposed
conclude a document in 2018. Emphasis should be placed
but the health sector, which should be the beginning of
on the first level of care.
INSIGHT
FIGHTING HIV EPIDEMIC MEANS FIGHTING DIVERSITY 24
Patricia Uribe Director General of CENSIDA
Carlos Magis Integral Care Director of CENSIDA
The concentrated nature of the HIV epidemic in Mexico
“There is a challenge for Mexico and other Latin American
creates unique challenges for the agency tasked with
countries that have concentrated epidemics,” she says.
eradicating the disease, the National Center for Prevention
“We must develop different approaches for each group
and Control of HIV and AIDS (CENSIDA). While the country
and control all of them at the same time. It is easier to
continues to mark milestones in control and treatment, the
fight generalized epidemics because we can offer a blanket
disease's 'very diversity hinders progress.
service to the entire population.”
“The infection has different dynamics depending on
According to CENSIDA statistics, one out of every 1,500
every state’s heterogeneity and social habits,” says Carlos
women lives with HIV. Other affected groups include
Magis, Integral Care Director of CENSIDA. This diversity is
0.07 percent of pregnant women, 15 percent of men who
a wakeup call for health institutions because even though
have sex with men, 18 percent of transgender people and
it seems to be generally in control, there are concerns
6 percent of people who inject themselves with drugs.
in specific areas.
Two years ago, CENSIDA started developing a National Detection Campaign in alliance with civil organizations with
CENSIDA has three main objectives: eradicate perinatal
the objective of reducing the number of people infected
HIV, control HIV via sexual transmission and reduce new
with HIV. “We are one of the areas of the Ministry of Health
infections through intravenous drug use. The institution
that works the most with civil society, as well as working
has implemented plans for each type of transmission. The
with hospitals and managing the treatment of the majority
center is the main governing body for the management
of the patients in the country,” says Magis.
of the epidemic in Mexico and is in charge of providing treatment to patients. According to the institution, in
The institution is in charge of purchasing and distributing
Mexico HIV blood transmission is eradicated and perinatal
drugs for 66 percent of patients with HIV and it receives
transmission is almost eliminated. Health institutions
MX$3 billion (US$166 million) every year from the Fund
have also reached 63 percent detection, a reduction in
for Prevention of Catastrophic Expenses (FPGC) to buy
new infections and they are close to achieving UNAids’
medication. There are 138 Prevention and Attention Clinics
treatment goal of 90 percent by 2020.
for AIDS and Sexually Transmitted Infections (CAPASITS) across the country that provide treatment to 85,000
There are 138 Prevention and Attention Clinics for AIDS and Sexually Transmitted Infections (CAPASITS) across the country
patients who are living with HIV but who do not have social security. CENSIDA finances the social projects awarded in the tenders, which cost around MX$100 million (US$5.6 million) per year to improve HIV detection and prevention among key populations. In an effort to eliminate the HIV epidemic, UNAids declared a 90-90-90 treatment target by 2020: 90 percent diagnosis, 90 percent treatment and 90 percent viral suppression. Regarding perinatal transmission, healthcare institutions
Patricia Uribe, Director General of CENSIDA, says Mexico
began offering the HIV test to every pregnant woman, which
has a concentrated incidence among certain social groups:
has helped reduce newborn transmissions to 46 percent. In
gay men and other men who have sex with men (SMS),
2015 there were only 71 cases but the aspiration is to follow
transgender people, sex workers and their clients, prisoners,
in Cuba’s footsteps as the only country in Latin America
migrants and people who inject themselves with drugs.
that has successfully eradicated perinatal transmission. The
challenge is in targeting states with more women. “It is an issue in states that are demographically more female
MEXICO'S CENSIDA PROGRESS ON MEETING THE UNAIDS 2020 GOAL (thousands)
such as Chiapas, Guerrero or Veracruz, while in Morelos estimated total of people with HIV by 2015
eradication was accomplished in 2011,” says Magis. In terms of sexual transmission, Uribe says this is one of
diagnosed
the biggest challenges as many people do not use or have access to effective prevention methods and comprehensive in treatment
harm-reduction services. CENSIDA has created campaigns against sexual transmission with different focuses
25
depending on the social group. “Our most critical are
viral supression
teenagers because they are becoming sexually active and they do not have all the information they need,” she says. For this campaign, the main message is usually to avoid
0
50
unprotected sexual relationships but that is not always
2015
effective because strategies for women and vulnerable
Source: CENSIDA
100
150
200
UNaids Goal 90%
populations are different, explains Uribe. “There are women who are infected by having sex with their partner
were not covered before, like sexual diversity, sex work and
so targeting for the test demands us to consider gender-
intravenous drug use,” she says. “Society sees us as an open
inequality issues and to address social determinants such
window to promote other aspects besides HIV.”
as access to health services, education, employment and gender violence.”
The specialized Clinica Condesa in Mexico City is a clinic for transgender patients that not only treats HIV but it also
In the case of transmission through intravenous drug
helps in the process of undergoing sexual reassignment.
use, CENSIDA has designed specific projects for this
CONASIDA was also established to discuss HIV and AIDS-
demographic. However, as Uribe explains, it is a challenge
related topics with representatives of civil society who
to provide these patients with safety measures because it
provide ideas to deal with problems.
may be mistaken for promotion of drug use. “This type of transmission is not an issue across the country, it is focused
Paradoxically, keeping up with all these improvements
in the north, in cities like Tijuana and Juarez City, and it has
becomes a threat as patients’ life expectancy increases
started to spread to Guadalajara,” says Magis.
at the same rate as treatment prices. According to CENSIDA, in 1985 survival was one year but today a patient
The efficacy of these programs and CENSIDA’s access,
diagnosed with HIV and who begins treatment can survive
coverage and treatment-quality care can be measured
for approximately 44 years. Right now, 91 percent of HIV
by mortality rates. There are peaks in certain parts of the
treatments are ambulatory and patients frequently receive
country such as south of Veracruz, Tabasco and Campeche.
vaccines and odonatological, nutritional and psychological
These states have 10 deaths per 100,000 infections, while
care, which has improved their life quality.
in the center of the country there are four per 100,000. “Every year, our detection rates increase, meaning we have Magis says that many AIDS deaths occur because of late
more patients and the MX$3 billion (US$166 million) budget
treatment. “This infection has a lot to do with addictions
rises by MX$500 million (US$27.7 million) every year,” says
and sexual diversity, which is directly related to a
Magis. He says HIV is one of the most expensive diseases
discrimination stigma, so many people are reluctant to ask
covered by the FPGC because it has no cure, which means
for help,” he says. The results from the most recent national
patients require lifetime treatment. The high cost of HIV
discrimination survey held by CENSIDA in 2010 showed
is also due to the antiretroviral patent scheme. There is
the biggest discrimination in Mexico is against those with
no control over drug prices in Mexico, explains Uribe, due
HIV and AIDS and members of the LGBT community. “It
to the Mexican acquisition law that protects patents. “The
is particularly important to eliminate discrimination and
pharmaceutical price for the most used drug for HIV in
gender inequality because this prevents us from achieving
Mexico is four times higher than the manufacturing price,
the impact we need,” says Uribe.
at MX$2,500 (US$138) per month for every patient,” he continues. “In Africa, the drugs are sourced from generics
The CENSIDA Director General acknowledges that HIV and
labs and the cost is MX$200 (US$11) per month. We have
AIDS have forced healthcare institutions to innovate their
to create a dialogue between COFEPRIS and the authorities
approach to health issues. “We have to deal with topics that
that negotiate the treaties.”
INFOGRAPHIC
COFEPRIS BREAKS DOWN BARRIERS Since being recognized as a regulatory agency by the WHO,
regulatory agency, COFEPRIS, is recognized
over the past five years several Central and South American
by the WHO and by other Central and South
countries have followed suit, increasing Mexico’s attractiveness
American countries. A product that has
as a Latin American base of operations
successfully obtained registration in Mexico is much easier to launch in Costa Rica, Colombia,
26
One of the reasons Mexico is such an attractive destination
Ecuador, El Salvador, Chile, Panama, Belize and Peru. This
for foreign companies, other than the size of its population
makes Mexico an ideal springboard from which to begin a
and its growing economy, is the fact that its main sanitary
Latin American expansion for big multinationals.
COFEPRIS AGREEMENTS MILLIONS OF INHABITANTS
REGULATORY AGENCY
Belize
0.4
Caribbean Public Health Agency (CARPHA)
El Salvador
6.1 MEXICO Part of the Pacific Alliance
121 million Home regulatory agency: Federal Commission for the Protection Against Sanitary Risks (COFEPRIS)
Costa Rica
4.8
Mexico
US$11.2 billion
Ecuador El Salvador
National Administration of Pharmacies and Drugs (DNFD)
Ecuador
16.1
Recognizes COFEPRIS since
2012
Sanitary Product Regulation Administration (DRPIS)
Panama
3.9 PHARMA MARKET IN 2015
Medicine and Sanitary Product Administration
National Agency of Regulation, Control and Sanitary Vigilance (ARCSA)
US$1.6 billion US$527 million
PART OF THE PACIFIC ALLIANCE Colombia
2013
Costa Rica
US$835 million
Colombia
US$3.3 billion
Chile
US$3.3 billion
Peru
US$1.6 billion
2014
Panama
2015
Belize
48.3
National Institute of Vigilance of Medicines and Food (INVIMA)
Chile
18
Institute of Public Health
US$1.18 billion Peru
Data not available 0 1 2 3 4 5 6 7 8 9 10 11
Sources: World Bank and BMI Research
31.4
General Administration of Medicines, Consumables and Drugs
VIEW FROM THE TOP
THE COMPLICATED ROAD TO EQUALITY ANA GĂœEZMES Mexico Representative of UN Women
Q: What are the main priorities for UN Women Mexico?
Q: What has the campaign HeForShe achieved in Mexico?
A: We have three priority areas. The first is the participation
A: HeForShe is a platform that seeks the commitment of
of women in government and in leadership roles. Mexico is
men in the struggle for equality and already has more than
one of only eight countries worldwide with electoral parity;
110,000 individual memberships in Mexico. In addition, many
in fact, 42 percent of parliamentarians are women. However,
universities have integrated the platform. For example,
there is only one female governor and in the private sector
UNAM has committed to imbue their health faculties with
the percentage of female CEOs is only 5 percent.
a stronger gender perspective on public and individual health. IMSS has also proposed more in-depth training for
The second area of priority is economic empowerment.
their health professionals to closely monitor compliance
According to INEGI, in 2016 only 43 percent of women in
to NOM-046, a regulation that obligates health services to
Mexico participated in the workforce, compared with 78
detect and prevent violence against women and to offer
percent of men, so we need to increase the number of
safe and legal abortions for victims of sexual violence.
employed women, promote formal jobs and end the wage gap. UN Women projects that it will take around 80 years
Q: #noesdehombre (#notamanthing) was the first
for women to achieve workforce equality.
campaign directed at men to raise awareness of sexual violence. How effective was it?
Our third priority is to increase women’s autonomy
A: It was a campaign in collaboration with Mexico City that
regarding health by providing universal access to sexual
focused on preventing violence on public transport. The
and reproductive care and by ending gender violence.
elaboration of the campaign was based on a study done by the Mexican college that showed that most men who
Q: What are the main health concerns for women in
perform violent actions in public spaces do not consider
Mexico?
it violence.
A: PAHO and UN Women's health division are mainly worried about three situations. The first is teenage pregnancy. We
Q: What needs to be done achieve more impact of the
are working on a campaign with 12 UN agencies called De
awareness against gender violence?
la A a la Z (From A to Z), from Aguascalientes to Zacatecas.
A: When we talk about gender sexual violence, something
The campaign promotes awareness of freedom of choice
very perverse happens, which is to say that women are
regarding marriage, because in Mexico one in every five
blamed for it and sometimes rape is justified because
women marries before the age of 18. Another priority in
of the way the woman was dressed or because she
terms of public health is the lack of access to healthcare
was alone. We worked with the government to create
and pension funds for women who work in the informal
a public program that ends impunity. There is a feeling
sector. This is also the situation for all those women who
that violence is not an issue because not many cases
have to stay at home to take care of family members. In
become public. However, we are working with the Ministry
Mexico, more and more people are living longer while
of Interior to get more answers from the media. Most of
suffering from chronic diseases and women are usually
the attention on the topic comes from campaigns on
responsible for their care. According to the census, in
social networks.
Mexico around 30 million people need permanent care, 3.5 million have a chronic disease, 1.2 million have a disability and a large percentage of the 10 million adults aged over
UN Women was created by the United Nations to promote
75 require special care. Our third health concern regarding
gender equality and the empowerment of women. In Mexico
women is gender violence, which is the clearest expression
it focuses on the promotion of women's access to healthcare,
of inequality.
participation in government and eradication of violence
27
VIEW FROM THE TOP
CAMPAIGNS, BETTER HABITS NEEDED TO FIGHT CHILD OBESITY PRESSIA ARIFIN-CABO Deputy Representative of UNICEF in Mexico
28
Q: What is UNICEF’s approach to combating child obesity?
are only allowed to bring to school the foods that appear
A: Figures demonstrate that 95 percent of obesity cases
in a healthy food chart, which has obliged parents to make
are attributed to poor nutritional patterns, therefore, the
healthier choices.
main priority to fight childhood overweight and obesity lies in campaigning and advocating good habits, but
Q: How can UNICEF fight dietary misinformation in Mexico?
also in promoting breastfeeding, water consumption and
A: There are several myths regarding breastfeeding. For
physical activity.
example, some women start feeding their child with formula when they cannot pump milk because they believe
In Mexico, 60 percent of adolescents do not do any physical
they have an issue. The truth is that they do not know how
activity and although it is a compulsory subject in schools,
to breastfeed.
it is not enough to compensate for their calorie intake. We are developing strategies to promote physical activity. For
Good nutrition starts in the womb so providing timely and
example, a new social media project will strengthen the
accurate information to pregnant and lactating mothers
importance of physical activity alongside good nutritional
is vital. Although one of UNICEF’s main priorities is the
habits among adolescents. We are also working on
prevention of teenage pregnancy, we also work to make
another initiative that advocates water consumption and
sure adolescent mothers get the right information to
accessibility. Several bad nutritional habits can be traced to
provide their babies with the best nutrition and the best
the sugary drinks consumed by many children just because
beginning to life.
their schools do not have potable water. Q: What has changed regarding low breastfeeding rates Besides diabetes and cardiovascular problems, there are
in Mexico and the impact on child obesity?
also many psychosocial effects associated with obesity.
A: Tackling obesity is a priority for UNICEF and
The way obesity is perceived in Mexico can incite bullying,
breastfeeding is vital in combating obesity. Women are
which can also lead to children losing motivation, eating
getting more and more information about the positive
more or suffering other nutritional diseases such as
impacts of breastfeeding; however, awareness is only
anorexia or bulimia.
slightly increasing and there is still much work to do. UNICEF works closely with strategic partners such as
Q: How effective have measures such as the sugar tax or
governments, academia, NGOs and the private sector
the ban on salt-shakers on restaurants tables been?
to support public health and advocacy campaigns. We
A: The sugar tax has contributed to fighting obesity but
participate in high-profile events like breastfeeding day,
it is still low (about MX$1 or US$0.05). More investment is
while also working locally with partners such as IMSS and
needed to change children’s behavior and even more so
the Ministry of Health.
that of their parents. Working with children as agents of change could be promising because they can inform their
It is not only about encouraging breastfeeding per se,
parents and prevent them from buying food that is not
it is also about making sure breastfeeding is a cross-
permitted in their schools. In Yucatan, for example, children
cutting and integrated element of other programs. The main issue with breastfeeding lies not only in how people perceive it, also in how people experience it. For
UNICEF is the UN agency in charge of promoting children’s
example, working mothers lack adequate breastfeeding
rights and wellbeing. Its local agency works with the Mexican
spaces in their workplaces and must leave their child at
government, NGOs and private companies to combat issues
home under a relative’s care. If a teenage mother does
that harm children’s quality of life
not receive the right information on how to take good
care of her child, which has a lot to do with lack of sex
practices and combating childhood overweight and obesity.
education in schools, then it is easier for her to believe
It is not just about working at the policy level but also at
in myths. Nutritional education for adolescents is crucial,
the budget level. This is a worthwhile investment because
particularly for adolescent girls because they might
what is invested in early childhood will pay off in the next 20
become mothers one day. If these girls receive adequate
years. Investing in combating overweight and obesity will
and timely information, they could influence whether the
save the government MX$64 billion (US$3.5 billion) yearly,
next generation will be obese or not.
the amount that public health spends on treating diseases
“
associated with overweight and obesity.
Q: What are UNICEF’s plans for indigenous communities in terms of nutrition? A: The main challenges associated with reaching indigenous communities are poverty, remote locations, lack of access to market choices and the media. Due to poverty, they buy high-calorie food with low nutritional value just to get through the day. In addition, we cannot lose sight of the chronic malnutrition that today continues to affect 1.5 million children, especially in rural and indigenous communities. The rural health centers have benefited from interventions via text messages with
In Mexico, 60 percent of adolescents do not do any physical activity”
Q: How can you demonstrate to the government what works and what does not? A: We gather data and look at different ECD indicators such as health and nutrition as well as government
information on topics like breastfeeding, Early Childhood
spending. We place a monetary value on each investment
Development (ECD), water and sanitation in schools and
to know the rate at which prevention expenditure reduces
good nutritional practices.
correction expenditure.
Q: How can UNICEF make these programs sustainable?
Q: What will be the main priorities for UNICEF in Mexico
A: UNICEF and other UN agencies work closely with national
in the next two years?
and local governments and other partners to support their
A: In 2019, we will embark on a new six-year country program
efforts. Program sustainability is tied to the government’s
in which obesity will continue to be a main priority. We will
empowerment to launch and continue these programs, while
increase our efforts to keep doing research and gather
funding them with sufficient resources. In middle-income
evidence to support health systems to prevent overweight
countries, UNICEF’s work is focused on supporting the
and obesity from an early age. UNICEF will also work with
government on upstream work. All of these initiatives are
adolescents to champion physical activity through innovation.
pilots and part of the process to generate evidence to show
We will tailor interventions to reach children and provide
the success a program may have: the costs and the benefits.
basic public services that will help combat overweight and obesity, including access to safe and potable water. We have
For example, part of UNICEF’s work is to encourage
been firefighting the symptoms and consequences but we
public investment in ECD, which includes good nutritional
really need to work together on the causes.
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29
ANALYSIS
AIR POLLUTION WORLD’S FOURTHBIGGEST KILLER
30
Low-quality air covers many of the world’s biggest cities
obstructive pulmonary disease (COPD),
and Mexico is no exception. This creates a variety of health
ischemic heart disease (IHD) and stroke and
problems but initiatives are beginning to emerge to improve
lung cancers in adults. Other associated
or solve the problem
health effects include adverse birth outcomes, childhood respiratory disease, diabetes,
Ninety-two percent of the world’s population lives in areas
atherosclerosis and neurodevelopment and cognitive
that do not meet World Health Organization (WHO) safety
function, according to the WHO. A study published in 2016
guidelines, according to a WHO study from September
in the National Academy of Sciences examined patients in
2016. Mexico City is one of the most polluted cities in the
the UK and Mexico and showed links between air pollution
world, and according to government data, saw only 78 days
and Alzheimer’s disease. The exact link between pollution
of clean air in 2016 according to WHO guidelines.
and allergies is yet to be established but the WAO forecasts that as air pollution and the ambient temperature increases,
“Today, climate change and pollution are realities,” says
so will problems related to allergies.
José Narro, Mexico’s Minister of Health. “We have serious problems in Mexico City but both local and federal
The organization measures air pollution in PM 10 and
governments are taking action. We now have much better
PM2.5, which is particulate matter of less than 10 and 2.5
ways of measuring pollution levels and better instruments
micrometers. The measures are an average taken between
to measure the impact that polluting particles have.
2010 and 2015, unless the latest available data precedes
Mexico City is in a valley and pollutants do not disperse.
this. It recommends no more than an annual mean of 20µg/
Some actions taken include the restriction of vehicles and
m3 for PM10 and 10µg/m3 for PM2.5. With the annual mean
industrial activity, which limit mobility. The Environmental
in Mexico varying between 11-35 PM2.5 µg/m3, it sits well
Commission of the Metropolis (CAMe) is a coordinating
above the recommended guideline.
mechanism that includes local, state and federal levels of government. President Peña Nieto requested that the
In addition, pollution plays a role in other diseases and
commission include the Ministry of Health. We all have to
conditions, such as depression and cardiovascular health.
realize that we have to do things for our own health. There
“Urbanization and depression go hand in hand. As an
are several dimensions to health, one of which is individual
economy develops, the population is weighed down with
and another is collective.”
heavier workloads, we spend more time in traffic and produce more pollution, all of which are stress factors
Poor air quality accounted for one in nine deaths in
that can lead to depression,” explains Oscar Parra,
2012, according to the report. This translates to 3 million
Managing Director of Mexico, Central America and the
deaths globally for 2012 related to outdoor air pollution
Andes of Lundbeck.
and 4.3 million related to indoor pollution. Of the total deaths, 93,000 occurred in low-middle income countries
Pollution in Mexico has long been a known-issue and its
in the Americas. Around 87 percent of the deaths linked
capital, Mexico City, was one of the first cities in the world
to outdoor air pollution occurred in low-middle income
to implement measures such as the license-plate-based
countries, where 82 percent of the world’s population
restrictions Hoy No Circula (No-Drive Day) in 1989. The
live. According to the World Allergy Organization (WAO),
restrictions have evolved over the years and now prohibit
common outdoor pollutants composed of particulate
drivers with cars that are not granted a 00 or 0 hologram
matter include vehicular traffic and fuels such as coal and
(linked to car age and MOT results) and registered to
gas for heating and industry. Indoor sources include wood
Mexico City from driving on one of the weekdays. Since
and coal used for heating and cooking and tobacco smoke.
2008, the measure has been extended to Saturdays.
Air pollution was responsible for 10 percent of deaths,
Cars with a 1 hologram are forbidden to be used on
the fourth biggest killer behind metabolic risks, dietary
two Saturdays per month, and 2 holograms and cars
factors and tobacco smoke, according to a 2013 World
not registered to the megalopolis are prohibited every
Bank infographic.
Saturday. There is an additional contingency, initiated when pollution in Mexico City reaches 150 IMECA points,
Causes of death linked to air pollution include acute
a measurement based on six types of pollutants. However,
lower respiratory infections in children under five, chronic
despite the extra Saturday measure, a paper published
in Nature by Lucas Davis, Faculty Director of the Energy
are posted across the city and throughout the media,
Institute at Haas, finds it has had “virtually no discernable
encouraging workers to cycle or take public transport and
effect on air quality.” The main reason attributed to this
urging bosses to allow employees to work from home.
is that the expected increase in public transportation did not occur.
In high-income countries, 56 percent of cities with over 100,000 inhabitants do not meet WHO air-quality
Still, the Global Alliance on Health and Pollution ranks
guidelines, nor do 98 percent in low-middle income
Mexico among the top 10 countries worldwide turning
countries. This prevalence of pollution costs the global
the corner on toxic pollution in 2014, due to its efforts in
economy dearly. The World Bank estimates premature
turning a contaminated oil refinery in Mexico City into an
deaths due to air pollution to have cost US$225 billion in
urban park with over a million visitors per year. Two other
2013 in forgone labor income, up from US$162 billion in
Latin American countries, Peru and Uruguay, were also
1990. “The respiratory health of children is at higher risk
among the top 10.
since they inhale a higher volume of air per body weight than adults and their immune defense mechanisms are
On March 1, 2017, the Ministry of the Environment and
still developing,” says the WAO.
Natural Resources launched a new National Strategy of Air Quality (ENCA). ENCA aims to “control, mitigate and
With pollution so deadly, many are creating alliances to help
prevent the emission and concentration of pollutants in
clean up the air. The World Bank partners with the Climate
the atmosphere in rural and urban areas by 2030” through
and Clean Air Coalition (CCAC) and the Global Alliance
five main lines, 21 strategies and 69 lines of action. The
on Health and Pollution and the WHO has established a
five main lines are: integral management to improve
campaign with the CCAC and the government of Norway
air quality, efficient and result-focused institutions,
called BreatheLife, which has identified a number of ways to
companies committed to air quality, atmospheric
clear the air, including sustainable transportation, industrial
policies based on scientific bases and a responsible
emissions reduction, solid-waste management, renewable
and participative society. Action in the responsible and
power and energy-efficient homes. For true change to occur
participative society line has already begun as photos
however, a push for clean air needs to come not only from
of children who cannot play outside due to dirty air
concerned NGOs but also from an involved population.
AIR POLLUTION OVER MEXICO
1
Annual mean ambient PM2.5 (µg/m3) < 10 11 - 15 16 - 25 26 - 35 Source: WHO
8
4
3 5 6
7
2
LOCATION
MEAN PM2.5 (µg/m3)
1
Monterrey
36
2
Toluca
33
3
Salamanca
28
4
Leon
27
5
Iraputo
26
6
Mexico City
20
7
Puebla
20
8
Guadalajara
19
31
Anesthetic machine Perseus A500 with IACS monitoring, mounted on a Movita arm with infusion pumps
HEALTHCARE SYSTEMS
2
The greatest challenge of 2016/2017 for the healthcare system is granting access to improved services to a larger percentage of the population. That task falls on the shoulders of the related public institutions, such as the Mexican Social Security Institute (IMSS) and the Seguro Popular. Less than half of the Mexican population has access to public healthcare and facilities, with 62.5 percent of the national workforce informally employed according to El Economista in an October 2016 report. INEGI figures show that only 62.2 million people, or about 48 percent of the population, had access to IMSS services as of July 2016. Despite government efforts, this figure represents only a 33.3 percent increase since 2006.
This chapter will offer an overview of the countryâ&#x20AC;&#x2122;s healthcare systems both public and private. Alongside the main social institutions and hospitals in Mexico, it will feature interviews from regional health ministries and it will cover the systemâ&#x20AC;&#x2122;s advantages and flaws, as well as the obstacles to overcome. This section will also review how the public and private sectors can work hand in hand to improve access to healthcare, notably through public-private partnerships. Investment in the Mexican healthcare system and its promotion abroad, including infrastructure projects such as new, innovative health facilities, will also be in focus.
33
CHAPTER 2: HEALTHCARE SYSTEMS 36
ANALYSIS : Access to Healthcare: An Ongoing Mission
37
INFOGRAPHIC: Mexico's Healthcare System
38
VIEW FROM THE TOP: Armando Ahued, Ministry of Health
40
VIEW FROM THE TOP: Gabriel O’Shea, Seguro Popular
42
VIEW FROM THE TOP: Marco Navarrete-Prida, PEMEX
44
VIEW FROM THE TOP: José Reyes, ISSSTE
45
VIEW FROM THE TOP: Roberto Bonilla, Hospitales San Ángel Inn
46
ANALYSIS: Public-Private Collaborations Boost Sector
47
VIEW FROM THE TOP: Alejandro Alfonso, ABC Medical Center
48
VIEW FROM THE TOP: Misael Uribe, Médica Sur
49
VIEW FROM THE TOP: Juan Galindo, Christus Muguerza Sistema de Salud
50
INSIGHT: Rafael Espino, Amerimed
51
VIEW FROM THE TOP: Miguel Castillo, Hospital Sedna
52
INFOGRAPHIC: National Health System Under the Spotlight
54
INSIGHT: Francisco Villarreal, Swiss Hospital
55
INSIGHT: Ricardo Bojalil, AsMed
56
VIEW FROM THE TOP: Jaime Cervantes, Grupo Vitalmex
57
VIEW FROM THE TOP: Ángela Spatharou, McKinsey & Company
58
VIEW FROM THE TOP: Lucas Olmedo, Fligoo
35
ANALYSIS
ACCESS TO HEALTHCARE: AN ONGOING MISSION The Mexican healthcare system is fragmented, although
announced during 2017,” says Julio Sánchez y
the government is striving to improve access, its foremost
Tépoz, Commissioner of COFEPRIS.
challenge. That task falls mostly on the shoulders of public institutions, such as the IMSS and the Seguro Popular
According to the OECD, in 2015 privately financed health expenditure represented 48.5
36
Less than half of the Mexican population has access to
percent of total sector expenses in Mexico. In addition,
IMSS, the largest public healthcare institution, and its
few have private insurance to fall back on. Analysts peg
facilities, with 62.5 percent of the national workforce
the number at under 10 percent of the population. In
informally employed, according to an El Economista report
2016, Moses Dodo, General Manager of Bupa Global Latin
published in October 2016. INEGI figures show that only
America, explained that corporate clients are driving the
62.2 million people, about 48 percent of the national
medical insurance market in Mexico and many young start-
population, had access to IMSS services as of July 2016.
ups are targeting the corporate insurance market. Others
Despite government efforts, this figure represents a 33.3
are spotting opportunities to create innovative business
percent increase since 2006.
models, targeting the middle class.
Institutions have made an effort to stretch budgets and
A final challenge is the demographic transition Mexico is
cover more people. The Seguro Popular, for instance,
facing amid a declining fertility rate and as the population
has started eliminating duplicate registrations with other
ages. According to the OECD, the country’s fertility rate has
institutions. “We have cleaned up our database and no
dropped from 5.9 children per woman in 1975 to 2.2 in 2015.
longer have 9 million duplicate registrations. We will
“Mexico’s population, like many around the world, is going
continue to work on this in 2017 and we expect to reflect
through a demographic transition,” says Mexico Minister of
this in a higher quality service for patients because there
Health José Narro. “Population pyramids have changed from
will be more resources per policyholder. The Seguro
20 years ago, when there was a strong base of young people.
Popular has been sharing information with the other
Now, the number of old people is increasing. Forty-five years
health systems since 2016, a year in which we lowered
ago, the median age was 17.8. Now, it is 27, so we can say
the number of policyholders by 3 million,” says Gabriel
that the population is maturing. Children and the elderly are
O’Shea, National Commissioner for Social Protection in
dependents and there are just over five million people aged
Health of the Seguro Popular.
over 70, but that figure will increase to over 17 million in 2050 thanks in part to medical advances. Today, a regular infection
However, the Mexican population pays a significant amount
can be cured while chronic, nontransmissible, nonparasitic
of their healthcare expenditure out-of-pocket, even in
infections can be controlled. Health is a process, not a state.
proportion to other countries. According to OECD figures,
Health ranges from the complete state of physical and
only 5.8 percent of GDP in 2015 in Mexico was spent on
mental wellbeing as defined by the WHO, to a second before
healthcare, almost half of which was out-of-pocket. Canada,
death, when health is basically lost. In between, there are
for example, spent 10.1 percent of GDP on healthcare in
many states, some better than others. If people see health
2015, only 30 percent of which was out-of-pocket. In a
this way, prevention can be put in place. We want to promote
country with a minimum wage of MX$80.04 (US$4.4) per
education so that more people can take control of their
day, paying for medical treatment out-of-pocket is simply
health. We must begin to build processes for healthy aging.”
unaffordable for many. In addition, when medicine is out of stock in the public sector, it forces workers that should be
Although the system faces a great deal of challenges,
covered to fork over money for their treatments. To make
globally it does not fare so badly and has been mentioned
medicine more affordable, COFEPRIS has been encouraging
as a model that, with some tweaks, could inspire others.
the production of generics by liberating patents. “In total,
The Bloomberg Healthcare Efficiency Index 2016 places
37 active substances have been liberated in our generics
Mexico 17th out of 55 countries, weighing up factors such
strategy, forming 491 generics. This represents MX$25
as life expectancy (60 percent of the grade) and relative
billion (US$1.4 billion) in savings and 2 million extra people
and absolute health expenditure (30 percent and 10 percent
can be treated thanks to these savings. In 2017, we will
respectively). Mexico’s life expectancy has increased in
continue with this strategy and in that of innovative
recent years despite high levels of obesity and diabetes,
medicine. Over 40 new molecule authorizations will be
which certainly boosted its ranking.
INFOGRAPHIC
MEXICO'S HEALTHCARE SYSTEM For everyone who is
For those who
formally employed and is
work at the oil
Institutions of state governments,
and gas company
not covered by another
for those who belong to
public institution
the state in question
37
For state
Others, such as police
INSTITUTIONS OF HEALTH AND SOCIAL SECURITY
workers
medical services
For those who belong
For those who belong
to the military
to the navy
Seguro Popular
IMSS-Prospera For those who do not have social security and
A type of public insurance for Mexican residents not covered through
live in rural or marginalized urban zones in
another institution
extreme poverty
The Ministry of Health
PUBLIC HEALTH INSTITUTIONS
OTHER TYPES OF INSTITUTIONS AND PROGRAMS IN PUBLIC HEALTH OR SOCIAL SECURITY
SNDIF National System for the Integral Development of Families. Social assistance for Mexican families Others
providing family planning, childcare and fighting
Such as university medical services
drug absuse
Private health institutions that offer subrogated services public sector workers
Insurers that offer medical protection services
Private health institutions open to the general public
Banks that offer health
PRIVATE INSTITUTIONS
services Others, such as private doctorâ&#x20AC;&#x2122;s consultancies in pharmacies
to their employees
INSURERS, BANKS & OTHER INSTITUTIONS OF PREPAID MEDICAL SERVICES
Medical units that belong to a charitable organization and offer services to general public, such as the Red Cross Source: INEGI
Other prepaid services such as NGOs or not-for-profit organizations
VIEW FROM THE TOP
HEALTH CHALLENGES IN ONE OF THE WORLD’S BIGGEST CITIES ARMANDO AHUED Minister of Health of Mexico City 38
Q: What steps is the Ministry of Health taking to quash
Q: Why has health education not been integrated into
disinformation and spread knowledge on health issues?
school curriculums?
A: Mexico City has spearheaded the promotion of health
A: It is a political decision that has not been made. What
information. We have launched campaigns on every topic
could be more important than children learning how their
imaginable and we have also printed 1.4 million copies of
body works, the risks they face and what needs to be done
a book on health for distribution to children in elementary
to preserve their health and life? This needs to be done
schools. It covers such topics as dental health, nutrition and
today, but it may take years. Still, the seeds need to be sown
general hygiene. We have a second book on sexual health
or in years to come we will continue to face the same issues.
with over a million copies in print. It touches on all related
Our children can lose 10 years of life due to overweight and
topics. A third book covers addictions: alcohol, tobacco,
obesity. At home, children are given portions to eat that are
drugs, myths and truths.
the same size as those the parents eat. We need to change the consciousness of parents. We also need to seek help
In winter of 2016-2017, Mexico City saw 23.6 percent fewer cases of pneumonia and bronchopneumonia than in 2015/2016
from teachers. When I was studying medicine, I was taught to cure sick people, not to keep people healthy. This is good but doctors should also know how to look after people and point them in the right direction to staying healthy. The healthcare system cannot handle the number of sick people who did not look after themselves and did not go for regular checkups. In addition, care becomes extremely expensive.
We must incorporate health as a subject in schools. I am
Stents cost MX$25,000 (US$1,389) and some people may
convinced that the only way to make people co-responsible
require three or four. Dialysis costs MX$2,000 (US$111) per
for looking after their health is to empower them through
session and sufferers may need three sessions per week
knowledge and understanding. If the information is
for the rest of their life. There is no wallet or public budget
provided to children, they will have it when they in turn
that can withstand this.
become parents. For example, children do not brush their teeth properly because their parents cannot show them
Q: How has the Ministry of Health promoted a preventive
how. This is why nine out of 10 children in primary school
health culture and what is its view on vaccinations?
have cavities and in secondary school they all have cavities.
A: In the swine flu pandemic that took place in Mexico City
On average, adults loose seven to nine teeth after the
in 2009 I had to make a historic decision: to close the city
age of 60; they cannot chew or bite, they begin to have
to protect residents. This taught us that we were vulnerable.
gastrointestinal problems and become malnourished, so
When the vaccine arrived, there was much confusion and
they get osteoporosis and they fall and break a bone. This
fear of the vaccine because the Minister of Health of
is why it is so important to teach dental hygiene and the
another state had commented that it caused Guillain-Barré
same goes for sexual health.
Syndrome. We refuted this, but the fear was terrible. Even health personnel did not want to get vaccinated.
Armando Ahued is a surgeon from the UAM. He became
To set an example and prove the vaccine was safe, I was the
the capital’s Minister of Health in 2007 and is known for
first to be vaccinated. Thankfully, former Minister of Health
successful programs such as Médico en tu Casa (Doctor in
José Ángel Córdova negotiated with Sanofi and distributed
your House)
stocks of the vaccine to all the states of the country. One
day, he called me and told me that, despite the Ministry
VaccinationsVACCINATIONS IN WINTER 2016-2017 INFLUENZA
of Health’s investment, people refused to be vaccinated. He asked me to find a way to get it done. I had the idea to place the vaccination stands in the city’s metro, which sees foot traffic of around five and a half million people per day. We put stands in the biggest stations and offered free vaccinations. As a result, people were lining up. I took Minister Córdova to visit the stands along with the press and
2,447,344 is the Mexico City vaccination goal
98.8% vaccinations acheived
word got out that the people of Mexico City were getting
1.2% vaccinations
the vaccination. This created a domino effect. Vaccination
not completed
stands were placed in public areas throughout the country. This was the start of a culture of care and prevention.
people ho haven been vaccinated Source: Mexico City Ministry of Health Vaccinations in cdmx
From 2009 to the present, we have been vaccinating
of protection. The best time to get vaccinated is in
without a problem. In winter of 2016-2017, Mexico
September or October. The aim of the Ministry of Health
City saw 23.6 percent fewer cases of pneumonia and
was to vaccinate 2,447,344 people in Mexico City,
bronchopneumonia than in 2015/2016, the number of
1,003,426 of which belong to my ministry. Mexico City
acute respiratory infections remained stable while there
met 98.8 percent of that goal.
were 56.6 percent fewer cases of influenza. There were only 10 deaths this winter, compared with eight last winter in a
In addition to influenza, we have vaccinated against
city of millions of people. The virus we expected to be most
rotavirus and pneumococcus. Everyone in a risk group
prevalent was H3N2 but it was actually H1N1.
should get vaccinated including pregnant women, children, elderly, diabetes sufferers and those who suffer from
From 2016, two oseltamivir generics have been available
chronic respiratory illnesses.
but people continue to associate the active ingredient oseltmavir with the brand Tamiflu and refuse to buy generic
Q: What will the Ministry’s priorities be in 2017? How will
versions. Now, we have enough oseltamivir in stock to
it distribute resources to achieve them?
cover both this winter and the next. One issue is that when
A: The greatest priorities will be to consolidate the
a family member gets influenza, everyone in the family
infrastructure that we already have, to improve the
takes some of the medicine as if it were preventive, which it
equipment, to prepare and train our professionals and
is not. There is also the issue of rapid testing, which results
to launch a campaign on dignified treatment. In addition,
in false positives or false negatives 50 percent of the time.
we will continue to promote health and prevention and
My recommendation is to seek out a clinical diagnosis only.
early diagnosis. Without a doubt, the Médico en tu Casa (Doctor in your House) program, which has sent doctors
In addition, it is pointless getting vaccinated in February
and nurses to knock on doors to seek out sick people, has
or March, as the influenza season ends in March and
been a successful experience and we will consolidate the
the vaccine takes 45 days to reach the maximum level
strategy by making free health services a reality.
39
VIEW FROM THE TOP
CARING FOR HALF OF MEXICANS GABRIEL O’SHEA National Commissioner for Social Protection in Health of the Seguro Popular 40
Q: The Seguro Popular registered over 8,000 migrants
Siglo XXI, which is aimed at children. To face these cuts,
returning to Mexico in early 2017. How is it reaching
we have lowered duplicate registrations and we have
these people?
cut some programs. We have also reduced trips to other
A: This has become quite a theme since President Trump
states to check on how things are going and employees
announced he would repatriate 3 million Mexicans. We have
no longer have company cellphones. A program I
created 50 booths in the 50 consulates in the US managed by
would have liked to implement but have not been able
the Ministry of Health from where we distribute information
to is the milk bank in hospitals to encourage exclusive
to our citizens about what the Seguro Popular is. We tell
breastfeeding for the first six months.
them that it is free, what it covers and what it does not, so that when they return to Mexico they can sign up. In addition,
Q: Of all the Seguro Popular’s programs, which is your
we placed 24 sign-up centers in the five Mexican border
favorite?
states solely aimed at reaching those being repatriated.
A: My favorite program is probably the cataract one
However, we have not seen an increase in deportations and
because I am an ophthalmologist. However, the program
the number of people registered in the first three months of
that has had the most impact is that which cares for
2017 was the same as the first three months of 2016.
children with cancer. In 15 years we have managed to reduce by 11 points the out-of-pocket expenditure of
Q: The Seguro Popular expects millions of people to renew
Mexicans, although we still remain the country in the OECD
their policies this year. How do you cope with such volume?
with the highest rate of out-of-pocket expenditure. I am
A: As of March 2017, there were 54.9 million Mexicans
certain that with the modifications to the law we have
affiliated with the Seguro Popular. The policies of 17 million
made we will achieve a reduction of 15 points within the
Mexicans will expire in 2017, although there is a tendency
next few years. We expect that from 2017 onwards this will
to leave things to the last minute, and so on the last day
help state health services carry larger stocks of medicine,
we see huge queues of people. Therefore, we expect only
which is what is most hitting the wallets of Mexicans.
50 percent of those 17 million to re-affiliate. We had 57 million policyholders last time we spoke with Mexico Health
Q: The Seguro Popular now has bariatric surgery among
Review in 2016. We have since cleaned up our database and
its services. What has been the result of that?
no longer have 9 million duplicate registrations. The Seguro
A: This is happening in Mexico City mostly, but it is hard to
Popular has been sharing information with the other health
implement in other states because there may not be as many
systems since 2016, a year in which we lowered the number
bariatric surgeons. It is aimed at cases of obesity in which the
of policyholders by three million.
patient is incapacitated in his or her daily activities. I believe everything should be tried before resorting to surgery:
Q: How have public-sector budget cuts impacted the
dieting and exercise or even taking medicine. Unless we
Seguro Popular? How is it ensuring patients are not
Mexicans change our diet and exercise, it will be difficult to
negatively affected?
justify resorting to bariatric surgery because we have done
A: The Seguro Popular has suffered from budget cuts
nothing to try and fight the root cause. It is all well and good
to programs such as catastrophic expenses or Médico
for the public sector to instill healthy habits in schools, but what good is it if parents undo this work once the child gets home? This is a complex theme that requires engagement
The Seguro Popular is a public-sector institution of health
from all sides: municipalities and mayors, but the largest
and social security that operates through medical facilities
commitment is that of parents. We have made great strides
belonging to the Ministry of Health. It covers almost half the
through the Prospera program in teaching people to eat well,
Mexican population
which does not cost a lot of money.
Oxylog 300 plus
41
Emergency ventilator Oxylog 300 plus and patient relocation with the Infinity M540 monitor
Q: You are an ophthalmologist. What trends in Mexican
a healthcare system and we see this increase every day.
ocular health are most concerning?
There are 12 million diabetics in Mexico, of which only 38
A: Cataract is the first reversible cause of eyesight loss in
percent have their condition under control. The others
the world and in Mexico the first cause of non-reversible
are suffering from side-effects.
sight loss is glaucoma. The main problems I see when giving consultations and operating are diabetes and
We have seen a decrease in the costs of cancer patients
obesity. They are our nightmare. If I could, I would focus
due to generic medicine. Today, a patient with breast
resources on fighting these two conditions, which would
cancer costs less than three years ago and we have seen
have a huge ripple effect on other health costs.
the same effect with HIV patients. The Seguro Popular monitors 81,000 HIV patients, each costing MX$37,600
In consolidated purchasing, we have saved MX$11 billion
(US$2,089) per year. This is a great burden for healthcare
(US$611 million) over the past three years. We want health
systems because they now live longer. HIV is not a death
centers to be on the lookout for these things and be
sentence as it was in the 1980s.
testing for them. In addition, it angers me if centers are lacking tests because I send the states money to buy test
Q: How will the Seguro Popular continue to face the
strips for them. Now, instead of sending money, I buy
diabetes and obesity epidemic in 2017?
material and send that to them. The same thing happens
A: It is no longer about building large hospitals. We have
with condoms. Twenty percent of pregnancies in Mexico
to continue what we have started: the interchange of
are in girls under the age of 19, so now we buy condoms
services. The theme of universality we all dreamed of is
directly and ship them to the states.
surely not so. It has steps, each of which can take years. We began interchanging during this six-year presidential
Q: In which areas has the Seguro Popular seen the
term, meaning patients can be treated where there is
largest increase and decrease in costs in 2016?
room, even if the facilities belong to another health
A: The largest increase has been in NCDs, mostly cardio-
system. We need to make the most of infrastructure that
pathologies and diabetes mellitus, and treatment of
is already in place. There are 35 private medical providers
ensuing complications like hemodialysis, amputations,
that offer services to the Seguro Popular. We need to
laser surgery for diabetic retinopathy and implanting
increase this number and we should reach 50 by the end
an Ahmed valve. All of this is extremely expensive for
of the year.
VIEW FROM THE TOP
SIMULTANEOUS TARGETS, POSITIVE RESULTS MARCO NAVARRETE-PRIDA Deputy Director of Health Services for PEMEX 42
Q : W h a t a r e P E M E X ’s h e a l t h p ri o ri t i e s f o r i t s
we have many elderly patients; 56 percent of PEMEX’s
beneficiaries in 2017?
beneficiaries are over 65 years old.
A: As a healthcare provider, we have to focus on simultaneous targets. However, we began as a medical
Q: What challenges does PEMEX face in retaining workers
services company, so labor health is our main concern. We
when faced with many new market entrants?
have doctors at every work site to deliver preventive care
A: We need to offer the best benefits to our workers so
and promote health, hygiene, risk detection and to evaluate
they do not need to look for other employers. This year, we
the compatibility of employees with the jobs they do. For
are also negotiating our collective bargaining agreement.
example, some employees work 35-60 meters above a
We work closely with the union and it is committed to
platform or land. They cannot suffer from vertigo, have
our focus on prevention and health promotion. We want
the flu or a high BMI because that would be risking their
both employer and employee to take responsibility for
life. At PEMEX Health Services we are further ahead in
employee health. The paternalistic scheme in which
health services than other industries such as automotive,
the state or PEMEX provides everything to a passive
pharmaceutical and aerospace. Our priority is to have our
beneficiary does not work. There should be a commitment
workers operating under the best conditions possible.
from the employees, too. To this end, we have integrated
Instead of building more hospitals, we want to focus our
a health bonus, which is given to workers with a BMI of
efforts on promoting preventive care. In fact, PEMEX has
less than 25 or for those who lose 10 kilos in a year. Their
41 health centers, including 10 first-class clinics, 24 hospitals
cholesterol and lipoproteins also must be in normal ranges
and 168 preventive centers of labor health. Our hospitals are
and if they are already diabetic their glycohemoglobin
operating on average at 70 percent capacity.
must be under seven. If they comply they get the bonus.
Q: What are the main health concerns of PEMEX’s
Q: What relationship do you have with other public
beneficiaries?
healthcare institutions?
A: They are similar to Mexico’s main health issues: diabetes,
A: President Peña Nieto and Minister Narro are working
cardiovascular diseases, obesity and systemic arterial
on the universalization of health services, which means
disease. Our rates of diseases are low and the most
that each institution has to be open to providing and
common are usually hearing problems. We are a high-risk
receiving support from other institutions. We have an
company, but we experience less than 0.2 accidents per
agreement with all the National Institutes of Health and
million hours worked. There are many myths about PEMEX
we hire subrogated services in some other locations.
but we have one of the lowest sick leave rates among
We have partnerships with health institutions in Sonora,
companies. Our workers take less than four sick days per
Aguascalientes, Tamaulipas and Veracruz. In cases of
year thanks to our preventive initiatives, our efficiency in
industrial emergencies, we receive a lot of support from
setting appointments and the workers own commitment.
IMSS. In 2016, when there was an emergency at our plant
The life expectancy of petroleum workers is 80 years,
at Pajaritos, Veracruz, we received patients from IMSS
higher than Mexico’s average, which is 78. This is because
because we had the largest coverage in the area. We also
they have increased access to health services. Therefore,
share successful experiences among institutions. In fact, every year we do a course on treating burn patients and we invite professionals from IMSS, SEDENA and SEMAR to
Petroleros Méxicanos (PEMEX) is a state-created oil and gas
take part because we are all part of the same ecosystem.
company and is the largest company in Mexico. It runs its own
We also have an agreement with the Ministry of Health to
healthcare system for its workers, which is also one of the
fumigate work areas to prevent vector-borne diseases and
largest in the country
we provide them with fuel for their trucks.
Q: How did you manage the delegation of part of your
of Health’s priorities on prevention of vector-borne
services to a private insurance company?
diseases and teenage pregnancy. In addition, we have
A: There are smaller locations in which we have fewer than
vaccinated almost 100 percent of 1-year olds. During
120 workers but we are still obligated to provide health
pregnancy, we perform syphilis and HIV screenings as
services. It would be very expensive for us to build a PEMEX
well as promoting contraceptive methods. We are also
hospital in those locations. From the beginning, we have
conducting an analysis of patients with hepatitis C to
hired private services to support those PEMEX locations
offer them new treatments.
that lack a health facility but which have active workers, or a total 104,000 beneficiaries. Two years ago, PEMEX’s
Q: What are the benefits of digitalizing patient
supply department designed a strategy to have one health
information?
administrator instead of 95 providers. Unfortunately, the
A: We hold universal electronic records for direct and
results were disappointing and we are now in the process
subrogated systems. The software was created by PEMEX
of returning to our previous system.
10 years ago for direct services and won the Innova award. Three years ago, we integrated it to the subrogated health
Q: What opportunities do you offer students who want
services. When a doctor receives a patient, he has a
to do medical residencies in PEMEX hospitals? Which
password to access the patient’s data. The software is also
specialties are available to them?
linked to the labor health department and to a diabetes
A : T h ro u g h P E M E X H e a l t h S e r v i c e s ’s re s i d e n t
website on which doctors can create an alert when they
program we have trained high-quality and specialized
recognize a diabetic patient. All this clinical information
professionals. We have schools at Hospital Central
and laboratory data is also gathered to elaborate Big
Sur de Alta Especialidad and Hospital Central Norte in
Data, which can be analyzed and presented in graphics
Azcapotzalco, Mexico City; Hospital Regional Ciudad
to identify which patients, in which areas and in which
Madero, Tamaulipas and Hospital Regional de Salamanca,
positions have which diseases and find correlations.
Guanajuato. There are 18 specialty and five subspecialty programs available for 388 students in the country. We
Q: What is PEMEX’s contribution to Mexico’s growing
are focused on the specialties we treat the most and for
clinical research industry?
10 years we have integrated successful students into the
A: We perform clinical trials to see which type of drugs
positions we need to fill.
and medical devices are best. In fact, two years ago we launched our molecular biology laboratory at the Hospital
Q: What are PEMEX’s main current health campaigns?
Central Sur de Alta Especialidad in Mexico City, where
A: We have permanent programs to promote health,
we are carrying out bacterial studies and soon will start
focused on child obesity, cervical and breast cancer
a genetic study of the PEMEX population. We have an
for women and prenatal care. We also perform chronic
agreement with INMEGEN to know which diseases our
degenerative diseases screenings, even in the workplace.
beneficiaries are prone to and to identify the best drugs to
We run a constant campaign on HIV and we treat around
treat them. In addition, we have a medical journal in which
700 cases, some of whom are active workers not on sick
PEMEX health professionals publish articles and research
leave. We also run campaigns aligned with the Ministry
papers. It is all part of our effort in preventive medicine.
43
VIEW FROM THE TOP
CAMPAIGNING FOR BETTER HEALTH JOSÉ REYES Director General of ISSSTE 44
Q: In addition to health services, ISSSTE works on
is to triple the number of mammographies from between
prevention through public awareness campaigns. Which
110,000 and 115,000 to 350,000. ISSSTE is raising awareness
areas are key targets?
among women between 25 and 69 years old. Although we
A: We have a number of ongoing campaigns. One such
have reduced the prevalence of cervicouterine cancer and
campaign relates to addiction prevention, particularly
the related mortality rate, the same cannot be said for breast
smoking, and targets young people through courses,
cancer. We named February Men’s Health Month because
conferences, personnel training, graphic information and
men are less likely to visit a physician than women: 63
social media. We are also drafting several campaigns against
percent of first-time doctor’s appointments are women.
overweight and obesity and their related conditions, which have a profound effect on quality of life and on the federal
Q: On the business side, what are the advantages of
budget. Twenty percent of ISSSTE’s health-allocated funds
building hospitals through PPP schemes?
were used to raise awareness of diabetes, overweight and
A: ISSSTE has an infrastructure program and fiscal resources
obesity, hypertension and cervicouterine, breast, prostate
but, due to budget adjustments, we have had to vary our
and colon cancer. ISSSTE’s annual budget amounts to MX$45
financing to continue building and expanding hospitals and
billion (US$2.5 billion) and we are spending MX$10 billion
clinics. We needed to migrate to a new scheme involving the
(US$555 million) or more just on these diseases.
private sector. ISSSTE invested over MX$4 billion (US$222 million) last year in building and expanding a number of clinics
Among specific programs, the Salud en tu Escuela (Health in
and hospitals. We have analyzed several new hospital projects
your School) campaign is focused on young people and on
in Tampico, Acapulco, Oaxaca and Mexico City and there are
the children of beneficiaries who suffer from overweight and
also some requests for new hospitals in San Luis Potosi and
obesity. This is a joint effort between players in the public
Sonora. There is a PPP hospital being built in Merida and three
health and educational spheres, such as the Ministry of
others to be tendered: Mexico City-Tlahuac, Villahermosa
Public Education (SEP) and the National Education Workers’
and Tepic. We estimate that in this federal government
Union (SNTE). Integrating teachers as health promoters and
administration’s remaining time, investments from PPP
developing permanent awareness and physical exercise
schemes could total about MX$14 billion (US$777 million).
campaigns are key objectives that will enable ISSSTE to evaluate the results at each school in the program. The
Q: What criteria helps ISSSTE to decide where a new
effort will include physicians, nurses and some students
hospital or clinic will be built?
from ISSSTE’s School of Nutrition and Dietetics. The ISSSTE
A: The location of beneficiaries and public health
en tu Dependencia (ISSSTE in your District) program is
infrastructure are the key criteria. The Ministry of Health,
focused on monitoring the health of employees. ISSSTE has
ISSSTE and IMSS have developed a strategy that prevents
identified about 570,000 diabetics among its beneficiaries.
duplication, so if there is an IMSS hospital in a community
Another campaign targets breast cancer across public health
with an ISSSTE clinic and someone at the latter needs
institutions. We integrated 25 new mammography machines
surgery, hemodynamics or cardiovascular services, these
into our facilities and we are finishing a new diagnosis center
will be subrogated to the IMSS hospital. Services will also
in one of our hospitals. Between 2016 and 2018, ISSSTE’s goal
be subrogated from IMSS to ISSSTE, which does not mean implementing a universalization program but exchanging services and prioritizing cities and states according to
The Institute of Safety and Social Services for State Workers
the demand for health services and the existing public
(ISSSTE) is the second largest of Mexico's public health
infrastructure. All public-sector agencies need to maintain
institutions, providing health and social services to almost 13
a close relationship. We also have collaboration and service-
million government workers
exchange schemes between both public and private entities.
VIEW FROM THE TOP
GOOD INFRASTRUCTURE, QUALITY CARE, LOWER PRICES ROBERTO BONILLA Director General of Hospitales San Ángel Inn 45
Q: What makes San Ángel Inn different from its
with a new business model backed up by other hospitals
competitors?
if complex treatments are needed. We opened this clinic
A: Our management model, which allows us to provide
because our customers asked us for a location where minor
patients with less costly services while delivering a long-
surgery could be performed.
term return on investment. We offer good infrastructure with quality care at substantially lower prices than our
Q: What are the main challenges and concerns for San
competitors. That is why we are the preferred hospital for
Ángel Inn?
closed-network patients and companies that manage their
A: Our main concern for the next four or five years is the
own healthcare benefits. Other hospitals target individual
patient’s access to healthcare, which mutual health insurance
patients while we want to attract businesses that will direct
coverage could solve. In Mexico, people have access to diverse
their employees to our hospitals.
health services through IMSS, ISSSTE, PEMEX and other public entities, while private coverage is scarce, with only about 7
Q: How does the hospital group keep up-to-date with
percent of the population under such plans. This percentage
technological advancements?
has not grown in the last 10 years despite an expanding middle
A: San Ángel Inn makes an effort to be up-to-date but our
class. Moreover, our main institutional clients are changing.
strategy does not require having the latest technologies. We
Banks do not want to continue using reverse quota schemes
make sure we have the modern and functional technology
and prefer to pay for social security while some insurance
to resolve 97 percent of the cases we encounter, so having
companies are considering dropping high medical-expense
state-of-the-art technology does not make sense with our
insurance on which they lose money. We need to learn to
business model. The only treatments we cannot perform
collaborate with other industry players to improve access to
because of technological limitations are radiotherapy, PET/
health. Our main challenge is in understanding how to increase
CT and some oncological treatments. We have a capable
access to private and public medical insurance.
medical team, enough technology and good infrastructure. Q: What impact do you expect to see from the model of Q: What challenges do you encounter when hiring and
chronic disease insurance?
retaining nursing staff?
A: It could improve the access to health services. Diabetes,
A: The issue is not in retention but in recruitment. The nurses
cardiovascular diseases and cancer are the main causes of
working at San Ángel Inn must have at least an undergraduate
death in Mexico. A person who has corresponding coverage
degree. Our competition regarding human talent are not
has a 30 percent chance of access to a good hospital in case
private hospitals but public, because nurses in the public
something serious happens. San Ángel Inn is creating a product
sector work only five days a week and receive better benefits
specifically for cardio-metabolic and cardiovascular disease.
than we can offer. We attempt to create a pleasant, patient-
This low-cost premium scheme is far more accessible. However,
oriented work atmosphere where nurses can grow. Within this
there is no insurance or prevention culture in Mexico. Hospitals
model, a nurse’s satisfaction does not derive from the benefits
do not focus their marketing on creating awareness about the
the hospital provides but from gratified patients. When a
need for health coverage because the existing demand for
patient has a good experience, the whole team is pleased.
their services is enough for most to perform relatively well.
Q: What plans does San Ángel Inn have to expand? A: We will finish consolidating our presence in Mexico City.
Hospitales San Ángel Inn is a hospital chain with four
We have a new hospital in Patriotismo and we are about
installations in Mexico City. It offers a wide variety of
to open a new short-stay and ambulatory clinic in Mier y
treatments and specialties, specializing in gynecology and
Pesado. This project is an opportunity to enter a new niche
obstetrics and cardiology and hemodynamics
ANALYSIS
PUBLIC-PRIVATE COLLABORATIONS BOOST SECTOR
46
The Mexican healthcare system is fragmented and many industry
is the difficulty of selling services to Seguro
experts believe that increased collaboration between the public
Popular. Hospitals have to undergo several
and private sector and within the industry could increase cost-
time-consuming registration processes so the
efficiency and lower waiting times at busy institutions
patient stream is initially slow.”
The public sector has made great advances in recent years
Alfonso additionally explains that unlike IMSS patients,
in dealing with the country’s large volume of patients
Seguro Popular patients can expect treatment in any
and in improving quality of care, but there is still room
participating hospital, which results in many patients
to improve. According to the OECD, 5.3 percent of the
traveling in from city outskirts or from more rural or less
Mexican population spent at least one night in hospital in
developed states to the big cities. “Seguro Popular was
2014, equivalent to around 6.4 million people. In addition,
created with the theory that ‘money will follow the patient,’
it reports that in the same year, an average of 2.6 doctor
so the belief is that wherever he or she goes there is a budget
consultations were carried out per capita, equaling 312
to pay for the service. The actual situation is that the federal
million visits. Outsourcing services, used in the right way, may
government gives each entity a budget targeted as money
benefit both institutions and patients, hospital operators say.
for Seguro Popular, but a given entity may not necessarily be equipped with the services specific patients need. Therefore,
Seguro Popular, one of the country’s main social security
there is a large migration of patients to Mexico City, where
institutions, does not own any hospitals itself. It outsources to
large hospitals, specialized clinics and good services can
public and private hospitals the services needed by its insured
be found. When those patients arrive at hospitals in the
patients. The agency has a catalogue of required services that
city, the center’s administrator must find a way of covering
private hospitals can address according to their capabilities
each patient’s costs because the state to which the patient
and for which they can seek accreditation. Once a hospital is
belongs will not pay,” he says.
certified, Seguro Popular can begin referring patients. IMSS does have hospital infrastructure but it is often “[The relationship] is important because of the volume of
overwhelmed with demand because it is responsible for
patients the government brings but also as a contribution
the health of over 70 million Mexicans. In this case, the
to balancing the health offering in different segments of
construction of hospitals and clinics in conjunction with the
the population,” says Miguel Castillo, Director General of
private sector may be a better option.
Hospital Sedna, which offers oncology services to Seguro Popular to treat breast, colon and prostate cancer. Due to
“What IMSS has done is take advantage of new legislation
the high incidence of those cancers in Mexico, these services
to facilitate the construction of new infrastructure, clearly
are in high demand. According to the WHO, in 2014 there
without medical care being in the hands of the private sector
were 20,444 cases of breast cancer, 14,016 cases of prostate
at any point, which is a legal impossibility,” says Mikel Arriola,
cancer and 8,651 cases of colorectal cancer in Mexico. The
Director General of IMSS. “We are having facilities built at
relationship with Seguro Popular is so fruitful that the
a faster pace, more efficiently and without the hurdles
hospital hopes to expand the number of services it offers to
associated with direct public investment. We have had
the government, looking to add general surgery and high-
bidding processes for four hospitals. We are looking to be
risk pregnancies to its list. Castillo hopes that these further
more efficient. We want to build more hospitals with less
accreditations will increase the number of patients seeking
money. We have MX$20 billion (US$1.1 billion) to build 12
treatment at the hospital.
hospitals and four of those will be through PPPs.”
Despite the many benefits for the health system, there are
The relationship between public and private entities will
still some kinks to be worked out. “Our relationship (with
continue and even expand for the foreseeable future.
the Seguro Popular) is strong but there are certain rules
Obesity, for example, is one treatment area that will benefit
that keep us from offering it more products and services,”
from the relationship. The OECD reports that more than one
says Alejandro Alfonso, CEO of ABC Medical Center.
in three people in Mexico are obese. To help alleviate the
“For every MX$1 it pays us, we have to give MX$0.19 to
issue, in 2016, Seguro Popular announced that due to the
the government. Seguro Popular does not pay VAT but
high obesity rates bariatric surgery would be offered through
as a private hospital we are not exempt. Another issue
the public sector.
VIEW FROM THE TOP
DISPARITY A CHALLENGE IN PUBLIC-PRIVATE COOPERATION ALEJANDRO ALFONSO CEO of ABC Medical Center 47
Q: How is ABC Medical Center cooperating with the
every MX$1 it pays us, we have to give MX$0.19 to the
public sector?
government. Seguro Popular does not pay VAT but as a
A: The healthcare situation in Mexico demands private
private hospital we are not exempt.
hospitals work together with the government because it is not economically viable for the government to meet healthcare
Another issue is the difficulty of selling services to
service demands by itself. The key is to find the right way
Seguro Popular. Hospitals have to undergo several time-
to make this happen to avoid the perverse incentives in the
consuming registration processes so the patient stream is
private and public sectors that pollute association. ABC
initially slow. Seguro Popular was created with the theory
Medical Center has been working with public healthcare
that “money will follow the patient,” so everywhere he or
through Seguro Popular and by offering occasional services to
she goes there will be a budget to pay for the service. The
other government institutions. As a not-for-profit organization,
actual situation is that the federal government gives each
we can afford to treat patients below cost and this is important
entity a budget targeted as money for Seguro Popular
because helping those who do not have enough resources is
but a given entity may not necessarily be equipped with
a part of our founder’s legacy. The challenge is to determine
the services specific patients need. Therefore, there is a
the price the government can pay for these services and how
large migration of patients to Mexico City, where large
economically and clinically efficient we can be as a private
hospitals, specialized clinics and good service can be
hospital when providing this aid. If there are no clear rules
found. When those patients arrive at the hospitals in the
about quality and affordability, we may find ourselves in a
city, the center’s administrator must find a way of covering
situation wherein we can no longer help the population.
patient costs because the state to which the patient belongs will not pay.
I am concerned about the decision to create general hospitals without a structured business plan. The word “general” by
The truth is that money does not follow the patient
itself might be counterproductive because it suggests the
because security systems for patient care in Mexico are
hospital can treat any manner of illness and it does not
sectored. With IMSS coverage, a patient can only go to
highlight the public’s true needs. A general hospital is not
IMSS facilities. Mexico operates a vertical system, so there
built based on a study of the population and popular diseases.
are many patients for whom there is no budget. We see
For its construction, rent is paid to a private company, which
teenagers with high-risk pregnancies camping outside
fulfils its construction and installation contract, at which point
hospitals, waiting for care without a place to sleep, and
the government takes operational control of that hospital. The
most of these are helped by civil organizations.
little money this general hospital receives is spent paying the private company and there is not enough left to treat patients,
Q: What approach could help solve the health system’s
which indebts the government. Instead, to improve existing
current situation?
services there should be an inventory of the country’s hospital
A: The solution is not easy and is not short term. First, we
capacity and an analysis of how they could be better used.
have to discuss which healthcare model we want to follow
There are empty surgical theaters at certain times of the day
with the participation of many social agents. Once the
in private hospitals that could be used by the lines of people
model is established, we can decide our course of action.
in public hospitals. Q: What is the thrust of ABC Medical’s relationship with
ABC Medical Center is a private institution in Mexico City
Seguro Popular?
that offers treatment in the fields of oncology, neurology,
A: Our relationship is strong but there are certain rules that
transplants, OB-GYN, pediatrics, traumatology, preventive
keep us from offering it more products and services. For
medicine and nutrition
VIEW FROM THE TOP
CREATING ACCESS TO TOP-FLIGHT SERVICES MISAEL URIBE President of Médica Sur 48
Q: What is Médica Sur’s strategy to ensure growth?
Q: What is your added value proposition regarding
A: Médica Sur’s growth stems from two points. First, we seek
medical tourism?
internal growth through the optimization of our processes.
A: Many people come to Mexico for plastic surgery but
This growth must be guided by a code of ethics to ensure
we want to provide even more services. We performed a
that we can provide quality service. Belonging to the JCI and
liver transplant for a 7-month-old girl who weighed 8kg
Mayo Clinic Care Network provides us a standard; however,
using 200 grams of her aunt’s liver. She is alive and she will
that is not enough because in healthcare we experience
recover. This is the kind of news we want other countries
changes every day. One major change is the increase
to hear to attract patients. More than medical tourism,
in ambulatory procedures in hospitals, which opens up
what we offer is an efficient use of resources that leads
new opportunities and leads us to the second priority for
to affordable prices. A knee or hip transplant might cost
Médica Sur: implementing external growth through a larger
US$100,000 in the US. Here it is US$40,000. We must
investment in diagnosis. Unfortunately, in Mexico there is a
follow the example of India, which has already become a
lack of confidence in diagnoses and unethical practices are
medical tourism destination for Americans. The cultural
common. There are many opportunities in this area. We will
difference and the actual distance between India and the
be able to provide tools that will lead professionals to the right
US are bigger than with Mexico, but India has talent and it
diagnoses and in doing so, open access to a top-flight service
is open to promoting it.
that is now privatized. Q: What are Mexico’s main requirements in terms of talent? Q: Which values guide Médica Sur in an increasingly
A: We need higher academic standards. Our future
competitive environment?
generations will compete with future generations from South
A: We have to work in a very competitive environment, but
Korea, India and Japan, where the pressure for excellence
we will never sacrifice the safety of a patient to economic
is part of everyday life. Mexican students should demand
profitability. In our facilities, the average stay is two days, while
more rigorous programs from their academic institutions
in public hospitals it is approximately 10 days. We are also the
to compete with the rest of the world. At Médica Sur, the
only hospital in Mexico that publicly reports deaths that occur
requirements to get into our program are very high, so our
in our facilities as well as infections and accidents.
residents are increasingly better. Only students with a GPA above 9.5 can apply and we choose only 20 percent of those.
Q: How are you delivering this message to the industry?
We have around 120 residents and interns and every year we
A: We created the Médica Sur Network to share our
admit between 30 to 40 students. We also believe that the
ideal of making things better in Mexico. So far, we
learning experience and academic results are better when
have seven members and we have allies in Los Cabos,
physicians work with a small group of students.
Queretaro, San Miguel de Allende and Merida. They pay a membership fee and we share our knowledge with them.
Q: What role does Médica Sur want to play in the Mexican
This network allows us to build a common front, nurture
health industry?
better relationships with insurance companies, consolidate
A: We do not want to fit into a role; we want to become
purchases and share expenses.
an example of good processes in the national and international health industry. We want to show the industry that a health service focused on the patient is
Médica Sur is a private hospital complex. With 31 laboratories
the most profitable model and that a sense of humanity
in Mexico City, one women’s clinic and two hospitals, it is a
and responsibility are the main drivers of return. We will
member of the JCI and the Mayo Clinic Care Network. Médica
also continue moving forward with technology and social
Sur also has a Pharmacovigilance Center
developments. We are an institution, not a business.
VIEW FROM THE TOP
WHEN GENEROSITY, GROWTH GO HAND-IN-HAND JUAN GALINDO Medical Director of Christus Muguerza Sistema de Salud 49
Q: How does Grupo Christus Muguerza differ from other
per year and a two-month salary bonus at the end of the
hospital groups?
year. This creates unequal working conditions. Some choose
A: We are the only healthcare system to operate in Mexico as
to stay at Christus Muguerza because of our work ethic.
a nonprofit organization, although fiscally we still pay taxes because we are a large group. However, no partner takes any
There are also 158 postgraduate residents studying a
of the profit for themselves and profit is entirely reinvested
specialty in our hospitals. This costs the group MX$50 million
in infrastructure and community service.
(US$2.7 million) annually and it bears the full cost. Although the government pays for medical residencies throughout the
Reaching those most in need is fundamental in our day-to-
country, private hospitals receive no subsidiary.
day. Christus Muguerza works with Operation Smile and has already operated on around 500 children with cleft lips free
Q: What steps is Grupo Christus Muguerza taking to expand
of charge. In 2016, Hospital Alta Especialidad operated on 12
its reach and what are its priority areas?
children with congenital heart disease. These patients reach
A: Surgical centers are moving away from hospitals, often
our hospital through the charity Cardio Chavitos. A North-
due to costs. We have acquired an ambulatory center in
American pediatric cardiology hospital helps us with the
San Luis Potosi and there is a center being remodeled in
equipment and teams are mixed Mexican-American.
Irapuato that will begin operating as a Christus Muguerza surgical ambulatory center in August 2017. One of the largest
Hospital Conchita in Monterrey is about to start a program
primary-care centers in Monterrey will also become a surgical
in laparoscopic gynecology surgery for women with
ambulatory center and will most likely open in 2018.
gynecological problems. There will be four groups of around 16 patients. This program does not only help people in need,
In September 2017, we will begin constructing a fifth
it also enables the head gynecologist to teach others how
hospital in Monterrey, It will be the first hospital in Mexico
to operate laparoscopically. Also, Hospital Del Parque, in
to follow a lean design, built with Perkins & Will. We
Chihuahua, has five years of experience providing free spinal
created an initial design and the firm is now drawing up
surgery for children with scoliosis or deformities.
architectural plans based on our needs. I want it to be the first sustainable hospital, with a water treatment plant,
Q: How has the hospital’s nursing program developed?
energy sourced from solar panels and we are evaluating
A: Christus Muguerza is involved in two nursing programs:
whether to integrate oxygen processing, a common
one with UDEM and one with the University of Chihuahua
practice in France and Canada.
as part of its community service program. The nursing school has grown in recent years and now has around 600
In the next six months, we will begin performing complete
students, whereas in previous years it saw averages of 120-
transplants in Hospital Alta Especialidad, the largest
140. UDEM contributes to the program with its academic
hospital in our system. We will begin transplanting
value. It has long been a partner of ours as it used to own
pancreases, for which so far in Mexico there have only
the Clínica Conchita before we acquired it. We also send
been isolated efforts. This will be in partnership with the
bachelor’s and master’s students to train in the US. We
Northwestern University Hospital in the US.
understand that not all the students will return to work at one of Christus Muguerza’s hospitals but that does not matter. Nursing is rewarded unfairly in Mexico because a
Christus Muguerza Sistema de Salud is a hospital group that
company has to take charge of hiring, taxes and insurance,
operates in Mexico and the south of the US. The group opened
and is thus not able to offer the same benefits as the public
its first hospital in Monterrey in 1934, and now manages nine
sector. IMSS, however, offers nurses three months’ holiday
hospitals and 18 medical centers across the country
INSIGHT
INTERNATIONALIZATION ESSENTIAL FOR MEXICAN HOSPITALS RAFAEL ESPINO Director General of Amerimed 50
A boost in federal government support would bolster and
sick. “With more than 20 years of experience, our network has
expand Mexico’s medical tourism, creating jobs and helping
received the majority of foreign patients in the country,” says
to keep doctors from leaving for greener pastures, says Rafael
Espino. The hospital, which is focused on providing quality
Espino, Director General of Amerimed, a hospital network
services in strategic locations, has a patient profile that breaks
focused on treating tourists. “We need a coherent medical
down to 70 percent Mexican tourists and 30 percent foreign.
tourism policy. The Ministry of Health and the Ministry of Tourism should work together to promote the country’s
According to Espino, Amerimed services are mainly delivered
advantages through federal funding, better financing and
to the private sector but as one of the few well-equipped
business promotion.”
hospitals in its chosen locations, it frequently supports IMSS and ISSSTE with X-rays, CT scans, MRIs and laboratory
The lack of a cohesive policy is keeping the hospital on the
services. The hospital network also participates every year in
fringes of the medical tourism industry despite the low prices
government tenders.
and top-notch doctors and nurses that make Mexico an attractive destination to receive medical care. “The country has
To ensure its growth ambitions, Amerimed is working to
access to state-of-the-art equipment from the US or Europe at
improve quality and the number of specialties available at its
a good price, because Mexico has trade agreements with most
hospitals. It is also obtaining JCI certification for both facilities
western countries,” says Espino. “We are more focused on
in Cozumel and in Cancun. “The JCI has good recognition
emergencies or consultancies. Medical tourism, which consists
abroad and it is important for us as an international health
of programmed surgeries or treatment, represents only 3 or
service provider to be certified by the most important
4 percent of our activities,” he says.
international agencies,” Espino says. Amerimed already is certified by the General Health Council in Mexico and the
Espino says better policies could increase employment
Canadian Accreditation Council. “We are the only hospital in
and keep doctors in the country, giving Mexican cities an
Cozumel that is internationally certified. This is important since
aggregated value. He also cites changes in US healthcare
the island is a frequent destination for the main world cruise
policies such as the current US administration’s rebuttal of
lines, which like to have quality medical facilities available on
the Affordable Care Act, that could increase the number of
land,” says Espino.
US tourists traveling abroad for medical care. That number, according to Patients Without Borders, reached 1.4 million in
Amerimed is also looking forward to branching into other
2016. “If healthcare prices do not drop with the suspension
tourism locations. The company is building a boutique hospital
of the Affordable Care Act (Obamacare), Mexico will be the
in Playa del Carmen, which will have a variety of medical
first option for Americans due to proximity, the number of
specialties, an intensive care area and two surgery rooms.
facilities near the border and low prices further favored by
There also are plans to open a small hospital in Acapulco.
the peso’s depreciation.”
“This will be a new direction for the business model because 97 percent of the tourists in Acapulco are Mexicans, so the
The exchange rate, however, might favor his business. “Mexico
business will be focused on national patients instead of
could become cheaper for foreigners, therefore more tourists
international ones,” Espino says.
will be attracted to the country and the demand for hospital services will increase.”
To execute this growth, Amerimed has partnered with a private equity fund in the US and is looking for additional
Amerimed has branches in two of Mexico’s main tourist
funding to increase its infrastructure and services. “We are
destinations: Cancun and Cozumel. Most of its patients are
open to working with other private equity funds that want to
vacationers who have been in an accident or have gotten
invest in the Mexican healthcare sector,” Espino says.
VIEW FROM THE TOP
VARIETY OF SPECIALTIES SPURS GENERAL HOSPITAL AMBITION MIGUEL CASTILLO Director General of Hospital Sedna 51
Q: In which areas have you been investing?
Q: How do you work with the public sector?
A: We have been working on updating our diagnostic
A: We do work with the government and tend to many
imaging equipment. We use German machines in this area
patients through the Seguro Popular, mostly with breast
and next year we want to renew our surgical equipment
cancer. Our partner’s oncological center is also accredited
and to invest in an advanced laparoscopic surgical theater
to tend to rectal, colon and prostate cancer. We are the first
so we can offer this service. The hospital is 10 years old
hospital in El Bajio to be accredited to offer recto-colon
already and in the health industry you have to be constantly
cancer treatment. When working with the Seguro Popular,
updating. Equipment becomes obsolete and there are
a hospital must be accredited in certain specialties from
constantly new inventions to help diagnose and care for
the institution’s catalogue of services. Once accredited, the
patients. We want to offer the best service to our patients
hospital tells the institution what space it has available and
and stay up to date.
based on that, patients are sent to the hospital. We provide the same service when working through the government
Q: To what capacity does the hospital operate and what
as we do with private patients.
are your expansion plans? A: We are operating at around 60 percent of our capacity.
Q: What is the strategy behind offering high-risk pregnancy
The hospital has been expanding significantly since we
services over normal pregnancy services?
changed our focus from women to become a general
A: High-risk pregnancies are in the Seguro Popular catalogue.
hospital. From 2015-2016, we grew 50 percent and we are
There are many institutions that offer services for general
looking at growth of 30-40 percent for 2016-2017. We have
pregnancies but very few offer a high-risk specialty. Given
achieved this goal through our various client segments,
our history in gynecology, we have the experience and the
our quality of service and by seeking out doctors and
expertise, so we are confident we can offer this service. We
insurance companies that do business with us because we
do not want to open specialties in which we cannot offer the
offer much transparency. We also see doctors as clients
required service.
and we want them to enjoy their time here. They are treated with a super-personalized service and we want
Q: What are the hospital’s short-term plans?
them to know that there are many people available to help
A: We would like to continue building on our vision of
them with anything they need.
humane treatment. This begins with our people and so in 2017 we will be investing greatly in them. We also have
Q: How do you attract patients and what are the advertising
areas ready for growth and we could increase our capacity
rules surrounding hospitals?
by 40 percent. We have the space to grow and we have
A: Customer service is one of our main values and safety
140 doctor’s offices that could also grow by 20 percent. We
is our top priority, followed by service. We mostly attract
want to focus on obesity and bariatric surgery, one of the
patients with our service. We firmly believe that by providing
country’s main challenges — epidemiological alerts have
a service that is humane and friendly, patients will come back
been issued for diabetes and overweight in the country. We
to us time and time again and will recommend us. There
are building an obesity clinic at the hospital for the integral
is also the patient’s family, doctors and insurers, for whom
treatment of this condition and metabolic disorders.
we have different lines of appeal. COFEPRIS’ advertising regulations cover the entire health industry. Within that, there are rules that cover the advertising of services. As a hospital,
Hospital Sedna is a private hospital located in Mexico City
we can advertise; it is not very restrictive. More than a legal
that originally focused on female health but has expanded
restriction, we have a moral obligation to tell the truth so
to offer over 30 specialties and aims to become a general
that the business can be sustainable.
hospital offering integral services
INFOGRAPHIC
NATIONAL HEALTH SYSTEM UNDER THE SPOTLIGHT Born in the early 20th century, Mexico’s National Health
boosting competition among providers and
System has evolved through the years. Besides the widely
promoting the effectiveness of hospitals.
popular IMSS, the system now includes state oil giant PEMEX and military facilities
KPMG agrees with this needed coordination and goes even further. According to the financial services company, “a population’s health is an indispensable
faces. OECD recommendations to strengthen the Mexican
value for economic development and social welfare.” This is
health system include expanding coordination between
why better coordination between financial services firms,
institutions, aligning the standardization of processes,
suppliers, associations and institutions is required.
121 million Mexicans
POPULATION ACCORDINGAS OF AFFILIATES OF DISTRIBUTION EACH HEALTH INSTITUTION TO HEALTH INSTITUTION (DEC. 2015 IN MILLIONS) DEC. 2015 (millions)
0
and 49 percent are men. • 1 percent: The annual growth rate of the population
Population aged over 65 will grow, impacting health services
| IM
S
|
2
• OECD average:
2030
80 years
m
2020
ily
2017
IMSS affiliated population
75 years
lders
74,032,437
• Life expectancy:
t s ho
10%
7%
6
IMSS IN IN 2015 IMSSAFFILIATES AFFILIATED PERCENTAGE (2015) RA SPE RO P S-
gh Ri
10
1,824,595
10
Other public institutions
1,893,946
20
PEMEX, SEDENA, SEMAR
• 51 percent of Mexicans are women
30
Seguro Popular
Mexico in 2015
12,973,731
• 2,353,596 births were recorded in
40
IMSS
2.2 children per woman
2,189,514
50
Private institutions
60
57,105,622
70
2050 projection
ISSSTE
• 150 million:
74,032,437
80
• Implies making sure people have access to health services without affecting their finances • Upholds quality and effectiveness in promoting healthcare, as well as prevention, diagnosis, treatment, physical therapy and palliative care
Universal health coverage is a concept established by the World Health Organization.
Fa
GOING “UNIVERSAL”
|
52
As the system has grown, so too have the challenges it
Insured Workers
Insured Pensioned
Nonworkers Pensioned non-IMSS 4.69% Pensioned 24.16% Workers Pensioned IMSS 0.36% Non-Affiliated non-IMSS Nonworkers 10.71% Pensioned 30.02% Insured AffiliatedPensioned IMSS IMSS-PROSPERA 3.41% Pensioned 16.44% IMSSPROSPERA 10.22% Non-Affiliated
THE STORY STARTED 112 YEARS AGO
1905
6%
Founding of Mexico's
of Mexico's GDP is attributed to the health sector
Hospital General
1917
Founding of the General Health Council (CSG) and the Public Health Department
PERCENTAGE OF POPULATION THAT WORKED IN THE INFORMAL SECTOR PER STATE IN Q416
1922
Founding of the Public Health School of Mexico
Aguascalientes Baja California
1931
Baja California South
Rural hygiene program. Vaccination, school hygiene
Campeche
and mother-child services
Coahuila Colima
1937
Chiapas Chihuahua
Founding of the Ministry of Public Assistance after the merger of the
Durango
Department of Child
Guanajuato Guerrero Hidalgo Jalisco
Social Assistance and the Board of Public Welfare
Increase in health spending
1943
US$500
Michoacan
per capita in 2016
Mexico City Morelos
Salubrity and Assistance
US$570
Nayarit Nuevo Leon Oaxaca
Founding of the Ministry of
(today the Ministry of
per capita in 2020
Health), after a merger between the Department
Puebla
of Public Salubrity and
Queretaro
the Ministry of Public
Quintana Roo
Assistance
San Luis Potosi Sinaloa
1944
Sonora State of Mexico
IMSS started providing services in Mexico City. In 1952, construction began
Tabasco
on Hospital La Raza; today,
Tamaulipas
the first IMSS Hospital
Tlaxcala
Center is among the most
Veracruz
important of the country
Yucatan Zacatecas 0
20
40
60
80
100
1960 Founding
of ISSSTE
——57.2% National average
1987 2003
Founding of the National Institute of Public Health
Founding of the Seguro Popular
CHALLENGES TO FACE The Mexican Health System has many challenges. Chief among them is a lack of infrastructure.
The bad: Rising obesity, tobacco use and chronic illness (*)
The good: Steady reduction in infectious diseases
*Cardiovascular disease, cancer and diabetes are the most frequent Sources: IMSS, KPMG, INEGI, OECD, WEF, Economist Intelligence Unit
For every 1,000 patients who need magnetic resonance imaging, there are: OECD average 3.3 medics 4.8 hospital beds
In Mexico 2.5 medics 1.6 hospital beds
53
INSIGHT
FOCUSED GROWTH TAKING MONTERREY FORWARD FRANCISCO VILLARREAL Medical Director of Swiss Hospital 54
With declining fertility rates and increased life expectancy,
or implant valves. In addition, patient recuperation after
Mexico’s population is slowly but surely aging. With a
hemodynamics is immediate as there is no surgical
more advanced age comes a host of health issues not
opening and no need to stay in intensive care,” explains
experienced in younger years, including dementia, a
Villarreal, adding that he hopes the hospital will soon be
degeneration in ocular health and a weaker heart, all of
approved to perform these surgeries.
which require care. Transplantations are also high on the hospital’s list. “After The increased need for heart care has not escaped the
hemodynamics, we would like to begin offering organ
notice of surgical hospital Swiss Hospital in Monterrey, run
and tissue transplants, mainly kidneys as they are most in
by Medical Director Francisco Villarreal. Villarreal noted
demand in Mexico and are not overly complicated,” says
an increase in the number of elderly patients in their
Villarreal. In addition to offering this further specialty,
emergency and intensive care units toward the end of 2016
Villarreal says that by 2018-2019 Swiss Hospital would
and the beginning of 2017. “Over recent months, we have
become a teaching hospital, having already reached an
been asked to offer hemodynamics.
agreement with Del Valle University
There have been so many patients
in the State of Mexico.
that we have had to channel them to other hospitals. We are now working on a business plan with investors to offer these services,” says Villarreal. The advance of the technology has
101,600 people are admitted to hospital yearly for congestive heart failure in Mexico
led to a reduction of open heart
“The number of places available in the National Medicine Exam versus the number of students is a problem, mostly of planning. We cannot create so many medical faculties if there is nowhere to train
surgeries thanks to techniques such as heart valves or
the students. Around 40,000 students graduate annually,
through hemodynamics. The Hemodynamics Society
yet there are only 7,000-8,000 places. Those 32,000
defines the science as “an important part of cardiovascular
students that do not make it go to pharmacies and open
physiology dealing with the forces the pump (the heart) has
a consultancy, earning MX$50 (US$2.8) per appointment
to develop to circulate blood through the cardiovascular
after studying medicine because there are not enough
system. Adequate blood circulation (blood flow) is a
hospitals,” says Villarreal, adding that private hospitals
necessary condition for adequate supply of oxygen to
opening up to teaching may be a type of salvation that
all tissues.” Two of the main issues in hemodynamics are
allows more doctors to specialize. In addition, he explains
hypertension and congestive heart failure and, according
that while some areas are high in demand, others are
to ENSANUT 2016, 25.5 percent or 32 million Mexican
forgotten. “Everyone wants to be a general surgeon, a
adults are hypertensive. The OECD estimates that 101,600
pediatrician, oncologist or anesthetist heart surgeon. No
people are admitted to hospital yearly for congestive heart
one wants to be a pathologist or a geneticist, for example.
failure in Mexico.
Students want the adventurous specialties like birthing. They want to see blood,” he adds.
Despite the number of hemodynamic issues, treatment has simplified greatly over the past 30 years. “By inserting a
Ultimately, the problem lies with the high number of
catheter and injecting a substance a blockage is cleared
students accepted to study medicine and the few
and the patient goes home. The process is simple and
residencies available in hospitals. “We need to reduce
easy but bears a high cost. The number of heart surgeries
the number of students accepted to study medicine. Why
has been drastically reduced, as many use hemodynamics
produce more doctors than the country needs?”
INSIGHT
QUICK TURNAROUND FOR SIMPLE SURGERIES RICARDO BOJALIL Director General of AsMed 55
The conundrum of receiving medical care in Mexico is
ambulatory accreditation. “It is a daily commitment to
this: the public sector has long wait times but the private
patient safety and security measures. We are making
sector is expensive. Mexico City clinic AsMed believes the
some changes to the plans of the building but processes
answer lies in its business model of providing ambulatory
are continually improved upon.”
and short-stay care. In addition, the clinic maintains low costs for medical AsMed’s model relies on alliances with doctors, explains
devices, buying only the equipment needed to perform
Ricardo Bojalil, Director General of AsMed. When these
the services it offers and looking for machines that have
doctors recommend a minor surgery to a patient, they
several functions. “In this way, the same machine or
both go to AsMed’s clinic to perform the procedure in
laparoscopic instrument can be used to perform different
a high-tech environment and in a short amount of time.
surgeries, especially since those we offer are not very
For the patient, the procedure is offered at a lower price
complicated,” Bojalil says. “We offer the best technology
than in most hospitals, which is also an attractive model
at affordable prices.”
for insurance companies because they would then have
There are 340 doctors registered with AsMed in Mexico City
fewer costs to reimburse. “We are continually trying to make our operations more efficient, so we can lower our prices even further, while maintaining quality, processes and certification,” says Bojalil, adding that although the clinic’s target is not the public sector, indirectly it is involved in that sphere because it works with the third party that performs hemodialysis for IMSS. “We take care of part of its
Although still small, the company is already giving back
contract, performing hemodialysis here in the clinic and
to the community. Since 2016, it has participated in
taking care of vascular access,” says Bojalil.
Cinépolis’ ophthalmological charity program Del Amor Nace la Vista (Sight is Born from Love), performing
This is a market with great potential. According to 2014
around 15-20 monthly surgeries for the beneficiaries of
INEGI figures, the value of ambulatory care services
the program. “We dedicate one or two days per month
represents almost 21 percent of paid health services in
to performing these procedures for Del Amor Nace la
Mexico, which means a monetary value of MX$190.6 billion
Vista,” Bojalil specifies.
(US$10.6 billion), 0.9 percent of GDP. This is only slightly less than the value of hospital services, representing 28
The company is validating its business model and then
percent of paid health services, MX$254.2 billion (US$14.1
hopes to scale across Mexico. “We have made some
billion) or 1.2 percent of GDP. Patients can be assured
adjustments from the first model, moving from a fully
they are receiving top-of-the-range care, says Bojalil.
ambulatory model to short-stay surgeries.” In 2016, AsMed
AsMed continuously works to maintain its accreditations;
saw around 30 percent growth. This is much lower than
the clinic will need to renew its CGS certification at the
the growth rate of 100 percent seen in past years. Bojalil
end of 2017 but Bojalil says no extra effort will be needed
explains that the clinic focused on making adjustments
because the clinic strives to maintain high standards year
and maintaining quality rather than expanding. Currently
in and year out, regardless of whether the hospital is
operating at 60 percent capacity, its target is to reach
under audit. It is also looking to receive international
80 percent by the end of 2017. It will also expand: Bojalil
validation, having recently decided to aim for JCI
says the clinic will open two new operating rooms in 2017.
VIEW FROM THE TOP
MEXICAN COST-REDUCING TECHNIQUES TO HIT EUROPE JAIME CERVANTES CEO of Grupo Vitalmex 56
Q: Which of your products differentiate you from your
In parallel, we are extending our capabilities to the private
competition?
market through focused investments.
A: The first product we offer to public institutions are personalized solutions based on specific health needs and
Another growth strategy we are analyzing is the
challenges. This product has worked well in Mexico because
development of our own clinics and hospitals with a focus on
it offers flexibility for public healthcare providers. We are
the treatment of noncommunicable diseases and minimally
working with three imaging clinics in the north and south
invasive surgery. The primary causes of death worldwide
regions of Mexico, where we are looking to improve access
are cardiovascular diseases, followed by cancer. Vitalmex is
to diagnoses for local communities. The second product we
an expert in treating these ailments and that is where our
offer is integrated services, a pay-per-procedure strategy
development plans also focus. This is a high-growth area
for elective surgeries and procedures. The hospital or
in healthcare and we are carrying out market research to
clinic pays us for completed procedures, which means
analyze possibilities in that segment.
the customer does not need to invest in fixed assets and inventories to offer health services. It is a win-win situation
Finally, we believe there are opportunities to export our
because we profit through the correct management of
business model. We are successful in Mexico and the
economies of scale in the procurement of medical devices,
healthcare challenges that we face and the given services
high logistics efficiency and high productivity with our
are similar in many countries.
latest-generation equipment. Our third product is inventory management. We are experts in transporting medical items
Q: Why expand to Europe when many exalt the
and devices. Because of the volume that we manage in 210
opportunities to be found in Mexico?
hospitals in the public sector, we offer this service to private
A: I believe that our business model is replicable in many
hospitals as well with significant reductions in variable
countries because healthcare challenges and trends are
costs and permanent availability of materials. Our fourth
similar to those in Mexico. We already have a great deal
product is the management of health centers and hospitals.
of knowledge of integrated services and believe there
Our vision focuses on three segments: infrastructure
are many opportunities to create efficiencies for existing
development for the public health system, working with
hospitals in other countries. What we offer is a proven
insurance companies to reduce the cost of premiums
model to help them reduce their capital investment
and satisfying the needs of patients at the bottom of the
costs, increase their productivity, optimize their installed
socioeconomic pyramid through micro-credits.
capacity and improve quality indicators, as well as treatment techniques.
Q: What are your expansion plans over the next several years? A: Our plans detail three strategic lines of development and
Mexico is a market with a great deal of potential. However,
growth from two main sources. The first line is to maintain
there are also many opportunities abroad, in both emerging
business with our public sector clients. The main products
and mature markets. In places like Germany, Switzerland,
we offer to public institutions are personalized solutions
the UK, France, the US and Austria, the cost of medical
designed to address the national health coverage challenge.
devices and disposables is increasingly high. In those countries, hospitals and insurance companies are looking to reduce costs and we believe that our integrated solutions
Vitalmex is a consultant that helps clients improve their business
are an attractive and proven way to do so. For example, the
model. It has three main lines of business: imaging diagnostics,
owner of 12 hospitals in Switzerland invited us to evaluate
surgery and the treatment of chronic diseases. Originally
their operations. It turned out that we could reduce their
established in Mexico, it has now set its sights abroad
costs by around 15 percent through integrated services.
VIEW FROM THE TOP
LITTLE, BUT PROMISING, CHANGE ÁNGELA SPATHAROU Partner at McKinsey & Company 57
Q: Last year, you told MHR that companies were not making
basic care. For example, access to primary care in doctors’
drastic changes in the face of global economic challenges.
offices located in pharmacies out-of-pocket. The theme of
What is your view now?
effective and timely access is vital for Mexico.
A: In both the public and private sectors, we have seen more significant efforts to reduce costs, which have taken different
Quality remains another priority issue. Different systems
forms. Organizations are delivering more consistently against
in Mexico recognize there is a lot of internal variation and
programs they have developed in previous years and are
even more variation across systems. If this is not addressed
looking forward to a tangible impact by 2018.
within the next few years, it should become a clear priority for any next administration. This is one of the important topics
In the private health provider and insurance sectors, many
people will put on the table. Leaving quality aside, there
organizations are looking more drastically to leverage digital
has been progress in cost reductions and efficiency efforts.
and advanced analytics tools. In some cases, this is generated
Many initiatives have been in the media like the consolidated
by the local market environment and led locally; in others,
purchases but there is still ground to cover.
this may be an area of focus led by headquarters that are abroad. There is definitely a step-change, meaning it is not just
Innovation is emerging, often through interesting startups, but
business as usual but quite often a part of a comprehensive
there has been much less investment in Mexico to-date than
effort to revolutionize core processes and improve customer
in other geographies. Start-ups at different levels of maturity
experience and retention. This is where digital has diverse
need to undergo different rounds of financing and access to
functionality, supporting cost reduction, growth and customer
funds for innovation in Mexico remains an issue. While there is
experience improvements.
more access to funding now than before, it is still not enough to sustain a robust market. The startup market is particularly
Q: To what extent are digital advances penetrating hospitals?
difficult on the retail side. If a model relies on consumers
A: It differs between the public and private sectors. In the
signing up and paying a small amount each month, investors
public sector, there seems to be an issue of “bottlenecking”
often find between two and three years down the line that
in many organizations in how much can be done to improve
the numbers may not materialize. The quickest avenue to
information-management systems or to introduce analytics
market is still through an institutional buyer. Recently, we were
and digital platforms on a national scale. There are often
talking to a start-up that offers micro-insurance to individual
small, grass-roots innovative initiatives in individual hospitals
consumers for healthcare services but it is now morphing
or regions, but these can only be scaled up through the
into a company providing care management products to
center. There are still problems around digitalization,
institutional buyers interested in capping their employee or
with frequent delays in core programs that go back a few
insured risk – a B2B model. Speaking broadly, there is a large
years. In the private sector, the situation is a little different.
amount of insecurity in the Mexican labor force. Consumers
Particularly, the problems of health insurance businesses in
with poor job security may not want to commit to regular
Mexico within international firms that are faced locally have
installments. The percentage of people in the private health
often been addressed in other geographies and solutions
insurance market is still relatively small; typically the largest
can be deployed at speed.
part is sponsored through employer coverage.
Q: What are the most prominent issues you have noticed? A: There is still a general issue of access through the systems,
McKinsey & Company is a global management consulting firm
both in terms of specialized care, where there are many
that serves leading businesses, governments, NGOs and not-for-
delays, and in basic access to primary care. What we have
profits. It is the largest and longest-established management-
seen is consumers finding other avenues to secure access to
consulting firm in Mexico, working in every major sector
VIEW FROM THE TOP
REAL DATA ANALYSIS IMPACTS RESULTS LUCAS OLMEDO CEO of Fligoo 58
Q: What makes Fligoo different from its competitors in
A: We often go to a warehouse and find boxes of paper,
terms of added value?
which is not organized; it is hard to find a person’s file.
A: We compete directly with IBM Watson Health. We
Fligoo strives to show impact and results in one quarter,
have close relations with the company in San Francisco
to show clients that, although they may have nothing
as we share an office. However, it did not create the
today, in one quarter they will have some data and some
algorithms or technology it uses. IBM Watson Health’s
analysis. We have scanned millions of sheets and forms.
focus is mostly consulting, so they implement a solution and then sell another and another. It will cost millions
It is true that companies see challenges in digitalizing.
and take years. Fligoo delivers a much faster impact and
They struggle to think about data when they do not even
identifies a client’s exact needs. Finally, we built all the
have digital processes. We explain we can do it all for
technology in-house. All our employees are engineers
them and structure the data. We explain it is not a huge
with a strong background in data and a lot of experience.
investment and does not take a lot of time. Thinking of Big Data, ArtificiaI Inteligence (AI) and analytics can
Q: What are the first steps to be taken in a hospital that
seem complicated for those who do not have a tech
does not have electronic medical records?
background but we can implement it easily.
A: The first step is data collection. This can be challenging in places with no digital records or prescriptions, so we
Q: How adaptable are your solutions to clients?
must analyze where the information should be taken from.
A: That is our main focus when we create a product.
Most times it is a mess, so we must recognize and identify
We know that our solutions have to be easy to integrate
the information that is available and make it digital. The
and without taking a long time to implement. A client
second step is to identify what will help a client or the
does not want to spend a year implementing a piece of
industry from the information available. Many companies
software, paying for engineers and hoping it will work.
try to begin analyzing data as soon as possible but first
Our solutions are therefore very tweakable, ad-hoc for
we must understand the company’s vision and which
each client. We ask them what they want to accomplish,
elements will help them get there, as well as identify
what is most important for them and then adjust the
patterns and key factors in the data. The third step is to
algorithm accordingly to make it work for that client.
develop the solution, the algorithm or technology that can
Technology must be able to adapt to clients that have
process millions of pieces of data and extract the most
had a system in place for 10-15 years and are reluctant to
important information to come to conclusions must faster.
change. We must make it as easy as possible for them.
Many companies say they do data analysis and that they are innovative but we truly impact a company’s results; we
Q: What is your strategy to grow the company?
try to decrease their costs, increase revenue and profits,
A: We have plans to open an office in Mexico City, another
accelerate processes and save employee claim costs.
in Barcelona and in 2018 we would like to go to Asia, perhaps to Singapore, Hong Kong or Tokyo. We will be
Q: What are the main challenges you have encountered in
investing a lot in expansion in 2017-2018 and trying to
implementing solutions? How have you overcome them?
show how good we are and how we can solve problems globally. We work in other sectors too, such as finance and banking, although healthcare represents 60-70
Fligoo is a US-based company that provides data solutions.
percent of our business. Expanding across countries and
It aims to solve complex problems and provide extraordinary
sectors simultaneously is a big challenge. We have also
results, and has the mission of democratizing world opportunities
just confirmed we will be opening new business units
through technology and innovation
for education.
FLIGOO CASE STUDIES
IMPROVING ELECTRONIC HEALTH/MEDICAL RECORDS USABILITY THROUGH SEARCH AND DICTIONARY SYNONYM DATABASES CHALLENGE
The company was able to improve the usability of all its
The client needed to improve the search
products through search speed, and reduced the number
component for all its products since it would
of mistakes in health records in less time than expected.
not deliver an accurate result unless the user
We adapted our search engine to its platforms in a way
typed the exact name, which was unusual,
that is optimized for health vocabulary, we built a database
especially for non-technicians. A mistake in
that relates the synonyms that each name has across all
a record can have an impact on a patient’s
health dictionaries and we applied machine learning based
life. The health system has a large and
on the specific user and the population to provide the most
complex vocabulary. The name of conditions,
accurate results.
medications, immunizations and diagnoses are difficult to learn and even more to spell
SOLUTION
for most people. The search engine would not
Fligoo has a proprietary search engine that combines
understand typos, partial words, words in a
phonetic, spelling and machine-learning algorithms that
different order or synonyms. The probability of
understand typos, words that have a similar phonetic
not finding the desired result was high.
composition and it is optimized to search for partial words or sentences. The expected time for development was two
OUTCOME
months, with under 80 percent accuracy, but we delivered
In three weeks we were able to predict what the user was
it in three weeks with 99 percent accuracy at 34 percent
looking for with 99 percent accuracy with three letters.
of the cost expected.
REDUCING REVENUE CYCLE MANAGEMENT COSTS WITH MACHINE LEARNING CHALLENGE
improved progressively as the machine learned about cases
The client needed to significantly reduce costs
and the company saved millions in useless billing costs.
and improve its complex and expensive health revenue cycle that employs multiple channels
SOLUTION
to collect from all payers regardless of the
A mixed in-house and nearshore Fligoo team composed
case. The management platform works with
of eight senior engineers worked on this project, applying
the cycle of claims submission, medical coding,
their expertise in the industry and with Big Data. The project
charge capturing, payment posting, denial
kicked off on-site in the client’s office for four weeks and
management services and account receivables.
was continued remotely from San Francisco and Argentina,
Even though it is a core initiative, people from
with the leaders traveling to the company’s site every four
other projects cannot be relocated and building
weeks to keep the project going almost as if on-site while
a new internal team is too expensive and would
being efficient on budget as well.
delay the process for months of useless billing costs.
We mined the company’s complete history of cases with machine learning to identify patterns among customers,
OUTCOME
cases and response behavior in the past to each stage
The solution catalogued cases into categories using data
of the cycle (answered, partially paid, completely paid,
on treatments, insurance, bill amounts and credit scores,
appealed, etc.). We were able to understand the different
among others, identified the optimum channels and
kinds of cases the company usually dealt with and built a
timing for communication and determined the maximum
model that analyzed every situation in real time to define
investment that should be made per case. Conversion rates
the optimum collection procedure.
59
The manufacturing of prolonged liberation capsules
BIG PHARMA
3
Besides better services, patients also require access to new innovative medicines, which in Mexico can take years. Due to increasingly constrained public sector budgets, the pace of purchasing expensive, innovative or new medicines is gradually slowing. As a result, Big Pharma companies have been turning ever more to the private sector for sales and growth. However, many Big Pharma companies have also been impacted by world events such as the election of US President Donald Trump, the pesoâ&#x20AC;&#x2122;s depreciation and worldwide economic and political uncertainty. Caution has become the rule of thumb for many companies.
This chapter will provide an overview of the largest pharmaceutical companies in Mexico, focusing on the economic challenges they face and how to overcome them, how they are ensuring patients have access to their products, their recently released drugs and the medicines they have in the pipeline. Interviews held with the CEOs and Director Generals of the sectorâ&#x20AC;&#x2122;s biggest players reveal how important Mexico is to their Latin American and global strategy. Insightful Q&As, informative articles and original analyses bring this key segment into focus.
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CHAPTER 3: BIG PHARMA 64
ANALYSIS: Uncertainty for the Present, Hope for the Future
66
VIEW FROM THE TOP: Pedro Galvis, Merck
68
VIEW FROM THE TOP: Félix Scott, Sanofi
69
VIEW FROM THE TOP: Raúl Camarena, Aspen Labs
70
VIEW FROM THE TOP: Rodrigo Puga, Pfizer
71
INSIGHT: Mario Sturion, Janssen
72
VIEW FROM THE TOP: Karel Fucikovsky, Pierre Fabre Médicament
75
ROUNDTABLE: What are the Greatest Challenges Pharmaceutical Companies Face?
76
VIEW FROM THE TOP: Alexis Serlin, Novartis
77
ANALYSIS: Pharmaceutical Deals Completed in 3Q16 Through 2Q17 over US$1 Billion
78
VIEW FROM THE TOP: Oscar Parra, Lundbeck
80
VIEW FROM THE TOP: Vincenzo D’Elia, Alfa Wassermann
81
INSIGHT: David López, BioMarin
ANALYSIS
UNCERTAINTY FOR THE PRESENT, HOPE FOR THE FUTURE A tough regulatory environment and the impact of a weaker
“In 2016, the Mexican health industry saw
peso are among the hurdles Big Pharma companies face in
one of its toughest years, achieving single-
Mexico but the general landscape provides optimism and
digit growth in terms of value due to the
suggests strong growth ahead
introduction of new products and price increases,” says Raúl Camarena, General
Big Pharma knows there is a growing market in Mexico 64
Manager of Aspen Labs Mexico.
– 20 of the world’s 25 top pharmaceutical companies are already here, according to ProMéxico – and they are
This situation has led some companies with interests
hungry to improve market share, introduce innovative
in Mexico to take precautions, according to Vincenzo
products and expand the country’s blossoming generics
D’Elia, Director General of Alfa Wassermann. “We have
markets. But they remain hampered by strict regulations
seen significant currency devaluation, which has lifted the
while dealing with a weakened Mexican currency that is
cost to import products and increased our operational
driving up prices.
costs. There are many services we have to cover in foreign currencies. In some cases, we have to take the loss, but
“We are a heavily regulated industry and even more so
we must also reduce and relocate resources. For example,
due to our internal compliance with government policies.
if we had three projects planned for next year, we would
In Mexico and Latin America, our time-to-market for
only go ahead with two.”
drugs is getting slower,” says Karel Fucikovsky, Director General of Pierre Fabre Médicament LATAM. He points
Despite the headwinds, the industry overall remains
to the registration process for new products as among
optimistic, partly because of the diversity of investment
the hardest hurdles with which to comply, even with
in the country. Speaking to El Universal in February
recent moves to simplify processes and time frames.
2017, Cristóbal Thompson, Executive Director of AMIIF,
“Unfortunately, we have examples of novel drugs that have
downplayed Trump’s impact on the pharmaceutical over
been in the registration process for almost six years and
the long run. “Trump has talked about repatriating plants
there is still no answer as to when market authorization
but in the case of the pharmaceutical industry it does not
will be granted. This obviously generates financial and
apply because [our industry does] clinical research. In
business forecasting issues for us, plus big questions from
addition, we attract investment from Japanese, European
our partners in Europe trying to understand the situation.”
or Latin American companies,” he said.
The companies understand the necessity for strict
THE BRIGHT SIDE
oversight but point to the need to improve access to
There is good reason to be hopeful. According to the
innovative medicines in a country that is aging and hence,
report The Mexican Pharmaceutical Industry, News,
seeing greater prevalence of chronic diseases. Further
published by KPMG, Mexico’s pharmaceutical market is
hampering their efforts is a government that has tightened
in a good position. KPMG says the segment is among
its purse strings and curbed the purchase of these drugs
the top 15 in the world and second in Latin America,
and treatments. At the same time, more substances
impacting 161 national economic sectors and providing
have been liberated, helping spur growth in the generics
74,000 direct jobs and more than 300,000 indirect jobs.
segment. “Thirty-seven active substances have been
In addition, Mexico accounts for 1 percent of the global
liberated through our generic strategy, which represent
Big Pharma market, with an impact on the country’s GDP
MX$25 billion (US$1.4 billion) in savings while an extra two
of about 6 percent.
million people can be treated thanks to these savings,” says Julio Sánchez y Tépoz, Commissioner of COFEPRIS.
Transnational companies are banking on Mexico’s industry potential and working together with public institutions
EXTERNAL IMPEDIMENTS
to empower growth in the sector. Novartis established a
Outside factors are also pressuring the sector. US President
five-year plan in agreement with the Ministry of Health to
Donald Trump, elected in November 2016, has publicly
increase clinical research. Also, the company is confident
called for lower drug prices and also targeted companies
enough about Mexico´s leadership in the industry that
doing business in Mexico, leading directly to the weakening
it is building the Novartis Center of Operations for Latin
of the Mexican peso.
America in Mexico. “This project is a great opportunity
for Mexico. Once completed, the team will grow by 1,000 associates and in two years we will reach the 500 mark,”
PHARMA CONSUMPTION PROJECTION (US$ billions) 21 5.5% compound annual growth rate
says Novartis Director General, Alexis Serlin.
20.02 On the regulatory side, there is also room for optimism, despite complaints of a snail-like pace, because companies do see progress being made in many areas. COFEPRIS, the national regulatory agency, has positioned
18.98
19
itself in recent years as one of the most influential in the 17.99
world and its international relevance is becoming more noticeable. Its processes, essential for the development of drugs such as generics, are slower than in other Latin American countries but there is one distinct advantage:
17.05
65
17
the lack of price controls. 16.16 “One of the main differences is getting products into the government healthcare system. New technology is
15.32
more easily accepted into the National Formulary in other countries. However, Mexico enjoys price freedom. This is a positive benefit for us because price controls and caps
15
2015
2016
2017
2018
2019
2020
Fuente: INEGI
in other countries have been a challenge,” says D’Elia. “With 121 million inhabitants, excellent professionals and a Many factors come into play before launching a product,
decent level of infrastructure, there should be much more
such as initial investment, research and paperwork to
clinical research in Mexico,” says Rodrigo Puga, President
achieve the patent. According to KPMG, of every 10,000
and Country Manager of Pfizer Mexico. “This does not
investigated substances, only one is produced. Given this
happen because administrative processes and institutions
situation COFEPRIS is working to speed up its processes.
delay procedures more than they should. The company
“COFEPRIS has done a fantastic job accelerating
has over 400 research centers in Mexico, although it is
processes and reducing bureaucracy,” says Oscar Parra,
still an incipient process. According to AMIIF, Mexico
Managing Director of Mexico, Central America and Andes
could be looking at a US$500 million investment in
of Lundbeck.
clinical research in the near future. Pfizer will invest US$16 million in Mexico in research in 2017.” US-based Pfizer is
INCENTIVES FOR RESEARCH
one of the world’s leading biopharmaceutical businesses.
Another major challenge Mexico is facing – but which is an opportunity for Big Pharma – is that Mexicans
Mexico’s public health sector is also extremely cognizant
are living longer. A longer life expectancy gives way to
of the urgent need to encourage people to see doctors
the chronic diseases that have become national health
earlier in the disease cycle. Its approach is to conduct
antagonists. Part of the blame for this sits with the
clinical research, speed up bureaucratic processes,
country’s population, which mostly shuns prevention and
improve transparency in the public procurement of
refuses to undergo periodic checkups.
medicines and to promote prevention programs. However, according to Sturion, there is still much work
Big Pharma companies, such as Janssen, have identified
to be done. “For Mexican healthcare, prevention is still a
this problem and are already working on solutions. “Our
hope but it is a challenging area to move in. The actions,
vision is to have a world without disease, including
resources, programs and initiatives are still limited across
cancer,” says Mario Sturion, Director General of Janssen.
the country,” he says.
“With that mindset, we created an area for disease interception. This looks at how we can intervene in the
According to KPMG, Mexico has 2.5 doctors per 1,000
pathway of the disease before it even becomes a disease.”
inhabitants, close to the average of the OECD member countries, while the projections presented by the firm on
To this end, research and development has become a key
the consumption of pharmaceutical products in Mexico
target area for many top pharmaceutical companies that
are encouraging. By 2020, total spending will be slightly
see Mexico has having the right mix of demographics and
above US$24 billion, compared to just over US$16 billion
economic incentive. But, again, regulations are a barrier
spent in 2016. Although the industry is weathering a
to what many believe should be a prosperous area.
tough period now, the future looks bright.
VIEW FROM THE TOP
WITHSTANDING THE TEST OF TIME PEDRO GALVIS General Manager of Merck Mexico
66
Q: What role will personalized medicine play in
A: The structure we have implemented allows us to focus
biopharma?
on each business sector and especially on our patients’
A: This is critical. We have been working on personalized
needs and those of our customers. This latter point is
medicine for some years and we were one of the first to
key to differentiating our products and services offer. We
do so in oncological treatments. For example, Erbitux is
continuously adapt our strategy to the local environment
a product approved for treating metastatic colorectal
and work closely with our team to take advantage of
cancer and locally advanced and recurrent metastatic
existing opportunities. We have high-quality, innovative
head and neck cancer. We were among the first to
products and a truly motivated and engaged team.
implement and generate know-how of genomic testing in colorectal cancer. Depending on the mutational
Q: How up-to-speed is regulation of personalized
status of specific genes in a patient’s DNA, a doctor
medicine in Mexico?
can decide on the best treatment for that individual. It
A: There are not many challenges in the area of regulation. It
has been interesting yet challenging because it entails
has not been a critical issue. The authorities have been open
much research, education and work with physicians and
to discussing this and to integrating personalized medicine
specialists.
into treatments. It is also in the guidelines for most specialists.
Now, personalized medicine is part of our daily life. Many
Q: If regulation is not an issue, what are the main
of the products in our pipeline will also be related to
challenges that need to be overcome?
personalized medicine. Avelumab, recently approved
A: The biggest challenge we face as an industry is market
in the US for an aggressive form of skin cancer, will be
access, as our innovative products must be available to
launched in the field of immuno-oncology.
the patients who need them. Unfortunately, this situation is not good enough at the moment and is definitely below
Q: Merck is working with the Seguro Popular. To what
the international standards set for a country with the
extent is personalized medicine widely available?
size and population of Mexico. When compared to other
A: It is starting to be increasingly available. Metastatic
OECD countries and those in the region, Mexico has one
colorectal cancer was included in the Seguro Popular’s
of the lowest access indexes, so we are working on this
catalogue three years ago. It has taken some time for
through AMIIF. First we collaborated with COFEPRIS to
hospitals to get accreditation but now there are around
try to speed up the regulatory process for registration and
13-14 hospitals in Mexico that are accredited to provide
approval. Then, we worked with the CSG and together we
this treatment on behalf of the Seguro Popular. We expect
managed to improve processes. Finally, our next step will
that very soon other catastrophic diseases like multiple
be to work with IMSS and ISSSTE. There is limited access
sclerosis and Turner syndrome will also be included in the
to innovative products. There have been several budget
Seguro Popular catalogue to cover those patients in need.
cuts, the institutions were not financially viable and they were really struggling, but this is improving. While we
Q: Merck operates in many areas, some highly
understand the issues, the country needs to push for
competitive. What is its strategy to stand out in each?
health to improve productivity. Mexico’s economic situation is not that different to that of
Merck is the oldest pharmaceutical and chemical company in
other countries, as budget constraints are an issue all over
the world, founded in 1668 in Germany. It works in biopharma,
the world. We have been looking at alternative contracting
OTCs, allergen immunotherapy, high-tech chemicals and life
models and risk-sharing options, among others ideas, to
sciences. Merck has been present in Mexico since 1930
increase access to innovation.
Q: Generics have faced resistance in Mexico but
may be a lot but we continuously innovate and every year
are gaining ground. What are the advantages and
we bring out new products and technologies. Innovation
disadvantages of selling a branded OTC?
is at Merck’s core.
A: In Mexico, generics are a large part of the Mexican pharmaceutical market. Merck had a generics division
Q: What role do your chemicals play in healthcare?
that was divested due to strategic reasons, but we
A: What used to be the chemical division is now the
understand it is an option to guarantee access to some
life-sciences division. Most pharmaceutical research
products. However, the big issue continues to be the
companies and academia use our portfolio of over
quality of these products. We believe in the value of our
300,000 products, reagents, lab equipment and
brands. Our growth hormone is one of several options in
devices to solve the most difficult problems in the
the market. Ours is differentiated through the quality of
industry. We also supply raw materials, water systems,
the product and because of the devices we use, such as
biopharmaceutical manufacturing systems and regulatory
our electronic auto-injector that keeps track of patient
advice to our most important customers. The acquisition
adherence and of past doses by recording the size and
of Sigma Aldrich in 2015 significantly extended our
time of injections. Doctors can later use this device to
portfolio and our e-commerce platform.
know whether the patient is actually using the prescribed dose and how often.
Q: What will your priorities be for 2017 and for the Mexican market?
Q: What is the company’s strategic advantage over other
A: We have achieved aggressive growth over the past
companies?
four years, growing at double-digit rates, which is around
A: One of our board members once said: “We do not think
three times that of the market. The challenge after four
in quarters, we think in generations.” That says a lot about
years is to continue this growth; we are having a positive
the long-term approach this company takes in each of its
year so far and so we hope to deliver on this expectation.
businesses. Compared to other companies that are more
We are doing this through our core products, but we will
focused on quarterly results for shareholders, for Merck,
also launch new products in general medicine and cardio-
which is mostly a family company, this has been key. We
metabolic care. In 2017, it is vital to prepare for new
are in each business for the long run and decisions are
strategic launches in specialty care, such as Avelumab
not made based on immediate results but for the long
in immuno-oncology and Cladribine, a new product for
term. We say Merck is 350 years new, because 350 years
multiple sclerosis.
The size of Mexico's economy represents a potentially attractive market to pharmaceutical companies, but selling to the public institutions, some of the largest purchasers, is increasingly difficult due to budget restrictions and drug prices. With 121 million inhabitants, Mexico is the second-biggest market in Latin America. For pharmaceuticals, however, capturing that potential business is not always simple, especially in the public sector. Pharmaceutical regulations are renowned for being strict in the country and to sell a drug to the public sector it must pass three stages. First, it must be tested and approved by the regulatory body COFEPRIS; secondly, it must be approved by the CSG, which adds it to the National Formulary; and finally, it must be accepted onto a list of medicines by a public institution. After the third step is accomplished, the medicine can then be sold to that particular institution. However, institutions face shrinking budgets and an increasingly fat, sicker population, meaning they spend less on innovative or new medicines. “In the last 18 months, Seguro Popular cut around MX$10 billion (US$555 million) from its catastrophic fund, which is the budget for rare diseases and other expensive diseases such as cancer, and at the same time IMSS has not been accepting any new molecules for rare diseases in the last five years,” says David López, Country Manager Mexico of niche pharmaceutical company BioMarin. Pharmaceutical companies are finding other ways to do business by focusing on preventive solutions, selling to a different segment, creating generic versions of their products or by creating solutions so niche there are no generic or cheaper alternatives available. “Pfizer has launched its first biosimilar, a product for rheumatoid arthritis that IMSS is providing, and we are developing biosimilar versions of its five most-sold biotech medicines to be launched over the next four or five years,” says Rodrigo Puga, President & Country Manager of Pfizer Mexico.
BUDGET CUTS FORCE BIG PHARMA TO GET CREATIVE
67
VIEW FROM THE TOP
INNOVATION A KEY TO PATIENT-CENTRIC CARE FÉLIX SCOTT Director General and Country Chair of Sanofi
68
Q: How does Sanofi approach patient-centric care in terms
provide patients with a solution that can return them to an
of products and therapies?
active lifestyle, especially those with conditions like multiple
A: We are convinced that products by themselves are not
sclerosis. An oral therapy might be cheaper than our solution
enough. A holistic approach that includes pathology and
but it causes more hospitalizations and is more expensive
solutions is required. It is essential to always take into
over the course of a lifetime, while an innovative solution will
account that beyond every product there is a patient. This
result in expenditures for only three years. We have patients
is very important in healthcare, especially with therapies for
who were treated with our therapies 20 years ago and have
chronic diseases. Sanofi has a broad portfolio and we are
not needed further treatments, although we continue to
Mexico’s number one pharmaceutical company in number of
follow their progress and symptoms. There is an opening in
drugs. Chronic diseases are a social concern that are related
the healthcare system to include more innovative drugs but
to lifestyle, which is why we are redefining treatment.
we must accelerate the process for chronic diseases. Many of our products are already included in the public system but we
Q: How much of Sanofi’s R&D is conducted in Mexico?
need to provide access to high-tech products and treatments.
A: We have a clinical research unit here that does research for Mexico and for some countries in the Latin American region.
Q: How does Sanofi provide healthcare professionals with
Mexico plays an important role in the implementation of
access to innovation and how does that talent benefit the
Sanofi’s clinical studies and is top-of-mind when it comes to
company?
allocating those studies. The country is among Sanofi’s top
A: We offer a continuous education platform (PAEC) that
five emerging economies and the Mexico branch ranks 10th
is the result of a cooperation agreement between Sanofi
among all global subsidiaries. Today, there are more than
and the Ministry of Health. Many Ministry of Health doctors
35 active phase III and IV studies in Mexico. The country is
are certified in the programs offered through this platform.
one of Sanofi’s most important clinical research units for
For example, we offer certification for treating diabetes. We
emerging countries. We also have a program with the Aspen
do not promote any of our brands through this platform
Institute and UNAM that is focused on native research, in
because our main objective is to increase the number of
which we sponsor research by local professionals who are
trained doctors. We have certified around 16,000 doctors
venturing into projects focused on local needs.
through PAEC in just three years. There are about 14,500 family doctors actively participating in the platform. We
Q: What pharma-economic solutions can you offer the
want to continue developing talent in Mexico and we
market to provide more access to innovative therapies?
want to increase our team’s diversity. We are interested in
A: We developed a monoclonal antibody to treat cholesterol.
nurturing talent in indigenous communities and we have
This innovative therapy is more efficient than statins, which
developed a scholarship that helps train that talent. We
are the usual treatment provided by public institutions.
also want to export talent from Mexico to Sanofi’s global
Patients treated with statins are still prone to heart attacks,
subsidiaries.
which in the end will be more expensive than any therapy. We are seeing this purchasing behavior start to change and
Q: What are Sanofi’s priorities in Mexico?
we hope that decisions begin to target innovation. We can
A: We want to continue redefining health for Mexican patients, which means making the most of all the opportunities we have to promote significant change in
Sanofi is a pharmaceutical group founded in 2004 after the
patient health through the private or public sectors with
merger of Sanofi-Sythelabó and Aventis. It is the world’s
innovation in drugs, training, support for doctors and
third-largest pharmaceutical group and a leader in research in
through scientific research. For us it is important to bring
Mexico with over 35 active studies
Sanofi’s global innovation to Mexico.
VIEW FROM THE TOP
CAST-OFFS PROVIDE OPPORTUNITY, BENEFIT RAÚL CAMARENA General Manager of Aspen Labs Mexico
69
Q: What makes Aspen Labs stand out from other companies
Aspen has bought from other labs have allowed us to revive
in the industry in Mexico? What is its main added-value?
products well known by doctors.
A: Our business model is different from that of a typical Big Pharma company. Big Pharma companies carry out R&D,
Q: What were the reasons for which 2016 was a difficult
through which they offer innovative products for certain
year for the industry?
pathologies. In Aspen’s pharma business we do not carry
A: There was a lack of innovation in 2016. Innovation in the
out R&D. What we do is buy products or brands that other
industry often causes products for high specialty needs
companies no longer want to invest in. In this way, we can
to become increasingly expensive, but we have not seen
keep costs at an accessible level for patients because we
important advances in the health sector in accessibility.
do not experience pressure to reinvest in these areas. Of course, we are a public company listed on the Johannesburg
In the private sector, access has been effective in lowering
Stock Exchange and release our financial results.
the cost and prices for patients. At the same time, it has shifted market dominance from manufacturers and the
For example, the Infacare formula was developed in South
main providers of the sector to commercialization and
Africa and we transferred that technology to our facilities in
sale points. We are seeing changes in the way clients are
Vallejo, Mexico City. As that plant produces for Mexico, Latin
approached, client convenience and of course access at
America and we are beginning to produce for Australia and
better prices. This means the industry that did not adapt
the US, the additional volume added to that plant helps
to this new model has run into problems. In Mexico, there
us reduce our costs. This means we can offer high quality
are no instruments to evaluate with certainty the value of
products to Mexican patients.
the public market. We have information from some of the big institutions, but not an overall picture.
Q: What growth have you seen in 2016 and what internal and external factors are the drivers of this?
Q: To what extent do you plan on further expanding from
A: In 2016, the Mexican health industry saw one of its
your two existing plants? What other ambitions do you
toughest years. In that year it achieved single digit growth
have for Mexico?
in terms of value due to the introduction of new products
A: Over the next three or five years, we plan on further
and price increases. At Aspen, we are seeing growth at
expanding our manufacturing capacity in Mexico in the
twice the audited market growth.
pharmaceutical segment. In 2017, we will transfer products to be manufactured in our Vallejo plant and we will export
Our pharma business is witnessing healthy organic growth
them globally.
in both private and public sectors. This is driven by our lines in thrombosis, hormones and cytokines for women’s health
Commercially, we are launching several products that
and men’s health.
will satisfy market opportunities we have detected, more specifically in pharmaceutical combinations. In the nutrition
In addition, we have a line of products that are traditionally
segment we will continue to innovate with new formulas
used in the public sector and that were not taken privately
and we will launch a new product.
in the past, such as our low weight molecular heparin. Since the end of 2015, we have been taking this product to the private sector, where it has been well received. We have also
Aspen Labs is a South African pharmaceutical company, the
launched Fondaparinux, a product used in the ER when a
largest listed on the Johannesburg Stock Exchange. Present in
patient has a heart attack and needs products like this one
over 150 countries, it specializes in OTCs, infant nutrition, male
immediately to avoid complications. Other mature brands
and female health and cardiology
VIEW FROM THE TOP
DIVERSE PORTFOLIO ENSURES GROWTH RODRIGO PUGA President and Country Manager of Pfizer Mexico
70
Q: Generic medicines are becoming more popular in
IMSS, ISSSTE and decentralized agencies. A new drug has a
Mexico and innovator patents are expiring. What is Pfizer’s
patent with 15 years of exclusivity from when the molecule
strategy to deal with this?
is discovered. It takes eight to 10 years to gain approval and
A: Access to health services is an important challenge.
introduce the drug into a market and in Mexico four to five
Mexico spends 6 percent of its GDP on health, the lowest
years for the product to be available to the public sector.
expenditure of all OECD member countries, as others spend an average of 9 percent on health. Pfizer has launched its
Q: What is Pfizer’s approach to personalized medicine?
first biosimilar, a product for rheumatoid arthritis that IMSS
A: Pfizer already has some personalized products in the
is providing, and we are developing biosimilar versions of
market; for example, our therapy for patients with ALK-
its five most-sold biotech medicines to be launched over
positive non-small cell lung cancer. In immunotherapy,
the next four or five years. Pfizer’s strategy is to participate
especially oncology, the objective is to strengthen the
in attractive segments and to target growth above the
immune system to combat cancer. Most cancer treatments
market rate. To achieve that goal, we must compete in
use biological and chemical compounds but this Pfizer
innovation. The company has 90 projects globally and over
treatment could help the immune system target tumor
US$7 billion invested in R&D. It also has a business base of
cells directly. In oncology, it is difficult to decide when to
patent-expired drugs that are still successful due to our
launch a product because it does not follow the same cycle
quality prestige. We are successful in emerging markets
as other products. Pfizer’s acquisition of Medivation will
because, although regulations have improved, physicians
enable us to strengthen our clinical research into prostate,
and patients do not trust all generics. However, we have also
breast and blood cancer.
launched a generics line, a segment in which Pfizer enjoys an average growth of 35 to 40 percent annually.
Q: What are Pfizer Mexico’s priorities for the rest of 2017 and 2018?
Q: On what pathologies is your pipeline going to focus?
A: Along with Brazil, Pfizer Mexico is a priority subsidiary.
A: The five main areas in which Pfizer is working are oncology,
Pfizer Mexico’s commercial objective is growing above the
central nervous system, cardiovascular, rare diseases and
market growth of 5 percent. The company will continue
biosimilar drugs. It is hard to say where the best results will
launching innovative medicines, biosimilars and high-quality
be, because out of every 100 projects that start in the clinical
generics. We want to continue working closely with AMIIF
phase, only one will reach the market. We invest about US$7-8
to demonstrate that investing in health is one of the best
billion per year and launch one or two new products per year.
investments in terms of economic impact. We also want to work on innovative access strategies.
Q: What is Pfizer’s strategy to sell innovative drugs to the Mexican public sector?
Pfizer Mexico will also continue innovating in clinical
A: The arthritis biotech product Pfizer introduced to IMSS
research. With 121 million inhabitants, excellent professionals
already existed and we developed the biosimilar version. In
and a decent level of infrastructure, there should be much
innovators, the challenge is showing public health institutions
more clinical research in Mexico. This does not happen
the cost/effectiveness ratio of products, starting with the CSG,
because administrative processes and institutions delay procedures more than they should. The company has over 400 research centers in Mexico, although it is still an
Pfizer is a US-based global pharmaceutical company present
incipient process. According to AMIIF, Mexico could be
in over 180 countries with a strong research focus. It works in a
looking at a US$500 million investment in clinical research
variety of therapeutic areas including oncology, cardiovascular
in the near future. Pfizer will invest US$16 million in Mexico
health, vaccines, ophthalmology and infectious diseases
in research in 2017.
INSIGHT
GAME CHANGER: STOP DISEASE IN ITS TRACKS MARIO STURION Director General of Janssen Mexico
71
Mexico has a clear and impactful chronic disease problem
drugs will play a role in this, leading cancer to become
caused, among other reasons, by the lack of prevention at
more of a chronic disease.”
primary-level care. Many are afraid to go for check-ups in case a problem is discovered, thus worsening conditions.
To work on prevention, Janssen collects statistics
There are also those that refuse to believe they are ill, shown
through its website from volunteer patients. “For Mexican
clearly in the results of the 2016 ENSANUT survey. Better
healthcare, prevention is still a hope but it is a challenging
prevention and early detection is key to changing this
area to move in. The actions, resources, programs and
panorama, something Janssen, the pharmaceutical division
initiatives are still limited across the country,” he says. In
of US behemoth Johnson & Johnson, is working on.
this sense, the company is also working on a solution for treatment-resistant depression, the stage of the disease
The company is also focusing on innovation to stop
when people begin to have suicidal thoughts.
diseases in their tracks and prevent patients from reaching critical stages. “Our vision is to have a world without disease, including cancer. With that mindset, we created an area for disease interception. This looks at how we can intervene in the pathway of the disease before it even becomes a disease,” says Mario Sturion, Director General of Janssen. “There are many studies that show that the best investment is in prevention. However, preventive solutions are still in phases that include nutrition, sports and moving around but there are no solutions developed to test populations at risk
Prostate cancer killed 6,152 men in 2014 in Mexico, 13.8 percent of all male cancer deaths
of developing diabetes during pregnancy. If detected and treated in a timely manner, this problem will never
In Mexico alone, there are more than 6,400 suicides
develop. It is too early to estimate the full impact, but it
each year, according to INEGI 2015 figures, many of
will be huge. It will be a game changer.”
which result from untreated or poorly treated major depression. “There is a critical need for drugs that can
Prostate cancer, one of the areas Janssen is working on,
interrupt the thought processes that can lead to suicide
is the most common cancer diagnosed in men in Mexico,
in patients with severe depression, particularly as most
accounting for 6,152 deaths in 2014, 13.8 percent of all
current antidepressants can take weeks to have an effect.
male cancer deaths in Mexico, according to the WHO.
This drug blocks the neuro-transmissions and the effects
That supports the importance of early diagnosis for this
are unbelievable,” says Sturion. The WHO estimates that
disease: when diagnosed in local and regional stages, the
depression affects 322 million people globally as of 2017.
survival rate is almost 100 percent, which plummets to 28
It is the first cause of disability and is a factor in suicide.
percent when detected in distant stages, according to data from the American Cancer Association.
In addition, Janssen is making strides in HIV treatment. “We produce an inhibitor called EVIPLERA for HIV patients and we
“In prostate cancer, there is also a new treatment that will
have developed a booster, PREZCOBIX, to optimize results in
be launched in one to two years. We believe it should be
patients. It will be launched in 2017,” says Sturion, adding that
prioritized at the same level as breast cancer, because
“the company is also working on the development of an HIV
prostate is the second cause of death among adult
vaccine that has shown promising results in primates in phase
males,” says Sturion. “Genomics and immuno-oncology
I trials, potentially ready in a six to seven-year time frame.”
VIEW FROM THE TOP
CHALLENGES IN THE FACE OF A CHANGING MARKET KAREL FUCIKOVSKY Director General of Pierre Fabre Médicament LATAM
72
Q: What challenges do transnational companies face in the
A: The pharmaceutical industry in Mexico has been impacted
Mexican market?
in different ways from the budget cuts and constraints in
A: Overall, market access poses challenges and question
the public health sector. In our case, the impact has lacked
marks for all players. We are a heavily regulated industry
strength because our marketed products, such as Navelbine
and even more so due to our internal compliance with
Oral, are targeted at patients with lung cancer and breast
government policies. In Mexico and Latin America, our time
cancer, both considered top national health concerns
to market for drugs is getting slower and our capability as a
regarding treatment priorities in Mexico.
transnational company versus local players at times cannot be compared.
We are fully aware that the operational and financial strategy of the authorities should be to lower the fixed
Registration for market authorization for new products is one
costs of institutions, which is the reason there is a strong
of the hardest hurdles to comply with for many companies,
movement in Mexico to substitute innovative drugs with
especially for innovative drugs and therapies, even considering
generic forms.
that the authorities have simplified processes and timeframes. Fortunately, our generic exposure is still limited in our Unfortunately, we have examples of novel drugs that have
various therapeutic segments. We agree absolutely on
been in the registration process for almost six years and
the need of generics in the market to make medicine
there is still no answer as to when market authorization will
more accessible to the whole population because we
be granted. This obviously generates financial and business
fully understand that a healthy population creates a more
forecasting issues for us, plus big questions from our partners
productive country. But there should be an examination
in Europe trying to understand the situation.
of whether transnational and national companies are competing on a level playing field, because that is not
Q: How are your sales divided between the government and
the case in some locations.
private sector? A: Of our overall business, 45 percent relies on government
Q: What new products has Pierre Fabre launched in the
sales, consolidated purchases from the main health
past year?
institutions and some decentralized organizations that are
A: Through a joint venture effort with Ferring
also within our business scope. This 45 percent is divided
Pharmaceuticals, we obtained a license agreement and
between two branches: oncological drugs for lung and
distribution rights for Lysteda, a prescription product
breast cancer and Fabroven®, indicated for patients with
indicated for patients with excessive menstrual bleeding
venous insufficiency.
conditions. Lysteda is a key product that strongly contributes to enhancing our women’s health portfolio.
The retail market drives 55 percent of our business, with our franchise products in women’s health. Navelbine Oral and
Lysteda has been on the market for over a year and a
Fabroven® are our top-selling and most prescribed products
half and has seen great acceptance among our medical
in the Mexican market. They will continue to grow in the
community and patients. This development represents
institutional segments as well as in the retail market because
an interesting approach for us because we are marketing
they have strong active promotion, investment and medical
it as a training product for physicians and use the same
and scientific fundamentals.
traditional sales channels as wholesalers do.
Q: How have public sector budget cuts affected your business
We also produce an orphan drug called Busilvex, used to
over the past year?
support bone marrow transplants. This is a one-of-a-kind
product in Mexico, as it is the only drug available in IV form.
A: Worldwide, mature products are our bread and butter.
Busilvex has been on the market for five and a half years
They allow us to continue investing in R&D globally and
and even though it does not represent large volumes for
to power ourselves in joint ventures locally.
our business it does makes a big difference in the way procedures are managed by professionals, especially when
As an example of this, Pierre Fabre has signed a worldwide
considering that patients need an exact quantity of product
agreement with Array Pharma, a big pharmaceutical
present in their bodies to be prepared for a procedure.
company, for the co-investment and development of two molecules for melanoma and colon cancer.
Busilvex is not at the core of our business strategy, but surely represents an opportunity to support our oncology
Q: What are your expectations for the next five years?
franchise development. I do not think the company will
A: We will continue to focus on our portfolio management
migrate to an orphan drugs business model. It will be
strategy, based on specific therapeutic areas: stay strong
much more oriented toward oncology, women’s health
in oncology, be a fundamental player in the women's
and dermatology.
health market and grow in dermatology and oral care.
Q: What difficulties have you faced getting an orphan drug registered in Mexico? A: Orphan drugs have different registration processes and “go to market” possibilities than conventional medicines. Perhaps the registration pathway for orphan drugs could provide faster market entry but the medication must still meet all regulatory requirements. Q: What challenges do transnational companies face in the Mexican market? A: Overall, market access poses challenges and question
Mature products allow us to continue investing in R&D globally and to power ourselves in joint ventures locally
marks for all players, be they national or transnational companies, public or private. The pharmaceutical sector
We will continue to enhance partnerships worldwide
is a heavily regulated industry, and even more so due to
and as an example of this, five months ago, we signed a
internal compliance policies, which differ on a company
licensing and distribution deal with Grupo Biotoscana, a
to company basis. In Mexico and Latin America, our time
strong and respected pharmaceutical company in Latin
to market for drugs is slowing and our ability to compete
America, for Navelbine Oral and our full oncology portfolio.
as a transnational company versus local players at times cannot be compared.
In our five-year strategic plan, we will focus on portfolio management and a solid arm of our development will
Registration for market authorization for new products
be looking for strategic alliances. We have seen in
is one of the hardest regulatory hurdles to comply with
Mexico, Argentina and Brazil that many transnational
for many companies, especially in regards to innovative
companies are suffering due to divestment strategies
drugs and therapies, even considering that there have
on their mature portfolios. They have focused on high-
been huge improvements from our authorities and that
end technology and biotechnology products without
we are on the right path to simplifying proccesses and
considering access barriers and the low rates of payers.
time frames.
Now, some of these big companies are realizing they are losing out but lack the resources to revive their mature
Unfortunately, we have novel drugs that have been in the
products that still have strong brand equity. We have
registration process for almost six years and still have no
grasped these opportunities and started partnering with
definite answer as to when the marketing authorization
some companies. We have been working with Janssen for
will be granted. This obviously generates financial and
the past three years on part of its gynecology line, with
business forecasting issues for us, plus big questions
positive results for both companies.
from our partners in Europe trying to understand our authorities’ processes and timeframes as we have invested a lot of money in those products.
Pierre Fabre is the third largest French pharmaceutical laboratory. It has two main lines of business: Pierre Fabre Médicament, which
Q: How can your company sustain growth while relying
focuses on the pharmaceutical sector, and Pierre Fabre Dermo-
only on mature products?
Cosmetics, related to dermatology and cosmetology
73
74
ROUNDTABLE In addition to the general challenges companies have faced last year, such as fluctuating exchange rates and insecurity, Big Pharma has seen revenues dip as both consumers and top national and international politicians assail the industry’s pricing methods and as patented products come under attack from a growing generics market. Mexico Health Review asked several relevant players what, in their opinion, have been the greatest challenges for the pharmaceutical industry between 2016 and 2017.
WHAT ARE THE GREATEST CHALLENGES PHARMACEUTICAL COMPANIES FACE? 75
Overall, market access poses challenges and question marks for all players. We are a heavily regulated industry and even more so due to our internal compliance with government policies. In Mexico and Latin America, our time to market for drugs is getting slower and our capability as a transnational company versus local players at times cannot be compared. Registration for market authorization for new products is one of the hardest hurdles to comply with for many companies, especially for innovative drugs and therapies, even considering that the authorities have simplified processes and time frames. Unfortunately, we have examples of novel drugs that have been in the registration process for almost six years and there is still no answer as to when market authorization
KAREL FUCIKOVSKY Director General of Pierre Fabre Médicament LATAM
will be granted. This obviously generates financial and business forecasting issues for us, plus big questions from our partners in Europe trying to understand the situation.
We have seen significant currency devaluation, so the cost to import products and our operational costs have increased. There are many services we have to cover in foreign currencies. In some cases, we have to take the loss, but we must also reduce and relocate resources. For example, if for next year we had three projects planned, we should only go ahead with two. I remember reading a report from a financial expert saying the value of the dollar would reach 30 pesos per dollar. The international environment is not friendly right now and it presents many challenges. Companies like ours have to be selective when investing and focus on finding returns. There is a tremendous opportunity for local companies
VINCENZO D’ELIA Director General of Alfa Wassermann
that can be more aggressive and gain market share.
The biggest challenge we face as an industry is market access, as our innovative products must be available to the patients who need them. Unfortunately, this situation is not good enough at the moment and is below international standards set for a country with the size and population of Mexico. When compared to other OECD countries and those in the region, Mexico has one of the lowest access indexes, so we are working on this through AMIIF. There have also been several budget cuts, the institutions were not financially viable and they were really struggling, but this is improving. While we understand the issues, the country needs to push for health to improve productivity. Mexico’s economic situation is not that different to that of other countries, as budget constraints are an issue all over the world. We have been looking at alternative contracting models and risk-sharing options among others ideas to increase access to innovation.
PEDRO GALVIS General Manager of Merck Mexico
VIEW FROM THE TOP
WORKING TOGETHER TO IMPROVE PATIENT HEALTH ALEXIS SERLIN Director General of Novartis
76
Q: Novartis has implemented a patient-centric focus. What
arthritis and ankylosing spondylitis. We also have an area
impact has this had on access to healthcare?
for respiratory conditions focused on chronic obstructive
A: This strategy has had a great impact. We are focusing
pulmonary disease, for which we have developed a
more on improving our patients’ outcomes by helping
product with a new action mechanism that has been
institutions measure results and apply effective solutions,
recognized as new paradigm in the treatment of this
which gives us a competitive advantage. AMIIF and IMSS
disease. Our fifth priority area is neuroscience. We are
are also launching a project to prioritize a group of critical
focused on multiple sclerosis but we also have treatments
diseases in which they create rules so that the different
for Alzheimer’s, epilepsy and Parkinson’s. Finally, we have
companies offer shared-risk models that can provide access
a portfolio for problems related to both the back and
to innovations.
front of the eye.
Q: Novartis has a 2015-2020 investment plan for Mexico.
We always aim to match our portfolio to the main Mexican
So far, how has it been allocated?
health concerns. Diabetes is among the diseases that
A: This plan was established in agreement with the
IMSS is currently prioritizing and we have a product to
Ministry of Health and the Ministry of Economy and it has
manage diabetes that is supported by the largest study
five pillars to accomplish over five years. One is a US$50
done among Mexican patients. We also develop solutions
million investment in clinical research in five years. Another
for diabetic macular edema and diabetic retinopathies
pillar is the creation of a Novartis Center of Operations for
and we have the market’s most integral portfolio for
Latin America here in Mexico to support all the companies
transplants.
from the group and their divisions. This project is a great opportunity for Mexico. Once completed, the team will grow
Q: What is the strategic balance between providing the
by 1,000 associates.
government with access to innovative medicine and developing generics?
Q: What are Novartis Pharma’s main therapeutic areas and
A: Novartis is one of the top three global companies for
how is the company targeting them?
innovative and generic medicine. In terms of generics,
A: We have six priority areas. The first is oncology, for
we believe we must respect patents, but once a
which we recently submitted to COFEPRIS a product
patent expires we have quality generics that open new
for monastic breast cancer that will produce disruptive
possibilities and reduce expenditure and that could be
results for the management of this disease. Second, is
used by the system to create new innovations. It is very
the cardiovascular and metabolic health segment. In
important that the population has access to all new
2016, we launched a product for cardiac failure that
products. However, the challenge in Mexico is that the
has shown a significant reduction in mortality and
investment in health is low: it is 6 percent, while the
hospitalization due to this condition, which is the main
average government investment in health among OECD
cause for hospitalization in IMSS for adults over the age
countries is 9 percent. Poor investment limits the capacity
of 65. Next is immune dermatology and also in 2016 we
to acquire new technology but we recognize that we are
launched products for psoriasis rheumatology, psoriatic
at a moment in history where the development of drugs has advanced. Therefore, in an environment of budget constraints, we have a responsibility to help institutions
Novartis is a global pharmaceutical and biotechnological
gain access to these products. We do this by introducing
company with a history that spans over 200 years. The
pharma economic models. The role of the pharmaceutical
company’s three main divisions are Novartis Pharma, for
industry should transform from being just a seller to
innovative medicine, Novartis Oncology and Novartis Eye Care
becoming a partner of the health system.
ANALYSIS
PHARMACEUTICAL DEALS COMPLETED IN 3Q16 THROUGH 2Q17 OVER US$1 BILLION M&A activity in the pharmaceutical sector has continued over
In addition to the big names and deals,
the past year, despite global fears of a slowdown due to US
investment in younger companies in life sciences
elections. The combined value of deals over US$1 billion in
continued, with the top 10 venture capital rounds
3Q16-2Q17 topped that of the previous year
in 2016 reaching a combined value of US$1.9 billion. One of the most notable is BlueRock
Global M&A activity in the pharmaceuticals sector has been
Therapeutics’ Series A Round, which raised US$225 million
slow in the first months of 2017 and the second half of
in December 2016 from investors Bayer and Versant Ventures,
2016, according to FiercePharma. Although many experts
a biotechnology investment firm. BlueRock Therapeutics will
predicted a pick-up in M&A activity in 2017, FiercePharma
initially focus on pluripotent stem-cell treatments.
reports that this is yet to materialize. Only 12 deals surpassed the US$1 billion mark in the year from 3Q16 through 2Q17, compared with 16 in the same period a year
PHARMACEUTICAL DEALS COMPLETED OVER US$1 BILLION (US$ billions) in 3Q16 through 2Q17
earlier. But the combined value totaled US$138.7 billion,
Fresenius Helios/Quironsalud
surpassing the US$120.3 value of the deals negotiated in
Takeda/ARRIAD Pharmaceuticals
3Q15 through 2Q16.
Sanofi/Boehringer Ingelheim There were two large deals completed that together account
Johnson & Johnson/Actelion
for just over 50 percent of the value of all deals over US$1
Pfizer/Medivation
billion, the largest of which went through in August 2016
Allergan/LifeCell Corporatain
when Teva Pharmaceuticals acquired Actavis. “Through our
Teva/Actavis Generics
acquisition of Actavis Generics, we are creating a new Teva
Mylan/Meda
with a strong foundation, significantly enhanced financial
Quintiles/IMS Health
profile and more diversified revenue sources and profit
New Huadu Industrial Group/Yunnan Baiyao Holding
streams backed by strong product development engines.
Allergan/Tobira Therapuetics
This is a platform that is expected to generate multi-year
Galenica/Relypsa
top-line and bottom-line growth as well as significant cash flow,” said Erez Vigodman, President and CEO of Teva in
in 3Q15 through 2Q16 Pfizer/Hospira
a press release.
Endo International/Par Pharmaceutical A second deal also hit the US$30 billion mark when
Celgene/Receptos
Johnson & Johnson completed the acquisition of
Shire/Baxalta
Actelion in June 2017. In a company press release, J&J
Shire/Dyax
announced that it expected the deal to provide value
AstraZeneca/Acerta Pharma
to Actelion shareholders, extend the geographical and
Merck/Sigma-Aldrich
commercial reach of its products while also enhancing
AstraZeneca/ZS Pharma
value for Johnson & Johnson shareholders. It will be
Abbvie/Stemcentrx
spun off into an R&D unit based in Switzerland that “will
Pfizer/Anacor
have a broad portfolio of drug candidates in clinical
Teva/Rimsa
development across four focused therapeutic franchises:
Concordia Healthcare/Amdipharm Mercury
specialty cardiovascular disorders, central nervous system disorders, immunological disorders and orphan diseases,”
Lannett/Kremers Urban Pharmaceuticals
the company said in its release.
Valeant/Sprout Pharmaceuticals Mallinckrodt /Therakos
KPMG reports that oncology is a particular area of interest
Allergan/Kythera
for companies within the biotech sector and it expects three of the top five selling drugs in 2017 to belong to the
0
sector. EvaluatePharma reports that oncology was the top-grossing therapeutic area in 2016 with global sales
Acquisition Asset Swap
of US$93.7 billion.
Sources: PwC, FiercePharma, KPMG
10
20
30
40
Merger Mixed Ownership
50
60
Bought
70
55% Share
77
VIEW FROM THE TOP
MENTAL DISEASES: UNDERSTANDING AND PREVENTION OSCAR PARRA Managing Director of Mexico, Central America and Andes of Lundbeck
78
Q: How prevalent is depression in Mexico and to what
regarding patients with depression. The results showed that
extent is it on the rise?
patients were first treated for depression 10 years after they
A: The prevalence of depression and other mental diseases
first showed symptoms. Those treated earlier were able to
should be very similar in Mexico as in the rest of the
recover more easily while for others the disease became
world. I do not think the number of cases has increased.
more complex. The Danish and Mexican authorities have
The question is whether more cases have been detected.
agreed to work together and exchange perspectives on
There is a large number of people who will get some sort of
mental health issues. The Danish government is promoting
mental disorder at some point in their life and the concern
grants for Danish researchers to conduct research in Mexico,
is whether or not doctors are diagnosing them.
generally in collaboration with Mexican researchers.
The world is becoming more aware of mental health and
There are more people that at some point in their life
within 10 years depression will be the most debilitating
suffer an episode of depression than any other mental
disease, more than diabetes or heart conditions. One
disease. However, in Mexico there are many patients with
reason is that depression strongly impacts productivity,
Alzheimerâ&#x20AC;&#x2122;s, Parkinsonâ&#x20AC;&#x2122;s and schizophrenia, which is a very
firstly due to absenteeism from work but also because of a
difficult disease and patients are rarely understood.
new concept called presentism whereby people go to work but do not perform. They sit at their desk, unable to make
Q: How does the demography of these diseases in Mexico
decisions or perform their work effectively.
compare to that of other Latin American countries? A: Latin America is moving in the same direction. We
Additionally, in the case of mental diseases, the economy
are shifting from infectious disease to chronic diseases.
not only loses the person who is mentally impaired but
Before, bacteria caused illnesses but now diabetes, cancer,
also the family member who leaves their job to take
depression and coronary diseases are more prevalent.
care of this person. The annual cost of mental illness in
Mexico is a young country and the main driver for growth
Europe is pegged at â&#x201A;Ź798 billion. In Mexico awareness is
is its large population. Therefore, it is important that all
improving and for the first time there is a working group in
decision-makers in this country realize that the young
the legislative body looking at mental diseases.
population needs to be healthy to be productive.
Q: In 2016, the Table of Work-Related Diseases was
Q: How can companies work with the public sector to
updated to include stress and other mental afflictions.
prevent the young population becoming unhealthy?
How does this impact awareness?
A: First, we need to understand the issue before we fix it. For
A: There is more and more information available on
example, diabetes has been quite well researched and now
mental diseases and the government, health authorities
the authorities are doing something about it. We have fallen
and companies are realizing this is a big issue. We are
behind in other areas and we need to calculate the impact
hearing about it more now than a few years ago because
of mental disease. I think getting data on how many people
it is something we cannot hide. Recently during a visit to
are absent from work due to depression would be quite
Mexico by the Danish Minister of Health, data was presented
interesting and would help to understand the magnitude of the impact these diseases have on the economy.
Lundbeck is a Denmark-based Big Pharma focused on
Q: What are the main risk factors for mental disease? How
researching and developing solutions for neurological and
much do environmental factors influence this?
psychiatric conditions that affect people of all ages, such as
A: Urbanization and depression go hand in hand. As an
depression, schizophrenia and dementia
economy develops, the population is weighed down
with heavier workloads, we spend more time in traffic
Q: What programs are in place in Mexico to help with this?
and we produce more pollution, all of which are stress
A: There are some support programs for specific population
factors that can lead to depression. There is a correlation
segments with high suicide rates such as HIV patients,
between economic development and the development
alcoholics and drug addicts. One of the main issues with
of depression. There are other risk factors for specific
depression is that a large number of the people who suffer
diseases.
from it commit suicide. If you think mental illness does not kill, it does.
Q: What percentage of sufferers are diagnosed and what percentage of those receive treatment?
Q: Which state of the art products has Lundbeck recently
A: In general, you see more diagnoses in places like Europe,
launched?
the US and Canada, and less in Asia, Latin America and
A: We launched an anti-depressant last year that is creating
Africa. In Mexico, the likelihood of being diagnosed when
a completely new way to treat the disease. It is called
going to a psychiatrist is extremely high and almost 100
Brintellix and it not only targets the feeling of depression but
percent of the patients that are diagnosed by a psychiatrist
also the way we think when we are depressed. Depression
are treated, but few people go to a psychiatrist. The
not only affects a patientâ&#x20AC;&#x2122;s mood but also their cognitive
majority go to a general physician (GP) and so the process
abilities, which prevents them from being as productive as
for diagnosis and treatment could be lengthier.
they could be.
Visiting a psychiatrist is a big step for many people
Also, next year we will launch a product called Nuvigil for
because mental disease sufferers are more prone to
excessive sleepiness. It helps patients stay awake during the
stigmatization. For example, schizophrenia is a difficult
day and when it wears off they can go to sleep. It also works
condition to talk about because it falls out of the common
for people who want to regulate sleep patterns, such as
and many people think of depression as a weakness. Many
shift workers. This new product will have a broader range of
do not recognize depression and tell sufferers to stay
efficiency so patients will not only be awake but more alert. In
calm and go to work, but this is not the right way to deal
2018, we will market a product for schizophrenia. These will be
with it. In the first two weeks, depression is just a feeling
our new products for the next three years. Lundbeck Mexico
but after two or three weeks it becomes a biological
will be the central hub for Central America and the Andes so
problem. The neurotransmitters in the brain start working
we are excited about the opportunities our industry has here.
differently because the body is adapting to a condition. Q: How do COFEPRISâ&#x20AC;&#x2122; regulations differ to those of the Q: Which demographic suffers the most from depression?
FDA or EMA?
A: There is a high prevalence of depression in older people
A: COFEPRIS has done a fantastic job accelerating the
but it is also common in the younger population aged late 20s
processes and reducing bureaucracy. There are many
to 50s. It is becoming more frequent in teenagers and this is
differences from the other organizations. For instance in
troubling because young people should not be depressed yet
Europe you do not need to do local releases by repeating
suicide in the younger population is on the rise.
clinical testing.
79
VIEW FROM THE TOP
WAITING FOR NEW OPPORTUNITIES VINCENZO Dâ&#x20AC;&#x2122;ELIA Director General of Alfa Wassermann
80
Q: Alfa Wassermann had plans to expand its gastroenterology
presents many challenges. Companies like ours have to be
portfolio. How far along are you?
selective when investing and focus on finding returns. There
A: We have invested in product registration in this field but
is a tremendous opportunity for local companies that can
we are a little behind schedule. COFEPRIS processes are
be more aggressive and gain market share.
taking longer than we expected. In our opinion, in some cases it is requesting more information than described in
Q: How do government tender processes affect an
norms. Perhaps it is trying to show a stricter profile than
international company?
the FDA. Nonetheless, we are continuing with our plan
A: We do not sell to the government. It has been a
to launch three products for gastroenterology in 2017.
challenge for international companies to enter the National Formulary and being accepted by IMSS and ISSSTE is a
Q: In the wake of the Teva-Rimsa deal, what is the appetite
long process. People that come to Mexico have to plan
for M&A in Mexico?
for the long haul if they want to be in that business. It
A: It has become a little more difficult to find M&A
is difficult to have access and frankly for the next two
opportunities due to prices. After the price Teva paid to
years we do not foresee a positive environment because of
acquire RIMSA, many now have lofty price aspirations. But
the budget cuts in healthcare. Evidently, the government
we will keep looking for other business opportunities.
has no funds to get new technology. It is going to be a challenge to get access to the government without a
Worldwide, Alfa Wassermann is expected to expand
generics division.
its presence through smart and focused geographic investments. There is no question the pharmaceutical
Q: How does the Mexican market differ from other Latin
sector continues to face multiple challenges on many fronts.
American markets?
Despite this short-term uncertainty, I believe Mexicoâ&#x20AC;&#x2122;s
A: One of the main differences is getting products into
economy in the medium and long term will do fine.
the government healthcare system. New technology is more easily accepted into the National Formulary in
Q: Has peso depreciation affected your operations?
others countries than in Mexico. Also, the generics market
A: We have seen significant currency devaluation so the
in other countries is more stable. Here it is too young and
cost to import products and our operational costs have
is still growing. However, Mexico enjoys price freedom.
increased. There are many services we have to cover in
This is a positive benefit for us because price controls and
foreign currencies. In some cases we have to take the
caps in other countries have been a challenge. Here, we
loss, but we must also reduce and relocate resources. For
are also experiencing new models like those of Farmacias
example, if for next year we had three projects planned, we
Similares and Genoma Lab, which I have not seen in other
should only go ahead with two.
countries.
I remember reading a report from a financial expert saying
Q: What are your short-term ambitions for Mexico?
the value of the dollar would reach MX$30 per dollar. The
A: Our goal is to consolidate our presence here and ensure
international environment is not friendly right now and it
we become a well-positionned company. We will continue in gastroenterology, in deep venous diseases and in new therapeutic areas. We bought a company in Italy that has a
Alfa Wassermann is an Italian Big Pharma company focused
large cardio metabolic portfolio, which we will assess after
on R&D for a population that is living longer thanks to medical
the merger is completed. I continue to see Mexico as a long-
advances. The companyâ&#x20AC;&#x2122;s strategy is based on three guidelines:
term opportunity. We must stay open-minded and keep an
research, technology and internationalization
eye open for new chances.
INSIGHT
ORPHAN DRUGS FACE TOUGH ENVIRONMENT DAVID LÓPEZ Country Manager of BioMarin Mexico
81
Rare diseases are often difficult to treat because developing
disease treatments, while another 40 percent rely on the
medications for them is costly for manufacturers, which
Seguro Popular. However, public institutions are sometimes
can make them prohibitively expensive for patients and
reluctant to spend a large portion of their ever-shrinking
insurers. To address this problem, COFEPRIS is supporting
budgets on drugs that will treat very few patients. “In the
drug manufacturers, such as BioMarin, with simpler
last 18 months, Seguro Popular cut around MX$10 billion
administrative processes.
(US$555 million) from its catastrophic fund, which is the budget for rare diseases and other expensive afflictions
Rare diseases affect less than five in 10,000 individuals,
such as cancer. At the same time, IMSS has not accepted
but with thousands of rare diseases, millions are affected.
any new molecule for rare diseases in the last five years,”
In Mexico, 8 million individuals are estimated to have one,
says López. Patients at private institutions may not have an
according to the Mexican Federation for Rare Diseases
easier time finding relief. Most private insurers do not cover
(FEMEXER). Medications used to treat rare diseases are
rare diseases, which are considered pre-existing conditions.
called orphan drugs and their development can be costly due to the nature of the diseases themselves. BioMarin, a
There are three steps for a drug to become available in
California-based pharmaceutical company specializing in
Mexico. The first is registration, which usually takes four
orphan drugs for achondroplasia, hemophilia and several
to six months, but the second and third steps are more
types of Mucopolysacharidosis (MPS), says there are several
complicated. The second is to register the drug with the
factors that complicate their production and distribution.
National Health Council (CSG), which then adds it to the National Formulary. Finally, a purchaser, such as IMSS,
“Gaining access to treatment is becoming more and more
ISSSTE, Seguro Popular or PEMEX, must accept the product.
complex, mainly due to three reasons: cost, availability of government resources allocated to rare disease care and
Considering all the challenges to introduce orphan drugs
lack of knowledge of the authorities and doctors,” says
into the Mexican healthcare sector, regulators are trying to
David López, Country Manager of BioMarin in Mexico.
simplify the process. “COFEPRIS understands very well how
The correct diagnosis of a rare disease can be hindered
orphan drugs are developed. It never asks for a long and
by a physicians’ unfamiliarity with it, complicating the
complex clinical trial because it knows a 50-100 patient trial
generation of a patient population for clinical trials. López
requires the same, or frequently more effort and investment
says that frequently it is only after a successful treatment
to develop and it is really open to approving these drugs,”
is developed that doctors increase their awareness and
López says. Due to those small numbers, orphan drugs do
know what to look for in patients. All medications must be
not need to be retested in Mexico because the country
tested on sufferers of the condition they treat, yet for rare
accepts FDA or EMA certification.
diseases these patients can be scattered over countries and continents. For this reason, clinical trials are multinational
The result is a faster introduction of orphan drugs into
with a handful of patients in each country, complicating
the country, benefitting many patients. “There are about
logistics and raising costs.
500 patients receiving lysosomal treatment for six different diseases and the compliance rate or adherence
Providing treatment for these diseases in Mexico runs into
to treatment is just under 80-90 percent. This is very good
additional difficulties since the drugs, produced at high
when compared with that of chronic diseases,” López says.
cost and in fewer quantities, tend to be more expensive,
This will also benefit orphan drug manufacturers, which are
leaving a large percentage of sufferers depending on the
studiously working on the development of more medicines
social security system for their treatment. López estimates
to treat those patients. According to López, the future of
that 40 percent of sufferers depend on IMSS for their rare-
the market depends on continued innovation.
Production line at the Jadcherla facility
GENERICS & BIOSIMILARS
4
After overcoming initial mistrust from the public, generics are making inroads in the Mexican drug market, including private institutions, as a cost-effective alternative. A change in law requiring doctors to write the generic name of a medicine on a prescription has greatly boosted consumer awareness of prices and the efficacy of generics. Many companies focus on sales to the government, which needs to stretch budgets to cover an increasing number of patients, thus choosing generic medicines over brands where possible. In recent years however, public sector institutions have begun a consolidated purchasing process to increase efficiency and savings, which has driven prices so low companies are beginning to turn away from the single largest purchaser of generics looking for alternative business opportunities.
This chapter will present an overview of the companies that produce nonpatented medicine in Mexico, be it chemical or biotech, branded or non-branded generics and OTCs. It will explore the challenges generics have yet to overcome and the future that the men and women at the helm of the companies have in mind for these medicines, especially in light of the wave of patent expirations during 2015-2020.
83
CHAPTER 4: GENERICS & BIOSIMILARS 86
ANALYSIS: Price Pressures Pushing Generics to Private Sector
88
VIEW FROM THE TOP: Efrén Ocampo, Grupo Neolpharma
90
VIEW FROM THE TOP: Alfredo Rimoch, Liomont Laboratories
91
VIEW FROM THE TOP: Juan Aguirre, Grupo Bruluart
92
INSIGHT: Aristides Torres, Vanquish
93
VIEW FROM THE TOP: Felipe Espinosa, Laboratorios Collins
94
VIEW FROM THE TOP: Américo García, Apotex
96
VIEW FROM THE TOP: Guillermo Ibarra, Teva
97
INSIGHT: Alexis Espinoza, AMSA
98
INSIGHT: Gurulinga Konanur, Hetero
99
VIEW FROM THE TOP: MS Nagendra, Zydus Pharmaceuticals
100
VIEW FROM THE TOP: Francisco Hernández, Wockhardt
102
VIEW FROM THE TOP: Sandeep Bane, Accord Farma
103
INSIGHT: Arístides Salazar, Emcure Pharmaceuticals
105
VIEW FROM THE TOP: Ricardo Ganem, Perrigo
106
INSIGHT: José Díaz, Micro Pharmaceuticals
107
INSIGHT: William Escobar, Grupo Unipharm
85
ANALYSIS
PRICE PRESSURES PUSHING GENERICS TO PRIVATE SECTOR Generics, a cheaper alternative to patented medications,
generic company wants to increase in size
are a key government strategy to provide healthcare for an
and importance, it must have a presence
increasingly sick population. However, pushing down prices is
in the larger markets and Mexico is the 11 th
pushing some companies to seek business elsewhere
largest pharmaceutical market in the world,” says MS Nagendra, Director General of Indian
The government’s decision to initiate consolidated
pharmaceutical company Zydus Pharmaceuticals.
purchasing schemes to buy generics as an access
86
strategy has made it one of the largest single generics
According to Seale & Associates, the Mexican generics
customers in the world. That purchasing power has been
market as a whole was worth US$3.3 billion in 2015 and
a double-edged sword, however, with prices dropping to
according to the latest available data from statistica.com,
such a point that many generics companies have stopped
generics sold to the public sector represented 59 percent
seeing sales to the government as a priority.
of units in 2014 but only 15.2 percent of value. Retail brands or private labels represent 8 percent of units and
“We hardly sell to the government because it has adopted
20.2 percent of value.
an aggressive price-reduction policy. This policy erodes income at companies like pharmaceuticals, which need
In the past, generics were seen as unreliable alternatives
to earn money to continue reinvesting in research. For
due to cultural stigma but this has changed over the
companies like us, selling to the government is not
last decade, mostly due to government purchasing
viable. We have decided to only sell particular products
preferences and increasingly strict regulation. NOM-
to state hospitals, so 95 percent of our sales are to the
220 – SSA1 – 2015 is the updated law that regulates
private market,” says Felipe Espinosa, CEO of Mexican
pharmacovigilance, a final version of which was published
pharmaceutical company Laboratorios Collins.
in the Federal Official Journal in July 2017. Such regulation helps guarantee the validity of medicines and stops unreliable drugs from tarnishing the sector's reputation. Additionally, to improve access to treatment, COFEPRIS has begun liberating the patents of groups or packets of drugs so that more affordable, generic versions can be produced and commercialized. These actions from the
Out-of-pocket expenditure dropped from 41.8% to 40.8% between 2012 and 2014
regulatory body have resulted in 491 new medicines that cover 71 percent of causes of death in Mexico. “In total, 37 active substances have been liberated through our generics strategy, producing 491 generics, which represent MX$25 billion (US$1.4 billion) in savings while an extra 2 million people can be treated thanks to these savings. In
In the 2016-2017 consolidated purchases, MX$41.9 billion
2017, we will continue with this strategy and more than 40
(US$2.3 billion) was spent and MX$3.4 billion (US$188
new molecule authorizations will be announced,” says Julio
million) was saved. Sixty-three percent of the total amount
Sánchez y Tépoz, Commissioner of COFEPRIS.
spent, or MX$23.4 billion (US$1.3 billion), was spent on generics, according to IMSS. Generics companies, those
One alternative for those that already have manufacturing
either intent on entering the Mexican market or already
plants in Mexico is to focus on private sector sales, as
established here, are adopting alternative strategies to
the margins are typically higher. “At Wockhardt we are
boost sales and to detect new opportunities for growth.
focused on the private and semi-private sectors. Tenders
The market, many say, is just too big to ignore. “Zydus
might give the perception that the government is the
is a new operator in Mexico and we are interested in
biggest market but we need to realize that most of the
expanding our operations. There are various options to
money is in the private sector. Most of us will never go to
do so and to become relevant to the market. We entered
an IMSS hospital. We prefer to go to a private hospital,
Mexico in 2013 and we want to grow both organically and
which means that private insurance policies are increasing
inorganically. There are few trillion-dollar economies in
and are becoming a benefit that some companies offer
the world, so Mexico is a huge opportunity. If any global
their employees in Mexico,” says Francisco Hernández,
Vice President Latin America of Wockhardt, a generics
GENERICS IN MEXICO
company. “We want to reach the private market because there we can promote the new model of doctor’s offices in pharmacies that many prefer because it is cheap, fast and closer to the point of sales,” he says. “In 2013, when I started operations in Mexico, the government market was 70 percent of our sales and private market sales were 30 percent. This number has changed over the years and in
Between 20122016 the price of generics in Mexico dropped 61%
37 active substances have been liberated in 14 packets Resulting in 491 new medicines That address 71% of total disease-related deaths
2016, 60 percent was private and 40 percent government.”
Lower prices have enabled the treatment of an additional 1,998,202 patients
Another option generics companies are exploring is to manufacture private labels for others, such as pharmaceutical chains or retailers that market their
And represent savings of MX$24.6 billion (US$1.4 billion)
own-brand. “The fastest-growing sector in Mexico is the private-label business, of which the largest manufacturer worldwide is Perrigo. That, combined with the trend of having doctors’ consultancies in pharmacies, socalled “doc-in-a-box” programs, is the factor boosting the private-label sector,” says Paul Doulton, Founder & Managing Partner of Oriundo, a consultancy composed of former CEOs that helps new entrants to Latin American pharmaceutical markets. Those without a production plant can do the exact opposite: to look for a company to manufacture for
THOSE RESPONSIBLE FOR PHARMACOVIGILENCE UNDER NOM-220-SSA1-2015
US$3.3 billion
value of the Mexican generics market
Registration holder
them. “One of the alternatives we are looking at while waiting to gain critical mass is to associate with national laboratories that can manufacture for us here in Mexico,”
Sanitary authorities
says José Díaz, Executive Director of Indian generics company Micro Pharmaceuticals Mexico. Health professionals
Patients
Pharmacies
Distributors
Other strategies being looked at by companies include making the most of COFEPRIS’ agreements and Mexico’s central position in the Americas to export to Central and South America and licensing products to well-established companies in the Mexican market. “Mexican requirements cover many of the demands other countries make, so if we
Clinical research centers
Warehouses
Doctors
comply with COFEPRIS we are covering other countries’ rules too. There is also fast-track with other authorities like INVIMA in Colombia, which makes it easier for us to export to other countries,” says William Escobar, Director General of Swiss-Guatemalan generics company Grupo Unipharm.
KEY DIFFERENCES BETWEEN BIOSIMILARS AND GENERICS Biosimilars Similar but not identical to
Generics Bioequivalent and identical to
reference product
reference product
Those that are committed to selling to the public sector plan to win on volume instead of on price by building or buying a manufacturing plant in Mexico, thus gaining access to an increased number of tenders. “Mexican law states that only Mexico-produced products can
20-30% discount over reference product
US$100M – US$200M in development costs
80 – 90% discount over reference product
US$1M – US$5M in development costs
participate in the largest tenders. This is why we want to construct a manufacturing plant,” Díaz says. “This is
8 – 10 year development timeline
3 – 5 year development timeline
stock elsewhere. At the moment, we can only aim for
No interchangeability or
Interchangeable with reference
the crumbs of the cake, while companies that produce
automatic substitution
what we are doing: supplying products that are out of
in Mexico take large slices.”
Sources: COFEPRIS, Deloitte, Seale & Associates
product
87
VIEW FROM THE TOP
PRIZE STIMULATES R&D INNOVATION IN BIOTECH, NANOTECH EFRÉN OCAMPO President and Executive Director of Grupo Neolpharma
88
Q: What areas has Grupo Neolpharma targeted in the last
provide us with a smaller mechanism that would let us break
12 months?
through this barrier. By allying with CONACYT and using
A: We have just completed construction of the plant
its methods of diffusion, if something could be useful for
area in which we will be producing nanotechnology. We
other laboratories they can come to an agreement with the
are moving our production capacity for pilot batches of
council. This also enables us to approach others directly.
biotechnology products there and we are also increasing
It is much more concrete and there are fewer risks when
investment so that all pilot production is carried out under
approaching someone.
GMP conditions. Q: What new heights would nanotechnology enable the Q: What is Grupo Neolpharma and CINVESTAV’s prize for
pharmaceutical industry to reach?
innovation in bio-nanotechnology?
A: Nanotechnology is a technique that can be used to
A: Biotechnology and nanotechnology are two lines in
produce medicine. If a medicine that causes unwanted
which we are interested in stimulating research. The prize
side-effects is made using nanotechnology, those effects
was linked to pharmacology but it is now more open as it
can be reduced instead of damaging the stomach or liver.
has enabled the creation of new materials. The invitation to
Therefore, it is most useful for eliminating the side-effects of
participate is open to all the institutions and professionals
already approved medicines, such as in oncology. Basically,
working in those disciplines and the prize is MX$300,000
nano-capsules can reach cells and they enable the use of
(US$16,666). Half of the award is to reward the researcher
smaller doses. Our innovation in this area is focused on
and the other half is to fund the continuity of the winning
oncology and diabetes.
project. The purpose of the prize is to create new talent, provide exposure and increase the diffusion of these kinds
Q: What solutions is the group providing to the Mexican
of scientific proposals. We are approaching 2016’s winning
health industry?
researcher to ask for his help capsulating some drugs we
A: We must first develop medicines and provide it to the
want to deliver to the limbic part of the brain. He could
greatest number of patients possible. In our case, this
implies a national cost, which determines the price. We have
Q: Where do you rank Mexican talent globally? Is it
done this with our product Transkrip, the patented version
prepared for the rapid changes occurring in companies?
of which costs six times more. Our body is constantly
A: There are no problems with talent for making
defending itself against attacks and when certain cells get
biotechnological medicine in Mexico. We should look
infected, they no longer work as well. Transkrip activates
at Denmark and Sweden, where they have recognized
our cells to better absorb the medicine and in some cases
through studies that biosimilars do not have more adverse
it also reactivates the immune system. TransKrip is a drug
effects than innovative products and that they have the
based in epigenetic therapy that increases the progress-
same therapeutic benefits. We must focus on the resulting
free period of patients with advanced cervical cancer.
benefits in terms of cost once the patents expire.
Currently it is used for cutaneous lymphoma of T-cells and myelodysplastic syndromes. We are completing a project
Q: How is the groupâ&#x20AC;&#x2122;s growth oriented?
on the application of this technology for lymphoma in D
A: By 2020 we want to reach 100 percent growth in
cells. In some cases it has 100 percent efficacy and there is
comparison to where we are now. We have already achieved
a fast therapeutic benefit.
a respectable size in Mexico and other strategic foreign markets so we are confident we will be able to meet this
Q: Where is most of your R&D being carried out?
new expectation. Toward the achievement of this goal we
A: I am looking to mix research by stages, to do some in
have increased our presence in the oncology and metabolic
Mexico and some in the US. There is an innovation and
areas with our biosimilar offer. In the future we want to grow
development research center called Cediprof in Puerto Rico,
in therapeutic areas and begin producing patented and
a site that allows some of our research to be conducted in
high-efficiency treatments, while increasing our sales force.
an FDA environment. This is a strategy we want to extend to other Mexican companies that are working on innovative
Q: What is Grupo Neolpharmaâ&#x20AC;&#x2122;s message to the industry?
projects, so they can develop the early research phases in
A: Grupo Neolpharma wants to coordinate the efforts of the
Mexico and then conclude their research in Puerto Rico
research institutions, the laboratories and the government
without a major investment. This will create fiscal benefits
to lead the Mexican pharmaceutical industry to an
and empower research.
international level. The industry has to keep in mind Mexican epidemiology and which technologies could lead us to the
Q: What opportunities will IMSS opening to clinical
best medicines for the Mexican population. However, this will
research bring for Grupo Neolpharma?
only be possible with a confident attitude that overcomes
A: That is extraordinary because it is where the most patients
the financial challenges we might encounter in the process.
are. For example, the application of the D-cells treatment is valid only for a small number of sick patients with those characteristics. IMSS is where most of them are. In the INCan,
Grupo Neolpharma is a Mexican group that comprises
the process of incorporating the number of required patients
several pharmaceutical companies: Alpharma, Neolpharma
was long. However, with IMSS we can more quickly identify
and
people with a certain condition and deliver the product.
commercialization and distribution
Psicofarma.
It
specializes
in
R&D,
manufacturing,
89
VIEW FROM THE TOP
BIOTECHNOLOGY, THE SCIENCE OF THE PRESENT ALFREDO RIMOCH Director General of Liomont Laboratories
90
Q: What are Liomont’s most important contributions to the
amount to 6 percent of the company’s income. In terms of
Mexican pharmaceutical industry?
regulations, clinical trials have become more complex and
A: Liomont has about 2.7 percent market share and has
expensive. We need transparency and support in terms of
brought products to a broader range of the population.
intellectual property and regulations.
We have created a number of alliances with academic institutions such as the Institute of Biotechnology of UNAM
Q: What are the challenges associated with introducing
and the National Genomics Laboratory for Biodiversity
biotech medicines to Mexico?
(LANGEBIO) of CINVESTAV. Liomont is an active
A: It is an expensive process that we have approached
participant in associations such as ANAFAM, CANIFARMA
through two different routes. The first is by allying with
and the Mexican Pharmaceutical Council (CFM). We
foreign companies such as Oncobiologics and another one
have entered the field of biotechnology with the first
in Spain. We are also preparing some of the test designs,
recombinant influenza vaccine and we are working on the
while some of the protocols are being approved by
development of an anti-zika vaccine in collaboration within
COFEPRIS. The second approach is through alliances with
an international consortium that includes companies from
local universities. Liomont creates projects with scientists
Argentina, Brazil, Japan, the US and Mexico.
from academic institutions. The government has limited funds but it is the main buyer of biotech and high-specialty
Q: At what stage of development is the zika vaccine and what
drugs in Mexico. Liomont must achieve accessible prices to
testing does Liomont do in Mexico?
supply the demand for these products in the public sector.
A: Clinical trials for the zika vaccine will start soon through a program with a partner company called Protein
Q: How does Liomont compete in the generic business with
Sciences. Liomont has started an important clinical trial
pharmacy chains that develop their own brands?
of its influenza vaccine in Mexico with children between
A: Physicians know Liomont’s products, they trust our
six months and 18 years. We are developing two biosimilar
brands and prescribe them. However, pharmacists often
products together with the company Oncobiologics.
substitute the prescribed product for a generic house brand.
The phase I clinical trials for those products have
A change in the Regulation of Health Inputs requires doctors
already concluded. We have also developed another
to prescribe an active ingredient, as well as a brand, which
monoclonal antibody in collaboration with the Institute
has boosted consumer awareness of prices. Nevertheless,
of Biotechnology of UNAM.
Article 79 of the same regulation states that if there is a substitution, this must be authorized by the physician who
Q: What sector presents the greatest opportunity for
wrote the prescription. If not, the product supplied must
Liomont?
be the brand as prescribed. Our main strategy to prevent
A: Liomont is mainly present in pain, respiratory,
generic substitution is based on the doctors associating our
gastrointestinal, antivirals and antibiotics. In terms of
products with quality and trust, so that their prescriptions
economic sectors, Liomont is mainly focused on the private
are supplied as they are issued, and not substituted.
market. Even though 40 percent of Liomont’s products are destined for the public sector, sales in this sector only
Q: What are your development plans in the short term? A: Liomont will continue marketing the trivalent version of its biotech influenza vaccine while filing with COFEPRIS for
Liomont is a Mexican pharmaceutical company with high quality
the tetravalent version that will be sold in 2018. Liomont is
products in the prescription and OTC segments, currently
building a manufacturing and distribution site in the State
occupying the 8th position in the national pharmaceutical
of Mexico. In the area of generics, Liomont will be launching
market in units
around six new brands in Mexico each year.
VIEW FROM THE TOP
PUSHING PATENTED MEDICINES INTO THE IMPULSE CHAIN JUAN AGUIRRE Commercial Director of Grupo Bruluart
Q: How is Grupo Bruluart working to make patented
A: We are working on these liberated molecules. COFEPRIS
medicines more widely available?
has developed a useful strategy based on risk assessment
A: One of our biggest projects has been pushing lines of
and this patent liberation makes the register of new and
patented medicines into the impulse chain. Besides the
generic products more efficient. We can now get generic
old big distributors, there are several pharmacies, clinics
drugs to market much faster and even expect to release
and other retailers where patented drugs are sold. It was
between six and eight products this year from the packages
thought the most economically challenged social group
of 2016 and 2017 in hormonal treatments, some in painkillers
would not buy patented medicines because of the high
and anti-inflammatories.
price but some prefer to acquire medicines at their local pharmacy.
These areas were chosen because we have noticed that painkillers and anti-inflammatories have undergone a
Q: What were the advantages of being ready six months in
similar process to that of antibiotics in the past. People
advance before the change in NOM â&#x20AC;&#x201C; 059 in 2016?
have become accustomed to consuming them without a
A: It helped us get ahead and minimize the effort needed to
prescription, developing a higher tolerance to painkillers, so
comply with the standards. Since we were ready, the number
we expect the new molecules to have a more efficient effect.
of topics we had to cover once the norm was approved was small so we did not have to dedicate many resources to it
Q: What are your ambitions and plans for 2017?
to comply. We also founded the Instituto de Farmanegocio,
A: We have already expanded production at our plant, partly
through which we provide an integral advisory service,
due to COFEPRISâ&#x20AC;&#x2122; regulations. We are complying with all
guiding our clients step-by-step to meet COFEPRIS, SAT and
these regulations and are ready to continue our growth in
other regulatory requirements. Some of our customers are
the manufacturing business through development of more
taxed according to the small contributor regime. As a result,
products. We are looking for new international ventures for
the taxes of those companies are sometimes in disarray
products we sell in large volumes, such as paracetamol or
and they fail to meet regulations. We have convinced and
diclofenac, which in Mexico are largely sold as commodities
advised several customers to fix their fiscal situation so they
and have a better margin elsewhere.
can access various benefits and minimize the risk of not meeting fiscal and health regulations.
On the commercial side, Farmacias GI has a new image and an aggressive expansion plan that includes the launching
Q: To what extent do your products target specific niches?
of a new media campaign. In the distribution business, our
A: We started selling generic drugs that target the general
goal is to train independent pharmacies. Many of these are
population, such as painkillers, multivitamins and antibiotics.
important to rural communities and underdeveloped parts of
Now we are specializing in the hormone niche, especially
the country. We are also expanding our business by visiting
in contraception and hormonal care, because there is
convenience stores and large national chain pharmacies to
less competition and only a few can develop injectable
address a renewed interest in our products in sectors that
contraceptives and hormone drugs. There is a learning curve
traditionally were not attracted to generics but now cannot
with hormonal medicine so we have been focusing on these
get enough of them.
areas for around two years. It is difficult to come up with a market percentage but we manage three of the top 10 products in the public sector.
Grupo Bruluart includes the importer and manufacturer IM Bruluart, Laboratory Bruluagasa, generics company Brudifarma
Q: COFEPRIS is liberating several packages of innovative
and pharmacy chain Farmacias GI. Its goal is to make high-
medicines. How is that affecting Grupo Bruluart?
quality medicine accessible to all
91
INSIGHT
SPECIALIZED APPROACH TO ACCESS THE PRIVATE SECTOR ARISTIDES TORRES Director General of Vanquish
92
In Mexico, the main health concerns are a national public issue
National Institute of Geriatrics, around 800,000 people in
demanding attention from all players in the industry. As a
Mexico are suffering from Alzheimer’s. The company is also
result, national pharmaceutical companies such as Vanquish
commercializing a drug for Huntington disease, a progressive
are shaping their business units to assist the Mexican needs.
brain disorder. “We have the only orphan drug in the country: a product approved by the FDA to treat Huntington and
“Our institutional portfolio deals with cardiovascular diseases,
similar diseases that guarantees 85 percent efficacy,” Torres
CNS, some endocrine issues and antiretroviral drugs for HIV.
says. According to the National Institute of Neurology and
Our private line is specialized in women’s health and abnormal
Neuroscience, in Mexico there are around 8,000 people
conditions like Huntington's, Parkinson’s, and Alzheimer’s,”
suffering from Huntington's and other similar diseases.
says Aristides Torres, Director General of Vanquish. Expiring patents offer the manufacturer another avenue to The company’s current product distribution is 90 percent
expand its base of therapeutic alternatives. “We have recently
generics and 10 percent innovative. However, it expects to
started a portfolio of all generics whose patents are about to
grow its patented medicine area. “Our initial intention was
expire and we are working with a combination of products
to have a 50/50 split between the public and private market.
that today are generics and could have therapeutic benefits
Probably the private is harder to reach but we expect at
for the diseases we are focused on,” says Torres. Vanquish is
least a proportion of 60-65 percent against the rest of the
pursuing the patent for Tenofovir, which is a component of
market,” says Torres. Its strategies for private-sector players
Atripla, the most important product in treating HIV. “It is the
include boosting its portfolio options, targeting neurology and
main therapy used by CENSIDA. It has the biggest demand in
women’s health. Vanquish’s business objective is to achieve
the country.” According to Torres, no company in Mexico has
growth between MX$1.5 billion (US$83 million) and MX$2
a complete antiretroviral portfolio. “We want to manufacture
billion (US$111 million) in revenues by 2019.
and commercialize it, so we can offer a complete service to institutions and create greater access at reduced prices.” The
Vanquish is the first pharmaceutical company to bring a patch
goal is to provide a generic line that could work well with the
therapy system for Alzheimer’s to Mexico. According to the
government’s tighter budget.
VIEW FROM THE TOP
CAUGHT BETWEEN DEVELOPMENT AND REGULATION FELIPE ESPINOSA CEO of Laboratorios Collins
Q: What hurdles do Mexican generics companies face when
expertise can refine their offering and make their businesses
trying to supply the government?
more profitable. We want to make health products more
A: We hardly sell to the government because it has adopted
affordable for the general population so people have
an aggressive price-reduction policy. This policy erodes
options. We also expect this to help us reach the objective
companies like pharmaceuticals, which need to earn money
of 1 percent market share.
to continue reinvesting in research. For companies like us, selling to the government is not viable. We have decided to
Q: To which Central American countries are you planning
only sell particular products to state hospitals, so 95 percent
to export to and what criteria do you use?
of our sales are to the private market. Any business on which
A: COFEPRIS has done a great job becoming an international
we do not make a 20 percent margin is not viable for us.
regulatory agency, which has allowed us to open borders. The first criterion is to select those countries that recognize
Q: Collins has said it is targeting 1 percent market share of
our sanitary regulations with no extra paperwork needed.
generics in Mexico in five years. What are your next steps?
Many of our products are already available in Chile, for
A: In this changing market, five years is a long time. Beyond
example. The second criterion is the size of the market,
that time frame is unpredictable but we plan to penetrate the
leading us to be interested in Colombia and Costa Rica.
market to 1 percent and then change the type of business we manage. We work in pharmachemical generics but in five
Argentina and Brazil are not priorities as the latter is
years we would like to enter the biosimilars market. We also
protectionist and the former has economic issues. Colombia
would like to enter the oncological sector because it is more
is the second most important market after Brazil to which
profitable and sells in greater volume. Biosimilars already
we already export a little but we paused this because the
exist in Europe but many problems with sanitary regulations
Mexican market demands our entire production; it has
remain, which has impeded biosimilars from developing
grown significantly so we are 100 percent concentrated
worldwide. These problems appear close to being resolved
on it. Once we have expanded industrially, we will continue
and once they are, biosimilars will develop quickly because
to export, which may merit us building an annex to our plant
many companies in Europe and the US are moving rapidly.
in Guadalajara. Next to the plant there is a land plot that
Here in Mexico, some companies like ProBioMed, Cryopharma
we are clearing and preparing for expansion. We hope to
and Silanes have undertaken extensive research but have
begin building in the first quarter of 2017.
not advanced further due to uncertainty with regulations. There is still no fixed date for this to conclude because so far
Q: What other short-term plans do you have for
COFEPRIS has mainly focused on revising technical aspects.
Laboratorios Collins? A: Within the group there is another subsidiary called
Q: What results are you expecting from your joint venture
Salud Natural that has a naturist focus and markets herbal
with FEMSA?
products. We hope to obtain the GMP for Salud Naturalâ&#x20AC;&#x2122;s
A: FEMSA wants to enter the Mexican market with 1,000
plant. It would be the first natural product plant in Mexico
pharmacies and began acquiring units three years ago. It
to obtain a GMP and would allow us to export products to
established strong relationships with commercial partners
the US, which is another objective for 2017.
and we were lucky enough to be selected. The relationship is just beginning but is going well and we are working on becoming one of their main laboratories. Our goal with all
Laboratorios Collins is a Mexican pharmaceutical group
our partners is to bring our experience and knowledge to
with 47 years in the market focused on the manufacturing of
the table. Sometimes we can suggest a product they do not
high quality medicine at affordable prices. Its main areas of
have in their portfolio and generally our laboratories and
operation are generics and veterinary care
93
VIEW FROM THE TOP
GENERICS FIGHT BRAND BIAS AMĂ&#x2030;RICO GARCĂ?A Director General Latin America of Apotex
94
Q: What is Apotexâ&#x20AC;&#x2122;s strategy for launching its products
bidding process will make some distributors stronger than
in Mexico?
they already are and that concerns me. For example, a hospital
A: Over the past 12 months we have been first to market
far away in Hermosillo may request a product within 24 hours.
for mometasone, a nasal spray for rhinitis and allergies;
For this, we need to work with a distribution company that
diosmin-hesperidin, for chronic venous insufficiency;
has its own center because Mexico is five times the size of
leflunomide, on the side of rheumatoid arthritis and we
France and we cannot deliver any given product anywhere
are now launching tramadol-paracetamol, a painkiller for
in the country within 24 hours. To become more efficient,
moderate to severe pain. We are reshaping our strategy
healthcare providers are ditching their warehouses and we
to be more active and efficient in product launches. The
are becoming their warehouse. We also must have different
company is targeting different opportunities in the generics
logistics partners because some prefer to work in certain
segment and launching a broad portfolio in CNS products,
therapeutic areas or in specific regions. Ahead of a tender,
which comprises antipsychotics and antidepressants, among
they want a letter of endorsement that says we will supply
others. We will launch over 25 products in three years through
them with a certain product if they win. We sign with the
a full portfolio with a different strategy targeting physicians,
minimum volume and price and if they win the tender, we sell
which is unusual for Apotex. The company will also introduce
the product to them. Some tenders are national, international
some branded products rather than simply generics to
or mixed. It is not that they actually want to bring in someone
complement our product lines. The use of generics in Latin
from the outside but it happens that no local company can
America is different to North America and Europe. It is still
meet the requirements. We participate as a national company
generally a branded market. Bioequivalent products are
if the product is manufactured in Mexico and international if
not available in every Latin American country for example.
it is manufactured in Canada or India. Products made in India
Patients associate brands with quality so, despite the quality
are more problematic because the tender process generally
of bioequivalents, there is still a preference for brands. We
does not accept these, perhaps because the government is
are catering to the demands of the market.
not confident about the quality.
Q: Why do generics generate this level of resistance?
Q: How is the authorized third-party system working?
A: Generics have come a long way. Initially regulation was
A: It works well. It costs money because we have to pay for the
not so strict, so in those days there were products that
service but we get faster approvals. It is beneficial to us and to
did not comply with international quality standards. This
patients, who get new products sooner, and puts lower-cost
bias still exists but regulation is now stricter. COFEPRIS is
generics on the market faster. Some Big Pharma companies
overwhelmed with the work of auditing all manufacturers
are trying to extend IP protection, looking for opportunities
and ensuring the stricter requirements are properly covered.
in the legal framework. As patients and consumers, we
This is an issue and some will be left behind because they
should not allow this. At Apotex Mexico we respect patents,
cannot keep up with rising standards. They would have to
of course, but they should not be extended for reasons that
invest a lot of money to catch up.
do not represent real invention.
Q: What problems do you see with the bidding process
Q: How much R&D is done in Mexico and how important is
established by the government?
that to the development of your business?
A: It changes constantly. At the moment it is talking about
A: Most of the R&D is performed in Canada but our Mexican
packages, which we are still trying to understand. Packaging
research complements our efforts in R&D and is more focused
is more complex because it is not possible to have every
on local needs. Canada focuses on the big markets like itself
product. There are some requirements that are impossible
and the US, while in Mexico we look at Latin American
for us to meet so we need to use distributors. I think the
opportunities to complement them. We have developed 55
95
View of a blister packing and conditioning assembly line
products in our local facilities and many more in Canada.
Republic, Chile, Argentina and we are about to close a deal
In Mexico, we invest 6 percent of sales revenue in R&D and
for Colombia. The generics segment will remain one of the
4-6 percent more in renewing equipment to improve our
main sources of growth for Mexico. We will continue to expand
technology. Canada invests a much higher percentage.
to new therapeutic areas, such as prescription. We will start with CNS over the next three years. It will take us that time to
Q: What types of drugs are researched in your Mexican
gain the relevance we want to have in that area and then I will
facility?
jump to another therapeutic area. Apotex has been a leader
A: I have been working on getting back to basics, reshaping
in Mexico since it entered the country. We are celebrating
the organizationâ&#x20AC;&#x2122;s main activities, and then working a
20 years here and 41 years in Canada. We are one of the few
little on the strategic view of where we are going. Over
vertically integrated companies, with two API manufacturing
the past few years we have been focusing on doing things
sites in Mexico. For 60 percent of our products manufactured
better rather than on specific therapeutic areas, except for
in Canada, the APIs come from our Mexican sites. We are
the CNS line. What we are doing now is aligned with the
committed to this country like no other company.
opportunities we see to penetrate segments in which we do not yet have a presence.
Q: How does the legal environment protect generics companies from litigation in Mexico?
Q: Has the peso depreciation affected your operations? How
A: We still have to work on this. We need to get together and
do you mitigate currency risk?
be more visible to the authorities to make sure we are being
A: It has affected us, of course. We try to not transfer the full
treated fairly. Being close to the US in general helps because
impact to our customers. The company is absorbing some
we want to be recognized as a highly regulated country that
of it by developing efficiencies. Some we are tackling now,
can manufacture products that can be sold everywhere. As
improving efficiencies and productivity. We are also trying
we deliver on that, it becomes easier to build trust.
to develop the export segment because we export in a hard currency. When reviewing market figures, it is possible to see
Q: How has the wave of patent expirations benefited Apotex?
that Apotex is not raising prices as quickly as inflation or in
A: The products I mentioned for which we will be first to
line with the currencyâ&#x20AC;&#x2122;s depreciation. My view is that we will be
market have expiring patents and we are using the opportunity
depreciated, but with the fundamentals under control it will be
as soon as we can. This is happening across therapeutic areas.
strategy more than a consequence. We export a good number
For the CNS line, it will be branded so we do not need to
of our Mexican manufactured products to South America. We
launch the product as soon as the patent expires. For generics
negotiate most of those sales in dollars, which mitigates the
however, it is vital to be first.
effect to a certain extent. Q: What expansion plans do you have for the coming years?
Apotex is the largest Canadian-owned pharmaceutical company,
A: We manage the LATAM region from Mexico. Now we
with over 10,000 people employed worldwide in its research,
have three affiliates in Panama, Nicaragua and Costa Rica
development, manufacturing and distribution facilities. The
and we already have partners in Guatemala, Dominican
company produces around 300 generic pharmaceuticals
VIEW FROM THE TOP
BRINGING INNOVATION TO THE ENTIRE POPULATION GUILLERMO IBARRA Director General of Teva Mexico
96
Q: What are the challenges associated with operating in
to balance the products we bring from Teva Global with
so many different therapeutic areas?
the needs we see in the country.
A: The biggest challenge Teva faces is to follow people through all the stages of their life. We are present in several
Q: Quite a bit of your pipeline is in pain and respiratory.
areas, including CNS, women’s health, pain, multiple-
What market need does this respond to?
sclerosis and oncology; our goal is to give patients access to
A: Pain is the number one cause of medical consultations in
innovative pharmaceutical solutions at an accessible price
the world, including Mexico. Patients go to doctors because
across the countries we work in. We want to contribute to
of symptoms and one of the primary symptoms is pain.
generating greater access to healthcare worldwide.
Because of this, pain is something that we at Teva take very seriously. We want to offer patients choices that include
Q: How does Teva operate in both the public and private
innovative combinations to make them feel better.
sectors and how does it choose which areas to focus on? A: In Mexico, we take part in the public sector by selling
Q: Eritropoyetina theta was recently brought to Mexico.
products to the government and health institutions by
What are Teva’s expectations for this product?
participating in government tenders. In the private sector
A: An area in which Teva is innovating is in its oncology
we participate through chain pharmacies, self-service
supportive care portfolio. So far, we have brought
retailers, distributors and local and regional wholesalers.
two innovative molecules to Mexico. Eritropoyetina
Finally, a company must choose its therapeutic areas based
theta, which helps patients undergoing chemotherapy
on its R&D capabilities. Companies must deliver products
treatments improve their levels of red cells by treating
that provide value for the payer, the institution, the patient
secondary anemia that results from chemotherapy. The
and the doctor.
second molecule is Lipegfilgrastim, which treats febrile neutropenia (fever and low white blood cells). Both
Q: How much R&D does Teva do in Mexico?
products are extremely important for patients undergoing
A: Globally, we have 26 R&D centers. In Mexico, our products
chemotherapy because they allow them to continue with
undergo bioequivalence testing with patients through
their treatment without having to suspend due to negative
authorized third parties. In addition, we have participated
effects. Some state institutions have already begun using
in phase III and phase IV studies here in Mexico.
these products, which suggests that we are on the right track. We want to have these products included in the
Q: How do you choose which products to bring to Mexico?
National Formulary in the future.
A: There is a selection committee in which medical, commercial and business development perspectives
Q: How many of Teva’s products are included in the
are taken into account. The country faces chronic-
National Formulary?
degenerative challenges and there is a change underway
A: We participate every year in the public tenders held
in the population pyramid. Twenty years ago, the common
by the government through IMSS, ISSSTE and other
problems patients faced were mainly infections; today, we
institutions. Regulation has resulted in many benefits
face chronic and chronic-degenerative diseases. We try
for both patients and the government. We can compete because we have the necessary scale to offer competitive prices, a network of pharmaceutical plants throughout
Teva is the world’s largest generics company, producing 120
the world and we are also one of the world’s main API
billion tablets and capsules per year. The Israeli pharmaceutical
manufacturers. This gives us significant power to offer
offers specialty medicines, generics, OTCs and APIs in CNS,
quality products at reasonable prices in government
respiratory, oncology and women’s health
tender processes.
Q: What are the advantages of manufacturing APIs instead
improving, updating and raising the bar for our plants. An
of buying them?
economist said that even if we do not want it to happen,
A: We do buy APIs from others but we manufacture a
Mexico will be the seventh-biggest economy in the world
large percentage of our consumption. We have three
by 2027. There is an opportunity for us to partner with the
pharmaceutical plants in Mexico: one in the State of Mexico,
government, institutions, payers and doctors to provide
another in Mexico City and the largest in Jalisco, in addition
accessible and innovative medicinal solutions that benefit
to an API plant, also in the State of Mexico. Most of what
patients and their families.
we produce is for Mexican consumption but we also export to South America.
Q: What benefits have resulted from the company’s acquisition of RIMSA?
Q: How beneficial is having a Mexican office and having
A: It brought us a portfolio of products in the primary care
COFEPRIS approval for operations in other LATAM countries?
segment in which Teva did not previously have a significant
A: Exporting is not easy. We export to Brazil, for example,
presence. These products will be relaunched after being
a country with strict regulations. We are glad to see that
reformulated. They are products that have a strong reputation
COFEPRIS is taking the necessary steps to become an
and differentiation in areas such as pain.
internationally recognized agency.and has made the decision to become a recognized and renowned agency.
Q: What are your ambitions in Mexico over the next five years?
Q: What is Mexico’s role in Teva’s global operations?
A: We have a defined 10-year plan. We want to continue
A: Teva has drawn up a list of countries with growth
beefing up our portfolio from our pipeline and to continue
markets and Mexico is among them. One of my jobs has
our organic growth, introducing the best talent we can to
been to internally sell Mexico to our global headquarters.
the company while being socially responsible. We have a
It is a country that has industrialized greatly and is not
portfolio of innovative products that touch lives, which is a
reliant on commodities; it has steady economic growth
privilege for us because our activities transcend commercial
of around 2-2.5 percent per year, which in the long term
objectives. Our growth will be organic moving forward. We
makes Teva Global want to continue investing in the
have a generous pipeline of new products that are being
country. We have invested many millions of dollars in
evaluated, reformulated or undergoing COFEPRIS submission.
INSIGHT
GENERICS STILL FACE RESISTANCE FROM DOCTORS ALEXIS ESPINOZA Managing Director of AMSA
Laboratorios AMSA is the generics arm of Laboratorios
The company aims to provide affordable medicines to
PiSA, one of the largest Mexican pharmaceutical
Mexican patients through retailers, distributors and a
companies. Its main therapeutic areas are hydration,
range of pharmacies.
dermatology, diabetes, cardiovascular, obesity and weight control, pain, fever and inflammation. A particular area of
Espinoza says that although patients have begun to
success the company has found is in its antibiotics line.
recognize the quality of generic medicines, challenges remain. “One challenge is the resistance to change by
“AMSA probably has the third-largest sales volume of
prescribing doctors. They cling to patented medicines
antibiotics in the country. However, today we have many
as a means of identification and forget the patient’s
products for cardiology. These two types of products
budget, which is what determines their decision to find
have something in common: they are generics. This is
more affordable medicines,” he says. Present nationwide,
AMSA’s most important business,” says Alexis Espinoza,
the company’s goal is to increase its sales volume and to
Managing Director of AMSA Laboratories.
continue a steady pace of organic growth.
97
INSIGHT
MANUFACTURE LOCALLY TO CREATE AFFORDABLE PRICES GURULINGA KONANUR Director General of Hetero Mexico
98
Generics provide a cost-effective alternative to branded
National Center for the Prevention and Control of HIV/
products, allowing for more accessible healthcare. This is
AIDS (CENSIDA) reported around 200,000 people
important as the general population is more financially able
living with HIV in Mexico and an estimated 100,000 new
to purchase the treatment it needs and the public sector
infections. UNAIDS estimates there were 4,000 AIDS-
health institutions are able to purchase a larger quantity of
linked deaths in Mexico that year.
drugs. Despite initial reservations, the generics market in Mexico is growing, mostly due to government consolidated
Although generics are growing at a faster rate and allow
purchasing preferences for generics as it allows the
for better access, the population continues to demonstrate
treatment of more patients on a shrinking budget.
a brand bias, showing a preference for branded generics. “I think over 70 percent of the Mexican population would
Hetero Group, an Indian generics company, is one of the
look for a good branded generic,” says Konanur. He adds
main manufacturers of antiretroviral therapy drugs (ARVs)
that although it took some time for branded generics to
worldwide with a third of the world’s market share. “For
be accepted, doctors are now comfortable prescribing
every three patients, one is taking a Hetero product either
them. “Pharmacists also encourage generics. They receive
directly or indirectly as we supply APIs to other suppliers,”
many kinds of incentives to promote the generics of the
says Gurulinga Konanur, Director General of Hetero Mexico.
pharmacies they belong to,” Konanur says. This is most
“We want to bring all these high-tech, high-specialty
likely aided by the fact that many pharmacies stock their
products to Mexico, manufactured locally at an affordable
own-brand generics and are looking to boost sales, he says.
price,” he says, adding that the company expects Mexico to be among its best growth performers in Latin America.
Another main issue with access to medicine is the
“The generics market in Mexico is growing over 20 percent
growing counterfeit or black market. Many companies are
per year and even branded generics are growing when
taking precautions to ensure they are not inadvertently
compared to innovative products.”
participating in this by ensuring both their medicine and packaging does not fall into the wrong hands, says
The general population is also increasing its generic
Konanur. He explains that the generics sector is seemingly
purchases as many must pay out of pocket in one of the
less affected because the products are cheaper and more
most privatized healthcare systems in the world. The OECD
widely available, adding that it is often the larger names
reports that only 5.8 percent of GDP in 2015 in Mexico
that are subject to counterfeit, just as in other sectors. “I
was spent on healthcare, almost half of which was out of
have not seen as many issues with counterfeits in generics
pocket. Indeed, access to healthcare is one of the greatest
as in innovative products. The sales margins are smaller in
challenges facing the Mexican healthcare system. INEGI
generics so they are not affected so much,” says Konanur,
figures show that only 62.2 million people had access to
adding that his company employs many innovative
IMSS services as of July 2016 and despite government
packaging techniques that make the boxes difficult to
efforts, this figure represents only a 33.3 percent increase
imitate. “We have one of the most innovative packaging
in the 10 years since 2006.
departments in the world.”
The prevalence and availability of generics is important
To further expand its Mexican presence, the company has
for pandemics such as HIV/AIDS because drugs for these
acquired land near Toluca and expects to be manufacturing
diseases can be expensive and are needed by many.
products from a custom-built factory there by the second
HIV/AIDS treatment in Mexico is free for all, whether
quarter of 2018. “We are in the planning stages and by
registered with a health institution or not. It is therefore
January 2017 we will be kick-starting construction,” Konanur
important for drugs to be cost-effective. In 2015, the
says, adding that foreign investment has aided the process.
VIEW FROM THE TOP
MEXICO PROVIDES ROOM TO GROW MS NAGENDRA Director General of Zydus Pharmaceuticals
Q: Zydus works in generics but is looking at biosimilars
A: The vision established by our chairman is to make Zydus
and vaccines. Which strategic therapeutic areas interest
a quality, global research-based company. Regulation
you most?
surrounding biotechnology and biosimilars is not yet
A: Zydus started as a generics company but its unique
extensive. We took some time to fully understand this and
distinction from other Indian pharmaceuticals is that it is
we are now efficient at handling small molecules. Officials
the first company to register a new chemical entity (NCE).
worldwide face big challenges in laying down the pathways
Saroglitazar, used to treat diabetic hyperlipidemia, was
and putting systems in place for biotech. COFEPRIS is
launched in 2013 and we are looking to commercialize it
dynamic and understands the importance of biosimilars due
globally under the name Lipaglyn, starting with a handful
to the exorbitant cost of innovators. Over the past 10 years,
of countries including Mexico. The second area we are
the importance of biological products in terms of usage and
considering entering is biosimilars and vaccines. We started
market share has increased, which is a clear indicator of
working on this as few companies will provide a portfolio to
the future of the pharmaceutical industry. Few are capable
the extent of over 20 biosimilars and around 20 vaccines.
of producing them, which gives Zydus an advantage in
Some of these products have already been launched in India
tending to this need.
and they will be taken to other emerging markets. Q: What will be Zydus’ priorities for next five years in Q: What is the company’s strategy to carve out a bigger
Mexico?
slice of the Mexican market?
A: We want to consolidate our CNS business in the next five
A: Zydus is a new entrant in Mexico and we are keen to scale
years. We will look at how to leverage our strengths for R&D
up our operations. There are various options to do so and to
capabilities, to look for opportunities for inorganic growth
become relevant to the market. We entered Mexico in 2013
and to fulfill our aspiration to access the tender market. We
and we want to grow both organically and inorganically.
will try to carry out some global clinical trials here to make it
There are few trillion-dollar economies in the world and so
easier and faster to get COFEPRIS approval. The regulatory
Mexico is a huge opportunity. If any global generic company
environment is extremely dynamic and COFEPRIS does not
wants to increase in size and importance, it must have a
depend on others to approve its decisions. It is self-sufficient
presence in the larger markets and Mexico is the 11 largest
and it knows the countries’ needs.
th
pharmaceutical market in the world. Q: Do you have plans to build a plant in Mexico to bolster Q: What strategy did introducing the CNS portfolio to
your chances of selling generics to the government?
Mexico correspond to?
A: To be successful in Mexico there is no one particular
A: We initially explored various areas as CNS is not one
segment or style of operation. The government tender
of our major business lines. Overall, we have strong lines
market is worth around US$2-2.5 billion. We have the
in gynecology, respiratory, cardiology and diabology, but
capability to supply to it but we do not have local facilities.
not CNS. However, CNS is in the top five chronic diseases
However, there are ways to circumvent this: one is to
and the area is growing. Looking at health indicators,
manufacture indirectly. It would be a key move from an
depression is classed among the top five, which is rare for
investor point of view.
an emerging market such as Mexico. We found that CNS could be important for us and our decision was the right one, so we are confident we will continue to see growth.
Zydus Pharmaceuticals is an Indian generics laboratory, part of Cadila Group. In Mexico, it offers solutions mostly in the
Q: Zydus aims to be a research-based company by 2020.
CNS area and hopes to soon commercialize biosimilars and
What roles will CNS and Mexico play in this?
vaccines, becoming a research-based company by 2020
99
VIEW FROM THE TOP
BUILD GENERICALLY FIRST THEN ESTABLISH BRANDS FRANCISCO HERNÁNDEZ Vice President Latin America of Wockhardt
100
Q: What is Wockhardt’s main area of focus for new products?
which means that private insurance policies are increasing
A: Wockhardt Latin America and especially our branch in
and are becoming a benefit some companies provide to
Mexico is focused on three big areas: diabetes, CNS and
their employees in Mexico. In fact, IMSS is looking to apply
antibiotics. Last year we launched two drugs for diabetes:
an integral model wherein private clinics participate because
human recombinant insulin and oral anti-diabetics. For CNS,
it is spending too much on diabetes, cancer, CNS and other
we developed a product for epilepsy, which in Mexico is
chronic diseases.
increasing by 12-14 percent each year, and released a product for depression. The third area is antibiotics. Wockhardt
This is the next step for the healthcare system, to look at
performs clinical R&D of new chemical entities and we have
privatization or semi-privatization for the most concerning
at least nine of these developed at our sites in India, Europe
diseases. Patients who need dialysis and hemodialysis
and the US, where we have at least two products in phase
consume 45 percent of IMSS resources and they are a very
III. The others are in phase I and II but with a really good
small population. Two million to three million require dialysis,
performance, so they will probably be released in 2020 or
whereas the remaining 45 million IMSS beneficiaries require
2022. We are now launching three generic antibiotics. We
other services. We want to reach the private market because
want to first build our base with generics and then establish
there we can promote the new model of doctor’s offices in
our own products in the market.
pharmacies that many prefer because it is cheap, fast and closer to the pharmacy.
Q: Is there still resistance to generics in Mexico or are they now accepted by consumers?
Q: In 2015 the private market accounted for 40 percent of
A: The market penetration for generics is increasing as more
Wockhardt’s business. How did this evolve during 2016?
people make their own purchasing decisions. Pharmacists
A: Now it is more. In 2013, when I started operations in
can let customers choose between a brand and a generic.
Mexico, the government market was 70 percent of our sales
People are selecting the generic because of the price but in
and private market sales were 30 percent. This number has
the generic market there are three differentiation points: price,
changed over the years and in 2016, 60 percent was private
quality and efficacy. These are fulfilled in the Mexican market,
and 40 percent government. We made this change because
which gives people the perception generics are as good as
the government has an issue with payments, so for us it was
branded medicine.
better to secure our income through these sales.
Q: To what extent do you participate in government tenders?
Q: What security measures do you use to protect the chain
A: For many national companies, especially those focused on
of custody?
generics, the tender market is where most of the opportunities
A: In the pharmaceutical industry, we must be as vigilant as
are but at Wockhardt we are focused on the private and semi-
banks. It is important to assure that those who buy products
private sectors. Tenders might give the perception that the
get originals, so we take protective measures with tablet
government is the biggest market but we need to realize that
packaging. We put the batch number and expiration date on
most of the money is in the private sector. Most of us will never
a special foil. Also, we apply a hologram in the middle and we
go to an IMSS hospital. We prefer to go to a private hospital,
want to put a QR code on the boxes so when the patients scan it with their phone, the doctor’s name and dose should appear. These tools are important because without them there is a risk
Wockhardt is a pharmaceutical and biotechnology company
of medicine ending up on the black market. The authorities do
headquarted in Mumbai, India, providing high quality
nothing about it. This personal approach is important in areas
medicines. It has relevance in the fields of pharmaceuticals
like diabetes because you need to handle insulin carefully.
and biotechnology
A bigger dose can put the patient in a coma and a smaller
dose can cause a diabetic shock. We are trying to move to
the Andes region, Ecuador, Peru and Venezuela; from Brazil
personalized service and sell to patients directly.
we reach Uruguay, Argentina, Paraguay and Chile and from here we control Mexico and Central America. We have many
Q: How can you sell directly to the customer?
customers and partnerships in these countries, all focused on
A: To do that, it is necessary to create a relationship
diabetes, CNS and antibiotics.
between specialized centers and the patient, and to use an app that can provide client information. If government
Q: How does having a COFEPRIS authorization for your plant
tenders become a system where patients are referred
help you expand?
to associations or clinics, it is possible to provide a
A: Definitely. Having authorizations in big countries like Brazil,
personalized service through a database.
Mexico and Colombia helps because COFEPRIS, the National Agency of Sanitary Vigilance (ANVISA) and the National
Q: What time frame are you considering for this innovation?
Institute of Medicine and Food Vigilance (INVIMA) are
A: This is going to take three or four years to develop.
ministerial authorities, which the rest of the region is looking
An example of this is the Mexican antidiabetic center
for best practices.
in Guadalajara, which is the governmentâ&#x20AC;&#x2122;s first attempt at a semi-private service. The government referred at
Q: What new products do you have in the pipeline?
least 30,000 patients to the center for integral diabetes
A: This year we are launching a generic insulin drug, glargine,
treatment. Patients consult with a physician, nutritionist
to treat diabetes. It is long-acting and gives the patient better
and physiologist and the medicines are paid for by Seguro
control of the treatment because it provides them a 24-hour
Popular. This is a model the government wants to scale up
insulin dose in one shot, eliminating the need for two or three
across other states early next year.
shots per day. We are trying to improve the performance of the drugs and control of the disease.
Q: What expansion plans are in Wockhardtâ&#x20AC;&#x2122;s future? A: Wockhardtâ&#x20AC;&#x2122;s expansion in Latin America started in 2014.
The company will introduce another four generic antibiotics
Today, besides Mexico, we have an office in Brazil and are
and is looking forward to developing a clinical trial for two
looking to open one in 2017 in Colombia. These will be our
new chemical entities at a nutrition institution and an IMSS
three LATAM offices, because those are three big countries in
hospital. As for CNS, we will try to register more drugs in the
the pharmaceutical industry. From Colombia we can handle
epilepsy and depression segments.
Wockhardt is a Mumbai-based global research-oriented pharmaceutical
and
biotechnology
organization
that
manufactures vaccines, APIs and generics. It has a marketing presence on all five continents and has plants in the US, Europe
101
VIEW FROM THE TOP
AGGRESSIVE GROWTH FOR INDIAN PHARMA SANDEEP BANE Director General of Accord Farma
102
Q: Accord Farma promotes itself as a fast-growing
will launch four patented products next year that we will
generics company. What is your growth rate and how will
manufacture in Toluca.
you sustain it? A: We work in specialty medicines, oncology mostly.
Q: Accord Farma is present in over 70 countries. How
We grew by 40 percent in 2016 in Mexico and we intend
important is Mexico for its global sales?
to grow by a similar margin next year through our
A: Mexico contributes around 1-1.5 percent to Accord’s US$2
biotechnology facility in Toluca, which will begin operating
billion global sales. There are plans to increase this, which
in July-August 2017. We are adding new molecules,
is why we have invested in the biotechnology plant here. In
which will ensure our continued growth and we expect
the next three years, we will add around 80 products to our
biotechnological products to boost this further, with a
portfolio, from 62 now, and we expect the Mexican branch to
30-40 percent year-on-year increase expected in that
be a MX$1 billion (US$55 million) company by 2021. These
segment. The biotechnological facility will produce mostly
new products will be across generics, oncology and our
oncological products. Around 15 percent of our revenue
hospital line. The latter already includes 10 products and we
comes from biotechnological products.
will be adding 20-30 products. The hospital products include our anesthesia line and we have just launched two new
We are among the top three companies for oncological
anesthetics, with three more coming by June 2017. Although
products in Mexico in the private generics segment. We sell
our hospital line does include some niche products, we will
seven or eight molecules to the government and oncology
be focusing on high-volume products because they will
is our core business here. We are not actively seeking to
boost our presence and help us grow rapidly. In oncology,
increase government sales — we want 33 percent of our
we focus on oral therapy and hematological injectable
business to go to the government and we are maintaining
products because there is less competition in this market.
this percentage. The advantage of this strategy is that as government business is acquired year by year, even if we
Q: What are the company’s plans to enter other Latin
lose a tender we will not suffer that much.
American markets? A: We have already selected a portfolio of around 15 products
Q: What is the strategy behind manufacturing solely your
to be sold in Latin America. In the near future, Accord Farma
oncological line in Mexico?
will be exporting to most Latin American countries. We will
A: We import around 80 percent of our products but we
increase our plant’s capacity in the first half of 2017 by 30-40
know that the future also lies in manufacturing locally. We
percent and by 2018 at least 10 molecules will be exported to
chose to produce oncological products because those
at least two to three countries. By the time this is completed,
require a smaller manufacturing facility with high potency,
stability studies will have been carried out and we will be fully
while other products are sold in high volumes, requiring a
ready to export. We will rely more on CM but if after 2018
large plant, which involves high costs. Therefore, we are
we require more plants then we will build them. A plant can
choosing niche products to manufacture locally and we can
be built in a year.
go down the contract-manufacturing (CM) route for others. We already manufacture four oral generics this way and we
Q: What have you learned from other generics markets and how is that applied to Mexico? A: Actually, many of the strategies we implemented in Mexico
Accord Farma is an Indian-based generics company that
were copied elsewhere. Globally, the company is known for
entered Mexico in 2006. It has three lines: Onco Care, Farma
CNS drugs, which we did not implement here. We chose
Care and Cliniq Care. Oncological treatments are its primary
oncology, which other countries are now copying and
focus in Mexico
globally there is now a large pipeline of oncological products.
INSIGHT
ALLIANCES CREATE A PATH TO GROWTH ARÍSTIDES SALAZAR General Manager of Mexico, Central America & the Caribbean Region for Emcure Pharmaceuticals
Generic medicines are on the way up in Mexico, forcing
to sell its products locally under its own brand name. “If
changes on Big Pharma that are reshaping the market,
we can support Mexican health with accessible and high-
says Arístides Salazar, General Manager of Mexico,
quality products, we must do it,” says Salazar.
Central America & the Caribbean Region for Emcure Pharmaceuticals, a company that works in R&D and
Alliances are key to the company’s market penetration
manufactures for leading companies such as Roche.
in Mexico because they allow the company to insert its products into the portfolios of its partners. For example,
“The golden years of Big Pharma are over and the entrance
Emcure has licensed out its gastrointestinal product
of generics has changed the game,” Salazar says, adding
Gamo (Levopantoprazol) to Sanfer, one of the largest
that “the future of the industry besides genomic medicine
Mexican generics players. “Our company has at least four
is in biosimilar drugs and generics.” According to Deloitte’s 2016 Global Life Sciences Outlook, generics were expected to reach 36 percent of health spending by 2017. “In Mexico, around 80 percent of medicines in terms of units are generics,” says Salazar, which he attributes to the high volume purchased by the public sector in tenders and due to their low-price points. “The problem with Big Pharma companies is that the process of decision-making does not take place locally, which means decisions must be taken at higher levels of the corporate
“
other partnerships under development,” said Salazar.
In Mexico, around 80 percent of medicine units are generics” In Mexico, the most important segments for Emcure are gastrointestinal and cardiovascular. However, it works a series of therapeutic sectors at the global level
ladder, thus delaying negotiations. Emcure’s ideal is to have
with distinct production lines focused on each target
a flexible business without ruling big companies out.” Its
country’s needs. Emcure’s global portfolio includes HIV,
flexible approach allows the company, which manufactures
oncology, biosimilar drugs, diabetes, gastrointestinal,
chiral molecules, generics, biosimilars and novel drug-
cardiovascular and painkillers, among other areas.
delivery systems, to adapt to the markets it enters. “The top
“Diversification enables Emcure to adapt to the needs
priority is to consolidate the Mexican subsidiary by taking
of the market and customers and to the portfolios of our
advantage of the opportunities we have here,” he says.
partners,” Salazar says.
The company has no manufacturing plant in Mexico. With
The company looks forward to eventually participating in
no FTA between Mexico and India, it is licensing out the
the diabetes segment with an integral portfolio of related
production of its medicines to other companies. “There are
products, as therapeutics for diabetics mkae up one of
several companies with unused capacity that are looking
the biggest sectors in the global pharmaceutical market,
to manufacture for other companies,” Salazar says. Emcure
especially in Mexico. Its portfolio includes modified
considers entering alliances with those companies, although
molecules and innovative combinations that reduce
it may invest in building or acquiring a manufacturing plant
cholesterol levels and thus the chance of cardiovascular
once it has reached sufficient critical mass in sales. “Then,
arrest in diabetic patients. Emcure expects to start selling
we could harness distribution to the US and the rest of Latin
its products under the Emcure brand in three to four
America and the Caribbean,” he adds.
years. Building a manufacturing plant is a possibility in five to 10 years but its short-term priority is to consolidate
Emcure aims to introduce revolutionary products to the
partnerships and to start the registration process for its
Mexican market, to start taking part in public tenders and
products.
103
104
Production line at Aspen Labs' Vallejo plant
VIEW FROM THE TOP
INNOVATING WITH HIGH-QUALITY GENERICS RICARDO GANEM Vice President and General Manager of Perrigo
Q: What does innovation entail for a company focused
developing products and brands that best fit each of their
on generics?
strategies. Even smaller pharmacies have varying strategies.
A: For us, innovation has to do with effectively developing
Some sell from behind a counter like traditional pharmacies,
high-quality and affordable generic versions of drugs
whereas others are more like mini-supermarkets where you
whose patent has or will expire. To achieve this, we
could even buy groceries and other convenience items. This
must develop the products our customers require, file
is a model more often seen in the US but it is a growing
for approval from local health authorities and do our
trend in Mexico.
best to be first to market. Another source of innovation comes from our business model, as we develop strategic
Q: How much more receptive are Mexican consumers and
partnerships with our customers to launch their private
authorities to products from a US-based company than
labels. Retailers do not have manufacturing and we are
from other countries?
manufacturers without stores.
A: Perrigo has a significant footprint in Mexico with four state-of-the-art manufacturing sites. The vast majority
Q: Perrigo now owns NiQuitin. How popular are these
of our products are manufactured locally and all have
tobacco-replacement products in Mexico?
marketing authorizations from COFEPRIS. I am not sure
A: NiQuitin is a great brand and a very effective treatment.
that consumers make any distinction between local and
Unfortunately, we found that NiQuitin had been somewhat
imported products but both retailers and consumers have
neglected in the Mexican market and there were many
confidence in our quality and service. The big change in
out-of-stocks resulting in many consumers not being able
recent years has come from the growing confidence in
to continue their treatment. However, we are correcting
generics by Mexican consumers. Every day, more and
those supply issues and customers are now able to stock
more people prefer to buy generics vs brands, with full
the products. There is a global trend to stop smoking
confidence that the quality and therapeutic effect will be
and Mexico is not the exception. Recent legislation is
the same but at a much more affordable price.
making it harder to be a smoker and there is a growing trend toward wellness that has made people more likely
Q: How important is Mexico for Perrigo globally?
to drop the habit.
A: Our business in Mexico is extremely important to Perrigo's global operations. Not only do we share a very
Q: How are your products distributed between the public
similar business model with the US branch of Perrigo, but
and the private sectors?
we service many of the same strategic customers that have
A: The public sector represents around 15 percent of
presence on both sides of the border. We have identified
our sales and we sell only through distributors and only
Mexico as the country in Latin America with the greatest
specific products. In the private sector, we are partners
potential for growth as the economic and demographic
with large and small retailers in Mexico in the development
conditions are very promising for our industry. We believe
of their store brands. Some laboratories focus more on
that each day there will be more opportunities to develop
their own brands and others sell almost exclusively to
significant supply chain partnerships between our countries
the government. We operate opposite to that because
due to NAFTA.
most of our business, capacity and efforts are focused on manufacturing for our retail customers. Perrigo is one of the worldâ&#x20AC;&#x2122;s largest manufacturers of private
Q: How does Perrigo develop its strategy for each retailer?
label goods for retailers, leading the OTC sector. Founded in
A: Each retailer is different, with distinct formats and
1887 in the US, it has been present in the Mexican market
specific strategies. Our job is to work with them in
since 1954
105
INSIGHT
STRICT RULES FAVOR LOCAL PRODUCTION In Mexico, the largest single purchaser of generic medicine is the public sector. It is no wonder then that increasing sales to this sector is widely seen as a solid growth strategy. In 2017, IMSS alone spent MX$41.9 billion (US$2.3 billion) on the consolidated purchases, acquiring 1,371 types of products, 63 percent of which were generics. However, the tender system favors companies 106
that have manufacturing plants in Mexico, seemingly leaving those that do not out in the cold. That is enough incentive to build and produce locally, says José Díaz, Executive Director of Indian pharma company Micro Pharmaceuticals.
“
One of the alternatives we are looking at while waiting to gain critical mass is to associate with national laboratories that can manufacture for us here in Mexico” José Díaz, Executive Director of Micro Pharmaceuticals Mexico
“Mexican law states that only Mexico-produced products can participate in the largest tenders. This is why we want to construct a manufacturing plant.” There is a profitable
alliances with pharmacies and national pharmaceutical
loophole, however: companies that do not produce in
laboratories. “One of the alternatives we are looking at
Mexico can sell to the government when larger companies
while waiting to gain critical mass is to associate with
cannot meet the tenders. “This is what we are doing:
national laboratories that can manufacture for us here in
supplying products that are out of stock elsewhere. At
Mexico,” says Díaz.
the moment, we can only aim for the crumbs of the cake, while companies that produce in Mexico take large slices,”
Micro Pharmaceuticals Mexico is also looking at
Díaz says.
pharmacies for allies because they have a great volume of own-branded products. The company is keen to enter
The consolidated purchasing system often means
this segments with the large pharmacy chains, including
enormous savings for the public institutions that
those in supermarkets.
participate, representing MX$3.4 billion (US$188 million) in 2017. However, Díaz points out that this often obliges
An expansion from Mexico to Central America is also in
companies to operate at a loss and is not necessarily
the works. “We are on the verge of closing a deal with
better for everyone. “Sometimes the health sector sets
a Guatemalan distributor and we are participating in a
costs extremely low and it seems impossible that the
US$12.5 million tender in Guatemala. We will continue to
product could be sold at a price so low it is below the
look for similar opportunities across Central America,”
production cost,” Díaz says.
says Díaz. The products it takes to Central America will not be those available in Mexico, as the company adapts
Micro Pharmaceuticals Mexico is not closed to working
each portfolio to the country’s needs. “What sells in India
with the public sector and once its manufacturing
will not necessarily sell in Mexico,” he explains.
plant is up and running, it looks forward to finding new opportunities, Díaz says.
These countries are easier to enter for foreign companies because regulation is not as strict as in Mexico. “Whereas
The Mexican generics market as a whole was worth
in Mexico we cannot sell a product that does not have
US$3.33 billion in 2015, according to Seale & Associates.
Mexican registration, in Central America a product need
Although Micro Pharmaceuticals has almost 500 products
only be registered once, anywhere, to be available for
available to purchase in India, only 12 are on Mexican
sale,” Díaz says. In addition, COFEPRIS is becoming
shelves due to slow regulatory approval.
increasingly recognized globally as a regulatory agency that demands high standards. Díaz believes the company
“We do not know how long it will take to get approval
can compete against the multitude of products available
for the other products,” says Díaz. This means that
in less-strictly regulated countries with its high-quality
Micro Pharmaceuticals Mexico cannot rely on its large
products produced in FDA-certified manufacturing
portfolio for sales and growth. Instead, it has created
plants.
INSIGHT
RENEWING COMMERCIAL VISION IN A COMPETITIVE MARKET WILLIAM ESCOBAR Director General of Grupo Unipharm
For generic companies, the rules of the public purchasing
planning a new aperture to the market with a line of branded
system have become clearer since the establishment of the
generics to expand private purchases and thus balance its
consolidated purchase. However, the low prices paid by
sales in the public and private sectors, which now represent
the government in the process have led them to seek more
76 and 24 percent, respectively. “The essence of Grupo
opportunities in the private sector, says William Escobar,
Unipharm is to be a branded generic laboratory. Now we have
General Director of Grupo Unipharm, an international generics
both lines, pure generics for the government and branded
company that is expanding to the commercialization of
for private companies,” says Escobar. Given the race to the
branded generics in its Mexican division.
bottom in terms of prices in the generics industry, Unipharm’s new line is aimed at chronic diseases, providing solutions for
“We want to go out with a new sales projection in the
patients with recurrent cardiometabolic conditions such as
Mexican market. Our corporate structure here is still at a
hypertension, diabetes and obesity. There are also products
low level compared to our businesses in the Andes and
for CNS, depression and for neuropathic pain. According to
Central America. Our vision is for Mexico to represent 75
Escobar, this line will help the company migrate to a position
percent of our operations and make the country our largest
halfway between the generic and the innovative brand. “With
market,” Escobar says.
the quality and prices we will bring to the market we want to create more loyalty with patients and show the medical
The company’s main objective with this commercial change
community that we are cost-effective.”
is to go from “quality product at a very low price, to highquality product at a fair price,” Escobar says. To achieve this
Besides increasing its portfolio from 36 to 54 products by
goal, the pharmaceutical company, founded in Switzerland
2018, Grupo Unipharm’s strategy also focuses on getting
and based in Guatemala, is working to restructure its brand
closer to health professionals by sending sales representatives
in the Mexican market, where the company’s operations
to visit them face to face. Just like other medium-sized
grew 186 percent over the past year and with growth
companies, Grupo Unipharm is pressured by market demand
expected to reach 300 percent in 2017-2018.
to be more efficient, faster and better. To meet this demand, the company is developing plans for the construction of a
Grupo Unipharm has been in the Mexican market for 20
new plant in the State of Mexico that will manufacture solid,
years and its portfolio is composed of a primary care line,
liquid, semi-solids and sterilized drugs. The plant will pursue
antitussives, antibiotics, products for women’s health,
international certifications to be more functional and dynamic
minerals and vitamins. In this context, the company is
for the grup's operations in the region.
DISTRIBUTION OF MEXICAN BRAND VS GENERIC DISTRIBUTION OF MEXICAN BRAND VS GENERIC DRUG MARKET AS OF 2014 BY VALUE DRUG MARKET AS OF 2014 BY UNIT 2014 MEXICAN DRUG MARKET SHARE
Patented brand retail sales
By value
By unit
45.2% 10.2% 20.2% 9.2% 15.2%
59% 17% 14%
8% 2%
Branded generic retail sales Non-branded generic retail sales Generic institutional sales Patented brand institutional sales
Source: statistica.com with the latest information available
Original retail brand
Retail generic Original retail brand
Retail brand generic
Institutional
Retail generic
107
Babyleo equipment for neonatal care
MEDICAL DEVICES
5
Mexico has great potential for medical device manufacturing. Baja California has become a cluster for many international brands attracted to the quality human capital and low operating costs in a strategic location. According to Global Health Intelligence, more than 4,000 people are employed in this manufacturing hub. Technological development is driven by the aging population and the widespread prevalence of age-related conditions such as hearing problems, mobility issues, cardiovascular and CNS conditions. Another driver is the burden of chronic diseases that suggest the development of devices that aid people with cancer, diabetes and lung diseases. Innovation has mostly focused on facilitating treatment and early diagnosis, which is key to improving quality of life and the rate of successful outcomes.
Medical devices come in all shapes and sizes and this chapter will provide an overview of devices big and small. From the production of MRI machines to surgical equipment, from wound care to pregnancy tests and heart valves to knee replacements, all will be discussed in this section. It will showcase interviews from the companies that make these devices and will focus on their role in the Mexican healthcare system and the regulatory challenges they face.
109
CHAPTER 5: MEDICAL DEVICES 112
ANALYSIS: Good Manufacturing Picture Helps Overcome Economic Challenges
114
VIEW FROM THE TOP: Mauricio Valero, Linet Group SE
116
VIEW FROM THE TOP: Javier Giraud, Fujifilm
117
VIEW FROM THE TOP: Juan Pablo Solís, Becton Dickinson
119
VIEW FROM THE TOP: Francisco Morales, 3M
120
VIEW FROM THE TOP: Martín Ferrari, Dräger
121
VIEW FROM THE TOP: Alejandro Paolini, Siemens Healthineers
122
VIEW FROM THE TOP: Nelson Valenzuela, Arthrex
123
SPOTLIGHT: SynergyRF
124
INSIGHT: Germán García, Smith & Nephew
125
VIEW FROM THE TOP: Fernando Oliveros, Medtronic
126
INFOGRAPHIC: The Medical Devices Segment in Mexico
128
VIEW FROM THE TOP: Carlos Jiménez, B. Braun Aesculap
130
INSIGHT: Ulises Bacilio, Grupo PTM
131
VIEW FROM THE TOP: Zaid Badwan, MediPrint
TM
System with ApolloRF
TM
Probes and SynergyUHD4
TM
System
111
ANALYSIS
GOOD MANUFACTURING PICTURE HELPS OVERCOME ECONOMIC CHALLENGES Over the last year, the medical devices industry has
“The prices are also low so they are not
faced challenges from currency depreciation to budget
sustainable in the long term. We can offer
cuts that have forced it to make the most of the Mexican
those prices for one year but not several years
manufacturing industry’s capabilities
running, especially with the depreciation of the Mexican peso against other currencies.
112
In November 2016, the Mexican peso became a victim
This is not sustainable and endangers quality,” said Martín
of the US elections. Before voters went to the polls, the
Ferrari, Director General of Dräger Mexico. Ferrari says
already-weakened currency was at MX$18.5 per dollar.
the first step should be for the government to understand
By the time the votes were counted, the peso had sunk
the value of complete solutions and then change the
to MX$20.74, a historic low against the US currency that
model to purchasing based on specific therapeutic needs.
pushed up prices of imported goods. Coupled with lower
He believes that government purchases of equipment
oil prices that forced government budget cuts, medical
from different brands for a surgical room will then require
devices companies have increasingly turned to the
different maintenance teams, different guarantees and
private sphere to support their bottom lines.
different providers. If it buys integral solutions, there will be more guarantees, he believes.
“We gained market share and we grew above the market but it was difficult because of the peso’s devaluation
OUTSOURCED MANUFACTURING
against the US dollar and cuts to public budgets due to
Despite the economic difficulties, foreign companies
the drop in oil prices. However, our growth was stable
are tapping into Mexico’s strong potential as a base
thanks to the private market, which continued to invest
for outsourced manufacturing of both medical devices
despite the fact that the public market contracted,”
types classified by CANIFARMA: Supportive Products
says Alejandro Paolini, General Manager of Siemens
for Health (PAPs) and Reactive and Diagnosis systems
Healthineers Mesoamerica.
(RSD). According to CANIFARMA, PAPs are widely produced in Baja California and, based on ProMéxico
Mexico generates US$8 billion in medical device exports and 92 percent of those go to the US
data, the northern state has become a cluster for many international brands, mostly from the US and Europe, attracted by low operating costs in a strategic location and quality human capital for manufacturing. In fact, the US provides 70 percent of the firms based in Tijuana and Tecate and 86 percent of the top investors, according to ProMéxico.
As the government trimmed its budget, it also offered lower
Mexico generates US$8 billion in medical devices exports
prices for products. In 2016, the Ministry of Finances and
and 92 percent of those exports go to the US, says Edgar
Public Credit rolled out a series of cuts, slashing its budget
Romero, President of AMID. Broken down by product,
in February by MX$132 billion (US$7.3 billion), in April by
Mexico is the third global exporter of tubular suture
MS$175 billion (US$9,7 billion) and in September by another
needles and the fourth for instruments and devices for
MX$239 billion (US$13.2 billion). Among the top targets were
medicine, surgery, dental and veterinary health, based
health and education, which had a direct impact on the
on ProMéxico data.
purchasing capacities of health institutions. The consolidated purchase system has helped the government to continue
According to INEGI Mexico is home to approximately
purchasing supplies and drugs while saving money. Since
400 exporting companies, most of them focused in the
2013, IMSS has saved MX$14 billion (US$777 million) through
manufacturing industry. INEGI data also shows there
the scheme, said IMSS Director General Mikel Arriola in 2016.
are more than 2,500 economic units specialized in
Companies have few qualms about the system, believing
medical devices in Baja California, Tamaulipas, Sonora,
it a good government initiative; however, they say the
Nuevo Leon, Mexico City, Jalisco, State of Mexico and
purchases should be oriented toward integral acquisitions
Coahuila. In addition, ProMéxico predicts that by 2020
by therapeutic areas instead of individual products that, sold
the production of medical devices in Mexico will reach
at low prices, are not profitable.
US$25 billion.
Classification of medical devices
Categories of medical devices
according to the risk implied by their use
Medical equipment: apparatus, accessories and instruments that have a specific use and are intended for surgical or exploratory procedures, diagnosis,
•
Class I
treatments, rehabilitation or for biomedical research activities.
supplies for which security and
Prosthetic, orthosis and functional aids: devices intended to replace or
not introduced inside the body.
efficacy is approved and that are
complement a function, an organ or tissue.
•
Class II
Diagnosis agents: all supplies, including antigens, calibrating antibodies,
might have variations in
controls, reactive, reactive equipment, crop and contrast tools and any others
concentration of the material they
used as aids for other clinical or preclinical procedures.
are made from, usually they are introduced inside the body for less
Supplies for dental health: all tools and substances used for dental health. Surgical and healing materials: devices and materials that with or without
than 30 days. •
Class III
antiseptics and germicides that are used in surgical practice or in treatments of
supplies recently approved for
continued use.
medical practice that are introduced
Hygienic products: materials and substances that are applied to the skin or cavities that have pharmacological or preventive purposes.
inside the body and stay in for more than 30 days.
Source: COFEPRIS
Adding to Mexico’s attractiveness is the pool of human
will increase investment in innovation because less time needs
resources available to companies looking to establish
to be spent on other things,” says Romero.
manufacturing sites in Mexico. According to Global Health Intelligence, more than 4,000 people are employed in
In addition to local incentives for the medical devices industry,
the Baja California manufacturing hub. US-based health
Mexico still has room to boost its position in the outsourced
technology company Becton Dickinson, which focused on
manufacturing sector. ProMéxico's Sector Diagnosis study for
IV devices for drug administration, is among those taking
the medical devices industry suggests the main obstacles to
advantage of the country’s talent. “Of BD’s 45,000 global
development are a fragmented and bureaucratic healthcare
associates, 9,500 are Mexican, or nearly 20 percent. They
system, a low expenditure in health per capita and a lack of
are distributed throughout our operations in Mexico City, San
trained staff in health institutions to use the technology. “The
Luis Potosi, Sonora and Baja California. We export products
medical devices market in Mexico is underdeveloped, which
made in Mexico to the US, Asia, Europe and the rest of Latin
means there are many opportunities to grow,” says Germán
America,” says Juan Pablo Solís, Vice President and General
García, Director General of Smith & Nephew, a UK company
Manager of Becton Dickinson Mexico, Central America and
specialized in wound management and orthopedics.
the Caribbean. According to the study Medical Devices Outsourcing Mexico’s strategic location, with access to the Latin American
Market 2016-2020, the global outsourced manufacturing
markets as well as the US and Canada, is attractive for
industry is growing at a compound annual rate of 11 percent.
European companies, such as global supplier of hospital beds
A study developed by Technavio showed that the major
Linet Group SE. “To ship beds from the Czech Republic to
reasons for outsourcing are “gaining specialized expertise,
Chile takes two and a half months. The entire Pacific coast
harnessing a high supply chain, avoiding issues such as high
is far from Europe, so a Tijuana plant (which Linet plans to
manufacturing costs and overcoming capacity constraints.”
build) would benefit these countries, especially Peru and to some extent Ecuador,” says Mauricio Valero, the company’s
AMID’s Romero says the government faces the challenge
Managing Director in Mexico.
of how to evaluate the new devices and ensure that the most innovative medical devices reach patients. “Now,
The process for approval of medical devices has also improved
from releasing a product to releasing its next generation,
after COFEPRIS decided to deregulate certain accessories.
there are only two or three years and the evaluation system
AMID is responsible for 80 percent of COFEPRIS’ sanitary
for new products is not used to working with such short
registers and the association’s President believes the
time frames. Medical devices account for 70-80 percent
decision to deregulate some items ultimately will lead to
of sanitary registrations in Mexico. How to evaluate them
more investment. “Deregulating these items is good because
and the cost/benefit over time is a new challenge for any
COFEPRIS can use its time to check true technological
government, including Germany and the US. The main
innovations instead of regulating these other products. This
challenge is bringing these devices to the country.”
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VIEW FROM THE TOP
HIGH-TECH BEDS SECRET TO GOOD HOSPITALS MAURICIO VALERO Managing Director of Linet Group SE in Mexico
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Q: How is your business divided between the public and
Czech Republic has been recognized for many years for its
private sector?
excellence in cars, trucks and heavy equipment. Beds are
A: The public sector’s contribution in terms of medical
no exception. There are two manufacturing centers, one
devices is much more important. As of 2016, the public
in Germany and one in the Czech Republic. The quality
sector accounted for around 60-65 percent. Our business
control we gain by manufacturing the product under one
model does not include direct sales; we work only with
roof and our competitive pricing also contribute to the
distributors and we reach most of the public sector. This
product’s success. In addition, we sell in Mexican pesos,
is part of our strategy to serve the market in the best
not in a hard currency. This is an important part of our
way possible. Distributors are much better at navigating
financial work here, which improves our profitability. There
the public market. Hospital chains, the main contributors
are two major global companies selling these products,
to the private market, know that they would not receive
both from the US, and they are comfortable in their
a high degree of added value from local distributors so
positioning. Linet Group SE is surely the third biggest
they prefer to do business directly with a company if it is
producer globally. Our solid marketing, our strategy and
located within the country. Private sales do happen and it
the experience of our employees helped us make the right
is an area of business we are looking to further develop
decisions when establishing our model. Picking the “low-
in the future. Our range of products is the same for both
hanging fruit,” as the Americans say, has helped us grow
sectors and globally. There is no difference between
quickly. We do not have national coverage and we do not
developing countries or mature markets. If people need
have a presence in the most remote areas. There are many
a solution then it must be offered to them, even if it costs
areas yet to be explored, such as our German beds for
a little more.
geriatric or chronic care. This is a market that is opening as there are many retirement homes opening, especially
Q: What is the company’s strategy in the face of public
for those with greater economic resources.
sector budget cuts? A: Fortunately, our products suffer less from budget cuts.
Q: What is the potential in Mexico to explore this new
Cuts tend to affect the entire construction of a hospital
market opportunity?
rather than our business, which comes mostly from new
A: The retirement-home market will grow greatly, amid
hospitals. Because information pertaining to new hospitals
an increase in the elderly population and in chronic-care
is widely available, we can begin working in advance to
patients and as the number of children to look after their
position our products. The past two years have not been
parents decreases. We need general guidelines for this
easy for the medical devices industry in general but they
area and companies like ours must create the appropriate
have been fantastic for us. This is our third year of operations
models. The National Institute of Geriatrics (ING) is starting
here as a subsidiary and Mexico is our most important
to operate public centers for this type of care, but the states
market in north Latin America. In our first year, we sold a
are not sure what infrastructure they should offer. The private
little under €2 million B2B, €4 million the following year and
side is developing again, although it is a little disorganized.
an estited €8 million in 2016. This is exponential growth and
Some homes have high standards and are very expensive
we hope it continues.
while others only offer shared rooms with no professional care, furniture or fittings. A multidisciplinary team with
Q: What is behind the company’s strong growth?
nutritionists, a geriatrician, nurses and the adequate
A: One factor is the product itself. It is of high quality
equipment are required. We are focusing on geographical
and produced in the Czech Republic, which in terms of
areas that are agreeable to retirees, especially areas that
manufacturing costs has many similarities with Mexico and
have a large economic capacity such as popular tourists
both have a high-quality labor force. Manufacturing in the
spots like San Miguel de Allende or Baja California.
Q: How is innovation shaping Linet’s offering?
clients a larger range of products. Borcard specializes in
A: Our intensive therapy beds are extremely important
birthing beds, which is in line with our vision to provide
medical devices for a patient’s hospital stay. The first
quality care for women in labor. I believe this is an intelligent
challenge is making people understand that this is not
and logical acquisition.
a piece of furniture. It is a medical device that can cost up to MX$1 million (US$55,000). That is a lot of money
Q: What are the company’s plans going forward?
and technology but the goal is for a patient to have the
A: Our growth in Mexico, Latin America in general and in
best quality of life possible. One of our most important
the US is good. Linet Americas sold almost US$50 million
innovations with this bed is the possibility to offer
of beds. This is the market where the world number one and
automatic lateralization therapy because its construction
two of the sector are from so it shows promise. The beds are
allows it to move laterally and to incline. In this way, a
shipped from the Czech Republic so we have a disadvantage
serious disease called ventilator-associated pneumonia
on delivery times compared to the competition. It was
can be avoided. This disease occurs in intensive-care
decided that we will need to find somewhere to put another
patients who are immobile. It is much simpler to avoid
factory when the time and the sales volumes are right. At
this disease, which is costly and prolongs the patient’s
the end of 2015 we went on a commercial and diplomatic
care, increasing the burden on the public sector.
mission to Tijuana where there is an important cluster and a number of companies producing medical devices. There is
We also have a line of active mattresses built around
a well-developed logistics chain there and the possibility to
plastic cells filled with air. The part in contact with the
have three ports for exportation: two to Mexico and one to
patient’s body inflates and deflates, preventing the
the US. There are advantages that are not found elsewhere
patient from developing pressure ulcers. These are
in the Americas and so it is practically decided that Linet
serious wounds that are caused by immobility and are
Group SE will build a factory in Tijuana. Global political
expensive to treat. There are protocols in place to avoid
uncertainties combined with the Mexican election campaign
these pressure ulcers but there may be cases in which
can delay projects. We will most probably see a few years
the nurses cannot move the patient because they are too
that are not so dynamic. Although this sector is a little
heavy, for example.
more immune to these factors, it will surely be affected to some extent.
Q: How can this technology help address the scarcity of beds in Mexico?
Q: What other countries in Latin America does Linet want
A: The idea is to reduce as much as possible the length of
to expand to?
a patient’s stay in more complex and expensive areas such
A: To ship beds from the Czech Republic to Chile takes
as intensive care. There are not enough beds in Mexico,
two and a half months. The entire Pacific coast is far from
which has a deficit of at least 20,000-30,000 beds. If we
Europe, so a Tijuana plant would benefit these countries,
can free up beds in complex areas through technology,
especially Peru and to some extent Ecuador.
more patients can be treated and moved to less complex areas of hospitalization. Another trend that could arise is
We also hope to increase our number of technicians and
an increase in home care.
clinical specialists. Because our beds are made in the Czech Republic, they are designed with the strictest security
Although there is much to be done, the situation is
standards in the world. In 2012, the previous security
improving. We differentiate ourselves through aftersales
standard of 1998 was updated and our competitors in the
services. Beds are medical devices, not furniture, and they
US have not yet adopted this stricter standard. It means
require maintenance. As far as I know, we are the only
the beds support a little more weight, are a little taller and
company with a clear aftersales service strategy. We also
are less likely to collapse. Measures have been put in place
have personnel specialized in clinical applications. We
to ensure that a patient’s extremities cannot be trapped
provide thorough training to all that will be in contact with
by the bed. The number of accidents that occurred in beds
the beds. Services such as how to clean and dry the beds
was high, which is why this standard was adopted. Our
seem simple, but the useful life of a bed can shrink due to
competitors have bought factories in Europe to sell to that
something simple being ignored.
market, instead of updating their own factories.
Q: How will the acquisition of Borcard impact Linet’s Mexican operations?
Linet Group, based in the Netherlands, is a supplier of high-tech
A: We were previously collaborating with the company
hospital and nursing beds for over 100 countries worldwide.
because it complemented our product line and now we
The Linet range also includes accessories such as anti-pressure
have decided to acquire it. It is much simpler for us to offer
ulcer mattresses, mobile equipment and healthcare furniture
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VIEW FROM THE TOP
INNOVATING IN PREVENTIVE MEDICINE: IMAGENOLOGY, SOFTWARE JAVIER GIRAUD Medical Systems Manager at Fujifilm Mexico
116
Q: What solutions do you offer in Mexico? Who are your
A: In medicine, there is a smaller amount of Big Data than in
key customers?
other industries, so we manage it differently. While there is a
A: There are five great subdivisions in which we are
high quantity of small data in other sectors useful for creating
working but imagenology is the most important for us. In
statistics, in medical IT we have fewer files, but they occupy
this division, we sell the only 50-micron mammography
much more digital memory. For example, a mammography
machine on the market able to perform tomosynthesis and
machine is used to produce a final image of around 40MB,
enhanced-contrast mammographies. Over 400 hospitals
although our latest mammography machine can produce a
and clinics are fully integrated through our medical IT
final image of over 200MB. If this mammography includes
division, either through the cloud or individual clouds.
tomosynthesis, the file is 10 times larger. Finally, the resulting
To this end, Fujifilm just released its newest product
mammography will be a single file of one gigabyte. Thus, Big
globally: Vendor Neutral Archive (VNA) software, which
Data must be managed differently.
fully interconnects hospitals and their departments. Our endoscopy division participates in tenders for both IMSS
Digital technology enables the making of thousands of
and ISSSTE, because these institutions perform many more
photographs to produce more precise diagnoses and our
endoscopies than the private sector. The fifth division is
imagenology system can produce four or five thousand images
ultrasound, an area in which we are highly specialized and
per test. New technology is needed to process and manage
which produces Sonosite, our key product.
these images at the rate the physician needs to visualize them. To meet this need, Fujifilm developed a visualizing platform
Q: What value does VNA software offer the health industry?
called Picture Archiving and Communications Systems
A: VNA interconnects hospitals within a system to produce
(PACS). This software administers the images and uses a
the complete medical profile of a patient, including the
new platform called DICOMweb. This technology interprets
results of medical tests, and provides it to the physician.
all the archives it receives and provides better test results in
It would be complicated for a single software supplier to
less time. Mexico invests the least in health in the OECD, with
provide all required solutions in this category to IMSS,
public spending at US$541 per capita yearly and US$1,052
the second-biggest health institution worldwide. I think
including both private and public spending per capita per year
the best choice is not a single unified system for every
as of 2015. About 30 percent of this money will be used for
physician but rather there should be an appropriate system
medicine and the portion left for medical equipment is low.
for each physician and the chance for that system to be
I think this has been changing lately and we are becoming
interconnected with the rest. Telecommunication companies
less corrective and more preventive. To prevent breast cancer,
will be Fujifilmâ&#x20AC;&#x2122;s allies during the entrance process of VNA
Mexico needs to invest in early detection equipment, which in
and therefore we work hand-in-hand with them. We have
the long-term will save more money.
signed a commercial alliance with Telmex. We have the know-how, but they are aware of the market.
Q: Fujifilm invested in cellular regeneration company Regcell. What are the advantages of such investments?
Q: How will Fujifilm manage the Big Data obtained
A: Fujifilmâ&#x20AC;&#x2122;s value is its innovation and the company does
through VNA?
not want to fall behind. As part of that the company has been investing in cellular regeneration through companies such as Regcell. Today, it is possible to send a DNA sample
Fujifilm Mexico is the local subsidiary of Japanese giant
and receive a piece of skin for healing burns. The goal of
Fujifilm Holdings Corporation. Its medical systems division
the technology is to develop a cellular 3D printer capable
comprises the areas of imagenology, endoscopy, ultrasounds,
of printing different kinds of tissue. Tissue and organ
dry chemistry and related support services
regeneration is where the industry is heading.
VIEW FROM THE TOP
THE ANSWER TO TOP HEALTH CONCERNS: TECHNOLOGY JUAN PABLO SOLÍS Vice President and General Manager of Becton Dickinson Mexico, Central America and the Caribbean
Q: How important is Mexico to Becton Dickinson’s global
of-the-art medical devices, it is more likely he or she leaves
position?
the hospital sooner.
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A: Mexico has long been a successful market for the company. The country is the second-largest market in Latin
Q: What business models help keep high technology
America after Brazil. Over the years we have gone from
affordable for the public and private sectors?
being a syringe company to taking up a leading position in
A: We work on different axes, first generating local clinical
clinical diagnosis, molecular chemistry and flow cytometry
evidence about the benefits of our innovative products to
markets. Of Becton Dickinson's (BD) 45,000 global
the healthcare system, then early adopters among public
associates, 9,500 are Mexican, nearly 20 percent. They are
and private institutions embed the new technologies. Once
distributed throughout our operations in Mexico City, San
a product is proven to work, the system tends to adopt it
Luis Potosi, Sonora and Baja California. We export products
en masse. At Becton Dickinson, we have a wide range of
made in Mexico to the US, Asia, Europe and the rest of Latin
products that are affordable depending on the need, which
America. Our success in Mexico can be explained through
is why we play at different levels of the healthcare system,
our commercial and manufacturing history of over 60 years.
following our purpose to advance the world of health.
Q: How has Becton Dickinson permeated the Mexican
Q: What is Becton Dickinson doing to support the
market to ensure continued growth?
digitalization of the Mexican healthcare system?
A: 2016 was an important year for BD. Globally, it was the
A: We have several technologies that support healthcare-
first year we operated with the integration of Carefusion,
system digitalization. Through our solutions for lab
acquired in 2015. Carefusion has a strong portfolio of
automation, for example, we can connect different
innovative products and with this alliance, the company
instruments to link clinical results to a lab and a hospital
widened its footprint around the world. In Mexico, BD
database. Our value proposition in medication-management
consolidated its market leadership, focusing on providing
systems can help with drug/patient traceability that is so
solutions for the country’s main health issues. We are
badly needed in our country to avoid medication errors.
relevant in key fields such as women’s health and cancer — we produce the best technology for the early and accurate
Q: What type of technology have you developed for the
integrated diagnosis of cervical cancer. We continue to be
protection of healthcare professionals?
an important player in healthcare worker safety, providing
A: We have developments designed to prevent accidental
a wide range of products that make clinical and medical
punctures. A traditional syringe has a barrel and a needle,
practices safer for Mexican professionals, and we are
so when nurses give an injection, they are vulnerable to
becoming more relevant in diabetes management, with a
punctures. With our system, once the injection is made, there
large percentage of patients using our specialized syringes
is a mechanism activated by a spring that covers the needle.
and pen needles for their daily care.
These security products have seen great acceptance in the private sector and we want to show the benefits of this line
Q: How can BD technology help to improve the effectiveness
to public institutions. Our clinical evidence shows that using
and productivity of the Mexican public healthcare system?
these products greatly benefits the entire healthcare system.
A: Many innovative medical device companies, including BD, offer a set of products that in the short-term may appear to be more expensive than traditional devices. However,
Becton
the new features, such as safety for healthcare workers
technology company focused on IV devices for drug
and for patients, bring benefits in the long-run for the
administration, cancer diagnosis, diabetes treatment and
healthcare system. If a patient can be treated with state-
cellular research
Dickinson
is
a
US-based
international
health
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VIEW FROM THE TOP
INNOVATION SAVES LIVES, LONG-TERM COSTS FRANCISCO MORALES Director of the Healthcare Divison of 3M
Q: 3M manages a large variety of brands. Which are the
Q: What system is in place to track the user’s experience
most important in Mexico and what is your added value?
of 3M products?
A: We divide our business into five groups, each of which
A: We have well-established metrics. In hospitals, for
is responsible for driving brand awareness locally. We want
example, we can measure infection rates and their
the same image to be projected in Mexico, China and the
reduction. This is hard data that can corroborate our
US. I am in charge of healthcare. In this sector, Littmann
progress. The same goes for hand hygiene. If people
is one of our most recognized brands and is synonymous
comply, infections are reduced. The same applies to food
with quality. Another strategic brand is Tegaderm, which has
safety because we can prove there are no pathogens or
been growing globally and is the most important brand in
food viruses on instruments.
Mexico in terms of sales. Both Tegaderm and Littmann will receive strategic investments in 2017. 3M provides added-
Q: What are the results of 3M’s work with the Fundación
value because although a product may be more expensive,
Carlos Slim?
its positive outcome will reduce total healthcare expenditure.
A: We signed an agreement with the foundation to participate and collaborate in education through the
Q: What are the greatest challenges 3M faces in Mexico?
healthcare academy, which is an umbrella for any kind
A: The country’s improving life expectancy and increase in
of educational activity. We worked on this with the
chronic diseases present an opportunity. The more cost-
foundation and with IBM. Students are eager to learn
efficient solutions we can offer, the better the system
about new practices and new technologies and we struck
will work. One 3M solution helps to prevent infections in
an alliance with Del Valle University to provide these.
operating rooms, creating savings for patients and hospitals.
Part of the university’s responsibility is to show students
An example is a patient’s temperature. The longer patients
not only the history of their field but also what they will
are in surgery, the lower their temperature drops, which
encounter on a daily basis in their practice. If students
puts them at a higher risk of infection and cardiac arrest. A
graduate knowing the latest technology, they can jump
blood transfusion also increases risk and thus the cost. By
into the workforce right away with the necessary skills.
maintaining a patient’s temperature throughout the surgery, risk and costs are lowered. We estimate that less than 5
Q: Which are your main objectives for 2017?
percent of surgeries in Mexico happen with a temperature-
A: In healthcare, we are investing heavily in coverage,
management system. This is an opportunity for us.
adding more resources to broaden our reach, covering more hospitals, dentists and areas in food safety. We look forward
Q: What strategy do you employ to enter your products
to greater growth, considering that the market is expanding
onto the National Formulary?
due to chronic diseases. We are focusing on adding more
A: We need to show a positive clinical outcome, the expected
technicians, providing more education to the market and
cost and the potential savings. If we add innovation just
more sales reps to reach more people. We look forward to
for the sake of it, the authorities will not be interested
identifying key opportunities to offer solutions that improve
because it will increase cost without improving clinical
lives every day through science and innovation. This is our
outcomes. If the clinical outcome is positive but does not
ultimate and main goal as a company.
generate savings, it will not be accepted. We offer all these requirements through health-related economic and data analysis tools that allow us to show an infected patient’s
3M is one of the world’s largest manufacturers of science
hospital stay would be longer, increasing overall costs. In
and innovation products. An American company, it is focused
addition, this person is not going to work, impacting family
on health, automobile, energy, communications, security,
life. These are direct savings.
manufacturing and transportation
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VIEW FROM THE TOP
BENEFITS OF DIGITAL ERA ALREADY ON DISPLAY MARTÍN FERRARI Director General of Dräger Mexico
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Q: What have Dräger’s main achievements been in
monitoring equipment. This is a good initiative from the
digitalization since last year? What are you pursuing
government, but it should focus on purchasing solutions
through digitalization in healthcare?
that could be integrated and become part of a system in
A: We had a lot of success with the INCan and we have
the future to provide a better service instead of purchasing
integrated five data digitalization systems with electronic
individual pieces of equipment. The prices are also low so
records for critical care areas and the surgical rooms that
they are not sustainable in the long term. We can offer those
use our equipment. At a government level, we still have
prices for one year but not several years running, especially
the same flows and issues in the compliance process.
with the depreciation of the Mexican peso against other
However, we have seen the benefits in the institutions we
currencies. This is not sustainable and endangers quality.
are already working with. Now, nurses have more time to
The first step should be to understand the value of complete
focus on patients instead of collecting data on paper. The
solutions and then change the model to purchasing based
doctors can make better and more precise decisions with
on specific therapeutic needs. If the government purchases
the new tools.
equipment from different brands for a surgical room, they will have different maintenance teams, different guarantees
Q: What are the obstacles to integrating these solutions
and different providers.
in more hospitals? A: There is a budget for equipment purchases but the
Q: How are Dräger’s commercial interests split?
problem is the way the government buys and plans
A: Our business operations are split 50/50 between
investment in the mid to long term. The purchase is focused
government and the private sector. We want to increase
on solving immediate problems, so we are missing better
our business with the private sector and achieve a
evaluations and long-term planning to invest in solutions
split more like 40 percent government and 60 percent
that impact problems and processes. IMSS has changed its
private. Due to its business model, the private sector is
purchasing process greatly and we hope this filters through
more dynamic in its purchasing and we can process our
to other federal institutions.
sales directly with clinics. The sector is on its way to establishing integrated solutions that we can support
Q: What other priorities does Dräger have within Mexican
with our portfolio. We are seeing some success with
healthcare?
Dalinde and Hospitales Star Médica. We created an
A: We want to change our business model and go directly
alliance with Christus Muguerza for building surgical
to market, without intermediaries. We have been working
rooms with B.Braun and Diphsa that could bring many
on this for a long time and many doors have opened as a
benefits for private institutions.
result of the government’s new purchasing systems. Q: In what areas does Dräger focus its innovation activity Q: What benefits have you had from the new purchasing
and what new products are in the pipeline?
schemes?
A: We are focused on intensive care, ventilation, anesthesia
A: We saw a great result with the IMSS’ scheme and we were
and neonatal care. In the specific case of neonatal care,
successful in the consolidated purchasing of ventilators and
this year we are launching a new incubator called BabyLeo, a crib with thermoregulation. It provides many benefits when working with newborns, such as efficiency, a quiet
Dräger is a German company established in 1889 that operates
environment for the baby at 40 dB(A) and ease of care-
across sectors including mining, oil and gas and health, where
giving for clinicians and parents. It is also possible to
it specializes in medical devices for hospitals in the surgical,
perform surgical procedures inside the incubator while
intensive and neonatal care and monitoring sectors
maintaining humidity, temperature and oxygen control.
VIEW FROM THE TOP
CHANGE IN FOCUS FOR MEDICAL DEVICES GIANT ALEJANDRO PAOLINI General Manager of Siemens Healthineers Mesoamerica
Q: There is a trend toward deregulation of medical devices
Siemens as a whole. In addition, there are many synergies
in Mexico. How does this impact your operations?
and similarities between the other parts of the business,
A: This trend is good for us as long as it is done intelligently
although not for healthcare. We can now take strategic
and efficiently. Regulation is a difficult topic because our
decisions faster. If we want to make an M&A decision, take
industry is highly regulated in all parts of the world and
a new strategy or create new products we no longer need
it has to be protecting the population. However, it must
to refer back to Siemens. The brand name is to give us a
also be efficient and not be an obstacle for the population
specific identity. Not everyone understands the meaning
to have access to the latest technology. A balance must
at first but Healthineers expresses our engineering and
be struck between protection and access and I believe
pioneering background applied to the healthcare industry.
COFEPRIS is working on this in an intelligent way. What is important is that COFEPRIS has maintained an open
Q: In 2016 you reached agreements with hospitals in
dialogue with the industry and we need to talk with them
Turkey. To what extent is Siemens interested in agreements
through our associations such as AMID and CANIFARMA.
with hospitals in Mexico?
Serious companies want a regulated industry but regulation
A: We absolutely are. At the same time as continuing
that is efficient enough to avoid being an obstacle.
investment in new products and R&D, we want to expand our business into new services related to our products.
Q: What growth has Siemens Healthineers seen in 2016?
That is the final goal: to be the enabler or facilitator of
What were the main drivers of this?
healthcare providers, enabling them to perform better with
A: In 2016, Siemens Healthineers Mexico had a good year
higher output and lower costs. We are not looking for any
considering the context. We had double-digit growth, so we
specific types of hospitals but it would have to be at least
can say that it was a good period in terms of revenue, as we
a midsized hospital as this is not the type of project that
had many orders pending from 2014/2015. In terms of new
could be implemented with a small hospital.
orders, we continued to grow but this slowed down and we ended 2016 with high-single digit growth. We gained market
Q: In February 2017 Siemens announced a US$200 million
share and we grew above the market, but it was difficult
investment for the next 10 years in Mexico. How much of
because of the peso devaluation against the US dollar and
this is going to healthcare?
public budgets being cut due to a drop in oil prices. However,
A: A small part of it will go to health. There are factories
it was stable thanks to the private market as it continued to
and development centers related to the other businesses
invest despite the fact that the public market contracted.
but it would be difficult to have local production for health. The typical example is magnetic resonance, as the annual
Q: How has rebranding as Siemens Healthineers boosted
Mexican market is probably for around 20-25 systems. This
Siemens’ image and operations? What benefits is it
is not mass production, these are high technology products
bringing to your operations and clients?
and manufacturing is concentrated in one or two places
A: The new brand is just the final stage of a bigger process
across the world. This is why healthcare will only receive
that began with the separation of the healthcare business
a small part of the US$200 million because most of it will
into an independently managed business. The second step
go to plants.
was the implementation of the new strategy. Then, a new structure, new business principles and corporate values and the introduction of the new brand came. The main benefit
Siemens Healthineers is the healthcare branch of the German
is that we have gained speed to react to client and market
electronics giant. It is mostly known for its medical devices,
needs. Siemens is huge and diversified. Total revenue
which cover a wide range of therapeutic areas, with a focus
for health is €15 billion compared to over €80 billion for
on diagnostics, imaging and IT
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VIEW FROM THE TOP
ARTICULATE GROWTH FOR MEXICO NELSON VALENZUELA LATAM and Caribbean Director of Arthrex
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Q: What is your view on selling through public tenders
Q: Which products are you bringing to Mexico?
in Mexico?
A: We do not want to deprive Mexico of innovation, so
A: Due to the market niche we work in, we are obligated
we work on a diversified portfolio for A and B markets as
to deal with huge distributors that offer integral services,
physicians move between distinct hospitals and different
which is complicated. They consolidate several brands and
reimbursement scenarios. In Mexico, the most common
sell a complete service to the hospitals of IMSS and ISSSTE,
surgeries would be shoulder instability, rotator cuff tears,
although PEMEX, SEDENA and SEMAR have remained
anterior cruciate ligaments rupture, meniscus reparation,
outside this model. Both IMSS and ISSSTE classify Arthrex’s
syndesmosis, Achilles tendon repair and internal braces for
technology as minimally invasive (MI) and 90 percent of these
ankle stability. These seven surgeries all have an A and B
MI procedures are abdominal, while 10 percent is for joints.
portfolio available in Mexico.
This turns into a fight every year as the volume reduces. Being only 10 percent of the contract, distributors do not place the
Q: Arthrex has an educational center in Florida. To what
same emphasis on arthroscopy. The ideal scenario for us
extent does the education you offer in Mexico help
would be for integral services to end or include arthroscopy in
doctors improve their skills?
orthopedic tenders. Ideally, we would provide services directly
A: In addition to the Florida Center we have one in Mexico
to government institutions but they never have the budget
and one in Brazil because we have the obligation to correctly
to buy everything.
train doctors to use our products. The courses are open to everyone, even those who do not use our products. Some
Q: What is Arthrex’s strategy to expand its reach in the
courses are available online through Arthrex’s webpage,
private market and to stand out against its competitors?
which puts over 4,000 videos online, and through our
A: We have learned we need to analyze more factors before
Surgeon’s Virtual App, which enables doctors to first
making the decision to launch a new product, to focus on
practice digitally before moving onto dry labs. In our labs we
more profound marketing studies using a sniper technique.
use imported cadaveric pieces from the US. Unfortunately, in
Globally, Arthrex has 12,000 products, of which 2,600 are
Mexico the culture of organ donation is poor and if we have
available in Mexico, which is the right number of SKUs
chance to use a Mexican cadaver, the law is clear, demanding
based on the Mexican market’s need. This has enabled us
use of the full body. Can you imagine putting a full body on
to see growth rates of 17-18 percent in the country. Another
a table just to practice on the knee?
key point is service: when we sell an anchor, we are also selling the accompanying equipment and a technician to
Q: What is the most important product you will be
help. For MX$25,000 (US$1,389) worth of sales, we have to
launching in Mexico in 2017?
move MX$600,000 (US$33,000) of equipment, products
A: Apollo, a bipolar radiofrequency for arthroscopy. It will
and personnel. We have to define our service standards
be brought to Mexico in July 2017. Arthrex has the fastest
and stick to them. We go with a full set of equipment, the
processing times of all medical device companies in Mexico
instruments are in perfect condition, the technician will be
and our products are approved within an average of 60
well-trained and we will be there for anything needed. This
days. In our 2015-2016 financial year, we registered 102
reinforces our credibility with doctors.
products. The priorities for this year will be to maintain operational excellence and for our sales team to begin identifying new opportunities and to relaunch technologies
Arthrex is a medical devices company and a leader in new
that did not have the initial impact we had hoped for. The
product development and medical education in orthopedics.
second priority will be human capital management. The
The US-based company is a pioneer in orthobiologics,
third point will be to continue our great work in compliance,
arthroplasty and in the surgical treatment of arthritis
not as an obligation but as a way of business.
SPOTLIGHT
SYNERGYRF SYSTEM WITH APOLLORF_ PROBES AND SYNERGYUHD4 SYSTEM TM
TM
TM
The First Biopolar RF System to integrate with an Arthroscopic Imaging System. The SynergyRF System with ApolloRF Probes completes the Arthrex® Synergy arthroscopy platform with an easy-to-read “heads-up display” of operational settings on the Synergy 4K monitor. The Apollo MP90 Probe with multiple suction ports is designed
123
for efficient ablation and coagulation, and has an ideal working length for shoulder, knee and hip arthroscopy.
MP90 Probe
XL90 Probe
Hook Probe
Aviso de publicidad No.17330020202C3318
INSIGHT
FLEXING MUSCLE IN MIDTIER KNEE REPLACEMENT GERMÁN GARCÍA Director General of Smith & Nephew
124
Midtier knee replacements designed with affordability and
to reduce the price,” García says. The company, which
quality in mind offer a solution for shrinking health budgets
specializes in advanced wound management, sports
in emerging countries like Mexico. Prosthesis and medical
medicine, orthopedic reconstruction and trauma, works
devices manufacturer Smith & Nephew believes the key
with both the public and private sector. In Mexico, around
clues to reducing costs can be found in the specifics of
90 percent of its medical devices go to the public sector,
the population.
its largest single purchaser in the country.
Knee replacement, a form of arthroscopy, is a common
“Innovation can drive costs down for the system. Sometimes
procedure performed daily worldwide. It is most often
an innovative product is less expensive, more efficient and
done on patients over 50 years-old, with over 90 percent
carries many benefits for patients,” García adds.
experiencing dramatic pain relief after the surgery, according to the American Academy of Orthopaedic Surgeons.
Speaking to general market trends in medical devices, García says that “the trend is to make smaller products
ANTHEM, Smith & Nephew’s artificial knee, was developed
and less invasive procedures for the faster recovery of
in emerging countries worldwide, where the population
the patient.” The materials used are also relevant. Smith
is typically shorter than Americans and Europeans. The
& Nephew has developed highly resistant plastics that are
company has also simplified the replacement process, as
lighter and less expensive than metal and can be used safely
it requires only three trays of surgical tools rather than the
for instruments and specific parts of prosthetics. A knee
seven previously required, which also reduces the overall cost.
prosthetic with these plastics can last for over 20 years. The company also develops tools to perform arthroscopy,
“This product is the combination of two innovations: it is
such as TWINFIX, used for repairing joints. “This device is
specifically designed for Latin American and Asian markets
friendly for physicians and the fixation products we use are
due to the size of the population and we have simplified
high quality,” says García.
the number of pieces required for the procedures,” says Germán García, Smith & Nephew’s Director General
Despite the government being a large client, doing business
for Mexico. “During the research phase, we began by
with it is not so easy. “We have to develop a tender for our
identifying bone characteristics of patients and then we
new products, it does not come automatically,” García says.
identified the best fit for those bones, combining the skills
“We must first present the product then talk to doctors
of researchers, physicians and marketing personnel to also
and institutions so they can develop the tender and then
reduce the number of pieces.”
we can participate.”
Smith & Nephew works in both medical devices and
Registering a new device can also be time-consuming,
arthroscopy, the latter of which represents around a third
taking as much as two years. García calls for simplification
of its yearly sales and between 30 to 45 percent of the
of the registration process because the medical devices
Mexican market, thanks to a focus on cost efficiency and
industry evolves rapidly. He also hopes for improved
innovation. The global arthroscopy market was valued at
access to medical devices in Mexico. “Half the population
US$4.0 billion in 2015, according to Grand View Research.
has Seguro Popular, which is limited because it covers only catastrophic diseases. They do not have access to
“We know that in developing countries in Latin America,
advanced medical products,” he says. But he is optimistic
Africa and Asia the public sector budget is constrained,
about growth in the country. “The medical devices market
so we try to develop products that are affordable for that
in Mexico is underdeveloped, which means there are many
sector while maintaining quality. We implement innovation
opportunities to grow.”
VIEW FROM THE TOP
OPENING THE ROAD TO A NEW HEALTHCARE SYSTEM FERNANDO OLIVEROS Vice President of Medtronic
Q: Medtronic has said the government needs to place more
patients. There are approximately 200,000 people with this
importance on the healthcare sector. What progress has
condition and only 1,300 insulin pumps users. Medtronic
been made?
is also open to sharing its global experience to quantify
A: Over the last two years, we have reached out to the
and identify uncover needs inside the institutions. We are
authorities, private companies, regulators, patients and
working to develop information that will provide real data
insurance companies to create an alliance to communicate
on the costs of diseases because providers cannot offer
a common message: there is a need for a health reform
solutions without having total knowledge about the cost
in Mexico that should focus on two areas. The first is to
of a problem. Finally, we can offer expertise in production
separate financing from service provisioning and establish
and manufacturing processes to institutions like IMSS or
a payment system that provides finance for any medical
ISSSTE thanks to our five manufacturing plants and the
service. The second change should be to open access to
13,000 employees we have in Mexico.
the healthcare system, meaning that they should be able to choose where to be treated.
Q: Does the system have access to the technology it needs to improve?
Q: What strategy could lead the system to a better use of
A: Patients in Mexico do have access to great technology.
healthcare resources?
There are patients who can get an artificial pancreas
A: We are one of the leading companies open to the creation
at a clinic with integral services, but the majority of
of a new health financing system in which the risks are
the population has no access or very limited access to
shared between providers and clients. As providers, we are
basic health services. The responsibility for companies
looking to work with the client to share risk by establishing
like Medtronic is also to make technology available for
strategies such as performance-based payments. Under
everyone. Lagging behind on technology implies a higher
such schemes, the customer will only pay if the product
cost for the system and for patients. As an example, we
achieves the desired performance or results.
have remote monitoring of heart rates that could allow 80 percent of patients to stay at home instead of going to a
Q: What has been the governmentâ&#x20AC;&#x2122;s response to these
hospital. However, the level of knowledge of doctors and
alternative strategies?
patients to use the equipment and the service model are
A: It has been very good, but it is a challenge to make
not connected.
it a reality because private companies are changing from being providers to becoming partners. We are finding
Q: What actions is Medtronic taking to open access to
many barriers. The regulatory bodies are very price-based
healthcare?
and they are close-minded to ideas like payment for
A: For us, access has four definitions: education and
performance. Inertia has ruled the system for a long time
training of human resources, doctors and nurses; available
and it is very hard to change that. Lack of transparency is
and useful infrastructure; promote financing and establish
also a major problem that prevents us from moving forward.
efficient service models. In education, we are working on projects to better introduce technology to doctors,
Q: What is Medtronicâ&#x20AC;&#x2122;s value proposition to ensure the
especially in cardiovascular health, diabetes and obesity.
productivity and effectiveness that health institutions require? A: In terms of portfolio, Medtronic is the largest medical
Medtronic is a global technology company. It is a leader in
devices company in the world. We provide integral
the development of medical devices focused on solutions for
solutions for Mexicoâ&#x20AC;&#x2122;s main health concerns. We are
diabetes, cardiovascular health and obesity. It has been in Mexico
the unique provider in Mexico of insulin bombs for T1D
for more than 40 years and it is present in more than 140 countries
125
INFOGRAPHIC
THE MEDICAL DEVICES SEGMENT IN MEXICO A growing list of international companies have
higher life expectancy, patients with critical illness, an aging
invested US$1.94 billion (from 2005 to 2015) to
population and increasing home-based assistance will boost
take advantage of the country’s human capital,
new products and services
low operating costs and strategic location.
It took only 12 years for Mexico to become a major cluster in
Medical devices come in all shapes, sizes and levels of
medical devices manufacturering, achieving solid participation
sophistication. The growth of the sector shows no sign of
in the global industry and a solid growth perspective.
slowing down.
AT A GLANCE (US$ billions)
TOP INVESTORS
$8.41 $3.96 156,831 $1.94 Exports
Imports
FDI (2005-2015)
Jobs
US Italy
TOP INVESTORS
Over 30
Over 75
Over 7,100
Over 1,400
Production
Medical
Sanitary
Products released
plants
specialties
registrations
(2013-2018)
86% US 6% Italy 5% Germany
DRIVEN BY TIJUANA
COMPETITIVE ADVANTAGES • Top exporter in LATAM • Eighth exporter worldwide • Low production costs • Qualified talent • Export platform • Special federal programs • Next to the world’s top producer
70%
Only 30km away from San Diego,
of firms based in Tijuana/ Tecate are from the US
Tijuana’s medical devices hub impacts both Baja California's GDP and the US market (the biggest with a global 38% market share).
EXPORTATION OF MEDICAL DEVICES BY STATE (US$ billions) 2.5
79
36
2 39
1.5
Number of companies 44
41
5
8 Queretaro
195
Yucatan
35
State of Mexico
18
0.5
Jalisco
1
Sources: ProMéxico, El Economista
Mexico City
Nuevo Leon
Sonora
Tamaulipas
Chihuahua
0 Baja California
126
Medical-device manufacturers have reason to be positive. A
Mexico’s relevance for the US industry: Over
$US7.7 billion per year in sales from Mexico
Germany
MEXICAN MARKETDEVICES (US$ billions) MEXICANMEDICAL MARKETDEVICE OF MEDICAL
Exports Export
Imports
2011
2012
2013
3.96
6.34
6.07
2010
4.44
3.95 3.74
2009
3.47
2.48
2008
3.41
3.15
3.04
3.18
2.44
2007
1
3.01
3.03
2.18
2.37
2
0
2.64
2.61
2.78
3
5.13
4.56
4
5.06
5
5.79
6
6.88
7
7.69
8
8.40
9
2014
2015
——Trade balance 127
Import TOP 20 COUNTRIES FOR MEDICAL DEVICE IMPORTS AND EXPORTS (US$ billions) 0
10
US Germany Netherlands China Belgium Ireland Switzerland Mexico France Japan UK Singapore Italy South Korea Denmark Costa Rica Austria Australia Hong Kong Malaysia
20
Export
30
40
50 US Germany Netherlands China Belgium Japan France UK Italy Canada Australia Switzerland Spain Mexico Singapore South Korea Russia Brazil India Austria
Import
EXPORTS: MEXICO'S GLOBAL RANKING
3rd 4th
Tubular suture needles
Instruments and devices for medicine, surgery, dental and veterinary / furniture for medicine, surgery, dental and veterinary / syringes, catheters, cannula and similar products
50
40
MAIN COMPANIES WORLDWIDE*
30
20
10
AMID’S AGENDA
PROJECTED GLOBAL GROWTH
Johnson & Johnson
27.50
AMID is the sector’s top association of
GE Healthcare
18.29
companies; it has 30 Mexican and global firms
Medtronic
17.00
as members.
Baxter International
16.67
• For the health sector: simplify access to
Siemens Healthcare
15.77
Philips Healthcare
11.17
innovative technologies. and improve transparency in acquisitions.
11.00
• For economic promotion: build public
Covidien
10.66
policies to boost competitiveness and
Abbott Labs
10.11
Stryker
9.66
US$663 billion in 2015
• For tax authorities: encourage investment
Cardinal Health
0
US$894 billion expected for 2020
exports.
*Sales FY2014. Figures in US$ billions
MEDICAL DEVICE PRODUCTION BY COUNTRY
US
Swiss
China
Japan
38.2% US 22.1% China 6.5% Germany 4.2% Switzerland 4% Japan 25% Other
MEDICAL DEVICE PRODUCTION BY REGION
41.0% North America 30.9% Asia Pacific 19.2% Europe 1% South/Central America
7.9% Other
North America
other
Asia Pacific
South/Central America
VIEW FROM THE TOP
COMMITTED TO THE FUTURE OF HEALTH CARLOS JIMÉNEZ Director General of B. Braun Aesculap
128
Q: What were B. Braun’s growth numbers in 2016 and what
smaller particles. The speed of flow can be modified to
challenges did it overcome?
better respond to patient needs. This is an easier therapy
A: We grew 25 percent in 2016 between the two divisions,
for patients than hemodialysis and the results are better.
while Aesculap alone grew by over 30 percent. This
This technique could help around 65,000 people in Mexico
growth was achieved despite the government’s budget
that are being treated with hemodialysis. However, there
cuts and new purchasing habits. We participate in few
are between 80,000 and 100,000 more people that are
categories in the public tenders as the National Formulary
undergoing peritoneal dialysis.
is increasingly targeting generalized products, which hurts us. Sometimes, products with current technology and
Although the associated costs are higher because more
quality compete against products with old technology
advanced equipment is required, at the moment neither
that are cheaper to produce, which limits our chance of
insurers nor the public sector recognize a distinction
successful participation in certain areas. Of the 600 or so
between hemodialysis and hemodiafiltration, so hospitals
categories in medical devices, we participate in only seven.
are bearing the extra costs themselves and to provide
It is not that all our products are state-of-the-art, but a
better care to patients. It is covered separately for patients
10-15 year-old product is also at a disadvantage because
in private care because the supplies are billed separately.
the required specifications for the product may be 30-40
Six clinics are now using hemodiafiltration equipment. We
years old. I do not believe this will change anytime soon
do not sell the equipment but loan it as the machine is
because the public sector is working on a reduced budget.
much more expensive than hemodialysis technology.
There are between 80,000 and 100,000 people in Mexico that are undergoing peritoneal dialysis
Q: What are the main surgical trends permeating Mexico’s operating rooms? A: There is a strong focus on integral services and on costreduction in public centers. Previously, criteria stated that to offer integral services, one had to provide equipment of a certain technological level and age but these specifications have been removed to reduce costs. Now, devices can be reused but the regulation does not specify how to reprocess certain pieces, such as disposable devices. We are still waiting on standards: how to wash them, for how long, with
Q: What impact do you expect hemodiafiltration will
which substance and which chemicals and how to perform
have in Mexico? How does it differ in performance from
functionality controls. This has led to uncertainty regarding
hemodialysis?
cost. For example, if a service costs MX$100 million (US$5.5
A: Hemodiafiltration – a technology that combines
million) one year and MX$80 million (US$4.4 million) the
hemodialysis and hemofiltration – was launched here at
next, ostensibly that means MX$20 million (US$1.1 million) in
the end of 2016. Compared with hemodialysis, the machine
savings. But if products are reprocessed, the internal costs
purifies the blood of urinary toxins and also filters out
generated to do so should be taken into account. We do not know what the true savings are.
B. Braun is 178-year-old German medical devices giant. It
As for the private sector, insurers are putting pressure
operates in four main areas: hospital care, out-patient, aesculap
on hospitals to not pay high increases in the cost of
and atvium, which are concentrated in two divisions in Mexico.
medical care. Hospitals are allowing for increases of 3-4
Medical encompasses the first two, Aesculap the latter two
percent due to inflation but most products are imported
in US dollars or in euros. The increase in prices hospitals negotiated with insurers was a maximum 8 percent, so we are reaching a point where they cannot absorb these costs. Possible solutions might be found by having more efficient processes and through innovations, products and patient treatments. Q: Innovation has always been at the forefront of B. Braunâ&#x20AC;&#x2122;s operations. What is next for the company? A: We have many product lines to launch, including a prosthetic that helps maintain bone structure. It will be available in 2017 and will enter the National Formulary so that public patients can have access. We will also launch products intended for intensive care. Our technology of continual therapy is connected to a patient for a few days to slowly clean the blood and requires little effort from the patient. This was a key theme in the World Nephrology Conference, held in Mexico City in April 2017. We are also building an auditorium for the Aesculp Academy and B. Braun will participate in over 40 congresses in 2017, demonstrating our commitment to the industry. Q: How do solutions such as B. Braun Knowledge Center and the Academy help you manage a more successful business? A: The Aesculap Academy is a foundation that was created 20 years ago and is independent of B. Braun. The concept is to bring health professionals, specialized education and knowledge to execute patient treatment in a safer manner and to achieve better patient outcomes. B. Braun supports the Academy through donations. The Academy has a grant system and offers paying courses, which helps it maintain its autonomy. B. Braun started the Academy but now it has other partners such as the Mexican Academy of Surgery, which has developed programs with the Aesculap Academy. The Knowledge Center responds to a need to better train our staff members in understanding processes, knowing products and learning about authorization processes. This is the basic platform for teaching B. Braun employees how to work well in the company. Q: To what extent are you impacted by COFEPRIS deregulation of medical devices? A: It is vital that deregulation happens, because it makes no sense that a medical spatula used to hold down a tongue has such high registration requisites. Technically, it is not dangerous in use nor complicated to manufacture. Deregulation is needed for these types of products. However, B. Braun would see no benefit from such deregulation because our product portfolio is much more precise and more impactful on patients. We do not manufacture a single product on COFEPRISâ&#x20AC;&#x2122; huge list of deregulated products.
129
INSIGHT
MEXICAN HEALTHCARE INCHES INTO THE DIGITAL FUTURE ULISES BACILIO CEO of Grupo PTM
130
Digitalization is making its way across every sector of
are afraid they will not be able to see the image in as much
the health industry. In addition to being environmentally
detail. “They are a dogmatic profession; they are not used
friendly, these solutions save costs and are practical, says
to changing their ways. This is true worldwide, not only in
Ulises Bacilio, CEO of Grupo PTM adding the biggest
Mexico.” The X-card is in use in four hospitals in Mexico:
obstacle is not patients. “Doctors are the greatest resistance
two in Toluca, one in Puebla and one in Cuautla. “Millions
we face,” he says.
of radiographic sheets are still used every year in Mexico. ISSSTE alone spends MX$30 million (US$1.7 million) per
Working in conjunction with global medical imaging giant
year on these sheets,” Bacilio says, adding that eliminating
Phillips, Grupo PTM, a leader in technology solutions for
the radiographic sheet has been the company’s motto and
hospitals, provides interpretations of radiographs that are
mission from the beginning.
delivered digitally in a matter of days. That compares with the months it previously took to get an interpretation to
The company has also digitalized its internal processes,
a patient, especially those in remote areas. The company
shortening its operating cycle by asking for immediate
also provides cloud storage for the interpreted radiographs.
payment and resolving cash flow issues. This has allowed
The X-card, its key product, allows patients to have their
PTM to further invest in its technology and to provide
medical history and images on hand at any point in time,
its customers and ultimately patients with newer, better
no matter where they are in the world.
products and services. PwC predicts the global value of connected health to reach US$61 billion by 2020.
PTM technology has diagnosed over 100,000 mammograms and 7,000 cancers
Another product on offer is the Invox, a voice recorder designed especially for medical professionals that speak Mexican Spanish. It uses linguistic analysis to automatically register keywords and categorize the recording, allowing users to easily search through voice albums at a later date and retrieve data. “We provide updates to the software almost every month, constantly improving the product,” says Bacilio, who believes that digitalization will also allow companies and public-sector institutions to begin
The patented invention consists of a credit card-sized
collecting data on the services they offer and that they
plastic card that bears a unique code. The patient can scan
will be able to analyze it and put it to good use, to better
this code or enter it into the Grupo PTM website to instantly
serve patient needs.
access their medical images and share them with their specialist of choice. In addition to being environmentally
Grupo PTM works with over 400 clients in every Mexican
friendly, these solutions save costs and are practical. “A
state, ranging from small clinics to large hospitals. As of
patient can load all his studies onto the card and it can
December 2016, over 100,000 mammograms and 7,000
be read with a simple QR scanner on a cellphone,” says
cancers had been diagnosed through PTM’s technology. The
Ulises Bacilio, CEO of Grupo PTM. If a patient loses the card,
volume of clients it works with has allowed the company to
he only needs to inform the company, which cancels the
begin compiling statistics. “The data we collect could be
code and reissues a new card and code. Despite the many
useful for clinical research. For example, there are many
benefits, implementing digital solutions is not always easy.
gastrointestinal cancers, in particular in Hidalgo,” says
“Patients rapidly accept innovations such as the X-card.
Bacilio. “We also realized that Tuesday is the busiest day
They find it amazing,” says Bacilio, explaining that doctors
of the week for medical appointments in Mexico.”
VIEW FROM THE TOP
CASTING A 3-D APPROACH ZAID BADWAN Director General of MediPrint
Q: What are the benefits of creating new products in
that market will be in healthcare. This makes sense to me
Mexico and how open is the country to innovation?
because although there are applications for the automotive
A: Mexico is an interesting market. It is a country with a
and aerospace sectors, they usually work B2B. None of
large population with different problems, so there are
them are B2C. Health is probably the only market that
plenty of fields in which we can innovate. The creation of
requires printing to be B2C, which is why it will grow a
innovative products should be aligned with national needs.
lot. Also, we have made many improvements. We can print
But it is important to understand that the distribution chain
hydroxyapatite, the material that makes up between 50
for the healthcare sector is different in Mexico than in other
and 60 percent of human bones. If we print this material
countries. The government, the private sector, integrators
and implant it into a person using stem cells, the body will
and distributors interact based on different interests. Also,
react to its foreign shape as if it were made of bone cells
there is a strong regulatory environment here and if you are
and real bone will form around it. This is something that
a startup, raising resources for a product you are not yet
could be possible in the next few years. The problem is
selling can be complicated because it needs to be certified.
that certification for something of this kind is extremely
One of the advantages in starting with innovative products
complicated. It requires a cleanroom that costs millions
is the possibility of being recognized in other ways, such
of pesos. It is complicated for startups to fund elements
as through published papers or giving keynote speeches
such as cleanrooms and big companies do not do it yet
in hospitals and medical congresses. Entrepreneurs can be
because they are not sure about entering this B2C 3D
recognized through competitions. We have won some in
printing market. It is complicated but I think it will happen.
Mexico and Europe and that was our main source of funding in the beginning. We also received some government aid
Q: How is the 3D printing industry regulated in Mexico?
and now we are closing our first round of investment. Most
A: There is no effective regulation for 3D printing around
of our money goes to R&D and the government helped
the world. The FDA has just started thinking about
us through programs offered by the National Institute of
regulating it differently from other devices but technology
Entrepreneurship (INADEM).
will always advance faster than regulation. 3D printing can make almost anything but you need to regulate every
Q: How much is 3D printing used in healthcare and what
product that comes out of the printer. If the product is
are the technologyâ&#x20AC;&#x2122;s main advantages?
sufficiently different from another, there must be another
A: In Mexico not very much. Aside from MediPrint, I have
piece of regulation. That is why people are only producing
only seen some instances in which disabled people are
one product and why regulating institutions such as the
given or sold prosthetics that have no regulatory approval.
FDA are thinking of implementing a special scheme. It is
That is illegal but there is a need that has to be satisfied,
complicated though. How will you know that someone
which wasnâ&#x20AC;&#x2122;t happening at an adequate market price point.
printing casts but who also wants to do brackets will do
Besides that, 3D printing is not something broadly used yet.
them correctly? That is why I think regulation is there for a
This technology is available and used around the world but
reason, to protect people. So far in Mexico we do not have
not as much as it should be. 3D printing has been around for
a specific regulation or norm for 3D printing and we have
30 years but many patents held by big companies expired
to comply with the general norms regulating casts.
just a few years ago. Q: What are the potential healthcare uses of this
Mediprint is a Mexican start-up dedicated to the research,
technology?
development and creation of personalized medical solutions
A: McKinsey says the 3D printing market will reach around
using 3-D scanning, modelling and printing technology. Their
â&#x201A;Ź500 billion by 2020. Deloitte has said that 60 percent of
product ambitiously aims to replace the traditional plaster cast
131
Magnetic resonance
BIG DATA & HEALTH APPS
6
Technology is developed with the objective of making lives easier and better lived. This has specific potential in healthcare, in which technology has become an opportunity to save lives and optimize patient comfort. The need to become more efficient in patient care and to manage the large amount of data generated has made the adoption of technology necessary to automate processes and highly standardized and repetitive tasks. Recording patient data has become a priority in itself to guarantee the existence of a broad database to offer the best treatment and follow-up for patients, but this also represents a security challenge. The digital world has been rocked by several high-profile international breaches and healthcare institutions and companies must ensure the confidentiality and protection of the data they collect to earn patient trust. The effectiveness of Big Data is a result of its veracity, velocity, variety and volume. This information will help guide doctors and policymakers on the efficiency of medicine and research, among other trends.
This chapter will give an overview of the companies that deal in Big Data and digital applications for smartphones that have a health focus. In addition, those designing wearable health technology will shed light on the impact they have had on the Mexican market and mindset.
133
CHAPTER 6: BIG DATA & HEALTH APPS 136
ANALYSIS: Digitalization Advances But Pace Remains Uneven
138
VIEW FROM THE TOP: Xavier Valdez, QuintilesIMS
139
INSIGHT: Antonio Carrasco, Grupo PLM
140
VIEW FROM THE TOP: Guillermo Ferrari, Eseotres
142
VIEW FROM THE TOP: Guillaume Corpart, GHI
143
VIEW FROM THE TOP: Enrique Martínez, IIIFAC
José Ferreyra, IIIFAC
144
VIEW FROM THE TOP: Alejandro de la Parra, Astrum Salud
146
VIEW FROM THE TOP: Santiago Ocejo, Salud Cercana
148
VIEW FROM THE TOP: Mario Amadio, GE Healthcare
149
INSIGHT: Maciek Drejak, Northcube
150
VIEW FROM THE TOP: Benjamín Villaseñor, Uhma Salud
Roberto González, Uhma Salud
151
VIEW FROM THE TOP: Melanie Chase, Fitbit
152
INSIGHT: Javier Cardona, 1DOC3
153
VIEW FROM THE TOP: Federico Casas-Alatriste, T-Systems
154
INSIGHT: Julián Ríos, Higia Technologies
155
VIEW FROM THE TOP: Xavier Ordoñez , Deloitte
Horacio Peña, Deloitte
135
ANALYSIS
DIGITALIZATION ADVANCES BUT PACE REMAINS UNEVEN Digitalization is key to ensuring access to healthcare. Industry
approach. According to Guillermo Ferrari,
players and public organisms must overcome technological
General Manager of Eseotres, which provides
barriers to make the most of the possibilities offered by Big
digital-imaging solutions, IMSS carries out
Data for better management of institutions and patient health
between 19 and 20 million image studies every year, using 1.5 million square meters of
136
Well-designed and effectively used information
Eseotres’ analog film. “The vast majority of imaging studies
infrastructure has the potential to become the lynchpin
done by public health institutions is archived in boxes.
of quality for successful healthcare systems globally,
Through digitalization, the studies’ archives can be easily
according to the OECD. However, the industry lags
retrieved and shared and become a source of Big Data
other sectors in adopting the tools that could elevate its
to develop useful information for the creation of health
management and delivery of care. In Mexico, where budget
policies, efficient resource allocation and productivity
cuts to the public health system have hampered spending,
measurement,” says Ferrari.
it is critical that Big Data and high-tech solutions begin playing a greater role in the sector.
EMPOWER PEOPLE Gathering the data is only the first step and making it
The OECD report, Mexico’s Health System Review 2016,
available and shared is among the top challenges Mexico’s
highlights some of the core uses of well-managed health
public healthcare institutions have faced. Technology
data: evaluation, monitoring, personalization of care,
companies recognize this and are creating solutions.
ensuring of continuity, support provision, purchase and
Five years ago, IMSS would have more than two medical
prediction of care needs. Consulting firm Deloitte says
records for patients who had visited different institutions.
connected health or technology-enabled care (TEC),
This increased the out-of-pocket expenditure whenever a
which refers to the merging of health technology, digital
patient had to re-take a test or analysis. Businesses like
media and mobile devices, is capable of providing cost-
GE Healthcare have worked to develop common systems
effective alternatives at a time of increasing demand in
of shared information. For example, GE Health Cloud is a
health and social care.
product designed by GE Healthcare to integrate clinical workflows while managing the volume, velocity and variety
Unfortunately, the health industry is behind other
of healthcare data. According to Mario Amadio, President
sectors in terms of digitalization, not just in Mexico but
and CEO of GE Healthcare Mexico, “the cloud will be
internationally. Research from the McKinsey Global Institute
capable of connecting to more than 500,000 GE medical
(MGI) looked at digitalization in different economic sectors
imaging machines and more than 1.5 million imaging
in the US. The results showed the workforce of companies
machines worldwide, linking to millions of other healthcare
in leading sectors are 13 times more digital than the rest
devices, including patient monitoring, diagnostics,
of the economy. An article written by McKinsey partners
anesthesia delivery, ultrasound, mammography and various
and published in the Harvard Business Review in 2016
data sources. The future is not about having an application
pointed to the disparity between the sophisticated use
in a machine, it is about getting the information produced
of high-tech in specialized health areas and the lack of
by the machine in a cloud and working with it.”
digital fluency in others: “Many healthcare organizations use incredibly sophisticated technology in diagnostics and
The public sector is also making progress. In October 2016,
treatment but substantial parts of their workforce use only
Mikel Arriola, Director General of IMSS, and Ángel Gurria,
rudimentary or no technology. Fewer than 20 percent of
the Secretary General of the OECD, signed a cooperation
payments to healthcare providers and their suppliers are
agreement to apply a digitalization and simplification
done digitally, for example.”
program for the institution´s procedures. Early in 2017, Mikel Arriola announced during a press conference that
In the case of Mexico, it has been almost 15 years since
IMSS has saved MX$5.5 billion (US$305 million) through
the implementation of NOM - 024, which requested the
the digitalization of 78 percent of its procedures. Processes
application of electronic medical record systems in health
that before took 40 days, now take three.
services providers. A decade and a half later, the pace of digitalization at healthcare institutions remains uneven. The
Patients themselves have a role to play by adopting the
OECD discovered that data is generated only at various
solutions digitalization offers, such as apps, to take control
points in the Mexican system, creating a fragmented
of their health. IMSS’ success is in part thanks to the design
of a mobile and web application available to patients,
Given these trends, many entrepreneurs have focused on
but awareness and knowledge are essential – and
the development of apps that promote preventive care
unfortunately, lacking. The Health Future Index developed
and empower healthy lifestyles through fitness control,
by the global technology company Philips evaluates
fertility follow-up and sleep tracking. That is the case
how well companies and governments are overcoming
of Salud Cercana, a Mexican digital service providing a
health challenges through connective technologies.
platform focused on the management of patients with
The study discovered there is a clear need to empower
chronic diseases to reduce costs. “Ninety percent of the
the population so they can play an active role in the
population has access to public health but 50 percent of
management of their health. It was conducted through
expenditure in Mexico is out-of-pocket. […] Our long-term
interviews and surveys with healthcare professionals,
goal is to achieve an integrated healthcare sector and
insurers and members of the public to evaluate how
we want to be the platform from which we can manage
connectivity is oriented toward access to healthcare,
patient health and integrate services around them,” says
integration of health systems and adoption of oriented-
Santiago Ocejo, Director General of Salud Cercana.
care technology. The data collected by Philips shows that 24 percent of the population feels no ownership at all
SUPPORT FROM AI
over their medical records and 23 percent of the users
Many entrepreneurs and medical devices companies
of connected health technology do not know how to
also have jumped on the artificial intelligence (AI)
interpret the results delivered by the technology.
bandwagon, which through the gathering of Big Data can assist professionals and patients with decision-making.
STARTUP OPPORTUNITIES
One example is 1DOC3, an online platform that provides
According to Deloitte, mobile technology can empower
answers to health-related inquiries for users. According
patients by giving them more control over their health
to Javier Cardona, Co-Founder and Director General
and making them less dependent on HCPs for health
of 1DOC3, through a series of algorithms, inquiries are
information. Deloitte’s data show that the number of health
processed in fractions of seconds. Typed questions are
apps for iOS and Android in the world has doubled in the
compared by the AI with previous inquiries. If a match is
last two years to almost 100,000. The opportunities in the
found, the user is directed toward that answer. “Ninety-
sector have empowered startup companies attracted by the
nine percent of inquiries match previous answers,” says
possibilities of technology in changing health management
Cardona. Another is Higia Technologies, an AI startup,
for a population of 121 million. “The startup healthcare sector
created a high-tech bra that helps detect cancer through
is very active for innovation in biotechnology, strategies
bio-patches that capture temperature data that is sent
for healthcare access and home monitoring,” says Vincent
to a mobile app, which keeps a record of the information
Speranza, Managing Director of Endeavor Mexico.
received.
DIGITAL INNOVATIONS TO ACHIEVE MORE FOR LESS IN HEALTHCARE 3D-printed devices
To create highly customized, low-cost medical technology products that can be tailored to suit the physiological needs of individual patients.
Artificial intelligence (AI)
AI, the ability of computers to think like humans, is anticipated to transform health care by completing tasks currently performed by humans with greater speed and accuracy, and using fewer resources.
Virtual reality (VR)
Virtual reality can engage patients in low-risk, artificially generated sensory experiences that could accelerate behavior change in a way that is safer, more convenient, and more accessible to the consumer.
Leveraging social media to improve patient experience
Social media offers health care organizations a potentially rich source of data to efficiently track consumer experiences and population health trends in real time, much more efficiently than current approaches. Organizations have the ability to track consumer experience and population health trends in real time.
Biosensors and trackers
Biosensors included in rapidly shrinking wearables and medical devices allow consumers and clinicians to monitor and track more aspects of patients’ health, enabling earlier intervention— and even prevention—in a way that is much less intrusive to patients’ lives.
Telehealth
Telehealth offers a more convenient way for consumers to access care while potentially reducing office visits and travel time. This convenient care model has the potential to increase self-care and prevent complications and ER visits.
Source: Top 10 Healthcare Innovations: Achieving More For Less, Deloitte Center for Health Solutions, 2016
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VIEW FROM THE TOP
EASING ACCESS TO INFORMATION XAVIER VALDEZ Director General of QuintilesIMS
138
Q: Last year, IMS Health merged with Quintiles to become
manufactures and the benefit and cost to the customer. We
QuintilesIMS. What are the resulting benefits and what new
also analyze the product portfolio strategy to understand
services have been integrated into your portfolio?
where the laboratory should filter its resources to achieve
A: We inherited clinical research services from Quintiles and
a better market result. In addition, we customize research
today we can offer its clinical studies portfolio for phases II
to understand why doctors prescribe a specific drug.
and III and our own for phase IV on observational studies. Thanks to the merger, we have a stronger capacity to offer
Q: What new product launches is the company planning
follow-up services when launching a product. Of course, we
for 2017?
are still in the process of completing the merger.
A: We are launching the Prescription Based Service (PBS), a database of over 45 million prescriptions built by pharmacy
Q: What role does Mexico play in QuintilesIMSâ&#x20AC;&#x2122; global
chains, our commercial partners. With this system, our
strategy?
laboratory clients can see how they are positioned with
A: The country has the potential to become a pioneer for
doctors, based on the prescriptions those doctors write.
clinical research and for launching new products. The world
They can also see what a doctor prescribes and what each
invests around US$162 billion, Latin America captures
doctor uses for certain diseases. We are also interested in
US$6-8 billion in clinical research and Mexico could attract
developing a platform to provide doctors with information
a bigger slice of that pie. The goal is to make this innovation
and we want to do observational studies to see what
available to the medical community by integrating it into
happens with patients after drugs go to market.
institutional purchasing. IMS Health also bought a company that provides certifications Q: Which of your areas of operation attract the most focus:
for clinical and patient services in hospitals. The company
information, technology or consulting?
uses a series of indicators to evaluate the different services
A: Before QuintilesIMS, IMS Health participated in the
a hospital offers and the institution receives feedback
information segment and later it developed additional
showing where it must improve. We are planning to extend
businesses, with a consultancy department, technology
the operations of this new company to Mexico and offer the
and design. With all the recent possibilities in information
certification. It will help patients rate hospitals, allow insurance
management, the next step is to take advantage of the
companies to be aware of who they are working with and give
technology tools that allow us to do analysis and answer
hospitals information on areas for improvement. We are also
more questions about the effectiveness of treatments,
working with COFEPRIS to develop a platform where doctors
disease management and the efficiency of sales force
can receive embargoed news releases.
resources. Q: Digital health trends include digital interventions, data Q: How does QuintilesIMS approach its solutions to offer
integration and analytics and behavioral health. What are
added value for its clients?
the key innovations in Mexico?
A: Almost all our projects are tailor-made. We analyze the
A: In Mexico, we are talking a lot about Big Data. However, we
efficacy and efficiency of the products each laboratory
are still in the early stages because to make Big Data work we need solid information, visualization and capture systems. In Mexico, some hospitals should have a system to manage
company
information on chronic diseases that can feed indicators that
offering intelligence solutions for clinical research and
track the evolution of these conditions. It is important to
commercialization services to help companies reach the
establish the foundation that will keep the system fed. If we
market in a faster and more cost-effective way
do not have that ready, we could fall behind other countries.
QuintilesIMS
is
an
American
multinational
INSIGHT
SPECIFIC INFORMATION UNVEILS GENERAL TRENDS ANTONIO CARRASCO CEO of Grupo PLM
No one can predict the future but Big Data provides
hike of 1,113 percent in searches for Tamiflu in February 2016 in
professionals with the kind of specific information needed
comparison with the previous month. “We knew there was an
to make fairly accurate projections. In the healthcare sector,
epidemic because general doctors were desperately looking
Big Data can help detect dangerous trends and provide the
for Tamiflu. Normally, this trend should be relatively steady but
necessary knowledge to allow for decisive action that could
the spike in searches was due to thousands and thousands
save lives. How effective it is relies on the velocity, volume,
of patients coming down with the flu,” says Carrasco, adding
variety and veracity of the information collected.
that in 2016, there was a scarcity of Tamiflu. “It was sold out in all drug stores in Mexico because they were not expecting
“Big Data is mobile, analytics, cloud computing and social
an epidemic. The increase in searches for the drug was
networks,” says Antonio Carrasco, CEO of Grupo PLM,
atypical.” Carrasco adds that H1N1 was responsible for over
which specializes in Big Data for the healthcare sector
6,000 deaths in Mexico in early 2016. Sharing such data
in 13 Latin American countries.
could improve the detection of trends and ultimately improve healthcare for patients. It would also enable companies to
The company, which started 75 years ago as an editorial
improve treatment and their cost-efficiency.
house for the medical segment, collects medicinal information from manufacturers and publishes the data on its website, which visitors can search. In 2016, over 100 million health professionals clicked on Grupo PLM’s Mexico website, Carrasco says. The site can handle over 2,500 searches per second and receives a variety of information over its 35 digital channels. “When talking about Big Data, it is necessary to include most users in the sector, which is what PLM does. We have over
Grupo PLM noticed a hike of 1,113 percent in searches for Tamiflu in February 2016 compared to January
200,000 physicians working with our information on a daily basis,” says Carrasco. The sheer number of doctors searching
Big Data helped identify the epidemic and action was
the site’s resources gives the company ample data to analyze
taken, Carrasco says. The patent for Tamiflu was expired
and detect trends. “We are like a small Google because people
by COFEPRIS in March 2016, leaving the way open for
search for very specific medical information through us.”
other companies to use the medicine’s active substance, oseltamivir phosphate, to create generic versions of
PLM is also working with artificial intelligence or semantic
the drug. In addition, the Mexican Ministry of Health ran
analytics. “We teach IBM’s Watson to understand what
preventive campaigns throughout the country in winter
is written on paper. This is semantic analytics. Artificial
2016 to remind people to get their flu shot.
Intelligence (AI) can begin reading a page and give you the remaining information,” says Carrasco. Among its applications,
The flu is not the only trend Big Data can reveal. Carrasco
AI can recommend a dosage, inform a doctor if the prescribed
says PLM’s data has uncovered a number of surprising
drugs will interact with each other or if there is a certain type
results. One example illustrates his point: the majority
of food or environmental element the medicines will react to.
of specialists searching for erectile dysfunction drugs are gynecologists. “Erectile dysfunction is a couple
By detecting trends, Big Data can be used to improve
problem, not a man problem,” Carrasco says. “That is
healthcare. Carrasco points to the 2017 flu H1N1 season as an
the advantage of Big Data: discovering something you
example. During the 2016 flu season, Grupo PLM noticed a
never would have thought of.”
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VIEW FROM THE TOP
DIGITALIZING THE FUTURE GUILLERMO FERRARI General Manager of Eseotres
140
Q: What process does a clinic undergo once it hires your
can be of two months or more; digitalization can reduce
digitalization services?
that. This allows other savings, such as with fees related to
A: The success of these kinds of solutions relies on how
incapacitations, which can be lowered as a result of having a
well they are designed according to each customer’s
patient diagnosed more quickly. A timely diagnosis can save
specifications. There are many variables to take into account
lives. Doctors can see more details on digital images, zoom
that will define the optimum design: the existing medical-
in, analoguely track changes, change contrast, brightness
imaging equipment, its operating status, a hospital’s
and carry out a faster and more precise diagnosis. If needed,
infrastructure, human resources, current volume of studies
a doctor can ask for a second opinion from a colleague
per type and its growth projection. We begin by sending
who can access the image remotely, avoiding the need to
an engineer to do a survey of the situation and assess what
transfer patients between hospitals.
growth may look like for the following one to two years in terms of demand, new equipment, specialties and new
Q: What is the next step to expand healthcare digitalization
health units. This will determine the type of hardware, its
in Mexico and what role does Eseotres want to play in this
capacity, infrastructure adjustments, software and tools that
process?
will better suit today’s needs and those in the medium term.
A: Image digitalization opportunities are infinite and
Part of our added-value is the ability of our engineers to
we have seen this on our mobile devices. Soon, our
design a custom-made solution ready to scale up to the
medical history will be on the cloud. What will change is
client’s future plans. Another differentiation factor we offer
the selection criteria of patients because we will prefer
is service. We train all a customer’s staff that will operate
institutions that can upload our clinical information to a
or interact with the solution. We continue to provide
shared platform. For these solutions to be as effective
training over the term of the contract to compensate for
as possible, these platforms should be cross-institutional,
employee rotation and natural knowledge loss and we focus
private or public, and cross-manufacturers. Eseotres
on preventive maintenance to anticipate system failures,
wants to be the platform where these changes happen.
new needs and to avoid operating downtimes. This is also
We want to develop a cloud without institutional, brand or
empowered by our expertise, which is our biggest strength.
manufacturer barriers. The vast majority of imaging studies done by public health institutions is archived in boxes.
Q: What can digitalization mean for a company in terms
Through digitalization, the studies’ archives can be easily
of savings?
retrieved and shared and become a source of Big Data
A: When technicians take an image with analog film, they
to develop useful information for the creation of health
check the image’s clarity with a radiologist and decide if
policies, efficient resource allocation and productivity
the image should be retaken. Twenty-five percent of analog
measurement. Public health institutions are doing what
studies have to be repeated, which means that patients
they can but it is important that we as business do our
have to be irradiated twice, 25 percent of films are wasted
part to facilitate the adoption of these solutions. It is unreal
and the x-ray tube is used 25 percent more. Appointment
to think that one company can satisfy the entire public
deferrals for image studies are another big problem of
demand alone and the same goes for other public health
analog technology because in some cases these deferrals
institutions; this is why the technical standardization of these solutions is a priority. We need to make sure that any solution that we install anywhere in Mexico can connect
Eseotres
is
an
engineering
company
that
provides
to any other solution in the market.
diagnostics solutions. It is a former x-ray film provider now focused on providing services for the digitalization of x-rays
Q: You are a former Walt Disney Home Entertainment
in medical institutions
executive. How do you apply that expertise to healthcare?
A: The shift from home entertainment media to medical
their own budget and government. We have applied our
imaging was drastic. However, sometimes there are
solutions in 19 hospitals in San Luis Potosi and 29 in State
similarities within seemingly very different industries.
of Mexico, where we want to finish the digitalization of the
When I started working at Disney, movies were sold in VHS
units that still use analog film processing. The results in
and DVD before digital arrived. Video on demand, digital
these clinics have been great, they have radically increased
download, streaming and other forms of digital distribution
their productivity as a consequence of the technology itself
generated changes within the company and at an industry
and the reduction of service downtimes, and there is an
level; new and different partners, business models, different
impact on the diagnosis quality as well.
pricing, marketing, operations as well as a different meaning of product ownership to the retail and to the end customer.
Q: What are the challenges of digitalization in Mexico?
Something similar happens in the medical imaging industry.
A: The first challenge is to achieve a cultural acceptance of
We went from selling X-ray films to offering digital-
change, to break the barrier of resistance to install solutions
imaging services, from selling a consumable to selling an
whose end product is digital and not tangible. Our clients
intangible digital image. Therefore, this similarity with the
have been working 15 to 20 years in the same way so it
industry I come from helps me understand how important
is not easy to make them embrace change. Working with
this change is for the industry, how deeply it affects the
public institutions presents other challenges. Budgets
different stakeholders and what can we do to be prepared
need to be reassigned, to adjust to service contracts.
to embrace and take advantage of that change.
Tenders often do not have a proper budget to contract the needed digitalization services. Some budget items,
Q: How has the adoption of digitalization in the health
such as those assigned to the maintenance of old film-
sector evolved in Mexico?
developing processors, should be assigned to the digital
A: IMSS carries out between 19 and 20 million image studies
imaging services. In addition, the process of tenders
every year. We are still its providers of analog films and
is complicated as there is a lack of standardization and
they still buy around 1.5 million square meters. We believe
technical specifications often do not match the real
that only between 25-30 percent of its imaging studies
customerâ&#x20AC;&#x2122;s needs, they also require the presentation of
are digitalized, so there still is an important opportunity to
past contracts with public institutions to demonstrate the
broach. However, it has to standardize their process. There
companyâ&#x20AC;&#x2122;s expertise; this is a bit contradictory when we
are around four or five companies offering solutions similar
consider the few contracts for this kind of service that the
to ours. The most digitalized countries are looking for, or
public institutions have signed.
have already adopted, a digitalization solution where the images can be shared among different institutions. IMSS is
This is why we received with great anticipation the IMSS
the biggest health institution in Latin America and it will
Innovation Olympics, an event that IMSS launched in
be a great advantage if at some point it could have the
March 2017 for the first time. We see this competition as
information of all its patients in the same platform available
a key aspect that was missing for IMSS to properly adopt
for all its clinics, and moreover, such a platform should also
innovation; a space where the public and private sectors can
be shared across health institutions. The High Specialty
transparently team up to develop innovative solutions that
Medical Units (UMAES) are already digitalized; they have
are tailor-made to fit the reality and needs of the institution.
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VIEW FROM THE TOP
PROPRIETARY IT SHINES LIGHT ON HOSPITAL DEMOGRAPHICS GUILLAUME CORPART Founder and Managing Director of GHI
142
Q: How are GHI’s sales divided between intelligence and
institutions. Laboratories and diagnostic centers are also
consulting services? Which services are most in demand?
evolving. INEGI indicates there are over 13,000 laboratories
A: GHI has three business lines: its hospital demographics
and diagnostic centers, with Chopo and Laboratorio Médico
database, which is the world’s largest hospital database
Polanco being the largest.
focused on Latin America and covers 14 countries and over 15,000 hospitals regionwide; assessing market size
Q: How can various levels of the healthcare sector help
and share for medical devices and equipment in Mexico,
combat chronic disease in Mexico and Latin America?
Colombia, Brazil, Argentina, Chile and Peru, among others;
A: We are no longer in the era of large infrastructure
and customized consulting assignments, the design and
ownership. Contemporary economic models such as
execution of consulting research specific to the needs of any
Uber, Airbnb, Instacart and Rappi demonstrate that
client, including strategy definition, competitive intelligence,
specialization, sharing and collaboration are valued
customer profiling and interviews with key opinion leaders.
and sought by customers. The first step in generating
In 2017, the business was well-balanced between these three
efficiencies lies in the ability to measure actions in a
service lines and we expect this to continue in years to come.
standardized manner across systems. This means, for example, measuring the number of procedures conducted
Q: How does GHI handle the big data it gathers to develop
by hospitals with the same codes, preferably ICD-9 or -10.
market analyses and databases? How does it ensure data
Only once this is accomplished will the various healthcare
protection?
systems be able to communicate effectively and efficiently
A: We have invested in creating proprietary IT systems and
among themselves.
platforms to meet our unique data-gathering needs, which enables us to validate previously collected information as
Q: What steps have been taken to prepare for the future
well as collecting new data points. Our systems also enable
burden of senior citizens in Mexico and Latin America?
us to scale horizontally to other countries and regions, as well
A: Private institutions are the most active and dynamic in
as expand vertically into other fields of application, such as
seizing such opportunities. Furthermore, medical device
laboratories and diagnostic centers. So far, we have not heard
and equipment manufacturers continue to develop
of any other company in Latin America with such robust,
homecare solutions, giving the elderly the opportunity
time-tested tools.
to receive care in their home and from their loved ones. Payers should soon recognize that such solutions help
Q: How are hospitals adopting information technology
reduce the financial burden of care and present viable
infrastructure and what specifically is of interest?
alternatives to improving their margins.
A: Generally, hospital IT is a hot topic. Hospitals are increasingly interested in electronic medical records, system
Q: Last year you said that investing in hospitals is not a
integration and the move toward digital equipment. Hospital
solution to the burden of an aging population. What are
adoption of such technology is growing from a small base,
the alternatives?
starting in the private sector. In the public sector, efforts
A: As it pertains to the aging population, we will see two
are being made to standardize systems across the multiple
major trends play out: expansion of private care facilities that focuses on enabling an aging population to maintain an active lifestyle and live with dignity. There is a growing interest
Global Health Intelligence (GHI) is a US-based business
in homecare solutions that enable the aging population to
intelligence firm focused on healthcare analysis in Latin
receive care within the comfort of their home surroundings. A
America and Asia. GHI developed the world’s largest hospital
third and underlying element will be the organic growth and
demographics database focused on Latin America
expansion of laboratories and diagnostic centers.
VIEW FROM THE TOP
NEW TOOLS TO ACCESS THE PUBLIC MARKET
Enrique Martínez Director General of IIIFAC
José Ferreyra President of the Pharmaceutical Research of IIIFAC
Q: What have been IIIFAC’s biggest challenges and
Q: IIIFAC offers a certification in access to public health
opportunities over the last year?
institutions. What training needs have you recognized?
JF: We worked to create a database of Big Data on
JF: There is a dramatic need for specialization. Pharmaceutical
purchasing behaviors in the public pharmaceutical market
companies have recognized that there is not much growth
and we developed a multiplatform business-intelligence
with private clients and one representative in the government
system covering over 70 million unitary registries. The
can be as rentable as 17 in the private sector. Therefore, most
database contains information about each drug available
of our students are representatives of the pharmaceutical
in the market, such as the contract value, the consumption
companies who we are helping shift from the concept of
and inventories, as well as the number of prescriptions, in
medicine based on experience to medicine based on existence.
more than 100 public-sector institutions. Today, more than
Government physicians do not have freedom of prescription
45 pharmaceutical companies in the country are using it.
but they are subject to the authorized basic chart of what is available at the time of prescription. Therefore, executives
Q: In what areas is innovation more prevalent in the
should be able to sit down with the directors of the public
Mexican pharmaceutical industry?
institutions and talk about costs and benefits.
JF: We believe that our business intelligence system enables our clients to predict market movements.
Q: What are the main objectives for your institution in 2017?
For example, we saw last year that ISSSTE requested
EM: Increase our client base and continue our certification
approximately 237,000 units of duloxetine but we saw in
program to strengthen our presence as a research institution
our business intelligence that months before, ISSSTE had
in the healthcare sector. We expect that in five years the
decreased the authorized consumption of duloxetine to
public sector will represent 60 or 70 percent of the units in
practically zero. We are committed to working with our
the market in Mexico and that, at that point, there will be a
clients to resolve these inquiries. We also launched market
health reform that insists on the regulation of data, which is
research on the consolidated tender results published
very important to health economics models.
in June 2017 in which we were able to recognize which product categories IMSS is over-purchasing and predict
Q: What are the industry’s expectations for current
which of these categories will not reach 100 percent
pharmacoeconomic strategies?
consumption over the year.
EM: The industry is focused on the consolidated purchase. This is an interesting initiative because it allows better prices
Q: What advantages can this system provide regarding
and fewer processes to acquire medicines. However, there
the provision of healthcare in Mexico?
are some issues. Consolidated purchasing does not mean
JF: The access to this information will raise awareness
access to drugs for the population. The purchases only
about the current model of health administration. For
represent between 50 and 60 percent of the market and the
example, we all know the advantages of early insulinization;
main institutions, such as IMSS and ISSSTE, do not reach 70
however, IMSS continues to treat patients with Metformin
percent. In the end, the consolidated purchase is focused only
because it is cheaper and reaches a wider range of the
on saving money and not better service because the prices
population, although its continued use causes pancreatic
demanded of the laboratories are not sustainable for them.
insufficiency. The institutions have to choose between purchasing expensive drugs that delay the progression of a disease or cheap medicine that can only help send
The Institution for Pharmaceutical Research and Innovation
patients home. Article Four of the Mexican Constitution
(IIIFAC) offers information and educational services for the
says that citizens have the right to medical care but does
pharmaceutical industry in the public Mexican healthcare
not state that their life is above an assigned budget.
system through in-person courses and digital applications
143
VIEW FROM THE TOP
MODERNIZING HEALTH TECHNOLOGY ALEJANDRO DE LA PARRA Director General of Astrum Salud
144
Q: How is Astrum Salud positioned to take advantage of
medicinal treatments in Mexico through the use of our
advancements in global connectivity?
telemedicine solutions.
A: We have formed solid commercial and academic alliances with various organizations across the globe to
Q: To what extent will the courses be adapted to other
offer better solutions to our users in health, education
Latin American countries?
and communication services. This has further improved
A: The courses themselves are to be presented in Spanish
our overall service quality by giving it a globally
and include localized mentions of technologies used in
competitive edge. We have recently allied with CloudVisit,
the region for professional opportunities. As we connect
a prominent New York-based IT development company
education and labor, we trigger the pragmatic learning
with vast telemedicine experience, to create a reliable
path and refocus on action. We combine our efforts with
and integrated videoconferencing CMS implementation,
other institutional organizations and take several factors
exponentially empowering our secure IT development with
into consideration, including connectivity, local access to
pristine tropicalized services at competitive prices.
the technologies mentioned in each course and the rate at which these technologies are prospering locally to create
Our alliance with the New York-based organization Life
an effective impact on local communities.
Extension Advocacy Foundation has developed new and better ways of providing educational and informative
We firmly believe that to incite foreign investment in
content in Spanish, closing the gap for Spanish-speaking
Latin America it is our responsibility to fully engage in
communities and enabling them to learn, engage and
the development and expansion of our own infrastructure,
support other prominent organizations in the life sciences
culture and society. We face a challenge to mitigate the
industry. We emphasize that education is a prime concern
current brain drain situation as well as the flight of capital
in improving healthcare in the modern world and it must be
and it is entirely in our hands to assemble a proper Latin
addressed correspondingly to be offered in an accessible
American industry to advance. We are able to accomplish
and effective manner. This is the reason we have focused on
this as the local education level rises with a globalized
malleable digital implementations for education, allowing
vision in various industries with the use of technology but
us to adjust accordingly to technological advances.
we need to pay attention to the rate at which these and other efforts echo across communities and see to their
Q: What are the goals of your latest project Astrum
implementation.
EducaciĂłn? A: We have established a coalition with the World
Q: What methods are you implementing to maintain
Academy of Medical Sciences, an inspiring institution
high follow-through rates and what tools will you use to
based in the Netherlands, that allows us to provide online
encourage people not to give up?
services in Spanish for continued medical education and to
A: As we learn from our development, we come to
cooperate on congresses and seminars. We can also offer
understand that e-learning deals not only with the quality
our videoconferencing platform to the academyâ&#x20AC;&#x2122;s medical
and variety of the educational content provided but also
members. This will extend access to novel treatments to
with how education itself is made available to the users.
Latin America, allowing the region to move forward in
Having access to on-demand online education is not a
clinical science as e-learning consolidates and knowledge
choice but a necessity in our current lifestyle because it
spreads. Astrum Salud has also formed relationships with
allows students to have a malleable management of time
cutting-edge biotechnology entities such as RegenerAge
while being able to move forward with their academic
Clinic in Mexico City and Bioquar in Philadelphia. The
enrichment. As education shifts to a more personalized
goal is to expand the reach of revolutionary regenerative
experience, we are inclined toward versatility for
knowledge acquisition which, in turn, means we enjoy
the future. Our dedication and focus will teach us the
better follow-through and retention rates as students
best way to coincide with the government for the sake
have a chance to complete studies at their own pace. This
of our communities.
approach involves simplifying how each student is able to enroll in a course, interact, acquire knowledge and how the
Q: Astrum Social has been live since June 2016. What
student gets certified. The process is being structured to
results have you seen so far?
allow automated operations for a fluid and convenient way
A: Astrum Social is a social network platform that involves
to benefit from online education. As we also focus on basic
the sharing of knowledge, emotions and experiences that
education, our content is provided with a gamified spirit,
reflect the current Latin American view of health and
allowing younger audiences to be introduced to medical
wellness around the world while also directing the vision
science in a fun and energetic manner.
of where it is going in the future. The platform allows users to interact with content provided by other users and to
Q: How are people receiving new online-education
communicate with each other with the ability to create
platforms and how are they adapting to e-learning?
personal profiles, groups, dedicated pages, and also be
A: The efficacy of online education is a proven fact as it
able to play games, listen to music and watch videos,
encompasses a more immersive and interactive experience.
all focusing on promoting a healthy lifestyle between
It has been restructuring society for over a decade now.
its users. All users see the Astrum feed on their home
Online education has been disruptive and repercussions
page, which offers diverse, educational and informative
are seen worldwide in formal e-learning and also with
content related to health and medicine to stay updated
non-formal, concomitant knowledge acquired from mixing
while interacting with other users. Users can create bonds
modern entertainment content with access to global
and meet in person while being collaboratively proactive
information. As larger segments of society organically
about their health.
adopt these new information channels, we believe that this is the perfect time for LATAM to invest and harness the
After we launched phase one of the platform, we received
power of a broadened and more pragmatic approach to
productive feedback from our limited user database and
resolving our needs with the use of both formal and non-
have redesigned certain features, fixed minor bugs and
formal online education. The technologies we use have
reconditioned our news feed according to comments.
been in use in the e-learning community for decades, but
Additionally, we have implemented an enhanced music
we are always looking to combine new and more effective
store that allows users to purchase content from different
alternatives with our current development.
artists and therapists focused on mindfulness, music therapy and meditation. As we expand these features and include
Not only does the student need to adapt to e-learning
products and services from our other branches, such as
but so does the instructor. In our experience, instructors
Astrum Educaciรณn and Astrum Mรณvil, we aim to deliver an
have had a harder time embracing these new ways of
integrated social ecosystem that encompasses both the
providing access to knowledge; they are increasing
social and commercial value that digital infrastructures often
their own adeptness at the same time as the student.
provide. We are in production release, as we say in the IT
This is the reason we invite LATAM academics to dive
development sector, but we are always fine-tuning to focus
deeper into globally available online education. As the
our global vision on how to provide access to better health,
intercontinental mission to better educate society is
better education and to push social development forward.
rapidly being redefined, providing the lens through which each community interprets information requires even
Q: What are the main projects you will be focusing on
more direction and objectivity. We are always excited
this year?
to strategically address these issues in conjunction with
A: In healthtech, we will be acclimatizing our telemedicine
other entities and open our doors to innovative education
services for particular conditions and diseases to be able
initiatives around the world.
to extend the benefits of our platform. We are proud to serve an all-encompassing digital solution for diabetes
Q: The largest education and healthcare provider is the
patients as well as a program for obesity, both of which
government. Do you have plans to work with it?
we will be launching during 2017.
A: Indeed, the government sector has a categorical role in both education and healthcare. Combined efforts with the private industry have helped to build the foundation
Astrum Salud is a Mexico-based company specialized in digital
of our government infrastructure. On that account, we are
solutions for the Latin American community in communication,
and will continue to be active in undertaking collaborative
measurement and health. It has designed and runs dozens of
initiatives with governmental bodies to plan and act for
health-related apps, bringing services to the wider community
145
VIEW FROM THE TOP
MANAGING HEALTH THROUGH DIGITAL AIDS SANTIAGO OCEJO Director General of Salud Cercana
146
Q: What is Salud Cercanaâ&#x20AC;&#x2122;s role in the Mexican healthcare
of service. In addition, we give them a lower cost so that
system?
they can access the same platform. We have attended over
A: Salud Cercana is a digital platform that integrates health
3,000 walk-in patients in our physical office and around
services. We are a patient-management system especially
200 have acquired the program for the management of a
focused on patients with chronic diseases that enables middle
chronic disease. We are also working with two companies
and low-income patients to find doctors who are certified by
through our B2B model, one with 6,000 clients.
Salud Cercana and who belong to our network. In addition, our patients can interact with nutritionists, psychologists and
Q: What is the added value Salud Cercana brings to the
a special figure we call a care coordinator, a wellness authority
Mexican healthcare system?
and supportive mentor who motivates individuals to cultivate
A: In dealing with chronic diseases, patients need
positive health choices. The lack of care coordination is one of
behavioral changes, so we help those patients find
the biggest issues in the Mexican healthcare system and there
the right professional to treat their condition. We are
is a large amount of money wasted on the public system and
managers of chronic diseases. This is our priority and we
out-of-pocket expenditure due to bad coordination.
would like to work with the public sector on managing its population with chronic diseases. We also want to reduce
Q: Salud Cercana is the first prepaid healthcare system
out-of-pocket expenditure on medication and coverage
in Mexico. What is the protocol when a client acquires
of chronic disease complications. Ninety percent of the
the service? A: Once patients download the app and accept our terms SALUD CERCANA'S COORDINATED HEALTH PROGRAMS (PCS)
and conditions, they can go to any convenience store in our network or any payment center and prepay the service. After verifying the payment, the care coordinator connects with the patient and explains how the platform works and the benefits of the acquired service. The coordinator also schedules the first interview with a doctor in our
The purpose of the PCS offered in the application is to help patients adopt healthy habits. Through these programs, users have access to a community of hospitals and pharmacies that help them save money and to certified specialists, providing all the tools to optimize health and save on expenditures. The platform offers five PCS:
network to create a clinical record. The first appointment is covered by the initial payment and after that the care
Basic
for people with specific health goals who wish to improve their success with the support of a coordinator.
Nutrition
for people who wish to change their eating habits to reach their ideal weight, maintain it, increase their satisfaction and welfare and reduce the chances of developing a chronic disease.
Mind
for those who seek better emotional health and need support to control stress, effectively overcome grief, reduce anxiety, overcome a chronic disease or episodes of depression.
Equilibrium
for those who want to change their lifestyle with the help of a nutrition expert, a psychologist and a physician.
Medichat
for people who do not require an urgent diagnosis or treatment but who wish to receive advice from certified professionals.
coordinator will schedule a phonecall with a nutritionist and a psychologist to design a personalized plan that will then be monitored by the coordination team. Additionally, the care coordinator will be in charge of tracking all customer contacts, clinical records, doctor appointments and prescriptions, as well as laboratories and required prescriptions. Our platform has an embedded chat that patients use to ask questions, participate in forums, read relevant content and follow up on notifications with their nutritionist, psychologist and care coordinator. Q: Who are the specific beneficiaries of Salud Cercana? How many people are already using it? A: Right now, most of our users belong to C and D socioeconomic strata because they cannot afford this type
Source: Salud Cercana
MEXICO - FREIGHT MODE BREAKDOWN (%) DISTRIBUTION OF PATIENTS WITH A2017 PREVIOUS DIAGNOSIS OF DIABETES, HYPERTENSION, AND DYSLIPIDEMIA IN MEXICO’S HEALTH SERVICES
AVERAGE WAITING TIME PER MEDICAL VISIT (minutes) 100 80
91 70
64
60
2,529
PATIENTS SURVEYED BY ENSANUT 2016
42
40
32
Other public services
(PEMEX, SEDENA, SEMAR, etc.)
Private
5.6% ISSSTE 2.7% Other public services
Federal health services
33% IMSS air 32.7% State health services Rail 26% Private
ISSSTE
0
IMSS
20
Source: ENSANUT 2016 Road
Source: ENSANUT 2016
population has access to public health, but 50 percent of
Q: How is Salud Cercana’s initiative contributing to the shift
expenditure in Mexico is out-of-pocket. Lastly, our main
to preventive medicine?
long-term goal is to achieve an integrated healthcare
A: We are focused on secondary prevention, which
sector and we want to be the platform from which we
means we help patients who are already diagnosed
can manage all patients health and integrate services
with a chronic disease to access care more quickly and
around them.
avoid complications. However, our platform is focused on preventive care. We also know that companies suffer when
Q: What business models are you using for your operations?
their employees get ill so we are developing preventive
A: Salud Cercana has a B2C and a B2B channel in which it
strategies with our B2B clients.
works directly with companies. Both have the same goal: to manage patient health. In the B2C model, single users pay
Q: What regulations do you follow?
for coordination, nutritional and psychological support and
A: Dealing with health data requires following regulations
patients can have access to doctors at discounted prices. They
closely. We are careful with our terms and conditions and we
pay MX$900 (US$50) for our basic plan for a three-month
have invested heavily in protecting information. COFEPRIS
process, MX$1,700 (US$94) for psychology and nutritional
has also set specific guidelines for primary doctors to
support and MX$2,300 (US$128) for the complete service.
provide consults, so we help our doctors comply with the
The price is around MX$150 (US$8) and MX$250 (US$14)
requirements of having a physical office, an exploratory area
a month for receiving all these services. In the B2B channel,
and gathering patient information. As a healthcare company,
the price varies depending on what type of coverage the
we are aware of legal requirements and we know how to
company wants to offer to its workers; it might vary from
monitor them.
MX$75 (US$4) to MX$150 (US$8) a month. Q: What are your growth expectations for 2017? Our business models adapt to every type of company, but
A: First, our target is to expand our network of doctors and
our main source of revenue is the care coordination program
our geographical coverage. Secondly, we want to reach
(PCS), which is the added-value we bring to the market. In
10,000 app users with PCS. Third, we will grow our network
the future, we want to work with insurance companies and
of other providers such as laboratories and pharmacies,
government institutions through this service.
integrating our services with theirs. We are working on agreements with labs so when our patients go to them, the
Q: How do you recruit talent to Salud Cercana and how
labs send us the results. In the end, that follow-up is the value
do you establish the relationship with doctors?
we provide. Our goal is to work with at least 10 companies by
A: We have used traditional recruiting platforms and located
the end of 2017, managing both clients and patients.
doctors through word-of-mouth. We have also attracted talent by networking with doctors in the private and public sector and with nutritionists and physiologists. We have to
Salud Cercana is a Mexican company founded in 2015 that
be careful in this selection process because we need to train
provides a healthcare app for people with chronic diseases.
the talent we attract on how to use our platform and how
It is focused on simplifying access to health services from
to deliver quality through the service we offer.
the cell phone
147
VIEW FROM THE TOP
MEXICO READY TO SHIFT TO DIGITAL MARIO AMADIO President and CEO of GE Healthcare Mexico
148
Q: Mexico must shift to preventive medicine, which is GE’s
performance. We are in an era of change and GE is planning
main focus. What are you doing to guarantee patients
on leading that change. We used to talk about IT, now we talk
access to it?
about operation technology, a step further than IT because
A: Prevention is fundamental to us and the public sector
it is the way to understand how to manage information for a
should be spending on this. Expenditure will never be
determined operation.
enough but this only requires us to be more effective and find a way to optimize the value of our offer. Our portfolio
Q: What benefits could GE digitalization bring to the
is focused on diagnosis and includes different modalities:
healthcare system?
magnetic resonance, computed tomography, ultrasound,
A: We try to bring more efficiency and productivity to our
mammography, x-ray, life-care solutions, life sciences and the
portfolio through our new platform. The value of our digital
information systems that support this. Our strategy is focused
proposition is focused on service provision and control and
on diagnosis and there are three pillars for us: first, we aim
maintenance of our clients’ assets. For example, GE Health
to provide accessible costs and quality by creating products
Cloud is a product designed to integrate clinical workflows
affordable for each country to reach coverage; second, we
while managing the volume, velocity and variety of healthcare
work on the client-provider relationship, we never work
data. It will be capable of connecting to more than 500,000
alone and we always need the support and confidence of
GE medical imaging machines and more than 1.5 million
our partners and third, we support PPPs, which will help us
imaging machines worldwide, linking to millions of other
reach more patients.
healthcare devices including patient monitoring, diagnostics, anesthesia delivery, ultrasound, mammography and various
Q: Last year you mentioned that projects for GE will be
data sources. The future is not about having an application
focused on the digital realm. What advances have been made
in a machine, it is about getting the information produced by
in the shift to digital?
the machine in a cloud and working with it. We have launched
A: The main leaders of the company and business areas
the application of Predix internationally, while in Mexico and
are committed to transforming GE into a digital industrial
Latin America we are taking the first steps in healthcare. GE’s
company. GE Store is our name for the company’s competitive
main engineering IQ research center is in Queretaro with a
advantage. There is no other company that has the ability to
multidisciplinary team for healthcare development. The
transfer intellect and technology across industries and around
platform has been developed under standards that address
the world as GE can; from advanced technology, materials,
GE policies and each country’s regulations.
software and analytics, to commercialization, process, and business model best practices. We also have our own
Q: What are your main objectives in Mexico for the
operative system for the industrial internet, Predix, that is
coming years?
transversal for all GE businesses, including healthcare. The
A: There are three main targets for the next three years. First,
platform enables us to manage the information we gather over
we want to be acting and delivering as a digital healthcare
the years and make it available to our clients. By connecting
company. Then, we want to ensure profitability for our
industrial equipment, analyzing data and delivering real-time
shareholders through healthy growth. Next, we want to make
insights, Predix-based apps are unleashing new levels of
GE Healthcare Mexico an opportunity for talent. We want the best people for a better understanding and performance. These three objectives meet because if we are profitable,
GE Healthcare is the pharmaceutical and medical devices
we can focus on innovation and think about developing
division of the US-based company General Electric. It is a
talent. Talent leads to a better development, which leads to
world-leader in services in medical imaging and information
possibility for innovation. There is a lot of talent in Mexico and
technology for diagnostics
we need to attract it to our company.
INSIGHT
SLEEP RIGHT: IMPROVING HEALTH WITH APPS MACIEK DREJAK CEO of Northcube and Founder of Sleep Cycle
A decade ago, the arrival of smartphones also introduced
microphone to identify sleep phases by tracking movements
the world to the app. Today, millions of apps permeate
in bed,” Drejak says. The app then analyzes sleep, records
mobile platforms and among the most popular are those
its findings and wakes up users during their lightest sleep
related to health. Maciek Drejak, CEO of Northcube and
phase, using a predefined 30-minute alarm window.
Founder of Sleep Cycle, an app that wakes users during their lightest phases of sleep, says the increased use of
In the modern on-the-go world, getting the right amount
technology and the advances of Big Data can help improve
of adequate sleep can be difficult. A study carried out by
a variety of conditions, including those related to sleep.
UNAM shows that 35 to 40 percent of Mexicans have sleep problems that have been linked to further health problems
“[Health apps] help users quantify their sleep data. They
such as overweight and obesity.
give users all the information they need to find ways to improve their sleep and follow up on progress,” says Drejak.
In addition to looking for the specific sound-fingerprint of bed sheets moving, several other filters are deployed in
Sleep tracking has become a world trend and with millions
the app. It detects and filters rhythmic, reoccurring sounds
of users worldwide, Sleep Cycle, developed by Swedish
such as breathing and snoring, in addition to certain specific
company Northcube, is among the most popular. Sleep
sounds that are problematic for the fingerprinting system
Cycle alarm clock has been available for download since
like those of Continuous Positive Airway Pressure (CPAP)
2009 and is used to track sleep patterns. Users can add
machines, a breathing apparatus used by those who suffer
sleep notes such as “drank coffee” or “worked out,” to figure
from sleep apnea.
out what habits improve their sleep quality and which ones are detrimental.
Sleep Cycle can help detect differences in the population’s sleeping habits due to its bank of sleep notes and due to
“Sleep Cycle alarm clock iOS features a patented state-
the feeling of happiness users input upon waking. “Men
of-the-art sound analysis technology that records sleep
sleep less but wake up happier and have higher sleep
patterns. During sleep, our movements vary with each
quality. Women sleep more but wake up in a worse mood,”
sleep phase. Sleep Cycle alarm clock uses the phone’s
says Drejak.
EXAMPLESOF OFSLEEP SLEEPGRAPHS GRAPHSGENERATED GENERATEDBY SLEEPCYCLE ALARM CLOCK (time of day) EXAMPLES BY SLEEP CYCLE ALARM CLOCK: REGULAR DISTURBED SLEEP SLEEP
Regular Sleep
Disturbed sleep
Awake
Awake
Sleep
Sleep
Deep Sleep
Deep Sleep
00:00 01:00 02:00 03:00 04:00 05:00 06:00
01:00 02:00 03:00 04:00 05:00 06:00 07:00
Source: Sleepcycle
Source: https://www.sleepcycle.com/how-it-works/
Source: https://www.sleepcycle.com/how-it-works/
149
VIEW FROM THE TOP
CREATING INCENTIVES TO IMPROVE WELLBEING Benjamín Villaseñor CEO of Uhma Salud
150
Roberto González CFO of Uhma Salud
Q: Uhma Salud’s goal is to change life habits, a major
employees is a better place to work and will attract the very
challenge. How do you achieve this target?
best talent, which will directly impact its results. We have seen
BV: We look to hack habits, for which there are three steps.
people’s perspective changing greatly. Previously, certain
The first is imitation. We think that every decision we make
directors saw our services as a cost. Not anymore. They see
is based on an analysis of all the data we have available, but
them as an investment because they can check certain metrics
many decisions are imitations of what is happening around
that generate a return. Once this is measured, they notice
us. What we do at Uhma is institute policies such as not
the savings, including in recruitment costs. Retaining talent
allowing sugary drinks. We also promote the use of stairs
will become a key and these programs will be a must-have
instead of elevators and we replace biscuits in meeting
for companies.
rooms with vegetable snacks. Although Mexicans drink many sugary drinks, by putting water coolers in the office
Q: There are several startups that offer a similar service to
and handing out bottles of water we generate behaviors
Uhma. What puts Uhma above the rest?
that workers start imitating. Second is the theme of co-
BV: We have invested greatly in technological development.
responsibility. We build dynamics in which we ask people
Our online platform, which enables us to perform a thorough
to generate changes with the help of their co-workers.
biometric assessment in five to 10 minutes, is the result of
When planning to run a marathon, the first step is not to
eight years of work. There are other companies that offer
buy running shoes but to sign up and tell all your friends
similar services but having invested in technology allows us
so that you cannot back out. This engagement is known
to operate more inexpensively and swiftly. Our competitors
to be effective in acquiring healthy habits. The third part is
operate manually, rather than having an automated process
gamification. During the first biometric assessment, we give
like ours and their nurses take blood pressure, for example and
individuals an objective. People who achieve these goals
hand out the results written on a paper, which participants
receive a prize, such as an extra paid day off work or they
then enter into a health-risk assessment manually. Their
get to leave work early or arrive later. Of all the methods, that
participation rates are lower and the costs are higher.
linked to punishment saw the greatest results and, although
Fortunately, our market is growing greatly. There are lists
at first participants were the least happy, after three months
showing that all the Fortune 500 companies have a wellness
they were the most satisfied with their wellbeing program.
program. Especially those in the top 10 or 20 take great care of employee wellness and they attribute the success they see
RG: On average, they lost 1.5kgs per person in three months,
to these types of programs.
which multiplied by the number of participants is a huge amount of burned fat. The theme of work culture is clear and
Q: Of your three solutions, which has witnessed the most
this will generate much value in the future. The demographic
effective results in improving employee healthcare?
bonus in Mexico is about to explode. This will impact
BV: The portal enables us to follow an employee’s progress
companies as talent will become scarce and more expensive.
remotely. It enables us to reach a large, geographically
Not everyone will choose jobs based solely on salary. These
dispersed population. Each person that enters the portal
intangible benefits will attract talent to companies and will
has access to two telephone sessions per month with the
help with retention rates. A company with happy, healthy
professional of their choice. Annual access to this service costs MX$95 (US$5.20) per employee. The biometric evaluations are what reveal the most information about the individual. In
Uhma Salud develops wellbeing programs for the individual
2016, we performed 30,000 evaluations, all standardized. By
employees of a client company. It measures their current
automating the process, we eliminate the risk of human error.
health status and potential risks to offer personalized
As a company we have performed more evaluations than even
wellbeing plans
the government through its ENSANUT survey.
VIEW FROM THE TOP
CONNECTIVITY INSPIRES FITNESS MELANIE CHASE Director of International Product Marketing at Fitbit
Q: How does Fitbit create user engagement? What makes
up, our devices are designed for all-day wear to show how
the company a fitness social network?
the small steps users take each day can have a big impact on
A: Fitbit has one of the largest online communities in the
their health. We also know social connections help provide
world and the Fitbit app helps users find and engage with
the motivation and support that is fundamental to a user’s
family, friends and coworkers, creating positive network
health and fitness journey. For example, we have found that
effects that reinforce user engagement and increase
Fitbit users with one or more friend connections move more,
retention. As of the end of 2015, we had 16.9 million active
taking on average 700 more steps than users without friends.
users worldwide, up 152 percent year on year. Our growing user base has increased activity, taking 50 percent more
Based on aggregated and anonymous data from over 1 million
steps YoY in 3Q16. Over the past year, there has been a 98
Fitbit users, we found that, on average, some users can be
percent increase in the number of users who have at least
sedentary for up to 90 minutes at a time throughout the day,
one friend on the Fitbit platform and, on average, Fitbit users
which is a significant amount of time for the typical 9-to-5
have more than six friends, a 23 percent increase from 2015.
office worker. Getting up to move for even just two minutes every hour can help chip away at those sedentary periods and
We are continually looking for new ways to encourage our
we have made it a point to encourage that with our Reminders
community to engage with Fitbit and each other. At CES
to Move feature. We know that every user has a unique set of
Las Vegas we introduced Community, a new section in
needs that requires different forms of guidance. With Fitstar
the Fitbit app that offers more ways for users to connect
by Fitbit and Personal Goal Setting we are delivering a more
with others to build on and inspire them on their path to
personalized experience with unique insights and guidance
better health. Within Community, users will have access to
to empower users to achieve their goals.
Feed, Friends and Groups, all with the goal of providing a more appealing social experience. Feed is a new feature
Q: Fitbit has partnered with Qualcomm and UnitedHealthcare
that provides an engaging way to connect with friends,
(UHC). What projects will these alliances develop?
family and groups of like-minded individuals so users can
A: We are thrilled with these new partnerships. In the US we
find added support and inspiration to reach their health
partnered with UHC to offer the top-selling Fitbit Charge
and fitness goals. Friends easily connects users to others
2 to members of UHC’s Motion program, an employer-
across the globe where they can stay encouraged to climb
sponsored wearable device wellness program that rewards
the leaderboard, as well as cheer, taunt and direct message
participants with up to US$1,500 in reimbursements for
friends and family as they compete to get the most steps.
achieving specific health goals. This is the first time Fitbit
Groups lets users discover and join communities of like-
has designed a custom feature on a device and Qualcomm
minded people to help support and inspire them on their
played a role in providing technological capabilities and
journey. They can choose from over 20 groups related to
horsepower. In the future, our two companies will focus on
fitness, nutrition, wellness and weight loss. Community will
new UHC health programs and services that incorporate
be available later this year to all Fitbit users.
the latest generation of wearables, medical devices and home diagnostic tests that utilize Qualcomm Life’s 2net™
Q: How important is technology in creating a state of
Platform for medical-grade connectivity.
health consciousness? A: It is undeniable that technology helps us to be connected, which is why Fitbit is introducing new tools that deliver
Fitbit is a US-based company that has been a pioneer and
inspiration, personalization and smarter guidance to help drive
leader in the connected health and fitness category for nearly
behavior change and maximize positive health outcomes. To
10 years, helping millions of people across the globe reach
provide a complete picture of how a user’s daily activity adds
their health and fitness goals
151
INSIGHT
AI PROVIDES DIGITAL ANSWERS TO TECH-SAVVY GENERATION JAVIER CARDONA Co-Founder and Director General of 1DOC3
152
Despite the efforts of the main health institutions, some
fit the Mexican demographic and epidemiological profile. The
Mexicans are still falling through the cracks of the universal
app allows low-income people aged between 17 and 27, the
healthcare system. E-health services, such as 1DOC3, are
main users of this service, to solve some health inquiries.
helping to fill the gap as an easy alternative to face-to-face doctors’ appointments, fueled in part by improved artificial
The success of 1DOC3 is a consequence of a solid investment
Intelligence (AI) and the rise of a tech-savvy generation.
in developing AI, which has helped the app’s user platform triple between 2016 and 2017, up to a million users a month.
Services such as Colombian start-up 1DOC3 deliver answers to
Through a series of algorithms, inquiries are processed in
simple medical inquiries for free, providing basic, specialized,
fractions of seconds. Typed questions are compared by the
medical information. “We have become a family doctor to
AI with previous inquiries. If a match is found, the user is
whom young people ask questions from their phones,” says
directed toward that answer. “Ninety-nine percent of inquiries
Javier Cardona, Co-Founder and CEO of 1DOC3. The e-health
match previous answers,” says Cardona. If no matches are
company entered Mexico about three years ago and provides
found in the database of solved inquiries, the user sends
tens of thousands of users with free medical information daily.
the question and waits between 40 and 90 minutes for the answer from a professional physician.
Mexico comprises 1.5 percent of the global e-health revenue and 4.4 percent of the regional
Questions presented by Mexican users are answered directly by one of the 10 Mexican physicians employed by the company, a strategy that aims to provide the best possible answers to users of each nationality and to provide a better user experience. Answers follow what Cardona calls the
“1DOC3 has grown incredibly. The potential of the health
ABC Protocol: confirming and clarifying the user’s problem,
industry is large in terms of efficiency and savings and
providing medical grounds for the answer physicians provide
increasing people’s access to services over the internet,” says
and concluding what recommendation is most suitable for
Cardona. According to Statista, revenue in the e-health market
the user. 1DOC3 does not provide diagnoses but rather, gives
worldwide amounts to US$9.8 billion in 2017, of which only
basic recommendations and insights on common diseases.
North America accounts for US$3.3 billion and Mexico US$147 million. Thus, Mexico comprises 1.5 percent of the global
The company also offers a series of services that include
e-health revenue and 4.4 percent of the regional. Statista
publishing articles related to the most consulted topics
forecasts that by 2020 the Mexican e-health market volume
in each country, providing insurance companies with
will increase to US$265 million.
statistics on different diseases and developing ondemand awareness campaigns for UN agencies, public
Mexico has the highest rate of adolescent mothers in the
health institutions, laboratories and NGOs. 1DOC3’s main
OECD, with a teenage fertility rate of 65.7 births per 1,000
strategy is to strengthen its technological development as
women in 2014, according to the National Population
AI enables the most efficient allocation of resources. The
Commission (CONAPO), while the National Center for
company expects to strengthen relations with all clients,
Prevention and Control of HIV & AIDS (CENSIDA) reported
continue growing its user platform and make new alliances
706 new registered cases of AIDS in 2016, so it is not surprising
with insurance companies and public health institutions.
that sexual and reproductive health are the most requested
It is also working on providing users with quicker answers
topics. Diabetes, the second-most common cause of death
in case of an emergency. “The opportunity to impact the
in Mexico, at 98,521 in 2016, according to INEGI, is the second
health industry through new technologies and digital
topic on which Mexicans inquire. The inquiries made on 1DOC3
channels is increasingly greater,” says Cardona.
VIEW FROM THE TOP
DIGITALIZATION UNDERWAY BUT ACCELERATION NEEDED FEDERICO CASAS-ALATRISTE Managing Director of T-Systems Mexico
Q: What role does Mexico play in your global strategy?
Healthcare is a strategic industry for T-Systems, with a
A: We have been in the Mexican market for over 20 years.
very important market penetration in Europe but with
When we first started in the country, we operated under the
a low participation in the Mexican market because the
name Gedas, providing services to the automotive industry.
digitalization of the Mexican health sector is slow. However,
Our focus is now on providing services to the premium
we have high growth expectations for it. We are investing
segment of companies and public-sector entities.
heavily in the sector.
Mexico has contributed heavily to our global growth. In
To push and accelerate a change in the digitalization of
2015 and 2016, we grew in revenue on average 30 percent
the Mexican healthcare system there are two verticals:
annually in the country. Repeating this growth in coming
one comes from the government through the National
years will be complicated but we expect to continue growing
Digital Strategy and the other from the industry itself.
at an accelerated rate. We have a strong presence in the
The digitalization of health services is a race against time.
industrial sector and we have an important but selective
Digitalization is something that is not being questioned,
presence in the public sector. In the health and financial
it either happens or companies will not have a chance of
sectors we have a very small presence. However, we expect
survival. Regardless of what politicians may say, the world is
to increase this in both and thus continue growing.
already digitally connected. It is imminent and it needs to be done now, we cannot think of doing it in the coming years.
Q: How has digitalization been received in Mexico? A: Companies are already undergoing the transformation
Q: In terms of human capital, is the countryâ&#x20AC;&#x2122;s workforce
of the digital revolution but it is a change that needs to
prepared to face the challenges the digital era will bring?
be accelerated in the country. At first, it was hard for
A: Human capital is a critical issue that deserves to be a
the Mexican business community to understand certain
top priority. Mexican technicians are extraordinarily good
concepts such as the cloud. However, the cloud is like
and competitive worldwide. The fact that we provide
the entry ticket to digital transformation. It is impossible
services from Mexico to more than 30 countries means
to conceive this transformation without a model such
that our human capital can perform world-class services.
as the cloud.
Universities are producing professionals and technicians with competitive levels. While the technical skills of
Up until a few years ago, companies in Mexico thought that
graduates are at a good level, an element to improve is the
having control or exclusivity of their technological resources
studentsâ&#x20AC;&#x2122; English level. Especially in the telecoms industry,
was of extreme importance since it belonged to their core
people must be able to at least read in English and interact
business. Today, few companies have their own data center,
with clients in English. However, besides this and given the
since it makes no sense for them to have one. From a cost
transformation dynamic of the industry, companies must
perspective for IT, instead of being a fixed-cost model as it
invest a lot of money in training, which is understandable
used to be, it has now become a variable cost, which has
given the characteristics of our business. We invest heavily
viability repercussions, particularly for investment projects.
in training and certifications. It is a matter of creating a processes culture, which requires time and effort.
One of the most common concerns for the business community regarding the use of the cloud was security. The truth is that the level of information security
T-Systems is a global IT Services and Consulting company.
companies can have when using our services versus the
It specializes in providing cloud services, M2M solutions and
security level they can have in an in-house data center with
communication services, among others, helping companies
limited conditions cannot be compared.
construct a digital platform
153
INSIGHT
APPROACHING EARLY CANCER DIAGNOSIS WITH AI JULIÁN RÍOS Director General of Higia Technologies
154
Breast cancer mortality is on the rise in Mexico and early
high expenditure for the government and a main concern
detection can be a strong tool to combat the disease. Self-
given the lack of an effective early diagnosis test. “The
examination has traditionally been the first line of defense
government will be one of our main buyers because this
but it is far from ideal. After watching his mother survive
product will help rural clinics, associations, universities,
two battles with the cancer, 17-year old entrepreneur Julián
insurance companies and hospitals reduce costs.” Eva will
Ríos thought artificial intelligence could provide a better
initially sell for MX$2,000 (US$111) without government
approach and the result of his work is attracting serious
support, but Ríos says its business model will enable the
attention both in the public and private spheres.
company to reduce the price.
Ríos’ company, Higia Technologies, produces Eva, a bra
Higia Technologies works with a team of 10 people made up
Ríos says can detect breast cancer through the use of
of engineers and oncologists and the company has received
bio-sensory patches. He believes the detection methods
an invitation to work at investor Y Combinator in Silicon
currently available are more for diagnosis, mammography
Valley. “It will help us formalize the business part. It receives
and biopsy, while there are few effective early detection
7 percent of the company for a very small investment.
processes. Ríos hopes to meet this need with Eva.
However, the real value of this opportunity is to be part of an ecosystem in which we can gather important contacts
The high-tech bra’s bio-patches capture temperature data
that could lead us to higher investment,” says Ríos.
that is sent to a mobile app, which keeps a record of the information received. “Cancer increases blood flow due
Ríos began researching breast cancer when he was 13
to the abnormal production of cells that could produce
and locked onto the idea that changes in temperature
a tumor. This leads to an uncommon temperature in the
could lead to a correct diagnosis. He then gathered his
affected area.” The app’s algorithms analyze the collected
high-school friends to create Higia Technologies with an
temperature data to produce a thermal conductivity curve
investment of less than US$250. By 2017, the company
that is compared with a database of 2,000-3,000 curves
had raised US$75,000 from awards and donations,
of data from women from different parts of the world who
US$33,000 from investors and it is about to close a round
have been diagnosed with cancer. “Different tumors have
for US$300,000 from an investment fund. Ríos believes
different thermic fluids. If there is a curve similar to a case
the Mexican entrepreneurial ecosystem is talented but
from the file, the probabilities of having breast cancer are
lacks support. “Many projects are changing the world
between 93 and 94 percent,” says Ríos.
but not in Mexico. The industry of risk analysis is very small, which restricts investment.” He also thinks many
Eva will be available early in 2018 in Mexico and Latin
entrepreneurs in the country have good ideas but poor
America through online platforms and convenience
execution. “We have often seen how in Mexico ideas are
stores. The project is awaiting approval from COFEPRIS
adjudicated without evaluating whether they can be
and the team recently signed an agreement with IMSS
executed,” he says.
to carry out trials. Higia Technologies is in the process of developing new According to the Ministry of Health, in 2015, 6,252 women
products, including a device to detect testicular cancer
died in Mexico due to breast cancer, almost 5 percent
through men’s underwear. Ríos says information is the
more than the previous year, figures that Ríos wants to
key component of his company. “Higia Techonologies is
reduce. According to Ríos, a women with cancer in phase
moving from a company that develops medical devices
III costs IMSS MX$5 million (US$277,000) every year and
to an information company. Our value is in the amount of
MX$250,000 (US$13,888) if she is in phase I. That is a
information we have.”
VIEW FROM THE TOP
THE CASE FOR STRONGER DIGITAL SUPPORT
Xavier Ordoñez Partner in Strategy and Operations Consulting at Deloitte
Horacio Peña Senior Manager in Strategy and Operations Consulting at Deloitte
Q: What challenges in digitalization is the healthcare
are now web events that become physical when the expert
system faced with?
reaches the participant’s city.
A: By pushing digitalization you often lose a physical
155
interaction, which in Mexico and other Latin American
Technology has developed greatly and has decreased direct
countries makes a huge difference. The visual contact and
sales to producers but they have strengthened innovative
dialogue with a physician makes the commercial process
tools that allow for better follow-up with an increased
more effective. There was a moment when companies
chance of achieving a drug’s purpose.
tried to become more digital, using tools such as iPads as a mechanism for communicating with the physician, but in
Q: What are the main challenges regarding cybersecurity
many cases the physician refused to see them. Mexico is a
in healthcare?
country where interaction is still important and that presents
A: Deloitte has a department specialized in cybersecurity
a challenge to companies that want to be more innovative.
although this branch has not yet developed much at
Many laboratories have reduced the number and size of their
an industrial level in Mexico. Cybersecurity allows the
sales teams, which is a trend seen in Big Pharma over the
verification of information veracity and a better follow-up
past 10 years. National laboratories still have larger sales
on patient health and on a drug’s effectiveness. Companies
teams but there are fewer companies with these numbers.
have not yet reached the point where they feel they need cybersecurity for health-related issues. They focus more
Perhaps, the most important challenge we have in Latin
on financial issues and economic risks, where there is
cultures is making the digital become more human.
tangible and confidential information management. Health
Making use of it with the purpose of increasing the quality
companies in Mexico have not placed as much importance
and content of our interactions instead of reducing or
on cybersecurity concerning drugs or services as they have
eliminating them.
on information management and patient communication.
Ten years ago, laboratories enjoyed double-digit growth
Q: How can you use data analytics to track and eliminate
rates. Many top labs had a large portfolio for general
epidemic viruses in Mexico?
practitioners and general medicine and a smaller portfolio
A: There are technological support tools available during
for highly specialized drugs. Over time it has become
epidemic periods but they are uncommon because the
impossible to maintain the same growth rates in the primary
difficult epidemics are usually centered in low-income
care sector, where many national companies are competing
communities, which have less access to technology.
and where generic products are gaining important market share. Many Big Pharma laboratories are not willing to go
For segments of our population with access to electronic
into generics with the same resources. Instead, they venture
media, advanced analytics that are available today would
into highly specialized areas, where you need to educate
allow a web search and would become a predictor of possible
physicians and provide consulting and advice. Training is
diseases depending on the nature of the questions and
now undertaken in many ways not possible before. There
information searched. This constitutes a great opportunity
are webcasts and online events in which people interact
in prevention, an area in which we have a long way to go.
across the world, physicians want to have access to more digital information rather than mountains of paperwork and commercial representatives are also asking for this.
Deloitte is one of the world’s leading audit, consulting,
Laboratories are implementing digital ways of reaching
tax, financial advisory and risk advisory brands, with about
them while keeping human interaction alive. For example,
245,000 people at member firms in 150 countries and
speaking tours that used to be only in-person experiences
territories
Research on growth disorders
CLINICAL RESEARCH & TESTING
7
For years, many have spoken of Mexicoâ&#x20AC;&#x2122;s clinical research industry as a boom waiting to happen. The country has an ideal geography, ethnical diversity and the sanitary installations, but it still only accounts for an insignificant proportion of the number of clinical trials carried out worldwide, at just over 1 percent, according to clinicaltrials.gov. Its northern neighbor has a hefty 42 percent of global trials, despite the US being more costly. According to ProMĂŠxico, conducting clinical trials in Mexico is 46.2 percent cheaper than in the US. Most of the testing performed here is retesting, as required by local sanitary regulations. Authorized third parties have helped enormously in this area, speeding up processes and efficiency. According to a COFEPRIS 2014 press release, authorized third parties had reduced authorization wait times from an average of two years to 20 business days.
Clinical research is vital worldwide for drug companies, regulatory bodies and consumers alike. Mexico has all the attributes to become a hub for research in the Americas. This chapter will present interviews with the labs and contract research organizations that undertake the research and will examine the obstacles and opportunities for Mexico to attract more investment in this area.
157
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CHAPTER 7: CLINICAL RESEARCH & TESTING 160
ANALYSIS: Demographics Among Keys to Clinical Research Success
162
VIEW FROM THE TOP: Arturo Rodríguez, Infinite Clinical Research and ACROM
164
INSIGHT: Israel Vega, PRA Health Sciences
165
VIEW FROM THE TOP: Ciro García, Accelerium Clinical Research
166
VIEW FROM THE TOP: Cecilia Moreno, PPD
José Viramontes, PPD
167
INSIGHT: Annette Ortiz, Epic CRO
168
VIEW FROM THE TOP: Melissa Rosales, RM Pharma
169
VIEW FROM THE TOP: Karen Hahn, ICON
170
VIEW FROM THE TOP: Héctor Ávila, Cecyc Pharma
Mezly Rodríguez, Cecyc Pharma
Diego Ávila, Cecyc Pharma
172
VIEW FROM THE TOP: Abel Hernández, ANCE
Yoloxóchitl Macías, ANCE
173
VIEW FROM THE TOP: Carlos Pérez, NYCE
174
VIEW FROM THE TOP: Sonia Pérez, UDIBI
175
VIEW FROM THE TOP: Andrés Ferrara, Analitek
176
ANALYSIS: Authorized Third Parties Ease Registration Backlog
177
ROUNDTABLE: What Must Mexico do to Become a Clinical Research Hub?
159
ANALYSIS
DEMOGRAPHICS AMONG KEYS TO CLINICAL RESEARCH SUCCESS Mexico is trying to scale up its clinical research by taking
Mexico already has a foothold, standing
advantage of its natural traits: a large and diverse population,
with the leaders in health sector R&D
supportive regulatory authorities and competitive
among the countries participating in KPMG’s
operational costs
Competitiveness Alternative 2016 Study. In clinical research, it is strongest on T2D,
With its diverse demographic profile, a vast pool of
landing the top spot on the KMR Group Index and among
potential volunteers and widely recognized regulatory
the top three for arthritis.
arm that is bent on speeding up processes, Mexico According to a report by Zion Market Research, the CRO
clinical research and drug testing. Despite its numerous
market was worth US$34 billion in 2014 and is expected
advantages, the country remains on the outside looking
to be valued at US$59 billion in 2020. Pharmaceutical
in. It carries out just 1 percent of global clinical trials,
manufacturing companies in emerging countries in Asia-
about 2,850, according to clinicaltrials.gov.
Pacific, Latin America and Eastern Europe are responsible for most of the outsourcing activities due to the large
To move Mexico up the ladder, the government is working
population of treatment-naive patients, low labor and
with regulators and industry associations to promote
manufacturing costs and a skilled medical workforce, the
improved protocols, speed up processes and boost
report states.
recognition of the country’s strong attributes, including a skilled but economical labor pool, to attract investment
PATIENT RECRUITMENT OPPORTUNITIES
and help establish itself among the sector’s elite hubs.
Mexico has a diverse population of 121 million inhabitants
While there remains a long way to go, the establishment
and has more than 10 cities with over 10 million
of a framework agreement in 2017 to promote clinical
inhabitants, providing a large pool for recruitment. “The
research and the clear emergence of authorized third
big international pharma companies have demonstrated
parties, established in 2014 and now coming into their
their interest in the available patient pool, which offers a
own, has created an air of optimism.
substantial opportunity to accelerate their research,” says Francisco Corpi, Latin North Regional Director of Elsevier.
“The creation of the authorized third-party system was a great decision. The fact that the government accepted that its
To take advantage of this favorable demographic, President
internal structure could not deal with the volume of demand
Peña Nieto signed a collaboration agreement in January
was a good move,” says Carlos Pérez, Director General of
2017 with COFEPRIS, SAT, CANIFARMA, IMSS, ANAFAM
NYCE, an authorized third party that works across sectors.
and AMIIF to promote the development of protocols for health research, opening the door to new opportunities
THE COST OF R&D SERVICES COMPARED TO THE US R&D servicesInternational results (US=100.0) (US=100.0)
for the industry. According to the Ministry of Health, this agreement will make the most of the potential available of more than 83,000 doctors, 459 researches, 155 nurses,
100 88.1 87.2
84
80
1,786 medical units and about 62 million IMSS members 79 77.9 77.6
and 487,000 registered with ISSSTE.
74 72.3
60
55.3
According to Corpi, the possibility of finding volunteers in Mexico has been considered a key factor for bringing clinical research to the country, although, he believes there
40
is a concern from regulatory agencies and policymakers regarding the safety of patients. “While both Big Pharma
20
corporations and policymakers here in Mexico are still Mexico
Canada
France
Australia
Italy
Germany
Netherlands
Source: KPMG
Japan
figuring out the most adequate formula for success, we UK
0
US
160
has all the ingredients to become a hub for global
see many clinical trial opportunities lost to other countries in the region. The challenge is not just the bureaucracy of policy but it is even at the infrastructure, personnel and information level,” Corpi adds.
EASING APPROVAL TIMES
studies. “There are not many international phase I studies
In May 2017, Julio Sanchez y Tépoz said during a forum
brought to Mexico, in part because the research process
with AMIIF that COFEPRIS is working very closely with the
requires higher quality standards and a higher degree of
industry to create incentives for investment. New research
sophistication and organization,” García says.
protocols allow product approvals within 45 days, making the sector more competitive. José Viramontes, Director
INDUSTRY TRENDS
of Remote Site Management and Monitoring of PPD,
While overcoming obstacles, the country must also keep
said 2016 was an excellent year for Mexico in terms of
up with prevailing trends such as biotechnology, an area
clinical research since regulation became more consistent
that has captured the attention of many industry players.
with the company’s internal processes. “The year closed
According to ProMéxico, there are 406 companies in
with a meeting between the authorities and associations
Mexico that develop or use modern biotechnology
during which a few changes to the law were proposed.
and 33 percent of those operate in the health industry.
For example, Mexican law requires the involvement of
“It used to be that only 20 percent of diseases were
three committees: ethics, research and biosafety. One
healed with biotechnology, but now pharmaceutical
proposal seeks to include only one committee, which is
companies want to treat other diseases like diabetes and
an approach comparable to the rest of the world. Another
cardiovascular with these types of drugs,” says Annette
consideration is to run processes in parallel rather than
Ortíz, Director General of Epic CRO. The main benefits of
sequentially, which can help shorten approval times.” He
this technology are personalized treatments, reduction
added that the purpose of these changes was to support
of adverse effects and higher control of the disease
industry efforts to bend both costs and the time required
for both patient and physician, she adds. Nevertheless,
for drug development.
companies are concerned that although the new pharmacovigilance standard developed by COFEPRIS
Authorized third parties, companies certified by
controls the chemical medicine, it does not respond to
COFEPRIS to support authorities with sanitary control
the need for biotechnology.
and vigilance, have also played a significant role in speeding up approval times. There are 122 authorized testing laboratories, 62 units of interchangeability and bio-comparability and 26 verification units. “We have authorized a series of third parties to be much faster in clinical authorizations, which will allow Mexico to become a center of clinical research,” said Rafael Gual, Director General of CANIFARMA.
STRATEGIC LOCATION It helps to have the world leader in clinical research as
The global contract research organization market is expected to reach a value of US$59 billion by 2020
a next-door neighbor. The US conducts about 103,000 studies, says data from clinicaltrials.gov. According
Another industry trend is the need for e-services to
to ProMéxico, the Mexican population suffers chronic
manage information that can be used for preventive
conditions similar to those of Americans, which helps
medicine or the development of biotechnological drugs.
conduct studies.
As mentioned by Carlos Oviedo, Director General of Grupo Diagnóstico Aries (GDA), Big Data applications
For these reasons, among others, Mexico could become
should translate into timely disease prevention. “In this
a reference for the evaluation of biosimilars worldwide
area, we would like to cooperate with local governments
due to its geographical location and the fact that many
and companies by sharing all the information we gather
countries are seeking to access other markets, says Sonia
to increase prevention. The Ministry of Health is the
Pérez, Executive Director of UDIBI. “The knowledge we
appropriate entity to use this information for the benefit
gather when we perform a detailed evaluation might
of Mexican citizens,” he says.
be useful in developing innovative molecules. Mexico has great potential but our innovation system is not
Mexico’s attributes demonstrate it has great potential to
articulated,” says Pérez. Similarly, Ciro García, Director
develop research. Some companies, such as Sanofi have
General of Accelerium Clinical Research, believes
already taken advantage of the local opportunities. The
conducting early phase clinical research could result in
leading pharmaceutical company has 35 active studies in
significant opportunities for Mexico, although there are
Mexico, making it the second-most important clinical research
constrains that are impeding the arrival of these types of
unit after India for Sanofi’s emerging economies markets.
161
VIEW FROM THE TOP
LEADING THE CLINICAL RESEARCH CHARGE ARTURO RODRĂ?GUEZ Director General of ICR and President of ACROM
162
Q: How is Infinite Clinical Research (ICR) fulfilling its mission
back into the country because that amounts to importing
to be an outsourcing leader in the pharmaceutical industry?
tissue. Covering all these elements under one umbrella would
A: To meet an objective it is necessary to understand the main
increase security, productivity and reduce response times.
requirements of the industry, including regulation. We are continually attentive to possible changes or lines that could
Q: Regarding pediatric care, in which main therapeutic areas
be worked on to achieve these updates and improvements.
are you concentrating research?
We do this by participating in all the regulatory events held
A: In pediatrics, our studies are mostly in vaccines and
by COFEPRIS and the National Commission of Bioethics
developmental or growth conditions that require growth
and International Commerce in combination with our day-
hormones. The challenges we face are that the researcherâ&#x20AC;&#x2122;s
to-day experience in working with the authorities. Any alert is
profile must be much more focused on the therapeutic
immediately communicated to our clients and we implement
area involved, while patients are seen in more specialized
it in our processes. Through a corrective and preventive
institutions and finally there is not much availability of these
action plan we remodel our activities and strive to always
medicines. Also, children are under the protection of their
be at the vanguard of what is happening. With the advantage
parents and, because babies and children are fragile, parents
of working hand in hand with ACROM, which participates
do not allow them to participate in research protocols. Our
directly in the revision and elaboration of process guides,
main strategy to convince parents is to explain the benefits
we are ready when new laws come into force.
of the medicine for the patient. The most important point is to be clear and open, explain that trials are not black and
Q: What particular regulation is ICR lobbying to establish
white and highlight the possible downsides in addition to
or change?
the opportunities. This can make a difference in a patient
A: It is not that we want to change a point but we want
participating or not.
to homogenize regulation and see what processes can be carried out simultaneously. When a research center
Q: What are the advantages of performing clinical research
or country is chosen, companies look at the time elapsed
in Mexico over other Latin American countries?
between sending in the first documents and recruiting the
A: Mexico has long wait times but not as long as other Latin
first patient. This is what has left Mexico out of the market
American countries. In Mexico, in line with FDA rules, if an
because we have time frames of over 300 days. Sometimes
efficient rescue medicine is available, trials can be held with
this is due to the authorities, sometimes ethics committees
groups taking placebos. This is not the case in some Latin
while other times it could be due to internal processes. The
American countries. The Helsinki Declaration states that a
internal processes element is what we need to optimize
placebo should not be given to patients but that a drug
because we realized that many days are added to processing
should always be compared to what is available on the
times due to internal delays. Running things simultaneously
market. The downside of this is that researchers will not know
will allow us to reduce this.
the base state of the patient or the efficacy of the product. Researchers will know the percentage of how efficient it is
We are also working with the Ministry of Foreign Affairs to
compared to the available treatment but that treatment itself
achieve greater flexibility for products brought in and out
is not 100 percent effective, therefore you may be getting a
of the country. At the moment, medicine is brought in on
false positive: believing the product works well but in reality,
exceptions but it then becomes a struggle to import any
providing a lesser level of efficacy than that needed by the
supplementary products. We are asking to be able to bring
population. There are cases such as CNS, cancer or high-risk
everything in together through the approval service rather
diseases in which it is not possible to give placebos because
than taking out licenses for each one. Samples taken for
the patientâ&#x20AC;&#x2122;s treatment would be unbalanced and their lives
analysis are another issue because they cannot be brought
would be put in danger.
CLINICAL TRIALS CARRIED OUT IN JUNE 2017 (percentage of global trials) 45 40
41.4%
35 30 23.5%
25 20 15 10
7.1%
6.9%
5
6.4%
5.5%
4.0%
2.3%
0 US
France
Canada Germany
UK
China
Brazil
1.1%
0.9%
Mexico Argentina
0.5% Chile
0.4% Colombia Other
Source: www.clinicaltrials.gov
Another advantage is that doctors here are closer to the
around 60 percent of research takes place in the capital.
information available in the US and are more up to date
The following two states are Nuevo Leon and Jalisco and
on what is needed. They are also better informed about
others such as Durango and Chihuahua are beginning to
new medicines and can thus achieve better results. Central
develop their centers and facilities. Mexico has several types
and South America often receive more medicine from
of climate: forest, dessert and tropical, which enables the
Europe, which is closer in terms of flying hours. The work
research of tropical and rare diseases, further boosted by
methodology in Europe is different. They work with less time
our large population and our urban/rural split.
pressure than in the US, which gives them the ability to work with Central and South America’s processing times.
Q: ACROM is still a young association. What have been its greatest challenges and how has it approached its
Mexico’s main obstacle was that it did not have access to
relationship with the authorities?
public hospitals, whereas in 2016 and 2017 an agreement
A: The first challenge was to create ACROM as it involved
was reached with IMSS and COFEPRIS to open the doors
bringing together companies that were competitors.
to clinical research. The same will happen with ISSSTE and
Finally, the alliance was created and we worked on
other public institutions. This dramatically increases our
creating respect between the partners as what benefits
chances of recruiting patients. In 2016, 80 percent of trials
one will benefit the other. The hardest challenge has been
were carried out in private institutions. We hope to attract
credibility, having both the industry and the authorities
more trials to Mexico, maintaining the amount carried out
believe in us. We are trying to work with CETIFARMA
in the private sector but increasing the amount in the public
to certify companies as ethically responsible, which
sector to achieve a 50/50 balance.
complements the credibility of the association in front of the authorities and the industry. We are interested in
Q: COFEPRIS Comissioner Julio Sánchez y Tépoz told MHR
them seeing we have no issues in covering ethical issues.
he hopes to triple investment in clinical research in Mexico in two years. Is that possible?
Q: What will your priorities for 2017 be in ICR and in
A: I agree with his actions. We are working hand in hand with
ACROM?
COFEPRIS. One of the problems seen in Mexico was the lack
A: ICR has been working hard on developing
of certitude. For example, when Mexico first implemented
pharmacovigilance and risk management. One of the points
certifications, operations and processing times were
of new norms, a global movement, is the need to create
forgotten and they multiplied, which caused clinical research
risk management plans. We require much more specialized
to move away from Mexico. Before this, the number of trials
people than other CROs, this is an opportunity to develop.
entering Mexico was extremely high. The commissioner’s vision is progressive because he is looking at facilitating the
The vision of ACROM is to promote that Mexico has
arrival of trials and not at implementing obstacles, which
credibility, opportunity and could move from being an
gives us a great opportunity to support him.
emerging zone to a country of primary decisions.
In addition, the links between Mexico City and the other states allow fluid communication. To get to Monterrey takes
Infinite Clinical Research (ICR) is a Mexican CRO that has
the same amount of time as getting to the south of Mexico
15 years of experience in clinical trials in Mexico and in Latin
City. By going to other states, clinical research is spread
America. ACROM is the Mexican association of CROs, which
throughout Mexico and capacity is increased although
promotes quality in clinical R&D in Mexico
163
INSIGHT
PROCESSING TIMES SLOWING MEXICO DOWN ISRAEL VEGA Clinical Operational Manager of PRA Health Sciences
164
The paradigm is set: Mexico has the correct infrastructure
trial, due to the health system working differently it is
in place, an ideal mix of ethnicities and research talent
possible to enroll 100 subjects in just one day. “That’s
and a privileged location close to the US and relatively
something we cannot compete against.”
easy to reach from Europe, but despite the hopes expressed by industry insiders in previous Mexico Health
The Mexican government is stepping up its efforts to attract
Review editions, the percentage of global clinical trials
further clinical trials. In addition to speeding up processing
carried out in Mexico is decreasing rather than increasing,
times to become more attractive against other countries.
according to clinicaltrials.gov.
In December 2016 the IMSS modified its terms and conditions for conducting clinical trials, which has sparked
However, the sentiment in the industry remains optimistic
widespread interest among the private sector as the IMSS’
and Israel Vega, Clinical Operational Manager of PRA Health
large population of beneficiaries is an ideal patient base for
Sciences, believes that the trend will pick up. “We should
carrying out sponsored clinical trials. IMSS, the country’s
have more than 1 percent of trials. We are close to the US,
largest health institute, reports that as of May 31, 2017, it
so we could act as a hub for processes that
had 19.04 million affiliated workers. “Over
are currently being done in Panama,” he says.
the past year the agreements we have with
PRA Health Sciences is a US-based CRO with 41 years of expertise in clinical research, phase I-IIa, phase II-III, post-approval, safety and risk management, biosimilars, rare diseases and oncology. It operates in over 80 countries and
1.1%
the proportion of global clinical trials Mexico performs
is one of the largest CROs in the world.
public institutions have changed: we are now able to work with IMSS,” Vega says. He explains that the CRO will work through the department of research at IMSS, contacting researchers centrally. Researchers will not be able to carry out more than two active studies at a time.
According to clinicaltrials.gov, Mexico performs only 1 percent of global clinical trials, whereas the US carries out 42 percent
IMSS clinical trials will mostly focus on treating the
and Brazil 2 percent. Asia performs 15.4 percent compared to
conditions that weigh down a large proportion of the
5.5 percent in Central and South America and the Caribbean.
population and thus the institute, such as diabetes, cardiovascular diseases and cancer. “They also have the
“Mexico usually does very little phase I testing, that is done
potential to conduct rare disease trials,” Vega adds. “I
elsewhere. We concentrate on phase II and phase III,” says
think that starting to work with IMSS in 2017 will be a
Vega. He explains that despite faster timelines in Mexico
big boost to the sector. We will get a lot of patients and
over the past few years, there is yet work to be done.
quick results. If we focus on not losing quality, then it could be the first step toward opening up the market.”
“Although timelines have been improved, it still takes us
He adds that the industry has seen increased interest
six to seven months from receiving the protocol to begin
in Mexico from Big Pharma and that negotiations have
enrolling subjects in the first site. In the US, this can be done
already begun to conduct clinical trials with ISSSTE.
in two to three weeks. In Guatemala or Panama, it can be started in three to four months,” Vega says.
Vega also does not believe that the general economic fluctuations of 2016/2017 will keep the industry down. “Peso
It is not just the timelines, Vega adds, it is the system.
depreciation will probably not impact the attractiveness
Brazil, for example, remains an attractive destination
of Mexico as a destination for clinical trials because most
because although it takes 11 to 13 months to set up a
budgets are still negotiated in US dollars,” says Vega.
VIEW FROM THE TOP
MOVING BEYOND THE BASICS OF CLINICAL RESEARCH CIRO GARCÍA Director General of Accelerium Clinical Research
Q: Given the speed of innovation across sectors, what is
jettisoned even faster. Any failure of this process may
the state of clinical research today?
represent potential losses for pharmaceutical sponsors.
A: There is a new trend in biotech drugs and personalized
We are trying to attract early phase studies to our state-of-
medicine. Biotechnology has made it possible to create
the-art phase I unit and show that Mexico is now capable of
therapies focused on specific mutations or biomarkers. In
delivering results comparable in quality with the other phase
addition, it is also now common to evaluate participant
I units in the world. In fact, we are pioneers in conducting
genotypes in clinical trials because drugs have different
international phase I trials in complex therapeutic areas
interactions depending on genetics. A drug dosage that
such as oncology. We are one of the few centers in Mexico
works well for the Asian population might have different
that has the infrastructure and organization to hold phase
results for Latin Americans. The trend is to understand the
I or first-in-human studies sponsored by the international
effect of a drug among different groups.
industry. One of our strategies is to bring more phase I trials to Mexico. We have been moving forward and we are
Q: What is Accelerium Clinical Research doing in line
now working with multinational CROs to create enough
with this trend?
confidence to bring this process to the country.
A: As we increase our work in more complex clinical trials, we are able to assume the level of sophistication
Q: What system do you use to protect patient information?
demanded by the industry. The international requirements
A: We have designated restricted areas with high-security
for conducting clinical trials are becoming increasingly
digital access controls to protect physical records and
stringent. Consequently, we have had to enhance our
any patient-related information. Each system requires
own infrastructure and organization to stay in line with
a validation to store the patient data. We comply with
these trends. Previously, clinical research could have
the Code of Federal Regulations Title 21 for electronic
been easily performed in a small doctor’s office with
information, which requires us to use a validated system
basic equipment. To keep up with quality and safety,
that meets those regulations. We must understand that
regulators now require more complex infrastructure
research is not something random. It requires attention
and controls. The new generation of drugs is inherently
and consideration of local and international regulations.
more complex, warranting more thorough studies and increasingly stringent procedures.
Q: What results did you see in 2016 and what are your plans for 2017?
Q: To what extent is it possible to start developing phase
A: 2016 was an important year for Accelerium. We saw
I research in Mexico instead of focusing on solely phases
significant growth in the number of projects we worked on
II and IV?
across therapeutic areas. We recently started operating
A: Early phase clinical research is another important area
our second phase II – IV research center south of the
of opportunity in Mexico. There are not many international
state of Nuevo Leon. We plan to focus on leveraging
phase I studies brought to Mexico, in part because the
technology to enhance the productivity and efficiency of
research process requires higher quality standards and
our operations, while overall helping the industry increase
a higher degree of sophistication and organization. The
access to larger patient populations.
strategic and tactical work done in phase I has a greater impact on downstream phase II and phase III costs than any other factor, and has the greatest impact on drug
Accelerium is a Monterrey-based research center dedicated
development success. This is a critical point in the research
to the pharmaceutical and biotechnological industries. It
process. Drugs that should go forward need to move ahead
operates trials from phase II to phase IV and aims to contribute
quickly and drugs that should be abandoned should be
to scientific research and development in Mexico
165
VIEW FROM THE TOP
EXPANDING TO REACH PUBLIC AND PRIVATE ENTITIES
Cecilia Moreno Associate Director of Clinical Management of PPD
166
JosĂŠ Viramontes Director of Remote Site Management & Monitoring of PPD
Q: In 2016, you told MHR you had plans to open more centers
is still very similar to what it was before. Also, we will
in Mexico. To what extent have you fulfilled these plans?
probably participate in more risk-management studies
CM: We are opening an increasing number of centers in
or observational studies going forward.
Mexico to work with the private and public sectors and in new therapeutic areas, such as vaccines. Additionally, IMSS
JV: Although the section of the NOM that deals with
is modifying its internal processes to allow more interaction
the reporting of adverse events in clinical trials has seen
with pharmaceutical companies and has changed its
a few slight modifications, it has not had a substantial
contract template to better support the industry. We
impact. It has more of an impact on the spontaneous
already have started working with the agency in oncology,
adverse events for medicine already commercially
allowing patients with less prevalent diseases to be enrolled
available. Most of the industry is working on how to
in clinical trials. We are also working with IMSS on vaccines
implement these changes in their internal processes.
for infectious diseases.
There is a Mexican association of pharmacovigilance that holds regular meetings in which the details of the new NOM
Q: What are the specific challenges in working with
are discussed. They are in contact with the authorities.
vaccines? CM: One of the main challenges of working with vaccines is
Q: Looking to the future, what are PPDâ&#x20AC;&#x2122;s goals for
the number of patients who have to be recruited. Studies can
Mexico?
include hundreds or thousands of patients, so centers have to
CM: Our goal is to continue growing. National regulation
have the necessary infrastructure and personnel to support
has been beneficial to our industry and over the past few
those needs. Also, vaccines are often for endemic diseases,
years we have seen an improvement in approval times and
many of which are tropical like zika and dengue and occur in
greater willingness to strengthen and improve regulatory
Mexico, so there is an area of opportunity for these studies.
processes, which has made Mexico more competitive when compared to the rest of the world. COFEPRIS
JV: Another challenge is finding healthy volunteers and
continues to improve its processing time frames and
conducting the follow-up to ensure the vaccine is effective.
research sites continue to operate at increasingly higher
The informed consent applied to healthy volunteers is
standards, which improves overall recruitment times.
different than that used to invite patients who are conscious of their disease. An additional factor to be considered is that
JV: 2016 was an excellent year for Mexico in many ways.
in many cases vaccine clinical trials include children.
The regulatory authorities have brought much greater consistency to their internal processes and they have
Q: What impact has NOM-220 had on your Mexican
greatly expanded their interactions with companies.
operations and what changes do you expect from future
The year closed with a meeting between the authorities
modifications?
and associations, during which a few changes to the
CM: We have not seen much impact but we are waiting to
law were proposed. For example, Mexican law requires
see what new follow-up activities result from the vigilance
the involvement of three committees: ethics, research
plans. The reporting of adverse events in clinical trials
and biosafety. One proposal seeks to include only one committee, which is an approach comparable to the rest of the world. Another consideration is to run processes in
PPD is a US-based contract research organization present
parallel rather than sequentially, which can help shorten
in 47 countries and working in early development, clinical
approval times. The purpose of these changes is to
development, post-approval studies and consulting, among
support the industryâ&#x20AC;&#x2122;s ongoing efforts to curb the cost
other areas. It has been present in Mexico since 1998
and time curve of drug development.
INSIGHT
INNOVATION BLAZES TRAIL TOWARD PERSONALIZED TREATMENTS ANNETTE ORTIZ Director General of Epic CRO
The development of a biotechnology drug industry is
concern for clients. As a solution, Epic CRO has a two-
setting up a panorama of innovation in the country that
server protection system.
could provide personalized treatments and better disease management. However, without strict data collection and
A large obstacle for this industry is the lack of regulation.
regulation, patient health could be endangered.
Ortiz says that COFEPRIS was expected to prepare regulation on this subject for 2016. However, “companies
“It is not easy,” says Annette Ortiz, Director General of Epic
that were supposed to start clinical research realized
CRO. Companies like Epic CRO are offering clinical research
COFEPRIS was not yet ready to answer many of the
solutions to anticipate the changing terrain. The company,
questions they had.” She says that there is a big difference
which works in pharmaceuticals, nutrition and medical
between traditional pharmacy and biotechnology, which
devices is also highly interested in the biotech industry and
requires an understanding and new technology that is not
in acquiring clients that want to start clinical trials for drugs
common in the Mexican pharmaceutical context.
with a biological basis. Ortiz believes it will take at least one more year to complete Epic CRO has 10 years of experience conducting clinical
the regulation. Meanwhile, the company’s plan is to
trials in Latin America, providing integral and tailored
gain as much knowledge as they can from each of their
services to local and foreign clients looking for clinical
biotechnology trials and get a full understanding of how
development to take their products to market.
each molecule works to sharpen each protocol, so when the time comes they will be prepared to explain to patients the
“It used to be that 20 percent of diseases were healed
benefits of this new technology.
with special chemistry, known as biotechnology, but now pharmaceutical companies want to treat other diseases like
Epic CRO's priority is to push the industry to do clinical
diabetes and cardiovascular with these types of drugs,”
research. “The challenge I find is that Mexican companies
Ortiz says. The main benefits of this technology are
want to bring products onto the market as fast as they
personalized treatments, reduction of adverse effects and
can so they try to take shortcuts to get approvals,” she
higher control of the disease for both patient and physician.
says. CROs could help prevent this issue by analyzing the studies before they are performed and suggest potential
Epic CRO clinical research focuses on vaccines, diabetes,
modifications in case a more complete trial is required.
respiratory and gastric disease medication. The company has developed trials for influenza and hepatitis C vaccines,
This could be an issue for local companies. Epic CRO has
in addition to a formula for chromate testing to detect
done clinical development for companies from Spain and
lymphatic cancer. However, Ortiz recognizes this traditional
the US that want to enter Mexico and are taking the right
clinical research process completely changes when dealing
steps to perform trials for their products here. “Mexico
with biotechnological drugs. “Data collection becomes a
is one of the countries in Latin America that is trying to
new challenge when we need to consider more factors
speed the authorization process without cutting steps and
because any patient behavior can vary the molecule’s
reviews” although international companies are more open
effects. During regular clinical trials we have two patient
to these requirements.
groups to observe, now we have to control every patient separately,” she says.
“Biotechnology represents a strong commitment for us. What we are doing in research right now will show results in
Given the complexity of the trials and their cost,
10 years and all the data you are accumulating will probably
pharmacovigilance and techno-vigilance become a main
save lives,” Ortiz concludes.
167
VIEW FROM THE TOP
SUCCESSFUL RECRUITMENT FOR MORE SPECIALIZED STUDIES MELISSA ROSALES Director General of RM Pharma
168
Q: What advances has RM Pharma made in its operations
the profiles to see who has the best potential for the study
over the past year?
and we call them. We also advertise in newspapers and
A: Our main achievement over the last year was the
we hold talks with first-contact doctors to provide them
establishment of an alliance with Bio Clinica, an American
with information on new molecules and to see if they are
company, which enabled us to be part of a global network
interested in participating or in referring patients. For
of research sites focused on making clinical trials a success
pediatric studies, most of the recruitment is achieved by
and to diversify our activities in different therapeutic areas.
referral from specialists so we distribute brochures among pediatric associations, explaining the type of conditions
This year, we will launch a protocol for dyslipidemia that
we are looking for. It is hard to find the ideal patient for
could help prevent heart attacks, based on a new model
every study, which is why we have to work every day to
to reach a large number of participating patients. We are
expand our database.
also starting to work with children for a local allergic rhinitis study and with an international study on pediatric psoriasis.
Today, inclusion criteria is increasingly complicated, so when we need samples of 10 patients with certain
Q: How has the new pharmacovigilance NOM impacted
characteristics, we need to contact at least 300 patients
RM Pharma?
from our database because there will be criteria most
A: We are focused on pharmacovigilance follow-ups and we
of them do not meet. However, we always keep those
report side-effects and serious adverse events and submit
patients in the database and continue to perform follow-
real-time reports. We provide training to our doctoral staff
ups because we know that at some point they may be
on the normâ&#x20AC;&#x2122;s updates so they can be aware of patient
the patients we need for a study.
progress and report any changes to COFEPRIS. Q: What added value does RM Pharma bring to the health However, we will need at least another year to completely
industry over other companies?
integrate the norm, because we have to invest more in
A: Based on our client feedback, one of our values is the high
educating patients so they know there is a line they can
quality of data we provide to the industry, rapid recruitment
call if they have an unusual reaction and we need to train
and our high rates of patient retention in studies, which is
first-contact doctors and laboratory staff to register all the
around 93 percent. Some of our studies have lasted four
important data when patients call.
years and the patients are still participating. This is achieved through the quality of the medical service we provide and
Q: What strategy does RM Pharma employ to recruit
the experience of our doctors.
volunteers and how difficult is it to find the ideal patient for studies?
Q: What are your goals for 2017 and how will you reach them?
A: Our database grows mainly through references from
A: Our goal is to start providing more CRO services, such
existing patients. To keep them engaged we provide free
as monitoring of clinical studies, capturing electronic
check-ups. A specialist evaluates them and creates a
databases and protocol reporting. We will start reaching
patient profile, so when we start a new protocol we check
out to national labs that require more local studies, especially with the new pharmacovigilance norm. We have plans to open operations in Queretaro next year, a
RM Pharma is a Mexico City based CRO that performs
region that is growing rapidly due to the automotive and
clinical research in the fields of rheumatology, cardiology,
aerospace industries and we know there will be a need for
nutrition, pediatrics, endocrinology, otorhinolaryngology
more studies because national and international hospitals
and ophthalmology
are settling there.
VIEW FROM THE TOP
EXPOSURE NEEDED TO MAKE MEXICO A RESEARCH HUB KAREN HAHN Director of Clinical Trial Management for ICON
Q: What has shaped ICON’s evolution over the past year?
Q: What techniques can be applied to increase patient
A: It has been a successful year for the company. We
recruitment and take advantage of the possibilities offered
received recognition for the second time as the Best CRO
by the Mexican population?
at the Vaccine Industry Excellence Awards. Last year, we
A: We have a close relationship with patient-recruitment
invested a lot in recruiting the best professionals and
sites and provide quality training to professionals so they can
in having a bigger footprint for our private and public
understand their target population. We perform a close follow-
customers through our Vaccine Center of Excellence.
up and we ensure we choose the right sites through a site
Through this center, we lead research on vaccines for
selection system. There are many recruitment opportunities
infectious diseases and global pandemics. We also
across the country, so we are expanding to reach a population
received the Outstanding Partner Award from Amgen for
we could work with and which is not receiving treatment.
a Functional Service Provider partnership we established a year ago for global project management.
Q: Many people do not know the benefits of receiving treatment through a clinical study. How are you taking this
Q: What is Mexico’s role in ICON’s global operations?
message to more patients?
A: In Mexico, which is ICON’s biggest office in Latin
A: We are designing a campaign with ACROM to explain the
America, followed by Brazil and Argentina, we employ
benefits of clinical research to patients. A few years ago, we
211 people and have high growth expectations. However,
did this for doctors who were not aware of the benefits of
while Mexico and Latin America have a lot to offer, they
working in clinical research. ACROM also approaches many
lack exposure. The region represents just 6 percent of
patient associations to inform them about the research we
the global clinical research market, as attention is usually
want to conduct. The effort to recruit patients is shared
given to the US, Europe and Asia, but we are investing
among all players in the sector.
in strategies and working with associations such as ACROM, AMIIF and the Association of Clinical Research
Q: Where is technology development oriented at ICON?
Professionals (APEIC) to make us more visible to the
A: ICON is committed to developing technology for monitoring
rest of the world. Fortunately, the new administration
based on risk. Our goal is to reach real-time analysis of what is
in COFEPRIS is maintaining continuity, bringing in new
going on in each site, so we do not have to wait till the end of
and good ideas and they are studying models from other
the study to discover there were problems in measurements.
countries’ regulatory organisms to see what could be
Thanks to real-time analysis, we can assess trends and
useful for Mexico.
determine which resources each site needs.
Q: What is Mexico’s value proposition as a potential
Q: Which are the main therapeutic areas in Mexico that are
clinical research hub for international companies?
driving the efforts of CROs?
A: The IMSS now allows clinical studies, which will provide
A: There is a global focus on research in oncology and cardio-
great opportunities for the sector. The institution has a
metabolic areas. However, we are investing to gain terrain in
huge patient population and is also a good source of
late-phase studies through ICON’s new Commercialization
patients with rare diseases that are hard to find in other
and Outcome hub in Mexico.
institutions. In addition, Mexico has a lot of potential in pediatric clinical studies due to the large population of children and the good relationship between doctors
ICON is an international clinical research company founded in
and parents we have identified in previous recruitments.
Ireland in 1990 and present in 37 countries. It operates as an
Therefore, ICON has already developed expertise in
outsourced developer for the pharmaceutical, medical devices
pediatric studies.
and biotechnological industries
169
VIEW FROM THE TOP
AUTHORIZED THIRD PARTIES PROMOTING MEXICO’S RESEARCH POTENTIAL
Héctor Ávila Director General of Cecyc Pharma
170
Mezly Rodríguez Operations and Strategy Director of Cecyc Pharma
Diego Ávila Commercial Director of Cecyc Pharma
Q: What mix of drugs does Cecyc Pharma test?
NOM - 220 demanded pharmacovigilance and NOM - 177
DA: As an authorized third party for COFEPRIS we are
regulated bioequivalence. All three had a regulatory impact
focused on generics but we also test new combinations of
on manufacturing and commercializing drugs in Mexico.
drugs, which is becoming more common in the industry.
Cecyc Pharma is in the medical research area, in which we
We offer the pharmaceutical industry registry renewal
evaluate the efficiency of drugs. Laboratories may not have
and elaborate new registers with the development of
much clarity on the steps they have to follow or the type
bioavailability studies.
of studies they must undertake, especially now when there is a larger variety of studies available, so our mission is to
Q: What are the main regulatory issues companies
help them run the right study.
registering generics face and how are those overcome? MR: COFEPRIS has fixed the processes for each type of
Q: Do laboratories need more regulation or more clarity?
drug. We are a third party authorized by COFEPRIS and we
HA: The regulatory aspect is more than covered. When
are its experts on clinical research. The biggest challenge is
COFEPRIS was born, regulation became a headache for
when COFEPRIS regulation does not specify which study
many companies in the industry. However, because of
should be undertaken for a certain drug. That is where we
it, companies became better and Mexican laboratories
intervene and propose which study should be undertaken
gained the option to export because they complied with
to obtain registration. We mostly deal with generics but as
international regulations. Laboratories should make a
a research center we offer advice on other types of drugs
greater effort to adapt to the rules. Sometimes, it can be
like new registrations or combinations, anything that goes
complicated, but at Cecyc Pharma we keep in close contact
in a category that COFEPRIS has not yet determined.
with COFEPRIS to always propose the right study for each case. As an authorized third party, we help companies
HA: In 1998, the Mexican government launched a program
when they need regulatory advice, we become their
to create interchangeable generics. There was a great need
channel to register new drugs. We do the clinical research
in the healthcare sector for affordable and high-quality
that companies need to show COFEPRIS their products
drugs so the federal government started a drug evaluation
are safe and efficient. We are also in charge of dissolution
program and created NOM - 177 for bioequivalence tests.
profiles, clinical phases, protocol creation and analytical
In 2005, an agreement was reached to re-register all drugs
methodology. We specialized in this to offer our clients an
in Mexico. This forced laboratories to guarantee good
efficient solution.
practices and quality providers. Also, registered drugs that were not a reference product or an innovative drug
Q: Previously, a generic could rely on the safety and
had to comply with a bioequivalence test. From 2005
efficiency results of the innovative drug. Is this still the case?
there were also changes in the manufacturing practices:
MR: When a company develops an innovative drug, the
NOM - 059 made producers comply with new regulations,
drug must pass through the phases of medical research to prove safety and efficiency. What the Mexican authority asks of generics is that they prove their bioequivalence
Cecyc Pharma is an authorized third party located in Mexico
with the innovative drug. COFEPRIS asks the manufacturer
City. Its goal is to provide integral outsourcing solutions
for studies done on humans to see if the medicine is
and services to the pharmaceutical industry in the clinical,
absorbed and eliminated by the body in the same manner
analytical and regulatory areas
as the innovative drug. There is no need to do all the
phase studies. What has changed is that there are new
a clinical history and perform a checkup. If they have a
combinations between drugs that are not innovative and
condition like high cholesterol, we offer them treatment
drugs that already exist. We prove safety and efficiency
and a follow-up. By testing our volunteers we can also take
for drugs that already exist or we prove they do not
a look at the population in general.
interact between them. Q: Is it difficult to find healthy volunteers given the Q: How do you determine that two drugs are
burden of chronic diseases in Mexico?
bioequivalent?
HA: Yes, regularly many people come without antecedents
HA: It would be absurd for a national or international
but when tested we discover they sometimes have high
laboratory to repeat the preclinical test that the laboratory
cholesterol or conditions of this type. In those cases,
that approved the molecule already did. There is an efficient
we recommend a diet and ask them to come back at a
international scale to prove that a drug is as efficient as the
future date. For our studies, we interview around 2,500-
original. If I get the same profiles from a manufacturer, I
3,000 people and every year we can see by their studies
assume it will have the same effect. Bioequivalence proof
how the populationâ&#x20AC;&#x2122;s health has changed. The products
takes between five and eight months. All we do is reduce
we tested 10 years ago, now have a different impact on
it to a graphic. The graphic shows the relationship between
the population because people have also changed. It is
the time and quantity of absorption of the drug. With all
important to consider that the Mexican population has
those who participate we show a drug was absorbed in a
particular characteristics given the local diet. That is why
certain quantity in a certain amount of time. The product
COFEPRIS asks for tests for imported products to be
we are evaluating should behave similarly and within
performed on the Mexican population.
the parameters of 125-80. This is an internationally used number that determines if drugs work equally or not.
Q: What are your objectives for the next five years? DA: It is important to keep expanding our services. We are
Q: How do you recruit volunteers for testing, especially
always looking to give more to the industry and become
given advertising restrictions?
a unique company in the sector. We have authorizations
MR: We have a recruitment department in charge of
from COFEPRIS and the Institute of Public Health in
attracting people to participate in our studies and once they
Chile. They are for dissolution profiles, clinical units and
get involved, we follow their progress. All our trials must
clinical analysis. We also provide APIs for the industry,
be done on healthy volunteers because we need to start
pharmaceutical development and advisory, and we are
with a group of people who present similar characteristics
working with biotechnological companies. We have
but who have no illnesses that would influence the result.
clients in Chile, Colombia, Puerto Rico and the Dominican
Internally we have many filters to ensure they are healthy.
Republic. However, we want to work with more foreign
When testing physiotoxic drugs, those that are dangerous
companies that will soon arrive in Mexico because this
or affect health, volunteers should be patients suffering
is an interesting market for them. Also, we want to gain
from the illness the drug is designed to treat. We have
more certifications because it would allow us to reach
developed a database of volunteers who are constantly
more countries so our clients would be able to sell to more
participating. We perform lab tests on them, compile
countries with a single study.
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VIEW FROM THE TOP
TECH ADVANCES MAKE HEALTH INDUSTRY HIGHLY ATTRACTIVE Abel Hernández Director General of ANCE
172
Yoloxóchitl Macías Chief of Health Area of ANCE
Q: What percentage of ANCE’s activities is in the health
Q: How much does ANCE’s technology innovation
sector? Which segment offers the greatest potential?
center in Nuevo Leon contributes to the health sector?
AH: We are mainly focused on security and risk management
YM: We have experience in test laboratories and look
but our key operations are in electro-technology, which
forward to applying this experience to the health sector.
accounts for about 60 percent of our activities, while a
ANCE is defining which products will be the first to be
bit over 35 percent is in rational use of environmental
tested in our labs, because we expect significant growth
resources and 2.73 percent is in the food and the health
in validations, inspections and tests in Mexico and globally.
sectors. We entered the health industry with expertise on
By the end of 2017 ANCE will be performing lab tests for
intelligent regulation. The state must regulate the liberties
the food and health sectors.
of economic players – the possibilities for producers and the needs of consumers – in order to improve the
Q: What will be the focus for health innovations in the
quality of life of its citizens. Mexico is a big consumer of
coming years?
health products like medical devices and drugs. ANCE is
AH: Innovation for hospitals is directed toward intelligent,
betting on medicines because the growth of the health
interconnected medical devices that monitor vital signs,
industry is highly attractive in terms of technological
administer medicine or perform medical interventions. This
development. Moreover, Mexico’s quality of life is improving
is in line with a global trend called assisted life environment.
and the country is among the most attractive regarding its economic and social growth potential.
YM: Biotechnological products are going to be the medicine of the future. Pharmacogenetics will prevent diseases by
Q: Of the services ANCE offers, which attract the most
addressing genetic deficiencies that predispose people
demand?
to certain diseases. Nanotechnologies will also be an
YM: ANCE is an authorized third-party. Medical devices
important area. Small robots will target tumorous cells
represent the largest segment of our health market, about
and administer antitumor medicine directly instead of
80 percent of applications we receive. The most in-demand
administering it in general and damaging both the tumor
service is sanitary registration of innovative technologies.
and healthy cells as some oncologic medicines do.
Q: What benefits can ANCE offer its clients that other
Q: What is ANCE’s contribution to Mexico’s health industry?
authorized third-parties cannot?
AH: We attract attention to the required regulations.
AH: We focus on differentiating ourselves from our
Health is a dynamic sector with expected growth of
competitors through high-multidisciplinary expertise, as
50 percent between 2015 and 2020 in the pharma
multidisciplinary analyses can reduce response times while
segment. If COFEPRIS is saturated with requests for
increasing service effectiveness. Our value proposition
sanitary registrations as of 2017, it will be overwhelmed
is reliability, IT and institutional strength. ANCE also
by 2020. We are in an era of disruptive innovation
implements best practices regarding testing, inspection
and new technologies and developments will require
and certification from its experience with international
a flexible legal framework. ANCE is part of several
compliance-evaluation systems.
regulation and standardization associations such as the National Commission on Normalization (CNN) and the Normalization Commission of the Industry Chambers
ANCE is an association founded in 1992 that provides
Confederation (CONCAMIN). We try to make private
support by certifying industry standards and compliance with
initiatives more pro-active regarding the development of
regulations in industries such as automobile, energy, health
regulations. The private sector will be required to propose
and construction
solutions and options as COFEPRIS becomes inundated.
VIEW FROM THE TOP
DIVERSIFICATION KEY TO GROWTH CARLOS PÉREZ Director General of NYCE
Q: What aggregated value does NYCE offer that gives it a
while medicines were ignored. In 2015, we did not reach our
competitive advantage?
pharma goals. Therefore, in 2016 we changed our strategy
A: Third party organizations create standards for the
and focused on medicine rather than medical devices. It
industry. NYCE has an 18-year-old quality system that
was a challenging decision because drugs require much
relies on the constant improvement of our activities. In
more responsibility and capacity than the other business
our healthcare division, we have three elements to achieve
line. We are working with Pfizer and more organizations
this. First, our management system must control and define
are considering our services, mainly because we provide
metrics to improve our efficiency. Second, we have an
additional benefits. This has given us the opportunity to
internal program called Unifying Hands and Efforts through
register several specialized operating cells during 2016.
which collaborators suggest initiatives. Our third element is the satisfaction surveys we send to our clients, where we
Q: What does NYCE need from COFEPRIS to improve
measure market perception and receive feedback. These
its operations?
three improvement tools have helped us achieve an average
A: The creation of the authorized third party system was
of 97 percent customer satisfaction.
a great decision. The government’s acceptance that its internal structure could not deal with the volume of demand
All 330 of our staff members have been trained in client
was a good move. We have 22 years of experience as a
service. In fact, we trained COFEPRIS staff on the same
standardization organism, 21 as certification institution and
subject because it is one of our strengths. Our last COFEPRIS
20 as a verification unit. However, we recognize some third
audit was excellent, which motivated us to participate in the
parties are facing operational constraints. The new NOM-
National Quality Price. Those are elements that give us a
057 regulates the pharmaceutical industry but authorized
competitive advantage against other companies.
third parties are not allowed to provide certificates under this standard. NYCE is allowed to verify food content labels
Q: How can you improve processing efficiency for your
for the alimentary industry but is not authorized to verify
clients?
nutritional information, despite the fact that we operate
A: In January, we launched an online system to assist clients.
in the health industry. If we want integral solutions for the
We have already implemented electronic tools for many of the
market, we should be able to offer both services.
other industries we work with. In oil and gas, electronics and communications we have a secure online depository to protect
Q: What are NYCE’s plans for the near future?
information. If an industry accepts our security measures, a
A: We want to grow our market access by regionalizing our
confidentiality agreement and responsibility for information
services. We can help organizations export their products
management, companies will not have to be present physically
to other countries of the Pacific Alliance. Hypothetically
for every procedure they need. They will save time and money
speaking, if COFEPRIS closes an agreement with the
with us. We are an organism that certifies information security
regulatory authorities of the Pacific Alliance countries,
through ISO 2700. We are certifiers of personal data security,
authorized third parties would be able to provide services
giving us another competitive advantage.
to the whole region. It is an idea that may help many players in the system.
Q: What type of healthcare companies are you focused on certifying? A: When we first started our activities in healthcare, we
Normalización y Certificación Electrónica (NYCE) is an
noticed a large need for medical devices. We focused
authorized third party that certifies electronics, medical
on that but then we realized that the existing number of
devices, medicines, information security and food labels. It is
authorized third parties fully covered the devices sector,
looking to further expand its operations
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VIEW FROM THE TOP
CHALLENGES, OPPORTUNITIES EMERGING IN BIOTECH SONIA PĂ&#x2030;REZ Executive Director of UDIBI
174
Q: What challenges in implementing the pharmacovigilance
NOMs and pharma regulation. To modify something, we have
NOM in biotech is UDIBI helping overcome?
to work from basic issues. Unfortunately, in Mexico science
A: The law in Mexico is not designed to provide security for
moves faster than law. Everything has to go through a legal
biotechnological drugs because it does not consider relevant
process in which the different chambers have to approve it
aspects related to their nature. The regulations demand
and by the time this happens, science has already moved on.
reports of adverse events but they do not control the post-
A few years ago, the concept of biotechnology did not even
marketing phase to prevent them from occurring. In biotech, it
exist in the law. It took us two years to establish NOM-177,
is necessary to know what happens when the drug reaches the
which is already obsolete. Trying to change it will take us two
open population because patients might present therapeutic
more years and by then it will be outdated. We have a real
failure or develop antibodies against the drug, which is
issue with this regulatory path because we cannot produce
not reversible. Once the organism has produced antidrug
guidelines easily. There is a group of researchers like me who
antibodies, the patient cannot take the drug or another related
are trying to speed up the process for updating guidelines.
drug because the antibodies would neutralize its effect. There
Usually, we follow what is already published by international
should be active vigilance in testing patients taking biotech
agencies such as the FDA and EMA, but sooner or later our
drugs, which would help pharmaceutical companies gauge
normativity must change because we operate differently
when to intervene or when to stop administrating the drug.
from other countries. The WHO is also asking for it and
This is a totally different concept to pharmacovigilance.
COFEPRIS is becoming a more concrete regulatory agency
Therefore, we must make recommendations to COFEPRIS
with a strong group of experts but we lack the dynamism
and other health institutions about the pharmacovigilance of
to improve it. Without clear guidance, we will have to check
proteins because it is conceptually different.
every case individually. If we do not have an established metric for evaluation, the process becomes complex.
Q: What more can regulators and companies do? A: Regulatory institutions and manufacturing companies
Q: What are your expectations for the future of biotech
should take greater responsibility. In other countries, regulatory
in Mexico?
agencies also monitor the market. They do not solely rely on
A: If we become more competitive, Mexico could be a
the information provided by manufacturers. They have fixed
reference for evaluation of biosimilars worldwide due to
verification measures, which is lacking in Mexico because
its geographic location and because many countries are
there is not enough infrastructure to handle the demand.
looking to access other markets. Furthermore, laboratories
Mexico also needs a more consolidated pharmacovigilance
like UDIBI could continue supporting the authorities since
culture. From the beginning of a drugâ&#x20AC;&#x2122;s life onward we should
they do not have the infrastructure required to evaluate new
be checking the patientâ&#x20AC;&#x2122;s reaction to the drug.
molecules. The knowledge we gather when we perform a detailed evaluation might be useful in developing innovative
Q: How can Mexico overcome its biotech development
molecules. Mexico has great potential, but our innovation
limitations?
system is not articulated. In other countries, the academy and
A: Our regulatory system is rigid, pyramidal and based on
the industry have been working hand in hand for years, while
the political constitution, the general health law, the ISOs,
in Mexico the science and technology law was implemented just last year. This will advance technology but laboratories like ours that already know the path of elemental testing must
The Unit for the Research and Development of Bioprocesses
provide an opening to innovative Mexican drugs. We will also
(UDIBI) is a part of the National School of Biological Sciences
start attending technology summits in the US because we are
of the National Polytechnial Institute (IPN) and is an authorized
now working with US companies that have reached out to us
third party
due to our high-quality service at lower costs.
VIEW FROM THE TOP
FINE-TUNING HEALTHCARE ANDRĂ&#x2030;S FERRARA Director General of Analitek
Q: Analitek has a national presence. What is the companyâ&#x20AC;&#x2122;s
create awareness about the creation of new calibration and
strategy to maintain, or even accelerate growth?
accreditation laboratories.
A: Internal growth occurred because our markets and territory were becoming saturated. We looked for new areas
Q: What ratio of sales in your biomedical business is destined
to work in such as life sciences, which is a much larger
for the public sector?
market. In the biomedical field, we want to be a company
A: We have only recently entered the biomedical business
that medical service providers can rely on, knowing that
in Mexico and we mostly cater to the private market. In the
their equipment functions properly and precisely. We
future, we will venture into the public sector to ensure growth
connect international manufacturers to national customers
because the public sector is the main client for these products.
and we offer services to ensure the products, equipment
In our analytical business, our sales are split 50/50, which
and instruments always provide the correct results. In this
is where we will probably end up in the biomedical market.
way, our clients can ensure their patients they are receiving medical services that will improve their health.
Q: What new areas will you look to expand to and what will be your focus in 2017?
All equipment requires a continuous maintenance program.
A: There is still a long way to go in Mexico in health and
This should happen several times per year, depending on
in the medical segment, so focusing new investment in
the piece of equipment. Through use and time, all analytical,
health and life sciences research makes good sense. It
electronic, mechanical and medical equipment may lose
fits with our mission to change and improve the world
their accuracy and calibration, which makes well-designed
through the work of our clients. When they reach their
maintenance programs a must.
goals, we have contributed to future generations having better care and quality of life. Perhaps we will expand
Q: To what extent do you have to convince clients that
our horizons to the north and to the south of Mexico, as
your products represent an investment rather than a cost?
we have done for analytics. In the medical area, I think
A: That is the challenge we face. I believe the authorities
we will first expand to the north of Mexico and then go
ensure that all clinics and hospitals are providing
nationwide. We are also opening an office in Texas for
services correctly. Our challenge is to help our clients
analytics and offer services in Central America.
appreciate that calibration and correct functioning is elemental in healthcare. In many cases, this makes the
Q: What is the impact of the security environment on your
difference between a patient being cured or not. Foreign
logistics operations?
companies develop the technology and the innovations,
A: Our logistics are specific, not massive, so we are little
new products, devices and treatments, but we ensure that
affected by insecurity. What may impact us is the coverage
in Mexico all these devices work at peak performance 100
of our clients in certain territories where we need to be more
percent of the time.
careful. What we need to look after most is not the products that we move, because those are unlikely to be impacted by
Q: Which norms regulate the calibration and maintenance
insecurity, but ensuring that our people can come and go
of devices in Mexico?
in safety. This impacts us a little, but it is not a major issue.
A: We are working with the authorities to elaborate such norms. Stricter regulations and control in this field would ensure better treatment for patients. We are participating
Analitek, founded in 1994 in Monterrey, supplies analytics
in forums and working with EMA and COFEPRIS regarding
solutions for a variety of industries including academia, life
the shaping of these norms. We are also working with the
sciences, pharmaceuticals, research and development and
Mexican Society for Biomedical Engineering (SOMIB) to
chemistry. It is further expanding into biomedics
175
ANALYSIS
AUTHORIZED THIRD PARTIES EASE REGISTRATION BACKLOG All drugs sold in Mexico must be tested by COFEPRIS, which
Tijuana, Nuevo Laredo and Matamoros,
led to a backlog that has since been solved by the creation of
according to ProMéxico. Investment in the
authorized third parties. This has helped the regulatory authority
pharmaceutical sector in the same period
speed up processes and clear the bottleneck for new products
almost doubled that at US$3.2 billion, according to government figures, and in
Only a few years ago, it could take up to two years for a
January 2017, COFEPRIS signed an agreement with industry
company to register a new drug product in Mexico. Today,
players hoping to boost investment in clinical research from
that wait time has been reduced to 20 business days.
under US$200 million to US$600 million per year in the
Behind this turnaround is a decision by COFEPRIS to allow
next two years.
private parties to do the leg work and put products on 176
a fast track to approval. These private parties, known as
According to a COFEPRIS 2014 press release, ATPs had
authorized third parties (ATPs), perform testing and grant
reduced authorization wait times from an average of two
acceptance of a certain category of product, although the
years to 20 business days. “The creation of the authorized
regulatory agency does reserve the right to reverse any
third-party system was a great decision. The fact that the
decision an ATP makes.
government accepted that its internal structure could not deal with the volume of demand was a good move,” says
“As an authorized third party, we help companies when
Carlos Pérez, Director General of NYCE, an authorized third
they need regulatory advice; we become their channel
party that works across sectors.
to register new drugs. We do the clinical research that companies need to show COFEPRIS their products are
To become an ATP, there must be no conflict of interest,
safe and efficient and we are also in charge of dissolution
the lab must have the technical, human, financial and
profiles, clinical phases, protocol creation and analytical
infrastructure capacity to carry out its function and comply
methodology,” says Héctor Ávila, Director General of
with the respective norms of the three classifications of
Cecyc Pharma, an authorized third-party in Mexico City
ATPs: testing laboratories (NMX-EC-17025-IMNC-2006),
that specializes in bioequivalence testing.
units of interchangeability and bio-comparability (NOM177-SSA1-1998), and verification units (NMX-EC-17020-
There are 122 authorized testing laboratories, 62 units of interchangeability and biocomparability and 26 verification units
IMNC-2000). As of May 2017, there are 122 authorized testing laboratories, 62 units of interchangeability and biocomparability and 26 verification units. Each authorization is valid for a period of two years and must then be renewed, ensuring standards are kept. In the first five months of 2017, four ATPs lost their status, which can be regained once conditions are met again. But challenges remain. As science and medicine advance,
The appearance of ATPs has helped to clear the backlog of
regulation sometimes struggles to keep up. “The biggest
pending authorizations. Products are now registered much
challenge is when COFEPRIS regulation does not specify
faster, albeit with the same level of security and testing
which study should be undertaken for a certain drug. That
before being allowed onto the market. The system has
is where we intervene and propose which study should be
been widely praised by industry insiders. “Speeding up
undertaken to obtain registration,” says Mezly Rodríguez,
processes through authorized third parties helped make
Operations and Strategy Director at Cecyc Pharma.
the regulatory procedures more efficient and thus increased the attractiveness of Mexico as an investment destination
The next step, many hope, is for other countries to recognize
for health,” says Geraldine Rangel, Director General of
Mexico’s authorized third parties to improve exporting
Healthlinks, a Mexican firm that provides market analysis
conditions to Central and South America. “Hypothetically
to companies wishing to enter Mexico.
speaking, if COFEPRIS closes an agreement with the regulatory authorities of the Pacific Alliance countries,
Between 2005 and 2014, US$1.7 billion was invested in
authorized third parties would be able to provide services
Mexico in the medical devices sector, mostly in Guadalajara,
to the whole region,” says NYCE’s Pérez.
ROUNDTABLE Mexico has a strategic geographical location, a large and diverse population and competitive operational costs — all the essential elements to become a global hub for clinical research. In addition, in early 2017, President Peña Nieto signed a collaboration agreement with IMSS, COFEPRIS, CANIFARMA, SAT, ANAFAM and AMIIF to promote the development of health research protocols. A greater appreciation of these tools could increase
WHAT MUST MEXICO DO TO BECOME A CLINICAL RESEARCH HUB?
national investment in research and attract international companies. Mexico Health Review spoke with three CROs about the best strategies that can help Mexico become an international hub for clinical research.
Mexico has strong potential to become a clinical research leader worldwide. We
177
have all the elements, such as population, disease profile, ensemble of trained investigators and the local representation of the international bio-pharmaceutical and CRO industries, as well as the support of COFEPRIS and the most recognized agencies worldwide. However, we need to assimilate all the elements together in the most synergistic manner to significantly elevate the total number of the active trials in the coming years. Research sites should orient their activities to quality and performance to attract more research projects. Mexico accounts for less than 1 percent of all clinical research worldwide, a very low rate compared
CIRO GARCÍA Director General of Accelerium Clinical Research
to other countries.
IMSS now allows clinical studies, which will provide great opportunities for the sector. The institution has a huge population of patients and is also a good source of patients with rare diseases that are hard to find in other institutions. In addition, Mexico has a lot of potential in pediatric clinical studies due to the large population of children and the good relationship between doctors and parents we have identified in previous recruitments. Therefore, ICON has already developed expertise in pediatric studies.We have a close relationship with patientrecruitment sites and provide quality training to professionals at each institution so they can understand their target population. We perform a close follow-up and
KAREN HAHN Director of Clinical Trial Management of ICON
we ensure we choose the right sites through a site selection system.
Mexico has long wait times, but not as long as other Latin American countries. In Mexico, in line with FDA rules, if an efficient rescue medicine is available, trials can be held with groups taking placebos. Mexico’s main obstacle was that it did not have access to public hospitals, whereas in 2016 and 2017 an agreement was reached with IMSS and COFEPRIS to open the doors to clinical research. The same will happen with ISSSTE and other public institutions. This dramatically increases our chances of recruiting patients. In 2016, 80 percent of trials were carried out in private institutions. We hope to attract more trials to Mexico, maintaining the amount carried out in the private sector but increasing the amount in the public sector to achieve a 50/50 balance.
ARTURO RODRÍGUEZ Director General of Infinite Clinical Research and President of ACROM
The Genium X3, developed for sporting activities
BIOELECTRONICS & BIOTECH
8
Imagine that after losing a limb, a patient is fitted with a prosthetic that can be moved at will. This is the magic that bioelectronics are bringing to the world. The future of health is now and the main challenge these companies will face is making their advanced technology available to the wider public. These advanced prosthetics will perform wonders but will be proportionally expensive and it is unlikely that public institutions will provide them to patients, especially in light of budget cuts. As new disease trends emerge, new vaccines also are needed. A dengue fever vaccine was released in Mexico in September 2016 and many companies are working on zika vaccines.
Another area explored in this chapter is stem cell procedures. Although they are still subject to case-by-case approval in Mexico, research is ongoing and is led by private companies who extract and store the cells for patients as a way of funding their R&D. Mexico is considered a regional hub for stem cell research as it is subject to less stricter regulations than its northern neighbor.
This chapter will feature interviews from these cutting-edge companies and will feature technology spotlights that highlight their state-of-the-art innovations.
179
CHAPTER 8: BIOELECTRONICS & BIOTECH 182
ANALYSIS: Medicine, Devices of the Future
184
VIEW FROM THE TOP: José Benziger, Ottobock Group
186
VIEW FROM THE TOP: Luis Bravo, Probionics
188
VIEW FROM THE TOP: Francisco Soberón, INMEGEN
189
ROUNDTABLE: What are the Most Relevant Applications for Stem Cells in Mexico?
190
VIEW FROM THE TOP: Jeimy Pedraza, Instituto Ingenes
191
VIEW FROM THE TOP: Martha Luna, RMA Mexico
192
EXPERT OPINION: Rosa María Del Ángel, CINVESTAV
Enrique Villegas, ABC Medical Center
194
VIEW FROM THE TOP: Francisco Kuri, Landsteiner Scientific
195
VIEW FROM THE TOP: Félix Scott, Sanofi
196
ANALYSIS: The Black Hole of Black Market Medicine
197
VIEW FROM THE TOP: Maarten Pouw, DSM Sinochem Pharmaceuticals
198
VIEW FROM THE TOP: Abraham Franklin, Grupo Franklin
199
VIEW FROM THE TOP: Jesús Esparragoza, Biostem Technologies
200
VIEW FROM THE TOP: Victor Saadia, Bioeden
201
ANALYSIS: The Rise of the Superbug
181
ANALYSIS
MEDICINE, DEVICES OF THE FUTURE Biotech and bioelectronics are at the forefront of medical
three diseases from the WHO 2017 priority list
innovation. Ranging from vaccines and stem cell research,
it considers could be the next epidemics: Lassa
to robotic limbs connected to the central nervous system,
fever, Middle East respiratory syndrome (MERS)
this is the medicine of the future
and the Nipah virus. According to clinicaltrials. gov, as of July 2017 there were two ongoing
Biotechnology, from the development of vaccines to the use
Lassa fever trials, 10 for MERS and one for the Nipah virus.
of stem cells, has opened a range of possibilities for medicine and health, including the use of genomics to pinpoint the
Stem cells are another promising area but here too, the
appropriate medicine for a particular disease and improving
segment is embroiled in controversy. Private companies
fertility or ensuring a baby does not suffer from a genetic
that extract and store stem cells for patients as a way of
condition. But strict regulations, high costs and even personal
funding their R&D are leading the way in research; however,
viewpoints stand in the way.
procedures are still subject to case-by-case approval in Mexico. Easier regulations than in the US have made the
182
Despite recent debate over the use of vaccinations, they
country a regional hub for this research for applications
remain among the most significant advances in preventive
as varied as preventing wrinkles and curing cancer. But
medicine of the past century and a half. As new disease trends
here too, outdated laws and lack of awareness despite
emerge, new vaccines are required. Inovio began trials for its
an abundance of information are keeping the sector from
second zika vaccine in June 2017, while Sanofi Pasteur with the
reaching 100 percent potential. “Processes are limited by
US Army; Fiocruz, Takeda and Moderna with Barda; and GSK
laws that are 10-15 years old and policymakers are slow to
with the NIH are working on their own vaccines for the virus.
react to innovation. Mexico is a pioneer in this area so there
A dengue fever vaccine was released in Mexico in September
are fewer countries to copy from and thus more fear, which is
2016, although it is only available privately in Mexico.
normal. This can be solved by reading scientific information, which is available for all, and there are many aspects that
"Mexico was the first country to register the dengue vaccine.
have already been tried and tested. It is a waste of time
We are leaders in emerging economies because we work to
and money to repeat those tests here, since that money
meet the specific needs of patients in those countries. Mexico
could be used for further research. Regulation of dental
played a key role in the investigation of the dengue vaccine
stem cells in particular is scarce and mesenchymal cell
because, among the 15 countries included in the research
regulation is tied to that of hematopoietic cells. COFEPRIS
program, it was one of only two countries, along with the
is conscious of these things and is moving forward. We are
Philippines, that participated in the phase I clinical studies.
not completely blocked by legislation,” says Victor Saadia,
That is why Mexico became the first country to obtain the
CEO and Founder of Bioeden Mexico and LATAM and CCO
sanitary registry: it was a collaborative approach with the
Bioeden USA, a company dedicated to stem cell research.
country’s health institutions that allowed us to establish the necessary processes to comply with the many strict
Like stem cells, fertility procedures are the subject of debate:
requirements of the authorities and to provide them with
for some, these procedures go against God’s will or interfere
solid local data. It was not an easy process but it was also
with nature, while for others they represent hope, either to
the first time that COFEPRIS had certified a new vaccine
conceive or to do so without passing on a genetic condition.
before agencies such as the FDA and the EMA," says Félix
Mexico offers state-of-the-art technology in this field, with
Scott, Director General and Country Chair of Sanofi. "We are
some clinics such as RMA Mexico working closely with the
developing research within our global operations for other
US. Research and Markets puts infertility and obesity as the
vaccines, including one for zika. We have a collaboration
main factors driving demand globally.
agreement with the US Army to conduct research into this type of infection and we believe we are in the best position
In addition, genomic or precision medicine was pegged as
to achieve a fast and efficient solution for zika after our
a global medical technology trend for 2017 by the World
experience with the dengue vaccine. We must apply this
Economic Forum. Markets and Markets estimated the value
know-how to achieve answers as soon as possible."
of the global genomics market at US$12.5 billion in 2015 and expects it to hit US$20 billion by 2020. Mexico’s public
Unfortunately, these medicines take years to develop. In an
institute dedicated to genomics, INMEGEN, is collaborating
attempt to pre-empt the lag between the emergence of an
with international institutions to advance science and with
epidemic and the development of a vaccine, the Coalition
government-owned oil giant PEMEX, that provides health
for Epidemic Preparedness Innovations (CEPI) has selected
services to its workers, to begin implementing precision
such as Mexican company Landsteiner Scientific. “We have
WHO 2017 PRIORITY PATHOGENS LIST FOR R&D OF NEW ANTIBIOTICS
recently opened a new platform in genomic medicine focused
PRIORITY 1: CRITICAL
medicine. Private companies are also working in this area
on oncology. Landsteiner is starting with colon cancer, a
1. Acinetobacter baumannii, carbapenem-resistant
common disease among men in Mexico and the US,” says its
2. Pseudomonas aeruginosa, carbapenem-resistant
Vice President, Francisco Kuri. “The genetic information of
3. Enterobacteriaceae, carbapenem-resistant, ESBL-producing
a population is used to identify genetic traits that can help either control or cure the prevalent diseases. Our industry evolved into personalized medicine but now the discourse has evolved into precision medicine. We know that some drugs do not work equally well in different populations. Genomic
PRIORITY 2: HIGH 4. Enterococcus faecium, vancomycin-resistant
medicine could show what medicines work best according
5. Staphylococcus aureus, methicillin-resistant, vancomycin-intermediate and resistant
to common Mexican genetic traits.”
6. Helicobacter pylori, clarithromycin-resistant 7. C ampylobacter spp., fluoroquinolone-resistant
Imagine that after losing a limb, a patient is fitted with a prosthetic that can be moved at will. This is the technology
8. Salmonellae, fluoroquinolone-resistant 9. Neisseria gonorrhoeae, cephalosporin-resistant, fluoroquinolone-resistant 183
that bioelectronics wants bring to the world. Probionics, the first Mexican company to build prosthetics, is seeking
PRIORITY 3: MEDIUM
approval for its upper artificial limbs that use myoelectric
1.
Streptococcus pneumoniae, penicillin-nonsusceptible
control movement. Össur, an Icelandic company, is working
2.
Haemophilus influenzae, ampicillin-resistant
on developing upper and lower limb prosthetics that connect
3.
Shigella spp., fluoroquinolone-resistant
technology to detect a pulse through the chest muscles to
to nerve endings and thus the brain. “Bionic products are intelligent pieces with microprocessors. In the case of knees, the microprocessors communicate with ankles and feet, so if the patient trips, the knee locks, preventing the patient from falling. This is automatic once a sudden movement is detected. Our most advanced hands are the Michelangelo hands. They have sensors so that when grabbing a cup, the hand grasps with the correct amount of strength not to break it and not spill the contents. If the cup is made of glass, the hand will not shatter it, if the cup is made of plastic, the hand will not squeeze it so hard that it distorts and the contents spill down the sides. It also has a rotating wrist like a real hand,” says José Benzinger, Director General of German market-leader Ottobock. Analysts at Future Market Insights
REVISED LIST OF PRIORITY DISEASES, JANUARY 2017 • Arenaviral hemorrhagic fevers (including Lassa fever) • Crimean Congo haemorrhagic fever (CCHF) • Filoviral diseases (including Ebola and Marburg) • Middle East respiratory syndrome coronavirus (MERS-CoV)
• Other highly pathogenic coronaviral diseases (such as severe acute respiratory syndrome (SARS) • Nipah and related henipaviral diseases • Rift Valley fever (RVF) • Severe fever with thrombocytopenia syndrome (SFTS) • Zika
Source: WHO
Intro Chapeter 8
THE GLOBAL BIOPHARMACEUTICAL MARKET (percent)
pegged the value of the global orthopedic prosthetics market at US$1.6 billion in 2015, 56 percent of which is lowerextremity prosthetics. Amputations caused by diabetes in Mexico are also increasing the need for prosthetics. “In 2017, emphasis should be placed on the prevention of diabetes and its complications. Data from [ENSANUT 2016] show there has been a 175 percent increase in diabetic foot amputations,” says José Campillo, Executive President of FUNSALUD, a private foundation dedicated to improving community health. The future of health is now and the main challenge these companies will face is making their advanced technology available to the wider public, as Benzinger notes. “As we are a cost-sensitive market, price is an issue for bionics in Mexico. Most private insurance companies may cover these types of products if specified but the majority of patients pay outof-pocket. Their cost means they are only available to some segments of the population.”
37.32 Monoclonal
2.39 Recombinant
21.37 Synthetic
2.32 Purified proteins 0.48 Recombinant
antibodies
immunomodulators
20.06 Vaccines 0.59 Recombinant growth factors
Source: Mordor Intelligence 2015
enzymes
proteins
0.12 Others
VIEW FROM THE TOP
PROCEDURE, NOT BRAND, THE ISSUE FOR PROSTHETICS JOSÉ BENZIGER Commercial Director for Mexico and the Caribbean of Ottobock Group
184
Q: What is the current size of the Mexican prosthetics
our main concern because there is no established regulation
market and what is Ottobock’s share?
for importing and selling. COFEPRIS regulations for our
A: Our prosthetics division is our core business worldwide
medical devices are not excessively complex; we need only
and also has the most sales in Mexico. Eighty percent
give notice of import and commercialization. We do not
of our sales are basic products. Diabetes is prominent
need to do any further studies or background checks and
in Mexico and as a result, lower limbs are the most
it is relatively easy to import both high-quality and low-
common amputations. According to the Mexican Diabetes
quality products.
Association, about 75,000 amputations are performed each year because of this condition. Of those, 90 percent are
Our customers have established statu quo operations, but
lower limbs, so foot, below the knee and above the knee
they are also facing other competitors arriving from China
prosthetics are the most commonly required.
that say they can implant at a lower cost. This threatens the credibility of the procedure, not the brand. Many patients
It is difficult to approximate our market share but based
say they do not want a prosthetic because they think it
on the number of tenders we have won and our B2B, we
hurts, or because they think they will not be able to use
estimate it to be 45-50 percent. Of the total number of
them or walk. This reputation emerged due to the bad
amputees in Mexico, we estimate that 7-10 percent receive
experiences some have had with low-quality products.
a prosthetic. Of those, only three quarters will continue to use the prosthetic. The other quarter stops because the
Q: What are Ottobock group’s protocols for rehabiliation?
prosthetic is badly made and causes the patient pain.
A: The protocol we are trying to build handles three rehabilitation schemes: preprosthetic, postprosthetic and
Q: What is Ottobock Group’s relationship with the public
using the limb with the prosthetic. None of these happen in
and private sectors?
reality. When a patient requires an amputation, the patient
A: We participate in both tenders and direct purchases with
is taught to bandage the remains and it is important for
the government. In addition, we support our customers that
the limb to gain form and then start the prosthetic process.
participate in tenders. We do not sell directly to patients
After amputation, the greatest challenge a patient will
in the private sector. The company has a B2B segment
face is the size of the remaining limb as it swells and then
through which we sell to orthotic and prosthetic stores that
reduces but once the rehabilitation process begins it will
in turn sell to patients. We also sell to private insurance
swell again and then reduce to its final size.
companies and thus patients. Generally, 90 percent of our business is B2B. When we win a tender, we provide
We first work on the socket. We create a test socket,
education to the institutions and ensure continuous visits
which is what the patient will use while they get their limb.
to revise the process. Twice a year, and we hold an event
After 30 to 60 days the socket is resized because the limb
with staff and experts from Germany, the US and Brazil to
changes and an oversized socket will cause injury. The
teach new techniques and revise current techniques. We
socket needs to be checked every year. The patient should
visit most of our customers at least twice a year.
go to rehabilitation but usually they do five to 10 sessions and then are left to their own devices.
Q: What hurdles do your products face in the Mexican market and how can that be overcome?
High-tech bionic prosthetics need yearly maintenance and
A: The public market is price sensitive and our competitors
checkups because they have microprocessors and software
from South Korea and China have lower manufacturing
that need upgrading to function fully. Depending on the
costs and quality. Although some purchasers from public
type of prosthetic, necessary maintenance can vary. The
tenders can relate to quality, most relate to price. This is
basic mechanical leg is the most common in Mexico. These
The Genium X3 being used in water
185
are low maintenance, with a lifespan of five to 10 years.
by an orthopedist, an endocrinologist, a vascular surgeon
Maintenance is required only every two to three years
and a psychologist, which is what usually happens in other
because they are sturdy.
parts of the world. In Mexico, the approach is separate. A knowledgeable patient may go to the orthopedist or the
Q: What advantages do bionics have and what are your
vascular surgeon by themselves but they are not sent there.
top products in this area?
Our growth would be based on getting these physicians to
A: Bionic products are intelligent pieces with microprocessors.
agree on a protocol for patients facing amputation.
In the case of knees, the microprocessors communicate with ankles and feet, so if the patient trips, the knee locks,
The actual amputation is usually performed by a surgeon
preventing the patient from falling. This is automatic once a
or an orthopedist. Afterward, nothing happens. In the US,
sudden movement is detected. Our most advanced hands
the following day a prosthetics team is sent to evaluate
are the Michelangelo hands. They have sensors so that when
the patient. It may not result in an immediate prosthetic
grabbing a cup, the hand grasps with the correct amount
but psychologically the patient experiences a 180-degree
of strength not to break it and not spill the contents. If the
turnaround in mindset, instead of having them wake up
cup is made of glass, the hand will not shatter it, if the cup
every morning with only half a limb.
is made of plastic, the hand will not squeeze it so hard that it distorts and the contents spill down the sides. It also has
Q: What other challenges does Ottobock face here?
a rotating wrist like a real hand. The Michelangelo hand and
A: Budget is the greatest challenge because institutions have
the X3 knee are the most technologically advanced pieces.
limited funds for prosthetics. Those that offer them are social
The X3 knee was developed alongside US Navy Seals and
security, Integral Family Development (DIF), the military
it is the knee they use to return to active duty after injury.
hospital and PEMEX in some cases. Many people go to the National Institute of Rehabilitation (INR), which also operates
As we are a cost-sensitive market, price is an issue for
on a limited budget. The foremost solution is for the public
bionics in Mexico. Most private insurance companies may
health system to realize that diabetes is a public health issue
cover these types of products if specified but the majority
in Mexico, so complications of that issue are going to arise in
of patients pay out of pocket. Their cost means they are
the near and not-so-distant future. If they ignore this, it will
only available to some segments of the population.
bite back later. If those 75,000 yearly diabetes amputees are to have a productive return to working life, the system will
Q: What is your growth strategy for Mexico?
have to invest in their treatments.
A: We decided on a basic approach. We need to create protocols that get patients to institutions and help them receive a prosthetic limb. There is a lack of awareness
The Ottobock group consists of four units, including Otto Bock
on the part of patients about how to get a prosthetic. A
HealthCare (medical technology). The prosthetics division is the
diabetic patient, for example, is handled by a doctor or an
largest business unit of Otto Bock HealthCare GmbH, which has
endocrinologist. A lower limb complication should be treated
distribution and service companies in 50 countries
VIEW FROM THE TOP
MYOELECTRIC TECHNOLOGY: THE NEXT STEP FOR PROSTHETICS LUIS BRAVO Director General of Probionics
Q: Which of your products represent the biggest
information to COFEPRIS and now it has to work on it and
opportunity for Probionics?
request more information from us if needed.
A: We founded the company in 2006 with a core R&D 186
business in prosthetics for amputees. We began by developing
Q: When do you think you will have this certification?
technology for a prosthetic hand, then a wrist, a forearm and
A: We need to have a facility with certain characteristics.
then an elbow and a shoulder. We have modified the electronic
The entire production line must be certified by a NOM or an
base of the device and we work with myoelectric technology,
ISO and we need an operations manual. Therefore, once the
an electronic principle that registers the electric flow of the
plant is ready, the auditors will evaluate it and then it takes
skin when the patient contracts a muscle. This electric signal
from eight to 12 months to get the certification. During
goes into an electronic chip, on which we perform a procedure
this time, we need to prove to them that we can produce
to digitalize it, making the muscle the control tool for the
without selling, so it is our responsibility to assume the
patient. We also make rechargeable batteries with a biological
cost of salaries, services and manufacturing for a year with
shape that powers the whole system. We now have a mature
no income. It is incomprehensible that COFEPRIS would
technology that we are working to commercialize. However,
evaluate our production without allowing us to sell.
our products are medical devices that require COFEPRIS certification, which is proving to be complicated because
Q: What are you doing to raise money?
there is no Mexican law regulating this type of device. We
A: We have been to different forums and our project has
are the first Mexican company doing it and are seeking
garnered acclaim for its technological and social impact.
classification for these products.
However, investors do not know the market and they would rather invest in cheap, crude products. Our investors will not
Q: What are you doing to help COFEPRIS establish a
help us until we are certified by COFEPRIS because they are
regulation and reach the next step?
afraid of the risks this business might imply. We appeared
A: We submitted a petition for classification, requesting that
on Shark Tank Mexico in March 2016 and our project raised
COFEPRIS inform us which classification for medical devices is
US$1 million, the most money of the season. Nonetheless,
right for our products because medical devices worldwide are
the money will be handed over upon meeting the conditions
usually classified into three categories based on the risk they
for COFEPRIS certification.
represent for health. Class 1 is a device that is worn outside the body; class 2 is for mechanisms that penetrate the body
Q: What are the biggest technological challenges you face
for a short period, like a catheter, and class 3 are devices
when designing and manufacturing prosthetics?
that penetrate the body long term, like a hip prosthetic. Our
A: Patients have different degrees of injury. There are patients
devices are class 1 because the prosthetics are external and
who have had a wrist amputation while others are at the
the patient can remove them at will.
middle of the forearm or at the shoulder. Therefore, the key was designing flexible technology that could adapt by
We are cooperating with COFEPRIS by providing a detailed
units like Lego pieces to give each patient the module he
description of the materials that make up the product, the
or she requires. It took us four to five years to understand
way the materials are handled when transformed from
this because we started working on a fixed model and had
raw material to prosthetic and on how the prosthetic is
to adapt to each patient. We had to do a complete redesign
activated. One of our main obstacles is that our prosthetics
and we came up with a modular prosthetic model. Thanks
work with a battery and an electron that registers the
to this technology, we will go to market with 34 products, 17
bodyâ&#x20AC;&#x2122;s pulse and COFEPRIS does not regulate this
modules for the right arm and 17 for the left. Additionally, we
directly. The electric and electronic part of the prosthetic
are working on developing prosthetics for children using the
arm is already certified by NYCE. We have presented the
same technology and modules on a smaller scale.
In 2015 we began developing fingers. We believe it will be
they do not have the money to pay for European prosthetics.
easier getting this product to market because globally, fingers
Besides innovating in technology, we will innovate in a
are the most frequently amputated limbs. At Probionics, the
business model that will allow us to sell prosthetics with
amputations we more frequently see are the arms or hands
deferred payments. The prosthesis will be programmed to
of employees who have suffered work-related accidents
power down if the monthly payment is not received. This
or people who were in car accidents. However, finger
will help us give clients easier access to prosthetics.
amputations are the most common because they do not only happen to workers but are also caused by domestic accidents. Q: How and who do you plan to sell and distribute your products to? A: Patients come to us and we manufacture the prosthetic. We work with an orthopedist who creates the mold from the patient so we can provide personalized prosthetics. We
NUMBER OF ORTHOPEDIC TECHNOLOGY CLINICS AND NUMBER OF ORTHOPEDIC TECHNOLOGY WORKSHOPS PER STATE CLINICS/WORKSHOPS Aguascalientes Baja California Baja California South Campeche Coahuila
manufacture the device and train the patient on how to use
Colima
it but when we get into the market we will focus on R&D
Chiapas
and will have a division that manufactures the products and delivers them to our clients. We will reach the public sector by competing in government tenders and the private
Chihuahua
187
Durango Guanajuato Guerrero
through partnerships with select orthopedic houses.
Hidalgo Jalisco
We have six patents: two in Europe, two in the US, one in Mexico and one in South America. This is very important
Mexico City Michoacan Morelos
because it is a negotiation tool we have with the investors.
Nayarit
We have 20 years of exclusivity and commercial exploitation.
Nuevo Leon
We obtained our first patent in 2011 so we still have time.
Oaxaca
However, there are countries that take longer than others. The US issued a patent within four years and, although we
Puebla Queretaro Quintana Roo
simultaneously asked for the same patent in Brazil, we are
San Luis Potosi
still waiting. However, it is important for us to enter the
Sinaloa Sonora
Brazilian market because it has one of the highest industry indexes among South American countries. There is a direct correlation between industry and working accidents. Producing prosthetics is not just about being a design
State of Mexico Tabasco Tamaulipas Tlaxcala
engineer, we have to look at patents, read about state-of-
Veracruz Yucatan
the-art technology, raise capital and comply with regulations.
Zacatecas 0
Q: What are your expansion plans?
2
4
6
8
10
A: We have offers from orthopedic houses in South America, the US and Germany. I think we will start with South America because COFEPRIS approval is valid in those markets. However, to enter the US we need an equivalency with the FDA and for European markets we need one with the European Commission. Q: What will your strategy be to compete with international companies? A: We are going to compete with a good product that
3.5
million people in Mexico have mobility issues
2,000
the approximate number of prosthetics/orthotic clinicians in Mexico
Source: US Aid 2015
meets the quality expectations of an amputee. Also, we will compete on price. American and European prosthetics are very expensive. An upper-elbow prosthetic in the US
Probionics is a Mexican startup founded in 2006 that designs,
costs US$150,000 and very few people have that amount
produces and commercializes prosthetics. Originally starting
of money. There are Syrian refugees entering Europe with
with hands, it has moved up the upper limb to the shoulder and
missing arms and legs. They represent a large market but
uses myoelectric technology
VIEW FROM THE TOP
MEXICO, WORLD LEADER IN GENOMICS FRANCISCO SOBERÓN Director General of INMEGEN
188
Q: How effective would a 4P (prevention, prediction,
medicine will increase drug effectiveness and reduce adverse
personalization and participation) approach be in Mexico,
effects. Soon, when a novel or unusual drug is prescribed or
where prevention is so low?
a person is born, a pharmacogenetics test will be performed
A: Prevention should be analyzed not only through old
and a patient’s genetic profile will last forever.
paradigms but by thinking through new ones. Prediction, the second of the 4Ps, is weaker when based on general
Q: Can INMEGEN train medical professionals in genomic
recommendations rather than personalized predictions
medicine?
generated from genetic traits, the third P. The fourth of
A: The researchers of INMEGEN are both generating
the 4Ps is participation. It is also necessary to consider
knowledge and involved in educational programs. We
the role of insurance companies. Imagine them inserting
offer between four and five courses each semester for both
themselves into personalized medicine and prevention,
graduate studies and as continuous education. INMEGEN is
managing differentiated premium costs and even complete
also putting the final touches on plans for an integral course
health-service provision systems not based on the scheme
in genomic medicine and a series of specialized modules
of a hospital for sick people but based on health-promotion
on the applications of genomic medicine and is involved in
systems entailing some elements of precision medicine.
some undergraduate courses with the School of Medicine
Detection and analysis methods of personalized medicine
at UNAM, but they are insufficient. An obstacle we face is
will be decreasingly invasive and increasingly automatic. This
that specialists cannot do their main residence in genomic
transition will be a matter of lustrums, not even decades.
medicine. Physicians must conclude their main residence before moving on to study an advanced course in genomic
Q: What obstacles stand in front of this transformation?
medicine at INMEGEN. Since INMEGEN cannot offer
A: There is a technological barrier. Technologies and
scholarships at that level, students who take that course
knowledge must mature and be applied. The lag is not often
are usually specialized physicians with a solid income.
in technological advancement, but in the application of molecular diagnoses. There is a regulatory barrier too. The
Q: What are INMEGEN’s priorities for the next two years?
FDA now will no longer approve the use of drugs for cancer
A: Continuing and finishing the characterization of Mexican
exclusively in the original organ but in any cancerous organ
genetic diversity, applying this knowledge to the most
with the same gene as an impeller, which is a complete change
advanced areas of genomic medicine and finding more
because now the basis for cancer treatment is not the organ
correlations between genes and diseases, especially
but a biomarker indicative of several cancers. In Mexico, where
chronic diseases. INMEGEN has a joint project with PEMEX’s
physicians prescribe more freely, physicians use molecular
health services to develop a series of precision-medicine
diagnosis to prescribe for a cancer in another organ. There
services and to study rare, psychiatric and metabolic
is also a cultural barrier because health professionals have
diseases. INMEGEN will correlate genetic parameters with
not yet assimilated genomic medicine and medical faculties
these diseases in the areas of pharmacogenomics and
still follow study programs that lack a genomic medicine
predisposition diagnoses to create prevention programs.
component. With cancer, it is impossible for an oncologist
INMEGEN’s Genomic Diagnosis Laboratory will continue
to ignore genomic issues. In pharmacogenomics, precision
offering a series of genetic tests, including an advanced version of genomic molecular cancer tests. There will be an incursion in the area of infectious disease through research
The National Institute of Genomic Medicine (INMEGEN) is
and data collection of common diseases constituting public
a institute belonging to the Ministry of Health. It is in charge
health issues. INMEGEN expects to provide specific services
of developing projects of genomic medicine for the Mexican
in the most mature areas of genomic medicine: cancer,
population based on its genome
pharmacogenomics and infectious disease.
ROUNDTABLE Hailed by some as a wonder-cure, shunned by others due to ethical concerns, stem cells and their research applications are subject to great debate across the globe. In Mexico, practical applications for stem cells are still granted on a case-by-case basis by the authorities. During the wait for regulation to change, companies are researching potential applications that could be commercialized at a later date. Mexico Health Review asked industry players to explain which potential applications they are researching and foresee for the Mexican market.
WHAT ARE THE MOST RELEVANT APPLICATIONS FOR STEM CELLS IN MEXICO?
The potential applications are still being researched, but in Mexico they have mostly been 189
used for orthopedics, lesions in articulations such as the knee, hip and shoulder or for diabetes. We are running an interesting protocol on autism and stem cells also can be used for neuro-degenerative diseases such as Parkinson’s. There are also intravenous applications to help regenerate tissues and cells, as stem cells have anti-aging properties that are popular with athletes. Stem cells help our cells regenerate. The next five years will be very interesting. Legislation has to change and if the authorities understand that Mexico could become one of the most innovative and leading countries in the area we could make rapid advances. Regulation would need to be more flexible to allow R&D, because in other countries much of the R&D is financed through bursaries and the
VICTOR SAADIA CEO and Founder of Bioeden Mexico and LATAM and CCO of Bioeden USA
academic world. We are limited in this regard in Mexico.
Some studies on spine lesions have provided positive results on the implantation of stem cells in comparison to cases where none were applied. Thus, patients prefer to use these products with the expectation that they may work. This treatment can also be used to treat T1D, which involves an inflammatory process that damages the pancreas. The application of stem cells in this situation can help partially revert the damage to the pancreas and reduce the amount of insulin that a patient will require. These cells are injected in the pancreatic artery to slow down the inflammatory processes. It is theorized that applying them even earlier would even have a better result. However, there are no indications that this treatment is useful for T2D as this is not an inflammatory process
JESÚS ESPARRAGOZA Director of Biostem Technologies Mexico
but a degenerative one. T2D must be handled through a multidisciplinary approach that involves the government, health systems, schools and families.
We are developing cardiac cells for regenerative medicine and working with 3-D printing to replace foot bones. We can print skin for burns and produce cells for laboratory tests, thus avoiding animal testing. Additionally, our experts are developing beta pancreatic cells that produce insulin, taking steps toward treating T1D. Also, we are trying to help people who suffer from macular edema and retinitis pigmentosa by producing cells found in the eye’s rods and cones. From MSC, we can fabricate fibroblast to produce a serum that helps reduce wrinkles and our partners in Spain have already treated 20 patients, 18 of which saw positive results. MSC also have immunomodulating properties, meaning the cells can reduce inflammation and rejection rates. We injected MSC into eight paralyzed rats and after six weeks four started walking again. Parkinson’s and Alzheimer’s are other diseases we want to treat.
ABRAHAM FRANKLIN Director General of Grupo Franklin
VIEW FROM THE TOP
ACCESS TO FERTILITY SOLUTIONS JEIMY PEDRAZA Laboratory Director of Instituto Ingenes
190
Q: What are the main fertility issues in Mexico?
Q: What is your client profile and which services do they
A: Approximately, 15 percent of the Mexican population has
require the most?
fertility issues. Among the infertile population, we include
A: Most of our patients are infertile women with a history
couples who have tried for one year to conceive a baby
of failed treatments in other centers and older patients
through sexual relations without success. Fifty percent
that seek for our services not only due to their difficulty
of the causes of infertility among couples are due to the
to conceive, but because they want to avoid the risk of
woman, 30 percent are related to the man and 20 percent
having a baby with a genetic disease. We also help couples
are a result of combined factors between the two. Among
who are not sterile but who want their baby to be of a
women, polycistic ovary syndrome (PCOS) is the leading
certain gender to create a gender balance in their family.
cause, which is common in Mexican women due to genetic
Instituto Ingenes also provides solutions for people who
or environmental factors. It expressed with irregular cycles,
want to preserve their fertility and choose to store their
propensity to overweight and obesity and it is associated
eggs or sperm. Currently, Ingenes develops around 4,000
to diabetes and cardiovascular diseases. The second most
treatments in its plant of Santa Fe, in Mexico City; however,
common cause is endometriosis and the third is infertility
we also offer integral solutions in our sites of Guadalajara,
caused by age. Other women look for our solutions because
Monterrey and Merida. Our goal is to establish more offices,
they have previously undergone a tube ligation surgery
so we can reach the entire the Mexican population.
and wish to have children afterwards. As for men, the main causes of infertility are genetic conditions such as
Q: Fertility solutions are luxury procedures. What can be
Klinefelter syndrome, testicular cancer and environmental
done to make them available for more people?
factors such as tobacco, drug and alcohol use or high
A: There is not much public health investment in fertility
exposure to radiation or chemicals.
and what is available is not very complex. The technology in the public sector does not compare to that offered by a
Q: What is Ingenesâ&#x20AC;&#x2122; added value compared to other clinics?
private institution. Fertility treatments might seem expensive
A: Any laboratory can buy technology, but without
but you have to put in perspective all the investment in
adequate experience investment means nothing. Through
infrastructure, technology and human capital behind these
the correct education of our staff, we will be able to acquire
types of services. At Ingenes, we offer a variety of financial
the technology and provide professional expertise. We
options to patients. One is BEC Facil, in which the patient
are always looking to participate in international-learning
first pay only part of the program, while we prepare the
opportunities and every year we are seek to be audit by
embryos to avoid any further problems associated to the
international entities, one of the experts that audit us is Dr.
maternal age during that time. When the patient has the
Juergen Liberman, director of the Fertility Center of Illinois.
economic resources to pay for the rest of the program we
We invest a lot in infrastructure, technology and training
proceed to transfer the embryos that were previously saved.
to prepare the best specialists in assisted reproduction, to
We also have a category of product called BEC Plus, insured
provide the best services in all of our branches and we
programs that were to guarantee that if the couple or patient
follow strict security measures regarding the protection of
is not able to get pregnant, we return the investment.
the identity of the gametes and embryos for our patients. Q: What would be the right preventive approach? A: Delayed maternity is among the most important factors Instituto Ingenes is a fertility center providing services in assisted
affecting the fertility of women due to the deterioration of
reproduction in Mexico through in vitro fertilization, gametes
eggs caused by age. Therefore, we must raise awareness
preservation and egg and sperm donation bank. It has clinics in
and inform women about the existence of technologies that
Mexico City, Guadalajara, MĂŠrida and Monterrey
help them prevent the aging of their gametes.
VIEW FROM THE TOP
BRINGING HOPE TO THE FIGHT AGAINST GENETIC DISEASES MARTHA LUNA Co-Director of RMA Mexico
Q: What are the main trends you see in Mexico in infertility?
a mutation onto their offspring. Being a silent carrier for
A: During the past couple of decades, there has been a clear
these mutations means that the given disease will never
increase in the mean age of patients who undergo fertility
develop; however, this person can pass on the mutation
treatments worldwide and Mexico is no exception. Age is one
to the next generation. If it turns out that the partner is
of the most important variables associated with prognosis and
also a carrier for the same mutation, then the couple will
outcome. As women age, there is a significant decline in the
have a 25 percent chance of having an affected child if
number and in the quality of the oocytes or eggs found within
the offspring inherits both mutations. This same couple
the ovary. We need to keep in mind that women are born with
will have a 50 percent chance of having carrier offspring
an established number of oocytes and that there is a constant
and a 25 percent chance having a mutation-free child.
loss and programmed cell death of these eggs that begins before birth and continues until the end of the reproductive
We use a genetics laboratory in Mount Sinai Medical Center
lifespan. Around 40 percent of the patients we treat have a
in New York, capable of detecting 281 autosomal recessive
significant diminution of their ovarian reserve. However, other
mutations. We do not obligate our patients to undergo this
factors such as endometriosis, multiple ovarian surgeries,
testing, although we recommend it, especially if they are
autoimmune disorders, chemotherapy and genetic mutations
planning to undergo In Vitro Fertilization (IVF) because
have been associated with premature ovarian insufficiency.
through pre-implementation genetic diagnosis (PGD) we can analyze the embryos and identify those that are not affected
Q: To what extent do environmental factors impact fertility?
by the analyzed disease.
A: Environmental factors are often accounted for as contributing causes of unexplained infertility. However,
Around 70 percent of our patients decide to get tested;
there has been no clear data regarding environmental
around 50-60 percent of patients are carriers of at least
factors affecting fertility backed up by medical evidence.
one mutation and approximately 1 percent of couples tested
This causal relationship between such factors and the
find out they are carriers of the same mutation. We have
infertility of a couple are seldom well-established. We
had many patients who seek our services to request PGD
are told someone with a healthy lifestyle will most likely
because their naturally conceived child was born with an
have less difficulty getting pregnant but no scientific data
autosomal recessive disease. One current patient, whose
proves that. In that respect, it is important to point out
baby was born with spinal muscular atrophy, found out they
that nutrition can definitely impact fertility prognosis as
were both carriers and now are undergoing an IVF cycle
clear evidence demonstrates that being overweight and
with PGD, precisely to ensure the embryos we transfer are
having metabolic disorders can affect fertility potential
either noncarriers or only carriers but crucially not affected
and obstetrical outcome.
by the same mutation. Some of the most common in the Mexican population are cystic fibrosis, thalassemia, spinal
Q: What percentage of your clients has a genetic disease
muscular atrophy and among the Jewish population we
they hope to avoid passing on to a child? How can RMA
see familial mediterranean fever. However, there is no over-
Mexico help them?
riding trend as we often see patients test positive for a
A: When we talk about genetics, we have to categorize.
variety of extremely rare mutations.
There are chromosomal abnormalities that are associated with oocyte age. Nature is wise so abnormal embryos will not usually implant in the womb, a common phenomenon
Reproductive Medicine Associates Mexico (RMA Mexico)
seen as all women age. There is a second part to genetics,
is widely recognized as a national and international leader in
which are genetic diseases. These are not associated with
state-of-the-art reproductive medicine, led by an integrated
age and represent a possibility of carrying and passing
team of doctors and scientists
191
EXPERT OPINION
VACCINES AGAINST VIRAL DISEASES: MYTHS AND REALITIES Rosa María Del Ángel Chief at the Department of Infectology and Molecular Pathogenesis of CINVESTAV
192
Enrique Villegas Resident in Traumatology and Orthopedics at ABC Medical Center
Viruses are responsible for a number of diseases that
countries to guarantee public health through prevention
constitute significant public health problems in Mexico
measures, as well as the proper and timely diagnosis and
and in the world. It is easy to pinpoint these infections
treatment of patients, epidemiological monitoring for
as responsible for creating the most harm to humankind
detection and control of epidemics caused by viruses.
throughout history. Such is the case of smallpox, which until 1980, the year in which it was eradicated, was one of
The strategies for the control of viral infections are initiated
the deadliest and most feared viral diseases, according to
with the development of diagnosis methods, design and
the article The Rediscovery of Smallpox. However, there
preparation of vaccines. Should the virus have an animal
are a number of other viral diseases, such as poliomyelitis,
reservoir or be transmitted by vectors, a strategy designed
that generated thousands of deaths and led to paralysis in
for vector control is required. All control strategies should
children, or influenza, a viral disease responsible for the 1918
be based on the knowledge of the virus’ structure, the
European pandemic that caused a significant decrease in the
nature of its genetic material, mechanisms to enter the
continent’s population. More recently, AIDS, which prior to
organism and replicate within the target cells and the
its identification caused the deaths of thousands of young
pathogenesis mechanisms.
people in several parts of the world. For those viral infections that have been present among In the past couple of years, new viral infections have captured
the human population for a longer time, such as rubella,
the attention of different national and international health
mumps, measles and chickenpox, health systems have
organizations. Such is the case of the ebola outbreak in three
developed not only efficient monitoring systems but also
different countries in Africa, the Middle East respiratory
vaccines to prevent the disease. Vaccination against some
syndrome coronavirus (MERS) and the chikungunya and
viruses such as polio have been so efficient that the last
zika viruses in the Americas. Without going too far, the zika
poliomyelitis case in the Americas was recorded in 1991.
virus generated a global health alert, according to the WHO, due to its association with microcephaly in newborns and
Vaccines are no more than a biological mix containing
with Guillan-Barré syndrome in adults.
virus' proteins or a virus’ genetic material that allows the generation of acquired immunity (protection) against a
It is important to note that the wide geographic spread of
disease. The first vaccine generated was against smallpox
high pathogenic types of viruses that infect birds, such as
and used the cowpox virus, a smallpox variant that
the H5N1 and H7N9 influenza viruses, represent a constant
generated a slight infection in humans but that could
threat to global public health. In addition, the possibility of
induce protection against the lethal human smallpox.
facing new zoonotic events increases due to the accelerated
The experience of the vaccine against smallpox led to
growth of the world’s population and its expansion. Climate
the generation of other vaccines against diseases such
change, environmental changes and the destruction of the
as rabies, yellow fever, polio, measles, mumps, rubella,
habitat of several species generate new opportunities for
chickenpox, papilloma, hepatitis A, hepatitis B and
disease transmission. The prior has led to the creation of
influenza. Countries like Mexico entered the 21st century
the One Health Concept, in which direct connections are
with a national vaccination scheme of wide coverage that
made between people’s health and the wellbeing of animals
includes hepatitis A, hepatitis B, poliomyelitis, rotavirus,
and the environment.
measles, rubella, mumps, papilloma and influenza viruses. Unfortunately, not every country guarantees vaccination
There are a number of viral infections that usually present
compulsion nor offers them free of charge. This has led
themselves in human beings, such as measles, chickenpox,
to the continued appearance of a number of preventable
rubella and papilloma, among others. It is the duty of all
diseases in the population.
Quality analysis of ovules obtained by ovarian puncture to determine which will be implanted via IVF
193
Another aspect that has contributed heavily in the
of recombinant proteins, which only use certain proteins
last years to the appearance of vaccine-preventable
from a virus to generate immunity. The organism generates
infections has been the misinformation surrounding
antibodies against the virusâ&#x20AC;&#x2122; proteins and is thus protected
vaccines as a leading cause of autism. Even though the
against them. These vaccinations are fairly safe because
report that once related vaccination with autism has
they do not generate the disease in order to protect the
been totally refuted, as mentioned in the article Safety of
body from it. An example of this sort of vaccination is that
Vaccines used for Routine Immunization of US Children,
used against human papillomavirus. DNA vaccines are the
a significant number of parents have decided that it is
fourth type, in which organisms are immunized through a
more natural to permit their children to immunize through
DNA sequence that can replicate the virusâ&#x20AC;&#x2122; proteins. When
the infection. These decisions have resulted in significant
the DNA sequence enters the body, it introduces itself within
consequences, such as the presence of measles and
certain cells that will generate the viral proteins against which
mumps among college students in the US or in children
antibodies will be created. Though this type of vaccinations
visiting Disney parks.
is still in an experimental phase, results have been promising.
Misinformation regarding vaccination can have important
Unfortunately, there are a number of viral diseases for which
global consequences. If a population is protected with a
there are no vaccines. This is due to the fact that viruses
vaccine, the virus will not multiply in that specific population
have a high mutation rate, which means that whenever a
and vaccinated individuals can travel to any part of the
vaccine is ready for a certain virus, a new variant of the virus
world without the risk of getting sick. Nevertheless, if some
appears and the antibodies created are unable to avoid
members of the population choose to not vaccinate, there
the infection of the mutant virus. This has been, among
will be individuals susceptible to the disease, which will
others, one of the reasons why we still do not have a vaccine
allow the virus to incubate in certain locations. Hence the
against the AIDS virus, though it has been in the works for
importance of not straying from the efforts that have been
the last three decades.
made to overcome these diseases. Although Mexico has done a good job in terms of public health Vaccines can be of several types. Attenuated vaccines
to battle virus-generated infections, the country still faces
are made up of live viruses that will not generate serious
millions of annual cases of respiratory infections different from
infections in human beings but which can help the body
influenza, calicivirus gastroenteritis or dengue epidemics. Even
to produce antibodies that will prevent the infection from
now, the country faces viral infections such as chikungunya
occurring. For instance, an attenuated vaccine is the oral
and zika for which no vaccine has been developed. That is the
vaccine against polio or yellow fever. A second type of
reason why, within public health budgets, the mortality and
vaccines is made of deactivated viruses, in which viruses
morbidity rates associated with viral infections, continue to be
are treated with chemical compounds that destroy the virus
considerable. We should not let our guard down regarding the
but not its proteins, allowing for the creation of antibodies
prevention of those diseases that have an available vaccine.
that protect against the virus but that do not cause the
Misinformation can contribute to misguided decisions and
disease. These vaccines are very safe, such as the Salk
hurt the population most susceptible to being affected by a
vaccine against polio. A third vaccination type is made
serious disease, such as children.
VIEW FROM THE TOP
INTRODUCING NEW OPPORTUNITIES THROUGH GENOMIC MEDICINE FRANCISCO KURI Vice President of Landsteiner Scientific
194
Q: What are Landsteiner Scientific’s key product lines?
Q: What support does Landsteiner Scientific receive from
A: Our pipeline includes biotechnological drugs, genomic
academic institutions?
medicine, injectables and oral solids. We have several
A: We have received support from the Metropolitan
research lines but the most advanced is related to obesity.
Autonomous University (UAM), the National Institute
We started phase I clinical trials for this line in Spain,
of Genomic Medicine (INMEGEN) and UNAM through
although phase III will eventually take place in Mexico. We
the Institute of Biomedical Research. There are only a
have recently opened a new platform in genomic medicine
few countries where this kind of research is being done,
focused on oncology. Landsteiner is starting with colon
including Mexico, Spain and the US. Landsteiner’s Spanish
cancer, a common disease among men in Mexico and the
subsidiary GENMED is focused on projects in genomic
US. The company currently has a line of semi-solids such
medicine in several therapeutic lines.
as creams, a line of injectables and a line of immunosuppressants, high-specialty drugs whose production
Q: What kind of medicines are you developing against
must be separated from others.
colon cancer? A: When colon cancer develops, there is a metabolic
Q: What opportunities does Landsteiner Scientific see in
component that makes colon cells go rogue. Landsteiner
genomic medicine?
aims to interrupt the signal that orders cells to continue
A: Besides Landsteiner, there is no research being done by
reproducing, which is possible through genomic medicine.
Mexican companies in genomic medicine. If we continue
Once the factors that enable cancer to appear are discovered,
on this path, we could be one of the first to launch a
our researchers look for the best place and moment to stop
drug obtained from genomic medicine. There are many
the cancer from growing. There are two alternatives: one is a
diagnoses and studies in genomic medicine but no
medicine that interrupts the uncontrolled cell-reproduction;
medicines yet. As an example, 23andMe, a genetics lab,
the other creates memory in the human body so that
genotypes its clients’ DNA samples and informs them of any
cancerous cells can be recognized and eliminated regardless
genetic predispositions. For a while, the FDA had banned
of where they are or whether there is metastasis.
the company from doing that because people did not know Q: How are your sales distributed among the public and
what to do with this information.
private sectors? Q: How can genomic medicine help improve the health
A: 90 percent of Landsteiner’s sales used to go to the
of Mexicans?
government, but we started changing that in 2016 by
A: The genetic information of a population is used to identify
strengthening our private sales division. Our target is a
genetic traits that can help either control or cure the prevalent
70-30 sales ratio.
diseases. Our industry evolved into personalized medicine but now the discourse has evolved into precision medicine. We
Q: What is Landsteiner doing to reduce the cost of
know that some drugs do not work equally well in different
medicine and improve access?
populations. Genomic medicine could show what medicines
A: To achieve this, the company works with generic and
work best according to common Mexican genetic traits.
biosimilar medicines. However, to reduce prices and make access to drugs easier it is necessary to make drug registration simpler. COFEPRIS has done a great job, yet these normative
Landsteiner Scientific is a Mexican pharmaceutical company.
changes are difficult to apply and the industry is struggling.
It
and
We restructured our medical division because we set the goal
commercialization of biotechnological, genomic medicine,
of submitting 15 new medicines for registration per year to
injectables and oral solids. It recently open a plant in Toluca
keep our pipeline from becoming obsolete and unprofitable.
is
focused
on
the
manufacturing,
distribution
VIEW FROM THE TOP
BIOTECHNOLOGY DESIGNED TO MEET LOCAL NEEDS FÉLIX SCOTT Director General and Country Chair of Sanofi
Q: How is Sanofi and its biotechnology addressing Mexico’s
Q: As a leader in insulin supply, what innovative solutions
main health concerns?
are you developing for diabetes?
A: We are redefining treatment for cardiovascular
A: Sanofi was the first pharmaceutical company to create
diseases. Sanofi was the first company in Mexico to
glargine insulin, the first analogue insulin that improved
launch a monoclonal antibody for controlling LDLC, a
a patient’s quality of life. Recently we launched a new
solution that revolutionized the industry. The monoclonal
generation of insulin to redefine control of the disease. It is
antibody inhibits a protein called PCSK9, which hinders
a safer insulin because the patient now has a range of up to
the receptor that clears cholesterol from blood. In Mexico,
36 hours between doses, instead of 24 hours. The solution
cholesterol is a critical topic. The burden of cholesterol
is complemented with a platform that provides support
as a cardiovascular risk is due to ethnic features and
to patients in terms of nutrition, exercise and everything
unhealthy lifestyles. Usually, diabetic patients have
related to changing habits.
problems with their lipid levels. Previously, patients were treated with statins, but eventually they reach a point
In a wider context, diabetes and obesity might also lead to
where the statin becomes ineffective. This new therapy
other complications that can result in the need for further
provides patients with an alternative.
treatment, such as knee replacements. For these cases, we developed an injection that helps delay the need for
Q: What role did Mexico play in the development of the
a knee replacement. The treatment restores the cartilage,
dengue vaccine?
providing pain relief in the knee and allowing the patient
A: Mexico was the first country to register the dengue
to continue walking. The cost of knee replacement surgery
vaccine. We are leaders in emerging economies because
is very high and this product, which is already available
we work to meet the specific needs of patients in those
through public institutions, helps reduce costs.
countries. Mexico played a key role in the investigation of the dengue vaccine because, among the 15 countries
Q: What makes Sanofi unique in Mexico?
included in the research program, it was one of only two
A: We are a company focused on people, the development
countries, along with the Philippines, that participated in
of talent, inclusion, diversity and gender equality. What
the phase I clinical studies. That is why Mexico became
makes us different is the human dimension in everything we
the first country to obtain the sanitary registration: it
do, whether working with patient associations, authorities,
was a collaborative approach with the country’s health
doctors or our own employees. This includes, for example,
institutions that enabled us to establish the necessary
helping our employees and their families. Children in Mexico
processes to comply with the many strict requirements of
do not have school on the last Friday of every month, which
the authorities and to provide them with solid local data. It
can be an issue for parents. We established Kids Office Day,
was not an easy process but it was also the first time that
an initiative in which all our employees can bring their children
COFEPRIS had certified a new vaccine before agencies
to work on that Friday. We organize activities for the children
such as the FDA and the EMA.
and in so doing, we help our employees comply with their parenting responsibilities. So far, we have received a great
Q: What other vaccines is Sanofi developing?
response from our employees and their children.
A: Our global operations are developing research for a zika vaccine, among others. We have a collaboration agreement with the US Army to conduct research into this
Sanofi is a pharmaceutical group founded in 2004 after the
type of infection and we believe we are in the best position
merger of Sanofi-Sythelabó and Aventis. It is the world’s
to achieve a fast and efficient solution for zika after our
third-largest pharmaceutical group and a leader in research in
experience with the dengue vaccine.
Mexico with over 35 active studies
195
ANALYSIS
THE BLACK HOLE OF BLACK MARKET MEDICINE Selling fake medicine is an opportunity for counterfeiters to
In Mexico, El Universal reports that between
make money, but the results for patients can be damaging or
Jan. 1, 2007 and Dec. 31, 2015, the Attorney
fatal. Mexico has cracked down on this problem in recent years
General’s Office seized 945,152 fake medicines,
but issues remain
just under 942,000 of which were seized in Mexico City. Industry reports on how much
In some industries, counterfeit products can lead to
medicine in Mexico is false varies wildly from as little as
financial losses. In the medical sector, it can lead to death.
4.5 percent of the total to 60 percent. Reasons for the
Fake medicines can be destructive and even devastating
discrepancy include insufficient controls and the expanse
but the lack of global coordination is impeding the fight
of the supply chain across borders, where one country’s
against these illicit drugs despite local efforts to curb their
health authorities cannot survey operations in the other.
use. In Mexico, trade on the black market is on the rise. 196
Although some countries have anti-counterfeit measures in “Counterfeit, altered or contaminated drugs are an
place and are actively seeking and destroying fakes, one of
issue several clients of ours have faced recently and the
the main issues in the fight is the lack of global coordination
prevalence of this occurrence is growing in Mexico. There
against this international plague. Countries have yet to
are several reasons for this, including organized crime,”
agree on a standardized term to be used and even Big
says Ernesto Algaba, Partner of the Life Sciences Practice
Pharma companies have an opinion on what should be
at Hogan Lovells BSTL.
included within the definition of illegal medicine. They insist that counterfeits, which are defined as functioning
The issue is neither new, nor particular to Mexico. China’s
copies of a patented drug, be included while NGOs protest
state-controlled Shenzhen Evening News newspaper has
that although violating intellectual property, they pose little
reported that in 2001, 192,000 Chinese patients had died
or no health risk. Interpol has several ongoing operations
due to the use of fake drugs.
in the pharmaceutical field, including Operation Pangea, which targets the online sale of illegal medicines. The
Globally in 2015, there were 3,002 incidences of counterfeit
European Council has drafted the MEDICRIME convention,
medicine involving 1,095 pharmaceutical products,
“a binding international instrument in the criminal law field
according to the US-based Pharmaceutical Security
on counterfeiting of medical products and similar crimes
Institute. The three categories of drugs most targeted by
involving threats to public health,” according to its website.
counterfeiters are genito-urinary, anti-infectives and CNS. Cardio-vascular medicines, an important category for
As for Mexico, Algaba says that “COFEPRIS is working on
the Mexican population, saw a 29 percent increase in the
eliminating these health risks by increasing inspections and
number of fakes from 2014 to 2015 and dermatologicals, a
visits. It also has an open dialogue with companies to agree
category few think to question, experienced a 57 percent
on proper measures for suspending and recalling a product
rise in the same period.
and also in finding those responsible.”
HIDDEN POISONS IN COUNTERFEIT MEDICATIONS Heavy metals
Hidden Ingredients
Impact
Mercury, aluminium, lead, cadmium, arsenic, chrome, uranium, strontium, selenium
Poisons PCBs, benzopyrenes, rat poison, boric acid, antifreeze
Kidney damage, Carcinageric or toxic kidney failure, to CNS kidney, liver, cancer and skin, bones or teeth developmental defects
Source: safemedicines.org
Common household items Road paint, wall paint, brick dust, floor wax, sheet rock, paint thinner Vomiting, abdominal pain, dizziness, blurred vision, respiratory difficulty, nervous system disruption, coma, death
Drugs you did not ask for Aminotadafil, homosildenafil, xanthoanthrafil, pseudovardenafil, hongdenafil, sibutramine, haloperidol Difficulty breathing, muscle spams, muscle stiffness, high blood pressure, stroke
No drugs at all Dextrose, dextrin, lactose, starch, saline, salt
Harm or death
VIEW FROM THE TOP
GLOBAL LEADER IN ANTIBIOTICS PRIORITIZES RESPONSIBILITY MAARTEN POUW CEO of DSM Sinochem Pharmaceuticals
Q: What solutions does DSM Sinochem Pharmaceuticals
Q: What does Mexico represent for DSM Sinochem
propose to the growing anti-microbial resistance (AMR)
Pharmaceuticals within LATAM and globally?
problem?
A: In terms of size, Mexico is our second-largest market in Latin
A: There is increasing evidence that API manufacturers that
America after Brazil, followed by Colombia and Argentina.
do not adequately treat waste products contribute to the
We truly believe in the strong potential of the Mexican
problem. Releasing high concentrations of antibiotic active
pharmaceutical industry, as the country is the 11th market for
ingredients into the environment creates “reservoirs” of
pharmaceuticals in the world. In addition, it is important to
antibiotic resistant bacteria that can be easily propagated
mention that Mexico is considered a gateway to the rest of
due to increased global travel. At DSM Sinochem
the countries in Latin America and the US due to its location.
Pharmaceuticals we strongly believe in producing APIs in the most responsible and sustainable way. Regulation
Q: What are the main challenges DSM Sinochem
concerning wastewater disposal is definitely needed but
Pharmaceuticals face in the Mexican health sector? How
its implementation can take several years. In October 2014,
does it overcome them?
we launched our sustainable antibiotics program, which
A: DSM Sinochem Pharmaceuticals is the only producer of
initially targeted our in-house wastewater treatment. We
antibiotics in Mexico so we are in the spotlight of Mexican
have already implemented basic requirements for clean
regulators. The sense of urgency in Mexico is entirely
and sustainable antibiotics production at all our sites.
different from that of countries with a larger antibiotics
These include the use of technology with the lowest
industry, such as India or China, but the commitment exists
environmental impact throughout our supply chain,
and there is significant debate nationally and regionally
dedicated wastewater treatment plants at every antibiotic
on the regulation of antibiotics. We actively communicate
manufacturing site and antimicrobial activity testing.
all information related to AMR to our public and private stakeholders in Latin America. We know it will be difficult
Q: How are private companies pushing forward on this
to solve such a large challenge by ourselves so we are
issue? What dangers does AMR pose to global health?
constantly communicating with the sector. I am proud to
A: DSM participated alongside 12 leading biopharma
say that the response has been positive so far and we are
companies in the generation of the UN General Assembly’s
glad to be leading such a process in the region because it
Roadmap to Combat AMR. The AMR Industry Alliance
ensures that DSM Sinochem Pharmaceuticals will be able
was established in May 2017 to review progress on the
to anticipate any regulatory change in this area.
commitments made by the Roadmap. This alliance is chaired by the International Federation of Pharmaceutical
Q: What products will be game-changers in the next year?
Manufacturers & Associations (IFPMA) and warns that
A: We have well-established products in our portfolio
700,000 people worldwide die from resistant bacteria
that have been commercialized for a long time. These
annually. Of those, 50,000 die in the US and Europe
products enjoy a stable and steady sales performance.
alone. Furthermore, 58,000 newborn babies die each year
As part of our corporate business development strategy,
in India as a result of drug-resistant infections and almost
we also expect strong growth in cardiovascular and anti-
every minute a child under five dies from pneumonia,
fungal product sales.
for a total of 410,000, according to the NCDC India. In the US, two million people contract a serious antibioticresistant infection every year, of which 23,000 will die.
DSM Sinochem Pharmaceuticals, founded in 1869, is one of
By 2050, over 10 million people will die from resistant
the oldest fermentation companies in the world. It develops,
bacteria every year, costing the global economy US$100
produces and sells intermediates, active pharmaceutical
trillion per year.
ingredients and drug products
197
VIEW FROM THE TOP
PROMISE OF MSC LIES IN FLEXIBILITY ABRAHAM FRANKLIN Director General of Grupo Franklin
198
Q: What advantages do dental mesenchymal stem cells
Q: What process is used to extract the cells?
(MSC) have over those extracted from bone marrow or
A: The ideal process is for children to go to the dentist
the umbilical cord?
when a tooth is loose but not out. If the child waits until
A: Bone marrow contains a small portion of mesenchymal
the tooth falls naturally, the mature tooth behind the milk
stem cells and extracting the cells is invasive. They also cannot
tooth may have eaten the entire root, from which the
be taken from cancer patients because they are already sick,
stem cells are extracted. The dentist will put the tooth
although milk teeth have cells that can be used to treat direct
in a fluid we provide that will preserve the tooth exactly
family members. The umbilical cord contains hematopoietic
as it is. We work with a network of dentists who have
cells, which can only produce blood and not tissue. Those are
the necessary boxes to preserve the teeth, which can be
useful for certain blood diseases but they cannot be multiplied.
preserved for up to four days, although we should receive
Additionally, hematopoietic cells can only be used in children
it within 24 to 48 hours. We then freeze and expand the
under 16 pounds because the procedure requires a certain
stem cells.
number of cells per pound and more cannot be produced. Q: How does current regulation govern the use of stem MSC can convert rapidly into any tissue. We are developing
cells in Mexico?
cardiac cells for regenerative medicine and working with
A: We cannot use them openly right now because they
3-D printing to replace foot bones. In the US, scientists are
are still in trials. We need to apply to COFEPRIS on a
3-D printing human hearts and putting them in pigs. We can
case by case basis, with a specific patient and a specific
make and print skin for burns and we can produce cells for
treatment in mind. The ethics committee assigned by
laboratory tests, thus avoiding animal testing. Additionally,
the government will then decide if what we are doing is
our experts are developing beta pancreatic cells that
proper and whether there will be any harmful effects for
produce insulin, taking steps toward treating T1D.
the patient. Also, patients can only use their own stored cells for the treatment. If they want to do something else
At the same time, we are trying to help people who suffer
we need to repeat the process.
from macular edema and retinitis pigmentosa by producing cells found in the eyeâ&#x20AC;&#x2122;s rods and cones. From MSC, we can
Q: How can regulations be improved to take advantage
fabricate fibroblast to produce a serum that helps reduce
of this technology?
wrinkles and our partners in Spain have already treated 20
A: We know these cells can do a lot of good and regulatory
patients with this product, 18 of which saw positive results.
bodies are trying to move faster regarding regulations. But this technology develops more quickly than the law,
MSC also have immunomodulating properties, meaning
as evidenced by the fact the FDA is granting permission
the cells can reduce inflammation and rejection rates.
today for procedures invented in 1985. Everything in this
We injected MSC into eight paralyzed rats and after six
field is new and people can be afraid, so we need the
weeks, four started walking again, which means the neuro-
scientific basis to justify new techniques.
transmission is perfect. Parkinsonâ&#x20AC;&#x2122;s and Alzheimerâ&#x20AC;&#x2122;s are other diseases we want to treat.
The government asks us for advice on how to handle new cases. It is remarkable that COFEPRIS is recognizing the need for support in areas it is unfamiliar with and that
Grupo Franklin operates in diverse sectors, including health. It
they are willing to integrate this support. Social security
owns a chain of dental clinics, a stem cell bank and a research
is also burdened because of the money required for long-
center, distributes medical equipment and runs a biohazard
term treatments. We want patients to have access to
waste disposal company
these opportunities as soon as possible.
VIEW FROM THE TOP
EXPENSIVE PROCEDURES SPUR STEM CELL INNOVATION JESÚS ESPARRAGOZA Director of Biostem Technologies Mexico
Q: What led you to use stem cells to treat injuries?
due on the efficacy and applications of these therapies
A: We decided to research and develop stem cell treatments
that could define which cases can use such applications.
after performing a heart transplant 16 years ago in San Javier Hospital, Guadalajara. The process was extremely
Q: What are the short and long-term goals for Biostem
complex and expensive both for the doctor and for the
Technologies?
patient, who ran out of money after a month in recovery.
A: We have a team comprised of certified researchers from
This motivated us to look for an alternative solution that
Guadalajara studying how many changes can be performed
could help patients with a certain level of heart failure avoid
before a cell is damaged and monitoring existing cultures
the need for a transplant. We researched the role of stem
for signs of damage. Our goal is to generate a cell bank,
cells in cardiac failure and we allied ourselves with groups
which will include adult autologous and mesenchyme cells
that were already investigating it. This research led us to
for anyone who may need them. This bank is already in
develop a comprehensive approach to treating heart failure
progress and now we are fulfilling the requirements for
that involved the injection of stem cells and significant
regulatory data so the bank can be approved by COFEPRIS.
changes in the patient’s habits and diet. Afterward, we
To get the approval, all hospital and laboratory infrastructure
started researching the impact of stem cells in spinal, joint
has to be certified by the council. We have been developing
and muscular injuries.
these projects for over eight years because generating research protocols is a long process.
Q: How do you extract the cells? A: We extract the stem cells from the patient’s iliac crest
Our goal is not just to store the cells but to study their
bone marrow. These cells are purified and cultivated. They
applications and potential to cure diseases. There are many
are then implanted in the damaged tissue or wherever there
studies to be made on the efficiency and applications of
is a mobility problem. While umbilical cord cells can also be
these treatments and that could indicate which specific
used for these purposes, COFEPRIS only authorizes us to
patients could benefit. We have a research laboratory in
use stem cells from a patient’s bone marrow. These are also
Miami but our ultimate goal is to create one in Mexico.
much easier to obtain and equally good for our purposes as cells from the umbilical cord. Cells from teeth can also
Q: Which new products are you developing?
be used but they require more purification and cultivation
A: In 2017, we will branch into different areas. Our goal
because they are in shorter supply than bone marrow cells.
will be to generate wellness products including food supplements, which contain omega-3 and other nutrients
After cultivation, we isolate mononuclear stem cells, which
and pure water. We are also developing nutraceuticals
are implanted in tissues including the heart, lungs and
targeting patients who suffer from obesity and diabetes. We
other damaged areas autologously. We are planning to
are looking at developing products that can neutralize the
store these cells to create a bank. We will also isolate
negative effects of inflammation, which could help patients
mesenchyme cells, which can be implanted in any
with autoimmune diseases such as lupus and scleroderma.
individual because they have no antigenic receptors.
Mononuclear stem cells and mesenchyme cells can also be
During the replication processes, it is necessary to
used as anti-inflammatory agents.
closely monitor samples to ensure cells do not deteriorate or mutate, which could lead to tumors. We have been developing these projects for over eight years as the
Biostem Technologies focuses on research and development
generation of research protocols entails a long process.
of stem cell therapies for Mexico, a pharmaceutical line that
Our goal is not just to store the cells but to study their
provides high-quality products and a wellness line focused on
applications and curative potential. There are many studies
anti-aging and rejuvenation products and services
199
VIEW FROM THE TOP
STEM CELLS DO WHAT YOU NEED THEM TO DO VICTOR SAADIA CEO and Founder of Bioeden Mexico and LATAM and CCO of Bioeden USA
200
Q: What are the advantages of using dental stem cells over
helps with the inflamed pancreas and the regenerative
those of the umbilical cord or bone marrow?
element helps to regenerate pancreatic function. For the
A: The cells from the umbilical are hematopoietic and they
best outcome when treating chronic diabetes, several
are mainly used to treat blood conditions such as lymphoma,
sessions are advisable for the cells to work. In addition to
leukemia and anemia. Dental stem cells are mesenchymal;
pancreatic malfunctioning, T2D causes a great number of
they form tissue and can differentiate into bone, cartilage,
problems such as blurred vision, glaucoma, poor circulation
heart, liver, etc. The other fundamental difference is that
in the extremities and liver, kidney and heart issues. There
umbilical cord cells cannot be multiplied and often there are
is a protocol in Monterrey under research that is aggressive
not enough cells for treatment. Mesenchymal cells can be
but efficient, which involves submitting the patient to
used several times for different applications. Finally, there
chemotherapy to destroy their immune system because it
is only one opportunity to collect umbilical cord stem cells
has been attacking itself. After it is killed off the patient is
but there are many opportunities to obtain cells from teeth.
given a new immune system with stem cells. This is done with hematopoietic cells collected from bone marrow. This is also
Bone marrow is a rich source of both mesenchymal and
helping allogenic transplants achieve lower rejection rates.
hematopoietic cells. Their collection is much more painful as a thick needle is inserted into the bone several times.
Q: Although authorization is granted on a case by case
It is invasive and hospitalization is required. In addition,
basis, what are the main uses of stem cells in Mexico?
the cell quality is not as good because they are prone to
A: The potential applications are still being researched. In
environmental damage. This is a good option for those who
Mexico, they have mostly been used for orthopedics, lesions in
have not persevered cells in another form.
articulations such as the knee, hip and shoulder or for diabetes. We are running an interesting protocol on autism and stem
Q: T2D is affecting Mexico and consuming the public health
cells also can be used for neuro-degenerative diseases such
budget. How can stem cell research help?
as Parkinsonâ&#x20AC;&#x2122;s disease. There are also intravenous applications
A: Many auto-immune diseases are inflammatory, so stem
to help regenerate tissues and cells. Stem cells have anti-aging
cells can help with their anti-inflammatory properties. In
properties that are popular with athletes.
addition to becoming tissue, over the past five years it has been discovered that stem cells have additional properties:
Q: What regulations are stem cell clinics like Bioeden
anti-bacterial, anti-inflammatory and regenerative. They
lobbying for in Mexico?
also recruit other cells to help with repair and protect cells
A: Processes are limited by the laws that are 10-15 years
by stopping apoptotic processes, which is programmed
old and policymakers are slow to react to innovation.
cell death. Stem cells are also immune-regulating. These
Mexico is a pioneer in this area so there are fewer countries
are environmentally responsive therapeutics. Applied
to copy from and thus more fear, which is normal. This
intravenously, these cells will do what you need them to.
can be solved by reading scientific information which is available for all, and there are many aspects that have
As for T2D, the immune regulating aspect helps because it
already been tried and tested. It is a waste of time and
is an auto-immune disease; the anti-inflammatory function
money to repeat those tests here, since that money could be used for further research. Regulation of dental stem cells in particular is scarce and mesenchymal cell
Bioeden, a US-based tooth stem cell bank, collects and stores
regulation is tied to that of hematopoietic cells. COFEPRIS
dental stem cells using cryopreservation. It is present in 30
is conscious of these things and is moving forward. We
countries and has three laboratories: one in the US, one in the
are not completely blocked by legislation. I hope there
UK and another in Thailand
will be greater openness in the next two years.
ANALYSIS
THE RISE OF THE SUPERBUG Antibiotics have saved many lives over the past 70 years
Practice at Hogan Lovells BSTL. “[…]Key
but the rise of the “superbug” threatens this. Bacteria
provisions will need to be amended to provide
is developing resistance to antibiotics, leaving experts
guarantees products are safe for human
scrambling for a new solution
consumption. I do not think we have the detailed provisions that may exist in other jurisdictions,”
Before antibiotics were accidentally discovered by Sir
he says, adding that “the regulatory framework needs to
Alexander Flemming in 1945, an infection of a small cut
take best practices from other jurisdictions into account. We
could kill. For the past 70 years, the discovery of an
know that in Europe and in the US there are more specific
increasing number of antibiotics has prevented millions of
provisions and limitations. Fortunately, products are mainly
deaths but this is under threat. Resistance or immunity to
coming from these jurisdictions into Mexico. Even though
antibiotics, known as antimicrobial resistance, is emerging
we have complex labeling requirements, this is an area that
and such resistant bacteria are known as “superbugs.”
could potentially be improved.”
How superbugs developed is simple to understand. In
ANTIBIOTIC RESISTANCE TIMELINE
the words of CDC researcher and superbug expert Maryn McKenna: “Bacteria compete against each other for resources, for food, by manufacturing lethal compounds that they direct against each other. Other bacteria evolve
DISCOVERY
201 RESISTANCE IDENTIFIED
Penicillin 1943 1945 (2 years)
defenses against that chemical attack. When we first made antibiotics, we took those compounds into the lab and
Vancomycin 1972
made our own versions of them and bacteria responded
Imipenem 1985
1988 (16 years)
to our attack the way they always had.” 1998 (13 years)
The Review on Antimicrobial Resistance, funded by the British
Daptomycin 2003
2004 (1 year)
government, pegs the annual death toll caused by infections no drug can help at 700,000. It estimates that this number
Source: Maryn McKenna TED 2015
will rise to 10 million by 2050 if no action is taken. The WHO estimates that every year 480,000 people are infected with
By 2015, over half of the world’s countries did not have
multi-drug resistant tuberculosis. Extensively drug-resistant
relevant antibiotic legislation. Ensuring food chain security is
tuberculosis had been detected in 117 countries by the end
vital for human health. Over 60 percent of human pathogens
of 2015, including Mexico, and it kills 50-70 percent of those
are of animal origin and over 20 percent of animal losses
infected. The global health body also says that between 2000
are caused by disease. In addition, the OIE reports that five
and 2015, 49 million lives were saved due to diagnosis and
new human diseases are reported every year. For this reason,
treatment of tuberculosis, which consists of four antibiotics.
maintaining animal health is a vital public health issue.
The use and prescription of antibiotics for humans is
“We also need a more developed legal framework regarding
heavily regulated. In Mexico consumers cannot purchase
organic products or those free of antibiotics. We need to
antibiotics without a prescription, which is kept by the
know if the animal consumed the legal amount of antibiotics
issuer. However, the CDC estimates that upto 50 percent
or if it is completely drug-free. General regulations in food
of antibiotics prescribed for people and most of those
products need to be connected with organic food and animal
used in animals are unnecessary or not as optimally
antibiotic consumption requirements. Ensuring the quality
effective as prescribed. Unfortunately, the CDC also
of meat containing antibiotics and the effects of that meat
estimates that “1 in 5 resistant infections are caused by
on humans is vital,” says Cecilia Stahlhut, Senior Associate of
germs in food or animals”. “COFEPRIS tightly controls
the Life Sciences Practice at Hogan Lovells BSTL.
the human consumption of antibiotics but animal meat is the greatest source of antibiotics for humans,” says Felipe
Because bacteria develop resistance so quickly, there
Espinosa, CEO of Laboratorios Collins.
is little incentive for pharmaceuticals to search for new antibiotics. McKenna says that a new generation
In Mexico, tighter regulations that take their cue from other
of bacteria develops every 20 minutes, whereas drugs
countries could help limit the impact from a contaminated
take years to develop. She calls for more incentives for
food chain, says Ernesto Algaba, Partner of the Life Sciences
pharmaceuticals to continue the fight.
Functional training classes
NUTRITION & WELLNESS
9
Wellness is the key to prevention, which is vital for lowering the chronic disease burden in Mexico and improving the general health of the population. Improving healthy eating habits can make an enormous difference to health and to the amount spent on health matters. This is nowhere more relevant than Mexico, which holds one of the top spots worldwide for both adult and child overweight and obesity. With Mexican nutrition being largely insufficient, companies are capitalizing on this opportunity to provide vitamin supplements or complements to the market. With the trend of eating healthy comes the trend of avoiding chemical medicine, leading to a resurgence in natural remedies or herbal medicine. Although COFEPRIS has cracked down on these sectors in recent years to guarantee the safety of patients, it is now emerging as a viable alternative for public institutions with budgets bursting at the seams. People are also increasingly turning to dermatological and surgical solutions to meet their aesthetic needs.
This chapter will provide insight into the national wellness market and how it is looking to develop.
It will feature companies devoted to improving nutrition,
innovative skin care products and fitness alternatives that best meet Mexican needs.
203
204
CHAPTER 9: NUTRITION & WELLNESS 206
ANALYSIS: Change of Habit Required for Wellness
209
VIEW FROM THE TOP: Javier Luna, Nestlé
210
VIEW FROM THE TOP: Raúl Camarena, Aspen Labs
211
VIEW FROM THE TOP: Víctor Anaya, Merz Pharma
212
INSIGHT: Geraldine Waked, Sesderma
213
VIEW FROM THE TOP: Alejandro López, IM Natural
214
VIEW FROM THE TOP: Adriana Azuara, Agave Spa
215
VIEW FROM THE TOP: Ricardo Spínola, Farmapiel
216
VIEW FROM THE TOP: Cédric Ertlé, Expanscience
217
VIEW FROM THE TOP: Fabián Bifaretti, Sports World
218
VIEW FROM THE TOP: Miguel Marín, Industrias Sintoquim
220
INSIGHT: Ignacio Luna, Biofarma
221
ROUNDTABLE: What Factors Impede Skin Care and What are Some Protective Measures?
205
ANALYSIS
CHANGE OF HABIT REQUIRED FOR WELLNESS Nutrition and exercise are key to fighting overweight and
trend toward healthy eating also often avoid
obesity, conditions prevalent in Mexico. However, most
chemical medicines, leading to a resurgence
patients see this as an aesthetic issue, not a health problem,
of natural remedies and herbal products.
in the same way as they view skincare
Although COFEPRIS has cracked down on these sectors in recent years to guarantee
Maintaining general wellness is the key to prevention,
the safety of patients, it is now emerging as a viable
a vital issue for lowering the chronic disease burden
alternative for public institutions with budgets bursting
in Mexico and improving the general health of the
at the seams.
population. Accordingly, improving eating habits can The OECD reports that in 2012 over 71 percent of the
expenditures. This is increasingly relevant than Mexico,
Mexican population was either overweight or obese.
which holds one of the top spots worldwide for both
It also reports that in 2013 Mexicans were consuming
adult and child overweight and obesity.
3,072 kilocalories per capita per day. “Behavioral change is the key to reducing the disease burden of obesity and
“Overweight and obesity in children is more serious
diabetes, the leading cause of disease and healthcare
than these issues in the general population. However,
spending,” says Paul Doulton, Founder and Managing
children suffering from these problems almost certainly
Partner of Oriundo, a consultancy composed of former
will continue to do so in adulthood. Childhood overweight
CEOs that helps new entrants to Latin American
and obesity are also more difficult to solve. They are still
pharmaceutical markets.
growing, so restricting nutrition is not as simple as in adults,” says Carlos López, Director General of Medix, a
Obesity is a risk factor for T2D, which in turn is caused
company dedicated to fighting overweight and obesity
partly by poor nutrition. Maintaining healthy eating habits
since 1940.
can make an enormous difference to health and to the amount of money spent on health matters.
The 2016 ENSANUT report shows that Mexicans are not only overweight, they are unaware of it and do not know
“ENSAUT 2016 was representative of how people see
correct alimentation or exercise requirements. With
themselves versus how they are. The health side is more
Mexican nutrition being largely insufficient, companies
complicated, as often people do not feel ill. By posing
are capitalizing on this opportunity to provide the market
overweight and obesity solely as a health problem,
with vitamin supplements or complements. Those who
people do not identify with this. We have therefore
PERCENTAGE OF ADULTS OVER 20 THAT CONSUME GROUP ADULTS OVER 20 THAT CONSUME EACH FOOD GROUPEACH DAILYFOOD IN MEXICO (percent) 100 80 60 40
Urban
Sweetened dairy drinks
Sweetened non-dairy drinks
Sweet cereals
Snacks, sweets and deserts
Fast-food and mexican snacks
Dairy
Eggs
Water
Non-processed meat
Processed meats
Rural
Source: ENSANUT 2016
Pulses
0
Vegetables
20
Fruit
206
make an enormous difference to health and to public
wellbeing. We ask patients if they would like to change Level
their image,” says López. Another area of health often associated with aesthetics
Low
is dermatology. A person’s skin condition is also greatly
Ultra-violet index
taken a different approach, focusing on aesthetics and
impacted by the food consumed and is an external show
Moderate
of wellbeing. With many Mexican cities plagued with high levels of pollution, protection from such external damage is vital. A 2015 MicroMarketMonitor report pegs Mexico as the fastest growing country in the North American
High
dermatology devices market with a compound annual growth rate of 9.8 percent from 2014 to 2019.
Very high
“People need to protect their skin against pollution, even indoors where it can sometimes be more polluted because people are crowded into a room or working long hours under artificial lighting, among other factors. It is necessary
Extremely high
to use anti-oxidants to protect the skin against this,” says Adriana Azuara, CEO of All4Spas and Agave Spa. Another major wellness factor is physical fitness, vital for keeping obesity in check. “Gyms are able to link sedentary people with a more active life, not only through strength and cardio equipment but with a robust wellness
According to skin type, the maximum time of exposure, without protection, should be (in minutes) Very pale
Pale
Light Dark brown brown
Dark
Very dark
1
112
140
175
219
274
342
2
56
70
88
109
137
171
3
37
47
58
73
92
144
4
28
35
44
55
68
86
5
22
28
35
44
55
68
6
19
23
29
37
47
57
7
16
20
25
31
39
49
8
14
18
22
27
34
42
9
12
16
19
24
30
38
10
11
14
18
22
27
34
11
10
13
16
20
25
31
12
9
12
15
18
23
29
13
9
11
14
17
21
26
14
8
10
13
16
20
24
15
8
9
12
15
18
23
Source: aire.cdmx.gob.mx
orientation that includes group classes, meditation, yoga, Pilates, steam rooms, saunas, massage services, nutrition
price range, walking and running in the street is free.
experts, facilities for kids (and) swimming pools,” says
In addition, many state ministries of health have been
Fabián Bifaretti, CEO of Sports World.
implementing free outdoor gyms in cities, although their use is not recommended when pollution levels reach
El Financiero reports that there are 1.9 sports clubs in
excessive heights.
Mexico per 100,000 inhabitants, compared to 8.8 in Brazil and 12.4 in Argentina. However, experts argue that there
Despite these issues, life expectancy in Mexico has increased
is no access issue to physical fitness because, although
steadily in recent years, reaching an average of 75 years in
top-end gyms are few and out of the average Mexican’s
2016, 72.3 years for men or 77.7 years for women.
LIFE EXPECTANCY AT BIRTH (years) 85
80
75
70
——US
2006
2007
——Mexico
Source: OECD
2008
——Japan
2009
——Colombia
2010
——China
2011
——Chile
2012
——Brazil
2013
2014
2015
207
VIEW FROM THE TOP
DIFFERENT ISSUES REQUIRE DIFFERENT APPROACHES JAVIER LUNA Senior Manager in Health Nutrition and Wellness at Nestlé Mexico
Q: What are the main nutritional issues in Mexico and how
world, which is known to cause illness, especially in infants.
is Nestlé approaching these?
Through our process called OPTIPRO, we are trying to
A: Our research has highlighted several issues in Mexico.
make the milk we use for our infant formula as close as
We have conducted a series of studies we developed
possible to breast milk, which will make it easier to digest.
(Kids Nutrition and Health Study and Feeding Infants and Toddlers Study) and we have performed R&D with our
Q: How are Nestlé’s programs encouraging healthy eating
partners at Nestlé Research Center in North Carolina,
habits in Mexico?
and Nestlé Mexico has worked with different national
A: Nestlé has reorganized its business vision to focus on
research institutes, such as the Public Health Institute
three areas: the person and the family, the community
(INSP). The first study relates to hydration among
and the planet. In the first category, the goal of our full
children. They consume a large quantity of sugary drinks
portfolio is to provide better nutrition and nutritional
but lack regular water intake. Second, in Mexico around
options for consumers. Toward that goal, we also have
17 percent of children and teenagers skip breakfast every
three philanthropic programs: United for Healthier Kids,
day, which is very serious in nutritional terms. Many of
Healthy Kids and Start Healthy, Stay Healthy. These three
those who do have this meal eat sugary bread in addition
programs promote nutritional orientation, the prevention
to sweetened beverages, while the intake of grains is
of child obesity and healthy pregnancy and baby health.
very low. Finally, a third trend is a shortage of fruit and
The second category includes: Cocoa Plan, Nescafé Plan
vegetables in infant diets.
and Dairy Commitment to ensure a stronger value chain and to help local agricultural entities become certified
To battle these issues, we have established different
providers for Nestlé. Finally, for the planet, Nestlé has
approaches. Nestlé has pledged to reduce ingredients
made a water-usage pledge and implemented a waste-
such as sugar and salt in all its products globally.
reduction initiative. In Mexico we even have one factory
Locally, we have different action plans. Among these
that operates with zero water.
there is a program called Portion Guidance, which includes suggested portions in a product’s label.
Q: How important is Mexico to Nestlé’s global operations?
Another campaign related to our water lines promotes
How much of your manufacturing is done here?
water consumption and we have also been improving
A: Mexico is an important location. Within Nestlé’s global
our cereal brands (no artificial flavors, whole grains as
operations, in terms of sales, it is ranked seventh generally
a first ingredient and reduced sugar). Mexico Gerber
and number three worldwide for infant nutrition. Nestlé
has reformulated its infant cereals to eliminate added
also has 17 factories in the country. In 2016, we opened our
sugar. Gerber has also launched a new organic product of
infant nutrition factory called Nantli with an investment of
fruits and vegetables for babies and preschoolers that is
more than US$245 million. This factory will supply markets
presented in pouches. Regarding all the diabetes issues in
in Mexico, Latin America and Asia. In 2013, Nestlé Mexico
the country, in 2017 we will launch a new line of products
exported more than 86 tons of locally manufactured
under the Boost brand called Boost Glucose Control. This
products to 29 countries and imported more than 29 tons
product specializes in nutrition for diabetics.
from 14 countries.
Q: What new technology are you pursuing in children’s nutrition?
Nestlé is a leading nutrition, health and wellness company present
A: Infant nutrition is a constant topic for our research
in more than 197 markets with around 2,000 brands. Nestlé also
budget and we are now focused on low-protein infant
executes local philanthropic and awareness campaigns in Mexico
formulas in response to excess protein intake around the
to battle the main nutrition problems in the country
209
VIEW FROM THE TOP
BABY FORMULA: THE CASH COW OF NUTRITION RAĂ&#x161;L CAMARENA General Manager of Aspen Labs Mexico
210
Q: What products did Aspen Labs launch in 2016 to
Mexico has made great advances in promoting maternal
address the needs of the Mexican population?
milk, which we support. A few years ago, for example,
A: In the nutrition segment, we launched our Infacare formula,
mothers had to take their maternity leave 45 days before
which complies with all requirements established by the
the birth of the baby and return to work 45 days after. In
WHO. Our installed capacity at Aspen Labsâ&#x20AC;&#x2122; Vallejo plant
2016, the labor law was changed and now a mother can
in Mexico City gives us the ability to offer this product at a
take her leave from the day before giving birth and up to
competitive price compared to what is traditionally available
90 days after. This encourages mothers to breastfeed, to
in the Mexican market. Our product is superior in quality to
be closer to and spend more time with the baby. To give
the dominant market equivalent and costs 10 percent less
mothers even more time with their babies and to deal
than that of our competitors. For those that require an infant
with any situation that might arise, Aspen Labs provides
formula, it is a great advantage to have a product that is not
its employees an extra 30 days maternity leave.
only accessible but of the best quality and efficacy. Q: What are the main issues in infant nutrition in Mexico?
Labor law changes in 2016 allow mothers to take maternity leave from the day before giving birth and up to 90 days after
A: The main issue with babies is undernutrition or malnutrition, which becomes obesity later in childhood and which is a major problem. There are also allergy issues that present during the lactation period and as babies begin to consume solid food such as mash or juices. Mexican families quickly acclimatize babies to the family diet, which causes serious obesity problems. The health system ends up dealing with the fallout from that. Q: To what extent do you carry out R&D in Mexico for specific formulas and conditions? A: We launched a significant project in the second half
Q: Is this formula designed for both healthy babies and
of 2017 to develop a new formula that addresses the
those with complications?
needs of Mexican babies and toddlers. The project is
A: This product would be suitable for healthy babies
being developed with renowned players in the public and
who require formula because their mothers cannot
private sectors that are dedicated to this matter.
breastfeed, for example. Infacare is part of a portfolio that we acquired in 2013. Infacare 1 is for babies aged
Q: What factors are driving growth in your infant nutrition
0-6 months, Infacare 2 for those aged 6-12 months and
sector and what are your expectations for 2017?
Infacare 3 for those over 12 months. We have another line
A: We saw significant growth in our nutritional segment
for children who have a medical complication. However,
due to the fact that, for the first time in many years, we won
we always emphasize the importance of breastfeeding
a public tender to provide nutrition for babies aged 0-6
as part of our core values and principles.
months and 6-12 months. This broke paradigms because for 20 years the tender had been won exclusively by one firm.
Aspen Labs is a South African pharmaceutical company, the
Our milk sales are not growing in the private sector due
largest listed on the Johannesburg Stock Exchange. Present in
to complicated market conditions, although we hope that
over 150 countries, it specializes in OTCs, infant nutrition, male
the launch of the new versions of Infacare will help us
and female health and cardiology
resume growth in this sphere in 2017.
VIEW FROM THE TOP
AESTHETICS TO OVERCOME ECONOMIC DOWNTURN VÍCTOR ANAYA CEO of Merz Pharma
Q: Merz Pharma enjoyed 13.2 percent revenue growth in
Mexican market. We acquired a patch in 2016 that helps
Latin America in 2015-2016. How important is Mexico to
remove tattoos quickly and with fewer inconveniences for
Merz’s regional strategy?
patients and doctors. The process for removing a tattoo
A: Mexico is Merz’s most important market in Latin
is long, painful and requires many sessions but this patch
America and the fourth most important worldwide.
reduces the time, pain and number of sessions. This is one
Latin America is a young region for us: our Argentinian
of the areas we are entering.
subsidiary was opened in 2016 and our Colombian and Brazilian units just before that. Merz’s financial year
Q: What possibilities are there for Mexican and Latin
runs from July to June, so the 13.2 percent growth is for
American companies to benefit from the Merz Corporate
the second half of 2015 and the first half of 2016. Our
Venture Capital Initiative?
aesthetics division saw the most growth in this period.
A: We are incentivized to look for new opportunities
Globally, the company is focusing on the aesthetics and
for development, not only globally but also locally. We
neurotoxins markets. The rest of our portfolio consists of
are working with a local company that may become an
what we call regional products.
opportunity for Mexico and, if it works, we will later make it a global opportunity. Our company invests through the
Q: What is Merz Pharma’s strategy to expand its portfolio?
venture capital fund and through other channels as the
A: Merz Pharma invests part of its profit annually in R&D,
Merz family has different businesses.
mostly in aesthetic medicine but also in research on neurotoxins, an important element in the study of the
Q: What is Merz’s strategy for growth in Mexico?
nervous system. Merz is working to find new applications
A: We believe we still have great organic growth potential.
for this compound. The company is also expanding its
The aesthetics market in Mexico is just starting to develop.
portfolio through strategic acquisitions such as Ulthera, a
The country’s economic situation has slowed the aesthetic
medical devices company that develops applications for a
market down a little, but we believe that growth will resume.
therapeutic ultrasound platform technology, and Anteis, a manufacturer of biomedical products. In 2016, we closed
We are interested in growing through new products and
the purchase of ON Light Sciences, a US company.
offering new options to patients. This represents a great opportunity as we have several product lines in aesthetics
Q: What solutions does Merz Pharma offer in the area of
in the US and in Europe that are not yet available in Mexico
personalized medicine?
and that would be attractive to the Mexican consumer.
A: Our personalized solutions involve neurotoxins and have specific medical uses, with applications in spasticity,
Q: What are Merz Mexico’s plans for 2017?
dystonia and blepharospasm. We have also published
A: The deceleration of the Mexican economy has created
the results of an important clinical study called Tower.
a greater challenge to continue growing at the same rate.
These results show that Xeomeen, our toxin, can provide
During 2017 we want to continue bringing new options to
personalized options for patients, allowing doctors to adapt
doctors and patients and to see growth in the markets in
treatments to each specific patient, including higher doses
which we already participate.
and different intervals. The toxin is available on the National Formulary and through the private market. Merz Pharma is an international pharmaceutical company
Q: Which aesthetics products will be introduced to Mexico?
focused on aesthetic medicine and neurotoxin solutions. Its
A: We have an extensive global line and we are analyzing
main therapeutic areas are medical dermatology, liver diseases,
options to see which can be adapted to the needs of the
Parkinson’s and Alzheimer’s
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INSIGHT
BE AWARE: SKIN CARE NOT JUST FOR WOMEN GERALDINE WAKED Director General of Sesderma
Skin diseases are varied and although skin-care advertising
September 2016 shows the extent of air pollution globally: 92
often targets women, men and particularly children are
percent of the world’s cities breathe polluted air, and so does
vulnerable groups that are often overlooked. “We need to
much of Mexico with the worst rates seen in Monterrey, Toluca
learn to have healthy eating habits but also to keep our
and Salamanca, according to a WHO 2016 report.
skin healthy. Skin cancer is not an adult disease,” says 212
Geraldine Waked, Director General of Sesderma, a Spanish
The male population is another segment that is often
dermatology laboratory founded in 1989.
overlooked, Waked says. “Men are beginning to use solar protection more and more,” says Waked, explaining that
“We have to raise awareness among the population and
men suffer from the same skin diseases and conditions as
among mothers that they should not send children to school
women, although skincare is mostly perceived as a female
without sun protection,” Waked says. She points out that 100
market. “Publicity is always focused on women, but really, the
percent cloud coverage only blocks 20 percent of UV rays.
purchasing level is similar between men and women,” she says.
Also, SPF only blocks UVB rays, responsible for sunburn, but not UVA rays, responsible for premature aging and cancer. In
The Mexican Society of Oncology (SMeO) reports that
addition, these rays are stronger at higher elevations, a factor
the number of malignant melanomas doubles every
to be considered in mountainous Mexico that sits at a mean
decade and that 5-10 percent of skin-cancer patients
elevation of 1,111m. Add in pollution that is prevalent in cities like
have a family history of the disease. “Skin cancer is the
the country’s capital and there is a double threat to children’s
worst skin affliction. It is becoming increasingly common,
health. “Children in cities like Mexico City often are not taught
especially in Mexico,” says Waked. One of the main issues
about pollution and even when an emergency contingency is
faced in Mexico is the lack of awareness around skin
in place, there is never talk of protection,” Waked adds. The
protection. Many people do not wear sun screen, even
WHO notes that children are more at risk of suffering from
though Mexico City sees an average of 200-270 hours
side-effects of air pollution due to the immaturity of their
of sun per month. “The dermatology industry’s eyes are
respiratory organs, and that those in middle-income countries
set on Mexico as the country with the most potential in
are among those most impacted. A map the WHO released in
Latin America,” says Waked.
VIEW FROM THE TOP
SHIFTING MARKET DEMANDS ADAPTABILITY ALEJANDRO LÓPEZ Founder and CEO of IM Natural
Q: What is IM Natural doing to accomplish its expectations
Q: What are your distribution channels?
for 11 percent growth in the cosmetics industry by 2019?
A: We have two levels of self-service partners in Mexico:
A: The company is changing its internal structures so it
regional, such as Casa Ley in Sinaloa and Operadora
can procure the necessary merchandise to supply national
Futurama in Chihuahua, and national, such as Walmart,
demand. Competition is also growing daily, so we update
Chedraui, Soriana, H-E-B, Farmacias Guadalajara and
all our resources constantly because the Mexican cosmetics
Farmacias Benavides. We started in naturist retailers and the
market can be unpredictable. Although trends may vary on a
market pulled us toward new distribution channels. IM Natural
daily, weekly and monthly basis, in general when the economy
then started exporting, assembling for foreign companies,
contracts it is reflected in lower demand but sometimes the
licensing its products and finally developing private labels
market does the contrary and our main customers place
for national companies such as ISSSTE-marts, Farmacias
bigger purchasing orders than usual. We must be wary of
Benavides and Almacenes García.
transnational companies noticing this bipolarity. L’Oréal, for example, whose products are meant for a wealthy, high-
Q: How would you describe IM Natural’s success in entering
income market, may notice that our products, destined for
foreign markets?
the middle and lower-income segments, have higher demand
A: We have had mixed results. IM Natural exports its
strength in terms of volume and bulk, so it turns its focus
products and also negotiates licensing representations and
to our market. Those companies retain their prestigious and
manufactures for foreign companies. The company has
high-end market while also producing products to compete
entered new foreign markets thanks to our distributors and
with midlevel companies.
the support of ProMéxico. We have exported our products to Europe and South America and recently we started selling our
Q: What is your focus in terms of internal corporate changes?
products in the US, performing especially well in states with
A: The goal of these corporate changes is to enhance
a high concentration of Latinos, such as California, Texas and
efficiencies in product delivery, quality, replenishing delivery
Illinois. IM Natural is negotiating with new distributors such
reach and general operational effectiveness. This internal re-
as Walmart, CVS and Walgreen’s to enter other markets but
engineering entails a commercial re-engineering.
these processes are lengthy.
IM Natural is a traditional company known for its mamey seed
The company has faced various levels of market openness in
oil mascara. However, we sell a great variety of eye mascaras
countries that recognize COFEPRIS. For example, we have
made of different ingredients, which provide different
already entered Colombia. Argentina is more difficult but
benefits and different presentations. We also have a wide
easier than Chile, while Brazil is virtually impossible. In other
range of face creams and lotions that will be affected by the
markets such as Peru and Ecuador, IM Natural is deciding
re-engineering of our operations. We are changing the image
whether to export or produce for local companies. The
of our face creams, creating new creams and formulating
company has received sanitary registrations in Bolivia to
new lotions. IM Natural is known for using a variety of natural
produce mascara. IM Natural produces for a Mexican-owned
ingredients like chamomile, snail slime, argan and marrow
company in Australia and we are about to grow its cosmetics
in its cosmetics. This company was the first to use mamey
line with new creams and facial products.
seed oil, which enhances eyelash growth, and traditionally employs national ingredients. It is important for some of our customers that animal ingredients are not used in our
IM Natural has been focused on the naturist segment and
products while other countries require that our mascaras
cosmetics industry since its foundation in 1989. This company
contain no parabens. One of our policies is not to test any of
uses natural colors and pigments and has never tested on
our products on animals.
animals. It promotes environmental protection
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VIEW FROM THE TOP
ANCESTRAL REMEDIES, EUROPEAN TECH, MEXICAN-MADE ADRIANA AZUARA CEO of All4Spas and Agave Spa
214
Q: To what extent is the demand growing for the natural
to pollution, the skin gets thinner due to pollution and
products Agave Spa produces?
people want face-lifts to appear younger. Our after-sun
A: Everyone wants natural and organic products but the
treatments are also popular because the sun can be
consumer needs to be aware because nothing is completely
extremely damaging and we need to not only protect
organic or natural. Talking about natural ingredients means
ourselves at the beach but afterward as well.
that we do not use chemicals that damage the skin or lifestyles. Many people now want natural products that
Q: How aware is the population of the need to protect
produce tangible results, which is why we combine the
skin against pollution?
ancient with the modern. We use ancestral remedies and
A: People need to protect their skin against pollution,
the knowledge of the Mayans combined with European
even indoors where it can sometimes be more polluted
technology, dermatological tests and exact combinations
because people are crowded into a room or working long
to ensure it provides accurate results for the body and
hours under artificial lighting, among other factors that
skin. We want to create rituals that are suited to a personâ&#x20AC;&#x2122;s
produce free-radicals that damage and destroy skin. It is
lifestyle so that the effect of the treatment not only lasts for
necessary to use anti-oxidants to protect the skin against
a moment but actually changes energy points. We choose
this, and also wrinkles and acne.
23 points on the body that energy flows through and these can be opened and closed. If those points hurt when
We have discovered that the blue agave plant is full of
pushed, they are blocked. We unblock these energy points
active ingredients that are good for the skin and hair.
and with obsidian stones we loosen the energy left in the
It contains a powerful antioxidant, a moisturizer and
body and then use massage oils containing tepezcohuite, a
stimulates the collagen in skin. The latest research shows
Native American plant, and other ancestral herbs.
that there is a fungus on blue agave leaves that has the same properties as hyaluronic acid. It is a powerful plant.
Q: What factors are driving your growth? A: When people come to Mexico, they want to try Mexican
Q: What alliances allow you to source your ingredients?
products and this company meets that need. In March 2017
A: I work directly with agave farmers. We choose our agaves
we launched an unscented line that can be mixed with
and then create our phyto-complex and other products
natural herbs and fruits, allowing spas to create their own
from the agave leaves, plant, cooked plant, fermented plant
scents like alchemists. There is also a new tepezcohuite
and other parts. This is because each part of the blue agave
line combined with blue agave for the face. This is what
has different properties for different things. We source
will make it a success: everyone wants to mix and play and
coconut oil from Guerrero and we have recently launched
create their own unique products.
a massage candle without paraffin. The clay bases were created by Mexican artisans, each handmade and dried
Q: What are the main skin care needs you have detected
in the sun. We work directly with Mexican farms for all
in Mexico?
ingredients, such as those that make up our four blends of
A: Dryness and the resulting wrinkles are a common
essential oils. They contain San Juan herbs, passion-flower
concern, as are hyper pigmentation and lifting. Due
and hibiscus. These ingredients are unique and require cooperation with Mexican farmers.
Agave Spa is a luxury Mexican cosmetics range created with
We will soon launch videos on how we work with
natural and traditional Mexican ingredients, the main one
communities that have four generations of experience in
being agave. All4Spas is a retailer of every piece of equipment
what they do. Instead of growing our lines uncontrollably,
needed for spas
we prefer our products to be exclusive and luxurious.
VIEW FROM THE TOP
SUCCESS BREEDS NEED FOR CASH, TALENT RICARDO SPÍNOLA Director General of Farmapiel
Q: How has Farmapiel’s expansion plan impacted its business
anti-aging products contain topical vitamins for the skin.
operations and what is the end goal?
These products are used at night after washing the face and
A: Since changing stockholders around three years ago,
neck and hydrate and replenish the skin with vitamins.
we have been expanding quickly and are engaging in an aggressive growth strategy to become a big dermatology
Q: To what extent is the Mexican population focusing on its
player in Mexico. We have enjoyed triple digit annual growth
dermatological needs?
over the past year. This is a good result but it also increases
A: The market has grown significantly and, as the economy
the need for cash, changes in business processes and new
grows, people take more care of themselves. For example,
people. We are now building the organization for the future.
more people go to gyms and because they are exercising more, people are more aware of their image. Twenty years
We launched 12 products in 2016, split between the Rx
ago, teenagers with acne treated it by using soap. Now,
segment, dermo cosmetics and a new line of aesthetics and
they go to a physician and then a dermatologist, who also
we have made advances on our manufacturing plant in San
looks at the accompanying parent and might point out un-
Juan del Rio, Queretaro, which we acquired from GSK two
diagnosed diseases such as rosacea, dark spots or adult
years ago. It has been remodeled and has received approvals
acne. Innovations in dermatology mean treatments no longer
from COFEPRIS. At that plant, we manufacture for local and
irritate so much while the combination of ingredients provides
international companies, which is the reason we undergo
better treatment. We have an acne product, for example, that
many audits. We are also working on getting FDA approval
combines an antibiotic and a retinoid. The latter helps the
for next year. We have been reorganizing the company and
skin regenerate while the antibiotic fights the infection. The
we are close to seeing positive financial results. Measuring
general derma market grows on average 5-7 percent per year.
market share can be complicated so we use QuintilesIMS and
This covers OTCs, Rxs and cosmetic products.
ATV as yardsticks. Three years ago, we were ranked 84th for dermatology in Mexico. We are now 15th.
Q: What is Farmapiel’s strategy for expansion? A: We want to consolidate the company, export products
Q: How will the company use the extra income generated?
and establish subsidiaries outside Mexico, in the Latin
A: We will be paying off our debts first, since the
American region. Ideally, we will start with Central
management of the company and the complexity of rapid
America and the Caribbean, due to proximity. We will
growth can be difficult. The demand for working capital is
then move to selected countries in South America. If
high with triple-digit growth, so we need to manage the
we have confidence in Mexico, good things can happen.
cash cycle closely. A steep sales curve is nice to see but is
Our factory is generating employment opportunities, the
costly. Products need to keep moving but distributors will
economic benefits of our production chain trickle down
not risk buying something that will not sell.
and the company can grow with the right people, products and confidence. With backup and investment from the
Q: What is the company’s best-selling product?
international private equity fund we work with, we have
A: We have many best-selling products such as our
managed to grow exponentially. Hopefully many other
prescription products for acne and whitening products for
Mexican companies will follow this rapid growth route.
fighting dark spots on the skin, which can be caused by sun exposure. We also have products from Europe that treat hair loss, such as Bioscalin, a top-selling product in Italy
Farmapiel is a Mexican pharma laboratory with 24 years of
and France, high-tech-enhanced shampoos and lotions and
experience that is focused on dermatology. It has innovative
psoriasis products. All our solar protection products are
and quality solutions in therapeutic derma areas such as acne,
hypoallergenic and contain no perfume or color while our
dermatitis, depigmentation and hair loss
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VIEW FROM THE TOP
R&D GOALS FOCUS ON HEALTHIER SKIN, ALLERGIES CÉDRIC ERTLÉ CEO of Expanscience
Q: What are Expanscience’s main business lines in
are doing anything about their skin during pregnancy in
Mexico?
Mexico, so we want to create this new market.
A: Our Mexican business leans on two pillars. First is
216
the Mustela brand, which includes products for babies,
Q: How is Expanscience’s osteoarthritis portfolio
children and new and expecting mothers. The second pillar
addressing the new challenges brought about by Mexico’s
is our osteoarthritis solutions portfolio, with medicines
aging population?
and medical devices for the elderly. We put the same
A: We have a drug called Piascledine 300, a solution
effort and a similar investment into both business lines.
designed to reduce pain and the progression of osteoarthritis. It is a leading treatment in the rheumatology
Q: What is the company’s R&D focus in Mexico?
pharmaceutical market and it was also developed to lower
A: Expanscience has three R&D goals for Mexico. First, we
the use of nonsteroidal anti-inflammatory drugs, which
want to launch our Mustela products designed for specific
usually have secondary effects. Our Euflexxa TA treatment
skin types. It was previously believed that environment
can help prevent surgery in advanced cases. It consists
caused skin to become dry or atopic but we recently
of injecting hyaluronic acid into the damaged articulation
discovered that all babies are born with a certain skin
for six months. This will create a buffer solution that
type. We are in the process of bringing to the market
replaces cartilage lost due to osteoarthritis. We expect
specialized products for babies who have either dry or
to become leaders with this drug – so far it became the
normal skin types, in addition to a product for babies who
second best-selling product in Mexico. We are seeing
have a higher probability of developing allergies.
significant growth from prescription drugs, representing 35 percent of our sales. We have included a collagen
The second priority is to become stronger in the diaper-
supplement called Orangel in our osteoarthritis portfolio,
cream market and to introduce Mexican parents to
a product that produces a great effect with just 40mg of
this product, as many still use powder. The volume of
active ingredient. Although our competitors have similar
this market is 9 million units per year, led by Bayer’s
products, those need 10g or 20g to produce the same
Bepanthen, which sells 3 million units per year. However,
effect. Also, we can offer capsules of this supplement
the market could be even bigger as 2.3 million babies are
while others offer dissolvable medicine, so we expect
born annually in Mexico. Our diaper cream is designed
great success with this product.
to prevent, calm and repair rashes and it is registered as a medical device by COFEPRIS and recommended by
Q : H ow i m p o r t a n t i s t h e M ex i c a n m a r ke t fo r
the Mexican Organization of Dermo-Pediatrics. When we
Expanscience’s global business?
first entered Mexico in 2002, we sold around 250,000
A: Mexico is important for Expanscience because it is
units annually. Now we are focused on reaching 1 million
one of the company’s four strategic subsidiaries, along
units. Our third development area is skin care for mothers.
with Brazil, Russia and the US. In 2016, Expanscience saw
Most pregnant women fear stretch marks, so we have
30 percent growth in Mexico, 56 percent of which was
developed a daily cream and oil that guarantee the
provided by the osteoarthritis business and 26 percent
reduction of stretch marks by 96 percent. Few women
by the Mustela line. Mexico is also the manufacturing base for the Orangel OTC brand. The raw material comes from the US and the product is manufactured in Mexico with
Expanscience is a French pharmaceutical and dermo cosmetic
a partner company, Salutary. Euflexxa in Mexico is also a
laboratory focused on wellness solutions for newborns,
result of a partnership with Ferring, the pharmaceutical
teenagers and the elderly. Its main lines, Mustela and
company in the US that holds the license for Euflexxa in
Piascledine 300, are present in almost 100 countries
every country except Mexico, where we have exclusivity.
VIEW FROM THE TOP
ACTIVE AND EXPANDING FABIÁN BIFARETTI CEO of Sports World
Q: How important is it for Mexican companies to work
A: New gyms and studios are constantly appearing and
together, such as Sports World does with Grisi?
innovating with new forms of exercising. The competitive
A: One of the major advantages is the direct contribution
advantage we have is that we can easily adapt to new
to the national economy via the increasing quality of goods
trends and offer those new activities within our facilities
and services that can be attained through joint efforts.
at a very low or zero cost. We have a comprehensive offer
These alliances also foster competition and consumers
that we are constantly innovating and adapting to new
reap the benefits of a bigger and more balanced market.
trends in the market.
Q: Membership also comes with access to Dentalia. What
Q: How many new clubs do you expect to open in 2017 and
is the strategy behind this?
how will you finance that expansion?
A: In line with our wellness strategy, we keep adding
A: During 2017, we have opened four clubs and four more
different services and products related to enhancing
are under construction with the pre-sale of memberships
our customers’ health and wellbeing. Dentalia offers
ongoing, so we are in line with our expansion plans for
our customers two free-of-charge dental cleanings per
the year. Most of these openings have been and will be
year as well as significant discounts on all their services.
financed with debt.
Some of our additional health benefits are yearly blood tests, nutritional and 24-hour medical phone assistance,
Q: Last year, Sports World mentioned wanting to expand
two ambulance services per year and special medical
outside of the capital. What growth and results has it
insurance discounts.
seen from this? A: We have 15 clubs outside of Mexico City and its
Q: To what extent has Sports World incorporated activities
metropolitan area. We have had a very good acceptance
for children?
and positive results in the states we are present in and we
A: At Sports World we have an area of approximately
plan to expand to other states. In 2017, three of our eight
400m named FitKidz that is designed exclusively for
new clubs will be outside of Mexico City. In the coming
children. They can join more than 30 different activities
years, most clubs will be opened outside of Mexico City
such as SafeSplash, aerial dance, indoor climbing, tae-kwon-
but we will continue to look for opportunities in the
do and baby gym, among others. The goal is to start the
capital.
2
habit of exercising from a very early age and introduce children to a wellness lifestyle.
Q: What are your overall revenue expectations for 2017 and
Q: How can gyms inspire more people to be active and help
A: Our objective is to open eight clubs during 2017,
lower the chronic disease burden in Mexico?
achieving 19-21 percent growth in revenues and an
A: Gyms are able to link sedentary people with a more active
EBITDA margin over revenues of more than 17 percent. In
life, not only through strength and cardio equipment but with
terms of international expansion, we do not have specific
a robust wellness orientation that includes group classes,
plans yet but we are open to opportunities that might
meditation, yoga, Pilates, steam rooms, saunas, massage
come either through organic expansion or acquisitions.
are there any plans to expand internationally?
services, nutrition experts, facilities for kids, swimming pools and a Feel Healthy Program (for people with T2D and hypertension), as well as many other special activities.
Sports World is a chain of high-end gyms in Mexico that aims to promote a well-rounded healthy life, going beyond
Q: As new gyms appear, how is Sports World prepared to
providing a space to exercise with classes, nutritional advice
rise above the competition?
and other health services
217
VIEW FROM THE TOP
VIRGIN MARKET A POTENTIALLY GREAT NICHE MIGUEL MARÍN CEO of Industrias Sintoquim
Q: Sintoquim turns 40 this year. What are the company’s
begun wearing make-up from a younger age and adding
most important achievements in these four decades?
sun protection.
A: One of the biggest achievements has been consolidation
218
and remaining a 100 percent Mexican company. We began
Q: How aware is the Mexican population that it must care
with focused distribution for food, pharmaceuticals and
for its skin against the sun?
cosmetics and afterward we entered manufacturing. We
A: I think skincare is more a theme of vanity than health.
produced aluminum clorohydrate for over 20 years and
As a result, skincare is much more about avoiding
during this period we started with the distribution of other
wrinkles, blemishes, pigmentation, cellulitis and stretch
raw materials. That is our current business model. We are
marks because these are the issues that people worry
venturing into nutritional supplements, particularly those
about. Sun care is not growing at the pace it should but
that benefit skin, hair and nails.
it is improving. We need to get into the habit of doing this every day.
Q: How will you ensure your supplements stand out from those already in the market?
Q: What are the greatest challenges and opportunities
A: Mexico is a virgin market for supplements and there
you have seen in skincare and cosmetics?
is a lower culture of prevention here. We believe there
A: There are two macro trends in the cosmetics industry.
is a great market niche and we are bringing specific
The first is multifunctionality. People prefer one product
ingredients that will add value. One of the most important
that does many things, which is where the success
elements of these supplements is organic and bioavailable
of BB creams stems from. The second main trend is
silicon. Part of Sintoquim’s contribution is ensuring the
personalization. Products are increasingly specialized and
product will be absorbed upon digestion. “In and out” is
consumers want a cream adapted to their skin type. There
a trend we have seen in other countries and that we want
are now devices that measure skin type, evaluating which
to bring to Mexico: products taken orally and applied
type of make-up is best for that person. This technology
topically that will act in synergy to achieve more visible
enables such personalization. If companies can find a
results in less time.
way to make these two trends complementary, they will achieve great success.
Q: In Mexico there is little culture of prevention. What is your strategy to achieve your sales goals in supplements?
Q: What type of technology are you implementing in
A: Data show it is more expensive to treat an illness
your products?
than to pay for prevention. It is better to convince
A: The cosmetics industry is one of the most dynamic because
people who may become diabetic to change their diet
it follows fashions and the color of the year, the ingredient of
and to exercise. The government has realized this and
the year, or the new claims that arise. Some concepts that
is promoting prevention. Mexico tends to copy more
were previously unheard of are now fundamental. Consumers
advanced countries and what was launched around five
are increasingly informed and aware of the ingredients in
years ago in Japan or the US is now trending in Mexico.
their products and the benefits. We are bringing new
There are many people that go to gyms, consumers have
technology propositions to the Mexican market. We work with ingredients houses that are researching today what will be launched in five to 10 years. There are now many products
Industrias Sintoquim is a Mexican family-owned company
that aim to energize mitochondria in cells, or prevent the
focused on the commercialization of prime materials and other
accumulation of proteins, or promote collagen and elastin,
specialties for the cosmetics industry. It operates in sun care,
for example. These products promote certain functions
skincare, make-up, hair and color
directly in skin cells.
219
An athlete from the swimming academy SAFESPLASH
Q: Where do you source your ingredients?
clients to use as a base. For larger companies, we can offer
A: We use ingredients from different parts of the world,
the product within the timeframe and in the quantity that
such as the US, Monaco, Germany, Brazil and Japan. We
they require. We are also able to offer a safety stock to
have just signed an agreement with an Indian company
cover any eventuality. The other two fundamental drivers
and we also work with Chinese sources. Our goal is to
are the quality of products and price. These elements make
have a broad portfolio to offer complete solutions to the
Sintoquim a market-leader and persuade clients to work
market so a client can buy everything they require from
with us instead of the competition. Should a client wish to
us without needing to look elsewhere. Much of our added
develop any type of cosmetic, they can find almost every
value lies here.
ingredient with us, except for the very simple ones, such as mineral oil, ethylic alcohol, etc. Clients do not have to
Q: How have you achieved your current market presence?
waste time looking for 10-15 suppliers.
What strategy will you employ to boost it? A: We are the strongest player in hair color and make-up
Q: What strategy will you implement to continue
color and we are also strong in skincare. Our main virtue
growing?
is that we have suppliers and commercial partners that
A: The main challenge is adapting to change. Companies
are classed among the top three players of their specialty.
that subsist and are successful are those that identify new
We have a good mix between global and local companies.
niches and trends, advancing and changing faster than
We sell to Lâ&#x20AC;&#x2122;OrĂŠal, Avon, Unilever, Jafra, IM Natural, Grisi
others. We are in the midst of many changes: replacing
and Genomma Lab, in addition to catalogue sellers such
our operating system, obtaining ISO certification and
as House of Fuller, Zermat and Arabela.
redesigning our commercial model to be more efficient and more agile. The market is also demanding lower prices
Q: What is the added value Sintoquim offers that retains
as big companies in particular are looking to improve
customers?
cost-efficiencies. A final challenge will be to generate
A: We have a marketing division that researches trends
alternative markets. I am confident that supplements
from around the world. In addition, our applications
combined with topical products will be among the most
laboratory generates complete proposals or formulas for
important market niches in coming years.
INSIGHT
REGULATORY CRACKDOWN CREATES HERBAL OPENING IGNACIO LUNA CEO of Biofarma
220
The authorities charged with regulating health matters
He explains that the herbal medicine industry is
have launched a war on so-called “miracle” products. In
experiencing a boom that would not have been
2015, COFEPRIS removed 5 million products from sale and
thought possible 25 years ago, when the company was
a further 1.4 million in 2016. This extra vigor in regulating
established. “It has grown significantly in monetary terms
Mexico’s herbal medicine market has left few competitors
and in numbers,” he says. This does, however, bring its
standing — and created an opening for companies like
own set of problems because herbal medicine is copied
Guadalajara-based Biofarma.
and sold on the black market as much as pharmachemical medicine. “NOM-059 dictates that companies have to
“In terms of herbal supplements, Mexico is much more
ensure packaging does not fall into the wrong hands,”
advanced in regulation than the US,” says Ignacio Luna,
says Luna, explaining how Biofarma helps reduce the
the company’s CEO. He explains that in the US, companies
opportunities for counterfeit medicine by ensuring its
are free to manufacture their products but need to self-
packaging remains safe and its products cannot be
regulate because a bad product will quickly be the subject
tampered with.
of litigation. “Mexico has done an incredible job. It has very strong regulations,” he adds.
In addition to adherence to strict regulatory standards, certification from the FDA, the National Safety in Food
Due its strong regulations, COFEPRIS is recognized as a
(NSF), strict quality control and GMPs reinforce Biofarma’s
reliable sanitary authority in many Central and South American
strong position in the market. The company will continue
countries. The same agreements that enable pharmachemical
to release new products including a herbal remedy for
medicine to be exported to those countries also apply to
menopause, vitamin gummy bears and an anti-obesity
herbal products. “I believe Mexico’s regulation is increasing.
product. “We have noted the same opportunity in the
The treaties we have with different countries include herbal
obesity market as the joint product market,” says Luna.
medicines with GMPs and NOM-059-SSA1-2015. We receive the same treatment as a generic or any other kind of
Biofarma operates four lines of business, namely OTCs,
medication,” Luna says.
herbal medicine, remedies and supplements. Its bestselling product is glucosamine, which provides pain
NOM-059-SSA1-2015 regulates the manufacturing and distribution of medication
relief for joints with osteoarthritis, where it claims over 40 percent market share. While figures for that particular segment are hard to come by, Euromonitor estimated in September 2016 that the herbal and traditional products market in Mexico would be worth MX$9.5 billion (US$527 million) by 2021, not including vitamins and supplements which it pegs at a potential MX$23.2 billion (US$1.3 billion) for the same year.
The National Association of the Nutritional Supplements Industry (ANAISA) is working to further improve regulation
With a presence in Mexico, the US, Peru, Guatemala,
surrounding nutritional supplements. The appellative for
Colombia and Costa Rica, Biofarma has plans to expand
the products is one of the first objectives. “In Mexico our
to Panama, Brazil and Chile in 2017 — large markets that
products are known as nutritional supplements but they do
offer opportunities and consumer behavior similar to
not supplement. They are more complements, as our diet is
that of Mexico. “These consumers appreciate Mexican
rich in vitamins and minerals. Our products fill the gaps in our
products and view us with respect, which is good for
diet,” Luna says.
us,” says Luna.
ROUNDTABLE Prevention is the key to good health but action usually derives from awareness. Today, a greater percentage of the population is cognizant of the dangers posed by headline-grabbing conditions such as cardiovascular, diabetes and obesity. There is much less mindfulness regarding the impact and subsequent consequences of environment on the skin from a daily onslaught of pollution, sun and dirt from the outside and poor nutritional habits from the inside. Mexico Health Review asked relevant players in the dermatology industry about
WHAT FACTORS IMPEDE SKIN CARE AND WHAT ARE SOME PROTECTIVE MEASURES?
the level of awareness of the general population of their dermatological care needs.
People need to protect their skin against pollution, even indoors, where it can sometimes be more polluted because people are crowded into a room or work 221
long hours under artificial lighting. These are factors that produce free-radicals that damage and destroy the skin. It is necessary to use anti-oxidants to protect the skin against this, and also to protect against wrinkles and acne. We have discovered that the blue agave plant is replete with active ingredients that are good for the skin and hair. It contains a powerful antioxidant and a moisturizer and stimulates the collagen in skin. The latest research shows that there is a
ADRIANA AZUARA CEO of All4Spas and Agave Spa
fungus on blue agave leaves that has the same properties as hyaluronic acid. It is a powerful plant.
The market has grown significantly and people are taking more care of themselves as the economy grows. Twenty years ago, teenagers with acne dealt with it by using soap. Now, they go to a physician and then a dermatologist, who also looks at the accompanying parent and might point out un-diagnosed diseases such as rosacea, dark spots or adult acne. Innovations in dermatology mean treatments no longer irritate so much while the combination of ingredients provides better treatment. We have an acne product, for example, that combines an antibiotic and a retinoid. The latter helps the skin regenerate while the antibiotic fights
RICARDO SPĂ?NOLA Director General of Farmapiel
the infection. The general derma market grows on average 5-7 percent per year.
I think skincare is more a theme of vanity than health. People want to stay young. As a result, skincare is much more about avoiding wrinkles, blemishes, pigmentation, cellulitis and stretch marks because these are the issues that people worry about. Sun care is not growing at the pace it should but it is improving. People now use sun block but they still have the idea that this should be done only at the beach; we need to get into the habit of doing this every day. The cosmetics industry is one of the most dynamic because it follows fashions and the color of the year, the ingredient of the year, or the new claims that arise. Some concepts that were previously unheard of are now fundamental. Consumers are increasingly informed and aware of the ingredients in their products and the benefits.
MIGUEL MARĂ?N CEO of Industrias Sintoquim
A robotic arm sorts blister packages according to the number of blisters it contains
LOGISTICS & SUPPLY CHAIN
10
In a growing pharma and medical market such as Mexico, efficient logistics are vital for healthcare businesses. Companies are moving products and devices nationally and internationally while looking for the fastest and safest way to do it. In Mexico, the challenge of access to medicine is not only economical, it is also geographical. Some states are difficult to access due to rough terrain, long distances or security concerns. Many companies have also commented on the rise of the black market in Mexico, which makes guaranteeing the authenticity and chain of custody of a product all the more vital. The greatest challenge for Mexican logistics and components providers is thus ensuring the supply chain in this expansive and sometimes dangerous environment.
This chapter explores the strategies of logistics companies for dealing with and preventing these security problems, in addition to the high-tech innovations they have implemented in their fleets. While some are implementing apps and designing temperature controlled trucks, others are working on electromagnetic locks to prevent merchandise theft and putting systems in place to chase down thieves.
223
CHAPTER 10: LOGISTICS & SUPPLY CHAIN 226
ANALYSIS: Rough Terrain: Navigating Mexico’s Logistics Segment
228
VIEW FROM THE TOP: Víctor Soto, Levic
229
VIEW FROM THE TOP: Rafael Figueroa, Aeroméxico Cargo
230
VIEW FROM THE TOP: José Alberto Peña, Grupo Marzam
232
INSIGHT: Daniel Pardo, Medistik
233
INSIGHT. José Aedo, SINGREM
234
VIEW FROM THE TOP: Mario García, GNK Logística
236
VIEW FROM THE TOP: José Eric Delgado, Sicamsa
237
VIEW FROM THE TOP: Ingrid Ritter, UPS
238
VIEW FROM THE TOP: Erick Jiménez, Majicarga
239
VIEW FROM THE TOP: Sergio Chabolla, ANADIM
240
VIEW FROM THE TOP: Alberto Wicker, Signufarma
241
VIEW FROM THE TOP: Alonzo Autrey, DVA Mexicana
242
VIEW FROM THE TOP: Manuel Sánchez, Diphsa
243
VIEW FROM THE TOP: Abraham Franklin, Grupo Franklin
244
VIEW FROM THE TOP: Ángel De Vecchi, VECO
245
VIEW FROM THE TOP: Edgar Arteaga, Inframedica
246
VIEW FROM THE TOP: Guillermo Martorell, Grupo RFP
247
VIEW FROM THE TOP: Antonio Pascual, ANAFARMEX
248
ROUNDTABLE: How are You Overcoming the Logistics Hurdles in Mexico?
225
ANALYSIS
ROUGH TERRAIN: NAVIGATING MEXICO’S LOGISTICS SEGMENT Mexico presents a great number of logistics challenges but just
To combat this, trucks are fitted with GPS,
as many opportunities. Geography, gas prices and insecurity
cameras, electromagnetic locks and many
fall on the minus side of the ledger while increased demand
have an alarm system to quickly alert local
for transportation and storage are on the plus side
authorities who can then track down the
Mexico can be a tough place to navigate. The country
with private security at the request of the client, often
is the 14th territorially most expansive in the world,
for high-value cargo.
thieves. In certain cases, transports are sent
according to the CIA Factbook, with a mean elevation
226
of 1,111m above sea level. It is no surprise then that
In addition, in January 2017, the Mexican government
transporting goods through rugged mountains, low
eliminated gas subsidies from most Mexican states,
coastal plains, high plateaus and deserts is no easy feat,
which meant an increase in the costs of logistics
especially when the goods are as sensitive to temperature
providers and provoked protests throughout the country.
as in the healthcare industry. The distances also represent
However, companies are already working on strategies
a challenge: Mexico’s 1,943,945km2 of land extend from
to counteract this. “2017 will be a challenge from an
the US in the north, to Guatemala and Belize in the south.
exchange-rate perspective,” says José Alberto Peña, Director General of Grupo Marzam. “For us, another key
KEEP COOL
component is gasoline, which has a direct impact on
To overcome such logistical hurdles, distributors travel
our expenses. The exchange rate will have an impact on
by land, sea and air employing the latest technological
the industry as a whole because 90 percent of material
advances. Temperature control has become a basic-must
used to produce medicines is imported. Before, perhaps
among Mexico’s varied climates, ranging from tropical
businesses did not focus as much on driving efficiency
to desert, so companies are innovating to provide the
in all areas but it is about the details now. For example,
smallest thermal variation possible during transportation.
we have almost 500 vehicles and we have decided that
In addition to maintaining huge cold chain infrastructure,
whenever we change a vehicle, it should be at least diesel.
creating strategic alliances is a key strategy.
We want to move to hybrid or electric in the future.”
"We own thousands of square meters of refrigerated
HIT THE ROAD
space throughout the world and we have agreements
Despite its challenges, Mexico still presents many
with suppliers such as vaQtec and Envirotainer, which
opportunities for logistics and companies expect growth
enable us to maintain the cold chain throughout the entire
in the country. In June 2017, PwC forecast road freight to
process. The most difficult products to transport are those
grow by 3.2 percent in Mexico in 2017, rail by 4.9 percent
that require a controlled temperature because they are
and air by 1.2 percent. Overall, the report states that road
shipped from the factory to conservation warehouses and
remains the most used mode of transport in Mexico,
then to our customers or final consumers," says Rafael
accounting for 80.8 percent of transportation.
Figueroa, Director General of air freight market-leader, Aeroméxico Cargo.
“Five or six years ago, two-thirds of the global healthcare market was in the US and Europe. Now, those are mature
HIGHWAY ROBBERY
markets and, although they are significant in size,
Other challenges include navigating the security
emerging markets are growing at faster rates. The number
environment, as the vast and sometimes remote expanses
one region for growth in healthcare is the Asia-Pacific
traversed by fleets increase risk. There were around 1,000
Economic Cooperation (APEC) region, mostly driven by
assaults on cargo vehicles on highways from January to
China and India and followed by Latin America,” says
November 2016, according to the National Public Security
Ingrid Ritter, Healthcare Strategist Latin America of UPS.
System (SNSP). “[Insecurity] has impacted us significantly, especially during times of strikes and demonstrations. During
Factors pushing growth in the logistics area are many,
a period of countrywide protests in January 2017 (following
including the expansion the generics market has
a hike in gas prices), our deliveries were delayed, sometimes
seen in recent years, mostly due to the government’s
up to a week, because there was no way to get through,”
consolidated-purchasing schemes. “Information has also
says Mireya García, Director General of Distribuidora Alpilo.
pushed growth because people are increasingly aware
that patented and generic medicines are the same. The
SCORE OF CATEGORIES THAT CONTRIBUTED FOR MEXICOTHAT COMPETITIVENESS SECTORS CONTRIBUTED2016-2017 TO MEXICO'S COMPETITIVENESS 2016-2017
difference is only in the cost to patients. As Mexico is
Institutions
and have access to more information. People now know
an emerging economy, people need medicines and need to be able to obtain it. This theme of accessibility has boosted growth for us,” says Víctor Soto, Director General
Innovation Business sophistication
of Levic, a Mexican logistics provider.
7 6 5 4 3 2 1
Infrastructure Macroeconomic environment
Health and primary education
Market size
Additionally, NOM-059-SSA1-2015, which regulates good practices for medicine manufacturing, came into effect in February 2016, impacting national and international logistics companies. “It stipulates that to transport pharma goods within Mexico, a company
Technological readiness Financial market development
must use vehicles specifically for this purpose and cannot transport anything but pharma goods. As we
Higher education and training
Labor market efficiency
Goods market efficiency
——Score based on key indicators
are already dedicated to this and have a cold chain in place, this norm has benefited us,” says Mario García, Vice President of Operations at GNK Logística. “It is excellent because it eliminates foreign companies from
36,139km of urban roads
227
providing transportation between states and also benefits the security and safety of goods because they could be contaminated by other goods and supplies in the cargo. I am sure that within two years, labs will be working only with logistics operators dedicated 100 percent to
158,180km
of paved highways (federal, state and toll highways)
pharma.”
E-COMMERCE Pharmacies are working to improve their position in the market, grouping together in associations such
118,812km
847
39
3,476
178
of rural (unpaved) roads
toll stations
ferry routes
as ANAFARMEX or Grupo RFP. They share a desire to modernize their operations and venture into e-commerce with logistics companies. “We are hoping for aggressive growth, because we are still small. We need to more than double our revenue from home deliveries in 2018, reaching around 150 percent growth as we are starting
bridges
from a small base. We expect to see growth of around
tunnels
300-400 percent in our online services,” says Guillermo Martorell, Director General of Grupo RFP, which brings together small and medium pharmacies. In 2016, Milenio reported that although independent pharmacies were the greatest in number at 22,000 across Mexico, the 7,500 branches of pharmacy chains dominate the market with 65 percent of sales. In addition to implementing e-commerce, several logistics
25,844 MEXICO - FREIGHT MODE BREAKDOWN 2017 (%) places linked
MEXICO - FREIGHT MODE BREAKDOWN 2017 (percent)
80.86% Road 19.12% Rail 0.02% Air
companies have also highlighted the trend of increasing demand for storage and just-in-time services from
1,943,945km2
hospitals and pharmacies. “I see this every day. Those
Size of Mexico
wanting to work in this sector understand their main markets will be Brazil and Mexico and that they will need to establish a presence in these high-consumption areas. Mexico itself is a significant consumer market so there is significant need for our customers to find the right logistics provider,” says Ritter.
Source: PwC
air Rail
VIEW FROM THE TOP
MARKET FACTORS DRIVING GROWTH, WEB SALES IN FOCUS VĂ?CTOR SOTO Director General of Levic
228
Q: What main changes did Levicâ&#x20AC;&#x2122;s operations undergo
Q: How is technology impacting the logistics business
in 2016?
and your operations?
A: We amplified our portfolio, opened a new distribution
A: We are investing in R&D to allow our customers to buy
center in Vallejo and worked to improve our service.
from us online. We have a web portal that clients can log
We are a distributor of mostly generic medicines and
into and browse our catalogue of products and costs,
we have greatly improved our just-in-time model. The
and any order placed will arrive within seven days. We
company already has a strong portfolio in generics, herbal
have been working on this since the summer of 2016 and
medicine and wound care, so we have mostly expanded
it is continually growing. In the first month, sales were
in prescription drugs from transnational companies, which
laughable, but by March 2017 online sales represented
have a slightly higher cost. Our work with transnational labs
9 percent of our total. We are promoting this directly
has grown by 60 percent but in general Levic saw growth
through our sales force and through our logistics. We
of 14.5 percent in 2016.
have no fixed target for where we want to be by the end of the year. It depends on what the market demands
Q: What have been Levicâ&#x20AC;&#x2122;s main drivers of growth?
because our objective is to cater to market needs.
A: Market factors have driven our growth, while prices and accessibility have been fundamental over the past 10 years.
Q: How will you achieve your 2017 goals?
Information has also pushed growth because people are
A: In 2017, we will begin operations in Monterrey. We are
increasingly aware and have access to more information.
also working with restocking technology, that is to say
People now know that patented and generic medicines are
robots that stock quicker than humans and with 99.9
the same. The difference is only in the cost to patients. As
percent exactitude. We are only missing a pincer in our
Mexico is an emerging economy, people need medicines
stocking technology. Our goal is to implement this in
and need to be able to obtain it. This theme of accessibility
four of our eight centers, three in Mexico City and one
has boosted growth for us.
in Michoacan. Levic is working on a project in Central America and in 2017 we will enter the Belizean market,
Q: To what extent does Levic work with the public sector?
where we have a project with the government to send
A: Only around 2 percent of our sales go to the government,
Mexican medicines there.
while the other 98 percent goes to the private sector. Previously, a cure for a general illness cost MX$500-1,000
Q: How do you prepare for uncertainties such as strikes
(US$28 -56) out of pocket to pay for a doctor and medicine.
and protests?
Today, patients can receive medical care and medicine at
A: Protests do not affect us much. What does impact
many pharmacies for MX$150-250 (US$8-14). Because of
us greatly is the Hoy No Circula (No Drive Day). In 2016,
this not everyone needs to use government services.
40 percent of our vehicles could not circulate on any given day. With one No Drive Day per week, 20 percent
Although we have no plans to change our sales ratio,
of our vehicles are idle but with the double measure,
we will need to work more in other areas, including the
two of every five are out of action. Distributing medicine
government, to maintain growth rates.
becomes much more difficult. There are also security issues and areas we cannot enter because drivers are asked to pay bribes. We do not enter areas where the
Levic is a Mexican distributor based in the State of Mexico
driver will be at risk, or when the risk is larger than the
that is specialized in the pharmaceutical sector. It began
reward. If we were to push this, then we would be putting
operations in 2000 as a generics distributor and has expanded
the health of the driver and the good condition of the
operations throughout Mexico
medicine at risk.
VIEW FROM THE TOP
PHARMA TAKES TO THE SKIES FOR DELIVERIES RAFAEL FIGUEROA Director General of Aeroméxico Cargo
Q: What are the greatest challenges in health for
Q: As you already manage so much domestic cargo, what
Aeroméxico Cargo? How do you overcome them?
is your objective for the rest of 2017?
A: Pharma is one of the top five products we transport. Due
A: The pharmaceutical market is much bigger than what is
to quality and security concerns with land transportation
being moved via air freight today. We are a reliable option
services, the industry has increased the volume of pharma
and we have a commercial strategy for the pharmaceutical
products transported by air. We have been offering
market that is very aggressive. Our goal is to move more
specialized services for the domestic market for the last
pharma and to continue as a leader in air freight. As
three years and our market penetration has grown over
an airline, we prefer to work with high-yield products.
100 percent each year. Today, we transport around 12,000
However, Aeroméxico’s network is so large that it operates
tons of pharma products every year, which represents 90
many flights on which we can accommodate many types
percent of the domestic air pharma market. Our biggest
of medicine and cargo; for example, if something very
strength is Aeroméxico’s security processes, which make
urgent needs to go to Monterrey in the next two hours,
us the most secure airline to fly with. We have invested
we can do it. Aeroméxico moves one of every five kilos
a lot of resources over the past three years to make sure
of the Mexican air cargo market and we want to keep
that 100 percent of our cargo is screened and sterile,
growing at the same pace.
which makes us the preferred carrier for most agencies. Q: What are your plans for pharma and health in Mexico? Q: What health products does Aeroméxico Cargo
A: Aeroméxico Cargo has an investment plan of several
manage?
million pesos that will help further strengthen our position
A: In addition to pharma, we also move biomedical
in the national pharmaceutical market. In addition, with the
products and vaccines. We own thousands of square
objective of increasing participation in the international
meters of refrigerated space throughout the world and
market, in December 2016, we formally finished remodeling
we have agreements with suppliers such as vaQtec
our facilities in the New Mexico City International Airport
and Envirotainer, which enable us to maintain the cold
(NACIM), an investment of several million dollars that
chain throughout the entire process. The most difficult
positions us as the company with the most modern facilities
products to transport are those that require a controlled
and with the highest standards of safety and quality.
temperature because they are shipped from the factory to conservation warehouses and then to our customers
Finally, in February 2017 we launched the Health Chain
or final consumers.
Service, which will first target the European, US and South American markets. It will have the capacity to offer our
Q: How does working in pharma impact your business
clients specialized active and passive solutions to achieve
strategy?
a cold chain that includes freezing, refrigeration and
A: The challenge for us is to keep pace; entering the
temperature maintenance during our cross-border flights
pharmaceutical sector has been our most important
thanks to strategic alliances with the most recognized and
achievement so far. Four years ago, we had almost no
certified companies in the market such as Envirotainer,
business in this area and now we manage a large majority
vaQtec and Cold Chain Technologies.
of the domestic pharma market. We have become an airline that is flexible, that cares for its clients’ products, employing the correct conditions and delivering the
Aeroméxico Cargo is a leading air cargo carrier and part of
products undamaged. Previously, we moved 20-30 tons
the airline Grupo Aeroméxico. The company strives to meet
per month in pharma, whereas now we move over 600
the needs of the supply chain, including pharma, delivering to
tons per month.
Mexico and the world
229
VIEW FROM THE TOP
PUSHING EFFICIENCIES FOR 360° LOGISTICS JOSÉ ALBERTO PEÑA Director General of Grupo Marzam
Q: Grupo Marzam deals with high volumes of medicines.
people for the position. This is setting us apart, thinking of
What management systems are in place for this?
where we are now and where we anticipate going in the
A: That is one of our key strengths as an organization. There
future. We will be bringing new technology to an area of
is continuous opportunity to improve but we are a company
the industry I believe has been static for decades.
that has been in the market for 83 years so experience has 230
gradually made us increasingly effective and efficient. We
Q: From where are you recruiting your talent? To what extent
have 10 distribution sectors in the country, nearly 3,000
do you have to go to other sectors or abroad?
employees and 500 vehicles. That allows us to cover almost
A: We have not gone abroad. Our HR director comes
95 percent of the country. We also have a strong focus
from outside the distribution and logistics market but
on technology because that is how we can drive more
has experience in many industries. Wherever possible, we
efficiencies. We are a large-volume company in a low-margin
would like to provide opportunities internally. I want to
industry, so we need to be as efficient as possible.
be in a situation where all future opportunities are filled through promotions. We are looking for the right people,
Q: What state-of-the-art technology is implemented
not necessarily thinking about the right person for the
throughout the company’s operations?
position today but looking at this with a three to five-
A: Four of our distribution centers are automated, which
year perspective, bringing in those that will be able to
drives efficiency throughout the organization. Grupo
complement our strategy going forward.
Marzam differentiates itself from its competitors in that all our salespeople work off apps on smartphones. All our
Q: To what extent do you have relationships with Mexican
technology is developed internally. While pharmaceutical
universities?
companies usually have limited numbers of people in the
A: We do not have any at this moment but that is an area we
IT department, Grupo Marzam’s is over 100 strong. This
are looking to develop. I want to bring in high-potential talent
demonstrates how important technology is to us and that
who could be our future leaders, bring them into our growth
we keep it top of mind in everything that we do. We also
strategy areas to drive new models and then take them from
have a strong focus on e-commerce. We are trying to see
the conceptual phase to implementation. We have planned
how we can interact continuously with our customers
for 2017 to bring in three high-potential MBA graduates who
from a 360° perspective.
are ready to land in a position knowing they may not be quite ready but that we want to develop them. We are beginning
Q: How has Grupo Marzam’s adapted its operations to
to reach out to universities so we can develop this program.
e-commerce over the past year? A: Our app was not fully in use 12 months ago, but today
Q: What are the most important skills that you will be
100 percent of our sales reps use it. It is also being used
looking for?
by about 500 reps in the pharmaceutical industry, who
A: We will certainly be more focused on the commercial side.
use it to collect orders that come directly to us. We have
We will be looking for people with learning agility, flexibility
undergone a massive reorganization, changing 95 percent
and able to coordinate groups. I want this company to be
of our executives and ensuring that we bring in the right
different to others and I see it evolving into different areas, such as specialized segments, focusing more on customized models. This does not mean we are walking away from what
Grupo Marzam is a Mexican company that started its
we do today, it will be complementary. I am looking at many
operations 83 years ago distributing medicines to pharmacies
sectors, such as private hospitals and insurance. At the
in Mexico City. Now it distributes healthcare products across
moment only 4 percent of Mexico’s population has private
the country
medical insurance. This is an opportunity.
Warehouse tunnel
Q: What drove the 2 percent growth Grupo Marzam
Q: How has the global economic environment impacted you?
enjoyed over the past year?
How do you foresee its future impact?
A: There are many factors involved. When Marzam was
A: 2017 will be a challenge from an exchange-rate perspective.
purchased 12 months ago, there were financial difficulties.
For us, another key component is gasoline, which has a
We have been ensuring that, from a business perspective,
direct impact on our expenses. The exchange rate will have
we are driving as much efficiency and profit as possible to
an impact on the industry as a whole because 90 percent
ensure we are paying our customers. We have gone from
of material used to produce medicines is imported. Before,
having a 65 percent fill rate 12 months ago, to a 97 percent fill
perhaps businesses did not focus as much on driving
rate at the end of 2016. That was driven mainly through pure
efficiency in all areas but it is about the details now. For
product availability. We are probably unique in the interaction
example, we have almost 500 vehicles and we have decided
we have with the healthcare sector in general. There is much
that whenever we change a vehicle, it should be diesel at the
more confidence in what Marzam is today than there was one
very minimum. We want to move to hybrid or electric in the
year ago. A massive change in the way we operate puts us in
future. We are already evaluating if this is economically viable
a much stronger position.
on a four-year horizon, which is the life a vehicle for us. This drives us to think differently now. It is not necessarily bad but
Q: How do you ensure that your trucks can reach their
we were not ready for a 20 percent increase in gas prices.
destination through times of unrest? A: We have implemented more technology in that area.
Q: What are you short-term plans for Mexico?
Our distribution network has GPS, trucks are tracked
A: For us, short term means three to five years. We want
and they have other security aspects. Our vehicles are
to become a holistic, logistics provider in the healthcare
monitored centrally by a control center and we coordinate
segment and we will not be moving away from that.
them with the corresponding authorities to ensure there
Marzam was very much a pharmaceutical distributor
is a rapid response from the police.
but today we are in branded, patented and generic pharmaceuticals and we have moved into wound care,
Q: What are the greatest challenges Grupo Marzam faces
medical devices, medical equipment and specialized
as a distributor?
medicine. All these segments are growing.
A: One of the greatest challenges we face is Mexicoâ&#x20AC;&#x2122;s size because it is an expansive country. We must ensure we
From a customer perspective, we were focused on
provide an effective, efficient and continuous service. Security
pharmacies. However, our focus expands now to private
is a hot topic that requires care. We are a low-margin industry,
hospitals and clinics, healthcare insurance and the
so all additional costs immediately impact our profitability.
government sector, which is much more holistic. Our most
We need to be prudent about how we manage additional
important strength is the infrastructure we have. Why
expenses, which, ideally, we should not have. The health
not get involved with a broader range of products and
industry in Mexico is also a complex and fragmented industry
segments if we are already going past these places and our
that requires different skillsets. Having had experience with
infrastructure can cope with it? We are also open to creating
many markets around the world, I truly believe that Mexico is
partnerships and alliances. I am a strong believer in alliances
one of, if not, the most complex healthcare market.
and complementing our infrastructure and expertise.
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INSIGHT
EVOLVING TO TAKE ON NEW SUPPLY-CHAIN CHALLENGES DANIEL PARDO CEO of Medistik
232
Logistics services can be a challenge for the Mexican
trucks to have redundancy control. Now, they use a dual
health industry’s supply chain. Companies have to maintain
GPS system that can detect jammers and can send an
safety, ensure the chain of custody and comply with their
alert to the monitoring center that works with authorities
customers’ requirements in times of high delinquency
to recover stolen vehicles. Trucks have electromagnetic
and peso depreciation. To mitigate these challenges,
closures, so they can only be opened at the delivery point.
health companies like Medistik have developed strategic
When transporting certain products, Medistik also works
solutions, latching onto new opportunities in the process,
with private-security agencies that offer escort services.
says Daniel Pardo, the company's CEO. Besides insecurity, another challenge the logistics sector The company, formerly Bomi Mexico, a business with 20
is trying to mitigate is the peso’s depreciation. The cost
years of experience in the healthcare logistics sector in
of equipment, rent and other elements are usually in
Mexico, is looking to reinvent itself and expand in the
dollars, which affects companies and customers. As
local market, which has limited integral logistics solutions.
Pardo explains, Medistik is working to become more
It wants to triple in size in the next five years through
efficient by proactively improving transportation and
organic growth that includes improving its services and
warehouse management. Part of its responsibility is
offering solutions to new health segments. To further
ensuring companies gain control of their products
underpin its evolution, Medistik has developed and
through better inventory management. Pardo highlights
implemented a training and repair center to which clients
that the main issue in this area is that large healthcare
can bring their equipment and personnel, who receive full
institutions like hospitals do not have total product
training on how to use it.
visibility. The company looks to implement technological tools that will provide clarity on the location and quantity
Insecurity in the country has also created the need for
of every product, reducing inventory-related costs. “We
stringent security measures, especially in high-risk areas
are adapting, anticipating and inviting our clients to join
such as Mexico City or the State of Mexico, says Pardo.
us in this process,” says Pardo.
There were around 1,000 assaults on cargo vehicles on highways from January to November 2016, according to
Ensuring full compliance with the supply chain and
the National Public Security System (SNSP), although
product requirements is among the most difficult tasks,
that number might be higher because many companies
specifically in Mexico, where the challenge in such an
do not report the crimes, according to Mario Espinosa,
extensive territory is being able to get everywhere. “Any
President of the Mexican Association of Vehicle Tracking
given company cannot cover the whole country. The
and Protection (ANERPV).
service we provide should help our clients deliver further and reach the point of sale faster.”
The company has taken several steps to maintain safety and ensure the chain of custody. “We started
Medistik hopes to offer the public sector some of the
by establishing a security manager position. We
solutions already in place for the private sphere, which
then enhanced our recruitment process to ensure the
accounts for 100 percent of the company’s customers.
trustworthiness of all our drivers,” Pardo says. A report
“We do keep in mind that the government is the
from FreightWatch International, a security logistics
largest user. There are big opportunities to help it to
agency, says that assailants usually operate in groups
be more actively efficient and to drive down the cost
of six to eight people in three cars and use systems that
of healthcare,” says Pardo. He believes that Medistik’s
block their target’s communications network. Pardo says
evolution is not limited to updating its image but in also
this is why Medistik changed the GPS system on all its
giving the broad vision of its service a makeover.
INSIGHT
AFTER MEDICINE IS THROWN AWAY JOSÉ AEDO Director General of SINGREM
While all households purchase medicine, few dispose of
counterfeit medicine, Aedo says that in the three years he has
it properly. This leads to a variety of problems including
headed SINGREM only two containers have ever been stolen.
counterfeit medicine and environmental pollution. According to the General Law for the Prevention and
Some states dispose of less medicine than others. Aedo says
the Integral Management of Residues, “large generators,
that the longer they have been present in a state, the more
producers, importers, exporters and distributors” of
the program collects. “In the center of the country, Mexico
special handling products are responsible for “formulation
City, Puebla, Jalisco and Veracruz, our program works well,
and execution of management plans.” Yet, not all take
but there are still many states that are lagging behind,”
responsibility for their generated residues.
Aedo says. “The North only represents 6 percent of our collection and it is an area reasonably well covered.” He puts
SINGREM, a civil association, was created to tackle the
this down to the fact they only entered these states a year
problem, collecting unneeded and expired medicine from
and a half ago and expects results to improve with time. “In
around the country to prevent it from being tossed into
Mexico City, we collected over 12 tons in September 2016. In
landfills. Over the past year, the association has expanded its
the entire state of Nuevo Leon, we collected 0.2 tons,” Aedo
reach, moving into Chiapas. “We entered Chiapas through
says. To make greater advances, more government support
an agreement with the state government. We delivered 40
is needed for companies to allocate funds to the collection
containers, half of which were placed in government clinics
of expired medicine. “Each state supports us differently.
and the other half in Farmacias del Ahorro,” says José Aedo,
Hidalgo, for example, has its own collection projects and
Director General of SINGREM.
invited us to partake. Others are practically not interested in expired medicine. The support we receive in Guanajuato
One hurdle the association faces is the challenging security
is incredible, as is that of Mexico City,” he says.
environment in some areas of Mexico. This is the case of Tamaulipas, in the northeast of the country, where according
While it is obligatory for companies to participate in the
to Aedo it is not present because the risks are too great.
disposal of the medicine they produce, many neglect their
Another example is Michoacan, a state it abandoned when
responsibilities, leaving SINGREM to clean up after them.
the situation became unstable, although the association
From January to July 2016, only 57 percent of the medicine
returned once it was safe to do so.
collected by SINGREM came from affiliated companies, while it received no contribution from the companies the
Today, SINGREM has almost extended its coverage across the
produced the other 43 percent. In addition, many generics
country and is now only missing from Tabasco, Baja California
laboratories refuse to participate outright because of a lack
Sur, Chihuahua, Sonora and Tamaulipas. It hopes to have
of law enforcement. This is an issue for SINGREM because
collected around 520 tons of medicine or 15 million units by
52 percent of the medicine it collects is generic. Because
the end of 2016, which it estimates to represent around 15-
these are expired meds sold two to three years previously,
20 percent of medicine discarded. It has agreements with
Aedo expects this rate to rise in line with the proportion
103 laboratories to perform collections and the association
of generics sold.
managed 4,750 containers as of September 2016. “Most of these are in national pharmacy chains, 2,470 of them, such as
Despite the setbacks, SINGREM will continue its effort to
Farmacias Guadalajara, Farmacias Benavides and Farmacias
cover all 32 states as soon as possible. Once this is achieved,
San Pablo,” Aedo says. To minimize security risks, the trucks
it hopes to increase publicity nationwide and push people
that collect the meds from SINGREM containers bear no logo
to dispose of their medicine adequately. By implementing
so as to avoid unwanted attention. While it may seem like a
6,000 containers nationwide, it hopes to collect 1,000 tons
container full of expired medicine is the perfect source for
of medicine per year.
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VIEW FROM THE TOP
INFORMATION IS POWER MARIO GARCÍA Vice President of Operations at GNK Logística
234
Q: Why should companies contract GNK Logística for their
because we have encountered situations in which it does
logistics operations?
not, or is not where thought. Once corroborated, we analyze
A: As a Mexican third-party logistics company (3PL),
all the data from the census and other variables to establish
our core business is the design, development and
delivery frequencies. There have been times when we have
implementation of integrated logistics solutions built to
had to hire small planes or boats to get to the correct place
suit each client’s specific requirements for warehousing,
at the correct time because there was no road.
control, distribution of goods and database management for the health and pharma industry. We are not dedicated
Q: What steps do you take to maintain security in the chain
to buying and selling goods, we leave that to our clients.
of custody?
We are dedicated to generating valuable information, to
A: We have security protocols and procedures as
the traceability of goods and nationwide consolidated
determined by our quality management system. Since
transportation.
we began working with the government, the goods we distribute are low cost or have no price value because 3
We have more than 1,000m of cold rooms, all of which
they are free and destined to meet the population’s
have temperature ranges of 2-80°C as recommended by
needs. We also are well known in the communities to
COFEPRIS. Our parameters are from 4-70°C, meaning that
which we deliver. At the beginning, we did face a certain
when the temperature reaches those limits, automatically
amount of risk in some areas like Durango, where we
a visual and audio alarm activates to ensure the cold chain
had to establish certain routes and schedules that were
is not broken. We also have units with thermostats for
secure. Our vehicles bear our logo, which is recognized,
transporting cold products.
and they are all tracked via GPS, have interior cabin cameras and are constantly monitored. Our warehouse, fleet of trucks and the goods of our clients are all insured. We have also used and hired custodians in the past as requested by our client protocols. Q: What are the biggest challenges and risks a logistics company faces?
NOM-059 stipulates that to transport pharma goods within Mexico, vehicles must be specifically for this purpose
A: The greatest risk is the loss or damage of the client’s assets. NOM-059, ratified in August 2016, is also important for us. It stipulates that to transport pharma goods within Mexico, a company must use vehicles specifically for this purpose and cannot transport anything but pharma goods. As we are already dedicated to this and have a cold chain in place, this norm has benefited us. Beginning a project is
Q: What logistical strategies are used to service locations
often the most difficult phase because companies do not
that are difficult to access?
have the full scope of the project.
A: Before we start any operation or project, we always perform an initial census for which we focus on distant, rural
Q: How does NOM–059 compare to international standards?
or difficult to access communities, so we can make a note
A: It is excellent because it eliminates foreign companies
of its address, GPS localization, type of road encountered
from providing transportation between states and also
and all the information we need to design and establish the
benefits the security and safety of goods because they
best cost-benefit route. We check that the address exists
could be contaminated by other goods and supplies
in the cargo. I am sure that within two years, labs will
A: We differ greatly from our competitors, mainly because
be working only with logistics operators dedicated 100
we treat our clients as business partners or allies. When
percent to pharma. Because we are solely dedicated to
we notice they are doing something wrong, we tell
pharma, we are not looking to expand to other sectors
them about it. We also give them reliable, punctual and
or industries. We are totally convinced that we can be of
auditable information. We are flexible in our operations
great value to our clients because of all the specialization
and we do not have hidden costs. Our solutions are
and investments we have made in this area.
tailor-made and we strive to offer the best cost-benefit solutions. Finally, our personnel is highly qualified and
Q: How important is tracking and how does it improve GNK
field-trained to offer outstanding customer service and
Logística’s services?
a quality response.
A: Whoever has information has power and tracking has become an important tool for us and the service we
Q: What are the main differences when working with the
provide. As an example of how tracking benefits us, we
public and private sectors?
also offer reverse logistics to our clients, who often use
A: The private sector is more demanding due to their
it for returns, rejections or short expiry dates of goods.
corporate governance and compliance structures and
We once collected a lot that was subject to inspection by
procedures. The tolerable margin of error is extremely
COFEPRIS and had to trace it to its final user. It helped that
narrow. Governments often do not have standardized
our tracking system gave us that information, otherwise we
procedures or high standards when dealing with pharma
would have been in trouble.
goods and their warehouses in most cases do not comply with any NOM rules or regulations, nor do their vehicles.
Q: To what extent do you have a database of consumed
We are the ones to suggest they improve to the standards
goods?
required by private industry. If companies do not have
A: We have developed in-house systems and also registered
reliable information, they do not have sales or consumption
them at the National Institute of Author Rights (INDAUTOR),
projections. Health services were created to preserve
which can give us full traceability of each lot number and
health, not to worry about logistics. This is the area that is
the expiry date of every good we have distributed. We
usually contracted out but there are still states and private
collect inventory information at the place of delivery or
labs that do not contract their logistics operations.
through our systems and we generate the data to know what and when is consumed. We give this information and
Q: What is GNK Logística’s strategy to remain competitive
other reports about inventory levels and displacement of
over the next five years?
goods to our clients and they decide when to buy, at what
A: We look to strengthen the systems we have in a
price, from whom and in what quantities. All the information
well-structured enterprise resource planning. We think
and reports needed by our clients are available 24/7 to help
any other Mexican or foreign company with plenty of
them improve and speed up decision-making.
economic resources can store and distribute pharma goods correctly and in accordance with legislation
Q: How are health practitioners embracing technology
but we doubt they can better our learning curve and
such as iPads and what are the challenges to adoption?
experience of almost 11 years. We are always researching
A: In rural communities, digital advances take longer to
new technology and systems that can help us be a
permeate. For example, it takes around 40 minutes for
cutting-edge company. Generally, we would like to have
doctors to deal with the paperwork from a five-minute
our systems working across the supply chain, from
medical consultation. Implementing a system that relies
doctors that generate the demand of goods by typing
on a certain device is not ideal because these quickly
the prescription into our system to the supply planning,
become obsolete. We have developed our systems to be
control, warehousing and distribution of those goods.
compatible with tablets and while they can be used, it
Prescriptions and requirement orders are still written
is necessary for hospitals and rural communities to have
by hand, so we are looking forward to digitalizing that
the right hardware and network in place, which is the
information to shorten times. That will help our clients
main challenge we have encountered. Another challenge
and us to have better control and timings throughout
is to change the mindset of doctors from doing things
the supply chain.
manually to electronically. Tablets are extremely useful because they put the complete supply chain information in one’s hand.
GNK Logística is a Mexican logistics company with a division fully dedicated to the health industry. It focuses on the design
Q: What does GNK do differently from other pharma
and development of logistics systems that incorporate the
logistics companies?
latest technological advances
235
VIEW FROM THE TOP
CUSTOMIZED SOLUTIONS FOR MEXICO’S LOGISTICS CHALLENGES JOSÉ ERIC DELGADO Director General of Sicamsa
236
Q: How is Sicamsa dealing with the challenges of logistics
Q: How do Sicamsa’s solutions make its clients’ operations
in the pharma and health industries in Mexico?
more cost-effective?
A: The main problem is the lack of logistics regulations for
A: Our main line of business is the transport of laboratory
the transportation of laboratory samples and other types
samples in Mexico. We offer personalized solutions for 24-
of materials. Shippers are often unaware of the logistical
hour delivery to IMSS and private companies and we also
complexities involved and delivery companies can be blamed
transport vaccines, corneal layers and tissue for transplant.
for any problems. We are facing these problems through
Our main differentiators are our fast delivery times and the
internal rules and by training our staff. The samples we
level of security we can offer. Sicamsa offers transportation
transport can be essential to a patient’s health so our mission
of unlabeled drugs and hazardous material, which requires
is to deliver it in the right way and as quickly as possible.
special documentation. We also transport veterinary material for small towns and municipalities.
Q: How do you cover the whole country and reach your clients in 24 hours with so many logistical obstacles?
Q: Given the range of services, to what extent do you
A: We have contingency plans prepared for every
incorporate client requests into your offering?
situation. In many cases, we incur expenses that are
A: Due to our dedication to providing 24-hour delivery
not accounted for in the client’s budget and we bear
schedules, we must provide a custom-made operation for
the cost ourselves. This kind of service, along with our
each client. This also means that if one of our clients cancels
rapid response to unexpected issues, has generated a
the order, we cannot charge the other more or decide not
significant client loyalty. We also have a hangar in Nuevo
to go to this location at this time, as many other logistics
Laredo with four jets and two pistol-engine planes, one of
companies that operate with consolidated purchases must
which is a cargo plane, and we are introducing a seven-
do. We adapt our infrastructure to client needs but we need
ton aircraft for a new project in which we guarantee our
a commitment in return because a fleet of reserve vehicles
clients zero loss of products.
can become expensive.
THE WILD, WILD NORTH
Mexico is an expansive country and distributing outside the capital city presents a unique set of challenges. In the face of insecurity and civil demonstrations, among other disruptive factors, companies have had to adapt strategies to keep products moving, says Mireya García, Director General of Distribuidora Alpilo, a Monterrey-based logistics company. “[Insecurity] has impacted us significantly, especially during times of strikes and demonstrations. During a period of countrywide protests in January 2017 (following a hike in gas prices), our deliveries were delayed, sometimes up to a week, because there was no way to get through,” says García. In response, the company began forging alliances with other distributors to lend products to each other. “We now manage a larger stock and take larger orders so that our clients are better prepared for unforeseen circumstances,” García adds. The National Survey of Public Urban Security (ENSU), carried out in December 2016, found that 67.8 percent of the population aged over 18 considered that living in Nuevo Leon state was unsafe, up from 62.8 in September of the same year. Being a small company, exchange-rate fluctuations also had an impact. “The appreciation of the dollar does impact us as our costs are sometimes in dollars and the products we distribute come from the US. We have to continually be checking costs and margins while also paying attention to the client because we cannot be increasing prices every three months,” García says.
VIEW FROM THE TOP
SPECIALIZED SERVICES FOR SPECIALIZED PRODUCTS INGRID RITTER Healthcare Strategist Latin America of UPS
Q: UPS Temperature True options enable the transport
Q: What makes Latin America attractive as a region?
of sensitive products. What products are you most often
A: Five or six years ago, two-thirds of the global
asked to handle?
healthcare market was in the US and Europe. Now, those
A: UPS Temperature True is one of our most specialized
are mature markets and, although they are significant in
solutions when it comes to the transportation
size, emerging markets are growing at faster rates. The
o f te m p e ra t u re - s e n s i t i ve h e a l t h c a re p ro d u c t s .
number one region for growth in healthcare is the Asia-
Pharmaceuticals, biologics, vaccines, blood products and
Pacific Economic Cooperation (APEC) region, mostly
medical devices are the types of products we are most
driven by China and India and followed by Latin America.
asked to ship with UPS Temperature True. UPS has control
UPS has four strategic priority segments: healthcare,
towers that monitor all shipments, help protect against
e-commerce, emerging markets and technology. In Latin
temperature excursions and can also activate contingency
America, we will continue to increase our footprint in
plans in the event there are unexpected shipment delays.
emerging markets with continued investments, especially in the healthcare segment.
Q: What are the most common challenges faced when transporting health products across borders? How do
Q: What are your priorities for 2017?
you overcome them?
A: Our latest investment in Latin America is a new
A: In Mexico, many products are transported over land
healthcare storage and distribution facility in Bogota,
and a challenge that is not often considered is the
Colombia. In addition, we also just added cold-chain
number of times a package can be exposed throughout
capabilities to our distribution centers in Mexico and Brazil.
the transportation cycle. Before picking up a UPS Temperature True shipment, UPS works with its customers
Companies that want to conduct business in the Latin
to provide a comprehensive analysis of shipping options
American healthcare market need to understand the
and procedures such as routing, type of transportation
current and upcoming changes in regulations, as well
required, who will come into contact with the shipment,
as how channel strategies are evolving for customers. In
what types of carriers are acceptable for that type of
2017, for both Mexico and the region, we will focus on
shipment and set up of contingency shipment plans.
our ongoing commitment to continue investing in the
Everything is defined beforehand, so when we do pick
sector. We have strong partnerships with our customers
up a shipment we know exactly how it is going to move,
and, more than being a logistics provider, we want to be
from where to where and who needs to be notified.
their strategic partner and ally that works hand-in-hand to understand their supply chain needs and ensure the
Q: To what extent is the demand for storage services
success of their business. For example, our procurement
increasing in Mexico?
of Marken, a specialty courier service, is a clear example
A: As Healthcare Strategist for UPS Latin America, I
of a new acquisition that is going to impact our ability to
see this every day. Those wanting to work in this sector
service the clinical trials logistics market in Mexico and
understand their main markets will be Brazil and Mexico
in Latin America, allowing us to partner with companies
and that they will need to establish a presence in these
much earlier in the supply chain.
high-consumption areas. Mexico itself is a significant consumer market so there is significant need for our customers to find the right logistics provider. In 2014,
United Parcel Service (UPS) is an American company and
we opened our newest healthcare distribution center in
one of the worldâ&#x20AC;&#x2122;s largest distributors. Working across over
Mexico City. It measures over 7,000m , is GMP compliant
220 countries and territories, it handles 101.5 million tracking
and has temperature-controlled storage capabilities.
requests per business day
2
237
VIEW FROM THE TOP
NEW MARKET ENTRANTS COMPETE WITH GIANTS ERICK JIMÉNEZ Director General of Majicarga
238
Q: How do changes in regulations in the health industry
Insecurity is another significant challenge. Although we have
affect Majicarga?
a sophisticated monitoring system, the existent technology
A: COFEPRIS is one of the world’s strictest regulatory
is limited. No distributor or technology company in the
agencies. Majicarga transports pharmaceutical products,
security market can fully guarantee that a unit carrying
medical devices and even clinical tests but also groceries,
a client’s product will not get lost or robbed. The most
equipment and other products that require sophisticated
stolen products are drugs like anti-flu medicine, aspirin and
handling. COFEPRIS’ regulations, the policies of
cosmetics because OTCs are the easiest to sell on the black
governmental agencies like the Ministry of Health and the
market. To combat this, all of our employees must have a
ability of the health industry to respond to these changes
reliable-worker accreditation. The company that provides
affect us. NOM-059 regulates good practices regarding the
this service visits with our staff and performs an obligatory
manufacturing and distribution of drugs. We are in line with
socio-economic study, checks local and federal criminal
this regulation, but we have been informed there will be
records and performs psychological tests.
some updates so we are preparing for those. We are also preparing for ISO-9001-2015 certification, which deals with
Q: What are the emerging trends in storage?
quality-management systems.
A: Pharmaceutical companies are closing their storehouses and centralizing storage and distribution within the
Q: What are the main challenges for Majicarga?
metropolitan area, specifically in Cuautitlan Izcalli,
A: Cost-efficiency is the most pressing issue. We must
Tlalnepantla and Naucalpan, in the State of Mexico. These
make our routes more profitable because many new, bigger
storehouses are both storage and distribution centers and
competitors are entering the business, including giant
help reduce costs.
companies like UPS, FedEx and FEMSA Logistics. These new competitors are attracted to the segment because
Q: What is your relationship with the public sector?
distribution in the pharmaceutical sector is one of the best
A: We have little direct contact with the government, but
remunerated. However, for a company like Majicarga it is
we would like to increase our business with the public
difficult to compete against fleets of thousands of units
sector because it is a good, well-remunerated market with
and the entrance of these new competitors. The prices we
attractive contracts. We have focused on marketing reliable
must offer are much lower than three years ago. Mexico
solutions that provide security in the transportation of
used to be a paradise for transportation companies, but
medicines for the private sector.
regulations have increased in number and strengthened and have become more complex.
Q: What are your priorities for the next five years? A: The most important priority is to find new customers,
The main challenge for businesses is to find sustainable
because sometimes companies become too confident with
strategies that help growing companies maintain or even
the clients they have. We want to implement new means for
further develop so as not to be bought out or absorbed by
advertising through innovative channels and participation in
larger ones. Additionally, there needs to be regulation to
expos, conferences and other industry gatherings. Investing
incentivize and boost Mexican companies.
in better security controls is preponderant: the number of robberies increased 60 percent between 2016 and June 2017. We also need to renew our fleet. In the midterm,
Majicarga is a Mexican logistics and transportation company
e-commerce may impact us, but there are new ways of
based in Mexico City and specialized in delicate cargo, with
doing business in transportation, where people upload
over 25 years of experience. In health, it deals with drugs,
information about specific cargos and transportation
medical devices and clinical tests
players choose what they want to transport.
VIEW FROM THE TOP
SUPPORT FOR PHARMACY CHAINS SERGIO CHABOLLA Executive Director of ANADIM
Q: What strategies should pharmacies put in place to
Q: What must be done to ensure the Mexican
guarantee access to health?
pharmaceutical industry grows to its potential?
A: There are many strategies. Farmacias del Ahorro, for
A: The innovation industry has grown greatly because
example, provides loyalty cards, giving clients discounts
there is a lot of competition between generics,
or the opportunity to receive a free service. For our part,
interchangeable medicines and biosimilars. I think the
the number of generics purchases has increased greatly
industry of innovation should be better organized and
and we stock our own brands, which gives us the margin
implement prices wisely to be more competitive. This
and opportunity to keep growing. The Ministry of Health
would improve access for everyone.
and COFEPRIS want lower prices to help those with few economic resources buy medicine. By stocking generics we
Q: What added value do companies receive as members?
are responding to that need. Laboratories ask us to respect
A: There are several benefits. Firstly, as most of our
their prescriptions and not make any changes, which we try
members work in Mexico, they can use our facilities in
to do. Despite having our own brands, we also continue to
Mexico City to conduct meetings whenever they like and we
buy the same number of generics from other laboratories.
can help arrange any meeting with industry contacts they
What clients want from us are good-quality products.
would like to see. We also offer support to help solve any regulatory issues they may face. This instills our members
Q: To what extent does ANADIM enable members to
with confidence, knowing there is always a team that will
participate in consolidated purchases?
support them with anything they need.
A: We do not need consolidated purchasing because our members have enough purchasing power on their own.
Q: What changes have you seen over your time with
Independent entities have to do this because they do
ANADIM? What are your expectations for the coming
not have our levels of organization. Our members work
years?
together to make decisions and to support each other, so
A: There have been many ups and downs, moments in
that everyone operates under the same conditions and
which we thought the association would not survive due
with the same discounts. Otherwise, we would not work
to many issues, such as disloyal competition, price-fixing
as an association.
and leonine conditions. However, the environment has greatly improved in the past eight to nine years and we
Q: How does ANADIM function and what characteristics
have grown significantly. We are on the right path and
does it look for in member companies?
in five years I hope our members account for 80 percent
A: When there is a governmental issue that impacts all of
of total distribution. Over the next three to five years,
us, we can help each other and this has strengthened us
ANADIM will continue to play an important role in the
over our 73 years of existence. Companies that join the
distribution sector as some of our members, such as
association must carry out distribution or run a strong
Tallis, are enjoying exceptional growth. We account for
chain of pharmacies. Our group includes the largest
65 percent of the distribution of medicine in the country.
chains in Mexico, such as Grupo Benavides, Farmacias del
A few years ago, that figure sat at 35 percent. This growth
Ahorro, Farmacias Guadalajara, Walmart and FEMSA. We
is due to the expansion of pharmacy chains.
meet every two months across the country, sometimes at the facilities of a member company. The association just inaugurated Analpharmaâ&#x20AC;&#x2122;s facilities, which are incredible.
The National Association of Distributors of Medicines
We could invite companies from across the world and
(ANADIM) comprises 18 Mexican companies that are engaged
present the achievements of this 100 percent Mexican
in the distribution and dispensation of pharmaceutical products
laboratory with pride.
for consumption in Mexico
239
VIEW FROM THE TOP
DIGITAL COMPLIANCE TO IMPROVE HEALTH ALBERTO WICKER CEO of Signufarma
Q: What significant trends are emerging in Mexico’s
them when physicians orient, monitor and help address
health industry and what role is technology playing?
their problems. Creating value in this model is possible
A: There has been significant change related to patient
through information technologies by, for example, using
centricity. Organizations in this sector need to look
virtual reality to teach the patient the mechanics of both
inward and develop a patient-oriented culture because
pathology and therapy.
patients look at the pharma industry as they would the 240
tobacco industry: as if we were taking advantage of them.
Q: What benefits has Signufarma observed through the
This is due to ethical issues related to clinical trials, the
use of patient-oriented IT?
perception of abusive practices regarding medicinal costs
A: Signufarma’s hepatitis-C platform has been a positive
and a general lack of services related to the provision
achievement in terms of the information collected and
of pills. However, there are opportunities beyond
patient monitoring. This protocol creates a treatment
merely providing medical treatment. The development
card that includes the complete treatment history:
of collaborative models is a key step toward achieving
when it started, whether the patient followed a therapy
patient centricity. Such models would help companies
beforehand and how the patient has evolved, all while
to improve their image and the level of health of the
maintaining the privacy of the patient’s personal
population while also achieving a reduction in costs.
information. The objective of these cards is to show how many patients have become permanently free of
To improve the industry’s image, several steps must be
the hepatitis C viral load. In Mexico hepatitis C is not a
taken. First, we must ensure that patients know what is
well-identified health problem, so the program enables
being done for them. They see a pill but not the effort in
Signufarma and the National Institute of Medical Science
R&D and manufacturing behind it. Actively listening to
and Nutrition Salvador Zubirán to measure the number of
them is another key step. That is something the industry
patients that start treatment and its success rate through
is not used to doing, although it is aware of the necessity.
monitoring and clinical tests. We expect to help more people by integrating more health-sector institutions into
Involving the patient’s voice in the equation, going “beyond
the program.
the pill” and making a holistic effort to offer integral solutions requires making changes within organizations. We
Q: What is your strategy for sales and what results have
should train our sales forces to move beyond the “science
you seen?
behind the drug” approach and educate physicians on the
A: Signufarma’s direct sales model enables us to do
relationships they need to have with patients and how to
several things. First, deliver medicine of a guaranteed
offer more integral solutions. It is necessary to generate
standard to the homes of chronic patients or to their
real-life and real-time information through technological
doctor’s office, which enables us to keep a record of
platforms and to have this data corroborated by the patient.
a patient’s intake. We deliver the exact prescribed product in the correct dosage, preventing the problem
IT enables patients to inform themselves about the
of prescription substitution. Second, monitoring the
pathologies they suffer and possible therapies, empowering
patient has increased our sales in certain chronicdegenerative areas between 20 and 25 percent. Patients provide feedback about their specific needs, particularly
Signufarma is a Mexican company that provides compliance
in oncologic and chronic-degenerative therapies. Third,
programs for chronic diseases to pharmaceutical customers
Signufarma provides patients with commercial options
through information technology and CRM programs, providing
such as deferred payments and discounts. We increased
solutions to low patient adherence
our sales because we take better care of patients.
VIEW FROM THE TOP
SOLUTIONS IN A THIRD OF THE STANDARD TIME ALONZO AUTREY Managing Director of DVA Mexicana
Q: What value is DVA Mexicana bringing to the healthcare
production cost and performance. For example, we
sector?
reformulate products to prevent syneresis, which occurs
A: EasyCoat, our own brand, includes the manufacturing
when packaged products like beverages, ham and cheese
of pharmaceutical film coatings for medicines. We are
start losing water and consumers find water accumulated
focused on understanding trends and the direction of
when they open the package. We also provide the
the market so we can build strong relationships with
vegetable proteins raw burgers need to stay consistent
our clients, offer an integral solution and launch it to
when the consumer cooks them. For those clients that
market as quickly as possible. If a client wants to launch
manufacture nutritional beverages and supplements, we
a medicine that has a soon-to-be expired patent, we look
create a functional mix that aims to make the product
at how to get supply sources that could be validated by
better. With this mix, the client can obtain the right
COFEPRIS to launch it in the shortest time possible. The
amount of proteins, vitamins and flavor.
diversity of our excipients and our film coating EasyCoat are key strengths for our pharma division. These allow
Q: What is your main focus: increasing the volume of
us to develop solutions in short periods of time, about a
production or entering new areas?
third of the market standard.
A: We are focusing on higher added-value activities for our customers. We do expect COFEPRIS to fully regulate
Q: What is the profile of DVA Mexicanaâ&#x20AC;&#x2122;s ideal client?
the excipient business in the same way as others, which
A: As most development does not occur in Mexico but
means having a plant with a GMP is an advantage and
in the US, some ingredients cannot be changed, so the
provides us with opportunities to export in the near future.
majority of our clients are those companies that do carry
Having a plant that is up to international standards is
out local development, often generics companies. Some are
opening the door for us. Thankfully, all the transnationals
from the US but also from India and Israel, among others.
that are in Mexico buy high-quality products from the US
For these types of companies, 50 percent of their sales go
and so we can compete. We must also comply with the
to the government through the public tenders. Generics
requirements of our foreign clients because many export
have much future potential in Mexico. The generics market
to the US and so must follow FDA regulations. Today, the
continues to grow expansively, at double digits.
Mexican industry is facing a challenge: how to become more efficient in logistics and productivity when buying
Q: What benefits is DVA and its clients deriving from the
ingredients.
changes in COFEPRIS regulations? A: COFEPRIS decided that all manufacturers must have a
When we began to see the dollar appreciating against the
GMP from an authorized source, such as the US, Brazil or
peso, the pressure on clients of pharmaceutical products
Mexico. It also mandated the separation of high-risk and
and food increased because everything is sold in pesos. The
low-risk products, which means that low-risk products
food sector has been challenging, but we have seen many
require a local GMP, whereas high-risk products have to be
opportunities. We have decided to invest in a functional
certified by another source. This makes the process more
blends manufacturing plant to continue to expand in the
agile and opens more opportunities for manufacturers.
higher added-value solutions.
Q: What nutritional products does DVA Mexicana offer? A: We are focused on dairy products, bakery, meat and
DVA is a pharmaceutical company focused on the elaboration
beverages. We have a plant in Atitalaquia, Hidalgo, and a
of active ingredients and pill coatings such as Easycoat,
laboratory where we elaborate functional solutions such
which has been in the market for more than 10 years. It also
as Appenmix to optimize our clientsâ&#x20AC;&#x2122; product quality,
manufactures industrial chemicals and nutritional products
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VIEW FROM THE TOP
HYGIENE ENGINEERING: INTEGRATING SOLUTIONS FOR INFECTION CONTOL MANUEL SÁNCHEZ Director General of Diphsa
242
Q: What was behind Diphsa’s decision to offer hygiene
Q: What process is the company following to provide these
engineering solutions?
solutions?
A: Diphsa was founded 27 years ago as a local supplier
A: We begin with a diagnosis in which we apply a method
of medical devices. Around 2000, public institutions
we developed for hospitals. We sit down and listen to our
centralized most of their purchases and the added value
customers to understand their processes, their workflows
that local suppliers like Diphsa offered to the market began
and the problems they face in daily operations. After the
to disappear. We had to identify new opportunities in the
diagnosis, we develop a proposal and establish a roadmap
health market and reformulate our business model.
that can take from one to five years.
Because we were working in infection control, we realized
Q: What added value does Diphsa offer to the health
that in Mexico there was a lack of solutions for hospitals.
sector’s supply chain?
The approach to the problem was the same as that which
A: We continuously work on state-of-the-art analyses
many vendors use in other hospital areas: machine, sell and
regarding medical technology to stay up-to-date with
service. But this was insufficient for solving the challenges
the latest innovations in the health sector. We are not
associated with infection control.
manufacturers, so we have the flexibility to identify and choose the best technology available regardless of brand.
Among healthcare stakeholders there also was, and still is,
This has been key in identifying technological trends and
a misconception that technology can solve operational and
innovations for all the different devices and technologies
procedural problems. To ensure safe processes we needed
required for a complete CSSD proposal. Our supply chain
to focus on having the right human resources within the
is global, with a very strong orientation toward Europe and
company, as well as training and infrastructure. With this in
Asia and we are constantly adding new products to our
mind, we began to develop the concept of turnkey solutions
portfolio. Our value is that we articulate a process rather
for the Central Sterilization Service Department (CSSD),
than a product approach.
examining each step of the process: architectural and operational diagnosis, workflow analysis, conceptual and
We have partnered with and made strategic alliances with
engineering re-design, construction, equipment, software,
global companies established in Mexico and specialized
training and process implementation. This approach has
in surgical instruments and operating rooms. The goal is
been effective in more than 80 hospitals and we have
to provide a complete solution that guarantees patient
expanded the model to other areas of infection control,
safety throughout the entire surgical cycle, from instrument
such as hydrogen peroxide room-disinfection systems, by
sterilization, to recovery after surgery.
developing our own brand and manufacturing in France. Starting this year, we are implementing the model for the
Q: What is Diphsa’s relationship with the public sector?
generation of medical oxygen in hospitals, for which we
A: We do not work with public institutions due to different
currently have a research and development project with
factors. First, standard procurement for medical devices
CONACYT. We are about to start exporting this approach
does not consider quality as a core value and most of the
through two joint ventures, in China and Uruguay.
time price is the main factor in purchases. We would like to work with public institutions to include the best and most cost-efficient devices in the National Formulary.
Diphsa is a Mexican hygiene engineering company with 25 years in the market supplying solutions for infection prevention.
The second reason we try to avoid public tenders is bribery
It elaborates integral solutions for sterilization, hygiene and
and corruption. We do not believe in this practice as a
medical oxygen solutions for private hospitals
business model and believe that value must be created in
terms of technology and knowledge. Most international
by Germany or France. Considering the conditions of Mexican
health companies are public or based in countries that
hospital infrastructure, this does not make sense. There should
have very strong sanctions for corruption, so they have
be a team in each hospital dedicated to epidemiological
strict compliance standards that would not allow them to
surveillance and the continuous systematic collection, analysis
overestimate their sales to bribe bureaucrats, which is the
and interpretation of all the information related to health
rule in most of the public tenders. International companies
matters. This analysis helps identify the risks and the source
that sell directly and have local offices represent a very small
of infections. In Mexico, we do not have the incentives to
number of the tender winners, which means higher prices,
gather and analyze this information because public hospitals
less access to technology and a scattered responsibility of
are very regulation-oriented and since the regulation is weak
technovigilance. The public institutions are not open to the
they actually can claim that they comply with the local norms.
new arrangements for CSSD projects, such as public-private
There is no reliable and public information that could help
partnerships with long-term contracts, while many private
patients demand higher infection-control standards. In the US
hospitals have understood this can benefit the population
and Europe the insurance organizations took action against
because of the accessibility of state-of-the-art technology
this so if a patient gets infected it is the hospitalâ&#x20AC;&#x2122;s responsibility.
for patient care. This is the reason we have been working
Therefore, hospitals started implementing measures to ensure
mainly with them. Although there are many economic
proper hygiene. However, this has not happened in Mexico yet.
incentives to invest our time in the public sector, it does
Training for nurses and doctors regarding infection control is
not match our corporate values to improve our offer and
also outdated. It is quite difficult for them to acknowledge this
guarantee the best for patients.
and to ask for internal training. We offer continuous education and training for everyone involved with the CSSD: training in
Q: What is the current situation of hospital-acquired
the use of medical equipment, the best practices for washing
infections in Mexico?
surgical instruments, technical support for engineering
A: According to the Ministry of Health, in Mexico the number
departments, safety in the handling of sterile material and
of hospital-acquired infections is only a third of those reported
other important topics.
VIEW FROM THE TOP
REGULATIONS HAMPERING WASTE-DISPOSAL OPPORTUNITIES ABRAHAM FRANKLIN Director General of Grupo Franklin
Q: What are the challenges of biowaste disposal and how
containers. The waste must be refrigerated at all times
do you overcome them?
because if gas escapes from one of the bags and is from
A: Challenges in our line of business begin with regulations.
contaminated blood, the effects could be disastrous. We
Getting the permits for the waste-collection trucks can take
need to transport our cargo at low temperatures to avoid
seven to eight months, so if we want to serve a hospital or
evaporation and to ensure no syringes or needles break.
to participate in a tender, we have to register trucks we
At the plant, workers dressed in biohazard suits put the
are not yet using. Also, we can only collect waste within a
waste into a large container, which has an enormous tube
catchment area and we are limited to working in the center
that rotates every hour to change the wasteâ&#x20AC;&#x2122;s position so
of the country. Opening a new plant to obtain clients further
that everything is burned evenly in our three chambers. The
away would require a US$20 million investment, which is
ashes obtained from that process are filtered through a fine
extremely risky without a signed contract in place.
fabric and taken to dumps. By the end of the process, all we emit is water. We also burn expired pharmaceuticals for
Q: What process do you use to safely dispose of
hospitals, for which they receive a tax reduction. If they did
biohazard waste?
not burn them, someone could take them from the trash.
A: Refrigerated trucks pick up garbage from public
Our trucks also have to be zero-emission vehicles, because
and private hospitals and take it to our plant in special
this is our companyâ&#x20AC;&#x2122;s distinguishing characteristic.
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VIEW FROM THE TOP
SECURITY IS IN THE AIR ÁNGEL DE VECCHI Director General of VECO
Q: How important is the health sector to VECO’s operations?
problems in Mexico, especially in cities such as Monterrey,
A: Traditionally, VECO has been more focused on pharma since
Toluca, Leon, Silao, Mexico City and Guadalajara, are
we invest heavily in pollution control. Now, we are starting
respiratory infections resulting from the terrible air quality.
to focus on hospitals, because they should invest more in
244
controlling the environment in both critical and noncritical
Q: What benefits do hospitals receive from VECO systems?
areas. We have just installed eight QUIROVECO air-filtering
A: An air-quality control system enables the reduction
units in Mexico City’s Hospital General. With this equipment,
of nosocomial infections caused by air contamination,
the operating room lamp is in the center and has a High
resulting in cost savings due the reduction of
Efficiency Particulate Air (HEPA) filter around it, ensuring the
hospitalization time and the use of antibiotics. Our air-
air is sterilized above and around the operating table. When it
filtering technology, coupled with a highly trained staff,
comes to innovation related to air purification, it is necessary
can reduce or eliminate the need for antibiotics.
to improve the validation processes and standardized operating procedures because air-filter technology has not
Q: Previously, 60 percent of your business went to the public
changed much in the airborne particle-efficiency filtered. The
sector. In which areas is VECO working specifically?
application design, however, evolves along with our clients’
A: The public sector is an important part of our business,
needs, which modify over time. There may be cases in which
especially in research and energy generation. Those working
clients require us to design an entire air-filtration system for
with hazardous substances understand the importance of
a special application and we validate the equipment’s quality.
ensuring they do not breath the virus. The same goes for the construction of laboratories. We also offer services to nuclear
Q: What steps are followed when a client requests a system?
laboratories that work in cancer treatment. We manage the
A: It is a long process. First, the customer sets out the
air-quality control of these centers, ensuring that radiation
required system and the air efficiency to be achieved
does not leak. Finally, VECO works with public-sector
according to ISO standards. Then, each component of
institutes that mix medicines.
the system is designed in accordance with the process requested. One of the greatest issues for hospitals is
Q: VECO sells its products worldwide. What is the added
nosocomial infections because hospitals are badly designed
value it offers as a Mexican company?
and the investment to correct this would be large. A
A: Our price/quality ratio is very good and some of our
hospital should be designed so that each consulting room
products from 1970 are still in use today. In 2016, we
has a system that brings in clean air from the corridor
began a process to redesign our equipment to prepare
and safely removes contaminated air from the consulting
ourselves to go out and look for stronger distributors in
room. However, to implement this change in the air system
the US, Canada and Europe, where investments of this
in existing large hospitals would require demolishing the
type are most common.
building and starting over. Q: What role do you see VECO playing in health in Mexico? We are developing systems that mitigate this not only for
What solutions can improve access to health?
hospitals but also for home applications. One of the main
A: We should get more involved in regulatory affairs, bringing the knowledge we have acquired nationally and internationally to generate regulations that force institutions to use adequate
the
air-pollution control systems. The CSG has begun certifying
purification of air and gases. It provides services to industries
hospitals and has increasingly raised standards, which has
including electronics, energy, nuclear engineering, aerospace,
enabled some to improve at a manageable pace. The main
pharmaceuticals, biochemistry and oil chemistry
objective should be standardization at a high-level.
VECO
manufactures
systems
and
equipment
for
VIEW FROM THE TOP
BETTER GAS MANAGEMENT, BETTER HEALTH SERVICES EDGAR ARTEAGA Director of the Medical Division for Inframedica
Q: What are the main solutions Inframedica offers the
Q: How are you addressing sleep issues?
healthcare sector?
A: We have a high-tech sleep clinic for the diagnosis and
A: Inframedica offers design, engineering and installation
treatment of obstructive sleep apnea. We treat more than
of supply networks for oxygen and medical gas through
1,000 patients and we have more than 80 mobile clinics
our wholesale and retail sales to hospitals and small
across the country offering this service.
clinics. We have good relationships with many medical groups, such as Ángeles, StarMédica, Hospital San José,
Q: What innovation is possible in the gas distribution market?
Hospital ABC and Beneficiencia Española.
A: The cooperation with our main partners, Air Products and Chemicals, allows us to modernize and use vanguard
Q: What strategy do you implement to ensure these clients
equipment for the supply of medicinal gases that contribute
stay with you from the start to the end of a project?
to long-term competitiveness.
A: Our solid infrastructure allows us to guarantee the maximum strength, efficacy, professionalism and responsibility that
Q: As a market leader, what is the added value Inframedica
our customers deserve. With hospital projects, we have a
brings to the healthcare industry?
complete team of specialists who are ready to collaborate
A: We are investing in large infrastructure to provide
on each part of the project. We collaborate with the main
services to treat diseases with high mortality in Mexico,
health institutions and physicians in respiratory care in Mexico.
like Chronic Obstructive Pulmonary Disease, which in 2016
Such is the case of Seguro Popular, which uses our solutions to
became the third cause of death in Mexico. We also develop
provide services in respiratory care to low-income populations.
alliances with the main health organizations and institutions that have allowed us to create solutions for the diagnosis,
Q: How do you manage your distribution?
treatment and follow-up of patients.
A: We have the largest distribution network in the country, which guarantees the delivery of medicinal oxygen to hospitals, clinics, homes of patients and those patients with
Inframedica is part of Mexican company Grupo Infra and has
affiliated insurance companies or government institutions.
almost 100 years of experience. It focuses on the development
This network is supported by 30 production plants and 200
of devices and infrastructural products for gas management,
sales points across the country.
health and work safety
Analyzing human gametes
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VIEW FROM THE TOP
SMALLER PHARMACIES FIGHTING BACK AGAINST BIG CHAINS GUILLERMO MARTORELL Director General of Grupo RFP
246
Q: What are the greatest challenges that pharmacies are
Q: To what extent will specialists in pharmacies be linked
facing in the current market?
to the specialized areas within stores?
A: We face aggressive competition from national chains that
A: They will be in two senses. First, salespeople will be
are entering areas where regional chains had maintained
specialized in what they are selling, usually linked to the
an unchallenged presence for many years. Everyone can
provider, which trains those people to use the products.
compete on price, but the main issue is service and a big
Secondly, we want to add specialized doctors such as
pharmacy can offer all the medicines listed on a prescription.
dermatologists. We will first see how this progresses and
The national chains often have large inventories and if a
then bring other areas online. We are even considering
regional pharmacy does not, it becomes less competitive.
offering basic dental services. The company we are
Medicines for chronic diseases are now in high demand
working with to provide doctors also collaborates with
and although people are cost-conscious, they also prefer to
us to set up clinics in those small towns that suffer from
obtain all the items they need at one store. Service, stock,
access issues.
location and price are the top four challenges. Q: What growth do you expect for home deliveries and Q: To what extent would you consider creating your own
online sales?
brand?
A: We are hoping for aggressive growth because we are
A: More than an own-brand, we would be creating an
still small. We need to more than double our revenue from
exclusive brand because it would be sold through our
home deliveries in 2018, reaching around 150 percent
pharmacies and would not bear the logo and branding of
growth as we are starting from a small base. We expect
each individual pharmacy. We are in the process of creating
to see growth of around 300-400 percent in our online
such a brand that would be available throughout the group.
services. The platform is already running in two chains. The
Generics are enjoying the most growth, so combining
back end of the platform will be the same for each chain,
generics with a private label should produce good results.
although the front end will reflect the individual chain.
To date the brand is designed and developed, we are simply awaiting regulatory approval. We hope to launch it in 4Q17.
Q: How is the platform organized and what impact is e-commerce having on pharmacies?
Q: What plans do you have to put doctors in these
A: We sell through various channels, one of which is online,
pharmacies?
which is an emerging and growing area. By technological
A: We have set up 100 consultancies so far from a base of
platform, we mean mostly two things. The first is information
zero and we continue to grow. Of those, 62 pharmacies
management at the point of sale. The second enables
are in operation and the others are still a work in progress.
operations related to inventory control, to sales statistics, costs
The doctors are not our employees and they have full
and putting costs online to allow customers to make quick
liberty to decide which treatment to prescribe. We use
decisions, promotions and discounts. In addition, we want to
a third party that is specialized in this area to find those
implement specialized software for personnel management,
doctors. In addition to general doctors, we hope to add
because there is a high level of rotation in the pharma-retail
specialized consultancies.
sector and constantly training people is expensive. Q: Will independent pharmacies have a role with the group?
Grupo Regional de Farmacias Productivas (Grupo RFP) was
A: We are working on a program to invite independent
founded in 2016, uniting pharmacies such as Farmacias San
pharmacies that we hope will be ready by the end of 2017.
Francisco de AsĂs, Farmatodo, Farmacia Noscaro, Farmacias
We hope to close 2017 operating around 600 pharmacies,
de Dios, SFG and SĂşper Farmacia Gems
not counting those that are independent.
VIEW FROM THE TOP
PHARMACIES: SAFE ACCESS TO HEALTH ANTONIO PASCUAL President of ANAFARMEX
Q: What main challenges in terms of administration are
important that the doctors in these offices are trained. With
pharmacies facing right now?
generics, pharmacies need to be clear about what is said
A: There are 45,000 outlets, including pharmacies and
regarding these products. We must avoid the conflicts of
convenience stores, that sell over-the-counter drugs and
interest that arise through prescription substitution.
30,000 pharmacies, including chains, self-service and SMEs. ANAFARMEX is pushing for a new model that strengthens
Q: What can be done to promote local businesses over
SME pharmacies or community pharmacies so that the
their larger counterparts?
network is composed mainly of this type of business, as
A: The quality of service is fundamental. If there is no quality
it is in Europe. In Mexico, we follow the American model,
service or certified staff related to those investments, the
which is vertical and employs a large inventory but with little
projects will be small. A prescription must be treated as
rationality at the sales point. The pharmacy is a service that
an official document and free access to drugs must be
provides drugs to the population and the European model
supported with advice from the operator. The price factor is
accomplishes this because in SME pharmacies, 80 percent
also affecting SME pharmacies, so the challenge is to reduce
of the inventory is pharmaceutical while the remaining 20
that gap between supermarkets and chain pharmacies.
percent is of another variety. In the American model, 30
COFECE has been researching noncompetitive business
percent of the products at supermarket pharmacies are
practices and hopefully in the future these will decrease.
pharmaceutical, while the remaining 70 percent are not. Q: There are products that have been withdrawn from the Q: What is ANAFARMEX’s main priority?
foreign market but are still sold in Mexico. What can be done?
A: We want to claim the role of pharmacies in dispensation.
A: Mexican pharmacies were not submitting pharmacovigilance
The WHO has proposed that all countries achieve better
reports but after the WHO started demanding these reports,
product management. To that end, Mexican authorities
certified pharmacy operators became obligated to do them.
are working to certify pharmacy operators. We provide
We also need to reinforce the importance of the patient report.
performance ratings based on CONOCER’s Competency
These new responsibilities brought by the new regulations will
Standard 468, which addresses the dispensation of drugs
help authorities decide when to remove a drug.
and health-related products at pharmacies. Through an agreement with the Ministry of Public Education and the
Q: How does ANAFARMEX contribute to the eradication of
Ministry of Health, we provide pharmacy employees with
illegal products in the pharmaceutical market?
training from the Integral System for Training on Dispensing
A: The WHO says that 10 percent of everything commercialized
(SICAD), COFEPRIS and CONOCER. In the future, we hope
in the market comes from illegal sources. Fortunately, in
that when customers enter a pharmacy of any type, they
Mexico the figure is 1.5 percent. We recommend that when
will see a sanitary or operating license, which lets them
consumers purchase products, they verify that the provider
know there is a certified operator on site. Right now, only
is a reliable company that has the official document of
30 percent of operators are certified.
recognition as a distributor issued by the Ministry of Public Education (SEP). ANAFARMEX has a permanent committee
Q: Medical consultations and branded generics are now
focused on the illicit market.
available at pharmacies. What challenges and opportunities does this represent? A: Fifty percent of the country’s 30,000 pharmacy outlets
ANAFARMEX is an association that represents mainly small
now have Pharmacy Anexed Consultories (CAF), where
and medium pharmacies but also some pharmaceutical chains,
there are around 10 million consultations per month, more
making up a network of 30,000 sales points. The association
than ISSSTE provides in the same period. However, it is
has been providing members with services for over 31 years
247
ROUNDTABLE
HOW ARE YOU OVERCOMING THE LOGISTICS HURDLES IN MEXICO?
Mexico is the 14 th largest country in the world, making distribution and transportation a logistical challenge. Added to its vastness is its reputation for insecurity, an issue companies must overcome to successfully transport goods. These issues not only pose logistical hurdles but can also contribute to higher expenses. Mexico Health Review asked relevant players from the logistics industry how they are tackling these and other challenges while delivering services and products in health and pharma in Mexico.
One of the greatest challenges we face is Mexico’s size, so we must ensure we provide an effective, efficient and continuous service. Security is a hot topic that requires care. We are a low-margin industry, so all additional costs immediately impact our 248
profitability. We need to be prudent about how we manage additional expenses, which, ideally, we should not have. The health industry in Mexico is also a complex and fragmented one that requires different skillsets. I truly believe that Mexico is one of
JOSÉ ALBERTO PEÑA Director General of Grupo Marzam
the most complex healthcare markets. 2017 will be a challenge from an exchange-rate perspective. For us, another key component is gasoline, which has a direct impact on our expenses. The exchange rate will have an impact on the industry as a whole because 90 percent of material used to produce medicines is imported.
In Mexico, many products are transported over land but a challenge that is not usually considered is the number of times a package can be exposed along the transport cycle. Before picking up a UPS Temperature True shipment, UPS works with its customers to provide a comprehensive analysis of shipping options and procedures, such as routing, type of transportation required, who will come into contact with the shipment, what type of carriers are acceptable for that type
INGRID RITTER Healthcare Strategist Latin America of UPS
of shipment and set up of contingency shipment plans. Everything is defined beforehand, so when we do pick up a shipment, we know exactly how it is going to move, from where to where and who needs to be notified.
The greatest risk is the loss or damage of the client’s assets. NOM-059, ratified in August 2016, is also important for us. It stipulates that to transport pharma goods within Mexico, a company must use vehicles specifically for this purpose and cannot transport anything but pharma goods. As we are already dedicated to this and have a cold chain in place, this norm has benefited us. Beginning a project is often the most difficult phase because companies do not have the full
MARIO GARCÍA Vice President of Operations at GNK Logística
scope of the project. The private sector is more demanding due to their corporate governance and compliance structures and procedures. The tolerable margin of error is extremely narrow. Governments often do not have standardized procedures or high standards when dealing with pharma goods and their warehouses in most cases do not comply with any NOM rules or regulations, nor do their vehicles.
Protests do not affect us much. What does impact us greatly is the Hoy No Circula (No Drive Day). In 2016, 40 percent of our vehicles could not circulate on any given day. With one No Drive Day per week, 20 percent of our vehicles are idle but with the double measure, two of every five are out of action. Distributing medicine becomes much more difficult. There are also security issues and areas we cannot enter because drivers are asked to pay bribes. We do not enter areas where the driver will be at risk, or when the risk is larger than the reward. If we were to push this, then we would be putting the health of the driver and the good
VÍCTOR SOTO Director General of Levic
condition of the medicine at risk. We are investing in R&D to allow our customers to buy from us online. In the first month, sales were laughable, but by March 2017 online sales represented 9 percent of our total.
Cost-efficiency is the most pressing issue. We must make our routes more profitable because many new, bigger competitors are entering the business attracted to the segment because distribution in the pharmaceutical sector is one of the best 249
remunerated. However, for a company like Majicarga it is difficult to compete against fleets of thousands of units and the entrance of these new competitors. The prices we must offer are much lower than three years ago. Businesses must find sustainable strategies that help growing companies maintain or even further develop so as not to be bought out or absorbed by larger ones. Insecurity is another significant challenge.
ERICK JIMÉNEZ Director General of Majicarga
Although we have a sophisticated monitoring system, the existent technology is limited. No distributor or technology company in the security market can fully guarantee that a unit carrying a client’s product will not get lost or robbed.
The main problem is the lack of logistics regulation for the transportation of laboratory samples and other types of materials. Those in charge of shipments are often unaware of the logistical intricacies involved and delivery companies can be blamed for any problems. We are addressing this by providing more training for our staff and we have established certain internal rules. For example, if the container provided by our client to transport a sample is inappropriate, we would reject the order or use one of our available containers. Even though a value cannot be placed on samples, an inappropriate protocol can translate to a loss of millions of dollars for
JOSÉ ERIC DELGADO Director General of Sicamsa
clinical laboratories. The samples we transport can be essential to a patient’s health so our mission is to deliver it in the right way and as quickly as possible.
Due to quality and security concerns with land transportation services, the industry has increased the volume of pharma products transported by air. We have been offering specialized services for the domestic market for the last three years and our market penetration has grown over 100 percent each year. Today, we transport around 12,000 tons of pharma products every year, which represents 90 percent of the domestic air pharma market. Our biggest strength is Aeroméxico’s security processes, which make us the most secure airline to fly with. We have invested a lot of resources over the past three years to make sure that 100 percent of our cargo is screened and sterile, which makes us the preferred carrier for most agencies.
RAFAEL FIGUEROA Director General of Aeroméxico Cargo
Novo Nordisk cycling team
HEALTH CONCERNS
11
The increase of life expectancy due to the control of infectious diseases has given foot for new concerns such as chronic diseases, common in the elderly population and a group of young people prone to these conditions due to unhealthy lifestyles. Chronic diseases such as diabetes, obesity, cardiovascular conditions, cancer and renal deficiency are a priority for citizens and healthcare institutions. Also, issues such as teenage pregnancy, breast feeding, maternal mortality and geriatrics are demanding more attention and more resources. Efforts from the public healthcare system are focused on providing care for these patients once they are diagnosed, which is sucking up most of the shrinking public budget without producing effective results. The new action plan is focused on prevention strategies that could help reduce the rising number of cases, together with the creation of awareness campaigns on the main health issues. The Mexican population lacks discipline in medical checkups, only visiting a doctor when feeling discomfort or pain, which leads to conditions being diagnosed in late stages when very little or nothing can be done to alleviate the condition. This also results in higher costs for health institutions. This chapter will cover the main health concerns in Mexico explaining what healthcare players in the sector are doing to solve them.
251
CHAPTER 11: HEALTH CONCERNS 254
ANALYSIS: Serious Diagnosis for the Mexican Population
256
VIEW FROM THE TOP: Yiannis Mallis, Novo Nordisk
258
VIEW FROM THE TOP: Irma Egoavil, Ferring Pharmaceuticals
260
VIEW FROM THE TOP: Erick Alexanderson, SMC
261
VIEW FROM THE TOP: Claudio Castro, Synthon
262
ANALYSIS: The Three Types of Diabetes
263
VIEW FROM THE TOP: Carlos Oviedo, GDA
264
VIEW FROM THE TOP: Julián González, Check-Up Center
265
VIEW FROM THE TOP: Sergio Brown, Beckman Coulter and Danaher
266
INFOGRAPHIC: Obesity: A Growing Problem
267
VIEW FROM THE TOP: Carlos López, Medix
268
VIEW FROM THE TOP: Juan Carlos Borgatta, Borgatta
269
VIEW FROM THE TOP: Rogelio Villarreal, Centro de Oftalmología Monterrey
and Ojos Para México Foundation
270
ANALYSIS: Cancer a Top Killer Among Men and Women
272
EXPERT OPINION: Myriam Lingg, Swiss Tropical and Public Health Institute
and the University of Basel
274
ANALYSIS: Success Of 90-90-90 Aids Program Requires 20/20 Vision
275
INSIGHT: Juan Tamayo, COMOP
276
EXPERT OPINION: Carlos Ortiz, ABC Medical Center
Janet Pineda, ABC Medical Center
277
ANALYSIS: Maternal and Infant Health
278
VIEW FROM THE TOP: Felipe Espinosa, Laboratorios Collins
279
VIEW FROM THE TOP: Ignacio Castañón, Alcon Labs
280
ANALYSIS: Beware of Mosquitoes
253
ANALYSIS
SERIOUS DIAGNOSIS FOR THE MEXICAN POPULATION Public health policies in Mexico have evolved to tackle the
but now diabetes, cancer, depression and
challenges of a population that is living longer. The emergence
coronary diseases are more frequent. Mexico
of chronic disease control as a priority is putting a strain on
is a young country and the main driver for
public finances and highlighting the need for preventive care
growth is its large population. Therefore, it is important that all decision-makers in this
According to the Deloitte 2017 Global Healthcare Outlook,
country realize that the young population needs to be
by 2020, 50 percent of global healthcare expenditure
healthy to be productive.”
(around US$4 trillion) will be spent on three causes of
254
death: cardiovascular diseases, cancer and respiratory
In 2016, diabetes was the second-leading cause of death in
diseases. Today, Mexico’s main health concerns pivot
Mexico, accounting for 14 percent of all deaths nationwide,
around endocrine disorders, cardiometabolic diseases
according to the WHO report for that year. According to
and CNS conditions and finding cost-effective strategies
ENSANUT, the incidence of obesity among the Mexican
to prevent, diagnose and treat these conditions. The main
adult population is 71 percent although that varies across
cause of death among the Mexican population in 2015,
the country depending on a number of factors, a situation
according to INEGI, were heart conditions, followed by
that subsequently demands different tactics, making
diabetes mellitus and cancer.
a concerted policy approach difficult. “There are very clear regional differences based on the cultural traits and
Mexico’s top priorities can be categorized by age group.
customs of the population. For example, the folklore of
First, fight child obesity and teenage pregnancy to
each state has an impact on eating habits and this can vary
ensure the wellbeing of future generations. According
widely across the country, requiring a different approach
to ENSANUT, the combined prevalence of obesity and
in each location,” says Erik Alexánderson, President of the
overweight in children between the age of 5 and 11 is
Mexican Society of Cardiology (SMC).
33.2 percent. Second, address the increasing prevalence among an aging population of CNS diseases such as
The Mexican government is addressing the problem by
Alzheimer’s, diabetes and cardiovascular diseases. Third,
implementing a special tax on production and services
educate the generation of young adults who are prone to
(IEPS) related to sugary drinks. In addition, the country is
diseases caused by unhealthy lifestyles. “We are shifting
considering the possible application of a tax on products
from infectious disease to chronic diseases,” says Oscar
with a high sugar or fat content. But taxation alone will
Parra, Managing Director of Mexico, Central America and
not solve a problem that begins with the population’s lack
Andes of Lundbeck. “Before, bacteria caused illnesses
of knowledge about the disease and its causal factors.
PERCENTAGE OF THE POPULATION PER AREA WEIGHT IN MEXICO PER REGION (percent)
PERCENTAGE OF THE POPULATION PER REGION WEIGHT IN MEXICO PER AREA (percent)
50
50
40
40
30
30
20
20
10
10
0
0 Rural
Urban
OBESE (EQUAL OR THAN 30) Obese MORE Normal OVERWEIGHT (25-29.9) Overweight Underweight NORMAL (18.5-24.9) Source: ENSANUT 2016 UNDERWEIGHT (LESS THAN O EQUAL TO 18.5)
North
Center
Mexico City
OBESE (EQUAL OR THAN 30) Obese MORE Normal OVERWEIGHT (25-29.9) Overweight Underweight NORMAL (18.5-24.9) UNDERWEIGHT (LESS THAN O EQUAL TO 18.5)
South
ENSANUT’s results showed that 76.3 percent of Mexicans
the costs of treatment, especially amid a rise in life
do not know how many calories they should consume each
expectancy. According to INEGI, life expectancy for
day and only 14 percent of adults comply with the WHO’s
Mexican men increased from 71 years in 2010 to 73 in 2016
suggestion of 150 minutes of exercise per week. Yet. the
and for Mexican women from 77 in 2010 to almost 78 in
survey also revealed that 62.3 percent of the population
2016. According to Deloitte’s Global Health Care Outlook
considers they have healthy nutrition and 67.3 percent
2017, life expectancy in Mexico is projected to increase
consider themselves physically active.
by one year by 2020. The report estimates that by 2020, global health expenditure will climb to US$8.7 trillion, from
TEEN PREGNANCY
US$7 trillion in 2015. Prevention and early diagnosis could
Another major concern, both at the health and social levels,
help reduce this burden. “Mexico has done a great job in
is the high rate of adolescent pregnancies. According to
generating consciousness, due in part to the government’s
the OECD report Society Glance 2016, Mexico ranks first
sponsorship of a large number of campaigns, although
among OECD countries in teenage pregnancy. Of every
there is still a great deal of work to do. Habits need to
1,000 babies born, 73.6 babies belong to teenage mothers
change, which is difficult,” says Carlos López, Director
between the age of 15 and 19, while the average for all
General of Mexican company Productos Medix, which is
OECD countries is 14 babies per 1,000.
dedicated to fighting overweight and obesity.
BABIES FROM WITH TEENAGE MOTHERS IN OECD OECDBORN COUNTRIES HIGHEST TEENAGE COUNTRIES FERTILITY(per 1,000 births)
ESTIMATED NUMBER OF PEOPLE WITH DEMENTIA ESTIMATED NUMBERS OF PEOPLE WITH DEMEN-IN TIA, MEXICO MEXICO (millions)
80
18
70
16
60
14
50
12 10
40
8
30
6 20
4
10
2 Hungary
Slovakia
US
Turkey
Chile
Mexico
0
Source: OECD data
0
Men
2015
2020
2025
2030
Women
Source: World Alzheimer's Report 2015
In response, the government has adopted a national
The private sector also has a significant role to play in
strategy MOTHERS for prevention of teenage pregnancy: ENAPEA, a FOR EVERY 1000 BIRTHS
the landscape of prevention and care and partnerships
program that was established to address this issue, targets
between private and public companies have become
zero pregnancies for ages 10 to 14 and a reduction by half
strategic. “We are focusing more on improving our
for ages 15 to 19 by 2030.
patients’ outcomes by helping institutions measure results
BABIES BRON FROM TEENAGE
and apply effective solutions, which gives us a competitive
FIGHTING CNS CONDITIONS
advantage. AMIIF and IMSS are also launching a project
Regarding CNS conditions, the most recent National Survey
to prioritize a group of critical diseases in which they
of Psychiatric Epidemiology shows that 23 percent of the
create rules so that the different companies offer shared-
population suffers from a mental condition. According
risk models that can provide access to innovations,” says
to the Mexican Health and Aging Study (ENASEM),
Alexis Serlin, Director General of global pharmaceutical
which appeared in the World Alzheimer Report 2016, the
and biotechnological company Novartis.
prevalence of dementia was 6.1 percent in the population aged 60 and above. The study also found that diabetes and
These initiatives and joint efforts between the private
depression were a risk factor for this condition.
and public sector will be key to addressing Mexico’s main health concerns. “Private companies are changing from
To face these health issues, the public healthcare systems
being providers to becoming partners,” says Fernando
are investing in prevention and early diagnoses to lower
Oliveros, Vice President of Medtronic.
255
VIEW FROM THE TOP
TREAT NOW TO AVOID COMPLICATIONS LATER YIANNIS MALLIS Vice President and General Manager of Novo Nordisk Mexico
Q: COFEPRIS is known for its strict regulatory approach.
256
Q: Novo Nordisk is working on oral insulin. What would
How did this impact Novo Nordiskâ&#x20AC;&#x2122;s operations?
the impact be in Mexico, where diabetes rates are so high?
A: Mexico has implemented strict regulations that have
A: Oral insulin has been the Holy Grail of diabetes for
impacted the entire value chain. These restrictions are
many years, other than finding an outright cure. It would
well-founded and are a natural evolution of the Mexican
be significant in a market like Mexico, but it is not a silver
industry. This is a positive tendency. There are some
bullet. In the midterm, it is more likely that oral glucagon-like
restrictions placed on operations, but overall the standard
peptide 1s (GLP1s) reach the market, which could offer an
of production in the country is positive.
excellent level of glycemic control for patients, with minimal risk of lowering glucose below optimal or safe levels. The
Q: With the increasing number of generics companies
arrival of oral GLP1s will transform treatment across the
entering Mexico, what strategy are you employing to
globe. As a company, we are investing in both technologies,
ensure Novo Nordisk products retain market share?
but we see oral GLP1s as a faster and better route into the
A: Mexico is a market in which generics are now dominant,
oral market, which should occur in the next five to 10 years.
mostly in oral treatments, but less so for insulin and injectables. Protein products cannot be copied exactly
Q: What advantages does Novo Nordiskâ&#x20AC;&#x2122;s new drug
due to the many intricacies and stages of the production
semaglutide for obesity offer and why move into this
process and their impact on the resulting molecule. Novo
segment?
Nordisk has a broad range of innovative insulin products
A: We have been working in diabetes for more than 90
and injectables, so the biosimilar/generics trend has not
years. For us, obesity is an adjunct area that has always been
had a dramatic effect on our business.
very exciting, but has never been considered a disease by the community of physicians. We have developed two GLP1
In addition to the top products, we offer high quality
molecules that work on both diabetes and obesity. One is
previous generation products at even more affordable
commercially available in Mexico, called liraglutide, which is
prices. We compete directly with biosimilars in the high
available in two formats: one to treat diabetes and a second for
volume/very low price segment, while our previous-
treating obesity. The other is semaglutide, the next generation
generation products compete in the medium price-range
of GLP1, which will also hopefully be used for diabetes and
and our latest and most innovative products compete in
obesity. The current GLP1 has excellent data in terms of
the best-in-class tier.
efficacy, safety and weight lowering effect and clinical trials with semaglutide have shown even greater promise. The good
Q: Last year, Novo Nordisk was the governmentâ&#x20AC;&#x2122;s top
news for us is that we have made an entry into this market and
provider of human insulin and had the third-largest share
we have other products in the pipeline for the next five to 10
of the overall diabetes segment. Can the company keep
years. We carry out many clinical trials in Mexico and the sites
pace going forward?
here are among the most efficient in the world.
A: Novo Nordisk is the largest insulin provider in the world, with over 50 percent of the global insulin market and
Q: Just over 6,000 people suffer coagulation issues in
25-30 percent of the overall diabetes market. In Mexico,
Mexico. What is the advantage for Novo Nordisk to cater
we are not the market leader yet and last year we had
to such a small number of patients?
8-10 percent of the market, depending on the segment,
A: There is an unmet medical need for patients, so our
which is three times less than our global average. As the
products make a very real and significant difference. As
demand for better diabetes care and products in Mexico
a company, we only enter a therapeutic area if we can
is growing, we are sure we will continue to grow strongly
make a difference. With our strong history in molecular
in coming years.
engineering, hemophilia is an attractive space in which
257 Technological innovation at MĂŠdica Sur
we can apply this principle of synthesizing, developing,
the industry and patients must all contribute in tandem. We
creating and producing proteins. Apart from the
will continue to offer attractive price points for our products
gratification of improving the everyday lives of people with
to make sure that an increasing number of patients can
hemophilia, it is also an attractive commercial opportunity.
receive better treatment. If they are using human insulin now, perhaps they could move onto modern insulin and
Q: What is the companyâ&#x20AC;&#x2122;s market position in the
then potentially to our best-in-class and most innovative
hemophilia segment?
insulin: insulin degludec.
A: For patients with hemophilia who have developed inhibitors, we are leaders with recombinant factor VIIa
We need to help and empower people with diabetes to
(rFVIIa) in Mexico, offering treatment to almost three-
take ownership of their disease, follow the regimen, do not
quarters of them. From the smaller inhibitors segment,
cut corners and become really interested in achieving the
we are now entering the broader hemophilia population.
best outcome, to see real progress in bending the diabetes
Turoctocog, our new recombinant factor VIII product,
complications curve. If patients follow this path, they may
entered the market in 2017 and it has been successful so far.
be able to avoid retinopathy, blindness or kidney disease and live a healthy life.
Q: What is the added-value Novo Nordisk provides in the growth hormone segment over its competitors?
In most countries, pharmaceuticals represent only 10
A: We offer a constant presence and dedication to the
percent of the total cost of diabetes. If people can invest
patient. When we enter a segment or a medical need, we
that first 10 percent or even a little more to get access
are there to stay. People know they can depend on us, that
to better products, a big part of the other 90 percent of
we will continue focusing on that area and supporting the
costs can hopefully be avoided. In Mexico, this is critical,
patients for as long as there is demand for our products. We
because the system is now treating the complications of
have attractive devices for patients, such as a pen instead
people that began suffering from diabetes 15 years ago.
of a needle and syringe. In addition, we support patients
Since then, the diabetic population has more than doubled.
and doctors with education and other services. Q: As head of Novo Nordisk Mexico, how will you
Novo Nordisk is a Danish pharmaceutical company that is a
contribute to Mexican healthcare over the next two years?
world-leader in diabetes, growth hormones, and hemophilia.
A: Diabetes is a problem that is too big for one company or
With a global presence in over 180 countries, it has been
party to solve. The public sector, the medical community,
operating in Mexico since 2004
VIEW FROM THE TOP
DIVERSE NICHES PROVIDING GROWTH IRMA EGOAVIL Director General of Ferring Pharmaceuticals Mexico
258
Q: Ferring operates in many areas, some quite specialized.
casa (Baby at home) that helps patients with a fertility
Which are the most relevant for the Mexican market?
need who do not have the purchasing power to access
A: Our urology portfolio contains a product aimed at
treatment. The major problem in reproductive health is
hormonal dependent prostatic cancer, an antagonist that
that all costs are paid for fully out-of-pocket, so not all
enables fast and safe disease control without increasing
patients are able to undergo treatment. As world leaders in
cardiovascular risk, a relevant factor for the Mexican
reproductive care, through our Proteger (Protect) program
population. In addition, in August 2017 we will be launching
we work with INCan and other associations to identify
a product for the treatment of patients with erectile
and support female patients who have cancer and could
dysfunction. Although it would be a first-line treatment,
potentially have a future reproductive need. Our program
it will be particularly useful for patients with metabolic
enables them to protect their ovules and thus ensure
syndrome, obesity or cardiovascular disease because this
future possibilities of getting pregnant. We work mostly
segment is at risk if systemic treatment options are used.
with breast cancer patients because it is a disease that can be cured if detected early enough.
Q: What is Ferring’s most interesting project at this time? A: Ferring is not a Big Pharma nor an orphan drugs
Q: What internal and external factors have contributed to
manufacturer but a specialized company attending niche
the company’s growth?
pathologies. We are becoming a more technology-oriented
A: Ferring has enjoyed success in the private and the public
company, which is due to the areas in which we work. For
sectors due to our portfolio and because we are committed
example, we manage a portfolio for patients with chronic
to helping people become parents and to keeping mothers
intestinal disease, which is not so frequent, is difficult to
and babies healthy, from conception to birth. Over one-third
diagnose and patients need a lot of follow-up during the
of our investment in R&D targets innovative treatments in
treatment. We have been providing digital tools to provide
reproductive and maternal health but we are also passionate
such follow-ups for the past three years.
about making a difference to people’s health and quality of life through our work. Something we are working on
Q: How can technological innovations help patients?
is diversification. We supply to 18 countries in the region,
A: The way they work varies according to therapeutic
which has also helped us to grow and we have striven to
areas. For example, we have an app for patients with
differentiate ourselves and bring products here that could
inflammatory bowel disease that provides information on
have an impact on the population.
the different stages of the disease and the reasons behind its progression. The main issue for these patients is that
Q: Which products will you bring to Mexico?
even though the disease may be controlled, there could be
A: We will be launching three new products in the short
a specific event that pushes it to another stage. We provide
to medium term. The first is the treatment for erectile
support and teach them to identify symptoms. Another
dysfunction. The others are focused on fertility. One is a
program helps patients with prostatic cancer track the
biotech product that is a recombinant treatment, different
disease properly, providing them with access to prostatic
from what is on the market because it enables doctors to
antigen testing. Ferring also runs a program called BB en
tailor doses to a patient’s specific needs. The other is a treatment that makes it easier for a fertilized egg to attach to the uterus at the beginning of pregnancy. This treatment
Ferring Pharmaceuticals is a Swiss company that has a wide
has an innovative application and dissolution method
portfolio of products spanning prostate cancer, birth, intestinal
that supports the proper absorption of the drug, which
inflammation, assisted reproduction, bed wetting, cirrhosis
differentiates it from other intravaginal alternatives. This
bleeding and coagulation issues
will be on the market in September 2017.
Q: What challenges do you face when bringing innovation to Mexico and how do you overcome those? A: Sometimes, access to innovation in Mexico is not easy and can take a long time. Even if innovation can deliver added-value, it must be proven. Adoption of innovation can also be challenging as it sometimes means that the therapeutic conduct has to be changed. For example, our new erectile dysfunction product will meet an unmet need and for it to be effective we have to work with physicians and medical associations to ensure it is used in the right way and prescribed for the right patients. The testing and dosage adjustment for the recombinant personalized fertility treatment that we will be launching will be different from current alternatives in the market and will require us to support physicians as they adopt the product. Q: Ferring entered a partnership with Metabogen to produce probiotics for pregnant women. What role do alliances play for the company? A: Alliances are important. However, Ferring is a private company focused on innovation and clinical research and just like all companies we need to be selective in this area, allying with those that could help maximize our business. The investment required to put a product on the market is huge, sometimes over US$1 billion, and the likelihood of success is limited. Companies that are good at R&D in a specific area can benefit from these alliances. Q: There is a lack of reliable, updated information on health in Mexico. Is there an opportunity to use your apps to provide a database? A: That is not so easy. We can extract some epidemiological data but the aim of our digital tools is to support doctors with patient management and to understand diseases. Institutions are becoming more open to collaboration so perhaps there may be an opportunity to explore an alternative like this in the future. If we want to be successful as a country and society in changing Mexicoâ&#x20AC;&#x2122;s healthcare indicators we have to find ways to make alliances with public and private players. Q: What will your priorities be for 2017 other than launching those three new products? A: We will have to maintain our leadership in the area of fertility. We closed 2016 with over 60 percent market share in Mexicoâ&#x20AC;&#x2122;s fertility segment. We have to keep doing what has worked and also find new ways to support our business over the long term. There is an opportunity with our product for prostatic cancer to help more patients at an institutional level, so we need to work with public institutions to show the benefits this hormonal treatment could provide without increasing cardiovascular risk and to ensure it is fully reimbursed. We will also work to maximize our digital platforms to ensure that everyone who can benefit from them has access.
VIEW FROM THE TOP
NATIONAL-LOCAL EFFORT NEEDED TO COMBAT HEART DISEASE ERICK ALEXANDERSON President of the SMC
Q: What are the main problems the society faces in the
an absolute truth 20 years ago is no longer useful. In half a
different regions of the country?
century, cardiology has changed immensely and I cannot
A: There are very clear regional differences based on the
imagine what it will be like in 50 years.
cultural traits and customs of the population. For example,
260
the folklore of each state has an impact on eating habits
Q: What cardiac problems most plague Mexicans?
and this can vary widely across the country, requiring a
A: Cardiac diseases are the main cause of death in the
different approach in each location. Some eating habits make
Mexican population, accounting for about 127,000 deaths
people more prone to atherosclerosis, the accumulation of
every year. This mortality rate is higher than that of cancer,
cholesterol in the arteries, because they eat too much fat
pulmonary diseases and even diabetes. In fact, most diabetic
and red meat. Also, working habits and stress levels to which
patients die due to heart failure. Ischemic heart disease and
each population is exposed have an impact. The northern
heart attack are the main cardiac problems causing these
states have a strong custom of achieving targets rapidly, so
deaths. There are many risk factors for these conditions
they work under a lot of stress. In higher income locations,
and our population has most of them. The major ones are
work hours are longer, so people usually eat out and lack
tobacco use, hypertension, atherosclerosis, dyslipidemia
time to exercise, which puts people under more stress. With a
and diabetes mellitus. Then there are secondary factors like
lower income demographic, people have more time to move
overweight, obesity, sedentarism, stress and tension. What
and walk. The weather and pollution also play an important
triggers the burden of cardiovascular problems is that 20
role. Considering these factors, we cannot pretend that what
million Mexicans are hypertensive, only a third of them
we do in one place is applicable to others. We cannot look
know it and just a portion of those are well-treated. Plus,
at Mexico as a unique concept because it is the result of
about 60 to 70 percent of our population has altered lipids.
a group of situations and environments. We cannot make
But since these are problems that do not generate major
public health solutions based on a standard citizen because
discomfort for a long time, people only seek care when they
there is no standard citizen.
are experiencing grave symptoms.
Q: What is the associationâ&#x20AC;&#x2122;s relationship with regional
Q: What are the main challenges in addressing these issues?
cardiology societies?
A: The number of patients with cardiovascular disease is
A: For the Mexican Society of Cardiology it is important to
rising every day. We see young people dying of a sudden
approach the organizationâ&#x20AC;&#x2122;s regional branches. We believe
heart attack. There are patients 30 or 40 years of age with
there should be more cooperation between associations,
heart problems due to diabetes, hypertension or obesity at
so their projects can have a national health and educational
a young age, and many of them never did anything about
impact and have access to the improvements developed in
it. This is due to the Latin culture of not going to the doctor
our central offices. That also creates a stronger sense of
until presenting pain. In Mexico, there is no preventive culture
belonging. We have signed agreements with seven regional
like in Europe, the US or Canada. Besides these young people
societies and we are working on more. These agreements will
dying of heart disease, we have a population niche that did
give them access to our expertise, databases and academic
not exist before: the elderly. With the control of infectious
sessions. Cardiology is evolving at a high speed; what was
diseases, we have increased life expectancy and people now live to 76 on average, much more than 20 years ago. Today, we have many 80-year-old patients and their probability of
The Mexican Society of Cardiology (SMC) focuses on the
suffering from cardiac disease is high as these are chronic
study, research and execution of new knowledge in the field of
diseases caused by age. Our challenge is to take care of
cardiology for scientific and academic applications in Mexico.
these two population groups and achieve the WHO objective
Based in Mexico City, it has branches throughout the country
of reducing cardiac death by 25 percent by 2025.
VIEW FROM THE TOP
RECONSIDERED MISSION BROADENS FOCUS FROM GENERICS CLAUDIO CASTRO General Manager of Synthon
Q: What is the strategy behind Synthon’s shift from
and in certain circumstances almost 50 percent. Our
generics to CNS, oncology and MS?
company is always betting on the future.
A: We still produce generics in these therapeutic areas but the dream of Synthon’s founder was to develop
Q: What are your plans for the plant in Jalisco, soon to
high-quality molecules at affordable prices to reach
open and how will it impact your position here?
unattended populations.
A: The plant required an investment of around US$20 million and will measure 8,000m2 with a capacity of 200
During its early stages, the company developed molecules
million tablets, 200 million capsules, 15 million blister
for large consumer volumes. International market trends
packs and 1 million bottles. The plant is mainly focused on
eroded the price of these molecules and in 2007 the
high-containment products such as oncological products,
company reconsidered its mission. Generics were growing
for which volumes are small. It will be certified by the
because countries were seeking quality drugs at good
EMA, as are all our sites, because we have plans to export
prices and biotechnology provided the biological medicines
in the future.
to replace small molecule medicines. We wanted to reach patients in both areas so we created a division called Synthon Generics and another called Synthon Biopharmaceuticals. The latter develops new molecules such as antibody drug conjugates to fight cancer, especially breast
The main focus right now is to produce for
35%
of total sales revenue is invested in R&D globally
and prostate cancer.
Mexico but since COFEPRIS is recognized in certain Central American countries, some products manufactured in this plant will be sent to Central America. Given Mexico’s proximity to the US, in the future it could be an option to gain FDA approval to send our products north as well. There is no doubt
Synthon focuses on CNS because the
the plant will make our company stronger.
population is aging. If we had evaluated the market 50 years
We did not build it to increase our production capacity
ago, we would have chosen to tackle tuberculosis or typhus
because we have enough capacity globally to supply
because people died of these illnesses at a young age. A
Mexico without a problem.
change in hygiene habits controlled those diseases but new ones developed as people grew old, such as Alzheimer’s,
Q: What are Synthon’s plans and expectations in the
Parkinson’s and cancer. Now CNS is a big market because
coming years?
there is a large population that needs care.
We want to become a quality reference in oncology and to be ranked within the top 15 laboratories worldwide treating
Q: What areas of research do you manage in Mexico?
CNS and MS. We have two chemotherapy products in the
A: In Mexico we carry out the clinical studies that the
market and are launching products for multiple myeloma
authorities require of us and participate in the company’s
and lung cancer, and we are working on Imatinib, our first
global research projects. We are planning to start phase
product for leukemia. We are the only lab in Mexico that
three of our SYD 985 project involving breast cancer
has three aromatase inhibitors for breast cancer.
monoclonal antibodies and Mexico is one of the study’s sites. We will look for patients needing treatment and register the protocol with CROs. We need patients with
Synthon, founded in 1991, looks to become a recognized
terminal breast cancer that bear specific technical traits,
leader in specialty pharmaceuticals, focusing on autoimmune/
such as HER 2 positive tumors. Globally we invest around
neurodegenerative diseases, particularly multiple sclerosis
35 percent of our total sales in research in a regular year
(MS) and oncology
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ANALYSIS
THE THREE TYPES OF DIABETES In recent decades, diabetes has crept into people’s lives
TYPE 1 DIABETES (T1D)
to become a main cause of mortality in Mexico. A chronic
T1D, previously known as insulin-dependent,
disease, diabetes impacts the sufferer for life and has a
juvenile or childhood-onset diabetes, is usually
variety of devastating side effects
present from birth, childhood or adolescence and is characterized by a lack of insulin.
It is no secret that diabetes is rampant in Mexico, linked
Causes and risk factors remain unknown and prevention
to the poor lifestyle choices of its citizens and increase
techniques are yet to be discovered, though it is thought
rates of obesity. Despite the efforts of health organizations
to be the result of genes and environmental factors yet to
and private companies around the country to prevent
be determined. A daily dose of insulin, the hormone that
development and promote early diagnosis of the condition,
controls blood sugar levels, is needed to prevent death.
prevalence rates are still high. By 2014, around 422 million
Symptoms of T1D include frequent urination, thirst, constant
people worldwide suffered from diabetes, which is one in
hunger, weight loss, vision changes and fatigue.
every 11 people, a figure that has quadrupled since 1980. The
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latest WHO figures attribute 1.5 million deaths per year to
TYPE 2 DIABETES (T2D)
diabetes, most of which occur in low and middle-income
T2D is known as acquired diabetes, as it is usually caused by
countries as the population lacks access to the medicine
risk factors such as obesity and by the body’s ineffective use
and technology needed.
of insulin. It is much more common than T1D and accounts for most diabetes-related deaths. T2D is preventable and
“The number of deaths due to diabetes multiplied by
global health organizations and governments recommend
about seven times between 1980 and 2015, from around
maintaining healthy eating habits, avoiding tobacco use
14,600 in 1980 to 98,500 in 2015. In the 21st century so
and exercising adequately. Most recently, a high intake of
far, there have been 1.1 million Mexican deaths directly due
sugary beverages has been linked to diabetes. This is an
to diabetes. This is a grave problem,” says José Narro,
issue in Mexico, a country consistently ranked among the
Minister of Health of Mexico. According to a WHO report,
top five worldwide for consumption of sugary beverages.
in 2016 diabetes was responsible for 14 percent of deaths
Poor disease management can trigger seizures, loss of
in Mexico, more than all cancers, which killed 12 percent
consciousness and diabetic ketoacidosis (KDA), which leads
of the population. In 1980, diabetes was responsible
to a diabetic coma in T1D and T2D. A hyperosmolar coma is
for only around 7 percent of deaths in Mexico and has
a possible complication of T2D and it carries a mortality rate
consistently risen year on year. Being overweight, obese
of 10-20 percent. Other major complications are blindness,
or physically inactive increases the risk of contracting
heart attacks, stroke and lower limb amputation due to poor
diabetes. Mexico has an operational strategy for fighting
blood flow causing nerve damage and the development of
diabetes, overweight and obesity and physical inactivity.
foot ulcers, worsening to the point of amputation. Diabetes
It has implemented evidence-based national diabetes
is also one of the main causes of kidney failure.
guidelines and standardized criteria for referral of patients from primary care to higher levels of care. It also maintains
GESTATIONAL DIABETES (GD)
a diabetes registry. Furthermore, primary care facilities
Gestational diabetes is the least well-known of the three
generally carry insulin, metformin, sulphonyl urea, blood
types of diabetes, occurring during pregnancy. It is a form
glucose measurements, HbA1c tests and urine strips for
of hyperglycemia with blood sugar levels above normal
glucose and ketone measurement.
but below those of T1D or T2D. This leaves women at an increased risk of pregnancy and delivery complications and
Private companies are also capitalizing on this opportunity
also increases their risk and child’s risk of developing T2D
to provide services for the millions of Mexicans that suffer
in the future. It occurs as the body struggles to produce
from the condition and need follow-up services. Some such
enough insulin to control the increased blood sugar levels
as Uhma Salud, are providing diagnostics and online portals
during pregnancy and usually disappears after giving birth.
to change habits and prevent the conditions from developing in the first place. Others such as Salud Cercana are providing
Although any woman can develop GD, certain factors
follow-up services for those already diagnosed with chronic
place women more at risk including obesity, previously
conditions. However, despite the opportunities, investment
having given birth to a baby weighing over 4.5kg, previous
fund Dalus Capital remarks that many young companies lack
experience of GD, having a parent or sibling with diabetes
the knowledge, network and understanding of the ecosystem
and being of South Asian, Chinese, African-Caribbean or
to create impactful companies.
Middle Eastern origin.
VIEW FROM THE TOP
LAB ACQUISITIONS BOLSTER BRAND VALUE CARLOS OVIEDO Director General of GDA
Q: Lab acquisitions have helped spur GDA’s growth. What is
and symposiums to spread knowledge and best practices
the strategy to integrate these labs?
in the industry. These efforts will translate into better
A: Over the past two years GDA has acquired Olab
diagnostic services in the country.
Diagnósticos Médicos, Laboratorios Azteca and Laboratorio Clínico Jenner, which were the third, fourth
Q: How is GDA responding to Mexico’s need for quick and
and fifth most important players in Mexico City and its
precise diagnostics?
surrounding urban area and have made GDA the second-
A: The group is joining forces with international suppliers to
largest player in the industry. GDA is now integrating the
implement the highest available technology that will improve
operations of these companies, retaining the best qualities
diagnoses. Our blue room has the technology to conduct live
and practices of each.
sessions between the treating doctor and our radiologists. The platform also allows us to share images with experts
We are a multibrand group that will leverage operational
around the globe to improve the diagnosis in difficult cases.
and administrative synergies to enhance the value of each of our brands. Olab is recognized by many doctors and public
Q: What is your strategy to put Big Data to use?
and private-sector institutions for its expertise in imaging
A: In this industry, Big Data applications should translate
tests such as MRIs, tomographies, mammographies, x-rays
into timely disease prevention. In this area, we would like
and ultrasounds. Azteca is well-known for its leadership in
to cooperate with local governments and companies by
clinical analysis, especially in forensic science and toxicology
sharing all the information we gather to increase prevention.
analysis, while Jenner and Swisslab are focused on disease
The Ministry of Health is the appropriate entity to use this
prevention through clinical analysis. Although our brands have
information for the benefit of Mexican citizens. We believe
specializations, each has medical-imaging equipment.
COMED will accelerate the creation of such synergies and regulations to help the Mexican population without
We will concentrate our laboratory tests and analysis in a
threatening the privacy of our clients.
central location and our imaging diagnosis in a blue room, a model that will improve the quality and reduce time during
Q: What are your growth expectations for the following
the diagnosis process. The new 5,000m2 central laboratory
five years?
will be robotized and will provide service to our brands, clients
A: The president of Empresas Aries drafted an aggressive
and other potential clients, both nationally and internationally.
growth plan comprising organic and inorganic growth. This is why we are building strong foundations such as our new
We will continue to look for small to medium-size companies
central lab, which will be 10 times larger than the current lab
that complement the group’s portfolio and we will also resume
and capable of meeting our growth needs. Our goal is to
inorganic growth during the second half of 2017 through the
increase our market penetration in Mexico and expand our
expansion of our brands in Mexico City.
coverage in Latin America. To achieve this, we will open several branches across our brands, mostly in the same markets in
Q: How are these alliances impacting your operations?
which we are already present. We also have a few companies
A: In 2017, GDA collaborated with Grupo Diagnóstico
in sight that will increase our national and regional coverage.
PROA and Laboratorio Médico Polanco to establish the Mexican Council of Medical Diagnosis Companies (COMED), which aims to unite all the diagnostic labs in
GDA was founded in 2007 in Mexico as a private equity fund
Mexico to help lawmakers improve current regulations.
focused on real estate and later expanded to other sectors. The
We also want to put regulation in place to ensure
clinical diagnostics unit GDA has become a leading industry
healthy competition while also organizing congresses
player through various acquisitions
263
VIEW FROM THE TOP
REGULAR DIAGNOSTICS KEY TO GOOD HEALTH JULIÁN GONZÁLEZ Director General of Check-Up Center
Q: Check-Up Center’s target clients are high-level
forbidden for us to write prescriptions or change
executives. What is your strategy to reach this target?
prescriptions. Many doctors recommend us, but it is
A: In 2017, we will be opening a new center in the upscale
based on personal experience and merit.
Polanco neighborhood of Mexico City, although it has
264
been delayed by the remodeling of our center in the Santa
Q: Mexicans are well-known for avoiding check-ups. How
Fe business district. Check-Up Center has been in the
does this vary with high-level executives?
market for 15 years and was the first in Mexico to merge
A: They are more conscious of the need for check-
a full-body scan through computerized tomography with
ups and prevention. Around two-thirds of our clients
a traditional check-up.
are companies that send their top-level executives. Many of these are only meeting a requirement of
We renew most equipment every two to three years and
their company and around 10-15 percent do not come
tomography machines every five years. We renew with
back for their results, although digital results are kept
such frequency to also be at the height of innovation.
permanently. Some companies are active in making sure
In addition, all our studies are non-invasive. Take the
their employees do get the result and ask for statistics.
example of rectal sigmoidoscopy, part of a colonoscopy.
Cardiovascular diseases are the main trends. Some are
Only 5 percent of the population really needs this. We use
already conscious that they have an issue, others not.
our studies to determine whether a patient is a potential candidate for a full colonoscopy or not, limiting the
Q: What strategy is behind your remodeling the Santa
invasiveness of the procedure.
Fe clinic? A: We will be completely renewing the clinic, from the
Q: To what extent do you consider other clinics as your
reception to the distribution of space, and we are introducing
competitors?
more tests, such as for high-performance athletes. The sports
A: We only consider the two largest hospital chains as
check-up will be 100 percent focused on cardiovascular
our competitors due to target clients and the quality of
issues and causes of sudden-death and we will bring in the
their studies. Our doctors are experts in imagology and
new clients through marketing. Athletes are more aware of
our labs are managed by Quest Diagnostics, the largest
the importance of prevention and are concerned with their
diagnostics lab company in the world. It has the highest
health. This will be introduced by July 2017.
quality in Mexico and no one else reaches its standards. The tests are carried out in only two hours and the results
Q: How do you ensure that your doctors have the latest
are returned within a week. We obtain much more medical
knowledge?
information than standard check-ups.
A: Our medical director is active in making sure our doctors stay up-to-date and take courses. We also incentivize this;
Q: To what extent do you have partnerships with clinics
for example, our doctors have just taken a course on echo
to refer patients if they have an issue?
and heart ultrasounds. Although this is usually reserved for
A: We only produce diagnostics, we do not recommend
echo cardiographists, it is important for us because we will
anyone and we do not perform any treatment. It is
be including it in our check-ups for athletes. Q: Why is now the ideal moment for your expansion?
Check-Up Center has been providing preventive diagnostics
A: The perspective of Mexicans has changed. It is true
for 15 years in exclusive locations in Mexico City. It aims to
that Mexicans, especially the elderly, do not worry about
provide a full check-up in two hours, using the most up-to-
prevention, but young people are increasingly looking after
date technology on the market
themselves. We expect to fill the new clinic within six months.
VIEW FROM THE TOP
DIAGNOSING GROWTH OPPORTUNITIES SERGIO BROWN Vice President LATAM of Beckman Coulter and Director of Danaher LATAM
Q: How has Beckman Coulter adapted its solutions
volumes to achieve more efficient clinical diagnosis. We
portfolio to Mexico?
lead the automation market for Mexican public and
A: In Mexico, our solutions help health professionals to
private laboratories. In fact, we are the medical devices
deliver earlier diagnosis and more precise treatments.
manufacturer with the most automatized laboratory
We have solutions for immunology, clinical chemistry,
installations in the market. When a sample tube arrives
hematology, microbiology and urinalysis. Our products
to the lab, the process is automated from the beginning
simplify, automate and innovate complex biomedical
to when the final result is obtained. All this is possible
testing. In the microbiology field we developed cultures
through our working methodology, the Danaher Business
to identify what type of microorganisms are affecting
System, which applies the Kaizen methodology or the
the patient and which is the best treatment to eliminate
continuous improvement ideal to make processes more
the infection. Overall, we have a complete portfolio for
efficient. Besides our quality products and solutions, we
diagnosis and technology for medium-sized laboratories
transfer this methodology to our clients to help them
and we offer automatization for central laboratories that
achieve their objectives.
deal with high volume. Q: You recently bought the clinical microbiology business Mexico belongs to what we call high-growth markets
from Siemens Healthineers. How has this shaped your
and it is our main office in Latin America. We have been
plans?
here for a long time so we adapted our proposal to the
A: It has been an interesting opportunity that has enabled
marketâ&#x20AC;&#x2122;s needs. We have created a value proposition
us to expand into an area in which we had minimal
for both the public and the private sector and we have
activity. Microbiology has become very important for
established strategic relations with other companies to
us. In five years we have gone from having a strong
reach our final clients. Our equipment and instruments
business in hematology, immunoassays and clinical
have provided our clients with efficient results so they feel
chemistry, to expanding to microbiology and urinalysis.
safe working with us. Also, this success was led by our
All the acquisitions we have made are investments with
highly qualified team in the commercial and engineering
the purpose of creating a bigger value proposition for
sectors, which is our main differentiator.
our laboratory partners and our commercial partners.
Q: What type of customers are driving Beckman Coulterâ&#x20AC;&#x2122;s
Q: What new technologies and tests have you integrated?
growth in Mexico?
A: We have two new tests: P2PSA for men and
A: In Mexico, the market is segmented into the private and
antimullerian hormone for women. The latter helps women
the public sector. A larger volume is sold to the public sector
identify where they are in their reproductive age. The
through IMSS, Seguro Popular, ISSSTE and the Ministry of
time frames of human reproduction have changed greatly
Health. Our sales to the private sector are also growing
and this solution is helpful for women who postpone their
through the establishment of reference laboratories. We
maternal stage due to their professional life. The P2PSA
are offering the private sector solutions that allow them to
evaluates prostate health according to the prostate health
handle more test volume.
index, improving prostate cancer diagnosis.
In the public sector, we work with our network of authorized distributors, with whom we decide which
Beckman Coulter is an American manufacturer of analytical and
government tenders to participate in. We cannot
diagnostic solutions. It merged with US-based Danaher, which
always participate in all those we would like to, but the
owns innovation companies focused on testing and measurement
government is starting to consolidate and purchase larger
in several sectors, including life sciences and dental
265
INFOGRAPHIC
OBESITY: A GROWING PROBLEM There is no escaping the health problems being overweight or
dietary requirements. These statistics show
obese cause, especially as almost three of every four Mexicans
that Mexicans do not know what their ideal
fall into one of these two categories. Yet these conditions cannot
weight range is, nor when they step over it,
be solved with a pill and require profound behavioral change
and demonstrates the state of confusion in which the Mexican population resides and
The statistics tell a convincing tale, even if the people
the need for better diffusion of clearer information from
disagree: despite high overweight and obesity rates
the health authorities. In addition to unhealthy eating,
and low rates of fruit and vegetable consumption, in
the population suffers from a range of other influential
a self-evaluation the Mexican population reports lower
factors such as lack of sleep or insomnia and long work
rates of excess bodyweight and higher rates of healthy
hours which contribute to sedentarism and leave little
eating, in addition to not understanding food labeling and
time for exercise and healthy living.
OF MEXICAN ADULTS
61.3%
28.4 percent
considers they have a healthy diet
266
67.3%
considers themselves to be physically active
42.3%
regularly consumes vegetables
51.4%
reported sleeping less than seven hours. Insomnia (classed as difficulty in sleeping at least three days per week) affects almost a fifth of the population, mostly women.
2/3
of Mexicans report watching TV in the hour before going to sleep.
regularly consumes fruit OVERWEIGHT OR OBESE PER AGE RANGE IN MEXICO (percent) 100
80%
considers themselves capable of eating five or more portions of fruit or vegetables per day
76.6%
of the population suffers from abdominal obesity
48.4%
considers themselves overweight
6.7% 76.3%
44.6%
Source: ENSANUT 2016
considers themselves obese does not know how many calories one should consume in a day
reports that nutritional labelling on food is little comprehensible or incomprehensible
80 60 40 20 0
children 5 to 11
teenagers 12 to 19
GENDER COMPARISON OF OVERWEIGHT AND OBESITY IN MEXICAN CHILDREN (percent)
adults over 20 OF MEXICAN ADULTS AGED OVER 20
40
72.5%
30
Overweight or obese
20
10
0
Five to 11 years old
12 to 19 years old
Girls
Boys
Obesity Overweight
Obesity Overweight
76.6%
Abdominally obese
VIEW FROM THE TOP
MEXICO'S ONGOING ISSUE CARLOS LÓPEZ Director General of Medix
Q: Overweight and obesity was declared an epidemic in
Q: What are your priorities for 2017?
Mexico in late 2016. How has this impacted your operations?
A: For both 2017 and 2018, we will be focusing on
A: We have been focused on this problem for many years,
increasing sales. We grew by 7 percent in 2016 despite
but having overweight and obesity declared an epidemic
uncertain global conditions. Our target is 20 percent
helps us with the diffusion of knowledge because it
growth in sales in 2017 and we also want to maintain a
generates a higher consciousness that it is a problem, a
profitable model that satisfies shareholders as well as
chronic disease. When the company was first founded,
employees. In addition, Medix will be working on the
obesity was not seen as an epidemic but as an aesthetic
consolidation of its model and expanding sales channels.
problem. We must still figure out how to face this and
Database and knowledge integration will be improved to
how to reduce prevalence rates. Mexico has done a
offer more options in the future, factoring in Big Data.
great job in generating consciousness, due in part to the
Medix is working on a geographical expansion to have
government’s sponsorship of a large number of campaigns,
an important impact on the health of other countries. We
although there is still a great deal of work to do. Habits
are the biggest company offering obesity solutions in
need to change, which is difficult. Education also plays an important role. Overweight and obesity in children is more serious than these issues in the general population, yet, children suffering from these problems almost certainly will continue to do so in adulthood. Childhood overweight and obesity is also more difficult to solve because they are still growing, so restricting nutrition is not as simple as in adults. Despite the declaration having awoken consciousness, the solution remains a puzzle. Q: The ENSANUT 2016 results show overweight and obesity is considered a problem for other people. How is
“
Mexico and we want to achieve this in Latin America too.
Among people who are trying to lose weight, 70 percent are doing it for image and 30 percent for health”
Q: Does that expansion plan also include acquisitions?
Medix addressing this?
A: We are pursuing businesses in Chile, Bolivia, Uruguay,
A: ENSANUT 2016 was representative of how people
Peru, Colombia and Europe. Our strategy is to build
see themselves versus how they are. There are two ways
partnerships with major market players in each country,
of convincing people they have a problem. The health
not only in the pharmaceutical sector but in logistics and
side is more complicated, as often people do not feel ill.
distribution as well. We are always looking for opportunities
By posing overweight and obesity as a health problem,
to expand our product portfolios in the markets in which
people do not identify with this. We have taken a different
we are already present. In addition, Medix is working
approach, focusing on aesthetics and wellbeing. We ask
on an e-learning project with the objective of creating
patients if they would like to change their image. If we
an overweight and obesity community across different
ask what a person’s goal is, perhaps to play football with
countries, with specialists who can share experiences and
their children or go camping, but they are generally too
knowledge in this field.
tired to do so, this could be a target. Among people who are trying to lose weight, 70 percent are doing it for image and 30 percent for health. We help people reach
Medix has been dedicated to the fight against overweight and
their goals safely, which is vital. To drop a large amount
obesity since its inception in 1940, providing integral solutions
of weight quickly is bad for one’s health and in the long-
in 11 countries with the goal of diminishing the impact of these
term, the body responds negatively to this.
conditions
267
VIEW FROM THE TOP
INNOVATION, DIGITAL PUSHING DENTAL HEALTH JUAN CARLOS BORGATTA Director General of Borgatta
Q: How does Borgatta’s app contribute to improving
Nemocast 3D is only one of several software applications
healthcare?
developed by our partner NemoTec that we use, all
A: As with any medical specialization, orthodontics
deal with diagnoses and treatment planning. Nemotec
is influenced by technology and today diagnoses are
software has helped develop this new business model and
largely supported by technological tools such as 3D
35 percent of our platform is based on their technology.
images. Once the diagnoses are done, a treatment plan is 268
developed and executed based on images and software.
Q: How important is innovation to the success of
This eases the work of the physician and clearly shows
Borgatta’s business?
the patient what the treatment will be and the results.
A: Companies that want to be profitable must stay up-
The information can be illustrated with an interactive
to-date or they will not remain in the market. Innovation
app. This is the future of orthodontics and 90 percent
must be in your DNA and focused on the customer’s
of what we do.
needs. At Borgatta, we understand this and seek to develop simple and useful solutions for our clients.
Q: What is Borgatta doing to raise awareness of the importance of dental health among patients?
Q: In the past you have stated that customers today have
A: As a company, we are not only a supplier of materials
more information. How does this impact the industry?
but we also focus on continuous education through
A: It has both a good and an adverse impact. Good
courses, bringing scholars from different parts of Latin
because they look for information and adverse because the
America, supporting local researchers and working with
information they obtain is not always correct. In this respect,
universities. We also advertise to patients to create
the orthodontist plays an important role because he will be
awareness on how there is more to orthodontics than
the first to provide the patient with professional advice.
aesthetics. Borgatta wants to support both physicians and educational centers because this industry has the
Q: What role will Borgatta’s plant in Ixtapaluca play in
heaviest impact on most medical practices.
the company’s growth plans? A: We import all orthodontics products such as movement
Q: What are the most signifianct dental trends?
tools from different countries: the US, Japan, Korea and
A: The most common problems are related to poor dental
Brazil, among others. We produce radiography machines
hygiene and the subsequent problems. Issues related to
at international quality levels and export them. Recently,
prevention, which generally are mismanaged, especially
we received FDA approval to export to the US.
in government programs, are also near the top of the list. The tendencies include diagnosing based on 3D images,
Q: What is the average time required to obtain a sanitary
shortening the treatments using latest generation tools
registration?
and invisible dental correction. However, only a small
A: It depends on the class of the device. On average, a
percent of our business is based on prevention. In the
class II dental-device registration takes six months when
pharma division for example, we develop fluorides that
all documents are on hand and a class III takes about
are used to make children’s dental enamel more resistant.
nine months. Q: What are the company’s priorities for 2017-2018?
Borgatta is a Mexican company established in 1973 by
A: We have an obligation to understand market
founder Juan Carlos Borgatta with the aim of supporting
tendencies and stay updated. We need to be able to offer
dental professionals and preserving oral healthcare through
our customers and the market whatever solutions are
high-technology products
required to meet the latest trends.
VIEW FROM THE TOP
A BRIGHT FUTURE FOR MEXICO ROGELIO VILLARREAL Director General of Centro de Oftalmología Monterrey and Ojos Para México Foundation
Q: What are the main trends in ocular health you have
need new technology to detect cases early. The results will
observed over the past year?
be published in the Mexican Society Journal at the end of
A: One of the main concerns in Mexico is cataract. When
2017 and it will provide useful information for the future.
we provide cataract surgery, we are putting workers back into the economy. Mexico needs this. There is a significant
Q: What differences do you see in patients based on
problem in Mexico regarding ocular health because there are
age, socio-economic background and urban versus rural
instances in which national health institutions cannot provide
inhabitants?
the services needed. This is an opportunity for organizations
A: The social distribution of ages is changing in Mexico. The
like Ojos Para México to collaborate with those institutions
population now lives longer and we are seeing diseases
to bring the latest advances in ophthalmological technology
that present themselves later on in life, such as macular
to people in Mexico.
degeneration. Although the prevalence of glaucoma is 5 percent at 40, at 70 it is 18 percent and above that it rises
Q: How much of a priority is cataract surgery for the
to 30-35 percent. Like glaucoma, macular degeneration must
public sector?
be detected early because the impact is irreversible. Diabetic
A: It is a top priority, followed by glaucoma, because if it is
retinopathy is common due to the big diabetes problem in
not detected in time, it leads to problems that are irreversible.
Mexico and occurs in both T1D and T2D. It also requires early
We are working with the University of Monterrey (UDEM)
diagnosis to stop the progression of problems in the retina.
to develop a system for the early detection of glaucoma, so it can be treated and the ocular health of this segment
Q: What are the most challenging conditions you have faced?
of the population can be preserved. We have calculated
A: The most challenging cases are those that go to the
the economic impact of primary open angle glaucoma in
foundation Ojos para México at late stages of a disease, as
Mexico and the numbers are extremely high [potentially
there is not much we can do for them. The eye is already taken
US$659 million per year, according to an article published
by the disease and most cells cannot be replaced. However,
by Villarreal et al in the Revista Mexicana de Oftalmología].
we are working on a stem cell treatment to find a solution for
Through this detection system, we are trying to minimize
these challenging cases. Perhaps we will be able to help them
the efforts and costs required at the federal level.
with stem cells in the future.
Q: What percentage of issues is genetic versus
Q: What are your ambitions for 2017 and how do you aim
environmental? How does the diagnostics and treatment
to achieve them?
differ between them?
A: In 2017 we would like to see our own institute of
A: Through a protocol carried out at the University of
ophthalmology to provide all services in one place, with
Monterrey, we discovered that the prevalence of glaucoma
research in the building. We will be able to take new advances
in people aged over 40 in Mexico is 5 percent but 95
right from the bench to the patient’s bedside. We will also be
percent of that 5 percent was unaware of their condition,
offering surgery in 2017 with the Barraquer Ophthalmology
as it does not produce any pain. Once the patient notices
Center. Spanish doctors will be visiting us to participate in
sight loss, it is too late and the disease is in an advanced
cataract surgeries and to share their experiences with us.
stage. In addition, 95 percent of those 5 percent did not suffer from high intraocular pressure. This means there is another key factor for the appearance of glaucoma but we
Centro de Oftalmología Monterrey is a leading ophthalmological
are still trying to find out what it is. We also found that
clinic in Monterrey, Mexico. It treats a large number of patients
the best way to detect these cases was not pressure, so
from abroad with its cutting-edge techniques and performs
we conducted another test and we are concluding that we
research with stem cells
269
ANALYSIS
CANCER A TOP KILLER AMONG MEN AND WOMEN Cancer rates have increased dramatically in past decades, first
American Cancer Society reports that symptoms
appearing in the top 10 causes of death in Mexico in the 1960s.
often appear in later stages of the disease,
Today, cancer, cardiovascular disease and diabetes are three
meaning later diagnoses and lower survival rates.
of the biggest and most-feared killers worldwide
The most common risk factor for liver cancer is chronic hepatitis B or hepatitis C infection.
While genetic and environmental factors are known to be
Other risk factors include liver damage caused by alcoholism,
involved in cancer, science has not yet pegged a specific
obesity and T2D, according to the ACA.
cause for specific cancers. According to the WHO, 30 percent of deaths caused by cancers can be traced back
LIVER AND BILIARY PASSAGES CANCER
to five factors: high BMI, insufficient fruit and vegetable
In many countries biliary cancer is considered uncommon. It
intake, lack of physical activity, alcohol consumption and
was the eighth most common cancer in US men in 2014, 11th in
tobacco use.
UK men in 2013, ninth in Argentinian men in 2014 and seventh in Brazilian men in the same year. It is usually found more
270
The top five killer cancers differ per gender and per country.
commonly in South-East Asian countries; for example, it killed
For Mexican men, prostate, lung, liver & biliary passages,
the second most number of men in Singapore in 2014 and the
stomach and liver are the deadliest. For Mexican women,
Philippines in 2011. There are three types of bile duct cancer:
breast, uterus, liver & biliary passages, cervix uteri and liver
intrahepatic, perihilar and distal, the latter two of which are
are the main killers. Treatment is continually improving and,
classed as extrahepatic.
as a result, survival rates have and are continuing to improve. These are the main risk factors and survival rates of the
Bile duct cancer is particularly nasty. According to the
cancers that most affect Mexicans.
American Cancer Society, the five-year survival rate for localized or stage I extrahepatic bile duct cancer is 30
BREAST CANCER
percent, 24 percent for regional (stage II and III) and a mere 2
Breast cancer campaigns and news have taken over the
percent for distant or stage IV extrahepatic bile duct cancer.
health media in recent years. There are more and more drugs
For intrahepatic bile duct cancer, the five-year survival rates
being released to treat the condition and survival rates are
are even lower. There is only a 15 percent chance for stage
high. The five-year relative survival rate for those diagnosed
I, 6 percent for stage II and III and again only 2 percent for
with stage I breast cancer is almost 100 percent. Even at
stage IV, according to the ACA.
stage III, the survival rate is 72 percent, according to the American Cancer Association (ACA).
LUNG CANCER Worldwide, lung is the second most common cancer
CERVIX UTERI CANCER
behind prostate for men and breast for women. Lung
More commonly known as cervical cancer, this develops in
cancer is split into three main types: nonsmall cell, small
the lower part of the uterus in the area where the cervix and
cell and lung carcinoid or lung neuroendocrine tumor. The
the exocervix meet. Most of these cancers are squamous cell
ACA reports that about 85 percent are nonsmall cell, 10-
carcinomas, meaning they evolve from skin cells, according to
15 percent are small cell and less than 5 percent are lung
the ACA. HPV is associated with this disease, so vaccination is
carcinoid tumors.
highly recommended to avoid contracting it and subsequently later developing cervical cancer. Although rates have dropped
The main risk factors for lung cancer are environmental:
in countries with high levels of vaccination, it perseveres in
tobacco, radon, asbestos and diesel exhaust. Although
Mexico due to a cultural stigma of the vaccination, leading
tobacco use is the main risk factor, over 40,000 cases of
some parents to refuse vaccination of their children. This
lung cancer are diagnosed annually in nonsmokers. Black
cancer is easily detectable through pap smears, although
men and white women are the groups most at risk.
this requires adequate access to healthcare services, which remains a challenge in some parts of Mexico.
PROSTATE CANCER Prostate cancer is one of the cancers that most affects
LIVER CANCER
men worldwide and is the most common cancer in men in
Although there are several types of liver cancer, the most
Mexico. There are several types of prostate cancers though
common type is hepatocellular carcinoma (HCC). The
most are adenocarcinomas. Links between prostatic
intraepithelial neoplasia (PIN) and atypical small acinar
a diet rich in smoked and salted foods, tobacco use and
proliferation (ASAP) with prostate cancer are under study.
obesity. People with type A blood also have a higher risk of developing stomach cancer for reasons yet unknown.
The risk of prostate cancer is relatively high. The ACA explains that around one in seven men will contract
The five-year survival rate for stomach cancers detected
prostate cancer in their lifetimes and around one in 39 will
in stage IA is 71 percent, according to the ACA, although
die from it. It mostly affects older men, with the average
this drops rapidly through the stages. The overall, relative
age of contraction at 66. The five-year survival rates are
survival rate of stomach cancer is 29 percent.
equally high, with a rate of almost 100 percent for men with prostate cancers in local and regional stages. This
UTERUS CANCER
drops to 28 percent for distant stage cancers, once again
According to the Canadian Cancer Society, most uterine
highlighting the importance of early diagnosis.
cancers are endometrial carcinomas, whereas only a small percentage are uterine sarcomas. It is the second most
STOMACH CANCER
common cancer in women in Mexico, although it is most
Most stomach or gastric cancers are adenocarcinomas:
common in Caucasian and post-menopausal women. Other
cancers that start from the cells that line the stomach. The
risk factors include being overweight, never having given
most associated risk factors are helicobacter pylori infection,
birth, diabetes and endometrial hyperplasia.
MALE AND FEMALE CANCER DEATHS PER YEAR IN MEXICO (thousands)
271 Prostate
Breast Lung
Uterus
Liver & biliary passages
Liver & biliary passages
Stomach
Cervix uteri
Liver
Liver
Intestine
Stomach
Colon, rectum and anus
Intestine
Leukaemia
Colon, rectum and anus
Lip, oral cavity, pharynx, larynx and oesophagus
Lung
Colon
Ovary
Pancreas
Pancreas
Non-Hodgkin lymphoma
Colon
Kidney
Leukaemia
Brain, central nervous system
Gallbladder
Oesophagus
Non-Hodgkin lymphoma
Lip, oral cavity and pharynx
Brain, central nervous system
Bladder
Kidney
Larynx
Lip, oral cavity, pharynx, larynx and oesophagus
Gallbladder
Corpus uteri Multiple myeloma
Rectum and anus
Thyroid
Multiple myeloma Testis
Rectum and anus
Melanoma of skin
Lip, oral cavity and pharynx
Hodgkin lymphoma
Bladder
Thyroid
Melanoma of skin
Mesothelioma
Oesophagus
49,416
people were treated for breast cancer in IMSS in 2015
BLOOD, CNS, BONE
Nasopharynx
Hodgkin lymphoma Larynx
the 3 most common cancers in children
Mesothelioma Nasopharynx
8
7
6
5
4
3
2
Source: WHO database, 2014 data (latest available figures)
1
0
1
2
3
4
5
6
7
8
EXPERT OPINION
SURVIVAL RATES: AN OPPORTUNITY TO IMPROVE ORTHOPEDICS MYRIAM LINGG Ph.D. candidate at the Swiss Tropical and Public Health Institute and the University of Basel
272
Studies concerned with the epidemiology of hip and knee
2016); monitoring clinical treatment outcomes by
joint replacements show that the demand for primary
introducing arthroplasty registers (Gliklich et al., 2014);
joint replacements and revision surgery is growing (Patel
assessing HRMD risk through post-market due diligence
et al., 2015, CDCP, 2009). To control the financial impact
programmes (ODEP, 2015); classifying implant quality
of joint replacement, it is important to achieve good
(Poolman et al., 2015) and establishing revision rate
implant survival rates because the health expenditures
benchmarks to prevent the use of poorly performing
of revision surgery are significantly higher than primary
implants (NICE, 2014). These strategies are frequently
joint replacement (Kandala et al., 2015). Arthroplasty
integrated into regulatorsâ&#x20AC;&#x2122; work and help bridge the gap
register data shows that the clinical performance of
of evidence and uncertainty (Wilkinson and Crosbie, 2016,
hip and knee implants in the long-term demonstrates
Randall, 1997).
a strong variation (Herberts and Malchau, 2000). Using poorly performing implants increases the revision risk.
EPIDEMIOLOGY OF JOINT REPLACEMENTS
Yet, little is known about health policies encompassing
Joint replacements in Mexico will increase and life
strategies to decrease the use of poorly performing
expectancy may be an important indicator for the
hip and knee implants. The objective of this study is to
development of joint replacement demand. In Mexico, life
analyse the contribution of survival rate benchmarks as
expectancy has improved over the past 15 years (OECD,
recommendations for decision-making and to discuss the
2016a), the incidence of osteoarthritis increases rapidly
health economic contribution of introducing survival rate
in patients over 50 (Hooper et al., 2014) and in obese
benchmarks in Mexico.
populations (Kulkarni et al., 2016), which is a serious health burden in Mexico (OECD, 2016b). Patients who
ISSUES RELATED TO ORTHOPEDIC HIGH-RISK
have already received a joint replacement are exposed
MEDICAL DEVICES
to revision surgery by the increase in years since primary
Medical device regulation is challenged with the mismatch
surgery took place.
of the information validity needed for market approval and evidence from actual use of high-risk medical devices
The clinical long-term performance of HRMD is an
(HRMD) (Reynolds et al., 2014, Kramer et al., 2012,
important input parameter for decision-making because
Tarricone et al., 2014, WHO, 2010). One reason for this is
it determines the future need of revision surgery. Many
that premarket regulation is mainly based on conformity
countries have access to high-quality data on joint
assessments and does not include findings from clinical
replacements, which they use to evaluate medical
long-term outcome studies (Tarricone et al., 2014, Ciani
outcomes (Gliklich et al., 2014, Herberts and Malchau,
et al., 2015). HRMDs are implanted in the human body and
2000, EAR, 2016). Using poorly performing medical
are therefore recommended, subject to the highest level
devices is one of the reasons for high revision rates. For
of premarket and post-market regulation (FDA, 2017).
instance, increased incidence of post-operative problems resulting from the use of metal-on-metal hips led to
Policymakers from other countries such as the UK,
higher hip revision rates (FDA, 2014). However, in Mexico
Germany, Switzerland and the Netherlands are frequently
medical device regulation does not include clinical long-
concerned by effectively ensuring standards of clinical
term performance of HRMD in their quality agenda with
safety, performance and efficacy of HRMD (Lauer et
exception of the federal techno-vigilance department and
al., 2014, Sorenson and Drummond, 2014). Countries
health technology assessments, the findings of which are
use different strategies to ensure or monitor safety and
used to include technologies on the National Formulary.
performance of medical devices such as strengthening
Between 2014 and 2015, researchers from the Swiss
post-market regulation (Duke-University, 2016, FDA,
Tropical and Public Health Institute, UNAM and the INSP
conducted studies in Mexico on the regulation, assessment
2015). For instance, these are used in the UK and they
and management of orthopaedic HRMD (Lingg et al.,
are important in the regulation of HRMD, used to improve
2016a, Lingg et al., 2016b, Lingg et al., 2017a, Lingg et al.,
outcomes. The National Institute for Health and Care
2017b). These studies showed quality concerns related to
Excellence (NICE) defines recommendations including
post-market regulation and procurement of orthopaedic
benchmarks for the quality of hip prostheses for example,
HRMD. In Mexico, several governmental offices as well
as “the new joint should work well in at least 95 percent of
as a number of non-governmental stakeholders are
hip replacements over 10 years, instead of the current 90
involved in the regulation, assessment and management
percent” (NICE, 2014). This is an important contribution
of medical devices. Nevertheless, reviewing articles 83,
to decision-making processes because it suggests that
179 and 180 of the Medical Device Regulation of Mexico
decision makers should thoroughly review all available
shows that there are no specific regulations for HRMD
evidence.
differentiating them from lower risk medical devices. Further, before 2016, HRMDs were included together with other medical devices in a general standard list (Standard List for Medical Care Products).
POLICY IMPLICATIONS In health systems, decision-making takes place at different levels of healthcare delivery to allocate limited resources optimally (Schöffski and Graf v. d. Schulenburg, 2008). Health economic analysis significantly contributes to this and encompasses important perspectives to attribute cost and benefit to specific healthcare provisions. Economic
Joint replacements in Mexico will increase and life expectancy may be an indicator for joint replacement demand
costs for joint replacements are high (Hiligsmann et al., 2013) and are differentiated into direct costs (hospital
In Mexico, no data is available on national implant survival
admissions, medical examinations, drug therapy), indirect
rates. However, policymakers in Mexico could introduce
costs (losses in productivity resulting from absence
such benchmarks and request decision-makers consult
from work) and intangible costs (Schöffski and Graf v. d.
survival rate data from countries with an arthroplasty
Schulenburg, 2008). The direct costs associated with joint
register or consult the findings of risk assessment
replacements are high and driven by the cost of surgery,
programmes as they are used in the Netherlands or the
hospitalization and rehabilitation. Different methods are
UK (Poolman et al., 2015, ODEP, 2015).
available to conduct health economic evaluations based on specific health economic principles that inform policy
IMPACT OF BENCHMARKS
decisions, encompassing the efficiency and effectiveness
The use of survival rate benchmarks may have a positive
of medical treatments (Breyer et al., 2004).
impact on orthopedic revision rates and their financial burden. Introducing these survival rate benchmarks may
At the policy level, health economic analysis is globally
improve the eligibility of medical devices, strengthen
increasingly taken into consideration. For instance, health
quality assurance and enhance organisational governance.
technology assessments are a form of policy research
The Mexican health system lacks high-quality data for
that seeks to inform policy makers about the clinical and
orthopaedic surgeries. However, average survival rates
economic value of health technologies such as medical
from different arthroplasty registries could be used as
devices and includes findings derived from results of health
reference instead. Economic analysis in orthopaedics
economic analysis (Banta, 2009, WHO, 2011). Further, in
provides a powerful tool for the evaluation of healthcare
orthopaedics health economic analysis increasingly receives
technologies and treatment strategies (Bozic et al., 2003).
more attention due to its financial impact (Haentjens and Annemans, 2003). It is an essential element in decision-
More research analysing the potential financial impact of
making and HTAs at purchasing decision-level are
using survival rate benchmarks may provide important
increasingly discussed (McGregor and Brophy, 2005,
findings. In the case of Mexico, even though no high-
Kidholm et al., 2009, Ehlers et al., 2006, Sampietro-Colom
quality data is available, sufficient information of implants
et al., 2012) and supported by policy-makers.
purchased in the past is publically available. It is stored at the electronic contracting system Compranet of Mexico.
SURVIVAL RATE BENCHMARKS
To apply economic analysis, the data from Compranet
A promising strategy to ensure quality is to implement
and average survival rates from different arthroplasty
guidance for survival rate benchmarks (Kandala et al.,
registries could be used.
273
ANALYSIS
SUCCESS OF 90-90-90 AIDS PROGRAM REQUIRES 20/20 VISION Although human Immunodeficiency Virus (HIV) and
Fast-Track Cities commit to eliminating the AIDS
Autoimmune Deficiency Syndrome (AIDS) may not seem
threat in their cities by 2030, rapidly reducing
commonplace, these two diseases remain a reality for
the number of HIV/AIDS related deaths.
millions around the world The WHO recommends six types of prevention. The UN estimates that about 37 million people worldwide
The first is the consistent use of condoms, which have an
are living with HIV/AIDS, 1.8 million of which are children. Its
85 percent or greater chance of preventing infection. It is
analysts peg the number of people that have been affected
also wise to test for HIV, STIs and TB, as it is the leading
by HIV worldwide since the beginning of the endemia in June
cause of death for HIV sufferers. In addition, medical male
1981 to 2015 at 69.5 – 87.6 million and put the number of
circumcision reduces the risk of heterosexually acquired HIV
people that have died from AIDS-related illnesses at 29.6-
infection in men by 60 percent. The WHO also recommends
40.8 million.
ART in uninfected people with a HIV-infected partner to reduce transmission, within 72 hours of exposure to HIV
274
In 2015, there were around 2 million people living with
and ART for pregnant women to reduce mother to child
HIV in Latin America, according to the UN. An estimated
transmission (MTCT). MTCT occurs in 15-45 percent of
100,000 new infections occurred during the year in the
untreated pregnant women. In the case of ART through
region, a number that has not varied between 2010 and
infectious stages, MTCT is almost eliminated, according to
2015. It is probable that 2,100 of these newly infected are
the WHO. UNAIDS estimated that 77 percent of pregnant
children under the age of 14. Just over half are thought
women living with HIV received ART in 2015.
to be receiving treatment, as 1.1 million of these are accessing antiretroviral therapy (ART). ART is not a cure
IN LATIN AMERICA IN 2016
but it can help manage the condition as it controls viral
2 million
replication within a person’s body, allowing a person’s immune system to strengthen itself and fight off any infections that could otherwise be deadly.
people were living with HIV
HIV was responsible for 4,811 deaths in 2014 in Mexico, making it the 16th prevailing cause of death, according to INEGI. It
55%
was the 14th cause of death in men, responsible for 3,893 deaths, and 17th in women, linked to 918 deaths. UNAIDS estimates 4,000 deaths in Mexico related to AIDS for 2015. Worldwide, the main cause of death for people living with HIV is tuberculosis, which is also responsible for one in three
100,000
taking ARVs
new infections
deaths of AIDS sufferers in 2015, according to the UN. On World AIDS Day 2014, 20 years after the original Paris Declaration in 1994, UNAIDS brought together city mayors from around the world to sign the 2014 Paris Declaration. The signature of this declaration was a
74%
know their status
commitment to putting their cities on a fast-track and
0.5%
adult HIV prevelance
achieving 90-90-90 by 2020, meaning 90 percent of people living with HIV will know they have the virus, 90 percent of whom will be on ART and 90 percent of those will achieve viral suppression, which will reduce the risk of
41%
transmission. Reaching this target is estimated to prevent almost 28 million new HIV infections and 21 million deaths by 2030. Mexico City is among the cities that signed up the Fast-Track Cities initiative. In addition to the 90-90-90 objectives, the
50,000
AIDS related deaths Source: UNAIDS
virtually suppressed the virus
INSIGHT
START EARLY TO PREVENT OSTEOPOROSIS JUAN TAMAYO CEO of COMOP
After 23 years supporting professionals in the Mexican
and by providing nutritional supplements. When they reach
healthcare system, COMOP continues to invest in research
the age of 20, we will see if this had an impact. If it does,
on osteoporosis that could lead to a change of model in
this would be extraordinary because these are measures
the prevention and treatment of chronic diseases. “Our goal
you can apply to all social sectors,” says Tamayo.
is to evolve the high-level training of health professionals. We do not just aim for a scientific proposal but also for an
The third line of research focuses on the role of exercise in
impact on daily life,” says Juan Tamayo, CEO of the Mexican
children born with weak bones and muscles to prevent the
Committee for the Prevention of Osteoporosis (COMOP).
development of osteoporosis. Promoting a healthy lifestyle is a national priority since Mexico, according to the WHO, ranks
According to the Mexican Association for Bone and Mineral
first in childhood obesity, with a penetration of 35 percent in
Metabolism (AMMOM), 18 percent of Mexican women and 8
children and in teenagers. As Tamayo explains the bottom
percent of men above the age of 50 suffer from osteoporosis.
line of the three lines of research is to prove that despite the
Data collected by the International Osteoporosis Foundation
genetic predisposition with which some children are born
shows the probabilities of suffering a hip fracture after the
with, an early intervention of adequate nutrition and exercise
age of 50 is one in every 12 women and one in every 20 men.
leads to strong, tall and healthy children.
Considering this panorama, COMOP has been working on the development of three lines of research.
Experts believe that osteoporosis originates in the first 1,000 days of life, Tamayo says. “Today, we can identify
The first is to research the results of an ongoing study of
children who will have weak bones before age of two. ”The
mothers and their children started 20 years ago by the
research will help COMOP develop a new model of care
National Public Health Institute and the Perinatology
among health professionals that considers more factors
Institute. These children, Tamayo explains, were born after
during a child’s growth to create a Big Data-based platform
less than 38 weeks of gestation, weighed less than 3kg and
that doctors can use. The objective of creating a program
with a height under 50cm. As such they were more likely
that collects all this data is to create a primary preventive
to suffer from bad bone health and chronic diseases like
measure for osteoporosis can be applied in the first 40 years
diabetes and obesity. In Mexico, the purpose of looking
of life, says Tamayo. A second prevention wave, he adds, can
at the results of this study is to gather information on
be carried out between 20 years and the first fracture and
the behavior of the skeletal health of these children as
consists of applying a combined diagnostic technique of
they grew and to determine how lifestyle can influence
skeletal sonometry and densitometry offered by COMOP’s
development. COMOP has allied with other institutions
private brand for the diagnosis of osteoporosis, Oseograph.
to analyze the data. “We are in contact with Mount Sinai
The third approach is to provide aid in case of a fracture.
Hospital in New York, the University of Michigan and the University of Toronto. Together, we will collaborate by taking
COMOP also focuses on promoting research and preserving
our program to a more operative level to collect information
evidence to develop online training courses to inform and
from 100 multidisciplinary centers,” adds Tamayo.
update physicians in new diagnoses and preventive trends. “We need to have credibility, so that those who take courses
A second line of research has followed 550 children for 15
with us recognize we are training them in something that
years who were born with low stature and weak bones due
will help them in practice and that will give them the tools
to genetic conditions that make them prone to develop
and knowledge necessary to tackle the problem.”
cardiovascular diseases and diabetes. “The purpose of this research is to prevent those children from growing at a low
Besides COMOP, Tamayo leads Accessalud, an institution
weight and with weak bones by encouraging healthy habits
dedicated to treating chronic diseases.
275
EXPERT OPINION
MULTIDISCIPLINARY PROGRAM NEEDED TO REDUCE CC NUMBERS Carlos Ortiz Chief of Surgical Pathology at ABC Medical Center
276
Janet Pineda Resident in Pathological Anatomy at ABC Medical Center
One in 10 cancer-related deaths in Mexican women is
The features of LSIL include nuclear enlargement with
caused by cervical cancer (CC), which kills 11 women every
hyperchromasia or pyknosis and irregular nuclear contours
day, according to the Mexican Ministry of Health. While in
along with a perinuclear cavity and peripheral thickening
2006 breast cancer replaced CC as the first cause of death
of the cytoplasm. Features that favor HSIL include
by cancer in Mexican women, according to INEGI, CC killed
increased numbers of abnormal cells, higher nucleus to
4,009 women in 2015. The highest mortality rates belong
cytoplasmic ratios, greater irregularities in the outline of
to the states of Morelos, Oaxaca and Chiapas, validating
the nuclear envelope and nuclear chromatin distribution.
the fact that CC is an inequality indicator since its mortality
The appearance of the cytoplasm can help to distinguish
tends to concentrate in the least economically favored
LSIL from HSIL in borderline cases. LSIL involve mature,
regions throughout our country.
intermediate or superficial cytoplasm with polygonal borders, while cells of HSIL have an immature cytoplasm,
The primary cause of CC is chronic infection with a high-
either delicate or dense with rounded cell borders.
risk type (16 and 18) of human papillomavirus (HPV), the most common infection acquired during sexual relations. In
Based on the natural history of HPV infections, the majority
most women, these infections resolve spontaneously, but a
of LSIL regresses within an average of two years. However,
minority persist and may progress to CC 10 to 20 years later.
when LSIL or HSIL is detected by a Pap smear, a colposcopy
This gap offers an opportunity to detect and treat precursor
is recommended within six weeks; if HSIL is detected, a
lesions. The Pap smear is a well-established method for
biopsy should be performed and the patient must be
examining the cells collected from the cervix to determine
treated with cryotherapy or loop electrosurgical excision
whether they show signs of these lesions. It is a free and
procedure (LEEP). If HSIL is not detected, the cytology
essential screening test that must be done annually. It can
must be repeated at six to 12 months. The treatment of CC
be done every two or three years if the patient has three
includes surgery, chemotherapy and radiotherapy.
consecutive normal tests. A national program of CC screening has been in operation The evolution of CC has been widely studied and its precursor
since the 1970s, and ENSANUT reports 45.5 percent of
lesions identified. In 1988 the Bethesda system (TBS) for
Mexican women of reproductive age had a Pap smear
reporting cervical cytologic diagnosis was first introduced
in 2012, with increasing numbers and a plan to reach at
and revised in 1991, 2001 and 2014. Its aim is to develop a
least 70 percent by 2018. Although screening with cervical
uniform terminology for cervical cytology interpretation
cytology has diminished CC in our country we still have
and upright communication between pathologists and
the highest mortality rates among OECD members. The
clinicians. TBS reports have three basic components:
Ministry of Health has almost 2,000 employees working in
a descriptive interpretation, a statement of specimen
the national screening program, including colposcopists,
adequacy and, optionally, a general categorization of the
pathologists and cytotechnologists, but they are not
interpretation. TBS defines the squamous intraepithelial
equally distributed or skilled, which hinders some womenâ&#x20AC;&#x2122;s
lesions, as well as all the HPV associated noninvasive
access to efficient screening. Our health system must
squamous cell abnormalities, and divides them between
focus on risk factors and low participation in screening
low-grade squamous intraepithelial lesions (LSIL) and high-
programs that dismiss many women from timely detection
grade squamous intraepithelial lesions (HSIL). Specimens
of precursor lesions. Only a multidisciplinary program
with subtle changes can be classified as atypical squamous
established by determined policymakers, managers and
cells of undetermined significance (ASC-US). This division
professionals in the health sector will meet the extent and
has a better inter-observer reproducibility than other
quality indicators needed for a real solution for the current
reporting systems.
numbers of CC in Mexico.
ANALYSIS
MATERNAL AND INFANT HEALTH Indicators often used to measure the development of a country
Digital program, to bring information rapidly
are maternal and infant mortality. Although Mexico has made
and effectively to underprivileged women
great progress in these areas, work remains to be done. Also
through digital means.
linked to these indicators is the issue of teenage pregnancy TEENAGE PREGNANCY When presented with the problem of Mexico’s greatest
According to the WHO, pregnancy and childbirth are the
health concerns, many think not only of chronic disease such
second-greatest cause of death in 15-19-year olds globally.
as diabetes and cancer but also of teenage pregnancies.
Babies born to teenage mothers face a 50 percent higher risk
“Another great issue is pregnancy in girls and teenagers.
of dying in the first few weeks or being stillborn than those
Children of 10-14 years old are having babies. There were
born to mothers aged 20-29. Teenage pregnancy also has
400,000 births in 2015 and almost one in every five births
a lasting impact on education levels as over 90 percent of
is to a teenage mother. The government has implemented a
teenage mothers do not attend classes. The WHO reports that
national strategy aimed at preventing teenage pregnancies,
although adolescent births count for 11 percent of all births,
which are often unwanted and unplanned.,” says José Narro,
they account for 23 percent of disease due to pregnancy and
Mexico’s Minister of Health. Additionally, early childhood
childbirth. In January 2015, President Peña Nieto launched the
disease has been one of the top 10 causes of death in
National Strategy for the Prevention of Teenage Pregnancy
Mexico every decade since the 1950s. Globally, maternal
(ENAPEA), whose objectives are to reduce the rate of
mortality has plagued women for millennia and although
pregnancy in 15-19-year olds by 50 percent and eradicate
most deaths are now preventable, they still occur, mostly
pregnancy in under-14s by 2030.
in developing countries.
INFANT MORTALITY AND HEALTH MATERNAL MORTALITY
Approximately 2.7 million newborn babies died in 2015
According to the WHO, 99 percent of all maternal deaths occur
globally and an additional 2.6 million are stillborn, according
in developing countries. Although Mexico has many policies in
to the WHO. According to OECD figures, infant mortality
place to prevent maternal and infant deaths, many pregnant
rates in Mexico in 2014 were 12.5 deaths per 1,000 live births,
women, especially in rural areas, are unaware of official
down from 17.6 in 2004. Infant mortality is defined as the
recommendations and policies. Many maternal and infant
death of a child under the age of one. A WHO report pegs
deaths can be prevented with the correct care. Unfortunately,
the annual number of neonatal deaths in Mexico at 14,594
not all women receive this care due to factors such as
for the year 2013, the main causes of which are prematurity
poverty, distance, lack of information, inadequate services
and congenital abnormalities. Chronic diseases are
and cultural practices. In Mexico, UNICEF has implemented
responsible for over half of infant or post-neonatal deaths
RapidPro, a tool available through the government’s Prospera
(aged one month to 59 months).
ESTIMATED DISTRIBUTION OF CAUSES OF NEONATAL DEATHS
ESTIMATED DISTRIBUTION OF CAUSES OF NEONATALS AND UNDER-FIVE DEATHS, 2013 ESTIMATED DISTRIBUTION OF(AGED CAUSES OFMONTHS) DEATH OF POST NEONATAL DEATHS 1-59 CHILDREN AGED 1-59 MONTHS
& 37% Prematurity 14% asphyxia Sepsis and other 1% Non communicable diseases 13% Birth birth trauma infectious conditions 24% Congenital 5% Pneumonia anomalies conditions 6% Other 24% Congenital anomalies and other 5% Pneumonia 14% Sepsis 6% Other conditions infectious conditions 37% Prematurity 1% Noncommunicable 13% Birth asphyxia & birth trauma
Source: WHO (2013, latest data available)
diseases
37% Noncommunicable
2% Meningitis/encephalitis diseases
17% Pneumonia 5% Diarrheal diseases 13% Injuries 12% Other conditions
12% Other conditions 13% Injuries 5% Diarrheal diseases 2% Meningitis/ 17% Pneumonia encephalitis
52% Non communicable diseases
277
VIEW FROM THE TOP
AQUACULTURE THE NEXT FRONTIER FELIPE ESPINOSA CEO of Laboratorios Collins
Q: What veterinary products top your portfolio here and
consumption of antibiotics and animal meat is the greatest
where are the coming opportunities?
source of antibiotics for humans. We would like to participate
A: The most important products are premixes and injectables.
in this development with COFEPRIS because we think it is an
Premixed food contains antibiotics and is our number one
excellent initiative.
market. Injectables for mastitis and other livestock infections
278
are our second most important group of products in the
Q: What impact will this regulation have on your operations
veterinary division. We are venturing into the production of
and on your products’ formulas?
products for small species such as cats and dogs.
A: At first, it would limit the sale of antibiotics but I think that in the long term this is a good area to begin regulating. It would
In the near future, we would like to enter the aquaculture
be beneficial for us to participate, to transmit our experiences
market. There are many shrimp and trout farms in Mexico,
and in turn we can listen to COFEPRIS’ concerns. There is
so we are already developing a premix for shrimp that can
nothing better for a country than for the population and the
be tipped into the water at shrimp farms, for example,
authorities to work together to avoid the implementation
and will not disintegrate. This protects the shrimp from
of a unilateral vision. I do not think we are going to change
infections. The aquaculture market in Mexico is growing
the formulas of our products but the way in which they are
greatly, especially in northern states such as Sinaloa and
prescribed. The formulas are correct but we would have to be
Chihuahua, where trout and shrimp farms have become
much more careful of the way in which we administer these
endemic over the past three years. We see a business
products to animals.
opportunity there for our veterinary sector. Q: What are your short-term plans for your veterinary operations? A: We would like to create an alliance with another player. We are already exporting a little to Central and South America and Africa. There are good opportunities in Central and
ProMéxico 2014 says Mexico is the 4th global exporter of fresh Bluefin tuna, 2nd in frozen Bluefin tuna
South America because there are few manufacturing plants.
Q: How does COFEPRIS interact with animal health
We continue to develop products for smaller species and
regulators?
aquaculture and we are looking for a strategic alliance in
A: SAGARPA is the top regulatory agency but COFEPRIS
another country to accelerate our development. In addition,
will soon be involved with veterinary health because humans
we could export to other parts of the world where there
consume animals. COFEPRIS tightly controls the human
is little competition and it would be faster to do that in
Antibiotic-infused premixes for the prevention of infection in chickens and cows are our main product for this market. In Africa, some governments have processes to facilitate the entry of simple products, which helped us accelerate exportation to those countries.
cooperation with another party. We would like to enter Europe a little faster. In Mexico, we would like to complement Laboratorios Collins is a Mexican pharmaceutical group
our portfolio with products from abroad by importing
with 47 years in the market focused on the manufacturing of
vaccines for cattle. The market is practically virgin and with
high quality medicine at affordable prices. Its main areas of
our industry knowledge and the prestige of our brand, it
operation are generics and veterinary care
presents an unmissable opportunity.
VIEW FROM THE TOP
AN EYE ON EXPANSION IN VISION CARE IGNACIO CASTAÑÓN Director General of Alcon Labs
Q: After 70 years in the eye-care sector, what are Alcon’s
than 3mm, destroys the crystalline and sucks it up. Then,
main opportunities?
the doctor inserts a lens in the incision that sets inside the
A: We are leaders in the surgical and contact lenses
eye. We are launching a 3D visualization system for retina
market in Mexico and we believe our biggest opportunity
surgery, for which the doctor will have 3D glasses. Using
is in market expansion. There are approximately 2.3 million
a 55-inch screen, he will be able to see the eye in three
Mexicans who need cataract surgery but only around
dimensions. Another product we are launching is called
200,000 surgeries are performed annually in the country.
intraoperative aberrometer, a tool that helps calculate the
Our mission is to expand this market, especially because
lens a patient needs.
around 17 percent of those who need this surgery are already blind and their condition is totally reversible with a 20-minute procedure. In Mexico, less than 1 percent of the population uses contact lenses compared to around 14 percent of people requiring visual correction in the US, so there is great opportunity here.
The number of surgeries performed is the lowest per 100,000 citizens among OECD countries
Q: How does Mexico compare to other countries in terms of surgeries performed?
Q: What are the most recent developments for contact
A: The number of surgeries performed is the lowest per
lenses?
100,000 citizens among OECD countries. Many people
A: We keep innovating to increase the comfort of contact
do not realize this is a curable disease, instead believing it
lenses. We have two types of daily lenses: one that is
is a normal consequence of age. The number of patients
lubricated when blinking, making the lens very comfortable,
increases in Mexico because diabetes sufferers are more
and a water gradient lens, which has an extremely high
prone to having cataract and retina problems. Plus,
water composition.
considering the generational changes in the country and the growth of the elderly population, there will be more
Q: What is the business model you use to offer great quality
people needing this surgery and higher quality lenses.
and technology to the public and the private sector?
Previously, it was possible to give 68-year-old patients two-
A: Our portfolio is divided between what we offer to the
year lenses in countries a with life expectancy of 70, but if
public and private sector. It is not realistic to offer the
life expectancy reaches 90 years, we would have to provide
same to both because the prices for a cataract surgery
lenses that will last much longer.
vary according to the technology used. They can range from MX$25,000 (US$1,389) to MX$100,000 (US$5,555)
Q: What innovations are you following to facilitate the
depending on the patient’s budget and vision. For the public
treatment of visual diseases?
sector, we try to offer high-capacity products that can cover
A: Innovation in intraocular surgery is advanced and we
a lot of volume. Plus, we offer the public sector better prices
have made progress in the lenses portfolio. We launched
when purchasing in bulk. Around 70 percent of sales go to
a trifocal lens that enables patients to see from a long,
the private sector and 30 percent to public institutions.
medium and short distance. Before, we had monofocal and bifocal lenses but now people are asking for more, especially as trifocal lenses assist the eye when in front
Alcon Labs is the ophthalmology division of Novartis. It was
of a screen. Soon this trifocal lens will have toricity for
founded 70 years ago in Texas. The company is the global
people with astigmatism. We are also changing surgical
leader in contact lenses and eye surgery and manufactures
technology. Normally, the machine makes an incision of less
surgical instruments and pharmaceuticals for vision care
279
ANALYSIS
BEWARE OF MOSQUITOES Vector-borne diseases have made headlines across the world
and effective healthcare have lowered fatality
over the past year, particularly in developing countries. Five
rates from around 20 percent of infected to
are a potential threat to Mexico: chikungunya, dengue fever,
under 1 percent.
mayaro fever, yellow fever and zika In September 2016, the first dengue vaccine, Mosquito-borne diseases have been the subject of panic
created by Sanofi Pasteur, was made available in Mexico. It
in recent years. Here are the symptoms and effects of
was the first country in the world to receive the preventive
the five most well-known vector-borne viruses in Latin
treatment, after receiving COFEPRIS approval in late 2015.
America, their effects and prevention recommendations
It is a tetravalent vaccine, efficient against all four dengue
from global health organizations, notably the WHO and
virus serotypes. The vaccine underwent 25 clinical studies in
the PAHO, followed by a map of areas at risk due to aedes
15 countries involving 40,000 people. Before issuing approval,
and haemagogus mosquitoes in Mexico.
COFEPRIS researched the vaccine for two years in conjunction with international experts. It is available to those 9 to 45 year
280
CHIKUNGUNYA
olds. In the 9-16 age group, it has shown to have prevented 90
Chikungunya is a viral disease transmitted by infected
percent of cases of severe dengue, also known as hemorrhagic
mosquitos, most commonly the aedes aegypti and the
fever, and prevented 80 percent of hospitalizations due to the
aedes albopictus. It can be fatal in rare cases. The most
disease. The vaccine is given in three doses on a 0/6/12-month
common symptoms are a high fever, joint pain and
schedule.
swelling, a rash, headache, nausea and fatigue, although it can sometimes be misdiagnosed
MAYARO FEVER
as dengue fever because of the
Mayaro fever is a virus usually
similarity of the symptoms of each. Symptoms usually appear four to eight days after being bitten and usually last two to three days. The virus can remain in a humanâ&#x20AC;&#x2122;s system for up to a week
500,000 number of people per year affected with severe dengue and who require hospitalization, many of whom are children
transmitted by the haemagogus mosquito but the aedes aegypti in South America has been found to mutate and now also carries the disease. It produces symptoms such as a fever, headache, muscle
and it is possible for uninfected
and articulation pain, nausea, pain
mosquitos to catch the disease
behind the eyes, stomach pain
by biting the infected and thus continuing the spread of
and a rash. Symptoms take one to three days to manifest,
the disease. There is no vaccine but recovery provides
during which time the infected may be bitten by more
immunity. Autonomous transmission was detected for
mosquitos, thus spreading the disease further. The last
the first time in the Americas in 2013. In 2015 PAHO
outbreak was reported in Venezuela in 2010, with 77 cases
confirmed 37,480 cases and suspected 693,489 cases
and 0 deaths, according to the PAHO.
in the Americas. Originally a South American disease, it is mostly present
DENGUE FEVER
in forested areas such as those in Brazil, Venezuela, Peru,
Dengue fever is a tropical disease spread by the aedes
Bolivia and Colombia. In addition, the virus was detected
aegypti and the aedes albopictus, mostly found in Latin
in Haiti in September 2016. With globalization and the
America and Asia. According to the WHO, the global
aedes aegypti mosquito present in a greater geographical
incidence of dengue has grown dramatically over past
area, it is feared the virus will continue to spread and reach
decades and half the worldâ&#x20AC;&#x2122;s population is now at risk of
Mexico, beginning in Yucatan, in the South. There is no
the mosquito-borne disease in tropical and sub-tropical
vaccine against mayaro fever.
climates. It estimates 500,000 people per year are affected with severe dengue and require hospitalization,
YELLOW FEVER
many of whom are children. The WHO also indicates that
Yellow fever, or hemorrhagic fever with hepatitis, is an
although numbers are under-reported, it is estimated
acute viral disease transmitted by mosquitos belonging
284 millon to 528 million people are affected, whether
to the aedes and haemagogus species. It has the name
they present symptoms or not. Symptoms include a high
yellow because some patients develop jaundice as a result.
fever, severe headache, pain behind the eyes, muscle and
Although many do not experience adverse effects, more
joint pain, nausea, vomiting and a rash. Early detection
common symptoms include fever, muscle pain, backache,
headache, loss of appetite, nausea and vomiting. For
rash, conjunctivitis, muscle and joint pain, malaise and
most sufferers, symptoms last three to four days but for
headache and lasts two to seven days. Based on a review
a small proportion of people, the disease worsens and
of evidence, the WHO have concluded that zika during
around half of these people die within seven to 10 days,
pregnancy is a cause of microcephaly and Guillan-BarrĂŠ
according to the WHO.
syndrome, as vertical transmission occurs from mother to child. Sexual transmission is also confirmed and strands
The main areas of risk for yellow fever transmission are
of the virus have been found to remain in the system
South America and West Africa as the virus is present in
for months, thus causing a prolonged need for caution.
monkeys in those regions. Although the disease is not a
Active transmission of zika has now been reported in
current health risk for Mexico, as with mayaro fever it is
most of the Americas, from the Southern US to Argentina.
worth being aware that the vector is present and thriving
Due to the number of microcephaly cases reported and
in the country. A pre-emptive vaccine is available and is
the number of other neurological diseases caused by
recommended by health institutions around the world
zika, the WHO declared a public health emergency on
for those travelling to areas of known yellow fever. A
Feb. 1, 2016.
single dose of the vaccine, produced by several global manufacturers, provides immunity within 30 days for at
There is no vaccine for zika. National and international
least 10 years and potentially for life. To prevent the risk
health agencies recommend protection against mosquito
of an endemic, the WHO recommends vaccination of at
bites and practicing safe sex to avoid contracting the
least 80 percent of a population, mosquito control and
disease. Delaying pregnancy has been recommended to
endemic preparedness and control.
hopeful parents and genetically modified mosquitos have been released into the wild to mate and pass on a fatal
ZIKA
gene to offspring, thus killing potential future disease
The zika virus is transmitted mostly by mosquitoes of
carriers. Both have come under criticism. Meanwhile, the
the aedes family. Symptoms include mild skin fever, a
disease continues to spread.
AEDES AND HAEMAGOGUS MOSQUITOES IN MEXICO
Few recorded sightings of the haemagogus Increased number of haemagogus sightings Areas with an altitude of less than 2,000m, presence of the aedes mosquito Areas with an altitude of more than 2,000m, little presence of the aedes mosquito Source: CDC and EOL
281
Latinoamericana Tower
INSURANCE
12
Much of the Mexican population is employed informally and does not have access to public health services because they do not contribute to it. Instead, they are covered through public insurance provider Seguro Popular.
Private health insurance in Mexico is limited in what it covers and remains unaffordable for many. This is an opportunity that smaller private companies have recognized. They are implementing innovative models to serve those in the gap: rich enough to have access to public health services but too poor to afford a private health policy. Others have observed disease trends and spotted a chance to provide insurance for cancer, for example, which would pay out should the insured ever be diagnosed with the specified cancer, usually breast or prostate.
This chapter will highlight the efforts insurance companies and pension funds are making to provide better healthcare quality and retirement opportunities. It will also look into the prospects for financing from the vast pool of resources Mexican retirement funds hold and look into how the insurance business is facing the populationâ&#x20AC;&#x2122;s main health concerns, their growth potential and plans of action.
283
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www.mexicobusinesspublishing.com
CHAPTER 12: INSURANCE 286
ANALYSIS: Innovation Needed to Bridge Insurance Gap
288
VIEW FROM THE TOP: Manuel Escobedo, AMIS
289
VIEW FROM THE TOP: Bruno Guarneros, Seguros Atlas
290
VIEW FROM THE TOP: Ricardo Casares, PartnerRe
292
VIEW FROM THE TOP: René Mieres, La Latino Seguros
293
VIEW FROM THE TOP: Paulino Decanini, SiSNova
294
VIEW FROM THE TOP: José María Ostos, McKinsey & Company
295
VIEW FROM THE TOP: Luk Vanderstede, Bupa Global
296
INFOGRAPHIC: The Main Causes of Death in Mexico
298
VIEW FROM THE TOP: Raúl Kuri, Seguros GNP
300
INFOGRAPHIC: Challenges Ahead for Health Insurance
302
VIEW FROM THE TOP: Javier Potes, Consorcio Mexicano de Hospitales
303
VIEW FROM THE TOP: Mario Carrillo, SCOR Global Life SE
304
VIEW FROM THE TOP: Cristina López, Murguía Consultores
305
VIEW FROM THE TOP: Omar Viveros, Willis Towers Watson
285
Eduardo Hori, Willis Towers Watson
ANALYSIS
INNOVATION NEEDED TO BRIDGE INSURANCE GAP Increasing insurance rates in a country that does not have a
country with 89.53 percent of the population
history of insurance culture is the challenge companies face.
affiliated to a certain service. Similarly, Nuevo
The gap of those uninsured or with access to public services
Leon and Campeche have rates of 87.88
but aspiring to private, presents an opportunity
and 87.84 percent, respectively, while the lowest rates of overall coverage are seen in
286
Providing universal access and coverage remains one of
Michoacan, with 74.03 percent, Mexico City with 78.49
the greatest challenges of healthcare in Mexico. The public
percent and the State of Mexico, with 78.69 percent.
sector covers most formal employees through IMSS and the
Conversely, Mexico City appears among the top three
Seguro Popular, an institution dependent on the Ministry
states for penetration of private insurance along with
of Health, provides insurance for those working informally.
Nuevo Leon and Baja California. The country’s capital has
Those who can afford it buy private insurance, although
many informal workers with no access to healthcare but
penetration rates are low in Mexico: 3.27 percent according
also hosts a large number of corporate headquarters that
to the Encuesta Intercensal 2015.
buy policies for their employees.
“The market in Mexico is small because to have private
In states with oil rigs and workers, insurance coverage rates
health insurance people must pay twice: once to social
from institutions such as PEMEX, SEDENA and SEMAR are
security and then to their private insurance. Other
highest: Tabasco (5.22 percent), Campeche (3.96 percent)
countries such as Chile and Colombia have reformed
and Veracruz (3.68 percent).
their systems and integrated the private and public sector. However, despite its small size, it remains an
Employers are increasingly recognizing that sick workers
attractive market as there are 8 million people privately
are not productive and that presenteeism is just as costly
insured in Mexico,” says Ricardo Casares, Vice President
as absenteeism, creating a financial burden. The Chamber
of PartnerRe Health Latin America.
of Deputies reports that from January to September 2016, absenteeism cost the Mexican economy MX$1.65 billion
Some states see higher rates of overall coverage than
(US$91 million). It estimates that presenteeism, though
others: San Luis Potosi, for example, an industrial hub with
difficult to measure, causes losses 4.5 times greater. Due
many manufacturing workers paying public contributions,
to the prevalence of chronic diseases in Mexico, it is thought
has the highest rate of overall healthcare coverage in the
that by 2030 economic losses due to poor worker health
THE MEXICAN POPULATION (millions) 0-4 5-9 10-14 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 Over 75 6
5
Women
4
3
Source: Encuesta Intercensal 2015
Men
2
1
0
0
1
2
3
4
5
6
will reach 6.3 percent of GDP. For this reason, companies are
completely uncovered or unhappy with public-sector
keen to take out insurance policies for their employees, also
insurance. “Our idea was to become the largest hospital
providing opportunity to incorporate innovative models.
network in Mexico even though our bed average is only around 34 per hospital. Instead of being the largest hospital
“The most important trend in insurance is prevention.
network we want to become the first private healthcare
This concept is gaining momentum and companies are
system in Mexico. We wanted to save patients money
implementing several strategies to participate in this
and avoid out-of-pocket expenditure,” says Javier Potes,
emerging area. There is a small percentage of the population
President of the Conscorcio Mexicano de Hospitales.
that is sick and there is another small percentage that is
However, there is still a bridge to gap as over 17 percent
healthy. In this demographic, there are sub-segments:
of the population, or some 20.3 million Mexicans, remains
people who are disposed to developing diabetes, for
without any type of medical coverage, according to the
example, or those who engage in some kind of physical
Encuesta Intercensal 2015.
activity but not consistently. Although there is still a long way to go, we have noticed that a significant percentage
“In Mexico there is a weak culture of insurance, investing
of the population is aware of prevention. Companies are
and risk management, which means people need to
offering insurance to attract and retain employees and by
be educated. In addition, insurance companies need to
implementing prevention and wellness, they are reducing
ensure they have a product offering for the middle and
their costs. By reducing stress levels, fewer people will need
low socioeconomic segments. Some insurance companies
to use public health services due to illness. It is a win-win
are strategizing to enter this market, perhaps by creating
situation," says Omar Viveros, Director of Health & Benefits
products that offer new types of coverage or by working
at Willis Towers Watson, a global insurance broker.
with special providers. They need to segment this market in a way that is attractive but affordable,” says José María
Although reinsurance is a market dependent on the
Ostos, Associate Partner at McKinsey & Company.
insurance market, it also relies on the particular risk culture of that market. “Brazil has almost double Mexico’s
However, despite the challenges the sector presents,
population, so by simple numbers, this doubles the need
many remain optimistic about its future. including Manuel
for direct insurance. However, companies in Brazil prefer
Escobedo, the President of the Mexican Association of
to retain much of their risk and what reinsurance does
Insurance Institutions. Mexico faces major challenges
exist pertains to a system that was previously a monopoly.
in its health system, especially chronic-degenerative
Mexico has roughly half the population of Brazil but we
diseases. However, it is possible to turn these challenges
provide double the reinsurance volume, which makes
into opportunities thanks to the work of society and the
Mexico the most important market for reinsurance in Latin
public and private sectors. We firmly believe that Mexico
America,” says Mario Carrillo, Regional Director of Mexico,
has important elements: the country is the world’s 15th-
Central America and the Caribbean for global reinsurer,
largest economy and ranks 11th in terms of population size.
SCOR Global Life SE.
It is about evaluating and realizing an appropriate strategic management,” he says. “We want to show the benefits that
In this context, small insurance companies are making
our sector can offer to expand the health coverage and the
their way to market, looking to provide coverage for those
quality of the services that are offered.”
HEALTH SERVICES IN MEXICO AFFILIATION WITH HEALTH SERVICES IN MEXICO RANKING OF MAJOR MEDICAL EXPENSES INSURANCE POLICIES 1Q17
119,530,753 TOTAL POPULATION
82.18% Affiliated with a health service affiliated 17.25% Not UNKNOWN 0.57% Unknown NOT AFFILIATED
Source: Encuesta Intercensal 2015
AFFILIATED TO A HEALTH SERVICE
1
Seguros Banorte
7
Metlife
2
Seguros Atlas
8
Bupa
3
New York Life Seguros Monterrey
9
AXA
4
Allianz
10
GNP Seguros
5
Seguros Bx+
11
Mapfre
6
Inbursa Seguros
12
Aseguradora Interacciones
Source: CONDUSEF
287
VIEW FROM THE TOP
SECURITY VERSUS VULNERABILITY MANUEL ESCOBEDO President of AMIS
Q: How can AMIS and the insurance industry better
proposing collaboration scenarios between the public and
support Mexico’s health system?
private sectors is to achieve short-term protection for the
A: The public health system in Mexico has achieved
19.3 million Mexicans who do not have this right.
significant results, despite the fact that in recent decades
288
it has faced increasingly complex diseases that afflict
Q: How does AMIS promote access to healthcare in a
the population. In this context, the insurance sector
country where access to health is a challenge?
considers it essential to implement structural reforms that
A: With our proposal we want to show the benefits that
will allow us to impact the epidemiological panorama
our sector can offer to expand the health coverage and
of the country. At AMIS, we have designed a proposal
the quality of the services that are offered. The actions to
titled: Towards Universal Coverage of Financial Health
effectively meet our objectives are based on three axes:
Protection, in which we analyze the challenges we
population coverage, extent of coverage and services or
consider most urgent.
risks covered.
Q: What role do insurance companies play in the fight
Q: To what extent are insurance policies based on
against chronic diseases?
preventive actions a possibility in Mexico?
A: The insurance sector in Mexico considers chronic diseases
A: There is a gap in digital transformation both in Mexico
to be of vital importance because they impact the life
and internationally; for this reason, the 27th edition of
expectancy of Mexicans. Our proposed document includes
the AMIS Insurance Convention had as its main theme,
financial protection for management of chronic diseases.
The Client of the Future in Insurance. At the same time,
We consider it relevant to contribute with a proposal that
each company works on the development and adoption
helps the government to respond to these needs, since
of new technologies that bring insurance to more people.
in recent years the costs related to treating only diabetes
The new products must be aligned with the needs of
have risen to US$7.7 billion. We believe that prevention is
the client, which will be the focus of the activity of
key because if information campaigns are implemented for
the insurers. With the adoption of technology in the
timely care, adequate treatment can be accessed.
implementation of policies and in customer service, what we seek is to have the innovation that the industry
Q: What are the main challenges of operating in the
needs to offer financial protection through insurance to
current Mexican healthcare system?
the entire population of the country.
A: Mexico faces major challenges in its health system, especially chronic-degenerative diseases. However, it is
Q: What growth do you expect for the private insurance
possible to turn these challenges into opportunities thanks
sector in Mexico and what will be the contributing
to the work of society and the public and private sectors.
factors?
We firmly believe that Mexico has important elements: the
A: We are a business sector that bets on Mexico and believes
country is the world’s 15th-largest economy and ranks 11th in
in its people. In 2016, we invested MX$33.4 billion (US$1.9
terms of population size. It is about evaluating and realizing
billion) and generated employment for more than 76,000
an appropriate strategic management. The objective of
people. Last year, the insurance sector grew 9.9 percent in real terms and we reached MX$435 billion (US$24.2 billion) in premiums. Given current economic conditions, we expect
The Mexican Association of Insurance Institutions (AMIS)
7 percent growth in the insurance market in real terms this
founded in 1937, unites Mexico’s insurance companies, with
year. By 2020, we expect the value to reach 3.1 percent of
the aim of promote the development of the sector across all
GDP. To achieve this goal, we have designed the Expansion
industries, including health
Plan, which includes 16 priority projects for the industry.
VIEW FROM THE TOP
LACK OF INSURANCE CULTURE, ACCESS STUNTS GROWTH BRUNO GUARNEROS Medical Director of Seguros Atlas
Q: How have the major medical expenses sector performed
Q: To what extent should indicators be a part of a hospital’s
in Seguros Atlas’s portfolio of services?
certification?
A: It is one of the company’s most important branches but
A: They absolutely should be. Now, certification is mostly
in general it has not grown as much as expected. Only 7
about services offered to patients, ensuring that the labs and
percent of the Mexican population has insurance or about
facilities are adequate, but there is no follow-up on the results
9 million people. This has increased by only 1 million people
of that service. Individually, hospitals know the number of
in the past five years due to a lack of insurance culture and
infections that occur at the facility and publishing that figure
access opportunities. Unfortunately, insurance is an elite
would be the transparent thing to do. The cost of medicine is
product because it is expensive and certain segments of
also impacting us greatly because the maximum retail price
the population do not have access.
is established for sale in pharmacies but not for hospitals, which can charge insurance companies a higher rate.
Q: What trends have you seen over the past 30 years? A: The strongest trend is innovation. The last AMIS
Q: What is the financial impact of fraud in medical insurance?
convention was focused on technology and on optimizing
A: We see falsified information, identity theft either of the
processes without losing the essence of service, a vital
policyholder or the doctor, fake prescriptions and receipts
component of our business because we work with people.
from ghost companies, middlemen who take a large cut
We need to focus on using technology to offer services to
and dead people that are still alive. Who pays for all of this?
our customers.
Policyholder does through their premiums, because insurance companies pass these costs to the customer. If fraudsters steal
Q: What type of technology are you implementing?
MX$500,000 (US$27,777), they are released within 24 hours.
A: We are changing our internal systems, developing and
Only theft over MX$800,000 (US$44,444) is punished. We
using apps. For this, an inter-hospital system is required,
need to work with the authorities to change this. It is thought
along with a call center and a doctor to perform the
that 10 percent of the cost of insurance premiums is due to
diagnosis. We must also ensure compliance with data
fraud. In 2013, fraud cost the insurance industry MX$15 billion
privacy laws. Our app for patients is informative and
(US$833 million) overall.
keeps them in contact with us. Another technological tool is hospital electronic records. We have developed this and
Q: What trends do you expect to see over the next five years?
are on the verge of releasing a digital card, accessible by
A: Insurance for the elderly will be one of the most significant
phone and which contains a policyholder’s information. It
trends. We are facing a change in the population pyramid.
also displays a QR code that hospitals can scan to obtain
Now, a couple ending their work life at 65 will need to pay
a patient’s medical history. It will be available in 31 medical
MX$100,000 (US$5,555) annually for their insurance. However,
units nationally.
how much is their pension? They will probably be spending three months of their pension on the insurance. Clients want
Q: Atlas has an alliance with the Consorcio Mexicano de
to be able to go to any hospital, to get discounts everywhere,
Hospitales. What are the benefits of such alliances?
to pay only the minimum deductible. If clients go to hospitals
A: We need the cooperation of hospitals to optimize costs.
we have agreements with, it is much cheaper.
Our alliance with Consorcio Mexicano de Hospitales will improve quality through certification. A hospital may have the best transplantologist, the best neurologist and
Seguros Atlas is a Mexican insurance company in operation
conduct many renal transplants but, how many infections
since 1941. It offers specialized services such as fire and
occur there? Certification ensures all doctors and nurses
maritime, life, accident and illness. It aims to offer personalized
are qualified and are specialists in their field.
insurance services to the general population
289
VIEW FROM THE TOP
INSURING THE INSURERS RICARDO CASARES Vice President of PartnerRe Health Latin America
Q: The private insurance market in Mexico is small. How much
in Mexico and the US. There is a service we offer called Pulse,
need is there for reinsurance?
which helps our clients manage the largest catastrophic claims
A: The market in Mexico is small because to have private health
they may face such as cancer, transplants and heart diseases,
insurance people must pay twice: once to social security and
in turn helping patients reach the best quality of care at the
then to their private insurance. Other countries such as Chile
lowest cost possible.
and Colombia have reformed their systems and integrated the Q: What trends are you seeing in the health market?
attractive market as there are eight million people privately
A: One of the most worrying trends is the increase in cancer
insured in Mexico. The insurance companies active in the
cases and the number of claims that insurance companies are
market are serious and respected companies, so this is an
seeing. Health costs have always been a worry for insurers
attractive segment to develop for PartnerRe.
as medical inflation is much higher than general inflation. Companies are trying to better understand what is happening
Q: How does PartnerRe set itself apart from other reinsurers?
in these trends and take preventive action to control this as
A: Reinsurers offer capacity so that insurance companies
much as possible, without impacting premiums.
can settle any deviations in their results. PartnerRe wants to offer not only capacity but also to be a partner in business,
Q: Of PartnerRe’s products in health, which is the most
helping insurers develop their own insurance portfolio. We
popular?
help them improve their profitability, always a relevant factor
A: In Latin America, Working Excess Loss is the most
for health insurance, and amplify their presence in the Mexican
popular product. Our client defines a limit they can absorb,
market, which results in benefits for us too. We achieve this by
in dollars or local currency, per person per year, all costs
being close to our clients and examining their issues carefully.
below that limit are the responsibility of the insurer. If
PartnerRe has a team of over 80 people specialized in health,
costs exceed this amount, we take responsibility for those amounts in excess. This is the type of product most used to
PUBLIC AND PRIVATE HEALTH COVERAGE (percent of AFFILATION TO HEALTH SERVICES IN MEXICO population)
reinsure medical plans. The limit is defined by the size and
100
shares, or CATs for catastrophes such as pandemic, or an
solvency of each client. To a lesser extent, we have quota event that impacts a larger number of people.
80
Q: What growth have you seen in 2016 in Mexico? A: Precisely in 2016, PartnerRe started its health
60
operations in Latin America. Our initial activities focused on a market analysis, country by country, to define our
40
top priorities. We started well, reaching clients in Peru, Argentina, Mexico and Brazil.
20
Public
Private
Source: OECD 2015
US
Turkey
Mexico
Korea
Israel
Finland
Czech Republic
Canada
Belgium
Q: What strategy did PartnerRe implement to establish 0
Australia
290
private and public sector. Despite its small size, it remains an
themselves here in Mexico? A: Our strategy followed several phases: research and getting to grips with the market, the opportunities and the healthcare system in each country, understanding how the private and public sectors interacted with each other to identify the niches we could direct our service. Once done, we defined
priority countries to start our efforts, we established an
life reinsurance is going through a difficult phase of price
operating model, then internally determined our pricing and
lowering. This is a pressured sector, but on Life and Health
underwriting models and how our operations would work in
we expect to continue our growth trend. In addition to
issuing contracts and managing events. After that, we began
starting our health operations in Latin America, we also
visiting companies, announcing that we started our health
started in Middle East in 2016. Opening such niches has
reinsurance operation in the region, complementing the
pushed company growth. We have expanded so much due
other lines of business we already had available. Health was
to PartnerReâ&#x20AC;&#x2122;s desire to be a preferred reinsurer for all our
practically the only line we were missing in the Latin American
clients, to be a reinsurer that listens to and understands
market. We approached clients around the dates they
client needs. Before offering a quote we ensure the solution
were due to renew contracts with their existing reinsurers,
will solve the clientâ&#x20AC;&#x2122;s needs in the best possible way by
requested information, and present to them our offer and
performing a complete analysis. We focus on offering
services. There are more countries in Central America in which
tailored solutions to clients. PartnerRe is recognized for
we would like to start operating. We aim to open Guatemala
offering technical solutions with high levels of support that
and Panama this year, as we have seen important companies
enable us to quantify risks and give solutions.
requiring reinsurance services there. Q: What will your priorities be for 2017 and how will you Q: What were the greatest challenges you faced in entering
achieve them?
Mexico and how did you overcome them?
A: We will focus on the largest and most profitable
A: The greatest challenge is always being better than the
markets in Latin America, getting close to target clients
competition. Reinsurance prices are low and there is strong
and demonstrating our services. In March 2017, we held
price competition, therefore we do not only want to compete
an event in the US, taking several clients from Mexico and
on price but also with a differentiated service based on our
Guatemala and showing them a world-class operation
unique expertise, additional services and our expert team,
from the largest private health insurer worldwide. We
through our Pulse program. We will continue looking at the
are also working very closely with reinsurance brokers,
Mexican insurance market. There are also possibilities for
as they play an important role in several markets. We
offering reinsurance to other types of companies such as
are planning to grow organically, although we are always
self-insurers, which are large multinationals and government
open to the possibility of inorganic growth. Last year
programs that provide their employees insurance. We could
we acquired a reinsurer in Canada for health. Other
offer them a Stop-Loss type of coverage in case the plan goes
acquisitions and strategic alliances have been made in
over the companyâ&#x20AC;&#x2122;s budget. In 2017, we will be identifying this
the past, for example with BestDoctors we are offering
market in Mexico and in Brazil.
a popular product in Asia.
Q: Your 2016 results show 6 percent growth on a constant currency basis. What part of this is due to Mexico and Latin
PartnerRe
America?
companies in three segments: nonlife, life and health and
A: A great part of this is due to an important growth
corporate. The life and health segment provides coverage to
that we have in our life portfolio in Latin America. Non-
primary life insurers and employer-sponsored pension plans
provides
multiline
reinsurance
to
insurance
291
VIEW FROM THE TOP
COVERING MEXICAN REQUIREMENTS RENĂ&#x2030; MIERES Commercial Director of La Latino Seguros
Q: How is La Latino Seguros positioned in the health
a hospital does not have a maximum price cap. Another
insurance sector?
problem is related to age; the older you get, the more
A: La Latino Seguros has been in the market for 111 years. It
insurance costs go up. In this regard, life insurance could
started as an insurance company providing life products but
play an important role. If you consistently invested in your
as the business evolved, we began playing in the medical
life insurance then you should be able to draw from that
expenses segment. We have the most long-lived name
insurance in old age to pay for medical expenses.
among insurance companies in Mexico. We have insured the 292
Mexican population in times of crisis such as the Revolution,
Q: How is technology changing and impacting La Latino
and the earthquakes of 1957 and 1985. La Latino Seguros
Segurosâ&#x20AC;&#x2122; operations?
is among the top paying companies in terms of meeting
A: Technology is transforming our operations. We are
claims during disasters, particularly for the health sector. Our
working on an app that will allow our clients to easily access
participation in the Mexican health sector is limited to certain
information and contact us. It will help clients control their
segments but it is a very important part of our portfolio.
spending, as it will tell them which hospitals are included in their policy. The app also allows for greater communication
Q: Which indemnification products tend to be more popular
with the company, without intermediaries, because we
for the health sector?
recognize that call centers are managed by third parties and
A: We are focused on offering indemnificatory products
obtaining some information can be difficult. We expect to
that complement our medical expenses coverage. We are
have the app ready and available by December 2017.
reviewing the more common diseases that take a toll on the population and analyzing how the scheme could work.
Q: What are La Latino Segurosâ&#x20AC;&#x2122; priorities for the coming years?
The company is also analyzing the possibility of reaching
A: We have enjoyed significant growth in the past three
agreements with public national institutions such as the
years, a period in which we almost tripled our operations.
National Institution for Cardiology or the Pediatric National
In 2014, we started the year managing premiums worth
Institution. This would allow us to sell affordable medical
MX$430 million (US$23.8 million) and we are expecting to
insurance with reasonable coverage conditions that might
finish 2017 with MX$1.3 billion (US$72 million) in premiums.
provide access to A or A+ hospitals but that guarantee access to other excellent hospitals.
When it comes to the products we offer, we have not closed our life products division, even though it requires
Q: What is behind the increased premiums for medical
a significant capital injection. We manage traditional
expenses?
and integral products in the life segment. The integral
A: In recent years, insurance companies have recognized that
products are investment products that can be made for a
COFEPRIS does not regulate the prices hospitals can charge
determined number of years. We believe that we offer an
for medications. For instance, pharmacies are regulated by
important differentiated product for the market. Although
COFEPRIS and are given a maximum price at which they
we have been in the country for over 100 years, we are
can sell a medicinal product, but that same medication in
working to create more awareness of our brand and to find new ways to reach more clients. That is our focus. We are not expanding into new business areas; our challenge is
La Latino Seguros is a Mexican company with more than
to continue growing steadily in the segments we know so
100 years of experience in the insurance sector. It offers a
well and to continue offering top-quality service so that
wide range of policies in medical expenses, life, automobile,
in five years we can go from being a small company to a
accidents, corporate and house insurance
medium-size company.
VIEW FROM THE TOP
INNOVATIVE INSURANCE BRIDGES CARE GAP PAULINO DECANINI Executive Vice President of SiSNova
Q: SiSNova is a young company. What strategy has it
Q: What is SiSNovaâ&#x20AC;&#x2122;s growth strategy?
employed to compete against established companies and
A: We have agreements with more than 300 hospitals and
new models?
5,000 affiliated doctors across Mexico. In mid-2015, we
A: Our differentiator is that we prioritize medical criteria
did not have any clients but by the end of 2015 we had
over financial or economic criteria. Our offer is based
over 7,000. In 2016, we insured over 40,000 people and
on early prevention and the promotion of a change in
in the first quarter of 2017 we were near 50,000. The main
healthcare culture. This has a significant impact on costs
internal drivers of this growth are our focus on medical
because if we change our habits, we can prevent chronic
care and our response to the insured patient. Once a user
diseases and their related complications and if we detect
becomes a patient, we answer as a provider of medical aid
diseases on time we can treat them before they become too
not as an insurance company, recovering the essence of
complex and expensive. Therefore, our focus is on integral
why someone approaches an insurance company, especially
medical care, from prevention to treatment.
when they require specific medical care. We have a 99 percent policy renewal rate.
Changing healthcare culture is a long process, so first we want to provide access to immediate medical care without
There are also external factors that boost this growth, the
a direct cost for the user. We establish specific parameters
most important of which is the big gap that is not covered
to be able to provide follow-up and organize our insured
by the public or private health sectors. There are 121 million
population by demographic and epidemiological
people in Mexico, around six million of whom have private
characteristics. We promote this by giving users benefits
insurance. But more than 30 million Mexicans belong to the
as they accomplish their goals, so they can have access to
C segment, where some have coverage but want to access
better services without higher prices.
a system with better services. Therefore, there still is a great opportunity to open access to the Mexican population.
Q: It says on your website that a new era in medical
The public sector has limited capacity to offer punctual
insurance began on May 2, 2015. How so?
and complete service and the private sector is becoming
A: This is because our greatest goal is to give the Mexican
increasingly expensive, leaving behind the larger part of the
population more access to a better healthcare service
Mexican population. We grow by looking for new users and
with international standards and quality. Major expenses
through references from our team and our clients.
coverage was designed to avoid an economic rupture when there is a health problem within the family but the
Q: What are the companyâ&#x20AC;&#x2122;s objectives for 2017 and the
deductible and co-payment must be covered first by the
coming five years?
patient. Insurance companies never cover prevention,
A: We would like to keep growing at the rates we have seen
primary care or early diagnosis. Everything is designed for
so far. However, we are conscious that uncontrolled growth
treatment. Traditional insurance companies have tried to
can affect the level of service in solving medical problems.
administrate healthcare with the goal of containing costs,
The challenge is huge because the need is infinite. Our
but their policies are designed for major health expenses.
business is not to sell policies, it is to offer medical care
This makes the system inefficient and this is one of the
with quality and security through an insurance policy.
major factors why private insurance is so expensive in Mexico, and one of the main reasons why out-of-pocket expenditure is so high and increasing despite extensive
SiSNova is a Mexican company attempting to change the
healthcare infrastructure. Also, since public services
insurance landscape, offering preventive services through
sometimes receive a subsidy, the public believes it has the
policies aimed at those not covered by the public or private
right to healthcare, but this comes at a cost.
sectors
293
VIEW FROM THE TOP
NAVIGATING CHANGES IN PHARMA JOSĂ&#x2030; MARĂ?A OSTOS Associate Partner at McKinsey & Company
294
Q: Why are medical insurance penetration rates so low in
The private label market is growing at over 20 percent in
Mexico? What is being done to increase this?
value terms. This is disproportional growth compared to the
A: Brazil is the best comparison for Mexico, which has a 21
overall 4-5 percent growth rate of the total pharmaceutical
percent rate of private health insurance as a percentage
market. In the past, pharma companies would have simply
of total healthcare spend, the highest in Latin America. In
increased prices when faced with a tough global economic
Mexico, there is a weak culture of insurance, investing and
situation, but now it is not possible because patients have
risk management. This means people need to be educated.
low-cost alternatives and pharma companies would lose
In addition, insurance companies need to ensure they have
market share. Despite this, in 2016 prices increased because
a product offering for the middle and low socioeconomic
raw material costs rose due to the peso devaluation. To
segments. Some insurance companies are strategizing to
remain competitive, pharma companies are focusing on cost
enter this market, perhaps by creating products that offer
containment measures. In the past, these companies never
new types of coverage or by working with special providers.
looked at general and administrative expenses or back-office
They need to segment this market in a way that is attractive
costs, focusing only on their sales force expense, which is the
but affordable.
largest item on their profit and loss statement. Now, every cost item is being examined. Some companies are starting to
Q: To what extent are companies making drastic changes
look into digital promotional and patient support models to
this year considering current global economic challenges?
enable this efficiency but they have not reached the level of
A: Given that the new economic environment is only one driver
sophistication of other industries. Companies still believe that
shaping the Mexican pharma market, it is also important to
traditional face-to-face promotion is the way to go.
understand there are other drivers. A few years ago, we were wondering why, if Mexico has a high prevalence of chronic
Q: What are the most prominent issues you have spotted?
diseases, a growing middle class and an aging population,
A: What is new these past years is peso devaluation, in
overall healthcare and specifically pharma expenditure were
some way driven by the US political situation. Companies
not exhibiting high growth rates. This is because public
have reacted with caution, especially when it comes to
investments in healthcare are not as high as they should be
new investments but I do not see any panic. Companies are
and also there is low private health insurance penetration.
working as usual. The other change is the launch of more
A good example is high-cost treatments because people
biosimilars. Multinational companies are the ones mainly
cannot pay for them out-of-pocket. Low-cost pharmaceutical
affected by this trend. They are struggling because they
treatments are being bought out-of-pocket, which translates
now face more competition across their innovative portfolio.
into healthy growth rates for this segment. But this specific
Some multinationals are launching patented products in
growth cannot be seen in the market audits we track; this
Mexico but they are also having trouble getting inclusion to
growth is coming from the impulse and private label segments,
the formularies of the main institutions, which is becoming
comprised of low-cost products sold in pharmacies directly
increasingly difficult. The strategy of solely focusing on
to customers. The impulse market is growing at more than
innovative products might work in developed countries but
10 percent in value terms and on average up to half of an
not in Mexico, so multinationals need to adapt their strategies
independent pharmacyâ&#x20AC;&#x2122;s products will be impulse products.
or change their portfolios. Across the broader healthcare industry, I see a proliferation of start-ups and business models trying to bridge the gap that the public and private insurers are
McKinsey & Company is a global management consulting firm
not filling. These new businesses are positioning themselves
that serves leading businesses, governments, NGOs and not-for-
in the center, serving the middle and low socioeconomic
profits. It is the largest and longest-established management-
segments that cannot pay for traditional private insurance
consulting firm in Mexico working in every major sector
but do not want to receive public care.
VIEW FROM THE TOP
INTERNATIONAL INSURANCE RETAINING MEXICAN TALENT LUK VANDERSTEDE Director General Mexico of Bupa Global Latin America
Q: Bupa reported global revenue of £14 billion in 2015-2016.
purchase. Finally, we contribute to prevention awareness by
What part did Latin America play in this?
supporting events, like 5k and 10k races that we believe are
A: This year, Bupa is celebrating 70 years and Bupa Global, its
promoting a longer, healthier and happier life.
insurance division, is one of the main players in this success. Bupa Global has 22 million people insured globally and 86,000
Q: Who are Bupa Global’s customers and what added value
employees and Bupa Global Latin America and Bupa Global
do they receive?
Mexico enjoyed strong growth from 2015 to 2016. The main
A: The people that buy Bupa Global have a clear idea of
drivers of this growth are our presence and branding.
the importance of protecting their health. Those who come to us are aware that we do cover certain risks that other
Q: What are the main challenges of operating under the
companies do not, such as extreme sports. In the case of
Mexican healthcare system’s regulations?
corporate clients, the companies that choose to work with
A: We regard regulations positively and we understand
us recognize the benefits of Bupa Global coverage for
that the goal is to have cohesion between what an
employees who frequently travel, or the companies just
insurance company says and what it does. Regulations
want to provide an international premium medical insurance
verify that we provide only those services we can comply
as a retention strategy.
with and that the rules of the game are clear. Fortunately, the interaction between insurance companies and
Q: What are Bupa Global’s main distribution channels?
regulatory agencies is positive.
A: We distribute through three different channels: agents, direct sales and through partnerships with companies. In
Q: Premiums are paid in pesos but the insured amount and
Mexico, we are associated with American Express and with
deductibles are in dollars. How does currency volatility
Actinver. The main distribution channel in Mexico is agent
impact Bupa’s bottom line?
sales because people here prefer to deal face to face.
A: Currency devaluation impacts companies like Bupa that are active on the international stage. However, we have
Q: What products can Bupa Global offer that other insurance
implemented financial tools to mitigate that impact, which
companies cannot?
includes hedging our assets. Our joint venture with Blue Cross
A: We launched our Bupa Global Health plan in 2015 and it is
Blue Shield, the largest insurance company in the US, has been
very straightforward. There are three variations of the product:
one of our biggest sales drivers in the last few years and our
select, premier and elite. All have almost the same offering but
affiliates have coverage in 97 percent of facilities in the US.
the difference is the insurance sum, which means that benefits
Anybody who has a Bupa Global Mexico card also gets one for
will increase as you move up. For all three products, the
Blue Cross Blue Shield, a benefit that has also helped improve
insurance sum is renewable, so when customers renew their
our customer-retention rate.
policy they continue to pay the same amount. Unlike other companies, we do not have a closed network of institutions
Q: What cost-effective solutions is Bupa Global providing its
or doctors; we are an open network. However, we know which
clients to promote preventive care?
hospitals our customers frequent and we have a department
A: Two years ago, the AMIS finally authorized the inclusion of
to verify that the service conditions are appropriate.
preventive benefits in an insurance product. At Bupa Global, when clients acquire an insurance policy they are entitled to a free check-up with the annual renewal. We have digital
Bupa Global is an insurance company belonging to Bupa, a
tools and a health app tailored specifically for Bupa customers
prominent association that cooperates in different business
and we also have online distribution channels through which
areas but focuses on health in its international markets division.
potential customers can receive advice about their policy
Bupa Global has been in Mexico for more than 20 years
295
INFOGRAPHIC
THE MAIN CAUSES OF DEATH IN MEXICO The main causes of death in Mexico have evolved over the
conditions accounted for almost half of all
past 90 years, transitioning from infectious diseases to chronic
deaths in Mexico in 2015.
conditions. Over the past 30-40 years, cardiovascular conditions, cancer and diabetes have become the top three foes of Mexicans
Despite rapid treatment advances, there is no magic cure for these diseases. Although certain
Following the trend in other countries and notably in
risk factors have been identified and scores
developed ones, the main causes of death in Mexico
of scientists are working on finding solutions, perfectly
have evolved over the past century. Whereas infections
healthy people can be struck down by a heart attack and
and communicable diseases were previously the
children develop tumors. Cardiovascular disease englobes
main killers, the rise of the pharmaceutical industry
tens of different conditions and a diabetes diagnosis entails
and the implementation of better hygiene practices
precautions such as a special diet for the remainder of one’s
have contributed to the decline of these killers. This
life. Failure to do follow these precautions can not only
has enabled people to live longer which, alongside
eventually lead to death but can cause debilitating side-
unhealthy lifestyles, has facilitated the rise of chronic and
effects such as blindness and diabetic foot, resulting in
degenerative diseases. The longer people live, the more
amputation and poor quality of life.
likely they are to develop a degenerative CNS condition 296
such as Alzheimer’s or Parkinson’s disease, impacting
Cancer is often thought of as the scariest of them
quality of life. Today, a Mexican is much more likely to
all, as a tumor surgically removed or declared gone
die from cardiovascular disease, diabetes or cancer
after treatment such as chemotherapy can reappear,
than influenza, diarrhea or smallpox. Those top three
sometimes years later.
CAUSES OF DEATH IN MEXICO IN 2015 (thousands) Ischemic heart conditions | Total heart conditions * 68.47%
31.53% Diabetes mellitus
Malignant tumors 43.12%
In motor vehicles | Total accidents
56.88%
33.21%
Alcoholic liver disease | Total liver conditions
66.79%
Cerebrovascular diseases
655,688
Chronic obstructive pulmonary disease Homicide
total deaths in Mexico in 2015
Influenza and pneumonia Kidney failure Perinatal afflictions Congenital malformations, deformities and chromosomal abnormalities Undernutrition and other nutritional deficiencies Self-harm Chronic and non-specified bronchitis, emphysema and asthma Illness caused by HIV Infectious intestinal diseases Anemia Alcohol dependency syndrome Septicemia
Abnormal clinical and laboratory symptoms, signs and findings not classed elsewhere Other causes 0
10
20
*Excluding Heart Attacks Source: INEGI
30
40
50
60
70
80
90
100
110
120
130
TOP 5 CAUSES OF DEATH IN MEXICO SINCE 1922 1922
1930
1940
1950
1960
1970
1980
1990
2000
2010
2015
1 2 3 4 5 Pneumonia/influenza
Malaria
Whooping cough
Early childhood diseases
Violent or accidental death and poisonings Violent or accidental death
Diarrhea/enteritis
Smallpox
Gastroenteritis and colitis
Measles
Infectious intestinal diseases
Accidents
Cerebrovascular diseases
Malignant tumors Diabetes mellitus Hepatic cirrhosis and other liver diseases Liver conditions
Heart disease
Source: INEGI, Medigraphic
HEART CONDITIONS Congenital heart disease (heart condition or defect developed in the womb)
Cardiomyopathy (genetic condition, often thick or enlarged heart)
Brugada syndrome (heart rhythm disturbance that restricts the flow of sodium ions to heart cells, causing disrupted electrical impulses through the heart)
Atherosclerosis (build-up of fatty material inside the arteries)
Abdominal aortic aneurysm (swelling of the aorta, the main artery)
Angina (pain in chest)
Stroke (blood cannot reach a part of the brain)
Cardiac Arrest (heart stops pumping)
Familial Hypercholesterolaemia (genetically high levels of cholestoral in the blood, causing fatty build-up)
Progressive cardiac conduction defect (PCCD) (slow electrical impulses, leading to heart block)
Death
Hypoglycemia
Diabetic Hypersmolar ketoacidosis state (T1D) (T2D)
Hypertension Dyslipidemia
Heart attack (not enough oxygenrich blood reaching the heart)
Long QT syndrome (heart rhythm disturbance delaying the flow of potassium ions out of heart muscle cells, sometimes allows too many sodium ions into the cells; causes a delay in electrical impulse) Source: British Heart Foundation
the number of diabetics that follow treatment as indicated by a doctor
THE EFFECTS OF DIABETES
Arrhythmia (abnormal heart rhythm)
Cardiovascular disease (term for all diseases of the heart and circulation)
Cornonary heart disease (ischaemic heart disease, build-up of fatty material on coronary artery walls)
Atrial fibriliation (irregular pulse)
Heart valve disease (diseased or damaged valve impacting blood flow)
55%
Heart failure (heart not pumping blood correctly)
Catecholaminergic polymorphic ventricular tachycardia or CPVT (heart rhythm disturbance, caused by high levels of calcium in cells)
Inherited heart conditions (most common are cardiomyopathies, arrhythmias, Familial Hypercholesterolaemia)
Stroke
side effects
Heart attack
Other Eye problems Blindness Amputations
Source: Diabetes.org
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VIEW FROM THE TOP
PREVENTION A CORNERSTONE FOR OLDEST INSURER IN MEXICO RAÚL KURI Director of the Agent Channel of Seguros GNP
Q: What are the main challenges you face when operating
generate positive change and allow people to contribute
in Mexico’s healthcare system?
to the strengthening of a healthy and prosperous society.
A: The Mexican insurance sector is still developing and
Without a doubt, the healthcare sector plays an important
searching for strategies to widen its reach among the
role in our society and is one of the main foci in the
local population. Our strategy is to raise awareness
development plan of any country.
among individuals and companies about the importance
298
of insurance in the formation, care and optimization of
In Mexico, we face a challenge in providing first-class
their legacy.
medical attention to all Mexicans to generate a positive, long-term change. The hurdles are many. The first is to
Today, approximately 80 percent of private healthcare
generate a culture of prevention and opportune attention
expenditure is paid out of pocket because only 7 percent
to chronic degenerative diseases among all members of
of the population has medical insurance. Of those who
society. The second is timely care and close monitoring
have health insurance, 60 percent obtain it through a
of the treatment of these patients. Finally, we must
company policy and the remaining 40 percent have an
strengthen research for new medical treatments.
individual policy. This situation reflects the importance of increasing awareness about the need for health
The insurance sector plays an important role in
insurance among Mexicans that will allow individuals to
strengthening the healthcare industry because it grants
generate a culture of healthcare prevention. Furthermore,
access to healthcare under any circumstances to a
a larger number of insured allows insurance companies
greater number of people.
to generate specific products according to the needs of the population.
Q: What role does GNP Seguros play in the transition toward a culture of prevention?
GNP issues one out of every three insurance policies for
A: GNP Seguros is constantly on the lookout for services
medical expenses in Mexico. We have been the number one
that promote the prevention of chronic degenerative
company in this type of insurance for the past 70 years.
diseases and their timely care, with the goal of improving people’s health and their quality of life. Among the
Promoting a culture of insurance is of the utmost
programs we have developed to promote prevention is
importance and this principle leads all our actions as
GNP Looks After Your Health, which aims to diagnose and
an insurance provider. We consider the use of insurance
reduce risks for the most common chronic degenerative
a responsibility that benefits individuals, their families
diseases in the country. This p rogram promotes three
and their surroundings. Through the program GNP
essential habits, which are a balanced diet, regular
Looks After Your Health, we have provided education
physical activity and stopping smoking. These three
and counseling regarding the acquisition of major health
habits, along with regular medical visits, are fundamental
expenses insurance.
to reducing health risks.
Q: What role does healthcare play in GNP Seguros’
To date, 17 companies have entered the program with an
overall operations?
average participation of 70 percent of their employees
A: For GNP Seguros, healthcare is vital, both for
for a total of 16,500 participants. Out of a sample of
our internal and external activities. We have several
2,200 individuals, we measured a 32 percent reduction
specialized programs designed to increase the impact of
in the risk of suffering a chronic degenerative disease.
prevention and timely treatment. These programs permit
This program is different from others because besides
individuals and companies to create a virtuous cycle to
prevention, it aligns with timely detection of the risk
factors of these diseases. Close monitoring of every
Without a doubt, the healthcare sector is among the
single one of our insured clients permits the program to
most vulnerable to these attacks due to the sensitive
provide specific recommendations to contribute to the
information it handles. For that reason, it is important
improvement of people’s health.
to acknowledge that even after all security measures are undertaken it might not be possible to prevent all attacks.
Q: Some specialists see critical diseases as the insurance
The sector has to implement broad-reaching security
sector’s Achille’s heel. What is GNP Seguros’ view on
measures and protection policies that allow all institutions
this matter?
to safeguard their valuable information. Among these,
A: The relevance of chronic degenerative diseases has
the acquisition of cybernetic damage insurance must be
motivated us at GNP Seguros to develop programs
considered to prevent and reimburse economic and brand
focused on improving people’s health through timely
damage brought about by these crimes.
detection and care. In the cases of insured clients who already have one of these chronic diseases, GNP Seguros provides them with top-flight treatment and follow-up to improve their quality of life. The company also gives them many tools to manage these conditions, including our Integral Accompaniment Program that provides personalized support for the insured. This program began for patients of breast and colon cancer but has expanded to now also encompass those with a chronic degenerative condition,
60 percent obtain health insurance though a company policy and 40 percent have an individual policy
all types of cancer and neurological and cardiovascular diseases.
Q: What measures is GNP Seguros implementing to protect organizations?
Q: What strategy will Seguros GNP implement to
A: GNP Seguros is aware of the risks that cybernetic
contribute to Mexican medical care over the next few
crimes pose to companies in every sector. For that
years?
reason, the company allied with Beazley, a global leader
A: Our role as an insurer is to continue developing
in cybernetic attack protection, to develop CyberSafe
initiatives that make excellent healthcare services
GNP, a comprehensive insurance to protect organizations.
available to all socioeconomic levels. The goal is to
Among the main benefits of this insurance product is
enable all individuals to receive timely care in the face
damage restitution, which can reduce economic losses for
of a sudden and serious medical emergency. Another
the insured by up to 80 percent. This solution integrates
goal is to help them adhere to an appropriate follow-up
services such as a call center, expert reports, legal
regime to improve their quality of life.
representation, public relations and crisis management to develop and implement an action plan to manage the
We also want to strengthen GNP Looks After Your
results of the attack.
Health by adding more companies and individuals to this virtuous cycle. The adoption of healthy habits
GNP Seguros is a fully Mexican company with over 115
and periodic medical visits will promote risk reduction
years of experience in the insurance sector, working across
of chronic degenerative diseases among the general
segments. Our commitment to the country is not only
population.
aimed at the financial field. We are also committed to promoting responsible actions to raise social awareness
Q: GNP has said that it expects cyberattacks, such as
and to benefit Mexican health, which we believe is one of
the Wannacry virus, to increase the sale of insurance
the main pillars of a thriving society. For that reason, we
policies. Is this happening?
develop programs that help improve the health of Mexican
A: The digital era we live in poses significant risks such
families and that promote prevention and timely detection,
as cyberattacks, which rose by 50 percent in 2016. These
all of which are cornerstones for improved health.
attacks increasingly target organizations and institutions instead of individuals. We estimate that over 556 million people are hit by these attacks worldwide every year,
Seguros GNP is one of the largest insurance companies in the
causing economic loses over US$110 billion. In Mexico,
Mexican market. It has over 115 years of experience in cross-
the damages caused by these crimes are estimated to
sector insurance and is a part of the industrial group Grupo
be over US$2 billion.
Bal, which includes El Palacio de Hierro and Industrias Peñoles
299
INFOGRAPHIC
CHALLENGES AHEAD FOR HEALTH INSURANCE Higher medical expenses and a longer life expectancy have
there are fewer workers in the public sector and
created fresh challenges for the health insurance industry. To
those employees remaining are losing benefits
attract customers, companies are adjusting coverage terms to
such as medical insurance. Still, the public
include limitations while also creating more flexible policies
sector represents a hefty opportunity as the government remains a big purchaser. Between
This may not be enough as companies are also taking a hit on
October 2014 and March 2015, the federal government paid
previously profitable areas. According to AMIS, the accident
leading insurer Seguros GNP MX$1.6 billion (US$88 million)
rate in 2016 was above profitability for companies. Also,
to cover major medical expenses for 320,000 public servants.
AUTO PARTS PRODUCTION PER YEAR IN MEXICO
MEDICAL AND HEALTH PREMIUMS (MX$ billions)
80 70
0.31%
Major medical expenses Health
GDP
60 50 40 30 20 10 2015
2016
13.6%
14.1%
0.5%
0.6%
0.5%
0.5%
2013
2014
2015
2014 14.2%
2011
2012 13.5%
13.7%
13.1%
13.6%
13.4%
13.1%
13.2%
0.4%
0.4%
0.3%
0.3%
0.3% 2012
2013
14.6%
13.7%
2011
2010
2009
14.1%
13.9%
2009
2008
14.8%
13.4%
2008
2007
2006
0
15
10
13.3%
13.6%
14.1%
12.8%
13.2%
13.7%
0.4%
0.4% 2007
MEDICAL INSURANCE PREMIUMS (percent of the market)
2006
5
DISTRIBUTION OF THE REGIONAL SUSTAINABLE expenses ——Major medical FUND ——Health ——Total DEVELOPMENT 2
2016
0 2010
300
LOW ACCEPTANCE
7.5%
CATASTROPHIC EXPENSES
45% 71% 21%
of the population was insured in Dec. 2014 (over 9 million people)
EXPENSIVE CASES (cost per patient) 11% Mazapil
2% Sahuaripa
Blood cell conditions in
37.4% Cancer underage patients 9% Cananea 2% Morelos 8.87% Bone system 7% Nacozari de Garcia 2% Eduardo NeriBody component equilibrium 7.78% Cardiovascular disease 5% Fresnillo 2% Aquila 7.69% Nervous system Glucosaminoglicanos 4% Ocampo 2% Alamos metabolic disorders 5.3% Accidents 4% Caborca
1% Chinipas
2% Sierra Mojada
47% other
Source: CGM, Ministry of Economy 1 With figures to March of 2015
MX$90 million MX$64.2 million MX$47 million
between 25-44 years old part of collective or group plans individual
LONG CASES (cost per patient) Diabetes patient (MX$1.4 million)
27 years
Cysticercosis patient (MX$2.6 million)
24 years
Chronic kidney failure (MX$2.1 million)
24 years
LOSS RATIOS FOR MAJOR MEDICAL EXPENSES 2010-2016 (percent)
78%
In Mexico, the number of claims in group policies has always been higher than in individual policies
69%
Group
Individual
95 90 85 80 75 70 65 60
2010
2011
——Loss ratio 5 big firms
2012
2013
——Total loss ratio
——Loss ratio 5 big firms
PREMIUM SHARE (percentage of the insurance market)
2014
——Total loss ratio
PRICE INCREASES OVER 10 YEARS
10
93% individual medical expenses
8
6
74%
4
group medical expenses
2
Individual
Group
HIGHER PRICES Medical expenses policies increase in price every year
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
0
2015
79% total medical expenses
Percent of the population with major medical expenses coverage 2004
3.9%
2005
4.9%
2006
5.6%
2007
5.6%
2008
5.7%
2009
6.0%
2010
6.1%
2011
6.9%
2012
7.6%
2013
7.4%
2014
7.7%
2015
7.5%
COORDINATION WITH PUBLIC HEALTH Most people are willing to pay for a known medic, if he or she is coordinated with public security network
According to experts between 10% and 12% According to Condusef, between 9% and 14%
79.2%
of consumers with financal support are willing to go for a medical consultation with a private doctor, if references to the public network are possible SIMULATOR CONDUSEF and AMIS started a major medical expenses simulator that includes 10 companies, with the aim of increasing health insurance penetration in the Mexican market
OF CONSUMERS WHO REPORT THERE IS A DOCTOR NEAR HIS OR HER WORKPLACE OR HOUSE AND WHO ARE WILLING TO PAY FOR CONSULTATIONS:
64.8%
60.3%
near workplace of house
workplace of house
are willing to pay for consultation Sources: AMIS, El Asegurador
has a doctor near
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VIEW FROM THE TOP
PRIVATE SECTOR STEPS UP TO THE PLATE JAVIER POTES President of the Consorcio Mexicano de Hospitales
Q: How has the consortiumâ&#x20AC;&#x2122;s business model evolved with
It does not cover cancer or a heart attack; in those cases,
the healthcare system?
patients should use their social security. This will be the only
A: The first goal of the consortium was to achieve operational
insurance in Mexico for the middle segment in cost. Besides,
effectiveness, cost reduction, training and information
the system works with deductibles instead of refunds.
exchange. Our idea was to become the largest hospital
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network in Mexico even though our bed average is only
To arrange all these benefits we will launch a mobile
around 34 per hospital. However, this vision has changed.
application that works with an algorithm that performs a
Instead of being the largest hospital network we want to
risk evaluation for each patient and provides personalized
become the first private healthcare system in Mexico. We
information. It also will have a patientâ&#x20AC;&#x2122;s history uploaded so
wanted to save patients money and avoid out-of-pocket
even if a patient changes doctors, the doctor can still access
expenditure. We did a study on health coverage in Mexico
records. In the future, this platform will provide incentives for
and we found that 6 percent of the population has coverage
prevention, such as gaining points to access gyms. The idea
for major medical expenses, 60 percent have social security
is also to provide better prices to our patients and to allow
and the rest cannot afford insurance. This last group is the
doctors to achieve more volume.
one that usually comes to us and spends a lot of money. The reason for this situation is because insurance in Mexico
Q: What are the main advantages for hospitals, doctors and
was created for hospitals, not for patients. The main
patients as part of the consortium?
problem in Mexico is the lack of money. Insurance systems
A: The initial advantage was achieving better purchase
can help us organize the market and become efficient in
prices because if all the small to medium-sized hospitals
managing hospital expenses so that premiums do not rise
buy together, they can get lower costs. The second idea
as they usually increase 15 to 25 percent every year. Last
was to share information. The hospitals needed to see if
year, 20 percent of insurance holders canceled their policy.
they were doing things right, so we developed manuals and
Insurance is also limited and there are only options to cover
organized exchanges of professionals between the hospitals.
catastrophic diseases but not for the most common causes
Then we started developing training opportunities for the
of hospitalization. We want our model to bridge these gaps.
employees of each hospital. We developed online courses for 13 different positions with different modules in each
Q: What is the consortiumâ&#x20AC;&#x2122;s plan to address this situation
and planned 30 annual talks on different topics. Now we
as a group?
have four certification courses in hospital management,
A: We approached insurance companies and proposed an
marketing, purchasing and quality.
system we designed for patients at consortium hospitals. It will be delivered to the segment of the population that
Q: What are your main objectives for 2017?
has no coverage through private insurance or social security.
A: We want to reach 250,000 memberships for our system
It costs no more than MX$5,000 (US$277) a year and is
in the next two years. It will be possible because at the
available with Seguros Atlas and Seguros Banorte. It includes
consortium there are 100,000 hospitalized patients every
up to MX$170,000 (US$9,444) of medical expenses at our
year and 300,000 more who undergo ambulatory procedures.
hospitals and covers 90 to 95 percent of hospitalizations.
The consortium will keep training and providing information exchanges. We also want to integrate specialty clinics to reach the goal of becoming the first private healthcare system
Consorcio Mexicano de Hospitales is a consortium of hospitals
in Mexico. It is not an easy task because Mexicans do not
that offer patients insurance coverage, working together to
understand what a healthcare system is. But we are working
save costs and aiming to create the first private healthcare
to create a model that includes all types of services, like social
system in Mexico
security does, for a similar price and with better service.
VIEW FROM THE TOP
ALTERNATIVE ROUTES TO GROWTH MARIO CARRILLO Regional Director of Mexico, Central America and the Caribbean for SCOR Global Life SE
Q: What have been the biggest challenges in insurance and
Q: How important is Mexico within your global operations?
reinsurance in 2016?
A: It is very important. As a reinsurance and insurance
A: The main challenges have arisen from exchange rate
market in general, it is one of the main ones. Brazil has
volatility. Medical inflation has increased and as a result
almost double Mexicoâ&#x20AC;&#x2122;s population, so by simple numbers,
incidents have become more expensive to cover. In addition,
this doubles the need for direct insurance. However,
since policies are sold in US dollars, it is a challenge for
companies in Brazil prefer to retain much of their risk
some people to renew them. Another factor is market
and what reinsurance does exist pertains to a system that
competition. It is a finite market with a defined number of
was previously a monopoly. Mexico has roughly half the
potential customers, which puts pressure on prices. Some
population of Brazil, but we provide double the reinsurance
players are prepared to enter the market by narrowing
volume, which makes Mexico the most important market
their margins, which also places more pressure on both
for reinsurance in Latin America.
the insurer and reinsurer. Finally, medical insurance has always functioned like a service. It is not a purely profitable
Q: How does the Mexican market compare to others in Latin
segment; life insurance, for example, has more stable, long-
America?
term margins. Medical insurance is more volatile. Year-
A: Each country has its particularities and its own challenges.
on-year results vary and are influenced by many factors,
The insurance markets in Latin America have developed
including hospitals, doctorsâ&#x20AC;&#x2122; fees, consumables, new
differently. In Mexico, private insurance penetration is low and
technologies, devices and medicines. Because of these
the objective of institutions has always been to increase this,
conditions, the number of players willing to participate in
which means that more people are covered. In Colombia, for
the market is decreasing.
example, insurance penetration is relatively good. There are several types of coverage, such as pension fund insurance,
Q: What is the advantage of maintaining operations in this
that do not exist in Mexico. Some countries allow citizens to
challenging segment?
deduct their private insurance expenses from their federal
A: Most participants in the medical insurance segment
taxes, meaning they do not have to pay twice like in Mexico,
want more. Doctors want increased fees, hospitals want to
where people pay for public healthcare provided by IMSS
earn more for each case, agents want a higher commission
and then for a private policy on top of that.
and insurers want increased profitability. As a reinsurer, our operations are globally diversified and, therefore,
Q: What are your goals for 2017? How will you achieve them?
we can also help companies by introducing them to
A: We are seeing strong growth. Fortunately, each year has
best practices and solutions from other countries. For
been a record for us over the last 10 years or so. This is not
example, to better manage medical expenses, insurers can
a coincidence, it is due to our development plan. In Mexico,
offer specialized policies that limit coverage to specific
SCOR ranks third or fourth in its life and health business.
conditions, such as fractures.
We have three main lines of development: the traditional market, reinsurance to solve capital needs and designing
Q: Which is the most popular of the specialized products?
new products. We are currently researching other products
A: There is a certain product called catastrophic diseases
that could be viable and adapted to this market.
that was developed in the UK 20 years ago. There have been catastrophic products covering 30 different diseases, including some that were quite rare. These products have
SCOR is a French reinsurance group founded in 1970 with
been optimized and we have whittled them down to six
a global presence in over 160 countries. It operates in life &
main ones, including cancer, heart attacks and organ
health and property & casualty and has had a direct presence
transplants. Of these six, cancer has the most impact.
in Mexico for six years
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VIEW FROM THE TOP
WELLNESS MAKING INROADS IN INSURANCE CRISTINA LÓPEZ Director of Employee Benefits of Murguía Consultores
Q: What advantages or benefits do clients receive from an
those who are over 30 years old. For a company prevention
insurance broker like Murguía Consultores?
program to succeed, we must start with young people right
A: Being a specialized broker enables Murguía Consultores
when they begin their working life and habits.
to identify client needs. Identifying when to offer benefits to
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employees is important, so we develop three to five-year plans
Exercising regularly, taking an entire hour for lunch and not
that allow clients to modify provided benefits according to
eating in front of the TV are some habits that companies
their changing needs. The ability to develop strategic plans
should promote to keep people healthy. There is a vicious
and to provide agile, tailor-made solutions and personalized
cycle that prompts health-related events: many people work
services are some of our strategic advantages. Murguía has a
10 hours a day for minimum wage, and must commute for
team of 15 people that take care of health-related events by
up to four hours daily, lacking the time to exercise. Because
providing our clients with direct 24/7 assistance.
they earn minimum wage, they are likely to have unhealthy eating habits. Obesity follows and eventually employees
Q: What role does prevention play in Murguía Consultores’
suffer from diabetes, cardiovascular problems and related
offering?
diseases. We need to break this cycle.
A: When a Murguía client contracts any of our three programs, our supplier Uhma performs medical examinations
Q: How do you help people over 35 years old to change
and applies a health risk-assessment questionnaire. This
their habits?
provides an insight on people’s habits and lifestyles. Based
A: A campaign that usually has good results is to remove
on that health assessment, Murguía develops a demographic
trash cans from the office, which compels workers to get
profile of the company that enables it to identify common
up and walk. Walking contests also have positive results.
diseases and develop tailormade solutions to prevent or
Providing rewards like vacation days or cinema tickets is
minimize them. Our programs are focused on generating
important. When employees start noticing results, they stop
changes in habits to achieve positive health results.
doing it for rewards and start doing it for their wellbeing.
Q: What are the most common diseases companies see
Q: What are the advantages and challenges of micro
among their employees?
insurance?
A: There are two kinds of health-related events: the chronic
A: Companies like American Express sell a series of
and the catastrophic. Many chronic events are related to
inexpensive micro insurance policies, such as life and travel.
stress: gastritis, colitis and even paralysis are caused by stress.
However, when a person takes out a loan, the organization
Lack of physical activity can also aggravate stress-related
providing it must include life insurance (payment protection
diseases. Even if these conditions are diagnosed, they are
indemnization) so that the credit is paid if the creditor
usually not covered by insurance policies. The most common
passes away. Micro insurance should not be for sale, it must
catastrophic events are cancer, intestinal obstruction and
be given to the people in the poorest social segment.
heart stroke, which sometimes are related to both stress and obesity. Companies that do not promote exercise may
Q: What are Murguía’s biggest challenges?
have employees who are vulnerable to disease, especially
A: The biggest challenge is becoming more efficient, being up-to-date on global trends, achieving differentiation and being in direct contact with patients instead of
Murguía Consultores is an insurance broker working across
over the phone or by email. For the rest of 2017, our
sectors. In health insurance, it specializes in offering policies to
challenges are preventing mistakes, further training our
employees of its client companies that cover everything from
staff and preparing for next year’s potentially politically
dental and vision to critical illness
troublesome situation.
VIEW FROM THE TOP
PREVENTION AN EMERGING INSURANCE TREND
OMAR VIVEROS Director of Health & Benefits at Willis Towers Watson
EDUARDO HORI Senior Consultant in the Retirement Practice at Willis Towers Watson
Q: What is the most significant trend in health insurance?
in the medium term. We need to work on insuring more
OV: Medical insurance is expensive due to a number
people so that in a few years the public sector will not be
of reasons. It is overused but has not yet reached mass
saturated by the demands of an elderly population. We
consumption. In 2016, 9.1 million people bought medical
need to work on creating a prevention culture.
insurance, a small percentage of a country that has over 120 million people. To amplify insurance penetration in Mexico,
EH: The social security system in Mexico is saturated. Data
companies need to create specific coverage. Employers also
from the National Population Council (CONAPO) estimate
must have the ability to offer coverage and benefit schemes
that close to one-fourth of the Mexican population will be
that make sense to its employees. But it is also necessary for
aged over 60 by 2050. If this segment of the population
the government to contribute with fiscal incentives.
with a larger tendency to get sick uses public health, it will greatly increase pressure on the system. The other option is
The most important trend in insurance is prevention.
that people who have enough resources use private medical
This concept is gaining momentum and companies are
services, but individual insurance for people over 60 is
implementing several strategies to participate in this
extremely expensive. That is why we suggest using private
emerging area. There is a small percentage of the population
pension funds to cover these future private medical expenses.
that is sick and there is another small percentage that is healthy. In this demographic, there are sub-segments: people
Q: How can the private and public sectors work together
who are disposed to developing diabetes, for example, or
to promote wellness and prevention?
those who engage in some kind of physical activity but not
OV: In late 2015, the Ministry of Labor and Social Welfare
consistently. Although there is still a long way to go, we have
(STPS) recognized that stress is a condition that impacts
noticed that a significant percentage of the population is
health negatively. As a consequence of work-related stress,
aware of prevention. Companies are offering insurance
indicators such as tobacco use and alcoholism have increased.
to attract and retain employees and by implementing
It would be ideal if the government could enforce measures to
prevention and wellness, they are reducing their costs. By
promote prevention in companies. However, employers would
reducing stress levels, fewer people will need to use public
balk at this because of the related increase in operating costs.
health services due to illness. It is a win-win situation.
In an ideal world, the private sector and the government would act with greater synergy; if a governmental initiative
Q: Would indemnification payments have a positive impact
became mandatory, the private sector would be subject to
on the mass consumption of medical insurance?
sanctions if it refused to comply, thereby giving companies
OV: Indemnification payments are already being used
the incentive to act. However, the government must really act
and are certainly a mechanism that can help to spur mass
upon it. Additionally, companies must understand that stress
consumption of medical insurance. However, they are not
among employees has a negative impact on their productivity.
the solution. In 2013, the number of insured people went
Willis Towers Watsonâ&#x20AC;&#x2122;s consultancy has the experience and
from 8.8 million to 9.2 million people, an important leap
the abilities to help companies implement wellness strategies
when comparing the growth of insurance in previous years.
and to negotiate with insurance companies or third parties when needed.
Q: How is the insurance market preparing to take care of an aging and obese Mexican population? OV: As employers, we must continue with efforts to educate
Willis Towers Watson is an advisory, broking and solutions
the population on the dangers of obesity. There are a
company that helps clients around the world turn risk into
number of initiatives companies can implement, such as
a path for growth. With roots dating to 1828, Willis Towers
offering healthy snacks that can have a positive impact
Watson has 40,000 employees serving more than 140 countries
305
Dental practice lab for students and dentists
ATTRACTING & RETAINING TALENT
13
Traditionally, Mexican medical professionals are seen to be part of the general brain drain to the US and to a lesser extent, Europe. Many insiders beg to differ. They argue that although professionals may choose to train abroad, they often return to their homeland with a variety of additional skills â&#x20AC;&#x201C; a plus for the country. A bigger issue for Mexico may be that it is training too many general doctors, around 14,000 per year. It has the capacity to offer specializations to less than a quarter of those, creating potential opportunities for foreign professionals. Mexican universities are addressing the issue by further improving the training they offer students and are imparting additional competences requested by recruiters, such as business or communications skills. In the modern world, learning is never complete and some institutions are going online to offer additional courses to medical professionals.
This chapter will feature analyses on the Mexican job market, gender equality and insightful interviews with the countryâ&#x20AC;&#x2122;s top universities and recruiters, enabling readers to explore the strategies employed to keep talent at home while also attracting foreign talent.
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SEPTEMBER 6, 2018 SHERATON MARIA ISABEL, MEXICO CITY
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CHAPTER 13: ATTRACTING & RETAINING TALENT 310
VIEW FROM THE TOP: Enrique Cabrero, CONACYT
312
VIEW FROM THE TOP: José Mustre de León, CINVESTAV
314
EXPERT OPINION: Jorge Valdez, Tecnológico de Monterrey
Germán Fajardo, UNAM
316
ANALYSIS: Gender Pay Gap Prominent in Mexican Healthcare
317
INSIGHT: Marlene Llópiz, IMC
318
VIEW FROM THE TOP: Dominik Bacher, Bacher Zoppi
319
VIEW FROM THE TOP: Justyna Kroplewska, Hays
320
INSIGHT: Francisco Hernández, Grupo Accses
321
INSIGHT: Ignacio Pérez, Heidrick & Struggles
322
ANALYSIS: Jorge Valdez, Tecnológico de Monterrey
323
VIEW FROM THE TOP: Simone Sato, Laureate International Universities
324
EXPERT OPINION: Marlene Llópiz, IMC
327
VIEW FROM THE TOP: Gabriel Alvarado, Kronos
328
ROUNDTABLE: How Can the Private Sector Promote a Better-Educated Workforce?
309
VIEW FROM THE TOP
ENCOURAGING TALENT DEVELOPMENT THROUGH SCHOLARSHIPS ENRIQUE CABRERO Director General of CONACYT
310
Q: How can Mexican talent be encouraged to stay in
A: Most of the brightest Mexican talent focuses on
Mexico after graduating and not leave to work abroad?
researching chronic and infectious diseases, the leading
A: CONACYT has several programs to retain and attract
causes of death and disability. Research is primarily
highly qualified human capital. One is the Professorships
focused on obesity, metabolic syndromes, nephrology,
for Young Scholars Program that incorporates young
rheumatology, heart diseases and respiratory diseases.
people into the country’s research system. Currently,
Mexico has renowned researchers who focus on the
there are 1,298 professors distributed across universities
study of infectious diseases, including vector-borne
and research centers, focusing on various topics.
diseases such as dengue and chikungunya, as well as
We also have repatriation and retention programs.
those resulting from a virus like zika.
Additionally, we have the Program for the Incorporation of Postgraduates into the Industry. This program has
Many of our scholars have been internationally recognized
been developed to facilitate the employment of trained
for their work. For instance, in 2017 the British Council
professionals to promote competitiveness and innovation.
granted the physicist Fátima López the Study UK Alumni
For this program, CONACYT contributes half the salary
Entrepreneurial Award. She completed a Ph.D. in Medical
of the selected candidates.
Physics at the University of Sheffield and she is currently responsible for implementing a new national policy that
Q: How do Mexican science and medicine programs rank
allows IMSS to commercialize new technologies, with
globally? What more needs to be done to improve them?
royalties bringing in hundreds of millions of pesos that
A: This year we have 27 medical and health science
will be reinvested in the Mexican healthcare system.
programs listed as “internationally competitive” in the Mexican Postgraduate Quality Program. CONACYT
The British Council also granted Pablo Manrique the
awards this category in recognition of a program’s
Study UK Alumni Social Impact Award. He completed his
longstanding commitment to pioneering research, the
Ph.D. at the Faculty of Infectious and Tropical Diseases of
best quality in teaching, outstanding academic resources
the London School of Hygiene and Tropical Medicine. He
with international standards, as well as international
is a professor and researcher at the University of Yucatan
collaborations with prominent institutions around the
and focuses on control methods of the Aedes aegypti
world. As of March 2017, these programs had 292 students
mosquito, the main transmitter of dengue, chikungunya,
with scholarships provided by CONACYT and they were
zika and yellow fever.
located in seven different institutions in five states. There were also 25 internationally competitive programs in the
Last year, L’Oréal, CONACYT, UNESCO and The Mexican
fields of biology and chemistry with over 1,500 CONACYT
Academy of Sciences granted Viridiana González a
scholarship holders.
scholarship for her work on aging and health problems of the elderly. She works in the Department of Health
To improve the quality of our programs, we have been
Sciences at the Metropolitan Autonomous University.
supporting the acquisition of scientific publications and the expansion of infrastructure through different
Q: What has been done to increase the number of
funds. For instance, the national laboratories call
specialized workers, a need identified by CONACYT in
has funded several large initiatives in areas such as
2015?
radiopharmaceuticals and biotechnological medicines.
A: The number of scholarships provided by CONACYT has increased by 34 percent since 2012 and there are
Q: In which areas applicable to health does Mexican
45 percent more members of the National System
talent shine the brightest?
of Researchers. The number of students enrolled in a
program related to medicine or health sciences increased
and validation protocols for robotic devices for human
by 43 percent between 2012 and 2017. The number of
use. Similarly, the National Institute of Cardiology is
programs connected with medicine or health sciences
developing a coronary stent to aid the treatment of
registered in the quality graduate programs listing
coronary artery diseases. This project, supported by the
jumped from 207 in 2012 to 365 in 2017, an increase of 76
incentives to innovation program is in a preclinical phase.
percent. The number of researchers related to medicine
It is expected to open new markets and trigger industrial
or health sciences registered in the National System of
and commercial ventures due to its comparatively low
Researchers increased by 60 percent from 2013 to 2017.
price.
In addition, the implementation of the professorships for young scholars program has created new academic jobs
Q: How is CONACYT working with international
throughout the country. This has been an outstanding
organizations and institutions to showcase Mexican
program to support research in Mexico.
talent abroad? A: We have fostered international cooperation through
Q: CONACYT supports certain companies. What criteria
agreements with governments and institutions around
does it use to select them?
the world. We have signed more than 200 cooperation
A: To fund a project, CONACYT evaluates all submissions
instruments and we have supported high-impact research,
and then selects the best ones, prioritizing those that
mobility and participation in international scientific
belong to strategic areas such as health, pharmaceutics,
projects. Regarding medicine, we participate actively in
bio and nano-technology, aerospace, automotive and
the Global Alliance for Chronic Diseases through global
energy.
projects. We are aware that health institutions play a key role in research, so we support them in international
The incentives to innovation program is an instrument
initiatives. For instance, we recently channeled a
to support projects that aim to develop new products,
ÂŁ2.5million Newton Fund initiative to the Sectoral Fund
services or processes or to improve existing ones based
with the Ministry of Health.
on technological advances. We have already completed eight competitive calls, supporting 5,549 projects
Q: What are CONACYTâ&#x20AC;&#x2122;s main goals for the next few
with a total budget of approximately US$1.6 billion,
years?
which means an average of US$201,000 per year. Two
A: CONACYT has set objectives to guide our future
hundred and forty projects (4.3 percent) were related
work, which include a more efficient and responsible
to pharmaceutical areas. These projects received a total
management of public resources and stronger
US$55 million. We can also include health projects, of
participation of the private sector and universities in
which there were 259 (4.7 percent of total projects
expenditure. We are committed to advancing niche
funded) and US$81.5 million. Additionally, the program
sectors in Mexican states and to working with the recently
supported 25 projects related to medical devices with
formed consortium to promote regional development. We
US$7.7 million.
will also continue to consolidate strategic international alliances, as well as with the institutions of the Science,
Q: Which are the most promising projects being
Technology and Innovation System.
developed in conjunction with or with grants from CONACYT?
Regarding medicine, we are supporting the development
A: We are in the last stages of the creation of a consortium
of translational medicine in particular regarding metabolic
in translational medicine to facilitate the application
diseases, in line with the national health priorities. We
of knowledge obtained from clinical trials and basic
also promote progress in preventive medicine, especially
research to produce new pharmaceutics, treatments and
regarding teenage pregnancy, maternal and child health
prevention systems. The Ministry of Health and UNAM are
and infections associated with medical treatment,
also taking part in this project.
including the indiscriminate use of antibiotics and the subsequent rise in antibiotic resistance, a rising threat
In addition, we have projects for the design, synthesis
worldwide. Mexico is also following suit in global efforts
and preclinical validation of new treatments to prevent
to develop personalized medicine.
drug abuse. The preclinical phase has already concluded and the clinical phase is next. The treatments are being developed in the National Institute of Psychiatry and are
The National Council of Science and Technology (CONACYT)
supported by the Sectoral Fund of Research in Health
is a government entity that aims to increase quality,
and Social Security (FOSISS). Furthermore, people at
competitiveness and innovation of companies in its areas of
the UNAM are developing affordable hand prosthetics
focus. It is known for offering scholarships to students
311
VIEW FROM THE TOP
PIONEERING MEDICAL ADVANCES JOSÉ MUSTRE DE LEÓN Director General of CINVESTAV
Q: CINVESTAV operates in 12 health areas. Which are the top
25 percent of our researchers are not from Mexico and
three for the Mexican healthcare market?
around 70 percent have studied abroad.
A: The largest is probably pharmacology but we also have
312
significant operations in genetics and molecular biology,
Q: Why do these students return to Mexico?
which helps us touch on more modern themes such as
A: Until recently, part of that may have been the high
translational medicine, genomic medicine, metabolic diseases
salaries CINVESTAV pays its researchers. There is also easy
and chronic-degenerative diseases. In addition, infectology is
access to students here, yet this is not expensive because
another important area, due to the rise of emergent infectious
most students have scholarships paid by external agencies,
diseases. Our infectomics and genetics departments are
like CONACYT. This is unlike what happens in other North
working on zika and chikungunya. It would appear that these
American universities, where a graduate student needs to be
infectious diseases are no longer a main health concern for
directly financed by the project being researched.
Mexico but it necessary to remain vigilant. Q: Researchers often publish before considering IP, losing out Q: What is your ideal student profile?
on patents. To what extent does this happen at CINVESTAV?
A: It would be a student with a solid foundation in
A: Publication is vital for a researcher’s career development
biology, mathematics, chemistry and physics and with
due to the national academic evaluation system in Mexico. We
strong communication skills. We base our admissions on
have an office of technology transfer within the institution,
propaedeutic processes and, at the end of the courses, we
which in some cases contacts a researcher to delay
choose the best students. This gives us time to homogenize
publication and generate a patent beforehand. Our policy is
our student population and to measure the students’ work
that if a product or development does not have short-term
capacity. Around 25 percent of our students who have studied
commercial potential, it is not convenient for the institution to
medicine want to move into research; around 50 percent are
file patents, whereas scientific publication is a valuable asset.
biologists and another 25 percent come from other areas such
We only filed 44 patents in 2016.
as chemistry or engineering. The time and resources needed to conduct clinical trials are Q: What is your strategy to strengthen the international
sometimes beyond the scope of an educational-research
competitiveness of Mexican researchers?
institution like CINVESTAV. For example, we have a joint
A: The Ministry of Public Education gives us specific funds for
patent with UNAM and the Autonomous University of Morelos
mobility, which differentiates us from most universities and
State for a medicine derived from amphotericin, a powerful
research centers and enables over a thousand of our graduate
mycotic that can be used as a last resort for infections but with
students and faculty members to participate in annual short-
a high mortality rate of almost 50 percent. In preclinical trials,
term visits abroad. These visits are often based on long-term
the lethality of the new compound we developed in animals
collaborations and increase our international presence.
was under 5 percent. To make this a commercial medicine, we must conduct clinical trials and even associated with the
Since CINVESTAV was founded, our strategy has been
other two universities the costs are significant: it would cost
to bring in the highest quality researchers. Currently,
around US$3million. Q: To what extent does CINVESTAV have preferred
The Center of Research and Advanced Studies (CINVESTAV) is a
partnerships to carry out these trials?
respected research institution headquartered in Mexico City that
A: We work with hospitals, particularly with the IMSS and
also offers postgraduate and doctoral degrees. It has a strong
ISSSTE systems, and several hospitals that are part of the
focus on health, as it was originally established by a cardiologist
Ministry of Health, such as Hospital Juarez. The characteristics
of CINVESTAV do not allow us to attend patients directly. We
already been published. The project began in 1985 by
think this is an advantageous partnership because it enables
documenting physics research in Mexico, then it grew
our research to have an immediate impact on patients and it
to be Inter-American and around 10 years ago it was
also enables medical doctors at those hospitals to have access
decided this would be useful for all areas. This project
to leading technology.
is supported by the Mexican Academy of Sciences and CONACYT.
We also have the most modern vivarium in Latin America, winning an award in 2016. We have several transgenic species
Q: What are CINVESTAV’s priorities for the Mexican
in it, such as rats genetically modified to have diabetes so we
healthcare industry in 2017?
can study the effects of the disease, a unique case in Mexico.
A: In 2017, our priorities will not change, unless there is an epidemiological emergency. The main focus will be on
Q: What is the importance of health for CINVESTAV?
chronic and degenerative diseases, such as Alzheimer’s
A: Around 30 percent of our researchers work in health, 25
and Parkinson’s. In addition, we will try to start the
percent of our published articles are in health and the area
construction of a center to study the effects of aging.
is allocated around 30 percent of the budget. However, the
Specifically, this is important for Mexico City because it
impact on human resources is greater: around 42 percent
has the highest proportion of elderly adults. This may be
of our students work in health. We may have 15-20 new
because healthcare is better here than in other places,
admissions every year in our physics department but around
enabling people to live longer. This is a joint project with
100 in molecular biology and we are turning 70-80 percent
the government of Mexico City.
of applicants away. Q: What is an example of a project executed in the We have a National Laboratory for Genomics and Biodiversity
institution?
(Langebio) at CINVESTAV on our Irapuato campus. Our
A: A special technique for cultivating human skin cells
genome sequencing capabilities are the largest in Latin
was developed around 2009. This project was expected
America. We created this laboratory between 2005 and
to be for mass-use, to cultivate macroscopic tissue to
2015 and we were the first group worldwide to sequence
treat serious burn cases. The main issues with these cases
the genome of corn. In Monterrey, there is a group working
are dehydration and infection, so the affected areas need
in biomedical physics and engineering to design medical
to be covered as quickly as possible. Because of this
devices. They are working on a new x-ray tomography
project, 50x70cm expanses of tissue could be routinely
machine that complements imagenology techniques such as
produced. This technology was licensed to BioSkinCo, a
nuclear magnetic resonance imaging.
Mexican company based in Guadalajara. The product has been successful but it could have more impact. However,
Q: CINVESTAV is compiling ATLAS, a history of Mexican
the public health system in Mexico has not been able to
science. What is the importance of this compilation?
adopt the product, perhaps due to costs. The royalties
A: ATLAS clearly documents various collaborations in
from projects such as this one help us finance other
all areas. This is an ongoing process, but part of it has
research initiatives.
313
EXPERT OPINION
ACADEMIC MEDICINE: OPPORTUNITIES FOR COMPETITIVENESS AND DEVELOPMENT JORGE VALDEZ Dean of the School of Medicine and Health Sciences of the Tecnológico de Monterrey
The School of Medicine and Health Sciences of the
Medicine faculties traditionally stick to teaching only the
Tecnológico de Monterrey practices academic medicine
field of medicine, but Tecnológico de Monterrey’s School
conducting medical research and educating students while
of Medicine and Health Sciences teaches other areas of
caring for patients. This fundamental triple helix enables us
the medical field like biomedical engineering, nutrition
to form internationally competent, humanely sensitive and
and wellness, clinic and health psychology, health care
entrepreneurially spirited medical professionals.
management and odontology. We also offer a variety of master’s, specializations and doctoral programs.
314
The Tecnológico de Monterrey and other universities
Tecnológico de Monterrey applies the “clinical professor”
promote the creation of Academic Medical Centers (AMCs),
model, because being a docent is necessary to be part of
medical associations with an international branch, to
an AMC. All physicians that have an office in the Academic
boost academic medicine. They are composed of one or
Health Center of the Tecnológico de Monterrey are required
more hospitals, a school of medicine and health sciences
to be part of the clinical professor model as well and be
and some research elements. Health science students in
certified by each specialty’s national council.
AMCs do not only receive practical education and acquire experience in care-giving but also come into contact with
There have been advancements in medical education
medical research, which provides a foothold for a virtuous
through cooperation between public and private universities
cycle that advances research, care and education.
in Mexico in organisms like the National Association of Universities and Institutions of Higher Studies (ANUIES) and
Bettering medical education and advancing academic
the Mexican Association of Faculties and Schools of Medicine
medicine in Mexico and Latin America are huge areas of
(AMFEM). In the latter, universities created the competence
opportunity. The QS World University Ranking 2017 in
profile of the Mexican general physician, a manual listing
medicine includes only 25 Latin American and four Mexican
competences all medical professionals must have, and the
universities. There are 150 faculties and schools of medicine
incremental quality model, which enables the raising of
throughout Mexico, but less than half are accredited by
quality standards in medical human resource formation.
the Mexican Council for the Accreditation of Schools of Medicine (COMAEM). We cannot aspire as a country or
We need to develop our own abilities, retain and attract
region to be competitive on an international level without
talent from elsewhere. AMCs are necessary to retain and
the creation of processes of certification and accreditation
attract medical talent and to be competitive. A national
that validate the quality of the care we deliver, the research
strategy is necessary to make academic medicine the
we perform and the education we provide.
objective of schools of medicine nationally. There are some AMCs in Mexico, such as Centro Médico Siglo XXI, national
We cooperate with AMCs around the world to form
institutes of specialties, the university-hospital of UANL
internationally competent professionals. The hospitals we
and those operated by the Tecnológico de Monterrey in
operate have national and international accreditations of
Monterrey, Mexico City and Guadalajara. The development of
warmth and quality as measured through patient experience.
AMCs is an area of opportunity that requires combining the
All physicians working in them are certified. Our educational
strengths of public and private organizations. It can attract
programs, like all regular medical schools, are certified
investment both from the private and public health sectors
by COMAEM and all 16 of Tecnológico de Monterrey’s
and from abroad. It is necessary to intervene and promote
specialization and the two doctoral programs are on
research given the challenges health problems in Mexico
CONACYT’s Quality Graduate Programs Register. Finally,
present and to push the government to allocate more funds
70 faculty members are a part of the National Researchers’
to health. Together, these steps can create a virtuous cycle
Institute (SNI) and work in seven strategic approach groups.
that improves the development of the country.
VIEW FROM THE TOP
ADAPTING TO THE HEALTHCARE SYSTEM GERMÁN FAJARDO Dean of the School of Medicine at UNAM
Q: What is UNAM doing to ensure students get the best job
Q: How is the UNAM School of Medicine working with the
offers in Mexico and do not feel the necessity to leave the
government to this end?
country?
A: This is a situation in which the solution does not lie solely
A: Several years ago, the Brazilian government, due to a
with the School of Medicine. We strive for our students to be
lack of general medical doctors, brought Mexican medical
the best prepared and to be competitive in their respective
doctors to Brazil. Generally, doctors that go abroad do so to
fields and to have the necessary competencies aligned with
specialize and are usually the elite. They leave to take medical
the epidemiological profile of Mexico. The labor issue does
licensing exams in the US, Canada or Europe to obtain their
not necessarily depend on us. We are working closely with
specialization or subspecialty.
the Ministry of Health and health agencies. It is not a new nor an easy problem. It has to do with the health system
The problem is not that our doctors are going abroad
itself and the healthcare model. The Ministry of Health
but rather, the challenge lies in providing adequate job
has proposed a new model of care, which we hope will be
opportunities at home. Mexico produces around 14,000
successful in increasing job openings. We are proposing
physicians per year in approximately
several solutions. One of which is to train
140 medical schools but, in general,
medical doctors with a family medicine
Mexican physicians do not receive employment offers from abroad. Recent graduates have little interest in becoming a general practitioner a n d t h ey fo c u s o n o b t a i n i n g a specialization, which is a reflection
14,000 the number of doctors Mexico produces per year in around 140 medical schools
specialty, adding a couple of years to the core medical curriculum to make it a nineyear combined studies program. Q: Apart from the medical specialty, what skills do employers look for and how is
of the labor market as, for example,
UNAM meeting this demand?
IMSS only hires medical doctors with a
A: The reality of the situation is that the
specialization, particularly because its healthcare system
main focus in hiring is in meeting the academic demands.
is geared toward family medicine. IMSS attends around
There are instances, such as medical institutes or highly
70 million Mexicans, which means that roughly half the
specialized IMSS hospitals that require other characteristics
health system is blocked to the general practitioner as this
such as highly technical knowledge and a research
system impedes them from accessing jobs in this sector.
background. The competencies of other areas are difficult
The Ministry of Health of each state and ISSSTE have
to evaluate but the most important role of a doctor is the
opened few vacancies for general practitioners. Therefore,
human aspect. This may be one of the most important
a general medical doctor has limited opportunities to
elements, sometimes even more than technical abilities.
enter the workforce.
A patient does not know if we are providing the correct treatment or choosing the right study. They pay attention to
Options for a recent medical graduate include specializing,
how they are treated. The doctor’s focus is on the technical
which is what the majority aspire to. Around 40,000
side and patient’s focus is on the human aspect. Therefore,
physicians applied for the National Residency Exam in 2016,
our main goal is to include both in medical education.
competing for about 8,000 places. This varies by specialty as some have greater demand, such as ophthalmology or otorhinolaryngology. This leaves around 30,000 without a
The School of Medicine at the National Autonomous University
specialization. Some of these doctors go into private practice
of Mexico (UNAM) is one of the most prestigious and recognized
in general medicine but others are being hired as pharmacy
in Mexico and Latin America. It encompasses nine departments,
consultants, with around 15,000 positions available.
including public health, pharmacology and surgery
315
ANALYSIS
GENDER PAY GAP PROMINENT IN MEXICAN HEALTHCARE Access to health in Mexico is in large part determined by
members who are sick or who have a disability
economic factors, yet half the population is on average paid
or chronic illness. In Mexico, more and more
less, based on gender. This remains true even within the
people are living longer while suffering from
healthcare sector itself, which is usually seen as more equal
chronic diseases and women are usually responsible for this care because there are
One issue with healthcare in Mexico is access, which is in
no public services offered to these patients,” says Ana
large part linked to purchasing power. The Global Gender
Güezmes, the representative for UN Women Mexico.
Gap Report 2016 by the World Economic Forum places Mexico 122nd of 144 countries for gender equality in
On average, Mexican women perform four times as much
economic participation and opportunity and 128th of 135
unpaid work as Mexican men. This translates to around 112.6
countries regarding wage equality.
minutes per day for men and around 373.3 minutes per day for women, according to the OECD. Within the healthcare
“[A] priority in terms of public health is the lack of access
sector itself, the gender pay gap is stark: on average across
to healthcare and pension funds for women who work in
fields men earn MX$65.6 (US$3.6) per hour, compared to
the informal sector. This is also the situation for all those
MX$51.1 (US$2.8) for women, according to the National
women who have to stay at home to take care of family
Institute of Women (INMUJERES), a government entity.
316
MONTHLY SALARY MENRANGES FOR HEALTHCARE SECTOR WORKERS women
Total
Men
Women
Total
75.9%
82.6%
79.9% 12.9% 7.1%
14.8% 9.3%
11.7 % 5.7%
Under MX$17,046 (US$947)
From MX$17,046 to 25,254 (US$947 to US$1,403) Under MX$17,046
Under MX$17,046
AVERAGE INCOME PER JOB BY GENDER (MX$ per hour)
AVERAGE INCOME (MX$ per hour) From MX$17,046 to 25,254 200 Over MX$25,254 Men
150
Women ——Average
Over MX$25,254 (US$1,403) Under MX$17,046
From MX$17,046 to 25,254
From MX$17,046 to 25,254
Over MX$25,254
Over MX$25,254
100
Source: INMUJERES
Specialized Doctors
Dentists
General and family Doctors
Technicians in Diagnostics Equipment, Medical Treatments, Podiatrists and Physiotherapists
Assistant Nurses and Paramedics
Technician Nurses
0
Specialist Nurses
50
INSIGHT
KEEPING MEXICAN TALENT AT HOME THROUGH TRAINING MARLENE LLÓPIZ CEO of IMC
Companies increasingly face the challenge of not only training
These types of initiatives are favorable for the industry because
new talent but retaining that talent and keeping professionals
they motivate and promote the development of national
up-to-date amid rapid changes. In addition to financial
talent, which in Mexico has been drained by countries that
incentives, healthcare companies can turn to organizations
offer better academic opportunities. In Mexico, 85 percent of
like the Continuous Medical Education Institute (IMC) for help
science professionals who hold a post-graduate degree have
and guidance.
studied abroad, and many usually remain outside of Mexico. Also, in 2012 Mexico saw the lowest investment in science
“We are an ally and a strategic partner for our clients because
of OECD countries. However, companies are starting to take
given the constant changes in the industry, companies cannot
action to retain that prepared talent. According to Llópiz,
cope with the amount of training they want and need to
many pharmaceutical companies have started providing
provide for their staff,” says Marlene Llópiz, CEO of IMC, which
financial incentives to their workers based on the results
offers custom-made solutions to prepare human capital in the
of compulsory academic courses, emphasizing a worker’s
pharmaceutical, scientific and medical industries.
responsibility for their education.
The Institute provides different services, adapted to
When a company wishes to work with IMC, the institute
each of its clients’ needs, such as advisory boards,
prepares a proposal based on the client’s needs. Some request
focus groups and continuing medical education courses.
training on a specific disease and treatment, to be delivered
According to Llópiz, most of the companies that look for
during a determined period of time and for a certain type
these services are pharmaceuticals, hospital groups and
of professional, whether related to market access, medical
public institutions, such as ISSSTE and IMSS. “We had
training or for the sales forces. IMC can also help prepare
a summit on vaccination for the elderly which several
international exchange programs. “We are working on a
pharmaceutical companies participated in, as well as
proposal for a company that would like to send a group
the National Geriatrics Institute (Instituto Nacional de
of oncologists to Spain to visit oncology centers and learn
Geriatría). The final result is an upcoming publication in
about their experiences and exchange points of view and
the Gaceta Médica that will set national guidelines for the
treatment guidelines.” The institute is also organizing a summit
vaccination of the elderly,” said Llópiz.
of ophthalmologists in Central America for retina experts to develop national guidelines for this specialty for several Latin
The topics chosen for the institute’s course catalogue and
American countries.
events are usually hot topics in the industry, in this case, geriatric care. In fact, since 2016, Mexico has been training
Because IMC’s solutions are tailored to the client, the
health professionals to provide geriatric care for specific
institute can work with private and public, national and
diseases like Alzheimer’s and dementia as part of the country’s
international, corporate, small and commercial companies
commitment with the PAHO plan.
and academia. All ask for different services, but they have one thing in common: the need for continued training and
Key among the goals and outcomes of these summits is the
up-to-date information. “The industry is very dynamic and
exchange of knowledge among professionals, the access
you have to always be willing to change with it. We used
to new information and the development of new ideas, but
to always talk about reference drugs for treating patients.
mostly the writing and contributing of new policies that will
Then, generics came along and it was a revolution and a
bring about changes in the healthcare sector at a corporate
new beginning for pharmaceutical companies. Currently, we
and national level. “We are hopeful there will be a second
have biotechnological drugs on board. Therefore, both the
geriatric summit in 2019. We are also planning to host a
physician’s knowledge and strategies to promote pharma
summit on nutrition for the elderly,” she adds.
sales have to be continuously updated.”
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VIEW FROM THE TOP
SPECIFIC TALENT FOR SPECIFIC COMPANY CHARACTERISTICS DOMINIK BACHER CEO of Bacher Zoppi
Q: How does the Mexican health talent market compare
which allows us to recruit nationwide in a timely manner.
to other industries?
We do turn to other sectors or young talent directly from
A: The employee market in the pharmaceutical and
university, not due to a lack of candidates with experience
healthcare industry is still highly attractive, precisely
in our industry but mainly to meet our clients’ specific
because of preferential conditions compared to other
requirements.
industries in terms of compensation packages, benefits, training programs and career plans.
Q: What new skills do companies expect from their future sales force?
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Bacher Zoppi has been a pioneer in offering specialized
A: Sales representatives should have the capacity to
services for the pharmaceutical and healthcare industry
manage their territory just as an entrepreneur would
for more than 20 years. Due to our solid processes and
do, negotiating at all levels with key opinion leaders
compliance with the requirements of the industry as well
and pharmacies to optimize demand and ensure the
as the authorities, a great number of companies prefer
availability of a product at the points of sale.
our talent pool and staffing services to hiring new sales talent. We recruit around 1,500 people per year, which
Additionally, new candidates need digital skills to
makes us one of the main employers in our sector.
effectively administrate all future communication channels with their clients. As for district managers,
Q: To what extent has the rise of digital technology
companies are looking for coaching skills to accelerate
impacted recruiting for in-person visits?
the development of skills needed for the increasing
A: Digital technology has not produced a significant
responsibilities of today’s sales force.
variation in the number of people being recruited to perform in-person visits. However, we are fully aware
Q: What were Bacher Zoppi’s growth drivers in 2016 and
that the industry is evaluating and implementing digital
what are the company’s priorities for 2017?
technology to increase the promotional impact and to
A: It has been a challenge for Bacher Zoppi to compensate
continuously optimize marketing and sales expenses.
for the industry’s reduction of the overall sales force head count with new business opportunities. However, in 2016,
Q: Does the existing talent pool in the health industry
we exceeded our growth expectations with aftersales
meet your needs or must you turn to other sectors?
services in hospitals, which represents the fastest growing
A: We have a vast variety of job profiles since our clients
area of our business.
define or at least approve the characteristics for each vacancy. The importance of finding the specific talent
We have also developed and improved several services,
for each position according to the characteristics of each
such as talent pools, training programs and other sales force
company is a key success factor for Bacher Zoppi. We
services for the pharmaceutical and healthcare industry.
have our own experienced and specialized recruiting team across Mexico and maintain an updated database
We will continue to focus on developing and offering
with more than 20,000 commercial and sales candidates,
specialized services for the pharmaceutical and healthcare industry. Our added value is our expertise with more than 20 years offering tangible results in real-time.
Bacher Zoppi, a Mexican outsourcing company, recruits sales
We are committed to exceeding client expectations. This
forces for pharmaceutical and healthcare companies. It was
has enabled us to become the leader of our industry,
founded by Swiss entrepreneur Dominik Bacher and former
which has brought us much recognition and many
Novartis Commercial Director Reto Zoppi
recommendations.
VIEW FROM THE TOP
SPECIALIZATIONS IN HIGH DEMAND JUSTYNA KROPLEWSKA Senior Consultant at Hays
Q: What are the top challenges companies face in filling
is necessary for management positions. For private sector
jobs and what positions are most in need?
sales, we look for soft skills. However, for both clients, flexibility
A: The main positions that need to be filled within the
is mandatory because the health market always has different
pharmaceutical and medical devices industries are in sales
opportunities. With sales, it is important that applicants can
because of the high turnover, especially at entry level. A
highlight the advantages of the products, because selling is
specific difficulty in these sectors is specialization. These
not about prices or competitiveness but what the patient can
areas require a high degree of specialization, product or
get from the drug or the equipment.
therapy knowledge as well as experience working with the government (IMSS, ISSSTE, SEDENA, PEMEX) and the private
We are also living in a world of mergers. We have many
sector so talent from other sectors is not always appropriate.
Big Pharma brands in the process of downsizing, so they have to do more with fewer people. For each person, this
Q: Where are companies finding that missing talent? Is it
translates to more work. Before, product managers focused
coming from abroad?
on one medical device or a single group of products. Now,
A: Mexico is not so focused on importing talent yet. First,
they deal with larger portfolios.
companies have to be willing to import international talent and then the laws of each country have to be flexible
Q: How important are soft skills over traditional medical
enough to allow this, otherwise it will take longer to bring
skills?
the person over. The solution is to fill entry-level positions
A: Medical skills are much appreciated but those who have
and develop that talent through programs, as many have
been working in the industry for 15 or 20 years have gained
done. Another solution is to use agencies like ours.
knowledge from their experience. They may not have a medical background but most unit directors have excellent
Q: To what extent are companies cooperating with
medical knowledge. It is not possible to have a successful sale
universities?
to a hospital or IMSS if you cannot detail the benefits for the
A: Most of our clients employ second and third-year
patient and the pharmacoeconomic information of a product.
students through internship programs. Usually the students are not paid but they gain experience, so it is a win-win for
Q: Hays is the number one staffing firm on LinkedIn. What
both sides. At the master’s or doctoral level, internships
role does social media play?
are often a program requirement and for companies it
A: It is extremely important. The digital age allows the most
is an opportunity to get to know future talent. However,
direct and fastest way to reach our audience with quality
sometimes students enter a university program with a
specialized information. We try to be visible to our potential
specific plan and five years later, when they finish, the
clients because in life sciences we only dedicate our time to
industry is no longer in the same position as when the
pharma and medical devices, which is unusual for staffing
program was designed. Still, the relationship between
firms. Therefore, we strive to be the first company to come
companies and universities is a priority and an opportunity
to a candidate’s mind due to our knowledge and opinion
to work together to solve the industry’s talent gaps.
leadership. This should make the difference for candidates and clients in the market.
Q: What skills do Hays and its clients look for and how does that apply to the public and private sectors? A: We consider hard and soft skills. When we look for hard skills
Hays is one of the world’s leading recruitment companies
we go after people who have worked with the government
with over 6,000 consultants in 33 countries working in 20
before, because it is composed of complex institutions that are
specialties, including accountancy, construction, banking,
particularly different from private companies. This experience
education, health, legal, energy, retail and telecoms
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INSIGHT
IMPROVING EMPLOYEE HAPPINESS, RETENTION FRANCISCO HERNÁNDEZ Director of New Projects at Grupo Accses
High employee rotation is a notable issue in the Mexican
behavioral symptoms including inability to concentrate,
workforce and, more specifically, in the healthcare sector.
headaches, sleep problems and irritability.
Francisco Hernández, Director of New Projects at Grupo Accses, believes mental wellbeing is a key factor. Improve
Grupo Accses’ core activity is overseeing company
that and improvement in retention will follow.
payrolls but it differentiates itself by providing additional services to the employees on the payroll. In May 2017, it
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“Those that are happy at work, who feel appreciated and
launched its Access to Health Life program, which will
protected, are more productive and more loyal to the
provide affiliated employees with discounts through
company,” Hernández says, adding that the level of rotation
alliances the company has made with specialized medical
also changes due to the level of income. “The higher the
services, pharmacies, laboratories, spas, restaurants and
income, the higher the level of rotation in specialized
other entertainment venues.
clinics.” He also stresses that this can help attract new employees in addition to retaining good talent. “Although
Hernández is hoping this will help lead to healthier employees.
a company can advertise through social media such as
Improving an employee’s wellness and satisfaction can help
Twitter and Facebook, another way to advertise is with
reduce absenteeism and the lesser-known presenteeism,
happy employees,” he adds.
both important problems in Mexico. “Recent statistics from the Harvard Business Review show that most personnel
Mental health, and good health in general, depend on more
rotation is due to reasons other than income. Around 40
than pills and doctors’ visits, Hernández says. Intangibles
percent of people do change jobs because they do not earn
such as happiness and mental balance play a major role.
enough, but the rest leave for other reasons such as bad
“When a person is emotionally stable and well, they are
bosses or not feeling appreciated,” Hernández says.
less likely to get any type of illness. Depression and stress are doorways for illness,” he says. The NHS reports that
A London School of Economics report quoting a
stress has a variety of emotional, mental, physical and
2016 Evans-Lacko study states that depression costs
MEXICAN EMPLOYEES ARE LIKELY TO KEEP WORKING DURING AN EPISODE DAYS TAKEN OFF WORK DURING ANOF EPISODE OF DEPRESSION, IMPACTING THEIR PRODUCTIVITY DEPRESSION AND PERFORMANCE AT WORK 2.7% DON'T KNOW
65.6% 0 days 2.3% 21+DAYS 23.8% 1-5 days 0.4% 16-20 DAYS 6-10 days 2.7% 2.6% 11-15 days 2.6% 11-15 DAYS 0.4% 16-20 days 2.7% 6-10 21DAYS + days 2.3% 2.7% Don't know 23.8% 1-5 DAYS 65.6% 0 DAYS
Mexican employees are likely to keep working during an episode of depression, impacting their productivity and performance at work IN THE MIDDLE S. OF THE DONNUT : Source: Evans-Lacko, & Knapp, M. Soc Psychiatry Psychiatr Epidemiol DAYS TAKEN OFF WORK DURING AN EPISODE OF DEPRESSION
Mexico over US$14 billion in lost productivity and that depression-related presenteeism costs Mexico US$11.3 billion. The same study showed that Mexicans are likely to keep working during depression, thus impacting their productivity and performance. Grupo Accses’ Access to Health Life program will first be rolled out to the 3,600 employees already on the company’s payroll. It will then be rolled out to other companies and their employees, which Hernández says is easier to do once Grupo Accses shows it cares about the wellbeing of their clients’ employees. The group will also look for more partnerships to improve its offering. “We are looking for partners with the ‘wow’ factor, the one that takes people out of their daily routine.” It also looking to eventually offer funeral insurance. “When a person is young, it does not matter but when you have a family, worrying about this type of thing impedes happiness and influences the company’s vibe.”
INSIGHT
DESPITE ADVANCES, GENDER EQUALITY STILL AN ISSUE IGNACIO PÉREZ Partner at the Consumer, Life Sciences and Healthcare Practice of Heidrick & Struggles
Despite many advances in the last decades, gender
the executive roles they deserve, despite their experience.
equality is still an issue in the business world. Boardrooms
There is sometimes machismo,” he adds.
are mostly filled with men and many women feel pushed out or held back because of their gender. In September
Regarding the health industry in general, Pérez is confident
2016, research institute Catalyst analyzed the number of
despite recent budget cuts, which have led to fewer
female CEOs at S&P 500 companies. The result? Twenty-
changes in executive management. “I believe the industry is
three or just 4.6 percent. It also showed women hold only
evolving favorably, even with the challenges it faces, many
19.9 percent of those companies’ board seats.
of which are related to the lack of government budget, inclusion difficulties and the talent war,” he says.
Mexico is no stranger to this level of inequality, including in the health industry, says Ignacio Pérez, Managing Director
The main issue in executive talent in the life sciences and
of top-executive recruiter Heidrick & Struggles. “You could
healthcare industry is retention, which has led to companies
count the number of female director generals on your
paying bonuses to keep people, which in turn creates
hands in the health sector,” he says, “and 60 percent are
internal inequality issues and eventually leads to talent wars.
not Mexicans. We need more female executives.”
This war happens on social media, as now employees are not just poached from within the country’s industry but
Heidrick & Struggles’ Life Sciences and Healthcare
from abroad, too. “There are many Americans, Colombians
Practice manages the executive talent needs of all manner
and Venezuelans in the pharma sector at all levels. I think
of healthcare companies, including medical devices,
Mexico needs to send more people abroad,” Pérez says.
pharma and hospitals. The firm is a sponsor of the World Economic Forum, which in its 2016 Global Gender Gap
Some companies are prepared to bring in talent from other
Report placed Mexico 128th on its 144-country list of wage-
sectors, he says when discussing the trend of bringing in
equality indicators.
new blood, be it from other industries or other countries. About 80 percent of a successful integration depends on
Pérez stresses the importance of diversity in the
acclimatization with the company’s culture. For this reason,
boardroom in gender, background and competencies, and
he says, some companies bring in executive talent from
says companies are making a mistake if they continue
other subsidiaries or branches to fill a position.
this trend. “We see many companies in which women earn less than their male counterparts. This should not
Pérez emphasizes the importance of creating a balance
be. It is a total error of talent management,” he says,
of talent on a team. “What is needed is the necessary
while emphasizing that women should be judged on their
experience, the personal characteristics, the executive
performance and talent, not on their gender. According to
competencies, which you either have or do not have, and
the OECD, the gender pay gap in Mexico was 16.7 percent
finally the cultural fit,” Pérez says. “The health sector has a
of the median male wage.
good reputation as it is seen as dynamic.”
Women also need the same training and exposure as their
In the next five years, Pérez expects the industry to continue
male counterparts if they are to be promoted to executive
evolving to provide better coverage and to keep striving for
positions. “There should be equality of opportunities, not
efficiency while maximizing investments. Diversity will also
quotas, which simply create unneeded positions,” Pérez
play an important role. “This is important for me. We need
says. Still, even if women have the training and experience
to give Mexicans more exposure abroad and, as a country,
there is another obstacle to overcome: machismo.
we need to become more attractive to encourage these
“Sometimes employers are not prepared to place women in
people to return to Mexico,” he says.
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ANALYSIS
THE QUALITY OF HUMAN TALENT SPECIALIZED IN HEALTH JORGE VALDEZ Dean of the School of Medicine and Health Sciences of the Tecnológico de Monterrey
In the last decade, medical students have shown great interest
of medicine have been recently created, 13 of which are
in acquiring specialized clinical knowledge that enables them
public while 37 are private.
to contribute to the competitiveness of the public and private health sectors. It is imperative that the authorities regulating
At a postgraduate level, according the Interinstitutional
medical education help to create an appropriate atmosphere
Commission for the Training of Human Resources for
by providing quality guidelines for academic programs.
Health, there are 27 medical specialties available to study in Mexico. In 2016, 7,810 students were admitted to a
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The determination of Mexico’s human talent to begin a
university course for medical specialization, according to
university degree in general medicine shows an inclination
figures from the National Examination for Applicants for
toward continual growth. This has translated into over 100,000
Medical Residencies (ENARM). At a master’s and doctoral
medical school applications yearly and around 20,000
level, schools are adopting the philosophy of training health
admissions nationally. According to the Higher Education
researchers. This is due to the curricular and methodological
Scholastic Population Yearbook of the National Association of
value of the structure of these programs. In terms of
Universities and Higher Education Institutes (ANUIES), there
academic excellence, as of May 2017 of the 510 active
were 126,296 students studying medicine across all years, of
medical specialization programs, 189 were accredited and
which 14,781 finished their studies and 13,084 were granted a
recognized in the Registry of National Program of Quality
degree during the 2015-2016 school year.
Postgraduates (PNPC), which forms part of CONACYT. The practice and execution of the medical profession does not
Considering these statistics, it is imperative that the leaders
end with graduation. CONACEM administers the regulation
and visionaries of the national medical education and
for certification and renewal procedures, so specialists can be
labor market offer the general population a catalogue of
responsibly evaluated according to norms and procedures.
professional programs that impart quality and academic excellence at undergraduate and postgraduate levels. It is
Boosting and solidifying the quality of the specialized
to this end that the National System of Accreditation (SNA)
training that human talent receives in the health sector and
and the Council for the Accreditation of Higher Education
enhancing excellence in the provision of health services
(COPAES) enjoy the privilege of conferring official recognition
will only be possible if the problems of quality vis-a-vis
to the organisms that accredit academic programs in Mexico.
medical education are addressed. Faced with a lack of quality models in medical programs and a high level of
Responsibility for accrediting academic programs
service in medical care for epidemiological diseases, the
specifically developed by schools and faculties of medicine
Model of Quality for Schools and Faculties of Medicine
at the undergraduate level falls to the Mexican Council for
stands out. It is based on the theory of the management
the Accreditation of Medical Education (COMAEM). The
of quality, accreditations and rules for medical education.
accreditation process focuses on a general methodology
This methodology takes into account the five levels of
of evaluation, a benchmark and quality indicators. In March
an incremental quality model (beginning, development,
2017, 142 schools and faculties of medicine were registered
standardization, innovation and sustainability) and it is
with COMAEM, 49.3 percent of which were accredited: 41
structured with guiding principles aligned to leadership and
public and 29 private entities. The Mexican Association of
planning, program and research design, students, integral
Schools and Faculties of Medicine (AMFEM) is responsible
education, facilities, links to other institutions, evaluations,
for promoting innovation in training, care and research
continual improvement and results. The schools of medicine
models that connect the local to the global. As of April
in Mexico are at the standardization level and, as an added
2017, there were 100 schools and faculties of medicine
value, this model can serve as a guide for improving how we
affiliated with AMFEM. In addition, 50 schools and faculties
position ourselves regarding innovation and sustainability.
VIEW FROM THE TOP
A NETWORK OF EDUCATIONAL OPPORTUNITIES SIMONE SATO Vice Rector of Health Sciences at Laureate International Universities
Q: How is Mexico positioned to meet demand for medical
A: The network follows a global health science academic
degrees and which areas are attracting the most attention?
model. This learning model was created nine years ago and
A: Globally, there is growing demand for medical degrees.
the results have been positive. The model has several pillars,
The same is true in Mexico but we lack the resources to
one of which is educational technology. Our students have
meet demand. In some states, there are too few clinical
to use technology while learning because it is important for
sites available for the number of people interested in the
diagnosis and patient treatment.
degree and Mexico needs more physicians. Every time a new medical school opens it is filled to capacity. Veterinary
Another important pillar of the model is learning
degrees are also gaining a lot of interest. We only offer this
through simulation because we are focused on training
degree on two campuses, but we have expansion plans.
professionals with a high level of expertise and who know how to think critically and solve problems based on
People with technical degrees, such as nurses or
scientific evidence. Our campuses have simulation centers
physiotherapists, are also interested in obtaining a more
that help develop skills and clinical competencies. We are
professional education. We have a post-graduate program on
the first university to integrate this type of program and we
health management, for example, to train doctors who already
are the only global group with interdisciplinary simulation.
own a consultancy on how to administrate their business.
We use this as a tool not only for teaching medical skills but also to help our students develop communication skills
Another area of high demand in the health sector is for
through doctor-patient role plays. Having knowledge is
specialization programs. Ninety percent of Mexican medical
not enough: it is important that students can apply that
students want to earn a specialization but there are not
knowledge. This method guarantees security for patients
enough spaces and even less so for nutritionists and
because if we can prepare professionals to deal with
physiotherapists. In general, many health professionals
real scenarios, we can be more certain of the quality of
cannot access the specialization they want, which is an
professionals we graduate.
important issue we have to address. Q: What opportunities does Laureate International Q: How does Mexico’s education in health sciences
Universities provide its member universities?
compare to other countries in the region?
A: Being part of an international network provides several
A: There are areas in which Mexico is advanced and there are
academic and professional opportunities. First, we receive
others where we lag. The Del Valle University (UVM) health
constant feedback from other institutions because the
science programs are available on 30 campuses. Fifteen years
network helps strengthen knowledge among the branches
ago, we were the first to offer a bachelor’s in physiotherapy
— we can learn from other countries’ problem-solving skills
and we have granted degrees to 80 percent of Mexico’s
and evolution strategies.
physiotherapists. However, in Brazil physiotherapy has been a regulated profession for 50 years. Even though we are 35
Belonging to the Laureate network also provides
years behind, it will not take us long to catch up to other
opportunities for teachers to go abroad for research at
countries. Professionals are requesting more opportunities to
other universities and for students to go on exchanges.
specialize, which is a great step for the development of the healthcare system. We are trying to increase the number of bachelor’s and master’s degrees in our portfolio.
Laureate International Universities is a global network of 70 campus-based and online universities. In Mexico, Del Valle
Q: How are academic offerings adapted to the changes in
University and the Technological University of Mexico belong
healthcare management and practices?
to the network
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EXPERT OPINION
CONTINUOUS EDUCATION ENSURES OUTSTANDING PROFICIENCY MARLENE LLÓPIZ CEO of IMC
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Continuous medical education constitutes a broad
Nevertheless, this modality has not figured in universities
concept closely related to professional competency. It
with the appropriate force, despite its essential role. It is our
is a serious need for physicians because of the incessant
vision that continuous medical education will effectively
output of knowledge from biomedical research that
assist physicians in the generation, translation, diffusion,
continuously challenges our paradigms about health
critical appraisal and utilization of new knowledge
and disease and implies notable involvement for medical
that contributes to high-quality, compassionate and
practice when describing the pathophysiology, diagnoses
cost-sensitive care for patients. It encompasses those
and treatments of every disease.
learning activities performed after graduation from formal programs with objectives restricted to upgrading, and
Among the different stages of medical education,
generally are activities with a determined duration and
practitioners are forced to follow a continued learning
are carried out in traditional ways.
process to keep up-to-date on the knowledge and skills that ensure they will be successful professionals of
The aim of continuing medical education is to establish
outstanding proficiency. For physicians, it is key to train
a link between health professionals and the fast-growing
with strict and critical thinking through life-long learning.
body of knowledge to gain the competences required for
They should also be able to embrace methods of science
optimal clinical practice. Postgraduate and continuing
into their practice, such as critical analysis.
medical education differ from undergraduate education in that they go beyond increasing knowledge and skills
Medical training needs to be assessed as a compilation
to improving physician competency and performance in
of different types of knowledge, integrating experience,
practice, ultimately leading to better patient health.
practice and accurate scientific background. It encompasses all the learning experiences physicians
Continuous medical education encloses a system of
have with the conscious intention of habitually and
learning as an expression of intellectual creation. It is
persistently improving their proficiency. Education given
controlled institutionally and targeted at graduate
after graduation entails a higher educational challenge.
medical professionals in the following forms: courses,
At this stage, the physician should decide on his own
workshops, pre-congress courses, graduate seminars,
the most appropriate methodology and content for his
specialty conferences, scientific debates, diplomas and
or her learning either as a formal education course or
studies whose contents are supervised and scrutinized by
by selecting in detail the contents and dates through
highly trained professionals in a similar manner to peer-
continuing medical education.
review journals. Continuous medical educators must know and be able to use the literature, must derive practical and
Formal graduate education is focused on intellectual
effective results that create or improve learning systems
production. It has its own selective character and is
and must continue their own professional training. In the
nationally regulated and performed only by certain
past two decades, the concept of self-managing one’s
institutions. Nonformal graduate education, such as
knowledge has earned a special connotation in the
continuous medical education, has a nonselective profile
pedagogy field and the teaching-learning process.
and distinguishes itself by its flexibility and simple regulation. It is a clear and defined activity that supports
It has been demonstrated that continuous medical
the professional development of physicians and leads to
education formats differ in their impact in clinical practice
improved patient outcomes. Continuous medical education
and in health professionals’ decision-making. Particularly,
is a self-regulated manner to ensure clinical competence
those with higher impacts are those that use case-based
and it shapes the growth and development of physicians.
learning, small interactive learning groups, multifaceted
educational programs that combine different media and the programs that are longer than one session. Magisterial conferences and written materials by themselves do not produce any change in clinical practice because of the complexity of the changing process, and through these actions only consciousness for the need for change can be created. There are specific programs of continuous medical education and most have been institutionalized. In these, the progressive diffusion of new information and internet and communication technologies (ICTs), particularly
“
The aim of continuing medical education is to establish a link between health professionals and the fast-growing body of knowledge to gain the competences required for optimal clinical practice”
mobile ones, has had and is still having its effects. Training schemes based on e-learning and on technologyenhanced learning are increasingly widespread.
Effective healthcare requires continuous learning. According to Nancy Bennet and her collaborators
Internet-based continuous medical education has
in an article in the journal Academic Medicine, the
components that differ from traditional continuous
principles to build continuous medical education can be
medical education and can offer additional value for both
summarized as the following: act as a guide for physicians
providers and participants. An element that contributes
to understand their own learning needs to recognize
to this added value is internet usage and high coverage
opportunities and resources to match with needs to
of ICTs, which have grown remarkably in areas such
enhance proficiency and promote lifelong learning
as healthcare administration. This makes it possible to
skills; study the role of continuous medical education
take advantage of the increasing use of the internet and
to enhance physicians’ knowledge, performance, and
mobile devices for educational purposes.
healthcare results; design educational strategies based on research findings about how physicians learn and
A key element of ICTs is their ability to shorten distances,
endorse changes in their professional conduction.
benefitting physicians who practice in remote and isolated
These strategies should include standard and dynamic
areas. Additionally, this enhanced geographical coverage
formats that incorporate new technical capabilities for
implies the availability of programs beyond borders, but
synchronous and asynchronous learning; collaborate
needs can change across borders and programs must
with other continuous medical education educators to
adjust to the needs of every community, incorporating
maximize the ability of continuous medical education
elements such as language, culture and health-system
to satisfy the varied learning needs of physicians and
limitations, but keeping in mind scientific evidence.
healthcare systems; and grant that healthcare outcomes
Another advantage is cost, as traditional continuous
can be measured with clinical proficiency scales. For this
medical education entails expenses such as facility
endeavor it is crucial to broadcast information about
leasing, catering, stationery, audiovisual equipment,
healthcare innovation; and to increase the professional
transportation of staff and participants, while internet-
development of continuous medical educators, including
based continuous medical education can be organized
their understanding and use of theory and research to
based on content, making it a more affordable learning
provide effective support for appropriate changes in
alternative.
physicians’ knowledge, performance and healthcare outcomes.
The selection and design of the most relevant continuous medical education is based on data from each physician’s
Much of medicine’s contract with society is based on the
present professional responsibilities and performance.
integrity and appropriate use of scientific knowledge and
One source to define specific content criteria to maintain
technology. Physicians have a duty to uphold scientific
competency in a variety of specialties comes from new
standards, to promote research and to create new
efforts by professional societies. Evaluating continuous
knowledge and ensure its appropriate use. The profession
medical education in the context of performance
is responsible for the integrity of this knowledge, which
improvement is a logical and essential element in the
is based on scientific evidence and physician experience.
cycle of learning. Changes occurring in the field of
Sustaining knowledge and skills through continuous
continuous medical education demand new structures
medical education is a characteristic of medical
that direct thinking about the role of learning in each
professionalism; therefore, it must be considered as a
physician’s professional development.
right and duty of every graduate physician.
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An expert in stitches
VIEW FROM THE TOP
IT SOLUTIONS FOR THE WORKFORCE GABRIEL ALVARADO LATAM & Caribbean Vice President and General Manager of Kronos
Q: What percentage of your operations does health
ease the burden on their in-house IT departments. This
represent and what is your market share target?
provides organizations all the benefits of a workforce
A: Twenty-nine percent of Kronos’ business is within the
management solution without the challenges of planning
healthcare industry. Kronos’ development strategy is based
and implementing new technology.
on stakeholder input, market trends and customer needs. Stakeholders from the healthcare vertical with deep domain
Q: In which area is Kronos seeing the best return on
knowledge participate in associations and communicate
investment?
with customers daily to listen to recommendations for
A: Kronos’ corporate strategy is focused on three core
ongoing product improvements. By also monitoring
principles: cultivating continual innovation, building and
market trends, Kronos looks for innovations to drive
sustaining our own engaged workforce and fostering a
market leadership. Finally, our customers provide constant
customer-first approach in all that we do. By delivering
input and direction by submitting ideas to Kronos and by
innovative workforce solutions, Kronos helps all types
participating in various customer advisory boards.
of organizations strike that balance of individual and organizational needs.
Q: What potential does Kronos see for opportunities in health in Mexico and what strategy will it use to capitalize
Q: What internal and external factors are boosting the
on them?
workforce management industry as a whole?
A: Kronos can help and add value in any process within
A: Three of the most significant trends driving Kronos’ market
the continuum of care, whether they are health providers
are workforce solutions in the cloud. Deploying workforce
or workers, clinical specialists or medical devices and life
management and human capital management solutions in
sciences manufacturers. We are specialists in health and
the cloud provides a single source of data, simplifies software
life sciences organizations, so we add value to everything
delivery and helps organizations accelerate workforce goals.
and everyone that touches, or is around, patients. Our main
Cloud solutions unburden IT staff to focus on core business
focus and most important objective is patient care.
initiatives while the organization can be sure to leverage the latest version of the Kronos solution.More than any other time
Q: What added value can Kronos provide over other
in history, organizations are faced with enormous challenges
companies?
regarding risk mitigation and compliance management due
A: Kronos workforce management solutions provide best-
to labor regulations. Keeping up-to-date on new requirements
in-class functionality, automation, ease of use and seamless
and legislation is one part of the challenge, while accurately
integration for any sized organization in every industry.
tracking and maintaining compliance is the other. Kronos
More than 30,000 organizations use Kronos worldwide
provides solutions with workforce diversity in mind for
to maximize their workforce, maintain compliance and
workers of all generations, regardless if they are contractors,
improve employee engagement and productivity. In
part-timers, hourly or salaried, telecommuters or field workers.
addition, Kronos continues to invest approximately 10
Our software is powerful, scalable and flexible enough to
percent of gross revenue in R&D. This funding provides us
handle complex pay rules while providing employee self-
with the ability to continue advancing our solutions and
service and collaboration features to empower the workforce.
provide our customers with the most innovative solution. Q: What does Kronos look for when creating alliances and
Kronos is a US-based company that offers workforce
what added value do these provide?
management solutions for a variety of industries, including
A: Kronos partners with managed applications services and
distribution, manufacturing, entertainment, retail and media.
managed hosting-solutions providers to help organizations
It is present in over 100 countries
327
ROUNDTABLE
HOW CAN THE PRIVATE SECTOR PROMOTE A BETTER-EDUCATED WORKFORCE?
Training and academic growth are fundamental to overcome the current challenges in the health industry, as well as enhancing the competitiveness of Mexico in the international market. Collaborative initiatives between academia and the public and private sectors, the application of technology in learning and the integration of disciplines are some of the trends that several companies are pursuing to achieve better human capital. Mexico Health Review asked seven leaders from manufacturing, consulting, law and marketing companies working in the healthcare sector about their contributions to improving Mexican health talent.
Biotechnology and nanotechnology are two lines in which we are interested in stimulating research. The prize (CINVESTAV’s prize for innovation in bionanotechnology) was linked to pharmacology but it is now more open as it has enabled the creation of new materials. The invitation to participate is open to all the institutions and professionals working on those themes and the prize is MX$300,000 (US$16,666). Half of the award is to reward the researcher and the
328
EFRÉN CAMPO President and Executive Director of Grupo Neolpharma
other half is to fund the continuity of the winning project. The purpose of the prize is to create new talent, provide exposure and increase the diffusion of these kinds of scientific proposals. We are approaching 2016’s winning researcher to ask for his help capsulating some drugs we want to deliver to the limbic part of the brain.
We have well-established metrics. In hospitals, for example, we can measure infection rates and their reduction. This is hard data that can corroborate our progress. The same goes for hand hygiene. If people comply, infections are reduced. The same applies to food safety because we can prove there are no pathogens or food viruses on instruments. We signed an agreement with the foundation (Fundación Carlos Slim) to participate and collaborate in education through the healthcare academy,
FRANCISCO MORALES Director of 3M Healthcare
which is an umbrella for any kind of educational activity. We worked on this with the foundation and IBM. Students are eager to learn about new practices and new technologies and we struck an alliance with Del Valle Universty to provide these. Part of the university’s responsibility is to show students not only the history of their field but also what they will encounter on a daily basis in their practice.
Traditional education is unilateral and there is no debate between the receptor and the educator. The education model is changing. We introduced simple and innovative educating actions in which the teacher gives the students the main role in their education and learning. This model is what we call Teach to Learn (T2L). We designed our programs according to Dale’s Learning Cone, which says that 90 percent of what we learn can be retained when we teach it. We also looked at Maslow’s Pyramid,
NEIVI ORTIZ Director General of Grupo Saned Latin America
which shows that recognition is a main human need. We realize that people are looking for a cooperative learning environment that can be delivered virtually and for recognition of the content they produce. We also train doctors in affective and effective doctor-patient communication and have a health sciences agreement with Anáhuac University in which we develop content for programs.
In addition to our doctors educational center in Forida, we have one in Mexico and one in Brazil because we have the obligation to correctly train doctors to use our products. The courses are open to everyone, even those who do not use our products. Some courses are available online through Arthrex’s webpage, which puts over 4,000 videos online, and through our Surgeon’s Virtual App, which enables doctors to first practice digitally before moving onto dry labs. In our labs, we use imported cadaveric pieces from the US. Unfortunately, in Mexico the culture of organ donation is poor and if we have chance to use a Mexican cadaver, the law is clear, demanding the use of the full body. Can you imagine putting a full body on a table
NELSON VALENZUELA LATAM and Caribbean Director of Arthrex
just to practice on his knee?
We are a firm of more than 2,500 lawyers in 44 locations worldwide, which ensures a seamless communication across jurisdictions and shared experience and knowledge with practice leaders and healthcare regulators across the world. We are one team offering the same quality and client service standards. The lawyers also receive continued education and we share knowledge among our offices based on experience. We have access to the leader of each practice in case they want a peer review or if they need to know how a similar situation is dealt with in other places. Most other international firms have local offices and they are not coordinated. Several
329
JAVIER CORTÉS Counsel at Jones Day
of our global lawyers also have a degree in Life Sciences, providing comprehensive support to our clients.
The role of the pharmaceutical industry should transform from being just a seller to becoming a partner of the health system. We have different projects with different institutions, such as one with IMSS on MS. In nutrition, the Center for Diabetes Treatment (CAIPADI) has achieved 80 percent control of their diabetic patients, while an average institution has 20 percent control. When an institution applies a model and achieves outstanding results, we share that knowledge with other institutions. For example, we send professionals from other institutions such as PEMEX to spend time in the center to see how the model works and then we
ALEXIS SERLIN Director General of Novartis
help them apply the system in their institution.
We have formed solid commercial and academic alliances with various organizations across the globe to offer better solutions to our users in health, education and communication services. This has further improved our overall service quality by giving it a globally competitive edge. Our alliance with the New York-based organization Life Extension Advocacy Foundation has developed new and better ways of providing educational and informative content in Spanish, closing the gap for Spanish-speaking communities and enabling them to learn, engage and support other prominent organizations in the life sciences industry. We emphasize that education is a prime concern in improving healthcare in the modern world and it must be addressed correspondingly to be offered in an accessible and effective manner. We have established a coalition with the World Academy of Medical Sciences.
ALEJANDRO DE LA PARRA Director General of Astrum Salud
Flags on the American British Cowdray (ABC) Medical Center
DOING BUSINESS IN MEXICO
14
As an attractive market that offers access to North, Central and South America, the foreign interest in Mexico is sizeable. Many are making Mexico their strategic center of Latin American operations and they are settling in the local market with the help of consultancies. They face challenges such as the changes in COFEPRIS regulation, the security environment and navigating the fragmented healthcare system. But there are advantages to being located here. COFEPRIS is recognized by an increasing number of Central and South American countries and exporting to those countries is a tempting bonus. By manufacturing generic pharmaceuticals in the country, companies gain a more advantageous position in government tenders.
Mexico has a diverse and growing population, a strategic location and numerous trade agreements that make it ideal for doing business in the health sector. It has become a destination for manufacturers and research facilities, which allow legal advisers and consultants to become guides for foreign investors interested in expanding in the area. This chapter is dedicated to those companies that are opening the market to new opportunities and clearing the path for entrepreneurs. It offers valuable insight into doing business in Mexico through interviews, analyses and expert opinions on the healthcare industry.
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CHAPTER 14: DOING BUSINESS IN MEXICO 334
ANALYSIS: New Businesses, New Challenges
336
VIEW FROM THE TOP: Ignacio García-Téllez, KPMG
337
VIEW FROM THE TOP: Xavier Ordoñez, Deloitte
Horacio Peña, Deloitte
338
EXPERT OPINION: José Alarcón, PwC
340
VIEW FROM THE TOP: Ángel Ramírez, A3R
341
VIEW FROM THE TOP: Geraldine Rangel, Healthlinks
342
VIEW FROM THE TOP: Paul Doulton, Oriundo
344
VIEW FROM THE TOP: Carlos Rábago, Alliancesfa
345
VIEW FROM THE TOP: Christian López-Silva, Baker McKenzie
346
INSIGHT: Alejandro Luna, Olivares
347
VIEW FROM THE TOP: Ernesto Algaba, Hogan Lovells BSTL
Cecilia Stahlhut, Hogan Lovells BSTL
348
VIEW FROM THE TOP: Javier Cortés, Jones Day
349
VIEW FROM THE TOP: Rogelio de los Santos, Dalus Capital
350
VIEW FROM THE TOP: Eduardo García, Monterrey Ciudad de la Salud
351
VIEW FROM THE TOP: Mireya López, Pro Pharma Research
352
VIEW FROM THE TOP: Francisco Corpi, Elsevier
353
INSIGHT: Luisa Gutiérrez, Medisi
354
VIEW FROM THE TOP: Neivi Ortiz, Grupo Saned
355
ROUNDTABLE: How Open are Mexico’s Public and Private Health Sectors to Innovation?
333
ANALYSIS
NEW BUSINESSES, NEW CHALLENGES A diverse and growing population, a strategic location and
“The Mexican population is over 120 million and
numerous trade agreements with countries and regions
its purchasing power is growing. We are also a
around the world have made Mexico the ideal place to do
neighbor to the largest producer of medicines
business in the health sector
and patent-holders in the world while the medical devices manufacturing industry has
Not only is the country a destination for manufacturing and
grown enormously and is located close to the border. Mexico
research, it is among the favorite destinations for foreign
represents a great opportunity for foreign investment,” says
investment. According to the World Bank’s GDP Ranking for
Javier Cortés, Counsel at the international law firm Jones Day.
2016, Mexico is among the top 15 economies in the world. The numbers speak for themselves: between 2009 and
The events of late 2016 and the first half of 2017, however,
2015, foreign investment in the pharmaceutical market alone
have put investors on alert, with uncertainty coloring
was just shy of US$3 billion, according to ProMéxico and,
decision-making processes in spite of Mexico’s well-known
based on INEGI’S data, there are 770 entities specialized
advantages. The proximity of the next Mexican presidential
in the pharmaceutical sector, including 20 top international
elections in 2018, a weaker peso and the economic policies
pharmaceutical companies such as Merck, Pfizer, Janssen
proposed by US President Donald Trump are all worrying
and Novartis.
factors, says Geraldine Rangel, Director General of Healthlinks, a Mexican strategic consulting firm dedicated to helping foreign healthcare companies succeed in the
EASE OF DOING BUSINESS RANKING IN THE AMERICAS
334
Country
Mexican market.
Global ranking
Score
Still, overall, the positive outweigh the negatives. Early in
US
8
82
2017, Bayer concluded its €40 million investment in the
Canada
22
78.5
construction of a corporate site in Mexico City. Novartis is
Mexico
47
72
also executing a five-year US$50 million investment plan
Colombia
53
71
Peru
54
70
Chile
57
69.5
Costa Rica
62
68.5
Mexico offers unmatched business opportunities in Latin
Jamaica
67
67.5
America, as demonstrated by the World Bank’s Ease of
Panama
70
66
Doing Business Ranking 2017. Mexico ranks 47th globally but
Santa Lucia
86
63
is ranked first in Latin America. The ranking compares the
targeting clinical research and it is working on the creation in Mexico of a Center of Operations for Latin America, which will host a team of 1,000 associates.
regulatory environment for domestic firms in 190 countries and develops a score for each based on indicators such as
Source: Doing Business Report 2017, World Bank Group
EVOLUTION OF MEXICO’S GDP (US$ trillion) 1.5 1.403
1.4 1.3
1.262
1.325
1.298 1.251 1.183
1.2 1.143
1.124 1.064
1.1 1.0
0.9
2013
2014
2015
2016
2017
Sources: ProMéxico, INEGI, International Monetary Fund (estimated from 2017 onwards)
2018
2019
2020
2021
difficulty of starting a business, dealing with construction
Economista in April 2017 that investment in research and
permits, registering property, acquiring credit, protection
technology development rose to 0.60 percent in 2016 from
for minority investors, taxes, trading across borders and
0.43 percent in 2012, a jump of almost 40 percent. The
labor market regulation.
Ministry offers a fiscal credit applicable to the company’s income tax for 30 percent of its investment in technology
The internationalization of COFEPRIS is another advantage
and research, he wrote.
that has not gone unnoticed. The regulator is recognized by eight Latin American countries, in addition to having an agreement of homogenization with the US' FDA and with Health Canada. “COFEPRIS, our regulatory agency, focuses on providing registration protocols to make our country an attractive destination for clinical research. The agency has also simplified the registration process for new products
Mexico is first among Latin American countries in the World Bank's Ease of Doing Business Ranking 2017
and continues to seal recognition agreements that make Mexico even more attractive,” says Healthlinks’ Director
Despite the market changes over the last years, the positive
General, Geraldine Rangel. Its international recognition
incentives available in the Mexican healthcare market
also provides opportunities in the international market for
should continue attracting business opportunities for local
Mexican manufacturers, which usually export alkaloids, its
and transnational companies, helping them achieve their
derivates and other products containing antibiotics.
corporate goals and expanding the country’s growth.
COFEPRIS is also making several changes internally and
GLOBAL INNOVATION INDEX 2017
adopting new regulations such as the pharmacovigilance
Global ranking
LCN* Region Ranking
Chile
46
1
Costa Rica
53
2
Country
norm to increase patient safety and to optimize its service. Fortunately, the inclusion of authorized third parties has facilitated processes and alleviated COFEPRIS’ workload. Currently, there are 19 authorized third parties working in the health sector. “The creation of the authorized third-party system was a great decision. The government’s acceptance that its internal structure could not deal with the volume of demand was a good move,” says Carlos Pérez, Director General of NYCE. Business opportunities continue to arise in Mexico as the country prepares to transition from being a manufacturing
Mexico
58
3
Panama
63
4
Colombia
65
5
Uruguay
68
6
Brazil
69
7
Peru
70
8
Argentina
76
9
Dominican Republic
79
10
site to an innovation center, as demonstrated by its 58
th
place in the Global Innovation Index 2017. José Antonio Meade, Minister of Finance and Public Credit, wrote in El
* Latin America and the Caribbean Source: The Global Innovation Index 2017
MEXICAN PHARMACEUTICAL (US$ billion) MEXICAN EXPORTS IN THE EXPORTS PHARMACEUTICAL MARKET IN MILLION DOLLARS 2.0 1.855 1.776
1.75
1.742
1.675 1.592
1.5 1.359 1.25 1.180 1.0
2009
Source: ProMéxico
2010
2011
2012
2013
2014
2015
335
VIEW FROM THE TOP
FARMING DATA FOR BETTER WELLBEING IGNACIO GARCÍA-TÉLLEZ Director of Health of KPMG in Mexico
336
Q: NAFTA is facing a renegotiation. What would be the
Q: What are the main tax issues that concern clients?
potential impact for the health industry?
A: The OECD is pushing for tax systems to be more compatible
A: The origin of components is one of the main areas that will
and comparable to avoid risks or mismanagement of financial
be impacted. We can take the example of the medical devices
resources. That is the concern companies have: how to adapt
cluster in Tijuana. They import inputs, manufacture a product,
their financial statements to international standards. If, for
send it as a semi-finished product to the US, where it is
example, a bank lends money to a corporation but a local
packaged or undergoes a final process, and then is sold back
office writes their statements using different accounting
to Mexico as a final product. We may have to develop more
practices, it will be difficult to consolidate. One of the
inputs internally, bringing more value to the manufacturing
main reasons for international standards is consolidation,
process from as early as the R&D stage. This is something
comparability and transparency.
the government has strongly focused on and in April 2017 a new national consortium for innovation was established. This
Q: Why is data analytics important in healthcare and how is
is what places R&D on another level.
the information being used? A: Data analytics is important because every hospital, network
Q: How is KPMG advising clients in this respect, especially
and person is a source of information. Analytics is useful with
makers of medical devices?
electronic medical records for tracking a patient’s condition,
A: We advise them to diversify, to turn their focus to
for doctors to follow up on treatment schemes and for pharma
Central and South America and to discover what the
and medical devices companies to plan their production
needs of those markets are, as well as developing raw
and distribution in advance. It also plays a role in budgeting
materials. Those regions do not have a strong industrial
because the health sector plans its budget based on historical
platform so there are opportunities for Mexico to enter
calculations but epidemiology behaves erratically. Although
and meet the need for medical devices, medicine and for
controls are in place, it is difficult to predict how a disease will
hospital infrastructure because Mexico has a long tradition
develop in society or a given population.
of operating hospitals through PPPs. Q: Which companies or sectors is KPMG most interested in The main challenges for companies entering these markets
targeting?
will be to understand the market’s rules, especially as Latin
A: The most important organizations are pharmaceutical
Americans are traditionally nationalistic. It is more difficult
and medical devices companies, hospitals, pharmacies,
for Mexican companies to enter Argentina and Brazil, but
distributors and service integrators that buy inputs and sell
there may be areas for building synergies. Companies need
services to the healthcare sector, such as anesthesiology,
to pinpoint the business style of their target countries and
hemodynamics or interventionist procedures. Although some
figure out how to collaborate with them. The regional
believe they belong to the retail sector, their main focus is
respect and recognition of Mexican regulatory authorities
medicines and products geared toward wellbeing and they
is something we should take advantage of. Most Central
need a good distribution chain to allow affordable prices for
and South American countries recognize COFEPRIS as a
their clients. Thirty to 40 percent of visits to doctors in Mexico
relevant regulatory institution.
occur in offices located in pharmacies, so those are becoming important providers. Technology companies are not yet focusing on this segment because it is still developing. They
KPMG is one of the world’s largest consulting firms,
are beginning with simple things, such as blood pressure and
specializing in audit, tax, advisory services and industry
weight measurement, while the world is innovating around
insight across 21 industries, including healthcare and life
personalized medicine. We want to help take advantage of
sciences
global opportunities to address the needs of local patients.
VIEW FROM THE TOP
NEW RULES A CHALLENGE FOR BOTH PRIVATE, PUBLIC Xavier Ordoñez Partner in Strategy and Operations Consulting at Deloitte
Horacio Peña Senior Manager in Strategy and Operations Consulting at Deloitte
Q: What can Deloitte offer healthcare companies?
investments are consistent with their market intentions. Most
A: We offer help with regulatory compliance, like GMPs for
of these are national companies. Companies with top growth
medical devices and materials, and we manage regulations
levels have only one of these profiles. The companies we see
such as NOM-059 concerning drugs. We deal with topics
struggling are trying to do both simultaneously. During times
related to follow-ups for the use of drugs and medical device
of constraint the real challenge is to have a clear strategy
types 1, 2 and 3. Medical supplies must meet the quality
without trying to accomplish everything, because that creates
regulations of each company.
inconsistency.
Even though we manage this process, sometimes compliance
In Mexico, the public sector’s budget is large. It is concentrated
is not achieved because it is not just about meeting the
in IMSS and the different public institutions that require
authorities’ requirements but also regulations. Mexicans
medicine and it is distributed through tenders for which
must have control of the drugs from their production to
providers must comply with bioequivalence, quality, good
their consumption. This control must be present both in
manufacturing practices, exportation costs and other
distribution and along the supply chain. There are many
requirements related to transparency, ethics and legal topics.
biotechnological products in development, so the cold chain
We expect an increasingly better supply of medicine, devices
is important and requires great care. In September 2016, NOM-
and also services.
022 was published on pharmacovigilance. The law regulates products commercialized in the country and the demands
Q: How is innovation integrated into the Mexican healthcare
for compliance are very different from the former law. This
system and how open is the system to innovation?
represents a new challenge for the public and private health
A: Mexico needs to innovate more. We are in a different
sectors because active pharmacovigilance and tracking
Mexico. Before, we had family doctors, now we have
systems are required, with metrics presented as proof of use.
social security, Seguro Popular and medical consultancies in pharmacies, so we must strengthen health services
Q: How can you help clients adopt this new regulation?
through innovation and by guiding doctors, so they can
A: We can help them by checking their pharmacovigilance
approach the population with quality drugs. Instead of
programs and verifying how they work. We also advise on
filling the market with generic products, we should provide
communication with physicians because they are the first
more innovative products.
ones to be notified about these kinds of issue when patients tell them a drug made them ill. Unfortunately, patients in
At first glance, it could be said that Mexico does not
Mexico do not notify the authorities about these issues, even
innovate as much as other countries, but we have seen
though it is the only way to know what is being done right
interesting cases of health-related innovations by Mexican
to make it better and what is done wrong to improve on it.
entrepreneurs. With regard to innovation brought by transnational companies, perhaps more than openness
Q: How can companies deal with public sector budget cuts?
to innovation the issue is our speed in adopting it.
A: Considering there are growth opportunities in both the
Remember, over 10 years ago our country was a preferred
private and the public sector, for many companies the latter
territory for medical releases.
has been the main driver and with budget constraints there are many questions about how to continue growing. There are companies looking for and succeeding in finding growth
Deloitte is one of the world’s leading audit, consulting,
opportunities. Some are highly specialized and target their
tax, financial advisory and risk advisory brands, with about
investment to specific segments. There are also those
245,000 people at member firms in 150 countries and
that target large medical audiences so their portfolio and
territories
337
EXPERT OPINION
A YEAR OF UNCERTAINTY AND OPPORTUNITY JOSÉ ALARCÓN Lead Partner of Healthcare at PwC
Uncertainty and opportunity are the touchstones of 2017, in
with technology and collaboration between sectors is what
which health services are shifting to value-based healthcare,
we need to develop smart cities or, in the case of health,
a move from which there is no return. This has been a trend
clusters that gather clinics, academics and researchers.
for a long time and has already consolidated in the US.
There have been many initiatives for the development
Mexico is a little behind but is getting there.
of clusters in Mexico: Biometropolis, the health park in Cuernavaca called Ayana and Tecnopolo. However, these
On the side of risk, we have new geopolitical dynamics,
projects have been subject to political changes that put
but business and health go beyond this. PwC has identified
them on standby.
five megatrends: rapid urbanization, climate change 338
and resource scarcity, a shift in global economic power,
When talking about the shift of healthcare to value,
technological breakthroughs and demographic and social
there are three ways in which a company’s strategies are
change. These megatrends configure the reality we face
oriented: strategies to adapt for value, to innovate for
in a country where the middle class is the size of Peru’s
value and build for value. PwC has compiled an executive
population and almost twice that of Chile. This class is
report on the top US health issues of 2017 and there are
changing many views of the health sector and asking
six that translate to Mexico.
for more value. The megatrends themselves overlap; for example, putting together technological advances with
Patients are increasingly open to sharing their information
the lack of resources in the city are empowering ideas like
with the pharmaceutical industry on how they feel after
Uber, Airbnb or services that provide care at home. There
taking certain medicines. In Mexico, we need to personalize
are also 2,500 private businesses practicing a new model
pharmaceutical care through programs of patient
of integrating a doctor inside the company, a new market
engagement for treatment adhesion. There are some
that has been captured by companies like Previta. Also,
initiatives already operating such as Pfizer Conmigo (Pfizer
there are websites such as Curely and Doctorondemand on
With Me) or Abrace a la Vida (Hug Life) from Abbott, which
which many Mexican doctors offer their services. This fusion
must evolve to achieve their full potential. For example, PwC
EIGHT TECHNOLOGIES WITH GREAT POTENTIAL TO DISRUPT THE US HEALTH INDUSTRY OVER THE NEXT DECADE Technology
Areas of potential impact
Artificial inteligence (AI)
Digitalized supply chain, efficient billing, accelerated R&D
Augmented reality (AR)
Fitness and wellness gaming apps, guided tours of grocery aisles, surgical guidance
Blockchain
Consumer identity management, fraud prevention, personal health data protection
Drones
Digitalized supply chain, delivery of healthcare goods to consumers, emergency and disaster response
Internet of Things (IoT)
Inventory control, care coordination, remote patient monitoring, digital supply chain, digitized operations
Robots
Digital supply chain, remote patient monitoring and care, digital behavioral health services
Virtual reality (VR)
Patient distraction, stress relief, medical school education tools consumer and clinician training, scenario planning
3D printing
Customized implants, prosthetics and transplants, distributed supply chain, on-demand inventory
Source: PwC
has developed Bodylogical, a group of algorithms that, when given information on a patient’s vital signs and
THE EVOLUTION OF PUBLIC AND PRIVATE EXPENDITURE PER CAPITA (US$ thousands)
a specific set of diseases.
2006
habits, will predict what the patient will suffer from within
pharmaceuticals, medical devices companies and patient associations to create a model guaranteeing patients are
2007
There should be alliances between insurance companies,
COFEPRIS requesting that when registering a medicine, pharma companies register a patient engagement
2008
taken care of. In the future, we should see changes such as
Another important aspect is the security of patient
2009
program too.
has developed a program to assist patients with cancer by
2010
information. There is a company in Mexico called SOHIN that
This is the type of integrated model we need in Mexico.
2011
giving them advice and liaising with insurance companies.
devoted to detecting infectious diseases like H1N1 and zika. The current test for zika takes two to three days to provide
2012
An element to consider is the new force of innovation
339
four hours. There is also a wave of new medicines designed to counteract antimicrobial resistance and others improving diagnosis.
2014
currently undergoing registration with COFEPRIS, takes only
2013
a result, whereas a new test created by In Bios International,
a project called SINBA carried out by the Department of
2015
In addition, the Ministry of Communications is sponsoring Health Information (DGIS) of the Ministry of Health. It is a platform that will help improve epidemiological surveillance of the country and will eventually link all relevant information from the day we are born. So far, SINBA has released an app that locates the closest health center.
2
Mexico United States France
4
6
8
10
Turkey Public spending
Source: OECD
Many programs in Mexico focus on nutrition and wellness, such as PrevenIMSS and PrevenISSSTE, and the National
purchases because there are four national players and
System Against Obesity spends MX$80 billion (US$4.4
around 16 regional ones. The question is: why not integrate a
billion) every year. We have to continue working on
fifth player through national credits and in this way increase
education because there are no short-term solutions. In
competition? Another important topic is collaboration. The
our survey in the US, consumers were asked from whom
best example in Mexico is the PPP model. However, the
they would be willing to take nutritional information and
situation is sad because many projects have been suspended,
79 percent chose their family doctor over their pharmacy,
such as Bahia de Banderas, Tabasco and Mazatlan. We need
gym, employer, grocery store and big box store. More follow-
from our authorities what we call the 4 Cs: communication,
ups after yearly checkups are needed and we should try
collaboration, compassion and compromise. Politicians are
more popular models. The University of Texas launched an
lacking compassion for citizens by blocking PPP projects,
experiment with hospitals in which community members
while certain hospitals are overwhelmed by demand.
could subscribe to a nutrition program for free. First, they were tested for diabetes or potential diabetes and then were given a work-out plan and medicine if needed. This
PricewaterhouseCoopers (PwC) is a UK-based advisory, audit,
could be implemented here. On the strategic sourcing side,
tax and financial services firm that aims to build trust in society
decision-makers from IMSS ask themselves if they should
and solve important problems. With a global presence, it is one
buy from regional or national distributors in consolidated
of the biggest firms of its kind
VIEW FROM THE TOP
OPENING OPPORTUNITIES FOR MEXICAN ENTREPRENEURS Ă NGEL RAMĂ?REZ Director General of A3R
340
Q: What is the profile of the healthcare companies you
ideas, great talent and good sales strategies, but they
work with?
lack strategic planning. Many of the initiatives get lost or
A: They usually are distributors of pharmaceutical or
into trouble because the entrepreneur forgot to establish
medical devices that sell to the government through tender
something as simple as a business model. There are simple
processes. We look for small-medium companies that
examples of mistaken decisions, like not including a salary
have around MX$50 million to MX$300 million (US$2.7
for the founder because he believes the idea must grow
million to US$16.6 million) in sales annually. Preparing their
first. Many entrepreneurs are not creating a thoughtful
tender participation is a challenge for them because the
plan and they are spending a lot of money and time
difficulty of the tenders is not in the technical and quality
solving problems they could have prevented with better
requirements but in the correct submission of the documents
organization. We try to provide all the necessary resources
the government requires. We also like to work with creative
because we believe that one should work for the best, but
companies. However, companies with good ideas sometimes
be prepared for the worst.
lose a lot of money because the documentation they submit is incorrect. That is why our expertise in preparing and
Q: How can a Mexican consultancy like A3R help
reviewing documents for purchase processes saves our
international companies to expand here?
clients working hours and reassures them that the project
A: Our company can facilitate and make the start of
they are presenting is competitive.
operations more efficient for foreign companies because foreign business people are often concerned with why
Q: What changes have the tender processes produced
some formalities are so complicated in Mexico. I try to
in the market?
explain to them that Mexico has a huge money-laundering
A: The public Mexican health market is dominated by a few
problem and the authorities have put many security
companies. This is a result of the tender rules, which state that
measures and control mechanisms in place that do not
only those who have already won a tender can participate in
exist anywhere else. As a former government functionary,
the next auction, instead of allowing new players in that could
I must recognize that the authorities often establish
break the monopoly. However, if a medium-sized company
a measure for a problem caused by 3 percent of the
wants to provide a product but is not immediately capable
companies and the remaining 97 percent are also affected
of supplying the massive amounts the government needs it
by those measures.
is completely left out of the auction. By breaking down the volumes into more manageable sizes, competition would be
Q: What value do your clients receive by working with
increased and the government could begin working with other
a local and not an international firm?
companies that may be able to further improve service.
A: Each of our clients is served by one of our partners. This is our added value but we recognize that this limits us in a
Q: What are the main obstacles to success for healthcare
way because there are only four of us and we cannot deal
entrepreneurs in Mexico?
with many clients at the same time. We do not go after big
A: The main healthcare sector problem is that entrepreneurs
companies because they have expertise and a complex
do not use the information available. They have great
internal structure. Entrepreneurs place more trust in us and give us the space to participate when they face new challenges and opportunities. We are not interested in having a base of
corporate
200 clients. Instead, we have been growing by guaranteeing
negotiations, financing and administration. It helps companies
our clients good service and a long-term relationship. That is
to restructure and optimize their operational, administrative
why we do not compete on prices. We compete on quality,
and technological strategies
which is one of the hardest things to do in the service market.
A3R
is
a
Mexican
consultancy
focused
on
VIEW FROM THE TOP
LEARN THE LANDSCAPE BEFORE ARRIVAL GERALDINE RANGEL Director General of Healthlinks
Q: What service does Healthlinks provide to companies
in acquisitions will hire specialized investigators to avoid
looking to do business here?
purchasing businesses associated with money laundering.
A: We offer a service called Pre-Start Up Program through which we evaluate how well a company will perform in the
Q: What regulation has the most impact on incoming
Mexican market. Healthlinks ensures the company complies
companies?
with regulatory requirements before starting operations
A: The elimination of a plant requirement had a huge impact
here and we study its product and predict its potential
on incoming businesses. Also, the recognition of regulatory
success, providing the company with relevant information
agencies such as the FDA and Health Canada helped as
to understand market dynamics and avoid the unnecessary
well. Finally, speeding up processes through authorized
risk of potential failure. One goal is to provide managers
third parties helped make regulatory procedures more
and staff a view of what they will face when they get to
efficient and thus increased the attractiveness of Mexico as
Mexico. Seven out of 10 companies that come to Mexico fail
an investment destination for health.
in their first years because no one helped them build the right strategy. Our mission is to inform companies about
Q: Why has the clinical trial business failed to grow
the challenges they will face and to help them succeed
significantly in Mexico, considering local opportunities?
from the beginning. Around 40 percent of our clients do
A: In Latin America, Argentina hosts the most clinical studies
not have the complete documentation or decide to first
because Mexico never exploited its potential. But things
start operations through a distribution partner before
are changing. Even our Ministry of Economy recognizes
establishing their own subsidiary.
that clinical studies could attract the investors our country needs. We have the centers, the patients and COFEPRIS
Q: How do foreign companies view the Mexican market and
is simplifying procedures so I do not believe that other
its potential?
countries offer more benefits. The problem is that Mexico
A: Mexico is seen as an attractive market with particular
does not promote itself enough. Mexico is becoming an
and positive business conditions that are not easy to find
appealing country for clinical research and we hope the next
in Latin America or other countries in the world. One plus
administration will also work toward this objective.
is COFEPRIS, our regulatory agency, which is focused on facilitating registration protocols to make our country an
Q: What are Healthlinksâ&#x20AC;&#x2122; expansion plans?
attractive destination for clinical research. The agency has
A: Our plan is to boost the human capital in our regulatory
also simplified the registration process for new products and
and medical marketing team, where we have also successfully
continues to strike recognition agreements that make our
added new technologies to deliver our services. We will
country even more attractive. On the downside, potential
encourage international expansion through workshops held
investors will face some uncertainty in 2017 and 2018 given
abroad on the Mexican market and its opportunities, and we
the Mexican elections, peso instability and the restlessness
will also share our knowledge through webinars. Considering
caused by US economic policies that will have a direct
the political and economic environments, we expect
impact on our economy.
companies to carefully evaluate their Mexican investment potential and we will be there to guide them.
Q: How is security weighing on the investing decisions of foreign companies? A: Delinquency and corruption endanger Mexicoâ&#x20AC;&#x2122;s popularity.
Healthlinks is a Mexican strategic consulting firm dedicated to
Many companies have been affected by robberies or have
helping foreign healthcare companies succeed in the Mexican
faced bribery demands from drug traffickers, especially
market. It focuses on medicine, cosmetics, food and nutritional
manufacturing sites in Morelos. Some companies interested
supplements and medical devices
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VIEW FROM THE TOP
CHANGE BEHAVIOR TO BRING DOWN HEALTH SPEND PAUL DOULTON Founder & Managing Partner of Oriundo
342
Q: How does Oriundo operate and what advantages does
Q: When looking at Mexicoâ&#x20AC;&#x2122;s health sector, what impact
it provide?
would a medical savings-plan model have?
A: Oriundoâ&#x20AC;&#x2122;s strength is its local knowledge, so we
A: Mexico has a similar structure for pension plans, so-called
recruited independent consultants and specialists in
AFOREs, in which there are individual savings accounts.
their markets: Argentina, Chile, Colombia, Peru and Brazil.
Applying that to the health system would pass the locus
We are all independent operators, which is a different
of control to the patient to change his behavior. The plan
structure from other consultancies. Other firms offer
builds up savings that can be passed onto children, just
similar services in Mexico, but we are the only one that
like a pension plan, which reinforces good behavior and
covers Latin America. We have also been doing it for
eliminates the perverse incentives that exist in the system.
much longer and some of our associates were previously
IMSS and ISSSTE have the required technology in the
clients. Market entry strategies for new players into the
form of AFOREs, which would be applied to healthcare. A
region have been our foremost activity.
single payer, which is what could happen with the Seguro Popular, would be even easier. Behavioral change is the key
Q: Which countries or regions will Oriundo reach out
to reducing the colossal burden of obesity and diabetes,
to next?
the leading cause of disease and healthcare spending, so a
A: We had someone working in Central America but that
plan that engages the patient, guided by his family doctor,
position is currently open, so we should put someone
and motivates a positive change of lifestyle habits would
there. We believe that targeted search is the way
be the most logical and affordable solution. There is no
forward, helping our clients renew their portfolios. We
better way to get better health for less spending. Medical
can access new and hard-to-find R&D and bring it to Latin
technology advances are a big help but lifestyle changes
America. Through our associates in Europe, we learned
show a better long-term ROI.
that the University of Barcelona had discovered a new process that employed nanotechnology to overcome
Q: To what extent would the unification of the various
problems related to skin and aging. The university has
health institutes be a necessary first step?
a development laboratory but no commercial activity,
A: It would not be necessary because if the patient decides
so we brought the technology to Mexico for a Mexican
on where best to spend his money, competition would
partner and the technology is doing very well. In Madrid,
decide where he goes. This medical savings plan would
we discovered another therapy related to derma.
be a single fund managed by the patient who is advised by his doctor. One of the biggest problems with the IMSS
Q: To what extent are Mexican universities producing
and ISSSTE is that they are payers and providers, so the
possible opportunities?
money does not flow to the most efficient provider. There
A: We have been working on a big project for a
is no bigger perverse incentive than the payer and provider
Mexican laboratory that is very small but has important
being the same.
nanotechnology used to prevent nosocomial infections. This has to be done on a global basis. There are patents
Q: How viable is the prospect for change in Mexicoâ&#x20AC;&#x2122;s
registered and the UK was the first to issue. However, this
healthcare system?
is an exception. There is no reason why Mexican universities
A: Healthcare leaders say that the aging population, obesity
should not be thinking along these lines. The universities
and diabetes are making it difficult for the public sector to
of Nottingham and Manchester, for example, have a person
cover health costs. In Mexico, unlike European countries,
or department devoted to building on this technology, on
healthcare is not a vote-getter because it is low on the
how to capitalize on it. In fact, the people working on this
political agenda. Hardly a single politician in Mexico will run
in the UK are mostly Mexican.
on a healthcare platform unless they are talking about free
healthcare for everyone, a promise that would be difficult to keep. What is different is the person of Mikel Arriola, Director General of the IMSS, who is a great paradigm buster. Alongside Minister Narro, he is probably the only one that could bring about change. Q: COFEPRIS is recognized outside Mexico. How much of an advantage does this present? A: This is a positive step. Mexico is ahead in terms of recognition, not just by Latin America but also by the WHO, the FDA, the EMA and others. Mexico is also the
“
These doctors in pharmacies, around 25,000 of them, have been a great revolution. They are well-trained and they write as many prescriptions as the IMSS does, which represents savings for the public institutions”
only country in Latin America in which generics meet global standards, giving it a huge competitive edge. Mexico is the
The monopsony has been broken and the Mexican market
best beachhead for Latin America, from a technology and
is becoming a much healthier market.
regulatory standpoint and the harmonization of regulations with other countries has been occurring slowly over the
Q: What is your advice for clients that compete against
past 30-40 years. Things take time because there are vested
these private labels?
interests but Mexico has the best regulatory environment
A: Most pharmaceutical manufacturers have moved this way
and it is recognized all down the Pacific Coast. Even
and those supplying to pharmacies have cut out wholesalers,
Argentina is considering recognizing COFEPRIS.
which is why prices are lower. Pharmaceutical manufacturers that want doctors in pharmacies to prescribe their products
Q: Many Indian generics companies have entered Mexico.
need to make sure they sell to that chain. Some will exclude
What is the key to succeeding here?
you and there are special distributors to help you get into
A: India has been trying to enter the Latin American market
independent pharmacies. It means re-orientating the
for a while, but it took about a decade to understand that
business model, not implementing new technology. The
a price-cutting basis for competition does not work here.
doc-in-a-box model is important to underline. It is generally
To have a competitive advantage in the generics business,
criticized but it has been a wonderful thing. In the past,
you must be able to respond to rapid shifts in demand
patients would go to a pharmacy and self-diagnose, buying
and IMSS has decentralized buying. Indian companies have
products that had worked in the past. Now, the patient can
changed their model and are entering the market with
go see a doctor for MX$30 (US$1.6) or even for free and
differentiated products. Those that are making it here are
receive a diagnosis and the right medicine for that condition.
those developing supergenerics or that have products from
In the pharmacy chain next door, he buys the medicine.
their own research. Outsiders, no matter their country of
These doctors in pharmacies, around 25,000 of them, have
origin, cannot enter the market on the basis of price alone.
been a great revolution. They are well-trained and they write
Those with no local presence, no understanding of the local
as many prescriptions as the IMSS does, which represents
market and no local production will not make it because
savings for the public institutions. Previously, Mexico was an
Mexico has generics that meet global standards.
unusual market in that it had products that had been on the market for over 50 years, which patients bought because
Q: How are the Big Pharma companies competing with this
they had done so in the past and did not want to pay for a
influx of high-quality generics?
prescription. These old-faithful brands are on the decline.
A: Generally speaking, global players try to differentiate on the basis of their R&D portfolio, competing for new
Q: To what extent does this happen in other countries?
therapeutic areas and doing it better than others. One
A: It is not unique to Mexico, although the country still
thing to bear in mind is how the market dynamic has
has the highest rate of out-of-pocket expenditure. India is
been impacted by the supermarket and pharmacy chains.
the only other country that sees such high rates. In Brazil,
The fastest growing sector in Mexico is the private-label
there is now a large pharmacy chain that is emerging but
business, of which the largest manufacturer worldwide
Argentina is much more fragmented. The major shifts in
is Perrigo. That, combined with the trend of having
Latin America have been on the basis of intermediaries.
doctors’ consultancies in pharmacies, so-called “doc-ina-box” programs, are the factors boosting the privatelabel sector. Given these factors, companies must have
Oriundo is a consultancy composed of former CEOs that helps
local operations to be able to negotiate and respond.
new entrants to Latin American pharmaceutical markets. It has
All this is very healthy and is bringing down the Mexican
four main business lines: market entry, portfolio rejuvenation,
wholesalers that dominated the market for so many years.
acquisition and divestment and turnaround
343
VIEW FROM THE TOP
CRM, THE STRATEGIC ALLY FOR MEASURING SUCCESS CARLOS RÁBAGO CEO of Alliancesfa
Q: Alliancesfa offers sales force solutions for the
visit. Our system eliminates the applications that are not
pharmaceutical industry. What are your main products?
useful for a developing market and adds those that help
A: We are focused exclusively on the pharmaceutical
simplify the local model’s operation and make it faster. Our
industry in Mexico and Latin America. Our main product is
integrated audit information and geolocation applications
a Customer Relationship Manager (CRM) with and without
enable a company to know where representatives are and
real-time geolocation but we also offer e-learning programs,
to keep track of who is working and who is not.
visual aids, business intelligence and data validation. We are
344
working on replicating in veterinary care, oral health and
Q: How would you evaluate the current state of the Mexican
medical devices what we have done in pharma.
pharmaceutical market? A: Every market is linked to the population. The Mexican
Q: What benefits does CRM provide the Mexican and Latin
market is covered in terms of product necessity and
American pharmaceutical industry?
common diseases. However, there is an increase in the
A: An adequate program will make operations more formal
number of players. Demand is also dispersed because
and efficient. Companies should know the doctors who are
pharma companies sell similar products. We could generate
prescribing their products, where those doctors are located
more savings and improve profitability through more
and everything that must be considered in direct marketing. If
precise software and a better recruiting process. As a
pharmaceutical companies know this, they can develop better
country and as an industry we should recognize that digital
communication and management of their sales because a
transformation is not optional, it is a requirement.
company cannot control what it does not measure. Q: What added value does Alliancesfa bring to the Q: How can Kangaroo, your CRM software, make a
pharmaceutical industry?
difference for clients?
A: We provide customized solutions. We are inviting our
A: Kangaroo is the current generation of our software.
clients to integrate their sales force to the evaluation process
Its objective is to help companies advance in a faster
and, besides providing the software, we are involved in the
and simpler way. The product was developed in Mexico
whole process. We act as consultants to orient our clients on
and is updated along with Android and iOS and we are
how to achieve better practices and policies for the medical
also evaluating the possibility of making it available for
visit and we perform frequent updates to the system
Windows. Kangaroo is operating version 2.5, but version
based on client needs. Client requests are evaluated by a
3.0 will be launched by the end of 2017. We apply the same
committee and accepted changes are offered to all clients.
international standards as any other provider in terms of
We are a trustworthy provider and we are committed to
data centers, development and management and we use
working with those customers who resist change to make
Structure Query Language (SQL) to manage our database
sure they easily adapt to the CRM. We assure our clients
and Microsoft for software development. However, unlike
that we will help them reach their objectives.
other software, our applications are specially designed for Latin America. In Mexico, sales representatives are assigned
Q: What are Alliancesfa’s growth expectations, both in the
a territory or a route and a list of physicians they have to
short and long terms? A: By 2018 we want to double the number of users we administer today and by 2020 double that number again.
Alliancesfa is a solutions provider for sales and marketing in
From 2020 onward, we want to grow in the sectors we are
the pharmaceutical industry and niche companies. It provides
integrating this year, veterinary care, medical devices and
solutions such as customer relationship management for loyalty
oral health, and replicate the value we have provided to the
programs and automatization of sales forces
pharmaceutical industry.
VIEW FROM THE TOP
GLOBAL VIEW, DIGITAL RESOURCES FOR NEW CHALLENGES CHRISTIAN LÓPEZ-SILVA Partner and Head of Healthcare & Life Sciences at Baker McKenzie
Q: How is Baker McKenzie helping clients overcome new
The main lesson is that health regulation is not harmonized
challenges in the Mexican market?
at the international level, as every country has different rules.
Being a global law firm enables us to quickly identify major
There is not a body of international treaties on health law.
industry trends, giving us the opportunity to dedicate
That is why the negotiation of certain international trade
resources to create quite early high-value projects, such as
treaties has attracted so much interest. First the Pacific
our digital health initiative, where we integrate key areas
Alliance (PA) and then the Trans-Pacific Partnership (TPP)
of legal service such as health regulation, information
pioneered an international law approach where health law
technology and privacy law.
was incorporated into the disciplines of international trade law. This represents a new avenue to pursue what is now
We have also embraced technology and have developed
being called regulatory convergence and may constitute
useful mobile apps for our clients, such as our Global
the new way to approximate the regulatory frameworks of
Healthcare MapApp and our Global Antitrust Dawn Raid
different jurisdictions. Of course, this normative development
App. The MapApp is a mobile application that provides
was impacted by certain decisions of geopolitical impact
access to real-time information on the laws and regulations
such as the withdrawal of the US from the TPP. However, the
impacting the healthcare industry in more than 40 countries.
approach is likely to remain for future negotiations. It will also
MapApp also provides users with the contact details of
depend on the success of the PA in this regard.
Baker McKenzie’s healthcare specialists, which makes it an invaluable tool for healthcare companies that need quick
Q: What are the main legal challenges faced by foreign
access to information. Dawn Raid provides clients across
companies looking to invest in health in Mexico?
44 countries that are experiencing a raid with real-time
A: One of the main challenges would be to navigate the
step-by-step guidance on their rights and obligations, as
rules for holding regulatory approvals. This aspect varies for
well as instant access to Baker McKenzie’s antitrust lawyers.
different products and creates constant misunderstandings
The app is a cutting-edge platform that provides practical
among advisers not familiarized with health regulations. This
assistance and peace of mind for individuals on the ground
has a great impact on M&A transactions. The best practice is
handling unannounced inspections. It answers a range of
to include in full the regulatory component within the scope
practical questions on a country by country basis under
of the supported transaction, from the initial due diligence
local law. The Antitrust Commission in Mexico has increased
process to the planning process and its implementation.
its activities and oversight of the healthcare markets with several ongoing investigations and the adoption of the first
Q: What regulatory challenges will most impact the industry
criminal action in the country.
in 2017/2018 and how? A: Developments are expected in the areas of access to
Q: Many regulatory agencies speak of homogenization of
public formularies, prescription-review mechanisms in public
Mexican law and regulations with US and EU laws. To what
institutions, transparency on interactions with healthcare
extent is this possible?
professionals, digital, personalized medicine and biotech
A: We have a lot of experience comparing different regulatory
products. At the same time, we have seen increased oversight
frameworks. For instance, we were commissioned to conduct
of the industry from the tax and antitrust authorities.
a broad study comparing the health regulation for medicines in the EU and in Mexico. This was funded by the European Commission and formally delivered to COFEPRIS. However, on
Baker McKenzie is a global law firm operating in automotive,
a regular basis we also prepare webinars comparing regulation
consumer goods & retail, energy, mining & infrastructure,
in different jurisdictions using our experts from different
financial institutions, healthcare, tourism, private equity, real
regions and multijurisdictional surveys on specific topics.
estate and technology and media & communications
345
INSIGHT
PROGRESS STILL TO BE MADE IN DATA PACKAGE EXCLUSIVITY ALEJANDRO LUNA Partner and Life Sciences Co-Chair at Olivares
Intellectual property is preciously guarded in all sectors
which COFEPRIS checks before registering a new patent
and countries due to its high intangible value and as a
to ensure one does not already exist. In addition, the
result, patent litigation is prevalent. According to PwC,
registrant must swear under oath that to their knowledge
four of the 10 largest initial adjudicated damages awards
there is no other existing patent. Before this regulation
globally between 1996 and 2015 were in the health sector.
came into effect, there were 20 compound molecules
NAFTA partners the US and Canada have beefed up their
under litigation. Now, there are none,” says Luna,
regulations and law firm Olivares says Mexico also needs
adding that new formulations are the most commonly
to step up when it comes to data package exclusivity.
disputed. “The easiest way to fight an unlawful marketing authorization is to have it nullified, rather than filing an
346
Olivares, a Mexico-based leader in intellectual property law,
infringement lawsuit before IMPI, which can take years
presented evidence to the regulating authorities for data
to reach a decision. By having a patent published in the
package exclusivity to be changed, namely to mirror the
linkage regulation it should prevent or nullify marketing
rulings in other NAFTA countries. Whereas in the US and
authorizations in violation of patents.”
in Canada certain pharmaceutical products are protected for five years and new formulations and new indications
Counterfeiting is often seen as a major problem in pharma.
are protected for three years, biologics and orphan drugs
According to the US-based Pharmaceutical Security
are granted 12 years of protection. “In Mexico, there is only
Institute, in 2015, there were 3,002 incidences globally
an incipient and weak protection for five years, granted
of counterfeit medicine involving 1,095 pharmaceutical
through an internal COFEPRIS paper that would have
products. In Mexico, El Universal reports that between
difficulty standing up in a court of law. Data package
Jan. 1, 2007 and Dec. 31, 2015 the Attorney General’s
exclusivity terms remain at five years for biologics and
Office seized 945,152 fake medicines, just under 942,000
orphan drugs. This is not satisfactory,” says Alejandro Luna,
of which were confiscated in Mexico City. The Attorney
Partner and Life Sciences Co-Chair at Olivares.
General has been granted stronger powers in Mexico to pursue action against counterfeits without the prior
The firm has presented evidence to the regulating authorities
authorization of the title holder, yet Luna believes that
showing that these drugs require over 12 years of R&D and
the most efficient course of action to reign in counterfeit
therefore should be granted longer exclusivity periods.
medicine in Mexico would be to confiscate them at the borders. “Under current law, products cannot be seized
“Most patent litigations occur in pharma because of the
because they are considered in transit between countries.
rise of generics. This began around 20 years ago and
If this is changed, it would be much more difficult for
there is little case law to rely on because most cases were
counterfeit products to make their way into the Mexican
either settled or are still ongoing,” explains Luna, who is
market,” he adds.
negotiating on behalf of AMIIF in international free trade agreements. He is lobbying for a change in Mexican law
To protect against counterfeiting, filing a patent is a
in data package exclusivity and in patentability. He was
necessary step. However, many are unaware of intellectual
previously negotiating for the TPP, and should NAFTA
property procedures in life sciences, including in the highly
renegotiations go ahead, would look to represent the
patented pharma sector. Luna says this happens most
pharmaceutical industry.
often with researchers and universities. “Because they are often required to publish papers, they do so without
In 2003, linkage regulations came into effect in Mexico to
knowing the intellectual property ramifications. Once
avoid these disputes. “The Mexican Institute of Industrial
a paper is published, the knowledge it contains can no
Property (IMPI) publishes patent registrations in its journal,
longer be protected by IP law, which many are unaware of.”
VIEW FROM THE TOP
TPP TO AFFECT IP REGULATION
Ernesto Algaba Partner of the Life Sciences Practice at Hogan Lovells BSTL
Cecilia Stahlhut Senior Associate of the Life Sciences Practice at Hogan Lovells BSTL
Q: To what extent have regulations been homogenized
EA: Companies are challenging and requesting that their
with those of the FDA or EMA?
patent rights are properly guaranteed by the law during
EA: Mexico has become an attractive investment
the timeframes granted. On one side of the coin are the
destination for the pharmaceutical and health industry.
rights and warranties needed while on the flip side, those
Several factors have contributed to this interest in our
are precisely the challenges companies will face and
country, including the successful harmonization and
they will request their rights and warranties are properly
cooperation of COFEPRIS with other leading health
respected. A common desire is that the linkage system
agencies, such as the FDA. In 2011, the Ministry of Health
between COFEPRIS and the Mexican patent office turns
implemented through COFEPRIS a special program
into an efficient tool, providing the proper security for the
known as the Agreement for the Promotion of Innovation,
exclusivity rights encompassing patent rights and product
intended to expand the availability of innovative medicines
marketing authorizations.
to Mexican patients and strengthen the competitiveness of the market. Furthermore, it aimed to permit recognition
Q: What will be the biggest regulatory issues in the
of drug authorizations issued by other agencies for
next five years?
the marketing of new molecules. As a result of the
CS: Regulations improving biotechnology and high-tech
implementation of the program, COFEPRIS has signed
and innovative products will be an issue. I would expect
agreements with regulatory agencies from Australia,
improvements to the legal framework for high technology
the US, Canada, the EU and Switzerland. Through these
in medical devices, which is difficult as the sector develops
agreements, COFEPRIS can recognize and validate
quickly. Personalized medicine is an important issue we will
marketing authorizations of health inputs that are not
also see over the next few years. I think the cosmetic sector
yet marketed in Mexico and that have been issued in the
will see changes given rapid technological advances
partner countries, recognize GMP certificates of other countries and work with other agencies to evaluate new
EA: Equivalence agreements and recognition of foreign
products before authorization is granted.
product authorizations for faster pathways will provide the Mexican population with more alternatives. There should be
Q: What regulatory challenges do incoming foreign
homogenization through amendments to legal provisions,
companies face?
following the global trend of expanding markets. Product
EA: The main challenge facing companies is legal certainty
innovation will be a driver for regulatory change to ensure
that the government and the regulatory pathway provides
they are safe and efficient. Also important is the potential
guarantees and ensures certainty with respect to their
implementation of the TPP in Mexico, assuming that this
submissions and assurance that authorizations are secure.
treaty enters into force. The TPP proposes at least 10 years of protection from the date of marketing approval
CS: They must also be reassured regarding time frames
for undisclosed tests and other data concerning the safety
and requirements because there are many permits and
and efficacy of chemical agricultural products. Biologics are
authorizations needed. We need to be more focused on
granted an eight-year term of protection from the date of
compliance with regulation rather than with paperwork
first marketing approval.
and filings. Also, an important challenge is the difficulty of placing the new high-tech and innovative products within the regulatory framework. Our regulation is many
Hogan Lovells BSTL is the Mexican branch of the international
steps behind new technology, which has resulted in
law firm present in 25 countries with over 2,500 lawyers. It
certain companies and products facing adversity when
operates in areas as diverse as aerospace, energy, finance,
complying with requirements.
infrastructure, life sciences and real estate
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VIEW FROM THE TOP
SMOOTHING THE IMPORT PROCESS JAVIER CORTÉS Counsel at Jones Day
348
Q: What main issues has Jones Day noted in the Mexican
Q: Despite these issues, foreign companies still want to come
healthcare industry?
to Mexico. What is driving international investment?
A: It is important to consider that modifications to sanitary
A: The Mexican population is over 120 million and its
registrations require the consent of the rights holder. It is
purchasing power is growing. We are also a neighbor to
common for Mexican distributors to become the owners
the largest producer of medicines and patent-holders in
of such registrations, which on a day-to-day basis protects
the world while the medical devices manufacturing industry
them from contract infringements. This makes it difficult for
has grown enormously and is located close to the border.
international manufacturers or sellers to claim their rights in
Therefore, Mexico represents a great opportunity for foreign
a dispute and thus the Mexican holder of the registration that
investment. During these times of uncertainty, it helps that
breached its commercial responsibilities has a clear advantage
we are a global firm with a large presence in the US and we
in any possible conflict. Therefore, foreign companies must
have broad knowledge of its commercial regulations. We can
think carefully about how to structure a contract before
provide our clients with up-to-date information and we also
coming to an agreement with a Mexican distributor.
accompany them through the regulatory changes and the industry’s evolution.
A matter for concern is that Mexican legislation lacks a clear mechanism for approaching the authorities
Q: What opportunities does homogenization between the
about how to resolve doubts on the interpretation of
FDA and COFEPRIS bring to the industry?
regulations. If sanitary regulations established certain
A: These homogenization opportunities became possible
steps to approach the authorities in good faith in such
through an agreement signed in October 2012 that allowed
cases, this would in all likelihood lead to an opportunity
faster healthcare registration of American products.
to improve the relations between authorities and
COFEPRIS has replicated this procedure with Health Canada
manufacturers or distributors of healthcare products and
and through other agreements with South American
to improve the authorities’ surveillance.
countries, which makes the process faster for medicine and medical devices. Authorized third parties are not
Q: What does COFEPRIS need to do to improve this situation?
included in this process for medical devices. The inclusion
A: In general, there are many discrepancies in the
of these institutions is positive, but there should be room for
application of regulations. We also believe that better
accommodating more institutions, otherwise it becomes a
access should be provided to communicate with
monopoly. They should standardize requirements and there
the decision-making authorities. Additionally, the
should be more players.
pharmacopeia is not yet published in the Official Journal of the Federation, despite it being the official support of
Q: What is the added value Jones Day offers that similar
COFEPRIS’ actions for medicine approval procedures. We
firms in Mexico cannot?
believe that there are procedures not included in the law.
A: We have over 2,500 lawyers in 44 locations worldwide.
For example, there is no clear regulation on advertising
We have great depth in the US and our clients are some
alcoholic beverages in certain places or on advertising
of the largest laboratories in the world. We are truly one
tobacco in duty-free shops for certain events.
firm worldwide, which ensures a seamless communication across jurisdictions and shared experience and knowledge with practice leaders and healthcare regulators across the
Jones Day is a global US law firm with offices in 44 countries.
world. The lawyers also receive continued education and
Its practices include capital markets, global regulation,
we share knowledge and experiences among our offices.
antitrust, energy and healthcare, among others. It has been in
Most international firms have local offices and they are
Mexico since 2009
not coordinated.
VIEW FROM THE TOP
LONG WAY TO GO FOR HEALTH STARTUPS ROGELIO DE LOS SANTOS Director General of Dalus Capital
Q: What kinds of health startups are emerging in Mexico?
this is an insurance scheme for corporate clients. Around
A: Mexico has enormous and untapped potential in many
10 percent of the 1,000 opportunities we receive every year
aspects, from medical devices to therapeutics. We see ever-
are in the health sector. However, to get into the health
more sophisticated groups with relevant papers published
space, startups require more knowledge, a better network
in prestigious journals and I recently met with a financial
and understanding of the ecosystem.
group that created a startup for psychiatric treatments with a Big Data approach. Most things being cooked up
Q: What is the standard process companies go through to
are geared toward creating disruption in the health system
receive financing from Dalus Capital?
but many are expensive, do not solve the root cause and
A: They approach us and show us why they are different,
drain more and more resources because people get sick.
why they have innovation behind them and why a customer
These groups are doctors or professionals tired of being on
would prefer to use their solution, product or service over
the other side of the equation and who are trying to provide
existing ones. We evaluate the efficient scalability of
solutions through technology to keep bigger communities
their business model, which is a key constraint. We also
healthy and avoid people reaching the treatment phase. We
try to determine if the problem they treat can be solved
are an innovation-based fund but we do not plan to invest
differently. In the early stages, we can help them configure
in taking a therapeutic through phases I-III. We consider
the best approach to monetize that opportunity. After they
how to deploy technology based on apps and Big Data to
pitch, if we like what we see then we decide on terms and
serve communities.
conditions and perform due diligence. Lastly, we draw up an exclusion plan to mitigate the risks the venture faces and
Q: What steps into the health startup industry have you
present it to the investment committee. On average we ask
made so far?
for 20-25 percent equity.
A: We have not made any investments yet but we have one in progress. The first investment that we wanted to close
Q: What are your expectations for 2017?
with fund one, a US$70 million fund, was an app from a
A: Planning for a year is too short. If we do not solve chronic
doctor based in Mexico City. He has been published in five
diseases, they will have a huge toll on peopleâ&#x20AC;&#x2122;s quality of
or six top journals worldwide and had a solution for HPV
life and on the finances of the country. They have a huge
diagnostics and a therapeutic solution for infection in both
impact on social security costs because there is no budget
women and men. I was told that although the publications
that can withstand those problems. We are only delaying
were great and the cases treated were real and verified,
and not taking care of the problem as it is evolving. I
the team behind the app lacked the rigor and scientific
expect the healthcare system to be more transparent, the
approach to scale the project worldwide. Also, we have
incentives should be aligned with increasing quality of life at
just met with a US company that has developed a solution
a lower cost, which is a big problem. Many solutions are not
applicable to the Mexican and Latin American markets to
simply having more beds and doctors. We need to deploy
automate the diagnosis of cervical cancer through pap
technologies that can scale and can change this dichotomy
smears. Another company from Monterrey is working
and the dynamics of this industry. Watch out for AI and the
on a solution for diabetes by diagnosing symptoms in
cloud because they will shape this industry.
the eyes, feet and skin. It is establishing small outlets in heavy traffic areas and offers eye examinations. Now, it is working with corporations to lower insurance costs by
Dalus Capital is an early stage and growth equity fund founded
installing technology on employee phones to track health
in 2015 and based in Monterrey and Mexico City. It is focused
habits and subtly influence them. The company promises
on supporting Mexican and Latin American entrepreneurs and
to reduce insurance costs by up to 50 percent. In truth,
works in a diverse range of sectors, including health
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VIEW FROM THE TOP
WORKING TOGETHER TO OVERCOME DIFFICULTIES EDUARDO GARCÍA President of Monterrey Ciudad de la Salud
Q: What advantages does this cluster provide for its
prevention, minimal correction and highly sophisticated
member hospitals?
procedures. In addition, the private sector has focused on
A: The cluster has many advantages because it does not
and strived to complement the public system, from macro
only focus on generating added economic value but also on
to micro providers.
developing the industrial sector and attracting investment.
350
There are important elements that are being addressed, such
Secondly, is the development of medical tourism. It
as nursing, patient security, clinical research and quality of
is already happening but there are no overarching
researchers. We are also working on a diploma in research
statistics we can rely on. Although there is still some
for the members of the cluster.In terms of security, we run
suspicion of the industry, which is dissipating, medical
simulations of potential accidents in hospitals, in which
tourism is increasing thanks in part to the city’s favorable
all hospitals cooperate. The doctors and nurses from the
environment. In 2016, medical tourism was strongly
“affected” hospital provide feedback on the reaction of
reflected in national tourism figures.
the other hospitals to the emergency. The cluster also has marketing committees focused on attracting health tourism
A third achievement is that the value chains in this offering
to Monterrey. Monterrey Ciudad de la Salud is an open
have also integrated other sectors through the tourism
organization so we are looking for new members. The main
cluster, such as the hotel industry, the light vehicle sector
criteria for admission is quality.
and aviation. Inter-cluster work has been beneficial in this sense and together we have developed plans to improve
Q: How are you working with universities to ensure that
integrated services. This concept has strengthened
graduates have the skills required of them?
medical tourism. I see an emerging line in digital services
A: First, universities are part of the tourism cluster and include
and distance care, which is something we could explore
relevant themes in their programs. Second, we are seeing a
in the future.
phenomenon of small details in the health sector such as making English a requirement for graduation. Practice is vital,
Q: What are the cluster’s ambitions for 2017 and how will
as a bilingual person can easily lose words that are not used.
it achieve them?
Much of the student population gains experience in dealing
A: In 2017, our goal is to strengthen medical tourism and the
with the conditions most relevant to Mexico, such as NCDs.
perception and positioning of Monterrey as a destination, in
Epidemiology classes also take into account that people
addition to forming a strategy of networks. We can support
can now die of infections that previously did not exist in a
other clusters across the country and we can cover the
particular region. Zika is one of the clearest examples of how
demand they cannot satisfy because we are only two hours
movement patterns have shifted and impact a community.
by air from the furthest cities in Mexico.
Q: What have been the cluster’s three most important
Q: How is the cluster working with the government to
achievements over the past 10 years?
promote medical tourism?
A: The most important achievement is that we have formed
A: We have a- close relationship with the Ministry of
an integrated offer of health services on several levels:
Economy and Labor and the Ministry of Health. Medical tourism is a priority for the government, for the economic incentive it represents for the state and for the possibility
Monterrey Ciudad de la Salud, created in 2011, is the first health
of offering care to more people. We have received support
cluster of its kind in Mexico. Based in Monterrey, it brings together
through various ministries to develop activities that
public and private hospitals with government officials and aims to
promote the city, to offer high-quality services and to
promote health and medical tourism
facilitate processes and paperwork.
VIEW FROM THE TOP
DIGITALIZING PHARMACOVIGILANCE MIREYA LĂ&#x201C;PEZ Operational Director of Pro Pharma Research
Q: What is the PPROVigi platform, its target market and
products that can be new molecules or new combinations
the benefits for users?
for which there is not yet ample evidence to demonstrate
A: G8 countries have integrated healthcare systems in
their safety in Mexico. With no exceptions, Class 3 products
which even paramedics can send pharmacovigilance
should undergo a pharmacovigilance study even though
reports. This is not the case in Mexico, so we wanted
they represent only between 10 and 20 percent of drugs.
to develop a system that the regulator, constituents of the healthcare system and research institutes could all
Q: What main issues do your customers face? How do you
use. Patients and healthcare professionals can access it
help to solve them?
using cellphones and pharmaceutical companies and big
A: Most companies face problems in drafting protocols
hospitals can use the web version to capture information,
and risk-management plans or adapting them to local
verify quality control, check the MedDRA code, an
regulations for pharmacovigilance studies, so they need help
international medical terminology dictionary, and submit
in drafting and adapting them through their global offices.
reports to COFEPRIS online. The platform is available to
We also run the outsourcing of pharmacovigilance units for
all hospitals and research institutes free of charge or at
those companies that prefer to have a lean organizational
subsidized cost. Pharmaceutical companies and other
structure in Mexico and focus on their core activities. The
marketing authorization holders should subscribe to this
execution of post-authorization safety studies is one area in
platform to perform their pharmacovigilance operations.
which companies need help from an established player like
Principally, pharmaceutical laboratories are attracted to this
us. We are creating a document-management system for
platform because it adds many functional efficiencies to
COFEPRIS and the industry so they have a digital system
their pharmacovigilance operations, due to the network of
to facilitate renewals of all the sanitary authorizations that
hospitals also using the platform.
contain references to pharmacovigilance requirements.
Q: The 2012 NOM-220-SSA1 is on your website. When will
Q: What will be your main priorities for the rest of 2017?
you start helping clients to comply with the 2015 version?
A: We hope to bring all pharmaceutical industry players
A: Once the new version of NOM-220-SSA1-2012 is
into the PPROVigi network. We have already brought
published in the Federal Official Journal, we will update
IMSS on board and we are working with the Coordinating
the website. We have a ready reckoner waiting to go to
Commission of the National Institutes of Health. The
print that contains a synopsis of the law and all applicable
School of Medicine at UNAM already has working
instances to Latin American countries. As soon as it is
arrangements with us. Later, we will turn to the remaining
made official, we will print the book and distribute it to
institutes such as ISSSTE, PEMEX and a couple of big
all our clients. Many companies in Mexico have their Latin
hospitals from each state to have uniform representation
America head offices here and we want to give them a
of side-effects across Mexico. It usually takes two to eight
single snapshot of the region. Some of the biggest changes
months to bring any institute on board after complying
are in the frequency of reporting, the content of each report
with their processes. We want to reach a 50/50 business
and the requirement of risk-management plans. Previously,
split between Mexico and Latin America because we want
the risk management plans had no categories. The changes
to be in touch with other national regulators.
to the NOM will introduce three classes. Class 1 is for generics or time-tested drugs with a low or well-established risk profile that makes for an easy renewal process. Class
Pro Pharma Research is a Mexican company created in 2012. It
2 is a little more complex, containing medicinal products
has evolved into a one-stop shop for pharmacovigilance over
with uncertain risk or with evidence of safety concerns
the past six years and it is looking to facilitate the process
while Class 3 is composed of newly approved medicinal
industrywide with its digital platform in Mexico and LATAM
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VIEW FROM THE TOP
PROVIDING RESOURCES TO IMPROVE MEXICO’S SCIENTIFIC PRODUCTION FRANCISCO CORPI Latin North Regional Director of Elsevier
352
Q: What solutions has Elsevier introduced to the Mexican
There are so many generic molecules approved globally,
scientific community? What are its main products?
but only handfuls make it into Mexican markets. Although
A: We apply 140-plus years’ experience in simplifying and
already established as generic molecules globally, these
organizing life sciences information to ensure discoverability
advanced molecules are often considered “New Molecules”
and accessibility of vital information. Elsevier’s solutions
for registration purposes in Mexico. Also, we have seen bigger
include Embase, which provides high-quality biomedical
national companies take the lead in other areas of research,
information with a level of comprehensiveness not seen
especially in identifying key generics for local manufacturing.
anywhere else. It is recommended and trusted by the
The growing cost of APIs has always been a concern for local
Cochrane Collaboration, international regulatory agencies
national pharmaceutical companies and on the other side the
and thousands of users across the pharmaceutical and
limited research output in terms of publications and patents
medical devices industry. Even with the technological
is a concern for academic universities.
advances in genomics, only about 5 percent of drug candidates make it to market. Up to 30 percent of those that
From an intellectual property standpoint of research,
fail are due to inadequate or inaccurate target validation
there are not many patents emerging, especially from the
resulting in a lack of efficacy or unanticipated off-target
pharmaceutical sector. According to IMPI, local Mexican
effects, often leading to unforeseen serious adverse events.
companies, government and academic institutes own an
We offer a solution to mitigate this problem through our
estimated 600 patents. This is approximately 2.5 times
tool Pathway Studio. Providing global content from patents
fewer than Brazil and approximately 100 times fewer than
and 16,000 scientific journals, Elsevier’s Reaxys solution is
South Korea.
designed to support the full range of chemistry research, including safety and toxicity analysis and method of
Q: How can Elsevier’s tools help boost productivity within
analysis as well.
Mexico’s healthcare services? A: For any country in the current macroeconomic context
Q: What are the main research trends you have recognized
there are three fundamental performance indicators for
in the pharmaceutical industry?
innovation and productivity: quality research output,
A: Big Pharma companies have demonstrated their interest
intellectual property and application and socio-economic
in the available patient pool, which offers a substantial
output. Elsevier has designed services and tools to improve
opportunity to accelerate their research. This has been
and impact all three areas.
considered a key factor for bringing clinical research to the country, although there is a concern from regulatory agencies
We have the privilege of working closely with almost 100
and policymakers regarding the safety of patients. While both
percent of international big corporations in the industry that
Big Pharma corporations and policymakers here in Mexico are
clearly have adapted to the shift in the industry with respect to
still figuring out the most adequate formula of success, we see
qualified information and analytics for their decision-making
many clinical trial opportunities lost to other countries in the
process from research to the commercial end. We also have
region. The challenge is not just the bureaucracy of policy but
witnessed how access to information has enabled global
it is even at the infrastructure, personnel and information level.
generics companies to evaluate and rationalize their portfolio and to strategically move away from their overdependence on top cash-cow molecules over of period of time. This
Elsevier is a global information analytics company that
shift is happening slowly but surely at top local Mexican
helps institutions and professionals develop scientific health
pharmaceuticals. We are working closely with them to
projects. It is traditionally known as the leading editorial of
introduce and educate them on the current reliable resources
scientific literature
through different programs and customized workshops.
INSIGHT
OPENING THE DOOR TO FOREIGN DEVICES LUISA GUTIÉRREZ Director General of Medisi
Access is a two-way street and consultants such as Medisi
works here. If someone has the flu, it is easier to go to
see a multitude of opportunities for international companies
a pharmacy and get something prescribed than to go
interested in expanding their markets and for Mexico to
to IMSS or ISSSTE and waste a whole day waiting for an
further open its doors to fresh innovations.
appointment.”
“The country is hungry for new possibilities,” says Luisa
Gutiérrez explains that this same backlog causes regulatory
Gutiérrez, Director General of Medisi, a consultancy
problems. The certification processes for medical devices
specialized in the medical devices segment. “Medisi
challenges international companies. According to Gutierrez,
is focused on opening access channels to and from
in 2015 the system suffered severe setbacks in the wake
Mexico.” She says Mexico is an excellent logistics point
of changes to COFEPRIS’ direction. “It is too soon to tell
and its stability provides confidence to the international
if the new people in charge are delivering results but I
companies doing business here.
believe the people in power have a strong impact on the process. Once they change, we once again will have to
According to a Clear Water International Report on the
go through new criteria with different requirements for
medical devices industry, Europe recorded the highest M&A
evaluations.” Gutiérrez contends that “it is good to be more
in medical devices in 2015 after the US. Chinese companies
demanding but not when demanding standards based on
are also interested in reaching out to Mexico but they have
new manufacturing criteria that have higher requirements
quality issues to overcome, says Gutiérrez. “Mexico is a
than those in Europe and the US.”
logistics hub. We have great human capital, a strategic location and many medical devices companies prefer to
Despite the challenges, many companies see the market
print ‘Made in Mexico’ on their products instead of other
opportunities that Mexico offers. “I always tell my clients
Asian countries,” she says.
there is no bad business here because even if their market share drops, it will still be a stronger market share than in
Medisi’s goal is to attract companies that provide the best
most of the other countries they sell in.”
quality at an affordable price. These are often from Israel and Germany, countries where the industry is dominated
Foreign companies can also benefit from the manufacturing
by SMEs offering innovation for good value. Companies
possibilities in Mexico. According to INEGI, there are 2,000
are watching currency exchange rates, she explains, so
units of production equipment and 400 exporters, most of
purchasing decisions are mostly made on price. Gutiérrez
which are focused on manufacturing. The country’s sound
adds that Mexico’s purchasing trends are mostly driven by
reputation has helped attract medical devices companies
commodity products instead of innovative ones. “Private
and about 60 manufacturing sites to Baja California,
hospitals could benefit from high technology but they need
according to ProMéxico, which has created one of the most
to consider prices,” she says.
important clusters for US companies.
Despite the opportunities, international companies
“American companies know Mexico. It is close and
encounter many challenges when trying to access Mexico.
manageable for them, so they see it as something
According to Gutiérrez, local factors like the lack of English
tangible, while Europe still looks at Mexico as something
speakers are barriers to doing business here. She says that
yet to be understood.” For European companies, she adds,
incoming companies expect a reimbursement system,
manufacturing in Mexico is not a priority. Medisi is working
which does not exist in Mexico because only 7 percent
on attracting Europe based SMEs whose development
of the population has private insurance. “Out of pocket
possibilities and trend-setting capacity are appealing for
expenditure is about 50 percent and that is how healthcare
the Mexican market.
353
VIEW FROM THE TOP
INNOVATIVE MARKETING FOR THE PHARMA INDUSTRY NEIVI ORTIZ Director General of Grupo Saned Latin America
354
Q: What attracted Grupo Saned to Mexico for its first
Q: How is Grupo Saned innovating the channels of
subsidiary?
communication in the pharmaceutical industry?
A: We arrived almost two years ago. We were attracted
A: We are approaching the industry with different
by the size of the market and we wanted to diversify our
marketing opportunities. One of the tools we are proposing
experience. I believe we probably came late but, despite the
is storytelling. We have done more than 35 movies for
delay, we know that no one else offers our value proposition.
pharma companies in Spain and Mexico is interested in
We develop customized strategies for each client to reach
adopting this tool. We also create motivational teasers for
their objectives. We are bringing solutions that have
patients to raise awareness about certain diseases and we
succeeded in Europe and that have been approved by the
produce scientific dialogues wherein we put the spotlight
strict compliance departments of companies such as GSK,
on an expert to create documentary material. Another of
Pfizer, Bristol Myers Squibb and Eli Lilly.
our business lines is virtual reality, through which we can create more empathy in the receptor.
Q: What educational opportunities is Grupo Saned providing to the pharmaceutical industry?
Q: What should be the role of the pharmaceutical sales
A: Our educational offer is one of our most requested
representative in a technology-based marketing scheme?
solutions by the Mexican pharmaceutical market.
A: More than 129 laboratories have been using sales
Traditional education is unilateral and there is no debate
representatives for more than 70 years. We are innovative
between the receptor and the educator. The education
in doing marketing focused on doing things differently but
model is changing. We introduced 3.0: simple and
that is inclusive of the resources that the company already
innovative educating actions in which the teacher gives
has. Grupo Saned is convinced there is no successful on-line
the students the main role in their education and learning.
without a successful off-line. We have a partnership with
This model is what we call Teach to Learn. We designed
Grupo Nichos, which is specialized in human resources for
our programs according to Dale’s Learning Cone, which
pharmaceutical sales forces.
says that 90 percent of what we learn can be retained when we teach it. We also looked at Maslow’s Pyramid,
Q: What is Grupo Saned’s main differentiator?
which shows that recognition is a main human need. We
A: An advertising or marketing agency works for many
realize that people are looking for a cooperative learning
industries and when pharmaceutical clients request a
environment that can be delivered virtually and for
campaign, they cannot guarantee full compliance with
recognition of the content they produce. We also have
the pharmaceutical advertising regulations. We are the
a program for educating patients because we believe
only provider who belongs to CETIFARMA. We are also
they will be more engaged with their treatment if they
CANIFARMA-authorized suppliers and we are certified
understand the information provided by laboratories. We
as an ethical and reliable company that provides services
also train doctors in affective and effective doctor-patient
according to industry criteria. Finally, we provide our clients
communication and have a health sciences agreement
ROI information and we host satisfaction surveys.
with Anáhuac University in which we develop content for programs, which the university subsequently certifies.
Q: What are Grupo Saned’s plans for the future? A: We have a research line currently only available in Spain. This business demands focus so we are hoping to bring
Grupo Saned is a Spanish company with 37 years of
it to Mexico. We want to extend our business model to
experience in pharmaceutical marketing through medical and
Colombia. Coming to Latin America and starting in Mexico
pharmaceutical publications, research, e-business, human
was a big step and we know that this will bring us new
capital training, market access, advertising and information
opportunities in the rest of the region.
ROUNDTABLE In March 2017, during the third edition of the Innovation Week organized by AMIIF, the assembled leaders discussed the impact of innovation on the health sector and how education could detonate economic development and productivity in the country. Innovation has set trends in health management, changing the way healthcare providers make decisions, distribute budgets, collect and analyze data, publish results and perform procedures. Mexico Health Review asked industry players how innovations are received in the Mexican health sector .
HOW OPEN ARE MEXICOâ&#x20AC;&#x2122;S PUBLIC AND PRIVATE HEALTH SECTORS TO INNOVATION?
The first challenge is to achieve a cultural acceptance of change and to break the barrier of resistance to install solutions whose end product is digital and not tangible. Our clients have been working 15 to 20 years in the same way, so it is not easy to make them embrace change. Working with public institutions presents other challenges. Budgets need to be reassigned to adjust to service contracts. Tenders often do not have a proper budget to contract the needed digitalization services. This is why we received with great expectation the IMSS Innovation Olympics, an event that IMSS launched in March 2017 for the first time. We see this competition as a key aspect
GUILLERMO FERRARI General Manager of Eseotres
that was missing in order for IMSS to properly adopt innovation; a space where public and private sector can transparently team up to develop innovative solutions that are tailor made to fit the reality and needs of the institution.
The Global Entrepreneurship Monitor (GEM) study shows the leading drivers of entrepreneurship in a country. The most important variable is education and a mindset of scarcity and globalizing a project, as ideas must be relevant to other countries. Often, people fall in love with their solution and not with the problem. However, there are an increasing number of people with disruptive ideas finding niches to capture value. Companies with experience and capital are increasingly considering these types of opportunities. They are opening to the idea of innovation, having venture capital areas or accelerators, inviting companies to solve problems relevant to them. They are interested in opening up to working with others, including
ROGELIO DE LOS SANTOS Director General of Dalus Capital
competitors, because if companies do not find solutions, others will. Mexican groups need to wake up and recognize innovation to be relevant in their markets and outside.
The way technological innovations can help patients varies according to therapeutic areas. For example, we have an app for patients with inflammatory bowel disease that provides information on the different stages of the disease and the reasons behind its progression. The main issue for these patients is that even though the disease may be controlled, there could be a specific event that pushes it to another stage. We provide support and teach them to identify symptoms. Another program helps patients with prostatic cancer track the disease properly, providing them with access to prostatic antigen testing. Ferring also runs a program called BB en casa (Baby at home) that helps patients with a fertility need who do not have the purchasing power to access treatment.
IRMA EGOAVIL Director General of Ferring Pharmaceuticals Mexico
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ACRONYMS Acronym
Full Name
Translation (if applicable)
AIDS
Acquired Immune Deficiency Syndrome
AMIIF
Asociación Mexicana de Industrias de Investigación Farmacéutica
Mexican Association of Pharmaceutical Research Industries
AMIS
Asociación Mexicana de Institutos de Seguros
Mexican Association of Insurance Institutes
ANAISA
Asociación Nacional de la Industria de Suplementos Alimenticos
National Association of the Nutritional Supplements Industry
API
Active Pharmaceutical Ingredient
ART
Anti-Retroviral Therapy
ARV
Anti-Retro Virals
B2B
Business to Business
B2C
Business to Customer
CANIFARMA
Cámara Nacional de la Industria Farmacéutica
National Chamber of the Pharmaceutical Industry
CDMX
Ciudad de México
Mexico City
CENSIDA
Centro Nacional para la Prevención y el Control del VIH/SIDA
National Center for the Prevention and Control of HIV/AIDS
CEO
Chief Executive Officer
CNS
Central Nervous System
COFECE
Comisión Federal de Competencia Económica
Federal Commission for Economic Competition
COFEPRIS
Comisión Federal para la Protección Contra Riesgos Sanitarios
Federal Commission for the Protection against Sanitary Risks
CONACYT
Consejo Nacional de Ciencia y Tecnología
National Council of Science and Technology
CRO
Contract Research Organization
CSG
Consejo de Salubridad General
EMA
European Medicines Agency
ENARM
Examen Nacional de Aspirantes a Residencias Médicas
National Exam for Medical Residency Candidates
ENSANUT
Encuesta Nacional de Salud y Nutrición
National Survey of Health and Nutrition
FDA
Food & Drug Administration
FPGC
Fondo de Protección contra Gastos Catastróficos
FTA
Free-Trade Agreement
GD
Gestational Diabetes
GMP
Good Manufacturing Practices
GPS
Global Positioning System
HIV
Human Immunodeficiency Virus
IMSS
Instituto Mexicano del Seguro Social
Mexican Institute of Social Security
INEGI
Instituto Nacional de Estadística y Geografía
National Institute for Statistics and Geography
General Health Council
Fund for Prevention of Catastrophic Expenses
Acronym
Full Name
Translation (if applicable)
IoT
Internet of Things
ISSSTE
Instituto de Seguridad y Servicios Sociales de los Trabajadores del Estado
JCI
Joint Commission International
LATAM
Latin America
M2M
Machine to Machine
M&A
Merger & Acquisition
MTCT
Mother to Child Transmission
NAFTA
North American Free Trade Agreement
NCD
Non-Communicable Disease
NOM
Normas Oficiales Mexicanas
NSF
National Safety in Food
OECD
Organization for Economic Co-operation and Development
OTC
Over the Counter
PAHO
Pan-American Health Organization
PEMEX
Petróleos Mexicanos
PPP
Public-Private Partnership
R&D
Research and Development
Rx
Prescription Drugs
SAGARPA
Secretaría de Agricultura, Ganadería, Desarrollo Rural, Pesca y Alimentación
Ministry of Agriculture, Livestock, Rural Development, Fishing and Alimentation
SALUD
Secretaría de Salud
Ministry of Health
SEDENA
Secretaría de la Defensa Nacional
Ministry of National Defense
SEMAR
Secretaría de Marina-Armada de México
Ministry of the Navy
SINGREM
Sistema Nacional de Gestión de Residuos de Envases y Medicamentos
National System of Medicines and Bottle Residue Management
T1D
Type 1 Diabetes
T2D
Type 2 Diabetes
TPP
Trans-Pacific Partnership
UNAIDS
Joint United Nations Programme on HIV/AIDS
UNAM
Universidad Nacional Autónoma de México
UNICEF
United Nations Children’s Fund
VAT
Value Added Tax
WHO
World Health Organization
Institute of Safety and Social Services for Federal Workers
Mexican Official Norms
National Autonomous University of Mexico
INDEX 1DOC3 152
161, 162, 163, 166, 167, 168, 169, 170, 171, 172, 173, 174, 175,
3M Healthcare 111, 119, 306, 328
176, 177, 182, 184, 186, 187, 194, 195, 196, 198, 199, 200, 201,
A3R 333, 340
203, 206, 213, 215, 216, 220, 234, 235, 238, 239, 241, 247,
ABC Medical Center 46, 47, 181, 192, 253, 276, 330
256, 261, 278, 280, 292, 331, 335, 336, 339, 341, 343, 345,
Accelerium 159, 161, 165, 177
346, 347, 348, 351, 353, 356
Accord Farma 85, 102
COMOP 253, 275
ACROM 162, 163
CONACYT 310, 311
Aeroméxico Cargo 225, 226, 229, 249
Consorcio Mexicano de Hospitales 285, 289, 302
Agave Spa 205, 207, 214, 221
Continuous Medical Education Institute 317, 324, 325
Alcon Labs 253, 279
Dalus Capital 262, 333, 349, 355
Alfa Wassermann 80
Deloitte 87, 103, 131, 135, 136, 137, 155, 254, 255, 333, 337
Alliancesfa 344
Diphsa 120, 225, 242, 243
Amerimed 35, 50
Distribuidora Alpilo 236
AMID 7, 20, 21, 112, 113, 127
Dräger 10, 23, 32, 108, 111, 112, 120
AMIIF 7, 18, 19, 64, 65, 66, 70, 75, 160, 161, 177, 346, 355,
DSM 181, 197
356
DVA 225, 241
AMIS 285, 288, 289, 295, 300, 301, 356
Elsevier 160, 333, 352
AMSA 85, 97
Emcure 85, 103
ANADIM 225, 239
Epic CRO 159, 161, 167
ANAFARMEX 225, 227, 247
Eseotres 140, 141
Analitek 159, 175
Expanscience 205, 216
ANCE 159, 172
Farmapiel 205, 215, 221
Apotex 85, 94, 95
Ferring 72, 216, 253, 258, 259, 355
Arthrex 111, 122, 329
Fitbit 135, 151
AsMed 55
Fligoo 35, 58, 59
Aspen Labs 9, 63, 64, 69, 105, 205, 210
Fujifilm 111, 116
Astrum Salud 135, 144, 145, 329
FUNSALUD 7, 12, 22, 23, 183
Bacher Zoppi 309, 318
Grupo Diagnóstico Aries 263
Baker McKenzie 345
GE Healthcare 127, 135, 136, 148
B.Braun 120, 128, 129, 326
Global Health Intelligence 109, 113, 142
Beckman Coulter 253, 265
GNK Logística 234, 235
Becton Dickinson 117
Grupo Accses 309, 320
BioEden 200
Grupo Bruluart 91
Biofarma 205, 220
Grupo Franklin 181, 189, 198, 225, 243
BioMarin 63, 67, 81
Grupo Marzam 11, 225, 226, 230, 231, 248
Biostem Technologies 181, 189, 199
Grupo Neolpharma 85, 88, 89, 328
Borgatta 253, 268
Grupo PLM 10, 135, 139
Bupa Global 36, 285, 287, 295
Grupo PTM 111, 130
CANIFARMA 7, 16, 17, 90, 112, 121, 160, 161, 177, 354, 356
Grupo RFP 225, 227, 246
Cecyc Pharma 159, 170, 171, 176
Grupo Saned 328, 333, 354
CENSIDA 7, 24, 25, 92, 98, 152, 356
Grupo Unipharm 85, 87, 107
Centro de Oftalmología Monterrey 269
Grupo Vitalmex 35, 56
Check-Up Center 253, 264
Hays 309, 319
Christus Muguerza 49
Healthlinks 11, 176, 333, 334, 335, 341
CINVESTAV 312, 313
Heidrick & Struggles 309, 321
COFEPRIS 7, 11, 14, 15, 16, 17, 18, 19, 20, 21, 22, 25, 26, 36,
Hetero 98
51, 64, 65, 66, 67, 76, 79, 80, 81, 86, 87, 90, 91, 93, 94, 97,
Higia Technologies 9, 135, 137, 154
99, 101, 104, 106, 113, 121, 129, 138, 139, 147, 154, 157, 160,
Hogan Lovells 196, 201, 333, 347
INDEX Hospitales San Ángel Inn 45
Oriundo 87, 206, 333, 342, 343
Hospital Sedna 35, 46, 51
Ottobock 178, 181, 183, 184, 185
ICON 159, 169, 177
PartnerRe 285, 286, 290, 291
IIIFAC 143
PEMEX 35, 42, 43, 45, 52, 81, 122, 146, 182, 185, 188, 286,
IM Natural 213
319, 329, 351, 357
Industrias Sintoquim 205, 218, 221
Perrigo 10, 85, 87, 105, 343
Inframedica 225, 245
Pfizer 63, 65, 67, 70, 173, 334, 338, 354
Infinite Clinical Research 162, 163
Pierre Fabre 63, 64, 72, 73, 75
INMEGEN 43, 181, 182, 188, 194
PPD 159, 161, 166
Instituto Ingenes 181, 190, 193, 245
PRA Health Sciences 159, 164
ISSSTE 9, 11, 14, 17, 18, 35, 44, 45, 50, 53, 66, 70, 80, 81,
Probionics 181, 183, 186, 187
96, 116, 122, 130, 143, 146, 160, 163, 164, 177, 213, 247, 265,
Pro Pharma Research 351
312, 315, 317, 319, 342, 351, 353, 357
PwC 77, 130, 226, 227, 333, 338, 339, 346
Janssen 9, 63, 65, 71, 73, 334
QuintilesIMS 138
Jones Day 329, 333, 334, 348
RM Pharma 159, 168
KPMG 10, 52, 53, 64, 65, 77, 160, 333, 336
RMA Mexico 191
Kronos 309, 327
Salud Cercana 135, 137, 146, 147, 262
La Latino Seguros 292
Sanofi 38, 63, 68, 161, 181, 182, 195, 280
Laboratorios Collins 10, 85, 86, 93, 201, 253, 278
SCOR Global Life SE 285, 287, 303
Landsteiner Scientific 181, 183, 194
Seguro Popular 9, 18, 33, 35, 36, 37, 40, 41, 46, 47, 51, 53,
Laureate International Universities 323
66, 67, 81, 101, 124, 245, 265, 283, 286, 337, 342
Levic 225, 227, 228, 249
Seguros Atlas 285, 287, 289, 302
Linet Group SE 114, 115
Seguros GNP 287, 298, 299
Liomont 85, 90
Sesderma 205, 212
Lundbeck 30, 63, 65, 78, 79, 254
Sicamsa 225, 236, 249
Majicarga 225, 238, 249
Siemens Healthineers 111, 112, 121, 265
McKinsey & Company 57, 285, 287, 294
Signufarma 225, 240
Médica Sur 48
SINGREM 225, 233, 357
Medisi 353
SiSNova 285, 293
Mediprint 131
Smith & Nephew 111, 113, 124
Medistik 225, 231, 232
Sports World 202, 205, 207, 217, 219
Medix 255, 267
Swiss Hospital 35, 54
Medtronic 111, 125, 127, 255
Swiss Tropical and Public Health Institute 253, 272, 273
Merck 63, 66, 67, 75, 334
Synthon 253, 261
Merz 205, 211
Tecnológico de Monterrey 314, 322
Mexican Cardiology Society 260
Teva 8, 77, 80, 85, 96, 97
Federal Ministry of Health 12, 13, 22, 24, 28, 30, 40, 42, 43,
T-Systems 135, 153
44, 50, 53, 64, 68, 76, 139, 154, 160, 161, 198, 238, 239, 243,
UDIBI 159, 161, 174
247, 263, 265, 276, 286, 311, 312, 315, 335, 339, 347, 350
Uhma Salud 135, 150, 262
Ministry of Health of Mexico City 38, 39
UNAM 314, 315
Monterrey Ciudad de la Salud 350
UNICEF 7, 28, 29, 277, 357
Murguía Consultores 304
UN Women 7, 27, 316
Nestlé 205, 209
UPS 225, 226, 237, 238, 248
Northcube 135, 149
Vanquish 85, 92
Novartis 63, 64, 65, 76, 255, 279, 318, 329, 334
VECO 225, 244
Novo Nordisk 9, 19, 156, 250, 253, 256, 257
Willis Towers Watson 305
NYCE 159, 160, 173, 176, 186, 335
Wockhardt 85, 86, 87, 100, 101
Olivares 333, 346
Zydus Pharmaceuticals 99
ADVERTISING INDEX 6
Grupo Bruluart
134
APE Editorial
21
Pierre Fabre
141 QuintilesIMS
29 NYCE
157
Mexico Business Events
34 Arthrex
171
RM Pharma
39
180 Medistik
Linet Group SE
43 Amerimed
204
62
208 Nestlé
Aspen Labs
Sports World
74 Anfitriones
212
79 Olivares
224 Levic
84 Apotex
252 Sanofi
88-89
259
Hospital Sedna
92 DVA
284
Mexico Business Publishing
101 Hetero
291 SiSNova
110
308
Grupo Neolpharma
Becton Dickinson
IM Natural
Mexico Health Summit
118 Convatec
313 CINVESTAV
129
332 UDIBI
Siemens Healthineers
INFOGRAPHICS 26
COFEPRIS Breaks Down Barriers
266
37
Mexico's Healthcare System
296-297 The Main Causes of Death in Mexico
52-53
National Health System Under the Spotlight
300-301 Challenges Ahead for Health Insurance
Obesity: A Growing Problem
126-127 The Medical Devices Segment in Mexico
PHOTO CREDITS Inner Front Cover Novo Nordisk
50 Amerimed
93 MBP
4
Mexico Tourism Board: Photo -
51
Hospital Sedna
94 Apotex
Ricardo Espinosa - reo
54
Swiss Hospital
95 Apotex
12
Ministry of Health
55 MBP
96 MBP
14 MBP
56 MBP
97 AMSA
16 MBP
57
98 MBP
18 MBP
58 MBP
99
19
Novo Nordisk
McKinsey & Company
Zydus Pharmaceuticals
60 Medix
100 MBP
20 AMID
66 MBP
102 MBP
22 FUNSALUD
68 Sanofi
103
Accord Pharma
23 Dräger
69 MBP
104
Aspen Labs
24
MBP, MBP
70 Pfizer
105 Perrigo
27
UN Women
71 MBP
107 MBP
28 UNICEF
72 MBP
108 Dräger
32 Dräger
75
114 MBP
38 MBP
76 Novartis
116 Fujifilm
40
78 MBP
117 MBP
41 Dräger
80
119 3M
42 MBP
81 MBP
120 MBP
44 MBP
82 Hetero
121 MBP
45 MBP
88
122 Arthrex
47
ABC Medical Center
90 MBP
124
48
Médica Sur
91 MBP
125 MBP
49
Christus Muguerza
92 MBP
128 B.Braun
Seguro Popular
MBP, Alfa Wassermann, MBP
Alfa Wasserman
Grupo Neolpharma
Smith & Nephew
130 MBP
213 MBP
290 PartnerRe
131 MediPrint
214 MBP
292 MBP
132
215 MBP
293 SiSNova
138 MBP
216 MBP
294
139
217 MBP
295 MBP
140 MBP
218 MBP
298
Seguros GNP
142
Global Health Intelligence
219
302
Consorcio Mexicano
143
MBP, MBP
de Hospitales
Médica Sur Grupo PLM
Sports World
McKinsey & Company
220 Biofarma
144 MBP
221
MBP, MBP, MBP
303 MBP
146 MBP
222
Grupo Neolpharma
304
Murgía Consultores
148 MBP
228 MBP
305
Willis Towers Watson,
149 Northcube
229 MBP
Willis Towers Watson
150
230 MBP
306 3M
151 Fitbit
231 Medistik
310 CONACYT
152 1DOC3
232 MBP
312 MBP
153 T-Systems
233 MBP
314
154
Higia Technologies
234 MBP
315 MBP
155
Deloitte, Deloitte
236 Sicamsa
317
156
Novo Nordisk
237 UPS
Institute
162 MBP
238 MBP
318
164 MBP
239 MBP
319 Hays
165 Accelerium
240 MBP
320 MBP
166
MBP, MBP
241 MBP
321 MBP
167
Epic CRO
242 Diphsa
322
Technológico de Monterrey
168
RM Pharma
Laureate International
MBP, MBP
Technológico de Monterrey Continuous Medical Education Bacher Zoppi
243 MBP
323
169 MBP
244 MBP
Universities
170
Cecyc Pharma, MBP, MBP
245 MBP
324
172
ANCE, ANCE
245
Institute
Instituto Ingenes
Continuous Medical Education
173 MBP
246 MBP
326
174 MBP
247 MBP
327 Kronos
175 MBP
248
MBP, UPS, MBP
328
Grupo Neolpharma, 3M,
177
249
MBP, MBP, Sicamsa, MBP
Grupo Saned
178 Ottobock
250
Novo Nordisk
329
Arthrex, Jones Day, Novartis,
184 Ottobock
256 MBP
MBP
185 Ottobock
257
330
186 Probionics
258 MBP
336 KPMG
188 INMEGEN
260 MBP
337
189
MBP, MBP, MBP
261 MBP
338 PwC
190
Instituto Ingenes
262
340 MBP
Accelerium, MBP, MBP
Médica Sur
Grupo Diagnóstico Aries
B. Braun
ABC Medical Center Deloitte, Deloitte
191 MBP
264 MBP
341 Healthlinks
192 CINVESTAV,
265 MBP
342 MBP
ABC Medical Center
267 Medix
344 MBP
193
Instituto Ingenes
268 MBP
345
194 MBP
269
Centro de Oftalmologia
346 MBP
195 Sanofi
de Monterrey
347
MBP, MBP
197 DSM
272
Myriam Lingg
348
Jones Day
198 MBP
275 MBP
349
Dalus Capital
199 MBP
276
ABC Medical Center,
350 MBP
200 MBP
ABC Medical Center
351
202
278 MBP
352 MBP
209 Nestlé
279
Alcon Labs
353 Medistik
210 MBP
282
La Latino Seguros
354
Grupo Saned
211 MBP
288 AMIS
355
MBP, Dalus Capital, MBP
212 Sesderma
289 MBP
Inner Back Cover Ottobock
Sports World
Baker & McKenzie
Pro Pharma Research
CREDITS JOURNALIST & INDUSTRY ANALYST: Sophie Murten JUNIOR JOURNALIST & INDUSTRY ANALYST: Camila Del Villar EDITORIAL MANAGER: Daniel González EDITORIAL MANAGER: Tomás Sarmiento EDITOR: Ricardo Guzmán MANAGING EDITOR: Mario Di Simine PUBLICATION COORDINATOR: Marta Aguilar JUNIOR PUBLICATION COORDINATOR: Blanca San Martín COMMERCIAL DIRECTOR: Jack Miller GRAPHIC DESIGNER: Ailette Córdova JUNIOR DESIGNER: Mónica López DESIGN DIRECTOR: Marcos González WEB DEVELOPMENT: Omar Sánchez COLLABORATOR: Sara Warden COLLABORATOR: Nadine Heir COLLABORATOR: Gaby Mastache COLLABORATOR: Alicia Arizpe COLLABORATOR: Luis Pesce CIRCULATION MANAGER: Elizabeth Solís DIRECTOR GENERAL: Jeroen Posma
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