Mexico Health Review 2018 by Mexico Business Publishing

2018

“Mexicans will have medical security from the cradle to the grave” Andrés Manuel López Obrador, President-elect

2018

The Mexican healthcare sector faced several challenges in 2018. Budget cuts have limited public sector maneuverability and uncertainty has made many investors cautious in the short-term. While the hurdles have been significant, the Mexican economy remains steady and the local market for pharmaceuticals and medical devices shows no sign of slowing down. With a new administration headed by President-elect Andrés Manuel López Obrador ready to enter office, universal healthcare is at the top of the agenda, along with the need to address the rise in chronic diseases and their management, while adapting regulations to the rapidly changing requirements of a burgeoning technological environment.

Among the industry’s buzzwords at this time of change are Big Data, automation and innovation. As Industry 4.0 practices penetrate the health sector one key hurdle stands in the way: Mexico’s fragmented system makes it difficult to share data and realize the integration of information that characterizes the technological revolution now under way.

Healthcare will always be essential not only for individuals, but also for the country’s economic growth, and as the industry opens further to private investment, the opportunities are many. Both old and new companies are entering or expanding in the market, attracted by the country’s large population and its changing epidemiological profile, which will only increase the need for new healthcare services. Moreover, many are investing in innovative solutions or technologies to better identify existing challenges and develop comprehensive strategies to solve them while optimizing resources and keeping bottom lines in the black.

ALL RIGHTS RESERVED ÂŠ Mexico Business Publications S.A. de C.V., 2018. 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: 978-0-9993108-8-5

TABLE OF CONTENTS

STATE OF THE INDUSTRY

REGULATORY ENVIRONMENT

HOSPITALS & CLINICS

INSURANCE

PHARMACIES & MEDICAL SUPPLIES

6 7

Supplement

MASS-MARKET PRODUCTS

HEALTH PRIORITIES

INNOVATIVE MEDICINES

CLINICAL RESEARCH

BIG DATA & DIGITAL HEALTH

MEDICAL DEVICES

ATTRACTING & RETAINING TALENT

MANUFACTURING & LOGISTICS

NEW ENTRANTS

THE NEXT SIX YEARS

Angel of Independence, Mexico City

STATE OF THE INDUSTRY

Budget cuts and epidemiological changes continue to characterize the current healthcare industry in Mexico, with a modicum of uncertainty coloring the sectorâ&#x20AC;&#x2122;s outlook. A new president is preparing to take office and the business community is awaiting the results of the NAFTA renegotiations. In this environment, 2018 saw some companies put projects on hold as they wait for the dust to settle. But business does not stop and despite the clouds, many segments of the industry enjoyed prominent growth, from medical devices to generic medicines. At the same time, confident investors saw opportunities to enter the market, open new divisions or introduce new products for a population that is increasingly demanding them.

Mexico Health Review 2018â&#x20AC;&#x2122;s opening chapter will provide an overview of the main challenges the industry faced in the previous year and what actions government institutions, industry organizations and companies took to deal with the issues at hand. Through interviews with sector leaders, this section also analyzes the areas of opportunity within the Mexican healthcare market and the best strategies to address them.

CHAPTER 1: STATE OF THE INDUSTRY 7

YEAR IN REVIEW: Changing Health Profile, Aging Population Reshaping Industry

INFOGRAPHIC: Healthcare Market Faces Challenges, Opportunities

EXPERT OPINION: Federal Minister of Health

VIEW FROM THE TOP: Román Rosales, Minister of Health of Mexico City

VIEW FROM THE TOP: Antonio Chemor, Seguro Popular

VIEW FROM THE TOP: Jorge Guerrero, ISSSTE

VIEW FROM THE TOP: Marco Navarrete, PEMEX

VIEW FROM THE TOP: Cristóbal Thompson, AMIIF

VIEW FROM THE TOP: Rafael Gual, CANIFARMA

VIEW FROM THE TOP: Juan Millán Soberanes, CETIFARMA

VIEW FROM THE TOP: Francesca Colombo, OECD

VIEW FROM THE TOP: Juan Manuel Sotelo, PAHO/WHO

VIEW FROM THE TOP: Enrique Mondragón, CANACINTRA

INSIGHT: Ricardo Ramírez, AFAMELA

VIEW FROM THE TOP: José Campillo, Funsalud

VIEW FROM THE TOP: Viviana Linares, Mexican Pharmaceutical Council (CFM)

INSIGHT: Marcos Pascual, ANAFARMEX

INSIGHT: Fernando Becerril, AMPPI and Becerril, Coca & Becerril

ROUNDTABLE: How Can the Health System Achieve a Maximum Return on Every Peso Spent?

| YEAR IN REVIEW

CHANGING HEALTH PROFILE, AGING POPULATION RESHAPING INDUSTRY Mexico has made significant advances in several areas of healthcare but the country still has many hurdles to overcome. In a year of transition and uncertainty, many have hedged their bets waiting to see how the tables will turn, but most still see Mexico’s health industry as an area of opportunity

Medicines, vaccination campaigns and hygiene

higher than infectious diseases, as the former must be

improvements have lengthened the lives of Mexicans

addressed for the person’s entire life instead of a few

during the last decades. Today, the life expectancy of a

days or weeks,” says Héctor Valle, Founder and Partner

child born in Mexico is almost 77 years, according to the

at INNOVASALUD.

World Bank. Birth rates, on the other hand, have plunged. In the 1970s, a woman generally had an average of 6.8

These problems, of course, are not just in Mexico.

children, while now she has 2.2. Together, these changes

Individuals and healthcare systems across the globe

show the country is undergoing a profound population

are spending a pretty penny addressing obesity-related

shift, moving from a younger and more productive

diseases. A report from the Harvard School of Public

population to an older one. The next generation will have

Health released in 2016 stated that it takes healthcare

to deal with a large number of older individuals and all

systems around the world US$825 billion per year

that that entails, including an increase in the costs of care

to cover the medical costs of 422 million adults with

due to palliative services and the need to address more

diabetes. This study states that the number of diabetics

age-related diseases, such as dementia.

could rise to over 700 million individuals by 2025, with care costs for them rising accordingly.

Mexico has another significant problem. According to the UN’s Food and Agriculture Organization (FAO),

PUBLIC SECTOR BLUES

73 percent of all Mexicans are overweight or obese.

A larger and overweight population will mean higher

That number breaks down into seven out of every 10

medical care expenses; however, in recent years the

adults, four out of 10 teenagers and one out of three

health sector in Mexico has seen its budgets cut.

children. Growing obesity rates have translated into more cardiovascular diseases, diabetes and cancer, which now

In 2018, the International Monetary Fund (IMF) ranked

represent Mexico’s largest mortality causes, according

Mexico’s economy 15 th in the world by GDP. However,

to INEGI. Even more worrying is the large number of

the country is in last place among OECD countries in

overweight children. This segment of the population is

healthcare expenditure. Mexico invests only 5.8 percent

at greater risk of developing an obesity-related disease

of its GDP in healthcare, while the OECD average is 9

earlier in life. “The costs of chronic diseases are much

percent. Moreover, half of that 5.8 percent is paid not by the government or by public institutions, but by patients

PREDICTED GLOBAL SPENDING BY BY PREDICTED GLOBAL SPENDING DISEASE AREA IN IN 2020 DISEASE AREA 2020

themselves, putting Mexico in first place for out-ofpocket healthcare costs among OECD countries. This small investment in healthcare is the result of many years of budget cuts. The Mexican Institute of

US$1.4

Competitiveness (IMCO) has said that during the six

trillion in total predicted expenditure in medicines by 2020

years of President Enrique Peña Nieto’s administration, the Ministry of Health’s budget fell by 20 percent and those cuts are directly reflected in Mexican wallets. In Mexico, the main provider of healthcare is the public sector, composed of several independent hospital

Non-communicable 37%Respiratory 15% Communicable Oncology 11% Autoimmune 10% Diabetes

Pain

Diabetes

networks working autonomously. While Mexican law

Oncology 7% Autoimmune

says that about 32.6 million people do not have access

7% Cardiovascular

7% Pain

6% Respiratory

Communicable

Source: QuintilesIMS Institute.

Cardiovascular

Non-communicable

states that all citizens must be provided healthcare, INEGI to any kind of care. As the different networks do not exchange services, there is a simultaneous oversaturation

of some hospitals and the underuse of others. Patients

Due to their lower cost in comparison to patented

attending oversaturated hospitals might find a lack of

medicines, generics have become the drug of choice for

medicines and medical supplies, long waiting times or

most Mexicans. Generics represent 84.1 percent of all

insufficient specialists, beds or equipment, leading those

drug sales, according to OECD data, but their lower costs

who can afford it to the private sector. The Center for

translate into smaller margins, as they only represent 49

Economic and Budget Research (CIEP) says that during

percent of the medicine market by cost. Nonetheless,

Peña Nieto’s administration out-of-pocket expenditure

generics are a significant business opportunity that

in healthcare increased by 120 percent, forcing Mexicans

continues to grow.

to spend up to 41 percent of their income on healthcare. “The pharmaceutical sector sold a total of 985.7 million

INSURANCE GROWTH POTENTIAL

units with a value of MX$156 billion (US$8.97 billion)

Most of the money patients spend on healthcare goes to

between February 2017 and February 2018,” says Rafael

pay for drugs, tests, doctors, hospitals and many other

Maciel, President of the Mexican Association of Generics

services, but Mexicans rarely spend on insurance. The

(AMEGI). He explains that the growth rate of generics has

country has one of the lowest insurance penetration rates

outpaced that of patented medicines. “During those 12

in the OECD. “Mexico’s private healthcare market remains

months, the generics market grew at a 3.9 percent rate

small in terms of insurance coverage. The country has 120

and the OTC segment grew by 5.3 percent, while the price

million inhabitants but there are only 10 million people

market decreased by 1.5 percent,” he says.

covered by health policies. Private health insurance remains expensive for many, so the sector is looking for

Patent expirations will continue driving the generics

alternatives,” says Luis Francisco Galván, Vice President

market, especially in emerging economies. In its report

and Head of Pricing Latin America at SCOR.

Global Medicine Use in 2020, IQVIA explains that emerging economies, including Mexico, will continue to prefer

Insurers say that Mexicans distrust private insurance,

generics and over-the-counter (OTC) medications over

forcing families to de-capitalize in cases of emergency. To

patented medicines.

increase insurance penetration, some choose specialized products focused on a single disease, such as diabetes or cancer. “Today in Mexico, the most common policy is the major expenses premium, created years ago for a lifestyle and an epidemiology very different from what we have today. We need to create new policies that address the country’s needs. To this end, MASZ is designing new products for launch in 2018. One is a policy only for heart attacks,” says Alejandro Sancen, Director General

Mexico invests 5.8 percent of its GDP in healthcare, while the OECD average is 9 percent

of MASZ. Smaller insurance plans represent smaller costs for the individual and lower risk for the insurer, while

The generics market is not without challenges. Current

ensuring that the person is covered in case of developing

regulations require all manufacturers to fully ensure the

the disease. Other insurers propose to make insurance

efficacy and safety of all medicines in the market. All things

products either mandatory or tax free to incentivize

being equal, patients prioritize prices, buying the cheapest

individuals to acquire them. Finally, some insurers are

option available. This makes manufacturers compete on the

pursuing the introduction of Big Data practices to closely

lowest price, reduce their margins. “In markets like Mexico,

monitor the healthcare habits of patients to do better

where the majority of spending is out of pocket, people

risk estimations that might permit more accurate price

seek lower prices but want the same quality,” says Mariano

projections for insurance.

de Elizalde, CEO Sandoz México.

LOWERING OUT-OF-POCKET SPENDING

Alejandra Palacios, President of the Federal Commission

Other strategies have directly addressed out-of-pocket

of Economic Competition (COFECE), however, points out

expenses in healthcare, like the introduction of generic

that generics are slow to enter the Mexican market. In 2017,

versions of branded drugs with expired patents. “Our

she explained to media that while in the US the production

work with generics is one of this administration’s greatest

of a medication might start immediately after a patent

achievements, as these medicines cover 70 percent of

expires, in Mexico this process usually takes up to two years.

Mexico’s main mortality causes and bring about a 60

Furthermore, current regulations complicate their sales in

percent overall reduction in costs,” says Julio Sánchez y

the case of prescription medication. “Health regulations limit

Tépoz, Federal Commissioner of COFEPRIS.

the possibility to substitute a patented medication for its

| YEAR IN REVIEW generic alternative unless the doctor explicitly writes down

with Pfizer’s quality,” says Rodrigo Puga, President and

the generic name,” says Palacios. Generics manufacturers are

Country Manager of Pfizer Mexico.

working to change this to promote the use of these medicines. AMEGI, for instance, is working directly with doctors to

HEALTHCARE: FROM MEXICO TO THE WORLD

address the issue. “Doctors were initially reluctant to prescribe

Big Pharma has found in Mexico more than a good business

generic medications but we have provided them with enough

environment; it is also a good place to manufacture their

information to change that initial hesitation,” says Maciel.

medicines. According to ProMéxico, the country hosts subsidiaries of 20 of the 25 largest pharmaceutical

Mexico is the largest provider of medical devices in Latin America and the largest provider to the US. The sector is expected to continue growing at a 4 percent CAGR

companies in the world and the industry received a total of US$4.76 billion in FDI between 2010 and 2016. Some advantages include an ideal location that acts as an entry point to the US and Latin America, numerous free trade agreements and lower production costs than neighboring economies, explains ProMéxico. However, the pharmaceutical manufacturing industry has faced its share of ups and downs. The country reached its largest manufacturing capacity in 2013 with a total of

Another strategy to reduce costs has been proposed

US$12.33 billion in medicine production, but since then

by the Association of Over-the-Counter Manufacturers

capacity has been gradually shrinking, dropping to US$9.28

(AFAMELA), which suggests promoting the use of self-

billion in 2017. This trend is expected to change, with

medication for common diseases and those that are easy

Global Insights forecasting a small increase in production

to diagnose. In early 2018, the association pointed to

in 2018 to US$9.35 billion and growing until 2022, when the

the MX$43.5 billion spent by the public sector caring for

consultancy expects the country to reach US$11.26 billion

ailments of this kind for 15 million Mexicans and suggested

in medication manufacturing.

that that money could have been saved by empowering individuals to handle these illnesses on their own.

The global pharmaceutical sector is also experiencing several changes that will gradually impact local manufacturing.

Many manufacturers see in OTCs a way to grow their

The main change is the shift from small molecules toward

market by producing affordable medicines for a larger

biomolecules, large chemical compounds manufactured by

customer base. Big Pharma has also climbed onto

cell. For instance, 2017’s top-selling patented medication

the OTC and generics train. For instance, giant Swiss

was AbbVie’s biomolecule Humira, which accounted for

pharmaceutical Novartis separated its generics and

sales of US$18.43 billion worldwide. The shift toward

OTC drug portfolio into its subsidiary Sandoz. Other

biomolecules brings both advantages and disadvantages.

pharmaceutical companies continue selling innovative

On the one hand, these drugs are more expensive to

medicines together with OTCs and generic versions of

research, develop and produce than small molecules; on

their own medicines once the patent has expired. “Pfizer is

the other, it is much harder to make generic versions,

a company of innovation but we also offer Pfizer Vitales in

known as biosimilars. For that reason, patent holders can

Mexico, our generics line that combines accessible prices

expect a longer delay between the expiration of a patent

WORLDWIDE PRESCRIPTION DRUG & OTC SALES BY TECHNOLOGY (PERCENTAGE) WORLDWIDE PRESCRIPTION DRUG & OTC SALES BY TECHNOLOGY (percentage) 100

——Conventional

——Biotechnology

80 60 40 20 0

2014

2015

2016

*Projection. Source: Evaluate Pharma.

Conventional

Biotechnology

2017

2018*

2019*

2020*

2021*

2022*

2023*

2024*

MÉXICO’S INTERNATIONAL TRADE OF MEDICAL DEVICES (US$ BILLION) MÉXICO’S INTERNATIONAL TRADE IN MEDICAL DEVICES (US$ billion)

——Balance of Trade

3 2

2011

2012

3.95 3.74

3.41 3.47

6.34 3.15 3.19

5.77 2010

3.04 3.03

2.99 2.78

6.07

6.89

7.70

9.05

Exports

4.84 4.21

Imports

8.41

4.44 3.96

2013

2014

2015

2016

Source: ProMéxico 2018.

Exports

Balance of Trade

and the entrance of Imports a generics competitor into the market,

account for 75.9 percent of all exports. These are followed

Source:them ProMéxico leaving with2018 a broader sales exclusivity period. For

by orthopedic devices with 10.8 percent, respiratory therapy

this reason, among others, the market for biomolecules is

and massage devices at 6 percent and the remaining 7.3

expected to continue growing, as can be seen in Evaluate

percent by other types of products, according to ProMéxico.

Pharma’s forecast for 2024.

Much lower manufacturing costs in comparison to Mexico’s northern neighbor, which is also the largest destination

Biomedicines are barely permeating the Mexican market, but

for Mexican medical device exports, has underpinned the

local players already see their potential. For instance, ANCE,

segment. According to KPMG and Competitive Alternatives,

an authorized third party, built a strong business focused

the manufacture of a medical device is 21.2 percent

on the authorization of medical devices, but the company

less expensive in Mexico than in the US, which receives

is increasingly turning to biomolecules. “We are also seeing

92.8 percent of all medical device exports, according to

emerging opportunities in biomedicines. The country has

ProMéxico. Even though the relationship between both

many prospects for laboratories, especially in the case of

countries is shaky at the moment, the US has been one of

biotechnological products, due to their complex requirements

the largest investors in the medical devices sector. Between

in comparison to small molecules. For that reason, laboratories

2005 and 2016, the US invested a total of US$1.61 billion,

are investing in Mexico to develop these medications,” says

almost 10 times the amount of second place The Netherlands

Abel Hernández, Director General of ANCE.

with US$177 million, according to the Ministry of Economy.

The problems facing the local drug manufacturing sector

However, as the US is the largest investor in the local

have not been extended to medical supplies, a sector that

industry and the main destination for Mexican exports,

is now booming. Mexico is the largest provider of medical

there is a cloud looming over the medical devices industry:

devices in Latin America and the largest provider of the

the renegotiation of NAFTA. “Importers will suffer the

US, according to ProMéxico. In its latest report, ProMéxico

most. With NAFTA changes that gave us a zero tariff, we

affirmed that the sector is expected to continue growing at

will need to rethink our plans, although we have to wait.

a 4 percent compound annual growth rate (CAGR) between

Asian products might have advantages attributed to more

2016 and 2020. In 2016, the production of medical devices

aggressive prices but the government could continue

totaled US$12.7 billion and is expected to reach US$16.52

saying no to the Asian market and only buy from the US and

billion by 2020.

Europe,” says Alejandra Groff, Director General of GMMC.

Mexico has built a strong manufacturing base for medical

While some have a more positive outlook on NAFTA

devices, especially in northern states such as Baja California,

renegotiations, others are already looking for opportunities

Sonora, Chihuahua, Tamaulipas, Coahuila and Nuevo Leon.

that take advantage of Mexico’s other numerous trade

Baja California alone accounts for 50 percent of all exports

agreements. “Having operations in Colombia, Chile and

of medical devices, according to ProMéxico. In recent years,

Peru allowed us to take advantage of the Pacific Alliance,

the country has had a positive trade balance of imports and

which promotes exchange of workers and products

exports, a trend that is expected to continue.

across its member countries. Furthermore, Peru, Chile and Mexico are part of the TPPII, which will allow us to export

Most of the products manufactured for export are for the

to Australia, Vietnam, Canada, Brunei and Japan,” says

medical, surgical, dental and veterinary industries, which

Dagoberto Cortés, Director General of Sanfer.

| INFOGRAPHIC

HEALTHCARE MARKET FACES CHALLENGES, OPPORTUNITIES MEDICAL COVERAGE

The Mexican healthcare sector has faced budget cuts and uncertainty resulting from geopolitical developments,

43.5% Seguro Popular 32.9% IMSS 13.4% No affiliation 6.7% ISSSTE 0.7% State ISSSTE 0.6% Private 0.4% SEDENA/SEMAR 0.3% PEMEX 1.2% Other 0.3% No answer

but it is expected that overall spending on healthcare will continue to grow both in Mexico and the world. The country still has many challenges to address in terms of healthcare,

127.5

with access to care among the top priorities. Mexico’s large

population, changing epidemiological profile and gaps in

million people

access to care make the country an interesting opportunity for investors. As the country transitions toward a new federal administration, changes will bring opportunities for those who are prepared to take them.

TOTAL HOUSEHOLD EXPENDITURE ON HEALTH GOODS AND CARE (2016)

Expenditure on healthcare per area as percentage of GDP in 2016 with breakdown

54.4% Medicines 16.8% Medical visits 11.6% Hospital services 9% Support goods (soaps, toothpaste, etc)

MX$447

3.6% Support services

(includes private medical insurance)

billion

3.4% Clinical tests and ambulances

1.2% Healthcare centers and residences

OTHER POINTS: Warning signs for Mexico:

Advantages:

Obesity, diabetes, cardiovascular diseases, lower access to healthcare in comparison to OECD countries and lower health expenditure

Lower tobacco and alcohol consumption than average for OECD countries

Economic activities health sector GDP

4.1%

Health sector taxes on net products of subsidies

0.2%

Outpatient medical services

0.9%

Hospital services

1.1%

Healthcare centers and day care

0.03%

Healthcare auxiliary activities

0.05%

Public healthcare administration

0.4%

Manufacturing healthcare goods

0.3%

Related goods and services

1.1%

Value of unpaid work in healthcare

1.4%

Total healthcare GDP

5.5%

OVERVIEW OF HEALTH SYSTEM PERFORMANCE IN MEXICO • Indicators from health at a glance 2017

Better performance than OECD avarage

Worse performance than OECD avarage

Access

Quality

Resources

Beds per capita

Nurses per capita

Doctors per capita

30-day AMI mortality

Asthma and COPD admissions Out-of-pocket (OOP) share of household consumption

Population coverage

Air pollution

Ischemic hearth disease mortality

Life expectancy (F)

Life expectancy at age 65

-2 SD

Life expectancy (M)

-1 SD

Smoking

+1 SD

OECD

Higher than OECD avarage Risk Factors

Obesity

Health Status

Alcohol consumption

+2 SD

Healthcare expenditure

OECD Percentile 25-75

Lower than OECD avarage

MEXICO GDP HEALTHCARE EXPENDITURE BY SECTOR

HEALTHCARE GROWTH RATE THROUGH 2020 Transition Economies

7.5

Western Europe

39.5%

Latin America

Public sector

34.9%

EXPENDITURE PROJECTIONS:

2.4

Private sector

Global healthcare expenditure is expected to reach US$8.7 trillion by 2020, according to Deloitte.

25.6

Home care by relatives/friends

Asia & Australasia

4.3 North America

4.2

The global GDP spent on healthcare is expected to rise slightly, from 10.4 percent in 2015 to 10.5 percent in 2020. (Deloitte)

Middle East and Africa

CURRENT OECD COUNTRY EXPENDITURE ON HEALTH (percent of GDP)

78.4

70.8

• Growth is expected to come from more healthcare expenditure in developing countries and expansion of services in developed countries

60.8

83 23.8

12.4

32.1

15.1

51.6 40.4

84.2

70.1

9.8 12.9

78.3

16.5

100

Government And Compulsory Health Insurance Schemes In 2017 Out-Of-Pocket Expenditure In 2016 Or Nearest Year

14.6

81.8

11.1 0

• Turkey

• Japan

• France

• Spain

• Germany

• UK

• Chile

• Mexico

• Canada

• US

100

• Obesity and aging-related diseases continue to raise expenditure for lower and middle-income countries

ANNUAL GROWTH RATE OF CURRENT EXPENDITURE ON HEALTH, PER CAPITA, IN REAL TERMS (percent) 12 10 8 6 4 2 0 -2 -4 2005

2006

2007

2008

2009

2010

2011

2012

• Turkey

• Japan

• France

• Spain

• Germany

• UK

• Chile

• Mexico

• Canada

• US

2013

2014

2015

2016

2017

Source: ENSANUT 2016, OECD,INEGI, Deloitte

| ANALYSIS

THE GHOSTS OF HEALTHCARE PAST, PRESENT AND FUTURE When President Enrique Peña Nieto took office almost six years ago, he promised to work toward universal healthcare, an elusive goal the Mexican health sector has been chasing for years. As President-elect Andrés Manuel López Obrador prepares to take office, challenges old and new await

The responsibilities of Mexico’s Ministry of Health are

activity. Other risk factors she identified were unsafe sex,

substantial. The institution must look after the health of

tobacco, alcohol and illegal drugs consumption and lack

127 million individuals while leading all national policy

of road and workplace safety. Juan also identified three

on healthcare matters, coordinating institutions within

main problems that hindered the state’s ability to provide

the National Health Service and managing all healthcare

access to care. The first was the current model of healthcare,

infrastructure, among many other tasks. Even though the

focused on curing diseases instead of preventing them. The

ministry has a lot on its plate, its current vision goes even

second was the lack of implementation of multidisciplinary

further, with an ultimate objective to implement a universal

public policies that involve different institutions; to do so it

healthcare system that provides equal, sustainable and

would be necessary to guarantee an efficient coordination

integral attention to all individuals, placing special attention

between state and federal strategies to ensure that healthcare

on vulnerable groups.

permeated the action plans of other sectors. Finally, the third challenge was the unequal benefits and the participation of

Mercedes Juan López, who was appointed Minister of Health

fragmented, vertically integrated institutions that, she said,

by Peña Nieto in December 2012, set this as her main goal

went directly against the purposes of an inclusive country

when she was named to the position. “Peña Nieto asks that

and prohibited the provision of continuous care through an

all Mexicans and medical professionals commit to making

individual’s entire life.

effective the right to healthcare protection,” Juan said during her inauguration speech. This was necessary “to

To address these challenges, Peña Nieto’s National

achieve an inclusive Mexico without poverty through the

Development Plan 2013-2018 included a set of six objectives

consolidation and creation of effective programs that lead

for healthcare, clearly delineated in the Ministry of Health’s

to development and equality in the country.” Juan stated that

Sectorial Health Program 2013-2018. The first was to

her administration would work toward providing all Mexicans

consolidate all actions related to health protection and health

access to basic and specialty care, including surgeries.

and disease prevention. The second was to guarantee access to quality healthcare services to all people. The third was

When delineating the strategy to achieve this goal, Juan

to focus on reducing the infant mortality rate. The fourth

mentioned the challenges of overcoming Mexico’s changing

was to close healthcare gaps across social groups. The fifth

epidemiological profile caused by an aging population and

was to guarantee the efficient use of healthcare resources

unhealthy habits, such as bad nutrition and lack of physical

and the sixth was to work toward a National System of

Universal Health led by the Ministry of Health. Within the

clear example is vaccination. For over 40 years we have been

Sectorial Health Program 2013-2018, Juan stated that this

dedicated to vaccinating the population. There is no rubella

system would be achieved by strengthening regulators and

or congenital rubella in Mexico, we have controlled diphtheria

the cooperation among different sectors. This system, she

and tetanus and neonatal tetanus has been eliminated,” Narro

added, would also focus on providing services based on

told Mexico Health Review 2017.

primary care, generating and managing appropriate budgets and promoting scientific research.

During his years in office, Narro prioritized fighting chronic diseases as the way to improve care. “Diabetes is one of

These goals were ambitious at the time and they continue to

our highest priorities, but it is difficult to tell which is the

be so despite the progress made on several fronts. Among the

most important because there are many, such as cancer and

Peña Nieto administration’s achievements were strengthening

heart disease. When speaking of priorities, I often speak of

COFEPRIS, Mexico’s regulatory authority for medications,

diabetes because it generates the most deaths as a single

medical devices, foodstuffs and cosmetics, among many

cause. Cardiovascular disease may cause more deaths when

other products. This council helped increase access to care

grouped together but the causes are many and can be split

through the approval of 540 generic versions of previously-

into three main groups: heart attacks, hypertension and

patented medicines, which allowed the reduction of up

others,” said Narro.

to 70 percent in the price of drugs. Moreover, healthcare penetration expanded during that time. While in 2012 only

Although the Ministry of Health made several significant

78.6 percent of the population had health coverage from a

contributions to improve quality of life and life expectancy

public healthcare institution, by 2016 almost 86.6 percent of

during Peña Nieto’s time in office, the administration left

the population was affiliated to a system such as IMSS, ISSSTE

several areas that will be addressed during López Obrador’s

or Seguro Popular, according to ENSANUT 2016.

presidency. “Peña Nieto’s administration has driven the creation of a universal health system. We now need to sit

NARRO TAKES THE HELM

down with IMSS and ISSSTE and figure out a common tab that

Juan left the Ministry of Health in 2016 and was replaced

will allow us to easily exchange services and allow affiliates

by José Narro, a surgeon from UNAM with a master’s in

of Seguro Popular to go to IMSS or ISSSTE facilities,” says

communitarian medicine from the University of Birmingham

Antonio Chemor, National Commissioner of Seguro Popular.

and who continued her legacy. While coordinating the Joint Session with the National School of Medicine in 2018,

Furthermore, the rate of diabetes, chronic diseases and obesity

Narro named as some of the main achievements of the

continues to rise while the sector has also had to deal with a

administration the reduction of HIV transmission from mother

smaller healthcare budget that made Mexico one of the lowest

to child by 40 percent, maternal mortality by 13 percent

investors in healthcare in the OECD. On Aug. 9, a day after

and dengue by 70 percent between 2012 and 2018. Other

López Obrador was officially named President-elect, Narro

achievements, he said, included the introduction of the HPV

called for the future government to increase its healthcare

vaccine to protect girls from cervical cancer. “This country has

expenditure and to tackle obesity-related diseases. Speaking

been lucky with public policy in several programs, otherwise

at the LV Ophthalmology Actualization Course in Mexico City,

we would not have been able to achieve what we have. A

Narro was frank: “We have a very serious problem,” he said.

Novo Nordisk researcher holds an eppendorf

VIEW FROM THE TOP |

ATTENDING THE HEALTH OF COUNTRY’S LARGEST METROPOLIS ROMÁN ROSALES Minister of Health of Mexico City

Q: What role does the Ministry of Health of Mexico City

those for dialysis, hemodialysis, laparoscopic surgery,

play in promoting prevention and access to care?

hemodynamics and blood testing, among many others. The

A: While it is often said that individuals should be

Ministry of Health of Mexico City prioritizes universal, equal

responsible for their own health, it is also the responsibility

and free healthcare for everyone in the city. All our services

of institutions like ours to properly educate residents on how

are free of charge thanks to two budgets: the federal and

to care for themselves. According to WHO, it is necessary

the local. These services are free not just for residents of

to focus on cost-effective initiatives, such as reducing salt

Mexico City but also for people visiting the city.

consumption, eliminating smoking and replacing saturated fats. In addition to providing care for those who are already

Q: What progress has been made to achieve universal

sick, it is necessary to ensure that those who are healthy

healthcare?

remain so.

A: Mexico City Health Law specifies that in the CDMX “inhabitants, regardless of their age, gender, economic

The Ministry of Health conducted 3,760,590 consultations

or social condition, ethnic identity or anyone else, have a

in 2017, mostly to address respiratory infections, obesity-

right to health protection, which will be governed by the

related ailments and psychiatric issues. That year, we

principles of universality, equity and gratuity.” The principle

performed about 75,000 surgeries, most of them related

of universality emphasizes that coverage of health services

to obstetrics, followed by appendicitis and accident-

must respond to people’s health needs and the principle

related-injuries.

of equity establishes the obligation of local authorities to guarantee access to health services to the inhabitants of

Q: Considering the accelerated growth of chronic diseases,

the city and free of charge, as is set out in the regulations.

what needs to be done to ensure the health system

By being affiliated with both modalities of federal and local

keeps pace?

financing, the benefits for the population are strengthened

A: It is necessary to reinforce primary care because the

and out-of-pocket expenses are avoided.

main economic pressure will come from chronic diseases. diabetes, hypertension, hepatic diseases, cardiovascular

For this reason, SEDESA provides diagnostic, healing and

diseases, addictions and lung diseases are among the

rehabilitation services at no cost for the first and second

ailments that are influenced by lifestyle. It is also necessary

level of attention to the population that has no access to

to develop a multidisciplinary approach, integrated by

social security through an employer. The "physician in

medical personnel and trained health professionals, that

your house" includes general and specialty consultations.

allows the participation of the individual in his own health.

SEDESA also offers services related to dental and other

Currently, people can suffer several chronic illnesses at

areas related to health, such as laboratory studies, cabinet

the same time; this is called multimorbidity and requires a

and x-rays, therapy sessions rehabilitation, attention for

holistic approach to patient-centered attention instead of

immediate childbirth and puerperium, the management

tackling each disease individually.

of the newborn, the performance of surgical procedures, hospitalization, emergency care and the prescription of

Q: How are costs related to the growing number of diseases

medicines.

being managed? A: Strategies to contain budgets include public-private associations, consolidated purchases and integrated

Ministry of Health of Mexico City (SEDESA) is the government

services. Consolidated purchases have been a huge

organism responsible for providing access to care for all city

advantage as they allow us to buy a large number of

residents. It aims to improve the quality of life of residents

products at lower prices. Integrated services include

through preventive campaigns and timely medical intervention

| VIEW FROM THE TOP

INCREASING SERVICE QUALITY BY OPTIMIZING EXPENDITURE ANTONIO CHEMOR National Commissioner of Seguro Popular

Q: How has Seguro Popular reinforced its mission since its

In the past, we had problems because the states did

creation in 2004?

not contribute economically. To address this, in 2017 we

A: We have made four important changes. The first is that

forced states to provide at least 30 percent of their state

states now have five working days to transfer the money

contribution and, additionally, states must provide proof

that goes to the health sector. The second important

of having received and spent federal resources on health

change is how the money is transferred, which is done

services. If a state is not able to corroborate that they spent

partly through state finance ministries and partly through

the money on health services, then they no longer receive

the federal treasury. We started using this method with 30

funding. The second condition is that they must comply

percent of the total money allocated and in 2018 we will

with economic compensation requirements.

boost the amount transferred this way to 50 percent of the MX$54 billion that states are expected to receive. States do

Q: Seguro Popular has prevailed through three

not have direct access to the money but must go through a

administrations. What has been the key to its success?

digital platform, which prevents them from using the money

A: We have achieved transparency and accountability

for other purposes. The third important change in the law

regarding the resources that are sent to the states, which

is related to economic compensation. Seguro Popular was

in 2017 totaled MX$68.7 billion. In 2016, we began to work

localized in the country’s 32 states but the changes have

intensively on quality and implemented a program of

allowed the agency to become national. A fourth change in

health managers that includes 1,576 individuals working in

the law relates to transparency and accountability.

the medical centers and acting as a link between Seguro Popular and affiliates to guarantee their rights. According

In 2016, Seguro Popular spent MX$2 billion in affiliation and re-affiliation programs to detect people who do not have medical coverage

to the OECD, since 2004 Mexicans’ medical expenses have dropped by approximately 12 percent thanks to services such as Seguro Popular. Q: How is the Seguro Popular working to make health a priority for the new administration? A: Seguro Popular is a scheme for all those people who do not have any other medical coverage. With the creation of almost 3 million new formal jobs, Seguro Popular has

Seguro Popular pays a premium to guarantee attention

successfully reduced the number of registered affiliates. In

to the three largest portfolios that we manage. The first is

2014, we had over 57 million Mexicans affiliated. Between

the Universal Catalog for Health Services (CAUSES) and

2016 and 2017, we reduced the registry to approximately

includes 1,663 diseases. The second portfolio is catastrophic

54 million Mexicans. Peña Nieto’s administration has

expenses, which includes 61 diseases that tend to be the

also driven the creation of a universal health system. We

most expensive and most complex. The third portfolio is

now need to sit down with IMSS and ISSSTE and figure

Medical Insurance XXI Century, which includes diseases that

out a common tab that will allow us to easily exchange

impact children up to 5 years old. The premium for this year

services and allow affiliates of Seguro Popular to go to

is MX$3,123.99 per person, a figure that is updated according

IMSS or ISSSTE facilities. This is something that needs to be

to the country’s inflation rate. In 2016, the premium was

consolidated in the next presidential administration.

MX$3,022.44. Add on the 3.36 percent rate of inflation and that gives you this year’s premium. This amount is enough

Q: Are there any plans to generate exchange services, not

to cover the 54 million Mexicans that are affiliated with

only with public institutions but with private health service

Seguro Popular.

providers?

SEGURO POPULAR AFFILIATES (million) SEGURO POPULAR AFFILIATES (MILLIONS) 60 50 40 30 20 19

10 0

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Source: INEGI Source: INEGI

A: Those states that have weak health-related infrastructure

A: We do not buy things per se; we give money to the state

and that cannot cope with the number of patients they

and the state concludes the acquisitions. However, we have

have are authorized to hire services from private hospitals.

put in place certain conditions to make sure that there are

For instance, Hospital Puerta de Hierro in Nayarit, which

no abuses. For instance, with medicine, we set a maximum

is a private hospital, is subrogated by the Health Ministry

price that we get from IMSSâ&#x20AC;&#x2122; consolidated purchases. We

of Nayarit. I hope we continue to have the opportunity to

have put in place a system that detects when a state makes

participate with private hospitals, but I believe that the

a purchase above the reference price and automatically

consolidation of the public health network must be a priority.

alerts that state. This also happens with human resources. The system detects whether there are duplicated names on

Q: What technology strategies are you implementing to

a payroll. This has allowed us to control the money and to

increase coordination among hospitals?

guarantee that there are no abuses.

A: Among the commitments that then presidential candidate PeĂąa Nieto agreed to was the creation of

Q: What has Seguro Popular done to generate awareness

oncological hospitals, which have been built in states such

and attract those segments of the population that do not

as Tamaulipas, Coahuila, State of Mexico and Quintana Roo.

have coverage from other institutions?

However, we are also building hospitals in other states, such

A: In 2016, we spent MX$2 billion in affiliation and re-

as Baja California Sur, Guerrero and Oaxaca. The lack of

affiliation programs aimed at detecting the open population,

specialist doctors has led us to embrace technology. We

or people who do not have medical coverage from any

have found that some people from small towns stop going

institution. Still, I believe the public sector can provide

to doctors or taking their medicines because they do not

health coverage for the entire Mexican population. There

have money to make a trip to the city. For this reason,

might still be a small number of Mexicans without access

we are heavily supporting technological innovations like

to health services, so we will continue with our campaigns

telemedicine projects that will allow specialists to provide

to convince people who do not have coverage to affiliate

consultations to patients in small towns.

with Seguro Popular.

Q: How is the institution ensuring the welfare of patients

Q: What is Seguro Popular doing to promote prevention,

with diseases like HIV and cancer when dealing with

especially related to chronic diseases?

budget cuts?

A: Every year, we force states to apply at least 20 percent

A: In 2016, our budget was reduced to MX$75.4 billion

of what they receive to prevention. This means that almost

and in 2017 it fell to MX$68.7 billion. When looking at the

MX$11 billion each year is spent on health promotion and

total number of people that Seguro Popular, IMSS, ISSSTE,

prevention. The Deputy Ministry of Health Promotion

SEDENA, ISSFAM, ISSEMyM and other social security

and Prevention of the Federal Ministry of Health sets the

institutions attend to, we can see that almost the entire

guidelines and the programs that states must enact.

population has health coverage. It is our belief that the new administration should not cut the budget for health services.

Seguro Popular is a health institution created in 2004 with operational, administrative and technical independence. It

Q: How does Seguro Popular guarantee a fair distribution

offers health coverage through public or private infrastructure

of the concessions in tenders?

to the informal sector

| VIEW FROM THE TOP

IMPROVE THE FUTURE WITH INFORMATION AND PREVENTION JORGE GUERRERO Medical Director of ISSSTE

Q: How is ISSSTE caring for patients with rare and

comprehensive programs that include the support of a

chronic diseases?

doctor, a nurse, a dentist and the consulting services of a

A: Chronic-degenerative diseases are the main causes

nutritionist. These units also develop physical activities that

of death in Mexico. In this area, the institute focuses on

help children stay active. We want to raise awareness about

prevention, damage control and healing care. Rare diseases

the dangers that unhealthy habits can represent for health.

are highly expensive to treat. However, ISSSTE is a pioneer in their treatment as it dedicates budgets to diagnose and

Q: How can ISSSTE keep costs low while providing

address them. The institute has a group of experts who

comprehensive care?

diagnose and treat these diseases in our specialist hospitals.

A: Mexico has had privileges in the acquisition of medicines generated by consolidated purchases, a model that began

Q: What long-term policy is necessary to address Mexico’s

in 2012 and has been followed by other institutions.

chronic diseases?

Although this model has been working successfully, in the

A: It is necessary to continue the implementation of

case of patented medications it is necessary to negotiate

prevention campaigns that provide information about the

with the manufacturer. The institution also plans to explore

consequences of unhealthy habits, since many chronic

other options to acquire medicines, including the pay-per-

diseases can be avoided with adequate prevention.

result model. Nevertheless, the regulations have to be clear

For example, ISSSTE has campaigns against smoking,

to ensure objectivity in the interpretation of the results.

a habit that reduces life expectancy by around 15 years and influences the most chronic ailments like diabetes,

Q: How does ISSSTE invest in cutting-edge technology?

hypertension and cancer. We have been a pioneer in the

A: It is possible for ISSSTE to acquire the latest technology

development of 155 clinics to help smokers quit. These

through the implementation of integrated services, like

clinics are distributed in all 32 states. The therapy starts

the installation of equipment for hemodialysis, endoscopy,

with an explanation of why addiction is a disease. We

minimally invasive surgery, cardiovascular surgery and

then offer treatment to help the patient quit smoking. The

general anesthetics. This model allows us to offer our

attention we provide is first class and comparable with any

members the best treatments.

in the world. Q: Many CROs are interested in working with ISSSTE. What Q: Is ISSSTE working on other prevention initiatives for

should they do to achieve this?

chronic diseases?

A: Collaboration with CROs is possible thanks to Fundación

A: ISSSTE has led prevention efforts throughout the

ISSSTE, which was created in January 2017. New agreements

country. For instance, all our clinics and family medical

will permit clinical research on products that have a sanitary

care units have a unit called Preven, which promotes care

registration but are not part of ISSSTE’s basic list.

before individuals become ill with chronic diseases. Our child development units, for example, care for our workers'

Q: What are your priorities for 2018, considering the

children until they turn 6. These units have an overweight

change in the federal administration?

rate below 2 percent, which was achieved thanks to the

A: We will continue to focus on ISSSTE’s affiliates and guaranteeing the availability of medical supplies and care with empathy as we have been doing. These policies

The Institute of Safety and Social Services for State Workers

should continue beyond this administration as ISSSTE

(ISSSTE) is the second-largest of Mexico’s public health

belongs to its workers. ISSSTE has proven its quality and

institutions, providing health and social services to almost 13

its capabilities as an excellent provider of care and a good

million government workers

buyer of medical supplies.

VIEW FROM THE TOP |

GENETICS FOR CUSTOMIZED HEALTH SOLUTIONS MARCO NAVARRETE Deputy Director of Health Services at PEMEX

Q: In 2017, you said your priorities were to promote

registers greater average diabetic control by having around

preventive care and to make doctors available in the

33 percent of our patients at lower biological parameters.

workplace. How has this played out?

We have achieved standards similar to those in Europe with

A: PEMEX continues to emphasize prevention as one of its

a strategy based on results and the consolidated purchase

core priorities, but we have taken a different approach to our

of medicines. Our clinical practices comply with CENETEC

idea of having doctors in every workplace. PEMEX wants to

regulations and we invest heavily in the training of our health

boost health from a productivity perspective, which means

workers, with approximately three courses per year. PEMEX’s

that we will measure health by the impact it has on the

objective is to generate a complete ecosystem that promotes

company’s performance. PEMEX has 1.5 beds per thousand

an integral health model.

people while the average at other health facilities is 1.9 beds. However, PEMEX does not have a shortage of beds as our

Q: PEMEX handles a significant and reliable amount

hospitals have a 65 percent occupied capacity. This means

of health data. How is this used to contribute to the

our affiliates are not hospitalized as often as the average

health sector?

population thanks to our focus on preventive medicine and

A: The PEMEX magazine Medical Journal is available to

productivity. PEMEX does not want to build more facilities,

the public online. Within the health unit, we carry out two

it wants healthier people.

daily video conferences with all our members to discuss the topics included in the magazine. We want our magazine

Q: What are the advantages and limitations of PEMEX’s new

to be known across the health industry. In addition, we

approach to health?

want to share our health approach with the industry by

A: The PEMEX Health Unit is measured differently than other

providing a message that touts strategic investment and

systems, such as IMSS and ISSSTE. Health services are based

prevention models. All our actions are oriented to investing

on financial indicators but this does not mean that PEMEX

in the management and control of diseases so that our

seeks to reduce its cost per capita related to health. The

employees can enjoy a good quality of life and maintain

indicators are designed to measure how the cost per capita is

their productivity.

invested and the effect it has on labor productivity; therefore, each financial study carried out promotes the most profitable

Q: ACROM and INMEGEN will conduct clinical studies and

opportunities, which helps PEMEX to save in the medium

research with PEMEX. What is the project’s goal?

and long-terms. The PEMEX population is genetically related

A: PEMEX’s working population is characterized by

because when oil was nationalized in 1938 the oil zones

endogamic genes and this information is stored in our

were almost uninhabited and without infrastructure. PEMEX

Electronic Medical Records (EMRs) database. From that

invested in the generation of communities with schools,

database, we have selected around 500 patients from all

hospitals and other services. As a result, the company has

over the country who we will study to map the genetic

an inbreeding gene that makes its population susceptible to

profile of our oil workers. PEMEX expects to include another

certain diseases, like the prevalence of diabetes, which at 17

500 people in the study by the end of the year. As a result

percent is twice the national rate.

of this study, we hope to purchase precision drugs to better manage diseases such as diabetes and hypertension.

Q: Mexico is going through an epidemiological change. How has PEMEX prepared its health services for this change? A: It can be said that PEMEX is a mirror of the Mexico of

Petróleos Mexicanos (PEMEX) is a productive enterprise of the

the future because 26 percent of its population is over 65

state that produces, transports and refines oil and natural gas

years old. However, the company’s life expectancy is 84.5,

in Mexico. Its Health Services Unit offers medical assistance to

higher than the Mexican average. Also, the Health Unit

PEMEX workers, retirees and their families

| VIEW FROM THE TOP

INCREASING ACCESS THROUGH NEW FINANCIAL MODELS CRISTÓBAL THOMPSON Executive Director of AMIIF

Q: What new alliances is AMIIF developing to promote

IMSS has been extremely welcoming and the institute

access to innovative medicines in Mexico?

is greatly interested in incorporating these new models.

A: The association has done significant work in creating

Once this agreement is finalized, we will document

alliances with other business groups in the country

it and try to implement it in other public institutions.

while also joining business councils like COPARMEX

Some years ago, the industry was completely unwilling

and CONCAMIN. In December 2017, AMIIF signed an

to discuss new payment models, but it is increasingly

agreement with the Government of Queretaro that will

welcoming these as a strategy to address the lack of

address access to market.

access to medications. Now that the industry is willing to adopt these models, the challenge will be properly

This agreement has three goals. The first is the generation

monitoring patients to measure the results.

of data on the impact of health on productivity and competitiveness in the state, following the line of work

Q: What role will technology play in measuring

we did in the Automotive Cluster of Guanajuato. The

the outcomes?

second is to foster R&D and clinical research investment

A: We need public institutions to define the type of

in the state. To achieve this, Queretaro is now analyzing

information they need to measure results. Once we

its capabilities in terms of researchers and research units.

have that, we can determine the areas to measure.

The third is to generate innovative access models so

Potential measuring strategies might involve wearables

public institutions can increase the services they provide.

or phone calls, but this will completely depend on each agreement. Once institutions are ready to incorporate

The agreement with the Government of Queretaro came

the model, pharmaceuticals will have to analyze how to

after many meetings to understand the state’s vision for

provide them with an integral solution, for instance by

the industry. Once the objectives were established, we

allying with technology providers. Global pharmaceutical

formed a working group to determine how to measure

companies have invested significantly in technology and

the state’s productivity. We have also signed similar

have created many international partnerships so they may

agreements with the Autonomous University of Nuevo

be well-positioned to monitor patients in Mexico.

Leon (UANL) and in 2018 we hope to incorporate one or two more states through similar agreements. We are

These payment models are already being used in Mexico

looking for states that are willing to prioritize healthcare

but in a very limited fashion. It will take approximately

and bet on clinical research, innovative payment models

two more years for them to be truly relevant in the

and competitiveness. So far, Morelos and the State of

market. The main barrier is to develop and implement

Mexico have contacted us.

a way to measure success, which is very important. Mexico is a pioneer in the incorporation of these models

Q: What are the main areas of opportunity when

in Latin America.

introducing these models into the public sector? A: Within AMIIF, we noticed that access to innovation

Q: How will the incorporation of the monitoring

remains below 10 percent. Innovative medicines have

technology be financed?

many positive benefits, but patients must have access. We

A: While the expense may seem large at the beginning,

are promoting a new payment model wherein institutions

once the agreements are finalized it will be justified

would pay for positive results instead of units, which

because the result will be the development of predictable

would require the monitoring of the patient’s condition

models for medical care. Also, the information generated

throughout treatment and an accurate diagnosis of

and collected can be applied to other areas of medical

the outcome.

care. AMIIF only tracks how many prescriptions

have been issued, but we have no data on how many patients are following the treatment. If patients are not under controlled conditions, treatment costs can rise exponentially.

Access to pharmaceutical innovation remains below 10 percent

Q: How can these models be used to finance payments

AMIIF follows a long-term plan that we began

in the private sector?

implementing four years ago and we are only now

A: While COFEPRIS has made innovative molecules

seeing results. We will follow this plan until 2024. It is

available for purchase in Mexico, there is little access

not possible to advance quickly in this sector as it moves

to these medications at private institutions because

slowly. Both private companies and governments need

insurance penetration remains low. We have discussed

to understand this.

strategies with AMIS to help pharmaceuticals get closer to insurers so that together they can develop new models

Q : W h a t i s A M I I F ’s s t ra te g y to i n c re a s e t h e

to improve access.

competitiveness of the pharmaceutical sector? A: Our strategy rests on three axes. The first is to measure

Q: How is the Mexican pharmaceutical sector adapting

the value of pharmaceutical innovation. The second is

to technological changes?

making healthcare a priority for the country by creating

A: New companies entering Mexico will have a deep

awareness of its direct relationship to productivity and

impact on the existing pharmaceutical environment and

competitiveness. The third is developing strategies in

redefine the rules of the game. AMIIF’s agenda is now

which the pharmaceutical sector can contribute to the

beginning to incorporate digital health as we are certain

country’s finances. We are analyzing how finances can

that this area will play a significant role in the future.

be improved to give the public healthcare sector more

Our agenda for this year mentions digital health without

resources by allying with the private sphere. There is a

too many details. We are still analyzing the impact that

large opportunity to use the latter to increase resources

digital health could have on the sector and generating a

in the public arena.

preventive strategy to adapt. Q: What other areas are priorities for AMIIF? In 2018, we will focus on identifying and speaking with

A: We are targeting clinical research because processes

the new players entering the sector to determine which

must be improved to make approval times competitive

areas will change. This will not be easy as the industry

with other countries. This area has improved significantly

fears change. For instance, it took many years for AMIIF

and many players, including COFEPRIS, ProMéxico,

to incorporate ACROM and CROs. AMIIF is analyzing

CONBIOETICA, ISSSTE, IMSS, federal hospitals, national

how to create a forum to give players a voice and to

institutes of health and many companies are working to

catalyze new agreements. We participated in the First

shorten approval times even more. All the industry groups

Week of Digital Innovation and we are trying to create

we have met with agree that this is a priority area to

an innovation week that incorporates all players in the

attract investment to Mexico.

healthcare sector. A significant project in which AMIIF is participating Q: How are AMIIF ’s companies adapting to the

addresses antimicrobial resistance, a critical area that is

uncertainty created by the renegotiation of Mexico’s

expected to cause 10 million deaths by 2050. AMIIF has

trade agreements?

joined an alliance that brings together companies from

A: All industry members are closely following the

100 countries, including the pharmaceuticals, generics

modernization of NAFTA with full understanding of its

and medical devices segments. The pharmaceutical

complexity. Furthermore, the industry is looking beyond

industry is taking a leading role in the prevention of

NAFTA to other agreements, such as the TPP11. AMIIF

bacterial resistance and has invested about US$2 billion

companies have been operating in Mexico for 80 years

to date. While the industry is extremely invested, it needs

and the strategies they are incorporating now were

the support of governments and other players to address

developed in the early 2000s. The strategies developed

this looming problem.

today will come into effect in the next 15 years, since it takes a long time to develop new molecules and to receive approval. The sector focuses on mid to long-term

The

strategies rather than short-term considerations. Mexico

Industries (AMIIF) brings together the main pharmaceutical

is very attractive for the pharmaceutical sector due to its

companies that focus on the development of innovative

large population and many trade agreements.

medicines. The association now incorporates 40 members

Mexican

Association

Pharmaceutical

Research

| VIEW FROM THE TOP

A STRATEGIC SECTOR FOR THE DEVELOPMENT OF MEXICO RAFAEL GUAL Director General of CANIFARMA

Q: What advances have been made in the contract

the clinical research hub for Latin America, and for that we

between IMSS, CANIFARMA and COFEPRIS to facilitate

have an enviable infrastructure.

clinical research? A: The plan is moving forward. We continue to work on

Q: The CANIFARMA Award 2017 was awarded to a study

several projects, although not as many as we would like.

that showed Transkrip, a cervical cancer drug, can also

But we have brought more research into the Seguro Social

be used to treat skin lymphoma. How is the chamber

than ever before. The potential is very high as we could do

promoting the submission of projects like this?

almost 10 times as many projects than what we are doing

A: In general, the award is promoted by word of mouth. It

right now. Along with the universal trends in research, the

has been around for many years and every year we receive

priority areas are chronic diseases, diabetes, cardiovascular

projects that are more oriented to practical applications.

disease, neuroscience and cancer.

Now, we are seeing projects that have industrial and social benefits and applications. We also want to organize an

Q: CANIFARMA has several goals for 2020 in areas that

innovation fair to connect those researchers who participate

include sanitary regulation, research and innovation and

in the award with pharmaceutical companies, thus fostering

economic development and industry policy. How are you

direct applications.

working in each area? A: I believe we have moved forward in many fields. We are

Q: Thanks to new guidelines, pharmaceuticals can

working to elaborate the Program of the Pharmaceutical

advertise their products on TV, radio and in print. How

Industry Development (PRODIF) 2019- 2024 and the main

will this impact the industry?

factors are the same as PRODIF 2013-2018, but with a

A: Companies might disagree with my opinion but the

different order of priorities. For this new plan, the right to

new COFEPRIS guideline homologating the advertising

healthcare is the priority, especially as it relates to access

regulation regarding personal hygiene products with that

to new technologies and research and the adoption of new

for antibiotics and antivirals does not respect several legal

therapies. The second axis is innovation and research. The

dispositions of the General Health Law. A company that

third is industrial policy and the fourth, regulation. It is not

eventually applies this guideline could be breaking the

that we are diminishing the importance of regulation but

regulatory rules. As a chamber we are going to promote

because we have made progress on this topic we decided

a nullity trial because if a judge rules that the guideline is

to focus our attention in other areas.

correct, this will work as a defense for the pharmaceutical company in any situation.

The Ministry of Health recognizes the pharmaceutical sector as for the Mexican economy. We have been waiting

Q: What is the view of the chamberâ&#x20AC;&#x2122;s members regarding

for a joint declaration from the Ministry of Economy and

the NAFTA renegotiation?

the Ministry of Health that highlights the importance of

A: This is an area in which the pharmaceutical industry

the industry. This will open many doors with CONACyT,

is not greatly impacted. There are many pharmaceutical

ProMĂŠxico and Bancomext that will result in fiscal stimulus,

companies established here. Moving a pharma plant entails

just like in other strategic sectors. The priority is to become

many complications. New permits, new licenses and if the company is an exporter it must be visited by the authorities of other countries. We are shielding the topic of rules of

The National Chamber of the Pharmaceutical Industry

origin. All countries agree that a tax change related to

(CANIFARMA) works to develop the industry in Mexico with

pharma is not viable. The impact of NAFTA on the pharma

three main objectives: sanitary regulation, research and

industry in Mexico will be related to the impact on the

innovation and economic development and industry policies

overall economy of the country.

VIEW FROM THE TOP |

PREVENTION AND COMPLIANCE FOR THE HEALTH INDUSTRY JUAN MILLÁN SOBERANES Director General of CETIFARMA

Q: As a self-regulatory authority, how does CETIFARMA

National Academies of Medicine, Nursery and Pediatrics, the

contribute to Mexico’s healthcare?

National Association of Private Hospitals, UNAM and IPN’s

A: The ethical principles that should lead the pharmaceutical

medical schools, the medical college, the pharmaceutical

sector are universal, as patients should receive the same

industry and CONBIOETICA.

treatment anywhere in the world. One of our main goals is to make sure that all volunteers are safe and that studies

Q: How will CETIFARMA’s alliance with ACROM influence

never incorporate vulnerable people. The core of any self-

the implementation of clinical trials in Mexico?

regulatory authority lies in prevention and compliance. The

A: CROs manage clinical trials performed with both healthy

pharmaceutical industry produces goods that are essential

and sick volunteers. For that reason, it is necessary to

for the population and it is necessary to guarantee that all

closely monitor them to identify any adverse effects. To

the products comply with the highest production standards.

do so, it was necessary to ensure that CROs adhere to the

This is even more important in the case of vaccinations.

same ethical principles as pharmaceutical companies by

Vaccine manufacturers must ensure that Mexico’s

following three strong standards of patient recruitment.

vaccination rate stays between 90 and 95 percent as part

First, ensure that volunteers are well-informed about the

of a federal effort to guarantee access to vaccines for all

risks and benefits of participating in a clinical trial. Second,

Mexicans.

volunteers must sign their informed consent to participate in that clinical trial. Finally, the CROs should provide care

Q: How would you describe CETIFARMA’s contribution in

to those patients who suffer any adverse effect during the

the development of safe medications?

trial. Alongside ACROM, we created a new best-practices

A: CETIFARMA bases its actions on three axes. First,

code in February 2018 and CROs will provide us with

develop ethical codes for pharmaceutical companies to

information about their clinical trials. The standards we

ensure that all products follow national and international

follow were created by the International Federation of the

quality standards. Second, CETIFARMA’s self-regulation

Pharmaceutical Manufacturers and Associations (IFPMA).

system guarantees that the interactions of pharmaceutical employees with patient associations and medical institutions

Q: What is CETIFARMA’s role in the development of

follow ethical principles. The third axis is monitoring

national and international policies?

compliance and notifying deviations to infringers so these

A: As part of the Asia-Pacific Economic Cooperation (APEC)

can be corrected. If the deviation is not corrected, we

forum, CETIFARMA has contributed to the generation of

impose sanctions. CETIFARMA’s role is to complement

an ethics code for the region. We are also part of APEC’s

regulatory authorities, not to substitute them.

working group, where we share our progress, challenges and solutions for the rest of Latin America.

Q: How does CETIFARMA guarantee that its internal guidelines adhere to the current needs of the sector?

The Director of CETIFARMA is the only Latin American

A: CETIFARMA is a Council of Ethics and Transparency

member of the Ethics and Compliance Professionals

that comprises eight independent members from the

(ETHICS) Forum based in France. This forum is in charge

pharma industry and ensures that all its operations follow

of improving systems for regulating ethics.

the organization’s code. CETIFARMA closely adheres to the principles of impartiality, zero conflicts of interest and constant interaction with authorities, medical institutions

CETIFARMA is an organization with management autonomy,

and businesses. In 2007, we signed a consensus framework

responsible

for

drafting,

promoting

and

verifying

the

entitled Commiment for Transparency that brought

application of and compliance with codes of ethics and

together the will of the Ministry of Health, IMSS, ISSSTE, the

instruments of self-regulation and self-control

| VIEW FROM THE TOP

UNIFORM SYSTEM WOULD SPUR ACCESS, BETTER HEALTH MANAGEMENT FRANCESCA COLOMBO Head of Health Division at OECD

Q: The OECD has recommended more structural

because the determinants of obesity are multifaceted

changes for Mexico. How should the country approach

and complex to tackle. Mexico already has an ambitious

health reform?

National Strategy for Prevention and Control of Obesity and

A: The OECD’s 2016 review of the Mexican health system

Diabetes. This could be further strengthened, for instance,

suggested that the greatest challenge for the country is to

the national health program should include interpretative

create a more equitable, efficient and sustainable system

nutrition labels.

because IMSS, Seguro Popular, PEMEX and ISSSTE provide the population with care of different quality, accessibility

Q: Taxes on sugary drinks and foods have not yet proven

and results. Having a more uniform health system could

to reduce their consumption. What is your view?

help people have better access to medical care and help

A: Taxes on food and drinks are used to encourage people

government better manage the health of its population.

to improve their attitude regarding certain consumption, but it is also important that these strategies are

Q: In the last Getting it Right report, the OECD highlighted

accompanied by other measures like education, school-

several structural reforms the country has managed. How

based intervention, food labelling, regulation on advertising,

can the private sector get more involved?

primary-care interventions and so forth. A package of

A: Mexico’s spending on health is lower than most OECD

intervention is needed to tackle obesity. In addition, the

countries as the 5.8 percent of GDP allocated to health is the

Mexican government should take into account the specific

third-lowest share across OECD countries, and much lower

objectives it wants to achieve in terms of public health.

than the OECD average of 9 percent. From the point of view of health financing, the private share of health spending

Q: What measures would you suggest to improve

is also large – 41 percent of total health spending comes

healthcare access in Mexico?

from out of pocket household expenditures, signaling

A: Mexico has made many efforts to improve access to

low financial protection for individuals and the need for

medical care but more interventions are still needed,

improved coverage arrangements. As to service provision,

especially in terms of structural inefficiencies and inequities

the private sector should not be seen from a negative

of the system. One of the greatest challenges that Mexico

point of view as it can play an important role in delivery of

faces is to improve the organization of the health sector

services to the population. The challenge for Mexico would

to reduce its fragmentation. In addition, it is important to

be to improve the provision of services toward a model in

improve prevention and public health services. Prevention

which all providers cater to the needs of the population

is everyone’s responsibility.

regardless of their affiliation to a particular institution. Q: How can technology help improve access to care, Q: Mexico has the OECD’s highest rate of obesity and

especially in hard-to-reach regions?

related disease. What further political action can be

A: The role of technology is revolutionizing the health

implemented to face this problem?

industry. Today it is possible to leverage Big Data to

A: The only way to address obesity is through a

enhance disease surveillance, generate public health data,

comprehensive set of multisectoral policy interventions

manage epidemics and improve the performance of health services. This offers the opportunity to elevate the power of treatments and to pull together solutions that have

and

tremendous potential to improve the clinical management

Development (OECD) , created in 1961, aims to be a forum

of health, reduce health risks, and make health systems

to facilitate and coordinate policy on economic, social and

more efficient. Technology is filling gaps and improving

environmental matters

access to and implementation of health services.

The

Organization

for

Economic

Co-operation

VIEW FROM THE TOP |

WORKING FOR THE BENEFIT OF THE POPULATION JUAN MANUEL SOTELO Country Representant of PAHO/WHO

Q: How does WHO work to promote a better health system

Q: How can universal access and coverage be implemented

in Mexico?

A: The specific objective of WHO and PAHO is to cooperate

A: Ideally, universal health coverage and access should be

with national authorities to attain the highest possible

guaranteed by the health system and should be provided

level of health and to promote the creation of strategies in

by the public sector. My initial recommendation is to de-

line with the 2030 Agenda for Sustainable Development

link employment status from access to healthcare. Anyone

that benefit the health of the population. In Mexico, the

requiring health services should not need to have a job to

biggest area of concern that we have identified is non-

access the care that is needed. This is even more important

communicable diseases. Diabetes, obesity and diseases

in Mexico, where the job market is precarious and the

related to tobacco consumption are the most critical.

number of workers in the informal sector is growing.

National and international data clearly indicates that Mexico

Universal health coverage and access is not in conflict

is undergoing a diabetes epidemic, with 15.9 percent of its

with the private health sector. It means that the public

population suffering from the disease, while on average

sector has the responsibility to ensure that everyone has

OECD countries barely reach the 7 percent threshold. This

access to people-centered, timely, high-quality healthcare.

is a clear result of bad eating habits. Kids are also facing

Meanwhile, the private sector should operate according

this danger as one in every three children is overweight.

to the existing regulatory framework and services at an

Tobacco adds risks of other noncommunicable diseases,

affordable price.

like cancer and cardiovascular diseases, to the detriment of the population’s life expectancy.

Q: To which areas should Mexico direct investment in its health system?

Q: What actions should Mexico take to alleviate both

A: Mexico is investing about US$200 per capita in the

obesity and tobacco consumption?

first level of care, which is a very low amount. An increase

A: The country has made the courageous decision to declare

in health expenditure on the first level of care is difficult

overweight and obesity as national health emergencies,

to implement because it usually implies a decrease of

allowing for an increase in taxes on sugary drinks, for

investment in the second and third levels, which is where

example, as well as banning the use of specific advertising

hospitalization and other specialized care is carried out.

elements that promote the consumption of candy and junk

However, we must remember that taking care of the

food by kids. Taxes are an important tool to de-incentivize

population at the first level reduces the need to spend

the consumption of tobacco and sugar. Although the law

money on the second and third levels of care, and this

states that closed environments should be 100 percent

in turn results in more benefits for the population. For

smoke-free, it is not being respected.

people to see the advantages of a stronger first level of care it is critical for public institutions to work closely with

Q: What improvements could further advance the country’s

communities and the population in general, so they can

health system?

understand the direct benefits they can get from a higher

A: Mexico’s health system should adopt strategies

investment in the first level of care.

that enhance its efficiency and efficacy, and it should also promote a more determined approach on social determinants of health. For example, education must go

The Pan American Health Organization (PAHO) is the

hand in hand with health promotion because if it is properly

specialized health agency of the inter-American system and

implemented, kids can then provide a way to reach parents

has been affiliated with the World Health Organization (WHO)

and help raise awareness in relation to health issues.

since 1949. It is a UN agency

CONACYT researcher prepares a sample

VIEW FROM THE TOP |

A KEY PLAYER FOR INDUSTRY DEVELOPMENT ENRIQUE MONDRAGĂ&#x201C;N President of CANACINTRA

Q: What impact has COFEPRISâ&#x20AC;&#x2122; deregulation of medical

players that participate in bidding processes. Members of

devices had on its operations?

the private sector work very closely on these issues with

A: Deregulation has impacted more than 2,000 products,

institutions such as the Ministry of Public Administration

which represents a release of MX$5.4 billion; that is, a reduction

and local authorities to establish agreements for transparent

in the deregulatory box of 16 percent. For CANACINTRA,

operations in which the private sector participates in public

the most important element in the deregulation process is

resources, such as procurement or tenders.

that it allows the commission to focus its resources on the attention of other regulated products, reducing the response

The strengthening of the domestic production market,

times in the procedures to which many devices, products

based on reindustrialization, is another key element to

and medicines are subject. The prompt attention drives

increase national competitiveness. For CANACINTRA, the

the development of this important industrial sector, which

industrial policy must be articulated with monetary, fiscal

is strategic for the national economy because it generates

and economic policies.

exports worth US$3.6 billion. Q: How would CANACINTRA describe the manufacturing Q: What are the biggest challenges facing the medical

capabilities of Mexico compared to the rest of the world?

devices and medicines sector and how does CANACINTRA

A: The first comparative advantage is geopolitics. Currently,

support these sectors?

North America is the most competitive region in the world

A: The biggest challenge facing the medical industry is to

due to the commercial exchange that takes place between

comply with a very strict regulation that is on par with that

Mexico, the US and Canada, as well as with the rest of the

in the most important markets worldwide. Unfortunately, not

world. In the case of Mexico, this means that it has the

having international approval or recognition agreements on

material and logistical capabilities to participate successfully

medical devices, national industrialists must face very long

in global value chains. Thanks to the experience acquired

procedures in each country to which they intend to export.

during the last two decades, Mexico is a leader in innovation

This limits the growth potential of exports. For this reason,

and processes in Latin America. The north and Bajio areas

we consider it essential to follow the roadmap proposed by

add 389 first-generation industrial parks and more than 100

ProMĂŠxico, where medical devices are considered a strategic

clusters dedicated to diverse industries, from automotive to

sector for the national industry, and to provide support to

aeronautics.

industrialists with international certifications and effective promotion abroad. CANACINTRA has carried out several

Clusters and triple helix alliances are generating high-quality

commercial missions to bring the entrepreneurs of the sector

and low turnover jobs to attract local talent. There is also

closer to foreign markets, mainly with our partners in the

a consolidated structure where there are certified SMEs

Pacific Alliance, where we see a great business opportunity.

that generate intermediate and final world quality goods. Mexico has manufacturing capacities with high added value.

Q: What does Mexico need to be more competitive globally?

Also, working conditions in Mexico are a global competitive

A: To raise the competitiveness levels in Mexico, it is necessary

advantage thanks to labor peace and the important steps on

to work on the internal agenda: in matters of regulatory

which we have advanced.

improvement, CANACINTRA has pronounced itself in favor of clear and simple rules, the digitalization of procedures and the reduction of response times. Also, the implementation of the

The National Chamber of the Transformation Industry

regulations of the National Anticorruption System is essential

(CANACINTRA) is an autonomous institution with its own legal

to ensure transparency controls on the use and allocation of

autonomy, composed of industrialists from Mexico. It acts as

public resources, both for institutions and for private sector

a consultant for the federal, state and municipal governments

| INSIGHT

OVER-THE-COUNTER ALTERNATIVE EMPOWERS PATIENTS RICARDO RAMÍREZ Executive Director of AFAMELA

Shrinking budgets and the increasing cost of care are

education as an extra tool for health prevention. As patients

growing concerns throughout the Mexican healthcare

have greater access to information about their health, they

sector. The Association of Over-the-Counter Manufacturers

can make more decisions about it.” In this context, Ramírez

(AFAMELA) proposes the use of over-the-counter (OTC)

says digital platforms have helped to increase health

medication as a strategy to allow individuals to take

education. “About 70 percent of online searches are related

charge of their health and at the same time mitigate costs

to physical symptoms, which is why AFAMELA also works

throughout the industry. “OTCs are easily accessible and can

with digital developers to support the use of scientific, up-

be used to treat nonserious symptoms, allowing patients

to-date information.”

to empower themselves to manage their care. For that reason, it is important to provide more information to the

In April 2018, AFAMELA said that a total of 15 million

population on what symptoms can be treated with OTCs,”

Mexicans visited public sector doctors with common

says Ricardo Ramírez, Executive Director of AFAMELA.

diseases. According to the association, the cost of care for these patients totaled MX$43.5 billion. “We are working with

OTCs are medications that do not require a doctor’s

the Ministry of Health and COFEPRIS to raise awareness of

prescription for its sale, but all have been approved by

which health problems can be addressed with OTCs. All

COFEPRIS to guarantee their quality, efficacy and safety.

OTCs in Mexico have detailed instruction manuals that allow

As Ramírez explains, some of these products have been

users to identify the moment when to visit their physician.”

in the Mexican market for more than 100 years, so their

Ramírez points to the campaign that was implemented in

side effects are well known. Founded in 1985, AFAMELA

2008 to help individuals properly distinguish the symptoms

represents manufacturers of OTCs and promotes their

of H1B1 influenza from those of a common cold.

use for the most common conditions. AFAMELA acts as the voice of its 22 members, which include both local and

AFAMELA also promotes good manufacturing and exporting

international pharmaceutical companies.

practices across the sector and participates in communication campaigns alongside COFEPRIS and the Ministry of Health.

AFAMELA works closely with all players in the sector but

A priority for all three organizations is addressing microbial

it has a very specific mission. “Our agenda is different

resistance while the association is also focused on removing

from that of other pharmaceutical associations. AMIIF and

so-called “miracle drugs” from the market. “COFEPRIS has

ANAFAM group some of AFAMELA’s members, but their

been extremely efficient in eliminating these types of drugs

goals are different.”

from the market through many informative campaigns to help individuals identify them and dispose of them. Our role

Mexico’s OTC market is the second-largest in Latin America,

in this collaboration was producing the necessary materials

says Ramírez. The country has about 1,200 different brands,

to inform the population.”

including both innovative and decades-old products. “The market for OTCs is growing not just in brands, but also in

As Mexicans gain access to more information, they can make

the presentation of different products,” he says, adding that

better decisions. AFAMELA wants to support people and

the most commonly used OTCs are analgesics used to treat

companies throughout that process. “OTCs are currently

stomach pain and common cold symptoms.

the only pharmaceutical products that can be marketed directly to consumers, the regulations for marketing

The association’s main mission, however, is to educate the

these medications were positively modified in December

population. “Our priorities include the generation of public

2017.” This is leading to growth in the OTC market and the

policies that facilitate the expansion of self-care throughout

entrance of more products, such as multivitamins. “Mexico

the population, since self-medication must be driven by

has a lot of room to grow its OTC market,” he says.

VIEW FROM THE TOP |

MEXICO’S HEALTHCARE FUTURE: A MATTER OF PUBLIC POLICY JOSÉ CAMPILLO Former CEO of Funsalud

Q: What essential points must a government health

the option to buy other products because they are more

program address? How can Funsalud contribute?

expensive. A pain medication costs MX$170 and usually

A: All we need is the political will and an open and public

chronic patients need between two and three daily. This is

commitment to improve the national health system within

not acceptable and it is not fair.

20 years. The government must be sensible enough to recognize that healthcare is a pending issue in Mexico.

Q: What can companies in the health sector do to make

This model has been functioning for the past 30 years

prevention a profitable activity?

and has proven its obsolescence and exhaustion. The new

A: Government policy must promote well-being within

system should guarantee public resources for the sector

companies and the IMSS must identify the level of risk that

and reconsider a new financial scheme. It would be ideal

every company must take when caring for its employees’

to establish a single tax in which everyone contributes to

health. There should be a fiscal stimulus for those companies

achieving universal healthcare. Many people say that this is

that monitor the health of their employees and a reward

not possible, but it is not an option. Universal healthcare is

for those who reduce the number of absences. Without an

an obligation formulated in the Mexican Constitution.

incentive for the companies, it will not be easy to include a care culture.

The ideal universal system should cover a list of conditions and should allow all service providers to compete for every

Q: How do we ensure Mexico is nurturing the human

single payer. This would position the patient at the center of

resources its healthcare sector demands?

the system, provide service portability and promote unique

A: The priority specialization should be general medicine

electronic medical records.

as we need more specialized communitarian doctors. They will be the ones who will identify the epidemics that we are

Q: How can prevention become a priority for the system?

struggling with. The doctors in the first level do not have

A: Establishing a preventive system and an efficient first

enough knowledge to identify early-stage cancer symptoms,

level of attention is key. We must reinforce the authority

but if they are specialized they will be capable of doing that.

of the health institutions over other economic sectors to control the health risks involved in their activities. There

Q: What are Funsalud’s plans for 2018?

should be a National Health Council that invites all ministries

A: First, establish a performance evaluation system for

to include in their plans chapters focused on healthcare.

hospitals to promote an evaluation, transparency and results

In addition, each government unit should report its

culture. The purpose is to have a benchmarking of all the

improvements to the Ministry of Health.

hospitals to develop an annual index of the best institutions and to begin with a pilot program in private hospitals. Second,

Q: What have been the most important research topics for

we would like to conduct a study on state-of-the-art IT for

Funsalud in recent years?

health to identify the trends in technology and the legal

A: We have focused on establishing the costs related to

frameworks under which they operate. We will also like to

obesity, overweight and diabetes, which already represent

analyze successes and failures to position Mexico in healthcare

more than 2 percent of GDP. We have also worked with

innovation and see where we are.

palliative care and extreme pain because in Mexico there are many people living with chronic pain. The chances of dying in conditions of extreme pain are very high in Mexico

Funsalud is a nonprofit, independent and civil association created

and this is a consequence of the defects in the supply chain

in 1985 and formed by leaders of the private healthcare sector.

for analgesics. In oncology departments, for example, there

As a think-tank, its priority is to contribute to healthcare through

is not enough injectable morphine and families do not have

research, human capital training and technological development

| VIEW FROM THE TOP

HOW TO PROTECT THE INTERESTS OF MEXICAN PHARMACEUTICALS VIVIANA LINARES Executive President of the Mexican Pharmaceutical Council (CFM)

Q: What spurred the founding of the Mexican

Q: Considering the interest of its members in R&D, how

Pharmaceutical Council (CFM) and what are the group’s

is the council supporting Mexican research?

main priorities?

A: The council has partnered with Fundación UNAM and

A: CFM was created in 2009 to represent the common

many universities to promote Mexican R&D. The council

interests of Liomont, Sanfer, Silanes, Carnot, Chinoin and

has also launched the CFM-Fundación UNAM Award for

Senosiain, all of them mainly Mexican pharma companies

pharmaceutical innovation. This award targets bachelor’s,

with a broad range of products, including innovative

master’s and Ph.D. thesis projects that focus on research

medicines, generics and OTCs. All members focus mainly

and which can be easily translated to the market. In the

on the prescription private market, but the competition

past two years, winners have already patented their

between them has not prevented a concerted effort on

products. The council is working with universities, the

common interests with respect to the policies regarding the

Ministry of Health, the Ministry of Economy and CONACYT

pharmaceutical industry in Mexico. Their common goal is to

to support local R&D. There is a large accumulation of

promote the growth of Mexico’s pharmaceutical industry.

investment in technology that should be addressed as soon as possible. In addition, Mexico does not have clear

The council holds monthly meetings to address the

financial mechanisms that allow companies to deduct

many issues of concern, including legal framework,

research incentives.

pharmaceutical and social responsibility. It does not compete with other industry groups such as CANIFARMA,

Q: In what other areas of opportunity does CFM focus?

ANAFAM or AMIIF.

A: Exports are a great area of opportunity since Mexican products have excellent quality and provide innovation to

Q: How can regulations achieve the ideal balance between

patients at reasonable prices. The pharmaceutical industry

patented medicines and generics?

everywhere protects its local manufacturers, so entering

A: Mexican regulations should include strong IP protections

other markets is usually a challenge. Now, we are focusing

and transparent processes that all interested parties

mainly on Latin America and Europe and our members

can easily follow. The link between COFEPRIS and the

have expanded their markets to 17 countries in those

Mexican Institute of Industrial Property (IMPI) must also

regions. In addition, they have played an important role in

be improved to ensure the effective launching of products

explaining to COFEPRIS the challenges faced by the local

in the Mexican market.

pharmaceutical industry to export its products, including certifications, suppliers, audits and import permits.

Access to medications must be improved by creating mechanisms that ensure the availability of many options

Q: What role should regulators, manufacturers and

for each API. Patients should have access to a full

organizations take to ensure the safety of medications?

range of available products so they can make informed

A: For patients to be sure that the medication they take

decisions about their health. To achieve this, a transparent

is correct and effective, a strong regulator is needed to

and balanced regulatory framework that protects IP is

ensure that local medicines meet national and international

necessary.

standards. We are convinced that Mexico has strong regulators that prioritize quality and the efficacy of medicines and all our members have invested strongly to

The Mexican Pharmaceutical Council (CFM) represents the

have their plants certified also by EMA and FDA, among

Mexican pharma companies that produce 22 percent of medicines

others. To achieve this, CFM has promoted a strong and

prescribed by the Mexican private sector: Liomont, Sanfer-

internationally recognized pharmaceutical regulator

Hormona, Silanes, Carnot Laboratorios, Chinoin and Senosiain

through participation in the PAHO-CFM league.

INSIGHT |

DOCTORS AT THE POINT OF SALE: KEY STRATEGY FOR SMALL PHARMACIES MARCOS PASCUAL Commercial Director of ANAFARMEX

As pharmacy chains expand their reach across the country,

benefits in preventive models and points out that other

small, independent pharmacies need to rethink their

companies are also investing in them. He mentions, for

strategies to retain and even gain ground, says Marcos

instance, that Boston Scientific is investing in diagnostics

Pascual, Commercial Director of the Mexican Association of

for cardiovascular diseases. “Through platforms such as this

Pharmacies (ANAFARMEX). “Small, traditional pharmacies

one, patients undergo a simple test that measures blood

are in a vulnerable position because they have lost

pressure and following a small survey they are classified

significant market share due to the growth of pharmacy

according to their risk to suffer hypertension.”

chains and self-service stores, which can negotiate much better prices and offer lower costs to final clients,” he says.

The association is also promoting a different business model. Pascual says that a significant percentage of medication

ANAFARMEX represents over 15,000 pharmacies

distribution follows a fee-for-service model implemented by

throughout the country, including small pharmacies and

international companies with distributors and pharmacies.

chains of all sizes. According to Pascual, in 2017, Mexico had

Under this scheme, distributors are assigned a specific area

33,000 private pharmacies, of which about 18,000 were

and the company pays a fee for the sale of the medication.

small businesses. He adds that the number of pharmacies is

“This scheme may also be good for traditional pharmacies,

expected to continue growing during 2018 at a 3-5 percent

which would be given an additional fee for the storage and

rate. “About 20 years ago, the Mexican pharmaceutical

delivery of specific medications.”

market was valued at MX$90 billion and in 2017 its value was approximately MX$220 billion,” says Pascual.

While small pharmacies have their own unique battles to fight, they share other challenges with the rest of the sector,

While independent pharmacies have lost ground, they will

including the lack of universal electronic patient files, says

not go away as they fill a specific market niche, explains

Pascual. “Every institution keeps its own files and does not

Pascual. With doctors at the point of sale, pharmacies

share them with other institutions when the patient changes

provide care to those who, due to time or distance

doctors.” Pascual explains that the challenges at this point

constraints, cannot visit public healthcare institutions.

for all pharmacies include the development of electronic

“There are now about 18,000 doctors present in pharmacies,

clinical files, the acquisition of more specialists and the

generating an average of 500,000 daily prescriptions.

entrance of new players to the market, such as retail stores.

Doctors at the point of sale are a driver for these small

For instance, “FEMSA has 2,000 points of sale in Mexico

pharmacies.” Small pharmacies have also evolved over time,

and other countries and the company is still growing,” says

which has helped keep them afloat. “They used to focus

Pascual. Amazon’s online sales model is another challenge.

mainly on patented medicines; now, generic medicines

ANAFARMEX is promoting the sale of OTC products by

represent 80 percent of total sales. Furthermore, 80 percent

e-commerce among its members to help meet this challenge.

of generics were sold under the pharmacy’s brand.”

Nevertheless, even if e-commerce grows significantly, small pharmacies will continue to have a market niche. “Although

ANAFARMEX also provides training to pharmacists and

home delivery of medications is becoming successful this will

doctors. In the latter case, the association is now focusing

not cause the extinction of small pharmacies.”

on increasing prevention. “The current model of care requires visiting a doctor only when there is a problem,

Despite the potential hurdles ahead, Pascual sees a positive

but it is necessary for medical professionals to switch to

future for pharmacies wherein each caters to a specific

a preventive model,” says Pascual. Through ANAFARMEX,

market niche. “Small pharmacies will not disappear as there

pharmacies are joining a new scheme to promote prevention

will always be a percentage of the population interested in

especially in the case of chronic diseases. Pascual sees great

personalized attention."

| INSIGHT

PROTECTING IP: MISSION AND PRIORITY FERNANDO BECERRIL President of the Mexican Association for the Protection of Intellectual 34

Property (AMPPI) and Partner and President of Becerril, Coca & Becerril

A main concern for innovators is the protection of their

also for many other different sectors that might cause

intellectual property (IP) rights to guarantee the recovery

long and high cost processes. “My conversations with

of their investment. In highly innovative industries like the

members of the pharmaceutical sector have revealed a

pharmaceutical sector, poor enforcement, as is the case

declining interest in protecting their products in Mexico.

in Mexico, can greatly diminish investment interest, says

As a result, we are seeing a relatively decreasing number

Fernando Becerril, President of the Mexican Association

of patents in this particular sector in recent times.”

for the Protection of IP (AMPPI) and Partner and President of Becerril, Coca & Becerril. “IP is an engine for economic

Another large hurdle impacting all segments in

development. Companies that produce a large amount

Mexico is piracy. “Mexico has a significant problem

of IP can generate large profits. The biggest companies

with fake medicines. In the best-case scenario, these

in the world have the largest amount of IP.”

drugs are nothing but sugar pills, but they can also be contaminated.” To improve Mexico’s enforcement

AMPPI was created 50 years ago to protect IP in every

capabilities, it is necessary to strengthen the capabilities

sector. “The association aims to bring together experts,

of regulatory authorities, Becerril says. “Mexico must

mostly specialized lawyers working at national and

improve its internal enforcement capabilities to be on

international law firms and from every industrial sector.

par with the countries with which we are signing treaties.

However, less than 10 percent of our associates belong

Sadly, 2018 may prove difficult as many governmental

to this last group and our goal is to incorporate a larger

processes could be put on hold because of the

number of these professionals to gain a comprehensive

presidential elections.”

view of the country’s needs in terms of IP.” Internationally, AMPPI sees significant potential for the Although intellectual property plays a significant role in

country as it pursues treaties and agreements. “The

all industries, the pharmaceutical sector is particularly

greatest areas of opportunity Mexico has now are the

keen on defending its IP rights due to the high investment

renegotiations of NAFTA and TPP11.” The association

costs involved in the development of any new medicine.

has closely followed the NAFTA talks and has always

“The pharmaceutical industry is one of the most active

had an active role in the negotiation of international

and interested in protecting IP,” says Becerril. “The sector

treaties regarding IP. In the NAFTA renegotiations, the

has two priorities: innovation and IP protection.”

Association wants to be more than a participant; it wants to be an influencer. As members of the Mexican

The costs of protecting a new molecule are also high,

Confederation of Industrial Chambers (CONCAMIN), the

especially considering that it is necessary to do so in

association has two representatives involved in the talks.

200 territories around the world. “Mexican laws related to IP cover the needs of the sector and are on par

“We hope that what was achieved during the drafting of

with international laws in terms of approval times and

the TPP in terms of IP can be used in the renegotiation of

protections granted,” Becerril says. However, Mexico

NAFTA. So far, we have not seen significant discussions

has a significant challenge: “Litigation in this sector is

on this chapter but some say that the easier to discuss

an extremely long and complex process that might take

chapters are left to the end of the negotiations. I expect

up to 10 years before a resolution is reached.” These

that NAFTA, if it continues, will have a chapter on IP

long periods carry high costs. Once these 10 years

similar to the existing chapter with some adjustments

have passed, there is yet another instance that must be

that were negotiated during the TPP discussions to make

concluded for demanding damages. This problem has

it more efficient and attractive to foreign companies

serious consequences, not only for pharmaceuticals, but

willing to come to Mexico.”

ROUNDTABLE | Mexico’s growing economy requires an efficient healthcare system to serve its population but budget cuts have plagued the sector for several years now. Under these circumstances, many in the industry are looking for strategies to optimize the existing budget and provide more services with the same or fewer resources. Mexico Health Review spoke with healthcare leaders and experts to obtain their opinion on how to address current gaps in healthcare amid reduced budgets.

HOW CAN THE HEALTH SYSTEM ACHIEVE A MAXIMUM RETURN ON EVERY PESO SPENT?

Mexico has come a long way when it comes to the performance of its health. There are still several challenges ahead and it is necessary to address the system’s fragmentation by creating a universal, more level-playing, health system. The challenge for Mexico would be to improve the provision of services towards a model in which all providers attend to the needs of the population regardless of their affiliation to a particular institution. Access to care should be determined by need rather than employment status. Closer collaboration between the government and the health industry can help improve the level of access and

FRANCESCA COLOMBO Head of Health Division at OECD

quality of healthcare in Mexico.

The public sector advances step by step towards different health models. SEDENA and PEMEX share a similar vision of centralized health governance, which facilitates the quick implementation of initiatives and models. Policies and priorities in other public health institutions vary according to the person in charge and the micro-world around them. Federal institutions such as the Seguro Popular and the Ministry of Health are served by federal secretariats that slow down the effectiveness and quality of healthcare. We should rethink the federalization of health.

MARCO ANTONIO NAVARRETE Deputy Director of Health Services at PEMEX

The country will continue to face budgetary issues, so financing will require innovative strategies. PPPs are a possibility since the private sector is likely to be the most qualified to provide these services to the public sector. Another possibility is the creation of a federal budget specifically for these services. Other countries have included personalized medicine as part of their federal budget and have even provided hundreds of millions of dollars in seed capital. The US and many European countries have programs of this kind and Mexico could implement something similar. A multiyear budget that incorporates private capital would greatly benefit the sector. We will present this initiative to the Ministry of Health and the Congress.

FRANCISCO SOBERÓN Director General of INMEGEN

CONACYT scientists

REGULATORY ENVIRONMENT

A solid regulatory entity is key to the development of any healthcare sector. This is the agency responsible for protecting patients and consumers while establishing clear ground rules for all industry players. Mexicoâ&#x20AC;&#x2122;s COFEPRIS has been praised for its efforts to strengthen its practices, gaining international recognition for the high standards that the council places on itself and the industry. But there are still many regulatory issues that require swift attention. Addressing these challenges will necessitate a joint effort between the council, authorized third parties, consultancies and law firms, all working together to improve the countryâ&#x20AC;&#x2122;s healthcare system.

This chapter includes interviews with the key regulatory players and those who specialize in this area. It also addresses the players that help support multinational companies as they enter Mexicoâ&#x20AC;&#x2122;s complex regulatory environment and reviews both regulatory changes made to date and those that are still necessary for the sustainability of the healthcare industry.

CHAPTER 2: REGULATORY ENVIRONMENT 40

ANALYSIS: Boosting Growth Through Simplified Regulation

VIEW FROM THE TOP: Julio Sánchez Y Tépoz, COFEPRIS

VIEW FROM THE TOP: Alejandro Luna, Olivares

VIEW FROM THE TOP: Jaime Castro, BPF, Part of QbD Group

VIEW FROM THE TOP: Javier Cortés, Jones Day

VIEW FROM THE TOP: Ernesto Algaba, Hogan Lovells BSTL

Cecilia Stahlhut, Hogan Lovells BSTL

VIEW FROM THE TOP: Bernardo Martínez-Negrete, Galicia Abogados

Lisandro Herrera, Galicia Abogados

INSIGHT: Héctor Chagoya, Becerril, Coca & Becerril

VIEW FROM THE TOP: Juan Pablo Nava, NYCE

VIEW FROM THE TOP: Octavio Vial, TESIS

INSIGHT: Carlos Boone, Autorización de Terceros en Publicidad (ATP)

VIEW FROM THE TOP: Luis Farias, TAAP

EXPERT OPINION: Christian Lopez-Silva, Baker McKenzie

ROUNDTABLE: How Should Regulations Balance Drug Approvals Against Medical Needs?

VIEW FROM THE TOP: Abel Hernández, ANCE

Yoloxóchitl Macías, ANCE

VIEW FROM THE TOP: Gabriel Marcelín, Pharmometrica

VIEW FROM THE TOP: Xavier Ordóñez, Deloitte

Horacio Peña, Deloitte

VIEW FROM THE TOP: José Alarcón, PwC

| ANALYSIS

BOOSTING GROWTH THROUGH SIMPLIFIED REGULATION To ensure continued industry growth, particularly in medical devices and pharmaceuticals, a clear and simplified regulatory environment is essential. The same rules that govern the industry must also guarantee the safety of the population. COFEPRIS is aware of the challenges and is taking steps to address them

The regulatory environment in Mexico faces internal and

key to streamlining the services provided by COFEPRIS,

external challenges due to the country’s epidemiological

but tomorrow these institutions could be professionalized

transition, the renegotiation of NAFTA, the CPTPP and

to compete with each other, along with an administrative

a new presidential administration to be inaugurated in

simplification that significantly improves regulatory

December for a six-year term. Amid this abundance of

processes, says Javier Cortés, Partner at Jones Day.

uncertainty, it is imperative that COFEPRIS helps to create a predictable and stable environment for doing business in

MEDICAL DEVICES

Mexico, says Julio Sánchez y Tépoz, Federal Commissioner

The medical devices segment is among the areas that would

at COFEPRIS.

greatly benefit from regulatory simplification, a benefit that ultimately would pass on to the patient. Since 2008, the

Sánchez y Tépoz cites three areas in particular for achieving

medical devices market has grown steadily through the

a credible environment for business: “The first is to

more than 130 companies that are members of the seven

guarantee access. The second is to regulate the evolution

clusters in Chihuahua, Tamaulipas, Mexico City, State of

of technology used for both medicines and medical

Mexico, Nuevo Leon, Morelos and Baja California, which is

devices. The third challenge is to maintain an active and

the most important cluster with more than 50 percent of

close communication to generate prevention schemes for

the sector’s total national exports, according to ProMéxico.

common diseases like obesity.”

Mexico is considered the largest market in Latin America and is ranked eighth for global exports of medical devices,

To better achieve these ends, part of the solution – and

with production exceeding US$15.2 billion, according to

a contributor to the industry’s growth – is the increased

COFEPRIS.

participation of authorized third parties to alleviate COFEPRIS’ workload and grant a better regulatory balance.

In the last decade, Mexico has become a world leader

According to COFEPRIS, an authorized third-party is a

in the manufacture and assembly of medical devices, so

nationally recognized agent in the field of health risks

the challenge is not the availability of medical devices

that is subject to sanitary control for all export and import

in the country, but in the population’s access to these

products, as well as being the only entities that can legally

devices. “COFEPRIS’ regulations should not be seen as a

support the regulatory authority. COFEPRIS has three

barrier as they are necessary to guarantee the safety and

types of third-party authorizations divided into units of

quality of medical devices used in Mexico. The challenge

interchangeability of medicines or bio-comparability tests of

to introducing medical devices into the Mexican public

biotechnological medicines, test laboratories for assistants

sector comes from the different processes undertaken by

in sanitary control and verification units for the sanitary

each institution to approve a product. After a product is

control of medicines, establishments and medical devices.

approved by CONACYT, it still takes up to one year for its introduction into the General Health Council’s basic

Authorized third parties are intermediaries between the

list, followed by another year at IMSS, ISSSTE or any other

private sector and the authorities because through their

public institution,” says Roger Brownrigg, General Manager

services they simplify COFEPRIS’ regulatory processes

of Johnson & Johnson.

and at the same time channel the needs of companies in the health sector. “This synchronization would improve

In 2017 alone, more than 18,000 procedures for the

registration processes and would accelerate the growth of

authorization of medical devices were deregulated and

the industry, especially for foreign companies,” says Octavio

registered. In addition, the regulatory authority, through

Vial, Director General of TESIS.

the Administrative Procedures Platform registered 19,694 medical devices, where 30 percent were subject to the

Eventually, the evolution of the health sector and the

opinion of authorized third parties. Today, COFEPRIS has

regulatory authorities will shape the support provided by

19 verification units to support the regulatory process of

third parties in the regulatory environment. Today, they are

medical devices.

PHARMACEUTICALS

Over the next few years, the regulatory authorities

Over the years, COFEPRIS has strengthened to become a

need to meet several milestones to continue with the

reference for other countries in the Latin American region.

development and strengthening of the medical devices

“Mexico is already a leader in the regulation of medicines

and pharmaceutical sectors in Mexico. “It is necessary to

in Latin America and it can become a regulatory leader in

accelerate and unify the sanitary requirements between

other areas, such as biomedicine,” says Abel Hernández,

Mexico and the US. Mexico should expedite the procedures

Director General of ANCE. However, improvements must

to adhere to international laws that provide access to more

continue to guarantee access to quality medicines. The

modern medical devices and drugs. COFEPRIS must rely

period required to register a product is among the industry’s

on the verification and authorization capacity of other

concerns, as well as the ability of COFEPRIS to keep up with

countries and recognize the lack of budget and capacity

innovations, a vital issue to ensure access to these products.

to carry out international inspections,” says Cortés.

As innovations arrive to the market “the regulatory gap will need to be filled as the demand for these technologies

On a national scale, there are public-private collaboration

grows,” says Jaime Castro, Director General of BPF, Part of

schemes or other business schemes that address the

QbD Group. If these demands are not fulfilled on time, he

overloaded public health system and its complementary

continues, “we might find that regulations are almost dead

services. “The opportunities are in the creation of new

on arrival because as they are released another technology

payment schemes, like payment based on results. In the

is emerging.”

public sector, opportunities will revolve around innovative patient-focused access models that help the public sphere

The speed of the regulatory process is not the only concern,

maximize resources and acquire the necessary innovation

since in parallel the industry demands that COFEPRIS

to provide medical care to the population for which they

align with the innovations of the market. “COFEPRIS is

are responsible,” explains José Alarcón, Dean Partner of

working hard to keep pace through close communication

Healthcare at PwC. “In the case of the private sector, the

with technology developers. At this moment, there is

opportunities are in making supply chains efficient and with

no regulation related to nanomedicine, so one of the

profitable prices for new players.”

objectives should be to discuss strategies to create related regulations,” says Yoloxóchitl Macías, Chief of Health Area at

The regulatory system has not seen a substantial update

ANCE. In this context, having an updated regulatory agency

in more than 20 years so the next administration should

is key to guarantee access to innovative medicines.

prioritize the improvement of greater legal security and promote greater investment in the country to increase

Regarding the generics segment, the areas requiring

the possibility of local companies competing with their

improvement are in promoting a positive business

international counterparts, says Alejandro Luna, Partner

environment between both the generics and patent

and Life Science Co-Chair at Olivares.

companies. “Authorities such as IMPI and COFEPRIS should consider the conditions of the market and the impact of the generics segment to promote greater associations between

GENERAL FLOW OF THE THIRD-PARTY AUTHORIZATION PROCESS

these two players,” says Benjamín Vega, Commercial Director of Allen Laboratorios. On the other hand, for Big

Income of solution

Documentary review

Pharma companies the concern focuses on registration procedures. “Besides the big changes already done, the health authorities could accelerate regulatory processes

Verification visit

Evaluation visit

while maintaining the firmness of their assessments to attract more investment,” explains Marco Ruggiero, General

Notification of results of the evaluation visit

Manager of Chiesi México.

OPPORTUNITIES

Technical opinion issuance by the Technical Committee of Authorized Third Parties

The OECD emphasizes that future inclusive growth, fair competition and good regulation of the health sector in Mexico requires the establishment of a high-quality regulatory framework and stronger competition. It also

The authorized third-party subject to vigilance by Health Operation Commission (COS)

notes that “Mexico does not only need clear rules but also strong, competent, independent and transparent regulators who can assure market participants that regulation will be applied objectively and impartially.”

Sanitary Authorization Commission (CAS) resolution notification Source: COFEPRIS

| VIEW FROM THE TOP

ALL INCLUSIVE ECOSYSTEM WOULD PROVIDE BENEFITS JULIO SÁNCHEZ Y TÉPOZ Federal Commissioner for Protection Against Sanitary Risk (COFEPRIS) 42

Q: How have COFEPRIS’ policies shaped the

our goals, is for Mexico to be qualified as an SRA in the

pharmaceutical sector?

Americas once the WHO makes this term official. Since

A: Our road map, developed in 2016, has marked

2017, COFEPRIS has been among WHO’s reference

the path to improvement throughout these years. In

bodies. Within WHO, we coordinate FDA, Health Canada

January 2018, COFEPRIS introduced a new regulation on

and other health regulators, including Cuba, Colombia,

pharmacovigilance and techno-vigilance and has made

Chile, Argentina and Brazil, and we will do so until 2019.

great strides in facilitating approval processes and reducing

COFEPRIS is also Vice President of the International

times. One of our pillars is effective communication

Coalition for Medicines Regulatory Authorities (ICMRA).

with the industry. The ultimate goal is the generation of

From January 2018, COFEPRIS entered the Pharmaceutical

public policies that benefit patients and permit industry

Inspection Co-operation Scheme (PIC/S), which will allow

development.

us to greatly reduce the number of visits to foreign plants to grant them a certification of good manufacturing practices,

Q: How is COFEPRIS aligning its policies to their

saving approximately MX$1 million per visit.

international counterparts? A: The challenge that all regulatory authorities face is to

Q: How is the role of COFEPRIS evolving to support

generate predictable and stable environments for doing

epidemiological changes in the country?

business and all international bodies share similar hurdles in

A: From 2010, COFEPRIS has approved 550 generic

this regard. The first is to guarantee access. The second is to

medicines and 310 innovative medicines, of which 64

regulate the evolution of technology used for both medicines

were orphan drugs. Our work with generics is one of this

and medical devices since technology is making diagnostics

administration’s greatest achievements, as these medicines

techniques more powerful and faster than in previous

cover 70 percent of Mexico’s main mortality causes and

years. The third challenge is to maintain an active and close

bring about a 60 percent overall reduction in costs. To

communication to generate prevention schemes for common

continue incorporating more medicines and address

diseases like obesity. For the healthcare sector, it will be

diseases that might have been overlooked, we recently

much less expensive to prevent obesity than to treat it.

signed an agreement with the Mexican Federation of Rare Diseases for the creation of a permanent committee that

Q: What should COFEPRIS’ goals be regarding

incorporates patients, regulators and the federation to

international policy?

analyze the medications that should be brought to Mexico.

A: Regulatory authorities are more efficient if they collaborate closely with their peers around the world,

Q: Considering how quickly technology evolves, how can

since the concerns are almost the same on all continents.

regulatory bodies keep pace?

The alignment of policies allows the simplification of

A: We have created a committee that evaluates new

processes and saves companies from having to perform

drugs and medical devices and provides support for their

the same clinical studies several times or to perform several

developers throughout the commercialization process.

plant reviews. In these cases, a revision from a Stringent

Investment in R&D carried out by other countries comes long

Regulatory Authority (SRA) should be sufficient. Among

after its development, but the creation of this committee allows us to be ready when the new technology arrives for its faster introduction into the country. Our Excellence Center

Federal Commission for Protection Against Sanitary Risks

is a space for discussion among academia, regulators and

(COFEPRIS) monitors the production, commercialization,

the industry whose goal is to close any gaps in knowledge.

import, export and marketing of medications, medical devices,

Its ultimate goal, announced in March 2018, is the creation

insecticides, fertilizers, chemicals and makeup, among others

of a National Plan for Regulatory Sciences.

VIEW FROM THE TOP |

PROTECT IP TO BOOST SECTOR ALEJANDRO LUNA Partner and Life Sciences Co-Chair at Olivares 43

Q: What is the most common profile of the companies

and pharmaceutical and medical devices companies tend to

you work with?

invest large amounts of money and time on consolidation.

A: A significant percentage of our clients in the firm’s life

The government needs to provide more certainty about

science group are in the pharmaceutical industry. Our

the timing and merits of the cases to be decided by

portfolio in this field specializes in the most common needs

administrative and judicial entities to encourage companies

of the industry, such as patents, trademarks and copyright

wishing to do business in Mexico.

cases, but we also offer protection for clinical data. Our extensive expertise in life sciences allows us to work with

Q: What are the main lessons related to patents that Olivares

companies not only in the pharmaceutical industry but also

has learned in its almost 50 years of history?

in the medical devices, cosmetics, food and beverages and

A: Technological development advances faster than

agrochemical industries.

legislation, a gap that inhibits the full growth of the country’s pharma industry. There is a need to understand

Q: How would you describe the existing regulatory

the pharmaceutical sector as an industry of compliance.

environment for innovative products like biomedicines?

Keeping this in mind helps to understand how the patents

A: Our legal and regulatory system created the opportunity

in the healthcare sector are compatible with legislation,

to have the products and services we find today in the

processes of change and the needs of the industry.

industry but there is also a growing need to refresh these rules. The regulatory system must take into account

Q: How is the local and international regulatory environment

different types of innovations and the protection of

affecting international companies’ perception of the

intellectual property. Also, it must adapt to the digital era

Mexican market?

to help make the new technologies, biological innovations

A: The uncertainty caused by the renegotiation of NAFTA

and the patient-centric approach more effective.

removed life sciences from the agenda and at the same time key negotiations like the protection of clinical data and IP.

Q: What impact will CPTPP have on IP in relation to

International companies are also kept in abeyance because

pharmaceutical products?

our main support mechanisms are being renegotiated and

A: It has been 24 years since the current IP law was

current protection protocols are not updated enough to

introduced. In general terms, the legal environment is

meet market needs.

positive for the pharmaceutical industry because there are minimum international standards to protect IP in Mexico but

Q: What are the main areas of opportunity that Olivares

the country needs to improve the level of protection and

sees in the industry in 2018?

legal certainty. At the national level, it would be good to

A: We see the possibility to protect the industry through

include in the CPTPP the possibility for Mexico to improve

mechanisms like CPTPP and a renegotiated NAFTA. Also,

its standards, legislation and IP practices. At the regional

we see the opportunity to elevate the system of regulation

level, the durability of IP protection in North America must

in Mexico. If Mexico discovers how to benefit from these

be aligned. Finally, at the international level, it is necessary

international agreements, a boom in the pharmaceutical

to synchronize the most recent IP protection protocols.

industry will become a reality.

Q: What are the main challenges faced by pharmaceutical and medical devices companies when they want to

Olivares is an IP law firm that works with some of the world’s

introduce a product in Mexico?

biggest brands. It specializes in areas such as patents,

A: In Mexico, there is still a certain amount of uncertainty

trademarks,

about the timing and the outcome of some proceedings

constitutional law. It has nearly 50 years of experience

copyrights,

regulatory,

administrative

and

| VIEW FROM THE TOP

PERSONALIZED SOLUTIONS FOR THE INDUSTRY JAIME CASTRO Director General of BPF, Part of QbD Group 44

Q: What are BPF, Part of QbD Group’s main lines of

A: We have a greater presence in the pharmaceutical

operation and core activities?

and logistics segments and our customer base includes

A: Our core business is advising and consulting for

four of the leading logistics companies for health-related

companies in the healthcare sector related to validation

products. As part of our strategy for 2018 and 2019, we

and qualification issues, especially for computerized

expect growth in the medical devices, biologics and

systems. Additionally, we rent out measuring equipment,

biotech segments.

we offer legal advisory on sanitary regulation, provide implementation of quality management systems,

Q: Healthcare is evolving toward the application of new

perform risk analysis, provide in-house courses, do

digital technologies. What approaches are validation

project management for GMP implementations and staff

companies taking regarding this development?

outsourcing and evaluation of infrastructure, equipment

A: Technology evolves so fast that regulations are often left

and staff. Fifty percent of our capital goes to BPF and the

behind. Today, there are technologies that impact people’s

other 50 percent to Quality by Design (QbD), a Belgian

health but for which there is a lack on validation or testing

company that focuses on the development, design and

methods. These technologies include artificial intelligence,

quality validation for biological, cosmetic and sanitary

virtual reality, nanotechnology and additive manufacturing.

products. At first, we were distributors of QbD quality-

For example, 3D printing is applicable to drugs, medical

control software Quality Kick, but then we widened our

instruments and tissue manufacturing; however, there is

reach and changed our name to BPF, Part of QbD Group.

no way to guarantee the protection provided by the tubes

This has helped us to access a new organizational level of

that carry the stem cells in a 3D printer.

training and knowledge. Although this technology has many benefits, you need Q: What types of systems do you validate?

a guide on how to check your operating systems. The

A: The GAMP 5 guide from the International Society of

challenge is time: we have very little time to achieve the

Pharmaceutical Engineering (ISPE) outlines a classification

necessary regulatory framework, process adaptations and

of systems that require validation to guarantee that

quality models to make the paradigm shift at an industrial

these systems do not negatively impact the quality of

level that will allow the adoption of these technologies

health-related products. We can validate a simple spread

without risking people’s lives.

sheet or an enterprise resource planning (ERP) system or a SCADA computerized system. We have experience

Today, there is not much investment in this area because

validating those systems related to product quality. Our

those technologies are just starting to be implemented in

team includes validation engineers who are biologists,

Mexico. The regulatory gap will need to be filled as the

pharmacists and computer and mechatronics engineers,

demand for these technologies grows. However, I believe

contributing to the knowledge base that allows us to offer

manufacturers and providers will start worrying about this

integral services.

issue soon. The global trend in healthcare is to create more personalized solutions, which represents a challenge for

We are also working with QbD on software development.

current regulation and pharmaceutical methods. We might

Its main product is Quality Kick, an innovative program for

find that regulations are almost dead on arrival because

quality management that has applications in the cloud and

as they are released another technology is emerging. For

process adaptability, besides other systems like Lab Kick.

this reason, the regulations must stay one step ahead so that they enter the system covering future risks. Academia,

Q: In which healthcare segments does BPF, Part of QbD

the authorities, the suppliers and the industry must be

expect the greatest growth?

integrated into the regulatory process.

Q: What alliances does BPF, Part of QbD Group need to establish to fill these gaps? A: We need to establish links with suppliers of these types of products and services. We are devoted to testing systems for managing anything that comes from a lab, for infrastructure projects, equipment or human resources. Never before have computational technologies been so intrinsically related to healthcare. We are starting to interact with high-end providers in Europe so that when they access the Mexican system we are ready to serve them. We also have an editorial program to cover those new subjects. Our team is working on the development of publications that could help us acquire the appropriate knowledge for when these technologies reach Mexico. Q: How aware are Mexican companies about the importance of system-quality validations? A: During the last presidential administration, COFEPRIS has been innovative and proactive in creating a new way of thinking about the Mexican market. COFEPRIS has also endeavored to make the new regulations public and to provide related training. Constant changes and the situation related to NAFTA may have distracted some companies from regulatory compliance, but they are aware of the problem. We are waiting for NOM-241 for medical devices that will likely introduce substantial changes to raise the level of compliance. Q: What differentiates the company when it executes a project? A: Our main differentiator is that we try to finish each project in the shortest possible time since the faster we finish a service, the more opportunities we have to help other clients. We work under a Project Management Institute (PMI) method and throughout each project we employ different controls, an initial document, weekly reports and frequent communication with the client. At the beginning of a project, we provide clients with a questionnaire to identify their needs, because in many cases they do not accurately know what they want or even what they need. Project management allows us to have better control of the project and its deliverables than most of the competition. We have a strong financial structure and a robust quality system that is frequently audited. We have the reference and recommendation of our clients and this has led us to work with some of the most important companies in the healthcare sector in Mexico.

BPF , Part of QbD Group, is a Mexican consultancy that works with validation and good practices in the healthcare sector, particularly pharmaceutical, medical devices, logistics, biotechnological and homeopathic companies. It is part of Quality by Design (QbD)

| VIEW FROM THE TOP

DEMANDING COMMITMENTS FROM REGULATORY AUTHORITIES JAVIER CORTÉS Partner at Jones Day 46

Q: What health opportunities could homogenization of the

Q: What tools can the sector use to demand better

rules between the US, Canada and Mexico bring to Mexico?

performance from sanitary authorities?

A: Regardless of what happens with NAFTA, it is necessary

A: The sector must begin to create a culture that restricts

to accelerate and unify the sanitary requirements between

the discretionary power of the health authorities.

Mexico and the US. Mexico should expedite the procedures

This means limiting the power to assess fines and the

to adhere to international laws that provide access to more

processing times of COFEPRIS through challenging

modern medical devices and drugs and COFEPRIS must

administrative decisions taken without proper legal

rely on the verification and authorization capacity of other

grounds via the legal system. Today, players are afraid to

countries and recognize the lack of budget and capacity

move these issues to court, but this would help improve

to carry out international inspections.

the service.

Q: How does the lack of up-to-date regulations affect

Q: How do authorized third parties contribute to the

topics such as telemedicine?

simplification and modernization of product inclusion?

A: It creates uncertainty with regard to potential

A: They have had a positive impact, but the goal should

health solutions providers because having to contact

be to make them less necessary through administrative

the authorities to resolve questions not covered in the

simplification or to commit to increasing the number of

regulation is inefficient and is not beneficial for the

authorized institutions permitted to compete against

industry. There are also contradictions in the law; for

each other.

example, the definition of “biotechnology” in the General Health Act is different from that in the specific act, which

Q: How does Jones Day assess competitiveness in the

means that the authorities have created more uncertainty.

Mexican healthcare industry? What are the main concerns

The concentrated workload, the lack of budget and the

of your clients?

rigidity in COFEPRIS’ processes distract attention from

A: The Economic Competition Commission is beginning

areas of improvement.

to see obstacles in the healthcare sector. They are seeing that the excessive regulation in terms of health is an

Q: What are the most urgent changes that you would carry

obstacle to free competition. Nevertheless, the view on

out in the current health regulation?

competition issues remains macro and they have not yet

A: The first thing we must do is consider what modifications

found the right way to address the required amendments

are essential to improve the access to modern drugs and

on a detailed basis.

medical devices instead of creating last-minute solutions or patching each problem. Second, allow health industry

Q: What are your foreign investment forecasts for 2018?

manufacturers to self-evaluate with the support of an

A: Investment will be aimed at service providers, such

authorized third party. In this way, the sanitary authority

as hospitals, medical device manufacturers and generics

can focus on topics like illegal products or the black market,

laboratories. In addition, the medical tourism market is

instead of dealing with bureaucratic formalities. Last but

also becoming attractive. However, there are obstacles like

not least, simplify all COFEPRIS formats.

bureaucracy. The regulation is complex, discretional and highly formal, which ends up restricting access to a better and wider range of healthcare services. Mexico needs to

Jones Day is an international law firm based in the US with

establish clearer regulations to increase investment. One

42 locations around the world. It offers multiple services in

of the most frequent requests from institutions is the

different economic sectors such as antitrust and competition,

establishment of clearer rules and conditions for tenders

banking and finance, government regulation and healthcare

in the healthcare industry.

VIEW FROM THE TOP |

FILLING IN THE REGULATORY GAPS

Ernesto Algaba Partner of the Life and Sciences Practice at Hogan Lovells BSTL

Cecilia Stahlhut Senior Associate of the Life and Sciences Practice at Hogan Lovells BSTL

Q: In what regulatory areas are companies most interested

the authorities and the industry to implement measures

in acquiring the services provided by Hogan Lovell?

that can be easily adopted. Our role is to help to adopt

EA: Clients request legal advice regarding the introduction

good practices and suggest some practical approaches

of innovative products, new therapies and high-tech devices

that protect both our clients’ operations and the security

in the Mexican market. Access to medicine, promotional

of their patients.

activities and patient programs are also among the important components of the advice we provide. In

Q: How have authorized third parties contributed to

seeking our services, pharmaceutical companies assure that

compliance in the Mexican health industry?

their practices comply with the applicable Mexican legal

CS: The existence of authorized third parties has provided

framework. Compliance not only impacts the country, it is

transparency and certainty when launching products and

also relevant under the American Foreign Corrupt Practices

managing processes with COFEPRIS. Authorized third

Act and UK Anti-Bribery Act.

parties both speed up processes and take some of the administrative load off the authorities.

Q: What opportunities result from rendering digital health services in Mexico?

Q: In what health industry areas are Hogan Lovells’ clients

CS: Even where there is a comprehensive regulation for the

participating?

provision of traditional health services, there is no equivalent

EA: Eighty-five percent of our clients in the life and sciences

that exactly applies for digital or virtual health services.

division are transnationals. Hogan Lovells’ clients operate in

We need a specific regulatory framework as telemedicine

areas such as pharmaceuticals, stem cells, biotechnology,

evolves. We are facing a very fast development of service

medical devices, digital healthcare, cosmetics, alcohol,

digitalization in areas such as prevention, health education

tobacco, food, supplements, genetically modified

and treatment follow-up. This is a challenge from a business

organisms, drug stores and distributors. Working with such

and regulatory perspective.

a varied array of companies enables us to have a wider perspective regarding areas of opportunity and what will

EA: Several clients have been asking us about these

interest our clients.

topics. Given the lack of a particular legal framework, we need to continue working closely with the authorities to

Q: What are the priorities of Hogan Lovells’ life and

implement the appropriate regulation. This is the case in

sciences division?

areas such as prescriptions, physician certifications, product

CS: We strive to be one step ahead of our clients’ needs.

procurement, medical records and follow-ups. Mexico’s

Hogan Lovells is creative and provides added-value

framework is broad and strict in terms of data protection

solutions. Clients usually have their own regulatory teams,

but the digital provision of medical services brings with it

so what we offer is both high specialization and integral

the need to address these issues comprehensively.

solutions. If a client asks for advice on regulatory matters and we notice there is an issue with compliance, foreign

Q: What steps have been taken to develop this framework?

trade, IP, or any other practice area, we can help them in

EA: Several years ago, the Ministry of Health developed

those areas as well.

some guidelines but they are too general. There is also a draft NOM. Although there are other priorities for issues such as access to treatments, inclusion of products and a

Hogan Lovells BSTL is the Mexican branch of the global law

complex political agenda, it is time to review the existing

firm present in 25 countries with over 2,500 lawyers. It operates

legal framework and adjust it to the needs of an evolving

in areas such as life sciences, energy, finance, infrastructure

sector. Hogan Lovells has been finding ways to assist both

and real estate

| VIEW FROM THE TOP

LOCAL LAW FIRM SHINES A GUIDING LIGHT ON PHARMA SECTOR Bernardo MartĂnez-Negrete Partner at Galicia Abogados

Lisandro Herrera Associate at Galicia Abogados

Q: How would you describe the current profile of the

LH: IP rights enforcement in the pharmaceutical sector is

pharmaceutical sector?

complex, as it requires first a resolution from IMPI that can

BM: The pharmaceutical market is composed mostly

take some years. This decision must be validated by the

of former players that have operated in the country for

Federal Court of Administrative Justice, adding more time.

many years and some new entrants that manufacture

Even if the court supports IMPIâ&#x20AC;&#x2122;s decision, the offending

biotechnological products. Previously, pharmaceutical

party can initiate another legal process (amparo), which

companies handled all these matters internally but it is

can take another couple of years to be solved. It is then

almost impossible for a single company to administer

necessary to go to Civil Court to sue for damages, adding

all the regulations due to its extension. The demand for

another several years to the entire process, plus the time it

pharmaceutical products is completely inelastic. This has led

can take to enforce the sentence.

competition authorities to closely monitor manufacturers and distributors to avoid collusion.

Q: What are the most common services offered by Galicia Abogados to the pharmaceutical sector?

Q: What are the main barriers faced by companies to

BM: M&A transactions are common as the pharmaceutical

introduce medicines into the country?

sector faces constant patent expirations, hence the

BM: The main barrier, both for a local or foreign manufacturer,

need to divest prior to the entrance of generic products.

is the large number of regulations. For a product to be

Distributors often negotiate for exclusive sales rights, which

sold in Mexico, it must have a marketing authorization

under some circumstances are illegal in Mexico as they can

issued by COFEPRIS; there is room for improvement in the

lead to monopolistic practices. We also help clients meet

regulatory process to expedite the granting, and, eventually,

the standards of their clinical studies, including informed

the renewal, of such permits. The problem is aggravated

consent in accordance with current regulations.

by the fact that some processes must be approved by the Mexican Institute of Intellectual Property (IMPI).

LH: We receive requests from foreign parties interested in selling their products in Mexico. We also guide hospitals,

LH: There are also many barriers to access. Once a medication

doctors and manufacturers that perform clinical trials on

has a marketing authorization issued by COFEPRIS, it is

how to abide by the laws concerning personal data.

still not possible to sell it to public institutions because all products must first enter the basic list of the General

Q: What opportunities does Galicia Abogados foresee

Health Council, which can take up to several years. Then it

in Mexico?

is necessary to enter the basic lists of each public institution

LH: A regulation that could have a strong impact on the

to be able to sell them. This process takes a considerable

market is the approval of medications generated from

amount of time and resources, complicating the entrance

cannabis and its derivatives, since it will attract many

of innovative medications into the country.

foreign companies. The country also has great opportunities springing from its international treaties, such as the Pacific

Q: What are the main challenges of IP enforcement and

Alliance, CPTPP, EU Trade Agreement, EU Free Trade

how does it affect investment?

Association and NAFTA. BM: In 2017, the General Health Act was modified to

Galicia Abogados is a Mexican law firm founded in 1994 that

include vaccination as a priority for national health,

specializes in M&A, sale regulations, advertising and distribution

forcing the federal government to set aside a special

of generic and patented medicines, clinical research and IP of

budget just for vaccination and to generate and pay for

pharmaceutical products

vaccination campaigns.

INSIGHT |

PATENTS PROTECT INNOVATION HÉCTOR CHAGOYA Partner, Director of Patents and Technology at Becerril, Coca & Becerril 49

Misconceptions about patents are common, with some

Local regulations should prioritize IP protection, explains

people seeing them as a barrier to innovation, especially

Chagoya. “It is necessary that public policy fully understands

in the pharmaceutical segment. They are, however, a

the need for patents both to protect innovation by moderating

necessary tool to protect intellectual property (IP) and

the effects of unfair competition and thus keeping costs down

investment from unfair competition, says Héctor Chagoya,

for the public. If pharmaceutical innovators have a short time

Partner and Director of Patents and Technology at Becerril,

frame to recoup the development investment, they will have

Coca & Becerril (BC&B), a law firm specialized in the

to greatly raise retail costs. If the window is wider, costs can

protection of IP. “Patents are a tool for generating balance within the pharmaceutical market, which is essential for Mexico’s health and development. For that reason, protecting IP is of the utmost importance to pharmaceuticals to ensure they recover their investment.” BC&B, which turned 50 years old in March 2018, works mostly with large pharmaceuticals looking to protect their IP in Mexico, including Johnson & Johnson, Pfizer, GlaxoSmithKline and Merck. According to Chagoya, large

“ be kept down.”

Patents are a tool to generate a balance within the pharmaceutical market, which is essential for Mexico’s health and development”

companies use its services because of the firm’s technical focus instilled by its founders, who were chemical engineers.

Mexico has strong regulations to protect every kind of patent;

“While many firms have a technical team, those teams are

the problem is enforcing these regulations. “Most countries

treated as secondary. We have our technical team deal first-

in the world have an easier system for enforcing patents,”

hand with all patent-related issues, except litigation where

Chagoya says. However, in Mexico patent infringements must

they team-up with our skilled attorneys.”

first be addressed by the Mexican Institute for Intellectual Property (IMPI), which can take up to four years. The

A major concern for pharmaceuticals, Chagoya says,

offending party can challenge IMPI’s verdict at the Federal

is unfair competition from generics manufacturers

Court of Administrative Justice and the latter’s decision

that must only prove their drugs are the same as the

can be further challenged with a second legal protection

typically patented counterparts. For this reason, there is a

(amparo). Obtaining a final decision can take up to eight

constant tug-of-war in which generics producers demand

years at least. “These extremely long periods make foreign

faster access to patented medications, while innovative

companies wary. This is a great area of opportunity to

companies want to maintain exclusive sales rights for

improve the legal system,” explains Chagoya. On the other

as long as possible. How long innovative medicines

hand, Mexico imposes a minimum penalty of 40 percent of

should be protected is at the heart of the debate, he

the retail price, which is significantly higher than in other

adds. “Big Pharma is also extremely concerned about

countries.

approval times for biosimilars, which take much longer to develop, prodding their creators to request more time to

While many may think that protections extend only to large

see a return on their investment. There is also evidence

companies, Chagoya says small research laboratories also

that biosimilars are not exactly the same as the original

benefit. “Patents can also be used to protect innovation at

medication, thus biosimilars might cause unintended

universities or small research centers. If they do not patent

effects in patients.”

their discoveries, it will be easy for others to copy the results.”

| VIEW FROM THE TOP

TRUST: THE ESSENTIAL ELEMENT WHEN WORKING WITH REGULATORS JUAN PABLO NAVA Commercial Director of NYCE 50

Q: How has NYCE’s service portfolio evolved alongside the

COFEPRIS is becoming increasingly open to authorized

industry and regulators?

third parties, which have allowed the regulator to shorten its

A: NYCE began operating as an authorized third party for

approval times and get rid of most of its backlog. COFEPRIS

healthcare in early 2011 but the company’s history dates

is also increasing the capacities of authorized third parties.

back to 1994 with the certification of electronic products,

For example, in early 2018 it opened tenders for authorized

including medical devices. Since then, we have incorporated

third parties for advertising and pesticides.

six companies: NYCE Laboratorios, which is in charge of developing test protocols; CNCP, in charge of conformity

Q: How do the authorized third parties support COFEPRIS’

concerning plastics, water and chemicals; NYCE SIGE, which

continuous improvement processes?

certifies management systems and Movilar NYCE, which

A: We have opened opportunities for the creation of technical

will oversee the evaluation of hydrocarbons. NYCE also has

appointments (citas técnicas) through our close collaboration

two companies abroad: NYCE Colombia and NYCE Asia.

with COFEPRIS. This has allowed a close communication to

The company plans to continue growing and by 2018 our

streamline approval processes and greatly reduce approval

medicine division will expand to include biotechnological,

times, benefiting both the industry and COFEPRIS. This

allopathic and herbal medicines.

collaboration has allowed the reduction of registration times from over 73 days to less than 30 in the case of medical

NYCE is greatly concerned with continuous improvement

devices and from 54 to 28 in medicines, benefiting companies

and is one of the few verification units with an ISO 9000

willing to import their products into the Mexican market.

certification, which we have had for over 10 years. By early March 2018, NYCE had generated over 1,100 technical

Q: How are local regulators working to improve the

reports, of which over 90 percent have been approved.

pharmaceutical sector?

Our last audit by COFEPRIS awarded us a “highly trusted”

A: The Mexican government is involved in the generation

rating. NYCE has also developed over 700 standards to

of alliances and trade agreements with foreign countries

support several sectors, including plastics, polymers and

but it must also invest in the strengthening of the Mexican

electronics, and we are collaborating with the government

industry. It would be extremely beneficial for local

on the development of NOMs for the benefit of the industry.

companies already certified by COFEPRIS to have such certifications recognized abroad. For example, having the

Q: What is the next step in the collaboration between NYCE

quality of Mexico’s products recognized throughout Latin

and COFEPRIS?

America would be a boost for the sector. Our regulators are

A: As the technical arm of COFEPRIS, NYCE is in a position

making great efforts to obtain recognition from WHO and

to support both the industry and the regulator. Our role is

PAHO, which will help the local industry.

to help COFEPRIS accelerate its processes to review and approve paperwork while ensuring compliance with all

Q: What can Mexico offer so that foreign companies

regulations. Authorized third parties are relatively young

continue investing in the country?

organizations, having been created only seven years ago,

A: Investments may slow slightly during 2018, as the sector

so the next step is to reinforce and consolidate them.

awaits the course to be outlined by the new presidential administration. We have seen great interest from the foreign pharmaceutical sector to continue investing in

NYCE is one of the largest authorized third parties in Mexico.

Mexico as new medications enter the country every year.

It supports companies through the certification of electronics,

The pharmaceutical sector does significant investment in

medicines, medical devices and food labels. NYCE has operated

R&D, which translates into the development of innovative

21 years as a verification unit

medications to treat common diseases.

VIEW FROM THE TOP |

THE FAST TRACK FOR REGULATIONS OCTAVIO VIAL Director General of TESIS 51

Q: COFEPRIS has greatly reduced its approval times. How

Q: What are the main obstacles faced by companies that

are authorized third parties helping both COFEPRIS and

want to commercialize their products in Mexico?

the private sector?

A: The main problem with foreign companies is that they want

A: Through our services, we connect the authorities and the

to enter the market under other international regulations,

private sector. We mainly communicate the needs of the

which slows down processes. We would like to reach more

pharmaceutical and medical devices industries to COFEPRIS

international companies to improve their registration process

to reduce registration times. The relationship with the

and the availability of their products in Mexico.

authorities could be improved with better communication. This synchronization would improve registration processes

Q: How would you describe the marketâ&#x20AC;&#x2122;s response to the

and would accelerate the growth of the industry, especially

economic uncertainty of the past year?

for foreign companies.

A: The response from companies has been different because they were trying to get the registration ahead of the July

Our verification process is highly specialized because

presidential elections. For us, it has been a great year

we help our clients from the collection of the necessary

because we are increasing our client portfolio. COFEPRIS

documents to the final registration.

relies on our system to previously verify medical devices and pharmaceutical products and we have also reduced

Q: What is the profile of the companies that TESIS

registration times by 50 percent. Mexico has a large market

works with?

of medical devices and pharmaceutical products; it is

A: TESIS works with companies from a wide variety

important that TESIS is ready to meet this demand.

of sectors, such as large pharmaceutical companies, distributors, laboratories and medical devices companies in Mexico and the rest of the world. Our quality allows us

Terceros en Servicios de Riesgos Sanitarios (TESIS) is an

to provide services to more than 100 companies. We are

authorized third party that provides pre-opinions on risk health

recognized as the fastest authorized third party in the

services for the control and surveillance of the law, regulations

country and for offering the highest quality services.

and calls by the Ministry of Health.

| INSIGHT

AUTHORIZED THIRD PARTY SEES OPPORTUNITY IN INFORMATION RULES CARLOS BOONE Director General of Autorización de Terceros en Publicidad (ATP) 52

As markets grow and consumers have more choices of

regulation is one of the strictest in the world.” One of the

products and services, advertising plays an increasingly

main projects led by authorized third parties is to help

important role in the commercial success of companies and

companies in transition to shape their global campaigns

brands. COFEPRIS believes that regulations are needed to

and to understand local regulations.

oversee all information related to products that could have an impact on health. However, not many are aware of the

Another area that requires a greater scope of advice is

importance of this regulation, providing an opportunity for

digital advertising. “Many companies that carry out digital

authorized third parties like Autorización de Terceros en

advertising are not complying with the law, which can be

Publicidad (ATP).

very dangerous for consumers,” says Boone, adding that another obstacle driven by digital advertising is unfair

“There is a lack of knowledge about health regulation in

competition. Despite operating with a complex regulation,

advertising,” says Carlos Boone, Director General of ATP,

Boone believes such conditions are necessary. “I do not

one of the six authorized third parties in advertising certified

think Mexico is over-regulated. I think the regulation is right

by the sanitary agency. “Authorized third parties assume

for our country because monitoring advertising is very

the weight of COFEPRIS since everyday a large amount of

difficult and a more flexible regulation would not serve

publicity is created and it is difficult for the institution to

the public.”

review it in a timely fashion.” When operating within a regulation of this type for Boone describes the process of certifying authorized third

advertising, interpretation becomes an issue. Authorized

parties as complex. First, COFEPRIS verifies that there

third parties are in permanent contact with COFEPRIS.

are no conflicts of interest and that there is no link with

Also, to ease the adaptation to the regulatory framework,

another third party. The agency also does a profile check

ATP works with its clients’ advertising and communications

of all certified professional adjudicators. “The certification

departments and trains their marketing staff. Boone also

of our staff is specific to us, so they cannot migrate to other

believes that Mexico needs to make more advertising

certified company,” Boone adds. To have a comprehensive

space available, creating another area of opportunity.

base of experts capable of managing different types

“ATP can help create more business opportunities since

of products and customers, ATP needed chemistry

we are at the forefront of compliance with the regulatory

professionals, doctors and market specialists, among other

framework. When we approach clients that are unaware of

positions. “There are sectors that invest more in advertising,

the regulation, we are promoting opportunities for other

such as alcoholic beverages and laboratories. However, the

types of services, such as advertising agencies or marketing

area of opportunity is in sectors that do not know much

agencies.” For ATP, marketing agencies could be a strategic

about regulation in advertising. Our responsibility is to

ally to offer clients an integral service.

provide access to this information,” says Boone. He adds that knowledge gaps exist mainly in companies that belong

Currently, ATP focuses on providing services to companies

to segments such as pesticides, small cosmetic clinics and

working in the sectors related to alcoholic beverages,

food supplements. Manufacturers do not know what they

pharma and food supplements, although in the short term

need and what are the steps and requirements that must

the company is interested in migrating to the pesticide

be met, he says.

segment. “There are many industries and companies willing to follow the regulatory framework, but they lack the

Another challenge in terms of advertising, especially in the

necessary knowledge. Our mission is to create awareness.

case of international companies, is to adapt the campaign

To achieve this, we need the support of other industries

to each country, since, according to Boone, “Mexican

and their authorities.”

VIEW FROM THE TOP |

HOW TO TAKE HEALTH ADVERTISING TO EXCELLENCE LUIS FARIAS Director General of TAAP 53

Q: What gaps are authorized third parties like TAAP filling

A: Advertisers must regulate their own creative processes.

in the industry?

Sometimes, advertisers arrive with the TV production

A: TAAP helps ease the burden on COFEPRIS regarding

ready, but a grammatical detail in the ad or a gesture in the

advertising oversight, especially after the arrival of digital

image can derail the authorization. The ideal is to prepare

media. Another area that needs to be addressed is the

a proposal with a storyboard before producing the final

lack of knowledge surrounding the regulatory framework

product. The worst thing that can happen to an advertiser

for advertising. Big advertisers do not need the absolute

is to produce a campaign, fail to obtain authorization, which

support of an authorized third party because they know

prohibits the campaign from going forward, and to receive

the rules; however, there are many advertisers who do not

a fine as a consequence.

even know they are regulated. As authorized third parties, we have the obligation to educate advertisers on what is

Q: How is the relationship between authorized third parties

regulated and what is not.

and COFEPRIS? A: The market is very happy with the work of authorized

Q: What responsibility do authorized third parties have in

third parties and how we work with COFEPRIS. After the

the health industry?

authorized third parties were chosen, more people joined

A: For constitutional purposes, an authorized third party is

the discussion regarding the regulation of advertising. We

the authority, which is why we are subject to the liability

are learning from COFEPRIS and they are learning from

law of public servants. In addition, companies must pass

us, which is making criteria more transparent, equal and

through a number of filters to receive authorization from

understandable.

COFEPRIS. First, the company must demonstrate its knowledge and ability to comply with the work. Second,

Q: What are the main challenges in regulation?

the company cannot be linked to additional businesses

A: Our regulation has been kept up to date since at the

because that could entail a conflict of interests. Sometimes

beginning it was thought for media traditions that today

customers feel they have the right to obtain our approval

are out of trend. Therefore, it is confusing to deal with

just because they pay for our service, but we are an official

new types of advertising. For example, online media have

authority figure. We have to educate the market because

become a challenge. An image or an ad for radio and

we are not intermediaries, we make verdicts.

television can be analyzed quickly and is likely to receive approval within hours. With digital advertising everything

Q: What consequences do pharmaceutical companies

is more difficult, since other factors come into play and

face because of a lack of guidance in the regulation of

with the new digital platforms campaigns are everywhere.

advertising?

Before, advertising was very clearly defined; it was for

A: When the authorities recognize an unauthorized ad,

products or services. Today, one of the main modes of

they ask for its removal and perhaps impose a fine. The

advertising is institutional advertising, which promotes

most serious consequence is the confiscation of products.

brands without products. There is no regulation for this

The discovery of an ad that has not been authorized could

type of advertisement and we are applying the same rules

also jeopardize the approval of the product. Research,

as if it was a product.

manufacturing, distribution, commercialization and advertising are covered by health regulations. Therefore, a mistake in one of these links can affect another.

TAAP is an authorized third party for advertising of food, nonalcoholic and alcoholic beverages, medical devices and

Q: How can authorized third parties contribute to improve

pharmaceuticals. The company began operations in June 2017

the commercial opportunities available to advertisers?

after COFEPRIS authorized it to oversee advertising

| EXPERT OPINION

TRADE AND HEALTH LAW: REGULATORY HARMONIZATION, CONVERGENCE CHRISTIAN LOPEZ-SILVA Partner, Head of Healthcare and Life Sciences at Baker McKenzie 54

In contrast to other fields, international health law and health

barrier to trade (TBT); and second, in identifying and

regulation is not harmonized. Each country has its own

agreeing Product Specific Annexes (PSAs) as part of the

regulatory framework with its own specific requirements,

TBT Chapter, which contain an array of substantial tools to

which significantly increases the cost of bringing products

promote regulatory coherence.

to the market. Regulatory harmonization in this sense is the Holy Grail for companies. However, a major and relatively

Earlier versions had been first incorporated to other bilateral

unnoticed development in international law has recently

FTAs. On the one hand, the procedural tools of regulatory

taken place in relation to human health and trade law. In a

coherence were first introduced to the Comprehensive

global context, this normative innovation could result in a

Economic and Trade Agreement (CETA) signed between the

similar shift that took place more than two decades ago,

European Union and Canada. On the other hand, an earlier

when IP was first incorporated to international trade law.

version of the dual mechanism, containing both procedural and substantial tools, was first incorporated to the FTA

The first precedent would be the negotiation and adoption

between the European Union and South Korea. The scope of

of the 1994 NAFTA treaty, which had a profound impact on

these PSAs continues to grow. The products covered in the

the Mexican regulatory framework. Prior to NAFTA, the 1984

PSAs include pharmaceuticals, medical devices, cosmetics,

General Health Law (GHL) in Mexico required all regulated

organic produce, information technology products, food

products to be subject to a prior marketing authorization.

products, alcoholic beverages and chemicals. Considering

Thanks to the adoption of measures based on science and

that most of these products are regulated under health law

risk, the GHL was amended and the majority of products

instruments, this normative development has a particular

were released from a premarket approval and were moved

significance for the international regulation of life sciences.

to a simple notification system. The second precedent came as a result of the arbitration mechanism created under

The most advanced version of this form of regulatory

another FTA, this time with our southern neighbours. In that

convergence is that contained in two FTAs: the Pacific

case, Mexico was forced to change its regulatory framework

Alliance and the now relaunched Comprehensive and

applicable to medicines, resulting in the removal of the local

Progressive Agreement for Trans-Pacific Partnership

manufacturing plant requirement. Now, the international

(CPTPP). By incorporating both a CRI and PSAs, and

paradigmatic change in FTAs highlighted here has been

framing this directly as a TBT matter, these two treaties

carefully introduced through a dual mechanism, comprised

most likely constitute the fresh new template for a new

of a softer and a harder approach. Combined, they represent

generation of regional FTAs. The new model incorporates

the most advanced form of regulatory convergence.

significant provisions disciplining aspects of human health regulation, offering the best chances so far to

The softer approach has consisted of adding to an FTA a

allow the birth of a new era of regulatory harmonization,

Chapter on Regulatory Improvement (CRI), which refers to

and with it, the possibility to restructure and reshape

the array of procedural tools aimed at reducing regulatory

supply chains.

divergences and promoting regulatory coherence, including transparency, inter-institutional coordination, public

At the same time, it invites professionals of different

consultation, best regulatory practices and international

disciplines to increase collaboration and mutual

cooperation.

understanding. To effectively help life sciences companies navigate these complex times of uncertainty and

The harder approach consisted first, of framing human

opportunity, law firms require lawyers from different legal

health regulation not as a sanitary and phytosanitary

specialties to create the right mechanisms to work more

issue under the respective FTA, but rather as a technical

closely, more internationally and with an industry focus.

ROUNDTABLE | Regulators must ensure that medications are safe and effective to guarantee a patient’s well-being. While doctors and pharmaceuticals might want to place a medicine as fast as possible in the hands of the patient, every drug must undergo a comprehensive regulatory process designed to protect users. Mexico Health Review spoke with policy experts on how to achieve the former objective without sacrificing the latter.

HOW SHOULD REGULATIONS BALANCE DRUG APPROVALS AGAINST MEDICAL NEEDS? 55

In 1991, local regulations changed after Mexico entered the General Agreement on Tariffs and Trade (GATT) and began preparations to enter NAFTA. NAFTA’s chapter on IP is much more solid and more specific than subsequent agreements, including the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) with the World Trade Organization (WTO). One of the most important topics related to IP agreed in NAFTA was the management of clinical data and open medications. Mexico’s entry into the Patent Cooperation Treaty (PCT) in 1995 allowed the country to advance in the standardization of its regulations in accordance with international standards. The signing of this treaty also increased the number of Mexican patents, which went from approximately 9,000 to 17,000 per year.

HÉCTOR CHAGOYA Partner, Director of Patents and Technology at Becerril, Coca & Becerril

There has been an obvious improvement as the regulatory process is now less repetitive, especially when it has been approved in the US or Europe, and offers third-party expert opinion on clinical, safety and other major issues. The result has been to reduce approval times from perhaps a couple of years to around 90 days in the case of NCEs. However, adoption in the National Formulary, or Cuadro Básico, is an even more complicated issue. Our local research has shown that it is possible to improve healthcare outcomes while reducing spending, which is so important in a market where chronic degenerative diseases threaten the sustainability of healthcare. This is based on placing the patient at the center of care, making them responsible for how best to spend their Medical Savings

PAUL DOULTON Founder and Managing Partner of Oriundo

Plan – still to be adopted – guided by a trusted family doctor, and now far more aware through the internet and Big Data.

The government should increase its participation in programs that support the healthcare sector, especially for the production of local R&D and the protection of the IP it generates. Legal certainty is one of the main areas that should be prioritized for foreign companies to continue investing in Mexico. For the pharmaceutical industry to continue investing here, it must feel that the IP it generates is safe. Along a similar line of thought, the government should develop strategies to prevent a brain drain through the generation of large local research centers.

JUAN PABLO NAVA Commercial Director of NYCE

| VIEW FROM THE TOP

BIOTECHNOLOGY WAVE COMING TO MEXICO

Abel Hernández Director General of ANCE

Yoloxóchitl Macías Chief of Health Area at ANCE

Q: Last year, you mentioned that foodstuffs and healthcare

molecules. The products are patented at the time of

represented just 2.73 percent of your operations. How has

discovery but since development and testing can take such

this figure evolved and why?

a long time, the period of exclusive patented-protected

AH: The healthcare industry in Mexico is growing quickly and

sales ends up being shorter. This can lead the manufacturer

now represents between 15 and 18 percent of our business.

to increase the cost of the medication in order to recover

Last year, ANCE focused mainly on medical devices but we

its R&D investment.

are also seeing emerging opportunities in biomedicines. The country has many prospects for laboratories, especially in

YM: Patents for biotechnological products last 20 years but

the case of biotechnological products, due to their complex

the industry is arguing for longer periods. Regulators need

requirements in comparison to small molecules. For that

to work together with the industry and with academia to

reason, laboratories are investing in Mexico to develop these

balance economic returns and public policies that address

medications. We believe that ANCE can continue growing

access to care.

in this area at a double-digit rate for the next three years. We believe that biotechnology will continue to strengthen

Q: How can regulators keep up with the fast pace of

our business.

technology? YM: COFEPRIS is working hard to keep pace through

YM: Due to their complex nature, biosimilars require

close communication with technology developers. At this

extensive testing because unlike small molecules,

moment there is no regulation related to nanomedicine,

biotechnological products are never exactly the same.

so one of the objectives should be to discuss strategies to create related regulations.

Q: Considering the national and international environment, what changes do you see in investment in Mexican

AH: Mexico is already a leader in the regulation of medicines

healthcare?

in Latin America and it can become a regulatory leader in

AH: Mexico is a very attractive country for investment.

other areas, such as biomedicine. Eventually, the country

It is a leader in the export of technological products in

will become a reference for the regulation of medicines

many different sectors. The pharmaceutical industry will

and medical devices.

see Mexico as an attractive destination for technological FDI because the country is also an excellent platform

Q: What role will authorized third parties play in improving

for Latin America. It is necessary for the country

COFEPRIS’ processes?

to develop incentives that can further attract the

AH: The overall objective of authorized third parties

pharmaceutical industry.

is to make the registration process more efficient so pharmaceutical products can be put on the market earlier.

Q: What are the main challenges when commercializing a biotechnological product in Mexico?

YM: Before the introduction of authorized third parties,

AH: The development of biotechnological drugs is often

COFEPRIS had about 8,500 approvals pending. Delays

more expensive and takes more time than that for small

result in significant expenses to manufacturers that had already established timelines to launch the product to market. With medical devices, our response time averages

ANCE , certifies industry standards and regulatory compliance

40 labor days and the shortest time has been 17 labor

in many different sectors, including foodstuffs, automotive,

days, both of which are extremely short in comparison to

electronics and healthcare. In the healthcare sector, ANCE acts

other companies. With medicines, our average time is 30

as an authorized third party to facilitate approval processes

work days.

VIEW FROM THE TOP |

CLINICAL TRIALS: WHERE SCIENCE MEETS REGULATIONS GABRIEL MARCELÍN Director General of Pharmometrica 57

Q: What are Pharmometrica’s main priorities?

A: Pharmaceutical companies are manufacturers and the

A: Pharmometrica is a private research center and an

responsibility for the design and execution of research

authorized third party, which allows it to provide research

protocols rests with the scientific team of authorized

services to the pharmaceutical industry in accordance with

third parties. Bioequivalence studies are neither cheap nor

regulatory requirements. We hold a license as a clinical and

fast. Just one study can cost about MX$1 million and take

analytical unit that allows us to perform bioequivalence

between six and nine months.

studies and dissolution assays. We study the efficacy of generic forms of innovative medicines that have already

Q: What added value does Pharmometrica offer to entice

demonstrated to be safe and effective. Bioequivalence

companies to work at the institution?

research in Mexico has been useful in several areas. Knowing

A: We have a multidisciplinary approach and we

how our population reacts to medicines helps us to modify

provide coaching services. Pharmometrica is composed

prescription information to ensure safer and more effective

of researchers specialized in analytical chemistry,

therapeutic schemes.

pharmacology, toxicology, statistics and regulatory affairs. We do not merely sell the project; we create synergies with

Q: Are foreign pharmaceutical companies interested in

our clients to perform an efficient and enhanced procedure.

conducting their bioequivalence tests in Mexico? A: The law states that all generic medicines must be subjected

Q: What are the main challenges that Pharmometrica has

to interchangeability or bioequivalence studies on the Mexican

faced while recruiting volunteers?

population before being sold in Mexico. While Mexicans are

A: The usual stay of a healthy volunteer is 15 days

a highly mestizo population, the pharmacological behavior is

in a bioequivalence trial, while a clinical protocol

sometimes surprising. For instance, Pharmometrica’s research

entails monitoring a patient for months or even years.

team discovered that there are five subpopulations in Mexico,

Researchers often carry out five to 10 protocols at a time

each with its own phenotype for Omeprazol. While some of

because the pharmaceutical industry pays them for each

these phenotypes could intoxicate with a 20mg dose, others

patient they recruit. A good clinical researcher cannot

will never heal with the same dosage.

be handling more than three or four protocols at a time. Pharmometrica can perform up to five bioequivalence

Q: What are the main challenges that Pharmometrica has

studies at the same time.

faced in conducting bioequivalence tests? A: When a patent for an innovative medicine expires, the

Q: What does Mexico need to do to attract more

laboratory that launches the first generic will have the

opportunities in clinical research?

greatest commercial advantage. However, prices fall as

A: The main constraint is the time it takes the sanitary

more generics enter the market and the pharmaceutical

authority to authorize projects. I think the work should be

industry then loses interest in that product. One way to

redistributed and include more extensive training for the

help improve the generics market is to create a faster

ethics and research committees. If a research committee

COFEPRIS protocol for authorizations. Research protocols

issues an opinion on a protocol, COFEPRIS does not need

must be verified and approved by independent research

to review it further.

and ethics committees before trials can be conducted. If these committees are already doing this job, there is no point in COFEPRIS doing it again.

Pharmometrica is a 100 percent Mexican research center specifically created to operate as an authorized third party.

Q: What are the main obstacles to expediting the execution

It develops clinical trials in generics interchangeability and

of research protocols?

bioequivalence

| VIEW FROM THE TOP

STRATEGIC APPROACH TO IMPROVE HEALTH BUSINESS

Xavier Ordóñez Partner in Strategy and Operations Consulting at Deloitte

Horacio Peña Senior Manager in Strategy and Operations Consulting at Deloitte

Q: What impact can organizations like Deloitte have

XO: There are two factors that are important for

on the implementation of technology in the Mexican

manufacturers of health-related materials. First, reduce

healthcare system?

costs and time, because many products have expiration

HP: Many of our clients have all the pieces, but they

dates. We also need more support from customs.

do not know how to put them together to extract the benefits technology offers, which is where the external

HP: Healthcare players are interested in implementing

consultant comes in.

proven models of supply chain management. In fact, references to “sales and operation planning” taken from

XO: New methods and technologies can help patients.

the manufacturing and consumer industry have been used

For example, a new drug or treatment can heal patients in

in the pharma and healthcare industry. The industry has

less time than the current widely-used treatment, which is

aligned the supply chain and logistics to have the lowest

very important in the public sector since there is a direct

operation cost.

relationship to cost of patient care. Q: What opportunities will Mexico’s logistics potential Q: What are the most frequent concerns Deloitte’s clients

provide e-commerce?

have in relation to healthcare?

XO: In terms of e-commerce, Mexico has improved a

HP: Our clients are under pressure to improve the

great deal, especially in the retail and mass consumption

efficiency of their operations. They need to achieve a

segments. Therefore, the healthcare sector can take

certain profitability and this makes them explore options

advantage of this experience. There are many logistics

to improve their bottom line. Many of the support requests

operators that act as third parties when managing the

we receive are related to operational efficiency, reducing

supply chain of small and medium companies, and pharma

costs and improving margins.

companies can take advantage of these suppliers.

XO: Customers are interested in improving the client

HP: It is also possible to get into the business of

experience but they are also concerned about reducing

manufacturing medical devices. Mexico already has

the launch cycle of any new treatment or molecule. They are

experience in the aerospace and automotive industries

trying to identify in which parts of the cycle they can reduce

and the country has gained great recognition in local

time, since time is money, and they also are interested in

manufacturing.

comparative price analysis to review how their product compares to those of their competitors. The hospital

Q: Where should players look to increase the potential of

groups focus on developing centers of excellence or shared

the Mexican healthcare industry?

services centers to reduce costs and improve quality, which

XO: The industry should not lose focus on the conversations

is very common in other countries.

between the private and public sectors. In addition, the industry must find innovative means to achieve better

Q: How can a developed logistics sector benefit the health

communication with the appropriate amount of resources.

industry in Mexico? HP: At Deloitte, we are adopting a new approach for each industry: digital, plus analytics, plus cloud (DAC). In the Deloitte is one of the world’s leading audit, consulting,

healthcare segment this model will be key to take care of

tax, financial advisory and risk advisory brands, with about

business opportunities. In Mexico, the private sector is very

245,000 people at member firms in 150 countries and

close to adopting digital analytics and cloud systems and

territories

will soon be followed by the public sector.

VIEW FROM THE TOP |

INTEGRATING NEW HEALTH JOSÉ ALARCÓN Lead Partner of Healthcare at PwC 59

Q: According to PwC’s 21st CEO Survey, Mexico ranked

the system, like consulting a variety of health professionals,

13 among the best places to invest in 2018, five positions

not only doctors, and considering other options besides

lower than in 2017. Why is investor confidence dropping?

physical consultations, such as mobile or virtual health.

A: Thirty-eight percent of Mexico’s GDP depends on

Also, there is a trend toward collaborative models that

exports. For this reason, the country is more vulnerable to

welcome new participants. In Mexico, there is a great need

protectionism than others like the US, whose GDP is 12 percent

for patients to have one collective voice and “New Health”

dependent on exports. I am convinced that this is a temporary

is helping to strengthen this voice.

situation in a period in which investors seek certainty; however, I do believe that the best option is not to be found in a closed

Q: Where are the business opportunities in this

market in which there is very little competition.

environment? A: We see opportunities in the public-private collaboration

Q: What is PwC’s assessment of the Mexican health system,

schemes. The public sector is overloaded, so building more

taking into account global trends in the sector?

public infrastructure or increasing the number of employees

A: There is an urgent need to conduct a deep reform of

is not the best solution. There are also opportunities in the

our National Health System to eliminate duplications and

creation of new payment schemes, like payment based

improve patient experience. The Mexican government

on results. In the public sector, opportunities will revolve

wants to expand telehealth capabilities in public institutions

around innovative patient-focused access models that

and is developing user-friendly apps for chronic disease

help the public sphere maximize resources and acquire

prevention and care. Better healthcare information

the necessary innovation to provide medical care to the

technology could enable health access for 15.5 million

population for which they are responsible. In the case

additional patients per year in Mexico and reduce spending

of the private sector, the opportunities are in making

by US$3.8 billion.

supply chains efficient and with profitable prices for new players. The distribution game was centralized with the

The use of electronic health records (EHR) is uneven. IMSS

big wholesalers, but now we have retailers and pharmacy

has made the greatest progress, with separate systems

chains that are changing ways to compete and introducing

covering all primary care and hospital facilities. The Ministry

fees for service models.

of Health has EHR coverage in about 25 percent of its public hospitals and a handful of primary care systems.

Q: How is PwC increasing access to healthcare through

Seguro Popular funded EHR efforts, but funding shortages

its services?

since 2009 led to a marked slowdown in new projects.

A: Trust is the basic element. We are convinced that since its

Given these challenges, the Ministry of Health refocused

foundation, PwC has instilled trust in society and provides

efforts on telehealth for professional training and clinical

solutions to our clients for important issues that contribute

and administrative support in community and specialty

to the improvement and transformation of the Mexican

hospitals. In 2015, telehealth was present in 671 public

health sector. In Mexico, it is important to recognize health

medical units, the majority – 450 – of which are in the

as a key factor for having a productive population that

Ministry of Health. A total of 45,000 consultations were

contributes to Mexico’s economic development.

provided at the ministry’s facilities in 15 states, supporting mostly mental health and internal medicine. PricewaterhouseCoopers (PwC) is one of the Big Four

Q: How does PwC define the concept of “New Health”?

professional services firm. It offers audit, consulting, legal and

A: The purpose of “New Health” is to revolutionize the way

financial services in different industries, including healthcare. It

care is provided. It suggests different transformations within

has international operations and headquarters in London

Neonatal intensive therapy DrĂ¤ger equipment

HOSPITALS & CLINICS

Mexico faces a growing number of chronic diseases that unlike infectious ailments require continued care throughout the patient’s life. This will place a growing burden on healthcare institutions that are already tied to resources to address

the needs of today’s patients. Hospitals and clinics are rising to the challenge by employing innovative strategies, from collaborations between public and private institutions to the use of Big Data to develop new, more efficient models for care.

Through interviews with the leaders of the country’s healthcare institutions, both public and private, and their providers, this chapter will analyze how hospitals are evolving to address the coming challenges. It will additionally analyze emerging strategies to update and improve existing models of care. This section also includes interviews with the healthcare supply chain to pinpoint areas for improvement and examine potential collaborative solutions to address them.

CHAPTER 3: HOSPITALS & CLINICS 64

ANALYSIS: Technology, Alliances Address Hospital Infrastructure Problems

INFOGRAPHIC: Urgent Care Needed for Local Hospitals

VIEW FROM THE TOP: Javier Potes, Consorcio Mexicano de Hospitales

TECHNOLOGY SPOTLIGHT: Smart Surgery Rooms Allow Better Decision-Making

VIEW FROM THE TOP: Juan Galindo, Christus Muguerza

VIEW FROM THE TOP: Javier Okhuysen, salauno

INSIGHT: Gustavo Fernández de Loyola, Grupo Torre Médica

VIEW FROM THE TOP: Jaime Cervantes, Vitalmex

VIEW FROM THE TOP: Roberto Bonilla, Hospital San Ángel Inn

INSIGHT: Roberto Guevara, Laboratorio Biogen

VIEW FROM THE TOP: Andrés Gutiérrez, Médica Santa Carmen

PROJECT SPOTLIGHT: Mexican Subsidiary of European Group Provides Patient Comfort

VIEW FROM THE TOP: Patricio González, Hospitaria

VIEW FROM THE TOP: José Luis Jacques, Lavartex

VIEW FROM THE TOP: Miguel Velázquez, Grupo Empresarial MDF

VIEW FROM THE TOP: Manuel Sánchez, Diphsa

VIEW FROM THE TOP: Miguel Castillo, Hospital Sedna

VIEW FROM THE TOP: Massimo Pachón, Clinitas (Keralty)

| ANALYSIS

TECHNOLOGY, ALLIANCES ADDRESS HOSPITAL INFRASTRUCTURE PROBLEMS Mexico’s population is gaining weight and getting older. These two troubling trends show no sign of abating and the incidence of associated diseases, such as Parkinson’s and Alzheimer’s, diabetes and cardiovascular disease, are rising in tandem, along with the resource burden for care

Mexico is facing severe consequences of a lifestyle and a

until mid-2018 that state ministers of health from Queretaro

shifting demographic that are fueling a dramatic rise in

to Tamaulipas recognized the problem and announced that

diabetes and cardiovascular conditions. As the population

it would be addressed.

gains weight and ages, Mexico’s health system is becoming overwhelmed. A potential scenario is that a sick individual

The problem is compounded by the fact that IMSS is only

might want to visit a doctor, but whether he can access

one of the many healthcare providers in a fractured system.

one will depend largely on factors that are out of his

Mexican law states that the government must provide workers

control, such as where he lives, his workplace and his

and their families with social security but it is estimated that

socioeconomic status.

32.6 million Mexicans do not have access to healthcare services, according to INEGI. For those who do, there is no

The availability of hospitals and clinics in Mexico varies

universal provider of care. Patients are assigned a provider

widely, with Mexico City holding not just the largest

– IMSS, ISSSTE, SEDENA, SEMAR or PEMEX – based on

number, according to the Ministry of Health, but also the

where they work. This is significant because services are not

most specialized centers in areas ranging from oncology to

interchangeable. When patients need specialized care that

pulmonary diseases. A person receiving a cancer diagnosis

their provider does not offer in their home state, they will not

in Mexico City has more treatment options than someone in

be able to access a nearby hospital from a different network.

the mountains of Chiapas. In the latter case, the individual

Instead, patients must travel to the nearest hospital within

may have to travel to the state capital to visit a hospital

their network that offers the available service, which may be

with an oncology unit.

located several states away.

The latest OECD data shows Mexico had a total of 4,538

“In Mexico the lack of coordination and the fragmentation of

hospitals in 2017. However, most of those units have been

the health system hinder its potential,” said Guillermo Ferrari,

built by the private sector, which held a total of 69 percent

General Manager of Eseotres. The consequences of Mexico’s

of all hospitals in Mexico, according to the Ministry of

siloed healthcare system include a simultaneous saturation

Health’s latest Report on the Health of Mexicans. Moreover,

of some hospitals and the underutilization of others, even if

while the number of hospitals has grown it has not

they are next to each other. This results in an inefficient use of

done so equally across the country, with Baja California,

resources. In its review of the Mexican healthcare system, the

Queretaro and Mexico City concentrating most of the new

OECD warned that healthcare expenditure is not as efficient

units. Private hospitals are often out of reach to many in

as it could be as the country has the highest healthcare

a country where 80.4 percent of its working population

administration costs of all its members, totaling 10 percent

earns less than MX$7,952 (US$427) per month, according

of all healthcare expenditure.

to El Economista. Unifying these different systems remains a challenge and a

FRACTURED, SATURATED PUBLIC SECTOR

goal for the sector. In his campaign proposal to INE, President-

Despite a higher number of private hospitals, the fundamental

elect Andrés Manuel López Obrador said that tying these

problem for their public counterparts remains the same: their

systems together and universalizing healthcare would be

services are saturated. Tuffic Miguel, Director of IMSS, says

one of his government’s objectives. But this goal has been

that the government institution provides medical attention to

on the books for years and, in the meantime, players in the

six out of every 10 Mexicans, or 80 million people. So many

healthcare sector continue to look for strategies that will

people visiting so few hospitals translates into long wait times

increase their reach.

for patients and a lack of resources to care for them. For instance, according to patients and doctors, IMSS clinics faced

THE IMPACT OF ALLIANCES

a two-year drought of hepatitis B vaccine across the country

Public-Private Associations (PPA) were conceived as a

that placed infants at a significant risk. While representatives

strategy to address both gaps in infrastructure and the

from the institution minimized the problem at first, it was not

limited resources of the public sector. “Our population’s

demand for healthcare is growing fast. If the sector does

Hospital Christus Muguerza is also looking toward the

not grow in turn, many will be left without care,” says Miguel

development of specialized clinics, in this case for cancer.

Castillo, Director General of Hospital Sedna. “Public-private

Clinics of this type expect to provide excellent care while

alliances allow the healthcare sector to increase its reach,

keeping costs down by focusing on a single medical specialty.

with the patient as the main beneficiary, since it can ensure

To keep its costs down, salauno, a network of ophthalmology

better care and at a much faster pace.” PPAs consist of

clinics in Mexico City, created a vertical supply chain that can

partnerships between the public and private sectors

make large acquisitions and negotiate better prices from

in which the latter is responsible for the construction,

anywhere in the world, explains Javier Okhuysen, salauno’s

operation and maintenance of a hospital or the provision

Director General.

of a specific service. Under this scheme, the private partner is compensated by periodic payments or subrogation of the

Another barrier to care is Mexico’s large and complex

services for a contractually agreed time.

geography. With the majority of hospitals and clinics clustered in cities, rural towns and communities are often too far away

These associations have been well-received by both sectors

from healthcare services. “Many remote communities do

and are expected to continue as a strategy to increase access

not have health services or only have access to a small, local

to care. “The country will continue facing budget issues, so

clinic,” says Ricardo Reyes, Medical Manager of Dr. Vagón, El

financing will require innovative strategies. PPAs are one

Tren de la Salud. Dr. Vagón was created to save those living

possibility as the private sector is likely the most qualified to

in far-flung communities a lengthy and expensive trip to a

provide these services to the public sector,” says Francisco

hospital by bringing the hospital to them in the shape of an

Soberón, Director General of INMEGEN. In 2017, SHCP

11-carriage train.

announced three projects to construct new IMSS hospitals in Nayarit, Nuevo Leon and State of Mexico and a fourth to

TECHNOLOGY TO THE RESCUE?

substitute the current IMSS’ General Hospital of Tapachula,

As they focus on providing care, hospitals also strive to

Chiapas (Hospital General de Zona). In July 2018, IMSS’ Miguel

increase or maintain their customer base, keeping operational

said that the institute had completed four more contracts

costs down, performance up and patient complaints to a

under this scheme.

minimum. Okhuysen has a strategy to improve its internal operations and the performance of doctors working at his

OUT-OF-THE-BOX THINKING

clinics. “We are exploring many areas, including using artificial

Another strategy to increase access to care and a business

intelligence in the interpretation of electronic clinical files to

opportunity rolled together are private organizations with

help doctors with their decision-making process.”

services that target the lower or middle class, an overlooked niche. Hospitaria is taking this approach in Monterrey. “Most

Technology is increasingly penetrating hospital operations

hospitals in the city either focus on high-income populations

and has the potential to greatly change them. In its report

while the rest are public hospitals focused on those with low

Hospital of the Future, Deloitte states that future hospitals

income. There are almost no hospitals for the middle class,

will leverage technology to transform care delivery,

so Hospitaria’s services are targeted toward the middle class

patient experience and operations and staff management.

and lower-middle class population,” says Patricio González,

Moreover, technology can be used to help doctors improve

Director General of Monterrey-based Hospitaria.

care by compiling, processing and providing information with which to make decisions. “It is very common for clinics

Privately-operated clinics are also an attractive opportunity

to have a large amount of patient information mixed up

for both local and international companies. For instance,

and dispersed. Moreover, franchises of the same clinic or

Mexican hospital supplier Vitalmex aims to diversify into this

hospital do not communicate with each other; therefore, if

sector with the construction of its own private clinics. “In 2018,

the patient changes their location, they must again provide

we will begin the construction and operation of these clinics,

all their medical information,” says Jorge Camargo, Co-CEO

which will be directed to a sector of the population that does

and Co-founder of Ecaresoft.

not have access to services for nontransmittable diseases” says Jaime Cervantes, Director General of Vitalmex. A foreign

However, as Mexican hospitals implement the technology

company that was attracted by this market is Keralty, which

in their practices, the general problem for the healthcare

comprises a network of over 76 medical centers spread

sector remains unchanged. “The great challenge that Mexico

around the world and operates in Mexico under the name

has is the fragmentation of data, a direct consequence of

Clinitas. “We are convinced there is a need in Mexico for the

the fragmentation of the country’s health system. Therefore,

provision of health services that truly address the basic health

in Mexico it is difficult to produce valuable information

problems of the population,” says Massimo Pachón, Director

about the health sector,” says Xavier Valdez, Director

General of Clinitas.

General of IQVIA.

| INFOGRAPHIC

URGENT CARE NEEDED FOR LOCAL HOSPITALS Key to the performance of any healthcare system are its

major cities forcing a significant percentage of the population

hospitals and clinics, which provide everything from primary

to travel long distances for basic medical attention and even

attention to end-of-life care, but Mexico’s booming population

a greater distance to be seen by a specialist. While Mexico’s

has surpassed the capabilities of its hospital infrastructure.

president-elect has proposed to increase investment in

With 1.5 hospital beds per 1,000 people, the country has the

healthcare, others are looking toward telemedicine, smaller

lowest number of hospital beds among OECD countries,

and even portable clinics or the use of technology to increase

which average 4.7. Moreover, hospitals are often clustered at

the reach of existing healthcare services.

NUMBER OF VISITS TO A DOCTOR (million)

TOP 10 STATES BY NUMBER OF HOSPITAL BEDS

100

150

200

250

2005 2006

2007

7 2008

2009

2010

2011

First-time visit to a

2012

general doctor

Follow-ups with a

2013

general doctor

First-time visit to a specialist

2014

Follow-ups with a 0

specialist

OECD COUNTRIES TOTAL HOSPITAL BEDS PER 1,000 PEOPLE

14 12 10 8 6 4 2 0

2010

——Japan ——Germany ——France

2011

——Spain ——US ——Canada

2012

2013

——UK ——Turkey

2014

2015

——Chile ——Mexico

2016

SURGERIES PERFORMED IN MEXICO (million)

HOSPITAL BEDS, CONSULTING ROOMS AND SURGERY ROOMS PER 100,000 HABITANTS

5 4 3 2

Source: INA

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

State

Beds

Consulting rooms

Surgery rooms

Mexico City

180.7

67.3

7.2

Campeche

99.3

65.1

Baja California South

96.8

75.8

4.5 3.7

Coahuila

93.1

52.1

Yucatan

90.2

2.7

Durango

91.8

65.3

3.2

Sonora

88.8

52.7

3.3

Tamaulipas

88.3

50.2

3.4 4.4

Colima

85.1

69.8

Jalisco

83.8

46.9

Chihuahua

76.9

40.8

3.1

San Luis Potosi

74.9

46.6

2.7

Aguascalientes

71.2

60.4

2.9 2.5

Nuevo Leon

70.7

54.4

Sinaloa

70.7

51.4

Quintana Roo

67.2

47.1

3.5

Zacatecas

65.5

53.6

3.4

Tabasco

65.1

3.4

Baja California

65.1

33.2

2.3

Veracruz

63.5

52.2

Nayarit

62.9

65.9

3.1 2.7

Puebla

60.4

44.5

Morelos

60.1

50.5

3.1

Michoacan

56.4

2.4

Guanajuato

54.1

35.3

2.5

Oaxaca

53.1

54.5

2.5 3.6

Guerrero

51.6

57.7

State of Mexico

49.1

32.6

1.7

Hidalgo

47.7

60.9

1.7

Queretaro

46.3

2.2

Tlaxcala

42.1

44.4

2.6

Chiapas

41.1

45.4

2.4

Key ingredients for productive healthcare operations: • Safe and evidence-based processes • Well-trained work force • Effective use of new technology

4,354

total number of hospitals in Mexico Sources: OECD,Deloitte, INEGI Ministry of Health 2014. Latest available data.

| VIEW FROM THE TOP

SME HOSPITALS JOIN FORCES TO STRENGTHEN HEALTH OFFER JAVIER POTES Director General of Consorcio Mexicano de Hospitales

Q: What are the main advantages hospitals get from

to make it easier for the patient to review and make more

joining Consorcio Mexicano de Hospitales (CMH)?

informed decisions.

A: The consortium now consists of 40 hospitals distributed in 38 cities in 23 states. We have 1,150 beds, 9,000 doctors

Q: How does this hospital network help improve the

and 86,100 hospitalized patients. The main advantages

overall healthcare system?

are the numerous opportunities to establish contacts.

A: We are the first private healthcare network in Mexico.

Since most of our members are small to medium-sized

We want more hospitals to join this model and increase

hospitals, it is difficult for them to compete with their

access to care, since the public sector lacks the necessary

larger counterparts. These hospitals are happy to share

infrastructure to manage the large number of patients

information because due to their location they do not

it receives.

compete with each other. Mexicoâ&#x20AC;&#x2122;s healthcare system focuses on treating diseases, Membership also allows these hospitals to participate

not on promoting healthcare. For that reason, many are

in consolidated sales and negotiate better prices for

looking to strengthen prevention practices. Sumar Salud

medications and medical devices. We are the countryâ&#x20AC;&#x2122;s

also brings together these services, so those who are

first private healthcare network but many more can be

healthy can continue to be so. To implement this, the

generated in the coming years.

consortium developed two insurance plans alongside Seguros Atlas and Banorte that cover 90 percent of

Q: What information is exchanged among members of

the most common diseases with a small deducible.

the consortium?

These insurance programs aim to reduce out-of-pocket

A: All members participate in yearly meetings according

expenditure.

to area, from management to marketing. In these meetings, hospitals share successful strategies and

Q: What continuous education programs does the

discuss common problems.

consortium provide to its members? A: The Consortium has an Integral Training Center which

Q: How is the consortium implementing a single

develops and strengthens the skills of all collaborators

electronic clinical file among its members and what

through our special programs for the direction,

advantages will patients see?

management and operative levels distributed on the clinic

A: Apollo Health, one of our strategic allies, is in charge of

and administrative areas. These programs are headed

implementing and managing electronic clinical files in all

to elevate the quality service and the effectiveness

hospitals that belong to the consortium. Together, we are

in their hospitals, resulting in the increase of their

developing Sumar Salud, an application through which

competitiveness in the market.

patients can access their own electronic clinical file and share it with other hospitals in the network. Sumar Salud

The Integral Training Center collaborates with the

was designed to gather all the information related to

international organization LILAS, integrated by the national

service providers, including doctors, hospitals and clinics

hospital associations of Argentina, Colombia, Brazil and Spain, and also with universities and medical academies.

Consorcio Mexicano de Hospitales groups several private

These latter entities contribute with their academic

hospitals for the development of innovative business models

experience and help to validate our diplomas, which

and to consolidate growth. The consortium provides training

are already validated by the Ministry of Labor and

programs for its members

Social Security.

Q: What is CMH looking for in future strategic partners? A: We look for strategic allies that allow us to develop projects that help our hospitals individually and in our system as a whole and programs that offer health services with a higher quality and a more accessible cost for the population.

HOSPITALS BELONGING TO CONSORCIO MEXICANO DE HOSPITALES’ NETWORK Hospital

Location

American Medical Center

Cabo San Lucas, Baja California South

Centro Hospitalario la Concepción

Saltillo, Coahuila

Centro Médico Coscami

San Juan del Rio, Queretaro

Centro Médico de Chetumal

Chetumal, Quintana Roo

Centro Médico de las Américas

Meride, Yucatan

Centro Médico Internacional

Matamoros, Tamaulipas

Clínica del Noreste

Hermosillo, Sonora

Clínica Panamericana de Chihuahua

Chihuahua, Chihuahua

Ginequito

Monterrey, Nuevo Leon

Grupo Torre Médica

Mexico City

Hospital Air

Villahermosa, Tabasco

Hospital Almater

Mexicali, Baja California

Hospital Ángel del Mar

Oaxaca, Oaxaca

Hospital Bité Médica

Mexico City

Hospital Cemain

Tampico, Tamaulipas

Hospital Club de Leones

Torreon, Coahuila

Hospital de Especialidades de Nuevo Laredo

Nuevo Laredo, Tamaulipas

Hospital del Prado

Tijuana, Baja California Norte

Hospital D’Maria

Veracruz, Veracruz

Hospital Farallón

Acapulco Guerrero

Hospital Fátima

Los Mochis, Sinaloa

Hospital Galenia

Cancun, Quintana Roo

Hospital H+ Querétaro

Queretaro, Queretaro

Hospital la Carlota

Montemorelos, Nuevo Leon

Hospital Mediscin

Ciudad Valles, San Luis Potosi

Hospital Molelos

Cuernavaca, Morelos

Hospital Molina

Oaxaca, Oaxaca

Hospital Poliplaza Médica

Ciudad Juarez, Chihuahua

Hospital Regional del Rio

Reynosa, Tamaulipas

Hospital Salutaris

Guadalajara, Jalisco

Hospital San Agustín

Guadalupe, Zacatecas

Hospital San Ricardo

Toluca, State of Mexico

Hospital Santa Margarita

San Luis Rio Colorado, Sonora

Hospital Sharp

Mazatlan, Sinaloa

Hospital Velmar

Ensenada, Baja California

Hospital Victoria La Salle

Matamoros, Tamaulipas

Hospitaria

Escobedo, Nuevo Leon

Medica Campestre

Leon, Guanajuato

Sanatorio La Luz

Morelia, Michoacan

Source: Consorcio Mexicano de Hospitales

| TECHNOLOGY SPOTLIGHT

SMART SURGERY ROOMS ALLOW BETTER DECISION-MAKING With patients increasingly demanding better services and doctors looking for ways to provide them, hospitals have to find ways to deliver these services while keeping budget costs within the realms of the reasonable. Integrating technology through all hospital processes is a rising trend to optimize all services, from stock of medical supplies to continuous training and from equipment maintenance to payroll. 71

To streamline processes in surgery rooms and provide doctors with more up-to-date information to allow them to make better-informed decisions for the health of their patients, Vitalmex is introducing its Quirófano Total Inteligente (Intelligent Surgery Room) service. This system aims to provide high-quality attention for patients while maintaining responsible and sustainable economic costs. Vitalmex operates under a formula designed to increase surgery efficiency from 15 to 40 percent while keeping costs down. This system also alleviates risks related to the investment in healthcare assets and their maintenance and the management of consumables, accessories and medical devices. This model has been successfully used in over 200 hospitals, which are now able to provide multiple services simultaneously.

Vitalmex operates under a formula designed to increase surgery efficiency from 15 to 40 percent while keeping costs down The company’s model includes the provision of continuous technological upgrades, no inventory management costs, smaller administrative and operational processes, increased productivity, optimization of human and economic resources and budget management for equipment, surgical instruments and other supplies through a single supplier in the healthcare industry. Vitalmex’s presence in Mexico, the US, Chile and now Germany with the acquisition of Gimmi GmbH is specialized in offering personalized solutions that address healthcare challenges generating value for all players in the supply chain. “Integral services are transforming the way healthcare services are provided by making them more humane, efficient and profitable,” says Jaime Cervantes, CEO of Vitalmex.

| VIEW FROM THE TOP

NONPROFIT HOSPITAL FINDS BALANCE BETWEEN GROWTH, COMMUNITY SERVICE JUAN GALINDO Chief Medical Officer of Christus Muguerza

Q: How is Christus Muguerza increasing access to

We are also building centers for cancer treatment, of which

healthcare while balancing its budget?

we will build two within the next three years in regions that

A: Our vision is to provide care to those who need it

do not have clinics of this kind. Our growth strategy takes

most, so we are looking for strategies to ensure that while

a two-prong approach. The first is the construction of a

reinvesting all profits in the hospital’s infrastructure and

new hospital, but this strategy is highly time-consuming

into community service, as stated in our mission. In 2017,

and regulations in Mexico change significantly from state to

the health system spent over MX$100 million on community

state, making the construction process even slower. For that

services and during the first six months of 2018 we have

reason, we prefer a second approach that involves allying

already surpassed that amount. About 90 percent of our

with local partners that represent us in the local community

patients are covered by insurance and this helps us provide

and teach us how to operate with the locals.

services free of charge to those who need them. Q: How can hospital cancer centers innovate in the Q: What are the main capabilities of Christus Muguerza’s

treatment of patients?

new transplant center?

A: The design of these centers was inspired by some of

A: One of our most effective programs is for lung transplants

the most advanced cancer clinics in the world. In addition

and in the last ten months we performed three successful

to radiotherapy and chemotherapy, our goal is to provide

surgeries. The first lung transplant performed by one of

a comprehensive service that includes a psychologist, a

our hospitals in Monterrey occurred in 2017 and used

nutritionist and other support professionals. The centers will

extracorporeal membrane oxygenation (ECMO). There are

also provide patients with a concierge who will lead them

few centers in the world that can use this technology and

through every step of their treatment, from scheduling

we are the only one in Mexico.

appointments to treatments and clinical tests.

Q: What would you identify as the main barriers to

Q: How is Christus Muguerza developing and implementing

performing transplants in Mexico?

technology at its hospitals?

A: The bigger barrier is the lack of awareness and education

A: After two years of analysis, we will soon launch our

in our country, then the costs. Organ transplants are

electronic medical records across all operations within a

highly expensive. Beyond the transplant itself, patients

hospital. We are building a program specific to the Christus

will require expensive medications for the rest of their life

Muguerza network to avoid any errors. We are working with

to fight against organ rejection. These patients also need

Philips’ TASI software and within the next five years the

monitoring and comprehensive follow-ups.

software will be implemented at all hospitals belonging to Christus Muguerza.

Q: How is Christus Muguerza expanding its footprint in the country?

Q: How will electronic medical records be shared with

A: In the short-term, we will build our fifth hospital in

hospitals in different networks?

Monterrey. We are also developing a series of centers in

A: The information belongs to the patient. Our partner,

urban areas that will be dedicated to outpatient surgeries.

Christus Health, operates three electronic medical records within its hospitals. Having different systems allows the network to learn to bring together that information. Mexican

Hospital Christus Muguerza , launched in Monterrey in 1934,

hospitals are reluctant to share information, which greatly

operates nine hospitals in five Mexican cities. The hospital also

complicates patient care. To address this, in the second

manages 18 clinics across Monterrey, Saltillo, Chihuahua and

phase of this project we will create a platform for patients

Reynosa

that will give them access to their medical files.

VIEW FROM THE TOP |

VISIONARY LOOKS BEYOND EYE DISABILITIES JAVIER OKHUYSEN Director General of salauno

Q: How are vision disabilities impacting Mexicans and how

years of existence. Our motto is, “do well by doing good.”

is salauno addressing these issues?

For that reason, we implemented a program that provides

A: Vision problems are the second cause of disability in

free or subsidized surgeries per every certain number

Mexico. Approximately 2.5 million people suffer from

of paid surgeries. We are also working with Fundación

cataracts. salauno provides surgery for all types of vision

Cinépolis and several public institutions, including Seguro

problems, but cataracts represent 50 percent of our surgical

Popular in Hidalgo, Mexico City and State of Mexico and

volume. Cataract surgery is proven to have a positive effect

IMSS, ISSSTE and PEMEX.

on the patient’s quality of life. Q: How is salauno redefining healthcare and the business At salauno, we also provide surgeries for glaucoma, retina,

of providing care?

LASIK, eyelids and ophthalmic pediatrics. The company has

A: Two years ago, we decided that the solution to the

faced many hurdles; for instance, Peña Nieto’s government

lack of access was not only to build a large number

removed cataracts from the Seguro Popular’s Catastrophic

of clinics throughout Mexico but to take advantage of

Funds, which was a grave hit for us. However, we have

technological trends. We have created electronic clinical

received great support from our employees and investors,

files specifically for ophthalmology and based on a

which has allowed us to prevail. We are investigating

customer relationship-management platform that allowed

the possibility of expanding our model to other medical

us to greatly improve the way we attract patients through

specialties since about 70 percent of our practice could be

our digital platforms. We can now provide follow-ups

transferred to different types of surgery.

using cellphone messaging and email, allowing us to be in constant contact with patients. We are also developing

Q: What are the main access barriers to cataract surgery?

an app that incorporates both healthcare and financial

A: Geography is one of the main barriers. Our objective is to

services to the benefit of our patients.

bring eye surgeries to the population by establishing more clinics to overcome these geographical hurdles. Another

To become a technological company will be a continuous

issue is misinformation, as many people believe that these

process. We are exploring many areas, including using

surgeries are not safe. We strive to educate both patients

artificial intelligence in the interpretation of electronic

and general doctors regarding the benefits of surgery to

clinical files to help doctors with their decision-making

ensure that patients come to us before it is too late. The last

process.

barrier is economic. Often, low-income patients are unable to afford the surgery but at public hospitals they face long

Q: What must be done to boost health coverage in Mexico

wait times to receive attention.

and what role should public and private institutions play? A: Health reform is both urgent and necessary. IMSS, ISSSTE

Q: How has salauno expanded its operations? A: We have 240 employees at 11 clinics and a 4,000m

and Seguro Popular need to share services because while 2

some hospitals are full to capacity, others are empty. While

surgical center. Our goal is to provide surgery for 25

some institutions are already sharing services, there is still

to 30 percent of the annual eye surgeries by 2025. The

a lot of work to be done.

government is taking great strides in the eye-care area but the need remains enormous. The public healthcare sector represents 20 percent of our sales. While we would like this

salauno provides low-cost cataract surgery and eye-care

percentage to increase to 30 percent, our business model is

services to low-income Mexicans. The center also provides

perfectly sustainable without the participation of the public

other surgeries at a lower cost, including LASIK, glaucoma and

sector. salauno has grown at a healthy pace during its six

retinal surgery

| INSIGHT

THE HUB-AND-SPOKE HOSPITAL DESIGN GUSTAVO FERNÁNDEZ DE LOYOLA CEO of Grupo Torre Médica

Fragmentation increases the country’s endemic inequality;

injuries in the country and created standardized treatments

that is, people with higher incomes have much greater

to improve patient recovery. Now, we are promoting a

access to health, while the lower-income population can

program to train our doctors in orthopedic injuries, which

only use public institutions. The so-called hub-and-spoke

will result in a benefit for hospitals and patients.”

business model employed by companies like Grupo Torre Médica can help address that imbalance, says company’s

Another point of differentiation for Grupo Torre Médica’s

CEO Gustavo Fernández de Loyola.

business model is its commercial area. “The hub-and-spoke model relies on medical service payers like insurance

“We focus on providing medical care to the middle to

companies to bring in patients. We work with these

low-income segment of the Mexican population, which is

companies to reach commercial agreements that allow

the largest in the country. We have addressed this need

us to take patients to our clinics and hospitals,” Fernández

with our two hospitals and five clinics in Mexico City, but

de Loyola says.

we are planning to increase this offer to 10 hospitals and 20 clinics in and out of the city.”

The model also influences how doctors get paid, making it easier to provide a fixed salary or a variable income

To achieve its objectives, Grupo Torre Médica relies on

depending on performance. This motivates them to

the hub-and-spoke model, which allows the company to

focus on practicing quality medicine rather than seeking

provide an efficient and high-quality medical service at a

patients for the hospital, says Fernández de Loyola. Grupo

low cost through networks that allow broader coverage

Torre Médica has attracted around 120,000 patients a

with fewer human and economic resources. “Our hospitals

year as a result. The model has also inspired its doctors

and clinics are organized to provide a specific type of

to develop a medical specialty. “Our doctors are 60

service; at the clinics, we assist 98 percent of our clients

percent specialists and 40 percent non-specialists. We

with basic diagnosis; we treat more complex cases

have approximately 480 employees: 100 doctors and

at hospitals. This structure allows us to increase our

200 nurses. The remainder is made up of administrative

profitability without sacrificing the quality of our services,”

personnel,” he says.

says Fernández de Loyola. Also, the hub-and-spoke model is considered a solution for reducing geographic inequality

Using the hub-and-spoke model has also had positive

in access to medical care since it is designed to manage

effect on the company’s growth opportunities both inside

the high demand for services and redistribute it to deal

and outside Mexico City. “We have a longer reach to cities

with saturation.

like Queretaro, Pachuca, Toluca and Cuernavaca because we can efficiently manage our network of hospitals

The development of the hub-and-spoke model allowed

and clinics to provide wider coverage,” says Fernández

Grupo Torre Médica to update its services and technology

de Loyola.

to the equivalent of midlevel hospitals. Its investments in new technologies also help enhance the services offered

Cost-efficiency and improvements in quality processes

to this sector of the population. Along that line, it has

have also attracted partners like insurance companies,

integrated a digital platform that contains 100 percent of

which translates into an increase in patients and greater

its records. “This helps us get closer to medical institutions

growth. “In the coming years, we are expecting to grow

where we can obtain valuable information and create

our patient capacity 30 percent and to increase sales by

training for our health personnel and the health industry

40 percent as our infrastructure ensures us the possibility

in general,” he says. “In 2017, we gathered approximately

to introduce more volume without compromising the

8,000 digital records to analyze trends in orthopedic

patient’s security and care,” Fernández de Loyola says.

VIEW FROM THE TOP |

BUILDING A USEFUL SYSTEM JAIME CERVANTES CEO of Vitalmex

Q: Last year, Vitalmex was analyzing the possibility of

private and 93 percent is out-of-pocket. It will be wonderful

developing its own clinics and hospitals for chronic diseases

when patients arrive and can scan their fingerprint to gain

as part of a 10-year plan. How has this project evolved?

access. In that moment, an automatic payment will be

A: We conducted the necessary market research, through

initiated from the insurance company and each week they

which we evaluated different hypotheses, and we also

will pay a portion of the expense. They can also pay for six

carried out a geographical study across the country to

months through weekly payments.

pinpoint appropriate locations. In 2018, we will start the construction and operation of these clinics, which will be

Q: What are the company’s longer-term plans?

directed to a sector of the population that does not have

A: Vitalmex’s priority is to grow with the opening of new

access to services for non-transmittable diseases.

markets. We like working with the government because it is a very good partner. However, we are now diversifying,

The most interesting part of our model is that it will benefit

so we are exploring projects in the private sector. There are

both patients and the health sector. This infrastructure will

many services in which we can contribute; for example, the

help the government reduce its investment in this specialty

productivity in surgical rooms at private hospitals is very low.

and will promote joint private-public investment to care for

There are many opportunities to create synergies between

patients from the low-income population.

the public and private sectors to generate economies of scale, which require an element of articulation. Vitalmex

Q: What are the main challenges that arise when

could be that element. The Iztapalapa Hospital, the Leon

developing projects for this population niche?

Hospital or any of the existing PPAs were not planned

A: When people need expensive surgeries, they try to delay

correctly and they are under-used. There are almost 2,900

them to protect their expenses. People in segments D and E

private medical units in Mexico that are underutilized. Our

have an income of less than MX$31,000 per year, less than

goal is to improve private and public integration through

the minimum wage, so we must help them save money

scalable economies. We also want to become the link that

and introduce them into the banking system. This project

guarantees the same level of care regardless of a patient’s

requires that we educate patients and their families, since

status and background.

families will also participate in the recovery of the patient. Q: How can a future Health Reform adapt these models? Q: What can this model offer to the public service?

A: First, it should focus on making the acquisition law

A: We take ideas from different countries. For example,

more flexible, since this flexibility could open space for

the idea of family participation comes from India and the

new models, such as micro PPAs and mid and short-

idea of accessing the clinic with a fingerprint comes from

term projects that could address specific needs. Another

Chile. We want between 20 and 30 percent of the project’s

reform should focus on the certification process. Quality

capacity to be used by the government. We also can help

certifications should be strengthened for health service

the public sphere in specialty areas where the government

providers because there is an extensive black market and

lacks presence. Patients affiliated with social security are

it is affecting the economy. We also must include in the

not our market; we want to help those who do not have

reform sanctions for corruption in the sector.

access to any type of coverage. We want to formalize this population group through their experience in healthcare. Vitalmex is a Mexican company present in more than 67

Q: What type of financial schemes will you provide?

countries. It is a consultancy that helps clients improve their

A: The objective is to make sure money does not become

business model. The firm has three main lines of business:

a barrier. In Mexico, 50 percent of health expenditure is

imaging diagnostics, surgery and treatment of chronic diseases

VIEW FROM THE TOP |

IMPROVING PRIVATE ACCESS TO HEALTH THROUGH TECHNOLOGY ROBERTO BONILLA Director General of Hospital San Ángel Inn

Q: What joint strategies should the private and public

us to create the profile of our patient and to organize it in

sectors carry out to improve universal access to health

different clinical areas. If all hospitals, both public and private,

in Mexico?

replicated this same model we could talk about a mechanism

A: One of the main problems we have is that there is a

that addressed health from a macro perspective. The General

legal differentiation among the different sizes and types of

Health Law and the Data Protection Law will face a challenge

institutions that provide health, such as hospitals, clinics and

when approving the regulations for this future project but it is

sanatoriums. Mexico has a large number of registered hospitals,

also necessary to bring this option to the population.

but only about 50 of every 3,000 have a capacity of more than 100 beds, which creates a market dichotomy regarding

Technology can become a catalyst to improve Mexico’s

people’s access. The private sector should concentrate its

healthcare system. Mexico should have a technological

efforts on improving access by increasing insurance policies as

system that allows the tracking of clinical records, similar

well as influencing prevention. To make this happen, insurance

to the Tax Administration Service. Technology is not the

companies and hospitals must change their business model

problem, distribution is. The technology has not reached

to lower insurance premiums and increase at a faster rate

all sectors equally. Creating a universal electronic file could

the possibility of people having access to private healthcare.

exponentially change universal access to healthcare.

There must be an improvement in the synchrony of the three entities that deal with the patient, which are the hospital, the

The application of technology and the approval of a Health

doctor and the payer of the services.

Reform would improve the provision of medical services in Mexico. Implementing electronic files at all institutions

Q: How does Hospital San Ángel Inn face situations like

would be a good start.

the aging of the Mexican population? A: The culture of prevention will be a determining factor in

Q: What makes Hospital San Ángel Inn as attractive

Latin America. In 25 years, the region will have the most adults

as its bigger competitors and what are your growth

in the world, which in turn will drive the need to implement

expectations?

services that are not yet consolidated in the industry. Private

A: We recently opened a short-stay clinic with the goal of

hospitals are creating a prevention culture in Mexico, a key to

improving the cost-efficiency of our services. We believe

containing the growing demand for specialized services. It is

that the right distribution of cases between our hospitals

necessary that other players, such as insurance companies

and this clinic will allow us to provide the right services

and health institutions, participate in this change of mentality.

to the people who need them. This new clinic is projected

In the case of hospitals, the key factor is to reform their

to reduce the cost of surgical interventions by 40 to 50

commercial model and improve people’s access to private

percent, since the cost of a short stay clinic is much

medical care, so from the beginning there is a full notion of

lower than that of a hospital. This clinic model operates

self-care and prevention for the patient.

two shifts per day, closes at night and does not open on Mondays, so the operating cost is considerably reduced. It

Q: What have been the main advances regarding the

is also innovative in the facilities and amenities offered to

implementation of Big Data in Hospital San Ángel Inn’s

patients compared to other clinics in Mexico City.

activities, both medical and administrative? A: Hospital San Ángel Inn has a universal electronic file for medical information that operates within our hospital network.

Hospital San Ángel Inn is a chain of Mexican hospitals

Patient information is protected and available so that both

specialized in the treatment of obesity, diabetes and skin cancer.

the doctor and the patient can request it if needed. We use

Also, it provides services such as chemotherapy, radiographs,

the electronic health registration system HL7, which allows

magnetic resonance, blood count and microbiological cultures

| INSIGHT

MEXICAN LAB AIMS TO TRAIN FUTURE GENETICISTS ROBERTO GUEVARA Director General of Laboratorio Biogen

The mapping of human DNA opened the door to new

chromosome, while an extra chromosome 21 is associated

medical approaches and to a better understanding

with Down Syndrome. “A common problem we see is

of known diseases. Cytogenetic testing, the study of

gender assignation with newborns who show genital

chromosomes, has provided doctors new tools to identify

ambiguity as they might be XXY or X instead of XX or XY.

and fight diseases. While there is still much to be done,

We also perform prenatal tests to identify Down Syndrome

the field offers multiple benefits, says Roberto Guevara,

and other genetic conditions,” says Guevara, who adds

Director General of Laboratorio Biogen. “Genetics plays

that the laboratory mostly conducts these types of tests

an important role in every medical area, from immunology

because public healthcare institutions are unable to meet

to pediatrics.”

the demand for them.

Companies like Laboratorio Biogen, which has been

Guevara hastens to add that the role of chromosomes in

spearheading cytogenetics research since 1986, have a role

many diseases is still being studied. “There are specific

to play in providing affordable testing services while also

markers for leukemia in children and adults, but through

educating Mexico’s future geneticists to help the country

the use of fluorescent in-situ hybridization (FISH) we can

contribute to global research efforts, says Guevara. “We

detect their presence in specific individuals. Our efforts

have trained many doctors, chemists and biologists in the

have supported research groups collaborating with

area of genetics.” This is also beneficial for Laboratorio

Novartis for the generation of a series of medications

Biogen as former students know where to refer a patient,

targeting specific types of leukemia,” he says. FISH uses

Guevara adds. The lab will take part in the 18th actualization

fluorescently labeled probes that attach to specific parts of

course on human genomics taught by national experts

a chromosome, allowing researchers to identify particular

in the area, which will focus on quality control in the

DNA sequences using a microscope. This technique is used

teaching area of genetics, classical and molecular and

to diagnose several diseases including Down Syndrome,

cygenic biology.

cri-du-chat syndrome, Prader-Willi syndrome and some types of leukemia. “Our laboratory in Mexico City has all

Cytogenetics has come a long way in the last two decades

the necessary capabilities to take and measure samples.

and is now an important tool to study human diseases. This

We recently acquired a computerized microscope that is

research field allows geneticists to label the chromosomal

programmed with chromosome recognition software and

location of any gene, determine if specific regions of

image capturing for FISH. This was necessary as we are

chromosomes have been lost or gained and the subsequent

performing a growing number of studies.”

implications on specific diseases. There is still much work to be done, says Guevara, whose laboratory performs a

Laboratorio Biogen used to hold the lion’s share of the

broad series of clinical analyses, including paternity tests,

market, but a growing number of laboratories are entering

amniocentesis, bone marrow, karyotypes triple marker,

and growing thanks to agreements with public hospitals.

mass sequencing and micro-ranges. “Cancer is one of the

As competition heats up, the laboratory’s goal is to offer

largest research challenges in the world and Laboratorio

accessible services to low-income individuals, says Guevara,

Biogen is part of those research efforts.”

while remaining at the forefront of technology. “We are among the few laboratories in Mexico with capabilities for

This branch of medicine allows scientists to map genes

hybridization in-situ tests. Laboratorio Biogen performed

to specific chromosomes or regions. Humans generally

the first study of micro-arrangements in Mexico alongside

have 23 chromosomal pairs and their deviations can be

the National Institute of Genomic Medicine and our

directly related to several diseases; for instance, Turner

objective is to continue bringing new technology to the

Syndrome occurs when an individual is missing an X

country, such as other molecular techniques.”

VIEW FROM THE TOP |

ACCESSIBLE, EFFECTIVE AND DIGNIFIED RENAL CARE ANDRÉS GUTIÉRREZ CEO of Médica Santa Carmen

Q: How is Médica Santa Carmen redefining the renal health

multi-disciplinary and standardized care. We focus on

business?

kidney disease therapies, opportune diagnosis and at-risk

A: At Médica Santa Carmen, we focus on what is needed

and mass prevention efforts as our broad scope to reduce

and imagine what could be possible for renal patients to

the prevalence of the disease. Mexico has less than 1,500

live a healthy, happy and productive life. What is needed

nephrologists in a highly fragmented care environment

today is accessible, effective and dignified care. Mexico

among dialysis clinics, public hospitals and private practices.

needs more clinics to boost access with cheaper and easier payment methods, including the possibility for

Q: What has Médica Santa Carmen identified as the main

universal care. It is also essential to have better clinical

needs for encouraging renal health?

results, evidence-based medicine, hygienic practices and

A: We believe that awareness and clear care “action

the implementation of international safety standards to

paths” are essential to achieve a measurable impact in

improve kidney health. We consider that a patient-centric

reducing CKD prevalence. Most people are unaware about

long-term view is key to redefining renal-patient care.

chronic kidney disease as it is generally asymptomatic.

We need to stop defining the condition when a person’s

The goal of Médica Santa Carmen’s ‘Check Your Kidney’

kidneys stop functioning as insufficiency or end stage.

(#RevisaTuRiñón) campaign is to raise consciousness and

While stage 5 chronic kidney disease (CKD) is currently

emphasize prevention through basic screening tests.

irreversible, patients can live a long, high-quality life with available therapies like dialysis. We are not far from having

Q: What are the main concerns faced by renal patients?

stem-cell, genetic and other bio-tech based solutions that

A: Patient experience is something that is a real concern,

closer mimic the original kidney function.

especially for patients living with CKD Stage 5. We try to be very aware of the physical, social, economic and other

Q: Why did Médica Santa Carmen decide to focus on

hardships which patients face. We’ve designed our systems,

renal health?

processes, and organization around making the patient

A: We started out by observing the large gap between

journey more pleasant. Coordinated care among specialists

the growth in kidney disease cases and the quantity

such as dieticians, psychologists, laboratories and other

and quality of clinics available. Diabetes, hypertension

providers is key to improving the length and quality of life.

and other public health concerns contribute to the high incidence of the disease in Mexico. The counry has over

Q: What are your main objectives for 2018 and what role

10 million people with some form of kidney damage, of

will certifications play in them?

which between 200,000 and 300,000 have stage 5 CKD

A: We are growing at a very fast pace and need to ensure

requiring dialysis or transplant. It is also estimated that one

the best patient care while scaling from seven clinics, a

in every two Mexicans does not have access to therapy and

vascular surgery center and a laboratory to 35 clinics by

a third of the facilities that can provide treatment do not

2022 and 200 clinics by the end of the decade. We are as

comply with the Ministry of Health regulations. Dialysis is

good as our last patient encounter. Certifications from the

expensive, unsustainable for most individuals and yet there

Ministry of Health, ISO9001 and the Global Impact Investing

are few alternatives. We see an opportunity to change

Rating System communicate our commitment.

renal care in Mexico. Q: What differentiates Médica Santa Carmen from other

Médica Santa Carmen is a network of ambulatory clinics and

providers of renal care services?

kidney centers in Mexico. Santa Carmen offers individualized

A: Médica Santa Carmen is distinguished by its

services related to nephrology, hemodialysis, peritoneal dialysis,

specialization in renal health and by offering individualized,

nutrition, vascular accesses, psychology, diabetes and transplants

| PROJECT SPOTLIGHT

MEXICAN SUBSIDIARY OF EUROPEAN GROUP PROVIDES PATIENT COMFORT Anyone caring for an elderly patient at home understands the challenge of adapting to the mobility, nutritional and medical needs that must be met. Medical bedsmanufacturer wissner-bosserhoff (Wi-bo) and Linet Group SE are addressing this niche with electrically adjustable beds that maximize the user’s comfort. Allowing the user or caretaker to adjust the bed’s height provides a number of benefits. Patients can breathe better, have breakfast in bed or chat comfortably with visitors or caretakers. The beds also provide support for the knees which, together with the height adjustments, allow for better weight distribution to prevent ulcers. The bed’s height can also be adjusted to make it safer and easier for the patient to get in and out. Wi-bo’s beds are also equipped with a firm mattress that supports and distributes weight to prevent skin lesions. They also employ a waterproof cover to facilitate sponge baths and cleaning. The beds are equipped with wheels to improve mobility and brakes for increased safety once parked. Furthermore, the incorporation of adaptable bed railings grants both comfort and safety. These railings also provide support for the patient when walking alongside the bed. The bed railings can also be adjusted according to user’s height when seated and can be adjusted for four different heights. With dimensions of 208cm long per 106cm wide, these beds can safely hold up 270kg. The bed is also designed to be easy to extend horizontally when necessary. Its surface is easy to clean and comes equipped with both horizontal and vertical corner bumper, to prevent accidents. Wi-bo beds can also be equipped with a night light function to help the user find their way in the darkness that can be switched on and off with a handset. This handset also allows the user or caretaker to choose between three safety levels: nursing, resident and locking mode. Linet Group also manufactures and distributes a large number of beds, tables, mattresses, chairs and furnishing concepts for hospital and home care, all with the patient’s comfort in mind. The company specializes in the design of beds that facilitate care by reducing the physical demands on caretakers and improving their efficiency. wissner-bosserhoff is a German company that specializes in the manufacture of beds and transport chairs.

| VIEW FROM THE TOP

ONE OF A KIND HOSPITAL TARGETS OVERLOOKED NICHE PATRICIO GONZÁLEZ Director General of Hospitaria

Q: How is the Hospitaria business model different from

A: Our long-term goal is to have 10 hospitals across

other hospitals in Monterrey?

the country, while in the short term we will focus on

A: There is an overlooked niche for mid-priced hospitals

consolidating this hospital. We are working on two business

in Monterrey. Most hospitals in the city either focus on the

areas with insurers: major medical expenses and emergency

high-income population or are public hospitals that target

care. At this point, we are working with insurers to help

the low-income segment. There are almost no hospitals that

them develop the market for car and school insurance.

specifically target the middle class. Q: How is Hospitaria attracting new patients? Our prices are highly competitive in comparison to other

A: We see between 5,000 and 6,000 patients per month

hospitals in Monterrey. Hospitaria is profitable, although

and most of these are referred to us by other doctors.

its operating market is smaller than that of other private

Especially in the case of surgeries, doctors choose to send

hospitals. The government should support smaller hospitals

patients to a hospital according to the margin of benefit

since their existence helps improve the quality of life of this

that they can obtain once they subtract the hospital’s costs.

population segment.

In these cases, the quality of the hospital is a secondary consideration. For that reason, it is necessary to enforce

Q: How is the hospital ensuring the quality of its services?

regulations regarding hospital certifications.

A: We are a primary and secondary care hospital focused on general medicine. The hospital is certified by the General

Q: What are the main challenges in implementing

Health Council, which is a comprehensive certification that

electronic clinical files?

reviews national and international standards. While we did

A: The electronic clinical file is necessary and would be

analyze acquiring the Joint Commission International (JCI)

beneficial for both doctors and patients, although there

certification, the General Health Council certification is even

is some reluctance to implement it. The collection of

stricter regarding procedures and patient safety. We are

information for the electronic clinical file often takes a

analyzing the incorporation of the ISO certification, which

long time and doctors, who already feel pressured, are

we hope to have by 2019. The hospital is also investing

often unwilling to take the additional time to fill them out.

in our imaging area by updating our six-slice computed

In most cases, the doctors are not hospital employees

tomography (CT) scanner to a 128-slice CT scanner and our

and they only rent a space in the facility so it is difficult

0.3T nuclear magnetic resonance (NMR) machine to a 1.5T

to convince them to fill out these documents. Moreover,

NMR. This equipment will give us unmatched capabilities

because of Mexican regulations, doctors still must print

in the area in terms of imaging. Radiocare is our strategic

the file to sign it, which makes electronic clinical files

partner and is helping to implement these changes. Our

essentially pointless.

medical center handles a high number of emergencies, with about 120 rooms and 250 doctors.

Q: How is the hospital adapting to Mexico’s epidemiological profile?

Q: What are the hospital’s expansion plans and what

A: We are planning to continue growing our number of

alliances are necessary to achieve them?

beds. We now have 50 and we plan to have 20 more within the next two years. Escobedo, where the hospital is located, is full of young people so it needs strong obstetrics

Hospitaria , launched in 2013, is the first complete medical

and pediatrics capabilities but within the next 10 years

center located in the north of Monterrey. It has 50 beds, five

the region will need to deal with more highly complex

surgical theaters and two intensive care units. The hospital has

diseases. For that reason, we are planning to develop a

been certified by the General Health Council

hemodynamics unit within the next two years.

VIEW FROM THE TOP |

CLEAN PRACTICES FOR A BRIGHT FUTURE JOSÉ LUIS JACQUES Director General of Lavartex

Q: Why is Lavartex the best option for renting and washing

offer laundry services, which is why we are one of the few

specialized textiles for the health industry?

companies that offer a validated world-class service. This

A: We are a company with more than 96 years of experience

also provides added value to our customers.

delivering a solution of rented and laundered textiles in three commercial divisions (hospitality, healthcare and

Q: Why is Lavartex the best partner for those hospitals and

uniforms for industries). Our added value is our accumulated

institutions that endorse the best practices in the industry?

expertise, in addition to our nationwide coverage, 10

A: Hiring Lavartex’s solutions can lead a health institution’s

industrial laundry plants, eight distribution centers and

own promise laundry (OPL) to move from being a cost

a cutting and sewing facility. We like to invest in quality

center to an income center, since the resources allocated to

and in creating a world-class service for our customers,

the cleaning and control of textiles can be assigned to other

to whom we provide a solution that minimizes operating

relevant areas of investment. Lavartex meets the needs of

costs and maximizes several qualitative values such as

different hospitals, which makes us the best partner to save

hygienically clean products, sterilized textiles, security of

time and maximize hospital performance.

continued furnishing and clean green services. Also, we are a member of the Textile Rental Services Association of

Q: How important is technology to the services

America (TRSA).

Lavartex offers? A: We use state-of-the-art technology to guarantee the

Q: How does the Lavartex Quiropaq brand adhere to the

quality of our hygienically clean solutions, which are

quality and hygiene demands of the industry?

also environmentally friendly. We are considered a green

A: Our product-service Lavartex Quiropaq satisfies the

company because all our laundry systems are carried

cleaning needs of large, small, public or private health

out according to a strict water-saving protocol. While a

institutions. It provides sterilized textiles for the operating

conventional washing machine uses between 35 and 45

rooms. Our services are the best, regardless of the size

liters per kilogram of laundry, Lavartex uses only 6 liters

or type of client because our commitment is the same

per kilogram.

for everyone. All our product-services are backed by sustainable practices, with low water consumption and

Q: What are the company’s three main goals for 2018?

high-end cleaning technology.

A: We will continue to expand nationally because we still have opportunities for growth in all the divisions in which

Q: What is the proportion of clients that Lavartex has with

we participate. Also, Lavartex plays a key role as a leader in

private and public health institutions?

shaping the regulation of the laundry industry. The company

A: Our demand is measured by the nature of the Mexican

expects to continue implementing the concepts of hygienic

health system where approximately 65 percent of services

cleaning and sterilization in Mexico because there is still a

are concentrated in the public sector and 35 percent in

large gap in these services. If all the companies in the sector

the private sector. Lavartex works with both the public

move toward complying with the regulations of the most

and private healthcare sectors according to rigorous

developed countries, we believe that Mexico could meet

standards and procedures that are backed by international

the OECD and WHO standards.

certifications. We are certified in Hygienically Clean (TRSA), ISO 9001, ISO 14000 and quality environment (PROFEPA); we are also a Socially Responsible Company (ESR). Through

Lavartex is a Mexican company founded in 1922 that specializes

these certifications, we assure our customers that a third

in the rental and washing of textiles for hospitals, hotels,

party validates our quality and service. In Mexico, there is

restaurants, sports clubs and manufacturing companies. It has

a very basic regulation of inspection of companies that

a nationwide presence in Mexico and 11 world-class certifications

| VIEW FROM THE TOP

BUILD BUSINESS OPPORTUNITIES TO BUILD BETTER ACCESS TO HEALTH MIGUEL VELÁZQUEZ CEO of Grupo Empresarial MDF

Q: What are the main lessons learned by Grupo Empresarial

and showed that the hospital would benefit more from the

MDF after 14 years of working in the health industry?

construction of the towers than our client. For the same

A: The regulations and regulatory frameworks for the

investment, MDF presented a proposal based on the current

construction of hospitals in Mexico have changed over

trend of building smaller hospitals or clinics close to bigger

time and COFEPRIS has been key to achieving a better

hospitals to transform those four towers into a hospital that

framework for medical infrastructure. Before, it was very

would deliver areas of care not covered the other hospital.

easy to obtain health licenses and build hospitals regardless

While the original project expected a return on investment

of regulations. Also, it was thought that any architect

of 14 years, the hospital designed by Grupo Empresarial

could build a hospital because there was no emphasis on

MDF offered a return on investment of six years.

the conditions that are now necessary to build a health institution. This evolution has benefited Grupo Empresarial

Q: According to the OECD, promoting the construction of

MDF, which absolutely adheres to official health regulations;

hospitals in Mexico could bolster access to health. What

the company does not build a project that is not accepted

is Grupo Empresarial MDF’s view?

by the authority itself.

A: Health in Mexico is poor because the private and public health systems together cannot cover more than 60 percent

Q: What details have you have mastered when planning

of demand. Today, health has become a business and the

and building specialized facilities?

market has evolved with greater specialization. Before,

A: In comparison to other companies, MDF focuses not only

ophthalmic surgery required a patient see a specialist who

on planning and building hospitals of greater quality, but

later recommended a hospital to carry out the surgery. Now,

also follows up this process with proper documentation.

most of these surgeries are done in ophthalmic clinics.

Quality in construction is not only found in the physical parts of a project but also in the documents that explain in

Clinics are filling the gaps left by large hospitals and offering

detail how the building was built. MDF always tells its clients

greater specialization at more competitive prices. This

there is a difference between spending and investing. While

dynamic is bringing health services closer to the population,

an expense has no return of benefits, an investment always

but also encouraging service providers to focus more on

does. MDF offers its clients an investment opportunity.

patient care. Clinics and other similar institutions have been able to modify healthcare in Mexico with greater speed

Q: How do your consultancy services benefit the hospitals

and at lower prices than traditional options. In the end, the

and clinics you collaborate with?

combination of both hospitals and clinics creates a much

A: Grupo Empresarial MDF’s business model goes beyond

wider coverage that generates greater access and quality.

building and planning construction projects for the health sector. The company provides counseling services based

Q: Who are MDF’s main clients and what is the ideal public-

on marketing and business studies to maximize its clients’

private mix?

business opportunities. For example, MDF worked with a

A: Our clients are mostly in the private sector because,

client that wanted to build four towers of rental medical

unfortunately, we have not been able to collaborate with

offices in front of a hospital. MDF evaluated the project

the government. Government projects are conditioned to the payment of a quota to obtain the construction tender. Grupo Empresarial MDF wants to build not only business

Grupo Empresarial MDF is a design, construction and hospital

opportunities but also better opportunities to provide

equipment company with 15 years of experience in Mexico. It also

greater access to health in Mexico. If someone from the

provides consulting services, planning, feasibility studies and

government arrives with a clear and honest project that

advice on regulations for the construction of health infrastructure

considers the health of Mexicans, we will accept it.

VIEW FROM THE TOP |

NEW ENGAGEMENT MODELS FOR BUSINESSES WITH GREATER VALUE MANUEL SÁNCHEZ Director General of Diphsa

Q: How does Diphsa’s comprehensive business model

Q: Technology has become a differentiating factor for

integration bring added value not only to customers but

business. What role does technology play in the products

to suppliers and partners?

and services Diphsa offers?

A: The vision of the company was redesigned with a

A: Diphsa is collaborating with labs to boost digital

more human purpose. Diphsa believes that the future

participation. Our recent change is opening the

commitment with collaborators, partners and the entire

possibility of exploring unexploited opportunities through

ecosystem should be oriented toward patients. New

technological platforms to offer better services. Also,

participation models must address the patient’s health

we are starting to develop an algorithm to analyze our

problems.

database and carry out analytics and make more precise recommendations to our customers. Our first step is to

At Diphsa, we are achieving this through a change in our

collect data more efficiently to structure it better and

business model to develop valuable relationships with our

generate data analytics that better support our services.

customers and partners. We are part of the transition to these new businesses models based on an environment

We begin all our professional relationships with empathy

of high competitiveness, globalization and dynamism.

as this approach helps us to better understand the

For companies like Diphsa it is necessary to start by

conditions, challenges and needs of our customers and

knowing how to make a company generate value despite

partners to create personalized and focused solutions. At

generational gaps.

Diphsa, we are committed not just to selling our services but to solving the problems the client faces. The company

We have learned that a multidisciplinary approach is

is digitalizing its front office to improve diagnosis and

necessary in the field of health to be able to face the

sales services to hospitals through a mobile app that will

challenges involved in medical, administrative, and

be launched in 4Q18. We are moving our salesforce from

financial decision-making processes. Also, this scope

a face-to-face model to a digital model to improve the

in health institutions helps to reinvent business models

quality of our services.

and offer a continuous added value for the patient. We are investing in key areas such as internal technology

Q: How is the use of oxygen in the health industry

management and staff training. We believe that having

evolving?

a human capital with high development of leadership

A: The oxygen industry is in transition toward a new vision

skills and emotional intelligence is necessary to create

of the self-generation model but if the health industry

an environment that generates greater value.

wants to achieve this successfully it will be necessary to offer better financing opportunities for hospitals.

Q: Why is Diphsa the best ally for Mexican hospitals that

More customized financial solutions can increase the

seek to contract hygiene engineering services?

profitability of the institutions and ultimately boost

A: Our philosophy of empathy and our new business

economic performance of the sector. Mexico’s problem

model allow us to find solutions to the problems that

is not in the infrastructure of the hospitals, but in the lack

hospitals have. We do not have standardized solutions

of an adequate business model.

because we offer personalized and specialized services for each of our clients. Diphsa focuses on long-term relationships with its customers, so hospitals can

Diphsa is a Mexican hygiene engineering company with 25 years

consider us reliable partners because we conduct our

in the market and focused on providing solutions for infection

relationships beyond commercial matters; we care about

prevention. It creates integral solutions for sterilization, hygiene

our customers.

and medical oxygen solutions

| VIEW FROM THE TOP

PUBLIC-PRIVATE ASSOCIATIONS KEY FOR GROWTH, ACCESS TO CARE MIGUEL CASTILLO Director General of Hospital Sedna

Q: How is Hospital Sedna broadening its coverage to

A: Hospital Sedna began operations fully focused on

provide health services to a greater proportion of the

gynecology but transitioned to integral health services

general population?

over its first two years. Changing the hospital’s core from

A: Hospital Sedna has 36 beds, but we want to incorporate

gynecology to integral health services was a challenge.

22 more. We would like to offer our high-quality services to more people. We would also want to allocate then mostly

Q: How is Hospital Sedna increasing its market share and

to the subrogated services of the Seguro Popular. Hospital

attracting more patients and what is the profile of the

Sedna is an integral hospital that has various specialties

hospital’s patients?

and subspecialties, many of them focused on chronic

A: At Hospital Sedna we are fully committed to our patients’

degenerative diseases, which are now the most common in

well-being, which is our main priority. We are also investing

Mexico. Our short-term plan is to emphasize kidney health.

in the well-being of our doctors. It is highly important that

We are also getting certification to perform transplants.

doctors feel that they are being fully supported by the

There is no other private hospital that has an approach to

hospital, since they are the main contact with patients.

this problem.

Between 70 and 80 percent of the patients at private hospitals pay through private insurance. 52 percent of our

Q: What role do public-private alliances play in increasing

patients have insurance, 12 to 15 percent come from Seguro

access to care and how do these alliances benefit private

Popular and the rest pay out of their own pocket.

hospitals? A: Public-private alliances allow the healthcare sector to

Q: Many hospitals are investing in the Joint Commission

increase its reach, with the patient as the main beneficiary,

International (JCI) accreditation. How does this

since it can ensure better care and at a much faster pace.

certification fit into Hospital Sedna’s long-term plans?

Seguro Popular started with 5 million people. Now, it has

A: On Dec. 6, 2017, we received the certification for three

over 50 million and the need for health services will only

years from the Mexican General Health Council. This

continue growing. Our population’s demand for health care

certification is based on JCI’s principles, so we are on the

is growing fast, if the sector does not grow in turn, many

way to obtain this latter certification for which we will apply

will be left without care. Globally, Mexico has been one

in 2019. Having this accreditation will allow us to increase

of the countries taking appropriate measures to improve

our capacities for medical tourism. Hospital Sedna already

healthcare, but there are areas still to be addressed.

has capabilities for medical tourism, mainly in bariatric

Working with Seguro Popular can be beneficial because

surgery. Due to the high rates of obesity, we have turned

it allows people who would otherwise not have access to

to see Bariatrics as one of the main areas of focus, but

healthcare to get the quality treatment they need. I would

we plan to continue offering integral services. Mexico has

recommend other hospitals to be open to it.

significant room for growth in medical tourism. Since 2013, this sector has grown around 7 percent annually.

Q: Why did Hospital Sedna transition from being a hospital specialized in gynecology to incorporating more

Q: How do you see the future market for healthcare

specialties?

services in Mexico? A: 20 percent of the population will be over 60 years old by 2050, so the demand for healthcare services will only

Hospital Sedna is a Mexican hospital with over 10 years of

increase as the country’s population ages. The private

experience. The hospital began its operations working in

health sector will continue growing in turn but not at the

women’s health but it has now expanded to over 30 specialties,

necessary rate to address the needs of this population. There

such as endoscopic surgery and neonatology

is significant room for growth for private health services.

VIEW FROM THE TOP |

PPPs CAN HELP RESOLVE SYSTEM FRAGMENTATION HURDLE MASSIMO PACHÓN Director General of Clinitas (Keralty)

Q: Why did Keralty decide to come to Mexico?

A: We believe that the best way to reach the private sector is

A: All the work we are doing in Mexico is leveraged by

through insurance companies. Within the insurance sector,

our know-how and experience. It is not the first time that

some companies have clearly defined the problem and

the group has shown interest in Mexico. We had already

the diagnosis, and we can work with them to provide the

expressed interest in the country in the 1990s and again in

solution. That is why we are acquiring an ISES and working

2014. We are convinced there is a need in Mexico for the

in partnerships with an important insurer in Mexico, because

provision of health services that truly address the basic

we believe that through it we can place preventive health

health problems of the population.

products and create real prevention plans for the sector.

Q: How does Clinitas’ experience in other countries help it

Q: How will Keralty manage the common situation

to capitalize on the opportunities in Mexico?

in Mexico where patients constantly change their

A: The main challenge we have seen in Mexico is the health

insurance company?

system’s fragmentation: IMSS is for formal workers and

A: We believe that we need to construct our brand but

Seguro Popular is for those who are not formally linked to

this will take time. We know that when people try a model

a job. The job market in Mexico is of a rotational nature, with

and you provide the expected health services, people will

people moving between formal and informal employment,

return. In Mexico, the Major Medical Expenses policy usually

which means that people also move between the different

does not cover the first level of care, general consultation

health systems.

and basic specialties; people have few options in the private health market and go directly to specialists, or to

In Mexico, our intention was to establish public-private

the pharmacy offices for minor ailments, whose volume of

work schemes in the health sector. However, we have

attentions already equals that of the IMSS. We know that if

found that while in Colombia the legislation promotes

our model is successful, others will follow it. We hope that

this initiative, in Mexico the legislation focuses on

one day the country will have a wider market of medical

the opposite. There are no mechanisms for directing

networks, policies and solutions for the first level of care.

government resources to take advantage of specific private-sector services. The only approach we have seen

Q: How can Keralty’s business model help bring health and

for cooperation with the private sector is through Public-

insurance services closer to the population?

Private Partnerships (PPPs).

A: Our main contribution can be to introduce real health solutions, both preventive and curative, in this first level of

Q: In what niche of the Mexican healthcare industry does

attention, guaranteeing quality services. We also need to

Clinitas expect to make a difference?

be timely in how we solve people’s health needs, to think

A: When we started two years ago, the idea was to work

about patients, their families and their surroundings. We

with services such as IMSS, ISSSTE and Seguro Popular.

need to show that the privatization of health services is not

However, due to the legislative landscape, we are focusing

bad. Mexico has a market for everyone and private players

on the private sector. All our efforts are directed toward the

in the health sector are called to cover certain areas that

first level of care, which is what we call primary attention

the government cannot always guarantee.

or clinical level. We are convinced that the best solution for health services is at the first level of service and prevention. Keralty , formerly Organización Sanitas Internacional, operates

Q: Keralty’s business model has grown through different

in the US, Mexico, Colombia, Venezuela, Peru, Brazil, Spain

alliances. Do you plan to establish this same model in

and the Philippines. It plans to expand to Russia, Vietnam and

Mexico working with insurance companies?

Indonesia. Keralty operates in Mexico under the name Clinitas

Hospital Christus Muguerza, Monterrey, Nuevo Leon

INSURANCE

Of all the OECD countries, Mexico has the highest out-of-pocket expenses for healthcare, which represent, on average, 41 percent of an individualâ&#x20AC;&#x2122;s income. Patients are often unprepared to address medical emergencies and one of

the main reasons for this is the low penetration of healthcare insurance in the country, caused in part by the Mexican populationâ&#x20AC;&#x2122;s distrust of insurers. However, these companies are increasing their efforts to create awareness among the general public of the significant benefits health insurance can offer. They are also developing strategies to deepen insurance penetration across the country, including data analytics that allow them to better target the sector and the creation of smaller, more specialized and less expensive products that are more attractive to Mexicans.

Through interviews with leaders from the insurance industry, this chapter addresses the main areas that must be tackled to increase insurance penetration in the country and the strategies and products that are necessary to convince Mexicans to invest in prevention.

CHAPTER 4: INSURANCE 92

ANALYSIS: Better Insurance Culture for Greater Insurance Coverage

INFOGRAPHIC: Poor Penetration, Rich Opportunities

VIEW FROM THE TOP: Raúl Beyruti, GINgroup

VIEW FROM THE TOP: Francisco Llamosas, Grupo Valore

100

VIEW FROM THE TOP: Luk Vanderstede, Bupa Global Latin America

101

VIEW FROM THE TOP: Fernando De Obeso, Salud Fácil

102

VIEW FROM THE TOP: Luis Francisco Galván, SCOR Global Life SE

103

VIEW FROM THE TOP: Omar Viveros, Willis Towers Watson

Eduardo Hori, Willis Towers Watson

104

VIEW FROM THE TOP: Leonardo Alves, Plan Wealth MGMT

105

INSIGHT: Javier Guadarrama, Grupo Promass

106

VIEW FROM THE TOP: Alejandro Sancen, MASZ

107

INSIGHT: Miguel Prida, Consulmed

| ANALYSIS

BETTER INSURANCE CULTURE FOR GREATER INSURANCE COVERAGE A 2018 OECD analysis on the global insurance market showed that gross premiums of domestic insurers in Mexico rose approximately 8 percent in the nonlife segment only. Insurance penetration remains low, impacting health coverage for much of the population. This all suggests there is much room for growth

The private insurance sector in Mexico faces challenges

also require joint action between the government and the

both in relation to financial sustainability and in relation

private sector to improve the availability and accessibility

to the business model itself. The country is also going

of the product portfolio.

through an epidemiological transition and the gradual aging of its population, which amounts to another hurdle.

Culture is another factor that is holding back penetration.

According to AMIS, 97.4 percent of health coverage is

“It is necessary to strengthen prevention measures

destined to major medical expenses and the rest to health

through the introduction of small and large cultural

insurance; moreover, in the last seven years, the country

changes and this can also be done through government

has experienced more accidents and an increase in the

initiatives,” says Omar Viveros, Director of Health Benefits

average cost per accident that affects the financial health

at Willis Towers Watson.

of insurance companies. The total private insurance market in Mexico represents around 2.1 percent of the country’s

A BETTER INSURANCE CULTURE

GDP. The potential, say key industry players, is vast.

When it comes to insurance culture, among the main problems Mexico faces is its poor level of education.

“Mexico’s private healthcare market remains small in

“Mexico is still creating an insurance culture, but the need

terms of insurance coverage. The country has 120 million

already exists. The penetration of insurance practices in

inhabitants but there are only 10 million people covered by

the Mexican population is increasing but it varies from

health policies. Private health insurance remains expensive

state to state. While insurance is prevalent in major hubs

for many, so the sector is looking for alternatives to reach

such as Mexico City, other cities have lagged behind,”

a larger segment of the population through the generation

says Llamosas.

of more accessible products,” says Luis Francisco Galván, Vice President and Head of Pricing Latin America at SCOR.

Without doubt, the insurance sector and the government need to work together to bolster annual growth in

According to AMIS, between 2000 and 2017 the value

premiums and coverage. Mexico has a fragmented health

of private sector insurance grew by approximately 63

management and most of the services are concentrated

percent, while coverage remained at 34 percent. In this

in big cities, so private and public services must integrate

context, some recommendations have emerged, with

to better address the existing demand for health services,

solutions such as the improvement of existing insurance

says Alejandro Sancen, Director General of MASZ. “In

products or the introduction of new products that are

relation to insurance contracting, the public and private

more attractive to users. “One alternative are indemnity

sectors have made a great effort to raise awareness and

products, which pay monetary amounts to the insured

promote the culture of investment in prevention. Insurance

or beneficiary in case of a serious health condition or

is considered an investment and not an expense,” adds

hospitalization,” says Galván. “The sector could also

Luk Vanderstede, Director General Mexico of Bupa Global

introduce products aimed at older people, such as

Latin America.

long-term care policies that cover costs related to the services for a population not able to perform activities

Mexico is changing, which is why the insurance sector

for daily living.”

must also evolve to ensure its sustainability and access to services by users. “AMIS, insurers and government

Some in the industry, such as Francisco Llamosas,

authorities have significant interest in promoting insurance

president of Grupo Valore, say that government action

as it is a key strategy to protect and preserve capital.

could help improve penetration rates by making insurance

Insurance is essential for the economic health of families

mandatory by law because most people do not recognize

and companies, both large and small. Larger companies

the usefulness of having insurance until an accident

are fully aware of the importance of insuring their assets,

occurs. However, the general challenge is to offer flexible

medium-sized companies are aware, but not all small

products. These products, according to the OECD, would

companies are conscious of this need,” explains Llamosas.

Dräger Savina 300 for intensive therapy

FILLING IN THE GAPS

other countries in Latin America, Mexico is ahead of the

With Mexico’s epidemiological transition and the aging of

curve in insurance penetration.”

its population, the insurance sector has an opportunity to fill the gaps that the public sector cannot. “Thirty years

The challenges and opportunities for new entrants in the

from now, Mexico will have a much older population

insurance market, according to Willis Towers Watson, are

and the government will be unable to afford to look

in the gaps where current players lack the capacity or

after everyone,” says Leonardo Alves, CEO of Plan

expertise to meet emerging need or niches. During 2018,

Wealth MGMT. “Mexico represents one of the greatest

as estimated by Thomson Reuters, the insurance industry

opportunities globally as the country is one of the

will continue to grow between 10 and 12 percent, but as

leaders for opportunity investments in the healthcare

the market is controlled by dominant insurance brokers,

sector. Mexico’s economy is doing well, its middle class

the nontraditional channels and niches will become more

is growing and its population is becoming aware of the

accessible to those new entrants or companies that want

importance of insuring themselves. In comparison to

to explore other opportunities.

RISK FACTORS IN MEXICO • Consumption of excess saturated fats (school population)

• Consumption of illicit drugs (men)

• Daily consumption of sugary drinks

• Illiteracy

• Drinking five or more alcohol drinks per occasion

• Housing without proper drinking water

• Time in front of screens (> 28 hours per week)

• Ground floor

• Tobacco consumption: 11.4 monthly packages per capita

• Consumption of illicit drugs (women)

• Lack of physical activity

• Rural areas lack electric power

Source: Instituto Nacional de Salud Pública and British American Tobacco

| INFOGRAPHIC

POOR PENETRATION, RICH OPPORTUNITIES Many factors such as a poor prevention culture, low salaries

potential users to attract. New technologies, products and

and the high cost of insurance have combined to place

a better use of data are the trending strategies that could

Mexico among the countries with the lowest insurance

revolutionize the sector. The generation of smaller products

penetration in the OECD. This low penetration rate is

that cover specific diseases is becoming a tool to increase

also a large area of opportunity with a vast number of

insurance penetration.

DIFFERENT TYPES OF HEALTH INSURANCE OFFERED IN MEXICO Personal Accident Insurance: guarantees

Health Insurance: focuses on prevention

payment of a determinate amount if the

and maintaining the health of the

insured dies, loses a part of the body

insured, usually covering smaller medical

or becomes partially or completely

expenses than a major medical expenses

disabled due to an accident.

insurance.

Major Medical Expenses: covers medical

Specialized Products: guarantee a

expenses due to disease or accident

determined payment if the insured were

after the amount surpasses the

to contract a specific disease, examples

deductible.

include diabetes or cancer.

Trend Chronic disease crisis Move to outcomes and value

M-health

Big Data Revolution Customer Centricity in Insurance Underwriting Pressures

Description

Opportunity

Payers, employers and governments are not sufficiently incentivized to change long-term behavior

Offering products or services that align with incentives for long-term behavioral change

Change is slow and piecemeal

Making pay-for-performance models the basis for new offering

Large potential but uncertain reimbursement have led to slow adoption

Using m-health to gain insights into behaviors to lower healthcare costs

Having fragmentated information has led to the lack of a complete picture, while information asymmetry led to insurers knowing little about customers

Creating a data core as a new approach to nudge behavioral change

Insurers are not close enough to customers

Using data and m-health to understand customers better

Reduced investment, regulatory constrains and microsegmentation

Generating new streams to supplement underwriting income

PERCENTAGE OF POPULATION WITH PRIVATE HEALTH INSURANCE 100 80 60 40 20 0

•• US

2010

•United • UK States ••Turkey United Kingdom

2011

•• Spain Mexico Germany

2012 Mexico

•• Germany •• France

2013

•• Canada

ANNUAL GROWTH RATE AND COMPULSORY HEALTH ANNUAL GROWTH RATE OF OF PERGOVERNMENT CAPITA EXPENDITURE FOR GOVERNMENT INSURANCE SCHEMES, PER CAPITA EXPENDITURE AND COMPULSORY HEALTH INSURANCE SCHEMES 25 20 15 10 5

——US ——UK

United States ——Turkey ——Mexico Slovenia —— United Kingdom ——Japan

Japan ——Germany ——France Germany

Turkey TYPES OF INSURANCE COMMERCIALIZATION Slovenia Single or Family: insures the hiring Mexico individual and /or his family.

School: accident insurance for students, professors and other employees of a specific academic institution. Usually lasts through a school year but can be extended to include vacations.

France Chile

between 3 and 330 days.

2016-2017

OECD Global Insurance Market Trends 2017

8.1%

Short Term: accident insurance for a specific activity such as a trip. This

2015-2016

“

Canada

In many countries, the insurance market is maturing, giving room for future expansion. Economic growth can lead to a higher demand of insurance products”

employees or members of an association.

insurance can be hired for periods

2014-2015

——Chile ——Canada

Collective: insures a group such as

individuals or groups which will perform

2013-2014

2012-2013

2011-2012

2010-2011

2009-2010

2008-2009

2007-2008

2006-2007

-5

2005-2006

of the Mexican population has access to health insurance

100 80 60 40 20

2014

2015

2016

2017 Source: OECD

| VIEW FROM THE TOP

A NEW APPROACH FOR THE WORLD OF INSURANCE RAÚL BEYRUTI Founder and President of GINgroup

Q: What needs has GINgroup identified in employee health

and discounts for clinical analyses and at hospitals that are

services and how does the company address them?

not part of our brand. We are also creating an app called

A: The government’s healthcare system cannot

Mi Doctor (My Doctor), which we believe will revolutionize

accommodate everyone: it does not have the reach that

the way health is understood in the entrepreneurial world.

it should, it is not fast enough and does not have the necessary structure to adequately serve the country’s

Q: Tijuana has become a global hub for medical devices.

workers. It is true that Mexico has excellent doctors and

What opportunities does Tijuana represent for GINgroup

the IMSS has excellent facilities, but the country is very large

in the health industry?

and it has neither the structure nor the strength to provide

A: Our plan is to replicate in Cancun the success Tijuana

services everywhere.

has experienced in terms of medical tourism. If things go according to plan, GINgroup will have a hotel-hospital where

GINgroup specializes in the acquisition and management

tourists can undergo their clinical procedures. Patients will

of human capital, which is why we offer our collaborators

undergo surgery and then they will be transferred to their

the best possible medical scheme. The group has two types

hotel room. This means they will not have to move from

of collaborators: 10,000 internal employees working within

one place to another every time they need a consultation.

GINgroup’s operations and 160,000 external collaborators,

I think this will have an impressive impact on the medical

whom we manage. When our collaborators require medical

tourism industry in Mexico.

attention and visit an IMSS clinic, they often do not receive immediate or even correct care. GINgroup also has clients in

Q: How would you describe the level of training with which

many parts of the country where there are no IMSS clinics,

new graduates from universities and training centers in

so workers must travel to other cities just to receive medical

Mexico come to the health industry?

attention.

A: Mexican talent is of a very high level but the demand is greater than what is available; there are not enough

To address these issues, GINgroup has signed several

qualified personnel to satisfy all the needs. It is hard to hire

agreements with insurance companies, including Mapfre

doctors or nurses even at our own hospitals. We do have

and Zurich, and all GINgroup collaborators are granted a

a complicated situation, especially now that the group is

policy for minor medical expenses that covers their spouse

growing. However, there is talent in Mexico.

and children. They do not have to pay for anything upfront; GINgroup pays directly through the insurance company.

Q: What can be done to retain this talent? A: In GINgroup, we have developed four pillars that we

We also have our own hospital network and agreements

believe are important for our workers: health, education,

with other hospitals, so our collaborators have treatment

sports and patrimony. In relation to education, we know

options. All our hospitals are located in Mexico City’s

that we have around 160,000 employees who have not

metropolitan area but we are associated with some doctors

completed elementary, middle or high school, a number

and we are building a hospital in Tijuana. We also have

that represents almost 20 percent of our direct employees.

regional agreements with local hospitals.

For this reason, we have developed an intense educational program for them. We also provide 500 scholarships and

In terms of how our system works, we issue a card

we offer all our employees the opportunity to obtain a

through one of our companies called GINxti. With this

professional degree and a postgraduate degree. GINgroup

card, collaborators receive their policy for minor medical

also has its own university and we hope that in the future

expenses, another for major medical expenses, free medical

it can offer degrees in medicine, communication and

attention twice a year, free ambulance service twice a year,

teaching. Additionally, our employees can learn English for

free through online classes. In relation to the patrimony

we expect to help and promote the growth of Mexican

pillar, we are trying to provide our collaborators with the

entrepreneurs and SMEs.

necessary tools to help them increase their assets. Q: Of GINgroup’s entire portfolio, where do you find your Q: How does GINgroup approach human talent acquisition

largest opportunity areas?

for the healthcare sector?

A: It is basically in human capital. We have experienced 25

A: GINgroup has 11 operational centers and each has its

percent growth rates for the past five years in this sector.

own recruitment area to attract the people our clients

We ended 2017 with MX$26 billion billed and we think we

require. Our recruiting procedures involve our own

can end 2018 with billings of MX$31 billion. We will finish

platform, agreements we have with CONACYT or through

2018 with 180,000 collaborators. In 2017, we were among

universities. Sometimes clients are looking for a certain

the 500 most important companies in Mexico, according to

profile but they are not willing to offer a salary that matches

some magazines. We are considered the No. 1 company in

the profile, so we help them in this regard. Once the profile

Latin America in terms of human capital and we were also

has been defined, we start the recruitment process. We

named the best employer in the country.

are aware that we have to choose the best candidates and this decision must be supported with documents, which

If we continue growing 25 percent in terms of human

we validate. We then send the candidates to the client

capital, necessarily it generates a positive effect on the

for evaluation. When all parties agree, a training process

group as a whole and helps us generate new businesses.

begins. In this training, we ask our client to provide us with

We have opened an office in Houston, Texas, and we

the materials that are needed to train the person in the

expect to have an office in Colombia by the end of April

tasks for which he will be responsible. All our employees

2018. Immediately after, we expect to open an office in

have social security, all benefits mandated by law plus

Peru. We have three offices in the Dominican Republic.

GINgroup’s benefits.

Panama is in the group as well. These are the places where we will grow in 2018. If things go as planned, by

Q: GINgroup integrates several companies with different

the end of the year we will be opening offices in Canada

services. How do your various offerings complement

and Chile.

each other? A: GINgroup is focused on human capital management.

Q: How does GINgroup adapt to different countries to

However, we have seen the need to make our collaborators

provide the same service and level of benefits?

happy; if we achieve this, the client will be happy. To that

A: The first thing we look for is that our suppliers in Mexico

end, we created a company called GINxti. This unit is in

have the capability to supply us in other countries. For

charge of imbuing our collaborators with greater added

instance, Zurich and Mapfre are available in Colombia and

value. Similarly, the other GINgroup divisions were created

we are trying to replicate in Colombia the agreements we

to address the particular needs that we have detected in

have in Mexico. The idea is to start from what we already

the market. For instance, when we realized that we needed

have in Mexico and to open new partnerships for things that

our collaborators to speak English, we decided to create a

do not exist in Mexico but that exist in other countries, but

company that focuses on English lessons. It is the market

everything has to have the same characteristics and follow

itself that generates the needs; we create the companies

the same process.

to provide the solutions. Q: What are the main skills that the Mexican talent Q: GINgroup has a significant number of alliances. What do

system demands?

you expect from your alliances and how do they improve

A: We are immersed in a process of change. What works

the service you offer?

today will be obsolete tomorrow, so most of our clients are

A: We have a very important project that is already under

looking for people who can speak English perfectly, who

way. It is an alliance in which El Economista participates

have finished a professional degree, who have experience

with IDC, one of the group’s magazines that focuses

and the desire to improve and who are reliable. There

on labor, legal and tax topics. We are going to create a

are many necessary characteristics but for me the most

microwebsite where we hope to generate a large amount

important are capability, knowledge and experience.

of content related to human capital that will be focused on SMEs. There will also be a section specialized on tax issues and another on financial and legal issues. Also, we want

GINgroup is a Mexican company that specializes in the

to have live TV shows that will be transmitted online and

acquisition and management of human capital. GINgroup

through some cable platforms. The idea is to provide live

includes GINxti, GINflex, Sportsclinic, Sportsway and Centro

consulting services to our viewers. Through this alliance,

Medico GIN, a specialty clinic

Conducting a test at Hospital Christus Muguerza

VIEW FROM THE TOP |

OFFERING ADDED VALUE THROUGH PRE-SELECTION FRANCISCO LLAMOSAS President of Grupo Valore

Q: How does Grupo Valore business strategy differ from

clinics, laboratories, pharmaceutical companies, assistance

other insurers?

companies, medical associations and insurers specializing

A: We differentiate ourselves by providing added value both

in healthcare.

to our group’s insurers and their clients. Our four insurers are GMX, which offers liability insurance; ANA, which

Q: How does Prevem Seguros work to increase awareness

provides car insurance; Seguros Argos, for life; and Prevem

among the population about prevention?

Seguros, which covers health. Together, our companies

A: Our medical committee carries out constant campaigns

provide coverage to 2 million people. We are leaders in civil

to raise awareness about the dangers of diabetes. The

responsibility insurance and most of our products provide

group also offers presentations on a wide range of diseases

international coverage.

and conditions, including hypertension, hepatitis and overweight, under the name “Canal de la Salud” (Health

Q: How is Grupo Valore’s healthcare insurer making a

Channel). We also have a medical chat on our webpage to

difference in care practices?

provide instantaneous guidance to interested clients.

A: Healthcare is of the utmost importance to the group. Prevem Seguros, our youngest member, provides clients

Q: Insurance penetration among Mexico’s population is

with added value in coverage and conditions through

low. What are public and private organisms doing to

the application of strong pre-selection criteria. Because

increase it?

our client base is carefully selected, we can offer clients

A: Mexico is still creating an insurance culture, but the need

all the guarantees of medical-insurance coverage at

already exists. The penetration of insurance practices within

preferential prices. We pre-select our clients by performing

the Mexican population is increasing but it varies greatly

a comprehensive medical exam for those over 35. This

from state to state. While insurance is prevalent in major

allows all our insured clients to enter a pool of healthy

hubs such as Mexico City, other cities have lagged behind.

people, which also reduces costs. Our clients also receive

A strategy to improve penetration rates in each sector is

a comprehensive medical exam when they turn 35 and we

to make it mandatory by law. People often recognize the

ask them to undergo an exam every five years so they can

utility of being insured after an accident. We observed this

track their health status. Prevem covers approximately

especially after the Sep. 19, 2017 earthquake that hit Mexico

35,000 people but the company is growing at an annual

City and other areas of the country. Many individuals were

rate of 35 percent, an accelerated pace considering our

under the impression that insuring their property would be

strict selection criteria. Our business model has an annual

prohibitively expensive but this is not the case.

deductible and assured reinsertion, which provides great stability and ensures that the annual increase in cost to

AMIS, insurers and government authorities have significant

customers is kept to a minimum.

interest in promoting insurance as it is a key strategy to protect and preserve capital. Insurance is essential for

Q : H ow d o e s t h e co m p a ny co m p e te a g a i n st

economic health. Larger companies are fully aware of

international insurers?

the importance of insuring their assets but not all small

A: Thanks to our pre-selection criteria, Prevem Seguros has

companies are conscious of this need.

had an accident rate of less than 50 percent during its seven years of existence, which makes our business model highly attractive for our investors and our customers. Our clients

Grupo Valore is comprised of four insurance units: ANA

receive personalized attention since all our teams are fully

Compañía de Seguros, for car insurance; Seguros Argos, for

aware of the needs of Mexican workers and their families.

life; GMX Grupo Mexicano de Seguros, for liability and Prevem

We have alliances with most of the main hospitals, doctors,

Seguros, for health

| VIEW FROM THE TOP

PREVENTION APPROACH FOR GREATER MARKET SHARE LUK VANDERSTEDE Director General Mexico of Bupa Global Latin America

100

Q: What are Bupa Global’s growth expectations in Mexico

culture of investment in prevention. Insurance is considered

for 2018?

an investment and not an expense. In Mexico, a person without

A: Bupa has 78,000 employees, more than £14 billion (US$18.4

coverage pays almost 50 percent of medical expenses, which

billion) in premiums and over 30 million insured individuals.

represents almost 5 percent of the country’s GDP.

The Mexican Association of Insurance and Bonding Agents (AMASFAC) ranked Bupa Mexico as the fifth-best company

Q: Mexico is experiencing an epidemiological transition

for premiums. Also, Bupa Mexico leads the ranking of SME

with a significant increase in chronic diseases. How does

insurers as the main medium-sized company in the provision

Bupa deal with this new situation?

of medical expenses services and volume of insured people.

A: We are carrying out prevention campaigns to accompany

Between 2016 and 2017, Bupa Mexico grew from 44,000 to

and encourage medical insurance acquisition by the

49,000 insured and continues to experience net growth. We

Mexican population. Industry and government must join

anticipate double-digit growth for 2018 and the coming years.

the voices that promote a change of mentality regarding prevention. It will be key in the near future to have insurance

Q: How can the insurance sector and Bupa Global take

to balance the expenses of an aging population and the

advantage of the growth in medical tourism?

diseases that will follow. Bupa is working both globally

A: Medical tourism is not an attractive market for us. Our

and in Mexico to generate greater awareness about how

collaboration with BCBS provides benefits for both parties

to improve health finances.

because we have a common client profile that enjoys traveling through these two countries and seeks international medical

Q: How is Bupa Mexico’s approach and services regarding

coverage. Although we do not work in medical tourism, we

this transition better than its competitors?

have a large presence of tourists from the US who take out

A: The maximum age to contract insurance is 65 years but

health insurance and come to us through our joint venture

in the case of Bupa Global it is 75 years. In addition, this year

with BCBS.

we are offering coverage for mental illnesses that have not been considered by other companies. Bupa Global is the

Q: What trans-sexennial proposals could Bupa Global

pioneer in the inclusion of mental illnesses because we are

suggest to improve the health system and participation in

managed as a health-focused company. We focus exclusively

the insurance market in Mexico?

on health and reinvest our profits to create more coverage

A: At the last convention of the Mexican Association of

for new conditions and also to conduct research, promote

Insurance Institutions (AMIS), the central theme was health.

prevention and increase the digitalization of our services.

The country has an average health expenditure of 5,8 percent of GDP. The public sector is aware of these challenges and

Q: The new InsurTech ecosystem is expected to shape

the lines of work that must be followed. For example, the

the future of insurers. What is Bupa Global’s approach in

public sector achieved coverage of more than 80 percent of

this matter?

the population between Seguro Popular and IMSS. In relation

A: Bupa is very active in investing in technologies that

to insurance contracting, the public and private sectors have

exceed patient expectations and provide quality care. Our

made a great effort to raise awareness and promote the

collaborations are not only with Silicon Valley, but also with a technological development center in Guadalajara. Bupa Global and Bupa Mexico want to grow with our customers

Bupa Global is an insurance company belonging to Bupa, a

and not just automate for the sake of automating. The

prominent association that cooperates in different business

company wants technology to offer added value to our

areas but focuses on health through its international market

customers. Bupa Global wants to bring digitalization and

division. Bupa Global has been in Mexico for over 20 years

innovation to our services.

VIEW FROM THE TOP |

A TWIST ON THE STATUS QUO FERNANDO DE OBESO Director General of Salud Fácil

Q: Why is Salud Fácil the ideal option for people seeking

factors that today are key to accessing leasing or financing

medical financing?

services. Salud Fácil analyzes these elements to reduce

A: Salud Fácil was born from the idea of providing medical

the risk associated with payment collection. The analysis

services to people who cannot access the private healthcare

of a customer’s credit history is the basis for a profitable

sector but could be assisted at private clinics and hospitals

operation and this allows us to offer greater added value

if they had the financing. The company collaborates with

to our beneficiaries.

more than 250 clinics and hospitals throughout the country. Salud Fácil has no limitations when cover the financing

Q: Which medical areas are seeing the most demand for

of any treatment or surgery; the main limitation is that

financing?

the patient has sufficient income to be able to face the

A: We receive the most financing requests for

payments resulting from the loan.

gynecological and obstetric surgeries, followed by a lower proportion requiring financing for dental, aesthetic and

Infrastructure problems in the health system prevent it from

orthopedic treatments and surgeries. The epidemiological

meeting demand and the private sector is not accessible

transition now underway in Mexico is an opportunity for

to all. The reality is that the private sector does not cater

Salud Fácil to grow alliances and collaborations to provide

to everyone because coverage of medical expenses is very

more benefits.

low and medical services are expensive for the majority of the population. Through our services, Salud Fácil provides

Q: How is Salud Fácil planning to integrate more companies

greater access to healthcare in Mexico.

to its collaborators’ portfolio? A: Salud Fácil is always looking for new alliances with

Q: What is the added value for the patient when contracting

clinics, hospitals and other entities to strengthen its service

Salud Fácil’s services?

performance. The approach we have in Salud Fácil is aimed

A: There is no cost for patients until they contract Salud

at finding collaborators in the private sector with medium-

Fácil. Insurance requires the payment of a constant rate

sized clinics and hospitals that are more than 3,000 in the

but it is only used when the client has an emergency. Our

country. We already have partnerships with large groups

services are available when the patient requires them and

but our current goal is to focus more on small and medium

the return of benefits is much more immediate. When

clinics because they have a greater flow of patients than

clients hire Salud Fácil, they only pay for what they need.

bigger ones.

Meanwhile, insurance companies are reducing coverage, setting limits on medical expenses due to illness and simply

Our collaborators and clients receive attractive benefits

not covering certain ailments or treatments. At Salud Fácil,

when they work with Salud Fácil such as an increase in

we take care of all surgery-related expenses, including

their income and flow of patients. All of our leasing services

consumables, medical tabulator and other expenses that

have tax deductibility which helps our clients receive

may arise. Medical insurance companies work with surgical

greater financial incentives because the burden of payment

tabulators that limit the choice of doctors, while Salud

becomes considerably reduced. It becomes more cost-

Fácil gives the patient freedom to choose doctors, clinics

efficient to lease a medical device with Salud Fácil.

and hospitals. Q: How does Salud Fácil mitigate the complications of

Salud Fácil is a financing company specialized in the health

having an overdue portfolio?

sector and founded in 2013. The company offers financing

A: Salud Fácil considers two factors when approving a loan:

to cover surgeries, treatments, sale and leasing of medical

credit review and the capacity to repay. These are financial

equipment and remodeling of clinics and hospitals

101

| VIEW FROM THE TOP

REDISTRIBUTION OF RISK: ADVANTAGES FOR THE ENTIRE SECTOR LUIS FRANCISCO GALVÁN Vice President and Head of Pricing Latin America at SCOR Global Life SE

102

Q: What role does SCOR play in the insurance ecosystem?

Total private insurance represents around 2.1 percent

A: Reinsurance allows insurers to protect themselves from

of the country’s GDP, while personal health insurance

volatility and better manage their capital. As a reinsurer,

accounts for less than 1 percent. There is a lot of work

SCOR works with the main insurance companies in the

to be done and as reinsurers we can offer significant

country. Each company specifies the level of risk they are

added value by improving existing products or creating

willing to assume. For example, in the healthcare sector

additional ones. One alternative is the indemnity

a company will take into account their risk appetite and

products, which pay monetary amounts to the insured or

capital requirement, among other factors, to determine the

beneficiary in case of suffering a serious health condition

specific monetary value they are willing to cover in case of

or hospitalization. These products are not new, but have

an incident and reinsure the rest.

seen little penetration in Mexico.

Q: Mexico had 239 foreign reinsurance companies

Another strategy is to improve the coverage of existing

registered in the country by March 2018. What sets SCOR

policies. The sector could also introduce products aimed

apart from those others?

at older people, such as long-term care policies that

A: SCOR is a global leading reinsurer with more than 4,000

cover costs related to services for a population not able

clients served by 38 offices around the world. We can offer

to perform activities of daily living. In these cases, the

clients many added value products and services that allow

insurance would pay a previously stipulated amount that

companies to better define their own offering or generate

the insured can use to hire a nurse or to pay a retirement

new alternatives.

home, among other services.

The Mexican market is very well capitalized, which allows

Q: What measures can the insurance sector implement to

insurance companies to take more risks. Our strategy

increase coverage?

for Mexico is to meet local insurers’ demands for risk

A: Access to health policies in the market is limited due to

management and offer them value-added products that

the high cost of current products. Mexico has more than

generate more business.

30 companies that offer medical insurance, which compete with each other mainly in terms of price. This reduces their

Q: Considering Mexico’s low private medical insurance

margins. To address this issue, insurers are doing everything

penetration, what makes the country an attractive market

possible to control costs by negotiating with suppliers. In

for reinsurance?

my opinion, the insurers’ product offer could be reshaped

A: Mexico’s private healthcare market remains small in

through the generation of substitutes or complements of

terms of insurance coverage. The country has 120 million

the main existing health insurance products.

inhabitants but there are only 10 million people covered by health policies. Private health insurance remains expensive

Q: What role should public institutions and governments

for many, so the sector is looking for alternatives to reach

have in increasing coverage?

a larger segment of the population through the generation

A: Public institutions and governments are doing their

of more accessible products.

part by offering coverage to affiliates of social security institutions and the Seguro Popular, However, a significant proportion of the population does not have access to

SCOR is a top-tier French reinsurance company present in over

quality services. Besides improving their own schemes,

160 countries. Founded in 1970, the group provides reinsurance

it is desirable that governments allow private companies

services in life, health, property and casualty. SCOR has been in

to provide services on basic coverage but also on

Mexico for seven years

complementary or alternative protection schemes.

VIEW FROM THE TOP |

BENEFITS OF PREVENTION ARE WIDESPREAD

Omar Viveros Director of Health Benefits at Willis Towers Watson

Eduardo Hori Senior Consultant in the Retirement Practice at Willis Towers Watson

Q: What role do insurers play in increasing prevention

make decisions based on data and our role is to provide

awareness in Mexico?

that information and work with companies to help them

EH: Mexicans do not see the importance of saving for

develop and manage long-term sustainable programs. We

their health or retirement and are not prepared for

work closely with companies to help them improve their

emergencies. Insurance should not be seen as a luxury or

prevention processes.

a privilege but as a real and immediate need. Insurance companies are introducing new plans to the market. The

Q: What new insurance products could be implemented to

sector is promoting the creation of an efficient framework

address Mexico’s lack of access to healthcare?

for individual pension plans so funds are clearly divided

EH: Mexicans are facing very high medical premiums

between healthcare and all other expenses, since Mexicans

during their retirement. The US, for example, has developed

often forget to reserve money for their medical care. We

health savings accounts (HSA), private plans that combine

only worry about healthcare when we are sick.

savings accounts with health insurance policies that are tax exempted when used to pay medical expenses. These

OV: Willis Towers Watson helps companies to develop

provide the opportunity for long-term savings and medical

strategies to make their health plan sustainable. One of

care in old age. HSAs are not used in Mexico.

these strategies is by encouraging employees to actively save for their retirement. It is necessary to strengthen

OV: Once people reach retirement age, their most common

prevention measures through the introduction of small and

needs are related to healthcare. While public services are

large cultural changes and this can also be done through

very good, they are extremely saturated, so people can find

government initiatives.

themselves in the worst of both worlds: while employed they have access to care that they may not need and once

Q: How does Willis Towers Watson help companies to

they retire they have higher risk but neither the access to

improve their productivity through healthcare measures?

care nor the financial means to pay for it.

OV: Willis Towers Watson performs many studies on the impact of presenteeism and absenteeism in the workplace

Q: What benefits would HSA provide policyholders?

and these types of studies were the basis of NOM-035

OV: Few Mexicans want to acquire insurance policies in

proposed by the Ministry of Labor. There is growing

their old age and, should they want to, they will discover

awareness of the importance of these policies and many

that they are too expensive to acquire or to continue paying

private companies are increasingly introducing them. Our

after 60 years of age. HSA’s would allow policyholders to

study, Global Medical Trends, has provided significant

save for the long-term and to use a percentage of these

information on the reasons behind increasing costs during

savings to pay for health insurance during their retirement.

hospitalizations, doctor’s appointments and clinical tests. EH: The saturation of public health institutions might get EH: Changing the country’s mindset will allow the

worse over time. Many old pension plans offered by banks

development of sustainable programs that take advantage

and energy companies were financially onerous, so they

of prevention and early detection. We have discovered that

have not accepted new members during the last 10 years.

corporate wellness programs are welcomed among Mexican employees, who often focus their lives on their workplace. Prevention will also generate savings for employers,

Willis Towers Watson is an insurance brokerage and risk

decrease absenteeism and increase employee commitment

management company with offices in 140 countries. The

and satisfaction. Absenteeism and presenteeism are

company has divisions for investment, risk and reinsurance,

causing great financial losses to employers. Corporations

human capital and corporate risk

103

| VIEW FROM THE TOP

MEXICANS NEED TO START SAVING NOW LEONARDO ALVES CEO of Plan Wealth MGMT

104

Q: How has the public’s perception of the insurance market

becoming a booming market. Many more companies will

evolved in Mexico?

eventually enter the region but we have been in Latin

A: Thirty years ago, Mexicans did not think much about

America for 10 years and now we are experts here. For

insurance. At that time, families owned large tracts of land

instance, to begin investing in UBS (Lux) Equity Biotech

and had many children who would look after their parents

it is necessary to begin with US$5 million. Through our

in their old age. The situation has changed enormously as

financial instruments clients can invest just a fraction

child rearing is much more expensive, especially in large

of that number. Mexico represents one of the greatest

cities. For that reason, families need to look for alternatives

opportunities globally as the country is one of the leaders

like insurance. Not many companies were willing to provide

for opportunity investments in the healthcare sector.

insurance in Mexico because Mexicans were reluctant to

Mexico’s economy is doing well as its middle class is

accept it. However, this is changing and now there is a

growing and its population is becoming increasingly aware

massive need for insurance products. Furthermore, a

of the importance of insuring themselves.

growing number of people can now afford these products. Q: What are your expectations for the growth of the Q: What is Plan Wealth MGMT’s value proposition for the

Mexican investment market?

Mexican market?

A: Mexico has everything it needs to continue growing,

A: We provide clients a tailor-made plan to meet their

including natural resources, a stronger middle class,

needs. An adviser analyzes the client’s circumstances and

competitive labor and an ideal location close to the US.

filters the market to identify the products that best suit

The peso is weaker against the dollar, which is a significant

those circumstances. Clients do not need to change their

financial opportunity for foreign players. There is no doubt

lifestyle to adapt to a product because the product adapts

that during the next 30 years Mexico will become one of

to them. We are international financial advisers and we work

the leading economies in the world.

with many banks outside Mexico, which gives our highprofile clients access to the global markets for healthcare

We expect to grow significantly in the country, in part due

and biotechnology. We provide access to a wide variety of

to Mexico’s aging population. Thirty years from now, Mexico

funds, such as UBS (Lux) Equity Biotech that is valued at

will have a much older population and the government

over US$1.1 billion and incorporates 46 different companies

will be unable to afford to look after everyone. For that

in the biotechnology sector. Many insurance and financial

reason, many incentives have emerged, including tax

firms are coming to Mexico but the current offering is not

deduction plans.

enough to satisfy demand. Q: What are the main reasons for investing in healthcare? Q: Why did Plan Wealth MGMT choose Latin America and

A: People are living longer and the last years of a

what specific benefits do you see in Mexico?

person’s life usually carry the largest costs in medical

A: While other companies prefer Russia, China or the

terms, which make the healthcare industry one of the

Middle East, we prioritized Latin America because the

best sectors in which to invest, especially in the middle

region did not have a culture of investment, which is now

to long term. Many are expecting to die at the age of 77 but an increasing number of people are living more than 80 years thanks to medical advances. We can provide

Plan Wealth Management Ltd. is an independent financial

people with a way to access money for the rest of their

consultancy with over 50 years of experience. The company

lives and even to bequeath it to their kids. By creating

is headquartered in the UK, but operates in 21 Latin American

awareness now of the need to save, we are preventing

countries, including Mexico, Brazil, Colombia, Chile and Peru

poverty in the future.

INSIGHT |

TECHNOLOGY AS A CATALYST FOR ACCESS JAVIER GUADARRAMA Director General of Health and Benefits at Grupo Promass

One of the main problems facing the Mexican health

guidelines and protocols for the call,” says Guadarrama.

sector is access to services for much of the population.

These protocols allow doctors to easily identify risk factors

By introducing technology, these services can become

and quickly determine whether the patient needs immediate

more accessible to a greater number of people, says Javier

medical attention. “We have provided this service for over

Guadarrama, Director General of Health and Benefits at

12 years and in that time we have noticed that about 80

Grupo Promass. “The main problem we have identified in

percent of problems can be solved through a phone call and

the existing healthcare model is the lack of access to health

only 6 percent of cases are emergencies. The remaining 14

services for the general population. Our ultimate goal is to

percent are canalized to a doctor the following day. Most

bring healthcare services closer to the population through

importantly, 98 percent of our patients are happy with the

information and communications technologies (ITC). It

service and we have not had any fatal event in all this time.

might sound simple but it is a very complex project,” says

It is an effective and safe strategy for medical care."

Guadarrama. The company’s Health and Benefits department has over Grupo Promass specializes in designing, developing,

5 million individual policyholders but since this is a benefit

commercializing and implementing products and services

for families, the company estimates that it provides this

and is a leading integrator of intermediaries in insurance,

service to over 20 million people. The level of acceptance

assistance, health, technology and telecommunications.

led the company to invest in technology. “We developed

Health and Benefits, its healthcare arm, develops products

teleconsultations, which allow patients to discuss issues

aligned with the medical needs of the population. The

with their doctors through a video conference,” says

division, explains Guadarrama, adheres to the guidelines

Guadarrama. The company also sets up required medical

of the National Development Plan and the Sectorial Health

visits across the country, including sessions with specialists.

Plan and follows the WHO’s recommendations for the use of ITCs to integrate hospitals, doctors, laboratories, optics

Phone and video consultations have also become a platform

suppliers and many other suppliers of health products.

to develop prevention and monitoring programs. Its

Reducing costs is one of the company’s goals. “Many

Chronic Patient program, for example, focuses exclusively

studies have revealed that healthcare is the largest out-

on patients with diabetes and hypertension. “With this

of-pocket expense people make for themselves or their

equipment, we can continuously monitor patients and

families, mainly in the case of catastrophic events.”

promote a culture of prevention. Alongside our medical personnel, we also monitor patient compliance and we can

Some practices from overseas have been successfully

even send them more medication if they run out. Similarly,

implemented in Mexico to address patient needs. “We

we are developing a program for seniors who might or

have developed telephone consultations as a step prior

might not have these chronic diseases. In this case, the

to a medical visit. This is not a unique model since the

service supplies an alert button they can use to request

National Health System (NHS) of London has been using

immediate help in emergencies.”

this methodology for more than 20 years with excellent results.” What sets Grupo Promass’ service apart is that

Grupo Promass wants to continue expanding its service

all telephone consultations are provided exclusively by a

offering to provide specialized care. “Our goal is to bring

doctor, while the UK employs nurses and other professionals.

health services to the homes of our members wherever

To begin providing this service, Grupo Promass followed

they are, just when they need it. This avoids self-medication,

and adapted Mexican Clinical Practice Guides. “When we

unnecessary travel and health expenses and benefits family

started operations, there were no guidelines for phone

and government programs in the field of medical care,”

consultations. We decided to develop entirely new

says Guadarrama.

105

| VIEW FROM THE TOP

REDEFINING INSURANCE IN MEXICO ALEJANDRO SANCEN Director General of MASZ

106

Q: Why is there such a small amount of integral health

Q: How is the insurance sector addressing Mexicoâ&#x20AC;&#x2122;s aging

insurance programs?

population?

A: A major contributor is the lack of a health culture at

A: The insurance sector tends to cancel policies when

both the institutional and corporate levels. In Mexico,

the beneficiaries are in their late 60s. When people are

health management is fragmented; we have public services

elderly, they need better coverage that is very hard to find.

and private services but there is no integration between

There are insurance companies that do not insure patients

them. The Mexican population is too large and many of

with pre-existing conditions like hypertension, obesity or

the services are concentrated in big cities but there is a

diabetes â&#x20AC;&#x201C; a situation that proves decisions made in the

sizable population in more distant municipalities. Mexico

insurance sector are not made by health professionals.

is experiencing epidemiological, generational, political and

Without the input of public health practitioners, it is not

environmental transitions that demand change.

possible to meet new challenges. Therefore, we are working to create a product for geriatrics that will be launched in

Q: How do you make insurance affordable for

the second half of 2018. It is time to free healthcare from

more patients?

the General Insurance Act.

A: We have been working with insurance companies to correct this flaw in the system and we are trying to

Q: How are you working to include these products?

equilibrate the whole ecosystem. In this equation, the only

A: Three years ago, we designed the first cancer policy in

unbalanced player is the insured population who cannot

Mexico and we had to overcome many regulatory problems.

pay the premium or who can pay but receives few services.

In Mexico, when someone wants to innovate, the law throws

Today the most common policy in Mexico is the major

up many barriers. Institutions are learning with us and we are

expenses premium, created years ago for a lifestyle and

learning with them. To provide a license for a new product, the

an epidemiology very different from what we have today.

National Commission of Banking and Insurance (CNBS) needs

We need to create new policies that address the countryâ&#x20AC;&#x2122;s

a historical report that proves the efficacy of the product.

needs. To this end, MASZ is designing new products for launch in 2018. One is a policy only for heart attacks. The

Q: Which products are most helpful for increasing access

next product we will develop is a minor-medical expenses

to healthcare?

policy with wellness benefits that provide access to

A: It is not about the products, it is about the programs. For

general practitioners, specialists and subspecialists. It

example, our minor medical expenses product is offered

covers anything that does not require hospitalization, such

with a wellness program. These programs provide access

as medicine, basic lab work and emergencies.

to first-level service. Without a program, there is no medical follow-up, no patient adherence and a disorganized service.

Another product in our pipeline addresses personal accidents. This covers any eventuality and also includes

Q: Where do you see the niche of opportunity in

prevention. Fifty percent of health expenditure in Mexico

healthcare?

is out-of-pocket; people are willing to spend money on

A: The key is at the first level of care. Mexico does not

health but we need better insurance products.

need more hospitals; the country needs more primarycare centers. Despite the existence of formal institutions that provide health services, we have charitable and

MASZ was created by health insurance and consulting specialists

private initiatives dedicated to providing diagnoses.

and originally named Red Medica Internacional. It aims to

Many, such as pharmacy consultancies, are impossible to

pioneer third-party medical service systems through design and

suppress because this type of services are supporting the

implementation of prevention and health-promotion models

capacity of IMSS.

INSIGHT |

TEACHING BUSINESSES TO PRIORITIZE HEALTH MIGUEL PRIDA President of Consulmed

The health of employees in the workplace can sometimes

(PMI) membership, only available for companies through

be ignored by businesses focused on their bottom lines.

a broker or an insurer. The final division is health supplies,

But the issue is gaining relevance as the government

in which “we supply our clients the medicines and medical

and companies realize the benefits of having a healthy

equipment that they need as every company with over 100

workforce, explains Miguel Prida, President of Consulmed,

employees must have a medical office on its premises,”

a health services administrator that insures over 500,000

explains Prida.

users with a broad network of hospitals, doctors and suppliers.

The company provides personalized services according to a client’s needs. Consulmed works only with businesses

Employee healthcare is not only good for workers, it is

with more than 100 employees, but the company wants to

also good for companies since injuries disrupt the work

develop a series of products that will allow the company

environment and can potentially result in damaged

to provide services to smaller companies. “Our goal is to

property and equipment. By developing and enforcing

establish clinics for occupational health within industrial

safety workplace practices, companies can reduce or even

parks, a service that does not exist at this point.” According

eliminate costs associated with liability compensation

to Prida, these clinics would be ideal for companies

and litigation, Prida says. Furthermore, having healthy

with less than 100 employees working closely within an

employees generates a more productive and efficient

industrial park.

workforce. “This area has boomed during this presidential administration as the federal government and the Ministry

Another initiative under development by Consulmed is the

of Labor and Social Welfare (STPS) have demanded that

creation of several “infusion centers” in which patients can

companies with more than 100 employees provide medical

receive medication that requires specific equipment to

services,” he says.

administer. “For these medications, patients often must go to IMSS or a private hospital, which is either too time consuming

However, many companies still have a negative perception

or expensive. These centers will be linked with insurance

of occupational health. “We have to convince them that

companies and will allow companies to reduce their costs

improving the health of their employees is not an expense

by 50 percent in comparison to a private hospital.” These

but a necessity,” Prida says. “This service is also 100-percent

clinics have significant potential, according to Consulmed,

tax deductible, helps companies reduce the cost of their

especially if they are connected with foreign insurers. “One

risk premiums and reduces the need for major medical

attractive area for these clinics is Mexico’s beaches, as

expenses.” The benefits for employers are significant, Prida

foreign tourists who are sick do not have anywhere to source

adds. “The first is the reduction of the risk premium. The

this type of medication. We are allying with a travel agency

second is a reduction in employee absenteeism and third is

from the US, so patients who need this service can acquire

accident prevention. These schemes have been excellent for

it jointly with their vacation passage.”

employee retention as workers are often grateful to receive medical attention in their offices.”

Consulmed’s product has proven to be attractive. “Between 2009 and 2017 we have enjoyed double-digit annual growth

Consulmed has four business units. The first, which is the

of over 25 percent on average. Many have complained that

company’s core business, is occupational health through

2017 was a hard year but we grew by 33 percent.” This

medical services administration. Second is pharmacy, which

growth has allowed the company to become a fully Mexican

has grown enormously as laboratories are increasingly

success story. “Consulmed, which will turn 10 years old in

interested in helping patients follow treatments and achieve

2018, was acquired from Canadian and US companies and

stable health. Third is the Integral Medical Protection

we made it fully Mexican.”

107

PHARMACIES & MEDICAL SUPPLIES

Pharmacies are acquiring an increasingly important role in healthcare beyond selling medical supplies. Through the incorporation of doctors at the point of sale, pharmacies are filling a gap in healthcare services by reducing the burden of primary care at public institutions. Filling this gap is moving pharmacies closer

to patients, who are increasingly seeing pharmacies as healthcare partners. This sector alongside medical supplies, including disposable wound-care materials, dialysis bags, wearables such as gloves and scrubs and materials for surgery and prostheses, are expected to continue growing as demand rises.

This chapter includes interviews with both manufacturers and suppliers to identify the main areas of opportunity and overlooked niches for the development and commercialization of medical supplies in the Mexican market. This segment also presents interviews with the leaders of the main pharmacy chains in Mexico and industry representatives to discuss the changing role of pharmacies in Mexican healthcare.

109

CHAPTER 5: PHARMACIES & MEDICAL SUPPLIES 112

ANALYSIS: Toward a Business Scheme Centered on Tech and Redefined Patient Care

114

VIEW FROM THE TOP: Carlos Hernández, Beckman Coulter

115

VIEW FROM THE TOP: Alejandro Von Mohr, Atramat

116

VIEW FROM THE TOP: Mauricio Valero, Linet Group SE in Mexico

118

VIEW FROM THE TOP: José Velasco, Essity Medical Solutions Mexico

119

INSIGHT: Karina Ramírez, Epóxicos para la Salud (EPSalud)

120

INSIGHT: Germán García, Smith & Nephew Mexico

121

INSIGHT: Francisco Ugartechea, Ottobock Mexico

122

VIEW FROM THE TOP: Guillermo Martorell, Grupo RFP

124

VIEW FROM THE TOP: Macedonio Garza, Farmacias Benavides

126

VIEW FROM THE TOP: Isaac Valdivieso, Farmacia San Pablo

127

VIEW FROM THE TOP: Francisco Cantú, Fármacos Proasse

128

PROJECT SPOTLIGHT: ACF Group’s AQUAUF: High-Quality Drinking and Process Water

130

VIEW FROM THE TOP: Francisco Morales, 3M

131

VIEW FROM THE TOP: José Mora, Farmalisto

José Crespo, Farmalisto

111

| ANALYSIS

TOWARD A BUSINESS SCHEME CENTERED ON TECH AND REDEFINED PATIENT CARE The Mexican medical devices industry has made great strides in recent years, climbing the export rankings to become a world leader, with more room to grow. Pharmacies, meanwhile, are emerging as a vanguard for primary care. Together these segments are redefining patient care The medical devices industry is divided, according to

specialization that have been issued and legally registered

CANIFARMA statutes, into two sections: health-related

by the competent educational authorities. But here, too,

auxiliary products (PAPS) and diagnostic, reactive, self-

more needs to be done.

monitoring (RSD) and personal care products. The RSD 112

industry represents companies whose technology facilitates

“Regulation regarding pharmacies has lagged far

the obtaining of biometric indicators of patients through

behind and regulators lack the necessary funds to

medical tests and also represents authorized manufacturers

properly address many issues. For instance, the sale of

and distributors of medical devices. The PAPS division

psychotropic medications is not applied correctly due

groups manufacturers and distributors of disposable

to the lack of technology and the adequate processes

healing materials, dialysis bags, gloves, surgical garments

to control it,” says Isaac Valdivieso, Director General of

and other materials required for surgery and the application

Farmacia San Pablo.

of medicines.

MEDICAL DEVICES Overall, it took a decade but Mexico is now a global

The medical devices market in Mexico has grown 15 percent

leader in manufacturing and exporting medical devices,

annually in the last decade, according to Global Health

ranking eighth in the world and No. 1 in Latin America,

Intelligence. ProMéxico reports that production totaled

according to ProMéxico. The country is also the leading

MX$13.8 billion in 2017, and estimated average annual growth

provider of medical devices to the US; but insiders say the

of 3 percent for the period 2017-2022, which represents

country cannot rest on its laurels, with significant room for

approximately MX$15.8 billion by 2022. Purchases of medical

continued growth in the coming years and a key issue that

devices in 2017 amounted to MX$9.6 billion with a projected

has yet to be resolved: access.

growth of 4 percent for the period 2017-2022, which would represent an approximate value of MX$11.7 billion for 2022.

Production of medical devices totaled MX$13.8 billion in 2017 and purchases amounted to MX$9.6 billion “Medical devices companies see significant potential in Mexico but are often stumped by their low penetration,”

CANIFARMA’s PAPS and RSD medical devices division has promoted regulation and market growth in recent years, but there are still sectors to be explored. For PAPS medical devices, the wound care market is underdeveloped and offers a great opportunity for companies to offer new and high-tech

MAIN RELATED INDUSTRY CHAMBERS AND ASSOCIATIONS

says Gérman García, Director General of Smith & Nephew Mexico. “The Mexican market for medical devices is growing at a less than 10 percent rate, in terms of use, which is much slower than expected. This phenomenon is caused by the lack of access to innovative products as it is extremely difficult to enter the basic lists of public institutions.”

• Mexican Association of the Innovative Industry of Medical Devices (AMID) • National Chamber of the Transformation Industry (CANACINTRA) • National Chamber of the Pharmaceutical Industry (CANIFARMA)

Similarly, pharmacies are poised to play a greater role in healthcare delivery as digitalization, new business models and new regulations position these traditional retailers of medicines and supplies to provide a more integral service. In 2018, for instance, the Senate approved the reform of Article 79 of the General Health Law, which requires that those who work in a pharmacy possess titles or certificates of

• Mexican Association of Managers of Applied Research and Technological Development (ADIAT) • Mexico-US Foundation for Science (FUMEC) • Mexican Society of Biomedical Engineering (SOMIB) • Cluster of Medical Products of the Californias Source: ProMéxico

therapies that provide greater benefits to patients but also

PHARMACY TRENDS FOR 2018

a cost-efficient solution for healthcare providers, says José Velasco, General Manager of Essity Medical Solutions Mexico. “Today, only 20 percent of the market is developed. The task

• Integration of start-up technology, supply-chain and e-commerce companies • Shift from traditional brand-name drugs to specialty drugs

of the industry is to increase market development in Mexico by 25-30 percent to improve technology and innovation in

• Expansion of pharmacogenomics

advanced therapy solutions,” says Velasco. The upcoming

• Use of Big Data to increase compliance and adherence

challenges for companies are to bolster the development of the medical devices sector and raise awareness about

• Growth of self-care and healthcare consumerism

the benefits of investing in technology. The complementary

• Demand for new services to be available at pharmacies

priority would be to create a greater penetration of PAPS

• Increasing role for artificial intelligence in clinical experiences for the patient

technologies in the public sector.

• Demand for greater coordination with providers In addition to the continuous growth, 2018 also saw the appointment of Carlos Jiménez as the new president of AMID for the period 2018-2020. According to AMID, during this

• Pressure to reinvent traditional business models Sources: McKesson and Wolters Kluwer

period the association will focus on maintaining high ethical standards, ensuring greater access to health innovation,

to improve the health environment. “Technologies like

addressing the illegal health market and contributing to

e-commerce can serve to provide value at all points along

make the process of purchasing medical devices more

the value chain of medicine until the drugs reach the patient’s

transparent and efficient for health professionals.

hands and even after that,” says Mora.

NEW SCHEME FOR PHARMACIES

TECHNOLOGY SHAPING HEALTHCARE

Just as medical devices companies see opportunity on the

There is little doubt that technology is extending its

horizon, pharmacies are also adopting more comprehensive

reach across services and products for the health

healthcare schemes in which they are no longer just

sector. Pharmacies now have a greater depth of digital

providers of medications and medical supplies, but include

professionalization, including payment methods and the

low-cost healthcare services to improve access for a large

monitoring of the traceability of medicines. Medical device

part of the population. According to the National Statistical

companies are being directly influenced by technology.

Directory of Economic Units of INEGI, there are more than

“There is a clear digital trend in PAPS medical devices as

150,000 ambulatory medical services in the country, of

marketing and digital media are creating synergies with

which 1,521 are pharmacies. This was one of the reasons

e-commerce to deliver products more efficiently,” says

why the Senate approved the modification of the General

José Velasco, General Manager of Essity Medical Solutions

Health Law with the objective that pharmacies join the list

Mexico. However, some areas are more experienced than

of technical and auxiliary activities that require specific

others in using technology, Velasco says: “Some companies

knowledge for the field of pre-hospital medical care.

already have e-commerce experience in the health industry but the medical devices segment is not as developed.”

The inclusion of digital tools and technology is also shaping

and Co-Founder of Farmalisto Mexico and Colombia. In this context, the emerging trend is for pharmacies to become an intermediary between the patient and the pharmaceutical

12 9

2010

2011

2012

2013

15.0 13.3

cannot contact patients or customers,” says José Mora, CEO

13.6

up with the patient while pharmaceutical companies, by law,

12.0

adherence because they only sell medicines and do not follow

2010 -2016 (BILLIONS)

11.7

for growth. “Traditional pharmacies are limited in improving

PRODUCTION OF MEDICAL DEVICES IN MEXICO, 2010PRODUCTION OF MEDICAL DEVICES IN MEXICO, 2016 (billion)

11.2

ability to provide health assistance, while also offering avenues

10.8

the commercial scheme of pharmacies and redefining their

industry. According to José Crespo, CEO of Farmalisto in Mexico, by incorporating technology pharmacies can

improve communication with patients to increase adherence to treatment and at the same time safeguard sales. Therefore, e-commerce and other technologies can become the point of union between the needs of pharmacies and patients

Source:ProMéxico ProMéxicoand andINEGI INEGI2017 2017 Source:

2014

2015

2016

113

| VIEW FROM THE TOP

CUTTING-EDGE TECHNOLOGIES CHANGE LIVES CARLOS HERNĂ NDEZ Director General of Beckman Coulter

114

Q: What opportunities have you identified in Mexico in

Q: Of Beckman Coulterâ&#x20AC;&#x2122;s recent innovations, which would

2018 for your diagnostics portfolio?

provide the greater benefit for the Mexican health system?

A: We are facing different challenges in 2018. Some

A: In 2017, we launched two product platforms: the DxH500,

government contracts will expire or have already expired

a medium-sized machine that does five-part hematology,

and have not yet been assigned, which is an opportunity to

and the DxC700AU, a platform directed to the middle

boost our business. However, the big government hospitals

segment. We are producing these types of innovation

are looking to reduce their budgets. This brings a challenge

because we are aware that the market in countries like

to companies like ours to provide cost-effective, efficient

Mexico has specific needs. We also launched the P2PSA

solutions to this important sector of the market.

assay for prostate cancer diagnosis because we believe P2PSA can be an important diagnostic tool in the coming

In the case of private laboratories, some of them have

years as it helps reduce risks and discomfort of biopsy for

merged and are consolidating their operations, including

the patient. Applying this test instead of taking a biopsy

the integration of production plants to generate economies

could help reduce spending by 60 to 70 percent.

of scale and growth in efficiency and capacity. International players from South America and Europe are also looking at

Q: Beckman Coulter offers a test that could help identify

Mexico as an investment opportunity. We are also seeing a

heart attacks in patients when they arrive to an ER. When

great opportunity in the health-related services companies

will this technology be available in Mexico?

oriented to a large part of the population with low resources

A: Our high sensibility troponin test is in the registration

or with no healthcare coverage.

phase in Mexico. It will bring a wide margin of opportunities because this test can help professionals recognize in a

Q: How does the commercial strategy and technology offer

shorter time if the patient that comes into the ER with

vary from segment to segment?

heart attack symptoms has already suffered one or not. This

A: We offer the same technology to laboratories at

could help shorten admission times for patients and avoid

pharmacies, government institutions or to private

saturation at ERs, as well as to avoid discharging patients

hospitals. We do not differentiate among our patients

to their homes who indeed have suffered a heart attack.

and can provide both instruments to small-capacity laboratories and high-capacity open automation systems

Q: In terms of IT, what is your product offer?

that integrate different platforms. We are actively

A: We have IT solutions in three areas: logistics and storage,

participating in new business schemes and for this we

remote instrument diagnosis and laboratory information

have implemented the cost per test reported in different

systems. For consumables logistics and inventory control,

accounts of the health system. Our commitment to

we are providing a comprehensive offer through all our

the health system is to achieve high productivity and

platforms with innovative and proprietary IT solutions.

efficiency and to reduce waste. The application of these

We provide remote instrument diagnosis and monitoring

schemes is complemented by automation and IT tools

using our ProService system, through which we can

that help reduce manual errors and increase productivity

identify failures, prevent unexpected shutdowns and alert

and savings.

the client proactively. Finally, in the case of laboratory information systems, we have a robust platform that manages information to execute automated results release

Beckman Coulter is a US manufacturer of analytical and

and reliable patient information archiving and analysis. We

diagnostic solutions that automates and innovates complex

are also working in the development of Big Data solutions

biomedical tests. In 2011, it merged with US-based Danaher Corp,

to make better use of the amount of information our

which includes companies focused on tests and measurements

clients manage.

VIEW FROM THE TOP |

STITCHING TOGETHER REGULATIONS CAN FACILITATE MARKET ACCESS ALEJANDRO VON MOHR Director General of Atramat

Q: How do regulations benefit or hinder Atramat’s growth?

Q: How do sales of Atramat products vary between the

A: Regulations in Mexico and the world have increased

public and private sectors?

greatly over the past 15 years and this has sometimes

A: The private sector requires a wide variety of specialized

meant performing new tests on time-tested products

products depending on the type of surgery and the patient.

as well as higher costs. In Mexico, COFEPRIS faces the

We have concentrated on the public sector, which demands

challenge of having to efficiently manage both NOM 059

lower prices but larger volumes. The public health sector

for the pharmacovigilance of pharmaceuticals and NOM

offers many opportunities. The most important are the

241 for the techno-vigilance of medical devices, as well as

IMSS annual consolidated tenders that now encompass

having to align themselves with the health authorities in

many states and other public institutions such as ISSSTE,

the rest of the world. For Atramat, this means complying

SEDENA and PEMEX. However, IMSS works on the basis

with the ever more stringent rules for medical devices

of ceiling prices and although these are updated every

manufacturers.

year, they do not make up for rising costs due to inflation. Furthermore, these tenders are sometimes open to foreign

One of the main challenges for our export business is

companies that often offer lower prices and lower quality.

ensuring that we have all the necessary health registrations,

These circumstances have led us to reduce the prices at

which is difficult since they vary from country to country.

which we sell to the public sector by about 50 percent

While obtaining international certifications opens doors

compared to five years ago.

to new markets, it also represents a very large investment. Next year, we are entering the Medical Device Single Audit

Q: What new lines is Atramat developing?

Program (MDSAP), which currently involves regulators from

A: We recently launched a suture with an antibacterial

five countries: the US, Canada, Brazil, Australia and Japan.

coating designed for special procedures where there is

Obtaining this certification will be an advantage because

a greater risk of infection. A clinical study conducted in

we will meet the requirements of five different companies

Mexico showed a significant reduction in infection when

through a single audit.

this suture was used. The study was performed with gastric bypass patients who had lost between 40kg and 60kg

Q: What strategies helped Atramat to become the fourth-

and required reconstructive plastic surgery. We formally

largest suture manufacturer in the world?

launched three antibacterial lines at the beginning of 2018.

A: Absorbable sutures have been in use since the 1950s and have the advantage of eliminating the need for a

In the last five years, we have been exploring new lines in

second surgery that would be necessary to remove non-

order to increase our product portfolio for the operating

absorbable sutures. Until the late 1980s, there were only

room. A few years ago, we launched a range of spinal

three different types of sutures, two non-absorbable made

implants manufactured by a US company and we will

of silk and nylon and one absorbable made of catgut.

eventually expand this line to include other orthopedic

Synthetic absorbable sutures made of poly-glycolic acid

products, such as knee and hip implants. We are also

(PGA) were launched in the 1970s and poly-lactic-co-

expanding into new markets in Europe and for this reason

glycolic acid (PLGA) sutures emerged in the 1980s. We

decided to open a subsidiary in Spain at the end of 2016.

were one of the first companies in the world to produce these products and in Mexico we became practically the sole supplier for the public healthcare sector during

Atramat manufactures surgical instruments. It is one of the

the 1990s. At the same time, we also began to export

world’s largest suppliers of surgical sutures. The company

our products to Latin America, later expanding to

belongs to Internacional Farmacéutica and its products are

other regions.

sold in over 80 countries

115

| VIEW FROM THE TOP

IMPROVING SYSTEM EFFICIENCY THROUGH BED TECHNOLOGY MAURICIO VALERO Managing Director of Linet Group SE in Mexico

116

Q: What market opportunities have you identified in

patients receive their treatment and which can be used

the Mexican population regarding epidemiology and

to provide treatment in places that do not have the

social trends?

necessary infrastructure.

A: We want to improve and amplify markets like geriatric care. Between 1990 and 2017, the percentage of adults

We also have a line of beds for gynecology and obstetrics

over 60 years old in Mexico rose from 6.4 percent to

that we presented in July 2017 at the Mexican Congress

10.5 percent. This social evolution requires changes in

of Gynecology and Obstetrics.

healthcare since there are no precise public policies regarding who is responsible for providing care to this

Q: What is the status of your goal to establish a plant

population in Mexico.

in Tijuana? A: The opening of a manufacturing plant in Mexico

We are interested in focusing our technology on home

through which we can distribute both to the US and Latin

care. We have developed specialized beds to this end and

America remains one of our objectives. We hope that

we want to make them available to the public. These beds

the economic relationship between the US and Mexico

can prevent a significant number of fractures caused by

stabilizes so that we can finally make a decision on this

falls, with safety devices to protect the patient. The beds

project. We are still thinking about locating it in Tijuana,

can also reach a very high height, so when the patient lies

because this location offers the best opportunities in

down it is easier for the caregiver to perform activities

terms of logistics, costs and supply chain.

like changing the sheets. Q: Where do you see the greatest opportunities

Between 1990 and 2017, the percentage of adults over 60 years old in Mexico rose from 6.4 percent to 10.5 percent

in Mexico? A: The public market will remain the largest. IMSS has said that it is receiving more funds to develop infrastructure and to take care of the new rightsholders; however, the institution still needs more beds. The private sector is also very interesting as it requires a different strategy. It is more B2C than B2B, but we need to improve to

We are waiting for a regulation from the Ministry of

provide the services we want and to achieve the growth

Health and the National Geriatrics Institute (INGER)

we expect.

that specifies the infrastructure required in homes and specialized institutions. Meanwhile, we want to reach

Q: How does Linet technology contribute to improving

caregivers, nurses and families who have someone at

the efficiency of the Mexican healthcare system?

home with mobility problems and also residences so they

A: In the public sector there is a large installed equipment

can improve their offer and provide the best care.

base, although almost half is obsolete. The inclusion of new beds will help public institutions reduce the time

Q: How does Linet contribute to the treatment of

that patients stay in hospital. The reason for that is that

chronic diseases?

better materials are much less prone to cause infections

A: Chronic diseases such as diabetes, obesity and renal

and can help patients prevent the development of ulcers

insufficiency are impacting the Mexican population. With

caused by pressure.

the purchase of BORCAD Medical in 2016, Linet acquired a solution to alleviate the impact of kidney failure: special

With our technology for ICU beds, it is possible to reduce

chairs that provide a more comfortable experience as

the length of stay in one of the most expensive areas

in a hospital. In addition, technology helps to reduce

Q: How do you train workers to use these technologies?

complications like pneumonia, caused by mechanical

A: One of the main reasons for our success in the region

ventilation with automatic lateralization. We are also

is that in our team, we have nurses who come to each

thinking about the safety of patients and the professionals

facility to train users on all the applications. When clients

who help them.

buy from us they do not only buy a product, but also acquire the complete support system of the organization.

We are pleased that both in Mexico and the world, people

Our training team teaches doctors and nurses how to

recognize the importance of beds in the recovery of a

perform all their activities in the new beds, how to clean

patient. Hospitals and healthcare systems now see it as

them and how to use the technology.

a medical device, not as a piece of furniture. Q: What are the commercial objectives of this offer? Q: What is the purpose of each line?

A: This campaign is mostly oriented to the private market.

A: Our portfolio is called ICU Complete and its purpose is

In the public market we have done very well. Last year,

to show that there are complete solutions for the intensive

we sold more than 1,000 ICU beds but we believe the

care area. The portfolio consists of four categories of

market is no bigger than 1,200 per year. From those

beds: Alive, Safe, Recover and Well. In ICU Alive, we

1,000 beds around 990 went to the public sector as

develop beds with features that are focused on the vital

private institutions are not investing in this. We are

functions of the patient. For example, Alive beds have a

trying to make this offer technologically, clinically and

Smart CPR, a button that commands the bed to go into

commercially interesting. The plan is to reach them with

position for CPR. These beds also have a chamber where

high-end technology at an attractive price.

the digital detector is placed for X-ray imaging. When patients are in ICU they cannot move which might cause

Q: What are the companyâ&#x20AC;&#x2122;s expectations in Mexico?

them to accumulate liquids in their lungs and eventually

A: We want to continue leading the market in hospitalization

this situation can lead to pneumonia. The bed allows

and ICU beds. We want to have 100 percent coverage of

lateral movements for the patietn that help prevent the

the Mexican territory and Latin America. The company

gathering of liquids.

also wants to compete and achieve a leadership position in geriatric and chronic home care and in gynecology beds.

The second category is ICU Safe and its objective is the

Finally, we want to establish as an intrinsic experience a

prevention of ulcers, respiratory complications and falls.

continued high-quality aftersales service. With these goals

The three beds in this category have technologies like

in mind we will continue growing.

active mattresses that inflate and deflate in different sections with different frequencies, so the pressure is not

INTENSIVE CARE BEDS PER STATE

transmitted to one place on the body. Also, to avoid falls,

TOP 5 WITH MOST BEDS

beds have several types of alarms that warn of various

State

risks that may threaten the wellbeing of the patient.

Jalisco

Mexico City

234

The third line is ICU Recover, which provides a support

Queretaro

system in each of the bed's three adjustable levels. These

State of Mexico

146

beds include mechanical devices that help nurses and

Nuevo Leon

208

Beds

caregivers move the patient, an important contribution to their physical health.

TOP 5 WITH FEWEST BEDS States

Beds

The fourth category focuses on helping nurses and

Campeche

doctors to execute tasks that are common in the ICU.

Colima

The three beds in this category incorporate scales to

Nayarit

load the patient more easily into the bed and pedals that

Baja California South

help professionals climb into the bed to help or move

Durango

their patient if the nurses or doctors have their hands

Source: INEGI, Salud en establecimientos particulares, 2016

busy at the time. They also include lateralization and high- security guardrails to help nurses and caregivers when changing sheets or when it becomes necessaary

Linet Group SE is a top manufacturer of hospital beds. Its

to move the patient. All our beds fully comply with the

business portfolio includes solutions designed for intensive

relevant European norm, which is the strictest in terms

care, products for routine treatments and special beds for

of hospital security.

nursing homes and long-term care centers

117

| VIEW FROM THE TOP

UNDERDEVELOPED WOUND-CARE SEGMENT OFFERS OPPORTUNITY JOSÉ VELASCO General Manager of Essity Medical Solutions Mexico

118

Q: What added value differentiates BSN Medical’s products

The country plays an important role for our operations in

from those of the competition?

Latin America.

A: BSN Medical is an Essity company. It was acquired in April 2017, creating the business unit Health & Medical

Q: What segments of the market offer an opportunity for

Solutions to empower customers, patients and caregivers

BSN Medical's products?

with products and solutions that support healthy and

A: The wound-care market is underdeveloped. We have

active lives. We are considered world leaders in healthcare-

a great opportunity to position our products, which offer

market specializing in our three business lines: Compression

great quality, and new and high-tech therapies that provide

Therapy, Wound Care and Orthopedics. Our high quality

greater benefits for the patient. For example, gauze is

and our strong technological competencies are the main

considerably cheaper than a bandage but in the long-term

differentiators of our products. The JOBST brand provides

gauze requires more replacements. BSN Medical's dressing

high-quality compression stockings, HYPAFIX is considered

maximizes the cost-benefit for the patient.

a professional dressing option and we have a wide range of slings and high-tech splints in orthopedics.

Q: What is needed in Mexico to develop an innovative market in wound care and how can BSN Medical participate

Q: What are the company’s biggest selling products

in this dynamic?

in Mexico?

A: Today, only 20 percent of the market is developed. The

A: The market has a strong demand for traditional products

task of the industry is to increase market development

so our biggest selling line is in wound care followed by

in Mexico by 25-30 percent to improve technology and

orthopedics and compression. According to sales per unit,

innovation in advanced therapy solutions. One of our

tape occupies first place and the compression division

priorities is to penetrate in the public sector channel and

follows as one of the best-positioned products in that

create awareness about the benefits of investing in wound

segment of the Mexican market. Our brand JOBST is a

care technologies.

pioneer in the concept of gradient compression legwear and now we have over 30 products in our portfolio, ranging

Q: How do your products increase efficiency and reduce

from products that promote venous blood circulation to

costs in the health sector?

those that treat lymphatic diseases.

A: Shorter hospital stays reduce costs for the medical care system and the use of technologies for wound care

Q: What role does Mexico play in Essity’s BSN Medical’s

can lower expenses. In addition, our products offer a real

operations in Latin America?

solution for the patient because the benefits are greater. We

A: BSN Medical, as the Medical Solutions segment of Essity’s

are the best option for health institutions, whether public or

Personal Care division, considers Latin America a growing

private, because our main interest is to improve the quality

region. We have a strong presence in Chile, Colombia, Brazil,

of patient care.

Mexico, Central America and the Caribbean. Colombia is our main market in Latin America followed by Mexico, Brazil and

Q: What trends is BSN Medical observing in Mexico's PAPS

Chile. We have been in Mexico for approximately 20 years.

medical services sector and how can BSN Medical take advantage of this opportunity? A: There is a clear digital trend in PAPS medical devices

BSN medical became an Essity company in 2017. Essity sells

as marketing and digital media are creating synergies

in approximately 150 countries under a variety of brands,

with e-commerce to deliver products more efficiently to

including TENA, Tork, Leukoplast, Libero, Libresse, Lotus,

the customer. Some companies already have e-commerce

Nosotras, Saba, Tempo, Vinda and Zewa

experience but not in the medical devices segment.

INSIGHT |

SKULL SUBSTITUTE MANUFACTURER IS NOT AFRAID OF TOUGH MARKET KARINA RAMÍREZ Administrative Director of Epóxicos para la Salud (EPSalud)

Cost plays an important role in any surgery, but the need to

complicated. This leads many startups to give up or sell

delay a necessary operation because of an inability to pay

their technology to another company, sometimes in another

can have severe consequences. This is particularly true for

country,” explains Ramírez. In her opinion, a large challenge

those waiting to have part of their skull repaired. Epóxicos

for all startups in the sector is their inability to sell a product

para la Salud (EPSalud), a Mexican startup that manufactures

without COFEPRIS approval, which takes up to a year to

Masi-Epoxi, an affordable bone substitute for cranial and

acquire. “To finance ourselves through the approval process,

vertebral protheses, hopes this product will bring relief to

EPSalud developed a parallel line for the import and sale of

these patients. “There are many individuals in Mexico who

urology catheters.”

have required a cranioplasty for many years but have been unable to afford it. Furthermore, there are approximately

According to Ramírez, innovation for healthcare in

22,000 new cases ever year,” says Karina Ramírez, EPSalud’s

Mexico faces two major obstacles. The first is regulatory.

Administrative Director.

“COFEPRIS is still a young organization so it does not yet have the appropriate measures to tackle innovative projects

Cranioplasty refers to the surgical repair of a defect on

developed in the country. That leads to a smaller number

the skull. If the missing part of the cranium is unavailable,

of startups willing to develop these products, which in turn

a substitute made of metal, synthetic bone or acrylic can

eliminates COFEPRIS’ need and opportunity to update its

be used. Masi-Epoxi, a patented product that is awaiting

processes.” The second hurdle is the lack of investment

COFEPRIS approval for commercialization, is meant to be an

funds. “Most local funds work with Big Data solutions and

affordable option for these patients. “The cost of Masi-Epoxi

other technologies, but they are reluctant to fund projects

is similar to that of other metal prostheses. On average, both

in healthcare because they are fully aware that the recipient

the metal plate and Masi-Epoxi cost MX$15,000, but with

will not produce sales for an entire year.”

a metal plate it is necessary to also acquire four screws or more, the appropriate tools to cut the prothesis depending on the type of lesion, imaging studies and all necessary accessories to place the prothesis. Altogether, the cost of these add-ons runs the price of the surgery with a metal plate up to MX$150,000. Masi-Epoxi does not need any other

Approximately 22,000 cranioplasties are needed every year

accessories to fix the prothesis to the bone.” The company’s long-term plan is to acquire FDA approval Masi-Epoxi, expected to launch in late 2018, is the formulation

to export to the US, while also entering the basic lists of

of an epoxy resin, several minerals and accelerators that

Mexico's public institutions, including the General Health

allow EPSalud to modulate the hardening process. “Masi-

Council, IMSS, ISSSTE and every hospital the company hopes

Epoxi’s main advantage lays in its adhesive properties, which

to sell to. “Since this process can take up to six years, we are

eliminate the need to use screws, adhesives or cements.

planning to work with the government through a different

Unlike other substitutes, Masi-Epoxi strengthens over time

strategy that involves the generation of small clinics that

while other materials become loose or gradually crack,”

perform this surgery with the support of public institutions.

says Ramírez.

This strategy will also allow us to bring the surgery closer to patients who have been left waiting on the surgery backlog.”

EPSalud has positive expectations for Masi-Epoxi and the benefits for patients but bringing it to market has been an

EPSalud’s ambitious plans will start with the commercial

arduous process. “The Mexican market for medical devices

launch of Masi-Epoxi. “We are now 90 percent ready to

is extremely complex. COFEPRIS guidelines are long and

launch the product,” Ramírez says.

119

| INSIGHT

STAND FIRM IN THE MARKET GERMÁN GARCÍA Director General of Smith & Nephew Mexico

120

Mexico is among the Top 10 manufacturers of medical

competing with entirely different dressings that come at

devices, but the country has been delayed in accessing

lower prices and are less effective.”

these same products, says Germán García, Director General of Smith & Nephew Mexico, a medical devices company that

Barriers to innovative devices not only impact patients, but

manufactures joint replacement systems for knees, hips and

also the healthcare system itself. “While these products are

shoulders and products for advanced wound management.

often thought to be more expensive, a cost-benefit analysis reveals that innovative medical devices act faster and reduce

“Mexico is the seventh-largest manufacturer of medical

infections.” To address these barriers to access, Smith &

devices in the world. Medical devices companies see

Nephew has developed a division for emerging markets that

significant potential in Mexico but are often stumped by their

targets the introduction of less expensive products.

low penetration. The Mexican market for medical devices, in terms of use, is growing at a less than 10 percent rate, much

Still, García sees a positive future for the medical devices

slower than expected. This phenomenon is caused by the lack

industry thanks to joint efforts by the industry and

of access to innovative products, as it is extremely difficult to

government. “The Ministry of Economy wants to prioritize

enter the basic lists of public institutions.”

the segment in the same way as tourism and the automotive

“

In terms of use, the Mexican market for medical devices is growing at a less than 10 percent rate, much slower than expected”

sector,” says García. This strategy, he continues, would facilitate the country’s international promotional efforts. “Costa Rica is competing with Mexico in the manufacture of medical devices. Although the Central American country is smaller, it has done great promotional work and has attracted a large number of companies to its shores. We have to sell Mexico’s manufacturing capabilities and advantages, including its workforce and free trade agreements, which has not been done successfully so far.”

This complex system makes innovative medical devices

Smith & Nephew also sees a positive future for itself in

unavailable to most of the population as public health

Mexico, says García. “Our goal is to grow annually by 20

institutions do not finance them and only 7 percent of the

percent in sales, while our compound annual growth for the

population has access to private insurance. “Mexico has

past few years has been 16 percent. The company’s objective

one of the lowest penetrations of medical devices in the

is to continue growing at this rate through tenders with the

OECD and Latin America,” says García. This barrier is also

public sector and we are increasing our market penetration

felt by medical devices manufacturers, which feel blocked

in some regions.”

from accessing Mexico’s largest market. “Public health institutions acquire 80 percent of all medical devices in

In 2018, Smith & Nephew will introduce a new version of

terms of value, while the rest is acquired by the private

the ANTHEM Total Knee System, this time with a stabilized

sector. Public institutions, however, do not take into account

support that is used when the knee ligaments are not

the benefits of innovation when deciding what products to

removed. The road ahead might be challenging, but García

acquire.” García points to the example of Smith & Nephew’s

explains that efforts to promote and strengthen the sector

Acticoat, a patented dressing for wound treatment with

must continue. “Mexico is extremely behind in market

silver particles for the treatment of burns. “IMSS’ basic

penetration and technology for medical devices and must

list does not have a classification for this type of product

work toward increasing access to these devices to become

and creating a new category would take years. We are

more competitive.”

INSIGHT |

NEW STRATEGY FOR FUNDING, PROVIDING PROSTHETICS FRANCISCO UGARTECHEA Director General of Ottobock Mexico

As the number of amputees grows, the gap between

to its office will not place the company in direct competition

those who require a prosthesis and those who receive one

with other prosthetists. “We will not compete with prosthetists;

is widening, mainly because public institutions lack the

we will help the patient understand what Ottobock can do

necessary funding. Francisco Ugartechea, Director General

for them. We are also carefully entering hospitals to approach

of Ottobock Mexico, is implementing a new strategy not

patients before amputations are performed. The amputation

only to reduce this gap, but to introduce higher-technology

of a limb is a great physical and emotional loss so we want to

prosthetics for those who need them. Ugartechea cites the country’s growing number of diabetics for the increased rate of amputations. “There is not enough information for doctors to help patients reduce their glucose levels. For this reason, when a patient loses a foot due to diabetes, it is likely that he will lose the other in a few years. About 35 percent of diabetics need an amputation and about 80 percent of those amputations are performed by the public sector.” Since most of these patients receive attention in the budget-strapped public sector, a large number of them cannot acquire a prothesis. According to Ugartechea, 70 percent of

“

support the patient even before surgery.”

About 35 percent of diabetics need an amputation and about 80 percent of those amputations are performed by the public sector”

all amputation cases are of lower limbs and the remaining 30 percent of upper limbs.

Prothesis have widely different price points depending on the technology and the patient’s needs. “While some prosthetists

Ottobock participates in tenders from the public sector,

recommend high-tech products, the specifications of the

mostly for Integral Family Development (DIF) units and the

prosthesis must match the specific needs of the patient.

Health Regulatory Commission (CRES), but these institutions

Sometimes the best combination is much less expensive,”

often face severe budget restrictions that affect the service

Ugartechea says. Ottobock also supports patients with

they provide. “Many DIFs in remote locations do not have

financing schemes. “Some may think that Ottobock is the

even a single prosthetist,” says Ugartechea. The company

most expensive option, but we have products for every

found itself needing to change the way it addressed these

budget,” he adds. Ottobock wants to introduce a midlevel

patients in order to provide them with prosthetics. “This year,

product that has more technology but at a reasonable price.

we will focus on indirect patient care by providing doctors with equipment that will allow them to take measurements

Ottobock Mexico closed 2017 with MX$65 million in sales and

and send them to us, so we can work remotely. We send

the company aims to raise that number to MX$90 million

them test sockets, they send us their feedback and we send

this year, explains Ugartechea. In 2018, the company plans

the final socket and prothesis.” Previously, Ottobock worked

to grow its orthosis division, mostly for neurological, trauma,

with prosthetists. However, this approach created a barrier

post-surgery and rehabilitation purposes. “The market for

between the company and the patient and did not translate

orthosis products is five times bigger than that of prothesis,”

into benefits for the latter. “Getting closer to the patient allows

says Ugartechea, “but there is much more competition. While

us to gain better knowledge of their needs,” Ugartechea says.

we might not be too competitive in the commodities division as we compete with national and Chinese products, we offer

To make these changes, Ottobock began performing medical

one-of-a-kind products like Malleo TriStep.” This product is

evaluations at its installations with the support of two

for patients who suffer a bone fracture and lose muscle tone

prosthetists employed by the company. But bringing patients

due to immobilization of the limb.

121

| VIEW FROM THE TOP

TECHNOLOGY OFFERS MANY OPPORTUNITIES FOR PHARMACIES GUILLERMO MARTORELL President of Grupo RFP

believes that the inclusion of technological tools in its

(Grupo RFP) mentioned that it would create an exclusive

operations can be the key to strengthening areas such as

generic brand. Where does this goal stand?

pharmacovigilance, fraud-risk reduction, better traceability

A: Grupo RFP is working to promote an exclusive line of

of medicines and easier communication with laboratories,

generics throughout the group that will be positioned

distributors, and suppliers.

as an alternative at our pharmacies. The group expects the generic line to become the main option for those

Q: What impact can the inclusion of technological tools

consumers who are looking for an equivalent product at

have on both Grupo RFP and the final customer?

a lower price. Grupo RFP wants to offer accessible and

A: Technology offers many opportunities for the industries

quality alternatives to those who cannot access patented

that adopt them. For pharmacies, technology means

medicines and we hope that the generic line satisfies 80

greater control over drugs and an improvement in

percent of general medicine consumption.

pharmacovigilance. The operational benefits are only one element because there are other benefits for the patient

Q: What collaborations does Grupo RFP have in the

and the pharmaceutical companies. Patients can improve

Mexican health sector and how do this support the

treatment adherence with easier access to medicine.

pharmaceutical industryâ&#x20AC;&#x2122;s development?

Technology also generates anonymous information that

A: Our pharmacies work in two ways: the first is counter

helps pharmaceutical companies create market intelligence

sales to the general public and the second is through

strategies. Technology can offer opportunities that were not

institutional sales. Grupo RFP wants to be more efficient

possible before. Grupo RFP wants to promote a relationship

through digital development. Traditionally, medical

between technology and pharmaceutical products by

prescriptions are very bureaucratic and have delayed

connecting all the agents in the value chain. Our platform

processes. We want to simplify this communication

will include a communication space between the laboratory,

between us and our customers through a digital platform

the distributor, the point of sale, the hospitals and the

that connects all players in the value chain. Grupo RFP

medical network until the medicine reaches the patient.

HOSPITAL BEDS PER 1 000 POPULATION HOSPITAL BEDS PER 1,000 PEOPLE 15 12 9 6

Source: OECD

OECD average

Turkey

Switzerland

Sweden

Spain

Portugal

Poland

New Zealand

Netherlands

Mexico

Korea

Japan

Italy

Ireland

Greece

Germany

France

Denmark

Chile

Canada

Czech Republic

Source: OECD

Belgium

Austria

Australia

122

Q: In 2017, Grupo Regional de Farmacias Productivas

This symbolizes a very important advance for the groupâ&#x20AC;&#x2122;s pharmacies because it opens a more competitive panorama. Q: What are the advantages and drawbacks of using technologies for pharmacies? A: One of the main limitations is the existing idea that physical stores could disappear because of technology. However, at Grupo RFP, we believe that technology can generate a positive change. This change will result in greater access to quality care at more accessible prices. The transformation of pharmacies democratizes access to health. Q: How does the patient-centric model impact pharmacies? A: Grupo RFP is in the process of changing its business model to deal more accurately with new consumers and the emerging needs of the market. The pharmacies that make up Grupo RFP are adopting a new approach that is compatible with the patient-centric model and are leaving behind the traditional approach of only selling medicine. The group wants to invest in the professionalization of pharmacy personnel to offer differentiated services such as nutrition and dermatology. We want to transform the way patients see pharmacies. Q: What are the three objectives that Grupo RFP wants to fulfill in 2018? A: In 2017, Grupo RFP grew inorganically thanks to the adhesion of other chains to the group. For 2018, the group plans to consolidate and strengthen the actions it has undertaken since last year. Grupo RFP wants to build a common operational model so that all the chains and pharmacies of the group offer a high-quality and reasonably priced standardized service. Q: In recent years, COFEPRIS has increased the rigor of pharmacovigilance. How can pharmacies be part of this initiative? A: Digitalization can help improve drug control. The main problems with pharmacovigilance are medicine theft, the falsification of medicines and the theft of prescription drugs. Including technology in the pharmacovigilance process can increase the traceability of medicines. Through these mechanisms, pharmacies can guarantee the products that arrive to a patientâ&#x20AC;&#x2122;s hands are original, safe, accessible and quality medicines. Grupo RFPâ&#x20AC;&#x2122;s platform plans to use technology to validate prescriptions and medications and to analyze the traceability of the medications purchased by the group.

Grupo Regional de Farmacias Productivas (Grupo RFP) has more than 600 pharmacies in cities such as Colima, Morelia, Guanajuato, Tabasco, Campeche, Veracruz, Puebla and Mexico City

123

| VIEW FROM THE TOP

NORTHERN PHARMACY CHAIN EXPANDS THROUGH MEXICO MACEDONIO GARZA Director General of Farmacias Benavides

124

Q: Farmacias Benavides increased its market participation

This system will also permit efficient distribution to future

by 7.22 percent in 2017. How are you positioned in

pharmacies. Our logistics chain has 12 cross-docking

the country?

centers distributed throughout the country that allow us

A: Farmacias Benavides turns 101 years old in 2018. The

to reach places such as Tijuana, Mexicali, Puerto Vallarta

company began operations in Monterrey and four years

and Veracruz.

ago was acquired by Walgreens Boots Alliance (WBA). As a member of WBA we are part of the leading pharmacy group

Farmacias Benavides has also invested in the consolidation

in the world. In Mexico, we now have 1,218 points of sale spread

of its drug distribution through the implementation of

across 24 states, from the north of the country to Mexico City.

processes to predict demand. This allows us to guarantee the supply of the necessary products, especially during

Q: When Farmacias Benavides turned 100, it established

seasons of high demand.

the goal of launching in 100 locations per year. What is the status of this plan?

Q: What role will online platforms play in Farmacias

A: We are keeping up with this goal by focusing on markets

Benavides’ future?

where we are already present but lack the necessary

A: Farmacias Benavides does not have an online sales

coverage, mainly in the central region of Mexico. After

platform, but we do have a call center that clients can

100 years, our clients recognize our expertise in the sector.

contact and order products to be sent to their homes.

Over that time, we have cultivated our connection with

We have a strong presence on social networks, including

our clients by training our employees and hiring more

Facebook, where we have over 443,000 followers. We have

when necessary. The most important part of a pharmacy

over 8,000 followers on Twitter and 7,000 on Instagram,

is for clients to feel safe with the service provided by

with 22,000 followers in LinkedIn and growing tremendously

its employees. Pharmacy customers also value the high

year by year. Furthermore, we have a platform that allows

availability of products and the industry invests heavily

us to interact with clients of our loyalty program, Beneficio

to maintain large inventories so prescriptions can be

Inteligente (Smart Benefit). This platform allows us to

filled. We have brought the target down a little bit mainly

interact with millions of clients and to offer them promotions

because we want to ensure the highest WBA standards

based on their purchasing profile.

are met when we open stores. Beyond digital, WBA has a track record of innovation, trust Q: How are you using technology to improve the efficiency

and care with deep roots in our communities. We have

of your distribution center, Centro de Eficiencia Logística?

been delivering healthcare through our pharmacy and store

A: Our Centro de Eficiencia Logística in Monterrey

networks and online for years. For instance, Walgreens fills

functions as a spearhead for our distribution strategy.

one prescription from a mobile device every second.

This single center has sufficient capacity to address our expansion needs for the next few years. We are planning to

WBA has pioneered healthcare innovations that have

install a new warehouse management system to improve

been in the news recently, mostly in the US. For example,

our distribution capabilities and to plan for future demand.

Boots in the UK has a service called “medisure” which provides patients with complex therapy needs with prepacked medicines delivered to their pharmacy or at

Farmacias Benavides , with over 100 years of experience, is one

home. In Norway with “Farmaka” and in The Netherlands

of the largest pharmacy chains in Mexico. The company was

with “SPITS” we have pioneered online pharmacy delivery

acquired by Walgreens Boots Alliance in 2014 and has 1,218

services, including pre-pack and unit dose dispensing

points of sale in 24 states

for years. From a customer point of view, Farmacias

Benavides uses a mix of digital platforms to interact with patients and customers successfully and our website lets Loyalty Program members check their balance, movements and discounts.

Farmacias Benavides' network consists of 624 doctor’s offices, 870 certified doctors

Q: How did the presence of doctors at the point of sale improve Farmacias Benavides market penetration?

Q: How is Farmacias Benavides strengthening its position

A: Our pharmacy doctors are the pillars of our business

among its national and international competitors?

goal to provide clients and patients integral solutions for

A: We will increase our offering of quality products and we

their health and well-being. These doctors give patients

will also differentiate ourselves through our own brands.

the opportunity to acquire fast, trustworthy and easy-to-

From October 2018, we will be introducing gradually

access care. We have built a network of 624 doctor’s offices

the generic brand Almus and its series of products to

with 870 certified doctors who are prepared to treat any

address the country’s most common diseases to have

primary medical need. We offer general attention, weight

full coverage by this date. This is a leading brand in the

and birth-control monitoring, blood pressure and glucose

European market and will provide significant benefits to

tests, injections and verification of health certificates and

our clients, including quality and safety. These products

we keep an electronic record of all the patients we receive.

include an innovative design and packaging that will help

The clinics provide only primary attention so if a patient

to minimize errors in dispensation and use. We are also

needs a more specialized service they are channeled to

launching the Farmacias Benavides brand for OTCs. While

the proper specialist.

new, this brand also adheres to WBA’s quality standards. We are now allying with local laboratories to investigate

Q: How is the incorporation of retail chains changing the

the possibility of manufacturing these products in

pharmaceutical market? What are Farmacias Benavides’

the country.

strategies to compete? A: We welcome competition, which stimulates our

We are introducing other international brands from

continuous improvement processes. The entrance of

our wellness division, most of which will be related

these players is a sign that the sector is professionalizing

to cosmetics and other dermatological products. The

in terms of primary attention and medicine supply.

products we will introduce will only be sold in Mexico at Farmacias Benavides.

Q: What other trends will affect pharmacies in the shortterm and how will Farmacias Benavides address these?

Q: What opportunities does Farmacias Benavides see in

A: We will remain vigilant against the diseases that are

the Mexican market?

increasingly prevalent in the country, such as obesity and

A: We have identified dermatology as an attractive

diabetes, to contribute to the improvement of people’s

business opportunity that can complement our existing

quality of life and to be prepared for future product

product offering for well-being. In this division, we are

requirements. Our priority is to consolidate as a provider

already supplying global brands such as No7, Soap&Glory,

of healthcare and wellbeing.

Tea Tree Witch, Hazel, Soltan and Botanics.

125

| VIEW FROM THE TOP

PHARMACY CHAIN EVOLVES QUICKLY TO KEEP UP WITH CHANGES ISAAC VALDIVIESO Director General of Farmacia San Pablo

126

Q: What are the main trends that Farmacia San Pablo is

A: Regulators have taken significant action to improve the

seeing in the market and with pharmacy suppliers?

manufacture of medications but regulations have been left

A: Although our core business remains the same, many

behind, especially for sales and distribution. Regulation

things have evolved, including technology, processes,

regarding pharmacies has lagged far behind and regulators

the market and regulations. Our personnel had to evolve

lack the necessary funds to properly address many issues.

alongside the sector through local and international

For instance, the sale of psychotropic medications is not

courses. We will continue changing and in the next five

applied correctly due to the lack of technology and the

years, we expect to incorporate many new products. New

adequate processes to control it.

distribution channels like Amazon are entering the market and leading us to reinvent ourselves. New trends have also

Q: How are retail stores changing the market? What is

emerged in terms of management, so we are working to

Farmacia San Pablo doing to adapt?

ensure that our employees are prepared. All pharmacy

A: It is necessary to divide the pharmaceutical market

chains are growing, which is intensifying the fight for the

between prescriptions and OTCs. In the case of OTCs,

best talent.

convenience stores like OXXO will have the opportunity to position themselves, but since the sale of prescription

Major suppliers are increasingly taking a larger role and

medications is highly controlled, convenience stores might

increasing their prices and often they do not provide

not be willing to undergo the complex processes necessary

sufficient products. Suppliers seem to be changing their

to sell them. Moreover, these stores could only have a limited

business model to one based on product rotation. This has

product offering as it would take a significant amount of

caused problems for pharmacies due to the wide variety

space to store. In the case of self-service stores like Walmart,

of products we offer. Laboratories have also shown gaps

the consumerâ&#x20AC;&#x2122;s approach is completely different from that

in supply in recent months.

of a pharmacy, since it involves more planned shopping and is a more time-consuming experience. Consumers are

Q: Is Farmacia San Pablo focusing more on retail or on its

unlikely to enter one of these stores just to buy a medicine

online platform?

because it would consume too much time compared to

A: The online market is still too young to reach definitive

visiting a pharmacy.

conclusions but the general consensus seems to be that neither will replace the other; the market is more likely to

Q: How is Farmacia San Pablo positioning itself among

differentiate depending on the product that is being sold.

pharmacy chains?

In the US, some analysts believe that the division between

A: All pharmacy chains have different market strategies.

online sales and the retail market will be 50-50, but Mexico

Some are focusing on the sale of medicines as commodities

is in an entirely different situation. There is no data with

and for that reason their model is shifting towards that of a

which to make a proper prediction.

self-service store. Others are focusing on immediate supply. Our pharmacy is a mixture of both and includes a broad

Q: In which areas should local regulation be changed to

portfolio of healthcare products in addition to medications.

strengthen pharmacies?

Farmacia San Pablo has 7,000 employees and 120 points of sale that are located in Mexico City, its metropolitan area, Toluca and Metepec. We are also incorporating doctors

Farmacia San Pablo is a Mexican pharmacy chain created

at the point of sale but only in a few pharmacies. Having

in 1936. It has 120 points of sale with 7,000 employees, one

doctors at the point of sale is not part of our core business

distribution center, two call centers and two corporate offices.

but clients are increasingly requesting them. For the rest

Farmacia San Pablo also has an online sales platform

of 2018, we will focus on sustainable growth.

VIEW FROM THE TOP |

DUAL CAPABILITIES HELP CARVE MARKET NICHE FRANCISCO CANTÚ Director General of Fármacos Proasse

Q: What niche does Fármacos Proasse occupy in the

Q: How does Fármacos Proasse ensure the safety of the

pharmaceutical market, both as a pharmacy and as a

medications it delivers?

distributor?

A: Medicine manufacturers continuously train us on

A: Fármacos Proasse is a family business created more

strategies and technologies to keep products under the

than 20 years ago. We distribute all kinds of medications,

cold chain and to ensure that products never leave certain

from those for the most common diseases to highly

temperature ranges. We also have agreements with our

specialized medicines. We have three pharmacies in

distributors to ensure that they handle our products with

Monterrey and provide storage and distribution for

the care that medications require. Most logistic companies

medications that our partners introduce into Mexico. We

have a specialized department for the management of

work directly with many laboratories to distribute their

medication and often prioritize medication deliveries to

products to the private sector, including insurers, hospitals,

minimize the transit times.

pharmacies and other distributors. Our mission is not to distribute medication, but to provide a service. We have

Q: How do you monitor the market to ensure you have

two offices in Monterrey and Guadalajara from where we

the necessary products in stock?

can deliver to all of Mexico through partnerships with the

A: We have close relationships with the procurement

main logistics operators.

departments at hospitals and insurance companies and with pharmacy doctors. Doctors and insurers like

Q: What are the main advantages companies obtain by

to communicate their needs to ensure that patients will

allying with Fármacos Proasse?

not have problems filling their prescriptions, which is a

A: One of our main advantages is our flexibility, which

common problem with highly specialized medicines.

allows us to cover our client’s needs in a more customized way. Larger distributors are often inflexible with credit

In the case of insurance companies, they get the

limits, payment dates and delivery times. At Fármacos

information directly from patients and pass the request

Proasse we work 24/7 and deliver even during Christmas.

to us. We are working with four insurance companies:

For instance, we supply a coagulant that may be required

Seguros GNP, Seguros Atlas, Sisnova and Chubb Seguros

during surgery to stop the loss of blood. If a doctor needs

Mexico and we continue looking for new partners in

it at 3 am, the hospital can contact us and we will deliver

this sector.

the product in 60 minutes. Q: What are the next steps in your business plans? Q: What trends is Fármacos Proasse seeing in the

A: We plan to continue consolidating our position among

Mexican market?

insurers and opening more pharmacies in Monterrey. We

A: Mexico’s population pyramid is gradually changing,

also plan to diversify our client base. At this point, we

with a growing number of older people who will require

have three points of sale and a distribution center in

specialized attention. We keep up-to-date on new drug

Monterrey. We are also analyzing other cities in Mexico

releases that may be of interest to our doctors and we

for opening branches, such as Mexico City, Saltillo,

are in direct contact with healthcare providers to track

Torreon, Mexicali, Tijuana and Merida.

drug trends. So far, we have perceived significant growth in biotechnological medicines and believe that as time goes by, medicine will become increasingly personalized.

Fármacos Proasse has three pharmacies and a distribution

Another market area that has grown significantly in the

center in Monterrey, where the company is headquartered. The

last years is generics, which are making many treatments

company also supplies medications to pharmacies, insurers

more affordable.

and hospitals throughout Mexico

127

| PROJECT SPOTLIGHT

ACF GROUPâ&#x20AC;&#x2122;S AQUAUF: HIGH-QUALITY DRINKING AND PROCESS WATER AQUAUF Ultrafiltration Membrane System is an advanced filtration process used by municipalities and industries alike to produce high-quality drinking and process water. AQUAUF can be used for surface water filtration, groundwater under the direct influence of surface water filtration, tertiary filtration of wastewater, reverse osmosis pretreatment and the processing of industrial water and municipal drinking water. 129

AQUAUFâ&#x20AC;&#x2122;s benefits include simplified installation, a compact footprint and height for reduced building size, improved virus and bacteria removal, reduced chemical consumption, easy expansion and minimal need for operator attention. Moreover, AQUAUF does not require the addition of a coagulant to achieve treated water turbidity requirements and provides extended membrane life. AQUAUF also reduces the cost of reverse osmosis and backwash volumes. How it works: Membrane filtration is the process of removing particulate matter through a physical barrier. Particles larger than the pore opening of the membrane barrier are retained on the membrane surface while clean water and dissolved components pass through. AQUAUF Ultrafiltration System is a low pressure, ultrafiltration membrane that removes particulate matter as small as individual viruses. AQUAUF utilizes robust, chemically-resistant, polysulfone hollow fibers housed in a uniquely configured pressurized module. The AltaFilter Ultrafiltration System has the most filtration surface area per module in the marketplace, providing a compact, economical solution for effective particulate removal. More filtration area per module allows the membrane system to be designed and operated at lower flux rates, extending membrane life. Unlike granular media filtration, the 0.01 micron ultrafiltration membrane does not require the addition of a coagulant for effective filtration. Since the system uses fewer chemicals and operates at moderate flux rates, cleaning frequencies are reduced. The AQUAUF Ultrafiltration System is supplied as a preengineered system with integrated piping, valves and controls, and has been successfully applied in potable water treatment, municipal wastewater filtration and industrial applications. Custom-engineered systems are available to meet unique needs.

| VIEW FROM THE TOP

INNOVATION AT THE SERVICE OF THE USER FRANCISCO MORALES Director of Healthcare Division at 3M

130

Q: How does 3M manage the introduction of new

to have healthy teeth. Oral health is important for the well-

technologies given associated costs?

being of a person because that is where the feeding and

A: When a medical device company wants to introduce its

digestive processes begin. In this sense, by promoting the

products to the market, it faces two possibilities: the public

use of dressings and our medical devices, 3M can help to

sector or the private sector. The process for the private

cultivate a prevention culture in health.

sector takes approximately six to 12 months to obtain a sanitary registration and start commercializing the product.

Q: How is 3M growing in the local market given current

In the public sector, it can take up to four years to introduce

economic conditions?

innovation and technologies because the process is highly

A: The medical devices market grows between 1 and 2

complex. 3Mâ&#x20AC;&#x2122;s approach is to generate value proposals that

percent per year and our goal is to grow three times more

have a balance of costs and benefits, so that it is easier for

than the market. 3M works hard to improve standards

the government to authorize the inclusion of our medical

and patient care practices because these practices also

devices in the basic list. For example, 3M has a product

improve the market. For example, in the food industry

called Bair Hugger, which is designed to keep the patient

there is a traditional method for testing whether pathogens

warm during surgery. In the long term, a product like this can

are present or not. The company has a technology called

save a considerable amount in medicine and for instruments

Pretrifilm that contains almost all microbial tests while

that are used to achieve normothermia standards. All our

saving time on quality tests. 3M wants to change traditional

products offer a reduction of infections at surgical sites

practices and innovate through new technologies.

of 25 percent, which in turn reduces hospital stays by 40 percent. This translates into lower health expenditures for

Q: What internal regulations need to be improved to

institutions.

facilitate the importation of medical devices? A: The registration for regulation processes for the import

Q: What role will technology play in the healthcare sector?

of medical devices has improved considerably. 3M has

A: 3M believes that innovation can improve lives. In the

observed a positive trend over the last couple of years,

field of medical devices, the important issues are prevention

so what is needed now is an alignment with international

and the diagnosis, treatment and rehabilitation of a patient.

standards to facilitate the validation of our regulation with

Therefore, the approach that must be taken with technology,

other countries. Also, the double process that exists in

innovation, digitalization and automation should target

Mexico generates obstacles to improving access to medical

prevention to reduce the cost of health.

devices in the public sector which makes a company to first enter the basic list and then repeat the process for

Q: How can a prevention approach be implemented by the

each institution. This causes delays and excludes some

medical devices sector?

technologies from the public sector.

A: Our division for oral health and care works with schools, the government and other institutions to promote the use

Q: How can 3M systems improve healthcare practices at

of tooth enamel that prevents the formation of cavities.

public institutions?

The idea is to educate people to prevent tooth decay and

A: Our technologies standardize and improve processes at health institutions. 3M believes that when processes are standardized, diagnoses and results become more constant.

3M , headquartered in the US, manufactures a diverse

We are planning to complete 16 product launches by the

variety of products for the health, automotive, energy and

end of 2018. Consistent launches are the key to our main

communications industries. The company is one of the worldâ&#x20AC;&#x2122;s

strategy of promoting the improvement of our products,

largest manufacturers of science and innovation products

but also to be more competitive.

VIEW FROM THE TOP |

PERSONALIZED SERVICES FOR A SOPHISTICATED CONSUMER José Mora CEO and Co-founder of Farmalisto Mexico and Colombia

José Crespo CEO of Farmalisto Mexico

Q: As a pharmacy, what have been the greatest lessons of

Q: What steps does Farmalisto take to increase customer

working with a digital business model?

safety and data security? How does this impact your

JC: Our business model is new for Mexico and Colombia,

e-commerce services?

which has resulted in specific challenges. The consumer is

JM: Normally, the first time the patient orders from us,

increasingly sophisticated and demanding in matters of

he pays us cash on delivery, but once the client knows

health, including pharmacies. At the same time, we see

and trusts us, they migrate to other payment methods

how the industry is changing to adapt to new technologies.

and consumption behaviors. We are very careful with

Today, we see how the consumer has an impact on the

patient information and we only use it to know the market,

processes of distribution, consumption and the manufacture

the treatment adherence and the position of a brand,

of medicines.

among others. The information we share is to provide pharmaceutical companies with data on consumer behavior

JM: Farmalisto offers a very accessible supply of products

and the characteristics related to their brand.

and shipping, which in complex cities such as Mexico City and Bogota become very attractive. At Farmalisto, the

JC: The health sector is very delicate and highly regulated,

consumer has the comfort, speed and security that he

in addition to the fact that the population that consumes the

needs to obtain his medications.

highest percentage of pharmaceutical products (the elderly) is not so digitally savvy. Our data is secure, encrypted and

Q: Why is Farmalisto the ideal ally for companies in the

separated in repositories outside of Mexico that are not

pharmaceutical industry looking to increase their sales

accessible from anywhere in the world except from our

through e-commerce?

offices. Everything we share is anonymous, depersonalized

JC: Farmalisto provides convenience. Farmalisto aftersales

or with explicit authorization from the patient.

services are valuable for the industry. Usually, pharmacies only provide the medication and leave the treatment in the

Q: What potential use do the data collected by your

patient’s hands.

platform have for the providers and partners with whom you work?

At Farmalisto, we provide follow-up, reminders and additional

JC: The information we collect helps us to understand trends

services to encourage the adoption of treatment. If the

in the market and even detect disease outbreaks. Our data

patient’s treatment requires a nurse, a doctor or a psychologist,

is useful for pharmaceutical companies to organize their

we send it to him or her so that the adherence is guaranteed.

demand planning and distribution points. Also, it opens

This benefits both the pharmacist and the patient.

the door for us to venture into new projects, such as telemedicine, Big Data and market pre-condition services.

JM: The lack of efficacy with pharmaceutical treatments is due to the lack of compliance to the treatment. Traditional

JM: Farmalisto can detect disease outbreaks because we

pharmacies are limited at improving adherence because

receive information in real time. We know when there is a

they only sell medicines and do not follow-up with the

spike in demand for certain medications in certain areas and

patient while pharmaceutical companies, by law, cannot

help pharmacies supply the necessary medications on time.

contact patients/customers. We are that key point between them. Farmalisto can sell the medications and at the same time follow up with the patient, so if we guarantee a

Farmalisto is the largest online pharmacy in Latin America. It

greater adherence to the treatment at the same time, we

has offices in Mexico and Colombia and offers medicines and

are guaranteeing that the pharmaceutical product is sold

products for the treatment of health and the improvement of

in the market.

the quality of life of patients

131

Surgery room with DrĂ¤ger Polaris 600 lamps and anesthesia machine Perseus A500

MEDICAL DEVICES

In 2017, Mexico climbed the rankings to become No. 8 in the world for exports of medical devices, No. 1 in Latin America and the top supplier to the US. PAPS devices are among the top products exported, and include surgery, dentistry and veterinary instruments, as well as articles and orthopedic devices to address

fractures. In RSD, the main exports include products related to mechanotherapy, massage, oxygen therapy, aerosol therapy and equipotent-ray devices. Ironically, Mexicoâ&#x20AC;&#x2122;s population still does not have access to many of these technologies. This situation has only worsened with cuts to the public health budget.

This chapter provides a comprehensive review of the RSD medical devices industry and information on the most prominent and important figures in the industry. It also includes interviews with national and international medical devices manufacturers and service-related companies, while discussing the progress made throughout the year and the challenges that lie ahead.

133

CHAPTER 6: MEDICAL DEVICES 136

ANALYSIS: Technology A Boon For Companies, Patients

138

VIEW FROM THE TOP: Alejandro Paolini, Siemens Healthineers for Mexico, Central

America and Caribbean

140

VIEW FROM THE TOP: Martín Ferrari, Dräger Mexico

142

VIEW FROM THE TOP: César Carrasco, Philips Mexico

144

TECHNOLOGY SPOTLIGHT: The Importance Of Being Blue And Not Yellow

146

VIEW FROM THE TOP: Fernando Oliveros, Medtronic

147

VIEW FROM THE TOP: Roger Brownrigg, Johnson & Johnson

148

VIEW FROM THE TOP: Rubén Gaitán, Alandra Medical

149

VIEW FROM THE TOP: Héctor Torres, Onko Solutions México

150

VIEW FROM THE TOP: Guillermo Ferrari, Eseotres

151

VIEW FROM THE TOP: Miguel Nieto, Carestream

152

VIEW FROM THE TOP: Lourens Verweij, Resonandina

153

VIEW FROM THE TOP: Gabriel Piña , Corporativo Promedica de México

Carlos Esquivel, Corporativo Promedica de México

154

TECHNOLOGY SPOTLIGHT: CIDETEQ Places Electrochemistry At Service Of Healthcare

156

VIEW FROM THE TOP: Patricia Nakagawa, Olympus America in Mexico

157

VIEW FROM THE TOP: Paulina Escobedo, B. Braun Medical

135

| ANALYSIS

TECHNOLOGY A BOON FOR COMPANIES, PATIENTS Digitalization and Industry 4.0 practices, including Big Data, are changing the shape of the medical devices segment, providing new opportunities for businesses and improving delivery of healthcare services for patients across the country, although many challenges remain With the reduction of the health budget under the

care for Mexicans in all regions, rural and urban, more

administration of Enrique Peña Nieto, medical devices

through the use of technology,” says Miguel Nieto,

companies have had to rethink their business models. The

General Manager and Cluster Business Manager Mexico

introduction of technologies to the public sector became

of Carestream.

more complex while the need to address the country’s 136

epidemiological transition and the aging population

Once Mexico integrates technological solutions and

through technology became increasingly important.

provides greater access to its population, the changes can be translated into benefits, with a total impact on

Given these conditions, medical devices companies are

the health system, since the impact of Industry 4.0 is

restructuring their portfolios and expanding into new digital

not just in Mexico, but global. “Before the application

offerings through new business models that can guarantee

of Industry 4.0 principles in healthcare, a doctor could

the greatest number of opportunities and reduce risks

only accumulate experience by caring for more patients;

for healthcare providers, says Alejandro Paolini, General

now, doctors have access to the experience of millions of

Manager of Siemens Healthineers Mesoamerica. “The

medical cases. Also, this technology is helping hospitals

benefits of innovation in the healthcare sector are already

outsource their management systems, allowing them to

known, especially in a transforming environment like we

devote fewer resources to management and focus on

are facing. Healthcare trends such as the increase of aging

providing care,” says César Carrasco, Country General

population, growing prevalence of chronic diseases, cost

Manager of Philips Mexico.

pressure and increased patient awareness have an impact on the sector. Siemens Healthineers understands that it is necessary to provide innovative solutions that allow our customers to succeed in this scenario.”

In 2016-17, Mexico enjoyed 25 percent demand growth for MRI machines In 2017, the medical devices sector in Latin America experienced strong growth in countries such as Brazil, Panama, Guatemala, Costa Rica, Colombia and Argentina. Mexico was also in this group. Compared to 2016, Mexico enjoyed demand growth of 24 percent for MRI machines,

HOSPITAL EQUIPMENT DEMAND GROWTH IN MEXICO FORECAST OF HOSPITAL EQUIPMENT GROWTH 2016-2017

IN LATIN AMERICA FROM 2016 TO 2017 Nuclear medicine systems

24%

Stereotactic mammography machines

>50%

MRI Machines

26%

Gamma Cameras 0

17% 10

Source: Global Health Intelligence Source: Global Health Intelligence

more than 50 percent for nuclear medicine systems, 26 percent for stereo-tactic mammography machines and 17

PROMOTING MODERNIZATION

percent for gamma cameras, according to Global Health

The medical devices under CANIFARMA’s RSD division

Intelligence.

represent companies that can generate biometrics through clinical tests and diagnostics, which are fundamental in

However, the medical devices segment, private industry

the pre and post-operative stages. This division also

and the government still have challenges to overcome.

includes authorized manufacturers and distributors of

“The private sector has challenges in modernization and

medical devices in Mexico; thus, a collaboration between

in using technology to offer specialized services and

the medical devices and public health sectors could result

more productive schemes. While in the public sector, it

in great benefits for the population, says Guillermo Ferrari,

is a priority to increase and improve access to medical

General Manager of Eseotres.

“Better coordination among health authorities is needed

more efficient; it gives them the ability to diagnose more

to promote the modernization of the health system. This

studies at the same time using specific imaging tools,”

coordination should begin with a homologation and a

says Ferrari. “These solutions make it possible to deliver

synchronization to modernize the country in a transversal

technology to hard-to-reach areas and help solve the

manner. Integrative technologies such as RIS (Radiology

shortage of radiologists in the country.”

Information System) and PACS (Picture Archiving and Communication System) already exist to integrate

The next step to ensuring a greater impact of technology

different providers into a single channel and to coordinate

in the health sector is to revolutionize the way in which

data systems,” he says.

talent is deployed in a digital environment and collaborate to generate high-potential changes, according to

A unified health system not only improves the provision

Deloitte. The best opportunities will come when the

of medical assistance, but also provides technological

new talent possesses the necessary technical, digital and

opportunities that impact the entire system. Before

engineering knowledge to provide solutions exclusively

working with Big Data, Mexico requires a centralized

designed for healthcare.

national database of medical imaging studies, which in

137

turn can impact the creation of patterns for clinical and

HAND-IN-HAND PARTICIPATION

diagnostic purposes, says Ferrari.

Medical devices and health technologies are also creating greater democratization of access to health

Such information would make it possible to determine

and improving patient care. According to a joint study

w h i c h a re a s re q u i re i m p rove m e n t s a n d w h i c h

between WHO, WIPO and the WTO, collaboration

technologies are more suitable to provide efficient

among health, intellectual property and trade agencies

solutions. In addition, digitalization and the introduction

is essential to improve access to medical and health

of technology must go hand in hand with the training

technologies for the population.

of doctors and patients to make these changes reality, says Carrasco.

The challenge for the future in matters of public health is, according to WHO, for countries to adopt sustainable

FILLING THE TALENT GAP

financing schemes, reliable health systems and efficient

Te c h n o l o g y a l s o re d e f i n e s t h e a cq u i s i t i o n a n d

regulations to guarantee access to innovative medicines

management of human talent. According to Tecnológico

and medical devices. Also, the government must ensure

of Monterrey, health institutions face three main problems:

that the way to obtain and manage patents, trademarks

unmet demand for medical specialists in radiology and

and commercial rights also guarantees access. How

imaging, a shortage of specialists and few educational

these rules are applied can determine the availability

institutions capable of providing the necessary training.

of medicines and the prices that patients pay, so it is vital that governments and the industry work together

Yet, medical devices companies see in this an opportunity

to produce the best conditions to provide access to

not a challenge. “Technology helps make radiologists

medicines and medical devices, according to the WTO.

UNIVERSITIES AND INSTITUTIONS THAT OFFER RADIOLOGY AND IMAGE EDUCATION IN MEXICO University or Institution

Type of Trainning

Tecnológico de Monterrey (ITESM)

Specialty in Radiology and Image

Universidad La Salle

Specialty in Radiology and Image

National Institute of Medical Sciences and Nutrition Salvador Zubirán

Specialization in Magnetic Resonance Diagnosis

Hospital General de México

Diploma in Advanced Ultrasound Diagnostics

Autonomous University of Guadalajara (UAG)

Radiology and Image

University of Guadalajara

Specialization in Radio-oncology

Tamaulipeca University

Baccalaureate Technician in Radiology

Autonomous University of Nuevo Leon (UANL)

Superior Technician in Diagnostic Imaging

Benemérita Autonomous University of Puebla

Specialty in Radiology and Image

Autonomous University of Coahuila

Specialty in Radio-diagnostics

Autonomous Mexico State University

Specialization in Radiology

Source: Official website from the mentioned universities and institutions.

| VIEW FROM THE TOP

INNOVATION: THE SHORTEST PATH TO EXCELLENCE ALEJANDRO PAOLINI Director General of Siemens Healthineers for Mexico, Central America and Caribbean

138

Q: What concrete actions is Siemens Healthineers taking

A: Today, healthcare systems worldwide are struggling

to improve access in Mexico?

to succeed financially and provide high-quality care

A: Our main goal is to develop solutions that allow increased

while facing scarce resources and restricted government

healthcare access with top of the line technology. We are

budgets. As a result, we decided to restructure our

working in line with local and international associations and

portfolio, expanding into new enterprise and digital

chambers to improve healthcare access in Mexico. For example,

health offerings, along with new business models that

we closely collaborate with COFEPRIS, which is imperative to

maximize opportunities and minimize risk to healthcare

ensure that the entire regulatory and control processes are

providers. We are reorienting our products to make them

carried out as efficiently as possible so the population can have

even more attractive to the health sector, especially for

faster access to the latest innovations in healthcare.

emerging markets. The objective is to satisfy the needs of our customers in Mexico by offering the highest

More than 70 percent of the world´s population dies from noncommunicable diseases, such as heart diseases, diabetes and cancer

technology and the best services. Q: How does Siemens Healthineers work with the public sector to make prevention the main focus of the industry? A: Healthcare systems worldwide are adopting prevention models to improve their population’s health and reduce costs along the entire healthcare chain. Technology is an important ally when facing this challenge. Siemens Healthineers can play a key role in this change of trend,

Q: One of the main proposals of Siemens Healthineers

since our portfolio is focused on prevention, early

is innovation. What have been the main advances in this

detection and monitoring.

regard in Mexico? A: Mexico is one of the key countries for Siemens

More than 70 percent of the world´s population dies

Healthineers. We are the only healthcare company in the

from noncommunicable diseases, such as heart disease,

market that has a broad and comprehensive portfolio

diabetes and cancer. If diagnosed early, they can be

focused on solutions and services for imaging and

treated and monitored, increasing patients’ survival rates

laboratory diagnostics. We do not have a production

and reducing costs for the healthcare chain. This is the

plant in Mexico and the innovation technologies are

value of technology for healthcare.

basically developed in Germany and the US, but that does not prevent us from introducing and implementing new

Q: “Patients will be treated as consumers.” What impact

technological developments in this country. When we think

does this statement has on the activities of Siemens

about innovation, we think about solutions that provide

Healthineers?

clinical, operational and financial excellence. For instance,

A: This paradigm shift is happening at a macro level and

in Mexico we launched a new laboratory technology called

aims to empower the patient, who are more informed and

Atellica Solution. This is a revolutionary platform that

want to take an active role in the medical decision-making

addresses laboratory challenges using immunoassays and

process. They are also deciding how they want to receive

clinical chemistry analyzers that transform care delivery.

and seek healthcare services. Here in Mexico for instance, out-of-pocket expenses are really high compared to other

Q: The reduction of federal budgets is a constant of the

countries, which is why patients assume they participate

Mexican health industry. How has Siemens Healthineers

in a more direct way. At Siemens Healthineers, patient

adapted to this trend?

experience is one of the company’s main pillars.

139

Technology and digitalization are also transforming the

allow our customers to succeed in this scenario. We adapt

way we deliver healthcare. Hybrid rooms are one of these

our technological offer to market demand and we deploy

examples. This is a concept widely used in Europe and

the highest quality to ensure our customerÂ´s needs are

the US and it is becoming a global trend. Hybrid rooms

covered. That is all about valued based care.

are operating rooms equipped with latest-generation imaging equipment, such as magnetic resonance imaging,

Q: What are Siemens Healthineersâ&#x20AC;&#x2122; expectations for 2018?

tomography and angiography, which allows less invasive

A: Mexico and Brazil are the most important Latin

procedures, reducing patient trauma and hospitalization

American markets for Siemens Healthineers. We see

time. The Hospital General de MĂŠxico has been working

great potential since innovation is well-received in our

with our equipment in a hybrid room since 2016.

market. For five years, we have witnessed continuous sales growth in Mexico and in 2018 we hope to continue

Q: How are you convincing customers to choose

this performance. Although there is uncertainty in the

innovation and get the maximum impact for their

country, we believe that these factors will not change

investment?

the industry. There may be a slower growth rate at the

A: The benefits of innovation in the healthcare sector are

beginning, but not a decrease.

already known, especially in a transforming environment like we are facing. Healthcare trends such as the increase of aging population, growing prevalence of chronic diseases,

Siemens Healthineers i s the healthcare branch of the German

cost pressure and increased patient awareness have an

electronics giant. It is mostly known for its medical devices,

impact on the sector. Siemens Healthineers understands

which cover a wide range of therapeutic areas, with a focus on

that it is necessary to provide innovative solutions that

diagnostics, imaging and IT

| VIEW FROM THE TOP

INTEGRATING SYSTEMS A KEY STRATEGY TO REDUCE COST OF OWNERSHIP MARTÍN FERRARI Director General of Dräger Mexico

140

Q: Last year, you mentioned that you wanted to increase

2018, we installed our EMR program called Innovian

your focus on the private sector. What are the results of

and connected it to INCANET, INCan’s system for the

this approach?

management of demographical data. This system allows for

A: In 2017, we grew 35 percent in the private sector

the close monitoring of processing times and productivity

compared to 2016. We introduced a system for managing

in surgery and therapy rooms and relates that information

key accounts in the private sphere, reinforced our sales

to INCan’s patient data. Innovian will complement the

to the private system and introduced a modified version

existing medical data and use all compiled information to

of Microsoft’s Customer Relationship Management (CRM)

analyze which areas could be improved in terms of costs,

software that allowed us to improve aftersales. Today, we

which often are surgery and rehabilitation.

work with StarMédica, Grupo Dalinde and San Ángel Inn. We will continue betting on this sector and not just with

Q: What benefits will these technologies provide to doctors,

major hospital groups. Our goal is to target a second layer

hospitals and, eventually, healthcare systems?

of private hospitals, including the Consortium of Mexican

A: This technology will allow doctors to make faster and

Hospitals, which incorporates 41 midlevel facilities. This

more precise decisions, which is of utmost importance

group of hospitals wants to unify their systems and

to the patient because decisions during surgery must

acquisitions. Our strategy for 2022 will target midlevel

be quick. Our system will also allow doctors to instantly

private hospitals, of which there are over 500 in Mexico.

retrieve laboratory data and images during surgery. Furthermore, it will grant instant access to a patient’s

Dräger grew by 35 percent in private sector sales between 2016 and 2017

EMR to analyze previous surgeries or potential allergies so doctors can make informed decisions. During intensive therapy, the use of Innovian allows doctors to compile much more data in a more precise way. Due to the confidentiality of the data, cybersecurity is vital and will be one of Dräger’s main focuses during the next

Q: How is Dräger incorporating Internet of Things (IoT)

couple of years.

principles into its solutions? A: The core of our operations is our focus on the customer

Q: In which other hospitals is Dräger introducing this

and our ability to offer tailored solutions. To improve this

technology?

core, the company is getting faster. The CRM tool that we

A: We are installing these systems at Tec de Monterrey’s

launched incorporates several more elements related to

hospitals: Zambrano Hellion and Christus Muguerza. We are

client management, interaction and satisfaction. Our sales

also trying to introduce this technology to public hospitals, but

force is increasingly digital, which means that our salespeople

the acquisition processes of ISSSTE and IMSS do not provide

have more tools to help them perform more quickly and

for the introduction of software but, rather, the acquisition of

professionally. This also permits access to a greater amount

individual units at the lowest price.

of information that allows for better solutions. Additionally, we are working on order fulfillment and supply chain.

Q: How will you convince public institutions of the benefits resulting from integrated systems?

Q: Dräger has implemented data digitalization systems at

A: We are working closely with ISSSTE and IMSS, the latter of

several public institutions. How are these systems improving

which has showed more interest in these technologies. We also

healthcare practices at public institutions?

participate in their committees to analyze the technologies

A: Dräger’s systems compile information from our

they are interested in acquiring. Through our participation in

anesthesia, monitoring and ventilation equipment. In

these committees, we have convinced them to change a few

Dräger Evita Infinity V500 ventilator

old specifications in their basic lists but the programs of public

doctors so their clients are the patients themselves. For that

institutions are often dependent on political parties.

reason, hospitals that follow this business model are more interested in increasing their efficiency and therefore invest

Q: Considering the wide variety of hospitals in Mexico, how

in technology. Some hospitals in Mexico are implementing

does Dräger generate solutions that cover such needs?

this approach, such as Hospital Christus Muguerza and

A: The first step was to define the parameters of our key

StarMédica. Smaller hospitals want to improve their systems

account management system, which performed with 33 key

but their internal fragmentation gets in the way.

accounts in the premium segment. The midlevel hospitals were then subdivided in three different categories for which

Q: How feasible is it to change Mexican regulation to promote

specific solutions were developed. We are analyzing the

better practices in hospitals through the incorporation of

possibility of introducing certified, refurbished equipment

technology?

for some of these hospitals.

A: Mexico has extremely good regulations for hospitals but there is no monitoring whether hospitals comply with health

Q: What are the main advantages of the hospital rooms that

and safety standards. We are working closely with the Mexican

Dräger is building alongside B. Braun and Diphsa?

Society of Architects Specialized in Healthcare for the design

A: This collaboration has allowed us to introduce integrated

of modern hospitals. While the association has significant

perioperative solutions that cover a wider scope of clinical

experience in this area, there are still several gaps because it

processes. This collaboration was successful, for instance,

has not been that interested in developing its infrastructure

with Hospital Christus Muguerza, where Dräger coordinated

for biomedical engineering in clinics. We are also working

the introduction of medical devices and processes, Diphsa

with the association to lobby the government so regulations

sterilization products and B. Braun surgical equipment. We are

concerning hospital infrastructure are enforced.

planning similar projects for other private hospitals. Q: Which other products will Dräger introduce in the short Q: Why should these hospitals choose Dräger instead of

term for the Mexican market?

another technology provider?

A: We will renew our current portfolio, mainly for anesthesia

A: At Dräger, we provide comprehensive solutions for critical

and monitors for critical care. Beyond devices, in Mexico we

care and our goal is to continue being No. 1 in this area. Our

want to focus on the promotion of new business models for

pillars are anesthesia and respiration, but we also provide the

the private sector, which is now facing a disjunction as medical

complementary equipment for monitoring, gas supply and

technology is being renewed at a much faster pace. After five

lamps, as well as design critical care units.

to seven years, clients themselves feel it is time to refurbish. Thus, instead of buying new equipment or buying under a

Working in the Mexican market has posed several challenges

five-year loan, we retain the asset and provide it on a monthly

for the company, as buyers are too focused on purchasing

basis. We are migrating to this service business model in which

equipment and less on integrating solutions. In the private

we become partners with the company.

sector, we have seen a reluctance to invest in technology, as hospitals often only buy what is considered ‘good enough.’ The reason is that in Mexico, a hospital’s clients are not

Dräger , headquartered in Germany, is a multinational company

patients but doctors. Thus, the hospital’s internal structure

that manufactures devices for the medical, mining, oil and gas and

is fragmented and it is only willing to invest in basic,

chemical industries. In the healthcare sector, Dräger manufactures

functional equipment. In other countries, hospitals hire

ICU and neonatal monitoring devices and respiratory equipment

141

| VIEW FROM THE TOP

TECH GIANT PLACES HEALTHCARE CLOSEST TO ITS HEART CÉSAR CARRASCO Country General Manager of Philips Mexico

142

Q: Philips has undergone a change in priorities to focus

Q: How can Industry 4.0 improve healthcare practices and

on healthcare. How are you implementing these changes?

benefit both patients and care providers?

A: Philips underwent a transformation to prioritize healthcare

A: Industry 4.0 is causing a revolution. Collecting and

and for the past three years the company has focused only

processing all the information produced by medical

on this area. In 2017, Philips reclassified its stock market

equipment can provide numerous benefits for medical

listing from an industrial conglomerate to healthcare. That

professionals like providing distance consultations. Before

allowed us to invest globally in the industry, focusing on

the application of Industry 4.0 principles in healthcare, a

chronic and infectious diseases. This transformation has led

doctor could only accumulate experience by caring for

to a significant investment in development and acquisition

more patients; now, doctors have access to the experience

of new technology exclusively for healthcare. We are looking

of millions of medical cases. Also, this technology is helping

for a long-term partnership with hospitals that will allow us

hospitals outsource their management systems, allowing

to develop and implement new operating models.

them to devote fewer resources to management and focus on providing care.

In 2017, Philips reclassified its stock market listing from an industrial conglomerate to the healthcare industry

Q: How prepared is the Mexican healthcare sector to incorporate new technology? A: The Mexican healthcare sector has an accessibility problem. The National Development Plan 2013-2018 aims to improve access to care to Mexicans in a vulnerable position, so that both the public and the private sectors are increasingly willing to explore new financing models to provide healthcare. Public hospitals have also realized that

Q: What role will Philips play in Mexico’s healthcare

they need the support of the private sector, which has led

environment?

to the generation of public-private associations (PPAs). This

A: The change that Philips underwent allowed us to targets

initiative acknowledges the problems within healthcare and

Mexico’s needs since our goal is to improve technology

increases access to care.

and access to healthcare through interconnected systems, efficient models and intuitive technology. For instance,

We approach hospitals to identify their medical profile,

last year we launched a new hemodynamic room for

which varies from one facility to the next. With that

cardiovascular surgeries. This is an automated, intuitive

information, we determine which critical areas require

room that helps doctors perform procedures more quickly;

improvement and determine which technology better

for example, catheterization can be done in 50 percent

suits their needs. We provide hospitals with numerous

of the time in this room, allowing patients to undergo a

tools that allow them to increase their efficiency and reduce

cardiovascular procedure and return home on the same

expenses in several areas, making money available for

day. We are implementing this model with both public and

further investment. Digitalization allows the development

private hospitals.

of much faster processes with fewer interruptions but it is also necessary to increase the level of education of doctors and patients to make these business models profitable.

Philips Healthcare, part of giant Philips, develops products for cardiovascular care, monitoring, imaging, healthcare

Our market is 60 percent private sector, 40 percent public

informatics, clinical applications and diagnostics. Philips has

hospitals. Working with the public sector poses some

acquired many companies, including Agilent Healthcare

complications, since priorities change quickly and with

143

Philips EPIQ 7 maternity ultrasound

them the investment. Periods of strong investment in the

a 70 percent reduction in the amount of tissue needed for

public sector are often the beginning and end of six-year

diagnostics; it is also much faster and detects cancer lesions

government administrations.

up to 5mm. This technology is one of a kind and we do not expect to see anything similar in the market for at least

Q: What role will Philips play in generating a

five years. Hospital Ángeles Pedregal was the first health

prevention culture?

institution to receive that Pet CT in April 2018.

A: Philips is focused on the entire cycle of health, including changing habits, a healthy lifestyle, prevention, early diagnostics and adequate treatments. We want people to

DISTRIBUTION OF THE REGIONAL SUSTAINABLE DEVELOPMENT FUND 2 PHILIPS’ 1Q18 SALES BY DIVISION (percentage)

look at a hospital as the place where they receive treatment while recovering at home. By digitalizing all aspects of care with technological solutions and introducing new business models, hospitals can increase their efficiency and do more with less.

US$20.4 billion in sales

Q: What new products is Philips launching throughout 2018? A: By the end of 2018 we will have launched Azurion, an image-guided therapy platform; Prodiva, a magnetic resonance system; and a series of computer tomography

launched Pet CT, the only digital equipment for cancer

39%Mazapil Diagnosis & Treatment 2% Sahuaripa 11% 2% Morelos 18%Cananea Connected Care & Health Informatics 9% 7% Nacozari de Garcia 2% Eduardo Neri 2% Personal Health 2% Aquila 41%Fresnillo Other 5%

detection. This equipment has many advantages, including

4% Ocampo Source: Philips

systems called Access 16. Our division for Respiratory Care and Respiratory Drug Delivery (RDD) will launch a line of potable ventilators under the name Trilogy. Philips also

2% Alamos

4% Caborca

1% Chinipas

2% Sierra Mojada

47% other

Source: CGM, Ministry of Economy 1 With figures to March of 2015

| TECHNOLOGY SPOTLIGHT

144

THE IMPORTANCE OF BEING BLUE AND NOT YELLOW Dräger’s BiliLux Phototherapy Lamp is a new phototherapy system for the effective treatment of jaundice. Jaundice is a common phenomenon in premature babies and newborns who have a high level of bilirubin in the blood, causing a yellowing of their skin and increasing the risk of brain damage. Dräger’s commitment to the management of jaundice in neonatal care is reflected in the launch of its BiliLux Phototherapy Lamp. This equipment manages a spectral wavelength of 460-490nm and an irradiation of 30 to 85μW/ cm2/nm that allows bilirubin to be converted into a soluble substance that is easily evacuated by the patient’s body, avoiding any subsequent risk to the newborn. BiliLux also can handle different radiation angles and can distribute blue light throughout the baby’s entire body, which makes the phototherapy even more efficient. It has 20 blue lights that allow the administration of the therapy and two white lights for observation and to soften the blue light. Also, BiliLux has a radiometer that allows the user to constantly measure the intensity of the radiation and be completely sure that the baby’s skin is being treated properly.

BiliLux Phototherapy Lamp manages a spectral wavelength of 460-490nm The lamp is designed to perfectly integrate with the neonatal workplace, since it can be placed in the incubator’s canopy, in heat-therapy equipment, roof-supply routes or used with a car. The phototherapy lamp is compatible with clinical and hospital processes because it can be used to generate electronic documentation that provides information about the patient, treatments and quality control. In addition to the technology, BiliLux is designed with soft surfaces to facilitate cleaning and unlike other phototherapy equipment, it does not incorporate any ventilation inlet, which helps to prevent infection. The BiliLux LED-based phototherapy system provides superior quality with its customized treatments, electronic features and flexibility. It is revolutionizing the management of bilirubin by combining the three most important factors in phototherapy: spectrum with effective wavelength, high-radiation intensity and total coverage of the patient’s body.

145

| VIEW FROM THE TOP

146

IMPROVING PATIENT-CARE MODEL WITH TECH FERNANDO OLIVEROS Vice President and General Manager of Mexico at Medtronic Q: Beyond the well-being of the patient and caregiver, what potential do you see to transform healthcare in Mexico? A: Medtronic is a leader in the development of medical devices focused on diabetes, cardiovascular health and obesity. We have four approaches to the concept of access to healthcare. The first is the training of health workers in Mexico, because there is a large gap in the availability of human resources in the sector. The country also needs to improve its technological infrastructure because there are very few health institutes with high-end technology and coverage of various medical conditions. Also, the health sector requires a new financing model that allows growth in coverage, access and quality of health services. These three elements must be accompanied by an efficient operating model. Q: What makes Medtronicâ&#x20AC;&#x2122;s solution for treating diabetes unique? A: We know that Mexico has one of the lowest levels of diabetes control in the world but through our technology we can improve the treatment of this disease. Our solutions include an insulin-pump and glucose monitoring technologies for diabetes type I and II and we are looking for a way to connect these products with other solutions to provide greater quality of life for the patient. We can even join our technologies with others to create a project that provides a complete impact on the patientâ&#x20AC;&#x2122;s quality of life.

Medtronic is a global technology company. It is a leader in the development of medical devices focused on diabetes, cardiovascular health and obesity. It has been in Mexico for more than 40 years and it is present in more than 140 countries

VIEW FROM THE TOP |

STATE-OF-THE-ART TECHNOLOGY CAN BE ACCESSIBLE ROGER BROWNRIGG General Manager of Johnson & Johnson

Q: One of Johnson & Johnson’s objectives is to offer

acquire the desired clinical results in terms of patient`s

competitive prices. How do you adapt to Mexico’s

quality of life improvement and satisfaction.

unequal economy?

147

A: For Johnson & Johnson, improving access to care is

Q: How does Johnson & Johnson adapt its technology to

of the utmost importance, especially considering that as

emerging economies such as Mexico?

products become more technologically advanced they

A: We do not have products designed exclusively for

also become more expensive to produce. Our goal is for

developing economies. Even considering the wide

all Mexicans to have access to our products, no matter

differences that can be seen across continents or within

their socioeconomic class. Although the country says that

the same country, it is necessary to prioritize the patient’s

95 percent of Mexicans have access to healthcare, this is

safety. We do not sell old equipment but offer different

not the case for all conditions and medicines. Furthermore,

solutions. For instance, an appendectomy can be done

most medical services are concentrated in Mexico City,

through laparoscopic surgery or through open surgery. In

Jalisco and Monterrey. Many other regions throughout the

this case the result is the same, although recovery takes

country do not have ready access to care.

three days in the case of a laparoscopy and 30 days after open surgery. Every health system must make a decision

Q: Considering the budget cuts in the public sector,

whether to spend on a more expensive treatment or on the

how do you divide your sales between the public and

cost effectiveness in regards to a patient’s recovery.

private spheres? A: We divide our sales 50-50. We have not been directly

Q: What are your strategies to improve access to care?

impacted by the cuts to the public sector since our services

A: We work with the Ministry of Health and the General

are aimed at surgery and the cuts were mainly allocated

Health Council to address the challenges Mexico faces to

to pharmaceutical products. Mexico is an extremely large

increase access to care. We are fully aware that no public

market for pharmaceuticals since doctors are much more

system has the capabilities to address every single disease

used to treating health problems with medications instead

that its citizens face, so it is necessary to develop innovative

of surgeries. This is due in part to the education that

solutions to provide care to a larger number of patients. We

doctors receive in schools and to the fact that the country’s

act as strategic partners for the public sector.

penetration of advanced surgical techniques has been slower than others such as Brazil, Chile, Colombia and Argentina.

Q: Which of Johnson & Johnson’s products are in highest demand?

Q: Considering what Johnson & Johnson invests in

A: Our Energy division is revolutionizing surgeries and

innovation, how does the company educate all players in

improving safety during the cut and coagulation process

the health sector on the advantages of your products?

for different tissues. One of my favorite products is a knee

A: A significant part of our investment both in Mexico and

replacement that has had a great reception from patients.

the world is directed toward surgeon training. Training a

We have another product for the management of arrythmias

doctor takes decades and sometimes the technology for

that performs a 3D mapping of the heart with minimal

which they were trained is obsolete when they finish their

invasion. We are also launching several orthopedics products.

education. For this reason, we invest a lot in professional training to ensure that doctors are up to date with technology. Considering the strict regulation for medical

Johnson & Johnson , headquartered in the US, produces

devices in Mexico, we have little input on the doctor’s final

medical devices, pharmaceuticals and consumer goods. The

decision on which device to acquire. For that reason, we

company has offices in 60 countries and exports to 175. Its

must ensure that we work alongside doctors to help them

medical devices division specializes in surgical products

| VIEW FROM THE TOP

PREVENTING A SHOCK TO THE SYSTEM RUBĂ&#x2030;N GAITĂ N Executive Director of Alandra Medical

148

Q: What is Alandra Medical doing to help improve

is that it requires frequent blood samples. Furthermore, it

standards of care?

takes significant time to build a measurable concentration

A: We work under the umbrella of Gerbera Capital.

of lactic acid in the blood stream.

In 2016, Alandra Medical made a couple of passive investments in two medical devices companies, one in

Q: What were the main challenges to develop Florence and

orthopedics and another related to in vitro diagnostics,

what are your long-term plans for the device?

both based in California. However, the company is mainly

A: The first challenge was to overcome the mistrust from

focused on the development of Florence, an impedance

developed countries on the reliability of equipment built

spectroscopy monitor, and its associated catheter Athena.

in developing countries. For that reason, it is necessary

This equipment will provide physicians with relevant

to present the clinical results and certifications to foreign

information on the status of the patient and help them

institutions that prove the equipment works as intended.

make better decisions regarding treatment. The device,

A couple of years ago, we planned to enter the UK market

meant to be used with critical patients, detects a series

but this strategy faced a handful of roadblocks since a

of electrical properties in the stomach tissue. Initially, it

change in regulations invalidated the data we had hoped

cost US$90 to be manufactured but we have entered

to use for the clinical trials. As a result, we are developing

into an alliance with a Swiss company that will allow us

new clinical trials for year 2018. We hope to start either

to manufacture the device for about US$20.

selling this technology or to have it transferred by late 2018.

Florence will detect the first signs of Multiple Organ Dysfunction Syndrome (MODS). MODS leads to heart

Our strategy is to begin sales in Europe, where it is easier

failure, which is associated with a threefold increase

to get approvals in comparison to the US. Our investors

in mortality at critical care units. Florence applies the

would also prefer that we commercialize the product in

principles of impedance spectroscopy to measure

Europe followed by the US before we start in Mexico.

electrical properties of the tissue, which convey

Our first point of contact has been the UK. Exporting

information on the presence of edema and necrosis. In

this product to the UK will help us to attract venture

animal trials, we were able to measure the presence of

capital to continue manufacturing the product and to

lactic acid up to 90 minutes before it was detected in the

expand our markets. In the medical devices industry, it is

blood stream. These results are highly encouraging and

more common to begin sales in Europe or the US before

the next step will be human studies.

launching in Latin America.

Q: What makes Florence more competitive than other

Alandra Medicalâ&#x20AC;&#x2122;s goal is to find another company to

methods for ischemia detection?

sell this technology as we do not plan to distribute it

A: Current technologies require a blood sample to

ourselves. The first step is to produce a success story

measure the level of lactic acid, a biomarker produced by

with Florence that will motivate investors and even our

the body when cells cannot get enough oxygen to meet

competitors. When investors see the potential, they

their metabolic demand. The problem with this technology

will be willing to enter the market. Once Florence is launched we will begin developing new projects. In the long-term, Alandra Medical wants to serve as a bridge

Alandra Medical is the medical branch of Gerbera Capital, a

between innovators and the world in terms of transferring

Mexican venture capital firm. It is developing Florence, a

technology. Another goal is to get Mexican investors, who

medical device for the detection of ischemia and shock that

tend to worry about long ROI periods, to bet on these

aims to prevent heart failure in critical patients

kinds of projects.

VIEW FROM THE TOP |

SHINING A LIGHT ON CERVICAL CANCER HÉCTOR TORRES CEO of Onko Solutions México

Q: How is Onko Solutions México changing the paradigms of

measures optical and electric signals in cervical tissue.

healthcare in Mexico?

We are the first and only distributor of Truscreen in the

A: In Mexico, over 5,000 women die every year of cervical

Americas.

149

cancer. The HPV virus, the main cause of this type of cancer, is known as a silent killer, as it presents no symptoms until the

While testing InstaPAP with physicians, we observed higher

cancer is in an advanced stage. However, this type of cancer

detection rates than with standard pap tests. Recently, we

is easy to treat and has a high remission rate when detected

also performed a series of clinical tests in Guadalajara and

early. Sadly, current tests have failed to properly detect cancer

Michoacan and we observed that out of 10 women with

until the later stages. It is important to create awareness that

cervical cancer, pap tests only detected three cancer cases

current tests like pap smear are obsolete.

while InstaPAP detected nine.

Onko Solutions México’s InstaPAP test is a new platform that

Q: How is Onko Solutions México expanding its presence

incorporates state-of-the-art technology backed by cloud

in the Mexican market?

access to deliver a faster and better test for cervical cancer.

A: The public healthcare sector performs approximately

This test provides an immediate result, empowering doctors to

50 percent of all pap tests, so we are interested in entering

offer follow-up care on the spot. The test is also less invasive

this sector. However, at this moment we are well-positioned

than a pap test because the latter entails scratching the

in the high-income segment, with presence in 16 states.

surface of the cervix.

Our primary market is gynecologists, but we are exploring alternatives. Onko Solutions México is also exploring the

Q: What is behind InstaPAP’s state-of-the-art technology?

possibility of incorporating into health centers located in

A: Once cells become cancerous, their shape and nucleus

multiple platforms such as pharmacies, subways, mobile

change, reflecting light in a different way. Our equipment

units. These last platforms are ideal for us as the equipment

measures how light is reflected in the tissue, which allows us to

can be used by general practitioners or nurses. We have

determine if cancer exists and its level of severity. Additionally,

performed more than 4,000 free tests across Mexico.

our device performs a series of electrical impulses to measure tissue density, providing a sensitivity of 92 percent.

Q: What are Onko Solution’s main objectives for 2018? A: Our short-term goal is to speed up the use of these

In addition to high efficacy, InstaPAP has the advantage

devices in Mexico and Latin America, so we are looking

of providing immediate results, allowing doctors to inform

at Colombia, Chile and Peru. Another target is to gain

patients. Initially, we hoped InstaPAP would be a product that

FDA certification. During early 2018, we will provide 20

women could acquire at pharmacies and use by themselves

free InstaPAP devices to gynecologists to acquire their

at home to then take the results to their doctors. However,

feedback on the equipment, which we will use to upgrade

although this initial plan was feasible, we discovered that

the platform, software and hardware. We plan to introduce

it would not be possible to implement this vision without

the device to the Mexican market by March 2018. The

gynecological approval. We switched our strategy and began

current disposable unit costs approximately MX$400 and

creating close relationships with doctors who would then trust

the new one will have a substantial cost reduction.

the technology and recommend the product. Q: How did Onko Solutions México develop the technology

Onko

behind InstaPAP?

commercializes Truscreen, a medical device for the detection

Solutions

México is

Mexican

startup

that

A: Onko Solutions México began operating in mid-2016

of cervical cancer, and developed Instapap, a less expensive

by importing Truscreen from Australia, a small wand that

version of Truscreen

| VIEW FROM THE TOP

BRINGING TECHNOLOGY CLOSER TO THE PUBLIC SECTOR GUILLERMO FERRARI General Manager of Eseotres

150

Q: What are the administrative and logistics advantages

to design an optimal solution in terms of software and

of using IT in imaging and radiology services?

hardware. Once a solution is operating, we carry out

A: An important benefit is the time optimization of

periodic reviews about the solutionâ&#x20AC;&#x2122;s technology to detect

radiologists and other health workers. This translates into

scalability needs; we also conduct follow-up personnel

service quality improvement by reducing the appointment

training to maintain the technological efficiency of the

deferral time and making diagnoses available sooner, which

services at health institutions.

also means an increase in productivity. The main benefit here is being able to diagnose and treat the patient at early

Q: The future of imaging and radiology is in the combination

stages to improve the chances of recovery and eliminate

of Big Data and technology. How do Eseotresâ&#x20AC;&#x2122; services and

the costs of clinical complications. At an institutional level,

products meet this need?

IT reduces unnecessary transfers to treat the patient at

A: First of all, to work with Big Data you need big data.

different levels of care and centralizes the capacity of

This implies having a national centralized database of

health workers, particularly that of radiologists which is a

homogeneous structure on medical imaging studies. This

scarce resource.

database must be at least centralized within an institution and, ideally, it should be cross-institutional in order to

Q: There is a shortage of medical radiologists in the

have a larger and richer database. In Mexico, the lack of

country. How does this situation impact Eseotres?

coordination and the fragmentation of the health system

A: More than a challenge, it represents an opportunity for

hinder its potential. Better coordination among health

Eseotres because our technology helps make radiologists

authorities is needed to promote the modernization of

more efficient; it gives them the ability to diagnose more

the health system. This coordination should begin with

studies at the same time using specific imaging tools, and

a homologation and eventually a synchronization to

also provides speech recognition so they can dictate their

modernize the country in a transversal manner. Integrative

reports much faster. Our platform allows a radiologist to

technologies such as RIS (Radiology Information System)

diagnose a study no matter where it was taken. These

and PACS (Picture Archiving and Communication System)

solutions make it possible to deliver technology to hard-

already exist to integrate different providers into a single

to-reach sites and help solve the shortage of radiologists in

channel and to coordinate data systems and Eseotres can

the country. The medical devices we offer can be used to

provide this solutions. We have seen cases of hospital

bring high-level clinical services to rural areas. This change

networks that have high technology but do not have the

may mean a greater democratization of access to health

resulting information centralized. This means that each

in Mexico.

hospital is a data silo, hindering any Big Data analysis possibilities.

Q: How does Eseotres provide a value-added service to health institutions?

Q: In which area do you expect to see the greatest growth

A: Even before a health institution acquires our solutions, it

opportunities?

receives our personalized service. We analyze the imaging

A: We see growth opportunities in both the public and

service workflow and its current and projected demand

private sectors. There is immense potential that can be tapped in the public sphere, as well as challenges. We believe that technology providers need to be part of the solution to

Eseotres is a leading Mexican engineering company that

those challenges by working together with the institutions.

provides diagnostic solutions with IT implementations. Its

In the private sector, we see an opportunity in small clinics,

experience extends to analog radiology, digital imaging and

which have seen digitalization as a technology that was out

dental equipment

of their league because of the costs involved.

VIEW FROM THE TOP |

BETTERING HEALTHCARE THROUGH INNOVATION IN IMAGING MIGUEL NIETO General Manager and Cluster Business Manager Mexico of Carestream

Q: What are Carestream’s main solutions for service and

technology. We also have a medical board that meets a

care networks in Mexico?

couple times a year with decision-makers and medical

A: Carestream offers a broad portfolio of imaging products

specialists from around the world.

and diagnostic solutions according to the size, budget and required technology, to the public and private sectors;

Q: How do the new image technologies developed at

from analog and digital X-ray printing, to mammographic

Carestream contribute to the accuracy of diagnosis and,

film, X-ray equipment, IT software and solutions that allow

therefore, to the efficiency of hospitals?

our customers to be more efficient and productive. As

A: Breast cancer, the leading cause of death among women

technology evolves, imaging systems will become more

in Mexico accounting for 25 percent of female cancer

digital. Our main priority is to guide our clients toward the

cases, can be a curable disease if detected on time. Our

right technology for them and their patients. In Mexico, the

mammograms provide a good image with the lowest

public sector accounts for 70 percent of health spending,

possible radiation, in addition to giving the doctor the

an investment that represents around 6.5 percent of the

best visibility to make their diagnosis. Another example is

country’s GDP. We must work with the public sector to

our Image Analytics Tool, which uses artificial intelligence.

have the opportunity to contribute to the health of the

The software includes up to 100,000 cases of a specific

country. We participate with different levels of technology

disease and when evaluating a patient’s test, it recognizes

in imaging at IMSS, ISSSTE, SEMAR, SEDENA, PEMEX

similar patterns through an algorithm that helps the doctor

and at local ministries. However, the private sector is also

perform diagnostics. Thanks to this system, the doctor is

important as it represents 30 percent of the market. We

aware of potential diseases the patient may have.

are actively working with the key participants of the private health sector in Mexico.

Our system works with any image, not just with those taken with a radiology device. Any type of image required

Q: In which areas are Carestream’s biggest opportunities

for a medical diagnosis can be stored and administered

in Mexico?

in our information systems. All these capabilities help the

A: There are many opportunities to make hospital networks

radiologist make a more complete diagnosis. Our system

more efficient, both in the public and private sectors. In the

allows patients, institutions and professionals to store their

public sector, it is a priority to increase and improve access

information in a more efficient way.

to medical care for Mexicans in all regions, rural and urban, more efficiently through the use of technology. The private

Q: How does Carestream’s specialty portfolio align with

sector has challenges in modernization and in efficiently

Mexico’s main health needs?

using technology to offer specialized services and more

A: We are helping to improve access to healthcare in remote

productive schemes. There are public institutions and

areas of the country. For example, if in areas like the mountains

private chains of diagnostic imaging centers and hospitals,

of Oaxaca there is an emergency and there is no radiologist

with many branches that must be managed uniformly and

available in that territory, a nurse can use our equipment to

efficiently to offer a consistent quality of service to their

take images of the patient, upload it to the cloud and a health

customers and patients.

center in Mexico City can diagnose remotely.

Q: How do Carestream products such as the Customer Success Network help improve user results?

Carestream is a medical and dental imaging solutions company

A: The Customer Success Network is a platform on which

with over 100 years of experience in radiology, IT, molecular

clients and users can share their experiences and learn

imaging systems for life science research and drug discovery. It

about their product application to enrich the use of our

is a subsidiary of Canada’s Onex Corporation

151

| VIEW FROM THE TOP

IMPROVING ACCESS THROUGH RENT LOURENS VERWEIJ Director Corporate Development at Resonandina

152

Q: What needs does Resonandina fill in Mexicoâ&#x20AC;&#x2122;s

A: Resonandina works across Latin America, where we

health sector?

collaborate with key industry stakeholders, ranging from

A: While working with the sector, we identified several

hospitals, diagnostic centers and medical specialists in

challenges that Mexicoâ&#x20AC;&#x2122;s health organizations face

the private and public sectors, to medical equipment

regarding high-end medical devices. These include difficulty

manufacturers and the local governmental organizations

of access due to factors such as high cost, limited patient

and foundations. While all these organizations are

flow, or construction restrictions, a need for temporary

focused on improving the industry standards, each has

access for specific interim projects and, thirdly, a need for

specific and different needs and Resonandina closely

geographical flexibility for multi-location usage. In these

works with each of them to develop a solution that best

cases, Resonandina offers innovative, accessible and flexible

fits their vision.

mobile imaging diagnostic units to hospitals, Diagnostic Centers and Medical Specialists in urban and rural areas.

As an international startup founded in the Netherlands

The concept of mobile units for medical usage is not new to

with an industry background from Mexico, Latin America

the industry. Resonandina innovated this model to meet the

and Europe, we have created an innovative, accessible and

needs from the healthcare providers in Mexico and focuses

flexible model with a great team of experts that closely

on offering integrated quality services: rental solutions

works with our clients to develop tailored plug-and-play

of mobile, relocatable and modular units, providing easy

solutions. Furthermore, we strongly focus on quality

access to high-end medical devices for a certain period and

assurance in all aspects of our company; this is reflected in

with no up-front investments.

our overall service and the high-quality mobile-units and medical devices we work with.

Q: What is the secret behind providing health services in remote locations and having a healthy financial operation?

Q: What is Resonandinaâ&#x20AC;&#x2122;s expected area of coverage

A: Two main obstacles when operating in the field of

in Mexico?

high-end medical devices are accessibility and usage. For

A: At Resonandina we like to focus on need driven solutions,

especially remote locations the training aspect and on-

where there is a large need in the periphery of Mexico City,

going support is of much value. We also see that regional

Monterrey and Guadalajara. In addition, we receive an

collaborations among venters, healthcare practitioners

increasing number of requests from the fast-growing states

and suppliers are key to ensure a better patient flow and a

of Queretaro and Puebla, as they are still developing their

healthier financial result. Also, innovative technologies and

healthcare infrastructure to keep up with the increasing

disruptive operational models help to create better and

population size. Naturally, further regions as Oaxaca,

more feasible health service, where remote locations are

Yucatan and Veracruz are on our road map.

rapidly catching up via innovative services from companies as Resonandina and alike.

Q: How important are partnerships for Resonandina and what benefits do both sides derive from that?

Q: Who are your main clients? How do you make the

A: From my personal background living in Mexico and

difference for them?

professional experience working in the industry across countries, we know that healthcare is very local, including in Mexico, where partnerships become key not only to enter

Resonandina rents high-end mobile diagnostic imaging

the market but also to ensure future success. Therefore, our

solutions in Latin America. It offers innovative, accessible and

local partners are of high importance and we collaborate

flexible solutions to hospitals, diagnostic centers and medical

with those who know the industry best, and can work with

specialists in urban and rural areas

us to deliver value to the health sector.

VIEW FROM THE TOP |

COMPLEMENT THE INTERNATIONAL OFFER WITH NATIONAL SOLUTIONS Gabriel Piña CEO of Corporativo Promedica de México

Carlos Esquivel COO of Corporativo Promedica de México

Q: Why is Corporativo Promedica de Mexico (CPM) the

hydraulic and electric beds whose differentiating factor

ideal provider for healthcare institutions looking to acquire

is price. We also create customized solutions that other

medical devices?

international brands do not offer.

GP: We are a 100 percent Mexican company that has been in the market for more than 20 years. CPM manufactures

Q: What added value do your products offer to improve the

and distributes Mexican brands such as Dimedic and

competitiveness of your customers?

Promedimex, as well as an extensive catalog of recognized

CE: Three years ago, CPM collaborated with CONACYT

European technology brands. We also offer technical

on a stimulus program for innovation and developed a

support and maintenance services. Beyond technology

hybrid-bed solution. If we consider that the average nurse

and quality, CPM offers the flexibility to adapt to the

in Mexico is short, the traditional bed represents a physical

needs of our customers and the Mexican market. We can

limitation when raising or lowering a bed. CPM devised

create customized solutions that foreign companies often

a hybrid bed that uses a pneumatic piston to raise and

cannot satisfy.

lower the bed. The hybrid bed is now marketed in both the public and private sectors and has been a success for

Q: How does CPM help increase access to medical technology

CPM. Innovation was only possible with the collaboration,

in remote or rural communities?

knowledge and creativity of CPM, the engineers of UNAM

CE: CPM assisted IMSS with the preparation of a medical kit

and the support of CONACYT.

for rural communities composed of international brands. The problem was that no international supplier of basic medical equipment had the medical kit with the necessary materials. These were only sold individually, which considerably increased the price. We put together a medical kit using Riester’s technology and our Mexican brands. IMSS was therefore able to obtain a fully equipped medical kit that

According to INEGI, the annual growth of new beds in Mexico is 1.2 percent at a national level

included international brands but also national technology at a fair price and high quality.

Q: In your promotional video for 2017, CPM touts its goal to internalize its brands. What markets do these

Q: What actions is CPM taking to fulfill its vision of

projects point to?

consolidating as a leader in the health sector?

GP: We have already started our internationalization project

GP: CPM’s knowledge about the Mexican market can make a

in the US. The US market has a wide variety of hospital beds

difference for new companies that are entering the country.

but what we are going to offer are highly differentiated, tailor-

Some Chinese businesses are selling cheaper beds to hospitals

made products. For example, we will provide a customized

but clients have had problems due to the simple fact that the

hyperbaric bed to an American company. In this case, CPM

size has not been adapted to Mexican ergonomics. CPM’s has

will design a bed that is pressure-resistant and which no other

the competitive advantage of its experience in the market,

provider has been able to offer. Our second project is the

but it also to have very competitive products against the

development of a customized bed for home care.

Chinese ones. We seek to complement our Mexican brands with international

Corporativo Promedica de México (CPM) is a medical equipment

products. CPM is the exclusive distributor in Mexico of Italian

company that manufactures two own brands: Dimedic and

brand Malvestio and we commercialize hospital beds for

Promedimex and works with international brands such as

intensive and intermediate care. CPM also offers hybrid,

Medela, Mindray, Malvestio, Riester, ADAM and UMFmedical

153

| TECHNOLOGY SPOTLIGHT

CIDETEQ PLACES ELECTROCHEMISTRY AT SERVICE OF HEALTHCARE The Center for Research and Technological Development in Electrochemistry (CIDETEQ) trains human capital with expertise in electrochemistry. It also leads several research projects in many areas, including:

EARLY DETECTION OF CERVICAL CANCER Researchers, led by Prof. Juan ManrĂquez, have developed an impedimetric methodology for detecting the bioelectric activity of oncogenic proteins released by the Human Papilloma Virus (HPV), making it possible to detect patients at high risk of developing cervical cancer (CaC). Results of the process, which has been introduced at the Queretaro IMSS hospital specialized in children and female ailments, showed that it helped doctors distinguish between healthy and ill patients and revealed particular levels of infection characterized by uncontrolled growth of cervical cells. Furthermore, early detection was technically viable, since the developed electrochemical methodology also allowed doctors to distinguish among infected patients in phases I, II and III, the last of which irreversibly leads to CaC.

CIDETEQ is also developing a strategy to address diabetes based on electrochemical principles of bio-specific recognition DEVELOPMENT OF NEW SENSORS AND MEDICINES BASED ON ELECTROCHEMICAL TECHNIQUES The research group led by Dr. Luis Antonio Ortiz is developing tests for the re-design of biologically active molecules, including anticancer and hypoglycemia. These tests are based on electrochemical and spectroscopic assays and use computational methods. The strategy consists of testing target molecules, such as DNA and specific proteins, or preparing substances that imitate the biological activity of enzymes necessary to regulate a disease. The group also is developing a strategy to address diabetes based on electrochemical principles of bio-specific recognition, supported by computational methods. Furthermore, the group has developed systems that reduce the manufacturing costs of reactive strips for monitoring blood glucose. All these projects are part of CONACYTâ&#x20AC;&#x2122;s network of Pharma Chemicals, of which the group is an active member.

155

| VIEW FROM THE TOP

SURGERY, ENDOSCOPY ARE MAIN TARGETS PATRICIA NAKAGAWA Managing Director at Olympus America in Mexico

156

Q: How would you describe Olympus’ participation in the

A: It depends on the hospital. Although some invest

endoscopic market in Mexico?

in cutting-edge technology to gain recognition, other

A: Olympus is internationally recognized for its flexible

hospitals have a different business model that focuses

endoscopic products, holding 70 percent of the global

more on business performance according to their patient

market. The company used to be the strongest brand in

population. Private hospitals are clearly segmented. For

Mexico for these products but it faced a market contraction

that reason, medical devices companies offer a diverse

between 2012 and 2014. We face strong competition in

portfolio of products, since it is not possible to have “one

Mexico, but we are working to recover our market share

size fits all” solution.

and position our surgical line. Q: Which products is Olympus launching for its surgical Q: What are the main challenges Olympus has identified in

line in the short-term?

the Mexican market?

A: Our star product is the Visera 4K UHD System that

A: We cannot be sure of our position in the market since

provides unparalleled resolution. Other devices capture

there is no reliable information. One of the challenges we

normal images and then convert them to 4K. Olympus

face in Mexico is the lack of reliable data on almost all

creates and transmits the image as 4K from the beginning,

aspects of healthcare. Another is the secondary market,

providing a significant improvement in resolution. This

often illegal, which is neither regulated nor monitored. During

equipment greatly reduces surgery times as the faster

2018, we have seen growth, albeit at a slower pace due to the

that doctors identify an issue, the faster they can address

uncertainty caused by the renegotiation of NAFTA, which

it. Reducing the time it takes to perform a surgery also

boosted dollar prices and slowed investment. Administrative

improves the patient’s recovery time. Another benefit is that

changes in Mexico are also always a cause of uncertainty.

hospitals can perform more surgeries. There are five Visera 4Ks in Mexico and we expect their sales to continue rising.

Q: How does Olympus convince clients in the public sector to acquire advanced technology?

We are also promoting our 3D Imaging Systems, which is

A: We do this through our product specialists as well as our

oriented to urologist and bariatric surgery. This equipment

direct sales force. Product specialists and sales executives

requires highly specialized doctors to use them and we

work directly with end users with the main objective of

expect this area to grow slowly as it takes more time to

understanding their needs and providing solutions. We do

position these devices.

not sell boxes we sell solutions. Besides, we demonstrate the clinical benefits of our technology and all our technological

Q: What are Olympus’ main priorities for 2018?

innovations with their own patients so they can evaluate

A: Olympus focus for 2018 is the ‘True to Life’ initiative.

first hand the real advantages of having cutting edge

Our way of doing business is a conscious sale, creating real

technology.

value to our customers, providing real solutions. Our priority is to help create awareness of major diseases through

Q: How willing are private hospitals to invest in state-of-

promoting how our technology can help diagnose and treat

the-art technology?

those diseases, educating in the safe use of our technology among our clients and on providing excellent professional education to doctors. The second priority is to capitalize

Olympus is a Japanese company founded in 1919 in Tokyo.

on our existing capabilities and infrastructure. Finally, we

It manufactures endoscopic, ultrasound and endotherapy

will work to improve our relationship with clients who felt

equipment, among other products, such as cameras and

abandoned when Olympus lost market share during the

industrial equipment

2012-2014 contraction.

VIEW FROM THE TOP |

THE PATH TO INTEGRAL HEALTHCARE PAULINA ESCOBEDO Director General of B. Braun Medical

Q: One of B. Braun Medical’s pillars since its founding has

consultancy of process optimization, through our offer that

been innovation. How does that translate to an added

integrates medicines, medical equipment and software, who

value for its customers?

take special care regarding the safety of the patient and the

A: B. Braun Medical has been operating in Mexico for around

health professionals who work within the hospital.

six years and is continuously bringing innovation to the market. The added value of our business is based on the

Q: How does the company ensure its most innovative

combination of more than 5,000 products and services

products are quickly adapted by hospitals and doctors?

that optimize our customers’ processes. Our combination

A: By developing unique solutions for each type of client,

of hardware and software guarantees the ability to monitor

mostly hospitals and ambulatory care clinics. We have

patients and their treatment. Our services contribute to

to understand the status quo of the client, the strategic

helping hospitals improve their healthcare outcomes.

priorities that a hospital has and based on this prepare an offer of our different solutions that add value to their

B. Braun Medical is highly focused on the patient-centric

operations. The challenge we have as B. Braun Medical is

approach, with strong emphasis in oncology, intensive

to accompany hospitals so they can adopt this innovation

care and outpatient therapies. It cooperates with doctors,

and turn it into improvements in their processes, with the

nurses, hospitals and other players in the health industry.

advantage that all the innovation we offer makes an excellent match with the evolution and transformation of healthcare

Q: COFEPRIS has indicated that one of the government’s

in the private and public sectors, which increasingly require

objectives is to enter alliances with other regulatory

more accurate measurement of patient outcomes.

agencies. What would B. Braun Medical like to see this regard?

Q: What percentage of your offer in Mexico goes to the

A: There have been significant changes aimed at

public and private sectors?

accelerating COFEPRIS’ processes and to deregulate

A: Our distribution is directed 60 percent to the public

certain products so that innovation reaches Mexico faster.

sector and 40 percent to the private sector. About 95

At a local level, there is a need for companies and regulatory

percent of the products we sell in Mexico are imported

authorities to increase the competitiveness of products.

from different parts of the world. We want to improve

In Mexico, there is a considerable amount of global and

access to international and premium products and services,

transnational companies that invest in the production

since patients are the same all over the world and require

and export of a wide variety of disposables, medical

quality care.

supplies and devices for the international market. National companies must improve their level of competitiveness and

For this, B. Braun develops new models of integral services

one way to achieve this is by raising COFEPRIS’ regulatory

for both sectors, which involve not only procedures in

requirements to meet international criteria. This will allow

surgeries but also procedures in other areas of the hospital,

Mexican companies to be more competitive and to expand.

moving from the sale of products to the sale of value-added services, considering that the government sector is ready

Q: How does B. Braun Medical ensure the effectiveness of

to integrate these innovative service models.

its products in the Mexican health system? A: All our products are of high quality, with the “Made in Germany” stamp, which provides a level of reliability to

B. Braun Medical is a 178-year-old German medical devices giant.

our customers. Therein lies the great added value of B.

It operates in four main areas: hospital care, out-patient, aesculap

Braun Medical, in that we become advisers and clinical-

and avitum, which are concentrated in two divisions in Mexico.

commercial partners to our clients, offering an integral

Medical encompasses the first two, Aesculap the latter two

157

A technician monitors a screen at a Novo Nordisk plant

MANUFACTURING &Â LOGISTICS

In recent years, the Mexican manufacturing sector has faced challenges that led

to a gradual reduction in the production of medications. While some fear that the situation may worsen due to international disagreements, patients will always need access to effective and quality medications. All industry players agree the sector must focus not only on maintaining production but also on ensuring the medicationâ&#x20AC;&#x2122;s integrity from the moment a product is manufactured to the moment it reaches the final user. To do so, it is necessary for the logistics supply chain to work closely with manufacturers and regulators. Moreover, distributors are increasingly aware of the challenges of transporting medications and are investing in infrastructure and training to ensure a safe trip to the point of sale.

Safe manufacturing and distribution of medications requires a multidisciplinary approach and investment. This chapter will analyze the main efforts being made to address these key issues through interviews with manufacturers, their suppliers and logistics operators in charge of delivering the products.

159

CHAPTER 7: MANUFACTURING & LOGISTICS 162

ANALYSIS: Pharma Manufacturing Faces Internal, External Challenges

164

INSIGHT: Aldo López, Mexican Association of Logistic Operators (AOLM)

165

VIEW FROM THE TOP: Sergio Naveda, Grupo ACF

166

VIEW FROM THE TOP: Pablo Escandón, Nadro

167

VIEW FROM THE TOP: José Alberto Peña, Marzam Healthcare Distribution

169

INSIGHT: Juvenal Becerra, UNEFARM

170

INSIGHT: Napoleón Gómez, World Courier

171

VIEW FROM THE TOP: Víctor Soto, Distribuidora Levic

172

INSIGHT: Enrique Garza, Capsugama,

173

VIEW FROM THE TOP: Carlos De La Fuente, Medistik

174

VIEW FROM THE TOP: Maarten Pouw, DSM Sinochem Pharmaceuticals

175

VIEW FROM THE TOP: Franklin Feller, Valtria Engineering

176

INSIGHT: Charles Beard, Tradimport

177

INSIGHT: Miguel Sánchez, Grupo IDEA

178

INSIGHT: Flora Piña, Uniparts

179

INSIGHT: José Aedo, SINGREM

180

TECHNOLOGY SPOTLIGHT: Continuous Investment in Technology Key to Success

182

VIEW FROM THE TOP: Alejandra Groff, GMMC

183

ROUNDTABLE: How Can the Supply Chain Work Together to Ensure the Integrity of Products?

184

INSIGHT: Pedro Cattori, TECROM Group

185

VIEW FROM THE TOP: Rodolfo Camargo, El Crisol

186

VIEW FROM THE TOP: Ingrid Ritter, UPS

187

VIEW FROM THE TOP: Eduardo Tapia, DHL

161

| ANALYSIS

PHARMA MANUFACTURING FACES INTERNAL, EXTERNAL CHALLENGES With a decline in manufacturing ready to turn around, Mexico has a number of advantages that could make it a production powerhouse, including its regulatory agency, a strong workforce and lower manufacturing costs. How it deals with logistics will also play a significant role in the sector’s future With the second-largest pharmaceutical market in Latin

pharmaceutical sector,” says Víctor Soto, Director General

America and an ideal location that makes it a good entry

of Distribuidora Levic.

point for the rest of the Americas, it is no surprise that INEGI states that there were 793 pharmaceutical

industry. According to ProMéxico, US$4.76 billion in FDI was

manufacturing facilities in the country in 2016 that were

directed at the pharmaceutical industry between 2010 and

responsible for US$1.38 billion in exports that year. At

2016. Mexico also hosts 20 of the 25 largest pharmaceutical

this point, the pharmaceutical manufacturing industry

companies in the world.

represents only 0.5 percent of GDP and 2.9 percent of the manufacturing GDP, according to ProMéxico. However,

However, the Mexican manufacturing sector has faced

the country has significant advantages that could make

some obstacles in the last few years that have resulted in a

it a pharmaceutical powerhouse, including its regulatory

decrease in production. In 2017, according to Global Insight,

agency, a strong workforce and lower manufacturing costs

Mexico’s manufacturing production stood at US$9.28

than neighboring countries. According to KPMG, a medicine

billion, which is a contraction of 3.73 percent compared to

that is manufactured in the US at a cost of US$100 can

the previous year. In fact, manufacturing production has

be produced in Mexico for only US$82.9. The National

been steadily decreasing since it peaked in 2013 at US$12.33

Association of Medication Manufacturers (ANAFAM) states

billion, according to INEGI. “During the past 10 years, we

that the industry generates 78,000 direct jobs and another

have seen a contraction in manufacturing by international

273,000 indirectly.

companies. As the international industry declined, the manufacture of generics grew at a highly accelerated pace,”

The work done by COFEPRIS, Mexico’s regulatory unit for

says Sergio Naveda, Director of Grupo ACF. Pharmaceutical

pharmaceuticals, has also been considered essential for the

production is expected to make a gradual turnaround and

development of the industry in Mexico and internationally.

reach US$11.26 billion by 2022, according to Global Insight.

“COFEPRIS has done significant work to facilitate pharmaceutical exports from Mexican companies by

Another problem that manufacturers had to manage in

acquiring WHO certificates. This places Mexican products at

recent years is compliance with all regulatory requirements.

higher standards of quality,” says Efrén Ocampo, President

“Regulators have sometimes acted as barriers to local

of Grupo Neolpharma.

manufacturers, causing a lack of full coverage for about 40 percent of the medicines Mexicans need. For

The US is Mexico’s largest trade partner and the rocky

that reason, 2017 was a complex year for the Mexican

situation between both countries has led to some uncertainty

MEXICAN PHARMACEUTICAL PRODUCTION (US$ billion)

2018*

11.3

9.4

2017

11.2

9.3

2016

10.8

9.6

2015

10.2

10.3

2011

11.5

2010

12.3

10.7

11.6

11.2

162

Mexico has an attractive pharmaceutical manufacturing

2020*

2021*

2022*

6 3 0

2012

2013

2014

*Projected by Global Insight. Source: INEGI and Global Insight

2019*

in the sector, especially for exports. “All industry members

Moreover, it predicts a 53 percent growth in the number

are closely following the modernization of NAFTA with full

of medicines that will require transportation under cold-

understanding of its complexity,” says Cristóbal Thompson,

chain conditions between 2016 and 2022. In comparison,

Executive Director of AMIIF. However, Mexico has many more

overall biopharma sales will grow only 29 percent during

trading choices beyond North America. “The industry is looking

that same period.

beyond NAFTA to other agreements such as the CPTPP,” says

depend less on American raw materials. We generally bring products from India, China and some European countries to

91.7

100

86.7

were to turn sour. “Compared to the automotive industry, we

GLOBAL BIOPHARMA LOGISTICS SPENDING (US$ billion)

82.3

the country an interesting bet, even if NAFTA negotiations

79.3

Thompson. Mexico’s FTAs with 46 other countries might make

diversify our supply source. Mexico generates high export flows toward South and Central America,” says Miguel Ángel Marín, CEO of Industrias Sintoquim.

60 40

MEXICAN PHARMACEUTICAL EXPORTS (US$ billion) 2 1.7

1.3

2016

Cold Chain 1.3

1.5

1.6

1.7

1.6

1.5

163

2018*

2020*

2022*

Non-cold-chain

*Projected. Source: Biopharma Cold Chain Sourcebook 9th edition.

The growth of cold-chain logistics is in turn leading carriers to invest in the generation of storage equipment and strategies that can ensure the integrity of the products

0.5

during the entire transportation chain. For instance, Napoleón Gómez, Country Manager of World Courier, 0

2010

2011

2012

2013

2014

2015

2016

Source: INEGI

points to the company’s product Cocoon to maintain packages at specific temperatures as a competitive advantage.

LOGISTICS: COLD IS HOT

Mexico, similarly to other Latin American emerging

Once manufactured, the delivery of medications also poses

economies, also faces specific challenges. In its latest

a challenge due to the delicate nature of the products, which

report Pain in the Chain Healthcare Survey, UPS identified

often need to be stored and transported under extremely

cost management and contingency planning as two areas

controlled conditions. “The pharmaceutical sector is

that require greater attention to improve logistics. The

among the industry’s most regulated. For this reason,

report addresses four central issues in the supply chain

logistics operators have invested significantly to ensure the

for the global health sector, which are product safety,

integrity and safety of these products by generating the

regulatory compliance, product damage and deterioration

right conditions for storage and transportation,” says Aldo

and management of storage and transportation costs.

López, President of the Mexican Association of Logistic

Latin American countries obtained the lowest scores in

Operators (AOLM).

product safety and the main problems identified were the lack of physical protection against theft, the presence

The aim of cold-chain management is to ensure the

of parallel trade and poor supply-chain visibility. López

correct handling of temperature sensitive pharmaceuticals

explains that third-party logistics (3PL) also face other

at all points in the distribution chain to ensure that the

problems in the country, such as poor road infrastructure

products do not lose effectiveness. The 9th edition of

and safety.

the Biopharma Cold Chain Sourcebook predicts that the number of products that will require cold-chain

The Mexican pharmaceutical industry has considerable

management will continue increasing globally at a

strengths that, if taken advantage of, could turn the

double-digit rate, caused in part by the rise of biological

country into a manufacturing center. However, the country

medicines. The book projects that 26.8 percent of 2018’s

has to face some internal and external challenges to

total pharmaceutical logistics costs were spent in the

achieve this in both the manufacturing and logistics of

transportation of medicines under cold-chain conditions.

pharmaceutical products.

| INSIGHT

ASSOCIATION TARGETS HIGH 3PL STANDARDS ALDO LÓPEZ President of The Mexican Association of Logistic Operators (AOLM)

164

Due to its nature, the pharmaceutical industry faces intense

in the healthcare sector due to the potential danger these

scrutiny, whether during the manufacturing phase or the

products represent. AOLM is “working closely with a branch

sale of the produced drugs. While transporting medications,

of the local police, C5, which has allowed us to prevent up to

carriers must guarantee compliance with best practices to

50 percent of cases of theft and recover about 25 percent

enter and remain in the market, says Aldo López, President

of stolen merchandize.”

of the Mexican Association of Logistic Operators (AOLM). “The pharmaceutical sector is among the industry’s most

AOLM also represents its members’ interests in Mexico to

regulated. For this reason, logistics operators have invested

international players as it belongs to the Latin American

significantly to ensure the integrity and safety of these

Logistics Association (ALALOG). “Latin American countries

products by generating the right conditions for storage

share many cultural characteristics, which greatly simplifies

and transportation. Operators have done this by creating

logistics operations across countries. The association

dedicated warehouses and providing specific training to

compiles and shares information on costs for operators

all their employees.”

and aims to homologate 3PL services, which has not yet been regulated in many countries in the region. Uruguay

AOLM, which turned 3 years old in 2017, has 13 members

and Argentina are far ahead in terms of regulations and we

including both national and international companies. It is

expect Mexico to follow these practices.”

extremely selective with new members, says López, as it focuses exclusively on logistics operators. The association

To further improve best practices in the 3PL sector, the

“represents between 60,000 and 80,000 workers and

organization has created three initiatives. The first is a

moves approximately 60 percent of all products in every

partnership with the Ministry of Labor to generate official

supermarket.”

regulations for the maximum load workers are allowed to carry. “We have conducted several studies alongside the

Among its many objectives, AOLM promotes adherence

Metropolitan Autonomous University (UAM), UNAM and

to best practices for the transport of medications, a

other specialized institutes to determine the maximum

strictly regulated area. “Logistics regulations have greatly

loads individuals may carry without hurting themselves.

improved to safeguard the integrity of medications and

This will set the bar for new regulations in this area.” The

their maintenance under cold-chain conditions. Safety

second is inclusion, as AOLM’s members are creating

standards are extremely high and products are kept in

programs to include workers with disabilities and to

controlled temperature conditions by any means necessary

ensure facilities accommodate their needs. Finally, the third

during transport,” says López. “The practice of transporting

initiative is to generate academic curricula in conjunction

medications in Mexico has changed greatly during the last

with universities to train 3PL professionals in Mexico, a

25 years. Before, drugs were treated like any other type

study program that did not exist before. “We generated

of cargo,” he says. “They could be transported alongside

the first program with Puebla Metropolitan University

livestock.”

and our goal is to spread this program to all metropolitan universities in Mexico.”

Today, specific conditions for the transport of medications have been imposed on the sector. Yet, while the segment

The association’s main goal, however, is always to represent

has become stricter, third-party logistics (3PL) operators

3PL operators in Mexico. Says López: “Even though the

still face many challenges that AOLM is working to address.

sector has many players, it did not have a unified voice. The

It works alongside the Mexican government to improve

association can now represent this sector to governmental

regulations, road infrastructure and safety. The latter is a

players, including COFEPRIS, the Ministry of Health and all

major concern for all 3PL companies but mainly for those

governmental offices.”

VIEW FROM THE TOP |

UNPARALLELED INTEGRATION PROVIDES WATER PURIFIER WITH KEY ADVANTAGE SERGIO NAVEDA Director of Grupo ACF

Q: How does Grupo ACF distinguish itself in the

products to incorporate the latest technologies in our water

pharmaceutical sector?

purifiers, such as electrodialysis reversal membranes (EDR),

A: Our most popular product in the pharmaceutical segment

electrodeionization (EDI) and ultrafiltration technology

is water purifiers, since all water used in the industry has

(UF). We are also investing in technology that facilitates

to be thoroughly purified. We provide key-in-hand projects

sustainability practices. For instance, the equipment used

that include design, engineering, installation, automation

for water purification in the pharmaceutical industry

and certification for all systems. Our systems are designed

normally uses reverse osmosis technology, which initially

to treat any water source for the manufacture of solids,

rejects 40 percent of the water. Standard equipment

liquids and injectables. We are leaders in the manufacture

processes 1,000L per hour, which means significant waste.

of water purifiers and we have built over 100 projects for

For that reason, we are developing technology to recover

the pharmaceutical industry. We have worked with national

and reuse that water, which would reduce water waste by

companies, including Pisa, Sanfer, Liomont and Grupo

up to 10 percent.

Neolpharma, but we also have worked with international companies, including Becton Dickinson, Pfizer, Sanofi,

Q: What are Grupo ACF’s competitive advantages?

Merck, AbbVie and Teva. Between 70 and 80 percent of

A: Our level of integration has almost no competition

our market is targeted to the pharmaceutical industry and

worldwide, as many companies buy or outsource many

the rest is divided between food, beverage and oil and gas.

of the processes we do in-house. One of our divisions specializes in water purification and our project division

Q: How have changes in the pharmaceutical segment

manages the complete integration of all processes,

influenced Grupo ACF’s growth?

including automation. We also have a division for equipment

A: During the last 10 years, we have seen a contraction

manufacturing. Another one of our strengths is our people

in manufacturing by international companies due to the

and we have also kept up-to-date on certifications, including

elimination of a former law that required all sellers in Mexico

ASME, ISO and GMP practices.

to have a local manufacturing plant. This led big pharma companies to eliminate many manufacturing plants. As the

Q: Hos is Grupo ACF’s using its strong position in Mexico

international industry declined, the manufacture of generics

to expand to other countries?

grew at a highly accelerated pace. Today, 70 percent of our

A: Grupo ACF covers Mexico and other countries such as

products are headed to Mexican companies and the rest to

Guatemala, El Salvador, Cuba and Colombia. We plan to

international businesses.

continue expanding through the Andes region, Peru, Costa Rica and Dominican Republic. Operating in countries further

As patents expire, local companies can start manufacturing

south becomes more complex, as Argentina has good

these products, which balances the market. This trend

development in these markets. Entering the US market is

will continue in the coming years as the market becomes

extremely complex, especially taking into account that it is a

globalized, while the increase in M&A in the sector reduces

very protectionist country and the recent trade negotiations.

the number of players. Throughout these years, Grupo ACF

Unfortunately the prestige of national products for this

has grown as Mexican companies replaced the facilities that

industry lacks acceptance in international markets.

once were operated by international manufacturers. Q: How is Grupo ACF incorporating the latest technology

Grupo ACF is a Mexican company founded in 1990 that

into its water purification systems?

designs key-in-hand equipment for production, storage and

A: We have patented Aquaflow, a water production tool for

distribution. The company specializes in the manufacture of

oral solids and liquids. We are constantly innovating in our

water purification systems for the pharmaceutical industry

165

| VIEW FROM THE TOP

EMPOWERING THE SUPPLY CHAIN PABLO ESCANDÓN President and CEO of Nadro

166

Q: What are Nadro’s priorities and what industry trends

Q: How does Nadro contribute to the improvement of

is it following?

customer services at pharmacies?

A: We are trying to highlight the importance of distribution

A: We offer a program called Invenadro that trains pharmacy

in the supply chain. In Mexico, the pharmaceutical sector

workers to manage inventory. There are 1,400 pharmacies

works with nearly 8,500 Stock Keeping Units (SKU) and

using it and we expect to reach 5,000 pharmacies soon.

about 22,000 locations. Only a specialized distributor

We also offer a simple purchasing mechanism that helps

like us considers the three complex challenges facing the

pharmacies make an efficient purchase.

sector today. The first is the collection of demands. We have an electronic system through which pharmacy chains

Q: How do you keep track of buying trends?

communicate their needs and we also have 1,200 brand

A: Big Data analysis allows us to identify the market’s

representatives who visit pharmacies and identify their

direction. Our inventory management system enables us

demands. Second is storage and inventory management.

to respond quickly to the changing needs in each region.

One of our main challenges is to have regional inventories

Every warehouse in Tijuana, Culiacan and Veracruz are

that can meet national demand. We have 14 distribution and

locally responding to the weather, the season and the

storage centers and a central warehouse that manages the

epidemiology, among other factors. One of the biggest

inventory for the rest. The third challenge is accountability.

advantages of our system is its ability to follow the market.

We help 22,000 pharmacies that lack financial capacity by providing credit at no cost.

Q: How does the company contribute to healthcare in Mexico?

Q: One of the major challenges pharmacies face is

A: We are making a significant investment in electronic

dispensing. How is Nadro addressing this?

systems and we are in the process of digitalization to offer

A: There is a relationship between the volume of operations

services with more precision and security in the shortest

at a pharmacy and the number of SKUs it must have to

possible time. We are specialized in drugs, but in general we

provide adequate service. We manage 8,500 SKUs and can

are specialized in distributing any product that a pharmacy

assist all types of pharmacies. We serve the entire pharmacy

needs. We are experiencing a growth in demand for OTCs,

segment in Mexico.

hygiene and beauty products, so we are expanding our presence in rural areas.

Q: What are the benefits of systems like Círculo de la Salud (Health Circle) for dispensing products?

The population is also aging quickly, which represents a

A: This program is a virtual system that offers solutions

change in the needs of those older than 60 years. This

for the responsible and ethical dispensation of products.

pushes us to open new business lines, like the distribution

We also have Círculo de la Salud Gold, a niche of 1,600

of medical devices. There is a great need for this service,

pharmacies that operate at a more sophisticated level. We

but we need an organizational structure for the provision

believe that this program has been a complete success

of devices.

because it respects the brands of manufacturers and helps workers understand that they are providing a public service.

Q: Are there enough companies able to meet the distribution and dispensation needs of pharmacies across the country?

Nadro is a Mexican logistics company focused on the

A: There are many small and medium-sized companies, but

distribution of drugs, health materials, personal hygiene and

they lack the ability to support the entire system. We are

beauty products to pharmacies. The company is the link

waiting for the government to open the market because

between producers, pharmacies and institutional clients

there have been budgets cuts.

VIEW FROM THE TOP |

ACCESS TO HEALTHCARE THROUGH INFORMATION JOSÉ ALBERTO PEÑA Director General of Marzam Healthcare Distribution

Q: What are the main challenges of distributing health-

Q: Marzam started with the distribution of pharmaceuticals

related products in Mexico?

(prescription and nonprescription), then wound care and

A: There are two major challenges in the Mexican health

health-related material. What is the next step?

industry: public investment and security. The Mexican health

A: Diversification is a core part of our strategy today and

system is fragmented, which causes inefficiencies. In terms

into the future. We are already working with medical

of infrastructure, we do not need much more; there should

devices and specialty products. These trends in the

be no problem with the available infrastructure. The issue is

healthcare market will become more important and we

how we are using this infrastructure. More needs to be done

want to be part of that evolution. In the future, Marzam’s

on prevention (vaccination) and on preventive education

sales will evolve and we will carefully evaluate all new areas

because it will be difficult to overcome the health problems

of opportunity. Today, we work with 200 providers in the

we have now if we do not change the habits of the new

healthcare industry.

generations. Q: Marzam has launched a new online platform that serves Another challenge is security. We have seen an increase in

more than 11,000 pharmacies. What impact has Marzam

the number of transportation thefts, something that we are

en línea had?

addressing with technology, since boosting the number of

A: We are working to get closer to our clients through new

security personnel does not eliminate the problem. We are

media. Marzam en línea allows independent pharmacies

focusing on technology to ensure our products are tracked

to maintain communication with Marzam, allowing them

correctly, taking preventive action and working closely with

to track their activities and to request any support they

the authorities of each state.

need. Customers can use this online platform to make their purchases, verify what they bought, view the status of their

Q: What are the hardest places to reach and how do you

orders and check their account status. In September 2017,

manage logistics to these areas?

the first month that Marzam en línea was available online,

A: The most complicated geographies are those furthest

10 percent of pharmacies had already registered.

away from urban areas. In Mexico, there are around 30,000 stores that dispense healthcare products (prescription or

Q: Given the company’s desire to become an integral

nonprescription goods), of which 16,000 are independent

health provider, what are your diversification plans?

pharmacies: Marzam visits 11,500 of these 16,000. Therefore,

A: Our private market business is divided between

we believe we are the company that reaches the largest

independent pharmacies, national chains and self-service

number of independent pharmacies. We also visit regional

stores. We are now focusing on private hospitals, a segment

pharmacies, pharmacy chains and self-service shops. In

in which we are also growing and see great potential. Today,

total, we visit close to 20,000 points of sale.

sales to the government sector represent 10 percent of Marzam’s sales, an area in which we also expect significant

Q: How do you guarantee the correct distribution at all

development given that 50 percent of Mexico’s healthcare

points of sale?

is paid by the government. We also want to expand the

A: Marzam has two great strengths: our infrastructure

number of consumer products that we manage.

reach and the information we generate. We are helping the pharmacies and the health industry by providing them with information, which helps decision-making regarding

Marzam is a Mexican company that began operations 83 years

purchasing and distribution. We all have the same goal

ago by distributing drugs to pharmacies in Mexico City. Now it

and if we provide the right service to the patient the rest

distributes healthcare products throughout the country. It is a

will find its way.

leader in specialized logistics solutions for human care

167

168

INSIGHT |

THE VALUE OF TRADITION IN A COMPETITIVE MARKET JUVENAL BECERRA President of UNEFARM

Mexico has a population of over 120 million in a territory

The alliance works directly with distributors such as Levic,

that covers 1.9 million km . Getting healthcare services in

Almacén de Drogas, Marzam and Nadro, negotiates with

smaller and remote locations can be a challenge but small

laboratories for independent or centralized purchases and

and medium-sized pharmacies are stepping up to the

also provides regulatory support to help pharmacies comply

challenge, says Juvenal Becerra, President of the National

with guidelines. “COFEPRIS has helped us with health

Union of Pharmaceutical Entrepreneurs (UNEFARM), an

promotion visits, which has allowed us to adopt the needed

independent alliance created in 2009 by 25 pharmaceutical

changes in each location. The authorities have always been

groups to represent the interests of independent pharmacies in the Mexican market. He points out that their traditional values allow them to continue competing in the market. “Independent pharmacies are operated by their owner so customer service is personalized and of very high quality. In addition, pharmacies of this size are located in places where chain pharmacies generally do not operate,” explains Becerra. Mexico’s pharmacy market is dominated by pharmacy chains. According to a study by Anáhuac University, the country has 21,000 points of sale belonging to independent pharmacies

“

very close to independent pharmacies,” says Becerra.

In 80 percent of the pharmacies that UNEFARM represents, seven out of 10 drugs sold are generic”

The association wants to establish a structure for affiliated

and 7,500 points of sale associated with pharmacy chains.

pharmacies and thus strengthen its presence in the market.

Yet, in terms of sales, independent pharmacies represent

Another goal is to empower small and medium-sized

16 percent of the private market, says Becerra. The market

pharmacies with a more solid commercial base backed by

is dominated by the bigger chains, which account for a 65

technology. It recently developed software that records

percent share, according to the Anáhuac study.

data from all affiliated companies to help each pharmacy understand market trends and price data. “This system

Independent pharmacies are also helping to increase access

will help us to homologate prices and in the future it will

to healthcare thanks to their extensive generic options. “In

allow us to operate as a pharmacy chain.” To execute this

80 percent of the pharmacies that UNEFARM represents,

plan, the association hopes to install the software in 3,000

seven out of 10 drugs sold are generic.” Becerra says these

pharmacies in the next two years. Afterward, it hopes to

types of medicines have enjoyed exponential growth

establish a name and a brand.

because the public has recognized their effectiveness, in addition to the purchasing power of the population and

Besides software, independent pharmacies are adopting

the efforts of COFEPRIS. “Between 65 and 70 percent of

other Big Pharma trends, such as adjacent doctor offices.

the products offered by the independent pharmacies we

UNEFARM is also sketching its new operational model along

represent are generic and between 25 and 30 percent are

the lines of segmentation as it works with pharmacies of

innovative.”

different sizes. “Not all pharmacies have the same resources and capabilities but the image will be the same in different

UNEFARM has 5,200 affiliated pharmacies and offers it

segments,” Becerra says. He adds that the main role of

members better commercial opportunities for product

independent pharmacies is to take healthcare to those

purchases, human resource training and tax advice. “We

remote places where big pharmacy chains are not present.

always look out for the benefit of independent pharmacies

The second priority is to stay competitive in cities to

to remain competitive and survive the market,” says Becerra.

compete with the big pharmacies.

169

| INSIGHT

STAY COOL: KEEPING THE COLD CHAIN INTACT NAPOLEÓN GÓMEZ Country Manager of World Courier

170

Clinical trials are the necessary first step in getting a

which are applied to its operations globally. “We know

product into the hands of the general public. Napoleón

and follow the standards to which the pharmaceutical

Gómez, Country Manager of global logistics company

industry adheres to provide the necessary services related

World Courier, says businesses like his can play an integral

to cold chain.” To guarantee a pharmaceutical product’s

role in moving a trial to a successful conclusion. “In Mexico,

quality and integrity, comprehensive steps are taken from

the clinical trials industry faces several challenges. Among

the sourcing of raw materials to the distribution of the

them is finding ways to ensure that participants do not

final product. World Courier is the first global logistics

abandon the trial, which can delay a study by months and

company to attain global GDP certification against three

sometimes, years,” he says. “World Courier focuses on

major GDP standards, those of the EU, United States

optimizing the clinical trial supply chain to help research

Pharmacopeia and WHO, and the only provider to hold

centers and pharmaceutical companies in their effort to

a GDP certification with such wide and global scope.

find new treatments.”

Additionally, World Courier has developed specific products and strategies to maintain the cold chain. “We

To that end, World Courier has developed logistics

are involved in storage and transportation fully specialized

strategies to bring pharmaceuticals closer to the general

in temperature control through excellent packaging

public, while maintaining the same quality standards as the

solutions that can truly guarantee that the products stay

contract research organizations (CROs) operating in the

within those temperatures,” says Gómez.

country. One service that can specifically aid the clinical trial industry in Mexico is World Courier’s Direct-to-Patient

The company offers active and passive packaging to

solution, which is designed to deliver treatments directly

deliver products within specified temperature range. Active

to the patient’s home. This solution makes it easier for

packaging incorporates an internal fan or a supply of dry

patients to keep up with the procedure, meaning they are

ice to keep the product cold for longer periods. Passive

likely to stay in the trial for a longer period. As some of

packaging only requires adequate conditioning with no

these medications need to be administered by a nurse, the

additional modifications during transportation. In 2015, the

company also coordinates the assistance of a professional.

company launched a packaging solution called Cocoon that

While this service is already operational in Europe, Gómez

uses several gels to keep a product’s temperature constant.

explains that there are challenges to bringing the model to

“Cocoon will maintain products at the desired temperature

Mexico, including security and infrastructure issues.

for three to five days. This type of packaging is designed to minimize the manipulation of products that require opening

Founded

1969

and

acquired

2012

the package,” Gómez says.

AmerisourceBergen, World Courier has created solutions to address the specific needs of pharmaceutical companies:

World Courier is based in Mexico City but its logistics

commercial supply chain, pharmaceutical storage and

solutions allow it to work throughout the country and

distribution, clinical trial logistics, cell and gene therapy and

around the world. Gómez says that Mexico City is a

direct-to-patient, as examples. Gómez says the acquisition

strategic connection to the US, Canada and Latin America.

by AmerisourceBergen has helped the company expand,

“From here, we can connect any two points because

by taking advantage of an extensive global network and

our packaging guarantees the integrity of the products

investment in logistics for human and animal health. “We

throughout the trip.” Adaptability, he says, is a key to World

have grown at a double-digit yearly rate since 2012.”

Courier’s success and with its new services the company sees a positive outlook for the Mexican market. “We fully

Gómez says that one of World Courier ’s greatest

understand the changing needs of our clients and we adapt

advantages is its quality standards and certification,

our product offering to them.”

VIEW FROM THE TOP |

INVESTING IN TECHNOLOGY FOR BETTER, FASTER LOGISTICS VÍCTOR SOTO Director General of Distribuidora Levic

Q: How has Distribuidora Levic’s online sales division

Mexico and competes with international companies, which

grown? What short-term impact will this have on

is unusual in the country. It is important to strengthen

the company?

Mexico’s pharmaceutical industry by consolidating local

A: By May 2018, our online sales division represented 20

research projects and providing medicine manufacturers

percent of our sales. Clients like the new platform because it

with fiscal incentives. It is also necessary for regulators to

is easy to use and they have slowly migrated to it. Some are

work alongside manufacturers to guarantee accessibility

reluctant to try the new technology but most are adopting

to medications.

it. I would like to see this area grow to 70 percent of our sales within five years.

Q: How does Distribuidora Levic support independent pharmacies?

Q: How is Distribuidora Levic incorporating new

A: There is no real data on the market share of independent

technologies to offer better logistics solutions?

pharmacies. The goal is to support independent pharmacies

A: Our distribution center in Vallejo, Mexico City, which

and make them more competitive against larger pharmacy

will be finished by December 2018, will have a surface

chains. Independent pharmacies can compete by providing

of approximately 8,000m2 and a total construction of

better customer services and by developing differentiated

80,000m . It will be one of the most technologically-

products for their captive market. Independent pharmacies

advanced warehouses in Mexico as it will automatically sort

must also take advantage of the trust they have generated

2,460 daily products without human input. This will allow us

among their customer base, as they are often more widely

to provide better and faster logistics solutions. The center

accepted in communities than pharmacy chains. Our role is

will also use a 100 percent automated robot.

to provide these pharmacies with products at competitive

prices. There are many independent pharmacies in Mexico Q: What market trends has Distribuidora Levic identified

City and State of Mexico, but they are also common in small

in the pharmaceutical sector?

regions where chains are unwilling to invest.

A: Generics continue to grow, since patented medicines remain inaccessible for a large percentage of the population.

Q: What are Distribuidora Levic’s growth plans in Mexico

However, some laboratories are introducing brands at

and abroad?

more accessible prices. In 2017, we sold mainly generics

A: In 2017, we began operations in Belize and although

but we have made an effort to increase our percentage

we will continue developing this region, we will focus

of patented medicines, which now represent between 18

more on Mexico, where demand is rising significantly.

and 20 percent of our sales. We have also introduced new

We are planning to expand into distribution for hospitals,

brands of patented drugs. The new plant in Vallejo will be

clinics and pharmacy chains and will continue investing

key to increase our patented medicines market.

in technology and R&D for better logistics. Our goal is to continue growing and providing excellent services to the

Q: How has the growing demand for generics affected

market. Some of our projects are already incorporating

local manufacturers?

Industry 4.0 principles. Distribuidora Levic is committed

A: In Mexico, the demand for generic medications is higher

to the healthcare of Mexicans.

than their production; regulators have sometimes acted as barriers for local manufacturers, causing a lack of complete coverage for about 40 percent of the medicines

Distribuidora Levic is a Mexican company that specializes in

that Mexicans need. For that reason, 2017 was a complex

the distribution of medicines, including bioequivalents, brand

year for the Mexican pharmaceutical sector. The local

medications and generics and medical supplies. The company

pharmaceutical industry is among the strongest sectors in

has 18 years of experience in the Mexican market

171

| INSIGHT

SAFETY AND QUALITY FOR THE FINAL CONSUMER ENRIQUE GARZA CEO of Capsugama

Among medication’s most important factors are its

With almost 20 years of experience, Capsugama is now

efficacy and safety, but the way it is packaged and

a trusted supplier in the sector, says Garza.

delivered also plays a key role, says Enrique Garza, CEO of 172

Capsugama, a Mexican supplier in the pharmaceutical and

To ensure integrity, quality and safety, all Capsugama’s

food supplements segments. “The Mexican market mainly

products are delivered with a certificate of analysis signed

imports hard gelatin capsules, which the pharmaceutical

by the manufacturer. Furthermore, COFEPRIS carefully

sector most requires,” says Garza, adding that the

regulates all products for the packaging of medications.

segment has substantial room for growth.

“COFEPRIS has done an excellent job in ensuring that quality products can access the Mexican market and when a

Depending on its formulation, intended use,

product meets COFEPRIS’ requirements, the council allows

pharmacokinetics, pharmacodynamics and many other

its expeditious entry into Mexico,” says Garza.

factors, oral medication can be packaged as tablets, soft capsules or hard capsules, the latter being the most widely

Capsugama’s expertise in the market is leading the

used in Mexico and the world. Hard gelatin may contain

company to expand its product portfolio to introduce ACG’s

powdered medicines, granular, semi-solid and non-

natural capsules made of hydroxypropyl methylcellulose

aqueous liquid medicines and their main feature is that

(HPMC). These inert, odorless and tasteless capsules have

they have the advantage of tasting better than tablets.

the same bio-availability of regular hard gelatin capsules and are low in moisture. The capsules are also halal and

In addition, they allow the packaging of semi-solids and

kosher certified.

pellets. According to Markets and Markets, the hard gelatin capsule market will be worth US$2.31 billion by

In the long-term, Capsugama wants to introduce new

2021. “The Mexican pharmaceutical market requires 10

products, including delayed-release capsules. Delayed

billion capsules per year, of which we currently have

HPMC capsules can protect medicines against stomach

roughly 10 percent,” says Garza.

acids without the need for protective chemicals or other types of coatings. These capsules can also delay or control

Garza explains that capsule manufacturing is often

the release of the medications until after they pass the

underestimated. However, the manufacturing process is

stomach to avoid their inactivation by gastric juices and

complicated since it must ensure that millions of capsules

can also be used for drugs that irritate the gastric mucosa.

have exactly the same thickness. Manufacturers have also developed integral measures to guarantee asepsis and

Capsugama also sells equipment for packaging medication

avoid any type of contaminant. Capsules must also be

into capsules imported from China and Chile, including pill

delivered and stored in temperature-controlled storage

counters, labelers, automatic and manual encapsulators,

units to ensure their physical integrity at all times.

weight scales and pressors. Moreover, the company plans to continue developing its relationship with ACG to introduce

Capsugama works with both the pharmaceutical industry

more products into the country.

and the food supplements industry. The first is much harder to access, says Garza, but the support of ACG,

Garza says Capsugama expects to continue growing

its provider, allowed Capsugama to enter the market.

in the pharmaceutical market in 2018, both for the sale

ACG, one of the largest companies in the world for the

of capsules and machinery. While capsules may not be

manufacture of hard, empty gelatin capsules and for which

everyone’s priority when thinking of medications, they are

Capsugama is the exclusive representative in Mexico,

a large market with significant opportunities to grow and

produces 83 billion capsules a year for 80 countries.

innovate, he says.

VIEW FROM THE TOP |

NEW DEVELOPMENTS, NEW OBJECTIVES CARLOS DE LA FUENTE President of Medistik

Q: What is Medistikâ&#x20AC;&#x2122;s strongest area? What other segments

stricter in terms of temperature control for warehousing

are you interested in exploring?

and distribution. For that reason, as an industry, we

A: We are mostly focused on the private market. Originally,

need to continue working on enforcement and a clearer

we were focused on logistics related to medical devices and

regulatory definition for logistics operators so we can

equipment but we have expanded to other areas. Pharma

provide transparency and certainty to clients. Finally, we

is a very large sector with great growth potential where

must demand higher quality services and achieve greater

we can add value, as well as in clinical labs and hospital

compliance to evolve as an industry.

logistics. Q: What role does technology play in Medistikâ&#x20AC;&#x2122;s operations? In 2015, Grupo Tresalia invested in the company and,

A: There will be several innovations that will change the

along with a new advisory board and new shareholders,

way we operate today. We are exploring how to use AI

we decided to establish a new name to lead our plans

and Big Data analytics to provide valuable information to

for the next five years. We are motivated to innovate and

our clients. This will require us to develop new business

become an engine of change in the industry. Beyond a

models in areas like home care, which will give us the

logistics operator, we consider ourselves an integrated

opportunity to offer not only distribution but also follow-

solutions provider for the entire supply chain, focused on

up on medication and treatment directly with the patient.

the healthcare sector.

We have a new business and strategy area focused on technology and innovation that is helping us advance in

Q: How are you helping companies like hospitals achieve

this regard.

better dispensation? A: We are developing new services to help hospitals

Q: Last year, you mentioned that the company was looking

manage their inventory more efficiently, better consolidate

to triple its size in five years. How far along are you?

purchases, offer better services, have greater availability

A: We are growing at a double-digit rate and our plan is to

and reduce obsolete and expired products. There are

multiply in size four or five times by 2022. We will achieve

certain technologies like radio frequency-enabled solutions

this by improving our five vertical segments: medical

that give institutions better control of their inventory in

equipment and devices, pharmaceuticals, animal health,

real time. With these devices we can track the input,

doctors and clinics and hospital logistics. We are also

consumption and output of high-value material in areas

modifying our offer to evolve from being a traditional B2B

like hemodynamics, which allows us to track the product

company to complementing it with a B2C component under

cycle by eliminating manual processes.

a patient-centric strategy.

Q: What are the main challenges facing the logistics

We want to help bring our clients closer to their patients.

industry in Mexico?

To achieve this, we have developed services like direct

A: Traceability. In other words, we provide the client with

distribution of products to patients with chronic diseases.

total visibility regarding where their products are, in

We have a division called Healink through which we help

what condition and if they are undergoing a process that

our clients reach the patient in a more direct way.

complies with regulations. Medistik is a specialized player that not only meets local standards but also adheres to the highest international quality and regulatory standards. In

Medistik is a logistics company focused on diagnosis, clinics

Mexico, regulatory compliance is also a challenge. Not all

and hospitals, pharmaceutical, biotechnological and animal

players have the same processes and capabilities to ensure

health. It offers services for the introduction of products in the

full regulatory compliance as regulations have become

market, imports and platform orders

173

| VIEW FROM THE TOP

COMMITTED TO SUSTAINABLE EXCELLENCE MAARTEN POUW CEO of DSM Sinochem Pharmaceuticals

Q: How is DSM Sinochem Pharmaceuticals’ (DSP)

at the forefront trying to establish industry guidelines that

cardiovascular and anti-fungal divisions positioned for the

help protect the efficacy of our current antibiotics.

medium term? 174

A: All of DSP’s statins are manufactured in our state-of-

Q: What message would DSP send to other companies

the-art facility in India using a patented partially enzymatic

about the impact of implementing a sustainability strategy?

technology that remains unique in the world. As part of

A: DSP has taken on a high-profile campaigning role in the

our growth plans, we have increased our Atorvastatin

fight against AMR by calling on both the industry and the

sales both via organic market growth as well as with new

supply chain to act responsibly in buying, using or selling

customers. Following the recent successful introduction

antibiotics. All pharmaceutical companies should improve

of Atorvastatin, we are now also rapidly increasing our

monitoring of API emissions in their manufacturing facilities.

presence in Rosuvastatin. The anti-fungals market is stable

They need to also support the installations of proper

and we continue with our finished dose formulations in

waste-processing facilities onsite to reduce or eliminate

regulated markets.

API discharge. These efforts should be based on voluntary, transparent and auditable commitments, with a globally

Q: The Sustainability Report from 2016 shows DSP achieved

consistent quality mark.

over 200 marketing authorizations by the end of the year. What are the main milestones for 2018?

Q: Bain Capital Private Equity will acquire DSP. What

A: In 2016 and 2017 it was a great milestone to create such a

benefits are you expecting from DSP’s acquisition?

large portfolio of market authorizations (MA) for European

A: Subsequent to approval by the relevant legal and

markets. Currently, we are making progress to license these

regulatory authorities, DSM Sinochem Pharmaceuticals will

MAs and develop our business in regulated markets. At

be owned by Bain Capital Private Equity. Under this new

this time, we do not have any plans to develop these MAs

ownership structure we look forward to a bright new era

for Mexico.

in which we will be supported by Bain Capital. With their financial, advisory and operational capabilities, combined

Q: How does DSP’s environmental and sustainability

with their extensive knowledge in the healthcare space,

approach differ from the traditional approach in

Bain Capital will be able to assist us in achieving our vision.

manufacturing APIs and drug products?

Together with Bain Capital, we are a global leader in high-

A: Our philosophy behind the sustainable production of

quality APIs and drug products. We remain committed to our

antibiotics is quite straight-forward. DSP strives to apply

core values: quality, reliability and sustainability. As a part of

unique technologies that simplify the manufacturing process.

this, we promote responsible manufacturing of antibiotics.

The production of our PureActives line has reduced our carbon footprint by 64 percent. Beyond cleaner and simpler

Q: What are the company’s main objectives for

manufacturing, DSP is very much involved in controlling

Mexico in 2018?

the anti-microbial activity levels of our waste streams. This

A: DSP is committed to the anti-infective and statins

is a global issue that in recent years has received a lot of

market, as well as the Mexican API industry in general. We

attention from health and environmental legislators. DSP is

believe that Mexico is an excellent location to manufacture high-quality APIs for local markets as well as for larger international markets. In recent years, we have continuously

DSM Sinochem Pharmaceuticals (DSP) is the global leader in

been able to grow our production in Mexico with increased

sustainable antibiotics, next-generation statins and anti-fungals.

sales all over the world. Our unique and high-quality APIs

Founded in 1869 as the Nederlandse Gist en Spiritusfabriek, it

are approved by relevant regulatory bodies like COFEPRIS,

is one of the oldest fermentation companies in the world

FDA and ANVISA.

VIEW FROM THE TOP |

TECHNOLOGY AS A CATALYST FOR HEALTH, HYGIENE IN HOSPITALS FRANKLIN FELLER General Manager of Valtria Engineering

Q: With over 35 years of experience in countries such as

Q: What is the company doing to position itself in the

Switzerland, Taiwan, Brazil, China and Spain, what have

health industry? What added value does your portfolio

been the greatest lessons of working in Mexico?

offer for companies in Mexico?

A: I have learned the most in Mexico because of the

A: Valtria hires personnel with previous knowledge and

challenges of working in a fragmented system and an

experience in the pharmaceutical sector and this new talent

emerging market. When I arrived here 20 years ago, I

is introducing new contacts and companies to collaborate

brought my knowledge, experience and best practices to

with us. We are a completely new company with a little

the sector. At that time, everything was completely new:

over one year in Mexico but we already have a solid client

the regulatory authorities, the market and the companies.

portfolio. We work to provide our clients with a complete

Regulatory authorities like COFEPRIS have been key to the

report and documentation of the projects we develop

development of the pharmaceutical industry in Mexico and

for them, which allows for us to implement preventive

although I think COFEPRIS is doing a good job, there is

measures and follow-ups in the future.

still a long way to go. The sector must implement more international standards to be completely competitive

Q: In Mexico, it is estimated that the frequency of infections

globally but it is going in the right direction.

in hospitals varies from 2.1 to 15.8 percent per year. How does Valtria offer a solution to this problem?

Q: What is the companyâ&#x20AC;&#x2122;s top goal here and where will it

A: Valtria can install a unidirectional laminar flow that

expand to next?

makes the air pass from A to B without turbulence, which

A: Valtriaâ&#x20AC;&#x2122;s team comes from a Swiss multinational company

allows a greater guarantee of air quality. This solution

that operated for years in Mexico but it decided to close

for hospitals reduces the amount of antibiotics required

its offices in different parts of the world, including Mexico.

by a patient to avoid an infection. Investing in Valtriaâ&#x20AC;&#x2122;s

That company still exists, but under another name and it

engineering represents an improvement in health but also

is now one of our competitors. Within three years, Valtria,

a cost-efficient benefit for hospitals. We need to change the

which specializes in the design and installation of clean

Mexican mentality to promote an attitude of prevention and

rooms and controlled environments, would like to be

investment in health through technology. Many times, the

recognized as a highly professional company with excellent

cheapest solutions in the short-term are more expensive in

engineering solutions for the health and food sectors. We

the mid to long-terms.

are also planning to expand to Central and South America in the midterm.

Q: What growth expectations does Valtria have for Mexico? How do you plan to achieve these goals?

Q: Within its range of solutions for construction and

A: We mainly want to triple our sales in services and

equipment, which sector is more relevant to Valtria?

position ourselves in the market. It is important for Valtria

A: Valtria believes the pharmaceutical sector in Mexico is

to be recognized in the sector but also by other industries

the most attractive for its operations. We have realized

that need our services. Valtria sees potential growth and

that large multinational pharmaceutical companies are

development of the market in Mexico but it needs the

not growing as fast as before while domestic companies

support of everyone who participates in the process.

are more likely to grow and expand in Mexico. We also have the possibility to offer our services to the food industry because sanitary and engineering conditions

Valtria is a world leader in air calculation technology. The

are increasingly demanding. The same applies to the

company specializes in the design and installation of clean

cosmetology and dermatology industries, which we are

rooms and controlled environments for sectors such as

also planning to address.

hospitals, pharmaceutical and biopharmaceutical

175

| INSIGHT

PHARMA 4.0: THE NEW INDUSTRY PARADIGM CHARLES BEARD Director General of Tradimport

Pharma 4.0 is a concept derived from the Industry 4.0

that continuously demands innovation and requires players

technology revolution that is reshaping the manufacturing

to evolve in a highly regulated environment,” Beard says.

sector. It seeks to transform and induce competitiveness 176

by using technology, automation and digitalization in

Pharma 4.0 also involves the integration of Big Data in

productive and logistics processes. More pharmaceuticals

the health sector, allowing large volumes of information

are introducing Pharma 4.0 and seeing the results on

to be processed in a structured way that identifies

their bottom lines, says Charles Beard, Director General at

patterns, according to the International Journal of Medical

Tradimport.

Informatics. Tradimport “complements the manufacturing processes and administrative procedures with the use of

“Tradimport has introduced the best of Pharma 4.0 to

Big Data to push the industry’s digitalization,” says Beard.

improve the quality and the management of our entire

“Our portfolio offers fully automatized, digital and smart

production and achieve an average annual growth rate of

products to the industry as a way to not only ensure

10 percent,” says Beard, whose company specializes in the

their packaging needs, but also to improve the logistical

distribution of packaging equipment for the pharmaceutical,

requirements in a more efficient manner.”

cosmetic and food industries. Tradimport sells packaging

“

equipment for solid, semi-solid and liquid products.

We are experts in the supply of pharmaceutical equipment for processes such as primary packaging, secondary packaging and security”

The implementation of technologies such as television cameras or Blister packaging solutions in manufacturing processes guarantees the client’s ability to protect their productivity at all times and in real time. “Tradimport’s technology allows the customer to be more aware of the process because our products can track operations at different levels and also provide information on production performance. All our products transcend mechanical technology to employ automated and intelligent technology,” Beard says. “We use blister machines because the production is more efficient, the product does not get stuck in the machine and minimizes downtime.”

Pharmaceutical packaging technology is key for the

Tradimport also takes advantage of Mexico’s specialized

industry because it protects and identifies a product,

workforce in the pharmaceutical industry and a reliable

which translates into better patient compliance, as well as

regulatory environment to maximize its market share.

improvement of a company’s market competitiveness. “We

“The level of pharmaceutical education in the country is

are experts in the supply of pharmaceutical equipment for

high, which provides added value to companies and the

processes such as primary packaging, secondary packaging

market,” says Beard. The National Survey of Occupation

and security. Our processes directly impact the quality

and Employment from 2017 (ENOE), says Public Health,

our clients provide to their customers and patients,” says

Educational Planning and Evaluation and Medicine are the

Beard. According to the World Journal of Advance Health

three careers with the greatest compatibility for work in

Research, an international online peer review journal, the

Mexico. Also, the ENOE 2017 reveals Public Health has 96.8

use of packaging technologies significantly improves

percent affinity followed in third place by Medicine with

the productivity, manufacturing and profitability of

95.6 percent, both areas overpass the national average

pharmaceutical companies. “Pharma 4.0 becomes a catalyst

of 80.3 percent and position as the areas with closest

for making manufacturers more competitive in an industry

relationship between occupation and studies carried out.

INSIGHT |

MEXICAN ENGINEERS SEE MARKET INSTABILITY MIGUEL SÁNCHEZ Executive Director of Grupo IDEA

All products deteriorate over time and with exposure

Another dilemma rests with buyers that are often cautious

to the elements, but pharmaceuticals are particularly

when launching unfamiliar products due to potential risks to

sensitive to this process, making it necessary to ensure

their operations. “They simply prefer to buy what they know,”

they can withstand storage and distribution. To that end,

Sánchez says. To enter the sector the company had to invest

pharmaceutical products must undergo stability tests,

a great deal of time to raise awareness of its products and

explains Miguel Sánchez, Executive Director of Grupo IDEA.

instill trust. “Once a company tried our product and proved

“A small percentage of each production batch must be

its safety and reliance, knowledge spread quickly by word

reserved to undergo a stability test that is divided in two

of mouth.”

parts. The first part requires the sample to be hosted in a controlled environment of temperature and humidity to

Grupo IDEA is now preparing to expand its services for

fasten its degenerative process. Once this step is finished,

sample sheltering and also its laboratory. “2018 has seen many

the second part of the process requires subjecting the same

challenges, including the elections, the subsequent change

samples to physicochemical and microbiological testing,”

in administration and the policies implemented or being

says Sánchez. To perform the first type of tests, Grupo IDEA

discussed by US President Trump.” In response, Grupo IDEA

manufactures CAI, or controlled environment rooms, which

lowered its market projections for the year. “Considering that

allow customers to set any conditions they want to subject

most of our clients are international companies, our projects

the product to.

for 2018 were paused until July. Many of our clients have told us that they are just not allowed to invest in infrastructure

Grupo IDEA, a fully Mexican company with over 18 years of

until the elections are over.”

experience, specializes in the design and manufacture of environmental rooms according to its clients’ needs. The

While some may feel uncertain, Grupo IDEA is forging ahead

company, now also an authorized third party, owns several

and it plans to expand into Guadalajara and other states as

rooms in which it performs stability tests for third parties.

it looks into widening its sample sheltering business. The

“This required the creation of our own laboratory and we are

company also sees great potential in photo-stability testing

gradually increasing our services portfolio.” The company has

and stability testing of products that contain cannabis. “The

installed over 80 rooms in Mexico during the past six years,

potential approval of these products is a matter of interest

mostly for multinational pharmaceutical companies. It also

for many Mexican laboratories, so we are evaluating the

designed K’iin Control, a specialized software for the control

possibility of becoming authorized third parties for these

of its rooms. “We provide an integral offering, from design of

products. This will also pose its own challenge as, due to

the room to aftersales services, as this is critical equipment

the sample’s nature, its transportation, testing and storage

that must not fail under any circumstances,” he continues.

will require intense and constant scrutiny.” Furthermore, the company is looking into other sectors such as automotive,

Sánchez credits the company’s success to its employees

aerospace, agricultural and alimentary.

but he says the sector remains wary of local businesses. “Mexican companies do an excellent work,” he says, “but the

While entering the pharmaceutical sector posed some

pharmaceutical sector does not yet trust local companies.

challenges, Grupo IDEA has grown in this market niche.

Ninety percent of equipment acquired by pharmaceuticals

Sánchez believes that its success can be replicated by more

is imported.” Those circumstances also created a complex

Mexican companies. “The industry is open to try our products

beginning for Grupo IDEA. “At first, it was hard to find funding

for critical processes. What the sector needs is more products

because the financial sector is unwilling to back new projects.

developed by Mexican companies. It is time for Mexico to

While there are financing channels, these are often scarce,

develop more products. There are many opportunities ready

hidden and hard to access for new companies.”

to be taken.”

177

| INSIGHT

COMPREHENSIVE SOLUTIONS FOR SPECIALIZED AREAS FLORA PIÑA Commercial Director of Uniparts

Research centers play an important role in the pharmaceutical

training to perform this job, which makes the process too

ecosystem but budget cuts are placing them and their

time consuming and inefficient.”

suppliers in a precarious position, says Flora Piña, Commercial 178

Director of Uniparts, a Mexican distributor of scientific

To cope with a reduction in sales, Uniparts decided to

materials and equipment for R&D laboratories. “In 2018,

capitalize on its extensive experience with state-of-the-

CONACYT made a 68 percent budget cut on infrastructure,

art technology. Instead of providing the equipment, the

which hit research centers in their ability to buy reactants and

company now provides the tests themselves. “We have

equipment. This also hit all universities and research centers

a strong scientific support division and an engineering

across the country.”

department that are in charge of training clients on the use of our products.” One example, Piña adds, is the trend in

With over 30 years of history, Uniparts provides integrated

the global pharmaceutical sector us the use of cell cultures

solutions for highly specialized areas, including biotechnology,

to avoid clinical tests on animals. “In Mexico, this practice is

molecular biology, cell biology, histocompatibility and

just starting so we hosted a series of conferences to create

diagnostics. The company works mainly with research

awareness on cell culture techniques, including 3D-cell

centers, although it does have corporate clients. From its

culture protocols. Some of our attendees have shown interest

inception until 2014, the company experienced an annual

in further investigating these topics and have requested

growth rate of 20 percent, explains Piña. “The past few years

workshops from us.”

have been complex due to budget cuts, so we exploring other alternatives.” Uniparts has five offices in Mexico: Monterrey,

The next step for the company is to lean on its employees’

Guadalajara, Merida, Queretaro and Mexico City, from where

experience in many different research lines to develop a

it supplies all state universities. The company is looking

testing laboratory. “Our company sells state-of-the-art

into developing its own laboratory services as it expands

technology but Mexico is often about seven years behind

from its supplier roots. Tighter budgets are just the latest

in technology in comparison to the US and the EU, so

problem hitting Mexican R&D as the sector has also faced

we have to make a strong effort to educate our potential

a chronic lack of private investment. “There is little interest

customer base on the new techniques that are impacting

from pharmaceutical companies to invest in Mexican R&D, but

research development.” Piña says that the laboratory is

there are exceptions. Furthermore, there is still a gap between

expected to be ready in 2019 when it will start providing

academic research and the commercialization of a product.”

flow cytometry services. Later, it will add more cuttingedge technology, including Next Generation Sequencing

Piña explains that this gap has been a problem for decades,

(NGS), an area that is trending globally to sequence

as universities lack the know-how related to necessary steps

genomes. “While this technique is extremely popular

for commercializing their products. “Researchers often lack

worldwide, it is uncommon in Mexico, so it is a large area

knowledge on how to develop commercialization strategies.

of opportunity.”

There are no financial incentives from public institutions for researchers to navigate the many barriers that complicate

Going forward, Uniparts will focus on diversifying its services

the launch to market of a new product. Other countries

to weather the budget storm. “We want to generate a strategy

like the US have managed to create successful financing

to recover the share of the market we have lost due to this

schemes for their institutions, helping researchers to develop

period of uncertainty and focus on finishing our laboratory.”

their products.” Mexico’s problems bringing research to

The company does see more opportunities ahead. “About 80

market can be seen in patent registrations, says Piña. “Most

percent of the products we distribute are imported so I see a

of the new patents created in Mexico belong to foreign

significant opportunity for the company to generate its own

companies. Patent judges also do not have the necessary

molecular diagnostics kits.”

INSIGHT |

REMOVING WASTE TO REDUCE ENVIRONMENTAL IMPACT JOSÉ AEDO Director General of SINGREM

Hundreds of thousands of expired medicines, wasted medical

To achieve success, citizen participation is necessary.

supplies and drug packages are discarded every year, but not

“We have observed a greater awareness among Mexicans

always in the right way. Due to their nature, these products

of the importance of adequately eliminating expired

can present a significant health and environmental risk if they

medicines. Our pilot test in 2010 collected 9 tons of

are not treated with due security, says José Aedo, Director

medical waste; in 2017, we collected 612 tons. We have

General of the National System for Packaging and Medicine

reached 2,500 tons collected since the beginning of

Residue Management (SINGREM). “Throwing away old

the program, equivalent to 200 fully loaded trucks.”

medicines without proper control causes an environmental

The group also offers a program to which companies

impact since this waste ends up in landfills and can leak

of any size can join as long as the company is willing to

into groundwater. In Mexico, there is the additional danger

contribute.

of these drugs ending up on the black market,” Aedo says, adding that there is a significant business opportunity for

However, a lack of regulatory enforcement is preventing

companies willing to tackle the issue. SINGREM was created

more companies from joining the association, says

specifically to collect and properly dispose of medical waste.

Aedo. “Approximately 50 percent of the medicines that SINGREM collects are generics, but six of the 20 largest

To prevent environmental and health damage, the General

generics manufacturers in Mexico are not working with

Act for Prevention and Integral Waste Disposal establishes

us. Local regulations are strong but there is hardly any

that companies that work with products that end up as

enforcement, so companies often bypass the rules,” he

hazardous waste, such as those in the pharmaceutical

says. A strict application of the existing regulations would

industry, must develop proper disposal strategies. “This act

be a good solution. Another approach would be to enact

states that all manufacturers, sellers and distributors must

regulatory changes that further motivate companies

either generate their own waste disposal plan or work with

to comply with the law. “Countries like Spain make it

a company that disposes waste for them.” SINGREM is the

mandatory to have a complete record of the waste

only medical waste management system in Mexico for the

disposal for every registered product. Without it, it is

residues generated at home.

not possible to register a drug.”

The function of the association is not to collect waste from

SINGREM is also working to convince all companies

manufacturing companies, but from homes. “We have

that handle medicines to join its project. “We have met

placed 5,000 waste disposal units in pharmacies, hospitals,

with pharmacy chains to show them the benefits of this

government offices and schools in 26 states across Mexico

program. If we remove a container from a pharmacy, the

where people can dispose expired medicines or medical

pharmacy receives less traffic since some clients visit

supplies,” Aedo says. SINGREM is in charge of logistics for

specific pharmacies to get rid of medical waste. In the case

the collection and delivery for disposal of this waste and it

of manufacturers, developing their own waste management

has 30 vehicles, 17 storage warehouses across the country

program is highly expensive.”

and 28 supervisors. The only process that is outsourced is the incineration of medical waste. “SINGREM is an example

Considering the environmental benefits, the group’s goal

of the goals that pharmaceutical companies can achieve by

is to face all challenges and continue expanding. “We want

uniting together. By February 2018, we were working with

to continue expanding our infrastructure. To collect 1,000

the generators of 62 percent of medicinal waste. Most of our

tons per year, we have to install 2,000 more containers. As

members come from companies belonging to CANIFARMA,

we continue growing, we also aim to introduce recycling

AMIIF and ANAFAM, but we are also attracting companies

practices for cardboard and paper and in the long term

that do not belong to any of these associations.”

we might also include collection of veterinary products.”

179

| TECHNOLOGY SPOTLIGHT

180

CONTINUOUS INVESTMENT IN TECHNOLOGY KEY TO SUCCESS The pharmaceutical market demands fast answers and solutions to the large and rapidly-evolving challenges in healthcare. Companies need more than quick response times, an excellent workforce, a well-organized supply chain and efficient communications systems across all areas of the organization, they also require up-to-date equipment to support their manufacturing goals. The key to success in pharmaceutical manufacturing is to have the best critical systems, process equipment, q u a l i t y l a b o ra to r i e s , te c h n i c a l a s s i s t a n ce a n d manufacturing areas to produce quality medications. Mavi Farmacéutica’s plants have enjoyed a consistent investment in machinery, technical and management services and qualified personnel to manage production and quality control. All these efforts have born fruit in a fast, efficient and optimized production line that can quickly respond to any production changes. Mavi Farmacéutica has incorporated several systems into its production lines to streamline its processes and produce high-quality medications. This equipment includes: • Tableting Machines Fette 1200i, high-performance machines for packing single-layer tablets that feature a manual turret clamping system. According to their manufacturer, they are ideal for small batches. • Glatt FBE 250 R Fluid Bed Equipment, a simple and effective dryer that with the addition of spray nozzles permits extremely effective coating and is capable of pellet manufacturing. • Ekato Unimix SRC 800, which provides fast, safe and economical mixing and homogenization. • BOSCH GKF 2500 and Macofar/Romaco CD 60, two flexible capsule filling machines. • Vector GMX-400, a granulation mixing system for homogenous wet granulation of powders. • Uhlmann B1240 and B1330 blister machines for packaging of solid and liquid products. • CAM packaging machines that can be used in the pharmaceutical and cosmetics sectors.

This equipment was incorporated to ensure that all manufacturing, packaging and distribution processes meet the highest quality standards until they reach the final customer. Mavi Farmacéutica maintains its high-quality standards in accordance with national and international regulations.

181

| VIEW FROM THE TOP

THE MORE CONNECTED, THE HEALTHIER ALEJANDRA GROFF Director General of GMMC

Q: In what therapeutic areas does the GMMC portfolio focus?

with the purchase of devices for the emergency area

A: We provide solutions for different areas. For example, we

becoming increasingly popular.

sell diagnosis devices for private practices. Seventy percent 182

of our sales go to the private market and the rest to the

Q: How do you rate access to technology in the Mexican

government. We generally participate in tenders through our

healthcare sector based on the medical devices

distributors. We are wholesalers, we import and supply for

institutions acquire?

smaller distributors. Our most popular products are surgical

A: I think we need to focus on a younger generation of health

instruments, equipment for cardiology, and devices for stress

professionals because many who have been in the system

tests or spirometry.

refuse certain technologies and are afraid of change. Mexico remains behind in the application of telemedicine. GMMC has

Q: What is GMMCâ&#x20AC;&#x2122;s criteria for which brands it chooses to

tried doing a few projects with a group of doctors. One was

distribute?

for performing remote diagnosis for cardiology, but it was

A: Technology is very important to us. We evaluate the needs

hard to accomplish results. We also try to work remotely with

of the market and try to follow those trends. Now, we are

fetal monitors, but it is very complicated for different reasons,

leaning toward telemedicine. The country of origin is also

such as internet connectivity.

important to us. Most of the brands we work with are from the US and Europe. We are not closed to Asian manufacturers;

Q: What complementary services do you offer?

however, the government does not accept these products but

A: We offer advice on equipment purchases. When a client

the private market is more open.

requests a product, we elaborate a study to know what they really need. In addition, we provide training to the professionals

Q: What purchasing trends have you identified among

who will use it. We have engineers who can do maintenance

institutions?

work and we are ready to respond as fast as possible; we give

A: In 2016, the market focused on cheaper products; the

aftersales service and preventive maintenance.

criterion was not quality, but price and both the public and private sectors demonstrated this behavior. However, in 2017,

Q: With what type of products would you like to expand

with a more stable exchange rate, brands became important

your portfolio?

again. The challenge now is to better promote our brands.

A: We would like to include more products for telemedicine. We need to stop selling boxes and start selling systems that

Q: What are the main therapeutic areas in which clients are

provide solutions. So far, we have contributed to protocols

interested?

for laser devices in urology, gastro and gynecology. We have

A: Hospitals are investing a lot in cardiology, post heart

shared experiences with other companies to understand

surgery care and cardiac rehabilitation. They also invest

the market and to identify in which direction the industry

in diagnosis, but the prices for this area have decreased,

should grow.

so it is not necessary to make large investments to acquire good products. In our case, sales have grown

Q: What are your expectations for purchasing

mainly in surgical instruments and cardiology devices,

behavior in 2018? A: Importers will suffer the most. Without NAFTA changes that gave us a zero tariff, we will need to rethink our plans,

GMMC Mexico is a medical devices and solutions provider

although we have to wait. Asian products might have

for the diagnosis and emergency segments. The company

advantages attributed to more aggressive prices but the

distributes brands such as Welch Allyn, Huntleight and Schiller,

government could continue saying no to the Asian market

among others

and only buy from the US and Europe.

ROUNDTABLE | A medication’s integrity must be guaranteed to ensure its safety and effectiveness. However, drugs can be highly sensitive to adverse weather conditions, which need to be controlled throughout the entire supply chain. Moreover, Mexico faces a major problem in the form of road safety that puts all types of cargo at risk of theft. Mexico Health Review spoke with manufacturers and distributors to analyze the best strategies to ensure a product’s safety from the moment it leaves the plant to the moment it arrives in the hands of the patient.

HOW CAN THE SUPPLY CHAIN WORK TOGETHER TO ENSURE PRODUCT INTEGRITY?

We work with the Mexican government to generate better regulations, infrastructure

183

and road safety. The use of redistribution centers in large cities such as Monterrey and Guadalajara has also helped to facilitate the adequate transport of medicines under cold chain conditions, especially for long distances. Safety is one of the main challenges facede by 3PL operators, as many roads are unsafe and some drivers simply refuse to travel or deliver products in certain areas, for instance in Michoacan and areas around Mexico City’s International Airport. Ensuring safety on roads is especially important for the pharmaceutical sector, as these products can cost millions and can be a danger to public health.

ALDO LÓPEZ President of the Mexican Association of Logistic Operators (AOLM)

E-commerce is the point of connection between the needs of pharmacies and patients. Farmalisto takes the relationship to another level and knows to whom the medication was sold, its treatment and the additional services it requires. The information can be used so that the medications are beneficial for the patient’s health. Therefore, e-commerce services can serve to provide value at all points along the medicine value chain until the drugs reach the patient’s hands and even after that.

JOSÉ MORA CEO and Co-founder of Farmalisto Mexico and Colombia

Mexico needs to increase its investment in technological development to strengthen products manufactured in Mexico. It is also necessary to invest in the development of suppliers since the integrity of the productive chain must be strengthened. Additionally, we believe that our government should change its structure to support Mexican companies. There should be more support in technological investment, export, financial support and incentives for Mexican companies to grow.

SERGIO NAVEDA Director of Grupo ACF

| INSIGHT

DIVERSIFICATION AS A KEY STRATEGY FOR GROWTH PEDRO CATTORI Owner of TECROM Group

184

The Mexican pharmaceutical market has grown not only

Cattori sees significant potential for growth in Mexico

in volume but also in the diversity of its offer and to keep

through the identification of specific market niches. “Our

pace, or even get ahead, suppliers must also expand their

business is based on economies of scale. As distributors, it

product portfolio, says Pedro Cattori, owner of distributor

is much more convenient for us to import products in the

Tecnología Cromatográfica (TECROM Group).

largest reasonable volume with a wide diversity of product types,” he says. TECROM shipments contain a wide range

According to Cattori, TECROM is a good example of this

of products packaged at the point of origin, which are

strategy. When it was founded, the company specialized

subsequently distributed to the public and private sectors,

in the sale of products related to chromatography, an

including pharmacies and retail stores. “Importing high

analytical technique used to separate mixtures. While

volumes allows us to offer products at more competitive

TECROM continues to sell all necessary products in this

prices than manufacturers as they would bring smaller

category, it has broadened its portfolio to include many

volumes, which would be less cost-effective,” says Cattori.

more laboratory and chemical suppliers used by hospitals, clinics, research labs and pharmaceutical companies. “We

TECROM also has offices in Europe and North America, but

are not targeting a specific market as we represent 30

in Mexico the company is targeting both the public and the

different suppliers. Our business strategy is to identify and

private healthcare sectors. “The public healthcare sector

fill empty niches that overlook existing medical, equipment

is the largest market in Mexico by volume and price and

and service suppliers,” says Cattori.

is changing at a rapid pace. For distributors, it is growing in strategic value,” says Cattori. For this sector, TECROM

Today, the company operates through the exclusive or

is importing products from South Korea and Australia.

direct representation of an international brand and is

The company is also expanding its business by supplying

enjoying success as an alternative brand for high-quality

to integrators, which are gaining an even larger share of

products. “Our competition is well-positioned in Mexico

the pharmaceutical market by providing comprehensive

but their prices are often too high. The sector always needs

solutions to the public sector. TECROM also sees potential

suppliers that can deliver high-quality, on-time and defect-

in the private sector, which according to Cattori “is evolving

free products,” Cattori adds.

through the sale of medicinal products in retail stores, leading to an increase in the number and types of products.”

Chromatography continues to be a core part of TECROM’s business, as this analytical technique has applications in

While maintaining an optimistic outlook, Cattori sees

almost every manufacturing sector, from food and beverages

challenges on the way. “The market is being shaken by

to plastics and pharmaceuticals. “We are introducing a new

protectionist policies from countries that dislike trade

technology for genetic screening and can now measure

deficits and have decided to solve them by implementing

over 100 parameters through the use of mass detectors. The

import tariffs.” Cattori explains that if Mexico decides

new equipment can operate samples automatically without

to raise import tariffs in retaliation, TECROM and other

the need of a technician,” says Cattori. He explains that

suppliers for the healthcare sector may be affected.

medicine is becoming increasingly personalized according

“Protectionist policies will force consumers to pay more

to the weight, age and race of patients, which is paving the

for all products.” No matter the obstacles ahead, TECROM’s

way for medicines adapted to specific individuals. “These

goal is to continue moving forward by offering differentiated

changes in the sector have led us to increase our offer to

products for specific market niches. “For 2018, TECROM

meet their needs. We have widened our product portfolio to

will prioritize the needs of its employees and investors but

cater to pharmaceutical companies, research laboratories,

it will not ignore its offering of high-quality products at

hospitals and clinics,” he says.

reasonable prices.”

VIEW FROM THE TOP |

IMPROVING ACCESS THROUGH DISTRIBUTION RODOLFO CAMARGO Commercial Manager of El Crisol

Q: Why do companies choose El Crisol instead of other

have increased our attendance at fairs, including those

national and international distributors?

specializing in genetics, oncology and immunology, among

A: Our main product line is electrochemicals used in the

many others.

analysis of any type of liquids, from water to creams. The

185

second are those for liquid handling commonly used in

Q: What areas does El Crisol believe will grow the most in

laboratories, such as pipettes and micropipettes, followed

the coming years?

by heating systems, including ovens and hot plates. We

A: At this point, no single market represents more than 10

serve 31 different sectors, including pharmaceuticals, food

percent of our sales, but the pharmaceutical segment is

products, water treatment, mining, oil and gas, research,

one of the strongest, along with food, academic research,

chemicals and veterinary products and we have almost

water treatment, oil and gas and mining. Of all the sectors

30,000 clients. We are also the only company in Latin

we manage, academic research will grow the most since the

America that has a product catalogue in Spanish, which

country has significant potential for it. Most of the research

introduces over 13,000 products from over 220 brands from

is funded by the federal government, which has created

all over the world. Manufacturers, especially those engaged

many delays and complications related to payments. In

in medicines, must follow strict rules related to where they

addition, administrative changes in the government and at

can buy their equipment from. While some import from

COFEPRIS could stop investment and payments in the near

Europe, others request specifically from the US. We work

future. However, the private sector is increasingly financing

with 95 percent of the COFEPRIS-approved pharmaceutical

Mexican research. The country has many talented research

companies in Mexico.

professionals and the industry has seen this talent and the financial opportunities of investing in it.

El Crisolâ&#x20AC;&#x2122;s main advantage is that we carry most of our products in stock. Other companies may have more

Q: What are El Crisolâ&#x20AC;&#x2122;s growth expectations in the

products, but they are not based in Mexico so they must

short-term?

order from abroad. Sometimes, the lack of a single product

A: It is hard to estimate an exact growth rate due to

can stop production for weeks, so it is necessary to replace

inflation and the volatility of the exchange rate. Our goal

it as soon as possible. Our main challenge is to properly

is to consolidate the changes we have made in recent

manage this and, at the same time, to follow the strict

years, maintain our leadership in the Mexican market and

traceability rules imposed by the pharmaceutical industry.

ensure that our workers participate more and more in our

While our products may be more expensive, clients can find

operations. We want to continue to develop our people

what they want and receive it immediately. Furthermore,

and increase our workforce. We have implemented a five-

we are direct distributors of several of the most important

year plan that defines our goals for the export market, new

brands in reactants, equipment and other supplies.

products, diversification of our portfolio, opening more branches, hiring more sales agents and further development

Q: How does El Crisol react to market changes and

of the e-commerce platform. We also support many

trends to ensure its clients are getting the most up-to-

congresses and other activities organized by universities

date service?

to introduce scientific topics to the population.

A: In 2014, we diversified our portfolio of products to reflect changes in the market. Our goal is for the market to see us as more than a distributor of laboratory supplies because

El Crisol is a Mexican company that specializes in the distribution

our product offering is more diverse and includes specific

of laboratory equipment, measuring equipment and laboratory

lines developed for many areas of research, including cell

reagents. Based in Mexico City, it has offices in Puebla, Queretaro,

management and biotechnology. To that end, in 2018 we

San Luis Potosi, Monterrey, Torreon and Chihuahua

| VIEW FROM THE TOP

OPTIMIZING HEALTHCARE THROUGH TECHNOLOGY INGRID RITTER Director of Marketing UPS Americas Region at UPS

186

Q: How has UPS developed its presence in Mexico’s

in Latin America are on the rise and Mexico is a growing

healthcare sector?

country. We see this acquisition as a way for us to strengthen

A: UPS has grown both organically and inorganically.

and expand our portfolio in this area. Now, we can work

First, by opening our own facilities and expanding the

with the pharmaceutical manufacturers in its supply chain,

infrastructure of our locations and second, through

which means we can help them design their clinical logistics

acquisitions. When we entered the healthcare area in 2001

network and then help them in the supply chain design.

through Medistem Healthcare Services, our first acquisition, we obtained distribution capabilities in the segment. Poltraf

Q: How are logistics companies contributing to building a

and CEMELOG are some of our acquisitions in Europe.

regulatory network in the region?

These companies have provided us with infrastructure

A: In our study UPS Pain in the Chain Healthcare Survey,

and expertise.

we saw that over the last four years the main challenges for those responsible for healthcare logistics are cost

When we want to grow in a region, we research potential

management, regulatory compliance, product protection

strategic partners that can help us. Our latest acquisition

and product damage. One of the key activities of the UPS

is a company called Marken. It is the world leader in

quality assurance team is to establish close relationships

clinical supply chain solutions and will allow us to expand

with the regulatory agencies in each country in which we

our logistics capabilities for clinical trials. Marken has a

operate. We have approximately 1,100 licenses worldwide to

very strong network in Latin America and it is helping us

ensure that we are compliant in every single country where

strengthen our portfolio in Mexico and the rest of the region.

we are present. Compliance is complex in Latin America, since there are about 50 countries and territories and each

As a global logistics healthcare supply chain provider, we

has a different regulation. Our added value is the experience

work with pharmaceutical companies, CROs and medical

we accumulate in each country and the relationships with

devices companies and we focus strongly on multinational

the agencies in those countries to ensure that our facilities

companies that are expanding their presence in Mexico. We

and processes comply with regulations.

have a mature customer base in both Europe and the US and most of these customers want to expand their presence

Q: How does technology contribute to the optimization

in Latin America. We also support domestic manufacturers.

of UPS’s operations? A: We consider UPS as a technology company, since

Q: How will the Marken acquisition help to improve UPS’

we invest around US$1 billion each year in this area.

position in the sector?

Technologies such as UPS My Choice provide control

A: Marken specializes in the transport of biological

to our customers. This is critical in healthcare, because

products sensitive to temperature. It is a global expert in

patients are waiting for medications that may be sensitive

the transportation of medicinal products in the clinical

to temperature, for example. If a client signs up for UPS My

research segment. Marken sends these biological samples

Choice, they receive a notification of when the package will

from clinical locations to central laboratories and has built

arrive; if for some reason the client is not at home, he has

a complete network around this segment. Clinical trials

the option of retaining it, routing it or assigning a neighbor to receive it. UPS has also been involved in a significant project in Rwanda for the delivery of blood products

UPS is a logistics company with presence in more than 200

through drones. We have partnered with other associations

countries. Through its health sciences specialty, it offers

to bring these products to remote areas. In addition, we

logistics services for pharmaceutical companies, medical

are exploring other uses of this type of technology in the

devices and research

health industry.

VIEW FROM THE TOP |

QUALITY AS DIFFERENTIATOR EDUARDO TAPIA Director of Life Science and Healthcare at DHL

Q: What are the main priorities that DHL has identified in

Also, the digitalization has gained a lot of momentum in the

Mexico’s healthcare sector?

region, and we are approaching some incubators to apply

A: Life Science and Healthcare in Mexico is one of the most

the good ideas that startups have regarding processes.

important sectors for DHL Supply Chain as it represents

Through this initiative, we are able to learn more about

one of the eight most important markets for the country.

technology and IT, which allows us to improve our response

Mexico’s priorities for the sector are pharmaceutical

to our client’s needs. We are also interested in using smart

laboratories, medical device companies and diagnostic

labels that incorporate radiofrequency identifiers (RFID) in

laboratories. We have almost 100,000m dedicated

hospitals to improve the inventory tracking. As technology

exclusively to this sector, and half of this territory operates

is a fundamental part for the company, we have established

under a controlled temperature of 25°C. We have also

an innovation center in Germany, where it takes place the

developed networks with temperatures from 2-8 °C to

solutions development for the industry.

ensure the integrity of our clients’ products, and have over 25 cold chambers all over the country. We have 30

Q: How is DHL growing alongside its clients and in what

distribution centers from which we can supply almost

new areas is the company investing in Mexico?

all hospitals within four hours. We are generating the

A: We have both national and international clients and we

appropriate infrastructure to address our client’s needs.

are always willing to incorporate more. Our portfolio is

For DHL Supply Chain, life sciences and healthcare is a

comprised mainly of international companies, which has led

continuous area of improvement because quality acts as

to significant organic growth as these companies expand to

our main differentiator.

other countries and bring their logistics operator.

Q: What is the main focus of DHL Supply Chain?

Also, we have worked in the last two years to approach the

A: We are focusing mainly on medical devices and

health segment for animals, a well-developed area in other

pharmaceutical products, but are also developing

countries that we want to bring to Mexico. The underlying

specialized solutions to improve hospital inventories. We

fundamentals of this sector are the same as for human

have a wide range of specialized services for the healthcare

health: ensuring temperature control, implementing best

sector which includes consulting services so that clients

practices, traceability processes and properly administering

can develop their own supply networks, secondary

the supply chain throughout the process.

packaging for retailers, complementary services and clinical trials delivery. Secondary packaging consists of a

Q: What are DHL Life Science and Healthcare’s main goals

series of processes that include labeling and repackaging

in Mexico?

so that products can be shipped under the conditions

A: Our goal is to generate success stories for our clients,

determined by each company. This process can also be

while always prioritizing quality. In DHL’s strategy for

done under controlled-temperature conditions. We have

2020, healthcare and life sciences was named one of

the proper COFEPRIS licensing to do so.

the most important sectors. We aim to continue growing organically in Mexico alongside our clients and focus on the

Q: What role does technology play in logistics companies

improvement of our client’s distribution chains.

and how is DHL adapting? A: Technology is becoming increasingly important to ensure safety. We have a solid tool for administering

DHL is a logistics operator that was integrated in 2002 in

warehouse management systems (WMS) and another for

the Deutsche Post DHL group, the world largest logistics

transportation management systems (TMS) which enables

company operating in the world. It was founded in 1969 and is

us to provide versatile solutions with local teams.

headquartered in Bonn, Germany

187

We will prioritize units for preventive medicine and those in the poorest areas” Andrés Manuel López Obrador

INDUSTRY WISH LIST FOR THE NEXT 6 YEARS Healthcare is key to the future of any nation. During the last six years of President Enrique Peña Nieto’s administration, some areas of healthcare advanced, but the sector also faced significant budget cuts. As President-elect Andrés Manuel López Obrador prepares to take office in December, he will need to reflect on the past administration’s actions and determine what to continue and what requires a new path. The industry is calling for collaboration and communication to achieve advances in policy.

To lead, it is essential to listen. In this supplement, Mexico Health Review presents the expectations and suggestions of industry leaders outlining what exactly is needed for Mexico.

189

| A LOOK BACK

PEÑA NIETO’S LEGACY In general terms, the Mexican health industry improved during Enrique Peña Nieto’s administration and some sectors were strengthened. However, Mexico has a long way to go in relation to healthcare, especially in the public sector, which is unable to provide coverage to the entire population

From the beginning of his administration, President

increased slightly in this period, from 0.81 percent in 2013

Enrique Peña Nieto set an ambitious agenda that would

to 0.82 percent in 2015.

impact the key sectors of the economy. Known as the

190

National Development Plan 2013-2018, the administration

The fourth objective was to close the health gaps

outlined its objective to make Mexico an inclusive country.

between different social groups and regions and was

To this end, the new government emphasized the social

measured by the infant mortality rate and the maternal

rights of all Mexicans, guaranteeing access to health for

mortality rate. The infant mortality rate between 2013 and

all. Giving structure to this plan, the Ministry of Health

2015 decreased from 12.98 percent to an estimated 12.52

established the Sectorial Health Program 2013-2018,

percent, while the maternal mortality rate fell from 38.20

outlining six main objectives.

percent in 2013 to 34.59 percent in 2015.

The first objective was to consolidate actions related to

The fifth objective set by the Peña Nieto administration

protection, health promotion and disease prevention.

was to guarantee the generation and effective use of

Between 2013 and 2016, the percentage of children under

health resources, measured by the percentage of public

1 year old who received a vaccination increased from

expenditure and the supply of medical prescriptions from

83.76 percent to 92.81 percent, while the prevalence of

2013 to 2015. Under these indicators, the percentage of

obesity in children between 5 and 11 years rose from 14.62

public spending showed a considerable increase, from 83.1

percent to 15.30 percent.

to 91.55 percent while the supply of medical prescriptions presented a small rise from 65.2 to 68.97 percent.

The second objective was to guarantee effective access to quality health services, measured by the mortality

For the sixth and final objective, the proposal was to

rate for breast and cervical-uterine cancer and by the

advance in the construction of a National System of

hospitalization rate for uncontrolled diabetes. In 2013,

Universal Health under the direction of the Ministry of

the mortality rate from breast cancer was 16.61 percent,

Health, considering the percentage of the population that

rising to 18.78 percent in 2016, while the mortality rate

lacked access to health, the percentage of the population

from cervical cancer decreased from 11.63 to 11.58

with public health insurance and the percentage of

percent in the same period. The rate of hospitalization

households in the first quintile of income (less than

for uncontrolled diabetes with short-term complications

MX$4,000 per month) with catastrophic health expenses

decreased from 17.15 percent to 14.86 percent during

from 2013 to 2016.

that period. In that period, the percentage of the population affected The third objective proposed by the Ministry of

by access to health services decreased from 21.54 percent

Health focused on reducing the mortality rate caused

to 15.54 percent, the percentage of the population

by accidents and work-related risks, in addition to

with public health insurance using public healthcare

encouraging compliance with chlorinated water

services increased from 53.68 to 64.29 percent and the

standards. COFEPRIS expected a higher percentage of

percentage of households in the first quintile of income

samples of chlorinated water in NOM specifications, as

with catastrophic health expenditures decreased from

water chlorination is a simple and effective means to

4.60 percent to 4.13 percent.

disinfect water and make it drinkable, but also to avoid diseases. In 2017, preliminary data showed a 92.10 percent

The National Council for the Evaluation of Social

compliance with the NOM, while in 2018 the number

Development Policy (CONEVAL) is the public body in

increased to 93 percent.

charge of generating information about the social and political situation in Mexico, as well as the measurement

Similarly, the mortality rate due to motor vehicle traffic

of poverty. In 2016, it created a monitoring sheet for the

accidents fell from 13.39 to 13.25 percent between 2013

programs derived from the National Development Plan

and 2015. The mortality rate due to occupational risks

2013-2018. The council classified the objectives as very

lagging, lagging, insufficient, adequate, advanced and

Also in 2017, the OECD published its Health at a Glance

exceeded according to 16 indicators included in the six

report to measure the performance of the health system

goals of the Sectorial Health Program 2013-2018. In its

in Mexico. According to that report, in 2017 Mexico

analysis, CONEVAL determined that 44 percent of the

ranked last in categories such as life expectancy, obesity

indicators were inadequate; 37 percent were adequate,

prevalence, general proportion of obese population,

while only 6 percent achieved an advanced classification

access to medical care, death rates from heart attacks and

and 13 percent exceeded the proposed sexennial goal.

health expenditure. On the other hand, Mexico had the

Also, CONEVAL highlighted that 69 percent of the

lowest rates of daily tobacco and alcohol consumption

indicators focused on results and measured the solution

and posted a relatively good performance in terms of

of specific problems, while the remaining 31 percent was

reducing hospital admissions for conditions treated at

aimed at monitoring aspects of services and management.

primary care centers, such as asthma and COPD.

WHAT WAS THE POSITIVE AND NEGATIVE? population was covered by a public healthcare scheme. In 2016, almost 86.6 percent of the population had protection from IMSS, ISSSTE or Seguro Popular, according to ENSANUT 2016. N e a r

the

end

administration’s

the

six-year

period, IMSS reported that it

In 2016, the main causes of mortality in Mexico, according to INEGI, were heart disease at 19.9 percent; diabetes, at 15.4 percent and malignancies, at 12.9 percent of total deaths. Diabetes-related deaths in Mexico increased to 82,964 from 46,614 between 2000 and 2010. Between 2015 and 2016, the number of

had achieved a surplus of over

deaths increased to 105,574 from

MX$2.1 billion and increased its

98,521.

capacity with the construction of 16 hospitals, 40 family clinics and nine breast cancer clinics. The IMSS reached 125,000 new employees in this period.

According to the Mexican Institute for Competitiveness (IMCO), the budget of the Ministry of Health has decreased more than 20 percent during the sexennial and

COFEPRIS concluded a new

more than 16 million Mexicans

classification scheme for medical

lack some form of financial health

devices that will allow the

protection. The OECD Health

deregulation of 2,242 products

Spending Trends report places

with low risk to health.

Mexico second last (out of 34) for the lowest health expenditure

According to ProMéxico, in 2017, Mexico became the leading

per capita in the OECD, above Colombia.

exporter of medical devices in Latin America and the eighth

The Ministry of Health registered

producer internationally. The

that the combined prevalence of

same year, ProMéxico reported

overweight and obesity rose to

t h a t t h e co u n t r y ex p o r te d

72.5 percent from 71.2 percent

medical devices worth US$9.4

between 2012 and 2016. The

billion to the US, Italy, Germany

2017 OECD Obesity Update

and France.

ranks Mexico among the leading countries for adult obesity, next

Over the course of the Peña Nieto administration, COFEPRIS

to the US, New Zealand and Hungary.

a p p rove d 5 4 0 re c o rd s f o r generic medicines related to

In 2017, Mexico ranked No. 1 for

71 percent of the causes of

teen pregnancies among the 34

mortality in Mexico. This allowed

members of the OECD. According

a reduction of up to 70 percent

to ENAPEA, Mexico has 77 births

in the price of drugs.

per 1,000 female adolescents.

NEGATIVE

In 2012, 78.6 percent of the

POSITIVE

191

| ELECTION RESULTS

THE SHIFT IN POWER The July 1 elections brought the biggest change in the history

President-Elect López Obrador, held less than 3 percent of

of Mexico’s federal executive power history. The country

the chairs in the Deputies chamber for the 2012-2015 period

now has for the first time ever a president that is not from

and had no representation in the Senate for the 2012-2018

one of the biggest and oldest parties PRI or PAN. But the

period, it has now jumped to holding over 40 percent of each

legislative power has also seen a tremendous shift. That

chamber. The Mexican people have spoken, and wielding

same day, Mexicans also voted for the Senators and Deputies

the power in both chambers, it remains to be seen how the

that would represent them. While MORENA, the party of

President-Elect will act for the benefit of the country.

Mexico’s benchmark

BIGGEST WINNERS

stock index, the S&P/BMV IPC,

Company

Opening 2 July

Closing 2 July

Variation

Company

Opening 2 July

Closing 2 July

Variation

plummeted 7.6

LACOMER UBC

20.77

21.77

4.81

CIE B

20.80

18.90

-9.13

AEROMEX

26.99

27.94

3.52

VITRO A

61.00

57.85

-7.50

GSANBORN B-1

19.00

19.53

3.33

PE&OLES

355.24

331.38

-6.93

GENTERA

17.67

18.13

3.19

CIDMEGA

43.00

-6.91

SARE B

0.035

2.94

PINFRA

141.00

136.35

-5.31

percent in May, marking its biggest one-month decline since February 2009.

RE LA TI VE

Source: BMV

ITY OR J A M

2 2 2

14 11

SENATORS IN THE CHAMBER IN 2012-2018

12 Y ORIT MIN T RS FI

192

BIGGEST LOSERS

55 PRI 34 PAN 19 PT 8 Independent candidates 7 PRD 5 PVEM

HOW ARE MEXICAN SENATORS ELECTED? The Mexican Senate is composed of 128 seats. 64 of Mexico’s senators are elected by simple majority. Every state is represented by three senators. Each party or

coalition nominates a “formula” composed of two senators. The formula that earns the most votes earns two seats in the Senate for its two candidates. Another 32

senators are elected by the “first minority” system. The party that earns the second-

highest number of votes can send one of the two senator candidates it nominated. The remaining 32 seats in the Senate are assigned according to the principle of proportional representation and are dubbed plurinominal deputies.

42.1% Together We Will Make History coalition (MORENA, PT, Social Encounter Party)

PLURINOMINAL SEATS

25.6% For Mexico in Front

coalition (PAN, PRD, Citizens' Movement)

12.6% Everything for Mexico coalition (PRI, PVEM, New Alliance)

6.8% PRI 2.2% PVEM 2% Independent candidates

1.3% MORENA 1.1% New Alliance 1% PAN 0.9% Citizens' Movement 0.2% PRD 0.1% PT 0.1% Unregistered candidates 0.1% Social Encounter 4.1% Spoiled ballots Source: Senate of Mexico

2018 STATE GOVERNMENT ELECTION RESULTS

MORENA-PT-PES Citizens' Movement PAN-PRD-MC PAN-MC PAN-PRD-MC-PSI-CPP

2018 PRESIDENTIAL ELECTION RESULTS AND PERCENTAGES 193

53.19% AMLO

Source: INE

DEPUTIES IN THE CHAMBER IN 2012-2015

210

22.27% Anaya

16.40% Meade

214 PRI 113 PAN 99 PRD 27 PVEM 12 Citizens'

5.23% Rodríguez

12 MORENA 11 PT 10 New Alliance 2 Independient candidates

Movement

14 8 5 1

HOW ARE MEXICAN DEPUTIES ELECTED? There are 500 seats in the Mexican Chamber of Deputies. Each of the 300 uninominal deputies that occupy them are elected by simple majority. They each represent one of

200

the 300 electoral districts into which Mexico is divided. The remaining 200 deputies are elected by proportional representation and are dubbed plurinominal deputies. No party can have more than 300 deputies in total or have more than 8 percent more votes than they won in the election.

41.9% Together We Will Make History coalition (MORENA, PT, Social Encounter Party)

200

PLURINOMINAL SEATS

26% For Mexico in Front

coalition (PAN, PRD, Citizens' Movement)

12% Everything for Mexico coalition (PRI, PVEM, New Alliance)

7.8% PRI 2.6% PVEM 1.3% PAN

1.3% MORENA 1.2% New Alliance 0.9% Independent candidates 0.5% Citizens' Movement 0.2% PRD 0.1% PT 0.1% Unregistered candidates 0.1% Social Encounter 4% Spoiled ballots Source: Mexico's Chamber of Deputies

| PROFILES

ANDRÉS MANUEL LÓPEZ OBRADOR President-elect of Mexico

Andrés Manuel Lopez Obrador (AMLO) started his political career in 1976 by supporting the candidature of Carlos Pellicer as Senator for the state of Tabasco. The next year he became the Director of the Indigenous Institute of Tabasco. After the creation of the Democratic Revolutionary Party (PRD) in 1989, AMLO 194

was named president of the party in Tabasco. He was PRD’s President from Aug. 2, 1996 to Apr. 10, 1999, a period during which the party gathered the widest national presence since its creation in 1989. On Dec. 5, 2000, AMLO became the Mayor of Mexico City. Among his achievements are the creation of programs to support the elderly, single mothers, unemployed, rural producers and micro-businessmen, together with major infrastructure projects such as Periferico’s second floor. His first attempt to become President of Mexico began on Aug. 11, 2005. He was supported by PRD, the Working Party (PT) and the Convergence Party. After his loss, he published a document called Nation Project on March 20, 2011. After that, on Dec. 9 of the same year, he registered as pre-candidate to run for the presidency for a second time, supported by the same parties. Again, he was unsuccessful. After creating MORENA, AMLO became President of the party’s national council on Nov. 20, 2012. He held that position until Dec. 11, 2017. One day later AMLO registered as precandidate for the presidency for the third time, representing the coalition MORENA, PT and the Social Encounter Party (PES). On the evening of July 1, 2018, AMLO registered a consistent lead during the ballot counting process, leading to his opponents recognizing him as President-Elect and offer their congratulations. On July 3, 2018, President Peña Nieto met with AMLO in the National Palace to discuss the transition plan of both administrations.

“Medical attention and medications will be free. We will comply with what is established in the fourth article of the Constitution, which is now a dead letter because millions of Mexicans cannot get medical attention without paying for it. This is part of what we refer to as a well-being state. Mexicans will have safety from the cradle to the grave and this includes medical attention” Andrés Manuel López Obrador, July 22, 2018

JORGE ALCOCER VARELA Proposed Minister of Health

During the next six years, Jorge Alcocer Varela (Mexico City, 1946) will lead the Ministry of Health in Andrés Manuel López Obrador’s administration. An internationally-recognized researcher, his appointment has been well-received by the opposition, achieving a consensus among those seeking a new way of understanding the industry and among those who desire a continuation of the public policies initiated during the previous administration. Alcocer, a surgeon, graduated with honors from the National Autonomous University of Mexico (UNAM) in 1970. He obtained specialties in internal medicine, rheumatology and clinical immunology from the National Institute of Nutrition and in 1980 he took a postgraduate course in immunology at the ICRF Tumor Immunology Unit at the University of London, England. In 2007, Alcocer received a Doctorate in Medical Sciences from UNAM. He is currently a Researcher Emeritus in Medical Sciences at the National Institute of Medical Sciences and Nutrition Salvador Zubirán (INCMNSZ) and Head of the Intellectual Property Unit at the same institute. He was appointed National Researcher Level III in 1989 and National Researcher Emeritus in 2011 by the National System of Researchers (SNI). In May 2015, Alcocer was appointed Researcher Emeritus by the National Institutes of Health and High Specialty Hospitals of the Ministry of Health.

“[Universalization of healthcare services] will be achieved through a strategy that strengthens public healthcare services and provides quality medical attention, it will guarantee transparency and an efficient coordination of state services.” August 08, 2018

195

| POLICY PRIORITIES

AMLO MAKES HEALTHCARE A PRIORITY The 2018 elections gave voice to many who were dissatisfied with the status quo and followed the voice promising change. Citizens voted en masse for Andrés Manuel López Obrador (AMLO), who won a majority of votes while his party, MORENA, also obtained an unprecedented majority in both chambers of government. Taken together, 196

AMLO and his incoming administration are in a unique position to determine public policy in the years to come. During his campaign, AMLO presented his Nation Project 2018-2024 in which public healthcare was named a key axis for the country’s growth. His plan’s stated goal is “to protect and guarantee the right to healthcare of all Mexicans in equal conditions.” The project decries the “worrying healthcare indicators that point toward the unequal access to the healthcare system associated with an extraordinary and growing inequality in healthcare systems.” It recognizes that the public healthcare sector continues to be the most important but laments that Seguro Popular’s policies have failed to guarantee access to healthcare services after 15 years. Moreover, the project specifies that the limited coverage offered by Seguro Popular leaves part of the population completely unprotected, especially those who do not have coverage through their workplace or who suffer from a disease not covered by Seguro Popular. AMLO has identified many problems in existing health services that need to be addressed. Key among them is the unequal access to care depending on the region and the socioeconomic level of the individual, with Oaxaca, Chiapas Guerrero and some areas in the State of Mexico and Veracruz as the most affected. Moreover, these states and others lack healthcare centers and hospitals, which impedes the application of high-quality, integrated care services. The plan responds to the growing inequality in healthcare services, according to AMLO, indicating that although the public sector

continues to be the main provider of medical care, about

medication and medical supply waste, price disparities and

30.5 million people do not have access to any kind of care.

an unnecessary waste of resources.

In Mexico, individuals invest most of their income, 53 percent according to the Nation Project, on healthcare.

AMLO’s proposal agrees with national and international warnings about the challenges posed by an aging and increasingly obese population. The latter is the main cause

“We are working to guarantee the right to healthcare as it is established in the fourth article of the constitution, which is a dead letter as now it is not guaranteed” July 31, 2018

behind the rise of chronic diseases, such as diabetes, which is expected to cause 20,000 amputations per year and 100,000 cases of kidney damage, according to the report. Other problems identified include chronic noncommunicable diseases, which constitute 80 percent of the main mortality causes, according to the Nation Project. The project also singles out the number of deaths during childbirth and the 12,000 children who do not survive their first birthday, two problems that are mainly concentrated in rural, marginalized areas. The Nation Project´s concerns include low rates of breast cancer detection, antimicrobial resistance, low vaccination rates and teen pregnancy.

AMLO’s plan includes strengthening the public health system and turning it into a preventive model to improve medical care and quality of life. In addition, it establishes the objective to provide universal medical care, covering all medicines and public services at hospitals and clinics. Care will be accessible and free for all. The president-elect said universal care is necessary to reduce out of pocket expenditures and because of the rise of chronic diseases. Furthermore, this document decries the little attention that previous administrations placed on prevention and promotion of healthcare, especially considering that the socioeconomic conditions for most of the population make appropriate nutrition and adequate exercise next to impossible. Other matters addressed include the growing rates of tobacco, alcohol and illegal drug consumption

“Every medicine bought by the government will be acquired through a consolidated sale, which will result in a great deal of savings. For all tenders, citizens and a UN transparency organization will act as observers”

among a young population.

July 31, 2018

The Nation Project also highlights the extremely low

To address these problems, AMLO’s Nation Project identifies

investment made in healthcare, with only 2.8 percent of

nine principles on which to act. The first is good governance

public funds allocated to the sector. In addition, it points

with an ethical commitment to guarantee transparency,

to the misuse of resources, since the Superior Audit of the

efficiency and honesty. The second is the universalization

Federation established that 20.6 percent of those funds is

of healthcare to ensure equal access to quality services for

potentially misused. The project also seeks answers to the

all citizens. Third, priority is given to the poorest and those

shortage of hospital infrastructure for first-level care, as well

who have been excluded from the system to ensure that

as specialized care and the lack of doctors and nurses.

all citizens have equal access to care. Fourth is equality for the development of policies and programs that reduce

Several of AMLO’s campaign policies focused on what he

inequality in healthcare. Fifth is a growing focus on prevention,

and many Mexicans considered one of the biggest problems

prioritizing education, promotion and protection. Sixth is to

facing Mexico’s economy: fighting corruption. Corruption

involve the population in the design and execution of policies

costs 20 percent of total healthcare spending, according to

and programs. Seventh is intersectionality to ensure that the

KPMG. Hence, AMLO is pointing the Nation Project directly at

goals for a healthy life are included in all public policy. Eighth is

corruption, stating that the diversion of resources is among

constant evaluation and transparency to fight corruption and

the main causes for the decline in the quality and effectiveness

guarantee the proper functioning of the system. Finally, the

of all services provided. The Nation Project clearly decries

Nation Project ensures solidarity to finance the system with a

the lack of a unique information system, which leads to

fiscal policy based on proportional contributions.

197

| THE NATION PROJECT

THE NATION PROJECT: A BREAKDOWN AMLO’s Nation Project outlines his goals and expectations for the next six years regarding healthcare policy. His proposals are mainly focused on increasing access to care. While some of his policies are positive for the industry, others are likely to lead to uncertainty

The president-elect’s policies concerning healthcare have

common goals involving all public providers of care

not been totally clear. AMLO’s Nation Project addresses the

at state and federal levels.

areas that he considers most important in healthcare but

• It will be necessary to establish goals for all

there are few details on how the outlined principles will be

healthcare suppliers that will be monitored by

implemented. What is clear is that during his presidential

citizens.

campaign, AMLO guaranteed universal access to care for all Mexicans. 198

Mexico has before tried to implement a universal healthcare program but has yet to succeed. If it is achieved, it would radically change the health system, but it would also result in great benefits for a large portion of the population that has been overlooked so far. It would also mean an expansion of healthcare services, which in turn could translate into

Participation and social control.

• The construction of a new model requires a new ethic on the part of the public sector that prioritizes dignified, humane, efficient and technicallycompetent attention. • The active participation of all involved in the healthcare system through continuous dialog based on information will also be necessary.

business opportunities. The Nation Project is the guideline for the policy that will be developed over the next six years. Here are AMLO’s expectations:

Fight corruption and improve administration.

• The transparency in the use of all public resources will be prioritized.

Transform the current model of healthcare to have a primary care focus. This strategy will solve 80 percent of primary care problems.

• Products will be acquired through tenders and a unique national registry of the states of the purchasing, distribution and use cycle will be employed.

• This new model should accompany people throughout their lifetime and organize patient contact with hospitals and specialists through integral networks of care. • A key process for this model will be care units in the

• The administration will match its services according to needs to eliminate bureaucratic barriers.

workplace and working alongside the population to strengthen the role of health authorities in epidemiological labor and sanitation security.

Strengthen transversal collaborations with other government departments and the industry.

• The goal of these alliances is to modify bad habits in daily life and the workplace and promote an environment that favors collective healthcare habits.

Strengthen and open the public system of healthcare in terms of infrastructure and human resources.

• This model will prioritize primary care and midcomplexity units in unfavorable regions • Create an integral six-year plan to increase and strengthen the public healthcare system and address

Promote a national policy of medications and other medical supplies.

• This measure will guarantee the sustainability of the system by pushing forward national production by public and private organisms. • Pharmacovigilance, especially in the case of antibiotics, will also be strengthened.

Guarantee the necessary financing and a new structure of the public healthcare sector.

• The project proposes increasing public financing by a minimum of 1 percent of GDP.

Quality and warmth in healthcare services.

• Improving quality does not depend on isolated administrative interventions, but on a series of sustainable measures that ensure the availability of human resources, supplies and infrastructure.

199

• Warmth will be a consequence of a culture that will place humanism, the patient and community service

order for authorities to promote a healthy lifestyle and prevent policies that might damage health.

at the center.

Implement an effective emergencies model.

11. Healthcare research. • Research will be prioritized in the areas of chronic

• This system will promptly answer all emergencies,

diseases, skeletal muscle, renal insufficiency, mother-

including strokes and trauma due to accidents,

child nutrition and those derived from climate

violence or natural disasters by using all public

change and environmental problems.

services.

10.

Establish a pact for public health that will set the basis for the adequate approach to the socioeconomic healthcare determinants and environmental factors.

12. Information and evaluation systems. • Solid and trustworthy information will be used to evaluate the system and for all decision-making related to healthcare. • This will place the population’s health as a

• To accomplish this, it will be necessary to incorporate

national priority and allow citizens and evaluating

WHO’s recommendations, which indicate that it is

organizations to have the necessary data available to

necessary to include “healthcare in every policy” in

guarantee the improvement of healthcare results.

| INDUSTRY WISHLIST

200

WHAT IS ON YOUR WISH LIST FOR THE NEW ADMINISTRATION TO STRENGTHEN MEXICO'S HEALTH INDUSTRY?

Considering COFEPRIS’ regulatory responsibilities in many sectors, its competence should not be linked to political changes in the country. The effective operation of the industry under clear regulatory conditions only provides benefits to patients. COFEPRIS’ administration before 2011 was out of line with international standards and

JULIO SÁNCHEZ Y TÉPOZ Federal Commissioner of COFEPRIS

lacked the recognition of international regulators. Today, COFEPRIS is recognized by WHO and PIC/S. We have set the bar very high and whoever follows must reach these standards.

201

FRANCISCO KURI BREĂ&#x2018;A Director of New Developments at Landsteiner Scientific I think it is necessary to continue with the effort to have an internationally recognized regulatory agency and to influence what it means to be healthy in Mexico. Also, health policies related to the supply of medicines must be reviewed because this is a great opportunity for governments. There are commendable governmental efforts, such as pharmacy surveillance and medical education, aimed at making doctors, nurses and consumers more aware when reporting adverse outcomes. I think the focus of the industry and public health institutions should be on those topics:

OCTAVIO VIAL Director General of TESIS Favorable technical reports should be an obligation for registrations and the authorities should continuously audit third parties to understand our procedures. We learn significantly from the audits and apply the recommendations to provide a better service. This allows the companies to focus on marketing and sales without worrying about how long the registration will take.

education and medicine supply.

FRANCISCO MORALES Director of Healthcare Division at 3M The central focus should be improving the health of the population and patients. In a health system, medical devices are key to improving prevention, which can only be achieved with greater inclusion of health technologies. A four-year range for the population to have access to technologies and innovation is too long and only hinders access to healthcare. These processes must be rationalized or at least equated with the time it takes for approval in the private sector.

| INDUSTRY WISHLIST

FRANCISCO LLAMOSAS President of Grupo Valore

It is extremely important to continue developing the local market through the generation of public policies that mandate insurance in every state in Mexico, especially car insurance. Specifically, for health insurance, 202

the sector would greatly benefit from making health insurance fully tax deductible. This would be extremely beneficial for all involved as it supports savings, promotes business and motivates people to use private health services, resulting in savings for the public sector.

CRISTÓBAL THOMPSON Executive Director of AMIIF All players in healthcare agree that the sector must become a priority for the country as health is the basis of economic development and social inclusion. No matter who leads the country, healthcare must be a priority. Healthcare faced many budget cuts during the past seven years. In 2009, health expenditure in Mexico was 6.2

VÍCTOR SOTO Director General of Distribuidora Levic

percent of GDP; in 2016, that percentage fell to 5.8 percent. Healthcare has been put aside by the

Health is a priority for all citizens. Removing the plant

current presidential administration, a significant

requirement was a hard hit for local pharmaceuticals

problem considering that epidemiological and

and recent plans to eliminate bioequivalence tests made

demographic changes will demand more from

in Mexico will also be a significant problem for Mexican

the sector. Besides increasing the budget, it is also

manufacturers. The pharmaceutical industry should be

necessary to raise the sector’s efficiency to ensure

made a priority for it to continue growing, generating jobs

that the budget is well spent.

and cash flow in the country.

LUIS FRANCISCO GALVÁN Vice President and Head of Pricing Latin America at SCOR There is little awareness of the importance of insurance and the government could play a greater role in improving that. For instance, the 2017 earthquakes in Mexico City shed light on how little home insurance coverage Mexicans have. Mexico City’s government announced that those who were up to date with their property tax payments were covered for damages but that only granted access to governmental funds for some expenses, which proved to be insufficient to deal with the damages. The government itself would benefit from promoting home insurance as a

ANA LONGORIA President and General Director at Novartis

good prevention scheme to recover the significant expenses caused by the earthquakes.

Rather than asking for something to solidify the health system, I would say Novartis' goal is to

It is extremely important to continue developing the local market through the generation of public policies Grupo Valore

offer help to achieve this purpose. We offer our talent, which is our most important asset. While doing this, we want to continue being an ally of the authorities and the health system to face the challenges that are shaping the future of health and social welfare. From there, there are very solid foundations on which the government and Novartis can build a positive relationship for the benefit of patients in Mexico.

ANNE ENGERANT Director General Mexico of Reckitt Benckiser

We believe that it is necessary for all players to work together if we want to have an impact. The next administration should create more joint programs wherein NGOs, government, regulators, medical associations, the industry, trade partners and media can all work together to tackle key health issues. The UK did that to reduce teenage pregnancy and this multiparty approach is the best proven way to have a real effect on people’s health.

203

| INDUSTRY WISHLIST

JUANA RAMÍREZ CEO and Founder of SOHIN The incoming administration would do well to establish a “point of no return.” The current administration established the formalization of the National Prevention Plan of Cancer by the Ministry of Health. Mexico is one of the few countries in the world with its own national cancer plan and an infrastructure that monitors cancer throughout the country. The current administration also implemented the National Cancer Registry, of which new projects are now under development, although we will see results from this initiative in the next 204

five to 10 years.

PAULINA ESCOBEDO Director General of B. Braun Medical

This administration also made great advances to promote entrepreneurship in Mexico through

There has been an important evolution since the

the consolidation of the INADEM. Furthermore,

Health Reform, when the Seguro Popular was

investment funds grew and many incubators and

implemented, and achieving health coverage is much

accelerators were recently developed. Mexico has

more important than it was 10 or 15 years ago. It is

great capabilities to become Latin America’s Silicon

still a challenge for our country to allocate budgets

Valley but the country needs more investment.

and attention in the government’s agenda, to address certain conditions, especially chronic degenerative

The Mexican Entrepreneurs Association (ASEM)

diseases, from the perspective of prevention. In the

helped get the entrepreneurship law approved,

next few years, I think that the catalog of Seguro

which now permits the creation of companies

Popular coverage should be complemented; as well

online within a single day and without partners. We

as in terms of medical devices, to meet the important

also pushed forward the “re-entrepreneurship” law,

need for investment in infrastructure, both hospital

which permits the easy and fast liquidation of a failed

and equipment, to optimize medical care.

company. In Mexico, it is often more expensive to close a business than to open one, so those who have failed once are often reluctant to try again. This law was implemented in June 2018. The country also needs to promote entrepreneurship among women as only 11 percent of entrepreneurs in the country are female while, for instance, in Peru it is 29 percent. We need to continue supporting these initiatives and the like to develop an affordable healthcare system

We have a proposal for the new government to increase investment in health by 1 percentage point Pfizer Mexico

and provide a greater quality of life to all Mexicans.

DAVID LÓPEZ Country Manager at BioMarin Pharmaceuticals No doubt, the key will be to simplify the Drug Access Process, which is duplicative and quite long in terms of time (four to five years) and less than 10 percent of products are approved. The system is not gaining quality health services or coverage since innovative products must face a series of barriers. In the end, patients suffer more complications and the mission of providing more healthcare to that population cannot be achieved.

JUAN PABLO NAVA Commercial Director of NYCE

205

RODRIGO PUGA President and Country Manager of Pfizer Mexico It is necessary to make healthcare a strategic priority. There are many areas to address in terms of prevention and efficiency, but it is also necessary to increase investment. If the country does not invest in health, everything else will only improve marginally. Today, Mexico invests less than 6 percent of its GDP in healthcare, while the OECD average is 9 percent. We are aware that this number will not increase overnight but as part of AMIIF, we have generated a proposal for the new government to increase its investment in health

The government should increase its participation in programs that support the healthcare sector. Legal certainty is one of the main areas that should be prioritized for foreign companies to continue investing in Mexico. For the pharmaceutical industry to continue investing in the country, the government should develop strategies to prevent a brain drain through the generation of research centers.

by 1 percentage point in five years. This would result in a significant improvement over the current situation.

ROGER BROWNRIGG General Manager of Johnson & Johnson

The new administration should have an open dialogue with the industry. To t a c k l e M ex i co â&#x20AC;&#x2122;s h e a l t h c a re challenges, it is necessary for both to work together and take risks. The reform of the General Healthcare Law is also an important matter to address but it has been put aside by the current administration.

Galderma production line

MASS-MARKET PRODUCTS

Regulatory changes prioritizing consumer safety and medication efficiency have

greatly encouraged the growth of the generics market, which now accounts for the vast majority of sales in volume, if not in value. In a country where prices play an important role in decisions when purchasing a drug, generics have been welcomed with open arms. Moreover, this market is expected to continue growing in Mexico and across the world, led by patent expirations of blockbuster medicines. Another area that has potential to directly improve patient care and reduce healthcare expenditures is the use of OTC medications.

This chapter addresses the main market opportunities and the challenges faced by generics and over-the-counter drugs to determine market niches in Mexico. It also includes products that are sometimes considered secondary, but which in reality are essential for the quality of life of individuals, such as those that target eye and skin care. These areas are already strong in Mexico but have a great deal of room to deepen their market penetration. This chapter also includes leaders in these two sectors who discuss how to improve market penetration while addressing basic problems.

207

CHAPTER 8: MASS-MARKET PRODUCTS 210

ANALYSIS: Promising Growth for an Already Large Market

212

VIEW FROM THE TOP: Carlos Berzunza, CANIPEC

213

VIEW FROM THE TOP: Rafael Maciel, Mexican Association of Generics (AMEGI)

214

VIEW FROM THE TOP: Américo García, Apotex

215

INSIGHT: Juan José Aguirre, Grupo Bruluart

216

VIEW FROM THE TOP: Mariano De Elizalde, Sandoz Mexico

217

VIEW FROM THE TOP: Efrén Ocampo, Grupo Neolpharma

218

VIEW FROM THE TOP: Gurulinga Konanur, Hetero Mexico

219

VIEW FROM THE TOP: Francisco Kuri Breña, Landsteiner Scientific

220

VIEW FROM THE TOP: Benjamín Vega, Allen Laboratorios

221

VIEW FROM THE TOP: Iñaki de Izaurieta, Mavi Farmacéutica

222

INSIGHT: Manish Mutha, Micro Pharmaceuticals Mexico

223

VIEW FROM THE TOP: Aude Boclé, Biocodex

224

VIEW FROM THE TOP: José Luis Rojas, Ultra Laboratorios

225

VIEW FROM THE TOP: Dagoberto Cortés, Sanfer

226

VIEW FROM THE TOP: Patrick Devlyn, Grupo Devlyn

226

INSIGHT: Miguel Marín, Industrias Sintoquim

227

VIEW FROM THE TOP: Corrado De Gennaro, Galderma

228

VIEW FROM THE TOP: Alejandro Rodríguez, Essilor Mexico

Elda Hernández, Essilor Mexico

229

VIEW FROM THE TOP: Anne Engerant, RB® Health

230

INSIGHT: Marco Machado, Augen

231

VIEW FROM THE TOP: Rémi Martini, Laboratorios Expanscience

209

| ANALYSIS

PROMISING GROWTH FOR AN ALREADY LARGE MARKET Although the pharmaceutical sector has grown steadily in recent decades, a sector that is now booming is generics. The market for these medications has increased at a nearly exponential rate in Mexico. Over-the-counter and dermocosmetic medicines are also growing at an accelerated pace The growth of the Mexican generics market has been

While the sale of generics is larger in volume, in costs

precipitous. The sale of generics was approved just a bit

it represents only 49 percent of the medicine market.

over 20 years ago due to efforts led by the Ministry of However, the generics segment is only expected to

years, their growth has significantly accelerated. While

continue growing at a global level and reach US$381

in 2013 sale of generics in Mexico amounted to US$3.8

billion by 2021, according to Zion Market Research. It

billion, according to Deloitte, the consulting company

is expected that part of this growth will be a result of

forecasts sales to nearly double to US$6.8 billion by 2018.

the expiration of patents in the coming years. While

This growth is not surprising when considering that these

innovative companies are finding strategies to expand

medications are on average 60 percent less expensive

patents, including filing additional patent protection for

than their branded counterparts, according to COFEPRIS.

new routes of administration, new formulations or new uses of a previously known drug, around 26 patents are

Behind the almost exponential growth of this market is

expected to expire in 2018, according to online news

the expiration of patents, a regulatory support entity

source MedCity News.

and a growing acceptance on the part of Mexican patients. “Since 2010, COFEPRIS has approved 550

Among those set to expire are blockbuster drugs such

generic medicines,” says Julio Sánchez y Tépoz, Federal

as Roche’s Rituxan, Amgen’s Neulasta and Pfizer’s Lyrica

Commissioner of COFEPRIS. “Our work with generics

and while generics or biosimilar versions of these drugs

is one of this administration’s greatest achievements,

are not expected to be available immediately, it is only

as these medicines cover 70 percent of Mexico’s main

a matter of time before there is an alternative in the

mortality causes and bring about a 60 percent overall

market. A recent report by Evaluate Pharma states that

reduction in costs. As more generics were introduced,

in 2018 a total of US$39 billion will be at risk due to

their overall costs went down.”

patent expiration, although the report expects losses will be limited to US$26 billion.

Now, eight out of 10 medications bought into the country are generics. The OECD states that Mexico has the largest

Generics sales are expected to continue growing. Global

penetration of these medicines, with 84.1 percent of all

generic sales are expected to reach US$84 billion in

medications in the country being generics. However,

2018, according to EvaluatePharma, and hit US$114

their reduced costs translate to smaller sales margins.

billion by 2024.

WORLDWIDE SALES RISK FROM PATENT EXPIRATION (US$ BILLION) WORLDWIDE SALES ATAT RISK FROM PATENT EXPIRATION (US$ billion) 80

8 7%

70 60

Total sales at risk

Expected sales lost

2019

41 2%

2020

2021

2022

——Market at risk

Source: Evaluate Pharma, May 2018.

Source: Source: CAAM, JAMA, VDA, KAMA, SIAM, AMIA, ANFAC, Automotive News, Data Center

27 19

2018

2017

2016

32 29

2015

2014

17 15

17 19

210

Health to decrease the costs of medical care. In recent

2023

2024

WORLDWIDE PRESCRIPTION DRUG SALES (US$ BILLION) WORLDWIDE PRESCRIPTION DRUG SALES (US$ billion)

1,137

1,070

926

872

789

769

600

743

751

800

830

1000

997

1200

1,204

1400

2014

Generics

2015

2016

2017

2018

2019

2020

2021

2022

2023

114

109

104

100

200

400

2024

Total

Source: Evaluate Pharma, May 2018.

COST-CUTTING THROUGH OTCs

damage, age spots and wrinkles. In Mexico, 79.2 percent

While generics bring significant savings for patients,

of the population uses some type of cosmetic product,

the Association of Over-the-Counter Manufacturers

according to CANIPEC. Between 2016 and 2017 the

(AFAMELA) proposes a different cost-cutting initiative:

personal care industry grew by 7 percent, says Carlos

letting individuals manage their care as they see best if

Berzunza, Director General of CANIPEC.

only in the cases of simple, common diseases, explains Ricardo Ramírez, Executive Director of AFAMELA.

However, the Mexican cosmetics and skin care markets are still behind others in the region. “Mexico has a

In early 2018, the association indicated that a total

mature cosmetics market that continues growing but is

of 15 million Mexicans visited public sector doctors

still behind Brazil, Argentina and Chile in use per capita.

unnecessarily and suggested that promoting the use

We want the Mexican consumer to shift toward the

of OTC medications for ailments that can be easily

use of cosmetics at a health, preventive treatment and

diagnosed would have saved the public sector a total of

dermatological level,” says Miguel Ángel Marín, CEO of

MX$43.5 billion.

Industrias Sintoquim.

With about 1,200 different OTC brands, the country has

Cosmetics can provide much more than an aesthetic

the second-largest market for these products in Latin

effect since modern cosmetics incorporate products

America. “The OTC market is growing not just in brands,

that can treat skin ailments and even help prevent

but also in the presentation of different products,” says

diseases such as cancer due to sun exposure, especially

Ramírez. These products also fill a market niche as they

if these products are used in line with guidance from

can be bought at convenience stores, such as OXXO,

professionals.

or online. The OTC market is attractive enough to gain the attention of Big Pharma, which is developing its own lines. “We will launch a few products for our OTC line. We plan to introduce those new medicines into the Mexican market

Global generics sales are expected to reach US$84 billion in 2018

by the second half of 2018,” says Rodrigo Puga, President and Country Manager of Pfizer Mexico.

A great deal still needs to be done to increase the penetration of dermocosmetics in the country. A major

DERMOCOSMETICS: MORE THAN JUST

challenge is the current lack of dermatologists. “In

AESTHETICS

Mexico, dermatology has a lower market penetration and

Beauty and dermatological care are not insignificant

is not part of the public institutes’ basic lists. The country

matters. Valued at US$532.4 billion in 2017, the cosmetics

needs more dermatologists; now, Mexico graduates

market is expected to be valued at US$805.6 billion by

about 40 dermatologists per year and the country has

2023, according to OrbisResearch. It is also expected

approximately 3,000 in total,” says Corrado de Gennaro,

that this market growth will be driven by an aging

General Manager for Mexico and North Cone Latam

population concerned about the prevention of skin

for Galderma.

211

| VIEW FROM THE TOP

PERSONAL CARE: THE FINAL FRONTIER FOR HEALTHCARE CARLOS BERZUNZA Director General of CANIPEC

212

Q: CANIPEC groups companies in the personal care and

products with the goal of improving the culture of reading

household products industries. What impact do these

product labels. The Cosmep Code, our third program, is a

industries have on Mexicoâ&#x20AC;&#x2122;s economy?

14-principle code of self-regulation and advertising ethics

A: Companies represented by CANIPEC improve the quality

designed to provide advertising advice to companies that

of life of the people and generate a significant indirect effect

collaborate with us.

on the Mexican economy. In the last two years, the personal care industry has grown by 7 percent, while the household

CANIPEC believes advertising is a valuable communication

products industry reached growth of approximately 5

and information tool for consumers and companies. For

percent between 2016 and 2017. Regarding foreign trade,

this reason, we provide assistance to companies on the

both industries represent a trade surplus since last year we

use of endorsements, sustainability and environment,

exported more than US$3.4 billion and we imported around

among other subjects. We want to change the behavior

US$2 billion. Also, the member countries of NAFTA, the

of consumers in Mexico so they choose the products that

Pacific Alliance, the countries of Central America and, to

best improve their quality of life.

a lesser extent, those of MERCOSUR are our commercial partners.

Q: How does CANIPEC work with regional and international mechanisms to promote export diversification?

Q: Which products managed by CANIPEC have grown

A: We participate with the Council of the Cosmetics,

the most and how does the chamber help to maintain

Personal and Household Care Industry of Latin America

this growth?

(CASIC). In the framework of the Pacific Alliance, chambers

A: The personal care industry enjoyed considerable growth

of commerce, COFEPRIS, other regulatory authorities,

in skin and hair care, followed by odor modifiers. CANIPEC

CANIPEC and CASIC agreed to eliminate 92 percent of

supports consumers through campaigns that provide

the technical obstacles for trading cosmetics. This protocol

advice on the selection and purchase of hair care products,

also includes a sectoral agreement that specifies better

which also encourages the use of other categories that

regulations for the cosmetics industry. The next step is to

improve their quality of life.

follow the same path for the home care industry. CANIPEC is in the process of presenting a written and joint statement

Q: What specific actions does CANIPEC take to support

to the representatives of the Pacific Alliance regarding the

informed consumption and good business practices?

industry in Mexico, Chile, Colombia and Peru.

A: We have three programs to promote social responsibility and conscious consumption. CANIPEC has taken the

Q: How does CANIPEC help SMEs develop artisanal

initiative to provide scientific information and thus expose

products? What services does the chamber offer?

the myths and prejudices that exist about certain products.

A: We have developed a virtual library called CANITECA

Beauty and Wellness, our first digital campaign, encourages

that contains information on the legal and regulatory

informed consumption regarding personal care. Our second

framework of the personal and household care industries to

campaign is called Taking Care of Your Home. It provides

support SMEs entering the market. This virtual library also

information on the use, content and benefits of household

has information on protocols, authorities, workshops, news and publications related to both industries. We provide companies with information about changes in regulations

The National Chamber of Cosmetic Products Industry

and workshops to help them manage these updates and

(CANIPEC) brings together the main companies producing and

then follow up on them. CANIPEC provides an integral

distributing cosmetics in Mexico, such as Colgate-Palmolive,

service to guide companies through the regulatory and

Avon, Jafra, EstĂŠe Lauder Companies and Unilever

legal framework.

VIEW FROM THE TOP |

LOCAL ASSOCIATION LOOKS TO PROTECT BLOOMING GENERICS INDUSTRY RAFAEL MACIEL Presidente of the Mexican Association of Generics (AMEGI)

Q: What trends are changing the landscape for Mexican

we launched a workshop on regulations related to the

pharmaceutical distribution?

advertising of medicines with the aim of clarifying

A: Medicine distribution in the past depended mainly on

the doubts that our members may have. Considering

large wholesalers, some of whom have disappeared in

COFEPRISâ&#x20AC;&#x2122; experience in the area, the council has allowed

recent years. Instead, the so-called regional distributors

authorized parties to begin evaluating advertising materials

have taken great strength and on the other hand the direct

generated by the pharmaceutical industry. Doctors were

delivery of drug manufacturing laboratories to the large

initially reluctant to prescribe generic medications, but we

pharmacy chains, as well as to the supermarkets, has also

have provided them with enough information to change

changed distribution in recent years. Regarding to the

that initial hesitation.

medicine sales points, large chains and supermarkets are again the ones that grow and, in contrast, independent

Q: Considering the strong competition in the generics

pharmacies have decreased their participation in a constant

market, how can companies differentiate themselves?

way for the last years.

A: Companies can differentiate themselves by continuing to manufacture quality products and present them

Q: How is the generics market growing and what does it

attractively. Other differentiators can be customer service,

represent at this point?

providing consumers clear information on the product

A: Eighty-five percent of all drugs sold in 2017 in Mexico

they are acquiring and teaching salespeople how to

were generics. According to Knoblock Group, the

properly introduce the product and the benefits these

pharmaceutical sector sold a total of 985.7 million units

provide to patients.

valued at MX$156 billion (US$8.97 billion) between February 2017 and February 2018. During those 12 months,

Q: What are the main international issues that AMEGI is

the generics market grew at a 3.9-percent rate. Although

lobbying for?

the total pharmaceutical market has approached US$15

A: AMEGI is part of International Generic and Biosimilar

billion some time ago, it has now been severely hit by the

Association (IGBA) and brings the operational principles

exchange rate.

from this international organization into Mexico. Canada, the US and Mexico, which are the three pillars of the

Q: How has direct patient demand for generics evolved

organization, are concerned about the potential outcome

in recent years?

of the NAFTA renegotiation, as current talks have not

A: Consumers are much more aware of the benefits of

addressed IP protection, data exclusivity or patent

generics and are beginning to request them from their

timelines.

doctors. All generics meet the requirements of quality and efficacy, so if a patient changes from one manufacturer to

We are also participating in other international agreements.

another the result will be the same. Pharmacy chains usually

With Europe, we are addressing topics concerning IP and

have two or three suppliers of the same medication and can

other regulations for the CPTPP, which showcases the

change it occasionally so patients can find products from

regionâ&#x20AC;&#x2122;s openness toward Mexico. Monthly meetings of

different manufacturers.

this group allow us to keep on track.

Q: How has the perception of generics changed among doctors? How can these professionals support the sector?

The Mexican Association of Generics (AMEGI) is a private

A: AMEGI informs doctors on the benefits of generics,

organization created in 2002 that brings together six generics

for which we are developing workshops together with

manufacturers operating in Mexico: Allen, Apotex, Hormona

COFEPRIS. For instance, at the beginning of 2018,

Laboratorios, Medi Mart, Randall Laboratorios and TEVA

213

| VIEW FROM THE TOP

FOREIGN EXPERIENCE FOR THE MEXICAN MARKET AMÉRICO GARCÍA Director General of Mexico and Latin America at Apotex

Q: How is Apotex positioned in Mexico’s generics market?

company enjoys the benefits of having invested solidly in the

A: Since I took this position over four years ago, we have

North American region and this allows the three countries

grown our sales in Mexico 70 percent and Apotex ranks

to complement each other in achieving Apotex’s goals.

fourth in units in the subsegment of generic drugs. In the 214

overall market, we are 15th for units sold. The company’s

Q: What actions is Apotex taking to maintain its

performance is good and we are seeing growth in the

competitiveness and growth, given the change in

double digits in the recent years.

presidential administrations? A: In times of electoral change, strategies should be more

Q: Last year, you opened Apopharma, a new division. How

clearly and transversally developed. The health industry

is this new project progressing?

has been waiting for a reform, but this has not happened.

A: Apotex has already launched medications for conditions

While Mexico not only must expand its coverage to improve

related to the central nervous system and this year we will

access to health, it must also address the conditions in

continue with new drugs for analgesia and cardiology.

the industry, because there is a gap and a fragmentation

Mexico is an atypical market for Apotex, because its

across different components of the health system. Apotex

pharmaceutical market and medical profile have very

has approached the government to prioritize the health

particular characteristics. The country has acute diseases

industry and health system.

that are present in developing countries and it is beginning to present the chronic-degenerative diseases that are seen

Q: How is Apotex preparing to face the possible outcomes

in more developed countries. Our strategy with this new

of the NAFTA renegotiation?

division was to first consolidate its presence in the market

A: Apotex is of Canadian origin, it has a strong position in

and then start growing to become a leader in chronic-

North America and its first market is the US. For this reason,

degenerative drugs. The growth rate of Mexico’s population

what happens with NAFTA is of vital importance for the

pyramid is trending older, which has created an opportunity

development of our business strategies and models. Under

for Apotex to bring its expertise from other countries

a positive scenario, Apotex would benefit from having a

into the Mexican market. Apotex is prepared to embrace

good commercial agreement with the US and Canada.

both sides of the market by diversifying its products,

We think the commercial relations in the region will be

building stronger relationships with the government and

maintained and pushed forward, more in the case of the

consolidating its brand.

US, where there is a shortage of medicines and where the health sector is highly relevant. In the worst case, if NAFTA

Q: How does Apotex use its position in North America to

goes down, Apotex has the geographic and commercial

its advantage?

tools to find a positive path to continue positioning itself.

A: Apotex is present in 115 countries, of which Mexico is a strategic key for medicine manufacturing. We have two

Q: How has Apotex’s Latin America expansion strategy

raw material plants here and the active pharmaceutical

evolved over the last year?

ingredients (APIs) in Mexico have proven to be highly

A: Apotex’s main internationalization strategy is to expand

reliable for Apotex’s drug manufacturing process. Our

to all Latin America. In the last year, we have expanded to El Salvador, Guatemala and Dominican Republic and we have consolidated our presence in Chile and Argentina. Our

Apotex is the largest Canadian-owned pharmaceutical company,

expansion continues in the Andean area mainly in Colombia,

with over 10,000 people employed worldwide in its research,

but it has been delayed because of climatic type IV zone

development, manufacturing and distribution facilities. The

requirements that created obstacles for the availability of

company produces around 300 generic pharmaceuticals

some products in the region.

INSIGHT |

A CHANGING STRATEGY FOR A CHANGING WORLD JUAN JOSÉ AGUIRRE Commercial Director of Grupo Bruluart

Some may fear change, but others see it as an opportunity.

which meant reduced sales of antibiotics.” The company

Grupo Bruluart, a Mexican pharmaceutical company, has

is seeing a recovery during the second quarter.

learned to respond and adapt to any market fluctuation to continue expanding its business, says Juan José Aguirre,

Changes arise continuously, albeit many are of the subtle

Commercial Director of Grupo Bruluart. Aguirre explains

variety, which is where new technologies can help, says

that this flexibility is necessary not just for his company,

Aguirre. “We are collecting all information from the

but for any participant in the pharmaceutical market. “The

market and the next step will be to analyze it using Big

pharmaceutical industry must continuously improve its

Data techniques. We have been evolving this area at a fast

processes, efficiency and quality.”

pace. In 2016, we did not have a department for business intelligence, and now we have several people doing that.”

Grupo Bruluart specializes in the development,

Grupo Bruluart, continues Aguirre, is also investing in

manufacture, distribution and commercialization of

technology to improve its distribution processes. “We are

generics, food supplements and medical supplies. The

working with our existing client base to link our system

group incorporates four companies: Brudifarma, Farmacias

to theirs to make distribution more efficient. The use of

GI, Bruluagsa and IM Bruluart. “Supply and demand

technology allows us to minimize missing products and to

is cyclical as every two or three years new regulations

detect accurate trends early. For instance, our technology

require drug manufacturers to renew or update their

allowed us to see how product stock diminished due to last

infrastructure,” says Aguirre. He adds that these renewals

year’s peak in conjunctivitis and to replace these products

can slow production, potentially leading to higher demand

as soon as possible. There is still significant room for growth

than supply. “Every six months we have to stop production

as these statistics are developed based on historic data of

to perform a comprehensive analysis and maintenance of

which we do not yet have enough.”

every area of the plant. Both regulators and manufacturers must properly administer these renovations to prevent

Incorporating these technologies and collecting information

pauses in production.”

are ongoing processes but Aguirre expects the company to improve its logistics distribution, address supply gaps

Despite cyclical fluctuations, Grupo Bruluart is focused

before they happen and react faster to unexpected

on growth. The company launched five products during

phenomena, such as earthquakes and hurricanes. “During

the second half of 2017 and the first half of 2018 as it

natural emergencies we have often noticed that we have

reorganizes its portfolio. Aguirre explains that the group

stock of a product far away from the area where it is needed.

plans to finish 2018 with five more launches, including the

We are certain that an appropriate use of technology will

antihistaminic desloratadine and combination drugs with

minimize these problems.”

ibuprofen and amantadine. “Our product portfolio is very broad, so we are reducing it by focusing on hormones,

The company had planned to expand to the US but the

antihistaminics, multivitamins and respiratory medication.

uncertain relationship between Mexico and its northern

We also have strong pain management drugs, including

neighbor have put a pause on those plans. “We put an

ibuprofen, naproxen and diclofenac. Many companies are

expansion into the US on standby and are now focusing

now prioritizing cardiovascular diseases but that market

on other markets in South America, including Colombia

segment is becoming increasingly saturated. We decided

and Peru. We expect to be able to enter those two markets

to focus on other niches.” Grupo Bruluart had set itself a 10

in 2019 with high-volume products that have lower profit

percent growth goal in volume for 2018. However, Aguirre

margins but which are still higher than in Mexico. We are

explains that the first quarter of 2018 was complex for the

also focusing on the Mexican market as we had problems

market. “We were hit by the short, dry and warm winter,

to fully supply it during 2017 and early 2018.”

215

| VIEW FROM THE TOP

BIOSIMILARS TO UNDERPIN FUTURE SUCCESS MARIANO DE ELIZALDE CEO of Sandoz Mexico

216

Q: One of Sandoz’s goals is to reach 1 billion patients. How

We have launched two biosimilar products in Mexico: an

close are you to that objective?

adjuvant therapy for chemotherapy and a growth hormone,

A: This is a global goal. In 2015, we reached 500 million

but our plan is to launch five biosimilar products in the next

patients and with the growth we are experiencing we will

four years in different therapeutic areas, such as psoriasis,

reach our target of 1 billion patients by 2030. Sandoz had a

rheumatoid arthritis and oncology.

great 2017, both globally and in Mexico, and as we continue to present innovative proposals in all markets, we will keep

Q: What are Sandoz’s plans in terms of research and

expanding. Our mission at Novartis is to offer high quality

manufacturing in Mexico?

at affordable prices.

A: Our biggest investment in research is in clinical studies of biosimilars and on bioequivalence studies for generic

Q: What role does Mexico play in the company’s

products. In 2016, we invested US$2.5 million. However, we

global strategy?

believe that it is possible to do much more than what we are

A: Emerging markets are key to Sandoz’s strategy. Latin

doing in clinical research conducted in Mexico, a country

America offers many opportunities and within this region,

that has great potential and capacity to take on more

Mexico is the second-most important market for us after

research opportunities. In manufacturing, Sandoz’s strategy

Brazil. Due to Mexico’s macroeconomic conditions, its

is to focus manufacturing in large specialized centers, so

strategic location and its market opportunities, the country

manufacturing here is not part of our strategy, although

represents the most interesting market for both Sandoz and

we have a small plant in Mexico that makes packaging and

Novartis. It was selected by Grupo Novartis as the location

performs quality control.

for all back office services for the Americas. Q: Sandoz is partnering with Biocon to manufacture and Q: What are the most in-demand therapeutic areas

commercialize biosimilars for immunology and oncology.

in Mexico?

What are your goals with this alliance?

A: In retail, we focus mainly on respiratory and cardio-

A: The purpose of this alliance is to expand our portfolio

metabolic health and antibiotics, but we also have an

of biosimilar products. Sandoz is a leader in biosimilars in

important hospital line. Our biosimilar products are world

the world and has the largest catalogue of this type of

leaders and in Mexico we were the first company to have

product in the market. We seek strategic alliances with

an approved biosimilar product under the new NOM-257. In

other companies that can help us strengthen our portfolio.

2017, we launched an oncology line and in 2018 we entered HIV. We believe that there is great opportunity in Mexico

Q: What is Sandoz’s strategy to compete in the generics

for high-quality products.

market? What other business options exist to diversify your investments and income?

Q: What niche therapies are a priority for Sandoz?

A: In Mexico, as in the rest of Latin America, there is a

A: For some years, biological products have been oriented

strong national generic industry with a significant market

to different niches. for this reason, increasing the number of

share; however, I think there are still many opportunities,

biosimilar products is one of the pillars in Sandoz’s future.

because there are many markets across the world with a low use of generics. I think companies must decide in which market segments they can be successful and provide

Sandoz is a division of Novartis dedicated to the production

a value proposition that complies with the demands of

of generics and biosimilars. It was launched in 1996. Sandoz

each country. Sandoz has decided where to establish

manufactures generics for areas such as dermatology, transplant

itself: biosimilars, oncology, HIV, high specialty and the

medicine, cardiovascular systems, CNS and hormone therapy

retail segment.

VIEW FROM THE TOP |

STRATEGIES TO ADDRESS LIMITED ACCESS TO CARE EFRÉN OCAMPO President of Grupo Neolpharma

Q: What market niches is Grupo Neolpharma targeting?

to depression. Following this vision, our core expanded

A: We are planning to introduce pain medications, which

from psychiatry to cardiometabolic diseases and chronic

are relatively little used in Mexico because there are very

disease-related pain. We are now analyzing an entry into

few products available to treat intense pain, an ailment that

other therapeutic areas as Mexico’s population is becoming

greatly diminishes a patient’s quality of life. A common

increasingly older thanks to the successful fight against

example is terminal cancer, which causes great suffering.

infectious diseases.

These patients require very powerful analgesics, mostly opioids. However, prescriptions for these medications

Q: Which new players can support the sector to increase

are low because doctors are reluctant to prescribe them.

access to care?

There also are few opioid providers in Mexico, which makes

A: Pharmacies can play an important role in increasing

these medicines difficult to find. To address this, Grupo

access to care, since they now generate the equivalent of

Neolpharma has developed an online pharmacy that

70 percent of medical consultations performed by IMSS,

can supply these medications. Access to opioids will be

especially in primary care. On many occasions, patients

safe and controlled to prevent abuse and our company

prefer to visit a pharmacy than go to IMSS, which means

is closely working with authorities to promote their safe

that IMSS is buying less medication for primary care

use. If their consumption is not controlled, they can be

patients. If patients pay their medication out of pocket,

used in a recreational way. Even so, Mexico is far from the

they do not take advantage of the contributions they

prescription opioid abuse that is affecting the US.

make to IMSS through their taxes. It is necessary to study this phenomenon and adapt to it. Supply channels for

Q: How is Grupo Neolpharma addressing Mexico’s gaps

medicines are changing and the sector needs to adapt to

in access to care?

these changes.

A: We must offer services and products in line with Mexico’s epidemiological profile, which varies depending on the

Q: What is the scope of Grupo Neolpharma’s

population’s age, gender and location of residence. Grupo

internationalization strategy?

Neolpharma’s role in addressing gaps in access to care is

A: Grupo Neolpharma has enough capacity to supply the

to increase the availability of high-quality products. We are

entire country and we have the capabilities and quality to

now offering 275 molecules in 1,200 dosages. Within the

compete internationally. We now have a plant in Mexico that

next three years, we will increase our capabilities by 50

is only being used to 66 percent capacity.

percent mainly in sterile products, which will address areas that are not currently being covered.

During the past five years, Grupo Neolpharma has grown at a double-digit rate, which led us to build more manufacturing

Universal access to care has been an important goal for

plants. Our new plant for injectables, which will have the

Mexico but achieving it has been a challenge. The main

capacity to manufacture 450 million units per year, will

problem is the fragmentation of the public healthcare

target both the national and the international markets.

system, which leads to duplication of services and gaps

Grupo Neolpharma works to international standards and

in access. It is necessary to unify these systems or to give

that will facilitate the exportation of our products.

patients the option to receive care at any institution. Q: How is Grupo Neolpharma adapting its research lines

Grupo Neolpharma is a Mexican pharmaceutical group that

and product offering to Mexico’s changing epidemiology?

incorporates three companies: Psicofarma, Neolpharma and

A: Since the creation of Psicofarma, our first company, we

Alpharma. While the company has several research lines, it

have focused on chronic diseases at all ages, from diabetes

focuses on the production of high-quality generics

217

| VIEW FROM THE TOP

CUERNAVACA: CORNERSTONE FOR MANUFACTURER’S FUTURE STRATEGY GURULINGA KONANUR Director General of Hetero Mexico

Q: How do you measure Hetero Group’s market penetration

integrated and we are considering product lines that will

in Mexico?

complement our existing portfolio including oncological,

A: In Mexico, we are predominantly a B2B player in APIs and

biotechnological, injectables and niche products.

the finished products segments so it is hard to measure our 218

market penetration, the market share or to come up with a

We see great opportunity in the biotech and injectables

100 percent predictable sales forecast. What influences our

segments. There are not many players with strong

market are government tenders and the performance of

manufacturing capabilities for high-quality, advanced

our partners in relevant segments. For instance, 2017 was a

biotechnological products and the same holds for

good year as some of our clients outperformed and some

general injectables, making these an interesting market

of our important clients got major shares in government

to enter. We are also exploring other niche segments or

tenders, which benefited us indirectly.

products lines.

With presence in over 120 countries, Hetero holds 30 percent of the global retroviral market

Q: What products does Hetero plan to introduce into the Mexican market in 2018? A: Our goal is to move increasingly closer to our clients and match their manufacturing needs. We entered the Mexican market with a very limited number of clients but have slowly and steadily raised that figure through our extensive work to serve the needs of our customers and

The year for us was one of consolidation, especially after

through the hard work of our sales team.

the challenges we faced in 2016. We have very positive expectations for 2018 but it depends on the performance

Q: What must be done to address the main medical

of our partners and clients.

issues in Mexico? A: Chronic diseases, such as diabetes, cardiovascular,

Q: Hetero Group is completing a plant installation. What

central nervous system and cancer continue to plague

products will be produced here?

the Mexican population. These conditions require the

A: We had a plant construction in process in Toluca but

continuous use of medication throughout a patient’s

we decided to move the project to Cuernavaca since it

entire life. Authorities should increase the offering of

was more appropriate for our business. Toluca was a

medications available to these patients to give them

greenfield project, which would have taken a significant

several therapeutic alternatives.

amount of time to set up, while there was an appropriate existing plant in Cuernavaca that we could adapt to suit

Q: How do you expect Mexico’s changing political

our needs.

climate to impact the pharmaceutical sector? A: We hope the change in administration will not alter the

We are still in the process of deciding which products and

status of the pharmaceutical sector, as tender processes

lines will be manufactured here. Hetero Group is vertically

will start in the last quarter of the year. We also hope it will not affect the private market as it is paid out of pocket. One of the factors that can affect the sector

Hetero Group is an Indian generics manufacturer present in

is severe exchange-rate fluctuations. For instance, the

120 countries that specializes in antiretroviral therapy drugs for

political situation caused by the US presidential election

the treatment of HIV/AIDS. Hetero Group has over 20 years of

brought about significant fluctuations in the exchange

experience in the sale of APIs, generics and biosimilars

rate that directly hit our market and imports.

VIEW FROM THE TOP |

FIVE YEARS TILL MEXICO'S FIRST GENOMIC DRUG FRANCISCO KURI BREÑA Director of New Developments at Landsteiner Scientific

Q: Landsteiner is the only company that does genomic

medicine we try to understand which enzyme, protein or

research in Mexico. How close are you to the development

modulator affects the cellular processes that cause diseases.

of the first genomic drug in the country?

The point is to stop a disease at its origin. Landsteiner

A: Landsteiner is about five years away from creating the

is working on three lines: Alzheimer’s, colon cancer and

first genomic medicine to treat obesity. It is very complex

post-stroke therapies to regenerate ischemic cells. Also, we

research because we have to consider different markers

have plans to investigate macular degeneration, Sjogren’s

including diet, activity, clinical history and other vascular

Syndrome and Parkinson’s, among others.

risks in each person’s profile. For us, it was a solid step for WHO to consider obesity as a disease because more

Q: In 2012, Landsteiner ranked in the Top 10 of the private

research opportunities have opened up as a result. We are

sector generics market. What percentage of your sales do

developing Phases I and II in Europe and then will move

generics represent?

on to Phase III with clinical trials in Mexico. We are also

A: We are reaching our goal of 30 percent in generics

working on other treatments for diseases such as colon

sales to the private sector and the scenario looks more

cancer and Alzheimer’s.

positive than before because we are winning favorable public tenders to sell our products. We have won over 90

Q: In 2016, you changed your business model to emphasize

percent of the tenders we have participated in, so the path

sales to the private sector. How are your sales divided?

for this year is looking good.

What are you doing to diversify? A: We reorganized several departments to comply with our

Q: One of your objectives is to register 15 medicines a year

new business model. Before that, 90 percent of our sales

with COFEPRIS. Do you expect to achieve this goal in 2018?

were with the public sector, so we relied on bids. This year,

A: We are focusing on the production of the most profitable

we are close to achieving our goal of having 30 percent

products but we continue with the same list. Our goals

of our sales in the private sector. Our plan is to strengthen

changed due to the modifications imposed by COFEPRIS,

our presence in the private sector and then jump into the

so we had to adapt. We expect to increase our profit margin

export market. We have targeted regions where COFEPRIS

by focusing on the most profitable products we have. Of the

is a recognized regulatory agency, such as South America,

15 initial medicines that will be registered this year, we will

Central America and the Caribbean, to export over 18

be targeting our Top 3 and continue from there.

products. We have seen high demand for biotechnological and other specialized products in the private sectors of

Q: As the only Mexican company doing genomic research,

those regions, especially in countries such as Guatemala,

what challenges do you face and what alliances have

Colombia, Chile and Peru. Another strategy for diversifying

you entered?

our sales is exporting to Europe and the US. We are opening

A: Landsteiner has been working in genomics research

the production of a new medicine in Toluca that will meet

related to obesity for five years and we are in Phase I. We

the criteria stipulated by international regulators.

hope to move on to Phases II and III in another five years. We have the financial support for our research and part

Q: One of your advanced research lines is related to

of the process will be done with outsourcing companies.

obesity. What impact does this research have on your activities in Mexico? A: Our research will have a great impact, not only in

Landsteiner Scientific is a Mexican pharmaceutical company.

Mexico but throughout the world. The history of medicine

has an herbal origin that later evolved to the analysis of

commercialization of biotechnological, genomic medicine,

microorganisms and biotechnology. Today, through genomic

injectables and oral solids

focused

the

manufacturing,

distribution

and

219

| VIEW FROM THE TOP

COMMERCIAL ASSOCIATIONS PROVIDE BETTER BALANCE IN THE MARKET BENJAMĂ?N VEGA Commercial Director of Allen Laboratorios

220

Q: After 40 years, what are the major lessons Allen

Q: What is the penetration that Allen Laboratorios has

Laboratorios has taken away from the manufacturing of

in the pharmaceutical market with its therapeutic lines?

pharma products?

A: Allen Laboratories has two star products: paracetamol

A: The business model and the structure of the company

and gerial B-12. The latter is a supplement to improve the

have improved over the years thanks to greater clarity in the

deficiencies of the B complex or iron citrate that has registered

regulations to develop pharmaceutical products. In the last

double-digit growth year after year. In the case of paracetamol,

10 years, we have renewed all our manufacturing equipment

our brand is key to offer a differentiation factor and our

to boost our growth and improve our competitiveness.

quality standards are recognized by the government as a

We want to revolutionize our laboratory with greater

reference for the industry. Allen Laboratorios invests heavily

investments in technology, new business models and new

in raw materials of the highest quality, because regardless of

ways of manufacturing our products. Allen Laboratorios

currency changes, we can control the production process and

is implementing concrete measures to consolidate itself

remain competitive. These conditions make products like our

as a competitive laboratory and become a leader in the

paracetamol market leaders.

national generics market. We are strongly committed to training our staff to maximize productivity and increase our

Q: What recommendations would Allen Laboratorios make

expertise. Allen Laboratorios wants to couple training with

to IMPI and COFEPRIS to improve fair competition among

leadership skills because our vision is to go beyond knowing

generics and patented medicines?

how to operate a machine. We also want our employees to

A: Allen Laboratorios believes in promoting fair

understand how to lead a team.

competition where generics are not left behind. Greater collaboration between the generics and patented sectors

Q: How does Allen Laboratorios stay competitive in the

will result in greater benefits for the patient and the

generics market?

market. Authorities such as IMPI and COFEPRIS should

A: We participate actively and directly with COFEPRIS

consider the conditions of the market and the impact of

and other associations, such as AMEGI, CANIFARMA

the generics segment to promote greater associations

and DINAMEGI, so our impact in the generics sector is

between these two players. We need to create real

much greater. Our participation with associations and

commercial alliances between generics and patents

authorities is oriented to providing representativeness,

to promote collaborations that go beyond a merely

but also to having a voice in the pharmaceutical sector.

transactional matter of knowledge and technology. The

Allen Laboratorios also invests heavily in the training of

patented segment should collaborate more with the

its personnel to strengthen the monitoring of COFEPRIS'

generics segment to create better access and availability

normative guidelines. All our strategies are oriented to

of medicines.

providing a high-added value to the client according to regulations. It is important that both the smallest labs and

Q: What impact has innovation and technology had on

those with national stature can participate in the market

Allen Laboratorios?

and that they have weight in the industryâ&#x20AC;&#x2122;s decision-

A: Technology is key to our operations and was fundamental

making process.

for us to go from a turnover of MX$30 million to more than MX$300 million in approximately 10 years. Technologies can help small laboratories move from producing artisanal

Allen Laboratorios is a 100 percent Mexican manufacturer of

medicines to become fully automatized. We want our

pharmaceutical products with over 40 years of experience. The

employees to go from being manufacturers to supervisors

company has four business lines: Allen Laboratorios, SolaraF,

with operational knowledge. This change has benefited us

AllEffective and Condoms Vive

and now we are more profitable.

VIEW FROM THE TOP |

LOCAL COMPANY AIMS TO GROW WITH UNIQUE STRATEGY IÑAKI DE IZAURIETA CEO of Mavi Farmacéutica

Q: Where does Mavi Farmacéutica fit in the Mexican

A: We are focusing on pain-control products for the

pharmaceutical ecosystem?

central nervous system, such as next-generation pain

A: Mavi Farmacéutica focuses on the sale of low and

killers. Antibiotics, diabetes control, sexual health,

medium volumes with prices in the medium to high range.

anti-depression and anti-cholesterol products are our

In terms of price, pharmaceuticals can be classified in

main niches.

descending order as: patented medicines, branded products with expired patents, branded generics and

Q: What are the main benefits that companies obtain

pure generics. Our niche is branded products and

when associating with Mavi Farmacéutica?

branded generics, which is a comfortable place for us.

A: Mavi Farmacéutica has almost 30,000 points of sale in 32 states, including pharmacies, hospitals, medical

Q: How are Mexico’s epidemiological changes influencing

centers, clinics and self-service stores. Our goal is to

your market strategy?

reach 20,000 more points of sale. We also attend and

A: We are also focusing on antibiotics and anti-flu

give service to over 15,000 doctors.

medications, two product lines that focus on very common diseases in the country. We also have medicines

Q: How do you divide your sales among the public and

to control blood sugar, cholesterol and triglycerides,

private sectors?

which are our most profitable products. Taking into

A: 95 percent of our sales target the private sector

account Mexico’s epidemiological challenges, we will

and the rest goes to the public sector. This is a healthy

continue to focus on products related to diabetes. We

percentage for us, although we might consider increasing

hope to introduce six or seven new APIs or combination

our sales to the public sector depending on the medical

products for blood sugar and cholesterol management

devices we end up importing into Mexico.

in the next couple of years. We target our products to the private sector because the Q: How is Mexico’s pharmaceutical market changing?

time period a product is successful in this sector is much

Where does Mavi Farmacéutica see itself in this

longer than in the public market.

evolution? A: The market for basic pharmaceutical products,

Q: How is Mavi Farmacéutica using its strong position in

including pain killers, anti-inflammatories, antihistamines,

Mexico to expand abroad?

antibiotics and many others, has been undergoing a

A: At this point, we are selling our products in Costa

radical change for the past few years as Big Pharma

Rica and Guatemala and we look forward on registering

introduces its own generic lines to compete with other

products in Colombia. We are seeking FDA approval to

brands specialized in generics.

enter the US market, where we will focus on California, Oregon and Washington State. In these states, our margins

The Mexican market has changed over the past 20

will be wider and we will be able to offer extremely

years from patented medicines to generics and branded

competitive costs. Medication prices there are between

generics. The medical devices market has also grown

40 and 80 percent higher than in Mexico.

significantly in recent years and has become an attractive business opportunity. Today, Mavi Farmacéutica sees a large business opportunity in medical devices.

Mavi Farmacéutica is a Mexican generics manufacturer with 65 years of experience. The company manufactures products

Q: Which market niches has Mavi Farmacéutica found

for pain management, gastroenterology, antibiotics and

attractive in the local market?

antihistamines, among many others

221

| INSIGHT

INVESTING NOW TO REAP FUTURE BENEFITS MANISH MUTHA Vice President of Micro Pharmaceuticals Mexico

222

Regulations in Mexico are holding back international

of the Mexican peso is complicating the sale of high-quality

companies like India’s Micro Labs that have thrived at home

products as they become increasingly expensive to import

and globally but which have run into roadblocks in Mexico,

and on the other hand due to price erosion, which in our case

says Manish Mutha, Vice President of Micro Pharmaceuticals

has ranged between 10 and 12 percent,” Mutha says. “We

Mexico. “There are several market restrictions that prevent

are also dealing with high-dollar costs and we had to stop

Indian products from participating in government tenders.

selling some products in Mexico because they became too

One problem is that Mexico does not have free trade

expensive to import.” Mutha points to Losartan as a medicine

agreements with India, which hurts patients, who cannot

that became unfeasible for sale in Mexico as the cost of

access the necessary medicines.”

manufacturing and transporting it rose above its market price.

Founded in 1973, Micro Pharmaceuticals manufactures

Micro Pharmaceuticals has 19 registered products in Mexico

active principal ingredients and generic pharmaceuticals. It

but it plans to launch a new ophthalmology line in 2018.

focuses on developed as well as emerging markets and has

“In the Mexican market there are few specialty producers

presence in 30 countries, including the US, UK, Germany,

that have FDA certification, which we do. There are also

Russia, Ukraine, Vietnam, Sri Lanka, Dominican Republic,

very few companies in the country that manufacture

Uganda, Nigeria and Kenya. To compete fully in the Mexican

ophthalmological products.”

market, companies must adapt, says Mutha. To that end, Micro Pharmaceuticals is developing a long-term strategy

Looking ahead, the company believes that it will eventually

that Mutha hopes will lead to the construction of its own

require manufacturing capabilities in the country to

manufacturing facility in the country.

eliminate the high transportation costs that significantly reduce margins. Mutha says that the plant would

Micro Pharmaceuticals Mexico only sells to the private sector,

manufacture in Mexico and take advantage of the country’s

so its market volume in Mexico is still small. "We believe that

ideal location to export 55 percent of its production to

we must continue this line of work in order to enter the public

the US. However, external factors are complicating the

sector in the long term. We are building our company’s image

company’s agenda. “This plan is on hold until we increase

and positioning our brand,” says Mutha. “We want our clients

the number of products registered in the country and the

to associate Micro Pharmaceuticals with quality products.”

renegotiation of NAFTA is completed.” The uncertain terrain has led Micro Pharmaceuticals to begin considering the

Despite the restrictive conditions, Micro Pharmaceuticals is

possibility of manufacturing in the US, although Mutha

growing in Mexico. Its sales in 2017 increased 30 percent,

remains optimistic for a successful NAFTA outcome. “Ideally

a rate that Mutha says was a consequence of the great

the market between the two countries will remain as open

number of patients who are using their medicines. “Micro

to commerce as it is now, allowing us to manufacture in one

Pharmaceuticals is now the only distributor in Mexico of a

country and sell to the other.”

number of products in generic space. This places us in an advantageous position in the market.” Its positive results

With the plant on hold, the company will focus on

are also leading Micro Pharmaceuticals to introduce more

consolidating its new ophthalmology line, which will serve

one-of-a-kind medicines into the country. “While our

as a learning curve for Micro Pharmaceuticals’ eventual

business is supported by regular-use products that are sold

entry into cardiology, psychiatry and diabetes, says Mutha.

in high volumes, such as amoxicillin, our goal is to bring to

“We are confident that 2018 will be an excellent year, since

the Mexican market molecules including high-technology

during the first three months we had already met our goals.

products and drug combinations.” The company, however,

Micro Pharmaceuticals has operated in Mexico since 2005

faces a complex situation in the country. “The devaluation

and we are committed to staying for a long time.”

VIEW FROM THE TOP |

FIRST GOAL: MAINTAIN A HEALTHY MICROBIOTA AUDE BOCLÉ General Manager of Biocodex

Q: Biocodex is a pharmaceutical specialized in microbiota.

Q: What is the main objective of the Biocodex Microbiota

What business opportunities have you identified for this

Institute? What impact will this project have in Mexico?

area in Mexico?

A: Over the last several years, there has been a growing

A: Five years ago, products in the microbiota segment

interest and much research in the role and importance

popped up thanks to the growing interest and the scientific

of microbiota. In this context, the Biocodex Microbiota

research that was carried out. Today, this domain is among

Institute is one of the few online platforms solely focused on

the most researched topics in health sciences. Biocodex has

microbiota. It has two purposes. First, provide information

operated in Mexico for three years and we are working to

to healthcare professionals. Second, inform the general

reinforce our presence in the private market, which covers

public about microbiota, such as why it is important and

30 percent of the population.

how it impacts health. The institute is also active on social networks to raise awareness on microbiota among the

Q: What are the benefits of biopharmaceuticals and

general public.

how can these types of drugs contribute to Mexican epidemiology change?

Q: What is the role of the Biocodex Microbiota Foundation

A: Microbiota refers to the huge number of micro-organisms

in the general strategy of Biocodex? What potential has the

that live in the human body, especially in the intestine.

foundation identified in the Mexican research ecosystem?

Therefore, maintaining a healthy microbiota helps prevent

A: The foundation is supporting microbiota research

the development of infections, allergies, behavioral and

through ongoing annual grants. Biocodex’s goal is to launch

metabolic problems, such as dyslipidemia, diabetes and

an international as well as national annual call for projects

obesity. If children are born by normal delivery, are breast-

to promote innovative scientific research that explore the

fed and their microbiota properly cared of from an early

interactions between microbiota and various pathologies.

age, they will have fewer possibilities of developing allergies,

The evaluation and selection of the winning projects are

infectious diseases or metabolic syndrome. Children born

carried out by independent scientific committees. The

through a C-section already have a footprint that will

scientific board in Mexico is directed by Solange Heller, a

make them more prone to these conditions. In these cases,

pediatric gastroenterologist who is in charge of selecting

biopharmaceutical products can intervene to prevent those

the group of experts who will evaluate the research projects.

conditions. The main product for the company is Floratil. We also offer Gotalgic, an analgesic for otitis.

Q: Biocodex seeks to strengthen its expertise in gastroenterology. What are your plans in this area?

Q: How do you evaluate the access to biopharmaceutical

A: Today, Biocodex’s core business is definitely related to

products in the public and private sectors in Mexico?

the microbiota domain with an expertise in the intestinal

A : B i o p h a r m a ce u t i c a l p ro d u c t s re q u i re s p e c i a l

microflora. The objective is to reinforce our offer in this field

consideration and Mexican regulation has just started to

targeting other types of indications or diseases in which

grasp the specificities needs of this category of products.

human microbiotas can be impacted. We are also evaluating

During the last National Congress of Regulatory Affairs,

the possibilities of establishing alliances with international

Biocodex Mexico had the opportunity to address this

companies that operate in Mexico.

topic and talk about the scientific criteria for selecting a probiotic and the importance of protecting the production process of probiotics to prevent the micro-

Biocodex is an independent multinational pharmaceutical

organism from suffering mutations during the process.

company founded more than 60 years ago and specialized

We are pushing to achieve a stricter regulation on these

in microbiota. It works in pain, neurology, rheumatology and

types of products.

otolaryngology in more than 100 countries

223

| VIEW FROM THE TOP

PRIVATE MARKET, LAND OF OPPORTUNITIES JOSĂ&#x2030; LUIS ROJAS Vice President of Ultra Laboratorios

224

Q: Ultra Laboratorios has its own business line,

A: We have found many growth opportunities, mainly

manufactures products and works for the government. In

because of increasingly higher prices for patented products,

which area is the company most focused?

which are widening the price gap between generics and

A: Right now, our capacities are largely focused on

patented medicines. It is also very difficult for international

supplying the public health system. But, the supply of great

laboratories to obtain the number of registrations similar to

quality products at affordable prices to the private sector is

those of a Mexican laboratory to enter the generics market.

growing stronger every day and it is becoming an important part of our business model.

Ultra Laboratorios is extremely interested in expanding its presence in the private sector but to achieve this, the

The governmentâ&#x20AC;&#x2122;s health budget is not growing as fast as

company needs to expand its manufacturing capabilities

needed. For instance, while other OECD countries spend

to increase its production speed and capacity. According to

on average around 9 percent of their GDP on healthcare,

IMS Health, today we are between the second and the fourth

Mexico only spends 6 percent. For that reason, the

pharmaceutical company in terms of units sold and value.

private sector is beginning to have a stronger presence. A good example of this is the introduction of doctors in

In 2018, we will complete the construction of a new plant

pharmacies. These clinics usually work only with generics

in Guadalajara, which represents an investment close to

and COFEPRIS has made significant efforts to ensure that

MX$1 billion. Once we increase our production capacity, we

generics comply with all necessary regulations and that

can expand to the US and other countries. There are also

their quality is comparable to those of the best brands in

significant growth opportunities in Mexico since generics

the world.

represent only 8 percent of a total private market valued at US$13 billion.

Q: What are the main differences between working for the public and private sectors?

Q: How are you investing in technology and innovation?

A: They are entirely different. First of all, the private sector

A: We are making a strong investment in our new plant by

manages many private labels, so the same product must

acquiring Italian and German equipment. These pieces are

be split and labeled depending on its final destination. This

more expensive than their Chinese counterparts but they

makes the supply chain extremely important for those

have better quality and performance and provide more

clients who are more interested in supply than pricing.

long-term benefits.

As COFEPRIS' guidelines are becoming the state-of-the-art

Today our focus is mainly on solids but in the coming years

of regulations, it is a great moment for the laboratories in

we are looking forward to having a stronger position in

Mexico to set the path for all Latin American laboratories

antibiotics, hormones and solids.

regarding production of generics. Q: How are you adapting your product portfolio to address Q: What would you identify as the main areas of opportunity

the rise of chronic diseases?

in a market with so many international companies?

A: According to Knobloch CID, in 2020, 60 percent of the expenditure in units will go to the treatment of chronic illnesses. With that in mind, we refocused our pipeline five

Ultra Laboratorios is a Mexican pharmaceutical company

years ago to focus on having a strong presence in that

founded in 2001 and focused on generic medications, including

market to take advantage of the opportunities that may

analgesics, anti-inflammatories, antidepressants, antibacterials

arise due to the expiration of patents and to comply with

and vitamins

all regulatory guidelines.

VIEW FROM THE TOP |

THE GRADUAL TAKEOVER OF LATIN AMERICA’S PHARMACEUTICAL MARKET DAGOBERTO CORTÉS Director General of Sanfer

Q: How does Grupo Sanfer maintain its operational

COFEPRIS’ approval as they have proven themselves to be

efficiency considering the many companies that make up

safe, trustworthy and effective.

the group? A: Grupo Sanfer is constituted by three different

Q: How is Grupo Sanfer capitalizing on its existing

companies: Laboratorios Sanfer, Laboratorios Hormona

capabilities to expand and what regions is the company

and Morepharma. To make our budgets and operations

looking at?

more efficient, we gather all common services, such

A: Our expansion strategy was to find key countries from

as human, legal and production resources. In this way,

which to reach the rest of the region. We entered Argentina

a single group performs all services, which allows us to

after buying a company named Pharmadorf. This acquisition

reduce costs. On the other hand, we divide our portfolio

allowed us to penetrate the Argentinian market and take

into seven independent business units and each one has

advantage of the company’s export permits for several

its own marketing, medical representatives, medical and

European countries. In 2016, we opened Sanfer Chile,

market research division. We optimized our sales force so

followed by Sanfer Ecuador. One year later we acquired

medical representatives only present products from their

51 percent of Laboratorios Portugal, the second-largest

division. This simplifies our operations and allows medical

pharmaceutical in that country, which had a broad product

representatives to become experts in their field.

portfolio that included generics, OTCs and cosmetics and exports to Europe and Asia. For Central America we created

Q: How does Grupo Sanfer contribute to the generation of

Sanfer Panama, from where we manage all exports and

new health solutions?

businesses from Mexico to some countries in the region.

A: Grupo Sanfer performs R&D for the generation of

We have representatives in Nicaragua, Honduras and El

added-value generics and we have patented some of

Salvador who receive all their products from Panama.

our discoveries with the Mexican Institute of Intellectual Property (IMPI). We do not invest in the development

Having operations in Colombia, Chile and Peru allowed us

of new drugs but in technological development for the

to take advantage of the Pacific Alliance, which promotes

generation of new formulations, drug combinations and

exchange of workers and products across its member

new delivery methods. In the latter case, we are researching

countries. Furthermore, Peru, Chile and Mexico are part

new ways for medicines to be absorbed by the body. We

of the CPTPP, which will allow us to export to Australia,

have developed a pill that controls the absorption of

Vietnam, Canada, Brunei and Japan.

dicloxacillin, an antibiotic that has to be taken every six hours. Our delivery system permits a controlled release of

Grupo Sanfer’s products are available in all the countries

the medication over 12 hours. Thus, patients only need to

south of Mexico. Our priority is to consolidate the Central

take the pill twice a day.

and South American market and, although we do not have a franchise in Brazil, we do sell products in the country.

We also generate new combination pills as about 95

Brazil’s market is hard to enter but it is also the largest

percent of therapies for cardiovascular diseases and type

market in the region. For 2018, Sanfer’s main priorities are

2 diabetes require several drugs taken simultaneously. This

to consolidate its investments.

means that patients with hypertension often take up to three different drugs to control their disease and many of them also need to take other medications for associated

Sanfer is a Mexican pharmaceutical company that manufactures

diseases. For that reason, it is easier for them to adhere to

innovative medicines, generics, baby formula and veterinary

the medication regime if its presented to them in a single pill

and consumer products. The company is part of Grupo Inverka.

instead of several. Our combination products have received

Sanfer has four manufacturing centers

225

| VIEW FROM THE TOP

AN EYE ON GREATER AWARENESS OF CARE PATRICK DEVLYN Director General of Grupo Devlyn

226

Q: Devlyn has more than 21 business lines. How are these

Q: How has Devlyn contributed to the optical segment in

lines structured and what growth areas have you detected?

Mexico since the company was founded?

A: We have different commercial formats that target

A: Years ago, Mexico had a closed market and everything

different market segments. In addition, we have a B2B

we sold we manufactured ourselves. As the country began

service through which we provide solutions for large

to open up, we were able to bring to Mexico products of

stores that have made us responsible for their eyewear

better quality and design and we started buying brands

segment. Our core business is the optical segment:

from international designers in the optical sector, such as

glasses, contact lenses, solutions and drops, but we have

Ray-Ban and Chanel. We then began to develop our own

also developed other categories, such as clinics dedicated

brand and we now have our own portfolio of products

to performing corneal checks and transplants. Between

that offer design and quality. This category is now our

2003 and 2014, we were among the most important

house brand and represents more than 35 percent of our

operators that worked with Seguro Popular for cataract

products.

surgeries. Recently, we have developed an audiology segment, a business that has shown triple-digit growth

Q: What milestones have illustrated Devlyn’s business

in the last three years.

growth over the past 82 years?

| INSIGHT

TAKING THE FIGHT TO SELF-PROCLAIMED MIRACLE PRODUCTS MIGUEL MARÍN CEO of Industrias Sintoquim

Although the use of cosmetics in Mexico falls behind that of

years. “When it comes to cosmetics, we strive to continuously

other major Latin American economies, the country exports

look for innovation and process renovation, while identifying

more cosmetics than any other country in the region. To

and analyzing different trends and possibilities,” says Marín.

address the limited use of said products, it is necessary

The company made its mark through in-house manufacturing

to first overcome self-proclaimed miracle products and

of cosmetics ingredients and changed its business model to

low-quality, informal products, says Miguel Marín, CEO of

introduce top-quality ingredients at competitive prices. “We

Industrias Sintoquim.

do not sell ingredients only, we sell solutions.

“Mexico has a mature cosmetics market that continues

Sintoquim’s future is not limited to profitability objectives.

growing, but is still behind Brazil, Argentina and Chile in use

“We want to revamp our operational system, generate

per capita. We want the Mexican consumer to shift toward

more business intelligence for improved decision-making

the use of cosmetics at a health, preventive treatment and

and craft a stronger talent development plan with clearly

dermatological level,” Marín says. Sintoquim specializes in

outlined and value-adding training processes. When talking

the commercialization of raw materials and specialties for the

sales, we want to grow our numbers by 20 percent for 2018,

cosmetics industry, with a track record extending well over 40

and at least duplicate those numbers by 2023.”

A: As a family business, we are aware of the turning points

awareness about the importance of performing an annual

that led us to grow. The value of hard work is the basis of

eye check. These tests can detect chronic diseases, such

our business and is reflected in the code of ethics that each

as hypertension or diabetes.

member of the family and each employee follows. One of the most important milestones was the opening of a store in

Q: How does Devlyn promote awareness?

a Sears department store in Chihuahua. It was an absolute

A: A few years ago, we helped declare October sight-

success and we continued to open Devlyn stores in cities such

awareness month. We use this month to promote

as Tijuana, Guadalajara and Monterrey. Another important

awareness about visual health, using social networks and

milestone for us was the development of internal technology

street campaigns, and invite people to take a vision test.

and manufacturing facilities to produce frames and crystals.

In parallel, Fundación Devlyn focuses on providing a vision

We also adopted German technology for contact lenses that

test to that part of the population that does not have access

helped us grow much more than our competitors.

to this basic health services. In addition, we are trying to promote public policies related to prevention together

Q: How responsible are Mexicans when it comes to visual

with the Mexican Association of the Optical Sector. We

health? How often do patients meet their annual tests and

need to work with the authorities to develop the national

acquire the products doctors recommend?

health system and to establish a patient-centric system. The

A: For Devlyn, health in Mexico is very important. As

main problem in the health sector is that institutions are

President of the Health Commission (CCE), I believe that in

saturated. In addition, the process for approving innovative

the public and private sectors there is sufficient awareness

products is very long.

of what it means to have a healthy lifestyle. But, in general, the population is not aware about the importance of visual health. In the case of children, for instance, parents

Grupo Devlyn is the largest ophthalmology company and

should focus more on checking whether their children see

laboratory in Mexico. It manufactures and sells optical, solar

well or not because vision issues can result in attention,

and contact lenses. It was founded in Ciudad Juarez in the

behavioral and learning problems. There is also a lack of

1930s and has branches throughout the country

VIEW FROM THE TOP |

MORE ACTION NECESSARY TO TACKLE SILENT KILLER CORRADO DE GENNARO General Manager for Mexico and North Cone Latam for Galderma

Q: What areas is Galderma prioritizing in Mexico?

and dermo-cosmetic cleansing and moisturizing products,

A: As an emerging market with a large population and low

as well as facial injectables, including neurotoxins and

penetration in dermatology, Mexico is very attractive to

hyaluronic acid.

Galderma. Over the last few years, Galderma has grown in double digits and above the market in most of the

Q: Which new products will Galderma launch in 2018?

categories where it competes, a clear indicator of how well-

A: We are expanding our presence in the sun-care category,

received our products are in the country. Galderma has

launching Cetaphil Sun and a Sculptra, a polylactic acid, an

a strong presence in acne, rosacea, atopic dermatitis and

injectable bio-stimulator of collagen. The latter is one of the

psoriasis. We also play in the growing aesthetic field with

most innovative products in the market.

a complete portfolio of fillers, bio-stimulants and toxins. Q: What are Galderma’s strongest products in Mexico?

Galderma is part of Nestlé Skin Health. The company offers

A: Galderma has three divisions: prescription, self-

prescription and OTC medications and aesthetic and corrective

medication and aesthetics. We have a predominant market

treatments. Its medical solutions include Epiduo, Differin, Mirvasa,

position in the treatment of acne, rosacea, atopic dermatitis

Soolantra, Benzac, Loceryl, Azzalure, Restaline and Sculptra

227

| VIEW FROM THE TOP

PREVENTION OFTEN OVERLOOKED WHEN ADDRESSING VISUAL HEALTH Alejandro Rodríguez Director General of Essilor Mexico

228

Elda Hernández Marketing Director of Essilor Mexico

Q: What is the size of the Mexican market for glasses?

2018. We also have signed several agreements with other

AR: Vision problems are one of the biggest impediments in

companies and associations to promote visual health. For

the world and have a deep impact on those who suffer from

example, we are working with the International Automobile

them. Visual health is often overlooked. Eye damage can

Federation (FIA) to promote safe driving through periodic

be easily avoided with preventive measures. Approximately

eye exams.

50 percent of the global population needs corrective lenses and everyone would benefit from using protective glasses

Q: What new products is Essilor introducing to the

to avoid damage from the sun or from blue light.

Mexican market? AR: Essilor invests about €250 million (US$290 million) per

It is estimated that 39 million Mexicans need visual

year in R&D. In 2018, we launched several products including

correction and as the world leader of the industry, Essilor

Crizal Sapphire 360, a new anti-reflective coating that

is committed to reach those Mexicans in need and improve

protects both from the front and back of the lens to reduce

their lives by improving their vision. However, access to

glare. Furthermore, it provides unmatched properties in

visual exams and correction is still limited in Mexico.

terms of scratch resistance and transparency while being dust and water resistant. We are also launching Varilux

Q: What are the main challenges Essilor has faced to

X-Series, a unique progressive lens designed to provide

penetrate the Mexican market?

natural vision at all distances to its wearers.

AR: The Mexican market is highly segmented, with many low-cost options or unbranded products. In terms of brands,

Q: Who are the ideal clients for these types of products?

Essilor is the leader in Mexico. Governments and optical

EH: Varilux X-Series and Crizal Sapphire 360 are products

stores need to create awareness campaigns to teach people

from our premium line, so they are being offered to a mid-

to take care of their visual health. Our goal is to improve

high income wearer. Varilux X-Series can only be used by

the lives of people by improving their vision.

individuals with presbyopia, also known as eye fatigue, which is increasingly common for those over 45 years of

EH: The industry requires more professionalization as not

age. The best solution for these individuals is a progressive

all optometrists are fully trained to perform visual exams or

lens that allow individuals to see at any range. Traditional

even adapt more complex lenses, like progressives. There

progressive lenses only allowed individuals to focus up to

are few people that only learn how to operate the necessary

45cm from their eyes, everything beyond that lost definition.

equipment and perform very basic eye exams and thus, they

Varilux X-Series provides an increased vision range between

cannot fully personalize lenses.

40-70cm away, giving users clear visual definition at those ranges. This product is ideal for Generation X, which is now

Q: How is Essilor increasing awareness about the

getting older, as they are heavy users of tablets, cellphones

importance of visual health?

and computers. We estimate that about 1 million Mexicans

EH: We increase awareness by promoting prevention.

fit this economic and age group.

Among our initiatives there is a campaign hosted on the International Day of Visual Health, which will be on Oct. 11,

Q: What are Essilor’s main priorities for 2018? AR: Our goal is to increase our market presence with excellent products and services. The market has a lot of

Essilor is an international company based in France that

room to incorporate high-quality products. We also aim

manufactures and sells glasses and lenses. The company

to make the sector more professional through continuous

invests heavily in research and development and is currently

training, an area that has been overlooked to this point but

operating in over 70 countries

will result in many opportunities.

VIEW FROM THE TOP |

EMPOWERING CUSTOMERS TO MAKE BETTER DECISIONS ANNE ENGERANT Senior Vice President LATAM of RB® Health

Q: How did the acquisition of Mead Johnson Nutrition

for the baby. We recently launched an exclusive formula

change RB®’s operations?

that contains milk fat globule membrane (MFGM), which

A: The acquisition of Mead Johnson Nutrition led to a

helps the development of the nervous and immune systems.

transformation within RB® worldwide. RB® has its roots and a long history in the production of home hygiene products,

Q: What is RB®’s strategy to strengthen its OTC division

but it has refocused itself in the area of health with several

and compete with generics?

acquisitions, including Sico and the OTC brands from

A: The best way to compete against generics is to invest

Bristol Myers Squibb in Mexico. The acquisition of Mead

in innovation and introduce new molecules and solutions.

Johnson Nutrition allowed us to further place a priority

For instance, in 2017 we introduced Graneodin F into

on health.

the Mexican market. These pills for sore throats contain flurbiprofen, a unique derivate from ibuprofen with anti-

Q: Considering the wide variety of products you manage,

inflammatory and analgesic properties, the concentration

what are your priorities for Mexico?

for which had not previously been commercialized in the

A: Mexico is an important country for us because it

Mexican market. This product won COFEPRIS’ Innovative

represents big growth opportunities in our core categories.

Solution Award.

One of our main priorities is our infant formula business due to its size, followed by Sico and OTC products. Actually,

We can also grow the market for OTC brands by encouraging

the portfolio may look diversified but there are a lot of

self-care. For instance, we believe we have a role to play by

synergies: RB® offers patients a wide range of products to

helping the medical community explain to patients when it

improve their health and wellbeing. For instance, if a woman

is better for them to avoid antibiotics. Many individuals are

wants to avoid having children, she can use Sico condoms

convinced they need antibiotics to deal with a common sore

to protect her from unwanted pregnancy. If she decides

throat when more than 80 percent of these ailments are

to be a mother and for certain reasons she is not able or

viral in origin and thus do not require antibiotics. Instead,

chooses not to breast feed, we offer a wide range of infant

it would be much better for the patient to take a medicine

formula depending on the needs of the baby and can help

that treats the symptoms of a sore throat.

her manage her baby’s fever with Tempra. Q: Which areas of public health is RB® addressing? Enfamil, our infant formula, currently holds 23 percent of the

A: Beyond the issue of antibiotic misuse on which we work

market in Mexico with a wide variety of products to address

at a global level, in Mexico we are creating an awareness

different needs. But our competition in the country is not

campaign for Sico in which we educate young people on

only with other brands of infant formula and powdered

the proper use of condoms to protect themselves during

milk, we also share the market with nonspecialized milk,

sex and to avoid STIs and unwanted pregnancies. Teenage

such as pure cow’s milk and sometimes even with coffee

pregnancy (often among girls as young as 10 years old)

or soft drinks.

is a growing problem in the country. We want to make condoms more accessible and help young people acquire

Q: How is RB® incorporating innovation into its

them without shame.

infant formulas? A: It is not easy to innovate in this category, as any innovation requires years of deep research and development by our

RB® Health develops products for health and hygiene,

team of nutritionists, scientists and often several clinical

including Clearasil, Dettol, Durex, Gaviscon, Mucinex, Nurofen,

trials to prove our good nutritional levels. Our source of

Scholl, Strepsils and Veet. In 2017, the company acquired Mead

inspiration is breast milk, which we recognize is the best

Johnson Nutrition to strengthen its baby formula division

229

| INSIGHT

FAMILY COMPANY SEES CLEAR SOLUTION TO BLURRY PROBLEM MARCO MACHADO Founder and Director General of Augen

Demand for eyeglasses is on the rise in Mexico but

“Mexico is very different from other countries in the region

providing glasses to those who need them is not as easy

as the industry was started by small, independent stores

as simply manufacturing millions of glasses and distributing

that grew into today’s giants like Opticas Lux.”

them, says Marco Machado, Founder and Director General 230

of Augen, a Mexican family-owned company that began

The company’s goal is to tackle vision problems and

its operations by manufacturing lenses and gradually

take over the glasses market with products made in

developed the technology to build everything necessary

Mexico. Today, it has about 5,000 clients, most of them

for their construction, from lenses to equipment.

optics stores, laboratories and ophthalmologists. About 15 years ago, Augen began a vertical integration process

“Every person requires lenses adapted to their eye-shape,

to manufacture its own supplies, which were previously

since otherwise they run the risk of suffering gradual

imported from Germany and the US. “We developed our

damage. With the wrong lens, individuals can be prone to

own capabilities to manufacture glasses. We also developed

headaches. Each race requires a different type of glasses,”

laboratory equipment that now sells in Mexico and exports

says Machado, adding that some companies choose less

to Brazil and the US. We are restructuring our equipment

expensive products at the expense of the client’s sight.

division to enter the Eastern European market.”

“Mexico has excellent doctors and specialists but there are not enough to meet all the needs of the population.

Augen designs and manufactures free-form surfacing

Another problem the country faces is that its eyewear

generators, digital free-form polishers, free-form speed

stores are not regulated. The market began to saturate 10

polishers, laser engraving systems and speed blockers,

years ago with the arrival of Chinese products, which are

essential equipment for the production of lenses. Machado

cheaper but of lower quality. Also, Mexicans often prefer

explains that few companies manufacture this equipment;

imported products even if the local ones are better. Lenses

therefore, there is a big market to capture. “The market

made in China are often made assuming that the eye is a

for this equipment is large but we are only beginning to

perfect sphere. Working under this assumption leads to eye

develop this business line. Most of the products provided

problems because the lack of a perfect focus causes optical

by our competition are made in Germany and our products

aberrations that gradually damage eyesight.”

are 40 percent less expensive in comparison.”

In a study published by Nature, scientists reported that

Previously, Augen did not work directly with consumers,

the rate of nearsightedness is growing to epidemic levels,

but that is about to change. The company faced a rough

with one-third of the world’s population expected to have

patch until 2013, amid declining sales. Machado revised the

myopia by 2020. While there are no recent statistics on

company’s strategy and Augen is now looking for financing

how many people have a visual impairment in Mexico, INEGI

to open its own chain of stores. “These stores will take

estimated in its 2014 survey that 16.9 million Mexicans, or 14

advantage of all our existing capabilities and operate under

percent of the population, had a vision impairment in 2014.

a franchise model similar to an OXXO.”

“It is estimated that 40 percent of the population living in cities needs glasses, but not all of those who need them

Machado sees in these stores more than a new business

use them,” says Machado.

line; they are also a way to provide glasses to those who need them, a long-time goal of the company. Over the last

Augen has more than 30 years of experience in the

10 years, Augen has participated in the campaign Ver bien

manufacture of lenses and glasses. The company pioneered

para aprender mejor (Good Eyesight for Better Learning)

optic resin processing in Mexico and conducts R&D for the

as a technological partner, through which the company has

design of new visual solutions, equipment and software.

provided about 250,000 children with glasses every year.

VIEW FROM THE TOP |

INNOVATIVE PRODUCTS FOR SKIN CARE RÉMI MARTINI Sales and Marketing Director of Laboratorios Expanscience

Q: How does Laboratorios Expanscience position itself in

A: We want suppliers of the highest quality because we want

the maternity market?

to guarantee that our customers are receiving innovative

A: Last year, we prioritized the development of our

products for skin care. Laboratorios Expanscience has

Mustela Maternity line along with our baby line since we

already contacted various vendors such as L’Oréal, which

believe that skin care is fundamental for everyone, but

we believe is a good supplier of dermo-cosmetics products.

even more so during pregnancy. Our dermocosmetic

All our suppliers must deliver products that are at the level

products are designed to preserve the skin elasticity,

of quality, safety and efficiency of a medicine and all our

prevent stretch marks and promote firmness. For babies,

products are launched under the guidelines defined by

we have a wide range of products adapted to each skin

COFEPRIS. That is why it is important for us to find quality

type (Normal, Dry and Atopic-prone skin). We are also a

suppliers that can manufacture while maintaining the levels

strong player in the diaper rash cream market (and the

required by the regulatory authorities and our internal

most dynamic brand according to Nielsen). Our latest

standards of quality and naturalness.

product is our relaunched Mustela Solar line, which is designed for babies who are sun-sensitive with fragile

Q: How does Laboratorios Expanscience collaborate with

and/or atopic prone skin.

its suppliers to generate a good commercial relationship? A: Suppliers who work with Laboratorios Expanscience

The baby skin-care market is an underdeveloped segment

already know that the company emphasizes quality,

in Mexico. Laboratories Expanscience is investing heavily

prevention and planning. Laboratorios Expanscience

with Mustela and the results have been very positive. Today,

seeks to maximize profits but always under a framework of

we are market leaders in baby skin care and we occupy 94

social responsibility and care for the environment and local

percent of the market in pharmacies.

communities. The company expects the same corporate commitment from the people and companies with whom

Q: Last year, you mentioned that you wanted to become

it collaborates.

leaders with Euflexxa TA. How is the product positioned in the market now?

Q: You mentioned that you are focusing your efforts on

A: In a short time, we have positioned ourselves as the

the Mustela portfolio. How will this help Laboratorios

second-leading product, with a 25-percent market share.

Expanscience reach the goal of MX$500 million in 2020?

Euflexxa TA, third-generation of hyaluronic acid, is used

A: The Mustela line is made up of high-quality made-in-

to relieve knee pain due to osteoarthritis. It is used for

France products that have been adapted to the Mexican

patients who do not get enough relief from simple pain

market to meet the needs of our customers in an innovative

medications such as acetaminophen or from exercise and

way. The Mustela line, unlike most competitors, is the only

physical therapy. Euflexxa TA is only for injection into the

one that offers on average 95 percent natural ingredients

knee, performed by a doctor. We want to continue selling

in its formulas. Moreover, we are convinced that our vision

Euflexxa TA in the private sector, where it has been very

to be the best for the world, ensuring quality, naturalness,

well-received, and we expect that by the end of 2018 we

eco-friendly packaging and respect for communities will be

will have between 30 and 35 percent of market share. We

our key success factors in the near future.

will continue with the insertion of our product at IMSS and ISSSTE. Laboratorios Expanscience is a French pharmaceutical and

Q: You are recruiting more providers for your Mustela

dermo-cosmetics laboratory focused on wellness solutions for

Portafolio. What profile and features does Laboratorios

newborns, teenagers and the elderly. Its main lines, Mustela

Expanscience look for in its new suppliers?

and Piascledine 300, are present in more than 100 countries

231

The Dr. Vagรณn train brings medical services to rural areas

HEALTH PRIORITIES

Mexico is in the midst of an epidemiological shift. The country has had great success in the treatment of infectious diseases through better hygiene and

vaccination campaigns, which has allowed Mexicans to live longer. However, birth rates have decreased, so the country will face in the coming years an increasing number of seniors and a smaller number of younger people who can take care of them. The country faces another significant problem: its population is gaining weight, which has led to an increase in the number of chronic diseases related to obesity. Together these two behemoths will impact healthcare policy for years to come and have the potential to completely overtake future healthcare budgets.

Complex problems such as these require comprehensive solutions involving the participation of all players in the sector, from policymakers to healthcare providers. This chapter interviews those who work on the frontlines for the development of solutions that will allow Mexico to reduce these problems through adequate prevention and timely treatment.

233

CHAPTER 9: HEALTH PRIORITIES 236

ANALYSIS: Lifestyle Changes: the New Approach for the Health Industry

238

INFOGRAPHIC: Facing an Older, Larger Future

240

VIEW FROM THE TOP: Yiannis Mallis, Novo Nordisk Mexico

242

VIEW FROM THE TOP: Abelardo Meneses, National Institute of Cancer (INCan)

243

VIEW FROM THE TOP: David Kershenobich, Salvador Zubirán National Medical Sciences and

Nutrition Institute

244

VIEW FROM THE TOP: Francisco Soberón, INMEGEN

245

INSIGHT: Vincenzo D’Elia, Laboratorios Alfasigma

246

VIEW FROM THE TOP: Roberto Tapia-Conyer, Fundación Carlos Slim

248

INNOVATION SPOTLIGHT: New Central Laboratory Makes Grupo Diagnóstico Aries® Stronger

250

VIEW FROM THE TOP: Enrique Graue-Hernández, Instituto de Oftalmología Fundación Conde

de Valenciana

251

INSIGHT: José Aburto, CENATRA

252

VIEW FROM THE TOP: Víctor Saadia, BioCenter Mexico

253

VIEW FROM THE TOP: Juana Ramírez, SOHIN

254

INSIGHT: Gabriela Allard, Mexican Association of Diabetes (AMD)

255

INSIGHT: Ricardo Reyes, Dr. Vagón, El Tren de la Salud

235

| ANALYSIS

LIFESTYLE CHANGES: THE NEW APPROACH FOR THE HEALTH INDUSTRY Facing an obesity epidemic that leads to a rise in instances of diabetes, cancer and cardiovascular diseases, Mexico is pushing prevention as a key health priority while also boosting primary care to ensure the improved health of its population

236

Since the dawn of the 21 st century, Mexico has made

prevention aims to avoid the appearance of new diabetes

significant progress in health matters. Life expectancy

or neoplastic cases. Secondary prevention takes place

has increased considerably, vaccination levels are closer

when the disease is already present so the goal is to stop

to those of more developed countries, infant mortality

complications from occurring. If a patient has diabetes

has decreased and universal coverage has not stopped

mellitus, our objective is to prevent the development

growing thanks to the implementation of programs such as

of cataracts, hypertension or other cardiovascular

Seguro Popular. All these efforts, however, must continue

complications. Finally, tertiary prevention applies when

if Mexico wants to rise above the average of the OECD

complications are imminent and steps must be taken to

countries and mitigate what is considered a great global

prevent disease progression.”

epidemic: obesity, a disease that is related to the trinity of chronic noncommunicable ailments: cancer, diabetes and

But the key challenge may be in changing lifestyle habits

cardiovascular diseases.

that encourage the increase of obesity in practically all population segments. According to the Mexican Diabetes

According to the report Getting it Right: Strategic Priorities

Federation, in 2030, 39 percent of the Mexican population

for Mexico published by the OECD, “the mortality rates

will suffer from diabetes, a projection that will not decrease

of patients with cardiovascular diseases are particularly

unless solutions are sought to increase physical activity

high in Mexico.” This study suggests this may be due to

among citizens, in addition to educating about nutrition,

the fact that patients do not always receive adequate

the main cause of the spread of diabetes in the country.

or on-time medical attention. The first point of medical

The food industry, government and educational institutions

care, therefore, becomes a key for Mexico to achieve the

must play a leading role in this necessary change since the

average ratio of the OECD countries.

percentage of citizens who consume fruit in Mexico, one of the world’s leading producers, is 43.1 percent, below

Given this situation, the country’s influential institutions are

the average of the OECD, which stands at 56.8 percent,

taking action. Salvador Zubirán National Medical Sciences

while only 42.4 percent of adults over 18 recognize the

and Nutrition Institute, for example, is implementing new

importance of maintaining a physical routine, a number

ways to attack diabetes, considered an epidemic by the

lower than that registered by the OECD in 2013.

Ministry of Health. “We are trying to implement a stronger approach to prevention at all three levels,” says David

These data are more worrying if physical exercise is

Kershenobich, the institute’s Director General. “Primary

analyzed according to schooling level. The higher the educational level, the greater the number of people who

PORCENTAJE DE LA POBLACION DE 18 Y MAS PHYSICALLY ACTIVE POPULATION (adultsPOR by gender, AÑOS DE EDAD ACTIVA FISICAMENTE SEXO percent) (PORCENTAJES) 60

Men

Women

recognize importance of physical activity on a daily basis. Among adults over 18 years who have not completed basic education, the percentage of the population that performs exercise is 27.6 percent, while among those adults with higher education the percentage is 57.6 percent, according

to the OECD. To alleviate obesity, Mexico has already 40

taken action, such as imposing a tax on sugary drinks, but must also ensure the population’s access to healthy

and nutritious food options, control the commercialization 20

of products rich in salts, sugars and fats among children and support physical activity among citizens.

10 0

2013

v Source: INEGI

2014

2015

Women Men

2016

2017

Prevention, then, must become the main protagonist of the Mexican health system in the coming years, pundits say and institutions such as ISSSTE are implementing

DISTRIBUCIÓN PORCENTUAL DE LA POBLACIÓN DE 18 Y MÁS AÑOS DE EDAD POR NIVEL DE ESCOLARIDAD DISTRIBUTION OF ADULT POPULATION BY EDUCATION EN LEVEL ACCORDING TO A PHYSICAL ACTIVITY (percent) SEGÚN CONDICIÓN DE PRÁCTICA FÍSICO-DEPORTIVA TIEMPO LIBRE 2015 2017 80

2015

2016

2017

60 50 40 30 20 10 0

physically active

physically inactive

No basic education completed

physically active

physically inactive

Basic education completed or some degree of secondary education

physically active

physically inactive

At least one degree of higher education

Source: INEGI

2017

2016

2015

237

Source: INEGI

programs in this regard. “It is necessary to continue the

experiencing, which directly affects the private sector. This

implementation of prevention campaigns that provide

is what Roberto Bonilla, General Director of San Ángel Inn

information about the consequences of unhealthy habits,

Hospital, believes. “The private sector should concentrate

since many chronic diseases can be avoided with adequate

its efforts on improving access by increasing insurance

prevention. For example, ISSSTE has campaigns against

policies as well as influencing prevention. To make this

smoking, a habit that reduces life expectancy by around

happen, insurance companies and hospitals must change

15 years and can lead to the most chronic ailments like

their business models to lower insurance premiums and

diabetes, hypertension and cancer,” says Jorge Guerrero,

increase the possibility of people having access to private

Medical Director of ISSSTE.

healthcare.”

José Campillo, Former CEO of Funsalud, agrees. “Establishing a preventive system and an efficient first point of attention is key. We must reinforce the authority of the health institutions over other economic sectors to control the health risks involved in their activities. There should be a National Health Council that invites all ministries to include in their plans chapters focused on healthcare. In addition, each government unit should

According to the Mexican Diabetes Federation, in 2030, 39 percent of the Mexican population will suffer from diabetes

report its improvements to the Ministry of Health,” he says. Mexico has a difficult job ahead to adapt its health reality

PHARMACIES TAKE THE LEAD

to the health priorities caused by epidemiological change

In Mexico the number of doctors has increased, but the

in the country and it should be the public sector that leads

public health system is unable to absorb the generated

the efforts through campaigns that affect prevention

demand that now flows to doctors’ offices installed next to

and a radical change in the life habits of their citizens,

many of the country’s pharmacies. Pharmacies, therefore,

industry insiders say. A clear example of these efforts is

have become primary recipients of primary care patients,

the creation of the National Strategy for the Prevention

becoming at the same time a key element to improve the

and Control of Overweight, Obesity and Diabetes, which

country’s prevention in relation to chronic diseases.

aims to “improve the welfare levels of the population and contribute to the sustainability of national development

“The current model of care requires visiting a doctor

by slowing down the increase in the prevalence of

only when there is a problem, but it is necessary for

overweight and obesity in Mexicans.” However, pundits

medical professionals to switch to a preventive model,”

say this should not be a solo effort but rather, action to

says Marcos Pascual, Commercial Director of the Mexican

prevent and control overweight and obesity should be

Association of Pharmacies (ANAFARMEX). Private

carried out through the committed participation of all the

hospitals have also taken the reins of prevention as

players involved: the public sector, the private initiative

a result of the epidemiological change that Mexico is

and society itself.

| INFOGRAPHIC

FACING AN OLDER, LARGER FUTURE system will add a new challenge: providing adequate care

diseases become increasingly prevalent. Mexico is now in

to its increasingly older population with an smaller number

the midst of an obesity epidemic with grave consequences

of productive, younger people.

ec Cz

Sw ed

u ep

ark

nia Esto

Spa

in 5

Slovenia

Finland

Slovak Republic

France

gal Portu

Germa

Gre

and Pol

ece

y wa

r No

Ic el

nd s

Latvia

xem b

Me xic o

rla he et

l ae Isr

Population over 65 years old will increase by 8 percent, from 559 million in 2015 to 604 million in 2020

y Ital

Japa

Korea

Aging-related diseases, including dementia, Parkinson’s and Alzheimer’s, will grow

Ire

w Ne

ary

a Ze

238

y ke

itz er

ile

r Tu

Ca n

OECD e avarag

GLOBAL EXPENDITURE IN HEALTHCARE AS PERCENTAGE OF THE GDP IN 2017*

diseases. In the coming years, the country’s healthcare

globe get older and fatter, chronic, noncommunicable

Bel giu m

foods are causing problems. As populations across the

Austria

for its population in the shape of diabetes or cardiovascular

Australia

Individuals are living and an overabundance of high-calorie

Source: OECD 2017. *Notes: Mexico makes the third smallest investment in healthcare out of all countries in the OECD, well below the OECD’s average of 9.0 percent.

By 2040, the number of diabetics is expected to increase from 415 million in 2015 to 642 million

ADULT POPULATION WITH A BODY MASS INDEX OVER 30 (percent)

40 35 30 25 20 15 10

• Lack of access to basic care services • Chronic budget shortfalls • Lack of general and specialized doctors, mainly in rural areas

——1997 ——2017 ——2037 7

Source: PopulationPyramid, data sourced on Jun 2018

DIABETICS IN MEXICO (self-reported)

9.2%

OECD avarage

Turkey

Portugal

New Zealand

Mexico

Luxembourg

Latvia

Korea

age 95-99 90-94 85-89 80-84 75-79 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 0-4

Challenges:

Japan

Israel

Ireland

Hungary

Germany

France

Finland

Estonia

MEXICAN POPULATION PYRAMID (percent)

Slovak Republic

Source: OECD

Czech Republic

Chile

Belgium

Australia

Canada

1997

2017

2037

TREATMENT SCHEMES FOR DIABETIC PATIENTS (self-reported)

Insuline

9.4%

Pills In its report

7.0%

“Health at a Glance 2017” OECD claims

Both

2006

None 0

2012 60

2016 80

100

that the rate of diabetics in Mexico

COMMON SIDE EFFECTS SHOWN BY DIABETICS (self-reported)

may reach up to 15.8 percent but a significant number of them have not

2016

2012

2006

been diagnosed

Source: ENSANUT 2016.

Ulcers Amputations Vision Loss Retinal damage Blindness Dialisis Hearth attack Diabetic comma

2006 0

2012 40

2016 50

239

| VIEW FROM THE TOP

A CRUSADE AGAINST OBESITY, DIABETES YIANNIS MALLIS Vice President and General Manager of Novo Nordisk Mexico

Q: Last year, you launched liraglutide under the name

better diabetes treatment overall both in the public and

of Saxenda. How has the medical market received this

private spheres.

medication?

240

A: Saxenda is our latest approved treatment for obesity.

Q: How can local regulations be improved to promote faster

In Mexico, it has great appeal and has enjoyed a positive

access to market?

reception but it still faces the same challenges as other

A: COFEPRISâ&#x20AC;&#x2122; efficiency is among the highest that I have

medications, such as adherence to treatment.

experienced. It has gone a long way in terms of approving products in an efficient manner. When it comes to access,

Q: What joint ventures is the company developing to place

the biggest challenge is who pays for the treatment after

this and other innovative products closer to low income

it reaches the market. I see a lot of will in some of the big

individuals?

institutions to offer more innovative products but it is always

A: We are looking for ways to make our innovation

a matter of funding.

accessible to a wider audience. We understand that many people are treated in the public sector, where options are

Q: How could collaborations in the industry help improve

limited. Therefore, we have entered into negotiations with

accessibility for these types of products?

large institutions to make our products more accessible for

A: Together with AMIIF we have opened a dialogue with

people with diabetes and obesity in Mexico.

public players to propose different schemes for funding new medications. Institutions have been open to this and,

Q: Novo Nordisk specializes in diabetes and obesity. What

although we have not made quick progress, the willingness

is your role in shaping healthcare in a population that is

to move forward is there. We all understand the need; it is

becoming increasingly diabetic and obese?

just a matter of finding the right mechanism.

A: We contribute in two different areas. On one side is as a commercial entity, where we develop innovative

It is also a matter of changing the mindset regarding

treatments and bring them to market, and we try to

treatment. For instance, in the treatment of diabetes, Mexico

commercialize them in a way that makes them more

has been effective in reducing prices in the public market

accessible to more patients.

for a specific treatment. This yields savings but also creates a problem in introducing novel treatments: switching the

We also contribute to the treatment of diabetes through

current treatment to a better treatment would mean having

education and with initiatives focused on prevention. One

to pay three to five times more what is paid now. Health

example is Cities Changing Diabetes, for which Mexico

institutions should analyze who is the group of selected

City was the first city in the world to join and in which

people who have the greatest need to obtain the benefits

we participate with several stakeholders. Our goal in

of our product. We are working on pilot projects to pick the

this regard is the development of infrastructure and the

target population that will potentially be most benefited

dissemination of knowledge. In addition, Novo Nordisk

from our most innovative medicines and it seems that the

works with different players to make sure that there

public sector is showing more interest in investing in these

is broader access not only to our medications but to

special populations. Q: What are the main benefits and drawbacks of tailored

Novo Nordisk is a global healthcare company with 95 years

financial schemes for pharmaceutical companies?

of innovation and leadership in diabetes care. Novo Nordisk

A: I think we need tailored schemes for different therapies

employs approximately 42,700 people in 79 countries and

and for different institutions based on their budget

markets its products in more than 170 countries

availability, their needs, the composition of the population

and the outcomes, among others. There is no perfect mechanism; this depends on the therapy, the patient population and the financing needs and facilities of the institution. Q: How do you manage and encourage patient adherence to medicine? A: Mexicoâ&#x20AC;&#x2122;s adherence rates are among the lowest that I have seen in the world, even for chronic diseases. To get the patient to adhere, it is not enough to have a fantastic product and a good price. There are many sociological aspects that are not solely related to the product. When it comes to chronic diseases, we must create awareness among people that they are making an investment in themselves and in their future. We launched a patient support program in early 2018 called Nuevo Yo (New Me). Diabetes or obesity should not hinder people living with these conditions. In fact, they should take it as an opportunity to establish new routines to live a new life. The program has been very successful and in less than six months we had around 4,000 people subscribing to the service. Q: What will the treatment for diabetes look like in 10 years? A: In the future, we will have more obese people with diabetes. Unfortunately, epidemiology, aging of the population and human physiology work against us. Even if we focus on prevention, for at least the next 20-30 years we will continue to see a rise in the number of diabetics. In terms of medicine, I expect more products focused on providing holistic benefits to patients. Q: What are Novo Nordiskâ&#x20AC;&#x2122;s expansion plans for Mexico and how is the company increasing its presence in the market? A: Our portfolio for diabetes is doing extremely well, both in the private and public sectors. The public sector is slower in adoption because we know that we have to overcome access barriers. Still, we are growing at double-digit rates. The other area where I foresee expansion is obesity. Unfortunately, obesity treatments in Mexico are underdeveloped. That is why we are investing both in increasing our commercial presence and in developing infrastructure. We need to invest as a company but we also have to convince Mexico to invest because obesity is a ticking time bomb. Today it is a healthcare emergency but in 10 years it will be a financial emergency. Also, Novo Nordisk has a very strong commitment to treat hemophilia. It is a rare disease that affects a small population. We estimate that there are approximately 6,000 people in Mexico being treated but the number of people living with hemophilia might be twice that.

241

| VIEW FROM THE TOP

A POWERFUL WARRIOR TO FIGHT AGAINST A POWERFUL ENEMY ABELARDO MENESES Director of National Institute of Cancer (INCan)

242

At the end of the 20 th century, Mexico underwent an

second pillar. Meneses says that 40 percent of tumors can

epidemiological transition from infectious to chronic

be prevented by simply modifying lifestyles. “Today, cancer is

diseases. As the country’s economy grew stronger, public

one of the four major causes of death. Tobacco consumption,

policies implemented by the government helped reduce

high-calorie diets, exposure to cancer agents, exposure to UV

deaths due to infection. Life expectancy increased and new

rays and lack of physical activity are the major contributors,”

challenges appeared. According to the OECD, in 2012 there

says Meneses. Tobacco use is responsible for one-third of all

were 131.5 cases of cancer per 100,000 people in Mexico

cancer tumors and 16,000 annual cancer deaths. “The impact

while INEGI data show that about 70,000 people die of

of tobacco on health spending is approximately MX$61

malignant tumors every year. To reduce the number of

billion, while the government’s return from the Special Tax

deaths and health expenditures related to chronic diseases,

on Production and Services (IEPS) on tobacco consumption

organizations like the National Institute of Cancer (INCan)

totals just MX$38 billion.”

believe prevention is a key strategy when addressing the new medical profile of the Mexican population,

Early diagnosis, the second strategy, is vital for breast,

particularly cancer.

colon, cervix and prostate cancer, some of the most common cancers among Mexicans, according to the

“To deal with this emergency, we lean on two pillars. First,

WHO. In Mexico, 70 percent of patients with chronic

the administration of a national registry that allows us to

diseases are already in an advanced stage when they

know the real penetration of cancer in the country and

finally visit a healthcare facility. In response, the institute

second, the execution of a national plan that includes

has opened diagnostic and prevention clinics. Each year,

prevention strategies, early diagnosis, access to treatment,

it also organizes a ‘Cancerathon’ to raise funds. Clinics

palliative care and rehabilitation,” says Abelardo Meneses,

are open to everyone and provide a diagnosis that is

Director of INCan.

subsequently sent to the health institution at which the patient is registered. All pathologies diagnosed in the

For years, INCan had sought the creation of a national

clinics are covered by Seguro Popular if the patient does

cancer registry to record each new cancer diagnosis.

not belong to a health provider.

The new regulation was finally implemented in June 2017. Three types of records are kept: hospital data,

In addition to the national cancer registry and its integral

the histopathological study performed by pathology

program, INCan is committed to improving the number of

departments and a population-based cancer registry

oncologists available in the country, and educating general

that reflects the country’s situation. “All institutions, both

practitioners. According to Meneses, in 2016, there were

public and private, must report each case diagnosed. The

1,781 cancer specialists in Mexico, when there should be

registry requires the commitment of the state and municipal

five times that amount to achieve complete coverage.

governments and the first city to host it was Merida,” says

INCan is lobbying the Senate, Congress and the Ministry of

Meneses. The project was born with the support of third

Health and Public Education to make oncology mandatory

parties, but now it will receive a budget allocated by the

at all medical, odontology and nursing faculties. “Today it

federal government. Following Merida’s example, the

takes almost seven months from the patient’s arrival at the

registry was launched in Guadalajara and will soon come

hospital until diagnosis.”

online in Nuevo Leon and Baja California. The institution is also taking steps toward innovation in the INCan expects the registry to improve the impact of the

treatment of cancer. “We acquired a cyclotron and since

Programa Integral de Prevención y Control de Cáncer

August 2017, the institute has had an area focused on the

(Integral Program for Cancer Control and Prevention), its

production of solutions for diagnosis and treatment."

VIEW FROM THE TOP |

THE IMPACT OF NONCOMMUNICABLE DISEASES ON HEALTH STANDARDS DAVID KERSHENOBICH Director General of the Salvador Zubirán National Medical Sciences and Nutrition Institute

Q: What are the institute’s priorities for the health sector

percent control of their disease. After this period, they

in Mexico?

return to their own specialist to follow up on their treatment.

A: The institute’s main focus is on noncommunicable chronic diseases, based on a mostly adult population

Q: What research topics is the institute focused on?

of over 18 years of age. The most common diseases we

A: We are trying to understand the role of genetics in

treat are diabetes and neoplastic formations, or cancer.

the development of noncommunicable chronic diseases.

These topics are related to our medical sciences activities

Inheritance is not always the predominant factor; there is

but they are also closely intertwined with our nutritional

also the epigenetic factor, which refers to the environmental

objectives. Nutrition can directly impact the development

conditions that can affect the way a gene expresses. This

of noncommunicable chronic diseases. One of our priorities

leads our research into social issues that include habits

is to understand the role nutrition plays in these ailments

and lifestyles. We are conducting several studies at the

and in the creation of public health plans.

Nutrigenomic Institute to understand how nourishment impacts the expression of certain genes.

Q: Where does the institute dedicate most of its resources? A: We opened the Integral Attention Center for Diabetes

Another focus of our research is on the study of human

Patients (CAIPaDi) to promote prevention among those

microbiota. We have approximately 2kg of bacteria genes

patients. At this center we only attend patients who have

in our bodies, which means we have more bacteria than

received their diagnosis within five years. Doctors usually

proper human genes. We are just starting to understand

offer 20 to 60-minute consultations and ask the patient to

how microbiota interacts with the individual.

return after three months, which does not serve to develop a prevention culture. We propose six-hour sessions where patients can receive the results of their analyses, along with

The Salvador Zubirán National Medical Sciences and Nutrition

consultations from expert nutritionists, ophthalmologists,

Institute is a public health center specialized in treatment and

dentists, chiropodists and trainers. In four months, patients

research of noncommunicable chronic diseases. It is aimed at

have four consultations, which allows them to have 90

promoting quality medical care

243

| VIEW FROM THE TOP

THE REVOLUTION OF GENOMIC MEDICINE FRANCISCO SOBERÓN Director General of INMEGEN

244

Q: What technologies will lead the adoption of genomic

practice. Doctors are showing interest in keeping up to

medicine by the healthcare sector?

date and I believe they will increasingly ask for more

A: The penetration of these technologies in Mexico

training. Genomic medicine can have a strong impact

will depend on many elements, including the existing

in every single specialty but it is much more developed

capabilities of doctors and sustainable budgets.

in oncology.

International pressure on Mexico to incorporate these technologies will also play a role since it will become

Q: How has INMEGEN contributed to cancer research

increasingly unacceptable not to use them in certain

in Mexico?

medical specialties like oncology. Also, patients and

A: Regarding cancer, it is necessary to analyze two

hospital quality systems will demand genomic testing,

different scenarios. The first occurs when a patient

which will become mandatory for cancer diagnoses.

has been diagnosed and it is necessary to identify the mutation occurring in the patient’s tumor. Using

Other Mexican health institutes are developing initiatives

that diagnosis, the oncologist can determine the best

to incorporate these technologies. The only necessary

treatment course.

factor is to have a critical mass of trained personnel. INMEGEN trains about five medical specialists and 70

The second is predisposition toward cancer, which requires

Ph.D students, graduating around 15 per year.

the identification of characteristics specific to a population.

Approximately 5 to 10 percent of female patients with breast cancer are genetically predisposed

Q: What other areas will increasingly require the incorporation of genomic medicine? A: An area that I expect will push forward the penetration of this technique into common practice is pharmacogenomics. This area should develop preemptive strategies for care that can predict the body’s response to a medicine.

Q: How ready are doctors to incorporate these technologies into their daily practice and what benefits

Testing before a patient takes any variety of medication

would it bring them?

would be too expensive, so it would be preferable to

A: This area is new for most doctors and so far universities

perform a single test that identifies all genetic variables

have not included genomic medicine into their curricula.

related to response to a pharmaceutical even at birth.

Medical curricula have not changed in decades. This is

Testing for the complete genome of a newborn can cost

extremely worrying but it is not only a Mexican problem

US$1,000, but in 10 years that cost will reduce enough for

as it extends throughout the world.

the test to be accessible to many. Once this technology is available to the general public, it can be easily performed

Doctors themselves are increasingly approaching us

at birth and doctors will only have to learn how to

to learn how genomic medicine can support their

interpret the genetic data. Q: How can INMEGEN’s projects be used to change

The National Institute of Genomic Medicine (INMEGEN) leads

existing prevention schemes?

Mexico’s efforts in genomic medicine research and trains

A: Prevention plans will be limited and possibly erroneous,

future geneticists and doctors. The institute has a broad range

without concrete information regarding our population’s

of research lines, from cancer genomics, to proteomics

genomic data. If prevention plans are designed taking

into consideration exclusively international data, their

We have made progress in the pharmacogenomic study

success rate would be much smaller.

of the diabetes medicine metformin. This is important because the number of diabetics in Mexico is extremely

This information is useful as it allows us to focus on

high and not all will benefit from treatment with

prevention efforts. For instance, approximately 5 to

metformin. This study will measure the correlation of

10 percent of female patients with breast cancer are

the patients’ genotype and their reception of metformin

genetically predisposed. Knowing which individuals are

and other drugs.

susceptible will allow us to target prevention efforts Q: What would you identify as INMEGEN’s greatest

toward them.

achievements under your administration? Q: What is the status of your initiative with PEMEX for

A: We turned INMEGEN into a solid institution in terms of

the implementation of personalized medicine?

research and education. Our research core has grown and

A: In this initiative, financing has been a problem as we

become stronger, which has also allowed us to train more

have had to use funding supplied by CONACYT, which

professionals. The institute has built a significant body

has also faced cuts. We have an excellent relationship

of work concerning the genomic profile of the Mexican

with PEMEX, which will eventually allow us to expand

population, making Mexico the most advanced in this

this project to infectious, psychiatric and rare diseases.

area in Latin America. 245

INSIGHT |

ADAPTING TO MARKET UNCERTAINTIES THROUGH HOLISTIC STRATEGIES VINCENZO D’ELIA General Manager of Laboratorios Alfasigma

Economic, political and social changes directly influence the

the creation of a good environment for pharmaceutical

development of a country’s economy. In 2016, presidential

companies if it wants to nurture universal access to

elections in the US led several industries to reconsider their

healthcare.”

commercial strategies. Mexico is facing similar changes that will shape its business landscape. In times of uncertainty,

ProMéxico data shows that the global production of

companies need to be prepared for all outcomes, says

Mexico’s pharmaceutical industry in 2015 totaled MX$1.23

Vincenzo D’Elia, General Manager of Laboratorios

billion (US$65.8 million), a figure that is expected to rise to

Alfasigma. “After Trump’s victory, we saw some volatility

MX$1.83 billion (US$98.1 million) by 2020. D’Elia says the

in the market and the value of the currency was affected,

retail segment in Mexico is complicated but Alfasigma’s

but Alfasigma is prepared to face pessimism. In the best

business model adapts to the needs and demands of the

case, we will maintain our business model and strategies

market. “We have a very specific strategy for patented and

and in the worst case we will buy products and restructure

branded generics, so our products are always in a range

our sales porfolio,” D’Elia says.

of prices that patients can access,” he says. Following WHO’s recommendations, Alfasigma also stands out for

Among the pressing issues for Mexico, D’Elia highlights

the introduction of unique drugs in the Mexican market

price freedom, making health a national priority and

and for differentiating itself from the competition through

providing equal opportunities for all players in the industry.

technological innovation.

These are the minimum measures needed to maintain quality, price and real access to medicines in Mexico.

Whatever happens in the near future, Alfasigma is prepared

“Patients are the most affected by the increase in the cost

to continue growing in the Mexican market. “We do not

of medicines, since each year the price of raw material in

believe there will be such a negative scenario that affects

Mexico destined for pharmaceutical products increases

our, mainly because 95 percent of our sales are made to

significantly,” he says. “The government must prioritize

the private sector,” D’Elia says.

| VIEW FROM THE TOP

INNOVATION TO ADDRESS HEALTH CHALLENGES ROBERTO TAPIA-CONYER CEO of Fundación Carlos Slim

Q: How does Fundación Carlos Slim help to reduce the

and incorporation to disease management and home

burden of healthcare?

monitoring using IoT portable medical devices.

A: The foundation is a catalyst for the implementation of

246

innovations that address the most pressing public health

Q: How is Fundación Carlos Slim changing healthcare

challenges and that later spur transformation of public

practices?

policies, with the support of leading national and international

A: Our goal is to provide effective care throughout the

organizations and through the convening of public-private

continuum of care and its different platforms, from the

partnerships.

community and primary health clinics to general and tertiary hospitals. Appropriate follow-ups need to be provided

Q: How is technology changing healthcare practices?

with the collaboration of health professionals and patients

A: With the advent of the fourth industrial revolution, we

themselves. To do so, we launched CASALUD, a model

see four trends in technology that converge and impact

that has received international recognition for its visionary

healthcare: innovations in diagnostics with the revolution of

approach to care.

genomics and metabolomics, massive adoption of mobile technologies, an enhanced use of low-cost IoT-backed

We also conduct reviews of innovative breakthroughs from

technologies and artificial intelligence (AI) and cognitive

around the world and analyze which ones can be implemented

computing.

in Mexico, taking three criteria into consideration: costeffectiveness, operational feasibility and impact on burden of

This convergence gives way to digital health and its greatest

disease. Our objective is to optimize the base of the pyramid

impact is observed on the implementation of Personalized

by improving clinics’ public infrastructure. Fundación Carlos

Public Health, a term we have coined that is characterized by

Slim’s goal is for people to live longer and better.

proactive prevention and includes new diagnostic methods alongside effective implementation outreach strategies.

Q: How does the foundation support the training and

These enable health professionals to detect and diagnose risk

education of health professionals?

factors and their predecessor conditions, such as prediabetes,

A: We developed PIEENSO, a robust online-offline

and continuum of care through the implementation of a

educational platform for physicians, nurses and researchers

stepwise strategy from detection of a disease, confirmation

where they receive state-of-the-art training. We developed

Incubators at maternity ward, Hospitaria Hospital

the curricula in collaboration with national organizations like

Broad Institute of Harvard University, the Massachusetts

the National Institute of Medical Sciences Salvador Zubirán

Institute of Technology and leading Mexican research

and international counterparts such as the Mayo Clinic and

centers. We are identifying the potential impact of several

Harvard’s Joslin Diabetes Center, among many others. Our

genes on the risk of developing diabetes and we use

courses are endorsed by the National Autonomous University

this information to analyze whether an individual has an

of Mexico (UNAM). We are mostly concerned with providing

increased risk of presenting the disease. We have already

health education to the general public, supported by our

developed a first chip to measure the genetic risk of

online platform ClikiSalud.net, which comprises a diverse

diabetes specifically for the Mexican population and we

range of topics concerning the Spanish-speaking population.

are in the process of developing two additional chips to measure the genetic risk of cardiometabolic disease and

Q: How would you describe the progress made by Mexico in

diabetes during pregnancy.

terms of maternal and child health and how is the foundation supporting this area?

Q: Which other areas should be prioritized to improve the

A: Mexico has made great progress in maternal health but

health of Mexicans?

not enough to meet the Millennium Development Goals.

A: In Mexico, the number of organ transplants has not

Maternal health is a challenge in Mexico, where approximately

evolved as needed but changes are being implemented to

25 percent of pregnancies occur in women 18 years old or

improve it. For instance, Seguro Popular has incorporated

younger. To address this problem, we developed AMANECE, a

liver, kidney and bone marrow transplants into its financial

strategy that incorporates several innovations that enable the

coverage. Our campaign “Heroes for Life” (Héroes por la

timely identification of a pregnant woman to provide proper

Vida) promotes organ donation, both from a deceased or

prenatal care, and later refer her to a hospital in a coordinated

a living donor. We are also promoting transplant chains for

fashion for the delivery of her baby.

kidney transplants.

Mexico has been a global leader in vaccination, which

Q: What initiatives is the foundation spearheading to

should continue. To help the country improve its practices,

address tropical diseases?

we developed the Electronic Vaccination Card (Cartilla

A: In 2012, the Foundation launched the Salud Mesoamérica

Electronica de Vacunacion). The goal is for all children under

Initiative alongside the Bill and Melinda Gates Foundation

5 years old to be up to date with their vaccination schedule.

and the Inter-American Development Bank, centered on child

This information is linked to their printed book and uploaded

nutrition, vaccines and maternal health for the poorest 20

to the cloud, which will give health professionals and parents

percent of the population in the region. In a new phase, we

continuous access to this data, helping them to keep up with

will work toward the elimination of malaria in Mesoamerica.

vaccination schedules in a timely manner. Q: How is the foundation incorporating research into its

Fundación Carlos Slim is a nonprofit Mexican civil association.

practices?

It was created in 1986 by Carlos Slim with the intention of

A: For the past eight years, the foundation has studied the

promoting the integral development of Mexican and Latin

genetic background of diabetes and cancer alongside the

American society

247

| INNOVATION SPOTLIGHT

248

NEW CENTRAL LABORATORY MAKES GRUPO DIAGNÓSTICO ARIES® STRONGER Grupo Diagnóstico Aries®’ (GDA) Central Laboratory will become the first diagnostic laboratory in Mexico fully automatized and robotized thanks to the Alinity technology developed by Abbott. The Central Laboratory will offer digital clinical processes for all its brand demands, as well as harmonized solutions to optimize laboratory activities and diagnostics. GDA’s brands Swisslab®, Laboratorios Clínicos Azteca®, Olab Diagnósticos Médicos® and Laboratorios Clínicos Jenner® will benefit from this important investment on technology and infrastructure. Its main goal is to deliver greater speed and test productivity in a smaller footprint to help lab systems meet significant demand and provide customized solutions designed for flexibility and efficiency. The technology will have a harmonized process to feature the most compact instruments available with higher throughput and integrating the only system with an easy-to-use common interface across the lab. It will also provide one singular point of access for lab tech to load reagents, run tests, among others and limiting the wasted human effort around the laboratory. GDA will increase its efficiency, speed and scalability while maintaining the highest levels of accuracy. It will also drive down human error in the process. All these attributes will generate and create better opportunities to become even more competitive in the industry, reducing costs and delivering better prices to clients. The new processing center will become the benchmark for Mexico. With this project ending on December 2018, GDA will become one of the best-equipped groups among clinical and non-invasive test laboratories in Mexico.

249

| VIEW FROM THE TOP

VISION PROBLEMS BECOME PREVALENT DUE TO DEMOGRAPHIC CHANGES ENRIQUE GRAUE-HERNÁNDEZ Director of Cornea and Refractive Surgery and Member of the Board at Instituto de Oftalmología Fundación Conde de Valenciana

250

Q: What are the most common ophthalmological ailments

Unfortunately, only 8 percent of diabetics check their eyes.

in Mexico?

Together with the Ministry of Health, we are working on the

A: There is no available data on the prevalence of eye

development of programs for the early detection of diabetes

diseases in Mexico, so our institute and other ophthalmology

and together with INCMNSZ we have created a program to

hospitals are working with the government to generate data

prevent damage from diabetic retinopathy.

on the dimensions of the problem. We have identified five major issues. The first is refractive error and the lack of

Q: What must be done to increase access to care, especially

access to visual corrections to address this problem. The

in remote areas?

second is cataracts, which if left untreated lead to vision loss

A: Although there are 5,000 ophthalmologists in the

and blindness. The third is diabetic retinopathy. The fourth

country, most are clustered in Mexico City, Monterrey and

is glaucoma, a neuropathy of the optical nerve that affects

Guadalajara. For that reason, it is important to develop

between 2 and 5 percent of the population. The fifth is

technology that can allow these doctors to find and

macular degeneration associated with age, a degenerative

provide care for patients in remote areas. Once identified,

disease of the retina that also leads to blindness.

those who need advanced treatment can be channeled to the closest institution as eye surgeries require extremely

Q: How is the prevalence of eye diseases evolving as the

specialized doctors and equipment.

population becomes increasingly older? A: As people live longer, the prevalence of cataracts

Q: Considering the hospital’s mission to provide care

increases. Some individuals begin to show signs at 65

at accessible prices, how is the hospital financing its

years of age and by age 80 almost all show some degree

operations?

of opacity. In Mexico, the main obstacle to address cataracts

A: The hospital is financed through a foundation, recovery

is the lack of access, as there is a limited number of

fees and national and international institutions, which allow

ophthalmologists performing corrective surgery. Including

us to provide care at a small recovery cost to patients

cataracts in the list of diseases covered by Seguro Popular

through efficient use of resources. Beyond our offices

has increased access to care but it has not been enough

in Mexico City, we have four other units: two hospitals

to address the problem. Mexico should perform around

in Guerrero and Tlaxcala, a unit in INCMNSZ and a clinic

300,000 cataract surgeries per year but the country only

operated alongside ABC Hospitals. We plan to continue

performs 100,000.

opening more clinics to increase access to care, especially in marginalized areas.

Q: How are chronic diseases related to obesity changing the profile of eye diseases?

Q: What research projects are these groups addressing?

A: In Mexico, there are approximately 9 million diabetics and

A: An emblematic project carried out within the institute

a large number of people who have not been diagnosed.

involved cell biology for the development of stem cells to

Diabetic retinopathy is a late complication of diabetes that

address problems on the surface of the eye. The goal is

affects 30 percent of those who suffer the disease. It can

to use these cells to treat eye problems caused by burns

lead to blindness but this can be avoided if detected early.

or immune diseases. We also have alliances with other institutions, including UNAM and the National Institute of Astrophysics, Optics and Electronics (INAOE). These

Instituto de Oftalmología Fundación Conde de Valenciana is

projects are financed by CONACYT. Our researchers have

an organization that provides eye-care to all socioeconomic

now gained international recognition and have trained

levels of the population. The institute has four different hospitals

researchers who now work at national and international

and also addresses diabetes, nutrition and psychology

institutions.

INSIGHT |

CONSOLIDATING TRANSPLANT EFFORTS THROUGHOUT MEXICO JOSÉ ABURTO Director General of CENATRA

Thousands of people are waiting for a transplant that

expensive substitute treatment, results in a survival rate of

could be the difference between life and death. To improve

between two and four years. “The entire healthcare budget

their chances, the National Transplant Center (CENATRA)

would not be enough to pay for hemodialysis for all the

is bringing together the public and private sectors and

patients who need it now,” adds Aburto.

promoting agreements to make these surgeries a reality. “CENATRA coordinates the efforts off all players, including

Cornea transplants are second, with 7,267 patients on

the federal government, state governments, local health

the waiting list. “There are 3,762 annual transplants, of

centers, the Ministry of Health and society itself,” says José

which 2,874 are from Mexican donors. Two years ago, 80

Aburto, Director General of CENATRA. “When we began

percent of corneas came from the US.” Liver is next, with

managing CENATRA, only five states participated. Now, 18

365 patients waiting for a liver transplant as of February

states are involved and we continue to incorporate more

2018. “In 2017, 183 transplants were performed, so we are

as they develop their own initiatives and attract organ

covering 50 percent of the demand. Over 90 percent of

donors. If all public institutions work together under unified

these transplants are successful.”

standards, we can raise the rate of transplants in Mexico.” Although there are only 47 patients on the waiting list for Mexico’s transplant rate is 4.5 per million inhabitants, says

heart transplants, their quality of life is greatly decreased

Aburto, so challenges are related to the many factors

due to their condition, says Aburto. “In 2017, we successfully

that must be aligned for a transplant to be viable. These

performed 35 heart transplants, covering 70 percent of the

include hospital space and the availability of the medical

existing need.” Successful heart transplants in the country

professionals required to perform the transplant. A common

are performed mostly at public institutions.

problem is that the organ, the patient and the doctors are in different states, demanding appropriate logistics

Among CENATRA’s many goals was the creation in 2017

and coordination. “Each successful case requires the

of a program for lung transplants that concluded with four

coordination of several institutions and doctors so as not

surgeries carried out in Monterrey. “It is a very complex

to miss a transplant opportunity,” explains Aburto.

operation that requires extensive infrastructure and well-trained professionals, including surgeons and ICU

To address geographical dilemmas, CENATRA has at its

professionals.”

disposal an aircraft belonging to the Attorney General’s Office (PGR). “This agreement was created by our

The institution supports other projects that can place

administration as there was no way to transport an organ,

Mexico as a world leader in transplants, including facial

the doctor or the patient. Air transport is extremely

and thoracic extremities. “Mexico is the first country in

expensive, with prices between MX$200,000 and

Latin America to transplant upper body extremities,” says

MX$300,000. Collaboration with PGR has been essential

Aburto. Other countries such as Spain, the world leader in

for many transplants in recent years.”

transplants, have developed successful programs through the generation of special budgets assigned exclusively for

The most common transplant in Mexico is for a kidney, with

that goal. “The resources we have received have led to all

13,702 people on the waiting list, most of them between 35

these results. All successful models go hand in hand with

and 45 years of age. Kidney transplants have a survival rate

an appropriate budget. All activity related to transplants

of 90 percent during the first year, 85 percent after five years

in Mexico is completely altruistic thanks to the donation

and 80 percent after 10 years. Patients can survive up to 20

of time and resources from doctors, nurses and hospitals.

years after a kidney transplant and, on average, survive for

These people do not receive any compensation for their

15 years, says Aburto. Meanwhile hemodialysis, an extremely

significant efforts.”

251

| VIEW FROM THE TOP

WORKING ON SEVERAL FRONTS TO BOOST AWARENESS OF STEM CELLS VÍCTOR SAADIA Founder and CEO of BioCenter Mexico

252

Q: How would you describe the penetration of regenerative

and on the patient’s education to promote awareness of

medicine in Mexico?

what a mesenchymal stem cell is. In addition, I am on the

A: The promise for regenerative medicine is mesenchymal

board of directors of the Mexican Council of Regenerative

cells. My company introduced mesenchymal cells to Mexico

Medicine and Cell Therapy that represents clinics that are

for the first time 10 years ago. This technology is new to

authorized by COFEPRIS to operate in the country and

Mexico City, but it has been developed for some years in

develops a commercial, research and academic agenda

the north of the country where BioCenter has clinics in

around the subject.

Monterrey and Tijuana. Medical tourism has promoted this technology in the north for eight years, catering to the

Q: Which are the main challenges to the widespread

arrival of foreigners.

implementation of this technology in Mexico? A: The main issues in Mexico are cost and the lack of

Q: How does BioCenter guarantee the effective and safe

education about stem cells. Our country does not have

collection of mesenchymal cells?

a deep knowledge about these cells and this creates a

A: BioCenter retrieves stem cells from teeth, fat and bone

problem when it comes to differentiating the serious

marrow. Fat is the most common procedure for adults, who

treatments from the so-called miracle products advertised

undergo a mini-liposuction to isolate and reproduce the

on TV. One of BioCenter’s goals is to inform the patient and

stem cells for application. BioCenter has participated in the

the population about mesenchymal cells before receiving

application of mesenchymal cells to treat facial paralysis,

any type of therapy. In terms of cost, well-regulated stem

sports injuries and inflammatory diseases like myomatosis.

cells have a high cost because the conditions for their

In Mexico City, we have applied our technology for less than

cultivation require a high level of biosecurity that increases

a year but in our affiliated clinics we have between four

their value. But, these conditions are key to ensuring

and five years of development. Also, BioCenter in Mexico

that they are purified, expanded and isolated. There are

City has a new division related to applications for aesthetic

approximately 30 clinics nationwide with a health license

medicine and treatment in areas such as alopecia and facial

from COFEPRIS to apply stem cells.

rejuvenation. Q: What alliances is BioCenter generating to increase its Q: How is BioCenter collaborating to support local and

client base and the penetration of this technology?

international research efforts in stem cell therapy?

A: Part of the joint agenda between BioCenter and the

A: All possible applications for the use of stem cells must

Mexican Council of Regenerative Medicine and Cell Therapy

undergo a research process. BioCenter collaborates with

is to develop and strengthen the clinical research of stem

several clinics nationwide to carry out multicenter clinical

cells in Mexico. BioCenter wants to promote clinical research

protocols with the goal of developing controlled therapeutic

with patients because it is the area with the greatest

techniques. Our clinical protocols are subject to COFEPRIS’

potential in the country due to medical tourism and the

ability to continue providing access to more than 30

flow of patients that Mexico receives from the US. Also, we

therapeutic applications. BioCenter works according to

are trying to work together with the Council and research

several objectives; it collaborates both in clinical research

clinics to integrate knowledge and create greater value for the development of regenerative medicine. The Council and BioCenter participate in international symposia and

BioCenter , based in the US, is the first banking service in the

conferences to find the best practices and knowledge that

world for dental cells. BioCenter is present in 22 countries in

can benefit Mexico. Regenerative medicine is an industry

the Americas, Europe and Asia and says it has stored 25 billion

driven by patients, which means that there is a great need

dental cells

on the part of patients to access it.

VIEW FROM THE TOP |

COORDINATING ACCESS THROUGH PATIENTCENTRIC APPROACH JUANA RAMÍREZ CEO and Founder of SOHIN

What

SOHIN’s

approach

M ex i c o ’ s

of patients will respond well to chemotherapy, SOHIN

epidemiological profile?

promotes genetic testing to identify those patients that will

A: We focus on 13 diseases, including cancer, rheumatoid

have a positive reaction to the drug. The test determines

arthritis, multiple sclerosis, hepatitis C, chronic renal

whether the patient is at a high or low risk to develop

insufficiency, orphan diseases and cardiopathies. What

metastatic cancer. Only those with a high risk of metastasis

is common to some of these diseases is that there is no

will receive chemotherapy, thus reducing unnecessary costs.

cure. They also require long and expensive treatments, which in turn increases the amount of care they require.

Q: How is SOHIN’s model benefiting the public sector and

For an insurer, patients with chronic diseases represent

what opportunities is the company eyeing in that sphere?

approximately 1 percent of all their insured. However, these

A: Our model demonstrates that it is possible to put cutting-

patients represent more than 60 percent of all their costs,

edge technologies within the reach of Mexican patients at

something that also happens in the public sector.

affordable prices. The incorporation of genomic diagnosis will provide benefits to the healthcare sector, which

Q: How does SOHIN address these gaps in healthcare?

otherwise would be overwhelmed by the growing number of

A: SOHIN understands that those who suffer these diseases

patients with chronic diseases. We entered the public sector

require personalized treatment, as patients with the same

in 2017 and that year SOHIN incorporated MammaPrint,

disease can respond in an entirely different way to the same

the first genetic test included in the healthcare sector’s list

treatment. A patient who receives timely, comprehensive

of subsidized treatments and medicines. Seguro Popular

medical attention and support is better contained and

incorporated this test in February 2018. While a private

therefore less expensive. These patients are also more

insurer can have 1 million patients insured, Seguro Popular

likely to develop self-care behaviors and higher therapeutic

has more than 48 million potential patients, so the volume of

adherence to treatments, which results in lower attention

people we could help is extremely large. We started to work

costs. A cancer diagnosis hits more than just the patient:

with the private sector as a commercial access strategy and

friends and families are also impacted.

a way to present our results to the public.

Q: How do SOHIN’s services complement the offers from

Q: What are SOHIN’s expansion plans for Mexico and

existing healthcare providers?

Latin America?

A: SOHIN is a platform that coordinates access to healthcare

A: SOHIN now has 150 employees, most of whom are

services and operates under a patient-centric model. We

healthcare professionals like doctors, pharmacists,

do not compete with hospitals, doctors, pharmaceutical

psychologists, nurses, nutritionists, biologists and geneticists.

companies or medical distributors; we bring them together

Our goal is to reach 100,000 patients by 2020. We now have

for the benefit of the patient. We have treated over 25,000

offices in Mexico, Colombia and Argentina. While we aim at

patients, a volume that allows us to offer services at

expanding this model throughout Latin America, one of the

affordable costs. About 95 percent of them are referred

main barriers is finding financing. Today, investment funds

to us by large insurers that have incorporated our services.

eyeing entrepreneurs expect large and fast returns within five to six years.

Q: How do SOHIN’s services benefit insurance companies? A: An insurer is concerned with providing a great service experience, which we do, as well as controlling unnecessary

Soluciones Hospitalarias Integrales (SOHIN) provides linkage

costs by making sure that patients receive what they

and management services for patients with cancer, diabetes,

need, when they need it. If we do these two things right,

multiple sclerosis and arthritis in Mexico and Colombia. The

we optimize resources. Considering that only 45 percent

company has two divisions: Concierge and GENETHIC Services

253

| INSIGHT

SEALING ECONOMIC LEAKS THROUGH PREVENTION GABRIELA ALLARD Director of the Mexican Association of Diabetes (AMD)

254

In Mexico, the burden of diabetes and the health

willpower and emphasize the importance of their decisions

expenditure for chronic diseases could increase as the rates

on their health.” The association is also training first-level

of obesity and overweight continue to rise. According to

doctors from the National System for Integral Family

the National Nutrition Survey 2016 (ENSANUT), 12 percent

Development (DIF) and dispatching health brigades into

of the population lives with diabetes, while FUNSALUD

communities to measure people’s weight and height to

says that treatment is costing the Mexican government

carry out glucose and blood pressure tests and to conduct

more than MX$180 billion a year, almost 1 percent of the

oral examinations.

country’s GDP. One strategy to battle the disease is to attack the problem at its roots.

Diet is also in the crosshairs. AMD belongs to a coalition called Contrapeso that supports the Special Tax on

Gabriela Allard, Director of the Mexican Association

Production and Services (IEPS) on sugary beverages. “It

of Diabetes (AMD), believes that to reduce costs and

is scientifically proven that sugary drinks are a direct cause

improve patients’ health, the focus of prevention must

of obesity.”

be on prediabetics. AMD’s priority is to control metabolic syndrome and impact health management. “Metabolic

Another population segment AMD is especially concerned

syndrome is our window of opportunity. Today, a patient

about is teenage mothers. According to ENSANUT,

with diabetes costs the health system MX$60,000 per year

Mexico ranks first in teenage obesity with a 36-percent

while treating a patient with metabolic syndrome costs

penetration and, according to the Ministry of Health, the

about MX$3,000,” says Allard.

most frequent pregnancy cases are among teenagers aged between 11 and 17. Allard explains that most pregnant

AMD has been providing services across Mexico since

teenage girls do not visit a doctor until the pregnancy

1989. It focuses on controlling metabolic syndrome, which

is well-advanced. As a result, they do not control their

includes symptoms such as high blood pressure, high

glucose levels. If they have a prediabetic condition, they

levels of blood sugar, excess body fat around the waist and

are prone to developing gestational diabetes. “If a girl

high cholesterol levels. These conditions increase the risk

becomes pregnant while obese and is not treated, she

of suffering from type 2 diabetes (T2D) or cardiac disease.

is exposed to two risks. First, the baby could be born

According to AMD, each diabetic patient will cost the

with a high chance of developing T2D in the future and

system MX$1.8 million in 30 years. “By the time patients

the mother will probably develop gestational diabetes,

become diabetic, we have lost many opportunities. But if

which will then become T2D,” says Allard, who adds that

we work on prevention, the health system will save a lot

the penetration of gestational diabetes increased by 5

of money.”

percent in 2016.

Gallard says obesity rates in the country suggest a

AMD has also focused on prevention in the prediabetic

worsening problem to come. “Twelve percent of the

phase to avoid cost increases and improve health.

population is suffering from diabetes and almost 40

“People with diabetes become less productive and incur

percent from metabolic syndrome. In terms of obesity, the

absenteeism, affecting their companies.” According to

statistics we have are very high, so there is a strong chance

the US Chamber of Commerce, the loss in productivity

the penetration of diabetes will increase to 40 percent.”

caused by employees with chronic disease represents almost 5 percent of Mexico’s GDP. The association’s

AMD is working on prevention with a group of health

priority is to help the population living with diabetes

promoters by educating the public on the development

control the disease through education and access to

of willpower. “Our first effort should be to develop people’s

complete treatments.

INSIGHT |

RAILROAD HEALTH DELIVERY CLOSES GAPS IN RURAL CARE RICARDO REYES Medical Manager of Dr. Vagón, El Tren de la Salud

While medical care is a basic need, most doctors, hospitals

coverage to more communities, which will allow us to treat

and clinics are concentrated in larger cities and rural

10,000 patients,” Reyes says. El Tren de la Salud has visited

areas often isolated from the essential services required

24 of the 32 states in Mexico, although it can only visit

by their inhabitants. To address the gaps in the existing

places that are equipped with railroads and the necessary

system, Fundacion Grupo México and Ferromex created

infrastructure to receive it. In addition, the location must

the initiative called Dr. Vagón, El Tren de la Salud, a mobile

provide alternative tracks for normal train traffic during the

railway-based clinic that provides free comprehensive

four days that Dr. Vagón is visiting a community. If they are

medical services to populations with access issues and

not available, Ferromex can build temporary alternatives.

limited resources, promoting mainly the prevention, timely detection, early diagnosis and adequate control

“We do not charge patients, hospitals or governments

of diseases.

because all our services have the full support of Fundación Grupo México, our allies and collaborators, including

“Many remote communities do not have health services

Fundación Farmacias del Ahorro, Fundación MVS Radio,

or only have access to a small local clinic. These are the

Fundación Audiotech, LAPI Laboratories, Onko Solutions

main locations that Dr. Vagón, El Tren de la Salud visits

and Cinemex, which allows us to offer a wide range of

and assists,” says Ricardo Reyes, Medical Manager of Dr. Vagón, El Tren de la Salud. “We closely coordinate with local ministries of health, which has allowed us to greatly speed up our services, including follow-ups as required. El Tren de la Salud also works as a tool for the diffusion of information related to health emergencies from the ministries of health, ensuring that populations in hard-toaccess areas have the tools for the prevention of diseases such as zika, dengue, chikungunya and risks associated with pregnancy.” All services provided by Dr. Vagón, El Tren de la Salud

“

services,” Reyes says.

Approximately 65 percent of our patients are women and of those, 80 percent are heads of their family”

Dr. Vagón recently joined the Mexican Foundation

are focused on attending the main morbidities that affect

for Breast Cancer (FUCAM), which will offer a

Mexico. Reyes says that while diabetes, obesity and

comprehensive treatment that includes mammography

cardiovascular diseases are often considered a priority

and complementary studies. “Care for women is a priority

for health services. “There are many other diseases that

for Dr. Vagón and in 2018 the train included a special

go unnoticed and that are often not treated, leading to

car dedicated to the integral care of women, focusing

later complications that affect the patient’s quality of life.”

on the timely detection of cervico-uterine cancer and breast cancer. Approximately 65 percent of our patients

The service, which provides free medical care to remote

are women.”

and often inaccessible regions in Mexico, began operating in May 2014 with 11 cars and a service capacity of 250

Reyes says that when the project started he had no idea

patients daily. Today, it has the capacity to assist 500

how long it would last and what impact it would have,

patients per day. “The Ministry of Health has recognized

but its excellent reception allowed the train to travel 43

the impact that the train has had in contributing to the

routes by the end of 2017. “Now, we have more services

reduction of morbidity rates. For that reason, in 2018 the

and specialties and we are the only health service that

service will be increased up to 60 percent to provide

provides physical rehabilitation for free.”

255

Researcher at CONACYT's laboratory

INNOVATIVE MEDICINES

Investing in innovation is still a steep bet due to the amount of funds needed, extensive testing and long approval times, but this is a bet that pays out billions. For that reason, Big Pharma continues to pour resources into the development of new medicines, now with an increasing focus on biomolecules, medicines

that address rare diseases and personalized drugs, which the sector considers the future of healthcare. While the Mexican market is increasingly overtaken by generic medications, there are still many areas of opportunity to address diseases that are gaining ground and for which no cure has been found.

Through interviews with researchers, research organizations and companies that are heavily investing in innovation, this chapter analyzes the trends in innovative medicines and how they can benefit Mexico. Moreover, this chapter will delve into strategies to quickly put these products into the hands of those who need them, especially within the public healthcare sector.

257

CHAPTER 10: INNOVATIVE MEDICINES 260

ANALYSIS: Despite Hurdles, Local Market Remains a Good Bet

262

INFOGRAPHIC: Continuous Improvement Through Constant R&D

264

VIEW FROM THE TOP: Enrique Cabrero, CONACYT

265

VIEW FROM THE TOP: Rodrigo Puga, Pfizer Mexico

266

VIEW FROM THE TOP: Karel Fucikovsky, Pierre Fabre Médicament LATAM

268

VIEW FROM THE TOP: Erik Musalem, Gilead Sciences Mexico

269

VIEW FROM THE TOP: Marco Ruggiero, Chiesi México

270

VIEW FROM THE TOP: Javier Amtmann, Menarini

271

VIEW FROM THE TOP: Ana Longoria, Novartis

272

VIEW FROM THE TOP: Gloria Soberón, UNAM’s Technology Transference Department (DGV)

273

VIEW FROM THE TOP: David López, BioMarin Pharmaceuticals

274

VIEW FROM THE TOP: Mauricio Mendieta, Gedeon Richter

275

VIEW FROM THE TOP: Guillermo Ferrari, Thriven

276

TECHNOLOGY SPOTLIGHT: Innovative Formulation Technologies for Better Therapeutic Solutions

278

VIEW FROM THE TOP: Daniel Amezcua, UCB

279

VIEW FROM THE TOP: Abraham Franklin, GIINT

Juan Carlos López, GIINT

259

| ANALYSIS

DESPITE HURDLES, LOCAL MARKET REMAINS A GOOD BET With 20 of the 25 largest pharmaceuticals in the world present in Mexico, the country is working to establish a reputation as an innovation hub. There is still a long way to go to realize this ambition but in the meantime, generics are on the rise and filling the gaps in medical needs Modern medicine has been responsible for significantly

10 and 15 years and up to US$2.7 billion, according to Forbes.

improving the health and longevity of most people. Patients

Moreover, it is ripe with failure. Thousands of molecules are

can now manage infectious diseases and, in some cases,

being studied at a given moment. Of these, only a few make

diseases can be cured or have been eradicated, such as

it all the way through preclinical trials. Once a molecule

smallpox and polio. However, much remains to be done

reaches clinical trials, it has only a 9.6 percent chance of

since the world still faces diseases as old as multicellular

being approved. This makes pharmaceutical development

organisms, like cancer, and some that are increasing in

a steep bet, but one that could result in great rewards.

prevalence due to epidemiological changes like those

For instance, AbbVie’s Humira registered sales totaling

associated with old age and obesity.

US$18.43 billion in 2017 and its manufacturer expects that

260

sales of this drug will approach US$21 billion by 2020. Academia, pharmaceuticals and other public and private organizations are devoting huge sums to the development of new medicines to treat diseases that currently have no cure or to generate better and more effective drugs that improve existing standards. According to Evaluate Pharma, in 2017, global pharmaceutical R&D spending totaled US$165 billion and it is expected that this number will continue to grow in the coming years.

PHARMACEUTICAL SPENDING ON R&D WORLDWIDE PHARMACEUTICAL SPENDING (US$ billion) IN R&D WORLDWIDE (US$ BILLION)

PROBABILITY OF APPROVAL (PHASE)

PROBABILITY OF APPROVAL (ACCUMULATED)

Phase I

63.2%

Phase II

30.7%

19.4%

Phase III

58.1%

11.3%

NDA* and BLA**

85.3%

9.6%

204

199

194

188

183

177

172

165

159

149

144

200

While patent expiration and the increase of competition from generics will continue to be a problem for Big Pharma, patented medicines now hold most of the global market in sales and are expected to continue this trend, according

100

to QuintilesIMS.

MEXICO: LARGE MARKET, STRONG COMPETITION 2024

2023

2022

2021

2020

2019

2018

2017

2016

2015

Mexico is the second-largest pharmaceutical market in 2014

PHASE

*NDA: New Drug Application; **BLA: Biologic License Application Source: BIO, Biomedtracker and Amplion.

250

150

PROBABILITY OF A MOLECULE TO BE APPROVED BY PHASE

Source: Evaluate Pharma

Latin America and it is developing its manufacturing capabilities with the presence of 20 out of the 25 largest pharmaceuticals in the world, including Pfizer, GSK, MSD, Bayer, AstraZeneca, Gilead, Novartis and Johnson

This figure might seem steep, but it is a good investment

& Johnson.

considering that the pharmaceutical market is expected to reach US$1.48 trillion by 2021, according to the QuintilesIMS

The local pharmaceutical market has been gradually

Institute. This growth will be led in part by market expansion

overtaken by generics, which now surpass patented

in emerging countries and a growing number of chronic

medications sales in volume, if not in value. However, Big

diseases associated with aging and obesity.

Pharma continues to the see the country as an attractive market. “Mexico is a priority country for Pfizer in terms

However, the development of a new medication is an

of investment,” says Rodrigo Puga, President and Country

extremely slow and expensive process that takes between

Manager of Pfizer Mexico. “We think that Mexico will

TOP10 10PHARMACEUTICAL PHARMACEUTICAL COMPANIES TOP COMPANIES BY 2017 SALES BY 2017 SALES (US$ BILLION) WORLDWIDE (US$ billion)

extremely welcoming and the institute is greatly interested in incorporating these new models,” says Thompson.

enforcement for IP protection and the black market. “Mexico

22.85

has a significant problem with fake medicines, says Fernando 25.65

28.22

35.4

36.3

other challenges: complex and time-consuming regulatory 36.66

Once in the Mexican market, patented medicines face two 44.36

52.54

60 50

and an accurate diagnosis of the outcome. IMSS has been

Becerril, President of the Mexican Association for the Protection of Intellectual Property (AMPPI) and Partner and President of Becerril, Coca & Becerril (BC&B). “Mexico must

GSK

Gilead Sciences

AbbVie

Novartis

MSD

Johnson & Johnson

Sanofi

Roche

Pfizer

AMGEN

improve its internal enforcement capabilities to be on par 0

Source: ProClinical.

with the countries with which we are signing agreements.” Concerning IP protection in the country, some lament that while Mexico’s regulations are strong their enforcement is long and expensive. “IP rights enforcement in the

continue to be a key player for the future so we are investing

pharmaceutical sector is complex, as it requires first

in clinical research, in our manufacturing plant in Toluca and

a resolution from the Mexican Institute of Intellectual

in our people,” he says.

Property (IMPI) that can take some years. This decision has to be validated by the Administrative Justice Court, adding

The industry has found a large and welcoming market in

more time. Even if the court supports IMPI’s decision, the

Mexico thanks in part to COFEPRIS, which has increased its

offending party can initiate another legal process (amparo),

efforts to accelerate the approval of new molecules through

which can take another couple of years to be solved. After

the generation of authorized third parties. However, the

this, it is necessary to go to Civil Court to sue for damages,

approval of a medication is not enough to make it a market

adding another several years to the entire process, plus

success. COFEPRIS approval allows the manufacturer to

the time that it can take you to enforce the sentence,” says

sell the medication in the private sector, but that poses

Lisandro Herrera, Associate at Galicia Abogados.

some challenges of its own. “While COFEPRIS has made innovative molecules available for purchase in Mexico, there

INNOVATIVE MEDICINES MADE IN MEXICO

is little access to these medications at private institutions

While Mexico is well-known for its manufacturing capabilities,

because insurance penetration remains low,” says Cristóbal

it is not as known for its research and development. Local

Thompson, Executive Director of AMIIF.

institutions are looking to change that and convince foreign companies to bring their research capabilities to

Mexico’s largest market, the public sector, is even harder

the country. “For instance, CONACYT has tax incentives

to penetrate since COFEPRIS’ approval is not enough to

programs designed to attract private investment for R&D.

sell a medication in the public sphere. The medicine has

Through this program, companies present a project that is

to be approved by the General Health Council and then it

evaluated by experts from SHCP and CONACYT. If approved,

must be incorporated into each of the basic lists of public

the company is granted a 30 percent tax credit to be used

institutions (IMSS, ISSSTE, SEDENA, PEMEX and others).

within the next 10 years,” says Enrique Cabrero, Director

This process can take, on average, two years per institution

General of CONACYT. Another goal is to support R&D efforts

and only guarantees that the product can be introduced by

at local universities to reach the market. “It is necessary

that institution, not that it will be bought.

to fully change Mexico’s research culture to promote the transference of technology,” says Gloria Soberón, Director

Moreover, this sector has been facing another problem: budget

of UNAM’s Technology Transference Department.

cuts. During President Peña Nieto’s administration, the sector saw its budget reduced by over MX$40 billion, according to

The global pharmaceutical sector has faced diverse

Red de Acceso. To address these problems, a strategy to

challenges in recent times, but it is still a strong and

bring these products to the public sector is coming to light.

indispensable industry that shows all signs of future and

“Within AMIIF, we noticed that access to innovation across

continuous growth. Companies willing to operate in Mexico

the country remains below 10 percent. We are promoting

will find a large market, but one that is not necessarily

a new payment model wherein institutions would pay for

easy to penetrate. However, it could be a good investment

positive results instead of units, which would require the

for those who are willing to think creatively and make

monitoring of the patient’s condition throughout treatment

long-term bets.

261

| INFOGRAPHIC

CONTINUOUS IMPROVEMENT THROUGH CONSTANT R&D Advances in medicine have controlled and even eliminated

major force in some areas of the planet and an increasingly

diseases from the face of earth. Yet, there is still much to be

interconnected world means they can spread faster. For

done as the world’s epidemiological changes are leading to

these reasons, pharmaceuticals and researchers across the

a number of diseases brought about by an older population

globe are engaged in what seems to be a never-ending

and expanding waistlines. Infectious diseases are still a

search for more ways to cure people or prevent disease.

WORLDWIDE TOTAL PRESCRIPTION DRUG SALES (US$ BILLION) WORLDWIDE TOTAL PRESCRIPTION DRUG SALES (US$ billion) 800 700 600

Generics

Orphan

Prescription excluding generics and orphan drugs

500 400 300 200 100 2010

2011

2012

2013

2014

2015

2017

2018

2019

2020

2021

2022

Source: EvaluatePharma 2017

Anti-fibrinolytics Anti-hyperlipaedemics Anti-bacteria Other

27 17* 2018

2017

2016

2015

2014

2013

NEW MOLECULAR ENTITIES APPROVED BY FDA BY JUNE 2018* Name

Treats

Zemdri

Urinary tract infections

Epidioloex

Rare, severe forms of epilepsy

Olumiant

Moderately to severely active rheumatoid arthritis

Palynziq

Phenylketonuria (PKU)

Doptelet

Low blood platelet count (thrombocytopenia) in adults with chronic liver disease

Lokelma

Hyperkalemia

Aimovig

Preventive treatment for migraine

Lucemyra

Non-opioid treatment for opioid withdrawal symptoms

Akynzeo

Acute and delayed nausea and vomiting associated with chemotherapy

Crysvita

Adults and children ages 1 year and older with x-linked hypophosphatemia

Tavalisse

Thrombocytopenia in adult patients

Ilumya

Moderate-to-severe plaque psoriasis

Trogarzo

HIV patients with limited treatment options

MS therapies

Dermatologicals

30 21

2012

Oncology Oncology Antidiabetics Anti-rheumatics Antidiabetics Anti-virals Vaccines Anti-rheumatics Bronchodilators Anti-virals Sensory organs Immunosupresants Vaccines Anti-hypertensives Bronchodilators Anti-coagulants therapies MSSensory organs Dermatologicals Immunosupresants Anti-fibrinolytics Anti-hyperlipaedemics Anti-hypertensives Anti-bacteria Anti-coagulants Other

2011

2016 2022

NEW MOLECULAR ENTITIES APPROVED BY FDA PER YEAR

2010

TOP 15 PRESCRIPTION DRUG & Orphan OTC THERAPIES CATEGORIES BY WORLDWIDE SALES (US$ BILLION) Generics

1,100.8 in total

2016

excluding generics and orphan drugs

2009

2008 2009

Source: Deloitte Prescription

2008

802.6 in total

262

Erleada

A certain type of prostate cancer

Symdeko

Cystic fibrosis in patients age 12 years and older

Biktarvy

Infection in adults who have no antiretroviral treatment history

Lutathera

Gastroenteropancreatic neuroendocrine tumors

Source: FDA

NEW MOLECULAR ENTITIES APPROVED BY COFEPRIS IN 2018 (AS OF JUNE)

Rydapt

Zavicefta Lartruvo

Mavyret

Genvoya

Anti-infection Antineoplasic

Antiviral

Lenvixi

Viacoram

Vemlidy

Descovy

Taltz

Rekovelle

Digestive

Hormonal

Trevac

Breco-YAC

Norutec

Antiviral

Cardiovascular

vaccine

Cosyrel

Aqynzio

Soliqua

MR-VAC

263 Flublock Tetravalente

Metabolism

Xultophy

Hypoglycemiant

Heberprot-P

Zemiglo

Pain killer Gastroenterology Skudexa

Trelegy

Respiratory

Trimbow

PHARMACEUTICAL PRODUCTION IN MEXICO (US$ million)

STATES WITH MOST PHARMACEUTICAL MANUFACTURERS IN MEXICO

13.0 12.5 12.0 11.5

MEXICAN PHARMACEUTICAL EXPORTS (US$ million)

11.0

Amitiza

232 Mexico City 166 Jalisco 82 State of Mexico 37 Puebla 35 Morelos 25 Nuevo Leon 25 Guanajuato

1.8

10.5

1.7 1.6

10.0

1.5 1.4

9.5

Source: DENUE, INEGI 2017, COFEPRIS, ProMéxico

1.3 2010 2011 2012 2013 2014 2015 2016

2010 2011 2012 2013 2014 2015 2016

1.2

9.0

| VIEW FROM THE TOP

THE CREATION OF AN R&D POWERHOUSE ENRIQUE CABRERO Director General of CONACYT

264

Q: Last year, you mentioned the creation of a consortium

Q: The US is Mexico’s largest scientific partner. How would

of translational medicine. What are its main objectives?

a souring relationship between both countries impact

A: The goal of the consortium is to bring together many

Mexican R&D?

different projects to promote the advance of translational

A: The week after the last US presidential elections took

medicine. Through the consortium, institutions that

place, I received numerous calls from university presidents

perform high-quality research or engage in technological

stating that no political changes would affect their

development can work together with companies. Our

relationship with us. In fact, they want to intensify student

partners are UNAM, its research centers and the National

exchanges and other collaborative projects. We are also

Institutes of Health. The latter have the highest research

seeing an increasing number of countries willing to perform

productivity in terms of papers published in the best

R&D in Mexico as they see great potential for clinical trials in

scientific journals in the world.

the country’s public healthcare institutions, such as IMSS or ISSSTE. For instance, the National Institutes of Health (NIH)

Q: How can CONACYT attract more research projects and

have shown great interest in increasing collaboration with

companies to Mexico?

IMSS as the latter has strengthened its research capabilities.

A: Our tax incentives program attracts private investment

The large population of patients in these institutions

in R&D. Through this program, companies present a project

provides great opportunities for clinical trials.

that is evaluated by experts from SHCP and CONACYT. If approved, the company is granted a 30 percent tax credit

Q: How is CONACYT extending its collaborative links to

to be used within the next 10 years. This project is gaining

other areas in the world?

strength among large and medium-sized companies,

A: At the beginning of Peña Nieto’s administration,

which are already generating their own R&D infrastructure

CONACYT lacked the resources to implement an active

in Mexico.

strategy for international cooperation. For that reason, we focused our strategy in 16 countries: the US, Canada,

We notice how foreign companies are increasingly

Brazil, Argentina, Chile, the UK, France, Germany, Spain,

interested in working with us. These companies often

the Netherlands, Italy, Japan, China, South Korea, India

consult CONACYT about places where they can establish

and Australia. These efforts led to an increase in scientific

their business and how to acquire talent.

cooperation between Mexico and many countries, including Germany, with whom many bilateral exchanges have

Q: What are the main challenges to turn Mexico into a

happened in the last years. We also developed binational

knowledge-based economy?

laboratories with France, the US and other countries that

A: Mexico is trying to become a knowledge-based

involve funding and researchers from these countries.

economy, but we have discovered that the window of opportunity to do so is small. Mexico must choose the

Q: What are the main challenges the healthcare system

six or eight sectors in which it will invest to make its mark

will face in the coming years? How can CONACYT support

on the world and both biotechnology and biomedical

the sector?

sciences should be priorities.

A: During the 1970s, Mexico was praised by the international community for its excellent results in birth control. However, the effectiveness of this policy now shows its negative

The National Council of Science and Technology (CONACYT)

side, since the age of the population will change in a very

is in charge of coordinating, regulating and promoting research

short period of time. This will require a complete change

in Mexico. The council supports research through scholarships,

of Mexico’s healthcare system as it will have to focus on

grants and collaborative projects with private institutions

the elderly.

VIEW FROM THE TOP |

NEW POSSIBILITIES FOR MEXICAN PATIENTS RODRIGO PUGA President and Country Manager of Pfizer Mexico

Q: Pfizer will invest more than US$26 million in Mexico

and that all processes are transparent. The link between

during 2018. How will Pfizer allocate these funds?

COFEPRIS and IMPI needs to be strengthened to accelerate

A: Mexico is a priority country for Pfizer in terms of

the approval of sanitary registrations. It is also necessary to

investment and is included in the Top 15 affiliated worldwide.

eliminate the “counter bound” provision. Once the affected

The local pharmaceutical market, together with the size

party sues an offender for patent infringement, the former

of Mexico’s economy, ensures Pfizer’s future in Mexico.

can place a bond that forbids commercialization of the

We think that the country will continue to be a key player

product by the latter. However, the offending party can

for the future, so we are investing in clinical research at

place a counter bound, which allows them to commercialize

our manufacturing plant in Toluca. We are increasing the

the product again.

plant’s capacity and adding state-of-the-art production lines for oral products. This plant exports 22 percent of its

Q: How can innovative medicines reach the general

production to 18 countries in Latin America.

population? A: Mexico needs to invest more in healthcare. We are

Q: Pfizer Mexico grew by 9 percent in 2017. What drove

working closely with AMIIF to introduce schemes to bring

your performance?

innovative medicines closer to the general population,

A: Our strategy in 2017 included the launch of five innovative

which is a priority. Investing in health has a positive impact

products and a diversified portfolio that allowed us to focus

on productivity and economic growth. The time to invest

on those market segments that grew the most. We launched

is now, as Mexico must take advantage of its demographic

new products in therapeutic areas such as oncology, anti-

bonus. Innovative access models allow the public sector

infection, women’s health, rare diseases, branded generics,

to share the risk. The implementation of these models is

biosimilars and others. In 2018, we are launching seven

almost ready; we are only waiting for the other party, a

more products, including one for women going through

public institution such as IMSS, to be ready. We hope the

menopause, a new self-administered contraceptive, new

first of these models will be implemented in 2018.

oncology therapies and an antibiotic for use in hospitals. We will also launch a few products for our OTC line. We plan

Q: How do you measure success within one of these models?

to introduce those new medicines in the Mexican market

A: It varies completely depending on the model. For

by the second half of 2018.

instance, one of our oncology products guarantees an entire year without progression of the cancer. In this case,

Q: Which of Pfizer’s products are growing the most in the

if the medication is incorporated in an institution’s basic list,

Mexican market?

under a shared-risk model the institution would only pay for

A: The three products that are growing the most are an

the patients in whom the cancer did not advance for a year.

oncology product for metastatic breast cancer, an antibiotic

If several patients do not benefit from this effect and their

and an anti-inflammatory biosimilar that we launched in

cancer progresses, the institution would not pay for their

2017. For Pfizer, the private market is growing more than

treatment. Under current schemes, institutions pay for all

the public, where sales grew by 2 percent in 2017. While

treatments whether they work or not. These schemes are

the private market grew between 6 and 7 percent, which

already being used successfully in other countries.

reflected growth in both volume and prices. Q: How should the internal regulation of Mexico be

Pfizer is a US-based global pharmaceutical company present

improved to ensure the application of IP protection?

in over 180 countries with a strong research focus. It works in a

A: COFEPRIS, IMPI and pharmaceutical associations are

variety of therapeutic areas, including oncology, cardiovascular

already working to ensure that all information is available

health, vaccines, ophthalmology and infectious diseases

265

| VIEW FROM THE TOP

SCIENCE, TALENT KEY TO SUCCESSFUL PRODUCTS KAREL FUCIKOVSKY Director General of Pierre Fabre Médicament LATAM

Q: How has demand for Pierre Fabre’s cancer product

efficacy to other medications in its class for the treatment

Navelbine Oral and its mainstay Fabroven evolved

of genital warts. While the market for Verephen is not too

in Mexico?

large, this product will complement Pierre Fabre’s existing

A: Until 2016, Navelbine was the leading product in our

product portfolio for women’s health, an area in which we

oncology portfolio in the Mexican market, indicated

plan to continue focusing alongside oncology.

for patients with breast and lung cancer. At the end of 266

2016, a new local generics competitor in the oral form

Pierre Fabre is also developing two new molecules acquired

of administration entered the market, which reduced our

in joint efforts with Array BioPharma. We hope that these

share. So far, despite this new competitive environment,

products bring new hope and improved quality of life

Navelbine oral continues to grow and remains the market

to patients.

leader in the Vinorelbine oral segment. Q: What is Pierre Fabre’s strategy for Mexico? Fabroven, the first product developed by Dr. Pierre Fabre, is a

A: In Mexico, we are focused on two strategic imperatives:

combination of ruscus extract, ascorbic acid and hesperidin

continue the organic growth of our products in the woman’s

methyl chalcone and it is indicated for the treatment of blood

health segment and increase our footprint in the oncology

vessel conditions. After 50 years, this product continues to

and bone marrow transplant markets. We will also continue

enjoy growth in sales in both the public and retail sectors.

looking for local partnerships similar to the existing alliance

Fabroven has received the Grade A recognition for medicinal

we have with Ferring Pharmaceuticals. We are also actively

products, which places it in a better position in terms of

analyzing possible local acquisitions of companies or

scientific robustness. This certification will allow this mature

portfolios that fit our main activities.

product to continue surging in sales. Q: How can regulation evolve to improve access to Q: How does Pierre Fabre remain competitive in the face

innovative medicines?

of generics?

A: Ideally, governmental administrations would work closely

A: What makes products successful is the science behind

with industry chambers such as AMIIF and CANIFARMA

them, whether they are generics or innovative, but a

and place a greater emphasis on fast-tracking innovative

strong a commercial, sales and marketing mix is also

medications to accelerate their entrance into the market.

fundamental. However, above all, it is the human talent.

Not all innovation is high cost. Industry chambers must

Our strong investment efforts are directed at training and

continue to work together and act as a buffer between

compensating our sales and marketing collaborators.

pharmaceutical companies and authorities to help us communicate the benefits for patients of innovative

Q: Which new products will Pierre Fabre introduce into the

medications. All players in the industry would gain from

Mexican market in 2018?

working together.

A: After six years, we obtained the sanitary registration for Verephen, a product produced by our partner Medigene.

Q: How can Big Pharma increase patient awareness of the

Verephen is a phyto-pharmaceutical that has an equivalent

benefits of innovative medicines? A: This is an expensive area as it requires a significant marketing investment and close collaboration with medical

Pierre Fabre is the third-largest French pharmaceutical laboratory.

societies and key physicians. Also, having the support of

It has two main lines of business: Pierre Fabre Médicament, which

the main regulatory institutions and chambers strengthens

focuses on the pharmaceutical sector, and Pierre Fabre Dermo-

these programs and allows them to reach the vast majority

Cosmetics, related to dermatology and cosmetology

of the population.

267

For our melanoma treatment products to come, we plan

relatively stagnant in terms of growth. We will also see more

to work more closely with key oncology societies and

disruption in the distribution arena, as chain pharmacies

centers, as well as with the dermatology community. We

will continue to seek direct purchases from laboratories

also have a strong footprint with this community thanks to

and independent pharmacies will continue to downsize

our products and we see an opportunity to realize synergies

in numbers. The institutional markets will also face strong

between both high-end medical specialties.

budget constraints and seek efficiencies and consolidated purchases will be a constant.

Q: What are Pierre Fabreâ&#x20AC;&#x2122;s short-term plans for Mexico? A: We will continue expanding our brands and increasing

Q: Considering this competitive panorama, what are Pierre

market access. Accessing the institutional market in Mexico

Fabreâ&#x20AC;&#x2122;s growth expectations?

is challenging and requires real expertise. The sector has

A: Pierre Fabre will continue to believe and invest

too many players and those that want to succeed must

in Mexico. We trust in our products, we are strongly

have robust teams with full know-how. We fully understand

motivated and committed to continue delivering

that the public healthcare system and institutions are

therapeutic solutions to physicians and patients, plus

under strong continued budget pressure, but this does

novel alternatives to come. We fully acknowledge that

not mean that innovation cannot have a fundamental role

growth will also come while we remain strong in working

in the segment.

together with the medical community, the different chambers, regulatory agencies, the distribution networks

2018 will be a complex and challenging year both for the

and fostering a more professional team of collaborators

retail and the public markets. The retail segment will remain

within our company.

| VIEW FROM THE TOP

ACQUISITION HELPS EXPAND THERAPEUTIC REACH ERIK MUSALEM General Manager of Gilead Sciences Mexico

268

Q: How do you expect Gilead’s Kite Pharmaceuticals

This is the case of Mexico and Brazil, two of the world’s Top

acquisition, completed in 2017, to impact your operations?

15 markets. Brazil is above Mexico, but Mexico is more stable

A: Gilead has focused on infectious diseases, especially HIV

because of patent protection laws and its demographics.

and hepatitis B and C, for a long time and the company’s R&D

It is also a market with many potential patients, since 1.4

is distinguished by its investment in areas with unmet medical

percent of the Mexican population has hepatitis, but only

needs. We are now looking to increase our presence in other

3,000 patients are receiving treatment.

therapeutic areas and this was the reason for purchasing Kite Pharmaceuticals. Through Kite Pharmaceuticals, we

Q: Why does Mexico have such a high prevalence of

are entering oncology as the therapy we acquired involves

hepatitis? How do you reach out to patients?

extracting plasma from patients and developing individual

A: Many cases are due to blood transfusions performed

treatments for them.

years ago under inefficient quality controls, but there are also patients who became infected through the use of

Q: In what way is the relationship between Gilead Sciences

intravenous drugs or through sexual transmission. The largest

Mexico and the public and private sectors established?

population with hepatitis is over 40 years old and many do

A: We are direct providers of treatments for hepatitis. For HIV

not know they have it until they develop cirrhosis. We are

we work through Stendhal, a leader in the treatment of HIV/

working together with the government to raise awareness

AIDS. More than 90 percent of sales go to the government.

and promote early diagnosis.

Gilead Mexico leads the hepatitis and HIV therapeutic areas with a 60 percent market share. We are leaders in both

Q: In 2016, Gilead Sciences partnered with more than 2,000

Mexico and the rest of the world in these segments.

organizations to improve access to health. What was the impact in Mexico of this decision?

Q: What processes do you implement to ensure the

A: Gilead is working with government institutions to improve

efficiency of your operations?

access through creative plans. The percentage of GDP

A: We opened our offices in Mexico in 2005, but in 2017 we

that Mexico invests in health is one of the lowest in the

decided to restart from scratch. We instituted a long-term

OECD. Health must definitely become a priority in the next

investment project that includes the establishment of a more

presidential term. The industry should take a step forward

solid structure and the appointment of a new CEO. The goal

and start providing services to become a partner. This would

is to strengthen all areas of the company with the best talent

allow the government to maximize access. Our company is

available in the market. This is a five-year plan and so far we

one of the leading corporate donors for infectious diseases.

have achieved good results in the hepatitis segment. Q: To what extent have you been affected by Q: How does Mexico contribute to Gilead Sciences’

expiring patents and what drugs are being created to

global revenues?

counteract this?

A: We have access operations in Central America and in

A: Our hepatitis products are very new so we are not

the Southern Cone, while in emerging markets we apply a

dealing with this situation. With HIV, we have been leaders

business model that adapts to the needs of each country.

for a while but some of our patents will soon expire. The best way to deal with patents lost is to continue to innovate and develop therapies that allow people to benefit from

Gilead Sciences is a biopharmaceutical company focused

generics in a legal way. Between now and 2020, we will

HIV/AIDS,

launch three products targeting hepatitis and four for HIV.

liver diseases, hematology, oncology, cardiovascular and

We have a strong pipeline for fatty liver and before 2020

inflammation, among others

we will have new products in this area.

innovative

medicines.

concentrates

VIEW FROM THE TOP |

FAMILY-OWNED PHARMA’S DRUG FORMULATION A DIFFERENCE MAKER MARCO RUGGIERO General Manager of Chiesi México

Q: What are Chiesi’s main contributions to improving

universities and other pharmaceutical companies to pursue

access to health in Mexico?

the concepts of innovation and patients’ centricity.

A: Chiesi focuses on three main therapeutic areas: respiratory, neonatology and rare diseases. Despite the

Q: What role does Mexico play in Chiesi’s Latin

competitive respiratory environment reflected in the

America strategy?

Mexican market, the key element of differentiation is the

A: Chiesi’s revenue totals US$2 billion per year and Mexico

drug formulation. Thanks to its focus on research and

represents around 15 percent of its total revenue in Latin

development, Chiesi developed an extra-fine particle

America. Besides Mexico, the company has another

formulation that enables the drug to reach and treat

affiliate in Brazil; all other countries are covered by indirect

both large and small airways (peripheral arteries of the

operations. Chiesi wishes Mexico’s participation to be

lung), while all our competitors can only reach the large

more in line with the market potential and the size of the

airways. In neonatology, Chiesi is a world leader in the

country’s population.

treatment of pre-term infants affected by respiratory distress syndrome (RDS) thanks to CUROSURF, a natural

Q: Constant innovation is vital for the pharmaceutical

surfactant in intra-tracheal suspension. Launched in

market to grow steadily. How does Chiesi contribute in

Mexico in 2004, it gained an uncontested leadership and

this area?

contributed to save the life of more than 3.5 million babies

A: At the moment, we do not conduct R&D in Mexico but

worldwide. In the rare and ultra-rare diseases segment,

we are collaborating with doctors in our global network

Chiesi is continuously cooperating with universities and

and the country to participate in research for the products

institutions to reduce unmet medical needs and their

that we have already launched. Most of our R&D work takes

social impact.

place in Europe and in the US, so it is not urgent to develop this division in Mexico, which might offer the necessary

Chiesi Mexico is the uncontested leader in neonatology

incentives and legislation to promote innovation. Besides

with CUROSURF and PEYONA, which represent around

the big changes already done, the health authorities could

70 percent of total turnover. Additionally, the company is

accelerate regulatory processes while maintaining the

committed to developing its respiratory line, launched less

firmness of their assessments to attract more investment.

than four years ago, improving diagnoses and treatment of asthma and COPD.

Q: What actions is Chiesi taking to improve its competitiveness in Mexico?

Q: How does Chiesi build successful alliances to license,

A: Mexico recently signed a trade agreement with the EU

develop and market medicines that improve patients’ lives?

and we hope our operations can benefit from this treaty.

A: Chiesi interacts with all Mexican stakeholders, both

This year has generated some uncertainty by the relation

in public and private sector. In special care, sales are

with the US. Chiesi faces this uncertain environment with a

distributed 70 percent to the government and 30 percent

redesign of its commercial strategies. We hope that once

to the private sector, while in primary care the almost the

the political uncertainty has passed, the acquisition of

entire business is done in private sector. However, Chiesi

pharmaceutical products by public institutions continues.

seeks to establish alliances with all the players in the health sector in the countries where it is located. In fact, for the rare diseases pipeline, we work with NGOs to reach

Chiesi Farmaceutici is a pharmaceutical company based in

patients and gather information on the composition of

Italy and founded in 1935. The company has 26 subsidiaries,

the patient population. In all our divisions, we collaborate

three manufacturing plants, five R&D centers and distributes

with public-private institutions, hospitals, research centers,

its pharmaceutical products in more than 60 countries

269

| VIEW FROM THE TOP

INNOVATION AND REGULATION KEYS TO IMPROVING SYSTEM JAVIER AMTMANN Director General of Menarini

Q: Menarini is an Italian pharmaceutical focused on

the same quality and service standard that is offered in

OTCs. In what areas do you see potential in Mexico and

other countries. For instance, in the US more than US$160

Latin America?

billion is invested in research, of which 60 percent goes to

A: Latin America is an interesting pharmaceutical market

clinical studies. There is great potential, but we need to be

with potential. We have a strong presence in Guatemala

more competitive.

and we have been working for 35 years in Central America. 270

In the rest of Latin America, we are expecting a significant

Currently, Menarini is developing a product in Mexico; once

growth in the next few years. In the near future, we have

the development is finished, the clinical trials will be carried

a strategy to take full advantage of the opportunities in

out in the country. We are working in partnership with the

the region and Mexico and Brazil are the markets where

University of Veracruz, the Monterrey National Autonomous

we have identified the greatest potential. As part of this

University and with some hospitals. COFEPRIS is also

strategy, we want to focus on different therapeutic areas,

collaborating with us in this process.

mainly in cardiology and gastroenterology. We are also evaluating the introduction of a dermatological product

Q: What do international companies expect from the

line and consumer OTC products.

Mexican healthcare market? A: The population pyramid is reversing, the birth rate is

Q: How does Menarini use innovation to address the main

declining and the population is aging, which represents

health concerns of the Mexican population?

a potential market for companies. Therefore, they are

A: Menarini is investigating different molecules in the

focusing on chronic illnesses and/or noncommunicable

five research centers that we have in Europe and in other

diseases. The improvement of health systems in Mexico will

centers. We also modify the molecules to create new

generate more demand. In Mexico, health-related markets

products, although this takes a long time to achieve and

are growing much more than in other parts of the world,

is an expensive process. We have plans to include more

so this is an opportunity.

innovation within our product lines. Our goal is that these new molecules offer more therapeutic benefits and fewer

Q: How can the industry contribute to a healthier Mexico?

side effects.

A: It is important that in Mexico we move from a treatment scheme to a preventive scheme. This is a cultural change

Q: What research opportunities has Menarini identified

that requires time, maybe generations, but it has proven to

in Mexico?

be successful in the countries where it has been adopted.

A: The pharmaceutical industry in Mexico has been working

We need to move in this direction. The Ministry of Health

with other key stakeholders to attract more clinical studies

and the Ministry of Education have been working together

from European, US and other foreign companies. Mexico

to implement new procedures and to teach children how

has infrastructure, research centers, doctors and enough

to take care of their health, which is where the cultural

patients. In the long run, this will improve the access

change will take place. Despite the existence of IMSS,

to innovative products for the public health system and

ISSSTE, Seguro Popular and other health institutions,

private sector. Mexico should offer the research segment

there is a percentage of the population that has very limited access to these services. For these reasons, it is important that we quickly enact a Health Reform. Some

Menarini is an Italian pharmaceutical company focused on the

corporate organizations such as CCE and CONCAMIN

development of OTCs. The company produces innovative and

have been working on the development of a proposal

biotech drugs for pain, cardiovascular diseases, derma, gastro

for a health reform, which will be presented to the next

and respiratory system

administration.

VIEW FROM THE TOP |

RISK-SHARING MODEL IN THE FACE OF HEALTH BUDGET CHALLENGES ANA LONGORIA President and General Director at Novartis

Q: What are the priorities for a highly experienced health

pediatric leukemia, approved by the FDA, has a worldwide

executive like you?

presence. Yet, our Center of Excellence for the Treatment

A: Our main priority is the patient, so Novartis plans to

of Diabetes represents the main priority for Mexico. Today,

continue launching innovative, generic and bioequivalent

we are achieving levels of diabetes control above the

medicines of the highest quality to continue supporting our

national average.

solutions to more than one billion people around the world. Health systems around the world face great challenges such

Q: How is Novartis planning to approach Mexicoâ&#x20AC;&#x2122;s

as the aging of the population. By the year 2030, there

epidemiological changes and what opportunities are there

will be close to 1.4 billion people worldwide over 60 years,

for developing innovative medicines?

which will increase the prevalence of chronic-degenerative

A: Novartis is addressing this transition in four different

diseases. I want to bring more digital innovation and

ways: through innovative medicines, quality in generics and

technology with comprehensive health services to have a

bioequivalents, innovation in our business model and the

greater impact in Mexico and the world.

incorporation of digital tools. When I talk about innovation, I do not only refer to the medicines we produce, but also

Q: Most of Novartis messages are directed to patients, their

to our business model, which allows new therapeutic

families and doctors. What is the message for those other

solutions to be available for the population. Novartis applies

players who are crucial to you?

in Mexico the Risk-Sharing Model, which is an example of

A: Novartis takes special care of all its relationships. From

an innovative business scheme used to face the budgetary

civil society to the authorities, going through our entire value

challenges that afflict all public health systems throughout

chain, our message is from a leading company that is crossing

the world. The distinctive feature of this scheme is based

the borders of medicine to prolong the lives of people.

on the pay-for-results approach and not the number of

Regardless of the relationship scheme, whether employee,

units sold. This dynamic transforms our relationship with

partner, supplier or any other type, our collaborators can rest

public health institutes because we are evolving from a

assured that Novartis will always adhere to its code of ethics

transactional model to a more advanced one in which we

and the legal framework. Novartis is currently among the 20

offer value-based health solutions.

companies with best reputation in Mexico, according to the ranking published by MERCO.

Digitization is also essential to address the epidemiological transition in Mexico. Novartis is incorporating technological

Q: Novartis invests around 20 percent of its profits in R&D

and digital tools in its operations to improve its next chapter

for innovative products. What are the three most effective

of medical innovation. We believe that the companies that

therapeutic areas in Mexico for Novartis?

will be most successful in the future are those that see this

A: Novartis has more than three therapeutic areas growing

transformation as an opportunity. Under this logic, we are

in Mexico. In our pharmaceutical and oncology divisions,

re-imagining Novartis as a drug and data science company.

we are bringing innovative solutions for cardiovascular

We see our collection of data as a strategic asset that places

diseases, breast cancer, autoimmune diseases, transplants,

us in a leading position to guide the digital revolution in the

Alzheimerâ&#x20AC;&#x2122;s and migraine. Through our generic division,

pharmaceutical industry.

we are launching an HIV line to increase the populationâ&#x20AC;&#x2122;s access to high-quality medicines. These solutions generate a cost-efficient relationship that benefits the health system.

Novartis

We have examples of transformative, innovative and

headquartered in Switzerland with presence in over 140

high quality treatments in each therapeutic area of our

countries.

portfolio. For example, Novartis treatment for refractory

commercializes innovative medicines

multinational

Mexico,

the

pharmaceutical

company

manufactures

and

271

| VIEW FROM THE TOP

TRANSLATING ACADEMIC RESEARCH INTO INDUSTRY SOLUTIONS GLORIA SOBERÓN Director of UNAM’s Technology Transference Department (DGV)

Q: What are the main challenges in translating academic

for projects in this area to undergo the entire transference

research into practical products or services for the Mexican

process. Most of the healthcare projects that have

health system?

successfully finished the process are related to veterinary

A: There is a significant gap between a promising result

products, an area that is not as strictly regulated.

obtained in a research laboratory and the commercialization 272

of that product as a pharmaceutical. This phenomenon is

The office is supporting many different projects, some of

not exclusive to Mexico but it is seen in laboratories all over

them done alongside other universities, research institutions

the world. The projects that reach the market are few and

and even private companies. We are coordinating the first

far between, as there are many obstacles along the way.

full translation from research laboratory to a company in the

One of the main problems is acquiring funds to materialize

medical sector, but we have more projects in the pipeline.

these projects. For this reason, researchers often have no

One project that is nearing completion is a derivative of

motivation to undergo the extremely long and expensive

Amphotericin B, a powerful antifungal used only for serious,

process required to patent an invention and convert it into

potentially-deadly infections, but which has fewer side

a product that can be commercialized. For a project to

effects. Another advanced project is the generation of virus-

succeed, the researcher must submit to this extremely long

based vaccines for veterinary applications. Other projects

process. Translational medicine aims to solve this problem

that are in the pipeline include the generation of peptides to

by linking laboratory research with final outcomes.

fight tuberculosis, a medical device to detect acute kidney damage, antivenoms for scorpion bites, molecular markers

The first step in establishing this connection is for

for the detection of cervical cancer and an in vitro test

scientists to understand the development process and

for the early detection of hepatic fibrosis and bisphenol

the requirements and schedules companies have when

A-glycidyl methacrylate (BisGMA)-free dental adhesives.

launching products. UNAM’s DGV finds both interested scientists and companies and acts as a mediator for the

Q: How does DGV create awareness of the importance of

creation of collaboration agreements, through which

the transference of technology?

the projects are financed and companies can license

A: It is necessary to fully change Mexico’s research culture to

successful results. We facilitate the patenting process to

promote the transference of technology. The transference of

researchers. We are also promoting projects alongside the

technology can be financed through CONACYT’s Research

National Consortium of Research in Translational Medicine

Stimuli Program, which grants companies funds so they

and Innovation (CONIMETI) to facilitate the transference

can invest in R&D alongside academic research groups.

of innovation from research laboratories to companies.

CONACYT also offers Sectorial Innovation Funds (FINNOVA),

The goal is to bring together all sectors to facilitate the

which can be used to financially support the patent process

translational process for health-oriented research.

but these have been inactive for a while. Together with the researchers, the company sets goals and a timeline and both

Q: How big a role does healthcare research play at the DGV?

sign a development contract wherein the company makes

A: Most of the department’s projects are related to

an initial payment to the research group. Once the project

healthcare, but the main problem is that it is extremely hard

reaches maturity the company can license the technology. Researchers are also entitled to royalties once the product is licensed. While the patent belongs to UNAM, 50 percent

UNAM’s Technology Transference Department (DGV) helps

of the profit from the sale is awarded to the authors, 30

scientists at UNAM and other universities to patent their

percent to the research institution and the remaining to

research through alliances with private companies, which can

administration. These financial rewards act as stimuli so

later acquire and commercialize the technology

researchers invest more time in patenting their products.

VIEW FROM THE TOP |

A FOCUS ON BOTH SCIENTIFIC DEVELOPMENT, SALES DAVID LÓPEZ Country Manager at BioMarin Pharmaceuticals

Q: The annual 2018 BioMarin report mentions an increase

Q: What is your agenda with the Mexican Federation of

in demand for Naglazyme in Latin America and Europe.

Rare Diseases (FEMEXER) and with the Commission for

What is the demand in Mexico?

the Analysis, Evaluation, Registration and Monitoring of

A: There is a high prevalence of the Mucopolysaccharidosis

Rare Diseases (CAERSER)?

VI (MPS VI; Maroteaux-Lamy Syndrome) in Latin America

A: The relationship BioMarin has with organizations like

since the region contains 400 of the 1,000 patients

FEMEXFER is key to our development because we are a

estimated to exist worldwide. However, compared to other

publicly-listed company and industry regulations do not

countries in the region, Mexico has a lower demand for this

allow us to have direct contact with patients. We also

orphan drug due to a lower prevalence. Another product

believe that the foundation of CAERSER was key for the

called Vimizim has the potential to generate more demand

industry because it is necessary to increase the visibility

in the Mexican market. Vimizim has the potential to treat

of rare diseases. We hope for a rapid development of the

around 100 people suffering from Mucopolysaccharidosis

CAERSER projects and that these types of organizations

type IVA (MPS IVA; Morquio A syndrome) in the country and

will help to further open the government to these drugs

it has a wider distribution. This orphan drug is projected to

because no new orphan drug has been introduced since

have the highest demand in Mexico.

2011 at the major payers (IMSS/Seguro Popular).

Q: Given the difficulty of commercializing orphan drugs in

Q: What concrete actions does BioMarin carry out to

Mexico, how does BioMarin’s business model differ from

improve genetic research in Mexico?

others in the market?

A: Mexico is not yet an ideal country for research in gene

A: A combination of knowledge and expertise is necessary

therapy but the implementation of some improvements in

to diagnose rare diseases and thus be able to prescribe an

the health and regulatory systems would create a better

orphan drug. BioMarin’s business model is different from

environment for companies like BioMarin to improve local

other biogenetic companies because we can focus on both

investments. Our expectations for 2018 are to win the

scientific developments and sales. The remuneration we

approval of Vizimim to help those who suffer from Morquio

obtain from marketing our products allows us to boost

A Syndrome and to establish stronger alliances with the

investment in new therapies.

government to accelerate the release of our product.

Q: What expectations does BioMarin have for COFEPRIS’

Q: BioMarin will produce biologics after acquiring Pfizer’s

new Committee for Special Attention for Rare Diseases?

biologics manufacturing plant in Ireland. What is the

A: Regarding the creation of this new division, we really

expected impact for Mexico?

hope it will lead to a simplified registration process

A: The plant in Shanbally, Ireland, is an important asset

for our products; however, the main problem does not

in manufacturing for the commercial diversification of

depend on COFEPRIS. BioMarin manufactures orphan

BioMarin’s production because it helps us not to be

drugs for rare diseases with a small patient base and it

dependent on a single center. A big part of our production

faces several access barriers in other steps of the process

is in Shanbally and this fact guarantees the drug availability

to market its products. There are three steps to follow:

to the Latin American patients.

the registration with COFEPRIS, the clinical/HTA audit with the General Council of Health and the sale of our products to health institutions. Our problem arises in the

BioMarin Pharmaceuticals is an US biotechnology company and

third step because we must convince several payers such

a world leader in developing and commercializing innovative

as IMSS, ISSTE, Seguro Popular and PEMEX to consider

biopharmaceuticals for rare diseases driven by genetic causes.

us in their budgets.

It has offices in North America, South America, Asia and Europe

273

| VIEW FROM THE TOP

CONTRACEPTIVE METHODS AND THE CHALLENGE OF SEXUAL HEALTH MAURICIO MENDIETA Director General of Gedeon Richter

Q: What attracted Gedeon Richter to Latin America, and

A: We seek to satisfy the needs of doctors and patients with

Mexico in particular?

a specialized portfolio built to high-quality standards. This

A: Latin America represents 25 percent of the world market

objective requires not only an innovative portfolio but also

in the areas of reproduction and contraception and Brazil

innovation in the commercial approach.

and Mexico account for 80 percent of the healthcare market 274

for women in Latin America. To enter Latin America, we first

Q: What benefits can the Mexican healthcare system

decided to consolidate a vanguard portfolio in women’s

achieve through the use of your new therapies like Esmya?

healthcare. After consolidating our presence in Europe,

A: With Esmya, we expect to decrease 40 percent of direct

Northern Africa and Asia came the expansion to Latin

costs for the treatment of uterine fibroids in Mexico. We

America and to achieve this, the company bought PregLem,

also will offer Criprazine, the first anti-psychotic approved

a Swiss company focused on the commercialization

by the FDA in the last 25 years, for the treatment of

and development of Selective Progesterone Receptor

bipolar disorder and schizophrenia. Finally, we will offer

Modulators (SPRM) and Ulipristal Acetate (UPA). This

new alternatives for government institutions through our

helped us bring to market the company’s most important

biosimilars portfolio.

product at this time: Esmya, an ulipristal acetate for the treatment of uterine fibroids. Gedeon Richter also acquired

Q: What do you believe is the main health issue for women

Finox Holding, also a Swiss company, which has an infertility

in Mexico?

portfolio and that will lead us to the release of Bemfola in

A: Sexual and reproductive health. We must help to open

Mexico, a recombinant-human follicle stimulating hormone.

access to contraception, postpartum and post abortion contraception. Today, 50 percent of our teenagers

Q: What is Gedeon Richter’s main objective in Mexico and

embark on an active sexual life without contraceptive

how will it achieve this goal?

protection, despite the availability of information regarding

A: We have two strategic objectives. The first is to

contraception methods. There are 400,000 abortions

consolidate our presence in the women’s healthcare

per year in Mexico. We have to protect the reproductive

portfolio. We will participate in therapeutic areas such as

future of our young women and teenagers. The challenge

fertility control, menopause management and gynecological

is to change this risk status with contraception access and

therapy, but also in new areas such as diagnostic devices

ensuring access to contraceptive technology.

and we will be the first pharma on detailing diagnostic genetics, starting with a Non-Interventional Pregnancy Test

Q: How aware are Mexican women about the importance

(NIPT), in a strategic alliance with Roche. The second step

of their reproductive health?

is to consolidate a specialized-medicine business unit with

A: Between 80 and 90 percent of young women are

a focus on biosimilars. Our goal is to become a profitable

aware of contraceptive methods but approximately 50

and sustainable company following international processes.

percent of women do not use any form of contraception the first time they have sex. There is a dichotomy

Q: How does innovation support Gedeon Richter’s business

between the level of knowledge and real actions. It is

model and objectives?

our responsibility to conduct a direct campaign with patients to raise awareness among women, young and old, about the importance of safety in their sexual lives.

Gedeon Richter is a multinational pharmaceutical company

We are not trying to replace the doctor’s role but to

founded in 1901 in Hungary. It started operations in 2000 in

provide complementary information. In fact, all players

Mexico and its main areas of expertise are gynecology and the

must take responsibility to provide women with proper

central nervous system

and balanced information.

VIEW FROM THE TOP |

ELECTRONIC eSIGHT GLASSES ARRIVE IN MEXICO GUILLERMO FERRARI General Manager of Thriven

Q: What prompted Thriven to introduce eSight electronic

allowing them to regain a more autonomous and fulfilling

glasses for the visually impaired to Mexico?

everyday life.

A: We arrived in Mexico at the beginning of 2018 with the license to distribute eSight electronic glasses. When we

Q: How can the general population access eSight glasses?

arrived we already had a list of 300 clients with low vision

A: The product comes with a price tag of US$12,760, which

waiting to try them. Thriven is responding to a demand

is a cost barrier for many people. We are approaching

in Mexico for technological products that help with vision

institutions that have contact with patients who need our

loss resulting from life habits, congenital pathologies or

glasses and government entities interested in financing our

diseases such as Stargardt’s Disease, diabetic retinopathy

product. We expect the product will be attractive for the

and hypertension.

health sector given the benefits it offers.

Q: What makes eSight glasses indispensable to people

Q: What are Thriven’s plans for the company in Mexico

who have low vision?

going forward?

A: eSight electronic glasses are a Canadian technology

A: We want to grow our customer base to bring the

breakthrough for low vision patients. The lenses are

technology closer to the patients who need it by providing

equipped with a high-speed and high-definition camera

financial accessibility.

that captures everything the user sees and displays it in two OLED screens placed in front of the user’s eyes. The images are displayed in a way that some low vision

Thriven holds the rights to distribute eSight electronic glasses

users can gain sharpness in their otherwise blurry vision.

in Mexico. The technology is geared toward helping people

This enables them to see familiar faces and objects with

who are legally blind as a result of a wide set of pathologies

clarity and in some cases being able to read again, thus

or diseases

A CONACYT researcher peers into a microscope

275

| TECHNOLOGY SPOTLIGHT

276

INNOVATIVE FORMULATION TECHNOLOGIES FOR BETTER THERAPEUTIC SOLUTIONS People suffering from respiratory diseases such as asthma and Chronic Obstructive Pulmonary Disease (COPD) will benefit from Chiesi Pharmaceuticals’ Modulite application technology that facilitates the effective administration of medications. The innovative HFA (Hydro Fluoro Alkane Solutions)-based Modulite patented technology of Chiesi breaks the existing limitation of inhaled drugs that in combination with an improved performance of pmDI devices transform the way the drug is delivered to the bronchial tree. Chiesi Pharmaceuticals’ new therapeutic solutions are based on the innovative formulation technology Modulite, a solution for pressurized metered dose inhalers (pMDIs) capable of releasing extra-fine particles. As it works to improve patient health, the company has patented and brought to market a medical device holding powder to inhalation, or dry powder inhaler (DPI), that is also capable of providing extra-fine particles. Asthma patients present bronchoconstriction, thickening of the internal mucosa and the plugging of small airways, which make breathing more difficult. In imaging studies is clearly defined and demonstrated that the extrafine formulations of Modulite are able to reach, treat and benefit the small airways, the most affected lung area in asthma and COPD. The mixture of active substances and the vial patented by Chiesi’s formulations allow the formation and stability of the aerosol cloud to guarantee the release of active ingredients through the device to assist patients regardless of the respiratory constraint. Modulite also is an ozone-friendly technology because it does not contain chlorofluorocarbons. Using Modulite is simple and efficient for the patient since each dose is ready for inhalation and does not require additional action. In just four steps, the patient is guaranteed the effective administration of the Modulite treatment. The patient only needs to exhale, press and breathe, maintaining the breath for 10 seconds to ensure the medication is absorbed. Chiesi Pharmaceuticals’ vocation is the continuous search for effective solutions that improve the treatment of respiratory pathologies such as asthma. The company’s solutions satisfy patient needs through technologies that aid the administration of medicines and their active ingredients.

277

| VIEW FROM THE TOP

IN PURSUIT OF NEW AVENUES OF ACCESS DANIEL AMEZCUA Director General of UCB

Q: How do UCBâ&#x20AC;&#x2122;s products provide value to patients?

working with Seguro Popular, which would give around

A: The industry is undergoing many changes, more than

55 million people access to our medications. Given that

it was previously used to. In this regard, the company

Seguro Popular focuses on diseases such as cancer, HIV

remains focused on the client, aligning with their needs and

and diabetes, we know that they do not have biological

interests. We understand that countries and international

products such as ours.

markets may face volatility, but we manage each country 278

independently, so they do not affect each other. This allows

For instance, a person with rheumatoid arthritis cannot

us to focus our efforts on the needs of each market.

be treated by Seguro Popular with a biological product. We are talking with state authorities to change this but

We also try to work alongside public and private institutions

that is also why we look for alliances. We understand

to create products that are needed and to ensure that

that cost pressures are very high and that we have to

patients have access to them. That also constitutes part of

be team players and work alongside the institutions to

our added value: finding new ways for patients to access

ensure that we provide a benefit to the biggest possible

to our medications.

number of people.

Seguro Popular had 54.9 million people affiliated in 2016

Q: How does UCB innovate in medicines and introduce technology to its processes? A: We have a close relationship with universities all around the world. Our corporate offices for the Americas have an innovation center that helps us generate all types

We believe that patients need to be empowered through

of innovation alongside the students of Georgia Tech.

information. When patients visit their doctor, they already

We are also working to collaborate with some Mexican

have information. We want to make sure the information

universities to foster not only academic exchanges but

they have is correct so that they can make the best decision.

also to generate real-world evidence.

It is important to include patients in the treatment cycle

Q: What are UCBâ&#x20AC;&#x2122;s midterm plans in Mexico?

because if the patient does not take the medication or does

A: Mexico still offers significant opportunities to grow

not follow the indications prescribed by the doctor all our

and to generate more access to health solutions. The

efforts are in vain. We also consider prevention; that is, what

problem Mexico has is that, on one hand, you have all

the patient must do to avoid certain diseases.

the technology advances and on the other, you have a bulk of the population that does not have access to

Q: What opportunities does the company see in Mexico

neither medicines nor doctors. When you have this type

and what is its approach to take advantage?

of imbalance in the country, it generates a great number

A: There are many opportunities in Mexico, especially

of access opportunities.

when it comes to access and delivery of medications to more patients. To achieve this, we are contemplating

I think the government has done a lot in terms providing access to more people, but the conditions in the country do not allow for universal access. For that reason, we

UCB is a biopharmaceutical company that has specialized in

believe that Seguro Popular or whatever institution takes

serious diseases since 1928, mainly in two therapeutic areas:

over in the coming years will be a great step towards

neurology and immunology. It is present in 40 countries with

increasing access to healthcare and bring these services

its key products Cimzia, Vimpat, Nubrenza, Keppra and Briviact

closer to a larger percentage of the population.

VIEW FROM THE TOP |

COORDINATED EFFORT NEEDED FOR STEM CELL PROGRESS Abraham Franklin President of GIINT

Juan Carlos López Co-Founder of GIINT

Q: Could you give us some background on GIINT’s

CINVESTAV, CIATEJ, UNAM and international players in

business line?

US, Israel and South America.

JL: Our focus is on longevity and regeneration. Our approach is to study the molecular mechanisms that

Q: What are the challenges you have come across in

underlie aging and regeneration by using the therapeutic

your business?

properties of mesenchymal stem cells. Our goal is to use

JL: There have been lots of challenges. But also, science and

what we learn to improve human health by slowing the

state-of-the-art discoveries are faster than regulations and

physiological decline associated aging and to stimulate

policies making. We know that authorities and specialist

regeneration of damaged tissues. These are going to be

need to work in synergy in order to develop outstanding

two of the most therapeutically promising areas to prolong

laws and normativity. Through our bio-ethical and scientific

the healthy years of life.

committees, we approach the authorities giving evidence of different protocols that can help the patients. We strongly

Q: What is it that interests GIINT in age-related disease

believe that working as a whole unit, the patients will be the

and regenerative medicine?

most benefited with these avant-garde techniques.

AF: It is hard not to be interested in these topics as everyone ages. Adults experience declines in tissue

Q: What are the next steps in your research?

function and quality of life as they grow older, and an

JL: We are starting to venture in the fascinating process

increase in our understanding of how stem cells can

of neuro-regeneration in neurodegenerative diseases such

slow down or even revert these processes has put us in

as multiple sclerosis, spinal cord injury, Parkinson’s and

a special position. For the first time, we actually have

Alzheimer’s with the use of dental pulp stem cells and

the potential to ameliorate the decline in health that we

neurotrophic factors secreted by them.

all experience. Q: What are the challenges in regenerative medicine? Q: What are the potential clinical implications of your

JL: Regenerative medicine has been enthusiastically

research into the molecular mechanisms underlying the

received as it holds the potential to make further

life-prolonging effects of mesenchymal stem cells?

interventions redundant. Also, it may provide solutions for

JL: We base our research on the mesenchymal stem

as-yet-untreatable conditions, and it may benefit anyone

cells properties based on evidences with strong support

from neonates (possibly even fetuses) to the elderly.

of different teams such as basic science, translational

All medical fields have embraced it, from dentistry and

medicine and medical specialist. As the cells have

orthopedics to neurosurgery and cardiology.

properties such as anti-inflammatory, immunomodulation, angiogenesis, homing, and anti-fibrosis they open a

AF: Another milestone for the regenerative medicine field

new horizon and possibilities for different age-related

is the ability to automate manufacturing for technologies

processes and quality of life decline.

that are often personalized and to do so in an effective manner that allows for products to be scaled up at a

Q: How is GIINT collaborating to support local and

reduced cost.

international research efforts in stem cell therapy? AF:

At GIINT our mission is to accelerate stem cell

treatments to patients with unmet medical needs and

Grupo Impulso de Incentivación para Nuevas Tecnologías

this mission guides all our activities. We are making

(GIINT) is a biotechnological company focused on generating

advances in Basic Science and Transnational Medicine.

new ways of adding value to the available treatments with

In direct collaboration with national research centers like

stem cells and its sub-products for regenerative medicine

279

Scientist pippeting blood for haemophilia study

CLINICAL RESEARCH

Clinical research continues to be among the most expensive steps for the development of a medication due to the necessary infrastructure, volunteers, doctors and administrative personnel to manage it. Yet, these trials are essential

to ensure the safety and efficacy of a medication and for that reason no regulator would approve a drug without examining it closely. Many of the expenses involved in performing clinical research could be ameliorated by performing them in Mexico. Also, the country is close to the largest clinical hub in the world and provides many advantages in the shape of qualified personnel, a large patient base and strong research institutions. Even so, Mexico has failed to become a clinical trials hub despite considerable efforts to that end.

Through interviews with CRO directors, researchers, industry associations and other experts, this chapter looks at the main areas to be developed in terms of policies, promotion and technology so that Mexico can achieve its goal of becoming a center for clinical trials.

281

CHAPTER 11: CLINICAL RESEARCH 284

ANALYSIS: Clinical Research Ambitions Gather Strength

286

VIEW FROM THE TOP: José Viramontes, Association of Professionals Specialized in Clinical

Research (APEIC)

287

VIEW FROM THE TOP: Luis Hernández, ACROM

288

VIEW FROM THE TOP: Cecilia Moreno, PPD

289

VIEW FROM THE TOP: Karen Hahn, ICON

290

INSIGHT: Israel Vega, PRA Health Sciences

291

VIEW FROM THE TOP: Perpétua Rocha, Eurotrials

Patricia Zurita, Eurotrials

292

INSIGHT: Mary Beth Stepanek, Accelerated Clinical Research

293

INSIGHT: Juan Padierna, Laboratorios de Especialidades Inmunológicas (LEI)

294

VIEW FROM THE TOP: Melissa Rosales, RM Pharma

295

INSIGHT: Arturo Rodríguez, Infinite Clinical Research (ICR)

296

VIEW FROM THE TOP: Hector Ávila , Cecyc Pharma

297

Diego Ávila, Cecyc Pharma

ROUNDTABLE: What Would Encourage You to Perform Pre-Clinical and Phase I Trials in Mexico?

283

| ANALYSIS

CLINICAL RESEARCH AMBITIONS GATHER STRENGTH Mexico’s health industry has enjoyed substantial growth in many areas, including medical devices and generic medicines, but the country longs to make deeper advances in a key area: clinical research. Steps are being taken to prop up this vital segment and attract trials but many barriers remain All medications have risks. Before entering the market,

consuming part of the development process, clinical

every drug must undergo an extensive process to measure

trials also have a very small success rate. A molecule that

its efficacy and safety, together with a comprehensive

passes the preclinical trial phase has only a 9.6 percent

review of side effects from the common to the rare.

chance of passing all clinical trials to be approved for

This process aims to ensure that only the most effective

commercialization. Once the medication is approved,

medications become publicly available, that the risks of

there are Phase IV trials, also known as post-market

taking a medication do not exceed their potential benefits

trials, performed continuously during the product’s

and that patients and healthcare providers know of all

commercialization to continue tracking the drug’s safety

risks involved in any treatment. This assurance takes time

and side effects.

and there are no guarantees of success. 284

As the pharmaceutical and medical devices industry Acco rd i n g to t h e I n te r n a t i o n a l Fe d e ra t i o n o f

grows, so does the number of clinical trials necessary

Pharmaceutical Manufacturers & Associations (IFPMA),

before their approval.

for every 10,000 compounds tested during the drug discovery process, only 250 compounds reach the

IFPMA states that due to their expensive and time-

preclinical trial phase. In total, each chemical or

consuming nature, clinical trials require a series of

biological entity tested has less than a 0.01 percent

enabling features that allow the optimal performance of

chance of overcoming this phase, which is known as the

these tests to optimize results. These include an efficient

research stage.

and supportive regulatory system, a well-regulated system for enrollment, good medical schools, research

Clinical trials take on average between six and seven

centers, hospitals and doctors, as well as a growing

years and up to 65 percent of the budget assigned to the

market receptive to innovation.

development of a medication. They are divided in three phases. Phase I requires between 20 and 100 healthy

With its large population, closeness to the US, well-

volunteers to determine appropriate dosage. Phase

trained physicians, large network of public hospitals and

II requires between 100 and 500 patients to measure

responsive regulatory entity, Mexico looks on paper as

efficacy and side effects, while Phase III requires from

an ideal destination for clinical trials. Moreover, according

1,000 to 5,000 patients and measures efficacy and

to ProMéxico, the country is the largest exporter of

safety. Besides being the most expensive and time-

medical devices in Latin America and the eighth-

REGISTEREDSTUDIES STUDIES YEAR REGISTERED BYBY YEAR (thousand) 300 250 200 150 100 50

*As of Aug. 5, 2018. Source: Clinicaltrials.gov.

Trials Source: Clinicaltrials.gov. *As of Aug. 5, 2018.

2018*

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

largest in the world. Mexico is also the leading exporter

with IMSS, the largest provider of healthcare in Mexico

of pharmaceutical products in Latin America and the

and the institution with the largest number of potential

second-largest market for pharmaceuticals in the region.

patients. Another that has been addressed, although not completely, is the long approval times COFEPRIS takes

However, of the 279,974 clinical trials performed worldwide

to authorize a clinical trial. “Other countries can begin

as of August 2018, only 3,103 were performed in Mexico,

clinical trials in three to six weeks while we have to wait 90

according to clinicaltrials.gov. This means that only

days. While Mexico does not have the most competitive

1.1 percent of all clinical trials are done in the country.

times, the country does have excellent researchers and

Although this figure seems to be consistent with Mexico's

that makes the wait worth it,” says Israel Vega, Clinical

population, which represents 1.6 percent of the total world

Operations Manager of PRA Health Sciences.

population, the US has only 4.2 percent of the population and 40 percent of all clinical trials in the world. Considering the closeness of the two countries and Mexico's lower medical costs, the country should be an attractive destination for clinical trials. Among its advantages, Mexico has experienced researchers in all therapeutic areas who are fully aware of all regulatory standards and over 40 years of

Of the 279,974 clinical trials performed worldwide as of August 2018, only 3,103 were performed in Mexico

experience in clinical research and experience implementing protocols in diverse therapeutic areas, according to

To address slow approval times, COFEPRIS created

ProMéxico. Furthermore, the country offers competitive

several centers that pass preliminary judgment on clinical

costs, 237 research ethics committees to approve protocols

trials for medicines and medical devices, called Unidad

and many approved research sites.

Acreditada de Apoyo al Predictamen (UHAP). However, “only a few are fully functional,” says Hahn.

For years, industry players have tried to help this sector take off. “Many initiatives are being developed

Among the main advantages for future clinical research

to strengthen clinical trials; we just have to nail them

in the country is the framework to promote clinical

down,” says Karen Hahn, Program Director for ICON.

research, signed in January 2017 by COFEPRIS, SAT,

Among those initiatives are collaborative plans to work

IMSS and industry representatives. This agreement will allow CROs to conduct clinical trials at IMSS and

REGISTERED AND REGISTERING STUDIES BY PERCENTAGE OF REGISTERED LOCATION (percent)

STUDIES BY LOCATION

it is expected that other public health institutions will develop similar plans. However, working with public hospitals brings its own challenges. “Public institutions have a much larger concentration of patients compared

48% Non-US only

280,459 studies registered

35% US only 5% Both US and non-US

12% Location

not provided

to the private sector but, unlike other countries, public institutions still need to build the necessary capabilities for clinical trials in terms of infrastructure, personnel, time and qualified researchers. Clinical research differs from regular medicine in that it requires much more documentation and follows many more regulations. In many cases, hospitals do not have the number of experienced, qualified researchers or the infrastructure

PERCENTAGE OF RECRUITING STUDIES BY LOCATION

and personnel necessary to perform these trials and

Location not provided

provide the necessary administrative support,” says Both US and non-US US only

47,676

Non-US only

studies recruiting

Cecilia Moreno, Director of Clinical Management at PPD.

57% Non-US only

38% US only 5% Both US and non-US

While there are still wrinkles to iron out, recent efforts from the public and private sectors aim to promote the growth of clinical research in Mexico as it is perceived to be a large opportunity for investment. “Mexico receives only 6 percent of the total investment in clinical research across the globe. Considering the size of the population, the country could attract up to 40 percent of the total,”

Source: Clinicaltrials.gov 5, 2018. Location notAugust provided

Both US and non-US US only

says Luis Hernández, President of ACROM.

285

| VIEW FROM THE TOP

A VOICE TO STRENGTHEN MEXICO’S POSITION IN CLINICAL RESEARCH JOSÉ VIRAMONTES President of the Association of Professionals Specialized in Clinical Research (APEIC)

Q: How can the Association of Professionals Specialized in

the regulatory authority in Mexico and the Autonomous

Clinical Research (APEIC) help to improve clinical research

University of Nuevo Leon (UANL), we are generating

in Mexico?

a national registry of the number of centers that are

A: We are collaborating with other associations, such as

conducting clinical research. By now, we roughly estimate

CANIFARMA, AMIIF, the CRO’s Alliance of Mexico (ACROM),

that the country has between 600 and 700 active sites.

the Association of Physicians of the Pharmaceutical Industry 286

(AMIFAC), the Mexican Association of Professionals in

Q: How is APEIC promoting Mexico as a destination for

Sanitary Regulation Responsible (AMEPRES) and the

clinical trials?

Mexican Association of Pharmacovigilance (AMFV) to

A: During early 2017, AMIIF began an initiative to fuel clinical

create events related to clinical research. In general,

research in Mexico alongside COFEPRIS, the CONBIOETICA,

we follow the criteria set by TransCelerate, a globally-

the Coordinating Commission of National Institutes of

recognized pharma organization.

Health and High Specialty Hospitals (CCINSHAE), ProMéxico and the main academic institutions, pharma companies and

Q: What values does APEIC represent for the industry?

CROs, with the goal of raising awareness of the potential

A: APEIC provides a voice to everyone involved in clinical

that Mexico has regarding clinical research. This initiative

trials. We have three objectives: increase the number of

brings together for the first time the industry, including

professionals working in the sector, bring together all

CROs and pharmaceuticals, academia and the authorities.

interested parties to increase our global competitiveness

One of the first results was the publication of a booklet to

and spread the message and promote Mexican clinical

promote Mexico at international conferences and meetings.

research locally and internationally. APEIC brings together

SAT is also working on this initiative to streamline imports

all professionals and associations that perform clinical

related to clinical research. The goal of this interdisciplinary

research and related activities.

and multi-institutional initiative is for Mexico to enter the Top 10 countries with the largest number of clinical trials

Q: What are the main barriers for scientists and doctors

within the next five years, taking advantage of Mexico’s

wanting to begin clinical research studies?

several significant and natural advantages. Just to have

A: Researchers must be open to learn highly advanced

a point of comparison, South Korea is among the Top 10

Good Clinical Practices (GCPs) and Good Documentation

countries in number of trials but has only a third of Mexico’s

Practices (GDPs). The sector is highly regulated and

population.

undergoes constant audits, so researchers must adhere to a large number of national and international regulations.

Q: How is APEIC working with local authorities to streamline clinical trials in Mexico?

Requirements to perform clinical trials are extensive, so

A: Although we should recognize that COFEPRIS has

companies prefer to work with experienced centers that

improved greatly over the last four years, there is still room

have good facilities, strong ethical committees and qualified

for a greater contribution. The commission is a leader in

teams. The association’s goal is to increase the number of

the region in several areas, including its approval times, but

centers in Mexico that meet these criteria. Together with

these can be shortened to further increase the country’s competitiveness. There are some ongoing initiatives that eventually can have a good impact, such as the merging

The Association of Professionals Specialized in Clinical

of the three committees currently needed to approve

Research (APEIC) promotes education in clinical research by

clinical trials into a single entity. Authorities are aware of

linking experts in the subject, including researchers, professors,

the existing hurdles and are working alongside us to solve

regulatory authorities, ethics committees and patient associations

these matters.

VIEW FROM THE TOP |

CLINICAL TRIALS CAN BENEFIT PATIENTS, MEXICO’S ECONOMY LUIS HERNÁNDEZ President of ACROM

Q: What is ACROM’s role within the healthcare ecosystem?

This is a self-regulation principle taken by CROs that will

A: Our goal is for pharmaceutical companies to see us

help to improve Mexico’s transparency regarding clinical

as reliable partners. The pharmaceutical industry has

trials. The agreement between ACROM and CETIFARMA has

put its trust in companies affiliated with ACROM, so our

been fully supported by the industry and by COFEPRIS. It

goal is to meet its expectations. ACROM was created to

sets an important precedent for self-regulation. The main

strengthen clinical research in Mexico and to comply with

goal for 2018 is for all companies that belong to ACROM

international standards to make the country attractive to

to guarantee transparent operations. 287

foreign companies. Mexico's image as an unpredictable country would hinder investment and trials. The association

Q: Mexico’s strong potential for clinical trials is an objective

promotes regulatory changes to ensure that regulators

but not a reality. How can this be changed?

comply with established deadlines. ACROM works closely

A: Just having good intentions is not enough. We are

with its clients, centers, institutes and hospitals to attract

working with AMIIF to bring pharmaceuticals and

patients for trials.

CROs together and ProMéxico is promoting the sector internationally. Operations have improved thanks in part

Q: What can clinical trials represent for Mexico in terms of

to oversight of clinical trials by the National Commission

investment attraction?

of Bioethics (CONBIOETICA).

A: Mexico receives only 6 percent of the total investment in clinical research across the globe. Considering the size of

Several years ago, Mexico had a boom in clinical trials,

the population, the country could attract up to 40 percent

but at that time the country lacked the infrastructure

of the total. COFEPRIS and the government want to canalize

and the appropriate regulations to carry them out, which

this investment to the public sector but the challenge is that

left a negative image. Before incorporating more clinical

these payments are forbidden by law. Thus, the first step is

trials in the country, all health institutions must have the

to change the rules. The sector is unwilling to invest if there

infrastructure to carry them out efficiently.

is not enough transparency. Q: What must be done to make public health institutions Q: What do CROs need to do to bring more clinical trials

more receptive to clinical trials?

into the country?

A: Public health institutions need to fully understand the

A: Many CROs are international companies and we, as their

need for these trials, the benefits they bring to patients

Mexican representatives, keep pushing their head offices to

and how they differ from other research lines. Doctors at

bring more trials to Mexico. Even though tests performed in

public institutions continuously perform basic research

the country are trustworthy, the objection we hear is that

with excellent results but performing industry-sponsored

timelines in the region are unpredictable. For instance, the

research is taboo. It is necessary to change this mindset

earthquake of September 2017 greatly damaged COFEPRIS’

within public institutions. Clinical trials provide access

main offices, paralyzing the council for three months.

to innovative medicines to people who would otherwise have to wait for their approval and then pay high prices to

Q: What are the main objectives behind ACROM’s recent

acquire these medications.

partnership with CETIFARMA? A: All CROs in Mexico should produce quality, transparent information. For that reason, we allied with AMIIF and signed

ACROM , Mexico’s CRO Alliance, brings together clinical research

a collaboration agreement in 2018 with CETIFARMA. This

organizations with the objective of strengthening clinical research

agreement also will facilitate the close monitoring of ethics

in the country. Its members include 15 of the largest CROs

compliance in clinical trials.

operating in Mexico, such as PPD, IQVIA, ICON and Covance

| VIEW FROM THE TOP

HOW TO TURN MEXICO INTO A CLINICAL TRIALS HUB CECILIA MORENO Director of Clinical Management at PPD

288

Q: How is the PPD study profile changing according to

the infrastructure and personnel necessary to perform these

global scientific and health trends?

trials and provide the necessary administrative support.

A: Mexico is a very important contributor to clinical trials in

We must ensure ethical research, considering that our

Latin America and provides a significant number of patients

main priority is patient safety followed by the quality of

for clinical studies. Enrolment and quality are relevant in

data generated to support clinical studies results. Our

the Latin-American region, particularly as innovation

industry has a successful history conducting studies in the

increasingly focuses on areas like oncology, immunology

public sector. We rely on highly professional personnel and

and rare diseases, with an expansion of activity in biologics

institutions who understand the necessary requirements to

and genetic diseases. Globally, studies are evolving to

support clinical research. The number of patients who can

incorporate new types of drugs, such as genomic medicine

be treated is now more significant, as well as the benefit of

and biosimilars. For PPD in Mexico, we are prepared at all

receiving new treatments and having access to specialized

levels and already have entered this new era. We implement

exams and diagnostic tests. Several studies are going to be

multi-centric studies, mainly Phase II and III trials.

introduced for oncology, immunology, rare diseases and orphan conditions, so collaboration is key to continue to

As molecules become more complex, studies also have

expanding clinical research in Mexico.

become more complex and require a more circumscribed patient profile. In the case of genomic medicine, these tests

Q: How does PPD ensure the acquisition of enough patients

limit the number of potential patients. However, given its

for its clinical trials?

large population and extensive experience in the clinical

A: We are working with networks that already have

research field, Mexico has great potential for finding

research centers experienced in patient recruitment and

these study subjects. Also, there is a growing number

with qualified personnel, equipment and facilities. The time

of personalized medicine, HIV and hepatitis trials being

periods to subscribe patients and begin clinical trials are

initiated in our country.

of the utmost importance. Mexico has reduced its waiting times and different players in the country are working to

Q: How does collaboration with public healthcare institutions

further reduce them to enhance efficiency. Specialized

support the development of clinical trials in Mexico?

groups, such as experts in site selection at the startup

A: Public institutions have a much larger concentration of

phase, strive for prompt activation and rapid enrolment in

patients compared to the private sector. Large numbers

a joint effort with sites. A regional approach to the ideal

greatly facilitate finding the required patients for many

country mix is the most appropriate method to ensure

types of trials. But, unlike other countries, public institutions

enrolment with the highest patient safety and quality

still need to build the necessary capabilities for clinical trials

standards.

in terms of infrastructure, personnel, time and qualified researchers. Clinical research differs from regular medicine

Q: What measures should be taken to strengthen Mexicoâ&#x20AC;&#x2122;s

in that it requires much more documentation and follows

position regarding clinical trials?

many more regulations. In many cases, hospitals do not

A: Performing clinical research in public institutions would

have the number of experienced, qualified researchers or

be a significant first step toward Mexico consolidating as a clinical trials hub. The second step would be to attract more studies to Mexico, but to do so, it is necessary to keep

PPD is a contract-based research organization with offices in

on reducing startup timelines and increasing predictability.

47 countries. PPD has operated in Mexico since 1998 and works

While Mexico has proven itself to be a quality location for

in early development, clinical development, post-approval

clinical research, the country still needs to be even more

studies and consulting

competitive to attract more studies.

VIEW FROM THE TOP |

CRO TURNS 20, CONTEMPLATES ITS ROLE IN THE REGION KAREN HAHN Program Director for ICON

Q: What actions is ICON taking to strengthen its position

Working with other states will also grant us access to

as a CRO in both Mexico and Latin America?

patients who present diseases seen only in specific regions.

A: This year, ICON celebrates 20 years in Latin America, a region in which it has about 535 employees. Of these, 210

Q: What can CROs do to strengthen clinical trials in Mexico?

are in Mexico, which makes the country our largest office

A: Both pharmaceuticals and CROs should be open to

in the region. This year, we will focus on strengthening our

working with new research sites, since we often stay with

business in Latin America through the development of new

the same one for too long. It would also be good for research

research areas and clients.

sites to create their own organizations or associations to work on their shared goals. This network could help research

In Mexico, we are fully aligned with the epidemiological

sites to better distribute their work among each other to

changes the country is facing. We have analyzed the

avoid saturation at sites in demand. All CROs work with more

National Health Plan to target the priorities of each

or less the same research sites. Furthermore, most research

presidential administration in line with the epidemiological

sites are located in major cities. It would be beneficial for

changes of the population. We have also shortened our

CROs to bet on new sites and doctors who are willing to

internal times and invested significantly in employee

learn the minutia of clinical research.

retention. Q: How can technology benefit patients and facilitate Q: Mexico has significant potential to become a hub for

clinical trials?

clinical trials. What is needed to achieve this goal?

A: Electronic medical records have been under development

A: Many initiatives are being developed to strengthen

for a long time, but they have yet to materialize in our

clinical trials; we just have to nail them down. For instance,

country. The existing health regulation grants patients full

many steps have been taken to promote collaboration

access to their clinical record but they are not given any

with IMSS but there are still obstacles to successfully work

information when they leave an institution. These records

with the institution. Another problem is that although the

could be shared among health institutions following the

government has made a strong effort to open several

strictest security measures.

centers that pass preliminary judgment on clinical trials for medicines and medical devices, called Unidad

Q: What agreements is ICON creating with public

Acreditada de Apoyo al Predictamen (UHAP), only a few

and private organizations to improve clinical trials in

are fully functional. This initiative was so good that it is

the country?

now being implemented in other Latin American countries,

A: Alongside ACROM and AMIIF, we have participated in

but implementation challenges have limited its function

the revision of several regulations, including the General

in Mexico.

Law of Health and those concerning pharmacovigilance. The existing legislation is too old. The goal is to update it

Q: How can the clinical research industry’s collaboration

to tackle today’s needs in terms of employees, technologies

with IMSS be improved?

and processes. The sector needs transparent regulations in

A: IMSS’ internal bureaucracy has been problematic and the

accordance with international standards.

rules for paying the institution have not been well defined. IMSS clinics and hospitals located outside of Mexico City must also be incorporated into this collaboration scheme;

ICON aims to accelerate the development of medicines and

butat the moment, other states and their patients are

medical devices. ICON employs over 13,250 people in 38

staying out of this initiative. Innovation should be accessible

countries and specializes in internal medicine, infectious and

to all citizens, not just to those who live in a large city.

gastrointestinal diseases, women’s health and rare diseases

289

| INSIGHT

PUBLIC-PRIVATE COLLABORATION TO IMPROVE CLINICAL RESEARCH ISRAEL VEGA Clinical Operations Manager of PRA Health Sciences

290

Treatments and therapies are evolving rapidly but so

and research is necessary to maintain technological

too are diseases. To keep pace, research is key, says

momentum. “Therapies are advancing at an unbelievable

Israel Vega, Clinical Operations Manager of PRA Health

rate. We have seen significant technological advances

Sciences, a 40-year-old CRO headquartered in the US

in the last 10 years of all drugs we have worked with,

with offices in over 80 countries. To maintain the fight

from cardiovascular medications to immunology. The

against a number of ailments, the company is increasing

epidemiological profile of Mexico has also evolved,

its patient base and capabilities in Mexico by allying with

especially in relation to tropical diseases."

public institutions. "We are seeing the emergence and resurgence of tropical “Ninety percent of our work in Central America is

diseases such as zika and dengue since their vector has

performed in Mexico,” says Vega. PRA Health Sciences

mutated to reach higher altitudes. The mosquito used to

works in six therapeutic areas and handles 15 countries

thrive at lower altitudes, which made it common in coastal

in Central America and the Caribbean from its offices in

areas, but now we are seeing cases at higher altitudes,”

Mexico. To increase its access to potential patients, through

says Vega.

ACROM, the CRO signed a collaboration agreement in 2017 with IMSS to begin research protocols in March 2018.

According to Vega, 2017 was an important year for PRA Health Sciences as the regional office grew 40 percent

“We can work with IMSS using any molecule in any

in number of studies and headcount. “Our offices in

therapeutic area since the institution has a large volume of

Mexico had the largest growth in Latin America, above

patients in each specialty. The institute is highly interested

Argentina and Brazil. We are seeing an increasing number

in conducting clinical research, especially following the

of studies coming to Mexico, as trust rises in our country’s

leadership of Mikel Arriola, who opened the doors for

capabilities. In 2018, we expect to realize the fruit of

collaboration and facilitated paperwork,” says Vega.

2017’s negotiations. Most of our studies are performed

“One of the main advantages that we obtain from the

simultaneously at many different sites across the world.”

collaboration with IMSS is the access to its centralized databases.”

Vega has high expectations for Mexico, even though the country still has room for improvement in clinical research.

PRA Health Sciences believes that IMSS set a precedent

“Mexico has grown significantly in terms of clinical research

for working with public institutions and the next step

in capabilities, number of researchers and openness to

for ACROM and CROs will be to take this model and

the sector, but there is still a lot of work to be done to

apply it to ISSSTE, the Social Security Institute of State

ensure that the benefits of clinical research can reach a

of Mexico and Municipalities (ISSEMyM) and the General

larger number of people.” Vega points towards reducing

Health Council. The new partnership with IMSS is just

approval times and improving relations with COFEPRIS

one of the many steps aimed at increasing the number

as clear successes, but he says that there are still many

of clinical trials conducted in Mexico. Another step is a

areas to address.

collaboration with AMIIF that has “ambitious goals to increase investment in clinical research within a year by

Vega seems confident of the country's future. “We will

convincing more pharmaceutical laboratories to invest in

continue going forward together. Other countries can begin

Mexico by attracting more research studies.”

clinical trials in three to six weeks while we have to wait 90 days. While Mexico does not have the most competitive

Such collaborations are imperative if Mexico is to continue

times, the country does have excellent researchers and that

moving forward in the battle against a variety of diseases

makes the wait worth it.”

VIEW FROM THE TOP |

HOW REAL DATA CAN CHANGE HOW MEXICO DOES MEDICINE Perpétua Rocha (PR) Global Director Real World & Outcomes Research at Eurotrials

Patricia Zurita (PZ) Country Director Mexico at Eurotrials

Q: What motivated Eurotrials to open offices in Mexico in

being adapted to facilitate research and institutions and

2015 and what is your strategy for the country?

hospitals receive the necessary support to perform research

PR: When operations were consolidated in South America,

projects, Mexico will become a big player in the clinical

Mexico was naturally our next main objective. The size of the

research arena.

country, the patient population and the strategic decision by government and regulators to foster and develop

Q: What benefits will epidemiological studies bring to the

clinical research activities in Mexico led us to invest in the

industry, doctors and patients?

country. In Mexico, Eurotrials works with large multinational

PR: Access to real world data is now fundamental for all

pharmaceutical companies, important local manufacturers

players in healthcare and specifically for characterization

and biotech and medical devices companies. We have seen

of diseases, their prevalence or the determination of the

increasing demand for clinical trials from Phase I to IV for both

value of new pharmaceuticals.

chemical and for biological compounds, and bioequivalence and bioavailability studies. The number of studies related to

The industry, doctors and patients will benefit from

medical devices is also increasing significantly.

having real data that enables them to make more informed decisions. For instance, the incidence of type

PZ: We are boosting the number of studies we perform in

2 diabetes in Mexico is very different to other countries.

Mexico, focused on real-world and outcomes research. We

Epidemiological studies, from large database studies to

have seen that local companies need these types of studies

observational research projects, are a fundamental tool to

and we will focus on supplying them. We bring many years of

study Mexico’s profile.

experience in running these projects in Europe. Real world and outcomes research studies are increasingly PR: Epidemiological studies, a main strength of Eurotrials’

necessary to enable governments to make more informed

Real World & Outcomes Research division, are increasingly

decisions in an environment of cost constraints and given

necessary and this unit performs these studies to obtain

the high cost of innovative therapeutics. Observational

outputs in clinical and health economics that can be used by

research allows the gathering of data related to efficacy,

doctors, pharmaceutical companies, patients and authorities.

safety and cost of a specific drug, diagnostic or treatment.

At Eurotrials, we are experts in these types of projects and it is rewarding to see how they suit current Mexican needs

Q: How can this information influence decision-making

and trends.

among players in the health sector? PZ: When deciding whether to introduce a new medication

Q: How can Mexico become a hub for clinical research?

into a country, many aspects come into play. Besides the

PR: The Mexican health system has been focused on its

medicine’s price tag, it is important to consider how long

primary objective: treat patients. Simultaneously, clinical

a patient will be hospitalized under each medication and

research has been considered a strategic interest for

the costs for this. Other significant factors are the patient’s

the country, as it leads to innovation and fosters best

quality of life after treatment, the burden of the disease on

practices. New regulations and training of personnel at

their families and many other costs.

public institutions to perform clinical research are creating a favorable environment for these projects. If these strategies continue to be implemented and improved, Mexico may

Eurotrials is a CRO specialized in clinical and translational

become an important player in this field. The country has

research in the areas of rheumatology, ophthalmology,

experienced and knowledgeable professionals in healthcare

oncology, rare diseases, cardiology and others. The 20-year-

research. If the national strategy continues, regulations keep

old company opened an office in Mexico in 2015

291

| INSIGHT

SPEED AND FEASIBILITY, TWO KEY ASPECTS OF CLINICAL TRIALS MARY BETH STEPANEK Founder and President of Accelerated Clinical Research

292

In an industry looking for speed, sometimes it is better to

paperwork to Institutional Review Boards (ethics,

bet on certainty, says Mary Beth Stepanek, Founder and

investigative, and biosecurity and committees as applicable)

President of Accelerated Clinical Research (ACR), a US

throughout Mexico and Latin America. “We are focused on

consulting company that performs clinical trial monitoring,

clinical research and are prepared to provide clients with

regulatory consulting, reimbursement and health outcomes

anything they need to safely and successfully complete

services for Mexican and foreign companies.

their goals.”

“When a company wants to perform a clinical study the first

Clinical studies, explains Stepanek, require well-trained

thing they ask is, ‘How long will it take to begin the study?’ I

researchers with significant experience in their field. “With

answer: ‘Do you want to begin the study or do you want to

an investigational medical device, the development starts

finish it?’” In some clinical studies, patient recruitment and

with a prototype that is expected to be safe based on

patient voluntary continuation until the end of the trial are

extensive pre-clinical testing. Then, the developer/sponsor

critical issues for data acceptability. Regulatory authorities

initiates clinical studies to prove safety and improve

are reluctant to accept data if patients drop out before the

the device along the way using the medical doctor’s/

conclusion of the follow-up period. If there is a high dropout

researchers input on device features.” She adds that for

rate, authorities could not be sure if patients did not return

medical devices some studies take six months, while

because of dissatisfaction or if the company decided not to

others can take up to 10 years. Slower approval processes

disclose the data. “For example, the FDA does not accept

in Mexico have already hindered the clinical research

clinical trial data if more than 20 percent of the volunteers

industry. “Six years ago, COFEPRIS took only one month to

dropped out of the study.”

approve a trial. Because of that, multiple sponsors wanted to perform studies in Mexico, creating an abundance of

Stepanek believes, however, that when talking about

protocols to review. COFEPRIS could not catch up, so the

recruitment and retention, the odds are in Mexico’s favor

council extended its timeline to 90 days. As a result, Mexico

because of its unique doctor-patient relationship. Mexican

is receiving fewer device studies due to the lengthy time it

physicians have good relations with their patients, she

takes to approve them.”

says, so they return for the necessary follow-ups. Stepanek experienced this situation first-hand in 1998 while working

Stepanek sees significant potential in Mexico. “Latin

with Intuitive Surgical, the manufacturer of the Da Vinci

America hosts around 8 percent of the world’s population

Surgical System. “Our analysis concluded that any other

and 3 percent of the world’s clinical trials. In Mexico, the

location in which we performed these trials would take

proportion is similar. The US has 4 percent of the world’s

between 18 and 27 months to complete enrollment.”

population and 40 percent of the clinical trials, while

However, the company completed its enrollment in just

Canada has 0.5 percent of the world’s population and 16

three months, which convinced Stepanek about the

percent of the clinical trials.”

opportunities Mexico had for clinical research. As Mexico continues growing its interest in clinical research ACR works with medical device manufacturers that have

as a means of delivering extra medical attention and

their own Clinical Operations Department or outsource

resources to the population, Stepanek believes the country

Clinical Operations services. ACR acts as sponsor legal

will attract more and more clinical trials. It must, however,

representative and helps companies to comply with the

address its slow approval times. “We are not the right place

requirements of the Mexican regulatory processes. The

when you are in a hurry to get your study started. We are

company also helps clients to select qualified medical

the right place if you want to acquire large volumes of

physician researchers and investigational sites to submit

quality, relevant data.”

INSIGHT |

SCIENTIFIC NETWORK ADDRESSES INDUSTRY PROBLEMS JUAN PADIERNA Director General of Laboratorios de Especialidades Inmunológicas (LEI)

In the complex and ever-changing healthcare environment,

The company is now entering the biosimilar field, for which

the secret to growth is knowledge, says Juan Padierna,

it is only waiting for COFEPRIS’ certification. Current

Director General of Laboratorios de Especialidades

regulations require biosimilars to be as close as possible

Inmunológicas (LEI). LEI, which began as a clinical

to the innovative drug. Copying them exactly would require

laboratory, capitalized on a solid knowledge base to

using the exact same organism, which is often not possible.

develop a wide range of capabilities, not only for clinical

In these cases, regulations establish a degree of similarity

analysis, training, quality control and microbiology, but also

to the original product that the biosimilar must achieve to

for research and development of innovative medicines.

avoid immunogenicity. “We use high-performance liquid chromatography-tandem mass spectrometry (HPLC-MS)

“LEI was founded on a commitment to knowledge and

to measure the molecules we synthetized and ensure they

we stay up-to-date with the latest advances in all fields

have a similar primary structure to the patented medicine,”

related to healthcare,” says Padierna. “We offer our clients

Padierna says. “Next, it is necessary to prove that the

access to a broad database of knowledge through the many

biosimilar’s 3D shape is similar to the patented medicine, for

different experts who work at LEI. We have created a strong

which we acquired circular dichroism equipment to measure

and comprehensive network of scientists to solve industry

whether both molecules behaved in the same fashion under

problems.”

circularly polarized light.” LEI then performs cell cultures of the biosimilar to measure potency in comparison to

LEI began operations as a clinical laboratory for HIV and

the patented medication followed by the use of Biacore

AIDS-related tests, including immune system evaluation,

equipment to measure specificity and affinity in molecular

but the company has evolved. “We began studying the

interactions. This MX$9 million equipment was partially

potency of thymosin, an immunostimulant protein, through

financed with CONACYT funding.

Rosetta modeling. This project allowed us to get a foot in the biotechnology field, after which more projects

“Our company has a comprehensive vision that addresses

from national and international entities materialized,”

every problem a client might face,” says Padierna. This

says Padierna. Through this work, the company identified

required a large investment in technology for the acquisition

a clear need in the local pharmaceutical market. “At the

of capillary electrophoresis, flow cytometry and high-

time, most medications were small molecules,” says

performance liquid chromatography (HPLC). In early 2018,

Padierna, pointing to the need for developing capabilities

the company published research on the gut microbiota of

to address biotechnological and biosimilar drugs. For that

mice, which has many different functions in the body, such

reason, the company expanded first into quality control

as improving digestion, stimulating the immune response

for biotechnological products. “We decided to invest in

and protecting against pathogens. In a paper published

cutting-edge technology, including 3D cell cultures and

by Immunology Letters, the company reported its results

quality control of cells that produce biomolecules, as well

on the study of the effect of a bacteria-specific immune

as stem cells. We diversified our portfolio of services to

response in mice on recolonization by the same bacteria

avoid relying on a single line of work.”

to determine the role that systemic immune response has in intestine bacterial composition.

LEI gradually incorporated technology and other capabilities to address the needs of the industry and today the company

Padierna credits the company’s growth to its position

is also an authorized third party for medical devices with

as a knowledge center. For him, the acquisition of

capabilities to perform biocompatibility, cytotoxicity,

technology was secondary to the acquisition of these

sensitization, safety, genotoxicity and biological reactivity

minds, which when brought together resulted in its

tests, among many others.

multiple capabilities.

293

| VIEW FROM THE TOP

EXPERIENCE-BASED SERVICES FOR CLINICAL RESEARCH MELISSA ROSALES Director General of RM Pharma

294

Q: Last year, you said that you would open new offices in

A: Clinical research companies must invest a great deal to

Queretaro. Where does that project stand and what impact

prepare doctors. Availability of health researchers is not

will it have on operations?

enough and people who want to be part of this sector

A: The project is still in construction. However, these

must be trained as specialists. RM Pharma is committed

new offices will begin operating in 2019 and will operate

to building the best talent and training our staff so they

the same way as our headquarters, with a research and

have a broad knowledge base, from basic requirements to

medical care department. We believe that this represents

highly specialized procedures. All those who come to work

an opportunity to attract more clinical research projects

at RM Pharma go through a process of training in clinical

to RM Pharma and will also increase our ability to provide

research but also in administrative and management tasks.

broader coverage in Mexico.

Our professionals have experience beyond the medical field and are certified in laboratory practices, sampling and other

Q: In what areas should Mexico improve in terms of internal

skills. We make sure that we always have highly qualified

regulation to facilitate the development of clinical trials?

people working for us.

A: The government is open to listening to the clinical research industry, which is greatly increasing the opportunities

Q: What trends does RM Pharma see for the development

available for the sector. RM Pharma participates as one of

of clinical studies? How is Mexico prepared to face

the first companies in the pilot program of digital regulation

these trends?

for clinical research. Other government initiatives are also

A: The trend at the moment is oncology but RM Pharma

boosting public-private participation, which we believe will

is not ready to address this development, which requires

improve the countryâ&#x20AC;&#x2122;s performance in clinical research.

specialized hospitals. Oncological clinical research in RM Pharma could be conducted in palliatives and other similar

Q: What recommendations would RM Pharma make to the

solutions in oncology patients. Another trend is chronic

health sector to encourage researcher training?

degenerative diseases.

A: Inclusion of clinical research as an optional or mandatory class at universities and colleges is key to promoting the

Q: Why is RM Pharma the ideal choice for pharmaceutical

development of clinical research in Mexico. We need medical

companies or CROs?

students to embrace research. Educational programming

A: RM Pharma is both a clinical research site and a CRO so

should also include opportunities to work in pharmaceutical

we can provide experience-based services that also offer

clinical research and basic research. If students leave

high-quality and personalized attention. We are focused on

university with knowledge about clinical research and its

conducting clinical research but we also develop research

basic elements, when they enter the industry they will be

protocols and statistics and provide regulatory assistance.

competitive professionals. Q: What are the three main goals that RM Pharma hopes Q: What are the main obstacles that Mexico faces when

to meet in 2018?

training researchers in high-level clinical studies? How does

A: We want to increase the number of active protocols

RM Pharma get the best talent?

and to develop more services for the national industry as a CRO. We want to recruit and train more doctors in clinical research to be more competitive in the segment. as

We want to grow our portfolio of specialists to cover

rheumatology, endocrinology, dermatology, general medicine

the five new projects that are coming next year: asthma,

and

psoriasis, osteoporosis in children, pain in dental studies

Pharma

specializes

nutrition,

pediatrics,

gastroenterology and dentistry

therapeutic

areas

otorhinolaryngology,

such

urology,

and gonorrhea.

INSIGHT |

MEXICAN CRO SEES FUTURE IN PHARMACOVIGILANCE ARTURO RODRÍGUEZ CEO of Infinite Clinical Research (ICR)

Mexico would greatly benefit from the opportunities

general hospitals. The group brought together the specific

associated with clinical research, not just in terms of

needs in each sector and implemented corrective actions

economic investment but by increasing access to innovative

to streamline processes and improve approval times and it

medications, says Arturo Rodríguez, CEO of Infinite Clinical

worked. “By September 2017, COFEPRIS had reduced its

Research (ICR), a 16-year-old Mexican CRO that offers a

approval times from 120 days to 70,” says Rodríguez.

wide range of services and specializes in clinical trials for metabolic diseases, oncology and dermatology.

The benefits from increasing the number of clinical trials conducted in the country are not limited to the attraction

The global clinical-trial management market is expected

of foreign investment, explains Rodríguez. “Clinical trials

to reach US$36 billion by 2020, according to Research

reduce entry barriers to innovative treatments, especially

and Markets. “If Mexico could attract even 1 percent more

in terms of cost, which is a significant hurdle in Mexico for

of the global share, investment in the country would be

low-income individuals. Patients should be empowered to

significant,” says Rodríguez. He sees important potential to

take control of their healthcare and, given the opportunity,

reach this ambitious goal based on the country’s history in

to demand inclusion into clinical trials.”

the segment. “Mexico was extremely attractive for clinical research. When the country had approval times of 30 days,

The ICR’s Pharmacovigilance Unit is already working with

it attracted a large number of clinical trials and CROs. The

clients and Rodriguez says the sector will be an interesting

problem began when that timeline grew to over 200 days,

one to tackle. “There is a significant difference between

which greatly damaged the industry. If the country could

a regular protocol and that for pharmacovigilance. In the

reduce the timeline once again, Mexico could have a strong

first, a hypothesis is proposed and tested; in the second,

position in the sector.”

results make way to approaches and situations found in the research that lead to new hypothesis on how to attack

Rodríguez says that if Mexico continues with no clear ethics

unidentified new risks. Pharmacovigilance studies are more

committee’s rules and COFEPRIS long approval times, the

open as they involve pregnant women, children and other

international industry would turn to see other markets. For

vulnerable groups. This intensive methodology is a new

processes to be reflected on official documents, work tables

challenge in Mexico that we are learning alongside the

are usually very long and in many cases do not reach a

authorities,” he says. On Jan. 15, 2018, a new regulation

good end. Something new that we are experiencing is the

version on pharmacovigilance was implemented to

synergy of authorities and the industry in the pursuit of a

strengthen risk management plans: NOM-220-SSA1-2016.

common goal. This makes companies and researchers wary

This NOM, according to CANIFARMA, raises Mexico’s

and does not give false expectations outside of the country,

standards for conducting pharmacovigilance studies to

as the industry requires fast approval times, certainty,

international levels.

predictability and transparency to operate efficiently.” ICR’s goal is to capitalize on the growth of the clinical Considering the size of the problem, pharma and local

research sector, but with a different strategy than that of

CROs had greatly invested in the solution. “As ACROM, we

larger CROs. “We are seeing a growing number of smaller

participated in March 2017 in a group of leaders in charge

biotechnology developers entering the sector that are

of optimizing response times for the approval of clinical

developing one or two molecules. ICR is targeting these

trials.” The group is still led by ProMéxico and includes

smaller companies and we are working alongside them

representatives from COFEPRIS, the National Comission

through the entire process. When the molecule is sold to a

of Bioethics (CONBIOETICA), SAT, SHCP, the Ministry of

larger company, we move on to another small company to

Economy, several health institutes, IMSS, ISSSTE and a few

avoid competing with multinational CROs.”

295

| VIEW FROM THE TOP

FUTURE TRENDS IN MEXICO’S CLINICAL RESEARCH

Hector Ávila Director General of Cecyc Pharma

296

Diego Ávila Commercial Director of Cecyc Pharma

Q: How does Cecyc Pharma differentiate itself from other

Q: What regulatory changes are necessary to truly turn

CROs in the country?

Mexico into a clinical trials hub?

HA: In 2013, the mandatory change for bioequivalence

HA: Mexico must increase the number of professionals

studies in generic drugs reinforced the role of Cecyc

dedicated to research and encourage more people to

Pharma’s participation in the development of generic drugs.

specialize in the pharmaceutical sector. We need a greater

We have the best infrastructure and the best specialists

formalization of R&D studies and the regulatory authorities

to evolve alongside the market, which requires that we

must strengthen the industry’s clinical and analytical

guarantee that our customers receive an added value from

capacities. This could improve Mexico’s competitiveness

our services.

on an international scale.

Our core business is bioequivalence studies, clinical and

DA: More pharmaceutical industry players should open

analytics services and in-vitro tests. This makes us a

up to dialogue and collaborate more closely with CROs

different CRO not only because of our vast portfolio but

like Cecyc Pharma as a greater recognition of CROs can

also because of our understanding of all the processes

improve the performance of companies, the efficiency of

and requirements of the pharmaceutical sector. We break

drugs and strengthen the recognition that COFEPRIS has

the traditional CRO mold and provide support to our

with its international regulatory counterparts.

clients before, during and after the development of the generic drug.

Q: How has your research portfolio changed during the year? What role do the most common chronic diseases

DA: Cecyc Pharma offers a comprehensive service to

play in Cecyc Pharma’s research agenda?

its clients: we offer support in the acquisition of raw

HA: We are always aware of the expiration dates of

materials, for research on bioequivalent medicines, with

patents on brand drugs to advance in the development

the compilation of regulatory information and, if necessary,

of molecules for generic drugs. Our research portfolio

we accompany the client to his meetings with regulatory

changes as the pharma industry changes, so we must adapt

authorities such as COFEPRIS.

quickly and create clinical research protocols that meet market demands.

Q: What trends do you think will affect the clinical research market in the short term?

DA: Our experience is the key to our services. Cecyc

HA: Bioequivalence studies have become a necessary

Pharma has more than 200 methods of analysis and 60

parameter to improve the competitiveness of generic

researchers to maintain constant participation in the

medicines. Also, the increase in R&D biotechnological

pharmaceutical industry.

studies and phase I-II clinical research studies are transforming the pharmaceutical industry in Mexico.

Q: How will the relocation of Cecyc Pharma in Morelos

Cecyc Pharma believes there will be more clinical research

translate into better opportunities?

developments in central areas such as diabetes, oncology,

HA: The state of Morelos has the highest number of

cardiology, geriatrics and chronic-degenerative diseases.

researchers per capita in the country. Therefore, if we can combine the offerings of a scientific and technological park like INOVACYT and a clinical research company like ours,

Cecyc Pharma performs clinical research in seven countries:

we will boost R&D studies in Mexico. Also, the focus on

Mexico, Chile, Venezuela, Colombia, Spain, Dominican Republic

clinical research studies is growing in Morelos because it

and South Africa. The company specializes in bioequivalence

is the only state with a Ministry of Innovation, Science and

and phase I-IV studies

Technology (SICYT).

ROUNDTABLE | Every year, Mexico increases its capabilities for clinical trials. Although the country is strong in Phase II and III studies, Phase I trials are almost never carried out in the country, much less pre-clinical trials. Mexico’s population, numerous research institutes and an excellent academic and scientific base should make the country an attractive destination for Phase I and pre-clinical trials. Mexico Health Review spoke with CROs and clinical research experts to find out the reasons these trials are not performed in the country and how to bring about change.

WHAT WOULD ENCOURAGE YOU TO PERFORM PRECLINICAL AND PHASE I TRIALS IN MEXICO?

Mexico performs a very small number of Phase I clinical trials since Mexican regulation forbids paying patients for their participation in clinical trials, something that does not happen in other countries such as the US, England or some countries in Asia. Phase I trials are performed with healthy patients who are sometimes 297

only motivated to participate in the trials due to the economic benefits, but as these are unavailable in Mexico there is little interest from the general public to participate. Phase II to IV studies involve sick patients throughout several stages of the disease who are willing to participate in the trials as it provides a potential cure for their diseases.

ISRAEL VEGA Clinical Operations Manager of PRA Health Sciences

Phase I studies are virtually non-existent in the country. I think we need more trained staff to carry out research and attract projects to the country because we already have the necessary infrastructure. Investment for Phase I clinical research should be aimed at training nurses, doctors and other health workers to achieve this goal. Greater openness from the government can maximize Mexico’s infrastructure and its opportunities in clinical research.

MELISSA ROSALES Director General of RM Pharma

Mexico has the ideal conditions for the development of pre-clinical Phase I trials. We have the capacity, knowledge and infrastructure, so we just need support for researchers in this field. The government and the pharmaceutical segment must push for a more assertive communication of these favorable conditions, both domestically and internationally.

HECTOR ÁVILA Director General of Cecyc Pharma

Doctors monitor a DrĂ¤ger anaesthesia Perseus A500 machine

BIG DATA & DIGITAL HEALTH

Mexicoâ&#x20AC;&#x2122;s public health system covers the majority of the population, which makes it possible to gather a large amount of information that can generate a great deal of data. However, the sector does not have digitalized information at all levels of service due to the fragmentation of the system itself. On the other hand, in

the private sector digitalization levels are much higher, but the amount of data collected is not large enough to obtain national projections, nor is the information from different companies collected in a single database. In this context, the available information is not connected, which complicates the industry's ability to generate valuable information about the health sector in the country. While other industries have quickly ramped up their adoption of these technologies, the health sector has fallen behind, which has caused several hurdles for companies interested in Big Data, while also creating windows of opportunity.

This chapter includes interviews with companies specialized in data management, business intelligence, technologies and digital health devices. The interviews provide a scope on the opportunities of the application of Big Data in the health sector and its benefits, while analyzing the challenges that must be faced as an industry to integrate Big Data and analytics in the Mexican health sector.

299

CHAPTER 12: BIG DATA & DIGITAL HEALTH 302

ANALYSIS: Realizing the Potential of Big Data, Analytics

304

INFOGRAPHIC: Data, the Manna that Emerges from Technology

306

VIEW FROM THE TOP: Germán Tosantos, INDRA Healthcare

307

VIEW FROM THE TOP: Antonio Carrasco, PLM

308

TECHNOLOGY SPOTLIGHT: Shaping the Future of Healthcare

310

VIEW FROM THE TOP: Sergio Mejía, Genesys

311

VIEW FROM THE TOP: Jorge Camargo, Ecaresoft

312

VIEW FROM THE TOP: Enrique Samper, Grupo Altavista

Joel Cano, Grupo Altavista

Vinicio Orea, Grupo Altavista

313

TECHNOLOGY SPOTLIGHT: Grupo Altavista's Innovation Center to Develop Care Solutions

314

VIEW FROM THE TOP: Xavier Valdez, IQVIA

315

VIEW FROM THE TOP: Carlos Oviedo, Grupo Diagnóstico Aries (GDA)

316

VIEW FROM THE TOP: Fabiola Trigueros, Smart Scale

317

VIEW FROM THE TOP: Guillaume Corpart, Global Health Intelligence

318

INSIGHT: Carlos Escalante, Pen Healthcare

319

VIEW FROM THE TOP: Charles Nader, Docademic

Isao Hojyo, Docademic

320

VIEW FROM THE TOP: Marcela Rivera, Huli

321

VIEW FROM THE TOP: Juan Manuel Romero, Emiti

322

VIEW FROM THE TOP: Arístides Salazar, Emcure Pharmaceuticals

323

VIEW FROM THE TOP: José Luis Nuño, Unima

301

| ANALYSIS

REALIZING THE POTENTIAL OF BIG DATA, ANALYTICS As Industry 4.0 permeates the medical and health industries, companies are increasingly aware of the need to understand Big Data and analytics and how to ensure benefits across the board, from the development of products to the provision of services According to the Industrial Global Union, Industry 4.0 is the

use of Big Data in health. Sergio Mejía, Vice President and

revolution that will transform companies through the use of

Country Manager of Genesys, agrees: “Big Data can play

smart technology and real-time data to increase productivity

an essential role in compiling information and providing

in companies. Industry 4.0 is changing the operational,

better suggestions to doctors. The pharmaceutical industry

financial, business and productive schemes that exist in

could also use Big Data to perform pharmacovigilance. A

different economic units of the country. The health sector is

technological platform can even give suggestions on what

no exception, as Industry 4.0 breaks with traditional schemes

OTC medicines should not be mixed, what not to eat or

and ideas applied to product development and service

what exercises to avoid.”

provision in the medical industry to provide innovation, interconnectivity and evidence-based solutions. 302

However, the medical sector is reluctant to use new technologies. To include them, it is necessary to eliminate barriers such as price and accessibility. Therefore, companies that work with technology must find the right business model to guarantee the introduction of technologies to the sector, says Isao Hojyo, COO and Co-Founder of Docademic. The adoption of automation, digitalization and robotization in a harmonious way in the operations of a company are only the first step, but the leading companies in the market are those that can integrate software and hardware solutions to convert transactional and operational data into analytics,

MOST USED BIG DATA SYSTEMS AND PLATFORMS (2018) 1

Google

Cloudera

Snowflake Computing

Dell Technologies

Amazon Web Services

Hortonworks

IBM

MapR Technologies

Oracle

Hewlett Packard Enterprise

Source: Forbes

according to IBM. In this context, the best and greatest opportunities appear when data analytics and business

Inclusion of Big Data and data analysis transforms the

intelligence take part in this transformation with more

information into different opportunities for the sectors

accurate information.

that make up the health industry. In the pharmaceutical sector, “technology focused on the process of medicine

Big Data creates opportunities and new ways to seek the

elaboration has brought us new molecules that can cure

transformation of the health system. The industry is moving

diseases for which patients had no options in the past,”

toward evidence-based medicine and includes information

says Arístides Salazar, General Manager for Mexico,

architecture to manage large volumes of clinical, genomic,

Central America and the Caribbean Region of Emcure

financial and operational information to improve its

Pharmaceuticals. In terms of genomic medicine, the

performance, according to Oracle.

opportunities are in reducing costly patient tests thanks to the opportunity to analyze large volumes of information

FAST MANAGEMENT OF DATA

that help create genetic profiles. Doctors could also employ

IBM says that data volume doubles every two years and

these technological developments and improve their

90 percent of the world’s data was created in the last two

clinical diagnosis, says Mejía.

years. Therefore, the fast management of data becomes essential for the future of companies since they reveal

Health institutions can also take advantage of the

insights faster than the competition, boosting their chances

opportunities generated by Big Data. “Franchises of the

of being more competitive. A clear improvement in patient

same clinic or hospital do not communicate with each

outcomes and an improvement in efficiency and cost

other. So, if patients change their location, they must again

management are, according to Oracle, the three predictive

provide all their medical information. Gathering all this

analytics solutions that will be implemented through the

data and facilitating access for patients and their doctors

will allow the latter to make better decisions,” says Jorge Camargo, Co-CEO and Co-founder of Ecaresoft. In addition to the benefits for companies and institutions in the health sector, these opportunities are also available to doctors and other health workers. “In the case of Mexico, data can help contain chronic diseases and can help manage patients and give them better follow up. Data can help professionals and patients make better decisions,

“

The problem for data collection in Mexico is that the private sector does not share information, so there is little data available”

which will lead to reduced healthcare expenditures,” says

Guillaume Corpart, Managing Director of Global Health Intelligence

Antonio Carrasco, Director General of PLM. In Mexico, however, the main problem when collecting data lies in the unbalanced participation of the health

Ensuring privacy and security is important for all economic

sectors, both public and private. “The problem for data

units because in the end there is a person behind everything.

collection in Mexico is that the private sector does not

According to Infoguard, a cyber security company, talking

share information, so there is little data available. It is a

about information related to the health and well-being of

great challenge because there is no single procedural code,

people is twice as important for the health sector because

unlike Brazil, Colombia and Chile that have standardized

stolen healthcare data is often used on the black market

procedural codes,” says Guillaume Corpart, Managing

to carry out fraud, to sell information to foreign agencies,

Director of Global Health Intelligence. On the other hand,

to identify other criminals or to carry out illegal financial

according to Xavier Valdez, Director General of IQVIA,

transactions.

another major challenge that Mexico must face when collecting information and including Big Data at a national

Data privacy in the health sector becomes fundamental at

level is the fragmentation of data as a consequence of the

all levels to ensure the safety of the healthcare ecosystem

country’s fragmented system. As a result, in Mexico it is

and all its agents.

more difficult to produce valuable information about the health sector. Mexico needs to promote the inclusion of these technologies in the health sector since data analysis is a strategy used by many countries to improve medical care in their respective territories. Therefore, it is essential to provide the necessary tools to improve diagnosis and

TOP 10 CHALLENGES OF BIG DATA ANALYTICS IN HEALTHCARE 1

Capture

Clean, complete, accurate and structured information for many systems

Cleaning

Ensure data is correct, relevant and not corrupted in any way

Storage

Choose the right storage scheme to lower up-front costs and ease expansion

Security

Be safe against rapid-fire series of high profile breaches, hackings and ransomware episodes

Stewardship

Use of de-identified datasets for research projects, makes ongoing stewardship and curation a big concern

Querying

Overcome siloes and interoperability problems to prevent query tools from accessing the organization’s entire repository information

Reporting

Downstream data with critical accuracy and integrity for clinicians and institutions

Visualization

Create a good data presentation and visualization to make clinicians absorb much easier the information

Updating

Understand the volatility and dynamism of healthcare data and frequently update it

Sharing

Create a trustworthy and timely big data exchange ecosystem that connects all members involved in patient care

treatments, says Carrasco. Big Data and data analytics can guide hospitals, doctors, insurers and other health-related agents to join the patient journey through the entire health chain, explains Mejía.

PROTECTING HEALTH INFORMATION According to Norton by Symantec, a specialized company in data protection, privacy results from controlled environments, such as closing the curtains or visiting the doctor behind closed doors. However, in the digital space the idea of privacy is biased because most people do not understand exactly what it means in a digital context. For this reason, data protection is becoming increasingly difficult. IQVIA’s Valdez says Mexico’s data privacy is improving and technologies should also be used to provide greater guarantees regarding the anonymity and encryption of information. Companies must evolve their protection to go beyond physical perimeters and address real-time defenses to protect themselves digitally, adds Cloudera.

Source: Health IT Analytics

303

| INFOGRAPHIC

DATA, THE MANNA THAT EMERGES FROM TECHNOLOGY Big Data and data analytics are gaining strength in the

for example While more companies are getting on the

healthcare industry amid advances in technology, automation

bandwagon, penetration is slow due to Mexico's fragmented

and robotization. The generated data can lead to valuable

health system that does not allow the integration of much of

information that companies can use to better understand

the collected data. The result is a narrow offering that cannot

and predict customer purchasing and market behavior,

yet provide a big picture vision.

HEALTH INDUSTRY

Public Sector

Private Sector

DATA COLLECTION

Health institutions

Hospitals

304 Laboratories

ISSSTE

Pharmacies PEMEX Retail IMSS Clinical research sites Seguro Popular Pharmaceutical

SEDENA

Medical devices

Others

Insurance industries

DATA UNIFICATION

Universal electronic medical records from the public and private sectors

EMRs: Electronic medical record

CIS: Clinical information system

Sources: KPMG, Farmalisto Global Health Intelligence(GHI)

PACs: Picture archive and communication system

DICOMs: Digital imaging and communications in medicine

RIS: Radiology information system

DATA STRUCTURING AND ANALYSIS

Who can do this?

Business intelligence companies

Big Data and data analytics scientists

Consultancy firms

Industry analysts

AREAS OF APPLICATION

Planning and Strategy

Sales and Services

Know in advance the demand for medication, services with the epidemiological profile of the patient, current stock of medicines, health institutions in operation and more. It allows anticipatory planning that covers both the quantity and the type of resource to satisfy the market and the patient.

Know the characteristics and consumption behavior of people. It is possible to know what type of person consumes which medication, in what season, and the distribution/supply of the medication. The demand for low and high-specialty services can be predicted and health institutions can know what services are requested more or less frequently. Pharmacies and other retail players can supply and disperse medicines more effectively. Locate the areas and populations that consume certain medicines and supply by consumption according to the locality they inhabit.

Production Inside use can provide information about the production patterns to improve processes along the value chain. This can improve efficiency and control over the production process. It can also serve to accurately identify resources, manage inventories and improve the traceability of goods, among others.

Diagnostics and Treatment Information to improve diagnosis with a standardization of diseases, illnesses and treatments based on evidence. The doctor and the health institution can access an individual clinical file but also a base of clinical population analysis.

Marketing Improve the monitoring of mega trends in consumption to filter consumers by region, country, city, gender, age and interests. It can help define the Ideal Consumer Profile (IPC) and better target that customer segment. This can improve customer engagement and understanding of consumers and their behavior to make better strategic marketing decisions.

Clinical Research Access to databases and data analytics can provide greater support to different kinds of studies with more accurate information. It can improve research methods to create better predictive models, epidemiological studies, drug development and more. Also, it can serve to better understand disease, a disease association and molecular behavior based on evidence and data.

Health Management and Provision It allows real-time tracking of the habits and behaviors of consumption of clients. Doctors can better follow their patients, pharmaceuticals can better understand the consumption of their products, retailers can know when to supply which medicines and hospitals can know what area of health workers are needed.

Health Sector Authorities Joint information can be used to measure demand for goods and services of the sector but also have knowledge about the health conditions of the population. It can help to create a municipal, state and national plan with greater precision that addresses the main health issues per population and elaborates customized solutions. Regulatory authorities can improve pharmacovigilance and medical devices.

305

| VIEW FROM THE TOP

IT SOLUTION TO CHANGE MEXICO'S HEALTHCARE SYSTEM GERMÁN TOSANTOS Director General of INDRA Healthcare

Q: What needs has INDRA identified in the Mexican

institution and asks for compliance in certain areas. However,

healthcare system? What solutions has INDRA developed

there is resistance to spending money on technologies

to address them?

when institutions are struggling with other needs. Decision-

A: We work in the Mexican healthcare sector with a single

makers, general managers as well as medical teams usually

concept: continuity of care. This continuity consists of

have other priorities.

reaching a permanent flow of information between the

306

different levels of attention, which is a basic requirement

Q: How do you evaluate the digitalization of healthcare in

for the system to improve. To achieve this goal, INDRA

Mexico compared to other similar economies?

Healthcare offers strategic health consulting, an electronic

A: Brazil has similar problems to Mexico. It also has a

health record system and a patient relation platform

regulatory framework but there is no complete digitalization

(PRM), among other solutions. Our medical record system

experience. It is the only country in Latin America that

is designed for hospital and primary care net areas, since

has free and public medical care, albeit with investment

it integrates in real time the primary, second and third

problems. Chile has a program for digitalization of its

level of care so that all professionals can share the same

hospital network, but investment has been paralyzed for

information. The PRM is a multichannel platform in which

three years. The key is to work on separate government

citizens access preventive, administrative or clinical services

agreements. In Spain, it took 20 years to digitalize the

providing home access to care.

system and around 60 percent of the population has an electronic health record.

Q: What is INDRA’s added value? A: Our solutions in electronic health record and patient

Q: Who develops the technology used by INDRA?

management platforms are inter operable. Therefore,

A: All the technology regarding the core of HER, PRM and

anything an institution or network has done before

other systems is developed in-house. We do have areas in

or does after with other providers will always be in

which we work with other developers that have their own

communication with our applications. We have the three

programs. On dependence of client’s needs, we connect

care levels connected with the same EHR and we have

to the client’s solutions and if there is not an existing one

broad experience in assistive networks. We have a lot of

previously, we find it or develop it for them.

international experience, and believe we must adapt our IT solutions to the country to provide tailor made solutions.

Q: What are INDRA’s plans for the future? A: We want to work more with the Mexican states because

Q: What are the main INDRA markets in Mexico, private or

they have clinics and hospital networks where we can

public institutions?

implement health records. Continuity of care is essential

A: In Mexico, both the public and private sectors have

for patients, so they can move around the country and find

developed in-house solutions for electronic health records.

their information available in any institution. In addition, it is

From a legal standpoint, there is good legislation in the

good for doctors because they will have all the background

country that requires institutions to adopt electronic

data and will not need to repeat tests. Another priority

records. NOM-24 demands medical records from every

for us is the appointment management systems, through which it is possible to program the patient’s medication using electronic prescription. In this way, especially

INDRA is a Spanish company that offers consulting services

chronic patients do not have to go every week to look for

in infrastructure, defense, energy, telecommunications and

a prescription and doctors may have more time to help

financial services. It has been in Mexico since 1997, and has

other patients. Digitalization can bring control, security and

offices in Mexico City, Queretaro and Monterrey

economic efficiency.

VIEW FROM THE TOP |

EDITORIAL PLATFORM SEES FUTURE IN BIG DATA ANTONIO CARRASCO Director General of PLM

Q: Which PLM segment has experienced the biggest

A: We have worked with universities since the foundation

growth over the last year?

of this company 76 years ago. If the information we share

A: Our digital segment, since PLM's digital transformation

is closer to the industry and to the clinical evidence, the

created audiences, traffic and new channels. Through

decisions that thousands of doctors will make about

online media and our registered user database, we can

millions of patients will be better and their health will

know what patients and health professionals are looking

improve. UNAM has had full access to our database for 15

for and redirect them to where they can find it. This has

years and all universities interested in our information can

allowed us to offer digital marketing campaigns focused

be linked to our program.

on our clients’ specific needs. All the information we gather targets pharmaceutical and medical device companies

Q: How have PLM’s human resources needs changed

because through searches made by users we can predict

through digital transformation?

what other products may interest them. Therefore, we

A: PLM has three main pillars for its transformation.

can offer marketing opportunities to more companies

First, we created an information laboratory made up of

and increase the number of PLM’s potential clients. Each

professionals specialized in data science with a focus on

year, our channels receive 120 million searches related to

statistics and mathematics. They know how to standardize,

products with life sciences.

categorize, understand and analyze information and can develop AI cognitive processes and machine learning

Q: What impact has the use of applications had on PLM

projects. Many of our data scientists are biologists, so

business model?

they know how to organize information. We also have

A: The impact has been enough to replace the main

an IT department in charge of transferring information

business of the company. We are implementing an

to electronic platforms and configuring the database.

innovative digital element based on assets such as

Finally, we maintain our editorial area, which is important

audits, our credibility as an editorial platform and the

for us because all the content we share must be perfectly

traffic generated by this platform. We have been working

written and edited.

on transforming all our content to digital for years using Watson, IBM’s AI system. We have been using IBM for

Q: How can a full penetration of Big Data impact the

our mobile applications and after six years in stores our

Mexican health system?

applications are still in the Top 10 for health.

A: Data is the strategy every country is using to improve healthcare. For professionals, it is essential to provide

Q: Why is Guía Salud important to PLM’s strategy and

better diagnosis and better treatment as well as to create

what are its benefits?

a commitment to the patient, since patient centricity is

A: It is an application that answers three questions:

based on information. In the case of Mexico, data can help

Why was the medicine prescribed? How much does the

contain chronic diseases and can help manage patients

medicine cost? Where can I find the drug? It is supported

and give them better follow up. Overall, data can help

through an IBM Watson service provided by a company

professionals and patients make better decisions, which

called 1Doc3. The application provides the content in a

will lead to reduced healthcare expenditures.

familiar language for the patient and links the SKUs with their prices. PLM is an information and technology innovation company

Q: PLM has a collaboration agreement with UNAM’s

in the healthcare sector. It publishes guides and dictionaries

Medicine Department Library. Is there a plan to expand

on health and creates and administers apps that allow data

this collaboration to other universities?

gathering and information exchange

307

| TECHNOLOGY SPOTLIGHT

308

SHAPING THE FUTURE OF HEALTHCARE As a leading medical technology company with over 170 years of experience and 18,000 patents in over 70 countries, Siemens Healthineers continuously innovates and shapes the future of healthcare. The companyâ&#x20AC;&#x2122;s purpose is to enable healthcare providers worldwide to increase value by empowering them on their journey toward expanding precision medicine, transforming care delivery, improving patient experience and digitalizing healthcare. Atellica Solution is one of the companyâ&#x20AC;&#x2122;s latest releases for laboratory diagnostics and was developed by Siemens Healthineers after comprehensive market research with laboratory professionals around the world. The result is a solution that meets the needs of healthcare providers by providing them control and simplicity of their operations so they can focus on driving better business and clinical outcomes. The new platform stands out as a revolutionary laboratory solution and is comprised of sample management, an immunoassay and chemistry analyzers. It delivers unprecedented flexibility to adapt to changing testing needs and space constraints, and helps to speed up diagnostics by mixing faster response times, greater precision, stability control and high performance. It can combine up to 10 components in more than 300 customized configurations to adapt to any kind of laboratory and performs up to 440 immunoassay tests per hour (dependent upon test mix. Versus leading IVD market competitors). One key feature is the Atellica Magline, a magnetic transport technology that is 10 times faster than conventional sample conveyors, and provides innovative and unique sample management capabilities. The transport technology, together with a multicamera vision system, intelligent sample routing, and automatic quality control (QC) and calibration, give laboratories independent control over every individual sample, from routine to STAT, to deliver rapid and highquality patient results to clinicians. Atellica Solution can also operate up to 30 different sample container types, including pediatric and tube-top sample cups that can be aspirated from the primary tube. Siemens Healthineersâ&#x20AC;&#x2122; products and services for imaging and laboratory diagnostics holistically support customers along the continuum of care, from prevention and early detection to diagnosis, treatment and follow-up care. Together with its digital and enterprise services, the company can offer personalized solutions that help providers maximize opportunities and minimize risks.

309

| VIEW FROM THE TOP

PATIENT EXPERIENCE AN OVERLOOKED AREA IN HEALTHCARE SERGIO MEJÍA Vice President and Country Manager of Genesys

Q: How can technology improve existing healthcare

this critical role in introducing technology into healthcare

practices?

practices by incorporating the necessary equipment

A: The healthcare system has lagged behind compared

to monitor patients and provide them with innovative

to other sectors in terms of customer experience, which

prevention plans that provide recommendations on exercise

in this case would have to be defined as the patient’s

and eating habits.

experience. The patient’s journey through the entire

310

health chain, including hospitals, doctors and insurers, is

Q: How can this system be implemented in Mexico? What

not well-connected so there is a significant opportunity for

general benefits will it bring to the country?

companies. While healthcare is an entirely different sector,

A: Considering the size of Mexico’s public healthcare

keeping track of a patient’s health and allowing the patient

sector, it should be the first adopter of this technology,

to share that information with doctors would streamline

as the technology would allow it to reach a much larger

services. When patients visit a doctor, they are asked

segment of the population. The second adopter in the

exactly the same questions to get a first diagnosis. Allowing

country would be the insurance companies, since this

a patient to have this information available to share with

information would be extremely useful for compiling

their doctor would greatly transform the industry, while this

and monitoring a large amount of individual data that

information could even grant healthy individuals access to

would in turn allow for more accurate risk assessment.

insurance at reduced rates.

Pharmaceuticals would also benefit from acquiring this information.

Q: What role could IoT and Big Data practices play in the future of healthcare?

Q: What role would Genesys play in this ecosystem?

A: Big Data can play an essential role in compiling

A: Genesys provides the platform to monitor and compile

information and providing better suggestions to doctors.

all the information that the patient is willing to share.

The pharmaceutical industry could also use Big Data to

Big Data includes two types of information: structured

perform pharmacovigilance. A technological platform can

information, which in this case would be vital signs and

even give suggestions on what OTC medicines should

unstructured information, which refers to doctor calls and

not be mixed, what not to eat or what exercises to avoid.

the reasons behind them. There are many areas that need

Genomic medicine would also benefit from IoT practices,

to be addressed to improve the patient experience from the

which would provide large amounts of information without

moment they call to schedule an appointment. After the

the need for costly genetic testing on each patient. Doctors

first appointment with the doctor, patients often leave the

and clinics could benefit from external sources analyzing

treatment for various reasons. Our platform can encourage

a patient’s symptoms in real time. These tools can also be

patients not to abandon the treatment by channeling

used to bring highly specialized medical care to rural areas.

them immediately to the necessary tests and follow-ups. Treatment abandonment could be avoided by sending

Q: How can IoT practices penetrate healthcare?

reminders and the automatic incorporation of follow-ups

A: When individuals did not have access to internet on their

with the use of technology.

phones, they visited internet cafes. Health centers can play Globally, some hospitals and health clinics have incorporated Genesys platforms to improve the attention they provide Genesys develops cloud-based and on-site software for

to patients. We have also created platforms for clinics

customer engagement. It provides software to over 10,000

that provide remote assistance and allows them to offer

clients in 100 countries in the areas of banking, healthcare,

faster and more effective attention while providing clear

energy, utilities, government, insurance, media and travel

monitoring on the doctor’s performance.

VIEW FROM THE TOP |

CLOUD SOLUTIONS FOR THE MODERN HOSPITAL JORGE CAMARGO Co-CEO and Co-founder of Ecaresoft

Q: Ecaresoft was not always a cloud-solutions provider.

those who need it. For instance, our Cirrus software aims to

Why did you make this bet?

improve a hospital’s communication systems and allows up-

A: In 1986, as a different company, we noticed that large

to-date information to be shared between all departments.

hospitals with strong IT departments and sufficient capital could always pay for equipment to digitalize their systems,

Q: How do you convince hospital administrators of the

even though it was highly expensive at that time. However,

benefits of implementing these systems?

smaller hospitals, which account for 70 percent of the

A: Our ultimate goal is to create products that reduce

market, could not afford these solutions. For strategic

healthcare costs, although it is not always easy to convince

reasons, we decided to focus on this market niche and as

a hospital administrator. For that reason, we develop

our presence grew in small and medium-sized hospitals,

tools that grant administrators better control of all their

we also attracted the attention of their larger counterparts,

procedures and that solve problems they face. We perform

like Hospital Médica Sur. We bet on cloud technology

an analysis of their potential savings in order to generate

over 10 years ago, which allowed us to greatly reduce

the right expectations in the client. These investment

our infrastructure costs and allowed us to offer products

studies can be carried out and validated by clients using our

at lower prices than the competition. Our goal was to

own tools. Our sales department customizes these studies

democratize the healthcare sector.

for each client. The lack of communication between the different parts of the healthcare sector translates into an

Q: What type of hospitals is Ecaresoft targeting?

increase in costs for all involved. For instance, a lack of

A: We began operations working with small hospitals with

communication may force patients to do the same tests

a maximum of 50 beds. These hospitals would have been

several times in a row.

unable to buy servers and software licenses. Providing a cloud solution eliminated the need for those expenses.

Q: What direct benefits does your software provide

Our strategy is to work first with individual doctors and

to patients?

then incorporate more complex operations. As a result, our

A: There are many areas in which Big Data can support

footprint is extensive, with over 10,000 users throughout

healthcare policies. For instance, by compiling the

Latin America. Now, we are working with Hospital Sedna,

medications a patient uses and providing that information

Swiss Hospital, Zanitas and Hospital San Pedro, but

to the doctor to prevent side effects. It is very common for

hospitals all over Mexico use our systems, including in

clinics to have a large volume of patient information mixed

Guadalajara, Queretaro, Tijuana, Mexico City and Culiacan.

up and dispersed. Moreover, franchises of the same clinic or

We have also installed this software in Argentina and the

hospital do not communicate with each other. Therefore, if

Middle East, including Egypt and Saudi Arabia.

the patient changes their location, they must again provide all their medical information. Our Nimbo software also

Q: How does Ecaresoft’s software improve processes for

provides other direct services to patients, like integrating

hospitals, insurers and clinics?

medical data into Google Calendar so the patient receives

A: Our goal is to offer solutions that address the future

an alert 24 hours before the next appointment. This has

of medicine. Most products for the hospital industry were

allowed us to reduce no-shows by 36 percent.

developed many years ago to address the needs of old hospitals. Our goal today is to address the needs of current and future hospitals. We believe medicine will gradually

Ecaresoft, headquartered in the US, develops software

become more preventive rather than reactive and that

for cloud-based management of hospitals. The company’s

consumer expectations will continue to increase. The core

solutions include Cirrus for hospitals, Nimbo for clinics and

behind our systems is to digitalize data so it is available to

Nebula for insurance companies

311

| VIEW FROM THE TOP

THE 3 Ps IN HEALTH: PREVENTION, PARTICIPATION, PREDICTION

Enrique Samper Health and IT Business Unit Director at Grupo Altavista

312

Joel Cano Director of Incubation and Innovation at Grupo Altavista

Vinicio Orea Health and IT Business Unit Subdirector at Grupo Altavista

Q: What led Grupo Altavista to offer customized solutions

JC: Technological change in the health industry is

in the health sector in Mexico?

unstoppable and the ability of companies to manage this

ES: At Grupo Altavista, we have been integrating

change must be prioritized. Grupo Altavista has helped

technological projects for different sectors, including the

industries accelerate the adoption of technologies to boost

government, for more than 25 years. This has positioned

their productive and performance growth. We help our

Grupo Altavista as one of the major players in the health

clients avoid risks and make sure that the technology that

and ICT sectors.

we implement works and has a direct impact on the health and care of the patient.

VO: Few companies and industries are focused on the precision-based model. We believe that the best solution

Q: Why is Grupo Altavista the best option for the

is based on evidence, which is why we offer a customized

digitization project that IMSS is carrying out?

solution that meets the customer’s needs. Grupo Altavista’s

ES: The government’s ability to provide universal access to

methodology is oriented to satisfy the patient, the

health has a direct impact on the country’s competitiveness.

healthcare professional and the institution through inclusive

The establishment of a universal electronic clinical record

and personalized projects. Also, our projects are based

would allow Mexican patients to receive treatment at any

on usability levels to ensure clients leave with a better

of the country’s health facilities. Grupo Altavista works with

condition than when the hired our services.

the government to implement technologies and procedures for the public sector to digitize its archives.

Q: How does Grupo Altavista help redefine the healthcare business and how are you improving patient-centricity?

VO: We are implementing a new innovation center to adopt

ES: We can consider ourselves as the best option for

disruptive technologies. Technology offers the public sector

companies because we provide comprehensive and expert

the possibility of providing more precise and timely services.

solutions that translate immediately into a benefit for the

When pathologies are detected on time, the patient can be

entire value chain.

easily cured or at least contained with treatment.

VO: A very clear way to redefine the health industry

Q: How can Grupo Altavista help unify the health system

and improve patient care quality is telehealth solutions.

in Mexico?

Mexico has a deficit in nurses and in medical specialties

VO: There are different information providers for the health

like geriatrics. In the country there are approximately 502

system in Mexico. The problem is that there is no platform

geriatricians, a number that will not be enough to cover

for data unification that includes all different providers.

the needs of the population. Our telemedicine solutions

Grupo Altavista is working to become the manager of a

allow public and private institutions to manage information

platform that extrapolates data from different sources to

efficiently to ensure high-quality patient care.

help doctors access complete information. JC: Different public institutions have digitalized their

Grupo Altavista is a Mexican leading business group that

systems with Grupo Altavista because our solutions go

provides technology driven solutions. In the health sector, the

beyond digitalization. We combine technology and data

group offers advanced turn-key ICT solutions, leasing services,

security to improve health management and diagnostics

hospital and clinical equipment, among other solutions

in the public sector.

TECHNOLOGY SPOTLIGHT |

GRUPO ALTAVISTA'S INNOVATION CENTER TO DEVELOP CARE SOLUTIONS To nurture the technical talent that Mexico’s strategic

of healthcare and wellness management, digitalization of

sectors require, Grupo Altavista is developing Technology

health information and tele-health platforms.

4.0 Innovation Centers (Centros de Innovación para Tecnologías 4.0). The company is collaborating with Colima

The center will collaborate with academia and health

University and YMCA University to cultivate innovative

sciences companies to create a testing space where

services and specialized content related to the Internet

new devices, procedures and technologies can be used

of Things (IoT), artificial intelligence (AI), blockchain and

to develop innovative prototypes. These prototypes will

Big Data analytics. These educational complements will

allow specialists to create healthcare models with greater

eventually translate into certification and specialization

precision, participation, personalization and prevention to

models for the healthcare, education, energy, oil and gas,

address the challenges that Mexican healthcare faces.

national security, manufacturing and financial sectors. With over 25 years of experience in the integration of Grupo Altavista will begin developing its first Innovation

technological projects, Grupo Altavista is characterized by

Center for Health Sciences in the last quarter of 2018. The

its services, which improve its clients' innovation processes

center will deploy state-of-the-art technology to create new

and supports them in the design and implementation of the

models for precision medicine that include new systems

products they need to increase their operational efficiency.

GRUPO ALTAVISTA INNOVATION CENTER'S CORE PROGRAMS

SERVICES

WORKSHOPS

Sustentability and Model Development

Building Specialties

Services that the Innovation Center provides internally and externally. Internally refers to three levels: participants, their company department and their company. Externally refers to: persona fisica (individuals of Mexican nationality), persona moral (organizations or societies) and government. The services include complete sales, continuous improvement and positioning processes that guarantee long-term sustainability.

Cognitive experiences designed to elicit full understanding of four technologies (IoT, Big Data, blockchain and AI) and Health 4.0. The workshops transmit practical knowledge that can be applied to the reality of the companies and institutions where the participant works (this is the "K" and the second "A" of the ADKAR* model).

Cognitive experiences designed to transfer knowledge that changes the perception of reality, preparing people for the innovation resulting from Industry 4.0, including followup activities with a curricular value (this is the first "A" in the ADKAR* model).

Three cognitive experiences for each of the four technologies (IoT, Big Data, blockchain and AI) and another for Health 4.0. Each experience is designed to achieve the necessary desire to implement the changes brought about by Industry 4.0 (this is the "D" and "K" of the ADKAR* model).

CONFERENCES

PRESENTATIONS

Raising Awareness

Getting Into Detail

*Prosci Change Management

313

| VIEW FROM THE TOP

A UNIQUE FILE IN A FRAGMENTED HEALTH SYSTEM XAVIER VALDEZ Director General of IQVIA

Q: What is the challenge of having a new name, when

concentrated in the private sphere, while the public area

Quintiles and IMS Health had already built a reputation

generates more information about the epidemiological profile

in the industry?

of the diseases in the country.

A: The merger of both companies allows IQVIA to provide a

314

broader advisory scheme for companies trying to launch a

Q: Last year, you mentioned that one of the company’s

product. We now provide a priori advice for the launch of a

objectives for Mexico was to apply hospital certifications.

product and accompany the client throughout the process.

What opportunities have these certifications created?

Our new name tells our clients that we have joined forces to

A: IQVIA works closely with FUNSALUD to create a system

give them more support.

that collects and analyzes information at the same time. The first intention is to unify the data in a comprehensive

Q: IQVIA manages one of the most important health

way to obtain information about the most common types of

information databases in the world. How can that volume of

surgeries, costs, type of additional problems, infections and

information be applied in a health system like that in Mexico?

more factors within a hospital. Secondly, this analysis aims

A: The great challenge that Mexico has is the fragmentation

to act as a ranking of hospitals service, as is done in Europe.

of data, a direct consequence of the fragmentation of the

Hospitals that achieve satisfactory results can benefit from

country’s health system. Therefore, in Mexico it is difficult

this information to improve.

to produce valuable information about the health sector. Our advantage is that we work with different information

Q: IQVIA offers its clients solutions in the areas of R&D, real

sources that allow us to create our own databases to generate

world value, commercialization and technologies. Which

valuable information. We collect this information from our

area is the priority in Mexico?

databases and from other sources in the retail market, such

A: R&D in Mexico is a priority for our company. IQVIA operates

as pharmacies, wholesalers and supermarkets. We collect and

through our main offices to analyze the areas of opportunity

analyze information about the main players in the healthcare

that we then implement. The process is managed here and

industry, epidemics and drugs in a fragmented system to

we make sure that the selection of sources, data, reports and

generate unified content about the market and the sector.

samples matches the reality and needs of the country. In Mexico, IQVIA focuses on the commercialization of integral

Q: What differences exist in terms of Big Data collection

solutions, so we provide many services such as information

between the public and private sectors?

gathering, market information and consulting on a product’s

A: Data privacy is continuously improving in Mexico and at

behavior in the market to determine the best sales strategies

IQVIA we always support data collection with the consent

for a company.

of the sources. We have our own technologies to guarantee the anonymity and the encryption of the information, since

Q: In July 2017, IQVIA highlighted the deceleration of the

our system removes the name of the person and assigns a

world market in 2016 and forecasted 4.7 percent growth until

permanent number to integrate it to our databases. We work

2021. What are the figures for Mexico in this market?

with the public and private sectors to collect information.

A: In 2017, Mexico’s market value was MX$230 billion (US$12

However, the collection of medication consumption is mainly

billion). Of this, the Mexican market value is 26 percent for the public sector and 74 percent for the retail sector. This translates to 5.9 percent growth for the retail market and

IQVIA is a US multinational company based in Durham,

1.4 percent for the public sector. We estimate that Mexico’s

North Carolina. It serves the industries of health information

pharmaceutical industry will mirror the average international

technologies and clinical research with a network of more than

growth. The Mexican market is expected to maintain between

50,000 employees

4.5 and 5 percent of growth for the next five years.

VIEW FROM THE TOP |

IMPROVING CLINICAL DIAGNOSTIC TECHNOLOGY CARLOS OVIEDO Director General of Grupo Diagnóstico Aries (GDA)

Q: Last year, you said you wanted to increase your market

there is an incidence of diseases derived from an alteration

share in Mexico and expand in Latin America. How is

in the metabolic index, which is why our campaigns are

that going?

designed to encourage the participation of more people

A: GDA is acquiring companies to continue its inorganic

to perform screening tests. We are also moving into other

growth and consolidate the group in the Mexican market.

areas, such as allergies and cardiovascular diseases with

We are working to standardize and increase the efficiency

prevention campaigns and clinical diagnostic services.

of the three companies that we have acquired in the last two and a half years. We have achieved a standardization

Q: How does GDA see the future development of clinical

of 75 percent of our back-office operations and we expect

diagnostics in Mexico?

to soon operate our four processing centers as a single one.

A: GDA will leverage the system to conduct diagnostic

Also, we are in the process of purchasing companies that

testing, which guides a high percentage of critical clinical

will be added to GDA in the years to come.

decisions. Global testing volumes are rising due to an aging population, the growing management of diseases

Q: What technologies does GDA use to be competitive in

and increased access to healthcare. At the same time,

the market and adapt to Industry 4.0?

healthcare systems are facing pressures to perform testing

A: Seventy percent of critical clinical decisions rest on

as efficiently as possible with limited resources in staff and

one or more test considerations, so now more than ever

space, while also reducing costs. Our technology allows us

accuracy in lab diagnostics is an important issue. Our

to stand out in a sector of high clinical competitiveness in

central clinical laboratory will be the national center for

which the speed of delivery is no longer the only attribute

all our operations and it is going to be a fully automatized

of differentiation. Improving the quality of diagnosis in

and digitalized platform with Abbott’s FDA-cleared Alinity

Mexico becomes a transforming factor for the health sector

diagnostic system, which provides diagnostics screening

and lab diagnostics accuracy is more important than ever.

for immunoassay, clinical chemistry, hematology, blood and

Alinity delivers greater speed and testing productivity with

plasma screening and molecular diagnostics.

a smaller footprint to help us meet higher demands and provide personalized solutions.

We will be the only clinical laboratory in Mexico with this technology. When the lab is completed in December,

Q: How does GDA adapt to the changes in the provision

GDA will become a regional leader in clinical diagnostic

of laboratory diagnostics?

technology. Also, GDA’s laboratory will be able to perform

A: The technological platform we have is the most complete

PCR tests for genetic testing in real time, so we are going

in the market in the areas of biochemistry and immunology.

to considerably expand our portfolio of services and

Our competitors can offer a wide range of services but they

coverage for clinical tests. Our next goal is to make this

do not have all the tests available to diagnose diseases like

technology available to more Mexicans. We are working

we do. Our technology allows us to focus on diagnosing

with the public sector to make the investment between us

pathologies that are affecting the health sector in Mexico.

and the government economically viable to provide first-

It creates a much more complete overview of diseases, their

world solutions to Mexico.

associations and molecular composition.

Q: How is GDA planning to implement new diagnostic technologies to maximize their potential?

Grupo Diagnóstico Aries® (GDA) is a 100-percent Mexican

A: Technology is the basis of our comprehensive plan

group specialized in the health sector. The group has four

but we also want to accompany this development with

major brands: Swisslab®, Laboratorios Clínicos Azteca®, Olab

campaigns focused on preventive healthcare. In Mexico

Diagnósticos Médicos® and Laboratorios Clínicos Jenner®

315

| VIEW FROM THE TOP

INFORMATION PROVIDERS KEY TO STRENGTHENING LOCAL INDUSTRY FABIOLA TRIGUEROS CEO of Smart Scale

Q: What lessons has Smart Scale learned from the

and knowledge to work on different solutions for our

digitalization process in the Mexican health sector?

clients. In addition, we are very aware of the sensitivity of

A: When I started in this business, I had to hire computer

the information and Smart Scale always seeks to ensure

companies to digitalize services. Now, everything is

security and anonymity.

instantaneous, digital and fast. Technology has turned

316

processes into solutions that generate greater accessibility.

Q: How can doctors benefit from Smart Scale’s services?

The immediacy of the information we handle has helped to

A: Smart Scale protects the interests and information of

improve the time and quality of our reports. Now we can

doctors through technological intelligence and then works

measure our information in real time and we are one of

with multichannel and direct mail approaches such as

the few companies that have instant access to information.

laboratories, pharmacies and other parts of the value chain. If they do not wish to continue participating with us, then we

The quality of the service we offer is a great differentiator

unsubscribe them from the system.

for us. Our service is comprehensive and inclusive and we serve all clients with the same dedication, never

Q: What trends has Smart Scale observed in the Mexican

differentiating between small and large clients.

health sector through the collection of information? A: We have seen two trends: medical specialization and the

Q: What actions is Smart Scale taking in Mexico to improve

rise of alternative medicines. The industry must consider the

data collection?

growth of alternative medicines that can help society and

A: Smart Scale has the logistical strength to gather

increase the safety of allopathic medicines. Now, patients

information and to know the exact geolocation of each

are much better informed than before and have greater

pharmacy. In addition, through open information platforms

participation in the care of their health. This is generating

such as INEGI, we can create cross-sectional analyses

changes in the consumption of medicine and increasing the

to provide detailed reports. Smart Scale can provide a

purchase and consumption of health supplements.

complete profile of customer demands, consumer behavior and what pharmacies, hospitals and doctors’ offices are

Q: What actions does Smart Scale carry out to continue

nearby in order to care for patients. If the client has access

providing added value in its services?

to other databases, we can tailor the report with greater

A: Our goal is to have a strong relationship with well-positioned

personalized detail.

players operating in the health sector. Our approach helps us obtain information almost instantaneously about the changes

We have alliances with several companies; some seek

that are taking place in the industry so we adapt to them. Also,

services to improve their commercialization while others

our experience in the industry provides us with a holistic and

want more general information. We also collaborate with

vast vision about the behaviors of the sector. It is easier for us

business intelligence companies that need to increase their

to understand how changes occur and the advantages they

salesforce and with companies that manage databases

offer to our customers.

but do not know how to cross the information to generate analysis. Our experience in the sector gives us the ability

Q: What are Smart Scale’s three main objectives for 2018? A: We always want happy and satisfied customers to continue growing in sales and profits. We also want to expand the

Smart Scale specializes in consulting services for the

technological support we provide our clients. Our new product

pharmaceutical industry and health sector using global

target for 2018 is to develop a platform that accompanies

technological tools. The company provides digital services to

the customer’s website and provides information about the

more than 40 leading pharmaceutical companies

distribution and accessibility of the product.

VIEW FROM THE TOP |

BIG DATA ALREADY CHANGING HEALTHCARE SECTOR GUILLAUME CORPART Managing Director of Global Health Intelligence

Q: What approach does Global Health Inteligence use to

partners. Through In-Scope we also conduct due diligence,

convert data analysis into growth opportunities?

competitive profiles, tariffs and cost analyses to support our

A: Mexico has a large information gap related to the flow of

clientsâ&#x20AC;&#x2122; strategic decisions.

data that suggests two problems: there is little information available and the existing data is unreliable. At Global

Q: What actions and partnerships does Global Health

Health Intelligence, we collect our own data through our

Intelligence carry out to guarantee the quality of

call centers and we transform this data into information.

its services?

Our data analytics allow pharmaceutical manufacturers,

A: One of our biggest challenges is that every country

medical device manufacturers, equipment providers and IT

handles information differently, so the level and type of

solutions players to obtain information that is truly valuable.

data are very different. Therefore, we try to standardize

Pharmaceutical companies are sophisticated and base a

data as much as possible. Our call centers can control the

majority of their decisions on reliable data. Medical device

entry of information and then pass the data to a team that

and equipment manufacturers are not used to having data

is in charge of the data collection. We then structure the

or information and are used to making decisions with little

data with procedure codes according to the country and

data, often based on expert opinions.

finally we standardize them.

Q: How can companies improve by using data analysis

Q: What is the difference between collecting data for the

provided by Global Health Intelligence?

public and private sectors?

A: The most sophisticated companies we work for, such as

A: The problem for data collection in Mexico is that the

GE, BD, Phillips, Olympus or Boston Scientific, take our data

private sector does not share information, so there is little

and transform it into commercial protocols. Also, depending

data available. We collect as much information as possible

on the services they hire, they can better understand the

and then build statistical models to complement. We also

size of the market, the market share and the positioning of

cross-check and validate through complementary databases.

their competition to better position themselves for certain

It is a challenge because there is no single procedural code.

opportunities. Q: How do digital solutions and connectivity help the Q: What makes Global Health Intelligence's services the best

industry grow?

options for companies looking to expand their business?

A: Mexico lacks infrastructure when compared to the

A: Our services are the best in the market and we are

regional average, particularly when comparing to countries

continuously improving them to provide more quality to our

such as Brazil and Colombia. Greater infrastructure is the

customers. HospiScope helps define the hospital landscape

first step and directly correlated to being able to offer more

and we have profiles on over 18,000 hospitals in Latin

high-specialty care. Countries that do not have this level of

America. For example, if a medical equipment company

infrastructure tend to focus on general procedures like OB-

wants to sell an X-ray machine to a hospital, We can say

GYN (obstetrician-gynecologist). Mexico needs to develop

exactly how many machines there are in each of 14 countries

better infrastructure to then be able to increase access to

and in which hospitals they are installed. ShareScope is a

higher specialty care.

tool that provides information about market size and market share, both per player and per product. SurgiScope looks at procedure volumes and tells the client how many procedures

Global Health Intelligence (GHI) conducts market research to

are conducted by type and by hospital. In-Scope delivers

provide strategic data on health infrastructure in the emerging

information on the market landscape that allows companies

markets of Latin America and Asia. The company offers four main

to search for market size segmentation and potential

services: HospiScope, ShareScope, In-Scope and SurgiScope

317

| INSIGHT

DATA COLLECTION TO IMPROVE THE HEALTH OF THE POPULATION CARLOS ESCALANTE CEO and Founder of Pen Healthcare

318

After a cut in government health budgets totaling MX$40

the company developed a technological platform called

billion in the last six years, with a population increasingly

Personal Health Experience Management (PHEM), an

affected by chronic diseases and after the emergence

electronic medical record with the capacity to gather

of new competitors in the sector, health companies are

more information. “The difference between an electronic

rethinking their priorities and their business objectives.

medical record and our platform is that we try to gather

In this context, finding strategies to make the most of the

all the information related to the patient engagement,”

tools available in the system and fill the gaps in health

Escalante says.

administration and management has become critical for companies like Pen Healthcare.

Another way to contribute to the health sector is through the creation of comprehensive service networks, says

“The healthcare system not only needs pharmaceutical

Escalante. Pen Healthcare has been working with the

products, it also needs health solutions,” says Carlos

Ministry of Health for 11 years to raise awareness of

Escalante, CEO and Founder of Pen Healthcare.

certain diseases and has promoted the creation of support groups for patients with chronic diseases. These groups

Through technology, comprehensive service networks,

are evaluated according to the biochemical indicators

data collection and alliances, the company strives to

of their members and can obtain certifications every

contribute to the growth of the sector and the health of the

six months, depending on the overall progress. “Each

population. "We can generate income for pharmaceutical

group has between 15 and 30 people and focuses on

companies and for service providers. We consider the

communicable diseases in which social behavior is the best

business from a data-driven perspective and design

tool to provide non-pharmaceutical assistance,” Escalante

different management models,” Escalante adds.

explains. Pen Healthcare has also created a platform for health authorities to consolidate public efforts on prostate

Pen Healthcare has operated for 20 years providing digital

cancer through a database that provides information to

marketing solutions for pharmaceutical companies and

the population about the risk factors of this disease.

public and private service institutions, focusing on the B2B segments. Through its Health Systems Unit, Pen

But Pen Healthcare is up against a sector in which

Healthcare offers its clients consulting services, patient-

investment has failed to grow, according to Escalante.

experience management, business intelligence and user

He says the authorities have to define their space, the

support systems. “It is hard to integrate a fragmented

operator’s and the payer’s because now the authority

health system without a strong technological base,” says

is controlling it all. Actors like Pen Healthcare do not

Escalante.

have the capacity to attract all the resources the system demands because they have been struggling to operate

To achieve this integration, the company created ‘All in

in a repressed ecosystem. “International companies will

Health’, a project with the public and private sectors

arrive with the resources we need and they will attract

focused on providing institutions with educational

the opportunities like technology and subrogated

platforms and electronic medical records. Through this

services,” he says.

program, it has worked with companies such as Silanes, Pfizer, AstraZeneca, Shering and Bayer and the Ministry

In addition, the system is under pressure due to the

of Health.

gradual aging of the population and the spread of chronic diseases. “The system will eventually fracture and when

Pen Healthcare also manages the electronic medical

this happens the decisions will not be made politically, but

records for the 102 Seguro Popular clinics and recently

as triage,” he says.

VIEW FROM THE TOP |

REAL DATA IN REAL TIME

Charles Nader CEO and Co-founder of Docademic

Isao Hojyo COO and Co-founder of Docademic

Q: What impact is Docademic expecting to have on

Q: How is Docademic preparing for the epidemiological

healthcare?

transition that Mexico is undergoing?

CN: We have always wanted to universalize health

IH: We have been in the market for almost three years

services, so we created a plan that will allow us to make

and we want our Medical Heroes to be on the frontlines

these services accessible to as many people as possible.

when it comes to providing the necessary follow-up for all

Docademic launched a free healthcare service that

those patients with chronic degenerative diseases that the

innovated the provision of direct medical assistance,

traditional system can no longer cope with. The idea is to

integrating new technologies such as blockchain and AI.

absorb all these patients from both the public and private

The overarching idea was to create a company that would

sectors who have monthly follow-up appointments. As a

have an impact on healthcare while applying a scalable

result, medical specialists will be able to devote their time

business model that could be deployed not only in Mexico

to assist patients who have more complications.

but globally as well. Q: What role is data playing in the companyâ&#x20AC;&#x2122;s growth and Q: How do you integrate technologies such as blockchain

how is it used?

and AI and support the universalization of health services

IH: The target of most of our products is market research.

in Mexico?

Our services related to real-time epidemiological data are

IH: Medicine is an industry that does not accept new

also growing. This part is particularly important for the

technologies easily so when we started we had to eliminate

public sector since it helps institutions quickly recognize if

as many barriers as possible. The first barrier was economic,

there are any disease outbreaks in small communities. We

which is why all our tools are free of charge. To accomplish

also have data on pharmacovigilance and technovigilance

this, we had to find an appropriate business model. We have

and patients on our platform can record their entire journey

all the health industry players in our ecosystem and they

during their health treatments. The human body is the

have access to important insights on data. Using blockchain

largest database in the world; we are trying to put this

allows us to solve many problems faced in this sector such

database into a universal health blockchain.

as access and security of very sensitive data. Q: Why did you create the Medical Token Currency (MTC) Q: How does the Docademic app and related doctors

and your own blockchain technology?

provide added value for patients and doctors using

IH: The MTC is the tool we need to universalize health.

the platform?

With this token, we try to incentivize healthy habits. For

CN: The first problem we solve for patients is access.

consulting a doctor and maintaining a healthy lifestyle,

Because the app is free to use, patients can consult a doctor

our users are awarded MTCs. If doctors correctly record all

without charge and without having to leave their homes.

their patientsâ&#x20AC;&#x2122; information, they also receive MTCs. With

Accessibility from almost anywhere is an important part of

the MTCs, patients can access more health services, pay for

what we do because in many parts of the world commuting

more consultations and pay for medicines, while doctors

is difficult for many people. Using the Docademic app

can pay for medical supplies. There is nothing like this in

means patients do not have to commute. The process to

the market.

become a Medical Hero is lengthy. They must undergo psychological tests to ensure that they have the necessary skills to treat a patient, as well as knowledge tests among

Docademic is a globally sourced healthcare service platform.

other filters. Also, doctors can also join our platform and

It is present in 20 countries and provides medical assistance

get tools to improve the efficiency of their everyday medical

services through telemedicine and also implements a social

practice and free patientâ&#x20AC;&#x2122;s referrals.

network for the medical community

319

| VIEW FROM THE TOP

SMART MEDICAL TECHNOLOGY FOR A NEW ERA MARCELA RIVERA Country Manager of Huli

Q: What opportunity areas sparked the decision to bring

A: At Huli, we work with we use inbound marketing

Huli to Mexico?

strategies and field sales agents. When it comes to

A: Huli develops health-related technology products that

individual doctors, we use a government website to verify

target hospitals, doctors and patients. Mexico looked

their professional license and that the information they are

promising for us due to the number of doctors and

providing us is correct. This allows us to ensure that we

hospitals, which is almost double than all Central America,

work with fully qualified medical professionals.

and because there is not very much competition in the 320

medical records sector. We were also very interested in

Q : H ow c a n d i g i t a l h e a l t h to o l s s u p p o r t t h e

validating our product portfolio in a market as large as

democratization of access to health?

Mexico's.

A: What we try to do is provide the patient with real knowledge and make sure that the patient knows their

We have three main products for doctors: an electronic

doctor. We do not provide any medical advice. However,

calendar, electronic health records system and marketing

by having an electronic medical file, patients are required

products. Our differentiator is that our all products track

to have better medical attention. We do not have a free

and monitor our patients throughout the entire medical

service per se but our platforms are free of charge for

process from the moment they seek a doctor until they

patients.

leave the consultation. We are also Q: What are the advantages and

developing a product that will provide patients with a personal medical file once they leave the doctor’s office, which we willlaunch soon. When this product is available, it will allow Huli to offer a broad range of services and give patients full control over their entire medical history.

30%

Increase in hospital appointments resulting from use of Huli’s medical directory

limitations you have found working in Mexico? A: One of the advantages we see in Mexico is its extremely large population and the great possibility to grow by bringing an excellent and complete p ro d u c t w h i c h a l s o i n c l u d e s a n

For hospitals, we offer a smart medical

exceptional customer service. Another

directory that allows the hospital to easily and quickly

advantage is that doctors are becoming increasingly

display all information related to their medical staff. This

open to use new technology. However, there are still

directory also allows patients to easily find the doctors

some limitations for our expansion in the country, one

they need and schedule online appointments, which

of the main ones is Mexican's skepticism regarding online

means they no longer have to wait for the call-center to

subscription payments.

open. After using the directory for 18 months, hospitals have increased appointment numbers by 30 percent.

Q: What are Huli’s growth expectations in the medium term?

Q: How do you attract doctors and what indicators do

A: We would like to see Huli in all private consultations

you use when selecting the doctors who work with Huli?

and we would also like to see Mexican patients receive better medical attention by using health tools. We see Huli as leader in clinical files in Mexico, providing doctors

Huli develops technology to connect patients, doctors and

with a tool to work more efficiently and patients a tool

medical centers, improve administration and increase patient

to receive better medical attention. Before expanding to

volumes while providing patients with more personalized

other countries, we want to be successful in Mexico and

follow-up. It has been in the market for six years

later grow throughout the rest of Latin America.

VIEW FROM THE TOP |

INNOVATION WITH IMPACT REQUIRES REAL IDEAS JUAN MANUEL ROMERO Director General of Emiti

Q: Why create a product that targets a nascent ageing

can obtain in the future by using Big Data is knowing the

population in Mexico?

geographical location where people ask for more help or

A: Worldwide, every 15 seconds a senior suffers a fall and

move with a more frequent physical activity, also knowing

every 30 minutes a senior dies in the hospital due to this

how the lifestyle of our users changes depending on their

accident. We focus on solving the problems and needs of

geographical position, physical activity and their behaviors

an unattended and growing market because there is a lack

depending on the medicines they take, the frequency of

of reliable information and feedback services. Today, one in

their calls which can serve to the investigating doctors to

10 people in Mexico is a senior, which totals about 12 million

find medicines and solutions to improve the quality of life.

people, and one in three deaths in seniors are related to these falls. That is why we created Emiti. Q: What added value does Emiti offer in relation to the senior's care? A: Emiti integral solution is designed for all types of people because it can be used by seniors but also by people who

Today, one in 10 people in Mexico is over 60 years old, which means about 12 million people

require healthcare monitoring in a non-invasive way, like those with epilepsy, Alzheimerâ&#x20AC;&#x2122;s or any other condition.

In terms of data analytics, we can find that all the information

Since it has independent functions, it does not need to be

we obtain has two main purposes. One is to provide families

connected to any smartphone, Bluetooth or wifi. It has one

with all the information available in case their doctor, their

communication button and it has a tap screen display, it

Primary Care physician or a specialist needs them to be

was designed especially for the silver market: easy to use

able to make an accurate diagnosis of their patients. Two,

and intuitive.

to be able to make an analysis of this data to be able to find anomalies in our users. For example, a patient that

Q: What kind of brand does Emiti hope to be?

never gets up at midnight and one day gets up at 3 am can

A: We will position our Emiti brand to be a life facilitator

give us a hint that something is happening. By identifying

for senior people and for families that want to take care of

anomalies, we can reach a point where we can help our user

their loved relatives. Our relationship with our consumer will

if they are having an emergency or discomfort that can be

be based on our capacity to develop empathy with them

addressed in real time.

and form unbreakable ties with them. Our brand has to be honest, sharp, friendly, secure, easy to remember and easy

Q: Has Emiti already consolidated Telcel as its point of sale?

to read in almost every language.

A: Our alliance with Telcel is in process and Emiti is finetuning the details to launch its product into the market,

Q: What potential uses can the information recovered by

which will be in autumn 2018. After launching, we want

Emiti have for Big Data and data analytics?

to deepen our penetration and consolidate the company

A: Our premise is to start generating data about our users

as a specialized provider for senior care in Mexico and

and their relatives. We will be able to generate information

Latin America.

about falls, heart rate and anomalies in heart rate, physical activity, step activity, geolocation, activity and sleep rhythm, activities in calls and messages sent, as well as reminders to

Emiti is a classic smart watch with 24/7 personal monitoring

take medicines for the purpose to create a huge database

services and web app. Emiti will monitor seniorâ&#x20AC;&#x2122;s vitals and in

to begin detecting patterns of behavior in different

case of emergency will alert their family by SMS, Facebook

lifestyles and diseases of our users. An example that we

Messages or phone call

321

| VIEW FROM THE TOP

TAKING TREATMENT TO A LARGER NUMBER OF PATIENTS ARÍSTIDES SALAZAR General Manager for Mexico, Central America and the Caribbean Region of Emcure Pharmaceuticals

Q: What role does Mexico play in Emcure’s global

treatment. Companies like Emcure are also focused on

operations?

biosimilar products and on taking these treatments to a

A: In terms of sales, Mexico is one of the most important

larger number of patients.

countries among emerging markets. However, our

322

potential is limited because we cannot access the

Q: How can Emcure adapt to the changes in medicinal

public market. This is a key restriction that affects our

consumption habits Mexico faces?

growth and as a result we are highly focused on the

A: There has definitely been a change in consumption

private market.

habits in the past 10 to 15 years. When the generics industry started around 20 years ago, there were few

Nonetheless, the restriction we face given the lack of a

medicines in the market and people did not know

free-trade agreement with India is forcing us to be more

about them. It is a market that has evolved, although its

creative and to negotiate with our headquarters to see

evolution in Mexico has been somewhat late. More than

if in the future we could have a local manufacturing site.

adapting, we want to add to this change in consumption

This is a process that will take a long time.

of medicines. People are becoming more aware of what generics are. As citizens, we must also trust in

Q: Mexico’s epidemiological transition is creating

the approval process that COFEPRIS has put in place,

new business and innovation opportunities. What are

which has become a reference in many other countries.

Emcure’s plans in this area?

In fact, having a medication approved by COFEPRIS

A: Given that we are a generics company, we need to

gives companies a fast track for approval in other Latin

consider the patents issue. Chronic diseases represent

American countries.

a significant opportunity for us. Innovation in the pharmaceutical research industry has been very limited.

Q: What role do generics play in delivering health results

It is difficult to create new medicines with a differentiator

and providing more effective access to medicines?

in terms of efficiency or therapy. Although there is still

A: It has the most important role. Generics are the reason

much to be done, when you talk about hypertension,

why a greater number of people have access to certain

cholesterol or even diabetes, doctors know how to

products or medicines. When patented products lose

control these ailments with products that are already on

their exclusivity, prices tend to rise. What we are looking

the market. What we want is for these medications to

for as a generics company is to provide these medications

reach more people.

to more people. At the end of the day, there is always going to be a market for both, patented and generics.

Q: Which technological application is Emcure’s

Even though they overlap in some areas, there is a clear

highest priority?

differentiation between the two.

A: Technology focused on the process of medicine elaboration has brought us new molecules that can cure

Q: What is behind the growth of this market in Mexico?

diseases for which patients had no options in the past.

A: People are actively looking for generic products,

The problem is that this situation increases the cost of

but there will always be a segment for innovative and patented products. I think people are losing their fear of using generic drugs but I also believe that generics

Emcure is an Indian pharmaceutical engaged in developing,

companies need to raise awareness about brands. In our

manufacturing and marketing in therapeutic areas such as

case, we want people to know that Emcure’s products

cardiology, gynecology and nephrology. It is present in over

have the same quality as those manufactured by large

70 countries

companies in the sector.

VIEW FROM THE TOP |

FAST, ACCESSIBLE DIAGNOSTIC TESTING FOR THOSE WHO NEED IT MOST JOSÉ LUIS NUÑO CEO of Unima

Q: How is Unima revolutionizing diagnostic practices and

working with NGOs in Africa that have incorporated it

how can this technology improve care?

into their regular services.

A: This test is fast and low-cost and can be used by nonspecialized personnel. Unima’s goal is to allow on-site

Q: How does your product compete or complement the

diagnostics without the need to take a sample and send

services of diagnostics clinics?

it to a laboratory. This testing device can be taken to the

A: We do not compete with diagnostic laboratories. We

most remote areas of the world for those who do not have

focus on large healthcare NGOs and pharmaceutical

access to a traditional laboratory or who cannot afford a

companies. For this last sector, we are developing rapid

regular test. This technology allowed us to decentralize

diagnostic tests. In underdeveloped markets such as Mexico,

diagnosis, which is important since some of the diseases

we are not a competitor but rather a complement to their

we fight have a global impact, such as tuberculosis, HIV,

services, since we offer them the possibility of reducing

malaria and influenza.

their operative costs.

Q: In what other fields can information collected by your

To date, our biggest impact is in Africa but we are also

device be used?

targeting Latin America, China, India and Southeast Asia.

A: The test requires only one drop of blood. It is placed on

The barriers to enter these countries are regulatory since

a diagnostic paper sheet equipped with biomarkers that

there is no global certification, so it is necessary to submit

generate a visible change on the paper when it comes in

to the approval process of each country. Around 75 percent

contact with blood. To make a diagnosis, the user takes

of our work is focused outside of Mexico.

a photo of the paper with an app in their smartphone to get a result in a few seconds. Then the result along with

Q: How is your technology changing the approach doctors

contextual information like geolocation, date and time is

must take when making a diagnosis?

uploaded to a cloud server. The collected data is tagged,

A: We do not change the diagnostic algorithms but we

stored in the cloud and analyzed. We plan to use all this

adapt to the existing technology. For example, our TB test

data to perform real-time analysis related to the spread

has a sensitivity that competes with almost any other test

of diseases. This information could be useful for health

in the market. However, current TB diagnostic algorithms

systems and governments to address infectious diseases.

require a final confirmation test. For that reason, our test is a first contact test for triage and screening: if our test

Q: What is Unima’s ideal client profile and what are

is positive, for certain diseases the patient will require a

the main advantages this test provides in comparison

confirmation test. Similarly, our test allows us to rule out

to others?

those who are not suffering from the disease. For diseases

A: Our market is made up of global health organizations

that do not require a lab scale confirmation test, the result

such as Doctors Without Borders and the Red Cross, but

will be definitive, so the infection would be confirmed at

also national public health sectors in each country and

that moment. The impact of this technology is that it allows

international pharmaceutical companies. One of the main

doctors to speed up their diagnosis so the patient can begin

advantages of this technology is its extremely low cost. The

treatment as fast as possible.

second main advantage is that it removes access barriers since it can be taken to anyone living anywhere in the world. Unima develops and implements low-cost diagnostic and

We do not change the user’s healthcare model; we

disease surveillance technology for infectious diseases. This

provide a tool that adapts to their needs. For instance,

software allows medical professionals to diagnose diseases in

we developed a quick test for tuberculosis and we are

less than 15 minutes without any lab equipment

323

ATTRACTING & RETAINING TALENT

An industry based on skill requires highly skilled talent. Mexicoâ&#x20AC;&#x2122;s health sector faces the challenge of providing the best possible care in a highly fragmented system, but at the same time the country needs to train, attract and retain the human talent that will help it meet its health goals. Technology is not only changing the way healthcare is delivered, it is also generating new demands on employees and employers; a path in which universities must play an essential role, since they are in charge of providing the necessary education to students who

will occupy positions of responsibility in the health sector.

This chapter provides an overview of the talent needs faced by the Mexican health system. Through interviews with the decision-makers at top companies and government agencies, the following pages analyze the main concerns of stakeholders when it comes to attracting and retaining human talent, as well as the windows of opportunity opened by technology.

325

CHAPTER 13: ATTRACTING & RETAINING TALENT 328

ANALYSIS: Talent: A Long Road With a Near Horizon

330

INFOGRAPHIC: Attracting and Retaining Talent

331

VIEW FROM THE TOP: José Mustre de León, CINVESTAV

332

PROJECT SPOTLIGHT: Geroscience: The Biology of Aging

335

VIEW FROM THE TOP: Conzuelo Pi, Michael Page

336

INSIGHT: Johannes Viholainen, Jobplex

337

VIEW FROM THE TOP: Mishelle León, Hays

Ricardo Reyes, Hays

338

INSIGHT: Cédric Trantoul, Morgan Philips Group

339

ROUNDTABLE: Is Mexican Talent Bolstering the Industry or Holding it Back?

327

| ANALYSIS

TALENT: A LONG ROAD WITH A NEAR HORIZON The historical fragmentation of the Mexican health system, the epidemiological change impacting the country, the emergence of cutting-edge technology, the gradual digitalization of processes and the aging of the population have highlighted a glaring gap in the country’s health services: talent As Mexico grapples with a fragmented health system that

and colleges is key to promoting the development of

is struggling to serve the medical needs of the population,

clinical research in Mexico. We need medical students

the private sector, the public sector, academia, even

to embrace research. Educational programming should

patients and users, are not oblivious to that singular

also include opportunities to work in pharmaceutical

reality that Mexico needs to train, attract and retain the

clinical research and basic research. If students leave

talent necessary to continue meeting health-related

university with knowledge about clinical research and

objectives.

its basic elements, when they enter the industry they will be competitive professionals.”

The health industry is changing rapidly, with the

328

digitalization of processes, the modernization of medical

According to the OECD Report on the Health of Mexicans

services, ambitions to rise up the clinical research chain,

published in 2016, between 2005 and 2014 the number of

the emergence of new drugs and the creation of state-

professionals related to healthcare increased by 215,000,

of-the-art medical devices. Both academia and the public

a period in which the state of Nuevo Leon led growth

and private sectors need to keep pace by providing the

with three workers per 1,000 inhabitants. Chiapas was

educational plans and training programs that will supply

last on the list. Contrast this with Mexico City, which had

the skilled talent the sector increasingly requires.

more than three times as many health workers as Chiapas. These significant differences represent a real challenge

“The market evolves faster than the higher education

for the authorities, since the centers that depend on

centers that guide students in various lines of study or

the public sector are not able to meet the demands of

specialization. It is true that the health industry requires new

the entire population, who often must travel hundreds

skills, but there are not enough people who can offer them.

of kilometers to see a specialist or pay out of pocket

The sectors that pay the best in Mexico, Brazil, Argentina,

for a treatment in the private sector. And it is not just

Peru, Colombia and Chile are technology, banking and

an issue of doctors. Mexico has 2.9 nurses per 10,000

health, which on average pay between 28 and 35 percent

inhabitants, well below the OECD average, which stands

more than other industries. These industries pay more

at nine nurses per 10,000 habitants.

because there is a lack of market focus on knowledge. For this reason, companies bring people from abroad or from

IMPACT OF ECONOMIC GROWTH

other industries,” says Consuelo Pi, Manager of Healthcare

The economic growth Mexico has enjoyed since the

Division of Michael Page.

beginning of the 21 st century has pushed the country closer to the figures of the most developed members

EDUCATION AS A CATALYST

of the OECD in some areas, but it has also led to the

One of the starting points to finding a solution should be,

appearance of problems unthinkable a few years ago that

therefore, education. This not only refers to education

are reflected in the current health system. One is the

related to health professionals but to the country’s entire

epidemiological change that the country is experiencing,

system of education.

caused mainly by two factors: the aging of the population as a consequence of the increase in life expectancy and

In 2016, according to CONACYT, 6,606 students graduated

the appearance of chronic noncommunicable diseases.

in fields related to the health industry, a small decrease

Thus, the prevention and education of professionals

compared to 2015, when 6,668 students graduated.

capable of working with new diseases and pathologies

The issue, however, is in how these newly graduated

must be key for Mexico to continue developing an

professionals are distributed throughout the republic.

equitable health system in accordance with the

According to the OECD, Mexico has 2.4 doctors per 1,000

times. “During the 1970s, Mexico was praised by the

inhabitants, a number that is below the average of the

international community for its excellent results in birth

countries in the organization. “The inclusion of clinical

control. However, the effectiveness of this policy now

research as an optional or mandatory class at universities

shows its negative side, since the age of the population

will change in a very short period of time. This will require a complete change of Mexico’s healthcare system as it will have to focus on geriatrics,” says Enrique Cabrero,

NATIONAL EXAM FOR APPLICANTS TO MEDICAL RESIDENCIES 2017 (for academic year in March 2018) Number of places offered for Mexicans

Total Mexican doctors selected

Number of places offered for foreigners

Total foreign doctors selected

863

Audiology, otoneurology and phoniatrics

NA1

Quality of clinical care

NO2

General surgery

743

Epidemiology

NA1

Medical genetics

but it is not enough,” he explains.

Geriatrics

139

NA1

TRAINING MEDICAL SPECIALISTS

Gynecology and obstetrics

698

Diagnostic and therapeutic imaging

286

Medicine of physical and sports activity

Rehabilitation medicine

103

Emergency medicine

620

by the system.

Work and environmental medicine

According to a report elaborated by the National

Family medicine

1,659

Academy of Medicine of Mexico and CONACYT, the

Internal medicine

1,126

Legal medicine

NO2

Nuclear medicine and molecular imageology

Preventive medicine

NA1

Pneumonology

NA1

Ophthalmology

179

Otolaryngology and head and neck surgery

Clinical pathology

NO2

Pediatrics

772

Psychiatrics

173

Radio oncology

NA1

440

Director General of CONACYT. Medical Specialty

As Mexico has become one of the fastest-growing countries in the Americas region in the sectors of clinical devices, pharmaceuticals and clinical research, there have

Pathological anatomy

also been significant benefits. International companies

Anesthesiology

are increasingly arriving and they require not only skilled talent but local knowledge, says Cédric Trantoul, Managing Director of Morgan Philips Group. “We are seeing an increasing number of international laboratories being headed by Mexican directors, as multinational companies understand that having a local manager is advantageous because they have a better understanding of the market and its regulations. Foreigners sometimes work with a local counterpart to understand the culture

The Ministry of Health is responsible for the National Exam for Applicants to Medical Residences (ENARM), an instrument used to measure knowledge for the practice of general medicine, as well as the first stage of the process to enter the National System of Medical Residences. The purpose of this examination is to select Mexican and foreign general practitioners who aspire to perform a medical residency to qualify for one of the 27 specialties offered

distribution of places for specialists is inadequate and most are centralized in urban areas; therefore, the lack or excess of offers related to some specialties can cause the teaching-learning cycle to be truncated and generate a bias in human resources infrastructure to train specialists. “Recent medical graduates are more interested in working with patients and hospitals but the life sciences industry could benefit from their knowledge too,” says Johannes Viholainen, Partner at Jobplex. “Universities would do well to explain the broad range of possibilities their degree offers them.” While universities launch students down the road to greater knowledge, companies should continue the process. “It may be good for the industry to create talent programs inside organizations, something that has worked in the banking and technology sectors,” says Conzuelo Pi, from Michael Page, adding that “the responsibility should

329

Traumatology and orthopedics

NA1

NA 1

fall on the companies, because if we want the industry to

NA1 No applicant was selected

become professional it is important to be responsible for

NO2 This specialty does not offer places Source: Ministry of Health, Ministry of Public Education, Inter-institutional Commission for the Training of Human Resources for Health (CIFRHS)

their training.”

| INFOGRAPHIC

ATTRACTING AND RETAINING TALENT Talent retention is among the most important challenges

many to seek opportunities outside of Mexico. It is also

facing the health industry in Mexico. The country generates

necessary to add the gap that has opened in recent years

professionals for all areas of health at its public and private

between the real needs of the industry and the choice of

universities, some of which are internationally recognized.

specialties by students, which often do not match, given

However, personal ambitions, the lack of a system that

the epidemiological transition that Mexico is experiencing,

protects employees and the difficulties developing their

with an increasingly aging population and with chronic and

profession at most of the system’s public facilities force

noncommunicable diseases on the rise.

MEXICAN GRADUATES PER FIELD (2016)

1.16% Services 1.92% Agronomy and veterinary 4.46% Arts and humanities 4.75% Natural sciences 9.66%

Healthcare

6,606

Graduates in health and related fields in 2016

330

44.17% Social sciences

13.08%

Education

20.81%

Engineering

NUMBER OF GRADUATES IN HEALTH AND RELATED FIELDS (thousand)

BUDGET ADJUSTMENT PLAN (MX$ billion) 8

NUMBER OF WORK DAYS LOST PER PERSON PER YEAR

Country

2016

Canada1

7.8

Chile

7.8

France

8.4

Germany

18.6

Mexico

27.9

3 2 1 0

2012

2013

2014

2015

2016

Spain

11.1

Turkey

2.5

United Kingdom1

2.1

United States1

3.6

Self-reported

PHYSICIANS AND NURSES DENSITY PER 1,000 PEOPLE IN 2016 15 Source: PEMEX

——Physicians

12.9

11.3

10.2

9.9

7.9 5.5

6 2.4 3

——Nurses 11.6

2.6

2.3

Canada

Chile

Sources: OECD, CONACYT.

3.1

France

2.9

4.2

Germany

2.4

Japan

Mexico

3.8

1.9 1.8

Spain

Turkey

2.8

2.6

3.4

OECD average

VIEW FROM THE TOP |

FUTURE OF HEALTHCARE: MADE-IN-MEXICO RESEARCH JOSÉ MUSTRE DE LEÓN Director General of CINVESTAV

Q: What would you identify as CINVESTAV’s greatest

A: At the end of 2017, Mexico City’s government and

contribution to the healthcare sector?

CONACYT proposed the creation of a research center

A: CINVESTAV, one of Mexico’s largest academic institutes,

targeting aging that will be managed by CINVESTAV. There

performs research in many different fields and offers

is a great deal of research concerning neurological diseases

several masters and Ph.D programs. Spain’s Superior

related to aging, such as Alzheimer’s and Parkinson’s, but

Education Council published a yearly ranking for research

these efforts have not been enough. The new center will

institutions. In this survey, we ranked 30th, higher than any

receive an initial investment of MX$210 million and will be

other university in Latin America. About 30 percent of the

located on our campus in the south of Mexico City. The

institution’s researchers are working in a health-related

center will start by focusing on chronic diseases, but we

area. CINVESTAV has two technology transfer offices, one

also have researchers studying the molecular processes

in Mexico City and another one in Guanajuato. We are also

and genomics behind aging.

perfecting our strategies to help our researchers bring their products to market. However, our greatest contribution to

One of the many research areas to be addressed will be

the healthcare sector is our former students, who now work

the mobility problems older people face, especially as

in research centers or in the healthcare sector.

they often differ from those of the rest of the population. The government is already aware of the problem and has

Q: With what type of companies does CINVESTAV

introduced some measures to facilitate mobility, including

collaborate to carry out R&D?

the adaptation of roads and sidewalks. Our research center

A: Major international companies often have their own R&D

on aging will have a group that makes recommendations on

centers and are less likely to involve third parties. Mexican

public policy to provide better care for older people. Mexico

companies, on the other hand, are contacting us to develop

City is clustering a significant number of older people in

collaborative projects to address various diseases. For

comparison to other areas of the country.

instance, we are collaborating with Grupo Neolpharma on the development of treatments for Parkinson’s.

Q: What future trends will have a strong impact on healthcare?

Q: Many foreign pharmaceuticals are outsourcing their

A: Some budding research areas like genomics will allow a

R&D divisions to China. What would be necessary to bring

greater understanding of diseases and improve personalized

these programs to Mexico?

care. Aging-related research will also have a significant impact

A: Although Mexico has excellent researchers, there are not

in the next 30 years as it might be possible to delay the aging

enough to manage these projects. Research centers such

process. One of the goals of this research is to provide those

as CINVESTAV will be key to attracting R&D from other

over 100 years of age the quality of life they would have at

countries. For instance, Intel and Oracle developed their

60. Another flourishing area is wearables, which will greatly

own R&D centers in Guadalajara, but to do so they required

diminish the cost of care, especially for individuals with

a large number of researchers. This could also happen

mobility problems. Just like any other technology, it will be

in biotechnology and healthcare, but it is necessary for

expensive at first, but once its use becomes more widespread,

Mexico to increase the number of qualified professionals it

costs will come down.

produces. Federal and state policies drafted in accordance with the public sector will be of the utmost importance to develop the country’s research capabilities.

CINVESTAV one of Mexico’s largest academic institutes, performs research in many different fields and offers several

Q: How have Mexico’s epidemiological changes influenced

masters and Ph.D programs. About 30 percent of the

CINVESTAV’s main research lines?

institution’s researchers are working in a health-related area

331

| PROJECT SPOTLIGHT

332

GEROSCIENCE: THE BIOLOGY OF AGING Globally, the population is aging at an accelerated pace, especially in Latin America and the Caribbean, including Mexico. In 1990, the countryâ&#x20AC;&#x2122;s life expectancy for women was 75 years, and 68 for men. The most recent numbers from 2010 show an increase for women to 78 years, and 73 in the case of men. At the present, in Mexico there are around 10 million people over 60 years of age, which is equivalent to 9.1 percent of the total population. Therefore, there is a need to understand the specific aging mechanism that concerns Mexico, such as the prevalence of the main chronic diseases, genetic and environmental factors and the potential effectiveness of different preventive medical strategies to increase the possibility of having a healthier life expectancy. The new CINVESTAV Center for Research on Aging, located in Mexico City, aims to promote the generation of cutting-edge knowledge that responds to the countryâ&#x20AC;&#x2122;s needs. Interconnecting basic scientific research, specialized clinical studies and technological development will allow the center to become a reference in integrated and multidisciplinary biomedical research with a clear impact on human health.

In Mexico there are around 12 million people over 60 years of age The purpose for this new center is to establish itself competitively at an international level, and to become a central axis to develop state-of-the-art research in the field of geroscience. The importance of the construction of this research site lies in the fact that within a few years the elderly population in Mexico will occupy a significant demographic block. The Center will focus on the study of the biology of aging, seeking to understand why this process leads to disease and functional decline. The research team will be comprised of professionals with a primary interest in geroscience, but it will also include experts in other areas such as regenerative medicine and pathologies linked to age and nutrition. In parallel, the center will contribute to the training of a new generation of Mexican scientists and at the same time promote innovation for the development of life sciences and related services technologies.

333

334

Obesity research at Novo Nordisk

VIEW FROM THE TOP |

THE BEST WAY TO IDENTIFY TALENT CONZUELO PI Manager of Healthcare Division at Michael Page

Q: What is Michael Page’s role in the healthcare sector and

worked in the banking sector. Giving the responsibility to

what is the profile of companies that demand your services?

the institutions would add another task and would make the

A: At Page Group, we offer specialized recruitment and

model more inefficient. The responsibility should fall on the

selection services. We are also consultants on human

companies, because if we want employees to be professional

resources but, unlike head hunters, our profile is integral.

it is important to be responsible for their training.

We are always in contact with our clients and candidates, which allows us to keep up with the new developments in

Q: How have recruitment and mapping changed with the

the industry. Our goal is to help companies identify the kind

arrival in the labor market of the millennial generation?

of talent they need, so our model is based on continuously

A: We have to adapt to them, since we most likely will have

looking for talent in the industry. To do this, we map the

a more anxious next generation. If we do not know how

country and then begin to classify the candidates. We offer

to interpret their movements now, we will have problems

our services to large multinational companies, but also to

in terms of job stability in the future. The problem is not

startups or family businesses and we adapt ourselves to any

about a generation; it is about organizations making that

type of client.

generation feel comfortable in a working environment. This is the responsibility of the human resources departments

Q: How does Michael Page help fill the gap between the

and if they do not establish solutions, rotation problems will

needs of the industry and the academic offer?

continue. Companies must be flexible enough to comply

A: The market evolves faster than the higher education

with their employees’ requests but demand commitment

centers that guide students in various lines of study or

from them. In the Southern Cone, companies are applying

specialization. It is true that the health industry requires new

alternative solutions. If, for example, an employee wants to go

skills, but there are not enough people who can offer them.

abroad to study or travel for a year the companies freeze the

The sectors that pay the best in Mexico, Brazil, Argentina,

contract, cover their social payments and when they come

Peru, Colombia and Chile are technology, banking and

back they return to their job. It is a way to retain talent. In

health, which on average pay between 28 and 35 percent

Mexico, this is not happening yet.

more. These industries pay more because there is a lack of market focus on knowledge. For this reason, companies

Q: How easy is it to find local talent for senior management

bring people from abroad or from other industries. There

positions in Mexico’s health industry?

are people in the pharma industry who come from highly

A: The base of potential candidates is very large in Mexico;

technical areas but who assume commercial roles. In addition,

in fact, the only country with a larger base is Brazil. The

the pharma industry is entering a commercial and marketing

problem is not finding people but getting them to change

professionalization. Moving to the commercial segment has

their position. The most complicated part is making the

always been attractive because of the bonuses, but most

match between the company’s expectation and what the

people come from technical training; that is, they do not have

candidate wants. In countries like Chile, when a candidate is

the necessary commercial skills. The key is in the education

at the final stage of a recruitment process, it is between 80

of the candidates.

and 90 percent likely that person will sign. In Mexico it is hard to convince people to leave their comfort zone.

Q: Most health and pharma industry CEOs have a marketing and sales background. Considering this, how feasible is it to think about health-oriented marketing programs in colleges?

Michael Page is a PageGroup company dedicated to providing

A: It would make sense, but it would probably limit the choice

recruitment services to SMEs and multinational companies in

of the students. It may be good for the industry to create

senior management positions. The company is headquartered

talent programs inside organizations, something that has

in England and is a constituent of the FTSE 250 Index

335

| INSIGHT

ACCESS TO MARKET A PRIORITY FOR PHARMAS JOHANNES VIHOLAINEN Partner at Jobplex

336

Shrinking federal healthcare budgets are making the Mexican

“The industry has not been that open to welcome talent

pharmaceutical sector more competitive, which in turn

from other sectors,” continues Viholainen. Nonetheless, the

requires increasingly prepared professionals. A complex

pharmaceutical industry has been progressively welcoming

situation with access to public healthcare market has

external talent and even has been looking for individuals

increased the quest for experienced access experts. Also,

from non-healthcare focused industries in order to diversify

several roles that have been considered as single-function

its talent mix and pool of expertise. “Previously, job divisions

focused, such as regulatory and medical positions, are today

were clear and targeted to a specific area. Now, all these

increasingly collaborating with other company divisions and

functions have to be integrated, with teams that incorporate

becoming more and more attached to core business, says

experts in all necessary topics, and all of them must work

Johannes Viholainen, Partner at Jobplex.

together for the same goal. Current professionals might be experts in the production and application of the products

Jobplex is a division of DHR International, which was founded

they work with but they often lack the business acumen to

in 1996 and uses a wide variety of services to find talent

successfully bring them to market.”

for emerging leader positions. The company specializes in several sectors, including technology, finances, education

Pharmaceutical companies are fully aware of the lack of

and healthcare. This last sector comprises pharma and life

talent, so they are internally training their future directors. “A

sciences, which according to Viholainen “are of the utmost

clear example of the transition from a business division to the

importance for Jobplex. Globally, life sciences is one of the

access division can be seen in a few Big Pharma companies,

top practices for Jobplex.” Jobplex searches the world for

but this strategy is becoming increasingly common among

the best person for the position through close collaboration

other companies,” says Viholainen. The sector could also

with its partners in the Americas, Europe and Asia. “This

benefit from a joint approach between academia and the

allows us to take a team approach to every position and

industry. “Recent medical graduates are more interested

gives us access to more experienced consultants. We do

in working with patients and hospitals but the life sciences

not operate as franchises; we share the same database and

industry could benefit from their knowledge too. Universities

work together on all projects.”

would do well to explain the broad range of possibilities their degree offers them. However, so far a relationship between

The company has had an excellent reception in Mexico,

pharmaceuticals and schools has not been fully developed

explains Viholainen. “We have seen significant demand for

to allow for this exchange of information.”

specialists in access, commercial, and finance mainly for senior manager and director positions,” he says. The reason,

Mexico is the second-largest market in Latin America. As

Viholainen adds, is the budget cuts directed at healthcare

a result, businesses prefer to place experienced executives

services. These cuts make competition to sell to the public

with a successful track record to the key roles in their local

sector, Mexico’s largest buyer, tougher than ever.

affiliates. “During 2016, we estimated that approximately 30 percent of general managers at multinational

As budgets shrink, companies find it increasingly difficult

pharmaceuticals based in Mexico where born in the country. "

to access the public sector, so they become creative in their market approach. “Companies are now looking for

While finding adequate and qualified talent might be difficult,

innovative strategies. They are bringing their business unit

Viholainen is confident that Jobplex’s broad experience will

leaders to spearhead their access to market division.” These

allow the company to successfully find professionals “Jobplex

professionals bring new strategies and better knowledge to

sees potential for growth in Mexico as we have a unique set

create innovative medium and long-term plans that secure

of capabilities brought about by the company’s background

market access today as well as in the future.

with our top executive brand, DHR International.”

VIEW FROM THE TOP |

MEDICAL DEVICES COMPANIES SEEK SPECIFIC KNOWLEDGE Mishelle León Consultant at Hays

Ricardo Reyes Senior Consultant at Hays

Q: What unique benefits does Hays offer to healthcare

they do. Employees like to know that they are making a

companies?

positive impact on other people’s lives.

ML: Hays’ healthcare division is fully specialized in the sector and our expertise allows us to provide tailored

Q: What are Hays’ key expectations for the healthcare

consulting services. HR professionals know the company’s

market in the coming years?

requirements and with our market expertise we become key

ML: We expect further growth in the healthcare sector. This

partners who help them fill their vacancies. To generate a

growth will lead to a rise in demand for medicines and

successful relationship between employer and employee, it

medical devices. At the moment, there is great uncertainty

is important that we understand the needs of both.

in the industry as companies await the results of the Mexican presidential elections in 2018 and the outcome

Hays initially worked with the pharmaceutical industry

of the NAFTA renegotiation. The industry is increasingly

but now specializes in recruitment for medical devices

open to accessibility schemes and looking for adherence

companies. We work with manufacturers and startups

strategies. Companies are looking at the benefits they can

that need talent acquisition support. Hays addresses senior

provide to patients and what aftermarket advantages they

profiles; these professionals are available in Mexico, but not

can deliver to doctors.

in the necessary numbers that the industry requires. RR: Companies are at a standstill and freezing their RR: The healthcare sector’s needs are extremely specific

budgets while political matters are solved locally and

and companies often require particular profiles for which

internationally. However, we have seen great interest in

there could be very few candidates. We have recruited for

the Mexican market from international medical devices

the healthcare industry for the past three years and we offer

companies around the world. Several are looking for

access to a unique profile. As we know the sector’s needs,

distributors to penetrate the market before opening

we are an excellent filter for employees.

offices. Given this interest, we have positive expectations for the industry here. The government itself faces

Q: What recommendations would you give to medical

interesting challenges in the medical devices sector,

devices companies looking to retain qualified talent,

since regulations can greatly increase the final price of a

especially millennials?

product. Manufacturers sell through distributors, which in

ML: These companies are usually small and are not poised

turn work with governmental institutions, thus adding to

to grow their internal structure in the short term. The

final prices. If manufacturers can approach the government

common profile for millennials is that they are extremely

directly to sell their products, the final cost would be lower.

interested in growing their capabilities and to continue

By making these sales more transparent and efficient,

learning throughout their careers. Millennials feel the need

the government could boost the number of products it

to innovate, which is good for both the company and the

acquires, increasing the number of patients it can treat.

individual.

Some governmental institutions are already incorporating these practices and it would be beneficial for all other

RR: Pharmaceutical companies are often larger and

public healthcare institutions to adopt similar policies.

much more established, so there are more opportunities for professionals to grow within the company. It is also important that employees understand their contribution

Hays offers human resources management and recruitment.

to the company. We have some companies that have taken

It has offices in 33 countries in the UK, Europe, America and

their employees to hospitals to observe surgery, which

Asia Pacific. In Mexico, the company specializes in finance and

allows them to see first-hand the importance of the work

accounting, engineering, life sciences and marketing

337

| INSIGHT

TECHNOLOGY TO DISRUPT HEADHUNTING CÉDRIC TRANTOUL Director General of Morgan Philips Group

338

Head-hunting is often seen as long, slow and based in old-

Change in the pharmaceutical sector is needed because

school traditions, says Cédric Trantoul, Managing Director

the industry no longer has the deep pockets to pay inflated

of Morgan Philips Group, a company that aims to disrupt

prices for these professionals as the growth of the generics

this process through the use of technology to make it faster

industry has hit Big Pharma profits, says Trantoul. Moreover,

and more efficient. “Current recruitment practices are based

the sector is consolidating as larger companies increasingly

on the contacts and knowledge of each consultant. The

buy smaller ones to improve pipelines. In Mexico, the market

operational costs of headhunting are high and inefficient.

is also facing transformation for local reasons. “Previously,

Companies are starting to notice this, so they are increasingly

companies that wanted to sell in Mexico needed their own

depending on technological platforms.”

production line. They then sold their products through distributors. Once that regulation was struck down,

Founded in 2013, Morgan Philips Group is a Swiss recruiter

international companies closed their plants and reduced

with offices in 22 countries in the Americas, Europe and Asia.

their work with distributors to manage operations on their

To speed up the recruiting process, the company created

own.” The effect is a growing number of pharmaceuticals

technological platforms that simultaneously allow businesses

with Mexican leadership. “We are seeing an increasing

to gain a deeper knowledge of a candidate while speeding

number of international laboratories being headed by

up the hiring process. This allows Morgan Philips’ clients to

Mexican directors, as multinational companies understand

greatly reduce the time necessary to fill a position. “A regular

that having a local manager is advantageous because these

executive search takes an average of nine months but we

managers have a better understanding of the market and

have reduced that to only four. For middle management,

its regulations. Foreigners sometimes work with a local

the average time required to find a new hire ranges from

counterpart to understand the culture but it is not enough.”

three to six months and our average is 40 days. Reducing the necessary time to fill a position saves money.”

In some cases, there is a lack of local talent to fill specialized positions. “If a company in Mexico wants to hire data

Technology also plays into the changing recruitment market,

scientists, it will have to look for them abroad.” Head-

says Trantoul, as companies want a faster and less expensive

hunting is often a local endeavor, as most recruiters only

service. To speed up the process, Morgan Philips launched

look for hires in the same country or city as the company

its Find Your Talent Easily (FYTE) marketplace of CV video.

that requested them. “We have an international database

“Most of our companies are already using this system, which

with four talent centers around the globe that feed the

is completely free for candidates. By June 2018, we had

database with talent from all corners of the world. We are

placed more than four talents per week. These companies

able to use our global network to find a future employee

like the model as it is fast and easy to use. For instance, a

and bring them to the company.”

pharmaceutical company spent six months trying to fill a very specialized position. Using our system, it took them

Morgan Philip’s technological investment is only one of the

less than a week to find, interview and hire an individual.”

company’s recent developments and the company has plans for more. “By the end of 2018, we will launch Morgan Philips

The pharmaceutical sector has issues regarding talent.

Consulting, which focuses on supporting a company’s

“Pharmaceutical companies prefer not to train their talent

internal organizational development.” Today, organizations

but to find individuals who already have the necessary skills.

are changing at an accelerated pace, responding to

This causes the poaching of talent between companies

demands from current and potential employees. These

and increases the costs of hiring. After 20 years, the

changes include more collaborative spaces, open offices,

pharmaceutical industry is just beginning to change its

changes in hierarchy and inclusivity, among many others,

practices,” he says.

explains Trantoul.

ROUNDTABLE | Each area of the health sector requires talent with highly specific knowledge and skills and companies are becoming increasingly demanding in their requirements. The industry needs more talent and more professionals graduate every year, yet there appears to be a mismatch between what companies want and what potential employees are looking for. Mexico Health Review spoke with human capital experts to identify the sector’s needs

IS MEXICAN TALENT BOLSTERING THE INDUSTRY OR HOLDING IT BACK?

in terms of human talent and what must be done to meet those requirements.

The sector is recruiting mainly for marketing and commercial positions. Thus, companies often look for highly proactive and independent people who are familiar with governmental negotiations and who have a high level of English. At this point, the Bachelor in Biomedical Engineering has an extremely high demand from medical devices companies. Most companies in the medical devices sector are very young compared to the pharmaceutical industry. As a result, they are looking for employees who can grow with them. Medical device companies are investing significantly in training and education for their personnel, so they want

339

MISHELLE LEÓN Consultant at Hays

to retain them in the long-term.

There is a lack of coincidence between companies, which expect that recent graduates have all the necessary skills to access new jobs, and graduates, who enter a company and hope to learn. Companies must invest in training and developing the skills of their employees and employees must invest their time and knowledge in the company. Healthcare companies are among the most demanding in the market. For instance, they demand English even if the open position does not require it.

CÉDRIC TRANTOUL Managing Director of Morgan Philips Group

The base of potential candidates is very large in Mexico; in fact, the only country with a larger base is Brazil. The problem is not finding people but getting them to change their position. The most complicated part is making the match between the company’s expectation and what the candidate wants. In countries like Chile, when a candidate is at the final stage of a recruitment process, it is between 80 and 90 percent likely that person will sign. In Mexico, the probability of closing a deal is very low. It is hard to convince people to leave their comfort zone.

CONZUELO PI Manager of Healthcare Division of Michael Page

Technology research at CONACYT

NEW ENTRANTS

The renegotiation of NAFTA has generated uncertainty among companies that make up the Mexican health system; however, the arrival of new businesses to the country continues to be positive despite the fact that these new participants face a fragmented system, an incipient adoption of technology and a complex regulatory environment. The business and growth opportunities offered in Mexico are enormous, but companies, regardless of their size, need support to overcome the doubts they face when they arrive.

This chapter offers a global and local vision of the commercial opportunities that exist in Mexico. Through interviews with prominent figures across segments, this chapter collects valuable information about the health industry, including the pharmaceutical and medical devices sectors. It also provides answers to the main questions a company must answer before, during and after its arrival in Mexico.

341

CHAPTER 14: NEW ENTRANTS 344

ANALYSIS: Uncertain Times an Opportunity for Business

346

VIEW FROM THE TOP: Ariel Blumenkranc, Advent International Mexico

347

INSIGHT: Luis Villalba, FIFARMA

348

VIEW FROM THE TOP: Héctor Valle, INNOVASALUD

349

VIEW FROM THE TOP: Ignacio García-Tellez, KPMG in Mexico

Miguel Ángel Temblador, KPMG in Mexico

350

VIEW FROM THE TOP: Sandra Sánchez-Oldenhage, PharmAdvice

351

VIEW FROM THE TOP: Óscar Ramos, Grupo SANED

352

VIEW FROM THE TOP: Paul Doulton, Oriundo

353

VIEW FROM THE TOP: Raúl Elizalde, HempMeds Mexico

354

INSIGHT: Pamela Serna, Entropy Labs

355

VIEW FROM THE TOP: Alonso Gómez, International Finance Corporation

357

EXPERT OPINION: Paul Doulton, Oriundo

343

| ANALYSIS

UNCERTAIN TIMES AN OPPORTUNITY FOR BUSINESS A climate of uncertainty has permeated the healthcare industry for the past year as both local and international matters pushed some investors to place their projects on hold. However, others see in this uncertainty opportunities for growth and are actively investing in the development of new companies in Mexico If one word characterizes the past year, it is “uncertainty.”

“There are also significant opportunities to increase

Between 2017 and 2018, the international and domestic

penetration of medical insurance solutions to the middle-

stages have been dominated by uncertain change,

low income segment. Through a value-based approach

with the US throwing NAFTA in the air and a new

to healthcare delivery, with time-driven activity-based

president arriving on Mexico’s horizon. Not everyone

costing and all-inclusive bundled packages, companies

likes uncertainty, but many investors see a silver lining,

can provide more transparency to the healthcare system,

particularly in Mexico’s health sector.

thus enabling the major insurers in Mexico to offer affordable products to the middle-low income segment

344

“Our experience of over 20 years in Mexico has taught

that now lacks access to a quality medical insurance plan,”

us that periods of political and economic uncertainty

says Alonso Gómez, Investment Officer at International

often give rise to attractive investment opportunities,”

Finance Corporation. On an international level, a win-win

says Ariel Blumenkranc, Director of Advent International

situation could emerge from NAFTA’s talks, according

Mexico. “Additionally, company owners may be open to a

to the Center for US-Mexican Studies. The center says

partner that can help them navigate cycles of instability.”

US citizens have greater access to healthcare through insurance plans, so Mexico could take advantage by

These intrepid investors can see beyond the smoke

expanding its appeal for medical tourism, investing more

clouding the environment, such as the potential results

in state-of-the-art medical facilities and training bilingual

of NAFTA talks and the TPP11, to the trends on the ground

medical professionals.

that are shaping the health industry, which remains open to new players wanting to participate.

Beyond the challenges, the uncertainty and the changes, Mexico is still an attractive country for investment

Paul Doulton, Founder and Managing Partner of Oriundo,

for several reasons. “Mexico is going through an

says the scenario is positive because most companies

epidemiological transition. Today, around 55 percent of

have enough products and business models to overcome

mortality is related to diabetes, cancer and cardiovascular

the prevalent challenges. In Blumenkranc’s opinion,

diseases. These conditions require an increase in the

companies should focus on the micro trends that are

availability of infrastructure, resources, materials and

affecting industries and companies, not only on the

health personnel,” says Ignacio García-Tellez, Director of

macro issues.

the Health Sector at KPMG in Mexico. In addition, GarcíaTellez says that the country has the right conditions to

According to Doulton where many see challenges,

attract new companies and the necessary demand to

companies see opportunities for change, growth and

continue introducing innovative products and services

development. “Some CPTPP countries are far less

in the health sector.

competitive than Mexican companies, so I guess the treaties will strengthen Mexico’s pharma and healthcare

To maintain favorable business conditions, companies

industries because they fully comply with global

should approach “business as a community-building

standards and regulations.” In this context, the Center for

effort, where growth comes from reaching beyond the

US-Mexican Studies by the University of California says

familiar circles of influence to new players,” says Sandra

that it is time to reconsider NAFTA’s existing provisions

Sánchez-Oldenhage, Owner and CEO of PharmaAdvice.

on cross-border trade services and expand health trade

“As an industry we must multiply our business relationships

between both countries because most Mexican border

to keep reaching all the patients who can enjoy the

areas are larger than their US counterparts.

medicines available and the new ones to come; it is an expanding circle of need. The challenge is how we can get

Insurance companies are among those that have an

all these stakeholders, from academia to governments,

opportunity to benefit from this trade exchange, and

payers, researchers, and with the patient at the center

provide a benefit to the population at the same time.

of all decisions, organized in pursuit of the same goal.”

ENTREPRENEURS, MEDICAL TOURISM

adds that the main difficulty for entrepreneurs is that

According to ProMéxico, in the last 10 years the country

“Mexico lacks an angel investor system, which complicates

has become the second-most important destination for

the creation of new companies.” The entrepreneurial

medical tourism, with approximately 1.2 million visitors a

opportunities in the health sector, according to

year, lagging only behind Thailand, which ranks first with

Entrepreneur, reach across the industry’s entire spectrum,

1.8 million visitors. The value of medical tourism industry is

although the most interesting opportunities are in dental

growing year by year and in 2016, ProMéxico estimated the

health, gyms, pharmacies, clinical laboratories, stem cell

value of the industry at MX$4.8 billion, while the projected

banks, skin care, foot care, nutrition physical rehabilitation

value for the end of 2018 is MX$5.3 billion. According to the

and psychological attention.

Center for US-Mexican Studies, three areas of expansion must be considered when discussing the cross-border

“Individuals need to increase their investment culture

health relationship: the increase of medical tourism, people

to support these emerging companies, but it is also

who work in the US and who receive medical attention in

necessary for the government to invest more in the

Mexico and the development of the workforce in charge of

generation of new companies,” says Valle. He adds

addressing the shortage of primary care physicians, nurse

that new companies and entrepreneurs should keep in

practitioners and others in the US.

mind that “healthcare products must undergo complex, expensive and time-consuming regulatory processes

Innovation and entrepreneurship are recognized by the

and new companies must be able to finance themselves

World Bank as key factors in addressing development

throughout these periods.”

challenges such as inclusion, sustainability and prosperity, as they boost productivity and economic dynamism; therefore,

Governments, according to the World Bank, should focus

emerging economies such as Mexico’s can benefit from new

on creating healthy innovation ecosystems where human

or improved products developed by entrepreneurs.

capital, research and development institutions, financial

345

capital, the industrial base, the legal and regulatory Entrepreneurs in the health sector must “understand the

environment, business and innovation culture are present

problems in the healthcare industry and for the industry

for entrepreneurs. In a market economy, entrepreneurship

to support them with the necessary resources,” says

should occupy a central position because it can stimulate

Héctor Valle, Founder and Partner of INNOVASALUD, who

the economic success of a nation.

MEDICAL TOURISM MAP 2018

Over the last 10 years Mexico has become the second-most important destination for medical tourism, with approximately 1.2 million visitors a year

10 4

11 9

1. Baja California

7. Puebla

2. Baja California South

8. Quintana Roo

3. Mexico City

9. San Luis Potosi

4. Chihuahua

10. Sonora

5. Jalisco

11. Tamaulipas

6. Nuevo Leon

12. Yucatan

Source: ProMéxico

5 3

8 7

| VIEW FROM THE TOP

DETECTING INVESTMENT OPPORTUNITIES ARIEL BLUMENKRANC Director of Advent International Mexico

Q: What role does Mexico play in the company’s

external resources to support management teams: the Deal

global strategy?

Team, Operating Partners and Portfolio Support Group. The

A: Advent International has two investment programs: Global

local deal team, which specializes in certain sectors, seeks

Private Equity (GPE), focused on North America, Europe

investment opportunities, conducts due diligence and leads

and Asia, and Latin America Private Equity Fund (LAPEF),

the deal from the initial investment to divestment.

focused on Latin America. We believe that having a local

346

presence is key to successful investing. For this reason,

Operating Partners are external industry experts who

in 1996 we launched a dedicated investment program for

are typically former CEOs of leading companies or local

Latin America. In Mexico, we have completed 24 investments

business owners. The third team is Advent’s internal Portfolio

and today have five companies in our portfolio: Gayosso,

Support Group, consisting of 17 people globally. They are

Invercap, Grupo Financiero Mifel, Viakem and Grupo

functional experts and work closely with management

Farmacéutico Somar. Somar, a leading generics and branded

teams to execute projects that bring substantial value to

generics pharma company that we acquired in October 2017,

our portfolio companies.

is our first deal in the Mexican healthcare space. During due diligence, we invest significant time, effort and In addition to Mexico, Advent International has Latin

resources to build a Value Creation Plan (VCP). This plan

American offices in Brazil, Colombia and Peru. Regionally,

touches all the fundamental parts of the company and

we manage US$5 billion and our most recent fund, the

determines the key value drivers we should focus on. The

largest private equity fund in Latin America, is capitalized

three groups work seamlessly together in the creation and

at US$2.1 billion.

execution of the VCP.

Q: What are the most relevant healthcare subsegments for

Q: What has been the impact of Advent International in

Advent International in Mexico?

Mexico and Latin America?

A: Pharmaceuticals, hospitals and diagnostic clinics are the

A: We have several success stories in the Latin American

three healthcare subsectors we have focused on in Latin

healthcare industry. In the pharma space, our most recent

America. That said, we are constantly analyzing investment

transaction besides Somar is Grupo Biotoscana, originally

opportunities in these and other healthcare segments. We

a Colombian pharma company with a leading position

typically invest in companies that have strong growth

in the specialty pharma subsector. In five years, through

potential and are often leaders in their subsectors. We are

organic expansion and several acquisitions, the company

flexible in the types of deals we do, from control to minority

doubled the number of countries where it has a presence.

positions.

Additionally, in 2017 Biotoscana successfully completed an IPO on the Brazilian stock exchange.

Q: What added value does Advent International offer through its transactions?

Another example is Fleury, a leading diagnostic services

A: We believe we must bring tangible value to the companies

provider in Brazil. Together with our partners, we designed

we invest in. We offer a powerful combination of internal and

a VCP based on operational efficiencies and organic expansion, which helped consolidate the company’s position as one of the market leaders in Brazil, with over 9 million

Advent International is a global private equity fund focused

patients and more than 150 patient service centers. During

on recapitalization, buyout, public-to-private and growth

our investment, Fleury increased its EBITDA margin by 40

operations across the world in healthcare, industrial, retail and

percent. These improvements translated into approximately

telecommunications. It operates 13 offices in 12 countries

350 share price growth during our investment period.

INSIGHT |

FIGHTING FOR THE COMMON INTERESTS OF PHARMACEUTICALS LUIS VILLALBA Executive Director of FIFARMA

Although pharmaceutical companies compete by

for which the potential patient base is much smaller, which

nature, they all share common interests in many areas.

in turn increases final costs. FIFARMA seeks to work with

Representing these interests is the raison-d’être of national

authorities to simplify these processes for the benefit of

and international organizations like the Latin American

patients, for instance, through the development of financing

Federation of the Pharmaceutical Industry (FIFARMA).

schemes. “We are greatly interested in the implementation of an outcome-based model where institutions pay for

“FIFARMA owes itself to the patients in Latin American and

success cases instead of sold units. Some pioneers are

to its members. Our goal is to support them and help them

introducing this financing model into Mexico but it is not

to reach their goals in the most productive way,” says Luis

yet popular.”

Villalba, Executive Director of FIFARMA. “We are committed to the development of innovative therapies as all our

FIFARMA is also prioritizing pharmacovigilance and has

members are heavily involved in innovation.” The association

launched a project called Vigilantia to strengthen its

now comprises 21 members, including major pharmaceutical

practice. “Pharmacovigilance needs to be highly proactive.

companies like Amgen, Astellas, BMS, Lily, Pfizer, Johnson

While many Latin American countries have developed

& Johnson, Roche, MSD, Abbvie, Bayer, Novartis, Merck and

regulations concerning pharmacovigilance, there are

Sanofi, as well as most pharmaceutical associations in Latin

significant reporting gaps considering the size of the

American countries including Argentina, Brazil, Colombia,

population. The goal of Vigilantia is to increase awareness of

Chile, Ecuador, Mexico, Peru, Central America (including

the importance of pharmacovigilance for patients.” Villalba

part of the Caribbean) and Venezuela.

highlights several strategies, such as regular controls to provide medications and more follow-ups with patients.

As a representative of the pharmaceutical sector, FIFARMA

“The first step is to create awareness with doctors so they

has a broad range of priorities, from fighting piracy, to

can communicate the importance of reporting side effects

promoting regulatory harmonization across Latin America,

to their patients and to take note of these side effects.

and works closely with the PAHO. The ultimate objective

However, for doctors it is often time-consuming to keep

is to simplify the introduction of medicines and provide

track of this information because they are already extremely

adequate access to innovation for all the population,

busy with other paperwork. Ideally, pharmacovigilance

which can be achieved by following the guidelines of other

reports should be sent both to the manufacturer and to

agencies. “Brazil, Mexico and Argentina have advanced

regulators.”

regulatory agencies in the region and can be considered reference points in Latin America. If a product has been

Villalba highlights the elimination of pirated medicines as

certified by any of these advanced agencies, it should be

another priority. “Falsified pharmaceuticals are the bane of

possible to introduce it in any other Latin American market.”

the sector. They represent a huge burden for the population and for the pharmaceutical segment. In some countries, we

According to Villalba, Mexico has good regulations

estimate that the number of falsified products in circulation

regarding pharmaceuticals and is taking clear measures to

can reach up to 10 percent of the products.” To address

address enforcement. The problem the country is facing

this issue, FIFARMA adopted the Fight the Fakes initiative

is the lack of access. “Local regulations specify that once

championed by IFPMA as it considers that existing efforts

a product is registered it still must undergo several more

have not been sufficient. “We are fully convinced that this

processes to be incorporated into the basic formularies of

sector is not receiving enough attention from neither the

public health institutions.” Innovative medicines have high

authorities nor society. Our goal is to facilitate the work

R&D costs, a situation that is even more complicated for

of the authorities in enforcing regulations and preventing

orphan drugs, whose development costs are also high but

these fake products from entering the sector.”

347

| VIEW FROM THE TOP

UNDERSTANDING, RESOURCES NEEDED TO NURTURE ENTREPRENEURSHIP HÉCTOR VALLE Founder and Partner at INNOVASALUD

Q: What needs to be done to encourage healthcare

of AI for breast cancer diagnostics. AI allows programs to

entrepreneurship in Mexico?

collect and use data from millions of patients all over the

A: It is necessary for entrepreneurs to understand the

world and provide it to doctors. We are also investing in

problems in the healthcare industry and for the industry

the development of preventive measures and personalized

to support them with the necessary resources. Healthcare

healthcare through genetic testing and supporting research

products must undergo complex, expensive and time-

on the generic profile of rare heart diseases.

consuming regulatory processes and new companies must

348

be able to finance themselves throughout these periods.

Q: What are the main challenges that are impacting the

Mexico lacks an angel investor system, which complicates

healthcare sector?

the creation of startups. Individuals need to increase their

A: One of the main problems is the lack of investment. In

investment culture to support these emerging companies,

2017, Mexico invested 5.8 percent of its GDP in healthcare,

but it is also necessary for the government to invest more

which is below the OECD’s 9 percent average. Another

in the generation of new companies.

issue is the existing healthcare system, which was designed to treat the diseases the country faced over

Q: What is the role of INNOVASALUD in supporting

70 years ago and that is divided in IMSS, ISSSTE, PEMEX,

companies and generating a culture of entrepreneurship?

SEDENA and others. These systems do not communicate

A: We identify viable projects led by people that fully

with each other and for that reason they cannot share

understand the sector. We provide support by helping

services and doctors, forcing patients to travel to major

them understand all the minutia of the healthcare system

cities to receive care. All this is a consequence of low

and as the project matures we find ways to support

investment in health.

the project financially. For instance, we supported a dermatology project by connecting its creators to

Q: How can different systems be unified to increase

individuals who have historically invested in this area.

access to care?

This last strategy allows us to make both an economic

A: It would be beneficial for patients to have service

and a knowledge match.

portability and access to their medical profile so they can take it to the provider of their choice. To achieve

Q: In which type of healthcare projects is INNOVASALUD

this, it is necessary to create reference and payment

investing?

schemes among the systems so that they can exchange

A: INNOVASALUD has invested in 26 different projects,

information and compensate each other. It will always be

including 3D printing, virtual reality for pain treatment and

less expensive for any institution to pay for the services

nurse and care givers homecare services. For instance,

provided by another than to build a new hospital or to

we invested in operating 134 doctor’s offices next to

force individuals to travel to different cities.

pharmacies as we believe that these models increase access to healthcare. INNOVASALUD has dental clinics

Q: How can the healthcare system change to adapt to the

for D and E socioeconomic levels and bariatric clinics for

growing problems in the country?

overweight patients. We are also investing in the generation

A: There are two strategies to address these issues. One is to reduce the number of sick people, which requires a switch from a reactive system to a preventive one. It also

INNOVASALUD is a venture capital firm focused on healthcare

requires cooperation from patients, who must be willing

and the pharmaceutical industry. The company aims to

to take responsibility for their own care. The second

transform healthcare in Mexico through the introduction of

is to increase services and infrastructure through the

innovative technologies

participation of the private sector in healthcare.

VIEW FROM THE TOP |

HOW AND WHERE TO ARRIVE IN MEXICO

Ignacio GarcĂa-Tellez Director of the Health Sector at KPMG in Mexico

Miguel Ă ngel Temblador Corporate Tax Partner at KPMG in Mexico

Q: How does KPMG guide new entrants through the basic

Q: What main advantages does Mexico offer new

questions they must answer before, during and after

participants in the health sector?

starting operations in Mexico?

MT: The Mexican workforce is highly trained and participates

MT: New entrants must define where and how they want to

in the development of products across a range of industries,

work in the Mexican market, since their corporate structure

such as cars, medicines, packaged food and flat screens.

and the geographic location can help understand the logistical advantages and disadvantages when positioning,

IG: We are the fifth top exporter of medical devices in the

moving and exporting a product. The new participants

world. Mexico is a country that needs to access innovative

should evaluate the logistics infrastructure and be sure to

products and improve the adoption of technology. In

understand how to do business in Mexico from an economic,

addition, the country has the right conditions for new

legal and taxation point of view. The labor structure in

companies that want to access the market.

Mexico must be addressed before starting operations, as this knowledge could avoid operational surprises.

Q: What trends has KPMG identified in the Mexican health sector?

IG: New entrants must consider their commercial purpose in

IG: There is a constant increase in digitalization and

Mexico and whether the company wishes to use the country

automation processes that is accompanied by the

as a final market or as a platform to reach other markets.

generation of information through data analytics.

The services offered by KPMG allow the development of a

Companies are starting to use the information they

business plan to help new participants define their income

generate day-to-day to improve their operations and to

strategy, supply chain partners, tax optimization and

invest in cybersecurity measures. We also see the entry of

negotiation schemes. Before a company arrives in Mexico,

startups that will streamline the connection between the

it must also know if it wants to enter alone or with a partner.

different entities that make up the health sector. In general,

In Mexico, the private sector represents 80 percent of the

key players have a great potential to improve the access to

market, while the public sector represents the remaining

high-quality services.

20 percent. Before entering the market, companies must contract services such as those offered by KPMG.

Q: What untapped potential do Big Data and technology have for the Mexican health sector and what role does

Q: Why is Mexico still a good investment destination for

KPMG play in this scenario?

healthcare companies?

MT: Data analytics have a strong presence in areas such as

IG: Mexico is going through an epidemiological transition.

marketing, but the trend is to strengthen its use in areas

Today, around 55 percent of mortality is related to diabetes,

such as sales, finance and production. The use of data

cancer and cardiovascular diseases. These conditions

allows companies to understand the marketâ&#x20AC;&#x2122;s behavior and

require an increase in the availability of infrastructure,

to take advantage of commercial, production and sales

resources, materials and health personnel.

windows. This information can serve to outline consumer behavior to understand when and how a particular drug

MT: The health sector has enough experience and

is consumed.

commercial platforms to provide new companies a more fluid entry, especially since new entrants can find other multinational and national companies to complement their

KPMG is a global network of professional services firms

operations. It is no longer necessary to arrive in the country

providing audit, tax and advisory services that operates in 154

with all the operating components; today, companies can

countries and territories and has 197,263 people working in

focus on the most relevant matters.

member firms around the world

349

| VIEW FROM THE TOP

HEALTH AS A COMPETITIVE ENGINE FOR THE ECONOMY SANDRA SÁNCHEZ-OLDENHAGE Owner and CEO of PharmAdvice

350

Q: What are PharmAdvice's main capabilities?

Q: What are the unexplored opportunities in the Mexican

A: PharmAdvice assists companies that want to break into

pharmaceutical and biotechnological sectors?

the Mexican health market or expand within it, whether as

A: Mexico is facing severe challenges in terms of

a new incumbent or aiming to unleash their growth track.

demographic and epidemiological shift as the population

The company offers a broad portfolio that includes helping

ages and moves toward chronic-degenerative diseases.

clients identify and contextualize regulatory requirements

Increased patient numbers with more comorbidities, a

and dynamics, understand the payer’s landscape with its

smaller number of taxpayers, extreme fragmentation of

impact on access, identify private market opportunities

the payer system, limited public budgets and infrastructure

and lobby and establish contact with key government

leading to cost containment strategies and demographic

stakeholders, strategic and brand planning among others.

bonus at risk of not being productive also impacts the system. All of this can lead to a negative impact on our

Q: What are the basic questions new entrants must answer

country’s competitiveness.

before, during and after starting their operations in Mexico? A: There are many areas to consider, but the basic questions

The current government’s three basic priorities for the

I would focus on, fall under the following areas: regulatory,

healthcare sector are aimed at improving effective access

access, reimbursement and lobbying and commercial

to healthcare, quality of service and promoting prevention.

strategy. In the regulatory field, new entrants must be

Based on these fundamentals, opportunities arise within

very clear in their understanding of patent law and local

all these challenges and it requires the health sector to

regulation, be it biotechnology, traditional pharmaceuticals,

contribute in an efficient and opportune way to promote

generics, biosimilars, medical devices, vaccines or others.

greater research and development of treatments that are focused on the most burdened chronic diseases that can

In terms of access, reimbursement and lobbying, the

turn into a solution for Mexican patients.

company needs to clearly understand how the health care system works in Mexico and how to get into the

Also, pharmaceutical incumbents must become

different basic formularies. This alleviates difficulties

active players and foster circumstances that favor the

that can arise from the extreme fragmentation present

coexistence of innovators with generics and biosimilars,

in the public sector. So, the company needs to find the

thus demonstrating the sensitivity and understanding of

most cost-effective business model that ensures patients’

the cost-containment condition of payers.

access to its products in an affordable way for the payers. Finally, a customized commercial strategy is key to having

Q: How can collaborations be generated among health

a commercial advantage when coming to Mexico. After

sector agents to achieve these opportunities?

drugs or medical devices are approved, the company

A: This means approaching business as a community-

can participate in two markets: public and private, that

building effort, where growth comes from reaching

are considerably different. Having a robust and flawless

beyond the familiar circles of influence to new players. As

commercial business plan to take advantage of these two

an industry we must multiply our business relationships

sectors is key to success.

to keep reaching all patients who can benefit from the medicines available and the new ones to come; it is an endlessly expanding circle of need. The challenge is how

PharmAdvice is a pharmaceutical, biotechnology and healthcare

we can get all these stakeholders, from academia to

consulting services company that specializes in strategic and

governments, payers, investigators and, ultimately, with the

brand planning, regulatory affairs, commercial support and

patient at the center of all decisions, organized in pursuit

lobbying for the healthcare sector

of the same goal.

VIEW FROM THE TOP |

IS THE SEVENTH ART THE NEXT MARKETING TOOL? ÓSCAR RAMOS Commercial Director Latin America of Grupo SANED

Companies that want to succeed in Mexico’s pharmaceuticals

specialists,” Ramos says. “We then release videos online

promotional segment must find a differentiating factor

on a periodic basis so doctors who follow these opinion

to stand out, says Óscar Ramos, Commercial Director in

leaders can watch.”

Latin America for Grupo SANED. He points to the Spanish company’s decision to change its marketing approach

In Mexico, Grupo SANED has also started developing films

to emphasize storytelling as a communications strategy.

to be viewed with virtual reality glasses, a strategy that

“Doctors are saturated with the number of medical reports

it now wants to export home. In the first project, which

they receive about pharmaceutical products,” Ramos says,

simulated a heart attack, a cardiologist uses a modified

adding that the group is investing in technology to help its

massage chair to reproduce the symptoms of a cardiac

partners to position themselves in the industry.

event, including paralysis of the torso’s midsection. “The goal was to sensitize doctors to the suffering a

Grupo SANED develops marketing, e-business and market

patient endures during a heart attack. This project was

access projects for the medical industry. The group is

so successful in Mexico that we are trying to export it

composed of medical writers, marketing experts, designers,

to Spain.”

programmers and experts in sanitary regulation. The company, which also supports clinical research projects

Education is a pillar in Grupo SANED’s structure, as it

in Mexico, began as a publishing house but has developed

also participates in continuous education for medical

a wide range of capabilities and services for promoting

professionals, providing education through its virtual

pharmaceutical products, including films.

campus that allows doctors to access courses on a laptop or even a cellphone. “Through these courses, doctors

A recent success story in this latter segment is ‘Nebulosa

can continue their medical training throughout their

Elisa’ (Nebulous Elisa), a short film developed with Pfizer

professional lives,” Ramos says.

that targets primary care physicians. The 12-minute movie won Spain’s ASPID award, which is an annual prize granted

Although Grupo SANED works with most of the main

to creative projects that promote pharmaceuticals. “We

pharmaceutical laboratories in Spain and Mexico it also

use the film as a conversation starter in meetings for

supports pharmacies. “Pharmacy chains want us to train

doctors and led by opinion leaders. The film is discussed

their doctors in the 50 most common diseases they face

as a prelude to a deeper conversation about the disease

on a daily basis.” The company also has a one-of-a-kind

in question.”

annual agreement with CETIFARMA, which Ramos says, “forces us to be careful regarding ethical procedures for

Movies like ‘Nebulosa Elisa’ are subtle promotional

the pharmaceutical industry.”

strategies as they focus on the disease and only mention the promoted drug’s name at the end. Until mid-2018,

The Spanish company is targeting an expansion in Latin

Grupo SANED had filmed about 40 movies. Ramos says

America that started in Mexico. It had previously worked

that the successful reception for ‘Nebulosa Elisa’ spurred

with Mexican clients from a distance but decided to open

Pfizer to ask for a second film, which he sees as a thumb’s

offices in the country to better connect with the local

up for the group’s strategy.

population. “Our offices in Mexico aim to understand the local market, to stabilize our position in the country and

A more complex approach involves film and online

to position Grupo SANED in the Mexican pharmaceutical

integration, including courses. One example is the

sector.” This is the first step as the company eyes regional

campaign ‘Diabetes on the Road.’ “In the movie, various

growth. “We plan to open offices in Colombia by 2019 as

opinion leaders go to different cities to talk to local

part of our expansion strategy for Latin America.”

351

| VIEW FROM THE TOP

NEW PLAYERS, NEW OPPORTUNITIES PAUL DOULTON Founder and Managing Partner of Oriundo

352

Q: What strategies can be applied to increase access to

different business models. There are other more important

healthcare in Mexico?

challenges for health companies in the country. Their

A: The success of allowing access to hundreds of thousands

business models are making them strong players in the

through medical offices located inside many pharmacies

domestic market and the results of CPTPP or NAFTA should

offers important lessons for improving access. These offices

not have a major impact on their performance. Some CPTPP

handle as many consultations a day as the entire social

countries are far less competitive than Mexican companies,

security network, save waiting hours at IMSS clinics, provide

so I guess the treaties will strengthen Mexico’s pharma and

many patients with an adequate diagnosis and supply the

healthcare industries because of its full compliance with

necessary generics. All this at a cost that is accessible

global standards and regulations. The last few years have

to the patient, while reducing the high incidence of self-

witnessed a number of would-be entrants, especially in

medication and avoiding the perverse incentive of disability

generics, that have failed because neither their standards

or sick pay that obstruct IMSS waiting rooms. This saves

nor business models match the needs of the Mexican market.

IMSS millions of pesos in medicines and also saves time. To overcome the criticism that these offices are not up to

Q: What is the most common profile of the companies you

standard, standards have been established and applied,

work with and how do you help improve their business?

which has allowed their continuous improvement. The

A: Our most frequent successes have come from market

other way to improve access is to allow patients to see

entry strategy guidance to foreign companies that want to

a doctor at any institution, regardless of their affiliation,

enter the Mexican market. We help them understand what

something that was in the original mandate for the creation

is required for success, be this partnering or licensing with

of Seguro Popular.

local companies, acquisition, and above all our “hit the deck running” model. The fastest growing service now is portfolio

Q: What are Oriundo’s expectations for the country?

rejuvenation, assisting both Mexican and more recently

A: We have gone through periods of uncertainty in the past

local subsidiaries in locating new therapies. And with any

but I think there is no need to worry. Today, Mexico has

consulting project, our goal is to ensure that our clients

COFEPRIS, a globally recognized regulatory agency, world

can create and sustain genuine differentiation through

recognized global standard generics and highly competitive

either improved technology, smarter business models or

modern, flexible manufacturing plants for pharmaceuticals.

better still, both. Competing simply on the basis of price is

These standards are transforming Mexico into the preferred

a downhill race to extinction.

source of supply in Latin America and North America and explains why investment continues.

A recent case in point is a small US oncology company, which is differentiating itself not only through better drugs

Q: What should healthcare companies expect from a

but through inhibitors of the resistance creators such as

renewed NAFTA and TPP11?

STAT3 proteins and a companion full diagnostic service.

A: We need to look closely at the results of NAFTA and

This is the technology differentiation, but then we need to

TPP11, but it seems that the scenario will be positive.

partner with a local company whose differentiated business

Most companies have a wide range of products and

model encompasses running local clinical trials, not just to meet regulatory requirements but to ensure rapid adoption through the Cuadro Básico for earlier adoption by the

Oriundo is a consultancy composed of former CEOs that helps

public sector, the major buyer of oncology treatments.

new entrants to Latin America pharmaceutical markets. It has

We are also exploring new alliances with companies

four main business lines: market entry, portfolio rejuvenation,

operating in Mexico and Latin America to discover new

acquisition and divestment and turnaround

and revolutionary medicines.

VIEW FROM THE TOP |

COMMERCIAL POTENTIAL AND DICHOTOMIES OF CANNABIDIOL RAÚL ELIZALDE President of HempMeds Mexico

Q: What factors make HempMeds Mexico the ideal

positive effect in the treatment of neurological diseases such

company for the commercialization of cannabidiol (CBD)

as Alzheimer’s, which is why the health industry must press

products in Mexico?

for more research into its medicinal properties. In Mexico,

A: HempMeds became the first company in Mexico to be

the industry has the advantage of being highly regulated

approved by COFEPRIS to import CBD oil for patients with

in both therapeutic and industrial uses. The homologation

a clinical diagnosis of refractory epilepsy, among other

of the national industry with international standards will

conditions. We are a leading company in the US in the

encourage the importation of more products to Mexico that

field of non-psychoactive cannabinoids like CBD and all

are derived from non-psychotropic cannabinoids.

our products are derived from legal industrial hemp crops in Europe and other countries.

Q: What alliances or partnerships is HempMeds looking for to consolidate its position in the Mexican market?

Q: What difficulties has HempMeds faced in the

A: We are open to commercial partnerships oriented to

introduction of a product in Mexico that public opinion

product development with companies that are already in

has always associated with organized crime?

this branch and have experience in the pharmaceutical or

A: Misinformation has been the biggest problem because

food supplements segments. HempMeds Mexico seeks

people do not differentiate cannabinoids from marijuana.

potential partners that share similar expectations in the

We do not work with the psychoactive version of cannabis,

growth and development of the hemp industry based on

which contains THC. In 2017, the WHO declared CBD as a

rigorous quality processes.

non-psychotropic substance because it does not generate addiction.

Q: How does HempMeds achieve cost-effective efficiency in its products?

Q: What is the true potential of CBD for the Mexican

A: All our products with CBD have a Triple Lab Testing

health industry?

process to guarantee quality and purity, from its crops to

A: HempMeds sees a big opportunity to use cannabinoids

the finished product. The international parameters that we

for balancing physiological functions related to the

use in the industry help us to standardize the manufacturing

endocannabinoid system found in the human body in

process and the concentration of the doses; this makes

receptors such as CB1 and CB2. Mexico needs to invest

HempMeds Mexico a very different company.

more in R&D studies regarding the use of CDBs in therapeutic treatments and to expand the possibility of

Q: What are the three main goals for HempMeds in the

using substances derived from cannabis for research.

coming years?

Synthetic cannabinoids in the market have proved to have

A: First, we want to consolidate as the leading company

a positive effect, so that botanical cannabinoids combined

of cannabinoids in Mexico. Later, we want to bring the

with other drugs could generate a greater benefit.

full HempMeds’ stock to the country and to develop our products here for export. We think Mexico has favorable

Q: What advice would you give to doctors who have not

conditions and regulations to develop the full cycle of

changed their opinion about the use of CBD products?

production for CBDs.

A: This year, we have had more acceptance, but there is still confusion in the health industry. We are changing the mentality about CBDs and their therapeutic properties with

HempMeds Mexico is a US company focused on the

professionalism and information. We hope that in the future

manufacture of cannabidiol products. The company launched

non-psychotropic cannabinoids can be considered like any

its Mexican division in 2016 with the goal of providing access to

other supplement for human health. Research has shown a

the hemp extract cannabidiol oil

353

| INSIGHT

LOOKING FOR RISK-TAKERS TO DISRUPT HEALTHCARE PAMELA SERNA Director of Health Area at Entropy Labs

While many praise and admire market disruptors, others

been using it for over 20 years. Our goal is to break the

fear change and its implications. In Mexico’s healthcare

existing paradigms and the bureaucratic processes that

sector, the latter view is more prominent, says Pamela

impede the penetration of this technology.”

Serna, Director of Health Area at Entropy Labs. “Based

354

on my experience in the public and private sectors, I

Clients are often unaware of the existence of this technology

believe that users tend to fear innovation and prefer to

and are often reluctant to incorporate it, says Serna. “To

keep using known practices and equipment. For that

carry out this project, it was necessary to find a real risk-

reason, we need to work closely with Mexican companies

taker, which is rare in the health sector. However, now that it

to fully understand their needs and how to incorporate

is installed, doctors understand that it does not hinder their

technology into their practices. It is necessary to coach

work. One of our responsibilities is to convince all interested

our clients about the benefits that new technologies can

parties of the potential benefits of this technology.” In this

offer them.”

particular case, Diphsa brought to Mexico and installed the equipment. While the installation work represented an

Created in 2016, Entropy Labs is a consultancy for different

important initial investment, Serna says that the company

sectors, including healthcare. Entropy Labs brings together

financed it for three years and now only pays maintenance

specialists in many areas, including economics, medicine

costs, resulting in almost 80 percent yearly savings in

and data science. “Our goal is to make a difference in

oxygen compared with the use of tanks.

healthcare research,” says Serna. As an example, Entropy Labs looks for projects and companies that can be

Entropy Labs’ goal with this project was the automatization

improved through the use of Internet of Things (IoT),

of all processes through the use of IoT principles. “Before

which allows the constant monitoring of equipment

our involvement, operators collected all data in notebooks.

to facilitate the work of operators. In healthcare, this

We installed software that automatically measured and

technology can help operators perform predictive analysis

compiled the plant’s operational data and the quality of

of equipment to take preventive measures before failure

the oxygen produced to ensure that the gas complied

becomes imminent.

with European regulations.” Entropy Labs expects to finish this project by the end of 2018. “Once the platform

While IoT principles are widespread in many sectors, such

is finished we can use it as a model and replicate it at other

as energy, aerospace or automotive, healthcare has fallen

hospitals to digitize different hospital areas like imaging

behind in the incorporation of these practices. To quickly

departments. We are looking for interested hospitals that

fill the gap, companies such as Entropy Labs can take

have an innovation area that can manage the incorporation

advantage of existing processes and techniques. “We are

of these systems.”

learning from other industries regarding the application of IoT principles. Some of our collaborators have worked in

Entropy Labs will continue branching into different

automation projects for other sectors, for example.”

healthcare areas through the development of technology that capitalizes on Mexican creativity. “One of our goals

Entropy Labs first project was the optimization of a self-

is to develop new economic models for healthcare, such

generating oxygen plant at a hospital in Culiacan, Sinaloa.

as community healthcare, self-management of healthcare,

Plants like this allow hospitals to concentrate and filter

and different business models that address gaps in care.

atmospheric air to obtain oxygen that can be used during

Technology will be essential for the future of healthcare

surgery, in mechanical respirators and in many other areas

but it is not our savior. We need to change the mindset of

to replace the use of oxygen tanks. “This technology may

the general population to develop strategies for providing

seem revolutionary in Mexico, but other countries have

and managing healthcare through prevention.”

VIEW FROM THE TOP |

HIGH-IMPACT INVESTMENT IN MEXICO’S HEALTHCARE ALONSO GÓMEZ Investment Officer at International Finance Corporation

Q: What are IFC’s priorities in Mexico?

A: IFC helps investors by reducing political risk through

A: IFC’s twin goals are ending extreme poverty by 2030

government relationships, preferred creditor status and by

and ensuring shared prosperity in a sustainable manner. To

playing neutral broker role. Given IFC’s local presence in

achieve these goals, IFC supports companies in the private

more than 100 regional offices, IFC can provide certainty

sector by providing financial and nonfinancial solutions.

to other investors when they are entering a new country.

On the investment side, we provide long-term competitive

Within the World Bank, the Multilateral Investment and

financing in the form of corporate loans, long-term project

Guarantee Agency (MIGA), IFC provides political risk

finance, mezzanine instruments and equity investments.

insurance guarantees for projects in a broad range of

IFC’s goal is to become a long-term valuable partner by

sectors in developing member countries.

sharing global knowledge through our industry specialists and global relationships with key business players.

Q: What are the key areas for investment in the Mexican healthcare sector?

Q: In which sectors is IFC operating and where does the

A: We have seen several investment opportunities across

health industry fit in your portfolio?

different subsectors within the healthcare space. For

A: Our key sectors in Mexico are health and education,

instance, the hospital and labs industry is very fragmented.

infrastructure, financial markets, manufacturing,

There are opportunities for consolidation as the private

telecommunications, renewable energy, agribusiness and

sector accounts for two-thirds of the hospitals in Mexico but

water. In the healthcare space, IFC has a global portfolio

only one-third of all beds (just 6 percent of private hospitals

of US$2 billion, of which 40 percent relates to investments

have more than 25 beds). Private healthcare expenditure in

in the pharma sector. There are many Mexican companies

Mexico will continue growing given Mexico’s demographic

looking to expand operations to other markets and we

trend. Mexico’s population is aging and chronic diseases

believe we can support them in that regard by sharing

are growing while the country has a deficit of medical

knowledge on potential partners in new markets given

infrastructure: only 1.6 beds per 1,000 population, which is

IFC’s global network, our healthcare expertise in emerging

the lowest among OECD countries, 2.2 doctors per 1,000

markets and our local presence in almost every country in

people and the lowest public health expenditure at 5.8

Latin America.

percent of GDP versus the OECD average of 9 percent.

We look for projects that are financially sustainable with

There are also significant opportunities to increase penetration

high-development impact. We have different metrics for

of medical insurance solutions to the middle-low income

every sector and we monitor them closely to ensure that

segment. Insurance penetration is quite low. Through a value-

the investment achieves its development goals.

based approach to healthcare delivery, with time-driven activity-based costing and all-inclusive bundled packages,

Q: What would be a recent success case for IFC in Mexico?

companies can provide more transparency to the healthcare

A: salauno. It is a company founded by two entrepreneurs

system, thus enabling the major insurers in Mexico to offer

in 2011 who adapted a model that was created in India

affordable products to the middle-low income segment that

to provide affordable and quality ophthalmology services

now lacks access to a quality medical insurance plan.

to the base of the pyramid. We have been partners since 2014 and have supported the company to achieve its growth plan.

The International Finance Corporation (IFC) belongs to the World Bank Group and focuses on the private sector in

Q: What are the main concerns of investors in Mexico and

developing countries. IFC applies financial resources, technical

how do you help them?

expertise and global experience to help partners

355

Research at CONACYT

356

EXPERT OPINION |

CRITICAL SUCCESS FACTORS FOR ENTERING THE MEXICAN PHARMACEUTICAL MARKET PAUL DOULTON Founder and Managing Partner of Oriundo

The first step for designing a market entry is to understand

has not happened and the public spending on health

the important difference and the essentials of the Mexican

has dropped from 6.2 to 5.8 percent of the countryâ&#x20AC;&#x2122;s

Market dynamic. Mexico is a US$12.5 billion market and

GDP. The minor problem is the registration of drugs. Also,

the second-largest in Latin America. Its constant growth

the tender process for drugs requires more specialized

was driven by better access, global standard generics,

knowledge to avoid forced price reductions.

obesity and diabetes, an aging population and new patient-centered business models.

The questions that we need to address in developing the right market entry strategy, are: 1) how is your own

The global production standards and processes are

company different in technology, business model, success

transforming Mexico into an increasingly important

in other markets? This is your starting point to see how

sourcing hub for the region in both South and North

your focus might fit into the opportunities and differences

America. Inwards, the investment continues to nurture

of the Mexican market. 2) What do you want to achieve?

efficiently pharma plants and midsize companies in

Are you averse to risk? Are you open to find different

Mexico show greater growth than the big boys and global

ways of doing things? Can you identify synergies with

players.

other Latin American markets, how will you source and what level of control is right? The answers to these

There has been an astonishing improvement in patient

questions will ensure that the strategy design will prosper

access via the doc-in-a-box model. This means around

when seeking approval from your board. 3) How to get

100 million consultations every year. This model is the

the strategy right? Talk to the right people, there are

establishment of a doctorâ&#x20AC;&#x2122;s office next to pharmacies

good, reliable sources of local support such as AMIIF,

as the result of the failed social security model. Now,

CANIFARMA, Healthlinks, Oriundo, IQVIA and others that

patients through this model save time, get a proper

will put you on the scope. 4) Which markets should I go

diagnosis and global standard generics and can go back

for? Define who are your real audience and what is the

to work sooner. Also, the changes reflect great savings

real decision locus for your company to define whether

for IMSS and other social security clinics.

to enter the public, private or both sectors. 5) How fast do you want your market entry, and where does Mexico

In the regulatory sphere, COFEPRIS, the maximum

fit on the global priority list? This will have a bearing on

regulatory agency became recognized by EMA, FDA

our choice of route, whether this is through (the right)

and others. The regulatory agency has raised standards

marketing partners, licensors, acquisition, outsourcing

of generics to global quality, enforcing compliance, and

to hit the deck running or go it alone. So, of course, this

has speeded up marketing authorization for new drugs

needs the right kind of person to drive the business

from a two-year approval process down to three months.

to success.

Overall, the decades-long stifling monopsony of

Getting it right the first time is what this is all about. Do

wholesalers has been broken through the fast-rising

not try to force a driven model from markets where the

power of the pharmacy, supermarket chains and specialist

market dynamics are so different. Folks who have run

distributors as most of the doc-in-a-box offices are

market entry strategies here on the ground have taken

located next to the chain pharmacies, so private label

all the knocks. So why not talk to them? And remember,

generics are the fastest growing category.

Latin America has over 20 markets, all with differing market dynamics, so the right strategy for Brazil or

The less good bits are that healthcare situates too low

Colombia may not be the right one for Mexico, albeit

on the political agenda, the move toward a single payer

there are powerful regional synergies that can be built.

357

ACRONYMS AI

Artificial Intelligence

AIDS

Acquired Immune Deficiency Syndrome

AMID AMIIF AMIS API ART ARV

INEGI

National Institute of Statistic and

Mexican Association of Innovative

IoT

Internet of Things

Industries of Medical Devices

Intellectual Property

Mexican Association of Pharmaceutical

ISSSTE

Institute of Safety and Social Services for

Mexican Association of Insurance

JCI

Joint Commission International

Institutes

LATAM

Latin America

Active Pharmaceutical Ingredient

M&A

Merger and Acquisition

Anti-Retroviral Therapy

NAFTA

North American Free Trade Agreement

Anti-Retro Virals

NCD

Non-Communicable Disease

B2B

Business to Business

NOM

Mexican Official Norms

B2C

Business to Customer

NSF

National Safety in Food

OECD

Organization for Economic Co-operation

Geography

Research Industries

CANACINTRA National Chamber of the Transformation

Federal Workers

Industry CANIFARMA

and Development

National Chamber of the Pharmaceutical

OTC

Over the Counter

Industry

PAHO

Pan-American Health Organization

National Center for the Prevention and

PEMEX

Petróleos Mexicanos

Control of HIV / AIDS

PPP

Public-Private Partnership

CEO

Chief Executive Officer

R&D

Research and Development

CNS

Central Nervous System

Prescription Drugs

COFECE

Federal Commission of Economic

SAGARPA

Ministry of Agriculture, Livestock, Rural

CENSIDA

Competition COFEPRIS CONACYT

Development, Fishing and Alimentation

Federal Commission for Protection

SALUD

Ministry of Health

Against Sanitary Risks

SEDENA

Ministry of National Defense

National Council for Science and

SEDESA

Ministry of Health of Mexico City

Technology

SEMAR

Ministry of the Navy

CRO

Contract Research Organization

SINGREM

National System of Medicines and Bottle

EMA

European Medicines Agency

ENSANUT

National Survey of Health and Nutrition

T1D

Type 1 Diabetes

European Union

T2D

Type 2 Diabetes

FDA

Food and Drug Administration

CPTPP

Comprehensive and Progressive Trans-

FPGC

Protection Fund against Catastrophic Expenditures

United Nations

FTA

Free-Trade Agreement

UNAM

National Autonomous University of

GMP

Good Manufacturing Practices

GPS

Global Positioning System

UNICEF

United Nations Children’s Fund

Residue Management

Pacific Partnership

Mexico

HIV

Human Immunodeficiency Virus

VAT

Value Added Tax

IMPI

Mexican Institute of Industrial Property

WHO

World Health Organization

IMSS

Mexican Institute of Social Security

TECHNOLOGY SPOTLIGHTS 70-71 Vitalmex 144-145 Dräger 154-155 CIDETEQ 180-181

Mavi Farmacéutica

276-277 Chiesi 308-309

Siemens Healthineers

313

Grupo Altavista

PROJECT & INNOVATION SPOTLIGHTS 80-81

Linet Group SE

128-129

Grupo ACF

332-333 CINVESTAV 248-249

Grupo Diagnóstico Aries

ADVERTISING INDEX 6

Grupo Bruluart

14-15

Pierre Fabre

Grupo Diagnostico Aries

BFP, Part of QBD Group

51 Olivares 62 Vitalmex 69 Dräger 76 GINgroup 90

Mexico Business Publishing

110

Mavi Farmacéutica

123

Grupo ACF

125

Farmacias Benavides

134 AMID 146

Siemens Healthineers

160 Marzam 208 ANAFAM 234 CONACYT 241 Biocodex 243

Médica Santa Carmen

247

Linet Group SE

258 Chiesi 282 AMIIF 300 INCan 326 WHO 342 CANIFARMA

INDEX #-D 3M 130, 201

BioMarin Pharmaceuticals 204, 273

Abbvie 347

BMS 347

Accelerated Clinical Research 292

Boston Scientific 33, 317

ACR 292

BPF, Part of QbD Group 41, 44, 45

ACROM 21, 23, 25, 285, 286, 287, 289, 290, 295

Brudifarma 215

ADAM 153

Bruluagsa 215

ADIAT 112

BSN Medical 118

Advent International Mexico 344, 346

CAERSER 273

AFAMELA 10, 30, 211

CAIPaDi 243

ALALOG 164

CANACINTRA 29, 112

Alandra Medical 148

CANIFARMA 24, 32, 112, 136, 179, 220, 266, 286, 295, 357

Laboratorios Alfasigma 245

CANIPEC 211, 212

Allen Laboratorios 41, 220

Capsugama 172

Almacén de Drogas 169

Carestream 136, 151

Alpharma 217

Carnot Laboratorios 32

AMASFAC 100

CASIC 212

Amazon 33, 126, 302

CCE 227, 270

AMD 254

CCINSHAE 286

AMEGI 9, 10, 213, 220

Cecyc Pharma 296, 297

AMEPRES 286

CENATRA 251

Amgen 210, 347

CENETEC 21

AMIFAC 286

CETIFARMA 25, 287, 351

AMIIF 22, 23, 30, 32, 163, 179, 202, 205, 240, 261, 265, 266,

CFM 32

286, 287, 289, 290, 357

Chanel 226

AMIS 23, 92, 99, 100

Chiesi 269

AMPPI 34, 261

Chinoin 32

ANA Compañía de Seguros 99

Christus Health 72

ANAFAM 30, 32, 162, 179

Chubb Seguros Mexico 127

ANAFARMEX 33, 237

CIATEJ 279

Anáhuac University 169

CIEP 9

ANCE 11, 41, 56

CINVESTAV 279, 331, 333

ANVISA 174

Clinitas 65, 87

AOLM 163, 164, 183

Cluster of Medical Products of the Californias 112

APEC 25

CNBS 106

APEIC 286

COFECE 9

Apotex 213, 214

COFEPRIS 9, 23, 24, 29, 30, 32, 37, 40, 41, 42, 45, 46, 47, 48,

Association of Physicians of the Pharmaceutical Industry 286

50, 51, 52, 53, 56, 57, 84, 115, 119, 123, 138, 157, 162, 164, 169, 172,

Association of Professionals Specialized in Clinical Research

174, 175, 185, 187, 190, 191, 200, 210, 212, 213, 219, 220, 224, 225,

286

229, 231, 240, 252, 261, 263, 265, 270, 273, 285, 286, 287, 290,

Astellas 347

292, 293, 295, 296, 322, 352, 353, 357

AstraZeneca 260, 318

CONACYT 28, 32, 36, 40, 97, 153, 155, 178, 245, 250, 256, 261,

ATP 52

264, 272, 275, 293, 328, 329, 330, 331, 340, 356

Attorney General’s Office 251

CONCAMIN 22, 34, 270

Augen 230

Consorcio Mexicano de Hospitales 68, 69

Autonomous University of Nuevo Leon 22, 137, 286

Consulmed 107

Bain Capital 174

COPARMEX 22

Banorte 68

Council of the Cosmetics, Personal and Household Care

Bayer 260, 318, 347

Industry of Latin America 212

B. Braun Medical 157, 204

CPTPP 40, 48, 54, 163, 213, 225

BCBS 100

CRES 121

Becerril, Coca & Becerril 34, 49, 55, 261

CROs 20, 23, 25, 170, 186, 285, 286, 287, 289, 290, 294, 295,

Beckman Coulter 114

296, 297

BioCenter 252

Deloitte 13, 58, 65, 67, 137, 210, 262

INDEX D-I DHL 187

GINgroup 96-97

DHR International 336

GlaxoSmithKline 49

DIF 121, 254

Global Health Intelligence 112, 136, 303, 304, 317

DINAMEGI 220

GMMC 11, 182

Diphsa 85, 141, 354

GMX Grupo Mexicano de Seguros 99

Distribuidora Levic 162, 171, 202

GNP 127

Docademic 302, 319

Government of Queretaro 22

Doctors Without Borders 323

Grupo ACF 162, 165, 183

Dräger 93, 132, 140, 141, 145, 298

Grupo Altavista 312, 313

Dr. Vagón, El Tren de la Salud 65, 255

Grupo Bruluart 215

DSM Sinochem Pharmaceuticals 174

Grupo Dalinde 140

Ecaresoft 65, 303, 311

Grupo Devlyn 226, 227

El Crisol 185

Grupo Diagnóstico Aries 315

El Economista 64, 97

Grupo Financiero Mifel 346

EMA 32, 357

Grupo IDEA 177

Emcure Pharmaceuticals 302, 322

Grupo México 255

Emiti 321

Grupo Neolpharma 162, 165, 217, 331

Entropy Labs 354

Grupo Promass 105

EPSalud 119

Grupo Regional de Farmacias Productivas 122, 123

Eseotres 64, 136, 150

Grupo SANED 351

Essilor 228

Grupo Torre Médica 69, 74

Essity Medical Solutions Mexico 113, 118

Grupo Tresalia 173

ETHICS 25

Grupo Valore 92, 99, 202, 203

Eurotrials 291

Harvard School 8

Evaluate Pharma 10, 11, 210, 211, 260

Harvard’s Joslin Diabetes Center 247

FAO 8

Hays 337, 339

Farmacéutico Somar 346

Health Commission 227

Farmacia San Pablo 112, 126

Healthlinks 357

Farmacias Benavides 124-125

Health Regulatory Commission 121

Farmacias del Ahorro 255

HempMeds Mexico 353

Farmacias GI 215

Hetero 218

Fármacos Proasse 127

Hogan Lovells BSTL 47

Farmaka 124

Hormona Laboratorios 213

Farmalisto 113, 131, 183, 304

Hospital Ángeles Pedregal 143

FDA 32, 42, 119, 149, 174, 221, 222, 262, 271, 274, 292, 315, 357

Hospital Christus Muguerza 65, 72, 88, 98, 141

FEMEXFER 273

Hospital General de México 137, 139

FEMSA 33

Hospital Médica Sur 311

Ferromex 255

Hospital San Ángel Inn 77

FIA 228

Hospital Sedna 65, 86, 311

FIFARMA 347

Hospitaria 65, 69, 82, 246

FUMEC 112

Huli 320

Fundación Carlos Slim 246-247

IBM 302, 307

Fundación Devlyn 227

ICMRA 42

Funsalud 31, 237

ICON 285, 287, 289

Galderma 206, 211, 227

ICR 295

Galicia Abogados 48, 261

IFPMA 25, 284, 347

Gayosso 346

IMCO 8, 191

GE 317

IMPI 32, 41, 48, 49, 220, 225, 261, 265

Gedeon Richter 274

IMS Health 224, 314

General Health Council 40, 48, 82, 86, 119, 147, 261, 290

IMSS 12, 18, 19, 21, 22, 23, 24, 25, 26, 31, 40, 59, 64, 65, 73, 87, 96,

Genesys 302, 310

100, 106, 107, 115, 116, 119, 120, 140, 151, 153, 155, 191, 217, 231, 261,

GIINT 279

264, 265, 270, 273, 285, 289, 290, 295, 304, 312, 348, 352, 357

Gilead Sciences 268

INADEM 204

INDEX I-O

INCan 140, 242

Medigene 266

INCMNSZ 195, 243, 250

Medistem Healthcare Services 186

INDRA Healthcare 306

Medistik 173

INE 64, 193

Medtronic 146

INEGI 8, 13, 19, 64, 67, 113, 117, 153, 162, 163, 191, 230, 236, 237,

Menarini 270

242, 263, 316

Merck 49, 165, 347

Infinite Clinical Research (ICR) 295

MERCO 271

INGER 116

Metropolitan Autonomous University 164

INMEGEN 21, 35, 65, 244, 245

Mexican Association of Diabetes 254

INNOVASALUD 8, 345, 348

Mexican Association of Logistic Operators 163, 164, 183

INOVACYT 296

Mexican Association of Managers of Applied Research and

Instituto de Oftalmología 250

Technological Development 112

Instituto Nacional de Salud Pública 93

Mexican Association of Pharmacovigilance 286

Integral Family Development 121, 254

Mexican Society of Biomedical Engineering 112

Inter-American Development Bank 247

Mexico-US Foundation for Science 112

International Automobile Federation 228

Michael Page 328, 329, 335, 339

International Finance Corporation 344, 355

Micro Labs 222

Invercap 346

Micro Pharmaceuticals 222

IQVIA 9, 65, 287, 303, 314, 357

Mindray 153

ISSEMyM 19, 290

Ministry of Economy 11, 24, 32, 120, 295

ISSFAM 19

Ministry of Health 8, 17, 19, 24, 25, 30, 31, 32, 35, 47, 51, 59, 64,

ISSSTE 12, 18, 19, 20, 21, 23, 25, 40, 64, 73, 87, 115, 119, 140, 151,

67, 79, 116, 147, 164, 190, 191, 195, 204, 210, 236, 237, 242, 250,

191, 231, 236, 237, 261, 264, 270, 290, 295, 304, 348

251, 254, 255, 270, 318, 329

JCI 82, 86

Ministry of Health of Mexico City 17

Jobplex 329, 336

Ministry of Labor and Social Welfare 107

Johnson & Johnson 40, 49, 147, 205, 260, 347

Ministry of Public Administration 29

Joint Commission International 82, 86

Morepharma 225

Jones Day 40, 46

Morgan Philips Group 329, 338, 339

Keralty 65, 87

MSD 260, 347

KPMG 11, 162, 197, 304, 344, 349

MVS Radio 255

Laboratorio Biogen 78

Nadro 166, 169

Laboratorios de Especialidades Inmunológicas 293

NAFTA 5, 11, 23, 24, 34, 40, 43, 45, 46, 48, 54, 55, 156, 163, 182,

Laboratorios Expanscience 231

212, 213, 214, 222, 337, 341, 344, 352

Laboratorios Hormona 225

National Commission of Banking and Insurance 106

Landsteiner Scientific 201, 219

National Geriatrics Institute 116

Latin American Logistics Association 164

National Health Council 31, 237

Lavartex 83

National Institute of Genomic Medicine 78, 244

LEI 293

National Institutes of Health 195, 264, 286

Linet Group SE 81, 116, 117

National System for Packaging and Medicine Residue

Liomont 32, 165

Management 179

L’Oréal 231

National Union of Pharmaceutical Entrepreneurs 169

Malvestio 153

Nestlé 227

Mapfre 96, 97

NIH 264

Marken 186

Novartis 10, 78, 203, 216, 260, 271, 347

Marzam Healthcare Distribution 167

Novo Nordisk 16, 158, 240, 241, 334

MASZ 9, 92, 106

NYCE 50, 55, 205

Mavi Farmacéutica 181, 221

OECD 8, 9, 12, 13, 18, 26, 27, 35, 41, 64, 66, 67, 83, 84, 89, 92,

Mayo Clinic 247

94, 95, 120, 122, 191, 205, 210, 224, 236, 238, 239, 242, 268, 328,

McKesson and Wolters Kluwer 113

330, 348, 355

Mead Johnson Nutrition 229

Olivares 41, 43

MedCity News 210

Olympus America 156

Medela 153

Onko Solutions 149, 255

Médica Santa Carmen 79

Opticas Lux 230

INDEX O-Z

Oriundo 55, 344, 352, 357

SINGREM 179

Ottobock 121

Industrias Sintoquim 163, 211, 226

OXXO 126, 211, 230

Sisnova 127

Page Group 335

Smart Scale 316

PAHO 27, 32, 50, 347

Smith & Nephew Mexico 112, 120

PEMEX 12, 21, 26, 35, 64, 73, 115, 151, 245, 261, 273, 304, 348

SNI 195

Pen Healthcare 318

SOHIN 204, 253

Pfizer 10, 49, 165, 204, 205, 210, 211, 260, 265, 273, 318, 347, 351

Soluciones Hospitalarias Integrales 253

PGR 251

SOMIB 112

Pharmadorf 225

SPITS 124

PharmAdvice 350

STPS 107

Pharmometrica 57

TAAP 53

Philips 72, 136, 142, 143, 329, 338, 339

Tecnológico de Monterrey 137

Pierre Fabre Médicament 266

TECROM 184

Plan Wealth MGMT 93, 104

Telcel 321

PLM 303, 307

TESIS 40, 51, 201

PPD 285, 287, 288

Teva 165

PRA Health Sciences 285, 290, 297

Textile Rental Services Association of America 83

Prevem Seguros 99

Thriven 275

ProMéxico 10, 11, 23, 24, 29, 40, 112, 113, 162, 191, 245, 263, 284,

Tradimport 176

285, 286, 287, 295, 345

TransCelerate 286

Puebla Metropolitan University 164

TRSA 83

PwC 41, 59

Truscreen 149

Quintiles 314

UAM 164

Ray-Ban 226

UANL 22, 137, 286

Red Cross 323

UCB 278

Resonandina 152

Ultra Laboratorios 224

Riester 153

UMFmedical 153

RM Pharma 294, 297

UNAM 25, 32, 153, 164, 195, 247, 250, 261, 264, 272, 279, 307

Roche 210, 274, 347

UNEFARM 169

salauno 65, 73, 355

Unima 323

Salud Fácil 101

Uniparts 178

Salvador Zubirán National Medical Sciences and Nutrition

UPS 163, 186

Institute 236, 243

US Chamber of Commerce 254

Sandoz 9, 10, 216

Valtria Engineering 175

Sanfer-Hormona 32

Viakem 346

Sanofi 165, 347

Vitalmex 65, 71, 75

SAT 285, 286, 295

Walgreens Boots Alliance 124

SCOR 9, 92, 102, 203

Walmart 126

Sears 227

WBA 124, 125

SEDENA 12, 17, 19, 35, 64, 115, 151, 261, 304, 348

WHO 17, 27, 42, 50, 83, 105, 137, 162, 170, 199, 200, 219, 242,

SEDESA 17

245, 353

Seguro Popular 12, 18, 19, 26, 35, 59, 73, 86, 87, 100, 102, 191, 196,

Willis Towers Watson 92, 93, 103

204, 226, 236, 242, 247, 250, 253, 270, 273, 278, 304, 318, 352

WIPO 137

Seguros Argos 99

World Courier 163, 170

Seguros Atlas 68, 127

WTO 55, 137

SEMAR 12, 64, 151

Zion Market Research 210

Senosiain 32

Zurich 96, 97

SHCP 65, 261, 264, 295 SICYT 296 Siemens Healthineers 136, 138, 139, 309 Silanes 32, 318 Silicon Valley 100, 204

PHOTO CREDITS Cover Scantibodies

60 Dräger

130 MBP

Inside Front Cover Medtronic

68 CMH

131

World Courier

132 Dräger

Novo Nordisk

Hospital Christus Muguerza

MBP, Farmalisto

73 salauno

138 Siemens

17 MBP

74 MBP

139 Siemens

Seguro Popular

75 Vitalmex

140 MBP

20 MBP

77 MBP

141 Dräger

21 MBP

142 MBP

22 MBP

79 MBP

143 Philips

24 MBP

82 MBP

146 MBP

25 CETIFARMA

83 MBP

147 MBP

26 OECD

84 MBP

148 MBP

27 WHO

85 Diphsa

149 MBP

28 CONACYT

86 MBP

150 MBP

29 CANACINTRA

87 MBP

151 MBP

30 MBP

152 MBP

31 Funsalud

93 Dräger

153

32 MBP

96 GINgroup

156 MBP

33 MBP

157 MBP

34 MBP

99 MBP

158

100

164 MBP

OECD, MBP, INMEGEN

Laboratorios Biogen

Hospital Christus Muguerza

Hospital Christus Muguerza Bupa Global

Promédica, MBP

Novo Nordisk

36 CONACYT

101 MBP

165 MBP

42 COFEPRIS

102 MBP

166 MBP

43 MBP

103

Willis Towers Watson

167 MBP

44 MBP

104

Plan Wealth MGMT

168

Jones Day

105

Grupo Promass

169 MBP

MBP, MBP

106 MBP

170 MBP

Galicia Abogados,

107 MBP

171 MBP

Galicia Abogados

108 3M

172 MBP

49 MBP

114 MBP

173 Medistik

50 MBP

115 MBP

174

51 MBP

116 MBP

175 MBP

52 MBP

118 MBP

176 Tradimport

53 MBP

119 MBP

177

Baker & McKenzie

120 MBP

178 MBP

MBP, MBP, MBP

121 MBP

179 MBP

MBP, MBP

122 MBP

182 MBP

57 MBP

124

183

58 Deloitte

126 MBP

184 MBP

59 PwC

127 MBP

185 MBP

Farmacias Benavides

Novo Nordisk

DSM Sinochem

Grupo IDEA

MBP, MBP, MBP

186 UPS

245 MBP

310 MBP

187 DHL

246

311 Ecaresoft

188 Philips

246 Hospitaria

194

250 MBP

Marcos González

Fundación Carlos Slim

312

Grupo Altavista, Grupo Altavista, MBP

195 CONACYT

251 MBP

314 MBP

196 CONACYT

252 MBP

315 MBP

199 Dräger

253 MBP

316

Smart Scale

200 COFEPRIS

254 AMD

317

Global Health Intelligence

201

MBP, Hospital Christus

255 MBP

318 MBP

Muguerza, MBP

256 CONACYT

319 MBP

202

Novo Nordisk, MBP, MBP

264 CONACYT

320 Huli

203

Novartis, Philips

265 Pfizer

321 Emiti

204

MBP, MBP

266

Pierre Fabre

322 MBP

205

Pfizer, CONACYT, MBP

267

Pierre Fabre

323 MBP

206 Galderma

268

Gilead Sciences

324 CONACYT

212 MBP

269 MBP

331 MBP

213 MBP

270 Menarini

334

214 MBP

271 Novartis

335 MBP

215 MBP

272 MBP

336

216 MBP

273 MBP

337 MBP

217

274 MBP

338 MBP

218 MBP

275

339

219 MBP

278 MBP

340 CONACYT

220 MBP

279

GIINT, MBP

346 MBP

221 MBP

280

Novo Nordisk

347 MBP

222 MBP

286 MBP

348 MBP

223 Biocodex

287 MBP

349 MBP

224

Grupo Neolpharma

Ultra Laboratorios

MBP, CONACYT

Novo Nordisk Job Plex

MBP, MBP, MBP

288 MBP

350 PharmAdvice

225 MBP

289 ICON

351 MBP

226

MBP, MBP

290 MBP

352 MBP

227 Galderma

291

353 MBP

228

MBP, MBP

292 MBP

354 MBP

229

RB Health

293 LEI

355 MBP

230 Augen

294 MBP

356 CONACYT

231

Laboratorios Expanscience

295 ICR

357 MBP

232

Dr. Vagon

Inside Back Cover Philips

MBP. MBP

296

Cecyc Pharma

240 MBP

297

MBP, MBP, MBP

242 MBP

298 Dräger

243 MBP

306 MBP

244 INMEGEN

307 MBP

CREDITS SENIOR JOURNALIST & INDUSTRY ANALYST: Alicia Arizpe JOURNALIST & INDUSTRY ANALYST: Camila del Villar JUNIOR JOURNALIST & INDUSTRY ANALYST: Alessa Flores EDITORIAL MANAGER: Daniel González EDITOR: Ricardo Guzmán MANAGING EDITOR: Mario Di Simine PUBLICATION COORDINATOR: Blanca San Martín PUBLICATION COORDINATOR: Jorge Naupari PUBLICATION COORDINATOR: Marta Aguilar COMMERCIAL DIRECTOR: Jack Miller SENIOR GRAPHIC DESIGNER: Ailette Córdova GRAPHIC DESIGNER: Mónica López DESIGN DIRECTOR: Marcos González WEB DEVELOPMENT: Omar Sánchez COLLABORATOR: Gabriela Mastache COLLABORATOR: Brenda Salas COLLABORATOR: Arturo Mora CIRCULATION MANAGER: Elizabeth Solís DIRECTOR GENERAL: Jeroen Posma

PRINTED BY Foli, Negra Modelo # 4 Bodega A Fracc. Cervecería Modelo, Naucalpan Estado de México T:. 9159 2100

Mexico Health Review 2018

Articles inside

Family-Owned Pharma’s Drug Formulation a Difference Maker

NEW POSSIBILITIES FOR MEXICAN PATIENTS

Access to Healthcare Through Information

Innovation: The Shortest Path to Excellence

Science, Talent Key to Successful Products

Nonprofit Hospital Finds Balance Between Growth, Community Service

Experience-Based Services for Clinical Research

SME Hospitals Join Forces to Strengthen Health Offer

Northern Pharmacy Chain Expands Through Mexico

RISK-SHARING MODEL IN THE FACE OF HEALTH BUDGET CHALLENGES

Foreign Experience for the Mexican Market

A Crusade Against Obesity, Diabetes

Cuernavaca: Cornerstone for Manufacturer’s Future Strategy

Integrating Systems a Key Strategy to Reduce Cost of Ownership

Investing in Technology for Better, Faster Logistics

Prevention Approach for Greater Market Share

The Creation of an R&D Powerhouse

Increasing Service Quality by Optimizing Expenditure

Protect IP to Boost Sector

All Inclusive Ecosystem Would Provide Benefits