“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.
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
Angel of Independence, Mexico City
STATE OF THE INDUSTRY 1
Budget cuts and epidemiological changes continue to characterize the current healthcare industry in Mexico, with a modicum of uncertainty coloring the sector’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 2018’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
8 YEAR IN REVIEW: Changing Health Profile, Aging Population Reshaping Industry
17 VIEW FROM THE TOP: Román Rosales, Minister of Health of Mexico City
18 VIEW FROM THE TOP: Antonio Chemor, Seguro Popular
20 VIEW FROM THE TOP: Jorge Guerrero, ISSSTE
21 VIEW FROM THE TOP: Marco Navarrete, PEMEX
22 VIEW FROM THE TOP: Cristóbal Thompson, AMIIF
24 VIEW FROM THE TOP: Rafael Gual, CANIFARMA
25 VIEW FROM THE TOP: Juan Millán Soberanes, CETIFARMA
26 VIEW FROM THE TOP: Francesca Colombo, OECD
27 VIEW FROM THE TOP: Juan Manuel Sotelo, PAHO/WHO
29 VIEW FROM THE TOP: Enrique Mondragón, CANACINTRA
30 INSIGHT: Ricardo Ramírez, AFAMELA
31 VIEW FROM THE TOP: José Campillo, Funsalud
32 VIEW FROM THE TOP: Viviana Linares, Mexican Pharmaceutical Council (CFM)
33 INSIGHT: Marcos Pascual, ANAFARMEX
34 INSIGHT: Fernando Becerril, AMPPI and Becerril, Coca & Becerril
35 ROUNDTABLE: How Can the Health System Achieve a Maximum Return on Every Peso Spent?
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 improvements have lengthened the lives of Mexicans during the last decades. Today, the life expectancy of a child born in Mexico is almost 77 years, according to the World Bank. Birth rates, on the other hand, have plunged. In the 1970s, a woman generally had an average of 6.8 children, while now she has 2.2. Together, these changes show the country is undergoing a profound population shift, moving from a younger and more productive population to an older one. The next generation will have to deal with a large number of older individuals and all that that entails, including an increase in the costs of care due to palliative services and the need to address more age-related diseases, such as dementia.
Mexico has another significant problem. According to the UN’s Food and Agriculture Organization ( FAO), 73 percent of all Mexicans are overweight or obese. That number breaks down into seven out of every 10 adults, four out of 10 teenagers and one out of three children. Growing obesity rates have translated into more cardiovascular diseases, diabetes and cancer, which now represent Mexico’s largest mortality causes, according to INEGI. Even more worrying is the large number of overweight children. This segment of the population is at greater risk of developing an obesity-related disease earlier in life. “The costs of chronic diseases are much
PREDICTED GLOBAL SPENDING BY DISEASE AREA IN 2020
PREDICTED GLOBAL SPENDING BY DISEASE AREA IN 2020
US$1.4 trillion in total predicted expenditure in medicines by 2020
Source: QuintilesIMS Institute.
higher than infectious diseases, as the former must be addressed for the person’s entire life instead of a few days or weeks,” says Héctor Valle, Founder and Partner at INNOVASALUD.
These problems, of course, are not just in Mexico. Individuals and healthcare systems across the globe are spending a pretty penny addressing obesity-related diseases. A report from the Harvard School of Public Health released in 2016 stated that it takes healthcare systems around the world US$825 billion per year to cover the medical costs of 422 million adults with diabetes. This study states that the number of diabetics could rise to over 700 million individuals by 2025, with care costs for them rising accordingly.
PUBLIC SECTOR BLUES
A larger and overweight population will mean higher medical care expenses; however, in recent years the health sector in Mexico has seen its budgets cut.
In 2018, the International Monetary Fund (IMF) ranked Mexico’s economy 15 th in the world by GDP. However, the country is in last place among OECD countries in healthcare expenditure. Mexico invests only 5.8 percent of its GDP in healthcare, while the OECD average is 9 percent. Moreover, half of that 5.8 percent is paid not by the government or by public institutions, but by patients 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 Competitiveness ( IMCO) has said that during the six 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 networks working autonomously. While Mexican law states that all citizens must be provided healthcare, INEGI says that about 32.6 million people do not have access 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 attending oversaturated hospitals might find a lack of medicines and medical supplies, long waiting times or insufficient specialists, beds or equipment, leading those who can afford it to the private sector. The Center for Economic and Budget Research (CIEP) says that during Peña Nieto’s administration out-of-pocket expenditure in healthcare increased by 120 percent, forcing Mexicans to spend up to 41 percent of their income on healthcare.
INSURANCE GROWTH POTENTIAL
Most of the money patients spend on healthcare goes to pay for drugs, tests, doctors, hospitals and many other services, but Mexicans rarely spend on insurance. The country has one of the lowest insurance penetration rates in the OECD. “Mexico’s private healthcare market remains small in terms of insurance coverage. The country has 120 million inhabitants but there are only 10 million people covered by health policies. Private health insurance remains expensive for many, so the sector is looking for alternatives,” says Luis Francisco Galván, Vice President and Head of Pricing Latin America at SCOR.
Insurers say that Mexicans distrust private insurance, forcing families to de-capitalize in cases of emergency. To 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 of MASZ. Smaller insurance plans represent smaller costs for the individual and lower risk for the insurer, while ensuring that the person is covered in case of developing the disease. Other insurers propose to make insurance products either mandatory or tax free to incentivize individuals to acquire them. Finally, some insurers are pursuing the introduction of Big Data practices to closely monitor the healthcare habits of patients to do better risk estimations that might permit more accurate price projections for insurance.
LOWERING OUT-OF-POCKET SPENDING
Other strategies have directly addressed out-of-pocket expenses in healthcare, like the introduction of generic versions of branded drugs with expired patents. “Our work with generics is one of this administration’s greatest achievements, as these medicines cover 70 percent of Mexico’s main mortality causes and bring about a 60 percent overall reduction in costs,” says Julio Sánchez y Tépoz, Federal Commissioner of COFEPRIS.
Due to their lower cost in comparison to patented medicines, generics have become the drug of choice for most Mexicans. Generics represent 84.1 percent of all drug sales, according to OECD data, but their lower costs translate into smaller margins, as they only represent 49 percent of the medicine market by cost. Nonetheless, generics are a significant business opportunity that continues to grow.
“The pharmaceutical sector sold a total of 985.7 million units with a value of MX$156 billion (US$8.97 billion) between February 2017 and February 2018,” says Rafael Maciel, President of the Mexican Association of Generics (AMEGI). He explains that the growth rate of generics has outpaced that of patented medicines. “During those 12 months, the generics market grew at a 3.9 percent rate and the OTC segment grew by 5.3 percent, while the price market decreased by 1.5 percent,” he says.
Patent expirations will continue driving the generics market, especially in emerging economies. In its report Global Medicine Use in 2020, IQVIA explains that emerging economies, including Mexico, will continue to prefer generics and over-the-counter (OTC) medications over patented medicines.
Mexico invests 5.8 percent of its GDP in healthcare, while the OECD average is 9 percent
The generics market is not without challenges. Current regulations require all manufacturers to fully ensure the efficacy and safety of all medicines in the market. All things being equal, patients prioritize prices, buying the cheapest option available. This makes manufacturers compete on the lowest price, reduce their margins. “In markets like Mexico, where the majority of spending is out of pocket, people seek lower prices but want the same quality,” says Mariano de Elizalde, CEO Sandoz México.
Alejandra Palacios, President of the Federal Commission of Economic Competition (COFECE), however, points out that generics are slow to enter the Mexican market. In 2017, she explained to media that while in the US the production of a medication might start immediately after a patent expires, in Mexico this process usually takes up to two years. Furthermore, current regulations complicate their sales in the case of prescription medication. “Health regulations limit the possibility to substitute a patented medication for its
generic alternative unless the doctor explicitly writes down the generic name,” says Palacios. Generics manufacturers are working to change this to promote the use of these medicines. AMEGI, for instance, is working directly with doctors to address the issue. “Doctors were initially reluctant to prescribe generic medications but we have provided them with enough information to change that initial hesitation,” says Maciel.
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
Another strategy to reduce costs has been proposed by the Association of Over-the-Counter Manufacturers (AFAMELA), which suggests promoting the use of selfmedication for common diseases and those that are easy to diagnose. In early 2018, the association pointed to the MX$43.5 billion spent by the public sector caring for ailments of this kind for 15 million Mexicans and suggested that that money could have been saved by empowering individuals to handle these illnesses on their own.
Many manufacturers see in OTCs a way to grow their market by producing affordable medicines for a larger customer base. Big Pharma has also climbed onto the OTC and generics train. For instance, giant Swiss pharmaceutical Novartis separated its generics and OTC drug portfolio into its subsidiary Sandoz. Other pharmaceutical companies continue selling innovative medicines together with OTCs and generic versions of their own medicines once the patent has expired. “Pfizer is a company of innovation but we also offer Pfizer Vitales in Mexico, our generics line that combines accessible prices
with Pfizer’s quality,” says Rodrigo Puga, President and Country Manager of Pfizer Mexico.
HEALTHCARE: FROM MEXICO TO THE WORLD
Big Pharma has found in Mexico more than a good business environment; it is also a good place to manufacture their medicines. According to ProMéxico, the country hosts subsidiaries of 20 of the 25 largest pharmaceutical 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 US$12.33 billion in medicine production, but since then capacity has been gradually shrinking, dropping to US$9.28 billion in 2017. This trend is expected to change, with Global Insights forecasting a small increase in production in 2018 to US$9.35 billion and growing until 2022, when the consultancy expects the country to reach US$11.26 billion in medication manufacturing.
The global pharmaceutical sector is also experiencing several changes that will gradually impact local manufacturing. The main change is the shift from small molecules toward biomolecules, large chemical compounds manufactured by cell. For instance, 2017’s top-selling patented medication was AbbVie’s biomolecule Humira, which accounted for sales of US$18.43 billion worldwide. The shift toward biomolecules brings both advantages and disadvantages. On the one hand, these drugs are more expensive to research, develop and produce than small molecules; on the other, it is much harder to make generic versions, known as biosimilars. For that reason, patent holders can expect a longer delay between the expiration of a patent
Source: ProMéxico 2018.
and the entrance of a generics competitor into the market, leaving them with a broader sales exclusivity period. For this reason, among others, the market for biomolecules is expected to continue growing, as can be seen in Evaluate Pharma’s forecast for 2024.
Biomedicines are barely permeating the Mexican market, but local players already see their potential. For instance, ANCE, an authorized third party, built a strong business focused on the authorization of medical devices, but the company is increasingly turning to biomolecules. “We are also seeing emerging opportunities in biomedicines. The country has many prospects for laboratories, especially in the case of biotechnological products, due to their complex requirements in comparison to small molecules. For that reason, laboratories are investing in Mexico to develop these medications,” says Abel Hernández, Director General of ANCE.
The problems facing the local drug manufacturing sector have not been extended to medical supplies, a sector that is now booming. Mexico is the largest provider of medical devices in Latin America and the largest provider of the US, according to ProMéxico. In its latest report, ProMéxico affirmed that the sector is expected to continue growing at a 4 percent compound annual growth rate (CAGR) between 2016 and 2020. In 2016, the production of medical devices totaled US$12.7 billion and is expected to reach US$16.52 billion by 2020.
Mexico has built a strong manufacturing base for medical devices, especially in northern states such as Baja California, Sonora, Chihuahua, Tamaulipas, Coahuila and Nuevo Leon. Baja California alone accounts for 50 percent of all exports of medical devices, according to ProMéxico. In recent years, the country has had a positive trade balance of imports and exports, a trend that is expected to continue.
Most of the products manufactured for export are for the medical, surgical, dental and veterinary industries, which
account for 75.9 percent of all exports. These are followed by orthopedic devices with 10.8 percent, respiratory therapy and massage devices at 6 percent and the remaining 7.3 percent by other types of products, according to ProMéxico. Much lower manufacturing costs in comparison to Mexico’s northern neighbor, which is also the largest destination for Mexican medical device exports, has underpinned the segment. According to KPMG and Competitive Alternatives, the manufacture of a medical device is 21.2 percent less expensive in Mexico than in the US, which receives 92.8 percent of all medical device exports, according to ProMéxico. Even though the relationship between both countries is shaky at the moment, the US has been one of the largest investors in the medical devices sector. Between 2005 and 2016, the US invested a total of US$1.61 billion, almost 10 times the amount of second place The Netherlands with US$177 million, according to the Ministry of Economy.
However, as the US is the largest investor in the local industry and the main destination for Mexican exports, there is a cloud looming over the medical devices industry: the renegotiation of NAFTA. “Importers will suffer the most. With NAFTA changes that gave us a zero tariff, we will need to rethink our plans, although we have to wait. Asian products might have advantages attributed to more aggressive prices but the government could continue saying no to the Asian market and only buy from the US and Europe,” says Alejandra Groff, Director General of GMMC.
While some have a more positive outlook on NAFTA renegotiations, others are already looking for opportunities that take advantage of Mexico’s other numerous trade agreements. “Having operations in Colombia, Chile and Peru allowed us to take advantage of the Pacific Alliance, which promotes exchange of workers and products across its member countries. Furthermore, Peru, Chile and Mexico are part of the TPPII, which will allow us to export to Australia, Vietnam, Canada, Brunei and Japan,” says Dagoberto Cortés, Director General of Sanfer.
HEALTHCARE MARKET FACES CHALLENGES, OPPORTUNITIES
The Mexican healthcare sector has faced budget cuts and uncertainty resulting from geopolitical developments, 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, with access to care among the top priorities. Mexico’s large population, changing epidemiological profile and gaps in 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.
MEDICAL COVERAGE
127.5 million people
MX$447 billion
OTHER POINTS:
Warning signs for Mexico: Obesity, diabetes, cardiovascular diseases, lower access to healthcare in comparison to OECD countries and lower health expenditure
54.4% Medicines
16.8% Medical visits
11.6% Hospital services
9% Support goods (soaps, toothpaste, etc)
3.6% Support services (includes private medical insurance)
3.4% Clinical tests and ambulances
1.2% Healthcare centers and residences
Advantages:
Lower tobacco and alcohol consumption than average for OECD countries
OVERVIEW OF HEALTH SYSTEM PERFORMANCE IN MEXICO
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
OECD Percentile 25-75 • Indicators from health at a glance 2017 43.5% Seguro Popular 32.9% IMSS
HEALTHCARE GROWTH RATE THROUGH 2020 MEXICO GDP HEALTHCARE EXPENDITURE BY SECTOR
39.5% Public sector
34.9% Private sector
25.6 Home care by relatives/friends
Government And Compulsory Health Insurance Schemes In 2017 Out-Of-Pocket Expenditure In 2016 Or Nearest Year
EXPENDITURE PROJECTIONS:
Global healthcare expenditure is expected to reach US$8.7 trillion by 2020, according to Deloitte.
The global GDP spent on healthcare is expected to rise slightly, from 10.4 percent in 2015 to 10.5 percent in 2020. (Deloitte)
• Growth is expected to come from more healthcare expenditure in developing countries and expansion of services in developed countries
• Obesity and aging-related diseases continue to raise expenditure for lower and middle-income countries
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 substantial. The institution must look after the health of 127 million individuals while leading all national policy on healthcare matters, coordinating institutions within the National Health Service and managing all healthcare infrastructure, among many other tasks. Even though the ministry has a lot on its plate, its current vision goes even further, with an ultimate objective to implement a universal healthcare system that provides equal, sustainable and integral attention to all individuals, placing special attention on vulnerable groups.
Mercedes Juan López, who was appointed Minister of Health by Peña Nieto in December 2012, set this as her main goal when she was named to the position. “Peña Nieto asks that all Mexicans and medical professionals commit to making effective the right to healthcare protection,” Juan said during her inauguration speech. This was necessary “to achieve an inclusive Mexico without poverty through the consolidation and creation of effective programs that lead to development and equality in the country.” Juan stated that her administration would work toward providing all Mexicans access to basic and specialty care, including surgeries.
When delineating the strategy to achieve this goal, Juan mentioned the challenges of overcoming Mexico’s changing epidemiological profile caused by an aging population and unhealthy habits, such as bad nutrition and lack of physical
activity. Other risk factors she identified were unsafe sex, tobacco, alcohol and illegal drugs consumption and lack of road and workplace safety. Juan also identified three main problems that hindered the state’s ability to provide access to care. The first was the current model of healthcare, focused on curing diseases instead of preventing them. The second was the lack of implementation of multidisciplinary public policies that involve different institutions; to do so it would be necessary to guarantee an efficient coordination between state and federal strategies to ensure that healthcare permeated the action plans of other sectors. Finally, the third challenge was the unequal benefits and the participation of fragmented, vertically integrated institutions that, she said, went directly against the purposes of an inclusive country and prohibited the provision of continuous care through an individual’s entire life.
To address these challenges, Peña Nieto’s National Development Plan 2013-2018 included a set of six objectives for healthcare, clearly delineated in the Ministry of Health’s Sectorial Health Program 2013-2018. The first was to consolidate all actions related to health protection and health and disease prevention. The second was to guarantee access to quality healthcare services to all people. The third was to focus on reducing the infant mortality rate. The fourth was to close healthcare gaps across social groups. The fifth was to guarantee the efficient use of healthcare resources and the sixth was to work toward a National System of
Universal Health led by the Ministry of Health. Within the Sectorial Health Program 2013-2018, Juan stated that this system would be achieved by strengthening regulators and the cooperation among different sectors. This system, she added, would also focus on providing services based on primary care, generating and managing appropriate budgets and promoting scientific research.
These goals were ambitious at the time and they continue to be so despite the progress made on several fronts. Among the Peña Nieto administration’s achievements were strengthening COFEPRIS, Mexico’s regulatory authority for medications, medical devices, foodstuffs and cosmetics, among many other products. This council helped increase access to care through the approval of 540 generic versions of previouslypatented medicines, which allowed the reduction of up to 70 percent in the price of drugs. Moreover, healthcare penetration expanded during that time. While in 2012 only 78.6 percent of the population had health coverage from a public healthcare institution, by 2016 almost 86.6 percent of the population was affiliated to a system such as IMSS, ISSSTE or Seguro Popular, according to ENSANUT 2016.
NARRO TAKES THE HELM
Juan left the Ministry of Health in 2016 and was replaced by José Narro, a surgeon from UNAM with a master’s in communitarian medicine from the University of Birmingham and who continued her legacy. While coordinating the Joint Session with the National School of Medicine in 2018, Narro named as some of the main achievements of the administration the reduction of HIV transmission from mother to child by 40 percent, maternal mortality by 13 percent and dengue by 70 percent between 2012 and 2018. Other achievements, he said, included the introduction of the HPV vaccine to protect girls from cervical cancer. “This country has been lucky with public policy in several programs, otherwise we would not have been able to achieve what we have. A
clear example is vaccination. For over 40 years we have been dedicated to vaccinating the population. There is no rubella or congenital rubella in Mexico, we have controlled diphtheria and tetanus and neonatal tetanus has been eliminated,” Narro told Mexico Health Review 2017.
During his years in office, Narro prioritized fighting chronic diseases as the way to improve care. “Diabetes is one of our highest priorities, but it is difficult to tell which is the most important because there are many, such as cancer and heart disease. When speaking of priorities, I often speak of diabetes because it generates the most deaths as a single cause. Cardiovascular disease may cause more deaths when grouped together but the causes are many and can be split into three main groups: heart attacks, hypertension and others,” said Narro.
Although the Ministry of Health made several significant contributions to improve quality of life and life expectancy during Peña Nieto’s time in office, the administration left several areas that will be addressed during López Obrador’s presidency. “Peña Nieto’s administration has driven the creation of a universal health system. We now need to sit down with IMSS and ISSSTE and figure out a common tab that will allow us to easily exchange services and allow affiliates of Seguro Popular to go to IMSS or ISSSTE facilities,” says Antonio Chemor, National Commissioner of Seguro Popular.
Furthermore, the rate of diabetes, chronic diseases and obesity continues to rise while the sector has also had to deal with a smaller healthcare budget that made Mexico one of the lowest investors in healthcare in the OECD. On Aug. 9, a day after López Obrador was officially named President-elect, Narro called for the future government to increase its healthcare expenditure and to tackle obesity-related diseases. Speaking at the LV Ophthalmology Actualization Course in Mexico City, Narro was frank: “We have a very serious problem,” he said.
Novo Nordisk researcher holds an eppendorf
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 play in promoting prevention and access to care?
A: While it is often said that individuals should be responsible for their own health, it is also the responsibility of institutions like ours to properly educate residents on how to care for themselves. According to WHO, it is necessary to focus on cost-effective initiatives, such as reducing salt consumption, eliminating smoking and replacing saturated fats. In addition to providing care for those who are already sick, it is necessary to ensure that those who are healthy remain so.
The Ministry of Health conducted 3,760,590 consultations in 2017, mostly to address respiratory infections, obesityrelated ailments and psychiatric issues. That year, we performed about 75,000 surgeries, most of them related to obstetrics, followed by appendicitis and accidentrelated-injuries.
Q: Considering the accelerated growth of chronic diseases, what needs to be done to ensure the health system keeps pace?
A: It is necessary to reinforce primary care because the main economic pressure will come from chronic diseases. diabetes, hypertension, hepatic diseases, cardiovascular diseases, addictions and lung diseases are among the ailments that are influenced by lifestyle. It is also necessary to develop a multidisciplinary approach, integrated by medical personnel and trained health professionals, that allows the participation of the individual in his own health. Currently, people can suffer several chronic illnesses at the same time; this is called multimorbidity and requires a holistic approach to patient-centered attention instead of tackling each disease individually.
Q: How are costs related to the growing number of diseases being managed?
A: Strategies to contain budgets include public-private associations, consolidated purchases and integrated services. Consolidated purchases have been a huge advantage as they allow us to buy a large number of products at lower prices. Integrated services include
those for dialysis, hemodialysis, laparoscopic surgery, hemodynamics and blood testing, among many others. The Ministry of Health of Mexico City prioritizes universal, equal and free healthcare for everyone in the city. All our services are free of charge thanks to two budgets: the federal and the local. These services are free not just for residents of Mexico City but also for people visiting the city.
Q: What progress has been made to achieve universal healthcare?
A: Mexico City Health Law specifies that in the CDMX “inhabitants, regardless of their age, gender, economic or social condition, ethnic identity or anyone else, have a right to health protection, which will be governed by the principles of universality, equity and gratuity.” The principle of universality emphasizes that coverage of health services must respond to people’s health needs and the principle of equity establishes the obligation of local authorities to guarantee access to health services to the inhabitants of the city and free of charge, as is set out in the regulations. By being affiliated with both modalities of federal and local financing, the benefits for the population are strengthened and out-of-pocket expenses are avoided.
For this reason, SEDESA provides diagnostic, healing and rehabilitation services at no cost for the first and second level of attention to the population that has no access to social security through an employer. The "physician in your house" includes general and specialty consultations. SEDESA also offers services related to dental and other areas related to health, such as laboratory studies, cabinet and x-rays, therapy sessions rehabilitation, attention for immediate childbirth and puerperium, the management of the newborn, the performance of surgical procedures, hospitalization, emergency care and the prescription of medicines.
Ministry of Health of Mexico City (SEDESA) is the government organism responsible for providing access to care for all city residents. It aims to improve the quality of life of residents through preventive campaigns and timely medical intervention
INCREASING SERVICE QUALITY BY OPTIMIZING EXPENDITURE
ANTONIO CHEMOR
National Commissioner of Seguro Popular
Q: How has Seguro Popular reinforced its mission since its creation in 2004?
A: We have made four important changes. The first is that states now have five working days to transfer the money that goes to the health sector. The second important change is how the money is transferred, which is done partly through state finance ministries and partly through the federal treasury. We started using this method with 30 percent of the total money allocated and in 2018 we will boost the amount transferred this way to 50 percent of the MX$54 billion that states are expected to receive. States do not have direct access to the money but must go through a digital platform, which prevents them from using the money for other purposes. The third important change in the law is related to economic compensation. Seguro Popular was localized in the country’s 32 states but the changes have allowed the agency to become national. A fourth change in the law relates to transparency and accountability.
In 2016, Seguro Popular spent MX$2 billion in affiliation and re-affiliation programs to detect people who do not have medical coverage
Seguro Popular pays a premium to guarantee attention to the three largest portfolios that we manage. The first is the Universal Catalog for Health Services (CAUSES) and includes 1,663 diseases. The second portfolio is catastrophic expenses, which includes 61 diseases that tend to be the most expensive and most complex. The third portfolio is Medical Insurance XXI Century, which includes diseases that impact children up to 5 years old. The premium for this year is MX$3,123.99 per person, a figure that is updated according to the country’s inflation rate. In 2016, the premium was 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 to cover the 54 million Mexicans that are affiliated with Seguro Popular.
In the past, we had problems because the states did not contribute economically. To address this, in 2017 we forced states to provide at least 30 percent of their state contribution and, additionally, states must provide proof of having received and spent federal resources on health services. If a state is not able to corroborate that they spent the money on health services, then they no longer receive funding. The second condition is that they must comply with economic compensation requirements.
Q: Seguro Popular has prevailed through three administrations. What has been the key to its success?
A: We have achieved transparency and accountability regarding the resources that are sent to the states, which in 2017 totaled MX$68.7 billion. In 2016, we began to work intensively on quality and implemented a program of health managers that includes 1,576 individuals working in the medical centers and acting as a link between Seguro Popular and affiliates to guarantee their rights. According 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 successfully reduced the number of registered affiliates. In 2014, we had over 57 million Mexicans affiliated. Between 2016 and 2017, we reduced the registry to approximately 54 million Mexicans. Peña Nieto’s administration has also driven the creation of a universal health system. We now need to sit down with IMSS and ISSSTE and figure out a common tab that will allow us to easily exchange services and allow affiliates of Seguro Popular to go to IMSS or ISSSTE facilities. This is something that needs to be consolidated in the next presidential administration.
Q: Are there any plans to generate exchange services, not only with public institutions but with private health service providers?
SEGURO POPULAR AFFILIATES (million)
Source: INEGI
SEGURO POPULAR AFFILIATES (MILLIONS) Source: INEGI
A: Those states that have weak health-related infrastructure and that cannot cope with the number of patients they have are authorized to hire services from private hospitals. For instance, Hospital Puerta de Hierro in Nayarit, which is a private hospital, is subrogated by the Health Ministry of Nayarit. I hope we continue to have the opportunity to participate with private hospitals, but I believe that the consolidation of the public health network must be a priority.
Q: What technology strategies are you implementing to increase coordination among hospitals?
A: Among the commitments that then presidential candidate Peña Nieto agreed to was the creation of oncological hospitals, which have been built in states such as Tamaulipas, Coahuila, State of Mexico and Quintana Roo. However, we are also building hospitals in other states, such as Baja California Sur, Guerrero and Oaxaca. The lack of specialist doctors has led us to embrace technology. We have found that some people from small towns stop going to doctors or taking their medicines because they do not have money to make a trip to the city. For this reason, we are heavily supporting technological innovations like telemedicine projects that will allow specialists to provide consultations to patients in small towns.
Q: How is the institution ensuring the welfare of patients with diseases like HIV and cancer when dealing with budget cuts?
A: In 2016, our budget was reduced to MX$75.4 billion and in 2017 it fell to MX$68.7 billion. When looking at the total number of people that Seguro Popular, IMSS, ISSSTE, SEDENA, ISSFAM, ISSEMyM and other social security institutions attend to, we can see that almost the entire population has health coverage. It is our belief that the new administration should not cut the budget for health services.
Q: How does Seguro Popular guarantee a fair distribution of the concessions in tenders?
A: We do not buy things per se; we give money to the state and the state concludes the acquisitions. However, we have put in place certain conditions to make sure that there are no abuses. For instance, with medicine, we set a maximum price that we get from IMSS’ consolidated purchases. We have put in place a system that detects when a state makes a purchase above the reference price and automatically alerts that state. This also happens with human resources. The system detects whether there are duplicated names on a payroll. This has allowed us to control the money and to guarantee that there are no abuses.
Q: What has Seguro Popular done to generate awareness and attract those segments of the population that do not have coverage from other institutions?
A: In 2016, we spent MX$2 billion in affiliation and reaffiliation programs aimed at detecting the open population, or people who do not have medical coverage from any institution. Still, I believe the public sector can provide health coverage for the entire Mexican population. There might still be a small number of Mexicans without access to health services, so we will continue with our campaigns to convince people who do not have coverage to affiliate with Seguro Popular.
Q: What is Seguro Popular doing to promote prevention, especially related to chronic diseases?
A: Every year, we force states to apply at least 20 percent of what they receive to prevention. This means that almost MX$11 billion each year is spent on health promotion and prevention. The Deputy Ministry of Health Promotion and Prevention of the Federal Ministry of Health sets the guidelines and the programs that states must enact.
Seguro Popular is a health institution created in 2004 with operational, administrative and technical independence. It offers health coverage through public or private infrastructure to the informal sector
IMPROVE THE FUTURE WITH INFORMATION AND PREVENTION
JORGE GUERRERO Medical Director of ISSSTE
Q: How is ISSSTE caring for patients with rare and chronic diseases?
A: Chronic-degenerative diseases are the main causes of death in Mexico. In this area, the institute focuses on prevention, damage control and healing care. Rare diseases are highly expensive to treat. However, ISSSTE is a pioneer in their treatment as it dedicates budgets to diagnose and address them. The institute has a group of experts who diagnose and treat these diseases in our specialist hospitals.
Q: What long-term policy is necessary to address Mexico’s chronic diseases?
A: It is necessary to continue the implementation of prevention campaigns that provide information about the consequences of unhealthy habits, since many chronic diseases can be avoided with adequate prevention. For example, ISSSTE has campaigns against smoking, a habit that reduces life expectancy by around 15 years and influences the most chronic ailments like diabetes, hypertension and cancer. We have been a pioneer in the development of 155 clinics to help smokers quit. These clinics are distributed in all 32 states. The therapy starts with an explanation of why addiction is a disease. We then offer treatment to help the patient quit smoking. The attention we provide is first class and comparable with any in the world.
Q: Is ISSSTE working on other prevention initiatives for chronic diseases?
A: ISSSTE has led prevention efforts throughout the country. For instance, all our clinics and family medical care units have a unit called Preven, which promotes care before individuals become ill with chronic diseases. Our child development units, for example, care for our workers' children until they turn 6. These units have an overweight rate below 2 percent, which was achieved thanks to the
The Institute of Safety and Social Services for State Workers (ISSSTE) is the second-largest of Mexico’s public health institutions, providing health and social services to almost 13 million government workers
comprehensive programs that include the support of a doctor, a nurse, a dentist and the consulting services of a nutritionist. These units also develop physical activities that help children stay active. We want to raise awareness about the dangers that unhealthy habits can represent for health.
Q: How can ISSSTE keep costs low while providing comprehensive care?
A: Mexico has had privileges in the acquisition of medicines generated by consolidated purchases, a model that began in 2012 and has been followed by other institutions. Although this model has been working successfully, in the case of patented medications it is necessary to negotiate with the manufacturer. The institution also plans to explore other options to acquire medicines, including the pay-perresult model. Nevertheless, the regulations have to be clear to ensure objectivity in the interpretation of the results.
Q: How does ISSSTE invest in cutting-edge technology?
A: It is possible for ISSSTE to acquire the latest technology through the implementation of integrated services, like the installation of equipment for hemodialysis, endoscopy, minimally invasive surgery, cardiovascular surgery and general anesthetics. This model allows us to offer our members the best treatments.
Q: Many CROs are interested in working with ISSSTE. What should they do to achieve this?
A: Collaboration with CROs is possible thanks to Fundación ISSSTE, which was created in January 2017. New agreements will permit clinical research on products that have a sanitary registration but are not part of ISSSTE’s basic list.
Q: What are your priorities for 2018, considering the change in the federal administration?
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 should continue beyond this administration as ISSSTE belongs to its workers. ISSSTE has proven its quality and its capabilities as an excellent provider of care and a good buyer of medical supplies.
GENETICS FOR CUSTOMIZED HEALTH SOLUTIONS
MARCO NAVARRETE
Deputy Director of Health Services at PEMEX
Q: In 2017, you said your priorities were to promote preventive care and to make doctors available in the workplace. How has this played out?
A: PEMEX continues to emphasize prevention as one of its core priorities, but we have taken a different approach to our idea of having doctors in every workplace. PEMEX wants to boost health from a productivity perspective, which means that we will measure health by the impact it has on the company’s performance. PEMEX has 1.5 beds per thousand people while the average at other health facilities is 1.9 beds. However, PEMEX does not have a shortage of beds as our hospitals have a 65 percent occupied capacity. This means our affiliates are not hospitalized as often as the average population thanks to our focus on preventive medicine and productivity. PEMEX does not want to build more facilities, it wants healthier people.
Q: What are the advantages and limitations of PEMEX’s new approach to health?
A: The PEMEX Health Unit is measured differently than other systems, such as IMSS and ISSSTE. Health services are based on financial indicators but this does not mean that PEMEX seeks to reduce its cost per capita related to health. The indicators are designed to measure how the cost per capita is invested and the effect it has on labor productivity; therefore, each financial study carried out promotes the most profitable opportunities, which helps PEMEX to save in the medium and long-terms. The PEMEX population is genetically related because when oil was nationalized in 1938 the oil zones were almost uninhabited and without infrastructure. PEMEX invested in the generation of communities with schools, hospitals and other services. As a result, the company has an inbreeding gene that makes its population susceptible to certain diseases, like the prevalence of diabetes, which at 17 percent is twice the national rate.
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 the future because 26 percent of its population is over 65 years old. However, the company’s life expectancy is 84.5, higher than the Mexican average. Also, the Health Unit
registers greater average diabetic control by having around 33 percent of our patients at lower biological parameters. We have achieved standards similar to those in Europe with a strategy based on results and the consolidated purchase of medicines. Our clinical practices comply with CENETEC regulations and we invest heavily in the training of our health workers, with approximately three courses per year. PEMEX’s objective is to generate a complete ecosystem that promotes an integral health model.
Q: PEMEX handles a significant and reliable amount of health data. How is this used to contribute to the health sector?
A: The PEMEX magazine Medical Journal is available to the public online. Within the health unit, we carry out two daily video conferences with all our members to discuss the topics included in the magazine. We want our magazine to be known across the health industry. In addition, we want to share our health approach with the industry by providing a message that touts strategic investment and prevention models. All our actions are oriented to investing in the management and control of diseases so that our employees can enjoy a good quality of life and maintain their productivity.
Q: ACROM and INMEGEN will conduct clinical studies and research with PEMEX. What is the project’s goal?
A: PEMEX’s working population is characterized by endogamic genes and this information is stored in our Electronic Medical Records (EMRs) database. From that database, we have selected around 500 patients from all over the country who we will study to map the genetic profile of our oil workers. PEMEX expects to include another 500 people in the study by the end of the year. As a result of this study, we hope to purchase precision drugs to better manage diseases such as diabetes and hypertension.
Petróleos Mexicanos (PEMEX) is a productive enterprise of the state that produces, transports and refines oil and natural gas in Mexico. Its Health Services Unit offers medical assistance to PEMEX workers, retirees and their families
INCREASING ACCESS THROUGH NEW FINANCIAL MODELS
CRISTÓBAL THOMPSON Executive Director of AMIIF
Q: What new alliances is AMIIF developing to promote access to innovative medicines in Mexico?
A: The association has done significant work in creating alliances with other business groups in the country while also joining business councils like COPARMEX and CONCAMIN. In December 2017, AMIIF signed an agreement with the Government of Queretaro that will address access to market.
This agreement has three goals. The first is the generation of data on the impact of health on productivity and competitiveness in the state, following the line of work we did in the Automotive Cluster of Guanajuato. The second is to foster R&D and clinical research investment in the state. To achieve this, Queretaro is now analyzing its capabilities in terms of researchers and research units. The third is to generate innovative access models so public institutions can increase the services they provide.
The agreement with the Government of Queretaro came after many meetings to understand the state’s vision for the industry. Once the objectives were established, we formed a working group to determine how to measure the state’s productivity. We have also signed similar agreements with the Autonomous University of Nuevo Leon ( UANL) and in 2018 we hope to incorporate one or two more states through similar agreements. We are looking for states that are willing to prioritize healthcare and bet on clinical research, innovative payment models and competitiveness. So far, Morelos and the State of Mexico have contacted us.
Q: What are the main areas of opportunity when introducing these models into the public sector?
A: Within AMIIF, we noticed that access to innovation remains below 10 percent. Innovative medicines have many positive benefits, but patients must have access. We are promoting a new payment model wherein institutions would pay for positive results instead of units, which would require the monitoring of the patient’s condition throughout treatment and an accurate diagnosis of the outcome.
IMSS has been extremely welcoming and the institute is greatly interested in incorporating these new models. Once this agreement is finalized, we will document it and try to implement it in other public institutions. Some years ago, the industry was completely unwilling to discuss new payment models, but it is increasingly welcoming these as a strategy to address the lack of access to medications. Now that the industry is willing to adopt these models, the challenge will be properly monitoring patients to measure the results.
Q: What role will technology play in measuring the outcomes?
A: We need public institutions to define the type of information they need to measure results. Once we have that, we can determine the areas to measure. Potential measuring strategies might involve wearables or phone calls, but this will completely depend on each agreement. Once institutions are ready to incorporate the model, pharmaceuticals will have to analyze how to provide them with an integral solution, for instance by allying with technology providers. Global pharmaceutical companies have invested significantly in technology and have created many international partnerships so they may be well-positioned to monitor patients in Mexico.
These payment models are already being used in Mexico but in a very limited fashion. It will take approximately two more years for them to be truly relevant in the market. The main barrier is to develop and implement a way to measure success, which is very important. Mexico is a pioneer in the incorporation of these models in Latin America.
Q: How will the incorporation of the monitoring technology be financed?
A: While the expense may seem large at the beginning, once the agreements are finalized it will be justified because the result will be the development of predictable models for medical care. Also, the information generated and collected can be applied to other areas of medical 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.
Q: How can these models be used to finance payments in the private sector?
A: While COFEPRIS has made innovative molecules available for purchase in Mexico, there is little access to these medications at private institutions because insurance penetration remains low. We have discussed strategies with AMIS to help pharmaceuticals get closer to insurers so that together they can develop new models to improve access.
Q: How is the Mexican pharmaceutical sector adapting to technological changes?
A: New companies entering Mexico will have a deep impact on the existing pharmaceutical environment and redefine the rules of the game. AMIIF’s agenda is now beginning to incorporate digital health as we are certain that this area will play a significant role in the future. Our agenda for this year mentions digital health without too many details. We are still analyzing the impact that digital health could have on the sector and generating a preventive strategy to adapt.
In 2018, we will focus on identifying and speaking with the new players entering the sector to determine which areas will change. This will not be easy as the industry fears change. For instance, it took many years for AMIIF to incorporate ACROM and CROs. AMIIF is analyzing how to create a forum to give players a voice and to catalyze new agreements. We participated in the First Week of Digital Innovation and we are trying to create an innovation week that incorporates all players in the healthcare sector.
Q: How are AMIIF’s companies adapting to the uncertainty created by the renegotiation of Mexico’s trade agreements?
A: All industry members are closely following the modernization of NAFTA with full understanding of its complexity. Furthermore, the industry is looking beyond NAFTA to other agreements, such as the TPP11. AMIIF companies have been operating in Mexico for 80 years and the strategies they are incorporating now were developed in the early 2000s. The strategies developed 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 strategies rather than short-term considerations. Mexico is very attractive for the pharmaceutical sector due to its large population and many trade agreements.
Access to pharmaceutical innovation remains below 10 percent
AMIIF follows a long-term plan that we began implementing four years ago and we are only now seeing results. We will follow this plan until 2024. It is not possible to advance quickly in this sector as it moves slowly. Both private companies and governments need to understand this.
Q: What is AMIIF’s strategy to increase the competitiveness of the pharmaceutical sector?
A: Our strategy rests on three axes. The first is to measure the value of pharmaceutical innovation. The second is making healthcare a priority for the country by creating awareness of its direct relationship to productivity and competitiveness. The third is developing strategies in which the pharmaceutical sector can contribute to the country’s finances. We are analyzing how finances can be improved to give the public healthcare sector more resources by allying with the private sphere. There is a large opportunity to use the latter to increase resources in the public arena.
Q: What other areas are priorities for AMIIF?
A: We are targeting clinical research because processes must be improved to make approval times competitive with other countries. This area has improved significantly and many players, including COFEPRIS, ProMéxico, CONBIOETICA, ISSSTE, IMSS, federal hospitals, national institutes of health and many companies are working to shorten approval times even more. All the industry groups we have met with agree that this is a priority area to attract investment to Mexico.
A significant project in which AMIIF is participating addresses antimicrobial resistance, a critical area that is expected to cause 10 million deaths by 2050. AMIIF has joined an alliance that brings together companies from 100 countries, including the pharmaceuticals, generics and medical devices segments. The pharmaceutical industry is taking a leading role in the prevention of bacterial resistance and has invested about US$2 billion to date. While the industry is extremely invested, it needs the support of governments and other players to address this looming problem.
The Mexican Association of Pharmaceutical Research Industries (AMIIF) brings together the main pharmaceutical companies that focus on the development of innovative medicines. The association now incorporates 40 members
A STRATEGIC SECTOR FOR THE DEVELOPMENT OF MEXICO
RAFAEL GUAL Director General of CANIFARMA
Q: What advances have been made in the contract between IMSS, CANIFARMA and COFEPRIS to facilitate clinical research?
A: The plan is moving forward. We continue to work on several projects, although not as many as we would like. But we have brought more research into the Seguro Social than ever before. The potential is very high as we could do almost 10 times as many projects than what we are doing right now. Along with the universal trends in research, the priority areas are chronic diseases, diabetes, cardiovascular disease, neuroscience and cancer.
Q: CANIFARMA has several goals for 2020 in areas that include sanitary regulation, research and innovation and economic development and industry policy. How are you working in each area?
A: I believe we have moved forward in many fields. We are working to elaborate the Program of the Pharmaceutical Industry Development (PRODIF) 2019- 2024 and the main factors are the same as PRODIF 2013-2018, but with a different order of priorities. For this new plan, the right to healthcare is the priority, especially as it relates to access to new technologies and research and the adoption of new therapies. The second axis is innovation and research. The third is industrial policy and the fourth, regulation. It is not that we are diminishing the importance of regulation but because we have made progress on this topic we decided to focus our attention in other areas.
The Ministry of Health recognizes the pharmaceutical sector as for the Mexican economy. We have been waiting for a joint declaration from the Ministry of Economy and the Ministry of Health that highlights the importance of the industry. This will open many doors with CONACyT, ProMéxico and Bancomext that will result in fiscal stimulus, just like in other strategic sectors. The priority is to become
The National Chamber of the Pharmaceutical Industry (CANIFARMA) works to develop the industry in Mexico with three main objectives: sanitary regulation, research and innovation and economic development and industry policies
the clinical research hub for Latin America, and for that we have an enviable infrastructure.
Q: The CANIFARMA Award 2017 was awarded to a study that showed Transkrip, a cervical cancer drug, can also be used to treat skin lymphoma. How is the chamber promoting the submission of projects like this?
A: In general, the award is promoted by word of mouth. It has been around for many years and every year we receive projects that are more oriented to practical applications. Now, we are seeing projects that have industrial and social benefits and applications. We also want to organize an innovation fair to connect those researchers who participate in the award with pharmaceutical companies, thus fostering direct applications.
Q: Thanks to new guidelines, pharmaceuticals can advertise their products on TV, radio and in print. How will this impact the industry?
A: Companies might disagree with my opinion but the new COFEPRIS guideline homologating the advertising regulation regarding personal hygiene products with that for antibiotics and antivirals does not respect several legal dispositions of the General Health Law. A company that eventually applies this guideline could be breaking the regulatory rules. As a chamber we are going to promote a nullity trial because if a judge rules that the guideline is correct, this will work as a defense for the pharmaceutical company in any situation.
Q: What is the view of the chamber’s members regarding the NAFTA renegotiation?
A: This is an area in which the pharmaceutical industry is not greatly impacted. There are many pharmaceutical companies established here. Moving a pharma plant entails 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 origin. All countries agree that a tax change related to pharma is not viable. The impact of NAFTA on the pharma industry in Mexico will be related to the impact on the overall economy of the country.
PREVENTION AND COMPLIANCE FOR THE HEALTH INDUSTRY
JUAN MILLÁN SOBERANES
Director General of
CETIFARMA
Q: As a self-regulatory authority, how does CETIFARMA contribute to Mexico’s healthcare?
A: The ethical principles that should lead the pharmaceutical sector are universal, as patients should receive the same treatment anywhere in the world. One of our main goals is to make sure that all volunteers are safe and that studies never incorporate vulnerable people. The core of any selfregulatory authority lies in prevention and compliance. The pharmaceutical industry produces goods that are essential for the population and it is necessary to guarantee that all the products comply with the highest production standards. This is even more important in the case of vaccinations. Vaccine manufacturers must ensure that Mexico’s vaccination rate stays between 90 and 95 percent as part of a federal effort to guarantee access to vaccines for all Mexicans.
Q: How would you describe CETIFARMA’s contribution in the development of safe medications?
A: CETIFARMA bases its actions on three axes. First, develop ethical codes for pharmaceutical companies to ensure that all products follow national and international quality standards. Second, CETIFARMA’s self-regulation system guarantees that the interactions of pharmaceutical employees with patient associations and medical institutions follow ethical principles. The third axis is monitoring compliance and notifying deviations to infringers so these can be corrected. If the deviation is not corrected, we impose sanctions. CETIFARMA’s role is to complement regulatory authorities, not to substitute them.
Q: How does CETIFARMA guarantee that its internal guidelines adhere to the current needs of the sector?
A: CETIFARMA is a Council of Ethics and Transparency that comprises eight independent members from the pharma industry and ensures that all its operations follow the organization’s code. CETIFARMA closely adheres to the principles of impartiality, zero conflicts of interest and constant interaction with authorities, medical institutions and businesses. In 2007, we signed a consensus framework entitled Commiment for Transparency that brought together the will of the Ministry of Health, IMSS, ISSSTE, the
National Academies of Medicine, Nursery and Pediatrics, the National Association of Private Hospitals, UNAM and IPN’s medical schools, the medical college, the pharmaceutical industry and CONBIOETICA.
Q: How will CETIFARMA’s alliance with ACROM influence the implementation of clinical trials in Mexico?
A: CROs manage clinical trials performed with both healthy and sick volunteers. For that reason, it is necessary to closely monitor them to identify any adverse effects. To do so, it was necessary to ensure that CROs adhere to the same ethical principles as pharmaceutical companies by following three strong standards of patient recruitment. First, ensure that volunteers are well-informed about the risks and benefits of participating in a clinical trial. Second, volunteers must sign their informed consent to participate in that clinical trial. Finally, the CROs should provide care to those patients who suffer any adverse effect during the trial. Alongside ACROM, we created a new best-practices code in February 2018 and CROs will provide us with information about their clinical trials. The standards we follow were created by the International Federation of the Pharmaceutical Manufacturers and Associations (IFPMA).
Q: What is CETIFARMA’s role in the development of national and international policies?
A: As part of the Asia-Pacific Economic Cooperation (APEC) forum, CETIFARMA has contributed to the generation of an ethics code for the region. We are also part of APEC’s working group, where we share our progress, challenges and solutions for the rest of Latin America.
The Director of CETIFARMA is the only Latin American member of the Ethics and Compliance Professionals (ETHICS) Forum based in France. This forum is in charge of improving systems for regulating ethics.
CETIFARMA is an organization with management autonomy, responsible for drafting, promoting and verifying the application of and compliance with codes of ethics and instruments of self-regulation and self-control
UNIFORM SYSTEM WOULD SPUR ACCESS, BETTER HEALTH MANAGEMENT
FRANCESCA COLOMBO
Head of Health Division at OECD
Q: The OECD has recommended more structural changes for Mexico. How should the country approach health reform?
A: The OECD’s 2016 review of the Mexican health system suggested that the greatest challenge for the country is to create a more equitable, efficient and sustainable system because IMSS, Seguro Popular, PEMEX and ISSSTE provide the population with care of different quality, accessibility and results. Having a more uniform health system could help people have better access to medical care and help government better manage the health of its population.
Q: In the last Getting it Right report, the OECD highlighted several structural reforms the country has managed. How can the private sector get more involved?
A: Mexico’s spending on health is lower than most OECD countries as the 5.8 percent of GDP allocated to health is the third-lowest share across OECD countries, and much lower than the OECD average of 9 percent. From the point of view of health financing, the private share of health spending is also large – 41 percent of total health spending comes from out of pocket household expenditures, signaling low financial protection for individuals and the need for improved coverage arrangements. As to service provision, the private sector should not be seen from a negative point of view as it can play an important role in delivery of services to the population. The challenge for Mexico would be to improve the provision of services toward a model in which all providers cater to the needs of the population regardless of their affiliation to a particular institution.
Q: Mexico has the OECD’s highest rate of obesity and related disease. What further political action can be implemented to face this problem?
A: The only way to address obesity is through a comprehensive set of multisectoral policy interventions
The Organization for Economic Co-operation and Development (OECD), created in 1961, aims to be a forum to facilitate and coordinate policy on economic, social and environmental matters
because the determinants of obesity are multifaceted and complex to tackle. Mexico already has an ambitious National Strategy for Prevention and Control of Obesity and Diabetes. This could be further strengthened, for instance, the national health program should include interpretative nutrition labels.
Q: Taxes on sugary drinks and foods have not yet proven to reduce their consumption. What is your view?
A: Taxes on food and drinks are used to encourage people to improve their attitude regarding certain consumption, but it is also important that these strategies are accompanied by other measures like education, schoolbased intervention, food labelling, regulation on advertising, primary-care interventions and so forth. A package of intervention is needed to tackle obesity. In addition, the Mexican government should take into account the specific objectives it wants to achieve in terms of public health.
Q: What measures would you suggest to improve healthcare access in Mexico?
A: Mexico has made many efforts to improve access to medical care but more interventions are still needed, especially in terms of structural inefficiencies and inequities of the system. One of the greatest challenges that Mexico faces is to improve the organization of the health sector to reduce its fragmentation. In addition, it is important to improve prevention and public health services. Prevention is everyone’s responsibility.
Q: How can technology help improve access to care, especially in hard-to-reach regions?
A: The role of technology is revolutionizing the health industry. Today it is possible to leverage Big Data to enhance disease surveillance, generate public health data, 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 tremendous potential to improve the clinical management of health, reduce health risks, and make health systems more efficient. Technology is filling gaps and improving access to and implementation of health services.
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 in Mexico?
A: The specific objective of WHO and PAHO is to cooperate with national authorities to attain the highest possible level of health and to promote the creation of strategies in line with the 2030 Agenda for Sustainable Development that benefit the health of the population. In Mexico, the biggest area of concern that we have identified is noncommunicable diseases. Diabetes, obesity and diseases related to tobacco consumption are the most critical.
National and international data clearly indicates that Mexico is undergoing a diabetes epidemic, with 15.9 percent of its population suffering from the disease, while on average OECD countries barely reach the 7 percent threshold. This is a clear result of bad eating habits. Kids are also facing this danger as one in every three children is overweight. Tobacco adds risks of other noncommunicable diseases, like cancer and cardiovascular diseases, to the detriment of the population’s life expectancy.
Q: What actions should Mexico take to alleviate both obesity and tobacco consumption?
A: The country has made the courageous decision to declare overweight and obesity as national health emergencies, allowing for an increase in taxes on sugary drinks, for example, as well as banning the use of specific advertising elements that promote the consumption of candy and junk food by kids. Taxes are an important tool to de-incentivize the consumption of tobacco and sugar. Although the law states that closed environments should be 100 percent smoke-free, it is not being respected.
Q: What improvements could further advance the country’s health system?
A: Mexico’s health system should adopt strategies 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 hand in hand with health promotion because if it is properly implemented, kids can then provide a way to reach parents and help raise awareness in relation to health issues.
Q: How can universal access and coverage be implemented in Mexico?
A: Ideally, universal health coverage and access should be guaranteed by the health system and should be provided by the public sector. My initial recommendation is to delink employment status from access to healthcare. Anyone requiring health services should not need to have a job to access the care that is needed. This is even more important in Mexico, where the job market is precarious and the number of workers in the informal sector is growing.
Universal health coverage and access is not in conflict with the private health sector. It means that the public sector has the responsibility to ensure that everyone has access to people-centered, timely, high-quality healthcare. Meanwhile, the private sector should operate according to the existing regulatory framework and services at an affordable price.
Q: To which areas should Mexico direct investment in its health system?
A: Mexico is investing about US$200 per capita in the first level of care, which is a very low amount. An increase in health expenditure on the first level of care is difficult to implement because it usually implies a decrease of investment in the second and third levels, which is where hospitalization and other specialized care is carried out. However, we must remember that taking care of the population at the first level reduces the need to spend money on the second and third levels of care, and this in turn results in more benefits for the population. For people to see the advantages of a stronger first level of care it is critical for public institutions to work closely with communities and the population in general, so they can understand the direct benefits they can get from a higher investment in the first level of care.
The Pan American Health Organization (PAHO) is the specialized health agency of the inter-American system and has been affiliated with the World Health Organization (WHO) since 1949. It is a UN agency
CONACYT researcher prepares a sample
A KEY PLAYER FOR INDUSTRY DEVELOPMENT
ENRIQUE MONDRAGÓN President of CANACINTRA
Q: What impact has COFEPRIS’ deregulation of medical devices had on its operations?
A: Deregulation has impacted more than 2,000 products, which represents a release of MX$5.4 billion; that is, a reduction in the deregulatory box of 16 percent. For CANACINTRA, the most important element in the deregulation process is that it allows the commission to focus its resources on the attention of other regulated products, reducing the response times in the procedures to which many devices, products and medicines are subject. The prompt attention drives the development of this important industrial sector, which is strategic for the national economy because it generates exports worth US$3.6 billion.
Q: What are the biggest challenges facing the medical devices and medicines sector and how does CANACINTRA support these sectors?
A: The biggest challenge facing the medical industry is to comply with a very strict regulation that is on par with that in the most important markets worldwide. Unfortunately, not having international approval or recognition agreements on medical devices, national industrialists must face very long procedures in each country to which they intend to export. This limits the growth potential of exports. For this reason, we consider it essential to follow the roadmap proposed by ProMéxico, where medical devices are considered a strategic sector for the national industry, and to provide support to industrialists with international certifications and effective promotion abroad. CANACINTRA has carried out several commercial missions to bring the entrepreneurs of the sector closer to foreign markets, mainly with our partners in the Pacific Alliance, where we see a great business opportunity.
Q: What does Mexico need to be more competitive globally?
A: To raise the competitiveness levels in Mexico, it is necessary to work on the internal agenda: in matters of regulatory 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 regulations of the National Anticorruption System is essential to ensure transparency controls on the use and allocation of public resources, both for institutions and for private sector
players that participate in bidding processes. Members of the private sector work very closely on these issues with institutions such as the Ministry of Public Administration and local authorities to establish agreements for transparent operations in which the private sector participates in public resources, such as procurement or tenders.
The strengthening of the domestic production market, based on reindustrialization, is another key element to increase national competitiveness. For CANACINTRA, the industrial policy must be articulated with monetary, fiscal and economic policies.
Q: How would CANACINTRA describe the manufacturing capabilities of Mexico compared to the rest of the world?
A: The first comparative advantage is geopolitics. Currently, North America is the most competitive region in the world due to the commercial exchange that takes place between Mexico, the US and Canada, as well as with the rest of the world. In the case of Mexico, this means that it has the material and logistical capabilities to participate successfully in global value chains. Thanks to the experience acquired during the last two decades, Mexico is a leader in innovation and processes in Latin America. The north and Bajio areas add 389 first-generation industrial parks and more than 100 clusters dedicated to diverse industries, from automotive to aeronautics.
Clusters and triple helix alliances are generating high-quality and low turnover jobs to attract local talent. There is also a consolidated structure where there are certified SMEs that generate intermediate and final world quality goods. Mexico has manufacturing capacities with high added value. Also, working conditions in Mexico are a global competitive advantage thanks to labor peace and the important steps on which we have advanced.
The National Chamber of the Transformation Industry (CANACINTRA) is an autonomous institution with its own legal autonomy, composed of industrialists from Mexico. It acts as a consultant for the federal, state and municipal governments
OVER-THE-COUNTER ALTERNATIVE EMPOWERS PATIENTS
RICARDO RAMÍREZ Executive Director of AFAMELA
Shrinking budgets and the increasing cost of care are growing concerns throughout the Mexican healthcare sector. The Association of Over-the-Counter Manufacturers (AFAMELA) proposes the use of over-the-counter (OTC) medication as a strategy to allow individuals to take charge of their health and at the same time mitigate costs throughout the industry. “OTCs are easily accessible and can be used to treat nonserious symptoms, allowing patients to empower themselves to manage their care. For that reason, it is important to provide more information to the population on what symptoms can be treated with OTCs,” says Ricardo Ramírez, Executive Director of AFAMELA.
OTCs are medications that do not require a doctor’s prescription for its sale, but all have been approved by COFEPRIS to guarantee their quality, efficacy and safety. As Ramírez explains, some of these products have been in the Mexican market for more than 100 years, so their side effects are well known. Founded in 1985, AFAMELA represents manufacturers of OTCs and promotes their use for the most common conditions. AFAMELA acts as the voice of its 22 members, which include both local and international pharmaceutical companies.
AFAMELA works closely with all players in the sector but it has a very specific mission. “Our agenda is different from that of other pharmaceutical associations. AMIIF and ANAFAM group some of AFAMELA’s members, but their goals are different.”
Mexico’s OTC market is the second-largest in Latin America, says Ramírez. The country has about 1,200 different brands, including both innovative and decades-old products. “The market for OTCs is growing not just in brands, but also in the presentation of different products,” he says, adding that the most commonly used OTCs are analgesics used to treat stomach pain and common cold symptoms.
The association’s main mission, however, is to educate the population. “Our priorities include the generation of public policies that facilitate the expansion of self-care throughout the population, since self-medication must be driven by
education as an extra tool for health prevention. As patients have greater access to information about their health, they can make more decisions about it.” In this context, Ramírez says digital platforms have helped to increase health education. “About 70 percent of online searches are related to physical symptoms, which is why AFAMELA also works with digital developers to support the use of scientific, upto-date information.”
In April 2018, AFAMELA said that a total of 15 million Mexicans visited public sector doctors with common diseases. According to the association, the cost of care for these patients totaled MX$43.5 billion. “We are working with the Ministry of Health and COFEPRIS to raise awareness of which health problems can be addressed with OTCs. All OTCs in Mexico have detailed instruction manuals that allow users to identify the moment when to visit their physician.” Ramírez points to the campaign that was implemented in 2008 to help individuals properly distinguish the symptoms of H1B1 influenza from those of a common cold.
AFAMELA also promotes good manufacturing and exporting practices across the sector and participates in communication campaigns alongside COFEPRIS and the Ministry of Health. A priority for all three organizations is addressing microbial resistance while the association is also focused on removing so-called “miracle drugs” from the market. “COFEPRIS has been extremely efficient in eliminating these types of drugs from the market through many informative campaigns to help individuals identify them and dispose of them. Our role in this collaboration was producing the necessary materials to inform the population.”
As Mexicans gain access to more information, they can make better decisions. AFAMELA wants to support people and companies throughout that process. “OTCs are currently the only pharmaceutical products that can be marketed directly to consumers, the regulations for marketing these medications were positively modified in December 2017.” This is leading to growth in the OTC market and the entrance of more products, such as multivitamins. “Mexico has a lot of room to grow its OTC market,” he says.
MEXICO’S HEALTHCARE FUTURE: A MATTER OF PUBLIC POLICY
JOSÉ CAMPILLO Former CEO of Funsalud
Q: What essential points must a government health program address? How can Funsalud contribute?
A: All we need is the political will and an open and public commitment to improve the national health system within 20 years. The government must be sensible enough to recognize that healthcare is a pending issue in Mexico. This model has been functioning for the past 30 years and has proven its obsolescence and exhaustion. The new system should guarantee public resources for the sector and reconsider a new financial scheme. It would be ideal to establish a single tax in which everyone contributes to achieving universal healthcare. Many people say that this is not possible, but it is not an option. Universal healthcare is an obligation formulated in the Mexican Constitution.
The ideal universal system should cover a list of conditions and should allow all service providers to compete for every single payer. This would position the patient at the center of the system, provide service portability and promote unique electronic medical records.
Q: How can prevention become a priority for the system?
A: Establishing a preventive system and an efficient first level 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 report its improvements to the Ministry of Health.
Q: What have been the most important research topics for Funsalud in recent years?
A: We have focused on establishing the costs related to obesity, overweight and diabetes, which already represent more than 2 percent of GDP. We have also worked with 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 and this is a consequence of the defects in the supply chain for analgesics. In oncology departments, for example, there is not enough injectable morphine and families do not have
the option to buy other products because they are more expensive. A pain medication costs MX$170 and usually chronic patients need between two and three daily. This is not acceptable and it is not fair.
Q: What can companies in the health sector do to make prevention a profitable activity?
A: Government policy must promote well-being within companies and the IMSS must identify the level of risk that every company must take when caring for its employees’ health. There should be a fiscal stimulus for those companies that monitor the health of their employees and a reward for those who reduce the number of absences. Without an incentive for the companies, it will not be easy to include a care culture.
Q: How do we ensure Mexico is nurturing the human resources its healthcare sector demands?
A: The priority specialization should be general medicine as we need more specialized communitarian doctors. They will be the ones who will identify the epidemics that we are struggling with. The doctors in the first level do not have enough knowledge to identify early-stage cancer symptoms, but if they are specialized they will be capable of doing that.
Q: What are Funsalud’s plans for 2018?
A: First, establish a performance evaluation system for hospitals to promote an evaluation, transparency and results culture. The purpose is to have a benchmarking of all the hospitals to develop an annual index of the best institutions and to begin with a pilot program in private hospitals. Second, we would like to conduct a study on state-of-the-art IT for health to identify the trends in technology and the legal frameworks under which they operate. We will also like to analyze successes and failures to position Mexico in healthcare innovation and see where we are.
Funsalud is a nonprofit, independent and civil association created in 1985 and formed by leaders of the private healthcare sector. As a think-tank, its priority is to contribute to healthcare through research, human capital training and technological development
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 Pharmaceutical Council (CFM) and what are the group’s main priorities?
A: CFM was created in 2009 to represent the common interests of Liomont, Sanfer, Silanes, Carnot, Chinoin and Senosiain, all of them mainly Mexican pharma companies with a broad range of products, including innovative medicines, generics and OTCs. All members focus mainly on the prescription private market, but the competition between them has not prevented a concerted effort on common interests with respect to the policies regarding the pharmaceutical industry in Mexico. Their common goal is to promote the growth of Mexico’s pharmaceutical industry.
The council holds monthly meetings to address the many issues of concern, including legal framework, pharmaceutical and social responsibility. It does not compete with other industry groups such as CANIFARMA, ANAFAM or AMIIF.
Q: How can regulations achieve the ideal balance between patented medicines and generics?
A: Mexican regulations should include strong IP protections and transparent processes that all interested parties can easily follow. The link between COFEPRIS and the Mexican Institute of Industrial Property (IMPI) must also be improved to ensure the effective launching of products in the Mexican market.
Access to medications must be improved by creating mechanisms that ensure the availability of many options for each API. Patients should have access to a full range of available products so they can make informed decisions about their health. To achieve this, a transparent and balanced regulatory framework that protects IP is necessary.
The Mexican Pharmaceutical Council (CFM) represents the Mexican pharma companies that produce 22 percent of medicines prescribed by the Mexican private sector: Liomont, SanferHormona, Silanes, Carnot Laboratorios, Chinoin and Senosiain
Q: Considering the interest of its members in R&D, how is the council supporting Mexican research?
A: The council has partnered with Fundación UNAM and many universities to promote Mexican R&D. The council has also launched the CFM-Fundación UNAM Award for pharmaceutical innovation. This award targets bachelor’s, master’s and Ph.D. thesis projects that focus on research and which can be easily translated to the market. In the past two years, winners have already patented their products. The council is working with universities, the Ministry of Health, the Ministry of Economy and CONACYT to support local R&D. There is a large accumulation of investment in technology that should be addressed as soon as possible. In addition, Mexico does not have clear financial mechanisms that allow companies to deduct research incentives.
Q: In what other areas of opportunity does CFM focus?
A: Exports are a great area of opportunity since Mexican products have excellent quality and provide innovation to patients at reasonable prices. The pharmaceutical industry everywhere protects its local manufacturers, so entering other markets is usually a challenge. Now, we are focusing mainly on Latin America and Europe and our members have expanded their markets to 17 countries in those regions. In addition, they have played an important role in explaining to COFEPRIS the challenges faced by the local pharmaceutical industry to export its products, including certifications, suppliers, audits and import permits.
Q: What role should regulators, manufacturers and organizations take to ensure the safety of medications?
A: For patients to be sure that the medication they take is correct and effective, a strong regulator is needed to ensure that local medicines meet national and international 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 have their plants certified also by EMA and FDA, among others. To achieve this, CFM has promoted a strong and internationally recognized pharmaceutical regulator through participation in the PAHO-CFM league.
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, small, independent pharmacies need to rethink their strategies to retain and even gain ground, says Marcos Pascual, Commercial Director of the Mexican Association of Pharmacies (ANAFARMEX). “Small, traditional pharmacies are in a vulnerable position because they have lost significant market share due to the growth of pharmacy chains and self-service stores, which can negotiate much better prices and offer lower costs to final clients,” he says.
ANAFARMEX represents over 15,000 pharmacies throughout the country, including small pharmacies and chains of all sizes. According to Pascual, in 2017, Mexico had 33,000 private pharmacies, of which about 18,000 were small businesses. He adds that the number of pharmacies is expected to continue growing during 2018 at a 3-5 percent rate. “About 20 years ago, the Mexican pharmaceutical market was valued at MX$90 billion and in 2017 its value was approximately MX$220 billion,” says Pascual.
While independent pharmacies have lost ground, they will not go away as they fill a specific market niche, explains Pascual. With doctors at the point of sale, pharmacies provide care to those who, due to time or distance constraints, cannot visit public healthcare institutions. “There are now about 18,000 doctors present in pharmacies, generating an average of 500,000 daily prescriptions. Doctors at the point of sale are a driver for these small pharmacies.” Small pharmacies have also evolved over time, which has helped keep them afloat. “They used to focus mainly on patented medicines; now, generic medicines represent 80 percent of total sales. Furthermore, 80 percent of generics were sold under the pharmacy’s brand.”
ANAFARMEX also provides training to pharmacists and doctors. In the latter case, the association is now focusing on increasing prevention. “The current model of care requires visiting a doctor only when there is a problem, but it is necessary for medical professionals to switch to a preventive model,” says Pascual. Through ANAFARMEX, pharmacies are joining a new scheme to promote prevention especially in the case of chronic diseases. Pascual sees great
benefits in preventive models and points out that other companies are also investing in them. He mentions, for instance, that Boston Scientific is investing in diagnostics for cardiovascular diseases. “Through platforms such as this one, patients undergo a simple test that measures blood pressure and following a small survey they are classified according to their risk to suffer hypertension.”
The association is also promoting a different business model. Pascual says that a significant percentage of medication distribution follows a fee-for-service model implemented by international companies with distributors and pharmacies. Under this scheme, distributors are assigned a specific area and the company pays a fee for the sale of the medication. “This scheme may also be good for traditional pharmacies, which would be given an additional fee for the storage and delivery of specific medications.”
While small pharmacies have their own unique battles to fight, they share other challenges with the rest of the sector, including the lack of universal electronic patient files, says Pascual. “Every institution keeps its own files and does not share them with other institutions when the patient changes doctors.” Pascual explains that the challenges at this point for all pharmacies include the development of electronic clinical files, the acquisition of more specialists and the entrance of new players to the market, such as retail stores. For instance, “FEMSA has 2,000 points of sale in Mexico and other countries and the company is still growing,” says Pascual. Amazon’s online sales model is another challenge. ANAFARMEX is promoting the sale of OTC products by e-commerce among its members to help meet this challenge. Nevertheless, even if e-commerce grows significantly, small pharmacies will continue to have a market niche. “Although home delivery of medications is becoming successful this will not cause the extinction of small pharmacies.”
Despite the potential hurdles ahead, Pascual sees a positive future for pharmacies wherein each caters to a specific market niche. “Small pharmacies will not disappear as there will always be a percentage of the population interested in personalized attention."
PROTECTING IP: MISSION AND PRIORITY
FERNANDO BECERRIL
President of the Mexican Association for the Protection of Intellectual Property (AMPPI) and Partner and President of Becerril, Coca & Becerril
A main concern for innovators is the protection of their intellectual property (IP) rights to guarantee the recovery of their investment. In highly innovative industries like the pharmaceutical sector, poor enforcement, as is the case in Mexico, can greatly diminish investment interest, says Fernando Becerril, President of the Mexican Association for the Protection of IP (AMPPI) and Partner and President of Becerril, Coca & Becerril. “IP is an engine for economic development. Companies that produce a large amount of IP can generate large profits. The biggest companies in the world have the largest amount of IP.”
AMPPI was created 50 years ago to protect IP in every sector. “The association aims to bring together experts, mostly specialized lawyers working at national and international law firms and from every industrial sector. However, less than 10 percent of our associates belong to this last group and our goal is to incorporate a larger number of these professionals to gain a comprehensive view of the country’s needs in terms of IP.”
Although intellectual property plays a significant role in all industries, the pharmaceutical sector is particularly keen on defending its IP rights due to the high investment costs involved in the development of any new medicine. “The pharmaceutical industry is one of the most active and interested in protecting IP,” says Becerril. “The sector has two priorities: innovation and IP protection.”
The costs of protecting a new molecule are also high, especially considering that it is necessary to do so in 200 territories around the world. “Mexican laws related to IP cover the needs of the sector and are on par with international laws in terms of approval times and protections granted,” Becerril says. However, Mexico has a significant challenge: “Litigation in this sector is an extremely long and complex process that might take up to 10 years before a resolution is reached.” These long periods carry high costs. Once these 10 years have passed, there is yet another instance that must be concluded for demanding damages. This problem has serious consequences, not only for pharmaceuticals, but
also for many other different sectors that might cause long and high cost processes. “My conversations with members of the pharmaceutical sector have revealed a declining interest in protecting their products in Mexico. As a result, we are seeing a relatively decreasing number of patents in this particular sector in recent times.”
Another large hurdle impacting all segments in Mexico is piracy. “Mexico has a significant problem with fake medicines. In the best-case scenario, these drugs are nothing but sugar pills, but they can also be contaminated.” To improve Mexico’s enforcement capabilities, it is necessary to strengthen the capabilities of regulatory authorities, Becerril says. “Mexico must improve its internal enforcement capabilities to be on par with the countries with which we are signing treaties. Sadly, 2018 may prove difficult as many governmental processes could be put on hold because of the presidential elections.”
Internationally, AMPPI sees significant potential for the country as it pursues treaties and agreements. “The greatest areas of opportunity Mexico has now are the renegotiations of NAFTA and TPP11.” The association has closely followed the NAFTA talks and has always had an active role in the negotiation of international treaties regarding IP. In the NAFTA renegotiations, the Association wants to be more than a participant; it wants to be an influencer. As members of the Mexican Confederation of Industrial Chambers (CONCAMIN), the association has two representatives involved in the talks.
“We hope that what was achieved during the drafting of the TPP in terms of IP can be used in the renegotiation of NAFTA. So far, we have not seen significant discussions on this chapter but some say that the easier to discuss chapters are left to the end of the negotiations. I expect that NAFTA, if it continues, will have a chapter on IP similar to the existing chapter with some adjustments that were negotiated during the TPP discussions to make it more efficient and attractive to foreign companies willing to come to Mexico.”
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 quality of healthcare in Mexico.
FRANCESCA COLOMBO Head of Health Division at OECD
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
REGULATORY ENVIRONMENT 2
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. Mexico’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 country’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 Mexico’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
42 VIEW FROM THE TOP: Julio Sánchez Y Tépoz, COFEPRIS
43 VIEW FROM THE TOP: Alejandro Luna, Olivares
44 VIEW FROM THE TOP: Jaime Castro, BPF, Part of QbD Group
46 VIEW FROM THE TOP: Javier Cortés, Jones Day
47 VIEW FROM THE TOP: Ernesto Algaba, Hogan Lovells BSTL Cecilia Stahlhut, Hogan Lovells BSTL
48 VIEW FROM THE TOP: Bernardo Martínez-Negrete, Galicia Abogados Lisandro Herrera, Galicia Abogados
52 INSIGHT: Carlos Boone, Autorización de Terceros en Publicidad (ATP)
53 VIEW FROM THE TOP: Luis Farias, TAAP
54 EXPERT OPINION: Christian Lopez-Silva, Baker McKenzie
55 ROUNDTABLE: How Should Regulations Balance Drug Approvals Against Medical Needs?
56 VIEW FROM THE TOP: Abel Hernández, ANCE Yoloxóchitl Macías, ANCE
57 VIEW FROM THE TOP: Gabriel Marcelín, Pharmometrica
58 VIEW FROM THE TOP: Xavier Ordóñez, Deloitte Horacio Peña, Deloitte
59 VIEW FROM THE TOP: José Alarcón, PwC
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 external challenges due to the country’s epidemiological transition, the renegotiation of NAFTA, the CPTPP and a new presidential administration to be inaugurated in December for a six-year term. Amid this abundance of uncertainty, it is imperative that COFEPRIS helps to create a predictable and stable environment for doing business in Mexico, says Julio Sánchez y Tépoz, Federal Commissioner at COFEPRIS.
Sánchez y Tépoz cites three areas in particular for achieving a credible environment for business: “The first is to guarantee access. The second is to regulate the evolution of technology used for both medicines and medical devices. The third challenge is to maintain an active and close communication to generate prevention schemes for common diseases like obesity.”
To better achieve these ends, part of the solution – and a contributor to the industry’s growth – is the increased participation of authorized third parties to alleviate COFEPRIS’ workload and grant a better regulatory balance. According to COFEPRIS, an authorized third-party is a nationally recognized agent in the field of health risks that is subject to sanitary control for all export and import products, as well as being the only entities that can legally support the regulatory authority. COFEPRIS has three types of third-party authorizations divided into units of interchangeability of medicines or bio-comparability tests of biotechnological medicines, test laboratories for assistants in sanitary control and verification units for the sanitary control of medicines, establishments and medical devices.
Authorized third parties are intermediaries between the private sector and the authorities because through their services they simplify COFEPRIS’ regulatory processes and at the same time channel the needs of companies in the health sector. “This synchronization would improve registration processes and would accelerate the growth of the industry, especially for foreign companies,” says Octavio Vial, Director General of TESIS.
Eventually, the evolution of the health sector and the regulatory authorities will shape the support provided by third parties in the regulatory environment. Today, they are
key to streamlining the services provided by COFEPRIS, but tomorrow these institutions could be professionalized to compete with each other, along with an administrative simplification that significantly improves regulatory processes, says Javier Cortés, Partner at Jones Day.
MEDICAL DEVICES
The medical devices segment is among the areas that would greatly benefit from regulatory simplification, a benefit that ultimately would pass on to the patient. Since 2008, the medical devices market has grown steadily through the more than 130 companies that are members of the seven clusters in Chihuahua, Tamaulipas, Mexico City, State of Mexico, Nuevo Leon, Morelos and Baja California, which is the most important cluster with more than 50 percent of the sector’s total national exports, according to ProMéxico. Mexico is considered the largest market in Latin America and is ranked eighth for global exports of medical devices, with production exceeding US$15.2 billion, according to COFEPRIS.
In the last decade, Mexico has become a world leader in the manufacture and assembly of medical devices, so the challenge is not the availability of medical devices in the country, but in the population’s access to these devices. “COFEPRIS’ regulations should not be seen as a barrier as they are necessary to guarantee the safety and quality of medical devices used in Mexico. The challenge to introducing medical devices into the Mexican public sector comes from the different processes undertaken by each institution to approve a product. After a product is approved by CONACYT, it still takes up to one year for its introduction into the General Health Council’s basic list, followed by another year at IMSS, ISSSTE or any other public institution,” says Roger Brownrigg, General Manager of Johnson & Johnson.
In 2017 alone, more than 18,000 procedures for the authorization of medical devices were deregulated and registered. In addition, the regulatory authority, through the Administrative Procedures Platform registered 19,694 medical devices, where 30 percent were subject to the opinion of authorized third parties. Today, COFEPRIS has 19 verification units to support the regulatory process of medical devices.
PHARMACEUTICALS
Over the years, COFEPRIS has strengthened to become a reference for other countries in the Latin American region. “Mexico is already a leader in the regulation of medicines in Latin America and it can become a regulatory leader in other areas, such as biomedicine,” says Abel Hernández, Director General of ANCE. However, improvements must continue to guarantee access to quality medicines. The period required to register a product is among the industry’s concerns, as well as the ability of COFEPRIS to keep up with innovations, a vital issue to ensure access to these products. As innovations arrive to the market “the regulatory gap will need to be filled as the demand for these technologies grows,” says Jaime Castro, Director General of BPF, Part of QbD Group. If these demands are not fulfilled on time, he continues, “we might find that regulations are almost dead on arrival because as they are released another technology is emerging.”
The speed of the regulatory process is not the only concern, since in parallel the industry demands that COFEPRIS align with the innovations of the market. “COFEPRIS is working hard to keep pace through close communication with technology developers. At this moment, there is no regulation related to nanomedicine, so one of the objectives should be to discuss strategies to create related regulations,” says Yoloxóchitl Macías, Chief of Health Area at ANCE. In this context, having an updated regulatory agency is key to guarantee access to innovative medicines.
Regarding the generics segment, the areas requiring improvement are in promoting a positive business environment between both the generics and patent 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 these two players,” says Benjamín Vega, Commercial Director of Allen Laboratorios. On the other hand, for Big Pharma companies the concern focuses on registration procedures. “Besides the big changes already done, the health authorities could accelerate regulatory processes while maintaining the firmness of their assessments to attract more investment,” explains Marco Ruggiero, General Manager of Chiesi México.
OPPORTUNITIES
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 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.”
Over the next few years, the regulatory authorities need to meet several milestones to continue with the development and strengthening of the medical devices and pharmaceutical sectors in Mexico. “It is necessary to accelerate and unify the sanitary requirements between Mexico and the US. Mexico should expedite the procedures to adhere to international laws that provide access to more modern medical devices and drugs. COFEPRIS must rely on the verification and authorization capacity of other countries and recognize the lack of budget and capacity to carry out international inspections,” says Cortés.
On a national scale, there are public-private collaboration schemes or other business schemes that address the overloaded public health system and its complementary services. “The opportunities are in the creation of new payment schemes, like payment based on results. In the public sector, opportunities will revolve around innovative patient-focused access models that help the public sphere maximize resources and acquire the necessary innovation to provide medical care to the population for which they are responsible,” explains José Alarcón, Dean Partner of Healthcare at PwC. “In the case of the private sector, the opportunities are in making supply chains efficient and with profitable prices for new players.”
The regulatory system has not seen a substantial update in more than 20 years so the next administration should prioritize the improvement of greater legal security and promote greater investment in the country to increase the possibility of local companies competing with their international counterparts, says Alejandro Luna, Partner and Life Science Co-Chair at Olivares. GENERAL FLOW OF THE THIRD-PARTY AUTHORIZATION PROCESS
Source: COFEPRIS
ALL INCLUSIVE ECOSYSTEM WOULD PROVIDE BENEFITS
JULIO SÁNCHEZ Y TÉPOZ
Federal Commissioner for Protection Against Sanitary Risk (COFEPRIS)
Q: How have COFEPRIS’ policies shaped the pharmaceutical sector?
A: Our road map, developed in 2016, has marked the path to improvement throughout these years. In January 2018, COFEPRIS introduced a new regulation on pharmacovigilance and techno-vigilance and has made great strides in facilitating approval processes and reducing times. One of our pillars is effective communication with the industry. The ultimate goal is the generation of public policies that benefit patients and permit industry development.
Q: How is COFEPRIS aligning its policies to their international counterparts?
A: The challenge that all regulatory authorities face is to generate predictable and stable environments for doing business and all international bodies share similar hurdles in this regard. The first is to guarantee access. The second is to regulate the evolution of technology used for both medicines and medical devices since technology is making diagnostics techniques more powerful and faster than in previous years. The third challenge is to maintain an active and close communication to generate prevention schemes for common diseases like obesity. For the healthcare sector, it will be much less expensive to prevent obesity than to treat it.
Q: What should COFEPRIS’ goals be regarding international policy?
A: Regulatory authorities are more efficient if they collaborate closely with their peers around the world, since the concerns are almost the same on all continents. The alignment of policies allows the simplification of processes and saves companies from having to perform the same clinical studies several times or to perform several plant reviews. In these cases, a revision from a Stringent Regulatory Authority (SRA) should be sufficient. Among
Federal Commission for Protection Against Sanitary Risks (COFEPRIS) monitors the production, commercialization, import, export and marketing of medications, medical devices, insecticides, fertilizers, chemicals and makeup, among others
our goals, is for Mexico to be qualified as an SRA in the Americas once the WHO makes this term official. Since 2017, COFEPRIS has been among WHO’s reference bodies. Within WHO, we coordinate FDA, Health Canada and other health regulators, including Cuba, Colombia, Chile, Argentina and Brazil, and we will do so until 2019. COFEPRIS is also Vice President of the International Coalition for Medicines Regulatory Authorities (ICMRA).
From January 2018, COFEPRIS entered the Pharmaceutical Inspection Co-operation Scheme (PIC/S), which will allow us to greatly reduce the number of visits to foreign plants to grant them a certification of good manufacturing practices, saving approximately MX$1 million per visit.
Q: How is the role of COFEPRIS evolving to support epidemiological changes in the country?
A: From 2010, COFEPRIS has approved 550 generic medicines and 310 innovative medicines, of which 64 were orphan drugs. Our work with generics is one of this administration’s greatest achievements, as these medicines cover 70 percent of Mexico’s main mortality causes and bring about a 60 percent overall reduction in costs. To continue incorporating more medicines and address diseases that might have been overlooked, we recently signed an agreement with the Mexican Federation of Rare Diseases for the creation of a permanent committee that incorporates patients, regulators and the federation to analyze the medications that should be brought to Mexico.
Q: Considering how quickly technology evolves, how can regulatory bodies keep pace?
A: We have created a committee that evaluates new drugs and medical devices and provides support for their developers throughout the commercialization process. Investment in R&D carried out by other countries comes long 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 is a space for discussion among academia, regulators and the industry whose goal is to close any gaps in knowledge. Its ultimate goal, announced in March 2018, is the creation of a National Plan for Regulatory Sciences.
PROTECT IP TO BOOST SECTOR
ALEJANDRO LUNA Partner and Life Sciences Co-Chair at Olivares
Q: What is the most common profile of the companies you work with?
A: A significant percentage of our clients in the firm’s life science group are in the pharmaceutical industry. Our portfolio in this field specializes in the most common needs of the industry, such as patents, trademarks and copyright cases, but we also offer protection for clinical data. Our extensive expertise in life sciences allows us to work with companies not only in the pharmaceutical industry but also in the medical devices, cosmetics, food and beverages and agrochemical industries.
Q: How would you describe the existing regulatory environment for innovative products like biomedicines?
A: Our legal and regulatory system created the opportunity to have the products and services we find today in the industry but there is also a growing need to refresh these rules. The regulatory system must take into account different types of innovations and the protection of intellectual property. Also, it must adapt to the digital era to help make the new technologies, biological innovations and the patient-centric approach more effective.
Q: What impact will CPTPP have on IP in relation to pharmaceutical products?
A: It has been 24 years since the current IP law was introduced. In general terms, the legal environment is positive for the pharmaceutical industry because there are minimum international standards to protect IP in Mexico but the country needs to improve the level of protection and legal certainty. At the national level, it would be good to include in the CPTPP the possibility for Mexico to improve its standards, legislation and IP practices. At the regional level, the durability of IP protection in North America must be aligned. Finally, at the international level, it is necessary to synchronize the most recent IP protection protocols.
Q: What are the main challenges faced by pharmaceutical and medical devices companies when they want to introduce a product in Mexico?
A: In Mexico, there is still a certain amount of uncertainty about the timing and the outcome of some proceedings
and pharmaceutical and medical devices companies tend to invest large amounts of money and time on consolidation. The government needs to provide more certainty about the timing and merits of the cases to be decided by administrative and judicial entities to encourage companies wishing to do business in Mexico.
Q: What are the main lessons related to patents that Olivares has learned in its almost 50 years of history?
A: Technological development advances faster than legislation, a gap that inhibits the full growth of the country’s pharma industry. There is a need to understand the pharmaceutical sector as an industry of compliance. Keeping this in mind helps to understand how the patents in the healthcare sector are compatible with legislation, processes of change and the needs of the industry.
Q: How is the local and international regulatory environment affecting international companies’ perception of the Mexican market?
A: The uncertainty caused by the renegotiation of NAFTA removed life sciences from the agenda and at the same time key negotiations like the protection of clinical data and IP. International companies are also kept in abeyance because our main support mechanisms are being renegotiated and current protection protocols are not updated enough to meet market needs.
Q: What are the main areas of opportunity that Olivares sees in the industry in 2018?
A: We see the possibility to protect the industry through mechanisms like CPTPP and a renegotiated NAFTA. Also, we see the opportunity to elevate the system of regulation in Mexico. If Mexico discovers how to benefit from these international agreements, a boom in the pharmaceutical industry will become a reality.
Olivares is an IP law firm that works with some of the world’s biggest brands. It specializes in areas such as patents, trademarks, copyrights, regulatory, administrative and constitutional law. It has nearly 50 years of experience
PERSONALIZED SOLUTIONS FOR THE INDUSTRY
JAIME CASTRO Director General of BPF, Part of QbD Group
Q: What are BPF, Part of QbD Group’s main lines of operation and core activities?
A: Our core business is advising and consulting for companies in the healthcare sector related to validation and qualification issues, especially for computerized systems. Additionally, we rent out measuring equipment, we offer legal advisory on sanitary regulation, provide implementation of quality management systems, perform risk analysis, provide in-house courses, do project management for GMP implementations and staff outsourcing and evaluation of infrastructure, equipment and staff. Fifty percent of our capital goes to BPF and the other 50 percent to Quality by Design (QbD), a Belgian company that focuses on the development, design and quality validation for biological, cosmetic and sanitary products. At first, we were distributors of QbD qualitycontrol software Quality Kick, but then we widened our reach and changed our name to BPF, Part of QbD Group. This has helped us to access a new organizational level of training and knowledge.
Q: What types of systems do you validate?
A: The GAMP 5 guide from the International Society of Pharmaceutical Engineering (ISPE) outlines a classification of systems that require validation to guarantee that these systems do not negatively impact the quality of health-related products. We can validate a simple spread sheet or an enterprise resource planning (ERP) system or a SCADA computerized system. We have experience validating those systems related to product quality. Our team includes validation engineers who are biologists, pharmacists and computer and mechatronics engineers, contributing to the knowledge base that allows us to offer integral services.
We are also working with QbD on software development. Its main product is Quality Kick, an innovative program for quality management that has applications in the cloud and process adaptability, besides other systems like Lab Kick.
Q: In which healthcare segments does BPF, Part of QbD expect the greatest growth?
A: We have a greater presence in the pharmaceutical and logistics segments and our customer base includes four of the leading logistics companies for health-related products. As part of our strategy for 2018 and 2019, we expect growth in the medical devices, biologics and biotech segments.
Q: Healthcare is evolving toward the application of new digital technologies. What approaches are validation companies taking regarding this development?
A: Technology evolves so fast that regulations are often left behind. Today, there are technologies that impact people’s health but for which there is a lack on validation or testing methods. These technologies include artificial intelligence, virtual reality, nanotechnology and additive manufacturing. For example, 3D printing is applicable to drugs, medical instruments and tissue manufacturing; however, there is no way to guarantee the protection provided by the tubes that carry the stem cells in a 3D printer.
Although this technology has many benefits, you need a guide on how to check your operating systems. The challenge is time: we have very little time to achieve the necessary regulatory framework, process adaptations and quality models to make the paradigm shift at an industrial level that will allow the adoption of these technologies without risking people’s lives.
Today, there is not much investment in this area because those technologies are just starting to be implemented in Mexico. The regulatory gap will need to be filled as the demand for these technologies grows. However, I believe manufacturers and providers will start worrying about this issue soon. The global trend in healthcare is to create more personalized solutions, which represents a challenge for current regulation and pharmaceutical methods. We might find that regulations are almost dead on arrival because as they are released another technology is emerging. For this reason, the regulations must stay one step ahead so that they enter the system covering future risks. Academia, the authorities, the suppliers and the industry must be 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)
DEMANDING COMMITMENTS FROM REGULATORY AUTHORITIES
JAVIER CORTÉS Partner at Jones Day
Q: What health opportunities could homogenization of the rules between the US, Canada and Mexico bring to Mexico?
A: Regardless of what happens with NAFTA, it is necessary to accelerate and unify the sanitary requirements between Mexico and the US. Mexico should expedite the procedures to adhere to international laws that provide access to more modern medical devices and drugs and COFEPRIS must rely on the verification and authorization capacity of other countries and recognize the lack of budget and capacity to carry out international inspections.
Q: How does the lack of up-to-date regulations affect topics such as telemedicine?
A: It creates uncertainty with regard to potential health solutions providers because having to contact the authorities to resolve questions not covered in the regulation is inefficient and is not beneficial for the industry. There are also contradictions in the law; for example, the definition of “biotechnology” in the General Health Act is different from that in the specific act, which means that the authorities have created more uncertainty. The concentrated workload, the lack of budget and the rigidity in COFEPRIS’ processes distract attention from areas of improvement.
Q: What are the most urgent changes that you would carry out in the current health regulation?
A: The first thing we must do is consider what modifications are essential to improve the access to modern drugs and medical devices instead of creating last-minute solutions or patching each problem. Second, allow health industry manufacturers to self-evaluate with the support of an authorized third party. In this way, the sanitary authority can focus on topics like illegal products or the black market, instead of dealing with bureaucratic formalities. Last but not least, simplify all COFEPRIS formats.
Jones Day is an international law firm based in the US with 42 locations around the world. It offers multiple services in different economic sectors such as antitrust and competition, banking and finance, government regulation and healthcare
Q: What tools can the sector use to demand better performance from sanitary authorities?
A: The sector must begin to create a culture that restricts the discretionary power of the health authorities. This means limiting the power to assess fines and the processing times of COFEPRIS through challenging administrative decisions taken without proper legal grounds via the legal system. Today, players are afraid to move these issues to court, but this would help improve the service.
Q: How do authorized third parties contribute to the simplification and modernization of product inclusion?
A: They have had a positive impact, but the goal should be to make them less necessary through administrative simplification or to commit to increasing the number of authorized institutions permitted to compete against each other.
Q: How does Jones Day assess competitiveness in the Mexican healthcare industry? What are the main concerns of your clients?
A: The Economic Competition Commission is beginning to see obstacles in the healthcare sector. They are seeing that the excessive regulation in terms of health is an obstacle to free competition. Nevertheless, the view on competition issues remains macro and they have not yet found the right way to address the required amendments on a detailed basis.
Q: What are your foreign investment forecasts for 2018?
A: Investment will be aimed at service providers, such as hospitals, medical device manufacturers and generics laboratories. In addition, the medical tourism market is also becoming attractive. However, there are obstacles like 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 establish clearer regulations to increase investment. One of the most frequent requests from institutions is the establishment of clearer rules and conditions for tenders in the healthcare industry.
FILLING IN THE REGULATORY GAPS
Q: In what regulatory areas are companies most interested in acquiring the services provided by Hogan Lovell?
EA: Clients request legal advice regarding the introduction of innovative products, new therapies and high-tech devices in the Mexican market. Access to medicine, promotional activities and patient programs are also among the important components of the advice we provide. In seeking our services, pharmaceutical companies assure that their practices comply with the applicable Mexican legal framework. Compliance not only impacts the country, it is also relevant under the American Foreign Corrupt Practices Act and UK Anti-Bribery Act.
Q: What opportunities result from rendering digital health services in Mexico?
CS: Even where there is a comprehensive regulation for the provision of traditional health services, there is no equivalent that exactly applies for digital or virtual health services. We need a specific regulatory framework as telemedicine evolves. We are facing a very fast development of service digitalization in areas such as prevention, health education and treatment follow-up. This is a challenge from a business and regulatory perspective.
EA: Several clients have been asking us about these topics. Given the lack of a particular legal framework, we need to continue working closely with the authorities to implement the appropriate regulation. This is the case in areas such as prescriptions, physician certifications, product procurement, medical records and follow-ups. Mexico’s framework is broad and strict in terms of data protection but the digital provision of medical services brings with it the need to address these issues comprehensively.
Q: What steps have been taken to develop this framework?
EA: Several years ago, the Ministry of Health developed 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 complex political agenda, it is time to review the existing legal framework and adjust it to the needs of an evolving sector. Hogan Lovells has been finding ways to assist both
the authorities and the industry to implement measures that can be easily adopted. Our role is to help to adopt good practices and suggest some practical approaches that protect both our clients’ operations and the security of their patients.
Q: How have authorized third parties contributed to compliance in the Mexican health industry?
CS: The existence of authorized third parties has provided transparency and certainty when launching products and managing processes with COFEPRIS. Authorized third parties both speed up processes and take some of the administrative load off the authorities.
Q: In what health industry areas are Hogan Lovells’ clients participating?
EA: Eighty-five percent of our clients in the life and sciences division are transnationals. Hogan Lovells’ clients operate in areas such as pharmaceuticals, stem cells, biotechnology, medical devices, digital healthcare, cosmetics, alcohol, tobacco, food, supplements, genetically modified organisms, drug stores and distributors. Working with such a varied array of companies enables us to have a wider perspective regarding areas of opportunity and what will interest our clients.
Q: What are the priorities of Hogan Lovells’ life and sciences division?
CS: We strive to be one step ahead of our clients’ needs. Hogan Lovells is creative and provides added-value solutions. Clients usually have their own regulatory teams, so what we offer is both high specialization and integral solutions. If a client asks for advice on regulatory matters and we notice there is an issue with compliance, foreign trade, IP, or any other practice area, we can help them in those areas as well.
Hogan Lovells BSTL is the Mexican branch of the global law firm present in 25 countries with over 2,500 lawyers. It operates in areas such as life sciences, energy, finance, infrastructure and real estate
Cecilia Stahlhut Senior Associate of the Life and Sciences Practice at Hogan Lovells BSTL
Ernesto Algaba Partner of the Life and Sciences Practice at Hogan Lovells BSTL
Martínez-Negrete Partner at Galicia Abogados
Lisandro Herrera Associate at Galicia Abogados
Q: How would you describe the current profile of the pharmaceutical sector?
BM: The pharmaceutical market is composed mostly of former players that have operated in the country for many years and some new entrants that manufacture biotechnological products. Previously, pharmaceutical companies handled all these matters internally but it is almost impossible for a single company to administer all the regulations due to its extension. The demand for pharmaceutical products is completely inelastic. This has led competition authorities to closely monitor manufacturers and distributors to avoid collusion.
Q: What are the main barriers faced by companies to introduce medicines into the country?
BM: The main barrier, both for a local or foreign manufacturer, is the large number of regulations. For a product to be sold in Mexico, it must have a marketing authorization issued by COFEPRIS; there is room for improvement in the regulatory process to expedite the granting, and, eventually, the renewal, of such permits. The problem is aggravated by the fact that some processes must be approved by the Mexican Institute of Intellectual Property (IMPI).
LH: There are also many barriers to access. Once a medication has a marketing authorization issued by COFEPRIS, it is still not possible to sell it to public institutions because all products must first enter the basic list of the General Health Council, which can take up to several years. Then it is necessary to enter the basic lists of each public institution to be able to sell them. This process takes a considerable amount of time and resources, complicating the entrance of innovative medications into the country.
Q: What are the main challenges of IP enforcement and how does it affect investment?
LOCAL LAW FIRM SHINES A GUIDING LIGHT ON PHARMA SECTOR
Galicia Abogados is a Mexican law firm founded in 1994 that specializes in M&A, sale regulations, advertising and distribution of generic and patented medicines, clinical research and IP of pharmaceutical products
LH: IP rights enforcement in the pharmaceutical sector is complex, as it requires first a resolution from IMPI that can take some years. This decision must be validated by the Federal Court of Administrative Justice, adding more time. Even if the court supports IMPI’s decision, the offending party can initiate another legal process (amparo), which can take another couple of years to be solved. It is then necessary to go to Civil Court to sue for damages, adding another several years to the entire process, plus the time it can take to enforce the sentence.
Q: What are the most common services offered by Galicia Abogados to the pharmaceutical sector?
BM: M&A transactions are common as the pharmaceutical sector faces constant patent expirations, hence the need to divest prior to the entrance of generic products. Distributors often negotiate for exclusive sales rights, which under some circumstances are illegal in Mexico as they can lead to monopolistic practices. We also help clients meet the standards of their clinical studies, including informed consent in accordance with current regulations.
LH: We receive requests from foreign parties interested in selling their products in Mexico. We also guide hospitals, doctors and manufacturers that perform clinical trials on how to abide by the laws concerning personal data.
Q: What opportunities does Galicia Abogados foresee in Mexico?
LH: A regulation that could have a strong impact on the market is the approval of medications generated from cannabis and its derivatives, since it will attract many foreign companies. The country also has great opportunities springing from its international treaties, such as the Pacific Alliance, CPTPP, EU Trade Agreement, EU Free Trade Association and NAFTA.
BM: In 2017, the General Health Act was modified to include vaccination as a priority for national health, forcing the federal government to set aside a special budget just for vaccination and to generate and pay for vaccination campaigns.
Bernardo
PATENTS PROTECT INNOVATION
HÉCTOR CHAGOYA
Partner, Director of Patents and Technology at Becerril, Coca & Becerril
Misconceptions about patents are common, with some people seeing them as a barrier to innovation, especially in the pharmaceutical segment. They are, however, a necessary tool to protect intellectual property (IP) and investment from unfair competition, says Héctor Chagoya, Partner and Director of Patents and Technology at Becerril, Coca & Becerril (BC&B), a law firm specialized in the 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 companies use its services because of the firm’s technical focus instilled by its founders, who were chemical engineers.
“While many firms have a technical team, those teams are treated as secondary. We have our technical team deal firsthand with all patent-related issues, except litigation where they team-up with our skilled attorneys.”
A major concern for pharmaceuticals, Chagoya says, is unfair competition from generics manufacturers that must only prove their drugs are the same as the typically patented counterparts. For this reason, there is a constant tug-of-war in which generics producers demand faster access to patented medications, while innovative companies want to maintain exclusive sales rights for as long as possible. How long innovative medicines should be protected is at the heart of the debate, he adds. “Big Pharma is also extremely concerned about approval times for biosimilars, which take much longer to develop, prodding their creators to request more time to see a return on their investment. There is also evidence that biosimilars are not exactly the same as the original medication, thus biosimilars might cause unintended effects in patients.”
Local regulations should prioritize IP protection, explains Chagoya. “It is necessary that public policy fully understands the need for patents both to protect innovation by moderating the effects of unfair competition and thus keeping costs down for the public. If pharmaceutical innovators have a short time frame to recoup the development investment, they will have to greatly raise retail costs. If the window is wider, costs can be kept down.”
“Patents are a tool to generate a balance within the pharmaceutical market, which is essential for Mexico’s health and development”
Mexico has strong regulations to protect every kind of patent; the problem is enforcing these regulations. “Most countries in the world have an easier system for enforcing patents,” Chagoya says. However, in Mexico patent infringements must first be addressed by the Mexican Institute for Intellectual Property ( IMPI), which can take up to four years. The offending party can challenge IMPI’s verdict at the Federal Court of Administrative Justice and the latter’s decision can be further challenged with a second legal protection (amparo). Obtaining a final decision can take up to eight years at least. “These extremely long periods make foreign companies wary. This is a great area of opportunity to improve the legal system,” explains Chagoya. On the other hand, Mexico imposes a minimum penalty of 40 percent of the retail price, which is significantly higher than in other countries.
While many may think that protections extend only to large companies, Chagoya says small research laboratories also benefit. “Patents can also be used to protect innovation at universities or small research centers. If they do not patent their discoveries, it will be easy for others to copy the results.”
TRUST: THE ESSENTIAL ELEMENT WHEN WORKING WITH REGULATORS
JUAN PABLO NAVA
Commercial Director of NYCE
Q: How has NYCE’s service portfolio evolved alongside the industry and regulators?
A: NYCE began operating as an authorized third party for healthcare in early 2011 but the company’s history dates back to 1994 with the certification of electronic products, including medical devices. Since then, we have incorporated six companies: NYCE Laboratorios, which is in charge of developing test protocols; CNCP, in charge of conformity concerning plastics, water and chemicals; NYCE SIGE, which certifies management systems and Movilar NYCE, which will oversee the evaluation of hydrocarbons. NYCE also has two companies abroad: NYCE Colombia and NYCE Asia. The company plans to continue growing and by 2018 our medicine division will expand to include biotechnological, allopathic and herbal medicines.
NYCE is greatly concerned with continuous improvement and is one of the few verification units with an ISO 9000 certification, which we have had for over 10 years. By early March 2018, NYCE had generated over 1,100 technical reports, of which over 90 percent have been approved. Our last audit by COFEPRIS awarded us a “highly trusted” rating. NYCE has also developed over 700 standards to support several sectors, including plastics, polymers and electronics, and we are collaborating with the government on the development of NOMs for the benefit of the industry.
Q: What is the next step in the collaboration between NYCE and COFEPRIS?
A: As the technical arm of COFEPRIS, NYCE is in a position to support both the industry and the regulator. Our role is to help COFEPRIS accelerate its processes to review and approve paperwork while ensuring compliance with all regulations. Authorized third parties are relatively young organizations, having been created only seven years ago, so the next step is to reinforce and consolidate them.
NYCE is one of the largest authorized third parties in Mexico. It supports companies through the certification of electronics, medicines, medical devices and food labels. NYCE has operated 21 years as a verification unit
COFEPRIS is becoming increasingly open to authorized third parties, which have allowed the regulator to shorten its approval times and get rid of most of its backlog. COFEPRIS is also increasing the capacities of authorized third parties. For example, in early 2018 it opened tenders for authorized third parties for advertising and pesticides.
Q: How do the authorized third parties support COFEPRIS’ continuous improvement processes?
A: We have opened opportunities for the creation of technical appointments (citas técnicas) through our close collaboration with COFEPRIS. This has allowed a close communication to streamline approval processes and greatly reduce approval times, benefiting both the industry and COFEPRIS. This collaboration has allowed the reduction of registration times from over 73 days to less than 30 in the case of medical devices and from 54 to 28 in medicines, benefiting companies willing to import their products into the Mexican market.
Q: How are local regulators working to improve the pharmaceutical sector?
A: The Mexican government is involved in the generation of alliances and trade agreements with foreign countries but it must also invest in the strengthening of the Mexican industry. It would be extremely beneficial for local companies already certified by COFEPRIS to have such certifications recognized abroad. For example, having the quality of Mexico’s products recognized throughout Latin America would be a boost for the sector. Our regulators are making great efforts to obtain recognition from WHO and PAHO, which will help the local industry.
Q: What can Mexico offer so that foreign companies continue investing in the country?
A: Investments may slow slightly during 2018, as the sector 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 Mexico as new medications enter the country every year. The pharmaceutical sector does significant investment in R&D, which translates into the development of innovative medications to treat common diseases.
THE FAST TRACK FOR REGULATIONS
OCTAVIO VIAL Director General of TESIS
Q: COFEPRIS has greatly reduced its approval times. How are authorized third parties helping both COFEPRIS and the private sector?
A: Through our services, we connect the authorities and the private sector. We mainly communicate the needs of the pharmaceutical and medical devices industries to COFEPRIS to reduce registration times. The relationship with the authorities could be improved with better communication. This synchronization would improve registration processes and would accelerate the growth of the industry, especially for foreign companies.
Our verification process is highly specialized because we help our clients from the collection of the necessary documents to the final registration.
Q: What is the profile of the companies that TESIS works with?
A: TESIS works with companies from a wide variety 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 to provide services to more than 100 companies. We are recognized as the fastest authorized third party in the country and for offering the highest quality services.
Q: What are the main obstacles faced by companies that want to commercialize their products in Mexico?
A: The main problem with foreign companies is that they want to enter the market under other international regulations, which slows down processes. We would like to reach more international companies to improve their registration process and the availability of their products in Mexico.
Q: How would you describe the market’s response to the economic uncertainty of the past year?
A: The response from companies has been different because they were trying to get the registration ahead of the July presidential elections. For us, it has been a great year because we are increasing our client portfolio. COFEPRIS relies on our system to previously verify medical devices and pharmaceutical products and we have also reduced registration times by 50 percent. Mexico has a large market of medical devices and pharmaceutical products; it is important that TESIS is ready to meet this demand.
Terceros en Servicios de Riesgos Sanitarios (TESIS) is an authorized third party that provides pre-opinions on risk health services for the control and surveillance of the law, regulations and calls by the Ministry of Health.
AUTHORIZED THIRD PARTY SEES OPPORTUNITY IN INFORMATION RULES
CARLOS BOONE
Director General of Autorización de Terceros en Publicidad (ATP)
As markets grow and consumers have more choices of products and services, advertising plays an increasingly important role in the commercial success of companies and brands. COFEPRIS believes that regulations are needed to oversee all information related to products that could have an impact on health. However, not many are aware of the importance of this regulation, providing an opportunity for authorized third parties like Autorización de Terceros en Publicidad (ATP).
“There is a lack of knowledge about health regulation in advertising,” says Carlos Boone, Director General of ATP, one of the six authorized third parties in advertising certified by the sanitary agency. “Authorized third parties assume the weight of COFEPRIS since everyday a large amount of publicity is created and it is difficult for the institution to review it in a timely fashion.”
Boone describes the process of certifying authorized third parties as complex. First, COFEPRIS verifies that there are no conflicts of interest and that there is no link with another third party. The agency also does a profile check of all certified professional adjudicators. “The certification of our staff is specific to us, so they cannot migrate to other certified company,” Boone adds. To have a comprehensive base of experts capable of managing different types of products and customers, ATP needed chemistry professionals, doctors and market specialists, among other positions. “There are sectors that invest more in advertising, such as alcoholic beverages and laboratories. However, the area of opportunity is in sectors that do not know much about regulation in advertising. Our responsibility is to provide access to this information,” says Boone. He adds that knowledge gaps exist mainly in companies that belong to segments such as pesticides, small cosmetic clinics and food supplements. Manufacturers do not know what they need and what are the steps and requirements that must be met, he says.
Another challenge in terms of advertising, especially in the case of international companies, is to adapt the campaign to each country, since, according to Boone, “Mexican
regulation is one of the strictest in the world.” One of the main projects led by authorized third parties is to help companies in transition to shape their global campaigns and to understand local regulations.
Another area that requires a greater scope of advice is digital advertising. “Many companies that carry out digital advertising are not complying with the law, which can be very dangerous for consumers,” says Boone, adding that another obstacle driven by digital advertising is unfair competition. Despite operating with a complex regulation, Boone believes such conditions are necessary. “I do not think Mexico is over-regulated. I think the regulation is right for our country because monitoring advertising is very difficult and a more flexible regulation would not serve the public.”
When operating within a regulation of this type for advertising, interpretation becomes an issue. Authorized third parties are in permanent contact with COFEPRIS. Also, to ease the adaptation to the regulatory framework, ATP works with its clients’ advertising and communications departments and trains their marketing staff. Boone also believes that Mexico needs to make more advertising space available, creating another area of opportunity. “ATP can help create more business opportunities since we are at the forefront of compliance with the regulatory framework. When we approach clients that are unaware of the regulation, we are promoting opportunities for other types of services, such as advertising agencies or marketing agencies.” For ATP, marketing agencies could be a strategic ally to offer clients an integral service.
Currently, ATP focuses on providing services to companies working in the sectors related to alcoholic beverages, pharma and food supplements, although in the short term the company is interested in migrating to the pesticide segment. “There are many industries and companies willing to follow the regulatory framework, but they lack the necessary knowledge. Our mission is to create awareness. To achieve this, we need the support of other industries and their authorities.”
HOW TO TAKE HEALTH ADVERTISING TO EXCELLENCE
LUIS FARIAS Director General of TAAP
Q: What gaps are authorized third parties like TAAP filling in the industry?
A: TAAP helps ease the burden on COFEPRIS regarding advertising oversight, especially after the arrival of digital media. Another area that needs to be addressed is the lack of knowledge surrounding the regulatory framework for advertising. Big advertisers do not need the absolute support of an authorized third party because they know the rules; however, there are many advertisers who do not even know they are regulated. As authorized third parties, we have the obligation to educate advertisers on what is regulated and what is not.
Q: What responsibility do authorized third parties have in the health industry?
A: For constitutional purposes, an authorized third party is the authority, which is why we are subject to the liability law of public servants. In addition, companies must pass through a number of filters to receive authorization from COFEPRIS. First, the company must demonstrate its knowledge and ability to comply with the work. Second, the company cannot be linked to additional businesses because that could entail a conflict of interests. Sometimes customers feel they have the right to obtain our approval just because they pay for our service, but we are an official authority figure. We have to educate the market because we are not intermediaries, we make verdicts.
Q: What consequences do pharmaceutical companies face because of a lack of guidance in the regulation of advertising?
A: When the authorities recognize an unauthorized ad, they ask for its removal and perhaps impose a fine. The most serious consequence is the confiscation of products. The discovery of an ad that has not been authorized could also jeopardize the approval of the product. Research, manufacturing, distribution, commercialization and advertising are covered by health regulations. Therefore, a mistake in one of these links can affect another.
Q: How can authorized third parties contribute to improve the commercial opportunities available to advertisers?
A: Advertisers must regulate their own creative processes. Sometimes, advertisers arrive with the TV production ready, but a grammatical detail in the ad or a gesture in the image can derail the authorization. The ideal is to prepare a proposal with a storyboard before producing the final product. The worst thing that can happen to an advertiser is to produce a campaign, fail to obtain authorization, which prohibits the campaign from going forward, and to receive a fine as a consequence.
Q: How is the relationship between authorized third parties and COFEPRIS?
A: The market is very happy with the work of authorized third parties and how we work with COFEPRIS. After the authorized third parties were chosen, more people joined the discussion regarding the regulation of advertising. We are learning from COFEPRIS and they are learning from us, which is making criteria more transparent, equal and understandable.
Q: What are the main challenges in regulation?
A: Our regulation has been kept up to date since at the beginning it was thought for media traditions that today are out of trend. Therefore, it is confusing to deal with new types of advertising. For example, online media have become a challenge. An image or an ad for radio and television can be analyzed quickly and is likely to receive approval within hours. With digital advertising everything is more difficult, since other factors come into play and with the new digital platforms campaigns are everywhere. Before, advertising was very clearly defined; it was for products or services. Today, one of the main modes of advertising is institutional advertising, which promotes brands without products. There is no regulation for this type of advertisement and we are applying the same rules as if it was a product.
TAAP is an authorized third party for advertising of food, nonalcoholic and alcoholic beverages, medical devices and pharmaceuticals. The company began operations in June 2017 after COFEPRIS authorized it to oversee advertising
TRADE AND HEALTH LAW: REGULATORY HARMONIZATION, CONVERGENCE
CHRISTIAN LOPEZ-SILVA Partner, Head of Healthcare and Life Sciences at Baker McKenzie
In contrast to other fields, international health law and health regulation is not harmonized. Each country has its own regulatory framework with its own specific requirements, which significantly increases the cost of bringing products to the market. Regulatory harmonization in this sense is the Holy Grail for companies. However, a major and relatively unnoticed development in international law has recently taken place in relation to human health and trade law. In a global context, this normative innovation could result in a similar shift that took place more than two decades ago, when IP was first incorporated to international trade law.
The first precedent would be the negotiation and adoption of the 1994 NAFTA treaty, which had a profound impact on the Mexican regulatory framework. Prior to NAFTA, the 1984 General Health Law (GHL) in Mexico required all regulated products to be subject to a prior marketing authorization. Thanks to the adoption of measures based on science and risk, the GHL was amended and the majority of products were released from a premarket approval and were moved to a simple notification system. The second precedent came as a result of the arbitration mechanism created under another FTA, this time with our southern neighbours. In that case, Mexico was forced to change its regulatory framework applicable to medicines, resulting in the removal of the local manufacturing plant requirement. Now, the international paradigmatic change in FTAs highlighted here has been carefully introduced through a dual mechanism, comprised of a softer and a harder approach. Combined, they represent the most advanced form of regulatory convergence.
The softer approach has consisted of adding to an FTA a Chapter on Regulatory Improvement (CRI), which refers to the array of procedural tools aimed at reducing regulatory divergences and promoting regulatory coherence, including transparency, inter-institutional coordination, public consultation, best regulatory practices and international cooperation.
The harder approach consisted first, of framing human health regulation not as a sanitary and phytosanitary issue under the respective FTA, but rather as a technical
barrier to trade (TBT); and second, in identifying and agreeing Product Specific Annexes (PSAs) as part of the TBT Chapter, which contain an array of substantial tools to promote regulatory coherence.
Earlier versions had been first incorporated to other bilateral FTAs. On the one hand, the procedural tools of regulatory coherence were first introduced to the Comprehensive Economic and Trade Agreement (CETA) signed between the European Union and Canada. On the other hand, an earlier version of the dual mechanism, containing both procedural and substantial tools, was first incorporated to the FTA between the European Union and South Korea. The scope of these PSAs continues to grow. The products covered in the PSAs include pharmaceuticals, medical devices, cosmetics, organic produce, information technology products, food products, alcoholic beverages and chemicals. Considering that most of these products are regulated under health law instruments, this normative development has a particular significance for the international regulation of life sciences.
The most advanced version of this form of regulatory convergence is that contained in two FTAs: the Pacific Alliance and the now relaunched Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). By incorporating both a CRI and PSAs, and framing this directly as a TBT matter, these two treaties most likely constitute the fresh new template for a new generation of regional FTAs. The new model incorporates significant provisions disciplining aspects of human health regulation, offering the best chances so far to allow the birth of a new era of regulatory harmonization, and with it, the possibility to restructure and reshape supply chains.
At the same time, it invites professionals of different disciplines to increase collaboration and mutual understanding. To effectively help life sciences companies navigate these complex times of uncertainty and opportunity, law firms require lawyers from different legal specialties to create the right mechanisms to work more closely, more internationally and with an industry focus.
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?
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 Plan – still to be adopted – guided by a trusted family doctor, and now far more aware through the internet and Big Data.
PAUL DOULTON Founder and Managing Partner of Oriundo
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
Abel Hernández Director General of ANCE
Yoloxóchitl Macías Chief of Health Area at ANCE
Q: Last year, you mentioned that foodstuffs and healthcare represented just 2.73 percent of your operations. How has this figure evolved and why?
AH: The healthcare industry in Mexico is growing quickly and now represents between 15 and 18 percent of our business. Last year, ANCE focused mainly on medical devices but we are also seeing emerging opportunities in biomedicines. The country has many prospects for laboratories, especially in the case of biotechnological products, due to their complex requirements in comparison to small molecules. For that reason, laboratories are investing in Mexico to develop these medications. We believe that ANCE can continue growing in this area at a double-digit rate for the next three years. We believe that biotechnology will continue to strengthen our business.
YM: Due to their complex nature, biosimilars require extensive testing because unlike small molecules, biotechnological products are never exactly the same.
Q: Considering the national and international environment, what changes do you see in investment in Mexican healthcare?
AH: Mexico is a very attractive country for investment. It is a leader in the export of technological products in many different sectors. The pharmaceutical industry will see Mexico as an attractive destination for technological FDI because the country is also an excellent platform for Latin America. It is necessary for the country to develop incentives that can further attract the pharmaceutical industry.
Q: What are the main challenges when commercializing a biotechnological product in Mexico?
AH: The development of biotechnological drugs is often more expensive and takes more time than that for small
BIOTECHNOLOGY WAVE COMING TO MEXICO
ANCE, certifies industry standards and regulatory compliance in many different sectors, including foodstuffs, automotive, electronics and healthcare. In the healthcare sector, ANCE acts as an authorized third party to facilitate approval processes
molecules. The products are patented at the time of discovery but since development and testing can take such a long time, the period of exclusive patented-protected sales ends up being shorter. This can lead the manufacturer to increase the cost of the medication in order to recover its R&D investment.
YM: Patents for biotechnological products last 20 years but the industry is arguing for longer periods. Regulators need to work together with the industry and with academia to balance economic returns and public policies that address access to care.
Q: How can regulators keep up with the fast pace of technology?
YM: COFEPRIS is working hard to keep pace through close communication with technology developers. At this moment there is no regulation related to nanomedicine, so one of the objectives should be to discuss strategies to create related regulations.
AH: Mexico is already a leader in the regulation of medicines in Latin America and it can become a regulatory leader in other areas, such as biomedicine. Eventually, the country will become a reference for the regulation of medicines and medical devices.
Q: What role will authorized third parties play in improving COFEPRIS’ processes?
AH: The overall objective of authorized third parties is to make the registration process more efficient so pharmaceutical products can be put on the market earlier.
YM: Before the introduction of authorized third parties, COFEPRIS had about 8,500 approvals pending. Delays result in significant expenses to manufacturers that had already established timelines to launch the product to market. With medical devices, our response time averages 40 labor days and the shortest time has been 17 labor days, both of which are extremely short in comparison to other companies. With medicines, our average time is 30 work days.
CLINICAL TRIALS: WHERE SCIENCE MEETS REGULATIONS
GABRIEL MARCELÍN Director General of Pharmometrica
Q: What are Pharmometrica’s main priorities?
A: Pharmometrica is a private research center and an authorized third party, which allows it to provide research services to the pharmaceutical industry in accordance with regulatory requirements. We hold a license as a clinical and analytical unit that allows us to perform bioequivalence studies and dissolution assays. We study the efficacy of generic forms of innovative medicines that have already demonstrated to be safe and effective. Bioequivalence research in Mexico has been useful in several areas. Knowing how our population reacts to medicines helps us to modify prescription information to ensure safer and more effective therapeutic schemes.
Q: Are foreign pharmaceutical companies interested in conducting their bioequivalence tests in Mexico?
A: The law states that all generic medicines must be subjected to interchangeability or bioequivalence studies on the Mexican population before being sold in Mexico. While Mexicans are a highly mestizo population, the pharmacological behavior is sometimes surprising. For instance, Pharmometrica’s research team discovered that there are five subpopulations in Mexico, each with its own phenotype for Omeprazol. While some of these phenotypes could intoxicate with a 20mg dose, others will never heal with the same dosage.
Q: What are the main challenges that Pharmometrica has faced in conducting bioequivalence tests?
A: When a patent for an innovative medicine expires, the laboratory that launches the first generic will have the greatest commercial advantage. However, prices fall as more generics enter the market and the pharmaceutical industry then loses interest in that product. One way to help improve the generics market is to create a faster COFEPRIS protocol for authorizations. Research protocols must be verified and approved by independent research 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.
Q: What are the main obstacles to expediting the execution of research protocols?
A: Pharmaceutical companies are manufacturers and the responsibility for the design and execution of research protocols rests with the scientific team of authorized third parties. Bioequivalence studies are neither cheap nor fast. Just one study can cost about MX$1 million and take between six and nine months.
Q: What added value does Pharmometrica offer to entice companies to work at the institution?
A: We have a multidisciplinary approach and we provide coaching services. Pharmometrica is composed of researchers specialized in analytical chemistry, pharmacology, toxicology, statistics and regulatory affairs. We do not merely sell the project; we create synergies with our clients to perform an efficient and enhanced procedure.
Q: What are the main challenges that Pharmometrica has faced while recruiting volunteers?
A: The usual stay of a healthy volunteer is 15 days in a bioequivalence trial, while a clinical protocol entails monitoring a patient for months or even years. Researchers often carry out five to 10 protocols at a time because the pharmaceutical industry pays them for each patient they recruit. A good clinical researcher cannot be handling more than three or four protocols at a time. Pharmometrica can perform up to five bioequivalence studies at the same time.
Q: What does Mexico need to do to attract more opportunities in clinical research?
A: The main constraint is the time it takes the sanitary authority to authorize projects. I think the work should be redistributed and include more extensive training for the ethics and research committees. If a research committee issues an opinion on a protocol, COFEPRIS does not need to review it further.
Pharmometrica is a 100 percent Mexican research center specifically created to operate as an authorized third party. It develops clinical trials in generics interchangeability and bioequivalence
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 on the implementation of technology in the Mexican healthcare system?
HP: Many of our clients have all the pieces, but they do not know how to put them together to extract the benefits technology offers, which is where the external consultant comes in.
XO: New methods and technologies can help patients. For example, a new drug or treatment can heal patients in less time than the current widely-used treatment, which is very important in the public sector since there is a direct relationship to cost of patient care.
Q: What are the most frequent concerns Deloitte’s clients have in relation to healthcare?
HP: Our clients are under pressure to improve the efficiency of their operations. They need to achieve a certain profitability and this makes them explore options to improve their bottom line. Many of the support requests we receive are related to operational efficiency, reducing costs and improving margins.
XO: Customers are interested in improving the client experience but they are also concerned about reducing the launch cycle of any new treatment or molecule. They are trying to identify in which parts of the cycle they can reduce time, since time is money, and they also are interested in comparative price analysis to review how their product compares to those of their competitors. The hospital groups focus on developing centers of excellence or shared services centers to reduce costs and improve quality, which is very common in other countries.
Q: How can a developed logistics sector benefit the health industry in Mexico?
STRATEGIC APPROACH TO IMPROVE HEALTH BUSINESS
Deloitte is one of the world’s leading audit, consulting, tax, financial advisory and risk advisory brands, with about 245,000 people at member firms in 150 countries and territories
XO: There are two factors that are important for manufacturers of health-related materials. First, reduce costs and time, because many products have expiration dates. We also need more support from customs.
HP: Healthcare players are interested in implementing proven models of supply chain management. In fact, references to “sales and operation planning” taken from the manufacturing and consumer industry have been used in the pharma and healthcare industry. The industry has aligned the supply chain and logistics to have the lowest operation cost.
Q: What opportunities will Mexico’s logistics potential provide e-commerce?
XO: In terms of e-commerce, Mexico has improved a great deal, especially in the retail and mass consumption segments. Therefore, the healthcare sector can take advantage of this experience. There are many logistics operators that act as third parties when managing the supply chain of small and medium companies, and pharma companies can take advantage of these suppliers.
HP: It is also possible to get into the business of manufacturing medical devices. Mexico already has experience in the aerospace and automotive industries and the country has gained great recognition in local manufacturing.
Q: Where should players look to increase the potential of the Mexican healthcare industry?
XO: The industry should not lose focus on the conversations between the private and public sectors. In addition, the industry must find innovative means to achieve better communication with the appropriate amount of resources.
HP: At Deloitte, we are adopting a new approach for each industry: digital, plus analytics, plus cloud (DAC). In the healthcare segment this model will be key to take care of business opportunities. In Mexico, the private sector is very close to adopting digital analytics and cloud systems and will soon be followed by the public sector.
INTEGRATING NEW HEALTH
JOSÉ ALARCÓN Lead Partner of Healthcare at PwC
Q: According to PwC’s 21st CEO Survey, Mexico ranked 13th among the best places to invest in 2018, five positions lower than in 2017. Why is investor confidence dropping?
A: Thirty-eight percent of Mexico’s GDP depends on exports. For this reason, the country is more vulnerable to protectionism than others like the US, whose GDP is 12 percent dependent on exports. I am convinced that this is a temporary 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 market in which there is very little competition.
Q: What is PwC’s assessment of the Mexican health system, taking into account global trends in the sector?
A: There is an urgent need to conduct a deep reform of our National Health System to eliminate duplications and improve patient experience. The Mexican government wants to expand telehealth capabilities in public institutions and is developing user-friendly apps for chronic disease prevention and care. Better healthcare information technology could enable health access for 15.5 million additional patients per year in Mexico and reduce spending by US$3.8 billion.
The use of electronic health records (EHR) is uneven. IMSS has made the greatest progress, with separate systems covering all primary care and hospital facilities. The Ministry of Health has EHR coverage in about 25 percent of its public hospitals and a handful of primary care systems. Seguro Popular funded EHR efforts, but funding shortages since 2009 led to a marked slowdown in new projects. Given these challenges, the Ministry of Health refocused efforts on telehealth for professional training and clinical and administrative support in community and specialty hospitals. In 2015, telehealth was present in 671 public medical units, the majority – 450 – of which are in the Ministry of Health. A total of 45,000 consultations were provided at the ministry’s facilities in 15 states, supporting mostly mental health and internal medicine.
Q: How does PwC define the concept of “New Health”?
A: The purpose of “New Health” is to revolutionize the way care is provided. It suggests different transformations within
the system, like consulting a variety of health professionals, not only doctors, and considering other options besides physical consultations, such as mobile or virtual health. Also, there is a trend toward collaborative models that welcome new participants. In Mexico, there is a great need for patients to have one collective voice and “New Health” is helping to strengthen this voice.
Q: Where are the business opportunities in this environment?
A: We see opportunities in the public-private collaboration schemes. The public sector is overloaded, so building more public infrastructure or increasing the number of employees is not the best solution. There are also opportunities in the creation of new payment schemes, like payment based on results. In the public sector, opportunities will revolve around innovative patient-focused access models that help the public sphere maximize resources and acquire the necessary innovation to provide medical care to the population for which they are responsible. In the case of the private sector, the opportunities are in making supply chains efficient and with profitable prices for new players. The distribution game was centralized with the big wholesalers, but now we have retailers and pharmacy chains that are changing ways to compete and introducing fees for service models.
Q: How is PwC increasing access to healthcare through its services?
A: Trust is the basic element. We are convinced that since its foundation, PwC has instilled trust in society and provides solutions to our clients for important issues that contribute to the improvement and transformation of the Mexican health sector. In Mexico, it is important to recognize health as a key factor for having a productive population that contributes to Mexico’s economic development.
PricewaterhouseCoopers (PwC) is one of the Big Four professional services firm. It offers audit, consulting, legal and financial services in different industries, including healthcare. It has international operations and headquarters in London
Neonatal intensive therapy Dräger 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.
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 shifting demographic that are fueling a dramatic rise in diabetes and cardiovascular conditions. As the population gains weight and ages, Mexico’s health system is becoming overwhelmed. A potential scenario is that a sick individual might want to visit a doctor, but whether he can access one will depend largely on factors that are out of his control, such as where he lives, his workplace and his socioeconomic status.
The availability of hospitals and clinics in Mexico varies widely, with Mexico City holding not just the largest number, according to the Ministry of Health, but also the most specialized centers in areas ranging from oncology to pulmonary diseases. A person receiving a cancer diagnosis in Mexico City has more treatment options than someone in the mountains of Chiapas. In the latter case, the individual may have to travel to the state capital to visit a hospital with an oncology unit.
The latest OECD data shows Mexico had a total of 4,538 hospitals in 2017. However, most of those units have been built by the private sector, which held a total of 69 percent of all hospitals in Mexico, according to the Ministry of Health’s latest Report on the Health of Mexicans. Moreover, while the number of hospitals has grown it has not done so equally across the country, with Baja California, Queretaro and Mexico City concentrating most of the new units. Private hospitals are often out of reach to many in a country where 80.4 percent of its working population earns less than MX$7,952 (US$427) per month, according to El Economista.
FRACTURED, SATURATED PUBLIC SECTOR
Despite a higher number of private hospitals, the fundamental problem for their public counterparts remains the same: their services are saturated. Tuffic Miguel, Director of IMSS, says that the government institution provides medical attention to six out of every 10 Mexicans, or 80 million people. So many people visiting so few hospitals translates into long wait times for patients and a lack of resources to care for them. For instance, according to patients and doctors, IMSS clinics faced a two-year drought of hepatitis B vaccine across the country that placed infants at a significant risk. While representatives from the institution minimized the problem at first, it was not
until mid-2018 that state ministers of health from Queretaro to Tamaulipas recognized the problem and announced that it would be addressed.
The problem is compounded by the fact that IMSS is only one of the many healthcare providers in a fractured system. Mexican law states that the government must provide workers and their families with social security but it is estimated that 32.6 million Mexicans do not have access to healthcare services, according to INEGI. For those who do, there is no universal provider of care. Patients are assigned a provider – IMSS, ISSSTE, SEDENA, SEMAR or PEMEX – based on where they work. This is significant because services are not interchangeable. When patients need specialized care that their provider does not offer in their home state, they will not be able to access a nearby hospital from a different network. Instead, patients must travel to the nearest hospital within their network that offers the available service, which may be located several states away.
“In Mexico the lack of coordination and the fragmentation of the health system hinder its potential,” said Guillermo Ferrari, General Manager of Eseotres. The consequences of Mexico’s siloed healthcare system include a simultaneous saturation of some hospitals and the underutilization of others, even if they are next to each other. This results in an inefficient use of resources. In its review of the Mexican healthcare system, the OECD warned that healthcare expenditure is not as efficient as it could be as the country has the highest healthcare administration costs of all its members, totaling 10 percent of all healthcare expenditure.
Unifying these different systems remains a challenge and a goal for the sector. In his campaign proposal to INE, Presidentelect Andrés Manuel López Obrador said that tying these systems together and universalizing healthcare would be one of his government’s objectives. But this goal has been on the books for years and, in the meantime, players in the healthcare sector continue to look for strategies that will increase their reach.
THE IMPACT OF ALLIANCES
Public-Private Associations (PPA) were conceived as a strategy to address both gaps in infrastructure and the limited resources of the public sector. “Our population’s
demand for healthcare is growing fast. If the sector does not grow in turn, many will be left without care,” says Miguel Castillo, Director General of Hospital Sedna. “Public-private alliances allow the healthcare sector to increase its reach, with the patient as the main beneficiary, since it can ensure better care and at a much faster pace.” PPAs consist of partnerships between the public and private sectors in which the latter is responsible for the construction, operation and maintenance of a hospital or the provision of a specific service. Under this scheme, the private partner is compensated by periodic payments or subrogation of the services for a contractually agreed time.
These associations have been well-received by both sectors and are expected to continue as a strategy to increase access to care. “The country will continue facing budget issues, so financing will require innovative strategies. PPAs are one possibility as the private sector is likely the most qualified to provide these services to the public sector,” says Francisco Soberón, Director General of INMEGEN. In 2017, SHCP announced three projects to construct new IMSS hospitals in Nayarit, Nuevo Leon and State of Mexico and a fourth to substitute the current IMSS’ General Hospital of Tapachula, Chiapas (Hospital General de Zona). In July 2018, IMSS’ Miguel said that the institute had completed four more contracts under this scheme.
OUT-OF-THE-BOX THINKING
Another strategy to increase access to care and a business opportunity rolled together are private organizations with services that target the lower or middle class, an overlooked niche. Hospitaria is taking this approach in Monterrey. “Most hospitals in the city either focus on high-income populations while the rest are public hospitals focused on those with low income. There are almost no hospitals for the middle class, so Hospitaria’s services are targeted toward the middle class and lower-middle class population,” says Patricio González, Director General of Monterrey-based Hospitaria.
Privately-operated clinics are also an attractive opportunity for both local and international companies. For instance, Mexican hospital supplier Vitalmex aims to diversify into this sector with the construction of its own private clinics. “In 2018, we will begin the construction and operation of these clinics, which will be directed to a sector of the population that does not have access to services for nontransmittable diseases” says Jaime Cervantes, Director General of Vitalmex. A foreign company that was attracted by this market is Keralty, which comprises a network of over 76 medical centers spread around the world and operates in Mexico under the name Clinitas. “We are convinced there is a need in Mexico for the provision of health services that truly address the basic health problems of the population,” says Massimo Pachón, Director General of Clinitas.
Hospital Christus Muguerza is also looking toward the development of specialized clinics, in this case for cancer. Clinics of this type expect to provide excellent care while keeping costs down by focusing on a single medical specialty. To keep its costs down, salauno, a network of ophthalmology clinics in Mexico City, created a vertical supply chain that can make large acquisitions and negotiate better prices from anywhere in the world, explains Javier Okhuysen, salauno’s Director General.
Another barrier to care is Mexico’s large and complex geography. With the majority of hospitals and clinics clustered in cities, rural towns and communities are often too far away from healthcare services. “Many remote communities do not have health services or only have access to a small, local clinic,” says Ricardo Reyes, Medical Manager of Dr. Vagón, El Tren de la Salud. Dr. Vagón was created to save those living in far-flung communities a lengthy and expensive trip to a hospital by bringing the hospital to them in the shape of an 11-carriage train.
TECHNOLOGY TO THE RESCUE?
As they focus on providing care, hospitals also strive to increase or maintain their customer base, keeping operational costs down, performance up and patient complaints to a minimum. Okhuysen has a strategy to improve its internal operations and the performance of doctors working at his clinics. “We are exploring many areas, including using artificial intelligence in the interpretation of electronic clinical files to help doctors with their decision-making process.”
Technology is increasingly penetrating hospital operations and has the potential to greatly change them. In its report Hospital of the Future, Deloitte states that future hospitals will leverage technology to transform care delivery, patient experience and operations and staff management. Moreover, technology can be used to help doctors improve care by compiling, processing and providing information with which to make decisions. “It is very common for clinics to have a large amount of patient information mixed up and dispersed. Moreover, franchises of the same clinic or hospital do not communicate with each other; therefore, if the patient changes their location, they must again provide all their medical information,” says Jorge Camargo, Co-CEO and Co-founder of Ecaresoft.
However, as Mexican hospitals implement the technology in their practices, the general problem for the healthcare sector remains unchanged. “The great challenge that Mexico has is the fragmentation of data, a direct consequence of the fragmentation of the country’s health system. Therefore, in Mexico it is difficult to produce valuable information about the health sector,” says Xavier Valdez, Director General of IQVIA.
URGENT CARE NEEDED FOR LOCAL HOSPITALS
Key to the performance of any healthcare system are its hospitals and clinics, which provide everything from primary attention to end-of-life care, but Mexico’s booming population has surpassed the capabilities of its hospital infrastructure.
With 1.5 hospital beds per 1,000 people, the country has the lowest number of hospital beds among OECD countries, which average 4.7. Moreover, hospitals are often clustered at
major cities forcing a significant percentage of the population to travel long distances for basic medical attention and even a greater distance to be seen by a specialist. While Mexico’s president-elect has proposed to increase investment in healthcare, others are looking toward telemedicine, smaller and even portable clinics or the use of technology to increase the reach of existing healthcare services.
First-time visit to a general doctor
Follow-ups with a general doctor
First-time visit to a specialist
Follow-ups with a specialist
4,354
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 joining Consorcio Mexicano de Hospitales (CMH)?
A: The consortium now consists of 40 hospitals distributed in 38 cities in 23 states. We have 1,150 beds, 9,000 doctors and 86,100 hospitalized patients. The main advantages are the numerous opportunities to establish contacts. Since most of our members are small to medium-sized hospitals, it is difficult for them to compete with their larger counterparts. These hospitals are happy to share information because due to their location they do not compete with each other.
Membership also allows these hospitals to participate in consolidated sales and negotiate better prices for medications and medical devices. We are the country’s first private healthcare network but many more can be generated in the coming years.
Q: What information is exchanged among members of the consortium?
A: All members participate in yearly meetings according to area, from management to marketing. In these meetings, hospitals share successful strategies and discuss common problems.
Q: How is the consortium implementing a single electronic clinical file among its members and what advantages will patients see?
A: Apollo Health, one of our strategic allies, is in charge of implementing and managing electronic clinical files in all hospitals that belong to the consortium. Together, we are developing Sumar Salud, an application through which patients can access their own electronic clinical file and share it with other hospitals in the network. Sumar Salud was designed to gather all the information related to service providers, including doctors, hospitals and clinics
Consorcio Mexicano de Hospitales groups several private hospitals for the development of innovative business models and to consolidate growth. The consortium provides training programs for its members
to make it easier for the patient to review and make more informed decisions.
Q: How does this hospital network help improve the overall healthcare system?
A: We are the first private healthcare network in Mexico. We want more hospitals to join this model and increase access to care, since the public sector lacks the necessary infrastructure to manage the large number of patients it receives.
Mexico’s healthcare system focuses on treating diseases, not on promoting healthcare. For that reason, many are looking to strengthen prevention practices. Sumar Salud also brings together these services, so those who are healthy can continue to be so. To implement this, the consortium developed two insurance plans alongside Seguros Atlas and Banorte that cover 90 percent of the most common diseases with a small deducible. These insurance programs aim to reduce out-of-pocket expenditure.
Q: What continuous education programs does the consortium provide to its members?
A: The Consortium has an Integral Training Center which develops and strengthens the skills of all collaborators through our special programs for the direction, management and operative levels distributed on the clinic and administrative areas. These programs are headed to elevate the quality service and the effectiveness in their hospitals, resulting in the increase of their competitiveness in the market.
The Integral Training Center collaborates with the international organization LILAS, integrated by the national hospital associations of Argentina, Colombia, Brazil and Spain, and also with universities and medical academies.
These latter entities contribute with their academic experience and help to validate our diplomas, which are already validated by the Ministry of Labor and 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
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.
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.
NONPROFIT HOSPITAL FINDS BALANCE BETWEEN GROWTH, COMMUNITY SERVICE
JUAN GALINDO Chief Medical Officer of Christus Muguerza
Q: How is Christus Muguerza increasing access to healthcare while balancing its budget?
A: Our vision is to provide care to those who need it most, so we are looking for strategies to ensure that while reinvesting all profits in the hospital’s infrastructure and into community service, as stated in our mission. In 2017, the health system spent over MX$100 million on community services and during the first six months of 2018 we have already surpassed that amount. About 90 percent of our patients are covered by insurance and this helps us provide services free of charge to those who need them.
Q: What are the main capabilities of Christus Muguerza’s new transplant center?
A: One of our most effective programs is for lung transplants and in the last ten months we performed three successful surgeries. The first lung transplant performed by one of our hospitals in Monterrey occurred in 2017 and used extracorporeal membrane oxygenation (ECMO). There are few centers in the world that can use this technology and we are the only one in Mexico.
Q: What would you identify as the main barriers to performing transplants in Mexico?
A: The bigger barrier is the lack of awareness and education in our country, then the costs. Organ transplants are highly expensive. Beyond the transplant itself, patients will require expensive medications for the rest of their life to fight against organ rejection. These patients also need monitoring and comprehensive follow-ups.
Q: How is Christus Muguerza expanding its footprint in the country?
A: In the short-term, we will build our fifth hospital in Monterrey. We are also developing a series of centers in urban areas that will be dedicated to outpatient surgeries.
Hospital Christus Muguerza, launched in Monterrey in 1934, operates nine hospitals in five Mexican cities. The hospital also manages 18 clinics across Monterrey, Saltillo, Chihuahua and Reynosa
We are also building centers for cancer treatment, of which we will build two within the next three years in regions that do not have clinics of this kind. Our growth strategy takes a two-prong approach. The first is the construction of a new hospital, but this strategy is highly time-consuming and regulations in Mexico change significantly from state to state, making the construction process even slower. For that reason, we prefer a second approach that involves allying with local partners that represent us in the local community and teach us how to operate with the locals.
Q: How can hospital cancer centers innovate in the treatment of patients?
A: The design of these centers was inspired by some of the most advanced cancer clinics in the world. In addition to radiotherapy and chemotherapy, our goal is to provide a comprehensive service that includes a psychologist, a nutritionist and other support professionals. The centers will also provide patients with a concierge who will lead them through every step of their treatment, from scheduling appointments to treatments and clinical tests.
Q: How is Christus Muguerza developing and implementing technology at its hospitals?
A: After two years of analysis, we will soon launch our electronic medical records across all operations within a hospital. We are building a program specific to the Christus Muguerza network to avoid any errors. We are working with Philips’ TASI software and within the next five years the software will be implemented at all hospitals belonging to Christus Muguerza.
Q: How will electronic medical records be shared with hospitals in different networks?
A: The information belongs to the patient. Our partner, Christus Health, operates three electronic medical records within its hospitals. Having different systems allows the network to learn to bring together that information. Mexican hospitals are reluctant to share information, which greatly complicates patient care. To address this, in the second phase of this project we will create a platform for patients that will give them access to their medical files.
VISIONARY LOOKS BEYOND EYE DISABILITIES
JAVIER OKHUYSEN Director General of salauno
Q: How are vision disabilities impacting Mexicans and how is salauno addressing these issues?
A: Vision problems are the second cause of disability in Mexico. Approximately 2.5 million people suffer from cataracts. salauno provides surgery for all types of vision problems, but cataracts represent 50 percent of our surgical volume. Cataract surgery is proven to have a positive effect on the patient’s quality of life.
At salauno, we also provide surgeries for glaucoma, retina, LASIK, eyelids and ophthalmic pediatrics. The company has faced many hurdles; for instance, Peña Nieto’s government removed cataracts from the Seguro Popular’s Catastrophic Funds, which was a grave hit for us. However, we have received great support from our employees and investors, which has allowed us to prevail. We are investigating the possibility of expanding our model to other medical specialties since about 70 percent of our practice could be transferred to different types of surgery.
Q: What are the main access barriers to cataract surgery?
A: Geography is one of the main barriers. Our objective is to bring eye surgeries to the population by establishing more clinics to overcome these geographical hurdles. Another issue is misinformation, as many people believe that these surgeries are not safe. We strive to educate both patients and general doctors regarding the benefits of surgery to ensure that patients come to us before it is too late. The last barrier is economic. Often, low-income patients are unable to afford the surgery but at public hospitals they face long wait times to receive attention.
Q: How has salauno expanded its operations?
A: We have 240 employees at 11 clinics and a 4,000m 2 surgical center. Our goal is to provide surgery for 25 to 30 percent of the annual eye surgeries by 2025. The 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 percentage to increase to 30 percent, our business model is perfectly sustainable without the participation of the public sector. salauno has grown at a healthy pace during its six
years of existence. Our motto is, “do well by doing good.” For that reason, we implemented a program that provides free or subsidized surgeries per every certain number of paid surgeries. We are also working with Fundación Cinépolis and several public institutions, including Seguro Popular in Hidalgo, Mexico City and State of Mexico and IMSS, ISSSTE and PEMEX.
Q: How is salauno redefining healthcare and the business of providing care?
A: Two years ago, we decided that the solution to the lack of access was not only to build a large number of clinics throughout Mexico but to take advantage of technological trends. We have created electronic clinical files specifically for ophthalmology and based on a customer relationship-management platform that allowed us to greatly improve the way we attract patients through our digital platforms. We can now provide follow-ups using cellphone messaging and email, allowing us to be in constant contact with patients. We are also developing an app that incorporates both healthcare and financial services to the benefit of our patients.
To become a technological company will be a continuous process. We are exploring many areas, including using artificial intelligence in the interpretation of electronic clinical files to help doctors with their decision-making process.
Q: What must be done to boost health coverage in Mexico and what role should public and private institutions play?
A: Health reform is both urgent and necessary. IMSS, ISSSTE and Seguro Popular need to share services because while some hospitals are full to capacity, others are empty. While some institutions are already sharing services, there is still a lot of work to be done.
salauno provides low-cost cataract surgery and eye-care services to low-income Mexicans. The center also provides other surgeries at a lower cost, including LASIK, glaucoma and retinal surgery
THE HUB-AND-SPOKE HOSPITAL DESIGN
GUSTAVO FERNÁNDEZ DE LOYOLA
CEO of Grupo Torre Médica
Fragmentation increases the country’s endemic inequality; that is, people with higher incomes have much greater access to health, while the lower-income population can only use public institutions. The so-called hub-and-spoke business model employed by companies like Grupo Torre Médica can help address that imbalance, says company’s CEO Gustavo Fernández de Loyola.
“We focus on providing medical care to the middle to low-income segment of the Mexican population, which is the largest in the country. We have addressed this need with our two hospitals and five clinics in Mexico City, but we are planning to increase this offer to 10 hospitals and 20 clinics in and out of the city.”
To achieve its objectives, Grupo Torre Médica relies on the hub-and-spoke model, which allows the company to provide an efficient and high-quality medical service at a low cost through networks that allow broader coverage with fewer human and economic resources. “Our hospitals and clinics are organized to provide a specific type of service; at the clinics, we assist 98 percent of our clients with basic diagnosis; we treat more complex cases at hospitals. This structure allows us to increase our profitability without sacrificing the quality of our services,” says Fernández de Loyola. Also, the hub-and-spoke model is considered a solution for reducing geographic inequality in access to medical care since it is designed to manage the high demand for services and redistribute it to deal with saturation.
The development of the hub-and-spoke model allowed Grupo Torre Médica to update its services and technology to the equivalent of midlevel hospitals. Its investments in new technologies also help enhance the services offered to this sector of the population. Along that line, it has integrated a digital platform that contains 100 percent of its records. “This helps us get closer to medical institutions where we can obtain valuable information and create training for our health personnel and the health industry in general,” he says. “In 2017, we gathered approximately 8,000 digital records to analyze trends in orthopedic
injuries in the country and created standardized treatments to improve patient recovery. Now, we are promoting a program to train our doctors in orthopedic injuries, which will result in a benefit for hospitals and patients.”
Another point of differentiation for Grupo Torre Médica’s business model is its commercial area. “The hub-and-spoke model relies on medical service payers like insurance companies to bring in patients. We work with these companies to reach commercial agreements that allow us to take patients to our clinics and hospitals,” Fernández de Loyola says.
The model also influences how doctors get paid, making it easier to provide a fixed salary or a variable income depending on performance. This motivates them to focus on practicing quality medicine rather than seeking patients for the hospital, says Fernández de Loyola. Grupo Torre Médica has attracted around 120,000 patients a year as a result. The model has also inspired its doctors to develop a medical specialty. “Our doctors are 60 percent specialists and 40 percent non-specialists. We have approximately 480 employees: 100 doctors and 200 nurses. The remainder is made up of administrative personnel,” he says.
Using the hub-and-spoke model has also had positive effect on the company’s growth opportunities both inside and outside Mexico City. “We have a longer reach to cities like Queretaro, Pachuca, Toluca and Cuernavaca because we can efficiently manage our network of hospitals and clinics to provide wider coverage,” says Fernández de Loyola.
Cost-efficiency and improvements in quality processes have also attracted partners like insurance companies, which translates into an increase in patients and greater growth. “In the coming years, we are expecting to grow our patient capacity 30 percent and to increase sales by 40 percent as our infrastructure ensures us the possibility to introduce more volume without compromising the patient’s security and care,” Fernández de Loyola says.
BUILDING A USEFUL SYSTEM
JAIME CERVANTES CEO of Vitalmex
Q: Last year, Vitalmex was analyzing the possibility of developing its own clinics and hospitals for chronic diseases as part of a 10-year plan. How has this project evolved?
A: We conducted the necessary market research, through which we evaluated different hypotheses, and we also carried out a geographical study across the country to pinpoint appropriate locations. In 2018, we will start the construction and operation of these clinics, which will be directed to a sector of the population that does not have access to services for non-transmittable diseases.
The most interesting part of our model is that it will benefit both patients and the health sector. This infrastructure will help the government reduce its investment in this specialty and will promote joint private-public investment to care for patients from the low-income population.
Q: What are the main challenges that arise when developing projects for this population niche?
A: When people need expensive surgeries, they try to delay them to protect their expenses. People in segments D and E have an income of less than MX$31,000 per year, less than the minimum wage, so we must help them save money and introduce them into the banking system. This project requires that we educate patients and their families, since families will also participate in the recovery of the patient.
Q: What can this model offer to the public service?
A: We take ideas from different countries. For example, the idea of family participation comes from India and the idea of accessing the clinic with a fingerprint comes from Chile. We want between 20 and 30 percent of the project’s capacity to be used by the government. We also can help the public sphere in specialty areas where the government lacks presence. Patients affiliated with social security are not our market; we want to help those who do not have access to any type of coverage. We want to formalize this population group through their experience in healthcare.
Q: What type of financial schemes will you provide?
A: The objective is to make sure money does not become a barrier. In Mexico, 50 percent of health expenditure is
private and 93 percent is out-of-pocket. It will be wonderful when patients arrive and can scan their fingerprint to gain access. In that moment, an automatic payment will be initiated from the insurance company and each week they will pay a portion of the expense. They can also pay for six months through weekly payments.
Q: What are the company’s longer-term plans?
A: Vitalmex’s priority is to grow with the opening of new markets. We like working with the government because it is a very good partner. However, we are now diversifying, so we are exploring projects in the private sector. There are many services in which we can contribute; for example, the productivity in surgical rooms at private hospitals is very low. There are many opportunities to create synergies between the public and private sectors to generate economies of scale, which require an element of articulation. Vitalmex could be that element. The Iztapalapa Hospital, the Leon Hospital or any of the existing PPAs were not planned correctly and they are under-used. There are almost 2,900 private medical units in Mexico that are underutilized. Our goal is to improve private and public integration through scalable economies. We also want to become the link that guarantees the same level of care regardless of a patient’s status and background.
Q: How can a future Health Reform adapt these models?
A: First, it should focus on making the acquisition law more flexible, since this flexibility could open space for new models, such as micro PPAs and mid and shortterm projects that could address specific needs. Another reform should focus on the certification process. Quality certifications should be strengthened for health service providers because there is an extensive black market and it is affecting the economy. We also must include in the reform sanctions for corruption in the sector.
Vitalmex is a Mexican company present in more than 67 countries. It is a consultancy that helps clients improve their business model. The firm has three main lines of business: imaging diagnostics, surgery and treatment of chronic diseases
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 sectors carry out to improve universal access to health in Mexico?
A: One of the main problems we have is that there is a legal differentiation among the different sizes and types of institutions that provide health, such as hospitals, clinics and sanatoriums. Mexico has a large number of registered hospitals, but only about 50 of every 3,000 have a capacity of more than 100 beds, which creates a market dichotomy regarding people’s access. The private sector should concentrate its efforts on improving access by increasing insurance policies as well as influencing prevention. To make this happen, insurance companies and hospitals must change their business model to lower insurance premiums and increase at a faster rate the possibility of people having access to private healthcare. There must be an improvement in the synchrony of the three entities that deal with the patient, which are the hospital, the doctor and the payer of the services.
Q: How does Hospital San Ángel Inn face situations like the aging of the Mexican population?
A: The culture of prevention will be a determining factor in Latin America. In 25 years, the region will have the most adults in the world, which in turn will drive the need to implement services that are not yet consolidated in the industry. Private hospitals are creating a prevention culture in Mexico, a key to containing the growing demand for specialized services. It is necessary that other players, such as insurance companies and health institutions, participate in this change of mentality. In the case of hospitals, the key factor is to reform their commercial model and improve people’s access to private medical care, so from the beginning there is a full notion of self-care and prevention for the patient.
Q: What have been the main advances regarding the implementation of Big Data in Hospital San Ángel Inn’s activities, both medical and administrative?
A: Hospital San Ángel Inn has a universal electronic file for medical information that operates within our hospital network. Patient information is protected and available so that both the doctor and the patient can request it if needed. We use the electronic health registration system HL7, which allows
us to create the profile of our patient and to organize it in different clinical areas. If all hospitals, both public and private, replicated this same model we could talk about a mechanism that addressed health from a macro perspective. The General Health Law and the Data Protection Law will face a challenge when approving the regulations for this future project but it is also necessary to bring this option to the population.
Technology can become a catalyst to improve Mexico’s healthcare system. Mexico should have a technological system that allows the tracking of clinical records, similar to the Tax Administration Service. Technology is not the problem, distribution is. The technology has not reached all sectors equally. Creating a universal electronic file could exponentially change universal access to healthcare.
The application of technology and the approval of a Health Reform would improve the provision of medical services in Mexico. Implementing electronic files at all institutions would be a good start.
Q: What makes Hospital San Ángel Inn as attractive as its bigger competitors and what are your growth expectations?
A: We recently opened a short-stay clinic with the goal of improving the cost-efficiency of our services. We believe that the right distribution of cases between our hospitals and this clinic will allow us to provide the right services to the people who need them. This new clinic is projected to reduce the cost of surgical interventions by 40 to 50 percent, since the cost of a short stay clinic is much lower than that of a hospital. This clinic model operates two shifts per day, closes at night and does not open on Mondays, so the operating cost is considerably reduced. It is also innovative in the facilities and amenities offered to patients compared to other clinics in Mexico City.
Hospital San Ángel Inn is a chain of Mexican hospitals specialized in the treatment of obesity, diabetes and skin cancer. Also, it provides services such as chemotherapy, radiographs, magnetic resonance, blood count and microbiological cultures
MEXICAN LAB AIMS TO TRAIN FUTURE GENETICISTS
ROBERTO GUEVARA Director General of Laboratorio Biogen
The mapping of human DNA opened the door to new medical approaches and to a better understanding of known diseases. Cytogenetic testing, the study of chromosomes, has provided doctors new tools to identify and fight diseases. While there is still much to be done, the field offers multiple benefits, says Roberto Guevara, Director General of Laboratorio Biogen. “Genetics plays an important role in every medical area, from immunology to pediatrics.”
Companies like Laboratorio Biogen, which has been spearheading cytogenetics research since 1986, have a role to play in providing affordable testing services while also educating Mexico’s future geneticists to help the country contribute to global research efforts, says Guevara. “We have trained many doctors, chemists and biologists in the area of genetics.” This is also beneficial for Laboratorio Biogen as former students know where to refer a patient, Guevara adds. The lab will take part in the 18th actualization course on human genomics taught by national experts in the area, which will focus on quality control in the teaching area of genetics, classical and molecular and cygenic biology.
Cytogenetics has come a long way in the last two decades and is now an important tool to study human diseases. This research field allows geneticists to label the chromosomal location of any gene, determine if specific regions of chromosomes have been lost or gained and the subsequent implications on specific diseases. There is still much work to be done, says Guevara, whose laboratory performs a broad series of clinical analyses, including paternity tests, amniocentesis, bone marrow, karyotypes triple marker, mass sequencing and micro-ranges. “Cancer is one of the largest research challenges in the world and Laboratorio Biogen is part of those research efforts.”
This branch of medicine allows scientists to map genes to specific chromosomes or regions. Humans generally have 23 chromosomal pairs and their deviations can be directly related to several diseases; for instance, Turner Syndrome occurs when an individual is missing an X
chromosome, while an extra chromosome 21 is associated with Down Syndrome. “A common problem we see is gender assignation with newborns who show genital ambiguity as they might be XXY or X instead of XX or XY. We also perform prenatal tests to identify Down Syndrome and other genetic conditions,” says Guevara, who adds that the laboratory mostly conducts these types of tests because public healthcare institutions are unable to meet the demand for them.
Guevara hastens to add that the role of chromosomes in many diseases is still being studied. “There are specific markers for leukemia in children and adults, but through the use of fluorescent in-situ hybridization (FISH) we can detect their presence in specific individuals. Our efforts have supported research groups collaborating with Novartis for the generation of a series of medications targeting specific types of leukemia,” he says. FISH uses fluorescently labeled probes that attach to specific parts of a chromosome, allowing researchers to identify particular DNA sequences using a microscope. This technique is used to diagnose several diseases including Down Syndrome, cri-du-chat syndrome, Prader-Willi syndrome and some types of leukemia. “Our laboratory in Mexico City has all the necessary capabilities to take and measure samples. We recently acquired a computerized microscope that is programmed with chromosome recognition software and image capturing for FISH. This was necessary as we are performing a growing number of studies.”
Laboratorio Biogen used to hold the lion’s share of the market, but a growing number of laboratories are entering and growing thanks to agreements with public hospitals. As competition heats up, the laboratory’s goal is to offer accessible services to low-income individuals, says Guevara, while remaining at the forefront of technology. “We are among the few laboratories in Mexico with capabilities for hybridization in-situ tests. Laboratorio Biogen performed the first study of micro-arrangements in Mexico alongside the National Institute of Genomic Medicine and our objective is to continue bringing new technology to the country, such as other molecular techniques.”
ACCESSIBLE, EFFECTIVE AND DIGNIFIED RENAL CARE
ANDRÉS GUTIÉRREZ
CEO of Médica Santa Carmen
Q: How is Médica Santa Carmen redefining the renal health business?
A: At Médica Santa Carmen, we focus on what is needed and imagine what could be possible for renal patients to live a healthy, happy and productive life. What is needed today is accessible, effective and dignified care. Mexico needs more clinics to boost access with cheaper and easier payment methods, including the possibility for universal care. It is also essential to have better clinical results, evidence-based medicine, hygienic practices and the implementation of international safety standards to improve kidney health. We consider that a patient-centric long-term view is key to redefining renal-patient care. We need to stop defining the condition when a person’s kidneys stop functioning as insufficiency or end stage. While stage 5 chronic kidney disease (CKD) is currently irreversible, patients can live a long, high-quality life with available therapies like dialysis. We are not far from having stem-cell, genetic and other bio-tech based solutions that closer mimic the original kidney function.
Q: Why did Médica Santa Carmen decide to focus on renal health?
A: We started out by observing the large gap between the growth in kidney disease cases and the quantity and quality of clinics available. Diabetes, hypertension and other public health concerns contribute to the high incidence of the disease in Mexico. The counry has over 10 million people with some form of kidney damage, of which between 200,000 and 300,000 have stage 5 CKD requiring dialysis or transplant. It is also estimated that one in every two Mexicans does not have access to therapy and a third of the facilities that can provide treatment do not comply with the Ministry of Health regulations. Dialysis is expensive, unsustainable for most individuals and yet there are few alternatives. We see an opportunity to change renal care in Mexico.
Q: What differentiates Médica Santa Carmen from other providers of renal care services?
A: Médica Santa Carmen is distinguished by its specialization in renal health and by offering individualized,
multi-disciplinary and standardized care. We focus on kidney disease therapies, opportune diagnosis and at-risk and mass prevention efforts as our broad scope to reduce the prevalence of the disease. Mexico has less than 1,500 nephrologists in a highly fragmented care environment among dialysis clinics, public hospitals and private practices.
Q: What has Médica Santa Carmen identified as the main needs for encouraging renal health?
A: We believe that awareness and clear care “action paths” are essential to achieve a measurable impact in reducing CKD prevalence. Most people are unaware about chronic kidney disease as it is generally asymptomatic. The goal of Médica Santa Carmen’s ‘Check Your Kidney’ (#RevisaTuRiñón) campaign is to raise consciousness and emphasize prevention through basic screening tests.
Q: What are the main concerns faced by renal patients?
A: Patient experience is something that is a real concern, especially for patients living with CKD Stage 5. We try to be very aware of the physical, social, economic and other hardships which patients face. We’ve designed our systems, processes, and organization around making the patient journey more pleasant. Coordinated care among specialists such as dieticians, psychologists, laboratories and other providers is key to improving the length and quality of life.
Q: What are your main objectives for 2018 and what role will certifications play in them?
A: We are growing at a very fast pace and need to ensure the best patient care while scaling from seven clinics, a vascular surgery center and a laboratory to 35 clinics by 2022 and 200 clinics by the end of the decade. We are as good as our last patient encounter. Certifications from the Ministry of Health, ISO9001 and the Global Impact Investing Rating System communicate our commitment.
Médica Santa Carmen is a network of ambulatory clinics and kidney centers in Mexico. Santa Carmen offers individualized services related to nephrology, hemodialysis, peritoneal dialysis, nutrition, vascular accesses, psychology, diabetes and transplants
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.
ONE OF A KIND HOSPITAL TARGETS OVERLOOKED NICHE
PATRICIO GONZÁLEZ Director General of Hospitaria
Q: How is the Hospitaria business model different from other hospitals in Monterrey?
A: There is an overlooked niche for mid-priced hospitals in Monterrey. Most hospitals in the city either focus on the high-income population or are public hospitals that target the low-income segment. There are almost no hospitals that specifically target the middle class.
Our prices are highly competitive in comparison to other hospitals in Monterrey. Hospitaria is profitable, although its operating market is smaller than that of other private hospitals. The government should support smaller hospitals since their existence helps improve the quality of life of this population segment.
Q: How is the hospital ensuring the quality of its services?
A: We are a primary and secondary care hospital focused on general medicine. The hospital is certified by the General Health Council, which is a comprehensive certification that reviews national and international standards. While we did analyze acquiring the Joint Commission International (JCI) certification, the General Health Council certification is even stricter regarding procedures and patient safety. We are analyzing the incorporation of the ISO certification, which we hope to have by 2019. The hospital is also investing in our imaging area by updating our six-slice computed tomography (CT) scanner to a 128-slice CT scanner and our 0.3T nuclear magnetic resonance (NMR) machine to a 1.5T NMR. This equipment will give us unmatched capabilities in the area in terms of imaging. Radiocare is our strategic partner and is helping to implement these changes. Our medical center handles a high number of emergencies, with about 120 rooms and 250 doctors.
Q: What are the hospital’s expansion plans and what alliances are necessary to achieve them?
Hospitaria, launched in 2013, is the first complete medical center located in the north of Monterrey. It has 50 beds, five surgical theaters and two intensive care units. The hospital has been certified by the General Health Council
A: Our long-term goal is to have 10 hospitals across the country, while in the short term we will focus on consolidating this hospital. We are working on two business areas with insurers: major medical expenses and emergency care. At this point, we are working with insurers to help them develop the market for car and school insurance.
Q: How is Hospitaria attracting new patients?
A: We see between 5,000 and 6,000 patients per month and most of these are referred to us by other doctors. Especially in the case of surgeries, doctors choose to send patients to a hospital according to the margin of benefit that they can obtain once they subtract the hospital’s costs. In these cases, the quality of the hospital is a secondary consideration. For that reason, it is necessary to enforce regulations regarding hospital certifications.
Q: What are the main challenges in implementing electronic clinical files?
A: The electronic clinical file is necessary and would be beneficial for both doctors and patients, although there is some reluctance to implement it. The collection of information for the electronic clinical file often takes a long time and doctors, who already feel pressured, are often unwilling to take the additional time to fill them out. In most cases, the doctors are not hospital employees and they only rent a space in the facility so it is difficult to convince them to fill out these documents. Moreover, because of Mexican regulations, doctors still must print the file to sign it, which makes electronic clinical files essentially pointless.
Q: How is the hospital adapting to Mexico’s epidemiological profile?
A: We are planning to continue growing our number of 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 and pediatrics capabilities but within the next 10 years the region will need to deal with more highly complex diseases. For that reason, we are planning to develop a hemodynamics unit within the next two years.
CLEAN PRACTICES FOR A BRIGHT FUTURE
JOSÉ LUIS JACQUES Director General of Lavartex
Q: Why is Lavartex the best option for renting and washing specialized textiles for the health industry?
A: We are a company with more than 96 years of experience delivering a solution of rented and laundered textiles in three commercial divisions (hospitality, healthcare and uniforms for industries). Our added value is our accumulated expertise, in addition to our nationwide coverage, 10 industrial laundry plants, eight distribution centers and a cutting and sewing facility. We like to invest in quality and in creating a world-class service for our customers, to whom we provide a solution that minimizes operating costs and maximizes several qualitative values such as hygienically clean products, sterilized textiles, security of continued furnishing and clean green services. Also, we are a member of the Textile Rental Services Association of America (TRSA).
Q: How does the Lavartex Quiropaq brand adhere to the quality and hygiene demands of the industry?
A: Our product-service Lavartex Quiropaq satisfies the cleaning needs of large, small, public or private health institutions. It provides sterilized textiles for the operating rooms. Our services are the best, regardless of the size or type of client because our commitment is the same for everyone. All our product-services are backed by sustainable practices, with low water consumption and high-end cleaning technology.
Q: What is the proportion of clients that Lavartex has with private and public health institutions?
A: Our demand is measured by the nature of the Mexican health system where approximately 65 percent of services are concentrated in the public sector and 35 percent in the private sector. Lavartex works with both the public and private healthcare sectors according to rigorous standards and procedures that are backed by international 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 these certifications, we assure our customers that a third party validates our quality and service. In Mexico, there is a very basic regulation of inspection of companies that
offer laundry services, which is why we are one of the few companies that offer a validated world-class service. This also provides added value to our customers.
Q: Why is Lavartex the best partner for those hospitals and institutions that endorse the best practices in the industry?
A: Hiring Lavartex’s solutions can lead a health institution’s own promise laundry (OPL) to move from being a cost center to an income center, since the resources allocated to the cleaning and control of textiles can be assigned to other relevant areas of investment. Lavartex meets the needs of different hospitals, which makes us the best partner to save time and maximize hospital performance.
Q: How important is technology to the services Lavartex offers?
A: We use state-of-the-art technology to guarantee the quality of our hygienically clean solutions, which are also environmentally friendly. We are considered a green company because all our laundry systems are carried out according to a strict water-saving protocol. While a conventional washing machine uses between 35 and 45 liters per kilogram of laundry, Lavartex uses only 6 liters per kilogram.
Q: What are the company’s three main goals for 2018?
A: We will continue to expand nationally because we still have opportunities for growth in all the divisions in which we participate. Also, Lavartex plays a key role as a leader in shaping the regulation of the laundry industry. The company expects to continue implementing the concepts of hygienic cleaning and sterilization in Mexico because there is still a large gap in these services. If all the companies in the sector move toward complying with the regulations of the most developed countries, we believe that Mexico could meet the OECD and WHO standards.
Lavartex is a Mexican company founded in 1922 that specializes in the rental and washing of textiles for hospitals, hotels, restaurants, sports clubs and manufacturing companies. It has a nationwide presence in Mexico and 11 world-class certifications
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 MDF after 14 years of working in the health industry?
A: The regulations and regulatory frameworks for the construction of hospitals in Mexico have changed over time and COFEPRIS has been key to achieving a better framework for medical infrastructure. Before, it was very easy to obtain health licenses and build hospitals regardless of regulations. Also, it was thought that any architect could build a hospital because there was no emphasis on the conditions that are now necessary to build a health institution. This evolution has benefited Grupo Empresarial MDF, which absolutely adheres to official health regulations; the company does not build a project that is not accepted by the authority itself.
Q: What details have you have mastered when planning and building specialized facilities?
A: In comparison to other companies, MDF focuses not only on planning and building hospitals of greater quality, but also follows up this process with proper documentation. Quality in construction is not only found in the physical parts of a project but also in the documents that explain in detail how the building was built. MDF always tells its clients there is a difference between spending and investing. While an expense has no return of benefits, an investment always does. MDF offers its clients an investment opportunity.
Q: How do your consultancy services benefit the hospitals and clinics you collaborate with?
A: Grupo Empresarial MDF’s business model goes beyond building and planning construction projects for the health sector. The company provides counseling services based on marketing and business studies to maximize its clients’ business opportunities. For example, MDF worked with a client that wanted to build four towers of rental medical offices in front of a hospital. MDF evaluated the project
and showed that the hospital would benefit more from the construction of the towers than our client. For the same investment, MDF presented a proposal based on the current trend of building smaller hospitals or clinics close to bigger hospitals to transform those four towers into a hospital that would deliver areas of care not covered the other hospital. While the original project expected a return on investment of 14 years, the hospital designed by Grupo Empresarial MDF offered a return on investment of six years.
Q: According to the OECD, promoting the construction of hospitals in Mexico could bolster access to health. What is Grupo Empresarial MDF’s view?
A: Health in Mexico is poor because the private and public health systems together cannot cover more than 60 percent of demand. Today, health has become a business and the market has evolved with greater specialization. Before, ophthalmic surgery required a patient see a specialist who later recommended a hospital to carry out the surgery. Now, most of these surgeries are done in ophthalmic clinics.
Clinics are filling the gaps left by large hospitals and offering greater specialization at more competitive prices. This dynamic is bringing health services closer to the population, but also encouraging service providers to focus more on patient care. Clinics and other similar institutions have been able to modify healthcare in Mexico with greater speed and at lower prices than traditional options. In the end, the combination of both hospitals and clinics creates a much wider coverage that generates greater access and quality.
Q: Who are MDF’s main clients and what is the ideal publicprivate mix?
feasibility studies and advice on regulations for the construction of health infrastructure
A: Our clients are mostly in the private sector because, unfortunately, we have not been able to collaborate with 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 opportunities but also better opportunities to provide greater access to health in Mexico. If someone from the government arrives with a clear and honest project that considers the health of Mexicans, we will accept it.
Grupo Empresarial MDF is a design, construction and hospital equipment company with 15 years of experience in Mexico. It also provides consulting services, planning,
NEW ENGAGEMENT MODELS FOR BUSINESSES WITH GREATER VALUE
MANUEL SÁNCHEZ Director General of Diphsa
Q: How does Diphsa’s comprehensive business model integration bring added value not only to customers but to suppliers and partners?
A: The vision of the company was redesigned with a more human purpose. Diphsa believes that the future commitment with collaborators, partners and the entire ecosystem should be oriented toward patients. New participation models must address the patient’s health problems.
At Diphsa, we are achieving this through a change in our business model to develop valuable relationships with our customers and partners. We are part of the transition to these new businesses models based on an environment of high competitiveness, globalization and dynamism. For companies like Diphsa it is necessary to start by knowing how to make a company generate value despite generational gaps.
We have learned that a multidisciplinary approach is necessary in the field of health to be able to face the challenges involved in medical, administrative, and financial decision-making processes. Also, this scope in health institutions helps to reinvent business models and offer a continuous added value for the patient. We are investing in key areas such as internal technology management and staff training. We believe that having a human capital with high development of leadership skills and emotional intelligence is necessary to create an environment that generates greater value.
Q: Why is Diphsa the best ally for Mexican hospitals that seek to contract hygiene engineering services?
A: Our philosophy of empathy and our new business model allow us to find solutions to the problems that hospitals have. We do not have standardized solutions because we offer personalized and specialized services for each of our clients. Diphsa focuses on long-term relationships with its customers, so hospitals can consider us reliable partners because we conduct our relationships beyond commercial matters; we care about our customers.
Q: Technology has become a differentiating factor for business. What role does technology play in the products and services Diphsa offers?
A: Diphsa is collaborating with labs to boost digital participation. Our recent change is opening the possibility of exploring unexploited opportunities through technological platforms to offer better services. Also, we are starting to develop an algorithm to analyze our database and carry out analytics and make more precise recommendations to our customers. Our first step is to collect data more efficiently to structure it better and generate data analytics that better support our services.
We begin all our professional relationships with empathy as this approach helps us to better understand the conditions, challenges and needs of our customers and partners to create personalized and focused solutions. At Diphsa, we are committed not just to selling our services but to solving the problems the client faces. The company is digitalizing its front office to improve diagnosis and sales services to hospitals through a mobile app that will be launched in 4Q18. We are moving our salesforce from a face-to-face model to a digital model to improve the quality of our services.
Q: How is the use of oxygen in the health industry evolving?
A: The oxygen industry is in transition toward a new vision of the self-generation model but if the health industry wants to achieve this successfully it will be necessary to offer better financing opportunities for hospitals. More customized financial solutions can increase the profitability of the institutions and ultimately boost economic performance of the sector. Mexico’s problem is not in the infrastructure of the hospitals, but in the lack of an adequate business model.
Diphsa is a Mexican hygiene engineering company with 25 years in the market and focused on providing solutions for infection prevention. It creates integral solutions for sterilization, hygiene and medical oxygen solutions
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 provide health services to a greater proportion of the general population?
A: Hospital Sedna has 36 beds, but we want to incorporate 22 more. We would like to offer our high-quality services to more people. We would also want to allocate then mostly to the subrogated services of the Seguro Popular. Hospital Sedna is an integral hospital that has various specialties and subspecialties, many of them focused on chronic degenerative diseases, which are now the most common in Mexico. Our short-term plan is to emphasize kidney health. We are also getting certification to perform transplants. There is no other private hospital that has an approach to this problem.
Q: What role do public-private alliances play in increasing access to care and how do these alliances benefit private hospitals?
A: Public-private alliances allow the healthcare sector to increase its reach, with the patient as the main beneficiary, since it can ensure better care and at a much faster pace. Seguro Popular started with 5 million people. Now, it has over 50 million and the need for health services will only continue growing. Our population’s demand for health care is growing fast, if the sector does not grow in turn, many will be left without care. Globally, Mexico has been one of the countries taking appropriate measures to improve healthcare, but there are areas still to be addressed. Working with Seguro Popular can be beneficial because it allows people who would otherwise not have access to healthcare to get the quality treatment they need. I would recommend other hospitals to be open to it.
Q: Why did Hospital Sedna transition from being a hospital specialized in gynecology to incorporating more specialties?
Hospital Sedna is a Mexican hospital with over 10 years of experience. The hospital began its operations working in women’s health but it has now expanded to over 30 specialties, such as endoscopic surgery and neonatology
A: Hospital Sedna began operations fully focused on gynecology but transitioned to integral health services over its first two years. Changing the hospital’s core from gynecology to integral health services was a challenge.
Q: How is Hospital Sedna increasing its market share and attracting more patients and what is the profile of the hospital’s patients?
A: At Hospital Sedna we are fully committed to our patients’ well-being, which is our main priority. We are also investing in the well-being of our doctors. It is highly important that doctors feel that they are being fully supported by the hospital, since they are the main contact with patients. Between 70 and 80 percent of the patients at private hospitals pay through private insurance. 52 percent of our patients have insurance, 12 to 15 percent come from Seguro Popular and the rest pay out of their own pocket.
Q: Many hospitals are investing in the Joint Commission International ( JCI) accreditation. How does this certification fit into Hospital Sedna’s long-term plans?
A: On Dec. 6, 2017, we received the certification for three years from the Mexican General Health Council. This certification is based on JCI’s principles, so we are on the way to obtain this latter certification for which we will apply in 2019. Having this accreditation will allow us to increase our capacities for medical tourism. Hospital Sedna already has capabilities for medical tourism, mainly in bariatric surgery. Due to the high rates of obesity, we have turned to see Bariatrics as one of the main areas of focus, but we plan to continue offering integral services. Mexico has significant room for growth in medical tourism. Since 2013, this sector has grown around 7 percent annually.
Q: How do you see the future market for healthcare 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 increase as the country’s population ages. The private health sector will continue growing in turn but not at the necessary rate to address the needs of this population. There is significant room for growth for private health services.
PPPs CAN HELP RESOLVE SYSTEM FRAGMENTATION HURDLE
MASSIMO
PACHÓN Director General of Clinitas (Keralty)
Q: Why did Keralty decide to come to Mexico?
A: All the work we are doing in Mexico is leveraged by our know-how and experience. It is not the first time that the group has shown interest in Mexico. We had already expressed interest in the country in the 1990s and again in 2014. We are convinced there is a need in Mexico for the provision of health services that truly address the basic health problems of the population.
Q: How does Clinitas’ experience in other countries help it to capitalize on the opportunities in Mexico?
A: The main challenge we have seen in Mexico is the health system’s fragmentation: IMSS is for formal workers and Seguro Popular is for those who are not formally linked to a job. The job market in Mexico is of a rotational nature, with people moving between formal and informal employment, which means that people also move between the different health systems.
In Mexico, our intention was to establish public-private work schemes in the health sector. However, we have found that while in Colombia the legislation promotes this initiative, in Mexico the legislation focuses on the opposite. There are no mechanisms for directing government resources to take advantage of specific private-sector services. The only approach we have seen for cooperation with the private sector is through PublicPrivate Partnerships (PPPs).
Q: In what niche of the Mexican healthcare industry does Clinitas expect to make a difference?
A: When we started two years ago, the idea was to work with services such as IMSS, ISSSTE and Seguro Popular. However, due to the legislative landscape, we are focusing on the private sector. All our efforts are directed toward the first level of care, which is what we call primary attention or clinical level. We are convinced that the best solution for health services is at the first level of service and prevention.
Q: Keralty’s business model has grown through different alliances. Do you plan to establish this same model in Mexico working with insurance companies?
A: We believe that the best way to reach the private sector is through insurance companies. Within the insurance sector, some companies have clearly defined the problem and the diagnosis, and we can work with them to provide the solution. That is why we are acquiring an ISES and working in partnerships with an important insurer in Mexico, because we believe that through it we can place preventive health products and create real prevention plans for the sector.
Q: How will Keralty manage the common situation in Mexico where patients constantly change their insurance company?
A: We believe that we need to construct our brand but this will take time. We know that when people try a model and you provide the expected health services, people will return. In Mexico, the Major Medical Expenses policy usually does not cover the first level of care, general consultation and basic specialties; people have few options in the private health market and go directly to specialists, or to the pharmacy offices for minor ailments, whose volume of attentions already equals that of the IMSS. We know that if our model is successful, others will follow it. We hope that one day the country will have a wider market of medical networks, policies and solutions for the first level of care.
Q: How can Keralty’s business model help bring health and insurance services closer to the population?
A: Our main contribution can be to introduce real health solutions, both preventive and curative, in this first level of attention, guaranteeing quality services. We also need to be timely in how we solve people’s health needs, to think about patients, their families and their surroundings. We need to show that the privatization of health services is not bad. Mexico has a market for everyone and private players in the health sector are called to cover certain areas that the government cannot always guarantee.
Keralty, formerly Organización Sanitas Internacional, operates in the US, Mexico, Colombia, Venezuela, Peru, Brazil, Spain and the Philippines. It plans to expand to Russia, Vietnam and 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 individual’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 population’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
99 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
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 both in relation to financial sustainability and in relation to the business model itself. The country is also going through an epidemiological transition and the gradual aging of its population, which amounts to another hurdle. According to AMIS, 97.4 percent of health coverage is destined to major medical expenses and the rest to health insurance; moreover, in the last seven years, the country has experienced more accidents and an increase in the average cost per accident that affects the financial health of insurance companies. The total private insurance market in Mexico represents around 2.1 percent of the country’s GDP. The potential, say key industry players, is vast.
“Mexico’s private healthcare market remains small in terms of insurance coverage. The country has 120 million inhabitants but there are only 10 million people covered by health policies. Private health insurance remains expensive for many, so the sector is looking for alternatives to reach a larger segment of the population through the generation of more accessible products,” says Luis Francisco Galván, Vice President and Head of Pricing Latin America at SCOR.
According to AMIS, between 2000 and 2017 the value of private sector insurance grew by approximately 63 percent, while coverage remained at 34 percent. In this context, some recommendations have emerged, with solutions such as the improvement of existing insurance products or the introduction of new products that are more attractive to users. “One alternative are indemnity products, which pay monetary amounts to the insured or beneficiary in case of a serious health condition or hospitalization,” says Galván. “The sector could also introduce products aimed at older people, such as long-term care policies that cover costs related to the services for a population not able to perform activities for daily living.”
Some in the industry, such as Francisco Llamosas, president of Grupo Valore, say that government action could help improve penetration rates by making insurance mandatory by law because most people do not recognize the usefulness of having insurance until an accident occurs. However, the general challenge is to offer flexible products. These products, according to the OECD, would
also require joint action between the government and the private sector to improve the availability and accessibility of the product portfolio.
Culture is another factor that is holding back penetration. “It is necessary to strengthen prevention measures through the introduction of small and large cultural changes and this can also be done through government initiatives,” says Omar Viveros, Director of Health Benefits at Willis Towers Watson.
A BETTER INSURANCE CULTURE
When it comes to insurance culture, among the main problems Mexico faces is its poor level of education. “Mexico is still creating an insurance culture, but the need already exists. The penetration of insurance practices in the Mexican population is increasing but it varies from state to state. While insurance is prevalent in major hubs such as Mexico City, other cities have lagged behind,” says Llamosas.
Without doubt, the insurance sector and the government need to work together to bolster annual growth in premiums and coverage. Mexico has a fragmented health management and most of the services are concentrated in big cities, so private and public services must integrate to better address the existing demand for health services, says Alejandro Sancen, Director General of MASZ. “In relation to insurance contracting, the public and private sectors have made a great effort to raise awareness and promote the culture of investment in prevention. Insurance is considered an investment and not an expense,” adds Luk Vanderstede, Director General Mexico of Bupa Global Latin America.
Mexico is changing, which is why the insurance sector must also evolve to ensure its sustainability and access to services by users. “AMIS, insurers and government authorities have significant interest in promoting insurance as it is a key strategy to protect and preserve capital. Insurance is essential for the economic health of families and companies, both large and small. Larger companies are fully aware of the importance of insuring their assets, medium-sized companies are aware, but not all small companies are conscious of this need,” explains Llamosas.
FILLING IN THE GAPS
With Mexico’s epidemiological transition and the aging of its population, the insurance sector has an opportunity to fill the gaps that the public sector cannot. “Thirty years from now, Mexico will have a much older population and the government will be unable to afford to look after everyone,” says Leonardo Alves, CEO of Plan Wealth MGMT. “Mexico represents one of the greatest opportunities globally as the country is one of the leaders for opportunity investments in the healthcare sector. Mexico’s economy is doing well, its middle class is growing and its population is becoming aware of the importance of insuring themselves. In comparison to
RISK FACTORS IN MEXICO
• Consumption of excess saturated fats (school population)
• Daily consumption of sugary drinks
• Drinking five or more alcohol drinks per occasion
• Time in front of screens (> 28 hours per week)
• Tobacco consumption: 11.4 monthly packages per capita
• Lack of physical activity
other countries in Latin America, Mexico is ahead of the curve in insurance penetration.”
The challenges and opportunities for new entrants in the insurance market, according to Willis Towers Watson, are in the gaps where current players lack the capacity or expertise to meet emerging need or niches. During 2018, as estimated by Thomson Reuters, the insurance industry will continue to grow between 10 and 12 percent, but as the market is controlled by dominant insurance brokers, the nontraditional channels and niches will become more accessible to those new entrants or companies that want to explore other opportunities.
• Consumption of illicit drugs (men)
• Illiteracy
• Housing without proper drinking water
• Ground floor
• Consumption of illicit drugs (women)
• Rural areas lack electric power
Source: Instituto Nacional de Salud Pública and British American Tobacco
Dräger Savina 300 for intensive therapy
POOR PENETRATION, RICH OPPORTUNITIES
Many factors such as a poor prevention culture, low salaries and the high cost of insurance have combined to place Mexico among the countries with the lowest insurance penetration in the OECD. This low penetration rate is also a large area of opportunity with a vast number of potential users to attract. New technologies, products and a better use of data are the trending strategies that could revolutionize the sector. The generation of smaller products that cover specific diseases is becoming a tool to increase insurance penetration.
DIFFERENT TYPES OF HEALTH INSURANCE OFFERED IN MEXICO
Personal Accident Insurance: guarantees payment of a determinate amount if the insured dies, loses a part of the body or becomes partially or completely disabled due to an accident.
Major Medical Expenses: covers medical expenses due to disease or accident after the amount surpasses the deductible.
Health Insurance: focuses on prevention and maintaining the health of the insured, usually covering smaller medical expenses than a major medical expenses insurance.
Specialized Products: guarantee a determined payment if the insured were to contract a specific disease, examples include diabetes or cancer. Trend Description Opportunity
Chronic disease crisis 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 Move to outcomes and
M-health
Change is slow and piecemeal
Large potential but uncertain reimbursement have led to slow adoption
Making pay-for-performance models the basis for new offering
Using m-health to gain insights into behaviors to lower healthcare costs Big Data Revolution
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
Centricity in
Insurers are not close enough to customers
PERCENTAGE OF POPULATION WITH PRIVATE HEALTH INSURANCE
Using data and m-health to understand customers better
Generating new streams to supplement
TYPES OF INSURANCE COMMERCIALIZATION
Single or Family: insures the hiring 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.
Collective: insures a group such as employees or members of an association.
Short Term: accident insurance for individuals or groups which will perform a specific activity such as a trip. This insurance can be hired for periods between 3 and 330 days.
“In many countries, the insurance market is maturing, giving room for future expansion. Economic growth can lead to a higher demand of insurance products”
8.1% of the Mexican population has access to health insurance
A NEW APPROACH FOR THE WORLD OF INSURANCE
RAÚL BEYRUTI Founder and President of GINgroup
Q: What needs has GINgroup identified in employee health services and how does the company address them?
A: The government’s healthcare system cannot accommodate everyone: it does not have the reach that it should, it is not fast enough and does not have the necessary structure to adequately serve the country’s workers. It is true that Mexico has excellent doctors and the IMSS has excellent facilities, but the country is very large and it has neither the structure nor the strength to provide services everywhere.
GINgroup specializes in the acquisition and management of human capital, which is why we offer our collaborators the best possible medical scheme. The group has two types of collaborators: 10,000 internal employees working within GINgroup’s operations and 160,000 external collaborators, whom we manage. When our collaborators require medical attention and visit an IMSS clinic, they often do not receive immediate or even correct care. GINgroup also has clients in many parts of the country where there are no IMSS clinics, so workers must travel to other cities just to receive medical attention.
To address these issues, GINgroup has signed several agreements with insurance companies, including Mapfre and Zurich, and all GINgroup collaborators are granted a policy for minor medical expenses that covers their spouse and children. They do not have to pay for anything upfront; GINgroup pays directly through the insurance company.
We also have our own hospital network and agreements with other hospitals, so our collaborators have treatment options. All our hospitals are located in Mexico City’s metropolitan area but we are associated with some doctors and we are building a hospital in Tijuana. We also have regional agreements with local hospitals.
In terms of how our system works, we issue a card through one of our companies called GINxti. With this card, collaborators receive their policy for minor medical expenses, another for major medical expenses, free medical attention twice a year, free ambulance service twice a year,
and discounts for clinical analyses and at hospitals that are not part of our brand. We are also creating an app called Mi Doctor (My Doctor), which we believe will revolutionize the way health is understood in the entrepreneurial world.
Q: Tijuana has become a global hub for medical devices. What opportunities does Tijuana represent for GINgroup in the health industry?
A: Our plan is to replicate in Cancun the success Tijuana has experienced in terms of medical tourism. If things go according to plan, GINgroup will have a hotel-hospital where tourists can undergo their clinical procedures. Patients will undergo surgery and then they will be transferred to their hotel room. This means they will not have to move from one place to another every time they need a consultation. I think this will have an impressive impact on the medical tourism industry in Mexico.
Q: How would you describe the level of training with which new graduates from universities and training centers in Mexico come to the health industry?
A: Mexican talent is of a very high level but the demand is greater than what is available; there are not enough qualified personnel to satisfy all the needs. It is hard to hire doctors or nurses even at our own hospitals. We do have a complicated situation, especially now that the group is growing. However, there is talent in Mexico.
Q: What can be done to retain this talent?
A: In GINgroup, we have developed four pillars that we believe are important for our workers: health, education, sports and patrimony. In relation to education, we know that we have around 160,000 employees who have not completed elementary, middle or high school, a number that represents almost 20 percent of our direct employees. For this reason, we have developed an intense educational program for them. We also provide 500 scholarships and we offer all our employees the opportunity to obtain a professional degree and a postgraduate degree. GINgroup also has its own university and we hope that in the future it can offer degrees in medicine, communication and teaching. Additionally, our employees can learn English for
free through online classes. In relation to the patrimony pillar, we are trying to provide our collaborators with the necessary tools to help them increase their assets.
Q: How does GINgroup approach human talent acquisition for the healthcare sector?
A: GINgroup has 11 operational centers and each has its own recruitment area to attract the people our clients require. Our recruiting procedures involve our own platform, agreements we have with CONACYT or through universities. Sometimes clients are looking for a certain profile but they are not willing to offer a salary that matches the profile, so we help them in this regard. Once the profile has been defined, we start the recruitment process. We are aware that we have to choose the best candidates and this decision must be supported with documents, which we validate. We then send the candidates to the client for evaluation. When all parties agree, a training process begins. In this training, we ask our client to provide us with the materials that are needed to train the person in the tasks for which he will be responsible. All our employees have social security, all benefits mandated by law plus GINgroup’s benefits.
Q: GINgroup integrates several companies with different services. How do your various offerings complement each other?
A: GINgroup is focused on human capital management. However, we have seen the need to make our collaborators happy; if we achieve this, the client will be happy. To that end, we created a company called GINxti. This unit is in charge of imbuing our collaborators with greater added value. Similarly, the other GINgroup divisions were created to address the particular needs that we have detected in the market. For instance, when we realized that we needed our collaborators to speak English, we decided to create a company that focuses on English lessons. It is the market itself that generates the needs; we create the companies to provide the solutions.
Q: GINgroup has a significant number of alliances. What do you expect from your alliances and how do they improve the service you offer?
A: We have a very important project that is already under way. It is an alliance in which El Economista participates with IDC, one of the group’s magazines that focuses on labor, legal and tax topics. We are going to create a microwebsite where we hope to generate a large amount 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 to have live TV shows that will be transmitted online and through some cable platforms. The idea is to provide live consulting services to our viewers. Through this alliance,
we expect to help and promote the growth of Mexican entrepreneurs and SMEs.
Q: Of GINgroup’s entire portfolio, where do you find your largest opportunity areas?
A: It is basically in human capital. We have experienced 25 percent growth rates for the past five years in this sector. We ended 2017 with MX$26 billion billed and we think we can end 2018 with billings of MX$31 billion. We will finish 2018 with 180,000 collaborators. In 2017, we were among the 500 most important companies in Mexico, according to some magazines. We are considered the No. 1 company in Latin America in terms of human capital and we were also named the best employer in the country.
If we continue growing 25 percent in terms of human capital, necessarily it generates a positive effect on the group as a whole and helps us generate new businesses. We have opened an office in Houston, Texas, and we expect to have an office in Colombia by the end of April 2018. Immediately after, we expect to open an office in Peru. We have three offices in the Dominican Republic. Panama is in the group as well. These are the places where we will grow in 2018. If things go as planned, by the end of the year we will be opening offices in Canada and Chile.
Q: How does GINgroup adapt to different countries to provide the same service and level of benefits?
A: The first thing we look for is that our suppliers in Mexico have the capability to supply us in other countries. For instance, Zurich and Mapfre are available in Colombia and we are trying to replicate in Colombia the agreements we have in Mexico. The idea is to start from what we already have in Mexico and to open new partnerships for things that do not exist in Mexico but that exist in other countries, but everything has to have the same characteristics and follow the same process.
Q: What are the main skills that the Mexican talent system demands?
A: We are immersed in a process of change. What works today will be obsolete tomorrow, so most of our clients are looking for people who can speak English perfectly, who have finished a professional degree, who have experience and the desire to improve and who are reliable. There are many necessary characteristics but for me the most important are capability, knowledge and experience.
GINgroup is a Mexican company that specializes in the acquisition and management of human capital. GINgroup includes GINxti, GINflex, Sportsclinic, Sportsway and Centro Medico GIN, a specialty clinic
Conducting a test at Hospital Christus Muguerza
OFFERING ADDED VALUE THROUGH PRE-SELECTION
FRANCISCO LLAMOSAS
President of Grupo Valore
Q: How does Grupo Valore business strategy differ from other insurers?
A: We differentiate ourselves by providing added value both to our group’s insurers and their clients. Our four insurers are GMX, which offers liability insurance; ANA, which provides car insurance; Seguros Argos, for life; and Prevem Seguros, which covers health. Together, our companies provide coverage to 2 million people. We are leaders in civil responsibility insurance and most of our products provide international coverage.
Q: How is Grupo Valore’s healthcare insurer making a difference in care practices?
A: Healthcare is of the utmost importance to the group. Prevem Seguros, our youngest member, provides clients with added value in coverage and conditions through the application of strong pre-selection criteria. Because our client base is carefully selected, we can offer clients all the guarantees of medical-insurance coverage at preferential prices. We pre-select our clients by performing a comprehensive medical exam for those over 35. This allows all our insured clients to enter a pool of healthy people, which also reduces costs. Our clients also receive a comprehensive medical exam when they turn 35 and we ask them to undergo an exam every five years so they can track their health status. Prevem covers approximately 35,000 people but the company is growing at an annual rate of 35 percent, an accelerated pace considering our strict selection criteria. Our business model has an annual deductible and assured reinsertion, which provides great stability and ensures that the annual increase in cost to customers is kept to a minimum.
Q: How does the company compete against international insurers?
A: Thanks to our pre-selection criteria, Prevem Seguros has 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 receive personalized attention since all our teams are fully aware of the needs of Mexican workers and their families. We have alliances with most of the main hospitals, doctors,
clinics, laboratories, pharmaceutical companies, assistance companies, medical associations and insurers specializing in healthcare.
Q: How does Prevem Seguros work to increase awareness among the population about prevention?
A: Our medical committee carries out constant campaigns to raise awareness about the dangers of diabetes. The group also offers presentations on a wide range of diseases and conditions, including hypertension, hepatitis and overweight, under the name “Canal de la Salud” (Health Channel). We also have a medical chat on our webpage to provide instantaneous guidance to interested clients.
Q: Insurance penetration among Mexico’s population is low. What are public and private organisms doing to increase it?
A: Mexico is still creating an insurance culture, but the need already exists. The penetration of insurance practices within the Mexican population is increasing but it varies greatly from state to state. While insurance is prevalent in major hubs such as Mexico City, other cities have lagged behind. A strategy to improve penetration rates in each sector is to make it mandatory by law. People often recognize the utility of being insured after an accident. We observed this especially after the Sep. 19, 2017 earthquake that hit Mexico City and other areas of the country. Many individuals were under the impression that insuring their property would be prohibitively expensive but this is not the case.
AMIS, insurers and government authorities have significant interest in promoting insurance as it is a key strategy to protect and preserve capital. Insurance is essential for economic health. Larger companies are fully aware of the importance of insuring their assets but not all small companies are conscious of this need.
Grupo Valore is comprised of four insurance units: ANA Compañía de Seguros, for car insurance; Seguros Argos, for life; GMX Grupo Mexicano de Seguros, for liability and Prevem Seguros, for health
PREVENTION APPROACH FOR GREATER MARKET SHARE
LUK VANDERSTEDE
Director General Mexico of Bupa Global Latin America
Q: What are Bupa Global’s growth expectations in Mexico for 2018?
A: Bupa has 78,000 employees, more than £14 billion (US$18.4 billion) in premiums and over 30 million insured individuals. The Mexican Association of Insurance and Bonding Agents (AMASFAC) ranked Bupa Mexico as the fifth-best company for premiums. Also, Bupa Mexico leads the ranking of SME insurers as the main medium-sized company in the provision of medical expenses services and volume of insured people. Between 2016 and 2017, Bupa Mexico grew from 44,000 to 49,000 insured and continues to experience net growth. We anticipate double-digit growth for 2018 and the coming years.
Q: How can the insurance sector and Bupa Global take advantage of the growth in medical tourism?
A: Medical tourism is not an attractive market for us. Our collaboration with BCBS provides benefits for both parties because we have a common client profile that enjoys traveling through these two countries and seeks international medical coverage. Although we do not work in medical tourism, we have a large presence of tourists from the US who take out health insurance and come to us through our joint venture with BCBS.
Q: What trans-sexennial proposals could Bupa Global suggest to improve the health system and participation in the insurance market in Mexico?
A: At the last convention of the Mexican Association of Insurance Institutions (AMIS), the central theme was health. The country has an average health expenditure of 5,8 percent of GDP. The public sector is aware of these challenges and the lines of work that must be followed. For example, the public sector achieved coverage of more than 80 percent of the population between Seguro Popular and IMSS. In relation to insurance contracting, the public and private sectors have made a great effort to raise awareness and promote the
Bupa Global is an insurance company belonging to Bupa, a prominent association that cooperates in different business areas but focuses on health through its international market division. Bupa Global has been in Mexico for over 20 years
culture of investment in prevention. Insurance is considered an investment and not an expense. In Mexico, a person without coverage pays almost 50 percent of medical expenses, which represents almost 5 percent of the country’s GDP.
Q: Mexico is experiencing an epidemiological transition with a significant increase in chronic diseases. How does Bupa deal with this new situation?
A: We are carrying out prevention campaigns to accompany and encourage medical insurance acquisition by the Mexican population. Industry and government must join the voices that promote a change of mentality regarding prevention. It will be key in the near future to have insurance to balance the expenses of an aging population and the diseases that will follow. Bupa is working both globally and in Mexico to generate greater awareness about how to improve health finances.
Q: How is Bupa Mexico’s approach and services regarding this transition better than its competitors?
A: The maximum age to contract insurance is 65 years but in the case of Bupa Global it is 75 years. In addition, this year we are offering coverage for mental illnesses that have not been considered by other companies. Bupa Global is the pioneer in the inclusion of mental illnesses because we are managed as a health-focused company. We focus exclusively on health and reinvest our profits to create more coverage for new conditions and also to conduct research, promote prevention and increase the digitalization of our services.
Q: The new InsurTech ecosystem is expected to shape the future of insurers. What is Bupa Global’s approach in this matter?
A: Bupa is very active in investing in technologies that exceed patient expectations and provide quality care. Our 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 and not just automate for the sake of automating. The company wants technology to offer added value to our customers. Bupa Global wants to bring digitalization and innovation to our services.
A TWIST ON THE STATUS QUO
Q: Why is Salud Fácil the ideal option for people seeking medical financing?
A: Salud Fácil was born from the idea of providing medical services to people who cannot access the private healthcare sector but could be assisted at private clinics and hospitals if they had the financing. The company collaborates with more than 250 clinics and hospitals throughout the country. Salud Fácil has no limitations when cover the financing of any treatment or surgery; the main limitation is that the patient has sufficient income to be able to face the payments resulting from the loan.
Infrastructure problems in the health system prevent it from meeting demand and the private sector is not accessible to all. The reality is that the private sector does not cater to everyone because coverage of medical expenses is very low and medical services are expensive for the majority of the population. Through our services, Salud Fácil provides greater access to healthcare in Mexico.
Q: What is the added value for the patient when contracting Salud Fácil’s services?
A: There is no cost for patients until they contract Salud Fácil. Insurance requires the payment of a constant rate but it is only used when the client has an emergency. Our services are available when the patient requires them and the return of benefits is much more immediate. When clients hire Salud Fácil, they only pay for what they need. Meanwhile, insurance companies are reducing coverage, setting limits on medical expenses due to illness and simply not covering certain ailments or treatments. At Salud Fácil, we take care of all surgery-related expenses, including consumables, medical tabulator and other expenses that may arise. Medical insurance companies work with surgical tabulators that limit the choice of doctors, while Salud Fácil gives the patient freedom to choose doctors, clinics and hospitals.
Q: How does Salud Fácil mitigate the complications of having an overdue portfolio?
A: Salud Fácil considers two factors when approving a loan: credit review and the capacity to repay. These are financial
FERNANDO DE OBESO Director
General
of Salud Fácil
factors that today are key to accessing leasing or financing services. Salud Fácil analyzes these elements to reduce the risk associated with payment collection. The analysis of a customer’s credit history is the basis for a profitable operation and this allows us to offer greater added value to our beneficiaries.
Q: Which medical areas are seeing the most demand for financing?
A: We receive the most financing requests for gynecological and obstetric surgeries, followed by a lower proportion requiring financing for dental, aesthetic and orthopedic treatments and surgeries. The epidemiological transition now underway in Mexico is an opportunity for Salud Fácil to grow alliances and collaborations to provide more benefits.
Q: How is Salud Fácil planning to integrate more companies to its collaborators’ portfolio?
A: Salud Fácil is always looking for new alliances with clinics, hospitals and other entities to strengthen its service performance. The approach we have in Salud Fácil is aimed at finding collaborators in the private sector with mediumsized clinics and hospitals that are more than 3,000 in the country. We already have partnerships with large groups but our current goal is to focus more on small and medium clinics because they have a greater flow of patients than bigger ones.
Our collaborators and clients receive attractive benefits when they work with Salud Fácil such as an increase in their income and flow of patients. All of our leasing services have tax deductibility which helps our clients receive greater financial incentives because the burden of payment becomes considerably reduced. It becomes more costefficient to lease a medical device with Salud Fácil.
Salud Fácil is a financing company specialized in the health sector and founded in 2013. The company offers financing to cover surgeries, treatments, sale and leasing of medical equipment and remodeling of clinics and hospitals
REDISTRIBUTION OF RISK: ADVANTAGES FOR THE ENTIRE SECTOR
LUIS FRANCISCO GALVÁN
Vice President and Head of Pricing Latin America at SCOR Global
Life SE
Q: What role does SCOR play in the insurance ecosystem?
A: Reinsurance allows insurers to protect themselves from volatility and better manage their capital. As a reinsurer, SCOR works with the main insurance companies in the country. Each company specifies the level of risk they are willing to assume. For example, in the healthcare sector a company will take into account their risk appetite and capital requirement, among other factors, to determine the specific monetary value they are willing to cover in case of an incident and reinsure the rest.
Q: Mexico had 239 foreign reinsurance companies registered in the country by March 2018. What sets SCOR apart from those others?
A: SCOR is a global leading reinsurer with more than 4,000 clients served by 38 offices around the world. We can offer clients many added value products and services that allow companies to better define their own offering or generate new alternatives.
The Mexican market is very well capitalized, which allows insurance companies to take more risks. Our strategy for Mexico is to meet local insurers’ demands for risk management and offer them value-added products that generate more business.
Q: Considering Mexico’s low private medical insurance penetration, what makes the country an attractive market for reinsurance?
A: Mexico’s private healthcare market remains small in terms of insurance coverage. The country has 120 million inhabitants but there are only 10 million people covered by health policies. Private health insurance remains expensive for many, so the sector is looking for alternatives to reach a larger segment of the population through the generation of more accessible products.
SCOR is a top-tier French reinsurance company present in over 160 countries. Founded in 1970, the group provides reinsurance services in life, health, property and casualty. SCOR has been in Mexico for seven years
Total private insurance represents around 2.1 percent of the country’s GDP, while personal health insurance accounts for less than 1 percent. There is a lot of work to be done and as reinsurers we can offer significant added value by improving existing products or creating additional ones. One alternative is the indemnity products, which pay monetary amounts to the insured or beneficiary in case of suffering a serious health condition or hospitalization. These products are not new, but have seen little penetration in Mexico.
Another strategy is to improve the coverage of existing policies. The sector could also introduce products aimed at older people, such as long-term care policies that cover costs related to services for a population not able to perform activities of daily living. In these cases, the insurance would pay a previously stipulated amount that the insured can use to hire a nurse or to pay a retirement home, among other services.
Q: What measures can the insurance sector implement to increase coverage?
A: Access to health policies in the market is limited due to the high cost of current products. Mexico has more than 30 companies that offer medical insurance, which compete with each other mainly in terms of price. This reduces their margins. To address this issue, insurers are doing everything possible to control costs by negotiating with suppliers. In my opinion, the insurers’ product offer could be reshaped through the generation of substitutes or complements of the main existing health insurance products.
Q: What role should public institutions and governments have in increasing coverage?
A: Public institutions and governments are doing their 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 quality services. Besides improving their own schemes, it is desirable that governments allow private companies to provide services on basic coverage but also on complementary or alternative protection schemes.
BENEFITS OF PREVENTION ARE WIDESPREAD
Omar Viveros Director of Health Benefits at
Q: What role do insurers play in increasing prevention awareness in Mexico?
EH: Mexicans do not see the importance of saving for their health or retirement and are not prepared for emergencies. Insurance should not be seen as a luxury or a privilege but as a real and immediate need. Insurance companies are introducing new plans to the market. The sector is promoting the creation of an efficient framework for individual pension plans so funds are clearly divided between healthcare and all other expenses, since Mexicans often forget to reserve money for their medical care. We only worry about healthcare when we are sick.
OV: Willis Towers Watson helps companies to develop strategies to make their health plan sustainable. One of these strategies is by encouraging employees to actively save for their retirement. It is necessary to strengthen prevention measures through the introduction of small and large cultural changes and this can also be done through government initiatives.
Q: How does Willis Towers Watson help companies to improve their productivity through healthcare measures?
OV: Willis Towers Watson performs many studies on the impact of presenteeism and absenteeism in the workplace and these types of studies were the basis of NOM-035 proposed by the Ministry of Labor. There is growing awareness of the importance of these policies and many private companies are increasingly introducing them. Our study, Global Medical Trends, has provided significant information on the reasons behind increasing costs during hospitalizations, doctor’s appointments and clinical tests.
EH: Changing the country’s mindset will allow the development of sustainable programs that take advantage of prevention and early detection. We have discovered that corporate wellness programs are welcomed among Mexican employees, who often focus their lives on their workplace. Prevention will also generate savings for employers, decrease absenteeism and increase employee commitment and satisfaction. Absenteeism and presenteeism are causing great financial losses to employers. Corporations
make decisions based on data and our role is to provide that information and work with companies to help them develop and manage long-term sustainable programs. We work closely with companies to help them improve their prevention processes.
Q: What new insurance products could be implemented to address Mexico’s lack of access to healthcare?
EH: Mexicans are facing very high medical premiums during their retirement. The US, for example, has developed health savings accounts (HSA), private plans that combine savings accounts with health insurance policies that are tax exempted when used to pay medical expenses. These provide the opportunity for long-term savings and medical care in old age. HSAs are not used in Mexico.
OV: Once people reach retirement age, their most common needs are related to healthcare. While public services are very good, they are extremely saturated, so people can find themselves in the worst of both worlds: while employed they have access to care that they may not need and once they retire they have higher risk but neither the access to care nor the financial means to pay for it.
Q: What benefits would HSA provide policyholders?
OV: Few Mexicans want to acquire insurance policies in their old age and, should they want to, they will discover that they are too expensive to acquire or to continue paying after 60 years of age. HSA’s would allow policyholders to save for the long-term and to use a percentage of these savings to pay for health insurance during their retirement.
EH: The saturation of public health institutions might get worse over time. Many old pension plans offered by banks and energy companies were financially onerous, so they have not accepted new members during the last 10 years.
Willis Towers Watson is an insurance brokerage and risk management company with offices in 140 countries. The company has divisions for investment, risk and reinsurance, human capital and corporate risk
Eduardo Hori Senior Consultant in the Retirement Practice at Willis Towers Watson
Willis Towers Watson
MEXICANS NEED TO START SAVING NOW
LEONARDO ALVES CEO of Plan Wealth MGMT
Q: How has the public’s perception of the insurance market evolved in Mexico?
A: Thirty years ago, Mexicans did not think much about insurance. At that time, families owned large tracts of land and had many children who would look after their parents in their old age. The situation has changed enormously as child rearing is much more expensive, especially in large cities. For that reason, families need to look for alternatives like insurance. Not many companies were willing to provide insurance in Mexico because Mexicans were reluctant to accept it. However, this is changing and now there is a massive need for insurance products. Furthermore, a growing number of people can now afford these products.
Q: What is Plan Wealth MGMT’s value proposition for the Mexican market?
A: We provide clients a tailor-made plan to meet their needs. An adviser analyzes the client’s circumstances and filters the market to identify the products that best suit those circumstances. Clients do not need to change their lifestyle to adapt to a product because the product adapts to them. We are international financial advisers and we work with many banks outside Mexico, which gives our highprofile clients access to the global markets for healthcare and biotechnology. We provide access to a wide variety of funds, such as UBS (Lux) Equity Biotech that is valued at over US$1.1 billion and incorporates 46 different companies in the biotechnology sector. Many insurance and financial firms are coming to Mexico but the current offering is not enough to satisfy demand.
Q: Why did Plan Wealth MGMT choose Latin America and what specific benefits do you see in Mexico?
A: While other companies prefer Russia, China or the Middle East, we prioritized Latin America because the region did not have a culture of investment, which is now
Plan Wealth Management Ltd. is an independent financial consultancy with over 50 years of experience. The company is headquartered in the UK, but operates in 21 Latin American countries, including Mexico, Brazil, Colombia, Chile and Peru
becoming a booming market. Many more companies will eventually enter the region but we have been in Latin America for 10 years and now we are experts here. For instance, to begin investing in UBS (Lux) Equity Biotech it is necessary to begin with US$5 million. Through our financial instruments clients can invest just a fraction of that number. Mexico represents one of the greatest opportunities globally as the country is one of the leaders for opportunity investments in the healthcare sector. Mexico’s economy is doing well as its middle class is growing and its population is becoming increasingly aware of the importance of insuring themselves.
Q: What are your expectations for the growth of the Mexican investment market?
A: Mexico has everything it needs to continue growing, including natural resources, a stronger middle class, competitive labor and an ideal location close to the US. The peso is weaker against the dollar, which is a significant financial opportunity for foreign players. There is no doubt that during the next 30 years Mexico will become one of the leading economies in the world.
We expect to grow significantly in the country, in part due to Mexico’s aging population. Thirty years from now, Mexico will have a much older population and the government will be unable to afford to look after everyone. For that reason, many incentives have emerged, including tax deduction plans.
Q: What are the main reasons for investing in healthcare?
A: People are living longer and the last years of a person’s life usually carry the largest costs in medical terms, which make the healthcare industry one of the best sectors in which to invest, especially in the middle 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 people with a way to access money for the rest of their lives and even to bequeath it to their kids. By creating awareness now of the need to save, we are preventing poverty in the future.
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 sector is access to services for much of the population. By introducing technology, these services can become more accessible to a greater number of people, says Javier Guadarrama, Director General of Health and Benefits at Grupo Promass. “The main problem we have identified in the existing healthcare model is the lack of access to health services for the general population. Our ultimate goal is to bring healthcare services closer to the population through information and communications technologies (ITC). It might sound simple but it is a very complex project,” says Guadarrama.
Grupo Promass specializes in designing, developing, commercializing and implementing products and services and is a leading integrator of intermediaries in insurance, assistance, health, technology and telecommunications. Health and Benefits, its healthcare arm, develops products aligned with the medical needs of the population. The division, explains Guadarrama, adheres to the guidelines of the National Development Plan and the Sectorial Health Plan and follows the WHO’s recommendations for the use of ITCs to integrate hospitals, doctors, laboratories, optics suppliers and many other suppliers of health products. Reducing costs is one of the company’s goals. “Many studies have revealed that healthcare is the largest outof-pocket expense people make for themselves or their families, mainly in the case of catastrophic events.”
Some practices from overseas have been successfully implemented in Mexico to address patient needs. “We have developed telephone consultations as a step prior to a medical visit. This is not a unique model since the National Health System (NHS) of London has been using this methodology for more than 20 years with excellent results.” What sets Grupo Promass’ service apart is that all telephone consultations are provided exclusively by a doctor, while the UK employs nurses and other professionals. To begin providing this service, Grupo Promass followed and adapted Mexican Clinical Practice Guides. “When we started operations, there were no guidelines for phone consultations. We decided to develop entirely new
guidelines and protocols for the call,” says Guadarrama. These protocols allow doctors to easily identify risk factors and quickly determine whether the patient needs immediate medical attention. “We have provided this service for over 12 years and in that time we have noticed that about 80 percent of problems can be solved through a phone call and only 6 percent of cases are emergencies. The remaining 14 percent are canalized to a doctor the following day. Most importantly, 98 percent of our patients are happy with the service and we have not had any fatal event in all this time. It is an effective and safe strategy for medical care."
The company’s Health and Benefits department has over 5 million individual policyholders but since this is a benefit for families, the company estimates that it provides this service to over 20 million people. The level of acceptance led the company to invest in technology. “We developed teleconsultations, which allow patients to discuss issues with their doctors through a video conference,” says Guadarrama. The company also sets up required medical visits across the country, including sessions with specialists.
Phone and video consultations have also become a platform to develop prevention and monitoring programs. Its Chronic Patient program, for example, focuses exclusively on patients with diabetes and hypertension. “With this equipment, we can continuously monitor patients and promote a culture of prevention. Alongside our medical personnel, we also monitor patient compliance and we can even send them more medication if they run out. Similarly, we are developing a program for seniors who might or might not have these chronic diseases. In this case, the service supplies an alert button they can use to request immediate help in emergencies.”
Grupo Promass wants to continue expanding its service offering to provide specialized care. “Our goal is to bring health services to the homes of our members wherever they are, just when they need it. This avoids self-medication, unnecessary travel and health expenses and benefits family and government programs in the field of medical care,” says Guadarrama.
REDEFINING INSURANCE IN MEXICO
ALEJANDRO SANCEN Director General of MASZ
Q: Why is there such a small amount of integral health insurance programs?
A: A major contributor is the lack of a health culture at both the institutional and corporate levels. In Mexico, health management is fragmented; we have public services and private services but there is no integration between them. The Mexican population is too large and many of the services are concentrated in big cities but there is a sizable population in more distant municipalities. Mexico is experiencing epidemiological, generational, political and environmental transitions that demand change.
Q: How do you make insurance affordable for more patients?
A: We have been working with insurance companies to correct this flaw in the system and we are trying to equilibrate the whole ecosystem. In this equation, the only unbalanced player is the insured population who cannot pay the premium or who can pay but receives few services. Today the most common policy in Mexico 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. The next product we will develop is a minor-medical expenses policy with wellness benefits that provide access to general practitioners, specialists and subspecialists. It covers anything that does not require hospitalization, such as medicine, basic lab work and emergencies.
Another product in our pipeline addresses personal accidents. This covers any eventuality and also includes prevention. Fifty percent of health expenditure in Mexico is out-of-pocket; people are willing to spend money on health but we need better insurance products.
Q: How is the insurance sector addressing Mexico’s aging population?
A: The insurance sector tends to cancel policies when the beneficiaries are in their late 60s. When people are elderly, they need better coverage that is very hard to find. There are insurance companies that do not insure patients with pre-existing conditions like hypertension, obesity or diabetes – a situation that proves decisions made in the insurance sector are not made by health professionals. Without the input of public health practitioners, it is not possible to meet new challenges. Therefore, we are working to create a product for geriatrics that will be launched in the second half of 2018. It is time to free healthcare from the General Insurance Act.
Q: How are you working to include these products?
A: Three years ago, we designed the first cancer policy in Mexico and we had to overcome many regulatory problems. In Mexico, when someone wants to innovate, the law throws up many barriers. Institutions are learning with us and we are learning with them. To provide a license for a new product, the National Commission of Banking and Insurance (CNBS) needs a historical report that proves the efficacy of the product.
Q: Which products are most helpful for increasing access to healthcare?
A: It is not about the products, it is about the programs. For example, our minor medical expenses product is offered with a wellness program. These programs provide access to first-level service. Without a program, there is no medical follow-up, no patient adherence and a disorganized service.
Q: Where do you see the niche of opportunity in healthcare?
A: The key is at the first level of care. Mexico does not need more hospitals; the country needs more primarycare centers. Despite the existence of formal institutions that provide health services, we have charitable and private initiatives dedicated to providing diagnoses. Many, such as pharmacy consultancies, are impossible to suppress because this type of services are supporting the capacity of IMSS.
TEACHING BUSINESSES TO PRIORITIZE HEALTH
MIGUEL PRIDA President of Consulmed
The health of employees in the workplace can sometimes be ignored by businesses focused on their bottom lines. But the issue is gaining relevance as the government and companies realize the benefits of having a healthy workforce, explains Miguel Prida, President of Consulmed, a health services administrator that insures over 500,000 users with a broad network of hospitals, doctors and suppliers.
Employee healthcare is not only good for workers, it is also good for companies since injuries disrupt the work environment and can potentially result in damaged property and equipment. By developing and enforcing safety workplace practices, companies can reduce or even eliminate costs associated with liability compensation and litigation, Prida says. Furthermore, having healthy employees generates a more productive and efficient workforce. “This area has boomed during this presidential administration as the federal government and the Ministry of Labor and Social Welfare (STPS) have demanded that companies with more than 100 employees provide medical services,” he says.
However, many companies still have a negative perception of occupational health. “We have to convince them that improving the health of their employees is not an expense but a necessity,” Prida says. “This service is also 100-percent tax deductible, helps companies reduce the cost of their risk premiums and reduces the need for major medical expenses.” The benefits for employers are significant, Prida adds. “The first is the reduction of the risk premium. The second is a reduction in employee absenteeism and third is accident prevention. These schemes have been excellent for employee retention as workers are often grateful to receive medical attention in their offices.”
Consulmed has four business units. The first, which is the company’s core business, is occupational health through medical services administration. Second is pharmacy, which has grown enormously as laboratories are increasingly interested in helping patients follow treatments and achieve stable health. Third is the Integral Medical Protection
(PMI) membership, only available for companies through a broker or an insurer. The final division is health supplies, in which “we supply our clients the medicines and medical equipment that they need as every company with over 100 employees must have a medical office on its premises,” explains Prida.
The company provides personalized services according to a client’s needs. Consulmed works only with businesses with more than 100 employees, but the company wants to develop a series of products that will allow the company to provide services to smaller companies. “Our goal is to establish clinics for occupational health within industrial parks, a service that does not exist at this point.” According to Prida, these clinics would be ideal for companies with less than 100 employees working closely within an industrial park.
Another initiative under development by Consulmed is the creation of several “infusion centers” in which patients can receive medication that requires specific equipment to administer. “For these medications, patients often must go to IMSS or a private hospital, which is either too time consuming or expensive. These centers will be linked with insurance companies and will allow companies to reduce their costs by 50 percent in comparison to a private hospital.” These clinics have significant potential, according to Consulmed, especially if they are connected with foreign insurers. “One attractive area for these clinics is Mexico’s beaches, as foreign tourists who are sick do not have anywhere to source this type of medication. We are allying with a travel agency from the US, so patients who need this service can acquire it jointly with their vacation passage.”
Consulmed’s product has proven to be attractive. “Between 2009 and 2017 we have enjoyed double-digit annual growth of over 25 percent on average. Many have complained that 2017 was a hard year but we grew by 33 percent.” This growth has allowed the company to become a fully Mexican success story. “Consulmed, which will turn 10 years old in 2018, was acquired from Canadian and US companies and we made it fully Mexican.”
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.
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
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 CANIFARMA statutes, into two sections: health-related auxiliary products (PAPS) and diagnostic, reactive, selfmonitoring (RSD) and personal care products. The RSD industry represents companies whose technology facilitates the obtaining of biometric indicators of patients through medical tests and also represents authorized manufacturers and distributors of medical devices. The PAPS division groups manufacturers and distributors of disposable healing materials, dialysis bags, gloves, surgical garments and other materials required for surgery and the application of medicines.
Overall, it took a decade but Mexico is now a global leader in manufacturing and exporting medical devices, ranking eighth in the world and No. 1 in Latin America, according to ProMéxico. The country is also the leading provider of medical devices to the US; but insiders say the country cannot rest on its laurels, with significant room for continued growth in the coming years and a key issue that has yet to be resolved: access.
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,” 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.”
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
specialization that have been issued and legally registered by the competent educational authorities. But here, too, more needs to be done.
“Regulation regarding pharmacies has lagged far behind and regulators lack the necessary funds to properly address many issues. For instance, the sale of psychotropic medications is not applied correctly due to the lack of technology and the adequate processes to control it,” says Isaac Valdivieso, Director General of Farmacia San Pablo.
MEDICAL DEVICES
The medical devices market in Mexico has grown 15 percent annually in the last decade, according to Global Health Intelligence. ProMéxico reports that production totaled MX$13.8 billion in 2017, and estimated average annual growth of 3 percent for the period 2017-2022, which represents approximately MX$15.8 billion by 2022. Purchases of medical devices in 2017 amounted to MX$9.6 billion with a projected growth of 4 percent for the period 2017-2022, which would represent an approximate value of MX$11.7 billion for 2022.
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
• Mexican Association of the Innovative Industry of Medical Devices (AMID)
• National Chamber of the Transformation Industry (CANACINTRA)
• National Chamber of the Pharmaceutical Industry (CANIFARMA)
• 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 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 of the industry is to increase market development in Mexico by 25-30 percent to improve technology and innovation in advanced therapy solutions,” says Velasco. The upcoming challenges for companies are to bolster the development of the medical devices sector and raise awareness about the benefits of investing in technology. The complementary priority would be to create a greater penetration of PAPS technologies in the public sector.
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 period the association will focus on maintaining high ethical standards, ensuring greater access to health innovation, addressing the illegal health market and contributing to make the process of purchasing medical devices more transparent and efficient for health professionals.
NEW SCHEME FOR PHARMACIES
Just as medical devices companies see opportunity on the horizon, pharmacies are also adopting more comprehensive healthcare schemes in which they are no longer just providers of medications and medical supplies, but include low-cost healthcare services to improve access for a large part of the population. According to the National Statistical Directory of Economic Units of INEGI, there are more than 150,000 ambulatory medical services in the country, of which 1,521 are pharmacies. This was one of the reasons why the Senate approved the modification of the General Health Law with the objective that pharmacies join the list of technical and auxiliary activities that require specific knowledge for the field of pre-hospital medical care.
The inclusion of digital tools and technology is also shaping the commercial scheme of pharmacies and redefining their ability to provide health assistance, while also offering avenues for growth. “Traditional pharmacies are limited in improving adherence because they only sell medicines and do not follow up with the patient while pharmaceutical companies, by law, cannot contact patients or customers,” says José Mora, CEO 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 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
PHARMACY TRENDS FOR 2018
• Integration of start-up technology, supply-chain and e-commerce companies
• Shift from traditional brand-name drugs to specialty drugs
• Expansion of pharmacogenomics
• Use of Big Data to increase compliance and adherence
• Growth of self-care and healthcare consumerism
• Demand for new services to be available at pharmacies
• Increasing role for artificial intelligence in clinical experiences for the patient
• Demand for greater coordination with providers
• Pressure to reinvent traditional business models
Sources: McKesson and Wolters Kluwer
to improve the health environment. “Technologies like e-commerce can serve to provide value at all points along the value chain of medicine until the drugs reach the patient’s hands and even after that,” says Mora.
TECHNOLOGY SHAPING HEALTHCARE
There is little doubt that technology is extending its reach across services and products for the health sector. Pharmacies now have a greater depth of digital professionalization, including payment methods and the monitoring of the traceability of medicines. Medical device companies are being directly influenced by technology. “There is a clear digital trend in PAPS medical devices as marketing and digital media are creating synergies with e-commerce to deliver products more efficiently,” says José Velasco, General Manager of Essity Medical Solutions Mexico. However, some areas are more experienced than others in using technology, Velasco says: “Some companies already have e-commerce experience in the health industry but the medical devices segment is not as developed.”
PRODUCTION OF MEDICAL DEVICES IN MEXICO, 20102016 (billion)
PRODUCTION OF MEDICAL DEVICES IN MEXICO, 2010 -2016 (BILLIONS)
Source: ProMéxico and INEGI 2017
CUTTING-EDGE TECHNOLOGIES CHANGE LIVES
CARLOS HERNÁNDEZ
Director General of Beckman Coulter
Q: What opportunities have you identified in Mexico in 2018 for your diagnostics portfolio?
A: We are facing different challenges in 2018. Some government contracts will expire or have already expired and have not yet been assigned, which is an opportunity to boost our business. However, the big government hospitals are looking to reduce their budgets. This brings a challenge to companies like ours to provide cost-effective, efficient solutions to this important sector of the market.
In the case of private laboratories, some of them have merged and are consolidating their operations, including the integration of production plants to generate economies of scale and growth in efficiency and capacity. International players from South America and Europe are also looking at Mexico as an investment opportunity. We are also seeing a great opportunity in the health-related services companies oriented to a large part of the population with low resources or with no healthcare coverage.
Q: How does the commercial strategy and technology offer vary from segment to segment?
A: We offer the same technology to laboratories at pharmacies, government institutions or to private hospitals. We do not differentiate among our patients and can provide both instruments to small-capacity laboratories and high-capacity open automation systems that integrate different platforms. We are actively participating in new business schemes and for this we have implemented the cost per test reported in different accounts of the health system. Our commitment to the health system is to achieve high productivity and efficiency and to reduce waste. The application of these schemes is complemented by automation and IT tools that help reduce manual errors and increase productivity and savings.
Beckman Coulter is a US manufacturer of analytical and diagnostic solutions that automates and innovates complex biomedical tests. In 2011, it merged with US-based Danaher Corp, which includes companies focused on tests and measurements
Q: Of Beckman Coulter’s recent innovations, which would provide the greater benefit for the Mexican health system?
A: In 2017, we launched two product platforms: the DxH500, a medium-sized machine that does five-part hematology, and the DxC700AU, a platform directed to the middle segment. We are producing these types of innovation because we are aware that the market in countries like Mexico has specific needs. We also launched the P2PSA assay for prostate cancer diagnosis because we believe P2PSA can be an important diagnostic tool in the coming years as it helps reduce risks and discomfort of biopsy for the patient. Applying this test instead of taking a biopsy could help reduce spending by 60 to 70 percent.
Q: Beckman Coulter offers a test that could help identify heart attacks in patients when they arrive to an ER. When will this technology be available in Mexico?
A: Our high sensibility troponin test is in the registration phase in Mexico. It will bring a wide margin of opportunities because this test can help professionals recognize in a shorter time if the patient that comes into the ER with heart attack symptoms has already suffered one or not. This could help shorten admission times for patients and avoid saturation at ERs, as well as to avoid discharging patients to their homes who indeed have suffered a heart attack.
Q: In terms of IT, what is your product offer?
A: We have IT solutions in three areas: logistics and storage, remote instrument diagnosis and laboratory information systems. For consumables logistics and inventory control, we are providing a comprehensive offer through all our platforms with innovative and proprietary IT solutions. We provide remote instrument diagnosis and monitoring using our ProService system, through which we can identify failures, prevent unexpected shutdowns and alert the client proactively. Finally, in the case of laboratory information systems, we have a robust platform that manages information to execute automated results release and reliable patient information archiving and analysis. We are also working in the development of Big Data solutions to make better use of the amount of information our clients manage.
STITCHING TOGETHER REGULATIONS CAN FACILITATE MARKET ACCESS
ALEJANDRO VON MOHR Director General of Atramat
Q: How do regulations benefit or hinder Atramat’s growth?
A: Regulations in Mexico and the world have increased greatly over the past 15 years and this has sometimes meant performing new tests on time-tested products as well as higher costs. In Mexico, COFEPRIS faces the challenge of having to efficiently manage both NOM 059 for the pharmacovigilance of pharmaceuticals and NOM 241 for the techno-vigilance of medical devices, as well as having to align themselves with the health authorities in the rest of the world. For Atramat, this means complying with the ever more stringent rules for medical devices manufacturers.
One of the main challenges for our export business is ensuring that we have all the necessary health registrations, which is difficult since they vary from country to country. While obtaining international certifications opens doors to new markets, it also represents a very large investment. Next year, we are entering the Medical Device Single Audit Program (MDSAP), which currently involves regulators from five countries: the US, Canada, Brazil, Australia and Japan. Obtaining this certification will be an advantage because we will meet the requirements of five different companies through a single audit.
Q: What strategies helped Atramat to become the fourthlargest suture manufacturer in the world?
A: Absorbable sutures have been in use since the 1950s and have the advantage of eliminating the need for a second surgery that would be necessary to remove nonabsorbable sutures. Until the late 1980s, there were only three different types of sutures, two non-absorbable made of silk and nylon and one absorbable made of catgut. Synthetic absorbable sutures made of poly-glycolic acid (PGA) were launched in the 1970s and poly-lactic-coglycolic acid (PLGA) sutures emerged in the 1980s. We 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 the 1990s. At the same time, we also began to export our products to Latin America, later expanding to other regions.
Q: How do sales of Atramat products vary between the public and private sectors?
A: The private sector requires a wide variety of specialized products depending on the type of surgery and the patient. We have concentrated on the public sector, which demands lower prices but larger volumes. The public health sector offers many opportunities. The most important are the IMSS annual consolidated tenders that now encompass many states and other public institutions such as ISSSTE, SEDENA and PEMEX. However, IMSS works on the basis of ceiling prices and although these are updated every year, they do not make up for rising costs due to inflation. Furthermore, these tenders are sometimes open to foreign companies that often offer lower prices and lower quality. These circumstances have led us to reduce the prices at which we sell to the public sector by about 50 percent compared to five years ago.
Q: What new lines is Atramat developing?
A: We recently launched a suture with an antibacterial coating designed for special procedures where there is a greater risk of infection. A clinical study conducted in Mexico showed a significant reduction in infection when this suture was used. The study was performed with gastric bypass patients who had lost between 40kg and 60kg and required reconstructive plastic surgery. We formally launched three antibacterial lines at the beginning of 2018.
In the last five years, we have been exploring new lines in order to increase our product portfolio for the operating room. A few years ago, we launched a range of spinal implants manufactured by a US company and we will eventually expand this line to include other orthopedic products, such as knee and hip implants. We are also expanding into new markets in Europe and for this reason decided to open a subsidiary in Spain at the end of 2016.
Atramat manufactures surgical instruments. It is one of the world’s largest suppliers of surgical sutures. The company belongs to Internacional Farmacéutica and its products are sold in over 80 countries
IMPROVING SYSTEM EFFICIENCY THROUGH BED TECHNOLOGY
MAURICIO VALERO Managing Director of Linet Group SE in Mexico
Q: What market opportunities have you identified in the Mexican population regarding epidemiology and social trends?
A: We want to improve and amplify markets like geriatric care. Between 1990 and 2017, the percentage of adults over 60 years old in Mexico rose from 6.4 percent to 10.5 percent. This social evolution requires changes in healthcare since there are no precise public policies regarding who is responsible for providing care to this population in Mexico.
We are interested in focusing our technology on home care. We have developed specialized beds to this end and we want to make them available to the public. These beds can prevent a significant number of fractures caused by falls, with safety devices to protect the patient. The beds can also reach a very high height, so when the patient lies down it is easier for the caregiver to perform activities like changing the sheets.
Between 1990 and 2017 , the percentage of adults over 60 years old in Mexico rose from 6.4 percent to 10.5 percent
We are waiting for a regulation from the Ministry of Health and the National Geriatrics Institute ( INGER) that specifies the infrastructure required in homes and specialized institutions. Meanwhile, we want to reach caregivers, nurses and families who have someone at home with mobility problems and also residences so they can improve their offer and provide the best care.
Q: How does Linet contribute to the treatment of chronic diseases?
A: Chronic diseases such as diabetes, obesity and renal insufficiency are impacting the Mexican population. With the purchase of BORCAD Medical in 2016, Linet acquired a solution to alleviate the impact of kidney failure: special chairs that provide a more comfortable experience as
patients receive their treatment and which can be used to provide treatment in places that do not have the necessary infrastructure.
We also have a line of beds for gynecology and obstetrics that we presented in July 2017 at the Mexican Congress of Gynecology and Obstetrics.
Q: What is the status of your goal to establish a plant in Tijuana?
A: The opening of a manufacturing plant in Mexico through which we can distribute both to the US and Latin America remains one of our objectives. We hope that the economic relationship between the US and Mexico stabilizes so that we can finally make a decision on this project. We are still thinking about locating it in Tijuana, because this location offers the best opportunities in terms of logistics, costs and supply chain.
Q: Where do you see the greatest opportunities 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 provide the services we want and to achieve the growth we expect.
Q: How does Linet technology contribute to improving the efficiency of the Mexican healthcare system?
A: In the public sector there is a large installed equipment base, although almost half is obsolete. The inclusion of new beds will help public institutions reduce the time that patients stay in hospital. The reason for that is that better materials are much less prone to cause infections and can help patients prevent the development of ulcers caused by pressure.
With our technology for ICU beds, it is possible to reduce the length of stay in one of the most expensive areas
in a hospital. In addition, technology helps to reduce complications like pneumonia, caused by mechanical ventilation with automatic lateralization. We are also thinking about the safety of patients and the professionals who help them.
We are pleased that both in Mexico and the world, people recognize the importance of beds in the recovery of a patient. Hospitals and healthcare systems now see it as a medical device, not as a piece of furniture.
Q: What is the purpose of each line?
A: Our portfolio is called ICU Complete and its purpose is to show that there are complete solutions for the intensive care area. The portfolio consists of four categories of beds: Alive, Safe, Recover and Well. In ICU Alive, we develop beds with features that are focused on the vital functions of the patient. For example, Alive beds have a Smart CPR, a button that commands the bed to go into position for CPR. These beds also have a chamber where the digital detector is placed for X-ray imaging. When patients are in ICU they cannot move which might cause them to accumulate liquids in their lungs and eventually this situation can lead to pneumonia. The bed allows lateral movements for the patietn that help prevent the gathering of liquids.
The second category is ICU Safe and its objective is the prevention of ulcers, respiratory complications and falls. The three beds in this category have technologies like active mattresses that inflate and deflate in different sections with different frequencies, so the pressure is not transmitted to one place on the body. Also, to avoid falls, beds have several types of alarms that warn of various risks that may threaten the wellbeing of the patient.
The third line is ICU Recover, which provides a support system in each of the bed's three adjustable levels. These beds include mechanical devices that help nurses and caregivers move the patient, an important contribution to their physical health.
The fourth category focuses on helping nurses and doctors to execute tasks that are common in the ICU. The three beds in this category incorporate scales to load the patient more easily into the bed and pedals that help professionals climb into the bed to help or move their patient if the nurses or doctors have their hands 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 to move the patient. All our beds fully comply with the relevant European norm, which is the strictest in terms of hospital security.
Q: How do you train workers to use these technologies?
A: One of the main reasons for our success in the region is that in our team, we have nurses who come to each facility to train users on all the applications. When clients buy from us they do not only buy a product, but also acquire the complete support system of the organization. Our training team teaches doctors and nurses how to perform all their activities in the new beds, how to clean them and how to use the technology.
Q: What are the commercial objectives of this offer?
A: This campaign is mostly oriented to the private market. In the public market we have done very well. Last year, we sold more than 1,000 ICU beds but we believe the market is no bigger than 1,200 per year. From those 1,000 beds around 990 went to the public sector as private institutions are not investing in this. We are trying to make this offer technologically, clinically and commercially interesting. The plan is to reach them with high-end technology at an attractive price.
Q: What are the company’s expectations in Mexico?
A: We want to continue leading the market in hospitalization and ICU beds. We want to have 100 percent coverage of the Mexican territory and Latin America. The company also wants to compete and achieve a leadership position in geriatric and chronic home care and in gynecology beds. Finally, we want to establish as an intrinsic experience a continued high-quality aftersales service. With these goals in mind we will continue growing.
Source:
Linet Group SE is a top manufacturer of hospital beds. Its business portfolio includes solutions designed for intensive care, products for routine treatments and special beds for nursing homes and long-term care centers
General Manager of Essity Medical Solutions Mexico
Q: What added value differentiates BSN Medical’s products from those of the competition?
A: BSN Medical is an Essity company. It was acquired in April 2017, creating the business unit Health & Medical Solutions to empower customers, patients and caregivers with products and solutions that support healthy and active lives. We are considered world leaders in healthcaremarket specializing in our three business lines: Compression Therapy, Wound Care and Orthopedics. Our high quality and our strong technological competencies are the main differentiators of our products. The JOBST brand provides high-quality compression stockings, HYPAFIX is considered a professional dressing option and we have a wide range of slings and high-tech splints in orthopedics.
Q: What are the company’s biggest selling products in Mexico?
A: The market has a strong demand for traditional products so our biggest selling line is in wound care followed by orthopedics and compression. According to sales per unit, tape occupies first place and the compression division follows as one of the best-positioned products in that segment of the Mexican market. Our brand JOBST is a pioneer in the concept of gradient compression legwear and now we have over 30 products in our portfolio, ranging from products that promote venous blood circulation to those that treat lymphatic diseases.
Q: What role does Mexico play in Essity’s BSN Medical’s operations in Latin America?
A: BSN Medical, as the Medical Solutions segment of Essity’s Personal Care division, considers Latin America a growing region. We have a strong presence in Chile, Colombia, Brazil, Mexico, Central America and the Caribbean. Colombia is our main market in Latin America followed by Mexico, Brazil and Chile. We have been in Mexico for approximately 20 years.
BSN medical became an Essity company in 2017. Essity sells in approximately 150 countries under a variety of brands, including TENA, Tork, Leukoplast, Libero, Libresse, Lotus, Nosotras, Saba, Tempo, Vinda and Zewa
The country plays an important role for our operations in Latin America.
Q: What segments of the market offer an opportunity for BSN Medical's products?
A: The wound-care market is underdeveloped. We have a great opportunity to position our products, which offer great quality, and new and high-tech therapies that provide greater benefits for the patient. For example, gauze is considerably cheaper than a bandage but in the long-term gauze requires more replacements. BSN Medical's dressing maximizes the cost-benefit for the patient.
Q: What is needed in Mexico to develop an innovative market in wound care and how can BSN Medical participate in this dynamic?
A: Today, only 20 percent of the market is developed. The task of the industry is to increase market development in Mexico by 25-30 percent to improve technology and innovation in advanced therapy solutions. One of our priorities is to penetrate in the public sector channel and create awareness about the benefits of investing in wound care technologies.
Q: How do your products increase efficiency and reduce costs in the health sector?
A: Shorter hospital stays reduce costs for the medical care system and the use of technologies for wound care can lower expenses. In addition, our products offer a real solution for the patient because the benefits are greater. We are the best option for health institutions, whether public or private, because our main interest is to improve the quality of patient care.
Q: What trends is BSN Medical observing in Mexico's PAPS medical services sector and how can BSN Medical take advantage of this opportunity?
A: There is a clear digital trend in PAPS medical devices as marketing and digital media are creating synergies with e-commerce to deliver products more efficiently to the customer. Some companies already have e-commerce experience but not in the medical devices segment.
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 delay a necessary operation because of an inability to pay can have severe consequences. This is particularly true for those waiting to have part of their skull repaired. Epóxicos para la Salud (EPSalud), a Mexican startup that manufactures Masi-Epoxi, an affordable bone substitute for cranial and vertebral protheses, hopes this product will bring relief to these patients. “There are many individuals in Mexico who have required a cranioplasty for many years but have been unable to afford it. Furthermore, there are approximately 22,000 new cases ever year,” says Karina Ramírez, EPSalud’s Administrative Director.
Cranioplasty refers to the surgical repair of a defect on the skull. If the missing part of the cranium is unavailable, a substitute made of metal, synthetic bone or acrylic can be used. Masi-Epoxi, a patented product that is awaiting COFEPRIS approval for commercialization, is meant to be an affordable option for these patients. “The cost of Masi-Epoxi is similar to that of other metal prostheses. On average, both the metal plate and Masi-Epoxi cost MX$15,000, but with 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 accessories to fix the prothesis to the bone.”
Masi-Epoxi, expected to launch in late 2018, is the formulation of an epoxy resin, several minerals and accelerators that allow EPSalud to modulate the hardening process. “MasiEpoxi’s main advantage lays in its adhesive properties, which eliminate the need to use screws, adhesives or cements. Unlike other substitutes, Masi-Epoxi strengthens over time while other materials become loose or gradually crack,” says Ramírez.
EPSalud has positive expectations for Masi-Epoxi and the benefits for patients but bringing it to market has been an arduous process. “The Mexican market for medical devices is extremely complex. COFEPRIS guidelines are long and
complicated. This leads many startups to give up or sell their technology to another company, sometimes in another country,” explains Ramírez. In her opinion, a large challenge for all startups in the sector is their inability to sell a product without COFEPRIS approval, which takes up to a year to acquire. “To finance ourselves through the approval process, EPSalud developed a parallel line for the import and sale of urology catheters.”
According to Ramírez, innovation for healthcare in Mexico faces two major obstacles. The first is regulatory. COFEPRIS is still a young organization so it does not yet have the appropriate measures to tackle innovative projects developed in the country. That leads to a smaller number of startups willing to develop these products, which in turn eliminates COFEPRIS’ need and opportunity to update its processes.” The second hurdle is the lack of investment funds. “Most local funds work with Big Data solutions and other technologies, but they are reluctant to fund projects in healthcare because they are fully aware that the recipient will not produce sales for an entire year.”
Approximately 22,000 cranioplasties are needed every year
The company’s long-term plan is to acquire FDA approval to export to the US, while also entering the basic lists of Mexico's public institutions, including the General Health Council, IMSS, ISSSTE and every hospital the company hopes to sell to. “Since this process can take up to six years, we are planning to work with the government through a different strategy that involves the generation of small clinics that perform this surgery with the support of public institutions. This strategy will also allow us to bring the surgery closer to patients who have been left waiting on the surgery backlog.”
EPSalud’s ambitious plans will start with the commercial launch of Masi-Epoxi. “We are now 90 percent ready to launch the product,” Ramírez says.
STAND FIRM IN THE MARKET
GERMÁN GARCÍA Director General of Smith & Nephew Mexico
Mexico is among the Top 10 manufacturers of medical devices, but the country has been delayed in accessing these same products, says Germán García, Director General of Smith & Nephew Mexico, a medical devices company that manufactures joint replacement systems for knees, hips and shoulders and products for advanced wound management.
“Mexico is the seventh-largest manufacturer of medical devices in the world. Medical devices companies see significant potential in Mexico but are often stumped by their low penetration. The Mexican market for medical devices, in terms of use, is growing at a less than 10 percent rate, 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.”
“In terms of use, the Mexican market for medical devices is growing at a less than 10 percent rate, much slower than expected”
This complex system makes innovative medical devices unavailable to most of the population as public health institutions do not finance them and only 7 percent of the population has access to private insurance. “Mexico has one of the lowest penetrations of medical devices in the OECD and Latin America,” says García. This barrier is also felt by medical devices manufacturers, which feel blocked from accessing Mexico’s largest market. “Public health institutions acquire 80 percent of all medical devices in terms of value, while the rest is acquired by the private sector. Public institutions, however, do not take into account the benefits of innovation when deciding what products to acquire.” García points to the example of Smith & Nephew’s Acticoat, a patented dressing for wound treatment with silver particles for the treatment of burns. “IMSS’ basic list does not have a classification for this type of product and creating a new category would take years. We are
competing with entirely different dressings that come at lower prices and are less effective.”
Barriers to innovative devices not only impact patients, but also the healthcare system itself. “While these products are often thought to be more expensive, a cost-benefit analysis reveals that innovative medical devices act faster and reduce infections.” To address these barriers to access, Smith & Nephew has developed a division for emerging markets that targets the introduction of less expensive products.
Still, García sees a positive future for the medical devices industry thanks to joint efforts by the industry and government. “The Ministry of Economy wants to prioritize the segment in the same way as tourism and the automotive 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.”
Smith & Nephew also sees a positive future for itself in Mexico, says García. “Our goal is to grow annually by 20 percent in sales, while our compound annual growth for the past few years has been 16 percent. The company’s objective is to continue growing at this rate through tenders with the public sector and we are increasing our market penetration in some regions.”
In 2018, Smith & Nephew will introduce a new version of the ANTHEM Total Knee System, this time with a stabilized support that is used when the knee ligaments are not removed. The road ahead might be challenging, but García explains that efforts to promote and strengthen the sector must continue. “Mexico is extremely behind in market penetration and technology for medical devices and must work toward increasing access to these devices to become more competitive.”
NEW STRATEGY FOR FUNDING, PROVIDING PROSTHETICS
FRANCISCO UGARTECHEA Director General of Ottobock Mexico
As the number of amputees grows, the gap between those who require a prosthesis and those who receive one is widening, mainly because public institutions lack the necessary funding. Francisco Ugartechea, Director General of Ottobock Mexico, is implementing a new strategy not only to reduce this gap, but to introduce higher-technology 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 all amputation cases are of lower limbs and the remaining 30 percent of upper limbs.
Ottobock participates in tenders from the public sector, mostly for Integral Family Development (DIF) units and the Health Regulatory Commission (CRES), but these institutions often face severe budget restrictions that affect the service they provide. “Many DIFs in remote locations do not have even a single prosthetist,” says Ugartechea. The company found itself needing to change the way it addressed these patients in order to provide them with prosthetics. “This year, we will focus on indirect patient care by providing doctors with equipment that will allow them to take measurements and send them to us, so we can work remotely. We send them test sockets, they send us their feedback and we send the final socket and prothesis.” Previously, Ottobock worked with prosthetists. However, this approach created a barrier between the company and the patient and did not translate into benefits for the latter. “Getting closer to the patient allows us to gain better knowledge of their needs,” Ugartechea says.
To make these changes, Ottobock began performing medical evaluations at its installations with the support of two prosthetists employed by the company. But bringing patients
to its office will not place the company in direct competition with other prosthetists. “We will not compete with prosthetists; we will help the patient understand what Ottobock can do for them. We are also carefully entering hospitals to approach patients before amputations are performed. The amputation of a limb is a great physical and emotional loss so we want to 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”
Prothesis have widely different price points depending on the technology and the patient’s needs. “While some prosthetists recommend high-tech products, the specifications of the prosthesis must match the specific needs of the patient. Sometimes the best combination is much less expensive,” Ugartechea says. Ottobock also supports patients with financing schemes. “Some may think that Ottobock is the most expensive option, but we have products for every budget,” he adds. Ottobock wants to introduce a midlevel product that has more technology but at a reasonable price.
Ottobock Mexico closed 2017 with MX$65 million in sales and the company aims to raise that number to MX$90 million this year, explains Ugartechea. In 2018, the company plans to grow its orthosis division, mostly for neurological, trauma, post-surgery and rehabilitation purposes. “The market for orthosis products is five times bigger than that of prothesis,” says Ugartechea, “but there is much more competition. While we might not be too competitive in the commodities division as we compete with national and Chinese products, we offer one-of-a-kind products like Malleo TriStep.” This product is for patients who suffer a bone fracture and lose muscle tone due to immobilization of the limb.
TECHNOLOGY OFFERS MANY OPPORTUNITIES FOR PHARMACIES
GUILLERMO MARTORELL President of Grupo RFP
Q: In 2017, Grupo Regional de Farmacias Productivas (Grupo RFP) mentioned that it would create an exclusive generic brand. Where does this goal stand?
A: Grupo RFP is working to promote an exclusive line of generics throughout the group that will be positioned as an alternative at our pharmacies. The group expects the generic line to become the main option for those consumers who are looking for an equivalent product at a lower price. Grupo RFP wants to offer accessible and quality alternatives to those who cannot access patented medicines and we hope that the generic line satisfies 80 percent of general medicine consumption.
Q: What collaborations does Grupo RFP have in the Mexican health sector and how do this support the pharmaceutical industry’s development?
A: Our pharmacies work in two ways: the first is counter sales to the general public and the second is through institutional sales. Grupo RFP wants to be more efficient through digital development. Traditionally, medical prescriptions are very bureaucratic and have delayed processes. We want to simplify this communication between us and our customers through a digital platform that connects all players in the value chain. Grupo RFP
HOSPITAL
Source:
believes that the inclusion of technological tools in its operations can be the key to strengthening areas such as pharmacovigilance, fraud-risk reduction, better traceability of medicines and easier communication with laboratories, distributors, and suppliers.
Q: What impact can the inclusion of technological tools have on both Grupo RFP and the final customer?
A: Technology offers many opportunities for the industries that adopt them. For pharmacies, technology means greater control over drugs and an improvement in pharmacovigilance. The operational benefits are only one element because there are other benefits for the patient and the pharmaceutical companies. Patients can improve treatment adherence with easier access to medicine. Technology also generates anonymous information that helps pharmaceutical companies create market intelligence strategies. Technology can offer opportunities that were not possible before. Grupo RFP wants to promote a relationship between technology and pharmaceutical products by connecting all the agents in the value chain. Our platform will include a communication space between the laboratory, the distributor, the point of sale, the hospitals and the medical network until the medicine reaches the patient.
This symbolizes a very important advance for the group’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 patient’s hands are original, safe, accessible and quality medicines. Grupo RFP’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
NORTHERN PHARMACY CHAIN EXPANDS THROUGH MEXICO
MACEDONIO GARZA
Director General of
Farmacias Benavides
Q: Farmacias Benavides increased its market participation by 7.22 percent in 2017. How are you positioned in the country?
A: Farmacias Benavides turns 101 years old in 2018. The company began operations in Monterrey and four years ago was acquired by Walgreens Boots Alliance (WBA). As a member of WBA we are part of the leading pharmacy group in the world. In Mexico, we now have 1,218 points of sale spread across 24 states, from the north of the country to Mexico City.
Q: When Farmacias Benavides turned 100, it established the goal of launching in 100 locations per year. What is the status of this plan?
A: We are keeping up with this goal by focusing on markets where we are already present but lack the necessary coverage, mainly in the central region of Mexico. After 100 years, our clients recognize our expertise in the sector. Over that time, we have cultivated our connection with our clients by training our employees and hiring more when necessary. The most important part of a pharmacy is for clients to feel safe with the service provided by its employees. Pharmacy customers also value the high availability of products and the industry invests heavily to maintain large inventories so prescriptions can be filled. We have brought the target down a little bit mainly because we want to ensure the highest WBA standards are met when we open stores.
Q: How are you using technology to improve the efficiency of your distribution center, Centro de Eficiencia Logística?
A: Our Centro de Eficiencia Logística in Monterrey functions as a spearhead for our distribution strategy. This single center has sufficient capacity to address our expansion needs for the next few years. We are planning to install a new warehouse management system to improve our distribution capabilities and to plan for future demand.
Farmacias Benavides, with over 100 years of experience, is one of the largest pharmacy chains in Mexico. The company was acquired by Walgreens Boots Alliance in 2014 and has 1,218 points of sale in 24 states
This system will also permit efficient distribution to future pharmacies. Our logistics chain has 12 cross-docking centers distributed throughout the country that allow us to reach places such as Tijuana, Mexicali, Puerto Vallarta and Veracruz.
Farmacias Benavides has also invested in the consolidation of its drug distribution through the implementation of processes to predict demand. This allows us to guarantee the supply of the necessary products, especially during seasons of high demand.
Q: What role will online platforms play in Farmacias Benavides’ future?
A: Farmacias Benavides does not have an online sales platform, but we do have a call center that clients can contact and order products to be sent to their homes. We have a strong presence on social networks, including Facebook, where we have over 443,000 followers. We have over 8,000 followers on Twitter and 7,000 on Instagram, with 22,000 followers in LinkedIn and growing tremendously year by year. Furthermore, we have a platform that allows us to interact with clients of our loyalty program, Beneficio Inteligente (Smart Benefit). This platform allows us to interact with millions of clients and to offer them promotions based on their purchasing profile.
Beyond digital, WBA has a track record of innovation, trust and care with deep roots in our communities. We have been delivering healthcare through our pharmacy and store networks and online for years. For instance, Walgreens fills one prescription from a mobile device every second.
WBA has pioneered healthcare innovations that have been in the news recently, mostly in the US. For example, 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 home. In Norway with “Farmaka” and in The Netherlands with “SPITS” we have pioneered online pharmacy delivery services, including pre-pack and unit dose dispensing 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.
Q: How did the presence of doctors at the point of sale improve Farmacias Benavides market penetration?
A: Our pharmacy doctors are the pillars of our business goal to provide clients and patients integral solutions for their health and well-being. These doctors give patients the opportunity to acquire fast, trustworthy and easy-toaccess care. We have built a network of 624 doctor’s offices with 870 certified doctors who are prepared to treat any primary medical need. We offer general attention, weight and birth-control monitoring, blood pressure and glucose tests, injections and verification of health certificates and we keep an electronic record of all the patients we receive. The clinics provide only primary attention so if a patient needs a more specialized service they are channeled to the proper specialist.
Q: How is the incorporation of retail chains changing the pharmaceutical market? What are Farmacias Benavides’ strategies to compete?
A: We welcome competition, which stimulates our continuous improvement processes. The entrance of these players is a sign that the sector is professionalizing in terms of primary attention and medicine supply.
Q: What other trends will affect pharmacies in the shortterm and how will Farmacias Benavides address these?
A: We will remain vigilant against the diseases that are increasingly prevalent in the country, such as obesity and diabetes, to contribute to the improvement of people’s quality of life and to be prepared for future product requirements. Our priority is to consolidate as a provider of healthcare and wellbeing.
Q: How is Farmacias Benavides strengthening its position among its national and international competitors?
A: We will increase our offering of quality products and we will also differentiate ourselves through our own brands. From October 2018, we will be introducing gradually the generic brand Almus and its series of products to address the country’s most common diseases to have full coverage by this date. This is a leading brand in the European market and will provide significant benefits to our clients, including quality and safety. These products include an innovative design and packaging that will help to minimize errors in dispensation and use. We are also launching the Farmacias Benavides brand for OTCs. While new, this brand also adheres to WBA’s quality standards. We are now allying with local laboratories to investigate the possibility of manufacturing these products in the country.
We are introducing other international brands from our wellness division, most of which will be related to cosmetics and other dermatological products. The products we will introduce will only be sold in Mexico at Farmacias Benavides.
Q: What opportunities does Farmacias Benavides see in the Mexican market?
A: We have identified dermatology as an attractive business opportunity that can complement our existing product offering for well-being. In this division, we are already supplying global brands such as No7, Soap&Glory, Tea Tree Witch, Hazel, Soltan and Botanics.
PHARMACY CHAIN EVOLVES QUICKLY TO KEEP UP WITH CHANGES
ISAAC VALDIVIESO
Director General of Farmacia San Pablo
Q: What are the main trends that Farmacia San Pablo is seeing in the market and with pharmacy suppliers?
A: Although our core business remains the same, many things have evolved, including technology, processes, the market and regulations. Our personnel had to evolve alongside the sector through local and international courses. We will continue changing and in the next five years, we expect to incorporate many new products. New distribution channels like Amazon are entering the market and leading us to reinvent ourselves. New trends have also emerged in terms of management, so we are working to ensure that our employees are prepared. All pharmacy chains are growing, which is intensifying the fight for the best talent.
Major suppliers are increasingly taking a larger role and increasing their prices and often they do not provide sufficient products. Suppliers seem to be changing their business model to one based on product rotation. This has caused problems for pharmacies due to the wide variety of products we offer. Laboratories have also shown gaps in supply in recent months.
Q: Is Farmacia San Pablo focusing more on retail or on its online platform?
A: The online market is still too young to reach definitive conclusions but the general consensus seems to be that neither will replace the other; the market is more likely to differentiate depending on the product that is being sold. In the US, some analysts believe that the division between online sales and the retail market will be 50-50, but Mexico is in an entirely different situation. There is no data with which to make a proper prediction.
Q: In which areas should local regulation be changed to strengthen pharmacies?
Farmacia San Pablo is a Mexican pharmacy chain created in 1936. It has 120 points of sale with 7,000 employees, one distribution center, two call centers and two corporate offices. Farmacia San Pablo also has an online sales platform
A: Regulators have taken significant action to improve the manufacture of medications but regulations have been left behind, especially for sales and distribution. Regulation regarding pharmacies has lagged far behind and regulators lack the necessary funds to properly address many issues. For instance, the sale of psychotropic medications is not applied correctly due to the lack of technology and the adequate processes to control it.
Q: How are retail stores changing the market? What is Farmacia San Pablo doing to adapt?
A: It is necessary to divide the pharmaceutical market between prescriptions and OTCs. In the case of OTCs, convenience stores like OXXO will have the opportunity to position themselves, but since the sale of prescription medications is highly controlled, convenience stores might not be willing to undergo the complex processes necessary to sell them. Moreover, these stores could only have a limited product offering as it would take a significant amount of space to store. In the case of self-service stores like Walmart, the consumer’s approach is completely different from that of a pharmacy, since it involves more planned shopping and is a more time-consuming experience. Consumers are unlikely to enter one of these stores just to buy a medicine because it would consume too much time compared to visiting a pharmacy.
Q: How is Farmacia San Pablo positioning itself among pharmacy chains?
A: All pharmacy chains have different market strategies. Some are focusing on the sale of medicines as commodities and for that reason their model is shifting towards that of a self-service store. Others are focusing on immediate supply. Our pharmacy is a mixture of both and includes a broad portfolio of healthcare products in addition to medications. 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 at the point of sale but only in a few pharmacies. Having doctors at the point of sale is not part of our core business but clients are increasingly requesting them. For the rest of 2018, we will focus on sustainable growth.
DUAL CAPABILITIES HELP CARVE MARKET NICHE
FRANCISCO CANTÚ
Director General of Fármacos
Proasse
Q: What niche does Fármacos Proasse occupy in the pharmaceutical market, both as a pharmacy and as a distributor?
A: Fármacos Proasse is a family business created more than 20 years ago. We distribute all kinds of medications, from those for the most common diseases to highly specialized medicines. We have three pharmacies in Monterrey and provide storage and distribution for medications that our partners introduce into Mexico. We work directly with many laboratories to distribute their products to the private sector, including insurers, hospitals, pharmacies and other distributors. Our mission is not to distribute medication, but to provide a service. We have two offices in Monterrey and Guadalajara from where we can deliver to all of Mexico through partnerships with the main logistics operators.
Q: What are the main advantages companies obtain by allying with Fármacos Proasse?
A: One of our main advantages is our flexibility, which allows us to cover our client’s needs in a more customized way. Larger distributors are often inflexible with credit limits, payment dates and delivery times. At Fármacos Proasse we work 24/7 and deliver even during Christmas. For instance, we supply a coagulant that may be required during surgery to stop the loss of blood. If a doctor needs it at 3 am, the hospital can contact us and we will deliver the product in 60 minutes.
Q: What trends is Fármacos Proasse seeing in the Mexican market?
A: Mexico’s population pyramid is gradually changing, with a growing number of older people who will require specialized attention. We keep up-to-date on new drug releases that may be of interest to our doctors and we are in direct contact with healthcare providers to track drug trends. So far, we have perceived significant growth in biotechnological medicines and believe that as time goes by, medicine will become increasingly personalized. Another market area that has grown significantly in the last years is generics, which are making many treatments more affordable.
Q: How does Fármacos Proasse ensure the safety of the medications it delivers?
A: Medicine manufacturers continuously train us on strategies and technologies to keep products under the cold chain and to ensure that products never leave certain temperature ranges. We also have agreements with our distributors to ensure that they handle our products with the care that medications require. Most logistic companies have a specialized department for the management of medication and often prioritize medication deliveries to minimize the transit times.
Q: How do you monitor the market to ensure you have the necessary products in stock?
A: We have close relationships with the procurement departments at hospitals and insurance companies and with pharmacy doctors. Doctors and insurers like to communicate their needs to ensure that patients will not have problems filling their prescriptions, which is a common problem with highly specialized medicines.
In the case of insurance companies, they get the information directly from patients and pass the request to us. We are working with four insurance companies: Seguros GNP, Seguros Atlas, Sisnova and Chubb Seguros Mexico and we continue looking for new partners in this sector.
Q: What are the next steps in your business plans?
A: We plan to continue consolidating our position among insurers and opening more pharmacies in Monterrey. We also plan to diversify our client base. At this point, we have three points of sale and a distribution center in Monterrey. We are also analyzing other cities in Mexico for opening branches, such as Mexico City, Saltillo, Torreon, Mexicali, Tijuana and Merida.
Fármacos Proasse has three pharmacies and a distribution center in Monterrey, where the company is headquartered. The company also supplies medications to pharmacies, insurers and hospitals throughout Mexico
ACF GROUP’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.
AQUAUF’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.
INNOVATION AT THE SERVICE OF THE USER
FRANCISCO MORALES
Director
of
Healthcare Division at 3M
Q: How does 3M manage the introduction of new technologies given associated costs?
A: When a medical device company wants to introduce its products to the market, it faces two possibilities: the public sector or the private sector. The process for the private sector takes approximately six to 12 months to obtain a sanitary registration and start commercializing the product. In the public sector, it can take up to four years to introduce innovation and technologies because the process is highly complex. 3M’s approach is to generate value proposals that have a balance of costs and benefits, so that it is easier for the government to authorize the inclusion of our medical devices in the basic list. For example, 3M has a product called Bair Hugger, which is designed to keep the patient warm during surgery. In the long term, a product like this can save a considerable amount in medicine and for instruments that are used to achieve normothermia standards. All our products offer a reduction of infections at surgical sites of 25 percent, which in turn reduces hospital stays by 40 percent. This translates into lower health expenditures for institutions.
Q: What role will technology play in the healthcare sector?
A: 3M believes that innovation can improve lives. In the field of medical devices, the important issues are prevention and the diagnosis, treatment and rehabilitation of a patient. Therefore, the approach that must be taken with technology, innovation, digitalization and automation should target prevention to reduce the cost of health.
Q: How can a prevention approach be implemented by the medical devices sector?
A: Our division for oral health and care works with schools, the government and other institutions to promote the use of tooth enamel that prevents the formation of cavities. The idea is to educate people to prevent tooth decay and
3M, headquartered in the US, manufactures a diverse variety of products for the health, automotive, energy and communications industries. The company is one of the world’s largest manufacturers of science and innovation products
to have healthy teeth. Oral health is important for the wellbeing of a person because that is where the feeding and digestive processes begin. In this sense, by promoting the use of dressings and our medical devices, 3M can help to cultivate a prevention culture in health.
Q: How is 3M growing in the local market given current economic conditions?
A: The medical devices market grows between 1 and 2 percent per year and our goal is to grow three times more than the market. 3M works hard to improve standards and patient care practices because these practices also improve the market. For example, in the food industry there is a traditional method for testing whether pathogens are present or not. The company has a technology called Pretrifilm that contains almost all microbial tests while saving time on quality tests. 3M wants to change traditional practices and innovate through new technologies.
Q: What internal regulations need to be improved to facilitate the importation of medical devices?
A: The registration for regulation processes for the import of medical devices has improved considerably. 3M has observed a positive trend over the last couple of years, so what is needed now is an alignment with international standards to facilitate the validation of our regulation with other countries. Also, the double process that exists in Mexico generates obstacles to improving access to medical devices in the public sector which makes a company to first enter the basic list and then repeat the process for each institution. This causes delays and excludes some technologies from the public sector.
Q: How can 3M systems improve healthcare practices at public institutions?
A: Our technologies standardize and improve processes at health institutions. 3M believes that when processes are standardized, diagnoses and results become more constant. We are planning to complete 16 product launches by the end of 2018. Consistent launches are the key to our main strategy of promoting the improvement of our products, but also to be more competitive.
PERSONALIZED SERVICES FOR A SOPHISTICATED CONSUMER
Mora CEO and Co-founder of Farmalisto Mexico and Colombia
CEO
Q: As a pharmacy, what have been the greatest lessons of working with a digital business model?
JC: Our business model is new for Mexico and Colombia, which has resulted in specific challenges. The consumer is increasingly sophisticated and demanding in matters of health, including pharmacies. At the same time, we see how the industry is changing to adapt to new technologies. Today, we see how the consumer has an impact on the processes of distribution, consumption and the manufacture of medicines.
JM: Farmalisto offers a very accessible supply of products and shipping, which in complex cities such as Mexico City and Bogota become very attractive. At Farmalisto, the consumer has the comfort, speed and security that he needs to obtain his medications.
Q: Why is Farmalisto the ideal ally for companies in the pharmaceutical industry looking to increase their sales through e-commerce?
JC: Farmalisto provides convenience. Farmalisto aftersales services are valuable for the industry. Usually, pharmacies only provide the medication and leave the treatment in the patient’s hands.
At Farmalisto, we provide follow-up, reminders and additional services to encourage the adoption of treatment. If the patient’s treatment requires a nurse, a doctor or a psychologist, we send it to him or her so that the adherence is guaranteed. This benefits both the pharmacist and the patient.
JM: The lack of efficacy with pharmaceutical treatments is due to the lack of compliance to the treatment. Traditional pharmacies are limited at improving adherence because they only sell medicines and do not follow-up with the patient while pharmaceutical companies, by law, cannot 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 greater adherence to the treatment at the same time, we are guaranteeing that the pharmaceutical product is sold in the market.
Q: What steps does Farmalisto take to increase customer safety and data security? How does this impact your e-commerce services?
JM: Normally, the first time the patient orders from us, he pays us cash on delivery, but once the client knows and trusts us, they migrate to other payment methods and consumption behaviors. We are very careful with patient information and we only use it to know the market, the treatment adherence and the position of a brand, among others. The information we share is to provide pharmaceutical companies with data on consumer behavior and the characteristics related to their brand.
JC: The health sector is very delicate and highly regulated, in addition to the fact that the population that consumes the highest percentage of pharmaceutical products (the elderly) is not so digitally savvy. Our data is secure, encrypted and separated in repositories outside of Mexico that are not accessible from anywhere in the world except from our offices. Everything we share is anonymous, depersonalized or with explicit authorization from the patient.
Q: What potential use do the data collected by your platform have for the providers and partners with whom you work?
JC: The information we collect helps us to understand trends in the market and even detect disease outbreaks. Our data is useful for pharmaceutical companies to organize their demand planning and distribution points. Also, it opens the door for us to venture into new projects, such as telemedicine, Big Data and market pre-condition services.
JM: Farmalisto can detect disease outbreaks because we receive information in real time. We know when there is a spike in demand for certain medications in certain areas and help pharmacies supply the necessary medications on time.
Farmalisto is the largest online pharmacy in Latin America. It has offices in Mexico and Colombia and offers medicines and products for the treatment of health and the improvement of the quality of life of patients
José
José Crespo
of Farmalisto Mexico
Surgery room with Dräger Polaris 600 lamps and anesthesia machine Perseus A500
MEDICAL DEVICES 6
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, Mexico’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.
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
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 administration of Enrique Peña Nieto, medical devices companies have had to rethink their business models. The introduction of technologies to the public sector became more complex while the need to address the country’s epidemiological transition and the aging population through technology became increasingly important.
Given these conditions, medical devices companies are restructuring their portfolios and expanding into new digital offerings through new business models that can guarantee the greatest number of opportunities and reduce risks for healthcare providers, says Alejandro Paolini, General Manager of Siemens Healthineers Mesoamerica. “The benefits of innovation in the healthcare sector are 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, cost 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, more than 50 percent for nuclear medicine systems, 26 percent for stereo-tactic mammography machines and 17 percent for gamma cameras, according to Global Health Intelligence.
However, the medical devices segment, private industry and the government still have challenges to overcome. “The private sector has challenges in modernization and in using technology to offer specialized services and more productive schemes. While in the public sector, it is a priority to increase and improve access to medical
care for Mexicans in all regions, rural and urban, more through the use of technology,” says Miguel Nieto, General Manager and Cluster Business Manager Mexico of Carestream.
Once Mexico integrates technological solutions and provides greater access to its population, the changes can be translated into benefits, with a total impact on the health system, since the impact of Industry 4.0 is not just in Mexico, but global. “Before the application of Industry 4.0 principles in healthcare, a doctor could only accumulate experience by caring for more patients; now, doctors have access to the experience of millions of medical cases. Also, this technology is helping hospitals outsource their management systems, allowing them to devote fewer resources to management and focus on providing care,” says César Carrasco, Country General Manager of Philips Mexico.
HOSPITAL EQUIPMENT DEMAND GROWTH IN MEXICO 2016-2017
FORECAST OF HOSPITAL EQUIPMENT GROWTH IN LATIN AMERICA FROM 2016 TO 2017
Source: Global Health Intelligence
Source: Global Health Intelligence
PROMOTING MODERNIZATION
The medical devices under CANIFARMA’s RSD division represent companies that can generate biometrics through clinical tests and diagnostics, which are fundamental in the pre and post-operative stages. This division also includes authorized manufacturers and distributors of medical devices in Mexico; thus, a collaboration between the medical devices and public health sectors could result in great benefits for the population, says Guillermo Ferrari, General Manager of Eseotres.
“Better coordination among health authorities is needed to promote the modernization of the health system. This coordination should begin with a homologation and a synchronization to modernize the country in a transversal manner. Integrative technologies such as RIS (Radiology Information System) and PACS (Picture Archiving and Communication System) already exist to integrate different providers into a single channel and to coordinate data systems,” he says.
A unified health system not only improves the provision of medical assistance, but also provides technological opportunities that impact the entire system. Before working with Big Data, Mexico requires a centralized national database of medical imaging studies, which in turn can impact the creation of patterns for clinical and diagnostic purposes, says Ferrari.
Such information would make it possible to determine which areas require improvements and which technologies are more suitable to provide efficient solutions. In addition, digitalization and the introduction of technology must go hand in hand with the training of doctors and patients to make these changes reality, says Carrasco.
FILLING THE TALENT GAP
Technology also redefines the acquisition and management of human talent. According to Tecnológico of Monterrey, health institutions face three main problems: unmet demand for medical specialists in radiology and imaging, a shortage of specialists and few educational institutions capable of providing the necessary training.
Yet, medical devices companies see in this an opportunity not a challenge. “Technology helps make radiologists
more efficient; it gives them the ability to diagnose more studies at the same time using specific imaging tools,” says Ferrari. “These solutions make it possible to deliver technology to hard-to-reach areas and help solve the shortage of radiologists in the country.”
The next step to ensuring a greater impact of technology in the health sector is to revolutionize the way in which talent is deployed in a digital environment and collaborate to generate high-potential changes, according to Deloitte. The best opportunities will come when the new talent possesses the necessary technical, digital and engineering knowledge to provide solutions exclusively designed for healthcare.
HAND-IN-HAND PARTICIPATION
Medical devices and health technologies are also creating greater democratization of access to health and improving patient care. According to a joint study between WHO, WIPO and the WTO, collaboration among health, intellectual property and trade agencies is essential to improve access to medical and health technologies for the population.
The challenge for the future in matters of public health is, according to WHO, for countries to adopt sustainable financing schemes, reliable health systems and efficient regulations to guarantee access to innovative medicines and medical devices. Also, the government must ensure that the way to obtain and manage patents, trademarks and commercial rights also guarantees access. How these rules are applied can determine the availability of medicines and the prices that patients pay, so it is vital that governments and the industry work together to produce the best conditions to provide access to medicines and medical devices, according to the WTO.
UNIVERSITIES AND INSTITUTIONS THAT OFFER RADIOLOGY AND IMAGE EDUCATION IN MEXICO
University or Institution
Tecnológico de Monterrey (ITESM)
Universidad La Salle
National Institute of Medical Sciences and Nutrition Salvador Zubirán
Hospital General de México
Autonomous University of Guadalajara (UAG)
University of Guadalajara
Tamaulipeca University
Autonomous University of Nuevo Leon (UANL)
Benemérita Autonomous University of Puebla
Autonomous University of Coahuila
Autonomous Mexico State University
Source: Official website from the mentioned universities and institutions.
Type of Trainning
Specialty in Radiology and Image
Specialty in Radiology and Image
Specialization in Magnetic Resonance Diagnosis
Diploma in Advanced Ultrasound Diagnostics
Radiology and Image
Specialization in Radio-oncology
Baccalaureate Technician in Radiology
Superior Technician in Diagnostic Imaging
Specialty in Radiology and Image
Specialty in Radio-diagnostics
Specialization in Radiology
INNOVATION: THE SHORTEST PATH TO EXCELLENCE
ALEJANDRO PAOLINI Director General of Siemens Healthineers for Mexico, Central America and Caribbean
Q: What concrete actions is Siemens Healthineers taking to improve access in Mexico?
A: Our main goal is to develop solutions that allow increased healthcare access with top of the line technology. We are working in line with local and international associations and chambers to improve healthcare access in Mexico. For example, we closely collaborate with COFEPRIS, which is imperative to ensure that the entire regulatory and control processes are carried out as efficiently as possible so the population can have faster access to the latest innovations in healthcare.
More than 70 percent of the world´s population dies from noncommunicable diseases , such as heart diseases , diabetes and cancer
Q: One of the main proposals of Siemens Healthineers is innovation. What have been the main advances in this regard in Mexico?
A: Mexico is one of the key countries for Siemens Healthineers. We are the only healthcare company in the market that has a broad and comprehensive portfolio focused on solutions and services for imaging and laboratory diagnostics. We do not have a production plant in Mexico and the innovation technologies are basically developed in Germany and the US, but that does not prevent us from introducing and implementing new technological developments in this country. When we think about innovation, we think about solutions that provide clinical, operational and financial excellence. For instance, in Mexico we launched a new laboratory technology called Atellica Solution. This is a revolutionary platform that addresses laboratory challenges using immunoassays and clinical chemistry analyzers that transform care delivery.
Q: The reduction of federal budgets is a constant of the Mexican health industry. How has Siemens Healthineers adapted to this trend?
A: Today, healthcare systems worldwide are struggling to succeed financially and provide high-quality care while facing scarce resources and restricted government budgets. As a result, we decided to restructure our portfolio, expanding into new enterprise and digital health offerings, along with new business models that maximize opportunities and minimize risk to healthcare providers. We are reorienting our products to make them even more attractive to the health sector, especially for emerging markets. The objective is to satisfy the needs of our customers in Mexico by offering the highest 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, since our portfolio is focused on prevention, early detection and monitoring.
More than 70 percent of the world´s population dies from noncommunicable diseases, such as heart disease, diabetes and cancer. If diagnosed early, they can be treated and monitored, increasing patients’ survival rates and reducing costs for the healthcare chain. This is the value of technology for healthcare.
Q: “Patients will be treated as consumers.” What impact does this statement has on the activities of Siemens Healthineers?
A: This paradigm shift is happening at a macro level and aims to empower the patient, who are more informed and want to take an active role in the medical decision-making process. They are also deciding how they want to receive and seek healthcare services. Here in Mexico for instance, out-of-pocket expenses are really high compared to other countries, which is why patients assume they participate in a more direct way. At Siemens Healthineers, patient experience is one of the company’s main pillars.
Technology and digitalization are also transforming the way we deliver healthcare. Hybrid rooms are one of these examples. This is a concept widely used in Europe and the US and it is becoming a global trend. Hybrid rooms are operating rooms equipped with latest-generation imaging equipment, such as magnetic resonance imaging, tomography and angiography, which allows less invasive procedures, reducing patient trauma and hospitalization time. The Hospital General de México has been working with our equipment in a hybrid room since 2016.
Q: How are you convincing customers to choose innovation and get the maximum impact for their investment?
A: The benefits of innovation in the healthcare sector are 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, cost 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. We adapt our technological offer to market demand and we deploy the highest quality to ensure our customer´s needs are covered. That is all about valued based care.
Q: What are Siemens Healthineers’ expectations for 2018?
A: Mexico and Brazil are the most important Latin American markets for Siemens Healthineers. We see great potential since innovation is well-received in our market. For five years, we have witnessed continuous sales growth in Mexico and in 2018 we hope to continue this performance. Although there is uncertainty in the country, we believe that these factors will not change the industry. There may be a slower growth rate at the beginning, but not a decrease.
Siemens Healthineers is the healthcare branch of the German electronics giant. It is mostly known for its medical devices, which cover a wide range of therapeutic areas, with a focus on diagnostics, imaging and IT
INTEGRATING SYSTEMS A KEY STRATEGY TO REDUCE COST OF OWNERSHIP
MARTÍN FERRARI Director General of Dräger Mexico
Q: Last year, you mentioned that you wanted to increase your focus on the private sector. What are the results of this approach?
A: In 2017, we grew 35 percent in the private sector compared to 2016. We introduced a system for managing key accounts in the private sphere, reinforced our sales to the private system and introduced a modified version of Microsoft’s Customer Relationship Management (CRM) software that allowed us to improve aftersales. Today, we work with StarMédica, Grupo Dalinde and San Ángel Inn. We will continue betting on this sector and not just with major hospital groups. Our goal is to target a second layer of private hospitals, including the Consortium of Mexican Hospitals, which incorporates 41 midlevel facilities. This group of hospitals wants to unify their systems and acquisitions. Our strategy for 2022 will target midlevel private hospitals, of which there are over 500 in Mexico.
Dräger grew by 35 percent in private sector sales between 2016 and 2017
Q: How is Dräger incorporating Internet of Things (IoT) principles into its solutions?
A: The core of our operations is our focus on the customer and our ability to offer tailored solutions. To improve this core, the company is getting faster. The CRM tool that we launched incorporates several more elements related to client management, interaction and satisfaction. Our sales force is increasingly digital, which means that our salespeople have more tools to help them perform more quickly and professionally. This also permits access to a greater amount of information that allows for better solutions. Additionally, we are working on order fulfillment and supply chain.
Q: Dräger has implemented data digitalization systems at several public institutions. How are these systems improving healthcare practices at public institutions?
A: Dräger’s systems compile information from our anesthesia, monitoring and ventilation equipment. In
2018, we installed our EMR program called Innovian and connected it to INCANET, INCan’s system for the management of demographical data. This system allows for the close monitoring of processing times and productivity in surgery and therapy rooms and relates that information to INCan’s patient data. Innovian will complement the existing medical data and use all compiled information to analyze which areas could be improved in terms of costs, which often are surgery and rehabilitation.
Q: What benefits will these technologies provide to doctors, hospitals and, eventually, healthcare systems?
A: This technology will allow doctors to make faster and more precise decisions, which is of utmost importance to the patient because decisions during surgery must be quick. Our system will also allow doctors to instantly retrieve laboratory data and images during surgery. Furthermore, it will grant instant access to a patient’s 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 couple of years.
Q: In which other hospitals is Dräger introducing this technology?
A: We are installing these systems at Tec de Monterrey’s hospitals: Zambrano Hellion and Christus Muguerza. We are also trying to introduce this technology to public hospitals, but the acquisition processes of ISSSTE and IMSS do not provide for the introduction of software but, rather, the acquisition of individual units at the lowest price.
Q: How will you convince public institutions of the benefits resulting from integrated systems?
A: We are working closely with ISSSTE and IMSS, the latter of which has showed more interest in these technologies. We also participate in their committees to analyze the technologies they are interested in acquiring. Through our participation in these committees, we have convinced them to change a few
old specifications in their basic lists but the programs of public institutions are often dependent on political parties.
Q: Considering the wide variety of hospitals in Mexico, how does Dräger generate solutions that cover such needs?
A: The first step was to define the parameters of our key account management system, which performed with 33 key accounts in the premium segment. The midlevel hospitals were then subdivided in three different categories for which specific solutions were developed. We are analyzing the possibility of introducing certified, refurbished equipment for some of these hospitals.
Q: What are the main advantages of the hospital rooms that Dräger is building alongside B. Braun and Diphsa?
A: This collaboration has allowed us to introduce integrated perioperative solutions that cover a wider scope of clinical processes. This collaboration was successful, for instance, with Hospital Christus Muguerza, where Dräger coordinated the introduction of medical devices and processes, Diphsa sterilization products and B. Braun surgical equipment. We are planning similar projects for other private hospitals.
Q: Why should these hospitals choose Dräger instead of another technology provider?
A: At Dräger, we provide comprehensive solutions for critical care and our goal is to continue being No. 1 in this area. Our pillars are anesthesia and respiration, but we also provide the complementary equipment for monitoring, gas supply and lamps, as well as design critical care units.
Working in the Mexican market has posed several challenges for the company, as buyers are too focused on purchasing equipment and less on integrating solutions. In the private 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 patients but doctors. Thus, the hospital’s internal structure is fragmented and it is only willing to invest in basic, functional equipment. In other countries, hospitals hire
doctors so their clients are the patients themselves. For that reason, hospitals that follow this business model are more interested in increasing their efficiency and therefore invest in technology. Some hospitals in Mexico are implementing this approach, such as Hospital Christus Muguerza and StarMédica. Smaller hospitals want to improve their systems but their internal fragmentation gets in the way.
Q: How feasible is it to change Mexican regulation to promote better practices in hospitals through the incorporation of technology?
A: Mexico has extremely good regulations for hospitals but there is no monitoring whether hospitals comply with health and safety standards. We are working closely with the Mexican Society of Architects Specialized in Healthcare for the design of modern hospitals. While the association has significant experience in this area, there are still several gaps because it has not been that interested in developing its infrastructure for biomedical engineering in clinics. We are also working with the association to lobby the government so regulations concerning hospital infrastructure are enforced.
Q: Which other products will Dräger introduce in the short term for the Mexican market?
A: We will renew our current portfolio, mainly for anesthesia and monitors for critical care. Beyond devices, in Mexico we want to focus on the promotion of new business models for the private sector, which is now facing a disjunction as medical technology is being renewed at a much faster pace. After five to seven years, clients themselves feel it is time to refurbish. Thus, instead of buying new equipment or buying under a five-year loan, we retain the asset and provide it on a monthly basis. We are migrating to this service business model in which we become partners with the company.
Dräger, headquartered in Germany, is a multinational company that manufactures devices for the medical, mining, oil and gas and chemical industries. In the healthcare sector, Dräger manufactures ICU and neonatal monitoring devices and respiratory equipment
Dräger Evita Infinity V500 ventilator
TECH GIANT PLACES HEALTHCARE CLOSEST TO ITS HEART
CÉSAR CARRASCO Country General Manager of Philips Mexico
Q: Philips has undergone a change in priorities to focus on healthcare. How are you implementing these changes?
A: Philips underwent a transformation to prioritize healthcare and for the past three years the company has focused only on this area. In 2017, Philips reclassified its stock market listing from an industrial conglomerate to healthcare. That allowed us to invest globally in the industry, focusing on chronic and infectious diseases. This transformation has led to a significant investment in development and acquisition of new technology exclusively for healthcare. We are looking for a long-term partnership with hospitals that will allow us to develop and implement new operating models.
In 2017, Philips reclassified its stock market listing from an industrial conglomerate to the healthcare industry
Q: What role will Philips play in Mexico’s healthcare environment?
A: The change that Philips underwent allowed us to targets Mexico’s needs since our goal is to improve technology and access to healthcare through interconnected systems, efficient models and intuitive technology. For instance, last year we launched a new hemodynamic room for cardiovascular surgeries. This is an automated, intuitive room that helps doctors perform procedures more quickly; for example, catheterization can be done in 50 percent of the time in this room, allowing patients to undergo a cardiovascular procedure and return home on the same day. We are implementing this model with both public and private hospitals.
Philips Healthcare, part of giant Philips, develops products for cardiovascular care, monitoring, imaging, healthcare informatics, clinical applications and diagnostics. Philips has acquired many companies, including Agilent Healthcare
Q: How can Industry 4.0 improve healthcare practices and benefit both patients and care providers?
A: Industry 4.0 is causing a revolution. Collecting and processing all the information produced by medical equipment can provide numerous benefits for medical professionals like providing distance consultations. Before the application of Industry 4.0 principles in healthcare, a doctor could only accumulate experience by caring for more patients; now, doctors have access to the experience of millions of medical cases. Also, this technology is helping hospitals outsource their management systems, allowing them to devote fewer resources to management and focus on providing care.
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 they need the support of the private sector, which has led to the generation of public-private associations (PPAs). This initiative acknowledges the problems within healthcare and increases access to care.
We approach hospitals to identify their medical profile, which varies from one facility to the next. With that information, we determine which critical areas require improvement and determine which technology better suits their needs. We provide hospitals with numerous tools that allow them to increase their efficiency and reduce expenses in several areas, making money available for further investment. Digitalization allows the development 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.
Our market is 60 percent private sector, 40 percent public hospitals. Working with the public sector poses some complications, since priorities change quickly and with
them the investment. Periods of strong investment in the public sector are often the beginning and end of six-year government administrations.
Q: What role will Philips play in generating a prevention culture?
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 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.
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 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 launched Pet CT, the only digital equipment for cancer detection. This equipment has many advantages, including
a 70 percent reduction in the amount of tissue needed for diagnostics; it is also much faster and detects cancer lesions 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 five years. Hospital Ángeles Pedregal was the first health institution to receive that Pet CT in April 2018.
DISTRIBUTION OF THE REGIONAL SUSTAINABLE DEVELOPMENT FUND 2
PHILIPS’ 1Q18 SALES BY DIVISION (percentage)
US$20.4 billion in sales
Mazapil
39% Diagnosis & Treatment
Cananea
Sahuaripa
Morelos
18% Connected Care & Health Informatics
Nacozari de Garcia
2% Personal Health
Fresnillo
41% Other
Ocampo
Source: Philips
Caborca
Sierra Mojada
Eduardo Neri
Aquila
Alamos
Chinipas
other
Source: CGM, Ministry of Economy 1 With figures to March of 2015
Philips EPIQ 7 maternity ultrasound
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.
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 Medtronic’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 patient’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
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 competitive prices. How do you adapt to Mexico’s unequal economy?
A: For Johnson & Johnson, improving access to care is of the utmost importance, especially considering that as products become more technologically advanced they also become more expensive to produce. Our goal is for all Mexicans to have access to our products, no matter their socioeconomic class. Although the country says that 95 percent of Mexicans have access to healthcare, this is not the case for all conditions and medicines. Furthermore, most medical services are concentrated in Mexico City, Jalisco and Monterrey. Many other regions throughout the country do not have ready access to care.
Q: Considering the budget cuts in the public sector, how do you divide your sales between the public and private spheres?
A: We divide our sales 50-50. We have not been directly impacted by the cuts to the public sector since our services are aimed at surgery and the cuts were mainly allocated to pharmaceutical products. Mexico is an extremely large market for pharmaceuticals since doctors are much more used to treating health problems with medications instead of surgeries. This is due in part to the education that doctors receive in schools and to the fact that the country’s penetration of advanced surgical techniques has been slower than others such as Brazil, Chile, Colombia and Argentina.
Q: Considering what Johnson & Johnson invests in innovation, how does the company educate all players in the health sector on the advantages of your products?
A: A significant part of our investment both in Mexico and the world is directed toward surgeon training. Training a doctor takes decades and sometimes the technology for which they were trained is obsolete when they finish their 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 devices in Mexico, we have little input on the doctor’s final decision on which device to acquire. For that reason, we must ensure that we work alongside doctors to help them
acquire the desired clinical results in terms of patient`s quality of life improvement and satisfaction.
Q: How does Johnson & Johnson adapt its technology to emerging economies such as Mexico?
A: We do not have products designed exclusively for developing economies. Even considering the wide differences that can be seen across continents or within the same country, it is necessary to prioritize the patient’s safety. We do not sell old equipment but offer different solutions. For instance, an appendectomy can be done through laparoscopic surgery or through open surgery. In this case the result is the same, although recovery takes three days in the case of a laparoscopy and 30 days after open surgery. Every health system must make a decision whether to spend on a more expensive treatment or on the cost effectiveness in regards to a patient’s recovery.
Q: What are your strategies to improve access to care?
A: We work with the Ministry of Health and the General Health Council to address the challenges Mexico faces to increase access to care. We are fully aware that no public system has the capabilities to address every single disease that its citizens face, so it is necessary to develop innovative solutions to provide care to a larger number of patients. We act as strategic partners for the public sector.
Q: Which of Johnson & Johnson’s products are in highest demand?
A: Our Energy division is revolutionizing surgeries and improving safety during the cut and coagulation process for different tissues. One of my favorite products is a knee replacement that has had a great reception from patients. We have another product for the management of arrythmias that performs a 3D mapping of the heart with minimal invasion. We are also launching several orthopedics products.
Johnson & Johnson, headquartered in the US, produces medical devices, pharmaceuticals and consumer goods. The company has offices in 60 countries and exports to 175. Its medical devices division specializes in surgical products
PREVENTING A SHOCK TO THE SYSTEM
RUBÉN GAITÁN
Executive Director of
Alandra Medical
Q: What is Alandra Medical doing to help improve standards of care?
A: We work under the umbrella of Gerbera Capital. In 2016, Alandra Medical made a couple of passive investments in two medical devices companies, one in orthopedics and another related to in vitro diagnostics, both based in California. However, the company is mainly focused on the development of Florence, an impedance spectroscopy monitor, and its associated catheter Athena. This equipment will provide physicians with relevant information on the status of the patient and help them make better decisions regarding treatment. The device, meant to be used with critical patients, detects a series of electrical properties in the stomach tissue. Initially, it cost US$90 to be manufactured but we have entered into an alliance with a Swiss company that will allow us to manufacture the device for about US$20.
Florence will detect the first signs of Multiple Organ Dysfunction Syndrome (MODS). MODS leads to heart failure, which is associated with a threefold increase in mortality at critical care units. Florence applies the principles of impedance spectroscopy to measure electrical properties of the tissue, which convey information on the presence of edema and necrosis. In animal trials, we were able to measure the presence of lactic acid up to 90 minutes before it was detected in the blood stream. These results are highly encouraging and the next step will be human studies.
Q: What makes Florence more competitive than other methods for ischemia detection?
A: Current technologies require a blood sample to measure the level of lactic acid, a biomarker produced by the body when cells cannot get enough oxygen to meet their metabolic demand. The problem with this technology
Alandra Medical is the medical branch of Gerbera Capital, a Mexican venture capital firm. It is developing Florence, a medical device for the detection of ischemia and shock that aims to prevent heart failure in critical patients
is that it requires frequent blood samples. Furthermore, it takes significant time to build a measurable concentration of lactic acid in the blood stream.
Q: What were the main challenges to develop Florence and what are your long-term plans for the device?
A: The first challenge was to overcome the mistrust from developed countries on the reliability of equipment built in developing countries. For that reason, it is necessary to present the clinical results and certifications to foreign institutions that prove the equipment works as intended. A couple of years ago, we planned to enter the UK market but this strategy faced a handful of roadblocks since a change in regulations invalidated the data we had hoped to use for the clinical trials. As a result, we are developing new clinical trials for year 2018. We hope to start either selling this technology or to have it transferred by late 2018.
Our strategy is to begin sales in Europe, where it is easier to get approvals in comparison to the US. Our investors would also prefer that we commercialize the product in Europe followed by the US before we start in Mexico. Our first point of contact has been the UK. Exporting this product to the UK will help us to attract venture capital to continue manufacturing the product and to expand our markets. In the medical devices industry, it is more common to begin sales in Europe or the US before launching in Latin America.
Alandra Medical’s goal is to find another company to sell this technology as we do not plan to distribute it ourselves. The first step is to produce a success story with Florence that will motivate investors and even our competitors. When investors see the potential, they 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 between innovators and the world in terms of transferring technology. Another goal is to get Mexican investors, who tend to worry about long ROI periods, to bet on these kinds of projects.
SHINING A LIGHT ON CERVICAL CANCER
HÉCTOR TORRES
CEO of Onko Solutions México
Q: How is Onko Solutions México changing the paradigms of healthcare in Mexico?
A: In Mexico, over 5,000 women die every year of cervical 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 cancer is in an advanced stage. However, this type of cancer is easy to treat and has a high remission rate when detected early. Sadly, current tests have failed to properly detect cancer until the later stages. It is important to create awareness that current tests like pap smear are obsolete.
Onko Solutions México’s InstaPAP test is a new platform that incorporates state-of-the-art technology backed by cloud access to deliver a faster and better test for cervical cancer. This test provides an immediate result, empowering doctors to offer follow-up care on the spot. The test is also less invasive than a pap test because the latter entails scratching the surface of the cervix.
Q: What is behind InstaPAP’s state-of-the-art technology?
A: Once cells become cancerous, their shape and nucleus change, reflecting light in a different way. Our equipment measures how light is reflected in the tissue, which allows us to determine if cancer exists and its level of severity. Additionally, our device performs a series of electrical impulses to measure tissue density, providing a sensitivity of 92 percent.
In addition to high efficacy, InstaPAP has the advantage of providing immediate results, allowing doctors to inform patients. Initially, we hoped InstaPAP would be a product that women could acquire at pharmacies and use by themselves at home to then take the results to their doctors. However, although this initial plan was feasible, we discovered that it would not be possible to implement this vision without gynecological approval. We switched our strategy and began creating close relationships with doctors who would then trust the technology and recommend the product.
Q: How did Onko Solutions México develop the technology behind InstaPAP?
A: Onko Solutions México began operating in mid-2016 by importing Truscreen from Australia, a small wand that
measures optical and electric signals in cervical tissue. We are the first and only distributor of Truscreen in the Americas.
While testing InstaPAP with physicians, we observed higher detection rates than with standard pap tests. Recently, we also performed a series of clinical tests in Guadalajara and Michoacan and we observed that out of 10 women with cervical cancer, pap tests only detected three cancer cases while InstaPAP detected nine.
Q: How is Onko Solutions México expanding its presence in the Mexican market?
A: The public healthcare sector performs approximately 50 percent of all pap tests, so we are interested in entering this sector. However, at this moment we are well-positioned in the high-income segment, with presence in 16 states. Our primary market is gynecologists, but we are exploring alternatives. Onko Solutions México is also exploring the possibility of incorporating into health centers located in multiple platforms such as pharmacies, subways, mobile units. These last platforms are ideal for us as the equipment can be used by general practitioners or nurses. We have performed more than 4,000 free tests across Mexico.
Q: What are Onko Solution’s main objectives for 2018?
A: Our short-term goal is to speed up the use of these devices in Mexico and Latin America, so we are looking at Colombia, Chile and Peru. Another target is to gain FDA certification. During early 2018, we will provide 20 free InstaPAP devices to gynecologists to acquire their feedback on the equipment, which we will use to upgrade the platform, software and hardware. We plan to introduce the device to the Mexican market by March 2018. The current disposable unit costs approximately MX$400 and the new one will have a substantial cost reduction.
Onko Solutions México is a Mexican startup that commercializes Truscreen, a medical device for the detection of cervical cancer, and developed Instapap, a less expensive version of Truscreen
BRINGING TECHNOLOGY CLOSER TO THE PUBLIC SECTOR
GUILLERMO FERRARI General Manager of Eseotres
Q: What are the administrative and logistics advantages of using IT in imaging and radiology services?
A: An important benefit is the time optimization of radiologists and other health workers. This translates into service quality improvement by reducing the appointment deferral time and making diagnoses available sooner, which also means an increase in productivity. The main benefit here is being able to diagnose and treat the patient at early stages to improve the chances of recovery and eliminate the costs of clinical complications. At an institutional level, IT reduces unnecessary transfers to treat the patient at different levels of care and centralizes the capacity of health workers, particularly that of radiologists which is a scarce resource.
Q: There is a shortage of medical radiologists in the country. How does this situation impact Eseotres?
A: More than a challenge, it represents an opportunity for Eseotres because our technology helps make radiologists more efficient; it gives them the ability to diagnose more studies at the same time using specific imaging tools, and also provides speech recognition so they can dictate their reports much faster. Our platform allows a radiologist to diagnose a study no matter where it was taken. These solutions make it possible to deliver technology to hardto-reach sites and help solve the shortage of radiologists in the country. The medical devices we offer can be used to bring high-level clinical services to rural areas. This change may mean a greater democratization of access to health in Mexico.
Q: How does Eseotres provide a value-added service to health institutions?
A: Even before a health institution acquires our solutions, it receives our personalized service. We analyze the imaging service workflow and its current and projected demand
Eseotres is a leading Mexican engineering company that provides diagnostic solutions with IT implementations. Its experience extends to analog radiology, digital imaging and dental equipment
to design an optimal solution in terms of software and hardware. Once a solution is operating, we carry out periodic reviews about the solution’s technology to detect scalability needs; we also conduct follow-up personnel training to maintain the technological efficiency of the services at health institutions.
Q: The future of imaging and radiology is in the combination of Big Data and technology. How do Eseotres’ services and products meet this need?
A: First of all, to work with Big Data you need big data. This implies having a national centralized database of homogeneous structure on medical imaging studies. This database must be at least centralized within an institution and, ideally, it should be cross-institutional in order to have a larger and richer database. In Mexico, the lack of coordination and the fragmentation of the health system hinder its potential. Better coordination among health authorities is needed to promote the modernization of the health system. This coordination should begin with a homologation and eventually a synchronization to modernize the country in a transversal manner. Integrative technologies such as RIS (Radiology Information System) and PACS (Picture Archiving and Communication System) already exist to integrate different providers into a single channel and to coordinate data systems and Eseotres can provide this solutions. We have seen cases of hospital networks that have high technology but do not have the resulting information centralized. This means that each hospital is a data silo, hindering any Big Data analysis possibilities.
Q: In which area do you expect to see the greatest growth opportunities?
A: We see growth opportunities in both the public and 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 those challenges by working together with the institutions. In the private sector, we see an opportunity in small clinics, which have seen digitalization as a technology that was out of their league because of the costs involved.
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 care networks in Mexico?
A: Carestream offers a broad portfolio of imaging products and diagnostic solutions according to the size, budget and required technology, to the public and private sectors; from analog and digital X-ray printing, to mammographic film, X-ray equipment, IT software and solutions that allow our customers to be more efficient and productive. As technology evolves, imaging systems will become more digital. Our main priority is to guide our clients toward the right technology for them and their patients. In Mexico, the public sector accounts for 70 percent of health spending, an investment that represents around 6.5 percent of the country’s GDP. We must work with the public sector to have the opportunity to contribute to the health of the country. We participate with different levels of technology in imaging at IMSS, ISSSTE, SEMAR, SEDENA, PEMEX and at local ministries. However, the private sector is also important as it represents 30 percent of the market. We are actively working with the key participants of the private health sector in Mexico.
Q: In which areas are Carestream’s biggest opportunities in Mexico?
A: There are many opportunities to make hospital networks more efficient, both in the public and private sectors. In the public sector, it is a priority to increase and improve access to medical care for Mexicans in all regions, rural and urban, more efficiently through the use of technology. The private sector has challenges in modernization and in efficiently using technology to offer specialized services and more productive schemes. There are public institutions and private chains of diagnostic imaging centers and hospitals, with many branches that must be managed uniformly and efficiently to offer a consistent quality of service to their customers and patients.
Q: How do Carestream products such as the Customer Success Network help improve user results?
A: The Customer Success Network is a platform on which clients and users can share their experiences and learn about their product application to enrich the use of our
technology. We also have a medical board that meets a couple times a year with decision-makers and medical specialists from around the world.
Q: How do the new image technologies developed at Carestream contribute to the accuracy of diagnosis and, therefore, to the efficiency of hospitals?
A: Breast cancer, the leading cause of death among women in Mexico accounting for 25 percent of female cancer cases, can be a curable disease if detected on time. Our mammograms provide a good image with the lowest possible radiation, in addition to giving the doctor the best visibility to make their diagnosis. Another example is our Image Analytics Tool, which uses artificial intelligence. The software includes up to 100,000 cases of a specific disease and when evaluating a patient’s test, it recognizes similar patterns through an algorithm that helps the doctor perform diagnostics. Thanks to this system, the doctor is aware of potential diseases the patient may have.
Our system works with any image, not just with those taken with a radiology device. Any type of image required for a medical diagnosis can be stored and administered in our information systems. All these capabilities help the radiologist make a more complete diagnosis. Our system allows patients, institutions and professionals to store their information in a more efficient way.
Q: How does Carestream’s specialty portfolio align with Mexico’s main health needs?
A: We are helping to improve access to healthcare in remote areas of the country. For example, if in areas like the mountains of Oaxaca there is an emergency and there is no radiologist available in that territory, a nurse can use our equipment to take images of the patient, upload it to the cloud and a health center in Mexico City can diagnose remotely.
Carestream is a medical and dental imaging solutions company with over 100 years of experience in radiology, IT, molecular imaging systems for life science research and drug discovery. It is a subsidiary of Canada’s Onex Corporation
IMPROVING ACCESS THROUGH RENT
LOURENS VERWEIJ
Director Corporate Development at Resonandina
Q: What needs does Resonandina fill in Mexico’s health sector?
A: While working with the sector, we identified several challenges that Mexico’s health organizations face regarding high-end medical devices. These include difficulty of access due to factors such as high cost, limited patient flow, or construction restrictions, a need for temporary access for specific interim projects and, thirdly, a need for geographical flexibility for multi-location usage. In these cases, Resonandina offers innovative, accessible and flexible mobile imaging diagnostic units to hospitals, Diagnostic Centers and Medical Specialists in urban and rural areas. The concept of mobile units for medical usage is not new to the industry. Resonandina innovated this model to meet the needs from the healthcare providers in Mexico and focuses on offering integrated quality services: rental solutions of mobile, relocatable and modular units, providing easy access to high-end medical devices for a certain period and with no up-front investments.
Q: What is the secret behind providing health services in remote locations and having a healthy financial operation?
A: Two main obstacles when operating in the field of high-end medical devices are accessibility and usage. For especially remote locations the training aspect and ongoing support is of much value. We also see that regional collaborations among venters, healthcare practitioners and suppliers are key to ensure a better patient flow and a healthier financial result. Also, innovative technologies and disruptive operational models help to create better and more feasible health service, where remote locations are rapidly catching up via innovative services from companies as Resonandina and alike.
Q: Who are your main clients? How do you make the difference for them?
Resonandina rents high-end mobile diagnostic imaging solutions in Latin America. It offers innovative, accessible and flexible solutions to hospitals, diagnostic centers and medical specialists in urban and rural areas
A: Resonandina works across Latin America, where we collaborate with key industry stakeholders, ranging from hospitals, diagnostic centers and medical specialists in the private and public sectors, to medical equipment manufacturers and the local governmental organizations and foundations. While all these organizations are focused on improving the industry standards, each has specific and different needs and Resonandina closely works with each of them to develop a solution that best fits their vision.
As an international startup founded in the Netherlands with an industry background from Mexico, Latin America and Europe, we have created an innovative, accessible and flexible model with a great team of experts that closely works with our clients to develop tailored plug-and-play solutions. Furthermore, we strongly focus on quality assurance in all aspects of our company; this is reflected in our overall service and the high-quality mobile-units and medical devices we work with.
Q: What is Resonandina’s expected area of coverage in Mexico?
A: At Resonandina we like to focus on need driven solutions, where there is a large need in the periphery of Mexico City, Monterrey and Guadalajara. In addition, we receive an increasing number of requests from the fast-growing states of Queretaro and Puebla, as they are still developing their healthcare infrastructure to keep up with the increasing population size. Naturally, further regions as Oaxaca, Yucatan and Veracruz are on our road map.
Q: How important are partnerships for Resonandina and what benefits do both sides derive from that?
A: From my personal background living in Mexico and 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 the market but also to ensure future success. Therefore, our local partners are of high importance and we collaborate with those who know the industry best, and can work with us to deliver value to the health sector.
COMPLEMENT THE INTERNATIONAL OFFER WITH NATIONAL SOLUTIONS
Gabriel Piña CEO of Corporativo Promedica de México
Q: Why is Corporativo Promedica de Mexico (CPM) the ideal provider for healthcare institutions looking to acquire medical devices?
GP: We are a 100 percent Mexican company that has been in the market for more than 20 years. CPM manufactures and distributes Mexican brands such as Dimedic and Promedimex, as well as an extensive catalog of recognized European technology brands. We also offer technical support and maintenance services. Beyond technology and quality, CPM offers the flexibility to adapt to the needs of our customers and the Mexican market. We can create customized solutions that foreign companies often cannot satisfy.
Q: How does CPM help increase access to medical technology in remote or rural communities?
CE: CPM assisted IMSS with the preparation of a medical kit 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 included international brands but also national technology at a fair price and high quality.
Q: What actions is CPM taking to fulfill its vision of consolidating as a leader in the health sector?
GP: CPM’s knowledge about the Mexican market can make a difference for new companies that are entering the country. Some Chinese businesses are selling cheaper beds to hospitals but clients have had problems due to the simple fact that the size has not been adapted to Mexican ergonomics. CPM’s has the competitive advantage of its experience in the market, but it also to have very competitive products against the Chinese ones.
We seek to complement our Mexican brands with international products. CPM is the exclusive distributor in Mexico of Italian brand Malvestio and we commercialize hospital beds for intensive and intermediate care. CPM also offers hybrid,
hydraulic and electric beds whose differentiating factor is price. We also create customized solutions that other international brands do not offer.
Q: What added value do your products offer to improve the competitiveness of your customers?
CE: Three years ago, CPM collaborated with CONACYT on a stimulus program for innovation and developed a hybrid-bed solution. If we consider that the average nurse in Mexico is short, the traditional bed represents a physical limitation when raising or lowering a bed. CPM devised a hybrid bed that uses a pneumatic piston to raise and lower the bed. The hybrid bed is now marketed in both the public and private sectors and has been a success for CPM. Innovation was only possible with the collaboration, knowledge and creativity of CPM, the engineers of UNAM and the support of CONACYT.
According to INEGI, the annual growth of new beds in Mexico is 1.2 percent at a national level
Q: In your promotional video for 2017, CPM touts its goal to internalize its brands. What markets do these projects point to?
GP: We have already started our internationalization project in the US. The US market has a wide variety of hospital beds but what we are going to offer are highly differentiated, tailormade products. For example, we will provide a customized hyperbaric bed to an American company. In this case, CPM will design a bed that is pressure-resistant and which no other provider has been able to offer. Our second project is the development of a customized bed for home care.
Corporativo Promedica de México (CPM) is a medical equipment company that manufactures two own brands: Dimedic and Promedimex and works with international brands such as Medela, Mindray, Malvestio, Riester, ADAM and UMFmedical
Carlos Esquivel COO of Corporativo Promedica de México
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 Manríquez, 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 CONACYT’s network of Pharma Chemicals, of which the group is an active member.
SURGERY, ENDOSCOPY ARE MAIN TARGETS
PATRICIA NAKAGAWA
Managing
Director
at Olympus America in Mexico
Q: How would you describe Olympus’ participation in the endoscopic market in Mexico?
A: Olympus is internationally recognized for its flexible endoscopic products, holding 70 percent of the global market. The company used to be the strongest brand in Mexico for these products but it faced a market contraction between 2012 and 2014. We face strong competition in Mexico, but we are working to recover our market share and position our surgical line.
Q: What are the main challenges Olympus has identified in the Mexican market?
A: We cannot be sure of our position in the market since there is no reliable information. One of the challenges we face in Mexico is the lack of reliable data on almost all aspects of healthcare. Another is the secondary market, often illegal, which is neither regulated nor monitored. During 2018, we have seen growth, albeit at a slower pace due to the uncertainty caused by the renegotiation of NAFTA, which boosted dollar prices and slowed investment. Administrative changes in Mexico are also always a cause of uncertainty.
Q: How does Olympus convince clients in the public sector to acquire advanced technology?
A: We do this through our product specialists as well as our direct sales force. Product specialists and sales executives work directly with end users with the main objective of understanding their needs and providing solutions. We do not sell boxes we sell solutions. Besides, we demonstrate the clinical benefits of our technology and all our technological innovations with their own patients so they can evaluate first hand the real advantages of having cutting edge technology.
Q: How willing are private hospitals to invest in state-ofthe-art technology?
Olympus is a Japanese company founded in 1919 in Tokyo. It manufactures endoscopic, ultrasound and endotherapy equipment, among other products, such as cameras and industrial equipment
A: It depends on the hospital. Although some invest in cutting-edge technology to gain recognition, other hospitals have a different business model that focuses more on business performance according to their patient population. Private hospitals are clearly segmented. For that reason, medical devices companies offer a diverse portfolio of products, since it is not possible to have “one size fits all” solution.
Q: Which products is Olympus launching for its surgical line in the short-term?
A: Our star product is the Visera 4K UHD System that provides unparalleled resolution. Other devices capture normal images and then convert them to 4K. Olympus creates and transmits the image as 4K from the beginning, providing a significant improvement in resolution. This equipment greatly reduces surgery times as the faster that doctors identify an issue, the faster they can address it. Reducing the time it takes to perform a surgery also improves the patient’s recovery time. Another benefit is that hospitals can perform more surgeries. There are five Visera 4Ks in Mexico and we expect their sales to continue rising.
We are also promoting our 3D Imaging Systems, which is oriented to urologist and bariatric surgery. This equipment requires highly specialized doctors to use them and we expect this area to grow slowly as it takes more time to position these devices.
Q: What are Olympus’ main priorities for 2018?
A: Olympus focus for 2018 is the ‘True to Life’ initiative. Our way of doing business is a conscious sale, creating real value to our customers, providing real solutions. Our priority is to help create awareness of major diseases through promoting how our technology can help diagnose and treat 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 on our existing capabilities and infrastructure. Finally, we will work to improve our relationship with clients who felt abandoned when Olympus lost market share during the 2012-2014 contraction.
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 been innovation. How does that translate to an added value for its customers?
A: B. Braun Medical has been operating in Mexico for around six years and is continuously bringing innovation to the market. The added value of our business is based on the combination of more than 5,000 products and services that optimize our customers’ processes. Our combination of hardware and software guarantees the ability to monitor patients and their treatment. Our services contribute to helping hospitals improve their healthcare outcomes.
B. Braun Medical is highly focused on the patient-centric approach, with strong emphasis in oncology, intensive care and outpatient therapies. It cooperates with doctors, nurses, hospitals and other players in the health industry.
Q: COFEPRIS has indicated that one of the government’s objectives is to enter alliances with other regulatory agencies. What would B. Braun Medical like to see this regard?
A: There have been significant changes aimed at accelerating COFEPRIS’ processes and to deregulate certain products so that innovation reaches Mexico faster. At a local level, there is a need for companies and regulatory authorities to increase the competitiveness of products. In Mexico, there is a considerable amount of global and transnational companies that invest in the production and export of a wide variety of disposables, medical supplies and devices for the international market. National companies must improve their level of competitiveness and one way to achieve this is by raising COFEPRIS’ regulatory requirements to meet international criteria. This will allow Mexican companies to be more competitive and to expand.
Q: How does B. Braun Medical ensure the effectiveness of 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 our customers. Therein lies the great added value of B. Braun Medical, in that we become advisers and clinicalcommercial partners to our clients, offering an integral
consultancy of process optimization, through our offer that integrates medicines, medical equipment and software, who take special care regarding the safety of the patient and the health professionals who work within the hospital.
Q: How does the company ensure its most innovative products are quickly adapted by hospitals and doctors?
A: By developing unique solutions for each type of client, mostly hospitals and ambulatory care clinics. We have to understand the status quo of the client, the strategic priorities that a hospital has and based on this prepare an offer of our different solutions that add value to their operations. The challenge we have as B. Braun Medical is to accompany hospitals so they can adopt this innovation and turn it into improvements in their processes, with the advantage that all the innovation we offer makes an excellent match with the evolution and transformation of healthcare in the private and public sectors, which increasingly require more accurate measurement of patient outcomes.
Q: What percentage of your offer in Mexico goes to the public and private sectors?
A: Our distribution is directed 60 percent to the public sector and 40 percent to the private sector. About 95 percent of the products we sell in Mexico are imported from different parts of the world. We want to improve access to international and premium products and services, since patients are the same all over the world and require quality care.
For this, B. Braun develops new models of integral services for both sectors, which involve not only procedures in surgeries but also procedures in other areas of the hospital, moving from the sale of products to the sale of value-added services, considering that the government sector is ready to integrate these innovative service models.
B. Braun Medical is a 178-year-old German medical devices giant. It operates in four main areas: hospital care, out-patient, aesculap and avitum, which are concentrated in two divisions in Mexico. Medical encompasses the first two, Aesculap the latter two
A technician monitors a screen at a Novo Nordisk plant
MANUFACTURING & 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 medication’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.
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 America and an ideal location that makes it a good entry point for the rest of the Americas, it is no surprise that Mexico has an attractive pharmaceutical manufacturing industry. According to ProMéxico, US$4.76 billion in FDI was directed at the pharmaceutical industry between 2010 and 2016. Mexico also hosts 20 of the 25 largest pharmaceutical companies in the world.
However, the Mexican manufacturing sector has faced some obstacles in the last few years that have resulted in a decrease in production. In 2017, according to Global Insight, Mexico’s manufacturing production stood at US$9.28 billion, which is a contraction of 3.73 percent compared to the previous year. In fact, manufacturing production has been steadily decreasing since it peaked in 2013 at US$12.33 billion, according to INEGI. “During the past 10 years, we have seen a contraction in manufacturing by international companies. As the international industry declined, the manufacture of generics grew at a highly accelerated pace,” says Sergio Naveda, Director of Grupo ACF. Pharmaceutical production is expected to make a gradual turnaround and reach US$11.26 billion by 2022, according to Global Insight.
Another problem that manufacturers had to manage in recent years is compliance with all regulatory requirements.
“Regulators have sometimes acted as barriers to local manufacturers, causing a lack of full coverage for about 40 percent of the medicines Mexicans need. For that reason, 2017 was a complex year for the Mexican
pharmaceutical sector,” says Víctor Soto, Director General of Distribuidora Levic.
INEGI states that there were 793 pharmaceutical manufacturing facilities in the country in 2016 that were responsible for US$1.38 billion in exports that year. At this point, the pharmaceutical manufacturing industry represents only 0.5 percent of GDP and 2.9 percent of the manufacturing GDP, according to ProMéxico. However, the country has significant advantages that could make it a pharmaceutical powerhouse, including its regulatory agency, a strong workforce and lower manufacturing costs than neighboring countries. According to KPMG, a medicine that is manufactured in the US at a cost of US$100 can be produced in Mexico for only US$82.9. The National Association of Medication Manufacturers (ANAFAM) states that the industry generates 78,000 direct jobs and another 273,000 indirectly.
The work done by COFEPRIS, Mexico’s regulatory unit for pharmaceuticals, has also been considered essential for the development of the industry in Mexico and internationally.
“ COFEPRIS has done significant work to facilitate pharmaceutical exports from Mexican companies by acquiring WHO certificates. This places Mexican products at higher standards of quality,” says Efrén Ocampo, President of Grupo Neolpharma.
The US is Mexico’s largest trade partner and the rocky situation between both countries has led to some uncertainty
in the sector, especially for exports. “All industry members are closely following the modernization of NAFTA with full understanding of its complexity,” says Cristóbal Thompson, Executive Director of AMIIF. However, Mexico has many more trading choices beyond North America. “The industry is looking beyond NAFTA to other agreements such as the CPTPP,” says Thompson. Mexico’s FTAs with 46 other countries might make the country an interesting bet, even if NAFTA negotiations were to turn sour. “Compared to the automotive industry, we depend less on American raw materials. We generally bring products from India, China and some European countries to diversify our supply source. Mexico generates high export flows toward South and Central America,” says Miguel Ángel Marín, CEO of Industrias Sintoquim.
Moreover, it predicts a 53 percent growth in the number of medicines that will require transportation under coldchain conditions between 2016 and 2022. In comparison, overall biopharma sales will grow only 29 percent during that same period.
Source: INEGI
LOGISTICS: COLD IS HOT
Once manufactured, the delivery of medications also poses a challenge due to the delicate nature of the products, which often need to be stored and transported under extremely controlled conditions. “The pharmaceutical sector is among the industry’s most regulated. For this reason, logistics operators have invested significantly to ensure the integrity and safety of these products by generating the right conditions for storage and transportation,” says Aldo López, President of the Mexican Association of Logistic Operators (AOLM).
The aim of cold-chain management is to ensure the correct handling of temperature sensitive pharmaceuticals at all points in the distribution chain to ensure that the products do not lose effectiveness. The 9 th edition of the Biopharma Cold Chain Sourcebook predicts that the number of products that will require cold-chain management will continue increasing globally at a double-digit rate, caused in part by the rise of biological medicines. The book projects that 26.8 percent of 2018’s total pharmaceutical logistics costs were spent in the transportation of medicines under cold-chain conditions.
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 during the entire transportation chain. For instance, Napoleón Gómez, Country Manager of World Courier, points to the company’s product Cocoon to maintain packages at specific temperatures as a competitive advantage.
Mexico, similarly to other Latin American emerging economies, also faces specific challenges. In its latest report Pain in the Chain Healthcare Survey, UPS identified cost management and contingency planning as two areas that require greater attention to improve logistics. The report addresses four central issues in the supply chain for the global health sector, which are product safety, regulatory compliance, product damage and deterioration and management of storage and transportation costs. Latin American countries obtained the lowest scores in product safety and the main problems identified were the lack of physical protection against theft, the presence of parallel trade and poor supply-chain visibility. López explains that third-party logistics (3PL) also face other problems in the country, such as poor road infrastructure and safety.
The Mexican pharmaceutical industry has considerable strengths that, if taken advantage of, could turn the country into a manufacturing center. However, the country has to face some internal and external challenges to achieve this in both the manufacturing and logistics of pharmaceutical products.
Cold Chain Non-cold-chain
ASSOCIATION TARGETS HIGH 3PL STANDARDS
ALDO LÓPEZ President of The Mexican Association of Logistic Operators (AOLM)
Due to its nature, the pharmaceutical industry faces intense scrutiny, whether during the manufacturing phase or the sale of the produced drugs. While transporting medications, carriers must guarantee compliance with best practices to enter and remain in the market, says Aldo López, President of the Mexican Association of Logistic Operators (AOLM).
“The pharmaceutical sector is among the industry’s most regulated. For this reason, logistics operators have invested significantly to ensure the integrity and safety of these products by generating the right conditions for storage and transportation. Operators have done this by creating dedicated warehouses and providing specific training to all their employees.”
AOLM, which turned 3 years old in 2017, has 13 members including both national and international companies. It is extremely selective with new members, says López, as it focuses exclusively on logistics operators. The association “represents between 60,000 and 80,000 workers and moves approximately 60 percent of all products in every supermarket.”
Among its many objectives, AOLM promotes adherence to best practices for the transport of medications, a strictly regulated area. “Logistics regulations have greatly improved to safeguard the integrity of medications and their maintenance under cold-chain conditions. Safety standards are extremely high and products are kept in controlled temperature conditions by any means necessary during transport,” says López. “The practice of transporting medications in Mexico has changed greatly during the last 25 years. Before, drugs were treated like any other type of cargo,” he says. “They could be transported alongside livestock.”
Today, specific conditions for the transport of medications have been imposed on the sector. Yet, while the segment has become stricter, third-party logistics (3PL) operators still face many challenges that AOLM is working to address. It works alongside the Mexican government to improve regulations, road infrastructure and safety. The latter is a major concern for all 3PL companies but mainly for those
in the healthcare sector due to the potential danger these products represent. AOLM is “working closely with a branch of the local police, C5, which has allowed us to prevent up to 50 percent of cases of theft and recover about 25 percent of stolen merchandize.”
AOLM also represents its members’ interests in Mexico to international players as it belongs to the Latin American Logistics Association (ALALOG). “Latin American countries share many cultural characteristics, which greatly simplifies logistics operations across countries. The association compiles and shares information on costs for operators and aims to homologate 3PL services, which has not yet been regulated in many countries in the region. Uruguay and Argentina are far ahead in terms of regulations and we expect Mexico to follow these practices.”
To further improve best practices in the 3PL sector, the organization has created three initiatives. The first is a partnership with the Ministry of Labor to generate official regulations for the maximum load workers are allowed to carry. “We have conducted several studies alongside the Metropolitan Autonomous University (UAM), UNAM and other specialized institutes to determine the maximum loads individuals may carry without hurting themselves. This will set the bar for new regulations in this area.” The second is inclusion, as AOLM’s members are creating programs to include workers with disabilities and to ensure facilities accommodate their needs. Finally, the third initiative is to generate academic curricula in conjunction with universities to train 3PL professionals in Mexico, a study program that did not exist before. “We generated the first program with Puebla Metropolitan University and our goal is to spread this program to all metropolitan universities in Mexico.”
The association’s main goal, however, is always to represent 3PL operators in Mexico. Says López: “Even though the sector has many players, it did not have a unified voice. The association can now represent this sector to governmental players, including COFEPRIS, the Ministry of Health and all governmental offices.”
UNPARALLELED INTEGRATION PROVIDES WATER PURIFIER WITH KEY ADVANTAGE
SERGIO NAVEDA
Director of Grupo
ACF
Q: How does Grupo ACF distinguish itself in the pharmaceutical sector?
A: Our most popular product in the pharmaceutical segment is water purifiers, since all water used in the industry has to be thoroughly purified. We provide key-in-hand projects that include design, engineering, installation, automation and certification for all systems. Our systems are designed to treat any water source for the manufacture of solids, liquids and injectables. We are leaders in the manufacture of water purifiers and we have built over 100 projects for the pharmaceutical industry. We have worked with national companies, including Pisa, Sanfer, Liomont and Grupo Neolpharma, but we also have worked with international companies, including Becton Dickinson, Pfizer, Sanofi, Merck, AbbVie and Teva. Between 70 and 80 percent of our market is targeted to the pharmaceutical industry and the rest is divided between food, beverage and oil and gas.
Q: How have changes in the pharmaceutical segment influenced Grupo ACF’s growth?
A: During the last 10 years, we have seen a contraction in manufacturing by international companies due to the elimination of a former law that required all sellers in Mexico to have a local manufacturing plant. This led big pharma companies to eliminate many manufacturing plants. As the international industry declined, the manufacture of generics grew at a highly accelerated pace. Today, 70 percent of our products are headed to Mexican companies and the rest to international businesses.
As patents expire, local companies can start manufacturing these products, which balances the market. This trend will continue in the coming years as the market becomes globalized, while the increase in M&A in the sector reduces the number of players. Throughout these years, Grupo ACF has grown as Mexican companies replaced the facilities that once were operated by international manufacturers.
Q: How is Grupo ACF incorporating the latest technology into its water purification systems?
A: We have patented Aquaflow, a water production tool for oral solids and liquids. We are constantly innovating in our
products to incorporate the latest technologies in our water purifiers, such as electrodialysis reversal membranes (EDR), electrodeionization (EDI) and ultrafiltration technology (UF). We are also investing in technology that facilitates sustainability practices. For instance, the equipment used for water purification in the pharmaceutical industry normally uses reverse osmosis technology, which initially rejects 40 percent of the water. Standard equipment processes 1,000L per hour, which means significant waste. For that reason, we are developing technology to recover and reuse that water, which would reduce water waste by up to 10 percent.
Q: What are Grupo ACF’s competitive advantages?
A: Our level of integration has almost no competition worldwide, as many companies buy or outsource many of the processes we do in-house. One of our divisions specializes in water purification and our project division manages the complete integration of all processes, including automation. We also have a division for equipment manufacturing. Another one of our strengths is our people and we have also kept up-to-date on certifications, including ASME, ISO and GMP practices.
Q: Hos is Grupo ACF’s using its strong position in Mexico to expand to other countries?
A: Grupo ACF covers Mexico and other countries such as Guatemala, El Salvador, Cuba and Colombia. We plan to continue expanding through the Andes region, Peru, Costa Rica and Dominican Republic. Operating in countries further south becomes more complex, as Argentina has good development in these markets. Entering the US market is extremely complex, especially taking into account that it is a very protectionist country and the recent trade negotiations. Unfortunately the prestige of national products for this industry lacks acceptance in international markets.
Grupo ACF is a Mexican company founded in 1990 that designs key-in-hand equipment for production, storage and distribution. The company specializes in the manufacture of water purification systems for the pharmaceutical industry
EMPOWERING THE SUPPLY CHAIN
PABLO ESCANDÓN President and CEO of Nadro
Q: What are Nadro’s priorities and what industry trends is it following?
A: We are trying to highlight the importance of distribution in the supply chain. In Mexico, the pharmaceutical sector works with nearly 8,500 Stock Keeping Units (SKU) and about 22,000 locations. Only a specialized distributor like us considers the three complex challenges facing the sector today. The first is the collection of demands. We have an electronic system through which pharmacy chains communicate their needs and we also have 1,200 brand representatives who visit pharmacies and identify their demands. Second is storage and inventory management. One of our main challenges is to have regional inventories that can meet national demand. We have 14 distribution and storage centers and a central warehouse that manages the inventory for the rest. The third challenge is accountability. We help 22,000 pharmacies that lack financial capacity by providing credit at no cost.
Q: One of the major challenges pharmacies face is dispensing. How is Nadro addressing this?
A: There is a relationship between the volume of operations at a pharmacy and the number of SKUs it must have to provide adequate service. We manage 8,500 SKUs and can assist all types of pharmacies. We serve the entire pharmacy segment in Mexico.
Q: What are the benefits of systems like Círculo de la Salud (Health Circle) for dispensing products?
A: This program is a virtual system that offers solutions for the responsible and ethical dispensation of products. We also have Círculo de la Salud Gold , a niche of 1,600 pharmacies that operate at a more sophisticated level. We believe that this program has been a complete success because it respects the brands of manufacturers and helps workers understand that they are providing a public service.
Nadro is a Mexican logistics company focused on the distribution of drugs, health materials, personal hygiene and beauty products to pharmacies. The company is the link between producers, pharmacies and institutional clients
Q: How does Nadro contribute to the improvement of customer services at pharmacies?
A: We offer a program called Invenadro that trains pharmacy workers to manage inventory. There are 1,400 pharmacies using it and we expect to reach 5,000 pharmacies soon. We also offer a simple purchasing mechanism that helps pharmacies make an efficient purchase.
Q: How do you keep track of buying trends?
A: Big Data analysis allows us to identify the market’s direction. Our inventory management system enables us to respond quickly to the changing needs in each region. Every warehouse in Tijuana, Culiacan and Veracruz are locally responding to the weather, the season and the epidemiology, among other factors. One of the biggest advantages of our system is its ability to follow the market.
Q: How does the company contribute to healthcare in Mexico?
A: We are making a significant investment in electronic systems and we are in the process of digitalization to offer services with more precision and security in the shortest possible time. We are specialized in drugs, but in general we are specialized in distributing any product that a pharmacy needs. We are experiencing a growth in demand for OTCs, hygiene and beauty products, so we are expanding our presence in rural areas.
The population is also aging quickly, which represents a change in the needs of those older than 60 years. This pushes us to open new business lines, like the distribution of medical devices. There is a great need for this service, but we need an organizational structure for the provision of devices.
Q: Are there enough companies able to meet the distribution and dispensation needs of pharmacies across the country?
A: There are many small and medium-sized companies, but they lack the ability to support the entire system. We are waiting for the government to open the market because there have been budgets cuts.
ACCESS TO HEALTHCARE THROUGH INFORMATION
JOSÉ ALBERTO PEÑA Director General of Marzam Healthcare Distribution
Q: What are the main challenges of distributing healthrelated products in Mexico?
A: There are two major challenges in the Mexican health industry: public investment and security. The Mexican health system is fragmented, which causes inefficiencies. In terms of infrastructure, we do not need much more; there should be no problem with the available infrastructure. The issue is how we are using this infrastructure. More needs to be done on prevention (vaccination) and on preventive education because it will be difficult to overcome the health problems we have now if we do not change the habits of the new generations.
Another challenge is security. We have seen an increase in the number of transportation thefts, something that we are addressing with technology, since boosting the number of security personnel does not eliminate the problem. We are focusing on technology to ensure our products are tracked correctly, taking preventive action and working closely with the authorities of each state.
Q: What are the hardest places to reach and how do you manage logistics to these areas?
A: The most complicated geographies are those furthest away from urban areas. In Mexico, there are around 30,000 stores that dispense healthcare products (prescription or nonprescription goods), of which 16,000 are independent pharmacies: Marzam visits 11,500 of these 16,000. Therefore, we believe we are the company that reaches the largest number of independent pharmacies. We also visit regional pharmacies, pharmacy chains and self-service shops. In total, we visit close to 20,000 points of sale.
Q: How do you guarantee the correct distribution at all points of sale?
A: Marzam has two great strengths: our infrastructure 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 purchasing and distribution. We all have the same goal and if we provide the right service to the patient the rest will find its way.
Q: Marzam started with the distribution of pharmaceuticals (prescription and nonprescription), then wound care and health-related material. What is the next step?
A: Diversification is a core part of our strategy today and into the future. We are already working with medical devices and specialty products. These trends in the healthcare market will become more important and we want to be part of that evolution. In the future, Marzam’s sales will evolve and we will carefully evaluate all new areas of opportunity. Today, we work with 200 providers in the healthcare industry.
Q: Marzam has launched a new online platform that serves more than 11,000 pharmacies. What impact has Marzam en línea had?
A: We are working to get closer to our clients through new media. Marzam en línea allows independent pharmacies to maintain communication with Marzam, allowing them to track their activities and to request any support they need. Customers can use this online platform to make their purchases, verify what they bought, view the status of their orders and check their account status. In September 2017, the first month that Marzam en línea was available online, 10 percent of pharmacies had already registered.
Q: Given the company’s desire to become an integral health provider, what are your diversification plans?
A: Our private market business is divided between independent pharmacies, national chains and self-service stores. We are now focusing on private hospitals, a segment in which we are also growing and see great potential. Today, sales to the government sector represent 10 percent of Marzam’s sales, an area in which we also expect significant development given that 50 percent of Mexico’s healthcare is paid by the government. We also want to expand the number of consumer products that we manage.
Marzam is a Mexican company that began operations 83 years ago by distributing drugs to pharmacies in Mexico City. Now it distributes healthcare products throughout the country. It is a leader in specialized logistics solutions for human care
THE VALUE OF TRADITION IN A COMPETITIVE MARKET
JUVENAL BECERRA President of UNEFARM
Mexico has a population of over 120 million in a territory that covers 1.9 million km2. Getting healthcare services in smaller and remote locations can be a challenge but small and medium-sized pharmacies are stepping up to the challenge, says Juvenal Becerra, President of the National Union of Pharmaceutical Entrepreneurs (UNEFARM), an independent alliance created in 2009 by 25 pharmaceutical 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 and 7,500 points of sale associated with pharmacy chains. Yet, in terms of sales, independent pharmacies represent 16 percent of the private market, says Becerra. The market is dominated by the bigger chains, which account for a 65 percent share, according to the Anáhuac study.
Independent pharmacies are also helping to increase access to healthcare thanks to their extensive generic options. “In 80 percent of the pharmacies that UNEFARM represents, seven out of 10 drugs sold are generic.” Becerra says these types of medicines have enjoyed exponential growth because the public has recognized their effectiveness, in addition to the purchasing power of the population and the efforts of COFEPRIS. “Between 65 and 70 percent of the products offered by the independent pharmacies we represent are generic and between 25 and 30 percent are innovative.”
UNEFARM has 5,200 affiliated pharmacies and offers it members better commercial opportunities for product purchases, human resource training and tax advice. “We always look out for the benefit of independent pharmacies to remain competitive and survive the market,” says Becerra.
The alliance works directly with distributors such as Levic, Almacén de Drogas, Marzam and Nadro, negotiates with laboratories for independent or centralized purchases and also provides regulatory support to help pharmacies comply with guidelines. “ COFEPRIS has helped us with health promotion visits, which has allowed us to adopt the needed changes in each location. The authorities have always been 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 pharmacies and thus strengthen its presence in the market. Another goal is to empower small and medium-sized pharmacies with a more solid commercial base backed by technology. It recently developed software that records data from all affiliated companies to help each pharmacy understand market trends and price data. “This system will help us to homologate prices and in the future it will allow us to operate as a pharmacy chain.” To execute this plan, the association hopes to install the software in 3,000 pharmacies in the next two years. Afterward, it hopes to establish a name and a brand.
Besides software, independent pharmacies are adopting other Big Pharma trends, such as adjacent doctor offices. UNEFARM is also sketching its new operational model along the lines of segmentation as it works with pharmacies of different sizes. “Not all pharmacies have the same resources and capabilities but the image will be the same in different segments,” Becerra says. He adds that the main role of independent pharmacies is to take healthcare to those remote places where big pharmacy chains are not present. The second priority is to stay competitive in cities to compete with the big pharmacies.
STAY COOL: KEEPING THE COLD CHAIN INTACT
NAPOLEÓN GÓMEZ Country Manager of World Courier
Clinical trials are the necessary first step in getting a product into the hands of the general public. Napoleón Gómez, Country Manager of global logistics company World Courier, says businesses like his can play an integral role in moving a trial to a successful conclusion. “In Mexico, the clinical trials industry faces several challenges. Among them is finding ways to ensure that participants do not abandon the trial, which can delay a study by months and sometimes, years,” he says. “ World Courier focuses on optimizing the clinical trial supply chain to help research centers and pharmaceutical companies in their effort to find new treatments.”
To that end, World Courier has developed logistics strategies to bring pharmaceuticals closer to the general public, while maintaining the same quality standards as the contract research organizations (CROs) operating in the country. One service that can specifically aid the clinical trial industry in Mexico is World Courier’s Direct-to-Patient solution, which is designed to deliver treatments directly to the patient’s home. This solution makes it easier for patients to keep up with the procedure, meaning they are likely to stay in the trial for a longer period. As some of these medications need to be administered by a nurse, the company also coordinates the assistance of a professional. While this service is already operational in Europe, Gómez explains that there are challenges to bringing the model to Mexico, including security and infrastructure issues.
Founded in 1969 and acquired in 2012 by AmerisourceBergen, World Courier has created solutions to address the specific needs of pharmaceutical companies: commercial supply chain, pharmaceutical storage and distribution, clinical trial logistics, cell and gene therapy and direct-to-patient, as examples. Gómez says the acquisition by AmerisourceBergen has helped the company expand, by taking advantage of an extensive global network and investment in logistics for human and animal health. “We have grown at a double-digit yearly rate since 2012.”
Gómez says that one of World Courier’s greatest advantages is its quality standards and certification,
which are applied to its operations globally. “We know and follow the standards to which the pharmaceutical industry adheres to provide the necessary services related to cold chain.” To guarantee a pharmaceutical product’s quality and integrity, comprehensive steps are taken from the sourcing of raw materials to the distribution of the final product. World Courier is the first global logistics company to attain global GDP certification against three major GDP standards, those of the EU, United States Pharmacopeia and WHO, and the only provider to hold a GDP certification with such wide and global scope. Additionally, World Courier has developed specific products and strategies to maintain the cold chain. “We are involved in storage and transportation fully specialized in temperature control through excellent packaging solutions that can truly guarantee that the products stay within those temperatures,” says Gómez.
The company offers active and passive packaging to deliver products within specified temperature range. Active packaging incorporates an internal fan or a supply of dry ice to keep the product cold for longer periods. Passive packaging only requires adequate conditioning with no additional modifications during transportation. In 2015, the company launched a packaging solution called Cocoon that uses several gels to keep a product’s temperature constant. “Cocoon will maintain products at the desired temperature for three to five days. This type of packaging is designed to minimize the manipulation of products that require opening the package,” Gómez says.
World Courier is based in Mexico City but its logistics solutions allow it to work throughout the country and around the world. Gómez says that Mexico City is a strategic connection to the US, Canada and Latin America. “From here, we can connect any two points because our packaging guarantees the integrity of the products throughout the trip.” Adaptability, he says, is a key to World Courier’s success and with its new services the company sees a positive outlook for the Mexican market. “We fully understand the changing needs of our clients and we adapt our product offering to them.”
INVESTING IN TECHNOLOGY FOR BETTER, FASTER LOGISTICS
VÍCTOR SOTO
Director General of Distribuidora Levic
Q: How has Distribuidora Levic’s online sales division grown? What short-term impact will this have on the company?
A: By May 2018, our online sales division represented 20 percent of our sales. Clients like the new platform because it is easy to use and they have slowly migrated to it. Some are reluctant to try the new technology but most are adopting it. I would like to see this area grow to 70 percent of our sales within five years.
Q: How is Distribuidora Levic incorporating new technologies to offer better logistics solutions?
A: Our distribution center in Vallejo, Mexico City, which will be finished by December 2018, will have a surface of approximately 8,000m 2 and a total construction of 80,000m 3. It will be one of the most technologicallyadvanced warehouses in Mexico as it will automatically sort 2,460 daily products without human input. This will allow us to provide better and faster logistics solutions. The center will also use a 100 percent automated robot.
Q: What market trends has Distribuidora Levic identified in the pharmaceutical sector?
A: Generics continue to grow, since patented medicines remain inaccessible for a large percentage of the population. However, some laboratories are introducing brands at more accessible prices. In 2017, we sold mainly generics but we have made an effort to increase our percentage of patented medicines, which now represent between 18 and 20 percent of our sales. We have also introduced new brands of patented drugs. The new plant in Vallejo will be key to increase our patented medicines market.
Q: How has the growing demand for generics affected local manufacturers?
A: In Mexico, the demand for generic medications is higher 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 that Mexicans need. For that reason, 2017 was a complex year for the Mexican pharmaceutical sector. The local pharmaceutical industry is among the strongest sectors in
Mexico and competes with international companies, which is unusual in the country. It is important to strengthen Mexico’s pharmaceutical industry by consolidating local research projects and providing medicine manufacturers with fiscal incentives. It is also necessary for regulators to work alongside manufacturers to guarantee accessibility to medications.
Q: How does Distribuidora Levic support independent pharmacies?
A: There is no real data on the market share of independent pharmacies. The goal is to support independent pharmacies and make them more competitive against larger pharmacy chains. Independent pharmacies can compete by providing better customer services and by developing differentiated products for their captive market. Independent pharmacies must also take advantage of the trust they have generated among their customer base, as they are often more widely accepted in communities than pharmacy chains. Our role is to provide these pharmacies with products at competitive prices. There are many independent pharmacies in Mexico City and State of Mexico, but they are also common in small regions where chains are unwilling to invest.
Q: What are Distribuidora Levic’s growth plans in Mexico and abroad?
A: In 2017, we began operations in Belize and although we will continue developing this region, we will focus more on Mexico, where demand is rising significantly. We are planning to expand into distribution for hospitals, clinics and pharmacy chains and will continue investing in technology and R&D for better logistics. Our goal is to continue growing and providing excellent services to the market. Some of our projects are already incorporating Industry 4.0 principles. Distribuidora Levic is committed to the healthcare of Mexicans.
Distribuidora Levic is a Mexican company that specializes in the distribution of medicines, including bioequivalents, brand medications and generics and medical supplies. The company has 18 years of experience in the Mexican market
SAFETY AND QUALITY FOR THE FINAL CONSUMER
ENRIQUE GARZA CEO of Capsugama
Among medication’s most important factors are its efficacy and safety, but the way it is packaged and delivered also plays a key role, says Enrique Garza, CEO of Capsugama, a Mexican supplier in the pharmaceutical and food supplements segments. “The Mexican market mainly imports hard gelatin capsules, which the pharmaceutical sector most requires,” says Garza, adding that the segment has substantial room for growth.
Depending on its formulation, intended use, pharmacokinetics, pharmacodynamics and many other factors, oral medication can be packaged as tablets, soft capsules or hard capsules, the latter being the most widely used in Mexico and the world. Hard gelatin may contain powdered medicines, granular, semi-solid and nonaqueous liquid medicines and their main feature is that they have the advantage of tasting better than tablets.
In addition, they allow the packaging of semi-solids and pellets. According to Markets and Markets, the hard gelatin capsule market will be worth US$2.31 billion by 2021. “The Mexican pharmaceutical market requires 10 billion capsules per year, of which we currently have roughly 10 percent,” says Garza.
Garza explains that capsule manufacturing is often underestimated. However, the manufacturing process is complicated since it must ensure that millions of capsules have exactly the same thickness. Manufacturers have also developed integral measures to guarantee asepsis and avoid any type of contaminant. Capsules must also be delivered and stored in temperature-controlled storage units to ensure their physical integrity at all times.
Capsugama works with both the pharmaceutical industry and the food supplements industry. The first is much harder to access, says Garza, but the support of ACG, its provider, allowed Capsugama to enter the market. ACG, one of the largest companies in the world for the manufacture of hard, empty gelatin capsules and for which Capsugama is the exclusive representative in Mexico, produces 83 billion capsules a year for 80 countries.
With almost 20 years of experience, Capsugama is now a trusted supplier in the sector, says Garza.
To ensure integrity, quality and safety, all Capsugama’s products are delivered with a certificate of analysis signed by the manufacturer. Furthermore, COFEPRIS carefully regulates all products for the packaging of medications. “COFEPRIS has done an excellent job in ensuring that quality products can access the Mexican market and when a product meets COFEPRIS’ requirements, the council allows its expeditious entry into Mexico,” says Garza.
Capsugama’s expertise in the market is leading the company to expand its product portfolio to introduce ACG’s natural capsules made of hydroxypropyl methylcellulose (HPMC). These inert, odorless and tasteless capsules have the same bio-availability of regular hard gelatin capsules and are low in moisture. The capsules are also halal and kosher certified.
In the long-term, Capsugama wants to introduce new products, including delayed-release capsules. Delayed HPMC capsules can protect medicines against stomach acids without the need for protective chemicals or other types of coatings. These capsules can also delay or control the release of the medications until after they pass the stomach to avoid their inactivation by gastric juices and can also be used for drugs that irritate the gastric mucosa.
Capsugama also sells equipment for packaging medication into capsules imported from China and Chile, including pill counters, labelers, automatic and manual encapsulators, weight scales and pressors. Moreover, the company plans to continue developing its relationship with ACG to introduce more products into the country.
Garza says Capsugama expects to continue growing in the pharmaceutical market in 2018, both for the sale of capsules and machinery. While capsules may not be everyone’s priority when thinking of medications, they are a large market with significant opportunities to grow and innovate, he says.
NEW DEVELOPMENTS, NEW OBJECTIVES
CARLOS DE LA FUENTE President of Medistik
Q: What is Medistik’s strongest area? What other segments are you interested in exploring?
A: We are mostly focused on the private market. Originally, we were focused on logistics related to medical devices and equipment but we have expanded to other areas. Pharma is a very large sector with great growth potential where we can add value, as well as in clinical labs and hospital logistics.
In 2015, Grupo Tresalia invested in the company and, along with a new advisory board and new shareholders, we decided to establish a new name to lead our plans for the next five years. We are motivated to innovate and become an engine of change in the industry. Beyond a logistics operator, we consider ourselves an integrated solutions provider for the entire supply chain, focused on the healthcare sector.
Q: How are you helping companies like hospitals achieve better dispensation?
A: We are developing new services to help hospitals manage their inventory more efficiently, better consolidate purchases, offer better services, have greater availability and reduce obsolete and expired products. There are certain technologies like radio frequency-enabled solutions that give institutions better control of their inventory in real time. With these devices we can track the input, consumption and output of high-value material in areas like hemodynamics, which allows us to track the product cycle by eliminating manual processes.
Q: What are the main challenges facing the logistics industry in Mexico?
A: Traceability. In other words, we provide the client with total visibility regarding where their products are, in what condition and if they are undergoing a process that 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 Mexico, regulatory compliance is also a challenge. Not all players have the same processes and capabilities to ensure full regulatory compliance as regulations have become
stricter in terms of temperature control for warehousing and distribution. For that reason, as an industry, we need to continue working on enforcement and a clearer regulatory definition for logistics operators so we can provide transparency and certainty to clients. Finally, we must demand higher quality services and achieve greater compliance to evolve as an industry.
Q: What role does technology play in Medistik’s operations?
A: There will be several innovations that will change the way we operate today. We are exploring how to use AI and Big Data analytics to provide valuable information to our clients. This will require us to develop new business models in areas like home care, which will give us the opportunity to offer not only distribution but also followup on medication and treatment directly with the patient. We have a new business and strategy area focused on technology and innovation that is helping us advance in this regard.
Q: Last year, you mentioned that the company was looking to triple its size in five years. How far along are you?
A: We are growing at a double-digit rate and our plan is to multiply in size four or five times by 2022. We will achieve this by improving our five vertical segments: medical equipment and devices, pharmaceuticals, animal health, doctors and clinics and hospital logistics. We are also modifying our offer to evolve from being a traditional B2B company to complementing it with a B2C component under a patient-centric strategy.
We want to help bring our clients closer to their patients. To achieve this, we have developed services like direct distribution of products to patients with chronic diseases. We have a division called Healink through which we help our clients reach the patient in a more direct way.
Medistik is a logistics company focused on diagnosis, clinics and hospitals, pharmaceutical, biotechnological and animal health. It offers services for the introduction of products in the market, imports and platform orders
COMMITTED TO SUSTAINABLE EXCELLENCE
MAARTEN POUW CEO of DSM Sinochem Pharmaceuticals
Q: How is DSM Sinochem Pharmaceuticals’ (DSP) cardiovascular and anti-fungal divisions positioned for the medium term?
A: All of DSP’s statins are manufactured in our state-ofthe-art facility in India using a patented partially enzymatic technology that remains unique in the world. As part of our growth plans, we have increased our Atorvastatin sales both via organic market growth as well as with new customers. Following the recent successful introduction of Atorvastatin, we are now also rapidly increasing our presence in Rosuvastatin. The anti-fungals market is stable and we continue with our finished dose formulations in regulated markets.
Q: The Sustainability Report from 2016 shows DSP achieved over 200 marketing authorizations by the end of the year. What are the main milestones for 2018?
A: In 2016 and 2017 it was a great milestone to create such a large portfolio of market authorizations (MA) for European markets. Currently, we are making progress to license these MAs and develop our business in regulated markets. At this time, we do not have any plans to develop these MAs for Mexico.
Q: How does DSP’s environmental and sustainability approach differ from the traditional approach in manufacturing APIs and drug products?
A: Our philosophy behind the sustainable production of antibiotics is quite straight-forward. DSP strives to apply unique technologies that simplify the manufacturing process. The production of our PureActives line has reduced our carbon footprint by 64 percent. Beyond cleaner and simpler manufacturing, DSP is very much involved in controlling the anti-microbial activity levels of our waste streams. This is a global issue that in recent years has received a lot of attention from health and environmental legislators. DSP is
DSM Sinochem Pharmaceuticals (DSP) is the global leader in sustainable antibiotics, next-generation statins and anti-fungals.
Founded in 1869 as the Nederlandse Gist en Spiritusfabriek, it is one of the oldest fermentation companies in the world
at the forefront trying to establish industry guidelines that help protect the efficacy of our current antibiotics.
Q: What message would DSP send to other companies about the impact of implementing a sustainability strategy?
A: DSP has taken on a high-profile campaigning role in the fight against AMR by calling on both the industry and the supply chain to act responsibly in buying, using or selling antibiotics. All pharmaceutical companies should improve monitoring of API emissions in their manufacturing facilities. They need to also support the installations of proper waste-processing facilities onsite to reduce or eliminate API discharge. These efforts should be based on voluntary, transparent and auditable commitments, with a globally consistent quality mark.
Q: Bain Capital Private Equity will acquire DSP. What benefits are you expecting from DSP’s acquisition?
A: Subsequent to approval by the relevant legal and regulatory authorities, DSM Sinochem Pharmaceuticals will be owned by Bain Capital Private Equity. Under this new ownership structure we look forward to a bright new era in which we will be supported by Bain Capital. With their financial, advisory and operational capabilities, combined with their extensive knowledge in the healthcare space, Bain Capital will be able to assist us in achieving our vision. Together with Bain Capital, we are a global leader in highquality APIs and drug products. We remain committed to our core values: quality, reliability and sustainability. As a part of this, we promote responsible manufacturing of antibiotics.
Q: What are the company’s main objectives for Mexico in 2018?
A: DSP is committed to the anti-infective and statins market, as well as the Mexican API industry in general. We 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 been able to grow our production in Mexico with increased sales all over the world. Our unique and high-quality APIs are approved by relevant regulatory bodies like COFEPRIS, FDA and ANVISA.
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 Switzerland, Taiwan, Brazil, China and Spain, what have been the greatest lessons of working in Mexico?
A: I have learned the most in Mexico because of the challenges of working in a fragmented system and an emerging market. When I arrived here 20 years ago, I brought my knowledge, experience and best practices to the sector. At that time, everything was completely new: the regulatory authorities, the market and the companies. Regulatory authorities like COFEPRIS have been key to the development of the pharmaceutical industry in Mexico and although I think COFEPRIS is doing a good job, there is still a long way to go. The sector must implement more international standards to be completely competitive globally but it is going in the right direction.
Q: What is the company’s top goal here and where will it expand to next?
A: Valtria’s team comes from a Swiss multinational company that operated for years in Mexico but it decided to close its offices in different parts of the world, including Mexico. That company still exists, but under another name and it is now one of our competitors. Within three years, Valtria, which specializes in the design and installation of clean rooms and controlled environments, would like to be recognized as a highly professional company with excellent engineering solutions for the health and food sectors. We are also planning to expand to Central and South America in the midterm.
Q: Within its range of solutions for construction and equipment, which sector is more relevant to Valtria?
A: Valtria believes the pharmaceutical sector in Mexico is the most attractive for its operations. We have realized that large multinational pharmaceutical companies are not growing as fast as before while domestic companies 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 are increasingly demanding. The same applies to the cosmetology and dermatology industries, which we are also planning to address.
Q: What is the company doing to position itself in the health industry? What added value does your portfolio offer for companies in Mexico?
A: Valtria hires personnel with previous knowledge and experience in the pharmaceutical sector and this new talent is introducing new contacts and companies to collaborate with us. We are a completely new company with a little over one year in Mexico but we already have a solid client portfolio. We work to provide our clients with a complete report and documentation of the projects we develop for them, which allows for us to implement preventive measures and follow-ups in the future.
Q: In Mexico, it is estimated that the frequency of infections in hospitals varies from 2.1 to 15.8 percent per year. How does Valtria offer a solution to this problem?
A: Valtria can install a unidirectional laminar flow that makes the air pass from A to B without turbulence, which allows a greater guarantee of air quality. This solution for hospitals reduces the amount of antibiotics required by a patient to avoid an infection. Investing in Valtria’s engineering represents an improvement in health but also a cost-efficient benefit for hospitals. We need to change the Mexican mentality to promote an attitude of prevention and investment in health through technology. Many times, the cheapest solutions in the short-term are more expensive in the mid to long-terms.
Q: What growth expectations does Valtria have for Mexico? How do you plan to achieve these goals?
A: We mainly want to triple our sales in services and position ourselves in the market. It is important for Valtria to be recognized in the sector but also by other industries that need our services. Valtria sees potential growth and development of the market in Mexico but it needs the support of everyone who participates in the process.
Valtria is a world leader in air calculation technology. The company specializes in the design and installation of clean rooms and controlled environments for sectors such as hospitals, pharmaceutical and biopharmaceutical
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 technology revolution that is reshaping the manufacturing sector. It seeks to transform and induce competitiveness by using technology, automation and digitalization in productive and logistics processes. More pharmaceuticals are introducing Pharma 4.0 and seeing the results on their bottom lines, says Charles Beard, Director General at Tradimport.
“ Tradimport has introduced the best of Pharma 4.0 to improve the quality and the management of our entire production and achieve an average annual growth rate of 10 percent,” says Beard, whose company specializes in the distribution of packaging equipment for the pharmaceutical, 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”
Pharmaceutical packaging technology is key for the industry because it protects and identifies a product, which translates into better patient compliance, as well as improvement of a company’s market competitiveness. “We are experts in the supply of pharmaceutical equipment for processes such as primary packaging, secondary packaging and security. Our processes directly impact the quality our clients provide to their customers and patients,” says Beard. According to the World Journal of Advance Health Research, an international online peer review journal, the use of packaging technologies significantly improves the productivity, manufacturing and profitability of pharmaceutical companies. “Pharma 4.0 becomes a catalyst for making manufacturers more competitive in an industry
that continuously demands innovation and requires players to evolve in a highly regulated environment,” Beard says.
Pharma 4.0 also involves the integration of Big Data in the health sector, allowing large volumes of information to be processed in a structured way that identifies patterns, according to the International Journal of Medical Informatics. Tradimport “complements the manufacturing processes and administrative procedures with the use of Big Data to push the industry’s digitalization,” says Beard. “Our portfolio offers fully automatized, digital and smart products to the industry as a way to not only ensure their packaging needs, but also to improve the logistical requirements in a more efficient manner.”
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.”
Tradimport also takes advantage of Mexico’s specialized workforce in the pharmaceutical industry and a reliable regulatory environment to maximize its market share. “The level of pharmaceutical education in the country is high, which provides added value to companies and the market,” says Beard. The National Survey of Occupation and Employment from 2017 (ENOE), says Public Health, Educational Planning and Evaluation and Medicine are the three careers with the greatest compatibility for work in Mexico. Also, the ENOE 2017 reveals Public Health has 96.8 percent affinity followed in third place by Medicine with 95.6 percent, both areas overpass the national average of 80.3 percent and position as the areas with closest relationship between occupation and studies carried out.
MEXICAN ENGINEERS SEE MARKET INSTABILITY
MIGUEL SÁNCHEZ
Executive Director of Grupo IDEA
All products deteriorate over time and with exposure to the elements, but pharmaceuticals are particularly sensitive to this process, making it necessary to ensure they can withstand storage and distribution. To that end, pharmaceutical products must undergo stability tests, explains Miguel Sánchez, Executive Director of Grupo IDEA. “A small percentage of each production batch must be reserved to undergo a stability test that is divided in two parts. The first part requires the sample to be hosted in a controlled environment of temperature and humidity to fasten its degenerative process. Once this step is finished, the second part of the process requires subjecting the same samples to physicochemical and microbiological testing,” says Sánchez. To perform the first type of tests, Grupo IDEA manufactures CAI, or controlled environment rooms, which allow customers to set any conditions they want to subject the product to.
Grupo IDEA, a fully Mexican company with over 18 years of experience, specializes in the design and manufacture of environmental rooms according to its clients’ needs. The company, now also an authorized third party, owns several rooms in which it performs stability tests for third parties. “This required the creation of our own laboratory and we are gradually increasing our services portfolio.” The company has installed over 80 rooms in Mexico during the past six years, mostly for multinational pharmaceutical companies. It also designed K’iin Control, a specialized software for the control of its rooms. “We provide an integral offering, from design of the room to aftersales services, as this is critical equipment that must not fail under any circumstances,” he continues.
Sánchez credits the company’s success to its employees but he says the sector remains wary of local businesses. “Mexican companies do an excellent work,” he says, “but the pharmaceutical sector does not yet trust local companies. Ninety percent of equipment acquired by pharmaceuticals is imported.” Those circumstances also created a complex beginning for Grupo IDEA. “At first, it was hard to find funding because the financial sector is unwilling to back new projects. While there are financing channels, these are often scarce, hidden and hard to access for new companies.”
Another dilemma rests with buyers that are often cautious when launching unfamiliar products due to potential risks to their operations. “They simply prefer to buy what they know,” Sánchez says. To enter the sector the company had to invest a great deal of time to raise awareness of its products and instill trust. “Once a company tried our product and proved its safety and reliance, knowledge spread quickly by word of mouth.”
Grupo IDEA is now preparing to expand its services for sample sheltering and also its laboratory. “2018 has seen many challenges, including the elections, the subsequent change in administration and the policies implemented or being discussed by US President Trump.” In response, Grupo IDEA lowered its market projections for the year. “Considering that most of our clients are international companies, our projects for 2018 were paused until July. Many of our clients have told us that they are just not allowed to invest in infrastructure until the elections are over.”
While some may feel uncertain, Grupo IDEA is forging ahead and it plans to expand into Guadalajara and other states as it looks into widening its sample sheltering business. The company also sees great potential in photo-stability testing and stability testing of products that contain cannabis. “The potential approval of these products is a matter of interest for many Mexican laboratories, so we are evaluating the possibility of becoming authorized third parties for these products. This will also pose its own challenge as, due to the sample’s nature, its transportation, testing and storage will require intense and constant scrutiny.” Furthermore, the company is looking into other sectors such as automotive, aerospace, agricultural and alimentary.
While entering the pharmaceutical sector posed some challenges, Grupo IDEA has grown in this market niche. Sánchez believes that its success can be replicated by more Mexican companies. “The industry is open to try our products for critical processes. What the sector needs is more products developed by Mexican companies. It is time for Mexico to develop more products. There are many opportunities ready to be taken.”
COMPREHENSIVE SOLUTIONS FOR SPECIALIZED AREAS
FLORA PIÑA
Commercial
Director of Uniparts
Research centers play an important role in the pharmaceutical ecosystem but budget cuts are placing them and their suppliers in a precarious position, says Flora Piña, Commercial Director of Uniparts, a Mexican distributor of scientific materials and equipment for R&D laboratories. “In 2018, CONACYT made a 68 percent budget cut on infrastructure, which hit research centers in their ability to buy reactants and equipment. This also hit all universities and research centers across the country.”
With over 30 years of history, Uniparts provides integrated solutions for highly specialized areas, including biotechnology, molecular biology, cell biology, histocompatibility and diagnostics. The company works mainly with research centers, although it does have corporate clients. From its inception until 2014, the company experienced an annual growth rate of 20 percent, explains Piña. “The past few years have been complex due to budget cuts, so we exploring other alternatives.” Uniparts has five offices in Mexico: Monterrey, Guadalajara, Merida, Queretaro and Mexico City, from where it supplies all state universities. The company is looking into developing its own laboratory services as it expands from its supplier roots. Tighter budgets are just the latest problem hitting Mexican R&D as the sector has also faced a chronic lack of private investment. “There is little interest from pharmaceutical companies to invest in Mexican R&D, but there are exceptions. Furthermore, there is still a gap between academic research and the commercialization of a product.”
Piña explains that this gap has been a problem for decades, as universities lack the know-how related to necessary steps for commercializing their products. “Researchers often lack knowledge on how to develop commercialization strategies. There are no financial incentives from public institutions for researchers to navigate the many barriers that complicate the launch to market of a new product. Other countries like the US have managed to create successful financing schemes for their institutions, helping researchers to develop their products.” Mexico’s problems bringing research to market can be seen in patent registrations, says Piña. “Most of the new patents created in Mexico belong to foreign companies. Patent judges also do not have the necessary
training to perform this job, which makes the process too time consuming and inefficient.”
To cope with a reduction in sales, Uniparts decided to capitalize on its extensive experience with state-of-theart technology. Instead of providing the equipment, the company now provides the tests themselves. “We have a strong scientific support division and an engineering department that are in charge of training clients on the use of our products.” One example, Piña adds, is the trend in the global pharmaceutical sector us the use of cell cultures to avoid clinical tests on animals. “In Mexico, this practice is just starting so we hosted a series of conferences to create awareness on cell culture techniques, including 3D-cell culture protocols. Some of our attendees have shown interest in further investigating these topics and have requested workshops from us.”
The next step for the company is to lean on its employees’ experience in many different research lines to develop a testing laboratory. “Our company sells state-of-the-art technology but Mexico is often about seven years behind in technology in comparison to the US and the EU, so we have to make a strong effort to educate our potential customer base on the new techniques that are impacting research development.” Piña says that the laboratory is expected to be ready in 2019 when it will start providing flow cytometry services. Later, it will add more cuttingedge technology, including Next Generation Sequencing (NGS), an area that is trending globally to sequence genomes. “While this technique is extremely popular worldwide, it is uncommon in Mexico, so it is a large area of opportunity.”
Going forward, Uniparts will focus on diversifying its services to weather the budget storm. “We want to generate a strategy to recover the share of the market we have lost due to this period of uncertainty and focus on finishing our laboratory.” The company does see more opportunities ahead. “About 80 percent of the products we distribute are imported so I see a significant opportunity for the company to generate its own molecular diagnostics kits.”
REMOVING WASTE TO REDUCE ENVIRONMENTAL IMPACT
JOSÉ AEDO
Director General of
SINGREM
Hundreds of thousands of expired medicines, wasted medical supplies and drug packages are discarded every year, but not always in the right way. Due to their nature, these products can present a significant health and environmental risk if they are not treated with due security, says José Aedo, Director General of the National System for Packaging and Medicine Residue Management (SINGREM). “Throwing away old medicines without proper control causes an environmental impact since this waste ends up in landfills and can leak into groundwater. In Mexico, there is the additional danger of these drugs ending up on the black market,” Aedo says, adding that there is a significant business opportunity for companies willing to tackle the issue. SINGREM was created specifically to collect and properly dispose of medical waste.
To prevent environmental and health damage, the General Act for Prevention and Integral Waste Disposal establishes that companies that work with products that end up as hazardous waste, such as those in the pharmaceutical industry, must develop proper disposal strategies. “This act states that all manufacturers, sellers and distributors must either generate their own waste disposal plan or work with a company that disposes waste for them.” SINGREM is the only medical waste management system in Mexico for the residues generated at home.
The function of the association is not to collect waste from manufacturing companies, but from homes. “We have placed 5,000 waste disposal units in pharmacies, hospitals, government offices and schools in 26 states across Mexico where people can dispose expired medicines or medical supplies,” Aedo says. SINGREM is in charge of logistics for the collection and delivery for disposal of this waste and it has 30 vehicles, 17 storage warehouses across the country and 28 supervisors. The only process that is outsourced is the incineration of medical waste. “SINGREM is an example of the goals that pharmaceutical companies can achieve by uniting together. By February 2018, we were working with the generators of 62 percent of medicinal waste. Most of our members come from companies belonging to CANIFARMA, AMIIF and ANAFAM, but we are also attracting companies that do not belong to any of these associations.”
To achieve success, citizen participation is necessary.
“We have observed a greater awareness among Mexicans of the importance of adequately eliminating expired medicines. Our pilot test in 2010 collected 9 tons of medical waste; in 2017, we collected 612 tons. We have reached 2,500 tons collected since the beginning of the program, equivalent to 200 fully loaded trucks.” The group also offers a program to which companies of any size can join as long as the company is willing to contribute.
However, a lack of regulatory enforcement is preventing more companies from joining the association, says Aedo. “Approximately 50 percent of the medicines that SINGREM collects are generics, but six of the 20 largest generics manufacturers in Mexico are not working with us. Local regulations are strong but there is hardly any enforcement, so companies often bypass the rules,” he says. A strict application of the existing regulations would be a good solution. Another approach would be to enact regulatory changes that further motivate companies to comply with the law. “Countries like Spain make it mandatory to have a complete record of the waste disposal for every registered product. Without it, it is not possible to register a drug.”
SINGREM is also working to convince all companies that handle medicines to join its project. “We have met with pharmacy chains to show them the benefits of this program. If we remove a container from a pharmacy, the pharmacy receives less traffic since some clients visit specific pharmacies to get rid of medical waste. In the case of manufacturers, developing their own waste management program is highly expensive.”
Considering the environmental benefits, the group’s goal is to face all challenges and continue expanding. “We want to continue expanding our infrastructure. To collect 1,000 tons per year, we have to install 2,000 more containers. As we continue growing, we also aim to introduce recycling practices for cardboard and paper and in the long term we might also include collection of veterinary products.”
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, quality laboratories, technical assistance and 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.
THE MORE CONNECTED, THE HEALTHIER
ALEJANDRA GROFF Director General of GMMC
Q: In what therapeutic areas does the GMMC portfolio focus?
A: We provide solutions for different areas. For example, we sell diagnosis devices for private practices. Seventy percent of our sales go to the private market and the rest to the government. We generally participate in tenders through our distributors. We are wholesalers, we import and supply for smaller distributors. Our most popular products are surgical instruments, equipment for cardiology, and devices for stress tests or spirometry.
Q: What is GMMC’s criteria for which brands it chooses to distribute?
A: Technology is very important to us. We evaluate the needs of the market and try to follow those trends. Now, we are leaning toward telemedicine. The country of origin is also important to us. Most of the brands we work with are from the US and Europe. We are not closed to Asian manufacturers; however, the government does not accept these products but the private market is more open.
Q: What purchasing trends have you identified among institutions?
A: In 2016, the market focused on cheaper products; the criterion was not quality, but price and both the public and private sectors demonstrated this behavior. However, in 2017, with a more stable exchange rate, brands became important again. The challenge now is to better promote our brands.
Q: What are the main therapeutic areas in which clients are interested?
A: Hospitals are investing a lot in cardiology, post heart surgery care and cardiac rehabilitation. They also invest in diagnosis, but the prices for this area have decreased, so it is not necessary to make large investments to acquire good products. In our case, sales have grown mainly in surgical instruments and cardiology devices,
GMMC Mexico is a medical devices and solutions provider for the diagnosis and emergency segments. The company distributes brands such as Welch Allyn, Huntleight and Schiller, among others
with the purchase of devices for the emergency area becoming increasingly popular.
Q: How do you rate access to technology in the Mexican healthcare sector based on the medical devices institutions acquire?
A: I think we need to focus on a younger generation of health professionals because many who have been in the system refuse certain technologies and are afraid of change. Mexico remains behind in the application of telemedicine. GMMC has tried doing a few projects with a group of doctors. One was for performing remote diagnosis for cardiology, but it was hard to accomplish results. We also try to work remotely with fetal monitors, but it is very complicated for different reasons, such as internet connectivity.
Q: What complementary services do you offer?
A: We offer advice on equipment purchases. When a client requests a product, we elaborate a study to know what they really need. In addition, we provide training to the professionals who will use it. We have engineers who can do maintenance work and we are ready to respond as fast as possible; we give aftersales service and preventive maintenance.
Q: With what type of products would you like to expand your portfolio?
A: We would like to include more products for telemedicine. We need to stop selling boxes and start selling systems that provide solutions. So far, we have contributed to protocols for laser devices in urology, gastro and gynecology. We have shared experiences with other companies to understand the market and to identify in which direction the industry should grow.
Q: What are your expectations for purchasing 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, although we have to wait. Asian products might have advantages attributed to more aggressive prices but the government could continue saying no to the Asian market and only buy from the US and Europe.
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 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
DIVERSIFICATION AS A KEY STRATEGY FOR GROWTH
PEDRO CATTORI Owner of TECROM Group
The Mexican pharmaceutical market has grown not only in volume but also in the diversity of its offer and to keep pace, or even get ahead, suppliers must also expand their product portfolio, says Pedro Cattori, owner of distributor Tecnología Cromatográfica (TECROM Group).
According to Cattori, TECROM is a good example of this strategy. When it was founded, the company specialized in the sale of products related to chromatography, an analytical technique used to separate mixtures. While TECROM continues to sell all necessary products in this category, it has broadened its portfolio to include many more laboratory and chemical suppliers used by hospitals, clinics, research labs and pharmaceutical companies. “We are not targeting a specific market as we represent 30 different suppliers. Our business strategy is to identify and fill empty niches that overlook existing medical, equipment and service suppliers,” says Cattori.
Today, the company operates through the exclusive or direct representation of an international brand and is enjoying success as an alternative brand for high-quality products. “Our competition is well-positioned in Mexico but their prices are often too high. The sector always needs suppliers that can deliver high-quality, on-time and defectfree products,” Cattori adds.
Chromatography continues to be a core part of TECROM’s business, as this analytical technique has applications in almost every manufacturing sector, from food and beverages to plastics and pharmaceuticals. “We are introducing a new technology for genetic screening and can now measure over 100 parameters through the use of mass detectors. The new equipment can operate samples automatically without the need of a technician,” says Cattori. He explains that medicine is becoming increasingly personalized according to the weight, age and race of patients, which is paving the way for medicines adapted to specific individuals. “These changes in the sector have led us to increase our offer to meet their needs. We have widened our product portfolio to cater to pharmaceutical companies, research laboratories, hospitals and clinics,” he says.
Cattori sees significant potential for growth in Mexico through the identification of specific market niches. “Our business is based on economies of scale. As distributors, it is much more convenient for us to import products in the largest reasonable volume with a wide diversity of product types,” he says. TECROM shipments contain a wide range of products packaged at the point of origin, which are subsequently distributed to the public and private sectors, including pharmacies and retail stores. “Importing high volumes allows us to offer products at more competitive prices than manufacturers as they would bring smaller volumes, which would be less cost-effective,” says Cattori.
TECROM also has offices in Europe and North America, but in Mexico the company is targeting both the public and the private healthcare sectors. “The public healthcare sector is the largest market in Mexico by volume and price and is changing at a rapid pace. For distributors, it is growing in strategic value,” says Cattori. For this sector, TECROM is importing products from South Korea and Australia. The company is also expanding its business by supplying to integrators, which are gaining an even larger share of the pharmaceutical market by providing comprehensive solutions to the public sector. TECROM also sees potential in the private sector, which according to Cattori “is evolving through the sale of medicinal products in retail stores, leading to an increase in the number and types of products.”
While maintaining an optimistic outlook, Cattori sees challenges on the way. “The market is being shaken by protectionist policies from countries that dislike trade deficits and have decided to solve them by implementing import tariffs.” Cattori explains that if Mexico decides to raise import tariffs in retaliation, TECROM and other suppliers for the healthcare sector may be affected. “Protectionist policies will force consumers to pay more for all products.” No matter the obstacles ahead, TECROM’s goal is to continue moving forward by offering differentiated products for specific market niches. “For 2018, TECROM will prioritize the needs of its employees and investors but it will not ignore its offering of high-quality products at reasonable prices.”
IMPROVING ACCESS THROUGH DISTRIBUTION
RODOLFO CAMARGO
Commercial Manager of El Crisol
Q: Why do companies choose El Crisol instead of other national and international distributors?
A: Our main product line is electrochemicals used in the analysis of any type of liquids, from water to creams. The second are those for liquid handling commonly used in laboratories, such as pipettes and micropipettes, followed by heating systems, including ovens and hot plates. We serve 31 different sectors, including pharmaceuticals, food products, water treatment, mining, oil and gas, research, chemicals and veterinary products and we have almost 30,000 clients. We are also the only company in Latin America that has a product catalogue in Spanish, which introduces over 13,000 products from over 220 brands from all over the world. Manufacturers, especially those engaged in medicines, must follow strict rules related to where they can buy their equipment from. While some import from Europe, others request specifically from the US. We work with 95 percent of the COFEPRIS-approved pharmaceutical companies in Mexico.
El Crisol’s main advantage is that we carry most of our products in stock. Other companies may have more products, but they are not based in Mexico so they must order from abroad. Sometimes, the lack of a single product can stop production for weeks, so it is necessary to replace it as soon as possible. Our main challenge is to properly manage this and, at the same time, to follow the strict traceability rules imposed by the pharmaceutical industry. While our products may be more expensive, clients can find what they want and receive it immediately. Furthermore, we are direct distributors of several of the most important brands in reactants, equipment and other supplies.
Q: How does El Crisol react to market changes and trends to ensure its clients are getting the most up-todate service?
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 our product offering is more diverse and includes specific lines developed for many areas of research, including cell management and biotechnology. To that end, in 2018 we
have increased our attendance at fairs, including those specializing in genetics, oncology and immunology, among many others.
Q: What areas does El Crisol believe will grow the most in the coming years?
A: At this point, no single market represents more than 10 percent of our sales, but the pharmaceutical segment is one of the strongest, along with food, academic research, water treatment, oil and gas and mining. Of all the sectors we manage, academic research will grow the most since the country has significant potential for it. Most of the research is funded by the federal government, which has created many delays and complications related to payments. In addition, administrative changes in the government and at COFEPRIS could stop investment and payments in the near future. However, the private sector is increasingly financing Mexican research. The country has many talented research professionals and the industry has seen this talent and the financial opportunities of investing in it.
Q: What are El Crisol’s growth expectations in the short-term?
A: It is hard to estimate an exact growth rate due to inflation and the volatility of the exchange rate. Our goal is to consolidate the changes we have made in recent years, maintain our leadership in the Mexican market and ensure that our workers participate more and more in our operations. We want to continue to develop our people and increase our workforce. We have implemented a fiveyear plan that defines our goals for the export market, new products, diversification of our portfolio, opening more branches, hiring more sales agents and further development of the e-commerce platform. We also support many congresses and other activities organized by universities to introduce scientific topics to the population.
El Crisol is a Mexican company that specializes in the distribution of laboratory equipment, measuring equipment and laboratory reagents. Based in Mexico City, it has offices in Puebla, Queretaro, San Luis Potosi, Monterrey, Torreon and Chihuahua
OPTIMIZING HEALTHCARE THROUGH TECHNOLOGY
INGRID RITTER
Director of Marketing UPS Americas Region at UPS
Q: How has UPS developed its presence in Mexico’s healthcare sector?
A: UPS has grown both organically and inorganically. First, by opening our own facilities and expanding the infrastructure of our locations and second, through acquisitions. When we entered the healthcare area in 2001 through Medistem Healthcare Services, our first acquisition, we obtained distribution capabilities in the segment. Poltraf and CEMELOG are some of our acquisitions in Europe. These companies have provided us with infrastructure and expertise.
When we want to grow in a region, we research potential strategic partners that can help us. Our latest acquisition is a company called Marken. It is the world leader in clinical supply chain solutions and will allow us to expand our logistics capabilities for clinical trials. Marken has a very strong network in Latin America and it is helping us strengthen our portfolio in Mexico and the rest of the region.
As a global logistics healthcare supply chain provider, we work with pharmaceutical companies, CROs and medical devices companies and we focus strongly on multinational companies that are expanding their presence in Mexico. We have a mature customer base in both Europe and the US and most of these customers want to expand their presence in Latin America. We also support domestic manufacturers.
Q: How will the Marken acquisition help to improve UPS’ position in the sector?
A: Marken specializes in the transport of biological products sensitive to temperature. It is a global expert in the transportation of medicinal products in the clinical research segment. Marken sends these biological samples from clinical locations to central laboratories and has built a complete network around this segment. Clinical trials
UPS is a logistics company with presence in more than 200 countries. Through its health sciences specialty, it offers logistics services for pharmaceutical companies, medical devices and research
in Latin America are on the rise and Mexico is a growing country. We see this acquisition as a way for us to strengthen and expand our portfolio in this area. Now, we can work with the pharmaceutical manufacturers in its supply chain, which means we can help them design their clinical logistics network and then help them in the supply chain design.
Q: How are logistics companies contributing to building a regulatory network in the region?
A: In our study UPS Pain in the Chain Healthcare Survey, we saw that over the last four years the main challenges for those responsible for healthcare logistics are cost management, regulatory compliance, product protection and product damage. One of the key activities of the UPS quality assurance team is to establish close relationships with the regulatory agencies in each country in which we operate. We have approximately 1,100 licenses worldwide to ensure that we are compliant in every single country where we are present. Compliance is complex in Latin America, since there are about 50 countries and territories and each has a different regulation. Our added value is the experience we accumulate in each country and the relationships with the agencies in those countries to ensure that our facilities and processes comply with regulations.
Q: How does technology contribute to the optimization of UPS’s operations?
A: We consider UPS as a technology company, since we invest around US$1 billion each year in this area. Technologies such as UPS My Choice provide control to our customers. This is critical in healthcare, because patients are waiting for medications that may be sensitive to temperature, for example. If a client signs up for UPS My Choice, they receive a notification of when the package will arrive; if for some reason the client is not at home, he has 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 through drones. We have partnered with other associations to bring these products to remote areas. In addition, we are exploring other uses of this type of technology in the health industry.
QUALITY AS DIFFERENTIATOR
EDUARDO TAPIA Director of Life Science and Healthcare at DHL
Q: What are the main priorities that DHL has identified in Mexico’s healthcare sector?
A: Life Science and Healthcare in Mexico is one of the most important sectors for DHL Supply Chain as it represents one of the eight most important markets for the country. Mexico’s priorities for the sector are pharmaceutical laboratories, medical device companies and diagnostic laboratories. We have almost 100,000m 2 dedicated exclusively to this sector, and half of this territory operates under a controlled temperature of 25°C. We have also developed networks with temperatures from 2-8 °C to ensure the integrity of our clients’ products, and have over 25 cold chambers all over the country. We have 30 distribution centers from which we can supply almost all hospitals within four hours. We are generating the appropriate infrastructure to address our client’s needs. For DHL Supply Chain, life sciences and healthcare is a continuous area of improvement because quality acts as our main differentiator.
Q: What is the main focus of DHL Supply Chain?
A: We are focusing mainly on medical devices and pharmaceutical products, but are also developing specialized solutions to improve hospital inventories. We have a wide range of specialized services for the healthcare sector which includes consulting services so that clients can develop their own supply networks, secondary packaging for retailers, complementary services and clinical trials delivery. Secondary packaging consists of a series of processes that include labeling and repackaging so that products can be shipped under the conditions determined by each company. This process can also be done under controlled-temperature conditions. We have the proper COFEPRIS licensing to do so.
Q: What role does technology play in logistics companies and how is DHL adapting?
A: Technology is becoming increasingly important to ensure safety. We have a solid tool for administering warehouse management systems (WMS) and another for transportation management systems (TMS) which enables us to provide versatile solutions with local teams.
Also, the digitalization has gained a lot of momentum in the region, and we are approaching some incubators to apply the good ideas that startups have regarding processes. Through this initiative, we are able to learn more about technology and IT, which allows us to improve our response to our client’s needs. We are also interested in using smart labels that incorporate radiofrequency identifiers (RFID) in hospitals to improve the inventory tracking. As technology is a fundamental part for the company, we have established an innovation center in Germany, where it takes place the solutions development for the industry.
Q: How is DHL growing alongside its clients and in what new areas is the company investing in Mexico?
A: We have both national and international clients and we are always willing to incorporate more. Our portfolio is comprised mainly of international companies, which has led to significant organic growth as these companies expand to other countries and bring their logistics operator.
Also, we have worked in the last two years to approach the health segment for animals, a well-developed area in other countries that we want to bring to Mexico. The underlying fundamentals of this sector are the same as for human health: ensuring temperature control, implementing best practices, traceability processes and properly administering the supply chain throughout the process.
Q: What are DHL Life Science and Healthcare’s main goals in Mexico?
A: Our goal is to generate success stories for our clients, while always prioritizing quality. In DHL’s strategy for 2020, healthcare and life sciences was named one of the most important sectors. We aim to continue growing organically in Mexico alongside our clients and focus on the improvement of our client’s distribution chains.
DHL is a logistics operator that was integrated in 2002 in the Deutsche Post DHL group, the world largest logistics company operating in the world. It was founded in 1969 and is headquartered in Bonn, Germany
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.
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 Enrique Peña Nieto set an ambitious agenda that would impact the key sectors of the economy. Known as the National Development Plan 2013-2018, the administration outlined its objective to make Mexico an inclusive country. To this end, the new government emphasized the social rights of all Mexicans, guaranteeing access to health for all. Giving structure to this plan, the Ministry of Health established the Sectorial Health Program 2013-2018, outlining six main objectives.
The first objective was to consolidate actions related to protection, health promotion and disease prevention. Between 2013 and 2016, the percentage of children under 1 year old who received a vaccination increased from 83.76 percent to 92.81 percent, while the prevalence of obesity in children between 5 and 11 years rose from 14.62 percent to 15.30 percent.
The second objective was to guarantee effective access to quality health services, measured by the mortality rate for breast and cervical-uterine cancer and by the hospitalization rate for uncontrolled diabetes. In 2013, the mortality rate from breast cancer was 16.61 percent, rising to 18.78 percent in 2016, while the mortality rate from cervical cancer decreased from 11.63 to 11.58 percent in the same period. The rate of hospitalization for uncontrolled diabetes with short-term complications decreased from 17.15 percent to 14.86 percent during that period.
The third objective proposed by the Ministry of Health focused on reducing the mortality rate caused by accidents and work-related risks, in addition to encouraging compliance with chlorinated water standards. COFEPRIS expected a higher percentage of samples of chlorinated water in NOM specifications, as water chlorination is a simple and effective means to disinfect water and make it drinkable, but also to avoid diseases. In 2017, preliminary data showed a 92.10 percent compliance with the NOM, while in 2018 the number increased to 93 percent.
Similarly, the mortality rate due to motor vehicle traffic accidents fell from 13.39 to 13.25 percent between 2013 and 2015. The mortality rate due to occupational risks
increased slightly in this period, from 0.81 percent in 2013 to 0.82 percent in 2015.
The fourth objective was to close the health gaps between different social groups and regions and was measured by the infant mortality rate and the maternal mortality rate. The infant mortality rate between 2013 and 2015 decreased from 12.98 percent to an estimated 12.52 percent, while the maternal mortality rate fell from 38.20 percent in 2013 to 34.59 percent in 2015.
The fifth objective set by the Peña Nieto administration was to guarantee the generation and effective use of health resources, measured by the percentage of public expenditure and the supply of medical prescriptions from 2013 to 2015. Under these indicators, the percentage of public spending showed a considerable increase, from 83.1 to 91.55 percent while the supply of medical prescriptions presented a small rise from 65.2 to 68.97 percent.
For the sixth and final objective, the proposal was to advance in the construction of a National System of Universal Health under the direction of the Ministry of Health, considering the percentage of the population that lacked access to health, the percentage of the population with public health insurance and the percentage of households in the first quintile of income (less than MX$4,000 per month) with catastrophic health expenses from 2013 to 2016.
In that period, the percentage of the population affected by access to health services decreased from 21.54 percent to 15.54 percent, the percentage of the population with public health insurance using public healthcare services increased from 53.68 to 64.29 percent and the percentage of households in the first quintile of income with catastrophic health expenditures decreased from 4.60 percent to 4.13 percent.
The National Council for the Evaluation of Social Development Policy (CONEVAL) is the public body in charge of generating information about the social and political situation in Mexico, as well as the measurement of poverty. In 2016, it created a monitoring sheet for the programs derived from the National Development Plan 2013-2018. The council classified the objectives as very
lagging, lagging, insufficient, adequate, advanced and exceeded according to 16 indicators included in the six goals of the Sectorial Health Program 2013-2018. In its analysis, CONEVAL determined that 44 percent of the indicators were inadequate; 37 percent were adequate, while only 6 percent achieved an advanced classification and 13 percent exceeded the proposed sexennial goal. Also, CONEVAL highlighted that 69 percent of the indicators focused on results and measured the solution of specific problems, while the remaining 31 percent was aimed at monitoring aspects of services and management.
Also in 2017, the OECD published its Health at a Glance report to measure the performance of the health system in Mexico. According to that report, in 2017 Mexico ranked last in categories such as life expectancy, obesity prevalence, general proportion of obese population, access to medical care, death rates from heart attacks and health expenditure. On the other hand, Mexico had the lowest rates of daily tobacco and alcohol consumption and posted a relatively good performance in terms of reducing hospital admissions for conditions treated at primary care centers, such as asthma and COPD.
WHAT WAS THE POSITIVE AND NEGATIVE?
In 2012, 78.6 percent of the 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.
Near the end of the administration’s six-year period, IMSS reported that it had achieved a surplus of over MX$2.1 billion and increased its 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.
COFEPRIS concluded a new classification scheme for medical devices that will allow the deregulation of 2,242 products with low risk to health.
According to ProMéxico, in 2017, Mexico became the leading exporter of medical devices in Latin America and the eighth producer internationally. The same year, ProMéxico reported that the country exported medical devices worth US$9.4 billion to the US, Italy, Germany and France.
Over the course of the Peña Nieto administration, COFEPRIS approved 540 records for generic medicines related to 71 percent of the causes of mortality in Mexico. This allowed a reduction of up to 70 percent in the price of drugs.
POSITIVE
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 deaths increased to 105,574 from 98,521.
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 more than 16 million Mexicans lack some form of financial health protection. The OECD Health Spending Trends report places Mexico second last (out of 34) for the lowest health expenditure per capita in the OECD, above Colombia.
The Ministry of Health registered that the combined prevalence of overweight and obesity rose to 72.5 percent from 71.2 percent between 2012 and 2016. The 2017 OECD Obesity Update ranks Mexico among the leading countries for adult obesity, next to the US, New Zealand and Hungary.
In 2017, Mexico ranked No. 1 for teen pregnancies among the 34 members of the OECD. According to ENAPEA, Mexico has 77 births per 1,000 female adolescents.
NEGATIVE
THE SHIFT IN POWER
The July 1 elections brought the biggest change in the history of Mexico’s federal executive power history. The country now has for the first time ever a president that is not from one of the biggest and oldest parties PRI or PAN. But the legislative power has also seen a tremendous shift. That same day, Mexicans also voted for the Senators and Deputies that would represent them. While MORENA, the party of
Mexico’s benchmark stock index, the S&P/BMV IPC, plummeted 7.6 percent in May, marking its biggest one-month decline since February 2009.
SENATORS IN THE CHAMBER IN 2012-2018
President-Elect López Obrador, held less than 3 percent of the chairs in the Deputies chamber for the 2012-2015 period and had no representation in the Senate for the 2012-2018 period, it has now jumped to holding over 40 percent of each chamber. The Mexican people have spoken, and wielding the power in both chambers, it remains to be seen how the President-Elect will act for the benefit of the country.
Source: BMV
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 secondhighest 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)
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 PRESIDENTIAL ELECTION RESULTS AND PERCENTAGES
AMLO
Source: INE
DEPUTIES IN THE CHAMBER IN 2012-2015
Anaya
2018 STATE GOVERNMENT ELECTION RESULTS
MORENA-PT-PES
Citizens' Movement
PAN-PRD-MC
PAN-MC
PAN-PRD-MC-PSI-CPP
214 PRI
113 PAN
99 PRD
27 PVEM
12 Citizens' Movement
Meade
Rodríguez
12 MORENA
11 PT
10 New Alliance
2 Independient candidates
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 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.
PLURINOMINAL SEATS
41.9% Together We Will Make History coalition (MORENA, PT, Social Encounter Party)
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
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 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
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, 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 30.5 million people do not have access to any kind of care. In Mexico, individuals invest most of their income, 53 percent according to the Nation Project, on healthcare.
“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
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 among a young population.
The Nation Project also highlights the extremely low investment made in healthcare, with only 2.8 percent of public funds allocated to the sector. In addition, it points to the misuse of resources, since the Superior Audit of the Federation established that 20.6 percent of those funds is potentially misused. The project also seeks answers to the shortage of hospital infrastructure for first-level care, as well as specialized care and the lack of doctors and nurses.
Several of AMLO’s campaign policies focused on what he and many Mexicans considered one of the biggest problems facing Mexico’s economy: fighting corruption. Corruption costs 20 percent of total healthcare spending, according to KPMG. Hence, AMLO is pointing the Nation Project directly at corruption, stating that the diversion of resources is among the main causes for the decline in the quality and effectiveness of all services provided. The Nation Project clearly decries the lack of a unique information system, which leads to
medication and medical supply waste, price disparities and an unnecessary waste of resources.
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 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.
“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”
July
31, 2018
To address these problems, AMLO’s Nation Project identifies nine principles on which to act. The first is good governance with an ethical commitment to guarantee transparency, efficiency and honesty. The second is the universalization of healthcare to ensure equal access to quality services for all citizens. Third, priority is given to the poorest and those who have been excluded from the system to ensure that all citizens have equal access to care. Fourth is equality for the development of policies and programs that reduce inequality in healthcare. Fifth is a growing focus on prevention, prioritizing education, promotion and protection. Sixth is to involve the population in the design and execution of policies and programs. Seventh is intersectionality to ensure that the goals for a healthy life are included in all public policy. Eighth is constant evaluation and transparency to fight corruption and guarantee the proper functioning of the system. Finally, the Nation Project ensures solidarity to finance the system with a fiscal policy based on proportional contributions.
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 not been totally clear. AMLO’s Nation Project addresses the areas that he considers most important in healthcare but there are few details on how the outlined principles will be implemented. What is clear is that during his presidential campaign, AMLO guaranteed universal access to care for all Mexicans.
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 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:
1. Transform the current model of healthcare to have a primary care focus. This strategy will solve 80 percent of primary care problems.
• 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 workplace and working alongside the population to strengthen the role of health authorities in epidemiological labor and sanitation security.
2. 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.
3. 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
common goals involving all public providers of care at state and federal levels.
• It will be necessary to establish goals for all healthcare suppliers that will be monitored by citizens.
4. 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.
5. Fight corruption and improve administration.
• The transparency in the use of all public resources will be prioritized.
• Products will be acquired through tenders and a unique national registry of the states of the purchasing, distribution and use cycle will be employed.
• The administration will match its services according to needs to eliminate bureaucratic barriers.
6. 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.
7. 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.
8. 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.
• Warmth will be a consequence of a culture that will place humanism, the patient and community service at the center.
9. Implement an effective emergencies model.
• This system will promptly answer all emergencies, including strokes and trauma due to accidents, violence or natural disasters by using all public 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.
• To accomplish this, it will be necessary to incorporate WHO’s recommendations, which indicate that it is necessary to include “healthcare in every policy” in
order for authorities to promote a healthy lifestyle and prevent policies that might damage health.
11. Healthcare research.
• Research will be prioritized in the areas of chronic diseases, skeletal muscle, renal insufficiency, motherchild nutrition and those derived from climate change and environmental problems.
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 national priority and allow citizens and evaluating organizations to have the necessary data available to guarantee the improvement of healthcare results.
WHAT
IS ON YOUR WISH LIST FOR THE NEW ADMINISTRATION TO STRENGTHEN MEXICO'S HEALTH INDUSTRY?
JULIO SÁNCHEZ Y TÉPOZ
Federal Commissioner of COFEPRIS
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 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.
FRANCISCO KURI BREÑA
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: education and medicine supply.
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.
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.
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, 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 percent of GDP; in 2016, that percentage fell to 5.8 percent. Healthcare has been put aside by the current presidential administration, a significant problem considering that epidemiological and demographic changes will demand more from the sector. Besides increasing the budget, it is also necessary to raise the sector’s efficiency to ensure that the budget is well spent.
VÍCTOR SOTO
Director General of Distribuidora Levic
Health is a priority for all citizens. Removing the plant requirement was a hard hit for local pharmaceuticals and recent plans to eliminate bioequivalence tests made in Mexico will also be a significant problem for Mexican manufacturers. The pharmaceutical industry should be made a priority for it to continue growing, generating jobs 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 good prevention scheme to recover the significant expenses caused by the earthquakes.
It is extremely important to continue developing the local market through the generation of public policies
Grupo Valore
ANA LONGORIA
President and General Director at Novartis
Rather than asking for something to solidify the health system, I would say Novartis' goal is to 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.
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.
ANNE ENGERANT
Director General Mexico of Reckitt Benckiser
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 five to 10 years.
This administration also made great advances to promote entrepreneurship in Mexico through the consolidation of the INADEM. Furthermore, investment funds grew and many incubators and accelerators were recently developed. Mexico has great capabilities to become Latin America’s Silicon Valley but the country needs more investment.
The Mexican Entrepreneurs Association (ASEM) helped get the entrepreneurship law approved, which now permits the creation of companies online within a single day and without partners. We also pushed forward the “re-entrepreneurship” law, which permits the easy and fast liquidation of a failed 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 and provide a greater quality of life to all Mexicans.
PAULINA ESCOBEDO
Director General of B. Braun Medical
There has been an important evolution since the Health Reform, when the Seguro Popular was implemented, and achieving health coverage is much more important than it was 10 or 15 years ago. It is still a challenge for our country to allocate budgets and attention in the government’s agenda, to address certain conditions, especially chronic degenerative diseases, from the perspective of prevention. In the next few years, I think that the catalog of Seguro Popular coverage should be complemented; as well as in terms of medical devices, to meet the important need for investment in infrastructure, both hospital and equipment, to optimize medical care.
We have a proposal for the new government to increase investment in health by 1 percentage point
Pfizer Mexico
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.
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 by 1 percentage point in five years. This would result in a significant improvement over the current situation.
JUAN PABLO NAVA
Commercial Director of NYCE
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.
ROGER BROWNRIGG
General Manager of Johnson & Johnson
The new administration should have an open dialogue with the industry. To tackle Mexico’s healthcare 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.
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
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
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 precipitous. The sale of generics was approved just a bit over 20 years ago due to efforts led by the Ministry of Health to decrease the costs of medical care. In recent years, their growth has significantly accelerated. While in 2013 sale of generics in Mexico amounted to US$3.8 billion, according to Deloitte, the consulting company forecasts sales to nearly double to US$6.8 billion by 2018.
This growth is not surprising when considering that these medications are on average 60 percent less expensive than their branded counterparts, according to COFEPRIS.
Behind the almost exponential growth of this market is the expiration of patents, a regulatory support entity and a growing acceptance on the part of Mexican patients. “Since 2010, COFEPRIS has approved 550 generic medicines,” says Julio Sánchez y Tépoz, Federal Commissioner of COFEPRIS. “Our work with generics is one of this administration’s greatest achievements, as these medicines cover 70 percent of Mexico’s main mortality causes and bring about a 60 percent overall reduction in costs. As more generics were introduced, their overall costs went down.”
Now, eight out of 10 medications bought into the country are generics. The OECD states that Mexico has the largest penetration of these medicines, with 84.1 percent of all medications in the country being generics. However, their reduced costs translate to smaller sales margins.
While the sale of generics is larger in volume, in costs it represents only 49 percent of the medicine market.
However, the generics segment is only expected to continue growing at a global level and reach US$381 billion by 2021, according to Zion Market Research. It is expected that part of this growth will be a result of the expiration of patents in the coming years. While innovative companies are finding strategies to expand patents, including filing additional patent protection for new routes of administration, new formulations or new uses of a previously known drug, around 26 patents are expected to expire in 2018, according to online news source MedCity News.
Among those set to expire are blockbuster drugs such as Roche’s Rituxan, Amgen’s Neulasta and Pfizer’s Lyrica and while generics or biosimilar versions of these drugs are not expected to be available immediately, it is only a matter of time before there is an alternative in the market. A recent report by Evaluate Pharma states that in 2018 a total of US$39 billion will be at risk due to patent expiration, although the report expects losses will be limited to US$26 billion.
Generics sales are expected to continue growing. Global generic sales are expected to reach US$84 billion in 2018, according to EvaluatePharma, and hit US$114 billion by 2024.
Source: Evaluate Pharma, May 2018.
Generics Total
Source: Evaluate Pharma, May 2018.
COST-CUTTING THROUGH OTC s
While generics bring significant savings for patients, the Association of Over-the-Counter Manufacturers (AFAMELA) proposes a different cost-cutting initiative: letting individuals manage their care as they see best if only in the cases of simple, common diseases, explains Ricardo Ramírez, Executive Director of AFAMELA.
In early 2018, the association indicated that a total of 15 million Mexicans visited public sector doctors unnecessarily and suggested that promoting the use of OTC medications for ailments that can be easily diagnosed would have saved the public sector a total of MX$43.5 billion.
With about 1,200 different OTC brands, the country has the second-largest market for these products in Latin America. “The OTC market is growing not just in brands, but also in the presentation of different products,” says Ramírez. These products also fill a market niche as they can be bought at convenience stores, such as OXXO, 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 by the second half of 2018,” says Rodrigo Puga, President and Country Manager of Pfizer Mexico.
DERMOCOSMETICS: MORE THAN JUST AESTHETICS
Beauty and dermatological care are not insignificant matters. Valued at US$532.4 billion in 2017, the cosmetics market is expected to be valued at US$805.6 billion by 2023, according to OrbisResearch. It is also expected that this market growth will be driven by an aging population concerned about the prevention of skin
damage, age spots and wrinkles. In Mexico, 79.2 percent of the population uses some type of cosmetic product, according to CANIPEC. Between 2016 and 2017 the personal care industry grew by 7 percent, says Carlos Berzunza, Director General of CANIPEC.
However, the Mexican cosmetics and skin care markets are still behind others in the region. “Mexico has a mature cosmetics market that continues growing but is still behind Brazil, Argentina and Chile in use per capita. We want the Mexican consumer to shift toward the use of cosmetics at a health, preventive treatment and dermatological level,” says Miguel Ángel Marín, CEO of Industrias Sintoquim.
Cosmetics can provide much more than an aesthetic effect since modern cosmetics incorporate products that can treat skin ailments and even help prevent diseases such as cancer due to sun exposure, especially if these products are used in line with guidance from professionals.
Global generics sales are expected to reach US$84 billion in 2018
A great deal still needs to be done to increase the penetration of dermocosmetics in the country. A major challenge is the current lack of dermatologists. “In Mexico, dermatology has a lower market penetration and is not part of the public institutes’ basic lists. The country needs more dermatologists; now, Mexico graduates about 40 dermatologists per year and the country has approximately 3,000 in total,” says Corrado de Gennaro, General Manager for Mexico and North Cone Latam for Galderma.
PERSONAL CARE: THE FINAL FRONTIER FOR HEALTHCARE
CARLOS BERZUNZA Director General of CANIPEC
Q: CANIPEC groups companies in the personal care and household products industries. What impact do these industries have on Mexico’s economy?
A: Companies represented by CANIPEC improve the quality of life of the people and generate a significant indirect effect on the Mexican economy. In the last two years, the personal care industry has grown by 7 percent, while the household products industry reached growth of approximately 5 percent between 2016 and 2017. Regarding foreign trade, both industries represent a trade surplus since last year we exported more than US$3.4 billion and we imported around US$2 billion. Also, the member countries of NAFTA, the Pacific Alliance, the countries of Central America and, to a lesser extent, those of MERCOSUR are our commercial partners.
Q: Which products managed by CANIPEC have grown the most and how does the chamber help to maintain this growth?
A: The personal care industry enjoyed considerable growth in skin and hair care, followed by odor modifiers. CANIPEC supports consumers through campaigns that provide advice on the selection and purchase of hair care products, which also encourages the use of other categories that improve their quality of life.
Q: What specific actions does CANIPEC take to support informed consumption and good business practices?
A: We have three programs to promote social responsibility and conscious consumption. CANIPEC has taken the initiative to provide scientific information and thus expose the myths and prejudices that exist about certain products. Beauty and Wellness, our first digital campaign, encourages informed consumption regarding personal care. Our second campaign is called Taking Care of Your Home. It provides information on the use, content and benefits of household
The National Chamber of Cosmetic Products Industry (CANIPEC) brings together the main companies producing and distributing cosmetics in Mexico, such as Colgate-Palmolive, Avon, Jafra, Estée Lauder Companies and Unilever
products with the goal of improving the culture of reading product labels. The Cosmep Code, our third program, is a 14-principle code of self-regulation and advertising ethics designed to provide advertising advice to companies that collaborate with us.
CANIPEC believes advertising is a valuable communication and information tool for consumers and companies. For this reason, we provide assistance to companies on the use of endorsements, sustainability and environment, among other subjects. We want to change the behavior of consumers in Mexico so they choose the products that best improve their quality of life.
Q: How does CANIPEC work with regional and international mechanisms to promote export diversification?
A: We participate with the Council of the Cosmetics, Personal and Household Care Industry of Latin America (CASIC). In the framework of the Pacific Alliance, chambers of commerce, COFEPRIS, other regulatory authorities, CANIPEC and CASIC agreed to eliminate 92 percent of the technical obstacles for trading cosmetics. This protocol also includes a sectoral agreement that specifies better regulations for the cosmetics industry. The next step is to follow the same path for the home care industry. CANIPEC is in the process of presenting a written and joint statement to the representatives of the Pacific Alliance regarding the industry in Mexico, Chile, Colombia and Peru.
Q: How does CANIPEC help SMEs develop artisanal products? What services does the chamber offer?
A: We have developed a virtual library called CANITECA that contains information on the legal and regulatory framework of the personal and household care industries to support SMEs entering the market. This virtual library also has information on protocols, authorities, workshops, news and publications related to both industries. We provide companies with information about changes in regulations and workshops to help them manage these updates and then follow up on them. CANIPEC provides an integral service to guide companies through the regulatory and legal framework.
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 pharmaceutical distribution?
A: Medicine distribution in the past depended mainly on large wholesalers, some of whom have disappeared in recent years. Instead, the so-called regional distributors have taken great strength and on the other hand the direct delivery of drug manufacturing laboratories to the large pharmacy chains, as well as to the supermarkets, has also changed distribution in recent years. Regarding to the medicine sales points, large chains and supermarkets are again the ones that grow and, in contrast, independent pharmacies have decreased their participation in a constant way for the last years.
Q: How is the generics market growing and what does it represent at this point?
A: Eighty-five percent of all drugs sold in 2017 in Mexico were generics. According to Knoblock Group, the pharmaceutical sector sold a total of 985.7 million units valued at MX$156 billion (US$8.97 billion) between February 2017 and February 2018. During those 12 months, the generics market grew at a 3.9-percent rate. Although the total pharmaceutical market has approached US$15 billion some time ago, it has now been severely hit by the exchange rate.
Q: How has direct patient demand for generics evolved in recent years?
A: Consumers are much more aware of the benefits of generics and are beginning to request them from their doctors. All generics meet the requirements of quality and efficacy, so if a patient changes from one manufacturer to another the result will be the same. Pharmacy chains usually have two or three suppliers of the same medication and can change it occasionally so patients can find products from different manufacturers.
Q: How has the perception of generics changed among doctors? How can these professionals support the sector?
A: AMEGI informs doctors on the benefits of generics, for which we are developing workshops together with COFEPRIS. For instance, at the beginning of 2018,
we launched a workshop on regulations related to the advertising of medicines with the aim of clarifying the doubts that our members may have. Considering COFEPRIS’ experience in the area, the council has allowed authorized parties to begin evaluating advertising materials generated by the pharmaceutical industry. Doctors were initially reluctant to prescribe generic medications, but we have provided them with enough information to change that initial hesitation.
Q: Considering the strong competition in the generics market, how can companies differentiate themselves?
A: Companies can differentiate themselves by continuing to manufacture quality products and present them attractively. Other differentiators can be customer service, providing consumers clear information on the product they are acquiring and teaching salespeople how to properly introduce the product and the benefits these provide to patients.
Q: What are the main international issues that AMEGI is lobbying for?
A: AMEGI is part of International Generic and Biosimilar Association (IGBA) and brings the operational principles from this international organization into Mexico. Canada, the US and Mexico, which are the three pillars of the organization, are concerned about the potential outcome of the NAFTA renegotiation, as current talks have not addressed IP protection, data exclusivity or patent timelines.
We are also participating in other international agreements. With Europe, we are addressing topics concerning IP and other regulations for the CPTPP, which showcases the region’s openness toward Mexico. Monthly meetings of this group allow us to keep on track.
The Mexican Association of Generics (AMEGI) is a private organization created in 2002 that brings together six generics manufacturers operating in Mexico: Allen, Apotex, Hormona Laboratorios, Medi Mart, Randall Laboratorios and TEVA
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?
A: Since I took this position over four years ago, we have grown our sales in Mexico 70 percent and Apotex ranks fourth in units in the subsegment of generic drugs. In the overall market, we are 15th for units sold. The company’s performance is good and we are seeing growth in the double digits in the recent years.
Q: Last year, you opened Apopharma, a new division. How is this new project progressing?
A: Apotex has already launched medications for conditions related to the central nervous system and this year we will continue with new drugs for analgesia and cardiology. Mexico is an atypical market for Apotex, because its pharmaceutical market and medical profile have very particular characteristics. The country has acute diseases that are present in developing countries and it is beginning to present the chronic-degenerative diseases that are seen in more developed countries. Our strategy with this new division was to first consolidate its presence in the market and then start growing to become a leader in chronicdegenerative drugs. The growth rate of Mexico’s population pyramid is trending older, which has created an opportunity for Apotex to bring its expertise from other countries into the Mexican market. Apotex is prepared to embrace both sides of the market by diversifying its products, building stronger relationships with the government and consolidating its brand.
Q: How does Apotex use its position in North America to its advantage?
A: Apotex is present in 115 countries, of which Mexico is a strategic key for medicine manufacturing. We have two raw material plants here and the active pharmaceutical ingredients (APIs) in Mexico have proven to be highly reliable for Apotex’s drug manufacturing process. Our
Apotex is the largest Canadian-owned pharmaceutical company, with over 10,000 people employed worldwide in its research, development, manufacturing and distribution facilities. The company produces around 300 generic pharmaceuticals
company enjoys the benefits of having invested solidly in the North American region and this allows the three countries to complement each other in achieving Apotex’s goals.
Q: What actions is Apotex taking to maintain its competitiveness and growth, given the change in presidential administrations?
A: In times of electoral change, strategies should be more clearly and transversally developed. The health industry has been waiting for a reform, but this has not happened. While Mexico not only must expand its coverage to improve access to health, it must also address the conditions in the industry, because there is a gap and a fragmentation across different components of the health system. Apotex has approached the government to prioritize the health industry and health system.
Q: How is Apotex preparing to face the possible outcomes of the NAFTA renegotiation?
A: Apotex is of Canadian origin, it has a strong position in North America and its first market is the US. For this reason, what happens with NAFTA is of vital importance for the development of our business strategies and models. Under a positive scenario, Apotex would benefit from having a good commercial agreement with the US and Canada. We think the commercial relations in the region will be maintained and pushed forward, more in the case of the US, where there is a shortage of medicines and where the health sector is highly relevant. In the worst case, if NAFTA goes down, Apotex has the geographic and commercial tools to find a positive path to continue positioning itself.
Q: How has Apotex’s Latin America expansion strategy evolved over the last year?
A: Apotex’s main internationalization strategy is to expand 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 expansion continues in the Andean area mainly in Colombia, but it has been delayed because of climatic type IV zone requirements that created obstacles for the availability of some products in the region.
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. Grupo Bruluart, a Mexican pharmaceutical company, has learned to respond and adapt to any market fluctuation to continue expanding its business, says Juan José Aguirre, Commercial Director of Grupo Bruluart. Aguirre explains that this flexibility is necessary not just for his company, but for any participant in the pharmaceutical market. “The pharmaceutical industry must continuously improve its processes, efficiency and quality.”
Grupo Bruluart specializes in the development, manufacture, distribution and commercialization of generics, food supplements and medical supplies. The group incorporates four companies: Brudifarma, Farmacias GI, Bruluagsa and IM Bruluart. “Supply and demand is cyclical as every two or three years new regulations require drug manufacturers to renew or update their infrastructure,” says Aguirre. He adds that these renewals can slow production, potentially leading to higher demand than supply. “Every six months we have to stop production to perform a comprehensive analysis and maintenance of every area of the plant. Both regulators and manufacturers must properly administer these renovations to prevent pauses in production.”
Despite cyclical fluctuations, Grupo Bruluart is focused on growth. The company launched five products during the second half of 2017 and the first half of 2018 as it reorganizes its portfolio. Aguirre explains that the group plans to finish 2018 with five more launches, including the antihistaminic desloratadine and combination drugs with ibuprofen and amantadine. “Our product portfolio is very broad, so we are reducing it by focusing on hormones, antihistaminics, multivitamins and respiratory medication. We also have strong pain management drugs, including ibuprofen, naproxen and diclofenac. Many companies are now prioritizing cardiovascular diseases but that market segment is becoming increasingly saturated. We decided to focus on other niches.” Grupo Bruluart had set itself a 10 percent growth goal in volume for 2018. However, Aguirre explains that the first quarter of 2018 was complex for the market. “We were hit by the short, dry and warm winter,
which meant reduced sales of antibiotics.” The company is seeing a recovery during the second quarter.
Changes arise continuously, albeit many are of the subtle variety, which is where new technologies can help, says Aguirre. “We are collecting all information from the market and the next step will be to analyze it using Big Data techniques. We have been evolving this area at a fast pace. In 2016, we did not have a department for business intelligence, and now we have several people doing that.” Grupo Bruluart, continues Aguirre, is also investing in technology to improve its distribution processes. “We are working with our existing client base to link our system to theirs to make distribution more efficient. The use of technology allows us to minimize missing products and to detect accurate trends early. For instance, our technology allowed us to see how product stock diminished due to last year’s peak in conjunctivitis and to replace these products as soon as possible. There is still significant room for growth as these statistics are developed based on historic data of which we do not yet have enough.”
Incorporating these technologies and collecting information are ongoing processes but Aguirre expects the company to improve its logistics distribution, address supply gaps before they happen and react faster to unexpected phenomena, such as earthquakes and hurricanes. “During natural emergencies we have often noticed that we have stock of a product far away from the area where it is needed. We are certain that an appropriate use of technology will minimize these problems.”
The company had planned to expand to the US but the uncertain relationship between Mexico and its northern neighbor have put a pause on those plans. “We put an expansion into the US on standby and are now focusing on other markets in South America, including Colombia and Peru. We expect to be able to enter those two markets in 2019 with high-volume products that have lower profit margins but which are still higher than in Mexico. We are also focusing on the Mexican market as we had problems to fully supply it during 2017 and early 2018.”
BIOSIMILARS TO UNDERPIN FUTURE SUCCESS
MARIANO DE ELIZALDE CEO of Sandoz Mexico
Q: One of Sandoz’s goals is to reach 1 billion patients. How close are you to that objective?
A: This is a global goal. In 2015, we reached 500 million patients and with the growth we are experiencing we will reach our target of 1 billion patients by 2030. Sandoz had a great 2017, both globally and in Mexico, and as we continue to present innovative proposals in all markets, we will keep expanding. Our mission at Novartis is to offer high quality at affordable prices.
Q: What role does Mexico play in the company’s global strategy?
A: Emerging markets are key to Sandoz’s strategy. Latin America offers many opportunities and within this region, Mexico is the second-most important market for us after Brazil. Due to Mexico’s macroeconomic conditions, its strategic location and its market opportunities, the country represents the most interesting market for both Sandoz and Novartis. It was selected by Grupo Novartis as the location for all back office services for the Americas.
Q: What are the most in-demand therapeutic areas in Mexico?
A: In retail, we focus mainly on respiratory and cardiometabolic health and antibiotics, but we also have an important hospital line. Our biosimilar products are world leaders and in Mexico we were the first company to have an approved biosimilar product under the new NOM-257. In 2017, we launched an oncology line and in 2018 we entered HIV. We believe that there is great opportunity in Mexico for high-quality products.
Q: What niche therapies are a priority for Sandoz?
A: For some years, biological products have been oriented to different niches. for this reason, increasing the number of biosimilar products is one of the pillars in Sandoz’s future.
Sandoz is a division of Novartis dedicated to the production of generics and biosimilars. It was launched in 1996. Sandoz manufactures generics for areas such as dermatology, transplant medicine, cardiovascular systems, CNS and hormone therapy
We have launched two biosimilar products in Mexico: an adjuvant therapy for chemotherapy and a growth hormone, but our plan is to launch five biosimilar products in the next four years in different therapeutic areas, such as psoriasis, rheumatoid arthritis and oncology.
Q: What are Sandoz’s plans in terms of research and manufacturing in Mexico?
A: Our biggest investment in research is in clinical studies of biosimilars and on bioequivalence studies for generic products. In 2016, we invested US$2.5 million. However, we believe that it is possible to do much more than what we are doing in clinical research conducted in Mexico, a country that has great potential and capacity to take on more research opportunities. In manufacturing, Sandoz’s strategy is to focus manufacturing in large specialized centers, so manufacturing here is not part of our strategy, although we have a small plant in Mexico that makes packaging and performs quality control.
Q: Sandoz is partnering with Biocon to manufacture and commercialize biosimilars for immunology and oncology. What are your goals with this alliance?
A: The purpose of this alliance is to expand our portfolio of biosimilar products. Sandoz is a leader in biosimilars in the world and has the largest catalogue of this type of product in the market. We seek strategic alliances with other companies that can help us strengthen our portfolio.
Q: What is Sandoz’s strategy to compete in the generics market? What other business options exist to diversify your investments and income?
A: In Mexico, as in the rest of Latin America, there is a strong national generic industry with a significant market share; however, I think there are still many opportunities, 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 a value proposition that complies with the demands of each country. Sandoz has decided where to establish itself: biosimilars, oncology, HIV, high specialty and the retail segment.
STRATEGIES TO ADDRESS LIMITED ACCESS TO CARE
EFRÉN OCAMPO
President of Grupo Neolpharma
Q: What market niches is Grupo Neolpharma targeting?
A: We are planning to introduce pain medications, which are relatively little used in Mexico because there are very few products available to treat intense pain, an ailment that greatly diminishes a patient’s quality of life. A common example is terminal cancer, which causes great suffering. These patients require very powerful analgesics, mostly opioids. However, prescriptions for these medications are low because doctors are reluctant to prescribe them. There also are few opioid providers in Mexico, which makes these medicines difficult to find. To address this, Grupo Neolpharma has developed an online pharmacy that can supply these medications. Access to opioids will be safe and controlled to prevent abuse and our company is closely working with authorities to promote their safe use. If their consumption is not controlled, they can be used in a recreational way. Even so, Mexico is far from the prescription opioid abuse that is affecting the US.
Q: How is Grupo Neolpharma addressing Mexico’s gaps in access to care?
A: We must offer services and products in line with Mexico’s epidemiological profile, which varies depending on the population’s age, gender and location of residence. Grupo Neolpharma’s role in addressing gaps in access to care is to increase the availability of high-quality products. We are now offering 275 molecules in 1,200 dosages. Within the next three years, we will increase our capabilities by 50 percent mainly in sterile products, which will address areas that are not currently being covered.
Universal access to care has been an important goal for Mexico but achieving it has been a challenge. The main problem is the fragmentation of the public healthcare system, which leads to duplication of services and gaps in access. It is necessary to unify these systems or to give patients the option to receive care at any institution.
Q: How is Grupo Neolpharma adapting its research lines and product offering to Mexico’s changing epidemiology?
A: Since the creation of Psicofarma, our first company, we have focused on chronic diseases at all ages, from diabetes
to depression. Following this vision, our core expanded from psychiatry to cardiometabolic diseases and chronic disease-related pain. We are now analyzing an entry into other therapeutic areas as Mexico’s population is becoming increasingly older thanks to the successful fight against infectious diseases.
Q: Which new players can support the sector to increase access to care?
A: Pharmacies can play an important role in increasing access to care, since they now generate the equivalent of 70 percent of medical consultations performed by IMSS, especially in primary care. On many occasions, patients prefer to visit a pharmacy than go to IMSS, which means that IMSS is buying less medication for primary care patients. If patients pay their medication out of pocket, they do not take advantage of the contributions they make to IMSS through their taxes. It is necessary to study this phenomenon and adapt to it. Supply channels for medicines are changing and the sector needs to adapt to these changes.
Q: What is the scope of Grupo Neolpharma’s internationalization strategy?
A: Grupo Neolpharma has enough capacity to supply the entire country and we have the capabilities and quality to compete internationally. We now have a plant in Mexico that is only being used to 66 percent capacity.
During the past five years, Grupo Neolpharma has grown at a double-digit rate, which led us to build more manufacturing plants. Our new plant for injectables, which will have the capacity to manufacture 450 million units per year, will target both the national and the international markets. Grupo Neolpharma works to international standards and that will facilitate the exportation of our products.
Grupo Neolpharma is a Mexican pharmaceutical group that incorporates three companies: Psicofarma, Neolpharma and Alpharma. While the company has several research lines, it focuses on the production of high-quality generics
CUERNAVACA: CORNERSTONE FOR MANUFACTURER’S FUTURE STRATEGY
GURULINGA KONANUR Director General of Hetero Mexico
Q: How do you measure Hetero Group’s market penetration in Mexico?
A: In Mexico, we are predominantly a B2B player in APIs and the finished products segments so it is hard to measure our market penetration, the market share or to come up with a 100 percent predictable sales forecast. What influences our market are government tenders and the performance of our partners in relevant segments. For instance, 2017 was a good year as some of our clients outperformed and some of our important clients got major shares in government tenders, which benefited us indirectly.
With presence in over 120 countries, Hetero holds 30 percent of the global retroviral market
The year for us was one of consolidation, especially after the challenges we faced in 2016. We have very positive expectations for 2018 but it depends on the performance of our partners and clients.
Q: Hetero Group is completing a plant installation. What products will be produced here?
A: We had a plant construction in process in Toluca but we decided to move the project to Cuernavaca since it was more appropriate for our business. Toluca was a greenfield project, which would have taken a significant amount of time to set up, while there was an appropriate existing plant in Cuernavaca that we could adapt to suit our needs.
We are still in the process of deciding which products and lines will be manufactured here. Hetero Group is vertically
Hetero Group is an Indian generics manufacturer present in 120 countries that specializes in antiretroviral therapy drugs for the treatment of HIV/AIDS. Hetero Group has over 20 years of experience in the sale of APIs, generics and biosimilars
integrated and we are considering product lines that will complement our existing portfolio including oncological, biotechnological, injectables and niche products.
We see great opportunity in the biotech and injectables segments. There are not many players with strong manufacturing capabilities for high-quality, advanced biotechnological products and the same holds for general injectables, making these an interesting market to enter. We are also exploring other niche segments or products lines.
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 through the hard work of our sales team.
Q: What must be done to address the main medical issues in Mexico?
A: Chronic diseases, such as diabetes, cardiovascular, central nervous system and cancer continue to plague the Mexican population. These conditions require the continuous use of medication throughout a patient’s entire life. Authorities should increase the offering of medications available to these patients to give them several therapeutic alternatives.
Q: How do you expect Mexico’s changing political climate to impact the pharmaceutical sector?
A: We hope the change in administration will not alter the status of the pharmaceutical sector, as tender processes 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 is severe exchange-rate fluctuations. For instance, the political situation caused by the US presidential election brought about significant fluctuations in the exchange rate that directly hit our market and imports.
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 research in Mexico. How close are you to the development of the first genomic drug in the country?
A: Landsteiner is about five years away from creating the first genomic medicine to treat obesity. It is very complex research because we have to consider different markers including diet, activity, clinical history and other vascular risks in each person’s profile. For us, it was a solid step for WHO to consider obesity as a disease because more research opportunities have opened up as a result. We are developing Phases I and II in Europe and then will move on to Phase III with clinical trials in Mexico. We are also working on other treatments for diseases such as colon cancer and Alzheimer’s.
Q: In 2016, you changed your business model to emphasize sales to the private sector. How are your sales divided? What are you doing to diversify?
A: We reorganized several departments to comply with our new business model. Before that, 90 percent of our sales were with the public sector, so we relied on bids. This year, we are close to achieving our goal of having 30 percent of our sales in the private sector. Our plan is to strengthen our presence in the private sector and then jump into the export market. We have targeted regions where COFEPRIS is a recognized regulatory agency, such as South America, Central America and the Caribbean, to export over 18 products. We have seen high demand for biotechnological and other specialized products in the private sectors of those regions, especially in countries such as Guatemala, Colombia, Chile and Peru. Another strategy for diversifying our sales is exporting to Europe and the US. We are opening the production of a new medicine in Toluca that will meet the criteria stipulated by international regulators.
Q: One of your advanced research lines is related to obesity. What impact does this research have on your activities in Mexico?
A: Our research will have a great impact, not only in Mexico but throughout the world. The history of medicine has an herbal origin that later evolved to the analysis of microorganisms and biotechnology. Today, through genomic
medicine we try to understand which enzyme, protein or modulator affects the cellular processes that cause diseases. The point is to stop a disease at its origin. Landsteiner is working on three lines: Alzheimer’s, colon cancer and post-stroke therapies to regenerate ischemic cells. Also, we have plans to investigate macular degeneration, Sjogren’s Syndrome and Parkinson’s, among others.
Q: In 2012, Landsteiner ranked in the Top 10 of the private sector generics market. What percentage of your sales do generics represent?
A: We are reaching our goal of 30 percent in generics sales to the private sector and the scenario looks more positive than before because we are winning favorable public tenders to sell our products. We have won over 90 percent of the tenders we have participated in, so the path for this year is looking good.
Q: One of your objectives is to register 15 medicines a year with COFEPRIS. Do you expect to achieve this goal in 2018?
A: We are focusing on the production of the most profitable products but we continue with the same list. Our goals changed due to the modifications imposed by COFEPRIS, so we had to adapt. We expect to increase our profit margin by focusing on the most profitable products we have. Of the 15 initial medicines that will be registered this year, we will be targeting our Top 3 and continue from there.
Q: As the only Mexican company doing genomic research, what challenges do you face and what alliances have you entered?
A: Landsteiner has been working in genomics research related to obesity for five years and we are in Phase I. We hope to move on to Phases II and III in another five years. We have the financial support for our research and part of the process will be done with outsourcing companies.
Landsteiner Scientific is a Mexican pharmaceutical company. It is focused on the manufacturing, distribution and commercialization of biotechnological, genomic medicine, injectables and oral solids
COMMERCIAL ASSOCIATIONS
PROVIDE BETTER BALANCE IN THE MARKET
BENJAMÍN VEGA
Commercial Director of Allen Laboratorios
Q: After 40 years, what are the major lessons Allen Laboratorios has taken away from the manufacturing of pharma products?
A: The business model and the structure of the company have improved over the years thanks to greater clarity in the regulations to develop pharmaceutical products. In the last 10 years, we have renewed all our manufacturing equipment to boost our growth and improve our competitiveness. We want to revolutionize our laboratory with greater investments in technology, new business models and new ways of manufacturing our products. Allen Laboratorios is implementing concrete measures to consolidate itself as a competitive laboratory and become a leader in the national generics market. We are strongly committed to training our staff to maximize productivity and increase our expertise. Allen Laboratorios wants to couple training with leadership skills because our vision is to go beyond knowing how to operate a machine. We also want our employees to understand how to lead a team.
Q: How does Allen Laboratorios stay competitive in the generics market?
A: We participate actively and directly with COFEPRIS and other associations, such as AMEGI, CANIFARMA and DINAMEGI, so our impact in the generics sector is much greater. Our participation with associations and authorities is oriented to providing representativeness, but also to having a voice in the pharmaceutical sector. Allen Laboratorios also invests heavily in the training of its personnel to strengthen the monitoring of COFEPRIS' normative guidelines. All our strategies are oriented to providing a high-added value to the client according to regulations. It is important that both the smallest labs and those with national stature can participate in the market and that they have weight in the industry’s decisionmaking process.
Allen Laboratorios is a 100 percent Mexican manufacturer of pharmaceutical products with over 40 years of experience. The company has four business lines: Allen Laboratorios, SolaraF, AllEffective and Condoms Vive
Q: What is the penetration that Allen Laboratorios has in the pharmaceutical market with its therapeutic lines?
A: Allen Laboratories has two star products: paracetamol and gerial B-12. The latter is a supplement to improve the deficiencies of the B complex or iron citrate that has registered double-digit growth year after year. In the case of paracetamol, our brand is key to offer a differentiation factor and our quality standards are recognized by the government as a reference for the industry. Allen Laboratorios invests heavily in raw materials of the highest quality, because regardless of currency changes, we can control the production process and remain competitive. These conditions make products like our paracetamol market leaders.
Q: What recommendations would Allen Laboratorios make to IMPI and COFEPRIS to improve fair competition among generics and patented medicines?
A: Allen Laboratorios believes in promoting fair competition where generics are not left behind. Greater collaboration between the generics and patented sectors will result in greater benefits for the patient and the market. 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 these two players. We need to create real commercial alliances between generics and patents to promote collaborations that go beyond a merely transactional matter of knowledge and technology. The patented segment should collaborate more with the generics segment to create better access and availability of medicines.
Q: What impact has innovation and technology had on Allen Laboratorios?
A: Technology is key to our operations and was fundamental 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 medicines to become fully automatized. We want our employees to go from being manufacturers to supervisors with operational knowledge. This change has benefited us and now we are more profitable.
LOCAL COMPANY AIMS TO GROW WITH UNIQUE STRATEGY
IÑAKI DE IZAURIETA CEO of Mavi Farmacéutica
Q: Where does Mavi Farmacéutica fit in the Mexican pharmaceutical ecosystem?
A: Mavi Farmacéutica focuses on the sale of low and medium volumes with prices in the medium to high range. In terms of price, pharmaceuticals can be classified in descending order as: patented medicines, branded products with expired patents, branded generics and pure generics. Our niche is branded products and branded generics, which is a comfortable place for us.
Q: How are Mexico’s epidemiological changes influencing your market strategy?
A: We are also focusing on antibiotics and anti-flu medications, two product lines that focus on very common diseases in the country. We also have medicines to control blood sugar, cholesterol and triglycerides, which are our most profitable products. Taking into account Mexico’s epidemiological challenges, we will continue to focus on products related to diabetes. We hope to introduce six or seven new APIs or combination products for blood sugar and cholesterol management in the next couple of years.
Q: How is Mexico’s pharmaceutical market changing? Where does Mavi Farmacéutica see itself in this evolution?
A: The market for basic pharmaceutical products, including pain killers, anti-inflammatories, antihistamines, antibiotics and many others, has been undergoing a radical change for the past few years as Big Pharma introduces its own generic lines to compete with other brands specialized in generics.
The Mexican market has changed over the past 20 years from patented medicines to generics and branded generics. The medical devices market has also grown significantly in recent years and has become an attractive business opportunity. Today, Mavi Farmacéutica sees a large business opportunity in medical devices.
Q: Which market niches has Mavi Farmacéutica found attractive in the local market?
A: We are focusing on pain-control products for the central nervous system, such as next-generation pain killers. Antibiotics, diabetes control, sexual health, anti-depression and anti-cholesterol products are our main niches.
Q: What are the main benefits that companies obtain when associating with Mavi Farmacéutica?
A: Mavi Farmacéutica has almost 30,000 points of sale in 32 states, including pharmacies, hospitals, medical centers, clinics and self-service stores. Our goal is to reach 20,000 more points of sale. We also attend and give service to over 15,000 doctors.
Q: How do you divide your sales among the public and private sectors?
A: 95 percent of our sales target the private sector and the rest goes to the public sector. This is a healthy percentage for us, although we might consider increasing our sales to the public sector depending on the medical devices we end up importing into Mexico.
We target our products to the private sector because the time period a product is successful in this sector is much longer than in the public market.
Q: How is Mavi Farmacéutica using its strong position in Mexico to expand abroad?
A: At this point, we are selling our products in Costa Rica and Guatemala and we look forward on registering products in Colombia. We are seeking FDA approval to enter the US market, where we will focus on California, Oregon and Washington State. In these states, our margins will be wider and we will be able to offer extremely competitive costs. Medication prices there are between 40 and 80 percent higher than in Mexico.
Mavi Farmacéutica is a Mexican generics manufacturer with 65 years of experience. The company manufactures products for pain management, gastroenterology, antibiotics and antihistamines, among many others
INVESTING NOW TO REAP FUTURE BENEFITS
MANISH MUTHA
Vice President of Micro Pharmaceuticals Mexico
Regulations in Mexico are holding back international companies like India’s Micro Labs that have thrived at home and globally but which have run into roadblocks in Mexico, says Manish Mutha, Vice President of Micro Pharmaceuticals Mexico. “There are several market restrictions that prevent Indian products from participating in government tenders. One problem is that Mexico does not have free trade agreements with India, which hurts patients, who cannot access the necessary medicines.”
Founded in 1973, Micro Pharmaceuticals manufactures active principal ingredients and generic pharmaceuticals. It focuses on developed as well as emerging markets and has presence in 30 countries, including the US, UK, Germany, Russia, Ukraine, Vietnam, Sri Lanka, Dominican Republic, Uganda, Nigeria and Kenya. To compete fully in the Mexican market, companies must adapt, says Mutha. To that end, Micro Pharmaceuticals is developing a long-term strategy that Mutha hopes will lead to the construction of its own manufacturing facility in the country.
Micro Pharmaceuticals Mexico only sells to the private sector, so its market volume in Mexico is still small. "We believe that we must continue this line of work in order to enter the public sector in the long term. We are building our company’s image and positioning our brand,” says Mutha. “We want our clients to associate Micro Pharmaceuticals with quality products.”
Despite the restrictive conditions, Micro Pharmaceuticals is growing in Mexico. Its sales in 2017 increased 30 percent, a rate that Mutha says was a consequence of the great number of patients who are using their medicines. “Micro Pharmaceuticals is now the only distributor in Mexico of a number of products in generic space. This places us in an advantageous position in the market.” Its positive results are also leading Micro Pharmaceuticals to introduce more one-of-a-kind medicines into the country. “While our business is supported by regular-use products that are sold in high volumes, such as amoxicillin, our goal is to bring to the Mexican market molecules including high-technology products and drug combinations.” The company, however, faces a complex situation in the country. “The devaluation
of the Mexican peso is complicating the sale of high-quality products as they become increasingly expensive to import and on the other hand due to price erosion, which in our case has ranged between 10 and 12 percent,” Mutha says. “We are also dealing with high-dollar costs and we had to stop selling some products in Mexico because they became too expensive to import.” Mutha points to Losartan as a medicine that became unfeasible for sale in Mexico as the cost of manufacturing and transporting it rose above its market price.
Micro Pharmaceuticals has 19 registered products in Mexico but it plans to launch a new ophthalmology line in 2018. “In the Mexican market there are few specialty producers that have FDA certification, which we do. There are also very few companies in the country that manufacture ophthalmological products.”
Looking ahead, the company believes that it will eventually require manufacturing capabilities in the country to eliminate the high transportation costs that significantly reduce margins. Mutha says that the plant would manufacture in Mexico and take advantage of the country’s ideal location to export 55 percent of its production to the US. However, external factors are complicating the company’s agenda. “This plan is on hold until we increase the number of products registered in the country and the renegotiation of NAFTA is completed.” The uncertain terrain has led Micro Pharmaceuticals to begin considering the possibility of manufacturing in the US, although Mutha remains optimistic for a successful NAFTA outcome. “Ideally the market between the two countries will remain as open to commerce as it is now, allowing us to manufacture in one country and sell to the other.”
With the plant on hold, the company will focus on consolidating its new ophthalmology line, which will serve as a learning curve for Micro Pharmaceuticals’ eventual entry into cardiology, psychiatry and diabetes, says Mutha. “We are confident that 2018 will be an excellent year, since during the first three months we had already met our goals. Micro Pharmaceuticals has operated in Mexico since 2005 and we are committed to staying for a long time.”
FIRST GOAL: MAINTAIN A HEALTHY MICROBIOTA
AUDE BOCLÉ General Manager of Biocodex
Q: Biocodex is a pharmaceutical specialized in microbiota. What business opportunities have you identified for this area in Mexico?
A: Five years ago, products in the microbiota segment popped up thanks to the growing interest and the scientific research that was carried out. Today, this domain is among the most researched topics in health sciences. Biocodex has operated in Mexico for three years and we are working to reinforce our presence in the private market, which covers 30 percent of the population.
Q: What are the benefits of biopharmaceuticals and how can these types of drugs contribute to Mexican epidemiology change?
A: Microbiota refers to the huge number of micro-organisms that live in the human body, especially in the intestine. Therefore, maintaining a healthy microbiota helps prevent the development of infections, allergies, behavioral and metabolic problems, such as dyslipidemia, diabetes and obesity. If children are born by normal delivery, are breastfed and their microbiota properly cared of from an early age, they will have fewer possibilities of developing allergies, infectious diseases or metabolic syndrome. Children born through a C-section already have a footprint that will make them more prone to these conditions. In these cases, biopharmaceutical products can intervene to prevent those conditions. The main product for the company is Floratil. We also offer Gotalgic, an analgesic for otitis.
Q: How do you evaluate the access to biopharmaceutical products in the public and private sectors in Mexico?
A: Biopharmaceutical products require special consideration and Mexican regulation has just started to grasp the specificities needs of this category of products. During the last National Congress of Regulatory Affairs, Biocodex Mexico had the opportunity to address this topic and talk about the scientific criteria for selecting a probiotic and the importance of protecting the production process of probiotics to prevent the microorganism from suffering mutations during the process. We are pushing to achieve a stricter regulation on these types of products.
Q: What is the main objective of the Biocodex Microbiota Institute? What impact will this project have in Mexico?
A: Over the last several years, there has been a growing interest and much research in the role and importance of microbiota. In this context, the Biocodex Microbiota Institute is one of the few online platforms solely focused on microbiota. It has two purposes. First, provide information to healthcare professionals. Second, inform the general public about microbiota, such as why it is important and how it impacts health. The institute is also active on social networks to raise awareness on microbiota among the general public.
Q: What is the role of the Biocodex Microbiota Foundation in the general strategy of Biocodex? What potential has the foundation identified in the Mexican research ecosystem?
A: The foundation is supporting microbiota research through ongoing annual grants. Biocodex’s goal is to launch an international as well as national annual call for projects to promote innovative scientific research that explore the interactions between microbiota and various pathologies. The evaluation and selection of the winning projects are carried out by independent scientific committees. The scientific board in Mexico is directed by Solange Heller, a pediatric gastroenterologist who is in charge of selecting the group of experts who will evaluate the research projects.
Q: Biocodex seeks to strengthen its expertise in gastroenterology. What are your plans in this area?
A: Today, Biocodex’s core business is definitely related to the microbiota domain with an expertise in the intestinal microflora. The objective is to reinforce our offer in this field targeting other types of indications or diseases in which human microbiotas can be impacted. We are also evaluating the possibilities of establishing alliances with international companies that operate in Mexico.
Biocodex is an independent multinational pharmaceutical company founded more than 60 years ago and specialized in microbiota. It works in pain, neurology, rheumatology and otolaryngology in more than 100 countries
PRIVATE MARKET, LAND OF OPPORTUNITIES
JOSÉ LUIS ROJAS Vice President of Ultra Laboratorios
Q: Ultra Laboratorios has its own business line, manufactures products and works for the government. In which area is the company most focused?
A: Right now, our capacities are largely focused on supplying the public health system. But, the supply of great quality products at affordable prices to the private sector is growing stronger every day and it is becoming an important part of our business model.
The government’s health budget is not growing as fast as needed. For instance, while other OECD countries spend on average around 9 percent of their GDP on healthcare, Mexico only spends 6 percent. For that reason, the private sector is beginning to have a stronger presence.
A good example of this is the introduction of doctors in pharmacies. These clinics usually work only with generics and COFEPRIS has made significant efforts to ensure that generics comply with all necessary regulations and that their quality is comparable to those of the best brands in the world.
Q: What are the main differences between working for the public and private sectors?
A: They are entirely different. First of all, the private sector manages many private labels, so the same product must be split and labeled depending on its final destination. This makes the supply chain extremely important for those clients who are more interested in supply than pricing.
As COFEPRIS' guidelines are becoming the state-of-the-art of regulations, it is a great moment for the laboratories in Mexico to set the path for all Latin American laboratories regarding production of generics.
Q: What would you identify as the main areas of opportunity in a market with so many international companies?
Ultra Laboratorios is a Mexican pharmaceutical company founded in 2001 and focused on generic medications, including analgesics, anti-inflammatories, antidepressants, antibacterials and vitamins
A: We have found many growth opportunities, mainly because of increasingly higher prices for patented products, which are widening the price gap between generics and patented medicines. It is also very difficult for international laboratories to obtain the number of registrations similar to those of a Mexican laboratory to enter the generics market.
Ultra Laboratorios is extremely interested in expanding its presence in the private sector but to achieve this, the company needs to expand its manufacturing capabilities to increase its production speed and capacity. According to IMS Health, today we are between the second and the fourth pharmaceutical company in terms of units sold and value.
In 2018, we will complete the construction of a new plant in Guadalajara, which represents an investment close to MX$1 billion. Once we increase our production capacity, we can expand to the US and other countries. There are also significant growth opportunities in Mexico since generics represent only 8 percent of a total private market valued at US$13 billion.
Q: How are you investing in technology and innovation?
A: We are making a strong investment in our new plant by acquiring Italian and German equipment. These pieces are more expensive than their Chinese counterparts but they have better quality and performance and provide more long-term benefits.
Today our focus is mainly on solids but in the coming years we are looking forward to having a stronger position in antibiotics, hormones and solids.
Q: How are you adapting your product portfolio to address the rise of chronic diseases?
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 years ago to focus on having a strong presence in that market to take advantage of the opportunities that may arise due to the expiration of patents and to comply with all regulatory guidelines.
THE GRADUAL TAKEOVER OF LATIN AMERICA’S PHARMACEUTICAL MARKET
DAGOBERTO CORTÉS
Director General of Sanfer
Q: How does Grupo Sanfer maintain its operational efficiency considering the many companies that make up the group?
A: Grupo Sanfer is constituted by three different companies: Laboratorios Sanfer, Laboratorios Hormona and Morepharma. To make our budgets and operations more efficient, we gather all common services, such as human, legal and production resources. In this way, a single group performs all services, which allows us to reduce costs. On the other hand, we divide our portfolio into seven independent business units and each one has its own marketing, medical representatives, medical and market research division. We optimized our sales force so medical representatives only present products from their division. This simplifies our operations and allows medical representatives to become experts in their field.
Q: How does Grupo Sanfer contribute to the generation of new health solutions?
A: Grupo Sanfer performs R&D for the generation of added-value generics and we have patented some of our discoveries with the Mexican Institute of Intellectual Property ( IMPI). We do not invest in the development of new drugs but in technological development for the generation of new formulations, drug combinations and new delivery methods. In the latter case, we are researching new ways for medicines to be absorbed by the body. We have developed a pill that controls the absorption of dicloxacillin, an antibiotic that has to be taken every six hours. Our delivery system permits a controlled release of the medication over 12 hours. Thus, patients only need to take the pill twice a day.
We also generate new combination pills as about 95 percent of therapies for cardiovascular diseases and type 2 diabetes require several drugs taken simultaneously. This 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 diseases. For that reason, it is easier for them to adhere to the medication regime if its presented to them in a single pill instead of several. Our combination products have received
COFEPRIS’ approval as they have proven themselves to be safe, trustworthy and effective.
Q: How is Grupo Sanfer capitalizing on its existing capabilities to expand and what regions is the company looking at?
A: Our expansion strategy was to find key countries from which to reach the rest of the region. We entered Argentina after buying a company named Pharmadorf. This acquisition allowed us to penetrate the Argentinian market and take advantage of the company’s export permits for several European countries. In 2016, we opened Sanfer Chile, followed by Sanfer Ecuador. One year later we acquired 51 percent of Laboratorios Portugal, the second-largest pharmaceutical in that country, which had a broad product portfolio that included generics, OTCs and cosmetics and exports to Europe and Asia. For Central America we created Sanfer Panama, from where we manage all exports and businesses from Mexico to some countries in the region. We have representatives in Nicaragua, Honduras and El Salvador who receive all their products from Panama.
Having operations in Colombia, Chile and Peru allowed us to take advantage of the Pacific Alliance, which promotes exchange of workers and products across its member countries. Furthermore, Peru, Chile and Mexico are part of the CPTPP, which will allow us to export to Australia, Vietnam, Canada, Brunei and Japan.
Grupo Sanfer’s products are available in all the countries south of Mexico. Our priority is to consolidate the Central and South American market and, although we do not have a franchise in Brazil, we do sell products in the country. Brazil’s market is hard to enter but it is also the largest market in the region. For 2018, Sanfer’s main priorities are to consolidate its investments.
Sanfer is a Mexican pharmaceutical company that manufactures innovative medicines, generics, baby formula and veterinary and consumer products. The company is part of Grupo Inverka. Sanfer has four manufacturing centers
AN EYE ON GREATER AWARENESS OF CARE
PATRICK DEVLYN Director General of Grupo Devlyn
Q: Devlyn has more than 21 business lines. How are these lines structured and what growth areas have you detected?
A: We have different commercial formats that target different market segments. In addition, we have a B2B service through which we provide solutions for large stores that have made us responsible for their eyewear segment. Our core business is the optical segment: glasses, contact lenses, solutions and drops, but we have also developed other categories, such as clinics dedicated to performing corneal checks and transplants. Between 2003 and 2014, we were among the most important operators that worked with Seguro Popular for cataract surgeries. Recently, we have developed an audiology segment, a business that has shown triple-digit growth in the last three years.
Q: How has Devlyn contributed to the optical segment in Mexico since the company was founded?
A: Years ago, Mexico had a closed market and everything we sold we manufactured ourselves. As the country began to open up, we were able to bring to Mexico products of better quality and design and we started buying brands from international designers in the optical sector, such as Ray-Ban and Chanel. We then began to develop our own brand and we now have our own portfolio of products that offer design and quality. This category is now our house brand and represents more than 35 percent of our products.
Q: What milestones have illustrated Devlyn’s business growth over the past 82 years?
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 other major Latin American economies, the country exports more cosmetics than any other country in the region. To address the limited use of said products, it is necessary to first overcome self-proclaimed miracle products and low-quality, informal products, says Miguel Marín, CEO of Industrias Sintoquim.
“Mexico has a mature cosmetics market that continues growing, but is still behind Brazil, Argentina and Chile in use per capita. We want the Mexican consumer to shift toward the use of cosmetics at a health, preventive treatment and dermatological level,” Marín says. Sintoquim specializes in the commercialization of raw materials and specialties for the cosmetics industry, with a track record extending well over 40
years. “When it comes to cosmetics, we strive to continuously look for innovation and process renovation, while identifying and analyzing different trends and possibilities,” says Marín. The company made its mark through in-house manufacturing of cosmetics ingredients and changed its business model to introduce top-quality ingredients at competitive prices. “We do not sell ingredients only, we sell solutions.
Sintoquim’s future is not limited to profitability objectives. “We want to revamp our operational system, generate more business intelligence for improved decision-making and craft a stronger talent development plan with clearly outlined and value-adding training processes. When talking sales, we want to grow our numbers by 20 percent for 2018, and at least duplicate those numbers by 2023.”
A: As a family business, we are aware of the turning points that led us to grow. The value of hard work is the basis of our business and is reflected in the code of ethics that each member of the family and each employee follows. One of the most important milestones was the opening of a store in a Sears department store in Chihuahua. It was an absolute success and we continued to open Devlyn stores in cities such as Tijuana, Guadalajara and Monterrey. Another important milestone for us was the development of internal technology and manufacturing facilities to produce frames and crystals. We also adopted German technology for contact lenses that helped us grow much more than our competitors.
Q: How responsible are Mexicans when it comes to visual health? How often do patients meet their annual tests and acquire the products doctors recommend?
A: For Devlyn, health in Mexico is very important. As President of the Health Commission (CCE), I believe that in the public and private sectors there is sufficient awareness 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 should focus more on checking whether their children see well or not because vision issues can result in attention, behavioral and learning problems. There is also a lack of
awareness about the importance of performing an annual eye check. These tests can detect chronic diseases, such as hypertension or diabetes.
Q: How does Devlyn promote awareness?
A: A few years ago, we helped declare October sightawareness month. We use this month to promote awareness about visual health, using social networks and street campaigns, and invite people to take a vision test. In parallel, Fundación Devlyn focuses on providing a vision test to that part of the population that does not have access to this basic health services. In addition, we are trying to promote public policies related to prevention together with the Mexican Association of the Optical Sector. We need to work with the authorities to develop the national health system and to establish a patient-centric system. The main problem in the health sector is that institutions are saturated. In addition, the process for approving innovative products is very long.
Grupo Devlyn is the largest ophthalmology company and laboratory in Mexico. It manufactures and sells optical, solar and contact lenses. It was founded in Ciudad Juarez in the 1930s and has branches throughout the country
MORE ACTION NECESSARY TO TACKLE SILENT KILLER
CORRADO
General
Manager for Mexico and North Cone Latam for Galderma
Q: What areas is Galderma prioritizing in Mexico?
A: As an emerging market with a large population and low penetration in dermatology, Mexico is very attractive to Galderma. Over the last few years, Galderma has grown in double digits and above the market in most of the categories where it competes, a clear indicator of how wellreceived our products are in the country. Galderma has a strong presence in acne, rosacea, atopic dermatitis and psoriasis. We also play in the growing aesthetic field with a complete portfolio of fillers, bio-stimulants and toxins.
Q: What are Galderma’s strongest products in Mexico?
A: Galderma has three divisions: prescription, selfmedication and aesthetics. We have a predominant market position in the treatment of acne, rosacea, atopic dermatitis
and dermo-cosmetic cleansing and moisturizing products, as well as facial injectables, including neurotoxins and hyaluronic acid.
Q: Which new products will Galderma launch in 2018?
A: We are expanding our presence in the sun-care category, launching Cetaphil Sun and a Sculptra, a polylactic acid, an injectable bio-stimulator of collagen. The latter is one of the most innovative products in the market.
Galderma is part of Nestlé Skin Health. The company offers prescription and OTC medications and aesthetic and corrective treatments. Its medical solutions include Epiduo, Differin, Mirvasa, Soolantra, Benzac, Loceryl, Azzalure, Restaline and Sculptra
DE GENNARO
Alejandro Rodríguez Director General of Essilor Mexico
Elda Hernández Marketing Director of Essilor Mexico
Q: What is the size of the Mexican market for glasses?
AR: Vision problems are one of the biggest impediments in the world and have a deep impact on those who suffer from them. Visual health is often overlooked. Eye damage can be easily avoided with preventive measures. Approximately 50 percent of the global population needs corrective lenses and everyone would benefit from using protective glasses to avoid damage from the sun or from blue light.
It is estimated that 39 million Mexicans need visual correction and as the world leader of the industry, Essilor is committed to reach those Mexicans in need and improve their lives by improving their vision. However, access to visual exams and correction is still limited in Mexico.
Q: What are the main challenges Essilor has faced to penetrate the Mexican market?
AR: The Mexican market is highly segmented, with many low-cost options or unbranded products. In terms of brands, Essilor is the leader in Mexico. Governments and optical stores need to create awareness campaigns to teach people to take care of their visual health. Our goal is to improve the lives of people by improving their vision.
EH: The industry requires more professionalization as not all optometrists are fully trained to perform visual exams or even adapt more complex lenses, like progressives. There are few people that only learn how to operate the necessary equipment and perform very basic eye exams and thus, they cannot fully personalize lenses.
Q: How is Essilor increasing awareness about the importance of visual health?
EH: We increase awareness by promoting prevention. Among our initiatives there is a campaign hosted on the International Day of Visual Health, which will be on Oct. 11,
PREVENTION OFTEN OVERLOOKED WHEN ADDRESSING VISUAL HEALTH
Essilor is an international company based in France that manufactures and sells glasses and lenses. The company invests heavily in research and development and is currently operating in over 70 countries
2018. We also have signed several agreements with other companies and associations to promote visual health. For example, we are working with the International Automobile Federation (FIA) to promote safe driving through periodic eye exams.
Q: What new products is Essilor introducing to the Mexican market?
AR: Essilor invests about €250 million (US$290 million) per year in R&D. In 2018, we launched several products including Crizal Sapphire 360, a new anti-reflective coating that protects both from the front and back of the lens to reduce glare. Furthermore, it provides unmatched properties in terms of scratch resistance and transparency while being dust and water resistant. We are also launching Varilux X-Series, a unique progressive lens designed to provide natural vision at all distances to its wearers.
Q: Who are the ideal clients for these types of products?
EH: Varilux X-Series and Crizal Sapphire 360 are products from our premium line, so they are being offered to a midhigh income wearer. Varilux X-Series can only be used by individuals with presbyopia, also known as eye fatigue, which is increasingly common for those over 45 years of age. The best solution for these individuals is a progressive lens that allow individuals to see at any range. Traditional progressive lenses only allowed individuals to focus up to 45cm from their eyes, everything beyond that lost definition. Varilux X-Series provides an increased vision range between 40-70cm away, giving users clear visual definition at those ranges. This product is ideal for Generation X, which is now getting older, as they are heavy users of tablets, cellphones and computers. We estimate that about 1 million Mexicans fit this economic and age group.
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 room to incorporate high-quality products. We also aim to make the sector more professional through continuous training, an area that has been overlooked to this point but will result in many opportunities.
EMPOWERING CUSTOMERS TO MAKE BETTER DECISIONS
ANNE ENGERANT
Senior Vice President LATAM of
RB® Health
Q: How did the acquisition of Mead Johnson Nutrition change RB®’s operations?
A: The acquisition of Mead Johnson Nutrition led to a transformation within RB® worldwide. RB® has its roots and a long history in the production of home hygiene products, but it has refocused itself in the area of health with several acquisitions, including Sico and the OTC brands from Bristol Myers Squibb in Mexico. The acquisition of Mead Johnson Nutrition allowed us to further place a priority on health.
Q: Considering the wide variety of products you manage, what are your priorities for Mexico?
A: Mexico is an important country for us because it represents big growth opportunities in our core categories. One of our main priorities is our infant formula business due to its size, followed by Sico and OTC products. Actually, the portfolio may look diversified but there are a lot of synergies: RB® offers patients a wide range of products to improve their health and wellbeing. For instance, if a woman wants to avoid having children, she can use Sico condoms to protect her from unwanted pregnancy. If she decides to be a mother and for certain reasons she is not able or chooses not to breast feed, we offer a wide range of infant formula depending on the needs of the baby and can help her manage her baby’s fever with Tempra.
Enfamil, our infant formula, currently holds 23 percent of the market in Mexico with a wide variety of products to address different needs. But our competition in the country is not only with other brands of infant formula and powdered milk, we also share the market with nonspecialized milk, such as pure cow’s milk and sometimes even with coffee or soft drinks.
Q: How is RB ® incorporating innovation into its infant formulas?
A: It is not easy to innovate in this category, as any innovation requires years of deep research and development by our team of nutritionists, scientists and often several clinical trials to prove our good nutritional levels. Our source of inspiration is breast milk, which we recognize is the best
for the baby. We recently launched an exclusive formula that contains milk fat globule membrane (MFGM), which helps the development of the nervous and immune systems.
Q: What is RB®’s strategy to strengthen its OTC division and compete with generics?
A: The best way to compete against generics is to invest in innovation and introduce new molecules and solutions. For instance, in 2017 we introduced Graneodin F into the Mexican market. These pills for sore throats contain flurbiprofen, a unique derivate from ibuprofen with antiinflammatory and analgesic properties, the concentration for which had not previously been commercialized in the Mexican market. This product won COFEPRIS’ Innovative Solution Award.
We can also grow the market for OTC brands by encouraging self-care. For instance, we believe we have a role to play by helping the medical community explain to patients when it is better for them to avoid antibiotics. Many individuals are convinced they need antibiotics to deal with a common sore throat when more than 80 percent of these ailments are viral in origin and thus do not require antibiotics. Instead, it would be much better for the patient to take a medicine that treats the symptoms of a sore throat.
Q: Which areas of public health is RB® addressing?
A: Beyond the issue of antibiotic misuse on which we work at a global level, in Mexico we are creating an awareness campaign for Sico in which we educate young people on the proper use of condoms to protect themselves during sex and to avoid STIs and unwanted pregnancies. Teenage pregnancy (often among girls as young as 10 years old) is a growing problem in the country. We want to make condoms more accessible and help young people acquire them without shame.
RB® Health develops products for health and hygiene, including Clearasil, Dettol, Durex, Gaviscon, Mucinex, Nurofen, Scholl, Strepsils and Veet. In 2017, the company acquired Mead Johnson Nutrition to strengthen its baby formula division
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 providing glasses to those who need them is not as easy as simply manufacturing millions of glasses and distributing them, says Marco Machado, Founder and Director General of Augen, a Mexican family-owned company that began its operations by manufacturing lenses and gradually developed the technology to build everything necessary for their construction, from lenses to equipment.
“Every person requires lenses adapted to their eye-shape, since otherwise they run the risk of suffering gradual damage. With the wrong lens, individuals can be prone to headaches. Each race requires a different type of glasses,” says Machado, adding that some companies choose less expensive products at the expense of the client’s sight.
“Mexico has excellent doctors and specialists but there are not enough to meet all the needs of the population. Another problem the country faces is that its eyewear stores are not regulated. The market began to saturate 10 years ago with the arrival of Chinese products, which are cheaper but of lower quality. Also, Mexicans often prefer imported products even if the local ones are better. Lenses made in China are often made assuming that the eye is a perfect sphere. Working under this assumption leads to eye problems because the lack of a perfect focus causes optical aberrations that gradually damage eyesight.”
In a study published by Nature, scientists reported that the rate of nearsightedness is growing to epidemic levels, with one-third of the world’s population expected to have myopia by 2020. While there are no recent statistics on how many people have a visual impairment in Mexico, INEGI estimated in its 2014 survey that 16.9 million Mexicans, or 14 percent of the population, had a vision impairment in 2014.
“It is estimated that 40 percent of the population living in cities needs glasses, but not all of those who need them use them,” says Machado.
Augen has more than 30 years of experience in the manufacture of lenses and glasses. The company pioneered optic resin processing in Mexico and conducts R&D for the design of new visual solutions, equipment and software.
“Mexico is very different from other countries in the region as the industry was started by small, independent stores that grew into today’s giants like Opticas Lux.”
The company’s goal is to tackle vision problems and take over the glasses market with products made in Mexico. Today, it has about 5,000 clients, most of them optics stores, laboratories and ophthalmologists. About 15 years ago, Augen began a vertical integration process to manufacture its own supplies, which were previously imported from Germany and the US. “We developed our own capabilities to manufacture glasses. We also developed laboratory equipment that now sells in Mexico and exports to Brazil and the US. We are restructuring our equipment division to enter the Eastern European market.”
Augen designs and manufactures free-form surfacing generators, digital free-form polishers, free-form speed polishers, laser engraving systems and speed blockers, essential equipment for the production of lenses. Machado explains that few companies manufacture this equipment; therefore, there is a big market to capture. “The market for this equipment is large but we are only beginning to develop this business line. Most of the products provided by our competition are made in Germany and our products are 40 percent less expensive in comparison.”
Previously, Augen did not work directly with consumers, but that is about to change. The company faced a rough patch until 2013, amid declining sales. Machado revised the company’s strategy and Augen is now looking for financing to open its own chain of stores. “These stores will take advantage of all our existing capabilities and operate under a franchise model similar to an OXXO.”
Machado sees in these stores more than a new business line; they are also a way to provide glasses to those who need them, a long-time goal of the company. Over the last 10 years, Augen has participated in the campaign Ver bien para aprender mejor (Good Eyesight for Better Learning) as a technological partner, through which the company has provided about 250,000 children with glasses every year.
INNOVATIVE PRODUCTS FOR SKIN CARE
RÉMI MARTINI Sales and Marketing Director of Laboratorios Expanscience
Q: How does Laboratorios Expanscience position itself in the maternity market?
A: Last year, we prioritized the development of our Mustela Maternity line along with our baby line since we believe that skin care is fundamental for everyone, but even more so during pregnancy. Our dermocosmetic products are designed to preserve the skin elasticity, prevent stretch marks and promote firmness. For babies, we have a wide range of products adapted to each skin type (Normal, Dry and Atopic-prone skin). We are also a strong player in the diaper rash cream market (and the most dynamic brand according to Nielsen). Our latest product is our relaunched Mustela Solar line, which is designed for babies who are sun-sensitive with fragile and/or atopic prone skin.
The baby skin-care market is an underdeveloped segment in Mexico. Laboratories Expanscience is investing heavily with Mustela and the results have been very positive. Today, we are market leaders in baby skin care and we occupy 94 percent of the market in pharmacies.
Q: Last year, you mentioned that you wanted to become leaders with Euflexxa TA. How is the product positioned in the market now?
A: In a short time, we have positioned ourselves as the second-leading product, with a 25-percent market share. Euflexxa TA, third-generation of hyaluronic acid, is used to relieve knee pain due to osteoarthritis. It is used for patients who do not get enough relief from simple pain medications such as acetaminophen or from exercise and physical therapy. Euflexxa TA is only for injection into the knee, performed by a doctor. We want to continue selling Euflexxa TA in the private sector, where it has been very well-received, and we expect that by the end of 2018 we will have between 30 and 35 percent of market share. We will continue with the insertion of our product at IMSS and ISSSTE.
Q: You are recruiting more providers for your Mustela Portafolio. What profile and features does Laboratorios Expanscience look for in its new suppliers?
A: We want suppliers of the highest quality because we want to guarantee that our customers are receiving innovative products for skin care. Laboratorios Expanscience has already contacted various vendors such as L’Oréal, which we believe is a good supplier of dermo-cosmetics products.
All our suppliers must deliver products that are at the level of quality, safety and efficiency of a medicine and all our products are launched under the guidelines defined by COFEPRIS. That is why it is important for us to find quality suppliers that can manufacture while maintaining the levels required by the regulatory authorities and our internal standards of quality and naturalness.
Q: How does Laboratorios Expanscience collaborate with its suppliers to generate a good commercial relationship?
A: Suppliers who work with Laboratorios Expanscience already know that the company emphasizes quality, prevention and planning. Laboratorios Expanscience seeks to maximize profits but always under a framework of social responsibility and care for the environment and local communities. The company expects the same corporate commitment from the people and companies with whom it collaborates.
Q: You mentioned that you are focusing your efforts on the Mustela portfolio. How will this help Laboratorios Expanscience reach the goal of MX$500 million in 2020?
A: The Mustela line is made up of high-quality made-inFrance products that have been adapted to the Mexican market to meet the needs of our customers in an innovative way. The Mustela line, unlike most competitors, is the only one that offers on average 95 percent natural ingredients in its formulas. Moreover, we are convinced that our vision to be the best for the world, ensuring quality, naturalness, eco-friendly packaging and respect for communities will be our key success factors in the near future.
Laboratorios Expanscience is a French pharmaceutical and dermo-cosmetics laboratory focused on wellness solutions for newborns, teenagers and the elderly. Its main lines, Mustela and Piascledine 300, are present in more than 100 countries
The Dr. Vagón 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.
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
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
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
Since the dawn of the 21 st century, Mexico has made significant progress in health matters. Life expectancy has increased considerably, vaccination levels are closer to those of more developed countries, infant mortality has decreased and universal coverage has not stopped growing thanks to the implementation of programs such as Seguro Popular. All these efforts, however, must continue if Mexico wants to rise above the average of the OECD countries and mitigate what is considered a great global epidemic: obesity, a disease that is related to the trinity of chronic noncommunicable ailments: cancer, diabetes and cardiovascular diseases.
According to the report Getting it Right: Strategic Priorities for Mexico published by the OECD, “the mortality rates of patients with cardiovascular diseases are particularly high in Mexico.” This study suggests this may be due to the fact that patients do not always receive adequate or on-time medical attention. The first point of medical care, therefore, becomes a key for Mexico to achieve the average ratio of the OECD countries.
Given this situation, the country’s influential institutions are taking action. Salvador Zubirán National Medical Sciences and Nutrition Institute, for example, is implementing new ways to attack diabetes, considered an epidemic by the Ministry of Health. “We are trying to implement a stronger approach to prevention at all three levels,” says David Kershenobich, the institute’s Director General. “Primary
prevention aims to avoid the appearance of new diabetes or neoplastic cases. Secondary prevention takes place when the disease is already present so the goal is to stop complications from occurring. If a patient has diabetes mellitus, our objective is to prevent the development of cataracts, hypertension or other cardiovascular complications. Finally, tertiary prevention applies when complications are imminent and steps must be taken to prevent disease progression.”
But the key challenge may be in changing lifestyle habits that encourage the increase of obesity in practically all population segments. According to the Mexican Diabetes Federation, in 2030, 39 percent of the Mexican population will suffer from diabetes, a projection that will not decrease unless solutions are sought to increase physical activity among citizens, in addition to educating about nutrition, the main cause of the spread of diabetes in the country. The food industry, government and educational institutions must play a leading role in this necessary change since the percentage of citizens who consume fruit in Mexico, one of the world’s leading producers, is 43.1 percent, below the average of the OECD, which stands at 56.8 percent, while only 42.4 percent of adults over 18 recognize the importance of maintaining a physical routine, a number lower than that registered by the OECD in 2013.
Source: INEGI
Men Women
These data are more worrying if physical exercise is analyzed according to schooling level. The higher the educational level, the greater the number of people who 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 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 of products rich in salts, sugars and fats among children and support physical activity among citizens.
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
DISTRIBUTION OF ADULT POPULATION BY EDUCATION LEVEL ACCORDING TO PHYSICAL ACTIVITY (percent)
No basic education completed Basic education completed or some degree of secondary education At least one degree of higher education
Source: INEGI
programs in this regard. “It is necessary to continue the implementation of prevention campaigns that provide information about the consequences of unhealthy habits, since many chronic diseases can be avoided with adequate prevention. For example, ISSSTE has campaigns against smoking, a habit that reduces life expectancy by around 15 years and can lead to the most chronic ailments like diabetes, hypertension and cancer,” says Jorge Guerrero, Medical Director of ISSSTE.
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 report its improvements to the Ministry of Health,” he says.
PHARMACIES TAKE THE LEAD
In Mexico the number of doctors has increased, but the public health system is unable to absorb the generated demand that now flows to doctors’ offices installed next to many of the country’s pharmacies. Pharmacies, therefore, have become primary recipients of primary care patients, becoming at the same time a key element to improve the country’s prevention in relation to chronic diseases.
“The current model of care requires visiting a doctor only when there is a problem, but it is necessary for medical professionals to switch to a preventive model,” says Marcos Pascual, Commercial Director of the Mexican Association of Pharmacies ( ANAFARMEX). Private hospitals have also taken the reins of prevention as a result of the epidemiological change that Mexico is
Mexico has a difficult job ahead to adapt its health reality to the health priorities caused by epidemiological change in the country and it should be the public sector that leads the efforts through campaigns that affect prevention and a radical change in the life habits of their citizens, industry insiders say. A clear example of these efforts is the creation of the National Strategy for the Prevention and Control of Overweight, Obesity and Diabetes, which aims to “improve the welfare levels of the population and contribute to the sustainability of national development by slowing down the increase in the prevalence of overweight and obesity in Mexicans.” However, pundits say this should not be a solo effort but rather, action to prevent and control overweight and obesity should be carried out through the committed participation of all the players involved: the public sector, the private initiative and society itself. DISTRIBUCIÓN
experiencing, which directly affects the private sector. This is what Roberto Bonilla, General Director of San Ángel Inn Hospital, believes. “The private sector should concentrate its efforts on improving access by increasing insurance policies as well as influencing prevention. To make this happen, insurance companies and hospitals must change their business models to lower insurance premiums and increase the possibility of people having access to private healthcare.”
According to the Mexican Diabetes Federation, in 2030 , 39 percent of the Mexican population will suffer from diabetes
FACING AN OLDER, LARGER FUTURE
Individuals are living and an overabundance of high-calorie foods are causing problems. As populations across the globe get older and fatter, chronic, noncommunicable diseases become increasingly prevalent. Mexico is now in the midst of an obesity epidemic with grave consequences for its population in the shape of diabetes or cardiovascular diseases. In the coming years, the country’s healthcare system will add a new challenge: providing adequate care to its increasingly older population with an smaller number of productive, younger people.
GLOBAL EXPENDITURE IN HEALTHCARE AS PERCENTAGE OF THE GDP IN 2017*
Aging-related diseases, including dementia, Parkinson’s and Alzheimer’s, will grow
Population over 65 years old will increase by 8 percent, from 559 million in 2015 to 604 million in 2020
By 2040, the number of diabetics is expected to increase from 415 million in 2015 to 642 million
Source: OECD
Challenges:
• Lack of access to basic care services
• Chronic budget shortfalls
• Lack of general and specialized doctors, mainly in rural areas
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 of Saxenda. How has the medical market received this medication?
A: Saxenda is our latest approved treatment for obesity. In Mexico, it has great appeal and has enjoyed a positive reception but it still faces the same challenges as other medications, such as adherence to treatment.
Q: What joint ventures is the company developing to place this and other innovative products closer to low income individuals?
A: We are looking for ways to make our innovation accessible to a wider audience. We understand that many people are treated in the public sector, where options are limited. Therefore, we have entered into negotiations with large institutions to make our products more accessible for people with diabetes and obesity in Mexico.
Q: Novo Nordisk specializes in diabetes and obesity. What is your role in shaping healthcare in a population that is becoming increasingly diabetic and obese?
A: We contribute in two different areas. On one side is as a commercial entity, where we develop innovative treatments and bring them to market, and we try to commercialize them in a way that makes them more accessible to more patients.
We also contribute to the treatment of diabetes through education and with initiatives focused on prevention. One example is Cities Changing Diabetes, for which Mexico City was the first city in the world to join and in which we participate with several stakeholders. Our goal in this regard is the development of infrastructure and the dissemination of knowledge. In addition, Novo Nordisk works with different players to make sure that there is broader access not only to our medications but to
Novo Nordisk is a global healthcare company with 95 years of innovation and leadership in diabetes care. Novo Nordisk employs approximately 42,700 people in 79 countries and markets its products in more than 170 countries
better diabetes treatment overall both in the public and private spheres.
Q: How can local regulations be improved to promote faster access to market?
A: COFEPRIS’ efficiency is among the highest that I have experienced. It has gone a long way in terms of approving products in an efficient manner. When it comes to access, the biggest challenge is who pays for the treatment after it reaches the market. I see a lot of will in some of the big institutions to offer more innovative products but it is always a matter of funding.
Q: How could collaborations in the industry help improve accessibility for these types of products?
A: Together with AMIIF we have opened a dialogue with public players to propose different schemes for funding new medications. Institutions have been open to this and, although we have not made quick progress, the willingness to move forward is there. We all understand the need; it is just a matter of finding the right mechanism.
It is also a matter of changing the mindset regarding treatment. For instance, in the treatment of diabetes, Mexico has been effective in reducing prices in the public market for a specific treatment. This yields savings but also creates a problem in introducing novel treatments: switching the current treatment to a better treatment would mean having to pay three to five times more what is paid now. Health institutions should analyze who is the group of selected people who have the greatest need to obtain the benefits of our product. We are working on pilot projects to pick the target population that will potentially be most benefited from our most innovative medicines and it seems that the public sector is showing more interest in investing in these special populations.
Q: What are the main benefits and drawbacks of tailored financial schemes for pharmaceutical companies?
A: I think we need tailored schemes for different therapies and for different institutions based on their budget 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: Mexico’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 Nordisk’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.
A POWERFUL WARRIOR TO FIGHT AGAINST A POWERFUL ENEMY
ABELARDO MENESES Director of National Institute of Cancer (INCan)
At the end of the 20 th century, Mexico underwent an epidemiological transition from infectious to chronic diseases. As the country’s economy grew stronger, public policies implemented by the government helped reduce deaths due to infection. Life expectancy increased and new challenges appeared. According to the OECD, in 2012 there were 131.5 cases of cancer per 100,000 people in Mexico while INEGI data show that about 70,000 people die of malignant tumors every year. To reduce the number of deaths and health expenditures related to chronic diseases, organizations like the National Institute of Cancer (INCan) believe prevention is a key strategy when addressing the new medical profile of the Mexican population, particularly cancer.
“To deal with this emergency, we lean on two pillars. First, the administration of a national registry that allows us to know the real penetration of cancer in the country and second, the execution of a national plan that includes prevention strategies, early diagnosis, access to treatment, palliative care and rehabilitation,” says Abelardo Meneses, Director of INCan.
For years, INCan had sought the creation of a national cancer registry to record each new cancer diagnosis. The new regulation was finally implemented in June 2017. Three types of records are kept: hospital data, the histopathological study performed by pathology departments and a population-based cancer registry that reflects the country’s situation. “All institutions, both public and private, must report each case diagnosed. The registry requires the commitment of the state and municipal governments and the first city to host it was Merida,” says Meneses. The project was born with the support of third parties, but now it will receive a budget allocated by the federal government. Following Merida’s example, the registry was launched in Guadalajara and will soon come online in Nuevo Leon and Baja California.
INCan expects the registry to improve the impact of the Programa Integral de Prevención y Control de Cáncer (Integral Program for Cancer Control and Prevention), its
second pillar. Meneses says that 40 percent of tumors can be prevented by simply modifying lifestyles. “Today, cancer is one of the four major causes of death. Tobacco consumption, high-calorie diets, exposure to cancer agents, exposure to UV rays and lack of physical activity are the major contributors,” says Meneses. Tobacco use is responsible for one-third of all cancer tumors and 16,000 annual cancer deaths. “The impact of tobacco on health spending is approximately MX$61 billion, while the government’s return from the Special Tax on Production and Services (IEPS) on tobacco consumption totals just MX$38 billion.”
Early diagnosis, the second strategy, is vital for breast, colon, cervix and prostate cancer, some of the most common cancers among Mexicans, according to the WHO. In Mexico, 70 percent of patients with chronic diseases are already in an advanced stage when they finally visit a healthcare facility. In response, the institute has opened diagnostic and prevention clinics. Each year, it also organizes a ‘Cancerathon’ to raise funds. Clinics are open to everyone and provide a diagnosis that is subsequently sent to the health institution at which the patient is registered. All pathologies diagnosed in the clinics are covered by Seguro Popular if the patient does not belong to a health provider.
In addition to the national cancer registry and its integral program, INCan is committed to improving the number of oncologists available in the country, and educating general practitioners. According to Meneses, in 2016, there were 1,781 cancer specialists in Mexico, when there should be five times that amount to achieve complete coverage. INCan is lobbying the Senate, Congress and the Ministry of Health and Public Education to make oncology mandatory at all medical, odontology and nursing faculties. “Today it takes almost seven months from the patient’s arrival at the hospital until diagnosis.”
The institution is also taking steps toward innovation in the treatment of cancer. “We acquired a cyclotron and since August 2017, the institute has had an area focused on the production of solutions for diagnosis and treatment."
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 in Mexico?
A: The institute’s main focus is on noncommunicable chronic diseases, based on a mostly adult population of over 18 years of age. The most common diseases we treat are diabetes and neoplastic formations, or cancer. These topics are related to our medical sciences activities but they are also closely intertwined with our nutritional objectives. Nutrition can directly impact the development of noncommunicable chronic diseases. One of our priorities is to understand the role nutrition plays in these ailments and in the creation of public health plans.
Q: Where does the institute dedicate most of its resources?
A: We opened the Integral Attention Center for Diabetes Patients (CAIPaDi) to promote prevention among those patients. At this center we only attend patients who have received their diagnosis within five years. Doctors usually offer 20 to 60-minute consultations and ask the patient to 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 consultations from expert nutritionists, ophthalmologists, dentists, chiropodists and trainers. In four months, patients have four consultations, which allows them to have 90
percent control of their disease. After this period, they return to their own specialist to follow up on their treatment.
Q: What research topics is the institute focused on?
A: We are trying to understand the role of genetics in the development of noncommunicable chronic diseases. Inheritance is not always the predominant factor; there is also the epigenetic factor, which refers to the environmental conditions that can affect the way a gene expresses. This leads our research into social issues that include habits and lifestyles. We are conducting several studies at the Nutrigenomic Institute to understand how nourishment impacts the expression of certain genes.
Another focus of our research is on the study of human microbiota. We have approximately 2kg of bacteria genes in our bodies, which means we have more bacteria than proper human genes. We are just starting to understand how microbiota interacts with the individual.
The Salvador Zubirán National Medical Sciences and Nutrition Institute is a public health center specialized in treatment and research of noncommunicable chronic diseases. It is aimed at promoting quality medical care
THE REVOLUTION OF GENOMIC MEDICINE
FRANCISCO SOBERÓN
Director General of INMEGEN
Q: What technologies will lead the adoption of genomic medicine by the healthcare sector?
A: The penetration of these technologies in Mexico will depend on many elements, including the existing capabilities of doctors and sustainable budgets.
International pressure on Mexico to incorporate these technologies will also play a role since it will become increasingly unacceptable not to use them in certain medical specialties like oncology. Also, patients and hospital quality systems will demand genomic testing, which will become mandatory for cancer diagnoses.
Other Mexican health institutes are developing initiatives to incorporate these technologies. The only necessary factor is to have a critical mass of trained personnel. INMEGEN trains about five medical specialists and 70 Ph.D students, graduating around 15 per year.
Approximately 5 to 10 percent of female patients with breast cancer are genetically predisposed
Q: How ready are doctors to incorporate these technologies into their daily practice and what benefits would it bring them?
A: This area is new for most doctors and so far universities have not included genomic medicine into their curricula. Medical curricula have not changed in decades. This is extremely worrying but it is not only a Mexican problem as it extends throughout the world.
Doctors themselves are increasingly approaching us to learn how genomic medicine can support their
The National Institute of Genomic Medicine (INMEGEN) leads Mexico’s efforts in genomic medicine research and trains future geneticists and doctors. The institute has a broad range of research lines, from cancer genomics, to proteomics
practice. Doctors are showing interest in keeping up to date and I believe they will increasingly ask for more training. Genomic medicine can have a strong impact in every single specialty but it is much more developed in oncology.
Q: How has INMEGEN contributed to cancer research in Mexico?
A: Regarding cancer, it is necessary to analyze two different scenarios. The first occurs when a patient has been diagnosed and it is necessary to identify the mutation occurring in the patient’s tumor. Using that diagnosis, the oncologist can determine the best treatment course.
The second is predisposition toward cancer, which requires the identification of characteristics specific to a population.
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.
Testing before a patient takes any variety of medication would be too expensive, so it would be preferable to perform a single test that identifies all genetic variables related to response to a pharmaceutical even at birth. Testing for the complete genome of a newborn can cost US$1,000, but in 10 years that cost will reduce enough for the test to be accessible to many. Once this technology is available to the general public, it can be easily performed at birth and doctors will only have to learn how to interpret the genetic data.
Q: How can INMEGEN’s projects be used to change existing prevention schemes?
A: Prevention plans will be limited and possibly erroneous, without concrete information regarding our population’s genomic data. If prevention plans are designed taking
into consideration exclusively international data, their success rate would be much smaller.
This information is useful as it allows us to focus on prevention efforts. For instance, approximately 5 to 10 percent of female patients with breast cancer are genetically predisposed. Knowing which individuals are susceptible will allow us to target prevention efforts toward them.
Q: What is the status of your initiative with PEMEX for the implementation of personalized medicine?
A: In this initiative, financing has been a problem as we have had to use funding supplied by CONACYT, which has also faced cuts. We have an excellent relationship with PEMEX, which will eventually allow us to expand this project to infectious, psychiatric and rare diseases.
We have made progress in the pharmacogenomic study of the diabetes medicine metformin. This is important because the number of diabetics in Mexico is extremely high and not all will benefit from treatment with metformin. This study will measure the correlation of the patients’ genotype and their reception of metformin and other drugs.
Q: What would you identify as INMEGEN’s greatest achievements under your administration?
A: We turned INMEGEN into a solid institution in terms of research and education. Our research core has grown and become stronger, which has also allowed us to train more professionals. The institute has built a significant body of work concerning the genomic profile of the Mexican population, making Mexico the most advanced in this area in Latin America.
ADAPTING TO MARKET UNCERTAINTIES THROUGH HOLISTIC STRATEGIES
VINCENZO D’ELIA General Manager of Laboratorios Alfasigma
Economic, political and social changes directly influence the development of a country’s economy. In 2016, presidential elections in the US led several industries to reconsider their commercial strategies. Mexico is facing similar changes that will shape its business landscape. In times of uncertainty, companies need to be prepared for all outcomes, says Vincenzo D’Elia, General Manager of Laboratorios Alfasigma. “After Trump’s victory, we saw some volatility in the market and the value of the currency was affected, but Alfasigma is prepared to face pessimism. In the best case, we will maintain our business model and strategies and in the worst case we will buy products and restructure our sales porfolio,” D’Elia says.
Among the pressing issues for Mexico, D’Elia highlights price freedom, making health a national priority and providing equal opportunities for all players in the industry. These are the minimum measures needed to maintain quality, price and real access to medicines in Mexico. “Patients are the most affected by the increase in the cost of medicines, since each year the price of raw material in Mexico destined for pharmaceutical products increases significantly,” he says. “The government must prioritize
the creation of a good environment for pharmaceutical companies if it wants to nurture universal access to healthcare.”
ProMéxico data shows that the global production of Mexico’s pharmaceutical industry in 2015 totaled MX$1.23 billion (US$65.8 million), a figure that is expected to rise to MX$1.83 billion (US$98.1 million) by 2020. D’Elia says the retail segment in Mexico is complicated but Alfasigma’s business model adapts to the needs and demands of the market. “We have a very specific strategy for patented and branded generics, so our products are always in a range of prices that patients can access,” he says. Following WHO’s recommendations, Alfasigma also stands out for the introduction of unique drugs in the Mexican market and for differentiating itself from the competition through technological innovation.
Whatever happens in the near future, Alfasigma is prepared to continue growing in the Mexican market. “We do not believe there will be such a negative scenario that affects our, mainly because 95 percent of our sales are made to the private sector,” D’Elia says.
INNOVATION TO ADDRESS HEALTH CHALLENGES
ROBERTO TAPIA-CONYER CEO of Fundación Carlos Slim
Q: How does Fundación Carlos Slim help to reduce the burden of healthcare?
A: The foundation is a catalyst for the implementation of innovations that address the most pressing public health challenges and that later spur transformation of public policies, with the support of leading national and international organizations and through the convening of public-private partnerships.
Q: How is technology changing healthcare practices?
A: With the advent of the fourth industrial revolution, we see four trends in technology that converge and impact healthcare: innovations in diagnostics with the revolution of genomics and metabolomics, massive adoption of mobile technologies, an enhanced use of low-cost IoT-backed technologies and artificial intelligence (AI) and cognitive computing.
This convergence gives way to digital health and its greatest impact is observed on the implementation of Personalized Public Health, a term we have coined that is characterized by proactive prevention and includes new diagnostic methods alongside effective implementation outreach strategies. These enable health professionals to detect and diagnose risk factors and their predecessor conditions, such as prediabetes, and continuum of care through the implementation of a stepwise strategy from detection of a disease, confirmation
and incorporation to disease management and home monitoring using IoT portable medical devices.
Q: How is Fundación Carlos Slim changing healthcare practices?
A: Our goal is to provide effective care throughout the continuum of care and its different platforms, from the community and primary health clinics to general and tertiary hospitals. Appropriate follow-ups need to be provided with the collaboration of health professionals and patients themselves. To do so, we launched CASALUD, a model that has received international recognition for its visionary approach to care.
We also conduct reviews of innovative breakthroughs from around the world and analyze which ones can be implemented in Mexico, taking three criteria into consideration: costeffectiveness, operational feasibility and impact on burden of disease. Our objective is to optimize the base of the pyramid by improving clinics’ public infrastructure. Fundación Carlos Slim’s goal is for people to live longer and better.
Q: How does the foundation support the training and education of health professionals?
A: We developed PIEENSO, a robust online-offline educational platform for physicians, nurses and researchers where they receive state-of-the-art training. We developed
Incubators at maternity ward, Hospitaria Hospital
the curricula in collaboration with national organizations like the National Institute of Medical Sciences Salvador Zubirán and international counterparts such as the Mayo Clinic and Harvard’s Joslin Diabetes Center, among many others. Our courses are endorsed by the National Autonomous University of Mexico (UNAM). We are mostly concerned with providing health education to the general public, supported by our online platform ClikiSalud.net, which comprises a diverse range of topics concerning the Spanish-speaking population.
Q: How would you describe the progress made by Mexico in terms of maternal and child health and how is the foundation supporting this area?
A: Mexico has made great progress in maternal health but not enough to meet the Millennium Development Goals. Maternal health is a challenge in Mexico, where approximately 25 percent of pregnancies occur in women 18 years old or younger. To address this problem, we developed AMANECE, a strategy that incorporates several innovations that enable the timely identification of a pregnant woman to provide proper prenatal care, and later refer her to a hospital in a coordinated fashion for the delivery of her baby.
Mexico has been a global leader in vaccination, which should continue. To help the country improve its practices, we developed the Electronic Vaccination Card ( Cartilla Electronica de Vacunacion). The goal is for all children under 5 years old to be up to date with their vaccination schedule. This information is linked to their printed book and uploaded to the cloud, which will give health professionals and parents continuous access to this data, helping them to keep up with vaccination schedules in a timely manner.
Q: How is the foundation incorporating research into its practices?
A: For the past eight years, the foundation has studied the genetic background of diabetes and cancer alongside the
Broad Institute of Harvard University, the Massachusetts Institute of Technology and leading Mexican research centers. We are identifying the potential impact of several genes on the risk of developing diabetes and we use this information to analyze whether an individual has an increased risk of presenting the disease. We have already developed a first chip to measure the genetic risk of diabetes specifically for the Mexican population and we are in the process of developing two additional chips to measure the genetic risk of cardiometabolic disease and diabetes during pregnancy.
Q: Which other areas should be prioritized to improve the health of Mexicans?
A: In Mexico, the number of organ transplants has not evolved as needed but changes are being implemented to improve it. For instance, Seguro Popular has incorporated liver, kidney and bone marrow transplants into its financial coverage. Our campaign “Heroes for Life” (Héroes por la Vida) promotes organ donation, both from a deceased or a living donor. We are also promoting transplant chains for kidney transplants.
Q: What initiatives is the foundation spearheading to address tropical diseases?
A: In 2012, the Foundation launched the Salud Mesoamérica Initiative alongside the Bill and Melinda Gates Foundation and the Inter-American Development Bank, centered on child nutrition, vaccines and maternal health for the poorest 20 percent of the population in the region. In a new phase, we will work toward the elimination of malaria in Mesoamerica.
Fundación Carlos Slim is a nonprofit Mexican civil association. It was created in 1986 by Carlos Slim with the intention of promoting the integral development of Mexican and Latin American society
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.
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
Q: What are the most common ophthalmological ailments in Mexico?
A: There is no available data on the prevalence of eye diseases in Mexico, so our institute and other ophthalmology hospitals are working with the government to generate data on the dimensions of the problem. We have identified five major issues. The first is refractive error and the lack of access to visual corrections to address this problem. The second is cataracts, which if left untreated lead to vision loss and blindness. The third is diabetic retinopathy. The fourth is glaucoma, a neuropathy of the optical nerve that affects between 2 and 5 percent of the population. The fifth is macular degeneration associated with age, a degenerative disease of the retina that also leads to blindness.
Q: How is the prevalence of eye diseases evolving as the population becomes increasingly older?
A: As people live longer, the prevalence of cataracts increases. Some individuals begin to show signs at 65 years of age and by age 80 almost all show some degree of opacity. In Mexico, the main obstacle to address cataracts is the lack of access, as there is a limited number of ophthalmologists performing corrective surgery. Including cataracts in the list of diseases covered by Seguro Popular has increased access to care but it has not been enough to address the problem. Mexico should perform around 300,000 cataract surgeries per year but the country only performs 100,000.
Q: How are chronic diseases related to obesity changing the profile of eye diseases?
A: In Mexico, there are approximately 9 million diabetics and a large number of people who have not been diagnosed. Diabetic retinopathy is a late complication of diabetes that affects 30 percent of those who suffer the disease. It can lead to blindness but this can be avoided if detected early.
Instituto de Oftalmología Fundación Conde de Valenciana is an organization that provides eye-care to all socioeconomic levels of the population. The institute has four different hospitals and also addresses diabetes, nutrition and psychology
Unfortunately, only 8 percent of diabetics check their eyes. Together with the Ministry of Health, we are working on the development of programs for the early detection of diabetes and together with INCMNSZ we have created a program to prevent damage from diabetic retinopathy.
Q: What must be done to increase access to care, especially in remote areas?
A: Although there are 5,000 ophthalmologists in the country, most are clustered in Mexico City, Monterrey and Guadalajara. For that reason, it is important to develop technology that can allow these doctors to find and provide care for patients in remote areas. Once identified, those who need advanced treatment can be channeled to the closest institution as eye surgeries require extremely specialized doctors and equipment.
Q: Considering the hospital’s mission to provide care at accessible prices, how is the hospital financing its operations?
A: The hospital is financed through a foundation, recovery fees and national and international institutions, which allow us to provide care at a small recovery cost to patients through efficient use of resources. Beyond our offices in Mexico City, we have four other units: two hospitals in Guerrero and Tlaxcala, a unit in INCMNSZ and a clinic operated alongside ABC Hospitals. We plan to continue opening more clinics to increase access to care, especially in marginalized areas.
Q: What research projects are these groups addressing?
A: An emblematic project carried out within the institute involved cell biology for the development of stem cells to address problems on the surface of the eye. The goal is to use these cells to treat eye problems caused by burns or immune diseases. We also have alliances with other institutions, including UNAM and the National Institute of Astrophysics, Optics and Electronics (INAOE). These projects are financed by CONACYT. Our researchers have now gained international recognition and have trained researchers who now work at national and international institutions.
CONSOLIDATING TRANSPLANT EFFORTS THROUGHOUT MEXICO
JOSÉ ABURTO Director General of CENATRA
Thousands of people are waiting for a transplant that could be the difference between life and death. To improve their chances, the National Transplant Center (CENATRA) is bringing together the public and private sectors and promoting agreements to make these surgeries a reality.
“CENATRA coordinates the efforts off all players, including the federal government, state governments, local health centers, the Ministry of Health and society itself,” says José Aburto, Director General of CENATRA. “When we began managing CENATRA, only five states participated. Now, 18 states are involved and we continue to incorporate more as they develop their own initiatives and attract organ donors. If all public institutions work together under unified standards, we can raise the rate of transplants in Mexico.”
Mexico’s transplant rate is 4.5 per million inhabitants, says Aburto, so challenges are related to the many factors that must be aligned for a transplant to be viable. These include hospital space and the availability of the medical professionals required to perform the transplant. A common problem is that the organ, the patient and the doctors are in different states, demanding appropriate logistics and coordination. “Each successful case requires the coordination of several institutions and doctors so as not to miss a transplant opportunity,” explains Aburto.
To address geographical dilemmas, CENATRA has at its disposal an aircraft belonging to the Attorney General’s Office ( PGR). “This agreement was created by our administration as there was no way to transport an organ, the doctor or the patient. Air transport is extremely expensive, with prices between MX$200,000 and MX$300,000. Collaboration with PGR has been essential for many transplants in recent years.”
The most common transplant in Mexico is for a kidney, with 13,702 people on the waiting list, most of them between 35 and 45 years of age. Kidney transplants have a survival rate of 90 percent during the first year, 85 percent after five years and 80 percent after 10 years. Patients can survive up to 20 years after a kidney transplant and, on average, survive for 15 years, says Aburto. Meanwhile hemodialysis, an extremely
expensive substitute treatment, results in a survival rate of between two and four years. “The entire healthcare budget would not be enough to pay for hemodialysis for all the patients who need it now,” adds Aburto.
Cornea transplants are second, with 7,267 patients on the waiting list. “There are 3,762 annual transplants, of which 2,874 are from Mexican donors. Two years ago, 80 percent of corneas came from the US.” Liver is next, with 365 patients waiting for a liver transplant as of February 2018. “In 2017, 183 transplants were performed, so we are covering 50 percent of the demand. Over 90 percent of these transplants are successful.”
Although there are only 47 patients on the waiting list for heart transplants, their quality of life is greatly decreased due to their condition, says Aburto. “In 2017, we successfully performed 35 heart transplants, covering 70 percent of the existing need.” Successful heart transplants in the country are performed mostly at public institutions.
Among CENATRA’s many goals was the creation in 2017 of a program for lung transplants that concluded with four surgeries carried out in Monterrey. “It is a very complex operation that requires extensive infrastructure and well-trained professionals, including surgeons and ICU professionals.”
The institution supports other projects that can place Mexico as a world leader in transplants, including facial and thoracic extremities. “Mexico is the first country in Latin America to transplant upper body extremities,” says Aburto. Other countries such as Spain, the world leader in transplants, have developed successful programs through the generation of special budgets assigned exclusively for that goal. “The resources we have received have led to all these results. All successful models go hand in hand with an appropriate budget. All activity related to transplants in Mexico is completely altruistic thanks to the donation of time and resources from doctors, nurses and hospitals. These people do not receive any compensation for their significant efforts.”
WORKING ON SEVERAL FRONTS TO BOOST AWARENESS OF STEM CELLS
VÍCTOR SAADIA
Founder and CEO of BioCenter Mexico
Q: How would you describe the penetration of regenerative medicine in Mexico?
A: The promise for regenerative medicine is mesenchymal cells. My company introduced mesenchymal cells to Mexico for the first time 10 years ago. This technology is new to Mexico City, but it has been developed for some years in the north of the country where BioCenter has clinics in Monterrey and Tijuana. Medical tourism has promoted this technology in the north for eight years, catering to the arrival of foreigners.
Q: How does BioCenter guarantee the effective and safe collection of mesenchymal cells?
A: BioCenter retrieves stem cells from teeth, fat and bone marrow. Fat is the most common procedure for adults, who undergo a mini-liposuction to isolate and reproduce the stem cells for application. BioCenter has participated in the application of mesenchymal cells to treat facial paralysis, sports injuries and inflammatory diseases like myomatosis. In Mexico City, we have applied our technology for less than a year but in our affiliated clinics we have between four and five years of development. Also, BioCenter in Mexico City has a new division related to applications for aesthetic medicine and treatment in areas such as alopecia and facial rejuvenation.
Q: How is BioCenter collaborating to support local and international research efforts in stem cell therapy?
A: All possible applications for the use of stem cells must undergo a research process. BioCenter collaborates with several clinics nationwide to carry out multicenter clinical protocols with the goal of developing controlled therapeutic techniques. Our clinical protocols are subject to COFEPRIS’ ability to continue providing access to more than 30 therapeutic applications. BioCenter works according to several objectives; it collaborates both in clinical research
BioCenter, based in the US, is the first banking service in the world for dental cells. BioCenter is present in 22 countries in the Americas, Europe and Asia and says it has stored 25 billion dental cells
and on the patient’s education to promote awareness of what a mesenchymal stem cell is. In addition, I am on the board of directors of the Mexican Council of Regenerative Medicine and Cell Therapy that represents clinics that are authorized by COFEPRIS to operate in the country and develops a commercial, research and academic agenda around the subject.
Q: Which are the main challenges to the widespread implementation of this technology in Mexico?
A: The main issues in Mexico are cost and the lack of education about stem cells. Our country does not have a deep knowledge about these cells and this creates a problem when it comes to differentiating the serious treatments from the so-called miracle products advertised on TV. One of BioCenter’s goals is to inform the patient and the population about mesenchymal cells before receiving any type of therapy. In terms of cost, well-regulated stem cells have a high cost because the conditions for their cultivation require a high level of biosecurity that increases their value. But, these conditions are key to ensuring that they are purified, expanded and isolated. There are approximately 30 clinics nationwide with a health license from COFEPRIS to apply stem cells.
Q: What alliances is BioCenter generating to increase its client base and the penetration of this technology?
A: Part of the joint agenda between BioCenter and the Mexican Council of Regenerative Medicine and Cell Therapy is to develop and strengthen the clinical research of stem cells in Mexico. BioCenter wants to promote clinical research with patients because it is the area with the greatest potential in the country due to medical tourism and the flow of patients that Mexico receives from the US. Also, we are trying to work together with the Council and research clinics to integrate knowledge and create greater value for the development of regenerative medicine. The Council and BioCenter participate in international symposia and conferences to find the best practices and knowledge that can benefit Mexico. Regenerative medicine is an industry driven by patients, which means that there is a great need on the part of patients to access it.
COORDINATING ACCESS THROUGH PATIENTCENTRIC APPROACH
JUANA RAMÍREZ CEO and Founder of SOHIN
Q: What is SOHIN’s approach to Mexico’s epidemiological profile?
A: We focus on 13 diseases, including cancer, rheumatoid arthritis, multiple sclerosis, hepatitis C, chronic renal insufficiency, orphan diseases and cardiopathies. What is common to some of these diseases is that there is no cure. They also require long and expensive treatments, which in turn increases the amount of care they require. For an insurer, patients with chronic diseases represent approximately 1 percent of all their insured. However, these patients represent more than 60 percent of all their costs, something that also happens in the public sector.
Q: How does SOHIN address these gaps in healthcare?
A: SOHIN understands that those who suffer these diseases require personalized treatment, as patients with the same disease can respond in an entirely different way to the same treatment. A patient who receives timely, comprehensive medical attention and support is better contained and therefore less expensive. These patients are also more likely to develop self-care behaviors and higher therapeutic adherence to treatments, which results in lower attention costs. A cancer diagnosis hits more than just the patient: friends and families are also impacted.
Q: How do SOHIN’s services complement the offers from existing healthcare providers?
A: SOHIN is a platform that coordinates access to healthcare services and operates under a patient-centric model. We do not compete with hospitals, doctors, pharmaceutical companies or medical distributors; we bring them together for the benefit of the patient. We have treated over 25,000 patients, a volume that allows us to offer services at affordable costs. About 95 percent of them are referred to us by large insurers that have incorporated our services.
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 costs by making sure that patients receive what they need, when they need it. If we do these two things right, we optimize resources. Considering that only 45 percent
of patients will respond well to chemotherapy, SOHIN promotes genetic testing to identify those patients that will have a positive reaction to the drug. The test determines whether the patient is at a high or low risk to develop metastatic cancer. Only those with a high risk of metastasis will receive chemotherapy, thus reducing unnecessary costs.
Q: How is SOHIN’s model benefiting the public sector and what opportunities is the company eyeing in that sphere?
A: Our model demonstrates that it is possible to put cuttingedge technologies within the reach of Mexican patients at affordable prices. The incorporation of genomic diagnosis will provide benefits to the healthcare sector, which otherwise would be overwhelmed by the growing number of patients with chronic diseases. We entered the public sector in 2017 and that year SOHIN incorporated MammaPrint, the first genetic test included in the healthcare sector’s list of subsidized treatments and medicines. Seguro Popular incorporated this test in February 2018. While a private insurer can have 1 million patients insured, Seguro Popular has more than 48 million potential patients, so the volume of people we could help is extremely large. We started to work with the private sector as a commercial access strategy and a way to present our results to the public.
Q: What are SOHIN’s expansion plans for Mexico and Latin America?
A: SOHIN now has 150 employees, most of whom are healthcare professionals like doctors, pharmacists, psychologists, nurses, nutritionists, biologists and geneticists. Our goal is to reach 100,000 patients by 2020. We now have offices in Mexico, Colombia and Argentina. While we aim at expanding this model throughout Latin America, one of the main barriers is finding financing. Today, investment funds eyeing entrepreneurs expect large and fast returns within five to six years.
Soluciones Hospitalarias Integrales (SOHIN) provides linkage and management services for patients with cancer, diabetes, multiple sclerosis and arthritis in Mexico and Colombia. The company has two divisions: Concierge and GENETHIC Services
SEALING ECONOMIC LEAKS THROUGH PREVENTION
GABRIELA ALLARD Director of the Mexican Association of Diabetes (AMD)
In Mexico, the burden of diabetes and the health expenditure for chronic diseases could increase as the rates of obesity and overweight continue to rise. According to the National Nutrition Survey 2016 (ENSANUT), 12 percent of the population lives with diabetes, while FUNSALUD says that treatment is costing the Mexican government more than MX$180 billion a year, almost 1 percent of the country’s GDP. One strategy to battle the disease is to attack the problem at its roots.
Gabriela Allard, Director of the Mexican Association of Diabetes ( AMD), believes that to reduce costs and improve patients’ health, the focus of prevention must be on prediabetics. AMD’s priority is to control metabolic syndrome and impact health management. “Metabolic syndrome is our window of opportunity. Today, a patient with diabetes costs the health system MX$60,000 per year while treating a patient with metabolic syndrome costs about MX$3,000,” says Allard.
AMD has been providing services across Mexico since 1989. It focuses on controlling metabolic syndrome, which includes symptoms such as high blood pressure, high levels of blood sugar, excess body fat around the waist and high cholesterol levels. These conditions increase the risk of suffering from type 2 diabetes (T2D) or cardiac disease. According to AMD, each diabetic patient will cost the system MX$1.8 million in 30 years. “By the time patients become diabetic, we have lost many opportunities. But if we work on prevention, the health system will save a lot of money.”
Gallard says obesity rates in the country suggest a worsening problem to come. “Twelve percent of the population is suffering from diabetes and almost 40 percent from metabolic syndrome. In terms of obesity, the statistics we have are very high, so there is a strong chance the penetration of diabetes will increase to 40 percent.”
AMD is working on prevention with a group of health promoters by educating the public on the development of willpower. “Our first effort should be to develop people’s
willpower and emphasize the importance of their decisions on their health.” The association is also training first-level doctors from the National System for Integral Family Development (DIF) and dispatching health brigades into communities to measure people’s weight and height to carry out glucose and blood pressure tests and to conduct oral examinations.
Diet is also in the crosshairs. AMD belongs to a coalition called Contrapeso that supports the Special Tax on Production and Services (IEPS) on sugary beverages. “It is scientifically proven that sugary drinks are a direct cause of obesity.”
Another population segment AMD is especially concerned about is teenage mothers. According to ENSANUT, Mexico ranks first in teenage obesity with a 36-percent penetration and, according to the Ministry of Health, the most frequent pregnancy cases are among teenagers aged between 11 and 17. Allard explains that most pregnant teenage girls do not visit a doctor until the pregnancy is well-advanced. As a result, they do not control their glucose levels. If they have a prediabetic condition, they are prone to developing gestational diabetes. “If a girl becomes pregnant while obese and is not treated, she is exposed to two risks. First, the baby could be born with a high chance of developing T2D in the future and the mother will probably develop gestational diabetes, which will then become T2D,” says Allard, who adds that the penetration of gestational diabetes increased by 5 percent in 2016.
AMD has also focused on prevention in the prediabetic phase to avoid cost increases and improve health. “People with diabetes become less productive and incur absenteeism, affecting their companies.” According to the US Chamber of Commerce, the loss in productivity caused by employees with chronic disease represents almost 5 percent of Mexico’s GDP. The association’s priority is to help the population living with diabetes control the disease through education and access to complete treatments.
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 and clinics are concentrated in larger cities and rural areas often isolated from the essential services required by their inhabitants. To address the gaps in the existing system, Fundacion Grupo México and Ferromex created the initiative called Dr. Vagón, El Tren de la Salud, a mobile railway-based clinic that provides free comprehensive medical services to populations with access issues and limited resources, promoting mainly the prevention, timely detection, early diagnosis and adequate control of diseases.
“Many remote communities do not have health services or only have access to a small local clinic. These are the main locations that Dr. Vagón, El Tren de la Salud visits 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 are focused on attending the main morbidities that affect Mexico. Reyes says that while diabetes, obesity and cardiovascular diseases are often considered a priority for health services. “There are many other diseases that go unnoticed and that are often not treated, leading to later complications that affect the patient’s quality of life.”
The service, which provides free medical care to remote and often inaccessible regions in Mexico, began operating in May 2014 with 11 cars and a service capacity of 250 patients daily. Today, it has the capacity to assist 500 patients per day. “The Ministry of Health has recognized the impact that the train has had in contributing to the reduction of morbidity rates. For that reason, in 2018 the service will be increased up to 60 percent to provide
coverage to more communities, which will allow us to treat 10,000 patients,” Reyes says. El Tren de la Salud has visited 24 of the 32 states in Mexico, although it can only visit places that are equipped with railroads and the necessary infrastructure to receive it. In addition, the location must provide alternative tracks for normal train traffic during the four days that Dr. Vagón is visiting a community. If they are not available, Ferromex can build temporary alternatives.
“We do not charge patients, hospitals or governments because all our services have the full support of Fundación Grupo México, our allies and collaborators, including Fundación Farmacias del Ahorro, Fundación MVS Radio, Fundación Audiotech, LAPI Laboratories, Onko Solutions and Cinemex, which allows us to offer a wide range of 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 for Breast Cancer (FUCAM), which will offer a comprehensive treatment that includes mammography and complementary studies. “Care for women is a priority for Dr. Vagón and in 2018 the train included a special car dedicated to the integral care of women, focusing on the timely detection of cervico-uterine cancer and breast cancer. Approximately 65 percent of our patients are women.”
Reyes says that when the project started he had no idea how long it would last and what impact it would have, but its excellent reception allowed the train to travel 43 routes by the end of 2017. “Now, we have more services and specialties and we are the only health service that provides physical rehabilitation for free.”
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.
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
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 improving the health and longevity of most people. Patients can now manage infectious diseases and, in some cases, diseases can be cured or have been eradicated, such as smallpox and polio. However, much remains to be done since the world still faces diseases as old as multicellular organisms, like cancer, and some that are increasing in prevalence due to epidemiological changes like those associated with old age and obesity.
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.
10 and 15 years and up to US$2.7 billion, according to Forbes. Moreover, it is ripe with failure. Thousands of molecules are being studied at a given moment. Of these, only a few make it all the way through preclinical trials. Once a molecule reaches clinical trials, it has only a 9.6 percent chance of being approved. This makes pharmaceutical development a steep bet, but one that could result in great rewards. For instance, AbbVie’s Humira registered sales totaling US$18.43 billion in 2017 and its manufacturer expects that sales of this drug will approach US$21 billion by 2020.
PROBABILITY OF A MOLECULE TO BE APPROVED BY PHASE
PHASE PROBABILITY OF APPROVAL (PHASE)
APPROVAL
Source: Evaluate Pharma
This figure might seem steep, but it is a good investment considering that the pharmaceutical market is expected to reach US$1.48 trillion by 2021, according to the QuintilesIMS Institute. This growth will be led in part by market expansion in emerging countries and a growing number of chronic diseases associated with aging and obesity.
However, the development of a new medication is an extremely slow and expensive process that takes between
*NDA: New Drug Application; **BLA: Biologic License Application
Source: BIO, Biomedtracker and Amplion.
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 to QuintilesIMS.
MEXICO: LARGE MARKET, STRONG COMPETITION
Mexico is the second-largest pharmaceutical market in 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 & Johnson.
The local pharmaceutical market has been gradually overtaken by generics, which now surpass patented medications sales in volume, if not in value. However, Big Pharma continues to the see the country as an attractive market. “Mexico is a priority country for Pfizer in terms of investment,” says Rodrigo Puga, President and Country Manager of Pfizer Mexico. “We think that Mexico will
and an accurate diagnosis of the outcome. IMSS has been extremely welcoming and the institute is greatly interested in incorporating these new models,” says Thompson.
Once in the Mexican market, patented medicines face two other challenges: complex and time-consuming regulatory enforcement for IP protection and the black market. “Mexico has a significant problem with fake medicines, says Fernando 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 improve its internal enforcement capabilities to be on par with the countries with which we are signing agreements.”
261 continue to be a key player for the future so we are investing in clinical research, in our manufacturing plant in Toluca and in our people,” he says.
The industry has found a large and welcoming market in Mexico thanks in part to COFEPRIS, which has increased its efforts to accelerate the approval of new molecules through the generation of authorized third parties. However, the approval of a medication is not enough to make it a market success. COFEPRIS approval allows the manufacturer to sell the medication in the private sector, but that poses some challenges of its own. “While COFEPRIS has made innovative molecules available for purchase in Mexico, there is little access to these medications at private institutions because insurance penetration remains low,” says Cristóbal Thompson, Executive Director of AMIIF.
Mexico’s largest market, the public sector, is even harder to penetrate since COFEPRIS’ approval is not enough to sell a medication in the public sphere. The medicine has to be approved by the General Health Council and then it must be incorporated into each of the basic lists of public institutions (IMSS, ISSSTE, SEDENA, PEMEX and others). This process can take, on average, two years per institution and only guarantees that the product can be introduced by that institution, not that it will be bought.
Moreover, this sector has been facing another problem: budget cuts. During President Peña Nieto’s administration, the sector saw its budget reduced by over MX$40 billion, according to Red de Acceso. To address these problems, a strategy to bring these products to the public sector is coming to light. “Within AMIIF, we noticed that access to innovation across the country remains below 10 percent. We are promoting a new payment model wherein institutions would pay for positive results instead of units, which would require the monitoring of the patient’s condition throughout treatment
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 pharmaceutical sector is complex, as it requires first a resolution from the Mexican Institute of Intellectual Property (IMPI) that can take some years. This decision has to be validated by the Administrative Justice Court, adding more time. Even if the court supports IMPI’s decision, the offending party can initiate another legal process (amparo), which can take another couple of years to be solved. After this, it is necessary to go to Civil Court to sue for damages, adding another several years to the entire process, plus the time that it can take you to enforce the sentence,” says Lisandro Herrera, Associate at Galicia Abogados.
INNOVATIVE MEDICINES MADE IN MEXICO
While Mexico is well-known for its manufacturing capabilities, it is not as known for its research and development. Local institutions are looking to change that and convince foreign companies to bring their research capabilities to the country. “For instance, CONACYT has tax incentives programs designed to attract private investment for R&D. Through this program, companies present a project that is evaluated by experts from SHCP and CONACYT. If approved, the company is granted a 30 percent tax credit to be used within the next 10 years,” says Enrique Cabrero, Director General of CONACYT. Another goal is to support R&D efforts at local universities to reach the market. “It is necessary to fully change Mexico’s research culture to promote the transference of technology,” says Gloria Soberón, Director of UNAM’s Technology Transference Department.
The global pharmaceutical sector has faced diverse challenges in recent times, but it is still a strong and indispensable industry that shows all signs of future and continuous growth. Companies willing to operate in Mexico will find a large market, but one that is not necessarily easy to penetrate. However, it could be a good investment for those who are willing to think creatively and make long-term bets.
Source: ProClinical.
CONTINUOUS IMPROVEMENT THROUGH CONSTANT R&D
Advances in medicine have controlled and even eliminated diseases from the face of earth. Yet, there is still much to be done as the world’s epidemiological changes are leading to a number of diseases brought about by an older population and expanding waistlines. Infectious diseases are still a
major force in some areas of the planet and an increasingly interconnected world means they can spread faster. For these reasons, pharmaceuticals and researchers across the globe are engaged in what seems to be a never-ending search for more ways to cure people or prevent disease.
WORLDWIDE TOTAL PRESCRIPTION DRUG SALES (US$ BILLION)
WORLDWIDE TOTAL PRESCRIPTION DRUG SALES (US$ billion)
232 Mexico City 166 Jalisco 82 State of Mexico 37 Puebla 35 Morelos 25 Nuevo Leon 25 Guanajuato
Lenvixi
Vemlidy MR-VAC
Trevac
Aqynzio Soliqua
Xultophy
Trimbow
Skudexa
Source: DENUE, INEGI 2017, COFEPRIS, ProMéxico
THE CREATION OF AN R&D POWERHOUSE
ENRIQUE CABRERO Director General of CONACYT
Q: Last year, you mentioned the creation of a consortium of translational medicine. What are its main objectives?
A: The goal of the consortium is to bring together many different projects to promote the advance of translational medicine. Through the consortium, institutions that perform high-quality research or engage in technological development can work together with companies. Our partners are UNAM, its research centers and the National Institutes of Health. The latter have the highest research productivity in terms of papers published in the best scientific journals in the world.
Q: How can CONACYT attract more research projects and companies to Mexico?
A: Our tax incentives program attracts private investment in R&D. Through this program, companies present a project that is evaluated by experts from SHCP and CONACYT. If approved, the company is granted a 30 percent tax credit to be used within the next 10 years. This project is gaining strength among large and medium-sized companies, which are already generating their own R&D infrastructure in Mexico.
We notice how foreign companies are increasingly interested in working with us. These companies often consult CONACYT about places where they can establish their business and how to acquire talent.
Q: What are the main challenges to turn Mexico into a knowledge-based economy?
A: Mexico is trying to become a knowledge-based economy, but we have discovered that the window of opportunity to do so is small. Mexico must choose the six or eight sectors in which it will invest to make its mark on the world and both biotechnology and biomedical sciences should be priorities.
The National Council of Science and Technology (CONACYT) is in charge of coordinating, regulating and promoting research in Mexico. The council supports research through scholarships, grants and collaborative projects with private institutions
Q: The US is Mexico’s largest scientific partner. How would a souring relationship between both countries impact Mexican R&D?
A: The week after the last US presidential elections took place, I received numerous calls from university presidents stating that no political changes would affect their relationship with us. In fact, they want to intensify student exchanges and other collaborative projects. We are also seeing an increasing number of countries willing to perform R&D in Mexico as they see great potential for clinical trials in the country’s public healthcare institutions, such as IMSS or ISSSTE. For instance, the National Institutes of Health (NIH) have shown great interest in increasing collaboration with IMSS as the latter has strengthened its research capabilities. The large population of patients in these institutions provides great opportunities for clinical trials.
Q: How is CONACYT extending its collaborative links to other areas in the world?
A: At the beginning of Peña Nieto’s administration, CONACYT lacked the resources to implement an active strategy for international cooperation. For that reason, we focused our strategy in 16 countries: the US, Canada, Brazil, Argentina, Chile, the UK, France, Germany, Spain, the Netherlands, Italy, Japan, China, South Korea, India and Australia. These efforts led to an increase in scientific cooperation between Mexico and many countries, including Germany, with whom many bilateral exchanges have happened in the last years. We also developed binational laboratories with France, the US and other countries that involve funding and researchers from these countries.
Q: What are the main challenges the healthcare system will face in the coming years? How can CONACYT support the sector?
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 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 the elderly.
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 during 2018. How will Pfizer allocate these funds?
A: Mexico is a priority country for Pfizer in terms of investment and is included in the Top 15 affiliated worldwide. The local pharmaceutical market, together with the size of Mexico’s economy, ensures Pfizer’s future in Mexico. We think that the country will continue to be a key player for the future, so we are investing in clinical research at our manufacturing plant in Toluca. We are increasing the plant’s capacity and adding state-of-the-art production lines for oral products. This plant exports 22 percent of its production to 18 countries in Latin America.
Q: Pfizer Mexico grew by 9 percent in 2017. What drove your performance?
A: Our strategy in 2017 included the launch of five innovative products and a diversified portfolio that allowed us to focus on those market segments that grew the most. We launched new products in therapeutic areas such as oncology, antiinfection, women’s health, rare diseases, branded generics, biosimilars and others. In 2018, we are launching seven more products, including one for women going through menopause, a new self-administered contraceptive, new oncology therapies and an antibiotic for use in hospitals. We will also launch a few products for our OTC line. We plan to introduce those new medicines in the Mexican market by the second half of 2018.
Q: Which of Pfizer’s products are growing the most in the Mexican market?
A: The three products that are growing the most are an oncology product for metastatic breast cancer, an antibiotic and an anti-inflammatory biosimilar that we launched in 2017. For Pfizer, the private market is growing more than the public, where sales grew by 2 percent in 2017. While the private market grew between 6 and 7 percent, which reflected growth in both volume and prices.
Q: How should the internal regulation of Mexico be improved to ensure the application of IP protection?
A: COFEPRIS, IMPI and pharmaceutical associations are already working to ensure that all information is available
and that all processes are transparent. The link between COFEPRIS and IMPI needs to be strengthened to accelerate the approval of sanitary registrations. It is also necessary to eliminate the “counter bound” provision. Once the affected party sues an offender for patent infringement, the former can place a bond that forbids commercialization of the product by the latter. However, the offending party can place a counter bound, which allows them to commercialize the product again.
Q: How can innovative medicines reach the general population?
A: Mexico needs to invest more in healthcare. We are working closely with AMIIF to introduce schemes to bring innovative medicines closer to the general population, which is a priority. Investing in health has a positive impact on productivity and economic growth. The time to invest is now, as Mexico must take advantage of its demographic bonus. Innovative access models allow the public sector to share the risk. The implementation of these models is almost ready; we are only waiting for the other party, a public institution such as IMSS, to be ready. We hope the first of these models will be implemented in 2018.
Q: How do you measure success within one of these models?
A: It varies completely depending on the model. For instance, one of our oncology products guarantees an entire year without progression of the cancer. In this case, if the medication is incorporated in an institution’s basic list, under a shared-risk model the institution would only pay for the patients in whom the cancer did not advance for a year. If several patients do not benefit from this effect and their cancer progresses, the institution would not pay for their treatment. Under current schemes, institutions pay for all treatments whether they work or not. These schemes are already being used successfully in other countries.
Pfizer is a US-based global pharmaceutical company present in over 180 countries with a strong research focus. It works in a variety of therapeutic areas, including oncology, cardiovascular health, vaccines, ophthalmology and infectious diseases
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 Navelbine Oral and its mainstay Fabroven evolved in Mexico?
A: Until 2016, Navelbine was the leading product in our oncology portfolio in the Mexican market, indicated for patients with breast and lung cancer. At the end of 2016, a new local generics competitor in the oral form of administration entered the market, which reduced our share. So far, despite this new competitive environment, Navelbine oral continues to grow and remains the market leader in the Vinorelbine oral segment.
Fabroven, the first product developed by Dr. Pierre Fabre, is a combination of ruscus extract, ascorbic acid and hesperidin methyl chalcone and it is indicated for the treatment of blood vessel conditions. After 50 years, this product continues to enjoy growth in sales in both the public and retail sectors. Fabroven has received the Grade A recognition for medicinal products, which places it in a better position in terms of scientific robustness. This certification will allow this mature product to continue surging in sales.
Q: How does Pierre Fabre remain competitive in the face of generics?
A: What makes products successful is the science behind them, whether they are generics or innovative, but a strong a commercial, sales and marketing mix is also fundamental. However, above all, it is the human talent. Our strong investment efforts are directed at training and compensating our sales and marketing collaborators.
Q: Which new products will Pierre Fabre introduce into the Mexican market in 2018?
A: After six years, we obtained the sanitary registration for Verephen, a product produced by our partner Medigene. Verephen is a phyto-pharmaceutical that has an equivalent
Pierre Fabre is the third-largest French pharmaceutical laboratory. It has two main lines of business: Pierre Fabre Médicament, which focuses on the pharmaceutical sector, and Pierre Fabre DermoCosmetics, related to dermatology and cosmetology
efficacy to other medications in its class for the treatment of genital warts. While the market for Verephen is not too large, this product will complement Pierre Fabre’s existing product portfolio for women’s health, an area in which we plan to continue focusing alongside oncology.
Pierre Fabre is also developing two new molecules acquired in joint efforts with Array BioPharma. We hope that these products bring new hope and improved quality of life to patients.
Q: What is Pierre Fabre’s strategy for Mexico?
A: In Mexico, we are focused on two strategic imperatives: continue the organic growth of our products in the woman’s health segment and increase our footprint in the oncology and bone marrow transplant markets. We will also continue looking for local partnerships similar to the existing alliance we have with Ferring Pharmaceuticals. We are also actively analyzing possible local acquisitions of companies or portfolios that fit our main activities.
Q: How can regulation evolve to improve access to innovative medicines?
A: Ideally, governmental administrations would work closely with industry chambers such as AMIIF and CANIFARMA and place a greater emphasis on fast-tracking innovative medications to accelerate their entrance into the market. Not all innovation is high cost. Industry chambers must continue to work together and act as a buffer between pharmaceutical companies and authorities to help us communicate the benefits for patients of innovative medications. All players in the industry would gain from working together.
Q: How can Big Pharma increase patient awareness of the benefits of innovative medicines?
A: This is an expensive area as it requires a significant marketing investment and close collaboration with medical societies and key physicians. Also, having the support of the main regulatory institutions and chambers strengthens these programs and allows them to reach the vast majority of the population.
For our melanoma treatment products to come, we plan to work more closely with key oncology societies and centers, as well as with the dermatology community. We also have a strong footprint with this community thanks to our products and we see an opportunity to realize synergies between both high-end medical specialties.
Q: What are Pierre Fabre’s short-term plans for Mexico?
A: We will continue expanding our brands and increasing market access. Accessing the institutional market in Mexico is challenging and requires real expertise. The sector has too many players and those that want to succeed must have robust teams with full know-how. We fully understand that the public healthcare system and institutions are under strong continued budget pressure, but this does not mean that innovation cannot have a fundamental role in the segment.
2018 will be a complex and challenging year both for the retail and the public markets. The retail segment will remain
relatively stagnant in terms of growth. We will also see more disruption in the distribution arena, as chain pharmacies will continue to seek direct purchases from laboratories and independent pharmacies will continue to downsize in numbers. The institutional markets will also face strong budget constraints and seek efficiencies and consolidated purchases will be a constant.
Q: Considering this competitive panorama, what are Pierre Fabre’s growth expectations?
A: Pierre Fabre will continue to believe and invest in Mexico. We trust in our products, we are strongly motivated and committed to continue delivering therapeutic solutions to physicians and patients, plus novel alternatives to come. We fully acknowledge that growth will also come while we remain strong in working together with the medical community, the different chambers, regulatory agencies, the distribution networks and fostering a more professional team of collaborators within our company.
ACQUISITION HELPS EXPAND THERAPEUTIC REACH
ERIK MUSALEM
General Manager of Gilead Sciences Mexico
Q: How do you expect Gilead’s Kite Pharmaceuticals acquisition, completed in 2017, to impact your operations?
A: Gilead has focused on infectious diseases, especially HIV and hepatitis B and C, for a long time and the company’s R&D is distinguished by its investment in areas with unmet medical needs. We are now looking to increase our presence in other therapeutic areas and this was the reason for purchasing Kite Pharmaceuticals. Through Kite Pharmaceuticals, we are entering oncology as the therapy we acquired involves extracting plasma from patients and developing individual treatments for them.
Q: In what way is the relationship between Gilead Sciences Mexico and the public and private sectors established?
A: We are direct providers of treatments for hepatitis. For HIV we work through Stendhal, a leader in the treatment of HIV/ AIDS. More than 90 percent of sales go to the government. Gilead Mexico leads the hepatitis and HIV therapeutic areas with a 60 percent market share. We are leaders in both Mexico and the rest of the world in these segments.
Q: What processes do you implement to ensure the efficiency of your operations?
A: We opened our offices in Mexico in 2005, but in 2017 we decided to restart from scratch. We instituted a long-term investment project that includes the establishment of a more solid structure and the appointment of a new CEO. The goal is to strengthen all areas of the company with the best talent available in the market. This is a five-year plan and so far we have achieved good results in the hepatitis segment.
Q: How does Mexico contribute to Gilead Sciences’ global revenues?
A: We have access operations in Central America and in the Southern Cone, while in emerging markets we apply a business model that adapts to the needs of each country.
Gilead Sciences is a biopharmaceutical company focused on innovative medicines. It concentrates on HIV/AIDS, liver diseases, hematology, oncology, cardiovascular and inflammation, among others
This is the case of Mexico and Brazil, two of the world’s Top 15 markets. Brazil is above Mexico, but Mexico is more stable because of patent protection laws and its demographics. It is also a market with many potential patients, since 1.4 percent of the Mexican population has hepatitis, but only 3,000 patients are receiving treatment.
Q: Why does Mexico have such a high prevalence of hepatitis? How do you reach out to patients?
A: Many cases are due to blood transfusions performed years ago under inefficient quality controls, but there are also patients who became infected through the use of intravenous drugs or through sexual transmission. The largest population with hepatitis is over 40 years old and many do not know they have it until they develop cirrhosis. We are working together with the government to raise awareness and promote early diagnosis.
Q: In 2016, Gilead Sciences partnered with more than 2,000 organizations to improve access to health. What was the impact in Mexico of this decision?
A: Gilead is working with government institutions to improve access through creative plans. The percentage of GDP that Mexico invests in health is one of the lowest in the OECD. Health must definitely become a priority in the next presidential term. The industry should take a step forward and start providing services to become a partner. This would allow the government to maximize access. Our company is one of the leading corporate donors for infectious diseases.
Q: To what extent have you been affected by expiring patents and what drugs are being created to counteract this?
A: Our hepatitis products are very new so we are not dealing with this situation. With HIV, we have been leaders 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 generics in a legal way. Between now and 2020, we will launch three products targeting hepatitis and four for HIV. We have a strong pipeline for fatty liver and before 2020 we will have new products in this area.
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 access to health in Mexico?
A: Chiesi focuses on three main therapeutic areas: respiratory, neonatology and rare diseases. Despite the competitive respiratory environment reflected in the Mexican market, the key element of differentiation is the drug formulation. Thanks to its focus on research and development, Chiesi developed an extra-fine particle formulation that enables the drug to reach and treat both large and small airways (peripheral arteries of the lung), while all our competitors can only reach the large airways. In neonatology, Chiesi is a world leader in the treatment of pre-term infants affected by respiratory distress syndrome (RDS) thanks to CUROSURF, a natural surfactant in intra-tracheal suspension. Launched in Mexico in 2004, it gained an uncontested leadership and contributed to save the life of more than 3.5 million babies worldwide. In the rare and ultra-rare diseases segment, Chiesi is continuously cooperating with universities and institutions to reduce unmet medical needs and their social impact.
Chiesi Mexico is the uncontested leader in neonatology with CUROSURF and PEYONA, which represent around 70 percent of total turnover. Additionally, the company is committed to developing its respiratory line, launched less than four years ago, improving diagnoses and treatment of asthma and COPD.
Q: How does Chiesi build successful alliances to license, develop and market medicines that improve patients’ lives?
A: Chiesi interacts with all Mexican stakeholders, both in public and private sector. In special care, sales are distributed 70 percent to the government and 30 percent to the private sector, while in primary care the almost the entire business is done in private sector. However, Chiesi 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 patients and gather information on the composition of the patient population. In all our divisions, we collaborate with public-private institutions, hospitals, research centers,
universities and other pharmaceutical companies to pursue the concepts of innovation and patients’ centricity.
Q: What role does Mexico play in Chiesi’s Latin America strategy?
A: Chiesi’s revenue totals US$2 billion per year and Mexico represents around 15 percent of its total revenue in Latin America. Besides Mexico, the company has another affiliate in Brazil; all other countries are covered by indirect operations. Chiesi wishes Mexico’s participation to be more in line with the market potential and the size of the country’s population.
Q: Constant innovation is vital for the pharmaceutical market to grow steadily. How does Chiesi contribute in this area?
A: At the moment, we do not conduct R&D in Mexico but we are collaborating with doctors in our global network and the country to participate in research for the products that we have already launched. Most of our R&D work takes place in Europe and in the US, so it is not urgent to develop this division in Mexico, which might offer the necessary incentives and legislation to promote innovation. Besides the big changes already done, the health authorities could accelerate regulatory processes while maintaining the firmness of their assessments to attract more investment.
Q: What actions is Chiesi taking to improve its competitiveness in Mexico?
A: Mexico recently signed a trade agreement with the EU and we hope our operations can benefit from this treaty. This year has generated some uncertainty by the relation with the US. Chiesi faces this uncertain environment with a redesign of its commercial strategies. We hope that once the political uncertainty has passed, the acquisition of pharmaceutical products by public institutions continues.
Chiesi Farmaceutici is a pharmaceutical company based in Italy and founded in 1935. The company has 26 subsidiaries, three manufacturing plants, five R&D centers and distributes its pharmaceutical products in more than 60 countries
INNOVATION AND REGULATION KEYS TO IMPROVING SYSTEM
JAVIER AMTMANN Director General of Menarini
Q: Menarini is an Italian pharmaceutical focused on OTCs. In what areas do you see potential in Mexico and Latin America?
A: Latin America is an interesting pharmaceutical market with potential. We have a strong presence in Guatemala and we have been working for 35 years in Central America. In the rest of Latin America, we are expecting a significant growth in the next few years. In the near future, we have a strategy to take full advantage of the opportunities in the region and Mexico and Brazil are the markets where we have identified the greatest potential. As part of this strategy, we want to focus on different therapeutic areas, mainly in cardiology and gastroenterology. We are also evaluating the introduction of a dermatological product line and consumer OTC products.
Q: How does Menarini use innovation to address the main health concerns of the Mexican population?
A: Menarini is investigating different molecules in the five research centers that we have in Europe and in other centers. We also modify the molecules to create new products, although this takes a long time to achieve and is an expensive process. We have plans to include more innovation within our product lines. Our goal is that these new molecules offer more therapeutic benefits and fewer side effects.
Q: What research opportunities has Menarini identified in Mexico?
A: The pharmaceutical industry in Mexico has been working with other key stakeholders to attract more clinical studies from European, US and other foreign companies. Mexico has infrastructure, research centers, doctors and enough patients. In the long run, this will improve the access to innovative products for the public health system and private sector. Mexico should offer the research segment
Menarini is an Italian pharmaceutical company focused on the development of OTCs. The company produces innovative and biotech drugs for pain, cardiovascular diseases, derma, gastro and respiratory system
the same quality and service standard that is offered in other countries. For instance, in the US more than US$160 billion is invested in research, of which 60 percent goes to clinical studies. There is great potential, but we need to be more competitive.
Currently, Menarini is developing a product in Mexico; once the development is finished, the clinical trials will be carried out in the country. We are working in partnership with the University of Veracruz, the Monterrey National Autonomous University and with some hospitals. COFEPRIS is also collaborating with us in this process.
Q: What do international companies expect from the Mexican healthcare market?
A: The population pyramid is reversing, the birth rate is declining and the population is aging, which represents a potential market for companies. Therefore, they are focusing on chronic illnesses and/or noncommunicable diseases. The improvement of health systems in Mexico will generate more demand. In Mexico, health-related markets are growing much more than in other parts of the world, so this is an opportunity.
Q: How can the industry contribute to a healthier Mexico?
A: It is important that in Mexico we move from a treatment scheme to a preventive scheme. This is a cultural change that requires time, maybe generations, but it has proven to be successful in the countries where it has been adopted. We need to move in this direction. The Ministry of Health and the Ministry of Education have been working together to implement new procedures and to teach children how to take care of their health, which is where the cultural change will take place. Despite the existence of IMSS, ISSSTE, Seguro Popular and other health institutions, 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 corporate organizations such as CCE and CONCAMIN have been working on the development of a proposal for a health reform, which will be presented to the next administration.
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 executive like you?
A: Our main priority is the patient, so Novartis plans to continue launching innovative, generic and bioequivalent medicines of the highest quality to continue supporting our solutions to more than one billion people around the world. Health systems around the world face great challenges such as the aging of the population. By the year 2030, there will be close to 1.4 billion people worldwide over 60 years, which will increase the prevalence of chronic-degenerative diseases. I want to bring more digital innovation and technology with comprehensive health services to have a greater impact in Mexico and the world.
Q: Most of Novartis messages are directed to patients, their families and doctors. What is the message for those other players who are crucial to you?
A: Novartis takes special care of all its relationships. From civil society to the authorities, going through our entire value chain, our message is from a leading company that is crossing the borders of medicine to prolong the lives of people. Regardless of the relationship scheme, whether employee, partner, supplier or any other type, our collaborators can rest assured that Novartis will always adhere to its code of ethics and the legal framework. Novartis is currently among the 20 companies with best reputation in Mexico, according to the ranking published by MERCO.
Q: Novartis invests around 20 percent of its profits in R&D for innovative products. What are the three most effective therapeutic areas in Mexico for Novartis?
A: Novartis has more than three therapeutic areas growing in Mexico. In our pharmaceutical and oncology divisions, we are bringing innovative solutions for cardiovascular diseases, breast cancer, autoimmune diseases, transplants, Alzheimer’s and migraine. Through our generic division, we are launching an HIV line to increase the population’s access to high-quality medicines. These solutions generate a cost-efficient relationship that benefits the health system. We have examples of transformative, innovative and high quality treatments in each therapeutic area of our portfolio. For example, Novartis treatment for refractory
pediatric leukemia, approved by the FDA, has a worldwide presence. Yet, our Center of Excellence for the Treatment of Diabetes represents the main priority for Mexico. Today, we are achieving levels of diabetes control above the national average.
Q: How is Novartis planning to approach Mexico’s epidemiological changes and what opportunities are there for developing innovative medicines?
A: Novartis is addressing this transition in four different ways: through innovative medicines, quality in generics and bioequivalents, innovation in our business model and the incorporation of digital tools. When I talk about innovation, I do not only refer to the medicines we produce, but also to our business model, which allows new therapeutic solutions to be available for the population. Novartis applies in Mexico the Risk-Sharing Model, which is an example of an innovative business scheme used to face the budgetary challenges that afflict all public health systems throughout the world. The distinctive feature of this scheme is based on the pay-for-results approach and not the number of units sold. This dynamic transforms our relationship with public health institutes because we are evolving from a transactional model to a more advanced one in which we offer value-based health solutions.
Digitization is also essential to address the epidemiological transition in Mexico. Novartis is incorporating technological and digital tools in its operations to improve its next chapter of medical innovation. We believe that the companies that will be most successful in the future are those that see this transformation as an opportunity. Under this logic, we are re-imagining Novartis as a drug and data science company. We see our collection of data as a strategic asset that places us in a leading position to guide the digital revolution in the pharmaceutical industry.
Novartis is a multinational pharmaceutical company headquartered in Switzerland with presence in over 140 countries. In Mexico, the company manufactures and commercializes innovative medicines
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 research into practical products or services for the Mexican health system?
A: There is a significant gap between a promising result obtained in a research laboratory and the commercialization of that product as a pharmaceutical. This phenomenon is not exclusive to Mexico but it is seen in laboratories all over the world. The projects that reach the market are few and far between, as there are many obstacles along the way. One of the main problems is acquiring funds to materialize these projects. For this reason, researchers often have no motivation to undergo the extremely long and expensive process required to patent an invention and convert it into a product that can be commercialized. For a project to succeed, the researcher must submit to this extremely long process. Translational medicine aims to solve this problem by linking laboratory research with final outcomes.
The first step in establishing this connection is for scientists to understand the development process and the requirements and schedules companies have when launching products. UNAM’s DGV finds both interested scientists and companies and acts as a mediator for the creation of collaboration agreements, through which the projects are financed and companies can license successful results. We facilitate the patenting process to researchers. We are also promoting projects alongside the National Consortium of Research in Translational Medicine and Innovation (CONIMETI) to facilitate the transference of innovation from research laboratories to companies. The goal is to bring together all sectors to facilitate the translational process for health-oriented research.
Q: How big a role does healthcare research play at the DGV?
A: Most of the department’s projects are related to healthcare, but the main problem is that it is extremely hard
UNAM’s Technology Transference Department (DGV) helps scientists at UNAM and other universities to patent their research through alliances with private companies, which can later acquire and commercialize the technology
for projects in this area to undergo the entire transference process. Most of the healthcare projects that have successfully finished the process are related to veterinary products, an area that is not as strictly regulated.
The office is supporting many different projects, some of them done alongside other universities, research institutions and even private companies. We are coordinating the first full translation from research laboratory to a company in the medical sector, but we have more projects in the pipeline. One project that is nearing completion is a derivative of Amphotericin B, a powerful antifungal used only for serious, potentially-deadly infections, but which has fewer side effects. Another advanced project is the generation of virusbased vaccines for veterinary applications. Other projects that are in the pipeline include the generation of peptides to fight tuberculosis, a medical device to detect acute kidney damage, antivenoms for scorpion bites, molecular markers for the detection of cervical cancer and an in vitro test for the early detection of hepatic fibrosis and bisphenol A-glycidyl methacrylate (BisGMA)-free dental adhesives.
Q: How does DGV create awareness of the importance of the transference of technology?
A: It is necessary to fully change Mexico’s research culture to promote the transference of technology. The transference of technology can be financed through CONACYT’s Research Stimuli Program, which grants companies funds so they can invest in R&D alongside academic research groups. CONACYT also offers Sectorial Innovation Funds (FINNOVA), which can be used to financially support the patent process but these have been inactive for a while. Together with the researchers, the company sets goals and a timeline and both sign a development contract wherein the company makes an initial payment to the research group. Once the project 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 of the profit from the sale is awarded to the authors, 30 percent to the research institution and the remaining to administration. These financial rewards act as stimuli so researchers invest more time in patenting their products.
A FOCUS ON BOTH SCIENTIFIC DEVELOPMENT, SALES
DAVID LÓPEZ Country Manager at BioMarin Pharmaceuticals
Q: The annual 2018 BioMarin report mentions an increase in demand for Naglazyme in Latin America and Europe. What is the demand in Mexico?
A: There is a high prevalence of the Mucopolysaccharidosis VI (MPS VI; Maroteaux-Lamy Syndrome) in Latin America since the region contains 400 of the 1,000 patients estimated to exist worldwide. However, compared to other countries in the region, Mexico has a lower demand for this orphan drug due to a lower prevalence. Another product called Vimizim has the potential to generate more demand in the Mexican market. Vimizim has the potential to treat around 100 people suffering from Mucopolysaccharidosis type IVA (MPS IVA; Morquio A syndrome) in the country and it has a wider distribution. This orphan drug is projected to have the highest demand in Mexico.
Q: Given the difficulty of commercializing orphan drugs in Mexico, how does BioMarin’s business model differ from others in the market?
A: A combination of knowledge and expertise is necessary to diagnose rare diseases and thus be able to prescribe an orphan drug. BioMarin’s business model is different from other biogenetic companies because we can focus on both scientific developments and sales. The remuneration we obtain from marketing our products allows us to boost investment in new therapies.
Q: What expectations does BioMarin have for COFEPRIS’ new Committee for Special Attention for Rare Diseases?
A: Regarding the creation of this new division, we really hope it will lead to a simplified registration process for our products; however, the main problem does not depend on COFEPRIS. BioMarin manufactures orphan drugs for rare diseases with a small patient base and it faces several access barriers in other steps of the process to market its products. There are three steps to follow: 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 third step because we must convince several payers such as IMSS, ISSTE, Seguro Popular and PEMEX to consider us in their budgets.
Q: What is your agenda with the Mexican Federation of Rare Diseases (FEMEXER) and with the Commission for the Analysis, Evaluation, Registration and Monitoring of Rare Diseases (CAERSER)?
A: The relationship BioMarin has with organizations like FEMEXFER is key to our development because we are a publicly-listed company and industry regulations do not allow us to have direct contact with patients. We also believe that the foundation of CAERSER was key for the industry because it is necessary to increase the visibility of rare diseases. We hope for a rapid development of the CAERSER projects and that these types of organizations will help to further open the government to these drugs because no new orphan drug has been introduced since 2011 at the major payers (IMSS/Seguro Popular).
Q: What concrete actions does BioMarin carry out to improve genetic research in Mexico?
A: Mexico is not yet an ideal country for research in gene therapy but the implementation of some improvements in the health and regulatory systems would create a better environment for companies like BioMarin to improve local investments. Our expectations for 2018 are to win the approval of Vizimim to help those who suffer from Morquio A Syndrome and to establish stronger alliances with the government to accelerate the release of our product.
Q: BioMarin will produce biologics after acquiring Pfizer’s biologics manufacturing plant in Ireland. What is the expected impact for Mexico?
A: The plant in Shanbally, Ireland, is an important asset in manufacturing for the commercial diversification of BioMarin’s production because it helps us not to be dependent on a single center. A big part of our production is in Shanbally and this fact guarantees the drug availability to the Latin American patients.
BioMarin Pharmaceuticals is an US biotechnology company and a world leader in developing and commercializing innovative biopharmaceuticals for rare diseases driven by genetic causes. It has offices in North America, South America, Asia and Europe
CONTRACEPTIVE METHODS AND THE CHALLENGE OF SEXUAL HEALTH
MAURICIO MENDIETA Director General of Gedeon Richter
Q: What attracted Gedeon Richter to Latin America, and Mexico in particular?
A: Latin America represents 25 percent of the world market in the areas of reproduction and contraception and Brazil and Mexico account for 80 percent of the healthcare market for women in Latin America. To enter Latin America, we first decided to consolidate a vanguard portfolio in women’s healthcare. After consolidating our presence in Europe, Northern Africa and Asia came the expansion to Latin America and to achieve this, the company bought PregLem, a Swiss company focused on the commercialization and development of Selective Progesterone Receptor Modulators (SPRM) and Ulipristal Acetate (UPA). This helped us bring to market the company’s most important product at this time: Esmya, an ulipristal acetate for the treatment of uterine fibroids. Gedeon Richter also acquired Finox Holding, also a Swiss company, which has an infertility portfolio and that will lead us to the release of Bemfola in Mexico, a recombinant-human follicle stimulating hormone.
Q: What is Gedeon Richter’s main objective in Mexico and how will it achieve this goal?
A: We have two strategic objectives. The first is to consolidate our presence in the women’s healthcare portfolio. We will participate in therapeutic areas such as fertility control, menopause management and gynecological therapy, but also in new areas such as diagnostic devices and we will be the first pharma on detailing diagnostic genetics, starting with a Non-Interventional Pregnancy Test (NIPT), in a strategic alliance with Roche. The second step is to consolidate a specialized-medicine business unit with a focus on biosimilars. Our goal is to become a profitable and sustainable company following international processes.
Q: How does innovation support Gedeon Richter’s business model and objectives?
Gedeon Richter is a multinational pharmaceutical company founded in 1901 in Hungary. It started operations in 2000 in Mexico and its main areas of expertise are gynecology and the central nervous system
A: We seek to satisfy the needs of doctors and patients with a specialized portfolio built to high-quality standards. This objective requires not only an innovative portfolio but also innovation in the commercial approach.
Q: What benefits can the Mexican healthcare system achieve through the use of your new therapies like Esmya?
A: With Esmya, we expect to decrease 40 percent of direct costs for the treatment of uterine fibroids in Mexico. We also will offer Criprazine, the first anti-psychotic approved by the FDA in the last 25 years, for the treatment of bipolar disorder and schizophrenia. Finally, we will offer new alternatives for government institutions through our biosimilars portfolio.
Q: What do you believe is the main health issue for women in Mexico?
A: Sexual and reproductive health. We must help to open access to contraception, postpartum and post abortion contraception. Today, 50 percent of our teenagers embark on an active sexual life without contraceptive protection, despite the availability of information regarding contraception methods. There are 400,000 abortions per year in Mexico. We have to protect the reproductive future of our young women and teenagers. The challenge is to change this risk status with contraception access and ensuring access to contraceptive technology.
Q: How aware are Mexican women about the importance of their reproductive health?
A: Between 80 and 90 percent of young women are aware of contraceptive methods but approximately 50 percent of women do not use any form of contraception the first time they have sex. There is a dichotomy between the level of knowledge and real actions. It is 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. We are not trying to replace the doctor’s role but to provide complementary information. In fact, all players must take responsibility to provide women with proper and balanced information.
ELECTRONIC eSIGHT GLASSES ARRIVE IN MEXICO
GUILLERMO FERRARI General Manager of Thriven
Q: What prompted Thriven to introduce eSight electronic glasses for the visually impaired to Mexico?
A: We arrived in Mexico at the beginning of 2018 with the license to distribute eSight electronic glasses. When we arrived we already had a list of 300 clients with low vision waiting to try them. Thriven is responding to a demand in Mexico for technological products that help with vision loss resulting from life habits, congenital pathologies or diseases such as Stargardt’s Disease, diabetic retinopathy and hypertension.
Q: What makes eSight glasses indispensable to people who have low vision?
A: eSight electronic glasses are a Canadian technology breakthrough for low vision patients. The lenses are equipped with a high-speed and high-definition camera 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 users can gain sharpness in their otherwise blurry vision. This enables them to see familiar faces and objects with clarity and in some cases being able to read again, thus
allowing them to regain a more autonomous and fulfilling everyday life.
Q: How can the general population access eSight glasses?
A: The product comes with a price tag of US$12,760, which is a cost barrier for many people. We are approaching institutions that have contact with patients who need our glasses and government entities interested in financing our product. We expect the product will be attractive for the health sector given the benefits it offers.
Q: What are Thriven’s plans for the company in Mexico going forward?
A: We want to grow our customer base to bring the technology closer to the patients who need it by providing financial accessibility.
Thriven holds the rights to distribute eSight electronic glasses in Mexico. The technology is geared toward helping people who are legally blind as a result of a wide set of pathologies or diseases
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.
IN PURSUIT OF NEW AVENUES OF ACCESS
DANIEL AMEZCUA Director General of UCB
Q: How do UCB’s products provide value to patients?
A: The industry is undergoing many changes, more than it was previously used to. In this regard, the company remains focused on the client, aligning with their needs and interests. We understand that countries and international markets may face volatility, but we manage each country independently, so they do not affect each other. This allows us to focus our efforts on the needs of each market.
We also try to work alongside public and private institutions to create products that are needed and to ensure that patients have access to them. That also constitutes part of our added value: finding new ways for patients to access to our medications.
Seguro Popular had 54.9 million people affiliated in 2016
We believe that patients need to be empowered through information. When patients visit their doctor, they already have information. We want to make sure the information they have is correct so that they can make the best decision.
It is important to include patients in the treatment cycle because if the patient does not take the medication or does not follow the indications prescribed by the doctor all our efforts are in vain. We also consider prevention; that is, what the patient must do to avoid certain diseases.
Q: What opportunities does the company see in Mexico and what is its approach to take advantage?
A: There are many opportunities in Mexico, especially when it comes to access and delivery of medications to more patients. To achieve this, we are contemplating
UCB is a biopharmaceutical company that has specialized in serious diseases since 1928, mainly in two therapeutic areas: neurology and immunology. It is present in 40 countries with its key products Cimzia, Vimpat, Nubrenza, Keppra and Briviact
working with Seguro Popular, which would give around 55 million people access to our medications. Given that Seguro Popular focuses on diseases such as cancer, HIV and diabetes, we know that they do not have biological products such as ours.
For instance, a person with rheumatoid arthritis cannot be treated by Seguro Popular with a biological product. We are talking with state authorities to change this but that is also why we look for alliances. We understand that cost pressures are very high and that we have to be team players and work alongside the institutions to ensure that we provide a benefit to the biggest possible number of people.
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 of innovation alongside the students of Georgia Tech. We are also working to collaborate with some Mexican universities to foster not only academic exchanges but also to generate real-world evidence.
Q: What are UCB’s midterm plans in Mexico?
A: Mexico still offers significant opportunities to grow and to generate more access to health solutions. The problem Mexico has is that, on one hand, you have all the technology advances and on the other, you have a bulk of the population that does not have access to neither medicines nor doctors. When you have this type of imbalance in the country, it generates a great number of access opportunities.
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 believe that Seguro Popular or whatever institution takes over in the coming years will be a great step towards increasing access to healthcare and bring these services closer to a larger percentage of the population.
COORDINATED EFFORT NEEDED FOR STEM CELL PROGRESS
Q: Could you give us some background on GIINT’s business line?
JL: Our focus is on longevity and regeneration. Our approach is to study the molecular mechanisms that underlie aging and regeneration by using the therapeutic properties of mesenchymal stem cells. Our goal is to use what we learn to improve human health by slowing the physiological decline associated aging and to stimulate regeneration of damaged tissues. These are going to be two of the most therapeutically promising areas to prolong the healthy years of life.
Q: What is it that interests GIINT in age-related disease and regenerative medicine?
AF: It is hard not to be interested in these topics as everyone ages. Adults experience declines in tissue function and quality of life as they grow older, and an increase in our understanding of how stem cells can slow down or even revert these processes has put us in a special position. For the first time, we actually have the potential to ameliorate the decline in health that we all experience.
Q: What are the potential clinical implications of your research into the molecular mechanisms underlying the life-prolonging effects of mesenchymal stem cells?
JL: We base our research on the mesenchymal stem cells properties based on evidences with strong support of different teams such as basic science, translational medicine and medical specialist. As the cells have properties such as anti-inflammatory, immunomodulation, angiogenesis, homing, and anti-fibrosis they open a new horizon and possibilities for different age-related processes and quality of life decline.
Q: How is GIINT collaborating to support local and 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 this mission guides all our activities. We are making advances in Basic Science and Transnational Medicine. In direct collaboration with national research centers like
CINVESTAV, CIATEJ, UNAM and international players in US, Israel and South America.
Q: What are the challenges you have come across in your business?
JL: There have been lots of challenges. But also, science and state-of-the-art discoveries are faster than regulations and policies making. We know that authorities and specialist need to work in synergy in order to develop outstanding laws and normativity. Through our bio-ethical and scientific committees, we approach the authorities giving evidence of different protocols that can help the patients. We strongly believe that working as a whole unit, the patients will be the most benefited with these avant-garde techniques.
Q: What are the next steps in your research?
JL: We are starting to venture in the fascinating process of neuro-regeneration in neurodegenerative diseases such as multiple sclerosis, spinal cord injury, Parkinson’s and Alzheimer’s with the use of dental pulp stem cells and neurotrophic factors secreted by them.
Q: What are the challenges in regenerative medicine?
JL: Regenerative medicine has been enthusiastically received as it holds the potential to make further interventions redundant. Also, it may provide solutions for as-yet-untreatable conditions, and it may benefit anyone from neonates (possibly even fetuses) to the elderly. All medical fields have embraced it, from dentistry and orthopedics to neurosurgery and cardiology.
AF: Another milestone for the regenerative medicine field is the ability to automate manufacturing for technologies that are often personalized and to do so in an effective manner that allows for products to be scaled up at a reduced cost.
Grupo Impulso de Incentivación para Nuevas Tecnologías (GIINT) is a biotechnological company focused on generating new ways of adding value to the available treatments with stem cells and its sub-products for regenerative medicine
Juan Carlos López Co-Founder of GIINT
Abraham Franklin President of GIINT
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.
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 Diego Ávila, Cecyc Pharma
297 ROUNDTABLE: What Would Encourage You to Perform Pre-Clinical and Phase I Trials in Mexico?
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, every drug must undergo an extensive process to measure its efficacy and safety, together with a comprehensive review of side effects from the common to the rare. This process aims to ensure that only the most effective medications become publicly available, that the risks of taking a medication do not exceed their potential benefits and that patients and healthcare providers know of all risks involved in any treatment. This assurance takes time and there are no guarantees of success.
According to the International Federation of Pharmaceutical Manufacturers & Associations (IFPMA), for every 10,000 compounds tested during the drug discovery process, only 250 compounds reach the preclinical trial phase. In total, each chemical or biological entity tested has less than a 0.01 percent chance of overcoming this phase, which is known as the research stage.
Clinical trials take on average between six and seven years and up to 65 percent of the budget assigned to the development of a medication. They are divided in three phases. Phase I requires between 20 and 100 healthy volunteers to determine appropriate dosage. Phase II requires between 100 and 500 patients to measure efficacy and side effects, while Phase III requires from 1,000 to 5,000 patients and measures efficacy and safety. Besides being the most expensive and time-
REGISTERED STUDIES BY YEAR (thousand) *As of Aug. 5, 2018. Source: Clinicaltrials.gov.
Clinicaltrials.gov. *As of Aug. 5, 2018.
consuming part of the development process, clinical trials also have a very small success rate. A molecule that passes the preclinical trial phase has only a 9.6 percent chance of passing all clinical trials to be approved for commercialization. Once the medication is approved, there are Phase IV trials, also known as post-market trials, performed continuously during the product’s commercialization to continue tracking the drug’s safety and side effects.
As the pharmaceutical and medical devices industry grows, so does the number of clinical trials necessary before their approval.
IFPMA states that due to their expensive and timeconsuming nature, clinical trials require a series of enabling features that allow the optimal performance of these tests to optimize results. These include an efficient and supportive regulatory system, a well-regulated system for enrollment, good medical schools, research centers, hospitals and doctors, as well as a growing market receptive to innovation.
With its large population, closeness to the US, welltrained physicians, large network of public hospitals and responsive regulatory entity, Mexico looks on paper as an ideal destination for clinical trials. Moreover, according to ProMéxico, the country is the largest exporter of medical devices in Latin America and the eighth-
largest in the world. Mexico is also the leading exporter of pharmaceutical products in Latin America and the second-largest market for pharmaceuticals in the region.
However, of the 279,974 clinical trials performed worldwide as of August 2018, only 3,103 were performed in Mexico, according to clinicaltrials.gov. This means that only 1.1 percent of all clinical trials are done in the country. Although this figure seems to be consistent with Mexico's population, which represents 1.6 percent of the total world 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 experience in clinical research and experience implementing protocols in diverse therapeutic areas, according to ProMéxico. Furthermore, the country offers competitive costs, 237 research ethics committees to approve protocols and many approved research sites.
For years, industry players have tried to help this sector take off. “Many initiatives are being developed to strengthen clinical trials; we just have to nail them down,” says Karen Hahn, Program Director for ICON. Among those initiatives are collaborative plans to work
with IMSS, the largest provider of healthcare in Mexico and the institution with the largest number of potential patients. Another that has been addressed, although not completely, is the long approval times COFEPRIS takes to authorize a clinical trial. “Other countries can begin clinical trials in three to six weeks while we have to wait 90 days. While Mexico does not have the most competitive times, the country does have excellent researchers and that makes the wait worth it,” says Israel Vega, Clinical Operations Manager of PRA Health Sciences.
Of the 279,974 clinical trials performed worldwide as of August 2018 , only 3,103 were performed in Mexico
To address slow approval times, COFEPRIS created several centers that pass preliminary judgment on clinical trials for medicines and medical devices, called Unidad Acreditada de Apoyo al Predictamen (UHAP). However, “only a few are fully functional,” says Hahn.
REGISTERED AND REGISTERING STUDIES BY LOCATION (percent)
PERCENTAGE OF REGISTERED STUDIES BY LOCATION
280,459 studies registered
PERCENTAGE OF RECRUITING STUDIES BY LOCATION
Location not provided
Both US and non-US US only
Non-US only
47,676 studies recruiting
48% Non-US only
35% US only
5% Both US and non-US
12% Location not provided
Among the main advantages for future clinical research in the country is the framework to promote clinical research, signed in January 2017 by COFEPRIS, SAT, IMSS and industry representatives. This agreement will allow CROs to conduct clinical trials at IMSS and 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 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 and personnel necessary to perform these trials and provide the necessary administrative support,” says Cecilia Moreno, Director of Clinical Management at PPD.
57% Non-US only
38% US only
5% Both US and non-US
Source: Clinicaltrials.gov August 5, 2018.
Location not provided
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,” says Luis Hernández, President of ACROM.
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 Clinical Research (APEIC) help to improve clinical research in Mexico?
A: We are collaborating with other associations, such as CANIFARMA, AMIIF, the CRO’s Alliance of Mexico (ACROM), the Association of Physicians of the Pharmaceutical Industry ( AMIFAC), the Mexican Association of Professionals in Sanitary Regulation Responsible ( AMEPRES) and the Mexican Association of Pharmacovigilance (AMFV) to create events related to clinical research. In general, we follow the criteria set by TransCelerate, a globallyrecognized pharma organization.
Q: What values does APEIC represent for the industry?
A: APEIC provides a voice to everyone involved in clinical trials. We have three objectives: increase the number of professionals working in the sector, bring together all interested parties to increase our global competitiveness and spread the message and promote Mexican clinical research locally and internationally. APEIC brings together all professionals and associations that perform clinical research and related activities.
Q: What are the main barriers for scientists and doctors wanting to begin clinical research studies?
A: Researchers must be open to learn highly advanced Good Clinical Practices (GCPs) and Good Documentation Practices (GDPs). The sector is highly regulated and undergoes constant audits, so researchers must adhere to a large number of national and international regulations.
Requirements to perform clinical trials are extensive, so companies prefer to work with experienced centers that have good facilities, strong ethical committees and qualified teams. The association’s goal is to increase the number of centers in Mexico that meet these criteria. Together with
The Association of Professionals Specialized in Clinical Research (APEIC) promotes education in clinical research by linking experts in the subject, including researchers, professors, regulatory authorities, ethics committees and patient associations
the regulatory authority in Mexico and the Autonomous University of Nuevo Leon ( UANL), we are generating a national registry of the number of centers that are conducting clinical research. By now, we roughly estimate that the country has between 600 and 700 active sites.
Q: How is APEIC promoting Mexico as a destination for clinical trials?
A: During early 2017, AMIIF began an initiative to fuel clinical research in Mexico alongside COFEPRIS, the CONBIOETICA, the Coordinating Commission of National Institutes of Health and High Specialty Hospitals (CCINSHAE), ProMéxico and the main academic institutions, pharma companies and CROs, with the goal of raising awareness of the potential that Mexico has regarding clinical research. This initiative brings together for the first time the industry, including CROs and pharmaceuticals, academia and the authorities. One of the first results was the publication of a booklet to promote Mexico at international conferences and meetings. SAT is also working on this initiative to streamline imports related to clinical research. The goal of this interdisciplinary and multi-institutional initiative is for Mexico to enter the Top 10 countries with the largest number of clinical trials within the next five years, taking advantage of Mexico’s several significant and natural advantages. Just to have a point of comparison, South Korea is among the Top 10 countries in number of trials but has only a third of Mexico’s population.
Q: How is APEIC working with local authorities to streamline clinical trials in Mexico?
A: Although we should recognize that COFEPRIS has improved greatly over the last four years, there is still room for a greater contribution. The commission is a leader in the region in several areas, including its approval times, but 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 of the three committees currently needed to approve clinical trials into a single entity. Authorities are aware of the existing hurdles and are working alongside us to solve these matters.
CLINICAL TRIALS CAN BENEFIT PATIENTS, MEXICO’S ECONOMY
LUIS HERNÁNDEZ President of ACROM
Q: What is ACROM’s role within the healthcare ecosystem?
A: Our goal is for pharmaceutical companies to see us as reliable partners. The pharmaceutical industry has put its trust in companies affiliated with ACROM, so our goal is to meet its expectations. ACROM was created to strengthen clinical research in Mexico and to comply with international standards to make the country attractive to foreign companies. Mexico's image as an unpredictable country would hinder investment and trials. The association promotes regulatory changes to ensure that regulators comply with established deadlines. ACROM works closely with its clients, centers, institutes and hospitals to attract patients for trials.
Q: What can clinical trials represent for Mexico in terms of investment attraction?
A: 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. COFEPRIS and the government want to canalize this investment to the public sector but the challenge is that these payments are forbidden by law. Thus, the first step is to change the rules. The sector is unwilling to invest if there is not enough transparency.
Q: What do CROs need to do to bring more clinical trials into the country?
A: Many CROs are international companies and we, as their Mexican representatives, keep pushing their head offices to bring more trials to Mexico. Even though tests performed in the country are trustworthy, the objection we hear is that timelines in the region are unpredictable. For instance, the earthquake of September 2017 greatly damaged COFEPRIS’ main offices, paralyzing the council for three months.
Q: What are the main objectives behind ACROM’s recent partnership with CETIFARMA?
A: All CROs in Mexico should produce quality, transparent information. For that reason, we allied with AMIIF and signed a collaboration agreement in 2018 with CETIFARMA. This agreement also will facilitate the close monitoring of ethics compliance in clinical trials.
This is a self-regulation principle taken by CROs that will help to improve Mexico’s transparency regarding clinical trials. The agreement between ACROM and CETIFARMA has been fully supported by the industry and by COFEPRIS. It sets an important precedent for self-regulation. The main goal for 2018 is for all companies that belong to ACROM to guarantee transparent operations.
Q: Mexico’s strong potential for clinical trials is an objective but not a reality. How can this be changed?
A: Just having good intentions is not enough. We are working with AMIIF to bring pharmaceuticals and CROs together and ProMéxico is promoting the sector internationally. Operations have improved thanks in part to oversight of clinical trials by the National Commission of Bioethics (CONBIOETICA).
Several years ago, Mexico had a boom in clinical trials, but at that time the country lacked the infrastructure and the appropriate regulations to carry them out, which left a negative image. Before incorporating more clinical trials in the country, all health institutions must have the infrastructure to carry them out efficiently.
Q: What must be done to make public health institutions more receptive to clinical trials?
A: Public health institutions need to fully understand the need for these trials, the benefits they bring to patients and how they differ from other research lines. Doctors at public institutions continuously perform basic research with excellent results but performing industry-sponsored research is taboo. It is necessary to change this mindset within public institutions. Clinical trials provide access to innovative medicines to people who would otherwise have to wait for their approval and then pay high prices to acquire these medications.
ACROM, Mexico’s CRO Alliance, brings together clinical research organizations with the objective of strengthening clinical research in the country. Its members include 15 of the largest CROs operating in Mexico, such as PPD, IQVIA, ICON and Covance
HOW TO TURN MEXICO INTO A CLINICAL TRIALS HUB
CECILIA MORENO Director of Clinical Management at PPD
Q: How is the PPD study profile changing according to global scientific and health trends?
A: Mexico is a very important contributor to clinical trials in Latin America and provides a significant number of patients for clinical studies. Enrolment and quality are relevant in the Latin-American region, particularly as innovation increasingly focuses on areas like oncology, immunology and rare diseases, with an expansion of activity in biologics and genetic diseases. Globally, studies are evolving to incorporate new types of drugs, such as genomic medicine and biosimilars. For PPD in Mexico, we are prepared at all levels and already have entered this new era. We implement multi-centric studies, mainly Phase II and III trials.
As molecules become more complex, studies also have become more complex and require a more circumscribed patient profile. In the case of genomic medicine, these tests limit the number of potential patients. However, given its large population and extensive experience in the clinical research field, Mexico has great potential for finding these study subjects. Also, there is a growing number of personalized medicine, HIV and hepatitis trials being initiated in our country.
Q: How does collaboration with public healthcare institutions support the development of clinical trials in Mexico?
A: Public institutions have a much larger concentration of patients compared to the private sector. Large numbers greatly facilitate finding the required patients for many types of trials. 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
PPD is a contract-based research organization with offices in 47 countries. PPD has operated in Mexico since 1998 and works in early development, clinical development, post-approval studies and consulting
the infrastructure and personnel necessary to perform these trials and provide the necessary administrative support. We must ensure ethical research, considering that our main priority is patient safety followed by the quality of data generated to support clinical studies results. Our industry has a successful history conducting studies in the public sector. We rely on highly professional personnel and institutions who understand the necessary requirements to support clinical research. The number of patients who can be treated is now more significant, as well as the benefit of receiving new treatments and having access to specialized exams and diagnostic tests. Several studies are going to be introduced for oncology, immunology, rare diseases and orphan conditions, so collaboration is key to continue to expanding clinical research in Mexico.
Q: How does PPD ensure the acquisition of enough patients for its clinical trials?
A: We are working with networks that already have research centers experienced in patient recruitment and with qualified personnel, equipment and facilities. The time periods to subscribe patients and begin clinical trials are of the utmost importance. Mexico has reduced its waiting times and different players in the country are working to further reduce them to enhance efficiency. Specialized groups, such as experts in site selection at the startup phase, strive for prompt activation and rapid enrolment in a joint effort with sites. A regional approach to the ideal country mix is the most appropriate method to ensure enrolment with the highest patient safety and quality standards.
Q: What measures should be taken to strengthen Mexico’s position regarding clinical trials?
A: Performing clinical research in public institutions would 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 on reducing startup timelines and increasing predictability. While Mexico has proven itself to be a quality location for clinical research, the country still needs to be even more competitive to attract more studies.
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 as a CRO in both Mexico and Latin America?
A: This year, ICON celebrates 20 years in Latin America, a region in which it has about 535 employees. Of these, 210 are in Mexico, which makes the country our largest office in the region. This year, we will focus on strengthening our business in Latin America through the development of new research areas and clients.
In Mexico, we are fully aligned with the epidemiological changes the country is facing. We have analyzed the National Health Plan to target the priorities of each presidential administration in line with the epidemiological changes of the population. We have also shortened our internal times and invested significantly in employee retention.
Q: Mexico has significant potential to become a hub for clinical trials. What is needed to achieve this goal?
A: Many initiatives are being developed to strengthen clinical trials; we just have to nail them down. For instance, many steps have been taken to promote collaboration with IMSS but there are still obstacles to successfully work with the institution. Another problem is that although the government has made a strong effort to open several centers that pass preliminary judgment on clinical trials for medicines and medical devices, called Unidad Acreditada de Apoyo al Predictamen (UHAP), only a few are fully functional. This initiative was so good that it is now being implemented in other Latin American countries, but implementation challenges have limited its function in Mexico.
Q: How can the clinical research industry’s collaboration with IMSS be improved?
A: IMSS’ internal bureaucracy has been problematic and the 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; butat the moment, other states and their patients are staying out of this initiative. Innovation should be accessible to all citizens, not just to those who live in a large city.
Working with other states will also grant us access to patients who present diseases seen only in specific regions.
Q: What can CROs do to strengthen clinical trials in Mexico?
A: Both pharmaceuticals and CROs should be open to working with new research sites, since we often stay with the same one for too long. It would also be good for research sites to create their own organizations or associations to work on their shared goals. This network could help research sites to better distribute their work among each other to avoid saturation at sites in demand. All CROs work with more or less the same research sites. Furthermore, most research sites are located in major cities. It would be beneficial for CROs to bet on new sites and doctors who are willing to learn the minutia of clinical research.
Q: How can technology benefit patients and facilitate clinical trials?
A: Electronic medical records have been under development for a long time, but they have yet to materialize in our country. The existing health regulation grants patients full access to their clinical record but they are not given any information when they leave an institution. These records could be shared among health institutions following the strictest security measures.
Q: What agreements is ICON creating with public and private organizations to improve clinical trials in the country?
A: Alongside ACROM and AMIIF, we have participated in the revision of several regulations, including the General Law of Health and those concerning pharmacovigilance. The existing legislation is too old. The goal is to update it to tackle today’s needs in terms of employees, technologies and processes. The sector needs transparent regulations in accordance with international standards.
ICON aims to accelerate the development of medicines and medical devices. ICON employs over 13,250 people in 38 countries and specializes in internal medicine, infectious and gastrointestinal diseases, women’s health and rare diseases
PUBLIC-PRIVATE
COLLABORATION TO IMPROVE CLINICAL RESEARCH
ISRAEL VEGA
Clinical Operations Manager of PRA Health Sciences
Treatments and therapies are evolving rapidly but so too are diseases. To keep pace, research is key, says Israel Vega, Clinical Operations Manager of PRA Health Sciences, a 40-year-old CRO headquartered in the US with offices in over 80 countries. To maintain the fight against a number of ailments, the company is increasing its patient base and capabilities in Mexico by allying with public institutions.
“Ninety percent of our work in Central America is performed in Mexico,” says Vega. PRA Health Sciences works in six therapeutic areas and handles 15 countries in Central America and the Caribbean from its offices in Mexico. To increase its access to potential patients, through ACROM, the CRO signed a collaboration agreement in 2017 with IMSS to begin research protocols in March 2018.
“We can work with IMSS using any molecule in any therapeutic area since the institution has a large volume of patients in each specialty. The institute is highly interested in conducting clinical research, especially following the leadership of Mikel Arriola, who opened the doors for collaboration and facilitated paperwork,” says Vega. “One of the main advantages that we obtain from the collaboration with IMSS is the access to its centralized databases.”
PRA Health Sciences believes that IMSS set a precedent for working with public institutions and the next step for ACROM and CROs will be to take this model and apply it to ISSSTE, the Social Security Institute of State of Mexico and Municipalities (ISSEMyM) and the General Health Council. The new partnership with IMSS is just one of the many steps aimed at increasing the number of clinical trials conducted in Mexico. Another step is a collaboration with AMIIF that has “ambitious goals to increase investment in clinical research within a year by convincing more pharmaceutical laboratories to invest in Mexico by attracting more research studies.”
Such collaborations are imperative if Mexico is to continue moving forward in the battle against a variety of diseases
and research is necessary to maintain technological momentum. “Therapies are advancing at an unbelievable rate. We have seen significant technological advances in the last 10 years of all drugs we have worked with, from cardiovascular medications to immunology. The epidemiological profile of Mexico has also evolved, especially in relation to tropical diseases."
"We are seeing the emergence and resurgence of tropical diseases such as zika and dengue since their vector has mutated to reach higher altitudes. The mosquito used to thrive at lower altitudes, which made it common in coastal areas, but now we are seeing cases at higher altitudes,” says Vega.
According to Vega, 2017 was an important year for PRA Health Sciences as the regional office grew 40 percent in number of studies and headcount. “Our offices in Mexico had the largest growth in Latin America, above Argentina and Brazil. We are seeing an increasing number of studies coming to Mexico, as trust rises in our country’s capabilities. In 2018, we expect to realize the fruit of 2017’s negotiations. Most of our studies are performed simultaneously at many different sites across the world.”
Vega has high expectations for Mexico, even though the country still has room for improvement in clinical research. “Mexico has grown significantly in terms of clinical research in capabilities, number of researchers and openness to the sector, but there is still a lot of work to be done to ensure that the benefits of clinical research can reach a larger number of people.” Vega points towards reducing approval times and improving relations with COFEPRIS as clear successes, but he says that there are still many areas to address.
Vega seems confident of the country's future. “We will continue going forward together. Other countries can begin clinical trials in three to six weeks while we have to wait 90 days. While Mexico does not have the most competitive times, the country does have excellent researchers and that makes the wait worth it.”
HOW REAL DATA CAN CHANGE HOW MEXICO DOES MEDICINE
Q: What motivated Eurotrials to open offices in Mexico in 2015 and what is your strategy for the country?
PR: When operations were consolidated in South America, Mexico was naturally our next main objective. The size of the country, the patient population and the strategic decision by government and regulators to foster and develop clinical research activities in Mexico led us to invest in the country. In Mexico, Eurotrials works with large multinational pharmaceutical companies, important local manufacturers and biotech and medical devices companies. We have seen increasing demand for clinical trials from Phase I to IV for both chemical and for biological compounds, and bioequivalence and bioavailability studies. The number of studies related to medical devices is also increasing significantly.
PZ: We are boosting the number of studies we perform in Mexico, focused on real-world and outcomes research. We have seen that local companies need these types of studies and we will focus on supplying them. We bring many years of experience in running these projects in Europe.
PR: Epidemiological studies, a main strength of Eurotrials’ Real World & Outcomes Research division, are increasingly necessary and this unit performs these studies to obtain outputs in clinical and health economics that can be used by doctors, pharmaceutical companies, patients and authorities. At Eurotrials, we are experts in these types of projects and it is rewarding to see how they suit current Mexican needs and trends.
Q: How can Mexico become a hub for clinical research?
PR: The Mexican health system has been focused on its primary objective: treat patients. Simultaneously, clinical research has been considered a strategic interest for the country, as it leads to innovation and fosters best practices. New regulations and training of personnel at 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 become an important player in this field. The country has experienced and knowledgeable professionals in healthcare research. If the national strategy continues, regulations keep
being adapted to facilitate research and institutions and hospitals receive the necessary support to perform research projects, Mexico will become a big player in the clinical research arena.
Q: What benefits will epidemiological studies bring to the industry, doctors and patients?
PR: Access to real world data is now fundamental for all players in healthcare and specifically for characterization of diseases, their prevalence or the determination of the value of new pharmaceuticals.
The industry, doctors and patients will benefit from having real data that enables them to make more informed decisions. For instance, the incidence of type 2 diabetes in Mexico is very different to other countries. Epidemiological studies, from large database studies to observational research projects, are a fundamental tool to study Mexico’s profile.
Real world and outcomes research studies are increasingly necessary to enable governments to make more informed decisions in an environment of cost constraints and given the high cost of innovative therapeutics. Observational research allows the gathering of data related to efficacy, safety and cost of a specific drug, diagnostic or treatment.
Q: How can this information influence decision-making among players in the health sector?
PZ: When deciding whether to introduce a new medication into a country, many aspects come into play. Besides the medicine’s price tag, it is important to consider how long a patient will be hospitalized under each medication and the costs for this. Other significant factors are the patient’s quality of life after treatment, the burden of the disease on their families and many other costs.
Eurotrials is a CRO specialized in clinical and translational research in the areas of rheumatology, ophthalmology, oncology, rare diseases, cardiology and others. The 20-yearold company opened an office in Mexico in 2015
Patricia Zurita (PZ) Country Director Mexico at Eurotrials
Perpétua Rocha (PR) Global Director Real World & Outcomes Research at Eurotrials
SPEED AND FEASIBILITY, TWO KEY ASPECTS OF CLINICAL TRIALS
MARY BETH STEPANEK Founder and President of Accelerated Clinical Research
In an industry looking for speed, sometimes it is better to bet on certainty, says Mary Beth Stepanek, Founder and President of Accelerated Clinical Research (ACR), a US consulting company that performs clinical trial monitoring, regulatory consulting, reimbursement and health outcomes services for Mexican and foreign companies.
“When a company wants to perform a clinical study the first thing they ask is, ‘How long will it take to begin the study?’ I answer: ‘Do you want to begin the study or do you want to finish it?’” In some clinical studies, patient recruitment and patient voluntary continuation until the end of the trial are critical issues for data acceptability. Regulatory authorities are reluctant to accept data if patients drop out before the conclusion of the follow-up period. If there is a high dropout rate, authorities could not be sure if patients did not return because of dissatisfaction or if the company decided not to disclose the data. “For example, the FDA does not accept clinical trial data if more than 20 percent of the volunteers dropped out of the study.”
Stepanek believes, however, that when talking about recruitment and retention, the odds are in Mexico’s favor because of its unique doctor-patient relationship. Mexican physicians have good relations with their patients, she says, so they return for the necessary follow-ups. Stepanek experienced this situation first-hand in 1998 while working with Intuitive Surgical, the manufacturer of the Da Vinci Surgical System. “Our analysis concluded that any other location in which we performed these trials would take between 18 and 27 months to complete enrollment.” However, the company completed its enrollment in just three months, which convinced Stepanek about the opportunities Mexico had for clinical research.
ACR works with medical device manufacturers that have their own Clinical Operations Department or outsource Clinical Operations services. ACR acts as sponsor legal representative and helps companies to comply with the requirements of the Mexican regulatory processes. The company also helps clients to select qualified medical physician researchers and investigational sites to submit
paperwork to Institutional Review Boards (ethics, investigative, and biosecurity and committees as applicable) throughout Mexico and Latin America. “We are focused on clinical research and are prepared to provide clients with anything they need to safely and successfully complete their goals.”
Clinical studies, explains Stepanek, require well-trained researchers with significant experience in their field. “With an investigational medical device, the development starts with a prototype that is expected to be safe based on extensive pre-clinical testing. Then, the developer/sponsor initiates clinical studies to prove safety and improve the device along the way using the medical doctor’s/ researchers input on device features.” She adds that for medical devices some studies take six months, while others can take up to 10 years. Slower approval processes in Mexico have already hindered the clinical research industry. “Six years ago, COFEPRIS took only one month to approve a trial. Because of that, multiple sponsors wanted to perform studies in Mexico, creating an abundance of protocols to review. COFEPRIS could not catch up, so the council extended its timeline to 90 days. As a result, Mexico is receiving fewer device studies due to the lengthy time it takes to approve them.”
Stepanek sees significant potential in Mexico. “Latin America hosts around 8 percent of the world’s population and 3 percent of the world’s clinical trials. In Mexico, the proportion is similar. The US has 4 percent of the world’s population and 40 percent of the clinical trials, while Canada has 0.5 percent of the world’s population and 16 percent of the clinical trials.”
As Mexico continues growing its interest in clinical research as a means of delivering extra medical attention and resources to the population, Stepanek believes the country will attract more and more clinical trials. It must, however, address its slow approval times. “We are not the right place when you are in a hurry to get your study started. We are the right place if you want to acquire large volumes of quality, relevant data.”
SCIENTIFIC NETWORK ADDRESSES INDUSTRY PROBLEMS
JUAN PADIERNA Director General of Laboratorios de Especialidades Inmunológicas (LEI)
In the complex and ever-changing healthcare environment, the secret to growth is knowledge, says Juan Padierna, Director General of Laboratorios de Especialidades Inmunológicas ( LEI). LEI, which began as a clinical laboratory, capitalized on a solid knowledge base to develop a wide range of capabilities, not only for clinical analysis, training, quality control and microbiology, but also for research and development of innovative medicines.
“LEI was founded on a commitment to knowledge and we stay up-to-date with the latest advances in all fields related to healthcare,” says Padierna. “We offer our clients access to a broad database of knowledge through the many different experts who work at LEI. We have created a strong and comprehensive network of scientists to solve industry problems.”
LEI began operations as a clinical laboratory for HIV and AIDS-related tests, including immune system evaluation, but the company has evolved. “We began studying the potency of thymosin, an immunostimulant protein, through Rosetta modeling. This project allowed us to get a foot in the biotechnology field, after which more projects from national and international entities materialized,” says Padierna. Through this work, the company identified a clear need in the local pharmaceutical market. “At the time, most medications were small molecules,” says Padierna, pointing to the need for developing capabilities to address biotechnological and biosimilar drugs. For that reason, the company expanded first into quality control for biotechnological products. “We decided to invest in cutting-edge technology, including 3D cell cultures and quality control of cells that produce biomolecules, as well as stem cells. We diversified our portfolio of services to avoid relying on a single line of work.”
LEI gradually incorporated technology and other capabilities to address the needs of the industry and today the company is also an authorized third party for medical devices with capabilities to perform biocompatibility, cytotoxicity, sensitization, safety, genotoxicity and biological reactivity tests, among many others.
The company is now entering the biosimilar field, for which it is only waiting for COFEPRIS’ certification. Current regulations require biosimilars to be as close as possible to the innovative drug. Copying them exactly would require using the exact same organism, which is often not possible. In these cases, regulations establish a degree of similarity to the original product that the biosimilar must achieve to avoid immunogenicity. “We use high-performance liquid chromatography-tandem mass spectrometry (HPLC-MS) to measure the molecules we synthetized and ensure they have a similar primary structure to the patented medicine,” Padierna says. “Next, it is necessary to prove that the biosimilar’s 3D shape is similar to the patented medicine, for which we acquired circular dichroism equipment to measure whether both molecules behaved in the same fashion under circularly polarized light.” LEI then performs cell cultures of the biosimilar to measure potency in comparison to the patented medication followed by the use of Biacore equipment to measure specificity and affinity in molecular interactions. This MX$9 million equipment was partially financed with CONACYT funding.
“Our company has a comprehensive vision that addresses every problem a client might face,” says Padierna. This required a large investment in technology for the acquisition of capillary electrophoresis, flow cytometry and highperformance liquid chromatography (HPLC). In early 2018, the company published research on the gut microbiota of mice, which has many different functions in the body, such as improving digestion, stimulating the immune response and protecting against pathogens. In a paper published by Immunology Letters, the company reported its results on the study of the effect of a bacteria-specific immune response in mice on recolonization by the same bacteria to determine the role that systemic immune response has in intestine bacterial composition.
Padierna credits the company’s growth to its position as a knowledge center. For him, the acquisition of technology was secondary to the acquisition of these minds, which when brought together resulted in its multiple capabilities.
EXPERIENCE-BASED SERVICES FOR CLINICAL RESEARCH
MELISSA ROSALES Director General of RM Pharma
Q: Last year, you said that you would open new offices in Queretaro. Where does that project stand and what impact will it have on operations?
A: The project is still in construction. However, these new offices will begin operating in 2019 and will operate the same way as our headquarters, with a research and medical care department. We believe that this represents an opportunity to attract more clinical research projects to RM Pharma and will also increase our ability to provide broader coverage in Mexico.
Q: In what areas should Mexico improve in terms of internal regulation to facilitate the development of clinical trials?
A: The government is open to listening to the clinical research industry, which is greatly increasing the opportunities available for the sector. RM Pharma participates as one of the first companies in the pilot program of digital regulation for clinical research. Other government initiatives are also boosting public-private participation, which we believe will improve the country’s performance in clinical research.
Q: What recommendations would RM Pharma make to the health sector to encourage researcher training?
A: Inclusion of clinical research as an optional or mandatory class at universities and colleges is key to promoting the development of clinical research in Mexico. We need medical students to embrace research. Educational programming should also include opportunities to work in pharmaceutical clinical research and basic research. If students leave university with knowledge about clinical research and its basic elements, when they enter the industry they will be competitive professionals.
Q: What are the main obstacles that Mexico faces when training researchers in high-level clinical studies? How does RM Pharma get the best talent?
RM Pharma specializes in therapeutic areas such as rheumatology, endocrinology, dermatology, general medicine and nutrition, pediatrics, otorhinolaryngology, urology, gastroenterology and dentistry
A: Clinical research companies must invest a great deal to prepare doctors. Availability of health researchers is not enough and people who want to be part of this sector must be trained as specialists. RM Pharma is committed to building the best talent and training our staff so they have a broad knowledge base, from basic requirements to highly specialized procedures. All those who come to work at RM Pharma go through a process of training in clinical research but also in administrative and management tasks. Our professionals have experience beyond the medical field and are certified in laboratory practices, sampling and other skills. We make sure that we always have highly qualified people working for us.
Q: What trends does RM Pharma see for the development of clinical studies? How is Mexico prepared to face these trends?
A: The trend at the moment is oncology but RM Pharma is not ready to address this development, which requires specialized hospitals. Oncological clinical research in RM Pharma could be conducted in palliatives and other similar solutions in oncology patients. Another trend is chronic degenerative diseases.
Q: Why is RM Pharma the ideal choice for pharmaceutical companies or CROs?
A: RM Pharma is both a clinical research site and a CRO so we can provide experience-based services that also offer high-quality and personalized attention. We are focused on conducting clinical research but we also develop research protocols and statistics and provide regulatory assistance.
Q: What are the three main goals that RM Pharma hopes to meet in 2018?
A: We want to increase the number of active protocols 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. We want to grow our portfolio of specialists to cover the five new projects that are coming next year: asthma, psoriasis, osteoporosis in children, pain in dental studies and gonorrhea.
MEXICAN CRO SEES FUTURE IN PHARMACOVIGILANCE
ARTURO RODRÍGUEZ CEO of Infinite Clinical Research (ICR)
Mexico would greatly benefit from the opportunities associated with clinical research, not just in terms of economic investment but by increasing access to innovative medications, says Arturo Rodríguez, CEO of Infinite Clinical Research (ICR), a 16-year-old Mexican CRO that offers a wide range of services and specializes in clinical trials for metabolic diseases, oncology and dermatology.
The global clinical-trial management market is expected to reach US$36 billion by 2020, according to Research and Markets. “If Mexico could attract even 1 percent more of the global share, investment in the country would be significant,” says Rodríguez. He sees important potential to reach this ambitious goal based on the country’s history in the segment. “Mexico was extremely attractive for clinical research. When the country had approval times of 30 days, it attracted a large number of clinical trials and CROs. The problem began when that timeline grew to over 200 days, which greatly damaged the industry. If the country could reduce the timeline once again, Mexico could have a strong position in the sector.”
Rodríguez says that if Mexico continues with no clear ethics committee’s rules and COFEPRIS long approval times, the international industry would turn to see other markets. For processes to be reflected on official documents, work tables are usually very long and in many cases do not reach a good end. Something new that we are experiencing is the synergy of authorities and the industry in the pursuit of a common goal. This makes companies and researchers wary and does not give false expectations outside of the country, as the industry requires fast approval times, certainty, predictability and transparency to operate efficiently.”
Considering the size of the problem, pharma and local CROs had greatly invested in the solution. “As ACROM, we participated in March 2017 in a group of leaders in charge of optimizing response times for the approval of clinical trials.” The group is still led by ProMéxico and includes representatives from COFEPRIS, the National Comission of Bioethics (CONBIOETICA), SAT, SHCP, the Ministry of Economy, several health institutes, IMSS, ISSSTE and a few
general hospitals. The group brought together the specific needs in each sector and implemented corrective actions to streamline processes and improve approval times and it worked. “By September 2017, COFEPRIS had reduced its approval times from 120 days to 70,” says Rodríguez.
The benefits from increasing the number of clinical trials conducted in the country are not limited to the attraction of foreign investment, explains Rodríguez. “Clinical trials reduce entry barriers to innovative treatments, especially in terms of cost, which is a significant hurdle in Mexico for low-income individuals. Patients should be empowered to take control of their healthcare and, given the opportunity, to demand inclusion into clinical trials.”
The ICR’s Pharmacovigilance Unit is already working with clients and Rodriguez says the sector will be an interesting one to tackle. “There is a significant difference between a regular protocol and that for pharmacovigilance. In the first, a hypothesis is proposed and tested; in the second, results make way to approaches and situations found in the research that lead to new hypothesis on how to attack unidentified new risks. Pharmacovigilance studies are more open as they involve pregnant women, children and other vulnerable groups. This intensive methodology is a new challenge in Mexico that we are learning alongside the authorities,” he says. On Jan. 15, 2018, a new regulation version on pharmacovigilance was implemented to strengthen risk management plans: NOM-220-SSA1-2016. This NOM, according to CANIFARMA, raises Mexico’s standards for conducting pharmacovigilance studies to international levels.
ICR’s goal is to capitalize on the growth of the clinical research sector, but with a different strategy than that of larger CROs. “We are seeing a growing number of smaller biotechnology developers entering the sector that are developing one or two molecules. ICR is targeting these smaller companies and we are working alongside them through the entire process. When the molecule is sold to a larger company, we move on to another small company to avoid competing with multinational CROs.”
Hector Ávila Director General of Cecyc Pharma
Diego Ávila Commercial Director of Cecyc Pharma
Q: How does Cecyc Pharma differentiate itself from other CROs in the country?
HA: In 2013, the mandatory change for bioequivalence studies in generic drugs reinforced the role of Cecyc Pharma’s participation in the development of generic drugs. We have the best infrastructure and the best specialists to evolve alongside the market, which requires that we guarantee that our customers receive an added value from our services.
Our core business is bioequivalence studies, clinical and analytics services and in-vitro tests. This makes us a different CRO not only because of our vast portfolio but also because of our understanding of all the processes and requirements of the pharmaceutical sector. We break the traditional CRO mold and provide support to our clients before, during and after the development of the generic drug.
DA: Cecyc Pharma offers a comprehensive service to its clients: we offer support in the acquisition of raw materials, for research on bioequivalent medicines, with the compilation of regulatory information and, if necessary, we accompany the client to his meetings with regulatory authorities such as COFEPRIS.
Q: What trends do you think will affect the clinical research market in the short term?
HA: Bioequivalence studies have become a necessary parameter to improve the competitiveness of generic medicines. Also, the increase in R&D biotechnological studies and phase I-II clinical research studies are transforming the pharmaceutical industry in Mexico. Cecyc Pharma believes there will be more clinical research developments in central areas such as diabetes, oncology, cardiology, geriatrics and chronic-degenerative diseases.
FUTURE TRENDS IN MEXICO’S CLINICAL RESEARCH
Cecyc Pharma performs clinical research in seven countries: Mexico, Chile, Venezuela, Colombia, Spain, Dominican Republic and South Africa. The company specializes in bioequivalence and phase I-IV studies
Q: What regulatory changes are necessary to truly turn Mexico into a clinical trials hub?
HA: Mexico must increase the number of professionals dedicated to research and encourage more people to specialize in the pharmaceutical sector. We need a greater formalization of R&D studies and the regulatory authorities must strengthen the industry’s clinical and analytical capacities. This could improve Mexico’s competitiveness on an international scale.
DA: More pharmaceutical industry players should open up to dialogue and collaborate more closely with CROs like Cecyc Pharma as a greater recognition of CROs can improve the performance of companies, the efficiency of drugs and strengthen the recognition that COFEPRIS has with its international regulatory counterparts.
Q: How has your research portfolio changed during the year? What role do the most common chronic diseases play in Cecyc Pharma’s research agenda?
HA: We are always aware of the expiration dates of patents on brand drugs to advance in the development of molecules for generic drugs. Our research portfolio changes as the pharma industry changes, so we must adapt quickly and create clinical research protocols that meet market demands.
DA: Our experience is the key to our services. Cecyc Pharma has more than 200 methods of analysis and 60 researchers to maintain constant participation in the pharmaceutical industry.
Q: How will the relocation of Cecyc Pharma in Morelos translate into better opportunities?
HA: The state of Morelos has the highest number of 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, we will boost R&D studies in Mexico. Also, the focus on clinical research studies is growing in Morelos because it is the only state with a Ministry of Innovation, Science and Technology (SICYT).
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 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 Dräger anaesthesia Perseus A500 machine
BIG DATA & DIGITAL HEALTH
Mexico’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.
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
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 revolution that will transform companies through the use of smart technology and real-time data to increase productivity in companies. Industry 4.0 is changing the operational, financial, business and productive schemes that exist in different economic units of the country. The health sector is no exception, as Industry 4.0 breaks with traditional schemes and ideas applied to product development and service provision in the medical industry to provide innovation, interconnectivity and evidence-based solutions.
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, according to IBM. In this context, the best and greatest opportunities appear when data analytics and business intelligence take part in this transformation with more accurate information.
Big Data creates opportunities and new ways to seek the transformation of the health system. The industry is moving toward evidence-based medicine and includes information architecture to manage large volumes of clinical, genomic, financial and operational information to improve its performance, according to Oracle.
FAST MANAGEMENT OF DATA
IBM says that data volume doubles every two years and 90 percent of the world’s data was created in the last two years. Therefore, the fast management of data becomes essential for the future of companies since they reveal insights faster than the competition, boosting their chances of being more competitive. A clear improvement in patient outcomes and an improvement in efficiency and cost management are, according to Oracle, the three predictive analytics solutions that will be implemented through the
use of Big Data in health. Sergio Mejía, Vice President and Country Manager of Genesys, agrees: “Big Data can play an essential role in compiling information and providing better suggestions to doctors. The pharmaceutical industry could also use Big Data to perform pharmacovigilance. A technological platform can even give suggestions on what OTC medicines should not be mixed, what not to eat or what exercises to avoid.”
Packard Enterprise Source: Forbes
Inclusion of Big Data and data analysis transforms the information into different opportunities for the sectors that make up the health industry. In the pharmaceutical sector, “technology focused on the process of medicine elaboration has brought us new molecules that can cure diseases for which patients had no options in the past,” says Arístides Salazar, General Manager for Mexico, Central America and the Caribbean Region of Emcure Pharmaceuticals. In terms of genomic medicine, the opportunities are in reducing costly patient tests thanks to the opportunity to analyze large volumes of information that help create genetic profiles. Doctors could also employ these technological developments and improve their clinical diagnosis, says Mejía.
Health institutions can also take advantage of the opportunities generated by Big Data. “Franchises of the same clinic or hospital do not communicate with each other. So, if patients change their location, they must again provide all their medical information. Gathering all this 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, which will lead to reduced healthcare expenditures,” says Antonio Carrasco, Director General of PLM.
In Mexico, however, the main problem when collecting data lies in the unbalanced participation of the health sectors, both public and private. “The problem for data collection in Mexico is that the private sector does not share information, so there is little data available. It is a great challenge because there is no single procedural code, unlike Brazil, Colombia and Chile that have standardized procedural codes,” says Guillaume Corpart, Managing Director of Global Health Intelligence. On the other hand, according to Xavier Valdez, Director General of IQVIA, another major challenge that Mexico must face when collecting information and including Big Data at a national level is the fragmentation of data as a consequence of the country’s fragmented system. As a result, in Mexico it is 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 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.
“ The problem for data collection in Mexico is that the private sector does not share information, so there is little data available”
Guillaume Corpart, Managing Director of Global Health Intelligence
Ensuring privacy and security is important for all economic units because in the end there is a person behind everything. According to Infoguard, a cyber security company, talking about information related to the health and well-being of people is twice as important for the health sector because stolen healthcare data is often used on the black market to carry out fraud, to sell information to foreign agencies, to identify other criminals or to carry out illegal financial transactions.
Data privacy in the health sector becomes fundamental at all levels to ensure the safety of the healthcare ecosystem and all its agents.
TOP 10 CHALLENGES OF BIG DATA ANALYTICS IN HEALTHCARE
1 Capture Clean, complete, accurate and structured information for many systems
2 Cleaning Ensure data is correct, relevant and not corrupted in any way
3 Storage Choose the right storage scheme to lower up-front costs and ease expansion
4 Security Be safe against rapid-fire series of high profile breaches, hackings and ransomware episodes
5 Stewardship Use of de-identified datasets for research projects, makes ongoing stewardship and curation a big concern
6 Querying Overcome siloes and interoperability problems to prevent query tools from accessing the organization’s entire repository information
7 Reporting Downstream data with critical accuracy and integrity for clinicians and institutions
8 Visualization Create a good data presentation and visualization to make clinicians absorb much easier the information
9 Updating Understand the volatility and dynamism of healthcare data and frequently update it
10 Sharing Create a trustworthy and timely big data exchange ecosystem that connects all members involved in patient care
Source: Health IT Analytics
DATA, THE MANNA THAT EMERGES FROM TECHNOLOGY
Big Data and data analytics are gaining strength in the healthcare industry amid advances in technology, automation and robotization. The generated data can lead to valuable information that companies can use to better understand and predict customer purchasing and market behavior, for example While more companies are getting on the bandwagon, penetration is slow due to Mexico's fragmented health system that does not allow the integration of much of the collected data. The result is a narrow offering that cannot yet provide a big picture vision.
DICOMs:
DATA STRUCTURING AND ANALYSIS
AREAS OF APPLICATION
Planning and Strategy
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.
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.
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.
Sales and Services
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.
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.
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.
IT SOLUTION TO CHANGE MEXICO'S HEALTHCARE SYSTEM
GERMÁN TOSANTOS Director General of INDRA Healthcare
Q: What needs has INDRA identified in the Mexican healthcare system? What solutions has INDRA developed to address them?
A: We work in the Mexican healthcare sector with a single concept: continuity of care. This continuity consists of reaching a permanent flow of information between the different levels of attention, which is a basic requirement for the system to improve. To achieve this goal, INDRA Healthcare offers strategic health consulting, an electronic health record system and a patient relation platform (PRM), among other solutions. Our medical record system is designed for hospital and primary care net areas, since it integrates in real time the primary, second and third level of care so that all professionals can share the same information. The PRM is a multichannel platform in which citizens access preventive, administrative or clinical services providing home access to care.
Q: What is INDRA’s added value?
A: Our solutions in electronic health record and patient management platforms are inter operable. Therefore, anything an institution or network has done before or does after with other providers will always be in communication with our applications. We have the three care levels connected with the same EHR and we have broad experience in assistive networks. We have a lot of international experience, and believe we must adapt our IT solutions to the country to provide tailor made solutions.
Q: What are the main INDRA markets in Mexico, private or public institutions?
A: In Mexico, both the public and private sectors have developed in-house solutions for electronic health records. From a legal standpoint, there is good legislation in the country that requires institutions to adopt electronic records. NOM-24 demands medical records from every
institution and asks for compliance in certain areas. However, there is resistance to spending money on technologies when institutions are struggling with other needs. Decisionmakers, general managers as well as medical teams usually have other priorities.
Q: How do you evaluate the digitalization of healthcare in Mexico compared to other similar economies?
A: Brazil has similar problems to Mexico. It also has a regulatory framework but there is no complete digitalization experience. It is the only country in Latin America that has free and public medical care, albeit with investment problems. Chile has a program for digitalization of its hospital network, but investment has been paralyzed for three years. The key is to work on separate government agreements. In Spain, it took 20 years to digitalize the system and around 60 percent of the population has an electronic health record.
Q: Who develops the technology used by INDRA?
A: All the technology regarding the core of HER, PRM and other systems is developed in-house. We do have areas in which we work with other developers that have their own programs. On dependence of client’s needs, we connect to the client’s solutions and if there is not an existing one previously, we find it or develop it for them.
Q: What are INDRA’s plans for the future?
A: We want to work more with the Mexican states because they have clinics and hospital networks where we can implement health records. Continuity of care is essential for patients, so they can move around the country and find their information available in any institution. In addition, it is good for doctors because they will have all the background data and will not need to repeat tests. Another priority 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 chronic patients do not have to go every week to look for a prescription and doctors may have more time to help other patients. Digitalization can bring control, security and economic efficiency.
INDRA is a Spanish company that offers consulting services in infrastructure, defense, energy, telecommunications and financial services. It has been in Mexico since 1997, and has offices in Mexico City, Queretaro and Monterrey
EDITORIAL PLATFORM SEES FUTURE IN BIG DATA
ANTONIO CARRASCO Director General of PLM
Q: Which PLM segment has experienced the biggest growth over the last year?
A: Our digital segment, since PLM's digital transformation created audiences, traffic and new channels. Through online media and our registered user database, we can know what patients and health professionals are looking for and redirect them to where they can find it. This has allowed us to offer digital marketing campaigns focused on our clients’ specific needs. All the information we gather targets pharmaceutical and medical device companies because through searches made by users we can predict what other products may interest them. Therefore, we can offer marketing opportunities to more companies and increase the number of PLM’s potential clients. Each year, our channels receive 120 million searches related to products with life sciences.
Q: What impact has the use of applications had on PLM business model?
A: The impact has been enough to replace the main business of the company. We are implementing an innovative digital element based on assets such as audits, our credibility as an editorial platform and the traffic generated by this platform. We have been working on transforming all our content to digital for years using Watson, IBM’s AI system. We have been using IBM for our mobile applications and after six years in stores our applications are still in the Top 10 for health.
Q: Why is Guía Salud important to PLM’s strategy and what are its benefits?
A: It is an application that answers three questions: Why was the medicine prescribed? How much does the medicine cost? Where can I find the drug? It is supported through an IBM Watson service provided by a company called 1Doc3. The application provides the content in a familiar language for the patient and links the SKUs with their prices.
Q: PLM has a collaboration agreement with UNAM’s Medicine Department Library. Is there a plan to expand this collaboration to other universities?
A: We have worked with universities since the foundation of this company 76 years ago. If the information we share is closer to the industry and to the clinical evidence, the decisions that thousands of doctors will make about millions of patients will be better and their health will improve. UNAM has had full access to our database for 15 years and all universities interested in our information can be linked to our program.
Q: How have PLM’s human resources needs changed through digital transformation?
A: PLM has three main pillars for its transformation. First, we created an information laboratory made up of professionals specialized in data science with a focus on statistics and mathematics. They know how to standardize, categorize, understand and analyze information and can develop AI cognitive processes and machine learning projects. Many of our data scientists are biologists, so they know how to organize information. We also have an IT department in charge of transferring information to electronic platforms and configuring the database. Finally, we maintain our editorial area, which is important for us because all the content we share must be perfectly written and edited.
Q: How can a full penetration of Big Data impact the Mexican health system?
A: Data is the strategy every country is using to improve healthcare. For professionals, it is essential to provide better diagnosis and better treatment as well as to create a commitment to the patient, since patient centricity is based on information. In the case of Mexico, data can help contain chronic diseases and can help manage patients and give them better follow up. Overall, data can help professionals and patients make better decisions, which will lead to reduced healthcare expenditures.
PLM is an information and technology innovation company in the healthcare sector. It publishes guides and dictionaries on health and creates and administers apps that allow data gathering and information exchange
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 company’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 company’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 Healthineers’ 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.
PATIENT EXPERIENCE AN OVERLOOKED AREA IN HEALTHCARE
SERGIO MEJÍA
Vice President and Country Manager of Genesys
Q: How can technology improve existing healthcare practices?
A: The healthcare system has lagged behind compared to other sectors in terms of customer experience, which in this case would have to be defined as the patient’s experience. The patient’s journey through the entire health chain, including hospitals, doctors and insurers, is not well-connected so there is a significant opportunity for companies. While healthcare is an entirely different sector, keeping track of a patient’s health and allowing the patient to share that information with doctors would streamline services. When patients visit a doctor, they are asked exactly the same questions to get a first diagnosis. Allowing a patient to have this information available to share with their doctor would greatly transform the industry, while this information could even grant healthy individuals access to insurance at reduced rates.
Q: What role could IoT and Big Data practices play in the future of healthcare?
A: Big Data can play an essential role in compiling information and providing better suggestions to doctors. The pharmaceutical industry could also use Big Data to perform pharmacovigilance. A technological platform can even give suggestions on what OTC medicines should not be mixed, what not to eat or what exercises to avoid. Genomic medicine would also benefit from IoT practices, which would provide large amounts of information without the need for costly genetic testing on each patient. Doctors and clinics could benefit from external sources analyzing a patient’s symptoms in real time. These tools can also be used to bring highly specialized medical care to rural areas.
Q: How can IoT practices penetrate healthcare?
A: When individuals did not have access to internet on their phones, they visited internet cafes. Health centers can play
Genesys develops cloud-based and on-site software for customer engagement. It provides software to over 10,000 clients in 100 countries in the areas of banking, healthcare, energy, utilities, government, insurance, media and travel
this critical role in introducing technology into healthcare practices by incorporating the necessary equipment to monitor patients and provide them with innovative prevention plans that provide recommendations on exercise and eating habits.
Q: How can this system be implemented in Mexico? What general benefits will it bring to the country?
A: Considering the size of Mexico’s public healthcare sector, it should be the first adopter of this technology, as the technology would allow it to reach a much larger segment of the population. The second adopter in the country would be the insurance companies, since this information would be extremely useful for compiling and monitoring a large amount of individual data that would in turn allow for more accurate risk assessment. Pharmaceuticals would also benefit from acquiring this information.
Q: What role would Genesys play in this ecosystem?
A: Genesys provides the platform to monitor and compile all the information that the patient is willing to share. Big Data includes two types of information: structured information, which in this case would be vital signs and unstructured information, which refers to doctor calls and the reasons behind them. There are many areas that need to be addressed to improve the patient experience from the moment they call to schedule an appointment. After the first appointment with the doctor, patients often leave the treatment for various reasons. Our platform can encourage patients not to abandon the treatment by channeling them immediately to the necessary tests and follow-ups. Treatment abandonment could be avoided by sending reminders and the automatic incorporation of follow-ups with the use of technology.
Globally, some hospitals and health clinics have incorporated Genesys platforms to improve the attention they provide to patients. We have also created platforms for clinics that provide remote assistance and allows them to offer faster and more effective attention while providing clear monitoring on the doctor’s performance.
CLOUD SOLUTIONS FOR THE MODERN HOSPITAL
JORGE CAMARGO
Co-CEO and Co-founder of Ecaresoft
Q: Ecaresoft was not always a cloud-solutions provider. Why did you make this bet?
A: In 1986, as a different company, we noticed that large hospitals with strong IT departments and sufficient capital could always pay for equipment to digitalize their systems, even though it was highly expensive at that time. However, smaller hospitals, which account for 70 percent of the market, could not afford these solutions. For strategic reasons, we decided to focus on this market niche and as our presence grew in small and medium-sized hospitals, we also attracted the attention of their larger counterparts, like Hospital Médica Sur. We bet on cloud technology over 10 years ago, which allowed us to greatly reduce our infrastructure costs and allowed us to offer products at lower prices than the competition. Our goal was to democratize the healthcare sector.
Q: What type of hospitals is Ecaresoft targeting?
A: We began operations working with small hospitals with a maximum of 50 beds. These hospitals would have been unable to buy servers and software licenses. Providing a cloud solution eliminated the need for those expenses. Our strategy is to work first with individual doctors and then incorporate more complex operations. As a result, our footprint is extensive, with over 10,000 users throughout Latin America. Now, we are working with Hospital Sedna, Swiss Hospital, Zanitas and Hospital San Pedro, but hospitals all over Mexico use our systems, including in Guadalajara, Queretaro, Tijuana, Mexico City and Culiacan. We have also installed this software in Argentina and the Middle East, including Egypt and Saudi Arabia.
Q: How does Ecaresoft’s software improve processes for hospitals, insurers and clinics?
A: Our goal is to offer solutions that address the future of medicine. Most products for the hospital industry were 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 become more preventive rather than reactive and that consumer expectations will continue to increase. The core behind our systems is to digitalize data so it is available to
those who need it. For instance, our Cirrus software aims to improve a hospital’s communication systems and allows upto-date information to be shared between all departments.
Q: How do you convince hospital administrators of the benefits of implementing these systems?
A: Our ultimate goal is to create products that reduce healthcare costs, although it is not always easy to convince a hospital administrator. For that reason, we develop tools that grant administrators better control of all their procedures and that solve problems they face. We perform an analysis of their potential savings in order to generate the right expectations in the client. These investment studies can be carried out and validated by clients using our own tools. Our sales department customizes these studies for each client. The lack of communication between the different parts of the healthcare sector translates into an increase in costs for all involved. For instance, a lack of communication may force patients to do the same tests several times in a row.
Q: What direct benefits does your software provide to patients?
A: There are many areas in which Big Data can support healthcare policies. For instance, by compiling the medications a patient uses and providing that information to the doctor to prevent side effects. It is very common for clinics to have a large volume of patient information mixed up and dispersed. Moreover, franchises of the same clinic or hospital do not communicate with each other. Therefore, if the patient changes their location, they must again provide all their medical information. Our Nimbo software also provides other direct services to patients, like integrating medical data into Google Calendar so the patient receives an alert 24 hours before the next appointment. This has allowed us to reduce no-shows by 36 percent.
Ecaresoft, headquartered in the US, develops software for cloud-based management of hospitals. The company’s solutions include Cirrus for hospitals, Nimbo for clinics and Nebula for insurance companies
THE 3 Ps IN HEALTH: PREVENTION, PARTICIPATION, PREDICTION
Samper Health and IT Business Unit Director at Grupo Altavista
Cano Director of Incubation and Innovation at Grupo Altavista
Q: What led Grupo Altavista to offer customized solutions in the health sector in Mexico?
ES: At Grupo Altavista, we have been integrating technological projects for different sectors, including the government, for more than 25 years. This has positioned Grupo Altavista as one of the major players in the health and ICT sectors.
VO: Few companies and industries are focused on the precision-based model. We believe that the best solution is based on evidence, which is why we offer a customized solution that meets the customer’s needs. Grupo Altavista’s methodology is oriented to satisfy the patient, the healthcare professional and the institution through inclusive and personalized projects. Also, our projects are based on usability levels to ensure clients leave with a better condition than when the hired our services.
Q: How does Grupo Altavista help redefine the healthcare business and how are you improving patient-centricity?
ES: We can consider ourselves as the best option for companies because we provide comprehensive and expert solutions that translate immediately into a benefit for the entire value chain.
VO: A very clear way to redefine the health industry and improve patient care quality is telehealth solutions. Mexico has a deficit in nurses and in medical specialties like geriatrics. In the country there are approximately 502 geriatricians, a number that will not be enough to cover the needs of the population. Our telemedicine solutions allow public and private institutions to manage information efficiently to ensure high-quality patient care.
Grupo Altavista is a Mexican leading business group that provides technology driven solutions. In the health sector, the group offers advanced turn-key ICT solutions, leasing services, hospital and clinical equipment, among other solutions
Orea Health and IT Business Unit
Subdirector at Grupo Altavista
JC: Technological change in the health industry is unstoppable and the ability of companies to manage this change must be prioritized. Grupo Altavista has helped industries accelerate the adoption of technologies to boost their productive and performance growth. We help our clients avoid risks and make sure that the technology that we implement works and has a direct impact on the health and care of the patient.
Q: Why is Grupo Altavista the best option for the digitization project that IMSS is carrying out?
ES: The government’s ability to provide universal access to health has a direct impact on the country’s competitiveness. The establishment of a universal electronic clinical record would allow Mexican patients to receive treatment at any of the country’s health facilities. Grupo Altavista works with the government to implement technologies and procedures for the public sector to digitize its archives.
VO: We are implementing a new innovation center to adopt disruptive technologies. Technology offers the public sector the possibility of providing more precise and timely services. When pathologies are detected on time, the patient can be easily cured or at least contained with treatment.
Q: How can Grupo Altavista help unify the health system in Mexico?
VO: There are different information providers for the health system in Mexico. The problem is that there is no platform for data unification that includes all different providers. Grupo Altavista is working to become the manager of a platform that extrapolates data from different sources to help doctors access complete information.
JC: Different public institutions have digitalized their systems with Grupo Altavista because our solutions go beyond digitalization. We combine technology and data security to improve health management and diagnostics in the public sector.
Enrique
Joel
Vinicio
GRUPO ALTAVISTA'S INNOVATION CENTER TO DEVELOP CARE SOLUTIONS
To nurture the technical talent that Mexico’s strategic sectors require, Grupo Altavista is developing Technology 4.0 Innovation Centers ( Centros de Innovación para Tecnologías 4.0). The company is collaborating with Colima University and YMCA University to cultivate innovative services and specialized content related to the Internet of Things (IoT), artificial intelligence (AI), blockchain and Big Data analytics. These educational complements will eventually translate into certification and specialization models for the healthcare, education, energy, oil and gas, national security, manufacturing and financial sectors.
Grupo Altavista will begin developing its first Innovation Center for Health Sciences in the last quarter of 2018. The center will deploy state-of-the-art technology to create new models for precision medicine that include new systems
of healthcare and wellness management, digitalization of health information and tele-health platforms.
The center will collaborate with academia and health sciences companies to create a testing space where new devices, procedures and technologies can be used to develop innovative prototypes. These prototypes will allow specialists to create healthcare models with greater precision, participation, personalization and prevention to address the challenges that Mexican healthcare faces.
With over 25 years of experience in the integration of technological projects, Grupo Altavista is characterized by its services, which improve its clients' innovation processes and supports them in the design and implementation of the products they need to increase their operational efficiency.
Sustentability and Model Development
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 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).
SERVICES WORKSHOPS
Building Specialties
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).
CONFERENCES
Raising Awareness
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).
PRESENTATIONS
Getting Into Detail
GRUPO ALTAVISTA INNOVATION CENTER'S CORE PROGRAMS
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 Quintiles and IMS Health had already built a reputation in the industry?
A: The merger of both companies allows IQVIA to provide a broader advisory scheme for companies trying to launch a product. We now provide a priori advice for the launch of a product and accompany the client throughout the process. Our new name tells our clients that we have joined forces to give them more support.
Q: IQVIA manages one of the most important health information databases in the world. How can that volume of information be applied in a health system like that in Mexico?
A: The great challenge that Mexico has is the fragmentation of data, a direct consequence of the fragmentation of the country’s health system. Therefore, in Mexico it is difficult to produce valuable information about the health sector. Our advantage is that we work with different information sources that allow us to create our own databases to generate valuable information. We collect this information from our databases and from other sources in the retail market, such as pharmacies, wholesalers and supermarkets. We collect and analyze information about the main players in the healthcare industry, epidemics and drugs in a fragmented system to generate unified content about the market and the sector.
Q: What differences exist in terms of Big Data collection between the public and private sectors?
A: Data privacy is continuously improving in Mexico and at IQVIA we always support data collection with the consent of the sources. We have our own technologies to guarantee the anonymity and the encryption of the information, since our system removes the name of the person and assigns a permanent number to integrate it to our databases. We work with the public and private sectors to collect information. However, the collection of medication consumption is mainly
concentrated in the private sphere, while the public area generates more information about the epidemiological profile of the diseases in the country.
Q: Last year, you mentioned that one of the company’s objectives for Mexico was to apply hospital certifications. What opportunities have these certifications created?
A: IQVIA works closely with FUNSALUD to create a system that collects and analyzes information at the same time. The first intention is to unify the data in a comprehensive way to obtain information about the most common types of surgeries, costs, type of additional problems, infections and more factors within a hospital. Secondly, this analysis aims to act as a ranking of hospitals service, as is done in Europe. Hospitals that achieve satisfactory results can benefit from this information to improve.
Q: IQVIA offers its clients solutions in the areas of R&D, real world value, commercialization and technologies. Which area is the priority in Mexico?
A: R&D in Mexico is a priority for our company. IQVIA operates through our main offices to analyze the areas of opportunity that we then implement. The process is managed here and we make sure that the selection of sources, data, reports and samples matches the reality and needs of the country. In Mexico, IQVIA focuses on the commercialization of integral solutions, so we provide many services such as information gathering, market information and consulting on a product’s behavior in the market to determine the best sales strategies for a company.
Q: In July 2017, IQVIA highlighted the deceleration of the world market in 2016 and forecasted 4.7 percent growth until 2021. What are the figures for Mexico in this market?
A: In 2017, Mexico’s market value was MX$230 billion (US$12 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 1.4 percent for the public sector. We estimate that Mexico’s pharmaceutical industry will mirror the average international growth. The Mexican market is expected to maintain between 4.5 and 5 percent of growth for the next five years.
IMPROVING CLINICAL DIAGNOSTIC TECHNOLOGY
CARLOS OVIEDO Director General of Grupo Diagnóstico Aries (GDA)
Q: Last year, you said you wanted to increase your market share in Mexico and expand in Latin America. How is that going?
A: GDA is acquiring companies to continue its inorganic growth and consolidate the group in the Mexican market. We are working to standardize and increase the efficiency of the three companies that we have acquired in the last two and a half years. We have achieved a standardization of 75 percent of our back-office operations and we expect to soon operate our four processing centers as a single one. Also, we are in the process of purchasing companies that will be added to GDA in the years to come.
Q: What technologies does GDA use to be competitive in the market and adapt to Industry 4.0?
A: Seventy percent of critical clinical decisions rest on one or more test considerations, so now more than ever accuracy in lab diagnostics is an important issue. Our central clinical laboratory will be the national center for all our operations and it is going to be a fully automatized and digitalized platform with Abbott’s FDA-cleared Alinity diagnostic system, which provides diagnostics screening for immunoassay, clinical chemistry, hematology, blood and plasma screening and molecular diagnostics.
We will be the only clinical laboratory in Mexico with this technology. When the lab is completed in December, GDA will become a regional leader in clinical diagnostic technology. Also, GDA’s laboratory will be able to perform PCR tests for genetic testing in real time, so we are going to considerably expand our portfolio of services and coverage for clinical tests. Our next goal is to make this technology available to more Mexicans. We are working with the public sector to make the investment between us and the government economically viable to provide firstworld solutions to Mexico.
Q: How is GDA planning to implement new diagnostic technologies to maximize their potential?
A: Technology is the basis of our comprehensive plan but we also want to accompany this development with campaigns focused on preventive healthcare. In Mexico
there is an incidence of diseases derived from an alteration in the metabolic index, which is why our campaigns are designed to encourage the participation of more people to perform screening tests. We are also moving into other areas, such as allergies and cardiovascular diseases with prevention campaigns and clinical diagnostic services.
Q: How does GDA see the future development of clinical diagnostics in Mexico?
A: GDA will leverage the system to conduct diagnostic testing, which guides a high percentage of critical clinical decisions. Global testing volumes are rising due to an aging population, the growing management of diseases and increased access to healthcare. At the same time, healthcare systems are facing pressures to perform testing as efficiently as possible with limited resources in staff and space, while also reducing costs. Our technology allows us to stand out in a sector of high clinical competitiveness in which the speed of delivery is no longer the only attribute of differentiation. Improving the quality of diagnosis in Mexico becomes a transforming factor for the health sector and lab diagnostics accuracy is more important than ever. Alinity delivers greater speed and testing productivity with a smaller footprint to help us meet higher demands and provide personalized solutions.
Q: How does GDA adapt to the changes in the provision of laboratory diagnostics?
A: The technological platform we have is the most complete in the market in the areas of biochemistry and immunology. Our competitors can offer a wide range of services but they do not have all the tests available to diagnose diseases like we do. Our technology allows us to focus on diagnosing pathologies that are affecting the health sector in Mexico. It creates a much more complete overview of diseases, their associations and molecular composition.
Grupo Diagnóstico Aries® (GDA) is a 100-percent Mexican group specialized in the health sector. The group has four major brands: Swisslab®, Laboratorios Clínicos Azteca®, Olab Diagnósticos Médicos® and Laboratorios Clínicos Jenner®
INFORMATION PROVIDERS KEY TO STRENGTHENING LOCAL INDUSTRY
FABIOLA TRIGUEROS CEO of Smart Scale
Q: What lessons has Smart Scale learned from the digitalization process in the Mexican health sector?
A: When I started in this business, I had to hire computer companies to digitalize services. Now, everything is instantaneous, digital and fast. Technology has turned processes into solutions that generate greater accessibility. The immediacy of the information we handle has helped to improve the time and quality of our reports. Now we can measure our information in real time and we are one of the few companies that have instant access to information.
The quality of the service we offer is a great differentiator for us. Our service is comprehensive and inclusive and we serve all clients with the same dedication, never differentiating between small and large clients.
Q: What actions is Smart Scale taking in Mexico to improve data collection?
A: Smart Scale has the logistical strength to gather information and to know the exact geolocation of each pharmacy. In addition, through open information platforms such as INEGI, we can create cross-sectional analyses to provide detailed reports. Smart Scale can provide a complete profile of customer demands, consumer behavior and what pharmacies, hospitals and doctors’ offices are nearby in order to care for patients. If the client has access to other databases, we can tailor the report with greater personalized detail.
We have alliances with several companies; some seek services to improve their commercialization while others want more general information. We also collaborate with business intelligence companies that need to increase their salesforce and with companies that manage databases but do not know how to cross the information to generate analysis. Our experience in the sector gives us the ability
and knowledge to work on different solutions for our clients. In addition, we are very aware of the sensitivity of the information and Smart Scale always seeks to ensure security and anonymity.
Q: How can doctors benefit from Smart Scale’s services?
A: Smart Scale protects the interests and information of doctors through technological intelligence and then works with multichannel and direct mail approaches such as laboratories, pharmacies and other parts of the value chain. If they do not wish to continue participating with us, then we unsubscribe them from the system.
Q: What trends has Smart Scale observed in the Mexican health sector through the collection of information?
A: We have seen two trends: medical specialization and the rise of alternative medicines. The industry must consider the growth of alternative medicines that can help society and increase the safety of allopathic medicines. Now, patients are much better informed than before and have greater participation in the care of their health. This is generating changes in the consumption of medicine and increasing the purchase and consumption of health supplements.
Q: What actions does Smart Scale carry out to continue providing added value in its services?
A: Our goal is to have a strong relationship with well-positioned players operating in the health sector. Our approach helps us obtain information almost instantaneously about the changes that are taking place in the industry so we adapt to them. Also, our experience in the industry provides us with a holistic and vast vision about the behaviors of the sector. It is easier for us to understand how changes occur and the advantages they offer to our customers.
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 technological support we provide our clients. Our new product target for 2018 is to develop a platform that accompanies the customer’s website and provides information about the distribution and accessibility of the product.
BIG DATA ALREADY CHANGING HEALTHCARE SECTOR
GUILLAUME CORPART
Managing Director of Global Health Intelligence
Q: What approach does Global Health Inteligence use to convert data analysis into growth opportunities?
A: Mexico has a large information gap related to the flow of data that suggests two problems: there is little information available and the existing data is unreliable. At Global Health Intelligence, we collect our own data through our call centers and we transform this data into information. Our data analytics allow pharmaceutical manufacturers, medical device manufacturers, equipment providers and IT solutions players to obtain information that is truly valuable. Pharmaceutical companies are sophisticated and base a majority of their decisions on reliable data. Medical device and equipment manufacturers are not used to having data or information and are used to making decisions with little data, often based on expert opinions.
Q: How can companies improve by using data analysis provided by Global Health Intelligence?
A: The most sophisticated companies we work for, such as GE, BD, Phillips, Olympus or Boston Scientific, take our data and transform it into commercial protocols. Also, depending on the services they hire, they can better understand the size of the market, the market share and the positioning of their competition to better position themselves for certain opportunities.
Q: What makes Global Health Intelligence's services the best options for companies looking to expand their business?
A: Our services are the best in the market and we are continuously improving them to provide more quality to our customers. HospiScope helps define the hospital landscape and we have profiles on over 18,000 hospitals in Latin America. For example, if a medical equipment company wants to sell an X-ray machine to a hospital, We can say exactly how many machines there are in each of 14 countries and in which hospitals they are installed. ShareScope is a 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 are conducted by type and by hospital. In-Scope delivers information on the market landscape that allows companies to search for market size segmentation and potential
partners. Through In-Scope we also conduct due diligence, competitive profiles, tariffs and cost analyses to support our clients’ strategic decisions.
Q: What actions and partnerships does Global Health Intelligence carry out to guarantee the quality of its services?
A: One of our biggest challenges is that every country handles information differently, so the level and type of data are very different. Therefore, we try to standardize data as much as possible. Our call centers can control the entry of information and then pass the data to a team that is in charge of the data collection. We then structure the data with procedure codes according to the country and finally we standardize them.
Q: What is the difference between collecting data for the public and private sectors?
A: The problem for data collection in Mexico is that the private sector does not share information, so there is little data available. We collect as much information as possible and then build statistical models to complement. We also cross-check and validate through complementary databases. It is a challenge because there is no single procedural code.
Q: How do digital solutions and connectivity help the industry grow?
A: Mexico lacks infrastructure when compared to the regional average, particularly when comparing to countries such as Brazil and Colombia. Greater infrastructure is the first step and directly correlated to being able to offer more high-specialty care. Countries that do not have this level of infrastructure tend to focus on general procedures like OBGYN (obstetrician-gynecologist). Mexico needs to develop better infrastructure to then be able to increase access to higher specialty care.
Global Health Intelligence (GHI) conducts market research to provide strategic data on health infrastructure in the emerging markets of Latin America and Asia. The company offers four main services: HospiScope, ShareScope, In-Scope and SurgiScope
DATA COLLECTION TO IMPROVE THE HEALTH OF THE POPULATION
CARLOS ESCALANTE CEO and Founder of Pen Healthcare
After a cut in government health budgets totaling MX$40 billion in the last six years, with a population increasingly affected by chronic diseases and after the emergence of new competitors in the sector, health companies are rethinking their priorities and their business objectives.
In this context, finding strategies to make the most of the tools available in the system and fill the gaps in health administration and management has become critical for companies like Pen Healthcare.
“The healthcare system not only needs pharmaceutical products, it also needs health solutions,” says Carlos Escalante, CEO and Founder of Pen Healthcare.
Through technology, comprehensive service networks, data collection and alliances, the company strives to contribute to the growth of the sector and the health of the population. "We can generate income for pharmaceutical companies and for service providers. We consider the business from a data-driven perspective and design different management models,” Escalante adds.
Pen Healthcare has operated for 20 years providing digital marketing solutions for pharmaceutical companies and public and private service institutions, focusing on the B2B segments. Through its Health Systems Unit, Pen Healthcare offers its clients consulting services, patientexperience management, business intelligence and user support systems. “It is hard to integrate a fragmented health system without a strong technological base,” says Escalante.
To achieve this integration, the company created ‘All in Health’, a project with the public and private sectors focused on providing institutions with educational platforms and electronic medical records. Through this program, it has worked with companies such as Silanes, Pfizer, AstraZeneca, Shering and Bayer and the Ministry of Health.
Pen Healthcare also manages the electronic medical records for the 102 Seguro Popular clinics and recently
the company developed a technological platform called Personal Health Experience Management (PHEM), an electronic medical record with the capacity to gather more information. “The difference between an electronic medical record and our platform is that we try to gather all the information related to the patient engagement,” Escalante says.
Another way to contribute to the health sector is through the creation of comprehensive service networks, says Escalante. Pen Healthcare has been working with the Ministry of Health for 11 years to raise awareness of certain diseases and has promoted the creation of support groups for patients with chronic diseases. These groups are evaluated according to the biochemical indicators of their members and can obtain certifications every six months, depending on the overall progress. “Each group has between 15 and 30 people and focuses on communicable diseases in which social behavior is the best tool to provide non-pharmaceutical assistance,” Escalante explains. Pen Healthcare has also created a platform for health authorities to consolidate public efforts on prostate cancer through a database that provides information to the population about the risk factors of this disease.
But Pen Healthcare is up against a sector in which investment has failed to grow, according to Escalante. He says the authorities have to define their space, the operator’s and the payer’s because now the authority is controlling it all. Actors like Pen Healthcare do not have the capacity to attract all the resources the system demands because they have been struggling to operate in a repressed ecosystem. “International companies will arrive with the resources we need and they will attract the opportunities like technology and subrogated services,” he says.
In addition, the system is under pressure due to the gradual aging of the population and the spread of chronic diseases. “The system will eventually fracture and when this happens the decisions will not be made politically, but as triage,” he says.
REAL DATA IN REAL TIME
Q: What impact is Docademic expecting to have on healthcare?
CN: We have always wanted to universalize health services, so we created a plan that will allow us to make these services accessible to as many people as possible. Docademic launched a free healthcare service that innovated the provision of direct medical assistance, integrating new technologies such as blockchain and AI. The overarching idea was to create a company that would have an impact on healthcare while applying a scalable business model that could be deployed not only in Mexico but globally as well.
Q: How do you integrate technologies such as blockchain and AI and support the universalization of health services in Mexico?
IH: Medicine is an industry that does not accept new technologies easily so when we started we had to eliminate as many barriers as possible. The first barrier was economic, which is why all our tools are free of charge. To accomplish this, we had to find an appropriate business model. We have all the health industry players in our ecosystem and they have access to important insights on data. Using blockchain allows us to solve many problems faced in this sector such as access and security of very sensitive data.
Q: How does the Docademic app and related doctors provide added value for patients and doctors using the platform?
CN: The first problem we solve for patients is access. Because the app is free to use, patients can consult a doctor without charge and without having to leave their homes. Accessibility from almost anywhere is an important part of what we do because in many parts of the world commuting is difficult for many people. Using the Docademic app means patients do not have to commute. The process to 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 other filters. Also, doctors can also join our platform and get tools to improve the efficiency of their everyday medical practice and free patient’s referrals.
Q: How is Docademic preparing for the epidemiological transition that Mexico is undergoing?
IH: We have been in the market for almost three years and we want our Medical Heroes to be on the frontlines when it comes to providing the necessary follow-up for all those patients with chronic degenerative diseases that the traditional system can no longer cope with. The idea is to absorb all these patients from both the public and private sectors who have monthly follow-up appointments. As a result, medical specialists will be able to devote their time to assist patients who have more complications.
Q: What role is data playing in the company’s growth and how is it used?
IH: The target of most of our products is market research. Our services related to real-time epidemiological data are also growing. This part is particularly important for the public sector since it helps institutions quickly recognize if there are any disease outbreaks in small communities. We also have data on pharmacovigilance and technovigilance and patients on our platform can record their entire journey during their health treatments. The human body is the largest database in the world; we are trying to put this database into a universal health blockchain.
Q: Why did you create the Medical Token Currency (MTC) and your own blockchain technology?
IH: The MTC is the tool we need to universalize health. With this token, we try to incentivize healthy habits. For consulting a doctor and maintaining a healthy lifestyle, our users are awarded MTCs. If doctors correctly record all their patients’ information, they also receive MTCs. With the MTCs, patients can access more health services, pay for more consultations and pay for medicines, while doctors can pay for medical supplies. There is nothing like this in the market.
Docademic is a globally sourced healthcare service platform. It is present in 20 countries and provides medical assistance services through telemedicine and also implements a social network for the medical community
Isao Hojyo COO and Co-founder of Docademic
Charles Nader CEO and Co-founder of Docademic
SMART MEDICAL TECHNOLOGY FOR A NEW ERA
MARCELA RIVERA Country Manager of Huli
Q: What opportunity areas sparked the decision to bring Huli to Mexico?
A: Huli develops health-related technology products that target hospitals, doctors and patients. Mexico looked promising for us due to the number of doctors and hospitals, which is almost double than all Central America, and because there is not very much competition in the medical records sector. We were also very interested in validating our product portfolio in a market as large as Mexico's.
We have three main products for doctors: an electronic calendar, electronic health records system and marketing products. Our differentiator is that our all products track and monitor our patients throughout the entire medical process from the moment they seek a doctor until they leave the consultation. We are also 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.
A: At Huli, we work with we use inbound marketing strategies and field sales agents. When it comes to individual doctors, we use a government website to verify their professional license and that the information they are providing us is correct. This allows us to ensure that we work with fully qualified medical professionals.
Q: How can digital health tools support the democratization of access to health?
A: What we try to do is provide the patient with real knowledge and make sure that the patient knows their doctor. We do not provide any medical advice. However, by having an electronic medical file, patients are required to have better medical attention. We do not have a free service per se but our platforms are free of charge for patients.
30%
Increase in hospital appointments resulting from use of Huli’s medical directory
For hospitals, we offer a smart medical directory that allows the hospital to easily and quickly display all information related to their medical staff. This directory also allows patients to easily find the doctors they need and schedule online appointments, which means they no longer have to wait for the call-center to open. After using the directory for 18 months, hospitals have increased appointment numbers by 30 percent.
Q: How do you attract doctors and what indicators do you use when selecting the doctors who work with Huli?
Huli develops technology to connect patients, doctors and medical centers, improve administration and increase patient volumes while providing patients with more personalized follow-up. It has been in the market for six years
Q: What are the advantages and 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 product which also includes an exceptional customer service. Another advantage is that doctors are becoming increasingly open to use new technology. However, there are still some limitations for our expansion in the country, one of the main ones is Mexican's skepticism regarding online subscription payments.
Q: What are Huli’s growth expectations in the medium term?
A: We would like to see Huli in all private consultations 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 with a tool to work more efficiently and patients a tool to receive better medical attention. Before expanding to other countries, we want to be successful in Mexico and later grow throughout the rest of Latin America.
INNOVATION WITH IMPACT REQUIRES REAL IDEAS
JUAN MANUEL ROMERO Director General of Emiti
Q: Why create a product that targets a nascent ageing population in Mexico?
A: Worldwide, every 15 seconds a senior suffers a fall and every 30 minutes a senior dies in the hospital due to this accident. We focus on solving the problems and needs of an unattended and growing market because there is a lack of reliable information and feedback services. Today, one in 10 people in Mexico is a senior, which totals about 12 million 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 require healthcare monitoring in a non-invasive way, like those with epilepsy, Alzheimer’s or any other condition. Since it has independent functions, it does not need to be connected to any smartphone, Bluetooth or wifi. It has one communication button and it has a tap screen display, it was designed especially for the silver market: easy to use and intuitive.
Q: What kind of brand does Emiti hope to be?
A: We will position our Emiti brand to be a life facilitator for senior people and for families that want to take care of their loved relatives. Our relationship with our consumer will be based on our capacity to develop empathy with them and form unbreakable ties with them. Our brand has to be honest, sharp, friendly, secure, easy to remember and easy to read in almost every language.
Q: What potential uses can the information recovered by Emiti have for Big Data and data analytics?
A: Our premise is to start generating data about our users and their relatives. We will be able to generate information 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 take medicines for the purpose to create a huge database to begin detecting patterns of behavior in different lifestyles and diseases of our users. An example that we
can obtain in the future by using Big Data is knowing the geographical location where people ask for more help or move with a more frequent physical activity, also knowing how the lifestyle of our users changes depending on their geographical position, physical activity and their behaviors depending on the medicines they take, the frequency of their calls which can serve to the investigating doctors to find medicines and solutions to improve the quality of life.
Today, one in 10 people in Mexico is over 60 years old, which means about 12 million people
In terms of data analytics, we can find that all the information we obtain has two main purposes. One is to provide families with all the information available in case their doctor, their Primary Care physician or a specialist needs them to be able to make an accurate diagnosis of their patients. Two, to be able to make an analysis of this data to be able to find anomalies in our users. For example, a patient that never gets up at midnight and one day gets up at 3 am can give us a hint that something is happening. By identifying anomalies, we can reach a point where we can help our user if they are having an emergency or discomfort that can be addressed in real time.
Q: Has Emiti already consolidated Telcel as its point of sale?
A: Our alliance with Telcel is in process and Emiti is finetuning the details to launch its product into the market, which will be in autumn 2018. After launching, we want to deepen our penetration and consolidate the company as a specialized provider for senior care in Mexico and Latin America.
Emiti is a classic smart watch with 24/7 personal monitoring services and web app. Emiti will monitor senior’s vitals and in case of emergency will alert their family by SMS, Facebook Messages or phone call
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 operations?
A: In terms of sales, Mexico is one of the most important countries among emerging markets. However, our potential is limited because we cannot access the public market. This is a key restriction that affects our growth and as a result we are highly focused on the private market.
Nonetheless, the restriction we face given the lack of a free-trade agreement with India is forcing us to be more creative and to negotiate with our headquarters to see if in the future we could have a local manufacturing site. This is a process that will take a long time.
Q: Mexico’s epidemiological transition is creating new business and innovation opportunities. What are Emcure’s plans in this area?
A: Given that we are a generics company, we need to consider the patents issue. Chronic diseases represent a significant opportunity for us. Innovation in the pharmaceutical research industry has been very limited. It is difficult to create new medicines with a differentiator in terms of efficiency or therapy. Although there is still much to be done, when you talk about hypertension, cholesterol or even diabetes, doctors know how to control these ailments with products that are already on the market. What we want is for these medications to reach more people.
Q: Which technological application is Emcure’s highest priority?
A: Technology focused on the process of medicine elaboration has brought us new molecules that can cure diseases for which patients had no options in the past. The problem is that this situation increases the cost of
treatment. Companies like Emcure are also focused on biosimilar products and on taking these treatments to a larger number of patients.
Q: How can Emcure adapt to the changes in medicinal consumption habits Mexico faces?
A: There has definitely been a change in consumption habits in the past 10 to 15 years. When the generics industry started around 20 years ago, there were few medicines in the market and people did not know about them. It is a market that has evolved, although its evolution in Mexico has been somewhat late. More than adapting, we want to add to this change in consumption of medicines. People are becoming more aware of what generics are. As citizens, we must also trust in the approval process that COFEPRIS has put in place, which has become a reference in many other countries. In fact, having a medication approved by COFEPRIS gives companies a fast track for approval in other Latin American countries.
Q: What role do generics play in delivering health results and providing more effective access to medicines?
A: It has the most important role. Generics are the reason why a greater number of people have access to certain products or medicines. When patented products lose their exclusivity, prices tend to rise. What we are looking for as a generics company is to provide these medications to more people. At the end of the day, there is always going to be a market for both, patented and generics. Even though they overlap in some areas, there is a clear differentiation between the two.
Q: What is behind the growth of this market in Mexico?
A: People are actively looking for generic products, 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 companies need to raise awareness about brands. In our case, we want people to know that Emcure’s products have the same quality as those manufactured by large companies in the sector.
FAST, ACCESSIBLE DIAGNOSTIC TESTING FOR THOSE WHO NEED IT MOST
JOSÉ LUIS NUÑO CEO of Unima
Q: How is Unima revolutionizing diagnostic practices and how can this technology improve care?
A: This test is fast and low-cost and can be used by nonspecialized personnel. Unima’s goal is to allow on-site diagnostics without the need to take a sample and send it to a laboratory. This testing device can be taken to the most remote areas of the world for those who do not have access to a traditional laboratory or who cannot afford a regular test. This technology allowed us to decentralize diagnosis, which is important since some of the diseases we fight have a global impact, such as tuberculosis, HIV, malaria and influenza.
Q: In what other fields can information collected by your device be used?
A: The test requires only one drop of blood. It is placed on a diagnostic paper sheet equipped with biomarkers that generate a visible change on the paper when it comes in contact with blood. To make a diagnosis, the user takes a photo of the paper with an app in their smartphone to get a result in a few seconds. Then the result along with contextual information like geolocation, date and time is uploaded to a cloud server. The collected data is tagged, stored in the cloud and analyzed. We plan to use all this data to perform real-time analysis related to the spread of diseases. This information could be useful for health systems and governments to address infectious diseases.
Q: What is Unima’s ideal client profile and what are the main advantages this test provides in comparison to others?
A: Our market is made up of global health organizations such as Doctors Without Borders and the Red Cross, but also national public health sectors in each country and international pharmaceutical companies. One of the main advantages of this technology is its extremely low cost. The second main advantage is that it removes access barriers since it can be taken to anyone living anywhere in the world.
We do not change the user’s healthcare model; we provide a tool that adapts to their needs. For instance, we developed a quick test for tuberculosis and we are
working with NGOs in Africa that have incorporated it into their regular services.
Q: How does your product compete or complement the services of diagnostics clinics?
A: We do not compete with diagnostic laboratories. We focus on large healthcare NGOs and pharmaceutical companies. For this last sector, we are developing rapid diagnostic tests. In underdeveloped markets such as Mexico, we are not a competitor but rather a complement to their services, since we offer them the possibility of reducing their operative costs.
To date, our biggest impact is in Africa but we are also targeting Latin America, China, India and Southeast Asia. The barriers to enter these countries are regulatory since there is no global certification, so it is necessary to submit to the approval process of each country. Around 75 percent of our work is focused outside of Mexico.
Q: How is your technology changing the approach doctors must take when making a diagnosis?
A: We do not change the diagnostic algorithms but we adapt to the existing technology. For example, our TB test has a sensitivity that competes with almost any other test in the market. However, current TB diagnostic algorithms require a final confirmation test. For that reason, our test is a first contact test for triage and screening: if our test is positive, for certain diseases the patient will require a confirmation test. Similarly, our test allows us to rule out those who are not suffering from the disease. For diseases that do not require a lab scale confirmation test, the result will be definitive, so the infection would be confirmed at that moment. The impact of this technology is that it allows doctors to speed up their diagnosis so the patient can begin treatment as fast as possible.
Unima develops and implements low-cost diagnostic and disease surveillance technology for infectious diseases. This software allows medical professionals to diagnose diseases in less than 15 minutes without any lab equipment
ATTRACTING & RETAINING TALENT
An industry based on skill requires highly skilled talent. Mexico’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.
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?
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 is struggling to serve the medical needs of the population, the private sector, the public sector, academia, even patients and users, are not oblivious to that singular reality that Mexico needs to train, attract and retain the talent necessary to continue meeting health-related objectives.
The health industry is changing rapidly, with the digitalization of processes, the modernization of medical services, ambitions to rise up the clinical research chain, the emergence of new drugs and the creation of stateof-the-art medical devices. Both academia and the public and private sectors need to keep pace by providing the educational plans and training programs that will supply the skilled talent the sector increasingly requires.
“The market evolves faster than the higher education centers that guide students in various lines of study or specialization. It is true that the health industry requires new skills, but there are not enough people who can offer them.
The sectors that pay the best in Mexico, Brazil, Argentina, Peru, Colombia and Chile are technology, banking and health, which on average pay between 28 and 35 percent more than other industries. These industries pay more because there is a lack of market focus on knowledge. For this reason, companies bring people from abroad or from other industries,” says Consuelo Pi, Manager of Healthcare Division of Michael Page.
EDUCATION AS A CATALYST
One of the starting points to finding a solution should be, therefore, education. This not only refers to education related to health professionals but to the country’s entire system of education.
In 2016, according to CONACYT, 6,606 students graduated in fields related to the health industry, a small decrease compared to 2015, when 6,668 students graduated. The issue, however, is in how these newly graduated professionals are distributed throughout the republic. According to the OECD, Mexico has 2.4 doctors per 1,000 inhabitants, a number that is below the average of the countries in the organization. “The inclusion of clinical research as an optional or mandatory class at universities
and colleges is key to promoting the development of clinical research in Mexico. We need medical students to embrace research. Educational programming should also include opportunities to work in pharmaceutical clinical research and basic research. If students leave university with knowledge about clinical research and its basic elements, when they enter the industry they will be competitive professionals.”
According to the OECD Report on the Health of Mexicans published in 2016, between 2005 and 2014 the number of professionals related to healthcare increased by 215,000, a period in which the state of Nuevo Leon led growth with three workers per 1,000 inhabitants. Chiapas was last on the list. Contrast this with Mexico City, which had more than three times as many health workers as Chiapas. These significant differences represent a real challenge for the authorities, since the centers that depend on the public sector are not able to meet the demands of the entire population, who often must travel hundreds of kilometers to see a specialist or pay out of pocket for a treatment in the private sector. And it is not just an issue of doctors. Mexico has 2.9 nurses per 10,000 inhabitants, well below the OECD average, which stands at nine nurses per 10,000 habitants.
IMPACT OF ECONOMIC GROWTH
The economic growth Mexico has enjoyed since the beginning of the 21 st century has pushed the country closer to the figures of the most developed members of the OECD in some areas, but it has also led to the appearance of problems unthinkable a few years ago that are reflected in the current health system. One is the epidemiological change that the country is experiencing, caused mainly by two factors: the aging of the population as a consequence of the increase in life expectancy and the appearance of chronic noncommunicable diseases. Thus, the prevention and education of professionals capable of working with new diseases and pathologies must be key for Mexico to continue developing an equitable health system in accordance with the times. “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 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, Director General of CONACYT.
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 also been significant benefits. International companies 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 but it is not enough,” he explains.
TRAINING MEDICAL SPECIALISTS
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 by the system.
According to a report elaborated by the National Academy of Medicine of Mexico and CONACYT, the 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 fall on the companies, because if we want the industry to become professional it is important to be responsible for their training.”
NA1 No applicant was selected NO2 This specialty does not offer places Source:
ATTRACTING AND RETAINING TALENT
Talent retention is among the most important challenges facing the health industry in Mexico. The country generates professionals for all areas of health at its public and private universities, some of which are internationally recognized. However, personal ambitions, the lack of a system that protects employees and the difficulties developing their profession at most of the system’s public facilities force
many to seek opportunities outside of Mexico. It is also necessary to add the gap that has opened in recent years between the real needs of the industry and the choice of specialties by students, which often do not match, given the epidemiological transition that Mexico is experiencing, with an increasingly aging population and with chronic and noncommunicable diseases on the rise.
Sources:
MEXICAN GRADUATES PER FIELD (2016)
6,606 Graduates in health and related
FUTURE OF HEALTHCARE: MADE-IN-MEXICO RESEARCH
JOSÉ MUSTRE DE LEÓN Director General of CINVESTAV
Q: What would you identify as CINVESTAV’s greatest contribution to the healthcare sector?
A: CINVESTAV, one of Mexico’s largest academic institutes, performs research in many different fields and offers several masters and Ph.D programs. Spain’s Superior Education Council published a yearly ranking for research institutions. In this survey, we ranked 30th, higher than any other university in Latin America. About 30 percent of the institution’s researchers are working in a health-related area. CINVESTAV has two technology transfer offices, one in Mexico City and another one in Guanajuato. We are also perfecting our strategies to help our researchers bring their products to market. However, our greatest contribution to the healthcare sector is our former students, who now work in research centers or in the healthcare sector.
Q: With what type of companies does CINVESTAV collaborate to carry out R&D?
A: Major international companies often have their own R&D centers and are less likely to involve third parties. Mexican companies, on the other hand, are contacting us to develop collaborative projects to address various diseases. For instance, we are collaborating with Grupo Neolpharma on the development of treatments for Parkinson’s.
Q: Many foreign pharmaceuticals are outsourcing their R&D divisions to China. What would be necessary to bring these programs to Mexico?
A: Although Mexico has excellent researchers, there are not enough to manage these projects. Research centers such as CINVESTAV will be key to attracting R&D from other countries. For instance, Intel and Oracle developed their own R&D centers in Guadalajara, but to do so they required a large number of researchers. This could also happen in biotechnology and healthcare, but it is necessary for Mexico to increase the number of qualified professionals it 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.
Q: How have Mexico’s epidemiological changes influenced CINVESTAV’s main research lines?
A: At the end of 2017, Mexico City’s government and CONACYT proposed the creation of a research center targeting aging that will be managed by CINVESTAV. There is a great deal of research concerning neurological diseases related to aging, such as Alzheimer’s and Parkinson’s, but these efforts have not been enough. The new center will receive an initial investment of MX$210 million and will be located on our campus in the south of Mexico City. The center will start by focusing on chronic diseases, but we also have researchers studying the molecular processes and genomics behind aging.
One of the many research areas to be addressed will be the mobility problems older people face, especially as they often differ from those of the rest of the population. The government is already aware of the problem and has introduced some measures to facilitate mobility, including the adaptation of roads and sidewalks. Our research center on aging will have a group that makes recommendations on public policy to provide better care for older people. Mexico City is clustering a significant number of older people in comparison to other areas of the country.
Q: What future trends will have a strong impact on healthcare?
A: Some budding research areas like genomics will allow a greater understanding of diseases and improve personalized care. Aging-related research will also have a significant impact in the next 30 years as it might be possible to delay the aging process. One of the goals of this research is to provide those over 100 years of age the quality of life they would have at 60. Another flourishing area is wearables, which will greatly diminish the cost of care, especially for individuals with mobility problems. Just like any other technology, it will be expensive at first, but once its use becomes more widespread, costs will come down.
CINVESTAV one of Mexico’s largest academic institutes, performs research in many different fields and offers several masters and Ph.D programs. About 30 percent of the institution’s researchers are working in a health-related area
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 country’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 country’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.
Obesity research at Novo Nordisk
THE BEST WAY TO IDENTIFY TALENT
CONZUELO
Manager of Healthcare Division at
Q: What is Michael Page’s role in the healthcare sector and what is the profile of companies that demand your services?
A: At Page Group, we offer specialized recruitment and selection services. We are also consultants on human resources but, unlike head hunters, our profile is integral. We are always in contact with our clients and candidates, which allows us to keep up with the new developments in the industry. Our goal is to help companies identify the kind of talent they need, so our model is based on continuously looking for talent in the industry. To do this, we map the country and then begin to classify the candidates. We offer our services to large multinational companies, but also to startups or family businesses and we adapt ourselves to any type of client.
Q: How does Michael Page help fill the gap between the needs of the industry and the academic offer?
A: The market evolves faster than the higher education centers that guide students in various lines of study or specialization. It is true that the health industry requires new skills, but there are not enough people who can offer them. The sectors that pay the best in Mexico, Brazil, Argentina, Peru, Colombia and Chile are technology, banking and health, which on average pay between 28 and 35 percent more. These industries pay more because there is a lack of market focus on knowledge. For this reason, companies bring people from abroad or from other industries. There are people in the pharma industry who come from highly technical areas but who assume commercial roles. In addition, the pharma industry is entering a commercial and marketing professionalization. Moving to the commercial segment has always been attractive because of the bonuses, but most people come from technical training; that is, they do not have the necessary commercial skills. The key is in the education of the candidates.
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?
A: It would make sense, but it would probably limit the choice of the students. It may be good for the industry to create talent programs inside organizations, something that has
PI
Michael Page
worked in the banking sector. Giving the responsibility to the institutions would add another task and would make the model more inefficient. The responsibility should fall on the companies, because if we want employees to be professional it is important to be responsible for their training.
Q: How have recruitment and mapping changed with the arrival in the labor market of the millennial generation?
A: We have to adapt to them, since we most likely will have a more anxious next generation. If we do not know how to interpret their movements now, we will have problems in terms of job stability in the future. The problem is not about a generation; it is about organizations making that generation feel comfortable in a working environment. This is the responsibility of the human resources departments and if they do not establish solutions, rotation problems will continue. Companies must be flexible enough to comply with their employees’ requests but demand commitment from them. In the Southern Cone, companies are applying alternative solutions. If, for example, an employee wants to go abroad to study or travel for a year the companies freeze the contract, cover their social payments and when they come back they return to their job. It is a way to retain talent. In Mexico, this is not happening yet.
Q: How easy is it to find local talent for senior management positions in Mexico’s health industry?
A: 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 it is hard to convince people to leave their comfort zone.
Michael Page is a PageGroup company dedicated to providing recruitment services to SMEs and multinational companies in senior management positions. The company is headquartered in England and is a constituent of the FTSE 250 Index
ACCESS TO MARKET A PRIORITY FOR PHARMAS
JOHANNES VIHOLAINEN Partner at Jobplex
Shrinking federal healthcare budgets are making the Mexican pharmaceutical sector more competitive, which in turn requires increasingly prepared professionals. A complex situation with access to public healthcare market has increased the quest for experienced access experts. Also, several roles that have been considered as single-function focused, such as regulatory and medical positions, are today increasingly collaborating with other company divisions and becoming more and more attached to core business, says Johannes Viholainen, Partner at Jobplex.
Jobplex is a division of DHR International, which was founded in 1996 and uses a wide variety of services to find talent for emerging leader positions. The company specializes in several sectors, including technology, finances, education and healthcare. This last sector comprises pharma and life sciences, which according to Viholainen “are of the utmost importance for Jobplex. Globally, life sciences is one of the top practices for Jobplex.” Jobplex searches the world for the best person for the position through close collaboration with its partners in the Americas, Europe and Asia. “This allows us to take a team approach to every position and gives us access to more experienced consultants. We do not operate as franchises; we share the same database and work together on all projects.”
The company has had an excellent reception in Mexico, explains Viholainen. “We have seen significant demand for specialists in access, commercial, and finance mainly for senior manager and director positions,” he says. The reason, Viholainen adds, is the budget cuts directed at healthcare services. These cuts make competition to sell to the public sector, Mexico’s largest buyer, tougher than ever.
As budgets shrink, companies find it increasingly difficult to access the public sector, so they become creative in their market approach. “Companies are now looking for innovative strategies. They are bringing their business unit leaders to spearhead their access to market division.” These professionals bring new strategies and better knowledge to create innovative medium and long-term plans that secure market access today as well as in the future.
“The industry has not been that open to welcome talent from other sectors,” continues Viholainen. Nonetheless, the pharmaceutical industry has been progressively welcoming external talent and even has been looking for individuals from non-healthcare focused industries in order to diversify its talent mix and pool of expertise. “Previously, job divisions were clear and targeted to a specific area. Now, all these functions have to be integrated, with teams that incorporate experts in all necessary topics, and all of them must work together for the same goal. Current professionals might be experts in the production and application of the products they work with but they often lack the business acumen to successfully bring them to market.”
Pharmaceutical companies are fully aware of the lack of talent, so they are internally training their future directors. “A clear example of the transition from a business division to the access division can be seen in a few Big Pharma companies, but this strategy is becoming increasingly common among other companies,” says Viholainen. The sector could also benefit from a joint approach between academia and the industry. “Recent medical graduates are more interested in working with patients and hospitals but the life sciences industry could benefit from their knowledge too. Universities would do well to explain the broad range of possibilities their degree offers them. However, so far a relationship between pharmaceuticals and schools has not been fully developed to allow for this exchange of information.”
Mexico is the second-largest market in Latin America. As a result, businesses prefer to place experienced executives with a successful track record to the key roles in their local affiliates. “During 2016, we estimated that approximately 30 percent of general managers at multinational pharmaceuticals based in Mexico where born in the country. "
While finding adequate and qualified talent might be difficult, Viholainen is confident that Jobplex’s broad experience will allow the company to successfully find professionals “Jobplex sees potential for growth in Mexico as we have a unique set of capabilities brought about by the company’s background with our top executive brand, DHR International.”
MEDICAL DEVICES COMPANIES SEEK SPECIFIC KNOWLEDGE
Q: What unique benefits does Hays offer to healthcare companies?
ML: Hays’ healthcare division is fully specialized in the sector and our expertise allows us to provide tailored consulting services. HR professionals know the company’s requirements and with our market expertise we become key partners who help them fill their vacancies. To generate a successful relationship between employer and employee, it is important that we understand the needs of both.
Hays initially worked with the pharmaceutical industry but now specializes in recruitment for medical devices companies. We work with manufacturers and startups that need talent acquisition support. Hays addresses senior profiles; these professionals are available in Mexico, but not in the necessary numbers that the industry requires.
RR: The healthcare sector’s needs are extremely specific and companies often require particular profiles for which there could be very few candidates. We have recruited for the healthcare industry for the past three years and we offer access to a unique profile. As we know the sector’s needs, we are an excellent filter for employees.
Q: What recommendations would you give to medical devices companies looking to retain qualified talent, especially millennials?
ML: These companies are usually small and are not poised to grow their internal structure in the short term. The common profile for millennials is that they are extremely interested in growing their capabilities and to continue learning throughout their careers. Millennials feel the need to innovate, which is good for both the company and the individual.
RR: Pharmaceutical companies are often larger and much more established, so there are more opportunities for professionals to grow within the company. It is also important that employees understand their contribution to the company. We have some companies that have taken their employees to hospitals to observe surgery, which allows them to see first-hand the importance of the work
they do. Employees like to know that they are making a positive impact on other people’s lives.
Q: What are Hays’ key expectations for the healthcare market in the coming years?
ML: We expect further growth in the healthcare sector. This growth will lead to a rise in demand for medicines and medical devices. At the moment, there is great uncertainty in the industry as companies await the results of the Mexican presidential elections in 2018 and the outcome of the NAFTA renegotiation. The industry is increasingly open to accessibility schemes and looking for adherence strategies. Companies are looking at the benefits they can provide to patients and what aftermarket advantages they can deliver to doctors.
RR: Companies are at a standstill and freezing their budgets while political matters are solved locally and internationally. However, we have seen great interest in the Mexican market from international medical devices companies around the world. Several are looking for distributors to penetrate the market before opening offices. Given this interest, we have positive expectations for the industry here. The government itself faces interesting challenges in the medical devices sector, since regulations can greatly increase the final price of a product. Manufacturers sell through distributors, which in turn work with governmental institutions, thus adding to final prices. If manufacturers can approach the government directly to sell their products, the final cost would be lower. By making these sales more transparent and efficient, the government could boost the number of products it acquires, increasing the number of patients it can treat. Some governmental institutions are already incorporating these practices and it would be beneficial for all other public healthcare institutions to adopt similar policies.
Hays offers human resources management and recruitment. It has offices in 33 countries in the UK, Europe, America and Asia Pacific. In Mexico, the company specializes in finance and accounting, engineering, life sciences and marketing
Ricardo Reyes Senior Consultant at Hays
Mishelle León Consultant at Hays
TECHNOLOGY TO DISRUPT HEADHUNTING
CÉDRIC TRANTOUL Director General of Morgan Philips Group
Head-hunting is often seen as long, slow and based in oldschool traditions, says Cédric Trantoul, Managing Director of Morgan Philips Group, a company that aims to disrupt this process through the use of technology to make it faster and more efficient. “Current recruitment practices are based on the contacts and knowledge of each consultant. The operational costs of headhunting are high and inefficient. Companies are starting to notice this, so they are increasingly depending on technological platforms.”
Founded in 2013, Morgan Philips Group is a Swiss recruiter with offices in 22 countries in the Americas, Europe and Asia. To speed up the recruiting process, the company created technological platforms that simultaneously allow businesses to gain a deeper knowledge of a candidate while speeding up the hiring process. This allows Morgan Philips’ clients to greatly reduce the time necessary to fill a position. “A regular executive search takes an average of nine months but we have reduced that to only four. For middle management, the average time required to find a new hire ranges from three to six months and our average is 40 days. Reducing the necessary time to fill a position saves money.”
Technology also plays into the changing recruitment market, says Trantoul, as companies want a faster and less expensive service. To speed up the process, Morgan Philips launched its Find Your Talent Easily (FYTE) marketplace of CV video. “Most of our companies are already using this system, which is completely free for candidates. By June 2018, we had placed more than four talents per week. These companies like the model as it is fast and easy to use. For instance, a pharmaceutical company spent six months trying to fill a very specialized position. Using our system, it took them less than a week to find, interview and hire an individual.”
The pharmaceutical sector has issues regarding talent. “Pharmaceutical companies prefer not to train their talent but to find individuals who already have the necessary skills. This causes the poaching of talent between companies and increases the costs of hiring. After 20 years, the pharmaceutical industry is just beginning to change its practices,” he says.
Change in the pharmaceutical sector is needed because the industry no longer has the deep pockets to pay inflated prices for these professionals as the growth of the generics industry has hit Big Pharma profits, says Trantoul. Moreover, the sector is consolidating as larger companies increasingly buy smaller ones to improve pipelines. In Mexico, the market is also facing transformation for local reasons. “Previously, companies that wanted to sell in Mexico needed their own production line. They then sold their products through distributors. Once that regulation was struck down, international companies closed their plants and reduced their work with distributors to manage operations on their own.” The effect is a growing number of pharmaceuticals with Mexican leadership. “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 these managers have a better understanding of the market and its regulations. Foreigners sometimes work with a local counterpart to understand the culture but it is not enough.”
In some cases, there is a lack of local talent to fill specialized positions. “If a company in Mexico wants to hire data scientists, it will have to look for them abroad.” Headhunting is often a local endeavor, as most recruiters only look for hires in the same country or city as the company that requested them. “We have an international database with four talent centers around the globe that feed the database with talent from all corners of the world. We are able to use our global network to find a future employee and bring them to the company.”
Morgan Philip’s technological investment is only one of the company’s recent developments and the company has plans for more. “By the end of 2018, we will launch Morgan Philips Consulting, which focuses on supporting a company’s internal organizational development.” Today, organizations are changing at an accelerated pace, responding to demands from current and potential employees. These changes include more collaborative spaces, open offices, changes in hierarchy and inclusivity, among many others, explains Trantoul.
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 in terms of human talent and what must be done to meet those requirements.
IS MEXICAN TALENT BOLSTERING THE INDUSTRY OR HOLDING IT BACK?
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 to retain them in the long-term.
MISHELLE LEÓN Consultant at Hays
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
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.
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
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.”
Between 2017 and 2018, the international and domestic stages have been dominated by uncertain change, with the US throwing NAFTA in the air and a new president arriving on Mexico’s horizon. Not everyone likes uncertainty, but many investors see a silver lining, particularly in Mexico’s health sector.
“Our experience of over 20 years in Mexico has taught us that periods of political and economic uncertainty often give rise to attractive investment opportunities,” says Ariel Blumenkranc, Director of Advent International Mexico. “Additionally, company owners may be open to a partner that can help them navigate cycles of instability.”
These intrepid investors can see beyond the smoke clouding the environment, such as the potential results of NAFTA talks and the TPP11, to the trends on the ground that are shaping the health industry, which remains open to new players wanting to participate.
Paul Doulton, Founder and Managing Partner of Oriundo, says the scenario is positive because most companies have enough products and business models to overcome the prevalent challenges. In Blumenkranc’s opinion, companies should focus on the micro trends that are affecting industries and companies, not only on the macro issues.
According to Doulton where many see challenges, companies see opportunities for change, growth and development. “Some CPTPP countries are far less competitive than Mexican companies, so I guess the treaties will strengthen Mexico’s pharma and healthcare industries because they fully comply with global standards and regulations.” In this context, the Center for US-Mexican Studies by the University of California says that it is time to reconsider NAFTA’s existing provisions on cross-border trade services and expand health trade between both countries because most Mexican border areas are larger than their US counterparts.
Insurance companies are among those that have an opportunity to benefit from this trade exchange, and provide a benefit to the population at the same time.
“There are also significant opportunities to increase penetration of medical insurance solutions to the middlelow income segment. Through a value-based approach to healthcare delivery, with time-driven activity-based costing and all-inclusive bundled packages, companies can provide more transparency to the healthcare system, thus enabling the major insurers in Mexico to offer affordable products to the middle-low income segment that now lacks access to a quality medical insurance plan,” says Alonso Gómez, Investment Officer at International Finance Corporation. On an international level, a win-win situation could emerge from NAFTA’s talks, according to the Center for US-Mexican Studies. The center says US citizens have greater access to healthcare through insurance plans, so Mexico could take advantage by expanding its appeal for medical tourism, investing more in state-of-the-art medical facilities and training bilingual medical professionals.
Beyond the challenges, the uncertainty and the changes, Mexico is still an attractive country for investment for several reasons. “Mexico is going through an epidemiological transition. Today, around 55 percent of mortality is related to diabetes, cancer and cardiovascular diseases. These conditions require an increase in the availability of infrastructure, resources, materials and health personnel,” says Ignacio García-Tellez, Director of the Health Sector at KPMG in Mexico. In addition, GarcíaTellez says that the country has the right conditions to attract new companies and the necessary demand to continue introducing innovative products and services in the health sector.
To maintain favorable business conditions, companies should approach “business as a community-building effort, where growth comes from reaching beyond the familiar circles of influence to new players,” says Sandra Sánchez-Oldenhage, Owner and CEO of PharmaAdvice. “As an industry we must multiply our business relationships to keep reaching all the patients who can enjoy the medicines available and the new ones to come; it is an expanding circle of need. The challenge is how we can get all these stakeholders, from academia to governments, payers, researchers, and with the patient at the center of all decisions, organized in pursuit of the same goal.”
ENTREPRENEURS, MEDICAL TOURISM
According to ProMéxico, in the last 10 years the country has become the second-most important destination for medical tourism, with approximately 1.2 million visitors a year, lagging only behind Thailand, which ranks first with 1.8 million visitors. The value of medical tourism industry is growing year by year and in 2016, ProMéxico estimated the value of the industry at MX$4.8 billion, while the projected value for the end of 2018 is MX$5.3 billion. According to the Center for US-Mexican Studies, three areas of expansion must be considered when discussing the cross-border health relationship: the increase of medical tourism, people who work in the US and who receive medical attention in Mexico and the development of the workforce in charge of addressing the shortage of primary care physicians, nurse practitioners and others in the US.
Innovation and entrepreneurship are recognized by the World Bank as key factors in addressing development challenges such as inclusion, sustainability and prosperity, as they boost productivity and economic dynamism; therefore, emerging economies such as Mexico’s can benefit from new or improved products developed by entrepreneurs.
Entrepreneurs in the health sector must “understand the problems in the healthcare industry and for the industry to support them with the necessary resources,” says Héctor Valle, Founder and Partner of INNOVASALUD, who
adds that the main difficulty for entrepreneurs is that “Mexico lacks an angel investor system, which complicates the creation of new companies.” The entrepreneurial opportunities in the health sector, according to Entrepreneur, reach across the industry’s entire spectrum, although the most interesting opportunities are in dental health, gyms, pharmacies, clinical laboratories, stem cell banks, skin care, foot care, nutrition physical rehabilitation and psychological attention.
“Individuals need to increase their investment culture to support these emerging companies, but it is also necessary for the government to invest more in the generation of new companies,” says Valle. He adds that new companies and entrepreneurs should keep in mind that “healthcare products must undergo complex, expensive and time-consuming regulatory processes and new companies must be able to finance themselves throughout these periods.”
Governments, according to the World Bank, should focus on creating healthy innovation ecosystems where human capital, research and development institutions, financial capital, the industrial base, the legal and regulatory environment, business and innovation culture are present for entrepreneurs. In a market economy, entrepreneurship should occupy a central position because it can stimulate the economic success of a nation.
Baja California
Baja
Chihuahua
Nuevo Leon
Puebla
Quintana Roo
San Luis Potosi
Sonora
Tamaulipas
Yucatan
DETECTING INVESTMENT OPPORTUNITIES
ARIEL BLUMENKRANC Director of Advent International Mexico
Q: What role does Mexico play in the company’s global strategy?
A: Advent International has two investment programs: Global Private Equity (GPE), focused on North America, Europe and Asia, and Latin America Private Equity Fund (LAPEF), focused on Latin America. We believe that having a local presence is key to successful investing. For this reason, in 1996 we launched a dedicated investment program for Latin America. In Mexico, we have completed 24 investments and today have five companies in our portfolio: Gayosso, Invercap, Grupo Financiero Mifel, Viakem and Grupo Farmacéutico Somar. Somar, a leading generics and branded generics pharma company that we acquired in October 2017, is our first deal in the Mexican healthcare space.
In addition to Mexico, Advent International has Latin American offices in Brazil, Colombia and Peru. Regionally, we manage US$5 billion and our most recent fund, the largest private equity fund in Latin America, is capitalized at US$2.1 billion.
Q: What are the most relevant healthcare subsegments for Advent International in Mexico?
A: Pharmaceuticals, hospitals and diagnostic clinics are the three healthcare subsectors we have focused on in Latin America. That said, we are constantly analyzing investment opportunities in these and other healthcare segments. We typically invest in companies that have strong growth potential and are often leaders in their subsectors. We are flexible in the types of deals we do, from control to minority positions.
Q: What added value does Advent International offer through its transactions?
A: We believe we must bring tangible value to the companies we invest in. We offer a powerful combination of internal and
Advent International is a global private equity fund focused on recapitalization, buyout, public-to-private and growth operations across the world in healthcare, industrial, retail and telecommunications. It operates 13 offices in 12 countries
external resources to support management teams: the Deal Team, Operating Partners and Portfolio Support Group. The local deal team, which specializes in certain sectors, seeks investment opportunities, conducts due diligence and leads the deal from the initial investment to divestment.
Operating Partners are external industry experts who are typically former CEOs of leading companies or local business owners. The third team is Advent’s internal Portfolio Support Group, consisting of 17 people globally. They are functional experts and work closely with management teams to execute projects that bring substantial value to our portfolio companies.
During due diligence, we invest significant time, effort and resources to build a Value Creation Plan (VCP). This plan touches all the fundamental parts of the company and determines the key value drivers we should focus on. The three groups work seamlessly together in the creation and execution of the VCP.
Q: What has been the impact of Advent International in Mexico and Latin America?
A: We have several success stories in the Latin American healthcare industry. In the pharma space, our most recent transaction besides Somar is Grupo Biotoscana, originally a Colombian pharma company with a leading position in the specialty pharma subsector. In five years, through organic expansion and several acquisitions, the company doubled the number of countries where it has a presence. Additionally, in 2017 Biotoscana successfully completed an IPO on the Brazilian stock exchange.
Another example is Fleury, a leading diagnostic services provider in Brazil. Together with our partners, we designed 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 patients and more than 150 patient service centers. During our investment, Fleury increased its EBITDA margin by 40 percent. These improvements translated into approximately 350 share price growth during our investment period.
FIGHTING FOR THE COMMON INTERESTS OF PHARMACEUTICALS
LUIS VILLALBA Executive Director of FIFARMA
Although pharmaceutical companies compete by nature, they all share common interests in many areas. Representing these interests is the raison-d’être of national and international organizations like the Latin American Federation of the Pharmaceutical Industry (FIFARMA).
“FIFARMA owes itself to the patients in Latin American and to its members. Our goal is to support them and help them to reach their goals in the most productive way,” says Luis Villalba, Executive Director of FIFARMA. “We are committed to the development of innovative therapies as all our members are heavily involved in innovation.” The association now comprises 21 members, including major pharmaceutical companies like Amgen, Astellas, BMS, Lily, Pfizer, Johnson & Johnson, Roche, MSD, Abbvie, Bayer, Novartis, Merck and Sanofi, as well as most pharmaceutical associations in Latin American countries including Argentina, Brazil, Colombia, Chile, Ecuador, Mexico, Peru, Central America (including part of the Caribbean) and Venezuela.
As a representative of the pharmaceutical sector, FIFARMA has a broad range of priorities, from fighting piracy, to promoting regulatory harmonization across Latin America, and works closely with the PAHO. The ultimate objective is to simplify the introduction of medicines and provide adequate access to innovation for all the population, which can be achieved by following the guidelines of other agencies. “Brazil, Mexico and Argentina have advanced regulatory agencies in the region and can be considered reference points in Latin America. If a product has been certified by any of these advanced agencies, it should be possible to introduce it in any other Latin American market.”
According to Villalba, Mexico has good regulations regarding pharmaceuticals and is taking clear measures to address enforcement. The problem the country is facing is the lack of access. “Local regulations specify that once a product is registered it still must undergo several more processes to be incorporated into the basic formularies of public health institutions.” Innovative medicines have high R&D costs, a situation that is even more complicated for orphan drugs, whose development costs are also high but
for which the potential patient base is much smaller, which in turn increases final costs. FIFARMA seeks to work with authorities to simplify these processes for the benefit of patients, for instance, through the development of financing schemes. “We are greatly interested in the implementation of an outcome-based model where institutions pay for success cases instead of sold units. Some pioneers are introducing this financing model into Mexico but it is not yet popular.”
FIFARMA is also prioritizing pharmacovigilance and has launched a project called Vigilantia to strengthen its practice. “Pharmacovigilance needs to be highly proactive. While many Latin American countries have developed regulations concerning pharmacovigilance, there are significant reporting gaps considering the size of the population. The goal of Vigilantia is to increase awareness of the importance of pharmacovigilance for patients.” Villalba highlights several strategies, such as regular controls to provide medications and more follow-ups with patients. “The first step is to create awareness with doctors so they can communicate the importance of reporting side effects to their patients and to take note of these side effects. However, for doctors it is often time-consuming to keep track of this information because they are already extremely busy with other paperwork. Ideally, pharmacovigilance reports should be sent both to the manufacturer and to regulators.”
Villalba highlights the elimination of pirated medicines as another priority. “Falsified pharmaceuticals are the bane of the sector. They represent a huge burden for the population and for the pharmaceutical segment. In some countries, we estimate that the number of falsified products in circulation can reach up to 10 percent of the products.” To address this issue, FIFARMA adopted the Fight the Fakes initiative championed by IFPMA as it considers that existing efforts have not been sufficient. “We are fully convinced that this sector is not receiving enough attention from neither the authorities nor society. Our goal is to facilitate the work of the authorities in enforcing regulations and preventing these fake products from entering the sector.”
UNDERSTANDING, RESOURCES NEEDED TO NURTURE ENTREPRENEURSHIP
HÉCTOR VALLE
Founder and Partner at INNOVASALUD
Q: What needs to be done to encourage healthcare entrepreneurship in Mexico?
A: It is necessary for entrepreneurs to understand the problems in the healthcare industry and for the industry to support them with the necessary resources. Healthcare products must undergo complex, expensive and timeconsuming regulatory processes and new companies must be able to finance themselves throughout these periods. Mexico lacks an angel investor system, which complicates the creation of startups. Individuals need to increase their investment culture to support these emerging companies, but it is also necessary for the government to invest more in the generation of new companies.
Q: What is the role of INNOVASALUD in supporting companies and generating a culture of entrepreneurship?
A: We identify viable projects led by people that fully understand the sector. We provide support by helping them understand all the minutia of the healthcare system and as the project matures we find ways to support the project financially. For instance, we supported a dermatology project by connecting its creators to individuals who have historically invested in this area. This last strategy allows us to make both an economic and a knowledge match.
Q: In which type of healthcare projects is INNOVASALUD investing?
A: INNOVASALUD has invested in 26 different projects, including 3D printing, virtual reality for pain treatment and nurse and care givers homecare services. For instance, we invested in operating 134 doctor’s offices next to pharmacies as we believe that these models increase access to healthcare. INNOVASALUD has dental clinics for D and E socioeconomic levels and bariatric clinics for overweight patients. We are also investing in the generation
INNOVASALUD is a venture capital firm focused on healthcare and the pharmaceutical industry. The company aims to transform healthcare in Mexico through the introduction of innovative technologies
of AI for breast cancer diagnostics. AI allows programs to collect and use data from millions of patients all over the world and provide it to doctors. We are also investing in the development of preventive measures and personalized healthcare through genetic testing and supporting research on the generic profile of rare heart diseases.
Q: What are the main challenges that are impacting the healthcare sector?
A: One of the main problems is the lack of investment. In 2017, Mexico invested 5.8 percent of its GDP in healthcare, which is below the OECD’s 9 percent average. Another issue is the existing healthcare system, which was designed to treat the diseases the country faced over 70 years ago and that is divided in IMSS, ISSSTE, PEMEX, SEDENA and others. These systems do not communicate with each other and for that reason they cannot share services and doctors, forcing patients to travel to major cities to receive care. All this is a consequence of low investment in health.
Q: How can different systems be unified to increase access to care?
A: It would be beneficial for patients to have service portability and access to their medical profile so they can take it to the provider of their choice. To achieve this, it is necessary to create reference and payment schemes among the systems so that they can exchange information and compensate each other. It will always be less expensive for any institution to pay for the services provided by another than to build a new hospital or to force individuals to travel to different cities.
Q: How can the healthcare system change to adapt to the growing problems in the country?
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 requires cooperation from patients, who must be willing to take responsibility for their own care. The second is to increase services and infrastructure through the participation of the private sector in healthcare.
HOW AND WHERE TO ARRIVE IN MEXICO
Ignacio García-Tellez Director of the Health Sector at KPMG in Mexico
Q: How does KPMG guide new entrants through the basic questions they must answer before, during and after starting operations in Mexico?
MT: New entrants must define where and how they want to work in the Mexican market, since their corporate structure and the geographic location can help understand the logistical advantages and disadvantages when positioning, moving and exporting a product. The new participants should evaluate the logistics infrastructure and be sure to understand how to do business in Mexico from an economic, legal and taxation point of view. The labor structure in Mexico must be addressed before starting operations, as this knowledge could avoid operational surprises.
IG: New entrants must consider their commercial purpose in Mexico and whether the company wishes to use the country as a final market or as a platform to reach other markets. The services offered by KPMG allow the development of a business plan to help new participants define their income strategy, supply chain partners, tax optimization and negotiation schemes. Before a company arrives in Mexico, it must also know if it wants to enter alone or with a partner. In Mexico, the private sector represents 80 percent of the market, while the public sector represents the remaining 20 percent. Before entering the market, companies must contract services such as those offered by KPMG.
Q: Why is Mexico still a good investment destination for healthcare companies?
IG: Mexico is going through an epidemiological transition. Today, around 55 percent of mortality is related to diabetes, cancer and cardiovascular diseases. These conditions require an increase in the availability of infrastructure, resources, materials and health personnel.
MT: The health sector has enough experience and commercial platforms to provide new companies a more fluid entry, especially since new entrants can find other multinational and national companies to complement their operations. It is no longer necessary to arrive in the country with all the operating components; today, companies can focus on the most relevant matters.
Q: What main advantages does Mexico offer new participants in the health sector?
MT: The Mexican workforce is highly trained and participates in the development of products across a range of industries, such as cars, medicines, packaged food and flat screens.
IG: We are the fifth top exporter of medical devices in the world. Mexico is a country that needs to access innovative products and improve the adoption of technology. In addition, the country has the right conditions for new companies that want to access the market.
Q: What trends has KPMG identified in the Mexican health sector?
IG: There is a constant increase in digitalization and automation processes that is accompanied by the generation of information through data analytics. Companies are starting to use the information they generate day-to-day to improve their operations and to invest in cybersecurity measures. We also see the entry of startups that will streamline the connection between the different entities that make up the health sector. In general, key players have a great potential to improve the access to high-quality services.
Q: What untapped potential do Big Data and technology have for the Mexican health sector and what role does KPMG play in this scenario?
MT: Data analytics have a strong presence in areas such as marketing, but the trend is to strengthen its use in areas such as sales, finance and production. The use of data allows companies to understand the market’s behavior and to take advantage of commercial, production and sales windows. This information can serve to outline consumer behavior to understand when and how a particular drug is consumed.
KPMG is a global network of professional services firms providing audit, tax and advisory services that operates in 154 countries and territories and has 197,263 people working in member firms around the world
Miguel Ángel Temblador Corporate Tax Partner at KPMG in Mexico
HEALTH AS A COMPETITIVE ENGINE FOR THE ECONOMY
SANDRA SÁNCHEZ-OLDENHAGE Owner and CEO of PharmAdvice
Q: What are PharmAdvice's main capabilities?
A: PharmAdvice assists companies that want to break into the Mexican health market or expand within it, whether as a new incumbent or aiming to unleash their growth track. The company offers a broad portfolio that includes helping clients identify and contextualize regulatory requirements and dynamics, understand the payer’s landscape with its impact on access, identify private market opportunities and lobby and establish contact with key government stakeholders, strategic and brand planning among others.
Q: What are the basic questions new entrants must answer before, during and after starting their operations in Mexico?
A: There are many areas to consider, but the basic questions I would focus on, fall under the following areas: regulatory, access, reimbursement and lobbying and commercial strategy. In the regulatory field, new entrants must be very clear in their understanding of patent law and local regulation, be it biotechnology, traditional pharmaceuticals, generics, biosimilars, medical devices, vaccines or others.
In terms of access, reimbursement and lobbying, the company needs to clearly understand how the health care system works in Mexico and how to get into the different basic formularies. This alleviates difficulties that can arise from the extreme fragmentation present in the public sector. So, the company needs to find the most cost-effective business model that ensures patients’ access to its products in an affordable way for the payers. Finally, a customized commercial strategy is key to having a commercial advantage when coming to Mexico. After drugs or medical devices are approved, the company can participate in two markets: public and private, that are considerably different. Having a robust and flawless commercial business plan to take advantage of these two sectors is key to success.
PharmAdvice is a pharmaceutical, biotechnology and healthcare consulting services company that specializes in strategic and brand planning, regulatory affairs, commercial support and lobbying for the healthcare sector
Q: What are the unexplored opportunities in the Mexican pharmaceutical and biotechnological sectors?
A: Mexico is facing severe challenges in terms of demographic and epidemiological shift as the population ages and moves toward chronic-degenerative diseases.
Increased patient numbers with more comorbidities, a smaller number of taxpayers, extreme fragmentation of the payer system, limited public budgets and infrastructure leading to cost containment strategies and demographic bonus at risk of not being productive also impacts the system. All of this can lead to a negative impact on our country’s competitiveness.
The current government’s three basic priorities for the healthcare sector are aimed at improving effective access to healthcare, quality of service and promoting prevention. Based on these fundamentals, opportunities arise within all these challenges and it requires the health sector to contribute in an efficient and opportune way to promote greater research and development of treatments that are focused on the most burdened chronic diseases that can turn into a solution for Mexican patients.
Also, pharmaceutical incumbents must become active players and foster circumstances that favor the coexistence of innovators with generics and biosimilars, thus demonstrating the sensitivity and understanding of the cost-containment condition of payers.
Q: How can collaborations be generated among health sector agents to achieve these opportunities?
A: This means approaching business as a communitybuilding effort, where growth comes from reaching beyond the familiar circles of influence to new players. As an industry we must multiply our business relationships 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 we can get all these stakeholders, from academia to governments, payers, investigators and, ultimately, with the patient at the center of all decisions, organized in pursuit of the same goal.
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 promotional segment must find a differentiating factor to stand out, says Óscar Ramos, Commercial Director in Latin America for Grupo SANED. He points to the Spanish company’s decision to change its marketing approach to emphasize storytelling as a communications strategy. “Doctors are saturated with the number of medical reports they receive about pharmaceutical products,” Ramos says, adding that the group is investing in technology to help its partners to position themselves in the industry.
Grupo SANED develops marketing, e-business and market access projects for the medical industry. The group is composed of medical writers, marketing experts, designers, programmers and experts in sanitary regulation. The company, which also supports clinical research projects in Mexico, began as a publishing house but has developed a wide range of capabilities and services for promoting pharmaceutical products, including films.
A recent success story in this latter segment is ‘Nebulosa Elisa’ (Nebulous Elisa), a short film developed with Pfizer that targets primary care physicians. The 12-minute movie won Spain’s ASPID award, which is an annual prize granted to creative projects that promote pharmaceuticals. “We use the film as a conversation starter in meetings for doctors and led by opinion leaders. The film is discussed as a prelude to a deeper conversation about the disease in question.”
Movies like ‘Nebulosa Elisa’ are subtle promotional strategies as they focus on the disease and only mention the promoted drug’s name at the end. Until mid-2018, Grupo SANED had filmed about 40 movies. Ramos says that the successful reception for ‘Nebulosa Elisa’ spurred Pfizer to ask for a second film, which he sees as a thumb’s up for the group’s strategy.
A more complex approach involves film and online integration, including courses. One example is the campaign ‘Diabetes on the Road.’ “In the movie, various opinion leaders go to different cities to talk to local
specialists,” Ramos says. “We then release videos online on a periodic basis so doctors who follow these opinion leaders can watch.”
In Mexico, Grupo SANED has also started developing films to be viewed with virtual reality glasses, a strategy that it now wants to export home. In the first project, which simulated a heart attack, a cardiologist uses a modified massage chair to reproduce the symptoms of a cardiac event, including paralysis of the torso’s midsection. “The goal was to sensitize doctors to the suffering a patient endures during a heart attack. This project was so successful in Mexico that we are trying to export it to Spain.”
Education is a pillar in Grupo SANED’s structure, as it also participates in continuous education for medical professionals, providing education through its virtual campus that allows doctors to access courses on a laptop or even a cellphone. “Through these courses, doctors can continue their medical training throughout their professional lives,” Ramos says.
Although Grupo SANED works with most of the main pharmaceutical laboratories in Spain and Mexico it also supports pharmacies. “Pharmacy chains want us to train their doctors in the 50 most common diseases they face on a daily basis.” The company also has a one-of-a-kind annual agreement with CETIFARMA, which Ramos says, “forces us to be careful regarding ethical procedures for the pharmaceutical industry.”
The Spanish company is targeting an expansion in Latin America that started in Mexico. It had previously worked with Mexican clients from a distance but decided to open offices in the country to better connect with the local population. “Our offices in Mexico aim to understand the local market, to stabilize our position in the country and to position Grupo SANED in the Mexican pharmaceutical sector.” This is the first step as the company eyes regional growth. “We plan to open offices in Colombia by 2019 as part of our expansion strategy for Latin America.”
NEW PLAYERS, NEW OPPORTUNITIES
PAUL DOULTON Founder and Managing Partner of
Oriundo
Q: What strategies can be applied to increase access to healthcare in Mexico?
A: The success of allowing access to hundreds of thousands through medical offices located inside many pharmacies offers important lessons for improving access. These offices handle as many consultations a day as the entire social security network, save waiting hours at IMSS clinics, provide many patients with an adequate diagnosis and supply the necessary generics. All this at a cost that is accessible to the patient, while reducing the high incidence of selfmedication and avoiding the perverse incentive of disability or sick pay that obstruct IMSS waiting rooms. This saves IMSS millions of pesos in medicines and also saves time. To overcome the criticism that these offices are not up to standard, standards have been established and applied, which has allowed their continuous improvement. The other way to improve access is to allow patients to see a doctor at any institution, regardless of their affiliation, something that was in the original mandate for the creation of Seguro Popular.
Q: What are Oriundo’s expectations for the country?
A: We have gone through periods of uncertainty in the past but I think there is no need to worry. Today, Mexico has COFEPRIS, a globally recognized regulatory agency, world recognized global standard generics and highly competitive modern, flexible manufacturing plants for pharmaceuticals. These standards are transforming Mexico into the preferred source of supply in Latin America and North America and explains why investment continues.
Q: What should healthcare companies expect from a renewed NAFTA and TPP11?
A: We need to look closely at the results of NAFTA and TPP11, but it seems that the scenario will be positive. Most companies have a wide range of products and
Oriundo is a consultancy composed of former CEOs that helps new entrants to Latin America pharmaceutical markets. It has four main business lines: market entry, portfolio rejuvenation, acquisition and divestment and turnaround
different business models. There are other more important challenges for health companies in the country. Their business models are making them strong players in the domestic market and the results of CPTPP or NAFTA should not have a major impact on their performance. Some CPTPP countries are far less competitive than Mexican companies, so I guess the treaties will strengthen Mexico’s pharma and healthcare industries because of its full compliance with global standards and regulations. The last few years have witnessed a number of would-be entrants, especially in generics, that have failed because neither their standards nor business models match the needs of the Mexican market.
Q: What is the most common profile of the companies you work with and how do you help improve their business?
A: Our most frequent successes have come from market entry strategy guidance to foreign companies that want to enter the Mexican market. We help them understand what is required for success, be this partnering or licensing with local companies, acquisition, and above all our “hit the deck running” model. The fastest growing service now is portfolio rejuvenation, assisting both Mexican and more recently local subsidiaries in locating new therapies. And with any consulting project, our goal is to ensure that our clients can create and sustain genuine differentiation through either improved technology, smarter business models or better still, both. Competing simply on the basis of price is a downhill race to extinction.
A recent case in point is a small US oncology company, which is differentiating itself not only through better drugs but through inhibitors of the resistance creators such as STAT3 proteins and a companion full diagnostic service. This is the technology differentiation, but then we need to partner with a local company whose differentiated business 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 public sector, the major buyer of oncology treatments. We are also exploring new alliances with companies operating in Mexico and Latin America to discover new and revolutionary medicines.
COMMERCIAL POTENTIAL AND DICHOTOMIES OF CANNABIDIOL
RAÚL ELIZALDE President of HempMeds Mexico
Q: What factors make HempMeds Mexico the ideal company for the commercialization of cannabidiol (CBD) products in Mexico?
A: HempMeds became the first company in Mexico to be approved by COFEPRIS to import CBD oil for patients with a clinical diagnosis of refractory epilepsy, among other conditions. We are a leading company in the US in the field of non-psychoactive cannabinoids like CBD and all our products are derived from legal industrial hemp crops in Europe and other countries.
Q: What difficulties has HempMeds faced in the introduction of a product in Mexico that public opinion has always associated with organized crime?
A: Misinformation has been the biggest problem because people do not differentiate cannabinoids from marijuana. We do not work with the psychoactive version of cannabis, which contains THC. In 2017, the WHO declared CBD as a non-psychotropic substance because it does not generate addiction.
Q: What is the true potential of CBD for the Mexican health industry?
A: HempMeds sees a big opportunity to use cannabinoids for balancing physiological functions related to the endocannabinoid system found in the human body in receptors such as CB1 and CB2. Mexico needs to invest more in R&D studies regarding the use of CDBs in therapeutic treatments and to expand the possibility of using substances derived from cannabis for research. Synthetic cannabinoids in the market have proved to have a positive effect, so that botanical cannabinoids combined with other drugs could generate a greater benefit.
Q: What advice would you give to doctors who have not changed their opinion about the use of CBD products?
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 professionalism and information. We hope that in the future non-psychotropic cannabinoids can be considered like any other supplement for human health. Research has shown a
positive effect in the treatment of neurological diseases such as Alzheimer’s, which is why the health industry must press for more research into its medicinal properties. In Mexico, the industry has the advantage of being highly regulated in both therapeutic and industrial uses. The homologation of the national industry with international standards will encourage the importation of more products to Mexico that are derived from non-psychotropic cannabinoids.
Q: What alliances or partnerships is HempMeds looking for to consolidate its position in the Mexican market?
A: We are open to commercial partnerships oriented to product development with companies that are already in this branch and have experience in the pharmaceutical or food supplements segments. HempMeds Mexico seeks potential partners that share similar expectations in the growth and development of the hemp industry based on rigorous quality processes.
Q: How does HempMeds achieve cost-effective efficiency in its products?
A: All our products with CBD have a Triple Lab Testing process to guarantee quality and purity, from its crops to the finished product. The international parameters that we use in the industry help us to standardize the manufacturing process and the concentration of the doses; this makes HempMeds Mexico a very different company.
Q: What are the three main goals for HempMeds in the coming years?
A: First, we want to consolidate as the leading company of cannabinoids in Mexico. Later, we want to bring the full HempMeds’ stock to the country and to develop our products here for export. We think Mexico has favorable conditions and regulations to develop the full cycle of production for CBDs.
HempMeds Mexico is a US company focused on the manufacture of cannabidiol products. The company launched its Mexican division in 2016 with the goal of providing access to the hemp extract cannabidiol oil
LOOKING FOR RISK-TAKERS TO DISRUPT HEALTHCARE
PAMELA SERNA Director of Health Area at Entropy Labs
While many praise and admire market disruptors, others fear change and its implications. In Mexico’s healthcare sector, the latter view is more prominent, says Pamela Serna, Director of Health Area at Entropy Labs. “Based on my experience in the public and private sectors, I believe that users tend to fear innovation and prefer to keep using known practices and equipment. For that reason, we need to work closely with Mexican companies to fully understand their needs and how to incorporate technology into their practices. It is necessary to coach our clients about the benefits that new technologies can offer them.”
Created in 2016, Entropy Labs is a consultancy for different sectors, including healthcare. Entropy Labs brings together specialists in many areas, including economics, medicine and data science. “Our goal is to make a difference in healthcare research,” says Serna. As an example, Entropy Labs looks for projects and companies that can be improved through the use of Internet of Things (IoT), which allows the constant monitoring of equipment to facilitate the work of operators. In healthcare, this technology can help operators perform predictive analysis of equipment to take preventive measures before failure becomes imminent.
While IoT principles are widespread in many sectors, such as energy, aerospace or automotive, healthcare has fallen behind in the incorporation of these practices. To quickly fill the gap, companies such as Entropy Labs can take advantage of existing processes and techniques. “We are learning from other industries regarding the application of IoT principles. Some of our collaborators have worked in automation projects for other sectors, for example.”
Entropy Labs first project was the optimization of a selfgenerating oxygen plant at a hospital in Culiacan, Sinaloa. Plants like this allow hospitals to concentrate and filter atmospheric air to obtain oxygen that can be used during surgery, in mechanical respirators and in many other areas to replace the use of oxygen tanks. “This technology may seem revolutionary in Mexico, but other countries have
been using it for over 20 years. Our goal is to break the existing paradigms and the bureaucratic processes that impede the penetration of this technology.”
Clients are often unaware of the existence of this technology and are often reluctant to incorporate it, says Serna. “To carry out this project, it was necessary to find a real risktaker, which is rare in the health sector. However, now that it is installed, doctors understand that it does not hinder their work. One of our responsibilities is to convince all interested parties of the potential benefits of this technology.” In this particular case, Diphsa brought to Mexico and installed the equipment. While the installation work represented an important initial investment, Serna says that the company financed it for three years and now only pays maintenance costs, resulting in almost 80 percent yearly savings in oxygen compared with the use of tanks.
Entropy Labs’ goal with this project was the automatization of all processes through the use of IoT principles. “Before our involvement, operators collected all data in notebooks. We installed software that automatically measured and compiled the plant’s operational data and the quality of the oxygen produced to ensure that the gas complied with European regulations.” Entropy Labs expects to finish this project by the end of 2018. “Once the platform is finished we can use it as a model and replicate it at other hospitals to digitize different hospital areas like imaging departments. We are looking for interested hospitals that have an innovation area that can manage the incorporation of these systems.”
Entropy Labs will continue branching into different healthcare areas through the development of technology that capitalizes on Mexican creativity. “One of our goals is to develop new economic models for healthcare, such as community healthcare, self-management of healthcare, and different business models that address gaps in care. Technology will be essential for the future of healthcare but it is not our savior. We need to change the mindset of the general population to develop strategies for providing and managing healthcare through prevention.”
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’s twin goals are ending extreme poverty by 2030 and ensuring shared prosperity in a sustainable manner. To achieve these goals, IFC supports companies in the private sector by providing financial and nonfinancial solutions. On the investment side, we provide long-term competitive financing in the form of corporate loans, long-term project finance, mezzanine instruments and equity investments. IFC’s goal is to become a long-term valuable partner by sharing global knowledge through our industry specialists and global relationships with key business players.
Q: In which sectors is IFC operating and where does the health industry fit in your portfolio?
A: Our key sectors in Mexico are health and education, infrastructure, financial markets, manufacturing, telecommunications, renewable energy, agribusiness and water. In the healthcare space, IFC has a global portfolio of US$2 billion, of which 40 percent relates to investments in the pharma sector. There are many Mexican companies looking to expand operations to other markets and we believe we can support them in that regard by sharing knowledge on potential partners in new markets given IFC’s global network, our healthcare expertise in emerging markets and our local presence in almost every country in Latin America.
We look for projects that are financially sustainable with high-development impact. We have different metrics for every sector and we monitor them closely to ensure that the investment achieves its development goals.
Q: What would be a recent success case for IFC in Mexico?
A: salauno. It is a company founded by two entrepreneurs in 2011 who adapted a model that was created in India to provide affordable and quality ophthalmology services to the base of the pyramid. We have been partners since 2014 and have supported the company to achieve its growth plan.
Q: What are the main concerns of investors in Mexico and how do you help them?
A: IFC helps investors by reducing political risk through government relationships, preferred creditor status and by playing neutral broker role. Given IFC’s local presence in more than 100 regional offices, IFC can provide certainty to other investors when they are entering a new country. Within the World Bank, the Multilateral Investment and Guarantee Agency (MIGA), IFC provides political risk insurance guarantees for projects in a broad range of sectors in developing member countries.
Q: What are the key areas for investment in the Mexican healthcare sector?
A: We have seen several investment opportunities across different subsectors within the healthcare space. For instance, the hospital and labs industry is very fragmented. There are opportunities for consolidation as the private sector accounts for two-thirds of the hospitals in Mexico but only one-third of all beds (just 6 percent of private hospitals have more than 25 beds). Private healthcare expenditure in Mexico will continue growing given Mexico’s demographic trend. Mexico’s population is aging and chronic diseases are growing while the country has a deficit of medical infrastructure: only 1.6 beds per 1,000 population, which is the lowest among OECD countries, 2.2 doctors per 1,000 people and the lowest public health expenditure at 5.8 percent of GDP versus the OECD average of 9 percent.
There are also significant opportunities to increase penetration of medical insurance solutions to the middle-low income segment. Insurance penetration is quite low. Through a valuebased approach to healthcare delivery, with time-driven activity-based costing and all-inclusive bundled packages, companies can provide more transparency to the healthcare system, thus enabling the major insurers in Mexico to offer affordable products to the middle-low income segment that now lacks access to a quality medical insurance plan.
The International Finance Corporation (IFC) belongs to the World Bank Group and focuses on the private sector in developing countries. IFC applies financial resources, technical expertise and global experience to help partners
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 the important difference and the essentials of the Mexican Market dynamic. Mexico is a US$12.5 billion market and the second-largest in Latin America. Its constant growth was driven by better access, global standard generics, obesity and diabetes, an aging population and new patient-centered business models.
The global production standards and processes are transforming Mexico into an increasingly important sourcing hub for the region in both South and North America. Inwards, the investment continues to nurture efficiently pharma plants and midsize companies in Mexico show greater growth than the big boys and global players.
There has been an astonishing improvement in patient access via the doc-in-a-box model. This means around 100 million consultations every year. This model is the establishment of a doctor’s office next to pharmacies as the result of the failed social security model. Now, patients through this model save time, get a proper diagnosis and global standard generics and can go back to work sooner. Also, the changes reflect great savings for IMSS and other social security clinics.
In the regulatory sphere, COFEPRIS, the maximum regulatory agency became recognized by EMA, FDA and others. The regulatory agency has raised standards of generics to global quality, enforcing compliance, and has speeded up marketing authorization for new drugs from a two-year approval process down to three months.
Overall, the decades-long stifling monopsony of wholesalers has been broken through the fast-rising power of the pharmacy, supermarket chains and specialist distributors as most of the doc-in-a-box offices are located next to the chain pharmacies, so private label generics are the fastest growing category.
The less good bits are that healthcare situates too low on the political agenda, the move toward a single payer
has not happened and the public spending on health has dropped from 6.2 to 5.8 percent of the country’s GDP. The minor problem is the registration of drugs. Also, the tender process for drugs requires more specialized knowledge to avoid forced price reductions.
The questions that we need to address in developing the right market entry strategy, are: 1) how is your own company different in technology, business model, success in other markets? This is your starting point to see how your focus might fit into the opportunities and differences of the Mexican market. 2) What do you want to achieve? Are you averse to risk? Are you open to find different ways of doing things? Can you identify synergies with other Latin American markets, how will you source and what level of control is right? The answers to these questions will ensure that the strategy design will prosper when seeking approval from your board. 3) How to get the strategy right? Talk to the right people, there are good, reliable sources of local support such as AMIIF, CANIFARMA, Healthlinks, Oriundo, IQVIA and others that will put you on the scope. 4) Which markets should I go for? Define who are your real audience and what is the real decision locus for your company to define whether to enter the public, private or both sectors. 5) How fast do you want your market entry, and where does Mexico fit on the global priority list? This will have a bearing on our choice of route, whether this is through (the right) marketing partners, licensors, acquisition, outsourcing to hit the deck running or go it alone. So, of course, this needs the right kind of person to drive the business to success.
Getting it right the first time is what this is all about. Do not try to force a driven model from markets where the market dynamics are so different. Folks who have run market entry strategies here on the ground have taken all the knocks. So why not talk to them? And remember, Latin America has over 20 markets, all with differing market dynamics, so the right strategy for Brazil or Colombia may not be the right one for Mexico, albeit there are powerful regional synergies that can be built.
AI Artificial Intelligence
AIDS Acquired Immune Deficiency Syndrome
AMID Mexican Association of Innovative Industries of Medical Devices
AMIIF Mexican Association of Pharmaceutical Research Industries
AMIS Mexican Association of Insurance Institutes
API Active Pharmaceutical Ingredient
ART Anti-Retroviral Therapy
ARV Anti-Retro Virals
B2B Business to Business
B2C Business to Customer
CANACINTRA National Chamber of the Transformation Industry
CANIFARMA National Chamber of the Pharmaceutical Industry
CENSIDA National Center for the Prevention and Control of HIV / AIDS
CEO Chief Executive Officer
CNS Central Nervous System
COFECE Federal Commission of Economic Competition
COFEPRIS Federal Commission for Protection Against Sanitary Risks
CONACYT National Council for Science and Technology
CRO Contract Research Organization
EMA European Medicines Agency
ENSANUT National Survey of Health and Nutrition
EU European Union
FDA Food and Drug Administration
FPGC Protection Fund against Catastrophic Expenditures
FTA Free-Trade Agreement
GMP Good Manufacturing Practices
GPS Global Positioning System
HIV Human Immunodeficiency Virus
IMPI Mexican Institute of Industrial Property
IMSS Mexican Institute of Social Security
INEGI
National Institute of Statistic and Geography
IoT Internet of Things
IP Intellectual Property
ISSSTE Institute of Safety and Social Services for Federal Workers
JCI Joint Commission International
LATAM Latin America
M&A Merger and Acquisition
NAFTA North American Free Trade Agreement
NCD Non-Communicable Disease
NOM Mexican Official Norms
NSF National Safety in Food
OECD Organization for Economic Co-operation and Development
OTC Over the Counter
PAHO Pan-American Health Organization
PEMEX Petróleos Mexicanos
PPP Public-Private Partnership
R&D Research and Development
Rx Prescription Drugs
SAGARPA Ministry of Agriculture, Livestock, Rural Development, Fishing and Alimentation
SALUD Ministry of Health
SEDENA Ministry of National Defense
SEDESA Ministry of Health of Mexico City
SEMAR Ministry of the Navy
SINGREM National System of Medicines and Bottle Residue Management
T1D Type 1 Diabetes
T2D Type 2 Diabetes
CPTPP Comprehensive and Progressive TransPacific Partnership
