“We will make Mexico achieve universal access to healthcare, in a non-segmented way and based on the fundamental pillars of equity, quality and safety”
Jorge Alcocer Varela, Minister of Health
2019
The Mexican healthcare sector has been through a roller-coaster 2019. Budget cuts have limited public sector maneuverability and uncertainty has made many investors cautious regarding short-term expansion and investment plans. While the hurdles have been significant, the Mexican economy remains steady and the local market for pharmaceuticals and medical devices shows promise. The current administration led by President Andrés Manuel López Obrador positioned universal healthcare at the top of the agenda, along with the need to address the rise in chronic diseases and to counterattack corruption in the system.
Among the industry’s buzzwords and phrases at this time of change are Big Data, analytics, innovation and technology interoperability. As Industry 4.0 practices penetrate the health sector, one key hurdle stands in the way: Mexico’s fragmented system, which makes it difficult to share data and achieve the data integration that characterizes Industry 4.0.
Healthcare is also essential for the country’s economic growth. 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.
Mexico Health Review 2019 is a comprehensive report on the state of the industry, the key developments that have shaped the past year and most importantly, a signpost for the direction in which this key sector is moving.
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: 978-1-7328256-4-2
Zocalo, Downtown Mexico City
STATE OF THE INDUSTRY
1The uncertainty derived from the political and economic changes at both the national and international level continues to affect the Mexican healthcare sector, which is still awaiting the implementation of the present administration’s plans and the lines of action that will guide the sector’s development. The health system remains fragmented and high morbidity rates caused by diabetes, heart disease and obesity also remain a public health concern. However, as one of President López Obrador’s flagship projects, the creation of the National Health Institute for Welfare aims to provide care to the entire population to get a little closer to a universal health system.
Mexico Health Review 2019’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. This section also analyzes the areas of opportunity within the Mexican healthcare market and the best strategies to foster the sector’s growth.
CHAPTER 1: STATE OF THE INDUSTRY
8 ANALYSIS: Year in Review
12 VIEW FROM THE TOP: Zoé Robledo, IMSS
13 VIEW FROM THE TOP: Mauricio Vila, Governor of Yucatan
14 VIEW FROM THE TOP: Ana Riquelme, AMID
15 VIEW FROM THE TOP: Oliva López, Minister of Health of Mexico City
16 VIEW FROM THE TOP: Cristóbal Thompson, AMIIF
17 VIEW FROM THE TOP: Marcos Pascual, ANAFARMEX
18 VIEW FROM THE TOP: Emilia López-Portillo, Monterrey Healthcare City Cluster
19 VIEW FROM THE TOP: Javier Potes, Consorcio Mexicano de Hospitales
20 VIEW FROM THE TOP: Eric Hagsater, FunSalud
21 VIEW FROM THE TOP: Viviana Linares, CFM
YEAR IN REVIEW
While Mexico’s chronic disease epidemic continues unabated, new hurdles have arisen. The administration change brought with it a new vision to increase access to healthcare that surprised many in the industry. As the sector adapts to the new environment, it should not forget that change brings opportunity
Mexico is the midst of an obesity epidemic that cost the country MX$240 billion (US$12.43 billion) just in 2017 and is now linked to the three main mortality causes in the country: heart disease, diabetes mellitus and malignant tumors. Furthermore, the country has subdued but failed to vanquish an old foe: infectious diseases, such as measles, rubella, dengue, Chagas and tuberculosis, continue to affect the poorest parts of the country.
This complex situation is what the new administration had to contend with when it entered office in December 2018. President Andrés Manuel López Obrador campaigned on the promise of universal healthcare access, a complicated issue that mystified previous administrations. “The government should provide access to healthcare services to all, no matter their personal beliefs, socioeconomic status, living conditions or ethnicity,” says Oliva López, Minister of Health of Mexico City (SEDESA). Throughout López Obrador’s early tenure, his administration has sought to achieve this goal by eliminating unnecessary spending in many areas and addressing corruption, which he perceives as the major setback for every economic sector in the country.
or looking for new alliances, many in the sector agree that the key to adapting to these changes is innovation.
HETEROGENEOUS MORBIDITY
One complex reality in Mexico is that it faces an epidemiological duality. “Mexico is an interesting market. Part of it behaves as an emerging market and another as a mature one because the change in the population pyramid is more common to mature markets,” says Américo García, Director General of Mexico and Latin America at Apotex.
85
million
While the goals seem beneficial, their implementation, and the focus on austerity, has created confusion and uncertainty among players in the public and private sectors. Beyond the hit on investment in healthcare, the austerity measures are proving a hinderance to delivering healthcare to those who need it. “About 60 percent of healthcare services are provided by the public sector so budget cuts will have a deep impact. Moreover, demand continues to grow alongside the population. These trends will impact the sector on two fronts: quality and wait times,” says Guillaume Corpart, Managing Director of Global Health Intelligence. The public sector also is Mexico’s largest buyer of medications and medical supplies, so budget reductions hit these manufacturers and their supply chains.
The number of people who are obese or overweight in Mexico
Infectious diseases continue to affect millions of Mexicans. In 2018, 24.5 million people suffered from an acute respiratory infection, 5.4 million from gut infections and 4.3 million from urinary infections, according to the General Direction of Epidemiology. However, thanks to modern medicine patients can be cured of most of these diseases, which has led to lower mortality rates stemming from this category of diseases. In 2017, the only infectious diseases to rank among the Top 10 mortality causes in the country were influenza and pneumonia. Together, these two diseases accounted for 21,892 deaths in 2017, which was also several times fewer than deaths from chronic diseases. Heart disease, the leading cause of death that year, represented 141,619 deaths.
However, modern medicine has also allowed individuals to live longer. Along with the widespread availability of processed foods, these factors have led to the growth of a different foe: obesity. Today, 72 percent of Mexico’s population is either overweight or obese. The World Health Organization (WHO) estimates 85 million people are obese or overweight in Mexico. Obesity is a risk factor for many diseases and is linked to the three main causes of death in the country: heart disease, diabetes mellitus and malignant tumors. These diseases are increasingly taking more lives and will continue to do so unless drastic changes are made.
It is obvious that the country’s healthcare sector will continue to experience change throughout the coming years. Under these circumstances, the sector is looking for strategies to adapt and to continue growing. While some are investing in technology, analyzing new payment strategies
The country’s diverse economic and geographical distribution complicates the provision of healthcare services and plays a role in the epidemiological profile of different regions in the country. The difference in disease prevalence is fueled by the variation in risk factors that affect each population. “We arrived at the conclusion that
cervix cancer is more associated with poverty and limited access to healthcare. Colon cancer, on the other hand, is heavily linked to obesity and overweight,” says Abelardo Meneses, Director General of INCan.
DIFFERENT RISK, DIFFERENT STRATEGY
To address Mexico’s complex epidemiological profile, the current administration wants to migrate to a comprehensive healthcare system that understands the reality of the country. “Focusing on the population’s right to healthcare services forces us to go beyond medical treatment. Health does not equal the absence of disease and should not be the responsibility of healthcare providers only,” says López. “Guaranteeing the population’s right to access healthcare services requires an analysis of the social determinants or conditions that generate well-being and allow people to have a fulfilling and fruitful life as individuals, families and societies.”
Every administration enters office with a different vision of how the country should be run. However, President López
Obrador had the goal of completely reshaping the country through the solution of what he considers to be Mexico’s largest problems: corruption and irresponsible spending. For many sectors, including healthcare, these policies translated into significant budget cuts that have impacted care providers by limiting the number of medicines, medical devices and equipment they can acquire. They have also curtailed the number of doctors, nurses and residents. By May 2019, healthcare professionals from the country’s major public institutions at 13 different states had protested the lack of medical supplies and what they called unjustified firings. These problems only make the administration’s goals of increasing access to healthcare even harder.
For that reason, some propose that an efficient provision of healthcare requires the support and collaboration of other players besides the government. “Individuals will need an increased number of healthcare services and current public infrastructure has been surpassed by existing needs. This gap in services needs to be addressed both by public and private institutions to ensure access to quality healthcare services by the entire population,” says Paulino Decanini, Executive President of SiSNova. This cooperation will be increasingly necessary as healthcare costs continue to increase.
Unlike acute sickness, chronic diseases require medical attention and medication throughout the patient’s entire life. These costs add up. IMCO states that obesity-related diseases like diabetes can cost between 73 and 87 percent of all healthcare expenses. The growth of these diseases will place a heavy burden on the finances of the public sector, which provides care for 61 million Mexicans. The sector is already strained for resources – Mexico is ranked second among OECD countries in terms of the lowest investment in healthcare. The shortages of medications, medical supplies,
Source: Mexican Federation of Diabetes and the Ministry of Health and INEGI
doctors and other professionals translate into long wait periods at public institutions and unfilled prescriptions.
Medication shortages at public institutions are not expected to abate soon. The mid-2019 medication tender reduced maximum prices by 8 percent, which will hurt the already small margins of bidders. Moreover, in a move that shocked the entire pharmaceutical industry in Mexico, the tender was open to countries with which Mexico does not have free trade agreements (FTAs). “These countries manage lower prices, which forces local manufacturers to lower their own prices, reducing their margins,” says Corpart. The tender also had no bidders for 62 percent of products, which “will create a shortage of medications at public institutions that will force patients to head to the private sector,” says Rafael Maciel, President of the Mexican Association of Generics (AMEGI).
ROAD TO INTEGRATED HEALTH
Different sectors of the healthcare industry can contribute to increasing access to healthcare services, medications and supplies. A major concern for both patients and doctors is the lack of access to innovative medications. This is a problem common to emerging economies. “In developed countries, about 10 percent of the population has access to innovative medications. In emerging countries, these are only available to 1 percent of the population,” says Ana Longoria, President and Director General of Novartis Mexico. Leaving patients without access to new treatments creates significant problems for patients, who may receive a less-effective medication or no medication at all. While medicines can enter the Mexican market as soon as they are approved by COFEPRIS, this certification only makes them available at the private sector. Making a medicine available in the public sector requires a much longer process that often takes years and does not guarantee availability. Big Pharma aims to address this problem through innovative payment methods that would allow the public sector to pay not for the medication, but for positive outcomes only. “A way to fix this is through innovative access models in which
the public sector pays only for results. We are talking with local authorities to introduce these models, which forces us to ensure that the medications we sell benefit the patient,” says Longoria.
To provide as much medication as possible to a larger number of patients, public institutions have focused on the acquisition of generics, which can be up to 80 percent less expensive that the patented medicine. In 2019, the federal administration budgeted MX$79.42 billion (US$4.16 billion) for the acquisition of medications, according to SHCP. Between 2012 and 2018, COFEPRIS approved 590 generic registries to address 71 percent of the most common mortality causes in Mexico. This strategy saved public institutions MX$26.1 billion (US$1.37 billion), according to the former Commissioner of COFEPRIS, Julio Sánchez y Tépoz. Now, generics “amount to 86 percent of prescriptions in the public sector,” says AMEGI’s Maciel. Due to their lower costs, generics have expanded to the private sector and now, nine out of every 10 medications sold in the country are generics, according to data analytics firm IQVIA.
This predilection for generics has allowed the country to develop into the world’s 25th-ranked pharmaceutical manufacturing industry. In 2017, the country’s production was valued at US$4.74 billion and is expected to reach US$9.48 billion by 2025, according to ANAFAM. Investing in generics will facilitate the administration’s goal of increasing access to care while keeping budgets in check. Mexico’s budget for medication at public institutions totals MX$79.42 billion (US$4.16 billion) for 2019.
Another heavy expense in healthcare are medical devices, whose acquisition may pose a problem considering budget cuts. To address the provision of care with smaller budgets, technology developers are changing their approach to the healthcare sector. “Today, our focus has evolved from products and services to solutions. Instead of just focusing
on technology, this new approach has broadened our vision by putting patients front and center and integrating our products and services to offer a holistic solution,” says Carlos Jiménez, Director General of B. Braun Mexico.
Other developers have invested in technology to improve efficiency and eliminate redundancies as a long-term strategy to keep costs down. For instance, a report from McKinsey states that incorporating AI in healthcare can save companies US$113.7 billion when improving service operations and eliminate risks valued at US$23.5 billion. Technology can also be a tool for the administration’s goal to increase access to healthcare services. “Technology can allow greater access to specialists to more individuals, which will be increasingly useful given the rise in chronicdegenerative diseases,” says Marcos Pascual, Commercial Director of ANAFARMEX.
Another area that could contribute to increasing healthcare access is insurance. However, healthcare insurance has failed to penetrate the Mexican market due to its high costs. “Private health insurance is too expensive for most Mexicans,” says Eduardo Lara, Head of Health, Latin America at Reinsurance Group of America. For that reason, only 8.62 million people had a health insurance policy in 2017, according to AMIS. There is, however, a significant area of opportunity for insurance products. In 2018, 52 percent of health expenditure was made by the public sector, 44.5 percent was made out of pocket and only 3.5 percent was made by private insurance. The high percentage of individuals who pay out of pocket points
to a population that can afford to pay for healthcare but has been unable or uninterested in acquiring an insurance product.
To address this problem, insurers are developing innovative solutions that target overlooked segments of the population. For instance, some companies are developing less-expensive policies that address only one particular disease. Another strategy is incorporating technology to increase efficiency. The growing trend of mixing technology and insurance, now called InsurTech, allows companies to use data analytics, artificial intelligence, blockchain and machine learning to improve their operations and improve patient retention. While this trend has not yet penetrated the Mexican insurance sector, insurers are increasingly aware of its potential. “Even though the Mexican insurance industry has been very traditional and cautious to adopt changes, now it is understanding that digitalization could be a fast way to improve the relationship with the end consumer,” says Lara.
While austerity policies will continue to curtail the healthcare sector, millions of Mexicans will still require care. In that sense, cooperation with the private sector can play an important role in increasing access. “We believe Mexico has major challenges regarding chronic-degenerative diseases and disease transmission. However, we believe austerity does not have to be a barrier to achieving the required quality standards in products,” says Ana Riquelme, Executive Director of the Mexican Association of Innovative Industries of Medical Devices (AMID).
Anesthesia machine with monitor
OUT WITH THE OLD, IN WITH THE NEW
ZOÉ ROBLEDO Director General of IMSS
Q: What are IMSS’ priorities in terms of health and healthcare?
A: Our main goals are to efficiently and effectively implement expenditure, achieve better collection, fight corruption and move toward universalizing medical services in Mexico together with other health institutions. The objective is that nobody is left without the opportunity to exercise their right to health. From IMSS’ side, we want medical units to operate at their maximum capacity for all levels of care, every day of the week and on both shifts. This will allow us to grow our patient capacity without the need to build new medical units. Technology will be key in increasing access to healthcare. IMSS will also launch a telephone medical consultation service, home care and telemedicine. These elements will be used to expand access to health facilities as they reduce the need for visits and bed use by up to 20 percent.
IMSS’ directors are also visiting IMSS-Welfare’s rural hospitals with President López Obrador. These hospitals provide primary and secondary-level medical care to the population without social security. Employing a preventive approach and a comprehensive healthcare model based on medical care and community action will allow more than 13 million people from remote communities in the country to receive treatment.
Q: What are your main objectives as head of IMSS for the next six years?
A: Historically, IMSS has always supported Mexico’s population and we are proud to do our part, strengthening what works and has worked and returning to the institute’s founding principle of social security. We want to guarantee that employees have access to quality health facilities, identifying areas of opportunity and evolving to face the new realities transforming the country’s health landscape. We will promote a more inclusive IMSS and work every day with a very clear idea: guarantee medical care for all Mexicans. We must move from the idea of rights on paper
The Mexican Institute of Social Security (IMSS) is Mexico’s leading healthcare and social protection institution. It was founded in 1943 and combines research and medical practice, with the administration of social security and pensions
to guarantee real health rights for all. To achieve this, we will implement actions to increase affiliation and collection in proportion to the economically active population.
Q: What problems will be solved through the “Agreement to strengthen access to justice and social security for workers or their beneficiaries,” signed by STPS and IMSS?
A: This agreement will allow joint reviews between the STPS and IMSS, so IMSS can access more information regarding the relationship between workers and their employers. In case of omitted information, IMSS will analyze the company’s processes to determine the correct classification for occupational risk insurance and the correct fees derived from it. We want to identify aggressive outsourcing schemes that under-declare salaries and thereby affect the contribution base. Finally, we want to have more reliable information regarding work-related accidents and other useful statistical data.
Q: What are IMSS’ major achievements to this day?
A: Among the most important achievements is the significant reduction in the mortality rate of women due to pregnancy and the 50 percent reduction in the risk of death for children due to infectious diseases. We have also moved forward with population changes. In recent years, services have been adapted to new conditions characterized by an aging population. PrevenIMSS was created to promote health and timely detection of chronic diseases. However, we continue to address other health matters at the same time. We improved our primary healthcare model and reduced mortality due to cervical-uterine and breast cancer. Vaccination has also improved and we are seeing better results in reducing the risk of dying from cardiovascular diseases.
In the area of transplants, we are the leading public institution. IMSS’ transplant productivity grew by 97.5 percent over the past decade, from 1,728 transplants in 2008 to 3,412 in 2018. This has been possible thanks to the training of specialists through agreements with several hospitals abroad, including Claude Bernard University in Lyon, the Vall d’Hebrón Hospital in Barcelona, La Paz University Hospital in Madrid and the Tokyo Pediatric Hospital.
YUCATAN A GROWING HUB FOR MEDICAL TOURISM
MAURICIO VILA
Governor of Yucatan
Q: The state of Yucatan has announced a near US$1 billion private investment plan. How will the health sector benefit?
A: Part of the investment will be allocated to three hospitals that are being developed in the state. We expect this will help enrich the sector’s offer in Yucatan and strengthen the state’s natural vocation for medical tourism, as well as endorse it as a leader in this sector in southeastern Mexico.
The first of the investments will be from Winehealth, the health and sports corporation. A hospital center devoted to medical tourism with a domestic and global focus on sports will be constructed through an estimated investment of MX$850 million (US$43.8 million). The center will be divided into four large units: medical assistance, sports, academic activity and accommodations. This project will generate 800 direct jobs, of which 100 will be doctors. The second will be an investment of MX$900 million (US$46.4 million) from Faro del Mayab on a 15,000m2 land parcel. This expects to generate 200 direct jobs. The last investment, comes from EME Red Hospitalaria with MX$106 million (US$5.5 million), 32 medical specialties and state-of-the art technology that will generate 1,300 indirect and direct jobs.
Q: What lines of action are being carried out by the Yucatan government to maximize the potential of medical tourism?
A: Yucatan is a great place to invest because of its high economic growth rate and its position as the safest state in Mexico. Its geographical location also enables the state to easily communicate with other regions. Yucatan is third place in economic growth and according to IMSS, it has the third-lowest unemployment rate at 1.8 percent. The state also has the necessary infrastructure and services to exploit its potential in medical tourism. Yucatan is easy to access by air, with Houston and Panama two hours away, Miami 1 hour and 45 minutes away and Colombia three hours away. As a result, medical tourists from Central and South America could avoid flying to Houston or Miami and instead be treated in Yucatan at more affordable rates, with high-quality infrastructure and services. Yucatan has excellent potential for medical tourism, given its floating population of Americans, Canadians, Cubans, Colombians and Venezuelans, who make up the state’s potential market of about 20,000 individuals.
Q: How does the health industry and medical tourism contribute to Yucatan’s economic development?
A: Medical tourism produces a significant financial spillover in the state. To maintain and improve the conditions offered to our visitors, medical tourism’s stakeholders are increasingly working in a more articulated way to provide patients with the best experience.
In addition to a wide offer of medical or aesthetic procedures, this experience includes the support of facilitators, gastronomy, wellness and culture, which leads to a greater economic spillover, benefiting the entire value chain. According to a 2018 Ministry of Health study, Yucatan is one of the few states with the human capital and the required and appropriate infrastructure to deliver quality services in the sector.
Q: What are the priority areas for the state to strengthen public health and its management?
A: In general terms, our health strategy is to strengthen prevention, health education and timely disease detection. We are working to strengthen medical coverage at the level of primary care to increase medical accessibility. This government has also created the Médico a Domicilio and 24/7 Medical programs, designed to increase medical care for the vulnerable population.
With Médico a Domicilio we take care of older adults, people with disabilities, prostrate patients and pregnant women in their homes. These people receive care through one of our health brigades. We are present in 40 municipalities, working for the benefit of families in 60,000 homes. The 24/7 Medical program operates in 25 municipalities in the state, benefiting 112,208 people by providing them with complementary medical attention when the health centers in their localities are closed.
Mauricio Vila has been Governor of the state of Yucatan since October 2018. He is a member of the PAN party and was previously Deputy and Municipal President of Merida between 2015 and 2018
BETTER DIALOGUE NECESSARY TO IMPROVE ACCESS TO MEDICAL DEVICES
ANA RIQUELME Executive Director of AMID
Q: How does AMID contribute to the growth opportunities in the medical devices industry in Mexico?
A: The association was created 11 years ago to tackle the regulatory challenges in Mexico. A significant moment was when Article 3.76 of Mexico’s Health Law was amended to require all medical devices to submit for verification or approval every five years. Our association groups over 8,000 entities with specific sanitary requirements, which is quite a burden for sanitary authorities. The association was founded to create a dialogue with the authorities to improve cooperation in this area. Now, we also work on organizing consolidated purchases for medical devices.
Q: What are the biggest challenges and opportunities for the sector in the near term?
A: The primary challenge for medical devices in Mexico is that domestic consumption is much lower in comparison to other medical goods, such as medications. Low consumption means not every patient has access to advanced technologies. Mexico is the main exporter of medical devices in Latin American and eighth worldwide. However, in domestic consumption we rank between 43rd and 48th place. This means there is a big gap between the fast development of the medical devices industry in the country and actual access for the general population. Since 2016, our agenda has focused on three main goals: reaching the highest international standards for medical devices, working with decision-makers in the industry to adopt the latest technology and collaborating with authorities to help them with tenders for purchases of medical devices.
Q: What is needed to increase safety in medical equipment?
A: The first step is to improve cooperation between private companies to increase access to medical devices. AMID wants to accomplish this by working with other associations and entities to create a united front. We support the General Health Council’s efforts to improve dialogue. More information
The Mexican Association of Innovative Medical Devices Industries (AMID) gathers global leaders in innovation of medical devices and diagnostic systems to work toward the advancement of health services in Mexico
exchange with decision-makers in the public sector is also necessary to understand the needs of authorities and the sector. We are doing similar work with the Ministry of Finance, pushing to create a differentiation between medication and medical devices in regulation. This differentiation may sound simple, but it is necessary to ensure that mechanisms and protocols for storage, distribution and commercialization are adjusted specifically for medical devices.
Q: How can the medical devices industry contribute to the government’s austerity measures?
A: We applaud the government’s austerity efforts and actions to combat corruption. At the same time, we believe Mexico has major challenges regarding chronic-degenerative diseases and disease transmission. However, we believe austerity does not have to be a barrier to achieving the required quality standards in products. Investment in medical technology could result in better attention to patients, better results in public health and a lower sanitary risk. We want to be allies to the government to help them ease device purchases and to make the right choice of innovative products to ensure the well-being of the population.
Q: What actions and strategies does AMID implement to promote innovation?
A: Since 2016, we have been running an education campaign to promote the benefits of medical devices for people’s health. Equally, we aim to generate dialogue between industry decision-makers and health professionals who treat the Mexican population. Cooperation is a very important theme and we help strengthen it with a rigorous code of conduct based on international standards. This ensures that clients use technology that satisfies their needs and that end results lead to the maximum benefit for all.
Q: What are AMID’s three main goals for the next two years?
A: Our primary goal is to accompany the government in its efforts to fight corruption and we are fully available to collaborate in this area. This year, we are preparing a training course for more than 300 distributors and intermediaries who are members of the association. We want to orient them in AMID’s new ethics code, which is based on fighting corruption.
HEALTHCARE A FUNDAMENTAL HUMAN RIGHT
OLIVA LÓPEZ Minister of Health of Mexico City
Q: How is your vision of a comprehensive healthcare system shaping Mexico City Ministry of Health’s (SEDESA) policies?
A: Focusing on the population’s right to healthcare services forces us to go beyond medical treatment. Health does not equal the absence of disease and should not be the responsibility of healthcare providers only. It is a much broader concept. Guaranteeing the population’s right to access healthcare services requires an analysis of the social determinants or conditions that generate well-being and allow people to have a fulfilling and fruitful life as individuals, families and societies.
Our scope for healthcare is broad because it tackles every step between health determinants to provide medical attention when necessary, including medical care, rehabilitation and companionship during the last stages of life through palliative care and support for a dignified death. The healthcare system involves many players but the state is responsible for guaranteeing healthcare for its citizens. The government should provide access to healthcare services to all, no matter their personal beliefs, socioeconomic status, living conditions or ethnicity. While some question whether we should provide healthcare to immigrants, healthcare is a fundamental right and we have to provide it to everyone.
Q: How is the ministry ensuring proper access to healthcare?
A: We are developing a plan to connect the capabilities of all federal ministries in charge of providing access to other health determinants, including access to a job, drinkable water, food, a place to live and a peaceful environment. All these determinants are necessary for a person’s well-being.
To bring everything together, we are introducing a system called Salud en tu Vida (Health in Your Life) that will provide a holistic service for primary care. This system strives for social transformation through the use of state resources to provide healthcare. The system will be based on a network of service providers that will adapt their actions to individual regions. Salud en tu Vida will offer specialized services for individuals in different stages of life. It includes home visits from doctors, especially to seniors, terminal or handicapped patients, under the program called Salud en tu Casa (Health
at Your Home). Another project, Salud en tu Escuela (Health at Your School), focuses on enforcing existing regulations that limit the advertising of junk food and sugary drinks at schools and encourages the use of fresh, non-processed foods for students. Our model will continue to provide care to those who need it but at its core, the model aims to promote preventive measures from an early age to reduce the number of people who need medical attention for a preventable disease.
SEDESA handles many different responsibilities, including monitoring infectious outbreaks and organizing vaccination campaigns. We have also developed specific programs for homeless people, inmates and immigrants. Our priorities in the short term include the timely supply of medicines and doctor availability. We must also ensure quality in healthcare services and that individuals participate in all stages of the process, from prevention to palliative care. We are also spearheading sanitary regulation at a local level. Our model for primary attention ensures it is universal, integral, costfree, intercultural and decentralized. Our network comprises 210 health centers, 17 specialty clinics and 32 hospitals. This year, our budget is close to MX$10.6 billion (US$556 million) and we manage about 30,000 employees.
Q: What role will the private sector and doctors at points of sale play in the future of the healthcare system?
A: Doctors at the point of sale address an existing need. Mexico City has many private hospitals and clinics but those services are not economically accessible for most of the population. Healthcare is a fundamental human right so it cannot be subject to economic capabilities. However, we can create synergies in some cases. For instance, we are developing an agreement with a private hospital with extremely specialized capabilities that are not available in the public sector. This agreement will allow our patients to receive the care they need.
Oliva López was appointed Minister of Health of Mexico City in December 2018. She has a master’s in social medicine from the Autonomous Metropolitan University (UAM) and a Ph.D. in public health science from the National Institute of Public Health
R&D LEADS TO SUSTAINED, INCLUSIVE GROWTH
CRISTÓBAL THOMPSON Executive Director of AMIIF
Q: What are AMIIF’s near-term priorities?
A: AMIIF delimited a strategic plan in 2014 and though we continue to make small adjustments, we have three defined axes: boosting access to innovation, optimizing the impact innovation has on social development and wellbeing and incorporating social issues into AMIIF’s agenda. Creating more benefits for patients through pharmaceutical innovation has been our priority but we have a debt to society that can only be met by incorporating social issues into our agenda.
We are participating in one of the president’s flagship programs, Jóvenes Construyendo el Futuro (Young People Building the Future), which targets people between 18 and 29 years of age who were neither working nor studying. We are proud to say that 35 of the first 200 companies that joined the program were AMIIF members. We believe this is an exceptional initiative and we have even been recognized by CCE for the support and enthusiasm we bring to the program.
We are also working on programs that improve access to health services, exemplified by our work at the Esquipulas clinic. This is a primary attention facility that provides services to the indigenous population in Chiapas. The idea is to implement this successful experience of providing medical attention to vulnerable populations in other areas of the country. As part of CCE’s commitment to help the president tackle extreme poverty, we have also reached out to CONEVAL to analyze the places where this vulnerable population is located and the possible actions we could take to eliminate the conditions that generate poverty. This is a CCE initiative but we want to participate in areas where we can provide more support. It is challenging but we definitely have to be a part of it, even though our participation might not be necessarily related to the pharmaceutical industry.
The Mexican Association of Pharmaceutical Research Industries (AMIIF) represents more than 60 national and international pharmaceutical companies committed to the development of new medicines and therapeutic solutions
Q: How is AMIIF’s work in clinical research helping Mexico reach the Top 10 in R&D globally?
A: When AMIIF was created in 1950, life expectancy in the country was 49.7 years; today, we live, on average, for 75.4 years. This increase in life expectancy can be linked to the impact of vaccinations, antibiotics and other types of medications. OECD-member countries normally have higher health expenditures and a higher life expectancy of 80 years, such as Switzerland, Spain or Japan.
We believe there is a great opportunity to introduce more innovation and foster the development of medicines in Mexico. For instance, when a new cancer drug is approved by the FDA, it takes COFEPRIS 56 months in average to approve it for use in Mexico. Canadians take two and a half years, while the average for the OECD is 18 months. Being able to provide this early access is fundamental.
Q: What will be the government’s role in promoting clinical research?
A: We hope public investment in health grows to 1 percent of GDP during this federal administration, as was promised during López Obrador’s campaign. Although we understand it will not be easy, it is important to do it and we hope to see this increase reflected in the next federal budget starting in 2020. Annually, the industry invests US$141 billion in clinical research. The Top 15 companies in the market invest around US$100 billion of that amount. The industry still has the potential to attract significant investment to the country. Moreover, every job generated in clinical research generates 4.4 indirect jobs, which means that this sector generates an economy in itself. Every additional peso invested in clinical research generates MX$1.67 in revenue. In Mexico, AMIIF’s members invest a little over US$300 million, which is a low number and even though we could double it, US$600 million would still be insufficient.
Mexico needs to venture into research and attract more investment. To foster this, there are legislative changes we could make as a country. For instance, Argentina just passed a law that states that any clinical study petition is automatically approved if it has not been resolved after 30 days. Brazil is also working to accelerate clinical studies.
PHARMACIES AN INTEGRAL PART OF THE HEALTHCARE SYSTEM
MARCOS PASCUAL
Commercial Director of
ANAFARMEX
Q: How is the pharmaceutical sector evolving following the change in federal administration and how are pharmacies addressing these changes?
A: The entire healthcare ecosystem is going through a transition period due to the change in federal administration.
While the healthcare problems present in Mexico during previous administrations continue, the new administration discovered new problems that were unaccounted for. The federal government, through the Federal Superior Audit, discovered a misappropriation of MX$11 billion (US$577 million) of healthcare funds by Seguro Popular and other healthcare service providers. As a result, Mexico’s healthcare system is being restructured.
Mexican pharmaceutical companies are aware of the situation and are highly invested in the definition of these policy changes so the federal government can finish establishing its acquisition strategy. In the mid-2019 tenders introduced by the federal government, about 68 percent of the medications had no bidders, leaving a significant gap of key medications that will affect patients across the country. At this point, the federal government is aiming to develop its own distribution networks, which is leading to uncertainty in the sector because the government does not have the necessary infrastructure. We expect pharmacies with doctors next to the point of sale, of which there are 18,000 in Mexico, to continue offering primary attention. These doctors are writing over 400,000 prescriptions per day and the number will continue growing.
Q: How is technology changing the landscape for pharmacies and which problems and advantages is it generating?
A: Technology will revolutionize medication distribution. At the moment, most authorities do not accept electronic prescriptions but we are pushing for this to change. Electronic clinical files must also be merged across pharmacies to create a single system that can be used by all doctors and points of sale. This system would provide valuable information to all doctors at the point of sale that would allow them to provide better treatment to their patients.
E-commerce platforms, such as Amazon, are also changing the pharmaceutical environment by selling both OTCs and
prescription medications. However, Mexican law forbids selling medications that are not regulated by the Federal Health Law. The new administration should develop a regulation that allows for the creation of a competitive environment between physical and online stores. Medicines, due to their complexity, require specialized handling that can only be provided at pharmacies. All medications should be kept at specific temperatures and those who handle medications should be fully aware of their fragility and proper care.
Q: Between 60 and 70 pharmacies open every day. Which pharmacy business model is the most successful?
A: Pharmacies are a key player in medical attention, which has led to the continuous growth of pharmacy chains, such as Farmacias Benavides, Farmacias Guadalajara and Farmacias del Ahorro, which together represent over MX$10 billion (US$524 million) in sales and employ over 40,000 people. All independent pharmacies and pharmacy chains in Mexico generate jobs for over 400,000 individuals. Pharmacy chains deliver the highest growth rates in Mexico. Most of these pharmacies are built in major cities, including Mexico City and its metropolitan area, State of Mexico, Guadalajara and Monterrey.
Q: What trends are you seeing in the market and how can pharmacies better support the healthcare system?
A: The consumer now welcomes doctor consultations at the point of sale, which mostly focus on simple diseases, such as the flu, headaches and stomach problems. We are now heading toward the next stage. Telemedicine can introduce specialized attention for patients by guiding general practitioners through the necessary procedures. Technology can allow greater access to specialists to more individuals, which will be increasingly useful given the rise in chronicdegenerative diseases.
ANAFARMEX represents close to 15,000 pharmacies across Mexico and it has over 34 years of experience. It specializes in supporting small and medium pharmacies but it also represents big pharmacy chains
COLLABORATION AMONG PLAYERS BOOSTS STATE HEALTHCARE STRENGTH
EMILIA LÓPEZ-PORTILLO Director General of Monterrey Healthcare City Cluster
Q: What opportunities do you see in Monterrey and in the state of Nuevo Leon for health innovations?
A: The cluster wants to create synergies between different players in the sector. With Industry 4.0 taking hold, we are working on attracting startups and institutions to the cluster that focus on this topic. We believe there are many opportunities for innovation in prevention, early diagnosis and preventive medicine schemes. There has also been an increase in the number of patient-monitoring apps and those focused on helping people live a healthy life.
Q: What efforts is the cluster making to diversify its membership?
A: We started as a small association for hospitals only. Competition between hospitals is very strong, so as a cluster we need to be a neutral and transparent platform that is equitable for everyone. But we felt that we were very limited, which is why we are trying to integrate doctors as well. The cluster made significant efforts to promote the strength of
Monterrey Healthcare City Cluster is an association of public and private hospitals in Nuevo Leon, accredited by national and international organizations as well as the Ministry of Economy and Labor of Nuevo Leon
institutions, including their technologies and procedures, but not their doctors. However, they can help in sharing of good practices between hospitals.
We are also working on including pharmaceutical companies and laboratories that were isolated from the cluster. We have had a number of meetings to analyze how we can work together and create a win-win situation. The idea is to find a way to work together for consolidated purchases or provide more benefits for hospitals belonging to the cluster. Having pharmaceutical members provides us with another differentiator and attracts more hospitals and members to the cluster. At the same time, we believe laboratories and pharmaceutical companies would greatly benefit from being part of the cluster. Since they do a great deal of research and need to work with patients, hospitals are important allies. These players are in different parts of the country, like Tijuana and Guadalajara, but we want to invite them to join the cluster nonetheless. When it comes to the supply chain, we are not limited by geography.
While we are open to including new companies, the cluster is still divided on whether to invite insurance players. These companies have a delicate relationship with hospitals. Still, it is important for them to operate on neutral ground.
ALLIANCES CAN HELP CREATE INTEGRATED HEALTH ECOSYSTEM
JAVIER POTES
Director General of Consorcio Mexicano de Hospitales (CMH)
Q: What strategies has CMH implemented to reach its 2025 goal of becoming the most important private health system in Mexico?
A: CMH provides the widest health coverage in the country. However, rather than remaining a group of hospitals, we want to evolve into a health system where patients can find a solution to all their health-related issues. The goal is to prepare for the future and lighten the public sector’s burden regarding chronic degenerative diseases. This is complicated because it implies that all players must start working as a team, focusing their new healthcare business model towards the patient. At the same time, patients must also take responsibility for their own health.
We have started analyzing how we can best provide the services patients need, looking at different avenues toward easy, economic and fast accessibility. The big challenge is convincing all players to work together based on information analysis and standardizing quality and level of attention across hospitals and clinics. This involves everything from phone calls to a call center, access to mobile apps, access to medical appointments adjacent to pharmacies and hospitalization.
Q: How can CMH work to improve healthcare access and quality?
A: Whenever a patient has a health problem, we need to be the first point of contact so we can obtain information about the problem and start generating solutions. Doctors should have access to a single medical record they can share with specialists. Moreover, general doctors need to have a list of specialists they can recommend to patients, with preferential prices and according to the information gathered. Patients also need to understand that once they are registered in the system, their information automatically will be available to all specialists, who will be able to access background information and any other medical consultations the patient might have received. Similarly, patients can access their information from an app at all times. We already have the technology and are in the process of strengthening the necessary alliances to ensure implementation.
The first step we took toward implementing this platform was an agreement with Laboratorios Médicos El Chopo in early 2019. With this agreement, we have a combined total of about 350 points of contact with patients. Anyone in need of lab work during nonworking hours can call a joint call center shared between El Chopo and CMH and if the office near that person is not open, access to our hospitals is provided at a preferential price.
Q: How else are CMH’s hospitals putting patients at the center of their operations?
A: We see many patients migrating from the public to the private sector. These patients are added to those we already have who pay out-of-pocket or through an insurance policy. We are talking about a total of 25 million Mexicans, which represents a financial challenge when ensuring all patients have coverage for their health problems. Even though it seems that this issue does not impact hospitals directly, being able to afford healthcare is a central aspect of the health ecosystem and the solution must be found among all players, not only patients.
One of our priorities is to look for alliances with insurance companies. However, it is not easy, since the financial sector has an operational trajectory that for many years has been focused on certain segments of the population. Insurers do not understand that mid and mid-low segments of the population have other characteristics and require other types of health plans and suppliers. They are used to selling an elite product, at high costs and high premiums. However, these solutions are constantly losing market share. We have been advancing in this dialogue but we still have much work to do to make companies understand the need for more private-sector penetration. We have already worked with GNP, Banorte and Seguros Atlas.
Consorcio Mexicano de Hospitales is a group of 38 small and medium-sized hospitals distributed across 22 states. Together, the hospitals have 1,200 beds, 6,000 doctors and care for 125,000 patients
PREVENTION KEY TO A HEALTHIER POPULATION
ERIC HAGSATER Vice President of FunSalud
Q: What are FunSalud’s main objectives?
A: One of our major priorities is preventive care. Our health system is primarily focused on curing people who are sick or already showing symptoms of a health problem. Healthier lifestyles and early detection of health risks can help prevent many diseases. Three months ago, the Lancet journal released an article stating that the greatest cause of disease today is bad eating habits, even more than tobacco, alcohol or accidents. Conditions related to our diet, such as overweight, diabetes and high blood pressure, are health problems that have become increasingly common. If we do not stop this through preventive measures, we are not going to have enough resources to treat patients in the future.
Genomics is another area where we see major opportunities. There is a great deal of technology out there, but it is dispersed and there is a lack of cooperation between different institutions and companies. We should come to an agreement so that the information we gather can be interpreted and used by all.
We are also working to establish alliances to boost healthcare and prevention, one of which is with the Ministry of Agriculture. Healthy practices cannot thrive when vegetables and other healthy products are not affordable for the consumer. Right now, the cheapest products tend to be carbohydrates, which incentivizes an unhealthy diet.
Q: What steps have you taken to promote preventive care?
A: FunSalud has established an agreement with CCE to improve employees’ eating habits and promote physical exercise. Exercise does not necessarily mean jogging or going to the gym, it can also be walking 10,000 steps or simply using the stairway instead of the elevator. These are simple opportunities that can make people healthier. Even in companies with hundreds to thousands of employees,
The Mexican Health Foundation (FunSalud) contributes to scientific and technological innovation in the health sector through lobbying for public policies, research promotion and development of human resources strategies for companies
improvements can be easily implemented. In Aguascalientes, we worked with a company with 600 employees to increase its vegetable offering during lunchtime by 30 percent. A hundred employees also decided to voluntarily accept more limited portions. On average, participants lost 5kg and some even lost 30kg. All of them told us how much their life had improved, from interactions with their children to enjoyment at work. Instead of companies seeing this as a cost, they should see it as an investment to a healthier and more productive workforce.
Q: What role can the government play in pushing companies to introduce health incentives?
A: The government has expressed interest in promoting preventive care. However, the public system is too disorganized and seems primarily interested in simply spending money to gain votes. I believe we can push this topic among companies without the need for external incentives from the government.
Numbers show good health is vital for productivity. AMIIF conducted an analysis of Guanajuato’s automotive industry and found that absenteeism had led to an average 2 percent loss in productivity. Additionally, findings showed a further 7 percent loss due to people showing up for work in an unhealthy state. Some companies, like PEMEX, have implemented economic incentives to promote weight loss among their employees, but I do not think salary incentives are enough to foster a change in culture. That is only achieved through positive word of mouth among employees.
Q: What is the best way for companies to implement health prevention strategies?
A: To properly assess employee health, a company should have an in-house doctor or at least an infirmary. Fundación Carlos Slim developed a methodology that allows companies to detect a person’s main health issues through a few simple questions and tests. The foundation trained over 90,000 people in the use of these methods and thanks to new technologies, these can be implemented at a low cost. Genetics, for example, indicate an employee’s predisposition to certain diseases. This information can then be addressed by health professionals to provide help.
PRODUCTION STRENGTH KEY TO ENSURE HEALTH
VIVIANA LINARES
Excecutive Director of the Mexican Pharmaceutical Council (CFM)
Q: What will be CFM's role in President López Obrador’s plan for the pharmaceutical sector?
A: The industry has grown at a significant rate of 6.9 percent between 2017 and 2018. Overall, we see a solid outlook. Mexican laboratories have understood the needs of both doctors and patients, continuously adapting their production to changing demand. The market is still diversifying, growing in number of actors and products. Pharmaceutical players are an important driver for quality employment, generating more than 86,000 jobs and CFM associates account for over 12 percent of the total employment in the sector.
It is going to take some time to understand the intentions and implications of President López Obrador’s policies. However, the health of the population and demand for particular treatments depend on a greater context. All the decisions taken in this industry are based on a long-term vision ranging from five to 20 years. The change in the federal government is simply an extra ingredient in the mix.
Q: What is your view on the government’s intention to strengthen universal healthcare?
A: Ideally, we should live in a society where health is a common service and treatments are readily available. If the most vulnerable segments of the population can have access to free quality healthcare, that would be utopia by any government’s standards. Although we focus mostly on the private market, we do our part in paving the road toward universal healthcare. The government has signaled it wants more transparency in the sector and our associates have responded by showing what their production is and what their sales are. Our objective remains to introduce quality and fairly priced medications to the private market. Ultimately, this is geared toward the long-term ideal of increasing Mexico’s pharmaceutical production capacity. Prioritizing its national industry can help a country secure its population’s health. Although many countries do not meet the necessary criteria to achieve this, Mexico does, thanks to the size of its population, its qualified workforce and innovative industry.
Q: Last year you said increasing access to APIs was a way to increase access to medication. Is this true also for Mexico?
A: APIs are a challenge because of their high dependence on economies of scale. Without a certain level of production, it is almost impossible to compete with more experienced countries where there is large production of these substances. Over the years, India, China and South Korea have implemented large-scale investments to become international players in this sector. There are individual API producers in Mexico, but they have to be selective about what products they make.
At CFM, we try to establish communication between industry authorities and research centers to align production goals and to overcome obstacles in substances procurement. The industry needs commonly agreed purchasing mechanisms so laboratories can have the confidence to invest. Nonetheless, in Mexico there are very clear examples of strong products. We have innovated in vaccines, which has led to interesting developments with potentially big impact. The only limitation is that the government is the only buyer. There are also many biosimilars, which have adapted to patients’ needs and grown in production. Lastly, the country has produced significant innovations in medical technology. These developments have attracted attention and have incentivized exports to other Latin American countries, as well as the US and the EU.
Q: What other goals does CFM have for 2019?
A: First, we think doctors need to regain recognition as crucial agents in the population’s health. With so much information available on the internet, many patients have mistakenly taken the decision to self-medicate, which is very risky. Particularly when it comes to specialized medication, doctors have the right knowledge. People should go back to the dynamic of consulting a doctor and following their prescription. Our second goal is to further strengthen COFEPRIS. This is essential to provide laboratories with certainty in terms of regulations and to maintain standards of quality in the industry.
Mexican Pharmaceutical Council was created in the late 1990s. Its goal is to promote innovation in health sciences and to strengthen the competitiveness of the pharmaceutical industry in the country
Hospital Christus Murgueza, Monterrey, Nuevo Leon
HOSPITALS & CARE PROVIDERS
Hospitals, clinics and other health providers are the main points of contact with patients. Each of these players' mission is to tend to the health of Mexicans, has a value proposition geared toward a specific socioeconomic sector. In a scenario where the patient’s well-being is the main concern, hospitals, clinics and care providers are prepared to innovate and stand out in a highly competitive market. Demand for accessible services, state-of-the-art technology and a constant battle with price and cost-efficiency are some of the main challenges that care providers face. Patients, on the other hand, must contend with a saturated public health service and a limited offering for those without health insurance.
The Hospital and Care Providers chapter analyzes how care institutions, providers and doctors are evolving to address patients’ needs, maximizing resources, creating much-needed cost-efficiencies and improving access to healthcare.
CHAPTER 2: HOSPITALS & CARE PROVIDERS
26 INFOGRAPHIC: Hospitals and Care Providers
28 VIEW FROM THE TOP: Filiberto Álvarez, Centro Médico Dalinde
29 VIEW FROM THE TOP: Juan Galindo, Christus Muguerza
30 PROJECT SPOTLIGHT: Wellmedic Health Centers: Medical Tourism Connecting Mexico’s Specialists to the World
32 VIEW FROM THE TOP: Rafael Caso, Ginequito
33 VIEW FROM THE TOP: Alejandro Gil, Centro Médico Puerta de Hierro
34 VIEW FROM THE TOP: Isaac Ochoa, Clinimed Medical Group
35 VIEW FROM THE TOP: Fernando Santiago, MAG Medical Group
36 INSIGHT: Fausto García, Hospital María José Roma
37 VIEW FROM THE TOP: Gustavo Fernández De Loyola, Grupo Torre Médica
38 VIEW FROM THE TOP: Alfredo Medina, Hospital Regional de Alta Especialidad de la Península de Yucatán
39 VIEW FROM THE TOP: Sven Boes, TecSalud
40 PROJECT SPOTLIGHT: MAG Medical Group: Access to Healthcare Through Technology, Personalized Attention
42 VIEW FROM THE TOP: Patricio González, Hospitaria
43 VIEW FROM THE TOP: David Kershenobich, INCMNSZ
44 VIEW FROM THE TOP: Luis Alberto Navarrete, Clínica de Mérida
45 VIEW FROM THE TOP: Miguel Castillo, Hospital Sedna
46 INSIGHT: Julieta Domínguez, Hospital DioMed
47 INSIGHT: Ricardo Cabello, HMG Hospital
48 VIEW FROM THE TOP: Joaquín Prieto, Hospital Multimédica Norte
49 INSIGHT: Francisco de Urioste, Sanatorio Durango
Note: The concentration and number of hospitals and clinics may vary depending on the source. This map was elaborated by crosschecking data from different sources.
14 Mexican hospitals have robotic surgery programs; 7 are public hospitals and 7 are private
•
• 4,000 robotic surgeries have been
• The country has 15 active da Vinci surgical systems
STRENGTH IN THE FACE OF ADVERSITY
FILIBERTO ÁLVAREZ
Medical Director of Centro Médico Dalinde
Q: How has the Centro Médico Dalinde hospital evolved and what is your area of specialization?
A: Centro Médico Dalinde is a third-level specialty hospital. Our most important areas of specialization are traumatology and orthopedics, although we also have cardiovascular surgery and a very large area of geriatrics. In January 2014, the hospital celebrated the inauguration of its maternity and pediatrics wing, which greatly increased our capabilities. We developed several maternity packages for deliveries and C-sections that also include different payment plans. In 2013, we assisted around 50 births per month. This number rose to 230 before September 2017 but after the earthquake on Sept. 19 we had to reduce our number of maternity beds to strengthen other specialties. We now assist 110 births per month.
Q: What is the hospital’s investment strategy and what role does it play in increasing the facility’s competitiveness?
A: Centro Médico Dalinde invests significantly in imaging and every three to five years we update our equipment to the latest generation. The center recently invested in a new 3T magnetic resonance imaging scanner to replace our older equipment We also have positron-emission tomography (PET) equipment, which is used primarily to detect cancer. The earthquake on Sept. 19, 2017, damaged the infrastructure of our imaging wing and we are now reinforcing the buildings before introducing new equipment. Once reinforced, we will introduce more equipment, including digital mammography equipment.
Q: What is your client profile and how are you working to expand your patient base?
A: We have two major client groups: out-of-pocket patients and users with an insurance plan. Eighty-three percent of our patients belong to the latter group and the rest pay out
Centro Médico Dalinde was founded in 1946 and serves over 15,000 people per year. It is certified by the General Health Council and ISO 9001-2015. Its medical units include cardiology, imaging, intensive care, surgery, gynecology and hemodialysis
of pocket. We also provide geriatrics services because we treat pensioners from different banks: Banamex, Bancomer, HSBC and Santander. At the moment, we cannot increase the number of patients we receive due to our limited infrastructure resulting from the earthquake damage but we are remodeling and expanding. The hospital is also building another unit with 35 beds, which we hope will be finished in two years.
Our first building turned 73 years old in 2019. Patients prefer us because we treat them humanely. We are among the top private hospitals for occupancy, commonly surpassing 80 percent. We have a total of 60 beds in two buildings and medical attention is divided in three functional areas: ambulatory procedures, emergencies and hospitalizations.
Q: What must government organizations do to increase access to healthcare?
A: The government needs to be more involved in the creation of academic programs at public universities that address the needs of the healthcare sector. It is also necessary to unify curriculums among all universities. About 20,000 doctors graduate every year from Mexico’s many medical schools. However, these schools only have room to train 8,000 medical specialists, leaving a large number of general practitioners without the possibility of specializing in any area. As a result, the 12,000 doctors who did not become specialists often have to find employment in other sectors.
Almost 85 percent of morbidities can be classified as “first level” of attention, another 12 percent as “second level” of attention and the remaining 3 percent as “third-level.” The first level of attention, provided most commonly by IMSS and ISSSTE clinics, does not receive the necessary consideration from the government and has failed to generate positions for doctors. The solution would be for the 12,000 graduates without a specialty to be fully trained as general medical practitioners so they can provide care to the 85 percent of patients in primary care.
SOCIAL PROGRAM BRINGS HEALTHCARE TO THE ENTIRE POPULATION
JUAN GALINDO
Medical Director of Christus
Muguerza
Q: What are Christus Muguerza’s strategies to reach as many people as possible?
A: We are looking to grow our presence in other parts of the country. At the moment, we are very interested in Merida, a growing hub for health. A new hospital there would serve not just the Yucatan region but people from the whole southeast. This makes it an attractive location. Another part of our plan is to continue investing in smaller clinics for more remote and marginalized communities. Clinics of this kind are rapidly growing around the country but often without a comprehensive or well-thought out plan. We can assist them in building a sound infrastructure so they can thrive.
Q: Can you tell us more about your work with foundations to provide surgery to patients without resources?
A: We believe in the idea that the more you give, the more you receive. Therefore, as part of our social responsibility program, we have several campaigns in which we work with nonprofit foundations. Generally, the foundation will come to us with a proposal and we provide the facilities and medical team. We are the only private healthcare provider in Mexico with a partnership with Operation Smile, an American charitable organization focused entirely on cleft/ lip palate operations.
Over the course of our five-year collaboration, we have operated on more than 800 children for free. With the support of the International Children’s Heart Foundation, we are also part of a campaign called Bombeando Milagros, through which we have provided surgery to less privileged children who have been diagnosed with heart problems.
At our clinics in Chihuahua, we operate on kids with spine problems and have worked with a renowned gynecologist to provide surgery to women with a range of issues associated with childbirth. We also offer services in several areas to underprivileged patients, foregoing an upfront payment. Instead, we assess their economic situation and come up with a financial agreement that makes the medical intervention possible.
Q: What are Christus Muguerza’s priorities in terms of research and innovation?
A: At our headquarters in Monterrey, we have a center for excellence and innovation that falls under a separate entity within our company called Christus Health. This center’s focus is on healthcare services that can be provided outside the hospital, like diagnostics and monitoring. This goes together with the opening of our first ambulatory clinic in Monterrey in July 2019.
Last year, together with Skye Group, University of Monterrey and local tech partners, this center participated in the launch of a new initiative called Polaris HealthTech. The initiative looks to foster startups in the region that provide innovative solutions for important health problems.
Q: How has your work on an electronic patient database advanced?
A: We have an electronic patient file system from Philips, which has revolutionized the way we work. This platform has allowed us to codify all patient information into a clear system, pulling together a patient’s different conditions to create a panorama of their health situation. At the same time, it considers the costs of our hospital operations. This results in fewer errors and smoother cooperation between different teams. Ultimately, it will also help us to read the health industry better because we can more easily analyze data.
At the moment, the system is only available at our hospital in Saltillo but we intend to replicate the idea at each of our hospitals over the next three to five years. Although we are still working with commercial partners to install the system, we hope that eventually we can run everything in-house and continuously adapt it to our needs.
Christus Muguerza started operations in the city of Monterrey in 1934 and later joined the CHRISTUS Health system in 2001. The group has 11 hospitals, 4 ambulatory clinics and 14 outpatient medical centers as well as four social assistance clinics
WELLMEDIC HEALTH CENTERS: MEDICAL TOURISM CONNECTING MEXICO’S SPECIALISTS TO THE WORLD
Wellmedic Health Centers is a pioneering co-working and networking platform for doctors. Its innovative and disruptive model is revolutionizing the health industry in Mexico, offering a complete empowerment platform for health and wellness practitioners that provides instruments and alternatives to physicians, psychologists, rehabilitators, nutritionists and dentists. The platform fosters their exponential growth as entrepreneurs in the health industry.
Wellmedic Health Centers started operations in Monterrey, Nuevo Leon in 2016 with its first health center and today it has three units located in the most important areas of the state. In the next five years, Wellmedic Health Centers wants to have 30 locations across the country. Its fourth center is going to be inaugurated in Merida, Yucatan by the end of 2019.
Wellmedic Health Centers’ growth will be supported by firstcontact units called Wellmedic CONNECT, located in strategic regions throughout the country. These telemedicine offices will help the company to promote the construction of Mexico’s biggest network of specialists, who can use Wellmedic Health Centers’ facilities wherever the company is present, including the new, international health cluster in Ciudad Mayakoba in Quintana Roo. This project will be the first medical tourism cluster in the Riviera Maya. It will include a medical building with operating and recovery rooms, a hotel for patient recovery and a health market to offer wellness services for the general public and tourists.
CONTINUOUS EDUCATION, CLINICAL BEST PRACTICES IMPROVE HEALTHCARE
RAFAEL CASO
Medical Director of Ginequito
Q: How does Ginequito ensure its services provide integral medical care for women and newborns?
A: As a general hospital, Ginequito offers the finest medical attention by complying with quality policies through continuous revision of medical procedures. The hospital is constantly modernizing according to the trends transforming the industry, including humanized childbirth. It is essential to provide an atmosphere of warmth, safety and quality from attention to infrastructure.
Ginequito also follows a teaching-hospital model and has established important partnerships with universities and the public sector. We are presently working with the University of Monterrey (UDEM) and government-led hospitals on a training program that will provide physicians with continuous improvement. One of the best examples of how Ginequito combines training and best practices to enhance quality was the creation of a manual devoted to training doctors, gynecologists and obstetricians.
Q: What makes Ginequito stand out from other hospitals in the northeast?
A: Ginequito has over 43 years of experience. The hospital began with a group of gynecologists who over the years have created an integral model of women’s healthcare. The hospital offers specialist services that cover the well-being of women at different stages of their lives, from youth, through the reproductive stage and pregnancy, to old age. Ginequito even offers sub-specialty fields, such as gynecological oncology, and works with institutions like the Human Conception Study Institute, which was the first fertility center in southern Mexico.
Q: How does Ginequito participate in lowering maternal and infant mortality rates?
A: Despite being among the states with highest growth rates in the health sector, Nuevo Leon also has a high maternal
Ginequito provides health services in northeastern Mexico and specializes in medical care for women and their families in gynecology, pediatrics, orthopedics and traumatology, otorhinolaryngology, plastic surgery and laparoscopy
and infant mortality rate. This is also a common problem nationwide. However, gyneco-obstetric practices and other areas related to maternal and child health have improved over the years. Ginequito is part of a public-private initiative to promote best practices related to maternal and child health. As a women’s health hospital, it is our responsibility and mission to encourage protocols that foster the adoption of best care practices in Nuevo Leon and Mexico in general.
Health is not only the responsibility of hospitals. We think collaboration among other companies, institutes, insurers, universities and organizations is essential to create maternal and child health expertise. Insurers, for example, are helping us to understand how to make our services more efficient and accessible. The better communication between the parties, the greater the likelihood of success with procedures, which results in better patient care and a cost-effective performance for the insurer and the hospital.
Q: How can telemedicine help provide remote gynecological care?
A: Technology is increasingly important to improve both access and quality in healthcare. Regarding maternal and child health, Ginequito is in the process of developing a digital program that can be used via a mobile device to improve the education of our doctors and other health professionals. We are going to start our pilot tests with topics related to pre-eclampsia and we hope we can expand it to other issues in the future.
Q: What are Ginequito’s growth and development expectations?
A: In the medium term, Ginequito would like to increase the penetration of its services. It is vital to implement strategies that improve medical practices and that also keep the hospital at the forefront of innovation in the field. We want to create an environment where mother and child feel safe. Another important challenge is how to grow our installed capacity to support Monterrey and other nearby cities. Ginequito will continue being a point of reference not only for general and specialized attention in the mother and child area, but also in subspecialties that are seeing increasing demand.
MAYO CLINIC ALLIANCE HELPS SET NEW BAR FOR TREATMENT STANDARDS
ALEJANDRO GIL
CEO
of Centro
Médico Puerta de Hierro
Q: What is your specialization and how does it provide an added value to your business?
A: Over the past 15 years,, we have developed five hospitals. One has become a major center for ambulatory surgery. We introduced this model to Mexico from the US and adapted it to the local market. The other four hospitals focus on five specializations that require hospitalization and major surgeries: neuro, cardio, orthopedic, ophthalmology and transplants. In the private sector, we are nationwide transplant leaders, completing 115 successful kidney transplants per year. The group is developing a network to manage transplants between hospitals, which entails procuring and distributing the organs to where they are needed. This has allowed us to transplant multiple organs from the same donor into patients at different hospitals. This year, we also secured an alliance with the Mayo Clinic in the US, making us the only hospital group in Mexico to have this credential. This will help us raise our treatment standards to the highest international levels.
Q: What is the main challenge facing the transplant segment in Mexico, where the number of patients in need of a transplant has increased sharply?
A: The principal obstacle is cultural. Certain perceptions inhibit individuals and families of potential donors from donating their organs. It is important to educate people and raise awareness about what they can do.
Another issue is having the capability to transport the organ fast enough. This means having good coordination within and between hospitals. What often happens is that the organ is delayed at the originating hospital due to administrative and legal procedures. You can facilitate communication in such a way that these procedures are processed faster. Internally, for example, we have dedicated a great deal of time in developing a team of doctors specifically for transplants. Every hospital has a team for liver transplants, for instance. There is a specific team for a specific organ in each hospital. Our alliance with the Mayo Clinic will allow us to share our mutual experiences and improve further in this field.
Q: Only 40 organizations globally are allied with the Mayo Clinic. How did you receive this accreditation and what does it mean for the group?
A: The accreditation process took 14 months. This involved an intense evaluation and audit of our entire operations. Certain key components were essential: the focus on providing high-quality care to patients; the competitivity of our specializations; and our role in furthering research and education. Additionally, we are one of the only two hospitals that offer a seat on our board to the medical faculty at Tecnológico de Monterrey. The cooperation with Tecnológico de Monterrey involves hiring alumni and maintaining a department for study and research.
The alliance with the Mayo Clinic will allow us to share clinical protocols and experiences between doctors. The Mayo Clinic treats over 5 million patients a year and it has access to immense amounts of information. Being able to combine our knowledge and experience will make treatment opportunities infinitely richer. The main benefit is for the patient; they will be able to access a Mayo Clinic expert for a second opinion at no cost.
Q: What does your association with the Mayo Clinic mean in terms of medical tourism?
A: Several of our hospitals are in places that have large foreigner and expat communities. People from the US and Canada will recognize our relationship with the Mayo Clinic as a guarantee for quality at a clinical and service level. We are also thinking of offering treatment and services to the Latin community residing in the US. People from this community often have family living here and may acquire any necessary medications or treatments in Mexico. There is an opportunity to create compatibility there.
Centro Médico Puerta de Hierro is a recognized medical institution in the western region of the country. It has 5 hospital units and its standards are recognized by the General Health Council, the Ministry of Tourism and Ministry of Health
INTERNATIONALIZATION OFFERS QUALITY BOOST
ISAAC OCHOA Founder and Chairman of Clinimed Medical Group
Q: What is Clinimed Medical Group’s role in the promotion of medical tourism?
A: We want to offer a quality service for foreigners already in the country. Helping patients feel comfortable and providing them with communication in their native tongue is a key element of this process. Our staff is multilingual and capable of responding to any urgent and primary care situation in seven languages. Beyond that, our goal is to be a medical concierge for our patients, regardless of their nationality. Our doctors specialize in urgent response and can provide patients with the right treatment without them having to come to the clinic if there is no need.
Q: What makes Clinimed Medical Group the go-to option, not only for foreigners but for all patients?
A: Our business model is based on three pillars: compassion and empathy, state-of-the-art technology and financial sustainability. We are a 100 percent Mexican company with an international mindset and we strive to offer a personalized
Clinimed Medical Group is an outpatient clinic focused on medical consultation and minimal invasion procedures for urgent and primary care. Its facilities include clinical laboratories, CT scanner, ultrasound, X-ray and a rehabilitation center
service. We understand that no one wants to be at a clinic, especially in a different country, so our goal is to understand how we can best help patients be on their way. Each patient is assigned one specialized doctor and three nurses, as well as a butler for their family. Despite being a primary care clinic, we also have an epidemiology unit that generates statistics and studies based on the information we collect. This provides us with a strict epidemiological surveillance that allows us to deal with changes in the population’s needs, while working in public policies with the government and international agencies.
We continuously invest in our personnel so patients know they will receive quality care from our doctors and nurses, who also speak their language. We work directly with 60 international insurers and we are trained to work with all companies from any country, allowing us to be a true international clinic in Mexico City. Our end goal is to offer quality medical services for clients, especially in remote areas of the country where there might not be immediate access to a hospital or clinic. We have established partnerships with over 1,000 companies and with the government of Mexico City for its school accident program, treating approximately 50 kids monthly. We also collaborate with several international and nonprofit organizations on different projects.
NORTHERN MEXICO CITY HOSPITAL SPREADS ITS WINGS
FERNANDO SANTIAGO Director General of MAG Medical Group
Q: How does MAG Medical Group improve access to healthcare while maintaining success as a business?
A: MAG Medical Group is 5 years old. The hospital specializes in general surgery, orthopedics and neurology but we still offer many other level 3 specialties and we continue to provide emergency treatment. MAG Medical Group is spearheading a new medical model in Mexico City. There is a large gap between those with private insurance and those who are affiliated with the public sector and do not have access to specialized care. We have perfected a way to provide this latter segment of the population with a level 3 hospital that is not excessively expensive. We have also worked with insurers to offer more attractive policies. Our goal is to reach 3 percent of that population.
Q: What added value will MAG Medical Group’s new wing provide?
A: The new wing will significantly change the way we operate, as it will allow us to increase our capacity and the services we offer. MAG Medical Group has 20 patient rooms and three surgery rooms. The new wing will allow us to offer over 83 beds in total, eight surgery rooms, one hemodynamic room, 50 patient rooms, 15 cradles, 11 recovery rooms, six emergency cubicles and a shock room, five adult intensivecare rooms and six neonatal intensive care rooms. The new wing will also have an imaging unit that will provide X-rays, ultrasound, tomography and resonance. We hope the new wing will consolidate the hospital and allow us to open more facilities in the country. Some of our doctors were wary that prices would increase with the construction of the new wing but our goal is to generate a mix of high and medium-priced services. We want our doctors to see MAG Medical Group as a reference of quality and not price.
Q: How is MAG Medical Group working with federal authorities to improve access to care?
A: MAG Medical Group participates in several forums with the authorities of the State of Mexico to address health regulation. We have agreements with public institutions to address blood supply and the transfer of patients. After the change in federal administration, we aim to continue working alongside public institutions to provide
relief for their hospitals and to reduce the number of postponed surgeries.
We are also part of the Medical Tourism Cluster of Mexico City, whose objective is to make it a priority for the federal government to develop a national program that attracts foreigners seeking affordable medical attention.
Mexico City has several disadvantages related to medical tourism versus beach destinations but the city is one of the most important capitals in the world. An appropriate strategy that attracts foreigners and reduces the perception of insecurity in the city will allow medical tourism to prosper. We want Mexico City to be the most important destination for medical tourism in Mexico, since the city has first-class doctors and the highest hospital capacity in the country.
Q: What alliances are necessary to ensure MAG Medical Group’s sustainable growth?
A: We are working with Mexico’s largest insurers, including GNP, AXA, Seguros Monterrey, Seguros Banorte and Seguros Mapfre. About 70 percent of the patients MAG Medical Group receives are recommended by insurers. We offer insurers low reference prices that guarantee a return on investment. We are working with insurers who are betting on our middle-income population model. We are also building alliances with laboratories and national suppliers to develop joint strategies that will allow us to open the new wing as soon as possible.
Q: What can other hospitals learn from MAG Medical Group?
A: That it is possible to provide healthcare services at affordable prices without neglecting quality and to generate policies that benefit all players in the healthcare sector, including patients, doctors, brokers, hospitals and insurers.
MAG Medical Group is a hospital in Mexico City with capabilities for cardiology, plastic surgery, endocrinology and gynecology, among many other areas. The hospital also offers laboratory services, including X-rays, clinical analysis and ultrasound
NEW HEALTH MODEL BASED ON COLLABORATION
FAUSTO GARCÍA
Director General of Hospital María José Roma
Mexico’s epidemiological challenges and aging population are surpassing hospital infrastructure, gradually increasing the strain on health and social security systems, according to Fausto García, Director General of Hospital María José Roma. “Our country is no exception,” he says. “Greater life expectancy and a decrease in fertility will prompt the emergence of chronic-degenerative diseases and other conditions.”
The UN’s World Population Prospects Report says the elderly population globally grew at a 1.5 percent annual rate until 2015. By 2050, the rate will be around 3.4 percent. Data from the National Commission for the Retirement Savings System (CONSAR) shows there is a similar trend in Mexico. Until 2015, the population aged 60 and over grew by more than 1.7 percent and for 2050, the rate will be close to 5.6 percent.
Under such conditions, high out-of-pocket health spending and a growing population living in poverty conditions will have an impact on the growth of the health sector. García says around 20 percent of Hospital María José Roma’s patients come from insurance partnerships with MetLife, AXA, Banorte, BX+ and Seguros Monterrey. The remaining 80 percent comes from out-of-pocket patients. “It is very difficult to grow in these conditions because hospitals must increase employee salaries while maintaining stable prices, or risk impacting patients without the liquidity to afford them,” he says. “Increasing prices would cause the hospital to stagnate.”
García believes the hospital’s development strategy provides greater opportunity to generate revenue before requiring price increases. “Providing more services will attract more clients,” he says. The hospital recently added hemodynamics, hemodialysis and topographies to its portfolio and its goal is to ramp up operations by boosting investment in state-of-theart technology and highly qualified professionals.
LOGISTICS METHODOLOGY REACHES HEALTHCARE
GUSTAVO FERNÁNDEZ DE LOYOLA
Former CEO of Grupo Torre Médica
Q: What results have you achieved in your plan to expand to 10 hospitals and 20 clinics following the hub-andspoke model?
A: In 2018, we focused on growing the capabilities of our existing facilities. Our offer grew from 35 to 63 beds in our two hospitals and we are in the process of opening our sixth clinic in Mexico City, which will double our patient capacity. We hope to begin with our expansion process beyond Mexico City in the second half of 2019.
In Mexico City, we specialize in traumatology. Annually, we see over 100,000 patients, from those in simple accidents to patients requiring intensive care. We continue growing our patient capacity following our hub-and-spoke model. We have changed the way we relate to our clients and have established associations with insurance companies to create different products to help patients. Rather than fostering a traditional model where we charge insurance companies when patients get to the hospital, we are creating joint programs to manage patient populations and lower risk collaboratively. We want to share with insurers the benefits of this strategy and also participate in the sale of insurance products. Hospital and insurance companies tend to have an antagonistic relationship, so our goal is to change that and become allies.
Q: What role do new technologies, changes in user preferences and increasing medical expenses have in your strategy to meet patients’ demands?
A: Patients are sometimes more informed about the different treatment options available. This is good, however, because it forces hospitals and doctors to update their offering constantly, including new treatments, technologies and therapeutic techniques. High costs, on the other hand, remain a complication for patients who do not have the resources to access new technologies.
Q: What does Grupo Torre Médica do to counter these complications?
A: Our hub-and-spoke model allows us to perform lesscomplicated procedures in clinics, where costs are lower and attention is faster than in a hospital. Having said that, we have improved our hospital system to treat patients faster, while
maintaining our low-cost advantage. A low-cost, high-quality model will be essential to address any health issues in Mexico in the future. That is the next growth barrier for hospital groups and where Grupo Torre Médica wants to participate.
Q: What do you think hospitals and healthcare will be like in 20 to 30 years?
A: I think we will evolve in two ways. First, we will predict much sooner when a patient will need attention or will suffer from complications. Predictive technology will have a major impact in Mexico in the next 20 years. Second, once patients have a problem, technology will substitute medical and nursing staff. A machine will be able to diagnose many problems with greater precision than a doctor, as well as run blood tests and imaging studies and correlate them with 10,000 similar cases from patients in other parts of the world. Doctors will probably not be substituted in the surgery room but when it comes to metabolic issues, a machine will have more information to make a reliable diagnosis. However, it will take time before Mexico adopts these technologies.
Q: What are the main factors impeding the development of skilled professionals in areas like nursing or radiology?
A: Women are increasingly participating in other professions and becoming a nurse is not that attractive anymore. Since there are fewer people studying to become nurses, we have to provide incentives to attract more people to the profession. Once they graduate, we have to pay them well and offer them incentives to grow in their field.
Regarding doctors, there are some specialties that are in greater demand than others. At the same time, students are more attracted to certain areas than to others. There is an opportunity to offer positions to doctors of all specialties but it is difficult to convince them to move to cities with 300,000 inhabitants.
Grupo Torre Médica is among the most important hospital groups in Mexico City, with two hospitals and six clinics, and sixth in the entire country. It offers healthcare services under the hub-and-spoke model
UNIVERSAL HEALTHCARE EVEN AT HIGHLY SPECIALIZED LEVELS
ALFREDO MEDINA
Director General of Hospital Regional de Alta Especialidad de la Península de Yucatán (HRAEPY)
Q: How has HRAEPY’s mission evolved since its conception?
A: Our hospital’s primary mission is to meet the medical needs of people who are vulnerable, socially and economically. This mandate was established in a presidential decree 15 years ago. Our hospital is now celebrating its 11th anniversary and we follow three main lines of action. First, our goal is to make medical treatments accessible to the entire population of the Yucatan peninsula, covering Yucatan, Campeche and Quintana Roo. We offer more than 40 medical specializations. Our teams consist of doctors, nurses, paramedics and technicians. Second, we want to build a strong health workforce in the area. This means creating an educational space for professionals in medical specializations and imbuing them with the values of our institution. Our third line of action is medical and scientific research conducted by researchers at our institution to develop our own clinical studies.
Q: How do you define a population that is economically and socially vulnerable and how do you help them?
A: In practical terms, 90 percent of our patients do not have access to social security. Through Seguro Popular’s resources, we can provide them with healthcare. They can also be referred to us through other institutions. We work with six socioeconomic categories and schemes of payment. One of them is zero, which means that the patient is exempt from payment. Categories two and three require limited fees that keep cost at a minimum so they do not become a significant financial burden for patients.
Our hospital is working toward universalization of medical services. This means we want to make healthcare as accessible as possible. One way to do this is through interinstitutional agreements, where we exchange medical services between institutions. Bigger players like IMSS and ISSSTE have signed agreements with us to treat patients through coordinated collaboration.
Hospital Regional de Alta Especialidad de la Península de Yucatán (HRAEPY) is a public hospital based in Merida. Its primary mission is to provide specialized treatments and tertiary care to people with a vulnerable social and economic background
Our hospital focuses on tertiary care, which tends to be more demanding in terms of resources. Through our cooperation with bodies like Seguro Popular, which will soon transform into Instituto Nacional de Salud para el Bienestar (National Health Institute for Welfare), we can offer this expensive care to patients with few economic resources. However, we must continue looking for ways to be efficient in providing care to patients from all segments of the population. This will become especially relevant now that the Mexican population is aging and chronic degenerative conditions are becoming more common.
Q: What would you say are the main health challenges of the Yucatan peninsula and how do you deal with these?
A: Our country’s epidemiological map is diverse. Diseases vary because of different altitudes, climate and cultural factors. Here on the peninsula, we have a high prevalence of kidney stone disease. This is the No. 1 condition in our hospital in terms of medical attention and surgeries and if it is not treated on time, it can cause irreversible renal damage and chronic kidney failure. Should patients get to this point, this can lead to other necessities, such as a renal transplant. Our urological department is experienced in the treatment of prostate cancer, another major cause of death in the country. Our hospital has a thorough program in oncology and cardiology and we aim for cardiac surgeries to be minimally invasive. We also treat a wide range of chronic degenerative diseases that have a strong connection to lifestyle, nutrition and education.
Q: How does HRAEPY collaborate in the training of medical professionals?
A: We support five medical residencies and three more of high specialization. Resident doctors learn from teachers and experts and the programs are also open to doctors who wish to acquire new skills or relearn particular aspects but are not necessarily in the process of obtaining their specialization. Our focus is to provide an integral approach to health. We have a special center where we simulate all kinds of health procedures and surgeries. Here, doctors have the space to build the necessary experience to become excellent professionals who trust their own skills. We are the only regional hospital with this kind of center.
UNIVERSITY ALLIANCES STRENGTHEN MEXICAN HEALTHCARE
SVEN BOES CEO of Hospitals TecSalud
Q: What differentiates TecSalud’s model from other hospitals and care providers in Mexico?
A: One of our main differentiators is that we are the only academic medical center based in Mexico. This gives us both the privilege and responsibility to transform healthcare through research, innovative teaching methods and the best clinical practice.
Q: What is TecSalud’s capacity and what strategic alliances has it created to continue growing?
A: With more than 220 beds in our two teaching hospitals and 1,500 physicians, TecSalud attended more than 70,000 patients in 2018. TecSalud has a diverse range of partnerships with the goal of transforming the health system as a whole. An example of this is the international alliance with Houston Methodist Hospital, which has helped us to adopt international practices. In Mexico, TecSalud has partnered with Hospital ABC in Mexico City, Hospital Puerta de Hierro in Guadalajara, Hospital CIMA in Chihuahua, the National Institute of Medical Science and Nutrition Salvador Zubirán, the National Institute of Cardiology Ignacio Chavez and the National Institute of Oncology in Mexico City. For our graduate and medical residency programs, we have partnered with private and public hospitals creating a multicenter rotation of students and residents in the city of Monterrey. Our medical school has partnered with various prestigious institutions in North and South America, such as Pontifical Catholic University of Chile and Johns Hopkins Medicine International. In addition, we are working closely with the largest insurance companies, medical suppliers and pharmaceutical companies in Mexico creating a new values-based practice for patients.
Q: What difference does it make for your partners to work with a hospital backed up by Tecnológico de Monterrey?
A: In Mexico, there are other healthcare providers that are doing extraordinary work but TecSalud’s advantage is the capability to combine our clinical staff with faculty and researchers from our medical school. With our main hospitals in the city of Monterrey and the presence of our medical school in other cities, such as Guadalajara and Mexico City, TecSalud is making an important impact on the lives of patients throughout Mexico. Being part
of Tecnológico de Monterrey is a plus for every partner because they can see the impact our university and graduates have on our country and around the world. Given that we are a not for profit organization, we can concentrate on patient care and safety without having to think of economic factors.
Q: What research areas is TecSalud prioritizing?
A: At the TecSalud Research Department, we are moving from traditional basic and clinical research into more innovative and international medical research. We have seven strategic research groups. Those groups combine academic and clinical researchers and are supported by our doctoral, master and undergraduate students, not just from our medical school and health sciences, but also by students from the School of Engineering and the EGADE Business School. These strategic research groups work on innovative therapies and visual sciences, bioengineering and regenerative medicine, cancer research, cardiovascular and metabolomic medicine, bioinformatics for clinical diagnostics, human genetics, and metabolic diseases.
Q: How can TecSalud’s research groups help reduce Mexico’s disease burden?
A: The topics on which our strategic research groups have been working on are the main chronic conditions that affect the Mexican population, such as heart disease, obesity, diabetes and cancer, among others. Our researchers work through alliances with other universities and institutions in Mexico and other divisions within Tecnológico de Monterrey researching new ways to impact risk factors of disease that include social, economic and even environmental aspects. We think that partnering with those who are working on the same lines of research and not duplicating efforts but complementing them, is the best way to develop concepts that can reduce the disease burden on the Mexican population.
Tecnológico de Monterrey Health System (TecSalud) is a growing medical academic center that integrates teaching, research and clinical services. It has two teaching hospitals in the city of Monterrey and three Medical Schools
MAG MEDICAL GROUP: ACCESS TO HEALTHCARE THROUGH TECHNOLOGY, PERSONALIZED ATTENTION
Since its creation in 2013, MAG Medical Group’s (MAG Medical) offering has been based on the provision of quality services for personalized and patient-centered care. Today, as part of its growth and expansion strategy, the company is increasing its installed capacity.
MAG Medical believes the provision of hospital services should have quality and technology as priorities. That is why the company is introducing high-technology at a low cost in its solutions. This has allowed it to quickly penetrate the market and become a benchmark in low-cost health services, which has made insurers feel confident to work with the company.
MAG Medical is strongly committed to investing in technology in the different areas of the hospital, which allows its medical community to have the best diagnosis and facilitate the provision of excellent medical care. MAG Medical is also focused on strengthening its participation in medical tourism, by having trained, bilingual staff and adequate facilities.
MAG Medical specializes in general surgery, orthopedics, gastroenterology, bariatrics, plastic surgery, neurology and obstetrics-gynecology
One of MAG Medical's main concerns regarding its expansion project is how to grow its installed capacity without compromising its personalized service. However, the company considers its strategy is well-structured and the quality of its services will continue to position the hospital as a key player in the northern part of Mexico City. The hospital specializes in general surgery, orthopedics, gastroenterology, bariatrics, plastic surgery, neurology and obstetrics-gynecology.
By December 2019, MAG Medical’s new facilities will include six emergency cubicles and a crash room, 50 rooms (Jr. suites and standard), a short-stay unit, seven operating rooms, 11 recovery rooms, two endoscopy rooms, a hemodynamics room, a laboratory, a blood bank, magnetic resonance equipment, a CT scanner, X-rays, ultrasound equipment and a hemodialysis clinic. The hospital will also provide additional services such as valet and free parking, an auditorium, a cafeteria, a chapel and offices for doctors.
GROWTH FOCUSED ON PATIENTS, TREATMENT QUALITY
PATRICIO
GONZÁLEZ
Director General of Hospitaria
Q: How has Hospitaria advanced in obtaining its ISO certification and improving its imaging capabilities?
A: We have been working on a unique quality model to comply with ISO standards. Most hospitals tend to follow the General Health Council model and do not focus on ISO matters. In our case, more than obtaining the ISO certification, we are interested in implementing the organization’s methodology. We have already mapped out all the hospital’s processes. It was a really big challenge but it allowed us to have knowledge and control of all operations, following a standard methodology. This also means the hospital cannot implement different processes for existing procedures, unless they are for a new service or involve a completely new task. This focus on processes complements nicely the General Health Council’s approach, since it puts patient safety at the forefront. The General Health Council has international best practices but ISO incorporates more, forcing us to adopt them and go beyond the standard.
Regarding the hospital’s imaging capabilities, we have improved our CT scan and resonance capabilities. We acquired a 1.5T MRI scanner that offers really good clarity. Our CT scanner was replaced by a 128-slice model, which puts us among the clinics with the best CT scan capabilities in the country. The 128-slice CT scanner offers top-notch quality, good imaging, less radiation and is effective for making a diagnosis. Doctors have noticed the improvement and they have started recommending Hospitaria to more patients.
Hospitaria opened its doors in 2012 in the northern area of Nuevo Leon. It has 50 beds, five operating rooms, an adult intensive-care unit, an intensive care unit, endoscopy, pediatrics and neonatal areas
RESEARCH THE BASIS OF PREVENTION, PROPER HEALTHCARE
DAVID KERSHENOBICH Director General of INCMNSZ
Q: How has the Integral Attention Center for Diabetes Patients (CAIPaDi) impacted the incidence of diabetes in Mexico?
A: As part of INCMNSZ, CAIPaDi provides comprehensive care with the help of various specialists in ophthalmology, psychology, orthodontics and many other areas. The center is also focused on newly diagnosed patients, meaning those who have been diagnosed with diabetes mellitus within the last five years. Over time, complications derived from diabetes increase and make treatments difficult, which is why it is more effective to target patients at early stages.
CAIPaDi’s focus is on adherence to treatment through a preventive and therapeutic approach. The center does not only treat diabetes but tries to prevent further complications. To help with this objective, INCMNSZ opened a Metabolic Disease Research Unit (UIEM) to generate knowledge on the pathophysiology of diabetes mellitus. The unit conducts research projects at CAIPaDi regarding the most important conditions related to diabetes. Both UIEM and CAIPaDi work together as a clinical and metabolic research unit that links prevention, diagnosis and treatment of diabetes mellitus.
Q: What kind of partners supported the creation of UIEM?
A: UIEM wants to be recognized as a center of innovation and academic excellence in the study of metabolic disorders. INCMNSZ has several collaborators and academic partners but Tecnológico de Monterrey, in particular, collaborated in the creation of this new unit. Other universities, such as UNAM, have also joined the project due to its focus on research. INCMNSZ’s relationship with the best universities in the country is proof of the institution’s commitment to healthcare, education and research on metabolic diseases.
Q: How important is the Research Support Network in INCMNSZ’s research studies?
A: The Research Support Network gathers different specialists and researchers from the INCMNSZ in the areas of bioinformatics, biostatistics, computational biology, molecular biology, genomics, flow cytometry and metabolomics, among others, to support the institute in developing highly specialized studies on physiopathology issues, such as metabolomics and genomic studies to find alleles of susceptibility in the Mexican
population. The Research Support Network is the third axis, together with INCMNSZ and UIEM, in the development of cutting-edge research in relation to diabetes mellitus and its complications. All three create the necessary conditions for professionals from the biomedical and academic fields to interact and offer solutions in the diagnosis, prevention and treatment of diseases.
Q: What is INCMNSZ’s approach to treating chronic degenerative diseases through genomics and nutrition?
A: Nutrition and genomics are key factors for the prevention of chronic degenerative diseases, such as diabetes. INCMNSZ works on identifying genes related to diabetes susceptibility and the metabolic-molecular conditions that can prevent contraction of the disease. Our approach combines genetics, nutrition and micronutrient studies to clarify all issues related to diabetes. The institute also performs metabolomics studies to know which genes establish a metabolic precondition to diabetes to look for new ways of treating patients. There are other diseases and conditions with a genetic or epigenetic component, such as fatty liver and bacterial resistance. INCMNSZ compares these to diabetes to determine if there is a difference in how different some people react genetically to the disease compared to others.
Q: What genetic particularities impact the Mexican population’s propensity to develop nontransferable diseases?
A: The human genome is divided according to ethnicities and Mexico is a mixture of Amerindian, Asia-Pacific and European gene variations. This combination leads to greater or lesser susceptibility to the development of certain diseases. Similarly, the possibility of harming the liver and other organs is different for each ethnicity. If other factors are added to these genetic conditions, such as food and pollution, there is greater understanding on the population’s susceptibility to certain diseases.
The National Institute of Medical Sciences and Nutrition Salvador Zubirán (INCMNSZ) is one of the Ministry of Health’s National Institutes of Health. It provides tertiary-level medical care to adults and specializes in nutrition and internal medicine
A HEALTHY POPULATION MEANS A STRONGER ECONOMY
LUIS ALBERTO NAVARRETE Director General of Clínica de Mérida
Q: How does Clínica de Mérida work to continuously improve its health services?
A: Clínica de Mérida’s goal is to maintain the infrastructure and resources to provide high-quality medical attention with the best services. We base our work on professional competence, opportune medical attention, patient safety and dignified treatment. In terms of professional competence, our clinical and administrative teams are constantly updating their capabilities and knowledge. Clínica de Mérida continuously looks for a way to improve wait times and other areas of medical attention.
We consider patient safety key to our operations. Although, there is a certain degree of risk inherent in each step of the healthcare process and adverse events may occur due to clinical practices, products, procedures or the system itself, we carry out strict evaluations to make sure every visitor enters a safe environment. Lastly, we understand that a humane approach provides the highest value in treatment. We strive to treat our patients and other visitors with dignity, respect and consideration.
Q: What are your clinical priorities?
A: Our utmost priority is providing opportune attention and efficacy in patient treatment. This is supported by the constant acquisition and modernization of our medical equipment. Often, we will introduce equipment that is the first of its kind in the southeast region of the country. Regarding our clinical priorities, we offer 36 specializations and eight sub-specializations. The most common morbidities at our hospital are pneumonia and conditions that require surgery, be it general, ophthalmological, aesthetic, orthopedic, otolaryngologic or urological.
Q: Where do your patients come from and how are you growing the hospital’s reach?
A: Our patients primarily come from Yucatan, Campeche and Quintana Roo and in lesser numbers from other states or countries, such as the US and Belize. To provide more services and increase access to healthcare, we have opened centers for medical attention and branches for laboratory services at key locations in the city. We also provide discounts for tests and studies and we disseminate information through social media like Facebook and Twitter and through flyers, radio and television.
Q: What mechanisms or incentives are required to stimulate collaboration between the public and private sectors to increase access to healthcare?
A: The challenges for health institutions in Mexico are related to globalization, demographic increases, economic and political changes, the lifestyle of the population and technological developments. To improve the national health system, it is important to strive for equal access to healthcare services for all segments of the population. When the population is healthier, we will see better economic performance and a better home life. The health system reform in Mexico is a continuous process that should be focused on meeting our current needs.
Q: What are your three main objectives for 2019?
A: We want to grow our infrastructure and equipment to respond to market demands. Secondly, we should successfully adopt communication systems like INTRANET and electronic clinical records. Lastly, we want to keep our certifications, more specifically, Distintivo H, ISO 9001:2015 and that of the General Health Council. We also want to renew our Distintivo M certification and obtain a Clean Energy Certificate.
areas of Mexico and abroad
We also want to expand our network of specialists, so they can respond to new diseases and conditions. The clinic is also aiming to be accredited as a teaching hospital for resident doctors and nurses. Regarding our laboratories, we want to be certified in NMX-EC-15189-IMNC-2015 for quality and competence and obtain a certification from the College of American Pathologists. In the future, we also want to offer hydrotherapy and build a heliport at the hospital.
Clínica de Mérida is a key private hospital in the Yucatan Peninsula. The hospital offers 36 specializations and eight sub-specializations. It treats patients from the peninsula, other
SPECIALIZATION DRIVES DIFFERENTIATION
MIGUEL CASTILLO
Director General of Hospital Sedna
Q: How have Hospital Sedna’s operations improved now that the hospital offers more specialty services to patients?
A: We are consolidating as an integral hospital focused on high specialization. We have developed a well-established transplant program with an interesting price scheme, which we call Fair Price, to increase accessibility to these procedures. We just performed our second kidney transplant under the Fair Price scheme.
We are also growing in the neurosurgery area and in the next couple of years we want to focus more on cardiovascular conditions. We have already developed a work plan that includes the creation of a room for hemodynamic monitoring, a coronary care unit within our intensive care unit and an advanced cardio-pulmonary diagnostic clinic. We are also about to open our blood bank.
Q: What is the hospital doing to address the advance of chronic degenerative diseases?
A: We continue growing our base of specialists and subspecialists. The hospital staffs a total of 185 doctors, with most between 35 to 40 years of age and with a strong practical background. This helps because they have incorporated much of the new technology and medical advances. We are also renovating our facilities. Although the hospital is only 12 years old, there are areas that require renovation. We revamped all our surgery rooms in early 2019 and we are renewing our entire intensive care unit. We are expanding our facilities to attend more people with chronic degenerative conditions.
We are also working on issues related to diagnosis and prevention. In Mexico, we need to start focusing more on prevention. We already have renewal plans for our diagnostic equipment. We expect to start with these changes in 2020, beginning with our mammography equipment, MRI scanner and other equipment currently in use.
Q: How can health service providers better serve chronic degenerative disease patients?
A: Communication regarding prevention is important; we need to create a culture of prevention. Mexicans tend to wait until they have critical medical issues to look for
attention. The public sector has done a good job in the developing prevention campaigns. There have also been some advances in legislation regarding food with high sugar and fat levels. But there needs to be a joint effort with the private sector.
As a hospital, we are just one link in the chain. This all goes along with the company’s commitment to have fair prices in laboratory and imaging to make it easier for people to start generating this prevention culture. Insurance companies can also play an important role, since payments related to chronic-degenerative diseases also impacts them. Inasmuch as they promote prevention programs among their clients, they will reduce their costs while helping their clients have a healthier life.
Q: How could homecare transform the hospital and clinical market?
A: In the future, hospitals will be focused solely on acute pathologies; primary attention will happen elsewhere. Moreover, if there are prevention and diagnostic areas within the hospital, they will work independently from the hospital. We expect this change will be boosted by the use of technology and devices such as wearables. Today, you can know if you are getting enough sleep hours or whether your heart rate is within the normal parameters. In fact, doctors can remotely monitor a patient’s heartbeat or sugar levels. In the future, this will be even more common. Such changes will generate a great deal of savings for people in general because they will no longer need to go to a laboratory and pay for certain tests. Devices will generate this data and doctors will be able to tell patients where there is an anomaly. I expect big diagnostic companies will migrate toward a type of coexistence with wearables so self-diagnosis becomes more economical and faster without leaving medical expertise aside.
Hospital Sedna is a private hospital based in Mexico City. Its services include emergency, intensive therapy, neonatology, ambulatory surgery, endoscopic surgery, imaging, clinical analysis laboratory and hemodialysis
PRIVATE HOSPITALS CAN DO MUCH MORE TO HELP THE PUBLIC SECTOR
“There is great demand in the public sector for particular operations and not enough doctors or facilities”
JULIETA DOMÍNGUEZ, Director General of Hospital DioMed
The private sector can still step in to target some deficiencies in public healthcare, says Julieta Domínguez, Director General of Hospital DioMed. “Private hospitals close at night and do not have full occupancy,” she says. “Stronger integration between both sectors could significantly benefit both sides.”
Despite being categorized as a smaller health institution, Hospital DioMed has been able to provide high-quality surgeries to a diverse range of clients through a more flexible financial model. About 40 percent of clients pay out of pocket, 35 percent are insured and 25 percent of patients are covered by donations from foundations. Domínguez explains that the hospital’s goal is to find a payment solution together with the patient. Part of this strategy is to negotiate with insurers over packages and prices, and to develop workable solutions for people without the resources to access the private health system. “There is great demand in the public sector for particular operations and not enough doctors or facilities. Hospital DioMed could take some of that volume in exchange for sensible costs agreed with the government,” she says. Outsourcing these operations to private parties could end up saving public resources, but so far these kinds of agreements have met resistance.
Among the reasons why Hospital DioMed is able to provide specific treatments is precisely because it is a smaller hospital. This allows it to run at a lower cost and target particular areas. The hospital maintains a 24-hour schedule and uses an app platform called Blue Code to coordinate emergency surgeries. “Blue Code allows the team to track each step in a patient’s journey and ensure everything is ready for surgery when they arrive to the hospital,” says Domínguez. Recently, the hospital started sharing this app service with other small hospitals and providing training in its use, a strategy that she says could also benefit the public sector.
HEALTH SECTOR MUST OPEN TO MORE HOLISTIC APPROACH
RICARDO
CABELLO Director General of HMG Hospital
To combat future challenges, health institutions must be more open and seek collaboration both within their field and out, according to Ricardo Cabello, Director of HMG Hospital. “Medicine can benefit from knowledge from other fields, too,” he says.
Seeking a broader approach to attack health problems has many advantages. Ultimately, the goal is to meet people’s needs, says Cabello. These needs are broader than pure health complications and they derive from a multitude of factors, making a holistic approach necessary to introduce the knowledge of professionals from various institutions and specializations. “This bundles expertise and resources, leading to a more effective and efficient strategy,” says Cabello.
HMG Hospital manages its holistic approach in different ways. The hospital has space for up to 150 consultations at a time. However, about 1,400 doctors have the credentials to work at HMG Hospital, which means the facilities are open to a much wider group of professionals who are not necessarily based there. “This requires flexibility but also increases the value the hospital has to offer,” says Cabello.
HMG Hospital has a strong reputation in neurological surgery, particularly in the area of epilepsy. This expertise is showcased and shared at an annual event that takes place at the institution with delegates from the US, Europe and the rest of Latin America. Although this kind of international interaction is not unique, it is an example of collaboration that can strengthen healthcare on a bigger scale, according to Cabello. The hospital has recently established a collaboration with Humanitas University, as well. Through this joint venture, HMG Hospital will build a second building that will expedite consultations and ease patient overnight stays, while creating a space for students to complete their residencies.
Cabello highlights that less hierarchical and clustered work could also lead to a more integral approach in healthcare. HMG Hospital has attempted to move away from a pyramid structure to a more horizontal collaboration. This means the
staff does not limit themselves to their own roles but partake in a wider range of responsibilities. “Patients may receive their medication from the doctor who performed their surgery, which leads to more flexible and faster treatment. Most activities are managed through an electronic platform that combines different types of information, including data from the patient and the hospital alike,” he says.
Eliminating the strictness of traditional hospital rules can be taken a step further by inviting professionals from other non-medical fields to contribute to providing better healthcare, Cabello says. Collaboration of nonmedical parties extends to the government and private companies, such as tech startups, educational institutions and people from all kinds of backgrounds. Improvement of healthcare processes can even be achieved through the involvement of relatives in the healthcare process, particularly at home. “With new less-invasive surgeries, patients are likely to spend less time at the hospital and more time at home recovering. Using state-of-the-art monitoring techniques to maintain communication with the doctor allows those around the patient to take on bigger responsibilities,” he says.
Technology itself is proving disruptive in healthcare and it will eventually change the infrastructure and role of hospitals. However, new methods including a better ability to bundle data and analyze health problems will only increase the effectiveness of dealing with health issues, as well as maintain quality levels at a more affordable price, according to Cabello.
As chronic disease become more prevalent and Mexico’s population starts to age, the burden on healthcare services and providers will only get bigger. Cabello stresses that limiting the number of staff to what is absolutely necessary and increasing the flexibility of their roles is vital. “Evolution cannot be achieved without being open to new technological advances and more input from those outside the medical field,” he says. “Combining different disciplines to tackle major problems is a trend that is gaining momentum worldwide.”
AFFORDABLE CARE PIQUES INSURER INTEREST
JOAQUÍN PRIETO
Director General of Hospital Multimédica Norte
Q: What are Hospital Multimédica Norte’s main capabilities?
A: Hospital Multimédica Norte, located in Tlanepantla de Baz, State of Mexico, turned 22 years old in October 2018. It began operations with three beds and grew according to the needs of the area. Between 2017 and 2018, the hospital expanded rapidly from 16 beds to 40 beds, and it now has a medical tower with 40 consultation rooms and more than 60 doctors who provided an average of 30,000 medical consultations in 2018 covering many medical specialties, including gynecology, obstetrics, oncology, traumatology, dermatology, internal medicine and neurology.
Hospital Multimédica Norte also has three intensive therapy units and hosts new medical services such as the International Heart Center, which provides different medical studies including clinical cardiology, electrocardiograms, 24 and 48-hour Holter monitoring and heart rehabilitation. Our facility is certified by the General Health Council and has a blood bank, clinical laboratory, ambulances, physical therapy and rehabilitation services.
Q: What were the reasons behind the hospital’s sudden growth in 2017 and 2018?
A: Demand for medical services grew sharply in the northwest of the metropolitan area, including the Atizapan de Zaragoza, Cuautitlan Izcalli, Azcapotzalco and Gustavo A. Madero municipalities, as a growing number of people demand better medical services that incorporate more technology, particularly in specialties such as internal medicine, pediatrics, surgery and gynecology. We operate in an area with few hospitals and we have the infrastructure and technology to cater to this demand given that most care providers in the region are small clinics.
Hospital Multimédica Norte will turn 23 years old in October 2019. It has over 60 doctors covering 35 specialties. The hospital also has a clinical laboratory, an emergency room and three surgery rooms
Q: What are the hospital’s investment priorities regarding technology to provide specialized services in the area?
A: In early 2019, the hospital invested in the acquisition of a 64-slice tomography machine used for difficult and highly specialized cardiology and oncology diagnostics. We also have hemodynamic equipment – unique to the area – used mainly with stroke patients, which has demonstrated highly positive results. This machine is used to treat problems related to acute myocardial infarction and for angiology studies.
We plan to continue investing in the acquisition of new equipment mainly for our surgery rooms, including equipment for anesthesia, monitors and operating tables. The hospital has three surgery rooms and a delivery room. These are constantly modernized according to patient needs.
Q: What alliances does the hospital have with insurers and what benefits do these partnerships bring?
A: The hospital used to focus mainly on uninsured individuals, which represented 60 percent of our patients, but many insurance companies approached us as we grew. Now we operate with almost all insurers, including Alliance, AXA Seguros, MetLife, Zurich, Mapfre and GNP Seguros. Between 60-70 percent of the patients we receive come from an insurance company. At this point, we are not working with public institutions and our alliances with insurers consist mainly of collective policies for corporate employees.
We work in a market niche that allows us to provide competitive prices for both patients and insurance companies. Until recently, insurance companies easily accepted expenses from major hospitals in the area but they have started to heavily curtail this overhead. As a result, insurers have turned to us as we are one of the few larger hospitals in the area that can provide them the service they need at affordable prices. Our goal is to provide high-quality hospital services at good prices, which we can do both for uninsured patients and insurance companies.
BATTLING C-SECTION EPIDEMIC THROUGH HUMANIZATION
FRANCISCO DE URIOSTE
Medical Director of Sanatorio Durango
Although humanized childbirth is widely recommended by the WHO, not all hospitals or countries have adopted this philosophy. Cesarean sections are more than a common practice in Mexico, even when unnecessary, due to a lack of proper communication from hospitals and the practices of insurers, according to Francisco De Urioste, Medical Director of Sanatorio Durango. “Insurers normally do not cover natural childbirth, only cesarean sections,” he says. “To guarantee coverage, parents simply choose the latter.”
According to WHO, the cesarean phenomenon affects several countries in Latin America and the Caribbean. In fact, six of the 10 countries with the highest cesarean rates in the world are in this region. Data from the Ministry of Health show that at a national level, 45 out of every 100 births are performed by C-section. De Urioste adds that in most hospitals, 80 percent of all child deliveries are C-sections. Sanatorio Durango takes a different approach. “At our hospital, only 20 percent of the childbirths we assist are through caesarean section; 80 percent are natural births.”
Sanatorio Durango opened its doors to the public 75 years ago. Even though the hospital has sought to grow its patient numbers by entering therapeutic areas like cardiology, pediatrics and oncology and has become specialized in areas that include coronary, endoscopy and cardiovascular physiology, its focus remains gynecology and childbirth.
At its start, the sanatorium participated on tenders to provide health services to companies with a large worker base. Over time, conditions in the health sector allowed the hospital to collaborate with private clients through insurers. Sanatorio Durango used to have access to banks, such as Bancomer and Banco del Atlántico, as well as government institutions like the National Lottery. Market conditions changed, however. Today, Sanatorio Durango works with the vast majority of insurers in the country, serves the Metro workforce and is considered the top private hospital in the city for humanized childbirth.
Humanized patient treatment is at the core of Sanatorio Durango’s value proposition, in addition to providing quality service with proper medical infrastructure at affordable prices, De Urioste says. “We try to make the patient feel comfortable and safe at all times with a humanized approach to healthcare and childbirth. We have become a national icon for humanized childbirth and waterbirth.”
The WHO says there are approximately 140 million childbirths per year globally. The moment of birth is a critical time for the survival of women and babies and Sanatorio Durango recognizes there are necessary elements that can guarantee a humanized treatment before, during and after the child is delivered.
“Only 20 percent of the childbirths we assist are through caesarean section; 80 percent are natural births”
“A humanized birth is not defined by the moment the baby is born; it must include creating a healthy and safe environment for both the baby and the mother before and after the delivery,” says De Urioste. “This means giving birth in a clinically and psychologically safe environment that minimizes risk factors at the beginning and during labor.”
Sanatorio Durango’s goal is to decrease the high incidence of deliveries by cesarean section in Mexico through education regarding humanized childbirth. The hospital seeks to promote a positive experience during childbirth and to keep couples informed as a fundamental part of its humanized treatment. “At Sanatorio Durango, childbirth focuses on the humane treatment of women and avoids making women feel or be seen as a complement to childbirth clinical practices,” says De Urioste. “We hope this approach will persuade more women to choose natural labor.”
RESEARCH & INNOVATION
Research remains the fertile soil where Big Pharma companies plant the molecules that will become the medicines of tomorrow. R&D is the mechanism that guarantees the competitiveness of innovative pharmaceutical companies, although it continues to be a decades-long, multibillion-dollar bet with a small chance of a big payout. However, when the bet is successful, returns can reach tens of billions of dollars, making the sector an attractive investment for those who have long-term investment power. Mexico is already a key player in pharmaceutical manufacturing and exports, yet it remains a challenge to get innovative medicines into the hands of the local population. Despite solid regulations, well-trained researchers and a diverse and appealing population, very little clinical research is done in the country.
This chapter will analyze the opportunities and challenges for clinical research and innovative drug development. It will also highlight market opportunities for innovative medicines in a country that is increasingly leaning toward generics.
CHAPTER 3: RESEARCH & INNOVATION
54 ANALYSIS: As R&D Costs Increase, the Industry Must Find Innovative Ways to Bring Them Down
56 INFOGRAPHIC: Patent Expirations Loom Over Big Pharma
58 VIEW FROM THE TOP: Rodrigo Puga, Pfizer Mexico
59 VIEW FROM THE TOP: Ana Longoria, Novartis
61 VIEW FROM THE TOP: Andrés Bruzual, Roche Pharmaceuticals Mexico
62 VIEW FROM THE TOP: Alejandro Martín, Mayoly Spindler México and LATAM
63 VIEW FROM THE TOP: Marco Ruggiero, Chiesi México
64 COMPANY SPOTLIGHT: IGSA Medical: Challenging the Status Quo in Healthcare
66 VIEW FROM THE TOP: David López, BioMarin Pharmaceuticals
67 VIEW FROM THE TOP: Sonia Pérez, UDIBI
69 VIEW FROM THE TOP: Américo García, Apopharma
70 TECHNOLOGY SPOTLIGHT: Chiesi: Less Invasive Tech Defeats Old Enemy
72 VIEW FROM THE TOP: Javier Amtmann, Menarini
73 VIEW FROM THE TOP: Aude Boclé, Biocodex
74 VIEW FROM THE TOP: Mauricio Mendieta, Gedeon Richter México
75 VIEW FROM THE TOP: Vincenzo D’Elia, Laboratorios Alfasigma
76 TECHNOLOGY SPOTLIGHT: LEI: The Future of Medicine in Advanced Therapies
AS R&D COSTS INCREASE, THE INDUSTRY MUST FIND INNOVATIVE WAYS TO BRING THEM DOWN
R&D investment in life sciences continues unabated, leading to record-level pipelines for new medications. However, smaller returns on investment in R&D and a wave of patent expirations may dampen the steady growth of the global pharmaceutical industry
The stage is set to break records for innovative medications. In 2019, pharmaceutical pipelines across the globe included 16,181 new molecules undergoing preclinical or clinical trials or in the approval and launch process. The number of small companies with only one or two molecules in the pipeline is growing but the bulk of pharmaceutical investment in R&D has been done by Big Pharma, with the 10 largest investors placing almost US$80 billion into research. Worldwide pharmaceutical and biotech R&D spending reached US$171 billion in 2018 and it is expected to climb to US$177 billion in 2019, according to Deloitte. While not all molecules in the pipeline will make it to the market, this is the largest pipeline in the history of the sector.
2018 was also a record-breaking year in the number of FDA approvals, with 59 new molecular entities approved during the year. Of these, 64 percent consisted of small molecules and the rest biotechnological products. Highlights of the year’s approvals include Onpattro from Alnyam Pharmaceutical, the first drug to act by RNA interference, and Luxturna by Spark Therapeutics, the first in vivo gene therapy that treats a specific genetic disorder to cure a specific kind of blindness.
About 56 percent of the approved medications target rare diseases, a significant leap from 2017’s 39 percent. As rare diseases affect a small segment of the population they had been mainly overlooked by the pharmaceutical industry, which targeted blockbuster drugs for large patient populations that would result in significant revenues. The trend has shifted thanks to regulatory changes in the US, which hosts 48 percent of companies that perform pharmaceutical R&D, according to Pharmaprojects. The changes provided incentives to companies that invest in the development of orphan drugs. As a result, more orphan drugs are expected to enter the market, with 4,615 molecules in the pipeline at various stages of development.
PERSONALIZED MEDICINE
Another growing trend in the sector is the shift toward personalized or precision medicine, which are medicines tailored to the needs of individual patients. “Personalized medicine aims to bring the correct therapy to the correct selected population. Based on their genetic characteristics,
a therapy with greater success probabilities for this specific population is chosen. This allows a more efficient treatment for the diseases they are facing,” says Andrés Bruzual, General Manager of Roche Pharmaceuticals Mexico.
Continuous discoveries in the fields of genomics, proteomics and related fields have helped fuel medicinal personalization along with the growing number of wearable devices and the penetration of Big Data technologies that allow the constant collection of large amounts of information that can measure the impact of a treatment in real time. While there are still great strides to be made before tailoring a medicine to the specific genome of a patient, the sector is advancing its capabilities to target specific genetic mutations. While most are in clinical or preclinical stages, they are gradually making their way to the market. Personalized medicine is expected to represent US$87.7 billion by 2023, according to Deloitte.
While the potential to treat diseases that do not have a cure is attractive, personalization also represents a common challenge for both patients and the pharmaceutical industry: cost. IQVIA states that biotherapeutics can set a patient back more than US$100,000 per treatment. Moreover, due to their high specialization, there are very few target patients. Once a patient is cured, there is no continued flow of revenue for the manufacturer.
TOP 10 PHARMACEUTICAL COMPANIES BY REVENUE
Note: The listed revenue does not include revenue from other divisions within the company.
Source: FierceBiotech.
HIGHER COSTS
While the pipeline for new molecules is at a record high and pharmaceutical investment continues strong, returns on R&D investment keep shrinking for Big Pharma due to a significant increase in development costs. In 2010, the drug development process cost about US$1.17 billion from the development of the medication to its launch to market. By 2018, this cost more than doubled to US$2.8 billion on average per every new treatment, according to Deloitte. The consulting firm states the higher cost of pharmaceutical development has contributed to the shrinkage of returns on investment for new products. While in 2010 a company could expect a 10.1 percent return on investment for a new molecule, by 2018 this number had decreased to 1.9 percent.
The pharmaceutical sector is also facing a looming threat in the shape of patent expiration. This is a constant threat for the pharmaceutical sector as the end of patent protections leads to the introduction of less expensive generics. IQVIA estimates that patent expirations will cost Big Pharma US$121 billion between 2019 and 2023. The cure to this problem, however, seems clear. “The only way to address the challenge from generics is through innovation,” says Vincenzo D’Elia, General Manager of Laboratorios Alfasigma. “When a company constantly develops new products with a differentiated value, it will find a more effective way to compete in the market.”
Innovation is not limited to the lab. Pharmaceutical companies are increasingly investing in alternatives that streamline research efforts, including, but not limited to, artificial intelligence, automation and machine learning. Big Pharma is also acquiring innovation through M&As. This process allows large pharmaceutical companies to avoid the costs of early stage R&D, which also has a high rate of failure, and to bet only on promising products developed by smaller companies. Unlike these smaller companies, once it has identified an interesting target, Big Pharma can finance the large investment
required to perform clinical trials, get the medicine approved by regulators, create marketing campaigns and distribute it. The largest announced acquisition in the first half of 2019 was Bristol-Myers Squibb’s plan to buy Celgene for US$74 billion.
BARRIERS TO INNOVATION
Once a new drug is approved, there is still a long way for it to access the market especially in emerging economies. “In developed countries, about 10 percent of the population has access to innovative medications. In emerging countries, these are only available to 1 percent of the population,” says Ana Longoria, President and Director General of Novartis Mexico. To enter the Mexican market, every drug requires COFEPRIS’s approval but this is only enough to be available in the private sector. Mexico’s public healthcare network provides care to 61 million of the country’s 129 million habitants and is the largest buyer of medications and medical supplies in the country.
For an innovative medication, being available in the public sector is nothing short of an odyssey. After gaining COFEPRIS’ seal of approval, a medication must be approved by the General Health Council followed by its addition to the basic list of the intended institution. As the public healthcare system is fragmented, the medication should go through individual approval processes for each different public institution, which include IMSS, ISSSTE, PEMEX, SEDENA, SEMAR and others. However, being part of a public institution’s basic list does not guarantee availability for the general public as 96 percent of medications acquired by the public sector are generics.
US$177 billion: global pharmaceutical R&D investment predicted for 2019
While this is an effective cost-saving measure, it leaves many Mexicans without access to the medications they need. For that reason, pharmaceutical companies are increasingly investing in the development of new market strategies that allow greater access to innovative medicines. “A way to fix this is through innovative access models in which the public sector pays only for results. We are talking with local authorities to introduce these models, which forces us to ensure that the medications we sell benefit the patient,” says Longoria. “This will be increasingly important with the arrival of personalized medicine.”
Through innovation, new medicines may be able to find a welcoming market in Mexico as the country’s rate of chronic diseases related to obesity and aging continues to climb.
“The combination of precision diagnostics and personalized treatment will undoubtedly have a positive impact on Mexico’s most prevalent diseases,” says Bruzual.
PATENT EXPIRATIONS LOOM OVER BIG PHARMA
Innovation is at the core of every pharmaceutical company’s success. With expiration for major blockbusters looming ahead, a strong pipeline of new products is key to sustaining growth. Globally, pharmaceutical and biotech companies spent US$171 billion in R&D in 2018 and are expected to spend US$177 billion during 2019,
according to Deloitte. These investments are necessary as the cost to bring a new medicine to market can run up to US$2.17 billion. The sector will face significant challenges, as patent filings and the introduction of generic alternatives are expected to cost the industry billions during the coming years.
MOLECULES APPROVED BY THE FDA IN 2019 (as of May 23, 2019)
VYNDAQEL
Heart disease (cardiomyopathy)
MAYZENT
Tafamidis Meglumine
Risankizumabrzaa
DRUG NAME
Active ingredient
Approved use
SKYRIZI
Relapse of multiple sclerosis
SUNOSI
Siponimod
BALVERSA
Plaque psoriasis in adults
Advanced or metastatic bladder cancer
EGATEN
Excessive sleepiness in patients with narcolepsy
Fascioliasis (parasitic infestation)
Solriamfetol
AbbVie Humira
Bristol-Myers Squibb and Pfizer Eliquis
Celgene Revlimid
Bristol-Myers Squibb and Ono Pharmaceutical Opdivo MSD Keytruda
Amgen and Pfizer Enbrel Roche Herceptin Avastin Rituxan
Erdafitinib
Triclabendazole
THERAPEUTIC FOCUS OF MEDICINES APPROVED BY THE FDA IN 2018
new molecules were released on average per year between 2013 and 2018
Qbrexza Dermira
Aptivus
Boehringer Ingelheim
CABLIVI
Romosozumabaqqg
EVENITY
Postmenopausal osteoporosis
Acquired thrombotic thrombocytopenic purpura
Caplacizumabyhdp
Lantheus Medcl Fortovase
Hoffmann La Roche
Vivitrol Alkermes
Egrifta
Qsymia Vivus
Denavir Mylan Pharms
Xtoro Merlion Pharms
Gattex Kit Nps Pharms
CHALLENGES FOR BIG PHARMA:
Date
Drug name
Seller
• Patent expirations, which IQVIA estimates will have an impact of US$121 billion due to losses of exclusivity between 2019 and 2023.
• Lower returns from pharmaceutical innovation. Deloitte estimates that returns have fallen to their lowest levels in nine years: from 10.1 percent in 2010 to 1.9 percent in 2018.
Brexanolone JEUVEAU
Postpartum depression
ZULRESSO
MAIN MEDICINE IMPORTERS AND EXPORTERS
Imports to Mexico (retail)
25% US
25% Others
19% Germany
9% France
6% Switzerland
6% Canada
5% Italy
5% Spain
IMPACT OF LOSSES OF EXCLUSIVITY (US$ billion)
PrabotulinumtoxinAxvfs
Temporary improvement in the appearance of glabellar lines
It can cost up to US$2.17 billion to bring a new molecule to market, according to Deloitte
Exports from Mexico (retail)
23% India
23% Others
20% Germany
13% US
10% China
6% Canada
5% Belgium
Global expenditure on medicine reached US$1.2 trillion in 2018 and will surpass US$1.5 trillion by 2023, according to IQVIA
Small molecules Biologics
*Forecast
INVESTMENT NECESSARY TO ACCELERATE ACCESS TO MEDICATIONS
RODRIGO PUGA
President and Country Manager of Pfizer Mexico
Q: How will Pfizer's US$26 million investment at its Toluca plant accelerate the launching of new products in Mexico?
A: We are planning to improve our manufacturing plant to ensure that our products are manufactured using state-ofthe-art technology. Our investment in clinical trials is directly linked to launching new molecules in the market. We have roughly 30 clinical trials in Mexico with approximately 500 patients and we are collaborating with research centers across the globe to generate data to bring these breakthroughs to the market. We are also investing in scientific projects through Instituto Científico Pfizer (Pfizer Scientific Institute).
Pfizer’s new mission is to be able to launch innovative medicines that change patients’ lives at a faster pace. Patients are at the center of everything we do and innovation is our driving force. We do not want medicines that are just a bit different; we want to find breakthroughs that save patients’ lives. Innovation has characterized Pfizer for 170 years.
Q: How is Pfizer adapting its R&D strategy to address existing and future healthcare problems?
A: About 15 percent of Pfizer’s global profit – approximately US$8 billion – is used to fund R&D every year in many therapeutic areas. At this point, we are focusing on those diseases where we can generate significant scientific advances and on those that have been overlooked. We are investing in oncology, inflammation, immunology, new vaccines, rare diseases, antibiotics and cardiovascular diseases. One of our products uses genetic modifications to cure hemophilia type
A and B. We are also developing new antibiotics to combat superbugs. Unchecked, antimicrobial resistance will kill more people than cancer by 2050, at an estimated rate of 10 million lives per year. Our goal is to launch 25 new therapies by 2025.
Q: What role will genetic medicine play in Pfizer’s pipeline and how are you involving local institutions in this research?
Pfizer is one of the largest multinational biopharmaceutical corporations in the world. It is headquartered in New York City and in 2018, ranked 57th on Fortune’s list of the 500 largest US corporations by total revenue
A: Genetic medicine will play a major role in our strategy, as a significant part of our efforts to discover new medications uses and new information about the human genome. Our scientists are modifying genes from patients so their own bodies can fight diseases that have no treatment. Genetic medicine and immunotherapy are becoming increasingly important in pharmaceutical research. The latter has led to the development of immune-oncology, which aims to modify the immune system to fight cancer cells without medication.
In 2018, we established an alliance with INMEGEN to strengthen research on the Mexican genome to develop treatments specifically for the local population. Genetics can change significantly from one area to the next. Our goal is to use this alliance to understand the genome of local populations. For the past 15 years, Pfizer’s Scientific Institute has allied with scientists and institutions to bring basic research to Mexico. We also work with local universities and the National Medicine Academy to recognize the best medical students from all universities.
Q: What are the main access barriers Pfizer has identified in the Mexican market and how are you overcoming them?
A: Since January 2019, the company has been directed by Albert Boula, who is reinforcing our position to put patients at the center and our focus on developing markets to look for ways to make innovative medications more available to patients. We are becoming more creative in developing ways to increase access to healthcare, such as developing innovative payment schemes that will increase access by allowing public institutions to pay for results instead of products.
Mexico has some of the greatest challenges in the region regarding the introduction of innovative medications. For every 100 medications registered in Mexico, only four reach the patients who need them. For instance, we have a product that treats metastatic breast cancer and doubles life expectancy. However, patients in the public system cannot access this medication. Moreover, introducing innovative medicines to public institutions takes around five years. Mexico must recognize the benefits of increasing access to health.
INNOVATIVE PAYMENT MODELS
CAN INCREASE ACCESS TO INNOVATIVE MEDICATIONS
ANA LONGORIA President and Director General of Novartis
Q: How will Novartis’ US$20 million investment in Mexico for 2019 be allocated?
A: At the World Economic Forum, Novartis’ CEO met with Luz María de la Mora, Deputy Minister of Foreign Trade at the Ministry of Economy, and committed US$20 million to Mexico. This sum is part of Novartis’ 2015 commitment to invest US$50 million in the country by 2020. At this point, we have invested over half of that promised amount. We expect to continue investing in the country as the pharmaceutical industry expands thanks to Mexico’s growing population.
The investment will go to clinical research, an area with significant opportunities in Mexico. In 2018, Novartis invested US$3.5 million to perform over 70 clinical trials in several therapeutic areas in Mexico.
Novartis has only five Global Service Centers and we decided to install one in Mexico in 2015 because the country offers an excellent location, is cost-competitive and has many talented professionals. We have high expectations for this center as it continues growing. We now perform several operations here that were previously done in the US and other Latin American countries.
Q: How is Novartis collaborating in the introduction of innovative medicines to the Mexican market?
A: Novartis has one of the strongest pipelines in the industry, which allows us to launch a large number of new products per year. We are increasingly focusing on oncology, mental diseases and cardiology. Recent technological advances are allowing for the discovery of new medications at a faster pace. Mexico’s regulatory system must adapt to the growing number of new medications and we are developing new models to bring innovative medicines closer to the Mexican population.
In developed countries, about 10 percent of the population has access to innovative medications. In emerging countries, these are only available to 1 percent of the population. The pharmaceutical industry has been unable to bring its products closer to those who need them. A way to fix this is through innovative access models in which the public sector
pays only for results. We are talking with local authorities to introduce these models, which forces us to ensure that the medications we sell benefit the patient. This will be increasingly important with the arrival of personalized medicine, which allows laboratories to tailor their products to ensure they are useful for patients.
We have also made significant advances in our transformation area, which focuses on how technologies like AI and social media can better support patients during their journey fighting a disease.
Q: How will Alcon’s spinoff help Novartis strengthen its position in the pharmaceutical industry?
A: Alcon separated from Novartis on April 4, 2019. This will allow Alcon to strengthen its position in the ophthalmic products market and will allow Novartis to strengthen its commitment to certain therapeutic areas. From the division, we kept ophthalmologic medicines. We will focus on our medicine portfolio, as our pipeline has extremely interesting products that will enter the market in the next few years.
Q: How did Novartis help Centers of Excellence to improve treatment of diabetic patients?
A: These centers help health institutions with which we collaborate through the incorporation of best therapeutic practices, from opportune diagnosis to adherence to treatment and support for the patient’s family. Often, institutions have all the necessary tools for a successful treatment plan but they do not know how to build one. In these cases, we help them to use their own tools to create effective protocols for the correct management of diabetic patients. We identified several areas we can improve to make treatment more efficient and give patients what they truly need. We have replicated this model for patients with heart failure and have had great results.
Novartis has multiple research laboratories focused on therapeutic areas, including neuroscience, oncology, respiratory diseases, dermatology and immunology. The company has 10 potential blockbuster launches planned for the next years
BETTER DIAGNOSTIC METHODS HELP BUILD STRONGER PREVENTION PROGRAMS
ANDRÉS BRUZUAL
General Manager of Roche Pharmaceuticals Mexico
Q: How is Roche Pharmaceuticals combining its diagnostics and pharmaceutical divisions to improve the prevention and treatment of diseases?
A: With significant advances in the last few decades, we are now able to detect diseases at an opportune stage and offer more effective treatments. For 70 years, Roche has been developing therapies in areas where treatments did not exist. Our focus has always centered on offering a combination of the most advanced diagnoses and treatments to increase not just chances of survival, but also patients' quality of life.
Q: How is Roche Pharmaceuticals innovating within the Mexican healthcare sector?
A: One of our companies is Foundation Medicine (FMI). This foundation is focused on developing precision medicine. Using advanced diagnostics, we can gather a specific picture of the patient and their condition. This allows us to develop medicine that is highly personalized to their profile. Oncology is an area where this has seen major growth. Using gene characteristics, one can create a therapy which is more likely to have a positive response. Combining these diagnostics with a personalized treatment will undoubtedly lower the burden of the most prevalent disease. Personalized treatment also focuses on improving quality of life and reducing complications.
Q: What specific treatments does Roche Pharmaceuticals offer the market for cancer patients?
A: Our portfolio of therapies contains 14 different medications against cancer and various types of tumors. These medications help treat over 1 million people worldwide every year. We have been innovating in Mexico for over 70 years and this has allowed us to make major advances to tackle chronic-degenerative diseases such as breast, cervical, ovarian, colon and lung cancers, as well as rheumatic arthritis and various other diseases of lower prevalence but major impact, such as hemophilia and multiples sclerosis.
Due to our investment and research, which last year was close to US$11 billion worldwide and around MX$220 million in Mexico, we reached a new goal with the arrival of four new innovative molecules for distinct conditions, including two for the treatment of lung cancer. Part of this
development of new treatments are immunotherapies, which represent a change in the way we treat tumors. Our treatments specifically cater to patients with the mutations PD-L1 and ALK positive.
Q: How can Roche Pharmaceutical’s cancer approach support earlier diagnostics?
A: We have always been at the forefront of medical education. The development of better diagnostics has led us to create programs and educational modules for health professionals. These have aided efforts to prevent and diagnose disease at an early stage. This is particularly the case in the area of cancer, the third cause of death in Mexico. We have different prevention programs directed at both doctors and patients, like Prohibido Rendirse and Respirar y Vivir. We are now launching a campaign that will certify professionals in early detection of breast cancer and reduce the time it takes to refer people to specialists. The promotion of health is a significant component of opportune detection of cancer. Our work with diverse actors allows us to reach different social groups which can be targeted for early detection. The combination between providing information to the population and providing medical education to health professionals is the best way to prevent cancer amongst the Mexican population.
Q: What integral mechanisms need to be implemented to increase access to innovative medications in Mexico and what role will your company play in their generation?
A: At Roche Mexico, we focus on helping the population have access to the best solutions in health and the benefits that a complete and innovative treatment can bring. We think our role should not be limited to developing therapeutic solutions but also commit fully to ensure patients have equal access to diagnosis and treatment. We need to work from our respective position to meet common goals.
Roche Pharmaceuticals is the largest biotech company in the world, specialized in drug development for oncology, immunology, infectious diseases, ophthalmology and neurosciences
PROBIOTIC PIONEER SEES A FUTURE IN GASTROENTEROLOGY
ALEJANDRO MARTÍN
Director General of Mayoly Spindler México and LATAM
Q: How do Mayoly Spindler’s Mexico operations contribute to its global activities?
A: Mayoly Spindler is a French group composed of 30 companies that focus on manufacturing, dermocosmetics and pharmaceuticals. In Mexico, we focus on pharmaceutical operations related to gastroenterology and we work with a distributor for the sale of dermocosmetics. Our Mexico offices manage all our activities in Latin America. In 2019, we will enter Guatemala and launch Probiolog IBS in Colombia, Peru and Ecuador. We are also present in Argentina and the Andean region. Mexico has a large number of adults, to whom most of our products are directed; however, the population’s purchasing power is low. For that reason, in Mexico we focus on volume sales at a lower price, while in France we prioritize price over volume.
Q: How has Mayoly Spindler influenced Mexico’s healthcare sector and practices?
A: We are pioneers in the use of probiotics in Mexico and have the largest probiotic portfolio in the country. Ten years ago, we saw a commercial opportunity here and launched the country’s first probiotic, which was a treatment for diarrhea. Together, our products target 35 percent of the most common gastroenterological diseases. In 2018, we launched a product that treats metabolic syndrome, another for diarrhea and one for constipation.
Q: How would you describe the penetration of probiotics in Mexico?
A: A market study of probiotics that we conducted in Mexico showed that about 30 percent of the population requests a probiotic from their gastroenterologist, especially in cases of irritable bowel syndrome, gastritis and gastroenteritis. Most probiotics in the market focus on diarrhea, so we are targeting other gastroenterological diseases. We are generating a culture of probiotics. A survey conducted
Mayoly Spindler is a French company founded in 1909 with a presence in over 70 countries. Its fields of expertise include pharmaceuticals, dermocosmetics, gastroenterology, contract development and manufacturing
by the National Institute of Medical Science and Nutrition
Salvador Zubirán discovered that many Mexicans take probiotics without any knowledge of what they are for.
Q: How ready are doctors to prescribe probiotics?
A: Probiotics are classified as food supplements, so it was a challenge to get doctors to prescribe them. We conducted a marketing study with Mexican opinion leaders and asked if it was a problem that these products were classified as food supplements. The doctors in the survey were not concerned about labeling as long as the product was backed by scientific evidence. Before launching Iprikene, which treats diarrhea, we visited gastro-pediatricians, of whom there are very few in Mexico, to ask them about their concerns. Today, it is the most prescribed product for diarrhea. Probiolog, a diarrhea treatment that we introduced in Mexico in 2018, is fortified with zinc and meets international standards.
Q: Which new products will Mayorly Spindler introduce to Mexico in the near term and how is the market for gastroenterology products changing?
A: We are also innovating in product packaging by introducing probiotics that do not need to be encapsulated or dissolved in water and can instead be consumed on their own, which increases patient adherence. The Mexican market has slightly decreased by units while increasing in price. The gastrointestinal segment is behaving similarly, although price growth is small. During 2018, we climbed the market rankings by four positions in the gastrointestinal segment in terms of units to 47th place; we rose six positions in value to 54th During the 12 months preceding December 2018, the overall market of gastroenterological products represented 390 billion units, for a total of MX$417.4 billion, of which Mayoly Spindler sold 126 million units.
Due to several economic factors, the only countries to report positive sales in 2018 were France and Mexico, which is Mayoly Spindler’s most profitable market and in which we hold a 10.2 percent share. The company has always grown more than the market for gastroenterological products; for example, between 2017 and 2018 the market grew by 8.4 percent but Mayoly Spindler grew by 22 percent.
FOCUS SHOULD BE ON TOTAL TREATMENT COST NOT DRUG COST
MARCO RUGGIERO
General Manager of Chiesi México
Q: How is the company advancing with its neonatology and respiratory solutions?
A: We closed 2018 with a 25 percent growth, mainly driven by our special neonatology care line CUROSURF. After 15 years, this product still grew at a 17 percent rate in 2018 compared to 2017. This has allowed us to further penetrate the Mexican market and to persuade doctors to use our treatment for premature babies affected by respiratory distress syndrome. This treatment has helped save countless lives and ensured that babies have a chance to have normal lives after their premature birth.
Q: How do you intend to grow beyond your position as the third-largest pharmaceutical player in the respiratory field?
A: Our respiratory line enjoyed rapid growth of 36 percent in 2018. Having launched our first product in Mexico in 2013, we are doing quite well. Yet, there is still a great deal of room for improvement and to strengthen our position compared to larger competitors like GSK and AstraZeneca. We will continue to invest and expand our staff presence in the country.
In the area of neonatology, one major barrier is that our treatment CUROSURF has not been included in IMSS’ medication registry, which is the largest public health insurance institution in the country but still has the very strong conviction that it should buy the cheapest medications. Our treatment may have a higher price but ultimately, because of its greater effectiveness, is actually going to reduce costs across the whole treatment course. Considering only the cost of the medicine is wrong. Treatments should count the number of medicinal packages needed for the duration of the treatment, as well as costs related to the patient’s journey toward improvement. IMSS’ new board should come to the realization that real savings cannot be achieved through procurement but through an integral analysis of the total cost of treatment. Right now, the institute is effectively buying the wrong product and spending more than they should. Unfortunately, there is no indication that there will be a change in direction. As a result, some of the most innovative therapies are still only accessible through private healthcare.
Q: What have been Chiesi’s major successes and challenges in COPD treatments?
A: We have an innovative triple-treatment therapy for COPD, which we launched across the entire American continent, and first in Mexico. This was a major source of pride for us but also for our Mexican partners in hospitals and clinics. One of the main issues related to COPD is the lack of awareness about the disease, which often results in misdiagnosis. Doctors continue to prescribe dated singleagent drugs that can provide relief during the moment of crisis but that do not address the inflammatory chronic nature of the disease. In other cases, patients are given antibiotics, which are completely unsuitable. To counter these misconceptions, we have our own program to raise awareness of the disease. This includes an alliance with two pharmacy chains where information is provided through consults with patients. Unfortunately, just as with CUROSURF, our COPD treatment has not been included in IMSS’ registry and remains inaccessible to a large portion of the population.
Q: How important is it for Chiesi to expand its portfolio in new treatment areas?
A: Part of our strategy for the last five years has been to create a third pillar in our product offering focused on rare diseases. Hopefully, the regulatory process in Mexico will enable us to bring it to the market as soon as possible. There are no therapies in Mexico for something like Leber’s Hereditary Optic Neuropathy. Therefore, it is in the patients’ interest to increase access to these treatments. Although the patient group with rare diseases is limited, it is society’s duty to look after them. More often than not, these patients are neglected by medical institutions, the government and pharmaceutical companies. This particular treatment can completely cure this condition. Even if there are only 500 people who need it, it is still worth it.
Chiesi Group is a pharmaceutical manufacturer founded in Italy in 1935. It is present around the world through 26 subsidiaries, three manufacturing plants, five R&D centers and direct distribution in over 60 countries
IGSA MEDICAL: CHALLENGING THE STATUS QUO IN HEALTHCARE
Timely and comprehensive patient care is the central axis for improving quality of life. IGSA Medical focuses on providing comprehensive health solutions through the construction of hospital infrastructure, equipment, operation of comprehensive medical services and nonmedical services. All its services are geared toward quality and warmth of service, with care regulated by the most stringent national and international standards that guarantee the patient a dignified experience and improvement.
In nearly 10 years of operation, the company has accomplished a multifaceted approach and established a strategy to treat chronic renal failure patients based on training for employees, creation of multidisciplinary teams and inclusion of patients’ families as key components.
Employee training has enabled IGSA Medical to contribute to community development and to place certified experts at the service of patients and their families. Together with highly renowned educational organizations and the Ministry of Labor and Public Welfare, the company has developed an ideal breeding ground for doctors, nurses, social workers, nutritionists, psychologists and administrative employees, with the sole purpose of providing integral attention to the patient, from a physical, mental and social perspective. In addition to complying with an inclusion protocol, all newly admitted collaborators are part of teams with different academic profiles and experiences to provide a holistic treatment to patients.
Participation of families is also key to ensuring a positive environment for patients because they are the ones who accompany, assist and ensure treatments are followed. IGSA Medical has developed several events to incorporate the patients’ community and to provide training for patients, their families and others close to them to improve the patient’s quality of life.
This holistic approach is supported by technology and inhouse developments for patient registration and surveillance, process automation at critical points and database development. IGSA Medical’s philosophy has allowed the company to build a presence in 14 hemodialysis hospitals in Mexico to help in the care of patients with chronic kidney disease, serving more than 1,200 patients monthly through more than 15,000 renal replacement therapies.
CENTRALIZED BUYING ALLOWS BETTER OVERSIGHT
DAVID LÓPEZ
Country Manager of BioMarin Pharmaceuticals
Q: Last year, BioMarin was expecting to win approval for Vizimim, a treatment for Morquio A Syndrome. Where does the application stand?
A: Last time we spoke, we were still in the application process for inclusion of this medicine on the coverage schemes of health insurance agencies. The big state agencies, IMSS and Seguro Popular, cover the majority of the population. For the past nine years these institutions have been very closed, not accepting a single new orphan drug medication. NGOs and doctors themselves have applied pressure to accelerate the approval of treatments, simply because they see the potential of these new medicines and treatments. In 2018, we were very happy to receive the approval from Seguro Popular for our product. It was a significant event. The key was to work closely with the government to create a strategic alliance to combat this syndrome. Unfortunately, with IMSS our approval process continues.
Q: What is your view of centralized acquisition of medications, particularly for insurance companies?
A: The health sector does not have a fixed protocol for this. IMSS has been doing large-scale centralized buys of medication for a long time and they have a mechanism for this. Personally, I think centralized buying is smart because it reduces unaccounted losses. In the past, funds would be designated to the states to buy the necessary resources. However, large amounts of money disappeared. Doing it centrally will allow better oversight. Equally, the individual health providers will not have to take charge of buying, which will allow them to focus on their other operations.
Q: It is estimated that 8 million Mexicans live with some rare disease. How can the private and public sectors improve diagnosis and treatment of rare diseases?
BioMarin Pharmaceuticals is a US biotechnology company and a world leader in developing and commercializing innovative biopharmaceuticals for rare genetic diseases. It has offices in North America, South America, Asia and Europe
A: There are two main pillars. One is neonatal testing. Recently, the director of IMSS signaled it would widen the different conditions tested after birth. Which diseases is still not clear. Currently, there is also an initiative in the Senate that is proposing to include a list of metabolic, genetic rare diseases in this test. The earlier diseases are detected the better chances of prognosis and a better life for the patient. The public sector has understood this and has created different programs. In this case, there have been strong examples of good cooperation between laboratories that are providing their services to the government.
The second pillar is education. At medical school there is still a lack of attention to rare diseases. Many doctors do not know how to diagnose and manage these diseases. This means it can take years before a person receives the right treatment, which often requires a multidisciplinary team of caregivers.
Q: What integral mechanisms need to be implemented to increase access to innovative medicine in Mexico?
A: One of the ways this is happening is that pharmaceutical companies are meeting with insurance companies to propose projects. These include not just a medication, but a whole service. Insurance companies can invest in these projects. One way you can offer a risk-shared product is if you agree to a plan where the payer only covers medication if it works. The government can certainly be an ally with the pharmaceutical industry. Innovation brings better treatments that can reduce the overall burden on the health budget over the longer term.
Q: What are your main goals for the medium term in Mexico?
A: One is to continue soliciting IMSS to get Vizimim approved. We will continue working with Seguro Popular to implement the treatment and improve the process for patients and providers. Of course, we also have other products waiting to be launched. Lastly, we will aim to optimize diagnosis and treatment by providing better training to specialists.
MEXICAN RESEARCH INSTITUTE AIMS TO BECOME A PLATFORM FOR NATIONAL R&D
SONIA PÉREZ Executive Director of UDIBI
Q: What are the main research lines carried out by UDIBI?
What are the institute’s most mature products?
A: UDIBI has three main development axes: new projects from Transferon, innovation in antibody research with new targets and services to the pharmaceutical industry. Transferon is a blood product extracted from cells and one of our goals is to obtain it through synthetic means. It is formed by a very complex mixture of peptides, so we are elucidating its composition using peptide analysis techniques. We are also selecting the molecules with greater biological activity to develop new products for the treatment of tumors, infections and hypersensitivities. We are now conducting tests to identify new therapeutic uses for Transferon, which will give us time to develop these new peptides.
Q: What were the main challenges in the development of Transferon?
A: One of the main problems was that its nature as a complex mixture of peptides clashed with old analytical techniques to study medications. Not too long ago, most medications were small molecules that followed traditional pharmacodynamics and pharmacokinetics in order to be evaluated by a regulatory entity. The generation of complex molecules represented a challenge for pharmacists, manufacturers and regulators, who had to develop new ways of dealing with these drugs. Complex molecules behave differently from small molecules and will exhibit completely different pharmacodynamics and behavior in the human body. They are also harder to track and quantify. For that reason, it was necessary to develop new guidelines that addressed these medications. Transferon is a mixture of peptides and for that reason its behavior was not perfectly understood until the appropriate techniques were developed to characterize it.
Q: What have been the main challenges in getting the medical community to accept products of this type?
A: Many in the medical community have been extremely open to new treatments and therapies, making it easier for us to conduct clinical trials. Interestingly, we previously had to work hard to convince doctors to allow us to carry out
clinical trials with them but now the institutions themselves are interested in testing our products.
Q: What are the main capabilities of UDIBI’s antibody research unit?
A: Our antibody research unit has partnered with US Global Bio to develop platforms and libraries for antibody discovery. What distinguishes this platform is that it is made up of 200 Mexican researchers. This platform allowed us to offer our research services to international laboratories, mainly in the US, and we are planning to offer services of this kind in Mexico.
We are developing a chikungunya antigen to develop antibodies for passive therapy and diagnostics and antibodies for tumor necrosis factor (TNF). We also perform discovery on demand for the US, where they send us the targets and we develop antibodies for them. One of these was launched with the Trudeau Institute.
Q: What are the main barriers to the development of Mexican R&D?
A: There are many barriers. The first is the lack of a legal framework that facilitates this process. Second, there is a lack of knowledge among academic researchers about how to develop and launch a product to the market. Another large problem researchers face in Mexico is dealing with the complex process to acquire materials for their research, since getting an approval to buy a product can take up to three months and the logistics to reach a research center can take 45 days. There have been numerous federal initiatives to streamline our supply chain but they have not been successful. Importing products is extremely complex as there are many intermediaries and customs issues but these problems have a greater impact on public research institutions, while private companies have managed to control them.
UDIBI is a research and support laboratory for biochemical companies that also has capabilities as an authorized third party. The center studies antibodies and performs bio-compatibility tests and biological and physicochemical characterization
MEXICO GATEWAY FOR LATIN AMERICA EXPANSION
AMÉRICO GARCÍA
Latin America Managing Director of Apopharma
Q: What was the motivation to create Apopharma and what market niches will this new division fill?
A: Although generic medicines are growing in Mexico, patients in the country still prefer branded products, accounting for more than 70 percent of the market. Given the nature of the Mexican health system, the private market in the country is mainly out of pocket. Additionally, an important part of the population prefers to seek private healthcare, which leads doctors to look for efficient, high quality and higher cost-benefit ratio therapeutic alternatives. Apotex has a comprehensive product portfolio that makes it highly competitive and allow patients to receive top-quality products.
Apopharma, Apotex’s prescription division, is an opportunity to diversify the presence of the company in Mexico and expand our reach into new channels contributing to Mexico’s health alternatives. Apopharma strives to provide products that meet international quality standards and have been certified in different parts of the globe, including US, Canada and Mexico, at the best cost. Moreover, our products have been endorsed by health authorities such as the European Medicines Agency (EMA), FDA, Health Canada and COFEPRIS in Mexico. All of the previously mentioned aspects enabled Apopharma to be launched in Mexico in 2018. Ever since that moment, we have offered one of the most complete product portfolios in central nervous system (CNS), analgesia and starting in 2019, cardiology.
Q: What does Apopharma represent for Apotex in terms of profits and investment?
A: We are at an early stage of introducing Apopharma in the market. Apopharma in Mexico and Latin America still presents the opportunity to expand and penetrate other segments where the company has not been present yet. Without any doubt, this represents a great success for Apotex which can proudly say that it provides physicians and patients a wide variety of globally commercialized products. Currently, we are seeing the results of an investigative collaboration between Mexico and Canada in different therapeutic areas. This has allowed us to accomplish diverse goals such as being the first company to launch Filcos (Etoricoxib) just after the patent had expired.
In doing so, we were able to benefit many patients with musculoskeletal affections.
Q: Why was Mexico chosen as the base for Apopharma over other countries?
A: Apopharma has presence with innovative medications in other countries, but in Mexico the company is piloting a new strategy to reach patients and physicians with branded products in selected specialty segments. The same products that we are introducing into Mexico are being used in millions of prescriptions in Canada, the US and Europe but under a different commercial strategy. Mexico is a dynamic market where brands are relevant for patients and physicians. Leveraging on this, and with the company’s commitment and flexibility to serve the specificity of this market, Apotex dared to move out of its comfort zone to bring fine medicines first to Mexican patients, and to the rest of Latin America once the strategy penetrates throughout the region.
Q: What therapeutic areas does Apopharma cover and what are some of the medications included in its portfolio?
A: Today Apopharma is present in three segments: central nervous system (CNS), analgesia and lipid lowering medications. Some of the drugs we are introducing are for treating depression, anxiety, Attention Deficit Disorder (ADD), Alzheimer’s, Parkinson’s, neuropathic pain, lipid-lowering, chronic and acute pain, amongst others. Along important brands such as Periamid, Ansdepcan, Filcos, Minofedral and Exotrima, Apopharma’s star medicine is Menural, prescribed for different types of dementia. Menural contains the active ingredient Memantine for Alzheimer’s. What makes Menural and all our medicines different from other players is that they are endorsed and certified by the most important and strict health regulatory agencies worldwide. Our significant investment in R&D has enabled us to have a positive impact on patient’s quality of life for more than 20 years.
Apopharma is part of Apotex. It is an innovative drug company focused on developing and commercializing products for patients with debilitating and life-threatening diseases where treatment options are limited or do not exist
CHIESI: LESS INVASIVE TECH DEFEATS OLD ENEMY
Respiratory Distress Syndrome (RDS) is a breathing disorder that affects mainly premature infants, which leads to breathing problems and often deficiency of pulmonary surfactant that does not permit the expansion of the alveoli for proper gas exchange. Delays in treating it can cause severe damage mainly to the lungs or the brain.
RDS was a death sentence 50 years ago as there was neither technology nor medicines to treat it. In the 1980s,Tore Curstedt and Bengt Robertson developed a natural drug composed of porcine lung phospholipids for premature infants named CUROSURF. This medicine quickly expanded across the globe thanks to Chiesi’s involvement. Neonatal mortality was greatly lowered through the development of a technique to reduce damage caused by providing the newborn with endotracheal intubation and mechanical ventilation, which Chiesi has also incorporated in its solutions. This technique is called INtubation-SURfactantExtubation (INSURE).
INSURE’s success sparked interest to renew non-invasive techniques to administer surfactant, such as the development of very thin endotracheal catheters to reduce damage to the airway. This led to the development of less invasive surfactant administration (LISA) and minimally invasive surfactant therapy (MIST) techniques, which together have greatly contributed to decreasing premature infant mortality. This has also been supported by the use of nasal continuous positive airway pressure (CPAP).
Research continues on surfactants’ physiology and on the development of new management and application techniques that reduce the impact on the newborn. These include the development of new fogging devices, such as perforated vibratory membranes that can atomize surfactants and deliver them by nebulization, greatly improving the application of the nebulized aerosol, providing greater control of droplet size and reducing side effects. The ultimate objective is to develop truly non-invasive techniques. Initial studies of these procedures in newborns have decreased the need for intubation and surfactant redosing by up to 50 percent.
Founded in 1935, Chiesi is an Italian company that specializes in the research, development and production of medicines for respiratory, neonatological and cardiovascular diseases. It now distributes its products in more than 80 countries and entered Mexico in 2006 with CUROSURF, a treatment for RDS.
PATIENT CENTRICITY IS CHANGING PHARMACEUTICAL INDUSTRY
JAVIER AMTMANN Director General of the Board of Menarini
Q: What are the potential opportunities for a pharmaceutical like Menarini in the Mexican market?
A: The aging population and the increase of noncommunicable diseases have opened up an opportunity for growth for us. Menarini has based its strategies on the local prevalent illnesses and the opinions of doctors to meet patients’ treatment needs. In December 2018, we obtained the registration for a patented cardiovascular product with Daiichi-Sankyo. We hope to launch this product by the end of 2019. In the gastro segment, Menarini launched a probiotic treatment for irritable bowel syndrome. The
creating a product development plan supported not only by the research centers we have in Italy, but also through our business partners to generate high value-added solutions. Our next step will be to expand our research centers in the region.
Q: In Spain, the Menarini Group launched the Sherpas20 project to develop a digital health training program. What benefits could this program offer to Mexico?
A: It is a project designed specifically for Spain that has resulted in many benefits for health professionals and
Liomont oral liquids' manufacturing plant
GENERATING PARTNERSHIPS TO BOOST NUTRITION AND PROBIOTICS
AUDE BOCLÉ General Manager of Biocodex
Q: How does Biocodex’s offering differ in Mexico and how has that helped you build your presence in the country?
A: Until 2018, Biocodex mainly marketed one pharmaceutical product called Floratil, which has been in the market for 25 years. This has given us the credibility of a growing company that delivers on the promises of its products. The scientific research behind Floratil makes it a unique probiotic in the market regarding effects and benefits, ensuring safety and quality. Biocodex will complement its microbiota offer with a new offer of probiotics food supplement. Besides its portfolio of microbiota brands, Biocodex is proposing a unique platform of communication through its Biocodex Microbiota Institute to inform and educate both patients and healthcare professionals on microbiota.
Q: What is the company’s strategy to develop its business inorganically?
A: Biocodex recently signed an alliance with Nutricia, Danone's specialized nutrition branch, to distribute and promote its infant formula range. This line of nutritional products and baby formulas benefit of over 120 years of research in nutrition and 40 years of research in breast milk. Our goal with this partnership is to evolve from a mono-product status to a more visible and larger operation that represents a very good business opportunity, since we are entering a market that is now ten times larger than the probiotic one.
At Biocodex we are convinced that nutrition during the first thousand days of life is a key factor for growth, development and the microbiota. That is why we are now interested in offering options that fulfill the nutritional needs of all children. In this purpose, Nutricia portfolio perfectly fits the microbiota focus of Biocodex. Nutricia and Biocodex both have a similar long-term vision for the development of their operations and footprint in Mexico.
Q: How do you tropicalize your strategies to the needs of the local market?
A: Biocodex has a global strategy that integrates local constraints, priorities, strategies and environmental conditions. The decisions we make at our headquarters are locally implemented, taking all those aspects into
consideration. We are aware of the challenges that Mexico faces in terms of chronic and serious diseases and, considering our microbiota focus, the best way we can tackle these issues is through prevention and education. Nutricia's specialized nutrition line suits this objective as an adapted nutrition in early age can positively impact a patient's life.
Floratil not only allows to treat gastrointestinal issues but also has preventive actions. In the second half of 2019, we will also launch a new probiotic-based food supplement line focused on well-being and prevention. Among those products, CYSTALIA will focus on prevention of cystitis in women and DIFESIA will strengthen the immune system to prevent infections. We will launch this line globally, which is a key moment for Biocodex because it will fuel our mission to develop our leadership in the microbiota area. The products will be distributed worldwide and the only difference might be the name of the products given regulatory constraints.
Q: How would you rank research in Mexico regarding microbiota?
A: For a couple of years, microbiota has become one of the fastest growing areas of medical research worldwide. The scientific community recently discovered that microbiota could be considered another organ of the human body as it can influence physiological functions outside the gastrointestinal system such as neurological, metabolic or immune functions. We have realized R&D is highly active in Mexico and that microbiota is also an area of particular interest among researchers. Biocodex Microbiota Foundation’s goal is to promote research in microbiota around the world. To achieve this objective, Biocodex Group has been providing grants to researchers in all countries where it directly operates. In September 2018, we celebrated the first grant in Mexico offered to a team of scientists in Michoacan.
Biocodex is an international pharmaceutical company with expertise in probiotics for the gastroenterology area. It has gathered momentum in the microbiota area, diversifying its portfolio to now offer microbiota healthcare solutions
CERTAINTY NEEDED TO SPUR INVESTMENT FOR DRUG DEVELOPMENT
MAURICIO MENDIETA
Managing Director of Gedeon Richter México
Q: How has the company progressed in its goals to boost its presence in women’s healthcare and consolidate a business unit focused on biosimilars?
A: Three years ago, there were three players in the women’s health segment and now there are 12. That is aggressive growth. It is very important to define what we want to be as a company. We want to be a pharmaceutical that provides specialized treatments in the area of gynecology. Gedeon Richter works with 6,000 gynecologists across the country. Our competitors’ coverage ranges from 6,500 to 120,000 doctors. Our differentiator is that 90 percent of our doctors are gynecologists and not a mixture of different specializations.
Our goal is clear. We will continue expanding our portfolio, introducing added-value products and working with specialized doctors. In the private sector, the goal is to consolidate a presence in all therapeutic areas of women’s health. In the public sector, we are focused on contraception and introducing the uterine fibroid treatment Esmya. Overall, we have 10 products pertaining to women’s health and will launch two more this year.
Q: What is the difference between public and private sector clients?
A: These involve very distinct mechanisms. The private market follows supply and demand. With respect to the government, there are two scenarios. One is to operate in a therapeutic area that is already established. The other is to launch something that is entirely new in the market. In this second scenario, we need to convince the government that the treatment will be beneficial. This can take time: we have been working with the government for over a year to get Esmya introduced. Today in Mexico, women with a uterine fibroid condition receive treatment with medication while waiting for surgery. The waiting time for an operation is
Gedeon Richter is the largest pharmaceutical manufacturer in Hungary and it specializes in gynecology drug developments. It is present in more than 38 countries with five manufacturing facilities, 29 representative offices and 38 sales subsidiaries
often five months. We had to make clear to the government that we are not offering a medication but a treatment of a whole other class. We can offer a product that is not only better but reduces the need for surgery by 40 percent. We are reorienting the entire model of treating symptomatic uterine fibroids in Mexico.
Q: What opportunities exist to make Mexico a clinical research hub and what business opportunities would result if that becomes a reality?
A: Thirteen percent of our global sales returns every year is invested in R&D. In Europe, we have three biotechnology plants. In Mexico, R&D is not our immediate priority due to bureaucratic hurdles. At CONACYT, researchers are driven by the number of publications they produce. There are other institutes that are dedicating efforts to development but approval processes are slow. Ten years ago, 50 percent of the investment in research was tax deductible. That is no longer the case. We certainly see potential in Mexico as a research and innovation location for us but industrywide, there needs to be more support.
Q: How is the political climate impacting the sector?
A: The reality is that there is a great deal of uncertainty related to investing in Mexico. There is uncertainty about López Obrador. I think the administration has good intentions but it does not have the necessary background or expertise. Economic growth in 2019 was projected last year to be 2.5 percent, now that has been lowered to 1.3 percent, or even lower. In the pharmaceutical industry, growth below 3 percent can be debilitating. The growth basically comes with the rise of prices and units, not due to investments. if you look at Latin America, 80 percent of the market for women’s health is in Mexico. If you look at performance, Mexico could easily be the 10 th or 12 thlargest market worldwide. But you need certainty, and this is missing. Overall, the dynamic is changing. Before, IMSS and the Ministry of Health worked together. Now, it is IMSS as a single bloc. There is no certainty as to whether the government will approve new products soon, because COFEPRIS is delaying approvals for new entrants at the moment.
R&D INVESTMENT KEY TO COMPETITIVENESS
VINCENZO D’ELIA General Manager of Laboratorios Alfasigma
Q: How does Alfasigma differentiate itself in Mexico and where are its key business focuses?
A: We are an Italian company specialized in gastroenterology that aspires to develop on a global scale. Our differentiating factor is to ensure strong compliance and to sell highly distinctive products. Today, if a company does not offer a differentiated product, it is going to find it difficult to compete. Alfasigma’s business focus and products will remain on primary care, although we do not discard the possibility of entering specialized care in the future.
Q: Alfasigma is present in North America. What role will Mexico play in expanding throughout the Americas?
A: The next step is to consolidate the company in other Latin American countries. Alfasigma’s international division has a department for the Americas region, which stretches from the US to Patagonia, Argentina. The company is evaluating market conditions and the best way to strengthen its presence in the region, whether through a subsidiary or through a licensing deal. There are many attractive markets in Latin America where Alfasigma does not have a significant participation but this will change. When that happens, Alfasigma will introduce its four therapeutic areas to all the countries in which it expands.
Q: How important is R&D for Alfasigma and what are the company’s research priorities?
A: Scientific research is one of the engines of development for Alfasigma. We want to continue innovating and introducing new products to remain competitive and economically sustainable. Alfasigma is the result of a merger between three Italian companies, Alfa Wasserman, SigmaTau and Biofutura. This merger increased our investment in R&D, product innovation and business development, while also providing a further investment to improve the company’s manufacturing facilities. Alfasigma will continue to focus its R&D investment in gastroenterology.
Q: What benefits does Alfasigma expect from participating in the Jóvenes Construyendo el Futuro (Young People Building the Future) program?
A: Alfasigma was one of the first laboratories to be affiliate with this program that now has more than 219 companies participating. Through this program, Alfasigma is making a commitment to offer job training and monetary support in collaboration with the government to young people who are starting their professional experience. It is a very interesting program and all companies should participate to contribute to the country’s talent development.
Q: How are generic medicines impacting your longerterm strategy for Mexico?
A: The only way to address the challenge from generics is through innovation. When a company constantly develops new products that have a high differentiated value, it will find a more effective way to compete in the market. The day an innovative medicine company stops investing in innovation will be the start of the end for that company. Alfasigma does everything necessary to continue being efficient and innovative in the market. We launch new products constantly.
On the flip side of the coin, the government should invest in the necessary medicines and elements to contribute to the healthcare needs of its population. It is absurd that a country like Mexico with its high potential and one of the top world economies has limited access to innovation. The starting point is to make people see that innovation is not an expenditure but an investment for the long-term. Fortunately, the administration of López Obrador has shown positive interest in investing in innovative products. Our pipeline does not include products that address Mexico’s epidemiological changes but that does not mean our business development area is not considering it. If agreements and market conditions suggest that investing in other therapeutic areas is good for the company, then it will look to introduce new products to its pipeline.
Laboratorios Alfasigma is the result of the merger between ALFA Wassermann and Sigma-TAU, two of Italy’s most important pharmaceutical groups, along with Biofutura. It specializes in gastroenterology, rheumatology and cardiometabolics
LEI: THE FUTURE OF MEDICINE IN ADVANCED THERAPIES
The horizons of medicine are defined by the possibilities brought by new therapeutic resources to attack diseases that have yet to be treated successfully. Gene therapy, cell therapy, tissue engineering and their combinations are collectively known as advanced therapies.
Laboratorios de Especialidades Inmunológicas (LEI) provides its services as a third party authorized by COFEPRIS. Since 1991, LEI has held a distinctive catalog of the most innovative market research tools and solutions, driven by requests from its customers.
Advanced therapies have emerged to treat acute lymphoblastic leukemia in children with CART cells, including three-dimensional biological impressions to restore patient mobility. New opportunities, however, bring fresh difficulties. Entry to this market is restricted either by the absence of the definition of health regulation or by ignorance and insufficient interpretation of regulations, which can jeopardize the effect of sophisticated therapies on patients.
LEI helps its clients navigate sanitary regulation. Its technological management model, supported by consolidated tools for the development and quality control of advanced therapies, resulted in LEI winning the 2018 National Prize for Technology and Innovation. With state-of-the-art infrastructure and a mature quality-management system, LEI meets international performance standards, leading its customers through the path of local and global health regulation.
4GENERICS & OTCs
Nine out of 10 medicines sold in the country are generics. This market represents 53 percent of the total drug industry in Mexico. Because of its impact on human health, the pharmaceutical industry is one of the most controlled industries in the country and the world. Big Pharma companies are throwing their weight into the generics market, which could hamper the efforts of smaller manufacturers. This situation could also be fueled by the ratification of USMCA and a possible extension on patent protection periods for biotechnological medicines.
This chapter will analyze the challenges generics and OTC industries face in the Mexican market. It will also consider the complexities of the international market and how those affect the pharmaceutical industry. Through interviews with leaders and decision-makers, this chapter will clarify the opportunities for different players in the sector, from local to international manufacturers.
CHAPTER 4: GENERICS & OTCs
82 ANALYSIS: Generics Present Both Opportunities and Challenges
86 VIEW FROM THE TOP: Gurulinga Konanur, Hetero Mexico
87 VIEW FROM THE TOP: Américo García, Apotex
88 VIEW FROM THE TOP: Rafael Maciel, AMEGI
89 VIEW FROM THE TOP: Alfredo Rimoch, Laboratorios Liomont
90 VIEW FROM THE TOP: Esteban Abad, Glenmark
91 VIEW FROM THE TOP: Juan José Aguirre, Grupo Bruluart
93 INSIGHT: José Díaz, Micro Pharmaceuticals México
94 VIEW FROM THE TOP: Anne Engerant, RB
95 ROUNDTABLE: How are You Differentiating Your Products in a Cost-Driven Market?
GENERICS PRESENT BOTH OPPORTUNITIES AND CHALLENGES
Generics are always an attractive alternative for those who need medication at accessible prices, be they individuals or healthcare systems. Their popularity has spurred a global generics market that was worth US$244.5 billion in 2017, according to Research and Markets
That is the case in Mexico, which has become an attractive market for generics manufacturers thanks to government efforts to increase access to medications. During President Peña Nieto’s administration, COFEPRIS approved 590 generic registries to address 71 percent of the most common mortality causes in the country. In mid-2018, former Commissioner of COFEPRIS Julio Sanchez y Tepoz stated that this strategy saved public institutions MX$26.1 billion (US$1.37 billion) and allowed them to increase the number of acquired medications from 4.4 million units to 24.9 million units per month.
The impact of generic medications extends beyond the public sector. “Previous administrations have invested in generics, which amount to 86 percent of prescriptions in the public sector. This has resulted in significant changes to the entire market, including public and private institutions and pharmacy chains,” says Rafael Maciel, President of the Mexican Association of Generics (AMEGI).
Generics have also left their mark on the private sector, creating competition and opportunities. “The generics market has grown exponentially in Mexico and Latin America due to low prices and a boost from pharmacies. There are solid opportunities, particularly in the branded generics segment,” says Esteban Abad, Vice President and Head of Upper Latin America at Glenmark. Now, nine out of every 10 medications sold in the country are generics, according to IQVIA. While their sales volume has quickly surpassed that of patented medications, generics represent only 53 percent of the medicines market by value because of their lower cost. Higher investment in generics could bring even further savings. The Federal Commission of Economic Competition (COFECE) states that Mexicans would save MX$2.55 billion (US$133 million) per year if penetration of generics doubled.
BIG OPPORTUNITIES, BIGGER CHALLENGES
Another type of products that have significant potential in the market are biosimilars. “Biosimilars are expected to change the industry and they have brought significant advantages to those countries in Europe and the Americas that have adopted them,” says Américo García, Managing Director Latin America of Apotex. Unlike small molecules that can be fully replicated, making the patented medication and the generic equal in every way, biological molecules are much larger, complex and cannot be fully replicated because they are produced by living organisms. For that reason, regulators have established a different set of requirements for biosimilars: while a biosimilar cannot be exactly the same as the biotechnological drug, it must be highly similar in purity, molecular structure, bioactivity, safety and potency.
Due to their nature, biosimilars are harder to research and manufacture than generics. Moreover, there are complex patent processes stopping the commercialization of biosimilars even after the patent has expired. For instance, AbbVie’s Humira, which was the world’s best-selling medication in 2018 and earned its manufacturer US$19.9 billion that year, had three FDA-approved biosimilars by early 2019. However, none are commercially available in the US or Mexico and the situation is not expected to change soon. In fact, according to the Initiative for Medicines, Access & Knowledge, AbbVie has filed 274 patents in the US for Humira, 49 percent of them after Humira’s first patent expired in 2014. These patents can increase Humira’s market exclusivity until 2037, much longer than the original patent’s protected 20 years counting from 1994.
A similar situation has occurred with several other biosimilars. “[Biosimilars] have failed to enter many regions, such as the
US, which has extremely high barriers for their introduction. The story is similar in Mexico,” says García. Not all markets are the same. After Humira’s patent in Europe expired in October 2018, four manufacturers were quick to introduce their generic version in the region. But in Mexico, their approval might be more complex thanks to recent changes introduced to the yet-to-be-ratified USMCA that extend the protections for the clinical data of biotechnological products. This move was greatly frowned upon by the local pharmaceutical industry. “We have been working alongside generics associations from the US and Canada to fight against these extra 10 years of data protection. This extension will lead to longer wait periods for patients to access biosimilars and will maintain higher prices in the market,” says Maciel.
Despite the challenges that have complicated the entrance of biosimilars to Mexico, many see opportunities ahead. National and international pharmaceuticals, including Neolpharma, Liomont, Probiomed, Sandoz, Amgen, Pisa Farmacéutica and Silanes, are investing in the development of biosimilars for the local market. The development and introduction of biosimilars to the local healthcare system can bring savings to patients who pay out of pocket and to the public healthcare system.
LOCAL STRENGTH
Mexico is the second-largest pharmaceutical market in Latin America and the 12th in the world. The Mexican public sector, which includes IMSS, ISSSTE, PEMEX, SEDENA, SEMAR and others, is the country’s largest buyer of medications. In 2019 the Federal Administration budgeted MX$79.42 billion (US$4.16 billion) for the acquisition of medications, according to SHCP. Public institutions are heavily reliant on generics to provide care to the millions of people they care for. As Maciel says, generics and biosimilars “amount to 86 percent of prescriptions in the public sector.” Moreover, Mexico has the lowest expenditure in healthcare out of all 35 OECD countries at a total of only US$1,080 annually per person. A significant percentage of that expenditure is made out of pocket by patients without access to social security. The country has the second-highest out-of-pocket costs out of all OECD countries, which is 41 percent of the country’s health expenditure.
These conditions have created a fructiferous environment for generic, less-expensive medications. Many of these are available at the growing number of pharmacy chains, such as Farmacias del Ahorro, Farmacias Similares, Farmacias Benavides, Farmacias Guadalajara and Farmacias San Pablo, among many others. “Farmacy chains offer generics at very competitive prices. Moreover, they offer free doctor’s visits,” says Maciel. Pharmacies at the point of sale now surpass IMSS, Mexico’s largest public healthcare service provider, in the number of daily doctor’s consultations. “These doctors are writing over 400,000 prescriptions per day and the number will continue growing,” says Marcos Pascual, Commercial
LOCATION OF PHARMACEUTICAL COMPANIES
LOCATION OF PHARMACEUTICAL COMPANIES
32% Mexico City
20% Jalisco
9.5% State of Mexico
38.5% Other
Source: INEGI
Director of ANAFARMEX. For comparison, IMSS provided between 180,000 and 185,000 daily consultations, said Patrick Devlyn, President of the Health Commission at the Business Coordinating Council, to El Universal in mid-2019.
Generics are expected to continue growing and penetrating the Mexican market. “The country’s economic conditions do not allow people access to patented products but for those with enough purchasing power, branded generics represent significant savings in out-of-pocket spending,” says Abad.
MADE IN MEXICO
Mexico is gradually becoming a generics manufacturing powerhouse. The country now ranks as the 25th-largest manufacturer in the world with a production valued at US$4.74 billion in 2017, according to ProMéxico. The country now has 795 pharmaceutical companies, according to INEGI, most of them clustered in three states: Mexico City, Jalisco and State of Mexico. The sector now represents 1.4 percent of the country’s manufacturing GDP. Moreover, Mexican production of generics is expected to increase and reach a value of US$9.48 billion by 2025, according to ANAFAM.
There are bumps on the road, however. First, “the linkage process for patents is extremely unclear and inefficient,” explains Maciel. The second is the USMCA’s additional 10year protection for data on biotechnological products, which may delay the introduction of biosimilars. Finally, the latest medication tender held in June 2019 which reduced prices by 8 percent and separated distribution from manufacturing. The tender was heavily criticized for accepting bids from Asian countries, as local manufacturers claim that those products are less expensive but follow unethical manufacturing practices.
While there are challenges, there are also opportunities for generics. For instance, during this tender “62 percent of the product keys were deserted, which will create a shortage of medications at public institutions that will force patients to head to the private sector,” says Maciel. Mexico’s growing population will need a large number of medicines, especially as people get older and waistlines keep increasing.
Mexico has a strong medicine manufacturing arm that supplies the entire country and exports to other parts of the Americas. About 95 percent of manufactured medicines are generics and can cost up to 80 percent less than their patented variant. However, these products represent only 53 percent of the medicine market’s value. Medicine production is expected to continue growing but as the public sector opens tenders to countries that do not have FTAs with Mexico and offer lower prices, manufacturers are looking to increase exports and sales to the private sector to continue growing.
MEXICO'S PHARMACEUTICAL MARKET (US$ billion)
Expenditure on medication between 2012 and 2018
Value the generics market is expected to reach by 2025
IMSS AND ISSSTE’S MAIN MEDICATION SUPPLIERS THROUGH TENDERS (2012-2018)
35.2% Grupo Fármacos Especializados
11.6% Farmacéuticos Maypo
11.4% Distribuidora Internacional
5% Ralca
5% Comercializadora de Productos Institucionales
2.9% Savi Distribuciones
DISTRIBUTION OF PHARMACEUTICAL BUSINESSES
25th
2nd
12th
2.4% Laboratorios de Biológicos y Reactivos
2.3% Compañía Internacional Médica
2.1% Comercializadora Pentamed
1.6% Vitasanitas
20.5% Others
First market launch of the generic medication
GENERICS AFTER PATENT EXPIRATION
6 months 12 months 24 months
*The baseline price is the cost of the patent medication one month after its release
95
percent of medicines manufactured in Mexico are generics
Wadding, gauze and bandage
Antivenom and vaccines Pharmaceutical product and preparations
Others
PROMISING FUTURE FOR APIS AND BIOSIMILARS
GURULINGA KONANUR Director General of Hetero Mexico
Q: How has Hetero Group used its position as a global powerhouse in retroviral medication to penetrate the Mexican market?
A: Pharmaceutical businesses always require a long-term vision. In 2018, Hetero Mexico consolidated its raw materials segment with excellent results, which led us to introduce more products to the Mexican market. Globally, Hetero is very strong in the retroviral segment although this was not fully developed in Mexico until 2017. During the past couple of years, we have greatly strengthened our retroviral portfolio and now we have the lion’s share of the market in active pharmaceutical ingredients (API) in Mexico. This market is extremely competitive and especially with many patents expiring, there is an increased penetration of generic alternatives. Until 2017, the retroviral market was partly monopolized by patented medications but patent expirations have opened the market for many generic companies. As a result, we expect our market share to continue growing in Mexico.
Q: What are your expectations for growth in the retroviral market?
A: Thanks to their affordable cost, generics increase access to life-saving medications. Recently, some areas in Mexico saw shortages of HIV medication and companies were unprepared to address the demand for the medication once patents expired. Generics manufacturers must always be prepared to produce medications as soon as this happens. Otherwise, they lose time, which can cost them potential business. The market for retroviral medications is expected to grow in volume. As innovative drugs go off patent, costs are lowered thanks to the introduction of generics, which allows public institutions to buy more products for the same amount of funds. We also expect the market to grow in the private sector as more individuals start buying generics due to availability of medication at affordable prices. More
Hetero is an Indian generics manufacturer present in over 126 countries. It specializes in antiretroviral therapy drugs for HIV/ AIDS treatment. Hetero has over 25 years of experience in the sale of APIs, generics and biosimilars
generic manufacturers are entering the market, which is beneficial for us in terms of API sales.
Q: Mexico has a strong generics market but how competitive is the market for APIs?
A: There are few API manufacturers in Mexico. As a result, we hold strong ground in Mexico. The quality of a medication relies entirely on the quality of the API. Developing an API requires significantly more investment in R&D than in manufacturing of the finished product. We invest heavily in R&D and we often begin planning them over 10 years before they go off patent. This help us to offer products to clients at a much advanced or early stages of product development. We see the biggest competition coming from Asian companies that offer their products at a low price, but lack in offering great services and speed to reach the market. Hetero has a 500ha chemical complex in Vizag, India that manufactures 24/7, which allows us to offer a high volume of high-quality products at affordable costs.
Q: What new products will Hetero Mexico introduce to the Mexican market in 2019?
A: We will focus on products that go off patent, including retroviral, oncologic and, cardiometabolic solutions. The latter is a significant market area in Mexico and Hetero Mexico can introduce top-quality products at affordable prices. We offer more than 305 different products but our strategy is to focus on specialty, high-tech niches.
Q: What are Hetero Mexico’s growth expectations in the coming years?
A: The pharmaceutical industry has been holding back due to the climate of uncertainty that permeates the country. However, we expect Hetero Mexico will continue growing thanks to patent expirations. We expect to grow as long as the government does not change existing manufacturing and importing regulations. Our main competition used to be Chinese companies due to their low prices. However, we have seen that the country is facing issues concerning environmental regulations that forced the closure of several manufacturing plants. Meanwhile, Indian manufacturing, which follows strong good manufacturing practices, is booming.
BIOSIMILARS AN OPPORTUNITY TO TRANSFORM THE PHARMACEUTICAL MARKET
AMÉRICO GARCÍA Director General of Mexico and Latin America at Apotex
Q: How has Apotex advanced in growing its chronic degenerative diseases portfolio?
A: We maintain our efforts to penetrate the market for central nervous diseases medications, which has not been easy. Doctors in this area perceive us as newcomers so it has been hard to convince them to use our medications. This year, we will focus on strengthening our portfolio. We also launched a new division in Mexico called “cardio-analgesic” that handles both cardiology and analgesic products.
Q: Considering Mexico’s epidemiological profile and the change in the population pyramid, what business opportunities do you see in the coming years for Apotex?
A: Mexico is an interesting market. Part of it behaves as an emerging market and another as a mature one because the change in the population pyramid is more common to mature markets. As Mexicans live longer, they are much more prone to chronic neurodegenerative diseases, which will undoubtedly increase, along with diabetes and cardiometabolic diseases. At the same time, there is a significant poverty rate in the country. This segment of the population is more sensitive to acute diseases, such as dengue. As a result, Apotex has invested in products for both markets through the generation of specialized strategies.
Q: How is Apotex contributing to the administration’s goal to increase access to medications?
A: Universal healthcare coverage should be the ultimate goal of any healthcare system. However, this will be hard to achieve with the current state of the Mexican healthcare system. It is necessary to develop a long-term strategy that operates no matter which party is leading the country. The former administration made an effort to increase patient interchangeability among public institutions, which was a good first step. It would also be convenient to merge public healthcare institutions, which will be a complex and longterm process that must be done in a sustainable way.
The current administration has greatly reduced the budget for several areas in the healthcare sector. Among OECD countries, Mexico is among the lowest investors in healthcare as a percentage of GDP, so the only solution to improve the
system is to increase public investment. It is not possible to achieve healthcare for all by reducing the budget.
Q: What trends are affecting the generics and biosimilars industry worldwide and in Mexico?
A: Biosimilars are expected to change the industry and they have brought significant advantages to those countries in Europe and the Americas that have adopted them. We launched a biosimilar in Canada that resulted in significant savings to its healthcare system. However, these products have failed to enter many regions, such as the US, which has extremely high barriers for the introduction of biosimilars. The story is similar in Mexico. While some products have been approved, their registration takes a very long time. We are in a transition period for the regulation and acceptance of biosimilars. Generics, on the other hand, are growing at an accelerated pace. A trend we see in the Latin American market is the consolidation of pharmacy chains, which later release their own branded generics. This is destroying independent pharmacies and generating oligopolies. For instance, Chile has three large pharmacy chains that control most of that market. We are beginning to see this phenomenon in Mexico and we have to prevent it to avoid the death of independent pharmacies, which will eventually hurt patients.
Q: What are Apotex’s main goals for 2019 and what are your expectations for the future of the pharmaceutical industry?
A: Over the past five years, we have positioned Apotex in the Mexican market and doubled our sales. In the short term, my goal is to double the size of the company again, following our quality commitments to continue benefiting patients. To do so, we will focus on incorporating other therapeutic areas, exploring new market niches, growing the areas where we are strong and creating a closer relationship with our current clients. In the future, we want to see Mexican institutions strengthened and rule of law continued.
Apotex manufactures and commercializes generic and innovative drugs in more than 115 countries. It has over 1,100 active projects that represent more than 500 molecules in 50 countries
LOWER COSTS LEAD TO BOOMING GROWTH FOR GENERICS
RAFAEL MACIEL President of AMEGI
Q: How can generics become a tool to support access to healthcare services in Mexico?
A: Generics and biosimilars have brought significant savings to patients. Previous administrations have invested in generics, which amount to 86 percent of prescriptions in the public sector. This has resulted in significant changes to the entire market. Generics have also gained significant strength in the private market, especially as recent public tenders have bought fewer products than the population needs. Tenders for 62 percent of the products were deserted, which will create a shortage of medications at public institutions that will force patients to head to the private sector.
Q: What regulatory changes would AMEGI like to see?
A: We are lobbying on two fronts. The first is with COFEPRIS and IMPI because the linkage process for patents is extremely unclear and inefficient, which has hurt the local pharmaceutical industry. Through linkage, many patent protections have been extended for two extra years. The existing regulations of both institutions are not explicit for manufacturers and although they offered changes, we have not seen this to date. The second is through proposals sent to the Senate and the Chamber of Deputies to explain the linkage process and propose better alternatives that can be applied in a more efficient and transparent way. Our objective as an association aligns with the president’s goal to increase access to healthcare services and safe, quality medicines.
The Mexican Association of Generics (AMEGI) is a private organization created in 2002 to represent the interests of six generic manufacturers operating in Mexico: Allen, Apotex, Hormona Laboratorios, Randall Laboratorios and TEVA
MEXICAN PHARMACEUTICALS DEMAND GOVERNMENT SUPPORT
ALFREDO
RIMOCH Director General of Laboratorios Liomont
Q: What is the reach of Laboratorios Liomont’s core business?
A: We are active in various areas of the market, with our core business being branded generics. In this area, we are market leaders for a number of products. We also offer a diverse line of OTCs. We provide internationally-recognized brands and participate in several markets in Central and South America. We are also active in the European market, where we have been approved by EMA and have a presence in Spain, Portugal and Italy. Similarly, we have been audited and verified by the FDA in the US, where we sell OTC products.
Apart from generics, we have built state-of-the-art facilities for the production of biosimilars and are also working on the development of vaccines. In Mexico, we have the rights to manufacture and distribute a recombinant vaccine for influenza that is unique in the world.
Q: Laboratorios Liomont has inaugurated a new plant for sterile and recombinant products in Ocoyoacac, Mexico State. What does this mean for the company?
A: Laboratorios Liomont has taken significant steps in biotechnology. We just finished constructing this state-of-theart plant with the latest technology for sterile products. While still subject to approvals, we have already started doing the technology transfer for fill and finish of recombinant products. We are strong believers in collaboration with academic bodies in Mexico and other countries. One example of this is our work with UNAM’s biotechnology institute. In Cuajimalpa, we also built a biotechnology plant that will produce monoclonal antibodies, which will then be turned into finished sterile products at the Ocoyoacac site. The latter has been designed and built to manufacture large volumes of biosimilars and recombinant vaccines using the latest technologies based on isolators. Biotechnological medications produced at this plant will offer vital alternatives for the Mexican population. Having these alternatives available will also make it possible for the government to make significant savings in its buying schemes.
Q: Do you feel the government needs to take a more active stand in supporting Mexican pharmaceutical companies?
A: In terms of volume, the government has traditionally been a major buyer of our products. Since the last elections, things
have gotten more complicated for participating companies. During the tender approvals in October 2018, we had a lot of prime material and finished products lined up, but the government recently stopped buying these products. What alarmed us in the last tenders was that reference prices had lowered to such a level that in most cases they were unattainable due to production costs. I think there needs to be more understanding from the new administration regarding increased manufacturing costs due to stronger regulations.
The government keeps insisting on more investment for quality control but at the same time, it expects prices to go down. This could make the entry of foreign producers more unfair if they do not adhere to the same regulatory standards for manufacturing. We are strongly committed to Mexico’s well-being and industrial development. The public sector should have a primary role in strengthening Mexican research and Mexican companies to ensure future accessibility to high-quality treatments.
Q: What is the status of new-product approvals?
A: At the moment, COFEPRIS is a black box. We have products ready and have applied for inclusion into the national registry, but we still do not have a response. Officially, It can take between one to six months before you get a reply from the commission, even if the product meets all the necessary requirements. We have been in some processes for over a year but do not know their status yet. Especially when companies are expecting to enter markets where patents have expired, delays in approvals only help multinationals maintain a monopoly over certain treatments, which increases barriers and costs for the general population. Also, we lack a regulatory process that promotes innovation. CONACYT is not supporting R&D in the industry, so our collaboration with the council no longer exists. Sadly, this is pushing prestigious researchers to move to other countries to continue their work there.
Laboratorios Liomont is a Mexican pharmaceutical company that has been developing, producing and marketing branded generics for a diverse range of applications for over 80 years. The company is present in Central and South America, Europe and the US
BRANDED GENERICS COULD UNDERPIN UNIVERSAL ACCESS TO HEALTHCARE
ESTEBAN ABAD
Vice President and Head of Upper
Latin America at Glenmark
Q: What benefits can Glenmark bring to Mexican clients and how does it offering differentiates from other local and international manufacturers?
A: Glenmark’s biggest differentiator against other Indian companies in Latin America is that all its executives are local and come from Big Pharma companies. Glenmark aspires to be a Big Pharma company and is strengthening its operations through pharma know-how and experience. Initially, the company wanted to cover different therapeutic areas in Latin America but it was
Glenmark is headquartered in Mumbai, India, and was founded in 1977 as a manufacturer of generic drugs and active pharmaceutical ingredients. In 2009, the company arrived to Mexico focusing on pneumology, oncology and dermatology
more profitable to specialize in pneumology, dermatology and oncology.
Glenmark has a different portfolio for each country, depending on the market’s opportunity areas. It has experienced rapid growth, particularly in pneumological medicine, and penetration has been favorable thanks to the differentiation of Glenmark’s products. Since branded generics companies offer very similar products in large markets like Mexico, Glenmark believes the best strategy is to offer highly differentiated products at affordable prices. Our flagship product, Misdapre Rac, is the combination of two drugs (Montelukast and Levocetirizine) that already exist in the market but no other company has them together. Our other differentiated product is Nebzmart, which is a portable nebulizer.
COMPETITION FORCES SMALLER PLAYERS TO UP THEIR SERVICE GAME
JUAN JOSÉ AGUIRRE
Commercial Director of Grupo Bruluart
Q: How have you advanced in your goal to increase sales of paracetamol and diclofenac?
A: We are still focused on the international market. Unfortunately, we are just exporting small volumes through distributors in a few Latin American countries. We have not been able to get big contracts for generics, yet. We will have meetings throughout 2019 with associations of distributors in South America. The US is also a priority for us, even though we might face some challenges in terms of logistics. We would also like to export our products to Southeast Asia.
Q: What are your views on overuse of antibiotics, painkillers and anti-inflammatory medication in Mexico?
A: I do not necessarily see this trend leading to a reduction in effectiveness or more resistance in the body. What I see is that people often use these medications in wrong dosages and for conditions for which they might not be intended. This makes the treatment less effective. This problem is mainly rooted in the fact that Mexicans have a tendency to make medical decisions without consulting a doctor. People have a fever or a headache and take pills. They continue to self-medicate, with 70 percent of medication used this way. Having doctors at the point of sale has been an effective way to mitigate this issue. Pharmacy clients can now consult a doctor for a small fee and receive a professional diagnosis. The prescription does not have to be a new medication of some innovative molecule. It can be paracetamol but at a better dosage and with indications of use.
Q: What are your strategies to remain competitive against large pharmacy chains?
A: Competition is inevitable. On the one hand, it has a positive effect because it forces smaller pharmacies to level up their service. Before, clients had only one pharmacy in their neighborhood. It could be good or bad, but it was the only option. Now there are two or three and competition has gone up. It has forced us to make changes too. We diversified our portfolio, offering new products in areas such as food supplements and prevention. People will now find more specialized
products, including patented medications. We have also increased the number of campaigns we run to raise awareness about health and nutrition.
Q: What is your view on lengthening licenses for patents and the inherent risk of creating monopolies and raising medicinal costs?
A: Twenty years is enough time for pharmaceutical companies to recover their investment and gain resources to develop new medicines. Efforts to lengthen these patent licenses have impacted us directly and indirectly in terms of costs. Pressure has also elevated standards in the generics market in management of stocks and distribution. It is a delicate balance and there must be an incentive for development and the recovery of investment. But we must also ensure that medications are affordable for the population. In the US, development of new medications is supported by a financing mechanism covered by insurance agencies. But this is not easy to recreate in Latin America where spending on medication is largely out-of-pocket and insurance coverage for medication is minimal.
Q: What are your expectations regarding out-of-pocket expenditure?
A: In the short term, the current restructuring of national health institutions will lead to higher out-of-pocket spending. Even though we have had a new government for over six months, institutions are a bit paralyzed still. The government is trying to restructure its purchasing processes and this will be reflected in many people who formerly went through Seguro Social and ISSSTE now having to spend their own money on medication. Institutions will eventually start operations again, but it will take time and there will be a great deal of uncertainty in the meantime. We do not know whether the model the government wants to introduce will work or not and the information is still limited.
Grupo Bruluart is a Mexican group specialized in generics. It has four divisions: Bruluagsa, a medicine laboratory; IM Bruluart a medication manufacturer; Brudifarma, a distributor and logistics operator and Farmacias Gi, a pharmacy chain
Liomont robotized warehouse, Ocoyoacac, State of Mexico
HIGHLY DIFERENTIATED PRODUCTS FOR MARKET COMPETITIVENESS
JOSÉ DÍAZ Executive Director of Micro Pharmaceuticals México
Data sciences company IQVIA estimates there are approximately 50 generics companies competing in the Mexican market, all of them actively working to attract consumers looking for lower prices. “Under these circumstances, product differentiation becomes imperative to remain ahead,” says José Díaz, Executive Director of Micro Pharmaceuticals México.
Micro Pharmaceuticals started in 1973 as a generics company based in India and today, its products are present in 60 countries, including Mexico through a subsidiary known as Micro Pharmaceuticals México (Micromex) that focuses on anti-infectives, cardiovascular products, antihistamines and nervous system therapies. The company is recognized by different regulatory authorities across the world, including ANVISA in Brazil, TGA in Australia, MHRA in the UK, FDA in the US and COFEPRIS in Mexico. Accreditation by several regulatory agencies has given added value to the company’s products. “Our headquarters exports to heavily-regulated countries. We prioritize good manufacturing practices to not lose our certifications,” says Díaz. The same generic products that are sold in Mexico, are sold in all countries where Micro Pharmaceuticals has a presence. “This forces us to have a single production process for all customers.”
A single manufacturing chain also has its challenges as market opportunities and regulations differ from one country to another. Since the 1990s, the Mexican government has chosen to incentivize the generics market in the country because the purchase of these medicines represents up to 80 percent savings in medicines, according to COFEPRIS. However, Micro Pharmaceuticals México believes the private sector also is presenting increasing opportunities for the generics market. “The constant price war and the sector’s sustained and relevant market growth have increased the attractiveness of participating in the private sector,” says Díaz. However, growing market participation should not be the goal. “The objective should be a quality competition, where companies work to manufacture products that ensure the fastest recovery, with the least side effects at an affordable price.”
Díaz believes the emerging business opportunities in the private sector are partly a result of public policy changes and partly thanks to the country’s economic environment. “Given the current purchasing policies, growth opportunities in the public sector remain uncertain,” he says. The country, nonetheless, represents an important market for international companies. “Mexico is an important country and we are here to stay,” Díaz says. “We will maintain our price and high-quality policies to compete with reasonable results.”
“The constant price war and the sector’s sustained and relevant market growth have increased the attractiveness of participating in the private sector”
Although the generics industry will remain a strong ally for the government, Díaz says public policies need to promote quality in medicines. “Health authorities should put more weight on the quality of medicines and see price as a second priority. Savings in purchasing cannot supersede quality because people’s health is at stake,” says Díaz.
Public policies need to reflect that health comes first, Díaz adds. Increasing the quality requirements for generic products would result in greater benefits for patients. Moreover, Díaz foresees opportunities for high-quality differentiated generics. “Our branded generics are wellpositioned in the market and the final consumer is increasingly choosing them over other options,” he says. However, patient education could have a stronger role in helping people to be aware of their purchase decisions. “If COFEPRIS would send information to the final consumer on the importance of quality in generics, then patients would be better informed when making their purchasing decision.”
PAVING THE WAY FOR A HEALTHY SEX LIFE
ANNE ENGERANT
Senior Vice President and General Manager LATAM Health of RB
Q: How is Mead Johnson Nutrition performing after being acquired by RB?
A: After the acquisition of Mead Johnson Nutrition in May 2017, we created two separate divisions. One is home hygiene and the other is health, which includes Mead Johnson’s portfolio of nutrition, our OTC brands and our sexual wellbeing products. I have been responsible for the health division in Latin America since January 2018. It is always a journey to integrate and create a new business structure due to the implications in terms of culture, data systems and ways of working. 2018 was a positive year and even though some brands were suffering from a lack of focus after this integration, we grew close to a double-digit rate.
In the area of baby nutrition, rather than breast milk, we consider that our true competition are bad nutrition practices. There is a billboard campaign that focuses on the dangers of giving alcohol to infants but there are other substances like coffee, soda or even cow’s milk that are not
Reckitt Benckiser (RB) is a British consumer goods manufacturer that participates in segments that include home care, hygiene and health. The company is present in over 60 countries through brands like Durex, Mucinex, Nurofen and Scholl
recommended for young babies. We are very proud to have launched sugarless variants of products like ChocoMilk or Cal-C-Tose, which offer a healthier choice and we hope will contribute to reducing diabetes and obesity among children.
Regarding our OTC portfolio, our strategy is to introduce better molecules to Mexico to develop our brands and increase our market share. We launched Graneodin F, introducing a new molecule Flurbiprofen that will work along with benzocaine, which was the traditional molecule we used in Mexico. We also launched ibuprofen products to complement our paracetamol product lineup Tempra and the equivalent of our Gaviscon technology Picot, marketed under the name of Picot Adv.
Q: What strategies are you implementing to eliminate the stigma around the use of condoms?
A: Mexico is one of the worst countries in the world in terms of teenage pregnancies and unfortunately condom use is not yet at the level we can find in other countries. The previous administration spent a large amount of resources to promote the use of condoms but the usage rate has remained stable since 2015. Changing habits is not easy. There is only so much we can do as a brand, which means we have to work in partnership with the government, customers and other industry players.
Stronger regulations concerning generics production, along with high costs of patent medications, have led to a boom in the Mexican generics market, which is the largest in the medications segment in terms of sales volume. While the market for generics is expected to continue growing, challenges are also on the horizon, especially considering that customers are increasingly looking for the lowest available price. Mexico Health Review spoke with healthcare leaders and experts to get their opinion on how to differentiate in a price-driven environment.
HOW ARE YOU DIFFERENTIATING YOUR PRODUCTS IN A COST-DRIVEN MARKET?
There are few API manufacturers in Mexico. As a result, we hold strong ground in Mexico. The quality of a medication relies entirely on the quality of the API. Developing an API requires significantly more investment in R&D than in manufacturing of the finished product. We invest heavily in R&D and we often begin planning them over 10 years before they go off patent. This helps us to offer products to clients at a much more advanced or early stage of product development. We see the biggest competition coming from Asian companies that offer their products at a low price, but they lack great services and speed to reach the market. Hetero has a 500ha chemical complex in Vizag, India that manufactures 24/7, which allows us to offer a high volume of high-quality products at affordable costs.
GURULINGA KONANUR Director General of Hetero Mexico
Regarding our OTC portfolio, our strategy is to introduce better molecules to Mexico to develop our brands and increase our market share. We launched Graneodin F, introducing a new molecule Flurbiprofen that will work along with benzocaine, which was the traditional molecule we used in Mexico. We also launched ibuprofen products to complement our paracetamol product lineup Tempra and the equivalent of our Gaviscon technology Picot, marketed under the name of Picot Adv.
ANNE ENGERANT
Senior Vice President and General Manager LATAM Health of RB
Mexico is an interesting market. Part of it behaves as an emerging market, while another as a mature one since the change in the population pyramid is more common to mature markets. As Mexicans live longer, they are much more prone to chronic neurodegenerative diseases, which will undoubtedly increase along with diabetes and cardiometabolic diseases. At the same time, there is a significant poverty rate in the country. This segment of the population is more sensitive to acute diseases, such as dengue. Apotex has invested in products for both markets through the generation of specialized strategies.
Director General of Mexico and Latin
AMÉRICO GARCÍA
America at Apotex
Fujifilm SonoSite X-Porte ultrasound system
HEALTHCARE 4.0
Digitalization of the health sector began with the most fundamental elements, such as the introduction of medical devices and then moved to more complex solutions that integrated technological advances like Big Data, AI, augmented reality, virtual reality and IoT. The next challenge for the industry is to communicate the various technologies that a business uses at various care levels and to help the company interact with other important industry players. While the development of new technologies is advancing at an accelerated rate and increasing frequency of implementation, regulation is also becoming a factor to take into account. However, there is no doubt that Healthcare 4.0 is here to stay.
This chapter shines a light on the trends that are transforming the health industry and the untapped opportunities that will continue to shape it. The chapter also presents the greatest concerns for those companies that seek to adopt new technologies and the recommendations that experts make regarding their management.
CHAPTER 5: HEALTHCARE 4.0
100 ANALYSIS: Technology: Transforming and Disrupting the Care Ecosystem
102 VIEW FROM THE TOP: Xavier Valdez, IQVIA
103 INSIGHT: Antonio Carrasco, PLM Latina
104 ROUNDTABLE: How is Your Company Disrupting Healthcare Practices?
105 INSIGHT: Alberto Wicker, Signufarma
106 VIEW FROM THE TOP: Elie Haibi, Ominé
107 VIEW FROM THE TOP: Morgan Guerra, Previta
108 VIEW FROM THE TOP: Javier Guadarrama, Health and Benefits, a Grupo Promass Company
109 VIEW FROM THE TOP: Guillaume Corpart, Global Health Intelligence
110 INSIGHT: Jorge Camargo, Ecaresoft
111 VIEW FROM THE TOP: Charles Nader, Doc.com
111 VIEW FROM THE TOP: Carlos Escalante, Pen Healthcare (Punto Pen)
TECHNOLOGY: TRANSFORMING AND DISRUPTING THE CARE ECOSYSTEM
The transformation of the health field began with its digitalization and automation. Healthcare 4.0 employs much more complex and advanced technologies, including Big Data, augmented and virtual reality, chatbots and IoT, and will eventually virtualize multiple levels of care, connect devices and move to Personalized Medicine
Technology is revolutionizing healthcare, from the patient’s home to the operating room, reshaping the healthcare landscape and creating a paradigm shift away from hospitals and institutions to be delivered virtually through telemedicine. With this shift, services are being tailored to individuals rather than being designed based on statistical averages. “Using advanced diagnostics, we can gather a specific picture of the patient and their condition. This allows us to develop medicine that is highly personalized to their profile,” says Andrés Bruzual, General Manager of Roche Pharmaceuticals Mexico.
Although digitalization is impacting all health fields, the speed with which players adapt varies greatly. “The healthcare sector is indubitably migrating toward digitalization and technology but each player is moving at its own pace,” says Miguel Nieto, President of Latin American Region of Carestream. The purpose of digitalization is also different for each stakeholder, with some seeing it as an individual process and others as a collaborative process. “We see a mixture of different systems as each player uses the best one for their own purposes. While some are investing in technology and are implementing software that favor interconnection with other systems, the result is a complex hybrid,” Nieto says.
The development of a country’s economy and markets plays an important role in the degree of digitalization and transformation of its health industry. Nieto says that “developed markets, such as Europe and the US, have
DIGITAL ADOPTION PER ECONOMIC SECTOR
Agriculture, forestry and fishing
Food products, beverages and tobacco
Accommodation and food service activities
Chemicals and chemical products
Pharmaceutical products
Human health activities
Residential care and social work activities
Electrical equipment
Wholesale and retail trade, repair
Finance and insurance
Scientific research and development
IT and other information services
Level of Adoption
Source: OECD: Measuring the Digital Transformation 2019
successfully incorporated technology and information systems into their diagnostic practices.” In comparison, other markets behave differently in the number of players that accept and how these interact with each other. “In the US, for instance, care is provided in a ‘closed’ system where tests, primary, secondary and tertiary care are supplied by a single provider,” Nieto says. “In Mexico, a patient receives primary care from one provider, testing from a different one and secondary or tertiary care with yet a different provider, which we call an ‘open’ system.” Therefore, the sum of the rules of interaction, the number of players and the dynamics of the market directly affect the level of digitalization and the adoption of technologies for industries.
Insufficient diffusion of new technologies, according to a report on Digital Technology Diffusion 2018 by the OECD, has been cited as one possible reason for weak productivity performance over the past two decades. The international organization recommends the promotion of market incentives that reinforce adoption of digital technologies and public policies that foster the adaptation of technologies, market access, fair competition and efficient reallocation of labor and capital.
SECURITY CONCERNS
The security of data and information has become a topic of great importance in recent years as the 21st century has become a witness to historic data breaches and hacks. The most recent hack involved the bank Capital One, which suffered a breach that impacted more than 100 million people, compromising information such as social security numbers, bank account numbers, addresses, credit scores and more. Other attacks include the epic breach at Yahoo in 2013 that compromised the data of 3 billion people, First America Financial Corporation’s exposure of 900 million sensitive customer files in 2019 and the well-known case of Facebook’s data breach of more than 540 million users’ records and social networks.
Different sectors of the economy have been victims of data breaches and hacks, including the health sector. According to the 2019 Annual Breach Barometer Report, more than 31 million patient records had already been breached in the first half of 2019, with hacking causing the majority of security incidents and breaching the most patient records.
Source: Accenture Healthcare Survey
Mexico ranks third for most cyberattacks in the world, just behind the US and UK, according to a 2018 Lockton México report that states that the estimated loss as a consequence of cyberattacks in the country totaled US$7.7 billion in 2017.
International standards govern the confidentiality of data and information, as well as the systems that process it. ISO 27001 is a Standard for Information Security Management Systems that allows organizations to assess risk and apply the necessary controls to mitigate or eliminate them.
ANALYTICAL FUTURE
The evolution of the health industry due to technology has gone through different processes, from Industry 1.0 to today’s iteration, Industry 4.0, which connects the IoT to manufacturing techniques, allowing systems to share information, analyze it and use it to guide intelligent actions. Among the opportunities of 4.0 technology in the
health sector is the management of health information or healthcare analytics that could improve the industry and care services. “Improving communication can help the health industry understand more deeply not only the dynamics of communication between health professionals and patients, but also to provide complementary solutions that spread throughout the industry,” says Antonio Carrasco, Director General of PLM Latina.
Information generated through IT can also be turned into valuable information that can be used by both the private and public sectors. “Information can be gathered and used to understand epidemiological trends in a country, so a company can know if an epidemic is on the horizon,” says Carrasco. The global healthcare analytics market was estimated at US$7.04 billion in 2016 and is expected to total US$53.65 billion by 2025, according to a study by Grand View Research.
Javier Guadarrama, Director General of Health and Benefits, a Grupo Promass company, says the impact from data analytics on health services has sweeping potential. “Information allows a company to understand the main uses for phone-assisted medical care, what diseases are more frequent, what are the main reasons why people call, most common age group, peak hours and the locations where these services are demanded.”
MEDICAL RECORDS ARE PATH TO SECTOR OPTIMIZATION
XAVIER VALDEZ
Regional Manager for Real World Analytics and Services of IQVIA
Q: How does IQVIA view R&D in Mexico?
A: At a corporate level, this is a fundamental area for the company because it helps us identify future releases and to work more efficiently with clients depending on their therapeutic focus. Locally, however, R&D has not evolved significantly. Our main focus has been to take advantage of global studies and research to prove a product’s efficacy. That being said, we do see a great opportunity for R&D to grow in Mexico. The country hosts institutions with global prestige that work to the highest standards. At the same time, we have a large patient population that is diverse enough to cover the different treatments we analyze.
The main area of opportunity in the country is accelerating the time it takes for protocols to be approved, together with increased certifications for hospitals and training of doctors. We estimate approximately US$6 billion is invested globally in clinical research annually yet Mexico receives only US$200-300 million. If we could attract more of these resources, doctors would benefit from better training and patients would have access to innovative treatments.
Q: How is IQVIA taking advantage of Industry 4.0 advances and what long-term impact are you expecting in the healthcare sector?
A: We are still betting on technology and the development of new solutions to improve our sales force. Our customer relationship management solution, called OCE, gives us greater control of our promotional strategy with clients and stakeholders through an omnichannel platform and helps us achieve close data integration within the different areas of the company. Big Data is a key element in our solution. This provides results based on solid analysis of the information we offer to clients and that we receive as feedback from them. From this, we can then execute appropriate business strategies.
IQVIA is a US multinational based in Durham, North Carolina. With a network of more than 50,000 employees, it delivers human data science to the health information technologies and clinical research industries
The company has invested heavily in OCE and as part of our Latin American hub, Mexico is fundamental in our approach to technology and analysis. We already have multinational clients using OCE in Mexico and we have more projects in the pipeline that we hope to consolidate in the midterm.
As the healthcare sector evolves, we see a dire need for data integration between different industry players. The government wants to make changes to how Seguro Popular operates but it may not have a clear idea of what it means to have medical records at a national level without being dependent of a particular institution. Cloud implementations are essential for this to work and to conduct efficient research related to the best treatments for each patient.
Q: How is your focus on data access impacting the evolution of the OCE platform and the development of other platforms?
A: We are merging OCE with our doctor database. We have information related to doctors’ areas of expertise, hospitals where they work and other variables that allow for segmentation based on contact preferences. This helps us create directed campaigns based on a specific treatment or an area where we want to promote a certain solution. After we receive information back from doctors, we can use that to strengthen our algorithms and further boost our campaigns depending on how doctors build their treatments or the information they wish to receive.
Data access is also a priority to generate databases that help us draw conclusions about treatments and their efficacy. At the beginning of 2018, we released a platform called Oncology Dynamics where we gather data from 250 oncologists on patients, types of cancer, treatments and how patients are responding to them. Although our database is small, it is already yielding interesting results related to treatment use and efficacy, as well as how doctors are treating complications related to a specific disease. We collected the first batch of data in March 2018 and we have been adding to that with quarterly reports.
PREVENTION THROUGH PUBLIC-PRIVATE COLLABORATION
ANTONIO CARRASCO Director General of PLM Latina
Despite the availability of technology in Mexico, organizational weakness is hampering the country’s digitalization, particularly in healthcare, says Antonio Carrasco, Director General of PLM Latina. “The main obstacle to technological transformation is not technology but how the private and public health sectors in Mexico are organized. Technologies exist in the country; what is needed is to improve infrastructure and interoperability,” he says.
PLM Latina, a leading health sciences technology company, specializes in business intelligence and digital marketing solutions through IT. According to an article by the Regenstrief Institute and published by the American Journal of Medical Sciences, the real value of information technology lies in extracting value from the chaos of information, which is PLM’s goal. “PLM Latina’s added value is its ability to transform information into valuable knowledge for companies,” says Carrasco.
At the macro level, the first step is to change the thrust of the health sector and focus more on prevention, explains Carrasco. “In general, we must focus on the prevention of chronic degenerative diseases through the collaboration of the public and private sectors.” At the micro level, Carrasco says that it is necessary to pay more attention to the relationship between the doctor and the patient.
For that reason, he believes that digital tools and PLM solutions can help doctors better understand this relationship and spread the benefits throughout the health ecosystem. “We believe that improving communication can help the health industry understand more deeply not only the dynamics of communication between health professionals and patients, but also to provide complementary solutions that spread throughout the industry.”
Carrasco highlights a PLM client to illustrate his point. The medical devices company needed to promote a urological product to the market and to medical specialists. “This company faced difficulties in positioning
its product because its device was aimed at a very small group of patients with erectile dysfunction,” says Carrasco. PLM’s experience working in the health sector in various therapeutic areas helped this company to better target medical specialists who could reach the patients who would benefit from this product. “After a patient undergoes a series of pharmaceutical processes to treat their erectile dysfunction, they become a candidate to use this medical device. PLM guided the company in better marketing its product and looked for strategies to approach men with severe cases of erectile dysfunction,” he says.
Digital tools like Big Data can also strengthen the medical care provided to patients. Carrasco believes this means that “patients not only have access to technologies but also to knowledge that improves the whole process of their care, integrally involving the entire health ecosystem.” The information generated through IT can then generate valuable information for companies. “Information can be gathered and used to understand epidemiological trends in a country, so a company can know if an epidemic is on the horizon, for example. This allows the Ministry of Health and the private sector to be ready.” He adds that real-time delivery of information is a difference-maker. “The added value of the Big Data generated by PLM is that companies receive information in real time. This makes a considerable difference for our customers compared to other service providers. PLM does not need days to generate valuable knowledge.”
PLM is a strong advocate of the patient-centric model, which is a goal in all its solutions, as well as infusing its offerings with rigorous management of quality data. Carrasco explains that PLM’s Big Data philosophy is focused on the four V’s: velocity, variety, volume and veracity. “This approach has helped PLM to handle large numbers of clinical decisions made by physicians in relation to the pharmaceutical and medical devices sectors and to understand the needs of health professionals in Mexico, with the patient as the central focus,” he says.
HOW IS YOUR COMPANY DISRUPTING HEALTHCARE PRACTICES?
XAVIER VALDEZ Regional Manager for Real World Analytics and Services of IQVIA
CHARLES NADER Co-founder of Doc.com
Technology is increasingly penetrating every economic sector and healthcare is no exception. Its defenders are looking to integrated healthcare solutions that connect every aspect of care, from the moment the patient is admitted to remote at-home follow-ups. Technology is advancing rapidly, raising the issue of laws and public regulators’ capacity to maintain pace. With the introduction of Big Data, privacy issues are also in the spotlight. But there is little doubt that Healthcare 4.0 is here to stay, altering the delivery and tracking of treatments, measuring results and encouraging proactivity in a prevention-first paradigm.
We are still betting on technology and the development of new solutions to improve our sales force. Our customer relationship management solution, called OCE, gives us greater control of our promotional strategy with clients and stakeholders through an omnichannel platform and helps us achieve close data integration within the different areas of the company. Big Data is a key element in our solution. This provides results based on solid analysis of the information we offer to clients and that we receive as feedback from them. From this, we can then execute appropriate business strategies.
Disruption in healthcare will be broad and will come in different ways. We hope to be among the first lines of attack regarding education. For example, the overuse of antibiotics is now a big problem. Through our platform, we can provide the right information and advice to a patient regarding next steps and whether antibiotics are truly necessary. Ignorance is a major problem and auto-medication is the cause of many deaths. It is important for patients to consult with someone who has the expertise and authority to prescribe medication. Perhaps in the future, artificial intelligence will be able to make those decisions for the doctor but we are not there yet.
JAVIER GUADARRAMA Director General of Health and Benefits, a Grupo Promass company
Health and Benefits’ telemedicine solution provides primary care to the population, which represents over 80 percent of the demand for health services. The remaining cases are referred to health institutions that can treat them appropriately. We have agreements with the main healthcare providers across the country, benefiting all our affiliated patients. When an operator detects the need to direct the patient to another level of care, we make the appointment with a specialist. In case of an emergency, we request an ambulance to transfer the patient to a hospital, follow up on the patient’s arrival at the hospital and then follow up again at the end of their care.
PATIENT ADHERENCE THROUGH PERSONALIZED SERVICES
ALBERTO WICKER CEO of Signufarma
Low patient adherence to medication regimes raises healthcare costs and reduces the efficacy of the healthcare system as a whole, says Alberto Wicker, CEO of Signufarma. Yet, neither the public nor private sector is seriously addressing the issue.
While great efforts are being made to bring doctors, hospitals and medications closer to a larger number of people, all these measures fail if patients do not take their medicine. “We believe in the efficacy of medications and that the significant investment behind them will lead to a positive effect for the patient,” says Wicker. “But whatever benefits patient could get from their medications will be lost if patients skip them.”
Low patient adherence is a significant problem. The journal US Pharmacy reports that about 50 percent of US patients taking medication for chronic ailments fail to adhere to treatment. Moreover, the failure to adhere to treatment accounts for up to 50 percent of all treatment failures and leads to 25 percent of hospitalizations in the US. Wicker believes that addressing low patient adherence is a simple strategy that will benefit patients, healthcare systems and medicine manufacturers.
Signufarma is a service provider for effective patient support programs that has worked in healthcare sector for 25 years. The company specializes in support programs that help patients adhere to their treatment and it also develops software to distribute pharmaceuticals to patients and programs to measure the quality of life of patients. Signufarma has worked with Roche, Amgen, Bristol Meyers Squibb, Novo Nordisk, Shire and AstraZeneca, among others, on developing programs to monitor medication use for many conditions, including rheumatoid arthritis, oncological and rare diseases. Signufarma operates in Mexico and several countries in Central America, Colombia, Ecuador and Peru, where it introduced programs that closely monitor patient experience and allows the company to offer several benefits specific to the patient’s therapeutic needs.
“We monitor patient’s adherence to treatment in the manner the patient prefers: phone, text messages, personal visits or social media. We have also developed a psychology
department that studies the main treatment abandonment causes to develop contingency plans, emotional support lines and coaching. We also provide support to the patient’s family. No one is truly prepared to address a degenerative, chronic disease so our goal is to support them,” says Wicker.
To measure adherence, Signufarma developed software that monitors all steps of the patient’s journey and can predict points at which a patient might abandon treatment. “In these instances, we follow up with them directly so this can be avoided. For instance, if a patient misses a programed diagnostic test, an alarm flares up in our system and we contact them directly.” To achieve its goals, Signufarma created numerous alliances with retailers, clinical laboratories, doctors and hospitals. The company also uses social media to monitor patients and track their experience. As Wicker says, by knowing a patient’s wishes, Signufarma can personalize its solutions. “During the past few years we have used information from social networks and our own platforms to ensure that our solutions are convenient, accessible and liked by patients. Every patient is different so we are implementing mass customization to adapt our solutions to each patient,” he says.
The results speak for themselves, Wicker says, pointing to oncology as an example; the company’s software helped patient adherence increase to 94-95 percent. “We have also built formulas that allow us to measure the patient’s response to treatment and measure the treatments’ ROI. We also helped pharmaceutical companies to optimize their resourcing by helping them identify the areas that need more attention, for instance by educating patients.”
Signufarma began operations with treatments for hypertension and hypercholesterolemia but gradually expanded into areas in which it believes it could have a greater impact, such as medical specializations. “Eighty percent of our operations addresses medical specializations and the rest are geared to general medicine. However, this is about to change as the pharmaceutical sector is increasingly aware that it has to strengthen its brands to assure a return on investment.”
PATIENT HISTORY AT A GLANCE FOR BETTER TREATMENT
ELIE HAIBI Co-founder of Ominé
Q: What needs is Ominé seeking to address in the health sector?
A: Compared to sectors such as banking and insurance, the healthcare industry is still lagging in terms of digitalization; information is not yet properly valued. Many hospitals and other healthcare institutions still function in the traditional way, following a physical paper bureaucracy. These players have the means to go digital but face a cultural obstacle. People have difficulty understanding that healthcare can be translated into electronic data because they perceive healthcare as only the immediate clinical examination and the personal attention the patient receives. Yet, technology can improve even these aspects of care.
We want to take the industry beyond paperless operations. In the public sector, for instance, doctors dedicate 15-20 minutes for every appointment but most consults end up being five to 10 minutes. The reason is the large line of patients waiting outside. Because doctors do not have access to the patient’s full medical records, they also need to spend time asking questions before they can address the symptoms. This forces them to make important decisions based on incomplete information. Access to an electronic database would allow doctors to check the patient’s history at a glance and make the right decisions. As a result, patients would receive better treatments and doctors would have some of the burden lifted off their shoulders. In general, the care process lacks information that is timely, up-to-date and relevant to each activity, impacting both care professionals and patients. We want to address that issue.
Q: How can Ominé improve the experience of both patients and medical professionals?
A: Digital transformation is not our goal but the means to an end. The goal is ensuring a better experience for all parties through greater efficiency and higher care quality.
Ominé is a patient-centric healthcare information platform that seeks to impact the quality of care and deliver value to patients, doctors, hospitals and healthcare personnel through digital transformation
Besides providing details on patient records, the Ominé platform also allows communication between doctors of different specialties: the care team. Using a virtual space, they will be able to share their advice and perspective, which means decisions will not be based solely on the knowledge of a single person but complemented and validated by their peers. The result will be a more unified and aligned care strategy that will lead to better results and fewer errors.
Patients and their family are left with a considerable part of the care process and they often have to make a wide range of decisions, from nutrition to scheduling labs, without the proper guidance or training and without anyone to ask when they need an answer between two medical appointments.
Q: What other benefits can Ominé provide to the healthcare sector?
A: Even the most prestigious Mexican hospitals suffer due to a lack of coordination, which translates to operational errors, prescription errors and mistakes in dosage and administration of medications. Medical services without good coordination and information are simply a disaster. In the US alone, between 200 and 400 people die every day due to poor quality care, as well as negligence. Digital platforms provide all the necessary information throughout the care process to ensure appropriate decisions are made.
Although the biggest problem is one of management and operational quality, in many cases, bad decisions are made simply because health professionals do not have access to the patient’s complete record. A complete analysis of the patient’s history can elucidate problems that would not be visible through a simple examination of symptoms. A good example of this would be chronic diseases like diabetes. A one-time test of glucose levels is never going to provide the full picture. This patient’s health is not a photo; it is like a video that shows an evolution in glucose levels in relation to physical activity and nutrition. It is hard to give accurate advice based on incomplete information and not every doctor is an expert in diabetes. In most cases, patients with diabetes are treated by general practitioners.
INTEGRATED SYSTEM PROMISES SAVINGS FOR PATIENTS, PAYERS
MORGAN GUERRA CEO of Previta
Q: How does Previta use technology to improve health practices?
A: Previta developed e-HealthTracker, a population health platform that provides a wide range of services designed to monitor and support patients in all stages of a disease. It can be adapted to follow many conditions, including diabetes, cardiac and immune diseases as well as the side effects related to other issues like tobacco consumption, hypertension and diabetes.
We can measure a person’s risk factors to help prevent obesity, diabetes and hypertension. If this person already suffers a disease, through remote patient monitoring we avoid complications.
Q: How does Previta’s technology benefit patients?
A: Our most complete service is Victoria, a homemonitoring kit for people with heart failure. This disease is much more expensive for healthcare systems than cancer since patients often survive for a longer period, although with a low quality of life and with numerous hospitalizations. Victoria provides health devices to measure and monitor patients, turning their homes into a “virtual hospital.”
Our contact center receives and evaluates this information daily and if a deviation from normal ranges is detected, the health coach at the contact center notifies the patient’s cardiologist. Victoria has been highly effective in saving these patients from the need for hospitalization.
Victoria consists of a scale, a barometer and a heart monitor fully integrated into a tablet. Health data is automatically recorded and stored in the cloud so it can be shared with the patient’s doctor. Moreover, if the patient skips a measurement for any reason the equipment sends a reminder to their phone or to a relative or physician. While the different equipment that composes Victoria is sourced from around the world, the system that brings it together was developed in Mexico by Previta.
Q: What are the main challenges when convincing payers to use this system?
A: The first step is to convince the payer about the solution and the return on investment they will receive. Then, we must convince patients and their families that the technology can help them. Being diagnosed with a chronic disease is often a shock to patients.
The third step is to get doctors to buy and see this monitoring services as an ally. The appropriate treatment of these patients requires collaboration among different specialists, laboratories, hospitals and the payer, whether a public or private institution. While some may believe that these systems can only be used in major cities, that is not true, thanks to the widespread availability of smartphones and 3G that allows technology to be used even in rural areas.
Q: How do the Mexican healthcare sector and private entities benefit from this system?
A: The incorporation of remote patient monitoring into the healthcare system following international standards leads to stronger prevention strategies that would benefit the patient’s health and provide long-term savings for the payer. Our products allow patients to improve their quality of life, which reduces unnecessary hospital expenses. For instance, about every six months, patients with heart failure usually suffer a decompensation that normally would lead to a week of hospitalization.
These hospitalizations are very expensive for the insurer. By monitoring the patient’s vital signs, we can detect decompensation early in the incident and channel the patient to their cardiologist before they require hospitalization. With proper care and an adjustment of the medication, it is possible to prevent hospitalization, which results in significant savings for the payer and better care for the patient.
Previta is a Mexican developer of software systems related to the remote monitoring of patients and consulting-room management. It also focuses on prevention of diabetes and related diseases through a wellness platform and medical checkups
TELEMEDICINE THE FUTURE TO BETTER, GREATER HEALTH ACCESS
JAVIER GUADARRAMA
Director General of Health and Benefits, a Grupo
Promass Company
Q: How does Health and Benefits (H&B) use information and communication technologies to bring healthcare services closer to the population?
A: H&B pioneered the use of information technology and communications (TIC) to provide healthcare services to the Mexican population. We have been offering our services for over 15 years and our affiliates account for more than 20 million people across the country. H&B uses telephonic assistance services and in the past year we are happy to share that we have not had a single incident and our quality surveys demonstrate satisfaction among our affiliates. Our latest survey, conducted by the Social Security Institute and involving 2 million people, confirmed a 94 percent rate of satisfaction and positions Health and Benefits as a strong telemedicine services company.
When we launched telephonic medical assistance, the company discovered that the majority of patients wrongly believed doctors had the appropriate training to provide nutritional and psychological advice. H&B saw this as an opportunity and opened a new area to offer specialized nutritional and psychological services. Nutrition is an integral element of an individual’s overall health. H&B uses the same technological mechanisms and customized service to provide nutritional and psychological assistance, reinforced with a digital platform named TeleSalud where patients can register their weight, size and height to receive information about body mass and suggest a goal they must reach.
Q: How does H&B provide its customers with an added value beyond digitalization?
A: Our core added value is in promoting change. H&B motivates its patients to take co-responsibility in the management of their health. We have extended our digital platform, called TeleSalud, to encompass all the services
Health and Benefits specializes in providing solutions and management services for the health sector through a network of doctors, hospitals, laboratories, pharmacies, optical clinic and specialized clinics
we offer, such as psychological, nutritional, medical and dental solutions. For example, previously H&B used a thirdparty application to provide teleconference consultations but the company developed its own digital tool for that. Our services are offered all across the country and in the near future, we expect to expand our services to Central America.
Q: What are the main needs your technology solves for clients?
A: Mainly we provide primary medical care to our members, but also nutritional and psychological support. The psychological care service is a very successful niche and it is growing rapidly because patients feel more secure in having a conversation when it is not face to face. Phone assistance provides patients with a greater facility to express how they feel and what they think. This allows people who live with a mental illness to feel more involved in their health and to have access to comprehensive care. Another example of the benefits of our technology is a device that takes blood pressure and glucose levels in real time and sends the data to the cloud via Bluetooth to be recorded in the patient’s clinical record. This tool promotes greater control for the patient but also gives the doctor the facility to follow up. All our solutions are based on international health recommendations, which gives our digital platform the added value of portability. This means patients own their electronic file and have the power to decide with whom and how to care for their health.
Q: With a clinical information base of 20 million people, what opportunities does H&B see in Big Data?
A: H&B is certified in ISO 270001 to protect all information. It also adheres to ethical and privacy standards. The company knows medical information can be sensitive and it is careful when using it. We have over 15 years of experience that has provided the company with a great deal of information but also with the necessary expertise to manage it. We are integrating this information to identify business opportunities and develop the appropriate technologies that can continue bringing access to healthcare closer to the population.
DISRUPTING HEALTHCARE TO EMPOWER PATIENTS
GUILLAUME CORPART Managing Director of Global Health Intelligence
Q: What trends are transforming the healthcare industry in Mexico?
A: This is a year of changes and the industry has to prepare for them. All our clients are wary of the changes in the sector. Companies working mainly with the public healthcare sector have been hit by recent tenders, which opened the doors to countries with which Mexico has no FTAs. These countries manage lower prices, which forces local manufacturers to lower their own prices, reducing their margins. The public healthcare sector has also halved its budget. This is a blow to local manufacturers of pharmaceutical and medical supplies, which are now looking for ways to optimize their production to reduce manufacturing costs.
Companies that sell mainly to the private sector will not be as affected. For that reason, many manufacturers will try to increase their focus on the private sector, specifically in small and medium-sized hospitals.
Q: How is Global Health Intelligence helping companies adapt to the changes in the market?
A: Many companies will have to change how they measure themselves against competitors to increase their market participation. This will be increasingly important now that public tenders have been opened to other countries. To support our clients, we are developing a series of products tailored to different companies based on their size and market participation. During 2019, we have refined our ShareScope tool, which allows companies to measure and track their position in the market.
Q: What market insights has the company identified through its platform HospiScope?
A: The number of beds is an important indicator of the size of a hospital in terms of patients and of its capabilities to invest in technology. A hospital with less than 20 beds does not have the ability nor the financial capability to acquire sophisticated diagnostics equipment, which usually amounts to over US$500,000. Developed economies like the US and Europe have an average hospital size of 160 beds. In Latin America, the average is 45 beds and Mexican hospitals have an average of 50 beds. Public Mexican
hospitals are much larger, with an average of 120 beds, while private hospitals are much smaller with only around 17 beds per hospital. Having so many small hospitals affects the country’s overall potential for investment in healthcare and technology.
We are seeing a growing number of smaller hospitals that focus on a select number of medical procedures and often focus on ambulatory surgery. These were created to address the needs of the middle class, as many individuals are willing to pay to gain access to private healthcare but they cannot afford larger hospitals such as Hospital Ángeles or Hospital ABC.
Q: What benefits does the trend toward ambulatory services bring to patients and the healthcare system?
A: About 60 percent of healthcare services are provided by the public sector so budget cuts will have a deep impact. Moreover, demand continues to grow alongside the population. These trends will impact the sector on two fronts: quality and wait times. Mexicans have a significant problem accessing quality healthcare services at the moment they need it. For instance, people with a cardiovascular disease cannot wait six months to address their problem.
Under these circumstances, ambulatory surgery plays an important role as it streamlines surgical services, allowing hospitals to treat more patients and to provide quality services. Leaving a patient to recover in the hospital is a bad use of resources because the bed, doctors and nurses cannot focus on another patient. Letting patients recover at home and helping them leave the hospital as soon as possible allows for a more efficient use of resources. Without ambulatory surgery, the healthcare system would be unable to provide care to the growing population.
Global Health Intelligence conducts market research to provide strategic data on health infrastructure in emerging Latin American and Asian markets. The company offers four main services: HospiScope, ShareScope, In-Scope and SurgiScope
ADAPTING TECHNOLOGY TO THE NEEDS, LIMITATIONS OF EVERY CLIENT
JORGE CAMARGO Co-CEO and Co-founder of Ecaresoft
Developing solutions to increase productivity and efficiency in healthcare goes beyond just introducing new technology. Systems must adapt to clients of all sizes and sometimes even keep some of the old ways of doing things, says Jorge Camargo, Co-CEO and Co-founder of Ecaresoft.
“To democratize technological solutions is to make them accessible to all clients,” he says.
According to Camargo, health clinics with under 20 beds, which comprise a large portion of health providers in the country, have not been able to adopt solutions to improve their businesses and will struggle to do so in the next few years. Reasons for this are the average costs of investing in advanced technological systems, as well as their complexity.
“There is a lack of incentives for this transformation in Mexico,” he says.
“To democratize technological solutions is to make them accessible to all clients”
The solution is to find more flexible technology models that can adapt to clients’ needs and conditions, which can also be rapidly implemented and require minimal training. Big hospitals have a larger budget and often feel a greater need to organize their operations more efficiently because of their complexity. Small clinics have less staff but are already dealing with technical limitations, says Camargo. “The kind of improvements that digital platforms can introduce, such as automating administration and improving communication between the patient and doctor, can greatly improve health services at these small institutions.”
Productivity in the health sector is hard to define, however. In other industries, such as agriculture and manufacturing, results can be easily measured in numbers. “In healthcare, it is not as simple as saying we are increasing the number of surgeries from 10 to 15,” says Camargo. The focus, then,
must be on maintaining the level of care and the safety of operations. “Automating administrative processes allows the hospital to lower costly hours and invest in other areas, both in terms of attention to patients and distribution of financial resources.”
Most patients go to the doctor, then undergo several laboratory tests that are sent by email to the patient who has to send them by email to the doctor. “This is not a particularly efficient model,” says Camargo. With a digital platform, results could be registered in the patient’s file immediately by either the patient or the laboratory. “The same platform can be used to plan consultations, update a patient’s medical history and receive prescriptions from the doctor, all processes that normally take time from the patient and the hospital staff.” Administrative changes do not have to involve “super-intelligent algorithms,” says Camargo. Sometimes, paper is the easiest solution. “In the short term, paper may not be too bad for certain tasks. However, the problem is when certain activities accumulate.” Ecaresoft wants to eliminate those peaks without creating a barrier between the doctor and patient. “Doctors must not end up looking more at a screen than caring for the patient,” he says.
Camargo mentions WhatsApp as a simple example to maintain contact between patients and doctors. Digital communication channels even allow doctors to treat patients when they are available. “The patient can send a picture or a video and the doctor can then respond 20 minutes later with instructions. This can eliminate the need for clinical visits,” he says. There is also great potential for insurance companies to offer their plans digitally. “Currently, inefficiency in the provision of insurance policies is a key factor behind rising prices and thus a barrier for insurance penetration in Mexico,” says Camargo. Ultimately, technology is flexible and it can be adopted as a whole or in parts, depending on the needs of the company. Tools can be combined and adapted to each company’s budget and requirements, increasing access and reducing the financial burden. Regardless, “the benefits of technology outweigh the initial investment required to implement it,” says Camargo.
DIGITALIZATION: ROAD TO HEALTH ACCESS
CHARLES NADER Co-Founder of Doc.com
Q: How is your company disrupting healthcare practices and what will this mean for the long-term future of healthcare?
A: Disruption in healthcare will be broad and will come in different ways. We hope to be among the first lines of attack regarding education. For example, the overuse of antibiotics is now a big problem. Through our platform, we can provide the right information and advice to a patient regarding next steps and whether antibiotics are truly necessary. Ignorance is a major problem and auto-medication is the cause of many deaths. It is important for patients to consult with someone who has the expertise and authority to prescribe medication. Perhaps in the future, artificial intelligence will be able to make those decisions for the doctor but we are not there yet.
Efficiency is also lacking in the health sector. Hospitals are overburdened and, in many cases, receive people who should not be there. This affects people who do need hospital care. With our app, many people can receive healthcare without having to go to a hospital or even without having an insurance policy. We are not claiming that we are going to solve every health problem, but our system can help patients make better choices. The data we gain from our customers allow us to better analyze what is happening in the sector.
Doc.com is a Mexican online platform that allows patients to consult doctors and receive advice, referrals and prescriptions. The platform is available in 24 countries in the Americas and is expanding to Europe, Africa and Asia
TECHNOLOGY AS A CATALYST FOR OPTIMAL PERFORMANCE
CARLOS ESCALANTE CEO and Founder of Pen Healthcare (Punto Pen)
Q: Who are Pen Healthcare’s clients in the health sector?
A: In the private sector we work with pharmaceutical companies developing patient support programs (PSP) and with insurance companies in offering disease management programs and case management. For the public sector, we provide electronic health records (EHR), epidemiology platforms, health assistance by telemedicine services and communication and engagement strategies. Our most powerful tool is the PHENM (Personal Health Engagement Network Management). It is a platform we use with diabetes and hypertension patients through which we have achieved above 60 percent of patient control, thus significantly reduced complications. We achieve this through patient empowerment and treatment adherence.
Q: Pen Healthcare offers a wide array of technological solutions and services. How does the company and its products make a difference in Mexican healthcare?
A: We go beyond offering health information systems and services to clients; we offer solutions that are helping to transform the future of Mexican healthcare. The long-term goal is to create integrated healthcare networks. We work hand-in-hand with other companies and government entities to build data interoperability between all healthcare parties.
Pen Healthcare has provided digital marketing solutions to pharmaceutical companies and public and private service institutions for 20 years. It has four services: Health Systems, Health Engagement, Health Assistance and Health Innovation
Dräger transfer monitor for IC unit
MEDICAL DEVICES
Mexico is the No. 1 exporter of medical devices in Latin America with more than 40 production plants and participation in 75 medical specialties. However, many Mexicans still do not have access to these products. The rapid technological development in the medical devices sector creates possibilities for collecting and analyzing enormous amounts of information to create tailored alternatives for healthcare suppliers and payers. While beneficial, this also increases vulnerability to cyberattacks. Nonetheless, it is expected that the impact of technologies, such as autonomous surgical robots, 3D printers, assisted surgeries with augmented reality, artificial intelligence, biostamps and ultrasound therapies, will revolutionize the future of prevention, diagnostics, treatment and patient care.
Medical Devices shares the perspective of key industry players regarding the trends, challenges and opportunities that will revolutionize the medical devices industry and how different players will participate in this new scene.
CHAPTER 6: MEDICAL DEVICES
116 ANALYSIS: Technology Key to Better, Greater Access to Healthcare
118 INFOGRAPHIC: Medical Devices Production and Exports on the Rise
120 VIEW FROM THE TOP: Alejandro Paolini, Siemens Healthineers Mesoamerica
121 VIEW FROM THE TOP: Pablo Bufano, Dräger México
122 VIEW FROM THE TOP: Miguel Nieto, Carestream
123 VIEW FROM THE TOP: Enrique Giraud, Fujifilm México Javier Giraud, Fujifilm México
124 VIEW FROM THE TOP: Juan Pablo Solis, Becton Dickinson Mexico, Central America and the Caribbean
125 VIEW FROM THE TOP: César Carrasco, Philips Mexico
126 VIEW FROM THE TOP: Jesús Huerta, DiaSorin
127 VIEW FROM THE TOP: Marcio Mazon, Getinge Latin America
128 VIEW FROM THE TOP: Alejandro Von Mohr, Atramat
129 VIEW FROM THE TOP: Carlos Jiménez, B. Braun Mexico
130 TECHNOLOGY SPOTLIGHT: Atramat: 50 Years of Suturing Quality
132 VIEW FROM THE TOP: Roger Brownrigg, Johnson & Johnson Medical Devices México
133 VIEW FROM THE TOP: Juan Dovarganes, Arroba Ingeniería
134 VIEW FROM THE TOP: Rodrigo Díaz de Vivar, Roche Diabetes Care México
135 VIEW FROM THE TOP: Miguel Soto, Mindray Medical México
136 VIEW FROM THE TOP: Germán García, Smith & Nephew
137 VIEW FROM THE TOP: Mauricio Valero, Linet Group in Mexico
138 INSIGHT: José Ramón Velasco, Essity Medical Solutions Mexico
139 VIEW FROM THE TOP: Luis Garduño, Art-Técnica
TECHNOLOGY KEY TO BETTER, GREATER ACCESS TO HEALTHCARE
Technology is a disruptor that more often than not introduces positive change. But new technologies often also translate to higher initial costs, making it necessary for hospitals and developers to work together to develop solutions that will result in long-term savings
Mexico has built a strong medical devices industry that meets the needs of its population and exports products to major markets worldwide. The country is the eighthlargest exporter of medical devices in the world and No. 1 in Latin America, according to the Mexican Association of Innovative Industries of Medical Devices (AMID). In 2017, the country’s medical devices production was valued at US$13.81 billion and exports at US$9.39 billion, according to ProMéxico.
“Mexico is already an important player in the medical equipment industry,” says Pablo Bufano, Managing Director of Dräger México. Despite the lofty standing, the medical devices manufacturing sector represents only 0.21 percent of the country’s GDP, according to AMID, a figure that illustrates the industry’s significant potential. The medical devices sector was valued at US$403 billion in 2017, according to EvaluateMedTech, and it is expected to be worth US$522 billion by 2022. The country’s main exports are odontological, surgical and medical instruments.
The International Medical Device Regulation Forum (IMDRF) defines a medical device as any “instrument, apparatus, implement, machine, appliance, implant, reagent for in vitro use, software, material or other similar or related article” that can be used for the treatment, diagnosis, prevention, monitoring of injuries or diseases. It also refers to tools that replace anatomy or a physiological process, controls conception or provides information related to the human body. These characteristics point to a broad
range of products ranging from sutures to implants and diagnostic equipment, both for treatment and diagnosis.
A number of factors play into the country’s favor when it comes to the manufacturing industry, including a young and well-educated workforce, a strong manufacturing arm and close proximity to the largest market for healthcare products. The US is Mexico’s largest buyer of exports in the medical devices sector, which speaks to the untapped opportunities in the region. “Mexico is exporting more than 90 percent of its products to the US, which obviously means the country is not looking at the rest of the Americas. That is an aspect to correct if Mexico wants to be relevant in Latin America,” says Bufano.
While the medical devices industry only represents a small part of Mexico’s GDP, its importance goes beyond economics. Medical devices can play a key role in the entire healthcare system, explains AMID, due to their role in the diagnosis, treatment, prevention and monitoring of a disease. As the number of chronic diseases related to aging and obesity shows no sign of abating, the healthcare system will face an ever-growing burden to provide healthcare for these growing number of patients. As a result, an integral approach to healthcare through every stage of the disease will be necessary to approach this problem. Medical devices can play a key role at many stages of the problem.
TRENDS
Due to its value, the healthcare industry has become increasingly attractive for major technology developers such as Google Ventures, Microsoft, Apple and Amazon. The availability of data that can be used for detection, prevention or treatment is another factor. Deloitte states that a third of the world’s data is generated in the healthcare industry and technology companies can use this data for a broad range of applications. For instance, Google’s DeepMind Health uses AI for the development of solutions that offer better and faster detection of diseases and their treatment. In July 2019, the company announced a technology that uses AI to predict acute kidney injury up to 48 hours before it happens, giving doctors a significant head-start to address this lifethreatening disease.
Source: McKinsey
The use of AI in healthcare appears to be taking off with a growing number of companies perceiving its potential. The AI for healthcare market is expected to be valued at US$6.6 billion by 2021, according to BGV. This technology has gradually made its way to Mexico. For instance, late in 2018, Fujifilm Medical System allied with South Korea’s Lunic and Mexico’s Salud Digna to implement a pilot project that will place five of Fujifilm’s picture archiving and communications systems, known as PACS, equipped with the company’s AI technology in Salud Digna’s clinics. The equipment will be used by about 20 radiologists who will provide feedback to evaluate the equipment’s worklist prioritization features in a real-life setting.
The project’s ultimate goal is to optimize the productivity of radiologists. “Our goal is to have a positive impact on the work of radiologists in three ways: helping them to prioritize patients, streamlining information through Big Data applications and developing more precise imaging solutions that require only one take to avoid radiation overexposure,” says Javier Giraud, Medical Systems Vice President at Fujifilm México.
Besides improving many areas of healthcare, technology can help to address some of Mexico’s most pressing problems and support strategies to increase access. “Mexico has a limited doctor base, which makes it an ideal candidate to use AI to grow and improve clinical diagnostics at health institutions,” says Giraud. Mexico has only 2.4 doctors per 1,000 habitants, less than the OECD average of 3.4. Moreover, most doctors in the country are clustered around the major metropolitan areas of Mexico City, Guadalajara and Monterrey, forcing patients in rural areas to travel long distances to visit a specialist.
Many efforts have been made from public and private organizations to increase access in rural areas. For example, Grupo México’s Dr. Vagón uses a train to bring specialists and diagnostics and treatment equipment to rural communities in 24 states. While initiatives of this
kind have greatly contributed to increased access, there is a limit to the reach of such solutions. “We cannot build a hospital in every town in the country. There is not enough money to build so many projects or to properly equip them. Similarly, there are not enough doctors and nurses to work in every municipality,” says Roger Brownrigg, Vice President Regional of Johnson & Johnson Medical Devices México.
Under these circumstances, technology can be of great help. “Technology can allow greater access to specialists to more individuals, which will be increasingly useful given the rise in chronic-degenerative diseases,” says Marcos Pascual, Commercial Director of ANAFARMEX. During past years, telemedicine, meaning health at a distance through information and communication technologies, has been gaining strength in the country thanks to efforts from both the public and private sectors. To oversee the use of telemedicine in the country, the Ministry of Health created the National Center of Technological Excellence in Health, which now employs 4,300 specialists in many areas to provide care for over 3 million people who may live too far away from a hospital.
SMALLER BUDGETS
While technological solutions are gradually penetrating the Mexican market, there are challenges to overcome, including the country’s low investment in healthcare. “In general, in Mexico, we spend very little on health services and a lot on the administrative side of healthcare,” says Carlos Jiménez, Director General of B. Braun Mexico. Moreover, the budget cuts implemented by the federal administration’s austerity goals have hurt healthcare spending at many public healthcare institutions across the country, leading to a shortage of medications, doctors and medical supplies.
To address these smaller budgets, many companies are changing their approach to the healthcare sector. “Today, our focus has evolved from products and services to solutions. Instead of just focusing on technology, this new approach has broadened our vision by putting patients front and center and integrating our products and services to offer a holistic solution,” says Brownrigg.
The adoption of integral solutions for many areas of healthcare can be a useful strategy to address Mexico’s growing healthcare problems brought about by the rising rate of chronic diseases. Within these strategies, medical devices can play a pivotal role thanks to their versatile use across healthcare. “The idea is to create a more integral environment that considers prevention, diagnosis, treatment, rehabilitation and reincorporation to normal life,” says Brownrigg.
MEDICAL DEVICES PRODUCTION AND EXPORTS ON THE RISE
Mexico has climbed the ranks to become a manufacturing hub for medical devices. The country is now the eighth-largest exporter of medical devices and the No. 1 exporter of medical devices in Latin America and the largest supplier to the US.
Mexico is the eighthlargest exporter of medical devices in the world and No. 1 in Latin America
Mexico had almost 2,500 medical devices manufacturers in 2017, producing US$13.81 billion worth of products. The sector is expected to maintain the 7.9 percent annual growth rate it has enjoyed for the past 10 years.
MEXICO'S EXPORTS (US$ billion) AND FOREIGN INVESTMENT IN MEDICAL DEVICES (US$ million)
Production of medical devices represented US$13.81 billion and exports amounted to US$9.39 billion in 2017
Exports Foreign investment
Mexico registered 2,494 medical devices businesses in 2017, most of them located in Mexico City, State of Mexico, Baja California, Morelos, Jalisco, Sonora, Chihuahua, Coahuila, Nuevo Leon and Tamaulipas.
Mexico is the No. 1 supplier of medical devices to the US
MEDTECH, ARTIFICIAL INTELLIGENCE AND INTERNET OF MEDICAL THINGS (IoMT)
The Internet of Medical Things, referring to the interconnectivity of medical devices to collect and analyze data, was valued at US$41 billion in 2017 by MarketsandMarkets and is expected to rise to US$158 billion by 2022.
ADVANTAGES AND DISADVANTAGES OF IoMT Advantages Disadvantages
Accessibility Security vulnerabilities
Low costs per patient High initial cost Higher efficiency Lack of standardization across systems VALUE OF IoMT MARKET IN 2017 AND 2022 (US$ billion)
PATIENT'S POTENTIAL ACCEPTANCE OF AN AI ASSISTANT
Cancer treatment advisor
Doctor replacement
Blood sample tester
Customized fitness support
Heart rate monitor
Health coach
Mexico exports medical devices mainly to the US, Italy, Germany and France
MAIN MEDICAL SUPPLY DISTRIBUTORS FOR PUBLIC INSTITUTIONS BETWEEN 2012-2018 (MX$ million)
MANUFACTURING COSTS OF MEDICAL DEVICES COMPARED TO THE US (percentage)
Source: ProMéxico, Global Trade Atlas, HIS, FDI Markets, INEGI, SE, KPMG, PwC
2017 2022
DEMOGRAPHIC CHANGES IMPACT TECH DEVELOPMENT
ALEJANDRO PAOLINI
General Manager of Siemens Healthineers Mesoamerica
Q: How is Siemens Healthineers shaping the future of the medical imaging and diagnostics segments in Mexico?
A: We are convinced that innovation and technology are the keys to optimizing global healthcare systems and fully improving care for all people. For more than a century, Siemens Healthineers has pushed the boundaries of medical technology with a broad solutions portfolio. Our digital technologies enable healthcare providers to increase the value of their journey while expanding precision medicine, thus transforming care delivery and improving patient experience. We are working closely with different players from the healthcare sector to find new opportunities and introduce new business models that can improve the quality of healthcare in Mexico.
We are also introducing new technologies to the country: our ACUSON Sequoia ultrasound and our Biomatrix MRI.
ACUSON Sequoia is a remarkably fast, fully focused B-mode imaging system with no degradation of near-field or far-field resolution. Biomatrix, on the other hand, is an innovative and exclusive technology that automatically adapts to the patient’s anatomical and physiological characteristics. Biomatrix’s sensors capture respiratory and head motions, boosting consistency in the images and helping the user to select the optimal exam strategy. This combination ensures high-quality results.
Q: What are the challenges and opportunities in the market given the goals of the federal administration to increase healthcare services?
A: It is very important to focus on improving healthcare in the country. Mexico invests around 6 percent of its GPD in healthcare, while developed countries invest 9 percent or more. There is much to be improved — infrastructure, hospitals, equipment and systems — so Mexicans can access quality healthcare. There is also a great need to increase
Siemens Healthineers has over 170 years of experience and 18,000 patents registered worldwide. Its portfolio includes medical imaging, laboratory diagnosis and advanced therapies, technological and digital solutions
private investment in healthcare, otherwise, the gap will not be filled. The increasing aging and growing population, as well as the prevalence of chronic-degenerative diseases are making healthcare a priority worldwide. Mexico should not be an exception. Besides innovation, we need to create new partnerships and business models that offer clinical, operational and financial advantages for our customers.
Q: How will Siemens Healthineers’ ACUSON Sequoia change diagnostic practices in Mexico?
A: Mexico has the second-highest OECD obesity incidence among adults at 33 percent of the total population. However, this problem does not only affect Mexico but more than 600 million people around the world. Imaging patients with different sizes and characteristics is normally a challenge. Siemens Healthineers designed the new ACUSON Sequoia to adapt to the bioacoustics variations of each patient, including tissue density, stiffness and absorption. This platform has unique features that allow up to 40cm of penetration with high-resolution images, reducing the need to repeat scans, unclear diagnoses and contributing to more confident results.
Q: How is digitalization changing healthcare practices and how can it be implemented in Mexico’s fractured system?
A: Digitalization in the healthcare sector is already a reality. AI, Big Data and healthcare analytics have improved operations and management of laboratories and hospitals and have benefited the patient, allowing faster and more accurate diagnostics with more personalized and less invasive treatments.
In Mexico, we can use digitalization to improve the patient experience, prioritizing complex cases that require more attention and avoiding unnecessary interventions. For example, data analytics can be implemented to prevent diseases and to determine the patient pathway. It is possible to use digitalization to increase efficiency, productivity and improve healthcare processes. Information is the main engine for AI and in Mexico we have a lot of it. Unfortunately, much of it is fragmented. It is vital to integrate and standardize this data if we want to develop a national AI policy.
IMPROVES EFFICIENCY IN OPERATING ROOMS
PABLO BUFANO Managing Director of Dräger México
Q: What are the main challenges of competing in the market for operating rooms?
A: The main priority is the patient’s safety and well-being. This means always having sanitized equipment and allowing the doctor to access as much information about the patient as possible. Ensuring all this information is synchronized and updated in real time is very important. We put significant emphasis on creating a protocol and a coded language to feed our system with information that the doctor and operating room staff can control. This increases efficiency during the procedures, given that no unnecessary actions are taken due to misunderstandings.
Q: What differentiates Dräger México from its local and international competitors?
A: Since 1889, we have specialized in acute care and now offer integrated solutions that support our customers to improve clinical outcomes through constant innovation. Regarding client relations, we provide staff training and equipment maintenance to ensure our solutions are used to the best of their capabilities. Our goal is to do our training state by state; we want to talk to all governments and determine the particular needs of each. After that, we can find a way to bring most of the doctors in for special days of training, including lectures and demonstrations.
The medical sector in Mexico is focused on saving the patient. However, we are taking this one step further by creating solutions that help the patient to recover faster. Our technology’s success rate also depends on the skills of health professionals, which is the main reason behind the training we offer. We are even holding events at universities to work directly with medical students. Our goal is to integrate these events into academic plans, which could have a long-lasting impact on the health sector in Mexico.
Q: What are Dräger México’s main goals for the coming years?
A: We are focusing to increase our share in the private sector and have redefined our priorities with key accounts to meet their needs. We also want to work with small and medium-sized hospitals for which we have developed
financial solutions that will help them to access our solutions. In addition, we are working on offering diplomas or certifications to medical professionals who receive our training. The idea is to strengthen hospital teams. Lastly, we are working on integrating all our services into one system. We want to improve communication between different medical teams and equipment through a central station that can bring together all data. We have been working with 50 companies from all over the world to develop a common language that allows different equipment brands to communicate effortlessly. The protocol has already been approved and Dräger intends to launch its first product in 2019.
Q: What do you think Mexico needs to become a hub of medical device manufacturing and capitalize its presence in the American region?
A: Mexico is already a very important player in the medical equipment industry. It moves between eighth and 10th place worldwide as a global exporter and more than 150,000 people work in this industry. Exporting more than 90 percent of its products to the US, obviously that means that the country is not looking at the rest of the Americas and perhaps that is an aspect to correct if Mexico wants to be relevant in Latin America.
Q: How does Dräger México provide a solid platform of innovation that helps to anticipate the needs and to exceed the expectations of its customers?
A: Being a family business has allowed Dräger to allocate an important part of its profits, much more than our competitors, to R&D issues. We are essentially an innovative company and that has led us to always be at the forefront of technology. Our focus is on really understanding the needs of our customers, their pains and how we, as Dräger, can help them to solve those problems.
Dräger is a German company specialized in medical technology and safety. Its products and solutions target hospitals, fire departments, emergency services companies, government agencies, mining and other industries
STILL A LONG WAY TO A FULLY DIGITALIZED COUNTRY
MIGUEL NIETO
President LAR of Carestream
Q: How is Carestream contributing to increasing access to healthcare services?
A: Carestream provides imaging solutions for many applications including medical, dental and industrial. In the healthcare sector, our service portfolio includes radiologic printing, diagnostic equipment and Health Care Information Systems (HCIS). Our portfolio allows us to provide comprehensive care from the simplest to the most complicated procedures in the public and private sector. We also provide supplies for every type of imaging technology. We can provide film for laboratories that conduct tests, or even cloud services and AI systems for companies with highly sophisticated systems. Technology is a medium for clinics and hospitals to provide better care for patients. As we work with radiation, we need to ensure that our solutions provide the highest quality standards for image quality in diagnostics, while minimizing the patient’s exposure to radiation as much as possible. It is also important to maintain low costs for both the public and private sectors, since the former watches its finances to stay within budget while the latter does so to ensure profitability.
Q: Carestream’s business model changed in 2018 from a centralized to a customer-focused approach. How did this impact Carestream’s services?
A: Carestream has clients all over the world and our offices are divided among five regions: the US and Canada, Europe and Africa, Asia-Pacific, China and Latin America. In July 2018, Carestream hired a new CEO who pointed out that the centralized model might not equally benefit all those regions. For that reason, we decided to get closer to clients by making our offices more efficient and assertive. The objective of this strategy is to make us a more agile and customer-oriented company with a strong culture and values. It will put us in a better position to tackle opportunities for growth in the markets where we participate.
Carestream is a global provider of medical dental imaging and IT solutions, X-ray imaging systems for non-destructive testing and advanced materials for precision films and electronic markets
Q: How will digitalization transform diagnostic practices in the medium to long term?
A: Incorporating technologies into diagnostic practices goes beyond acquiring technology and helping users become proficient in it; it implies a change in the structure of the healthcare system. Developed markets, such as Europe and the US, have successfully incorporated technology and information systems into their diagnostic practices. In the US, for instance, care is provided in a “closed” system where tests, primary, secondary and tertiary care are supplied by a single provider. In Mexico, a patient receives primary care from one provider, testing from a different one and secondary or tertiary care with yet a different provider, which we call an “open” system. Because of this, digitizing information becomes harder as it requires the coordinated participation of many different players instead of just one.
The healthcare sector is indubitably migrating toward digitalization and technology but each player is moving at its own pace. We see a mixture of different systems as each player uses the best one for their own purposes. While some are investing in technology and are implementing software that favor interconnection with other systems, the result is a complex hybrid.
Q: Compared to the private sector, how ready is the public sphere to adopt digitalization practices?
A: Both the public and private sectors are ready for digitalization. The public sector is now introducing interesting proposals to improve its internal efficiency and create synergies through technology adoption. For instance, one of Mexico’s largest challenges is addressing its radiologist shortage, as the country only has about 5,000 certified radiologists. This is a very small number for Mexico’s large population and most work only in the largest cities. The public sector hopes technology will increase the reach of these and other services that heavily rely on infrastructure and specialists. Clinics in rural areas might have X-ray equipment but not a local radiologist. Using technology, it is possible for the clinic to send the patient’s tests to a team of radiologists who can send the results back through the cloud.
MEXICO A KEY PARTNER IN MEDICAL DEVICES DEVELOPMENT
Q: Why should healthcare companies consider Fujifilm as their ideal imageology provider?
JG: Fujifilm’s value lies in doing things better or differently, offering more and better services at a lower cost. Our operations are based on innovation, which is reflected in how the company develops its technology and in how it goes beyond commercializing products to providing innovative solutions.
Sometimes it is not necessary to improve the quality of diagnostic technology but to put quality equipment in the hands of clients, especially for the public sector in Mexico. Our global presence allows us to be in touch with current trends in the healthcare sector and to adapt our offering accordingly. For example, we know that in Japan home care is preferred, which means there is a need for diagnostic devices with greater portability.
EG: Fujifilm has Open Innovation Hubs all around the world to be close to people developing new technologies. Our experience in different sectors and the interoperability of our products are both core strengths for the company. Today, almost all television screens have Fujifilm accessories and most all cameras include our color supplements; our solutions transcend the industries they were created for.
Q: How has Fujifilm Advanced Research Laboratories boosted the company’s technology development process since its establishment in 2006?
EG: Fujifilm wants to develop smaller and portable highquality products with a low level of radiation. Fujifilm invests US$4 million in R&D daily. This constant cash flow, together with several acquisitions of companies that are not only profitable but that contribute with technological value, are key to Fujifilm’s ongoing product development. We can innovate more quickly and think outside the box, unlike other companies that tend to react more slowly to change.
JG: In Mexico, the company has developed three products for the healthcare sector. The first was a digitizer called Prima designed 10 years ago to cater to low-demand hospital groups. The second product was a medical
imaging device built in collaboration with the University of Guadalajara, which uses 2.5W tubes, unlike conventional equipment that require tubes between 32-62W. With our equipment, patients are less exposed to radiation and physicians do not compromise the quality of their diagnosis. Our third solution, Fujifilm FCR, was designed in collaboration with mammography doctors to improve breast cancer diagnosis in Latin America. Fujifilm FCR identifies microscopic abnormalities in the breast with a single image, allowing for faster detection and early treatment, if necessary.
Q: What led Fujifilm México to collaborate with Lunit and Salud Digna on the AI Pilot Project?
JG: Mexico has a limited doctor base, which makes it an ideal candidate to use artificial intelligence (AI) to grow and improve clinical diagnostics at health institutions. The AI Pilot Project does not seek to substitute doctors but to be a collaborative tool so they can make better and faster decisions.
Our goal is to have a positive impact on the work of radiologists in three ways: helping them to prioritize patients, streamlining information through Big Data applications and developing more precise imaging solutions that require only one take to avoid radiation overexposure. AI will help doctors shorten the time needed for reporting and diagnosis by 30-40 percent, allowing for more efficient appointments and a higher volume of patients.
EG: Salud Digna is one of Fujifilm’s main partners in Mexico because of its radiological offering and sizeable volume of patients covered through 100 branches across the country. Access to so many people helps us generate representative data for the entire country, which makes our AI systems much better.
Fujifilm is a multinational company recognized as the world largest image and photography company. It has over 75 years of experience in the healthcare sector and other technologicallyadvanced industries
Javier Giraud Medical Systems Vice President at Fujifilm México
Enrique Giraud Managing Director of Fujifilm México
ACQUISITION BOOSTS MARKET PRESENCE
JUAN PABLO SOLIS
Vice President and General Manager of Becton Dickinson (BD) Mexico, Central America and the Caribbean
Q: How would you describe the performance of BD’s diabetes management products in Mexico?
A: In 2018, BD grew significantly thanks to the acquisition of Bard, a company with a strong presence in the Mexican market. Bard has a large portfolio for surgical interventions, such as peripheral stents to manage complications like diabetic foot. These stents open narrow blood vessels, allowing the flow of blood to the foot and can help patients avoid amputations in cases of diabetic foot. In addition, with our BD Diabetes care business, we are leading the insulin injection effort and providing patients with a wide range of solutions.
Q: How is the acquisition of Bard impacting BD’s operations and benefiting your clients?
A: We can now offer clients more comprehensive solutions. Before the acquisition, BD focused mainly on diagnostics and medical treatment but now we incorporate surgical solutions. Bard also has many oncological products and is a leader in supplies for biopsies of soft tissue, such as for breast and prostate cancer. The acquisition also allowed us to enter the hernia repair market through the sale of surgical meshes for the abdomen, groin and intestines.
BD’s solutions also complement Bard’s. For instance, we manufacture ChloraPrep, a formulation with a solution of chlorhexidine gluconate and isopropyl alcohol that is used to prepare the skin before a surgical intervention. It can be used alongside Bard’s surgical products. The acquisition allowed us to generate surgical kits that include the formulation, the mesh and anything else a surgeon may need.
Q: How is your investment in Cuautitlan an added advantage to continue growing in the region?
A: BD sees Mexico as a manufacturing hub. We have 10 plants and 16,000 employees, which means we have the largest medical devices manufacturing capabilities in the country.
Becton Dickinson is a US-based international health technology company focused on IV devices for drug administration, cancer diagnosis, diabetes treatment and cellular research
Our plants in Mexico manufacture for all of BD’s divisions, both for local consumption and exports worldwide. Our manufacturing in Mexico has given the company a deeper reach into key markets around the world. It also allows us to react to changes in demand in these growing markets. Alongside Asia-Pacific, Latin America has excellent growth potential for medical devices and having a manufacturing hub in Mexico is a competitive advantage for us in the region.
Q: How is BD adapting its product offering to the needs of the Mexican market?
A: We approach public healthcare institutions in every country in Latin America to understand their needs and priorities. In Mexico, we are closely following the introduction of the National Development Plan and any changes to public healthcare policies, which are now heavily focused on prevention and cost containment related to chronic diseases. Mexico must learn to manage these diseases in a timely fashion or its infrastructure will be insufficient to handle the demand. We are participating in campaigns to increase awareness of the dangers of diabetes and we also offer solutions for the opportune diagnosis of cancer, such as flow cytometers to diagnose leukemia and lymphoma. We offer institutions a series of solutions that provide complete patient care, from diagnosis to treatment.
Q: How can BD and other companies support the development of best practices in the science and medical sectors?
A: BD participated in the second Week of Good Regulatory Practices alongside COFEPRIS, addressing a topic of major importance for Mexico: antimicrobial resistance, which is causing millions of deaths worldwide. BD is boosting awareness of this growing problem through a campaign called Resistant Fighter that promotes responsible antibiotic use in foodstuffs, water treatment plans and crop fields. BD can also contribute in the diagnosis of bacteria resistant to antibiotics. Managing antimicrobial resistance will require the collaboration of many players. Meat producers can help by reducing the antibiotics doses they use in animals for human consumption. The general public can help by avoiding selfmedication and doctors can make the appropriate tests before prescribing a medication.
REDUCED COSTS THROUGH STATE-OF-THE-ART TECHNOLOGY
CÉSAR CARRASCO
Country General Manager of Philips Mexico
Q: What progress has Philips Mexico made in transforming its business toward an integrated health model?
A: Besides migrating from a concept of selling products to offering technological solutions in healthcare, Philips Mexico’s transformation has been supported by the launch of different products and platforms that today are successfully participating in the market. The main goal is to offer solutions focused on digital patholgy to improve productivity.
Azurion was another product launched in Mexico in 2018. It will become the next generation platform for image-guided therapy. This technology will help users perform medical operations rapidly and securely. Its software, ConnectOS, was specifically designed for the Azurion intervention space to enable several experts to work simultaneously. Philips Mexico seeks to launch more alternatives during 2019 to continue with its transformation.
Q: What new solutions will Philips Mexico launch in the short term?
A: Future products will be launched following three priorities: increasing and improving healthcare access, improving the doctor’s experience and satisfaction while using Philip’s technology and lowering operating costs. Philips Mexico has recently launched a product called Philips MR Ingenia Ambition 1.5T, which is 100 percent digital and can operate with a small volume of helium thanks to its revolutionary and fully sealed BlueSeal magnet. Philips MR Ingenia Ambition 1.5T needs only 7L of helium, while other devices require up to 250L. This translates to faster maintenance of only 15 minutes and reduces the device’s noise by 70 percent. It also helps hospitals reduce imaging time by 50 percent as Philips MR Ingenia Ambition 1.5T can scan a complete body in about 30 minutes.
Another innovative launch is the new Philips Incisive CT that helps healthcare providers to manage operating costs and focus on optimizing patient care. With its first “Lifetime Tube” warranty, Philips will replace Incisive X-ray tubes, a key component in any CT system, at no additional cost throughout the life of the system. This year we are also releasing a new configuration of the Philips Azurion 7 platform called Flexarm.
This configuration gives the system an extra degree of freedom with a new arm mounted to its ceiling for greater flexibility of movements and approaches. It requires less space compared to the Flexmove configuration, synchronized movement between the flat detector and the collimators and rotation/angulation oriented to the patient.
Q: How can Philips Mexico improve doctors’ experience and satisfaction?
A: The combination of state-of-the-art technology and highly innovative software creates the perfect environment for health professionals to take advantage of Philips’ developments. Combined with the medical expertise of physicians, nurses, engineers and other experts, these characteristics support the decision-making process to enhance diagnosis.
Q: How can Philips Mexico’s technology help increase access to healthcare?
A: Standardization and system unification would enable effective resource classification and would make it easier to identify areas of opportunity. Philips Mexico’s technology can help the public sector to fulfill its commitment to achieve universal access to healthcare by combining technology and platforms that enable effective, transparent and secure management of the health ecosystem.
Due to saturation, between 40 and 60 percent of all patients seeking primary care end up being referred to other levels of attention. This results in the unnecessary saturation of other care levels. Philips intends to solve the saturation issue through a telemedicine platform that helps reduce this issue by 50 percent. The next step in addressing this problem could be to compile information coming from this platform to have an integrated health informatics solution including electronic medical records (EMR) that can help a hospital’s administrative and clinical areas analyze trends.
Philips Mexico is the local branch of Dutch company Royal Philips. The company has diversified technologies that focus on improving people’s quality of life through innovation in healthcare
R&D: THE PATH TO OPPORTUNITIES BEYOND AUTOMATION
JESÚS HUERTA
Country Manager Mexico and Latin America of DiaSorin
Q: How does DiaSorin improve the health and quality of people’s lives through its diagnostics products and what makes DiaSorin different from the competition?
A: Our core objective is to improve the health and quality of people’s lives by providing quality diagnostic products for early detection of clinical diseases. DiaSorin’s focus is always on the patient. To that end, the company emphasizes a humanistic view among its employees, which then translates as a benefit for its customers and end users.
As a multinational company, our vocation is to always use science to promote greater benefits for society and the industry. We also want to have a positive impact on the environment. For example, our Liason XL product, a chemiluminescence analyzer that has been on the market for about four to five years, is differentiated by having a higher speed than other similar products, a load capacity of up to 25 integral tests and disposable tips to eliminate residue, unlike other products on the market. These qualities
DiaSorin is a multinational diagnostic group specialized in immunodiagnostic and molecular solutions. It has subsidiaries and distributors worldwide in the US, Ireland, the UK, Germany, South Africa, Mexico, Canada, Brazil and more
make it a great solution for blood banks and laboratory tests. DiaSorin has a portfolio of over 120 tests. Its goal is to make a business and health impact on tests for special infectious diseases and MeToo tests, as well as, oncology, endocrinology, bone and mineral areas.
Q: How is DiaSorin positioned in Mexico and what are you doing to increase your positioning in the diagnostics industry?
A: DiaSorin has a strong international position in the field of immunology. Within this niche, we specialize in special infectious diseases, which has made us a very attractive player for the Mexican market. We are the No. 1 manufacturing devices company for infectious diseases, such as Torch, Zika, Chikungunya and also in the area of vitamin D, for which we are the gold standard. The company invests a sizable percentage of its revenue in R&D so that it can launch eight or nine new biomarkers every year. This helps DiaSorin maintain its position as a leader in innovation, to the extent that it is highly unlikely that our competitors, even together, could match the quantity and quality of our biomarkers. Our core business is in two niches: immunology for laboratories and the blood bank market. In recent years, DiaSorin has positioned with 25 percent of the blood bank segment.
PARTNERSHIPS BETWEEN TECHNOLOGY DEVELOPERS, HOSPITALS IMPROVE CARE
MARCIO MAZON President of Getinge Latin America
Q: How does Getinge differentiate from other medical devices companies in the Mexican market?
A: Getinge is a global provider of innovative solutions for operating rooms, intensive-care units, sterile reprocessing, cardiovascular procedures and life science companies such as pharmaceuticals and research labs. It was founded in 1904 in Sweden, which gives us over 100 years of experience. In 2018, the company made US$2.59 billion in profit. We have more than 10,000 employees and 25,000 customers in more than 135 countries across the globe. Our vision is to become the world’s most respected med-tech company and our key differentiator is true understanding about our customers’ challenges to provide innovative products and solutions that enable better patient outcomes while enhancing health economics.
Q: What are the strongest areas in your Mexico portfolio?
A: Our core in Mexico is providing solutions for operating rooms and intensive care units. Around 10 percent of our local operations focus on the sale of products for companies in the life sciences sector, including pharmaceutical laboratories. Our main customers are top and mid-range hospitals in the private and public sector and pharmaceutical companies. We see significant growth opportunities in the Mexican life sciences sector due to the large number of pharmaceutical companies operating in the country.
Our solutions for operating rooms are also popular in Mexico. Our goal is to help hospitals get the most out of their operating rooms, making sure the equipment is used to full capacity. We provide a variety of services and equipment to ensure surgical procedures go according to plan. We offer surgical tables, lights, and software to improve hospitals’ efficiency. Another strong area in Mexico is intensive care, where our goal is to improve clinical outcomes and reduce medical stays. We have innovative life support solutions, including ventilators for patients with acute medical conditions and neonatal patients. We also have strong presence in devices for cardiovascular procedures offering innovative extracorporeal life support and intra-aortic balloon counterpulsation.
Q: What is Getinge’s strategy to ensure it meets its clients’ needs?
A: Our goal is to go beyond equipping a hospital with medical devices; we want to create value for the hospital through our solutions. Technology must reduce costs, increase efficiency and, at the end of the day, save lives. We work as a team with hospitals, implementing solutions while sharing the risks and successes. Connectivity plays a significant role in what we do, as well.
We recently partnered with a European hospital to develop a solution to help surgeons performing cardiac surgery. This solution uses artificial intelligence to compare the patient’s data with those of the thousands of patients that came before to help the doctor make a decision on the patient’s care.
Q: Which areas will Getinge focus on in the short term in the Mexican and Latin American markets?
A: Besides our solutions for operating rooms, intensive care, sterilization and cardiovascular procedures, we will focus on delivering first-grade aftersales support. One of the initiatives is to increase connectivity of our current installed base. The goal is to check if the instrument is working properly, to anticipate failures and to provide remote solutions. If it is not possible to solve the problem remotely, this can at least provide data to our technicians so they are prepared to service the unit during their first visit.
Latin American countries are fast-growing markets and behave differently from well-developed countries. One of our goals is to increase our presence through products developed for these fast-paced markets. We want to do more than sell medical equipment; we want to provide an integral solution to the customer. For that reason, we create partnerships with customers to develop their solutions. Our main goal is to save lives by improving care practices.
Getinge is a global provider of innovative solutions for operating rooms, intensive-care units, sterile reprocessing, cardiovascular procedures and life science companies and institutions
Q: How is Atramat renewing its portfolio and how do these products benefit patients?
A: 2019 is a very special year for Atramat as we are opening a new branch in our portfolio for anesthetics. We also have a new manufacturing plant in Mexico scheduled for the end of 2019. Our partners in Turkey have patented several designs and products that are backed by years of research, which reduce the risk of infection for a more tailored and technological approach to healthcare for all patients in North and South America. This venture will also help us to provide a complete line of highquality respiratory circuits aimed at providing the best life support for intensive care, whether at a hospital or at home.
Q: How would you describe the potential demand for breathing and anesthetic circuits?
A: According to our estimates, demand for this circuits is on the rise with more than 5 million surgeries in Mexico alone. Of those, 70 percent use general anesthesia, which requires a complete circuit for the patient. With these numbers, the forecast for sales and use of these circuits justify strong investment and development.
Q: How have changes in public tenders affected Atramat?
A: IMSS’ 2019 medical devices tender differed from previous iterations because sutures and many other device purchases were open to international companies. Moreover, the tender specified a maximum 6 percent price increase in Mexican pesos. While most of our products are manufactured in Mexico, our overhead surpassed 6 percent by far due to increases in the minimum wage, a more expensive dollar and higher costs for some of our raw materials due to higher oil prices. We made great efforts to lower our prices for these tenders and we did win them, so we are now facing the challenge of meeting
Atramat is one of the world’s largest suppliers of surgical sutures. The company has over 50 years of experience. It belongs to Internacional Farmacéutica and its products are sold in over 80 countries
the price requirements while maintaining the high quality of the products.
Q: How has the market received the company’s new suture with antibacterial coating?
A: This product was launched at the end of 2018 and received a great reception. Due to its characteristics, it is more expensive than some alternatives but those who have invested in it have seen positive results. Under appropriate asepsis conditions in surgery rooms, sutures of this type would not be necessary. But on occasion, procedures fail, especially in open, lengthy or extensive surgeries where the patient is subject to potential contaminants for a much longer period of time. In such circumstances, these sutures can help to reduce the possibility of an infection.
Q: How is Atramat innovating in the suture market and what are some of your recent contributions to the sector?
A: Technological advances for sutures go beyond new polymers with different absorption types. We are launching a barbed suture based on a monofilament structure with a series of barbs stemming from its center. These sutures have a needle at each end, which means closing the wound is done from the center outward. Once the suture has been applied, both ends are pulled, causing the barbs to hook into the tissue. This procedure halves the length of the surgery and promotes less scarring. These barbed sutures have applications in orthopedic and plastic surgeries.
Q: What infrastructure investments is Atramat planning to improve its operations in Mexico?
A: The first is to open our own sterilization plant for the 90 percent of our products that are sterilized using ethylene oxide. This project is part of our vertical integration strategy to strengthen our presence in Mexico and Latin America. By allowing us to control our sterilization process, this plant will increase our sterilization speed, thus optimizing our services and helping us to manufacture more products at lower production costs. This plant will be operational by the second half 2019.
PATIENTS: MARKETING TARGET TO GROW HOMECARE RESULTS
CARLOS JIMÉNEZ
Director General of B. Braun
Mexico
Q: What are your strategies and priorities for the coming years as the new head of B. Braun Mexico?
A: In 2018, we started a consolidation process that we have yet to complete. In the past, we operated through two separate entities but we decided to act instead as B. Braun Mexico under a single leadership. This strategy is client-focused and oriented toward patients and health professionals, assigning only one executive per client for all B. Braun’s solutions. The company has 5,000 product lines, around 120,000 SKUs and in the commercial area we have over 200 people. Our new strategy gives clients a single point of contact with the company, which avoids having to translate our internal complexity to clients.
Q: How is B. Braun adapting to the homecare trend and what other trends could impact the medical devices sector?
A: The homecare market is growing and will gain importance in Mexico and the rest of the world. Although it is an important part of the patient’s care, homecare is not a substitute for specialized care centers. We need to have a combination of ambulatory attention and homecare. But the latter, at the moment, is restricted because it has to be paid out of pocket and is not reimbursed by any insurance company.
Another issue that is hindering homecare is that for nonOTC medical devices, the law prohibits direct advertising. This is a topic that we need to review to see if the scheme can be opened somehow so that homecare can go accompanied by mass communication. This could be regulated by COFEPRIS or any other entity, as long as we can target marketing campaigns toward patients.
Q: Which B. Braun division has enjoyed the best performance in the country?
A: We have four divisions: Aesculap, which is related to patient chirurgical care; Hospital Care, focused on hospital supplies for patient care; Avitum, that focuses on hemodialysis and Out Patient Market, the division dedicated to homecare. So far, Out Patient Market has delivered the largest, scoring double-digit rates,
even though it is our smallest division. We have seen good results and have good expectations in chronic wound care. Diabetic patients, for example, have many problems related to chronic wounds. There is also significant demand for colostomy bags and ostomies and incontinence products. Incontinence is a growing segment, although patients are reluctant to wear diapers. To address this, we are providing other devices that are used at procedures that can be performed at an ambulatory center or even during a medical consultation. We have not released these last three product lines in Mexico, but we are already very active in wound care.
Q: What strategies are you implementing to market B. Braun products not only in the private but also in the public sector?
A: We are waiting for the details of how the universal health system will work in the country. An increase in the number of people with access to health services is truly favorable. What we would need to review is how this is going to be financed, because the idea has always been to keep costs low. I hope the government can deliver on its promise to increase GDP expenditure in health from 6 percent to 8 percent. We understand that the public budget is undergoing a period of reorganization, so I hope that after this phase we will see more investment in 2020.
In general, in Mexico we spend very little on health services and a lot on the administrative side of healthcare. A universal health system could solve this but the government must take the necessary steps in that direction. For instance, for homecare, we could hire nurses and provide companion services, but for that we need to know what will be the homecare system that social security will finance so we can prepare adequate solutions.
B. Braun Mexico is a subsidiary of the international B. Braun Group, one of the leading providers of healthcare products and services in the world with 180 years of experience. Its products include devices for general surgery and cardiothoracic surgery
ATRAMAT: 50 YEARS OF SUTURING QUALITY
Fifty years ago, Internacional Farmacéutica and its Atramat brand were consolidated, focusing on the production of surgical sutures to reduce tissue trauma. Atramat was also a pioneer in packaging innovation that would ensure that surgical sutures are kept in perfect condition until they are used by surgeons.
Today, Atramat is a global brand recognized for having one of the most complete portfolios of surgical sutures. It is used by surgeons around the world to close thousands of wounds daily, with absorbable and non-absorbable materials coated with antibacterial and strands with fixation systems that facilitate aesthetic wound closure.
Over the past decade, we have extended our portfolio of medical devices inspired by the trust that surgeons put in our products. In collaboration with some of the world's finest producers, we are adding a full line for minimally invasive spinal implants, anesthesia and ventilation circuits for wound closure to our product portfolio. Atramat is also developing new devices to continue expanding its portfolio. Our involvement in the worldwide medical devices industry is increasingly strong and is based on the need to maintain a quality culture supported by our certifications, including ISO13485: 2016, CE mark and MDSAP. We are convinced that our success is the result of a combination of leadership, innovation, technology, quality and passion to offer safe products for patients.
MEDICAL DEVICES NEEDED TO BOOST ACCESS, HOME CARE
ROGER BROWNRIGG
Vice President Regional of Johnson & Johnson Medical Devices
México
Q: How has Johnson & Johnson evolved to make its offering stand out in the market?
A: Around 10 years ago, our medical devices division focused on the product itself. The premise was to differentiate ourselves by developing products that were faster, reduced bleeding or helped the patient recover faster. Today, our focus has evolved from products and services to solutions. Instead of just focusing on technology, this new approach has broadened our vision by putting patients front and center and integrating our products and services to offer a holistic solution.
Talking about solutions also forces us to consider all players and elements that impact the health ecosystem and how different actors can share risks and benefits. The idea is to create a more integral environment that considers prevention, diagnosis, treatment, rehabilitation and reincorporation to normal life. We do not only focus on the operational part of the business; we have a responsibility to listen and generate solutions for the future.
Q: What elements should be taken into consideration to ensure universal health access in the country?
A: The definition of access changes depending on how you ask. According to some, access entails free medicine for everyone, which generates the dilemma of how to ensure free and universal availability. However, when talking about access, we also need to consider quality, the patient’s clinical outcome and patient satisfaction. Quality always needs to be part of the overall health ecosystem; it cannot be negotiated neither for medicines nor medical devices. A patient’s clinical result must always be analyzed according to that patient’s lifestyle, considering economic costs and the responsible use of technology.
Johnson & Johnson Medical Devices Companies has over a century of expertise tackling pressing healthcare challenges and collaborating in creating new standards of care in surgery, orthopedics, vision and interventional solutions
Q: How can the private and public sectors work together to increase healthcare access in remote and hard-toaccess areas?
A: We cannot build a hospital in every town in the country. There is not enough money to build so many projects or to properly equip them. Similarly, there are not enough doctors and nurses to work in every municipality. This means we need to start using different technologies and work on a collaboration strategy.
An example is using the existing private sector infrastructure to provide better public health services. We are working on a project with the Ministry of Health of Coahuila to address cases of morbid obesity in the state. By drawing from our experience working with other local ministries of health and specialized centers, we helped the Ministry of Health of Coahuila generate an integral plan for treating these patients.
Q: What opportunities has Johnson & Johnson identified in medical devices for homecare and how can they contribute to boost prevention?
A: Hospitals should be for people with critical conditions. We are making a lot of changes in our portfolio and even though we have not necessarily made efforts to venture in this type of care, we have tried to reduce surgeries in hospitals. There are many surgeries that could be ambulatory, but that requires quality devices and proper protocols. Recently, we have also started selling our line of glucose monitors, which is No. 1 in the Mexican market.
Q: What are Johnson & Johnson’s main goals for 2019?
A: There is a great deal of uncertainty in the sector due to the changes the government wants to make. Although many of them are good, the administration should not move forward without knowing how the changes will be implemented. We do not know how the year will end, but we have a responsibility to participate in the debate regarding what is the best health system for the country to provide access to quality and affordable care. Our commitment to Mexico is to reach more patients and restore more lives.
ENGINEERING COMPANY SEIZES MARKET OPPORTUNITY
JUAN DOVARGANES CEO of Arroba Ingeniería
Q: Why did Arroba Ingeniería decide to direct its efforts to neonatal care technologies?
A: Arroba Ingeniería was created in the early 1990s by a group of biomedical engineering graduates from Universidad Iberoamericana who thought the health sector would be greatly improved by technological advances in medical devices. Most medical devices in Mexico are provided by foreign manufacturers, mostly American and European. Designing and manufacturing these devices in Mexico seemed promising for Arroba Ingeniería.
In 1992, the company identified an opportunity to provide incubator maintenance services to various IMSS hospitals, but the original parts needed were no longer available because American producers had discontinued them. Arroba Ingeniería developed and manufactured its first digital controllers to serve these clients. These controllers allowed maintenance of a broad infant incubator base at a low cost. Our growing expertise in this sector led us to our current focus on neonatal care devices.
Q: How can Arroba Ingeniería provide an added value to its clients, when compared to its competitors?
A: Arroba Ingeniería offers two lines of incubators, radiant warmers and phototherapy lamps. The first line is based on progressive technological development and has diverse functions, options and accessories to cover the requirements of highly specialized hospitals with neonatal intensive-care units (NICU). In these units, devices must be able to control temperature, oxygen and humidity and monitor physiological variables such as oxygen saturation and pulse rate. Due to their complexity, incubators are also operated by highly specialized personnel. Considering that between 5 and 15 percent of births in Mexico are premature, Arroba Ingeniería developed a specialized and affordable line for this segment. This line can be used by 90 percent of the babies born between weeks 32 and 37.
Medical care is growing in sophistication, complexity and cost. Hospital investment in technology is extremely high and in the long term, access to healthcare could
become simply unaffordable. Arroba Ingeniería, therefore, decided to develop and manufacture technology for most premature babies at affordable prices. The company’s goal is to democratize healthcare and to make access to quality medical attention a right for everyone.
Q: Which export markets could be attractive for your products and why?
A: Bolivia, Peru, Colombia and Ecuador are the most attractive markets to begin with. However, we believe our products are perfect for any country, especially in the emerging segment. Latin American countries have a lot in common with one another and we think targeting this region first is the most appropriate strategy.
Exporting is always a challenge because we need to understand the commercial and regulatory differences between Mexico and other markets. We are looking for commercial partners in different Latin American locations. We predict we will be exporting our devices by 4Q19 or 1Q20.
Q: How will the development of the global incubator market impact Mexico?
A: Mexico has an open economy that allows us to trade with several international markets, which gives us the opportunity to, on the one hand, access supplies and components from different developed countries, such as the US, the EU and even China. On the other hand, it opens the door to offer our products to a wide range of countries with similar characteristics to ours. Additionally, we have a young population, with many talented engineers and technicians. With the right focus, they can create technologically outstanding and high-quality products that may give us the chance to participate in the international market.
Arroba Ingeniería is a Mexican engineering company specialized in the development of medical devices. It is designing a solution to diagnose children’s vulnerability to diabetes
THE FUTURE IS IN HEALTH SOLUTIONS
RODRIGO DÍAZ DE VIVAR
Subregional Head of Management Center Latin America North and Country Manager of Roche Diabetes Care México
Q: How does Roche Diabetes Care ensure the highest innovation and quality in its products?
A: Roche Diabetes Care is transforming from being a provider of individual products to generating a value proposition based on services. Although Roche Diabetes Care has offered for many years hardware solutions of medical devices to both the public and private sectors, today it combines this with integrated and tailor-made health management software. This implies personal disease management based on our three pillars: hardware, such as glucometers; digital tools, such as the mySugr app and a digital platform for health professionals and payers to manage the patient.
Diabetes is a disease that has an extended social context. Through these services, patients have integral control of their health, from their nutrition, exercise and education regarding their treatment and its management.
Q: What incentives or mechanisms would increase innovation in medical devices for diabetes management?
A: Diabetes in Mexico is a severe disease with a prevalence of 13 to 14 percent in a population of about 130 million people. This means there are almost 15 million people living with diabetes. More than half of the people are not diagnosed and of those diagnosed, only 5 percent are undergoing treatment.
Roche Diabetes Care has now brought a new pilot product to the Mexican market called SugarView. The idea of this product is to measure sugar levels without a medical device and through an intelligent photograph of a test strip with a blood sample. A pilot test is being done with 1,000 patients and Mexico has become an important ally for the company. This product is designed to be a much more effective, less invasive and more cost-efficient solution for patients.
Roche Diabetes Care, under the brand Accu-Chek, creates value by providing integrated solutions to monitor glucose levels, deliver insulin and track and contextualize relevant data points to contribute to a successful therapy
Q: What mechanism could help reduce the country’s diabetes burden?
A: Beyond encouraging technology penetration in the market, the main focus should be on providing proper information about health management through technology. It is important that professionals in charge of people’s health have constant training on how to make the most of technology. The best technology is that with well-known benefits and that is used to its full capacity. Roche Diabetes Care continually supports health professionals, including doctors, nurses, technicians and other experts in knowing how to use these devices to ensure maximum benefits.
Digital platforms are also important to support healthcare, as these provide appropriate, orderly and transparent patient management with efficient follow-up. Similarly, value-added services, such as nutritional and lifestyle support are as important as an individual performing regular glucose checks. Health is a topic that covers different aspects of a person’s life, which is why health solutions must be comprehensive.
Q: What are Roche Diabetes Care’s plans for the near term?
A: Traditionally, Roche Diabetes Care has had a strong focus on the commercialization of medical devices, such as glucometers, test strips and capillary devices. Starting in 2019, as part of our goal of offering a comprehensive health solution to patients with diabetes, the company is launching several new solutions in the market. The first is an insulin pump called Accu-Chek Combo, which integrates a microinfuser, a measurer and software in a discreet and safe piece of equipment.
In mid-2018, Roche began working on introducing a product called Eversense, the first implantable sensor for six-month use. Eversense is indicated for the continuous measurement of glucose levels in interstitial fluid in adults through a removable transmitter and a smartphone application. With this system, patients can improve management of their diabetes and glucose levels. The Eversense app allows the user to check glucose concentrations in real time and see how levels are evolving. It also stores data and shares it in the cloud so it can be accessed by care providers.
OPEN MARKET NECESSARY TO BOOST COMPETITIVENESS
MIGUEL SOTO
General Manager of Mindray Medical México
Q: What are Mindray Medical’s strongest areas in the Mexican market?
A: Mindray Medical México began operations developing patient monitoring and life support devices, followed by ultrasound equipment and IVD lines. In Mexico, our main strength is in the patient monitoring and life support (PMLS) subsector, which is valued at US$500 million in the country. Demand for these products is high but there are few sellers because development of this technology has a high entry cost. Our PLMS products are often bought by new hospitals and in fewer cases, to replace existing equipment in the public sector. At this point, our PMLS products hold 12 percent of the market in the public sector.
Q: How is Mindray Medical México expanding its other business lines among potential clients?
A: We sell less ultrasound equipment than PMLS systems. Hospitals may require a monitor for every other bed but their imaging departments often require only a handful of ultrasound equipment. Our ultrasound products are targeted toward the many imaging and diagnostic centers instead of hospitals or clinics. Most laboratories operate as chains, where franchises collect all samples and send them to a central laboratory to be processed. Our goal is to place Mindray Medical equipment in these central laboratories. At this point, we have 18 percent of the market for ultrasound equipment in private sector laboratories. We are developing our supply chain to increase our penetration in this segment. Mindray Medical México also provides laboratory equipment for chemical analysis, hematology and immunology, the latter having the most potential in the Mexican market.
Q: How does Mindray Medical México help doctors improve diagnostics and make better treatment decisions?
A: Mindray Medical México is a challenger of the status quo and operates based on three axes: quality, technology and low cost. We use simple, accessible and user-friendly technologies that allow medical professionals to make better use of their time and to focus on what is most important: the patient. Moreover, due to its Chinese roots, Mindray Medical was created following strong cost-containment principles to adhere to local cultures and needs.
Q: How is Mindray Medical México growing its penetration in the public sector and with public-sector clients?
A: The public sector follows an integration scheme as there is no single company that can provide the entire portfolio of products the sector needs. At the same time, the rules of the game favor the industry over the patient. Government organizations are ordered by law to open tenders to foreign suppliers, but public institutions, such as IMSS and ISSSTE, are unable to buy products from countries that do not have FTAs with Mexico. This puts some countries in a better position to trade with Mexico. Regulations should be revised to allow other countries to offer better deals to public institutions and provide patients with better technologies.
Q: How does Mindray Medical balance technology development with its cost-containment strategy?
A: At Mindray Medical, we understand that we will become competitive in the international market through quality and innovation. Our products are now fully focused on the needs of the end user. We study the market and develop our products accordingly. Mindray Medical has been in Mexico for 11 years. To consider bringing manufacturing and technology development operations to the country, Mexico would need to ensure certainty in its regulatory and economic framework. The country is now the No. 1 exporter of medical devices in Latin America thanks to the support and innovative efforts from the public and private sectors.
Q: How will Mindray Medical make a difference in the Mexican medical devices industry?
A: The medical devices industry traditionally launches a product every six to 10 years. On the contrary, Mindray Medical, and Chinese companies in general, offer around six different new products per year. We are changing paradigms in the market. The medical devices sector is often slow to change but it is increasingly adapting to new work models.
Mindray is a Chinese manufacturer of medical devices for patient monitoring and life support, in vitro diagnostics and medical imaging systems. It was founded in 1991, has presence in 39 countries and 31 offices in China
TECH INVESTMENT BRINGS SUPERIOR LONG-TERM SAVINGS
GERMÁN GARCÍA
LATAM AWM Regional Director at Smith & Nephew
Q: Smith & Nephew’s 2018 results show the company performed better in emerging markets than in other more established regions. Where does Mexico fit in?
A: Mature markets like Europe and the US are growing at a 2-3 percent rate annually, in comparison to emerging markets with rates of 15 percent. Approximately 17 percent of Smith & Nephew’s global revenue comes from developing markets.
The main driver behind this growth is the size of the population in these regions, coupled with the low penetration of medical care, which makes new medicines more attractive than in more mature markets. Compared to other Latin American countries, Mexico still has one of the lowest rates in terms of health coverage and penetration of medical devices. In comparison, Colombia has universal healthcare and 98 percent of its population has access to medical devices.
Q: What opportunities and obstacles does Smith & Nephew expect from the merger between Seguro Popular and IMSS, in terms of penetration of medical devices?
A: Most opportunities will come from people affiliated with Seguro Popular who will now have increased access to surgeries, treatments and other therapies. The disadvantage is the lack of infrastructure because there are not enough facilities to care for the 50 million people registered with Seguro Popular. This merger will require a huge investment in infrastructure and health expenditure, which could represent over 6 percent of the national GDP.
Q: Smith & Nephew’s 2018 results also state the company wants to “reach the full potential of its portfolio.” What does this mean and how do you plan to reach that goal?
A: Smith & Nephew wants to properly distribute its entire portfolio across the country. However, there are constraints
Smith & Nephew was founded in 1856 as a pharmacy in England. Now, the company is present in more than 90 countries and it is the world’s largest producer of arthroscopy products and the second-largest manufacturer of advanced wound-care products
in the Mexican market, such as the low penetration of medical device and a fragmented health system that hinders growth of the medical devices segment due to issues like access.
The company has three core business units: orthopedics, traumatology and wound care. The latter is the unit with the least penetration in the country. Public institutions prioritize price over efficiency, so public hospitals tend to use dressing, alcohol and basic products. Smith & Nephew, on the other hand, manufactures products with greater innovation and technology that in the long run are more efficient for treating wounds. Smith & Nephew wants to increase the use of its products in Mexico so more people can have access to state-of-the-art technology.
Q: What are the reasons behind the low penetration of wound care devices in Mexico?
A: The limited use of advanced medical devices for wound care in public hospitals has made private hospitals and pharmacies the strongest points of sale for these devices. When a patient arrives at a public health institution, normally it lacks advanced dressings and the patient is asked to purchase them at the pharmacy. Only those patients who can afford it have access to wound care technology. The impact becomes more evident when hospitals have nosocomial infections, longer patient hospitalizations and higher medical expenses.
Q: How have Smith & Nephew’s R&D operations improved after centralizing them under a single president of Global R&D?
A: Our goal is to grow efficiency and minimize expenditures. This is also a proactive strategy to bring technology closer to the population in developing markets with a reduced income and high out-of-pocket healthcare expenses. Smith & Nephew wants to become the ideal solution for those midtier segments looking for high-quality products at an affordable price. For example, the company launched a total knee prosthesis called ANTHEM that employs an advanced femoral and tibial anatomic design to promote improved anatomic implants fit for midtier patients in emerging markets and Europe.
HOSPITAL BEDS CRITICAL MEDICAL DEVICES
MAURICIO VALERO
Managing Director of Linet Group in Mexico
Q: What will be the main challenges for the healthcare sector in the coming years and how is Linet Group addressing these?
A: Mexico and other countries in Latin America are experiencing a rapid change in their demographic pyramid, forcing healthcare institutions to adapt to the needs of an aging population. By 2030, Mexico is expected to have 10 million adults over 65 years of age, which represents a 370 percent increase compared to the 2.7 million registered in 2018. The country has approximately 4,000 hospitals, 3,000 of which are managed privately while the rest fall under government jurisdiction. Yet, public hospitals from IMSS, Seguro Popular, ISSSTE and other public institutions serve the vast majority of the population. Linet Group’s strategy to tackle the public sector is based on offering quality beds at an affordable price.
Linet Group is one of the Top 4 largest bed manufacturers worldwide, which allows the company to offer more costefficient proposals than its competitors. The company’s priority at the moment is to be the leader in the Americas, with growth centered on the chronic care and nursing home segments. We also want to continue developing consciousness about the importance of bed maintenance, since these are key medical devices and not just common furniture.
Q: What is Linet Group’s perspective regarding the merger between Seguro Popular and IMSS?
A: Rather than a change, this represents a simplification of the healthcare system in Mexico. This merger will create a more simplified way of managing resources and it will avoid redundancies between IMSS, ISSSTE and Seguro Popular since Mexicans can be affiliated to one or more of these institutions. Universal access to healthcare will allow the public health sector to use any available resources to address the needs of the population. Afterward, it will be easier to identify in which processes the private sector can collaborate.
Q: How has Linet Group’s relationship with Wissner-Boserhoff impacted the company’s operations?
A: Linet Group was born from the collaboration between the Wissner-Bosserhoff Group and the Linet Group, which have
worked together for more than twenty years. In 2016, Linet Group expanded its business with the acquisition of a majority stake in BORCAD Medical to complement Linet Group’s and Wissner-Boserhoff’s portfolio of nursing beds and geriatric furniture with gynecology, neonatal and dialysis chairs.
Q: Why did Linet Group choose Mexico to establish a corporate office and how has that impacted your operations in the country?
A: Linet Group focused for many years on the European market and only expanded to other continents after opening an office in the US. Mexico was Linet Group’s second office in the Americas, which was a natural step due to the country’s geographic location that allowed the company to capture more clients and serve the Andean region. Linet Group later decided to open its Brazil office in Sao Paulo to target Latin America, another in Dubai to tackle the Middle East and one more in Australia. Linet Group’s goal is to be present in strategic countries and to have indirect representation in over 100 countries. Linet Group is one of four hospital-bed manufacturers worldwide with the capacity to supply any market and the know-how to develop global products.
Q: How has your international experience helped you understand the Mexican industry?
A: Contrary to common belief, the Mexican health system, its health-related processes and the way products and services are purchased to provide medical care are more similar to Turkey, for example, than to the US or Brazil. The US has no federal or state health providers, only private companies; Brazil’s commercial policies are conservative and oriented toward protectionism, posing several obstacles to foreign investment. Like Mexico, Turkey and Chile have a more open approach and have actively promoted the participation of international companies through public tenders.
Linet Group is a major European manufacturer of hospital and nursing beds. The company’s portfolio includes solutions designed for intensive care, regular in-bed treatment and beds for nursing homes and long-term care facilities
QUALITY MEDICAL DEVICES NECESSARY TO IMPROVE CARE
JOSÉ RAMÓN VELASCO
General Manager of Essity Medical Solutions Mexico
While some clients still have a price-oriented vision, a comprehensive cost-benefit analysis ultimately can be better in the long term, says José Ramón Velasco, General Manager of Essity Medical Solutions Mexico ( Essity). “By promoting faster healing, patients can more easily recover and leave the hospital sooner. As a result, public and private hospitals spend less and provide better care,” says Velasco.
Essity is a global leader in hygiene and health products that manages a broad range of popular brands including TENA, Regio and Saba. In 2017, the company acquired a health business that focuses on wound care, compression therapy and orthopedics. Essity has introduced these three divisions to the Mexican market as part of its strategy to improve care through prevention. “Mexico has an opportunity to improve its prevention culture. The use of medical devices as prevention mechanisms could address the problem at its roots. It is necessary to change this culture to develop a model that fights diseases more effectively,” says Velasco.
In its wound care division, Essity offers acute and advanced products. The latter are specialized, hightechnology solutions that promote faster healing and also control infections. Essity provides an integral solution that addresses every stage of wound healing. Its portfolio includes surgical tapes, dressings, foams with ultraabsorption and DACC technologies for infections. Velasco warns that while these products bring many benefits to patients, doctors and nurses often do not know they exist.
To address this, the company is strongly investing in training for healthcare professionals. “To position our Advanced Wound Care products, we have to invest in educating the market. We are working alongside the Permanent Nursing Commission to develop a robust education strategy to spread the word on the benefits of using these technologies,” he adds.
Essity also wants to empower patients and help them to better manage their own care. The company offers
patients the opportunity to continue their treatment in the comfort of their own home, which is a growing trend especially in the out-of-pocket sector. “Wound care products are transforming for home care purposes. The sector is evolving to give patients more control and empower them to treat wounds by themselves at home.”
Essity’s education efforts are also aimed at the general public. “About 70 percent of Mexicans are at risk from chronic venous insufficiency (CVI) and most are unaware of it,” says Velasco. CVI is a medical condition where leg veins become damaged, which makes blood flow backwards and prevents it from reaching the heart. The condition is exacerbated by age and sedentarism.
To tackle this disorder, Essity’s compression therapy division developed JOBST compression socks, which improve blood flow and reduce swelling. “We are also raising awareness among the general public of the benefits of these products and where they can acquire them. There is a misconception regarding compression socks as some believe they are used only by seniors, which is not the case. Compression socks can be used by younger people who exercise and want to remain healthy,” he says. The company also developed a sports line of compression socks called JOBST Sport, which was introduced to Mexico in late 2018 to support sports enthusiasts.
The company’s positive reception in the Mexican market has led it to develop an ambitious growth plan. “We want to grow at a double-digit rate for the next five years and for each of our product lines to grow at least twice in terms of market rate,” says Velasco.
The company plans to strengthen its three sales channels: public and private hospitals, retail and pharmacies and e-commerce. Essity will continue to prioritize education. “We believe it is the industry’s job to raise awareness of what these products can bring to the sector and how they can bring a positive cost-benefit balance for public and private health institutions,” says Velasco.
AWARENESS NEEDED TO GROW MANUFACTURING QUALITY
LUIS GARDUÑO Partner and CEO of Art-Técnica
Q: What can Art-Técnica offer its clients that its competitors cannot?
A: We have three priorities: quality, technology and a strong ethical profile. Our solutions allow for medical equipment that delivers quality for both patients and doctors. Our people and the brands we manage — including Fluke Biomedical and Raysafe — must be oriented to offer the best possible solution in the market. At the same time, considering that the Mexican market is not that mature in terms of regulations, we strive to follow an ethical business model that makes quality our top priority, thus providing an advantage to our clients.
Q: What strategies have you implemented to showcase the advantages of brands like Fluke Biomedical and Raysafe?
A: We work in a niche market targeting biomedical engineers, which means that good references are essential to grow our business. To get these, we rely on the high quality of our product portfolio and the advanced qualifications of our personnel, all of whom are experienced enough to get any international certification available. We are certifying our personnel and processes with the Mexican Certification Entity and our goal is to become a reference in medical equipment manufacturing and the development of biomedical engineering in Mexico and Latin America, as well as an enabler of quality in the day-to-day operations of hospitals and clinics.
Our goal is to establish close relationships with quality equipment-manufacturers. Consequently, we have seen greater dynamism regarding local manufacturing, which has opened the door for Art-Técnica to offer its products as a way to ensure optimal functionality. We play a key role in helping local companies grow their competitiveness and work under international standards, which allows them to expand their client base beyond Mexico’s borders. Once they incorporate the latest technologies, they can standardize their processes to reduce production costs.
Q: How can the market become mature enough to compete with other international medical-devices hubs?
A: There needs to be greater awareness regarding the importance of quality in biomedical engineering. When manufacturers emphasize quality, standards rise accordingly. At the same time, there should be a stricter regulatory framework that forces companies to work in line with international guidelines. That would help the market take the next step toward competitiveness and specialization.
Q: Once enforced, how will USMCA impact the medicaldevices sector?
A: On the one hand, the agreement will strengthen the US economy, which will lead to devaluation of the peso and higher prices, given that most pieces of equipment are priced in dollars. On the other hand, USMCA will also homologate certain manufacturing standards across the region, which will help Mexico adapt its regulations to meet international quality standards. The challenge for SMEs in the sector will be to develop their workforce’s competencies to ensure efficient results. One of our priorities is to look for forums and similar avenues that provide us the opportunity to participate in the development of standardized regulations and their implementation.
Q: What are your priorities for Art-Técnica in the near future?
A: We see the healthcare market growing in Mexico and Latin America. This will spur the participation of more project integrators and these are Art-Técnica’s targets. These players are in charge of finding the right suppliers to build and ramp up the operations of any new healthcare facility. Integrators make their decisions based on quality and price and, as managers of different brands in the biomedical engineering subsector, we can help them effectively identify the best suppliers.
Art-Técnica is a Mexican metrology company that offers products and services to biomedical and clinical engineers. The company represents brands like Fluke Biomedical and Raysafe
PHARMACIES & LABORATORIES
Pharmacies, along with other sales channels, are the main point of access to medicines for patients. In recent years, other players with digital platforms and technologies have entered the market, which has generated greater competition and the need for differentiation. Traditional pharmacies seek to incorporate technological solutions to their operations and at the same time new players seek to offer increasingly innovative solutions. Meanwhile, the clinical analysis market is gaining strength in the country with the growth of chronic-degenerative diseases, making laboratories an important ally in boosting prevention and providing timely diagnoses.
Pharmacies & Retail evaluates business opportunities through interviews focused on the primary sales points for drugs, such as pharmacies, big supermarkets and new players to the medicine retail industry. The chapter shows how clinical laboratory leaders see the sector’s involvement in enhancing public health through prevention, as well as the difficulties and possibilities for expanding to other regions of the country.
CHAPTER 7: PHARMACIES & LABORATORIES
144 ANALYSIS: New Business Models Put Pharmacies in New Role
145 INFOGRAPHIC: Pharmacy and Supermarket Opportunities to Improve Healthcare
146 VIEW FROM THE TOP: Macedonio Garza, Farmacias Benavides
148 VIEW FROM THE TOP: Miguel Reyes, Farmacias Purex
149 VIEW FROM THE TOP: Guillermo Martorell, Grupo RFP
153 VIEW FROM THE TOP: Francisco Cantú, Fármacos Proasse
154 INSIGHT: Emiliano Hernandez Laos, Knaou
155 VIEW FROM THE TOP: José Carlos Pérez y Pérez, Grupo Diagnóstico Proa
156 VIEW FROM THE TOP: Mario Sicilia, Laboratorio Médico Polanco
157 VIEW FROM THE TOP: María de la Paz, Laboratorios Clínicos de Mérida Daniel Duarte, Laboratorios Clínicos de Mérida
158 INSIGHT: Oswaldo Basto, Quimialab
159 VIEW FROM THE TOP: Raúl Solís, Laboratorios Diagnóstica
161 ROUNDTABLE: How is Your Company Revolutionizing Medication Distribution?
NEW BUSINESS MODELS PUT PHARMACIES IN NEW ROLE
Pharmacies are moving away from being simple points of sale for health supplies with a focus on medicine preparation to include logistics, clinics, education and research functions aimed at patient safety, as well as the rational use of medications
Pharmacies started as drug preparation centers but they have evolved to become an integral component of health access. Two trends are responsible for the transformation, according to ANAFARMEX: digitalization and the concept of well-being.
The first, technology, has provided a path to different business models that give the patient more freedom while allowing pharmacies to expand their services. More is on the way, say industry leaders like Emiliano Hernandez, Cofounder of Mexican pharmacy startup Knaou. “Without a doubt, technology will change the Mexican pharmacy sector as it has changed other sectors such as retail.”
Hernandez adds that new technologies can address gaps in healthcare services. Knaou, for example, provides a subscription-based system that facilitates medication delivery. “People do not want to leave their homes and they do not want to spend time traveling to pharmacies or other stores for the products they need,” he says.
Existing technologies and emerging applications that give patients greater control of their well-being also act as bridges of communication between the patient and the pharmacy, says Francisco Cantú, Director General of Fármacos Proasse. He says that apps can help remind patients when to take their medications and the information those patients feed into the system helps the pharmacy know how advanced they are in their treatment. This would allow a pharmacy “to contact patients and let them know when their prescription needs refilling. They could then program the delivery of the medicine.”
Perhaps the biggest change in the pharmacy landscape over the past decade is the increase in pharmacy-adjacent clinics. According to the Ministry of Health, every month, more than 10.6 million people in Mexico visit these clinics at a cost of between MX$20 (US$1.02) and MX$50 (US$2.54). Just 10 years ago, there were 2,956 offices of this type. Today, there are 16,000 across the country.
But it is not just pharmacy chains. Retailers have also moved into the health space, helping to expand access to care by taking advantage of the traffic through their stores and proximity to patients. Walmart of Mexico and
Central America (Walmex), for example, operates in over 648 stores across six countries in the region: Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Mexico. “Walmex receives over 5 million clients per day, which provides a great opportunity to increase access to health,” says Ricardo Martí, Commercial Director Pharmacy, Health and New Businesses of Walmart, Bodega Aurrera, Superama and Sam’s Club.
PREVENTION
Mexico’s aging population poses another dilemma, and many see prevention as the cure. An aging population is a challenge for the public health system because there are more and more elderly patients with many multimorbidities, such as cardiovascular diseases, cancer, chronic kidney disease and diabetes, according to the article The Aging population: A challenge for public health , published by the Colombian Journal of Anesthesiology. Mario Sicilia, Commercial Director of Laboratorio Médico Polanco, is among those who believe the burden on Mexico’s public health management will only worsen. “At this point, public healthcare services are unable to provide care to their affiliates with their current budget and this situation will only worsen as chronic diseases become more prevalent,” he says.
WHO recommends that governments around the world increase prevention strategies to reduce health costs. Globally, WHO estimates that 35 million deaths occur each year due to noncommunicable diseases. About 15.8 million, or 40 percent, are preventable, premature deaths from heart attacks, strokes, diabetes or asthma.
Clinical laboratories can play a key role in improving diagnoses while helping to create a prevention culture in Mexico. “It is necessary to transform our healthcare system into one based on prevention. In this mission, clinical diagnostic laboratories, alongside genetic testing, can play a pivotal role,” José Carlos Pérez y Pérez, Executive President of Grupo Diagnóstico Proa.
Laboratorio Médico Polanco’s Sicilia adds that a focus on prevention and early diagnosis can be a cost-efficient health mechanism: “It is just a matter of running the numbers to conclude that it is less expensive to prevent a disease than to provide care for the sick.”
PHARMACY AND SUPERMARKET OPPORTUNITIES TO IMPROVE HEALTHCARE
According to COFEPRIS, more than 10.6 million people go to pharmacy-adjacent clinics (PACs) every month. Today, there are more than 16,000 PACs throughout the country. Consultations at a price between MX$20 and MX$50 (US$12.50) turned PACs into an accessible and popular health option for the Mexican population. Supermarkets are also becoming an increasingly strong players in the health sector through in-house clinics and partnerships with large pharmacy chains, which opens the door to more competition in the pharmacy and medication distribution sector.
PRODUCT DIFFERENTIATION, AVAILABILITY AND DIGITALIZATION TO CONQUER MEXICAN MARKET
MACEDONIO GARZA Director General of Farmacias Benavides
Q: How is Farmacias Benavides strengthening its presence in areas with insufficient health coverage?
A: Our expansion process continues in markets where we have not had a strong presence, primarily in the central region of the country. Besides inaugurating new locations, we are strengthening our brand presence with complementary services, such as home delivery and primary medical attention, at points of sale. Over the past 12 months, we have opened 100 new business units in markets where we did not have a presence.
Q: How is Farmacias Benavides transforming its business model to become not only a point of sale but of wellness?
A: We have created partnerships with players in the digital arena and e-commerce platforms such as Rappi and Cornershop. We started collaborating with both companies in the first half of 2019 and our expectation is that these ventures will help us become more accessible to clients that demand digital purchases and home delivery services. Improving medicine availability is among our main priorities, and it is a truly complex problem. In Mexico, recent studies show that a patient often needs to visit more than two pharmacies to fill a prescription. We have worked to ensure that Farmacias Benavides is the sales point where patients can find all their prescribed medications. We have made significant investments to improve product availability at all our locations by understanding consumer demand. We also are forming alliances with logistics experts to improve deliveries and to comply with customer expectations.
Q: How are technological innovations impacting Farmacias Benavides’ business?
A: We have been in the Mexican market for 102 years. We continue to strengthen our value proposition to stand out from the traditional transactional pharmacy, moving
Farmacias Benavides has over 100 years of experience and is one of the largest pharmacy chains in Mexico. The company was acquired by Walgreens Boots Alliance in 2014 and has 1,174 points of sale in 24 states
toward a model of health and primary medical attention. This will allow us to become a point of reference for our clients. In addition to home delivery services, we are remodeling our pharmacies to have a homogenous brand presence.
Over the past 12 months, we converted and remodeled 437 pharmacies. We have also taken advantage of the fact that we have access to all leading brands from the Walgreens Boots Alliance. In 2018, we introduced our generics brand ALMUS. So far, we have released 117 products through ALMUS and we expect to double that number in the coming 12 months. ALMUS is already a reference in Europe and complies with all international quality standards, which makes our offering unique for those clients looking for alternatives to commercial brands.
We are also introducing high-quality generic products through the Farmacias Benavides brand. We have 73 Farmacias Benavides products, mostly focused on vitamins and medicines for acute conditions that complement the rest of our offering.
Q: How will you balance your operations between digitally-driven solutions and traditional point-of-sale operations?
A: Many of our pharmacies are located in rural populations and suburban regions where internet solutions do not play a predominant role. Still, we continue working with both strategies to ensure we are as convenient as possible for our consumers in markets where players like Rappi and Cornershop are present, while maintaining a strong customer-service approach in areas where clients favor the traditional visit to the pharmacy.
The market will evolve eventually but it is still early for us to declare a great digital transformation, especially since most of our transactions are still done through the traditional pharmacy model. However, we remain attentive to changes in legislation that will permit the use of electronic prescriptions.
Q: How is Farmacias Benavides’ business transformation impacting the country’s overall health ecosystem?
A: We still see potential to grow organically in the Mexican market. A significant part of the market has been left unattended and we can offer an alternative in those markets where we are not present yet. On the other hand, we continue improving our value proposition through modernization and homogenous presentation of our brand.
Our investment plan includes building an additional 100 pharmacy-adjacent medical offices, which is a fundamental convenience for our clients and patients. We offer medical consultations at around 50 percent of our locations, which means these new 100 offices will help us to complement our services.
Q: What other partnerships or alliances is Farmacias Benavides developing to improve its operations?
A: As members of the Walgreens Boots Alliance (WBA), we are exploring other complementary business alternatives with global WBA partners that we will eventually communicate and that are mainly aimed at increasing the available solutions in health and well-being. We also developed a partnership with FedEx, which we are in the process of deploying throughout the country. This alliance is intended to replicate our relationship with the company in the US, which allows patients to use our stores to send and receive packages nationally at convenient prices. In some cases, our locations are even more convenient than FedEx’s. This alliance is an important enabler because e-commerce players will be able to use Farmacias Benavides as a last-mile service to deliver their products.
Farmacias Benavides is getting involved in financial services, as well. We are creating alliances with different players so clients can have the opportunity to pay for public services and make other types of financial transactions. We already have more than 200 available payments, which complements our value offering and increases the convenience of our locations at a national level.
Q: What are Farmacias Benavides’ main three goals for 2019-2020?
A: We want to continue with the incorporation of products of exclusive brands from the Walgreens Boots Alliance that might be attractive for the Mexican market. Our second goal would be to conclude the transformation of our sales points to ensure the same value proposition and physical appearance at all our locations. Finally, we want to become the reference point when it comes to filling prescriptions.
REGIONAL SPECIALIZATION SECURES SUCCESS
MIGUEL REYES
General Manager of Farmacias Purex
Q: How relevant is the role of Mexican pharmacies in providing quality pharmaceutical and health services?
A: It is all about training and sharing knowledge on new medications, new protocols and new information regarding health conditions. We maintain good communication and relationships with laboratories that study conditions and develop new products. In our training programs for employees, we ensure we are up to date with the newest releases in the field. At the same time, we are implementing a service protocol that addresses all interactions between the employee and the patient, including welcoming the customer, asking their name, and even giving advice on savings they can make with particular purchases. It is always about finding new openings to improve your service.
Q: How would you describe the general status of medicine sales in Mexico?
A: The market is very competitive. With chronic diseases like diabetes on the rise, consumption also is increasing. Many people are looking to treat and cure their conditions. Large chains, such as Benavides, Guadalajara and Ahorro, have many points of sale in comparison with independent pharmacies with a more local reach. Every local pharmacy is competing with a big national network. This is challenging because their volume of business can never reach that of large chains. We are a medium-sized player with 40 points of sale and are pushing to compete with bigger players.
Big networks can maintain slightly lower prices for certain medications, with a difference of two or three pesos. But one of our main differentiators is our service and the quality of our people. Another is how we provide for the specific needs of each patient. We always work to get the patient the particular medication they want. If we do not have it, we can order it. Building a personal relationship and being there for them is very important.
Farmacias Purex has been in northeastern Mexico for over 50 years. The company has a network of pharmacies in Nuevo Leon, Tamaulipas and Coahuila and is exploring the possibility of developing a mobile app for delivery services
Q: What mechanisms or strategies could the private and public sectors implement to reduce medication sales on the black market?
A: There is a need for mechanisms to verify the source of the medication, which must also be applied at a digital level for e-commerce. At the end of the day, consumers want to know that their medication is safe and comes from a well-regulated point of sale.
Q: How has your business strategy evolved in response to the growing number of e-commerce companies and startups?
A: We do not have an e-commerce platform but we are working on it. Platforms like Amazon are growing rapidly and other sectors, such as clothing and retail, have integrated them much faster. We are looking at a way to enter a collaboration with delivery service Rappi. The company is strong in the food-delivery sector and it is already working with pharmacies, such as San Pablo. This kind of collaboration offers a great opportunity to reach our clients.
Q: Which new services would you highlight as gamechangers in the market?
A: I think one of the important areas of interest is psychological well-being. We know right now that the rhythm of life in big cities can affect people’s mental health. This is an area where we can provide answers through consultations and followups. Elements such as workplace pressures and fast-paced activities are related to conditions like gastritis and many mental issues. It would be good to have a program to guide people, giving advice and working toward prevention.
Q: What are Farmacias Purex’s main goals for 2019?
A: Our plan for the second half of 2019 is to open four or five new pharmacies in Victoria, Tamaulipas and Piedras Negras, Coahuila. We are not moving to other regions. We participate in a pharmacy association in which each chain has agreed to focus on a particular geographical zone and we have decided to respect the areas of other members. We are present in Tamaulipas, Coahuila and Nuevo Leon. We also have a pharmacy in Mexico City, but this for subrogation reasons. We also plan to remodel our pharmacies to create a pleasant environment and to provide excellent service.
USING ELECTRONIC PLATFORMS TO BRING SERVICE TO NEW LEVEL
GUILLERMO MARTORELL Director General of Grupo RFP
Q: Grupo RFP launched a digital platform for the pharmaceutical sector. How is this platform performing?
A: The platform is now in its trial period. Scotiabank initially authorized it and provided the opportunity. It was built and administered by a company called We Company in a strategic alliance with us. AXA, Santander and Banrural have now joined too. The goal of the platform is to make health services more efficient by allowing the patient electronic access to all kinds of services. The platform will include insurance agencies, diagnostic laboratories, doctors and a network of pharmacies. We have a project mounted on the platform called AIRE (Smart Electronic Recipe Management), which manages all these players in relation to our patient. As we advance, we will get more and more players involved. At least in the private sector, the whole country will be integrated. This will drastically reduce the time between providing a diagnosis and handing the medication to the patient. This will have a positive impact on both the quality and the costs of the service for the client.
Q: How is Grupo RFP working to increase its attractiveness in terms of electronic sales and delivery of medicines?
A: From a regulatory point of view, there are still certain products that are controlled or specialized to such a degree that they need to be administered by a person and cannot be bought on the internet. If you can receive the required attention by a doctor through the cloud and get an electronic recipe, then even these medications can be delivered to your house directly. The authorities will ultimately have to give permission for this. To increase our own attractiveness, we want to provide a bigger service than just medicine delivery. It is important that we help patients with orientation, providing them with the right information through the different phases of their treatment. This is particularly relevant when it comes to chronic diseases. It is also something which we continue to focus on at our pharmacies.
Q: How is Grupo RFP helping to increase access to healthcare and medicine across the country?
A: The majority of medication is still acquired through consultations with doctors and health professionals. Many
people in Mexico do not have access to banking services. We should be offering alternative payment methods because not everything should be done with bank cards or cash. We are launching a project soon where we will introduce a card that is not tied to a bank and offers credit to clients to buy medication. The service will be very simple. Patients will not have to wait for a bill or wonder what these bills mean. You will be able to have insight into your credit, and either have a debit or credit card model. People will need to pay off the credit after a week, but they will not have to consult banking services. This will help people get more access.
Q: What are Grupo RFP’s top goals for 2019?
A: This year, we are looking to employ new resources to regain organic growth. In terms of openings, we are not finished with the consolidation processes we pursued last year and we hope to open new locations across the country in 2019. We will be doing this in areas where we already operate and not in new areas. These areas are Bajio, Colima, Michoacan, San Luis Potosi, the metropolitan area of Mexico City, Puebla, Veracruz, Tabasco and Chiapas. We are also working toward incorporating new networks. At the moment, small groups of pharmacies around the country are suffering from competition with larger groups. We can work together to provide the benefits of economies of scale, and achieve higher rentability. Ultimately, a certain type of acquisition will have to happen. It is important for us to maintain a regional identity for these pharmacies. The back-office operations are standardized for all pharmacies but the front-office image should remain specific to the region. We are also appealing to a sense of nostalgia and the relationship people have with their pharmacy. They are going to the pharmacy where their parents and grandparents went, and where their kids will go in the future.
Grupo Regional de Farmacias Productivas (RFP) is a group of pharmacy chains that includes Farmatodo, Nosarco, Farmacia de Dios, San Francisco de Asís, Santa Cruz, Farmacentro, Union and G&M
OMMNICHANEL STRATEGY INCREASES ACCESS TO HEALTHCARE
RICARDO MARTÍ
Commercial Director Pharmacy, Health and New Businesses of Walmart, Bodega Aurrera, Superama and Sam’s Club
Q: How does Walmex help increase access to healthcare?
A: Our goal is to improve the quality of life of Mexican and Central American families. Walmex is operating in over 648 cities in six countries: Costa Rica, El Salvador, Guatemala, Honduras, Mexico and Nicaragua. Our infrastructure covers the needs of 85 percent of the population of the regions where we operate and we made sure to be only 10 minutes away from our clients’ homes. Walmex receives over 5 million clients per day, which provides a great opportunity to increase access to health. Our strategy for the healthcare sector follows five pillars: growth, omnichannel, productivity, agility and people & culture.
Our goal is that patients can access the medications they need using the channel and payment method of their choice. We are constantly innovating to open new sales channels for our clients and to develop end-to-end strategies that ensure that the product is available as fast as possible. All our decisions are focused on the patient. For us, speaking about health means speaking about well-being, so we treat these topics together. We want our patients to perceive us as experts in our field so they can trust us.
Q: What is Walmart’s approach to healthcare provision?
A: We approach access to health from different perspectives. The first is physical access, which we handle through our over 2,400 points of sale in Mexico where we distribute OTC analgesics, anti-flu agents and vitamins, among many others. Of those stores, 1,370 also sell prescription medication and 340 have a doctor’s office. The second perspective is economic. We all know that medicines are expensive due to the high costs to research and develop new products. However, we try to negotiate better prices with laboratories to be able to offer our clients the best available price. We also decided to develop our own brand of generic medications, which are just as effective as patented medicines but
Walmex (Walmart de México y Centroamérica), part of Walmart Inc., operates retail stores in 648 cities in Costa Rica, El Salvador, Guatemala, Honduras, Mexico and Nicaragua. It also has 26 distribution centers
represent savings of 20 to 80 percent. Walmart offers more than medications; we offer everything related to health, from nutritious foodstuffs to exercise tools, which are often key to addressing obesity-related diseases that are increasingly common among the Mexican population.
Q: How does Walmart guarantee the quality of the medications it provides?
A: Our brand Medimart has become a reference point in the pharmaceutical industry. It covers a wide variety of products, from OTCs to specialized medications for many diseases. This brand follows strict quality guidelines from production to the moment medications are sold. We ensure that the labs that manufacture our brands adhere to all existing COFEPRIS regulations.
Q: How does Walmex differentiate form other points of sale in the competitive generics market?
A: Our differentiation is in our value proposition: making health available to everyone. There is a Walmart 10 minutes away from 85 percent of the population because our goal is to be close to anyone who needs our products. Healthcare should not be linked to income. For that reason, we want to offer a diverse portfolio of products that range in price so everyone can afford them.
Q: How is Walmex introducing new technological trends such as Big Data to improve its operations?
A: A trend we are seeing in the market is data mining as the more information we have about patients, the better service we can provide them. We are extremely careful in our operations to ensure our client’s privacy is protected. New technologies are increasing connectivity among systems and among people. Smart watches can communicate with smartphones, which in turn can convey information to doctors on the patient’s health. Doctors can analyze this information to make immediate decisions and recommendations to their patients. Technology is opening the door to many opportunities. We are seeing that pharmacies are increasingly developing an omnichannel strategy for sales to allow clients to buy their medicines in any way they prefer, either through apps, online or at stores.
SUPERMARKETS BECOMING KEY PLAYERS IN PHARMA MARKET
Supermarkets are increasingly benefiting from their appeal as accessible shopping destinations to grow sales of pharmaceutical and healthy lifestyle products. “Supermarkets are naturally a one-stop destination where the whole family can find the products they need,” says Christian Vega, Commercial Vice President of HEB Mexico.
Rather than take an extra trip to the pharmacy, shoppers can find all the products they need at the same place they buy their weekly groceries, making supermarkets important players in the pharmaceutical sector. With presence in a number of Mexican cities, HEB has its own products and services in what it refers to as its ”Health System.” This includes the same catalogue of medicines that clients would find at conventional pharmacy chains, including specialized medicine.
To build a broader profile, HEB Health System also offers products such as dermatological cosmetics, nutritional and sanitary products for babies and a range of products for healthy living. Service is provided not by regular supermarket staff but a team of in-house doctors, pharmaceutical professionals and lifestyle advisers who follow rigorous programs to be up to date in terms of common diseases and treatments, according to Vega.
“HEB Health System even has optical services and a loyalty program for customers with chronic conditions. At the moment, HEB is the only supermarket that offers the seasonal flu shot in winter,” he says.
Vega points at the healthy lifestyle segment as an opportunity to have an advantageous value proposition over its competition. Supermarkets have greater access to information on customer food and beverage preferences and can adjust their products accordingly. “We identify the best foods and superfoods and complement eating habits with vitamins and supplements to create a complete wellness lifestyle,” says Vega. Personal care can combine supplements, cosmetics products and food and beverages with customers’ wishes for natural ingredients with less or no added chemicals.
HEB is aiming to build a prevention mindset among its customers so they can develop a self-care attitude. Vega points out that customers do not have to be sick to get advice from a health professional. Through its e-commerce platform, the company hopes to anticipate sales trends and create an extra channel to reach its customers.
“We identify the best foods and superfoods and complement eating habits with vitamins and supplements to create a complete wellness lifestyle”
Christian Vega, Commercial Vice President of HEB Mexico
Another benefit that supermarkets may be able to offer is better prices. “Our generics catalog can save customers up to 50 percent in terms of price.” The appeal of generics is particularly strong in Mexico, where many people prioritize price over quality or brand recognition. Considering that supermarkets offer a more diversified portfolio beyond the pharmaceutical area, they have more flexibility to offer discounts on pharmaceutical products by dividing margins among different products.
Some pharmacies have the advantage of buying products through their supply chain from producers who belong to their own group. “We work to get better costs from our vendors to have a highly competitive price compared to other pharmacies, supermarkets or traditional medication distributors,” says Vega.
Supermarkets like HEB investing in teams of professional staff with expertise that goes beyond simple medical indications is likely to make these actors a stronger force in the pharmaceutical market. Apart from having their own pharmaceutical products, supermarkets could also venture into potential partnerships with existing pharmacy chains. This would provide market expertise, improved purchasing strategies and name recognition, which are among the main advantages that supermarkets have over traditional medication retailers, as Vega highlights.
However, Vega points to the need for constant innovation and the importance of embracing new digital solutions to retain this advantageous position. “Our greatest challenges are to start working on new sales trends by adopting new technologies through omni-channel strategies, innovative projects within our stores and our digital platform and the opening of our first supply center for e-commerce,” says Vega.
DIGITALIZATION MAKES ITS WAY TO THE PHARMACY SECTOR
“The industry is constantly evolving, which means we must either innovate or die”
RAÚL CABALLERO, Director General of Farmacias Especializadas ProbeMedic
Pharmacies and pharmaceutical suppliers in Mexico are facing rapid changes. On the one hand, larger pharmacy chains are pushing out smaller independent branches. On the other, the digital marketplace is making consumers pickier in their product choices and how they want them to be delivered. “The industry is constantly evolving, which means we must either innovate or die,” says Raúl Caballero, Director General of Farmacias Especializadas ProbeMedic (ProbeMedic).
Aside from product diversity, customer demands have had a wider impact on companies like ProbeMedic. The company’s mission is to provide highly specialized medical products that sometimes cannot be found at regular sales points, including drugs, patented medicines, medical equipment and supplies.
ProbeMedic works with distributors, pharmacies, hospitals and banks and has its own points of sale to sell directly to patients. The company started in 2011 with a strategy specifically focused on insurance agencies and banks, which still represent most of its operations. Eventually, ProbeMedic broadened its services to hospitals and its own points of sale. Today, it has nine locations, five in Monterrey and the rest in Mexico City, Guadalajara, Puebla and Tijuana.
Due to its specialized profile, ProbeMedic’s portfolio could seem high-end but according to Caballero, the company maintains strong relationships with the country’s most important laboratories to provide products at a competitive price.
Customer service is another essential factor in staying competitive in an increasingly crowded market. Caballero highlights ProbeMedic’s unique approach to patients as an advantage of being a family-owned business. The company offers loyalty programs and other special offers and has developed technological solutions, including an app that allows homebound patients to order their
treatments online. This service is provided at a national level without additional cost, regardless of the product.
To deliver its products, the company works with all major parcel delivery services. When dealing with hardto-reach areas, Caballero says “ProbeMedic always tries to have one of its collaborators deliver the product directly.” Infrastructure and climate conditions are two major challenges for home deliveries, but the company’s relationships with larger parcel services proves an advantage.
Due to greater consumer consciousness of environmental issues, ProbeMedic has also adopted a more environmentally friendly stance, which has resulted in adopting biodegradable packaging for a range of its medications.
In the area of social responsibility, the company founded a group called Socio Enfermerías to provide services to patients that go beyond medications. One group of employees helps patients to prepare the paperwork needed for insurance companies, banks and hospitals. Another area offers nutritional and psychological support. “One activity here is free yoga classes for people who suffer from cancer and multiples sclerosis,” says Caballero.
From a commercial standpoint, ProbeMedic’s goal is to always continue growing, according to Caballero. However, doing this by adopting technologies can increase access to health services. ProbeMedic’s strategy is also in line with the President López Obrador's administration’s plan to make healthcare more accessible to the vast majority of the population. The challenge in the adoption of these technologies will be to maintain the quality of service that traditionally comes through personal contact between the healthcare professional and the patient.
Some companies are already trying to bridge this gap by offering video calls and chat services to connect healthcare professionals with patients over large distances. However, it is precisely Mexico’s challenge of having a large remote population that is pushing technology forward. There is no doubt that private sector innovation will continue to play a role in transforming healthcare, says Caballero. “The idea is to always benefit the patient.”
ATTENTION, CLIENT SERVICE MAKE A DIFFERENCE
FRANCISCO CANTÚ
Director General of Fármacos Proasse
Q: How do you expect the traditional pharmacy model to change as a result of technology and digitalization?
A: Technology will play a fundamental role because it will help bring us closer to potential clients. We believe the implementation of apps will be key, by helping us to anticipate product demand more easily. This will help us to adapt and provide better service, improving client satisfaction. Patients with chronic-degenerative diseases, diabetes or hypertension, in particular, could see a healthy benefit because their medication does not change over time.
We can easily use technology that is already available and adapt it so it becomes a useful tool for both the patient and us. An example could be an app that consistently reminds patients when to take their medications. Through these reminders, patients would feed information into the app, letting us know how advanced they are in their treatment. At the same time, we would be able to contact patients and let them know when their prescription needs refilling. They could then program the delivery of the medicine.
The information generated from the app could have several uses, not only for us but also for insurance companies, which would greatly benefit from real-time information on patient behavior. For instance, a diabetic patient needs to follow a rigorous and continuous treatment. It is in the insurance company’s interest to help patients follow their treatment correctly, given that this lowers risks and potential costs. We could generate interesting synergies with insurance companies by finding elements that could motivate patients to follow their treatment correctly.
Q: With which insurers does Fármacos Proasse work and what are your expectations regarding these alliances?
A: Our company is focused on providing services to insurance companies. It is a market niche in which we have always been, with these companies representing about 60 percent of our clients. The other 40 percent is made up of hospitals. These two niches are important for us and we have generated alliances in both segments. In 2018 and 2019, we consolidated alliances with some of the most important
insurance companies in Mexico and we expect to keep growing alongside these players over the next years. Our main competitive advantage is that we are a company that is close to its clients and is always catering to their needs. We offer a differentiated service and provide a faster response to any request. In addition, our approach with clients is more direct.
Q: How viable is it to have medicines with THC components in the Mexican market and will specialized pharmacies become the sales points for these medications?
A: We would have to analyze it just like any other medication. As with many other commercialized products, the main problem is the dependence that it might generate and its long-term effects. A well-regulated and supervised market could be the ideal option for the commercialization of a product that is important and helpful for certain illnesses, such as epilepsy. These medications can have a positive impact but the market needs to be structured correctly.
Although specialized pharmacies could be points of sale, I believe these products should be commercialized as hospital products to ensure controlled distribution. However, this decision should come after a detailed analysis of the risks the product might entail. Like any other medicine, these products would need to be manufactured by a laboratory, guaranteeing that they comply with protocols and regulations.
Q: What are Fármacos Proasse’s goals for 2019 and 2020?
A: We want to continue growing as a company. Besides Monterrey, we already have a pharmacy for local service in Guadalajara and are expecting to open another one in Mexico City. We are analyzing the possibility of venturing into cities such as Mexicali, Hermosillo, Chihuahua, Merida or Torreon. However, before expanding anywhere, we need to consolidate our position in Guadalajara and Mexico City.
Fármacos Proasse is a Mexican company dedicated to the commercialization of highly-specialized medications, as well as traditional pharmaceutical products. It distributes its products among hospitals, clinics, companies, individuals and pharmacies
TECHNOLOGICAL APPROACH ALSO BENEFITS THOSE WHO AVOID TECHNOLOGY
EMILIANO HERNANDEZ LAOS Co-founder of Knaou
E-commerce is a fast and convenient alternative for buying almost anything, but online sales of medicine have yet to catch on in Mexico. Emiliano Hernandez Laos, Co-founder of Mexican pharmacy startup Knaou, believes change is on the way thanks to technology. “Without a doubt, technology will change the Mexican pharmaceutical sector as it has changed other sectors such as retail.”
Hernandez Laos adds that new technologies can address gaps in healthcare services, starting with a subscriptionbased system like Knaou’s that facilitates medication delivery. “People do not want to leave their homes and they do not want to spend time traveling to pharmacies or other stores for the products they need,” he says.
Technological tools have significant potential in the healthcare sector that goes well beyond home delivery of medicines. “Technology can impact every aspect of the health value chain. For example, it allows doctors to remotely monitor their patient’s health and their adherence to the medication. It also lets clients review and analyze the characteristics of the medication they use to give better feedback to pharmaceutical companies.”
Knaou operates as an online pharmacy selling a wide variety of patented and generic medications from brands such as Eli-Lilly, Johnson & Johnson, Sanofi, Beckman, Chinoin, Novartis, Roche, Janssen and Pfizer. Its business model also aims to create lifelong links with patients. “We are using our platform to provide a better service to chronic patients with high-ticket conditions like osteoporosis, cancer and geriatric needs. Platforms like ours permit closer monitoring of the patient and allow us to offer a personalized service that caters to the patient’s preferences,” says Hernandez Laos.
Knaou’s subscription system automatically monitors and delivers medications to patients. Hernandez Laos explains that patients, or their relatives, can simply upload their prescriptions and the system will automatically calculate the amount of medication the patient needs per month and deliver it a couple of days before the previous batch runs out. Knaou began operations in January 2019 working with
retirement homes. Now, it is looking to enter niche markets with few specialists, such as infectiology and hematology.
The company’s objective is to create loyalty among its client base. “Our alliances with doctors, pharmaceutical and insurance companies help convince our clients to try our solutions. After that, our customer service and smart prices convince them to stay. Loyalty is essential for online sales.”
The challenge, Hernandez Laos says, is to attract patients to the platform. “The most important KPI in online sales is conversion, which measures the percentage of people that enter the page form the ones that actually buy in it. Pet stores have the highest conversion rate at 14 percent but the conversion rate for online pharmacies is only 2 percent. Higher client loyalty means higher ROI on advertisement.”
Knaou hopes to improve the platform’s conversion rate in 2019, boosting it above every other online pharmacy. To do so, the company will focus on creating a personalized experience for each chronic condition and implementing state-of-the-art technologies. He adds that platform’s simplicity is an advantage. “Patients fill in the registration form just once or load it directly from one of the online prescription software programs in the market and then receive their medication every month, which is more convenient that buying it themselves when needed. This feature has proven popular with our clients.”
The company has 1,000 products on its webpage but if patients do not find the medication they need in the catalog, the company can often find it for them since it has access to over 20,000 products. Knaou’s portfolio was created through alliances with distributors but it wants to go a step further and work directly with pharmaceutical companies and target specific conditions. Although Knaou works mainly with geriatric institutions and private firms, the company has ambitious expansion plans. The startup wants to continue investing in technology and in software development. “Although we do have great prices, we are not a discount pharmacy. Our value proposition is based on technology and customer care. We are collaborating with allies like Prescrypto to eventually offer a fully digital ecosystem.”
LAB EYES NATIONWIDE EXPANSION
JOSÉ CARLOS PÉREZ Y PÉREZ Executive President of Grupo Diagnóstico Proa
Q: How did Grupo Diagnóstico Proa’s business strategy evolve to make it one of the largest players among clinical laboratories?
A: Laboratorio Médico del Chopo, which would later become Grupo Diagnóstico Proa, turned 70 in September 2018. The company grew under three pillars: placing patients and their doctors at the center of its business strategy, bringing services closer to the patient’s home and providing accessible prices. We started as a single laboratory and now we have over 280 franchises.
From the start, the laboratory’s goal was to be a onestop service provider for the most common tests required by doctors to save patients the need to visit multiple locations. The laboratory also incorporated radiology services. Rather than expand the existing location, we opened different branches to be closer to patients’ homes.
Q: What role does Grupo Diagnóstico Proa play in Mexico’s healthcare system and in increasing access to healthcare?
A: We have two clients: doctors and patients. The first are those who request the tests and the second are those who require them. Doctors diagnose and interpret the tests and we are the physician’s partners throughout the entire treatment. We are constantly organizing events and training sessions for doctors. We also have medical representatives who visit doctors on a monthly basis to collect their questions and to provide them with more information on existing tests.
Providing healthcare for all Mexicans is a challenge so big that it can only be addressed through joint efforts from all healthcare players. Our healthcare system is based on curing diseases instead of maintaining health through prevention. It is necessary for the public and private sectors to jointly develop a platform that allows the exchange of information, for instance through an electronic clinical file. Allowing individuals to have access through the cloud to all their medical data and to bring it to any institution the patient desires will allow care providers to increase the reach of their services and provide care to more people.
Q: Temasek and LIV Capital acquired 32 percent of Grupo Diagnóstico Proa’s assets. What does this acquisition mean for the company’s growth and local operations?
A: Among 25 venture capital firms, we chose those that best understood Grupo Diagnóstico Proa’s long-term plan: to expand throughout Mexico. We predict that the market will eventually consolidate into six to eight large players based on economies of scale, instead of the over 9,000 small laboratories that exist now. The alliance with Temasek and LIV Capital will give us the capital to continue growing and expand our reach to the rest of the country. If the conditions are right, Grupo Diagnóstico Proa will launch an IPO. We plan to continue opening offices in the states where we currently have no presence, preferably through an association or the acquisition a local laboratory chain. But if this is not possible, we are always prepared to open a new branch.
Q: What new services is the group developing to address Mexico’s changing medical needs?
A: From the start, Grupo Diagnóstico Proa focused on diabetics. First with glucose tests; then the glucose tolerance curve, which requires the introduction of glucose and measuring its digestion hourly, and lastly with hemoglobin glycosylate tests. This last one allows more precise monitoring of blood glucose. We also have a 72-hour blood test, which connects a small monitor that continuously measures the patient’s blood glucose over three days.
The group has strong capabilities in diagnostics and radiology, for which we are the largest group in Mexico with over 1,160 assets such as 27 MRI systems, 57 computed tomographers, 3 PET/CT, 183 ultrasounds, 182 general XR equipment, 82 mammography equipment and more than 600 other multi-purpose systems including densitometry, cardiology and colposcopy.
Grupo Diagnóstico Proa, founded in 1948, owns several diagnostics chains, including Laboratorio Médico del Chopo, Imagenus, Care Diagnostics and Acceso Salud. The group has over 3,500 employees
PREVENTION BENEFITS PATIENTS, LABORATORIES AND THE HEALTHCARE SYSTEM
MARIO SICILIA Director General of Laboratorio Médico Polanco
Q: How does Laboratorio Médico Polanco (LMP) differentiate itself from other laboratories that offer similar services?
A: Most laboratories offer a similar portfolio of tests. Differentiation is mostly achieved through branding and franchise location. Most patients do not see quality as a differentiator as they believe tests from different laboratories will give equal results. Some labs have differentiated themselves by offering lower prices due to their high volume of samples. Others have found differentiation by presenting themselves as premium services, mainly relying on customer experience. While we do offer groups of tests to identify specific diseases or for different segments of the population, these have not yet worked as a differentiator. Our main opportunity will be the introduction of many innovative tests being developed in other countries, which have allowed for prevention strategies for certain diseases, including diabetes, obesity, hypertension and cancer. We are also selling testing services to hospitals through referrals and in this segment, quality is an important differentiator. The quality of our tests is supported by the College of American Pathologies.
Our differentiator should be innovation but there is still a long way to go to achieve this. There are two ways to innovate. The first is through the type of tests that a lab can offer to the market. The second is through the way laboratories interact with the patient, for instance by delivering results at home or allowing their doctors easy access to the patient’s results.
Q: How is LMP investing in state-of-the-art technology to improve healthcare outcomes?
A: Our laboratories are an intermediary between technology and patients. LMP, for instance, has exclusivity for a diabetes test that allows us to diagnose prediabetes. We are investing in a wide variety of solutions that result in high ROIC for patients and institutions. For example, treating a prediabetic costs the
Laboratorio Médico Polanco has 29 years of experience providing laboratory and X-ray services. Its portfolio now includes clinical analysis, parasitology, immunology, hematology, microbiology, clinical chemistry and cytology
government from MX$3,000 (US$158) to MX$5,000 (US$263) per year. Treating a stage 3 diabetic costs the government MX$380,000 (US$19,195) per year. Prevention strategies can result in great savings and they should be prioritized in the following years, resulting in significant market growth.
Q: What role should prevention take in the development of sustainable strategies for the healthcare system?
A: Prevention should be key in the government’s strategy to treat diseases. While COFEPRIS, under former Minister of Health Mikel Arriola, began implementing prevention strategies to control healthcare costs in the long term, these policies have now changed because their results are neither immediate nor easy to observe.
In Nuevo Leon, the previous administration created a program where IMSS contributions would be reduced if employees subscribed to prevention programs. The objective of this program was for institutions to develop their own prevention strategy to reduce the incidence of future diseases, especially diabetes, obesity, hypertension and some types of cancer. Agreements of this type will bring significant benefits to the public sector and to diagnostics laboratories but they have not been popular because their results were not easy to see.
Q: How can the clinical laboratory industry grow in terms of presence and volume of tests?
A: The clinical laboratory sector in Mexico is worth about MX$30 billion (US$1.57 billion), not including the expenses of the public sector. About a third of these services are provided by hospitals and the rest through the many franchises of clinical laboratories. The industry has two significant opportunities for growth: coverage and density. There are many areas in Mexico that still do not have access to qualified clinical laboratories. It is also necessary to develop and enforce regulation that holds clinical laboratories to higher standards of quality. Poor clinical studies may mislead doctors and patients and cause diseases to go unattended for longer periods, leading to medical complications that can increase the overall cost of treatment. Blood tests are much more standard, but they do require certified processing centers that follow best practices to ensure reliability of test results.
REGIONAL EXPERIENCE PROVIDES ADVANTAGEOUS POSITION
María
de la
Paz Director General of Laboratorios Clínicos de Mérida
Manager
Q: What strategies have you implemented to differentiate from other laboratories?
DD: We have gained significant experience since we opened in 1975. We were the first to start using automation and implemented a special system for clinical laboratories. These steps, and retaining people who are excellent at what they do, have helped us grow. Our main differentiator is the quality of service offered by our personnel to every patient.
Q: Why did the company choose to offer testing at home?
MP: At-home testing has an obvious benefit for those who are less mobile, such as the elderly and those who have recently had surgery or have been in an accident. However, many people have started requesting to have their blood taken at home instead of the laboratory despite not being impaired in any way. We schedule an appointment and always ensure we send someone who is experienced in the required procedure. After taking the sample, we run tests at the laboratory and then provide the results by email.
Q: Where do most of your patients come from? Are they private or have they been referred by an insurance company?
DD: Our client base is highly diversified. About 50 percent of our clients come from companies with which we have agreements. This includes insurance agencies and manufacturers. Our main insurance partner is AXA, but we work with all companies. The other 50 percent of our client portfolio includes people who know us or have been recommended by doctors.
Q: What strategies are helping you to grow your client base?
MP: On the clinical side, we are introducing new types of equipment and tests, including ultrasound, X-rays, spirometry and electrocardiograms. These new technologies also allow us to be more of a diagnostics center as opposed to just a clinical laboratory. In terms of reaching the general public, we advertise in places where we expect to find potential clients. We have also visited colleges and associations where doctors come to us and talk about what we offer.
Q: How do you deal with growing competition in the Yucatan area?
DD: Many large laboratories have operations in this region, such as Laboratorio Médico Polanco, Laboratorio Medico del Chopo, Salud Digna and Star Médica. To remain competitive, we must be 100 percent reliable. We always run quality-control tests before running client tests. Time efficiency is also a huge advantage we can offer. All our operations are in the region, so we do not have to send things to other places in the country.
We have been in Yucatan for a long time and that has allowed us to build many local relationships. However, if a competitor can offer a better service for a lower price, then obviously clients will go to them. Therefore, we must always continue to strengthen our operations and reach out to potential clients. Our plan is to contact local universities and demonstrate who we are and what we do. As a result, doctors graduating from university will know our brand. In terms of service, we always aim to provide a pleasant experience. This means tests should be carried out with little waiting time and those running the test should always have an ear to listen to the patient so they feel cared for.
Q: How does Laboratorios Clínicos de Mérida contribute to strengthening prevention strategies?
DD: We have been doing campaigns for many years now, targeting men, women and the elderly. The goal is to detect diseases at an early stage. There has to be a change in mindset so people undergo checkups before they actually have symptoms. At least once a year, we organize public activities where we talk about particular diseases and conditions. We also work with the Red Cross to provide tests at very low fees. Ultimately, prevention and early detection are far better options for people, not just in terms of health but costs of treatment, too.
Laboratorios Clínicos de Mérida offers its services to individual clients, insurers and other companies. It participates in several health checkup campaigns and works with foundations such as FundHepa and the Red Cross
Daniel Duarte General
of Laboratorios Clínicos de Mérida
SUCCESS IS ALL ABOUT QUALITY NOT QUANTITY
“Public policy is limited. You can promote clinical testing for the population but public chains are not necessarily going to offer testing that is trustworthy and of high quality”
Oswaldo Basto, Medical Director of Quimialab
Growth in the Merida area has led to an increase in medical laboratory offerings and related services in the region. This has forced local players to compete with larger laboratory chains, says Oswaldo Basto, Medical Director of Quimialab. “Growth in Merida has attracted laboratories from the center of the country, such as Laboratorio Médico Polanco and Laboratorio Médico del Chopo.”
Quimialab, a laboratory for clinical analysis based in Merida that offers services to individual clients and companies, is making personalized service its key differentiator against new competitors entering the market. “Service is the most important factor and it must be personalized for every client. All companies can do the same in terms of promotions and pricing, but the care and attention we offer is unique,” says Basto.
Given its local reach, Basto says Quimialab has created a strong bond with the local community, which has helped the company in terms of recommendations. “Our reputation has spread through word of mouth and we are often recommended by locals.” Even though the arrival of new players spurs competition in the local market, Quimialab is not focusing entirely on competing with large chains. “We do not necessarily see them as competition because they are still setting up operations in the region. These laboratories are well-known in central Mexico but not here. Having said that, their reputation increases as more people migrate to the southeast.”
Regardless of their popularity, Basto says that quality is a decisive factor in terms of competition. “We are certified by PACAL and have our own internal certifications. We only use reagents of the highest quality, as well.
Some large pharmacy chains also provide services in clinical analysis but I do not consider them high-quality alternatives.”
Quality in medical laboratories becomes even more relevant considering the high-profile Merida has been cultivating in terms of medical services. High-tech medical services, as well as advanced medical treatments offered in the region have helped in the creation of a medical tourism industry, which creates more opportunities to reach new clients, according to Basto. “People come from Tabasco, Campeche and even Belize to get treated at Hospital Faro del Mayab and Clínica Mérida,” he says.
Medical tourism has helped Quimialab to grow its client portfolio, but Basto says the company has a strong focus on private clients and is trying to venture into the corporate and institutional arena. “Penetrating this market is not necessarily easy. We have to find the best communication channels. Many companies see laboratory analysis for their employees as a significant investment.”
Every client has different needs, which is why Quimialab has made significant efforts to diversify its portfolio. “Our clients range from an antidoping agency to a security company. Right now, we only work with small companies. We are trying to target larger players and manufacturers with local presence and more than 200 employees, like Bimbo, Pepsico and La Costeña.”
While Quimialab has a strong foothold in the local market providing laboratory services to different segments of the population, Basto says the industry still needs more coordinated efforts to guarantee access to quality healthcare in early diagnosis and prevention. “Public policy is limited. You can promote clinical testing for the population but public chains are not necessarily going to offer testing that is trustworthy and of high quality.” An example of this situation is that there are no specific efforts to support labs to meet quality standards, Basto adds.
Still, Basto remains confident about Quimialab’s capabilities and continues working on generating growth for the coming years through alliances. “We will build our brand through various platforms to reach as many customers as possible. We are working on agreements with insurance agency Allianz, the American travel company Quality Travel and the Mexico City-based company Telemédico.”
STRENGTH IN A DIVERSIFIED PORTFOLIO
RAÚL SOLÍS
Administrative Director of Laboratorios Diagnóstica
Q: What strategies have you implemented to remain a leader in clinical analysis in southern Mexico?
A: We are regulated by various quality standards, including ISO 9000. We constantly search for ways to improve, both from a clinical and administrative perspective. We are based in Villahermosa but our services reach the whole central and southern region of the country. We are active in Tabasco, Campeche, Quintana Roo, Yucatan, Chiapas and part of Veracruz. We are not physically present in all these states with a laboratory of our own but we work with various local laboratories. Our testing facilities are in Villahermosa, Merida and Queretaro. In Mexico City, we are in negotiations to offer our services to a hospital and we have a presence in Guadalajara but under a different name, also carrying out the administrative management of a laboratory there. We are also looking at potential opportunities in the north.
Our main differentiator is service. Anyone can compete in terms of price. We want to offer a high-speed service, so people with urgent situations can be helped quickly. We also have advanced equipment for accurate and rapid testing.
Q: What is your most popular service from your biochemical and immunological analysis and genetic testing portfolios?
A: Generally, routine packages of complete checkups are the most common. These include a number of biometric indicators. You do not have to be sick to take these tests. We also offer specialized testing and if other laboratories do not have the required equipment, they ask us to conduct their tests. We offer DNA tests for example. We have a specific test where blood is taken and we can determine the patient’s ancestry. People can find out what parts of the world they come from. This test is quite popular and can also be used as an indicator of genetic predisposition to certain diseases.
Q: How did you become a service provider for smaller laboratories?
A: We started operations in 1993 by working with a clinic in Villahermosa. Doctors were helpful in providing feedback on our operations, which was ideal, considering we were new to the health sector. As we grew, we established our own laboratories and began to explore collaborations with others.
We have advanced equipment for conducting highly reliable tests. One of these is Atellica, made by Siemens, but our equipment comes mainly from European suppliers.
Tests must be precise to reduce the amount of active ingredient wasted. Small laboratories that do not have access to this equipment need to have large volumes of samples to make their operations efficient. Without a certain number of patients, you have to throw your active ingredient away.
Q: How are innovations in technology and artificial intelligence impacting laboratory operations?
A: Advanced analytical testing equipment like ours allows us to test and gain the precise information that doctors need. They also generate large amounts of data that provide new insights into a patient’s health. Knowing where patients come from and what tests they undertake is also useful in determining what next steps we should take to grow our business across the region.
Generally, service operations have become much more dependent on digital platforms. Our website has been updated over the last two years and is now a portal for accessing test results. However, we have also been looking at possibly sharing test results with clients through alternative digital platforms, such as WhatsApp.
Q: How do you think laboratories can participate in prevention strategies?
A: Doctors recognized the importance of testing for early detection but were not walking the walk. People in general find it unnecessary. In Mexico and Latin America, the culture of selfcare is lacking. People think they are all going to be fine and grow old, so they do not even contract insurance. You do not have to be sick to go to a laboratory and have a checkup. Prevention is always the better option.
Laboratorios Diagnóstica is based in Villahermosa, with laboratories for clinical analysis also in Merida and Queretaro. Besides conducting tests for its own clients, the company also serves other labs
New sales channels for medications like retail stores and online platforms are forcing traditional pharmacies to innovate to stand out and maintain their market share. This phenomenon is also leading new entrants to take an increasingly important and comprehensive role in healthcare, boosted by doctors at pharmacy-adjacent clinics available for consultations and to prescribe medications. Mexico Health Review spoke with pharmacies and retail leaders to understand how their companies are differentiating from other points of sale and innovating in providing care.
HOW IS YOUR COMPANY REVOLUTIONIZING MEDICATION DISTRIBUTION?
Our infrastructure covers the needs of 85 percent of the population in the regions where we operate. We have made sure to be only 10 minutes away from our clients’ homes. Walmex receives over 5 million clients per day, which provides a great opportunity to increase access to health. Our strategy for the healthcare sector follows five pillars: growth, omnichannel, productivity, agility and people’s culture. We are constantly innovating to open new sales channels for our clients and to develop end-to-end strategies that ensure that the product is available as fast as possible. All our decisions are focused on the patient. For us, speaking about health means speaking about well-being, so we treat these topics together. We want our patients to perceive us as experts in our field so they can trust us.
RICARDO MARTÍ
Commercial Director Pharmacy, Health and New Businesses of Walmart, Bodega Aurrera, Superama and Sam’s Club
We have created partnerships with players in the digital arena and e-commerce platforms such as Rappi and Cornershop. We started collaborating with both companies in the first half of 2019 and our expectation is that these ventures will help us become more accessible to clients that demand digital purchases and homedelivery services. Improving medicine availability is among our main priorities and it is a truly complex problem. In Mexico, recent studies show that a patient often needs to visit more than two pharmacies to fill a prescription. We have worked to ensure that Farmacias Benavides is the sales point where patients can find all their prescribed medications. We have made significant investments to improve product availability at all our locations by understanding consumer demand. We also are forming alliances with logistics experts to improve deliveries and to comply with customer expectations.
Director General of Farmacias Benavides
Many people in Mexico do not have access to banking services. We should be offering alternative payment methods because not every transaction should be done with bank cards or cash. We are launching a project soon where we will introduce a card that is not tied to a bank and offers credit to clients to buy medication. The service will be very simple. Patients will be able to have insight into their credit and either have a debit or credit card model. People will need to pay off the credit after a week, but they will not have to use banking services. This will help people get more access.
Director General of Grupo RFP
MACEDONIO GARZA
GUILLERMO MARTORELL
LEI Libra labeling machine
MANUFACTURING & SERVICE PROVIDERS
The elimination of a requirement that forced foreign drug manufacturers to build a plant in Mexico if they wanted to sell to the local market and the adoption of generics gave local manufacturers room for growth. International companies still see Mexico as an attractive manufacturing destination thanks to its low-cost labor and strict regulations. The pharmaceutical manufacturing sector has grown at an accelerated pace but challenges in recent years led to a gradual reduction in medication production. Companies face the constant challenge of improving and validating best practices, which are of the utmost importance to remain competitive in the business and an obligation for those that aspire to have a worldwide presence.
Manufacturing and Service Providers analyzes local capabilities for medication production in the country. Through the voice of supply chain participants in the medical devices and pharmaceutical sectors, this chapter discusses the challenges these companies face and how they influence other industrial sectors.
CHAPTER 8: MANUFACTURING & SERVICE PROVIDERS
166 INSIGHT: Philippe Fournet-Fayard, Eolis América Latina
167 VIEW FROM THE TOP: Gerardo Torres-Saptien, Grupo Rasch
168 VIEW FROM THE TOP: Madjid Quali, Vaisala México and Vaisala Industrial Measurements Division
169 VIEW FROM THE TOP: Jaime Cervantes, Vitalmex
170 VIEW FROM THE TOP: Héctor Tijerina, SELCI
171 VIEW FROM THE TOP: Nadia Rodríguez, Malvern Panalytical
174 VIEW FROM THE TOP: Franklin Feller, Valtria Engineering
175 VIEW FROM THE TOP: Pablo Pérez Gay, Rossbach México
176 VIEW FROM THE TOP: Ander Gentry, Gamma Biolabs
177 VIEW FROM THE TOP: Jorge Faugier, Indukern México
178 VIEW FROM THE TOP: César Rodarte, ARQmedyca
179 VIEW FROM THE TOP: Miguel Velázquez, Grupo Empresarial MDF
180 VIEW FROM THE TOP: Patricia Zurita, Eurotrials, a CTI Company
181 VIEW FROM THE TOP: Enrique Garza, CAPSU-GAMA
182 VIEW FROM THE TOP: Alonzo Autrey, DVA Mexicana
183 VIEW FROM THE TOP: Anil Andrade, ACG Group
184 VIEW FROM THE TOP: Melissa Rosales, RM Pharma
185 INSIGHT: Karen Hahn, ICON
186 VIEW FROM THE TOP: Arturo Rodríguez, INFINITE
187 VIEW FROM THE TOP: José Luis Jacques, Lavartex
TECHNOLOGY MANAGEMENT CAN TURN SPENDING INTO INVESTMENT
PHILIPPE FOURNET-FAYARD CEO and General Manager of Eolis América Latina
Many companies see technology as an expense and not an investment, which makes them minimize its importance. “Unlike other expenses companies make, technology is usually seen as unnecessary or postponable unless there is an immediate flaw that must be corrected,” says Philippe Fournet-Fayard, CEO and General Manager of Eolis América Latina.
The difference between technology being an expense or an investment lies in how the company manages its IT and IT budget. Eolis América Latina, an air treatment systems specialist for industrial processes, believes investing in environmental control systems contributes to generating greater productivity and safety in products and operations. “Expenditures that result in improvements are always solid investments,” says Fournet-Fayard.
Technology budgets, according to Deloitte, can lead companies from value preservation to value creation by driving business growth and operational efficiencies. However, greater spending on technology does not necessarily translate into greater value creation. Fournet-Fayard says that rather than investing in the latest technology, companies must look for systems that improve results, delivery times and processes. Within the different technological areas in which pharmaceutical companies can invest, HVAC systems are among the most important.
HVAC systems, according to the World Health Organization ( WHO), play a key role in preventing contamination, cross-contamination and other critical aspects that pharmaceuticals should consider while manufacturing drugs. “What can be measured, can be improved. By having better control of the environment surrounding a pharmaceutical production, the company is investing not only in technology but efficiency and product safety,” says Fournet-Fayard.
Environmental control is not only useful for pharmaceutical companies. Temperature, humidity and air movement management can be used to optimize other
health-related facilities. “Pharmaceutical companies have implemented these systems the most, but in recent years other segments, such as hospitals and laboratories, are becoming interested in well-designed HVAC systems,” says Fournet-Fayard.
The main reason, according to ASHE Health Facilities, is that these systems help control hygiene and temperature systems that are key in the health sector, in addition to reducing energy consumption. “Hospitals are interested in reducing nosocomial diseases. Meanwhile, laboratories want to ensure their tests are not contaminated or altered,” says Fournet-Fayard.
To maximize the benefits of HVAC systems, it is critical to choose the correct one according to the needs of the company. “No company is the same; it is important to have customized technology that is consistent with the company’s size, location, climate and even goals in terms of production and energy efficiency,” says Fournet-Fayard.
Characterizing these variables can be the difference between wasting resources and making a good investment.
“For example, if the purpose of the system is to control nosocomial infections, metrics to analyze should be the number of infections and its main drivers,” he says.
To choose the best technology, a company requires the help of an expert who knows the systems and the needs of the companies in the sector. Eolis América Latina’s 50 years of experience and a highly qualified work team can offer that. “Over the years, we have remained industry leaders because we know how to build solutions for each client, not only in health but in textile and industrial facilities as well,” says Fournet-Fayard.
Eolis América Latina’s goals are focused on creating solutions that include a combination of great technology and experienced professionals. The best way to do that is through the workforce, according to Fournet-Fayard. “We already have state-of-the-art technology, so Eolis América Latina will keep betting on training its people to maximize value and reliability for our customers,” he says.
QUALITY HEALTHCARE MEANS CLEAN HEALTHCARE
GERARDO TORRES-SAPTIEN General Manager of Grupo Rasch
Q: How important is pharma in your operations and how have you grown your position in this market?
A: About 85 percent of our business is geared toward pharma and it is the industry that has helped us reach our current market position. First, we introduced process equipment and gradually, demand grew for more diverse products and services. We also realized there was a need to provide our staff with specialized technical training. We have a system of certifications that, besides helping our staff provide a better service, generated loyalty and a sense of commitment among our people. Our goal is to provide a highly professional service, while maintaining a personal and effective connection between our employees and our clients.
Q: Of the different services and equipment you provide, which is most in demand?
A: We were pioneers in Mexico in providing clean rooms as a prefabricated module, which opened a whole new market niche. We design these in Europe through our alliance with Belgium’s Clean Room Consulting Engineering. However, our operations in Mexico are run by Mexican engineers and adapted specifically for Mexican and Latin American clients. We offer packages for clean room solutions with different specifications but all of them have the same level of quality. Our punches division is also an attractive and unique selection in our portfolio.
Q: What opportunities do you see to grow your presence in the market?
A: There are is a big difference between laboratories and hospitals. Mexican laboratories have the highest standards in the world and in fact, Europeans and Americans coming to visit them are often impressed by how advanced they are. The hospital field, however, still faces significant challenges in terms of standardization. Providing good healthcare cannot be just about providing medication and treatment; there needs to be a complete system controlled within a safe environment.
Hospitals in Mexico are regulated but guidelines are not as strict as on the laboratories and many people are
still dying from infections. We provide special services to battle biocontamination and prevent this, which could also help hospitals save millions by implementing our system.
Q: How committed has the public sector been in terms of increasing quality in hospitals?
A: Some private hospitals have invested significantly in creating safe working environments but the problem is still considerable in the public sector. The government is focused on increasing accessibility to medication and treatment but it should also invest in making hospitals safer. We are concerned about the distribution of resources in hospitals, especially since there is no door to knock on to offer technological innovation due to misconceived financial priorities.
Grupo
Rasch designs prefabricated
clean room modules in partnership with Belgium’s Clean Room
Consulting Engineering
Q: What are your growth expectations and main goals for 2020?
A: We want to maintain steady growth and to develop our staff’s capabilities. We also want to explore new markets where our solutions can offer an added value. This includes increasing our exports, which are still small. Regarding our other business verticals, there have been limitations in some of them. In the automotive industry, for example, only big companies are investing in new plants at the moment. However, these processes are cyclical and new opportunities will always come up.
Grupo Rasch helps health companies ensure the efficiency of quality management systems. Its services include sales of European machinery, preventive and corrective maintenance, sale of spare parts and clean-room services
ACCURATE MEASUREMENT MEANS HIGH-QUALITY PRODUCTS
MADJID QUALI
Country Manager of Vaisala México and LAM Regional Director of Vaisala Industrial Measurements Division
Q: How is Vaisala positioned in the Mexican market and what type of customer does it usually work with?
A: The life sciences sector has been one of our focuses globally since the beginning of our controlled environment business, and Mexico is no exception. Vaisala specializes in developing products for improving safety, efficiency and decision-making through environmental measurements and related services. The industry here maintains high standards with strong regulations, which means Vaisala has a lot of added value to provide. Both international and national companies have been our clients in Mexico for a long time. Our well-known brand provides unique solutions in all segments of the life science sector.
Q: How does Vaisala’ s offering add value to its clients?
A: Our typical customers manufacture, store or distribute expensive assets that are sensitive to environmental conditions, such as temperature, humidity and pressure. Our products and systems offer ways to measure these conditions and control them with a high degree of accuracy and reliability. In addition, they are easy to use and provide a beneficial cost of ownership. These factors are crucial in a technology-dense and highly-regulated industry.
Vaisala has pioneered innovative measurement solutions for over 80 years. We started in weather measurement when our founder, Vilho Vaisala, invented the operating principles of radiosonde technology for high-altitude weather measurement. In the 1970s, we moved into industrial measurements when we invented the modern way of measuring humidity with a capacitive hygrometer. We are a truly global institution that believes in the value of accurate measurement in solving the important problems of our day. We invest more than 13 percent of sales in R&D, with more than 22 percent of our people dedicated to this area.
Vaisala specializes in the development, manufacturing and sale of products and services for environmental and industrial measurements. It offers measurement instruments for humidity, temperature, barometric pressure, moisture, CO2 and more
Q: What companies will benefit from Vaisala's radio frequency communication network VaiNet?
A: Vaisala started its business in Continuous Monitoring Systems (CMS) when we acquired the logger company Veritec Instruments in 2010, and with this purchase made a decisive move into the CMS business. Since then, we have invested heavily in improving the view link offering, and in developing new products for the CMS line. One of our launches is our own RF communication network called VaiNet to allow unprecedented ranges (over 100m) in wireless communication over a private sensor network. A typical installation would be monitoring temperature and humidity in a manufacturing facility or storage area for pharmaceutical products or medical devices. This data can then also be used by a regulatory authority to validate that conditions set out in the norms are being met.
Q: How would Vaisala describe the state of measurement solutions in Mexico’s health sector?
A: A country with a large population and a geographical location near the largest market in the world is an attractive place for many pharmaceutical companies. Therefore, it is not a surprise to see Mexico hosting almost all of the largest pharmaceuticals in the world. A great deal of effort has gone into improving local processes as local regulations have become more rigorous and export has many requirements. However, significant investments need to be made for more accurate and reliable measurement technologies to ensure the integrity and safety of the products. The combined, coordinated effort of the different entities related to the sector is critical in this mission.
Q: Considering technologies like AI and Big Data, what do you think measurement systems will look like in the long run?
A: Real-time monitoring, data management and communication have been part of the design of many of our devices and systems. Following the trend of more comprehensive solutions, sensors will be even more reliable, adding flexible capabilities to be connected to a wider data control system. This will enable operators and users to take faster and more precise actions.
PUBLIC-PRIVATE PARTICIPATION NEEDED TO BOOST HEALTHCARE
JAIME CERVANTES CEO of Vitalmex
Q: How do Vitalmex’s certifications make a difference for customers who hire the company’s services?
A: In the health sector, we often talk about the state of hospitals and the infrastructure, but not about the human factor. At Vitalmex, we invest significant resources into creating the best working conditions because we understand that a company’s workforce is its main asset in an industry focused on offering services.
We hope that treating employees well translates to better care for patients. We try to share this with the industry through robust integrity and compliance standards, hoping that these will eventually be the norm. The government has already started to shift the industry toward this mindset with its Plan de Bienestar (Plan for Well-being) by evaluating companies based on their values and how they treat employees, patients and all other partners.
Q: What benefits does your system provide to the healthcare industry?
A: Vitalmex combines its knowledge, equipment, personnel and other key elements to deliver not only health products but also an added-value service through our consultancy that helps customers solve their needs regarding inputs and clinical management. We understand that patients want to receive the best service, which demands accessibility and a fair price.
Today, however, healthcare prices are fragmented. In Mexico, it takes seven steps to bring a product to the market, without taking distribution into account. This represents between 15 and 40 percent of the price of any new product. Logistics, meanwhile, contribute another 45 percent to the final price. These costs lead to patients paying way more than the original cost of manufacturing the new medicine. Our country does not have the financial capacity to carry this burden, so we need to re-organize costs within the public sector.
The key benefits we provide are efficiency, removing unnecessary expenses related to intermediary processes
and applying technology and innovation to counter the lack of good administration. Apart from cutting costs, information is also an important factor. Mexico does not have a strong national registry to adequately channel resources to patients. Without this information, we are going to continue making errors in health administration. There is also the problem of corruption and resources being wasted instead of being invested in patients.
Q: You employ an articulated service model. What is the difference with the integral model and how can the industry apply this model universally?
A: An integral model is based on packages that group laboratories, analysis, surgery and other activities. In the articulated service model, as we call it, companies focus on services and providing patients the best care throughout their treatment. This means building the know-how to define what technology and logistics the patient needs at all times. Building this approach requires investment, however, to develop the right teams and facilities to make this happen.
Q: How is Vitalmex helping bridge the gap between the public and private sectors?
A: We formulated a five-year plan to help the government create a model that allows better coexistence between the public and private sector. We have understood that this country does not need more hospitals. The existing infrastructure is underused, which mainly comes from a lack of cooperation between the public and the private sector. Many private hospitals are practically empty. If the government and private industry come to an agreement, we can avoid building hospitals and making unnecessary investments. We can standardize patient care through contracts, and providers like Vitalmex can work efficiently between institutions to cut costs.
Vitalmex sells, rents and loans medical equipment to hospitals and health centers. It also provides services such as consultancy on how to solve problems related to supply chain management, as well as medical and technical training
MEXICO WILL NOT MANAGE WITHOUT INNOVATION
HÉCTOR TIJERINA
Sales Director of SELCI
Q: What are the main benefits and added value your company provides compared to other equipment providers?
A: We participate in industries like pharma, chemicals and food and beverages, offering an integral solution that includes the technology from the different firms we represent. All our equipment partners are global leaders in their own area. In addition to having a team with a high level of expertise, we also try to provide equipment and services at a good price and with a strong aftersales approach. Although we may not be the largest equipment distributor in Mexico, we have a significant presence in the field of analytics through the Japanese brand HORIBA, which has 70 years of experience in the market.
SELCI’s main target clients are companies with budgets of at least US$100,000 per piece of equipment
HORIBA is the world’s third-largest company focused on analytics equipment and has trademark technologies for identifying and characterizing particle sizes through methods like laser dispersion. Particle size is important in many industrial processes because it reveals the properties of a substance and how it will aggregate or react. HORIBA’s technology can test particles regardless of their state, whether solid, emulsified or any other.
Q: How does SELCI manage its sales strategy and what are your growth plans regarding sales and distribution?
A: We work with laboratory directors, scientists involved in research and quality control and technology directors. On average, our clients are medium-sized companies with
Servicios Especializados para Laboratorios Clínicos e Industriales (SELCI) is a Mexican company founded in 1993 that provides equipment for laboratories, as well as installation and aftersales service
budgets of US$100,000 per piece of equipment. Although we are based in Guadalajara, our clients are spread across the country. We operate through sales representatives and sub-distributors but we are already looking at Mexico City as our next office destination. We are focusing on increasing our presence there, but it is not easy. The macroeconomic climate does not favor large investments at the moment and we need to find specialized people who know our products.
Q: What opportunities do you see for Mexico to advance as a technology and innovation hub?
A: Over the past 25 years, technology development has blossomed in Mexico. However, there is still a lack of awareness regarding the implementation and enforcement of manufacturing regulations, both in terms of quality and ethics. When new products are developed without proper standards or quality controls, companies simply choose not to adhere to nonmandatory constraints.
The central issue is education, ranging from traditional education to raising awareness on how technological and scientific innovations advance. There should be a focus on boosting research and innovation toward patented products from a private and public standpoint, lest we want to remain dependent on our relationship with other countries for years to come. Mexico is simply not going to manage without innovation and its own patents. Countries like Korea have developed an investment strategy focused on R&D and now they are important players in this area.
Q: What are your main priorities for 2019?
A: We want to consolidate another year of contracts, to fulfill the expectations of our providers and to potentially open a new office in Mexico City. There are hindering factors that could impact the development of our operations, including the dollar-peso exchange rate, the political climate between Mexico and the US and changes in incentive packages and tax schemes in both countries. However, we will continue looking for new opportunities.
QUALITY CONTROL LEADS TO HIGHER PRODUCTIVITY
NADIA RODRÍGUEZ
Pharmaceutical Business Manager of Malvern Panalytical
Q: What impact has the merger between Malvern Instruments and Panalytical had on the country’s healthrelated operations?
A: Malvern Panalytical was formed through the merger of these two companies as well as two smaller companies named ASD and Claisse on Jan. 1, 2017. Before the merger, Malvern and Panalytical already worked together in overlapping industries. However, there was an opportunity to create something that would offer more options to clients and provide the advantage of cross-sales. The merger combined the expertise of Malvern in the pharmaceutical arena with Panalytical’s portfolio of analytical equipment for various sectors. The result is a more integrated and diverse line of solutions.
Q: How do your solutions help pharmaceutical companies in their manufacturing operations?
A: The pharmaceutical industry is known for its strict regulations and standards set by different authorities. These requirements define the form, size and composition of medication to ensure quality is maintained. Malvern Panalytical’s products allow clients to conduct accurate analysis of their industrial processes at various stages. This helps them deliver better products and increase productivity.
Q: How is your client portfolio divided locally and international and what challenges do you face in Mexico?
A: Half of our clients are Mexican companies and the other half are international pharmaceutical corporations. International clients are more familiar with our solutions but the local industry is a bit more complicated. Many smaller Mexican companies have limited budgets and often have their analytical work done by third parties or by universities. We believe investing in equipment like ours can provide a great deal of added value in the long term. However, entering this segment remains a challenge.
In Mexico, about 75 percent of the products we sell are from Malvern’s product line. We are trying to increase the share of Panalytical equipment, which is more centered on elemental analysis. In the area of medical devices, we are relatively small but do offer some highly specialized technology.
Q: What is Mexico’s contribution to the company’s global goals?
A: Our presence here is primarily focused on growing our position and brand in Mexico. We are already well-known in the area of particle-size measurement but that is not the case for our entire portfolio. Mexico is a door to the rest of Latin America and if our strategy proves successful here, we can expand to other countries in the region.
Q: Malvern Panalytical participates in various conferences, forums and workshops. What is your goal with these outlets?
A: We try to show that our company is more than just a product. We invite people to learn about material characterization and how it can be performed. Ultimately, we are a group of experts with a lot of experience in the pharmaceutical field. We often bring specialists over from the US and the UK to share their knowledge. We also take these opportunities to build closer relationships with our current and potential clients.
Q: What are Malvern Panalytical’s growth expectations for the coming year?
A: Our goal is to achieve 10-15 percent growth. We want to penetrate the market with the newest technology. Apart from our leading market products, we also want to push areas such as heavy metal analyses. If we can secure two or three projects in this area, we can use this experience as a reference for the future. Some technologies are still awaiting certification from authorities, which is an obstacle to building our brand in the market. Last year, we had a small dip in growth because several of our pharmaceutical projects were canceled or stalled. The underlying reason was the current political uncertainty. We expect this will improve as the situation stabilizes. The pharmaceutical industry is one of the pillars of the Mexican economy and will continue to offer great potential.
Malvern Panalytical is a leading provider of scientific instruments used to measure elemental concentrations, crystallographic structure, molecular structure, remote sensing, rheology, particle size, particle shape, particle concentration and more
GETINGE: REINFORCING HIGH-QUALITY EDUCATION
In July 2015, former President Enrique Peña Nieto announced the creation of the Naval University, which aimed to efficiently regulate and coordinate in a single organization all graduate and technical schools and training centers managed by the Navy. Getinge was one of the partners selected to collaborate in making this project a reality.
Getinge is a global provider of innovative solutions for operating rooms, intensive care units, sterilization departments and life science companies and institutions. Based on its firsthand experience and close partnerships with clinical experts, healthcare professionals and medical technology specialists, the company strives to improve people’s lives.
With more than 110 years of experience manufacturing medical equipment and medical devices, Getinge has developed technology and new ways to provide better care for patients and help healthcare professionals in their daily work. The company integrates passion and technology to improve efficiency and focus on what is important: the patients.
Changing from mock to functional machines was one of the improvements that helped make the Naval University project such a success. At the Naval University’s Health Sciences Center (CENCIS), students are able to develop the skills they need to comply with medical standards and experience real-life work, whether they are studying to become a nurse, a surgeon or any other clinical profession. Among other equipment, Getinge provided steam sterilizers for five different sterilization areas, along with automated washer disinfectors, surgical lights, ventilators and operating tables.
CLEAN ROOMS ESSENTIAL FOR PHARMACEUTICAL QUALITY, PURITY
FRANKLIN FELLER General Manager of Valtria Engineering
Q: How is Valtria Engineering contributing to the healthcare sector?
A: Valtria Engineering designs clean rooms and air purifying systems for hospitals, dermatological and cosmetics companies, food producers, automotive companies and pharmaceuticals, among many others. However, reception of these products varies widely by sector. Dermatological and cosmetics companies are sometimes reluctant to invest in this technology, which can sometimes result in the contamination of their products from fungi and other particles. Many hospitals have also proven reluctant to incorporate this technology. The sector that invests the most in clean air is the pharmaceutical industry, which is why 80-90 percent of our sales are oriented to this market. Strong regulations concerning pharmaceuticals production enforced by COFEPRIS have led companies to invest in the highest safety standards to ensure all products meet established quality and purity requirements.
Q: What are the main concerns of a pharmaceutical company when installing a clean room?
A: The key concerns include maintaining stable temperatures, relative humidity conditions and a differential pressure between rooms. All pharmaceutical plants must monitor these conditions according to local regulations, including NOM-059 that specifies the need for a system to continuously monitor differential pressure between rooms to avoid contamination from one room to the other. Plant compressors also require continuous maintenance to avoid cross contamination. Valtria Engineering keeps close track of equipment maintenance. If filters are not changed regularly, for example, the system’s efficiency diminishes.
Q: What new products is Valtria Engineering introducing to the pharmaceutical sector?
A: Valtria Engineering imports and integrates different components for the construction of its clean rooms. Every
Valtria Engineering has over 15 years of experience in the design and installation of clean rooms and other critical areas for pharmaceutical and high-technology industries. The company has installed 150,000m2 of clean rooms in 15 countries
room is tailored to the client’s needs, addressing concerns of temperature and humidity, among others. We are developing a system that refrigerates more efficiently using equipment from Europe that employ compressors that generate less friction. Frictionless equipment generates less heat and can be used at much higher speeds of up to 40,000rpm, while normal compressors operate at a range of 2,000-4,000rpm. This reduces electricity use by 30 to 40 percent, which is a significant savings considering the high amount of energy compressors require.
Q: What are the main benefits of using clean rooms at hospitals and clinics?
A: Introducing laminar air flow to purify the air that enters high-risk hospital rooms helps to reduce the number of infections, especially in high-risk areas such as surgery rooms during heart and eye procedures. Some networks, such as Hospital Angeles and Hospital ABC, have already incorporated these technologies at some facilities.
Q: What are the entry barriers preventing wider acceptance of this technology in the hospital sector?
A: High costs to install laminar air flow equipment has made hospitals reluctant to install this technology despite the benefits they can bring to patients. Other countries have been much more welcoming of this technology but Mexico might need additional incentives to introduce it, such as policy changes. Not all hospitals need this type of equipment, however, only those that perform high-risk operations.
Q: What are Valtria Engineering’s growth expectations for 2019?
A: Valtria Engineering is growing significantly in the pharmaceutical sector. The company is present in Argentina, Spain, Switzerland and Finland. In Mexico, we have offices in Mexico City and Guadalajara and hold approximately 5-10 percent of the market for clean rooms. We have aggressive growth plans for the near future, having recently started a project with PISA Farmacéutica, one of the largest medication manufacturers in the country. In 2019, we expect to double or triple our market participation in the pharmaceutical sector and to develop our presence in other sectors as well.
COFEPRIS DEMANDING STRICTER PRODUCTION STANDARDS
PABLO PÉREZ GAY
Industrial Director of Rossbach México
Q: What advantages does Rossbach offer to its Mexican clients as a distributor of precision instruments?
A: Above all, we offer expertise. For the past 50 years, we have built significant know-how and what I call “know-who.” Knowing a lot of people in the public and private sectors means we can provide a channel for our clients to build their presence in the Mexican market. I see Rossbach as an embassy that acts as a representative for companies abroad.
Q: How relevant is the health sector for your current operations?
A: Our relationship with the health sector is largely in the industrial area. We work with pharmaceutical companies, offering our solutions for monitoring all kinds of environmental and climatic conditions at industrial plants. Our products in this area are practically all from Vaisala, although we include other brands in certain projects.
Companies that seek our services tend to have two demands: meeting quality standards and regulations and increasing operational efficiency to cut costs. In many cases, to meet a norm, a company chooses to use traditional methods to measure quality standards. This means buying their own measurement equipment and having someone periodically download information manually to write a report. However, this takes time and manual labor, which means extra resources and money, and it does not provide continuous access to information. Our solutions, on the other hand, provide realtime data of all the critical points defined by the company at the click of a button. The system can include indicators of all types and alarms when limits are breached. Even though the initial investment may be higher, it will cut costs in the long term, save time and offer far better data.
Q: What do you see as the more pressing need in terms of monitoring devices?
A: The technology already exists. What is necessary right now is to raise awareness of the need for these products. Many pharmaceutical companies have their headquarters in the US or a European country but build their production plants in different parts of the world. Our monitoring systems allow these companies to track conditions at any plant regardless of
its location. This gives far more control and improves response times in case there are problems.
There is a fundamental difference between waiting for something to happen and preventing something from happening. For example, if temperatures change rapidly at a plant due to weather fluctuations, production can waver. We have had clients that were losing up to 30 percent of their production on bad days before they started working with us. Our data provides a detailed overview of risk factors and ensures companies can better anticipate changes in working conditions. More importantly, however, is that these technologies have a real impact on the health sector’s evolution. Ensuring medicines are produced and stored under the right conditions is vital for patient safety. COFEPRIS is also becoming stricter in its standards and their enforcement, demanding more conditions be measured and reported. This is making our solutions increasingly necessary.
Q: How have your solutions been received in the health market and what opportunities do you see for further growth?
A: We have had positive experiences with large pharmaceutical companies. We have also helped smaller companies to meet FDA regulatory demands so that they can export to the US.
We have a strong interest in Mexican producers of generic medications. The opportunity in the generics market is huge, especially in Latin America, and we should work together to strengthen this sector.
In the area of refrigerated transport and distribution, we have come to an agreement with Lufthansa to monitor its distribution center in Mexico. In climate-controlled operations, you need to be able to track factors like humidity and temperature every single minute. Our systems allow Lufthansa to monitor cargo from the moment it leaves a client’s plant in Germany until it reaches its final destination in Mexico.
Rossbach México was the first factory for precision instruments in Mexico. It is an exclusive distribution partner of Vaisala, SATEL and Kipp & Zonen and has solutions for the life sciences, electrical equipment, mining, communications and solar radiation industries
STERILIZATION VITAL IN SAVING LIVES
ANDER GENTRY
Director General and Co-Founder of Gamma Biolabs
Q: For which type of sterilization process are your biological indicators in highest demand?
A: Our biological indicators are used to test whether something has been properly sterilized. They are mostly used in steam sterilization but demand for dry heat sterilization is also growing.
We are the only producers of biological indicators in Mexico. This provides us advantages in terms of fast and high-quality supply. We also provide training services to our clients, teaching the right skills to get the most out of our products.
Q: Who are Gamma Biolabs’ main clients and how are they divided between the public and private sectors?
A: Our main clients are in the pharmaceutical industry; they are the most important users of biological indicators. Other clients are hospitals, dental clinics and diagnostic and research laboratories. Overall, we have more than 300 clients spread across the country that we support through our offices in Guadalajara and Mexico City.
Gamma Biolabs is a Mexican company that produces technology to monitor sterilization processes. Its solutions include mini incubators, moist and dry heat and ethylene oxide biological indicators
Q: What advantages do you get from your work with local suppliers?
A: We believe in Mexico’s producers and the national human talent. As a result, most of our supplies come from local producers. This allows us to work closely with them to make changes and improve our products, while lowering costs and improving logistics.
Q: What are your views on the state of the industry regarding sterilization and its importance for overall operations?
A: In the pharmaceutical industry, standards are generally higher. Hospitals and clinics, however, often only buy our products so they can fulfill the norms set by COFEPRIS. A robust sterilization policy is necessary to prevent infections and disease that could occur as a result of equipment and device contamination.
Q: What are Gamma Biolabs’ main goals for the near term?
A: We are doing research on two different products in the area of sterilization. Our goal is to launch these in late June or early July 2020. In terms of clients, we are looking to target bigger players, including multinationals. We want to export to more countries, especially in Latin America and Europe. The company already has an office in the Netherlands, which is focusing on entering the European markets.
ADDED VALUE PRODUCTS KEY FOR GROWTH
JORGE FAUGIER Director General of Indukern México
Q: What was Mexico’s contribution to Indukern’s 8 percent global growth in 2018?
A: Indukern will turn 20 years old in Mexico in 2020. Our profits in Mexico amount to about US$100 million per year, which represents between 10 and 12 percent of Indukern’s global profits. Over the past few years, Indukern’s operations in Mexico have grown at a double-digit rate, which is much faster than the average of the industry. Our two largest offices in Latin America are Brazil and Mexico, which are also the two largest markets in the region. While Brazil’s offices are older than Mexico’s, both countries make almost the same profit.
The pharmaceutical sector represents 18 percent of our global profit. In Mexico, our pharmaceutical division sells active pharmaceutical ingredients (API), excipients and will start with intermediates for both generic and patented medication manufacturers. We are exclusive distributors and representatives of Tapi, Teva’s active pharmaceutical ingredients division, which is the largest manufacturer and distributor of generic APIs worldwide. Our main clients are generics manufacturers, such as Bausch Health, Laboratorios Silanes and Laboratorios Sophia, but we have approximately 50 active clients in this division.
Q: What are the main changes affecting Mexican pharmaceutical manufacturing?
A: Our strength resides in our local inventory, which gives us speed and flexibility to adapt to market changes. We follow our client’s sales forecasts while managing the risks related to changes in the market. This year, our products remained longer in stock as clients delayed their acquisitions and lowered their sales forecasts. Pharmaceutical manufacturers have slowed production during the past year due to the change in federal administration, which introduced uncertainty into the market.
While the private healthcare sector has maintained a steady pace, the public sector represents much larger sales of medications and medical supplies. Public tenders were partially paused in 2018 and were reactivated in 2019. Thanks to the tenders in mid-2019, we expect the latter half of the year will be much more active. However, the impact
from last year’s delays will probably lead to marginal net growth for the industry in 2019.
Q: What added value does Indukern offer its clients in the pharmaceutical industry?
A: As the world’s largest pharmaceutical manufacturer, Tapi gives us a significant amount of information regarding the future of the market, such as patents that will expire in the coming years and new products that will become increasingly available to the industry. As a result, we can guide clients on which products they can start manufacturing today to launch in the market in three to five years. Indukern has evolved from a distributor to a guide for our client’s growth and portfolio development. Moreover, our large inventory, which can only be maintained through a strong financial arm, also gives us significant flexibility to help our clients.
When suggesting action plans to our clients, we analyze both patents that will expire and the potential market. For that reason, I always recommend that clients share as much information as possible with us. The more information we have regarding their future plans, the better we can interact with them.
Q: Which new product lines will Indukern launch to the market in the short term?
A: The product line that will grow the most in the coming years is specialized products, mainly oncological, antibiotics, some herbal extracts and finished products such as supplements. Other products that will grow in Mexico are those that treat the country’s most prevalent diseases, including diabetes and cardiovascular illnesses. During 2019, we will focus on incorporating added-value products and lines that complement our current portfolio. Finally, we will explore the sale of final generic products through Kern Pharma, Indukern’s manufacturing arm for final products.
Indukern is a chemical distributor focused on raw materials for the pharmaceutical, chemical, food and veterinary sectors. Its pharmaceutical division includes fentalines from Kern Pharma, Fersina, Huvepharma, TEVA (Tapi) and others
TECHNOLOGY TRANSFORMING HOSPITAL INFRASTRUCTURE
CÉSAR RODARTE Director General of ARQmedyca
Q: How does ARQmedyca differentiate from other architecture firms?
A: Our core business is in developing, designing, remodeling and constructing overnight stay-and ambulatory hospitals. We meet with our commercial suppliers before executing a project, working with them to ensure our plans come together. Besides the architectural component, we also help clients oversee the financial side of their investment to determine when they can expect a return on their project and to give them control over their spending.
Virtual reality is changing the patient experience at hospitals and at their own homes
We also have broad expertise on regulatory frameworks. Before we start a project, we guarantee that it will be approved by COFEPRIS and we help clients understand what they need to do to comply with regulations. We offer training courses pertaining to the norms and standards of the industry and certify anyone that takes them.
Q: What changes have you observed in hospitals today?
A: Rapid changes in technology are having a big impact on the health sector. Hospitals of the future will become service centers where you will see a symbiosis between humans, machines and IT. Doctors will increasingly spend their time in research and preventive healthcare as opposed to purely curative care. Robots are increasingly doing the surgical work while doctors control them through interfaces that feed them the whole picture of the patient’s status.
We are already creating special designs for operating theaters that allow for these new forms of technology
ARQmedyca is an architecture firm specialized in projects for the development, construction and remodeling of clinics and hospitals. It provides services such as design, architectural planning and management for the health sector
and the required cabling. Remote monitoring is making distance healthcare increasingly possible, which means hospitals are going to have fewer overnight patients as they go home to rehabilitate. This is further stimulated through less invasive surgical procedures that are more accurate through better technology. In the area of artificial intelligence, we see a growing ability of smart computers to make decisions regarding treatments by simply entering the patient’s data. We have a client with a network of 300 doctors who conduct patient consults via telemedicine. Doctors can now do part of their work without ever seeing the patient.
Virtual reality experiences are also starting to prove their worth in providing patients a more pleasant experience during treatment in hospitals and at home. Through telemedicine, the doctor can see what the patient is doing allows doctors to give patients real-time instructions for their own rehabilitation. All these technological changes demand a transformation of hospital infrastructure.
Q: What is ARQmedyca’s strategy to attract new clients?
A: Most leads come from recommendations of existing clients. About 90 percent of our business remains in the private sector. We certainly see opportunities to increase cooperation with public bodies, especially considering the actions the government is taking to put IMSS, Seguro Popular and the Ministry of Health under the same roof. This is going to help increase competition in the health sector as a whole.
In terms of the technological developments happening in the health sector, I see an opportunity for the private sector to step in and fulfill projects in the public arena. This will be aided by increased public spending on health.
Q: What are your top goals for 2019?
A: Right now, we are strongly focused on increasing our level of research. We are performing research projects for patients to have a better experience and a better rehabilitation during the stay at the hospital, focusing mostly on environmental psychology.
PUBLIC-PRIVATE ALLIANCES
COULD FIX HEALTH INFRASTRUCTURE
MIGUEL VELÁZQUEZ
CEO of Grupo Empresarial MDF
Q: What are the main constrains when building hospitals and clinics in Mexico?
A: One major constraint is funding. Hospitals have limited access to the financial sector, since they are seen as a risky investment due to the large amount of cash payments they receive. Mexicans do not have a culture of insurance, partly because it remains too expensive. Hospitals have to generate bills without names, leading to poor financial management that reduces a business’ credibility. The financial sector does work with several large hospital groups and very small clinics but it is more reserved with medium-sized institutions that have between 20 and 60 beds. Small clinics generally need a much smaller amount of money for construction projects – between MX$3 million (US$150,000) and MX$5 million (US$260,000). For a medium-sized group this is not enough because these groups require loans of between MX$50 million (US$2.6 million) and MX$80 million (US$4.1 million).
Q: What strategies has Grupo MDF implemented to increase efficiency in construction and reduce costs?
A: We are focusing on making our whole operating strategy more efficient to reduce construction costs. With software, for example, we traditionally designed our models using AutoCAD, which allows drawing in 2D and modeling in 3D. Now, we are training our people to use a process called Building Information Modeling (BIM). This software allows you to design, build, define construction materials and resolve all problems that arise after the design phase, all the way to the maintenance of the building. We expect to launch our first project using BIM in 2019. We hope it will make our operations more efficient by increasing the accuracy of our inventory. We can now see exactly how much we need of a certain product and order the precise amount. Additionally, we can determine the exact specifications of the material, allowing us to improve the construction process and to drive down the cost for the client by up to 20-25 percent.
Q: What role does infrastructure play in improving healthcare access?
A: Most small clinics in rural areas do not have the right facilities to receive patients. Many are simply former houses
that have been converted into clinics and often, they are not interested in modernizing.
The private sector and the government should work together to gradually upgrade these small clinics. We can start with surgery facilities and then move on to diagnostics and overall hospital services. These projects can take five to six years but would increase productivity greatly. In April 2019, the Ministry of Health released a list of hospitals considered white elephants. In Oaxaca, 52 hospitals were built at a budget of MX$200 million (US$10.2 million) for each and they are no longer in operation. Once the government completes the construction project, it hands the hospital over to the ministry, which does not have the budget to run it nor to offer competitive salaries. Hospitals are normally built due to election promises but they are not part of an effective longterm health strategy based on industrywide coordination.
Q: Which countries could serve as an example for Mexico to improve its healthcare system?
A: Chile has implemented telemedicine as a way to provide health services in remote areas. The five health clusters in that country also offer training to recently graduated doctors, sending them to clinics in remote areas, which offers them significant field experience. In exchange, doctors can come back after three years and study the specialty of their choice fully paid by the government.
Chile has also established an agreement called 25-25-25 that forces every new administration to propose 25 new hospital projects of different sizes, start the construction of those projects and complete any outstanding projects regarding the 25 hospitals proposed by the previous government. This initiative offers continuity, which allows parties from both the public and private spheres to understand where the sector is going and how they can better tune their strategies.
Grupo Empresarial MDF specializes in the construction of hospitals, clinics and laboratories. It offers services, such as management of construction sanitary permits, medicinal licenses, advertising permits, architectural and topographic surveying
REGULATION KEY TO UNLOCKING CLINICAL TRIAL POTENTIAL
PATRICIA ZURITA
Country Director Mexico of Eurotrials, a CTI Company
Q: How has the acquisition by CTI Clinical Trial and Consulting Services changed Eurotrials’ operations in Mexico?
A: The acquisition gave Eurotrials a broader footprint, opening the doors to the Americas, Asia, Europe and Oceania. It also diversifies our service portfolio to include development and strategy, clinical services, research, life-cycle support and realworld evidence and late-phase research. CTI has 20 years of experience as a multinational company providing services to 18 of the 20 largest pharmaceutical companies in the world. We are now following all of CTI’s standards and procedures.
In Mexico, we are focusing on two areas. The first is epidemiological and real-world evidence studies, both of which are in high demand by the pharmaceutical industry. The second is rare diseases, a CTI specialization. Our studies in both areas are feasible in Mexico thanks to the country’s large population, which proves an advantage when researching rare diseases as the number of patients is usually quite small in other regions. Eurotrials has worked with treatments for Fabry disease and lysosomal diseases in Mexico. In 2019, we plan to develop several projects addressing diseases common to the country, such as type 2 diabetes.
Q: How would you describe Mexico’s local capabilities for clinical trials and what is Eurotrials looking for in the research centers it partners with?
A: It is necessary to change regulations concerning approval times both for clinical trials and for registration of new medications. Mexico has efficient approval times on paper but regulations are not consistently applied and delays are common. Long and sometimes unpredictable processes leave Mexico as a second choice for pharmaceutical companies that prefer Eastern European countries, where times are shorter and trials are less expensive. These countries have the disadvantage of having a much smaller population than Mexico, making recruitment harder.
Eurotrials, a CTI Company, is a CRO that specializes in clinical and translational research in the areas of rheumatology, ophthalmology, oncology, rare diseases, cardiology and others. The company was acquired by CTI in 2017
Having said that, Mexico has a large number of researchers who have worked for many years in the sector. Many started in public institutions and then opened their own research centers, which are now performing their own clinical trials. These centers are fully staffed with specialized doctors and experts in clinical trials. We are looking for research centers with fully dedicated professionals who have that kind of expertise.
Q: How can CROs help to increase access to healthcare services in Mexico?
A: Clinical trials provide a way for patients to access innovative medicines before they are available in the market. This is especially important in Mexico because the registration process for innovative treatments is too long, so patients do not have timely access to the medications they need. It is necessary for the government to develop strategies to support access to clinical trials and to see them through. Some measures have already been implemented, such as the development of Habilitated Units for Preapproval Support (UHAP), which review all documentation and preapprove research protocols before they are analyzed by COFEPRIS.
It is also necessary to speed up the implementation of clinical trials at public institutions like IMSS and ISSSTE, as this would give a broader number of patients access to medications and it would make these more affordable. Long approval times and delays in the process add up and increase the final cost of the medication for the patient. Shorter trial periods would allow Mexico to compete globally with major players and to reduce the final cost of medications. IMSS, AMIIF, CANIFARMA and ACROM are searching for ways to speed up approvals.
Clinical trials also train physicians and hospital researchers in methodologies and standards that have proven to be useful in establishing processes and improving organization in institutions and researchers’ own initiatives. This is important for Mexico to grow into the new trends of collaborative research where public institutions and other industry participants design common projects and share knowledge to solve society problems that span from unmet medical needs to rare diseases or pathologies.
HIGH INVESTMENT IN TECHNOLOGY NEEDED TO ENCAPSULATE MARKET
ENRIQUE GARZA CEO of CAPSU-GAMA
Q: What challenges is CAPSU-GAMA facing to expand its share in the capsule market?
A: CAPSU-GAMA represents ACG Group’s high-tech capsule and packaging equipment. ACG Group is one of the two largest capsule distributors worldwide. There are very few suppliers in the capsule market, even on a global scale. While capsules may seem simple, they require a complex engineering process and technology so it is very hard for new companies to enter and succeed in this market niche. To manufacture capsules, it is necessary to have significant experience in the sector and a large initial investment. Manufacturing capsules is an expensive process with a slow return on investment.
Before the introduction of ACG Group products, our competition had a monopoly in the Mexican market for 30 years. Penetrating this market requires hard work because it sometimes can take up to three years for a client to switch to our technology. However, clients are now prioritizing the quality of the product over its price so we expect that they will continue to switch to our products. We expect to grow at a steady pace and capture about 20 percent of the market.
Q: What specific benefits would you highlight regarding ACG Group’s capsules?
A: ACG Group began operations producing capsules manually and, over many years of research, developed the technology and processes it has today. Quality is the main advantage of our capsules but CAPSU-GAMA also offers clients two types of tech support services. The first analyzes the performance of equipment to improve production processes. The second concerns the capsules’ design and filling. Large pharmaceutical manufacturers in Mexico, such as Sanfer, Pfizer and Sanofi, buy their capsules from us but they fill them in-house because they need absolute control of the filling process.
Q: What is CAPSU-GAMA’s share in the food supplements market?
A: In Mexico, the food supplement market is very small in comparison to the US, representing about 10-15 percent of the capsule market versus about 30 percent in the US. For that reason, our operations in Mexico are mainly focused on the pharmaceutical sector.
Moreover, food supplements face weaker regulatory restrictions so manufacturers prefer lower-quality alternatives that are produced at a lower cost. The food supplement market is also more artisanal, with many processes being done by hand or using old machinery, unlike the pharmaceutical industry, which invests heavily in technology so its processes are automated.
The Mexican pharmaceutical industry requires 10 billion capsules per year
Q: Where is the sector heading in terms of technological development?
A: There are many opportunities for high-tech capsules. For instance, three new methods are gradually permeating the market. The first is capsule filling for solids that must be inhaled, which can have applications for respiratory diseases. These capsules are put in place and then broken so the patient can breathe in the medicine. The second are extendedrelease capsules. Normal capsules dissolve in 15 minutes but some medicines cause stomach problems if absorbed by the stomach. For that reason, some medicines, such as Omeprazole, are packed in micro-pellets, which take longer to dissolve and thus their impact on the stomach lining is smaller. Other capsules that take even longer to dissolve can safely travel to the intestine.
The third application are liquids in hard gelatin capsules. Soft capsules are often used to pack liquids and hard capsules for solids. However, some liquids cannot be packed in soft capsules due to their chemical composition so a technology was developed to pack these medicines into hard capsules.
CAPSU-GAMA distributes ACG Group’s empty, hard capsules of vegetable origin, which also have kosher and halal certifications. It also provides encapsulating machinery and services for drug manufacturers
GENERICS GREENFIELD FOR STRONG NATIONAL PRODUCTION
ALONZO AUTREY
Managing Director of DVA Mexicana
Q: What is DVA Mexicana’s greatest contribution to the Mexican pharmaceutical industry?
A: We supply raw materials for the pharmaceutical industry that range from active ingredients to excipients and medicine coatings. The latter are produced in a special plant recently approved by COFEPRIS, which sets us apart from our competitors. We are a company with a broad portfolio that responds to patients’ needs and can adapt its solutions in terms of quantity, color and conditions of use.
We also participate in other chemical-based industries and in the food sector. Our approach to all our operations is the same and we sometimes manufacture products for several industries at the same facility. Therefore, these uphold the same standards stipulated by our company and by regulators like COFEPRIS.
Q: How relevant are best practices and quality standards in Mexico’s pharmaceutical industry?
A: When companies have good business practices that are internationally recognized, it does not matter where they produce. A company with strict standards will introduce those to every country where it establishes operations. Some of our clients say they find COFEPRIS very strict in its audits and inspections and in some cases, companies have had to pause production for six to 12 months. This is a challenge for every company looking to enter this sector in Mexico.
Q: What has made Mexico such an attractive destination for generics manufacturers?
A: The reason is that design and development of generic medications can take place in Mexico. Meanwhile, most international companies that produce patented products do so in their home country. Because of their significant
DVA Mexicana is a German raw materials supplier for the pharmaceutical, food, industrial chemicals and crop protection industries. The company has around 750 employees in Mexico
participation in the market, generics manufacturers have also been noticed by the current government, which is highly interested in strengthening pharmaceutical production at a national level.
Many generics laboratories come to us to work on new projects, create new formulas and register new products in the market. New products are constantly being launched, which has generated healthy competition and provides a strong opportunity for our company. Each year we work on more than 100 new developments with generics clients.
Q: What are your short-term goals and what will be Mexico’s role in your development strategy?
A: We have a strong research team that is always looking to develop new solutions that can open new opportunities with potential clients. Currently, we have a patent planned for production at our plant in Mexico. Our intention is to work with our clients to develop medicine at a good price and we hope to start exporting to the US by 2021.
PRECISE DOSAGES, ACCESSIBLE COSTS REQUIRE SPECIFIC CAPSULE SOLUTIONS
ANIL ANDRADE Director General of ACG Group
Q: Why should ACG Group be considered the ideal partner for pharmaceutical companies that seek integrated solutions for manufacturing?
A: When ACG started over 60 years ago, the owners decided to focus primarily on the healthcare industry. Every product and service we have developed has been specifically designed for the pharmaceutical industry, which means we have gained significant expertise in capsule manufacturing and drug processing equipment. We also cooperate closely with pharmaceutical producers to meet their specific requirements and regulatory standards.
There are a lot of mergers and acquisitions in this industry but we remain true to ourselves as a third-generation family-owned company. We are professionally managed by a group of CEOs, but we are a private company. Because of this, we put almost all our revenue back into the company to generate new innovative products and services.
Q: What strategies does ACG Group follow to meet its clients requirements?
A: Many customers come to us with a specific problem. Our R&D department designs specialty capsules and the machines needed to make them. One of our areas of expertise is liquidfilled capsules. Another is inhalation capsules for people with COPD, asthma or lung infections. Given the global trend toward animal-free products, especially for dietary and vitamin supplements, we developed a vegetable-based capsule that works just as well as gelatin. A few years ago, we designed an award-winning special blister package for a medication used to treat basic diseases in Africa, where humidity and temperature were rendering regular packages ineffective. We also developed the machine to make the package and kept the product cost-effective.
Q: What does the Mexican market mean for ACG Group?
A: We started working in Mexico five or six years ago. We saw it as a large and well-developed market with a great deal of potential. We have since introduced a number of encapsulation machines, tableting machines, blister material for packaging and capsules. Customers in Mexico are knowledgeable and there is a strong culture of compliance with regulations and
quality norms. We like to work with pharmaceutical companies in Mexico because we know they do things right.
At first, we faced the challenge of being unknown in the market. We had to develop a marketing program to raise awareness of our brand and convince customers to try our products. Over the last five years, we have grown substantially and customers have seen we are a serious company to work with. We have the resources and are here to stay. We work with local partners to provide technical support and maintain equipment for our products. We definitely see Mexico as a market with major growth potential, which is why we have a quite aggressive plan for 2020. Because of our proximity, we know products developed in the US will find their way into Mexico for manufacturing. Equally, Mexican pharmaceutical companies are introducing new products to the market. We can be ideal partners for them.
Q: How does ACG Group help to reduce counterfeit medicine production?
A: This is a global problem that we have been able to address in several ways. For example, we have the capability to develop intricate prints on capsules that include up to four different colors and cannot be duplicated by counterfeiters because of the complexity. We also create special capsules and packaging technology for customers and duplicating the molds is truly complicated.
Counterfeit products often do not look at the intricacies of the packaging. We have a special company in our group that is focused on inspection, tracking and verification. This allows us to go to existing pharmaceutical companies and rebuild their processing and packaging equipment so they can add certain characteristics, such as barcoding and batch aggregation. We collaborated on hundreds of product lines and have since brought this technology to other markets.
ACG Group is a supplier of integrated manufacturing solutions for the pharmaceutical industry. Its varied range of products includes capsules, films, foils, machines for encapsulation, tableting, tablet coating, blister packing, cartoning and fluid bed processors
LONG-TERM VIEW CAN HELP REVAMP CLINICAL RESEARCH
MELISSA ROSALES Director General of RM Pharma
Q: Last year, RM Pharma announced the creation of an association in Mexico to promote research in the country. What are the latest developments?
A: The Associated Centers for Excellence in Clinical Research (SAIC) is up and running. RM Pharma and SAIC’s other founding members are inviting more research centers to join. The association’s goal is to help research centers develop a more holistic view of clinical research. RM Pharma’s focus will be to help companies organize their talent, their processes and other aspects related to research. SAIC is now also a member of the Research Commission of CANIFARMA.
Q: What advantages and disadvantages does RM Pharma see in ending multiplicity of lanes?
A: Authorities analyzed this concept for years. The idea was that those protocols previously approved by foreign regulatory agencies, such as the FDA or EMA, were not required to pass a COFEPRIS review. This simplification represents a reduction in approval times of up to one month, which makes the industry more competitive.
The real challenge for COFEPRIS is to ensure it has the necessary human resources to carry out this initiative since at present the team designed to review the protocols is small, which delays the process. If COFEPRIS’ idea is harmonized and implemented efficiently, attraction of projects from Europe and other markets could grow. There are many laboratories that seek to do research in Latin America but until now these companies have not found the channels that facilitate these opportunities.
Q: Why is RM Pharma’s focus on rheumatology and does it have any interest in moving into areas like oncology?
A: Oncology is a focus for the authorities because it is an industry trend but it is not the only area that
RM Pharma is dedicated to phase I-IV clinical research studies, medical services, services to the pharmaceutic industry and CROs. The company specializes in therapeutic areas such as cardiology, dermatology and general medicine
requires attention in Mexico. RM Pharma specializes in rheumatology, immunology, pediatrics, respiratory and chronic degenerative diseases and we are starting with gastroenterology and urology protocols. Because of this, we have no immediate plans to participate in the oncological area. The company focuses on chronic degenerative diseases because its study will be key for future generations due to the aging population. RM Pharma has developed a clinical research group that collaborates with IMSS to accelerate administrative processes for pharmaceutical companies with processes such as CRF and also provides coordination of research services.
Q: Volunteer recruitment is key to developing a clinical research industry. What is RM Pharma’s approach and how can this area be improved in Mexico?
A: In the US, volunteers receive financial compensation for participating in clinical research, while in Mexico, pharmaceutical companies only pay for travel and food expenses. If a similar remuneration were applied in Mexico, we would run the risk of receiving more volunteers than could be accepted and they probably would not meet the necessary criteria to participate. I believe that the dynamics of not contributing economically should continue unless it is a Phase I project, which requires volunteers for a longer period of time.
Rather than monetary incentives, education is key. Volunteering for a clinical research study gives patients options to treat their illness and help eliminate from society the stigma that volunteers are guinea pigs. In the case of volunteers who collaborate with RM Pharma, word-of-mouth is used to encourage patients to become clinical research volunteers. In the near future, we plan to provide more structure to this network and carry out a program called Ambassadors for Health in which volunteers themselves promote volunteerism. In exchange, they can obtain discounts for laboratory studies, medications and medical assistance. The purpose is to promote healthcare and encourage people to participate in clinical research.
CLINICAL TRIALS BLOOM THROUGH PUBLIC-PRIVATE COLLABORATION
KAREN HAHN Director of Global Program Management at ICON
The high investment needed to develop new medicines is leading pharmaceuticals into emerging economies like Mexico. Thanks to its lower costs for clinical trials and excellent physicians and researchers, the country will become an even more attractive investment destination, according to Karen Hahn, Director of Global Program Management at ICON, fueled as well by collaboration between the private sector and public healthcare institutions. “Pharmaceutical companies are looking for ways to offset costs,” says Hahn. “Mexico’s lower costs for clinical trials outweigh the attractive conditions offered by other countries.”
Medicines must follow a long and costly road from molecule discovery to commercialization. A 2018 study by the Tufts Center for the Study of Drug Development calculated the cost for drug development at US$1.2 billion. Headquartered in Ireland, ICON is a multinational CRO whose goal is to accelerate the development of medicines and medical devices, thus reducing this cost. The company employs over 13,250 people in 38 countries and specializes in oncology, CNS, internal medicine, infectious diseases, gastrointestinal, women’s health and rare diseases.
Hahn says ICON is betting on Mexico as a key part of its development strategy for Latin America. “At this point, Mexico and Brazil are the most important countries in Latin America for the company. Studies that would previously go to Colombia, Peru and Chile are now going to Mexico, Brazil and Argentina,” she says. Beyond the low cost for clinical trials, Hahn explains that interest in Mexico also is increasing because of the country’s excellent physician pool and large prospective patient population. Moreover, companies are seeing potential for increasingly specialized tests. “We see a growing interest in more specialized areas, such as PVSS and project management,” says Hahn.
Collaboration between CROs and public healthcare institutions will be the key to untap the country’s clinical trial potential. CROs have targeted the public sector due to the latter’s large patient population. Although there have been efforts from the private sector to align to the needs of public institutions, the challenge, according to Hahn, has been finalizing and
signing contracts between both parties. “We were aware that public institutions had good doctors but we had no access to them due to the many barriers we faced to sign publicprivate contracts,” she says. “Now that contracts are finalized, everything else will fall in line.”
“Mexico’s lower costs for clinical trials outweigh the attractive conditions offered by other countries”
ICON has signed contracts with IMSS and other healthcare institutions to perform clinical trials. Although doctors from public institutions often have no experience in these studies, Hahn points out that institutions are often open to provide as much training as necessary to their physicians. The expectation is for these collaborations to strengthen, thanks in part to renewed interest from the federal government under President López Obrador.
The one possible hurdle is regulatory delays that could set the sector back. “CROs need continuity in regulatory processes to avoid a slowdown in approval times,” says Hahn. ICON is opening new business areas at its offices in Mexico City to prepare for increased demand for its services, one of which is focused on data management, which it expects will bring an added value to clients. “Our goal in the short term will be to continue strengthening our business areas and prove to our headquarters that they were worthy investments.”
The company is also partnering with ACROM in offering courses to keep clients updated on the latest changes in regulation. During 2018, ICON participated as a lecturer during a pharmacovigilance training program for CROs and pharmaceutical companies organized by ACROM. “While the sector is already knowledgeable regarding pharmacovigilance procedures, these change continuously so companies must remain updated at all times,” says Hahn. “We will push to make this an annual course and keep CRO employees up to date.”
PHARMACOECONOMIC STUDIES GUARANTEE BETTER ACCESS TO MEDICINES
ARTURO RODRÍGUEZ CEO of INFINITE
Q: Why should small biotechnological developers consider INFINITE the ideal clinical research partner?
A: As a small, flexible and adaptable company that works according to the needs of these types of developers, we provide greater chances of success for our partners. Developers are not affected by administrative processes derived from dealing with a more complex CRO, which allows the client to focus only on the development of their molecule. INFINITE also is specialized in integral clinical operation strategies and gives support to small and medium companies with shoestring budgets for investment.
One of our current projects is with a developer of a vaccinerelated to allergic reactions. We help this client look for potential users of its medicines in Mexico and we also collaborate in finding the appropriate primary and secondary packaging solutions to carry out randomization processes. In collaboration with UNAM and hospital partners, INFINITE also helped the company find qualified researchers. Today, we have completed 80 percent of the project and the client is satisfied with our performance.
Q: How can pharmacoeconomic studies increase access to healthcare in Mexico?
A: Pharmacoeconomic studies help to evaluate a new drug’s cost-effectiveness and to provide tools to make the best decision when selecting drugs and clinical devices for patients. Previously, clinical research only considered drug safety and efficacy, but economic factors are now included to ensure product cost-effectiveness, thus guaranteeing entry to the basic tables of public institutions.
Previously, companies developed pharmacoeconomic studies when the product was ready to enter the market. Nowadays, it is necessary to perform these at an early stage to evaluate the cost-benefit of research products.
INFINITE is a 100 percent Mexican institution with 15 years of experience in clinical research in Latin America. Its services include clinical study monitoring from phase II to phase IV and medicine registration for institutional basic lists
Q: What is INFINITE’s approach to evaluating the efficiency of a pharmacological study?
A: We use an integrated approach that considers all variables throughout the treatment and the drug’s success rate after the patient has been treated. For example, with oncological medicines, we evaluate how long the patient was hospitalized, how many sessions they went through, the side effects that appeared and other general indicators to determine the cost of each variable. Meanwhile, a study for a diabetic treatment considers the drug’s ability to keep the disease under control for a certain period of time, as well as the cost of all the related diseases that may appear as a side effect of the treatment, such as circulatory problems, diabetic foot or more complex metabolic issues.
Q: How can the federal government benefit from medical research to provide better access to healthcare?
A: The clinical research sector attracts foreign investment which helps generate jobs and opportunities for both people and businesses. We want to help the government understand how this can benefit the public healthcare sector and the entire health value chain, while also supporting its goal toward universal healthcare access. Clinical research gives patients access to new treatments for free; yet, Mexico only contributes 1 percent of the world’s clinical research projects. If the country were to attract another 1 percent of the world available market, that could represent up to US$200 million in added clinical research investment.
Q: How will INFINITE’s rebranding strategy impact your position in the market?
A: In the beginning, we enjoyed a certain advantage in the country and in Latin America because we were one of the few companies that gave big CROs legal representation. This made it easy for clients to identify us. Now that we have expanded our reach to international operations, we have found other companies that have very similar acronyms to ours. Our goal is to stand out in the market, which is why we decided to rebrand ourselves as INFINITE on our 17th anniversary on May 16, 2019. This implies revamping our public image and the way we interact with new market conditions. We need to cater to young innovators in charge of the decision-making processes.
TECHNOLOGY A KEY FACTOR TO ENSURE CLEAN, SAFE OPERATIONS
JOSÉ LUIS JACQUES Director General of Lavartex
Q: How much does the healthcare sector contribute to Lavartex’s business?
A: Lavartex has three divisions: healthcare, hospitality and the recently launched industrial uniforms area. Healthcare is our largest division now, followed by hospitality. The industrial uniforms division focuses mainly on the automotive, aerospace, pharmaceutical, foodstuffs and chemical sectors.
We provide services in 29 states. We are only missing Sonora, Baja California and Baja California Sur, which we expect to enter by 2021. We are happy to work with serviceoriented hospitals that aim to provide the best care possible to their patients. Our services ensure that products arrive either hygienically clean or completely sterilized to the hospital.
Q: What are the main gaps Lavartex has identified in Mexico’s hospitals and how do these influence your operations?
A: Mexico still lacks the necessary healthcare infrastructure to care for its large population. There is a wide gap between the services provided by the private and the public sectors. Moreover, the quality of service in public institutions can vary widely depending on the institution. Some federal hospitals have standards equal to those in private hospitals while some state institutions have large deficits in services and supplies, especially at the primary care level.
From the beginning, Lavartex’s goal has been to provide high-quality services comparable to those of first-rate hospitals across the globe, regardless of whether clients are in the public or private sector. Very few private hospitals in Mexico hold a Joint Commission International certification, but each day more and more are moving in that direction.
Q: How is Lavartex investing in technology to guarantee it provides high-quality services?
A: Lavartex has three core principles: safety, honesty and discipline. Our safety practices extend throughout our entire operation, from our clients to our employees. We aim to prevent all work accidents and ensure that products
arrive safely and hygienically clean and/or sterilized to their destination. Lavartex is the leader in clean products for hospitals thanks to these practices and we see it as our responsibility to continue promoting the best safety standards throughout our entire distribution chain. To do so, we invest in training and certifications for our personnel to ensure they follow standard procedures. We also monitor our suppliers and only work with those we can confirm adhere to high safety standards.
Q: What technology investments set Lavartex apart from its competition?
A: While our oldest plant is 97 years old, we continuously invest in state-of-the art equipment to increase our productivity and quality of service. In 2018, we expanded our plant in Tlaxcala that now incorporates equipment comparable to that of European facilities. We are beginning to invest in the use of robots at our plants and in the digitalization of our systems, mainly at the point of delivery and in operational controls to improve customer experience. We are planning to incorporate a radiofrequency identification (RFID) microchip in all fabrics, which will greatly facilitate inventory control. At this point, 35 percent of our CAPEX covers innovation in software and hardware to improve our processes.
Q: Why is technological investment so important to Lavartex?
A: We are gradually incorporating technology into our services and processes. Companies that do not adapt will disappear. Few of our competitors are investing in this switch because most are following labor practices developed in the 1970s. Mexico is still a labor-intensive country but many industries, including automotive, aerospace and healthcare, are gradually incorporating more technology. If we do not perform this switch alongside them, we will be unable to work with them.
Lavartex, founded in 1922, is a leading provider of specialized textile washing solutions. It offers world-class integral services for hospitals, hotels, restaurants, sports clubs and manufacturing facilities
LOGISTICS & SUPPLY CHAIN
Not too long ago, many healthcare organizations viewed logistics as an afterthought; they considered it as simply a way to stock products well enough to avoid shortages and overages. Today, the supply chain is seen as a key element to ensure the efficiency of processes, resources and employees that work in harmony to provide secure treatments and services to the patient. Globally, the sector is perceiving an increasing demand for home-based healthcare, temperaturesensitive pharmaceuticals and tailor-made logistics services. While logistics are further complicated in Mexico due to infrastructure and safety concerns, operators are increasingly betting on technology and training to improve their practices.
This chapter analyzes, from interviews with distributors, logistics operators and other key players, how technologies have become a mechanism to address the challenges and opportunities of delivering products in a timely and secure manner.
CHAPTER 9: LOGISTICS & SUPPLY CHAIN
192 VIEW FROM THE TOP: Víctor Soto, Distribuidora Levic
193 VIEW FROM THE TOP: José Alberto Peña, Grupo Marzam Healthcare Distribution
195 VIEW FROM THE TOP: Patrick Troop, Pharma Tycsa
196 VIEW FROM THE TOP: Alejandra Groff, GMMC
197 VIEW FROM THE TOP: Bernd Schreiber, Multivac Mexico Jesús Garcia, Multivac
198 PROJECT SPOTLIGHT: Levic: Bringing Health to the Population
200 VIEW FROM THE TOP: Ana María Pedroza, MedPrimex
201 VIEW FROM THE TOP: Eduardo Trueba, ETrueba Distribuciones Farmacéuticas
202 VIEW FROM THE TOP: Alberto Barella, EMP
204 VIEW FROM THE TOP: Gretel Lozano, LG Distribuciones
205 VIEW FROM THE TOP: Rodolfo Camargo, El Crisol
206 VIEW FROM THE TOP: Eduardo Tapia, DHL
207 VIEW FROM THE TOP: Eric Delgado, Grupo Sicamsa
208 VIEW FROM THE TOP: Karl McDermott, Morpheus.Network
209 INSIGHT: Francisco Cruz, Hubble Logistics México
210 INSIGHT: Alesio Bereciartu, OCASA
211 INSIGHT: Ildefonso Vázquez, IVG Group
COMMON STRATEGY NEEDED TO INCREASE ACCESS TO MEDICATIONS
VÍCTOR SOTO Director General of Distribuidora Levic
Q: Approximately 80 percent of the medications you sell are generics and 20 percent are patented. How will the new distribution center in Vallejo impact your product portfolios?
A: With our new distribution center in Vallejo, we will be able to grow our portfolio to more than 10,000 different products. These will include almost all available generic medications in the market and will create an opportunity to broaden our offer of patented medications, OTCs and formulas. Everything is part of our objective to provide more health resources to the population. In the short term, we are aiming for sales of about 50 percent generics and 50 percent patented medicines in terms of value. In units, this translates to 75 percent generic medications and 25 percent patented products and others.
Highway security incidents represent losses of close to MX$10 million
(US$510,000) yearly
Q: How might technology transform the medicine distribution sector in the long term?
A: Distribuidora Levic is a 100 percent Mexican company with a strong commitment to providing safe, quality medicines and medical supplies to people with the objective of increasing access to healthcare and improving the population’s quality of life. Our new distribution center in Vallejo, Mexico City, is making efforts to automate its processes and we expect it to be up and running in November. Automation will not lead to a complete transformation, but it will improve the speed, efficiency and precision in which sorting is carried out, which will be reflected in better service for the population.
Distribuidora Levic is a leader in storage, distribution and sale of medicines in Mexico. It has a commercial alliance with 150 national and transnational production laboratories and commercializes more than 5,000 pharmaceutical products
Q: How does Levic guarantee fast delivery of products given the particular challenges of the region, including security and infrastructure?
A: Our logistical operation is highly effective in reaching clients every day in every corner of the country. If there is a contingency due to a security issue, we send the order again after a 24-hour window to ensure the client receives the order. Highway security incidents represent losses of close to MX$10 million (US$510,000) yearly. We try to minimize them with 24-hour monitoring through satellite tracking of all our units, as well as guards on particular routes.
Q: What would you identify as the main challenge in the pharmaceutical industry in Mexico?
A: There is a need for a strategy between the pharmaceutical industry and the government that allows greater access to medications and other health-related resources for the population, while at the same time stimulating development of the industry to generate jobs and to boost the economy.
Q: Last year, you mentioned Distribuidora Levic was expecting to grow 70 percent in the next five years. What actions are you taking to accomplish growth?
A: Our growth in 2019 will only be 3 percent below what we expected. We believe the cause was weaker national economy. This will improve in 2020 when all the changes we are seeing reach a level of maturity. We will continue to look for new clients and markets, expanding our portfolio and improving our service. At the moment, we do not have a solid projection of growth for the next five years due to the current economic landscape. However, we hope to grow at a double-digit rate annually over the next two years.
Q: What are your three main goals for 2019-2020?
A: The first will be to start full operations at our new distribution plant: the CEDIS project in Vallejo. Secondly, we want to extend our portfolio to increase our competitiveness in the market. Lastly, we want to maintain our double-digit growth.
MEXICO’S OLDEST DISTRIBUTOR OF MEDICATIONS LOOKS TO THE FUTURE
JOSÉ ALBERTO PEÑA Director General of Grupo Marzam Healthcare Distribution
Q: What results has Grupo Marzam obtained from its diversification strategy in its sales channels and product offering?
A: We began seeing good results from this strategy in 2018, mostly in sales to the private sector where we developed several channels, including independent, regional and national chain pharmacies, self-service stores, private hospitals and insurers. Moreover, we are diversifying our client base to incorporate the public sector, which now represents 4 percent of our sales. Our channels in this sector are consolidated tenders, decentralized hospitals and state healthcare systems, among others. Grupo Marzam also diversified its product offering from prescription medications to now include consumer, hygiene and beauty products, generics and medical supplies and devices. All these different sectors are now growing steadily. In 2018, the company’s objective was to ensure that our growth remained sustainable for the long term.
Q: How is Grupo Marzam contributing to the development of a patient-centric model?
A: While we do not interact directly with patients, we want to create links with those that do, including government, private pharmacies, hospitals and insurers. We want to position ourselves as the best business partner for those who treat patients by ensuring efficiency, good service and dynamism. We are now analyzing our logistics platform to see if the way we work is the best solution for our clients as most of it was designed 15-20 years ago. The market, our commercial partners and consumers have changed. Technology is playing an increasing role in logistics and it is necessary to take that into account when analyzing our internal operations to see whether we need to change. We have to decide how we should change in the coming years to address the needs of the future. For instance, in some Mexican regions where we have distribution centers, business has changed enormously and we are discovering that these centers are not in the best location to meet current and future market needs.
Our new distribution center in Lerma is different from the previous 10 as it was developed with the goal of providing
service to our own group companies instead of to other companies. The center will allow us to increase our efficiency and assure the optimal handling of our stock. It was the creation of this center that led us to question our internal operations to address whether they could be improved. This is the time for us to change.
Q: How will Marzam use technological trends to improve its operations?
A: For the past two years, we have been developing a technological roadmap that we will follow for the next five years. This roadmap let us identify the company’s needs and how to implement new solutions without paralyzing our operations. Technology has to improve our operations, not become an obstacle for business. Technology is allowing us to make our operations safer, faster and more dynamic while being fully focused on clients. Technology evolves on a daily basis but we are well-positioned for these changes. For instance, our entire sales force manages orders through their smartphones. They also have access to stock information online and in cities where we have a distribution center, we can offer same-day delivery in some cases. In the worstcase scenario, the product is delivered the following day. Previously, it took us between four to five days to release a credit line for a pharmacy. Now it takes us two hours.
Q: How can the technology you are introducing into your practices be used to predict market changes?
A: Close monitoring of changes in the market may allow us to predict which medications specific areas might need, based on data from that same year. We use this information internally to determine how much of a product’s stock should be allocated to a specific location. So far, we are using last year’s data to estimate the following year’s stock but we want our estimates to be in line with current market needs, not last year’s.
Grupo Marzam Healthcare Distribution, created in 1934, is now the oldest distributor of medications in Mexico. The company has 11 distribution centers and 43 regional centers with 16,000 clients in the public and private sectors
GOOD MIXING PRACTICES IMPROVE TREATMENT EFFECTIVENESS
PATRICK TROOP
Managing Director of Pharma Tycsa
Q: How has Pharma Tycsa’s Clinical Breast Integral Service evolved since 2016?
A: COFEPRIS establishes the minimum requirements for preparation and dispensing of nutritional and medicinal sterile mixtures in NOM-249. At the moment, there are 25 mixing centers that comply with COFEPRIS’ regulations in four states and 19 belong to the same company. This means most health institutions are mixing components outside the norm, threatening patient safety, especially among those receiving oncological treatment.
Pharma Tycsa created a service to improve compounding practices through the construction of mixing centers in facilities providing oncological treatments. The company started providing this service at breast cancer clinics but today caters to all oncological areas. Our compounding centers ensure compliance with safety standards to lower contamination risks and increase treatment effectiveness. In most cases, patients with cancer die from side effects and not precisely from cancer. Thanks to our solution, we can guarantee patients are not exposed to contamination that could be fatal.
Q: What recommendations would you give to health authorities regarding the low concentration of mixing centers?
A: The Mexican norm is more demanding than most international regulations. The first step should be to align the Mexican norm with international standards and, secondly, to incentivize the use of hard data to evaluate existing compounding centers homogeneously. This would provide greater certainty regarding the performance of all mixing centers and a more measurable improvement opportunity for each. For example, Pharma Tycsa built and equipped its laboratory in four months but going through the regulatory red tape took two years. Working with international standards, objective and not subjective indicators, could simplify this process without compromising quality and help provide patients with better and safer oncological treatments.
Q: Why is Pharma Tycsa the ideal partner for laboratories?
A: Around 60 percent of our sales focus on multinational laboratories while the remaining 40 percent are oriented to
national laboratories. Pharma Tycsa is an attractive partner for laboratories because it can guarantee product safety and ensure patients receive their treatments in optimal conditions. Most oncological treatments require a controlled temperature environment and cold chain logistics. Pharma Tycsa is involved in the whole process, ensuring appropriate treatment transportation as well as optimal conditions for mixing the compound. Our philosophy is that safety involves everything from manufacturing, transportation and mixing to the moment of application.
Q: What are the advantages of a laboratory working with a compounding center?
A: The final stage of the treatment chain takes place at infusion centers where patients receive chemotherapy, for example. Pharma Tycsa created a new service that efficiently connects laboratories with infusion centers through compounding centers. Though infusion centers have standards regulated by COFEPRIS, Pharma Tycsa observed that most do not comply with regulations related to the mixing of treatments. Through its new solution, Pharma Tycsa ensures regulatory continuity, safety and treatment effectiveness from the laboratory to the infusion center.
Q: What are Pharma Tycsa’s growth expectations for 2019?
A: In 2016, Pharma Tycsa achieved its goal of incorporating its services at oncological hospitals and expanding its clinical Pharmacy Integral Service, a process that continued in 2017. For 2018-2019 the company has three main goals: promotion and construction of compounding centers across the country, development of health attention schemes for chronic degenerative diseases and consolidation of our traditional treatment distribution channels for the public sector. Pharma Tycsa is also working individually and with laboratories in the development of treatments for diabetes, hypertension and obesity.
Pharma Tycsa is a distribution, marketing, representation and project development company focused on pharmaceutical products. The company has strategic relationships with laboratories and wholesalers to support its services
INTEGRATING EQUIPMENT TO GENERATE NEW FUNCTIONS
ALEJANDRA GROFF Director General of GMMC
Q: How is GMMC evolving its value proposition to adapt to the sector’s changing needs?
A: We are working with many different brands, such as Welch Allyn and Schiller, to integrate different equipment into a single system that gathers all available information to provide new functionality. GMMC is also working with doctors to develop projects that allow them to provide care in rural areas. Over the past six years our goal has been to provide remote diagnostics. It is not easy, but we hope that HillRom’s acquisition of two brands we distribute, Welch Allyn and Montara, will facilitate this by allowing the generation of a broader product line. We are working with manufacturers to develop comprehensive solutions that we can offer to doctors and clinics. The old sales model that involved the sale of equipment no longer works; it is now necessary to offer clients internal solutions that directly address their problems.
Q: How has your business model evolved and what role do integrated solutions play in it?
A: We are focusing more on subleasing the equipment and providing comprehensive services. The goal of these services is to incorporate technology into daily operations so that doctors, hospitals and clinics can offer patients all the tests they require from the moment they are diagnosed and during their rehabilitation. Seventy percent of our sales are directed to the private sector.
Q: What benefits do hospitals and doctors get from acquiring your solutions?
A: Many hospitals are seeing the benefits of integrating all information into a single system, which automatically stores it in the patient’s clinical file. Compiling this information reduces errors and provides a cleaner and more precise file compared to the previous method. This technology allows doctors to reduce their margins of error and gives all medical professionals more time to devote to other matters. Hospitals
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
are increasingly aware of the benefits of acquiring high-quality supplies; they are educating themselves and switching out low-priced products for better equipment.
Q: What are the main challenges when training professionals to use GMMC’s solutions?
A: Unlike younger generations, older doctors have been slow to incorporate technology into their day-to-day practices, although they are open to learning. However, we have found that nurses are more reluctant to accept anything that takes them out of their comfort zone, so we have to work much harder to convince them to use the system.
Q: How did GMMC tailor its product portfolio to address current market needs?
A: GMMC started operating with the goal of importing products from medium and small-sized companies that did not have a budget to hire their own distributor in Mexico. In the beginning, we were three partners that handled products from around the world but our product portfolio was too diverse and we felt it was better for the business that the three of us separated.
Although we now all operate individually, our close connection allows us to easily purchase products from regions we do not normally manage. Our product line is still too big; to continue growing, our goal is to refine our product portfolio and acquire new products only in areas related to cardiology and diagnosis. We will also increase our online presence and focus on our existing customer base instead of looking for new ones.
Q: How is the market for medical devices different from one region to another and how does this impact your sales?
A: Demand for our products varies depending on the region. For instance, we have had trouble entering Merida’s market because it is common for businesses in the city to import medications from Miami. Although this market is challenging, we will continue our push to expand into the Southeast. The north of the country has been much more welcoming to foreign products with the exception of Baja California, which receives few products and at exorbitant prices due to local import and export taxes.
TRANSFORMING PACKAGING SOLUTIONS THROUGH TECHNOLOGY
Bernd Schreiber CEO and Executive Director of Multivac Mexico
Garcia Manager of the Medical and Industrial Division of Mexico,
Q: How is Multivac adapting its value proposition to the evolving needs of the medical industry?
BS: Multivac’s goal is to grow by offering more than packaging solutions. We offer complete packaging systems that incorporate robots, X-ray equipment and thermoforming machines, as well as packaging materials that can meet the extremely demanding requirements of the medical industry in terms of certifications. We are also implementing Industry 4.0 practices and investing in technology to use cloud data to remotely diagnose equipment and increase manufacturing capabilities. This will help reduce human error.
JG: The goal of Multivac’s medical area is to provide quality products and reduce risks. Recalls are a major problem in the pharmaceutical sector and 50 percent of these are due to product packaging. We work with clients to develop a strategy that addresses every step along the way, developing tailored approaches according to the conditions in which the product should be packaged.
Q: What are Multivac’s main contributions to the medical sector and which companies are its main clients?
JG: We have global contracts with the largest medical devices companies in the world, including Johnson & Johnson and Medtronic and with Mexican manufacturers. Multivac has installed distribution centers in strategic areas, including Tijuana, Nogales, Chihuahua, Ciudad Juarez, Guadalajara, the Bajio and Mexico City, to supply these companies. In the pharmaceutical industry, we provide secondary packaging; in the medical industry, we deliver primary packaging. Our equipment for the pharmaceutical sector focuses more on automation and control than on packaging, while for medical devices we offer a complete portfolio.
BS: We manufacture over 1,200 thermoforming machines per year. Multivac was formerly classified as a thermoforming company but it has invested strongly in the acquisition of new companies. It now incorporates labeling machines, X-rays, robots and other equipment.
Q: What are the advantages of incorporating Industry 4.0 practices in Multivac’s operations?
BS: Industry 4.0 is here to stay. Even though Mexico has a large and capable workforce, companies face significant turnover that could be solved through automation. In terms of processes, it is now necessary to monitor every single package individually, which generates large amounts of information that must be processed. Multivac is also working on improving efficiency in the production and distribution of medical products. Our machines are able to self-diagnose and monitor when manufactured pieces fall outside of the specified production parameters and send an alert when equipment repairs are necessary. This increases equipment efficiency and raises production output by 15-20 percent.
JG: The FDA introduced a regulation concerning Unique Device Identification (UDI) in 2012 that is still under revision. Previous packaging strategies included lot numbers for a large number of products. UDI identifies each individual product and provides comprehensive information related to when and where the product was produced, packaged, sterilized and stored. This traceability is essential for quality control. We are creating a cloud database with packaging specifications for every product we work with. This will help us consider the different needs of each manufacturer and adapt our equipment automatically to the packaging materials that products use. This data bank was created using real information obtained from tests with clients.
Q: What new products has the company introduced to the Mexican market?
JG: We recently introduced an innovative packaging product called SNAPSIL. What differentiates this product is its “snap” opening mechanism. To open a glass ampoule, pressure is applied, which could lead to cuts or small pieces of glass falling into the product. SNAPSIL is made of plastic, avoiding these risks and making the product much easier to open.
Multivac is a Germany-based company specialized in packing solutions for the medical and foodstuffs industries. Its solutions can be used in semiautomatic and automatic packing systems for medical and pharmaceutical products
Jesús
Central America and the Caribbean of Multivac
DISTRIBUIDORA LEVIC: BRINGING HEALTH TO THE
POPULATION
With more than 18 years of experience as a leader in medicine storage, distribution and sales, Levic is a strong partner to independent pharmacies, distributors, clinics, hospitals, government agencies and health professionals. The company’s vision is to be the No. 1 pharmaceutical distributor, while ensuring the greater good for employees and society. The company strives to meet market requirements with highquality products at the best possible price under a framework of respect, equality, commitment, honesty and loyalty.
With eight warehouses spanning 64,639m3, Levic covers 100 percent of the country’s territory and offers a portfolio of more than 4,500 products, including bioequivalent, transnational and patented medicines, healing material and more. To continue providing solutions to clients, Levic inaugurated its Robotized Distribution Center Vallejo (CEDIS). The new CEDIS is integrated with automated mechanisms and processes that provide Levic with better control, logistics and improved services for customers.
CEDIS Vallejo is the company’s first robotized corporate unit and, along with its other distribution centers in Tultitlan, Tlahuac, Veracruz, Tabasco, Chiapas, Queretaro, Michoacan, Leon, Jalisco, Puebla, Monterrey, Tijuana and Merida, will help the company meet its clients’ demands. The new center will commercialize more than 5,000 high-end technology products. Structurally, it has a capacity of 8,100m2 where thousands of strategically ordered products can be handled and stored without difficulty for active and efficient distribution throughout the country.
INVESTMENT IN PREVENTION MEANS LESS EXPENDITURE FOR TREATMENTS
ANA MARÍA PEDROZA Director General of MedPrimex
Q: What is MedPrimex’s most successful venture in Mexico, considering its diverse product portfolio?
A: OC-Auto FIT is, without a doubt, our strongest product. It is an immunochemical colorectal cancer screening test, meaning an improved fecal occult blood test. We started developing this product six years ago, recognizing that a clinical test for colorectal cancer (CRC) could save lives through prevention. At MedPrimex, we believe prevention is the starting point to proper healthcare and a way to make expenditure in this sector much more efficient. Treating a patient with CRC costs the government over MX$1.5 million (US$78,000) a year, while a MedPrimex test to detect CRC costs less than MX$1,000 (US$52).
CRC is the third-most frequently diagnosed cancer in the world and screening has proven effective for early detection. MedPrimex purchased a state-of-the-art analyzer that is 99 percent sensitive and 99 percent specific to provide the most reliable results in the market. Some of the advantages of OC-Auto FIT are that it is noninvasive, samples can be collected in the privacy of a person’s home, it detects lesions throughout the length of the large bowel, requires no bowel preparation and is very affordable.
Q: Who can benefit the most from MedPrimex’s OC-Auto FIT and how have you worked to raise awareness on the importance of CRC testing?
A: OC-Auto FIT is best-suited for people over 25 years old who have a family history of cancer. Otherwise, it is recommended for 45-year-old patients or older. Statistically speaking, of every 1,000 people who take our CRC test, 25 need to follow up with a colonoscopy and only seven test positive. OC-Auto FIT’s reliability stems from its ability to distinguish occult blood from blood derived from raw foods and color from vegetables such as beets or red sodas.
MedPrimex is a 100 percent Mexican supplier of medical equipment and disease prevention and detection systems. The company’s products include a FIT Test for Food Sensitivity, ADNnutriControl, ADNhealthControl and OC-Auto FIT
Awareness is important not only for early detection of cancer but for prevention. There is a great deal of ignorance regarding the benefits of a good diet in preventing cancer and the fact that smoking increases the likelihood of colon cancer. We work closely with the Ichy & Santy Foundation for early detection of cancer to disseminate knowledge regarding prevention and early detection of CRC with OC-Auto FIT, especially among vulnerable segments of the population.
Q: How does MedPrimex use genetics in relation to diet and the potential to reduce the probability of getting cancer?
A: Our ADNnutriControl program uses genetics to help patients lose weight, improve their quality of life and eat healthier. It is a genetically-customized program that tests genetic variations to determine how a person’s body responds to certain nutrients and food ingredients, thus providing insight into how to eat appropriately. This program helps people lose weight 2.5 times faster without affecting nutrition. Genes are the blueprint of our body and understanding how they work can help prevent diseases like obesity, which in 80 percent of the cases is related to a genetic predisposition. Unfortunately, penetration of genetic testing is still very low in Mexico because it is not affordable for everyone. Prices average MX$30,000 (US$1,560), which means these tests are only available to upper-income households.
Q: What alliances has MedPrimex formed to better market its solutions?
A: We work with a network of allies, such as Dr. José María Remes of the Autonomous University of Veracruz, to develop treatments. In cancer detection we work with Seguro Popular of Hidalgo and for early colonoscopies we have an alliance with Clínica Gástrica, INCAN and other health institutions. We have provided OC-Auto FIT to Seguro Popular for some years. Our goal now is to collaborate with ISSSTE and IMSS. We are lobbying with the authorities, representatives, Congress and other high-ranking officials to make CRC screenings a priority for healthcare. To ensure success, we are building a network of doctors to spread the word about the importance of CRC testing and the advantages of our OC-Auto FIT.
MARKET SATURATION SPURS NEW BUSINESS STRATEGY
EDUARDO TRUEBA Director General of ETrueba Distribuciones Farmacéuticas
Q: What makes ETrueba Distribuciones Farmacéuticas different from other companies that offer similar services?
A: Much has changed in the 60 years we have been in the industry. My grandfather, who was a pharmacologist, cooked and prepared his own medicine. As years passed, he started distributing medicine from national laboratories to clients. My father developed our supplier catalog and always tried to find new ways to distribute products.
Ten years ago, our place in the distribution chain changed. Pharmacies started to manage the whole supply chain and to effectively skip the middleman by dealing directly with laboratories. These chains were much bigger players and had access to a lot of capital. This forced us to find new market niches by expanding our catalog and type of clients. We moved to a B2B model and stopped supplying doctors, pharmacies and clinics. Instead, we focused on companies that are not necessarily in the health sector but do have internal health services. This move suited our strength of providing integrated solutions. Our clients require consistent deliveries, steady prices and efficient billing mechanisms. Our mission remains to understand our clients’ needs and try to cover them in every single way.
Q: What are the strongest products in your portfolio?
A: We handle generics, patented products, healing material and medical equipment. Every one of these has a different margin. My philosophy is to solve clients’ problems and that means providing whatever product they need. About 50 percent of our distribution focuses on medication and 50 percent on medical equipment and healing materials.
Q: What is your relationship with the public side of the industry?
A: Working with the government used to be fairly easy until a year ago. Now, tender requirements have become too complex. ETrueba Distribuciones Farmacéuticas has a solid history and a healthy record. We meet all
the necessary regulations and norms, which is one of the reasons why banks come flocking to us with credit proposals. We also have the advantage of being wellestablished and having significant market experience, which gives us the opportunity to guide others in tender processes. However, due to the current political reality, we are not really focusing on the public sector. Furthermore, we are not interested in hospitals, public or private, because it is a niche that is already saturated. Private companies are more suitable for our current business model.
Q: What is your strategy for expansion and growth in the country?
A: We would like to attract a greater number of clients and grow the volume of products supplied. Our operations are spread across Yucatan, Campeche and Quintana Roo and we still have much potential for growth. There is a great deal of work to do to consolidate this area. This will keep us busy for the foreseeable future. If we decide to expand beyond these states, it would be to Veracruz or Chiapas.
Q: What are your main three near-term goals?
A: We have seen average annual growth of 25 percent in revenue since 2017. Despite not being directly hit by economic challenges, some of our clients do feel the impact. This year, we want to grow at least at the same rate as last year and become the prime supplier for our clients. We also want to be seen as a trustworthy partner for hospitals, pharmaceutical companies and the government. In terms of territory, we want to consolidate our operations in the Yucatan peninsula or the Southeast. As a company that provides health products, our obligation remains to the person who will receive the medicine or treatment, which is why we strive to meet all regulatory norms and maintain our ethical standards.
ETrueba Distribuciones Farmacéuticas is a leader in the distribution and supply of medicines, medical supplies, diagnostics and high-quality equipment for companies in the public and private health sectors of the Mexican southeast
A SOLUTION FOR EVERY BUDGET
ALBERTO BARELLA General Manager of EMP
Q: What role does Fujifilm play in your strategies?
A: We are one of the eight Fujifilm equipment distributors in Mexico and we are present in Oaxaca, Chiapas, Tabasco, Campeche, Yucatan and Quintana Roo. We have our corporate offices in Merida and have been here for 15 years. We also have an office in Chiapas in Tuxtla Gutierrez and want to open an office in Oaxaca. Most of our sales are for imaging equipment, followed by endoscopy and clinical analysis equipment for laboratories. We handle the equipment installation and maintenance and we have more service engineers than sales agents. This means that customers can expect their equipment will be wellmaintained and that if there is a problem, we can help quickly and with the right expertise.
and repairs for these machines are more costly and take more time.
Q: How would you describe the market for medical equipment in the southeast?
A: The southeast is the poorest zone in our country and if there is no investment from the government in health, it will lead to a vicious circle. Prices of health services remain low because people would not be able to afford otherwise. This forces hospitals with imaging and radiology departments to look for cheaper equipment to get an easier return on their investment, which often means buying second-hand or refurbished machines. There is a large market for this kind of equipment in the southeast.
MEDICAL DEVICE CONSUMPTION IN MEXICO FROM 2016 TO 2020(MILLIONS)
MEDICAL DEVICE CONSUMPTION IN MEXICO FROM 2016 TO 2020 (US$ million)
12,000
11,000 11,500
12,500 2020* 2019* 2018* 2017* 2016*
*Forescast
Source: Statista
Fujifilm equipment is robust and technologically advanced. Other brands offer equipment that is often a combination of hardware and software from different companies. This can cause malfunctions and makes the equipment more complex to use. In addition, maintenance
Equipos Médicos Peninsulares (EMP) is a Mexican distributor of medical equipment, predominantly of Fujifilm, in the south and southeast of the country. The company is in the process of becoming a distributor for GE and other brands
There are signs that the market is maturing, however. When new technologies become common in health services in the center and north of the country, people eventually start asking for them in the south. An example is mammography. In the southeast, from 2015 to 2018, the number of breast cancer diagnoses doubled, which means more scans were necessary. Unfortunately, many hospitals and clinics continue to use dated analog technology.
There is an overall lack of tools that in other countries are considered basic. In some cases, it is because they cost too much to acquire, in other cases, doctors simply do not know them. An example is breast tomosynthesis, which is a 3D X-ray imaging technique that allows you to detect breast cancer at an early stage. But this requires digital equipment with advanced technology. Last year we sold six machines with this capability. We organized a state congress for gynecology in Merida where we introduced one of these machines to demonstrate its capabilities to doctors and raise awareness about the newest technology in the market.
Q: Who are your main clients?
A: We supply to all types of clients and to anyone that has a need for the technology we offer. Our main
clients are hospitals with imaging services or an imaging department. We have a team for each type of machine, including refurbished equipment. Regarding the latter, the initial investment is going to be less but it is likely to last a third of a new machine’s lifetime. We always offer new equipment first, but clients often choose refurbished options. We work with both the private and public sectors at a rate of 60-40. Our operations are supported by Fujifilm, which sends its own specialists to accompany us during client visits. This is particularly common for larger and more complex projects. Fujifilm also supports our participation in conferences. These are important opportunities to spread brand awareness and showcase the abilities of this high-end technology.
Q: What opportunities do you see in the clinical analysis niche?
A: We mostly cater to medium and small-sized laboratories, since we do not have solutions for large clients. We are in the process of signing a contract with GE, which will open this door to us. We are going to be the company’s official distributor in the southeast. We have already supplied material for them in the past but we will start distributing larger equipment meant for tomography, resonance scans and others tests. GE offers good quality and a competitive price. We will focus on being distributors for these two manufacturers and build our portfolio with their solutions.
TOP 10 GLOBAL MEDICAL DEVICES COMPANIES
1. Johnson & Jonhson
2. GE Healthcare
3. Medtronic
4. Baxter International
5. Siemens Healthcare
6. Phillips Healthcare
7. Cardinal Health
8. Covidien
9. Abbott Labs
10. Stryker
Source: ProMéxico 2017
Q: What are your growth expectations and what are your main goals for 2019 and 2020?
A: We reached growth of 35 percent in 2017 and 2018. For 2019, we have projected growth of 25 percent, although early numbers show we might surpass our initial expectations. By including GE equipment this year, we aim to become recognized distributors in the Mexican market. By 2020, we want to return to growth of 35 percent, minimum. In the meantime, we will continue to strengthen our services to ensure all our clients’ needs are met.
TRUST ESSENTIAL FOR A SUCCESFUL DISTRIBUTION NETWORK
GRETEL LOZANO General Manager of LG Distribuciones
Q: How are LG Distribuciones’ activities divided between its different business verticals?
A: Our focus is mostly on industrial activities, particularly in the food sector. Pork producer Keken and poultry producer Bachoco are among our biggest clients. One of our flagship products in this sector is testing material for salmonella, but we also work with hospitals and other health institutions, such as the Ministry of Health of Quintana Roo. Our products include medical devices, glassware and reagents. Our goal is to position ourselves as the best distributors among a strong field of competitors. Clients want discipline and certainty of delivery. We work according to COFEPRIS and its requirements, constantly implementing protocols to properly verify compliance to any new regulation.
LG Distribuciones has presence in Veracruz, Campeche, Yucatan, Quintana Roo and Chiapas
Q: What territory do your operations cover and where would you like to expand?
A: Our network stretches from Veracruz to Campeche, Yucatan, Quintana Roo and Chiapas. We are not exporting to other countries but do have a presence in Guatemala. We are looking at possibly moving further south, toward Belize. Our expansion plans depend on market opportunities. We are conducting market studies on the alimentary industry, particularly linked to our clients Keken and Bachoko. We certainly want to grow our portfolio and number of clients, as well.
Q: What are the main challenges you have found in product distribution?
LG Distribuciones is a distribution company based in Merida, Yucatan. It supplies consumables and equipment to about 250 clients spread across the country’s southeastern states. It supplies laboratories, hospitals and other health institutions
A: Our main challenge is keeping the product in the right conditions throughout the entire process. Our cargo normally needs refrigeration and using dry ice to cool the products can be challenging over long distances. These climate requirements also imply higher transportation costs, which is an extra hurdle when trying to maintain competitive prices. In terms of routes, road and weather conditions can cause delays, as well as customs. We need to be flexible and always anticipate potential problems. Sometimes we even need to negotiate delivery times with our clients, which we can afford since we have relationships based on mutual trust. Our policy is to immediately return to the supplier any product that arrives in an unsatisfactory state.
Q: What is LG Distribuciones’ participation in the health sector?
A: We have several partners in the health sector. One is Heisecke, which produces rapid-testing devices, such as pregnancy tests. Although foodstuffs are 70 percent of our business, safe products and good testing material is essential for public health in this sector. We also work with regional milk producers and distillers. Our strength is not necessarily hospitals, because there is a high level of competition there and some distributors offer better prices in this niche. Having said that, we do want to strengthen our collaboration with the Ministry of Health of Quintana Roo. We also want to start working with IMSS and ISSSTE and are analyzing if we can meet their fast-delivery requirements.
Q: What would be your three main goals for 2019?
A: Right now, we do not have a strong sales force. With only three sales agents and over 250 clients, we are constantly working to catch up with our backlog. Our growth has truly surprised us, after having tripled our client portfolio in six years. We will continue working to be considered the first option among clients and suppliers. In terms of territorial expansion, we want to cover the whole southeast part of the country in five to six years. It is worth mentioning that our growth has only been possible thanks to the immense support of our partner suppliers. They have helped us with lines of credit, consistent schedules of delivery and general trust in our ability to do our job.
E-COMMERCE STRATEGY OPENS DOOR TO NATIONAL, INTERNATIONAL MARKETS
RODOLFO CAMARGO Director General of El Crisol
Q: How has El Crisol’s modernization and restructuration process advanced since 2018?
A: We opened three new offices in Guadalajara, Torreon and Merida. We have also been preparing to start exporting to the Caribbean and Central and South America. In terms of new projects, we are in the preliminary stage of developing a new distribution center. We have already bought the land and we expect it to be the largest investment the company has made. The distribution center will occupy 2ha and we are already analyzing the needed investment in technology and the logistics processes we will need to implement to serve the domestic and the export markets.
We have transformed our logistics operations completely and increased the amount of direct shipping we handle. We are also building an e-commerce platform to strengthen our domestic and export operations, which we expect to be ready by 2020. The platform will allow clients to analyze inventory levels and order online. For international clients, it will help to see purchases in US dollars and check product availability.
Regarding our offering, we launched a new product catalogue with around 1,000 new products in February 2019. We have organized an intense marketing campaign to position El Crisol as a supplier for laboratories in the pharmaceutical, petrochemical, mining and educational sectors, to name a few. Throughout 2019, we expect to continue positioning the brand as the leader in lab equipment in Mexico. The year will be challenging due to new NOMs being implemented but El Crisol has confidence in the industry and will continue investing in Mexico.
Q: What trends will impact the medical devices sector in the coming years?
A: Though nanotechnology has been used in medical devices for some years now, I believe the industry will continue advancing in this direction. Making devices smaller and easier to manage and operate is a must. However, there will also be a move toward making medical devices environmentally sustainable. This is part of the social and environmental responsibility that new generations are
pushing and as businesses, we have to understand it as an investment and research opportunity.
Q: How is El Crisol including sustainability in its products?
A: Our last-generation products use state-of-the-art technology that considers environmental sustainability. For instance, our ultra-freezers have the best energy efficiency in the market. They can go as low as -86°C and use gases that are completely innocuous to the environment. These types of freezers are used to store mother cells or umbilical cords, which means that once the sample is there, the equipment must stay on at all times.
We also have a strong focus on durability, so even though we cannot provide the most economical products, we do provide those with the highest quality. This is a key part in sustainability as well, since nonworking equipment becomes just more waste. The equipment manufacturers we work with are also using recyclable packaging solutions for their products and we are following their example.
Q: What potential clients would you like to attract?
A: Our client profile depends heavily on where our new commercial branches will be located. In Guadalajara, we focus on pharmaceutical companies, veterinary companies, the food and beverages industry and also the automotive industry. The Torreon office will focus on the mining and metal-mechanics industries, food and beverages and also water treatment facilities. In Merida, we believe the food and beverages industry, as well as water treatment facilities, will offer a significant opportunity. The research arena is also an interesting market, since many research facilities, such as the Scientific Research Center of Yucatan (CICY), CINVESTAV and UNAM’s research centers, are located in the area. Teaching activities will also be a strong commercial focus for all our branches.
El Crisol is a Mexican company with 57 years of experience in the commercialization and distribution of laboratory equipment for different industries. It has offices in Mexico City, Puebla, Queretaro, San Luis Potosi and Monterrey, among others
COLD CHAIN A GROWING PRIORITY FOR LIFE SCIENCES
EDUARDO TAPIA Director of Life Science and Healthcare at DHL
Q: How does DHL improve its clients’ supply chains in the life sciences sector?
A: DHL invests in the generation of solutions specific to our client’s needs. The company analyzes its clients’ supply chains to identify areas that can be improved in terms of efficiency or service. Our goal is to find ways to add value to their supply chain and to work together with clients to develop better strategies to deliver the medication or medical device to the patient. For instance, some clients in Mexico have asked us for strategies to reach their diabetic patients faster. In these cases, we are improving and developing e-commerce platforms that allow us to deliver the medication as soon as the diabetic patient needs it.
DHL Supply Chain Mexico has 100,000m 2 exclusively adapted for pharmaceutical products and medical devices. The company has over 20 years of experience in this sector, through which it gained significant knowledge in the pharmaceutical, medical devices, diagnostics and animal health. Mexico is the seventh-largest market for DHL Supply Chain’s pharmaceutical division. We have over 60,000m 2 with controlled temperature, which is essential for the pharmaceutical sector. We ensure that these rooms adhere to the highest standards of quality thanks to the almost 1,000 employees that specialize in the life sciences area.
Q: What investments has DHL Supply Chain made to continue improving its services for the life sciences sector?
A: In 2018, we developed areas in our warehouses to wash surgical instruments. These areas, which are located in warehouses close to hospitals, receive medical devices and washing them so doctors can use them right away. Our objective is to help clients take advantage of the infrastructure capabilities of a logistics operator to bring products closer to customers.
DHL is an integrated logistics company founded in 1969 in San Francisco. In 2002 it became part of the Deutsche Post Group. It offers logistic solutions for the life sciences and healthcare sector through transportation, products and solutions services
Q: How is DHL supporting Mexican hospitals to manage their own logistics?
A: DHL provides logistics services to a major hospital in Mexico. In this case, we receive, administer and redistribute the products from many medical device suppliers, improving the hospital’s inventory processes. We are seeing an increasing number of hospitals willing to partner with logistics operators to take advantage of the latter’s platforms, systems, infrastructure and experience.
Q: How does DHL offer added value to manufacturers of biotechnological products and APIs?
A: The market for biotechnological products has grown significantly in Mexico and all these players look for logistics companies that offer solid controlled-temperature solutions. These clients know that DHL already has experience in the management of these products. We provide clients with the entire solution and equipment they need to safely transport the product to the patient.
Q: What are the three main goals for the life sciences division and your growth expectations for the coming year?
A: We will continue growing alongside our clients. We are already strong in the sector but we want to strengthen our medical devices division and create more alliances with local manufacturers. In the past couple years, we have focused on animal health, for which we now have solid operations.
During 2018, we increased our investment in the life sciences sector by 70 percent, especially to strengthen our cold-chain capabilities. We will continue investing in infrastructure and training and continue improving our processes for the proper handling of medications. We will also invest in the development of platforms to allow us to have a greater amount of real-time information with which to make decisions. We are investing heavily in IoT principles, which will allow us to provide more information to clients on the status of their products on the road. We can also provide them with a comprehensive analysis of their logistics and commercial strategy. This information will allow clients to make better-informed decisions.
URGENCY A MUST IN HEALTH LOGISTICS
ERIC DELGADO Director General of Grupo Sicamsa
Q: Grupo Sicamsa is 100 percent focused on pharmaceutical logistics. How does this approach benefit your clients?
A: Grupo Sicamsa’s approach to health logistics is to handle deliveries based on the time and day the customer needs it and not according to our own handling times. The health sector requires available logistics services at any time and day because people’s health cannot wait. Grupo Sicamsa works seven days a week, 365 days a year and it can reach any destination, from state capitals to secondary cities and municipalities. When Grupo Sicamsa works with a client, it offers an integral solution that leads to companies growing their reach and business volume thanks to our availability and capabilities. As a result, some of our clients have grown in secondary and tertiary cities just as much as in primary cities.
The company works with the 30 percent of the market that large companies neglect. In the public sector, Grupo Sicamsa is bidding on a tender for epidemiological logistics for IMSS and on another with the National Blood Transfusion Center that has been our client for over five years. In the private sector, Grupo Sicamsa handles 80 percent of Laboratorio Médico Polanco’s requests. Its other clients include Laboratorios Médica Sur, Laboratorios Ruiz, Hospital Ángeles and Hospital Universitario.
Grupo Sicamsa recognized that companies and government dependencies were unsatisfied with the service offered by our competitors due to long delivery times, bureaucratic processes and inconsistent traceability of their packages. To counter this, we offer a simple, tailor-made, transparent and traceable process. If something happens and Grupo Sicamsa cannot deliver in the expected time, it communicates with the client and looks for the best way to deliver the package as soon as possible. The entire process is transparent for the client. Also, Sicamsa’s philosophy is to consider all its deliveries as if they were subject to a life-or-death outcome.
Q: What infrastructure strategy at Mexico City’s International Airport could help boost the logistics sector in Mexico?
A: One of the main issues is that individuals are treated like clients and not like passengers. Other airports around the world have a limited number of duty-free shops and
restaurants and instead focus on the airport infrastructure. The Mexico City International Airport (AICM) is built to sell things to people. There was a project a couple of years ago that aimed to solve this problem but it was not completed. The idea was to remove the hangar area in front of Terminal 1 to extend track 5 500m to the right, which would allow the airport to have simultaneous clearings and landings. This expansion could double the airport’s capacity and make it comply with international standards. It would also help to provide 24/7 transportation services for people who need to move from one terminal to the other. Increasing AICM’s operating hours to fulfill a 24/7 service would mean that airlines would not have to not pay for service extensions and consequently improve flight prices for passengers.
Q: How could the government establish fair competition that allows small and medium-sized logistics operators to boost their market share?
A: The conditions established by government dependencies should promote fair competition among all companies within the logistics ecosystem. However, there are many cases of unfair competition that are neither monitored nor punished. It would be good, in addition to López Obrador fighting corruption, to also focus on providing fair and transparent conditions for all companies. International logistic operators have many incentives and monopolize the market with small and medium operators having no chance to compete. In other countries like the US, national logistics operators have priority over their international counterparts to ensure the country is protected against bioterrorism. The government could make big companies develop their own airlines and small and medium operators could occupy the space that this would open with third-party carriers. At the same time, airlines should be more open and flexible to distributing their cargo services and avoid giving over 90 percent of their space to international companies.
Grupo Sicamsa is a logistics company specialized in complementing its clients’ supply chain and ensuring the correct collection, distribution and delivery of products at a national and international scale
EMERGING TECHNOLOGY WILL TRANSFORM INDUSTRY
KARL MCDERMOTT
Global Head of Business Development
at Morpheus.Network
Q: As a developer of a supply chain platform based on blockchain tech, how would you describe the disruptive nature of this technology?
A: Blockchain has the same transformative power the internet had in the early 1990s. Just like our lives changed thanks to the internet, processes will be revolutionized through automation and blockchain implementations. This technology offers a unique way of connecting and storing data, so people can trust it is not hackable and it can be used to connect businesses. It is important to note, however, that the idea of a universal registry of information for business is actually referred to as distributed ledger technology (DLT). Blockchain refers more to crypto science and dealing with investments, while DLT seeks to apply a similar methodology to improve corporate processes.
Q: What opportunities can be found in supply chain optimization?
A: The pharma industry faces the challenge of rapidly growing operations. Although the general industry is growing at a 6 percent rate, cold chain operations are increasing at a 12 percent rate. In this sector, we are trying to implement a safe and secure supply chain that ensures products are transported from the manufacturer’s facilities to the end customer, be it a hospital or a pharmacy, by a 3PL or transportation company that measures and controls temperature at all stages of the process.
Q: How would you rate Mexico’s position as a logistics hub?
A: From a global perspective, the way Mexico interacts in a global supply chain is not so different from what happens in other countries like Russia, Canada, the US or Argentina. The biggest area of opportunity to improve logistics processes in Mexico is to focus on activities where there is human intervention. Since there is a huge talent pool in the country, at times there are too many hands on the same
Morpheus.Network is a global developer of a full-service supply chain platform based on blockchain technology and an integrated cryptocurrency payment system. The company has partnerships with leading software developers and global carriers
bowl. Technology allows the improvement of processes, not by displacing people but by empowering them to create an added value.
Q: How has your partnership with Cubic strengthened your operations and what other alliances have you established to boost your position in the market?
A: Cubic follows a warehousing-as-a-service business model. The company is employing underutilized space at company warehouses and selling it to third parties that need to grow their operations. Especially in Mexico City, there is a need for warehousing space because no new facilities are being built. Cubic took advantage of this need to build a solution that could help both clients and those companies with extra space at their facilities. Aside from Cubic, we have several global partnerships and collaborations to promote business transformation through DLT implementations. We are connected with 1,600 banks through the SWIFT network and we have alliances with 100 carriers. We are members of the Trusted IoT Alliance along with companies like Bosch and Cisco and we participate in the Blockchain in Transport Alliance and in the Enterprise Ethereum Alliance. All three of these alliances are international forums where innovative companies try to set fixed standards regarding new technologies that other companies can adopt.
Q: What are your growth expectations for Morpheus. Network and what role will Mexico play in your development strategy?
A: In 2018, we globally focused on developing experience in sectors such as automotive, pharma and the food chain. For 2019, we are looking at strengthening our offering for exports and industries like oil and gas. The first six months of the year will be dedicated to building our platform, while the following will focus on creating a revenue-generating model by testing our solution and building a commercial strategy. We are also working on a beta program called Morpheus.Ambassadors where early DLT adopters can register to become official promoters of our solutions. We have partners in Mexico, Argentina, Russia, Holland, Australia and even Nigeria.
TAILOR-MADE LOGISTICS FOR THE PHARMACEUTICAL INDUSTRY AT A COMPETITIVE COST
FRANCISCO CRUZ
Director of Hubble Logistics México
The complex pharmaceutical supply chain can be a challenge for inexperienced logistics operators, which in turn can lead to higher operational costs, says Francisco Cruz, Director of Hubble Logistics México, which banks on its historical ties to give it an advantage. “Providing services tailored to the demands of the pharmaceutical industry is not easy, laboratories battle to find 3PLs that will follow the sector’s standards to the letter at a competitive cost,” he says. “Hubble Logistics was built on the foundations of an older family company from which we gained significant experience and strategic alliances.”
Hubble Logistics, launched in 2014, is a Mexican logistics operator specializing in the pharmaceutical industry. Cruz says success in the sector is determined by quality of delivery. “For a retail company distribution is key, especially for the pharmaceutical industry where some products demand specific conditions in order to preserve their properties during distribution.” He adds that Hubble Logistics’ function is to become an extension of the laboratory for the proper management and conservation of inputs in both operational and normative aspects.
Compliance with existing regulations is another key to success, including NOM-059, which dictates the set of measures that must be adopted in a systematic manner, in order to guarantee that medicines have the quality required for the use to which they are intended. “Our fleet incorporates temperature monitoring systems to demonstrate that the cold chain is being maintained throughout the trip,” Cruz says.
Hubble Logistics initially provided services for Grupo Neolpharma but now works with many other laboratories, including Grupo Valeant, Bausch Health México, Laboratorios Andrómaco and Medix. It transports both raw materials and finished products to pharmaceutical companies, hospitals, pharmacies, medical representatives and distribution centers. The company delivers mainly in central and south east Mexico but has the capacity to work across the country. However, farther destinations are becoming more expensive due to the increase in tolls and fuel prices. “Our operational
costs are not only hit by inflation but also constant increases in fuel prices, rising tolls, maintenance and insurance policies. Contracts and fares with clients are negotiated on a year basis and any unexpected operational expense such as fuel surcharge has to be absorbed by the operator.” As a logistics company based in Mexico City, traffic jams are another significant issue. “Traffic jams in large cities put pressure on the transport system, generating logistic problems for those working within these urban centers.”
Cruz explains that the transportation industry in Mexico faces big challenges such as insecurity, high taxes, transport fleet renovation and high fuel prices. “I believe the sector could use some governmental incentives for small and medium companies. Tax breaks could work as an escape valve, since many expenses that are essential for the operation add in costs and are nontax deductible; this could also impact on employment generation.” To address this matter, Hubble Logistics is an associate of the Consejo Nacional de Ejecutivos en Logística y Cadena de Suministro (ConaLog), a nonprofit organization seeking to boost integration, development and competitiveness within the logistic community in Mexico.
Insecurity in Mexico is a particular threat that the company takes seriously, employing security elements during transportation and maintaining good communications with the police. “Our fleet is equipped with several security mechanisms and we also train our staff in safety protocols which allow them to react properly against danger situations. We are also allied with local and federal police to monitor the status of the vehicles in case a situation presents itself.”
Since its launch, Hubble Logistics has done well in Mexico’s pharmaceutical market. It grew by 35 percent in 2018 in terms of volume of deliveries and expects 30 percent growth in 2019 due to market opportunities. “Mexico produces around 2 billion units of medicine per year; 10 percent of these medications expire in the same year of distribution due to displacement problems in the national territory,” Cruz says.
PUBLIC SECTOR A GREENFIELD FOR LOGISTICS SERVICES
ALESIO BERECIARTU
Commercial Director of the Healthcare Business Unit Latin America at OCASA
The size and complexity of the Mexican public health system offers a significant opportunity for technology and know-how transfer from players in the private sector, says Alesio Bereciartu, Commercial Director of the Healthcare Business Unit Latin America at OCASA. “The Mexican public health sector is in need of better logistics services and could greatly benefit from the transfer of technology, quality and know-how coming from the private to the public sector.”
OCASA, an Argentinian company with more than 35 years of experience in the market and presence in the US, Europe, India and Latin America, provides solutions for e-commerce and general logistics, but has developed significant expertise in the health segment. “We understand the particular logistics needs of the health industry. We have the speed that the pharmaceutical industry requires, as well as the needed expertise to support clinical research and other types of activities.”
OCASA’s expertise translates to the three business lines in which the company has ventured within the health sector. One is the collection of biological samples for clinical trials in Latin American countries to be shipped to central labs, mostly in the US. “We have developed an operational structure for sample collection from several Latin American countries that are mostly used for clinical trials. Almost 80 percent of the samples collected go to the US and the rest are sent to cities like Mexico City or Buenos Aires,” says Bereciartu.
Another business niche in which OCASA participates is logistics for hospitals and clinics, although Bereciartu says that in Mexico, the company is still growing its participation to what it has in other countries. “It is hard to make a comparison with other countries, since we have different commercial strategies, according to the particular conditions of each country. We have a stronger presence in this business niche in Argentina than in Mexico. However, this does not mean that our operations in Mexico are less important.” Bereciartu says OCASA’s offering is complemented by its third business line, which focuses on warehousing and distribution services for medical devices companies.
For Bereciartu, OCASA’s success lies not only in its expertise but also in its human capital. “Most of our personnel comes from the pharmaceutical industry and we train all our collaborators in the same processes and standards as any other player in the pharma industry. We have implemented all the procedures and protocols needed and have standardized all our services and processes in all regions where we are present.” Thanks to this approach, the company has succeeded when competing for critical logistics tasks against other logistics providers in the health sector. “Many important laboratories trust their high-volume samples to larger companies but depend on us to manage clinical research samples that require more detailed attention,” he says.
While expertise is one of OCASA’s success drivers, Bereciartu says technology also plays a key role when ensuring that every client requirement is met on time and effectively. “We have a control center that keeps tabs on all our vehicles and units and that can detect any anomaly or delay in the delivery of the products.” Its automated online platform also allows OCASA to manage all information regarding shipments and cargo with low margins of errors, says Bereciartu. “We have to constantly adapt and update our system to make it more precise and more robust. It is what the market demands.”
Although Mexico has been receptive to OCASA’s commercial offering, Bereciartu says the country has a series of complexities and particularities that have made the company’s tasks challenging at times. “Infrastructure and security are important topics for us. In many regions where there are neither resources nor infrastructure, it is a big challenge to have an operation that flows easily. Sometimes, it is also hard to find people available to perform lastmile deliveries in these places,” he says. When it comes to regulatory conditions, Bereciartu says the country’s public institutions tend to be bureaucratic because of their size. Still, Mexico offers significant opportunity areas for a company like OCASA. “The country has a growing population, along with a developed hospital infrastructure. Moreover, its health system allows the participation of thirdparty players for certain tasks,” he says.
MINIMIZING RISK THROUGH PROPER DEVICE ACQUISITION, SELECTION
ILDEFONSO VÁZQUEZ President of IVG Group
Companies in the life sciences industry, such as pharmaceuticals, clinical laboratories and others, are faced with the task of choosing the most appropriate medical devices to ensure high-quality patient care, efficiency in research and development processes and overall scientific and technological competitiveness. “Choosing the wrong device can generate economic losses, but the most serious thing is that it can impact the final consumer: the patient,” says Ildefonso Vázquez, President of Grupo IVG.
When customized solutions are developed, it is possible to satisfy the needs of different types of companies and more importantly, minimize and eliminate the risk associated with the management of medical devices. “Customers not only choose equipment because of the brand but because of the applications and solutions they can cover with that solution,” says Vazquez.
IVG Group offers its clients complementary services to get to know laboratory and analysis equipment before buying it. “Although the equipment is not tailor-made, our comprehensive services allow the equipment to be adapted to meet the client’s needs,” says Vázquez. Customizing a product to the needs of a certain group can take mass production to another level and even lower the per-unit cost for the customer, according to a Report on Mass
Customization by Cleverism. To meet these expectations, IVG Group focuses on two primary strategies: purchasing advice and support from the different companies in the group. “IVG Group has experts in the different areas in which we participate to provide support to clients in a specialized and effective manner,” says Vázquez. “The experience and services of the companies within the group contribute to the solutions we provide to each of our customers.”
For example, if a pharmaceutical company is looking for laboratory equipment, one or more of the companies in IVG Group can participate in creating an added-value solution. “In these cases, IVG Comercializadora is in charge of finding the right device, while DEBBIOM participates with its knowledge in biochemistry and bioavailability in the national market,” says Vázquez. IVG Group also advises the customer when purchasing any product. “Besides letting customers test the devices before buying them, IVG Group is responsible for training the company’s staff in the proper use of the equipment and reagents and provides continuous aftersales support,” he says. “In the end, our group not only sells equipment and offers services, but it assists companies in the selection and acquisition of appropriate devices for specific procedures. It also aids these companies throughout the frequently troublesome process of getting used to actually operating the equipment.”
Liomont blister machine
INMEGEN, Mexico City
TALENT & BUSINESS DEVELOPMENT
Among the many challenges the healthcare sector faces, there is a growing need for trained professionals. Most health professionals are found in the country’s most-developed states, including Mexico City, Jalisco and Nuevo Leon, while lessdeveloped states face staff shortages to cover patients’ demands. Properly training talent requires combined efforts from multiple fronts, including universities, the government, recruiters and the industry. All participants must identify exactly where the gaps are and what programs are best suited to generate the needed skills for a specific region.
This chapter provides an overview of the talent deficit in terms of both skills and numbers faced by the healthcare sector and how industry entities are working to address this issue. Universities, institutions and education-related companies also share their perspective on the glaring deficits in healthcare education plans and what mechanisms that could help to improve the sector’s talent development.
CHAPTER 10: TALENT & BUSINESS DEVELOPMENT
216 VIEW FROM THE TOP: German Fajardo, UNAM
217 VIEW FROM THE TOP: José Mustre De León, CINVESTAV
218 TECHNOLOGY SPOTLIGHT: Dräger: Lung Protection and Ventilation Strategy
220 VIEW FROM THE TOP: Eduardo García Luna, UDEM
221 INSIGHT: Tomás Barrientos, Anáhuac University
222 VIEW FROM THE TOP: Miguel Ángel Celis, INNN
223 VIEW FROM THE TOP: Abelardo Meneses, INCan
224 PROJECT SPOTLIGHT: Centro Médico Puerta de Hierro: an Enduring Alliance
226 VIEW FROM THE TOP: Herbert Bravo, SOMIB
227 VIEW FROM THE TOP: Luis Alonso Herrera, INMEGEN
228 INSIGHT: Gregorio Quintero, SMEO
229 INSIGHT: Pedro Gutiérrez-Fajardo, ANCAM
230 INSIGHT: Gabriel Alvarado, KRONOS
231 VIEW FROM THE TOP: Pedro Vera, Intersistemas
232 VIEW FROM THE TOP: Fausto Hernández, VALID
233 INSIGHT: Guillermo Bilbao, PA Consulting Mexico
235 ROUNDTABLE: How are You Contributing to Addressing the Need for Doctors and Specialists?
CLOSE COLLABORATION FOR IMPROVED HEALTHCARE ACCESS
GERMAN FAJARDO Director of the UNAM School of Health Sciences
Q: What kind of health professional does UNAM’s School of Health Sciences aim to graduate?
A: UNAM seeks to graduate students who can become good general physicians and who can enter a graduate program or focus on a specialty in the near future. However, due to the diversity of majors the school offers, there is no unique profile of graduates. For example, professionals graduated from the Basic Biomedical Research program will most likely dedicate their life to research and will move toward graduate studies. Meanwhile, someone majoring in Forensic Sciences will be more likely to contribute to Mexico’s public safety. Also, UNAM offers a Plan of Combined Studies in Medicine, Bachelor’s and Doctorate (PECEM), which allows students to complete their undergraduate studies in six years and start with a Ph.D. in their second year. PECEM allows students to complete their major and a doctorate in medicine in 10 years.
Q: Former Minister of Health Armando Ahued says the lack of specialists in Mexico is an ongoing problem. How are universities addressing this issue?
A: Rather than a lack of specialists, I think doctors are badly distributed. On average, there are two to three doctors per 1,000 inhabitants. However, in cases like Mexico City, the concentration of doctors can be three times higher than in other regions.
This disparity should be addressed not only by universities but also through the National Health System. Around 8,000 doctors graduate from a specialty in Mexico every year but the available university placements are determined based on the vacancies in hospitals instead of the actual needs of the national population. Ideally, the government should have a way of organizing the country’s local and national health needs to have a clear idea of how many doctors and specialists are required by state, which would make it easier to distribute them.
The National Autonomous University of Mexico (UNAM) is the largest and most important public university in Mexico and Latin America. The Health Sciences School offers programs in areas such as forensic sciences and physiotherapy
Q: What is the best strategy for an academic-industrial alliance to ensure proper talent training to meet the challenges of a growing and rapidly changing health landscape?
A: A continuous, solid collaboration between industry and academia is necessary to ensure both sides are aware of how many doctors the country requires, what type of specialists and where they should be posted. Universities should have closer communication with the Ministry of Labor and Social Security (STPS), the Ministry of Health and the key industry players that participate in developing Mexico’s human capital. At the moment, the School of Health Sciences prioritizes its alliances with health sector authorities, rather than with the industry. Our goal is to change that in the short to medium term to provide students with better employment opportunities in their fields.
Q: How can UNAM collaborate in promoting a preventive health model?
A: Each federal administration modifies the National Health Plan every six years and always emphasizes primary care. The main problem with most approaches is that they try to implement a health model mostly focused on the center of the country. Instead, there should be proper incentives, training and benefits for all health professionals across the country. People also must get used to going to the doctor for prevention and check-ups and not only for healing and treatment. This requires an effort from all players in the sector to change the paradigms of medical attention and lifestyle.
Q: What are UNAM’s Health of Science Faculty’s main achievements?
A: Our most recent achievement was the approval of a new major in nutrition by the faculty’s technical council. The faculty believes this program will be key to counter the high level of obesity in Mexico through its focus on research and public policy. The faculty will also receive a new PET/CT machine in May 2019, which will be the most modern in the country and will be available to the entire Mexican population. In the coming months, the faculty will also open a unit for electron microscopy, with three state-of-the-art microscopes available to anyone who requires it, both at the university and in the country.
BASIC RESEARCH A PILLAR FOR HEALTHCARE
JOSÉ MUSTRE DE LEÓN Director General of CINVESTAV
Q: How can greater investment in research change the local healthcare sector?
A: Basic research is essential for the development of many economic sectors but it is often discounted because its effects are not seen immediately. However, delaying investment in basic research will lead us to fall behind other economies and might worsen current healthcare problems or create new ones. CINVESTAV has tried to maintain a constant investment flow in research and even to compensate for the lost resources that were once given to us by the federal government. We do not want any of our research projects to stop.
Q: How is CINVESTAV directly contributing to the improvement of healthcare in Mexico?
A: We have two key projects. The first has a strong social impact in that it focuses on the development of a vaccine for Chagas disease, which is not a priority for developed economies. This project has received an annual stipend from the Carlos Slim Foundation of MX$10 million (US$52,604) for the past four years, which the company just renewed for the coming four years. We are close to clinical trials and continuing this project is essential for the population.
The second project focuses on several analgesic properties of stem cells. In March 2019, we signed an agreement with a South Korean company to commercialize these cells and cell growth factors in the Asian country for analgesic and dermatological purposes.
Q: How has CINVESTAV’s relationship with pharmaceutical companies evolved?
A: We need a strong collaboration with other players to ensure researchers have direct contact with the immediate medical needs of the population. CINVESTAV achieves this through several associations with public and private hospitals, which we aim to reinforce. Many of our graduates are already working in the healthcare sector and in hospitals within the Ministry of Health’s network. Alliances with pharmaceutical companies are extremely important for the center. For instance, we are
working with Neolpharma in the development of two new medications. However, our relationship with these players could be stronger.
Q: How can public research help alleviate Mexico’s epidemiological burden?
A: A research group at CINVESTAV’s Genomics Center in Irapuato is studying genomic traits in ancestry to identify genetic markers that make Mexicans prone to certain diseases. Mexicans have a mixture of South European and indigenous ancestry, so treatments developed for other populations may affect Mexicans differently. This research group has the largest genomic database of indigenous American population, from Canada to Argentina, in the world. Due to the size of this project, federal funding was insufficient so it is also being funded by England and the EU.
Q: What is the status of CINVESTAV’s Center for Aging Research?
A: In 2018, we finalized the construction of the center and we are now working to obtain all necessary certifications. The center has allied with several international institutes, including the University of Barcelona and the Max Planck Institute for Biology of Aging. However, the Center for Aging Research is being financed by a joint fund between Mexico City and CONACYT and the latter is reconsidering several projects that it had supported in previous years, so we are uncertain whether they will continue to fund the center.
Our goal for 2019 is to finish the Center for Aging Research’s certification processes, to focus on the commercial aspects of the stem cell project and to lead our research projects into the creation of commercial solutions.
The Center for Research and Advanced Studies (CINVESTAV) is a Mexican public institution dedicated to the development of science, technology and education at the graduate level. Up to 30 percent of CINVESTAV’s research is in the healthcare sector
DRÄGER: LUNG PROTECTION AND VENTILATION STRATEGY
Dräger has released v.1.12 of the PulmoVista 500® TIE (electrical impedance tomography) software with which it incorporates new lung viewing options that facilitate ventilation and lung protection. With PulmoVista 500®, health professionals can visualize regional distribution of air in the lungs non-invasively, in real time and from the head.
Among its benefits, PulmoVista 500® offers complete visualization of the ventilation cycle in real time. It allows users to observe the cycle continuously and directly in various lung regions, which facilitates the development of personalized treatment. The system can also achieve a ventilation strategy that provides lung protection, optimal adjustments of PEEP and tidal volume.
PulmoVista 500® allows an evaluation of the regional ventilation distribution and the changes that occur in the lung volumes at the end of expiration. The user can see the effects of therapeutic maneuvers and monitor results over time. With this information, health professionals can determine the best possible distribution of air in the lungs and remain informed about the effects that certain disorders, such as atelectasis, hyperdistention, air trapping, pleural effusion or ventilation, may have on breathing.
Users of PulmoVista 500® can monitor lung function for up to 24 hours straight, directly at the patient’s bedside. To do this, a flexible silicone belt with 16 electrodes around the patient’s chest is easily placed and connected to the system to avoid invasive or stressful maneuvers, ionizing radiation or having to transfer the patient to another specialized room.
PulmoVista 500® allows lung function monitoring for 24 hours straight
PulmoVista 500® also generates regional and global impedance parameters and curves in real time. It provides a view of the trends of ventilation distribution and changes in lung volumes at the end of expiration, which allows the user to compare the current state of the lungs with historical data. Its Diagnostic view facilitates a practical analysis of the distribution of ventilation, changes in regional distensibility (CW, CL) and delays in regional ventilation (RVD), so it is especially useful when evaluating therapeutic interventions, such as PEEP tests.
COLLABORATION WILL ELUCIDATE THE FUTURE OF HEALTH
EDUARDO GARCÍA LUNA Vice Chancellor of Health Sciences at UDEM
Q: What is the mission of UDEM’s health program?
A: We offer a wide range of health-related programs, including medicine, odontology, nutrition, psychology and nursing. Our vision is to graduate professionals who can adapt to continuous change in their field. UDEM graduates should be up to date with every development and be able to learn and unlearn things. At the same time, they should gain the skills to treat patients in a professional and respectful manner. These values are applicable to every single discipline in this field.
Q: How is UDEM adapting to Mexico’s changing demographics?
A: We offer specializations focused on elderly people, like geriatric medicine and gerontological psychology. We also adapt to current developments by updating our programs. Demographic changes and environmental factors have had a significant impact on the current state of health. Some illnesses have become much more common and we may start seeing completely new ones in the future. Illnesses related to diet, environmental contamination and chronic stress are characteristic of these times. We have yet to develop all the tools to confront these challenges because understanding what causes these ailments is not just a question of biology; causes are cultural, social and economic too. This also applies to how each person experiences their sickness. How do they deal with it emotionally and where do they find support? In this context, an individual’s social situation is very relevant.
Q: How do you intend to tackle the increasing complexity of diseases?
A: It is important to take a multidisciplinary view that brings together different fields. This is reflected in the wide range of programs we offer at our university.
The University of Monterrey (UDEM) is a private educational institution accredited by the Southern Association of Colleges and Schools Commission on Colleges. It participated in the creation of the health startup incubator Polaris HealthTech Center
Using the knowledge and tools from each field allows us to attack a problem from many different sides. Personalized medicine provides a good example of how a multidisciplinary approach can be used. We factor in many aspects of an individual’s life and determine the potentials risks when making a diagnosis.
In the field of pharmacology, there is a shift toward creating medications and treatments that are more specified to the individual and their particular health profile. This is aided by our increasing knowledge regarding genetics and how that is enriching our ability to predict health risks.
Q: What alliances do you have with other institutions to confront future health challenges?
A: We have strong links with both the public and private sector. Our relationships range from educational programs to internships for our students. A major highlight of this collaboration is Polaris HealthTech Center. We founded this together with Sistema de Salud Christus Muguerza and the technology entity Skye Group with the aim of creating a growing space for health startups. This project is part of the goal to make Nuevo Leon a hub for health tech.
This center can offer support in many different ways, not just bringing together expertise but also with elements such as financing and logistical support. Our goal is to confront major issues that affect large portions of the population. We believe a strong focus on technology is the only way we can prepare for the challenges of the future.
Q: How do you foresee your health programs evolving?
A: We need to be continuously evolving, visualizing what health could look like in the future. Who knows what hospitals will look like in the future? Will they be bigger or smaller? Evolution means taking a wider picture of health that includes education and prevention, while we continue to build networks between institutions and professionals. The more parties involved, both nationally and globally, the more we can achieve.
PYMESAS, THE LINK BETWEEN ACADEMIA AND BUSINESS OPPORTUNITIES
TOMÁS BARRIENTOS
Director
of
the School of Health Sciences at Anáhuac University
Smaller companies could hold the key to universal healthcare access, says Tomás Barrientos, Director of the Faculty of Health Sciences at Anáhuac University, which is developing a project to address the issue. “We want SMEs to act as providers of services that are indispensable to the National Health System and at the same time help society to implement a new concept of health services to combat some of the flaws in the system,” he says.
The program, in cooperation with the Direction and Administration of Health Institutions (DAIS), seeks to develop Small and Medium-sized Associated Health Companies (PYMESAS) that also contribute to improving the employability of the faculty’s students. “Anahuac University wants to maximize our students’ employment opportunities through the Anáhuac University Health System (SUSA) and PYMESAS,” says Barrientos. The project is supported by the university’s business incubator in collaboration with the Anáhuac Business Development Institute (IDEA) and its business accelerator IDEARSE-Anáhuac.
The ecosystem to support the development of healthoriented SMEs, according to Barrientos’ book David and Goliath, is the SUSA. In the book’s biblical metaphor, David represents Anáhuac University’s efforts to bring health closer to the population and Goliath represents the obstacles facing the health system in Mexico.
Barrientos explains that “SUSA aims to link the faculty with business institutions in the field of health — national and international, public and private — as a strategy to promote opportunities for graduates to put their knowledge into practice, generate employment sources and give back to society.” He continues: “SUSA wants to strengthen the weakness of the health system with good people and SMEs.”
Each year, 350-400 students graduate from the Faculty of Health Sciences at Anáhuac University, which is among the Top 3 universities in Mexico, according to the QS World University Rankings 2019.
The opportunities that Anáhuac University has recognized based on studies and analyses of SMEs in the health sciences are diverse. “These include 19 academic areas but we found that primary care, nutrition, dentistry, physical therapy and nursing occupy the top places,” says Barrientos. The university plans to use PYMESAS to develop projects with business models that contribute holistically to the health needs of the population.
According to CONDUSEF, SMEs generate 72 percent of employment and 52 percent of Mexico’s GDP. Innovative SMEs can contribute in those areas where the government and large companies have come up short. “SMEs can fill the social gap and encourage the creation of new associations that introduce technologies and assistance services to the field of healthcare in the areas of Primary Health Care (PHC) and Advanced Health Care (AAS),” Barrientos says.
However, the goal is not only to increase universal access to services but also to create a network of companies that contribute to Anáhuac University’s health mission. “The project envisions that the specialized PYMESAS created through the incubator and accelerator have a permanent link with the SUSA to provide advice and supervision of business plans and operations,” says Barrientos.
The university also has implemented a strategic plan to achieve its health access targets. In 2018, according to the Diagnostic Study of the Right to Health by CONEVAL, around 19.1 million people in Mexico do not have access to health services. INEGI’s 2015 survey revealed that most affiliates were concentrated in the Seguro Popular (a terminated entity) with 49.9 percent, followed by IMSS with 39.2 percent. The government has made universal access a priority.
“The strategic lines of the 2016-2020 strategy are based on seven main points that seek to strengthen the comprehensive education of the student, its integration with the Anáhuac community, strategic linkage with the productive and social sectors, internationalization and research with social impact to develop the student, as well as increase healthcare access,” says Barrientos.
GREATER ATTENTION NEEDED FOR MENTAL DISEASES IN ALL AGES
MIGUEL ÁNGEL CELIS Director of INNN
Q: What are the main neurological diseases affecting the Mexican population?
A: Mexico’s healthcare system faces the challenge of dealing with more complex diseases. The main neurological ailments affecting Mexicans are related to aging. Mexico’s population changed due to a smaller number of births and a growing survival rate. During the 1960s, life expectancy was 57 years. By 2016, life expectancy had grown to 75.2 years thanks to better sanitation and a decrease in child and maternal mortality.
Today, Mexico’s main mortality causes for adults over 60 years of age are related to cardiovascular diseases, which are heavily linked to strokes. For every three deaths from myocardial infarction, there is one from stroke. Aging also causes cognitive deterioration and may lead to mental diseases such as Alzheimer’s, a degenerative condition that will become increasingly common as the population ages. While not lethal, Alzheimer’s has significant repercussions for a patient’s and their family’s quality of life.
Epilepsy affects nearly 2 percent of the Mexican population. Its incidence and prevalence may be higher than in well developed countries due to endemic infections like neurocysticercosis, higher incidence of injuries related to motor vehicle accidents and birth, as well as lack of access to appropriate diagnosis and treatment. Epilepsy is also associated to physical and psychological comorbidities, affecting education and working abilities. Poor control of the disease can lead to premature deaths either by status epilepticus, unintentional injuries or suicide.
Meanwhile, the most common mental health disorder among young individuals is depression, which is the
The National Institute of Neurology and Neurosurgery
Manuel Velasco Suárez (INNN) is a national health institute managed by the Ministry of Health. It is located in Mexico City and provides care through innovation
most common disease worldwide and causes the highest number of work absences. Depression reduces productivity and leads people to withdraw from society. It also places a significant toll on families and society. Depression sometimes even leads to suicide.
Q: How is the institute contributing to the collective knowledge regarding mental diseases?
A: The institute actively researches the many factors influencing the aging process of the nervous system and the consequences of a slowdown in communication among neurons. We are studying the long-term effects of air, water and soil pollution in neural networks and premature cell death, also known as apoptosis. The institute also performs basic research and one of our main lines is autoimmune diseases, such as multiple sclerosis. When an infection occurs, the body generates antibodies to fight it and information on the pathogen is stored by the immunological system. However, the system can make mistakes and damage the host’s cells.
Multiple sclerosis is the most non-traumatic disabling disease affecting young adults. Moreover, we are seeing an increase in the prevalence of this disease. Pharmaceutical companies developed many treatments that control the disease, as there is no cure, but these medications are highly expensive and public health institutions are facing a challenge in affording them.
Q: Why should doctors choose the National Institute of Neurology and Neurosurgery Manuel Velasco Suárez to complete their specialization?
A: The best neurologists in Mexico are trained at this one-of-a-kind institute. Doctors want to complete their specialization here as the institute has a large number of patients. We receive many interested doctors from both public and private institutions in Mexico and abroad. About 25 percent of our residents come from Central and South America. Our goal is to compete with the best institutions in the US. Every year, 100 specialists in neurology, neurosurgery and psychiatry graduate from the institute.
RISK FACTOR DETECTION A SHARED RESPONSIBILITY
ABELARDO MENESES
Director
General
of INCan
Q: How has the National Cancer Registry project advanced and what are its next steps?
A: The National Cancer Registry was approved by all the necessary parties and became part of the general Health Law in 2017. So far, we have implemented this registry in seven cities, including Merida, Campeche, La Paz, Tijuana, Acapulco and Sonora. There are many factors that impact our decision on whether a city can be part of the registry. One is collaboration with the local government. We make it a priority to generate a link between the federal, state and municipal governments and the local Ministry of Health. Since the health system is fragmented, we have to look for ways to foster collaboration between all the involved institutions so there can be information exchange. The role of local health ministers is key as they are the ones who put us in touch with the directors of local IMSS, ISSSTE, army and private hospitals.
When a city is chosen to participate in the registry, it has to provide all the information related to every cancer case it has registered and there has to be a follow-up to every diagnosed case. Afterward, the information is compared with the information registered by INEGI regarding cancer mortality, so we can provide estimates regarding how many new cases are appearing and the mortality in each city.
We always choose cities, rather than states, and those cities must have the needed infrastructure for cancer treatment. When cities do not have this, patients are diagnosed locally but then leave to be treated in other places, so we lose their follow-up. That is why we include cities that have all the resources for patient management. Through constant follow-up, we can register the type of tumor, its localization and we try to establish risk factors related to is appearance. This helps us to understand whether cancer develops in the same way throughout country and its response to certain factors, customs, eating habits and lifestyles.
Q: What is the general cancer map in Mexico?
A: Cancer distribution remains more or less the same, with a prevalence of breast, prostate and colon cancer. In certain states there are some cancer types that are above average,
such as breast cancer in the north and cervix cancer in the south. Colon cancer, meanwhile, is surging across the country.
When analyzing the factors that could be behind this distribution, we see that the eating habits and lifestyle of people in the north are very similar to those in the US, while in the south we see there is less access to health services. Given these conditions, we have arrived at the conclusion that cervix cancer is more associated with poverty and limited access to healthcare. Colon cancer, on the other hand, is heavily linked to obesity and overweight. Around 71 percent of the population in Mexico is obese or overweight, which is why we see colon cancer spiking in all states. Thyroid cancer has surged to fourth place and is also associated with obesity. Lung cancer is the fifthmost common cancer because of tabaco and exposure to wood smoke. Ovary cancer is also among the most common cancers.
Q: How does INCan and MD Anderson collaborate in cancer-related programs and what are the priorities of this collaboration?
A: We are a sister institution of MD Anderson. We share programs related to prevention, early diagnosis and public policies. We also have resident exchanges, which allow for training that can later be applied at INCan. However, we mostly collaborate in research. We established agreements with MD Anderson to replicate their studies so we can compare US and Mexico pathologies and share this experience. Our goal is to explore the causes of certain diseases in both countries and determine risk factors. For instance, in Anglo-Saxon countries, the percentage of women under 40 years old with breast cancer is around 7 percent, while in Mexico it is 15 percent. We want to know the reasons behind this variation.
The National Cancer Institute (INCan) specializes in the treatment of different types of cancer. It is part of an integrated system of 12 hospitals that provide highly specialized services and perform basic and clinical research
CENTRO MÉDICO PUERTA DE HIERRO: AN ENDURING ALLIANCE
Centro Médico Puerta de Hierro joined Mayo Clinic Care Network in February 2019. This is a select group of autonomous healthcare providers working together to improve patient management for the benefit of society. With this new alliance, Centro Médico Puerta de Hierro’s medical community has timely access to evidence-based medical opinions on diagnosis and treatment alternatives from Mayo Clinic staff physicians. That way, patients secure high-quality healthcare at no additional cost. Centro Médico Puerta de Hierro became the first member of Mayo Clinic Care Network in western Mexico.
Centro Médico Puerta de Hierro is a tertiary-care hospital group with five hospitals and other clinics in the Guadalajara metropolitan area and the states of Colima and Nayarit. These hospitals offer 30 specialties, including transplant surgery, cardiology and neurosurgery.
Centro Médico Puerta de Hierro is the only member of the Mayo Clinic Care Network in western Mexico
Centro Médico Puerta de Hierro also has access to a specialized tool called Ask Mayo Expert. This is a database created by Mayo Clinic experts that integrates guidelines, treatment recommendations and patient referral systems for use where medical care is provided. It takes advantage of electronic consultations, known as e-Consults, which allow doctors to interact with Mayo Clinic specialists to get their opinion regarding specific cases.
Mayo Clinic also provides electronic meetings or e-Boards. These are live video conferences that allow doctors to review and discuss the management of complex cases with a multidisciplinary team of Mayo Clinic specialists and other doctors around the world, affiliated to the Mayo Clinic Care Network. Patients at Centro Médico Puerta de Hierro enjoy the benefit of Mayo Clinic Care Network’s expertise. This network shares best practices among members in order to achieve clinical, operational and commercial objectives. Physicians and allied healthcare personnel are also able to access the Mayo Clinic Library, including all educational products, as well as opportunities for professional growth and programs for continuing medical education.
HEALTH MINISTRY RECOGNITION ESSENTIAL FOR BIO ENGINEERS
HERBERT BRAVO President of SOMIB
Q: Which industries are seeing the greatest demand for biomedical engineers and what challenges do you face?
A: Biomedical engineers are active in every industry. They have a strong presence in the hospital sector where they hold both executive and operational roles and many work for the government and the wider public sector. The last commissioner of Seguro Popular was trained in our field. There also are many biomedical engineers in commerce, particularly in businesses that produce medical devices. We also have a strong presence in academic research. In the hospital sector alone, there is demand for 3,000 biomedical engineers. There are now about 50 educational institutions in Mexico that offer a degree in biomedical engineering or similar programs.
One problem is that the Ministry of Health does not yet recognize the profession as a category in the medical field. This is a barrier to more investment and expansion of educational programs. Private hospitals have strong networks of biomedical engineers but many public hospitals do not open up enough places for our professionals.
Q: What are your goals for 2019 and 2020?
A: The first step is to get the profession of biomedical engineer classified properly among medical professions by the Ministry of Health. This is essential to strengthen our participation and contributions in the field.
The Mexican Society of Biomedical Engineering (SOMIB) has contributed to the professional and scientific development of biomedical engineering since 1978. Today, it is the largest organization of biomedical engineers in Mexico and Latin America
BETTER KNOWLEDGE LEADS TO BETTER RESOURCE DISTRIBUTION
LUIS ALONSO HERRERA Director General of INMEGEN
Q: How will your background as the Director of Research of INCan influence your work as head of INMEGEN?
A: At the institute, I was in charge of restructuring the research direction. I established priorities using research studies to better comprehend the state of cancer in Mexico. At INMEGEN, we are conceiving a similar project with a broader focus. We want to examine the risk factors for diseases among different population groups. To do this, we need to collect information from all fields: clinical, genomic, cultural and economic. We want to use all the available information and if it does not exist, we want to collect it, not just for cancer but for all chronic diseases that are a major economic burden on Mexico’s health system.
Our country is huge and environmentally and culturally diverse. Both factors significantly impact our epidemiology. Due to its ethnic diversity, the Mexican population displays different genetic markers. At INMEGEN, we want to draw a picture that helps us better understand our health.
Q: How will you develop your sample group for this project?
A: We are thinking of using captive populations of healthy people; for example, those who are working at particular companies. Through interviews and tests, we will probably encounter some people who have already developed certain conditions. However, our goal is to find people who are at risk of developing a disease in a few years. We will follow their health over time. The government has implemented many programs focused on timely detection, but many of them have overlooked the wide range of variables we want to examine. It will be an expensive and ambitious project, but in five years, we will see the first results.
Q: How can you use this information to develop strategies to attack health risks?
A: We basically want to make a diagnosis of the entire population. By categorizing the population into different types and levels of risk, the health sector will be able to devise prevention strategies better. For example, the health sector has mechanisms already in place to detect and prevent the development of lung, colon and cervical cancer. However, those mechanisms target the population in a way that
assumes all individuals are equal. Results, therefore, are not proportional to the amount of resources spent. Allocating resources on high-risk groups can be much more effective.
Q: What first steps are you taking for this project?
A: First, we have to build networks. We will start with other national health institutes focused on cancer, cardiology, neurology, psychiatry and public health. Except for the Institute of Public Health, they all treat patients and have a vast amount of epidemiological information. Afterward, we can continue with other institutions, including private hospitals. We will then see how our sample evolves.
The initial participation of the industry is essential. All our projects must follow a strategic plan in economic terms. How is it going to be sustainable? Alliances with the private sector will be necessary. Private institutions can greatly benefit from research too because they would learn about the health of their patients, employees or clients. The challenge will lie in maintaining continuity with the same groups of people so we follow their health evolution.
Q: How is INMEGEN raising awareness regarding the importance of genomic research?
A: We have been working hard on communication. We have to show the worth of doing research and generating knowledge and demonstrate their impact on a patient’s quality of life. Results can help us change our behaviors, stimulate innovation and maximize the value of our resources in preventing expensive chronic conditions. The message must be shared through the media and other means, but it must be done in a simple language that can be understood by everyone. Academic involvement is also crucial. Universities and students should be the first to understand the value of genomic testing, the technology involved and its real potential.
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
MORE ONCOLOGISTS NEEDED TO KEEP CANCER IN CHECK
“The country needs to allocate resources to cancer treatment. Resources for health services are not very high and there is no specific amount destined for cancer”
GREGORIO QUINTERO, President of SMEO
Since 1960, cancer has quickly climbed the ranks to become one of the top three causes of death in the country. According to Gregorio Quintero, President of the Mexican Oncology Society (SMEO), more investment is needed to prevent this disease from taking more lives. “The country needs to allocate resources to cancer treatment. Resources for health services are not very high and there is no specific amount destined for cancer,” explains Quintero.
In Mexico, the Ministry of Finance allocates funds on a yearly basis to the health sector, dividing these into five subfunctions: community service provision, personal services provision, generation of health resources, health governance and social protection. But although most of the budget goes to IMSS and ISSSTE, it is nowhere near enough to cover cancer patients. “This is especially true with innovative treatments that can be more expensive,” Quintero says.
Another red flag SMEO has identified is the lack of oncologists and the fact they are mostly concentrated in Mexico’s largest cities, leaving many without access to treatment. “The country has a lack of oncologists per inhabitants and most are centralized in Mexico City and other large cities. For this to change, we require more hospital infrastructure,” says Quintero. Increasing the number of oncologists requires more medical schools and hospitals to be established across the country. SMEO has also created international alliances with North American and European organizations. The society has mutual collaboration agreements that allow the exchange of members, as well as agreements with pharmaceutical companies to provide training for residents and oncologists.
A lack of jobs in nonmetropolitan areas is another reason behind the lack of oncologists per inhabitants in the country.
“The problem is that by centralizing this specialty, we are reaching a saturation point that forces oncologists to work as general surgeons rather than as oncologists.”
SMEO plays a vital role in not only generating information about cancer in Mexico, but also disseminating that information among patients, doctors and government entities. The society works closely with government officials to generate public policy based on available scientific and medical research.
SMEO has also identified a need for prevention and early detection in Mexico to lower the number of deaths by cancer. “Prevention and early detection are crucial in training programs for residents and oncologists. There are certain cancers that can be prevented in one way or another or that can be detected early, improving the chances of recovery,” explains Quintero. “SMEO participates in several academic events where we always cover topics focused on early detection.” This issue needs to be part of the national public policy and SMEO is working with other associations, the Senate and other entities to convince the government to allocate resources for early detection of different types of cancers like breast or prostate.
Although there are many areas of opportunity to provide the attention that cancer patients need, Quintero says technology can help bridge the information gap. “In terms of information access and availability, having Big Data and information available for everyone to access is important.” Yet, for this to work, Quintero says the entire country needs to be connected and have access to information. In Mexico, telemedicine works for general consultations or to get the opinion from an oncologist at a clinic where there is no oncologist available. But for the actual treatment of cancer patients, there needs to be an oncologist in residence, especially since medications and treatments evolve at a very fast rate. “Accessibility is necessary in all regions across the country,” he says.
SMEO has worked directly with many researchers and oncologists in Mexico who participate in research activities. However, there is no consolidated research system. The society has also made efforts to form cooperation groups so research can be done among different hospitals. “Our magazine also plays an important role in promoting research efforts and the results of cooperating groups,” he says. “We are in the process of indexing the magazine into MEDLINE. If we succeed, we would be the first Mexican oncology magazine indexed and one of the few Latin American magazines on the platform.”
EMPHASIZING A HOLISTIC APPROACH TO PREVENTION
PEDRO GUTIÉRREZ-FAJARDO
President of the National Association of Cardiologists in Mexico (ANCAM)
Although cardiologists can work to prevent heart diseases, the most effective strategy to decrease incidences would be to follow a holistic approach where all doctors and specialists collaborate in identifying risk factors, says Pedro Gutiérrez-Fajardo, President of the National Association of Cardiologists in Mexico ( ANCAM). “We need to prioritize prevention. It is the easiest and most economical way to get the best medical results,” he says.
ANCAM has a 35-year history and Gutiérrez-Fajardo says that in that time, the association has consolidated by maintaining an open and inclusive approach toward its members. “ANCAM hosts graduates from 28 cardiology schools in the country. We have also worked to establish collaboration agreements with different national cardiology societies and international institutions, such as the American College of Cardiology, the American Heart Association, the American Society of Echocardiography and the European Society of Cardiology, to maintain a constant influx of information,” he says.
The association focuses on constantly providing updated information to cardiologists and also shares this data with other specialists. “We organize regional events where we invite doctors and nurses from areas like emergency and intensive care, endocrinology and gynecology,” he says. The holistic approach the association is taking is rooted in a single idea: prevention. However, the hardest part to making this approach successful is boosting understanding among the general population regarding the importance of prevention and how to minimize risk factors, according to Gutiérrez-Fajardo.
Although ANCAM uses social media to deliver concrete and understandable information regarding prevention of heart disease to the general population, Gutiérrez-Fajardo says there are priority groups in which the association needs to focus, with children, young adults and women among the most important. “There are more women dying of heart disease than of breast cancer. We are joining forces with gynecologists, so whenever women go for
their routine checkups, specialists can detect risk factors related to heart disease early and direct patients to a cardiologist.”
With children, however, ANCAM’s strategy is completely different since the risks they face change completely. “An obese child will become a hypertensive patient at an early age, which increases the possibility of experiencing a heart attack earlier. This situation, when replicated, generates a heavier strain on the national health system,” says GutiérrezFajardo. However, with children, there also is an increased opportunity for effective communication. “Children are very receptive, so we want to develop an educational program that focuses on the creation of healthy habits, such as eating healthy food, hydrating, exercising and sleeping well. We hope to not only educate children but to educate their parents, as well.”
For Gutiérrez-Fajardo, prevention goes beyond the medical sphere, impacting directly on the country’s development. “Health, education and economic development go hand in hand. There is no point in having a young population with high productivity potential if it is sick. Rather than being an asset for the economy they can become a strain on the health system,” he says.
Besides its own campaigns, ANCAM also has reached out to the public sector to collaborate in the creation of public policies that prioritize prevention at an early age. “We are trying to work with the Chamber of Deputies to bring forward a proposal to engage in this topic more seriously.”
Gutiérrez -Fajardo suggests the prohibition of junk food in schools and in areas surrounding them. “It is a matter of providing education and healthy options from an early age, but we need to work alongside the public sector.”
While this collaboration solidifies, ANCAM will continue working to strengthen its alliances and collaboration agreements with other institutions to keep promoting healthy habits and services among the general population.
“The important thing is to continue working on education,” says Gutiérrez-Fajardo.
WORKPLACE MANAGEMENT KEY TO SUSTAINABLE PRODUCTIVITY
GABRIEL ALVARADO
Latin America Vice President and General Manager of KRONOS
Mexico’s young and qualified labor has attracted many international investors, but if this workforce is not managed properly, particularly in terms of absenteeism, productivity suffers, says Gabriel Alvarado, Latin America Vice President and General Manager of Kronos. “Downtime, even for a single minute, can cost companies thousands of dollars.”
Work absenteeism cuts the productivity of Mexican companies by 31.4 percent, according to the Society for Human Resource Management (SHRM). Moreover, the organization states that only 30 percent of Mexican companies have substitute workers to fill these absences. Preparing for absences and adapting to them are essential to maintain a high level of productivity.
“Downtime, even for a single minute, can cost companies thousands of dollars”
Kronos is a multinational developer of talent-management and HR solutions for the manufacturing, health, IT, retail, banking, aerospace and distribution industries, among others. The company’s solutions allow businesses in many industries to optimize the use of their personnel and their time in order to increase productivity. “Our goal is to help companies acquire and manage the appropriate workforce for a company’s specific needs. Our software allows managers to create diverse scenarios for their employees in order to find the one that best enhances productivity,” says Alvarado.
The company focuses on work optimization, which tackles the proper use of time. “While discipline related to entry and exit hours is an important matter for many companies, few actually monitor their employee’s performance during work hours,” explains Alvarado. “Our software also tracks employees’ individual performance and hours worked.”
Kronos’ software also helps managers address work absenteeism by shifting employees to the areas where they are necessary. While this may seem simple, as a company becomes larger its logistics become increasingly complex. “We worked with a company that had a significant problem with work absenteeism. This company also had problems with unions because employees were granted a series of benefits but there was no system in place to address whether specific benefits, such as one Friday afternoon free per month or a series of discounts, had been already granted to specific employees. This led to union complaints of unfilled services, while the company’s records indicated that the services had been provided. Our system allowed us to easily track which benefits were actually being used by the employees and gave us a picture of all the benefits used and by which workers.”
Kronos has developed solutions for companies of all sizes. Its Workforce Central platform has over 30,000 clients worldwide, according to Alvarado, while its Workforce Ready software was created exclusively for SMEs. “We are focusing on human capital management for SMEs, especially on properly assigning work hours and payment.” Kronos also allied with SAP for the development of a platform called SuccessFactors, which administrates and develops talent.
Kronos will continue to invest in technology to stay at the forefront of the HR management sector. “We developed a solution called Workforce Dimensions, which uses AI and machine learning to empower employees to exchange work information and even switch shifts among themselves,” says Alvarado. Moreover, the AI collects information from employees and managers and makes recommendations based on the needs of the workplace.
High productivity and performance will continue to be priorities for Kronos in Mexico and the world. The company is more than a solutions developer; its goal is to support companies throughout their journey toward high productivity and performance, says Alvarado. “ Kronos believes that workforce management is a journey, which begins with the installation of a platform that must evolve along with the workforce.”
RELIABLE DATA KEEPS TALENT UPDATED
PEDRO VERA
Partner and Director General of Intersistemas
Q: What is the greatest added value that Intersistemas can offer its clients?
A: We do not market our products blindly. We build a tailormade communications strategy around our clients’ needs based on our content and service offering so they can reach their desired audience. Intersistemas has a number of business units, one of which is focused on B2B relations where we work with companies in a variety of industries, including pharma, banking, insurance and food and beverages. Our other unit reaches out directly to doctors before they graduate and is dedicated to building platforms for continuing education. Our goal is to provide doctors in every specialty with the best tools and up-to-date content from reliable sources to help in their day-to-day activities.
All our units have demonstrated positive growth, although ICAS has been the most aggressive. ICAS, our Employee Assistance Programs division, gives people access to emotional support and psychological help programs 24/7. This division also provides nutritional assistance, legal consulting and helps clients manage government paperwork. Because everything is done in-house, we can guarantee the quality of our services. Client confidentiality is one of our priorities and we are certifying our personnel in ISO-27001, an international standard on data security.
Q: What flagship project showcases the capabilities of Intersistemas’ offering?
A: After medical students graduate as general doctors, they need to pass the National Exam for Applicants to Medical Residencies if they want to specialize. However, out of 50,000 applicants, only 5,000 can access postgraduate studies and some fields are more popular than others.
We developed an educational platform called Exarmed to help students prepare for the exam. They can even sit for a simulated test. Exarmed also highlights the topics applicants need to work on and how their knowledge compares to students from other institutions. Our solution has benefited thousands of students, which motivate us to keep developing platforms oriented to continued education.
Q: What channels do you use to reach your target audience?
A: We publish close to 2,000 pages of medical and healthcare content every month, written by a network of 600 authors who are leaders in the healthcare sector, half of them Mexican and the other half employed by internationally renowned companies. All our content is based on hard evidence, balanced among topics and without any commercial bias, which has helped us grow for the past 49 years and position Intersistemas as a reliable source of information. This vision helped us become exclusive representatives of the New England Journal of Medicine, one of the most important medical publications in the world. We also work with institutions like the American Academy of Pediatrics and the American Academy of Family Physicians. Once we generate content, we lean on the pharmaceutical industry to distribute it physically and digitally. We are supported by leading pharmaceutical laboratories, which gives us an entry point to doctors in all fields. Our sources speak for themselves and laboratories know they are contributing to an ongoing education effort. To complement this offering, we have our own distribution channel called Medikatálogo, which reaches doctors directly, especially those in remote areas.
Q: What is the main benefit that companies can get from using Intersistemas’ B2B products and services?
A: Our main focus is to ensure the well-being of our clients’ employees according to a holistic approach. Following our culture of prevention, it does no good for a doctor to prescribe a medicine to someone if the person does not understand what is wrong with them or how they can solve their issue. Through our Bienestar Total platform, our clients’ employees can access material that promotes a healthier lifestyle, which in turn creates a good-will relationship between them and their employer. We have organized really successful campaigns for quitting smoking, losing weight and promoting more nutritious eating habits at companies.
Intersistemas is an editorial group focused on the publication of books, magazines and educational programs for the medical and healthcare sectors. It covers 18 specialties through articles written by 600 opinion leaders
GUIDANCE TO NAVIGATE EVOLVING HEALTH STANDARDS
FAUSTO HERNÁNDEZ Director of VALID
Q: How does VALID distinguish itself when offering its validation services?
A: VALID is focused on becoming the ideal adviser to those clients that want to strengthen their regulatory compliance in the health industry. Health standards in Mexico are constantly evolving and companies in the sector often require advice to stay up to date.
For example, when the Ministry of Health published NOM059, it did so to introduce better international practices in the production of drugs under the Pharmaceutical Inspection Cooperation Scheme (PICS). Companies need to know and understand this NOM. VALID is fully upto-speed on this and other regulatory changes and can provide support to national and international companies, facilitate their access to the market, comply with regulations and provide them with greater commercial value for their products and services.
Q: Considering the growth of the medical devices sector in Mexico, are there any plans to expand your services to this niche?
A: For a long time, most of our main clients were national and international pharmaceutical companies but this has changed in recent years and two segments in particular have been growing in Mexico: medical devices and thirdparty logistics (3PL). Mexico is the largest provider of medical devices in Latin America and there has been an increase in the number of companies that require our services in this area. 3PL companies require more support related to quality systems, cold chain validation and personnel qualification.
Q: Which of VALID's services for the pharmaceutical and medical devices sectors are in greatest demand and what added value do these solutions provide?
VALID is a consultancy that offers validation services to companies in the pharmaceutical and medical devices sectors. Its team includes chemical engineers, computing technicians and mechatronics engineers
A: The main obstacle facing the health industry is finding employees who are trained in all matters related to regulation, especially for cold chain logistics. If the logistics provider, including the driver, is not fully trained on the cold chain, there is a risk that some products will be damaged. The lack of training also impacts the final consumer.
For example, if the logistics operator in charge of delivering medicine to a hospital does not know about cold chain logistics, it can put the hospital at risk and affect the health of patients. The lack of training could be catastrophic for all people involved. VALID specializes in training health professionals on regulatory issues such as ISO, international GAMPs, ICH and PICS guidelines.
Q: What success stories has VALID had thanks to these initiatives?
A: Gerresheimer, a primary packing glass company based in Queretaro; the pharmaceutical company Synthon, in Guadalajara; and Power Ice, a cold chain materials supplier, are among the successful cases of companies that thanks to our consulting services are seeing a change in their performance. Overall, there have been many successes related to VALID’s collaborations with both national and international clients.
Q: With which regulatory entities is VALID connected and what actions do you take to strengthen your relationship with them?
A: We are connected with COFEPRIS but we also regularly attend forums presented by CANIFARMA, Mexico's National College of Pharmaceutical Chemists Biologists (CNQFBs) and the Mexican Association of Professionals in Sanitary Regulation of the Industry of Medical Supplies for Health (AMEPRES).
At these forums, we receive feedback from the regulatory authorities to understand how regulations are trending in Mexico. It is also a way to keep in touch with other companies, associations and entities that are relevant to the industry.
DATA ANALYTICS INCREASE EFFICIENCY, REDUCE COSTS
GUILLERMO BILBAO Director of PA Consulting Mexico
A growing and aging population that suffers more from chronic diseases is increasing demand on the Mexican health sector and technology can help, says Guillermo Bilbao, Country Manager and Director of PA Consulting Mexico. “Using data, harnessing the right technology and organizing care around patients are key guiding principles to handle current demand with limited resources, he says.
PA Consulting is a London-based firm that provides management, technology and innovation services in many sectors, including energy and utilities, consumer goods, financial services, government and healthcare. The firm has built a strong presence in Mexico in the oil and gas industry and is now veering toward healthcare through a collaboration with public institutions. “We want to support the public sector with the design and implementation of a distinct shift in the market,” says Bilbao.
The firm is investing in a value-based healthcare proposition of achieving a quality, personalized and preventive health system, explains Bilbao. One of the pillars on which the company relies is the use of data. “Modern devices used at hospitals generate a large amount of information. However, this information is not used properly because users often do not have the knowledge, experience or analytical abilities to fully take advantage of it,” he says. Using information properly can uncover areas of improvement and reduce operational costs by targeting care much more effectively. “Hospitals collect large amounts of information every minute but that information is not being taken advantage of. We use dark data as an analytical approach to help our clients become more data-driven. Rethinking the questions that we need data to answer allows to properly gauge the patient’s experience and improve it.”
Bilbao explains that while many hospitals invest in state-of-theart equipment, they often do not fully exploit the technology’s capabilities, which will become increasingly necessary in the coming years. “Budget cuts in public healthcare will make efficiency crucial.” Moreover, using data effectively will allow for the creation of personalized treatments or prevention plans for patients. “Doctors and healthcare providers are fully
aware that it is much more expensive to treat a disease than to prevent it.”
Mexico has numerous medical facilities but few adhere to higher standards of care. According to Bilbao, Mexico has over 7,500 hospitals but only 341 are certified. “Patients and hospitals in Mexico could benefit from a certification program that directly evaluates their performance and addresses areas to improve,” he says. While other countries have successfully implemented programs of this kind and benefit from its results, Mexico has fallen behind.
PA Consulting is now supporting a public institution in what Bilbao expects to be a fruitful collaboration with the Mexican healthcare sector. The firm expects to present and implement the first favorable results in the sector in 2020. “Eventually, we will be able to work in Mexico on everything from strategy to implementation in the healthcare sector. For instance, we have significant experience in large, consolidated sales from our work with the UK’s healthcare system.”
HRAEPY, Merida, Yucatan
Among the many challenges the healthcare sector faces, there is a growing need for trained professionals. The problem is expected to become even more pronounced as the population ages and gains weight. The country needs to train and attract the necessary talent to achieve its health goals. However, training requires combined efforts from multiple fronts, including universities, the government, recruiters and private companies. Mexico Health Review interviewed the top universities in Mexico and other talent experts to understand where the gaps are and what programs are best suited to generate the needed skills for up-and-coming health professionals.
HOW ARE YOU CONTRIBUTING TO ADDRESSING THE NEED FOR DOCTORS AND SPECIALISTS?
Rather than a lack of specialists, I think doctors are badly distributed. On average, there are two to three doctors per 1,000 inhabitants. However, in cases like Mexico City, the concentration of doctors can be three times higher than in other regions. This disparity should be addressed not only by universities but also through the National Health System. Around 8,000 doctors graduate from a specialty in Mexico every year but the available university placements are determined based on hospitals’ vacancies instead of the actual needs of the national population. Ideally, the government should have a way of organizing the country’s local and national health needs to have a clear idea of how many doctors and specialists are required by state, which would make it easier to distribute them.
GERMAN FAJARDO Director of the UNAM School of Health Sciences
Mexico does not train enough specialists in neurology to address the needs of its population. The country has only 10 training centers for neurosurgery and about 13 for neurology. Moreover, specialists are often unable to work outside the largest cities in Mexico: Mexico City, Guadalajara and Monterrey. We are betting on telemedicine to increase access to care. We provide several online training courses for health professionals. The institute has 16 rooms equipped for telemedicine and two videoconference rooms thanks to a MX$20 million (US$1.04 million) donation from the Public Charity Administration.
MIGUEL ÁNGEL CELIS Director of INNN
In Mexico, there are around 347,000 doctors. However, only around 2,195 are specialized in cancer management. According to estimates, there should be 20 medical oncologists for every million inhabitants. This means that Mexico has only one-fifth of the required number. There are around 164 medical schools in the country and until three years ago, only 10 percent included oncology in their syllabus, even though cancer is the third-leading cause of death in the country. INCan has taken on the task of talking with the deans and faculty directors of these universities to introduce oncology to their curricula. So far, we have signed a collaboration agreement with 50 medical schools to strengthen their oncology programs. Our goal is for all medical schools to have oncology programs within five years.
ABELARDO MENESES Director General of INCan
PERSONAL CARE & WELLNESS
With Mexico’s unabated obesity epidemic, many are exhorting individuals to take their health in their own hands. However, this requires a comprehensive approach that involves not just individuals but product and service providers from many areas that are often overlooked, including physical activity and skin, eye and dental care. Globally, the wellness economy has experienced steady growth, achieving a market value of US$4.2 trillion. People are considering wellness as a concept that involves different aspects of their lives, such as personal care, beauty, anti-aging concerns, real estate and even the workplace. Wellness trends are migrating from a nutrition and exercise dynamic, to a more comprehensive lifestyle concept.
This chapter takes a in-depth look at the companies catering to this segment of the healthcare industry, what they are doing to foster proactive approaches to healthcare and wellness and how they are helping to shape trends that are changing the country’s health dynamic.
CHAPTER 11: PERSONAL CARE & WELLNESS
240 ANALYSIS: Mexico a Leading Player in Global Wellness Economy
242 VIEW FROM THE TOP: Juan Carlos Muñoz, Banorte
243 VIEW FROM THE TOP: Sandrine Dupriez, Laboratorios Expanscience Mexico
244 VIEW FROM THE TOP: Patrick Devlyn, Grupo Devlyn
245 VIEW FROM THE TOP: Pablo Cruz, Hospital de la Luz
246 VIEW FROM THE TOP: Ignacio Castañón, Alcon Mexico
247 INSIGHT: Enrique Graue-Hernández, Instituto de Oftalmología Fundación Conde de Valenciana
247 VIEW FROM THE TOP: Rubén Flores, Ópticas de Máxima Visión
248 INSIGHT: Frank Rosengaus, Ultimate Médica
249 VIEW FROM THE TOP: Roberto Esses, Gympass Mexico
250 VIEW FROM THE TOP: Alejandro López, IM Natural
251 VIEW FROM THE TOP: Magdalena Ferreira-Lamas, Avon
252 INSIGHT: Antonio Cruz, Kurago Biotek
253 VIEW FROM THE TOP: Alfonso Ventura, APEC
MEXICO A LEADING PLAYER IN GLOBAL WELLNESS ECONOMY
Mexico is Latin America’s leading destination for wellness tourism, with 18.7 million total travelers who spent US$12.8 billion in the country. Globally, Mexico ranks 11th in terms of wellness tourism. The potential growth opportunities in the country are attracting top wellness chains, making Mexico a leading player in the segment
The global wellness industry grew from a US$3.7 trillion market in 2015 to US$4.2 trillion in 2017, according to the Global Institute of Wellness. Today, the industry represents 5.3 percent of global economic output and Mexico increasingly is playing a leading role in the sector.
Greater awareness of personal health, appearance and well-being are fueling the industry’s growth, along with technological advances that improve access to information. According to an Arizona State University report, the variety of wellness apps and mobile health monitors are empowering individuals to monitor and analyze key indicators like heart rate and activity and stress levels. “Today, many people use the internet to look for more information about their health and find innovative treatments,” says Sandrine Dupriez, Director General of Laboratorios Expanscience Mexico.
Globally, Mexico is tapping into the wellness trend to become the No. 1 destination for wellness tourism in Latin America and No. 11 overall, according to the Global Institute of Wellness. Skin and visual care are among the leading segments fueling growth in the country. “The cosmetics industry develops indispensable goods. Both men and women use these treatments to enhance their physical appearance and to consequently feel better in terms of self-care and self-esteem,” says Alejandro López, Director General of IM Natural.
The Mexican market is expected to continue growing above the world average over the next few years. According to CANIPEC, approximately 20 percent of the US$10 billion personal care market belongs to skin care products. The value of the Mexican visual market totals US$35 million, according to Coopervision, and it has the potential to growth to US$200 million in the next five years.
SKIN CARE
The global skin care market is valued at US$141.3 billion and it is expected to hit an estimated value of US$180.3 billion by 2024, according to Statista. The driving factors behind this growth, according to Euromonitor International, is a growing consciousness regarding health, appearance and well-being.
As Mexico continues to grow its skin care market, there remains a great deal of opportunity. Dupriez highlights the country’s environmental and climatic conditions that make it necessary to use sunscreen, but the use of these products remains low. “Due to the increase in pollution, the skin requires more dedicated care. In Mexico, sunscreen is not yet as widely used as it should be,” says Dupriez. Mexico needs to transform its skin-culture since sunscreen and other products should not only be used when people are directly exposed to the sun but as a daily protection. “In Colombia, these products are used three times more than in Mexico. This is an area where there is still much to do. People should start using sunscreen every day, not just at the beach,” she says.
The market for men is another area of opportunity as social conventions are broken about skin and makeup. IM Natural is among the company’s targeting this demographic. “We launched a line for men four months ago. The products that have been most successful in this market are moisturizing and shaving creams, and products for beards and mustaches,” says López. The company is undergoing a knowledge development phase but in the near future it will be launching more products, he adds.
Source:
FORECAST FOR THE GLOBAL SKIN CARE MARKET (US$ billion)
GLOBAL
KEY WELLNESS SECTORS AND MARKET VALUE (2017)
1. Personal Care, Beauty and Anti-Aging (US$1,083 billion)
2. Healthy Eating, Nutrition and Weight Loss (US$702 billion)
3. Wellness Tourism (US$639 billion)
4. Fitness and Mind-Body (US$595 billion)
5. Preventive and Personalized Medicine and Public Health (US$575 billion)
6. Traditional and Complementary Medicine (US$360 billion)
7. Wellness Lifestyle Real Estate (US$134 billion)
8. Spa Economy (US$119 billion)
Source: Statista 2019 *Forecast
Euromonitor International expects the cosmetics industry in Mexico to enjoy annual growth of 11 percent through 2019. Among the most valuable brands in the industry are Johnson’s, which is the flagship brand for Johnson & Johnson, Gillette, L’Oreal, Pantene and Nivea. However, global brands recognize that the Mexican market has its peculiarities and requires tailor-made products. “We see interesting trends among Mexican women, who focus on internal and external beauty,” says Magdalena Ferreira-Lamas, Vice President and General Manager for the Group of North Latin American Markets (NoLA) of Avon. The company launched a new brand of makeup called MARK, with new colors, such as brown, violet and blue. “These are designed to offer a choice for women of all walks of life and ages. The brand adapts well to the taste of Mexican woman, giving a wide variety of options for everyday use,” says Ferreira-Lamas.
A rising concern regarding skin problems is another factor fueling the skin care products industry. The National Institute of Cancer (INCan) reported skin cancer as the second-most frequent type of cancer in Mexico. Each year, 16,000 new cases of skin cancer are diagnosed in the country with the WHO arguing that an absence of a preventative culture is a contributing factor. The use of products that protect against UV exposure could help and these products are also stronger than ever. “Years ago, people would wear sunscreen with SPF protection 12. Today, the minimum is SPF 30, while SPF 50 has become the most-used product,” says Dupriez. “UV protection levels have gone up to offer better protection.”
VISUAL HEALTH
WHO’s Universal Eye Health: A global action plan 20142019 report estimates there are 285 million visually impaired people worldwide, of which 39 million are blind, while 80 percent of all causes of visual impairment are preventable or curable. The international organization has emphasized that efficient and available eye care facilities are essential to efficiently control blindness, including visual impairment.
9. Thermal/Mineral Springs (US$56 billion)
10. Workplace Wellness (US$48 billion)
Source: Global Wellness Institute
Other international organizations like the World Economic Forum have stated that vision problems should be considered an easily solvable public health issue that could result in an almost immediate change in a country’s productivity.
Awareness is key, says Alfonso Ventura, Director General of The Association to Prevent Blindness in Mexico (APEC). “About eight out of 10 people could have their eyesight problems resolved if they went to see an ophthalmologist,” he says. Collaboration between different visual health players could have an almost immediate impact on society, adds Patrick Devlyn, Director General of Grupo Devlyn. “If the government, companies and the ophthalmological and optical sectors work together, there can be a favorable and almost immediate impact on society.”
Devlyn adds that the solution is often a simple one. He says that visual healthcare as “a public health issue becomes solvable through a pair of well-graduated and affordable glasses, creating a significant impact on various segments of society.” Glasses in comparison to treating other diseases are affordable and easy to provide. “The cost of frame or contact lenses is minimal when compared to the productivity and engagement benefits that people can get from them,” says Devlyn.
Companies and nongovernmental institutions also are working together to reduce eye impairments that cannot be resolved by glasses and which involve surgery, such as cataracts. “There is still a lot to do in terms of visual health in Mexico,” says Ventura. “One condition closely linked to blindness is diabetes, which is a growing problem in our population. While cataracts are the primary cause of reversible blindness in this country,” he says.
SUPPORT FOR A HEALTHY LIFESTYLE
JUAN CARLOS MUÑOZ Health System Director of Banorte
Q: What is Banorte’s approach to healthcare and how do employees benefit as a result?
A: Traditionally, companies go to third-party insurers to manage their employees’ healthcare. We are one of the few corporations that administer healthcare services internally. The main advantage this offers is that we can design the program’s structure ourselves and set our own standards.
Our approach is based on two elements. First, Seguros Banorte, which covers our employees’ major medical expenses with special offers and conditions. Second, we offer a health service called Banorte Salud, which provides consultations to employees by our own health professionals. All employees have access to this program, which means we do not discriminate based on position within the company or health status.
Other insurance agencies can lose clients due to competition over services and prices. We do everything to ensure all our employees receive equal high-quality healthcare. Outside our offices, we decide which hospitals and clinics we work with and regularly change them when we feel there are better options. We also work with several specialized clinics. For example, in Monterrey we now work with a clinic that is focused specifically on cancer.
Q: What are Banorte Salud’s core strategies to improve employee health?
A: The central component of this health network is called Vive Sano, Vive Banorte. This is a tool that allows employees and their family members to keep track of their health status. We have our own doctors who can perform screenings at regular intervals. We also have nutritionists and physiotherapists who provide personalized treatment. All these services are at no extra
Banorte is one of the few companies in Mexico that offers inhouse healthcare services to employees through an innovative approach called Banorte Salud. This service uses in-house screenings and consults to help employees change their habits
cost. The goal is to generate changes in lifestyle and habits that will have a positive impact on health over the long term. To complement this program, we are also installing gyms at our offices that employees can use six days a week at a reduced rate.
Q: How has Banorte Salud impacted Banorte’s workforce?
A: This is a long-term project and it is hard to measure its immediate effects, unlike a change in benefits such as a salary increase. Having good health, however, is ultimately worth much more. We want the people at Banorte to feel that we care for them. This generates a sense of belonging, which indirectly attracts new talent and boosts retention. Having access to healthcare also reduces stress among employees, hopefully making them happier to work for us.
Q: What are Banorte Salud’s goals for 2019 and 2020?
A: Qualitatively, we want to provide our health program to all employees across the country. Of course, this introduces logistical challenges. In very remote places, it can take a person two hours to get to the nearest facility for a consultation. In these cases, we are looking at providing telemedicine services.
As people begin to live a healthier lifestyle, we hope to see less sickness. We have quantitative indicators that show how much our health services are used. These include things such as number of visits and number of hospitalizations. Our goal is to bring these indicators down over the next couple of years. This could also be translated into economic indicators, by seeing how much a person produced before and after being part of the program.
Over the longer term, having a program that can track people’s health and provide them with continuous guidance will no doubt lead to less costly healthcare as serious conditions are avoided. In the end, we will have healthier employees at a lower cost for the company. Of course, we also need to take into account inflation in medicine prices over the years. Financing good healthcare at a reasonable price will continue to be a challenge.
SKIN CARE GRADUALLY GAINS A FOLLOWING
SANDRINE DUPRIEZ Director General of Laboratorios Expanscience Mexico
Q: How have you advanced with the company's target to reach MX$500 million in national sales by 2020?
A: Our goal of growing annual sales to MX$500 million (US$26 million) by 2020 remains the same. This growth will come through both of our business units: our dermocosmetics line Mustela and our pharmaceutical product line for treating osteoarthritis. The Mustela brand is wellrecognized, which means that the expected growth can be achieved. Our treatments for osteoarthritis are more recognized by healthcare providers every year. Part of our strategy for this line is to strengthen the triangular relationship between doctors, patients and Laboratorios Expanscience Mexico. In most cases, a doctor prescribes the medication and accompanies the patient.
Today, many people use the internet to look for more information about their health and find innovative treatments. We have therefore launched an awareness program called Vivir sin Dolor (To Live without Pain), in which we provide information about osteoarthritis symptoms and treatment options, as well as a directory of doctors that can help patients with this disease. This is helping people to detect symptoms earlier and to take the right steps to start treating the condition. To ensure the best results, it is important that patients consult their doctors and complete the whole treatment.
Q: Why are sales of skin products enjoying worldwide growth?
A: Due to the increase in pollution, the skin requires a more dedicated care. In Mexico, sunscreen is not yet as widely used as it should be. In Colombia, these products are used three times more than in Mexico. This is an area where there is still much to do. People should start using sunscreen every day, not just at the beach. Also, to be efficient, sunscreen must be applied at least 20 minutes before sun exposure. UV protection levels have gone up to offer a better protection.
Years ago, people would wear sunscreen with SPF protection 12. Today, the minimum is SPF 30, while SPF 50 has become the most-used product. Our portfolio of
baby skin care offers products for all skin types: normal skin, dry skin and atopic skin. Skin care for babies is important and fortunately parents are starting to realize this. In past years, we have raised awareness about skin care with our team of beauty advisers. They are present in pharmacies and other points of sales to help parents choose the best skin care for their babies. Key opinion leaders who have experience with our products can also recommend specific routines to parents.
Q: How do initiatives like the Better Living Program contribute to your corporate social responsibility vision?
A: Since April 2018, Laboratoires Expanscience and its brands have been certified as B Corp, an international label awarded to companies that develop and operate their activities with a positive impact on society and the environment. Laboratoires Expanscience is the first pharmaceutical and dermo-cosmetic laboratory in the world to join the B Corp movement. Our Better Living Program goes along with our Corporate Social Responsibility (CSR) policy, which we voluntarily adopted in 2004 when we signed up to the UN Global Compact. Besides working to improve employee conditions, the program includes many initiatives for communities.
Locally, we bring support to various social and educational initiatives in Mexico. We provide mentoring to two target groups: female entrepreneurs and high-performing university students. The first program is called Victoria 147 and it provides support to women that want to start their own business or bring it to a higher level. The other mentoring program is called Talentum. Every year, 60 university students are selected from less favored backgrounds to receive personal guidance on building leadership skills and gaining confidence. We accompany these students for six months and provide shadow practices to give them the opportunity of a professional experience.
Laboratorios Expanscience Mexico is the Mexican branch of Laboratoires Expanscience, a French pharmaceutical and dermo cosmetic laboratory that manufactures innovative products for skin care and osteoarthritis
BETTER EYESIGHT CLEARS PATH TO PRODUCTIVITY
PATRICK DEVLYN
Director General of
Grupo Devlyn
Q: How do you expect operations to change now that the Devlyn family has repurchased the company and how will this impact your clients and partners?
A: The repurchase was the result of a cycle coming to an end with our partner investment fund. We merged with this fund to strengthen our position and serve the market in a more competitive way. Our goal now is to consolidate the company with a medium and long-term vision focused on our brands: Devlyn Optics, Optimart, Clínicas, Vetro and Poyssa. We also want to strengthen ties with our business partners in department stores and with international brands, such as Ray-Ban, Vogue, Carrera, Lacoste, Carolina Herrera, Michael Kors and Prada.
Q: How is Devyln approaching its goal of modernization?
A: Besides strengthening our business relationships, our strategy is focused on better customer service. However, the priority is not to open more stores but to improve how existing venues serve customers. What got us to where we are now will not keep us there because consumers are not the same as they were 15 years ago. Both the market and the consumer have evolved, creating new challenges. Grupo Devlyn must modernize its service by bringing clients closer to our opticians to provide quality ophthalmological exams, access to the best products and proper eye care. Grupo Devlyn will operate through an omnichannel communications system, allowing clients to contact our stores in the way that best suits them.
Q: According to the World Economic Forum, sight problems should be considered a public health matter because of their impact on productivity. What is Grupo Devlyn’s perspective?
A: In collaboration with the Business Coordinating Council (CCE) and other partners like CANIFARMA, Funsalud and the Mexican Hospital Consortium, Grupo Devlyn can strengthen public policies geared toward prevention. Approximately
Grupo Devlyn is the largest optical group in Mexico with over 75 years of experience in the retail market. It specializes in optometric and ophthalmic solutions and wholesale of optical products. It has over 1,000 optical shops in Latin America
80 percent of all cases of treatable blindness globally can be resolved with a pair of glasses. Therefore, a public health issue becomes solvable through a pair of well-graduated and affordable glasses, creating a significant impact on various segments of society. With children or young people, better sight translates to improved school performance and greater engagement in education. Meanwhile, people already working can benefit from greater productivity and fewer mistakes. The cost of frame or contact lenses is minimal when compared to the productivity and engagement benefits that people can get from them.
Q: What strategies is Grupo Devlyn implementing to compete against retail giants like Amazon?
A: Competition can come from different sectors, which means we must be aware of what companies such as Amazon and Walmart are doing. Our first priority is to make sure we know our customers better than anyone, while prioritizing quality and service through a personalized experience. Innovation is another key element in our differentiation strategy. We create new experiences for the client by employing innovative technologies and new distribution channels that make it easier for our customers to contact us.
Q: What role do you want Grupo Devlyn to play in the retail sector in Mexico?
A: Grupo Devlyn’s priority for 2019 is to better serve its customers and business partners in all segments where it participates. Secondly, we want to work more quickly in bringing together the elements and strategies that will exponentially improve our brand positioning and presence in the market.
Q: What recommendations would Grupo Devlyn make to the government to properly address eye health?
A: If the government, companies and the ophthalmological and optical sectors work together, there can be a favorable and almost immediate impact on society. At Grupo Devlyn, we believe eye health should be a priority in the national healthcare plan and we can and are willing to collaborate with the government to ensure spending on eye health results in a cost-efficient investment.
SUSTAINABLE BUSINESS AND CARE MODEL FOR OCULAR HEALTH
PABLO CRUZ Director General of Hospital de la Luz
Q: How does Hospital de la Luz improve healthcare practices and access to ocular care?
A: Hospital de la Luz is the oldest visual health hospital in Mexico and Latin America and it has been improving access to ocular care in the country for many years. We have also trained many of the professionals in the sector. The hospital has developed new areas, such as the Integral Attention Center for Visual Disability (CADIVI) and its Biomedical Research Center, and has been certified by the Council of General Health for international standards.
Regarding access to ocular health, Hospital de la Luz has steadily improved its facilities and capacity to increase the number of patients it attends. For example, in 2012 the hospital performed 164,039 medical consultations, 63,438 hospital services and 1,056 rehabilitation services. In 2018, we conducted 199,141 medical consultations and provided 110,656 hospital services and 2,024 rehabilitation services. This is the result of two main factors: the hospital's new General Management area and the use of IT technologies that have enabled a greater number of people to gain access to our services.
Q: How is the hospital ensuring it is a financially sustainable organization?
A: Though in the past we received donations from different companies and foundations, getting funds has become difficult in recent years. It is in our interest to find new companies that want to contribute to bringing ocular health closer to the most vulnerable populations in Mexico. Hospital de la Luz recently purchased land to construct a hospital in Iztacalco, Mexico City, and is looking for companies to donate construction material and money to develop this new facility. However, the hospital does not depend entirely on donations to operate on a daily basis.
As a private assistance institution, the hospital operates with a economy of scale scheme to cover the expenses of its daily surgeries, medical and administrative salaries and more. In addition, the hospital also receives an income from eight donated properties located in San Pedro de los Pinos, the city center and the Roma neighborhoods, among others.
Q: The hospital has two modalities of coverage: intramural and extramural. What is the target population of each and what services are offered?
A: About 87 percent of our target population is found in the Metropolitan Mexico City area. Given that Hospital de la Luz and its rehabilitation center are located in Mexico City, most of our patients from the city and the suburban areas are treated under the intramural modality. The extramural modality is applied for visual health campaigns conducted once a year for other states, including Chiapas, Oaxaca, Michoacan, Guerrero, Veracruz, State of Mexico and Puebla.
In terms of expanding our services through more hospitals, we do not believe that is the best strategy for the Hospital de la Luz. While we understand that there are people who need our services, we are also aware that it would require an increase in our capacity. Such action would also affect our residency program, complicating the interoperability residents enjoy between our facilities. An average resident sees 32 patients a day and attends classes from 9am to 2pm. Increasing the number of facilities without boosting the number of doctors and residents would complicate our efficiency. The hospital prefers to continue operating using the same modalities as it does now.
Q: What are your expectations for the new hospital in Iztacalco?
A: We conducted a variety of demographic and marketing studies to analyze and determine our next location. Iztacalco has a target population of 5.5 million people and high demand for the services we offer. We believe most of the people who visit our Tacabalera facility from Iztacalco, Nezahualcoyotl, Chalco and other close delegations will prefer to our new facility. The hospital hopes that this new location will give people from other parts of the city a closer and viable option to care for their visual health.
Hospital de la Luz has more than 140 years of experience attending visual health in Mexico. The hospital is certified by the Council of General Health for international standards and performs nearly 1,000 ophthalmological services a day
EDUCATION NEEDED TO DISPELL MYTHS ABOUT VISION
IGNACIO CASTAÑÓN General Manager of Alcon Mexico
Q: What actions is Alcon taking to strengthen its presence in the surgical and contact lenses markets?
A: The market has enjoyed double-digit growth since 2017, mainly thanks to a greater understanding of cataracts and how they can be treated. Also, we are collaborating with the leading ophthalmic institutions to drive awareness on this problem. For instance, the Association to Prevent Blindness in Mexico (APEC) created a successful campaign called Adiós Catarata that we have supported. We held our own awareness initiatives working together with hospitals, universities, schools and NGOs. The topic has seen more press and other media coverage, as well. As a result, more people have sought medical attention. While this has created a window of opportunity for our business, the most significant benefit has been for people who undergo surgery and enjoy a substantial improvement in their quality of life.
We have had significant success in the contact lenses market, too. One of our strategies to reach new customers and create awareness was to set up stands at big events where people could be checked and receive a diagnosis from an optometrist.
Q: How does Alcon differentiate from other companies offering similar products?
A: After our spin-off, we became the only company worldwide that is 100 percent dedicated to vision and eye care. We are market leaders in all countries where we are present. Innovation is our core driver, which is also one of the main reasons why we separated from Novartis. The type of research our products require is different, and being independent allows us to respond faster to our client’s needs.
Our innovation strategy is both organic and inorganic through the acquisition of other companies with promising
Alcon is a global leader in eye care and it is dedicated to help people see better. The company manufactures surgical and pharmaceutical vision-care products. Alcon Mexico has been in the market for over 40 years
technology. One example of a product developed internally is our preloaded intraocular lens named Acrysof. This system allows the doctor to insert a lens directly from a packaged container. Because there is no need to submerge the lens in liquid first and then inject it, less handling is needed and the doctor has to do a smaller insertion cut.
The result is a safer and faster procedure. An example of technology we acquired externally is a 3D camera that can be attached to the doctor’s microscope to project an image on a screen. We acquired this technology two years ago and recently launched it.
Q: Do you train doctors and other health professionals to use these technologies?
A: Yes, we are always working on training doctors and optometrists. When we move to our new headquarters in Geneva, Switzerland, we will have a special center for training these health professionals. We will teach optometrists everything about contact lenses: how they are applied and the different types for different conditions. We will also train doctors to use our new technologies. We offer the same level of technology as in the US and Germany, which presents great opportunities for ophthalmologists in this country.
Q: How will demographic shifts and conditions like obesity and diabetes impact Mexicans’ visual health?
A: Diabetes has a direct impact on vision. As the incidence of diabetes rises, we will see more retinal diseases. I am not sure if we will need new forms of treatments to deal with these emerging diseases.
Q: How would Alcon like to close 2019?
A: Our main mission for 2019 is to grow in the market. We will be launching more products in Mexico in the short term. One is for dry eye, a condition that affects over 350 million people worldwide. In terms of competition, we are not over-preoccupied; being the biggest company has certain advantages. We will reach more patients, be able to provide more attention to medical professionals and generally see more commercial success.
EXPANDING EYE-CARE REACH
ENRIQUE GRAUE-HERNÁNDEZ
Director of Cornea and Refractive Surgery and Board Member at Instituto de Oftalmología Fundación Conde de Valenciana
Sight issues should be considered public health problems because of their negative impact on the productivity not only of those affected but also of those around them, says Enrique Graue-Hernández, Director of Cornea and Refractive Surgery and a Board Member at Instituto de Oftalmología Fundación Conde de Valenciana. “Sight is what allows people to connect to the world, to interact with it and to be productive. People with impaired sight impact their entire surroundings.”
According to Graue-Hernández, sight issues can have a significant and negative impact on communities with limited resources. “Especially in small towns where a person’s role might have a larger impact on the community, impaired sight or blindness might lead to detriments in the community’s development.”
Despite the importance of visual health, there are two important elements hindering the segment’s development: lack of access to health services and lack of a health and prevention culture regarding eyesight. As a 43-year-old nonprofit private assistance institution (IAP) specialized in treating sight conditions, Instituto de Oftalmología Fundación Conde de Valenciana has made a significant effort to reach communities that traditionally are underserved. “We have tried to reach places that do not have ophthalmology services," says Graue-Hernández. At the same time, improving the lack of a health and prevention culture is a work in progress that requires the entire industry’s participation. “Eyesight issues are as important as any heart or lung affliction, which means people need to take care of their eyes as much as they care for their other organs.”
VISUAL HEALTH AN OVERLOOKED FACTOR IN PRODUCTIVITY
RUBÉN FLORES
Director General of Ópticas de Máxima Visión
Q: How does poor visual health affect businesses and how can you help them address this problem?
A: The World Economic Forum stated that vision problems must be considered a matter of public health and that 80 percent of all visual problems can be solved with glasses. For instance, some individuals spend their office hours nursing a headache caused by poor vision, which decreases overall productivity.
We work directly with the HR and medical departments of companies. We offer tests for their employees at no cost and with no commitment to buy. However, we provide a clinical file to the company’s management, which the company doctor can use to incentivize employees to buy glasses if they need them for their position.
Q: How is Ópticas de Máxima Visión's business model innovating optical stores?
A: Our business model targets other companies. We are an optician for businesses that provides the exact same benefits as others opticians, albeit with a free door-todoor delivery service. In our visits to clients, we bring every necessary tool and even sample glasses to the client for them to choose from. Moreover, we finance the acquisition of our products at no added cost.
Ópticas de Máxima Visión is focused on improving visual health and has over 13 years of experience. It seeks to be a different kind of optical center with an innovative approach. It commercializes glasses brands such as Levis, Reebok and Ray-Ban
NONINVASIVE PROCEDURES BOOST COSMETIC TREATMENTS
FRANK ROSENGAUS Medical Director of Ultimate Médica
For plastic surgery procedures to become commonplace, there needs to be a cultural shift that allows people to talk freely about it, says Frank Rosengaus, Medical Director of Ultimate Médica. “In other countries, cosmetic interventions have become a sort of social event. Everybody talks about them openly. However, in Mexico we have a cultural barrier.”
Hoping to take advantage of the expected boom in cosmetic surgery specified by the International Society of Aesthetic Plastic Surgery (ISAPS), Ultimate Médica specialized in noninvasive aesthetic treatments and cosmetic plastic surgery. ISAPS ranks Mexico fourth in terms of its expectations regarding cosmetic treatment volume concentration. However, Ultimate Médica has not seen these hopes come to fruition.
“In other countries, aesthetic procedures have proliferated thanks to a cultural change. South Korea has become a mecca for plastic procedures, particularly Seoul as it attracts medical tourism from other Asian countries.” However, this change in South Korea did not come easy, says Rosengaus. “Important popular icons started talking freely about the subject, which changed society’s perception.”
Though a cultural change is necessary, it is also important to address the perceptions that people have about cosmetic procedures. “We need to limit the effects that exist when
these procedures go wrong,” says Rosengaus. Social media has played a key role in making bad procedures go viral. “In Mexico, there is a great deal of fear regarding lip procedures because of cases in the US where treatment results were not ideal. We spend a lot of time explaining to people that these negative results are less than 1 percent of the total treatments.”
Controlling the negative consequences of these procedures might be difficult at times but Rosengaus says that adequate enforcement of existing regulations can go a long way.
“Governments are being more careful when defining who can do what. Whoever wants to perform these procedures needs to prove that they have the proper training and the necessary certifications,” he says. Mexico has proper regulations; the problem is enforcing them correctly, according to Rosengaus.
Technological improvements and making procedures easier could also provide a big boost to cosmetic procedures. Although new technologies can be more expensive as they penetrate the market, they become cheaper. “Cosmetic procedures are becoming more affordable; they are standardized and commoditized, which helps the market grow,” says Rosengaus. Noninvasive procedures will be the main drivers for growth in this market, he adds. “People do not want to spend time and money in recovery. They want procedures to be painless, fast, reliable and inexpensive.”
ENHANCED WELLNESS CAN BEGIN IN THE WORKPLACE
ROBERTO ESSES
Country Manager of Gympass Mexico
Q: What are the main advantages gyms get from allying with Gympass?
A: Gympass is the best way to attract corporate users. We understand companies have many needs and nuances, which makes closing deals with them difficult for individual gym owners or managers. That is why we have a dedicated team focused on this, while our partner gyms and studios focus on providing their best service and retaining their new users. We are able to create a win-win partnership because companies invest in the Gympass program while we provide a large influx of new corporate members who benefit from attractive prices. Therefore, our fitness partners benefit from more users and increased revenue through expanded corporate penetration. Approximately 1.4 billion people worldwide, equivalent to 28 percent of the population, are inactive and we are focused on these people. According to an internal study, 67 percent of Gympassers in Mexico were not members of any gyms or studios before enrolling in one of our plans, which means we increased the size of the market as a whole.
Q: How is Gympass increasing awareness of the importance of fitness among its corporate users?
A: According to WHO, physical inactivity is the fourthleading risk factor for mortality. In 2018, it launched the Global Action Plan on Physical Activity (GAPPA), a plan to help countries scale up policy actions to promote physical activity. Gympass was invited to join one of these multisectoral workstreams. This group has held a few meetings already and will meet again in 2H19. The objective is to discuss how we can help increase levels of physical activity globally. Everyone knows exercising is good but almost no one does it. Why? We have learned that it is because there are several emotional and physical barriers that make it hard for people to become active.
Q: How will Gympass’ recently raised US$300 million in funding influence the company’s expansion plans?
A: This funding will bring expanded benefits to global clients, users and fitness partners across our threesided marketplace through companies, gym partners, technology, people and expansion. We want to double down our approach as a B2B benefit, helping our clients
to revolutionize how inactive employees engage in physical activity, driving lasting behavioral change. We will continue to offer universal access for all employees across client corporations to engage in a physical activity program that drives employee engagement, improves individual performance, attracts the best talent and enables business success.
We also want to identify continuous opportunities with gyms and new partners to accelerate the fitness industry’s growth, resulting in new active users for our global fitness partners. When it comes to technology, we want to make major enhancements to our product and technology for a more personalized user experience, making it easy and motivational for employees to become active. We are also improving customer experience by enhancing our portals, dashboards and user insights. Gympass will also invest in new initiatives to attract new talent, as well as retain the highest quality people within our team. Lastly, this investment will fuel our expansion into new geographic locations on the Gympass roadmap.
Q: How can a healthcare model that fosters prevention benefit Mexicans?
A: ‘Prevention is better than a cure’ is a well-known saying. The truth is that preventing diseases is healthier, and much cheaper, than curing them later. We have already noticed this among some of our clients who affirm that there needs to be a holistic approach to well-being, integrating mental, emotional and physical health. We decided to focus on corporations because we believe companies are in a unique position to foster prevention by encouraging a more active lifestyle. Companies have massive reach, influence and credibility with their employees and they can also create a social context in which good experiences are shared within the company.
Gympass is a global network that groups gyms and academies under one membership and single platform. It is present in 7,960 cities and has 500 gyms and sport centers with more than 899 physical activities and classes registered
THE IMPORTANCE OF WELL-DEVELOPED CHANNELS FOR COSMETICS
ALEJANDRO LÓPEZ Director General of IM Natural
Q: What are the main challenges IM Natural is encountering given the country’s economic and political landscape?
A: The cosmetics industry develops indispensable goods. Both men and women use these treatments to enhance their physical appearance and to consequently feel better in terms of self-care and self-esteem. The industry is in a latent state like other economic and industrial activities in the country due to the existing uncertainty resulting from the new administration’s public policies. The industry is experiencing an economic deceleration rather than a recession. Our sales have decreased and the entire cosmetics sector is contracting. This economic situation is a detriment to our providers because lower production represents diminished demand for supplies and raw materials. This situation eventually transforms into a cycle and we need greater trust in the government to handle public policy more efficiently.
While our most important market is self-service stores, they are also suffering from this economic deceleration and decreased demand. We need to restructure our sales strategy to find new ways of negotiating with our main clients. We must also focus on adjusting our company’s industrial engineering to manage our expenses.
Q: How has your company expanded its sales channels?
A: We are expanding our exports and our manufacturing process. Final consumer purchases have been affected and regardless of our business plan, we have been forced to accelerate the processes for finding new distribution channels apart from those impacted by the economic uncertainty. We manufacture and brand products for other clients aside from our own brand. Exports are also important for us because the Mexican banking system takes this kind of business activity into account when making certainty assessments. Our main foreign markets are the
IM Natural is Mexican manufacturer of innovative products for the cosmetic and naturist industry for the care and integral beautification of the body. It manufactures makeup, skincare, hair care and body care products
US, Guatemala, Colombia, Australia, Ecuador and Spain, to which we ship around 5 percent of our total production.
Q: What products do you manufacture for other brands?
A: We both manage and are direct distributors of some product licenses for other brands like Hello Kitty and Hot Wheels for children, and Chivas and America for soccer fans. We are working toward the acquisition of more licenses as they have become an interesting development for our company.
Our distribution channels are well-established and attractive for foreign companies because they are aware of our reach. This distribution is carried out through supermarkets like Walmart, Chedraui and pharmacies like Benavides. Our clients know that they will be able to reach their market through our products. Despite managing the makeup segment, we have also been managing other markets for drugstores and naturist retail for almost 30 years. Department stores like Liverpool and Palacio de Hierro are also have us on their radar, even though they are not our primary market.
Q: What role will online distribution channels play in your business in the short term?
A: These channels will grow in importance by helping us create product awareness and reaching our final consumer. While we benefit from word of mouth, one of our plans is to enhance our marketing efforts despite the tradition of cutting expenses in an economic crisis. We need people to know our product more than ever.
Q: What are your plans for targeting men?
A: We launched a line for men four months ago. The products that have been most successful in this market are moisturizing and shaving creams, and products for beards and mustaches. Our company is now undergoing a knowledge development phase so we will probably wait to see the public’s reaction before launching another product. Overall, our company’s most important product is eyelash mascara. Our brand is categorized as one of the most important mascara brands despite not being distributed in the market’s niche points alongside L’Oréal, Maybelline and MAC.
FEMALE EMPOWERMENT DRIVES COMPANY SUCCESS
MAGDALENA FERREIRA-LAMAS
Vice President and General Manager for the Group of North Latin American Markets (NoLA) of Avon
Q: What makes Avon’s business model so successful in the Mexican market?
A: We started with a few products and only a small number of representatives and now, 90 percent of our beauty products enjoy a leading position in the Mexican market. When people think about beauty, they think about Avon. But our company is not just about beauty, it also stands for empowering women. For over 130 years, our model has been to sell products through independent female representatives, which has been very successful in Latin America. Having a conversation with another person about beauty and tips is very effective among Latin women. We give our representatives training but allow them to follow their own business path. Making their own choices and giving them their own income has transformed their lives. Today, female empowerment is fashionable in every company. For us it has always been our purpose.
Q: What role has your plant in Celaya played in growing your presence in Mexico?
A: At our Celaya plant we manufacture products for skin care, body wellness, makeup and fragrances. It is the secondmost important plant in the world for Avon. These products are exported to different countries in Latin America. We still develop our products at our site in Suffern, New York. However, we recently inaugurated an R&D laboratory in Celaya. It will focus on developing products based on local market dynamics, trends and consumer preferences. The team will develop and test products to ensure they meet Avon’s safety and quality standards, while also meeting the Mexican consumer’s expectations and desired benefits.
Q: How have you adapted your offering to trends in the beauty market?
A: We see interesting trends among Mexican women, who focus on internal and external beauty. Makeup boosts confidence and remains very fashionable. In 2017, we launched a new brand of makeup called MARK, with new colors, such as brown, violet and blue. These are designed to offer a choice for women of all walks of life and ages. The brand adapts well to the taste of Mexican woman, giving a wide variety of options for everyday use. There are also
emerging ingredients for hair care. For example, we launched a shampoo with Chili extract, specifically for Mexico.
We also try to offer affordable prices. One example is the second edition of Avon Life, a premium quality fragrance launched in an alliance with KENZO. Though the average retail price of such a product is MX$1,200 (US$63.2), we can offer a fragrance of the same quality at MX$500 (US$26.3).
Q: How is Avon’s philosophy of “Beauty with a Purpose” reflected throughout its value chain?
A: Last year, we tested the work climate at our plant in Celaya. Approximately 92 percent of the people declared that they were very proud to work for Avon, which shows the level of commitment our people have with the company. Thanks to our empowering business model, people at every level of the company feel like they have an impact on society. Many of our representatives do not have a higher education and did not have access to an income. Their love for the job translates into quality and dedication. We do have elements we need to improve. However, we continue to work on the journey of these representatives, always adapting to new opportunities and challenges.
Q: Avon supports causes related to breast cancer and domestic violence against women. How have these causes been addressed in Mexico?
A: We have an active role in preventive action against breast cancer among the Mexican population. In our brochures and videos, we always include topics related to our foundations and how people can offer their support. We participate in events in Mexico City and the Bajio and we have made frequent donations to organizations involved in this area. We also approach young breast cancer survivors who get the opportunity to be mothers despite their treatments.
Avon is the fifth-largest beauty company in the world with more than 130 years of experience and 63 years in Mexico. Avon’s recognized products and brands include: ANEW, Avon Color, Avon Care, Skin so Soft and Advance Techniques
POSITIONING BIOTECH FOR WELLNESS
ANTONIO CRUZ CEO of Kurago Biotek
A growing segment of the population is favoring natural alternatives that promise to increase overall wellness and health over traditional pharmaceuticals, says Antonio Cruz, CEO of Kurago Biotek. “We are developing food fermenting agents for different types of products, such as smoothies, juices or jelly. The idea is to offer natural, regional and seasonal foods that stray from traditional pharmacology.”
Kurago Biotek, a Mexican biotechnology company that strives to improve health and nutrition through functional foods and innovation in the field of beneficial bacteria, has been in the market since 2004. In 2017, COFEPRIS finally recognized the unique niche in which it operates, says Cruz. “The category of functional foods, in which we operate, is not regulated in Mexico as it is in other places like Japan or Europe. However, in 2017, after several attempts, we were able to convince COFEPRIS to open a new category of biotechnological foods that encompasses non-alcoholic ferments. That is where we have accommodated our last four products.”
Although functional foods are still in the process of gaining traction with Mexican consumers, Cruz says that pharmaceutical companies in Europe are taking advantage of the growing number of people who do not like taking antibiotics and look for a preventive way to restore their health to add new categories to their product portfolio. “It is becoming more common for pharmaceuticals to generate new divisions such as medical nutrition,” he says.
The challenge that functional food companies face in Mexico lies in being able to explain in a simple way what it entails. “It is a very complex topic with many layers,” Cruz says. Although the functional foods trend in Mexico remains a small niche, Cruz says that Sanfer has become its largest client. “We expect functional products to become the unit within Sanfer’s structure that starts to gain ground in the health prevention and wellness area.”
While pharmaceutical companies have yet to embrace this trend in Mexico, Cruz says that academia has taken the lead and is constantly developing research in this area. UNAM, Tecnológico de Monterrey, University of Guadalajara, the Metropolitan Autonomous University, the National Polytechnic Institute, the CIATEJ Jalisco and the Research Center for Alimentation and Development (CIAD) are involved in related research and are cooperating with Kurago Biotek.
Cruz acknowledges that there is still a long way to go for its products to reach mass consumption, but the integration of the wellness concept in stores such as Sanborns and Farmacias San Pablo is helping the company to market its products more effectively. “Farmacias San Pablo is developing a new format for preventive health and wellness in which it will display products that are oriented toward nutrition but that have a technological value. Sanborns is launching a similar project and Farmacias del Ahorro is also in the process of generating a similar scheme.”
FIGHTING BLINDNESS THROUGH CONSTANT INVESTMENT
ALFONSO VENTURA Director General of APEC
Q: How have APEC’s operations evolved in Mexico?
A: We are a nonprofit, privately-run organization focused on eye care. Our mission is to help those who have limited resources to gain access to the best treatments. We founded APEC, Hospital de la Ceguera in Mexico City 101 years ago and its operations can be divided according to three pillars. The first is clinical care. We offer approximately 230,000 consultations a year, conduct 160,000 diagnostic studies and complete 11,000 surgeries. We seek to have the most advanced technology. Our second pillar is education. We are a teaching hospital, meaning we are a place where the next generation of ophthalmologists is trained in 13 different specializations. The last pillar is research. We have a center where we work to develop the science of visual health and contribute to new technological development. Combining these three pillars, we are an institution by society for society with a mission to improve visual health in this country.
Q: What is the course structure as a teaching hospital and what role is technology playing?
A: We teach three years of ophthalmology, followed by one or two years of specialization in a particular area. Our training focuses on providing students with the skills to diagnose and treat patients effectively. Over their five-year experience, we hope students develop strong social values and implement them in their own career. Because of our long history, a large percentage of ophthalmologists in this country received training at our hospital. Many still have strong ties to us and many have continued to work at our hospital.
We invest in the newest technology to give our doctors the best tools. We now have the ability to use 3D visualization technology for retina operations. We are also looking at data analytics and artificial intelligence to improve our diagnostic process. Knowledge in healthcare is constantly changing, so we must be mindful of what is happening around us and seek proper partnerships. We have exchange programs with world-class institutions, such as the Floridabased Bascom Palmer Eye Institute, to foster a continuous exchange of expertise.
Q: How would you describe the general status of visual health in Mexico?
A: There is still a lot to do in terms of visual health in Mexico. One condition closely linked to blindness is diabetes, which is a growing problem in our population. Our biggest priority is to give as many people as possible access to eye care and treatment. About eight out of 10 people could have their eyesight problems resolved if they went to see an ophthalmologist.
Cataracts are the primary cause of reversible blindness in this country. Two years ago, to mark our 100-year anniversary, we took action to drastically reduce the costs of our cataract treatments. We reinforced this effort through a campaign called Adiós Catarata (Goodbye Cataract), which set specific targets regarding the number of surgeries we want to do. We have also decided to open new clinics for the first time in our history to bring care closer to our patients. We are starting in Mexico City and gradually moving on to other states. We also have been working with partners to make 2020 the year in which every Mexican goes to the ophthalmologist at least once.
Q: What are APEC’s main goals for 2019-2020?
A: We are working on opening the first pediatric clinic for retinal treatment in Latin America at our hospital. This will ensure that 2,000 children a year receive treatment to cure their blindness from doctors who went abroad to receive special training. The second goal is to open our first clinics in new locations to cover each area in Mexico City. Our mission will always be to provide the best ophthalmological care to people with the fewest resources. This will require continuous investment to make our treatments accessible and keep them at the highest standards.
The Association to Prevent Blindness in Mexico (APEC) offers patients with limited economic resources medical and surgical ophthalmological care of the highest quality. The association also organizes campaigns to raise awareness about visual health
LEGAL LANDSCAPE
New governments strive to introduce new ideas and tackle what they perceive as gaps or weaknesses in the regulatory framework. With the advent of the López Obrador administration, the health sector has witnessed the revocation of cannabis permits, the re-organization of the medicine supply chain, openness to international companies to participate in tenders and other legal changes that are pushing companies to find new ways to do business while discovering new opportunities to tackle. As these changes consolidate, national and international companies will require solid understanding of the regulatory environment that only legislative experts can provide.
This chapter will analyze the coming changes in the regulatory landscape and what companies must do to adapt. Lawyers, consultants and authorized third parties explain what this environment entails and how companies can benefit, especially if they ground their strategies in deep knowledge regarding the country’s regulations.
CHAPTER 12: LEGAL LANDSCAPE
258 VIEW FROM THE TOP: Ignacio García-Tellez, KPMG in Mexico Fausto Ávila, KPMG in Mexico
259 VIEW FROM THE TOP: Ernesto Algaba, Hogan Lovells in Mexico Cecilia Stahlhut, Hogan Lovells in Mexico
260 VIEW FROM THE TOP: Bernardo Martínez-Negrete, Galicia Abogados Lisandro Herrera, Galicia Abogados
261 VIEW FROM THE TOP: Fernando Becerril, Becerril, Coca & Becerril
262 VIEW FROM THE TOP: María Del Mar Deza, ATP
263 VIEW FROM THE TOP: Alejandro Luna, Olivares
264 VIEW FROM THE TOP: Laura Padierna, LEI
265 VIEW FROM THE TOP: Jaime Castro, BPF Part of QbD Group
266 VIEW FROM THE TOP: Carlos Pérez, NYCE
267 INSIGHT: José Alarcón, Anáhuac University
268 VIEW FROM THE TOP: Martha Valadez, TAAP
269 ROUNDTABLE: What are the Main Changes You Expect in the Regulatory Framework?
INDUSTRY CHANGES DEMAND NEW CORPORATE STRATEGIES
Q: How is KPMG helping its clients navigate the challenges and trends in the health industry?
IG: KPMG in Mexico has a global network of advisers and success stories around the world that supports organizations. We can provide information and consulting on best practices that have led to strengthening health systems worldwide. KPMG in Mexico has generated solutions that help in terms of strategies, compliance, administrative-legal issues and advice on analytical data models to streamline supply chain processes.
FA: Another important issue for the health sector is pharmacovigilance, which is in the process of changing due to the new structure for consolidated purchases. Players in the pharmaceutical sector will have to redefine their roles to ensure that medicinal safety is not affected.
Q: How does KPMG support its customers in the process of launching new products?
IG: KPMG assesses the company’s situation, analyzes the population that it is planning to reach and understands the public policy contexts, trade risks and corporate goals. Afterward, a detailed analysis on the available products in the market and the organization’s own portfolio is performed, highlighting how the new product will compete against similar solutions in terms of price. Over several sessions, KPMG and the company define an access and commercial strategy for the product, considering the technical, scientific, corporate, marketing and legal aspects that surround its release. In the end, we deliver a report that companies can use to effectively communicate the value proposition of the new product.
Q: What are the challenges and opportunities that KPMG sees for companies in the healthcare sector?
FA: The country’s epidemiological transition allows us to know which diseases are more prevalent and those that
KPMG is a global network of professional services firms providing audit, tax and advisory services in more than 153 countries and territories across the world. It has over 207,000 people working in member firms and it belongs to the top 4 global consulting firms
are increasing in incidence. This will continue to be an important factor in the state of public health. Although it is unfortunate that there is a prevalence of such complex diseases in Mexico, this opens the door for the pharmaceutical sector to develop increasingly innovative therapies that improve people’s quality of life. We see an opportunity to improve hospitals and clinics that already have a staff, equipment and facilities of the highest quality. Opportunities will increase as different sectors generate incentives to attract investment. KPMG sees the greatest growth potential in the hospital sector, especially with the boom in medical tourism.
IG: The insurance sector is another area of opportunity for the health industry. In conversations with KPMG, some companies have emphasized the need to generate more efficient and transparent payment models regarding hospital services and competitive fees with other providers such as laboratories. Considering that health expenditures are on the rise, the insurance sector will continue to be a key element to guarantee access to health services in Mexico. We believe that in the coming years, insurance will become a priority sector and a source of great investment attraction.
Q: What are your views on the development of the pharmaceutical and medical devices sectors?
IG: Previously, sales in the pharmaceutical industry were managed by distributors but companies must now think about having direct contact with the government. Meanwhile, data analysis within supply chain operations is becoming a key competitive tool in a pharmaceutical company’s ability to determine which products should be released to the market. It has become increasingly important for pharmaceutical companies to know what, where and when to sell to address patients’ needs.
FA: Regarding medical and pharmaceutical devices, it is vital for companies to have executives who are capable of interacting with different players in the health sector. Companies need professionals who know the technical, commercial and scientific language and who have the ability to generate advertising with both private and public parties.
Fausto Ávila Audit Partner Specialist in the Health Sector at KPMG in Mexico
Ignacio García-Tellez Director of the Health Sector at KPMG in Mexico
BIG DATA AMONG COMING GAME CHANGERS
Q: Which trends has Hogan Lovells identified in the Mexican healthcare sector?
EA: We have observed several trends, challenges and opportunities generated by the current business environment and the change of administration. There have also been changes in innovation within the industry and in the business of companies in the sector. Some trends that are widening are digital health, personalized medicine and regenerative medicines.
For instance, sharing information through different public and private institutions that use Big Data will allow the development of new access models for medicines, public policies and will eventually change the sector’s legal framework.
CS: The use of Big Data could even allow a better use of public funds. Proper use of the electronic clinical file will shorten wait times and reduce costs related to doctor visits. Technology is being used to simplify care in many different ways, from providing direct care through an app to personalized medicine. However, the more technology advances, the more we fall behind in regulation. For instance, regulation created four years ago no longer covers current technology. It will be a challenge for the new administration to create a legal framework for these new technologies.
Another important trend that will impact the healthcare sector in the following months is the discussion regarding the regulation of Cannabis and its use in Mexico.
Q: What regulatory changes would you recommend to reduce the prevalence and impact of counterfeit medicines?
EA: This is an issue that must be addressed by all members of the supply chain. It is also necessary that the federal government makes this issue a priority, since black-market medications place the general population at risk. While regulation concerning counterfeit medicine is clear, we need better enforcement through proper coordination of sanitary, customs and other authorities at all levels: city, state and federal.
CS: COFEPRIS is fully aware of the sale of counterfeit drugs through social networks but the council needs more resources to deal with these problems. It is also necessary to sensitize the general population about the risks of these medicines.
Food supplements also need to be addressed. These products are very popular among Mexicans but better surveillance is needed to guarantee their safety and efficacy. In Mexican culture, traditional medicine is based on herbal medicines so Mexicans often accept herbal supplements that, may offer no guarantees to consumers in many cases, as they are not sufficiently regulated.
Q: How is Hogan Lovells capitalizing on its 70 years of experience to help his clients address regulatory challenges?
EA: Our clients are now accompanied by specialists who guide them through each process. A period of change and uncertainty is looming and, although we cannot predict what is coming, we do know in which areas our clients will need help. Our role has changed in recent years. We must be highly proactive in the added-value services we provide our clients, as that will allow them to achieve their objectives within the legal framework.
CS: The new administration has expressed its intention to reduce the budget for healthcare, adding that the pharmaceutical industry must reduce the cost of medicines. This decision is part of the administration’s strategy to eventually provide free medicine to the population. This period will introduce challenges to the Mexican pharmaceutical sector as it will be affected by the extension of copyright protection for biotechnological medicines and the incorporation of new players. Taking into account this scenario, the industry should look for new opportunities, such as cannabis products and high-end products, services and technologies.
Hogan Lovells is an international law firm with over 40 offices and more than 2,800 lawyers around the world. The firm specializes in several different industries, including aerospace, automotive, consumer goods, life sciences and real estate
Cecilia Stahlhut Senior Associate of the Life Sciences Practice at Hogan Lovells in Mexico
Ernesto Algaba Partner of the Life Sciences Practice at Hogan Lovells in Mexico
SUPPORTING PHARMACEUTICAL COMPANIES IN AN UNCERTAIN CLIMATE
Q: How ready are the market and regulators for the potential legalization of cannabis products for medical and industrial applications?
BM: The proposed regulatory changes concerning marijuana remain in the initial stages but we believe its legalization, both for recreational and medical uses, will move forward because the party that backed the initiative has a majority in Congress. Many foreign companies from countries where marijuana is legal are already showing interest in this market and looking for ways to enter Mexico to eventually commercialize their products. The challenge is to establish public policy concerning marijuana use because its legalization will require the creation of awareness programs related to risks and addiction.
LH: Its legalization will lead to a larger offer of pharmaceutical products containing cannabis, which will create direct competition with current pharmaceuticals. Their entrance into the market will mean more options for patients. Cannabis products now fall into the psychotropics and narcotics categories in the General Law of Health.
Q: The new USMCA proposes increasing the timeline of intellectual protection for biotechnological products. What ramifications will this have if implemented?
LH: The current text of NAFTA 1994 states at least five years of protection for clinical data, including biological products; the text of USMCA increases this time to 10 years. This is a benefit for the original manufacturer to compensate for the great investment made to develop a new medicine. The scope of protection is not new, it has been there since 1994, therefore there should be no relevant impact on the local industry, since companies will have to continue generating their own clinical data.
Q: With the current sociopolitical challenges, what concerns do pharmaceutical companies have and how is Galicia Abogados supporting them?
BM: The main concern is legal certainty. Every company that works with the public sector requests legal agreements to be honored, especially for long-term contracts. The government is a key player in the acquisition of healthcare products. Given this new government’s tendency to revisit or re-open long-term contracts, we are assisting clients in understanding their legal alternatives and protections in case of changes in laws or early termination of such contracts.
LH: The new administration says that strengthening local manufacturing is a goal but it is unclear how it plans to do that. The industry does not want to return to the days when international companies had to establish a manufacturing facility in the country. This is problematic for international companies because the supply system has changed and international companies manufacture a product in one or two facilities for the rest of the world.
Q: Considering the uncertain climate permeating Mexican industries, how do you expect the health market to behave in the short term?
LH: The industry will continue growing in line with the demand for medication related to epidemiological trends, such as the diabetes and obesity epidemics. As a result, government programs that address these issues must continue, although we are uncertain of what shape these programs will take.
BM: We do not expect changes in pharmaceutical sales to the private sector as it is diverse with a broad range of consumers. This sector will continue along its current path as long as regulations concerning pricing, sanitary registration and import regulations do not change. In fact, the private market might continue growing as the population gets older because more medical services are required as people age. However, the uncertain climate is causing Mexican sovereign debt to become more expensive, which may eventually create a shortage in the federal expenditures budget and, therefore, an impact in sales to the public sector.
Lisandro Herrera Associate at Galicia Abogados
Bernardo Martínez-Negrete Partner at Galicia Abogados
Galicia Abogados is a Mexican law firm founded in 1994. In healthcare, it works with pharmaceuticals and medical devices companies and specializes in M&A, regulations for the sale, publicity and distribution of generics and patented medications
ENFORCE INTELLECTUAL PROPERTY RIGHTS TO CREATE ECONOMY OF INTANGIBLES
FERNANDO BECERRIL
Former President of the Mexican Association for the Protection of Intellectual Property (AMPPI) and Partner and President of Becerril, Coca & Becerril
Q: As the former President of AMPPI, what professional profile would you say AMPPI is looking for to gain a comprehensive view of the country’s needs?
A: What AMPPI has been looking for is to diversify its membership to get closer to the industry related to intellectual property. Almost all of AMPPI's members are lawyers from different firms that are also consultants on intellectual property, but we have few company lawyers. Including company lawyers gives us a broader vision in terms of what intellectual property is. Traditionally, we view intellectual property from a lawyers’ perspective but the industry as a whole analyzes the topic as it relates to protecting rights and obtaining a better return on investment. By broadening our membership profile, we broaden our vision and can start working on how to approach the topic not only from the side of protection but also from the side of profitability and generation of economic benefits as a result of all these innovative processes in R&D. This means that we analyze intellectual property not only from the legal protection side, but as an intangible asset to generate business.
Q: How does Becerril, Coca & Becerril contribute to achieving AMPPI’s vision?
A: We have worked with the industry for several years. In 2018, we acquired a civil law firm that expanded our offering beyond intellectual property to include corporate, civil, commercial and family law. Also, three years ago we founded a company called Nivel 72, which provides support and assistance specifically to newly-created businesses. Nivel 72 accompanies new businesses throughout the strategic planning stages, including the definition of a business plan. In the entrepreneurial ecosystem, entrepreneurs have a great deal of enthusiasm but lack operational fundamentals. The idea is to help entrepreneurs direct their focus so they can create a profitable and sustainable business.
In some cases, we have supported our clients in the commercialization process for their technology. We have a technology transfer office certified by CONACYT and we have helped many companies with the process of requesting and implementing public funds to generate results.
Q: What is the profile of the entrepreneurs that Nivel 72 likes to work with?
A: We have not defined a specific profile. If we were to work to a profile, many companies would be left out. However, we do have some minimum requirements. We conduct a technological evaluation, and in some cases, we even take on some of the risk while in others, we help them obtain public funds. We look for projects that are scalable and viable or that we perceive as interesting.
Q: What are the main challenges regarding intellectual property protection in the pharmaceutical industry?
A: The persistent challenge in the pharmaceutical industry is how to enforce intellectual property rights in Mexico. While companies might hold the patent for their products, the moment there is an illegitimate use of a patent, it is very hard to demand protection of rights. We have seen a reduction in the number of patent applications in Mexico from the pharmaceutical industry, which is the result of the perception that it is hard to enforce intellectual property rights.
There is a persistent idea that the violation of intellectual property rights only happens with movies and music. While it is true that piracy impacts many industries, pirated health products can be fatal. Medicines and food supplements in unregulated and informal businesses put people at risk and, unfortunately, there is no real and clear action to combat these activities.
Another topic that has come up recently is related to pharmaceutical products. There is talk of modifying patents and limiting the protection for certain pharmaceutical patents to make them more easily available to the population. We have to be careful not to disrupt what we have achieved in terms of protection of intellectual property rights, particularly in the health sector.
Becerril, Coca & Becerril is a Mexican law firm established in 1969. The firm specializes in intellectual property and provides consultancy services for patent applications for the pharmaceutical, chemical and electrical sectors, among others
SOLUTIONS THAT FIT CLIENT NEEDS
MARÍA DEL MAR DEZA
Former Director General of ATP
Q: What are the advantages of working with an authorized third party in advertising?
A: The main added value we offer is our consulting service. We are not part of the government; we are a private company working on solutions for our clients. We work according to the needs of our customers, advising them on what they can and cannot include in their advertising to ensure that they communicate correctly and efficiently the information they want to deliver about their products or services.
Q: Last year, you highlighted a lack of information regarding advertising processes. How does ATP see the situation now?
A: The process is improving but there are still obstacles that limit its acceleration. One problem is the lack of knowledge related to compliance with good advertising practices. Companies believe that if they have not been fined by COFEPRIS they are not obliged to regulate their advertising.
Autorización de Terceros en Publicidad (ATP) is certified by COFEPRIS to assist in the control of advertising of medicinal goods. It provides consulting on medical devices, supplements beauty services and procedures, health services and medicines
Nutritional supplements are subjected to the most advertising restrictions and those companies that try to regulate their advertising are frustrated by the limitations of what their advertising can and cannot include. It is a problem for COFEPRIS and the industry.
Q: What could be done to improve advertising regulations?
A: An anonymous reporting system allows those who detect deceptive advertising to report it to COFEPRIS but that is not enough given the volume of advertising. COFEPRIS would need a huge team to supervise all the publicity from the 16 segments it regulates. As a result, authorized third parties become the support that COFEPRIS needs to regulate advertising and allows the authorities to focus on other regulatory matters.
This year, we received a spike in requests for our services from beauty clinics that had been notified by COFEPRIS. When we reviewed the announcements, we realized that the clinics could not back up their advertising claims. There are aspects of advertising regulation that could be improved through synchronization with other countries because when companies arrive to Mexico they must undo their previous advertising and create new campaigns, which is very expensive.
INSURING IP THROUGH TRADE TREATIES
ALEJANDRO LUNA Partner litigation and Life Sciences Co-chair at Olivares
Q: How did Olivares enter the life sciences field and in what areas does it operate specifically?
A: Olivares was one of the first law firms in Mexico to have a team fully focused on the life-sciences sector. This department grew thanks to our experience in IP litigation, especially in the enforcement of pharmaceutical patents. Furthermore, there was a need to explore venues other than traditional IP proceedings to address actions such as removing infringing and substandard products from the market. This required expertise in the legal framework of pharmaceutical approvals. We are pioneers in several topics, such as patent term corrections of linked patents, invalid actions against marketing approvals that violate the Health Law and regulations, and regulatory or data package exclusivity.
Q: How can the industry protect itself against COFEPRIS’ delays in approvals?
A: For many years, delays were not a matter of concern in Mexico and we expect that during the current administration they will also not be an issue. However, there are some legal grounds and actions we can use to encourage authorities to comply with the terms provided in the law, international standards and treaties. There are international treaties, such as the USMCA, CPTPP and the Free Trade Agreement between Mexico and the European Union, which establish compensation mechanisms for unreasonable delays in regulatory approvals. Regardless of any current or future policy, Mexico has a strong legal framework for investment, innovation and production. International treaties will lead to changes in local law that will make Mexico even more attractive for innovative companies.
Q: What are the pharmaceutical industry’s main challenges regarding the regulatory and IP legal framework?
A: Based on the recent international treaties, there are many commitments made by the Mexican government to improve IP rights, for example the package of pharmaceutical patents. The most significant areas are patentable subject matter, regulatory protection, patent linkage and the compensation of patent terms.
The main challenge will now be to implement those commitments in the domestic laws. NAFTA included
the obligation to recognize data package exclusivity for over 25 years. However, there were no local laws or regulations in Mexico put in place to recognize and enforce these rights. Therefore, innovators were bound to file legal actions to obtain the recognition of data package exclusivity of innovative products. The implementation of the new IP rights would benefit all stakeholders in the pharmaceutical industry.
The IP law must be amended to create a venue of civil remedies for the violation of patents and trademarks, instead of having to wait for a final decision of infringement proceedings. There are suggestions to provide jurisdiction to the Mexican Patent and Trademark Office (IMPI) so that they can award damages. This will not work because as an administrative agency, IMPI’s authority will be questioned when awarding damages. Instead, jurisdiction should be provided to the Mexican Civil Courts, both federal or local, to analyze the violation of IP rights and award damages.
Q: How will the proposed modification to the Mexican Health Law to reduce the scope of the linkage system for pharmaceutical patents affect the pharmaceutical sector?
A: This proposal aims to limit a patent to its active pharmaceutical ingredient (API) and is a significant step backward in IP protection. Moreover, it is anti-constitutional and breaches international agreements, especially CPTPP. Regulations cannot be limited to one patent per product as the proposal suggests. The patent linkage system has proven to act as a deterrent to potential patent infractions. It is not a barrier to generics. Mexican negotiators fought for the patent linkage system during the negotiation of CPTPP and USMCA, and this recent reform proposal aims to erase all these efforts. Improvements in the patent linkage system could include assigning rights and obligations to interested parties, which are the patent owners and generics manufacturers.
Olivares is an intellectual property (IP) law firm that works with some of the world’s biggest brands. It specializes in areas such as patents, trademarks, copyright, IP and civil litigation, regulatory, administrative and constitutional law
FOSTERING INNOVATION THROUGH TRAINING
LAURA PADIERNA Director of the Biological Applications Business Unit at LEI
Q: What makes LEI the ideal partner for a company that wants to launch a product and needs to conduct specialized studies?
A: Our company has the ability to adapt its services to cover the necessities of the client. We add value through our logistics infrastructure, experience and knowledge of international and national norms. We always put our client at the center of our processes. An important characteristic of our company is that we have a highly skilled team with expertise in diverse fields.
Q: LEI was created to offer technological solutions to pharmaceutical and biotechnical companies. What are the main challenges these companies encounter in Mexico?
A: An important challenge is to unify the sector and have a stronger voice to express the needs of the sector to relevant authorities. The conflicts of interest that exist among decision-making entities also need to be resolved. However, we are pleased to see that COFEPRIS is taking action in this area. Conversely, there are many companies in Mexico that are not making significant investments or taking risks to develop new products, which are also aggravated by conflicts of interest. There needs to be an accurate analysis of how the T-MEC negotiations are going to affect the manufacturing of generic medications and biocomparables; for example, in the area of patent expiration of innovative medications.
Q: What is LEI’s most recent success story in Mexico?
A: In 2017, after the earthquake in Mexico City, there was an urgent need for a medication used to treat tetanus. At the time, trials were being carried out on animals. Given the urgency, we developed a method that was able to compare the medication against a standard to determine its effectiveness. The development and validation were reached in a shorter period than usually required to complete animal testing, allowing the medication to reach those affected by the earthquake.
Laboratorios de Especialidades Inmunológicas (LEI) is an authorized third-party company that offers innovative studies on quality control, specialized studies, stability protocols, veterinarian services, clinical analysis, R&D and more
Q: What actions is LEI taking to strengthen the knowledge of its researchers and other professionals within its team?
A: LEI has a rigorous training program that includes formal exchanges with universities to study master’s or doctorate degrees. At the same time, every leader in a particular field will choose the areas that require further training to maintain the latest standards. We also conduct impact studies in collaboration with universities, specifically because we value the asset of scientific understanding from a business point of view. Those who participate in these programs attend conferences, collaborate on the publication of articles and acquire corresponding degrees. We always encourage our employees to participate in courses, events and conferences in their respective fields to ensure that they stay up to date with the latest developments. One of our strengths is how we translate this new knowledge into the further improvement of our services and the creation of new services.
Q: Which recent developments in the field of pharmaceutics and biotechnology have presented the most opportunities for LEI?
A: One of the products of our collaboration with universities and companies was a cellular therapy for the treatment of laminitis in horses. There is no effective treatment for this disease, other than palliative medications that temporarily ease the symptoms. Our proposal is a therapy that lessens the symptoms by about 80 percent. With three applications, the horse can return to an active life without suffering pain. With the help of partner suppliers, the proposal was developed by Mexican scientists who used our installations to optimize it.
Q: What are the main international trends that are changing the pharmaceutical and biotechnological industry?
A: There are advanced therapies including gene therapy, cellular therapy, tissue engineering and combinations of these. These are more personalized and do not have as many secondary adverse effects as traditional treatments. In the area of development and quality control of cosmetics, medical devices and medications, we are seeing the substitution of animal testing with in vitro methods. We are looking at increasing the use of organoids for the testing of medications that are in development.
REGULATORY PARALYSIS HINDERS TECHNOLOGY ADOPTION
JAIME CASTRO Director General of BPF Part of QbD Group
Q: What trends does BPF, Part of QbD Group, perceive in the health sector and what regulatory concerns could arise from these trends?
A: We are witnessing technology trends such as AI, virtual reality, nanotechnology and additive technology, as well as Advanced Therapy Medicinal Products (ATMP). CONACYT has an area in Guadalajara in charge of developing these new therapies and so far, it has delivered good results. Effective ATMP research could pave the way for the implementation of other technologies in the country related to biotechnology and genetics therapy, among others.
QbD Group is leading the charge in the research of these new technologies, especially in ATMPs. We have developed a partnership with Antleron, a company that specializes in the development of gene therapy and microprocesses for these therapies. Our partnership focuses on Cell by Design (CbD), a cloud-based software platform that facilitates scalable, cost effective and sustainable ATMP process development and disruptive capsules that work as micro factories that produce genetically-manipulated cells. Being a genetics-based therapy, patients have a cell-generating capsule specifically designed for them. By using CbD, it is possible to build a design space of the process and product and to apply cheaper parametric releases compatible with Industry 4.0 standards, including remote monitoring and control and efficient data capturing and storage. This way of working facilitates process automation and allows for the implementation of machine learning methods and predictive modelling. We are exploring the possibility of introducing these new technologies to Mexico, either through a partnership with a local player or directly as new players.
Q: What should be the balance in terms of regulation for startups and for established companies?
A: The country lacks a long-term vision that makes technology the cornerstone for industry growth in pharma, and in healthcare in general. There are very few technologybased health startups in Mexico and unfortunately, the government and regulations have always treated them as if they were larger and consolidated companies, which does
not work. We need to evaluate the risks of the technology used by startups and it might even be necessary to put more controls at a technical level to ensure the quality of the products these startups are producing. However, putting up regulatory barriers only discourages the development of new technologies.
Regulatory changes must be accompanied by a longterm country vision. Technology is always one step ahead of current processes and regulations, so new rules must encourage technology development. CONACYT’s budget cuts make no sense because of that very reason.
Q: How has the industry reacted to changes in regulations and what can the government do to boost certainty among investors?
A: The way in which many government policies have been conducted has hindered the needed certainty for the creation of new businesses, employment and investment. We have seen cases such as pharmaceutical vetoes, which have not been cleared, while public declarations in newspapers without any evidence have generated losses for companies and has led to an uncertain environment.
At the same time, COFEPRIS is semi-paralyzed and its authorities have gone back and forth with some changes that have not convinced everyone in the industry. During past administrations, COFEPRIS had managed to create an image and strength that transcended the local market, garnering praise internationally. This helped to position Mexico as a reference point in healthcare, particularly in Latin America. However, these latest changes have put Mexico’s leadership position at risk, especially since there is no clear public policy of where we are going as a country. Having said that, I hope things will take a turn for the better in the coming months.
BPF Part of QbD Group, is a Mexican and multinational consultancy company that works on validation and good practices for the healthcare sector, particularly in pharmaceutical, medical devices, logistics and biotechnological areas
THIRD PARTIES CAN ALLEVIATE PRESSURE ON GOVERNMENT
CARLOS PÉREZ Director General of NYCE
Q: As an authorized third party, what is your relationship with government regulators?
A: We interact with many government regulators, although the particular body depends on the sector. In health, COFEPRIS acts both as a regulator and as an inspection unit and we have operated according to its rules for many years. In some areas, they remain the only authorized body for certifications. We hope the government will soon open up these areas to authorized third parties.
Q: How could new government policies help NYCE broaden its service scope?
A: Due to the restrictions the government places on third parties, it is hard for companies like us to grow beyond their niche. Luckily, we are part of a bigger group with different business lines. It is my understanding that this government wants to make its spending more efficient. This could be an opportunity for the private sector to take on more duties that have been traditionally assigned to the government. We have the team, the facilities and the experience to expand in various areas. COFEPRIS has opened up several areas to smaller new players, although not all private parties. This has limited competition, which I consider a wrong approach.
Private parties can do more professional and elaborate work. We can broaden our portfolio to new factories, plants and laboratories in all kinds of industries. We could even audit our own competitors in the industry. Moreover, many pharmacy networks are in the process of expanding but only COFEPRIS is authorized to inspect these companies.
Q: How do you handle the potential conflict of interest that arises from having other commercial operations?
A: It is important to maintain full impartiality in our work. For this reason, we will never produce any products in areas where we also conduct inspections. In this business, upholding a
NYCE is one of the largest authorized third parties in Mexico. It supports companies in the certification of electronics, medicines, medical devices and food labels. NYCE has operated as a verification unit for 21 years
reputation of integrity is very important. There have instances in the past been where we have encountered bad practices during our inspections, such as falsification of certifications or cheating during tests. The Mexican Accreditation Entity has a specific area that monitors and addresses these practices.
Q: How are your operations distributed across the country?
A: We have established branch offices in Mexico City, Tijuana, Ciudad Juarez, Monterrey and Guadalajara in line with our clients’ demands. We are now looking at the southeast. In Cancun, we already have a small presence that caters to the tourist industry. We inspect hotels, restaurants and other service establishments. If we were to start inspecting and certifying pharmacies, we would need to shape our infrastructure beyond just offices. In that way, we could cover the whole country.
Q: What effect do quality control and vigilance have on the pharmaceutical industry?
A: COFEPRIS has made a good effort to open up the market and attract more players. It has stimulated more production of medicines and greater product diversity, which has increased medicine access for the entire population.
Pharmaceutical is a strong sector. It continues to innovate, introducing new technologies, equipment and plants, which means it also requires continuous inspection and recertification. Maintaining high-quality controls helps the whole industry advance, allowing it to capitalize on the potential to export to international markets.
Q: What are your growth expectations for authorized third parties in the next 18 months?
A: There are already several players in our line of work; I am not sure if there is space for more. Most authorized third parties cover around 1-2 percent of the market. We are on the larger side, with approximately 3 percent of the market. This year, our goal is to grow 20 percent in size and increase our penetration by 2 percent. We have seen favorable signs in 1Q19 toward reaching this goal and we are certain that even though we will not become the biggest player, we will further strengthen our position.
THE SIX FACES OF HEALTHCARE
JOSÉ ALARCÓN
Associate Professor Leadership in Healthcare Institutions at Anáhuac
University
The Ministry of Health wants to compensate the lack of health coverage at public institutions and provide healthcare access to those not affiliated with an existing program. However, in analyzing the government’s proposal, José Alarcón, Associate Professor Leadership in Healthcare Institutions at Anáhuac University, sees two main problems that could complicate the success of the initiative.
“Currently, around 20 million people have no access to health services. So, the first challenge for this government is to locate these people and then discover what is the best way to affiliate them with its new program,” says Alarcón. The second challenge is the health budget, which appears to be insufficient to cover the cost of adding 20 million new affiliates to the system. “Today, 49 percent of the affiliates consume more than 60 percent of the health budget, so adding more people could become financially critical,” says Alarcón. If IMSS’ per capita expenditure of MX$5,860 (US$307) is multiplied by 20 million new affiliates, it would result in an extra budget requirement of about MX$120 billion (US$6.3 billion). This is added to the cost to cover existing affiliates, which totals more than MX$397 billion (US$20.8 billion), while the current budget for healthcare services is MX$602 billion (US$31.5 billion).
Alarcón emphasizes the importance of combining qualitative and quantitative indicators to understand how healthcare services are performing among the population by applying the innovative Online Analytical Processing (OLAP) cube, which performs complex multidimensional analysis of data. In this case, it would be a Cube of Health. “The idea is to use the Cube of Health to understand the six dimensions that affect healthcare in Mexico and how the public sector can reach its goal of universal healthcare.
The cube shows and explains how the health system is a multidimensional matter that requires various solutions from different angles,” he says. The Cube of Health could help the government and the industry understand the
issues that are challenging the health sector. In this analysis, the way the government sets its objectives and how it measures them will be key to ensure the health system’s success. “Qualitative objectives are as important as quantitative objectives because these show how long people are living and what their quality of life is like during those years,” he says.
President López Obrador’s National Health Plan establishes a series of objectives to contemplate the health of Mexicans in a more comprehensive manner, establishing a preventive approach and considering indicators such as socioeconomic deficiencies, nutrition and physical activity, which would be in line with the proposed Cube of Health analysis. “It is a more integral health model than before,” says Alarcón.
In addition to having indicators to measure objectives and being aware of the challenges ahead, Alarcón believes it is important for the government to follow certain steps and take care of its processes to ensure success. “The first step is to have transparency and a clear idea of the current state of the infrastructure and conditions in public health,” he says. “The next part of the process is to create a public-private network of healthcare providers to maximize coverage in Mexico. If successful, people would be able to go to any public health institution two or three years after the network’s implementation.”
Once the healthcare network is open to the entire population, the government’s focus could move from infrastructure to healthcare provision. “The immediate objectives would be to increase healthcare quality and coverage, while implementing a patient-centric approach to make sure Mexicans have an integral model of attention. If the government understands that the health system is a multidimensional matter, as illustrated by the Cube of Health analysis, then it will achieve or at least move toward universal access to healthcare,” Alarcón says. “A holistic approach to healthcare can provide multiple and integral solutions that will eventually lead Mexico to achieve a system like that in most developed countries.”
CONSIDERATION OF COMPANY CIRCUMSTANCES CAN HELP IMPROVE PUBLICITY REGULATION
MARTHA VALADEZ Director General of TAAP
Q: How have authorized third parties in advertising impacted the health industry and its patients?
A: When COFEPRIS opened the door for authorized third parties to participate in advertising-related topics, it eased authorization procedures for the entire industry. The industry relied on COFEPRIS to do all procedures and review all documentation. If a company missed a document or had an error, it had to start the process from scratch. Authorized third parties have become the middle point between the industry and COFEPRIS by allowing companies to review their procedures and ensure everything is in order. The main advantage of hiring an authorized third party is that all the procedures can be done online, helping save money and time.
Q: How does TAAP differentiate from other authorized third parties in advertising?
A: TAAP offers personalized attention and tailor-made solutions. The company reviews each project from the very beginning when contacted by a client and has a team fully trained in health services and medical devices. Most of our clients are in the health industry, in comparison to other authorized parties that have a stronger presence in the alcoholic beverages and food industry.
Q: What are your priorities as new Director General of TAAP?
A: TAAP’s priority is to focus on providing the best customer service. The company wants to continue improving its services based on official quality regulations and will complement its service with an ISO Certification in 2020. The certification is going to make TAAP an even more trusted and quality-oriented authorized third party. Today, TAAP has a high-security vault that it uses to safeguard its clients’ information; this technical area is fully isolated and entrance is only permitted by fingerprint scan. Moreover, all our certifiers are forbidden to access any type of technology and their computers lack USB ports and Wi-Fi connection.
Tercero Autorizado Como Auxiliar en el Control Sanitario de la Publicidad (TAAP) is an authorized third party focused on sanitary advertising. The company offers services to the health and beauty sector and food and beverages, among others
Q: What is TAAP’s strategy to succeed in the industry?
A: TAAP works with companies of all sizes. However, the secret behind TAAP’s success is targeting small companies and entrepreneurs that cannot afford expensive solutions. The company believes young people are going to be major gamechangers in the health sector; we are supporting entrepreneurs by providing tailor-made services. TAAP reaches potential customers through forums, events and expos, as well as through social media. However, the company has found that the concept of authorized third parties is still incipient and many people are unaware of the regulatory procedures that must be followed in the health sector.
Q: María del Mar Meza, Director General of ATP, told us COFEPRIS should implement fines depending on the size of the company. How would this affect small companies?
A: The General Health Law establishes that fines in advertising should be based on the circumstances of the fault. So, before issuing an infraction, the law considers the socioeconomic condition of the infracted, probability of recidivism and the circumstances in which the infraction happened. However, it is true that authorities need to improve their evaluation of socioeconomic conditions because most of the times they apply the same fine to all, regardless of the size of the company. In that case, a big company does not see a big impact on its budget, but for small companies and entrepreneurs this could mean bankruptcy.
Q: What are TAAP’s growth plans for the near future?
A: During 2019, the company would like to position TAAP as an authorized third party specialized in health services and in 2020 to achieve the ISO certification. This would increase trust among clients and bolster our strength in the market.
More companies have reached out to us to seek advice on how to make the best out of the current uncertainty. TAAP is helping companies to navigate the procedures with COFEPRIS and the industry. The biggest opportunity for TAAP are those pharmaceutical companies whose regulatory departments would normally collaborate with COFEPRIS.
2018 was a year of change in Mexico due to federal and state elections. A new government is implementing changes at all levels as newly appointed representatives take charge to achieve their objectives in healthcare. During this period, national and international companies will require a solid understanding of the regulatory environment, which only legislative experts can provide. Mexico Health Review spoke with lawyers, legal experts and consultants on the coming changes in the regulatory landscape and what companies must do to adapt to them.
WHAT ARE THE MAIN CHANGES YOU EXPECT IN THE REGULATORY FRAMEWORK?
Several factors impact the local healthcare environment. Changes have been made to public tenders of pharmaceuticals, imposing new requirements that do not encompass the health and the pharmaceutical industry systems in Mexico. For instance, the Mexican government now forces participants to have marketing authorization, which means only the manufacturer and not the licensee or distributor may participate in the public tender. Most manufacturing companies do not have the infrastructure to participate in the tenders themselves, causing shortages and uncertainty in tender processes. There is also a fear that players from countries with no free trade agreement with Mexico will enter the bidding process with products that may not fulfill regulatory standards. The public and private sector must work together for tenders to run smoothly and to ensure universal coverage.
Companies must be fully aware of the regulatory and economic changes in Mexico brought by the new administration and the new USMCA so they can react accordingly. This is a challenging time but also one of many opportunities for businesses. USMCA will extend copyright protection for biotechnological medications, which will impact biosimilars. Considering Mexico’s economy and its small budget for healthcare, these changes in patent law might have an impact on the health sector’s budget. The president is already developing a strategy to negotiate and pay for medicines. Hogan Lovells can capitalize on its experience to support clients as business models become increasingly complex, but also in the launching of innovative medications, M&A, compliance and foreign trade.
The country’s epidemiological transition allows us to know which diseases are more prevalent and those that are increasing in incidence. This will continue to be an important factor in the state of public health, together with the need for the industry to contribute with more products and services. Although it is unfortunate that there is prevalence of such complex diseases in Mexico, this opens the door for the pharmaceutical sector to develop increasingly innovative therapies that improve people’s quality of life. We see an opportunity to improve hospitals and clinics that already have a staff, equipment and facilities of the highest quality. Opportunities will arise as different sectors generate incentives to attract investment. KPMG sees the greatest growth potential in the hospital sector, especially with the boom in medical tourism.
ERNESTO ALGABA Partner of the Life and Sciences Practice at Hogan Lovells BSTL
FAUSTO AVILA
Audit Partner Specialist in the Health Sector at KPMG in Mexico
ALEJANDRO LUNA
Partner litigation and Life Sciences Co-chair at Olivares
Hospitaria Hospital, Monterrey, Nuevo Leon
FINANCIAL & SUPPORT SERVICES
Increasing access to care remains one of the biggest challenges for the Mexican healthcare sector. Millions of individuals still have no access to the national health system and many face long wait periods and long distances to travel to reach the nearest clinic. Mexicans must also contend with a several-year delay between the launch of an innovative product and its arrival to the local market. Insurance companies and other financial entities see a burgeoning opportunity to make inroads in a country that traditionally spurns coverage. These players are also embracing their role in protecting those who have fallen through the cracks of healthcare coverage.
Financial & Support Services analyzes strategies to increase access to care through insurance and other financial methods. It will focus on how companies and their leaders are speeding up access to care by financially supporting the development and growth of healthcare companies and, with it, providing more people with access to healthcare.
CHAPTER 13: FINANCIAL & SUPPORT SERVICES
274 ANALYSIS: Public-private Alliances Increase Access to Healthcare
276 VIEW FROM THE TOP: Eduardo Lara, Reinsurance Group of America
277 VIEW FROM THE TOP: Luk Vanderstede, Bupa Global Latin America
278 VIEW FROM THE TOP: Juan Pablo González, Plan Seguro
279 VIEW FROM THE TOP: Pedro Pacheco, Prevem Seguros
280 VIEW FROM THE TOP: Paulino Decanini, SiSNova
281 VIEW FROM THE TOP: Steven López, Pacific Prime
282 VIEW FROM THE TOP: Raúl Jacobo, CHG-Meridian México
283 INSIGHT: Fernando de Obeso, Salud Fácil
284 VIEW FROM THE TOP: César Valle, IDOM
285 VIEW FROM THE TOP: Roy Bateman, Trifermed
286 VIEW FROM THE TOP: Liliana Mora, Síoltalife
287 VIEW FROM THE TOP: Leonardo Alves, Plan Wealth Management
289 VIEW FROM THE TOP: Ximena Hernández, Novostrategia
PUBLIC-PRIVATE ALLIANCES INCREASE ACCESS TO HEALTHCARE
The growing rate of chronic diseases affecting Mexicans will increase healthcare costs both for patients and the healthcare system. Under these circumstances, innovative cooperation strategies between the public and private sectors can be key to guarantee access to healthcare services
Mexico holds the dubious honor of having the second-lowest investment in healthcare as a percentage of its GDP among OECD countries. The country spent just 5.5 percent of its GDP in 2018 on healthcare, combining the efforts of both public and private healthcare institutions, according to the OECD. This percentage has remained unchanged since 2016 and is the lowest investment for the entire decade, even though the population and its health problems continue to increase.
Conversely, the country’s per capita expenditure on healthcare has steadily increased since 2010. That year, every Mexican was estimated to spend MX$6,988 in healthcare according to the OECD. By 2018, that number had increased to MX$10,410, led mainly by out-of-pocket costs, which are also the secondhighest out of all OECD members. The reason is that about 68 million Mexicans do not have social security, which leaves them unable to access public healthcare services and forces them to head to private institutions and pay out of pocket. In 2018, the Mexican Association of Insurance Institutions (AMIS) explained that 52 percent of health expenditure is made by the public sector and the rest is paid out of pocket and by private insurance.
“The worst way to finance healthcare is out of pocket because this only makes healthcare services more expensive,” says Eduardo Lara, Head of Health, Latin America at Reinsurance Group of America. A low investment in public healthcare has led to long wait times for medical attention and medication shortages at public hospitals. This, in turn, has led many to turn to private alternatives to finance healthcare services and medications.
This problem will only worsen as Mexico’s population ages due to the growth of chronic diseases. The current overweight and obesity epidemic, for example, affects 72 percent of the population and individuals are beginning to gain weight earlier. Today, IMCO says one out of every three Mexican children and teenagers is overweight. Obesity is linked to several chronic diseases including diabetes, cardiovascular diseases and several types of cancer. Altogether, these three diseases were responsible for almost half of the annual deaths in Mexico in 2017. As a chronic disease is a lifelong issue, it places a huge burden on the patients’ pocketbook, their family and the healthcare sector. In 2017, treating obesity-related diseases cost MX$240 billion (US$12.43 billion) and this figure is expected to increase to MX$273 billion (US$14.14 billion) by 2023, according to the Ministry of Health.
The country is also facing a population shift. Modern medicine has reduced infant mortality rates and deaths from infectious diseases, allowing individuals to live longer. In 1970, only 5.6 percent of the population surpassed 60 years of age. In 2017, this number nearly doubled to 10.5 percent. This complicates finances for the healthcare sector because healthcare expenses increase sharply with age. In its Focus on Health Spending report, the OECD explained that healthcare costs increase steadily as an individual ages but rise sharply after 55 years of age. The organization states that those between 65 to 69 years of age can represent from 10 to 16 percent of all healthcare costs, while those over 85 years old can represent from 15 to 67 percent of these costs depending on the country.
As a result, a growing number of seniors might impact the finances of an entire economy. “In developed countries, retirement systems are collapsing. In Japan, the system almost collapsed last year. There are simply too many elderly people and the government does not have the money to take care of them,” says Leonardo Alves, CEO of Plan Wealth Management. While the private healthcare sector may help, only 4 percent of those over 60 years of age have a major health expenses policy, according to AMIS.
PRIVATE ALTERNATIVES
To fill gaps in public healthcare services many individuals are turning to the private sector. However, most of those who do so prefer to pay out of pocket for every procedure
Source: OECD
and very few invest in an insurance policy because they consider it to be too expensive. “Private health insurance is too expensive for most Mexicans, so these products often target medium and high-economic population segments: A, B and C+,” says Lara.
While the value of the healthcare insurance market increased by 63 percent between 2000 and 2017, the growth in coverage is significantly smaller at 34 percent, according to AMIS. “Insurance penetration in Mexico is below 7 percent due to the lack of flexibility of the current product offering,” says Paulino Decanini, Executive President of SiSNova. In 2017, there were only 8.62 million people with health insurance, according to AMIS. Of those, 6.04 million had an individual policy and the rest had a collective policy from work or family.
The problem holding private insurance back may be an incorrect approach to the Mexican market. “We believe there are serious problems with the business model of many insurers, which offer complex products that do not properly address the underlying morbidity of the insured population,” says Decanini. In Mexico, 44.5 percent of healthcare costs are paid out of pocket and only 3.5 percent are paid by private insurance, according to AMIS, which points to a significant percentage of the population that can and needs to pay for healthcare but has not found a product that addresses their needs. “Many companies have shown interest in targeting the C and C- segments but they have not developed specific solutions that meet the needs and budgets of such segments yet,” says Lara.
Mexico has two types of healthcare insurance: major medical expenses and healthcare service coverage. “The former is associated with accidents and severe diseases whereas health plans also include preventive healthcare,” says Juan Pablo González, CFO of Plan Seguro. Healthcare coverage is comprised of 97.4 percent major medical expenses and 2.6 percent of healthcare service coverage, according to AMIS. Since the insurance penetration rate has kept steady for the past few years, some insurers have developed alternatives that sacrifice the number of covered diseases to reduce costs. For instance, several insurers, including Mapfre, Prevem Seguros, Sura and Inbursa Seguros, have introduced insurance policies exclusively for cancer.
Others call for a restructuring of the insurance sector. “The key to effective health insurance is not just paying the medical expenses covered but to make this sustainable, while managing the type and quality of treatments received by the patient, as well as their cost. To perform all these activities, insurers require better health management services, provider network infrastructure, cost-management processes and specialized IT systems,” says Decanini.
MAIN CAUSES OF DEATH IN MEXICO (2017)
Source: INEGI
INSURTECH
A growing trend that is slowly penetrating local insurance companies is InsurTech, defined as the use of technological tools to increase efficiency and reduce costs of insurance operations. An increasing number of developers are beginning to turn to the development of these solutions. For instance, Willis Towers Watson says the field had received US$1.41 billion in investment just in the second quarter of 2019, a 273 percent increase over the same quarter in 2018.
InsurTech allows companies to use data analytics, artificial intelligence, blockchain and machine learning to reduce risks for both policyholders and insurers. Moreover, InsurTech platforms can be used to transform customer engagement and eventually increase patient retention. These technologies can also be complemented through the use of wearables and mobile health apps to collect critical data that can help a patient identify a disease or make lifestyle changes. This information can also be analyzed by insurers to create specialized products that better address the needs of specific patient populations.
While the benefits are many, Mexican insurers have been slow to adopt InsurTech practices. “Even though the Mexican insurance industry has been very traditional and cautious to adopt changes, now it is understanding that digitalization could be a fast way to improve the relationship with the end consumer,” says Lara.
As Mexico’s population increases in number, age and weight, existing gaps in the healthcare systems will only grow wider. For that reason, innovative strategies implemented by both the public and private sectors to finance healthcare services will be necessary to continue providing efficient access to services and medication. “No sector can do this alone; alliances are vital for complementing and supporting each other,” says Decanini.
HEALTHCARE EXPERIENCE TRANSLATES TO BETTER INSURANCE MODELS
EDUARDO LARA
Head of Health, Latin America at Reinsurance Group of America
Q: How can Reinsurance Group of America (RGA) collaborate with the public sector to innovate Mexico’s healthcare system?
A: Private health insurance companies should adapt to the local healthcare system in every single country. Those with a strong public offering, such as the UK or Canada, do not require private health insurance products, because their public healthcare systems are comprehensive, so insurers must only fill certain gaps, such as coverage for medicines or dental and optometry services that are not included in the public catalog. RGA wants to improve Mexico’s healthcare system by introducing affordable products for the middle and middle-low income classes. Since total expenditure in healthcare accounts for 6.5 percent of national GDP and 49 percent of that comes from private expenditure and considering that 92 percent of such private healthcare spending is out-of-pocket, this means that 2.93 percent of Mexico’s GDP is linked to out-of-pocket healthcare expenses. Therefore, we need to create affordable and comprehensive health insurance products. The worst way to finance healthcare is out-of-pocket, as this only makes healthcare services more expensive.
Although reinsurance companies do not work directly with the final user, RGA has developed strategies to go beyond the common reinsurer practice and ensure companies are providing the products needed by the market. Only 8 percent of the private health expenditure in Mexico is paid by insurers, since most Mexicans prefer to visit pharmacy-sponsored doctors or wait as long as necessary to receive an appointment at public systems before paying for private insurance, which is why we are betting on specialized and affordable products that target specific ailments. We do not believe that a single company has all the answers but we can use our global experience to replicate successful implementations from other markets, such as South Africa and Southeast Asia.
Reinsurance Group of America is the only global reinsurance company with a predominant focus on life and health reinsurance solutions. It has offices in the US, Mexico, Brazil, the Middle East, North and South Africa, China and Italy
Q: How can insurance companies better address the needs of the Mexican population?
A: We believe there are serious problems with the business model of many insurers, which offer complex products that do not properly address the underlying morbidity of the insured population. In addition, companies face complications in balancing complex regulation, financing, service provision and product integration, the latter referring to how companies bring together financing and delivery of healthcare services.
In Mexico, insurers act mainly as financers and do not have the accurate focus to reflect that. Financers are supposed to provide the financial resources to pay for a medical covered incident. However, the key to effective health insurance is not just paying the medical expenses covered but to make this sustainable, while managing the type and quality of treatments received by the patient, as well as their cost. To perform all these activities, insurers require better health management services, provider network infrastructure, cost-management processes and specialized IT systems.
Q: How can insurers increase their profitability in the healthcare sector?
A: Hospital bills for insured patients tend to be higher than those for the uninsured, even after having the same medical procedure. Uninsured patients always ask for an itemized bill and address with the physician and/or the hospital any irregularities related to items that were not used or requested. Moreover, these clients can negotiate a discount with the doctor or the hospital. Insurers, on the other hand, are not negotiating with providers in the right way and incentives between financers and providers are not aligned, so bills remain higher, which is reflected in larger premiums.
The lack of true partnerships and mutual understanding between financers and healthcare providers may also lead to abuse, waste and fraud in the use of medical services. In the US, these three elements represent approximately 30 percent of the total cost of an insurance premium.
INSURANCE AS INVESTMENT NOT EXPENSE
LUK VANDERSTEDE
Director General Mexico of Bupa Global Latin America
Q: Besides Blue Cross Blue Shield Association (BCBSA), what other alliances have helped secure your foothold in the Mexican insurance segment?
A: Bupa formed a partnership with BCBSA resulting in a joint venture named Highway to Health. The project allows BCBSA’s clients to access medical insurance coverage across the world, while Bupa Global clients get medical coverage in the US. This is good news for our Mexican clients since most of international accidents involving Mexicans happen in the US.
Our local team for health and benefits has developed many other productive alliances, particularly with hospitals. We are working hard to differentiate and increase our offering. We have solid partnerships with Grupo Ángeles and ABC but we want our clients to have more options because more options lead to more variety inside and outside the country. An example is our alliance with American Express. The profile of many American Express clients, their lifestyle and needs fit well with our offering. Another alliance is with Actinver, which for the past three years has been an important intermediate channel to grow our client base.
Q: How is Bupa using technology to improve its services?
A: In Mexico, we need to work on digitalization but we have to analyze the regulation that allows us to do that. There are many things that could be done, but when trying to apply them to specific situations and following local regulations, they cannot be implemented smoothly. An example is the figure of the intermediator. Around 10 years ago, people used to say that insurance agents were bound to disappear. However, I believe intermediators will always exist because at the moment of acquiring an insurance policy, people need assessment regarding the investment they are making. Also, the Latin American culture likes the human element, which makes an intermediary necessary. Moreover, technology has yet to develop the proper capabilities to evaluate the conditions under which an insurance policy should be drafted.
Q: How is Bupa Global improving customer engagement and client retention?
A: If clients are happy, feel safe and know that their investment is guaranteed, then retention is easy. For any insurance
company, the idea is to have a controlled accident rate. Clients who use their policy have firsthand experience of our customer service, which also makes retention easier. The challenge is with those clients who have not suffered any eventuality. We need to be in constant communication with these clients to retain them, conveying the message that we help them achieve longer, happier and healthier lives.
Through Círculo de Bienestar Bupa (CBB), we help our clients and distributors to have a healthy lifestyle and we also participate in health-related events across the region, such as the recent PGA Tour Latinoamérica golf tournament Bupa Match Play in Cancun and our Uber campaign in Mexico “Bienestar en el Camino.”
We also work to update our policies, focusing on topics such as mental health. For instance, Bupa Global UK is including certain conditions related to burnout in some of its policies and the idea is to gradually bring this to Mexico. Today, our coverage includes certain therapies for Alzheimer and Down Syndrome but we want our clients to know that our policies are enriched by topics that touch upon productivity, such as mental health.
Products offered by Bupa Global are investments, rather than expenses. However, in Mexico insurance is still seen as an expense. It is important to see our products as investments in the sense that clients can have access to a network of more than 1.2 million healthcare providers, even in the US.
Q: What are Bupa Global’s main goals for Mexico in 2019?
A: We are striving for healthy growth. We do not target the mass market, which is why our long-term goal is to be the most admired company in the premium medical expenses segment in the next few years.
Bupa Global Latin America provides international health insurance (IPMI), local health insurance (PMI) and travel insurance for individuals and corporate customers as part of Bupa, a prominent company with activities in different healthcare areas
PREVENTION: BASIS OF GOOD HEALTHCARE
JUAN PABLO GONZÁLEZ
CFO of Plan Seguro
Q: How does Plan Seguro differentiate from other companies offering similar insurance services?
A: Since we do not have any other verticals, we need to be self-sufficient in healthcare. Over the past 22 years we have been meticulous in our operations, which has led to a more efficient operation with fewer errors. At the same time, rather than focusing on price, we bet on higher quality products and services. In the Mexican market there is a distinction between major medical expenses and what is more broadly classified as health insurance. The former is associated with accidents and severe diseases whereas health plans also include preventive healthcare. Companies authorized to offer this wider range of health products and services need to be certified as Insurance Institutions Specialized in Healthcare (ISES); Plan Seguro was the first company in Mexico to receive this distinction.
Q: How can combining traditional and preventive insurance models alleviate Mexico’s disease burden?
A: Our approach has a long-term impact on the health of the population. However, if people do not consider their health as part of their life plan, it will be difficult to effect real change in terms of promoting preventive insurance models, especially considering that only 25 percent of the population has insurance coverage. Part of our strategy is to make people think about their future.
Q: What role will digitalization play in providing better healthcare?
A: Traditional insurance products are too complex and tend to be mediated through a broker and a specialist insurance agent. We think this model is going to continue for the time being. Making a product more accessible through an app would require simpler and more automatic processes. There is definitely a demand to adapt and become more flexible, but there are people who may not necessarily have access to the technology required to use such a tool. For now, we mostly
Plan Seguro is an insurance company specialized in health plans. It has over 20 years of experience and a network of more than 4,000 doctors, 500 hospitals, 65 medical coordinators, more than 4,000 service providers and 21 commercial offices
benefit from technological innovations through increased efficiency by trimming costs and ultimately lowering product prices. Today, we have an insured base of 130,000 clients and cover almost the entire country through a network of more than 4,000 doctors and 500 hospitals.
Q: How would you envision a public-private partnership to improve the insurance sector in Mexico?
A: In other successful international models, such as the Netherlands’, this partnership was designed by the government and the private sector working together. The former pushed for strong social incentives but it had to find an economically viable model regulated by clear rules. What the Netherlands’ government did was assign 100 percent of the healthcare insurance to the private sector and forced every citizen to acquire a basic health insurance package. Citizens can then choose to contract additional coverage. Another successful case is Chile, where citizens have the choice to have a private plan or a government plan. In this case, the government invited private hospitals and health providers to collaborate in public-offered plans. The problem we have in Mexico is that there is no such cooperation between the government and the industry.
Q: What is the best way to prevent further rises in the price of insurance policies and boost penetration in the Mexican market?
A: Insurers must ensure clients do not end up paying for inefficiencies or errors in the operation of the policy. However, the health of the population is the main factor that determines the price of healthcare in Mexico. Chronic diseases like diabetes, heart diseases and orthopedic conditions have now become the main cause for expenditure among insurers and costs for such treatments have seen steep increases in Mexico. To reduce the impact of health trends on insurance prices, it is important to develop flexible products and services. Portfolios should be able to adapt to target groups with different health risks, they should be managed easily and adapt to changing circumstances. However, we must also exercise caution to avoid reaching the point where there is not sufficient coverage for the client.
COMPREHENSIVE APPROACH TO INSURANCE THROUGH CAREFUL ASSESSMENT
PEDRO PACHECO Director General of Prevem Seguros
Q: How does the company differentiate from other insurers focusing on major medical expenses and personal accidents?
A: We are part of Grupo Valore, a group of four insurance companies that specialize in different market niches: GMX specializes in property and liability, ANA in car insurance, Argos in life insurance and Prevem Seguros in health insurance. This strategy allows us to provide agile and comprehensive services for each situation and to generate synergies to provide better services.
Without a doubt, medical insurance is one of the most complex products in the sector due to the many variables it considers. However, we are convinced that through appropriate risk selection, we can benefit both our clients and investors. Up until the insured turns 50 years old, our policies are similar to those of our competition. From that point on, all our insured take an exhaustive medical exam that gives us significant information on how to better provide care for them. After this test, we do not expect any surprises regarding future health issues because we have a comprehensive medical profile. This generates transparency for us and for the insured and helps the latter fully understand the policies and benefits they receive. We want to position ourselves as an honest company through appropriate risk selection.
Our strategy has borne fruit and we now have about 6,000 insured in our family plan and about 40,000 insured in group plans. Once they pass the initial filter, our insured usually do not switch insurance companies. We also have few complaints with the National Commission for the Protection and Defense of Users of Financial Services (CONDUSEF). Our model relies strongly on prevention, which is why every year we gift some selected clients with a basic checkup. The results are not shared with us; they are for our insured to be aware of their health. Our vision is to strengthen our insured base as we aim to prove that this model allows for cost control.
Q: What recommendations would you give the government to boost growth in the insurance sector?
A: The Solvencia II policy implemented in 2009 led to significant changes in the insurance sector. The goal of this policy is to ensure users are protected and to inform them of
whether companies have the financial capabilities to cover their claims. However, there have been few promotional efforts from the authorities regarding the benefits of Solvencia II. The market needs to raise awareness about the costs of out-of-pocket healthcare expenses, especially when dealing with catastrophic diseases such as cancer.
An area of opportunity for the government would be to complement social security services with private insurance products. The government has to balance its budget and provide care for its citizens. A growing problem is providing care to seniors, who have higher healthcare expenses. Collaboration between public and private care providers, for instance through the development and implementation of specialized insurance policies, would greatly alleviate the burden on the public sector’s finances.
Q: What will be the role of technology in Prevem Seguros’ practices?
A: InsurTech products are already part of the market and we must be ready to deal with these new initiatives. However, medical insurance is extremely complex and acquiring a product requires the guidance of a professional. Fully understanding a medical insurance product is hard; we believe that at this stage, the public will continue to acquire these products from agents or brokers.
Q: How can the industry address the lack of insurance agents to target the Mexican population?
A: The sector has strong career development potential. For insurance agents, this is a business opportunity that does not require a high initial investment. It is a well-paying position where the agent is solely responsible for their own income. Moreover, this profession carries a strong social component because it requires providing care and preserving health. Agents must be aware that these activities benefit families.
Prevem Seguros is one of the four companies in Grupo Valore. Prevem Seguros focuses on health insurance and has over 40,000 clients in its group plans and 6,000 clients in family plans
INTEGRAL CARE STRATEGY LEADS TO TRIPLE-DIGIT GROWTH
PAULINO DECANINI
Executive President of SiSNova
Q: The insurance sector showed moderate growth in 2018. How did SiSNova perform in that same year?
A: While the Mexican insurance sector grew at a 10 percent pace in 2018, SiSNova grew at a triple-digit rate. We are now close to 237,000 insured individuals, 20 percent of whom never had an insurance product before.
Our rapid development is thanks to the attention we place on patient needs and our ability to respond quickly when they need to use their coverage. We prioritize attention to our clients over any other administrative or financial concern. There are still challenges ahead but we expect to continue growing in the coming years above the market rate. In 2019, our goal is to consolidate our position as an industry leader by developing functional strategies that benefit the insured and to provide excellent services to ensure our patients and their families receive the best medical care. Our main goal is to transform the Mexican healthcare industry.
Q: What advantages does SiSNova offer when compared to traditional insurance products?
A: We offer a comprehensive solution that meets all the medical needs of the insured individual. Traditional major medical insurance policies provide financial protection to avoid the decapitalization of individuals and their families after a disease or an accident. These policies require individuals to pay a co-insurance and a deductible every time the policy is used. Moreover, they only become active once the individual surpasses an established minimum payment, which often means that they only provide care for catastrophic diseases, leaving a gap in healthcare services for primary care.
SiSNova’s goal is to protect more than the individual’s finances; we also care for their health through the
SiSNova is a Mexican company that aims to change insurance in the country by providing policies and services to individuals who do not have access to the private healthcare system
implementation of early detection schemes and prevention strategies. This integral service allows us to participate in every stage of our clients’ life to help them stave off serious diseases. We have collaborative agreements with most hospitals, pharmacy chains and other suppliers of medications to ensure the quality of our services.
Q: What strategies is SiSNova implementing to promote a prevention culture among its insured population?
A: This is challenging because at this point, Mexico lacks a prevention culture. We have been developing and testing several strategies to incentivize our insured population to adopt a healthier lifestyle and undertake prevention strategies. These vary widely between individuals depending on their age, gender, socioeconomic status and the commitment that clients and their employers have toward adopting these practices. There is no universal strategy to convince individuals of the importance of adhering to these policies. We need to develop tailored strategies for each case.
Results of these prevention schemes ultimately depend on the individual, especially with problems of obesity, sedentarism, tobacco use and alcoholism. It is necessary to increase awareness about the importance of looking after one’s health. To do that, it is necessary to accompany the individual through their entire life.
Q: What role can technology play in establishing a prevention culture?
A: Technology is a useful tool but successful implementation depends on how willing the patient is to use it. While new technologies can automatically monitor a patient’s health condition, they are worthless if patients do not integrate them into their daily life. Insurance companies are increasingly incorporating technology into their monitoring practices but it is still not a priority for clients. The patient’s main concern is for the insurance to work when it needs to, which means our priority should also be to remain close to the individual and cover their basic healthcare needs.
TECHNOLOGY, GLOBAL KNOWLEDGE KEY TO BETTER INSURANCE PENETRATION
STEVEN LÓPEZ Head of Operations LATAM at
Q: What makes Pacific Prime the ideal adviser for companies in Mexico?
A: Pacific Prime is an insurance adviser that offers local insurance solutions and a wide range of health plans for individuals, families and enterprises all around the world. In Mexico, the company specializes in major and minor medical expenses, although we cover other niches like business and life insurance. While Pacific Prime has a global and scalable model, better than Asia, Mexico offered the ideal platform to first cover the entire country and then expand into other countries in the region. Mexico, Brazil and the US are our main market targets in the Americas but Mexico is going to be the central subsidiary for Pacific Prime on the continent.
Q: What differentiated benefits do you offer in Mexico compared to local brokers?
A: The main differentiator is that Pacific Prime has a global reach, while local brokers have a more limited scope. Mexican brokers might know a lot about the market but normally they only have local reach and lack the knowledge to operate outside the country. Pacific Prime offers insurance to over 3,000 companies including many multinationals, SMEs and international schools, the latter being our main target and the main source of our revenue.
Pacific Prime’s completely digital model and our global presence are what makes a difference for our clients. Through its digital platform and specialized sales team, the company is able to reach the medium and high socioeconomic segments in Mexico. All our products are designed to compete in the international market, which is why the products are marketed to reach clients with a higher purchasing power. Mexico is among the countries with the most expensive private treatment, which makes our offering highly attractive for the national population.
Q: Besides Bupa Global, what other international and national partners do you have in Mexico?
A: Pacific Prime has partnerships with over 40 companies around the world, the most representative being Bupa
Pacific Prime
Global, Allianz Worldwide Care, Cigna Global, Aetna, AXA, MSH and Ping’An. Unlike other players that get more bureaucratic as they evolve from a midsize to an international operation, our fast and efficient services allow us to work with the biggest companies around the world, together with our centralized operations to provide better customer service.
Q: How can having a health plan translate to improvements in an international school plan for business development?
A: International schools work differently than companies. They have different holiday schemes and the characteristics of a professor as an employee are also very particular. Other insurers tend to generalize international schools and treat them as any other company with employees. In comparison, Pacific Prime has a clear understanding of how schools work, their academic calendar, dynamics, holidays, budgets and more. The greatest added value for any school that wants to hire Pacific Prime’s services is that we know how their business works and our solutions will contribute to enhancing their development.
Q: What makes Pacific Prime the best option for expats in Mexico?
A: Originally, Pacific Prime emerged as a solution for expats who required insurance services, so the company has relevant expertise in offering comprehensive international health policies to this segment in Mexico and anywhere else in the world. As economies grow stronger and global migration increases, there is a greater demand for insurance companies to address international needs. Pacific Prime will continue to be the best option for those expats who need portable, flexible and tailormade policies.
Pacific Prime is a leading international employee benefits agency with more than 500,000 clients worldwide. The company has offices in Hong Kong, Singapore, Shanghai, Beijing, Dubai, Bangkok, London, Los Angeles and Mexico City
UNDERSTAND THE CLIENT BEFORE PROPOSING SOLUTIONS
RAÚL JACOBO
Health Manager of CHG-Meridian México
Q: How does CHG-Meridian differentiate from other consulting firms in the sector?
A: CHG-Meridian is a German company focused on providing solutions in four areas: IT, car fleets, industry and healthcare. In the latter, we help to create flexible models so hospitals and other industry players have the best tools to provide added value to their clients. Besides hospitals, our clients include pharmaceutical companies and clinical laboratories. Our consulting solutions can focus on better and faster service or new technology to make processes more efficient and cost-effective.
We provide flexible models so clients can free up their resources for new investments. We also provide advice on where to allocate these resources. Our goal is to build longterm relationships with clients. We do not come in for one project to walk away with a big sum of money. Our sustained commitments have allowed us to develop know-how in state-of-the-art technology. We are helping a hospital revise its investment in a new project for oncological care. We are structuring the investment scheme, determining what tools are necessary and designing the right teams to run the projects.
Q: How does the company bring technology closer to its clients?
A: We use a digital platform called TESMA, which gives clients access to a detailed overview of the equipment in the project. The system can be accessed from anywhere and provides insight into elements from both CHG-Meridian and the client. As a result, clients can see where their assets are located geographically, where the costs are centralized and how much the company pays on equipment and buildings, among other factors. This shines a light on finances and also allows a faster resolution of problems. The system also makes it easier to produce reports. In many cases, our clients previously created reports using Microsoft Excel.
CHG-Meridian has 40 years of experience in consulting and leasing services for IT companies, industrial players, automotive companies and the healthcare sector. In the latter, the company offers solutions to efficiently manage investments
This requires a lot of time and allows for less flexibility. In the health sector, we are clearly seeing an increasing overlap between medical and technical teams. Doctors will increasingly require technical knowledge of software. We know how this works and can offer solutions that support this new dynamic.
Q: How do you think consulting services will evolve in the healthcare sector?
A: There is a generalized lack of understanding of healthcare players among consulting companies. There is greater need for teams that can better analyze a client’s context and more closely match the specific client profile. Normally, a client has to adapt to what a consultant can offer according to budget. We take the opposite approach. We try to understand how the client operates, working on the assumption that most assets in a hospital should not be consuming significant resources. With the latest technology and analytics, we can help to reduce our clients’ financial burden and free up space for new investment.
Consulting companies will increasingly focus on a specific niche and we are already doing that. We are experts in remodeling the dynamic between assets and costs. Our ultimate goal is to be top of mind for CEOs and CFOs when there is a need to revisit cost structures. Given this specialized vision, we are not entirely against working with other consultants to offer an integral service to clients.
Q: What are CHG-Meridian’s main goals in healthcare for 2019?
A: We want to be an important player and point of reference in restructuring and asset financing. Our main target will be hospitals, pharmaceuticals and private laboratories. To attract them, we will need to showcase the particular vision we offer. In geographical terms, we are active in 25 countries. In the Americas we are present in Canada, the US, Mexico and Brazil and we work with companies with activities in multiple countries. In Mexico, we are working with more local companies because there are not many international players. Regarding our own suppliers, we do not work through exclusivity. If there are two vendors, the client can choose.
LEASING AN OPTION TO MODERNIZE EQUIPMENT
FERNANDO
DE OBESO Director General of Salud Fácil
New technologies and advanced medical devices have improved diagnostics and increased treatment options but for small clinics and hospitals, modernization that offers a wider array of solutions for patients represents an additional financial strain, says Fernando de Obeso, Director General of Salud Fácil. “Most large hospital groups work in partnership with banking institutions and do not face challenges in obtaining financing for acquiring new diagnostic and treatment technologies. However, small hospitals and clinics have a hard time accessing these funds,” he says.
Salud Fácil has taken on the task of providing leasing options for medical equipment so that small clinics now have that option. “We believe that the biggest opportunity lies in small and medium-sized clinics and hospitals in the country. Our bet is that through our leasing options, they will want to modernize their equipment and thus improve their quality and offer new services.”
The Mexican company is dedicated to financing any type of medical equipment to doctors and hospitals in addition to offering financing to individuals for surgeries, treatment or other medical necessities. It has developed the needed expertise in the sector to position as a competitive alternative to larger financial institutions, de Obeso says. “Leasing operations are more complex than credit itself because they involve different risk variables. However, our advantage is that we can offer personalized solutions to our clients, which is something a banking institution cannot do.”
Backed by national and international investors, de Obeso says Salud Fácil offers competitive interest rates when compared with other financing options. “Although all our international investors are investment funds, we also have national private individuals who invest in our operations.”
Salud Fácil has attracted such attention mainly because of the social impact the company has. “Many investment funds have a mandate to invest in projects with social impact. Moreover, they have to diversify their portfolio and the health sector offers attractive opportunities in the country,” he says.
Given that Salud Fácil’s core is leasing and providing credits to patients, the company does not force clients to use a specific brand or model. “Usually, when the client gets to us, they already know the brand and model they want and have a notion of the price. Our job is to facilitate leasing and we offer transparency throughout the entire process,” says de Obeso. As part of its commitment to provide access to new technologies to hospitals, clinics and patients, Salud Fácil signed an alliance with Boston Scientific. “The main purpose of this alliance is to find a way to make new and innovative equipment accessible to patients. We are aware that there are new technologies that can be used to treat diseases and that the public health system in the country is limited when offering support to companies, so the goal of this alliance is to give smaller clinics and patients access to the latest technologies in an affordable way.”
The company started operating in 2013. It started offering leasing services three years ago and the area now represent 70 percent of its business activity. However, de Obeso believes growth opportunities in the short term will come from financing for patients rather than for medical equipment. “It appears that subrogated private services will disappear, which means people will have to pay more for certain services at private hospitals. In these cases, credit will be a good alternative.”
Should subrogated services in private hospitals disappear, and considering that Mexico has around one-third of the health infrastructure it needs, growth opportunities for Salud Fácil would multiply, according to de Obeso. The company has an open scheme to work with all hospitals, providing the needed flexibility to meet patient requirements.
Although Salud Fácil is only physically present in Mexico City and Guadalajara, de Obeso says technology will increase coverage to the entire country for both patients and hospitals looking for leasing alternatives. He is confident that even though the company does not have plans to open new offices, it will continue experiencing significant growth. “We want to double our operations in the coming years in terms of leased equipment and patients.”
SPANISH GIANT MAKES MEXICO ITS SPEARHEAD FOR HEALTHCARE DIVISION
CÉSAR VALLE Director General of IDOM
Q: What is IDOM’s value proposition for the health sector?
A: IDOM is a professional services company. Over many years, we have built strong capabilities in hospital infrastructure, mainly in the design and project management of hospitals. As of 2018, IDOM had participated in the construction of 80 clinics and hospitals around the world.
The company also has a manufacturing/logistics division that has worked closely with the pharmaceutical and medical devices segments. We also have an active consultancy area, which has closely worked with public health departments, mainly in Spain, Mexico and Colombia. Considering our previous experience, we decided to launch a division specialized in healthcare services, which combines our capabilities with a team of professionals with medical, biomedical and pharmaceutical backgrounds.
Q: What main services will this division deliver to both the public and private sectors?
A: This division is operational and we are already developing projects alongside the Inter-American Development Bank and Banobras. In the future, we will work with both the public and private healthcare sectors. In the former, we will focus on the development of public policies and the incorporation of technology and equipment. Our clients will be mostly public and governmental institutions, such as IMSS, ISSSTE and the Ministry of Health.
In the private sector, we will focus on pharmaceutical and medical devices, which will require management consulting, logistics and manufacturing services. We also plan to work with private hospital groups and insurers. Another interesting industry in Mexico is pharmaceutical retail, with pharmacy chains such as Farmacias del Ahorro,
IDOM is an international consultancy with several divisions specialized in energy, telecommunications, water, transport and cities. Its consulting arm manages logistics services, management systems, strategic consulting and supply chain
Farmacias Benavides and Farmacias Guadalajara, all of them with very specific logistics needs.
Q: What is IDOM’s strategy to increase its penetration in the private healthcare sector?
A: We have developed several strategies. The first is through our work with industry associations, such as Funsalud, the Business Coordinating Council, CANIFARMA, AMIIF and the Mexican Hospital Council (CMH). We are also participating in industry events and work very closely with universities, NGOs and other industry participants.
Q: What logistics advantages do manufacturing companies and pharmaceutical retailers get from allying with IDOM?
A: IDOM supports two crucial operational aspects of manufacturing companies: manufacturing and logistics. No company describes its logistics or manufacturing processes as perfect, so opportunities to work always arise. The interest of pharmaceutical retailers lies in their warehouses, which often require automation and optimization processes. There is little competition in this sector, since there are few Mexican companies with the capacity to offer integral services.
Q: Which areas should the new federal government prioritize in terms of public policy and how does IDOM plan to support the administration?
A: There are several recurrent topics in healthcare, such as providing universal access and more affordable medications to those who need them. I believe public policy should focus on the integration and optimization of services, which would have an impact in the short-term.
The sector needs to develop stronger planning strategies for public infrastructure developments; several institutions develop their own infrastructure projects independently and these buildings often are underused due to poor planning. The construction of this type of infrastructure requires a large investment but operation and maintenance are often left unfunded, making these hospitals or clinics inoperative in a very short time.
LINKING NATIONAL, INTERNATIONAL SUPPLIERS FOR BUSINESS DEVELOPMENT
ROY BATEMAN
Honorary President at Trifermed
Q: How does Trifermed contribute to Mexico’s healthcare sector?
A: We have two business approaches: portfolio development and partnership development. The portfolio business approach targets companies already established in one or several markets that want to grow organically within that region. We help them find products to incorporate into their portfolio after canvasing the company’s existing product offering to fully understand how the company operates. We then establish the company’s product requirements and look for international partners that can supply them.
In the partnership development model, a client, often a small or midsized company, has an asset that it wants to export to other parts of the world but it lacks the necessary financial resources. For instance, we successfully helped a company in Holland that had a diabetes product it wanted to bring into Mexico.
Q: What are the main market opportunities for Trifermed in Mexico?
A: We are seeing growth potential in several product areas, including generics. Many companies, for example, are looking for more specialized generics for oncology. Other new areas include nucleic acid therapeutics, protein therapeutics, bioelectronics and wearables. Some Big Pharma companies are already developing comprehensive solutions. For instance, companies with products for chronic degenerative diseases such as cancer combine them with diagnostic products to offer a comprehensive solution to the doctor and the patient.
Another area that is attracting attention is the genetic mapping of diseases. In the next few years, patients will start receiving medicines according to their genetic profile. Personalized medicine is still far away but it is important for companies to start thinking about it because it will play a fundamental role in the future. Rare diseases are another area of interest.
The combination of research and genetic mapping can allow doctors to better understand how rare diseases function in a particular patient and even cure them.
Q: What main barriers to access do foreign companies run into when seeking to enter the Mexican market?
A: The most common barrier is getting products approved, and COFEPRIS is aware of this. COFEPRIS is a sophisticated organization and has adapted its processes to the needs of the Mexican population. It is now considering accelerating the approval of generic products to increase access and keep up with the innovative products the market needs.
Mexico also has challenges that are not present in other parts of the world. In some parts of Europe and Canada, for instance, medical assistance is administered by the government and a significant number of available products are sold through a reimbursement system that does not exist in Mexico. The challenge is to explain to foreign companies how the Mexican market works. When a company wants to bring a product to market, it must consider not only prices, but also regulations. Some companies believe that understanding US or European regulations is enough to obtain an approval in the Mexican market but that is not the case.
Q: What are the specifics of your main services for the Mexican market?
A: We work closely with those clients that want to enter the Mexican market, validating their business model and helping them understand how the market works. We do not provide market research but we consult with local companies to see which one might be a good match for our client. In this way we have helped foreign companies find partners in Mexico.
We also work with Mexican companies to help them move export their products. One example is Laboratorios Armstrong, which we helped to export its product for head lice called Herklin to the US. In this case, we found a partner in California that specialized in importing Latin American products for the Hispanic population in the US.
Trifermed specializes in corporate and business development for healthcare solutions. It has been involved in the market launch of 140 medical solutions. It works with pharma and biotech companies, academia and startups
LOCAL COMPANY STRIVES TO PIONEER NEW TECHNOLOGIES
LILIANA MORA Director
of
Síoltalife
Q: What is Síoltalife’s value proposition for the healthcare market?
A: Síoltalife aspires to become a link for those international institutions that want to establish themselves in Mexico through a personalized value proposition based on an enduser focus, expertise, knowledge, confidentiality and no competition. Síoltalife proposes a disruptive model through a multidisciplinary team with more than 15 years’ experience in the scientific market. Although we use standard marketing platforms, we always look for what differentiates a company and generate the market strategy around that.
As we work in life sciences, we promote high-tech products and we employ a strong technical team to ensure the final user has the required technical knowledge. We work mainly in the Mexican pharmaceutical industry but we have developed some lines for packaging technologies. We are business developers and our goal is to help manufacturers to position their product in the Mexican market.
Q: What Síoltalife products or technologies are most needed by those companies looking to enter the Mexican market?
A: We have launched new technologies in Mexico, including digital measuring of concentration rates, bioreactors, rheometers and X-ray diffraction. We want to generate connections with international manufacturers to help them adapt their global strategy to Mexico’s landscape. We also want to be strategic partners to these manufacturers and support them by launching technology in the Mexican market. For instance, we worked with a German glass manufacturer to launch Nexterium, a glass covered with several chemicals that can be used to print genes.
Together with an Austrian company, we developed an oscillating U-tube that can be used to determine the density of liquids with fewer sample sizes than conventional techniques.
Síoltalife is a Mexican consultant firm that specializes in business development and marketing. Its capabilities include market analysis, design of market strategies based on public relations, project management and brand design
Mexican pharmacopoeia required the use of pycnometers to measure density, which require much larger sample quantities, so we worked to introduce this technique into the local industry. It is now considered a reference technique.
Q: How does Síoltalife adapt its strategies according to its clients?
A: Our team is comprised of experts in many areas; for instance, we have an internationally-certified coach, an expert in validation with many years of experience in the pharmaceutical industry and a group of chemists with significant experience in sales. Every project is evaluated according to customer needs and goals to define the best strategy for development. We have been working with a Chinese company that has developed a high-quality packaging that is attractive to Mexico’s generics market thanks to its competitive cost. We take one of two approaches with new clients. The first is to work with indirect suppliers of critical materials, such as packaging for medications. The second is the direct approach: working with a pharmaceutical company that requires the packaging and can import it. In the latter case, the challenge is logistical.
Q: How is Síoltalife supporting Mexican companies and institutes?
A: We collaborate with research centers and CROs, such as Pharmometrica, a center that recognized the need to diversify its business to continue expanding. We are helping this CRO to diversify its market and to build its branding strategy for Latin America. We also developed a short-term strategy that includes customer-retention strategies for project and sales tracking management and finally, we developed a loyalty program to retain customers and new clients.
The Mexican market is seeing an influx of globalization leaders that require proper communication, people development and management skills to ensure profitability. This has led to another strategic line, which is our leadership development program, created after the company found itself with a large team of expert scientists and technicians who lacked leadership skills. This program generates value through human capital.
FINANCING THE CLIENT’S FUTURE
LEONARDO ALVES Director of Plan Wealth Management
Q: How is Plan Wealth Management addressing the growing market for retirement insurance through its products and services?
A: Basically, we have two markets in Mexico. One half are Mexicans and the other half are foreigners living in Mexico. As a company, we offer international savings solutions with global financial expertise. This area is doing very well because Mexico is a fast-growing economy and an increasingly popular destination for business. For example, there are now five times more Europeans living in Mexico in comparison with 10 years ago.
The local market has also changed. Ten to 15 years ago, people were not used to creating savings plans. In the past, the average Mexican family would have more children and the parents would depend on support from the children once they retired. Today, it is difficult for a professional couple in a city to look after themselves, they cannot afford to have a large number of children anymore. They also know that life is going to be more difficult for their children, so they have to take more responsibility for themselves. Many people, especially younger generations, are more prepared. They leave university already more aware that they need to start saving. That is why we provide advice, educating people about the importance of saving and the most efficient way in doing so.
Q: How do you reach your clients?
A: Because people are becoming more aware that they need to start saving, they tend to come to us. Our clients tend to be people who are serious about their financial future and the well-being of their families. Our clients are people looking for reliable saving and investment solutions with the highest standards of quality and efficiency from leading and well-known finance institutions. We have a professional team of planners who reach out to potential clients who would welcome our services.
Q: You have many alliances around the world, with over 300 funds and 22 partners. Which would be your key alliance in Mexico?
A: Our key alliance in Mexico would be GNP, along with several large private investment firms. However, we truly believe our clients are our No. 1 alliance. Listening to our clients and understanding their needs continues to let us further develop our products to their full potential and to deliver more than what clients could expect from us.
Q: Pension funds are struggling in many countries. How do you maintain healthy funds?
A: In developed countries, retirement systems are collapsing. In Japan, the system almost collapsed in 2018. There are simply too many elderly people and the government does not have the money to take care of them. A similar thing happened in 2011 in Europe. We focus on keeping our savings in funds with a healthy future. One of our favorite funds is the pharmaceutical and health industry. We have funds like UBS Health Funds, UBS Biotechnology and JP Morgan Healthcare. Many of these funds have been voted for years as the best in terms of long-term security. They include companies like Sanofi, Bayer, Glaxco and Pfizer and several more. The reason why they count as the best is because this industry is going to keep innovating and producing. The world is going to keep on needing medicine, so it is a steady sector.
Q: What role does digitalization play in your company´s operations and services?
A: Technology has become more and more important in our work. We have to be up to date with all the different online platforms designed for this industry. Many people come looking for services via social platforms. In terms of providing a digitalized product, the technology is there and it is an available option for our clients. However, many clients still prefer a meeting with one of our professional financial planners who will personally assess their needs. We also want to ensure we keep providing a personalized service.
Plan Wealth Management is an independent financial consultancy with over 20 years of experience. The company is headquartered in the UK, but operates in 21 Latin American countries, including Mexico, Brazil, Colombia, Chile and Peru
3M innovation center, Cuajimalpa, Mexico City
DATA SOLUTIONS HUMANIZE HEALTHCARE
XIMENA HERNÁNDEZ
Director General of Novostrategia
Q: What opportunities did Novostrategia identify when it decided to focus on patient safety?
A: Novostrategia began as a consulting firm focused on helping hospitals acquire national and international certifications. We found areas of opportunity and many barriers in the certification process, which was seen by most directors as just another box to tick instead of the basis for quality. We also noticed a general lack of awareness among doctors, hospital administrators, patients and their families regarding patient safety and the areas this covers.
Our solutions are based on strategic links between companies in the healthcare sector to promote information exchange, which allows us to generate innovative ideas that prioritize patient safety. Patient safety is like a car’s seatbelt; its use is both the responsibility of the vehicle manufacturer and the end user. We decided to bring together insurers, hospitals, pharmacies and other players in the healthcare sector to gather data on patient safety. We are also investing in innovation of healthcare systems through technology that humanizes patient care. Most technologies in the health sector are focused on diseases but improving processes is just as important.
Q: Some players in the healthcare sector are already compiling data on patient safety. What gives Novostrategia an edge?
A: A lack of publicly available information means users cannot compare hospitals and choose the one that is best suited to address their specific needs. While some hospitals, laboratories and pharmacies compile this information, they keep it private so it is not possible to use it to generate comprehensive public policies. Data is key to developing strategies that improve patient safety in hospitals and generate campaigns that increase awareness among the general public. Some players already have access to this information but have failed to use it for the benefit of the patient.
Q: What main benefits does Novostrategia introduce to the healthcare sector?
A: Technology allows hospitals to promote a quality-centered culture that, to be effective, must be adopted by the top leadership and then trickled down to the entire workforce.
Our solutions can be implemented by hospitals to improve their practices and by civil organizations focused on certain diseases to help hospitals provide better care. In hospital administration, we want to increase process efficiency through measurement and identification of problems using technology. Addressing overlooked issues related to hospital administration can improve quality and efficiency and also translate into savings. Gaps in services represent wasted resources that could be better spent in further innovation.
Q: What strategies is Novostrategia developing to increase awareness of patient safety across the healthcare sector?
A: During 2019, we will focus on conducting workshops that address multiple areas related to patient safety and patient experience. Eventually, these will be incorporated into an online platform to achieve multidisciplinary education that is accessible to all. We are also creating partnerships with software developers and quality certifiers to continue raising awareness about patient safety and encouraging more companies to work with us. We have established partnerships with the International Society for Quality in Health Care (ISQua), with other initiatives of technological innovation and with The Patient Safety Company, which developed a risk notification system for hospitals. We hope to build more partnerships with software developers, pharmaceutical companies, distributors, medical societies and schools.
Throughout the year, we hope to become the first company in Mexico to work in people-centered care, linking patient safety and experience in developing projects at the local level. Our second objective is to position ourselves in Latin America to produce a virtual event that brings together all companies in the region that focus on patient safety, attention focused on people and the humanization of care, no matter how small they are.
Novostrategia is a strategic innovation agency that seeks to humanize healthcare through data science, innovation and social change. The company focuses on creating a patient-centric culture and influencing public policy regarding patient safety
LOOKING AHEAD
Healthcare providers and other industry participants have been witnesses to the changes in the population pyramid and the country’s epidemiological transition. With these changes, new challenges and opportunities appear in the sector.
National and international companies seek to make the best of these opportunities through years of experience working in the health sector. However, new players, including startups and SMEs, are also becoming valuable players in driving the future of the sector.
Mexico Health Review 2019’s final chapter analyzes the trends that could alter the healthcare environment in the years to come, through interviews with those who are making waves, be it through a new product, service, technology or agreement. Moreover, it also includes key players such as venture capital firms and foundations in charge of looking for ways to invest in Mexico’s health industry transformation.
CHAPTER 14: LOOKING AHEAD
294 ANALYSIS: Entrepreneurship, Innovation Turn Needs Into Business Opportunities
296 VIEW FROM THE TOP: Juan Manuel Contreras, Ámbar Capital
297 VIEW FROM THE TOP: Arturo Bañuelos, Balero
298 VIEW FROM THE TOP: Lourens Verweij, Additio Investment Group & Industry Advisor
299 INSIGHT: Germán Montoya, Rokk3r Labs
300 VIEW FROM THE TOP: José Luis Elizondo, Wellmedic Health Centers
301 VIEW FROM THE TOP: Rodrigo Padilla, Happinss
301 VIEW FROM THE TOP: Adriana Vallejo, Hacking Health
302 VIEW FROM THE TOP: Andrea Campos, Yana
303 VIEW FROM THE TOP: Javier Barragán, Avena México
305 VIEW FROM THE TOP: Josep Tomas, Miyabi Labs
306 VIEW FROM THE TOP: Luis Lojero, Mural Med
307 VIEW FROM THE TOP: David Potes, Apolo Health
307 VIEW FROM THE TOP: Tomás Iglesias, OMI
308 VIEW FROM THE TOP: Lorena Tirado, Alternativa Médica Integral
309 VIEW FROM THE TOP: Everardo Barojas, Prescrypto
310 VIEW FROM THE TOP: Katty Beltrán, Fundación Dibujando un Mañana
311 VIEW FROM THE TOP: Roberto Tapia-Conyer, Fundación Carlos Slim
312 VIEW FROM THE TOP: Paloma Vázquez, Bioskinco Patricia Reyes, Bioskinco
313 VIEW FROM THE TOP: Victor Saadia, BioCenter
314 VIEW FROM THE TOP: Gilberto Medina, Novogen, Part of IVG Group
315 VIEW FROM THE TOP: Jorge Moran, Genetics and Health
ENTREPRENEURSHIP, INNOVATION TURN NEEDS INTO BUSINESS OPPORTUNITIES
The future of healthcare in Mexico could rest on two key planks: entrepreneurial know-how that can convert uncertain conditions into business opportunities and innovation itself, which is already transforming the industry, from the digitalization of clinical records to the creation of applications to support treatments
This is how the WHO defines innovation in healthcare: a response to unmet public health needs by creating new of ways of thinking and working that focus on the needs of the most vulnerable populations. In Mexico, the healthcare industry is ripe for innovation and the coming years are expected to attract growing interest from multiple stakeholders that could radically transform the industry.
While the bulk of attention in the sector often shines on research, new medicines and Big Pharma, innovators and entrepreneurs are emerging to address one of Mexico’s biggest health issue: access. The government is touting a universal health policy but with budget cuts and austerity measures, it could be hard-pressed to deliver. Entrepreneurs and emerging technologies are rising up, providing solutions that expand access to care and medicines, while many traditional institutions remain unprepared.
“Traditionally, healthcare is about a consult between a doctor and a patient. However, more and more businesses are springing up that offer health services in alternative ways,” says David Potes, CEO and Co-founder of Apolo Health. “Treatments can also be provided outside the hospital through new innovations and better communication platforms.” Potes adds that many health institutions are lagging behind. “A transformation similar to what visual media encountered with Netflix is coming to healthcare and many institutions are not prepared,” he says.
A report from the nonprofit organization Innovations in Healthcare constituted by Duke Global Health Institute, McKinsey & Company and the World Economic Forum, identified Mexico, along with other countries in Latin America, such as Brazil and Colombia, as destinations that are emerging clusters of health innovation, which can be preventive, promotional, curative, rehabilitative or assistive. Emerging companies in Latin America have raised between US$500,000 and US$100 million in the last 10 years, which also resulted in more than 25,000 full-time jobs in the region, according to LAVCA’s Inaugural Survey of Latin American Startups. The region has attracted the attention of players like Softbank, which initiated its US$5 billion Tech Fund for Latin America in 2018. This year, GINGroup also announced US$5 million fund to boost Mexican startups in areas like education, health and finance. The health innovation ecosystem includes a diversity of players. From digital platforms like OMI, Apolo Health, Prescrypto and Mural Med that support the digital management of clinical and administrative procedures for health provisioners, to chatbot applications like Yana that support the treatment of people with depression, innovators look for ways to transcend the way health products and services are provided.
Opportunities exist across the spectrum of services, says Juan Manuel Contreras, CEO of Ámbar Capital, a private equity firm specialized in technology and healthcare. “After several years with an extensive presence in healthcare services,
(out of 10 points)
Ámbar foresees significant opportunities in specialized clinics, hospitals and medical devices.” However, Contreras adds that not all startups in Mexico are at a point to warrant investment and turn this income into sustainable business opportunities. The firm “only invests in growing-mode companies with a defined client base, a proven business model and consistent and growing income,” he says.
Among the challenges, according to the OECD’s Estudios del Centro de Desarrollo Startup América Latina (Studies of the Latin American Startup Development Center), is a country’s ability to strengthen its innovation dynamics. That relies on the willingness of the public and private sectors to find forms of cooperation at different levels to develop public policies and spaces where new entrants can gain opportunities and support. Startups can also improve their chance of success in the market by including strong advisory elements. “[Startups] that have a relevant and active advisory board ... tend to outshine others,” says Lourens Verweij, Managing Partner at Additio Investment Group & Industry Advisor.
TECHNOLOGICAL ADVANCES
Medical devices and wearables are among the leading areas for innovation, but both face different challenges to enter the health market. Contreras says it is important to make a distinction between medical technologies and medical devices when talking about innovation. “Each type of technology has a different timeframe for development. While software or applications might take months to develop and the risk might be lower, approval and deployment can take years.”
Overall, the most innovative products of 2019, as highlighted by the prestigious Prix Galien Award, supported by the Galien Foundation, include Lynch Biologics’s recombinant human platelet-derived growth factor-BB (rhPDGF-BB) that stimulates the growth of mesenchymal stem cells, HumanOptics’s CustomFlex artificial iris for the reconstruction
of eyes with complete or partial aniridia, Sonendo’s GentleWave system that features a unique fluid delivery and control system for root canal therapy, HeartLogic by Boston Scientific that predicts potential heart failure weeks in advance and detects early signs of worsening heart failure.
Technological innovation is happening at all levels of healthcare supply chain, but all of them have one thing in common: interoperability and connectivity. Individuals increasingly want wearables and technologies that adapt to their needs. “People now are far more integrated with the digital world; they communicate differently,” says Apolo Health’s Potes. The company’s A11 platform is an illustration of how a business must supply a user-based type of healthcare to meet digital demand in conjunction with healthcare requirements. Potes says that A11 patient engagement instruments include a portable app that is 100 percent blank so the health provider can satisfy the patient’s digital requirements.
INNOVATIVE THERAPIES
To help ease the burden on Mexico’s health system, both Mexican and foreign companies are working to develop innovative products and therapies. Engineering techniques for tissue and organ regeneration, according to an article by the International Journal of Molecular Sciences, have enabled the production and marketing of various skin grafts applied to patients over the past 30 years. Most grafts have been developed using biodegradable materials of natural or synthetic origin. Biotechnology is also generating products originating between the medicinal and food industries to create biotechnological foods. “The idea is to offer natural, regional and seasonal foods that stray from traditional pharmacology,” says Antonio Cruz, CEO of Kurago Biotek. “We expect functional products to become the unit within Sanfer’s structure that starts to gain ground in the health prevention and wellness area,” he says.
Top 5 countries Bottom 5 countries
INVESTING IN HEALTHCARE SERVICES OFFERS VALUABLE FUTURE RETURNS
JUAN MANUEL CONTRERAS CEO of Ámbar Capital
Q: As a private capital firm, what do you see as the biggest opportunities in the healthcare sector?
A: We only invest in growing-mode companies with a defined client base, a proven business model and consistently growing income. In Mexico, we focus our operations solely on the education and healthcare services areas, given the significant opportunities to generate social and economic impact. After several years with extensive presence in the healthcare services arena, Ámbar foresees significant opportunities in specialized clinics, hospitals and medical devices. Pharma is definitely an attractive sector, but since it is not in our area of expertise and it demands high specialization, we do not participate.
The private hospital sector in Mexico is in a mature stage, meaning there are few big operators with country-wide presence while most are single hospitals with local presence, thus opportunities for consolidation are huge. However, one of the main factors for success in this space lies in the ability to serve patients at the lowest possible cost, since the natural market for them are patients paying out-of-pocket.
On the other hand, the specialized clinics segment is relatively new in Mexico compared to Europe or Asia, we think it also offers interesting opportunities especially among leading players in the non-communicable disease segment. Conditions such as diabetes, hypertension and heart failure have become the main drivers of the mortality rate in Mexico and we expect this trend to continue given the aging population. As a result, specialized clinics will have an even bigger role to play.
Medical devices are a risky bet, but with much higher potential returns. We decided to invest in Onko Solutions, a medical devices company focused on early detection of cervical cancer leveraging Mexican high-tech knowledge. From our perspective, Onko can really transform the industry and have
Ámbar Capital is a private equity firm specialized in the education, technology and healthcare services sectors. Ámbar Capital is a shareholder of Monterrey-based Hospitaria, a 50-bed hospital for middle-income patients
a tremendous social impact by saving women lives. However, adoption of new equipment and technology is always difficult and getting approvals for use is extremely complicated in Mexico. For new startups, investing in this kind of process is costly, takes a long time and is very risky. However, it pays off when companies manage to get past the process. We are aware of the risks and we want to be there for players that need the resources to make their business grow.
Q: What would be the ideal conditions for new investments to bloom more effectively?
A: Overall, technology development, regulatory procedures and capital investment should be closely integrated. Strict regulations will always be necessary given the nature of the healthcare business; however, they have to adapt to market reality and end-users needs. Companies cannot be subject to countless tests when a statistical sample would be adequate to determine a new technology’s application and the benefits for patients. Through our venture with Onko Solutions, for example, we established a partnership with Grupo México’s Tren de la Salud to use Onko Solutions’ cervical cancer detection device. The equipment has already been approved by COFEPRIS and is used to save the lives of women who would otherwise fail to get an early diagnosis.
The country must find a way to take advantage of technological developments. Making available healthcare services to remote and very poor areas was indeed a demand of the population, putting pressure to adapt public policies.
Q: How can the public and private sectors strengthen their collaboration to improve the overall healthcare sector?
A: Looking at both sectors combined, the number of hospital beds in Mexico could satisfy total demand. There are problems in terms of pairing beds available with local demand or services offered with treatments required. The most natural road to follow is to enforce collaboration through various schemes that favor the use of all available hospital infrastructure in the country without the need to devote public investment to build more.
STARTUP CONNECTION COMPLEMENTS INNOVATION EFFORTS
ARTURO BAÑUELOS Founder of Balero
Q: What kind of early-stage startups do you work with?
A: We define early-stage startups as those that have already finished their minimum viable project. This means that they already have a product, they have users and preferably they already have sales. If they do not have recurring sales, we ask them to have users and to be in the process of monetizing their product. Although these are not restrictions for startups to participate with us, they are important variables we take into consideration when analyzing candidates. We provide these players with the structure they need to become a global startup. Because of this, another characteristic we look for in startups is that they have a global vision or can provide global scalable solutions. Companies collaborating with us should not only solve a local problem but apply a global-level model that allows for quick scalability.
We work with startups from all sectors and we only ask them to have a technology base. This does not mean they have to be mobile applications or from the IT sector. For instance, we are looking for startups that have a technology base in the solutions they are developing but that can impact any sector or industry. In this regard, we have many startups coming from the health sector that comply with these characteristics.
Q: How can Balero connect companies, investment funds and startups?
A: We try to generate alliances with big corporations because they are heavily invested in topics such as innovation and development. We offer to have their innovation and development departments up-to-date through the work of startups and we try to complement or improve their offering through startups that relate to what they do. With hospitals, for example, we might establish a connection with health or even entertainment startups to the benefit of the patient.
We demonstrate investment opportunities to companies so they can generate new business. It is not oriented innovation, as it does not come from a specific need a company might have. We show companies the innovation portfolio of many startups and how they are impacting different sectors and ask them if they are interested in participating to generate a new business unit.
At the same time, we sit down with startups to understand their core business and the verticals in which they work.
Once we have this understanding, we propose additional lines of action that might not be as visible for the company and then we generate an approach to incorporate them into our portfolio and analyze if there is a match with one of our larger partners. Should there be a match, we ask for a “champion” inside the company who can help us and the startup in any area where we might need help. Alongside our corporate sponsor, we plan for a pilot or test run. These tests are paid to the startup. We believe a commercial exchange is important right from the start. If the test run is successful, the company analyzes whether the solution is significant enough to either invest, acquire it or make it a company product. Should companies not find a match among the startups in our portfolio, we can present options that might not be part of our portfolio. We are always attracting more startups that impact certain verticals we know we work with.
Q: What difference does it make for corporations and investment funds to work with accelerated and preaccelerated startups?
A: We provide structure and formality to any startup that works with us and we help it set an administration board. This allows for a smoother interaction and better understanding between the startup and corporations, which tend be institutional. Working with a company in our portfolio can also help both the corporation and the startup to match their speed in terms of R&D.
Q: What are the obstacles and opportunities that health entrepreneurs face, compared to other sectors?
A: Startups need to comply with regulatory issues and trial periods. On many occasions, this also means obtaining certifications, which requires larger investment sums and more time to see a return on investment.
Balero is an investment fund that looks to connect private funds, corporations and startups. Its main objective is to develop investment opportunities in technology-based early-stage startups
FUNDING THE FUTURE OF HEALTHCARE IN MEXICO
LOURENS VERWEIJ
Managing Partner at Additio Investment Group & Industry Advisor
Q: What characteristics should a startup have for Additio Investment Group (AiG) to invest in it?
A: We pay particular attention to opportunities that are in line with our general healthcare industry expertise and where we can add direct value, mainly MedTech and Digital Health. We are especially looking at Seed and pre-A rounds of healthcare ventures that have reached, or are about to reach, certain milestones.
As AiG is a new fund, currently launching AiG1, we are in the midst of consolidating some of our previous operations and are actively building our portfolio where for the period to come we anticipate four to six transactions, all focused-on healthcare. From previous operations we are engaging in a wide range of projects, where common factors as chronical conditions, accessibility and the potential for scaling are important indicators. A needs-based solution is mostly a prerequisite, where each of them seeks to solve a specific area in the healthcare sector.
AiG focuses on providing added value in MedTech and Digital Health
Q: What factors does AiG consider to determine the success rate of a startup in the healthcare sector and what steps can they take to increase their chances of success?
A: Naturally each investor has its own way to determine what she or he expects to succeed. Some key ingredients we define are the extremely well-articulated relevance, the healthcare industry understanding and the entrepreneurial excellence in all aspects.
In addition to the above, we see that those that have a relevant and active advisory board in the medical
Additio Investment Group (AiG) is an international group of investors and industry executives that support high-integrity entrepreneurs with the potential to build great businesses. The group specializes on the healthcare and life science industries
and industry fields and that also follow a well-designed development path that includes PoC, Clinical, PoB and other elements, tend to outshine others.
I have been inspired by the local entrepreneurial spirit and drive of building ventures. Paired with an ongoing need for innovation in the healthcare industry to ensure better access and patient wellbeing. These are strong driving factors behind the investment opportunities we see in the region.
Q: Why should startups consider AiG the ideal partner to grow its business?
A: Across the regions we also see an exciting increase in Business Angel activities and higher average VC ticket. In the case of the healthcare venture that are in our range, they are often in need of both, a larger than general BA investment and a more hands-on support from professional industry experts. AiG was created to address this exact need and therewith we are somehow a hybrid fund.
Q: How is AiG attract startups and what role does it want to play in shaping the future of healthcare?
A: At AiG we focus on a rather niche area where most of the operators and key stakeholders know each other.
In addition, as industry focused fund we are actively involved in the ecosystem, working with many startups as they participate in accelerator programs, industry events and alike. This in addition with the word-of-mouth from the ventures we are working with has an even stronger positioning than digital media presence.
As a group of industry experts and investors we have a couple of key mandates. Naturally one is the healthy return of our operations, where key drivers for our Management team are much focused on the value added to the entrepreneurs we work with. Supporting the successful go to market of their innovations, the exponential venture development, and ensuring the positive impact of the portfolio ventures on the healthcare industry and its patients.
DATA AVAILABILITY, UNDERSTANDING OPEN DOOR TO NEW BUSINESS MODELS
GERMÁN
MONTOYA Chief Exponential Officer of Rokk3r Labs
The enormous amount of available information is changing the way different industries behave. The insurance sector is no exception, says Germán Montoya, Chief Strategy and Creative Officer of Rokk3r Labs, who touts insurance technologies, or InsurTech, as a key disruptor. “InsurTech and general healthcare are changing mostly because of the amount of new data points available.”
Rokk3r Labs, a business accelerator that supports companies developing innovative and high-technology solutions through a risk-mitigating approach, is betting on healthcare because of the opportunities that technology offers to disrupt the sector for the better. “Disruption in healthcare is coming in a million ways. Everything is changing, from telemedicine to surgery, genetic research and DNA management,” says Montoya. However, unlike previous changes that focused mainly on disease discovery and new reactive treatments, Montoya says the industry’s transformation extends to the way the sector is understood. “The whole industry is being rethought, even philosophically, from a palliative and reactive perspective to prevention.”
This change opens the door for the implementation of new business solutions based on technology and data availability with a preventive focus. “In the past, we could only get data regarding the physical state of a person when they were sick. Today, wearables can generate data on how people live before getting sick.” Data availability has been key in creating a movement that places prevention and predictability front and center. “The arrival of Big Data tools, AI and blockchain, among others, helps us to collect and analyze more reliable data to predict and prevent disasters.”
Montoya says technology also translates to better care for patients and savings for companies. “Patients can now keep track of daily activities, such as sleep or exercise, to prevent diseases. Moreover, blockchain applications could allow for availability of patients’ medical records, making them easily accessible at any moment.” Regarding companies, Montoya says it is easier and less costly to prevent a sickness rather than treating it, especially chronic degenerative conditions that are linked to a person’s lifestyle.
Even though technology and data use have permeated many dimensions of healthcare, Rokk3r Labs sees significant opportunities in the insurance arena, particularly in the implementation of InsurTech. “In general, Latin American countries have very low insurance penetration rates. Life insurance penetration in the region does not even reach 2 percent of the population. Chile has the highest rate at 4.8 percent,” says Montoya. Among the industry barriers he has identified for the industry is the lack of understanding of insurance products and the way the business model has developed. “People tend to see insurance as an additional expense rather than as an investment.” Still, Montoya is convinced the InsurTech industry has significant potential in the Mexican and Latin American market and Rokk3r Labs is making sure it can participate in the industry’s boom. The company has already invested in another player with a portfolio of 18 InsurTech startups as clients. “We are now focusing on how to grow these companies. The idea is to start in Mexico offering life and healthcare insurance and then work our way through the rest of the countries.”
Although Rokk3r Labs has the capital and expertise to help technology-based companies to grow, Montoya says if these companies wish to be successful in the healthcare industry they must comply with three main elements: an attractive value proposition, a feasible project and a team that can deliver. Particularly in the healthcare sector, Montoya says technology players must consider a long-term approach. “Unlike other industries, healthcare requires significant funding to perfect solutions before releasing them to the market.”
Rokk3r Labs is focusing on InsurTech but there are many areas of the sector that are ready for disruption, such as telemedicine and the way the industry is managed, according to Montoya. “There are many opportunities around efficiency that are important and that could help in terms of price and access to healthcare.” An example of this opportunity lies in the 40 to 50 million people who do not have access to healthcare. “The opportunity to provide efficiencies for these people is huge. We just need to have the right partners to build on those opportunities,” he says.
A TECH PLATFORM TO DEMOCRATIZE HEALTHCARE
JOSÉ LUIS ELIZONDO Founder of Wellmedic Health Centers
Q: How do Wellmedic Health Centers’ services differentiate from other telemedicine platforms?
A: Wellmedic Health Centers started operations in 2016, in the wake of the increasingly popular co-working model trend. We brought that model into the healthcare sector through our Intelligent Health Centers. Our core business is to offer office spaces to medical professionals in the best available locations to allow doctors to connect to their patients. We first established in the del Valle neighborhood in Nuevo Leon, as the region has strong purchasing power. We have already opened three more centers, two in Monterrey and one in Merida. Overall, we offer 120 consultation offices and our goal in the next five years is to open at least one health center in each of Mexico’s 32 states.
Q: What are the main benefits doctors and patients get from using Wellmedic’s infrastructure?
A: We are the first healthcare-oriented co-working space in the world. Our model has gradually evolved and we are now in the 2.0 version. We believe we can contribute to healthcare by promoting disruption and the democratization and demonetization of the sector. In the current private healthcare model, doctor are businessmen selling a product and also have to handle their own administration services and billing. Our goal is to help doctors by freeing up their time and not having to worry about those extra activities. We cater to all types of medical professionals, including doctors, psychologists, nutritionists, dentists and physical therapists.
Doctors need personalized service and a strong platform to back them up. We offer much more than a space to rent. Our goal is to empower doctors through our memberships. Our infrastructure and services allow us to provide fully furnished consultation rooms with the
Wellmedic Health Centers is an empowerment platform for health and wellness professionals with a 4.0 smart rental scheme. It is building Mexico’s largest private network of telemedicine practices
equipment each type of specialist needs. We provide growth opportunities and unique experiences for healthcare professionals. We also provide physicians with extra services, such as phone assistance from our own staff to manage their agendas and billing. We can also offer financing schemes to patients that require them.
Q: How will Wellmedic’s model increase access to healthcare?
A: One of our goals is to democratize healthcare through access to quality services. About 70 percent of doctors in Mexico are general practitioners and the rest are specialists. Most of the latter are clustered in five states in the country, leaving the rest without coverage. As a result, a woman with breast cancer in a rural town of a southern state will not have the same opportunity to obtain specialized care than someone in a major city. By spreading Wellmedic’s Health Centers to every state, specialists can bring their services to regions that might lack them.
Q: How is Wellmedic using technology to expand its reach throughout the country?
A: From the start, we believed digitalization could help a doctor’s professional development. For that reason, we invested in the most robust telemedicine platform in the market, which led to several success stories connecting our doctors with patients across the globe.
In 2018, we developed Wellmedic CONNECT. This model allows us to create small medical consultation centers in areas close to the patient. Since mid-2019, we started incorporating this platform to one of the largest pharmacy groups in Nuevo Leon and Mexico City. These “mini” health centers use telemedicine to turn a general practitioner’s office into a specialized center. Doctors use our platform to connect with a remote specialist and provide a more accurate diagnosis. Meanwhile, specialists can use an electronic signature to prescribe to the patient at a distance.
We are the first company in Mexico to provide a service of this kind, which has proven popular, receiving about 800 patients on average per store.
A NEW HEALTHCARE REALITY THROUGH VR
RODRIGO PADILLA CEO of Happinss
Q: How does your product help relieve health issues such as stress and anxiety?
A: Our technology is based on four pillars: diagnostics, awareness, monitoring and reduction of chronic stress. It uses a series of tools that can help to alleviate stress, foster mindfulness and harness the power of self-awareness. We provide an immersive experience with music therapy, guided meditation, mindfulness and nature-like environments, we have found that in 10 minutes of Happinss therapy we can lower stress levels on average by 42 percent.
Q: How can VR, specifically Happinss, aid in treating other mental health issues?
A: Our goal is not to replace conventional therapy or medication; VR is not intended as a full cure but as an
aid to improve results. By reducing stress and through mindfulness training, we want to harness the power of self-awareness. The mind is like a muscle and with Happinss we can train it to properly direct its attention, taking the person away from the thought stream that keeps on feeding negative thoughts. That being said, Happinss’ goal is not to make people have continuous positive thoughts but to teach them to direct their attention to the present.
Happinss is a platform developed in 2016 that empowers employees to manage their stress and improve their mental health. It uses cutting-edge virtual-reality experiences and biometric feedback, fostering mindfulness in the workplace
TO INNOVATE, COLLABORATE
ADRIANA VALLEJO Monterrey Chapter Leader of Hacking Health
Q: How does Hacking Health foster innovation in the healthcare sector?
A: Hacking Health is a global movement that seeks to improve healthcare through technology, innovation and collaboration. The organization has become a meeting point for different players in the health sector that seek to generate innovation and technology development. We have been working at the Monterrey chapter for more than three years and we have held monthly events to support a large number of entrepreneurs working on several sectoral issues. To date, we have held four hackathons.
Q: What are the main challenges that Hacking Health observes in the Mexican healthcare system?
A: The first barrier we faced was the need for multidisciplinary teams to collaborate to develop value proposals that really impact the sector. Entry barriers are high and startups have to validate their project at the same level as a large company. Therefore, projects require the support of companies and decision-makers who already know and operate in the market. Another key issue is the regulatory framework. Far from fostering innovation, regulation sometimes hinders the process.
Hacking Health is a worldwide movement that brings together technological innovators with healthcare experts to build realistic, human-centered solutions for healthcare problems. It is present in Monterrey, Guadalajara, Queretaro and Mexico City
MENTAL HEALTH THROUGH THE CHATBOT CONNECTION
ANDREA CAMPOS Founder Director of Yana
Q: Treatments for depression include psychological and even pharmacological care. How does Yana contribute to mental health?
A: Treatment for most mental health conditions like depression or anxiety may include therapy and, in some cases, medication. At Yana, we do not try to compete with these two types of treatment but rather to provide a way to connect the user with the adequate treatment. Many people struggle with mental health issues but can take a long time before seeking help. In Mexico, the average time between experiencing the first symptoms and seeking help is 14 years. We try to eliminate the barriers that stand in the way, including the stigmas that stop people from speaking out.
Yana is not only for those with depression or anxiety; it is meant to help anyone to improve their mental health state. Yana is designed to help people overcome the obstacles in their lives and become better versions of themselves. For many, this can help people to seek out therapy sooner, drastically reducing the current average of 14 years it takes for people to seek help, and prevent them from committing suicide. For others it can help them to take more control of their lives, go to the gym, get a job, or pursue a passion.
While Yana does not replace therapy, we do use cognitivebehavioral strategies that are usually delivered in therapy and put them in the hands of hundreds of people so they can benefit from them at any day, at any time, using their smartphone. Since Yana is automated, it can talk to 1 person or 1 million people at the same time, without the need of human intervention, unless it is necessary.
Q: You have several competitors but they are all in English. Are you a unique product in the Spanish speaking world?
A: In Spanish, there is no other application like ours. There are apps that reach out through chat platforms,
Yana
but they do not offer the intelligent conversational model. We provide automated responses trained to recognize your particular answers.
We launched a private Minimum Viable Product on February 2018, but did not want to launch it to the public until we got the approval from COFEPRIS. We do not need a medical license because we do not offer a medical treatment or provide any medical tools; however, we do want to follow its regulations because we work in the arena of health. Our goal is to launch Version 1.0 and reach around 10,000 users by the end of 2019. Yana’s Version 1.0 will be released through Facebook Messenger and will be powered by natural-language processing and machine learning to better understand our users’ language. This version will include a way in which users can understand their thoughts and feelings on a daily basis so we can paint an accurate picture of their situation and provide tailored recommendations to make positive changes in their lifestyle.
Q: How does Yana’s business model work in terms of subscription, in-content ads and other revenue generators?
A: We intended to be a civil association but we decided against it because we did not want to depend on public funding. This would limit our possibilities to reach as many people as needed.
Although Yana will be free for our users, in the medium term, we are going to seek for different forms of revenue streams. One option is a subscription model, where we can offer different packages that give access to different parts of the chatbot and for different lengths of time. Another option could be a B2B model, which would require us to work with institutions that want to improve the mental health status within their workspace. An example is a university that could receive information about the emotional state of their students by using our chatbot. By having a better picture of where critical issues occur, institutions can take steps to change. We have also looked at the option of insurance companies covering our services. This has been challenging because insurance agencies want guarantees regarding the length of treatment and whether it will have an impact on the patient.
PERSONALIZING, SCALING THE NUTRITION BUSINESS
JAVIER
BARRAGÁN CEO of Avena México
Q: Many applications are geared to helping users lose weight. How does Avena differ from other apps in the market?
A: The industry is filled with nutrition-related applications because it is a very sexy industry that easily integrates into anyone’s lifestyle through their phone. Our difference is in our retention rate. Unlike other apps where only 5 percent of users stay with the app after 60 days of use, we retain 50 percent.
Although having an app to regulate nutrition is appealing in many ways, creating the technology is a challenge in the sense that you need to be able to analyze patterns of consumption. You cannot put an entire population in the same category; you have to differentiate between people and treat them differently. We performed a behavioral analysis and instilled the app with a human factor. Rather than just sending notifications to our users, we put a person on the other side of the app. Having a real person asking our users how they are feeling completely changes user engagement, making it a more personal interaction that generates empathy. Although the app itself can easily follow up on a user’s progress, we noticed that having another person do the follow-up elevated engagement and retention levels.
We provide users with a coach who has the tools to analyze the user and generate insights to discern what our users are looking for. People living with diabetes, hypertension or cholesterol also have the option to upload their clinical analysis for us to review so we can offer a better option for them.
Q. What requisites and benefits do nutritionists see when working for Avena?
A: We provide the tool to nutritionists; however, they are in charge of registering their patients and how much they will charge and how to charge their patients. Among the benefits is that they can reduce costs, such as office rent, and can attend patients who live in other cities.
The challenge is scalability. Every nutritionist can treat up to 300 patients per month. However, the market is asking us for personalization and a human touch and these variables are not scalable. This is the challenge: how do we make this business scalable and, at the same time, keep it personal?
Q: What are the unique characteristics of Avena’s business model?
A: Nutritionists buy the software and then pay either US$15 or US$25 to continue using the application. We also charge them a 7 percent commission on every online payment they receive. Each nutritionist decides how much he is going to charge a patient. To date, we have almost 7,000 nutritionists working with us. On the user side, not everyone comes via a nutritionist who is already on the platform. Some people find us as a result of recommendations. These users sign up for a three-month predefined plan. We analyze their profile and assign them a nutritionist who has had patients with similar characteristics. We act as a marketplace for these types of patients.
Q: What strategies does Avena employ to position its app in the market and increase its subscriber base?
A: Our team has an engineering profile, which has allowed us to position our app as one of the best in the country. Since we are market leaders, whenever we release a new feature, our competitors try to replicate it, but since they lack this engineering profile it takes them longer to release new features, or they replicate something that we already know does not work. This gives us an advantage. We do compete with some apps from the US. I believe there is a great deal of competition when teams are highly technical. When it comes to nutrition, you always need to have someone specialized in that; when you are talking about startups you need technical teams and teams that can make a product grow quickly using any medium. If we only used Facebook to promote Avena, we would need to invest a lot in order to be competitive. Our challenge is how to do it in less time and with less money. In Mexico, we have fared very well and at the end of the day, the competition in this type of business is global. We have clients in Mexico, Chile, Ecuador, Canada, Argentina, Colombia, Guatemala and even some in the US. Brazil is the only country in Latin America where we do not have clients.
Avena is an app that combines AI and nutrition consultants. It provides users with a nutrition adviser and personalized plans to help change their health habits, lose weight and lead a healthy life. Avena is available at Google Play and the App Store
STARTUP BETS ON VIRTUAL REALITY TO TREAT MENTAL DISORDERS
JOSEP TOMAS CEO of Miyabi Labs
Q: What are the main benefits of using Miyabi Labs’ technology to treat ADHD?
A: Miyabi Labs’ technology acts as a support system for cognitive-behavioral therapy in the treatment of ADHD. We are not a replacement but a supporting tool that specialists can use to treat this disorder and improve the patient’s results.
Patients receive many different benefits from using our equipment. Virtual reality allows us to control the environment the patient is subjected to, removing stimuli from the real world and presenting them with a controlled vision. The system can simulate everyday tasks in a controlled environment that the patient can then perform in the real world. Children often dislike regular therapy but find virtual reality to be a fun and engaging experience, which leads to higher treatment adherence. Some therapists have already successfully incorporated this technology to their regular practice and have improved patient engagement.
Q: How is Miyabi Labs working to promote the use of virtual reality as part of the treatment for ADHD?
A: We are working with universities to develop clinical research protocols and with psychologists so they can incorporate our system into their practice. We are also working with school psychologists so they can use this at their schools. One of our goals as Miyabi Labs is to positively impact society. We have a support group for mothers of children with ADHD, which allows us to provide mothers with personalized support. Our ultimate goal is for our equipment to be available at patients’ homes to support parents of children with ADHD. Our shortterm goal is for the equipment to be available at specialists’ offices and in schools.
Q: How can technology help patients become more actively involved in their care?
A: Children with ADHD face problems in their neurological development, which can become a handicap and affect their quality of life and normal development. For some, these problems manifest as an impediment to developing social relationships. For others, it reflects in poor academic performance or poor work life later on. Those who suffer from ADHD are often highly creative and intelligent but face
several issues to develop their abilities. They also often lack social abilities. Being able to tackle these problems provides individuals with the necessary tools to live a normal and successful life.
Q: What are the main challenges Miyabi Labs faces to fully penetrate the Mexican market?
A: Ignorance and reticence are the main barriers. Some medical professionals are unaware of the benefits of new technologies and others are reticent to use them because they think this technology could become their competition. Investors are also often reticent to invest in healthcare in Mexico as they believe the sector to be too risky. Mexico has a poor investment culture, unlike the US or Europe where investors are more willing to enter the healthcare sector.
Q: How can Miyabi Labs’ technology contribute to the treatment of other disorders?
A: Our product does not only address ADHD but also helps manage other neurological development problems, such as autistic spectrum disorder. There are no limitations for our growth as our system can be adapted to fit the needs of any country. The only barriers are the cultural differences in handling development problems specific to each country. Some cultures, for instance, reject medication or other types of treatments. At this point, we are operating in Guadalajara and our goal is to bring our products to Mexico City. We expect to continue growing alongside the Mexican healthcare industry, which grows steadily year after year. Moreover, WHO has singled out mental health as one of the main global problems to tackle in the midterm, meaning many more opportunities for us. Technology is taking an increasingly important role in the treatment of mental diseases. New technologies, such as virtual reality, will help to manage many more mental issues, such as phobias or phantom limb pain.
Miyabi Labs is a virtual reality startup that developed a support treatment for Attention Deficit/Hyperactivity Disorder (ADHD) and other neurodisorders. It was developed with initial support from CEOCYTJAL, the Government of Jalisco, Balero and GSVlabs
USING TECHNOLOGY TO CONNECT A FRAGMENTED SYSTEM
LUIS LOJERO CEO of Mural Med
Q: What is Mural Med’s value proposition and how can it help different actors in the health sector?
A: Mural Med’s goal is to solve the fragmentation of the health sector. We generate a variety of tools or modules that function either jointly or independently, depending on the needs of our clients. We define our complete solution as a population health manager, but clients can adopt separate modules intended for patients and doctors. The modules that interact with patients offer a web portal and a concierge chatbot with AI that provide appointment scheduling services and information regarding health services to patients.
Our clients can be any player in the health sector with large groups of patients, including insurance and pharma companies, hospital networks and private practices. Whenever a client implements one of our solutions, their patients have access to a portal or chatbot to learn about services, schedule an appointment, see their clinical information, set reminders to take their medicines or schedule a checkup.
In addition to services and scheduling management, we have a clinical module for health professionals. For this module, we have generated important alliances, such as with VIDAL Vademecum for e-prescriptions. This integration allows us to prevent prescription errors. When more than one doctor is involved in a patient’s treatment, coordination is complicated. But when everything is integrated through our solution, the system checks there are no negative drug interactions, no surpassing of the maximum dosage per adult, no counter-indications due to allergies or because of other medical conditions such as chronic kidney disease. The system creates an alert to prevent any problem a prescription might generate considering the patient’s profile or any type of medication they might be taking.
Mural Med is a digital platform developed by the company of the same name that provides tools to manage health populations. Mural Med registers patients’ clinical information over the life of their treatment
Q: How can Mural Med’s system promote better collaboration between health providers and other industry players?
A: Usually, our clients experience problems accessing information efficiently regarding everything that happens to their patients. It is a complex problem because most clients do not offer an integral health service. This complicates the centralization of information. However, that is what we strive to do. With our modules, each player has its own tool for interaction. When we integrate all the data, we not only optimize and make the operation more efficient but also improve other aspects like patient satisfaction, problem visibility and availability of information for prevention and early detection. Each health service provider, with the patient’s consent, can choose to share certain information to make processes faster and efficient. Patients themselves can access their clinical medical record and information and share it with other players in their treatment and health journey.
Q: Who are the most common clients that Mural Med works with?
A: Insurance companies and pharmaceutical companies that manufacture patented medicines have the largest patient groups and the most complex patient management problems. These are entities that are willing to pay since our offering has a very clear impact. The next group of clients includes specialized clinics that want to have a competitive operational advantage over other players. The third group includes hospitals or networks of private practitioners. For this group, we have yet to find the best possible incentives. It is a more complicated group but we believe they will gradually have to increase their efficiency and transparency, so we expect them to also become an important client segment.
We are piloting a product with doctors in private practices. The solution we are proposing for them is a clinical file with management tools that is independent and private but that allows them to share the information with other players in the sector. With this, we can start automating processes throughout the health value chain, for instance, with payment authorizations from insurance companies. With Mural Med, doctors can send their medical report to an insurance company.
DIGITAL TRANSFORMATION COULD BLINDSIDE HEALTHCARE
DAVID POTES
CEO
and Co-founder of Apolo Health
Q: What are the main trends you see in the health sector at the moment?
A: Many hospitals think they are doing just fine, ignoring the fact that healthcare is changing rapidly. A transformation similar to what visual media encountered with Netflix is coming to healthcare and many institutions are not prepared for this kind of disruption. Traditionally, healthcare is about a consult between a doctor and a patient. However, more and more businesses are springing up that offer health services in alternative ways using new technology.
Treatments can also be provided outside the hospital through new innovations and better communication platforms. Due to the rise in chronic diseases, the needs
of patients are shifting away from simple hospital visits. Healthcare is increasingly becoming preventive as opposed to solely curative. All these changes require new forms of cooperation. Traditional industry players have reacted by seeking more collaboration and, for the first time, I have seen hospitals and insurance agencies sitting down at the table to discuss how they can best work together. Yet, they are still far behind in terms of confronting the challenges ahead.
Apolo Health is a digital integrator of health services for hospitals. It offers two main services: Apolo Intel, which provides advisory services, and Apolo Engagement, which allows healthcare providers to create and build relationships with patients
A PLATFORM FOR DOCTORS, BY DOCTORS
TOMÁS IGLESIAS
CEO and
Co-founder
of OMI
Q: What is the main added value offered by OMI and its platform?
A: OMI is one of the first and few technology companies with a doctor as its founder. Most applications and platforms in the market are created by people from diverse professions who do not belong to the health sector. This means that these applications do not include the vision and needs of the doctor, resulting in an app that is difficult to operate by doctors. Therefore, OMI’s first and foremost strength is that it is a platform for doctors created by a doctor to centralize administrative and clinical information regarding patients. Since patients own their clinical information, OMI makes their files transferable to other platforms, giving doctors access to a patient’s personalized and real-time information. Patients, however, still own and manage their data freely.
Q: What complications can arise from applications that do not consider the doctor’s needs?
A: A patient’s medical evaluation is based not only on a physical examination but on the conversation with the patient, from which doctors can glean relevant information about the patient’s lifestyle. When an application does not consider the doctor, it forgets to include aspects and observations that are key to a correct diagnosis. This translates to a treatment that can be detrimental to patients’ health.
Organizador Médico Integral (OMI) is an electronic platform for managing clinical and business information. Its settings include a personalized agenda, quick access to patients’ clinical history and real-time notifications on a patient’s condition
FUTURE OF ORTHOPEDICS RIDES ON EQUINE BONE TISSUE
LORENA TIRADO
Director General of Alternativa Médica Integral
Q: What made Alternativa Médica Integral the ideal company to represent Bioteck in Mexico?
A: Alternativa Médica Integral is the only official distributor in Mexico of the Bioteck brand. Bioteck is an Italian company founded in 1995 and the leader in the production of bone grafts for neurosurgery, orthopedic surgery and oral and maxillofacial surgery. We are the best partners for Biotech in Mexico because we know the market and we know how to introduce innovative products to the country. Alternativa Médica Integral has developed two flagship products, bone chips and bone matrices, which are used to fill cavitary defects resulting from excessive bone wear.
Q: In 2015, more than 340 surgeries used Bioteck bone grafts. How has penetration of this technology advanced in recent years?
A: Our plan was to grow 10 percent annually. However, thanks to our successful collaboration with ISSSTE since 2017, we have grown our participation in the public sector at an annual rate of 100 percent. Although public tenders have favored us in recent years, we are aware we must diversify our focus beyond the public sector. As a result, we estimate our real yearly growth at an average of 50 percent between the public and private sectors. Our distribution network has helped us grow our presence in Monterrey, Queretaro and Morelia on both fronts but our development overall has been driven by the public sector.
Q: How do Bioteck bone substitutes support the healing of bone defects?
A: Our client doctors say that in comparison to other products used for the same purpose, Bioteck’s solutions have better osseointegration. They are also 100 percent natural. During the 13 years that Biotek has been operating in Mexico in the oral and maxillofacial area, there have been no cases of rejection or postoperative infection. To ensure successful
Alternativa Médica Integral is a distributor of specialized surgical medical products and materials. It is the exclusive and official distributor of the Bioteck brand, which offers innovative solutions in bone regeneration
results, each year we take a group of doctors to Italy to see how Bioteck products are made. The company’s Zimoteck cleaning process for obtaining grafts does not use chemicals. It employs enzymes to remove inorganic contaminants and leave only the bony mining structure. This minimizes rejection and infection risks because there is no remaining biological material from the harvested animal.
Q: What are the benefits of using equine bone grafts?
A: Bioteck originally worked with porcine bone grafts but this required too many permits in Europe to allow the products to be marketed and limited the possibility to cover worldwide demand. The main limitations were related to religion and culture, so the idea of using equine bone grafts arose. Northern Italy consumes a large quantity of horse meat and the bone of this animal is strong, due to its constant movement and its anatomical composition. Also, equine-derived grafts have no cultural or religious restraints, which made it possible for Bioteck to market these products in 70 countries.
Q: Who can benefit the most from using Bioteck’s grafts?
A: Our grafts are for everyone but they are most useful for patients who have a higher sensitivity and a greater probability of graft rejection. A doctor from a hospital we work with told us that he had a case of a 43-year-old patient who had damaged his vertebrae in a skiing accident. This patient tried grafts of different origins, even human, but his body rejected all of them. The doctor came to Alternativa Médica Integral because he had heard about the benefits of our products. Six months after surgery, the patient seemed to have accepted the graft and his recovery was going well.
Q: How will Bioteck’s technology impact the development of Alternativa Médica Integral?
A: Originally, bone grafts were done using the bones of the patient receiving the graft. As technology and research progressed, innovative grafting methods were developed. To this day, Bioteck is the only company in the world that can produce a graft that is clean of any type of infection, including hepatitis, using its Zimo-Teck technology. These advances have had a great impact on the Mexican healthcare sector.
NEW PRESCRIPTIONS INFRASTRUCTURE IN MEXICO
EVERARDO BAROJAS Founder and CEO of Prescrypto
Q: Prescrypto is a digital platform that facilitates communication between doctors, patients and pharmacies. How is your service different from similar platforms?
A: We are 100-percent focused on prescriptions and the prescription process. We are not just an electronic patient database, an electronic health record, billing assistant or a planner that helps schedule consults. Prescrypto contains a catalog of 26,000 medications and other products that require a prescription. The most important thing for us is to establish a streamlined communication between the doctor, patient and other stakeholders, such as a pharmacies. Before us, there was no standard medication catalog in Mexico. There were documents that had information regarding medications, but they tended to be focused on clinical data or were limited to the portfolio of the particular pharmacy that created it. To build our catalog, we had to consult a wide range of sources, from institutions to the web. What is significant is that we do not have a preference between medications. We want to be a neutral platform that offers everything we find and shares data securely safekeeping the doctor’s and patient’s information.
Our platform provides two big advantages. First, it gives doctors a complete overview of different medical options. Doctors cannot memorize an entire catalog of thousands of medications and many more active molecules. Our platform provides a tool for this with up-to-date clinical drug information. The second advantage is for the patient. Our platform ensures the doctor can make a choice with exact information on the dosage and even brand of medication. This ensures that the pharmacy that receives the digital prescription will know exactly what the patient wants, avoiding switching medications at the point of sale. Medications that are switched at hospitals and pharmacies for other brands may have other dosages, side effects or poor results. Our platform attempts to mitigate this and if it does happen, we ensure it is communicated to the doctor.
Q: What role do pharmacies play in your platform?
A: Pharmacies right now interact in a limited way with our platform. We focus on one main stakeholder and two secondary parties. The former is the doctor, since Mexico
is a doctor-driven market. The second stakeholder is the patient who receives the medication, while the other is the pharmacy. We have about 5,000 new patients every month, all receiving prescriptions through our platform. Pharmacies are integrated into our system only when necessary and/or if this is available. We do not require complete integration. The patient can still make use of our app to know what they are getting at the pharmacy. If the pharmacy then requires a printed prescription, the doctor can also provide that. The concept of electronic prescriptions started in 2000 in the US. Infrastructure there has developed to such an extent that around 50 percent of prescriptions are electronic in the US. Mexico is still a long way from this, which puts us in a position to play a strategic role in developing this infrastructure.
Q: What are your plans in terms of alliances with pharmacies and other medication providers?
A: We have several alliances and collaborations with companies, such as Amazon. We also have pilot projects at some pharmacies where we are combining our platform with other applications. Because the technology is relatively new in Mexico, it remains part of an interesting regulatory topic. We started in 2016, at a point when prescriptions still required a wet signature from the doctor. Now, there is a regulation that deems an electronic signature equally valid. Even so, we still ask doctors today to sign the prescription the old way. As time evolves and we continue to build the proper infrastructure, we will move on to an electronic signature.
We consider COFEPRIS an important partner and always aim to provide full transparency in our processes. The commission has approved our system through recognition of three parameters: doctor identification, safety in the channel of communication (information integrity) and avoiding double sales of a same prescription.
Prescrypto is a free app for doctors and patients. It was developed to create, send and track electronic prescriptions. It allows doctors to access a 26,000 product catalog with a unique user experience
HEALTHCARE ACCESS THROUGH SOCIAL PROJECTS
KATTY BELTRÁN
General Director of Fundación Dibujando un Mañana
Q: What advantages do companies get from participating in social projects with Fundación Dibujando un Mañana (FDM)?
A: The foundation has over 21 years of experience in social projects that boost social development in Mexico. Our investment model is based on transparency, efficiency and significant social impact. Therefore, companies that work with us can be certain that their money will be wisely invested and generate the maximum possible impact. To achieve this, the foundation analyzes each project and social organization to measure its ability to generate impact and operability. Later, it determines the investment risk that each represents so it can recommend only those projects that will have the greatest impact and visible results. For the duration of the project, organizations are audited by the foundation at different times and the money is conditioned to the results they deliver. Organizations have the responsibility to implement the project as presented, with the correct procedure in time and form. If this does not happen, the organization is penalized, financing stops and the money that was invested needs to be returned to the foundation. This year, FDM did a study to measure the social impact it generates and the results showed that a peso invested in the foundation equates to five pesos invested in social impact.
Q: How does FDM measure the impact of a project?
A: We are a second-floor foundation, which means we are a social investment organization. Our strength is the measurement of impact and the analysis of civil organizations. We are work with more than 900 organizations nationwide and four in Costa Rica. Measuring social impact begins with the selection of the organizations that apply for a project. We only select organizations that have the experience and capability to implement the project. FDM’s goal is to find the best organization in which to invest and generate the greatest impact. Subsequently, Fundación Dibujando un Mañana measures results by stages and the impact through
Fundación Dibujando un Mañana is an ally in efficient social investment. The company has 21 years of experience advising enterprises in which organizations and projects to invest, generating sustainable changes to give children and adolescents
reports elaborated by the organizations and an audit done by the foundation.
Q: What have been the most emblematic projects in which FDM has participated in the health sector?
A: The foundation has completed two projects in the health sector and has one in the making. The first project, called A Hospital for All, was based on the remodeling and equipping of Mexico’s General Hospital Dr. Eduardo Liceaga pediatrics’ area with the collaboration of the Naro Contigo Foundation. Through this collaboration, the Ministry of Health donated MX$15 million (US$780,000) and the foundation gathered another MX$15 million (US$780,000) through donations from different companies. The second project is an Alliance with Promotora Social Mexico called United to Give. This collaboration has been operational for four years and has benefited 38 institutions that work with over 21,000 children and adolescents with disabilities and a variety of health conditions in 13 states.
FDM’s most recent project is the remodeling of the hospital in Valle de Bravo. This transformation will strengthen the hospital’s capability to provide healthcare to ensure it covers the needs of the municipality and nine others in its periphery. The remodeling goes beyond infrastructure, since FDM is working to create a health network in the municipality and avoid saturation at its only clinic. The project is in the initial stage of deciding its construction model. Once this is finished, the foundation will seek to involve all industry sectors: government, private companies and nonprofit organizations.
Q: How do private companies get involved in projects?
A: Their participation depends on the type of project and the company’s expertise. For example, FDM developed a project called Community Integral Development Center (CEDIC) that sought to improve the lives of children of workers and residents near the communities of Chimalhuacan and Nezahualcoyotl. Children live close to the recycling work in the Xochiaca Board, which is the biggest open-air trash dump in Latin America, so the goal was to provide them with a place where they could have access to health, education and nutritional services.
IMPROVED CARE THROUGH PREVENTION, AWARENESS
ROBERTO TAPIA-CONYER CEO of Fundación Carlos Slim
Q: How is Fundación Carlos Slim using technological platforms to improve healthcare standards?
A: Our platforms PIEENSO and Aprende.org address certification and training for healthcare personnel, mainly for primary care workers who usually have fewer opportunities for training. These professionals work most closely with the general population because they oversee prevention and care of 85 percent of all diseases. As a result, they require continuous training to have up-to-date knowledge. We have developed diplomas in mothers’ health and immunology, which are essential for primary care professionals. PIEENSO’s programs and syllabi were based on patient needs and are validated by UNAM.
Q: Which new platforms is Fundación Carlos Slim developing now?
A: In 2019, we will focus on developing an app that will allow us to communicate with patients and provide them with cellphone access to the health information they need. We will focus on creating a healthcare ecosystem. Our platforms will allow us to use data science to benefit patients through better medical interventions. We work with national and international players to develop these courses because we believe in the importance of keeping healthcare professionals up to date in their medical knowledge. All our platforms are built in close collaboration with medical professionals, as well, to ensure they are easy to use and sustainable in terms of growth.
Q: What is the foundation’s CASALUD program’s role in improving healthcare policies?
A: Close monitoring helps people keep chronic diseases under control. In March 2015, only 10.4 percent of diabetics had tested their glycosylated hemoglobin levels and 36.1 percent of those had it under control. By May 2019, 52.2 percent had taken the test and 44.3 percent had it under control. CASALUD’s goal is to support the Ministry of Health’s efforts in terms of prevention. CASALUD is a digital platform at healthcare units located in public spaces, such as metro stations, where people can receive checkups and orientation regarding their health. By May 2019, CASALUD’s MIDO program has provided care to 1.32 million people and
throughout its history, the program has diagnosed 86,117 cases of diabetes, 136,106 cases of prediabetes and 121,605 cases of hypertension. To date, the Ministry of Health has diagnosed 1.85 million Mexicans with at least one chronic disease using its 12,413 healthcare units. Of these individuals, 1.08 million were diagnosed with diabetes, 1.21 million people with hypertension, 699,399 with obesity and 519,297 with dyslipidemia. Of the 1.07 million diagnosed with diabetes, 52.2 percent received a glycosylated hemoglobin test and 44 percent had it under control. We support the Ministry of Health by collecting information from the country’s healthcare units and processing it to improve the ministry’s decision-making process when crafting public policies.
Q: How is the foundation using IoT principles to improve care standards?
A: Using digital health tools allows us to provide personalized healthcare. Through Big Data, we were able to classify patients into 21 profiles and provide them tailored recommendations according to their needs. This project began in 2016 and has gradually expanded. In addition, its goals include improving measurement strategies during pregnancy, focusing on a number of areas. The first is to predict whether a patient is at risk of gestational diabetes, as about 10-12 percent of pregnant women are at risk of developing this condition. In most cases of gestational diabetes, the symptoms disappear after birth but in about 40 percent of cases the patient remains at risk of developing diabetes later on. The second is to diagnose pre-eclampsia, a pregnancy complication that increases blood pressure and one of the main causes for maternal death. The third objective is to measure excessive weight gain, which might lead to pre-eclampsia or to gestational diabetes. The fourth is to prevent premature births, which are most commonly caused by urinary tract infections. The last objective is to eliminate mother-to-child transmission of HIV and syphilis.
Fundación Carlos Slim is a nonprofit Mexican civil association. It was created in 1986 by Carlos Slim to promote the integral development of Mexican and Latin American society. It implements programs to bridge the health gap
Q: What benefits can patients get from using Epifast and how does this differ from traditional skin burn therapies?
PR: Epifast is a biotechnological product made from a human keratinocyte cell bank that is capable of releasing growth factors. These growth factors promote a faster and better epithelialization process. In the 1980s, the most common treatment for burn patients was to do an early surgical excision of the burned zone, but separation of bedsores could last for several weeks before the excision could be performed. Advances in regenerative medicine like Epifast help patients recover faster and better. Therefore, the probabilities of infection, complications and time of hospitalization are greatly decreased.
Epifast is a biotechnological product made from a human keratinocyte cell bank that is capable of releasing growth factors
Q: Which patients could benefit the most from Epifast?
PR: Bioskinco’s biotechnological solution can be used for treating any condition of loss or damage to the skin. It is commonly used for burns because that is the line of research and development. However, several clinical studies and medical treatments have shown successful results on the healing of wounds like venous leg ulcers, diabetic foot and complex wounds.
PV: Epifast is an excellent treatment option for patients with loss of skin integrity. Its benefits are well-supported for burn patients and we have clinical evidence for the treatment of immune diseases such as epidermolysis bullosa or toxic
Bioskinco specializes in the manufacturing of Epifast, a human-cell cultured epidermal allograft for the treatment of burns, skin traumas and chronic wounds. It is a spinoff of CINVESTAV in Mexico
epidermal necrolysis (NET), which are extreme reactions of the body to the intake of medicines. Epifast works well in complex cases because keratinocyte cells release growth factors that act in different layers of the skin.
Q: What benefits do doctors achieve by using Epifast?
PV: Bioskinco is fully committed to quality and supports doctors on how to use the product. Bioskinco’s training not only includes indication, contraindications and applications of the product, we also seek to train healthcare professionals in topics related to the best overall treatment, such as wound bed preparation and basic initial burn attention.
Q: What applications or developments is Bioskinco planning for Epifast?
PR: Epifast was developed in the 1980s based on a 1970s technology that focused on the culture of keratocytes. The great advantage of Epifast is that it was ahead of other products at the time and has become the most valuable contribution to regenerative medicine in Mexico at the moment. The future applications will come from the experience doctors gather from treating all types of wounds and will be illustrated through congresses and clinical trials.
However, Bioskinco does not stop there. The company will continue conducting studies to improve its product in collaboration with the Institute Fraunhofer in Germany. The company will know exactly what it is measuring and check the performance of growth factors being released. There is always the possibility to improve our product and as science progresses, Bioskinco will continue to improve Epifast.
Q: What are Bioskinco’s midterm plans?
PV: Bioskinco will maintain its focus on fostering the best quality of life for those patients who have a complex wound or skin loss due to any condition. Therefore, we will continue working to train healthcare professionals who are dedicated to treating those types of patients. We are also seeking higher availability to benefit most of the patients who need to recover from skin loss. Bioskinco seeks to further develop and improve this product for Mexicans with the highest quality and at a low cost.
REGULATION, AWARENESS KEY TO EXTENDING REGENERATIVE MEDICINE REACH
VICTOR SAADIA CEO and Founder of BioCenter
Q: How are BioCenter and regenerative medicine in general positioned in Mexico?
A: BioCenter is still in its initial stage, especially considering that regenerative medicine remains in the development phase. Our role at the moment is to understand how this branch of medicine will impact the Mexican market, since the topic is fairly new and accessible only to a certain population segment. Even treatment efficacy depends on each person; all solutions are personalized and making statistical projections becomes difficult.
Adoption has also been slow among the medical and pharmaceutical industries because most professionals do not know much about the subject. Traditional medicine is highly methodical and there is considerable skepticism when it comes to new treatments. Furthermore, the medical industry is dependent on pharmaceutical companies that have built truly hegemonic practices. It is difficult to break such an ingrained paradigm. Lastly, regenerative medicine faces issues related to regulation and general understanding of the concept because the science does not refer only to stem cell therapy.
Q: What role can regenerative medicine play in generating a patient-centric culture?
A: People are increasingly willing to invest to stay healthy rather than face the need to combat a disease. Overall, medicine should focus on the patient, not on the disease. Regenerative medicine, like its functional and integrative counterparts, is considered a patient-driven industry, especially as patients are the ones demanding personalized solutions and innovative treatments that focus on maintaining health rather than just acting when the problem appears. These are all different branches but they all share a patient-centric vision focused on medicine being predictive, personalized, participatory and preventive, what we now call “P4 Medicine.”
Access to information has made patients much more participatory in the treatments they get and the practices they adopt, which is key to the patient-centric approach medicine should take. Similarly, patients are increasingly asking doctors
to make recommendations based on nutrition and sociocultural factors to achieve better treatment results.
Q: What alliances have you established to promote the adoption of regenerative medicine?
A: Government participation in regenerative medicine is still limited and it will take time before these treatments become the new normal in that market. However, we have established alliances with different clinics to create panels that can collaboratively participate in developing research and regulatory frameworks.
At the moment, we are lobbying for clear and integral regulations so companies wanting to participate in regenerative medicine can play according to fair and adequate rules. Efficacy tests, for example, must evolve to adapt to the reality of new treatments. Right now, Mexican law demands that companies present statistical data regarding the efficacy of any solution, which would equate to presenting phases I through IV of a medical trial. However, given the nature of regenerative medicine, no two patients receive the same treatment or dose, so it is impossible to provide such data.
Q: What are the main trends impacting regenerative medicine?
A: There is a legal dispute regarding the differences between hematopoietic and mesenchymal stem cells, which is why we are pushing for different regulation relating to each type of cell. We are also trying to define marketing guidelines so companies looking to enter the market can understand how to promote their products while avoiding false promises from less serious players.
Medical tourism is also a hot topic in regenerative medicine, especially considering Mexico’s attractiveness to US patients in terms of price and quality and due to the legal limitations regarding these treatments in their home country.
BioCenter is one of the major Mexican companies leading the introduction of regenerative medicine into the country. The company is shaping a sector that will grow exponentially during the next decade
MAKING THE MEDICINE OF THE FUTURE ACCESSIBLE
GILBERTO MEDINA
Director General of Novogen, Part of IVG Group
Q: What led to the creation of Novogen and how is the company working to meet the industry’s needs?
A: For many years, the industry has talked about having personalized medicine that generates an intrinsic benefit for the patient. Novogen identified this as a business opportunity and a way of benefiting the community. We created a business proposal that merges two factors, our laboratory’s specialization in genomics, genetics and molecular biology and our collaboration with international laboratory equipment and reagent manufacturers. All this with the goal of contributing to an improved clinical diagnosis.
Q: What are the potential uses of personalized medicine based on genetics and genomics?
A: Laboratories that constantly launch new pharmaceutical products make significant investments in statistical population studies to develop personalized medicines for specific diseases. What our technology can do is provide precision in diagnosis. We are launching a characterization system for certain types of cancer that is directed toward supporting doctors with their diagnoses and final prescriptions. This can also have a positive effect on patients because doctors will know from the first moment the type of therapy they should use, eliminating the possibility of prescribing inadequate or dangerous treatments.
With our system, doctors receive an insightful report that states which treatments are recommended given the mutations related to these particular diseases. Specific variants present in different types of cancer are associated with an increased sensitivity to particular medications. This could be extremely beneficial for oncologists and patients, since most targeted therapies are associated with similar or higher effectivity but fewer side-effects when compared against conventional therapies. At our lab, we have NGS panels used to study breast, ovary, lung and colon cancer,
Novogen, part of IVG Group, provides advanced nucleic analysis techniques for paternity tests, human identification services, rare disease diagnoses, Sanger, next-generation sequencing and metagenomic analyses
as well as melanoma. We are considering adding a panel for leukemia and the idea is to have at least one service for all types of cancer.
Unlike other laboratories or genomic services, we strive to provide the doctor with functional and relevant information only. We do not intend to sequence all genes in the human body and then provide a report on our discoveries, but to focus only on the most relevant information for disease treatment. That is our main differentiator and where we saw the largest market opportunity. Unlike other alternative tests in the market, we provide the doctor with flexibility regarding access to the available information and if the doctor wants to, we can select only certain pieces of data. Novogen also is a 100 percent Mexican laboratory, which means we can advise the doctor in the interpretation process as well. We try to provide a concise and easy-to-interpret report, so the doctor has all the information needed to determine the best treatment for the patient. Should doctors require more information, they can access all the databases we used and the informatic algorithms that processed the information, which are in a 100 percent integral AI platform that detects and classifies genetics variants associated with the disease and treatment recommendations.
Q: What is Novogen’s client distribution between the public and private sector?
A: For oncology tests, we only focus on the private sector. We are presenting the project to the pharmaceutical industry and to insurance companies. Thanks to the alliances we have made, such as that with Grupo SOHIN, we have made significant progress with insurance companies and have obtained a pre-approval from some of the most important insurance companies in the country. Our main concern is being able to reach a larger market so we can benefit more people. We are open to working with the government and analyzing how we can collaborate to benefit the entire sector. The ideal scenario should be to democratize personalized medicine and for this to happen, the public sector must be involved. A good diagnosis is beneficial to everyone and helps to save costs for patients, doctors, pharmaceutical companies, insurance companies and hospitals.
ACCESS TO GENETICS WOULD IMPROVE PREVENTION, TREATMENTS
JORGE MORAN Director General of Genetics and Health
Q: What added value does Genetics and Health offer to hospital and clinical laboratories, as well as patients?
A: Genetics is a completely different business compared to traditional medicine. Furthermore, geneticists have a significant opportunity to learn how to communicate with doctors and most specialists have no complete knowledge about genetics, which means there is a general lack of understanding of what this science can do for medicine today. When I entered the company in 2017, I realized there needed to be a point of connection between the company and its clients. We decided to build our sales force with doctors who could help their fellow physicians understand our analyses and offer a solution that matched the patient’s needs, an approach that has had great success.
Another advantage Genetics and Health offers is access to genetics tests for the general population. In Mexico, these tests are not covered by most insurance policies and there is almost no access to these solutions in the public sector. This means patients seeking these services must pay out of pocket, thus making genetics tests an option only for the high-income segment. We devised financing alternatives so patients could defer payments for tests that can range from MX$10,500 (US$550) to MX$150,000 (US$7,830). For example, if patients can prove their monthly income is lower than MX$17,000, they can access an interest rate that is three times lower than the average offered by banks.
Q: How can Genetics and Health grow its participation in the public sector?
A: Most of our revenue comes from the private sector, and the high-income population segment in particular, working with high-end hospitals. Having said that, our business model is more geared toward doctors’ offices. All but one of our tests require a sample of dry blood on a piece of paper to perform the analysis. Doctors can do this at their office and just send the sample to us in an envelope, thus avoiding having to send a blood vial to a laboratory for proper storage and shipment.
However, there is a massive opportunity to grow our participation among the low-income population through the public sector. We have already presented a project proposal to
the government on how we can address the costliest disease for the government: diabetes. Previously, we approached the Senate to explain the relevance of making genetics tests available to the entire population.
According to global standards, effective breast cancer detection methods must identify 75 percent of all cases on time. However, in Mexico, only 23 percent of the cases are detected in a timely manner, according to the Ministry of Health. The government has invested in CAT scan equipment and prevention campaigns but nothing seems to do the trick. We participated in a roundtable with INCan, the Ministry of Health and other institutions to discuss the role of genetics in early detection of breast cancer, where we highlighted that patients with a genetic mutation linked to breast cancer have a 60-80 percent chance of getting the disease.
Q: What are the main contributions that genetics can make to medicine?
A: Approximately 30 percent of the newborns entering intensive care die because of an improper diagnosis or a lack of a diagnosis. Genetics could help identify genetic illnesses more easily allowing doctors to build a proper treatment strategy for these children. Unfortunately, there are cases when our tests determine there is absolutely nothing to do because the genome combination of the mother and the father is deadly. The situation cannot be reversed but patients do not have to suffer through unnecessary analyses like CAT scans, magnetic resonances or other, more invasive tests.
We have mapped seven different treatments in our OncoPrecision Breast Care genetic panel for breast cancer and based on the metabolic analysis of the patient, we can determine the correct dose and treatment that should be administered to avoid intoxication and ensure efficacy. Our goal is to release a similar panel for prostate cancer in 2019.
Genetics and Health is a Mexican company that provides genetics tests to prevent, diagnose and treat diseases. The company works with leaders in the genetics area like CENTOGENE and GENYCA
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
AR Augmented Reality
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
SP Seguro Popular
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
